Willis v. First Nat. Bank of Burkburnett

262 S.W. 851, 1924 Tex. App. LEXIS 1058

• Court: Court of Appeals of Texas
• Decided: April 9, 1924
• Docket: No. 2310.
• Status: Published

Opinions

HALL, C. J.

The appellee bank filed this suit to recover upon a note in the sum of $14,082.41, signed Carey Bros. Oil Company, by Guy Rogers. The note is indorsed by the following parties: C. W. Carey, E. S. Carey, R. R. Carey, Guy Rogers, W. T. Willis, and J. E. Childers. It is alleged that the indor-sers were partners, doing business under the firm name of Carey Bros. Oil Company.

The appellant Willis filed an answer, denying his liability upon the note, and alleging that he sold his interest in the partnership on the 20th day of May, 1920, to E. S. Carey, under a contract which bound the said Carey to assume and pay his portion of the note sued upon, together with his portion of. certain indebtedness to the City National Bank of Wichita Falls; and, in addition thereto, .the said Carey promised to pay him $2,000 for his interest in the partnership property. He further alleges that he indorsed the note sued upon for the accommodation of E. S. Carey, and prayed for judgment over against Carey by virtue of the terms of the contract of sale. The defendant E. S. Carey admitted that 1 he bought the interest of Willis in the Carey Bros. Oil Company, but denied the contract to be as alleged by Willis, and averred that tbe agreement was that be was to pay $2,000 for said interest, in tbe event tbe lease wbicb was owned by said partnership yielded enough to said interest to pay said $2,000; that said Willis was not to be relieved of any of the indebtedness of tbe Carey Bros. Oil Company existing at that time, but that he was to pay bis portion thereof, including bis pro rata share of the note in suit and also his share of about $30,-000 indebtedness to the City National Bank. He alleged that he was compelled to pay Willis’ portion of the indebtedness to the City National Bank, and did pay it, because •of the fact that he and Willis had another partnership known as Carey-Willis Drilling Company, and that the said Willis had collected $72^000 worth of indebtedness due said partnership by taking a promissory note covering said $72,000, payable to himself, instead of the firm, and that notwithstanding the contract with Willis for the purchase of Willis’ interest in the Carey Bros. Oil Company, the said Willis refused to allow him to have any part of the $72,000 unless the defendant would pay his portion of the City National Bank of Commerce judgment and his portion of the note herein sued on. Carey further alleged that in order to get his share of the $72,000, he paid these claims under protest, and was seeking to recover-said sums in this suit.

By first supplemental answer the defendant' Willis alleged that on or about the 3d day of February, 1022, he made a complete settlement with his codefendants, Carey Bros., in so far as their claim set up in their cross-actions are concerned, said settlement being made with particular reference to E. S. Carey, whereby and wherein it was again agreed and understood, as it had been originally on the 20th day of May, 1920, that all of the liability of the said Willis in any and all obligations of Carey Bros. Oil Company, arising against him by virtue of his at one time being a member of said concern, and an indorser of some of its paper, would be paid off, discharged, and satisfied by E. S. Carey, primarily with the codefendants, C. W. Carey and R. R. Carey, as his sureties ; that in pursuance of said contract and as t>art consideration therefor he assumed in his own right and as his own personal liability and secured the release of E. S. Carey from a joint obligation to the Wichita State Bank & Trust Company, which said obligation he has since paid in full;-that but for the agreement of the Carey Bros., as aforesaid, and their payment of the sums, of money in their cross-action set out, and their contract with this defendant to pay all claims of Carey Bros. Oil Company, in any way chargeable to this defendant, this defendant would not have assumed the great liability nor secured the release of said Carey from the aforesaid obligation due the Wichita State Bank & Trust Company; that-in further pursuance of said agreement and understanding and as part of the consideration therefor, this defendant secured for the said Carey Bros, a complete release except as to four-ninths thereof of a judgment approximating $30,000 due the City National Bank of Commerce for which said Careys were primarily liable, jointly and severally, with this defendant; that he procured such release relying upon the promise of said co-defendants to pay off all' claims, accounts, choses in action, and judgment that might be or arise for payment against defendant as aforesaid; that in pursuance of said contract and agreement this defendant released for the account and benefit of the afoi’esaid codefendants, a large sum of money in his then possession, which was accepted by said codefendants and which was surrendered in full reliance upon the above-mentioned contract and agreement of assumption and indemnity, and but for which this defendant would not have released said money. All of which facts this defendant pleads in bar and in estoppel of the matters claimed by his codefendants in their cross-action.

The defendant further pleaded that he signed the obligation as an indorser oñly and at the request and for the accommodation of his codefendant E. S. Carey, for whom he is merely an accommodation surety. The defendants Guy Rogers, W. T. Willis, and J. E. Childers pleaded in abatement of the plaintiff’s cause of action the fact that there was now pending in the Eighty-Ninth district court a suit between the same parties involving the same subject-matter, in which the bank had intervened, asking a judgment on the note herein sued upon. The judgment of the court contains this recital:

“Thereupon the defendants, Guy Rogers, W. T. Willis and J. E. Childers, presented to the court their plea in abatement filed herein, whereupon it was announced in open court that plaintiff would prosecute its suit against the defendant as indorsers only, whereupon said plea in abatement was overruled.”

By a second supplemental petition the defendant Willis'alleged that as to all the matters and things set up in the cross-action filed by the defendants, E. S., C. W. and R. R. Carey, there had been a settlement and accord 'and satisfaction, and all parties thereto had been discharged; that such differences were settled and satisfied during the first of the year 1922, wherein as a part of said general settlement it was agreed that W. T. Willis should be protected from the Carey Bros. Oil Company’s obligations and his liability thereon, and that his part thereof would be and was paid by E. S. Carey in pursuance of said settlement. The case was submitted to- the jury upon special issues, in response to which the jury found as follows:

. “(1) At the time the defendant E. S. Oarey acquired the one-tenth interest of the defendant W. T. Willis of the Oarey Bros. Oil Company, it was not agreed and understood that E. S. Oarey would assume and pay off W. T. Willis’ portion of all outstanding indebtedness.

“(2) At the time E. S. Oarey paid the one-ninth part of the indebtedness in question, he did so because W. T. Willis refused to allow him to have his interest in the said $72,000 note executed by R. M. Waggoner to W. T. Willis.

“(3) There was no settlement in January, 1923, had between W. T. Willis and E. S. Oarey of differences existing between, including the matter in, controversy between them in this lawsuit.

“(4) At the time E. S. Oarey bought a one-tenth interest in Carey Bros. Oil Company from W. T. Willis, he (E. S. Oarey) did not agree to assume the 'then indebtedness against the interest which he bought.”

Guy Rogers and J. E. Childers pleaded that they were subsequent indorsers to the Oarey Bros, and were not liable as original makers. The suit is against all of the defendants as partners. The note upon which the action is based is a partnership debt, and the fact that the individual partners indorsed the note, instead of signing upon its face, does not change their liability as between themselves. There was an agreement made in open court and recited in the judgment, to the effect that the bank would prosecute its suit against the defendants Guy Rogers, W. T. Willis, and J. E. Childers, as indorsers only. This stipulation was entered into in consideration of the waiver by the above-named defendants of a plea In abatement which they had filed, setting up the fact that the matters in controversy in this suit were also issues in a different suit between the same parties pending in the Eighty-Ninth district court. This stipulation is binding upon the bank alone, and under its terms the liability of the above-named three defendants to the bank is governed by the law' as it applies to the indorsers.

The pleadings of both Willis and E. S. Carey show that the written release and the note given by Oarey to Willis, for $2,000, are only parts of the contract referred to in their respective pleadings. The material parts of the contract rest in parol, and the court did not err in permitting the evidence from both parties as to its terms. Willis alleged a certain contract, and even under a general denial Oarey shbuld have been-permitted to prove an entirely different contract.

It was not necessary in this case for the court to require an accounting of the partnership business. Transactions in two different partnerships are involved in the suit. Willis and E. S. Oarey, doing business under the firm name of Willis-Carey Drilling Company, had' ceased operations, and complete settlement of its affairs had been made, at a time when Willis and E, S. Carey owned the entire business. Carey Bros. Oil Company, the partnership involved in this suit, was originally composed of ten partners —one of them was insolvent and had left the state. The case was tried upon the theory that the remaining nine partners were responsible each for one-ninth of the indebtedness sued upon. The controversy between Willis and E. S. Carey is based upon a separate and individual agreement between them, in which none of the other partners are in any way interested, and therefore a general accounting of the business of Carey Bros. Oil Company was unnecessary. Lingner v. Gaines (Tex. Civ. App.) 244 S. W. 205; Peck v. Powell (Tex. Civ. App.) 259 S. W. 640.

The court did not err in submitting the issues above set out. The first issue, as to the agreement and understanding that Carey would assume and pay off Willis’ portion of the outstanding indebtedness of the Carey Bros. Oil Company, was made by the pleadings and the evidence. The second issue submitted to the jury the question of duress, which was also raised by the pleadings and evidence of both parties. The third issue called for a finding upon the defense of accord and satisfaction pleaded by Willis. These issues present ultimate facts for the determination of the jury, and we think were properly submitted.

The evidence as to the market value of the lease owned by the partnership at the time of the sale was material evidence affecting the contention that Willis was to receive $2,000 cash and be relieved of liability for any of the debts of the company, and, if the appellants did not desire to have the effect of the testimony limited to that point, it was their duty to request a special instruction.

The next contention to be considered is that where it is undisputed that a written contract was entered into between two parties which was a part of the general settle? ment of various matters existing , between them, and where it is provided in said writing that a certain indebtedness over which there was a controversy was determined and declared by said contract to be due and owing by one of the parties, and where that party accepted said contract and received benefits under it and other party acting under it relinquished valuable rights and paid out money in accordance therewith, the contract was supported by a valuable consideration and should have been given controlling effect by the court in settling the issues as to whether said indebtedness was the indebtedness of said party upon whom it was placed by said contract. _ We presume that this contention is based' upon the written release given by the bank to the three Careys. It appears from the record that Ed Carey paid two-ninths of- the judgment which the City National Bank of Commerce held against the Carey Bros. Oil Company, and each of his brothers paid one-ninth. The record shows that they did this in order to be released from any further liability on this judgment. Willis signed this release at the request of the attorney of the bank. The release recites that it shall in no wise affect the joint and several liability of W. T. Willis, J. E. Childers, H. D. Lewis, and 'M. J. Michaelias as to the balance due on said judgment. The record shows that Willis agreed that the .release should in no wise affect his joint and several liability for the remainder of the judgment, but that he assented to it without prejudice to his right of contribution against the Carey Bros, for any amount which he might have to pay upgn any obligation of Carey Bros. Oil Company that it should not affect his right of contribution against any of the other partners of the Carey Bros. Oil Company. This writing, in the light of the oral testimony from both parties, has no bearing upon the question of accord and satisfaction pleaded' by Willis. The jury found that there had been no accord and satisfaction, and there is ample testimony in the record to sustain the finding. Under the evidence it was purely a question of fact. If there was no accord and satisfaction, then the issue of duress of property becomes immaterial. E. S. Carey pleaded duress as a defense in avoidance of the plea -of accord and satisfaction set up by Willis.

There are some blanks left in the first amended original answer, filed by the Careys, where they allege the amounts which have been paid to the bank and upon the judgment, but no special exception was urged to the pleading, on this ground, and the defect is waived, and, moreover, it is harmless, since the evidence shows the amounts which should have been inserted.

It appears that the judgment as entered below is excessive in the sum of $247.35. If a remittitur of that amount is entered in this court within the next 15 days, the judgment will be reformed, fixing the liability of Rogers, Childers, and Willis, as indorsers, and as reformed will be affirmed. If a remittitur of said sum is not entered within 15 days from this date, the judgment will be reversed, and the cause remanded.

BOYCE, J., not sitting.

1 Reported In full in the Southwestern Reporter; not reported In full in 121 Arkansas Reports.