Opinion
No. 3899.
December 11, 1930. Rehearing Denied December 18, 1930.
Appeal from District Court, Dallas County; Royal R. Watkins, Judge.
Action by the People's National Bank of Nocona, against the Athens Oil Mill and others. Judgment for plaintiff, and defendants appeal.
Affirmed.
The suit was by the appellee bank against the appellant oil mill, a Texas corporation, as the maker, and appellants W. G. Crumpler, J. M. Hardaway, W. T. Conley, and John H. Kirby, as guarantors of the payment, of a promissory note for $5,000, interest and attorney's fees, made by said oil mill, dated August 25, 1925, and payable four months after its date to the order of said oil mill. The liability of Crumpler, Hardaway, Conley, and Kirby as guarantors was predicated on an instrument in writing (made a part of appellee's petition) as follows:
"Limited Guaranty"For the sum of One Dollar and other valuable considerations, I, We, or either of us, jointly and severally guarantee the payment of and agree and promise to pay at Dallas, Texas, to S.W. Sibley, Agent, his heirs, administrators, successors and assigns at maturity, or at any time thereafter as demanded, all notes, discounts and any and all indebtedness or obligations, whether joint or several, or both, or primary or secondary, for which Athens Oil Mill is or are, now, or hereafter may become liable or indebted to S.W. Sibley, Agent, his heirs, administrators, successors and assigns, provided, however, that my or our liability hereunder shall not exceed the sum of One Hundred Fifty Thousand and No/100 Dollars ($150.000.00) and the payment of said sum of One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) under this contract to S.W. Sibley, Agent, his heirs, administrators, successors and assigns, by the subscriber, or subscribers hereto, such payment to be applied to the indebtedness of the principal debtor as may be determined by the said S.W. Sibley, Agent, his heirs, administrators, successors and assigns, shall satisfy and discharge the obligation of this instrument.
"I, We, and each of us hereby waive notice of acceptance of this guaranty and all other notices in connection herewith or the indebtedness or obligation guaranteed hereby, and waive diligence, presentment, notice, protest and suit on the part of said S.W. Sibley, Agent, his heirs, administrators, successors and assigns, in the collection of any indebtedness or obligation hereby guaranteed.
"This guaranty is a continuing one and shall continue to apply without regard to the form or amount of the indebtedness or obligation guaranteed, which the said S.W. Sibley, Agent, his heirs, administrators, successors and assigns may create, renew, extend or alter, in whole or in part, without notice to the undersigned from time to time and as he or his assigns may elect without affecting the obligation of this guaranty, and it is hereby expressly agreed that the said S.W. Sibley, Agent, his heirs, administrators, successors and assigns, may surrender, release, exchange or alter any collateral or other security held by him or his assigns for the claims hereby guaranteed, either in whole or in part, without affecting the obligation or liability of the undersigned on this guaranty, and this guaranty shall be and continue effective notwithstanding any legal disability of the principal debtor to incur the indebtedness or obligation, in whole or in part.
"This instrument shall bind me, us and each of us, severally and jointly, until the said S.W. Sibley, Agent, his heirs, administrators, successors and assigns shall have received notice in writing that the subscriber hereto giving such notice elects to be no longer bound by this guaranty, after which time this instrument shall bind the subscriber hereto giving such notice only as to the indebtedness or obligation then existing and renewals or extensions, in whole or in part, of the then existing indebtedness or obligation, but shall continue in full force and effect at the option of the said S.W. Sibley, Agent, his heirs, administrators, successors and assigns, as to all other subscribers hereto not giving such written notice.
"The intention of this instrument is that the said intends from time to time to execute notes in various amounts, payable to its own order in Dallas County, Texas, containing the usual clauses of attorney's fees for collection, etc., and to sell the same to the said S.W. Sibley, or through the said S.W. Sibley, to various purchasers, and this guaranty, though made to S.W. Sibley, Agent, his heirs, administrators, successors and assigns, is intended to inure to the benefit of any holder and owner of said note or notes or other indebtedness so sold to or through the said S.W. Sibley. In other words, it is the intention that this guaranty follow the note or notes or other evidence of indebtedness and that this guaranty shall be construed as a guaranty of the payment in full of each and all of said notes or other evidence of indebtedness according to the terms of said note or notes or other evidence of indebtedness.
"It is intended that this guaranty is to cover and include any and all renewals or extensions of any indebtedness, howsoever represented, (which renewal or extension may be made without notice to the undersigned) whether said renewal or extension be made before or after any notice that may be given by any of the undersigned to terminate this guaranty.
"It is especially understood and agreed that this guaranty is payable in Dallas County, Texas, and that suit may be brought by any holder or owner of any note or notes or other evidence of indebtedness covered thereby against any one or all of the undersigned hereof at the election of said holder or owner.
"Witness my or our hands this 1st day of July, A.D. 1925.
"W. G. Crumpler,
"J. F. Gilmore,
"J. M. Hardaway,
"W. T. Conley,
"Jno. H. Kirby."
The answer of appellants to appellee's petition consisted of a general denial and allegations as follows:
"1. That by an oral agreement duly made and entered into, on or about one month of July 1925, by and between the defendants and one S.W. Sibley, it was provided that the defendants would deposit with S.W. Sibley a series of promissory notes aggregating whatever amount might be necessary to finance the operations of the defendant mill for the year 1925; and that at such time or times as it became necessary for the defendant mill to use such monies in financing its operations, notice to that effect was to be given, by the proper officer of the defendant mill, to S.W. Sibley and authority granted to said Sibley to discount such note or notes as might produce the necessary sum out of the series which had previously been deposited with said Sibley; and that thereupon said Sibley was to discount such note or notes and deposit the proceeds to the credit of the defendant Athens Oil Mill; and it was further agreed that such note or notes as were not discounted by S.W. Sibley under authority granted by the defendant mill were to be retained in the possession of said Sibley until further orders for the disposal thereof.
"2. That no orders for the disposal of any such notes as were described in the plaintiff's petition were ever or have ever been given by the defendant Athens Oil Mill to S.W. Sibley; and that if any of said notes were delivered by S.W. Sibley to the plaintiff in this cause, said notes were delivered without authority of the Athens Oil Mill, without the knowledge of the Athens Oil Mill, and in violation of the terms of the agreement under which S.W. Sibley was appointed agent of said company, and in breach of the trust reposed in said S.W. Sibley; and that these facts were known to the Peoples National Bank prior to the time any such note or notes were delivered to said plaintiff, or the plaintiff bank had knowledge of such facts that its taking of said note amounted to bad faith in the premises.
"3. These defendants further allege that no notice was ever given to the defendant Athens Oil Mill or to any of the individual defendants that such note had been delivered to the Peoples National Bank, or that any form of guaranty signed or purported to have been signed by these defendants was so delivered until more than two years after the purported maturity of said obligation; and that if such notice had been given by the plaintiff bank to these defendants within a reasonable time after the receipt of or at the maturity of said purported obligation, they could have protected themselves against loss thereon; and that a failure to so notify these defendants until more than two years after the maturity of said notes was a direct and proximate cause of these defendants being unable to protect themselves against such a purported obligation.
"4. These defendants further allege that after notice was given to the plaintiff bank of the refusal of these defendants or any of them to be bound in any manner on said obligation or obligations, the directors of the plaintiff bank purchased from S.W. Sibley, capital stock of the plaintiff bank, of a sum in value of $10.000.00, and thereby prevented this defendant from gaining whatever benefit or preventing whatever loss they have suffered or might suffer in the future by virtue of the breach of faith of S.W. Sibley.
"5. That between the time the note herein involved in controversy became due, and prior to the time that notice was given to these defendants by the plaintiff that said note was held by them, S.W. Sibley became and was insolvent and unable to meet his obligations, although prior to that time he had been and was amply solvent. These defendants were accordingly, by the delay in giving said notice, deprived of the opportunity to seek redress and restitution from the said S.W. Sibley.
"6. These defendants aver, in the alternative, and if they should be mistaken as to the allegation of the lack of authority given to Sibley to discount the notes herein involved, as follows:
"That on July 1st, 1925, defendants delivered to S.W. Sibley, under the agreement as hereinbefore set out, a series of notes aggregating the total sum of $125,000 for the purpose and to be used in the manner as hereinbefore more particularly described; that within a short time thereafter these defendants authorized and instructed S.W. Sibley to present a total of $115,000 of said notes for discount and to deposit the proceeds thereof to the credit of the Athens Oil Mill; that said total sum of $115,000 was so deposited to the credit of the defendant Athens Oil Mill; and that in the event that all or any part of the proceeds of the note involved herein in this cause should be held to be a part of said sum of $115,000, then these defendants aver that all of said sum was and has been fully repaid. * * * That all of said amounts were paid as indicated by check payable to the order of S.W. Sibley; and that when said Sibley received said amounts in payment of the total sum of $115,000, he was acting as the duly authorized agent in the premises for the receipt of said money for and on account of the plaintiff bank; and the receipt thereof by the agent of the plaintiff constituted full and complete payment of said obligation."
Special issues were submitted to the jury and they made findings as follows: (1) That S.W. Sibley "was acting within the apparent scope of his authority as agent of the defendants at the time he negotiated the note in question" to the plaintiff bank. (2) That said bank did not fail "to exercise ordinary care to ascertain the extent of the authority or agency of the said S.W. Sibley at the time the said note was negotiated." (3) That the appellant oil mill "received the proceeds of the said note which was negotiated by the said S.W. Sibley to" said oil mill. (4) That the oil mill "notified the defendants of the maturity of the note in question within a reasonable time." The appeal by the oil mill, Crumpler, Hardaway, Conley, and Kirby is from a judgment against them in favor of the bank $6,451.76, being the amount, principal, interest, and attorney's fees of the note unpaid.
J. W. Bailey, Jr., of Dallas, for appellants.
Leake, Henry, Wozencraft Frank, of Dallas, for appellee.
The motion of appellee to strike appellants' brief because same was not filed here until the day before the day the cause was set down for submission, and was submitted, having been sustained, the judgment should be affirmed unless error "apparent upon the face of the record" entered into it. City of Houston v. Masterson (Tex.Civ.App.) 22 S.W.2d 682; Commercial Standard Ins. Co. v. Carr (Tex.Civ.App.) 22 S.W.2d 1101; U.S. Fid. Guaranty Co. v. Hardy (Tex.Civ.App.) 24 S.W.2d 462, and cases there cited; Holmes v. Citizens' Nat. Bank (Tex.Civ.App.) 24 S.W.2d 77; Read v. Bergfeld (Tex.Civ.App.) 17 S.W.2d 167; 3 Tex.Jur. 924 et seq. We have searched the record for such error, but have found none.
The judgment therefore will be affirmed.