Altgelt v. Alamo Nat. Bank

• Decision Date: 21 November 1904
• Citation: 83 S.W. 6
• Parties: ALTGELT et al. v. ALAMO NAT. BANK.
• Court: Texas Supreme Court

83 S.W. 6

ALTGELT et al. v. ALAMO NAT. BANK.

Supreme Court of Texas.

November 21, 1904.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by the Alamo National Bank against George C. Altgelt, administrator of the estate of Amalie Elmendorf, deceased, and others. A judgment for plaintiff was affirmed by the Court of Civil Appeals (79 S. W. 582), and defendants bring error. Reversed.

Newton & Ward, Denman, Franklin & McGown, and Otto Staffel, for plaintiffs in error. Chas. W. Ogden and Wm. Aubrey, for defendant in error.

BROWN, J.

This suit was instituted by the Alamo National Bank against George C. Altgelt, as administrator of the estate of Amalie Elmendorf, on five promissory notes aggregating $54,000 principal. Each note bears 10 per cent. interest from maturity, and provides for 10 per cent. additional as attorney's fee if placed in the hands of an attorney for collection. All are made payable to the order of the Alamo National Bank, and are signed "Elmendorf & Co.," and are alleged to have been executed after the death of Amalie Elmendorf by Henry Elmendorf, as independent executor of her estate, for money loaned to him as such executor for the purpose of carrying on the mercantile business in the name of Elmendorf & Co., belonging to the estate of his testatrix.

George C. Altgelt, administrator, answered by numerous pleas and exceptions, and, among other things, pleaded that at the time of the death of Amalie Elmendorf, Elmendorf & Co., whose name appeared to be signed to the promissory notes sued upon, was a partnership composed of Amalie Elmendorf, Emilie Elmendorf, Henry Elmendorf, and Benno Engelke, which partnership was dissolved by the death of Amalie Elmendorf. It is alleged that no authority was given in the will of Amalie Elmendorf to her executor. Henry Elmendorf, to create debts or execute obligations binding the estate of the said Amalie Elmendorf. It is alleged that the business of the firm was not closed at the death of Amalie Elmendorf, but was carried on in the name of and for the benefit of the surviving partners without authority to bind the estate of the said Amalie Elmendorf. The plea of partnership was sworn to; also a plea denying that the notes were signed by Amalie Elmendorf, or any person authorized to act for her. Otto Staffel, as guardian of Stella, Armine, and Edward Elmendorf, minor heirs of Amalie Elmendorf, intervened in the suit, alleging an interest of his wards in the estate of the said Amalie. The trial judge charged the jury to find a verdict in favor of the plaintiff, Alamo National Bank, against the defendant Altgelt, administrator, for the amount of the debt sued for, with interest and attorney's fees. A verdict was so returned, and judgment entered in accordance therewith, which was affirmed by the Court of Civil Appeals, 79 S. W. 582. To sustain this judgment it must be held either that there was no evidence of the existence of a partnership among the parties, or that, admitting the partnership to exist, the estate was still liable under the facts of the case. We find that there is testimony sufficient in the record to make the issue of partnership as pleaded by the defendant Altgelt, and to require the court to submit that issue to the jury, unless the facts are such that the question of partnership or not was immaterial. We therefore will assume, in the examination and discussion of the questions presented, that there was a partnership at the death of Amalie Elmendorf between her and Henry Elmendorf, Emilie Elmendorf, and Benno Engelke. We shall omit from the statement all facts found by the Court of Civil Appeals bearing upon the question of partnership and extract from the opinion of that court the following statement of facts:

"Charles Elmendorf died in 1878 or 1880. He was the husband of Amalie and the father of Henry Elmendorf. Prior to his death he established and conducted under the name of Elmendorf & Co. a wholesale and retail hardware business, of which he was the sole owner, in the city of San Antonio. Upon his death he left a will, by which he bequeathed, subject to a legacy of $2,000, his entire estate to his wife, Amalie, which included the hardware business which he had owned and conducted under the name of Elmendorf & Co. The will was duly probated. After his death Henry Elmendorf, the oldest son of Charles and Amalie Elmendorf, was given by his mother the exclusive management and control of the business in the name of Elmendorf & Co., and of all other business and property interests of his mother. He continued in the exclusive management and control of said mercantile business, as well as the control of all the property interests and business affairs of his mother, up to the time of her death, which occurred upon the 10th day of July, 1899. At her death Amalie Elmendorf left a will, of which she appointed her son, Henry, executor. The will directs that no bond be required of him, and that no other action be had in the county court or in any other court in relation to the settlement of her estate other than the probating and recording of the will and a return into court of an inventory, appraisement, and list of claims of her estate. The will contains no express provision either for carrying on or discontinuing the business of Elmendorf & Co. The will was probated on the 22d day of September, 1899, and Henry Elmendorf, the executor therein named, duly qualified as such executor. The testatrix's interest in Elmendorf & Co. was inventoried by her executor at $82,025.50, which is shown to be the full value of the assets of said business. After Henry Elmendorf qualified as executor, the business of Elmendorf & Co. was conducted by him as such executor just as it had been before the death of his mother, he having the exclusive management and control of it up to the time, hereinafter stated, of his removal from said executorship by an order of the county court of Bexar county.

"For a number of years prior to the death of Amalie Elmendorf, the banking business of Elmendorf & Co. was done with the Alamo National Bank. The money earned from the business was daily deposited there. Elmendorf & Co. drew drafts and checks on the bank against these deposits to pay for merchandise purchased and current expenses whenever money was required by the business for such purposes. Frequently during the lifetime as well as after the death of Amalie Elmendorf the account of Elmendorf & Co. with the bank was overdrawn, varying from day to day in amounts. The overdrafts were honored by the bank with the understanding that the accounts should be balanced by notes made the bank by Elmendorf & Co. for the amount of overdrafts. Frequently Elmendorf & Co. borrowed money from the bank for the purpose of carrying on the business, executing, in the name of the company, notes therefor. On July 10, 1899, the date of Amalie Elmendorf's death, the indebtedness of Elmendorf & Co. to the bank amounted to the sum of $28,734.08 for money loaned and paid on overdrafts and used by the business, for which the bank held its promissory notes. This sum of money is included in the notes sued on. After Amalie Elmendorf's death, Henry Elmendorf, as independent executor of her estate, continued to carry on the business of Elmendorf & Co. in the same manner that it was conducted when she was alive. The dealings of Elmendorf & Co., through such executor, continued in the same way, it being understood by the bank that the business was being conducted by the executor in the name of Elmendorf & Co. for the estate of his testatrix. With this understanding between the bank and the executor, money was paid and loaned the latter on overdrafts, and promissory notes made in the name of Elmendorf & Co. by Henry Elmendorf in his capacity as independent executor of the estate of his mother, for the purpose of carrying on the business of Elmendorf & Co. The money on loans and overdrafts thus received by the executor in conducting the business of Elmendorf & Co. increased the indebtedness of the concern from $28,784.08, the amount it owed the bank at the date of Amalie Elmendorf's death, to $54,000. The notes executed to the bank for the money were from time to time, as they became due, renewed, and the ones sued on are the notes executed by Henry Elmendorf in the name of Elmendorf & Co. as independent executor of the estate of Amalie Elmendorf for money loaned and paid on overdrafts by the bank for the purpose of carrying on such business. Each of the five notes, as indicated in our statement of the case, bears 10 per cent. interest from maturity, and provides for 10 per cent. additional as attorney's fees if placed in the hands of an attorney for collection. They all conform in every respect to the description in plaintiff's petition, and the origin and history of each, as alleged in the petition, are fully proven by the undisputed evidence. The rate of interest the notes bear and the stipulation they contain for attorneys' fees are such as are reasonable and customary. All the notes sued on, after the removal of Henry Elmendorf as executor of the estate, were duly verified and presented as claims against the estate to Benno Engelke after he had qualified as administrator de bonis non with the will annexed, and were rejected by him.

"On the 25th day of October, 1901, after the date of the execution of each of the notes sued on, Henry Elmendorf was by an order of the county court of Bexar county removed from his office of independent executor of said estate. On the next day Benno Engelke was appointed temporary administrator of the estate, and on the 20th day of January, 1902, he was, by an order of the county court appointed administrator de bonis non of said estate of Amalie Elmendorf, with the will annexed. He duly qualified under the appointment on the 7th day of February, 1902. The order of the county court appointing him temporary administrator expressly authorized...