Adams Nat. Bank v. Stone

• Decision Date: 19 May 1926
• Docket Number: (No. 7585.)
• Citation: 284 S.W. 989
• Parties: ADAMS NAT. BANK v. STONE.
• Court: Texas Court of Appeals

284 S.W. 989

ADAMS NAT. BANK v. STONE.

(No. 7585.)

Court of Civil Appeals of Texas. San Antonio.

May 19, 1926.

Appeal from District Court, Medina County; R. H. Burney, Judge.

Action by the Adams National Bank against W. C. Stone. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

J. B. Lewright, of San Antonio, and L. J. Brucks, of Hondo, for appellant.

DeMontel & Fly, of Hondo, and Hicks, Hicks, Dickson & Bobbitt, of San Antonio, for appellee.

SMITH, J.

This suit was instituted by the bank against Stone to recover upon a promissory note executed by the latter, and payable to the Planters' Bonded Warehouse Company, which had assigned it to the bank. The note, given in payment of stock to be issued to Stone by the company, was executed on February 8, 1921, and by its terms was made payable on October 1, 1921. Stone sought to defeat the note upon the grounds: (1) That at the time it was executed it was understood by the parties thereto, with the bank's knowledge, that it would not "become due and payable" until the warehouse company built a warehouse in the town of Devine; (2) that it was placed in escrow to be delivered upon the condition, known to the bank, that it would not become a binding obligation upon the maker unless and until the warehouse was built; and (3) that, with the bank's knowledge, it was given in consideration of stock in the company and of the company's agreement to construct the warehouse, but the company had become insolvent and defunct and had not built the warehouse, or issued the stock, whereby the consideration had failed. The bank sought to avoid these defenses by showing that it was an innocent purchaser of the note in good faith, for value and without notice. The cause was submitted upon two special issues: First, was the note executed and delivered with an understanding and agreement between the parties thereto that it was not to become due or payable until the warehouse was built? And, second, did the bank have notice of this condition? Upon affirmative answers of the jury to both issues, the court rendered judgment denying recovery to the bank, which has appealed.

This is the second appeal in the cause. Stone v. Bank, 263 S. W. 1112. In the former trial the court directed a verdict for the bank, and this court reversed the judgment upon the ground that the evidence of a conditional delivery of the note made a case for the jury. Reference is here made to the opinion in the former appeal for a more detailed statement of the case. It is not deemed necessary to set out the evidence adduced upon the last trial.

We conclude that the evidence upon the last trial raises only two defenses upon which appellee could escape liability upon the note sued on: First, that the note was placed in escrow to be delivered and became binding on the maker when, and only in the event, the warehouse company erected the promised warehouse; and, second, that the note was given in consideration, in part, of the promise to erect the warehouse, and there was a failure of this consideration. The failure of the company to build the warehouse would operate as a defense in either of these events, provided, of course, there is a supported finding of the jury that the bank purchased the note with notice of the conditions mentioned.

But neither of these issues was submitted to the jury. Each of them was a controlling issue, and therefore neither will be resolved by presumption in support of the judgment, as would be the case had the issue been of an evidentiary fact necessary to sustain a finding upon an ultimate issue. They were issues going to the very foundation of the case, and cannot be resolved by presumptive findings, at least in the face of conflicting testimony. These matters were of a purely defensive nature, and it devolved upon the party urging them to secure affirmative findings of the jury thereon in order to entitle him to judgment. Kirby Lumber Co. v....