Blum v. Loggins

• Decision Date: 19 March 1880
• Docket Number: Case No. 819.
• Citation: 53 Tex. 121
• Court: Texas Supreme Court
• Parties: SYLVAIN BLUM ET AL. v. R. & T. R. LOGGINS.

53 Tex. 121

SYLVAIN BLUM ET AL.

v.R. & T. R. LOGGINS.

Case No. 819.

Supreme Court of Texas.

Mar. 19, 1880.

ERROR from Waller. Tried below before the Hon. Wm. Burkhart.

The statement of the nature and result of the suit made by plaintiff, and not controverted, is substantially as follows, viz.: R. Loggins and R. T. Loggins, his son, brought suit against E. Blanc and E. P. Alsbury, and against Leander Cannon and Fen Cannon, as partners, doing business under the name of Cannon & Co., and against Leon Blum and Sylvain Blum.

The petition alleged that on the 21st of April, 1871, R. Loggins executed and delivered to Cannon & Co. four notes, each for $2,500, and payable respectively on Sept. 10, Oct. 10, Nov. 10 and Dec. 10, after date, to the order of Cannon & Co., and at the same time, by way of securing said notes, executed and delivered to Leon Blum, as trustee, a deed of trust on growing crop for the year 1871, upon plantations owned and controlled by R. Loggins, in the county of Austin, and also upon his mercantile stock and fixtures in Hempstead. That these securities were placed with Cannon & Co., not wholly on account of past or existing indebtedness, but to secure Cannon & Co., also, for advances to be made in money and guarantees thereafter. That to secure the same liability, R. Loggins and R. T. Loggins, on the 2d of Feb., 1872, delivered to Cannon & Co. their note for $10,000, payable to Cannon & Co., Dec. 1, 1872, and a deed of trust to E. Blanc on a plantation called the Rock Island place, and on the crop for that year on the Whitworth place, this deed of trust being to secure the last named note. That the securities of Feb. 2, 1872, were executed at the earnest solicitation of Cannon & Co., at a time when R. Loggins was too feeble in health to transact business, and was procured from him by imposition and false representations and promises made by Cannon & Co., namely: that the merchandise mortgaged by deed of trust of April 21, 1871, should be exhausted and applied upon the debt before resorting to the property covered by deed of Feb. 2, 1872; that the land mortgaged Feb. 2, 1872, was the homestead of R. T. Loggins and his family, who received no consideration for the note and deed, and only executed them to please and quiet his father; indeed, both plaintiffs aver the last named deed to have been without consideration, null and void. That in March, 1872, R. Loggins, at the instance of Cannon & Co., and in order to pay first the debt of $10,000 and then other debts due by him, set over to Leander Cannon and E. P. Alsbury his stock of merchandise at Hempstead, worth $9,000, and some $9,000 in notes and accounts, aggregating $18,000 of assets, and more than sufficient to pay the debts for which they were thus appropriated by Loggins; Cannon & Co. and Alsbury stipulating to so apply the assets received. That Alsbury, as agent of Cannon & Co., took charge of the property and claims so set over, and has since realized on them largely, to wit: to the extent of $10,000, more accurate statement being impossible, because of failure and refusal of Cannon & Co. and Alsbury to render proper accounts (and in this connection Cannon & Co. and Alsbury are required by the bill to answer upon oath the truth concerning such accounts, realization and application of assets). That Cannon & Co. and Alsbury failed to perform their agreements in regard to applying the assets turned over to them. That after so transferring his assets, R. Loggins paid from his other means $3,000 on the debt secured by the deed of trust, and $4,000 on other debts intended to be provided for by his transfer of assets to Cannon & Co. and Alsbury. That Cannon & Co., contriving to cheat plaintiffs, had made a pretended transfer of the deed of trust of Feb. 2, 1872, and the indebtedness secured thereby to Sylvain Blum, who is alleged to have received said securities with full knowledge of the alleged infirmities. That Blanc, as trustee, has advertised the land for sale to satisfy the balance due on the debt secured by the trust deed, viz.: about $7,000.

Prayer was made that Cannon & Co. and Alsbury be required to account for the property received by them; that the proceeds be applied first to pay the debt secured by trust deed of Feb. 2, 1872; that until an adjustment can be had, the enforcement of the trust deed may be enjoined; that both deeds of trust and the notes secured thereby may be ordered brought into court and cancelled; and for general relief. The district judge ordered the injunction as prayed. The two deeds of trust were made exhibits. Defendant Fen Cannon pleaded in abatement that he was never a member of the firm, and denied complicity in the alleged conspiracy. Defendant Sylvain Blum denied that Fen Cannon and Leander Cannon composed the firm of Cannon & Co. He admitted, on information, that R. Loggins was doing a mercantile business at Hempstead, but had no information of the particulars or magnitude of the business. Upon information acquired after the filing of this suit, he admitted the execution of the notes and deed of April, 1871, but had no knowledge of the consideration of them, nor of the condition of accounts between Cannon & Co. and R. Loggins at the date of the trust deed. He admitted the execution of the notes and deed of Feb., 1872, but had no information of the identity between the indebtedness evidenced thereby, and that evidenced by the notes of April, 1871. Upon information and belief, he denied the incapacity of R. Loggins from sickness to execute the note and deed of Feb., 1872, and the alleged imposition, fraud and deceitful promises of Fen Cannon in procuring the deed and note. He disclaimed all knowledge of the condition of accounts between Cannon & Co. and R. Loggins at the date of the second trust deed, and denied the existence of homestead rights claimed by R. T. Loggins, in whom he admitted the title to the land was apparently vested; but, as respondent was informed, the beneficial interest was in R. Loggins.

He disclaimed all knowledge of the inducements of fraud to execute the note and deed of Feb., 1872, and of the consideration therefor; further than that, the note by its terms purported to have been given for value received. He denied the alleged nullity of the instruments, and alleged them to be valid. He disclaimed all knowledge of the alleged transactions between R. Loggins, Alsbury and Cannon & Co., in March, 1872, and subsequent dealings in reference thereto, or growing therefrom; admitted the payment of $3,000 on the note of Feb. 2, 1872, alleged to have been made in Dec., 1872; admitted that Feb. 15, 1872, Cannon & Co. transferred to him the note and deed of Feb. 2, 1872; denied that the transfer was colorable, and alleged it to be bona fide for value; admitted the advertisement of the property by Blanc, the trustee; denied all knowledge of infirmity in, and defenses to, the note and trust deed, and of all the alleged transactions between the plaintiffs and Cannon & Co., except such as were patent upon the face of the note and trust deed. He alleged that about Feb. 15, 1872, Leander Cannon, who was doing business under the firm name of Cannon & Co., applied to him for funds to use in his business; that Cannon showed him a detailed statement of the business condition of Cannon & Co., from which defendant believed that with a little help the firm would be able to right itself and become profitable; that he agreed to discount the note and trust deed of R. and R. T. Loggins, and did so, and paid therefor $10,000 to Cannon & Co., who thereupon transferred to him the note and trust deed. This transfer, he averred, was made in entire good faith, without any notice on his part of anything calculated to throw suspicion on the note and trust deed, or on the right of Cannon & Co. to negotiate them. He alleged that he took from Cannon & Co. a written transfer of the securities and caused it to be immediately recorded in the county where the land lay, and since that time has continuously owned and held the securities, which fact was within the knowledge of plaintiffs long before, and up to the time of the payment of $3,000, made on said note in December, 1872.

He pleaded, in reconvention, the execution of the note by plaintiffs, the bona fide purchase of it by himself for value before maturity, and prayed judgment against plaintiffs for the amount of the note and interest, less the credit of $3,000 in December, 1872, and for dissolution of the injunction.

Leon Blum demurred, because the bill did not show him to be in any wise answerable for the property alleged to have been conveyed to him in trust, and answered that the use of his name as trustee in the original deed of trust was unknown to him until long after it was done; that he had never acted in reference thereto, and he disclaimed any and all interest in the property and the suit.

The answer of Leander Cannon and of Alsbury, in view of the opinion, need not be stated, but they denied all fraud, etc., charged.

Upon consideration of the petition by the district judge, an injunction was granted and issued as prayed; and a motion to dissolve, made by the defendant Sylvain Blum, upon bill and answer, was overruled.

The plaintiffs, in an amended petition, among other things, charged that the transfer to Alsbury of the stock and other assets, was for the benefit of Leon & H. Blum, for whom Leander Cannon and Alsbury were acting therein, and that Leon & H. Blum knew of and were chargeable with every defense which could be made against Cannon & Co. and Alsbury on the note, and in respect of the alleged dealings between the parties.

Defendants Blum, by an amended answer, in response to this amendment of the petition, denied all the allegations, specifically, and at length, except as to the membership of the firm of Leon & H. Blum, the payment of $3,000 on the note, and other exceptions not necessary to state.

The special verdict...