Central Bank & Trust Co. v. Ford

• Decision Date: 31 October 1912
• Parties: CENTRAL BANK & TRUST CO. v. FORD.
• Court: Texas Court of Appeals

152 S.W. 700

CENTRAL BANK & TRUST CO. v. FORD.

Court of Civil Appeals of Texas. El Paso.

October 31, 1912.

Rehearing Denied January 15, 1913.

Appeal from District Court, Harris County; Wm. Masterson, Judge.

Action by the Central Bank & Trust Company against T. C. Ford. Judgment for plaintiff for a part only of several notes, and it appeals. Affirmed.

C. R. Wharton and T. H. Botts, both of Houston, for appellant. Ford & Beaty, of Jasper, and R. E. Crawford, of Houston, for appellee.

HIGGINS, J.

The Central Bank & Trust Company of Houston, a banking corporation, brought suit against the appellee, Ford, upon four promissory notes and for foreclosure of a deed of trust upon lots 8 and 9 in block 6 in the city of Houston, executed for the purpose of securing the said notes and any other indebtedness owing by the said Ford to the bank. One of the notes sued upon was in the sum of $4,800, dated December 12, 1909; one for $250, dated December 21, 1909; one for $300, dated January 8, 1910; and the other for $450, dated January 18, 1910. Upon trial before the court without a jury, judgment was rendered in favor of the bank for the amount of the three smaller notes, and in favor of the defendant on the $4,800 note, and denying foreclosure of the deed of trust.

Findings of fact and conclusions of law were filed by the trial court, as follows:

"Findings of Fact.

"First. Recovery is sought by the plaintiff herein, the Central Bank & Trust Company, against the defendant, T. C. Ford, on four promissory notes executed by defendant to plaintiff, as follows: One note for $4,800, dated December 15, 1909, due April 15, 1910; note for $250, dated December 21, 1909, due April 15, 1910; note for $300, dated January 8, 1910, due April 8, 1910; note for $450, dated January 18, 1910, due April 18, 1910 — all of said notes being secured by a certain deed of trust dated January 19, 1910, executed by defendant to F. E. Pye, Trustee, for the use and benefit of the Central Bank & Trust Company, and conveying therein lots 8 and 9 in block 6 of subdivision of 10-acre lot 19 in the Holman survey in the city of Houston, Tex., said deed of trust reciting the above-described promissory notes executed by defendant, and containing the usual stipulations in default of payment of said notes, same being filed for record January 20, 1910, and recorded February 11, 1910, in volume 87, pp. 117, 118, of the mortgage records of Harris county, Tex. As these notes represent different transactions and arise upon a different state of facts, I shall first consider the findings with reference to the note for $4,800 upon which recovery was denied plaintiff herein.

"Second. I find from the evidence, with respect thereto, that some time in the early part of 1909, probably about the 1st day of February, the cashier of plaintiff's bank, Mr. Sayre, in trying to balance the bills receivable of said bank, discovered that they were short about $3,700 (there being no evidence as to when or how such shortage occurred), and, upon his calling the attention of Mr. Pye thereto (Pye being at that time and during all the times hereinafter mentioned president of said bank), he was advised by Pye that he would procure a note to be placed temporarily among the bills receivable of said bank until said matter could be looked into and arranged with the prior cashier thereof.

"I find that about this time Pye requested of the defendant, Ford, who had been doing considerable business with the bank and who was a personal friend of his, to execute a note for $3,500 to said bank; he (Pye) assuring defendant that he wanted to place same in the bank temporarily, and that when it became due the bank would cancel and return the note to him.

"I find that no money or other thing of value whatsoever passed between said parties, and that said note was purely an accommodation note given with the understanding between the defendant and the officers of said bank, including the president, cashier, and assistant cashier, that same was purely accommodation paper and would not be regarded by the bank as an obligation of the defendant; Pye, at the time, agreeing with defendant to give him some written evidence in the shape of a letter to this effect.

"I further find that this note was not presented to the defendant, nor was any demand made on him by the bank for payment thereof at its maturity; that same was not carried on the books of the bank in any form, as an asset thereof, until some time in the fall of 1909, probably about the 1st of November, when Sayre was succeeded as cashier of said bank by August De Zavala.

"I further find that, shortly after he became cashier, De Zavala made repeated demands upon defendant to settle this note and other indebtedness then due by Ford to the bank, and that at said time De Zavala believed said note to be genuine and had no notice to the contrary until some time in November, 1909, when, in response to the notices sent by him as cashier, the defendant called at the bank and explained to him that the note was not his obligation, and that the several items referred to as accrued or pastdue interest and added thereto were improper charges.

"I find that the defendant was then referred by De Zavala to Pye for an adjustment of these matters, and after a consultation between Pye and De Zavala the latter was requested by Pye to prepare a new note which would cover the note of $3,500 above referred to and other items of indebtedness claimed by De Zavala to be due the bank by Ford; Pye advising him that he would have Ford execute the new note and give some security therefor. At a conference between Pye and Ford, the latter insisted that he did not owe said amount, which statements were acquiesced in, and agreed to, by Pye, and, when reminded of his promise to give some written evidence of the fact that this note was not Ford's obligation, Pye again assured Ford that he would attend to same; and with this understanding upon the part of both Pye and Ford, that same was not, and would not, become an obligation or indebtedness of Ford's to the bank, but that same would be canceled by the bank when due and returned to him, Ford executed the $4,800 note herein sued on. At that time Ford did not know, nor did he make any inquiry, as to what items of indebtedness were comprised in said $4,800 note, but he relied upon Pye's renewed promise and assurance that same was purely an accommodation note, and that it would not be used by the bank, but would be canceled and returned to him when due. Shortly thereafter Ford, not having received the written acknowledgment referred to above, prepared and sent to Pye for his written signature the following instrument of writing, which was signed by Pye as president of said bank, and delivered to Ford as per his former...