Commonwealth Nat. Bank v. Goldstein

• Decision Date: 29 March 1924
• Docket Number: (No. 9096.)
• Citation: 261 S.W. 538
• Parties: COMMONWEALTH NAT. BANK OF DALLAS v. GOLDSTEIN et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

261 S.W. 538

COMMONWEALTH NAT. BANK OF DALLAS v. GOLDSTEIN et al.^*

(No. 9096.)

Court of Civil Appeals of Texas. Dallas.

March 29, 1924.

Rehearing Denied April 26, 1924.

Appeal from District Court, Dallas County; Kenneth Foree, Judge.

Suit by the Union National Bank of Dallas against A. Goldstein and another, in which the Commonwealth National Bank of Dallas intervened as plaintiff. Judgment for defendants, and intervener appeals. Affirmed.

J. N. Townsend, of Dallas, for appellant.

Victor Hexter and Etheridge, McCormick & Bromberg, all of Dallas, for appellees.

VAUGHAN, J.

The Union National Bank of Dallas instituted this suit against A. Goldstein and I. B. Walker by petition filed on the 14th day of February, 1911, and, in substance, charged that Goldstein and Walker were indebted to it on a promissory note executed by them payable to the order of the Union National Bank for the principal sum of $5,000, due on demand, and bearing interest from maturity at the rate of 8 per cent. per annum until paid, and providing for 10 per cent. additional on the full amount due as attorney's fees if placed in the hands of an attorney for collection. On May 20, 1911, appellant filed its plea of intervention, alleging that about the 1st day of November, 1911, said Union National Bank indorsed, transferred, and delivered said note to intervener, whereby intervener became the legal and equitable owner and holder of said note for a valuable consideration and entitled to all the relief prayed for by the said Union National Bank; and in substance alleged practically the same facts alleged by Union National Bank, and prayed for judgment in the amount of its debt, interest, attorney's fees, costs; and for general relief.

Appellant Goldstein filed his answer on April 2, 1912, admitting the execution of the note sued on in conjunction with his codefendant Walker, and further alleged:

"That prior to the 30th day of August, 1909, the said L. Wenar Millinery Company and the said Union National Bank of Dallas, acting through its vice president and general manager. I. B. Walker, and this defendant, entered into an agreement, by the terms of which this defendant agreed to execute to the Union National Bank and in conjunction with his codefendant, I. B. Walker, and for the accommodation of the said L. Wenar Millinery Company, to a limited extent and as occasion should arise, notes to be discounted by the said Union National Bank and the proceeds to be used by the said L. Wenar Millinery Company in transacting its business in some other way than paying any part of its indebtedness to the said Union National Bank, which was within the loaning power of said bank to lend to the said millinery company, and in consideration of this defendant executing paper as aforesaid for the accommodation of said L. Wenar Millinery Company, the said L. Wenar Millinery Company agreed with this defendant to make deposits in the Union National Bank of Dallas from time to time in the usual course of business, and that said deposits when so made should be applied to the extinguishment pro tanto of any note made by this defendant under the said agreement until the same was fully liquidated and extinguished, and that no part of said deposits should be applied to the liquidation or extinguishment of any debt or demand existing in favor of the Union National Bank of Dallas against said L. Wenar Millinery Company or be checked out for any other purposes of the said L. Wenar Millinery Company, and the said Union National Bank of Dallas agreed to discount said paper as it might be made by this defendant and to receive the deposits of the said L. Wenar Millinery Company as they were made from time to time, and to apply the same exclusively to the liquidation and discharge of the notes which should be made by this defendant under said agreement until the same at any time outstanding should be fully paid off and discharged."

And further alleged that after the discount of the note sued on by the Union National Bank, the L. Wenar Millinery Company made deposits with said Union National Bank more than sufficient to pay off and discharge the note sued on, but that said bank, contrary to said agreement, did not apply said deposits on said note, but applied same on other indebtedness of the L. Wenar Millinery Company due said bank and permitted said millinery company to check said deposits out of said bank without leaving a sufficient amount to pay off and discharge said note.

Defendant Walker made practically the same defense to the suit as made by Goldstein.

This cause was tried twice in the court below. On the first trial judgment was rendered against both defendants for the amount of the note, interest, and attorney's fees, from which judgment appellee Goldstein, alone, appealed, which resulted in the cause being reversed and remanded. See Goldstein v. Union National Bank of Dallas et al. (Tex. Civ. App.) 216 S. W. 409.

The second trial from which this appeal was prosecuted was had before the court without the intervention of a jury, and resulted in a judgment in favor of appellee Goldstein denying appellant the right to recover on its cause of action as alleged against him. This appeal is based upon the following propositions:

(a) "Where a contract is reduced to writing, all matters of negotiation, discussion and agreements on the subject antecedent to and dehors the writing are excluded as being merged in the instrument."

(b) "Where a promissory note absolute upon its face promises to pay a certain sum of money at a stipulated time, it is not competent to show by parol that such note is not absolutely payable or that it is payable in anything other than money."

(c) "Where a director executes as maker a promissory note for the benefit of his corporation to be paid out of the regular daily deposits of the corporation in the payee bank, and the corporation makes deposits in the payee bank in excess of the amount of the note but checks out in the regular manner said deposits as rapidly as same are made, its account all the while being heavily overdrawn, the maker of the note is not released from liability on the note."

(d) "Where a director executes as maker a promissory note for the benefit of his corporation and therein waives diligence, demand, notice of nonpayment and protest and unconditionally guarantees the payment of the note at maturity or any time thereafter, such maker is not relieved of liability on said note because his corporation agreed to pay said note out of its regular daily deposits to be made in the payee bank and did make regular daily deposits in the payee bank in excess of the amount of said note, but daily checked out said deposits in the regular manner; its account being all the time heavily overdrawn in the payee bank."

The following are the material facts we find to have been established by the statement of facts in this cause before us:

That the note sued on was in words and figures as follows:

"$5,000.00. Dallas, Texas, Aug. 30th, 1909. No. A12611. Demand after date, without grace, I, we or either of us, promise to pay to the order of the Union National Bank of Dallas, five thousand dollars with interest at the rate of eight per cent. per annum from maturity until paid, for value received. And further promise that if this note is placed in the hands of an attorney for collection, to pay ten per cent. additional on the full amount due as attorney's fees. Each of the makers hereof and the indorsers hereon, waive diligence, demand, notice of nonpayment and protest on this note and guarantee its payment at maturity or any time thereafter. Payable at the office of the Union National Bank of Dallas. Due, demand. [Signed] A. Goldstein. I. B. Walker."

The L. Wenar Millinery Company was a private corporation prior to and at the time of the execution of said note, domiciled in Dallas, Tex., L. Wenar, appellee Goldstein, I. B. Walker, and ____ Hexter being the principal stockholders; said Wenar, Walker, and Goldstein were members of the board of directors, and Wenar was president of said corporation, which relationship on the part of said parties to said corporation existed prior to the execution of the note sued upon and continued throughout the transactions had in...