Couturie v. Roensch

• Decision Date: 18 January 1911
• Citation: 134 S.W. 413
• Parties: COUTURIE v. ROENSCH.<SMALL><SUP>†</SUP></SMALL>
• Court: Texas Court of Appeals

134 S.W. 413

COUTURIE v. ROENSCH.^†

Court of Civil Appeals of Texas.

January 18, 1911.

Rehearing Denied February 15, 1911.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, McLennan County; Marshall Surratt, Judge.

Action by Felix Couturie, as trustee in bankruptcy of Gussoni & Co., against Max Roensch. From a judgment in favor of defendant on a counterclaim, plaintiff appeals. Affirmed.

Saunders, Dufour & Dufour and John W. Davis, for appellant. Prendergast & Williamson, for appellee.

JENKINS, J.

The appellant is the assignee in bankruptcy of the firm of Gussoni & Co., cotton buyers, who were doing business in New Orleans. Appellee was their representative in the state of Texas, his office being at Waco. On October 3, 1906, appellee executed his note to Louis Castelli for $2,500, payable one day after date. Castelli was the manager of Gussoni & Co., and the money loaned was in fact the money of said firm, though this was not known to appellee. Appellant instituted this suit to recover the principal of this note, with 6 per cent. interest from the expiration of the three days of grace after the same became due, together with 10 per cent. attorney's fees, it containing the usual attorney's fees clause. Appellant also sued for 1,110 rolls of bagging alleged to be worth $6,600, alleging that appellee had sold a portion of the same for $2,770.90 and deposited the proceeds of said sale in the Provident National Bank at Waco, subject to the decision of the court in this case, and had possession of the remainder of said bagging. Appellant sought to recover said $2,770.90 and the remainder of said bagging. In fact, there were originally two suits, one on the note and one for the bagging, but they were consolidated by agreement of the parties, and we shall treat them as one suit.

Appellee admitted the execution of said note, but alleged that, by oral agreement with Castelli, it was not to bear any interest. He also alleged that at the time said note was transferred to Gussoni & Co., and at the time of their bankruptcy, and at the time of this suit, Gussoni & Co. were indebted to him largely in excess of the amount of said note, and that they were also indebted to him in excess of the value of said bagging, to wit, in the sum of $2,350 for salary which had accrued and was payable prior to bankruptcy, and in the sum of $3,268.13, for moneys advanced by him as the agent and factor of Gussoni & Co. in the conduct of their business at Waco, Tex. He prayed that so much of said amounts as was necessary be allowed as a set-off and counterclaim to said note, and that the same be canceled. He alleged that he had both a common-law lien, as agent and factor, on said bagging, and also a contractual lien thereon and prayed for a foreclosure of his said liens on said bagging, and that, as all of said bagging, except 93 rolls had, by agreement, been sold, and the proceeds, $2,756.10, deposited in the Provident National Bank to await the trial of this suit, the same be applied, as far as it would go, to the extinguishment of the debt due him by Gussoni & Co.

The case was tried before the court without a jury and judgment was rendered that the plaintiff (appellant) take nothing by his suit on said note; that said $2,756.10 in said bank be applied to the extinguishment of appellee's debt, as found by the court, and that his lien on 93 rolls of bagging be foreclosed for the balance due him, which the court found to be $224.55. The respective amounts allowed by the court in favor of each party are as follows, to wit: Plaintiff: Note $2,500; proceeds of bagging in bank $2,756.10— total $5,256.10. Defendant: Exhibit A being various items paid out by appellee for Gussoni & Co. $2,282.69; interest on same from March 1, 1908, $258.52; loss on Ballinger cotton $473.81; loss on Walnut Springs cotton $115.63; balance on salary $2,350— total $5,480.65. Balance in favor of appellee, $224.55.

Appellant's assignments and propositions are numerous; many of them confessedly being to all intents and purposes duplicates of others. Some of them are not in conformity to the rules. We will not attempt to discuss the assignments seriatim, but shall group the legal propositions involved under said assignments.

1. The court, as will be seen from the foregoing statement, did not allow any interest on the note. Appellant objected to the oral evidence of the contract not to pay interest, and asked for a new trial on the ground that there was no legal evidence to sustain the court in this regard. As to interest, the form of said note was as follows: "To bear interest at the rate of ____ per cent. per annum from ____," with the blank after the words "rate of" marked through with a pen. Appellee testified that the agreement to loan him the $2,500 was made with Castelli in Houston, and that it was agreed that no interest would be charged; that the note was afterwards sent to him at Waco with the blank in the same as to interest; and that he marked out the blank with a pen and returned the note to Castelli at New Orleans. It is true that oral evidence is not admissible to vary the terms of an unambiguous written instrument by proving a contemporaneous verbal agreement as a part of said contract, and not omitted therefrom by fraud, accident, or mistake. It is also true that where nothing is said about interest in a note, it will, as a matter of law, be construed as a contract to pay the legal rate of interest from maturity. It is also true, as contended by appellant, that when a blank in the interest clause is left in a note, as it was in this one, before being signed, that it has the same legal effect as if no reference was made to interest. But in this case said blank was not left undisturbed; a pen mark had been drawn through it. What did this mean? The court held that this showed a sufficient ambiguity to admit oral evidence as to interest. We cannot say, under all the facts in this case, that the court erred in so holding. It is equally as well settled that oral testimony is permissible to explain a written instrument when the same is ambiguous, such ambiguity being a latent one, as that such testimony is not admissible where the written instrument is unambiguous. Appellant insists that, if there was any ambiguity in the interest clause of said note, it was a patent ambiguity, and therefore could not be aided by oral testimony. This is also a sound proposition of law (Norris v. Hunt, 51 Tex. 610; Curdy v. Stafford, 27 S. W. 823), but if such was the fact in this case, we do not see how it would help appellant. It occurs to us that if the interest clause in said note is so altered as to make a patent ambiguity, it would not leave the note as if no reference had been made to interest, but would rather show an intentional erasure of the entire interest clause, and thereby indicate affirmatively, that no interest was to be paid. Appellant insists that, even though it should be held that the note bore no interest before payment was demanded, the filing of this suit was a demand for payment, and he should have been allowed interest from that date. The answer to this is that, if the court was correct in his findings of fact, the note had been paid before that date by appellee's counterclaim, and, as he did not owe anything on the principal of said note when the suit was filed, no interest or attorney's fees could thereafter accrue on the same.

2. Appellant insists that the court erred in allowing appellee for the remainder of the year after the bankruptcy of Gussoni & Co., on April 14, 1908. The undisputed evidence shows that appellee was employed by Gussoni & Co. to conduct their cotton business in Texas for the season beginning September 1, 1907, and ending August 31, 1908, at a salary of $4,400 per annum; that Gussoni & Co. were adjudged bankrupts on April 14th, 1908, and that appellee was unable to get employment for the remainder of the season. There can be no question but that had Gussoni & Co. voluntarily breached their contract by discharging appellee without cause, under the facts above stated, he would have been entitled to recover of them the full amount of his salary for the remainder of the year. Does the fact that appellee lost his position by reason of the bankruptcy of his employers alter the case? We think not. In Re Pettigill (D. C.) 137 Fed. 143, it is said that bankruptcy may be treated as a repudiation, and therefore a breach of the contract. Where a contract for employment is terminated by a bankrupt, the unearned salary of an employé for the balance of the contract year may be liquidated and proven as a claim in bankruptcy against the bankrupt's estate. In re Silverman ...