Dean v. Allied Oil Co., 3114

• Decision Date: 22 October 1953
• Docket Number: No. 3114,3114
• Citation: 261 S.W.2d 900
• Parties: DEAN et al. v. ALLIED OIL CO.
• Court: Texas Court of Appeals

Page 900

261 S.W.2d 900

DEAN et al. v. ALLIED OIL CO.

No. 3114.

Court of Civil Appeals of Texas, Waco.

Oct. 22, 1953.

Rehearing Denied Nov. 12, 1953.

Hale & Schraub, Corpus Christi, Jerry T. Stockard, Corsicana, for appellants.

Dawson & Dawson, Corsicana, for appellee.

McDONALD, Chief Justice.

This is a suit in which the appellee as plaintiff filed suit against the appellants Dean and Evans, as defendants, upon a guaranty-surety agreement executed by them. The parties will be denominated hereafter as in the Trial Court. Defendants and the wife of one defendant were sole owners of the Debco Petroleum Corporation, which became indebted to plaintiff for a large sum of money. This indebtedness was reduced to a note, secured by a chattle mortgage on all the property of Debco Petroleum Corporation; and also a collateral agreement whereby defendants would turn over a service station to plaintiff when called on to do so was entered into. Plaintiff and defendants jointly employed an attorney to prepare the note and agreement and defendants signed the note as president and Secretary-Treasurer of the Debco Corporation for and on behalf of the Debco Corporation. The note was in the principal amount of.$30,483.48, provided for interest at 6% and provided for an additional 10% upon principal and accrued interest as attorney's fees if the note be not paid at maturity and be placed in the hands of an attorney for collection. After the signatures and acknowledgment of Dean and Evans on behalf of the Debco Corporation there appeared: 'For value received, we, J. L. Dean or Wesley D. Evans or both of us, do hereby personally bind ourselves, our heirs and assigns, and do further guarantee the payment of the above mentioned note and do hereby promise to pay Allied Oil Company or order.$30,483.48 or such amount that remains to be paid at maturity, or at any time thereafter, with interest at the rate of 6% per annum, until paid, waiving demand, notice of non payment and protest.

Address 5505 Hiway 9

/S/ J. L. Dean

J. L. Dean

Address 1824 Elizabeth

/S/ Wesley D. Evans

Wesley D. Evans.'

The Debco Corporation defaulted on the note. Plaintiff filed suit jointly against the Debco Corporation, and the defendants individually. Thereafter Debco Corporation filed a petition in bankruptcy, and plaintiff abandoned its cause of action against the Debco Corporation. The Referee in Bankruptcy abandoned the property plaintiff had a mortgage on after having it appraised and ascertaining that it was worth less than that which it was security for. Plaintiff then foreclosed its note and bought said property in at the valuation placed on it by appraisers appointed by the Referee, crediting the Debco note for said amount. Plaintiff thereafter sold some of the properties for more than the appraised value, some for less than the appraised value; and still has some of the properties in hand.

Trial was to the court and jury. At the close of the evidence the Trial Court withdrew the case from the consideration of the jury and entered judgment for plaintiff against Dean and Evans for $7,501.67, which was the amount due on the note after credits had been allowed. This amount included attorney's fees due on the note together with interest at the rate of 6% per annum.

Defendants appeal to this court on 3 points, to wit: 1) That the Trial Court erred in withdrawing the case from the jury and rendering judgment for plaintiff, because defendants pled and presented evidence that the guaranty was not supported by consideration, was executed with the understanding and agreement that defendants would not be personally liable, and that it was obtained by fraud-all of which defendants contend were disputed fact issues they are entitled to have the jury pass on. 2) That if the defendants are liable under the guaranty-the court erred in giving judgment for the full amount of the balance due on the note as defendants are not liable for attorney's fees under the guaranty-and defendants are entitled to further credit on the note to the extent of the additional value received by appellee from the sale of the property abandoned by the Referee in Bankruptcy. 3) That the court erred in overruling defendants' 2nd Amended Motion for Continuance.

As to defendants' 1st Point-In passing on the question of whether the court erred in withdrawing the case from the consideration of the jury and rendering judgment for plaintiff, it is well settled that where a finding by the jury either way on disputed fact issues could not change the judgment, which as a matter of law must be entered in the case, then the court is under a duty to withdraw the case from the jury and to render the proper judgment therein.

Defendants contend that the surety-guaranty agreement was not supported by consideration-The guaranty signed by defendants was an obligation of a corporation of which they were sole owners (except 1%, which belonged to one of defendants' wife). While Dean and Evans, under these circumstances, were the actual beneficiaries, such is not necessary. Consideration to support their surety-guaranty agreement exists by reason of the benefit accruing to the Debco Corporation. The surety agreement was made contemporaneously with the execution of the note by the Corporaion. It was a part of the note before its delivery to and acceptance by plaintiff. To support a contract of suretyship-guarantyship it is not necessary that any consideration pass directly to the surety. A consideration moving to the principal alone will support the surety. Bonner Oil Co. v. Gaines, 108 Tex. 232, 191 S.W. 552.

As to the contention of defendants that the surety-guaranty was executed with the understanding and agreement that they would not be liable thereon, and that it was obtained by the...