Erwin v. E. I. Du Pont De Nemours Powder Co.

CourtCourt of Appeals of Texas
Citation156 S.W. 1097
PartiesERWIN et al. v. E. I. DU PONT DE NEMOURS POWDER CO. et al.
Decision Date19 April 1913

Appeal from District Court, Dallas County; J. C. Roberts, Judge.

Action by E. I. Du Pont De Nemours Powder Company and others against T. R. Erwin and others. From a judgment for plaintiff and establishing the rights of defendants as between themselves, some of the defendants appeal. Reformed and affirmed.

Alexander, Power & Ridgway, of Ft. Worth, and Stennis & Wilson, of Weatherford, for appellants. A. B. Flanary, of Dallas, for appellees.

RASBURY, J.

The appellee Du Pont De Nemours Powder Company, a foreign corporation, sued Mitchell-Pigg Construction Company, W. J. Sparks, J. W. Pigg, H. F. Mitchell, M. D. Plumlee, W. H. Vardeman, A. S. Chapman, J. W. Braselton, and T. R. Erwin, as makers, and Will R. Allen, as indorser, of a negotiable promissory note in the sum of $5,904.05, payable to said Will R. Allen.

Appellee powder company, in the pleading upon which it went to trial, alleged that it acquired the note sued upon from Will R. Allen, the payee, before maturity for value, and without notice of any of the defenses subsequently set up by the makers, etc. Appellee Allen, the payee in the note, adopted the pleading of the powder company and admitted his liability as indorser on the note, but denied any liability until all remedies had been exhausted against his several codefendants, and, further, that he received and accepted said note for value paid, without knowledge of the defenses alleged by his codefendants.

The appellant Erwin pleaded, in substance, that the note was given in payment of an account standing in the name of Allen against Mitchell-Pigg Construction Company for powder and other explosives, but which were in fact sold to said Mitchell-Pigg Construction Company by appellee powder company, through said Allen as its agent, and which had been used in the construction of the roadbed of the Chicago, Weatherford & Brazos Valley Railway Company, and that said Allen had established against the roadbed of said railway the statutory materialman's lien in order to secure the payment of the account covered by said note, the property against which said lien was established being of the value of $50,000, and then in the possession of G. A. Holland, appointed receiver of the property of both railway company and said construction company, by the district court of Parker county, and neither of which companies had been made parties to the suit upon the note. Upon the foregoing allegations it was asserted and prayed that the case be abated until appellee had first exhausted its remedy under said materialman's lien.

Erwin next pleaded that appellee powder company is a foreign corporation, without a permit from the state of Texas to transact its business here, and since the note was in payment of certain business transacted in Texas, appellee was not entitled to maintain the suit, etc.

Erwin then pleaded to the merits that he signed the note merely as surety for said construction company, and upon the express condition that J. W. Braselton would also sign same as a maker, which condition was known to said Allen and the powder company, through their agent and representative, A. B. Flanary, Esq., who also knew that said note was being taken for the use and benefit of said powder company, and that he did not know until after the acceptance and delivery of said note that said Braselton had limited his liability thereon by indorsing same only, and that he would not have signed same had he known that said Braselton intended to so limit his liability, and because of which he was released from liability thereon. Erwin also alleged that the transfer of the note from Allen to the powder company was a sham, for the reason that, in selling said material to the construction company and in taking said note in his name covering such account, said Allen was acting for and on behalf of the powder company and as its agent.

Appellants Sparks, Pigg, Mitchell, Plumlee, Vardeman, and Chapman, as touching the issues raised in their brief, pleaded suretyship against the construction company, and that appellee was in law compelled to exhaust its remedy under the materialman's lien as pleaded by the appellant Erwin, etc., and in which latter plea the construction company joined.

Appellee Braselton pleaded in abatement of the suit as set out in the plea of appellant Erwin; also that he signed his name across the back of the note on the express condition that he should be liable only as an accommodation indorser, and at no time agreed to become a surety for the payment thereof, and that all other parties thereto knew that he agreed to be bound only as indorser. He prayed judgment against all parties accordingly, except the powder company and Allen, the payee, in the note.

Upon trial before jury the court peremptorily instructed the jury to, and they did, return a verdict for the powder company against all the makers and the indorsers for the amount of the principal of the note, interest, attorney's fees and protest fees amounting to the gross sum of $7,086.71; for Allen, the indorser, against all the other defendants for a similar amount; for Braselton against all the defendants, except Allen, the indorser, for a similar amount; for all the defendants, except Allen and Braselton, against the construction company for a similar amount; and finding that all defendants should, to the extent of any payments they might make on the judgment, be subrogated to any lien established against the property of the construction company by Allen. Upon the directed verdict the judgment was entered accordingly, and from which all the parties, except Allen, the indorser, and Braselton, have appealed.

The following facts, and the essential ones, in substance, are undisputed: Will R. Allen, at the time and prior to the execution of the note sued on, was a merchant in the city of Dallas, engaged in the sale of powder and explosives, and was agent for the sale of the powder and explosives of appellee powder company, as well as agent for the sale of similar articles for another concern. All powder, etc., bought by him from the powder company was bought outright, and all owned by him and the agency "in a general merchantable sense," as he puts it, was that he bought and sold or carried in stock the powder company's powder, etc. No sales were made by him on commission. When he received an order from a customer for powder he exercised his judgment as to which concern's powder he would deliver. Under a contract with the powder company all powder bought by him from it was required to be stored in magazines erected by what he understood to be a subsidiary realty corporation of the appellee powder company, and for the use of which Allen paid no rental. Prior to the execution of the note Allen sold certain powder and explosives to the construction company, used by it in constructing the roadbed of the Chicago, Weatherford & Brazos Valley Railway Company. The bill for the powder, etc., being several months overdue and Allen being unable to collect it, he placed same with his attorney, A. B. Flanary, Esq., for collection and adjustment. Mr. Flanary finally secured the note sued on and delivered same to Allen, signed by all the parties as makers, except Braselton, who signed the same across the back without indicating the capacity in which he signed. Allen failing to negotiate the note in Dallas, or where the makers were known, went to Wilmington, Del., where the said powder company is domiciled, and by indorsing same got that concern to accept same as a credit on his account. The credit allowed on his account for the note did not go specifically in payment of the debt of the construction company; that debt having been prior to that time paid by Allen. The note was signed by all parties at Weatherford, Tex., and there delivered to Flanary, the attorney for Allen. All the makers had signed the note, except Erwin, when it was presented to Braselton in the forenoon of the day of its execution. When first presented to him he positively declined to sign it. After some discussion with those interested, he told them he would consider it further. Those in charge of the matter then went to Erwin seeking his signature on the note, whom, it seems, they had been negotiating with before, and he finally signed the note upon the express condition that Braselton would also sign and upon the agreement of the parties that he would do so. The note was again presented to Braselton, who examined it and said it was a good note, and that he would "indorse" it, which he did. There was much testimony, of course, developed in detail on the trial, but what we have outlined are the substantial facts, briefly told, upon which the rights and liabilities of the parties depend. It is proper to say, if that fact is important, that no representations were made by Flanary to any of the parties that induced them to sign the note, or which would affect their liability. Nor did he in any respect represent the powder company, but was solely representing Will R. Allen. Another fact necessary to state in passing upon one of the issues presented by this appeal is that about three days prior to the execution of the note sued on Will R. Allen prepared and filed, in the office of the county clerk of Parker county, an affidavit under the statute claiming a lien on the property of the Chicago, Weatherford & Brazos Valley Railway Company, for the cost of the powder, etc., furnished to the construction company, and which was used in the construction of the railroad company's roadbed, etc. Also, it was shown that G. A. Holland had been appointed by the district court of Parker county, and qualified as receiver of both the construction company and the Chicago, Weatherford & Brazos Valley Railway Company, and was in possession of and...

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