Faulk v. Futch

• Decision Date: 10 March 1948
• Docket Number: No. 11783.,11783.
• Parties: FAULK et ux. v. FUTCH et ux.
• Court: Texas Court of Appeals

Page 1008

209 S.W.2d 1008

FAULK et ux. v. FUTCH et ux.

No. 11783.

Court of Civil Appeals of Texas. San Antonio.

March 10, 1948.

Rehearing Denied April 7, 1948.

Appeal from District Court, Bexar County; Delos Finch, Judge.

Suit by E. W. Faulk and wife, Olivia Faulk, against J. S. Futch and wife Thelma R. Futch, to enjoin defendants from attempting to interfere with the operation of a common carrier motor freight line by taking physical possession of its operation, equipment or physical properties, wherein the defendants filed a cross-action for the balance allegedly due on a note signed by the plaintiffs. R. T. Herrin, who owned 49 per cent of the capital stock of Airline Freight Line, Inc., intervened, asking that a receiver be appointed. From a judgment appointing a receiver, denying plaintiffs any relief, and denying in part and granting in part relief sought by defendants, the plaintiffs appeal, and the defendants cross-appeal.

Judgment reformed and affirmed.

Maynard F. Robinson, of San Antonio, for appellant.

Al M. Heck, Park Street, Carl Wright Johnson and Nat L. Hardy, all of San Antonio, and Phinney, Romick & Hallman, of Dallas, for appellee.

MURRAY, Justice.

This suit was instituted by E. W. Faulk and wife, Olivia Faulk, against J. S. Futch and wife, Thelma R. Futch, seeking to enjoin the defendants from, among other things, attempting in any manner to interfere with the operation of Airline Freight Line, Inc., a common carrier motor freight line, by taking physical possession of its operation, equipment or physical properties. A temporary injunction was issued, but upon final hearing the temporary injunction was dissolved and a permanent injunction was refused.

Defendants answered by general denial and special answer, and also filed a cross-action for the balance alleged to be due upon a promissory note in the principal sum of $33,000.00 dated June 14, 1946, and signed by plaintiffs.

This note, by its expressed terms, was payable to defendants in San Antonio, Bexar County, Texas; $1000.00 on September 14, 1946, and $250.00 on the 14th day of each succeeding month for a period of fifteen years. It is further provided that "in the event any default is made in the payment of any installment of principal or interest hereon, or any part thereof, when due, such default shall, at the option of the holder, at once mature the whole of this note." The note was secured by the pledge of 51% of the stock of Airline Freight Line, Inc., and five shares of stock in H. & A. Truck Lines, Inc. The pledge agreement provided: "In the event of any default in the payment of principal and interest, or any part thereof, when due on said note for $33,000.00, hereinabove described, the holder, or holders, is authorized and empowered, without either demand, advertisement or notice of any kind, to sell at public or private sale, the security then held by said holder, or holders in pledge hereunder, and deliver same to the purchaser or purchasers thereof, and to receive the proceeds of sale. Said holder, or holders, to have the same right to purchase at said sale as a stranger."

R. T. Herrin, who was the owner of the remaining 49% of the capital stock of Airline Freight Line, Inc., intervened in the case and asked that a receiver for the freight line be appointed.

The trial was before the court without the intervention of a jury and resulted in judgment, first, that plaintiffs and cross-defendants take nothing by reason of their suit for injunction and the temporary injunction theretofore issued be dissolved; second, that the cross-plaintiffs recover from cross-defendants all right, title and interest in and to the pledged stock and rights accruing to them by reason of the ownership, which ownership was acquired by virtue of a sale of said stock to said cross-plaintiffs for the sum of $15,000.00, paid by a credit upon an indebtedness and under the terms of a valid pledge agreement, which said sale was made on the 28th day of February, 1947, in Bexar County, Texas, and all other relief prayed for by cross-plaintiffs was denied, including cross-plaintiffs' prayer for a deficiency judgment; third, that the receivership prayed for by intervenor be granted.

From this judgment E. W. Faulk and wife, Olivia Faulk, have prosecuted this appeal and, likewise, J. S. Futch and wife, Thelma R. Futch, have prosecuted an appeal by giving notice of appeal and filing cross-assignments of error.

The controlling question here presented is whether J. S. Futch and Thelma R. Futch were entitled to accelerate the maturity date of the installment note held by them and declare the entire amount of principal due and payable.

The note itself did not contain any provision authorizing the holder or holders thereof to accelerate the maturity of the note without demand for payment or notice.

It is true that the Negotiable Instruments Act, Art. 5937, § 70, Vernon's Ann.Civ.Stats., provides that presentment for payment is not necessary in order to charge the person primarily liable on the instrument, but where the right to accelerate the maturity of the note is optional with the holder thereof this provision does not authorize such holder or holders of a note to accelerate the maturity of a note without presentment for payment. The decisions seem to be clear that unless a note expressly provides that the maturity thereof can be accelerated without presentment for payment then such presentment is a prerequisite to acceleration of maturity. Parker v. Mazur, Tex.Civ.App., 13 S.W.2d 174, 175; Ladd v. Anderson, Tex.Civ.App., 89 S.W.2d 1041, 1052; Curtis v. Speck, Tex.Civ.App., 130 S.W.2d 348; Beckham v. Scott, Tex.Civ.App., 142 S.W. 80.

In Griffin v. Reilly, Tex.Civ.App., 275 S. W. 242, 248, it is stated: "Where the acceleration clause in a promissory note leaves it optional with the holder whether he shall declare the whole amount due upon failure to pay any installment of principal or interest, such holder cannot without presentment for payment, exercise his option to declare the whole amount due, if no specific place of payment is expressed in the note, until it has been presented to the payer at the latter's known place of business. Bardsley v. Washington Mill Co., 54 Wash. 553, 103 P. 822, 132...