First Nat. Bank v. Lee County Cotton Oil Co.

• Decision Date: 24 January 1923
• Docket Number: (No. 6540.)
• Citation: 250 S.W. 313
• Parties: FIRST NAT. BANK OF GIDDINGS v. LEE COUNTY COTTON OIL CO. et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

250 S.W. 313

FIRST NAT. BANK OF GIDDINGS v. LEE COUNTY COTTON OIL CO. et al.^*

(No. 6540.)

Court of Civil Appeals of Texas. Austin.

January 24, 1923.

Rehearing Denied March 7, 1923.

Appeal from District Court, Lee County; R. J. Alexander, Judge.

Action by the First National Bank of Giddings, Tex., against the Lee County Cotton Oil Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Watson & Simmang, of Giddings, for appellant.

Bowers & Bowers, of Caldwell, for appellee Caldwell Oil & Mill Co.

The Bowers, of Giddings, for appellee Gerhard Zoch.

Fiset & Shelley and F. W. Moore, all of Austin, for appellee Oscar Robinson, sued also as Southern Cotton Seed Co.

BLAIR, J.

This suit is an appeal from a judgment of the district court of Lee county, Tex., sustaining a general demurrer to appellant's petition for its failure to allege sufficient facts to properly fix the liability of the drawers and indorsers of the numerous sight drafts and bills of exchange herein sued upon.

The suit was filed by the First National Bank of Giddings, Tex., appellant, against the Lee County Cotton Oil Company, as acceptor, or drawee, and against the other defendants, appellees herein, either as drawers or indorsers of notes, sight drafts, and bills of exchange, the recovery on which is sought. The sight drafts and bills of exchange were transferred to appellant by the Lee County Cotton Oil Company, by blank indorsement, for a valuable consideration, before maturity, without notice, and appellant became the owner thereof in due course of trade. The suit was filed before the first term of the district court of Lee county, Tex., after dishonor of said sight drafts and bills of exchange by nonpayment. However, the petition did not so allege that it was brought at the first term after dishonor; nor did it allege that notice of dishonor had been given drawers and indorsers as required by law to fix their liability on the sight drafts and bills of exchange herein sued upon.

The trial judge in sustaining the general demurrer to appellant's petition held that the Uniform Negotiable Instruments Act of 1919, by Article 7, §§ 89 to 118, both inclusive, Acts of 36th Legislature, pp. 200-203 (Vernon's Ann. Civ. St. Supp. 1922, arts. 6001-89 to 6001-118), repealed article 579, Revised Statutes of 1911, which latter act fixed the liability of drawers and indorsers of notes and bills of exchange by bringing suit at the first term of the court having jurisdiction after the cause of action accrued, or at the second term, good reason being shown why it was not brought at the first term; and further, because of the failure of appellant's petition to allege that notice to so fix the liability of appellees herein, as required by the Uniform Negotiable Instruments Act of 1919, had been given. Appellant in open court refused to amend its petition, but excepted to the action of the court in sustaining the general demurrer, and by proper assignments of error present its case for our determination.

By its first and second assignments of error appellant complains of the action of the trial judge in holding that article 7, and the various sections 89 to 118, both inclusive, had repealed article 579, Revised Statutes of 1911.

In order that the subject-matter of these laws may be clearly reviewed in this opinion, we set them out in full herein.

Article 579, Revised Statutes of 1911, provides as follows:

"The holder of any bill of exchange or promissory note, assignable or negotiable by law, may secure and fix the liability of any drawer or indorser of such bill of exchange, and every indorser of such promissory note, without protest or notice, by instituting suit against the acceptor of such bill of exchange, or against the maker of said promissory note, before the first term of the district or county court to which suit can be brought, after the right of action shall accrue; or by instituting suit before the second term of said court, after the right of action shall accrue, and showing good cause why suit was not instituted before the first term next after the right of action accrued."

It will be noted that article 579, R. S. 1911, as re-enacted by the Legislature, was originally passed in 1848, evidently for the purpose of providing a means of fixing the liability of drawers and indorsers of notes and bills of exchange as stated, other than by protest and notice as required by the custom of law merchant then in use.

Acts 36th Legislature, article 7, p. 200, § 89, provides:

"Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged."

The various other sections 90 to 118, both inclusive, merely provide the mode and manner in which such notice is to be given, and the time thereof, as well as the circumstances under which such notice need not be given, and that protest, except in case of foreign instruments, need not be made. It will be noted that in none of these sections is it provided that liability may be fixed by suit without notice.

In the caption of the Uniform Negotiable Instruments Acts of 1919, we find the following language used:

"An act to make uniform the law of negotiable instruments in the state of Texas, repealing all laws and parts of laws in conflict herewith, and declaring an emergency."

In section 89 of same law, we find it provides:

"Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged."

Also in section 197, under the head of "General Provisions," of this same law, we find the following:

"All acts and parts of acts inconsistent with this act are hereby repealed."

We are of the opinion that an act which provides a means of fixing the liability of the drawers and indorsers of notes and bills of exchange by bringing suit at a specified time, without notice or protest, is not only in conflict with, but is repugnant to, and is repealed...