Goldman v. Blum

• Decision Date: 30 March 1883
• Docket Number: Case No. 1389.
• Citation: 58 Tex. 630
• Court: Texas Supreme Court
• Parties: A. GOLDMAN, ADM'R OF T. C. BARDEN, DECEASED, v. L. & H. BLUM AND HEIDENHEIMER BROS.

58 Tex. 630

A. GOLDMAN, ADM'R OF T. C. BARDEN, DECEASED,

v.L. & H. BLUM AND HEIDENHEIMER BROS.

Case No. 1389.

Supreme Court of Texas.

Mar. 30, 1883.

APPEAL from Victoria. Tried below before the Hon. H. Clay Pleasants.

This suit was jointly brought by Leon & H. Blum and Heidenheimer Bros. against A. Goldman, administrator of the estate of T. C. Barden, deceased, and Eva L. Barden, his widow, and John Owens, to recover against said estate, in favor of Leon & H. Blum, the sum of $4,000, with interest thereon from the 12th day of March, 1877, and to recover in favor of Heidenheimer Bros. the sum of $5,267.92, with interest thereon from the date aforesaid, and to foreclose a deed of trust executed by Barden and wife.

The basis of the suit was a promissory note for $15,000, executed by Barden to Owen, of date February 28, 1877, secured by a deed of trust on lands and on property, executed on the date aforesaid.

Four thousand dollars of said note was assigned by Owens to Leon & H. Blum, and $5,267.92 thereof to Heidenheimer Bros., on the 20th day of March, 1877.

The defendants, A. Goldman, administrator, and Eva L. Barden, demurred to plaintiffs' petition, and as a special ground of demurrer alleged that the suit could not be maintained by the plaintiffs upon the partial assignments made to each of the plaintiff firms of the specified portions of the note sued on.

The demurrer further set up the misjoinder of parties plaintiff.

The demurrers were overruled and the cause was tried by a jury, and a judgment rendered in favor of the firms plaintiff for the sum by them severally claimed.

The note was as follows:

+---------------------------------------------------+
                ¦“$15,000.¦VICTORIA, TEXAS, February 28, A. D. 1877.¦
                +---------------------------------------------------+
                

Two years after date I promise to pay to John Owens, or order, the sum of fifteen thousand dollars, with interest thereon at the rate of eight per cent. per annum from maturity until paid, value received.

This note is due and payable in the city of Galveston, state of Texas, and is secured by deed of trust on lands and premises in Wharton county, state of Texas.

+------------------------+
                ¦(Signed)¦T. C. BARDEN.” ¦
                +------------------------+
                

On the back of the note was written as follows:

“For value received, I hereby transfer to Leon & H. Blum the amount of four thousand dollars of the within note and the security therefor; and for value received, I hereby transfer to Heidenheimer Bros. the amount of fifty-two hundred and sixty-seven dollars and ninety-two cents of the within note and the security therefor, with interest on each amount from March 12, 1879; and for value received, I hereby guaranty and insure the prompt payment of the within note at its maturity, and waive suit, protest and notice on each of the respective amounts referred to above.

+----------------------------------------------+
                ¦GALVESTON, TEXAS, March 12, 1877.¦JOHN OWENS.”¦
                +----------------------------------------------+
                

There was proof that, about the date of this note, Barden, Owens and one Shelton entered into articles of partnership.

The above note was dated February 28, 1877. The transfer on the back is of date 12th March, 1877. The articles of partnership between Owens, Barden and Shelton, above alluded to, were dated 12th March, 1877. The deed of trust was acknowledged in Victoria by Barden and wife on the 8th of March, 1877, and was recorded in Wharton county, 17th of March, 1877. S. Blum, of the firm of Leon & H. Blum, was the trustee named in the deed, and had been agreed upon as trustee before the note or deed of trust was signed. At the same time, 12th March, 1877, Owens executed his notes to L. & H. Blum and Heidenheimer Bros. for the debts he previously owed them.

There was also offered in evidence letters and memoranda, made about the date of the transactions, by the parties to them. These bore the date of about the 14th of February, 1877. T. C. Barden died before the maturity of the note.

There was evidence introduced to show that notwithstanding the apparent difference in dates, that the note, the deed of trust to secure the note, the articles of partnership between Owens, Barden and Shelton, the memorandum and correspondence and Owens' notes to appellees, were all parts of one transaction, the action in reference to which extended from about the 12th of February, 1877, or a little before that date, down to the 12th and possibly the 17th of March, 1877, and that in fact up to the 12th of March, 1877, that Barden's note remained under the control and in the possession of either of Barden himself, or of his agent Owens, as also were up to that date Owens' own notes to the appellees.

In the articles of partnership it was especially agreed that Barden's note and deed of trust above set forth were not to be used by Owens except as collateral security for the payment of such advances as might be made in the future by Galveston merchants to the firm of Owens, Barden & Shelton, and any other disposition of it was expressly forbidden.

The evidence of Shelton was to the effect that though Owens was then in fact insolvent, that both he (Shelton) and Owens concealed his financial condition from Barden and did not inform him of the existence of the debts, for the securing of which, Owens, in fact, assigned the note in question, contrary to his written agreement with Barden.

The evidence does not show that either L. & H. Blum or Heidenheimer Bros. knew that Barden had forbid Owens to transfer the note except for future advances.

It appears, however, that they knew that Owens, Barden and Shelton had formed a partnership. The court excluded the articles of partnership so far as they related to L. & H. Blum and Heidenheimer Bros., but admitted them so far as Owens was concerned.

The court excluded the letters, memoranda, calculations, etc., marked exhibits “A,” “B” and “C,” that were offered in evidence as part of the res gestæ.

The notice required by the terms of the deed of trust, before a sale could be had, is referred to in the opinion. Verdict and judgment for L. & H. Blum and heidenheimer Bros. Owens made no defense.

Lackey & Kleberg and A. B. Peticolas, for appellant.

Glass & Callender and Scott & Levi, for appellees.

I. Under our system of blended law and equity jurisdiction, two parties can maintain a suit upon a promissory note of which a part has been assigned to each; if together, the two assignments transfer all that is due on the note. All the parties to the note sued on in this case being before the court, so that the equities among them all could be adjusted, the general and technical rule of law, that a partial indorsement will not support an action, did not apply. Liddell v. Crane, 53 Tex., 550;Guest v. Rhine, 16 Tex., 549;Smith v. Klopton, 4 Tex., 114;Flint v. Flint, 6 Allen, 34;Groves v. Ruby, 24 Ind., 418; 2 Story's Eq. Jur., 1039, 1040, 1044.

II. The six months' notice required by the provision of the deed quoted in said second proposition related to a foreclosure in the summary method allowed by the deed of trust itself, and not to a suit against the administrator of Barden and his widow, after said administrator rejected plaintiffs' claims. The deed of trust provided for foreclosure by sale of the property conveyed, being an ordinary deed of trust. The petition alleges Barden's death before the maturity of the note, and that plaintiffs' claims were rejected by the administrator.

III. That the court having admitted the articles of copartnership to the jury, the exclusion of them in his charge from the consideration of the jury as evidence to prove notice of their contents on the part of plaintiffs, is appellants' ground of complaint, if any they have, and not the fact that at a particular period in the progress of the case he excluded the articles. The articles are incompetent to prove notice to plaintiffs, but competent to prove Owens' liability to Goldman, and the court properly instructed the jury as to the competency of the articles for different purposes.

IV. The propositions of A. B. Peticolas, Esq., under the second assignment of errors, and the proposition of Lackey & Kleberg, under the fifth assignment of errors, are designed to show error of the court in excluding evidence of the equities between Barden and Owens, because the note sued on was not a negotiable instrument, for that:

1. The deed of trust executed at the same time as the note to secure it, and which was transferred with the several parts of the note sued on, contains a provision that the trust created in said deed should not be foreclosed without six months' notice to Barden of the cestui que trust's intention to foreclose.

2. The note was transferred by assignment and not indorsement.

3. The assignments were as collateral security for a prior debt of payee, who guarantied the payment of the note.

4. The note was assigned in part to two persons by the payee.

5. The proof showed that the words of the assignment from Owens to plaintiffs were on the note before Barden signed the note, and that said assignment was not signed by Owens until Barden executed the note.

To the said propositions we offer the following counter propositions:

First. The provision of the deed of trust referred to relates entirely and exclusively to the mode of foreclosing the lien created by said deed, and in no wise affected Barden's personal liability on the note as a negotiable instrument, or changed the character of the note itself. The action is in the nature of debitatus assumpsit; the note is the evidence of the debt and the deed of trust merely an incident. Cannon v. McDaniel, 46 Tex., 305;Helmer v. Crolick, 36 Mich., 371;Kelley v. Whitney, 45 Wis., 110.

Second. In Texas the distinction which obtains in the law merchant between assignment and indorsement does not obtain, but, on the contrary, all assignments of negotiable instruments are treated as indorsements, and an assignment...