Harrison v. Ingham, 11928.

• Decision Date: 16 March 1949
• Docket Number: No. 11928.,11928.
• Citation: 223 S.W.2d 267
• Parties: HARRISON v. INGHAM et al.
• Court: Texas Court of Appeals

223 S.W.2d 267

HARRISON v. INGHAM et al.

No. 11928.

Court of Civil Appeals of Texas. San Antonio.

March 16, 1949.

Rehearing Denied May 11, 1949.

Tom E. Moberly, San Antonio, Ben F. Foster, San Antonio, for appellant.

Stahl & Sohn, San Antonio, Hosea C. Dakan, San Antonio, Ruben R. Lozano, San Antonio, James L. M. Miller, San Antonio, Chas. W. Duke, San Antonio, Heck & Street, San Antonio, for appellees.

W. O. MURRAY, Associate Justice.

This is a suit by B. S. Harrison against Olive Belle Ingham and Cleo T. Davidson, upon a promissory note signed by them as makers, payment of which is secured by builder's and mechanic's contract lien and deed of trust lien upon property known as 122 Furr Drive, San Antonio, Texas, and for foreclosure of said liens, which note was endorsed, transferred and delivered by Van Smith, contractor, payee in said note, to Harrison. The suit also involves the claims of five different furnishers of material and labor in the construction of the improvements upon the property owned by Olive Belle Ingham and Cleo T. Davidson, the makers of the note. Harrison also sued upon a statutory mechanic's lien claim, assigned to him by Smith, contractor, for additional work allegedly done by Smith for said Ingham and Davidson, seeking foreclosure of said statutory mechanic's lien upon the above described property.

The trial was to the court without the intervention of a jury and resulted in a judgment in favor of B. S. Harrison for $9,000 (the principal balance due on the note), less these deductions: $1,927.80 in favor of the makers of the note; $666.80 in favor of Wm. C. Darsey; $798.84 in favor of Harry T. Pitts; $272.30 in favor of John A. Williamson and F. J. Bublitz, partners under the trade name of John A. Williams Company; $269.50 in favor of E. Fishinger and C. F. Bonn, partners under the name of the Alamo Sheet Metal & Roofing Company; and $1,976.51 in favor of A. B. Hawley and J. H. Raybourn, partners under the name of Northside Building Materials Company, making a recovery on the note of $3,293.58 in favor of appellant, except that $195.33 of this sum is for additional work described in the statutory mechanic's lien; with foreclosure of said contract and deed of trust liens. From that judgment B. S. Harrison has prosecuted this appeal.

The all-important question here presented is whether B. S. Harrison is a holder of this note in due course. It is clear that if B. S. Harrison is a holder in due course he is entitled to recover the full amount now due and owing upon said note, while if he is not such holder in due course, then the makers of the note are entitled to urge any defense they could have urged against the original payee. Continental National Bank of Ft. Worth v. Conner, Tex.Sup., 214 S.W.2d 928.

On or about January 11, 1946, appellees, Olive Belle Ingham and Cleo T. Davidson, as owners of the property known as 122 Furr Drive, San Antonio, Texas, entered into a building contract with Van Smith, as contractor, for the construction of certain improvements upon that property for a total consideration of $14,989.44, to be paid as the work progressed. On April 18, 1946, at which time there was a balance of $9,000 due on said contract, and at the request of Van Smith, the contractor, appellees, Ingham and Davidson, executed a promissory note for $14,989.44, pre-dated to January 14, 1946, with the note showing credits of $5,989.44; and at the same time appellees Ingham and Davidson executed a Builder's & Mechanic's Lien Contract and Deed of Trust. The note recited that it was due on June 1, 1946, and the Builder's & Mechanic's Lien Contract provided that the improvements were to be completed and delivered on or before June 1, 1946, free from all liens and claims of every kind and character. Contractor, Van Smith, testified that on or about April 23, 1946, he endorsed this note to B. S. Harrison and received a check from him in the sum of $6,500 for the purchase of the note. The bank records show that Van Smith deposited the sum of $6,500 in his account on that date and that B. S. Harrison's account was charged with this amount the following day. Van Smith also testified that B. S. Harrison thereafter advanced him, at one time, the sum of $2,000, and at another time, the sum of $2,500, and that both of said advancements were made prior to June 1, 1946. Van Smith also testified that when he delivered the note to B. S. Harrison on April 23, 1946, he also delivered to him the mechanic's lien contract and deed of trust.

On November 29, 1946, Van Smith executed a written transfer and assignment of the note, dated November 29, 1946, to B. S. Harrison and the trial judge found that the note was transferred to Harrison on this date, which was after the note was past due. B. S. Harrison did not testify as to when he purchased the note. In fact, he did not testify at all, either by deposition or otherwise. Harrison had engaged in numerous business transactions with Van Smith and had loaned him money on various occasions. Van Smith gave testimony with reference to other matters at the trial which was not believed by the trial court. The endorsement on the note was not dated. B. S. Harrison was eighty-one or eighty-two years of age and hard of hearing, but it was not shown that this prevented him from testifying.

On January 6, 1947, one of the attorneys for B. S. Harrison wrote to the Texas Title Company (Attention Mr. Boyd Smith) a letter calling attention to the written transfer of November 29, 1946, and in that connection stated: "Mr. Harrison has advanced Mr. Van Smith a considerable amount of money and Mr. Smith has promised to pay Mr. Harrison all amounts that he realizes from the Davidson-Ingham transaction."

This statement, made by B. S. Harrison's attorney long after the maturity date of the note, is in direct conflict with the testimony of Van Smith that ...