Hawkins v. Western Nat. Bank

• Decision Date: 10 February 1912
• Citation: 146 S.W. 1191
• Parties: HAWKINS v. WESTERN NAT. BANK OF HEREFORD.
• Court: Texas Court of Appeals

146 S.W. 1191

HAWKINS v. WESTERN NAT. BANK OF HEREFORD.

Court of Civil Appeals of Texas. Amarillo.

February 10, 1912.

On Rehearing, April 6, 1912.

Appeal from Deaf Smith County Court; C. D. Wright, Judge.

Action by the Western National Bank of Hereford against H. H. Hawkins. From a judgment for plaintiff, defendant appeals Reversed and rendered.

Barcus & North, of Hereford, for appellant. Knight & Slaton, of Hereford, for appellee.

HALL, J.

Appellee instituted this suit in the county court of Deaf Smith county against appellant for the recovery of damages growing out of the alleged conversion of certain plumbers' and tinners' tools. The court peremptorily instructed the jury to find for appellee.

The facts, briefly stated, are: That appellant and one Woods owned the tools in question, and on the 1st day of May, by a bill of sale, transferred the tools and the entire business to the Hereford Sheet Metal & Plumbing Works, which it seems was a firm composed of A. A. Jones and J. A. Weatherly. This instrument contained this recital: "Hawkins & Woods retain a lien on all tools until the three notes are paid, then we agree to release same." The instrument was never registered. Only one of the notes referred to was ever paid in cash. On the 2d day of August, thereafter, J. A. Weatherly, A. A. Jones, H. F. McCulley, and J. M. Clancy entered into a contract, whereby J. A. Weatherly conveyed to the other named parties his interest in the business, and under the terms of which A. A. Jones, H. F. McCulley, and J. M. Clancy each owned an undivided one-third interest in the business. As part consideration named in said contract, Jones, McCulley, and Clancy assumed to pay appellant all the indebtedness due him evidenced by the notes above mentioned. In this instrument Jones retained a second lien, subject to the lien held by Hawkins, to secure him in the sum of $650, due him from McCulley and Clancy for his interest in the business. This instrument was acknowledged by Weatherly, Clancy, McCulley, and Jones, and was filed for record on August 19, 1909, with the county clerk of Deaf Smith county, and recorded in the records of contracts and mechanics' liens of said county on the same day. When it was offered in evidence, it was excluded by the court upon objections made by appellee bank. It should have been admitted. Cleveland v. Empire Mills, 6 Tex. Civ. App. 479, 25 S. W. 1055.

On July 9, 1909, A. A. Jones executed to appellee bank his note for $250, payable 90 days after date, with 10 per cent. interest from maturity, and providing for 10 per cent. attorney's fees. The note is signed, "Hereford Sheet Metal & Plumbing Works," followed by the signature of A. A. Jones, N. C. Vogali, and J. M. Boon; the latter two signing as sureties. The statement of facts shows that the name of Jones was written on the first printed line for signatures, and the name of "Hereford Sheet Metal & Plumbing Works" written above the name of Jones, a part of the writing overlapping some of the printed words of the note. This note was admitted in evidence, and with it a chattel mortgage purporting to describe the above note, which it was given to secure, creating a lien upon the tools and machinery of the Hereford Sheet Metal & Plumbing Works, and is signed "Hereford S. M. & P. Works, and A. A. Jones," dated July 10, 1909, duly acknowledged, but was not filed for record with the county clerk until August 21, 1909, at 10 o'clock a. m. The uncontradicted testimony shows that on August 20, 1909, A. A. Jones sold out his entire interest in the business to his partners J. A. Clancy and H. F. McCulley, that neither Clancy nor McCulley had any notice of the existence of appellee's debt and mortgage to appellee until after they had bought the interest of Jones; and it is further uncontradicted that Weatherly had no notice of the execution or the existence of appellee's debt against Jones and the mortgage above described. The uncontradicted testimony shows that on August 2, 1909, when Weatherly sold his interest to Jones, McCulley, and Clancy, and while John C. North, an attorney, was preparing the bill of sale and contract, Clancy and McCulley asked Weatherly and Jones for a statement of the debts of the concern, and Weatherly said he did not know but that Jones could give a list, that Jones did get up a list of the debts, and that appellee's debt was not included therein. It further appears from the record that, as soon as the appellee filed its mortgage, the business of the firm required a disposition of the assets, and that they were turned over to G. W. Barcus by McCulley and Clancy, to be handled by him as trustee for benefit of the firm creditors, as shown by said list furnished by Jones. About the middle of September, 1909, Barcus sold the property described in plaintiff's petition to appellant Hawkins, and as payment for same Hawkins surrendered the two notes which had originally been given him by Weatherly and Jones as part of the purchase price of the tools, and the notes were marked, "Paid." The case is before this court upon numerous assignments of error which it will not be necessary to consider in detail. Article 3328, Sayles' Civil Statutes, provides that every chattel mortgage which shall not be accompanied by an immediate delivery of the property, and be followed by actual and continued change of the possession of the property mortgaged, shall be absolutely void as against subsequent purchasers in good faith of the property from the mortgagor, unless such instrument, or a true copy thereof, shall be forthwith deposited with and filed in the office of the county clerk of the county where the property shall then be situated. The appellee's mortgage was executed July 9th, and was not filed until August the 21st following. There was no change of possession of the mortgaged property from the mortgagor to the mortgagee.

In our opinion, the above facts are sufficient to show that McCulley and Clancy were bona fide purchasers of the property, and that they obtained the title free of appellee's unrecorded mortgage.

Appellant, having bought the property from their trustee, acquired title to the same as against the bank, even though he had constructive notice of the mortgage at the date of his purchase in September, since he was a purchaser from bona fide purchasers. Sanger v. Thomasson, 44 S. W. 408; Bergen v. Producers' M. Co., 72 Tex. 53, 11 S. W. 1027.

There being no circumstances connected with the uncontradicted evidence which tended to impeach it, the trial court had no right to arbitrarily disregard it and peremptorily instruct the jury to find against it.

Appellee insists because Jones was the partner of McCulley and Clancy that his knowledge of the appellee's note and mortgage was notice to the firm. The general rule is that notice to an active partner of any matter relating to the partnership affairs is notice to the firm, but by reason of the fraudulent concealment and misrepresentation of Jones on August 2d, with reference to the debts against the business, the rule does not apply. Liddell v. Crain, 53 Tex. 549. The record shows...