Hoffer v. Eastland Nat. Bank, 2320.
| Decision Date | 15 January 1943 |
| Docket Number | No. 2320.,2320. |
| Parties | HOFFER v. EASTLAND NAT. BANK et al. |
| Court | Texas Court of Appeals |
Appeal from District Court, Eighty-Eighth District, Eastland County; B. W. Patterson, Judge.
Action by the Eastland National Bank against Arnold Kirk and T. B. Hoffer, as drawer and acceptor, respectively, of a draft of $600 payable to the plaintiffs, wherein T. B. Hoffer impleaded J. P. Kirk and Frank Kirk, seeking judgment against Arnold Kirk and J. P. Kirk for the amount of any judgment that might be rendered against him in favor of the plaintiff. The court rendered judgment for the plaintiff against Arnold Kirk and T. B. Hoffer, and against T. B. Hoffer on his cross-action against Arnold Kirk, J. P. Kirk, and Frank Kirk, and T. B. Hoffer appeals.
Judgment on cross-action against Arnold Kirk reversed, and cause as to T. B. Hoffer and Arnold Kirk on the cross-action remanded, and judgment in other respects affirmed.
See, also, 153 S.W.2d 345.
Strickland, Ewers & Wilkins, of Mission, and Turner & Seaberry, of Eastland, for appellant.
Milburn McCarty, of Eastland, for appellee Eastland Nat. Bank.
Frank Sparks, of Eastland, for appellees Kirk.
Eastland National Bank sued Arnold Kirk and T. B. Hoffer as drawer and acceptor, respectively, of a draft for $600 payable to the bank, payment of which was refused by Hoffer. Hoffer denied liability on the ground that he had not accepted the draft. He also pleaded want of consideration. He alleged his acceptance of the draft, if any, was an accommodation acceptance, and that, at most, he was only secondarily liable because he received nothing of value from the transaction. He impleaded J. P. Kirk, mother of Arnold Kirk, and her husband, Frank Kirk. Hoffer sought judgment against Arnold Kirk and Mrs. J. P. Kirk for the amount of any judgment that might be rendered against him in favor of the bank.
On June 26, 1940, T. B. Hoffer sent the following telegram:
When the telegram was received by Arnold Kirk, he took it to the Eastland National Bank and drew the following draft:
C| Eastland National Bank
U| Eastland, Texas, Jun 26, 1940
S| __________________ pay to the order of
T| Eastland National Bank $600.00
O| Eastland, Texas
M| Six Hundred and no/100 .... Dollars
E| Value received and charge to account
R| of — With Exchange
S| (Signed) Arnold Kirk
D|
R| To T. B. Hoffer
A| % 1st State Bank & Tr. Co
F| Mission, Texas
T|
The bank alleged and the undisputed testimony of Albert Taylor, the active vice-president of said bank, who handled the transaction for the bank, and of Arnold Kirk, is to the effect that Arnold Kirk presented the telegram to said representative of the bank and stated to Mr. Taylor that Hoffer was indebted to him in excess of $600; that immediately prior to receiving the telegram he had talked with Hoffer over the telephone and told Hoffer he was trying to close a business deal and needed $600 and asked Hoffer to let him have that amount of money and to send him a telegram authorizing him to draw a draft on Hoffer for $600 so that he could obtain $600 on the draft; that Hoffer agreed to do so and promptly thereafter sent said telegram. Mr. Taylor testified he knew the financial responsibility of Arnold Kirk and T. B. Hoffer; that he would not have advanced $600 to Arnold Kirk without security; that he knew Hoffer was financially responsible; that the bank paid the draft to Arnold Kirk, relying on the promise and undertaking of Hoffer, as set out in said telegram; that the draft was in the regular course of business presented to Hoffer and he refused to pay it.
Hoffer's allegations and testimony are in substance that he sent the telegram to Arnold Kirk, as Kirk had requested over the telephone, so that Kirk could get $600 on the draft authorized by Hoffer's telegram but that he was not indebted to Arnold Kirk; that he told Kirk he would not pay the draft and that Kirk must make arrangements to pay the draft by the time it was returned and that Kirk agreed to do so.
The testimony of Albert Taylor and Arnold Kirk, and the bank's records show that when the bank cashed the draft for $600, $441.94 was credited to the J. P. Kirk account. There were three items for $42.01, $41.05, and $75, respectively, that were not credited to said account. The $75 appears to be cash paid to Arnold Kirk at the time the deposit was made. Mr. Taylor and Arnold Kirk testified, in substance, that it was their recollection that the other two items deducted from the $600 went to pay drafts for said amounts then in the bank and drawn on Arnold Kirk. They further testified that Arnold Kirk had two accounts in the Bank, one in his own name and the other in the name of J. P. Kirk, and that Mrs. J. P. Kirk, Arnold's mother, had nothing to do with said account. That when the J. P. Kirk account was previously opened by Arnold Kirk he instructed the bank not to honor any check drawn on said account except by Arnold Kirk; that such notation was made on the account and the instruction observed by the bank. There was no evidence that the bank got any part of the $600.
The Court instructed the jury to return a verdict for the Bank against Hoffer and Arnold Kirk and in favor of J. P. Kirk and Frank Kirk against Hoffer on his cross-action. The Court then submitted, in Hoffer's action against Arnold Kirk, the following issue: "Do you find from a preponderance of the evidence that the draft drawn by Defendant, Arnold Kirk, on Defendant, T. B. Hoffer, was not for paying an indebtedness, if any, due by said T. B. Hoffer to said Arnold Kirk?" The jury answered "It was for paying an indebtedness due by T. B. Hoffer to Defendant, Arnold Kirk."
The Court rendered judgment for the Bank against Hoffer and Arnold Kirk and against Hoffer on his cross action against Arnold, J. P. and Frank Kirk. Hoffer has appealed.
Hoffer's first point is that the Court erred in instructing a verdict in favor of the bank against Hoffer because the bank had elected to stand alone on the draft and Hoffer's alleged telegraphic acceptance, as such, and asserts that Hoffer's telegram was not an acceptance of the draft. The last sentence of the first point reads: "Plaintiff Bank, being payee in the draft, was not a holder in due course."
Of course, if Hoffer did not accept the draft he is not liable for its payment. Article 5941, Vernon's Ann.Civ.St., provides:
Hoffer's testimony shows he sent the telegram to Arnold Kirk for the purpose of enabling Kirk to take the telegram to a bank and obtain $600 from the bank by drawing a draft on Hoffer for that amount. The testimony further shows that Hoffer's telegram was shown to Mr. Taylor, and that on the faith of that telegram the bank paid `$600 for the draft. We consider the telegram an unconditional promise in writing to accept the draft before it was drawn and therefore deem it an actual acceptance by Hoffer in favor of the bank, to whom it was shown and who, on the faith thereof, received the draft for value. Elliott v. First State Bank of Fort Stockton, 105 Tex. 547, 152 S.W. 808; Conn v. San Antonio National Bank, Tex. Com.App., 249 S.W. 1045; Texas State Bank v. Press Pub. Co., Tex.Civ.App., 250 S.W. 464; 6 Tex.Jur. 752; 8 Amer.Jur. 518; First National Bank of Tulsa v. Muskogee Pipe Line Co., 40 Okl. 603, 139 P. 1136, L.R.A. 1916B, 1021.
Appellant's contention that the bank, being the payee in the draft, is not a "holder in due course" must be sustained. It follows that want of consideration could be properly pleaded as a defense and, if supported by evidence, sustained. Art. 5935, Sec. 58, provides: "In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable * * *."
Art. 5933, Sec. 28, provides: "Absence or failure of consideration is matter of defense as against any person not a holder in due course * * *."
Article 574 () provided in part: "The defendant in any suit upon a written instrument may plead want or failure, or partial failure of consideration, where such written instrument shall remain in the possession of the original payee * * *."
In J. I. Case Threshing Machine Co. v. Howth, 116 Tex. 434, 437, 293 S.W. 800, the Supreme Court in an opinion by Judge Greenwood said:
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