Hull v. First Guaranty State Bank

• Decision Date: 06 December 1917
• Docket Number: (No. 1860.)
• Citation: 199 S.W. 1148
• Parties: HULL et al. v. FIRST GUARANTY STATE BANK OF OVERTON.
• Court: Texas Court of Appeals

199 S.W. 1148

HULL et al. v. FIRST GUARANTY STATE BANK OF OVERTON.

(No. 1860.)

Court of Civil Appeals of Texas. Texarkana.

December 6, 1917.

Rehearing Denied January 10, 1918.

Appeal from District Court, Rusk County; Daniel Walker, Judge.

Suit by the First Guaranty State Bank of Overton against B. H. Hull and others. Judgment for plaintiff against certain defendants, and for the defendant Hull against the Western Cotton Oil & Gin Company, and partners in such company, and for the receivers of the International & Great Northern Railway Company against Hull for freight charges. The Western Cotton Oil & Gin Company and members thereof appeal. Affirmed in part; reversed in part.

T. J. Arnold, of Houston, Futch & Tipps and Strong & Stone, all of Henderson, N. B. Morris and N. B. Morris, Jr., both of Palestine, and Scott W. Key, of Haskell, for appellants. Chas. L. Brachfield and J. W. McDavid, both of Henderson, for appellee.

HODGES, J.

In December, 1913, B. H. Hull, one of the parties to this suit, drew two drafts against the Western Cotton Oil & Gin Company at Haskell, Tex., in favor of the First Guaranty State Bank at Overton, aggregating $655.25, which the drawees refused to pay. In March, 1914, the bank instituted a suit in the county court of Rusk county against B. H. Hull and the Western Cotton Oil & Gin Company to recover the amount due upon the drafts. In its petition the bank alleged that the Western Cotton Oil & Gin Company was a corporation. The case was called for trial, and a judgment rendered against the defendants. In that suit Hull alone answered. It was afterwards discovered, however, that the Western Cotton Oil & Gin Company was not a corporation, but a partnership. Some time after the expiration of the term of court at which that judgment was rendered a motion was made by Hull to set it aside. Acting upon that motion the case was reopened and the suit was by agreement of Hull and the plaintiff therein dismissed. Thereafter, on November 23, 1915, the bank instituted this suit against Hull, the Western Cotton Oil & Gin Company, and the members composing it, consisting of J. C. Duke, D. C. Cogdell, J. H. Chancellor, and W. M. Butterworth. The Texas & Pacific Railway Company, the Witchita Valley Railway Company, and Cecil A. Lyon and James B. Baker, receivers of the International & Great Northern Railway Company, were also made parties defendant. Against Hull, the Western Cotton Oil & Gin Company, and the members composing the partnership, the plaintiff sought a recovery on the drafts. The railway companies and the receivers above mentioned were made parties defendant upon the ground that they had converted two carloads of cotton seed for the payment of which the drafts had been drawn and upon which a lien was claimed. In a trial before the court without a jury judgment was rendered in favor of the bank for the full amount of the drafts against Hull, the Western Cotton Oil & Gin Company, and the individuals composing the partnership, and in favor of Hull over against the partnership and partners for the amount for which he was held liable. The railway companies and the receivers were discharged from any liability. Upon proper pleadings, which will be referred to later, the receivers of the International & Great Northern Railway Company recovered a judgment against Hull for the sum of $148.27 as the amount due for freight and demurrage charges on the two carloads of cotton seed above referred to. Only the Western Cotton Oil & Gin Company and the individuals composing the partnership have appealed.

The findings of fact filed by the trial court are substantially as follows: During the latter part of the year 1913 one L. J. Sparkman was the agent in Rusk county of the Western Cotton Oil & Gin Company. Sparkman had authority to buy for his company cotton seed, and to pay therefor in money or by checks and drafts. Acting within the scope of his authority, he purchased for his principal from B. H. Hull at Overton, in Rusk county, two carloads of cotton seed, after inspection, agreeing to take the seed for the oil mill company at the shipper's weights, and authorized Hull to draw drafts on the oil mill company for the agreed price of the seed, together with $2.50 additional for loading charges. Sparkman represented to the Guaranty State Bank that the drafts drawn by Hull on the oil mill company were good and would be paid when presented. The bank, acting upon the representations made by Sparkman, paid Hull the amount in cash called for by the drafts. It would not have done this but for the representations made to it by Sparkman. Those representations were honestly made by Sparkman, with the belief that his principals would comply with them. But the latter intended to deduct from the amount of the drafts the sum of $118, an indebtedness which they claimed was due them from Hull. The two cars of seed were transported to Haskell, but the Western Cotton Oil & Gin Company refused to accept them and refused to pay the drafts without a deduction of the $118. The railway company thereafter advertised and sold the seed, realizing $148 less than the amount of the freight, demurrage, and other expenses.

Among other defenses pleaded by the Western Cotton Oil & Gin Company was that of privilege of being sued in the county of their residence, and the refusal of the court to sustain that plea is assigned as error. It is undisputed that Hull was the only party to the drafts sued on which resided in Rusk county, where the suit was instituted. Subdivision 4 of article 1830, as amended by the Acts of 1913, provides:

"Where there are two or more defendants residing in different counties, in which case a suit may be brought in any county where any one of the defendants resides; provided, that the transfer or assignment of note or chose of action shall not give any subsequent holder the right to institute suit on such note or chose of action in any other county or justice precinct than the county or justice precinct in which such suit could have been prosecuted if no assignment or transfer had been made."

If the liability of Hull was that of an assignor of a pre-existing debt, then clearly the suit could not have been maintained in Rusk county against the appellants merely because it...