King v. Wise

• Decision Date: 20 April 1926
• Docket Number: (No. 741-4333.)
• Citation: 282 S.W. 570
• Parties: KING v. WISE.
• Court: Texas Supreme Court

282 S.W. 570

KING v. WISE.

(No. 741-4333.)

Commission of Appeals of Texas, Section A.

April 20, 1926.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Action by J. A. Wise against B. S. King and another. Judgment for plaintiff against defendant Boyd and for defendant King in district court was reversed and rendered in the Court of Civil Appeals (267 S. W. 543) and defendant King brings error. Judgment of Court of Civil Appeals reversed, and that of district court affirmed in part, and reversed and remanded in part.

Bonner & Storey, of Vernon, and Turner & Dooley, of Amarillo, for plaintiff in error.

Yarbrough & Tipton, of Electra, Cook, Cook & Cole, of Vernon, and Weeks, Morrow & Francis, of Wichita Falls, for defendant in error.

NICKELS, J.

Wise filed suit in the district court of Wilbarger county against Rex Boyd and B. S. King (as makers) upon a note (negotiable in form) of date November 1, 1921, and payable to I. G. Showers or order August 1, 1922. Trial resulted in an instructed verdict (and a judgment) in favor of Wise against Boyd for the amount of the note and attorneys' fees and in favor of King against Wise. Upon appeal prosecuted by Wise the honorable Court of Civil Appeals reversed the judgment of the district court and rendered judgment against King. 267 S. W. 543. Except as the statement of the case as there made is affected by additional recitals made hereinbelow, it is correct, and for that reason we do not undertake a restatement here.

We are in agreement with the honorable Court of Civil Appeals in respect to its ruling upon the question of the authority of Wise to maintain the suit, as, also, upon the proposition that the evidence is such as to require jury findings if the record exhibits a permissible legal or equitable defense asserted by King. And such a defense, in our opinion, is advanced—this in virtue of things to be mentioned.

The signature of a person, placed upon a note after its completion and delivery as between the original parties, in order to be effective, must have the support of a new and independent consideration (Good v. Martin, 95 U. S. 90, 24 L. Ed. 341; Jones v. Ritter, 32 Tex. 717; Simmang v. Farnsworth [Tex. Civ. App.] 24 S. W. 541; Baker v. Wahrmund, 23 S. W. 1023, 5 Tex. Civ. App. 268; People's State Bank v. Fleming-Morton Co. [Tex. Civ. App.] 160 S. W. 648, 650), except, of course, where the signature is for the accommodation of the payee and the paper has been further negotiated. Here it is undisputed that King signed the note at least one day after Boyd had signed it. King pleaded and testified, and Boyd testified, that the cattle trade out of which Boyd's note grew was fully consummated, and all the consideration had passed between Boyd (the original maker) and Showers (the payee) long before King signed. If that testimony is true, as a matter of law King was not bound on the original note, for it never left the hands of Showers. Id., Joyce, Defenses to Commercial Paper (2d Ed.) § 54. The testimony of Showers and his wife contradicts King and Boyd and makes an issue of fact, and whether that issue is a material one depends upon what happened in respect to the "renewal note," of date November 1, 1921, sued upon by Wise.

According to Boyd's testimony, he had made various payments on the original note upon the agreement of Showers to "carry" and extend time of payment of the balance, and, at numerous times, Showers assured him that he would extend time of payment if he (Boyd) would pay the interest; and this was paid. Boyd testified, also, that in the inception of the matter Showers had asked him to "get another name" on the note, and he had refused to do so, and that when (some 15 days later) King had told him about having signed the note at Showers' request he (Boyd) remonstrated and told King that he ought not to have signed. There was no further communication between Boyd and King (at least until long after the "renewal"), nor was there any communication between Boyd and Showers in reference to having King sign a renewal note. There was no communication between King and Showers after King had signed the original note, except that, by letter, Showers notified King that the note was at the Farmers' State Bank. It is true that King testified to having written Showers some letters, but Showers denied their receipt. And so far as the record goes, what actually happened in connection with the "renewal" is this: The Farmers' State Bank notified Boyd that it held the original note for collection, and Boyd thereupon (and after having talked with Showers) went to the bank and "signed the renewal note." King was not present. Some time thereafter (the date not being shown) King went to the bank and "talked with Mr. Frank Massie, or one of the boys at the bank, about the renewal note" and signed it. The subject-matter of the "talk" which Boyd had with Showers, or of that which King had with Massie "or one of the boys," is not shown except as it may be indicated in what has already been said. King, in his pleading and testimony, asserted, in substance, that he signed the "renewal note" purely as "an accommodation" party, without any change of intent and purpose from that characterizing his signature of the original note.

Because King was not bound on the original note (if his testimony and that of Boyd be true), a new consideration was essential to his liability on the second one unless it had come into the hands of a holder for value. That consideration, of course, could have been furnished in a binding agreement by Showers to renew upon condition that King would sign but the proof is insufficient to show that agreement with a conclusive effect. We do not have a situation here analogous to that disclosed in Bonner Oil Co. v. Gaines, 191 S. W. 552, 108 Tex. 232, Ann. Cas. 1918C, 574, or in People's State Bank v. Fleming-Morton Co., supra (cited by the Court of Civil Appeals), or in other like cases. For in those instances the notes which were extended, or renewed, etc., were originally obligatory upon the accommodation parties; e. g., the original note signed by Gaines (in the controversy involved in Bonner Oil Co. v. Gaines, supra), was given and accepted for, and in consideration of, the extension of a pre-existing debt, whose payment the creditor then had a right to enforce. The company, in that instance, yielded its immediate right to sue, etc., in consideration of the signatures of the debtor and of Gaines; hence, the question of renewal of that note was merely one of the renewal of Gaines' own existent obligation. In the event the testimony of King and of Boyd is untrue, or shall be disbelieved by the jury, and Showers' version of the matter be true, or be so taken, then the controversy will have aspects making it comparable (unless affected by the other matter to be mentioned hereinafter or by new pleading or evidence) to those before the courts in the cases cited.

There is another view of the case made which leads to the same result. King alleged and testified that he signed each of the notes merely "as an accommodation" party. He does not, either in pleading or proof, indicate the party accommodated with that degree of certainty necessary to a determination, as a matter of law, whether it was Boyd or Showers. That Boyd never requested King to sign either note is undisputed. That Boyd, upon his first knowledge of King's signature, remonstrated is likewise established, as is the...