Lange v. Binz

• Decision Date: 17 February 1926
• Docket Number: (No. 7504.)
• Citation: Lange v. Binz, 281 S.W. 626, 9 Ann. Cas. 755 (Tex. App. 1926)
• Parties: LANGE v. BINZ.
• Court: Texas Court of Appeals

281 S.W. 626

LANGE v. BINZ.

(No. 7504.)

Court of Civil Appeals of Texas. San Antonio.

February 17, 1926.

Rehearing Denied March 17, 1926.

Appeal from District Court, Bexar County; Robert W. B. Terrell, Judge.

Suit by Mary Anna Binz against Frank Lange and others. From a judgment for the plaintiff, named defendant appeals. Affirmed.

Denman, Franklin & Denman and E. H. Lange, all of San Antonio, for appellant.

R. L. Edwards and Haltom & Haltom, all of San Antonio, for appellee.

FLY, C. J.

This suit was instituted by appellee against the San Antonio Milling Company, a private corporation, and B. J. Lange and Frank Lange, on two promissory notes signed by all the parties, dated, respectively, January 2, 1913, and July 1, 1918, the first named in the sum of $2,852.88 and the second in the sum of $3,855.70. The first note was due 5 years after its date, and the second 2 years after its date. It was alleged that the first note was indorsed, "This note is extended for two years by agreement of both parties from January 2, 1923"; that payment of the second note was extended for two years to July 1, 1924. The cause was heard by the court without a jury, and judgment rendered in favor of appellee against all the parties for $7,645.54.

The case comes before this court without a statement of facts, on the findings of fact of the trial judge, which must necessarily be the conclusions of fact of this court. The court found that the two promissory notes were executed jointly by the San Antonio Milling Company, B. J. Lange, and Frank Lange; the one dated January 2, 1913, being executed to Henry N. Binz, and the one of date July 1, 1918, to Mrs. Mary Anna Binz. The interest was regularly paid on the notes; the first for $2,852.88, becoming due on January 2, 1918, the second for $3,855.70, due on July 1, 1920. On the back of the first note was an agreement to extend payment as follows:

  "This note is extended for two years by
                agreement of both parties from date of Jan
                2d, 1921.          [Signed] S. A. Milling Co
                                           "By B. J. Lange."
                

There was another extension on the same note of two years from January 2, 1923. On the second there was written: "This note extended for two years longer after expiration." That was signed, as were the other extensions. On July 23, 1920, before making the extensions, Frank Lange had sold his one-half capital stock of the Lange Soap Company to his brother B. J. Lange; a part of the consideration being that B. J. Lange would pay the debts of the two brothers, among them the two notes in question. Appellee had no knowledge of the agreement between the brothers, or that Frank Lange had sold his interest in the soap company. B. J. Lange and the soap company became insolvent in the spring of 1924. The court further found:

"At the times of the execution of said notes and writing of the entries on back thereof, showing payments of interest, and at the times said memoranda of extensions of times of payment were written on the backs of the notes, the S. A. Milling Company was a corporation, duly incorporated under the laws of Texas, its stock being owned, one-half by B. J. Lange, and one-half by Frank Lange. At all such times F. Lange was president and B. J. Lange secretary of said corporation.

"The writings on the backs of the notes with reference to extending times of payments were made under the following circumstances: The note of date January 2, 1913, was about to become barred by the statute of limitation. The plaintiff, knowing this fact, went with her daughter, Mrs. Lizzie Ackerman, and her son-in-law, J. A. Ackerman, to the soap factory conducted under the name of Lange Soap Company, when Mr. Ackerman saw Mr. Frank Lange and informed him that Mrs. Binz, plaintiff, who was waiting in an automobile, wished to see him, and, upon Frank Lange's meeting Mrs. Binz, she told him she wanted a new note, and Frank Lange stated that B. J. Lange would fix it up all right. Mr. B. J. Lange came out to the automobile, spoke to Mrs. Binz, and was told that Mrs. Binz wanted a new note, Frank Lange being present, and B. J. Lange told Mrs. Binz it would be sufficient to write it on the back of the note. Mrs. Binz handed the note to B. J. Lange, who went inside to the office (Frank Lange remaining at the car) and there wrote on the back of the note the following: `This note is extended for two years by agreement of both parties from date of Jan. 2d, 1921. S. A. Milling Co., by B. J. Lange' — and then returned to the automobile and in the presence of Frank Lange handed the note to Mrs. Binz with the statement, `Now it is all right.' Frank Lange did not have the note in his hand, and never knew what extension memoranda was put on the back of the note. The plaintiff and her daughter and her son-in-law each read the `extension,' and knew Frank Lange had not signed his name to the same; but all then believed the extension as written protected Mrs. Binz against limitation as to all of the makers of the note. If she had not believed the extension of the note as written would be binding upon all signers of the note, she would not have accepted it. Frank Lange did not intend that the extension as written should apply to him or in any way bind him. He knew that Mrs. Binz thought it was binding upon him.

"The second extension on the back of this note was written by B. J. Lange and delivered to Mrs. Binz in the absence of F. Lange.

"The second note of date July 1, 1918, had the extension written on its back in these words: `This note extended for two years longer after expiration. S. A. Milling Co., by B. J. Lange.' This was written by B. J. Lange and delivered to Mrs. Binz, the plaintiff, with the representations of B. J. Lange made in the presence of Frank Lange under the same circumstances, purposes, and intention as was the first note, except as to time.

"The plaintiff knew that Frank Lange did not sign the extensions, but did not know that Frank Lange would claim he was not bound thereby until a short time before these suits were filed.

"The plaintiff is the owner of the notes sued upon. There was no confidential or fiduciary relationship between the plaintiff and B. J. Lange and F. Lange, or either of them, except an acquaintance of many years, and the fact that she thought them to be honest."

Under the facts, the district court held that Frank Lange was estopped from pleading limitation on the two notes, and estoppel as to Frank Lange is the sole question presented by the record.

The facts show that appellee knew nothing as to the transfer of the soap property by Frank Lange to B. J. Lange, and knew nothing of the assumption by the latter of payment of her two notes. Frank Lange knew that she was ignorant of the arrangement between the brothers, and knew that appellee believed him to be bound to her for the debts when she approached him and asked for a new note. At that time Frank Lange, in spite of any agreements between him and his brother, was undoubtedly bound to appellee on the two notes as a principal. Appellee, when told by Frank Lange that B. J. Lange would fix it up all right, believed, as he intended she should believe, that the extension proposed by B. J. Lange would bind the same parties to the same extent as the notes themselves had done. She knew that B. J. Lange had signed the note for the milling company and for himself, and believed that he could and would fix the extension so as to bind the same parties. She knew that the "S. A. Milling Co., by B. J. Lange" alone was signed to the extensions, but believed the extensions were "all right," as both the brothers had told her they would be. She would not have accepted the extensions if she had not believed all the parties were bound, and Frank Lange "knew that Mrs. Binz thought it was binding upon him." Yet, knowing this, he opened not his mouth, but allowed her to accept the extensions, believing that he was bound. In so doing he was guilty of fraud as fully as though he had told appellee that he was bound on the notes although his name was not signed to the extensions. If there was any mistake as to law or fact, it was made by appellee and not by the brothers. They knew what the effect of the extensions had, at least upon the liability of Frank A. Lange, and there seems to have been a deliberate attempt upon the part of B. J. Lange to exempt himself from liability by signing the name of the corporation alone to the extensions. There was and is no escape from the facts, and that proposition is in effect admitted by appellant when...