Lee v. First Nat. Bank of Purdon, (No. 982.)

• Court: Court of Appeals of Texas
• Writing for the Court: O'Quinn
• Citation: 254 S.W. 394
• Decision Date: 31 October 1923
• Docket Number: (No. 982.)
• Parties: LEE v. FIRST NAT. BANK OF PURDON.

Page 394

254 S.W. 394 LEE
v.
FIRST NAT. BANK OF PURDON. (No. 982.) Court of Civil Appeals of Texas. Beaumont. October 31, 1923.

Appeal from District Court, Navarro County; Hawkins Scarborough, Judge.

Action by the First National Bank of Purdon against John S. Lee and another. Judgment for plaintiff, and defendant Lee appeals. Reversed and remanded.

Callicutt & Johnson, of Corsicana, for appellant.

Richard Mays, of Corsicana, for appellee.

O'QUINN, J.

Appellee, First National Bank of Purdon, sued H. T. Hazlewood and J. S. Lee on a note for the sum of $2,315.50 ($2,000 principal and $315.50 interest to maturity), and also for the sum of $9.57 balance due on another note, and for the foreclosure of a mortgage given by Hazlewood on certain personal property and the entire crop to be grown by Hazlewood upon the farm of J. S. Lee during the year 1920 to secure the payment of said notes. Hazlewood was duly served, but filed no answer. Lee answered, setting up that he was surety for Hazlewood on the notes sued upon, and specially pleaded:

(1) That in November, 1919, he rented to Hazlewood his farm of 335 acres for the year 1920 for one-third of the grain and one-fourth of the cotton to be grown on said farm during said year; that Hazlewood desired defendant Lee to assist him in obtaining money with which to cultivate said rented premises, and that plaintiff bank agreed to loan said Hazlewood the money, and that he, Lee, agreed with plaintiff to release his landlord's lien upon the crop grown upon said premises, except his rent of one-third of the grain and one-fourth of the cotton; that plaintiff agreed to loan said Hazlewood a sufficient amount of money to assist him in

Page 395

cultivating the crops upon said rented premises, and he, Lee agreed to become a surety upon the note of Hazlewood for money with which to make a crop and for no other purpose; and that Hazlewood was to and did secure the note by mortgage upon certain personal property and the crop.

(2) That he, Lee, was unlearned, being able only to sign his name mechanically; that plaintiff and Hazlewood stated to him at the time the note was executed that the money being thus loaned to Hazlewood was for the purpose only of making a crop upon the said rented premises; that plaintiff and Hazlewood stated to him that it would require in the neighborhood of $2,000 to make said crop upon said premises; that later plaintiff and said Hazlewood represented to him that the sum of $100 more was needed to make said crop; and that he then executed as surety another note for said sum; that he received no consideration for the execution of either of said notes; that "there was included in the note for $2,315.50 an old debt due by said Hazlewood to said plaintiff, amounting to about the sum of $1,400 or more, and which was falsely and fraudulently included in said note by said plaintiff and said Hazlewood, without the knowledge of this defendant, and for the purpose of fraudulently securing the signature of this defendant to said note, and this defendant would not, under any consideration, have agreed to sign said note, nor would he have signed the same, if he had known that said note was being given for a past-due indebtedness of said Hazlewood, and would not have signed said note nor have agreed to pay plaintiff any sum of money whatsoever, but for the representation that the note given was to be for money being advanced and to be advanced by said bank to said Hazlewood to make said crop. and for no other purpose. * * * Defendant says that he is not bound, at least on that portion of said note described in section 1 of said petition, which was given for an old debt of said Hazlewood."

(3) That said Hazlewood, with the consent of plaintiff, sold and disposed of two mules covered by said mortgage of the value of $400, to which he, Lee, did not consent, and of which he had no knowledge, and that his liability on said note was pro tanto discharged.

(4) That plaintiff received of the crop of cotton and cotton seed and the proceeds of the cotton and cotton seed grown upon said rented farm more than enough to have paid off and fully discharged the said notes sued upon, and that the proceeds of said mortgaged crop were paid into plaintiff bank and deposited with said bank in a sum more than enough to fully pay off and discharge said notes, and pleaded complete payment of same.

(5) That plaintiff, after coming into the possession of the proceeds of said mortgaged crop, did not credit same on said notes, but permitted Hazlewood to receive same and to draw and check out of said bank said money and spend same for purposes other than the payment of said notes, and had thereby released him from liability as surety on said notes.

(6) That he demanded of plaintiff bank, both verbally and in writing, during the fall of 1920, and while said mortgaged crops were being gathered, that plaintiff proceed to foreclose its mortgage, and that plaintiff failed and refused to do so, and allowed same to be gathered, sold, and disposed of by said Hazlewood, and that plaintiff could have collected out of the crops mortgaged and the personal property mortgaged sufficient money to have paid off and discharged all of said notes, but failed and refused to do so, after demand in writing by defendant to do so.

(7) That plaintiff and Hazlewood conspired together to compel him as surety to pay said notes, and that plaintiff allowed Hazlewood to dispose of the mortgaged property, and to appropriate and use the proceeds thereof.

Appellee presented exceptions to sections 4, 5, 6, and 7 (which comprised all the special answers above noted) of the answer as being not only insufficient in law, but showed no lawful defense to plaintiff's suit, which were sustained by the court, and said special answers and defenses stricken as...