Mathonican v. Scott

• Decision Date: 17 December 1894
• Citation: 28 S.W. 1063
• Parties: MATHONICAN v. SCOTT et al.
• Court: Texas Supreme Court

28 S.W. 1063

MATHONICAN v. SCOTT et al.

Supreme Court of Texas.

December 17, 1894.

Certified questions from court of civil appeals of Fifth supreme judicial district.

Action by A. J. Mathonican against Scott & Baldwin for the amount of a negotiated loan. From a judgment for defendants, plaintiff appeals. Certain questions raised were by the court of civil appeals certified to the supreme court.

B. F. Looney, for appellant. Perkins, Gilbert & Perkins, for appellees.

BROWN, J.

The court of civil appeals for the Fifth supreme judicial district has certified to this court the following statement and questions in the above cause:

"Scott & Baldwin, a firm composed of D. H. Scott and B. J. Baldwin, Jr., were engaged in business at Paris, Texas (Lamar county), and each of the members resided in that county. The firm did a real-estate, abstract, and loan business. They bought and sold notes and other securities and negotiated loans. While their business was in Paris, Lamar county, Texas, they had agents in other counties; among them an agent in Hunt county, who was authorized to solicit and secure business for them in the way of applications for loans, the negotiation and sale of notes and other securities, and to collect and pay over money for them. G. E. Scott was such agent of Scott & Baldwin in Hunt county, and resided there. He had authority to solicit and obtain applications for loans, the negotiation of notes and other securities, and to collect and pay over money for Scott & Baldwin. All such applications were acted upon by Scott & Baldwin at their office in Paris, and there accepted or refused. A. J. Mathonican, who resided in Hunt county, being desirous of selling a vendor's lien note held and owned by him, made a written application for that purpose to Scott & Baldwin, through their agent, G. E. Scott. G. E. Scott took the application and note in person to Scott & Baldwin at Paris, Texas. They accepted the proposition made in the application, and G. E. Scott telegraphed Mathonican to that effect. The money was paid over to G. E. Scott by Scott & Baldwin, to be by him paid to Mathonican, — that is, he had money of theirs in his hands, which they directed to be so paid. G. E. Scott delivered the note and application to Scott & Baldwin, which they retain. G. E. Scott, it is alleged, failed to pay over the money to Mathonican, converting it to his own use. Mathonican brought this suit in Hunt county against G. E. Scott and Scott & Baldwin, setting out the facts, and prayed for a judgment for the money or the recovery of his note. Scott & Baldwin pleaded in abatement their privilege to be sued in Lamar county, the county of their residence, and the court below sustained the plea.

"Question 1. Under the facts above stated, was G. E. Scott personally liable, so as to give jurisdiction to the court in Hunt county over Scott & Baldwin, under section 4, art. 1198, Sayles' Rev. Civ. St.?

"Question 2. Were the acts of G. E. Scott as agent of such a character as to give jurisdiction over his principals, Scott & Baldwin, to the county court of Hunt county, under section 8, art. 1198, Sayles' Rev. Civ. St.?"¹

We will reply to the second question first. The facts stated do not show a crime, — that is, embezzlement, — for it may be that, as to Scott & Baldwin, G. E. Scott still holds the money as their agent; or, if appropriated to his own use, it may have been done under circumstances which would not constitute a criminal act. If, however, it be admitted that he embezzled the money in his possession, it was not the money of Mathonican, and he could not maintain a suit against G. E. Scott for that act as a crime.

We understand the first question to embrace two propositions: First. Has Mathonican a right of action against G. E. Scott for the money due him from Scott & Baldwin on the sale of the note? Second. If so, can Mathonican join G. E. Scott and Scott & Baldwin as defendants in a suit for the recovery of the money? If they can be joined, it follows, as a matter of course, that they may be sued in Hunt county, the residence of G. E. Scott. Sayles' Rev. Civ. St. art. 1198, § 4. By the purchase of the note from Mathonican, Scott & Baldwin became indebted to him in the price agreed to be paid. When G. E. Scott undertook with Scott & Baldwin to pay the money in his hands to Mathonican, he, G. E. Scott, became liable to Mathonican for that debt; his undertaking inured to the benefit of Mathonican. It is the settled rule of this court and of most of the courts of the American states that when one, for a valuable consideration, agrees with another to pay the debt of that other person to a third person, such agreement inures to the benefit of the third party, who may maintain an action thereon. Zacharie v. Bryan, 2 Tex. 274; Monroe v. Buchanan, 27 Tex. 248; Telegraph Co. v. Adams, 75 Tex. 531, 12 S. W. 857; Vanmeter v. Vanmeters, 3 Grat. 148; Miller v. Billingsley, 41 Ind. 489; Putman v. Field, 103 Mass. 556; Donkersley v. Levy, 38 Mich. 54; Delaware & H. Canal Co. v. Westchester Co. Bank, 4 Denio, 97; Crane v. Onderdonk, 67 Barb. 47; Schemerhorn v. Vanderheyden, 1 Johns. 139; Arnold v. Lyman, 17 Mass. 400; Burr v. Beers, 24 N. Y. 178; Robbins v. Ayres, 10 Mo. 538. In Zacharie v. Bryan, cited above, a purchasing agent for the republic of Texas had given to plaintiff a draft upon Bryan as agent of that government, which he accepted as such agent. Afterwards Bryan settled his accounts with the government, and by resolution of the congress of the republic drafts were issued to defendant to pay this as well as other claims, which Bryan sold, or otherwise disposed of. Upon allegation of the facts in the petition, demurrer was filed, and sustained by the court. The supreme court held that Bryan was not liable by reason of his acceptance of the draft as agent, but that, when he disposed of them to his own use, he became liable for the debt which should have been paid out of the proceeds as for money received to...