Mitcham v. London, 8525.
| Decision Date | 03 November 1937 |
| Docket Number | No. 8525.,8525. |
| Citation | 110 S.W.2d 140 |
| Parties | MITCHAM v. LONDON. |
| Court | Texas Court of Appeals |
Appeal from District Court, Brown County; E. J. Miller, Judge.
Suit by G. P. Mitcham against Jack London. From an adverse judgment, plaintiff appeals.
Reversed and rendered.
McCartney, McCartney & Johnson, of Brownwood, for appellant.
J. C. Darroch and E. M. Davis, both of Brownwood, for appellee.
Appeal by plaintiff below from an adverse judgment upon a special issue verdict in a suit upon a promissory note, and to foreclose a lien upon $2,500 of stock of McInnis Funeral Home.
Defendant plead three defenses:
(1) Non est factum.
(2) The note (if he signed it) was wholly without consideration in that it was signed under the following circumstances (substantially stated): In order to induce defendant to continue as an embalmer in the business of the corporation and to assist in building up the business, plaintiff agreed to give him $2,500 of the stock of the corporation to be paid for out of the dividends of the stock and salary bonuses thereafter accruing. If he signed the note, it was only as a memorandum of the transaction. He never received any stock from plaintiff.
(3) A plea characterized by appellee as one of conditional delivery only of the note and fraud, alleging substantially the transaction detailed in plea 2 above, and additionally that it was agreed that the note would never be held as a personal obligation against defendant, but only as a memorandum of the transaction to show the amount of credits necessary to pay out the stock. Fraud was alleged in that plaintiff never intended to keep his promise as to the effect of the note, but always intended to hold it as a personal obligation, despite his agreement and representation to the contrary.
Four special issues were submitted to the jury; the answers to the first three of which eliminated the first two of the above defenses. These found: (1) Defendant signed the note in suit. (2) He also signed a receipt for the stock certificate on the stub of the stock book. (3) The stock certificate "was turned over to the plaintiff by the defendant, or by the consent of the defendant as security for the note" in suit.
The fourth issue, relating to the third above defense, and answered "Yes," read: "Do you find and believe from a preponderance of the evidence that at the time defendant signed and delivered said note to the plaintiff, if he did sign and deliver same, that it was agreed and understood by and between the plaintiff and the defendant that the same would be held by the plaintiff merely as a memorandum of the amount to be held against stock and to credit dividends and bonuses upon, and would not be held as a personal obligation of the defendant?"
The controlling issue presented by the appeal is whether the third pleaded defense constituted a defense in law to the note; it being urged that the facts so alleged and testified to amounted only to an attempt to vary the terms of the note by parol, which the law does not permit. This issue was presented in the trial court by (1) special exception to the pleading; (2) objection to and motion to strike out the evidence; (3) objection to the issue; and (4) motion for judgment "upon said issues and the evidence introduced, and notwithstanding special issue number four, and the answer of the jury thereto."
The general rule, now well established in this as well as other jurisdictions, is that a parol agreement to the effect that a promissory note shall never be binding or take effect as a personal obligation, or that its payment shall be other than in money, is not binding, since its effect is to vary the terms of the instrument. See Chalk v. Daggett (Tex.Com.App.) 257 S.W. 228; Lawther Grain Co. v. Winniford (Tex.Com.App.) 249 S.W. 195; 6 Tex.Jur., pp. 956-960, §§ 279 and 280.
Appellee strongly relies upon section 16 of the Uniform Negotiable Instrument Law (V.S.R.C.S. art. 5932, § 16), which provides that: "Delivery may be shown [as between the original parties] to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument." Appellee contends that under the pleading, evidence, and jury finding, there was only a conditional delivery of the note, and/or a delivery for a special purpose, namely, as a memorandum only to show the amount of credits required to take up the stock.
The following comment on section 16 of the law is...
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...the payee to a maker or surety that he would not be liable on the note. See Lanius v. Shuler, 77 Tex. 24, 13 S.W. 614 (1890); Mitcham v. London, 110 S.W.2d 140 (Tex.Civ.App. Austin 1937, no writ); Dean v. Allied Oil Co., 261 S.W.2d 900 (Tex.Civ.App. Waco 1953, writ dism'd); Jones v. Hubbard......
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...foreclose the question of law discussed against the contention of the dealer in the case at bar. In the later case of Mitcham v. London, Tex.Civ.App., 110 S.W.2d 140, 142, the decision in Chalk v. Daggett, supra, is described as being 'a very clear statement of the rule and its application,......
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...according to the tenor of the instrument. Dean et al. v. Allied Oil Co., Tex.Civ.App., 261 S.W.2d 900, err. dism.; Mitcham v. London, Tex.Civ.App., 110 S.W.2d 140; Cooper Co. v. Smith, Tex.Civ.App., 126 S.W.2d 518; Crumpler v. Humphries, Tex.Civ.App., 218 S.W.2d 215; Dewey v. C. I. T. Corp.......
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Coleman v. Ammons, 14483
...fraud and deceit, where the promise was part of a verbal contract which was unenforceable under the parol evidence rule. Mitcham v. London, Tex.Civ.App., 110 S.W.2d 140 (held not to constitute fraud such as to be a defense to a note); Distributors Inv. Co. v. Patton, 130 Tex. 449, 110 S.W.2......