Moore v. Orgain

• Decision Date: 13 January 1927
• Docket Number: (No. 1960.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 291 S.W. 583
• Parties: MOORE v. ORGAIN.
• Court: Texas Court of Appeals

291 S.W. 583

MOORE v. ORGAIN.

(No. 1960.)^*

Court of Civil Appeals of Texas. El Paso.

January 13, 1927.

Rehearing Denied February 3, 1927.

Appeal from District Court, El Paso County; Ballard Coldwell, Judge.

Suit by S. W. Moore, individually and as trustee for John G. Hayes and others, against J. C. Orgain. From a judgment for defendant, plaintiff appeals. Affirmed.

Whitaker & Peticolas and Jones, Hardie & Grambling, all of El Paso, for appellant.

Lea, McGrady, Thomason & Edwards, of El Paso, for appellee.

HIGGINS, J.

This suit was brought by S. W. Moore, for himself, and as trustee for John C. Hayes, R. B. Homan, J. Harry Henderson, B. L. Farrar, G. J. Casselberry, T. B. Henderson, John T. Muir, Ed. M. Whitaker, A. L. Hawley, and C. L. Ezell, against J. C. Orgain, one of the stockholders of the Border National Bank, who signed the reorganization agreement at the time the National Border Bank was incorporated. The plaintiff's petition alleges that on January 12, 1924, an agreement in writing was entered into between certain persons called organizers (who are substantially the same as the plaintiffs in the case) with the owners of more than two-thirds of the capital stock of the Border National Bank; that the defendant, Orgain, was the owner of 66 shares and signed said agreement. The agreement provided that the organizers should incorporate a new bank, to be known as the National Border Bank, and subscribe and pay for all of the stock; that all of the assets of the Border National Bank should be transferred to the new bank, which was to be called the National Border Bank, except $400,000 of negotiable paper, which should be retained by the Border National Bank. Each subscriber agreed that he would purchase from the organizers of the National Border Bank one-half as much stock in the new bank as he had in the Border National Bank, and that the $400,000 of assets so retained by the Border National Bank might be used as collateral by the organizers to secure the payment of any obligation they might enter into to obtain the money with which to pay for the capital stock in the National Border Bank. Each subscriber further agreed that if the sum realized from the $400,000 of assets so pledged as collateral should be sufficient to pay off the obligation entered into by the organizers, there should be no obligation against such subscriber who had contracted to purchase stock in the National Border Bank; but should said $400,000 of retained assets not realize the sum of $225,000 (that being the amount borrowed by the organizers to incorporate the National Border Bank), then each subscriber should be obligated to pay such unpaid balance on the amount of the stock contracted to be purchased by him. (Note: This clause in the contract is called the deficit clause.) That the organizers borrowed $225,000 and executed a note for that sum to J. F. Robinson, who indorsed and delivered it to the Commerce Mining & Royalty Company, and there are general allegations that the organizers of the bank also executed a document, pledging said $400,000 as collateral to the Robinson note, and showing that the collateral was returned to the National Border Bank in trust for the Commerce Mining & Royalty Company to be collected for its account. It is alleged that said collaterals were, from time to time, sold and the proceeds applied to the note until it was paid down to about the sum of $91,000. It is alleged that the Commerce Mining & Royalty Company indorsed and delivered the note to C. M. Harvey and on the 6th day of June, 1925, the plaintiff herein and his beneficiaries purchased said note from C. M. Harvey and thereafter gave notice in writing, mailed to each subscriber, and sold the collateral at the courthouse door on the 1st day of September, 1925, for the sum of $3,000 to S. W. Moore, trustee; that on September 1. 1925, there was unpaid on said note the sum of $88,824, which is .395 of the total indebtedness on said note, and therefore Orgain was indebted to the plaintiff in the sum of $1,466.40, being that per cent. of the value of his stock for which the suit was brought.

The original answer of Orgain was under oath. He denied that he executed the contract sued on, and further pleaded that his signature, on which it is sought to bind him, was made by him on a sheet of paper separate and apart from the contract to which it now purports to be attached, and when signed by him was attached to certain papers entirely distinct from the agreement sued on. Plaintiff filed a supplemental petition, and the defendant filed a supplemental answer. In that pleading he alleged that he did read and consider the contents and language of the papers attached to the sheet on which his signature now appears at the time he signed the same, and that the matter which he signed is not the matter to which the sheet of paper bearing his signature is now attached; that the action which subsequently has been followed by defendant with reference to the reorganization of said bank was pursuant to the agreement which he did sign, and not in conformity with the alleged agreement on which he is now sued.

The court submitted but one issue, later quoted, which was answered, "No."

Judgment was rendered for defendant.

The deficit clause is in the fifth paragraph of the contract appearing on the second page and reads:

"Fifth: It is agreed that if the sum realized from said $400,000 of assets shall be sufficient to pay off and discharge the $225,000 of obligations entered into by the organizers, then there shall be no obligation against the subscribers hereto who have contracted to purchase an amount of stock in the new bank equal to 50 per cent. of their stock in the old bank to pay anything further therefor, but the organizers will transfer their stock to them free of further charge; but any subscriber who has contracted to purchase an amount of stock in the new bank greater than 50 per cent. of his stock in the old bank shall remain obligated to pay the balance due thereon, as above indicated; and should said $400,000 of assets not realize the sum of $225,000, then each subscriber hereto shall be obligated to pay such unpaid balance and amount of the stock contracted to be purchased by him." (Italics ours.)

The italicized portion is the deficit clause upon which the suit is based.

The signatures of a number of persons appear upon the second page. The third and fourth pages consist of signatures, Orgain's appearing upon the fourth. He was not one of those designated in the contract as an organizer of the new bank.

Orgain testified that when the contract was presented to him for his signature and was signed by him, it did not contain the deficit clause. The effect of his evidence is that, after he affixed his signature on the fourth page, there was an unauthorized alteration of the contract by the substitution, for the second page, of a page which contained the deficit clause.

The questions presented will be considered in their logical order, rather than in the order appearing in appellant's brief.

The testimony of the witness Price was admissible for the purpose of impeaching the plaintiff's witness Harvey. Johnson v. Brown, 51 Tex. 65; Pitman v. Holmes, 34 Tex. Civ. App. 485, 78 S. W. 961; Railway v. Jackson, 93 Tex. 262, 54 S. W. 1023; Bonner v. Mayfield, 82 Tex. 234, 18 S. W. 305; Railway v. Spann (Tex. Civ. App.) 173 S. W. 600.

Appellant insists it should have been limited to that purpose. If they desired it to be so limited, it was their duty to so request at the time of its admission, or later, by motion or charge. This they did not do. They cannot complain that the trial court was not more vigilant in their behalf than they were for themselves. Shumard v. Johnson, 66 Tex. 72, 17 S. W. 398; Blum Milling Co. v. Moore-Seaver Grain Co. (Tex. Com. App.) 277 S. W. 78; Walker v. Brown, etc., 66 Tex. 556, 1 S. W. 797; Massie v. Hutchison, 110 Tex. 558, 222 S. W. 962.

The alteration pleaded by the defendant is not apparent upon the face of the contract sued upon. The burden of proving the alleged alteration thus rested upon the defendant. Kalteyer v. Mitchell, 102 Tex. 390, 117 S. W. 792, 132 Am. St. Rep. 889; Muckleroy v. Bethany, 27 Tex. 551; Wells v. Moore, 15 Tex. 521; Davis v. Crawford (Tex. Civ. App.) 53 S. W. 384; Kansas, etc., v. Coalson, 22 Tex. Civ. App. 64, 54 S. W. 389.

A sworn plea, which, in effect, admits the signature but sets up a material unauthorized alteration after signing, is not strictly a plea of non est factum. Dewees v. Bluntzer, 70 Tex. 406, 7 S. W. 820; Kansas, etc., v. Coalson, supra.

But one issue was submitted, as follows:

"Question No. 1: Do you find from a preponderance of the evidence that the paper upon which the defendant, Orgain, signed his name was attached to or a part of the contract to which it is now attached, at the time he signed his name? Answer yes or no."

In connection with the issue, the court simply charged that the term "preponderance of the evidence" meant the greater weight of credible evidence.

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