National Bank of Commerce v. Kenney

• Decision Date: 01 December 1904
• Parties: NATIONAL BANK OF COMMERCE v. KENNEY et al.
• Court: Texas Supreme Court

83 S.W. 368

NATIONAL BANK OF COMMERCE v. KENNEY et al.

Supreme Court of Texas.

December 1, 1904.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action by the National Bank of Commerce against J. H. Kenney and others. From a judgment in favor of defendants, affirmed by the Court of Civil Appeals (80 S. W. 555), plaintiff brings error. Reversed.

Elijah Robinson and H. E. Hoover, for plaintiff in error. Tempel & Hardy, C. H. Kohler, and I. N. Watson, for defendants in error.

GAINES, C. J.

This suit was brought by the plaintiff in error against J. H. Kenney, P. W. Kenney, and J. W. Lambert as makers of a promissory note, and to enforce a chattel mortgage upon a stock of cattle, which was executed by J. H. Kenney to secure the note. We speak of P. W. Kenney and J. W. Lambert as makers, though they merely indorsed the note before delivery. As such indorsers they are makers under our law. Latham v. Flour Mills, 68 Tex. 130, 3 S. W. 462, and cases cited. The Third National Bank of Springfield, Massachusetts, was also made a party defendant. The defendants J. H. Kenney, P. W. Kenney, and Lambert pleaded their discharge in bankruptcy. The pleadings need not be further stated in this connection. In this connection it need only be said that they were sufficient to present the issues which were developed by the evidence upon the trial of the cause.

Stripped of irrelevant matter, the facts disclosed by the evidence are as follows: In November, 1899, J. H. Kenney, being indebted to one Moody, who held a mortgage for his debt upon a stock of cattle in Hemphill county, Tex., applied to Ladd, Penny & Swazey, a firm who were doing business in Kansas City, Mo., to pay the debt. This the latter agreed to do, he at the same time agreeing, in consideration of their assumption, to execute to them a note for the amount, together with a mortgage on the same cattle to secure its payment; all of which was accordingly done. It was upon this note and mortgage that this suit was brought. Ladd, Penny & Swazey paid the Moody debt, though it is probable that this was not immediately done. The note was transferred by delivery, but without indorsement, by the payees to the plaintiff, in order to secure an indebtedness then due by them to it. The time of this transfer is a matter about which the testimony is conflicting. On the 8th day of February, 1900, the makers of the first note, at the request of Ladd, Penny & Swazey, executed a second note in renewal of the first. The two notes were for the same amount, in the same form, and in the same words, except that the first was dated November 29, 1899, and the other February 8, 1900, and that the second was payable at the Interstate National Bank, whereas the place of payment in the first was the American National Bank. The effect was to extend the time of payment a little more than two months. This note was secured by J. H. Kenney's mortgage on the same cattle. It passed into the hands of the defendant bank in due course of trade, and without notice of the previous note.

As to the time of the delivery of the first note to the plaintiff, one Patton testified, in effect, that he attended to this business as the representative of the plaintiff, and that it was his impression that the note was placed as collateral with the plaintiff bank about the time of the maturity of a large note due from Ladd, Penny & Swazey to the plaintiff, which it was intended in part to secure. The note to be secured fell due December 11, 1889. He also testified that on February 7th he made a list of the collaterals held for the security of that debt, and that the note was among the number. On the other hand, defendant P. W. Kenney testified that he came to Kansas City on February 8th, and was requested by Ladd, Penny & Swazey to have executed a new note in lieu of the old, together with a like mortgage to secure it, and to take the papers back to Texas for the signatures of his co-makers and for the execution of the new mortgage, and to return them to Kansas City. Upon their receipt Ladd, Penny & Swazey were to return the first note. He also testified that when he was in their office he saw the old note in their possession. The new note was written in Ladd, Penny & Swazey's office, was carried by P. W. Kenney to Texas, and there executed, as also the mortgage as agreed upon, and the papers were immediately forwarded to the payees at Kansas City. The first note was not returned.

The note sued on was made payable at the American National Bank, Kansas City, but it does not show upon its face whether Kansas City, Mo., or Kansas City, Kan., was meant. However, it was admitted in open court upon the trial that there is a bank of that name in Kansas City, Mo., and it does not appear that there was a bank of the same name in Kansas City, Kan. Therefore we think it must be assumed that the note was to be paid in the state of Missouri, and that the contract is to be construed according to the laws of that state. In the presentation of the case in this court it was argued upon both sides upon that assumption.

It is well settled that in the courts of this state, in the absence of pleading and proof to the contrary, the laws of another state are presumed to be the same as the laws of Texas. As to the law of Missouri, the defendants the Kenneys and Lambert pleaded that "by the law of the state of Missouri, where said note is payable, and where said Ladd, Penny & Swazey and plaintiff bank were then and there engaged in business, and where said plaintiff bank acquired possession and control of said note and mortgage, all transfers of notes and mortgages as collateral security for a pre-existing indebtedness leaves such collateral notes in the hands of the transferee, subject to all defenses existing between the parties to such collateral note, and that all the rights, if any, which plaintiff had to said note and mortgage sued upon were acquired under the laws of Missouri, and plaintiff's rights, if any, were and are governed by said laws of Missouri aforesaid, and that plaintiff took said note subject to the rights and defenses of these defendants against said firm of Ladd, Penny & Swazey." In the pleadings of the defendant bank so much of the answer of their codefendants as has been quoted was adopted. The testimony adduced upon the trial in support of this averment is very meagerly given in the statement of facts. Ex-Judge Robinson, who was one of the attorneys for plaintiff, and a practicing lawyer in Kansas City, Mo., was called by the defendants, and testified, in effect, that he only knew the law of commercial paper in the state of Missouri in a general way; that "the courts were always changing," and that "he was not certain about anything"; that "the common law is in force in the state of Missouri as modified by the statute." He also identified a book handed him by counsel as a Missouri report, but what report it was and what it contained the statement of facts does not inform us. Mr. Kohler, one of the defendant's attorneys, also testified that he was familiar with the laws of Missouri on the subject of negotiable paper, and presented the statutory provisions upon the subject which were introduced in evidence. It is also stated in the statement of facts that "the defendant introduced in evidence article 4488, Revised Statutes of Missouri, 1899, and pages 29, 30, and 31, Missouri Supreme Court Report No. 137." Though not necessary to a decision of the case as here presented, we take occasion to say that we are of opinion that we are not at liberty to go outside of the...