National Guarantee Loan & Trust Co. v. Thomas.

• Decision Date: 13 March 1902
• Citation: 67 S.W. 454
• Parties: NATIONAL GUARANTEE LOAN & TRUST CO. v. THOMAS.
• Court: Texas Court of Appeals

67 S.W. 454

NATIONAL GUARANTEE LOAN & TRUST CO. v. THOMAS.

Court of Civil Appeals of Texas.

March 13, 1902.

Appeal from Dewitt county court; C. A. Sumner, Judge.

Action by J. A. Thomas against the National Guarantee Loan & Trust Company. From a judgment for plaintiff, defendant appeals. Reversed.

Hill, Dabney & Carlton and Lackey & Lewright, for appellant. Leonard & Wallace, for appellee.

PLEASANTS, J.

Appellee brought this suit to recover of appellant damages for the alleged breach of a contract for a loan of money by appellant to appellee. The suit originated in the justice court, the amount of damages claimed by plaintiff being $53.80, and plaintiff's cause of action being thus stated in the citation issued from the justice's court: "Suit for the sum of $53.80, due as per itemized account filed in this cause, which sum plaintiff charges that defendant through its agents, fraudulently and deceitfully caused plaintiff to expend. Defendant promised plaintiff that if he [plaintiff] would take certain shares of its stock, and procure an abstract of the title to his real estate in Yoakum, and execute certain deeds of trust on same, and comply with certain other formalities specified, that then defendant would lend him [plaintiff] the sum of $500. That plaintiff complied with his part of the agreement, and expended the sum set out in said account filed herewith, but defendant refuses to lend him the sum of $500 agreed on. Plaintiff offers to surrender to defendant, and tenders into court, the shares of defendant's stock issued to him." The account filed by plaintiff in the justice court is as follows:

                The National Guarantee Loan and Trust Company
                        of Dallas, Texas, in account with
                                J. A. Thomas, Dr
                To amt. paid for shares of stock...............  $32 00
                To amt. paid for atty's fees for examination of
                  title .......................................    5 00
                To amt. paid for recording two deeds of trust      4 25
                To amt. paid for extra copy of abstract........    4 00
                To amt. paid for acknowledgment and stamps
                  on deed of trust ............................    4 30
                To amt. which will have to be paid to clear
                  up plaintiff's title, preparing and recording
                  releases ....................................    4 25
                                                                 ______
                                                                 $53 80
                

The appellant answered by general denial and by special plea, the substance of which is thus stated in appellant's brief: "That in May, 1900, appellee applied in writing to appellant for 16 shares of its capital stock (par value of $100), for which he agreed to pay it at the rate of 50 cents a month per share for 110 months. That appellant issued and delivered to him a certificate for such stock, by the acceptance of which he bound himself to pay for such stock, as provided in such certificate, at said rate of 50 cents a month per share. That in said application for stock and upon said certificate of stock it was distinctly printed and stipulated, as parts thereof, among other provisions, that appellee agreed and warranted to appellant that he understood that no representation, statement, or agreement of any person whatsoever, made prior to the issuance of said shares, or concerning a loan, should be binding upon appellant, and that all such statements, agreements, or representations should be merged in the written contract between them; said contract consisting of his said application for stock and said certificate of shares, with all covenants and conditions made parts of said writings. That, in his said written application for stock, appellee expressly stated and agreed that no agent, solicitor, or other representative of appellant had the right to promise him a loan, or make any promise concerning a loan; such power being reserved by the contract to appellant's board of directors at Dallas, Texas, when loan application in writing should be submitted to them in Dallas. That afterwards appellee applied to appellant for a loan of $500 on his homestead in Yoakum, stating in his loan application that there was a vendor's lien on the property for said sum, then due. That, relying on this loan application, appellant in good faith prepared notes and deeds of trust for loan to appellee of $500, and same were duly executed by appellee and his wife. That both appellant and appellee well knew that no lien could be fixed upon his homestead, save for unpaid purchase money then owing on it. That, after execution of said loan papers, appellant learned that appellee had falsely stated and sworn in his application for a loan that there was $500 owing on his homestead, whereas, in truth, only $400 remained due thereon, for which sum only could appellant secure a valid lien. That for this reason appellant refused to make loan of $500, but it did offer to lend him $400, which he declined to accept. That appellee had colluded with an agent of appellant (one Jenkins) for the purpose of deceiving and swindling it by fraudulently inducing it to lend $500 to appellee on his homestead, although only $400 remained unpaid thereon. That appellee well knew of said Jenkins' want of authority to make any promise binding on it as to any loan; the authority of said agent being expressly limited in writing in application for stock, as well as in certificate of stock. That the making of said $500 loan was only prevented by timely discovery of the fraud of appellee and said Jenkins. That such sums as appellee paid to appellant were by him paid on account of stock subscription, and for expenses incident to preliminary work on loan application for the $500. That appellee owed appellant on stock subscription the sum of $79.50, after crediting him with all sums paid by him thereon under his contract with it, which amount he had, on demand, refused to pay, etc. That, as appellee knew at the time he applied for a loan, appellant procures at 8% per annum money to reloan, and that, as appellee, in his loan application, agreed to pay it 10% a year for the money desired by him, it would have made $8 a year for the term of the loan, which was five years, off of the loan to him, if he had not tried to swindle appellant, etc. That appellant, prior to discovering the fraud intended to be perpetrated on it by appellee and Jenkins, paid to said Jenkins a commission of $24 for account of the 16 shares of stock sold by him to appellee. That said Jenkins is wholly insolvent, etc. That appellant also expended $15 by way of attorney's fees in examination of appellee's title, preparation of loan papers, etc., before discovery of said fraud of appellee and Jenkins, as well as $10 in investigating the value of the security, etc. Appellant sought by its said answer and plea in reconvention to recover of appellee the several sums of money hereinabove mentioned."

Appellee excepted to the counterclaim set up by appellant on the following grounds "(1) Because the answer failed to allege the breach by plaintiff of any contract entered into by plaintiff and defendant. (2) Because the damages in the sum of $40 alleged as profits is not the result of the breach of any contract alleged, and is too remote and consequential to be considered as damages in set-off, counterclaim, or cross action." The court below sustained these exceptions to the counterclaim set up by defendant, except as to the item of $79.50 alleged to be due on subscription to stock.

The trial of the case by the court without a jury resulted in a judgment for appellee for the sum claimed by him, and against appellant on its counterclaim, from which judgment this appeal is prosecuted.

The facts developed upon the trial of the case are undisputed, and, briefly stated, are as follows: Appellee, desiring to borrow $500 on his homestead, situated in the town of Yoakum, Tex., called upon one Jenkins, an agent of appellant, and informed him of his desire. At the time appellee applied to Jenkins for this loan, he informed him that there was a vendor's lien upon the property, held by Mr. Sam Lewis, to secure notes due Lewis in the aggregate amount of $400, and that he wanted to...