Naylor v. Gutteridge

• Decision Date: 17 July 1968
• Docket Number: No. 11618,11618
• Citation: 430 S.W.2d 726
• Parties: James K. NAYLOR, Jr., and Anna Lee Naylor, Appellants, v. Leila L. GUTTERIDGE and Sarah F. Davis, as Guardians of the Person and Property of Carrie F. Haines, Incompetent, Appellees. . Austin
• Court: Texas Court of Appeals

Page 726

430 S.W.2d 726

James K. NAYLOR, Jr., and Anna Lee Naylor, Appellants, v. Leila L. GUTTERIDGE and Sarah F. Davis, as Guardians of the Person and Property of Carrie F. Haines Incompetent, Appellees.

No. 11618.

Court of Civil Appeals of Texas Austin.

July 17, 1968.

Rehearing Denied Aug. 14, 1968.

Mitchell, Gilbert & McLean, Phillip W. Gilbert, Arthur Mitchell, Austin, for appellants.

Maloney, Black & Hearne, Thomas Black, Austin, for appellees.

O'QUINN, Justice.

This is a suit for debt brought by the guardians of an incompetent against a man and his wife who over a period of several years had business relations with the ward before she was declared incompetent .

The guardians and the ward are residents of the State of Florida. Suit was brought in Travis County, Texas, the residence of defendants.

Leila L. Gutteridge and Sarah F. Davis, as guardians of the person and estate of Carrie F. Haines, incompetent, filed suit against James K. Naylor, Jr. and wife, Anna Lee Naylor, on a promissory note and other forms of debt on December 6, 1966, in the sum of $20,453.67.

The case was tried before the court without a jury. The trial court entered judgment against James K. Naylor, Jr. and Anna Lee Naylor on January 30, 1968, for recovery by the guardians of the sum of $6,055.42. No findings of fact or conclusions of law were filed and none was requested.

James K. Naylor, Jr. and Anna Lee Naylor have appealed and assign fourteen points of error. The appellees have replied under seven counterpoints.

It is apparent from the record that the award of $6,055.40 to the guardians represents a promissory note in the amount of $2,500, dated May 22, 1964, with interest as provided in the note, and $500 attorney's fees as stipulated, and $2,500 for a loan made by Carrie F. Haines to James K. Naylor, Jr., on October 20, 1964.

In proof of the note, the guardians introduced a promissory note, dated May 22, 1964, payable to Carrie F. Haines in the principal sum of $2,500, providing interest at six percent per annum from date of the note, and with due date of November 22, 1964. The note was signed by James K. Naylor, Jr. Execution of the note and its authenticity are not questioned. The guardians also introduced a check in the sum of $2,500, dated May 7, 1964, from Carrie F. Haines to James K. Naylor, in proof of the consideration received by Naylor for the note. The note and the cancelled check were among the personal effects of Carrie F. Haines coming into the custody of the guardians.

The guardians also introduced into evidence a check for $2,500, dated October 20, 1964, from Carrie F. Haines to James K. Naylor, Jr . Naylor admitted in testimony given at the trial that this check was a 'new obligation above and beyond the one evidenced by the note of May 22nd.' In their 'first supplemental answer,' a sworn pleading appearing to be in the nature of an amended answer, the Naylors pleaded in March, 1967, 'that an additional advance was made by Carrie F. Haines to the Defendants by check (check) dated October 20, 1964, in the amount of $2,500.00, and that this is the only Obligation presently current and unpaid.' (Emphasis added) Indorsement on the check shows deposit to a special account of James K. Naylor, Jr. and Anna Lee Naylor.

On October 8, 1964, about twelve days earlier, Naylor had written 'Dearest Carrie' (Haines) beginning with the statement, 'I am enclosing a check for $25 as a payment on the many times you have helped us in the past,' which he assured her 'will be a regularly monthly payment from now on,' and ending with the plea, 'I need $2,772.18 * * * and I will send you a note * * *' To this was added in conclusion, 'I still want you to come and live with us, so that you can at least enjoy the fruits of your endeavors. Please let me hear from you immediately. We love you very much.'

The Naylors defended the suit on the ground that the note of May, 1964, and the loan evidenced by the check of October, 1964, had been paid in full. They resisted the claims for loans prior to 1964 (in the years 1956 through May 27, 1963) totaling more than $12,600, on the ground that these were barred by statutes of limitation.

Carrie F. Haines was declared an incompetent in a Florida court in an order entered on April 26, 1966. One of the guardians named by the court, Sarah F. Davis, testified that she had been a close associate and friend of Carrie F. Haines beginning in 1940; that she assisted Carrie F. Haines, Beginning in 1946, to prepare work sheets for income tax returns, and that she was familiar with Mrs. Haines' manner of doing business in her business transactions. The note and checks were part of the records and business papers of Mrs. Haines coming into the care of the guardians.

In the trial of this case the Naylors contended that the obligations represented by the note of May, 1964, and the check of October, 1964, were paid in full. James K. Naylor first made the claim of payment in a letter dated May 26, 1966, to an attorney in Florida representing the guardians and their ward. Naylor wrote at the time that he had 'packaged all of the old files and correspondence and stored them for future use,' but that since receiving the attorney's letter Naylor 'had been trying to locate the papers that you have asked for.' To this Naylor added, 'I have a number of cancelled checks and cancelled notes somewhere in the stored files.' In conclusion Naylor told the attorney, '* * * I am sure that I can satisfy your request when our audit and search for records is complete.'

If the audit and search for records were ever completed, Naylor did not make the cancelled checks and cancelled notes available at the trial of this case. In fact, at the trial Naylor testified, with respect to records reflecting payment, as follows:

'Q You have no receipts, no books, no entries, no nothing that would reflect these payments?

A No, sir.'

This testimony was followed by Naylor's claim that the payments were reflected in correspondence between him and his mother-in-law, Mrs. Florence Malka, who resided in Florida and was acquainted with Carrie F. Haines. None of this correspondence was produced at the trial.

Naylor testified that all payments of these obligations were made in cash, in sums ranging from $500 to $1,250, sent by him either through unregistered United States mail, or in sealed envelopes carried by his 17-year-old daughter when she went to Florida to visit Mrs. Malka in June and again in December of 1964. Mary Naylor, the daughter, testified by deposition that she did not know the contents of the envelopes that she delivered to Mrs. Malka.

The concluding portion of Mary Naylor's testimony is repeated:

'Q Did your grandmother tell you she had delivered it to Mrs. Haines?

A No. Not that I remember.

Q Do you know anything else about this transaction?

A That is all. It is sort of new to me.

Q What?

A It's new to me.

Q Did Mrs. Haines ever say anything to you about your father owing her some money?

A No.

(Counsel) I think that is all.'

For the payments Naylor claims he made in cash to Mrs. Haines through Mrs. Malka, amounting to enough at least to discharge the $5,000 in 1964 obligations, Naylor admits he obtained no receipts from Mrs. Haines.

Under cross-examination, Naylor, who was engaged in the bonding insurance business, testified as follows with regard to obtaining receipts:

'Q And when you pay cash, you get a receipt, don't you, Mr. Naylor?

A Or a credit of some kind.

Q Neither of which you did in Mrs. Haines' case?

A No, sir.

Q And you have no letter whatsoever from Mrs. Haines acknowledging any receipt of any of these payments?

A Not that I could find, no sir.'

The Naylors made no attempt to show any credit reflected in Mrs. Haines' records which appear to have been available at the trial. The promissory note for $2,500 had not been returned to Naylor, nor was the note marked showing any credits for payments claimed by Naylor to have been made.

When asked by the trial judge how he knew how much he owed Mrs. Haines at any given time, Naylor replied, 'Just kept a figure in our heads.'

The court continued his examination with particular reference to a cash payment in June, 1964, of $1,250 which Naylor claimed he made to Mrs. Haines through Mrs. Malka:

'The Court: Do you have any records by which, say, the one thousand two hundred and fifty dollars that you say you paid in June of 1964 came out of any funds that you had on deposit in any bank and was converted into cash?

The Witness: No, sir.'

Naylor produced no records showing the source of any of the cash payments he claimed to have made Mrs. Haines either in 1964 or at any other time.

Naylor claimed that he paid interest on the 1964 promissory note, but admitted that he did not show a deduction of any kind of interest in his income tax returns for 1964 and 1965.

In an effort to corroborate his claim of cash payments to Mrs. Haines in discharge of the 1964 obligations, Naylor introduced the testimony by deposition of his mother-in-law, Mrs. Florence Malka. In his testimony at the trial, Naylor tracked with substantial consistency the testimony previously obtained from Mrs. Malka in her deposition. Naylor testified by deposition, however, prior to the trial, and this testimony was almost entirely in conflict with the testimony of Mrs. Malka in her deposition.

On deposition Naylor said that he paid $500 early in June, 1964, but Mrs. Malka claimed the amount paid was $1,250. Naylor in his deposition swore that he had made a payment of $1,250 in October of 1964, a payment Mrs. Malka did not verify in her deposition. Naylor's claim of a payment of $1,250 in October lacks consonance with the letter of October 8, already noted, in which he was making a $25 payment 'on the many times you have helped us in the past,' and promising more like it each month, while in the same paper imploring Mrs. Haines to send him 'immediately' $2,772.18 for which he would give...