Nedow v. Nicholson

• Decision Date: 09 July 1964
• Docket Number: No. 14391,14391
• Parties: Betty NEDOW, Individually and as Independent Executrix of the Estate of Ben Nedow, Deceased, Appellant, v. C. E. NICHOLSON, Appellee.
• Court: Texas Court of Appeals

Page 723

381 S.W.2d 723

Betty NEDOW, Individually and as Independent Executrix of

the Estate of Ben Nedow, Deceased, Appellant, v. C. E. NICHOLSON, Appellee.

No. 14391.

Court of Civil Appeals of Texas, Houston.

July 9, 1964.

Rehearing Denied Sept. 10, 1964.

J. Edwin Smith, Houston, Smith & Lehmann, Houston, of counsel, for appellant.

Fred Much, Houston, for appellee.

COLEMAN, Justice.

This is an appeal from a summary judgment in favor of the payee of a promissory note. Appellant contends that part of the consideration for the note was illegal, rendering the entire note unenforceable.

Appellee filed an affidavit in support of his motion for summary judgment. Appellant filed no affidavits and relies, to support her plea of illegality, on appellee's affidavit.

It is appellant's contention that appellee's affidavit establishes that part of the consideration for the note was an agreement not to bring to the attention of the Securities Exchange Commission or the State of Texas information concerning the financial instability of Nedow Oil Tool Company. She further reasons that, since the company had application for permission to market securities pending, such an agreement was contrary to public policy, and, the consideration for the note not being severable, the note was unenforceable.

As authority for her position, appellant quotes from 13 Tex.Jur.2d 376, Sec. 177, as follows: 'Contracts that are intended to deceive third persons or even the public itself, or contracts that have a tendency to perpetrate such fraud or deception, are against public policy and will not be enforced by the courts.'

Appellant also likens the agreement to one to suppress evidence and one interfering with public officials in the discharge of their official duties, and cites appropriate authority demonstrating that such agreements are invalid as being contrary to public policy.

We are unable to agree with appellant's interpretation of appellee's affidavit. While the affidavit recites that part of the consideration for the note was appellee's agreement 'to postpone any complaints to the Securities Exchange Commission or to the State of Texas about Nedow's previous statements and representations concerning the securities and financial stability of Nedow Oil Tool Company,' there was nothing in the affidavit showing an agreement not to bring to the attention of public officials information showing that the firm was presently in financial straits. We might assume that the representation made to appellee by Ben Nedow concerning the value of the patent rights, assets and equipment of the company was in fact untrue, and that the representation that approval of the application for permission to sell securities would be received in a short time was optimistic. There is, however, nothing in this record showing that appe...