North Texas Nat. Bank v. Thompson

• Decision Date: 12 October 1929
• Docket Number: (No. 10439.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 23 S.W.2d 494
• Parties: NORTH TEXAS NAT. BANK v. THOMPSON et al.
• Court: Texas Court of Appeals

23 S.W.2d 494

NORTH TEXAS NAT. BANK v. THOMPSON et al.

(No. 10439.)^*

Court of Civil Appeals of Texas. Dallas.

October 12, 1929.

Rehearing Granted and Cause Reversed and Remanded November 30, 1929.

Appeal from District Court, Dallas County; Claude M. McCallum, Judge.

Action by the North Texas National Bank against D. G. Thompson and others. From a judgment for defendants Thompson and others, plaintiff appeals. Reversed and remanded.

Thomas, Storey & Grady, of Dallas, for appellant.

Saner, Saner & Jack, I. M. Williams, and Beall, Worsham, Rollins, Burford & Ryburn, all of Dallas, and J. L. Gammon, of Waxahachie, for appellees.

LOONEY, J.

The North Texas National Bank, plaintiff below, appeals from an adverse judgment rendered upon an instructed verdict. As the decision of the case will turn largely upon the construction of written instruments, they will be set out at length.

On July 29, 1921, T. J. Cole, I. M. Williams, D. G. Thompson, R. K. Erwin, and Mrs. Ella H. Gibson, stockholders and directors of Texas Mortgage Company of Texas, a corporation, executed and delivered to Southwest National Bank of Dallas, Tex., the following written instrument:

"Limited Guaranty

"For the sum of One Dollar ($1.00) and other valuable consideration, I, we, or either of us, jointly and severally, guarantee the payment and agree and promise to pay at Dallas, Texas, to the Southwest National Bank of Dallas, its successor, successors or assign, at maturity or at any time thereafter as demanded by it, all notes, discounts, overdrafts and any and all indebtedness or obligation, whether joint or several, or both, or primary or secondary, contract of tort, for which The Texas Mortgage Company of Texas, Dallas, Texas, is, or are, now, or hereafter may become, liable or indebted to the Southwest National Bank of Dallas, its successor, successors or assign, provided, however, that my or our liability hereunder shall not exceed the sum of Twenty Thousand Dollars ($20,000.00), and the payment of said sum of Twenty Thousand Dollars ($20,000.00) under this contract to said Southwest National Bank of Dallas, its successor, successors or assign, by the subscriber or subscribers hereto, such payment to be applied to the indebtedness of the principal debtor as may be determined by the Southwest National Bank of Dallas, its successor, successors or assign, shall satisfy and discharge the obligation of this instrument.

"I, we, and each of us hereby waive notice of acceptance of this guaranty and all other notices in connection herewith, or the indebtedness or obligation guaranteed thereby, and waive diligence, presentment, notice, protest and suit on the part of the bank, its successor, successors or assign, in the collection of any indebtedness or obligation hereby guaranteed. This guaranty is a continuing one and shall continue to apply without regard to the form or amount of the indebtedness or obligation guaranteed, which the bank, its successor, successors or assign, may create, renew, extend or alter, in whole or in part, without notice to the undersigned from time to time as it may elect without affecting the obligation of this guaranty, and it is hereby expressly agreed that the bank, its successor, successors or assign, may surrender, release, exchange or alter any collateral or other security held by it for the claims hereby guaranteed, either in whole or in part, without affecting the obligation or liability of the undersigned on this guaranty, and this guaranty shall be and continue effective notwithstanding any legal disability of the principal debtor to incur the indebtedness or obligation, in whole or in part.

"This instrument shall bind me, us, and each of us, severally and jointly, until the Southwest National Bank of Dallas, its successor, successors or assign, shall have received notice in writing, that the subscriber hereto giving such notice elects to be no longer bound by this guaranty, after which time this instrument shall bind the subscriber hereto giving such written notice only as to the indebtedness or obligation then existing and renewals or extensions in whole or in part of the then existing indebtedness or obligation, but shall continue in full force and effect at the option of the bank, its successor, successors and assign, as to all other subscribers hereto not giving such written notice." (S. F. 7-9.)

After the execution of this instrument, Texas Mortgage Company became indebted to Southwest Bank in the sum of $4,000, evidenced by a note remaining unpaid on May 13, 1925, when Southwest Bank and plaintiff bank entered into the following written agreement, to wit:

"This agreement, this day made and entered into by and between the Southwest National Bank of Dallas, Texas, hereinafter styled party of the first part, and North Texas National Bank of Dallas, Texas, hereinafter styled party of the second part, witnesseth,

"That the party of the first part does hereby sell, assign and agree to deliver any and all of the assets of any kind, character and description except its corporate name and charter, unto the party of the second part, hereby authorizing, empowering and directing the President, either of the Vice-Presidents, or the Cashier of the party of the first part to transfer by endorsement, all notes, bills of exchange or other evidence of debt owned by the party of the first part, unto the party of the second part; to execute and deliver all and any deeds or other instruments necessary to convey title to any real estate owned by party of the first part unto party of the second part, and to transfer and deliver all bank balances due from other banks by means of drafts and all means, and to deliver all cash, checks, or equivalent of money owned by party of the first part unto party of the second part, it being the intention of this agreement to sell, transfer and deliver by any and all means all of the assets of the party of the first part, except its corporate name and charter, unto the party of the second part.

"2. That in consideration that the party of the first part shall and does sell, assign and deliver all of the assets of every kind, description and character, its corporate name and charter alone excepted, unto the party of the second part as hereinafter set out.

"Now, therefore, party of the second part does hereby assume all of the liabilities of the party of the first part, except its liability to its shareholders; and party of the second part hereby further agrees to select from the assets of the party of the first part a sufficient amount of assets to equal in value the liabilities assumed by party of the second part.

"The party of the second part shall hold all assets taken over under this transfer from the party of the first part over and above the total selected as hereinbefore provided and set up on its books to offset all liabilities of record except to shareholders of the party of the first part; that said assets shall be so held for a period of one year from the date of transfer to indemnify it in assets set up on its books and to guarantee it against loss thereon for said period of one year; that party of the second part shall have the power of substitution and the privilege of exchange between the assets set up on its books and the residue of assets taken over from party of the first part; that after the expiration of one year from the date of this transfer, the party of the second part agrees to deliver to such duly appointed liquidating agent as may be selected by party of the first part, all remaining assets taken over from the party of the first part and above what shall have been at that time permanently accepted by party of the second part equal in value to the amount of liabilities of record assumed by party of the second part, said remaining assets to become the property of the shareholders of the party of the first part, to be further administered and distributed by the duly appointed liquidating agent of party of the first part for the use and benefit of its shareholders."

In accordance with the provisions of the agreement between the banks, appellant permanently accepted and became the owner of the note for $4,000, held by Southwest Bank against the mortgage company, above referred to, and incidentally, of course, became assignee of the guaranty held as security therefor. The mortgage company, however, paid appellant this note on July 8, 1925, and from that date until February 1, 1926, no additional debt was created; but on the latter date, appellant, relying upon the validity and continuing existence of the guaranty, loaned the mortgage company $20,000, which remains unpaid.

This suit is bottomed on the idea that, appellant, under the facts and circumstances of the case, is both a successor and an assign of Southwest Bank, and that, as such, the guaranty ran in its favor; hence it was authorized to rely upon same in making said loan to the mortgage company.

At the conclusion of the evidence, the court, of its own motion, instructed the jury to return a verdict against appellant and in favor of appellees, and also directed a verdict in favor of plaintiff against defendant R. K. Erwin. Having instructed a verdict in favor of appellees, the reason that actuated the court in instructing a verdict against R. K. Erwin, a coguarantor, is not apparent, but this is an immaterial inquiry, as Erwin does not appeal. W. J. Rutledge, Jr., trustee in bankruptcy for Texas Mortgage Company, was also brought in as a defendant, but the suit was dismissed as to him. Judgment following the verdict, as directed by the court, was rendered for plaintiff against Erwin, and in favor of defendants, Williams, Thompson, and Mrs. Gibson, that plaintiff take nothing as to them, from which this appeal is prosecuted.

Appellees say that appellant's brief should not be considered because it does not contain an assignment of error. This objection is not well taken. The brief of appellant...