Paden v. American State Bank & Trust Co.

• Decision Date: 04 March 1937
• Docket Number: No. 3508.,3508.
• Citation: 103 S.W.2d 243
• Parties: PADEN v. AMERICAN STATE BANK & TRUST CO.
• Court: Texas Court of Appeals

103 S.W.2d 243

PADEN v. AMERICAN STATE BANK & TRUST CO.

No. 3508.

Court of Civil Appeals of Texas. El Paso.

March 4, 1937.

Rehearing Denied March 25, 1937.

Appeal from District Court, Hidalgo County; Fred E. Bennett, Judge.

Suit by the American State Bank & Trust Company against F. E. Nix and others, wherein named defendant was served with statutory notice in the state of California. Judgment for plaintiff, and defendant M. L. Paden appeals.

Affirmed.

The American State Bank & Trust Company brought this suit against F. E. Nix, as maker, and Q. O. Miller and M. L. Paden, as indorsers, upon five notes, payable to Miller, or order, secured by vendor's lien upon 10 acres of land in said county which had been conveyed to Nix by Miller. Nix was served in the state of California with the notice prescribed by article 2037, R.S. The record is silent as to whether Nix was a resident of California or was there temporarily. It seems from the evidence he was a resident of Texas at the time the land was conveyed to him.

The petition failed to state the amount of the notes, but otherwise fully and correctly described the same. Failure to pay same was alleged and the damages laid at $2,000. With the omission stated, the petition is in the usual form of an action to recover upon notes with foreclosure of vendor's lien expressly retained. Nix and Miller did not answer. Paden answered by general demurrer, general denial, and special plea that after the notes described in the petition of plaintiff had been signed, executed, indorsed, and delivered by the two other defendants herein to the plaintiff, said plaintiff by its officers and agents approached this defendant and asked and requested this defendant to sign his name on the back of said notes as an accommodation indorser only and for the sole and only purpose of loaning the credit of this defendant to said plaintiff and to enable plaintiff to borrow money and obtain credit itself on said notes and promised and agreed with this defendant that he should not be liable to plaintiff in any way by reason of such signing and that he would not be asked or required to pay said notes, and thereupon this defendant, acting solely upon the aforesaid statements, promises, and agreements of plaintiff, and being solely induced thereby to do so did sign his name on the back of said notes as such accommodation indorser and not as an original maker or indorser for value and not as a party liable to said plaintiff in any manner. The record shows no ruling upon Paden's demurrer.

At the close of the evidence, an instructed verdict was returned in plaintiff's favor on February 13, 1936, and on February 14th judgment was rendered against all defendants for the amount due upon the notes with foreclosure of lien. The judgment recites due service upon Miller and Nix. On February 14th with leave of the court plaintiff filed a trial amendment inserting in its petition the following language after the words "Five (5) certain promissory vendor's lien notes" on page 1 of said petition, to wit, "Each in the principal sum of Two Hundred ($200.00) Dollars." Later Paden filed motions for new trial and to strike out the trial amendment. These motions were overruled and Paden appeals.

According to the testimony of the plaintiff's witness Jones, its active vice president, the circumstances under which Paden indorsed the notes are as follows: The defendant Miller was indebted to the bank, which indebtedness was secured by a deed of trust upon the 10 acres. Paden approached Jones regarding a sale of the land and requested him to contact Miller and ascertain if Miller would sell. Acting upon this request, Jones contacted Miller, who agreed to sell for $1,000 provided he was credited with that amount on his indebtedness to the bank. This information was communicated by Jones to Paden and the latter advised Jones he was ready to buy on the basis of the bank accepting five vendor's lien notes for $200 each, the deed to be made to the defendant Nix, the brother-in-law of Paden, Jones informed Paden he did not know Nix, whereupon the latter said he would indorse the notes to be executed by Nix and Paden requested that Miller, the payee of the notes, also indorse same. The bank had the necessary documents prepared. Nix executed the notes as maker; Miller then indorsed the same and executed an assignment of the notes and lien in favor of the bank; later Paden called and indorsed the notes. When Miller indorsed the notes, he did so with the understanding with Jones that the deal was not to be consummated unless Paden also indorsed the notes and would protect him against liability thereon and that the amount of the notes would be credited upon Miller's indebtedness to the bank. The bank thereupon released its deed of trust lien and the deal was closed, the amount of the notes being credited against Miller's indebtedness.

The defendant Miller testified corroborating the material portions of Jones' testimony.

H. H. Dunn, of Edinburg, and Bliss & Daffan, of San Antonio, for appellant.

Strickland, Ewers & Wilkins and R. D. Cox, Jr., all of Mission, for appellee.

HIGGINS, Justice (after stating the case as above).

Error is assigned to the overruling of appellant's motion for an instructed verdict and in granting the plaintiff's motion for such verdict.

Another assignment is to the effect the evidence raises an issue of fact as to whether Paden was an indorser for the...