Paris Exch. Bank v. Beard

• Decision Date: 01 January 1878
• Citation: 49 Tex. 358
• Parties: THE PARIS EXCHANGE BANK v. W. G. BEARD ET AL.
• Court: Texas Supreme Court

49 Tex. 358

THE PARIS EXCHANGE BANK

v.W. G. BEARD ET AL.

Supreme Court of Texas.

1878.

APPEAL from Lamar. Tried below before the Hon. R. R. Gaines.

The Paris Exchange Bank, claiming to be a private corporation under the laws of the State of Texas, brought suit on the 28th day of August, 1876, against G. and W. G. Beard, defendants, on a promissory note for the sum of one thousand dollars, dated August 25, 1873, and payable on or before the 1st day of January, 1875. Said note, as declared on, was payable to L. H. and D. C. Staten, and recited that it was given as the second payment for two tracts of land, containing sixty acres in each tract. The petition was in the usual form of an action on a promissory note, with the additional allegations of its transfer to plaintiff by the payees on the -- day of ____, A. D. _____; its delivery to plaintiff, and plaintiff's ownership thereof. The petition also alleged that the note was given as a part of the consideration for two certain tracts of land, which were described, and asked a foreclosure of the vendor's lien.

September 28, 1876, the defendants answered, by a general demurrer, a general denial, a plea of payment to the amount of $615.25, and a plea that plaintiff was neither the legal nor equitable owner of the note sued on, but held it as collateral.

October 3, 1877, the defendants amended, in substance, that the note sued on was one of a series or set of notes--being three in all, and for $1,000 each-- given by defendants to L. H. and D. C. Staten, at the same time and in one and the same transaction, for the purchase-money of the 120 acres of land described in plaintiff's petition; that the note due January 1, 1876, had been transferred by the Statens on April 22, 1874, to one J. T. Berry; that the note due January 1, 1877, had been transferred by the Statens on May 9, 1874, to Peet, Yale & Bowling; that the land had depreciated in value since the execution of the notes, and was not then worth over $2,000; that the said J. T. Berry and the said Peet, Yale & Bowling had respectively obtained judgment at the then term of the court on their said notes, with decrees of foreclosure; that the said two last-named debts stood upon equal, if not superior, footing with plaintiff's, and that defendants were not able to pay anything on these debts, outside of what the land would bring. Wherefore, in order that the proceeds of the said lien fund might be applied pro rata to the said three debts, the defendants prayed that the said Berry and the said Peet, Yale & Bowling might be made parties to the suit.

On the same day, October 2, 1877, the said J. T. Berry and the said Peet, Yale & Bowling intervened in the suit by separate petitions, each one a substantial copy of the other, and both embracing the substance of the defendants' answer above referred to, the necessary changes being made. The intervenors prayed that the several liens be adjudged equal, and that the proceeds of the land be paid pro rata on the several debts.

October 5, 1877, plaintiff replied to these pleas of intervention, claiming to be the legal and equitable owner and holder for value of the note sued on; that he became such owner long before the maturity thereof; and that it was the first note falling due of the series of notes mentioned by the intervenors, and claiming priority of payment out of the proceeds of the lands.

On the same day, October 5, 1877, intervenors filed a general demurrer and a general denial to this replication.

October 6, 1877, the defendants filed a second amendment, claiming a credit of $240 on the note sued on.

The case was tried before the court without a jury, and November 2, 1877, the judge rendered his decision, giving plaintiff judgment for $969 against the defendants, adjudging that the liens of plaintiff and the several intervenors, as regards said land, were equal, and ordering the proceeds of the land to be paid pro rata on said claims. To this judgment plaintiff excepted, and brought the case into this court by appeal.

The error assigned was, “That the court erred in adjudging the respective liens of plaintiff and the several intervenors to be equal, and entitled to share pro rata in the lien fund.”

Wright & McDonald, for appellant.--Under the assignment of error, appellant submits this proposition: Where a series of notes are given at the same time, falling due at different times, for the purchase-money of a tract of land, and such notes are assigned by the payee to different persons at different times, in case the proceeds of the land are insufficient to pay all the notes in full, then the note which was first assigned, being also the first falling due, is entitled to priority of payment out of the common fund.

This proposition embraces the only point relied on by appellant. It was proved on the trial that the note sued on by plaintiff was given in part payment for the tracts of land described in plaintiff's petition; that at the time of the purchase of the land, four notes for $1,000 each were executed as the full consideration for the land; that the first note was paid off when it fell due; that the note sued on in plaintiff's petition was the second note, and was transferred to plaintiff for a full, fair, and valuable consideration, by written indorsement on the back thereof, on the 2d day of January, 1874; that intervenor J. T. Berry was the owner and holder of the third note executed for said land, and that Staten and wife, the payees, for a valuable consideration, transferred the same to said Berry on the 22d day of April, 1874; and that intervenors Peet, Yale & Bowling were the owners and holders of the fourth and last of said notes, and that the payees, Staten and wife, transferred the same to said Peet, Yale & Bowling for a valuable consideration on the 9th day of May, 1874. The statement of facts contains nothing as to the insufficiency of the proceeds of the land to pay all the notes in full; but the defendants, intervenor J. T. Berry and intervenors Peet, Yale & Bowling, asserted such insufficiency. The...