Republic Nat. Bank of Dallas v. Strealy

• Decision Date: 03 February 1961
• Docket Number: No. 16155,16155
• Citation: 343 S.W.2d 284
• Parties: REPUBLIC NATIONAL BANK OF DALLAS, Independent Executor of the Estate of Ray K. Glenn, Deceased, Appellant, v. Leonard STREALY, Appellee.
• Court: Texas Court of Appeals

Page 284

343 S.W.2d 284

REPUBLIC NATIONAL BANK OF DALLAS, Independent Executor of the Estate of Ray K. Glenn, Deceased, Appellant, v. Leonard STREALY, Appellee.

No. 16155.

Court of Civil Appeals of Texas, Fort Worth.

Feb. 3, 1961.

Rehearing Denied March 3, 1961.

Jackson, Walker, Winstead, Cantwell & Miller A. W. Walker, Jr., Jack Pew, Jr., Dallas, for appellant.

Elmo Irby, Fort Worth, for appellee.

PER CURIAM.

On December 31, 1953, Leonard Strealy executed a note in the principal sum of $8,838.15, payable to the order of Ray K. Glenn 'at _____'. When the note was made and delivered, Strealy lived in Fort Worth, and Glenn had an office in Fort Worth, where he transacted business. Strealy made payments on the mote at such office. Sometimes afterward, the date not being shown, Glenn moved to California, and then to Dallas, where he died about four years after the date of the note. Republic National Bank of Dallas became independent executor of his estate.

On October 9, 1958, the Bank sued Strealy in the District Court of Dallas County for the balance claimed to be owing on the note. Strealy filed a plea of privilege to be sued in Tarrant County, the county of his residence. After such plea was filed, the Bank, on the advise of counsel that it had the righ to do so, wrote the words 'Dallas, Texas' in the space after the word 'at,' thus indicating that the note was, by its terms, made payable in Dallas.

When Strealy appeared for a hearing on his plea of privilege the Bank dismissed the Dallas County suit, and afterward filed suit in the District Court of Tarrant County on the alleged debt by way of verified account, and alternatively, on the note, alleging the balance owing to be $3,640.36. Strealy pleaded that there could be no recovery because there had been a material alteration of the note by the addition of the words 'Dallas, Texas.' which, he alleged, the Bank had accomplished with the fraudulent intent to deprive him of the right to pay the note, and to be sued on it, in the county of his residence. The jury found that the words were written in the note for the sole purpose of fraudulently preventing a transfer of the suit to Tarrant County. A take nothing judgment was entered against the Bank, and this appeal followed.

We think the judgment is correct. Sections 124 and 125, Article 5939, Vernon's Ann.Tex.St., provide that where a negotiable instrument is materially altered without the assent of all the parties liable thereon it is avoided, and that any alteration which adds a place of payment where no place of payment is specified is a material alteration.

Appellant says it was authorized to add the words 'Dallas, Texas' by the provisions of Section 14, Article 5932, as folllows: 'Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.'

It would seem that a reasonable construction of the expression 'wanting in any material particular' is that the instrument as originally written was not a complete legal negotiable instrument, or that it imperfectly expressed the intention, or that it imperfectly expressed the intentions of the solid or weighty character; substantial; of consequence; not to be dispensed with; important.' Webster's New International Distionary, Second Edition. We do not think the note was imperfect, but was a complete legal instrument, when it left the hands of the maker. If so, Section 14 of Article 5932 would appear not to be applicable. But if applicable, all of its provisions must be construed together, and it must be considered along with the provisions of Sections 124 and 125 of Article 5939. Curlee Clothing Co. v. Wickliffe, 126 Tex. 573, 91 S.W.2d 677; Clem Lumber Co. v. Barnett, Tex.Civ.App., 158 S.W.2d 837; Simpson v. First Nat. Bank, 94 Or. 147, 185 P. 913; Stout v. Eastern Rock Island Plow Co., 202 Ind. 517, 176 N.E. 844, 75 A.L.R. 1386; Hartington Nat. Bank v. Breslin, 88 Neb. 47, 128 N.W. 659, 31 L.R.A., N.S., 130.

Before the adoption of the Negotiable Instruments Act it was generally held that one in possession of such an instrument had implied authority to fill blanks and perfect the instrument. Curlee Clothing Co. v. Wickliffe, supra. In some jurisdictions, however, the rule was applied, if at all, in a very restricted sense. Cronkhite v. Nebeker, 81 Ind. 319, 42 Am.Rep. 127; Bowen v. Laird, 166 Ind. 421, 77 N.W. 852; Carroll v. Warren, 142 Ala. 397, 37 So. 687. In some cases the maker was held on the ground of negligence or estoppel. So there was little uniformity in applying the general rule to particular cases. Said the court in Holmes v. Trumper, 22 Mich. 427, 7 Am.Rep. 661, 'We think the courts have gone quite far enough in sustaining instruments executed in blank, and the implied authority to fill them up, and we are not disposed to take a step in advance in that direction.'

The case at bar is controlled by the provisions of the Negotiable Instruments Acts; and we have found no Texas authority which construes the Act in the particulars here involved. Our exact question arose in the Curlee case, supra, but...