Roseborough v. Phillips
Decision Date | 05 March 1965 |
Docket Number | No. 16471,16471 |
Citation | 389 S.W.2d 593 |
Parties | D. S. ROSEBOROUGH, Appellant, v. V. P. PHILLIPS, Appellee. |
Court | Texas Court of Appeals |
L. A. Bedford, Jr., Dallas, for appellant.
Esir Tobolowsky, Dallas, for appellee.
V. P. Phillips brought this suit against Volney's Inc., a corporation, V. B. Phillips, Johnny Walker, D. S. Roseborough and L. R. Bright, on two promissory notes and to establish and foreclose a lien on certain real property. One promissory note, dated June 28, 1961, in the sum of $2,000 was executed by defendant Volneys' Inc. The individual defendants, by a separate written guarantee, assumed personal liability in the event of nonpayment by Volneys' Inc. The other promissory note was in the principal sum of $1,465.65 and was executed by all of the defendants. All of the defendants, with the exception of the defendant Roseborough, defaulted and judgment was rendered against them from which no appeal was taken. Defendnat Roseborough answered, setting forth various defenses, including an allegation to the effect that there was a verbal agreement whereby he would not be held personally liable on the note for $1,465.65.
At the conclusion of a nonjury trial defendant Roseborough filed a motion for judgment based upon the proposition that plaintiff had neither pled nor proved notice of dishonor of the note for $2,000. Such motion was overruled and the court proceeded to render judgment against defendant Roseborough for the principal amount of the notes in question, together with interest and attorneys' fees as therein provided, but denied plaintiff's prayer for foreclosure of lien. Roseborough appeals, contending in two points of error that the trial court erred in rendering judgment against him on the two notes because (1) there are no pleadings or evidence that notice of dishonor was given him in connection with the $2,000 note; and (2) that as to the note for $1,465.65 there was an agreement to the effect that Roseborough was not to be held personally liable thereon. Both points are found to be without merit and are overruled.
Appellant's first point relating to failure of appellee to either plead or prove notice of dishonor, as provided by Vernon's Ann.Civ.St. Art. 5938, Sec. 89, Texas Negotiable Instruments Act, demands a study of the note and collateral agreement to properly determine the legal status of appellant. The note, dated June 28, 1961, in the principal sum of $2,000, and representing cash advanced by appellee to Volneys' Inc., is regular on its face and signed 'Volneys' Inc., Dallas, Texas, Volney B. Phillips (President).' On the reverse side of the note is found the following:
Inc. in monthly payments, in the amount of Fifty Five Dollars per month, until the said amount is paid in full, providing the last payment shall be in the amount of Seventy Five Dollars, and all shall be paid within 36 months from the date hereof. Such payments are to be made on or before the 15th day of each month.
It is specially agreed and understood that this obligation is to be paid by Volneys' Inc. But in the event the said Corporation for any reason fails to perform this obligation, or any part thereof then the following named and undersigned Directors shall be individually liable thereon:
V. B. Phillips, /s/ V. B. Phillips.
Johnny Walker, /s/ Johnny Walker.
D. S. Roseborough, /s/ D. S. Roseborough'.
Bennie King, 1 /s/ Bennie King.
L. R. Bright, /s/ L. R. Bright.
It is evident from the reading of this instrument that it is a separate and collateral agreement by appellant, and the other directors of the corporation, whereby they, and each of them, guarantee the payment of the note in the event the same is not paid by Volneys' Inc. Thus appellant Roseborough, and the other signers of the collateral agreement, became guarantors and not indorsers in the sense of that term under Negotiable Instruments Law. Hughes v. Straus-Frank Co., Tex.Civ.App., 127 S.W.2d 582, affirmed Supreme Court, 138 Tex. 50, 156 S.W.2d 519; Smith v. Montgomery, 3 Tex. 199; Wood v. Canfield Paper Co., 117 Tex. 399, 5 S.W.2d 748; Shropshire v. Smith, Tex.Civ.App., 37 S.W. 174; 21 Tex.Jur., p. 135, et seq.
That appellant Roseborough was, indeed, a guarantor was admitted and stipulated by counsel for appellant in open court wherein he said: 'The defendant is a guarantor, certainly under the note of, if he is to be considered anything, he is to be considered a guarantor on the note given June the 28th, which says that at that time they guarantee payment of that note.' Being a guarantor, and not an indorser, was it encumbent upon appellee to allege and prove notice of dishonor of the note in question to appellant as required by Art. 5938, Sec. 89, Negotiable Instruments Act of Texas? We think not.
Since appellant's liability is contingent upon the separate and collateral agreement, constituting him a guarantor as contra-distinguished from that of indorser, the provisions of the Negotiable Instruments Law relating to notice of dishonor to an indorser are not applicable. As stated by Justice Looney of this court in Commerce Securities Corp. v. Congleton, Tex.Civ.App., 8 S.W.2d 803, wr. dism.:
Even if it could be said, arguendo, appellant Roseborough...
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