Rush v. First Nat. Bank

• Decision Date: 05 July 1913
• Citation: 160 S.W. 319
• Parties: RUSH et ux. v. FIRST NAT. BANK OF AMARILLO et al.
• Court: Texas Court of Appeals

160 S.W. 319

RUSH et ux. v. FIRST NAT. BANK OF AMARILLO et al.

Court of Civil Appeals of Texas. Amarillo.

July 5, 1913.

Rehearing Denied November 1, 1913.

Appeal from District Court, Potter County; J. N. Browning, Judge.

Action by the First National Bank of Amarillo against J. W. Rush, in which W. H. Fuqua intervened. From a judgment for the bank and for intervener against defendant, defendant appeals. Reversed, and remanded for new trial.

See, also, 159 S. W. 466.

H. H. Cooper, of Amarillo, J. A. Stanford, of Waco, and L. C. McBride, of Dallas, for appellant. Madden, Trulove & Kimbrough, of Amarillo, and Reeder & Dooley, of Amarillo, for appellees.

HENDRICKS, J.

In this cause appellee the First National Bank of Amarillo was the plaintiff in the trial court and the appellant, J. W. Rush, was the defendant, and W. H. Fuqua, the other appellee, was the intervener.

The appellee bank sought judgment against appellant, Rush, on a note for $12,000 executed the 26th day of March, 1906, providing for 10 per cent. interest and the usual 10 per cent. attorneys' fees, and also for the foreclosure of a lien upon what is designated in this suit as the Gid Jowell notes, six in number, amounting in the aggregate to $20,000, and which constituted a vendor's lien upon 200 acres of land. A sufficient narrative of the issues as disclosed by the record in this case suggests the theory of Fuqua, the intervener, of a copartnership in writing, as well as supplemented by oral understanding for the purpose of dealing in cattle, by the terms of which Fuqua was to furnish the money and the capital stock, or procure the same to be furnished, for the purpose of purchasing said cattle, and Rush was to contribute his labor in taking care of the same and to furnish pasturage and forage for their maintenance; any additional moneys for the purpose of purchasing additional feed necessary for the maintenance of said cattle was to be furnished by the partnership, all of which was without interest; the profits over and above the capital stock contributed by Fuqua, exclusive of the interest upon the money, which was to be free to the said Rush, were to be equally divided by the partnerships. The defendant, Rush, appellant in this court, contends that as to the cattle and land transaction, the latter more fully discussed in a subsequent part of this opinion, no partnership existed between them and resisted an accounting asserted by the intervener, Fuqua, principally upon that ground, as well as upon the proposition that if a partnership did exist as to either transaction, it having been contemplated that the money, for the purpose of financing each of the enterprises, was to be procured from the First National Bank by Mr. Fuqua, who was at all the times indicated herein the president of the bank, the contracts of partnership were void on account of the alleged inconsistent positions assumed by Fuqua. The trial court, upon the development of the case, peremptorily instructed a verdict in favor of intervener, Fuqua, against Rush, for a certain amount, in favor of the plaintiff bank against Fuqua for a certain amount, based upon certain interest charges and a balance upon the $12,000 note. The verdict against Rush in favor of intervener, Fuqua, was based upon an adjustment of the partnership accounts between them for ascertained profits. The evidence shows that appellant, Rush, both as to the land and the cattle transactions, drew upon the appellee bank by personal checks, and the account against him upon segregation indicates a large personal overdraft, disconnected however, from said land and cattle transactions.

The appellant Rush, assigned error, challenging the correctness of the following portion of the instructed verdict: "We therefore find for the plaintiff bank against the defendant, J. W. Rush, in the sum of $10,890.36, with foreclosure of the Gid Jowell notes as first lien, and we also find in favor of the intervener, W. H. Fuqua, against the defendant, J. W. Rush, for $11,957.59, to be satisfied out of the Gid Jowell notes, except the sum of $2,881.25, for which we find for intervener against defendant absolutely, with foreclosure on said notes, subject to prior lien of plaintiff"—and by the third proposition under this assignment appellant assails the particular part of the portion of the instructed verdict indicated above against the defendant Rush for the foreclosure of the lien on the Gid Jowell notes to pay the amount ($10,890.36) "on open account (as shown in preceding proposition) for the reason that there was no testimony that said notes had been hypothecated as security for said account but only as security for the note sued upon." The instructed verdict upon the face of it, after deducting the deposit of $2,500 of November 8, 1906, is clearly upon the personal account of Rush, which the auditor's report shows is disconnected from expenditures with reference to the land and cattle transaction. The appellee attempts to escape this by saying that because the court figured the whole amount of the note and rendered judgment against Fuqua for a balance upon said note, after deducting the sum of $10,890.36, represented by open account, and because the judgment for this amount of $10,890.36 being the amount remaining after deducting the judgment rendered against Fuqua, and being the same amount in the note after the deduction is made from the whole amount of the note, it is in reality a verdict and judgment upon the note, and, if so, the foreclosure of the pledgee's lien upon the Gid Jowell notes is proper. At the time the note was executed, it was secured by deed of trust upon a section of land regarded by the court as partnership property and 440 acres out of the section owned by Mrs. Rush. This deed of trust was released as against the alleged partnership section, and the Gid Jowell vendor lien notes represented the purchase price of a part of said land, executed to Rush and indorsed by Rush to Fuqua or the bank in lieu of the former lien upon the land. Discarding the reasoning in a circle, which might be indulged in, by treating the amount as to the open account as being equal to the same amount in the note, the judgment and verdict is for an amount which would bear interest at 6 per cent., and the features of the express contract itself (that is, the note), while the amounts may be the same, is not adjudged by the court or found by the jury, except as an incident to the real amount found and decreed. The note is an express contract, and the open account is an implied one. The bank alleged the lien against the Gid Jowell notes as security to the express obligation, not as security to a personal overdraft. If you balance $10,890.36, the amount evidenced by an implied contract, against the same amount in an express contract and obtain judgment for that amount, which amount did you obtain judgment upon? Appellee says it is form and not substance to say that the judgment is not upon the note; the reply in equation to that is that it may be form and not substance to say that the judgment is upon the note and not upon the account. The instructed verdict shows that the court peremptorily instructed for the amount of the defendant's personal overdrafts, with 6 per cent. interest on each item from its date, after deducting the deposit of $2,500, and directed the jury to find for the plaintiff bank against the defendant, J. W. Rush, in the sum of this $10,890.36, with foreclosure on said notes as first lien. This judgment should never have been rendered in this shape. Appellee may answer, "What difference does it make?" It may make considerable difference. This was resolved into an equitable proceeding in the nature of an accounting, and upon the very face of the verdict, even assuming that the amount of the open account and the amount in this note is the same, the verdict is split as to the amounts, even if evidenced by the note; part is a judgment against Fuqua and part against Rush. It does not make any difference how much you figure results; this is not proper. On account of the security, if Fuqua is obligated upon the note, judgment rendered against him in part and judgment rendered against Rush for an amount in the note may not work out equitably in all the ramifications of this case, and judgment should have been rendered against both as a whole.

There is no complaint in the brief against the assignment of error raising this question, and upon the decisions of the Supreme Court, where a verdict or a charge embodies several matters which are assigned as error and there is an appropriate proposition singling out a particular matter, and complaining of the same, from said verdict or charge, it is sufficient to raise the question.

There could have been a hypercritical objection made to the statement, which is not however made, that the statement under this proposition does not purport to show the finding of the jury was upon an open account and upon which the judgment was rendered. However, the statement under the immediate preceding proposition referred to by the particular proposition we sustain does purport to show it by pointing to the record.

The appellant suggests fundamental error in a supplemental brief, broadening the question that the foreclosure upon the Gid Jowell notes as security for the open account is neither pleaded nor proved. A careful reading of the pleadings we believe sustains this statement, and under the decision of Bank v. Weems, 69 Tex. 501, there is no banker's lien asserted by said pleading; and under the case of Bean v. Lyons, 47 Tex. 19, we are inclined to think that, if it were attempted to be justified on the ground of the foreclosure of a banker's lien, the lack of pleading in this respect is fundamental error. However, we are clear that the error is assigned, as indicated in the discussion under the ninth assignment, as a matter of foreclosure of the pledgee's lien to secure the open...