Ruthart v. First State Bank, Tulia, Texas

• Decision Date: 22 July 1968
• Docket Number: No. 7796,7796
• Parties: Garland E. RUTHART, Appellant, v. FIRST STATE BANK, TULIA, TEXAS, Appellee. . Amarillo
• Court: Texas Court of Appeals

Page 366

431 S.W.2d 366

Garland E. RUTHART, Appellant, v. FIRST STATE BANK, TULIA, TEXAS, Appellee.

No. 7796.

Court of Civil Appeals of Texas.

Amarillo.

July 22, 1968.

Rehearing Denied Aug. 26, 1968.

Sanders, Scott, Saunders, Brian & Humphrey, C. J. Humphrey, Amarillo, of counsel, for appellant.

Morehead, Sharp, Boyd & Tisdel, Joe Sharp, Plainview, of counsel, for appellee.

DENTON, Chief Justice.

This is a suit to recover on a promissory note executed by Garland E. Ruthart payable to the First State Bank, Tulia, Texas. Both parties filed motions for summary judgment. The trial court granted the bank's motion for summary judgment against the defendant below who has timely perfected this appeal.

From the pleadings, affidavits and stipulations it is uncontradicted the defendant below, Garland E. Ruthart, an employee of R.A.R., Inc., executed a promissory note in the amount of $3,766.68 payable in 36 monthly installments to First State Bank, Tulia, Texas on April 14, 1966. The face amount of the note included principal, interest and the premium on a credit life insurance policy on the life of Ruthart with the bank being the beneficiary. The bank upon the execution of the note delivered a $3,000.00 cashier's check to Ruthart payable to R.A.R., Inc. Ruthart then delivered the cashier's check to an officer of the corporation who simultaneously issued Ruthart 150 shares of the corporation's common stock. Ruthart then assigned this stock to the bank as collateral for the loan. R.A.R., Inc. cashed the check and received the proceeds thereof. All these transactions took place in the office of the appellee bank at one meeting between appellant, R.A.R., Inc. officers and officers of the bank. Some 14 other employees of R.A.R., Inc. entered into similar transactions at the same meeting, and acquired various amounts of stock of the corporation. Demand was made upon appellant's note after he became delinquent after paying three monthly installments.

Appellant first complains the trial court erred in overruling his motion to consolidate eleven other cases filed by appellee against other employees of R.A.R., Inc.; and its refusal to make the officers and directors of R.A.R., Inc third party defendants. It is well settled that the Rules of Civil Procedure grant the trial court broad discretion in the matter of consolidation of causes. Rule 174, Texas Rules of Civil Procedure and Hamilton v. Hamilton, 154 Tex. 511, 280 S.W.2d 588 and Wilson v. Ammann & Jordan (Tex.Civ.App.) 163 S.W.2d 660 (error dism'd) and McKinney v. Gaiser (Tex.Civ.App.) 366 S.W.2d 268 (ref'd n.r.e.). The trial court's action in such procedural matters will not be disturbed on appeal except for abuse of discretion, Womack v. Berry, 156 Tex. 44, 291 S.W.2d 677 and Rose v. Baker, 143 Tex. 202, 183 S.W.2d 438. Each suit sought to be consolidated with the instant case was a separate and distinct cause of action against different defendants. The fact that all the causes relate to promissory notes is not persuasive. Although the pleadings of the other cases are not a part of this record, it is apparent different questions of fact and law are quite likely to be presented. A denial of the motion to consolidate was clearly not an abuse of discretion.

Appellant sought under Rule 38, T.R.C.P. to make the officers and directors of R.A.R., Inc. third party defendants. As in other such procedural matters the trial court is clothed with considerable discretionary authority. Hamilton v. Hamilton, supra; Nutter v. Dearing (Tex.Civ.App.) 400 S.W.2d 346 (error ref'd n.r.e., 402 S.W.2d 889). Appellant argues the R.A.R., Inc. officers who made the financial arrangements for the several note makers with the bank, would be liable to each note maker in the event of recovery by the bank against them; and that the proposed third party defendants should be impleaded for their participation in the alleged fraudulent transaction. This is simply a suit on a promissory note, admittedly executed by appellant who concedes he received the $3,000 .00 for which he executed the note. The fact such consideration was paid directly over to R.A.R., Inc. whose stock was simultaneously transferred to appellant and was given as collateral, is no defense. Kliesing v. Neuhaus (Tex.Civ.App.) 265 S.W.2d 215. The alleged cause of action of appellee against appellant is separate and distinct from that alleged by appellant against the proposed third party defendants. Nor can it be said appellant's alleged cause of action against the proposed third party defendants would constitute a defense to appellee's suit on the promissory note executed by appellant. Appellant's contention is without merit.

Appellant next contends the note...