Seaman v. Seaman

• Decision Date: 06 March 1968
• Docket Number: No. B--427,B--427
• Citation: 425 S.W.2d 339
• Parties: Josephine SEAMAN, Petitioner, v. Margaret SEAMAN, Respondent.
• Court: Texas Supreme Court

Page 339

425 S.W.2d 339

Josephine SEAMAN, Petitioner, v. Margaret SEAMAN, Respondent.

No. B--427.

Supreme Court of Texas.

March 6, 1968.

Rehearing Denied April 3, 1968.

W. G. Perkin, Pharr, for petitioner.

Rankin, Kern, Martinez & Van Wie, Stonewall Van Wie, III, McAllen, for respondent.

CALVERT, Chief Justice.

This is a suit on a promissory note brought by Margaret Seaman in her own right and as the sole heir of her deceased husband, Jonathan Seaman. The defendant is Josephine Seaman individually and in her capacity as independent executrix of the estate of her deceased husband, Irving Seaman, Jonathan's brother. The case was tried without a jury and the trial court entered judgment for the plaintiff. Findings of fact and conclusions of law were neither requested nor filed. The court of civil appeals affirmed, 417 S.W.2d 86. We affirm.

Sometime in 1950, 1951, or 1952, Josephine and Irving Seaman signed a printed form promissory note for $10,000 payable to Margaret and Jonathan Seaman. The record reflects that the transaction was primarily one between the brothers. The consideration for the note was money lent by Jonathan to Irving and used by him in purchasing the motel in Pharr, Texas, which he and Josephine were managing. Jonathan died July 5, 1963. Irving died June 26, 1964. This suit was filed October 26, 1964.

The note was a demand note, but it was left incomplete at two places where dates were ultimately typed into formal blanks at Jonathan's request during his last illness in 1963. The evidence is conflicting whether a number of other formal blanks were also left incomplete, but the implied findings of the trial court are that they were not and there is evidence to support the findings. The date, 'May 6, 1963,' was typed into both blanks, one for the date of the instrument and the other the date from which interest would accrue.

Plaintiff's original petition was simply a suit on the note as it appeared in its completed form. Defendant's answer included a plea of limitations, asserting that the note was a demand note from the date it was made and that no authority had been given to fill up the blanks. The answer also included a plea of discharge by virtue of a material alteration of the note. Because the transaction was entered into before the effective date of the Texas Uniform Commercial Code, the issues presented are governed by the Texas Negotiable Instruments Act, Articles 5932--5948. ¹ See 2 Tex.Laws 1965, ch. 721 § 10--101, at 179.

Under the Negotiable Instruments Act, the filling up of a formal blank in a note does not constitute a material alteration and does not avoid the instrument within the meaning of Article 5939 §§ 124 and 125. The effect of filling up the formal blanks in a note is governed by Article 5932 § 14. The seeming conflict between filling up formal blanks and material alteration, i.e., between Article 5932 § 14 and Article 5939 §§ 124 and 125, was resolved in Republic National Bank of Dallas v. Strealy, 163 Tex. 36, 350 S.W.2d 914 (1961). See also Birtton, Bills and Notes § 282, at 662 (2d ed. 1961).

Section 14 provided:

'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. * * * 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.' (Emphasis added.)

The statute provided a conclusive presumption in favor of a holder in due course that any filling up of incompleted blanks had been done in accordance with authority and within a reasonable time. It provided a rebuttable presumption in favor of any other holder that the instrument had been filled up in accordance with authority. Since the note was incomplete when the plaintiff and her husband took it, and she does not have the status of a holder in due course and is not entitled to the conclusive presumption in favor of the validity of the note as completed, she had the burden of proving that the note was filled up in accordance with authority. She had the burden of proving, in addition, that it was filled up within a reasonable time. The trial court impliedly found these facts in her favor. When findings of fact and conclusions of law are not requested or filed, the judgment of the trial court must be affirmed if it can be upheld on any legal theory that finds support in the evidence. Bishop v. Bishop, 359 S.W.2d 869, 871 (Tex.Sup.1...