Second Nat. Bank v. Ford

• Decision Date: 25 January 1939
• Docket Number: No. 2198-7244.,2198-7244.
• Parties: SECOND NAT. BANK et al. v. FORD.
• Court: Texas Supreme Court

123 S.W.2d 867

SECOND NAT. BANK et al. v. FORD.

No. 2198-7244.

Commission of Appeals of Texas, Section A.

January 25, 1939.

Error to Court of Civil Appeals of First Supreme Judicial District.

Action by the Second National Bank and another against Robert F. Ford, administrator of the estate of Denton W. Cooley, deceased, to establish a claim on notes signed by Denton W. Cooley, deceased, as trustee, and to foreclose the lien securing the notes. To review a judgment of the Court of Civil Appeals, 100 S.W.2d 1112, reversing a judgment for plaintiffs and rendering a judgment for defendant, the plaintiffs bring error.

Judgment of the Court of Civil Appeals reversed, and trial court's judgment reformed and, as reformed, affirmed.

Conrad J. Landram, of Houston, for plaintiffs in error.

E. T. Chew, of Houston, for defendant in error.

HICKMAN, Commissioner.

Robert F. Ford is administrator of the estate of Denton W. Cooley, deceased. The Second National Bank, of Houston, and J. H. Rafferty presented a claim to the administrator based upon three notes, each in the principal sum of $2500, signed "Denton W. Cooley, trustee," payable to the order of A. C. Bayless and indorsed by him to Rafferty without recourse. The notes were secured by a deed of trust executed by Cooley as trustee upon certain real estate situated in Harris County, theretofore conveyed to him as trustee. The notes and lien were assigned by Rafferty to the bank as security for an indebtedness owing by the former to the latter in the sum of $4500. The claim was in behalf of the bank for that amount and in behalf of Rafferty for the balance, but in his affidavit filed in support of the claim Rafferty expressly recognized the right of the bank to collect the entire claim and thereafter account to him. The administrator rejected the claim, the reason assigned for rejecting it being "that under no circumstances does it constitute a valid claim against this estate or against the property described therein." In due time the bank and Rafferty instituted this suit in the district court for the establishment of the claim and the foreclosure of the lien securing same. A jury was demanded and upon its answers to special issues judgment was rendered against the administrator establishing the claim as a just claim and debt against the estate of Denton W. Cooley, deceased, and decreeing that, as between the bank and Rafferty, the former was entitled to collect and receive the full amount of the indebtedness, it not being necessary to adjust the respective interests of the plaintiffs. The judgment further decreed that the notes were secured by a valid and subsisting lien upon the real estate described in the petition and ordered a foreclosure of same. It was decreed that an order of sale issue directing the seizure and sale of the land as under execution in satisfaction of the judgment. The officer executing the writ was directed to apply the proceeds of the sale to the costs of court, the costs of executing the writ and the balance of the proceeds of the sale to the bank to the amount required for the satisfaction of its judgment. It was further decreed that, if the proceeds of such sale should be insufficient to satisfy the judgment, no general execution should issue, but that any deficiency on said judgment should be paid in due course of administration of the estate of Denton W. Cooley, deceased, by the probate court of Harris county, to which court the judgment should be certified for that purpose, and for observance and execution in accordance with law. The administrator appealed to the Court of Civil Appeals and that court reversed the judgment of the trial court in its entirety and rendered judgment that the claimants take nothing. 100 S.W. 2d 1112.

Only three special issues were submitted to the jury, which issues, together with the answers thereto, were as follows:

"Special Issue No. 1. Do you find from a preponderance of the evidence that the plaintiff, Jack Rafferty, gave or paid to Denton W. Cooley, a valuable consideration for the notes herein sued upon? Answer, We do."

"Special Issue No. 2. Do you find from a preponderance of the evidence that the notes in controversy herein were endorsed by A. C. Bayless to Jack Rafferty at the request of Denton W. Cooley? Answer, We do."

"Special Issue No. 3. Do you find from a preponderance of the evidence that it was the intention of the plaintiff, Jack Rafferty, and the deceased, Denton W. Cooley, in having the notes in controversy herein endorsed by A. C. Bayless to Jack Rafferty, that the said Jack Rafferty was to take said notes and sell the same and deliver the proceeds to Denton W. Cooley? Answer, We do not."

As we interpret the opinion of the Court of Civil Appeals the holding of that court was that the evidence conclusively established that the property was trust property standing in the name of Cooley as trustee; that the beneficiaries of the trust were not disclosed; that it...