Seymour Opera-House Co. v. Thurston

• Decision Date: 26 March 1898
• Citation: 45 S.W. 815
• Parties: SEYMOUR OPERA-HOUSE CO. et al. v. THURSTON.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

45 S.W. 815

SEYMOUR OPERA-HOUSE CO. et al. v. THURSTON.¹

Court of Civil Appeals of Texas.

March 26, 1898.

Appeal from district court, Baylor county; R. J. Browning, Judge.

Suit by Cornelia R. Thurston against the Seymour Opera-House Company and others. Judgment for plaintiff, and defendants appeal. Affirmed.

J. H. Glasgow, Stuart & Bell, Davis & Garnett, and L. W. Dalton, for appellants. D. L. Kenan, for appellee.

HUNTER, J.

This suit was brought in the district court of Baylor county, February 19, 1896, by the appellee, Cornelia R. Thurston, as owner and holder, against the Seymour Opera-House Company as maker, the Panhandle Loan & Trust Company as indorser, and S. Suttlemeyer, L. T. Wilson, P. Toberman, Joe Woodyear, J. C. Wooldridge, D. D. Wall, and J. T. Montgomery as guarantors, in which the appellee sought to recover judgment for the full amount of a promissory note for $4,000, with interest and attorney's fees, and to foreclose a mortgage upon certain property in the town of Seymour known as the "Seymour Opera House." The suit was, however, dismissed as to defendant L. T. Wilson because not served with citation. Wooldridge & Bro., a partnership composed of R. Wooldridge and J. C. Wooldridge, intervened in the cause on the 12th day of May, 1897, claiming a material man's lien for $3,066.80 for lumber and other material sold by said firm to said Seymour Opera-House Company, and used in the construction of the opera house upon said land, which lien, it was alleged, was prior and superior to said mortgage lien. The defendant J. C. Wooldridge admitted the execution of the note and mortgage sued on, and pleaded that the note was usurious, because it was given in consideration of the loan of money, and that interest at a higher rate than 12 per cent. per annum was contracted for; and that, after the plaintiff's right of action had accrued, he required her, by notice in writing, to forthwith institute suit upon said note, which she failed to do at either the first or second term of court thereafter, as provided by statute. The defendants Montgomery and the Seymour Opera-House Company, among other things, pleaded that the mortgage sued on was prior in right to the lien of Wooldridge & Bro. for material, for the reason that said J. C. Wooldridge was a stockholder and director in said Seymour Opera-House Company when said mortgage was executed, and agreed that the mortgage should be prior in right, and waived his lien in favor of said mortgage. The cause was tried July 3, 1897, before a jury, resulting in a verdict and judgment in favor of the plaintiff against all of the defendants for the full amount of the note, with interest, and foreclosing the mortgage lien, and adjudging it to be prior to the lien of said Wooldridge & Bro. for material. From this judgment the defendant J. C. Wooldridge and the interveners Wooldridge & Bro. have prosecuted this appeal.

The record discloses the following facts: On August 18, 1891, the Seymour Opera-House Company executed its note and mortgage, payable to the order of the Panhandle Loan & Trust Co., for $4,000, due July 1, 1896, without grace, dated at Wichita Falls, Tex., and payable there, with current rate of exchange on New York, bearing interest from its date until maturity at the rate of 8 per cent. per annum, and after maturity at the rate of 12 per cent. per annum; the interest from date until maturity payable semiannually on the 1st days of January and July of each year, according to the terms of ten interest coupon notes thereto annexed, nine of which were for $160 each and one for $118.37, each bearing interest at the rate of 12 per cent. per annum after maturity, payable to the Panhandle Loan & Trust Company, or order, and indorsed by it in blank. The principal note above described provided for 12 per cent. on the sum due as attorney's fees, in case it should be placed in the hands of an attorney for collection. It was further provided that, if any one of said coupons should remain unpaid for 10 days after maturity, then, at the option of the legal holder of said note, the whole principal and interest then accrued should at once become due and payable, and the holder could proceed to collect the same by foreclosure suit. The note was indorsed by the Panhandle Loan & Trust Company to Mrs. Cornelia R. Thurston. There was indorsed upon the note, before delivery, the following guaranty: "We guaranty prompt payment of the principal and interest of the within note, and waive demand, notice, and protest;" signed by the defendants Woodyear, Wooldridge, Wall, Wilson, Toberman, Montgomery, and Suttlemeyer. All the interest coupons maturing prior to July 1, 1895, were paid, but because this one remained unpaid for 10 days after maturity the plaintiff declared the entire debt to be due on July 15, 1895, and filed this suit on the $4,000 bond and the said coupon note, claiming interest thereon at 12 per cent. from the day the notes were declared due, and also 12 per cent. on the whole amount due for attorney's fees. The opera-house company also gave a mortgage at the time the notes were given on their lots and opera house, to secure the payment of the debt, making John G. James trustee therein, and providing that the holder of the note should have the power to declare the debt due, and foreclose the mortgage, if the maker should fail to keep the property insured. From about March, 1893, the property was not kept insured. When these notes and mortgage were executed it was known to all parties thereto that the Panhandle Loan & Trust Company had not the money they called for, but it was understood that the president of said company, John G. James, was to sell the bond, and thus raise the funds desired. For this service it was agreed that he should retain a cash commission of $200, and the opera-house company also executed to the Panhandle Loan & Trust Company a note of $400 in consideration of the loan of the money, due in installments of $100, payable each six months thereafter, beginning on January 1, 1892. On September 18, 1891, James, through a broker, sold the bond to the plaintiff in Providence, R. I., and received the sum of $4,000 therefor, and on receipt of the money at Wichita Falls on September 21, 1891, he retained the $200 commission as agreed on, and also $16 for interest from August 1st to the date of the bond, August 18, 1891; also $5.10, to cover the expenses of a trip on September 23, 1891; and paid to the opera-house company the balance, as follows: On September 24, 1891, $500; October 14, 1891, $1,000; November 10, 1891, $1,000; December 14, 1891, $1,000; December 29, 1891, $200; February 10, 1892, $78.90. These sums of money were paid over to the opera-house company by the Panhandle Loan & Trust Company as the opera-house building progressed and as the opera-house company called for them, the whole amount being deposited in a Wichita Falls bank to the credit of the Panhandle Loan & Trust Company. There was never any agreement that the $16 for interest from August 1st to August 18th should be charged or retained for the loan of the money. It seems that James, of his own motion, deducted this amount, and furnished a statement of account to that effect, and it was acquiesced in by the opera-house company, or at least no objection, it seems, was made to his retaining it. He had no right to do it, either by contract or otherwise, so far as the record discloses. The defendant Wooldridge never knew that the note had been transferred, and believed that the Panhandle Loan & Trust Company was the owner thereof, and, the opera-house company failing to keep the mortgaged property insured as required, he, on December 15, 1893, gave John G. James notice in writing that he required suit to be brought immediately on the note. James paid no attention to the notice, and did not notify the plaintiff that he had received such notice. No suit was brought on the note until this one was filed in February, 1896. James was not the agent of plaintiff, and had no authority to receive such notice, and was under no obligation to report such notice to the plaintiff, and had no power to act in the premises. He was trustee in the mortgage, with power of sale in case of default, and in case plaintiff should request him to sell. Wooldridge & Bro., of Gainesville, Tex., a firm composed of J. C. Wooldridge and R. Wooldridge, furnished lumber and material to the opera-house company to the value of $3,066.80, which was used in the construction of said opera-house building, which had never been paid for, and for which they have a material man's lien on the said building and the lots upon which it is situated. J. C. Wooldridge was the business manager of the firm at Seymour, Tex., and was a stockholder and director of the opera-house company, and there is evidence tending to prove that he agreed, before the defendants Montgomery and Woodyear guarantied the payment of said $4,000...