Smith v. Wilson

Decision Date25 October 1892
CourtTexas Court of Appeals
PartiesSMITH <I>et al.</I> v. WILSON <I>et al.</I>

Appeal from district court, Cooke county; C. B. STUART, Special Judge.

Action by J. W. Wilson and the Boatman Savings Bank, for the use of F. M. Daugherty, against J. P. Smith, J. D. Reed, and E. G. Thurman, to revive two certain judgments against defendants, — one in favor of the Boatman Savings Bank, and the other in favor of J. W. Wilson, — which judgments were rendered in the district court of Cooke county in the year 1885, in the aggregate sum of about $16,000. From a judgment reviving such judgment to the extent of $3,257.72, defendants appeal. Reversed.

The other facts fully appear from the following statement by STEPHENS, J.:

This appeal is prosecuted by J. P. Smith, J. D. Reed, and E. G. Thurman from a verdict and judgment rendered in the district court of Cooke county on the 22d day of November, 1889, in favor of F. M. Daugherty, in the sum of $3,257.72, reviving to that extent, and for the use and benefit of said Daugherty, two certain judgments against appellants, the one in favor of the Boatman Savings Bank, and the other in favor of J. W. Wilson, — which judgments, so revived, were rendered in the district court of Cooke county in the year 1885, in the aggregate sum of about $16,000.

Conclusions of fact: In the year 1885 the Boatman Savings Bank recovered a judgment in the district court of Cooke county against J. W. Dobbs & Co. and Fare, Murphy & Henderson, as principals, and the Stone Cattle & Pasture Company, R. S. Rollins, and others, as indorsers, in the sum of twenty thousand and some hundred dollars. Fare, Murphy & Henderson delivered to said Rollins, in order to protect said cattle company and Rollins and others, as indorsers, two certain notes executed by appellants, upon which the judgment sought to be revived by this suit was rendered. These notes were to be collected, and the proceeds applied to the payment of said original judgment in favor of the Boatman Savings Bank, and were afterwards placed in judgment by the attorneys for said Boatman Savings Bank, under the directions of said Rollins, — the one in the name of said bank, and the other, for convenience, in the name of J. W. Wilson, who was president of said cattle company. After these judgments were all obtained, in the latter part of the year 1885, said cattle company became insolvent. On the 2d day of March, 1886, said cattle company, through J. W. Wilson, its president, assigned the two judgments sought to be revived in this suit to F. M. Daugherty, who was president of the First National Bank of Gainesville. It is alleged in the pleadings, both of appellants and appellees, that at this date said judgments were owned by said cattle company, though subject to the rights of said Boatman Savings Bank. Under said original judgment in favor of the Boatman Savings Bank, in the months of February, March, and June, 1886, certain lands of said cattle company were sold at execution sale, and the proceeds applied as credits upon said original judgment. The sales in February and March reduced the amount due on the same to about $8,000, and the June sale to about $6,000. The collateral judgments were allowed to become dormant. When the cattle company became insolvent, it was indebted to the First National Bank of Gainesville, by note, in the sum of about $18,000, which was secured by a mortgage on cattle to the extent of about $16,000. In the month of January or February, 1886, appellant Smith undertook to procure at a discount debts against the insolvent cattle company in amount sufficient to offset the two collateral judgments, and engaged one Hulen, a director in the cattle company, to assist him, or to procure them for him, agreeing to pay him one half of what Smith might save in offsetting said judgment. He succeeded in obtaining for Smith four notes against the cattle company, — one in February, 1880, called the "McAdams Note," for about $10,000, less a credit of some $3,000; the other three in May, 1886, called the "McCubbins and Rolls Notes," for less amounts; the purchase being made on the 20th, and the purchase price paid on the 28th of May. The McAdams note and the balance due on the original Boatman Savings Bank judgment were allowed in the court below as offsets, and the other notes rejected. Hulen procured one Sacra, vice president of said cattle company, to assist him in obtaining said notes for Smith, which he did, to the extent of giving information as to where and how to find them, Hulen agreeing to pay him one half the profit or compensation coming to him under the arrangement with Smith. In September, 1886, at the request of Hulen, Smith paid one half of the sum promised Hulen to Sacra; and the proof tended to show that prior to this time Smith had no knowledge of the employment of Sacra by Hulen. The proof failed to show that either Smith or Hulen had actual knowledge of the transfer of the judgments to Daugherty till after the offsets had been acquired, though Sacra did have such knowledge at the time of the transfer. The record discloses that some, if not all, of the notes pleaded as offsets, were placed in the hands of W. O. Davis, Esq., by Smith and Hulen, in February, 1886, and that the McCubbins and Rolls notes were on the 20th day of May, as well as prior thereto, in some way pledged as collateral security to R. S. Rollins, vice president of said First National Bank of Gainesville, and J. M. Lindsay, an officer of the Gainesville National Bank, to secure to said two banks debts due to them, severally. A judgment was obtained in the district court of Cooke county against said cattle company, in favor of R. S. Rollins, on the 22d day of December, 1885, for about $30,000, based upon two certain notes payable to Wilson and Hearne, signed by J. W. Wilson as president of said cattle company, and John H. Stone, secretary, indorsed by Hearne to J. W. Wilson, and by Wilson to Rollins; and said judgment was on said 2d day of March, 1886, assigned by Rollins to Daugherty. On the same day said F. M. Daugherty, through J. H. Carnett, Esq., law partner of W. O. Davis, caused a writ of garnishment to issue against appellants, and, contemporaneously therewith, said Wilson, at the suggestion of said Garnett, made the assignment of said other judgments as above stated. There is much diversity disclosed in the record, among the witnesses, with reference to the ownership, history, use, and purpose of this $30,000 judgment. The record discloses that J. W. Wilson was indebted to Daugherty, individually, in the sum of about $10,000. On the 20th of May, 1886, when the rejected offsets were purchased by Smith, there were present in the office of Davis & Garnett, Mr. Garnett, Smith, Hulen, and Rollins; there being a conflict in the evidence as to whether or not Sacra was there. At this meeting Smith paid balance due on, and obtained assignment of, the original judgment in favor of the Boatman Savings Bank. Nothing was said about the assignment of the collateral judgments against appellants at this meeting, and Smith seems to have been ignorant of that fact, and perhaps, also, Hulen, though the fact was known to Rollins, who was vice president of said First National Bank, and who was released by Smith as indorser on said original judgment, in which matter he appears to have been acting for himself; but, in the matter of the sale of said notes to be used as offsets, he seems to have acted in behalf of said First National Bank, of which he was an officer, though not actively engaged in its service; the money realized from the sale of said notes to Smith being in part paid to said bank by him. He states that Smith, or Hulen in Smith's presence, then and there agreed to pay the balance due on said First National Bank debt, after the cattle mortgaged to it should be applied thereto, — there being an estimated balance of $1,800 or $2,000, — and that he would not have acted as he did, in selling said offsets, but for his promise on Smith's or Hulen's part. Smith and Hulen state that the promise was conditioned upon the Wichita sale reducing the amount due Smith on the original judgment to such an extent as to leave a balance of $1,800 or $2,000 due on the collateral judgments after applying all offsets. It is also disclosed that the first notice that...

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