South Texas Nat. Bank v. Lagrange Oil-Mill Co.

• Decision Date: 24 March 1897
• Parties: SOUTH TEXAS NAT. BANK v. LAGRANGE OIL-MILL CO. et al.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

40 S.W. 328

SOUTH TEXAS NAT. BANK v. LAGRANGE OIL-MILL CO. et al.¹

Court of Civil Appeals of Texas.

March 24, 1897.

Appeal from district court, Harris county; A. C. Allen, Special Judge.

Action by the South Texas National Bank against the Lagrange Oil-Mill Company and White & Bradshaw. From a judgment for plaintiff against the last-named defendant, and against defendant company on its plea in reconvention, plaintiff appeals, and said company assigns cross errors. Reformed.

O. T. Holt, for appellant. Brown & Lane, for appellee.

PLEASANTS, J.

This suit was instituted by the appellant to recover a debt alleged to be due from appellees to appellant upon the following instrument in writing, to wit:

"$5,000.00. Houston, Texas, July 23rd, 1895. Nov. 23rd, 1895, after date, we, or either of us, jointly and severally, promise to pay to the South Texas National Bank or order, at the banking house of the said South Texas National Bank, at Houston, Texas, five thousand dollars, for value received, with interest at the rate of ten per cent. per annum from maturity until paid, and ten per cent. additional for attorney's fees if placed in the hands of a lawyer for collection. White & Bradshaw.

"Having executed a promissory note, dated at Houston, Texas, on the 23rd day of July, 1895, for $5,000, payable to the South Texas National Bank or order 120 days after date, with interest after maturity at the rate of 10 per cent. per annum, and 10 per cent. additional for attorney's fees if placed in the hands of a lawyer for collection, and being desirous of securing the same, and all my (or our) other liabilities to said bank now existing, or which may hereafter arise, I, we, or either of us, jointly and severally, do hereby pledge to said bank and its assigns, as collateral security for said note and other liabilities, seventy-nine shares of the capital stock, Lagrange Oil-Mill Company, certificate No. 18, for 9 shares, and 11, 12, 13, 14, 15, 16, and 17, for 10 shares each; three shares, capital stock, Lagrange Oil-Mill Company, certificate No. 1, 7, and 8, for $250.00 each, and the following notes, viz.: Richards & Company, $1,800; A. T. Bradshaw, $1,500; J. W. White, $1,500,— all herewith attached, and agree to give additional security to keep up the present margin whenever the market value of the above collaterals should decline, and on notification of the holder of this liability to me (or us), within twenty-four hours after receipt of such notice. In default of payment of said note or other liability at maturity, or in default of my (or we) giving such additional security when so notified, I, we, or either of us, jointly and severally, do hereby authorize said bank, its officers, or the holder of such liability, to sell or cause to be sold said collaterals at public or private sale, at the option of the holder, with or without notice to me (or us) or the public, at the South Texas National Bank or elsewhere, and to apply the proceeds first to payment of expenses incurred by said sale, and next to the discharge in part or whole of any of my (or our) liabilities hereby secured; the holder of such liability to have the option of application. Any surplus left shall be paid to me (or us). If the proceeds of such sale are not sufficient to pay all my (or our) liabilities hereby secured, I, we, or either of us, jointly and severally, agree to pay the balance on demand. In case of a sale of said collaterals, the said South Texas National Bank, or the holder of any liability hereby secured, may become the purchaser thereof without any right of redemption on my (or our) part. White & Bradshaw."

That on the back of said note is written, "Lagrange Oil-Mill Co. A. T. Bradshaw, V. Prest."

The petition alleged that the defendant the Lagrange Oil-Mill Company was a corporation duly incorporated under the laws of Texas, and that its place of business was in the city of Lagrange, county of Fayette, and state of Texas, and that its secretary was R. T. Bradshaw, and that its vice president was A. T. Bradshaw. The petition charged that by virtue of the execution of the foregoing instrument the defendants were each, jointly and severally, liable for the sums sued for; and it further averred that the defendants had disposed of their property with the intent to defraud their creditors. It prayed that an attachment be levied on a sufficient amount of defendant's property to satisfy the plaintiff's debt and costs, and for foreclosure of the lien on all of the property levied on by the writ of attachment. The attachment was issued and levied on the real property of the defendant the Lagrange Oil-Mill Company, and on much of its personal property; and the latter, pending the litigation, was sold, under order of the court, for cash, and the proceeds of the sale were held to abide the result of the suit. The defendants White & Bradshaw made default, but the Lagrange Oil-Mill Company appeared and answered by general demurrer and general denial, and specially denied that it executed the instrument sued on, and alleged that it was a private corporation, and had no authority or power to indorse said instrument; that the purposes for which said company was incorporated were to gin and bale cotton, and to manufacture cotton-seed oil, oil cake, and other articles usually incident to the operation of cotton seed oil mills, and for these purposes, and none others, was it incorporated; that at the date of the execution of the instrument sued on (and for a long time prior thereto) the said White & Bradshaw were partners doing business in the city of Lagrange under the firm name of White & Bradshaw, and that at said date the said...