Taylor v. Deese

• Decision Date: 25 February 1929
• Docket Number: (No. 179.)
• Citation: 14 S.W.2d 255
• Parties: TAYLOR, Bank Com'r, v. DEESE et al.
• Court: Arkansas Supreme Court

14 S.W.2d 255

TAYLOR, Bank Com'r, v. DEESE et al.

(No. 179.)

Supreme Court of Arkansas.

February 25, 1929.

Rehearing Denied March 25, 1929.

Appeal from Circuit Court, Lonoke County; O. E. Williams, Special Judge.

Suit by W. E. Taylor, Bank Commissioner, against C. F. Deese and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Appellant sued appellees to recover the amount of $3,459.80, alleged to be due upon a promissory note. Appellees admitted signing the note sued on, but denied any liability on the ground that they had signed the note as sureties on certain conditions on the part of the payee of the note, which had not been fulfilled. The note was introduced in evidence, and it was also shown that the Bank of Central Arkansas, which was the payee of the note, had become insolvent, and that W. E. Taylor, state bank commissioner, was in charge of its affairs.

W. H. Holloway, one of the appellees, was the first witness for them. According to his testimony he signed the note as surety for Charles F. Deese, in the presence of W. T. Couch, who was the cashier of the Bank of Central Arkansas, the payee in the note. The note was for $3,000, and was a loan to enable Deese to purchase 80 acres of land in Lonoke county, Ark. In response to a question as to what conditions and circumstances he signed the note, the witness answered as follows:

"I signed the note. I went to Couch and told him that Charlie had come to me and wanted me to sign the note for him to buy 80 acres of land out there, and I told him that he agreed to put that up as security and his home place, and I told him I would sign the note under those conditions, for him to take a mortgage on that land to secure him; that I couldn't pay it, but for him to take that security so as to take care of me in case I was called on to pay."

The witness was the first to sign the note, and Couch understood that the note was to be signed by W. J. Corpier, Luther Hester, and J. R. Deese, under the same conditions. These parties testified that they signed the note under practically the same conditions as testified to by W. H. Holloway. All of the appellees are related in some way to C. F. Deese. Couch did not take a mortgage on the land from C. F. Deese, and appellees never received any notice that the mortgage had not been given until they were notified by the attorney for the state bank commissioners in January, 1927. They never received any notice from the bank for payment of the note that they had signed.

W. T. Couch was a witness for appellant. According to his testimony, appellees signed the note as sureties for C. F. Deese without any conditions whatever. They became absolutely bound as sureties on the note, and there were no promises or conditions of any kind made by him to them to induce them to sign the note.

There was a verdict and judgment in favor of appellees, and the case is here on appeal.

Trimble & Trimble, of Lonoke, for appellant.

Reed & Beard, of Lonoke, and C. V. Holloway, of England, Ark., for appellees.

HART, C. J. (after stating the facts as above).

It is earnestly insisted by counsel for appellant that the judgment must be reversed because the circuit court erred in admitting parol evidence that appellees signed the note to the bank under the promises of its cashier that the note would not become effective until the bank took a mortgage from C. F. Deese, the principal in the note, upon a certain tract of land, and that this condition was never performed by the bank. It is contended that the admission of this testimony violated the well-known rule that parol evidence is not admissible when it tends to vary or contradict the legal effect of a written instrument. According to the parol testimony, the note sued on was not to become effective until the bank took a mortgage on 80 acres of land from C. F. Deese, the principal in the note. In other words, the note was not effective until this alleged condition was complied with. This made it a condition precedent to the final completion of the contract between the parties. The testimony of appellees brings the case squarely within the principles of law announced in Halliburton v. Cannon, 160 Ark. 428, 254 S. W. 687, where the principles of...