Tex. Bank & Trust Co. of El Paso v. Cavin

• Decision Date: 01 July 1920
• Docket Number: No. 2364.,2364.
• Citation: 26 N.M. 326,192 P. 365
• Court: New Mexico Supreme Court
• Parties: TEXAS BANK & TRUST CO. OF EL PASO, TEX.,v.CAVIN ET AL.

26 N.M. 326

192 P. 365

TEXAS BANK & TRUST CO. OF EL PASO, TEX.,

v.CAVIN ET AL.

No. 2364.

Supreme Court of New Mexico.

July 1, 1920.Rehearing Denied Oct. 5, 1920.

Syllabus by the Court.

The payee and holder of a joint and several note signed by C. and A., with knowledge that A. signed note to secure or as collateral for another note signed by C., can only recover from A. the amount remaining due on the note of C. for which the joint note was collateral.

The payee and holder of a collateral note, with knowledge that it has been diverted from the purpose for which it was given, cannot hold the accommodation maker on such collateral note liable for any other purpose, or to any greater extent than that for which the accommodation note was given.

The joint and several maker of a promissory note, who pledges it as security for another note signed by him, and for “any and all other indebtedness due by him,” is liable for the note, although the liability of his joint maker is limited to the amount due on the note for which the joint and several note was given as security.

In a suit on a promissory note, where the defendant pleads payment and a counterclaim arising out of other notes and securities given to the plaintiff, and the plaintiff then submits an itemized statement, and on trial both parties request that the case be referred and an accounting made, the court should order an accounting to ascertain the state of accounts between the parties.

The practice of interrogating the court under the guize of requesting findings is condemned. Counsel should submit to the trial court such ultimate findings of fact and conclusions of law as in his opinion the case justifies, and request that the court either find, or refuse to find, such conclusions.

Appeal from District Court, Chaves County; Richardson, Judge.

Action by the Texas Bank & Trust Company of El Paso, Tex., against G. E. Cavin and another. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

In a suit on a promissory note, where the defendant pleads payment and a counterclaim arising out of other notes given to the plaintiff, and the plaintiff then submits an itemized statement, and on trial both parties request that the case be referred and an accounting made, the court should order an accounting to ascertain the state of accounts between the parties.

Reid, Hervey & Iden, of Roswell, for appellants.

H. C. Maynard, of Roswell, for appellee.

RAYNOLDS, J.

This was an action instituted by the plaintiff bank against defendants upon their joint and several promissory note for $3,000, dated December 22, 1915, payable on or before 60 days to the said bank, and praying judgment for the amount of principal and interest of said note and 10 per cent. of said amount as attorney's fees.

The answer admits the making of the note, but denies any indebtedness. By way of new matter it is pleaded that the note in question was placed with the plaintiff bank as collateral security to another note dated January 3, 1916, for $6,568.19, signed by Cavin, and that the defendant Amis, one of the makers of the said note of December 22, 1915, was an accommodation maker, and signed and delivered said note to the defendant Cavin with the express understanding that it would be used as collateral security to the above-mentioned note and for no other purpose; that said note of January 3, 1916, was executed by Cavin to the plaintiff bank in pursuance of a prior agreement made about December 20th, for the purpose of obtaining money to pay a draft of the Saxon Automobile Company and to enable the defendant Cavin to obtain two carloads of Saxon automobiles at El Paso, Tex., and that the plaintiff bank had notice and knowledge of the fact that the said defendant Amis was an accommodation maker, and that the said note was signed by the said Amis with the express understanding that it was to be used as collateral security for the above-mentioned loan of $6,568.19, and for no other purpose.

By counterclaim the defendant Cavin also alleged that prior to the making of the note in question he was in the automobile business in El Paso, Tex., and the plaintiff was his banker, and that during the course of their business he made various notes to the bank from time to time, each of which was secured by mortgages on certain automobiles, and as the automobiles were sold a portion of the proceeds would be applied upon the respective obligations; and that, upon information and belief, the defendant was not indebted to the plaintiff bank, but that he was not possessed of the data necessary to show payments, and therefore prayed an accounting from the plaintiff bank, and asked for judgment for any amount that might be found to be due, offered to pay any amount that he might owe, and also alleged, among other things, that, by reason of the various credits, the note of January 3, 1916, for which the note in suit was given as collateral, had been fully paid and satisfied.

The plaintiff bank apparently did not resist the application for an accounting, but filed a reply, and attached to it an itemized statement, purporting to show all the notes made by the defendant Cavin from time to time, and all amounts received by the said bank, either by way of payment or realized from sales of automobiles by the said bank after Cavin had suspended business.

Much testimony was taken on the various items of account, but it was all taken before the court; no reference having been made. It was also claimed by the plaintiff bank that on or about November 29, 1915, Cavin became the partner of one Ottestad in the handling of Saxon automobiles, at El Paso, Tex., and on that date the firm of Ottestad & Cavin executed to the plaintiff bank a note in the sum of approximately $2,600, and that later, about January 3, 1916, Cavin succeeded to the business of Ottestad, assuming the debts of the said firm, and among which were several notes made in October and November by the Saxon Motor Company prior to Cavin's connection with the firm, aggregating about $2,400; that on April 1, 1916, after the making of the note of January 3, to which the note sued on in this case was collateral, and after maturity of the said collateral note, Cavin obtained from the bank a further loan of $4,173.54, and executed a note therefor to the bank, and on April 26, a loan of $3,874.39, and May 30 a loan of $200, each time executing a note to the bank therefor, and that by reason of the agreement contained in the note of January 3, 1916, the said Amis, upon the note which is the subject of this suit, became liable, not only for any balance which...