Thompson v. North Texas Nat. Bank

• Decision Date: 15 April 1931
• Docket Number: No. 1438-5653.,1438-5653.
• Citation: 37 S.W.2d 735
• Parties: THOMPSON et al. v. NORTH TEXAS NAT. BANK.
• Court: Texas Supreme Court

37 S.W.2d 735

THOMPSON et al. v. NORTH TEXAS NAT. BANK.

No. 1438-5653.

Commission of Appeals of Texas, Section A.

April 15, 1931.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Action by the North Texas National Bank against D. G. Thompson and others. To review a judgment of the Court of Civil Appeals [23 S.W.(2d) 494], reversing and remanding the cause for a new trial after defendants had obtained judgment in the district court, defendants bring error.

Judgment of the Court of Civil Appeals affirmed.

Worsham, Rollins, Burford, Ryburn & Hincks, Saner, Saner & Jack, and I. M. Williams, all of Dallas, and Tom Whipple, of Waxahachie, for plaintiffs in error.

Thomas, Storey & Grady, of Dallas, for defendant in error.

CRITZ, J.

This suit was begun in the district court of Dallas county by North Texas National Bank against D. G. Thompson, R. K. Erwin, I. M. Williams, Mrs. Ella K. Gibson, and W. J. Rutledge, trustee in bankruptcy of Texas Mortgage Company, a corporation. Later Rutledge, trustee, was dismissed. The case was tried with a jury, but at the conclusion of the evidence the court peremptorily instructed a verdict in favor of D. G. Thompson, Mrs. Ella K. Gibson, and I. M. Williams. The court also peremptorily instructed a verdict in favor of the bank against R. K. Erwin. The jury returned a verdict as instructed, and judgment was entered accordingly. The reason for the instructed verdict against Erwin does not concern us, as he did not appeal therefrom. The North Texas National Bank appealed to the Court of Civil Appeals at Dallas, which court originally reversed the judgment of the district court in favor of Thompson, Mrs. Gibson, and Williams, and rendered judgment against them for the bank, but on rehearing this judgment was changed so as to remand the cause for a new trial. 23 S.W.(2d) 494. The case is in the Supreme Court on writ of error granted on application of Thompson, Mrs. Gibson, and Williams.

It appears from the record that on July 29, 1921, T. J. Cole, I. M. Williams, D. G. Thompson, R. K. Erwin, and Mrs. Ella K. Gibson, all stockholders and directors of Texas Mortgage Company, executed and delivered to the Southwest National Bank of Dallas, Tex., the following instrument of guaranty.

"Limited Guaranty

"For the sum of One Dollar ($1.00) and other valuable consideration, I, we, or either of us, jointly and severally, guarantee the payment and agree and promise to pay at Dallas, Texas, to the Southwest National Bank of Dallas, its successor, successors or assign, at maturity or at any time thereafter as demanded by it, all notes, discounts, overdrafts and any and all indebtedness or obligation whether joint or several, or both, or primary or secondary, contract of tort, for which The Texas Mortgage Company of Texas, Dallas, Texas, is, or are, now, or hereafter may become, liable or indebted to the Southwest National Bank of Dallas, its successor, successors or assign, provided, however, that my or our liability hereunder shall not exceed the sum of Twenty Thousand Dollars ($20,000.00), and the payment of said sum of Twenty Thousand Dollars ($20,000.00) under this contract to said Southwest National Bank of Dallas, its successor, successors or assign, by the subscriber or subscribers hereto, such payment to be applied to the indebtedness of the principal debtor as may be determined by the Southwest National Bank of Dallas, its successor, successors or assign, shall satisfy and discharge the obligation of this instrument.

"I, we, and each of us hereby waive notice of acceptance of this guaranty and all other notices in connection herewith, or the indebtedness or obligation guaranteed thereby and waive diligence, presentment, notice, protest and suit on the part of the bank, its successor, successors or assign, in the collection of any indebtedness or obligation hereby guaranteed. This guaranty is a continuing one and shall continue to apply without regard to the form or amount of the indebtedness or obligation guaranteed, which the bank, its successor, successors or assign, may create, renew, extend or alter, in whole or in part, without notice to the undersigned from time to time as it may elect without affecting the obligation of this guaranty, and it is hereby expressly agreed that the bank, its successor, successors or assign, may surrender, release exchange or alter any collateral or other security held by it for the claims hereby guaranteed, either in whole or in part, without affecting the obligation or liability of the undersigned on this guaranty, and this guaranty shall be and continue effective notwithstanding any legal disability of the principal debtor to incur the indebtedness or obligation, in whole or in part.

"This instrument shall bind me, us, and each of us, severally and jointly, until the Southwest National Bank of Dallas, its successor, successors or assign, shall have received notice in writing, that the subscriber hereto giving such notice elects to be no longer bound by this guaranty, after which time this instrument shall bind the subscriber hereto giving such written notice only as to the indebtedness or obligation then existing and renewals or extensions in whole or in part of the then existing indebtedness or obligation, but shall continue in full force and effect at the option of the bank, its successor, successors and assign, as to all other subscribers hereto not giving such written notice."

After the execution and delivery of the above instrument of guaranty, the mortgage company became indebted to the Southwest National Bank in the sum of $4,000, evidenced by a negotiable promissory note. This note was an asset of such bank and unpaid on May 13, 1925. On or about this last-named date the Southwest National Bank and North Texas National Bank entered into the following written contract:

"This agreement, this day made and entered into by and between the Southwest National Bank of Dallas, Texas, hereinafter styled party of the first part, and North Texas National Bank of Dallas, Texas, hereinafter styled party of the second part, witnesseth;

"That the party of the first part does hereby sell, assign and agree to deliver any and all of the assets of any kind, character and description except its corporate name and charter, unto the party of the second part, hereby authorizing, empowering and directing the President, either of the Vice-Presidents, or the Cashier of the party of the first part to transfer by endorsement, all notes, bills of exchange or other evidence of debt owned by the party of the first part, unto the party of the second part; to execute and deliver all and any deeds or other instruments necessary to convey title to any real estate owned by party of the first part unto party of the second part, and to transfer and deliver all bank balances due from other banks by means of drafts and all means, and to deliver all cash, checks, or equivalent of money owned by party of the first part unto party of the second part, it being the intention of this agreement to sell, transfer and deliver by any and all means all of the assets of the party of the first part, except its corporate name and charter, unto the party of the second part.

"2. That in consideration that the party of the first part shall and does sell, assign and deliver all of the assets of every kind, description and character, its corporate name and charter alone excepted, unto the party of the second part as hereinafter set out.

"Now, therefore, party of the second part does hereby assume all of the liabilities of the party of the first part, except its liability to its shareholders; and party of the second part hereby further agrees to select from the assets of the party of the first part a sufficient amount of assets to equal in value the liabilities assumed by party of the second part.

"The party of the second part shall hold all assets taken over under this transfer from the party of the first part over and above the total selected as hereinbefore provided and set up on its books to offset all liabilities of record...