Turner v. Pugh, 5710.

• Decision Date: 20 May 1946
• Docket Number: No. 5710.,5710.
• Citation: 195 S.W.2d 374
• Parties: TURNER et al. v. PUGH.
• Court: Texas Court of Appeals

195 S.W.2d 374

TURNER et al. v. PUGH.

No. 5710.

Court of Civil Appeals of Texas. Amarillo.

May 20, 1946.

Rehearing Denied June 24, 1946.

Appeal from District Court, Ochiltree County; W. R. Ewing, Judge.

Suit by Mary Virginia Scott Turner, as independent executrix and wife of J. H. Scott, deceased, against T. O. Pugh to recover on two promissory notes executed by defendant to deceased. Upon plaintiff's remarriage after instituting suit, her husband, M. J. Turner, joined her pro forma as plaintiff. From a judgment in favor of defendant, plaintiffs appeal.

Judgment reversed and judgment rendered in favor of plaintiffs.

Boyer & McConnell, of Perryton, for appellants.

Hoover, Hoover & Cussen, of Canadian, and R. T. Correll, of Perryton, for appellee.

STOKES, Justice.

This suit was instituted by the appellant in her own behalf and as independent executrix of the last will and testament of her deceased husband, J. H. Scott, against the appellee, T. O. Pugh, upon two promissory notes executed by him to J. H. Scott on July 27, 1938, one being in the sum of $4,800 and the other in the sum of $4,032, due and payable on or before July 27, 1939 and July 27, 1940, respectively. After instituting the suit, appellant intermarried with M. J. Turner who joined her pro forma as plaintiff. Appellee filed his answer in which he alleged that as security for the notes he executed to J. H. Scott on October 1, 1938 chattel mortgages on his two-thirds interest in 400 acres of wheat to be grown in the years 1939, 1940, and 1941, together with all of his farm machinery, all located on the farm being cultivated by him in Ochiltree County. He further alleged that in the month of April 1941 an agreement was made between him and J. H. Scott whereby the latter agreed to accept the proceeds of the sale of the farm machinery and the wheat in full satisfaction of the indebtedness represented by the notes sued upon and that on June 25, 1941, the wheat crop being a complete failure, he delivered to Scott $700, being the proceeds from the sale of the farm machinery, which Scott accepted in full satisfaction of the entire indebtedness.

The case was submitted to a jury upon seven special issues, in answer to which the jury found that in the month of April 1941 J. H. Scott agreed to accept the proceeds of the sale of the mortgaged property in full satisfaction of the entire indebtedness; that on June 25, 1941 appellee paid to Scott $700, the proceeds from the sale of the farm machinery, in full payment of the two notes sued upon; that appellee was insolvent in the month of April 1941 and that Scott then knew of his insolvency; that Scott accepted the $700 in full satisfaction of the indebtedness and on June 25, 1941 he intentionally canceled the balance due on the notes. At the close of the testimony appellant filed and urged a motion for a peremptory instruction, which was overruled by the court and judgment was entered upon the verdict of the jury, denying appellant any relief. In due season appellant filed a motion for new trial, which was overruled and she gave notice of appeal and presents the case here for review upon a number of assignments of error. In the view we take of the case, it will not be necessary to discuss the assignments in detail. The controlling issue is presented by the eighth assignment of error brought forward under the fifth point, which assigns error of the court in overruling appellant's motion for a peremptory instruction. The motion was based upon the contention of appellant that according to the undisputed testimony no accord and satisfaction resulted from the negotiations and dealings between appellee and J. H. Scott.

This is the second appeal in this case, the opinion on the former appeal being published in 187 S.W.2d 598, where we discussed fully the issues made by the testimony upon the first trial, one of which was whether an accord and satisfaction was consummated by the negotiations between the parties mentioned. The record now before us presents a case which differs in no material respect from the case presented by the record upon the first appeal.

The rule has long been established and consistently adhered to by the courts of this State and practically every other State in the Union, as well as in England, that an accord and satisfaction involves a new contract between the parties and, like all other legal and binding contracts, to be effective it must be based upon a consideration; otherwise, the debtor has done nothing more than he was already obligated to do. Baker v. Coleman Abstract Co., Tex.Civ.App., 248 S.W. 412. It is true the courts are not concerned with the adequacy of the consideration so long as it is paid and accepted as such, but where the full amount of the indebtedness is not paid and there is no legal consideration shown for the new contract, no accord and satisfaction is accomplished. Wardy v. Casner, Tex.Civ.App., 108 S.W.2d 772; Ashbrook v. Neal, Tex.Civ.App., 103 S.W.2d 1101, and authorities there cited.

It has been held that payment of the amount agreed upon as an accord before the date upon which the original indebtedness becomes due may constitute a valid consideration for an accord and satisfaction and, likewise, that where the debtor is insolvent, the acceptance of a smaller sum by the creditor may constitute a valid consideration for the new contract. Mayfield Woolen Mills Co. v. Long, Tex. Civ.App., 119 S.W. 908; Shelton v. Jackson, 20 Tex.Civ.App. 443, 49 S.W. 415. In some cases it has been stated that an accord and satisfaction based upon prepayment was binding upon the parties although the length of time intervening between the date of payment and the date upon which the original indebtedness was due was apparently insignificant; but it has been consistently held that in order for either prepayment or a condition of insolvency to constitute a valid consideration it must have been agreed upon and regarded as such by the parties. The mere fortuitous circumstance of insolvency at the time the payment is made or that incidentally the payment is made before the debt falls due is not considered a legal consideration where it in no degree prompted the parties in consummating their arrangement. Fire Insurance Ass'n v. Wickham, 141 U.S. 564, 12 S.Ct. 84, 35 L.Ed. 860; Simms Oil Co. v. American Refining Co., Tex.Civ.App., 288 S.W. 163.

Another pertinent and well-established rule is that an accord is merely executory until the satisfaction takes place, and until then it is not enforcible. Gulf, C. & S. F. Ry. Co. v. Gordon, 70 Tex. 80, 7 S.W. 695; Columbian Nat. Fire Ins. Co. v. Dixie Co-op. Mail Order House, Tex. Com.App., 276 S.W. 219.

The record shows that during the month of April 1941 appellee and his wife went to Dallas for the purpose of borrowing some money from J. H. Scott. Scott informed them that he was not active any more and was not interested in loaning them any more money. He told them, however, that he would like to "get the old debt cleared up," referring to the two notes sued upon in this case. Appellee informed Scott at that time that the wheat crop was very promising and Scott told him that if he would...