W. H. Hodges & Co. of Alexandria, Inc. v. Donley County State Bank of Clarendon

• Court: Texas Supreme Court
• Writing for the Court: GRIFFIN
• Citation: W. H. Hodges & Co. of Alexandria, Inc. v. Donley County State Bank of Clarendon, 407 S.W.2d 221 (Tex. 1966)
• Decision Date: 05 October 1966
• Docket Number: No. A-11366,A-11366
• Parties: W. H. HODGES & COMPANY OF ALEXANDRIA, INC., Petitioner, v. The DONLEY COUNTY STATE BANK OF CLARENDON, Texas, Respondent.

Page 221

407 S.W.2d 221

W. H. HODGES & COMPANY OF ALEXANDRIA, INC., Petitioner, v. The DONLEY COUNTY STATE BANK OF CLARENDON, Texas Respondent.

No. A-11366.

Supreme Court of Texas.

Oct. 5, 1966.

Rehearing Denied Nov. 9, 1966.

Smith, Teed, Wade, Waters & Snow, Pampa, for petitioner.

William J. Lowe, W. T. Link, Clarendon, for respondent.

GRIFFIN, Justice.

This suit was filed in the district court of Donley County, Texas, by The Donley County State Bank of Clarendon, Texas, as plaintiff (hereinafter called Bank), against Bob Sherrod, as a defendant, upon promissory notes and for foreclosure of a chattel mortgage lien upon 206 head of cattle. W. H. Hodges and W. H. Hodges & Company, a corporation, of Alexandria, Louisiana (hereinafter called Hodges), were joined as defendants, because it was alleged that Hodges was claiming to be the owner of said 206 head of cattle. Hodges filed a cross-action against Sherrod for debt and against the Bank and Sherrod for title and possession of the 206 head of cattle. By agreement of all parties the 206 head of cattle were sold and the proceeds of the sale, $23,564.29, were held subject to the outcome of the suit.

Hodges was the only party appealing from the trial court's judgment and on appeal the trial court's judgment was affirmed. 399 S.W.2d 193. In this Court Hodges alone complains of the judgment of the Court of Civil Appeals. The case was tried to a jury and four special issues were submitted. Issue No. One inquired if Sherrod owned the 206 head of cattle at the time he executed his chattel mortgage on them to secure his loan to the Bank, or if Sherrod thereafter acquired title to them. The jury answered this issue 'No.' No complaint is made of this issue or its answer, so it will not be further considered.

Special Issue No. Two inquired if the conduct and actions of Hodges or its failure to act, with respect to the 206 head of cattle, reasonably led the Bank to believe, in the exercise of ordinary care, that Sherrod owned the 206 head of cattle. The jury answered this issue 'No.'

Special Issue No. Three inquired if Sherrod and Hodges were engaged in a partnership in dealing with the 206 head of cattle. The jury answered this issue 'No.' No complaint is made of the issue or its answer, so the question of partnership is no longer in the case.

Special Issue No. Four inquired if Sherrod and Hodges were engaged in a joint adventure in dealing with the 206 head of cattle. The jury answered this issue 'Yes.' Hodges has attacked this issue and its answer by appropriate assignments in both courts below and in this Court. Hodges contends there is no evidence to justify submission of this issue or the answer of the jury thereto.

In the trial court plaintiff Bank moved for judgment on the jury's answer to Special Issue No. Four (joint adventure), and the trial court granted this motion. On appeal the Court of Civil Appeals affirmed the trial court's action and also held Hodges was estopped to deny Sherrod's authority to mortgage the cattle, because Hodges had permitted Sherrod to place his brand on the 206 head of cattle.

We reverse the judgment of both courts below and remand the cause to the trial court for entry of judgment consistent with this opinion.

Sherrod wholly defaulted and refused to testify in this cause, invoking the fifth amendment to the United States Constitution and Art. I, Sec. 10 of the Texas Constitution, Vernon's Ann.St.

First we will dispose of the question of estoppel of Hodges to plead its ownership of the cattle and Sherrod's lack of authority to mortgage them to the Bank. The Bank's right under its plea of estoppel was submitted by the court as Special Issue No. Two. That issue read, as material to our inquiry: 'Do you find * * * that the conduct and actions, if any, or the failure to act, if any, on the part of W. H. Hodges, with respect to the 206 head of mixed breed steer yearlings in question, reasonably led The Donley County State Bank to believe, in the exercise of ordinary care, that the 206 head of mixed breed steer yearlings were owned by Bob Sherrod?' To which the jury answered 'No.'

Although Hodges made objections to the submission of this issue, the Bank has not attacked this finding by any cross-assignment of error. The Bank argued before the Court of Civil Appeals and argues in this Court that the facts show Hodges is estopped to deny Sherrod's right to mortgage the cattle. With the jury answering Special Issue No. Two against the Bank, the Bank, to prevail on the question of estoppel, must show that the facts in this record establish as a matter of law that Hodges is estopped to deny Sherrod's ownership of the cattle.

In view of the fact that the jury answered the estoppel issue favorably to Hodges and adversely to the Bank, in considering whether or not there is evidence to support the jury answer, we must view the evidence most favorably to Hodges. Unless the evidence was of such a character that as a matter of law Hodges was estopped to deny Sherrod's ownership of the cattle, we must uphold the jury's answer. Najera v. Great Atlantic & Pacific Tea Co., 146 Tex. 367, 207 S.W.2d 365, 367 (1948); Biggers v. Continental Bus Systems, Inc., 157 Tex. 351, 303 S.W.2d 359 (1957); 4 Tex.Jur.2d 326, § 804.

We have read the Statement of Facts and found there is evidence to support the jury's answer to Special Issue No. Two, and that finding is binding on us.

The president of the Bank testified that at the time the loan committee and the directors of the Bank approved the loan to Sherrod, they were relying on Sherrod's general statement that he had sufficient collateral to protect the Bank; that prior to making the loan the Bank sought information from...