Waters v. Byers Bros. & Co., (No. 1818.)

CourtCourt of Appeals of Texas
Writing for the CourtHall
Citation233 S.W. 572
PartiesWATERS v. BYERS BROS. & CO.
Decision Date29 June 1921
Docket Number(No. 1818.)
233 S.W. 572
WATERS
v.
BYERS BROS. & CO.
(No. 1818.)
Court of Civil Appeals of Texas. Amarillo.
June 29, 1921.

Page 573

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

Action by Byers Bros. & Co., a livestock commission corporation, against Thomas Waters. Judgment for plaintiff on sustaining a general demurrer to the answer, and defendant appeals. Reversed and remanded.

Hoover, Hoover & Willis, of Canadian, for appellant.

Sanders & Jennings, of Canadian, for appellee.

HALL, J.


Appellee, a live stock commission corporation, sued the appellant to recover upon a series of notes, payable to appellee, and to foreclose a chattel mortgage upon certain live stock and a deed of trust upon certain lands described in the instruments which were executed to secure payment of the notes. The court sustained a general demurrer to appellant's answer which, omitting the formal parts, is as follows:

"(1) Defendant says that the notes which formed the basis of the plaintiff's suit are renewal notes, of a series of notes given by the defendant to plaintiff, on or about the ____ day of ____, 19__, and that such notes were given and a mortgage upon the cattle in controversy, according to the terms of an agreement, and as a part of the same transaction, in which it was understood and agreed that the said notes represented the agreed price of cattle covered by the chattel mortgage that day given, secured by the said cattle, which plaintiff turned over to defendant under the terms of said agreement; that at and prior to said time plaintiff had a mortgage on the said cattle, securing notes then past due, which the maker was unable to pay, and which the cattle in their then condition were insufficient to pay and could not be further carried out without loss to the holder of the cattle and the plaintiff also; that plaintiff knew and was advised that defendant was an experienced cattleman and possessed of sufficient pasturage and means to care for and keep the said cattle so the herd could increase and grow in number and value, the cattle being largely cows, and it was therefore understood and agreed for the mutual benefit and profit of the plaintiff and the defendant that defendant should take the cattle at the price then agreed upon, for which notes were then given secured by chattel mortgage upon said cattle, same being signed by defendant; that the defendant for his profit in the care and keep of the cattle was to have the profits to be derived from the cattle after paying off out of the sale of the cattle to be made from time to time, this including the sale of the calves and increase, the said indebtedness and interest thereon, at a rate of not more than 8 per cent. per annum, and the plaintiff agreed and it was understood that the arrangements were to continue until the cattle, by growth and otherwise, were sufficient to pay said debt and defendant for the care and keep of the same, he to have all profits above said debt and interest.

"(2) Defendant further shows that it was understood and agreed as a part of the same transaction that the plaintiff would have to float the notes given, and that in order to do so it would be necessary to renew the notes each six months, and such renewals by the defendant should continue until the agreement was consummated and the object for which the same was entered into was obtained. Thus by the terms of said agreement the enterprise was entered into whereby the defendant was to take the cattle, as hereinbefore stated, and the notes so given and the mortgage securing the same were to be discharged out of the profits of the business, which agreement, although defendant has fully complied with and expended large sums of money to carry out, the plaintiff has broken, to defendant's damage as hereinafter charged. Defendant shows that he entered into said agreement in good faith, believing that plaintiff could and would carry the same out according to its purpose and intent; that he has performed his full obligations thereunder and has been delinquent in no particular, and that he is still able, willing, and ready to carry out his part of the agreement; that the cattle and the increase have been shipped and applied upon said agreement from time to time according to the terms of said agreement; that there is still on hand of said cattle and in the possession of defendant about 400 head of said cattle, which are being cared for by defendant according to the terms of said agreement and at his own expense; that he has expended in the care and keep of said cattle the sum of at least $12,000; that he would not have entered into said agreement and expended said money or executed said notes and mortgages but for the said promise and agreement of plaintiff, which he, in good faith, relied upon

Page 574

and believed plaintiff would carry out; that he has received nothing of value upon said contract and agreement, and has nothing of value except the cattle now on hand, which are subject to said agreement, the remainder of the original stock, and the increase, having been sold thereunder and applied upon said notes; that the breach of the said contract by plaintiff is vital to its existence and goes to the very root of the contract, and its failure and refusal to carry out the same has destroyed its purpose and object, and defendant now here tenders to said plaintiff the said cattle now on hand, the plaintiff having breached said contract, and here reconvenes and sues the plaintiff for his damages, in the sum of $12,000, the amount of money he has expended in the care and keep of said catle, and the further sum of $2,000, the value of his time and attention actually expended, and further asks that said notes and mortgages and deed of trust be canceled and held for naught, for all of which the defendant will ever pray, etc. * * *

"(4) Defendant further shows that after said contract and agreement had been entered into, and while he in good faith as hereinbefore stated, was carrying out his part of the same, and expending great sums of money, as well as time and attention thereon, as plaintiff intended he should do, and as he had agreed to do, the plaintiff informed him that the price of cattle had declined and that it was hard to float cattle paper, and that in order to be able to float said paper it would be necessary to further secure the same, which statements he relied upon and believed, and in order only to assist the plaintiff to carry out its part of said agreement, at the special instance and request of the plaintiff, and for no other purpose or consideration, and without in any wise changing or modifying said original agreement, defendant was induced to and did execute the deed of trust mentioned in said original petition, believing that the said plaintiff intended to carry out its said contract. However, defendant shows that as soon as or very soon thereafter plaintiff, feeling by reason of said additional security that it was fully secured and by reason of said additional security escape loss and cause defendant to bear all loss in said mutual agreement, said cattle not then being worth the amount of the so-called debt, repudiated said contract and demanded that defendant bear all loss, and at the maturity of said last renewal made according to the terms of said agreement said matter be closed, and that defendant sell said cattle and also his land put up as additional security to hold it harmless; that he believes, and here so charges to be true, that the representations made to induce defendant to give sald deed of trust as additional security were falsely made for the sole and only purpose of holding itself harmless and with no intention of carrying out the same, but, upon the contrary, of breaching said contract as soon thereafter as possible; that by reason of said statements and representations, which he relied upon and believed, and but for which he would not have executed said deed of trust, he was induced to make the same; and that by reason of such said deed of trust is wholly void and without consideration and should be canceled and held for naught, for which defendant also prays and for costs of suit."

The answer is duly verified by the appellant. It will be observed that the dates of the notes, mortgage, and deed of trust are not set out in the pleading, but it is a fact, as shown by the record, that the original notes, executed by appellant, as well as the renewal notes which are in suit, were all executed subsequent to the date when the Uniform Negotiable Instruments Act became effective. Acts 36th Leg. p. 190, Gen. Laws of Texas 1919. It is provided by article 1, § 16, of that act as follows:

"Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party, other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making * * * or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument."

See, also, Id. § 58.

The foregoing is a verbatim copy of section 16 of the Uniform Negotiable Instruments Law as originally framed by the commission which promulgated it, and in that form it has been incorporated into the statutes by a majority of the states which have adopted it.

Before it became a part of the statutes of Texas and by its provisions repealing all laws inconsistent with it, and was thereby substituted for the law merchant, our courts, in actions between the original parties and those not bona fide holders for value, had gone far toward limiting and modifying the effect of the parol evidence rule and declaring exceptions to it in its relation to negotiable instruments generally. Thus it has...

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13 practice notes
  • Barton v. Farmers' State Bank, (No. 695-4251.)
    • United States
    • Supreme Court of Texas
    • October 14, 1925
    ...App.) 219 S. W. 896; Rahe v. Yett (Tex. Civ. App.) 164 S. W. 30, 34, and cases there cited; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572, and the many authorities cited and discussed on pages 574-580; Bell v. Mulkey (Tex. Civ. App.) 248 S. W. 784; Meeks v. Holmes Commerce Co. ......
  • Shepherd v. Woodson Lumber Co., No. 1404.
    • United States
    • Court of Appeals of Texas
    • June 29, 1933
    ...v. Daggett (Tex. Com. App.) 257 S. W. 228; Adams v. Johnson (Tex. Com. App.) 298 S. W. 265; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572; Adams Nat. Bank v. Stone (Tex. Civ. App.) 284 S. W. 989; Crooker v. National Phonograph Co. (Tex. Civ. App.) 135 S. W. 647; Whiteman v. Bis......
  • Wise v. Boyd, (No. 2377.)<SMALL><SUP>*</SUP></SMALL>
    • United States
    • Court of Appeals of Texas
    • November 12, 1924
    ...70 Tex. 620, 8 S. W. 321; Hendrick v. Chase Furniture Co. (Tex. Civ. App.) 186 S. W. 277; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572, 586-590; Chalk v. Daggett (Tex. Com. App.) 257 S. W. 228. The opinions in the two cases last cited contain elaborate reviews of the authoriti......
  • Shaw v. Nolen, (No. 8289.)
    • United States
    • Court of Appeals of Texas
    • December 21, 1929
    ...it. The note was delivered and held in escrow, and there was no consideration given for it. Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572; article 1, § 16, of Uniform Negotiable Instrument Law of this state passed by Thirty-Sixth Legislature (chapter 123); Reid v. Ragland (Tex.......
  • Request a trial to view additional results
13 cases
  • Barton v. Farmers' State Bank, (No. 695-4251.)
    • United States
    • Supreme Court of Texas
    • October 14, 1925
    ...App.) 219 S. W. 896; Rahe v. Yett (Tex. Civ. App.) 164 S. W. 30, 34, and cases there cited; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572, and the many authorities cited and discussed on pages 574-580; Bell v. Mulkey (Tex. Civ. App.) 248 S. W. 784; Meeks v. Holmes Commerce Co. ......
  • Shepherd v. Woodson Lumber Co., No. 1404.
    • United States
    • Court of Appeals of Texas
    • June 29, 1933
    ...v. Daggett (Tex. Com. App.) 257 S. W. 228; Adams v. Johnson (Tex. Com. App.) 298 S. W. 265; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572; Adams Nat. Bank v. Stone (Tex. Civ. App.) 284 S. W. 989; Crooker v. National Phonograph Co. (Tex. Civ. App.) 135 S. W. 647; Whiteman v. Bis......
  • Wise v. Boyd, (No. 2377.)<SMALL><SUP>*</SUP></SMALL>
    • United States
    • Court of Appeals of Texas
    • November 12, 1924
    ...70 Tex. 620, 8 S. W. 321; Hendrick v. Chase Furniture Co. (Tex. Civ. App.) 186 S. W. 277; Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572, 586-590; Chalk v. Daggett (Tex. Com. App.) 257 S. W. 228. The opinions in the two cases last cited contain elaborate reviews of the authoriti......
  • Lee v. First Nat. Bank of Purdon, (No. 982.)
    • United States
    • Court of Appeals of Texas
    • October 31, 1923
    ...vol. 1, § 81a and § 174; Clayton v. Paper Co. (Tex. Civ. App.) 146 S. W. 695; Waters v. Byers Brothers & Co. (Tex. Civ. App.) 233 S. W. 572, 576, et seq. If the signature of appellant was secured to the note in the manner by him alleged, then the consideration for the note failed, to the ex......
  • Request a trial to view additional results

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