Williams v. Jones

• Decision Date: 19 July 1932
• Docket Number: No. 1347-5897.,1347-5897.
• Citation: 52 S.W.2d 256
• Parties: WILLIAMS v. JONES.
• Court: Texas Supreme Court

52 S.W.2d 256

WILLIAMS v. JONES.

No. 1347-5897.

Commission of Appeals of Texas, Section B.

July 19, 1932.

Certified Questions from Court of Civil Appeals of Seventh Supreme Judicial District.

Suit by E. R. Williams against M. T. Jones. Judgment was rendered for defendant, and plaintiff appealed to the Court of Civil Appeals, which certified questions to the Commission of Appeals.

Questions answered.

Vickers & Campbell, of Lubbock, for appellant.

Berry, Warlick & Gossett, of Vernon, for appellee.

RYAN, J.

The following is an epitome of the facts in this case from the statement by the honorable Court of Civil Appeals for the Seventh Judicial District, in certifying the questions hereinafter set forth, viz.:

On February 25, 1920, P. A. Jones and M. T. Jones (brothers) executed their promissory note in the sum of $6,000, payable to the order of J. W. Rose, on January 1, 1921, with interest from maturity at the rate of 10 per cent. and 10 per cent. attorney's fees, if collected by suit, and containing the recital: "The makers, signers and endorsers of this note severally waive demand, notice and protest and agree to all extensions and partial payments before or after maturity and we agree that after maturity the time of payment may be extended from time to time by any one or more of us without the knowledge or consent of any of the others of us and after such extension the liability of all parties shall remain as if no such extension had been made"—which will hereafter be referred to as the "waiver clause."

This note, designated in the record as note No. 1, was credited with various amounts.

On January 1, 1922, P. A. Jones and M. T. Jones executed a renewal note for $2,750, being the balance then due on note No. 1, payable to the order of J. W. Rose on or before November 1, 1922, with interest at the rate of 10 per cent. per annum from date, and the usual stipulation for 10 per cent. attorney's fees. This note, designated in the record as note No. 2, does not contain the above-described "waiver clause" in note No. 1.

Before maturity, appellant, E. R. Williams, became the owner and holder in due course, without notice and for a valuable consideration, of said note No. 2. Across the face of this note is the notation: "Renewed January 1, 1923."

On January 29, 1926, M. T. Jones and P. A. Jones executed their note for $2,786.12, payable to the order of appellant, E. R. Williams, on or before January 1, 1927, with 10 per cent. interest per annum from date and the usual stipulation for 10 per cent. attorney's fees. This note is designated in the record as note No. 3, and does not contain the above-described "waiver clause" in note No. 1.

On January 28, 1928, M. T. Jones alone executed his note for $2,940, payable twelve months after date, to the order of E. R. Williams, with 10 per cent. interest per annum from date and the usual stipulation for 10 per cent. attorney's fees, in renewal of note No. 3, and is designated in the record as note No. 4. It does not contain the above-described "waiver clause" in note No. 1.

On January 28, 1929, M. T. Jones alone executed what is designated in the record as note No. 5, which, omitting date and signature, is as follows: "Twelve Months after date we, I, or either of us, promise to pay to the order of E. R. Williams the sum of Three Thousand Two hundred Thirty Four and 30/100 Dollars for value received, at the rate of 10 per cent per annum from Date until paid, the interest payable annually, and ten per cent Attorney's fees if sued upon or placed in the hands of an Attorney for collection. Payable at The Bank of Chillicothe, Chillicothe, Texas."

On April 18, 1930, appellant, Williams, filed suit in the district court of Hardeman county against M. T. Jones to recover upon said note No. 5. Trial before the court without a jury resulted in a judgment that appellant, Williams, take nothing and that Jones recover his costs.

The trial court filed findings of fact which include, among others, these, viz.:

That on or about January 29, 1926, when the said P. A. Jones and M. T. Jones renewed said indebtedness by what will be called note No. 3, the said E. R. Williams was informed by M. T. Jones of the capacity in which the said M. T. Jones had executed said note, that he was surety and P. A. Jones was the principal on said notes.

Before January 28, 1928, plaintiff, E. R. Williams, desired a further renewal of said indebtedness, and for that purpose he tendered to P. A. Jones a renewal note, which the said P. A. Jones refused to execute, telling plaintiff that he was insolvent, and that, if the plaintiff was going to file suit on the indebtedness, he had as well do so then, as he the said P. A. Jones did not intend to sign any more renewals thereof; that afterwards plaintiff presented said note, which is designated as No. 4, to the defendant, M. T. Jones, for his signature, and the said M. T. Jones was told that he (plaintiff) would send the same to P. A. Jones for his signature, and then the said M. T. Jones executed said note No. 4 in the sum of $2,940.30 with the understanding and agreement that plaintiff would have the said P. A. Jones execute the same as the principal in said indebtedness.

Plaintiff did not procure the signature of said P. A. Jones to said note No. 4, nor even attempted to do so, and the said P. A. Jones had, before said note was executed by M. T. Jones, declined to further renew said indebtedness, all of which plaintiff well knew at the time he presented the same to M. T. Jones, for execution.

On the _____ day of _____, plaintiff desired a further renewal of said indebtedness, and he presented the note in suit, which is called No. 5, to said M. T. Jones for his signature, explaining to defendant that he would procure the signature of P. A. Jones thereto, and the said defendant, M. T. Jones, again explained to plaintiff that he was only the surety on said note and not the principal, and that he did not expect to pay the indebtedness; the plaintiff told him that he (plaintiff) did not intend to bring suit against defendant at any time on said indebtedness, but that he only wanted to keep it up in a business shape.

When defendant executed said note No. 5, he did not know, and did not learn until some time afterwards, that P. A. Jones had not signed note No. 4, said note No. 4 having been delivered to defendant some time after he executed note No. 5, being note sued upon, and that plaintiff promised and agreed with defendant that he would procure the signature of P. A. Jones on said note No. 5.

Plaintiff did not procure the signature of P. A. Jones to note No. 5, and that he made no effort to do so; plaintiff then knew that the said P. A. Jones would not sign any further renewals of said indebtedness, having been so informed when note No. 4 was presented to him by plaintiff

—and concluded as a matter of law: That, by failing to procure the signature of P. A. Jones to note No. 4, plaintiff released the defendant, M. T. Jones, therefrom, and that, he not having procured the signature of P. A. Jones to note No. 5, the note in suit, said note is void and of no force or effect as to the defendant M. T. Jones, and that plaintiff cannot recover thereon.

Appellant excepted to the judgment of the court, and attacks the findings because the court failed to find that P. A. and M. T. Jones were both insolvent at the time he purchased the note and up to the time of the trial.

With reference to the issue of insolvency, the appellee Jones alleged: "At the time he (plaintiff) purchased said note No. 2 and said other notes, knew that P. A. Jones and this defendant M. T. Jones, had lost their fortunes and was insolvent."

By trial amendment, plaintiff alleged: "That P. A. Jones is notoriously insolvent and was at the time mentioned and since plaintiff acquired the note from J. W. Rose. However, plaintiff says he did not know that P. A. Jones was insolvent when he purchased the note from J. W. Rose in July, 1924."

The testimony of both the appellee and his brother P. A. Jones sustain the allegations of insolvency.

The defendant pleaded that P. A. Jones was the principal debtor and he was only surety and accommodation maker on notes 1 and 2; that, at the time he signed note No. 3, he told plaintiff he was only a surety and an accommodation party and had received none of the consideration for which notes Nos. 1 and 2 had been made; that, in order to induce defendant to sign note No. 4, plaintiff promised to get P. A. Jones to sign it also, which plaintiff failed to do, and that defendant's signature thereto was obtained through fraud, undue influence, and false representations; that the same representations were made by plaintiff in order to induce defendant to sign note No. 5, and that, when he signed note No. 5, he did not know that P. A. Jones had not signed note No. 4; that he would not have signed either note No. 4 or No. 5 if he had known and understood that plaintiff did not intend to procure the signature of P. A. Jones to each of said notes.

The appellant insists that appellee was neither a surety nor an accommodation maker; that, because he appears as a joint maker on note No. 2, which the trial judge found appellant had acquired for a valuable consideration, before maturity, without notice of any infirmities therein, appellee is liable as a joint maker thereon; that, because appellee neither pleaded nor proved the payment of any consideration to plaintiff for the alleged agreement on the part of plaintiff to procure the signature of P. A. Jones to...