Willis v. First Nat. Bank of Burkburnett

• Court: Texas Court of Appeals
• Writing for the Court: Hall
• Citation: Willis v. First Nat. Bank of Burkburnett, 262 S.W. 851 (Tex. App. 1924)
• Decision Date: 09 April 1924
• Docket Number: (No. 2310.)
• Parties: WILLIS et al. v. FIRST NAT. BANK OF BURKBURNETT et al.

262 S.W. 851

WILLIS et al. v. FIRST NAT. BANK OF BURKBURNETT et al.

(No. 2310.)

Court of Civil Appeals of Texas. Amarillo.

April 9, 1924.

Rehearing Denied June 4, 1924.

Appeal from District Court, Wichita County; E. W. Napier, Judge.

Action by the First National Bank of Burkburnett against W. T. Willis, E. S. Carey, and others, in which defendants Carey and others filed cross-action against defendant Willis. From judgment against defendants Willis and others, they appeal. Reformed, and affirmed as reformed, on condition of remittitur.

Guy Rogers and Arch Dawson, both of Wichita Falls, for appellant Willis.

Guy Rogers, of Wichita Falls, for appellants Childers and Rogers.

Fitzgerald & Hatchitt, of Wichita Falls, for appellee.

HALL, C. J.

The appellee bank filed this suit to recover upon a note in the sum of $14,082.41, signed Carey Bros. Oil Company, by Guy Rogers. The note is indorsed by the following parties: C. W. Carey, E. S. Carey, R. R. Carey, Guy Rogers, W. T. Willis, and J. E. Childers. It is alleged that the indorsers were partners, doing business under the firm name of Carey Bros. Oil Company.

The appellant Willis filed an answer, denying his liability upon the note, and alleging that he sold his interest in the partnership on the 20th day of May, 1920, to E. S. Carey, under a contract which bound the said Carey to assume and pay his portion of the note sued upon, together with his portion of certain indebtedness to the City National Bank of Wichita Falls; and, in addition thereto, the said Carey promised to pay him $2,000 for his interest in the partnership property. He further alleges that he indorsed the note sued upon for the accommodation of E. S. Carey, and prayed for judgment over against Carey by virtue of the terms of the contract of sale. The defendant E. S. Carey admitted that he bought the interest of Willis in the Carey Bros. Oil Company, but denied the contract to be as alleged by Willis, and averred that the agreement was that he was to pay $2,000 for said interest, in the event the lease which was owned by said partnership yielded enough to said interest to pay said $2,000; that said Willis was not to be relieved of any of the indebtedness of the Carey Bros. Oil Company existing at that time, but that he was to pay his portion thereof, including his pro rata share of the note in suit and also his share of about $30,000 indebtedness to the City National Bank. He alleged that he was compelled to pay Willis' portion of the indebtedness to the City National Bank, and did pay it, because of the fact that he and Willis had another partnership known as Carey-Willis Drilling Company, and that the said Willis had collected $72,000 worth of indebtedness due said partnership by taking a promissory note covering said $72,000, payable to himself, instead of the firm, and that notwithstanding the contract with Willis for the purchase of Willis' interest in the Carey Bros. Oil Company, the said Willis refused to allow him to have any part of the $72,000 unless the defendant would pay his portion of the City National Bank of Commerce judgment and his portion of the note herein sued on. Carey further alleged that in order to get his share of the $72,000, he paid these claims under protest, and was seeking to recover said sums in this suit.

By first supplemental answer the defendant Willis alleged that on or about the 3d day of February, 1922, he made a complete settlement with his codefendants, Carey Bros., in so far as their claim set up in their cross-actions are concerned, said settlement being made with particular reference to E. S. Carey, whereby and wherein it was again agreed and understood, as it had been originally on the 20th day of May, 1920, that all of the liability of the said Willis in any and all obligations of Carey Bros. Oil Company, arising against him by virtue of his at one time being a member of said concern, and an indorser of some of its paper, would be paid off, discharged, and satisfied by E. S. Carey, primarily with the codefendants, C. W. Carey and R. R. Carey, as his sureties; that in pursuance of said contract and as part consideration therefor he assumed in his own right and as his own personal liability and secured the release of E. S. Carey from a joint obligation to the Wichita State Bank & Trust Company, which said obligation he has since paid in full; that but for the agreement of the Carey Bros., as aforesaid, and their payment of the sums of money in their cross-action set out, and their contract with this defendant to pay all claims of Carey Bros. Oil Company, in any way chargeable to this defendant, this defendant would not have assumed the great liability nor secured the release of said Carey from the aforesaid obligation due the Wichita State Bank & Trust Company; that in further pursuance of said agreement and understanding and as part of the consideration therefor, this defendant secured for the said Carey Bros. a complete release except as to four-ninths thereof of a judgment approximating $30,000 due the City National Bank of Commerce for which said Careys were primarily liable, jointly and severally, with this defendant; that he procured such release relying upon the promise of said codefendants to pay off all claims, accounts, choses in action, and judgment that might be or arise for payment against defendant as aforesaid; that in pursuance of said contract and agreement this defendant released for the account and benefit of the aforesaid codefendants, a large sum of money in his then possession, which was accepted by said codefendants and which was surrendered in full reliance upon the above-mentioned contract and agreement of assumption and indemnity, and but for which this defendant would not have released said money. All of which facts this defendant pleads in bar and in estoppel of the matters claimed by his codefendants in their cross-action.

The defendant further pleaded that he signed the obligation as an indorser only and at the request and for the accommodation of his codefendant E. S. Carey, for whom he is merely an accommodation surety. The defendants Guy Rogers, W. T. Willis, and J. E. Childers pleaded in abatement of the plaintiff's cause of action the fact that there was now pending in the Eighty-Ninth district court a suit between the same parties involving the same subject-matter, in which the bank had intervened, asking a judgment on the note herein sued upon. The judgment of the court contains this recital:

"Thereupon the defendants, Guy Rogers, W. T. Willis and J. E. Childers, presented to the court their plea in abatement filed herein, whereupon it was announced in open court that plaintiff would prosecute its suit against the defendant as indorsers only, whereupon said plea in abatement was overruled."

By a second supplemental petition the defendant Willis alleged that as to all the matters and things set up in the cross-action filed by the defendants, E. S., C. W. and R. R. Carey, there had been a settlement and accord and satisfaction, and all parties thereto had been discharged; that such differences were settled and satisfied during the first of the year 1922, wherein as a part of said general settlement it was agreed that W. T. Willis should be protected from the Carey Bros. Oil Company's obligations and his liability thereon, and that his part thereof would be and was paid by E. S. Carey in pursuance of said settlement. The case was submitted to the jury upon special issues, in response to which the jury found as follows:

"(1) At the time the defendant E. S. Carey acquired the one-tenth interest of the defendant W. T. Willis of the Carey Bros. Oil Company, it was not agreed and understood that E. S. Carey would assume and pay off W. T. Willis' portion of all outstanding indebtedness.

"(2) At the time E. S. Carey paid the one-ninth part of the indebtedness in question, he did so because W. T. Willis refused to allow him to have his interest in the said $72,000 note executed by R. M. Waggoner to W. T. Willis.

"(3) There was no settlement in January, 1923, had between W. T. Willis and E. S. Carey of differences existing between, including the matter in controversy between them in this lawsuit.

"(4) At the time E. S. Carey bought a one-tenth interest in Carey Bros. Oil Company from W. T. Willis, he (E. S. Carey) did not agree to assume the then indebtedness against the interest which he bought."

Guy Rogers and J. E. Childers pleaded that they were subsequent indorsers to the Carey Bros. and were not liable as original makers. The suit is against all of the defendants as partners. The note upon which the action is based is a partnership debt, and the fact that the individual partners indorsed the note, instead of signing upon its face, does not change their liability as between themselves. There was an agreement made in open court and recited in the judgment, to the effect that the bank would prosecute its suit against the defendants Guy Rogers, W. T. Willis, and J. E. Childers, as indorsers only. This stipulation was entered into in consideration of the waiver by the above-named defendants of a plea in abatement which they had filed, setting up the fact that the matters in controversy in this suit were also issues in a different suit between the same parties pending in the Eighty-Ninth district court. This stipulation is binding upon the bank alone, and under its terms the liability of the above-named three defendants to the bank is governed by the law as it applies to the indorsers.

The pleadings of both Willis and E. S. Carey show that the written release and the note given by Carey to Willis, for $2,000, are only parts of the contract referred to in their respective pleadings. The material parts of the contract rest in parol, and the court did not err in permitting the evidence from both parties as to its terms. Willis alleged a certain contract, and even under a general denial Carey should have been...