Young v. Bank of Miami

• Decision Date: 25 October 1913
• Citation: 161 S.W. 436
• Parties: YOUNG et al. v. BANK OF MIAMI.
• Court: Texas Court of Appeals

161 S.W. 436

YOUNG et al. v. BANK OF MIAMI.

Court of Civil Appeals of Texas. Amarillo.

October 25, 1913.

On Motion for Rehearing, December 13, 1913.

Appeal from District Court, Hemphill County; C. E. Gustavus, Special Judge.

Action by the Bank of Miami against D. J. Young and others. Judgment for plaintiff, and defendants appeal. Affirmed.

H. E. Hoover, of Canadian, and Ewing & Dial, of Miami, for appellants. B. M. Baker, and G. O. McCrohan, both of Canadian, and J. A. Holmes, of Miami, for appellee.

HUFF, C. J.

The statement of the allegations in plaintiff's petition by appellants is adopted by us, as the appellee concedes that it is substantially correct. The statement of exceptions and pleas of defendants will not be made, as we think our opinion will otherwise disclose the issues made thereby:

"This suit was filed in the district court of Hemphill county, on the 20th day of December, 1912, by T. M. Cunningham, L. B. Robertson, W. S. Martin, T. J. Boney, and others, a partnership engaged in a general banking business at Miami, Tex., under the firm name of the Bank of Miami, against D. J. Young, Robt. Moody, Thos. F. Moody, and W. S. Martin. The plaintiff alleged: That on and prior to the 21st day of September, 1912, the defendants were engaged in a general banking business as partners, at Miami, under the firm name of the Bank of Miami, and on that day the plaintiff organized the partnership and purchased the banking business of the defendants, and continued the business under the firm name of the Bank of Miami, and that the purchase included the banking business, real estate, books, notes, accounts, and overdrafts of the defendants. That a written contract was entered into between the parties, which included an obligation on the part of the defendants to guarantee the payment of all notes, overdrafts, accounts, and other paper due at the time of the sale to the Bank of Miami, but said guaranty being given in consideration of the purchase price paid by plaintiff for said banking business and under such conditions as follows: That all the notes, overdrafts, etc., due and to become due the bank were to be collected by the newly organized bank, in so far as collections could be made by notice and demand on the debtors; that, if same could not be so collected, plaintiff was to turn over the paper not collected to an attorney, selected by defendants, for collection by suit, and defendants were to sue on all of said paper so turned over and prosecute to judgment thereon promptly and collect by execution. If collection could not be thus made by execution, then defendants were to pay plaintiff all the money due on the paper not so collected. That thereafter they requested the defendants to designate an attorney, and the defendants designated H. E. Hoover, and thereafter they presented to said Hoover many of the notes, accounts, and overdrafts, and requested him for the defendants to bring suit upon and collect the same. That Hoover, acting for the defendants, accepted certain of the overdrafts and notes for collection, but rejected many others, and turned them to the plaintiff and notified the plaintiff the defendants would not undertake the collection of the same and denied all liability and responsibility thereon under the contract. That, by their act in refusing to take charge of said collections and refusing to put same into judgment and denying liability thereon, the defendants broke their contract with plaintiff, and plaintiff alleged that, pursuant to the terms of said contract, it presented to said attorney certain overdrafts and notes which are set out in the pleadings; that the attorney accepted all of said notes and overdrafts so presented for collection except the note of G. C. Nickel, Geo. Nickel, H. C. Harris, five notes of Tom Cook, and the note of J. G. Ramsey, and the note of W. G. Crawford, and all of the overdrafts, except the overdraft of S. M. Bird, J. G. Ramsey, and H. E. Ratloff (these notes and overdrafts refused being the only items in controversy in this suit). In the seventh paragraph of the petition the plaintiff charges that the defendants, by breaching the contract and denying liability on said notes and overdrafts, had damaged plaintiff in the sum of $25,000, and prayed for judgment for the amount due on the notes and overdrafts, attorney's fees and interest, and, if that should not be allowed, then it prayed for judgment for the amount due on all overdrafts, said notes, attorney's fees, and interest shown to have been rejected by the defendants, and, if same should be rejected, then the decree of the court fixing the liability of defendants; prayed for a writ of mandamus for costs of suit."

The trial court made the following findings:

"Findings of Fact.

"First. I find that on and prior to September 21, 1912, defendants D. J. Young, Robert Moody, Thomas F. Moody, and W. S. Martin were the owners of a banking business, located at Miami, Tex., conducted by them as copartners, under the firm name of the Bank of Miami, Tex., and will hereinafter be referred as to the `Old Bank.'

"Second. That on September 21, 1912, said defendants sold said banking business to the defendant W. S. Martin and his associates, being the plaintiffs named in the petition, who continued to conduct the said banking business as copartners using also the firm name `The Bank of Miami, Texas,' and will be hereinafter referred to as the `New Bank.'

"Third. That the sale of said banking business by the old bank to the new bank was evidenced by a written contract, of date September 21, 1912, with two supplements thereto, admitted in evidence on the trial, and that said contract fixed the rights, duties, and liabilities of all of the parties.

"Fourth. That when said contract was entered into there was owned and in possession of the old bank, as a part of its assets, the following notes and overdrafts, which were owing to it, to wit: Note of H. C. Harris, for $206, dated July 6, 1909, due 90 days; interest 10 per cent. from maturity, bearing a credit of $117, dated September 22, 1911. Note of G. C. Nickel and Geo. W. Nickel for $51.25, dated March 3, 1910, due 90 days; interest 10 per cent. from maturity, bearing credit of $20, dated October 3, 1910. Note of W. G. Crawford for $37, dated August 15, 1910, due 90 days; interest 10 per cent. from maturity, bearing credit of $2.43, undated; another credit, interest paid to January 20, 1911; another credit of $15 dated September 13, 1911; and another credit `interest paid to January 4, 1912.' Four notes of Thomas Cook, one for $694.66, one for $500, one for $1,000, and one for $1,500, all dated December 27, 1911, due six months after date, bearing interest at the rate of 10 per cent. after maturity, and one note of Thomas Cook for $1,650, dated September 1, 1912, due one day after date, bearing interest at 10 per cent. from date. Overdraft against S. M. Bird for $2,601.25 and overdraft against J. G. Ramsey for $214.29. And that said notes and overdrafts are the only items involved in this suit, and were included within the terms of the contract of September 21, 1912.

"Fifth. That the evidence introduced did not show that the old bank held any security for the payment of said notes and overdrafts, except the Thomas Cook notes, upon which obligations it held collateral as follows: Two notes from Fred D. Kline and Ulricka Kline, payable to the order of Andrew E. Larson, indorsed in blank, without recourse, by the latter, and also indorsed by Thomas Cook, dated May 6, 1910, one for $1,000 due on or before May 6, 1913, and the other for $2,700, due on or before May 6, 1915, both bearing interest at 7 per cent. from date, and were secured, as the testimony showed, by a mortgage on some land in the state of Oklahoma, upon which there were some prior incumbrances of approximately $4,000, and that the land was subsequently sold at sheriff's sale under foreclosure of one of the prior incumbrances; and four mortgages in the form of deeds executed by Thomas Cook to W. S. Martin for some town lots in Hereford, Tex.; and a tract of land in Castro county, Tex., containing 327 acres.

"Sixth. That the new bank, after its purchase of the banking business and the execution of the contract of September 21, 1912, and within 30 days, in substantial compliance of said contract, attempted to collect said notes and overdrafts, but failed to do so, and such indebtedness is still owing and unpaid.

"Seventh. That the new bank, in substantial compliance with the contract of purchase and within a reasonable time, and without breach or waiver of its rights under said contract, requested D. J. Young to select and designate an attorney to sue upon said notes and overdrafts, and collect them by judgment and execution if possible, with the end in view of complying with the terms of said contract of purchase, and holding the old bank liable for the ultimate payment of all of said indebtedness, in accordance with the terms of said contract.

"Eighth. That in pursuance of the request of the new bank, for the selection and designation of an attorney, the defendant D. J. Young, acting for the old bank, under the terms of said contract, did on November 11, 1912, select and designate H. E. Hoover, Esq., an attorney of Canadian, Tex., to handle said indebtedness, and notified the new bank thereof, which was in substantial compliance with said contract.

"Ninth. That the said H. E. Hoover accepted the designation of himself, and thereupon and thereby became the agent and representative of the old bank to act for them in the premises, and defendants are bound by his acts in reference to the indebtedness mentioned.

"Tenth. That correspondence was conducted between the new and old banks during the months of October and November, 1912, prior to November 19, 1912, as shown by the letters offered in evidence; some of the letters referring to some of the items of indebtedness mentioned, but not to all...