Opinion
Writ of error refused.
January 17, 1929. Rehearing Denied January 24, 1929.
Appeal from District Court, Grayson County; Silas Hare, Judge.
Suit by the American Bank Trust Company against A. M. Ferguson. The plaintiff Trust Company was dissolved, the suit was prosecuted to judgment by others acting as directors and trustees of the dissolved corporation, and defendant appeals. Affirmed.
See, also, 295 S.W. 929.
By this suit, commenced January 17, 1925, the American Bank Trust Company, incorporated under the laws of Texas, one of the appellees on this appeal, sought a recovery against appellant, A. M. Ferguson, of the amount of his two promissory notes dated October 5, 1921, for $5,000, interest and attorney's fees, each, payable to the order of said bank and trust company in one and two years, respectively, after their said date. Later the bank and trust company was dissolved, and the suit was prosecuted to a judgment by the other appellees in their capacity as directors and trustees of the dissolved corporation. At the trial appellant admitted that appellees had a good cause of action as set forth in their pleadings, "except [using the language of rule 31 for the government of district and county courts] in so far as it may be defeated in whole or in part by the facts of the answer constituting a good defense which may be established on the trial." Appellant's contention in the court below, renewed here, was that "the facts of the answer constituting a good defense," "established on the trial," were that the notes were without a consideration, or, if they ever had a consideration, that same had failed. It appeared from evidence adduced at the trial that the Ferguson Seed Farms, a corporation, and the Scott-McKown Gin Milling Company, also a corporation, were indebted to the bank and trust company in sums they were unable to pay, aggregating more than $100,000. Appellant, Ferguson, owned, and controlled practically all of the stock of the corporations, and as indorser of paper evidencing said indebtedness was liable to the bank and trust company for same. Negotiation between appellant and the bank and trust company resulted in the transfer by the latter October 5, 1921, of all said indebtedness and security it held for same to Dick Chapman, in consideration of $40,000 paid by him to the bank and trust company, and the further consideration, the bank and trust company claimed, of the two promissory notes sued on. There was evidence that the notes were not executed on the day of their date, which was also the date of the transfer to Chapman, but were executed about a week later. Appellant contended that the transaction resulting in the transfer to Chapman was not between him and the bank and trust company, but was between the latter and Chapman; and that the notes were not a part of the consideration for said transfer, but were merely evidence of a gift of $10,000 he contemplated making to the bank and trust company to reimburse it for a part of its loss because of the failure of the corporations to pay their indebtedness to it in full.
Testifying as a witness, appellant said his undertaking to make the gift was conditioned on the corporations continuing in business and earning and being able to spare the money necessary to enable him to make it, and that his undertaking was put in the form of promissory notes to enable the bank and trust company to make a showing to bank examiners, and that it was understood between him and the bank and trust company that it was to hold the notes as an escrow, payable only if and when the earnings of the corporations were sufficient and could properly be used for the purpose, a contingency which he said never happened.
Appellees' contention, supported by evidence adduced by them, was that the transaction resulting in the transfer to Chapman was not between the bank and trust company and Chapman, but was between that company and appellant, Ferguson; that Ferguson offered to pay the bank and trust company $50,000 as a settlement in full of the indebtedness of the corporations to it; that the offer was accepted; that Ferguson later said he could obtain only $40,000, and offered to pay the bank and trust company that amount and execute the notes sued upon, together making the amount of his first offer; that the bank accepted the changed offer; and that the transfer to Chapman was made at Ferguson's instance and in performance of the agreement reached as stated between the bank and trust company and Ferguson.
On special issues submitted to them the jury found as follows: (1) That it was not agreed between the bank and trust company and Ferguson that the notes were not to be paid by the latter, but were to be paid out of assets, if any, of the Ferguson Seed Farms. (2) That the notes were Ferguson's "obligation without condition." (3) That the notes were not made for the accommodation of the bank and trust company. (4) That the notes were given by Ferguson and accepted by the bank and trust company "as a part of the agreed settlement of the indebtedness owing by the Ferguson Seed Farms, the Scott-McKown Gin Milling Company, and A. M. Ferguson to said bank."
The judgment rendered by the court on the findings was in appellees' favor against appellant for the sum of $16,360, the amount of the notes.
F. L. Henderson, of Bryan, and L. D. Griffin, of Plainview, for appellant.
Freeman, McReynolds Hay, of Sherman, for appellees.
Contentions presented by the assignments are that the trial court erred (1) in overruling the motion to change the venue of the cause, on the ground of prejudice against appellant in Grayson county; (2) in refusing appellant's request that a special issue specified be submitted to the jury; (3) in admitting specified testimony over appellant's objection; and (4) in not granting appellant a new trial because of alleged misconduct of counsel for appellees in arguing the case to the jury. In the view we take of the record the contentions should be overruled, and the judgment affirmed, because (if for no other reason) of the admission of appellant at the trial set out in the statement above. It is settled that such an admission "admits [quoting from the opinion of the Commission of Appeals in Smith v. Frost, 254 S.W. 926] every fact alleged in the plaintiffs' petition, the proof of which is necessary to their recovering in the first instance, and is an abandonment of all defensive matter set up in defendant's answer, except that in the nature of confession and avoidance." And see Ferguson-McKinney Dry Goods Co. v. Bank, 31 Tex. Civ. App. 238, 71 S.W. 604; Meade v. Logan (Tex.Civ.App.) 110 S.W. 189; Haile v. Coker (Tex.Civ.App.) 267 S.W. 1010; Rector v. Evans (Tex.Com.App.) 288 S.W. 826; Finger v. Whitworth (Tex.Civ.App.) 294 S.W. 285: Federal Life Ins. Co. v. Wilkes (Tex.Civ.App.) 218 S.W. 591. The plea in the answer that the notes sued on were without a consideration was not a plea in confession and avoidance, and by the admission referred to appellant was in the attitude of having abandoned it. The only matter in the nature of confession and avoidance set up in the answer was that the consideration for the notes had failed. There was evidence tending to show that the notes may have been without a consideration, but none tending in the least to show that if they ever had a consideration it failed. Appellant having admitted appellees' cause of action was a good one, and having failed to adduce any evidence in support of his plea in confession and avoidance, the judgment appealed from was the only one which properly could have been rendered by the court. Dashiel v. Lott (Tex.Com.App.) 243 S.W. 1072.
Therefore the judgment is affirmed.