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SOUTHERN COMMERCIAL & SAVINGS BANK v. COMBS et al. (No. 1230.)
(Court of Civil Appeals of Texas. Amarillo. May 22, 1918.)
1. BILLS AND NOTES @:342 – Bo NA FIDE PURCHASERS–PURCHASE FROM MAKER-INDORSEMENT OF PAYEE – “DUE COURSE OF TRADE.” Where one acquires negotiable paper from the maker thereof, even before maturity, which bears the indorsement in blank of the payee, the note is not acquired in due course of trade, and such purchaser takes it, not as a bona fide holder, but subject to all outstanding equities. [Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Due Course of Business.]
2. BILLS AND NOTES G->524 – BONA FIDE PURCHASERS—EVIDENCE. . Evidence held to show that defendant bank did not acquire notes in suit in good faith and in due course of business.
3. APPEAL AND ERROR 621170(3, 7)—SCOPE OF REVIEW – MATTERS NOT NECESSARY TO DECISION. Questions on appeal as to sufficiency of pleadings, admission of evidence, and depositions are immaterial, where no prejudice resulted, in view of rule 62a (149 S. W. x), prohibiting a reversal of judgment on the ground of error of law unless the appellate court is of the opinion that the error amounted to a denial of rights reasonably calculated to cause the rendering of an improper judgment.
Error from District Court, Dallam County; D. B. Hill, Judge.
Suit by Mrs. Laura E. Combs and husband against L. E. Finley, the Southern CommerCial & Savings Bank, and Others. for plaintiffs, and defendant Bank brings error. Affirmed.
Veale & Lumpkin and Kimbrough, Underwood & Jackson, all of Amarillo, for plaintiff in error. Tatum & Tatum, of Dalhart, for defendants in error.
HALL, J. Mrs. Laura E. Combs, joined by her husband, filed this suit in the district court of Dallam county against L. E. Finley, Ike Lévingston, J. L. Callahan, J. L. NeWell, and Southern Commercial & Savings Bank, alleging in Substance that defendants in error were the owners of certain land and perSonal property Situated in Dallam County, Tex.; that they were induced by the fraud of Finley, Levingston, and One Steffins, the agent of Levingston, to convey Said property to one J. L. Callahan; that thereafter within a short time Callahan conveyed said property to Levingston in consideration of seven notes, executed by the said Levingston to Callahan, One in the sum of $5,000 and the other six for $150 each, and to secure the prompt payment of Said notes Levingston, joined by his wife, executed a deed of trust upon said property; that Southern Commercial Savings Bank,
with notice of the fraud perpetrated upon
said defendants in error, purchased Said notes. The transaction is set out at great length in the pleadings, and the prayer is that the deed conveying the property to Callahan and the deed from Callahan to Levingston, together with the deed of trust executed by Levingston and wife to Newell as trustee, be canceled and held for naught; that the cloud thereby cast upon the title of defendants in error be removed and that they have judgment for costs. Plaintiff in error bank answered by general and special exceptions, general denial, and by special answer alleged that it was an innocent purchaser for value before maturity of the notes mentioned; that it purchased the same on or about November 30, 1914, in due course of trade; that the consideration given therefor being that Said bank at the instigation of the defendant Steffins and the defendant Levingston loaned to the defendant LeWingston the Sum of $3,500, and took said notes from the defendant Steffins as collateral security for the note executed by the defendant Levingston; that said bank exercised ordinary care to ascertain the value of said notes as well as the security given for them, thereby obtaining Said notes and deed of trust as Collateral Security for its loan of $3,500 to Levingston. By way of cross-action plaintiff in error bank sought to recover upon its Said note for $3,500, and by Virtue of the provisions in deed of trust declared the $5,000 mote and the six $150 notes all due by reason of a failure on the part of the makers to pay the first note of $150, and prayed for judgment upon all Of Said notes, for a foreclosure of its pledgee's lien on the collateral notes, and for foreclosure of the deed of trust upon the property in Dallam county. Upon a trial before the court without a jury there was judgment for defendants in error in accordance with the prayer of the petition and awarding a writ of possession. It is conceded by plaintiff in error that the evidence is sufficient to show that Levingston and Finley obtained the deed from Mrs. Combs by fraud, but it is insisted by plaintiff in error that it is an innocent purchaser for Value before maturity Of Said notes and as Such purchaser should be protected. Under this contention the inquiry is, Does the record contain evidence to Support the judgment O the court against plaintiff in error?  The rule is established in this state that where one acquires negotiable paper from the maker thereof, even before maturity, which bears the indorsement in blank of the payee, the note is not acquired in due course of trade, and such purchaser takes it, not as a bona fide holder, but subject to all outstanding equities. Texas Land & Mortgage Co., Ltd., v. Cooper et al., 67 S. W. 173, and authorities there cited; Smith V. COOley, 164 S. W. 1050 (writ of error denied). It was shown that W. A. Kammerer was the cashier of
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plaintiff in error bank and resided in St. Louis, where it seems the fraud WaS perpetrated. He testified that he made the loan to Levingston which was secured by the $5,000 note and the deed of trust in question; that the $5,000 note was signed by Ike Levingston and Wife, M. R. Levingston, payable to the order of J. L. Callahan, and indorsed in blank by Callahan; that about four or five days before he made the loan. On NOWember 30th Steffins came into the bank with LevingSton; that “Steffins made the arrangements, did the talking,” and said that he had a $5,000 note and deed of trust on some land in Texas, Bnd wanted to know “if the note and deed of trust were put up back of the note signed by Levingston if the bank would lend money on it”; that when Steffins and Levingston came to the bank Steffins gave Witness the notes and papers, witness drew up the $3,500 collateral note, which Mr. Levingston signed, And the amount was credited to Levingston's "ccount. It further appears that Finley and Steffins were employed by Levingston as his agents, to assist him in disposing of Some unprofitable laundry property which Levingston owned in St. Louis, and that this transaction is a part of their effort along that line. J. F. Edwards, a witness for defendant in error, testified that he saw W. A. Kammerer in the bank in St. Louis on the morning of March 8th; that in a conversation With Kammerer the witness explained the matter to him and that Kammerer Said he had investigated the value of the land, but had left it to Levingston; that he knew nothing about Callahan; and that he got the notes from Ike Levingston and Was holding them as collateral for Levingston's debt. The witness Ed
Wards further Stated that Kammerer told him that he held the papers in the bank in eScroW before the deal was consummated, and that Finley, Levingston, and Steffins left them in there together With a bill Of Sale Of the laundry, and that the deal was made in the early part of November, the papers remaining there until the first Of December. WitneSS Edwards repeated his statement that Kammerer told him Levingston had delivered the notes to him, and did not say anything about Steffins having delivered them; that the bill of sale to the laundry was held for Finley; and that the notes and deed Of trust Were held for Levingston. . This evidence, when considered in connection with other testimony in the record, not necessary to be set out here, is sufficient to Warrant the Court in concluding that the bank did not acquire the notes in question in good faith and in due course of business. The slightest degree of diligence in making inquiry Would have enabled Kammerer, as an officer and representative of the bank, to learn of the fraud out of which the notes originated. Determination of the question presented by the first two assignments practiCally decides the entire controversy.  There are a number of Other questions relating to the sufficiency of the pleadings, admission of evidence, and deposition testimony Which become immaterial in View of what has heretofore been said under rule 62a (149 S. W. x). These assignments are all overruled, and the judgment is affirmed.
HUFF, C. J., not sitting, being absent in Austin assisting committee of judges.
OWEN et al. v. SMITH. (No. 854.)
(Court of Civil Appeals of Texas. El Paso.
1. APPEAL AND ERROR G-1071(6)–HARMLEss ERROR – FAILURE TO FILE FINDINGS AND CONCLUSIONS. Since the right of a party on proper demand to have findings of fact and conclusions of law filed in a case tried without a jury is one given by statute, the court on appeal cannot say that the failure to make them, or, having made them, to file them in time, is harmless error.
2. APPEAL AND ERROR 3:3527 (2) - SCOPE OF REVIEW. Findings of fact and conclusions of law not filed within the time required by law cannot be considered on appeal.
Appeal from District Court, San Saba County; N. T. Stubbs, Judge.
Action by L. C. Smith against Huts Owen and another. Judgment for plaintiff, and defendants appeal. Reversed and remanded.
Walker & Burleson, of San Saba, for appellants. J. H. McLean, of Llano, for appellee.
WALTHALL, J. L. C. Smith brought this suit in the district court of San Saba county against HutS Owen and Jim P. Kelley to recover On a note for $937.63, the note being given in extension of the balance due on two former notes of defendant’s; said tWO former notes being secured by a chattel mortgage on SteerS.
The steers were sold by appellants, defendants below, and the proceeds placed in the San Saba National Bank, against which appellants checked, among Other things, for the purchase price of 112 head Of heifers, thereby exhausting the bank account, and leaving unpaid the balance due On Said tWO former notes for Which the renewal note Sued on was given. J. E. Odiorne, Who at that time had charge of the business affairs of the bank, realizing that the bank had permitted the Security fund to be misapplied, had appellants to execute the renewal note and a chattel mortgage On the 112 head of heifers, with the promise to appellants that he (Odiorne) Would try to get Smith to carry same, and which Smith did accept upon the representation by Odiorne that 50 head of said heifers WOuld be shipped out in a few days, and the proceeds applied as a Credit On Said note. A few days after the execution Of the renewal note and the mortgage on the heifers, upon the representations made by Odiorne to appellants to the effect that Smith WaS not Satisfied With Said arrangement, and that the heifers Would have to be shipped out and sold, appellant Kelley Sold his equity in Said heiferS to Odiorne and the bulk of said heifers were then shipped to market and sold.
Appellants admit the execution and delivery of the renewal note and mortgage, and by Cross-action alleged Substantially that Odiorne was the agent of Smith in the transaction of the renewal note and mortgage; that at the time they executed the note and mortgage On the heifers they informed Odiorne that if they could hold said cattle for 60 days they had said cattle sold for $39.50 per head; that in a few days after the renewal note and the mortgage was made Odiorne informed appellants that Smith had instructed him that he did not make loans on heifers and that the cattle would have to be shipped to market; they further alleged that the StatementS SO made by Odiorne Were false and fraudulently made for the purpose of inducing them to turn said cattle over to Smith. T#1ey allege that they protested against shipping the cattle; that the market had declined and that said cattle then Shipped Would lose money; but believing the said Statements to be true, and that Smith had SO instructed, they were induced thereby to let said cattle be shipped. They allege a loss of $8.30 per head. Appellee denied the allegation of fraud and false statements. The case was tried without a jury, and judgment Was rendered for appellee. Appellants, by demand entered of record, requested the trial court to file findings of fact and conclusions of law. The judge filed findings Of fact and Conclusions Of law, but not Within the time required by the statute. The failure to file Such findings and conclusions is made the ground of the first assignment of error. An agreed Statement of facts approved by the court was filed, and the contention of appellee is that the failure to file the findings and conclusions in time is harmless and not a proper ground for reversal. There is a clear conflict in the evidence on m0re than One material issue from Which the trial court might have arrived at either conclusion on the issues tendered. In approving the bill of exceptions to the failure to file conclusions of fact and law, the trial judge States that such findings and conclusions Were prepared in due time, but that On acCount of being engaged in the trial of a murder case in another county he failed to send his findings and conclusions to the clerk Within the time required, and States that he did not refuse to file Same, but that his attention was not called to the matter of such filing, and that While engaged in the trial of the murder case the matter of Such filing was forgotten. We make this statement in justice to the trial judge, and to show that it was through no fault of appellants that the findings and conclusions were not duly filed. The cases involving the question presented are not altogether harmonious. We think We need not enter into an extended discussion of the question but refer to the following cases which present the Views entertained by this
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Findings of fact and conclusions of law not filed within the time required by law cannot be considered On appeal. Standard Paint & Wall Paper Co. v. Rowan, 158 S. W. 251; Houston Oil Co. of Texas v. Ragley McWilliams Lumber Co., 162 S. W. 1183. Appellants have the right to have the trial court, who had Witnesses before him, pass upon and make findings upon the tWO material COntroVerted issues of fact tendered in the Case, Viz. agency and false and fraudulent repreSentations Of the alleged agent. The assignment must be Sustained.
Reversed and remanded.
defendant, which collision is alleged to have taken place upon the county road, known as Richardson pike, in Dallas county, Tex., alleged to have been caused by the negligent Operation of the automobile being run by and in control of the defendant's agent. The Specific prayers were for the sum of $72.90, alleged to have been required to repair plaintiff's automobile, the sum of $90, alleged to have been the reaSOnable Value of the use of Said car during the period it was out of commission, and the sum of $450, alleged to have been the difference in market value of plaintiff’s automobile before and after the collision. “In addition to the demurrers in defendant’s answer, the defendant pleaded in defense a general denial, and for Special answer that the plaintiff was guilty of careless and negligent operation of his automobile and thereby caused the Collision, and also that the plaintiff Was guilty of Violating the Speed laws of the state of Texas, and was guilty of Con
tributory negligence. And the defendant ask
ed in CrOSS-action for the Sum of $58.17, which Was the amount defendant paid for the reasonable repair of its automobile after the Collision.” This accident was a collision between two autos on the Richardson pike leading from Dallas about 8:30 or 9 o'clock at night. One, a Ford, was being driven by W. B. Thornton, a traveling man working for appellant, Who Was returning to Dallas after a trip Out in his territory, and who was then Within 6 Or 7 miles Of Dallas. At the point Of collision there Was a hill, and the road curved and then sloped in both directions. Appellee was driving a six-cylinder Saxon, and had four passengers With him going from Dallas to FarmerSWille. The Collision damaged both cars, but hurt none of the occupants. The evidence sharply conflicts as to the negligence Of each, Which CauSed the accident, and it was an issue for the determination Of the jury. Verdict and judgment were rendered for plaintiff for $162, and against defendant On its CrOSS-action. Plaintiff entered a remittitur of $72, leaving the judgment for $90, from which this appeal was taken by appellant.  The first error assigned complains of the third paragraph of the court’s main charge, Which reads as follows:
“Violation of the speed law is not in itself negligence, but becomes so when it is the proximate cause of the damage.”
It is contended:
“That said paragraph of the charge is contrary to the law of this state, in that the violation of the criminal statute limiting the speed of automobiles on public highways to a speed of 18 miles per hour is negligence per se, contrary to the declaration of said paragraph of said charge, all as shown by defendant’s bill of exception No. 8.”
 We are of the opinion that under the
law the Violation Of the act Of the Legislature regulating the Speed Of autoS Operated. On
highways is negligence per se, and is punishable criminally, but such negligence is not actionable for damage unless it Was the proximate cause of the injury. The said paragraph of the charge was inaptly expressed, but we think it was not calculated to mislead the jury; therefore it was harmless. Railway Co. v. Ison, 37 Tex. Civ. App. 219, 83 S. W. 408; Railway Co. v. Nixon, 52 Tex. 19; Railway Co. v. Nycum, 34 S. W. 460. The second assignment of error presented complains of the court's refusal to give the following Special charge, to Wit: “You are instructed that the laws of the state of Texas provide: ‘That no "person in charge of an automobile or motor vehicle on any public road, street or driveway, shall drive the same at any speed greater than is reasonable and proper, having regard to the traffic and use of the public road, street or driveway by others, or so as to endanger the life or limb of any person thereon,’ and if you believe and find from the evidence in this case that the plaintiff, J. E. Crawley, at the time of the accident herein complained of, was driving his automobile on a public road at a speed greater than was reasonable and proper, and without having regard to the traffic and use of said public road by others, or if you believe and find from the evidence that he was so driving his automobile as to endanger the life or limb of any person on said public highway, then I charge you that the plaintiff, J. E. Crawley, was guilty of contributory negligence as a matter of law as the same is defined in the main charge.”
There was no error in refusing this charge. The charge aSSumes that as a matter Of law
it would be contributory negligence in violating the automobile speed law in operating an auto on a highway, whether or not such Violation was the proximate CauSe Of the injury. The court did not err in refusing the requested charge No. 3, for said charge Contains practically the Same error as is Contained in No. 2, and therefore subject to the Same objection.
 The fourth assignment is: “The court erred in paragraph 11 of the main charge in which the jury is charged that ‘the burden is on the defendant to prove contributory negligence on the part of the plaintiff, if any, for the reason that the plaintiff, while on the witness stand, made admissions, which admissions were to be determined by the jury as to Whether or not the same constituted negligence and for the court to so instruct the jury would be upon the weight of the evidence, as shown #. defendant's bill of exception No. 11, filed erein.”
The appellant pleaded contributory negligence on the part of appellee, and therefore assumed the burden Of proving it. The appellee did not plead it, nor did his evidence ShoW contributory negligence so as to change the burden of proof; therefore there was no error in the court's charge. The court charged the jury, in effect, that if both parties were guilty of negligence to find for neither. The jury adopted the theory of appellee's evidence and found accordingly.
The judgment is affirmed.