Case ID: sw2d_4/html/0307-01.html
Source: Caselaw Access Project
Author: {"author": "HIGGINS, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LOWRIE v. CAMPBELL LUMBER CO. et al.
    (No. 2129.)
    Court of Civil Appeals of Texas. El Paso.
    March 15, 1928.
    Rehearing Denied April 5, 1928.
    I.Mortgages <§=>25(5) — Mortgagee’s failure to advance entire amount covered by deed ■ of trust held not to invalidate contract, but simply rendered it unenforceable to extent of such failure.
    Where plaintiff agreed to lend $28,000 to defendant for completion of apartment house on defendant’s note secured by deed of trust, which were delivered, but because of controversy arising out of defendant’s failure to erect garage on mortgaged lot plaintiff advanced only $25,600 and refused to advance balance, held ■ that there was a partial failure of consideration which did not invalidate contract evidenced by •note and deed of trust, but simply rendered it unenforceable to extent of ■ such failure, as against defendant’s' contention that plaintiff could recover only amount actually advanced on quantum meruit.
    2. Cancellation of instruments <§=>24(2)— Mortgagor desiring to rescind contract evidenced by note and deed of trust must restore or tender amount received.
    If mortgagor desired to rescind contract evidenced by note secured by deed of trust because of mortgagee’s failure to advance entire amount for which such instruments were given, it was incumbent on him to restore or tender the amount of money actually advanced.
    3. Mortgages <§=>25 (6) — Exclusion of evidence that mortgagee’s agents understood garage was not to be built on mortgaged lot held not error.
    Where plaintiff agreed to lend $28,000 to defendant for completion of apartment house on defendant’s note secured by deed of trust, which were delivered, but because of controversy arising out of defendant’s failure to erect garage on mortgaged lot plaintiff advanced only $25,600 and refused to advance balance, exclusion of defendant’s evidence that plaintiff’s agents knew and understood that garage was not to be built on said lot held not error, since it related to issue of partial failure of consideration for which defendant mortgagor had received full credit on mortgage.
    Appeal from District Court, Bexar County; Robt. W. B. Terrell, Judge.
    Suit by the Campbell Lumber Company and others against C. R. Lowrie, in which the Mortgage Bond Company’ of New York and others intervened. From an adverse judgment, defendant appeals.
    Affirmed.
    W. M. Groce and J. B. Lewright, both of San Antonio, for appellant.
    Church, Lawley & Graves, Terrell, Davis, Huff. & McMillan, and Cunningham, Mour-sund & Johnson, all of San Antonio, for ap-pellees.
   HIGGINS, J.

The Campbell Lumber Company and others brought this suit against appellant, Lowrie, to recover debts due each of them for materials used in the cónstruction of an apartment house in the city of San Antonio; to establish and foreclose statutory materialmen’s liens upon the house and lot. A receiver of the property was appointed as prayed for. Later various other parties intervened, among them being the Mortgage Bond Company of New York, hereinafter referred to as the bond company, or as ap-pellee.

The original plaintiffs and interveners, other than the bond company, need not be further noticed. No question is here presented concerning tie judgment as it affects tie ■otier parties. Tie controversy iere affects only tie iond company and Lowrie.

Tie iond company declared upon a note of Lowrie and deed of trust securing tie note. Tie note was dated January 20, 1925, in tie principal sum of $28,000, to tie order of ap-pellee, payable in installments, witi 7 per cent, interest coupons attacied. Tie note contains tie usual accelerating maturity clause in case of default in tie payment of interest and tie usual attorney’s fee clause of 10 per cent.; also provides for 10 per cent, interest after maturity. Default in tie payment of interest was alleged and tie exercise of tie option to mature. Tie deed of trust bore even date witi tie note and covered tie premises upon wiici tie iouse was situate. A credit of $2,400 upon tie principal was admitted in tie petition; also payment of certain of tie interest coupons.

Judgment was sougit for tie principal sum of $25,600, witi interest, attorney’s fees, and foreclosure of deed of trust.

In addition to a general denial and homestead plea, wiici was decided against iim and as to wiici no question is iere raised, Lowrie answered by lengtby special plea, wiici may be summarized as follows; He admitted ie signed and delivered tie note and deed of trust, but alleged same was not binding upon or effective against iim because same was a. part of an entire transaction and contract in tiis: Prior to January 20, 1925, defendant was constructing tie apartment iouse; before said date he applied to appel-lee through its agent, Leonard-Hensley-Starkey Company of San Antonio, for a loan upon tie premises for the purpose of paying debts incurred in tie partial construction of tie building and completing same; appellee and its agents agreed to lend iim $28,000 for such purpose, and defendant accepted said offer; “it was agreed that said $28,000 should be advanced as needed for the purpose aforesaid ;” it was agreed that tie note and deed of trust should be executed and delivered, but witi tie understanding and agreement that tie. same should not “take final effect and become binding upon” defendant until tie entire $28,000 was advanced; said iouse was completed, but appellee had advanced only $25,600, wherefore tie note and deed of trust bas not become effective and binding upon 'defendants; same are null and void, and tie bond company is precluded and estopped from claiming a lien, and can recover, if at all, only $25,600 “as upon a quantum meruit, upon open account as for money had and received.”

A peremptory charge was given in favor of tie appellee for $25,600, witi interest and attorney’s fees, as prayed for, in accordance witi wiici verdict was returned and judgment rendered.

. Tie evidence does not raise an issue of conditional delivery of tie note and deed of trust as by tie defendant alleged. Eor tiis reason those propositions are overruled wiici proceed upon tie theory that tie note and deed of trust were not to become binding upon and effective against appellant, until' tie entire $28,000 was advanced.

In view of the admitted signing and delivery of tie instruments it may be doubted whether any condition inconsistent with their terms could be ingrafted thereon by parol evidence, in tie absence of fraud or mistake. Holt v. Gordon, 107 Tex. 137, 174 8. W. 1097.

Otier propositions assert that because of the failure to advance tie balance of $2,-400 as agreed, appellee cannot maintain suit upon tie note and deed of trust, but can recover only tie money actually advanced; that appellee hás not substantially performed its agreement to advance $28,000, for wiici reason it can recover only on a quantum meruit or implied contract. The failure to make the final advance grew out of a disagreement between tie parties arising out of the failure of appellant to build an eight-stall garage upon tie premises; appellee contending that it was a part of tie improvements agreed to be placed upon tie lot. Appellant contends that appellee’s agents knew such garage was not to be built upon the land.

As we view tie matter, it makes no difference which party was correct in that controversy. Admitting tie garage was not a part of the improvements contemplated to be built and covered by tie lien, tie failure of appel-lee to make tie final advance of $2,400 presents only a question of partial failure of consideration, wiici was admitted by appel-lee and for which appellant received credit. This partial failure of consideration does not invalidate tie contract evidenced by the note and "deed of trust. It simply rendered the same unenforceable to tie extent of the failure. 3 R. C. L. Bills and Notes, § 142; 41 G. J. Mortgages, § 210; Joyce, Defenses to Commercial Paper, §§ 343, 349; Williams v. Finley, 99 Tex. 469, 90 S. W. 1087; Coleman v. Galbreath, 53 Miss. 303; Watts v. Bonner, 66 Miss. 629, 6 So. 187.

If appellant desired to rescind tie contract evidenced by tie note and deed of trust, and thus defeat the same, it was incumbent upon iim to restore or tender tie $25,600 actually advanced. 8 C. J. Bills .and Notes, §§ 1008, 1205, p. 922. This he did not do.

Evidence was excluded tending to show that appellants agents knew and understood tie garage was not to be built upon tie lot. Tiis matter presents no error, for if admitted it would not have affected tie right of appellant arising out of tie failure to advance the balance of $2,400. Tie evidence relates to the issue of partial failure of consideration, and appellant received full credit for such failure.

It is further contended tie court.erred:

(1) In allowing interest at the rate of 10 per cent, per annum from the' accelerated maturity date, it being asserted that the provision in the note allowing interest at the rate of 10 per cent, per annum from maturity did not apply to such accelerated maturity. (2) In allowing recovery upon past-due interest coupons because the petition did not declare thereon and was insufficient to support recovery of the interest represented by such coupons.

Upon examination of the provision of the note relating to 10 per cent, interest after maturity, and the allegations of the petition, we regard these objections as untenable.

Affirmed. 
      <§=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes