Case Name: BEARD et al. v. AUSTIN STATE BANKING COM'R
Court: Texas Court of Civil Appeals
Jurisdiction: Texas
Decision Date: 1927-06-16
Citations: 297 S.W. 786
Docket Number: No. 3426
Parties: BEARD et al. v. AUSTIN STATE BANKING COM’R.
Judges: 
Reporter: South Western Reporter
Volume: 297
Pages: 786–787

Head Matter:
BEARD et al. v. AUSTIN STATE BANKING COM’R.
(No. 3426.)
Court of Civil Appeals of Texas. Texarkana.
June 16, 1927.
C. A. Martin, of Paris, for appellants.
R. B. Eubank, of Paris, for appellee.

Opinion:
LEVY, J.
(after stating the facts as above). The appellants assign error in that "the court erred in holding that the note sued upon was a completed instrument, and that the defendants were bound to pay the same as their obligation." It was not disputed that the note sued upon was executed by two sureties and left in the possession of the bank upon the mutually agreed condition that another should sign as principal, and that unless so signed at an early date such note was not to be retained and held as an obligation, and the condition was not complied with. The failure of compliance with the condition was through no fault on the part of the appellants. Although the interest on the prior note was paid, yet the prior note was not delivered up to the appellants, signers of the new note, and the new note was not intended by any of the parties as a payment of the other note until and unless the mutually agreed condition was complied with.
There was no delivery of the note to the bank, with intention or purpose of the parties of giving effect thereto; and therefore the legal effect attaching to the facts is to deny the enforcement of the collection of the particular note by the bank, or the appellee as its legal representative. Steffian v. Bank, 69 Tex. 513, 6 S. W. 823; Coleman v. Easton (Tex. Com. App.) 249 S. W. 200; Foster v. Bank & Trust Co. (Tex. Com. App.) 288 S. W. 438.
The appellee insists that, as appellants were by force of law primarily liable-for the pre-existing debt in virtue of surety-ship, they would not be relieved against liability upon the present note for failure to procure the signature of another person also primarily liable for the pre-existing debt. The authorities cited are 1 Joyce on Defenses to Com. Paper, § 35, and Garrison v. Nelson (Tex. App.) 19 S. W. 248, and section 192, Neg. Inst. Act (Rev. St. 1925, art. 5948). That rule is inapplicable and may not be invoked in the present suit, as the note was incomplete and there had been no delivery for the purpose of giving effect thereto. There was merely a conditional delivery, as mutually intended by the parties. Consequently the note became ineffectual as such between the immediate parties to the agreement. Sections 15 and 16, Neg. Inst. Act (Rev. St. 1925, art. 5932). The present suit is entirely between the immediate parties to the agreement. The contention of appellee assumes that there had been delivery of the note for the purpose of giving effect thereto, although lacking a signature agreed to be placed thereon. After a note has been actually unconditionally delivered, the act of delivery is not revocable. The distinction is one of material character. As the present note was never delivered nor intended by the parties to be delivered unconditionally for the purpose of giving effect thereto, it was not valid or effectual between the immediate parties for any purpose, without compliance with the condition. The appellee's remedy was to sue on the prior note or the debt itself.
The judgment is reversed, and judgment is here rendered in favor of the appellants, without prejudice to a suit on the prior note or the debt itself. The costs of appeal and of the trial court are taxed against the ap-pellee.