Case Name: HANDLEY v. FIRST NAT. BANK OF CANYON
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1912-06-15
Citations: 149 S.W. 742
Docket Number: 
Parties: HANDLEY v. FIRST NAT. BANK OF CANYON.
Judges: 
Reporter: South Western Reporter
Volume: 149
Pages: 742–743

Head Matter:
HANDLEY v. FIRST NAT. BANK OF CANYON.
(Court of Civil Appeals of Texas. Amarillo.
June 15, 1912.)
1. Pledges (§ 58 ) — Action on Collatebal— Allegations of Indebtedness.
In an action on a note by a person holding it as collateral security for a debt of the payee, he must allege and prove nonpayment of the secured debt.
[Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 186-194; Dec. Dig. § 58. ]
2. Pledges (§ 58 ) — Action on Note Pledged — Pleading and Pkoof.
In an action on a note, the consideration for which has failed as between the maker and payee, by a person holding it as collateral security for a debt of the payee, defendant may prove, under the general issue, that the note was pledged to secure the payment of a debt other than that alleged by plaintiff, without filing the sworn plea required by Sayles’ Ann. Civ. St. 1897, art. 313, when a defendant wishes to dispute the genuineness of the assignment or indorsement of the note sued on.
[Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 186-194; Dec. Dig. § 58. ]
Appeal from District Court, Lubbock County; W. R. Spencer, Judge.
Action by tbe First National Bank of Canyon against W. L. Handley. Judgment for plaintiff, and defendant appeals.
Reversed and remanded.
Matbes & Williams, of Plainview, for appellant. B.ean & Klett, of Lubbock, for ap-pellee.
For other oases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep’r Indexes

Opinion:
HALL, J.
Tbe appellee bank filed tbis suit against appellant to recover upon two promissory notes in tbe sum of $1,000 each, executed by appellant and payable to J. J. Dillard. By supplemental petition, appellee alleged that tbe notes bad been assigned and transferred to it to secure a certain note in tbe sum of $3,620.55, dated April 4, 1909, due 120 days after its date, executed by Dillard and payable to said bank. Tbe appellant pleaded that tbe notes sued upon were without consideration; that they were procured by fraud; that appellee was not a bona fide bolder; and that tbe notes were never transferred to secure said note for $3,-020, given by Dillard to appellee.
Tbe facts upon wbicb tbe plea of failure of consideration is based are specifically pleaded and established by appellant's testimony, and are not controverted by the evidence of Dillard or any other witness.
Tbe court peremptorily instructed tbe jury to return a verdict against appellant, and from tbe judgment based upon tbis verdict appellant appeals, and submits tbe case upon several assignments of error, which it will not be necessary for us to consider in full.
Briefly stated, appellant's contention is that the notes in question were not deposited with appellee bank to secure the Dillard note for $3,620.55, but were deposited, if at all, on March 17, 1909, to secure an entirely different note, executed by Dillard to tbe bank on that date, in the sum of $2,745.40. There is no testimony in tbe record as to tbe payment of tbe last-named note.
Appellee insists that, because there was no affidavit filed by appellant, under Sayles' Civil Statutes, art. 313, averring that tbe assignment or indorsement of Dillard was forged, appellant therefore bad no right to question the fact alleged by appellee that tbe notes bad been pledged with appellant as collateral for tbe $3,620.55 note. We cannot sustain tbis contention. Before appellee could recover upon tbe collateral notes, it must allege and prove that tbe debt wbicb they were pledged to secure was not paid; and, under tbe general issue, without any sworn plea, appellant bad tbe right to prove, if be could, that they bad been deposited to secure another and different obligation of tbe original debtor, Dillard.
Since tbe judgment must be reversed, and the cause remanded for another trial, it is not proper for us to pass upon the sufficiency of tbe testimony, further than to say that, in our opinion, it was sufficient to require tbe trial court to submit that issue to tbe jury.
Because tbe court erred in peremptorily instructing a verdict, tbe judgment is reversed and tbe cause remanded.