Court Opinion

ID: 3920430
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:47:34.624088+00
Date Added: 2024-06-11T14:16:20.397898
License: Public Domain

On Rehearing.
Upon more mature consideration of this case on rehearing and by reason of a suggestion made by the new associate justice of this court, we have concluded that we erred in our original opinion in our disposition of one of the questions there discussed. It is now our opinion that the duty rested upon appellee, as a condition precedent to its right of recovery on the note sued upon herein, to surrender, upon the trial of this cause, the renewal note executed by appellant Hall, or to make proof that same had been destroyed and had not been negotiated. This conclusion is supported by many authorities, including the Supreme Court of this state. Otto v. Halff  Bro., 89 Tex. 384, 34 S.W. 910, 59 Am. St. Rep. 56; 2 Daniel on Negotiable Instruments (6th Ed.) § 1272, p. 1434; Jackson v. Brown, 102 Ga. 87, 29 S.E. 149, 66 Am. St. Rep. 156; Keyser v. Hinkle et al., 127 Mo. App. 62, 106 S.W. 98.
In the last case cited the court, in discussing a situation similar to the one presented in this case, uses the following language:
"The only condition imposed on him by law was to account for the renewal note in order that defendant might not be compelled to pay the same debt twice."
In the case of Jackson v. Brown, supra, it is stated:
"It seems to be a well-established rule of law, that where a bill of exchange or negotiable note is taken for a prior debt, a party cannot recover upon the original consideration unless the bill or note is produced to be cancelled at the trial, or unless it appears that it cannot be enforced by a third person."
In the case of Otto v. Halff  Bro., supra, our own Supreme Court states the rule in this language:
"If suit be brought upon the original consideration, and the note be negotiable, the plaintiff must show that it has not been transferred and is lost or destroyed, or he must produce and surrender it." *Page 257 
The evidence in this case clearly brings it within the rule above announced. It was the duty of appellee, who was plaintiff below, upon the trial of this cause to produce the renewal note executed by appellant Hall, or to properly account for same. Having failed to do so, it was not entitled to a judgment upon the original note, and for this error a reversal is ordered.
In view of another trial of this cause, we think it proper to call attention to the state of the pleadings in order to avoid a possible error upon retrial. As disclosed in the original opinion, appellants pleaded an express contract with appellee whereby the renewal note was to be taken and accepted by appellee in discharge of the note sued upon. They did not plead that such contract was in writing, but, in support of the pleading, introduced the letter copied in the original opinion. Parol evidence was introduced to establish the fact that this letter did not embody the full terms of the contract between the parties, and that it was written through mistake. Grave doubts have arisen in the minds of some members of this court as to whether this parol evidence should have been considered, in the absence of a pleading attacking the written offer contained in the letter. No assignments raise the question here of the sufficiency of the pleading to admit this proof or challenge the sufficiency of the evidence to support the verdict in this particular, but, in view of the well-established rule that a judgment must rest upon competent testimony, we think it proper to call attention to the fact that there is no pleading in this case as a predicate for the oral testimony varying the terms of this letter. We do not determine whether such pleading was necessary, and do not decide the many questions of law suggested by the situation, because they are not properly raised, but we make the above suggestion to the end that the question may be simplified upon the next trial of this cause.
Were we to undertake to determine in the present state of the record the question of whether or not the letter and the renewal note completely evidence a payment and discharge of the note sued on, the case would have to be reversed and remanded anyway, because we cannot say, as a matter of law, that Hedrick, the cashier, had authority to accept the new note as payment and discharge of the old note. We may presume existence of the authority of such officer to discharge the note upon its payment in money. But it by no means follows that authority will be presumed to give such discharge by accepting something other than money in payment. First State Bank v. H. H. Lang, 55 Mont. 146, 174 P. 597, 9 A.L.R. 1139. Had the pleadings declared upon the letter as a part of the agreement claimed to be a novation, then no proof of the authority of the cashier would have been necessary, in the absence of a sworn plea of non est factum. But the pleadings gave no notice that a contract in writing was relied on, and no plea of want of authority was necessary to put upon defendants the burden of proving authority. Missouri State Life Insurance Co. v. Boles (Tex.Civ.App.) 288 S.W. 271; T.  P. Ry. Co. v. Byers Bros. (Tex.Civ.App.) 73 S.W. 427.
For the reasons indicated, the motion for rehearing will be granted; the judgment heretofore entered by this court in this cause will be set aside; the judgment of the trial court will be reversed, and the cause remanded for a new trial.