Court Opinion

ID: 9675116
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:42:30.956799+00
Date Added: 2024-06-11T12:15:22.673991
License: Public Domain

On 'Motion for Rehearing by Pláintiff and Intervenor
HUGHES, Justice.
In order that there may be no misunderstanding, we hold that J. M. Craugh was personally liable on the $23,000 note, but that the suit against him is barred by the four year statute of limitation. He was liable on the note because he signed it without limitation. Art. 5932, Sec. 20 and Art. 5936, V.A.C.S.
Appellants contend that there was a fact issue of fraud. They say:
“Craugh himself proves the fraud-when he testified- that after he gave Cockrell the note and letter, that he1 never intended to pay it, even though he promised to do so by the note and *520letter of April 11, 1952. * * * In addition the entire record and this very law suit reflects nothing less than an attempt by Craugh to defraud the man who had been his benefactor. Let us ask the question which proves the point. If Craugh did not and does not intend to defraud Cockrell, why does he not now personally honor the debts he personally made and acknowledged on April 11, 1952. Mr. Craugh has made no attempt whatever to make any sort of payment on the $23,000.00 obligation and has made no payment on the $14,275.00 balance. Yet, Mr. Craugh’s palatial home in Highland Park evidences a princely standard of living.”
Certainly the fact that an obligation is not honored is insufficient evidence of fraud, otherwise fraud would always be present to defeat .the statute of limitations.
The statement of Mr. Craugh that he never intended to pay the note was not all of his testimony on this point.
The note was signed by both the corporation and Mr. Craugh. It was the position of Mr. Craugh that the debt was the debt of the corporation rather than his personal obligation.
The note was given in part payment for sixty shares of stock in the corporation owned by Mr. Cockrell and by him transferred to the corporation the day the $23,-000 note was executed. The cash payment for the stock, $2,000, was made by check drawn on the corporation.
Mr. Craugh had written Mr. Cockrell as follows:
“In view of the fact that you gave me the opportunity of buying your 60 shares of stock in J. M. Craugh & Company, I wish also to thank you and do mutually agree herewith at a price of $25,000.00 as being the value of your 60 shaires and herewith accept full responsibility of paying to you this amount in full. * * * ”
Mr. Craugh testified:
“Q. Now, how do you reconcile the statement you just made that this is the debt of the corporation with this obligation you made over your signature? A. Well, in the first place, it is written on J. M. Craugh & Company stationery. We paid Mr. Cockrell $2,000 with J. M. Craugh & Company check, and as far as I am concerned personally, I never have been worth $23,000. I couldn’t pay it personally, but I accepted the moral responsibility as president of J. M. Craugh & Company to see that the amount was paid, and I told Mr. Cockrell that on many occasions. I still tell him that. * *
“Q. Mr. Craugh, at the time you gave this note to Mr. Cockrell, did you ever personally intend to pay it? A. Personally?
“Q. Yes, sir. A. I intended to see that it was paid, as president of J. M. Craugh & Company arid as a moral responsibility as president.
“Q. As president of the company? A. Yes, sir.
“Q. And, that was what you intended to do? A. Yes, sir.
“Q. But, personally you never intended to pay it; is that right? A. I couldn’t pay it personally.
“The Court: Just answer the question, sir.
“Q. Personally, did you ever intend to pay this $23,000.00 note? A. I intended to see that it was paid—
“The Court: Just answer the question sir. A. No, I didn’t intend to.
“Q. Personally you never intended to pay him? A. No, no.”
On a bill of exceptions Mr. Craugh testified :
“Q. I show you Plaintiff’s Exhibit 1, the note in question, and I believe *521you testified yesterday that was prepared by Miss Fairchild? A. Yes, yes.
“Q. What were your instructions to her as to whose note it was to be? I mean, did you tell her to prepare a note for your— A. She heard a conversation between Mr. Cockrell and me.
“Q. And, prepared the note? A. Prepared the note.
“Q. Did you, in signing that note, intend to sign it in your capacity as an individual, or in your capacity as president of J. M. Craugh & Company? A. Definitely as president of the company because I didn’t have any money in my personal account. I couldn’t have paid for it if I had signed it that way.
“Q. Was it your intention to assume individually the responsibility for this note? A. No, sir; other than morally as president of J. M. Craugh & Company.
“Q. When, in your letter of April 11th, you referred to yourself, you said ‘I’ —what happened to that letter ? Do you have that letter? (Obtaining instrument.) When, in your letter, you say that ‘herewith accept full responsibility of paying to you this amount in full’ — In what capacity were you speaking? As J. M. Craugh as an individual, or as J. M. Craugh, president of J. M. Craugh & Company? A. As president of J. M. Craugh, signed on J. M. Craugh & Company stationery.”
This was a jury case in which motions for instructed verdicts were made by both sides and were both partly sustained and partly overruled, and in which the Trial Court filed findings of fact. One of these findings was:
“That no fraud was committed by Defendant J. M. Craugh or by J. M. Craugh & Company in these transactions involving loans by Plaintiff Cock-rell to Defendant J. M. Craugh & Corn-pany and the purchase of J. M. Craugh & Company stock.”
We believe the excluded evidence was admissible, not to defeat liability on the note, but to rebut the inference of fraud which appellants seek to draw from Mr. Craugh’s statement that he never intended to pay the note.
Without considering this excluded evidence we find no evidence of fraud which would prevent the running of the statute of limitations. Appellants had four years during which no payment was made on this note in which to conclude that neither Mr. Craugh nor the corporation intended to pay it prior to the lapse of the statutory period. We do not believe the statement made by Mr. Craugh seven years after the note became due added anything new to the situation.
Appellant’s contention that there was a relationship of trust and confidence between Mr. Craugh and Mr. Cockrell which prevents the running of limitations is completely without support. These gentlemen were personal and business friends, but there is no evidence that they did not deal with each other at arms length and in accordance with the independent judgment of each.
The evidence that Mr. Cockrell accepted the note because “we were good friends and I had utmost trust and confidence in him” is insufficient evidence of fraud, the rule being that “The mere relationship of friendship will not cause the law to infer such confidence and influence as raises a presumption against the validity of the transaction.” 20-A Tex.Jur. p. IS.
The motion is overruled.