Court Opinion

ID: 9828690
Source: CourtListenerOpinion
Date Created: 2023-09-01 18:37:42.369225+00
Date Added: 2024-06-11T07:42:51.884074
License: Public Domain

On Motion for Rehearing.
We have concluded that we were in error in holding that the evidence herein is sufficient to show that appellee was an accommodation endorser of the note in suit. If appellee had not been connected with the bank, either as an officer, director or stockholder, he would .have been, under the facts, an accommodation endorser of the note. But, in view of the fact that he was an officer, director and stockholder in the Bank, he cannot here be considered as an accommodation endorser.
After a careful consideration of the authorities, we have definitely decided that it is the settled law of this State that where an officer, director and stockholder of a *443bank signs a note of the bank, either as maker or endorser, with the view of improving the assets of the bank and to en■able it -to borrow money, he is not in law regarded as an accommodation signer or ■endorser, and such note is not accommodation paper. The personal interest which ■such officer, director and stockholder has in seeing the hank secure the money it needs and the benefit which he may ultimately receive by reason of such loan to the bank is in part the consideration for his signature, and he cannot be regarded as ■an accommodation signer of the note.
The authorities to this effect are numerous: 8 C.J. pp. 255 and 256, § 403; 11 C.J.S., Bills and Notes, page 297, § 742; 7 Am.Jur. p. 939, § 244; 95 A.L.R. Annotations pages 534 et seq.; Robertson v. City Nat. Bank, 120 Tex. 226, 36 S.W.2d 481; Shaw v. McShane, Tex.Com.App., 50 S.W.2d 278; Barr v. Huitt, Tex.Civ.App., 76 S.W.2d 587; Whiteman v. Bishop, Tex.Civ.App., 289 S.W. 730; Com. Nat. Bank v. Goldstein, Tex.Civ.App., 261 S.W. 538; Exum v. Mayfield, Tex.Civ.App., 286 .S.W. 481.
Appellant contends that even though the paper may have been based upon a consideration, so long as it was hypothe-cated with the Reconstruction Finance Corporation, that after the Reconstruction Fi-nante Corporation was fully paid and the note returned to the Commercial National Bank, it became accommodation paper as between him and the Bank. We overrule this contention, because, first, the note being based upon a consideration it was not accommodation paper, and, in the second place, appellant having permitted the note to remain for some time as an asset of the Bank and to be transferred to the appellant ■as an asset of the Bank is not now in a position to assert that the note is not a binding obligation as to him. This is true notwithstanding the fact that the Bank never became insolvent and notwithstanding the fact that the officers, directors and stockholders of the appellant may have bad full knowledge of all the facts surrounding appellee’s signing of this note, ■because in the eyes of the law the note was based on a consideration.
What is said in Markville State Bank v. Steinbring et al., 179 Minn. 246, 228 N.W. pages 757, 759, has a bearing here. The Court says: “The question of estoppel has not been greatly urged in the arguments. Upon the facts here presented, it seems quite clear that defendant is es-topped from questioning the validity of this note as an asset of the bank. By taking part in the reopening of the bank as one of its directors, inducing such reopening on the faith of his note, holding it out by his reports to the banking department as a valid asset, and remaining a director for many years, he should now be estopped from questioning the validity of his note. The bank, by reopening and continuing in business for many years, has so changed its position, on the faith of this and other assets contributed to enable it to reopen and continue in business, that it must be apparent that to now hold this note and other like securities of no value would result in serious loss and injury to the bank. Defendant concedes that, as to creditors of the bank in case of insolvency, he would be estopped. We think' the facts shown here go beyond that and show an estoppel as against the claim of the bank as well.”
In the case at bar the note being based upon a consideration at the time it was signed by appellee, it became a binding obligation and not subject to the contention that it was accommodation paper. The jury finding that there was not any consideration is contrary to the law and cannot support the judgment for appellee.
The above holdings are based upon facts apparent of record and fundamental in their nature and must be noticed, though not properly presented in appellant’s brief.
Appellee contends that inasmuch as appellant extended the time of payment of the note without his consent he was thereby released. The note contained the following provision: “and consent that time of payment may be extended without notice thereof to any of the sureties of this note.’’ This constituted a waiver on the part of appellee of his right to be notified of any extension of time of payment and gave his consent that time of payment might be extended. Darby v. Farmers’ State Bank, Tex.Civ.App., 253 S.W. 341; National Bank of Commerce v. Kenney, 98 Tex. 293, 83 S.W. 368; Jackson v. Home Nat. Bank, Tex.Civ.App., 185 S.W. 893; Commonwealth National Bank v. Goldstein, Tex.Civ.App., 261 S.W. 538; Sharpe v. National Bank, Tex.Civ.App., 272 S.W. 321.
Appellee contends further, however, that he not only did not consent to the exten*444sion, but, on the contrary, refused to sign the extension agreement, thereby withdrawing any consent he may have previously given. Having consented in a written stipulation in the note to any extension of time of payment, it is doubtful if he could thereafter revoke that consent. However, having already concluded that the note was based upon a consideration appellee was not a surety and secondarily liable thereon, but was primarily liable. While the extension agreement signed by Graves would not be binding on appellee, it did not have the effect of releasing appellee from his primary’liability on the note.
The motion for a rehearing is granted, the judgment of the trial court reversed and judgment here rendered that appellant recover of appellee the full amount of principal, interest and attorney’s fees provided for in the note sued on herein, together with costs of this and the court below.
Reversed and rendered.