Court Opinion

ID: 9831393
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:03:14.113773+00
Date Added: 2024-06-11T07:43:34.272606
License: Public Domain

On Motion for Rehearing.
On original hearing this court reversed the judgment of the trial court, and remanded the cause, for the reason that we were of the opinion that the court committed reversible error in the admission of certain evidence, consisting of statements made by Alf Smith to Dee Word and Frank Emeriek, sheriff, out of the presence of appellant, Mrs. M. A. Smith, and without her knowledge. This holding is challenged by appellees upon the ground that such declarations of Alf ¡Smith, a party to the assignment, and made while he was still the owner and holder of the note, were relevant and proper circumstances to be considered by the jury in determining whether the transfer afterwards made was bona fide and for a valuable consideration. It is insisted that this is a fraud case, and that great latitude is allowed in that class of cases, both in the pleadings and in the proof, since the party alleging fraud must usually have recourse to circumstantial evidence. Cases cited in support of the contention are Wright v. Linn, 16 Tex. 35; Mayo v. Savoni, 1 White & W. Civ. Cas. Ct. App. § 218.
The argument as presented is very persuasive, and has somewhat shaken our confidence in our previous holding. However, the authorities cited by appellees were cases involving fraudulent conveyances of goods, in which both the intention of the vendor and the intention of the vendee were material upon the issue as to whether the conveyances were in fraud of creditors. Here we are 'dealing with the question of the rights of a person claiming to be an innocent holder of commercial paper. The rule is well settled that in such cases, if the purchaser has acquired the paper before maturity and for value, and under circumstances not tending to show bad faith, the burden is upon the adverse party to show notice of the defenses, as indicated in our former opinion. Failing to show notice of the vice in the paper, the rights of the purchaser beforé maturity in such circumstances are complete, and the title good as against defenses not known to the purchaser before his purchase. Such being the law, it is difficult to see how the purchaser of commercial paper can be affected by statements made by the assignor, out of the presence of and without the knowledge of the purchaser, even though made while he was still the owner of the paper. But, be that as it may, we think there are other grounds upon which we should reverse our previous holding, and must now decide that there was no reversible error in admitting the evidence in question.
It is urged by appellees that the assignments on this point, must be held to be wholly insufficient, because it appears that appellants have not assigned error to the introduction of this particular portion of the testimony, but that the assignments relate to other testimony which was clearly admissible. It is further insisted that, even if the assignments be sufficient to raise the question, the bills of exception show that the objections below went to the entire testimony, and not specifically to the part which we held to be inadmissible. The rule is invoked that, when the objection is made to the entire testimony shown in the bill, and part of it is admissible and part inadmissible, the case will not be *738reversed because it may be made to appear that part of the evidence was really inadmissible. It seems to be settled by the decisions of our Supreme Court that in such circumstances it is not the duty of the trial court to separate the admissible testimony from the inadmissible, and to apply the objections in the latter, but that it is the duty of counsel to do so, and to point out specifically each, part of the testimony objected to. G. H. & S. A. Ry. Co. v. Gormley, 91 Tex. 393, 43 S. W. 877, 66 Am. St. Rep. 894; Jamison v. Dooley, 98 Tex. 206, 82 S. W. 780; Scott v. Townsend, 106 Tex. 322, 166 S. W. 1138. Other cases to the same effect are: Dolan v. Meehan (Tex. Civ. App.) 80 S. W. 99; Wells v. Hobbs, 57 Tex. Civ. App. 375, 122 S. W. 451; Lanham v. Lanham, 62 Tex. Civ. App. 431, 146 S. W. 635. As to the sufficiency of the assignments based on such bills of exception, see Mott v. Ins. Co. (Tex. Civ. App.) 154 S. W. 658; O’Brien v. Von Lienen (Tex. Civ. App.) 149 S. W. 723.
We have carefully examined the assignments and the bills of exception under each. The proposition presented under these assignments indicates that what the appellants were really complaining of was the introduction of the statements and alleged fraudulent representations of Alf. Smith at the inception of the note, and not to his subsequent statements and conduct just before he parted with the note and made the bill of sale to the goats to Mrs. M. A. Smith. We are disposed to agree with appellees that the assignments do not raise the question upon which we l-eversed the judgment below. But, if the assignments and the proposition thereunder should be deemed sufficient to present the question, we think that, in deference to the rule announced by our Supreme Court, we should hold that the assignments must fail because the bills of exception show that the objections were made to the entire testimony shown in the bills, a part of which was unquestionably admissible. We adhere to the view that the fraudulent representations and conduct of Alf Smith in inducing the execution of the note were admissible, whether Mrs. M. A. Smith was present or not, as this proof tended to establish the issue that the note had its inception in fraud. If the other statement subsequently made should be conceded to be inadmissible, the objection is not available here, because the bills did not show that they were urged specifically against the inadmissible testimony, but were made as an entirety. This ruling applies not only to the statements of Alf Smith to Dee Word, but also to the testimony of the sheriff, Frank Emerick. We are of the opinion that at least so much thereof as related to his having an execution which he was about to levy upon the goats of Alf Smith, which were then still in the possession of the latter, and had not been sold to Mrs. M. A. Smith, that he presented this execution to Alf Smith and deferred the levy at the request of the latter, and that the next day he discovered that Alf Smith had transferred the goats, and was shown the bill of sale to the same by the county clerk, was admissible. If the rest of the testimony was inadmissible, it would avail appellants nothing because of their failure to separate and apply the objections to it.
In the view we now take of the case, there remains but one other question to consider. Appellants insist that the evidence in this case is insufficient to sustain the verdict and the judgment.
We have given the most' careful consideration to all the evidence in the record, and have concluded that, while the evidence impeaching the good faith of Mrs. Smith in the purchase of the note and her claim that she paid value for the same is largely, if not wholly, circumstantial, it is sufficient to support the verdict. It was admitted by Mrs. Smith that she paid Alf Smith $1,000 but one time, which she claims was for the purchase of the note in question, and that this was paid about the latter part of March. Her attention was called to the bill of sale from Alf Smith to herself, dated March 26, 1918, conveying the goats, and reciting a cash consideration of $1,000, together with other consideration. When questioned about this bill of sale and the $1,000 consideration therein recited, Mrs. Smith disclosed a singular ignorance about it, and a poor memory about the entire transaction. This, together with the other circumstances in the case, was sufficient to warrant the jury in concluding to adopt the appellees’ theory of the case, that the $1,000 paid by Mrs. Smith, through her check to Alf Smith, was not in payment for the note, but was part of the consideration for the sale of the goats. If this was true, then Mrs. Smith undoubtedly paid nothing of value for the note, and it was in her hands subject to the defenses urged. It must be remembered that the burden had shifted to her to prove that she-had paid value for the note and had acquired it in good faith, the appellees having proven fraud in the inception of the note. The jury were the exclusive judges of her credibility, and had the opportunity of witnessing her demeanor and manner of testifying, as well as her interest in the case. Their finding should not be disturbed unless manifestly wrong.
It is true, as indicated in our former opinion, that the attorney for Mrs. Smith testified, to statements made by her and by Alf Smith, in his presence, that Mrs. Smith had purchased the note; that he drew up a check for her in payment thereof, which she signed and delivered to Alf Smith; and to other circumstances indicating á bona fide purchase. However, this is not sufficient to overcome *739the other circumstances in the case, inasmuch as these statements and this conduct may have all been agreed to and performed by design of the parties in order to deceive the attorney and to strengthen the apparent purchase.
All other assignments have been considered and are overruled. Our former judgment will be set aside and the judgment will be affirmed.
Motion granted.