Court Opinion

ID: 9447094
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:25:22.981005+00
Date Added: 2024-06-11T17:30:53.808373
License: Public Domain

RIVES, Chief Judge
(concurring in affirmance, but dissenting from the failure to modify and increase the judgment) .
While I concur to the extent of at least affirming the judgment against *307Head, I could hardly do so if I were not of the opinion that Head is liable on the promissory note the same as Edmiston. Butterfield’s letter proposal (Plaintiff’s Exhibit No. 1) and Head’s letter (Plaintiff’s Exhibit No. 2) each stated that Head’s obligation to repay the $50,000 to Wollmann would be evidenced by a note. The only language that I find in the agreement (Plaintiff’s Exhibit No. 3) obligating Head to pay the sum of $50,000 to Wollmann is that referring to the note:
“The First Party has this date executed a promissory note payable in nine months from date at the rate of 2% interest to Second Party to reimburse him for the money advanced for the completion of the above described well.”
I accept all of the fact findings of the district court except the finding not necessary to support its judgment to the effect that the Wymotex stock had a value of some $2 a share at the time the transaction was closed.1 Among other such findings which I accept are the following:
“* * * I find that Head did not intend to authorize Edmiston to execute the promissory note (as distinguished from the written contract) as Head’s agent. It was contemplated by all concerned that Head and Butterfield would sign individually, and on their own behalf, and that the three would constitute joint makers.”
When, however, Head found it necessary to leave town and be absent from the meeting in his office, Edmiston was spurred on by a sense of urgent necessity to definitely close the transaction, and to do so he undertook to sign both the note and the agreement on behalf of Head (and of Butterfield as well as of himself).2
*308While Edmiston expected Butterfield and Head thereafter to sign the note, he added the word “Trustee” after his own signature to signify that he was acting not only for himself, but also for Head and for Butterfield. That is made clear by the agreement entered into at the same meeting (Plaintiff’s Exhibit 3), “by and between Adler Edmiston, Trustee for Gordon B. Butterfield, Homer S. Head, and Adler Edmiston, Harris County, Texas, known as the First Party and Dr. A. A. Wollmann, Jr., of Huron, South Dakota, known as the Second Party.” The agreement recites that, “The First Party has this date executed a promissory note. * * * ” Throughout that agreement, Edmiston is referred to as “Trustee” with the meaning that he is acting for himself and his two co-venturers.3 The testimony is without dispute that, notwithstanding Edmiston’s lack of authority to execute the promissory note (as distinguished from the written contract) as Head’s agent, Ed-miston actually did purport to act on account of Head (as well as of Butter-field and himself) in signing the note, and, hence, his execution of the note could be ratified by Head for “ * * * ratification does not result from the af-firmance of an act, unless the one acting purports to act on account of another.” 1 A.L.I., Restatement of Agency, § 85, p. 204.
Texas has the Uniform Negotiable Instruments Law, which includes Article 5932, Section 18, Vernon’s Annotated Civil Statutes of Texas, the statute to which the district court referred.4 That *309section is followed by two other sections which appear pertinent.5 Clearly, the addition of the word “Trustee” to Edmiston’s signature did not exempt him from personal liability on the note.6 **As between the original parties, however, it was permissible to prove, and was in fact shown by the contemporaneous agreement (Plaintiff’s Exhibit 3), that the word “Trustee” was meant to indicate that Edmiston was acting not only for himself, but also for Head and for Butterfield. As between the original parties, the rule is well settled in Texas, as elsewhere,1,7 that:
“In considering bills and notes as evidencing an agreement between the parties, application is made of the fundamental rule that other instruments executed at the same time, for the same purpose and in the course of the same transaction are to be construed therewith, — that is, all the papers are given the same effect as though they were in fact a single instrument.” 6 Tex.Jur., Bills and Notes, § 47, p. 644.8
Head’s actual signature to the note was the means by which Edmiston had expected that his assumption of authority would be ratified. That was not, however, the exclusive mode of ratification. When Head, with full knowledge of the fact, either by having the note presented to him for his signature, or by the terms of the agreement referring to the note, joined in accepting the benefits (or what were then hoped would be benefits) of the $50,000 check which Dr. Wollmann delivered to Edmiston in return for the note and the other obligations, and joined in expending that fund over a long period of time, he effectually ratified and approved Edmiston’s execution of the note on his behalf.9 It cannot be said that that conduct amounted to no more than an unnecessary ratification of the agreement already authorized, for two reasons: (1) The agreement itself, as executed, showed that the “First Party,” which included Head, had executed the promissory note. (2) In parting with his $50,000, Wollmann relied on the promissory note as well as on the agreement, and he had a right to rely on both. That conduct would result in ratification even if it should be assumed, contrary to the weight of the evidence (see footnote 3 to majority opinion), that Head had theretofore repudiated any liability *310on the note by flatly refusing to sign it.
“The affirmance by the principal of a transaction with a third person is not prevented from resulting in ratification by the fact:
*****
“(b) that the purported principal, before affirming, had repudiated the transaction, if the third person has not acted or has failed to act in reliance upon the repudiation.” 1 A.L.I., Restatement of Agency, § 92, p. 227.
I would hold Head liable on the promissory note the same as Edmiston.

. My views on that finding are expressed in footnote 4 to the majority opinion.

. Edmiston testified, in part, as follows:
“Q. Would you have signed this note, for instance, if you hadn’t understood that Mr. Butterfield and Mr. Hoad were going to sign it, too, as a personal obligation! A. No, sir. I didn’t sign it personally. I put ‘trustee’ down there. I was with them all.
“Q. In other words, you thought you were signing this note in accordance with this general agreement and contract that you all had drawn up, is that right? A. That’s right, yes, sir.
*****
“Q. Now, Mr. Edmiston, had Mr. But-terfield or Mr. Head expressly authorized you to sign that note for them? A. No, sir.
“Q. Now, you signed the contract referred to as Plaintiff’s Exhibit No. 3 pertaining to this deal, did you not? A. Yes, sir.
“Q. Did you understand, with Dr. Wollman (sic), that that contract was to be signed by Mr. Butterfield and Mr. Head? A. No, sir.
“Q. Now, if the note was to bo signed by them — A. Yes, sir.
“Q. —why wasn’t this contract to be signed by them? A. Because I was appointed trustee to close the deal and handle it.
“Q. Well, you were appointed trustee by whom? A. Well, they — ■
“Q. Mr. Butterfield and Mr. Head? A. I was to handle the well and close the deal, that’s all.
“Q. In connection with that matter, were you also authorized to sign the note? A. No, sir.
*****
“Q. Now, Dr. Wollman (sic) did, in fact, give you a check, a good check for $50,000.00 there on March 10th, in Mr. Head’s office, didn’t he? A. Yes, sir.
“Q. And you took that and deposited it in the Second National Bank, didn’t you? A. Yes, sir.
“Q. And it was paid, and you had that money available to put in the venture, didn’t you? A. Yes, sir.
“Q. Now, you weren’t intending to wait until somebody else signed something before Dr. Wollman (sic) paid the money over to you and you accepted it, were you? A. Now, wait. Just what was that?
“Q. You weren’t intending to wait until somebody else signed a note before you got the money from Dr. Wollman (sic), were you? A. Well, the well at that time, we had to go and tend to it right quick, or they were going to close the well down, and I had the drillers waiting on $600.00 a day time.
“So I didn’t wait — I figured they all would sign it; they agreed to sign it; *308and I went on to rusk to get the driller, to get him started.
“Q. Yes, sir. A. To keep from losing the rig.
“Q. Yes, sir. It was urgent to do something that day, unless the whole deal was going to fall through; isn’t that right? A. Yes, sir. Yes, sir.
* * * * *
“Examination by the Court:
“Q. You are telling me now, as I understand it, in answer to Mr. Ryan’s questions, that when you — that the matter was an urgent one, and that as soon as you got the check from Dr. Wollman (sic), you deposited it and used the proceeds ; you considered that it was all right for you to go ahead, because you were going to lose your lease or the rig was going to be moved off or something, if you didn’t act promptly? A. Yes, sir, I had to act promptly, Judge, or lose it.
“Q. Well, do I understand, then, that you considered the trade final and definite when you got Dr. Wollman’s (sic) check, and used his money? A. Yes, sir. I didn’t figure' — I figured that — now, Judge, they taken the note and was going ahead and have Gordon Butterfield execute it, and I left it up to their honor to do that.
“Q. You left it up to whose honor to do what? A. The ones that was supposed to sign that note with me.
“Q. You mean you expected Mr. But-terfield and Mr. Head both to sign the note? A. Yes, sir. Yes, sir.
“Q. Because they had told you they would? A. Yes, sir, that’s right.
“Q. All right. So, so far as you are concerned, I take it from your testimony— A. Yes, sir.
“Q. There was no uncertainty about the trade? A. No, sir.
“Q. You considered it final? A. Yes, sir.
“Q. And definite? A. Yes, sir.
“Q. And you felt that you were justified in taking the money from Wollman (sic) and using it? A. And start the well immediately, because I had to get with Wolf, Grey Wolf Drilling Company.
“Q. I see. A. And they were calling every hour, and they were going to pull the rig off if they didn’t—
“Q. The point I am making is, as I understand what you are telling me, now— A. Yes, sir.
“Q. —there were no uncertainties? A. No, sir.
“Q. There were no contingencies? A. No, sir.
“Q. There were no loose ends that had to be tied down before it was a final trade, in your mind? A. No, sir.”

. The district court found that Edmiston had the authority to execute that agreement on behalf of Head and of Butter-field, and that finding is supported by well nigh conclusive evidence. See Footnote 2, supra.

. Art. 5932, Sec. 18, Vernon’s Annotated Civil Statutes of Texas :
“Sec. 18. No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided. One who signs in a trade or assumed name will be liable to *309the same extent as if he had signed in Ms own name.”

. Art. 5932, Vernon’s Annotated Civil Statutes of Texas:
“Sec. 19. The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency.
“Sec. 20. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt Mm from personal liability.”

. As said in Second Nat. Bank v. Ford, 1939, 132 Tex. 448, 123 S.W.2d 867, 869:
“* * * By the provisions of the Negotiable Instruments Law, art. 5932, § 20, Cooley’s addition of the word ‘trustee’ after his signature without disclosing for whom he was acting did not exempt Mm from personal liability. Certainly the facts establish no exemption, but, on the contrary, they establish liability.”

. See Huntington Finance Co. v. Young, 1928, 105 W.Va. 405, 143 S.E. 102, 104; 7 Am.Jur., Bills & Notes, § 62, pp. 820, 821; 8 Id., § 474, pp. 222, 223, footnotes 2 to 7; 10 C.J.S. Bills and Notes § 44b, p. 482.

. See also, Camp v. Dallas Nat. Bank, Tex.Civ.App.1929, 21 S.W.2d 104, 109; Stubblefield v. Cooper, Tex.Civ.App.1930, 37 S.W.2d 818, 821; McFarland v. Shaw, Tex.Com.App.1932, 45 S.W.2d 193, 196; Schwab v. Schlumberger Well Surveying Corp., Tex.Civ.App.1946, 195 S.W.2d 412, 415; Continental Nat. Bank of Fort Worth v. Conner, 1948, 147 Tex. 218, 214 S.W.2d 928, 930; Allied Building Credits, Inc. v. Ellis, Tex.Civ.App.1953, 258 S.W.2d 165, 166.

. 2 Tex.Jr., Agency, § 80, p. 477; 1 A.L.I., Bestatement of Agency, § 99; 2 Am.Jur., Agency, §§ 227, 228 ; 2 C.J.S. Agency § 49.