Court Opinion

ID: 3912983
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:41:19.224388+00
Date Added: 2024-06-11T14:16:05.497239
License: Public Domain

It is my opinion that Judge RANDOLPH has correctly disposed of this case by reversing the judgment and remanding it for another trial, but I do not agree that he has based the reversal upon proper grounds.
In the first place, I think the plaintiff's pleadings are insufficient to support the judgment, and that the general demurrer should have been sustained. Judge RANDOLPH holds that the petition is sufficient as against the general demurrer.
The plaintiff's petition alleged that Sullivan and wife executed and delivered to him a deed of trust securing "four promissory deed of trust lien notes," one note for the principal sum of $200, "payable to the order of Mr. T. H. Bingham, but said note was transferred by the said T. H. Bingham to John Dodson." The petition then mentions "the other three notes," which are sued upon, but does not allege who executed the notes, to whom and by whom they were delivered, and fails to allege the name of the payee, and nowhere in the petition is it alleged that the plaintiff has title to the notes or is the owner and holder thereof, or that any of them were executed and delivered to him, except possibly the above-quoted allegation as to the $200 note.
It is true, as Judge RANDOLPH states, that plaintiff alleges the giving of a deed of trust by Sullivan and wife and its delivery to plaintiff, but no such allegation is made with reference to the notes. Neither the notes nor the deed of trust were made exhibits to the petition.
It was decided by numerous cases in an early day in Texas that a petition based upon a note which failed to declare that the defendants executed and delivered it, or some equivalent facts, was insufficient to support the judgment, and during the same period, in numerous cases, it was held that, if the petition failed to allege that plaintiff was the owner or holder thereof, the petition was insufficient as against a general demurrer. This line of decisions has never been changed or even modified in any material respect. Malone v. Craig, 22 Tex. 609; Thigpen v. Mundine, 24 Tex. 282; Fortune v. Kerr, 25 Tex.Supp. 309; Gilder v. McIntyre, 29 Tex. 89; Frazier v. Todd, 4 Tex. 461; Moody v. Benge,28 Tex. 545; Colbertson v. Beeson, 30 Tex. 76; Ross v. Breeding,13 Tex. 17; Jennings v. Moss, 4 Tex. 452; Blount v. Ralston, 20 Tex. 132; Barnard v. Moseley, 28 Tex. 543; Parr v. Nolen, 28 Tex. 798. And this court recently so held in Commercial Credit Co. v. Moore (Tex.Civ.App.)288 S.W. 508. The rules there announced have been frequently expressly approved and followed by the Supreme Court in later cases. W. U. Tel. Co. v. Johnston (Tex.Com.App.) 210 S.W. 516; Webb v. Reynolds (Tex.Com.App.) 207 S.W. 914; Johnson v. Arlidge (Tex. Sup.) 17 S.W. 28; W. U. Tel. Co. v. Henry, 87 Tex. 165, 27 S.W. 63; Rhyne v. Missouri State L. Ins. Co. (Tex.Com.App.) 291 S.W. 845.
I further find myself unable to agree with Judge RANDOLPH'S holding that the following allegation in the petition is tantamount to an allegation that the notes were payable to the order of plaintiff: *Page 521 
"Whereby the defendants, G. L. Sullivan and wife, Alice Sullivan, became bound and liable to pay and promised to pay the plaintiff the sums of money that said notes specified, together with all interest and attorney's fees due thereon, according to the tenor and effect of said notes."
This is simply an allegation of the defendant's promise to pay, and it has been expressly held by the Supreme Court that such an allegation cannot be considered as supplying the want of allegations of ownership, execution, and delivery to the plaintiff. Jennings v. Moss, supra; Gray v. Osborne, 24 Tex. 157, 76 Am.Dec. 99; Sneed v. Moodie, 24 Tex. 159; Thigpen v. Mundine, supra; Parr v. Nolen, supra.
For the reason that the petition is insufficient against a general demurrer, I believe the judgment should be reversed.
I cannot agree with Judge RANDOLPH'S holding that the court erred in admitting the agreement executed by Miles G. Bivins, as president of the appellant company; the effect of such agreement being to postpone the prior vendor's lien notes held by the appellant company to the mechanic's lien sought to be foreclosed. This instrument was clearly admissible, and, under the pleadings in the case, the appellant company could not deny its execution or its legal effect by testimony, because the answer denying the authority of the president to execute it was not sworn to.
Revised Statutes, art. 2010, provides that:
"An answer setting up any of the following matters, unless the truth of the pleadings appear of record, shall be verified by affidavit."
Subdivision 8 is, in part, as follows:
"A denial of the execution by himself or by his authority of any instrument in writing, upon which any pleading is founded, in whole or in part, and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed."
It is further provided by Revised Statutes, art. 3734, that, when a pleading is founded, in whole or in part, on any instrument in writing, charged to have been executed by the other party or by his authority, such instrument shall be received as evidence without the necessity of proving its execution, unless the party by whom or by whose authority such instrument or note in writing is charged to have been executed shall file his affidavit denying the execution thereof. The appellant's answer, which denied the authority of Miles Bivins to execute the instrument, was not sworn to. The plaintiff's right to recover rested in part upon this instrument, and his pleadings sufficiently charged that it was executed by authority of the appellant company. No affidavit required by the last-quoted article of the statute, denying the execution of the instrument, was ever filed.
The failure of the appellant to verify its pleadings, denying the authority of Miles Bivins to execute the instrument, rendered its pleadings, in this particular, a nullity, and, as is said by some of the authorities, if such a pleading is not verified, it is regarded as no answer at all, and it is also held that it is not necessary for the opposite party to except to the pleading because it is not verified. This question was first definitely decided in City Waterworks Co. v. White,61 Tex. 536, and has been since followed consistently by the courts of this state in numerous decisions, among them being the following: Bradford v. Taylor, 61 Tex. 508; I.  G. N. Ry. v. Tisdale, 74 Tex. 15,11 S.W. 900, 4 L.R.A. 545; I.  G. N. Ry. v. Anderson (Tex.Civ.App.)21 S.W. 692; A. S. Cameron Steam Pump Works v. Lubbock Light  Ice Co. (Tex.Civ.App.) 147 S.W. 717; Gulf C.  S. F. Ry. v. Wilson,7 Tex. Civ. App. 128, 26 S.W. 131; Thomason v. Berry (Tex.Com.App.) 276 S.W. 185; Southland Life Insurance Co. v. Ballew (Tex.Civ.App.)268 S.W. 1027; Pullman Palace-Car Co. v. Booth (Tex.Civ.App.) 28 S.W. 719; Taylor Water Co. v. Kelley, 11 Tex. Civ. App. 339, 32 S.W. 436; Pioneer Savings  Loan Co. v. Nall (Tex.Civ.App.) 36 S.W. 322; Childress v. Smith (Tex.Civ.App.) 37 S.W. 1081.
I think the allegation in the petition is sufficient upon the issue of priority of liens. The allegation is as follows:
"Plaintiff alleges that said instrument and any and all claims, liens, and rights of the said defendant Miles Realty Company as to said land and premises is a junior and inferior lien to the lien of the plaintiff, in consequence of which said defendant Miles Realty Company is made a party herein, and plaintiff prays for foreclosure of his lien against said Miles Realty Company."
This allegation follows a description of the instrument, giving the volume and page of the deed records of Potter county, in which the instrument was recorded, and by reference incorporates said instrument as a part of the plea. Plaintiff was not required, in the original petition, to anticipate this claim by the realty company and allege facts showing its invalidity as against plaintiff. The proper place for such an allegation was in his supplemental petition, in reply to the Miles Realty Company's cross-action, in the event the company, after being cited, should attempt to assert its lien. Burleson v. Tinnin (Tex.Civ.App.)100 S.W. 350; Pierce v. Allen (Tex.Civ.App.) 278 S.W. 453. I therefore do not agree with Judge RANDOLPH in his holding that plaintiff had no right to attack the instrument by his supplemental pleading.
Appellee charged that it was the custom of the appellant to execute such instruments, postponing the vendor's lien in favor of mechanic's liens, where the purchasers of other lots desired to build, and the appellant's secretary testified that this had been done in several other cases. If this *Page 522 
testimony is true, I am inclined to the opinion that the burden did not rest upon appellee to show that Miles Bivins had authority to execute the instrument or that the custom was known to the directors of the appellant company. The general rule is that the officers and directors of a corporation are chargeable with knowledge of the customs and usages of their corporation. 14a C.J. 100. The instrument having been executed in accordance with the formal requirements of Revised Statutes, art. 1322, governing the execution of such instruments by the officers of corporations, its introduction was prima facie proof of the right of Miles Bivins to execute it, and, since its evident purpose was in furtherance of the charter powers of the corporation and was incidental to the power of the corporation to sell its lots and have improvements made thereon, I think the testimony was sufficient to show a valid instrument, without proof of express authority by the board of directors to execute it; and the proof of custom and usage was sufficient upon the issue of ratification. Smith v. Allbright (Tex.Civ.App.) 261 S.W. 461; Rose v. Brantley (Tex.Civ.App.) 262 S.W. 193; Magee v. Paul (Tex.Civ.App.) 159 S.W. 325; Emory v. Bailey, 111 Tex. 337, 234 S.W. 660, 18 A.L.R. 901; Texas Auto Co. v. Arbetter (Tex.Civ.App.) 1 S.W.2d 334; 14a C.J. pp. 255, 256, 257, 348-350, 356, 357, 366, 371, 395, 397, and 398. And, as said above, proof by appellant, questioning or denying the authority of Miles Bivins to execute it, was inadmissible in the absence of a sworn plea denying his authority.