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“That on the 17th day of December, 1917, the defendant, M. I. Holland, joined by his wife, MACAW v. PECOS VALLEY ALFALFA sold and conveyed the above-described land to

LAND & OIL CO. (No. 1381.) one J. F. Marshall, who paid the entire consideration therefor to the said defendant, who, (Court of Civil Appeals of Texas. El Paso. notwithstanding the fact that he had assumed Feb. 8, 1923. Rehearing Denied the payment of said sum of $1,700 and interest

March 8, 1923.) to the order of Southern Trust Company, and well knowing that said amount, together with 1. Set-off and counterclaim 35(1)-Unliqui. interest thereon, was the property of and be

dated demands may be set off against liqui. longed to said Southern Trust Company, or its

dated demands, if arising from same cause, order, received said sum and converted the Under Rev. St. art. 1329, providing if a same to his own use and benefit, and has ever suit be founded on a certain liquidated demand, since refused, and now refuses, to pay the defendant shall not set off unliquidated or unsame, or any part thereof, to this plaintiff as certain damages as a defense, where a verified, transferee of said Southern Trust Company, itemized account for labor performed under a and plaintiff further shows to the court that contract has been filed as a liquidated demand said note is post due and is wholly unpaid, and by plaintiff, defendant is not precluded from that the said defendant, although having prom- pleading unliquidated claims arising out of the ised and agreed to pay said note, and although same contract, since article 1330 provides de.. frequently requested so to do, has failed and fendant may plead any cause of action arising refused, and still fails and refuses, to pay the out of or incident to or connected with plainsame, or any part thereof, to plaintiff's damage tiff's cause of action. in principal, interest, and attorney's fees in the sum of $2,150."

2. Pleading w292-Statute requiring verified

denial of accounts under oath held but rule of

evidence applicable to open accounts. In our judgment, the allegations are suffi

Rev. St. art. 3712, providing that where an cient to allege an express promise on the part action is founded on an open account and supof Holland made to Howard to pay the ported by plaintiff's affidavit that it is just and amount of the note to the Belcher Land Mort- true, the same shall be prima facie evidence gage Company, the holder and owner of the thereof, unless defendant shall file a written mortgage and note at the date of the promise, denial under oath, and when he fails to file such and that such promise was made for the account, is but a rule of evidence, and its terms

denial he shall not be permitted to deny the benefit of the appellee. Also, we think the are applicable only to open accounts. evidence sufficient to sustain this allegation. We do not think this conclusion is in con

3. Pleading 292–Held not "open account"

within statute. flict with Bledsoe v. Wills, 22 Tex, 650, and Phænix Lbr. Co. v. Houston Water Works, items based on a special contract for labor per

An account made up of an aggregation of 94 Tex. 456, 61 S. W. 709, relied on by ap- formed held not an open account, within the pellant.

meaning of Rev. St. 3712, requiring defendant We do not feel justified in disturbing the to deny under oath open accounts verified by conclusions reached in our original opinion plaintiff. that Howard and Arnold finally testified that [Ed. Note. For other definitions, see Words the verbal promise was made by appellant and Phrases, First and Second Series, Open to assume the $1,700 note. It is true that Account.] the deed from Howard to Holland is dated May 25th, and that Arnold testified that ac Appeal from District Court, Reeves Councording to his remembrance his conversation ty; Chas. Gibbs, Judge. and business dealings with Holland took

Suit by U. G. Macaw against the Pecos place on Decoration Day, May 30, 1917; that Valley Alfalfa, Land & Oil Company. From he had never met Holland before this. But

a judgment for defendant, plaintiff appeals. even if Arnold was not present at the time

Affirmed. Holland promised Howard to assume the $1,700 note and mortgage, he did testify that, Jno. B. Howard, of Pecos, and Clem CalHolland stated to him that he was assuming houn, of El Paso, for appellant. $9,050 indebtedness on the 630 acres bought. H. G. Russell and Ben Palmer, both of This was, at any rate, corroborative of How- Pecos, for appellee. ard's statement that Holland had agreed to assume the $1,700 note. We do not think it WALTHALL, J. U. G. Macaw brought can be reasonably held that the $1,700 note this suit against the Pecos Valley Alfalfa was in addition to the $9,050 in indebtedness, Land & Oil Company, W. R. Lynch, Mrs. Sue but we feel that, in deference to the imputed Lynch, and J. B. Marshall, the last-named finding of the trial court, and by reason of three acting under an agreement and declarathe testimony of Howard and Arnold, wetion in trusť in the name of Pecos Valley must conclude that there was a total indebt- Alfalfa Land & Oil Company. edness of $9,050.

On the 15th day of January, 1921, the The motion for rehearing is overruled. Pecos Valley Alfalfa Land & Oil Company

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(248 S.W.) entered into a written contract with Macaw,, to W. R. Lynch, Mrs. Sue Lynch, and J. B. by the terms of which Macaw was to grub, Marshall, under said contract, alleged a clear, level, and prepare for farming by ir- breach of the contract by the appellant, and rigation, certain lands described therein, and set up a cross-action for damages growing out belonging to said company, and consisting of of the alleged breach of the contract by appelsome 1,500 acres, and located with the ir- lant, pleaded payments additional to those rigation plant thereon, in Loving and Ward allowed, pleaded the making by appellant counties.

of said $2,000 note and prayed judgment
Without stating in detail the provisions thereon.
of said contract, it shows that much of said Appellees, in resisting appellant's verified
lands are wild, uncultivated lands, under itemized account as above, did not file a
an irrigation system, and that Macaw was written denial under oath as provided in the
to generally prepare same for farming, and above article of the statute, in suits on veri-
to farm same for a period of ten years, and tied open accounts.
receive a stated portion of the crops for his The case was tried without a jury, and on
share and services. The contract provides the evidence heard judgment was entered
that, in preparing the lands for cultivation, that appellant take nothing as to each of
the company agreed to pay Macaw the sum appellees, and that appellees take nothing by
of $3.50 for each full day's work done single their cross-action against appellant.
handed, and $7.50 for each full day's work for
a team and driver, in ditching, bordering,

Opinion.
leveling, hauling, and such other work as may
be agreed upon. It was agreed in the con-

The trial court did not file findings of fact, tract that the company should, at the time of nor are the conclusions of law indicated in entering into the contract, loan Macaw $2,000 the record other than as found in the judg"for general expenses, said money to be used ment that the law is with the defendants. in a general way to aid in the said develop [1] Appellant presents six propositions, ments,” said loan to be evidenced by a prom- but the view we entertain of them only two issory note, and the money to be returned need to be discussed. Appellant suggests within 12 months, with interest.

that his verified itemized account for the The contract makes other stipulations as to labor performed under the written contract, the rights and duties of each in operating un- being for a liquidated demand, could not be der said contract, and which we will further offset by appellant's counterclaim for unstate when necessary. While the petition is liquidated damages. We take it that appel

lant invokes the latter portion of article Fery meager in the statements of the cause

1329, Revised Statutes, which portion reads: of action, it is based, we take it, upon a supposed breach of said contract on the part of

"If the suit be founded on a certain demand, appellees. The petition states that the cause the defendant shall not be permitted to set off of action herein sued on is for debt for labor unliquidated or uncertain damages founded on

a tort or breach of covenant on the part of the performed, and to "foreclose a contractor's

plaintiff.” or laborer's lien covering certain lands and property in Loving county, Tex., and said The following article of the statute (1330), contract being performable in Loving coun | however must be taken in connection with the

portion of the article above quoted. It proThe said contract is referred to and by vides that defendant may plead in set off any exhibit made a part of the petition. Appel-counterclaim founded on a cause of action lant also makes an exhibit and a part of the arising out of, or incident to, or connected petition, a verified itemized account under with appellant's cause of action. The record article 3712, Revised Statutes, for grubbing, discloses that each of appellees' matters done for the company, for team work done pleaded arose out of, were incident to, and for the company, and for day labor done for directly connected with the covenants and the company, the items of each, it seems, stipulations expressly provided for in the based on the contract prices for such labor, written contract upon which the suit is based. and allowing credits, leaving a total balance The $2,000 evidenced by the note was an in Macaw's favor of $4,906.34.

advancement of money under express provi. Appellant asks judgment for said sum, sion in the contract, and with the provision and $2,500 actual damages in moving his that same should be used to aid in the develfamily and outfit from his former place of opment under the contract, and should be residence to Loving county, and $2,500 exem-repaid by appellant within the time stated. plary damages, the cancellation of said $2,000 The other items of appellees' counterclaim note, and foreclosure of his asserted labor- are equally incident to and grow out of the

performance or nonperformance of the con Appellees answered by general and several tract, and we think are matters that could special exceptions, general denial, and spe- and should be determined in the one suit. cial answer, denying any personal liability as [2, 3] Appellant, in effect, contends that

er's lien.

his itemized open account for $4,906.34 was for any amount, we need not pass upon the duly verified as provided for under article question of his alleged lien. 3712 of the statute, and that appellees did not Finding no reversible error, the case is file a written denial, under oath, to the effect afirmed. that such account was not just in whole or in part, therefore, his account should be taken as prima facie evidence of such indebtedness; thať appellees should not now be MERCHANTS' NAT. BANK v. VOUDOURIS permitted to deny such account or any item

et al. (No. 8753.) therein, their failure to deny under oath being equivalent to a confession of the justness

(Court of Civil Appeals of Texas. Dallas. of the account, and that he should have judg

Feb. 10, 1923. Rehearing Denied

March 10, 1923.) ment therefor.

The above, practically, presents the only 1. Appeal and error en 1001(1)-Fact found real question in the case. Appellant refers by jury on sufficient evidence considered es. us to Knowles v. Gary & Burns Co. (Tex. Civ. tablished. App.) 141 S. W. 189, and the case there re A fact found the jury on sufficient evi. ferred to by the court. Appellant also refers dence must be considered established. us to Bay Lumber Co. v. Artman & Beuttmer 2. Accord and satisfaction w5 - Promise to (Tex. Civ. App.) 188 S. W. 279. After a care

remedy deficiencies in articles sold or cancel ful examination of the above cases, we have

notes given therefor must be supported by concluded that they do not fit the facts here consideration. presented, and for that reason are not in

A promise to either remedy deficiencies in point. It has long since been held that the articles sold or cancel notes given therefor statute here invoked prescribed a rule of must be supported by a consideration, like any evidence, and in its terms is applicable only other accord and satisfaction. to open accounts. For appellant's contention

3. Contracts Om75(1)-No consideration for to have application here, the account he sued

promise to do what promisor is already bound upon must be an open account. The question

to do. presented is: Is appellant's account an open

There is no consideration for a promise to account? In McCamant v. Batsell, 59 Tex. do what promisor is already bound to do. 369, and since followed by all of the courts, the term, “open account,” is there fully dis- 4. Contracts Cw50—"Consideration" defined. cussed and defined.

A consideration is something given in exHere the account sued upon is based upon is the inducement to the contract, and must be

change, something mutual, or something which the contract in writing, in which appellees lawful and competent in value to sustain the asexpressly agree to pay $3.50 per day for the sumption. labor of appellant single handed, and $7.50

[Ed. Note.-For other definitions, see Words per day for a team and driver, a mere aggre- and Phrases, First and Second Series, Con. gation of items based upon a special contract. sideration.]

In Myers v. Grantham (Tex. Civ. App.) 187 S. W. 532, in which the suit was for labor ren- 5. Contracts ww 50—Consideration may be ben. dered upon an implied promise to pay one

efit to promisor or detriment to promisee. half the gross receipts for pasturage received

A consideration may be either a benefit to from various persons, for riding the pasture promisor or a detriment or prejudice to prom

isee. fences, keeping them in repair, caring for the stock pastured and keeping the stock in 6. Bills and notes ww435-Indorsee's promise the pasture, was held that such obligations

to cancel notes, if it could not induce payee did not constitute an open account under the

to remedy defects in articles for which giv. statute as construed by the Supreme Court in

en, supported by valuable consideration. McCamant v. Batsell, supra, and Railway y.

Indorsee's promise to cancel notes, if it

could not induce payee to remedy defects in Daniel, 62 Tex. 70. To the same effect is

articles for which they were given, was supBallard v. McMillan, 5 Tex. Civ. App. 679, 25 ported by a valuable consideration, being reaS. W. 327; Engineers’ Petroleum Co. v. sonably calculated and intended to cause the Gourley (Tex. Civ. App.) 213 S. W. 595; makers to make no further demands on payee Bixler v. Dolieve (Tex. Civ. App.) 220 S. W. to make such defects good. 148; Wall & Carr v. J. M. Radford Grocery

7. Bills and notes www.343—Knowledge that note Co. (Tex. Civ. App.) 176 S. W. 785, in which

was given in consideration of unperformed it is held that a demand founded upon a defi

contract by payee does not affect indorsee's nite contract cannot come within the meaning

rights, unless he had notice of breach. of an open account as used in the statute.

Knowledge that notes were given in considThe account here sued upon is not an "openeration of an unperformed executory contract account,” and the answer defending against by payee, will not deprive indorsee of the char. same need not be a denial under oath.

acter of a holder in due course, unless he bad Appellant not having obtained a judgment notice of the breach of contract, the presump

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(248 S.W.)
tion being that it would be carried out in good | Company and paid therefor a valuable con-
faith.

sideration.
8. Trial 194(12)-Instruction that indorsee

Appellees defended against this suit on must show performance of conditions in mort. the ground that the soda fountain and fixgage and sale contract held on weight of evi- tures as installed were defective in a numdence.

ber of particulars, and was not the character In an indorsee's action on notes given for of apparatus bought by them as shown by articles sold by payee to the makers, an in the sales contract, and also on the ground struction that plaintiff must show performance that appellant's cashier, on November 20, of all the conditions of the sale contract and 1914, came to Austin, Tex., where appellees' a mortgage given to secure the notes held re- place of business was located, and examined versible error, as on the weight of the evidence the soda fountain and fixtures, and entered as to whether plaintiff assumed to make good into an adjustment with Peter Voudouris in any of the payee's deficiencies.

reference to the default made by Grossman

Company in regard to the fixtures, allowing Appeal from District Court, Dallas Coun- credits to be made on seven notes held by ty; E. B. Muse, Judge.

appellant at that time because of the failure Action by the Merchants' National Bank of certain fixtures named in the sales conagainst Peter Voudouris and others, copart- tract to be shipped; and also agreed that ners. Judgment for defendants, and plaintiff certain other defects, pointed out to the said appeals. Reversed and remanded.

cashier, should be remedied by the Gross

man Company and, if not so remedied, that
Phillips, Townsend & Porter, of Dallas, the four notes forming the basis of this suit
for appellant.

should be canceled in satisfaction to appel-
Geo. W. Mendell, Jr., of Austin, and Solon lees for said defects.
Goode, of Dallas, for appellees.

That appellant purchased the notes and

mortgage previous to the maturity of any
JONES, C. J. The Merchants' National of the notes assigned to it, and purchased
Bank, as plaintiff below, brought this suit same without notice of the partial failure
against appellees, Voudouris Bros., as a of consideration above given, was not con.
copartnership composed of Peter Voudouris, troverted by appellees. Their theory of de-
Spiros Voudouris, and Nicholas Voudouris, feuse seems to have been that appellant, by
to recover principal, interest, and attorney's its purchase of the notes and mortgage, as-
fees on four promissory notes, each in the sumed the contract of the Grossman Com-
principal sum of $150, of date July 23, 1914, pany and thereby became responsible to ap-
executed by Voudouris Bros., and payable to pellees for the performance of said contract
the order of Grossman Company, a corpora- to the extent, at least, that the apparatus
tion. The notes matured, respectively, on the purchased would come up to the specifica-
1st day of June, July, August, and Septem- tions of said contract, and also that, having
ber, 1915.

recognized the deficiencies of Grossman Com-
The notes were given in part payment for pany in reference to the apparatus sold, had,
a soda fountain and fixtures sold by the voluntarily and for a consideration, under-
Grossman Company to appellees, and con- taken to make said deficiencies good.
stituted a part of a series of notes executed On the other hand, appellant asserted that
at the time the sale was made, which was it was an innocent purchaser of the notes for
the said 23a day of July, 1914. At the time a valuable consideration before maturity
the sale was made, appellees executed a writ- and without notice of any of the said de-
ten contract reciting its terms, and in which ficiencies on the part of the Grossman Com-
written contract a mortgage lien was reserv- pany; and, further, that if its cashier made
ed by Grossman Company on all the property the promise alleged by appellees, same was
to secure the payment of all the notes given. void for want of consideration and constitut-
At the time the suit was instituted, all the ed no defense to this suit.
Dotes given, save the four declared on in The case was submitted to the jury on spe-
appellant's petition, had been paid. Appel- | cial issues. All these issues were found in
lant set out said mortgage in its petition and favor of appellees. These findings are to
asked that it be decreed a foreclosure on the effect that appellant's cashier, on Novem-
all the property mentioned in said sales con- ber 20, 1914, allowed the credits above men-
tract. The soda fountain and fixtures were tioned on seven of the notes by reason of the
shipped to appellees at various times from failure of Grossman Company to supply and
August until in the month of November of install certain of the fixtures embraced in
the year 1914. The mortgage was recorded the contract; that at said time the said
on September 19, 1914, and the first install- cashier agreed with Voudouris that the de-
ment note became due on November 1, 1914. fects in the soda fountain and mirrors would
At least three days prior to the recording of be repaired and tixed according to the con-
the mortgage, appellant purchased all the tract, and, if not, that appellant would sur-
notes given by appellees from the Grossman i render and cancel the four notes herein sued

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and indexes

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on; and, further, that this promise was was reasonably calculated to cause appellees made on the consideration of appellant's to make no further demands on Grossman failure to comply with its agreement to have company to make these defects good. Such Grossman Company repair and cure the de- promise could only have been intended to fects in the soda fountain and mirrors. Up- have effected this very purpose. We thereon these findings, a judgment was entered in fore hold that such promise by appellant is favor of appellees and denying appellant any supported by a valuable consideration and recovery whatever of the subject-matter of that the court did not err in refusing the rethis suit.

quested peremptory instruction. On its theory of innocent purchaser for Appellant assigns as error the giving of the value, without notice, and before maturity, following requested instruction to the jury: appellant requested peremptory instruction

"You are instructed that the purchase of the for recovery of the principal, interest, and notes, mortgage, and contract sued on herein attorney's fees on the four notes, together by the Merchants' National Bank, the plaintiff with foreclosure of its mortgage lien, and herein, from Grossman Company, it was and is the refusal of the court to do this is duly incumbent upon the plaintiff to fulfill and perassigned as error.

form all the terms and conditions contained in [1-5] Appellant was entitled to this per- said mortgage and contract before said plainemptory instruction unless it foreclosed it. tiff can enforce the payment of the four notes self as to such relief by the action of its and the foreclosure of the mortgage sued on cashier in promising, either to have the herein. Grossman Company remedy the deficiencies

"You are further instructed that the burden in the soda fountain and mirrors, or, in the preponderance of the evidence that all of the

of proof is upon the plaintiff to show by a event of a failure to bave this done, to can- terms and conditions of said contract and mortcel the four notes. The jury having found gage have been performed, either by the plainthat this promise was made by the bank tiff or by Grossman Company." through its cashier, on evidence sufficient to support such finding, this court must consid [7, 8] We think these charges are on the er same as an established fact. The inquiry weight of the evidence and erroneous. By then is narrowed as to whether this promise the purchase of the notes and mortgage, apwas supported by a consideration. Appellant pellant did not assume to carry out the strenuously insists that it is not under the Grossman Company contract. It is true, at well-known rule that, where a creditor agrees the time the notes and mortgage were purto accept less than his matured debt in full chased, the soda fountain had not been in. payment, he may, nevertheless, collect the stalled and Grossman Company had not yet balance, for the reason that the agreement performed its part of the contract. The to take less than was owing him is a com- courts, however, universally hold that knowl. pact without consideration. There can be edge that a note was given in consideration no question that a promise of this kind must of an executory agreement or contract of the be supported by a consideration, just as payee, which has not been performed, will much as any other accord and satisfaction, not deprive the indorsee of the character of and, if one party merely agrees to do what a holder in due course, unless he also has he is already bound to do, there is no con- notice of the breach of that agreement or sideration. We do not think this case comes contract. 3 R. C. L. 1067. At the time the within this rule of law. A consideration purchase was made, the evidence is undismay be defined to be something that is giy- puted that appellant had no such notice. en in exchange, something that is mutual, or The presumption of law is that the contract something which is the inducement to the would be carried out by Grossman Company contract, and it must be a thing which is in good faith and the consideration under lawful and competent in value to sustain the taken by it be performed as stipulated. It assumption. It may be either a benefit to was an issue of fact to be determined by the the party promising, or some detriment or jury whether appellant, after its purchase, prejudice to the party to whom the promise assumed to make good any of Grossman Com. is made. Schultz v. Scott (Tex. Civ. App.) pany's deficiencies, and this very issue was 210 S. W. 830; James v. Fulcrod. 5 Tex. 512, submitted to the jury. These charges are 55 Am. Dec. 743.

directly on the weight of the evidence as to [6] The promise of appellant that if it this issue, and necessitate a reversal of this could not induce Grossman Company to remedy the defects in the soda fountain to cancel For the error in giving the requested inthese four notes as remuneration to appellees structions as above set out, this case is refor their loss in consequence of the defects versed and remanded.

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