Yndo v. Rivas , 1911 Tex. App. LEXIS 730 ( 1911 )

COBBS, J.

This suit was- instituted by Manuel Yndo against F. A. Chapa, personally and as independent executor of the estate of Antonio P. Rivas, deceased, and his wife,. Adelaida Chapa, Edward M. Rivas, and Antonio G. Rivas. He prays judgment for the-sum of $3,389.76 with interest paid on note-to A. B. Frank for Rivas. Also to set aside deed dated April 16, 1888, by A.. P. Rivas,, deceased, to his deceased wife; Maria Q. Rivas, and subject the property conveyed. therein, being lot No. 4, block No,-, city block No. 150, Cor. Laredo and Houston streets in the city of San Antonio, Bexar county, to the payment of his debt on the alleged ground that it was the' separate property of A. P. Rivas; the conveyance being made to his wife as his agent for his use and benefit, creating between them the relation of principal and agent. That subsequently she reconveyed the property, but the deed was never placed on record. It was alleged that Mrs. Adelaida Chapa' (wife of F. A. Chapa), Edward M. Rivas and' Antonio G. Rivas are the surviving children and’ heirs and devisees of Antonio P: Rivas, who died February 1, 1907, leaving a- will, duly-probated March 14, 1907, appointing F. A. Chapa independent executor without bond, devising one-half to Mrs. Chapa, one-fourth, to Edward M. Rivas, and one-fourth to Antonio G. Rivas. Further, alleged Maria Q. Rivas, deceased, was the wife of Antonio P: Rivas, deceased, that she died intestate in the year 1897. and that A. P. Rivas- qualified as-administrator of said estate June- 8, 1897, of his said mother-in-law, Maria Q. Rivas.. 1-Ie alleges that at the date of the death of his said wife Rivas abandoned the-property as his homestead, which was prior to the creation of the debt sued upon. At the- time of her death, his family consisted of himself and his said wife, that he immediately abandoned said homestead and never thereafter resided upon the same. He alleges that the-debt sued on was the debt of Antonio P. Rivas, and he was merely surety thereon, though the obligation was in his name and' not in the name of Rivas, and plaintiff got no benefit therefrom, though plaintiff paid same. He alleges as a reason why said debt was permitted to run unsettled so- long was-because Rivas always promised to, pay him. and reimburse him when he sold the property herein described which was done before his death. The answer claimed the property as the homestead of Antonio P. Rivas and' his wife, Maria Q. Rivas, on the 16th day of' April, 1888, and for years prior thereto and' continued as the homestegd of himself and: family, which consisted of Antonio P. Rivas and his minor children until his death on. February 1, 1907, and was the homestead of himself and minor son, Antonio G.' Rivas, and said property was for that reason not subject to his debts. He also alleges the-property was the separate estate of Maria Q. Rivas, and descended to her children freed from said debt, and used by her as her homestead long prior to said debt, and the said debt is barred by the statutes of two and four years.

Defendants deny their liability, and say the debt was extinguished as against Rivas because thé obligation of Yndo to Prank was by a note executed alone by him which retired and released all the former notes of Rivas, and that said debt became as between Rivas and Yndo barred by the statute of limitation of four'years prior to the institution of this suit, and cannot be enforced aganst defendants or their said property. The court instructed a verdict for the defendant. There was sufficient evidence to show that the debt sued upon was for money plaintiff and his father paid on notes due A. B. Prank for Antonio P. Rivas; that there were several renewals of notes due to said A. B. Prank by Rivas and the last note renewed was dated February 18, 1904, and signed alone by Manuel Yndo, because Frank did not want Rivas on the note, which merged all previous obligations, including notes for interest paid for said Rivas in one note.

We shall not set out the assignments of error and discuss them, as the court gave a peremptory instruction to the jury to return a verdict for defendants, but will examine the entire record to see if there be any reversible error in the action of the court, which is laborious especially because the statement of facts is not indexed.

The first question we shall discuss is whether or not said debt is barred by the statute of limitations. We present all the evidence introduced by plaintiff to avoid the plea of limitations. The first witness was Mr. Seelig Deutschman, an attorney, who stated: “Mr. Rivas told Mr. Yndo, T will never owe you a dollar as long as I have got a dollar, and if T die, after I am dead, my children will pay it, if X don’t have time before, and this is an honor debt. I was administrator for these children, and'I used this money, and I want to get you to do me the favor to let me pay the Flores judgment out of this, and I will pay you.’ He says, Tf you will let me pay, if you- will allow me to pay with this money the Flores judgment, I will promise you that when I sell that corner out of the proceeds of that sale the money shall be paid to A. B. Frank, every dollar, or to you, or to you if you pay it for me. * * * ’ The next matter we had up with Mr. Rivas was in connection with the beginning of • the widening of Houston street. * * * Mr. Rivas said if the street was widened the property would come into the market and bring a good price, and he said ‘When the street is widened and the property sold,. I intend to pay the debt to A. B. Frank and interest Mr. Yndo paid for him * * * 18 months, I guess, before he died, or maybe a- little less. Why, I wrote him a note one day to come to see me and try to arrange our matters in some Shape * * * he said he had gotten my letter, that he didn’t think he cared to put the property in any shape where its record would be incumbered in any way, but that he was going to draw a will — a paper — and in that paper provide what he intended to do, and intimated he wanted me to draw the paper, but gave me no positive instructions except he told me the way he wanted the paper drawn * * * and that in that will he would provide that the- Yndo matter be settled, the Yndo-Frank matter be settled. * * * The people were close friends. * * * The old fellow a short time after-wards became paralyzed.” He was the attorney for Rivas and filed the will for probate. The will did not provide for the payment of the debt. And F. A. Chapa qualified as the executor under said will on the 30tli day of March, 1907.

Again, Mr. Deutschman said: “Mr. Yndo asked Mr. Rivas to take care of at least a part of the Frank debt, and Mr. Rivas told him he could not possibly do it out of this money. A judgment had been obtained against him and was a' debt of honor. Means used by him belonging to some minors and he must pay it, ‘and want you to know I am not going to beat you folks out of one single debt or one dollar’s interest you pay out for me, and I will pay the Frank debt if you pay it. I will see you get the money back.’ And he said: ‘That corner is mine, and whenever that corner property is sold X am going to pay you that money.’ I didn’t file suit because the relations between Yndo and Rivas were closer than brothers born and raised together, and Yndo worshipped the ground Rivas walked on, and would have laid down — given him the last dime.”

Mr. F.' M. Giraud, city engineer of San Antonio, stated: “The Yndos and Rivas were great friends during their lifetime. The last time I saw Antonio P. Rivas he was very old — could hardly walk. I had a talk with Antonio P. Rivas with reference to Mr. Yndo and Mr. A. B. Frank. He asked me about Mr. Yndo, if he was well; said he (Rivas) expected to die soon, and wanted to have a settlement with Mr. Yndo; that he owed him an amount and wanted to pay him before he died, and he had that house at the corner ; he did not owe anybody and he had to pay him. He said if he died soon and didn’t pay it, he was going to request the family to pay it.”

Manuel Yndo, on cross-examination by ap-pellee, said: “The reason I did not file suit before Rivas’ death was that I was depending upon his promises and when he died he left no arrangements for this, for the settlement of the matter. That is when I brought this suit.”

Mr. Deutschman being recalled, among other things, stated: “If there■ was any conflict in what I stated yesterday and the statement I have just made hereinabove about the verbal agreement, then the last statement is the correct version. Rivas promised to pay Yndo every dollar paid for him, to pay it out of the sale of that house. He did not state then when the house was going to be sold, but then afterwards he said when the house would be sold it would be paid. He didn’t state what particular time he was going to sell the property. He said that was the only thing he had left that was unincumbered, had nothing but it, but he would pay it out.”

This is all the testimony introduced to establish the promise of Antonio P. Rivas to pay the debt and to avoid the statute of limitations pleaded to defeat the cause of action.

The evidence showed that the debt was Antonio P. Rivas’ who had been on the note with his surety, Yndo, but in the final renewal of notes Prank would not allow him further to go on the note, and only Yndo •signed it. It is contended by appellee that this act discharged Rivas from his obligation to pay Prank the note, and therefore •discharged him altogether to pay Yndo, which we regard untenable as to his obligation to Yndo at that time.

[1] It is held the right of action of a surety who pays note is not upon note but upon implied promise for his reimbursement. Lacy v. O’Reily, 40 Tex. Civ. App. 285, 89 S. W. 640. His recovery is upon the implied promise arising out of the relation of the parties.

[2] But this right of action is barred in two years. Faires v. Cockrell, 88 Tex. 437, 31 S. W. 190, 639, 28 L. R. A. 528; Willis v. Chowning, 90 Tex. 622, 40 S. W. 395, 59 Am. St. Rep. 842. But appellant seeks to avoid the statute of limitations of two years by •showing an express parol contract to pay the debt after the sale of certain property, and this, it is urged, would take it out of the bar.

[3] This transaction' is not of the class affected by the statute of frauds. There it has application to a different state of facts, such as where a promise is made to pay the debt of another, then it is required to be in writing. Here the transaction is between the parties themselves, and the promise is made by the principal in the debt to reimburse and repay the surety for paying his debt.

[4] The difficulty is to find any express •contract to pay, based upon any consideration or promise not to sue. Appellant cannot rely upon the implied promise, for that is barred. He must rely upon a new contract and new promise based upon some consideration.

We have sought in vain to find a new promise made by Antonio P. Rivas, requesting Yndo not to sue or based upon any new consideration offered and received to induce Yndo hot'to sue. In fact, there does not seem to be any intimation that Yndo ever threatened or intended to sue or collect the debt out of Rivas, hence no necessity arose for Rivas to make the promise. It seems, at most, a case of complete confidence and friendship between them with no contract for repayment, Rivas always admitting the debt and .promising to pay. It is not found in the testimony of Deutschman, for when Yndo and Rivas were in his office the debt had not been paid, and his promise, if it was more than an admission that he owed the money, putting it in the strongest light, was a promise to do no more than the law required of him, for the law already imposed an implied obligation to pay the debt, and in either case the debt would be barred in two years after the right to sue, counted from date of the payment by surety’s note. There is no element of estoppel shown in this case, such as was shown in Elijah Smith v. Blake Dupree, 140 S. W. 367, decided by this court October 11, 1911, to prevent a suit, or any new promise based upon any consideration whatever in this record, that prevented appellant from timely suing, or that took the case out of the bar.

[5] But appellant contends there is no limitation in this cause because the suit was instituted within two years after note was paid, and by agreement has brought up and had filed a verified copy of the original petition, which we shall now consider from the standpoint of that claim. The original petition was filed in this cause on the 1st day of June, 1908, against F. A. Chapa and his wife, Adelaida Chapa, Antonio Rivas and Edward Rivas, surviving heirs and devisees of Antonio P. Rivas. The indebtedness of $3,389.67, the amount Rivas owed Frank, as already shown, was made up of several obligations and interest, that was merged in the note for that amount, dated February 18, 1904, payable to A. B. Frank or order on or before five years after date, with 8 per cent, interest per annum, with 10 per cent, after maturity. The note was paid by appellant in August or September, 1907. Therefore, two years had not elapsed when suit was instituted, as shown by file mark on the original petition, though more than two years had elapsed before amended petition was filed.

The contention of appellees, as stated, is that Rivas was discharged by Frank when Yndo gave his individual note for his debt, equivalent to a payment, and he had the right at once to sue Rivas on his implied as-sumpsit, and the statute on that very day was put in motion and Yndo’s cause of action was barred in two years from the date of the note which Frank accepted without Rivas being on it. Treating the note as a payment, the statute ran from said date 1904 instead of the' date of payment, September, 1907, and the debt would clearly be barred. In Charbonneau v. Bouvet, 98 Tex. 169, 82 S. W. 460, and Willis Bro. v. Chowning, 90 Tex. 622, 40 S. W. 395, 59 Am. St. Rep. 842, the rule is distinctly laid down that the statute runs from the date when the surety pays the debt. But no question arose there,' as here, that a note had been signed alone by the surety, which the obli-gee took in satisfaction of the debt and would not allow the principal to sign. In other words, there was no note of the surety given alone that could be treated as a payment, which did not bind the principal thereon. The surety’s right of action is not on the note, but on the implied promise to pay, or rather to repay; and when in such ease the surety gives his note alone, and is accepted, the surety need not wait to pay the note, but may compel the principal, by suit if necessary, to pay it.

It is true the surety may never pay the note, and yet may compel his principal to pay him the entire note and at the same time compromise his own note and secure from the transaction the benefit of a speculation. Still he has satisfied the principal’s debt by substituting his own separate obligation and the obligee has been fully satisfied, and it is with the surety thereafter as to the course he shall pursue for contribution.

In Boulware v. Robinson, 8 Tex. 329, 58 Am. Dec. 117, the court says: “This distinction between the giving by the plaintiff of a bill of exchange or negotiable note, which has been accepted by the creditor in satisfaction of the defendant’s debt, and the giving of a bond or other security not negotiable, which has been in like manner accepted, seems to have been maintained by the English and American courts, and must be received as the settled law.”

. A very clear distinction is made where the obligations belongs to the class of bonds shown in Boulware v. Robinson and liability of surety on promissory notes upon which he is alone bound. This case has never been overruled or questioned by our court. The case cited by appellant of Darrow v. Summerhill, 24 Tex. Civ. App. 208, 58 S. W. 162, 163, and other kindred cases, instead of supporting a contrary doctrine, is in perfect harmony with this theory.

On the subject, that a surety, who is bound on his principal’s note, substitutes his own obligation in lieu thereof, treated as a payment of the principal’s obligation, much has been written on, both sides in different states. Stone v. Hammell, 83 Cal. 547, 23 Pac. 704, 8 L. R. A. 425, 17 Am. St. Rep. 272.

When the principal is bound on the obligation, the obligee has his cause of action against both, and the obligation being joint and several to the obligee, not until the surety pays the debt is he in a position to require contribution. In case of suit against them on the note, the surety may have his j judgment over against his principal. But when the surety signs the note and becomes bound, and allows his principal to be released, his right of action at once arises because the surety has satisfied the obligee by his own note, which has the effect of payment. Such we regard as the decisions of our courts and the settled law in this state. See, also, Maysville Tel. Co. v. First Nat. Bank, 142 Ky. 578, 134 S. W. 887. This could not operate as a hardship or unjustly to a surety, for as soon as he settles his principal’s debt he has his right of action against hiin for contribution. For the reasons given above it is not necessary to discuss any other phase of the-case or assignment of error, and the judgment is affirmed.