Zanes v. Mercantile Bank & Trust Co. of Texas

VAUGHAN, J.

On September 5, 1931, the Mercantile Bank & Trust-Company of Texas filed suit in the court below, against W. R. Zanes and Seth Tate, on a promissory note of date March 19, 1931, for $18,000 in favor of the bank, together with interest and attorneys’ fees due thereon, and -for the foreclosure of an alleged equitable lien on certain stock certificates as security for the note. The bank, among other things, alleged that on May 22, 1930, Zanes and Tate owed the bank the sum of $22,200, and on that date Tate, acting for himself and for Zanes, executed a note for the sum of $22,200, payable to the bank; that the note sued upon was a renewal thereof; that Zanes and Tate delivered to the bank, as collateral, to secure the $22,200 note, a certain note dated May 21, 1930, executed by Niehols-Gillette Transfer & Warehouse Company, dated May 21, 1930, payable on demand after date to the order of W. R. Zanes for $20,200; that Zanes and Tate each individually indorsed said note; that Tate, acting for himself and Zanes, executed a collateral agreement in favor of the bank, which in part provides: “That any and all securities or other property heretofore, now or hereafter pledged, or delivered by any of undersigned, their agents, attorneys or representatives, to said bank to secure any indebtedness of said bank, shall be held and construed to be pledged hereunder and as if fully described herein, and may be held by said bank as security for any and all debts and obligations of any or all of undersigned to said bank for the payment of money, whether such debts, liabilities and obligations now exist, or are hereafter incurred or arise, and whether the obligations or liability thereon of the undersigned or any of them be direct, contingent, primary, secondary, joint, several, joint and several, or otherwise, and whether such obligations be of the same character or different.”

.The bank further alleged that, on or about September 2, 1931, Zanes deposited with the bank $18,090, to be held by it as collateral security for the payment of the note sued upon ; that, prior to making the deposit, Zanes and Tate liad purchased the stocks on which lien was claimed from the Dallas branch of the brokerage house of E. A. Pierce & Co., and that Zanes borrowed from Pierce & Co. on said stocks, as collateral, the sum of $18,000, which Zanes placed with the bank as security for the payment of said partnership debt; that Zanes, through certain acts of fraud and misrepresentations (specifically alleged in its petition), withdrew the deposit of $18,000 by his check payable to Pierce & Co., and thereby repossessed the involved stocks from Pierce & Co.; that by reason of said acts and conduct on the part of Zanes, the bank became subrogated to the lien which Pierce & Co. had against the stocks to secure the payment of the $18,000 indebtedness in favor of Pierce & Co., and that thereby the bank had an equitable lien on said stocks, and further alleged that immediately after repossessing the stocks Zanes again hypothe-cated same with Pierce & Co. to secure a loan of $8,000 then made to Zanes. Prayer for relief included the temporary injunction granted and the appointment of “a receiver of said partnership assets with authority to take possession of all partnership stocks belonging to said Zanes and Tate,” etc.

Tate, in his answer, admitted the above allegations of the bank to be true, and based thereon and other allegations made by him sought affirmative relief against W. R. Zanes and wife, Mabel Zanes, and E. A. Pierce & Co., and prayed for a temporary restraining order against them, and for the appointment of a receiver to take possession of said stocks.

Pierce & Co. answered, in substance, that it was holding said shares of stock, named in the temporary restraining order, with the exception of 50 shares of stock in the Fireman’s Insurance Company, as collateral against an indebtedness owed to it by the said Mrs. Mabel Zanes, in the sum of $8,161.-09, that the value of said stocks is constantly fluctuating, and that it has in its possession an agreement executed by the said Mrs. Mabel Zanes, conferring upon it the right at any time within its discretion to sell the certificates of stock for the benefit of said account, and credit the value thereon against any indebtedness that may be due and owing by the said Mrs. Mabel Zanes. Pierce & Co. prayed that the court enter such orders as may be proper, giving to it the authority, power, and right to sell the stocks at any time that it may deem it necessary for the protection of the indebtedness due it.

W. R. Zanes answered the bank’s petition by general demurrer, special exceptions, and general denial, and denied under oath that part of the bank’s petition relating to its claims of lien on the $18,000 in money, and on the stocks involved in this suit. Zanes and wife, Mabel Zanes, pleaded to the cross-action of Tate misjoinder of parties and causes of action, and in abatement alleged that Tate had no right to maintain his cross-action. W. R. Zanes filed a general demurrer, general denial, and certain special exceptions to the cross-action of Tate. Pierce & Co.’s answer was not controverted by any of the parties to the suit. As the statement of the evidence adduced will supply any material omission, in our review of the issues presented by the pleadings, no further reference thereto will be made.

On October 9, 1931, the judge of the trial court, in chambers, granted the injunctive relief and appointed a receiver, as'prayed for by the bank, and Tate, and appointed John C. Harris receiver. At this hearing, the pleas of misjoinder of parties, causes of action, and in abatement, of Zanes and wife to the cross-action of Tate, and the general demurrers addressed to the pleading of the bank and the cross-action of Tate were presented and overruled. Neither Tate nor Pierce & Co. appealed from the above orders; Zanes and wife duly perfected an appeal therefrom.

The following is a statement of all of the material evidence on which the temporary injunction was granted and the receiver appointed, viz.: Milton Brown, vice president of the bank, testified that W. R. Zanes and Seth Tate had been doing business with the bank four or five years; that he, as vice president .of the bank, received from Zanes and Tate a note executed by Nichols-Gillette Transfer & Warehouse Company, payable to W. R. Zanes in the sum of $20,200, as collateral to secure the indebtedness of Zanes and Tate to the bank; that the note sued upon is a part of such indebtedness; that the bank sold said collateral note, and applied the proceeds as a credit on the note sued upon; that he (Brown) discussed the note sued upon with W. R. Zanes; that he admitted it was a just debt, the obligation of himself and Tate, and that they owed it. Brown further testified that he had a conversation with Zanes about the deposit of $1S,000 to secure its payment; that he called Zanes and Tate and told them the bank would have to have the money or the stocks, involved in this suit, put up as collateral behind the bank’s note; that Zanes said he did not want to put up the stocks as security for the note, because his attorney told him it might jeopardize his interest in the Nichols-Gillette Transfer & Warehouse deal; that he (Brown) then asked Zanes to put up a cashier’s check, and he replied that he did not want to put up anything that might jeopardize him, that his attorney told' him not to; that Zanes finally agreed to deposit $18,000 with the bank, in lieu of putting up the stocks as collateral for the note; that he and Zanes had a gentlemen’s agreement, to the effect that the $18,000 would be put on deposit, and would be kept until the bank’s note was paid or said stocks put up in lieu of said deposit; that Pierce & Oo., sometime after the deposit was made, presented a check for $18,000, drawn by W. R. Zanes, payable to Pierce & Co. against the deposit of $18,000 carried in the name of W. R. Zanes by the bank; that he (Brown) called Zanes over the telephone and asked him what he meant by drawing the check in violation of the absolute agreement made in reference to the $18,000 deposit, to which Zanes replied, “I understand that, hut I have just been in conversation with Tate; that Tate said it had been adjusted and would be paid, straighten it up in the morning;” that he (Brown) then said, “Tou know that we are working on a gentlemen’s agreement and if you tell me again the money will be paid in the morning or the stocks put up I will go ahead and pay it, otherwise X will return the check to Pierce;” that Zanes replied, “That’s absolutely the agreement, Tate will he up in the morning and verify it.” Brown further testified that he wás not able to get Tate on the telephone that afternoon, but got him the next morning, and found what Zanes had told him with reference to settling the note was not true; that he relied absolutely upon said representation at the time he permitted the $18,000 check to be paid; that otherwise he (Brown) would have taken his right of offset against that money; that the $18,000 check was charged to the account created by the deposit of the $18,000 as collateral security to secure the bank in the payment of the note sued upon.

.1. R. Peters, a witness, testified that he was cashier for Pierce & Co. in Dallas; that he was acquainted with the account in the name of Mrs. Mabel Zanes; that the original margin card agreement executed by Mrs. Zanes in that account is filed with Pierce & Co.’s accounting unit, in New Orleans, La.; that, in connection with that account, there is what is commonly known as “trading authority” executed by Mrs. Mabel Zanes in favor of W. R. Zánes, giving him the right to buy and sell securities for her account, and releasing Pierce & Co. from any liability in the matter; that the account in the name of Mrs. Mabel Zanes was opened January 7, 1931, could not say whether the account was active prior to that time, because' Pierce & Co. had carried the account in the name of W. R. Zanes; that the records of Pierce & Co. in the account of Mrs. Mabel Zanes, show a debit balance of $8,161.09 on September 30, 1931.

Tate testified that he claimed one-half ownership in the involved stocks; that he did not know that same had been transferred to Mrs. W. R. Zanes, if they had been so transferred, and did not know that the stocks had been used as collateral to secure a loan in her name; that he did not know anything about the withdrawal of the $18,-000 by check of W. R. Zanes to Pierce & Co. until it had been actually withdrawn; that he had tried several times to have Zanes to agree to a division' of said stocks, each to take his part.

That the granting of the temporary writ of injunction nor the appointment of the receiver should interfere with the contractual right of Pierce & Co. in reference to the involved stock certificates, as alleged by Pierce & Co. to exist, we find the following provision contained in the order appealed from: “It further appearing to the court that the stocks above described are held by E. A. Pierce & Company to secure the payment of an indebtedness owing to said E. A. Pierce & Company, it is therefore ordered, adjudged and decreed that said injunction as against said E. A. Pierce & Company is hereby modified and the right is hereby recognized of the said E. A. Pierce & Company to transfer, sell, hypothecate or in any manner dispose of the above described stocks in accordance with the terms of the collateral agreement or pledge by which said stocks are held by said E. A. Pierce & Company and to apply the proceeds of the sale, first to the payment and satisfaction of any indebtedness owed to .said E. A. Pierce & Conlpany and to hold the remainder, if any, subject to the orders of this court.”

This order only left in force the temporary writ of injunction against W. R. Zanes and Mabel Zanes, and rendered nugatory the appointment of the receiver (a) because the stock certificates, for and on account of which the appointment was made, were not within the jurisdiction of the court making the appointment, same being in the possession of Pierce & Co., beyond the territorial limits of the state of Texas; and (b) Pierce & Co. being authorized by said order to retain and dispose of the stock certificates as therein set forth, the purpose for which the receiver was appointed was rendered of no effect. We do not think that the bank’s petition, nor the cross-action of Tate, was subject to the general demurrer presented against said pleas, in so fa.r as temporary in-junctive relief was sought against W. R. Zanes and Mabel Zanes. As to the ruling of the court on the pleas of misjoinder of parties, of causes of action, and in abatement, same cannot now be reviewed; this appeal being from an interlocutory order entered thereon, the right of appeal not being conferred by articles 2250 and 4662, R. O. S. 1925, from an interlocutory ruling based upon either, a plea of misjoinder of causes of action of parties, or of abatement; therefore, the ruling on said pleas can only be considered by this court on an appeal from a final judgment of the trial court disposing of the litigation on its merits. We cannot say that the order granting the temporary injunction in favor of the bank on its petition, nor in favor of Tate upon Ms cross-action, against W. R. Zanes and wife, Mabel Zanes, was an abuse of discretion; therefore >to tbat extent the order appealed from is affirmed. As to the appointment of the receiver, we are of the opinion that no grounds were shown to exist making the appointment of a receiver even reasonably necessary ; and furthermore, even if urgent grounds had existed, the entry of the order in behalf of Pierce & Co. would nevertheless have destroyed the order appointing the receiver of the involved stock certificates, in that he could not execute the order. We are therefore of the opinion that the order appointing John 0. Harris receiver should be vacated, and the receiver discharged, and it is so ordered.

Affirmed in part; reversed and rendered in part.