Beard v. Continental St. Bank of Beckville

The contention of appellant, Beard, is that the judgment is erroneous so far as it directs the application of the proceeds of the sale ordered to the payment of all the notes alike, instead of to the payment in full of the three notes held by him before any part of such proceeds is applied to the payment of the note held by the appellee bank. The contention is predicated on the fact that the bank, having a right to do so (Traders' Nat. Bank v. Price [Tex.Com.App.] 228 S.W. 160), failed to have the transfer to it of the note it held recorded, and the fact that appellant, having a right to do so (Commission Co. v. Core, 47 Tex. Civ. App. 216, 105 S.W. 843), relied upon the truth of the representation to him by Foster, the payee thereof, that said note had been paid, and was thereby induced to purchase the other three notes. The rule seems to be, when a loss is to be borne by one of two innocent purchasers of notes like those in question here, and it was within the power of one of them to secure himself against such loss, and not within the power of the other to do so, that the loss must be borne by the one who, having such power, failed to exercise it. Moran v. Wheeler, 87 Tex. 179, 27 S.W. 54, where the court said:

"He who neglects the performance of a duty enjoined, or the exercise of a privilege granted for his security, must suffer the loss, rather than one who was not in position to secure that protection."

And see Trust Co. v. Roberts (Tex.Civ.App.) 41 S.W. 111; Henderson v. Pilgrim, 22 Tex. 464; Southern B. L. Association v. Brackett,91 Tex. 44, 40 S.W. 719; Lewis v. Ross, 95 Tex. 358, 67 S.W. 405; H. O. Wooten Grocer Co. v. Bank (Tex.Com.App.) 215 S.W. 835; Magee v. Snell (Tex.Civ.App.) 197 S.W. 364; Biswell v. Gladney (Tex.Com.App.) 213 S.W. 256.

Appellant's contention is sustained, and the judgment of the trial court will be so reformed as to direct that the proceeds of the sale to be made of the land shall be applied to the payment in full of the amount due on the three notes owned by him (appellant) before any of same is applied to the payment of the note owned by the bank; and said judgment as so reformed will be affirmed.