Norris Smith v. Bogata Nat. Bank

WILLSON, C. J. (after stating the facts as above). The judgment in favor of appel- *106 lee against appellants was predicated on a verdict returned in conformity to a peremptory instruction given the jury by the court Appellants insist it was error to so instruct the jury, because, they say, it appeared from the testimony that appellants made the original note, and the renewal note,sued on as well, for the accommodation of appellee. We do not agree it so appeared. The view most favorable to appellants which can be taken of the testimony is that it’ appeared therefrom that they were not the borrowers of the money, and that they signed the note as makers to enable Griffis &.Devlin to borrow it of appellee to pay a debt Griffis & Devlin owed. .Plainly, in that view, the accommodated parties in the transaction were Griffis & Devlin, and not appellee. In support of their pleas of payment and lack of consideration to them for making the note sued on, appellants offered to prove by the wife of said J. T. Griffis and other witnesses that after the execution of the original note, and before the execution of either of the renewal notes, to wit, on January 7, 1921, she and said Griffis, in conformity to an agreement they had with appellee, made a note for $20,000 to appellee, securing same by a trust deed on 529 acres" of land, “to take up, pay off and extinguish” said original note and other indebtedness of said Griffis to.ap-pellee. The testimony was objected to on the ground that appellants’ pleadings did not entitle them to make such proof, on the ground that the note sued on was made long after the time when the $20,000 note and trust deed were made, and on the ground that it was irrelevant and immaterial. The action of the trial court in sustaining the objection and excluding the testimony is, assigned as error. The pleas referred to were general ones, that the note sued on had been paid, and that it was without a consideration to appellants. The rule is that a general plea of payment authorizes proof only of payment in money. Article 1907, Vernon’s Statutes; Able v. Lee, 6 Tex. 427. So far, therefore, as the testimony was offered to prove payment, it was not error to exclude it on the ground that it was not authorized by appellants’’ pleadings. But we think the testimony was not subject to objection on any of the grounds urged to it, so far as it was offered to show that the note sued on was without a consideration to appellant; and, therefore, that the trial court erred when he excluded it. Testimony heard at the trial indicated that, while appellants were the makers of the original and renewal notes, same were made to cover a loan by appellee, not to them, but to Griffis & Devlin. In that view appellants were accommodation parties to the notes, and Griffis and Devlin were the principal debtors, and as such ultimately liable for the debt. If ■ as a matter of fact the $20,000 note and trust deed were made by Griffis and his wife “to take up, pay off, and extinguish” the original note, and appellee accepted same for that purpose, said originál note was thereby taken up, paid off and extinguished, for the law would give effect to the agreement. 8 O. J. 273, 274, 569, 573. The rule is stated at page 569 of the volume cited as follows: “So far as the taking of a renewal or new bill or note for an existing bill or note is concerned, it is generally held that the new bill or note is not a payment of the original instrument in the absence of an understanding or agreement to that effect; but the new bill or note may constitute a payment of the old one where it was so agreed or intended.” If the effect of the transaction in which Griffis and his wife made the $20,000 note and trust deed to appellee was to take up, pay off, and extinguish the original note made by appellants, it of course ceased to be an obligation binding on them. If it did, then there was no consideration to appellants for the, execution by them of the note sued on, for it was a mere renewal, without any new consideration, of the original note. We think the assignments present no other reason why the judgment should not be affirmed, and it will be reversed and the cause will be remanded for a new trial, solely because of the error of the court below in excluding the testimony referred to.