Cramer v. Cornell.

BAUGH, Justice. W. M. Cramer, ■ payee in a note for $8,500, executed by Cornell, brought this suit against Cornell thereon and to foreclose a lien on certain mineral interests in lands in Pecos county, Tex. Cornell by proper pleadings under District and County Court Rule 31, admitted plaintiff’s cause of action except as same rfiight be defeated by the special defenses pleaded by him to said note and lien, and was given the right to open and close both in the admission of evidence and in argument. The case was tried to a jury, but at the close of the evidence the court instructed a verdict in favor of .Cornell, and rendered judgment accordingly, from which judgment Cramer has prosecuted this writ of error. The case arose as follows: In 1930 Dorothy Fletcher, then a manicurist in a barbershop in Dallas, brought suit in the district court of Dallas county, against Carl Cromwell, then a resident of Tom Green county, Tex., for divorce and for partition of community property, alleging that she had lived w.ith Cromwell as his common-law wife from 1913 to 1918, and that he abandoned her in 1918. Cromwell denied the existence of any marital relationship' with her. He had married Luella Cromwell in 1919, to which marriage was born a daughter, and was living with such wife and daughter at San Angelo when said suit was filed. Cornell represented Cromwell as-his attorney, and with him was associated; Bailey, Nickels & Bailey, of Dallas. Cram-er represented the plaintiff in the Dallas suit. Numerous conferences and negotiations were had between counsel for the respective parties towards a settlement of that case. Finally an agreement between Cornell and Cramer, consented to by their respective clients, was reached, and the instruments here involved were executed. According to the testimony of Cornell, Cromwell was then insolvent, and because of his friendship with the family and to prevent humiliation, embarrassment, and chagrin to the wife and daughter, he agreed in effect to lend his credit to Cromwell in order to effect such settlement. It ■is not controverted that the condition of such'settlement for the sum of $8,500 was that a judgment be entered in the divorce suit, expressly finding and reciting that no. marriage relationship had ever existed between Cromwell and Dorothy Fletcher. Pursuant to this agreement, which was fully understood by Cramer, Cornell and Joe Bailey, Jr., who acted for his firm, and as intermediary and trustee in the matter, Cornell signed the note for $8,500 and the mineral deed in question, leaving the name of the payee ,in the note and that of the grantee in the mineral deed blank, and forwarded same to Bailey in Dallas to carry the agreement into effect. Upon instructions from Cramer, his name instead of that of his client was by Bailey inserted in the instruments. A judgment, apparently drawn by Bailey’s firm and bearing the o. k. of Bailey and Cramer, was entered in the Dallas suit to the effect that the plaintiff in that suit “take nothing as against Mr. Carl Cromwell, and Mrs. Luella L. Cromwell, [1117] and that said defendants go hence without day, with their costs in this behalf expended, etc.” Cornell did not draw such judgment, and did not know until after his' note to Cramer became due that it did not contain the adjudication by the court that no marriage status ever existed between Cromwell and Dorothy Fletcher, which was the moving consideration for its execution. He pleaded these facts as constituting a failure of consideration for said note and lien. Plaintiff in error’s first contention as embodied in his.first four propositions is that under Cornell’s admission under District and County Court Rule 31 that Cramer had a good cause of action, “except so far as it may be defeated in whole or in part by the facts alleged in the answer constituting a good defense, which may be established on the trial,” he was entitled to a judgment in his favor, citing Ferguson v. American Bank & Trust Co. (Tex.Civ.App.) 13 S.W.(2d) 459; Nat’l Bank of Commerce v. Williams, 125 Tex. 619, 84 S.W.(2d) 691, and Phoenix Mut. Life Ins. Co. v. Bernfield (Tex.Civ.App.) 101 S.W.(2d) 1025. This contention is that having made such admission the payor of a note cannot set up a want of consideration to defeat .it, but is confined to defenses in the nature of confession and avoidance. But this rule does not prevent a plea of failure of consideration after the execution of a binding obligation. This rule would be applicable to a plea of want of consideration." But a plea of want of consideration implies that there never was any consideration and that no valid obligation ever came into existence. But such rule is not applicable where a consideration existed at the time of the execution of such note but later failed. Nat’l Bank of Commerce v. Williams, supra; Smith v. Bank, 74 Tex. 541, 12 S.W. 221; American Land Co. v. Dale (Tex.Civ.App.) 55 S.W.(2d) 229, 231. In the instant case Cornell expressly pleaded, as a defense to said note, failure of consideration. Plaintiff in error further contends that because Cornell, or his agent, prepared the judgment entered, he is estopped to assert that .it was not the judgment agreed upon. But clearly, under the uncontrovert-ed facts, Cramer cannot assert estoppel against Cornell. Had Cornell himself prepared the judgment this might be true. But Cornell knew nothing of the form and contents of the judgment entered at the time it was entered and his note delivered to Cramer. Manifestly Bailey was acting as his agent in that regard. As such, the only authority he had, the agreement having been reached between the principals to the transactions, was to deliver the note and mineral deed on condition that a judgment be entered forever foreclosing the question that the plaintiff in that suit had never been Cromwell’s wife. Bailey had no authority to bind Cornell on the note and mineral deed otherwise. And Cramer, according to his own testimony, knew that such was the understanding and agreement, and the moving consideration for the note, and said note was made payable to him at his request. Not only did he know that such was the express agreement as to the judgment to be entered, but he also knew that Bailey knew it. Yet he approved and permitted to be entered in the case a judgment wholly at variance with the agreement. Manifestly he is in no position to assert an estoppel against Cornell on matters of which he was fully informed, but on which Cornell was not. He was in no sense misled in the premises. Plaintiff in error also asserts as a proposition that the “take nothing” judgment as entered in the Dallas suit was a judgment disposing of all the issues involved in that case. This proposition is neither briefed nor discussed and no authorities cited in support of it. It is not necessary for us to determine just what, in the light of all the pleadings in the Dallas county suit, such judgment does adjudicate; or whether it might be corrected in a proper proceeding. Suffice it to say that, prior to its entry, and without a trial on the merits of suit, the judgment to be entered was agreed upon by the parties. It was in effect a consent judgment, wherein the court undertook to give effect by judicial decree to the agreement of the parties. We are not here concerned with the question of whether, in a divorce suit, the court is bound to recognize or enter any decree agreed upon by the parties. He was clearly at liberty to refuse to do so without first hearing evidence, and then rendering a judgment based thereon. But that question is not before us. Suffice it to say that the only judgment which Cornell or his client would agree to, and the only one which, without a hearing upon the merits, they authorized to be entered, was not entered in the instant case. We conclude, therefore, that the trial court was authorized to instruct a verdict in favor of Cornell on the ground that the [1118] consideration for the note sued upon had failed; and the judgment rendered is accordingly affirmed. Affirmed.