# Hughes v. Straus-Frank Co. > Court of Appeals of Texas · March 29, 1939 · 127 S.W.2d 582 URL: https://www.frixlaw.com/law-library/cases/9832230 ## Case - **Full name:** Hughes v. Straus-Frank Co. - **Court:** Court of Appeals of Texas - **Decided:** March 29, 1939 - **Citations:** 127 S.W.2d 582; 1939 Tex. App. LEXIS 621 - **Precedential status:** Published - **Opinion:** On rehearing - **Judges:** Smith - **Cited by:** 8 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9832230 ## Opinion text On Motion for Rehearing. It was stated in general terms i'n the original opinion, that appellee brought this suit and recovered judgment against the two McShans and Hughes, upon the Mc-Shans’ note dated November 1, 1934, for $2,728.12; that said note had been given in renewal of O. L. McShan’s note of December 20, 1933, for $2550, which it appears represented the amount of McShan’s indebtedness to appellee at .the time Hughes revoked his guaranty, on October 9, 1933; which indebtedness consisted of a balance due appellee on McShan’s installment note of July 11, 1932, amounting to $618.60, plus $55.32 interest, and a balance of $1,-877.64 on McShan’s open account. These items represented McShan’s indebtedness to appellee incurred during the life of the Hughes guaranty. In its motion for rehearing appellee vigorously contends that we were in error in stating the nature of the suit to be upon the' note of November 1, 1934; that the suit was in fact.upon the open account and balance due on McShan’s original note as those obligations existed at the time the guaranty was revoked. We have carefully reviewed the record in the light of this contention, which is definitely made for the first time in the motion for rehearing. The cause went to trial upon appellee’s original petition and its first and second supplemental petitions. In the original petition appellee alleged : “1. That heretofore, to-wit, on the 1st day of November, 1934, the defendants, O. L. McShan and J. B. McShan, made, 'executed and delivered to the plaintiff their certain promissory note as follows, to say: for the principal amount of Two Thousand Seven Hundred Twenty-eight and 12/100 Dollars ($2728.12), due on demand, said note to bear interest at the rate of eight per cent (8%) per annum from date until maturity and from maturity until paid at the rate of ten per cent (10%) per annum, said note further providing for an additional amount of fifteen per cent (15%) on both principal and interest due as a reasonable attorney’s fee if placed in the hands of an attorney for collection, said note being in words and figures substantially as follows : (describing said note). “2. That from the time of the execution and delivery of such note to1 the present time, plaintiff has been the owner and holdr er of such note, and is now, and, though the defendants, O. L. McShan and J. B. McShan, have been often requested, they have failed and refused, and still so fail and refuse, to pay said note, or any part thereof, and the plaintiff has placed said note in the hands of the undersigned attorneys, has employed them to file this suit, and has agreed to pay for their services herein the fifteen per cent (15%) provided in said note as attorney’s fees, same being a reasonable and the usual and customary fee in such cases. “3. That by reason of the execution and delivery of said note the defendants, O. L. McShan and J. B. McShan, became bound and promised and agreed to pay the plaintiff the amount of such note, together with interest and attorney’s fees, according to its reading, tenor, and effect, and though often requested defendants, O. L. McShan and J. B. McShan, have failed and refused to pay said note or any part thereof, to plaintiff’s damage in the amount of Three Thousand Three Hundred Seventy-one and 77/100 Dollars ($3371.77) by reason of said note.” It was then alleged — “5. Plaintiff would further show the Court that after the execution and delivery to it of the above set *587 forth written contract of guaranty by the defendant, S. W.-Hughes, it relied upon the promises and representations made by the said S. W. Hughes and sold and delivered to the defendant, O. L. McShan, goods, wares, and merchandise to the extent that said O. L. McShan became indebted to Straus-Frank Company in the amount of Three Thousand Three Hundred Seventy-one and 77/100 Dollars ($3371.77) which sum the said O. L. McShan, defendant, though often requested, has failed and refused and still refuses to pay; and which sum the defendant, S. W. Hughes, though often requested, has failed and refused, and still so fails and refuses, to pay under the terms of his v ritten contract of guaranty, to its damage in said amount.” , After alleging certain transactions between McShan and appellee, following the revocation of Hughes’ guaranty, appellee prayed as follows: “Wherefore, premises considered, plaintiff prays the Court that the defendants, O. L. McShan, J. B. Mc-Shan and S. W. Hughes, and each of them be duly cited to appear and answer herein, and that on final hearing hereof it be given judgment of and against the defendants, O. L. McShan, J. B. McShan and S. W. Hughes, jointly and severally, by reason of said note and guaranty sued on, in the sum of Three Thousand Three Hundred SeventyTone and 77/100 Dollars ($3371.77); and plaintiff further prays the Court that it be given judgment of and against the defendants, O. L. McShan and J. B. Mc-Shan, jointly and severally, in the further sum of One Thousand One Hundred Eighty-Seven and 77/100 Dollars ($1187.77) as evidenced by the itemized and sworn account sued on; and plaintiff further prays that it be allowed its interest, attorneys’ fees and all costs of court in this behalf expended, and for such other and further relief, general or special, in law or in equity, as it may be able to- prove itself entitled.” It must be observed that the allegation setting up the indebtedness incurred by McShan during the life of Hughes’ guaranty was general and consisted simply of the allegation that during that period ap-pellee sold certain merchandise to the Mc-Shans, and “McShan became indebted to Straus-Frank Company” in the sum of $3,371.77. Subsequently appellee filed its first supplemental petition, in which it set out in detail that the indebtedness incurred by McShan during the life of Hughes’ guaranty consisted of “Balance due on note (prin).... $ 618.60 (Int). 55.32 “And on open account....-. 1,877.64” making a total of $2,551.56. To these allegations Hughes excepted in his first supplemental answer, but the court overruled the exception for reasons not apparent from the order thereon. But the reason does .appear in a bill of exceptions in the statement of facts, as will now be seen. It seems that upon the trial appellee was offering certain ledger accounts from ap-pellee’s books incurred during the life of the Hughes guaranty. To this line of testimony appellant objected upon the ground that there was no support in the pleadings therefor, and further that “The plaintiff has sued upon a note. He filed a supplemental petition referring to the account, and upon our objection to it stated to the court in open court that he was not relying and did not base his cause of action upon the matters stated in his supplemental petition, * * * ” and upon the further ground that it was not shown that the witness was qualified. To which counsel for appellee interrupted to state: “Mr. Rice: If the court please, the evidence is offered for the sole and only purpose— “The Court: I understand the purpose of it. I think probably the last objection might be good. I am going to sustain it for the time being.” This statement was not questioned, but was apparently acquiesced in by court and counsel. The witness was then qualified and ap-pellee again offered the ledger accounts, and the following occurred: “Mr. Rice: Now, we reoffer them. “Mr. Holloway: We renew our objection to them for the purpose of the record. I don’t know whether the reporter has it, but I want to be sure. The court does recall that in connection with the exceptions contained in the first supplemental answer of the defendant S. W. Hughes, Mr. Rice, attorney for plaintiff, stated to the court that he was not seeking to base his judgment upon the allegations in the *588 supplemental petition on the notes and ac- ' Count alleged therein. Is that correct ? “The Court: Yes. I understood he was not declaring .upon the open account. ‘ “Mr. Rice: -1 am not declaring upon the ’ open account.. “The Court: I will overrule the objection. “Mr. Holloway: I renew the objection previously made in the light of the statement of counsel and the statement of the court recognizing the statement of counsel. “The Court: Yes, I will overrule the obj ection. “Mr. Holloway: Note our exception.” After some further colloquy between counsel and the court, and among them- • selves, counsel for appellee finally offered the ledger sheets in evidence and this occurred : “Mr. Rice: Gentlemen of the jury, plaintiff now offers in evidence three ledger sheets for the purpose of showing how this . account was carried on the books of Straus-Frank Company, from June, 1932, until October 7, 1933. (The instruments are attached, marked Exhibits No. 20, 21 & 22.) “Mr. Holloway. -I want to add this further objection, that those instruments are not admissible in the suit on the note as the plaintiff’s cause of action is predicated upon the note- and his statement in open court that he is suing on the note and not on the open account and, therefore, there is no basis in the pleadings for the admission of the evidence on the open account. “The Court: I will overrule the objection. “Mr. Holloway: Note our exception.” It is obvious from the foregoing that the case was tried, the pleadings settled, exceptions overruled, and evidence admitted and excluded, upon the theory, and appellee’s assurance, that appellee was seeking to hold appellant upon his alleged guaranty of the note of November 1, 1934, • and not upon the note executed and manuring, .and open account accruing, during the life of the guaranty. In view of the trial pleadings, and of the fact that .it is now seriously contended, for the first time • in appellee’s motion for rehearing, that the suit was not upon the note of the two Mc-Shans of November 1, 1934, but upon the balance due on the original note of July 11, 1932, and open account (which items constituted the indebtedness of McShan at the time of the revocation of the Hughes guaranty), and in view of the record as above set out, we adhere to the statement that this suit as against appellant was upon his claimed guaranty of the final note executed by the two McShans on November 1, 1934, thirteen months after the revocation of the guaranty. Appellee further vigorously contends that if the evidence was not conclusive, it was sufficient at least to support a finding, that the goods sold under the Hughes guaranty were in fact sold to and purchased by O. L. McShan, the person whose credit was guaranteed, and pot to J. B. McShan, a stranger to the guaranty. If the matter were now material to the disposition of this appeal we would be inclined to recede from our original holding in this matter and acquiesce in appel-lee’s contention that the evidence raised that issue, or at least was not conclusive against appellee. Be that as it may, however, appellee waived that contention, which was éssential to recovery, by failing to elicit a jury finding upon that issue,.that burden being very clearly on appellee. Appellee further contends that the language of the guaranty authorized the McShans and appellee to renew and change the form of the original indebtedness whenever and in whatever way they might agree upon after the revocation of the Hughes guaranty, the pertinent clause of which is: “and I also agree that said indebtedness or any part of it may be changed in form and in terms of payments as often as may be agreed upon between you and the subj ect party.” We adhere to our original holding that the rights and obligations of the respective parties were fixed by the condition and amount and form of the indebtedness at the date the guaranty was revoked and that appellee and the principal obligor had no. warrant to thereafter make new and different and more onerous contracts which would be binding upon the absent guarantor. Annotations 81 A.L.R. 795 ; 100 A. L.R. 1236; 117 A.L.R. 964 . Appellee’s motion for rehearing will be overruled. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9832230. Public record. Not legal advice.