On Second Motion for Rehearing. In the opinion of the court heretofore rendered this statement is made:
"In the purchase of the $28,000 note by Jones it has never been shown that he was ignorant of any fact."
This is incorrect. It was agreed upon the trial —
"That said Jones was not one of the promoters of said railway company and was in no manner connected with same or with any of the promoters or agents in the organization or promotion of such enterprise, and the only dealings he had with said company was the purchase of the * * * said $28,000 note and the taking over of the securities attached thereto, and that he had no actual knowledge of the conditions affecting any of said notes or lands, except such information as was given him by Dennis, who represented that the board of directors had by resolution authorized him to make the transfer of said note and securities, and he relied upon such information and acted thereon."
The first statement is therefore withdrawn, and the agreement just quoted adopted in lieu thereof. We are of the opinion, however, that this should make no difference in the disposition of the case.
In view of the confusion which the statement of the difference in the grounds upon which the conclusions of the majority of the court and that of Judge HALL are based has apparently caused, we deem it proper to restate such conclusions in more detail.
The case was tried, briefed, and decided on the theory that it had been settled by the decision in the case of Jones v. Abernathy, 174 S.W. 682, that the $28,000 note was void and Jones could not maintain an action thereon. Appellant admitting the correctness of this conclusion, contended that, by reason of the fact that the money borrowed on the $28,000 note had been received and used by the railway company, he had a cause of action against the railway company on an implied promise to repay this money, and that he held some right in the collateral attached to the $28,000 note to secure this obligation. All the members of this court, however, agreed in the conclusion that, even if Jones did have such cause of action on the implied promise to pay the money received, the invalidity of the principal $28,000 note discharged the collateral and he had no right to it. This conclusion was based on the authorities referred to in the Jones-Abernathy Case, and on the holding of the Supreme Court in Otto v. Halff. 89 Tex. 384, 34 S.W. 910-913, 59 Am. St. Rep. 56, where a principal note, having collateral pledged to secure it, was altered by the holder and thus rendered invalid, and the maker of the note was liable for the original debt for which the note was given in payment, and it was held that the collateral was discharged as being a part of the contract evidenced by the note and not of the original contract of indebtedness.
We all agreed in the further conclusion that appellee Brown had paid the note to Jones under the mistaken belief induced by the representations of Jones' agents for collection that Jones was the rightful and innocent holder thereof. In the opinion of Judge HALL this was all that was necessary to be shown to entitle Brown to a recovery. The majority of the court were not willing to commit themselves to this broad conclusion when the facts of the case did not, in our opinion, require it. If Brown really owed the note and was originally bound to pay it to the rightful owner, we doubted whether he could recover what he had paid to Jones, who had possession of the note and delivered it to him on such payment without *Page 221 further showing that liability for the payment thereof still existed in favor of the rightful owner of the note, the Enid, Ochiltree Western Railroad Company; and we were inclined to think that the railway company, as it had intrusted the note to Jones, clothed him with indicia of rightful ownership, and plaintiff was thus induced to make the payment which facts it became necessary for plaintiff himself to allege and establish before he could recover the payment voluntarily made would be estopped from denying Jones' right to receive payment and demanding a second payment of the note from Brown. But it was pleaded and found as a fact by the trial court, and no question of the finding made by appellant in this court, that Brown had a good defense to the note as against the railroad company, because of the fact that it was procured by false representations and the consideration therefor had failed. And the majority of the court desired that these facts be stated so that the true extent of our holding would be understood. Such holding is that appellee Brown, having a good defense to the note of which he was prevented from taking advantage by reason of the payment to Jones, under the circumstances stated, is entitled to recover the payment so mistakenly made.
We are of the opinion that the motion for rehearing should be overruled.