144 S.W. 708
FIRST STATE BANK OF TEAGUE 
v. 
WALTER & HAFNER JEWELRY CO.
Court of Civil Appeals of Texas. Dallas.
February 17, 1912.
        Appeal from District Court, Freestone County; H. B. Daviss, Judge.
        Action by the First State Bank of Teague against the Walter & Hafner Jewelry Company. From a 
judgment for the defendant, plaintiff appeals. Affirmed.
        D. T. Garth, for appellant.
        RAINEY, C. J.
        Appellant sued to recover of appellees an indebtedness owing by the Teague Jewelry Company, a 
defunct corporation. The allegations, in substance, were that the Teague Jewelry Company was a failing 
concern, and while it was in that condition it sold to appellees its entire stock in trade. That it was 
indebted to appellant, and by reason of which appellees became bound for the payment of said 
indebtedness. Appellees answered by general demurrer, general denial, innocent purchaser, and estoppel. 
A trial without a jury resulted in a judgment in favor of appellees, and appellant prosecutes this appeal.
        The trial court's conclusions of fact, which we find are supported by the evidence, are adopted by 
this court, and are as follows:
        (1) I find that defendant, Walter & Hafner Jewelry Company, neither at the time of the institution of 
this suit, nor at any other time, ever owed plaintiff anything.
        (2) I find that this is a suit filed by plaintiff against defendant for the alleged conversion of the 
certain stock of jewelry, fixtures, and iron safe bought by defendant from the Teague Jewelry Company 
about February, 1909.
        (3) I find that about February, 1909, defendant, Walter & Hafner Jewelry Company, in good faith, 
and for its full value in cash, bought and paid for the stock of jewelry, fixtures, and iron safe belonging to 
the Teague Jewelry Company, theretofore doing business in Teague; that said Walter & Hafner Jewelry 
Company in fact paid for said stock of jewelry, fixtures, and iron safe the sum of $1,673.29 in cash; and 
that said $1,673.29 was the full, fair, reasonable, and agreed market value of all of said stock of jewelry, 
fixtures, and iron safe.
        (4) I find that at the time, February, 1909, the Teague Jewelry Company owed plaintiff, the First 
State Bank of Teague, the sum of $1,000, which it had theretofore borrowed from plaintiff; that said 
Teague Jewelry Company had deposited with plaintiff, as collateral security for its said debt, two 
certificates of stock of the Teague Jewelry Company, of 10 shares each, of the alleged aggregate value of 
$2,000; that said shares of stock were then in the possession of plaintiff indorsed in blank; that said debt 
of $1,000 was then past due; and that no suit had then been filed upon said debt or collateral security.
        (5) I find: That after February, 1909, plaintiff, the First State Bank of Teague, made other and 
different loans to D. M. Cave, the president of said Teague Jewelry Company, as follows: On June 3, 1909, 
$208.35, due 30 days after date; and on July 3, 1909, $250 due 30 days after date. And that thereafter, 
to wit, on January 28, 1910, plaintiff filed suit upon its said debt against the Teague Jewelry Company, D. 
M. Cave, Gadsden Millinery Company, et al., in the district court of Freestone county, Tex., and thereafter 
on September 30, 1910, recovered judgment in said court against said Teague Jewelry Company, D. M. 
Cave, Gadsden Millinery Company, et al., for $1,762.40.
        (6) I find that during the pendency of the negotiations by defendant, Walter & Hafner Jewelry 
Company, for the purchase of the stock of goods, fixtures, and iron safe belonging to the Teague Jewelry 
Company, all said negotiations were conducted with the full knowledge of plaintiff, First State Bank of 
Teague, and of W. A. Mixon, its cashier, and were done through said plaintiff and its said cashier; that 
during the pendency of said negotiations in February, 1909, Walter & Hafner Jewelry Company drew its 
check for $1,673.29, the full amount of the inventory and appraisement and value of said stock of jewelry, 
fixtures and iron safe, and deposited same with plaintiff, First State Bank of Teague, and its cashier, W. A. 
Mixon, to be held by said bank and cashier until all the details of the final transfer and delivery of said 
stock of goods, fixtures, and iron safe were completed and the debts and affairs of said Teague Jewelry 
Company were adjusted; that said deposit of said check was done by agreement of D. M. Cave, president 
of the Teague Jewelry Company,
Page 709
and L. H. Walter, as a member of the firm of Walter & Hafner Jewelry Company, each acting for his 
respective concern; and that said deposit was made and held by the consent and with the knowledge and 
acquiescence of plaintiff, First State Bank of Teague, and of said W. A. Mixon, its cashier.
        (7) I find that, when the negotiations between the parties were finally completed and said property 
delivered to defendant, plaintiff, the First State Bank of Teague, and said W. A. Mixon, its cashier, had and 
held said check of $1,673.29 in their possession; and that plaintiff and W. A. Mixon were advised by L. H. 
Walter for the Walter & Hafner Jewelry Company that all negotiations had terminated between the parties, 
that the check was the property of the Teague Jewelry Company, and to deliver it to them.
        (8) I find, as before stated, that said debt of the Teague Jewelry Company to plaintiff of $1,000 was 
then past due at the time plaintiff and said W. A. Mixon had and held said check and were instructed by L. 
H. Walter to surrender it to the Teague Jewelry Company; that said debt of $1,000 was the only debt the 
Teague Jewelry Company then owed to plaintiff; that said check then being in plaintiff's possession, and 
said two certificates of stock also being in its possession, plaintiff could have collected its said debt by the 
exercise of ordinary diligence and still had on hand in its possession of the funds and securities of the 
Teague Jewelry Company a considerable amount over and above the value and amount of its said debt; 
and that plaintiff failed to exercise ordinary diligence for the collection of its debt, but delivered said check 
to D. M. Cave, president of the Teague Jewelry Company, who received the cash thereon and appropriated 
it.
        (9) I find that all the notes offered in evidence on the trial of this case, to wit, two notes for $500 
each, dated March 9, 1909, and payable September and November, 1909, respectively, one note for 
$208.35, dated June 3, 1909, due 30 days after date, and one note for $250, dated July 3, 1909, due 30 
days after date, which constituted the basis for plaintiff's cause of action in the suit against the Teague 
Jewelry Company on which the judgment for $1,762.40 in the district court of Freestone county, Tex., are 
all dated after the purchase by defendant, Walter & Hafner Jewelry Company, from the Teague Jewelry 
Company on February ____, 1909; and that defendant, having purchased before their execution, would 
not be liable therefor. And I therefore find that defendant Walter & Hafner Jewelry Company have not 
become in any way liable to plaintiff upon its alleged cause of action; and that defendant, Walter & Hafner 
Jewelry Company, have not converted any of the property of the Teague Jewelry Company to their own 
use in any such way as to render them liable to the plaintiff for the debt of the Teague Jewelry Company.
Conclusions of Law.
        Appellant knowing of the negotiations between the Teague Jewelry Company and appellees for the 
sale of the entire stock of the Teague Jewelry Company, and being informed of its consummation, and 
having in its hands the consideration which it turned over to said Teague Jewelry Company, and failing to 
apply said consideration to the payment of the debt due it by the Teague Jewelry Company, it is estopped 
from asserting any claim therefor as against appellees.
        The judgment is affirmed.