
    BALDWIN et al. v. JORDAN et ux.
    (No. 358.)
    (Court of Civil Appeals of Texas. El Paso.
    Nov. 19, 1914.
    Rehearing Denied Dec. 17, 1914.)
    1. Pledges (§ 57) — Action to Foreclose— SUFFICIENCY OE PETITION.
    In an action on a principal note for the amount shown to be due and for attorney’s fees provided therein, less the .credits, and for a foreclosure of the plaintiff’s lien upon a note given as collateral security and for an order for its sale, the petition was not insufficient because it did not allege that the collateral note was ever presented to the payor for payment, or that payment thereof was ever refused.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 184, 185; Dec. Dig. § 57.]
    2. Pledges (§ 57) — Action to Fokeclose— Sufficiency of Petition — Defensive Matters.
    In such action, the petition was not insufficient because it did not allege that the payor of the collateral note had not paid it to plaintiff, or that defendants were not entitled to any credit on the. principal note sued on, by reason of any payment on the collateral note, since such payments were defensive matters.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 184, 185; Dec. Dig. § 57.]
    3. Pledges (§§ 21, 30) — Collateral Note-Rights of Parties.
    When a collateral note has been indorsed and delivered, the pledgee is the legal owner of it to the extent of the debt, and the pledgor is the owner of the remainder, and the pledgee is entitled to collect the note, though he must use diligence in doing so.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 45, 184, 185; Dec. Dig. §§ 21, 30.]
    4. Pledges (§ 57) —Enforcement—Parties.
    In an action on a note for the amount shown to be due, and for attorney’s fees provided therein, less the credits, and for a foreclosure of the plaintiff's lien upon the collateral notes and a sale thereof, the payor of the collateral note, who indorsed it in blank, was not a necessary party defendant to the suit on the principal note.
    [Ed. Note.- — For other cases, see Pledges, Cent. Dig. §§ 184, 185; Dec. Dig. § 57.]
    Appeal from District Court, Harris County; Wm. Masterson, Judge.
    Action by 6. W. Jordan and wife against J. C. Baldwin and others. Judgment for plaintiffs, and defendants appeal.
    Affirmed.
    Stevens & Stevens, of Liberty, and Baldwin & Baldwin, of .Houston, for appellants. J. V. Meek, of Houston, for appellees.
    
      
      For other eases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes
    
   WALTHALL, J.

On February 7, 1911, appellants Jacob C. Baldwin and Charles H. Taylor executed and delivered to appellee Mrs. Cora Jordan, wife of appellee G. W. Jordan, a promissory note for $1,239, due in six months from date, promising interest and attorney’s fees on failure to pay the note or interest when due, should the note be placed in the hands of an attorney for collection, or if collected by legal proceedings, and any judgment rendered to bear 10 per cent, interest. The note further pledged, as collateral security for the payment of the principal note, one note for $2,140, made by IC H. Whitmire to Jacob C. Baldwin, of date February 1, 1910, due in two years, and secured by vendor’s lien on real estate. The note further provided that in the event of default in its payment at the option of Mrs. Cora Jordan, or holder, the note should become due and payable, and that, upon default of payment at maturity, Mrs. Cora Jordan was authorized and empowered to sell the collateral Whitmire note, either at private sale or,at public auction at her option, for the purpose of paying the note." Should the collateral note be sold at auction, three days’ notice of the time and place of sale should first be given, as provided in the note, all costs to be charged to the makers of the note, and, on a sale, the holder could become the purchaser of the collateral note, if the highest bidder. The note then made further provision for costs in event of any litigation on the collateral note. On March 27, 1913, ap-pellees brought suit on the principal note for the amount shown to be due and for attorney’s fees, less the credits indorsed on the note, and asked for a foreclosure of the pledg-ee’s lien upon the collateral note and for order of sale and for general and special relief. Jury was waived. The court overruled defendant’s exceptions, heard the evidence, and rendered judgment for plaintiffs.

Appellant’s first assignment of error complains of the order of the court in overruling their special exception to plaintiffs’ petition because it failed to allege that the collateral note was ever presented to the payor, Whitmire, for payment, or that payment thereof was ever refused. If the suit had been on the collateral note or some reason shown in plaintiff’s petition why demand should have been made on the payee of the collateral note by the holder, the exception might have been well taken; but the petition shows none, and appellants have pointed out none. The assignment is overruled.

The second assignment is to the effect that the court should have sustained their exception to plaintiff’s petition, because it did not allege that Whitmire had not paid to plaintiff the collateral note or that defendants were not entitled to any credit on the note sued on by reason of any payment on the collateral note. Whether the note sued - on or the collateral note had been partly paid or fully paid were defensive matters and need not be alleged by the plaintiff. The appellants, under their first proposition under this assignment, state correct propositions of law, but have no application to the assignment. It is elementary that, when a collateral note has been indorsed and delivered, the pledgee is the legal owner of it to the extent of the debt, and the pledgors are owners of the remainder, and that the pledgee is entitled to collect the note and must use diligence to do so, but there is nothing in these principles of law that necessitate or even suggest the propriety of the holder of the collateral note to make any statement at all, in suing on the principal note, with reference to it, more than the fact of the pledge, the lien given by reason thereof, and a prayer for the foreclosure of the pledgee’s lien. A pleader may, if he prefers to do so, show all credits the defendants are entitled to, and, if the collateral note is then due, may embrace it in his suit and ask a foreclosure of the vendor’s lien, but he is not required to do so.

By defendant’s third and fourth assignments they claim that Whitmire, the payor of the collateral note, was a necessary party defendant in the suit on the principal note, and, if not a necessary party, then a proper party, and complain that the court should have given them permission to make Whitmire a party defendant, in order that all matters between plaintiffs and defendants and Whitmire might be adjusted, and that AVhitmire in that suit might have an opportunity to foreclose the vendor’s lien expressed in the collateral note. We have carefully examined defendant’s first amended original answer, and find no facts alleged which to us would seem to justify the trial court in delaying the plaintiff’s suit in order to bring in Whitmire, and require the plaintiffs, if the court could properly do so, to sue on the collateral note and adjust the equities, if any, between the defendants and AVhitmire, and to foreclose the vendor’s lien expressed in the collateral note. The collateral note was indorsed in blank by the payee, and we must look to the principal note described above to see the parties’ agreement with reference to it. Unless Whit-mire was a necessary party to the suit on the principal note, the court’s ruling was correct. To hold that Whitmire was a necessary party to a suit on the principal note would be to hold that the holder of the principal note could not elect to sue on it without, also, at the same time, suing on.the collateral note. We do not so understand the law, and the appellants have referred us to no authority so holding. .Appellants refer us to the case of East Texas Eire Ins. (Jo. v. Coffee, reported in 61 Tex. at page 287. The point contended for here is not found or decided in that case. That was an action brought by Coffee to recover on a policy of insurance against fire issued by the insurance company to Coffee' & Pearson, which, with the iconsent of the insurance com-' pany, was transferred by Coffee & Pearson to Coffee. The action was brought by Coffee in his own name and right as the owner of the policy, but the evidence developed the fact that, after the loss, Coffee assigned the policy to Seeligson & Co., probably as collateral security for a debt due by him to thát company. The court held in that case in the language quoted by appellants in their brief:

“A debtor is entitled to have before the court, before a judgment can be rendered against him, such person or persons as plaintiffs as will make the judgment conclusive of the rights of all parties who have an interest in the debt, and he thus be relieved from further costs, vexation, or liability.”

We do not think that case conflicts with our holding in this. The cases appellants refer us to as authorities on the proposition under consideration are cases where suits were brought on the collaterals held, or where separate suits on the principal debt and on the collateral were pending in the same court, and a consolidation of the two was ordered by the trial court. In their fifth and sixth assignments, appellants complain that they should have been allowed the credits shown on the principal note and on the collateral note, which was not done. We have made the calculation as near as we can, and find that the credits were all allowed, with a small margin in appellee’s favor.

The case is affirmed.  