text:
    J. D. Anderson et al. v. Robert Lockhart.
    (March 13, 1880.)
    Limitation.— "When a sale of land was ordered and made under the Probate Act of 1S48, within twelve months from the original grant of letters of administration, on the suggestion of the administrator that there, were no debts and “no necessity for keeping the administration open any longer, that the tract of land was incapable of partition, and that the interest of the heirs would be best sub-served by selling the said land for cash,” held: (1) Said sale was a nullity. (2) Parties holding under such title could claim the benefit of the statute of limitation of five years.
    Improvements.— The vice in such" title would not prevent parties holding under it from claiming as innocent possessors the value of their improvements.
    Appeal from De Witt county. Opinion by Walker, J.
    Statement.— September 20, 1875, Lockhart brought an action of trespass to try title for four hundred and forty-eight acres of land against appellants. The defendants pleaded not guilty, setup title in themselves under an older title, pleaded limitations of three and five years, and suggested improvements made in good faith. The plaintiff claimed under an administrator’s deed of date February 27, 1875, made by A. Jeffries, administrator of the estate of Thos. W. Griffith, deceased.
    It appeared that in February, 1866, B. F. Griffith was appointed by the probate court of Washington county administrator of said estate and qualified as such. In March he returned an inventory consisting of a few articles of personal property, which were at once sold, realizing $87.50. September 6, 1866, the administrator filed an additional inventory of the tract of four hundred and forty-eight acres in controversy in this suit and situated in .Be Witt county, appraised at $5 per acre. October 1, 1866, the administrator filed an application for sale of the land, and, copying from the petition, it “ shows to the court that there are no debts against said estate and no claims in favor of said estate known to affiant, and no necessity of keeping said administration open any longer; with a view to closing same petitioner states that there is a tract of land (describing it) which is incapable of partition and distribution (there being seven per stirpes heirs of said decedent); that the interest of said heirs would be best subserved by selling.said land for cash on the first Tuesday in December next, in Be Witt county, as in cases of sheriff sales, when the purchase money thereof will be paid in petitioner’s hands subject to partition and distribution. Wherefore he asks for an order of sale of said lands in accordance with this petition,” etc.
    On the same day the court made the following order (being a general' order of sale):

    “ The application of B. F. Griffith, administrator of the estate of Thos. W. Griffith, deceased, coming on to be heard, and the matters and things therein set forth having,, by the court,- been duly considered, it is therefore ordered by the court that said administrator do, on the first Tuesday in December, 1866 (the 4th day of said month), proceed to sell (advertising same as in case of sheriff’s sales), for cash, before the court-house door, in Be Witt county, to the highest bidder, a tract of land described, etc., . . . (describing the tract), the same being the property of said estate, and make to this court report of said sale as the law directs.”
    The return of sale was made January 28, 1867, showing that the land had been sold to James P. Pridgeon at $1.25 per acre; total, $560.50. On the same day the court, by an order, confirmed the sale and ordered that ie the administrator make title therefor.” May 28th the administrator filed an exhibit reporting $638.42 money on hand, having made some collections not inventoried, after deducting costs, expenses, commissions and debts paid, reporting a debt of $47 unpaid.
    August 17, 1869, Lockhart filed an application alleging his ownership of a purchase-money note allowed and approved against the estate, and a lien on the tract of land; alleged that the former sale was fraudulent and made to' deprive petitioner of his lien; was without jurisdiction and void, etc.; praying for an order of sale under his lien. This application was resisted by the administrator, but October 30, 1869, it was granted, the order reciting “ that the administrator had, prior to the said application to sell said land for partition, full notice of the existence of said note and lien, and it further appearing that the proceedings and pretended order of sale for partition were made without authority of law and in violation of the express provisions of the statute and laws of the state in such cases .made and provided. It is therefore considered by the court that said order of sale is and was absolutely void.” . . . The decree further ordered the sale in satisfaction of Lockhart’s lien.
    January 1, 1870, order of sale was renewed. Bale was made and return made by an attorney for the administrator. The sale was confirmed March 5, 1870, and the administrator ordered to make deed to Lockhart, the purchaser. November 3, 1873, Lockhart complained against the administrator, and in 1874 he was removed. October 2,1874, A. Jeffries applied for and was appointed administrator de bonis non. He qualified and returned an inventory containing only the tract of four hundred and forty-eight acres of land aforesaid. October'19, 1874, Lockhart again filed an application for an order of sale, alleging that he never had obtained a deed for the land. The order was made, and under the order Jeffries made sale January 5, 1875.
    The sale was returned and approved, and deed duly executed to Lockhart for the land February 27, 1875.
    The defendants claimed under the deed executed by B. F. Griffith to James Pridgeon, under the sale first ordered; the deed bore date April 2,1867. Mesne conveyances were exhibited, all duly recorded. There was testimony tending to show that the land had been held adversely by parties under the Pridgeon purchase, using and cultivating same continuously from 1867. There was testimony as to payment of taxes, etc. The court refused to hear testimony of value of improvements.
    The court instructed the jury that plaintiff’s title was good; that the Pridgeon title was void. Defendants asked instructions on the subject of valuable improvements under their statutory suggestion of good faith; also their defenses under the statutes of three and five years’ limitations. These were refused.
    The jury found a verdict for plaintiff, and motion for new trial having been overruled, defendants appealed.
    The errors assigned are:
    1. Error in admitting the proceedings from the probate court evidencing a sale to plaintiff, and the charges given and refused.
    2. Excluding testimony to value of improvements, etc.
    The appeal involves:
    1. The. effect of the first sale, whether a nullity.
    2. Whether such title can support a subsequent purchaser’s limitation of three or five years, and if so, when did limitation begin to run ?
    3. Whether the vice in the title prevents the present occupants from claiming as innocent possessors the value of their improvements ?
   Opinion.— 1. Was the sale made in 1866 a nullity? It was not made to pay debts, for the application for sale negaíived the existence of indebtedness. The record does not show the existence of a widow or children for whose year’s allowance, or for money in lieu of exempt property, the money was needed. The case presents simply a sale within twelve months from the original grant of letters of administration on the suggestion of the administrator that there were no debts and “ no necessity for keeping the administration open any longer; ” . . . that the tract of land is incapable of partition, there being seven stocks of heirs, and that 66 the interest of said heirs would be best subserved by selling said land for cash.” The proceedings were had under the probate act of 1848. The authority to sell for partition arises under that act from an inability to divide the property so ordered to be sold among the heirs who have been ascertained and duly cited.

The partition proceedings could be commenced at any time after the first term of the court after the expiration of twelve months from the original grant of administration by one or more of the heirs or devisees filing a complaint and causing the administrator, the heirs and devisees to be cited to appear at a regular term of the court, etc. P. B., arts. 1348 and 1357. After service of such citation, a decree of partition may be made ascertaining the heirs, etc., and the share to each, and appointing commissioners. P. B., art. 1358. When, in the opinion of the commissioners, “any portion of the estate is not capable of a fair and equal division,” they may report the fact, and on failure of any of the-distributees to take the land at its appraisement, then sale may be ordered. P. D.,-, art. 1360.

The presence of the partition stage in the administration originates the necessity for, and confers the power of, sale upon the court under the statute. These proceedings are facts apparent on the record; they may not be supplied by the representations of the administrator. If they exist the power of sale follows; nor will its irregular exercise affect a purchaser. It is insisted that as the county court had the power to order the sale for partition, the exercise of it is Avithin the jurisdiction of the court, and that any departure from the statutory mode by Avhich the authority to sell is acquired is but an irregularity and not subject to collateral attack. To this we- cannot assent.

The rule invoked cures by presumption only the absence of or irregularity in the proceedings calling into exercise the power, but does not supply the facts constituting the foundation for it, or conferring it. If it exists, irregular proceedings or want of preliminary proceedings will not vitiate the judgment. If the power exists as a consequence of facts, the facts should exist. If the record shows their absence and negatives their existence, the decree based upon their supposed existence would on its face be without authority.

The probate courts have been repeatedly held to be of general jurisdiction within the subjects committed to them. Their judgments when within their general power will be supported by the presumptions of regularity and validity. But a court of general jurisdiction has not, by reason of the credit given to its decrees, the power to decide upon imaginary facts, and in the absence of parties, and claim effects to follow as legal results. In Littlefield v. Tinsley, 26 Tex., 357, in discussing the validity of a sale made under the probate act of 1846, which, as in the act of 1848, required citation to the heirs, etc., before partition, the court (Moore, J.) held: “ If the order of sale is not a part of the proceedings had by the judge in making the distribution he has no authority to order the sale; if it is it cannot be done until after notice has been given.”

In Flanagan v. Pierce, 27 Tex., 79, “ The sale of the land was sought upon the score of convenience, ‘ to enable the administrator to settle up said estate and satisfy all the ■heirs.’ The county court is not authorized by law to order a sale of land belonging to an estate except for the payment of debts,- or for the purpose of making partition, Avhen, by the report of the commissioners of partition, it shows to the court that the land itself cannot be partitionech” . „ . “ Ordinarily a purchaser afc administrator’s sale will be protected if there has been an order of sale, sale, and a subsequent confirmation by the court. This is because, in such cases, the presumption is indulged that ' the facts were such as to warrant the sale, . . . and not because the court has any general power or jurisdiction which enables it to go beyond the law, and to order the sale of the land of an estate in a case not provided for by the statute.”

In Withers v. Patterson, 27 Tex., 496, it is stated in the opinion that “it is certainly true that if a court orders a sale of land when the circumstances do not exist which, under the law, authorize it to do so, it acts, in doing so, without jurisdiction, or, in other words, without authority.” . . . Again, page 499: “ It is to be borne in mind that while the county court has the power to order the sale of land belonging to an estate which is committed to it for the purpose of administration, it has no general power to sell the lands of any estate. It can order the sale for the payment of debts and expenses of administration, to raise the amount of the allowance for the surviving wife and children, and in certain cases for the purposes of partition and distribution among heirs. The court has no power conferred upon it under the law to sell the land of an estate for any other purpose.” Speaking of a sale for other purposes, “such a sale being a nullity may be impeached collaterally; and when the want of power in the court to order the sale is shown by the record itself, then the constructive notice which the record furnishes the purchaser makes the nullity effective as to him and destroys his claim of title.” Again, page 501: “ Whenever there is a want of power in the court its act is a nullity, no more and no less in one case than in every other, and without regard to the particular facts or circumstances.” ... If the record is silent, and the order “ is one which the court had power, under any circumstances, to make, then it will be presumed' that the circumstances existed which authorized the court to make the order or judgment in question; but presumptions will not be indulged in which are repelled by the record itself.”

In this case the record is not silent as to the cause upon which the court acted in ordering the sale. Presumptions' of regularity are of no aid to the decree. They “ are indulged in the absence of proof and not against proof.” Id., and cited with approval by Chief Justice Boberts in the leading case of Guilford v. Love, 49 Tex., 741.

Jurisdiction over the person on notice will be conclusively presumed where the record is silent. 49 Tex., 741; 27 Tex., 253. Hot so as to authority over the subject-matter. Horan v. Wahrenberger, 9 Tex., 319, and authorities; Freeman on Judgments, §§ 116, 117, 119a. This is a case of absence of authority, not of defective or irregular exercise of it. As the power did not exist to order the sale no title passed to Pridgeon, and of course none was divested out of the estate.

We therefore hold that the court had no authority to order the sale, and that the want of authority was patent upon the record. This result is given as the application of the statutes of 1848, the recognized powers of the probate courts, and the rules to be applied when their action is drawn into litigation. They are given in the leading cases of Guilford v. Love, 49 Tex., 715, and Withers v. Patterson, 27 Tex., 491, from which we have so largely extracted, in connection with the more general rules recognized in Horan v. Wahrenberger, 9 Tex., 319. See, also, Fisk v. Norvell, 9 Tex., 13; Duncan v. Veal, 49 Tex., 611; Northcutt v. Johns, 49 Tex. 456; Rorer on Judicial Sales, sec. 474; Freeman on Judgments, secs. 116 and 117, and cases cited. It follows, therefore, that there was no legal obstacle to Lockhart foreclosing his vendor’s-lien claim upon the land; and that such foreclosure sale passed title to him.

2. Without discussing the legality or necessity of the Jeffries administration, or the necessity for a second sale in favor of Lockhart so that he could have a title satisfactory to himself, we hold that the order of sale, the sale, and irregular return of sale made by the attorney of the administrator, and the order confirming it entered by the court March 5, 1870, sufficiently vested title to the land in Lock-hart to put into operation the statutes of limitation in favor of the actual adverse occupancy and claim of the defendants.

The deed from Griffith to Fridgeon of date April 2,1867, through which defendants claim, was duly recorded April 9, 1867. If a complete deed on its face it is not before us (not being set out in the record); it would be sufficient, in connection with its other requisites, to support the five years5 statute of limitations. We do not think it such as to form a link in title or color of title under the three years5 statute.

3. The defendants were not direct purchasers from Fridgeon, though claiming through his title. It seems from the testimony that they bought from parties having actual possession of the land. The improvements in one instance at least were made by the defendants, who had been in possession for more than twelve months before the suit was filed.

The statute allowing improvements to be suggested gives (Sartain v. Hamilton, 12 Tex., 222) their value to the actual possessor in good faith. The good faith is more a fact than a conclusion drawn from the comparative validity of the superior title set up against him with relation to that under which he entered. Good faith only requires that a man keep his eyes open and deal fairly with what he could readily discover. Possession under a title apparently good, with an honest" belief of its validity, is sufficient. A void link in the chain of. title will not affect the right to improvements, unless, perhaps, the party making them was party to such void deed, or is chargeable with bad faith. Berry v. Donley, 26 Tex., 747; Hill v. Spear, 48 Tex., 585; Farris v. Gilbert, 50 Tex., 350.

For the reasons that the court refused to submit to the jury the plea of five years’ limitations, and excluded testimony of the value of improvements under the suggestion of good faith, the judgment should be reversed.


source: Caselaw Access Project

license: Public Domain

text:
    John A. Morris v. J. M. Hall et al.
    (February 7, 1880.)
    Contract to locate land.— The locator acquires no interest in the land simply by having located the certificates and having surveyed it; nor can the custom of the country to give what is called a locative interest in the land to the person who locates it, as compensation for his services, create or furnish the terms of a contract to bind the owner of the certificate.
    Appeal from McLennan county. Opinion by Quinan, J.
    Statement.— This case is presented to us upon an agreed statement of the facts, and the propositions of law involved. The questions to be determined are, whether the facts agreed authorized the verdict of the jury, and whether the court erred in its charge. Upon a careful examination of the evidence we are constrained to say that it does not support the verdict of the jury.
    The charge of the court (which is not excepted to) presented to them the inquiry “ whether Jennings, as agent for Hall & Parks, or with authority from either of them to locate the certificates, agreed to give James a reasonable compensation in the land; whether he did so, and whether the defendants accepted the work and do not complain of the quality or value of the locations, and directed them, if they so found, to find for the intervenors so much of the land as the proof shows is the usual and customary fee paid at the time for the service.”
   Opinion.— We do not think there is sufficient proof that Hall & Parks authorized Jennings to make compensation for the location of the land certificates'in a part of the land to be located, or that Jennings agreed with James so to do.

In Ross v. Mitchell, 28 Tex., 153, Moore, C. J., says: “ The only promise which the law implies from the performance of work and labor for another is for the payment in money of the reasonable value of the services rendered. . . . There is no proof in the record that Taylor contracted with any one to give a part of the land for its location. It is .true the witness says that Taylor gave him the certificate to locate, and incidentally, in another connection, he says his interest in the certificate was one-third, but nowhere does be say that Taylor contracted to give him an interest in the certificate or the lands located by it. We cannot infer that he was entitled to a third of the land merely from the fact that it was placed in his hands by the party entitled'to it, and his mere statement that his interest was one-third, without anything to show how, when or from whom he derived his interest. The court cannot, on such slight foundations, build titles of this kind.” „

So in Sypert v. McCowen, 28 Tex., 634, Smith, J., says: “The locator could acquire no interest in the land simply by having located the certificate and having it surveyed. The .custom of the country to give what is called a locative interest in the land tó the person who locates it, as compensation for his services, cannot create or furnish the terms of a contract to bind the owner of the certificate.” In this case there was no proof of any custom or contract or claim because of the custom.

The observations of the judge in those' cases are directly applicable to the facts agreed in the present case. Hall placed the certificate in Jennings’ hands to have them located; Jennings employed James to have them located, and James performed his engagement faithfully. The executor of James claims that James had an interest in the lands for their location, and states his belief that the locati ve interest was one-half. He says: “ This belief I don’t state as a fact, and it must only have weight as facts go to sustain it.” He then goes on to state upon what circumstances he bases his belief. These are:

1. A memorandum made by his co-executor that James’ interest was one-half. 2. That James’ books contained no money charge for locating the lands; and if such had been ■ the understanding the charge would have been made. 3. That in James’ handwriting (the body of it) is found an order signed by De Cordova, on Parks and Hall and Jennings, to convey to him his (Cordova’s) locative interest in the lands, and a transfer from Cordova to James of his locative interest of one-third. 4. That James paid taxes on the lands for many years to a large amount, and finally that Jennings was a man of speculative turn, habitually in need of money.

Beyond this we find nothing in the evidence which would go to prove a specific contract with James for his compensation in land, and that it is obvious that to hold this proof sufficient to sustain the verdict we must ride rough-shod over the decisions we have quoted. Although our conclusion upon this point necessarily disposes of the case and requires its reversal, we think it proper to notice the objection to the charges of the court, and the rejection of Benick’s testimony.

The first charge asked by defendant, as asked, might well have been refused. The first portion of the charge had already been given in the judge’s general charge, and the concluding portion, “ such a contract cannot be inferred,” was erroneous. It could only mislead the jury. It conveyed the idea that a contract to locat land certificates for a part of the land must be establish. 1 by proof of the actual making of it, and that they were iot at liberty to find the existence of such a contract fi )m any circumstances whatever in proof, no matter how irresistible the inference might be.

But the modification of the charge by the judge was equally objectionable, for it left the jury at liberty to find for James’ heirs a compensation in land for his services, whether the agreement for land or not was proven.

"We do not consider the second objection to the charge or the second proposition thereon as sound, because it is admitted that Jennings had authority from Hall to act as agent in having the certificates located, and, although Jennings may not have disclosed his agency to James in making the contract, yet, if Hall or the parties claiming with him accepted the benefit of the location by James, knowing James’ claim, they would be bound by it. Story on Agency, 253; Neil v. Breckenridge, 26 Tex., 105; Reese v. Medlock, 27 Tex., 124. The objection to the admission of the testimony of Renick was not well taken. It is true that testimony as to what was the usual fee paid in land for the location of land certificates may not be admissible to prove a contract to pay in land, but the objection is not on that ground, but that the intervener must first be required to prove the contract before proof can be heard of the value of the services rendered under it. This would be to take from the jury altogether the consideration of the question whether there was a contract. The objection might possibly be good if no proof whatever had been offered to establish the contract, but this cannot be said in this case.

It is proper, also, as the case will be remanded for another trial, that we should indicate our views of the law as applicable to the case presented in the pleadings and the statement presented here, and which is involved in the controversy. There seems to be no dispute as to the facts of Hall’s employment of Jennings to have the lands located, and that, under authority from Jennings, James did locate the lands faithfully and well. We think that, under his employment, Jennings had full authority to use all the necessary and usual means of executing it with effect, and to employ all the means justified by the usages of the particular trade or business of land-locators in this country; that his authority need not, necessarily, be proved by an express authorization, but may be proved by the habit and course of that business. Ewell’s Evans on Agency, 143, 194. '

It is true, as is said in the cases we have cited, an agreement to pay in land for locating it cannot be inferred from the mere fact of its location, nor from the mere statement of the locator that he had an interest in the land; but w'e do not doubt that if it were shown by competent proof that at .the period when these land certificates were located it was the general, usual, common and well-nigh universal custom of the country, and of those engaged in location of lands, to locate them on shares, as it is called, or for a locative interest, that the payment of money as compensation for such services was out of the usual course of dealing, a jury might well infer, taking into consideration the bankruptcy of Hall & Parks, the impecuniosity of Jennings, and the other circumstances attending this transaction as developed in the statement of the facts, that it was not contemplated by the parties that compensation should be made in money, and that there was authority in Jennings to contract with James for compensation in land, and that such a contract was in fact made.

The fact that James had expended his money in the payment of the taxes and the preservation of the property; that he had never been reimbursed for his large outlay; that Hall & Parks had suffered so long a period to elapse after the employment of Jennings to have the lands located, never, in the meantime, making any inquiries about them, or efforts to pay the money for the locating of them, if they did not contemplate payment in land, and finally the manifest inequity, abhorrent to our sense of justice, that they should seek to reap the benefit of James’ faithful discharge of his employment and enjoy the fruits of his labor and outlay without compensation and at the expense of his heirs, are proper subjects for the consideration of the jury, and circumstances tending to prove a contract to compensate in lands, or the acquiescence and virtual ratification of the claim for it. It is not necessary that the contract should be proved with that degree of moral certainty which is technically termed beyond a reasonable doubt. It is sufficient if from all the evidence it can be determined with reasonable certainty. Pomeroy on Spec. Perf., 194. In this case Morris has not perfected an appeal. We decide that the judgment in favor of James’ heirs" be reversed and the case remanded.


text:
    John Kennedy v. B. R. Davis & Bro.
    (March 16, 1880.)
    Mortgage.—Effect of change of evidence of the secured, debt. Charge of court unsupported by evidence.
    Appeal from Harris county. Opinion by Quinan. J.
    Statement.— In February, 1874, Kennedy leased to Williams the Washington Hotel in Houston at a rent of §200 per month, payable at the end of every month, reserving <s a special lien in the nature of a mortgage for the rent, upon all the furniture of every description that may be put into the house.” This lease was recorded February 25, 1874.
    On March 10, 1874, Williams purchased of B. B. Davis & Bro. a quantity of furniture, with the understanding that he should give security for the goods upon delivery. Williams proposing to give as security S. W. Allen, three notes for the amount of Williams’ purchase were written out and signed by Williams, payable to the order of S, W. Allen at four, eight and twelve months, dated 15th of March, but the proof shows really executed on the 10th of March, and at the same time Williams executed a mortgage to Allen to secure the payment of the notes upon the same goods purchased of Davis & Bro., and this mortgage was recorded in Harris county March 12, 1874,

      After the execution of the notes, which contemplated the indorsement of them by Allen, by mutual consent of Williams, Allen and Davis & Bro., the name of R. B. Davis & Bro., as payees, was inserted instead of S. W. Allen, and Allen signed the notes as an original promisor, writing his name above that of Williams. The notes were delivered to B. R. Davis & Bro., and the goods to Williams. On the 13th of March, 1874, the goods reached Houston, and were placed by Williams in the Kennedy House. When the first note fell due, Williams, being unable to pay it, got an extension of time, taking up the note, and executing in lieu of it another note dated July 1, 1874, adding interest, making $979.35.
    In ¡November, 1874, Kennedy filed his suit in the district court of Harris county against Williams for his rent due under the lease, set up his lien upon the furniture in the Kennedy House, sued out a writ of sequestration, and thereon the sheriff seized the same goods sold by Dávis & Bro. to Williams, and mortgaged by Williams to Allen to secure the payment of the notes given for the goods.
    Davis & Bro. then sued out an injunction against Osbe, the sheriff, and Kennedy, setting up their claim on the goods, alleging the seizure of the goods by the sheriff by direction of Kennedy; that Williams would not replevy them, and that Kennedy would, and if he did their security would be lessened, etc.; that they feared Kennedy would dispose of the goods, and they prayed that Kennedy be restrained from interfering with the property, and Osbe from deliveing it to him, etc., and that they have judgment establishing the prior lien.
    Kennedy answered to this writ of injunction, claiming a prior lien on the goods sequestered, and denying that Davis & Bro. had any lien thereon; that he caused them to be sequestered and has a right to them; that he is amply solvent to said plaintiffs in ten times the value of the goods, should the plaintiff have any cause of complaint. He prays that the injunction be dissolved.

      On the hearing the judge dissolved the injunction, and then Davis & Bro. amended their petition, making Allen and Williams parties, alleging the facts with regard to the making of the notes and mortgage, asking judgment against them oh the notes, and a decree for the foreclosure of their mortgage on the goods and an order of sale. They averred that Kennedy, since the institution of the suit, had taken possession of the goods and sold them to the lessee of the Kennedy House, or leased them to him; that they have been constantly in use, are greatly deteriorated in value, would bring little or nothing at a public sale, and pray judgment against him for the value of them, or, if he be permitted- to return them, they ask a judgment for the difference in their value at the present time and when sequestered.
    The cause was submitted to a jury, who found a verdict for the plaintiffs against Williams and Allen on the notes, and against Kennedy for the value of the.goods sequestered, $2,767.10. Judgment was rendered in accordance with the verdict. The defendant, Kennedy, moved for a new trial, which being overruled, he has appealed.
   Opinion.—The assignments of error are numerous, but it is not necessary to notice them further than the appellant has relied upon them in his brief. The first error assigned is: That the court erred in admitting in evidence the notes payable to B. R. Davis & Bro., because they were not the notes described in the mortgage from Williams to Allen; they are by different makers and to different payees.

In answer to this objection, we say that the law is well settled otherwise. The notes were the notes declared on in the petition.

A mortgage secures a debt and not the note or bond or other evidence of it. Ho change in the form of the evidence or the mode or time of payment, nothing short of actual payment of the debt or an express release, will operate to discharge the mortgage. The mortgage remains a lien until the debt it was given to secure is satisfied, and is not affected by a change of the note, or by giving a different instrument as evidence of the debt. Perkins v. Stone, 23 Tex., 562; Wright v. Wooters, 46 Tex., 380; Jones on Mortgages, § 924.

It was perfectly competent, then, for plaintiff to prove that the notes Offered in evidence were given for the same debt which the Mortgage was made to secure. His suit was founded upon them, and we think the proof in the case established conclusively that they evidenced the debt which the mortgage was given to secure.

The appellant insists that the lien of Kennedy is superior to that of Davis & Bro. We do not think this proposition tenable. The mortgage on the goods purchased by Williams from Davis & Bro. described them piece by piece; it ivas executed in Galveston on the 10th of March, 1874; it was recorded in Harris county on the 12th of March, 1874. It bound the goods in Galveston before they were shipped; it bound them in Houston after their arrival there, before and after they were placed in the Kennedy House, and if they had never been placed in the Kennedy House; and we have been cited to no authority and certainly have been furnished with no good reason to support the proposition that the act of Williams in placing them in the Kennedy House should have the effect of discharging the lien upon them for the payment of the Davis & Bro. notes, given for the purchase of them, and rendering them at once subject primarily to Kennedy’s lien, under his contract with Williams.

The mortgagee’s security cannot be affected by any dealings of the mortgagor with other persons. Jones on Mortgages, sec. 925, and cases cited.

We are of opinion that Davis & Bro. established a valid mortgage lien upon the goods superior to every claim of Kennedy thereto.

The fourth, fifth, sixth and seventh assignments of error relate to the charge given to the jury. The charge given is: “If you find from the evidence that Kennedy has appropriated said goods upon his mortgage from Williams, find for plaintiff against Kennedy,” and it is objected that there was no evidence to warrant such a charge.

The only testimony in respect to an appropriation of the goods by Kennedy in the statement of facts is this isolated sentence in the testimony of Hr. Davis: The paper shown me is the list of the furniture sold to Williams, and the same embraced in the mortgage from Williams to Allen, and the same seized by defendant in his suit against Williams.”

This refers, of course, to the sequestration of the goods by Kennedy, mentioned in the pleadings. There is nothing in the record to show whether the goods were ever replevied by Williams or by Kennedy, or were ever in the possession of Kennedy. There is nothing in the pleadings or the proof to show but that the goods were, at the time of the trial, in the hands of the sheriff, and still are in as sound condition and as valuable or perhaps more so than when first sequestered. And assuredly the sequestration of them by Kennedy was not an appropriation of them. Davis & Bro. were not the owners of the goods absolutely.

It has been repeatedly decided, says Wheeler, J., in Wright v. Henderson, 12 Tex., 45, “ that a mortgage is but a security, and that the title remains in the mortgagor, subject to be divested by foreclosure of the mortgage. Until the happening of that event the fee, or ultimate proprietorship, remained in the party creating the trust, and consequently was liable to seizure and sale under execution as his property, subject to the lien created by the deed of trust.”

And again in Perkins Stone, 23 Tex., 582, it is said that courts of equity will treat it as a security for the debt, and the mortgagee can never acquire an absolute' title to the thing mortgaged without the aid of the court.

The statute, article 1480, Paschal’s Digest, prescribes the proper judgment to be rendered in suits for the foreclosure of mortgages on personal property, and indicates very clearly that ordinarily the mortgagee cannot claim possession until after the judgment to foreclose. The sheriff is to find the property and sell it.

We think, therefore, the court erred in giving the instruction complained of to‘ the jury, because there was no testimony to warrant it.

The assignments of error that the verdict was against the evidence, and that the court should have granted defendant, Kennedy, a new trial, it will be seen from what we have said in our view of the case, are well taken. The verdict was without evidence to support it, and the judgment upon it erroneous.

Had the plaintiffs proved their allegations that Kennedy had sold or leased the goods to the lessee of the Kennedy House, and that they had been so used and deteriorated in value as virtually to destroy their security, this judgment, we think, could be supported; but as there is no such proof it cannot stand. The plaintiffs, under the pleadings and the proof in the case, were only entitled to a decree for their debt against Williams and Allen and a foreclosure of the lien, and an order for the sale of the property, if it could be found, to satisfy their debt, and execution over, against the debtors. If the goods be found they have the right, upon proof of their value at the institution of their suit, to a judgment against Kennedy for the same, or for the difference in the proceeds of sale of such as may be found, and the total value at the institution of the suit. Having a valid lien upon the goods, they were entitled to have them appropriated, or the value of them, to the satisfaction of their debt at the date of the institution of their suit, and Kennedy would from that date, as he had previously sequestered them, be responsible to them for the use of them or any loss or deterioration in their value. Herman on Chat. Mort., 341.

The judgment as to Kennedy will be reversed and the cause remanded for further proceedings in accordance with this opinion.


text:
    M. Marx v. J. H. Elsworth.
    (March 13, 1880.)
    Illegal contracts.— Dealing in futures; agency, how proven5 ratification; brokerage contracts.
    Appeal from Galveston county. Opinion by Walker, P. J.
    Statement.— It does not appear that the demurrer and special exceptions of the defendant to the plaintiff’s petition were presented to the court for determination, and, therefore, the questions presented in them will not be considered. The plaintiff’s petition set forth, for all the purposes of rules of proceeding applicable to trials of issues between the parties before the jury, a good cause of action, the gist of which was the alleged breach of contract made by the'defendant’s alleged agent. The- contract relied on was alleged to be one for the sale to plaintiff, and the resale for his account, of three hundred thousand pounds of bacon; that in pursuance thereof, he, the plaintiff, complied with his part of said contract, and that the defendant, through his said agent, in December, 1877, reported to plaintiff the resale of all of said bacon at a large profit to him, said plaintiff. Plaintiff alleged that by the terms of said contract the defendant agreed to hold said bacon and sell the same in St. Louis on the 15th day of October, 1877, oías soon thereafter as possible; that by the terms of the contract, after allowing plaintiff the commissions stipulated in his favor, and taking the market price of bacon at St. Louis on said 15th of October as the standard of value and measure of defendant’s liability, in the absence of a specific report of sales, which it is implied by the plaintiff’s allegations he supposes to have been actually made as referred to in the aforesaid report of Villa vassa in December, 1877, in the general terms before quoted, the plaintiff, proceeding to allege failure to pay him the amount thus due him upon, the foregoing basis, alleging demand, refusal, etc., prays judgment for the amount sued for, to wit, $4,566.25; and he also prays judgment for all damages sustained by reason of the premises stated in his petition, and for other, further and general relief.
    The answer was general denial that the contract was a gambling one, without consideration and against public policy, and also denial of the agency of Yillavassa to make such a contract; the answer contained special traverses of divers material allegations of plaintiff’s petition, which need not be set out for the purposes of the reference which is now being made to the issues between the parties.
    Under the assignment of errors, which submits eleven grounds, they all consist in complaints made either to what is contained in the charge of the court, or in the refusal of the court to give instructions asked by the plaintiff, supplementary to or negativing the propositions contained in the charge of the court; whence it follows that if the evidence before the jury was of such a character as rendered the charges given and refused material to the proper determination of the case, that, inasmuch as all the charges which were requested to be given were refused, and that the plaintiff has not been delinquent in failing to ask for the instructions as to the law, as contended for by him, that unless in all those respects, wherein the plaintiff has thus asked instructions, the charge of the court has, under the evidence, sufficiently submitted the law applicable to the issues, such refusal of plaintiff’s instructions would be erroneous, and whether a reversal of the judgment would ensue therefrom would depend on whether it appears from the record that injustice may have resulted therefrom.
   Opinión.— The charge of the court rendered both prominent and obnoxious the subject of gambling contracts as applied to the facts of this case; the charge defines also in what consists a gambling contract, as has been, seen from the reading of the general charge. If such contracts as the court defines to be gambling contracts be in fact illegal under the laws of Texas, still if the general definition contained in the charge should be conceded to be abstractly considered correct, nevertheless, in its application to the testimony in the case, it was urgently at issue whether the plaintiff participated in any other intent than a lawful one, whatever may have been the meaning or intention of Tillavassa, with whom the contract was made. The language of the charge of the court is: “ But where the transaction is of such a nature that the parties do not expect any real delivery of the articles, but simply estimate their profits and loss at the quotation prices at the future stipulated time, as compared with the price at the time of making the contract, the law regards all such contracts as mere gambling in futures, and treats them as null and void, as contrary to public policy.”

The only testimony in the case to establish the contract as it was made was that of the plaintiff himself, which emphatically disclaims the making of any such contract as that which is thus denounced by the charge of the court; nor is there in the nature of the contract, as alleged by the petition, nor as developed by evidence, the elements of a gambling contract according to the definition of such as given in the charge; and the charge given'to the subject would be otherwise inapplicable to the evidence, unless, notwithstanding the testimony given in relation thereto, it is to be left to construction by the jury to'- determine whether, notwithstanding the forms of words and terms, that one or both of the parties to the contract meant that there should be, in fact, neither actual sale nor resale. Whether it was proper, under the evidence, to give a charge at all on such a hypothesis need not, at this time, be discussed, but it is sufficient to say that if it was, nevertheless, in view of the emphatic allegation in pleading and evidence to the contrary by the plaintiff, so far as such illegal intent related to his participation in the making the contract, he was entitled to have the whole law applicable to the supposed illegal contract fully given so as to afford him, distinctly, its benefits in case the jury saw proper to give credit to his statements in respect to the matter. The conditions and qualifications to the general charge which were embraced in the plaintiff’s ninth charge refused were pertinent in the above connection. The general proposition of the charge defining gambling in futures, supposing it to be sufficiently accurate and definite as a definition when applied to the evidence in this case, allows, certainly, of the possibility that, in the first place, it was no such contract, and in the next, if it was so meant and intended by Villavassa, that it may not have been so by the plaintiff. It is true that the general charge does imply, by its terms, a requirement for mutuality of intent in respect to the making of such an illegal contract, and if it was proper to charge on the subject of gambling contracts at all, unless the plaintiff had asked further instructions to supply the want of fullness of exposition of the law applicable to the evidence, he could not complain, but the defect in the general charge, which has been thus pointed out in the instructions asked, was apposite to the essential and material issues and the evidence towards which the general charge was aimed. The instruction asked was to the effect that the fact that the seller does not own the article at the time he sells for future delivery does not make the contract illegal; and that the fact that one party intended to gamble and not to secure or deliver the article does not make it illegal, but to be a gambling contract both parties must agree that there is to be no delivery.

The general charge of the court does not present, unless inferentially, this material point of mutuality of minds of both parties as essential elements of its invalidity as a gambling contract. The propositions contained in the charge asked for and refused are maintained by abundant authority. Clark v. Foss, 7 Biss., 540; Lehman v. Strasberger, 2 Wood (U. S. C. C.), 562; Gilbert v. Gangar, U. S. Ct. Ill., Cent. L. J., vol. 7, p. 41; Walcott v. Heath, 78 Ill., 433; Logan v. Brown, 81 Ill., 415; Hibblewhite v. McMorine, 5 Mees. & Wel., 462; Porter v. Viets, 1 Bissell (U. S. C. C.), 177.

The intent that a transaction should be a mere betting on the market, without any expectation of actual performance, must be mutual and constitute an integral part of the contract in order to render it invalid. The secret intention of one of the parties not to fulfill his contract, uncommunicated to the other, is not enough to make the transaction illegal, nor that it wras contemplated by him thereby to adjust the difference resulting from the fluctuations in the market price in case of a rise or fall, by making good, in money, by way of compensation, a guaranty to save the other party harmless against loss, or in like manner to make good the premium on profit to accrue to the other in case of advance in prices, under such a contract as the one sued on is alleged to have been, the other party not agreeing, at the time of its formation, to such an interpretation of a contract requiring actual sale and resale of the property embraced in its terms. The giving of the ninth charge asked was essential, under the evidence before the jury, to a full statement of the law applicable to the plaintiff's case; the more so because the general charge gave very great prominence to the defense set up of a gambling contract, by the use of trenchant language, denouncing such contracts as standing beyond the pale of the law’s protection, asserting that the usual habit of parties to them was to cloak them with disguises, and invoking the exercise, by the jury, in conjunction with the court, of their mutual powers to unmask all species of coverings used by parties to conceal their subterfuges. In the case of Powell v. Messer, 18 Tex., 405, the court commended the refusal of the district judge to give an instruction asked, which ivas abstractly correct law, where the law of the case had been properly given by the court, Chief Justice Wheeler remarking." “ Where the judge has embodied in his charge rules of law applicable to the case, in such form and connection as to give to each no more than its due relative prominence, to repeat portions of the charge in the form of distinct and independent propositions may, not unfrequently, have the effect to give to the principles thus enunciated an undue prominence and importance in the minds of the jury, and thus to mislead them in the application of the law to the evidence.” The danger thus pointed out may exist as well in the charge given of the court’s own motion as to be found in a supplement to it in the shape of a charge given at the request of one of the parties; and whilst, in this case, no undue importance may have been given to the subject-matter charged upon, yet the prominence given to the effect of the contract, if found to be a gambling one, rendered it essential to a fair trial that the entire law applicable to all the phases under which the evidence was fairly susceptible of being viewed be given. Such was not; done in the general charge; a charge was asked and refused which supplied a proper and necessary qualification which was applicable to evidence in the- case. We are not able to say, from a review of the record of the trial, that the plaintiff was not prejudiced bjr the error committed in refusing the charge, nor are we able to determine that the jury may not have been misled by that part of the judge’s charge which stated that “such gambling contracts, when stri pped of all the devices which parties usually resort to for the purpose of hiding the true nature of the contracts, simply are, that the parties bet that an article at a certain time will be worth so much, and they usually put up a sum to cover a margin.” The sign and badge referred to, “ putting up a sum to cover a margin,” was an ingredient in the contract between these parties, if it comported with gambling contracts. It is not less true that such assurances are the every-day appliances of the trading world in conducting, more or less, all commercial transactions, according to varying circumstances. Having thus emphasized one of the parts of the contract by judicial cognizance, as indicative of, or at all events consistent with, illegality, it becomes now essential still that the full statement of the law should be given on the same subject, as was attempted to be done by plaintiff’s counsel.

The first assignment of errors is to the effect “ that the court erred in charging the jury that the circular advertisement of defendant, announcing a new line of business, nd the employment of J. E. Villavassa as agent and manager, did not authorize said agent to make the contract .sued on, in that plaintiff had introduced seven wholesale grocers of G-alveston to prove the agency of "Villavassa by showing that the business of Elsworth & Co., as brokers and commission merchants in western produce and bacon, was all done by and through said agent. Plaintiff then rested, and the defendant testified in his own behalf that the agency was special. On cross-examination the advertisement was shown to him, and put in evidence as explanatory and in rebuttal.'’’

The second and third assignments of error "were as follows, relating to the same subject, and all of them may be considered together; they are substantially as follows:

Second proposition. The court erred in charging that the written circular advertisement would not authorize Villavassa to make the contract sued on, in that the legal import of said circular is that it is only an advertisement of Elsworth & Co. of their having opened a new branch of business, and the management of Villavassa as manager thereof is not by way of a power of attorney to him, nor intended to be the evidence of his authority, but a statement to induce business by showing the competency of the manager. The charge of the court, on this circular, laid such stress on this circular that it was calculated to mislead the jury into thinking that the question whether Villavassa was defendant’s authorized agent for the making of the contract sued on turned on the legal import of authority under said circular.

Third proposition. The court erred in charging the jury that the written circular advertisement would not authorize Villavassa to bind the defendant by the contract sued on, in that this charge negatives the idea that the jury could look to this circular in connection with, and as part of, the other evidence of Villavassa’s agency or authority to make the contract.

Fourth proposition. The court erred in charging the jury that the circular advertisement did not authorize the agent, Villavassa, to bind the defendant by the contract sued on, in this: The contract is alleged in petition to have been made by Elsworth through said agent as broker. The advertisement does not even state that Elsworth does a brokerage business, and has no further connection with the case than to show that Villavassa had full charge of certain lines of business to which the brokerage business of defendant is germain.

And in the same connection may be considered the tenth assignment of error, as follows:

Tenth proposition. The court erred in refusing to give the charge asked by plaintiff to the effect that if Elsworth authorized Villavassa to do business in such a way as to authorize the making of the contract sued on, or, if Elsworth justified Marx in believing that Villavassa was authorized to make such a contract, then, if the jury find that the contract was made by Villavassa as agent of Elsworth, it binds Elsworth.

Because the general charge does not instruct the jury as . to responsibility, as between principal- and third party, that springs from the principal so acting as to justify the third party in believing that the agent had requisite authority.

The most usual mode of appointment of agents is by an unwritten request, or bjr implication from the recognition of the principal, or from his acquiescence in the acts of the agent. Agencies of this class, as remarked by Judge Story (Story on Agency, § 55), “ are very familiar in all the common business of life and the common departments of trade. . . . And the nature and extent of the authority of the 6 servant or agent are often wholly deduced from the nature and extent of his usual employment. „ . . And it is a general rule that where one of two innocent persons must suffer by the misconduct of a third person, that party shall suffer who, by his own acts and conduct, has enabled such third person, by giving him credit, to practice a fraud or imposition upon the other party.”

The elementary rule, however, on this subject is, of course, not questioned by the district judge, nor by counsel, that the p.mcipal should be held bound by the acts of the agent within the scope of his general authority; whatever questions arise grow out of the application of the maxims of law to facts. To ascertain not merely the actual authority conferred by express delegation of trust by the defendant, but to determine how far third persons might fairly imply the existence of authority deducible nnot only from the nature of the business or agencj7 in which Villavassa was employed, but from transactions and dealings had with the business world by Villavassa in behalf of defendant, acquiesced in or approved by the latter, whereby he was thus held out to the public as competent to do such acts, were all proper subjects to submit by evidence to the jury. And it was only proper to have allowed the jury, under instructions, to determine, from all the evidence before them, as to what was the extent of Villavassa’s authority to bind the defendant, either from the nature of his employment of from the acts and dealings of defendant through his agent, Villavassa, with the business or commercial world. The circular letter constituted one of such facts; and the evidence respecting dealings and transactions with others, acquiesced in, and the current business affairs of the defendant in certain lines of business, constituted other facts; and it was from all of these that the jury should have been allowed to draw the inference concerning the competency of Villavassa to bind the defendant by such a contract. It was not an incorrect proposition, as stated in the charge, “ that the written circular in evidence would not authorize Yillavassa to make such a contract.” And if the succeeding sentence did not, by implication, exclude from the jury the right to look to it, together with the other evidence, and had affirmatively authorized them to consider it in connection with the other evidence in determining the authority of Yillavassa, then the charge could not have been successfully complained of; but they are instructed that the circular is insufficient, and that the authority, to bind Elsworth must be determined by other evidence in the cause, without any indication that the circular was pertinent to the subject or might be weighed in connection with the other facts in evidence. The error committed in thus failing to give plaintiff the benefit of the evidence referred to, it cannot be supposed influenced, prejudicially the result of the trial, as the facts contained in the circular letter wore otherwise sufficiently before the jury.

The subject of the charge asked and refused, set out in the tenth assignment of errors, ought to have been submitted in some shape by the judge in view of all the evidence in the case, as the plaintiff asked an instruction on the subject. We are not prepared to approve of the charge in the shape in which it is presented. The court, we think, properly declined to give it. A<- ¿ame time, the subject being called to the attention 01 tne court, it should have been given with appropriate changes adapted to the statement of the legal propositions involved in the suggestions contained in the charge. The charge asked was too indefinite and too hypothetical as applied to the evidence.

The fifth, sixth and seventh assignments of error may be considered together. They are as follows:

Fifth proposition. There was no evidence to justify the charge on gambling contracts, and the prominence and length of such charge was calculated to mislead and confuse the jury, in that the lengthy exceptions and answer of defendant as to its being a gambling contract, and the argument of defendant’s counsel, made it the duty of the court to be specially careful to charge so as to rather free the jurors’ minds from the necessity of considering this as the main question on the evidence.

Sixth proposition. The court erred in charging the jury as to gambling contracts, in that there was no evidence showing that the plaintiff, Marx, did not intend to buy actual bacon, or even that he had any reason to think that Elsworfch & Co., acting as brokers, did not intend to deliver the bacon constructively to plaintiff by holding the same for'resale on the day they contracted for delivery.

There was no evidence to show that any one ever gambled in bacon, by any such contract as is set out in the charge as constituting a gambling contract. There was no evidence that bacon is one of the articles of commerce, the market fluctuations of which are or can be the basis of gambling contracts. There is no witness that either plaintiff or defendant ever made a gambling contract as to any article.

Seventh proposition. The charge of the court was, as a whole, calculated to mislead the jury, in that, as a whole, the prominence given to gambling contracts and the effect of the circular advertisement was calculated to mislead the jury, and invades the province of the jury just as much as if there had been a direct charge for the defendant on the weight of the evidence, and especially so when the charge is put in the form of abstract propositions.

We have already sufficiently indicated our views on the seventh proposition. The defense of gambling contracts was in issue, and if the charge of the court had been sufficiently explicit in respect to matters hereinbefore adverted to, or had given the instructions asked, notwithstanding the prominence given to the subject of defense and the animadversions against that class of contracts, this court would not necessarily reverse the judgment, even though we might consider the charge subject to criticism, unless there was reason to conclude that the jury were unduly influenced thereby and the plaintiff injured thereby.

In respect to the fifth and sixth propositions, although there was both direct and also circumstantial evidence to establish the contract as alleged, still, in view of the nature of the transaction, it was competent for the defendant to submit the credibility of the statements of the plaintiff to the jury, and to require them to weigh all the evidence, at all events, for the purpose of denying that the contract was, in fact, made between plaintiff and Villavassa, by showing, if he could, that it was a contract in futures, and not for sale and resale of actual bacon. There was no incontestible evidence of an actual sale and delivery, or actual resale and delivery of the ba.con. The report thereof made by Villavassa, according to the plaintiff’s testimony, constitutes the principal and, perhaps, exclusive evidence on that subject. There is also the testimony of McRae, defendant’s book-keeper, and also that of the plaintiff himself, on cross-examination, and the defendant’s testimony, as to the silence of plaintiff concerning the transaction after Villavassa’s departure; and the evidence of the correspondence by telegraph and by letter with Borman & Gainie presented a state of case which rendered it not improper for the court to submit a charge on the subject-matter of the defense set up by the defendant.

Eighth proposition. The court erred in refusing the charge asked by plaintiff, to the effect that subsequent ratification is equivalent to previous authority, and that if the principal retains money paid to agent by third party after he is advised of the terms of the contract on which it was paid, this would constitute ratification, even though the agent, when he paid the money to his principal, falsety represented that he had received it on another and different contract.

The evidence being that defendant’s agent received $1,500 from plaintiff, Marx, on the contract sued on, and about the same time paid $1,000 to defendant without informing defendant of the real contract, but stating that the $1,000 was paid by the plaintiff on another and different contract, which, in point of fact, is conclusively shown never to have been made, or if the broker had reasonable grounds for believing that the money previously received was paid on the contract sued on, then retention of it is ratification.

We do not think that the court erred in refusing to give this charge. The evidence did not warrant the assumption that the defendant was advised of the terms of the contract on which it was paid, the assignment itself admits, in the proposition that the defendant was otherwise advised in respect to the money and the account on which it was received. Such evidence would be too remote to base on it the existence of the fact of such knowdedge as would, in its effect, operate as an estoppel in £>ais. The evidence of ratification, to bind a party, should be as clear as that required for an original authority. ... It may be stated, as a general rule, says Judge Parsons, “that no act operates a ratification, unless, with a full knowledge of the circumstances, it was intended so to operate, or unless it was such an act as justifies third parties, who are interested in the question, in believing it was a ratification. And the ignorance of the principal, although it arose from his own negligence, will invalidate the ratification.”

The last remaining proposition under the assignment of errors is the eleventh, as follows:

Eleventh proposition. The court erred in refusing the charge asked for plaintiff, to the effect that if Elsw.orth authorized the making of the contract, and it was made by him as a broker, there can be no question or defense in this suit on the ground that plaintiff did not expect the actual article to be delivered.

It is not clear to our minds that the evidence in the case warranted the application of the principle which it invoked by the instruction asked and refused. As the judgment will be reversed and the cause remanded for further proceedings, and in view of the fact that the principle of law involved is well settled, and the only differences which might occur in legal minds would arise from the construetion of the facts, we deem it proper to indicate no absolute rule to govern the trial in the court below, but will content ourselves with intimating the opinion to which we are inclined, to the effect that the transaction, as relied on by the plaintiff, was not a contract with Villavassa as broker, nor as representing any other person as broker. The elementary principles of law applicable to the subject of brokers and brokerage contracts seem to .contemplate the engagement of a mere negotiator for effecting sales between parties, or as middle men for effecting contracts of Various kinds. Without pursuing further the characterizing elements of such contracts and functions, it is sufficient to say that the inclination of our minds respecting the transaction under consideration is to hold it to be not a brokerage contract. It is not important that wre should affirmatively define its special character further. A contract made by a broker, or by a factor who is also a broker, may, of course, be valid, and yet be distinct from, and disconnected with, the peculiar duties or relations pertaining to either vocation, and independent of the current business of such person. It may be a speculation entered into for mutual profit with a person or persons, and the transaction may still not have any essential relation to the factorage or brokerage business.

There is no assignment of error requiring us to remark upon the merits of the defense set up against contracts commonly designated as dealings in “futures;” the defense characterizes and assumes that such contracts under our laws are gambling contracts and void as against public policy. In passing upon the questions presented to us in the assignment of errors, we do not mean to be understood as expressing any opinion as to the alleged illegality of the class of contracts referred to.

We are of the opinion that the judgment of the district court ought to be reversed and shall award accordingly.


text:
    J. L. Darragh v. Julius Kaufman et al.
    (March 16, 1880.)
    Statement of facts.— When there is no statement of facts in the record every presumption is to be indulged in favor of the verdict and judgment of the court below, and it is incumbent upon the party seeking to reverse it to evince that it is erroneous. When the court errs in its rulings in sustaining exceptions to pleadings, but gives the party the benefit of evidence as fully as his cause of action or defense requires, the judgment will not be reversed for such abstract error.
    Estoppel.— But one suit can be maintained upon the same cause of action, and the judgment therein merges forever all demands passed upon. The judgment is conclusive of such matters in actual controversy as an essential element in the determination of the case.
    Judgment.— An estoppel extends beyond what appears upon the face of the judgment, to every allegation which, having been made on one side and denied on the other, was at issue and determined in the course of the proceedings.
    Appeal from Galveston county. Opinion by Walker, P. J.
   There being in the record neither a statement of facts nor any bill of exceptions, the judgment of the district court will not be revised, unless the presumption in favor of its validity is sufficiently repelled in the record itself to dispense with those ordinarily essential means to indicate error. “ Every presumption is to be indulged in favor of the verdict and judgment of the court below, and it is incumbent upon the party seeking to reverse a judgment to evince that it is erroneous.” Campbell v. Skidmore, 1 Tex., 476. And unless the party complaining presents the case in such a manner as to show the error, the presumption in favor of the judgment must prevail. Chandler v. The State, 2 Tex., 306.

We have no evidence before us whereby we may ascertain the basis of the conclusions formed by the judge who tried .the case; it may be that the evidence before the court well warranted the judgment. The evidence on the trial may have satisfactorily established the truth of the defense of res judicata. It may have been thus made to appear through evidence introduced by the plaintiff himself, or it may have been so established by the defendants; or, notwithstanding the record in the judgment, to which reference will hereafter be made,' that the plaintiff was not entitled to recover, for reasons other than that contained in the recital, as, for instance, by reason of a failure to sustain with sufficient evidence the allegations of his petition. Where a party has had the benefit of evidence as fully as his cause of action or defense requires, because the same has been introduced and allowed in full, after erroneous rulings of the court in sustaining exceptions to his pleadings, to which such evidence referred, if there was no evidence otherwise, the abstract erroneous ruling, sustaining the exceptions to such pleading, would not require " a revision thereof. McClenny v. Floyd, 1 Tex., 159. See, also, Jones v. Cavazos, 29 Tex., 428; Blackwell v. Patton, 23 Tex., 674. The application of the principle stated to a converse state of case may as readily be supposed, and with similar results, as where evidence has been admitted on the trial, under pleadings not excepted to, and which were held to be sufficient ;• in such case a mere abstract error made by the judge in admitting relevant testimony under the issues or error in the charge, not injuriously affecting the complaining party, would not require a reversal of the judgment.

The rules applicable to those cases where the record presents a statement of facts become still more effective in support of the judgment where there is no statement of facts. The supreme court, in Blackwell v. Patton, supra, said: “We will not consume time in the consideration of questions which the parties have not taken the pains to show us to be material.” A class of cases, falling within a narrow range, however, exist where, indeed, a statement of facts is unessential, to require revision, as is illustrated in Galbreath v. Templeton, 20 Tex., 46, where the court revised the rulings of the court below in the rejection, of evidence on a bill of exceptions, although there was no statement of facts, the evidence going to the whole defense. The application, of the general rule which has been stated to this case has received the fullest consideration, and is made the more carefully because the appellant, perhaps, in declining to furnish the statement of facts, relied upon the recital of the judgment, and from it concluded that, under a,ny supposable evidence which may have been before the court, the judgment which was rendered was necessarily erroneous and subject to revision without a statement of facts. The entry of the judgment, after stating the ruling made upon the plaintiff’s exceptions to defendants’ plea,, and the hearing upon the law and the proofs, proceeded thus: “ And it appearing to the court that the subject-matter in controversy in this cause has been heretofore litigated in this court, it is, therefore, considered, ordered and decreed that the plaintiff, John L, Barragh, take nothing,” etc. It is to be deduced from the opinion in Chapman v. Sneed, 17 Tex., 431, that such recitals are unnecessary and only to be taken as evidence that the facts recited were in proof, but do not exclude the supposition that there were other facts proved which aided in constituting the basis of the judgment, and that in such state of case the judgment is entitled to all the presumptions in its favor which are indulged in, in ordinary cases where there is no statement of facts. In the case referred to, Chief Justice Wheeler said, “and it would be unsafe and unprecedented to revise the judgment and adjudicate the cause upon the facts when they are not before us otherwise than in an incomplete and partial state.”

And although we conclude that we may not be warranted in revising the judgment below, in view of the opinion we entertain of the merits of the question, and as from it the result to the parties would be the same, we deem it not improper to give expression to it, which is, that the court did not err in sustaining, as sufficient, the plea of the defendants of former judgment. The cause of action, however varied by the allegations in the petitions of the two respective suits, in respect to allegations of facts, set out in either, to establish or affirm one. of the main ingredients of liability, viz., that the defendants actually received, of gross earnings of the road, sufficient to pay the debt sued on according to the terms of the certificate, or howsoever varied by allegations of transactions by defendants, in detail, tending to show that they not only realized such sums, but that by such contrivances they diverted and concealed, or sought so to do, the same from the reach or knowledge of creditors, nevertheless in both suits the issue was substantially, if not identically, the same. The defendants in each suit were sued in the same right or relation y they were sought to be held liable in each on their personal liability, and that liability attempted to be established upon the same contracts and writings. The second suit, the present one, sets up no act or fact occurring since the making of the original contract, nor since the pendency of the former suit, from which a right originated not in litigation, or which could not have been litigated in the former suit. The litigation in both was upon the same cause of action, between the same parties, sued in the same relative right, and was not varied, in so far as the issues were concerned, otherwise than as by the allegations made in the petition in this suit, whereby the plaintiff alleges the allowance, in 1867, by the circuit court of the United States, of §400,000, alleged to have been received and appropriated by defendants, and were thereby liable to pay the said indebtedness sued on; and by the allegations in the amended petition of March 30, 1876, alleging divers matters whereby the defendants diverted the substance, profits and earnings of the GL, H. & H. R. R. Co. from the payment of plaintiff’s debt. In the former suit the defendants, among other things, set up the proceedings in the United States circuit court, wherein the plaintiff alleges in this suit said $400,000 allowance was made, averring that under them a decree and sale were made, extinguishing the corporation under which the defendants had been operating said railroad. The plaintiff’s first suit evidently included the issue as to whether the defendants had, up to the time of the alleged demand and refusal to pay, received an amount sufficient to make the defendants personally liable, inclusive of the period of time embraced by the proceedings in the circuit court. The defendants’ answer relating to that subject distinctly involved the determination of defendants’ liability arising from such proceedings; for their answer asserted their non-liability arising from -the destruction of their corporate existence, and, as has been seen above, the petition in the present suit renews the issue which was formerly presented in regard to their right to control or direct the §400,000 which plaintiff alleges was allowed to them under directions of the court.

The allegations made in the amended petition do not serve any further purpose than to indicate the evidence which may tend to support the material allegation which is common to both suits, viz., the acquisition, absorption' and diversion, in the modes and by the devices therein defined, of profits and earnings of the railroad company, wkereby the defendants became liable personally to pay the plaintiff.

The alleged trust alleged thus to have arisen was not a new and distinct one from that expressly assumed in the original transactions between the parties; it was but the evidence of the breach or disregard of it. The causes of action and the issuable matters of both suits were the same in legal effect.

The plaintiff in his second suit does not allege a fraudulent concealment by defendants of the new or additional facts contained in his petition, or ignorance of their existence at the former trial, if in law they would have been sufficient to constitute an essential and material variation in his right to a recovery; but this suit seeks to maintain itself on the broad proposition that the subject-matter of litigation presented by it has not been before adjudicated. But the cause of action being but a single one, it falls under the general and well-settled rule that but one suit can be maintained upon it, and that one judgment merges forever all demands passed upon. Bigelow on Estoppel, 113.

The judgment is conclusive of such matters in actual controversy as are essential elements in the determination of the case; and a necessary matter of defense not specifically put in issue is conclusively determined against the defendant by a judgment for the plaintiff; a proposition which is based upon the ground that the defendant, having had an opportunity to make defense, voluntarily failed and neglected to do so. Bigelow on Estoppel, 106. The rule is not less applicable to the plaintiff.

The rule is illustrated in many cases stated in Bigelow on Estoppel, and with special force and point in the leading case of Homer v. Fish, 1 Pick., 435, where, in an action to recover back insurance money obtained by the defendant upon a judgment against the plaintiff, the declaration alleged that the property insured had perished before the insurance was effected; that the defendant, knowing the facts, fraudulently caused an insurance to be effected with the plaintiffs; that he subsequently proved the loss; and then, in furtherance of their conspiracy, instituted suit and obtained judgment and satisfaction of execution. The defendant pleaded the judgment which they had obtained in bar of the action, alleging that it had not been annulled or reversed. To this the plaintiff replied that he did not know of the fraud until after the time had elapsed within which proceedings could have been had to vacate the judgment; to which the defendant demurred. And the court sustained the demurrer. Parker, O. J., speaking for the court, said: .“ That the only plausible ground upon which the case could be put was that the matter of fraud, the gravamen of the action, had not come in question in the trial of the insurance policy; but he said that the rule would not admit of such an exception. It was sufficient that the action was of a nature to admit of such a defense, and that the plaintiff in the new suit might have availed himself of it in the former action. Where the failure was imputable to laches there could be no question; and where it was the effect of ignorance of the facts, there must be a period within which the party suffering should be required to present his claim, or great mischief might ensue.”

Is there in the cause of action set forth in the petition in this suit any ground for its support, and for a recovery against the defendants, in case the result of the former suit had been the reverse of what it actually was? Surely, if the plaintiffs had recovered the judgment then prayed for, there would exist in the petition in this case nothing in addition relating to the subject-matter of former litigation beyond allegations cumulative of the basis for one of the elements of each and both actions, but they would suggest no new, different or distinct right from that which furnished the foundation of the former judgment. The judgment would have included the finding of, and would have been conclusive of, the fact that the defendants had received an amount sufficient to render them liable to the plaintiffs, and the facts alleged in the petition in this case additional to the former petition, whether true or false, would have been immaterial so far as they might serve to affect the rights of plaintiff or defendants in respect to any additional remedy on the contracts and transactions of the parties.

Careful consideration has brought us to the conclusion that the principle invoked by the counsel for appellant in his brief, and upon the authorities cited by him, cannot be rendered applicable to the facts of this case.

Many cases are. cited and quoted from by way of illustrating the extent to which judgments are conclusive of matters beyond the point actually determined, Í. <?., beyond the main question in issue, in Bigelow on Estoppel, page 118 et seq.¡ sustaining, we think, the application we have made. In one of them, Caston v. Perry, 1 Bailey, 533, Mr. Justice Calcock said that it was true that to make the record evidence on a particular point it must appear that that point was in issue; but the former suit was brought to try the title to the identical spot of land upon which the defendant had again trespassed. The defendant had at that time the very title on which he now relies; and whether the suit turned upon the extent of the lines, or the title itself, was wholly immaterial. If one having a dozen titles could set them up in succession, the plaintiff might be kept in court all his life. If the defendant had a title by which he could claim to be a co-tenant with the plaintiffs, he should have produced it.” See, also, Perkins v. Walker, 19 Vt., 144; Bigelow on Estoppel, 120.

"An estoppel extends beyond what appears on the face of the judgment, to every allegation which, having been made on the one side and denied on the other, was at issue and determined in the course of the proceedings. It not only establishes the case of the plaintiff, but disproves or negatives that of the defendant.” Freeman on Judg., 257.

“ It is not the object of the suit, the recovery, or fruits of the litigation alone that constitute the estoppel, but the facts put in issue' and found, upon which the recovery is based,— facts in issue as distinguished from the evidence in controversy.” Id., 257.

“ Every point which has been, either expressly or by necessary implication, in issue, which must necessarily have been decided in order to support the judgment or decree, is concluded.” Id., 257.

We cannot agree with -the interpretation placed by the appellant’s "counsel upon the record of the former suit, restricting thereby the issues or facts put in issue within the-limits his argument prescribes. He insists that the issue was, not whether the contract, as expressed in the certificate, had been made by defendants, and the percentage of earnings realized by the operation of the railroad, but whether another instrument (the trust conveyance), made contemporaneously with the certificate, provided that the personal responsibility of the defendants should cease upon the organization of the successor company, and whether that company had been formed, in fact, before any earnings had been received by the defendant as individuals. That the judgment, therefore, concluded nothing else; and urges that it would have been inadmissible under the pleadings to have shown that the defendants, by reason of a fraudulent combination to escape their contract, formed themselves into two other associations called the Beal and Personal Estate Association, and the Galveston & Houston Junction Bail-road Company, etc., and in those names received, to their own account, all the earnings of the Galveston, Houston & Henderson Bailroad, instead of paying the plaintiff’s-debt therewith according to contract. The reply to which is that the defendants’ answer in said suit goes farther than is allowed by the appellant’s counsel, for it denies that after their organization as the new company the earnings of the road were adequate to pay creditors; also that partial payments were made in fact; that under proceedings on liens held by Cowdrey in 1867, a sale by decree of court was made which extinguished their corporate functions; that all earnings since 1860 were included in the prior trust deeds foreclosed by Cowdrey, which exceeded the amount of earnings; denial also that the earnings, etc., ever came to hands of defendants, and that the plaintiff became a stockholder and was estopped from suing on this indebtedness. The reply further is, that the solution of the question as to what were the facts in issue and what was determined by the judgment are not to be ascertained by the mode and manner of treatment of the subject-matter of the suit in the conduct of the proceedings in the court where it was tried, because the defendants may have selected or have failed to have adopted this or that point of defense which was open to them at the time; or because the plaintiff may not have seen proper to reply by proper pleading so as to let in evidence in bar or avoidance of matter set up by the defendant as a defense, will, by no means, affect their duty so to do at the peril of the conclusiveness of the judgment which will be rendered, provided the subject of the suit, the cause of action set up by the plaintiff to be determined between the parties, involved the possibility of presenting such issues respectively in order to ascertain their rights.

Maxims applicable to this proposition have been sufficiently quoted without further comment; the plaintiff, in the former suit upon the facts stated giving him a right to demand payment, alleged liability and prayed for judgment; upon that cause of action whatever would support or defeat it was involved, and would be concluded by a judgment, and its conclusiveness would not be limited by the consideration that the course of pleading involved one special matter of defense. The second suit is for the same cause of action, which, according to the argument, rests upon matter which, in effect, is a sufficient reply and answer to the matter set tip and relied on successfully b\r the defendants in the former suit, but which was not pleaded then by the plaintiff, and therefore was not involved. This matter, according to the plaintiff’s argument, forms not the plaintiff’s action, which is, indeed, the same in both suits, but are but auxiliary facts to support its successful maintenance in the way of replication to the defendants’ plea in a former suit. The plaintiff might have relied on and pleaded them in that suit; by his failure to do so, he has lost the benefit of the privilege to do so. But we do not, as we have before said, and cited from the answer to demonstrate the fact, construe the issues in the former suit as being so limited in range as it is contended they are by the appellant’s counsel; that matter, however, under the above-view of the subject, is not of special consequence to consider. It is sufficient that “a judgment is conclusive upon every matter actually and necessarily decided in the former suit, though not then directly the point in issue. If the facts involved in the second suit are so cardinal that without them the former decision cannot stand, they must now be taken as conclusively settled.” Freeman on Judg., sec. 256., And see Aurora City v. West, 7 Wall., 82; Cook v. Burnley, 45 Tex., 97; Girardin v. Dean, 49 Tex., 246; Roberts v. Johnson, 48 Tex., 137.

We are of the opinion that the judgment should be affirmed, and shall award accordingly.