author: GALLAGHER, C. J.

text:
    ALLEN et al. v. LASSETER et al.
    No. 993.
    Court of Civil Appeals of Texas. Waco.
    Jan. 22, 1931.
    Rehearing Denied March 5, 1931.
    Clay Cooke, of Font Worth, and Julian B. Mastín, of Dallas, for appellants.
    Samuels, Foster, Brown & McGee and BTy-an, Stone, Wade & Agerton, all of Fort Worth, for appellees.
   GALLAGHER, C. J.

Appellants, Y. W. Allen, P. C. Jeffress, and F. B. Robinson, instituted this suit in the district count of Tarrant county against ap-pellees, L. E. Lasseter, H. W. Stoneham, H. A. Lasseter, Z. T. Lasseter, Stella Dewell, J. D. Collett, and C. A. O’Keefe, and for cause of action alleged that on the 21st of January, 1924, appellant V. W. Allen and Mrs. Anna Robinson entered into a written contract with appellee L. E. Lasseter; that said contract recited that said Lassiter owned an oil and gas lease on 5,120 acres of State University lands in Crane county, Tex., more particularly described as sections 25, 26, 35, 36, 37, 38, 47, and 48 in block 30 of said lands; that he desired to subdivide said lease into 20-acre tracts and offer the same for sale to the public; that Said Allen and Robinson, for the purpose of enabling him to finance such sale, advanced to him the sum of $250; that in consideration thereof he assigned to said Allen and Robinson one-half of all moneys received from such sales, less actual expenses incurred, that he should turn over to them the first $250 received from such sales, and th)at he should retain for himself the next $250 so received; that thereafter all proceeds of such sales, less actual expenses, should be divided equally, one half thereof being paid to said Allen and Robinson and the other half retained by him; that if for any reason whatever all said leases should not be sold, he should assign an undivided one-half interest in such unsold remainder to said Allen and Robinson. Appellants further alleged that the said Mrs. Anna Robinson was dead and that appellant F. B. Robinson was her sole heir and had succeeded to all the rights acquired by her under said contract. Appellants further alleged that thereafter, on the 2d day of February, 1924, appellant P. O. Jeffress entered into a written contract with said L. E. Lasseter; that said contract was in all respects identical with the Allen and Robinson contract aforesaid, except that said Jeffress was to furnish only $125 and was to have only a one-fourth interest in the unsold leases.

Appellants alleged that they had paid to Lasseter the sums aforesaid and had fully complied with their respective obligations under said contracts; that they thereby became invested with an undivided three-fourths interest in said leases, in all sums received from sales thereof, and in all oil and gas produced therefrom by or for said Lasseter; that said Lasseter took said leases either in his own name or in the name of H. A. Lasseter, Z. T. Lasseter, or Stella Dew-ell, but that in fact all said leases belonged to him, or to him and H. W. Stoneham jointly. Appellants further alleged that the entire control and disposition of said leases was undertaken by L. E. Lasseter and that he sold a part of the same and received the proceeds; that he made various contracts affecting the same and derived therefrom large profits amounting to more than $500,-000; and that he denied that they had any right, title, or interest therein. Appellants further alleged that because the exclusive control and management of said leases were confided to said Lasseter, he became a trustee for them and each of them. Appellants further alleged that ^aid leases had ait that time a value of more than $1,000,000; that large quantities of oil and gas were then being produced therefrom; that the oil production alone exceeded 20,000 barrels per day.

Appellants further alleged that theretofore on May 31, 1927, they had filed a suit in the district court against said L. E. Lasse-ter for an accounting of the profits derived from the transactions aforesaid, and that they were induced by misrepresentation,. concealment, and fraud to accept the sum of $15,000 in compromise and full settlement of said suit and all their claims under said contracts. The specific allegations of misrepresentation, concealment, and fraud will be recited in connection with the discussion of the same in the opinion herein.

Appellants prayed for the appointment of an auditor, for examination and report by him of all Lasseter’s transactions in connection with said leases, for the appointment of a receiver, and for judgment for such sums of money as they might be found entitled, and for general relief.

Said Stoneham, made a party defendant in the court below, filed no answer and was subsequently dismissed from this suit. Ap-pellees, being all the other parties defendant in the court below, filed a joint answer. They pleaded in bar the compromise and settlement referred to in appellants’ petition, and further alleged that the same included an agreed judgment against appellants in their favor, duly entered in said original suit.' They further pleaded that said Col-lett and O’Keefe on March 26, 1925, acquired in good faith for a valuable consideration the entire interest in said oil and gas leases on said lands. They denied that appellants had any right in or to the leases on any of said sections of land, but a recital of their pleadings on this issue is not deemed necessary.

The ease was tried to a jury. The parties executed and filed a written agreement which recited: “In order to expedite the trial of this case and to simplify and eliminate the issues to be submitted to the jury, it is agreed that this case be tried and submitted upon the sole issue as to the right of the plaintiffs to set aside and void on grounds of fraud alleged by them, the former settlement and) judgment set forth in their petition.” After reciting that all other issues involved in the casé were reserved for later determination by the court in event the court should decide in plaintiffs’ favor on such issue, said agreement further recited: “In case said jury or court should decide that said former settlement or judgment is binding upon plaintiffs, then judgment shall be immediately entered in favor of the defendants.” The court at the conclusion of the evidence instructed the jury to return a verdict for the defendants. Upon .the verdict so returned judgment was duly entered denying appellants any recovery herein.

Opinion.

Appellants present a single assignment of error, in which they assail the action of the court in instructing a verdict against them. They present thereunder a single proposition, in which they contend that the testimony herein showed or tended to show that, upon the filing of their original suit and in response thereto, said L. E. Lasseter represented that their interests in the leases on said sections of land had long since been forfeited and were valueless, and that he then owned no interest therein and was then insolvent ; that they relied upon such representations in entering into said compromise and settlement and in permitting the judgment included therein to be entered by the court; and that they would not have agreed to the same, or any of the same, if they had known the true facts regarding the status and ownership of such leases. They further contend that the court should have submitted such issues to the jury for determination. The testimony introduced shows that L. E. Lasseter, neither at the time he entered into the contracts involved in this case nor at any time thereafter, so far as shown, owned or held an ordinary oil and gas lease on any of the sections of land described therein. The testimony does show, however, that any person might file with the county clerk an application for a permit for the development of oil and" gas on any section of such lands, and that upon the payment of the filing fee of $1, the clerk would record the same, and that upon tender of such recorded application to the land commissioner, with the further sum of 10 cents per acre for each acre included in the application, the commissioner would issue a permit conferring upon such applicant the exclusive right to prospect for and develop petroleum and natural gas within the designated area for a specific term of years. The applicant’s prior right to such permit expired in thirty days if not so presented to the land commissioner with the required charges as aforesaid. Each applicant, however, was restricted to an aggregate of four sections within a prescribed radius. Said L. E. Lasseter was at that time, and had been for a long time prior thereto, filing from time to time such applications in his own name, in -the name of two brothers, his eodefendants herein, and others, on various sections of such lands, both in block 30, in which the sections described in said contracts were situated, and also in block 31 adjoining the same. At the date of the Allen contract Lasseter did not have an application on file with the county clerk covering any of the sections embraced in the contracts involved ¡herein, and had not had any such filings prior thereto as far as shown. Thereafter, on January 23, 1924, he filed applications on four of such sections in his own name and on the other four in the name of his brother Z. T. Lasseter. These applications expired by operation of law at the end of thirty days thereafter. No further filings were made on said sections until August 16, 1924, when he filed on four of the same in the name of said Z. T. Lasseter and the other four in the name 'Of his brother H. A. Las-seter. Such filings were renewed from time to time, the last filing having been made on March 2, 1925. On March 26, 1925, said Las-seter, his two brothers and others in whose names applications had been filed by him, entered into a contract with Collett and O’Keefe, by the terms of which Collett and O’Keefe were to furnish the necessary funds to pay the charges required for the issuance of permits on said applications, and various others not involved herein, and secure the issuance of such permits to the respective parties holding such applications, and such holders bound themselves to immediately transfer said permits when issued to said Collett and O’Keefe, and agreed that they should have the management, control, and disposition of the same. The permits so issued were transferred to Collett and O’Keefe in accordance with such agreement. While such transfers apparently covered the entire interest of the permit holders, the real contract was that Collett and O’Keefe should have only a one-half interest therein and should hold the remaining half as the property of L. B. Lasseter or other holders of such permits, respectively.

Appellee Lasseter’s contention that appellants had no interest in the leases or permits acquired by Collett and O’Keefe as aforesaid, is based on the fact that the applications on the sections described in said contracts made by him in his own and his brother’s name on January 23, 1924, were not renewed but were permitted to lapse. He testified. that it was his intention at the time he executed said contracts to embrace therein the same section numbers in block 31, and not in block 30, as he did do. He further testified that in pursuance of said contracts ¡he did attempt to sell interests in the rights he held at the time in said numbered sections in block 31, and not in block 30. He further testified that appellant Jeffress ait the time occupied the same office with him, used one side of the same double desk he himself used, and assisted to some extent at least in advertising and selling such rights as were sold. The testimony shows that out of the proceeds of such sales Lasseter returned to Allen and Robinson the said sum of $250 advanced by them and to Jeffress the $125 advanced by him under said contracts.. He testified that the remaining proceeds were expended in a futile effort ¡to make additional 'sales. The testimony further shows that shortly after the filing of appellants’ oiriginal suit a hearing was had on their application for receive!-, and that a receiver was then appointed and remained in charge of the properties involved until the compromise and agi-eed judgment therein on December 1st thereafter. The testimony further discloses that at the time of such hearing about 10,000 bai’rels of oil per day were being produced from such properties and that large sums of money had been received and large expenses incurred in connection with such properties. The testimony further shows that thereafter the receipts fi'om the operation of said properties and the sale of rights therein were much greater than contemplated at the time of such compromise.

The trial in the court below was by the express agreement of the parties confined to the determination of the issue of appellants’ right to have the compromise agreement and judgment set aside and avoided on their allegations of fraud set forth in their petition and the testimony submitted thereunder. Where an action is based on fraud, the facts constituting the same must be alleged and such allegations present the issues to be determined. Baines v. Mensing Bros. & Co., 75 Tex. 200, 203, 12 S. W. 984; Hendrix v. Nunn, 46 Tex. 141, 149; Parker v. Allen, 33 Tex. Civ. App. 206, 76 S. W. 74, 78 (writ refused); Smith v. Guerre (Tex. Civ. App.) 175 S. W. 1093, 1094, par. 2; Crawford v. El Paso Land Improvement Co. (Tex. Civ. App.) 201 S. W. 233, 238, par. 10; J. M. Radford Grocery Co. v. Flynn (Tex. Civ. App.) 202 S. W. 332, 333, par. 3; San Antonio & A. P. Railway Co. v. De Ham, 93 Tex. 74, 78, 53 S. W. 375; Gulf, C. & S. F. Ry. Co. v. Pool, 10 Tex. Civ. App. 682, 31 S. W. 688, 689. Appellants alleged both affirmative misrepresentations and concealment. The substance of the misrepresentations alleged was that L. E. Lasseter had no right, title, or interest in said leases or the proceeds thereof; that he was insolvent and no recovery against him could be collected; that the transfer to Collett and O’Keefe was a bona fide sale; that they were innocent purchasers and that they were paying the $15,000 consideration for such compromise and settlement merely to free said properties from appellants’ claims. The testimony offered in support of the allegation that Lasseter denied having any interest in these leases was brief. The contracts sued on were dated in January and February, 1924, respectively. Allen testified that some time in the year 1926, a year and a half or two years after the date of his contract, he met Lasseter on the street in Fort Worth and asked about these leases, and Lasseter said he had let them forfeit, that he didn’t have any money to pay the rental on them, and. that he didn’t think they were worth a “damn” anyhow. Allen further testified that he never saw Las-seter again until after the compromise. Jeff-ress testified that he met Lasseter on the street some time during the year 1925; that he inquired about these leases; that Las-seter told him, “I just filed on that stuff”; that he said to Lasseter, “I thought you said you had a three years lease on it when, you sold it to me” ; that Lasseter replied: “No, I was just filing on that. I didn’t think anything of it and I let it forfeit.” He further testified that he saw Lasseter again in May, 1927, and that Lasseter said at that time that he had made $3,000 in south Texas; that he did not see or talk to Lasseter again until after the compromise. Lasseter testified in this connection that he never saw Allen for more than two years after the date of these contracts, but that he did tell Jeffress that his rights had been forfeited. Appellants were represented in the filing of the first suit and in the compromise thereof subsequently effected by their attorney, Mr. McLean. He testified that before filing the original suit he called on Mr. Collett and inquired about the interest of L. E. Lasseter in said properties ; that he told him said Lasseter had an interest therein but he did not know just what such interest was. McLean further testified that no one told him that L. E. Las-seter had no interest in said property, that he knew said Lasseter did have some interest in said property at the time he agreed to the compromise, and that he made an estimate of the amount of such interest. The testimony offered in support of the allegation that L. E. Lasseter was insolvent was also brief. McLean testified that after the conversation with Collett above referred to, he had a conversation with Mr. Phillips, who represented the defendants in the original suit; that Phillips stated that Lasseter didn’t have anything as far as he knew and was indebted to him for a small attorney’s fee which he was unable to pay. Mr. Phillips died before the compromise was effected. Mr. McLean further testified in this connection that he was not influenced by this statement for the reason that he found that Phillips was mistaken, that he knew after taking Collett’s deposition that Lasseter was not insolvent, and that he was able to pay a substantial judgment if one were recovered against him. There was no attempt to show that Collett and O’Keefe were not purchasers of the half interest in the permits held by them in good faith and for a valuable consideration. Mr. McLean testified in this connection that nobody represented to him that Collett and O’Keefe were the sole owners of that business nor that they were to pay the $15,000 received in the compromise settlement; that he understood at the time that said sum so paid was to come out of Lasseter’s part of such business. The substance of appellants’ allegation of specific fraudulent concealment was that L. E. Lasse-ter concealed himself, evaded court summons, and refused to testify or give any accounting to them of his trusteeship, and that Collett and O’Keefe concealed the fact that they were holding said moneys and leases for the joint account of themselves .and said Lasseter, and thus aided and abetted him in securing said compromise settlement. Las-seter resided in Port Worth. A hearing was had and a receiver appointed on appellants’ application a few days after the filing of their original suit. Lasseter did not appear at that hearing. There is testimony that at the time of said hearing Lasseter’s copy of the Allen contract was lost and that Allen’s copy thereof was misplaced. McLean testified that prior to such hearing he asked Phillips to produce Lasseter and let him talk to him, and that Phillips said he would do so when McLean submitted his copy of the contract for examination. McLean further testified that he wanted Lasseter on the stand at that hearing; that he did not know whether he had process issued for him or not but he possibly got out a subpoena for him; that he did not know what effort was made to serve such subpoena if issued. He also testified that Lasseter was in Port Worth at the time and that he tried to get his deposition but did not succeed. Whether in pursuance of such effort interrogatories to Las-seter were ever filed was nowhere shown. Allen testified that they made an effort to get Lasseter’s testimony at that hearing; that such effort continued a week or two; that he thought Jeffress and one or more deputy sheriffs hunted for him. Jeffress testified that he went with the constable to Lasseter’s office several times and that they also went to his residence. Nothing more specific in this connection was shown. There was no affirmative showing that any subpoena for Lasseter to appear at that hearing was ever issued. None of the officers referred to In the testimony of Allen and Jeffress were called to testify. There was no attempt to show that Lasseter ever knew that they were searching for him. There is no testimony that any attempt was made to ascertain the extent of L. E. Lasseter’s holdings from either of his brothers. That the true facts could have 'been ascertained from that source is shown by the testimony of Jeffress himself that almost immediately after the compromise was effected he saw depositions from them taken in another suit, in which the extent of L. E. Lasseter’s interest was fully disclosed. Notwithstanding he then learned the. real facts, this suit was not filed until more than six months thereafter. McLean testified that he went in person to Grane county to investigate the title as disclosed by the. records there, and that he sent an expert examiner to Austin to make a thorough examination of the records in the land office relating thereto; that he was fully apprised of the facts shown by such records at the time he, with the approval of appellants made the compromise settlement; that he never talked to O’Keefe about the matter because he was at home sick and had been for sometime; that Collett did not make any fraudulent representations about the situation to him; that he got a straight answer from Collett to every question he asked •him at the receivership hearing; that no fraud so far as he knew was perpetrated upon him in the negotiations relating to such settlement. He further testified that he had some doubt whether after the abandonment by Lasseter of the. filing of applications for permits on the sections involved in this ease for more than six months, the subsequent refiling of such applications after such lapse of time would inure to the benefit of appellants; that he considered that they might be defeated as a cold matter of law or that they might be defeated as a matter of evidence, and that while he was not satisfied with the sum of $15,000 agreed on as consideration for the compromise, it was the best offer he could get; that he stated to appellants that there was a possibility they could not recover anything and that they might get a whole lot; and that after his investigation he thought really it would be best to accept the offer.'

The testimony as hereinbefore recited shows without controversy that McLean, who filed the original suit for appellants and negotiated and consummated the compromise settlement, knew that L. E. Lasseter owned an interest in the properties involved at that time, and that such interest was valuable. The only material facts unknown to him at that time, were the extent of such interest and its actual value. The testimony shows that the extent of the interest of L. E. Las-seter could have been easily ascertained by taking the depositions of his two brothers. They did disclose such interest fully in depositions taken before the compromise but not seen by appellants until shortly after the same was- consummated. Such compromise was not effected until about five months after the hearing on the application for receiver and the record fails to disclose any effort whatever to take L. E. Lasseter’s deposition during that time or to otherwise ascertain from him the real facts. The control and management of these properties, so far as the interests of appellees were concerned, were vested in Collett and O’Keefe. McLean testified that Collett never refused to give ¡him any information which he possessed.. Besides, the receiver appointed at the instance of appellants had at the time of the compromise been in charge of the properties since his appointment shortly after the institution of the suit. Whatever information he had acquired ‘during that time was presumably accessible to all parties. The largest and most profitable sale of mineral rights was not made until May 1, 19⅜ some five months after the compromise. There is no testimony whatever to indicate that such favorable sale could have been reasonably foreseen at the time of the compromise. The au- ‘ thorities are in accord in holding that to entitle one to avoid a contract or settlement on thd ground that he was induced to enter into it .on the faith of false representations, it is essential that he should have been ignorant of the. falsity of such representations and should have relied on the truth thereof. If, before he acted upon such representations, he discovered that they were false, he cannot claim that he was deceived and thereby avoid such contract or settlement. Dossett v. Franklin Life Insurance Co. (Tex. Com. App.) 276 S. W. 1097, 1098, and authorities there cited; Thrower v. Brownlee (Tex. Com. App.) 12 S.W.(2d) 184, 186, par. 4; Tucker v. Smellage (Tex. Civ. App.) 297 S. W. 875, 877, par. 3; Thames v. Smith (Tex. Civ. App.) 280 S. W. 859, 860. The right to set aside a contract of settlement on the ground that the same was induced by false representations is defeated if the party claiming to have relied thereon knew that such representations were false in any material particular. It is not necessary that he should have known that the representations were wholly false, or the exact extent of their falsity. Wortman v. Young (Tex. Com. App.) 235 S. W. 559, 561, and authorities there cited; Waggoner v. Zundelowitz (Tex. Com. App.) 231 S. W. 721, 727, par. 11, and authorities there cited; Donoho v. Hunter (Tex. Com. App.) 287 S. W. 47, 49, par. 4: 1st Black on Rescissions & Cancellation, § 117.

The uncontradicted evidence shows conclusively that McLean, at the time he negotiated and consummated the compromise .'under consideration, had such knowledge of the facts as, under the authorities last above cited, defeated appellants’ attempt to avoid and set the same aside. The trial court properly instructed a verdict for appellees, and its judgment is therefore affirm’ed.


source: Caselaw Access Project

author: SELLERS, J.

license: Public Domain

text:
    CUMMER MFG. CO. v. COPELAND.
    No. 3951.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 30, 1931.
    Rehearing Denied Feb. 5, 1931.
    E. A. Tharp, of Mineóla, Bozeman & Cathey, of Quitman, and Butler, Price & Maynor, of Tyler, for appellant.
    Jones & Jones of Mineóla, for appellee.
   SELLERS, J.

B. R. Copeland and Paul D. Smith owned the John Noland survey of 640 acres of land jointly, and some time in 1923 these parties secured a surveyor and established a division line between them. This line was plainly marked by the surveyor and was agreed upon by the parties ¡as the dividing line between their property and said line constituted the south boundary line of Paul Smith’s land and the north boundary line of B. R. Copeland’s land. A short while after this line was established, Paul Smith sold the timber off his land to Cummer Manufacturing Company. In making the sale to Cummer Manufacturing Company, Paul Smith had all of his dealings with A. T. Morton, who acted as agent for the company. Before the sale was consummated. Paul Smith took A. T. Morton over the land and showed him a division line between Smith and Copeland. Later, two men, Bradshaw and Reese, contracted with Cummer Manufacturing Company to cut the timber from this land.

This suit was instituted by B. R. Copeland against the Cummer Manufacturing Company, alleging that said company had knowingly, wrongfully, and maliciously crossed the. south boundary line of the Smith land and had cut certain timber on plaintiff’s land, and in said suit seeks to recover the manufactured value of the timber so taken. The Cummer Manufacturing Company answered .by general demurrer and general denial, and further set up that Paul Smith represented to A. T. Morton, agent for Cummer Manufacturing Company, that the boundary line between the land of Copeland and Smith was far enough south to include the timber cut within the boundaries of the Smith land.

The case was tried to a jury upon special issues, and upon the issues submitted as answered by the jury, the court entered judgment for Copeland for the sum of $610.

If the line as claimed by plaintiff was the correct line between the land of plaintiff and Paul Smith, then the first assignment of appellant is without merit. There was ample evidence before the jury to authorize the court in submitting to it the issue as to whether the defendant Cummer Manufacturing Company acted in good faith and under an honest belief that it has the legal right to appropriate the timber it caused to be cut from plaintiff’s land. Ripy et al. v. Less et al., 55 Tex. Civ. App. 492, 118 S. W. 1084.

We cannot agree with appellant that if the timber in controversy was cut it was by independent contractors and therefore defendant Cummer Manufacturing Company was not liable. It appears from the record without contradiction that defendant Cummer Manufacturing Company, through its agents, directed the parties who cut the timber for it where to cut and that they cut no timber except such as they were directed to cut by the defendant Cummer Manufacturing Company. Under such circumstances as these, Cummer Manufacturing Company would be liable even though the parties who cut the timber were independent contractors. Moore & Savage v. Kopplin et al. (Tex. Civ. App.) 135 S. W. 1033.

Appellant’s third assignment is overruled. The question here raised has been so well settled -by the authorities here cited .that we think another discussion of it could serve no good purpose. Beauchamp v. Williams et al. (Tex. Civ. App.) 115 S. W. 130; Carter v. Clark & Boice Lbr. Co. (Tex. Civ. App.) 149 S. W. 278; Brooks v. Moss et al. (Tex. Com. App.) 212 S. W. 153.

It is true that plaintiff offered no testimony as to the value of baskets and crates manufactured by Cummer Manufacturing Company, but there is ample evidence in the record to show that the logs taken from the land in question were first manufactured by Cummer Manufacturing Company into lumber and then into crates and baskets, and there is also evidence as to the value of the lumber manufactured -from the logs.in question. We do not think that plaintiff could be required to prove the value of the crates and baskets manufactured from the lumber so long as he elected to recover the manufactured value of the timber into lumber and not into crates and baskets.

The first issue submitted by the court to the jury was as follows;

“Question No. 1: Did Cummer Manufacturing Company act in good faith and under an honest belief that it had a legal right to appropriate the timber it caused to be cut from the land lying South of the boundary line as claimed by plaintiff?”

The defendant Cummer Manufacturing Company at the proper time filed the following exceptions to the above issue:

“The defendant objects and excepts to Question No. 1 for the reason that it is framed in such a manner as to be on the weight of the evidence.
“B. Further exception to Question No. 1, it is fatally defective in this, that it assumes the defendant did cut the timber in question from plaintiff’s land which is a controverted issue before the jury.”

By a proper bill of exceptions the court’s action in overruling the defendant’s exception to said charge is brought before us for review. The witness A. T. Morton testified: •

“I know where the timber is that the Cum-mer Manufacturing Company bought from Paul Smith. I also know where the Copeland land is. I recommended to the Cummer Manufacturing Company the purchase of that timber from Smith. I didn’t buy it for them myself. I recommended it to the officials and they bought it. At that time Paul Smith showed me over the land. We went down there and went over it. He showed me some corners. He showed me about where the South boundary was. He showed me the boundary down at the river on the south side. I knew George Cowan, a surveyor in this county. I was with him when he went down there to survey it after this controversy arose. I saw the line that he surveyed. I was over the line with him. At that time I don’t think there was any timber cut South of the line that Paul Smith showed me on Copeland’s land. I am not positive -at this time. The Duck Creek Lumber Company was cutting in there at that time. There was a tree South of the Sabine river where he showed me a corner. The tree that we started from was on the South side of the river on the line that runs North and South. I am talking about where Mr. Cowan and I started. Paul Smith carried me down there and showed me the corner when he first showed it to me previous to the time Cowan and I were there. Paul Smith showed me a marked corner tree on the South bank of the river. I believe it was a pecan tree. There was where we started from and he told me there was where it commenced. We went right east from there down the river. That is where Paul Smith showed me. After this controversy came up and I went back there later with Mr. Cowan we went to this same place where Paul Smith pointed out the corner and then we went a few rods farther north and commenced at what we supposed to be a persimmon tree, -across the' river, and went on over a little ways, a little bit farther North, and started from that point. I stayed with Mr. Cowan while he was surveying the line through. We went over the old established line, the one Paul Smith and I went over. We didn’t start at the same place that Mr. Smith showed me the line. It was a little bit farther North where Mr. Cowan started from. It was supposed to be a persimmon tree, I believe. We hunted for a persimmon tree but I don’t think we found it. I think it was just a stob when we went there. It had rotted down, possibly, or been destroyed.”

The witness T. A. Bradshaw, one of the parties employed in cutting the timber testified as follows:

“I didn’t know that they sent the county surveyor of this county down there to locate the line after this was reported to them. Mr. Cowan ran the line. I didn’t know he was county surveyor. I think that was the next day after I made this report. It was possibly the next day or two. * * * Miss Wheeler told me Mr. Cowan ran the line and to go ahead and get the timber. I wouldn’t say that I did or didn’t see Mr. Cowan down there. I went by the mark. There was another line run and I saw trees marked and stakes set up and cotton and paper tied on trees. * * * Miss Wheeler told me at first to cut this stuff and Mr. Morton would be out there and show me where this new line was and Mr. Morton came out, I think the next day, and we started to cut the next day to this line.”

After a very careful consideration of this record, and especially the evidence above quoted, we are unable to agree with appellee that the court was authorized in assuming that the line as claimed by plaintiff was a true line between plaintiff and Paul Smith, but, on the contrary, we are of the opinion that the court should have submitted an issue to the jury covering this phase of the case, and the failure to do so was error. At the time the timber was cut there can be no doubt but that there were two lines across this tract of land, one where the hands first cut the timber to, and the other where they were later ordered to cut to, and it was a question for the jury to say which of the lines is the true one.

Because of the error indicated, the judgment of the trial court is reversed, and the cause remanded.


author: WILLSON, C. J.

text:
    FIRST STATE BANK OF JACKSONVILLE et al. v. SMITH.
    No. 3940.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 15, 1931.

      Ouinn & Devereux, of Jacksonville, for appellants.
    Woolworth & Baker, of Carthage, and Slay 6 Simon, of Fort Worth, for appellee.
   WILLSON, C. J.

(after stating the case as above).

In his petition appellee alleged that the land was conveyed to J. N. Brooker by E. C. Clabaugh, Jr., acting as a substitute trustee under a deed of trust to J. W. Cooke dated March 23, 1927, filed for record July 19, 1927, and recorded in volume 12, page 624, of the Panola County Deed of Trust Records. At the trial, over appellants’ objection, the court admitted as evidence a deed of trust from the resource corporation to J. W. Cooke, trustee, not dated, but the execution of which was acknowledged May 10, 1927, and which was filed for record July 19, 1927, and recorded in said volume 12 on page 624 of said Panola County Deed of Trust Records. A ground of the objection to the admission of the trust deed as evidence was that it was not only not dated March 23, 1927, as appellee had alleged it to be, but was not dated at all, and therefore should be treated as dated May 10, 1927, because it appeared that its maker, the resource corporation, acknowledged its execution on that day. It is insisted in support of the contention that the court erred when he overruled the objection on the ground stated. Doubtless it is true that under some circumstances the date of the acknowledgment of a deed should be treated as the date of the deed [Northern Coal & Coke Co. v. Bates, 146 Ky. 624, 143 S. W. 13; Cornett v. Brashear, 225 Ky. 529, 9 S.W.(2d) 302], but whether it is or not we think is of no importance in this case. No right of any of the parties was affected by the date of the trust deed, and its date was of importance only in identifying it as the instrument under which the substitute trustee acted. Hough v. Hill, 47 Tex. 148; Thompson v. Cobb, 95 Tex. 140, 65 S. W. 1090, 93 Am. St. Rep. 820. It was sufficiently, if not conclusively, so identified by the evidence showing the date it was filed for record, the record book and page thereof in which it was recorded, recitals in the notes held by appellants, and the absence of evidence showing any other such deed from the resource corporation to Cooke ever to have existed. Hence we think the first, second, third, and seventh assignments of error are without merit and should be overruled.

The contention urged by appellants that they were entitled to a resale of the land is on the theory it appeared from parts (set out in the statement above) of the instruments evidencing the contract between the parties, that they (appellants) were to be entitled, after the holders of the first four of the eight notes had had a foreclosure, to have a foreclosure of the lien created to secure the two notes they (appellants) held of the last four of the eight notes. It will be noted, on referring to said parts of said instruments, that the provision therein for a foreclosure of the last four notes was not that the holders thereof were to be entitled to a foreclosure after the holders of the first four had had a foreclosure, but that the lien created to secure the last four of the notes was not to be foreclosed “until (quoting) the full payment shall have been had of the first four notes”; that “payment (quoting) of said first notes shall be had before the remaining four notes are enforceable”; and that the “holder or holders (quoting still further) of the last four notes of 'said series shall not have the right to foreclosure until after full and final payment of the first four notes of said series, without the consent of the holder or holders of the first four notes of said series.” It conclusively appeared that the amount realized from the trustee’s sale on account of the first four notes was not sufficient to satisfy these notes in full. That being true, it is obvious that by the terms of the contract the contingency upon which appellants were entitled to a foreclosure on account of the notes they held never arose, and that their contention to the contrary on the theory stated was without the support of anything in the record.

As we view the case, the position of appellants as owners of two of the last four of the eight notes was, in legal effect, that of junior mortgagees. The rule seems to be, in the absence of fraud, and there was no evidence of any in this case, that “a regular sale under a trust deed (and the one in question was such a sale) will cut off” equities of a junior lien holder. Tolleson v. Nobles (Tex. Civ. App.) 152 S. W. 850; Hampshire v. Greeves, 104 Tex. 620, 143 S. W. 147; 2 Jones on Mort., 1821a.

It is insisted it appeared appellants, as the^ holders thereof, were entitled to recover of the resource corporation the amount of the two notes they held of the last four of the eight notes; appeared further that as such holders they were entitled to a foreclosure of the lien created to secure said two notes; appeared further that the land was worth enough to satisfy the first four notes in full, all costs, and part of the amount of the two notes of the last four owned by appellants; and appeared further that they (appellants) were not parties to the foreclosure had by appellee and had no notice thereof. Therefore the court below er.red, appellants insist further, when he refused to award them a recovery, as against said resource corporation, of the amount of said two notes and when he refused to foreclose the lien reserved to secure same and direct a resale of the land. It appearing, as we have determined, that appellants were not entitled to a foreclosure of their lien and a resale of the land, we think it is a sufficient answer to the contention that appellants were entitled to recover of the resource corporation the amount of the notes they held, to call attention to the fact that said corporation was a foreign corporation, that it made no answer to the suit, was without right so far as the record shows to the contrary to engage in business in this state, without an agent here upon whom service of a citation could be had, and on whom personal service of notice of the suit was not had elsewhere than in the state of New York. In that state of the case, appellants were not entitled to a personal judgment against said corporation. Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565.

As we understand the record, appellants have failed to point out error requiring a reversal of the judgment. Therefore it is affirmed.


text:
    KIRBY v. FITZGERALD et al.
    No. 3920.
    Court of Civil Appeals of Texas. Texarkana.
    Nov. 26, 1930.
    Rehearing Denied Dec. 31, 1930.

      McCormick, Bromberg, Leftwich & Car-rington, of Dallas, and Andrews, Streetman, Logue & Mobley, of Houston, for appellant.
    Bullington, Boone, Humphrey & King, of Wichita Falls, and I. M. Williams, Jed C. Adams, and Coke & Coke, all of Dallas, for ap-pellees.
   WILLSON, C. J.

(after stating the case as above).

It appeared from evidence adduced at the hearing on the pleas referred to in the statement above that the stock of the Dr. Pepper Company in question had been issued to and in the name of the Collin County Realty Company, and that said realty company owned and had possession of same in March, 1925, when appellee Sibley, having wrongfully obtained possession thereof, delivered the stock certificates to appellee Carlton, in Dallas, to hold as security for a promissory note for $35,000 made by him to said Carlton and appellant, Kirby. In so obtaining possession of the stock certificates and using them as stated, Sibley was guilty of a conversion thereof. Motor Co. v. De Ford (Tex. Civ. App.) 282 S. W. 832; Oil Corporation v. Waggoner (Tex. Civ. App.) 273 S. W. 903; Gulf, C. & S. F. Ry. Co. v. Bank (Tex. Com. App.) 270 S. W. 1008; Copeland v. Porter (Tex. Civ. App.) 169 S. W. 915; Houston & T. C. Ry. Co. v. Patterson (Tex. Civ. App.) 192 S. W. 1103; Pittman v. Fox (Tex. Civ. App.) 228 S. W. 579; Land v. Klein, 21 Tex. Civ. App. 3, 50 S. W. 638. Such conversion was a “trespass” within the meaning of the exception numbered 9 set out in the statement above authorizing suit “upon a trespass” to be brought in the county where the trespass was committed, without reference to whether the trespasser resided in that county or not. Ward v. Odem (Tex. Civ. App.) 153 S. W. 634; Geary v. Word (Tex. Civ. App.) 259 S. W. 309; Rose Mfg. Co. v. Coppard (Tex. Civ. App.) 255 S. W. 993; Carver v. Merrett (Tex. Civ. App.) 184 S. W. 741. Appellee Carlton became a party to the conversion of the stock when, as security for the $35,000 note, he accepted the certificates of Sibley, knowing Sibley was not the owner thereof and not authorized to use same for such a purpose. Parkersburg Rig & Reel Co. v. Golden (Tex. Civ. App.) 277 S. W. 1106; Nunn v. Padgitt (Tex. Civ. App.) 161 S. W. 921; Kempner v. Thompson, 45 Tex. Civ. App. 267, 100 S. W. 351; Focke v. Blum, 82 Tex. 436, 17 S. W. 770. Such acceptance having been in Dallas county, we think it is clear that the suit for the conversion, or trespass, thus accomplished, was maintainable in that county so far as it was against Sibley and Carlton. It appeared from said evidence (the trial court had a right to say) that the delivery of the note and stock certificates to Carlton and Sibley was in pursuance of an agreement between them and appellant, Kirby, for “swapping credit,” whereby Sibley was to make and deliver the $35,000 note to Carlton and Kirby, secure same with the stock,, and receive therefor four notes (three for $10,000 each and the other for $5,000) made by Carlton and indorsed by Kirby. We think the trial court had a right to say, in view of said agreement, that the delivery of the $35,-000 note and stock certificates was to Carlton, not only on his own account, but also as the authorized agent of appellant, Kirby, and that the latter, by Carlton’s acceptance of same for him, became a party to the conversion in Dallas county and liable to be sued there. Ward v. Odem (Tex. Civ. App.) 153 S. W. 634; 38 Cyc. 2056. It follows that we think the trial court had a right to conclude it appeared the suit was within said exception 9 to the venue statute, and to overrule appellant’s (Kirby’s) plea on that ground. In that view of the case, it is not necessary to determine whether the ruling of the court was sustainable on the other grounds, or any of them, set up in the controverting plea, or not.

The judgment is affirmed.

On Motion of Appellant for a Rehearing.

Appellant insists the conclusion reached here that it appeared the suit was maintainable against him in Dallas county by force of exception 9 to the provision in article 1995, R. S. 1925, referred to in the opinion affirming the judgment, was unwarranted, -because without the support of allegations in appel-lee’s controverting affidavit showing him to have been guilty of conversion of the stock in that county. The allegations which we thought, and still think, authorized the admission of evidence on which that conclusion was based, were as follows: “That the defendant John Henry Kirby * * * acting in pursuance of an unlawful agreement theretofore made between himself, said John Henry Kirby, and the said defendants S. W. Sibley and O. S. Carlton, unlawfully converted all of said corporate stock to his, the said John Henry Kirby’s own personal use and benefit * ⅜ ⅜ xhis is a suit for conversion of the stock sued on, and for damages thereto, brought in the district'court of Dallas County, Texas, where the wrongs complained of in plaintiff’s petition (made a part of the controverting affidavit) and the torts therein alleged as committed by the defendants, and the trespass complained of, were committed in Dallas County, Texas.”

The motion is overruled.


text:
    SUPREME FOREST WOODMEN CIRCLE v. LITCHFIELD et al.
    No. 3948.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 15, 1931.
    J. K. Brim and J. E. Spence, both of Sul-phur Springs, for appellant.
    . J. O. Duncan and Wm. J. Fanning, both of Sulphur Springs, for appellees.
   SELLERS, J.

The plaintiff, Bertha M. Litchfield, joined by her husband, J. A. Litchfield, sued, the appellant in the county court of Hopkins county, Tex., to recover $500 upon a $1,000 beneficiary certificate, alleging that she was totally and permanently disabled by bodily injuries and disease so that she would be wholly and permanently and continuously prevented thereby from performing any work or engaging in any occupation or .employment. The case was tried to a jury upon special issues, and upon the special issues as answered by the jury, the court entered judgment for plaintiff-for the sum of $500.

• Under a certain clause in the policy issued to plaintiff by the defendant, she was entitled to recover one-half the face value of the policy if at any timé before she reached the age of sixty years she should become totally and permanently disabled from performing any labor whatever, provided she would surrender the policy and accept one-half of the face value of same in full settlement of her claims against the defendant, and it was upon this clause of the policy that this suit was instituted.

When the case was called for trial on April 30, 1930, the defendant filed what he termed his first application for a continuance which the court overruled, and this action of the court is assigned as error. '

It apipears from the record that the witness upon whose testimony the application for continuance is based was a Dr. Long. It further appears that in March or April preceding the trial, under an agreement by the attorneys of both plaintiff and defendant, this doctor examined said plaintiff for the purpose of determining whether she was suffering from any disease or injury which would cause her to be permanently and totally disabled.

The application for continuance is in statutory form and recites that said witness is under the process of the court and was in attendance upon the court on the préceding day, and further recites a statement of facts which,, if the jury believed, would have warranted them in returning a verdict for the defendant.

When the application was filed, the plaintiff, through her attorney, filed a controverting affidavit to the application for continuance and set up that the ease had been continued by agreement from the January term of court, and that on the call of the case at the April term it was postponed on the oral application of the defendant to a subsequent day of the term, and for those reasons, alone, asked the court to overrule defendant’s application for continuance which the court did.

It is our opinion that the trial court erred in overruling the application for continuance. The trial court offers no explanation for overruling the motion for continuance, and therefore we take it that he followed the reasons assigned in plaintiff’s controverting affidavit to said application, that is, that the case having been continued by agreement, and at the next term postponed to a subsequent date upon the oral application of the defendant, that the first application of the defendant had been exhausted. We do not agree that a postponement of the trial from one day to another at the same term of court should be treated as defendant’s first application for continuance, and under no authority, could a continuance by* agreement be treated as such. Clearly this was defendant’s first application for continuance, but if it had been a subsequent application, as contended by appel-lee, then it would still be sufficient because an examination of the application discloses that it has all the averments requisite to a subsequent application and the fact that it was styled the first application would in no sense preclude it as a subsequent one. City of Seymour v. Montgomery et al. (Tex. Civ. App.) 209 S. W. 237.

The other assignments of appellant have been carefully considered and are expressly overruled.

For the error of the court in overruling the application for continuance, the judgment of the trial court is reversed, and the cause remanded.


author: LEVY, J.

text:
    UNDERWOOD v. JEFFERSON BANK & TRUST CO.
    No. 3953.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 15, 1931.
    I. C. Underwood, of Marshall, in pro. per.
    P. G. Henderson, T. D. Rowell, Sr., and J. H. Benefield, all of Jefferson, and J. A. R. Moseley, Jr., of Texarkana, for appellee.
   LEVY, J.

The appellee brought the suit against the appellant administrator to recover on notes alleged to have been executed by L. T. Little and to foreclose a deed of trust upon land. The administrator rejected the claim sued on when presented to him for allowance against the estate of L. T. Little, deceased, and this suit followed. The appellant pleaded as a defense that the note of $4,000 sued upon was not a valid claim against the estate, and the note of $6,000 placed as collateral security was without consideration, and the mortgage lien was void because upon a homestead. Appellant further pleaded that the estate was wholly insolvent and the land in suit, being the homestead, was not a subject-matter of administration. In a trial before the court, judgment was rendered in favor of the appel-lee for the principal and interest due on the $4,000 note with the addition of attorney’s fees, and for foreclosure of the mortgage lien.

The court made findings of fact, and as there is evidence to warrant them, they are here approved. It is not necessary to set out all the findings at length, as they can be easily referred to. As found by the court, L. T. Little was due and owing the amount of $4,-000, and he executed a note therefor on June 26, 1927, and executed the deed of trust on the property described to secure the payment of the same. The $6,000 used merely as a collateral note, was not owing by Mr. Little. Mr. Little died September 16, 1927, leaving surviving him a wife.

, As relating to the homestead claim of the mortgaged property, the court found: On March 20, 1923, L. T. Little purchased 41.54 acres, and in July, 1923, he purchased 3 acres, and on June 24, 1924, he purchased 9 acres of land, aggregating 53.54 acres. This was the mortgaged property. The three tracts mentioned were purchased by L. T. Little with the purpose and intention in view of occupying and using same as a h@mestead. He dug a well, built a derrick, placed á pump in the well, and laid pipes for irrigation of the land, with the intention of growing canna bulbs and other flower plants for commercial purposes. He did so use the land for the purpose stated. He was “prevented from continuing such improvements and occupying, such property as a homestead by the sickness and the death of L. T. Little.” L. T. Little died on September 16, 1927, and for two years prior to his death was confined to his room and bed.

At the time of the purchase of these tracts of land, L. T. Little was the owner and he and his wife were residing upon and using and claiming as their homestead block No. 89 of the Alley addition in the city of Jefferson, consisting of twelve lots.' The 53.54 acres were not a part of block No. 89, but “were about one-fourth mile separate from each other.” “On the date of the execution of the deed of trust in this case and before the land described in the deed of trust was acquired, and for more than two years after the execution of the deed of trust, L. T. Little and his family continued to occupy Bloch No. 89 in the city of Jefferson as their homestead.” The following conclusions were made by the court:

“I conclude that from the first of November, 1920, until the 30th day of September, 1926, L. T. Little and his family occupied Block No. 89 of the Alley Addition to the City of Jefferson, which was no part of the land in controversy, as a homestead.
“I further conclude that the land described in the deed of trust was not part of their homestead on the date the deed of trust was executed.
“I conclude that the mere intention of a person to occupy certain designated land as a homestead, together with improvements put thereon to carry out such intentions, is not sufficient to. constitute such property as a homestead, but before the homestead character will attach to subsequently purchased land, the land actually occupied as a homestead, together with the use thereof as a home, must be actually abandoned and the party must vacate such land.”

The salient points presented by appellant on appeal are: “The court should have found, as a matter of law, that the land involved was homestead;” “that the land involved in this suit was the homestead of L. T. Little and his wife at the time of his death and was not subject to administration.” The points so made depend entirely upon whether or not the land in suit was in fact impressed with the character of a homestead as determined by the rule applicable thereto.’ it is believed that the court’s finding that the mortgaged land was not homestead in fact is sustained by the evidence. The purchase and the intention to make the 53.64 acres the homestead could not prevail as against the fact found by the court that “on the date^of the execution of the deed of trust in this case and before the land described in the deed of trust was acquired and for more than two years after the execution of the deed of trust L. T. Little and his family continued to occupy Block No. 89 in the city of Jefferson as their homestead.” Allen v. Whitaker (Tex. Civ. App.) 27 S. W. 507; Staten v. Harris (Tex. Civ. App.) 239 S. W. 334.

Appellant urges further that Mrs. Little was not in any wise before the court and that the judgment entry against her individually was error. The appellee also makes a motion to dismiss as against Mrs. Little. Mrs. Little was not sued nor made a party to the suit by the pleadings of either the plaintiff or the defendant. She did not appear in the suit by any pleading on her part, so far as shown by this record. She does not appeal. Therefore, no judgment, as was done, should have been rendered against her. The judgment in this respect will be reformed so as to eliminate Mrs. Little from the judgment entry.

As so reformed, the judgment will in all things be affirmed.


author: LEVY, J. WILDSON, C. J.

text:
    In re MARIETTA STATE BANK.
    No. 3945.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 21, 1931.
    Rehearing Denied Feb. 5, 1931.

      John W. Goodwin, of Austin, and Davidson, Blalock & Blalock, of Marshall, for appellant.
    Carney & Carney, of Atlanta, for appellee.
   LEVY, J.

(after stating the case as above).

Article 462 (Rev. St.) provides:

“Compensation of counsel, employees and assistants, and all expenses of supervision and liquidation shall be fixed by the Commissioner, subject to the approval of the district court of the county in which said bank was located, if in session, or the judge thereof if in vacation. The compensation of special liquidation agents shall be the same as is provided by law for State bank examiners, and shall, upon the certificate of the Commissioner, be paid out of the fund of such insolvent bank in the hands of the Commissioner.”

Under this article, as may be seen, the “compensation” which. it iá contemplated “shall be fixed by the Commissioner, subject to the approval of the district court,” is, not “of special liquidation agents,” but “of counsel, employees and assistants.” By pri- or article 349 of the statute, the commissioner is given the authority to (1) “appoint one or more special liquidating agents to assist him to perform his duties,” and (2) “employ counsel and procure such expert assistance as may be necessary” in “the liquidating and distribution of the assets of such insolvent bank.” The above statute expressly fixes “the compensation of special liquidation ■agents” in amount “the same as is provided by law for State bank examiners.” And in this record it uncontrovertibly appears that the compensation in the form of salary which the commissioner fixed as payable to the two special liquidation agents of the bank did not exceed the sum provided by statute (Rev. St. art. 351, as amended by Acts 40th Leg. [1927] c. 289, § 1, Vernon’s Ann. Civ. St. art. 351) for state bank examiners. Therefore the court was not authorized to disallow one-half of the amount, as done, claimed as “salary of special (liquidation) agents” upon the ground that the same was “excessive,” meaning the usual or proper limit of the law in amount. The whole amount, instead of one-half of the $1,247.50 salary account, was allowable as a matter of pure law. The period of six months for liquidation of the bank and having two special liquidation agents was not unreasonable under the circumstances of the case, and the trial court does not so find.

The trial court finds, in effect, that the “expense” of the special liquidation agents is “excessive” to the amount of one-half of the claim of the commissioner, but the particular items thereof disallowed is not specified by the court. All the items in -the expense account except the items of $192.54 of Mr. Pink-ney, special liquidation agent, and $24.42 of the liquidation division, appear to have been questioned in the evidence. In the light of this fact, we must refer the court’s ruling to the questioned items only. His ruling in that respect could not In any wise be held by this court as a pure matter of law to be erroneous.

The court further finds, in effect, that the items of “automobile expense” and “extra labor” were “excessive” to the extent of one-half of the total amounts claimed. Some of the items of the accounts appeared very necessary and reasonable, and some of the items were questioned in the evidence as to amounts and the necessity therefor. The court’s ruling must be referred to the items questioned, and this court cannot, upon the whole evidence, say as a pure matter of law that the trial court legally erred in the findings made by him. It is believed that the phrase “subject to the approval of the district court,” as used in article 462, was intended, to mean that the account of the commissioner in respect to “expenses of supervi-sión and liquidation,” as well as “compensation of counsel, employees and assistants” (not including special liquidation agents), was open to revision or rejection by the court as the special facts and circumstances might warrant.

The creditors appearing herein are regarded as appearing as amicus curise. 2 O. J. p. 1322.

It is believed that the appellate court has jurisdiction to entertain this appeal. Article 462; Kidder v. Hall, 113 Tex. 49, 251 S. W. 497; Chapman v. Bant (Tex. Com. App.) 267 S. W. 690; State Banking Board v. Bank (Tex. Civ. App.) 13 S.W.(2d) 391, 392. An act done by the court under article 462 is intended to be a judicial act as distinguished from an administrative act.

The judgment is reformed so as to allow the approval of the entire amount of salaries to special liquidation agents making the entire account allowed in the sum of $3,-155.S9 instead of $2,532.14. The following portion of the judgment is entirely eliminated : “The said Banking Commissioner of Texas be and is hereby ordered to refund the Marietta State Bank said sum of $1,-0S1.07 from the office expense account of the Liquidating Division of the Banking Department of the State of Texas and that said office expense account be charged with the said sum of $1,081.07 so refunded and transferred.”

As so reformed, the judgment will’be affirmed.

WILDSON, C. J.

(dissenting).

By force of article 2249, R. S. 1925, as amended by Acts 40th Leg. (1927) c. 52 (Vernon’s Ann. Civ. St. art. 2249), a right to appeal exists only from a final judgment in a civil case. As I view it the. order here appealed from was not in such a case, and therefore a right to prosecute this appeal was not conferred by said article of the statutes. In that event, if such a right existed, it must have been by force of some other statute, and I know of none other. I think this court is without power to hear and determine the appeal, and that it should be dismissed.


text:
    SHAW, Banking Com’r, v. STRONG.
    No. 3955.
    Court of Civil Appeals of Texas. Texarkana.
    Feb. 7, 1931.
    Rehearing Denied Feb. 12, 1931.

      Clark, Harrell & Clark, of Greenville, for appellant.
    Bowman & Bowman, of Greenville, for appellee.
   WILLSON, C. J.

(after stating the case as above).

By force of section 16 of article 16 of the Constitution and article 535 of the Revised Civil Statutes of 1925, each stockholder in a banking corporation is liable for its debts “to an amount double the par value” of the shares he owns. By article 453 of said statutes the banking commissioner is authorized to collect debts due to an insolvent state bank in his hands for liquidation. By article 455 (as amended by Acts 40th Leg. [1927] c. 205, § 1, Vernon’s Ann. Civ. St. art. 455) said commissioner is authorized, if necessary to pay the debts of such a bank, to “enforce the individual liability of the stockholders.” And by force of article 454, said commissioner may, upon the order of the district court, or the judge thereof, of the county in which the bank is located, “sell or compound all bad or doubtful debts, and may sell the real or personal property” of such bank.

The question, and only question, presented for determination on this appeal may be stated as follows: Can the liability of a stockholder arising by force of the provisions in the Constitution and statutes above referred to be sold and assigned iby the banking commissioner?

We think the answer should be in the negative.

Combatting that view of the matter, appellant insists the levy by the banking commissioner of an assessment against a stockholder on account of the liability imposed by the Constitution and statutes creates a “debt” and argues that a debt is “property” and assignable. The answer to the argument is, we think, that if the liability is a “debt,” it is not to the bank, but to its creditors, and the power to sell which can be conferred upon the banking commissioner is to sell only property of the bank. The power of the banking commissioner as to the stockholders’ liability is only to enforce same and apply money derived from such enforcement to satisfying obligations of the bank to its creditors. State ex rel. Mothersead v. Kelly, 141 Okl. 36, 284 P. 65; American Exch. Bank v. Rowsey, 144 Okl. 172, 289 P. 726; Johnson v. Adams’ Estate, 138 S. C. 409, 136 S. E. 885; Bennett v. Wilkes County, 164 Ga. 790, 139 S. E. 566; Houston Nat. Exch. Bank v. Chapman (Tex. Civ. App.) 263 S. W. 929; Runner v. Dwiggins, 147 Ind. 238, 46 N E. 580, 30 L. R. A. 645; Ford v. Sauls, 138 S. C. 426, 136 S. E. 888; Conway v. Bank & Trust Co. (C. C.) 165 F. 822; Alsop v. Conway (C. C. A.) 188 F. 568; Tiger Shoe Mfg. Co’s, Trustee v. Shanklin, 125 Ky. 715, 102 S. W. 295, 31 L. R. A. (N. S.) 365. The case first cited above is like this one in many, if not all, of its aspects. Every ground of appellant’s contention here seems to have been urged in that ease as a reason why it should be held that the sale and assignment of a stockholders’ liability should be upheld, and it was held, properly we think, that the contention was not tenable on any of the grounds.

The judgment is affirmed.


author: BARCUS, J.

text:
    NAVARRO COUNTY LEVEE IMPROVEMENT DIST. NO. 8 v. OWENS.
    No. 957.
    Court of Civil Appeals of Texas. Waco.
    Oct. 30, 1930.
    Appellant’s Motion for Rehearing Denied Jan. 29, 1931. Appellee’s Motion Granted in Part.
    Callieutt & Upchurch and Davis, Jester & George, all of Corsicana, for appellant.
    J. C. Smith, of Fort Worth, and Richard & A. P. Mays, of Corsicana, for appellee.
   BARCUS, J.

' This is the second appeal in this case. For former opinions see 115 Tex. 263, 280 S. W. 532, and 281 S. W. 577 (Civ. App.). The facts are very similar to those presented on the first appeal. In 1920, appellant, under the provisions of the statutes, began the construction of a levee, which was completed in 1922. Appellee owned 1,100 acres of land, none of which was embraced in the levee district. Several hundred acres of appellee’s land was known as bottom land close by the levee district. While the levee was being constructed, appellee instituted this suit to recover permanent damages to his land occasioned by the construction of said levee, and for the loss of crops on certain portions of his land for the years 1921 and 1922. Appellant answered by a number of special exceptions, and specially alleged that the construction of the levee and digging of ditches in connection therewith had helped to drain appellee’s land, and further that, if appellee’s land was damaged, it was by ' other means and agencies than that occasioned by the building of the levee, to wit: “The oil fields of Powell, Rich-land and Currie and the flood waters from said two creeks, and that this defendant should not be held liable or responsible for the acts of others.” The cause was 'tried to a jury, submitted on special issues, and resulted in judgment being entered for appellee.

By its first four propositions, appellant complains at the action of the trial court in overruling certain special exceptions which it directed to appellee’s petition. There are no assignments of error in appellant’s brief complaining of the action of the trial court with reference thereto, and, in the absence thereof, this court is not authorized to review the action of the trial court thereon. Clonts v. Johnson, 116 Tex. 489, 294 S. W. 844.

Appellant’s propositions 5, 6, 7, 8, 9, and 10 relate to the submission by the court of issues 3, 4, 5, 6, 7, and 8, and are all briefed together. 'In response to said issues, the jury found that 77 acres of appellee’s- land were damaged by the levee improvement district, and that said land before the levee improvement was worth $100 an acre, and immediately thereafter was worth $5 an acre,, and that 250 acres of the uncultivated land of appellee were damaged, and that same was, before the levee improvement, worth $25 per acre, and immediately thereafter was worth $15 an acre. Appellant by said propositions contends that none of said issues should have, been submitted to the jury, because there was no evidence which.tended to show that any of appellee’s land had been permanently damaged by the construction of the levee district. We have carefully read the statement of facts, and think the evidence abundantly raises the issue of permanent damage. Said propositions are therefore overruled.

Under propositions 15 and 22, appellant complains- at the action of the court in refusing to instruct.the jury at its request that, if the jury found appellee’s land had not been damaged more than $4,500, they would answer all of the issues relative to permanent damage “no”; its theory being that the record shows that appellee had been paid said sum by the oil companies-, and that it would be entitled to credit for all money paid by the oil companies to appellee by way of damages. We overrule these propositions. The record shows that the levee district was completed in the fall of 1922. Whatever permanent damages appellee suffered matured at said time. The record shows -that there had not been at that time any oil development in that section, of the country. In 1923, oil was discovered in the Powell and Currie fields, and the waste oil and salt water from said oil fields drained into Richland and Chambers creeks. In 1927 the oil companies paid appellee $4,500 for an easem-ent over his land for waste oil and Salt waters that might flow from, or be occasioned by, the drilling of the numerous wells in said territory. Regardless of whether the oil companies paid too much or too little for said easement was Of no concern, under the pleadings and evidence, to appellant.

Under propositions 18 and 19, which are briefed together, appellant complains of the refusal of the trial court to submit special requested charges Nos. 2 and 3. Special charge No. 2, in effect, requested the court to instruct the jury that, if it believed some of the damages to appellee’s land was caused by other and independent causes than that occasioned by the building of the levee, and if the jury could not distinguish between the damage caused by the construction of the levee and damage caused from other causes, it should answer all of the issues relating to permanent damages “no.” And special charge No. 3, in effect, requested the court to instruct the jury that, if it believed that some of the damages to appellee’s land was caused by flood waters independent of the levee construction, it could not find any damages to plaintiff’s land other than those that were independently caused by the levee improvements which would not have resulted but for said levee improvements. These charges present entirely different questions, and it was not proper for them to be briefed together. We have, however, carefully examined and considered same. Special charge No. 2 was specifically held to be erroneous on the former appeal.

Instead of giving special requested issue No. 3, the trial court in its main charge instructed the jury:

“That, in the event you (jury) find that plaintiff, B. W. Owens, has suffered damage by reason of the construction of the levee improvements in determining the amount thereof you will take into consideration such damage only, if any, as plaintiff is shown by the evidence to have suffered by reason of such construction as distinguished from the damage, if any, that he would have suffered as a result of -the overflow, if any, regardless of and independent of the construction of said levee improvements.”

No objection was made by either of the parties to said special instructions. We think said instructions contained the essential elements of the requested charge asked by appellant, and, in the absence of any special exception thereto, was sufficient. Said propositions are overruled.

Under propositions 21, 23, 24, 25, and 27, which are briefed together, appellant complains of the refusal of the trial court to give its special requested charges 7, 9, 10, 11, and 12. Special requested charge No. 7, in effect, asked the court to instruct the jury that, if they believed appellee’s land would have been overflowed and damaged by waters from Richland creek and through its slough and from the hills- and from back water independent of the damage that may; have been occasioned by the construction of the levee, they would answer all of the issues relating to permanent damage “No.”

By special requested charge No. 9, it requested the court to instruct the jury, in effect, that, if it believed more water came from Bichland creek, through what is known as Blackmon’s slough, or from McCann Lake, or other channels from Bichland creek, than formerly did, and said water injured appel-lee’s land, appellant would not be liable therefor, unless the jury believed that the construction of the levee was the cause thereof.

By special requested charge No. 10, appellant asked the court, in effect, to instruct the jury that, if they believed appellee’s land would have been damaged independently of any effect of the construction of the levee, and they could not distinguish between the damage caused by the construction of the levee and other damage, they would answer all of the issues relating to permanent damages “No.”

By special requested charge No. 11, appellant, in effect, asked the court to instruct the jury that, if they believed the construction of the levee caused appellee damage, but it also believed that appellee’s land would have been damaged independently thereof, and if they could not distinguish between the damage caused by the levee and that which was caused from other causes, they would answer all of the issues relating to permanent damages “No.”

By special requested charge No. 12, appellant asked the court to instruct the jury that appellee was not entitled to recover any damage to his land or crops, except a small strip which it had taken for the purpose of cutting the relief channel to said levee.

It is apparent from the above that said charges present several different matters, and same cannot properly be briefed under one general proposition. We have, however, examined each of said charges, and do not think there is any error shown to the action of the •trial court in refusing same, and said propositions are overruled.

In response to special issues, the jury found that 4 acres of appellee’s land in 1921 and. 73 acres in 1922 failed to produce a crop as a result of the construction of the levee district, and that the reasonable rental value thereof for each year was $7.50 per acre. The only evidence offered as to the rental value of said land for said years was given by the witness J. 0. Hagler and appellee. They each testified, in effect, that they were acquainted with the bottom land of appellee, and that from their knowledge of said land, based on one-third of the grain and one-fourth of the cotton crops that had been produced on said land during former years, the rental value thereof for the years 1921 and 1922 would be from $7.50 to $15 per acre. Appel-lee further testified that he had, during former years, received an average of from $12.-50 to $15 per acre rental on the third and fourth basis. Appellant objected to all of the above testimony on the ground that same was not the correct measure of damages, and 'that the rental that had been received on the farm during former years was not the standard by which to measure or determine the amount of rental that said land would have produced. for the years 1921 or 1922. Under several assignments and propositions, appellant complains a't the action of the trial court in overruling its objection to said testimony and in permitting said witnesses to testify to said facts. We sustain these propositions. Appellee testified that he was unable to state how much corn or cotton was made on his bottom land in 1921 or 1922. Appellee made no effort to show whether 1921 and 1922 were normal crop years; neither did he attempt to show what crops he would have made’ on the land in controversy but for the overflow caused by the levee district. No attempt was made to show how much of said land was planted in grain or how much in cotton for either of said years. Neither was there any 'attempt to show the amount produced by any other crops in that vicinity for either of said years. Clearly, appellee would not be entitled to recover the amount of rent said land had produced on the third and fourth basis during former years. His recovery, if any, should have been limited to his portion of the amount said land would have produced for said years under conditions which would have existed, climatic and otherwise, if said levee improvements had not been constructed. In order for a jury to determine said fact, it was necessary for appel-lee to show the number of acres planted in cotton and grain and what same would have produced for each of said years but for said levee improvement.

'The judgment of the trial court is reversed, and the cause remanded.

On Motion for Kehearing.

Appellee in his motion for rehearing asks that, in event we do not grant said motion, he be allowed to file a’ remittitur of $462, being the amount of rent recovered by him in the trial court, and that the judgment of the trial court except as to said rents be in all things affirmed. We find from the record that ap-pellee recovered $577.50 as rents, and that he remitted in the trial court $115 thereof, leaving $462 rents embraced in said judgment. Since we overruled all of appellant’s assignments of error in the original opinion except •those relating to the recovery by appellee of said rents and since we still adhere to our original opinion, appellee’s motion for a rehearing is overruled, except that portion •thereof in which he requests he be permitted to, and has offered to, file a remittitur of $462, which is hereby granted. Our judgment heretofore entered reversing the judgment of the trial court is set aside. The judgment of the trial court in so far as it allowed a recovery for the rents is reversed, £nd, appellee having filed a remittitur of said rents, to wit, $462, the judgment .of the trial court is reformed by eliminating said amount therefrom, and judgment is here rendered that ap-pellee recover of and from appellant the sum of $9,840, with interest from December 12, 1929, at 6 per cent, per annum, the date of said judgment in the trial court, and all costs of the trial court; appellee to pay costs of appellate court. In all other respects, the judgment of the trial court is affirmed.


author: JONES, C. J.

text:
    MIDLAND BUILDING & LOAN ASS’N et al. v. SPARKS CHAPEL COLORED M. E. CHURCH IN AMERICA et al.
    No. 10934.
    Court of Civil Appeals of Texas. Dallas.
    Feb. 7, 1931.
    Vern D. Adamson, of Marshall, for appellants.
    J. H. Synnott, of Dallas, for appellees.
   JONES, C. J.

This suit was instituted by appellees, Sparks Chapel Colored M. E. Church in America, G. W. Watson, George Tates, H. Jackson, H. R. Johnson, M. Bigins, R. B. Bogan, and J. J. Carson, trustees of said church, and A. B. Johnson, pastor of the church, and F. M. Fountain, presiding elder of the district to which the church belongs, acting for and on behalf of said church, the Quarterly Conference, and the Church Extension Board of the Colored M. E. Church in America, against appellants, Midland Building & Loan Association and Yerne D. Adamson. The purpose of the suit is to cancel four deeds of trust and certain notes secured by liens created by the respective deeds of trust on the local church property; to have payment of usurious interest declared and for judgment in favor of appellees for double the amount of such usurious interest alleged to have been paid; to enjoin appellants from executing the power of sale, authorized by each deed of trust, and for a temporary writ of injunction to restrain appellants from making a threatened sale of the church property under the power of sale in the deeds of trust, until the final determination of this suit. The court granted a temporary writ of injunction upon a hearing, and appellants have duly perfected an appeal from such order to this court.

In the year 1928, and previous thereto, the congregation of the Sparks Chapel Colored M. E. Church in America was occupying a church building on a portion of the property in controversy, .and held the services of their church therein. Title to property was held by the said church in the manner local churches are permitted to take title under the constitution and laws of the M. E. Church in America. The church building had become old and dilapidated, and was badly in need of repairs. Certain members of the local church held the office of trustees and in this capacity had such possession and control of the property as is given them by the said constitution and laws. A. E. Johnson had been assigned by the Annual Conference as pastor of such church and in 1928 held such charge.

It was desired by the pastor and trustees 10 improve and remodel the church building and two small residences located on the church property, and in possession of the trustees, in the same manner in which they held the church property. Plans and specifications were prepared and drawn up, and appellant loan company was solicited for a loan in order to secure the funds necessary for such improvements. As a result of these negotiations, the loan company agreed to advance the necessary money for the improvements and to evidence same by promissory notes representing, in the aggregate, the amount of money to be advanced. These notes were executed by the trustees in their capacity as such trustees, and their payment secured by four separate deeds of trust liens on the church property executed by the trustees.

There was existing at the time a mechanic’s lien in favor of Booth Lumber Company, amounting to approximately $1,700. This mechanic’s lien had been executed by the then trustees of the church, and secured by a deed of trust executed by such trustees. The money borrowed from the loan company was sufficient in amount to take up this prior lien and to pay for all of the improvements made, such amount being approximately $9,000. The loan company took from the Booth Lumber Company an assignment of their lien and note, extended the note, and another deed of trust was executed to the loan company to secure this extension note.

The incumbrance on the church property by these respective deeds of trust was created without authority from the Quarterly Conference of such church, the presiding elder, or any church authority other than the trustees and pastor. The notes and deeds of trust provided that the debt should be paid and the lien discharged by monthly payments with the amount of such payments specified. These instruments also provided that, if default in these monthly payments should be made when they became due, the holder of the notes could declare all of the indebtedness due. The deeds of trust conveyed the property to a trustee, and each vested the trustee with a power of sale in case default in payment should be made. Appellant Verne D. Adamson is the substitute trustee. On the face of the instruments, the default of appel-lees gave to the holder of the indebtedness the ■ power to declare same due and vested in the trustee the right to sell the property to pay the indebtedness. The trustee, after due notice, was advertising the property for sale when this suit was instituted and the temporary injunction, restraining such sale, was issued.

This record discloses that the constitution and by-laws of the ■ Colored M. E. Church in America are published in a church book known as “The Discipline.” The Discipline forbids the incumbering of any church prop-. erty by the trustees, the pastor, or the local congregation, except when authorized by a Quarterly Conference, at a session when the presiding elder of the district is present. The record also discloses that no authority was-given by the Quarterly Conference to appel-lees for incumbering this property with the various deeds of trust liens, for borrowing the money, or for remodeling the church. The record makes it plain that the transaction that culminated in the borrowing of the money, in- the execution of the notes and the deeds of trust, was the independent action of the trustees and pastor. The law of the Colored M. E. Church in America, as shown by The Discipline, declares that any debt incurred, or any pretended lien attempted to be fixed on church property, without the authority of the Quarterly Conference, given at a session when the presiding elder is present, shall be null and void.

This record also discloses that probably usurious interest has been charged by the loan company and paid by appellees, in that, ' it is shown that the notes bear the maximum rate of interest allowed, and that about $800 on the amount of the loan, as shown by the notes, was never paid to appellees.

The issuance of a temporary writ of injunction is merely a provisional remedy allowed by the court, before the trial of this case on its merits, for the sole purpose of preserving the subject-matter of the controversy as it existed at the time the suit was instituted. As a provisional remedy, the function of the temporary injunction in the instant case is to prevent appellants from selling the property until the trial of the suit, which challenges the right to sell, has determined the issues of law and fact made by ap-pellees’ petition. The issuance of the temporary writ of injunction did not determine the issues of law or fact involved in the main suit, and they are left as they existed prior to the issuance of such writ.

In any particular case the issuance of a temporary writ of injunction rests largely in the discretion of the trial court, and his action, in either granting or refusing to grant such writ, cannot be disturbed, unless it be made to appear that the discretion thus lodged was abused by the -order made. So, in the instant case, the sole question for review is: Did the trial court abuse its discretion in granting this writ and thereby maintaining the existing status of the property. If the petition filed by appellees in the suit alleges no cause of action against appellants, in tliat its allegations fail to show that appellees have alleged a valid defense to the sale of their property under the -deeds of trust, or if the petition does allege a cause of action, but, at the hearing, the evidence failed to disclose any issuable fact to sustain such cause' of action, then, in either event, the trial court abused its discretion in granting the temporary writ. On the other hand, if the petition does allege a cause of action and the hearing shows the existence of evidence tending to sustain it, then there was no abuse of discretion by the trial court in issuing the temporary writ.

In our opinion, the petition states a cause of action for equitable relief against appellants, and also states a cause of action for legal relief against them, because of the usurious interest exacted and collected. It is likewise our opinion that the evidence adduced at the hearing shows that a substantial controversy as to appellees’ rights exists between the parties in respect to the equitable relief sought by appellees in the final trial of this case. The record discloses that the trustees of the local church are forbidden by law of their church to encumber church property with a lien, unless such trustees are authorized to do so by an act at a session of the Quarterly Conference with the presiding elder present. The record further discloses that the trustees in the execution of these notes and deeds of trust had' no such authority of the Quarterly Conference, but acted independent of such church body. The record also discloses that appellant loan company had no actual notice of this limitation placed on the powers of the trustees of the local church by church law. It is general law that the trustees of a religious society are intrusted with the management of its temporal affairs, and hold possession of its property for the use of the persons who constitute the membership of such church, under the constitution, usages, and laws of their organization. 23 R. C. L. 439. Appellant loan company knew that it was contracting a loan with the trustees of the local church, and there is raised at least a serious question, to the effect that the loan company is charged with the duty of making-inquiry as to the powers of such trustees to deal with the property in a manner that might result in the loss of the property for the use of the members for church purposes. An issue is clearly made by the evidence that appellant Adamson, as trustee, was in process of selling the property to pay in part a usurious debt. As there is thus shown to exist a substantial controversy between the parties to this suit, as to the right of appellants to sell the property for the purposes for which such sale was attempted, the court did not err in granting the temporary writ of injunction, in order to maintain the status of the. . property until the final trial of the suit. City of Farmersville v. Texas-Louisiana Power Co. (Tex. Civ. App.) 33 S.W.(2d) 271, 273.

Appellants filed an able brief, which, in the main, assumes that the granting of the temporary writ of injunction decided the issues of the main case against them and the many assignments of error relating to this fact are not material on the issues raised by this appeal, and have not been discussed. It necessarily follows that, in -our opinion, judgment of the lower court should be affirmed, and it is so ordered. ^

Affirmed.