author: PARKER, Justice.

text:
    REPUBLIC NATIONAL BANK OF DALLAS et al., Appellants, v. Charley H. STETSON et ux., Appellees.
    No. 6589.
    Court of Civil Appeals of Texas. Beaumont.
    Aug. 13, 1964.
    Rehearing Denied Sept. 18, 1964.
    Second Motion for Rehearing Denied Oct. 7, 1964.

      James L. McNees, Jr., Dallas, W. R. Choate, Houston, Bradford Pickett, Liberty, Malcolm Cohn, Cleveland, for appellants.
    Zbranek & Friend, Liberty, for appellees.
   PARKER, Justice.

This suit in trespass to try title was filed by the plaintiffs on November 4, 1959, with an amended petition filed April 6, 1961, suing the defendants in the latter pleading for 58.932 acres within a fenced enclosure in the Martinez League No. 2, Abs. No. 65, Liberty County, Texas, and a tract of 19.970 acres within a fenced enclosure in the Martinez League No. 2, Abs. No. 65, and the Cope Survey, Abs. No. 154, Liberty County, Texas. Plaintiffs were Republic National Bank of Dallas as independent executor and trustee of the Estate of Wirt Davis, Deceased, Wirt Davis, II, Mrs. Patricia Davis Beck and husband, Henry C. Beck, Jr., and Mrs. Camilla Blaffer and her husband, John H. Blaffer, hereinafter referred to as in the trial court. The defendants were Charley H. Stetson and wife, Mrs. C. H. Stetson, hereinafter referred to as defendants as in the trial court. Defendants answered formally, specially pleading the ten year statute of limitations; by way of cross action, defendants as cross-plaintiffs affirmatively asserted the ten year statute of limitations to their two separate enclosures, describing such enclosures by field notes as also described in plaintiffs’ amended pleading, plus enough additional acreage to aggregate 160 acres. Cross-plaintiffs also alleged a parol gift of such 160 acres by cross-defendants’ predecessor in title, Wirt Davis, deceased. By supplemental petition plaintiffs plead the three and five year statutes of limitations as to the enclosures described in their amended pleading and the lands described in defendants’ pleadings. It was stipulated that unless defendants had title by limitation and/or parol gift that the plaintiffs had a record title to the Martinez League No. 2, Abs. No. 65, and the Cope Survey, Abs. No. 154, in Liberty County, Texas. Trial was to a jury. The jury answered special issues in favor of defendants on their claim of title under the ten year statute of limitation as to their enclosures. In answer to Special Issues Nos. 2, 3, and 4, the jury found that: (a) Wirt Davis, in 1940, made a parol gift to Charley H. Stetson of such enclosures, plus sufficient additional acreage to aggregate 160 acres, (b) after said gift was made, that Charley H. Stetson had possession of said premises with the consent of said Wirt Davis, or his agents, and (c) after said gift was made, that the said Charley H. Stetson made permanent and valuable improvements on said premises in reliance on said gift with the knowledge of the said Wirt Davis, Sr., or his agents. After the jury returned such verdict, the court entered an interlocutory order directing the County Surveyor of Liberty County to select and make an accurate survey of such 160 acres to include the two enclosed tracts with instructions to equitably separate said 160 acres from the remainder of the lands in said Martinez League and the Cope Survey. The Surveyor, having performed such duties, made his report on the 7th day of March, 1962, and filed it on March 8, 1962. On the basis of the survey so made, judgment was entered for the defendants for the title to and possession of such 160 acres so surveyed as against the original plaintiffs and cross-defendants.

This opinion deals with plaintiffs’ points in reverse order to some extent We consider such points in the following order: Points 6 and 7; Points 3, 4 and 5; Point 8 ; and, then, Points 1 and 2.

By their Point 6, plaintiffs assert that the trial court erred in submitting Special Issue No. 2 and in refusing to enter judgment for plaintiffs on their record title, plaintiffs contending there was no evidence to support the submission of such issue and the jury’s answer thereto. Point 7 is identical except the contention is there was insufficient evidence. In the answer to Special Issue No. 2, the jury found'that Wirt Davis in 1940 made a parol gift to Charley Stetson of his enclosures containing some 79 acres plus sufficient additional acreage to aggregate 160 acres.

In the brief for appellants .(plaintiffs) they state: “It is not controverted that .defendant Charley H. Stetson has been in . possession of two enclosures totaling, approximately 79 acres * * * since approximately 1921.”

In 1940 Wirt Davis was familiar with lands and the laws relating to lands. He was a landowner and an attorney. Stetson knew a man could recover 160 acres, including his enclosures, under the limitation laws without a deed. Time and again, Stetson testified: That in 1940 Wirt Davis gave him his home, the land he was entitled to recover by limitation, and of telling Davis that he had title by limitation; that Davis admitted this, and gave the land to Stetson; and that as part of the gift, Davis said he would pay the taxes, which he did.

Stetson’s counsel asked him the following question:

“Q. Let’s clear up one thing, Mr. Stetson. In this conversation where you say that Wirt Davis, Sr., gave you this home place, how much acreage was that?
“A. 160 acres.”

Such was the acreage that Stetson -considered he and.-Davis were discussing.,-, ..' ..a.:

Plaintiffs contend that “the figure of 160 acres represents Mr. Stetson’s conclusions, and not Mr. Davis’ purported gift” and, accordingly, “constitutes no evidence whatever that a gift of 160 acres was made.” This contention of plaintiffs is based upon the following questions and answers upon cross-examination, after Stetson had stated the gift was of 160 acres:

“Q. I ask you just a simple question: Presuming that he did not give it to you at that time, I think you have testified now on this trial that he gave it to you the first time he ever saw you. ■
“A. Yes, sir.
“Q. And said ‘Take that 160 acres, Charley.’
“A. He didn’t tell me 160 acres. He just told me, ‘Charley, I know that is your home, I want you to have it.’ * * * ”.

The record reflects that Stetson and Davis were talking about the amount of land they both considered Stetson had acquired by limitation under Art. 5510, Vernon’s Ann. Civ.St., that is, 160 acres. Stetson was the possessor. Davis was the person having right of action. From such last answers of Stetson, plaintiffs argue that Stetson denied that he and Davis discussed any specific amount of acreage, and, therefore, Wirt Davis did not, in any manner, tell Stetson he was giving him 160 acres. The jury construed this testimony of Stetson’s to mean that Davis gave him the acreage including his enclosures that Art: '5510 would- authorize Stetson to hold, i. e., 160 'acres. Such is not an unreasonable construction of the evidence. " ' ■

There being probative evidence .support- , ing the answer of the jury to Special Issue No. 2, plaintiffs’ Point 6 is overruled.

' From 1940 until Davis’ déáth in '1945, Richards, the agent of Davis; never tried to '• get an acknowledgment of tenancy from Stetson, although he did fronrothers. Rich--, ards knew Davis to be a man of his word. Richards reported activities on these lands to Davis from 1940 to 1945. During this period, Richards saw the valuable improvements Stetson placed upon the property. Stetson spent in excess of $1,000.00 on such improvements after Joe Soloman paid one dollar per acre for adjoining land. Under similar facts of long possession, Davis gave another man land on said surveys. The foregoing facts are consistent with the direct evidence of the gift.

Considering all the evidence bearing upon the answer of the jury to Special'Issue No. 2, both favorable and unfavorable, we hold that the direct evidence of such gift, the other facts and circumstances established by the evidence and the inferences which can reasonably be drawn therefrom, support-the jury’s , ultimate conclusion embodied in their answer to such Special Issue. Such jury answer is. not clearly wrong and unjust. Plaintiffs’ Point 7 is overruled.

Plaintiffs, in their Point 3, assert as á matter of law, they matured title to the lands' in controversy under the. three and five year statutes of limitation. Alternatively, in their Points 4 and 5, plaintiffs assert that the trial court erred in refusing to submit their requested issues inquiring of the jury as to such -statutes of limitation. ,Tt was ■ Stipulated that-.plaintiffs had record title to the.lands in controversy “subject to the rights and the claims of these defendants and cross-plaintiffs to recover said premises under their.claim of title by virtue- of the ten year ’statute of. limitation and/or parol -gift, all, in. .accordance with the pleadings of the said parties, and subject to the rights and claims of the plaintiffs and cross-defendants to defeat any title established by defendants and cross-plaintiffs under the-plaintiffs and' cross-defendants’ claim of^title by virtue of the three and five- year ^statutes of limitation, all as. set forth •in;;their pleadings.”

•Full title to the land'wiihin the enclosures whs"’acquired from Wirt Davis'By Stetson both by limitation and by gift. That part of the 160 acres recovered by Stetson outside of the enclosures was acquired by Stetson only by virtue of gift from Wirt Davis in 1940. After title was divested out of Wirt Davis as to the lands in controversy, he never obtained any deed or conveyance of the lands in controversy from anyone. After the death of Wirt Davis in 1945, the plaintiffs have been claiming the land under Wirt Davis. They have not obtained any deed or conveyance entitling them to claim the land under the three year statute of limitation or the five year statute of limitation. The only instruments plaintiffs have obtained are the two instruments from Charley Stetson. The first was dated March 28, 1947, but was not filed for record until December 19, 1955, and is an acknowledgment of tenancy. The second instrument was signed by Mr. and Mrs. Stetson on November 5, 1954, and had no description of any land in the instrument at the time of the signing of same. It conveyed no land and plaintiffs do not contend it conveyed any land. It was not of record five years before the instant suit was filed. The acknowledgment of tenancy by Charley Stetson in 1947 was obtained many years subsequent to his acquiring all title to the lands in controversy. It did not have the effect of divesting title out of Charley Stetson. After title.to the lands.in controversy was divested out of Wirt Davis, he and- the plaintiffs claiming under him after his death in 1945 idid. not have title or- color -of title thereto..; Plaintiffs. did not have or duly register, any deed, under which, plaintiffs could claim such 160 acres given to Stetson by Wirt Davis in 1940. Art. 5507 and Art. 5509, V.A.C.S.; Burton’s Heirs v. Carroll (1903), 96 Tex. 320, 72 S.W. 581, opinion by Brown: Held. on page 583:

• “We conclude that the effect of limitation was to: divest- the naked legal title, which the plaintiffs in error had under the patent, out of them, and to vest it in the defendants in error, who held the equitable title; and the plaintiffs in error occupy just the same position as if they had parted with their legal title by conveyance to the owners of the equitable title. They had no title to the land; therefore their three-years possession did not have the effect to bar the claim and right of the defendants in error.”

As to the lands in controversy, Wirt Davis had disposed of his title thereto by giving such lands to Stetson in 1940. Those claiming under Wirt Davis, now deceased, could not use the title Wirt Davis theretofore had to acquire title under the three year statute of limitation or the five year statute of limitation. There can be but one regular chain of transfers from the sovereignty of the soil. When the holder of record title makes a conveyance of whatever title he had, such former owner no longer connects with the sovereignty of the soil. Grigsby v. May, 84 Tex. 240, 254, 19 S.W. 343; Burnham v. Hardy Oil Co., 108 Tex. 555, 195 S.W. 1139; Cagle v. Sabine Valley Timber & Lumber Co., 109 Tex. 178, 202 S.W. 942, 6 A.L.R. 1426, and cases cited therein. Points 3, 4 and 5 are overruled.

Plaintiffs’ Point 8 is as follows:
“Defendants and cross-plaintiffs, having wholly failed to meet their burden of proving the quantity, location and description of any land purportedly orally given to defendant Charley H. Stetson by Wirt Davis, deceased, in 1940, the trial court erred in directing the County Surveyor arbitrarily to select and survey out 160 acres and in entering judgment for defendants and cross-plaintiffs for the 160 acres of land so selected by the County Surveyor.”

In our discussion of Points 6 and 7, it will be seen that the jury, by its answers, found that Wirt Davis in 1940 gave Charley Stetson 160 acres to include his improvements as though he had matured title by limitation under Art. 5510, V.A.C.S. In such cases, it is the duty of the court to order a survey and equitably set apart the improvements and the additional land needed to make 160 acres. Kirby Lumber Co. v. Conn, 114 Tex. 104, 263 S.W. 902; Wiggins v. Houston Oil Company of Texas, Tex.Civ.App., 203 S.W.2d 252 (writ ref. n. r. e.).

Art. 5510, V.A.C.S., does not specifically authorize the District Court to segregate and partition the 160 acres, including the improvements out of a larger tract of land. The District Court is a court of general jurisdiction. The Supreme Court of Texas, in Kirby Lumber Co. v. Conn, supra, states the reasons why the District Court should order a survey and fairly partition the property. The power so to do is not of a statutory origin, but is authorized because a district court is a court of general jurisdiction, and, as the court having jurisdiction of land title suits, has such authority.

There is no difference in the meaning of the language of Art. 5510, V.A.C.S., providing the recovery of an adverse possessor “shall be construed to embrace not more than one hundred and sixty acres, including the improvements” and the meaning of the answer of the jury to Special Issue No. 2 finding that Davis gave Stetson “such enclosures plus sufficient additional acreage to aggregate 160 acres.”

Since we are dealing with a description of land in this case with the same meaning as the description contained in Art. 5510, V.A.C.S., the District Court was authorized to appoint a surveyor and partition said 160 acres from the remainder of the larger tract, exactly as the District Court does in limitation suits. Louisiana & T. Lumber Co. v. Kennedy, 103 Tex. 297, 126 S.W. 1110, 1112.

Plaintiffs’ Point 8 is overruled.

Points 1 and 2 of appellants’ brief (plaintiffs) are:

Point One
“As a matter of law, Defendants were estopped by the recitals of their tenancy agreements, as well as by their conduct, to deny the truth of such recitals and to assert a limitation title purportedly matured prior to 1947 or a parol gift purportedly made •prior to 1947, and the trial court erred in refusing to so hold and in refusing to enter judgment for plaintiffs on their record title.”
Point Two
“Defendants and cross-pláintiffs are hound by the contractual recitals of the tenancy agreements of March 28, 1947, and of November 5, 1954, and are estopped to deny the truth thereof, since they neither sought to have such agreements canceled nor reformed in this suit, and same remain binding and in full force and effect, and the . trial court erred in refusing to so hold and in refusing to enter judgment for plaintiffs on their record title.”

At the time these instruments were made, Stetson had title to the lands in controversy for many years. The recitation in such instruments could only he considered by the jury in passing upon the question of whether the possession theretofore held by Stetson had been adverse, but same could have no other effect. Brown v. Fisher (Civ.App.), 193 S.W. 357-361 (writ ref.). As stated in Urschel v. Garcia, 164 S.W.2d 804 (Tex.Civ.App.1942, err. ref. w. o. m.), testimony disclaiming ownership if limitation title had already been perfected “could not be given effect to divest that title out of him. This is elemental."

A disclaimer of ownership by person owning title, whether acquired by limitation or by conveyance, could not be given effect to divest title when such disclaimer was not of itself a conveyance.

After the gift by Wirt Davis to Stetson, Charley Stetson married his present and only wife, Velma Stetson. In 1940, and after such marriage, she, with her children, moved onto the lands in controversy to live with her husband, Charley Stetson. They have lived there ever since. It has been their home. All the elements of a homestead are present. Anyone looking at the photographs of the home in connection with the ’ evidence would not believe any statement to the effect that it was not the homestead of Charley Stetson and wife, Velma. The undisputed evidence shows that, as a matter of law, part of this 160 acre recovery by Stetson was the homestead of Stetson and ■ wife, even though some 109 acres of the Smiley Survey was designated, for tax purposes, as homestead property. A rural homestead is limited to 200 acres, which may be in one or more parcels with the improvements thereon. Art. 3833, V.A.C.S.

It has been universally held that the husband’s conveyance of the homestead, in which the wife did not join, is ineffective until such homestead is abandoned. Art. 5510, V.A.C.S.; Southwestern Lumber Co. of New Jersey v. Evans, Tex.Civ.App., 275 S.W. 1078 (writ dism.). The 1947 instrument signed by Charley Stetson only was ineffective as a conveyance, did not purport to be a conveyance, and could not have the effect of conveying title by estoppel. The 1954 instrument signed by Mr. and Mrs. Stetson had no description of any land in the instrument at the time of signing. Plaintiffs do not claim it was a conveyance. The representations made to Stetson by plaintiffs’ agents, Wilson and Richards, at the time each instrument was signed, were the subject of controversy. Stetson testified they were not supposed to deal with his lands. If Velma Stetson knew of the 1947 acknowledgment of tenancy and acquiesced therein, plaintiffs would not have secured any title thereby to her homestead under our laws, which forbid the sale of a homestead without the signature and privy acknowledgment of the wife. Further, plaintiffs could not mature title by limitation under any such instrument. Lumpkin v. Woods, Tex.Civ.App., 135 S.W. 1139 (writ ref.). Disregarding the question of homestead, the same conclusion would be obtained. Assuming that Stetson made false representations through the instruments of 1947 and 1954, no injury has occurred to innocent third parties. No one has acted or failed to act in full faith and reliance on such representations to their injury.

When the jury found in favor of Stetson on his claim under the ten year statute of limitation, they considered all these recitals in the 1947 instrument. These recitals were contradicted by Stetson’s testimony upon the trial. The jury weighed the recitals against Stetson’s testimony upon the stand and found in favor of Stetson. This, the jury had a right to do. United States Fidelity & Guaranty Co. v. Carr, Tex.Civ.App., 242 S.W.2d 224 (writ ref.).

Since the 1947 and 19S4 instruments were not conveyances, no necessity existed to procure cancellation or reformation of them as affidavits, as contended by plaintiffs. The jury had these instruments before it to consider. The jury disregarded such recitals.

Plaintiffs’ Points 1 and 2 are overruled.

Judgment of trial court is affirmed.

ON MOTION FOR REHEARING

In our original opinion, we stated the instrument of November S, 1954, conveyed nothing, and that plaintiffs did not contend it did convey anything. In Paragraphs 14, 15, and 16, plaintiffs’ (appellants) Motion for Rehearing, they contend that it was a conveyance, and that they had always •so contended.

Richards was the Notary as well as the ■agent of plaintiffs in presenting this blank instrument to the Stetsons. He admitted he did not tell the Stetsons it was a deed, but instead represented to them that it was a tenancy agreement. Further, he admitted that no land was described in the instrument at the time Stetson and his wife signed it. Having obtained their signatures, Richards left the Stetsons. Later on and out of the presence of the Stetsons, Richards testified that he altered the instrument inserting everything written in pen and ink including the land description. Richards did not testify that the Stetsons authorized him to fill in such land, description.

Stetson testified that at the time of signing the 1954 blank instrument, Richards represented that such instrument did not apply to Stetson’s home place, the land involved here. Nothing in this record supports plaintiffs’ assertion that the Stetsons authorized Richards to write in the description now found in such instrument dated November 5, 1954. Plaintiffs admitted that “the handwritten specific description was filled in subsequent to its execution”.

“Grant, assign and convey,” are words of conveyance. The printed portions of the instrument contain: “the undersigned does hereby grant, assign and convey all his right, title and interest in all lands owned or claimed by the undersigned lying within the boundaries of the tract above identified to the heirs and legal representatives of the estate of the late Wirt Davis.” But when signed by the Stetsons, there was no “tract above identified” therein. The blank instrument did not even designate the county where the undescribed land was situated.

No authority is cited holding such an instrument under such facts conveys any property. If it had contained an adequate description when signed and properly acknowledged, it would have conveyed the “tract above identified”. Houston Oil Company of Texas v. Moss, 155 Tex. 157, 284 S.W.2d 131 (1955). Since it described no land, it conveyed no land. Since Richards was not authorized to insert the description he inserted after the Stetsons signed, there was no question of fact to submit to a jury.

In Reserve Petroleum Co. v. Hodge, 147 Tex. 115, 213 S.W.2d 456, 7 A.L.R.2d 288 (1948), it was necessary to get a jury finding that a deed on printed form, when executed, contained no description of the land before it could be held void. As it is undisputed that there was no description of the land in the 1954 blank instrument, there is no question of fact to be determined by a jury. Also, it is undisputed that Richards was not verbally authorized by the Stetsons thereafter to insert a description, if indeed he could have been validly authorized so to do. So, the holding in Reserve Petroleum Co. v. Hodge, supra, applicable here is: “Because they contained no description of the land the two mineral deeds, when delivered, were inoperative, * * There being no ratification of this 1954 blank instrument by the Stetsons, and the Stetsons not having abandoned their homestead, the other holdings in Reserve Petroleum Co. v. Hodge, supra, are not applicable.

The principle applicable to this 1954 paper is well stated in Miller v. Alexander, 13 Tex. 497 (1855):

“If on the production of such instrument it appears to have been altered, it is incumbent on the party offering it in evidence to explain this appearance. For the instrument is supposed to have been intended to express the agreement of the parties, solemnly adopted as such, and attested by the signature of the party engaging to perform it. Any alteration, therefore, which makes it speak a language different in effect from that which it originally spoke destroys its identity and its legal virtue, for it is no longer the agreement which the parties undertook to perform.
“An agreement to be binding must have the assent of both of the contracting parties; and, consequently, cannot have legal validity if altered by one party without the concurrence of the other. Hence, every alteration on the face of the instrument which evidences the agreement renders it suspicious; and this suspicion the party claiming under it, is ordinarily held bound to remove. * * * ”

This suspicion was not removed by plaintiffs.

Murphy v. Bain, 142 S.W.2d 598, 601 (Tex.Civ.App.), concurs with the above in this language:

“In 2 Am.Jur. 608, para. 16, the author says: ‘A material alteration of an instrument by a party thereto will vitiate it, though made with no fraudulent intent whatever and with an entirely honest motive. The law holds the instrument void not because the thing done is actual fraud, but because a contrary rule would open the door for fraud, and because the alteration changes the legal identity of the paper and causes it to speak a language differing in legal effect from that which it originally spoke.’
“See also 2 Tex.Jur. page 963, para. 3, page 702, para. 11.
“This assignment we sustain.”

For other authorities holding that such an instrument is void, see Southern Pine Lumber Co. v. Arnold, Tex.Civ.App., 139 S.W. 917, 922 (n. w. h.); Lowe v. Henson, Tex.Civ.App., 190 S.W.2d 423, 426 (n. w. h.). On page 426 of Lowe v. Henson, supra, it was held:

“We also agree with the trial court’s conclusion of law. The material alteration of a written instrument made by one of the parties to it after execution and without the authority or consent of another party to it avoids the instrument as to the nonconsenting party. Baldwin v. Haskell Nat. Bank, 104 Tex. 122, 133 S.W. 864, 134 S.W. 1178; Matson v. Jarvis, 63 Tex.Civ.App. 376, 133 S.W. 941, writ of error refused; Pope v. Taliaferro, 51 Tex.Civ.App. 217, 115 S.W. 309.”

The material alteration of the instrument made by plaintiffs’ agent after being signed by defendants was without the authority or consent -of defendants.- So- it is void.

The foregoing disposes of all arguments plaintiffs have presented in their Motion for Rehearing in a different manner than in their original presentation.

Proper disposition was made of this suit in the original opinion. The Motion for Rehearing is overruled. Motion for oral argument is refused.


source: Caselaw Access Project

author: McDONALD, Chief Justice.

license: Public Domain

text:
    L.T. STOVALL, Appellant, v. T. J. POOLE, Jr., et al., Appellees.
    No. 4260.
    Court of Civil Appeals of Texas. Waco.
    Oct. 1, 1964.
    Rehearing Denied Oct. 22, 1964.
    Goff & Koonce, Angleton, Pollan & Nicholson, Rosenberg, for appellant.,
    Harris, Salyer & Huebner, Bay City, Davis, Kee, Mason & Lee,, Angleton, Carl Fink, Jr., Houston, for appellees.
   McDONALD, Chief Justice.

■ This is an appeal from a summary judgment that plaintiff take nothing. Plaintiff Stovall sued defendants Poole, et al, alleging that Poole owned certain oil lands and interests in Brazoria County; that a well had been commenced on such properties but had shut down at 4300 feet due to lack of finances; that defendant Poole orally contracted with plaintiff that if plaintiff would find someone to complete the well as a producer of oil and gas, for 60% of the working interest in the well, that defendant would pay plaintiff a “sum equal to the value of V32 of the oil and gas produced and to be produced from said well and others on said properties * * *, or would assign him a •142 overriding royalty in such minerals to be produced from said well and other lands * * *_»

Plaintiff alleges that he succeeded in finding defendant Scurlock Oil Company to complete the well; and Scurlock did complete such well; and that defendant Poole refused to pay plaintiff in money for the value of %2 of the production or to assign plaintiff an overriding royalty of %2 of the oil and gas produced from the well and property.

Plaintiff prays for judgment for %2 of the value of all oil and gas produced and to be produced from the property, and prays that the lands and all production therefrom be impressed with a trust for plaintiff’s benefit to the extent of plaintiff’s %2 contended interest therein.

Defendants answered by general denial, and plead, among other defenses, the Statute of Frauds and the Texas Trust Act. (Articles 3995(4), (5), 3995a, 7425b-l et seq., Vernon’s Ann.Tex.St.)

Defendants then moved for Summary Judgment under Rule 166-A Texas Rules of Civil Procedure, asserting no genuine issues of fact.

Plaintiff filed opposition to defendants’ Motion for Summary Judgment and in his supporting affidavit stated that defendant agreed if plaintiff found someone to finance further drilling of the well, defendant would give up 60% of any production for such service, and defendant agreed to give plaintiff “%2 portion out of the 60% production” for finding the party to continue drilling the well.

The Trial Court entered summary judgment that plaintiff take nothing and held that plaintiff failed to establish a cause of action against defendants.

Plaintiff appeals, contending that the Trial Court erred in granting Summary Judgment that he take nothing.

From the undisputed record, plaintiff’s agreement was to secure the finishing of the well on defendants’ land for 60% of the working interest; plaintiff did not do this, inasmuch as Scurlock, who plaintiff contends he obtained to deepen the well, required 75%. Plaintiff did not consummate his part of his agreement with defendant, and summary judgment that plaintiff take nothing was proper.

But aside from this, plaintiff cannot recover because his action is one to enforce an oral agreement for the conveyance of an interest in land. Plaintiff alleges that for securing Scurlock to deepen defendants’ well, defendant was to pay plaintiff “a sum equal to 1 /32 of the value of the oil, gas and other minerals produced and to be produced”. Royalties from future production under oil and gas leases, whether payable in money or in kind constitute an interest in land. Sheffield v. Hogg, 124 Tex. 290, 77 S.W.2d 1021; Minchen v. Fields, 162 Tex. 73, 345 S.W.2d 282; LaRue v. Wiggins, Tex.Civ.App., (n. r. e.) 277 S.W.2d 808.

Plaintiff’s contract was not in writing and is barred by the Statute of Frauds, (Art. 3995(4) (5) and Art. 3995a).

Plaintiff further seeks to impress a constructive trust for his benefit on Vs2 interest in the oil and gas produced and to be produced from the lands of defendant, here involved under the doctrine announced in Fitz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256; Omohundro v. Matthews, 161 Tex. 367, 341 S.W.2d 401; Gaines v. Hamman, 163 Tex. 618, 358 S.W.2d 557; and Thompson v. Newman, Tex.Civ.App., (n. w. h.) 378 S.W.2d 879. In such event the Statute of Frauds or the Texas Trust Act (Art. 7425b-l et seq. V.A.T.S. would not bar a recovery by plaintiff for want of writing. In the foregoing cases a constructive trust was impressed on property purchased by defendant upon information revealed by-plaintiff in return for an oral promise of an interest in the property. A constructive trust, however, cannot be created by parol on land already owned, because the owner cannot make a binding parol contract to convey such land. Sorrells v. Coffield, 144 Tex. 31, 187 S.W.2d 980; Lockhart v. Williams, 144 Tex. 553, 192 S.W.2d 146. Since defendant herein already owned the lands, plaintiff’s contention of a constructive trust in his favor must fail, and the Statute of Frauds and the Texas Trust Act, bar a recovery by plaintiff on defendants’ oral promise, as a matter of law.

The judgment of the Trial Court is correct. Plaintiff’s contentions are overruled and the judgment appealed from is affirmed.


author: LANGDON, Justice.

text:
    Mrs. Ray E. MORROW, Appellant, v. A. L. MORROW, Appellee.
    No. 16568.
    Court of Civil Appeals of Texas. Fort Worth.
    Oct. 2, 1964.
    Paul Donald, Bowie, for appellant.
    Marvin F. London, Bowie, for appel-lee.
   LANGDON, Justice.

This is an appeal from an order overruling a plea of privilege.

The form of the note which is the basis of the suit was one used by the First National Bank of Jacksboro, Texas and is essentially the same form as was approved in the case of Yanta v. Davenport, 323 S.W.2d 636 (San Antonio Civ.App., 1959, dism.).

The name of the Bank as payee was crossed out and the name of A. L. Morrow, appellee, was substituted as payee. The name of the Bank as the place of payment was also crossed out. With these changes the portions of the note material to this appeal may be described as follows: It was dated at Jacksboro, Texas and was payable to the order of A. L. Morrow Jacksboro, Texas "at of Jacksboro, Texas.”

The single question to be resolved by this Court is whether or not the parties in executing the promissory note contracted that payment thereof should be made in Jacksboro, Texas.

To hold that the note is payable at Jacksboro does not require the court to read the word “at” into the language of the note by implication because the word is contained in the note. Helms v. Home Improvement Loan Co., 294 S.W.2d 165 (Dallas Civ.App., 1956, dism.). In our opinion the language of the note is plain.. It requires no construction to fix venue by implication. The opinion of the Supreme Court in Saigh v. Monteith, 147 Tex. 341, 215 S.W.2d 610; the Helms case, supra, and Williams v. James, 308 S.W.2d 528 (Fort Worth Civ.App., 1957, no writ hist.) have no application to the facts of this case because the place of payment other than the payee’s domicile was expressly written into the note. See Tatum v. Home Improvement Loan Co., 300 S.W.2d 215 (Waco Civ.App., 1957, no writ hist.).

We are of the opinion that the. court did not err in holding venue in Jack County under subdivision 5 of Art. 1995, Vernon’s Ann.Tex.Civ.St, because the instrument relied upon expressly named Jack County as the place at which payment was to be made and the word “of” was mere sur-plusage.

Generally the presence of unnecessary words or recitals will not invalidate an instrument provided the meaning thereof is not altered or rendered uncertain. 25 A.L.R.2d 1136, VI. Surplusage; Deace v. Stribling, 142 S.W.2d ,564 (Austin Civ. App., 1940, no writ hist.).

Surplusage is matter in any instrument ■vi'hich is unnecessary td its meaning and does not affect its validity; “whatever is extraneous, impertinent, superfluous, or unnecessary. In procedure 'surplusage’ means matter which is not necessary or relevant to the case, and which may be rejected.” 83 C.J.S. p. 916.

The issue involved on this appeal concerning the presence of the extra word “of” in the note may be compared to a man’s hat with a feather tucked into the hatband. Whether the feather is removed or left on the hat it is still a hat. Its identity as a hat is unchanged regardless of what disposition is made of the feather. We feel the same way about the note. The word “of” did not change the. fact that the note was payable “at” Jacksboro, Texas, which is the county seat of Jack County.

Judgment affirmed.


text:
    Mrs. Edward Wayne HILL, individually and for Ladonya Hill et al., Appellants, v. WESCO MATERIALS CORPORATION, Appellee.
    No. 16557.
    Court of Civil Appeals of Texas. Fort Worth.
    Sept. 25, 1964.
    Rehearing Denied Oct. 23, 1964.

      J. Alex Blakeley, Dallas, for appellant.
    Johnson, Guthrie, White & Stanfield, and Curtis White, Dallas, for appellee.
   LANGDON, Justice.

Wesco Materials Corporation, appellee, was defendant in an action for damages asserted against it and other defendants, including G. W. Smith and Monty F. Ren-shaw, resulting from a collision between a gravel truck and another vehicle. Its motion for summary judgment was granted and the suit against it severed to permit this appeal. ■

The appellee will be referred to as Wesco, Monty F. Renshaw as Renshaw and G. W. Smith as Smith.

Wesco’s motion for summary judgment was based upon its contention that Renshaw, the driver of the truck involved in the collision, was not its agent, servant and employee and thus it was not liable to appellants under the doctrine of respondeat superior. It alleged that Renshaw was employed by Smith, an independent contractor. Affidavits in support of the motion were attached thereto, together with Wesco’s written contract with Smith.

Appellants, in contesting Wesco’s motion, contended that a genuine issue of fact was presented as to the relationship between Wesco and Renshaw. That Renshaw was Wesco’s agent and employee, or its borrowed employee or else Wesco was liable for negligent entrustment of the truck to Ren-shaw. We affirm.

It is undisputed that the written contract between Wesco and Smith created the relationship of employer and independent contractor as between them. The sole question here is to determine whether Renshaw was the employee of Smith or Wesco at the time of the collision.

The appellants contend that while the contract is germane to the issue it is not determinative of the relationship between Wesco and Renshaw because the latter was not a party to the contract.

The record reflects that Wesco is engaged in the “sand, gravel and like or associated substances” business. It is not engaged in the hauling business. . Under .its contract with Smith, Wesco could advise him that it had material to be hauled and Smith could elect to accept or reject any work tendered to him. Smith hauled for Wesco' and others. Wesco employed Smith and other independent contractors to haul for it.

On the occasion in question an employee of Wesco advised Smith’s station that it had some material to be hauled. One of Smith’s drivers was assigned to haul the material. Because of some personal reason he requested Renshaw to substitute for him in making the trip. Renshaw agreed to do so and ■during the trip was involved in the collision.

The appellants contend that since Smith was not personally contacted and was unaware of the switch in drivers that he did not “elect” to accept the haul which was tendered to his office by Wesco as was required by the terms of the contract between him and Wesco.

We find this argument to be untenable. There is not credible evidence in the record to indicate that Wesco had any knowledge -of the switch in drivers or that having such knowledge could have done anything about it.

Wesco tendered a haul to Smith’s station. It could have been accepted or rejected. A truck with a driver was dispatched to Wesco from Smith’s station to make the haul. This was routine. It had occurred many times in the past. Wesco had no occasion to inquire whether Smith had personally elected to haul the material when his station was called or to inquire as to whether he personally assigned Renshaw to drive. These were matters between Smith and Renshaw and other employees of Smith who may have been involved.

The truck and trailer involved in the collision was owned by Smith. The driver ■originally assigned to drive it was employed by Smith. Renshaw was likewise an employee of Smith at the time in question and had been so employed for a period of six years. Neither driver had ever been employed or paid by Wesco. Smith paid all of the expenses incident to the ownership, operation and maintenance of the truck and trailer. He paid the salary and all other expenses relating to the employment of Renshaw including social security, workmen’s compensation and withholding. None of these expenses for trucks or employees was paid by Wesco nor was it obligated to do so under its contract with Smith or otherwise.

Pursuant to the contract the appellee would load the trucks which Smith sent over and furnish Smith’s driver with slips reflecting the place of delivery and the name of the person or firm to receive the order.

The evidence clearly shows that Wesco was exercising only such control over Smith’s drivers, including Renshaw, as was necessary to make certain that the work was being performed and results accomplished according to the terms of the written contract between it and Smith.

Mid-Continent Freight Lines, Inc. v. Carter Publications, Inc., 336 S.W.2d 885 (Fort Worth Civ.App., 1960, writ ref.). See also Carter Publications, Inc. v. Davis, 68 S.W. 2d 640 (Waco Civ.App., 1934, writ ref.); Industrial Indemnity Exchange v. Southard, 138 Tex. 531, 160 S.W.2d 905 (1942); Dave Lehr, Inc. v. Brown, 127 Tex. 236, 91 S.W. 2d 693 (1936); Smith Bros. v. O’Bryan, 127 Tex. 439, 94 S.W.2d 145 (1936); Williams v. Texas Employers’ Ins. Ass’n, 218 S.W.2d 482 (San Antonio Civ.App., 1948, writ ref., n. r. e.).

The rules applicable to an independent contractor apply with equal force to his agents and employees.

The case of Hilgenberg v. Elam, 145 Tex. 437, 198 S.W.2d 94 (1946), and other authorities cited by the appellants on the issue of borrowed employees have no application to the facts of this case. In view of our finding that Renshaw was neither the employee nor the borrowed employee of Wesco but was the agent and employee of Smith at all times pertinent hereto, it follows that the doctrine of negligent entrustment has no application to Wesco who did not own or control the vehicle in question or employ or control Renshaw, its driver.

In our opinion the only reasonable conclusion to be drawn from the record is that Wesco did not employ, pay or in any manner assume and exercise such control over Renshaw's physical conduct in the per-

formance of the labor provided for in the contract as to make him its servant and em- ■ ployee. This status was not altered because Smith did not personally receive the original call to his station or personally assign Renshaw to make the trip.

Since under the facts the trial court would have been required to direct a verdict for Wesco had the case been tried on its merits, it was not error to render judgment on summary proceedings. All points of error are overruled and the judgment is affirmed.


text:
    Robert R. COCKE, Appellant, v. Eleanor Bragg COCKE, Appellee.
    No. 4290.
    Court of Civil Appeals of Texas. Waco.
    Oct. 1, 1964.
    Rehearing Denied Oct. 22, 1964.
    Wm. J. McKie, Corsicana, for appellant.
    Mays, Jacobs & Pevehouse, Corsicana, for appellee.
   McDONALD, Chief Justice.

This is a suit to set aside and annul a portion of a final judgment entered on March 14, 1962 which granted divorce to the parties herein, and set aside certain community property to defendant and her 4 minor children. The 1962 judgment was an agreed judgment. Plaintiff alleged that there exist community debts (amounting to some $27,900), and that creditors of the community “threaten to bring suit or foreclose liens,” and that the community estate is wholly insolvent unless the property set aside to defendant and the 4 minor children be applied to the liquidation of the debts. Plaintiff prayed for a revision of the 1962 judgment to apply the property set aside to the defendant and 4 children to the community debts.

The Trial Court, after hearing, dismissed the cause. Plaintiff appeals, contending the Trial Court erred in dismissing plaintiff’s cause of action because plaintiff “has a right to have community property applied to pay community debts”. We overrule plaintiff’s contentions. The 1962 judgment had become final. There was no allegation of fraud, accident, or mistake; and plaintiff’s petition makes no pretense of being an Equitable Bill of Review. See Rule 329b, Sec. 5, Texas Rules of Civil Procedure; Click v. Click, CCA (n. w. h.), 258 S.W.2d 835. Looney v. 1st Nat. Bank, CCA (n. r. e.), 322 S.W.2d 53. The Looney case, supra, holds:

“ * * * a suit in the nature of a bill of review, * * * is the only proceeding to set aside a judgment not void on the face of the record, after term time and after it has become final. * * *»

Plaintiff urges that all of the community property is subject to the rights of creditors. This is true, but no creditors are asserting rights in this cause.

The judgment of the Trial Court is affirmed.


text:
    Samuel O. SHENK et ux., Appellants, v. Jules ZIEGLER et ux., Appellees.
    No. 4257.
    Court of Civil Appeals of Texas. Waco.
    Oct. 1, 1964.
    Melvin M. Engel, Houston, for appellants.
    Solito, Vetrano & Murr, Houston, for-appellees.
   McDONALD, Chief Justice.

This is an appeal from a summary judgment, decreeing title and possession to a., house and lot in Houston, Texas, to plaintiffs Ziegler; (and ordering delivery of deed, to same, held in registry of the court, to-, plaintiffs Ziegler).

Plaintiffs Ziegler filed this case against defendants Shenk, alleging that plaintiffs wanted to buy a house and finance a portion of the purchase price with Spring Branch Savings & Loan Association; that plaintiffs’ credit rating was not good and would not meet the loan company’s approval; that they agreed with defendants Shenk. that defendants would take legal title to, the house and then convey it to plaintiffs after a first lien had been paid off (and other conditions met) ; that defendants executed (but did not deliver) a deed to plaintiffs to the property (which deed is now in the registry of the court) ; that all conditions precedent to delivery of the deed have been met and complied with, but defendants refuse to deliver the deed. Plaintiffs prayed that defendants be held to be constructive trustees and that plaintiffs be decreed title and possession of the premises.

Defendants answered by pleas of not guilty; general denial; and contended that all conditions of the agreement to convey the property to plaintiffs had not been complied with.

Plaintiffs moved for summary judgment, which motion was granted by the trial court, and j'udgment was entered decreeing title and possession of the property in plaintiffs, and ordering delivery of the deed to such property to plaintiffs (from the registry of the court).

Defendants appeal, contending the existence of genuine issues of material .fact precluded summary j'udgment.

The record reflects that defendants entered into a contract to deliver plaintiffs a deed to the property after plaintiffs paid off a first lien note; assumed the principal note (and secured defendants’ release from same). ■ Defendants executed such deed, and same w.as in the registry of the court.

Undisputed affidavits on file reflect that plaintiffs have paid off the first lien note; assumed the second lien note; that the loan association had released defendants from liability on such note; that all conditions of the contract to deliver plaintiffs the deed had been met and complied with. Depositions of defendants reflected that all moneys paid on the purchase and all expenses paid in connection therewith had been paid by plaintiffs, and that defendants had taken title to the property as an accommodation or favor to plaintiffs.

The record conclusively reflects that defendants took title under circumstances rendering them constructive trustees of the property. See Omohundro v. Matthews, 161 Tex. 367, 341 S.W.2d 401. Moreover, all conditions precedent to the agreement by defendants to convey the property to plaintiffs were conclusively shown to have been met and complied with.

No genuine issues as to material facts exist. Defendants’ contentions are overruled and the judgment of the trial court is affirmed.


author: PRESLAR, Justice.

text:
    Faye B. GRESHAM et vir, Appellants, v. Fred TURNER, Jr., et al., Appellees.
    No. 5582.
    Court of Civil Appeals of Texas. El Paso.
    Oct. 23, 1963.

      Wynne, McKenzie, Stroud, Jaffe & Tin-sley, Jerome Chamberlain, Dallas, for appellants.
    Stubbeman, McRae, Sealy & Laughlin, Tom Sealy, Walter K. Boyd, Jr., F. H. Pannill, Horace N. Burton, Midland, Graves, Dougherty, Gee & Hearon, Ireland Graves, Robert J. Hearon, Jr., Austin, for appellees.
   PRESLAR, Justice.

This is an action for the construction of an oil and gas lease executed by appellants, as lessors, to appellee Fred Turner, Jr., as lessee, and dated February 27, 1947. The remaining appellees are assignees and co-owners of the lessee’s interest. The sole question for determination is the amount of royalty reserved in such lease by appellants. Appellants were owners of an undivided 54oth mineral interest in Section 14, Block 4}4, G.C. & S.F. Ry. Co. Survey, containing 922 acres, Upton County, Texas, when they executed the lease in question on a printed form in common use, which provided, among other things, as follows:

“1. Lessor in consideration of Ten Dollars ($10.00) in hand paid, of the royalties herein provided and of the agreements of Lessee herein contained, hereby grants, leases and lets exclu- . sively unto Lessee * * *, the following described land in Upton County, Texas, to-wit:
“Survey No. 14, Block 4}4, G.C. & S.F. Ry. Co. Survey and containing 922 acres more or less * *• *
“3. The Royalties to b!e paid Lessor are: (a) on oil, one eighth of that produced and saved from said land *

The printed lease form also contained the following proportionate reduction clause:

“ * * * without impairment of Lessee’s right under the warranty in event of failure of title, it is agreed that if Lessor owns an interest in said land less than the entire fee simple estate, then the royalties and rentals to be paid Lessor shall be reduced proportionately.”

Prior to trial it was stipulated between the parties that the proportionate reduction clause was deleted prior to execution of the lease. It was also stipulated that the lessor owned only a %oth mineral interest in the 922-acre Section 14, that the bonus consideration for the lease was $10.00 per acre on 11.52 acres, and that payment for delay rentals was agreed by the parties to be $1.00 per acre on 11.52 acres at the time of the execution and delivery of the lease. It was also stipulated that production of oil under the lease began during its primary term and has been continuous, but that lessors have not executed any division orders or accepted any of the tendered royalty payments, and that the lessees have not brought any action to reform the lease, nor sought to vary or attach the validity of same, but have always contended that appellants were entitled to royalty of their 54oth part of the }4th royalty only.

Trial was before the court without a jury, with the plaintiffs (lessors) contending the lease was not ambiguous and that they were entitled to a royalty of 54th of the total production, 54th of %th, from Section 14. Defendant lessees contended the lease was not ambiguous, but that it provided for lessors to receive only a royalty of 54th of their 54oth interest, and alternatively, that the lease contained a latent ambiguity, was a product of mutual mistake, or it was a case of constructive fraud. The four-year statute limitations was also relied on by defendant lessees. The trial court entered judgment that lessors were entitled only to %oth of the 54th royalty. No findings of fact or conclusions of law are in the record, so that the basis for the judgment is not known.

We are of the opinion that the judgment is correct and that the instrument is unambiguous. We arrive at that conclusion by finding the intention of the parties thereto from within the four corners of the instrument, the language used ■by the parties, the subject matter of the instrument, aided by the situation of the parties and the surrounding circumstances. That, we perceive to be the correct rule of construction of an unambiguous instrument. Texas Gas Corp. v. Hankamer, Tex. Civ.App., 326 S.W.2d 944; Ryan v. Kent (Tex.Com.App.), 36 S.W.2d 1007; Lipscomb v. Fuqua, 103 Tex. 585, 131 S.W. 1061; Murphy v. Dilworth, 137 Tex. 32, 151 S.W.2d 1004; Gibson v. Turner, 156 Tex. 289, 294 S.W.2d 781 (1956).

We are aided in the determination of this case by the fact that the Supreme Court of this State has previously decided a case (Gibson v. Turner, supra) involving the same land, the issue as to the amount of royalty to be paid under an exact lease form (except for an oil payment), but involving different parties plaintiff and a different fraction of mineral interest owned.

We turn now to the precise question of what royalty the parties intended. Looking to the language of the lease we note first that the royalty is “reserved”. That can mean only that it is something retained out of that which was granted. What was granted? A lease of a %oth mineral interest. Then the 54th royalty reserved must come out of the 54oth. The effect of the ordinary oil and gas lease, of which this is one, is to vest the lessee with a determinable fee to the minerals in place. Waggoner Estate v. Sigler Oil Company, 118 Tex. 509, 19 S.W.2d 27. Royalty is the specified portion of those minerals intended to remain and vest in the lessor. Sheffield v. Hogg, 124 Tex. 290, 77 S.W.2d 1021, 80 S.W.2d 741. To follow the construction urged by appellants herein would be to hold that one could become vested with a ^oth interest, 54th of %ths, by conveying a 54oth and making a reservation of 54th. The use of the word “from” can have no other meaning than that given “reserved”. “The royalties to be paid Lessor are: (a) on oil, one-eighth of that produced and saved from the land * * *.” Saved from what- land ? The only reasonable construction is that with which the parties are dealing — the %oth mineral interest which was the subject of their contract Lessor owned a Ysoth interest which he was interested in leasing, and lessee was interested in leasing said Ysoth; they made a deal and drew the lease in question to cover the subject of their deal — the %oth. Out of that Ysoth, lessor reserved a Y&th royalty. Another factor reflecting the intentions of the parties is that the construction which we here give to their lease would comport with ordinary business dealings, while that urged by appellants would not. We do not think it reasonable that one would make a business deal agreeing to give up ^oth of the oil above ground for-%oth of the same oil below the ground. The situation of the parties was such that lessee could have drilled without the lease covering lessors’ fractional interest, and would have been obligated to pay lessors only Ys oth of the production. That, after deducting %oth of the drilling and equipping cost from lessors’ share. Burnham v. Hardy Oil Co., Tex.Civ.App., 147 S.W. 330, affirmed 108 Tex. 555, 195 S.W. 1139. In such a situation we do not believe the parties intended a trade whereby one would receive ^-Moth for his %oth, plus a cash consideration and relief from the cost of drilling and equipping.

Appellants urge that this case is controlled by the case of Gibson v. Turner, supra. With that we do not agree. The Supreme Court, in construing the lease in that case, was dealing with a different fractional ownership from that in our case. There, the subject matter of the lease was a Moth mineral interest, and by the court’s construction the lessors had a royalty of Moth. The court held, as do we, that the Moth was “reserved” out of the Moth, and it recognized that while the usual royalty was Ysth, the parties could agree on a different royalty. The court then makes the point, in support of its opinion, that it was possible to reserve the Moth out of Moth and that such could be done without any incongruity. Appellees urge that by such language the Supreme Court clearly intended to limit its holding to instruments in which the claimed royalty could possibly be reserved out of the interest leased. We do not speculate as to whether the Supreme Court intended such a rule, but simply point out that it makes the Gibson case an entirely different case from the one before us. Such language prevents the Gibson case-from being controlling in our case, for in. the instant case it would not only be an incongruity, but an impossibility, to reserve ^-Moth out of %oth.

The trial court filed no findings of fact or conclusions of law, so that there is nothing in the record to indicate that the basis-for the trial court’s judgment is any different from ours. That fact, plus the construction we put on the instrument in question, makes it unnecessary to further consider the appellants’ points of error, and all are overruled.

The judgment of the trial court is affirmr-ed.


author: MOORE, Justice.

text:
    Dixon H. CAIN, Appellant, v. TENNESSEE-LOUISIANA OIL COMPANY, Appellee.
    No. 59.
    Court of Civil Appeals of Texas. Tyler.
    Sept. 24, 1964.
    Rehearing Denied Oct. 15, 1964.

      Harry M. Reasoner and Leroy Jeffers, Vinson, Elkins, Weems & Searls, Houston, for appellant.
    William C. Harvin and Finis E. Cowan, Baker, Botts, Shepherd & Coates, Houston, for appellee.
   MOORE, Justice.

Appellee, Tennessee-Louisiana Oil Company, a corporation, brought this suit against Appellant, Dixon H. Cain, seeking a recovery upon a breach of contract, praying for restitution of the sum of $57,750.00, theretofore paid him, and in the alternative, for damages in the sum and amount of $150,000.00.

Prior to the development of this controversy, Appellant Dixon H. Cain was the president of Fifteen Oil Company, a corporation engaged in drilling and producing oil and gas with some of its properties being situated in the State of Louisiana. In June, 1958, Appellee, through the officials of its parent corporation, Tennessee Gas Transmission Company, sought to acquire the assets of Fifteen Oil Company through direct negotiations with Appellant, Dixon H. Cain, its president. Being unsuccessful, Tennessee Gas Transmission Company, through its stockbroker, then acquired more than 20% of the stock of Fifteen on the open market, without the knowledge of Fifteen. Thereafter, in May, 1960, Fifteen agreed to the sale of its assets to Appellee. Under the terms of the agreement, Fifteen agreed to sell all of its assets to Tennessee-Louisiana Oil Company in exchange for a certain amount of shares of stock of Tennessee Gas Transmission Company. Immediately prior to the consummation of the transaction, the Board of Directors of Fifteen Oil Company, granted severance pay to three of its officers in an amount equal to one and one-half (lj4) years’ salary. Cain’s severance pay was set at $57,750.00, being one and one-half (li4) times his yearly salary. Upon being advised of this action by the Board of Directors of Fifteen, Tennessee made no objection, but according to Cain’s testimony reduced the consideration to be paid Fifteen by reducing an equivalent amount of shares of stock from that theretofore offered, and further required that Appellant, Dixon H. Cain, and the other two officers, to execute what they termed as a “retained advisory letter.” The letter was as follows:

“May 2, 1960
“Tennessee Louisiana Oil Co.
P. O. Box 2511 Houston, Texas
“Dear Sirs:
“With reference to the Plan of Reorganization entered into on January 14, 1960 and amended on March 24,1960, between Fifteen Oil Company, Tennessee Gas Transmission Company and you, each of the undersigned (i) does hereby acknowledge receipt of payment by Fifteen Oil Company, as severance pay, of an amount equal to one and one-half (V/2) times his current annual compensation; and (ii) does hereby agree that he will be available to you in a retained advisory capacity for a period of six (6) months from and after May 2, 1960, in order that there will be no abrupt change in management and in order that you may avail yourself of his special knowledge concerning the affairs and properties of Fifteen Oil Company.
“Yours very truly, Dixon H. Cain John T. Lockridge Harry H. Hudson”

Among the numerous assets transferred by Fifteen to Tennessee was a 50% interest in a mineral lease upon a four thousand (4,000) acre tract of land known as the Martinez Lease. Appellant’s father, J. W. Cain, owned one-fourth (%) of the minerals under the lease, having owned same since 1936.

The mineral lease covering the Martinez four thousand (4,000) acre tract, which Ap-pellee, Tennessee, thus acquired, was originally executed on May 25, 1933, and contained the following provision:

“After discovering any mineral in paying quantities on the land, grantee may maintain his rights in effect for so long as he pleases by proceeding with reasonable diligence to develop the land; however, the only penalty for grantee’s failure so to develop shall be the loss of his rights; and grantee may, if he so elects, at any time after discovering any mineral in paying quantities on the land, surrender any part thereof, when after none of the provisions hereof shall be effective as to the surrendered part, but grantee may continue to hold the unsurrendered part by complying with the provisions hereof as to the unsurrendered part.”

On October 19, 1960, approximately twenty-one (21) days before the expiration of the six-month period in which Appellant agreed to remain available in a “retained advisory capacity,” he wrote a letter as attorney-in-fact in behalf of his father, J. W. Cain, addressed to Tennessee-Louisiana Oil Company, in which he advised them of the provisions of the lease hereinabove quoted, and further advised them as follows:

“During the past ten years, you and your predecessors have not, to my knowledge, conducted any drilling operations, either exploratory or developmental, upon this property, although numerous wells in both categories have been drilled and completed offsetting these lands. Most recently, the F. A. Callery Unit No. 4 Well was successfully completed in May, 1960, as a gas-condensate well in the Rousseau Field, offsetting the Martinez Lease to the north, and it is my understanding that, although you paid 20 per cent of the cost of this well, you have agreed with the offset operators of the well that less than 10 acres of the Martinez Lease should be included in the producing unit. This 10 acres represents about 6 per cent of the Number 4 Únit and about two-tenths of one per cent of the Martinez Lease.
“Additionally, you have allowed production from the Martinez Lease to decline such that only two wells are still productive. During September, 1960, oil production from the lease averaged less than 75 barrels per day, gas production less than 27 MCF per day.
“You are hereby notified that you have not complied with the terms of the subject lease in developing the land and you are asked to proceed immediately and without further delay to fully develop such land and protect it from drainage; or, in the alternative, to reassign the land to its rightful owners subject to your reservation of 20 acres around each well still producing at the time of reassignment.
“This letter is written on behalf of the lessors as a demand for development or reassignment of the lease as provided by its own terms and cannot be otherwise construed. Unless such additional development as evidenced by commencement of actual drilling of at least a 15,000' test will have begun on the Martinez Lease on or before sixty (60) days from the date of this letter, your rights under the subject lease will be considered surrendered by their own terms subject only to the reservation of acreage around such wells still producing at the time of surrender of your rights.
“Yours very truly,
Dixon H. Cain Agent and Attorney-in-Fact for J. W.' Cain”

A copy of this letter was then sent to some twenty (20) other owners of a mineral interest in the Martinez Tract. Presumably, as a result of this letter, at least one of the other owners, who owned a one-half (1/2) interest in the tract, demanded the surrender of the lease for failure to develop.

After declining to either develop the lease by drilling, or to attempt a re-negotiation of the leases, the management of Tennessee finally decided to voluntarily surrender all leases except forty (40) acres surrounding each of the producing wells. Shortly after releasing the mineral lease, Cain’s father by two conveyances, conveyed all of his interest to his son, Dixon H. Cain, Appellant, who thereafter leased the acreage for oil and gas purposes for the sum of $45,000.00.

Thereupon, this suit was then brought by Tennessee against the Appellant, Dixon H. Cain, for restitution of his severance pay, and in the alternative for damages for breach of contract Upon trial before a jury, seven (7) Special Issues were submitted to the jury, but only three (3) of the issues are deemed pertinent to this appeal. The issues, together with the jury’s verdict thereon, are as follows:

“SPECIAL ISSUE NO. 1
“Do you find from a preponderance of the evidence that by virtue of the Plan of Reorganization of Fifteen Oil Company and the Letter Agreement of May 2, 1960, between Dixon Cain and Tennessee Louisiana Oil Company, Dixon Cain agreed to act for Tennessee Louisiana Oil Company to the extent of remaining available in a retained advisory capacity for a period of six months from and after May 2, 1960, in order that there would be no abrupt change in management and in order that Tennessee might avail itself of his special knowledge concerning the affairs and properties of Fifteen Oil Company?” Answer “We do” or “We do not”
Answer “We do”
“SPECIAL ISSUE NO. 2
“Do you find from a preponderance of the evidence that during the six month period in which he had agreed to be available to Tennessee-Louisiana Oil Company in a retained advisory capacity with respect to the properties of Fifteen Oil Company, Dixon H. Cain took action in connection with one of such properties which action was adverse to and against the interest of Tennessee-Louisiana Oil Company in said property?”
Answer “We do” or “We do not”
Answer “We do”
“SPECIAL ISSUE NO. 3
“What sum of money, if any would fairly and reasonably compensate Tennessee-Louisiana Oil Company for the damages, if any, which resulted from such action on the part of Dixon H. Cain, if any you have found?”
Answer by stating the amount, if any, in dollars and cents.
Answer “$60,000.00”

Based upon these findings, the Court entered judgment against the Appellant, Dixon H. Cain, in the sum and amount of $57,750.00, Appellee having requested the Court to enter judgment only for an amount equal to his severance pay rather than the full amdunt of $60,000.00 awarded by the jury.

Appellant has assigned three Points of Error by which he contends that the judgment is erroneous because (1) the Trial Court erred in submitting Special Issue No. 1 because it was an attempt to have the jury answer an issue of law rather than an issue of fact, and (2) because there was no evidence Cain agreed to act for Appellee, he having only agreed to remain in a retained advisory capacity for a period of six months, and (3) that there is no evidence to support the submission of Special Issue No. 2, because the contract did not create a fiduciary relationship.

The judgment for Appellee is apparently based upon the theory that the jury in response to Special Issue No. 1 found as a matter of fact that Appellant agreed to bcome an agent or agreed to become bound by some other type of contractual relationship which, as a matter of law, resulted in a confidential or fiduciary relationship, the betrayal of which, in equity, would require Appellant to respond in damages or make restitution of his terminal salary in the amount of $57,750.00. Since the judgment ■contains no independent findings in support thereof, the primary inquiry resolves itself into a question of whether or not Special Issue No. 1 as submitted by the Court calls upon the jury for a finding of fact or whether it calls upon the jury to make a ■finding of law.

“The question whether an agency relation exists between an alleged principal and agent is a question of law that must be determined solely by the trial court, in the light of the relations of the parties under the agreement between them or in view of their acts and conduct. More specifically, it is the function of the trial court alone to determine whether, under an ascertained state of facts, a legally valid agency relation exists between the parties. The province of the jury in this connection is to determine only whether or not certain facts exist — not whether, if such facts do exist, they are legally sufficient to constitute the alleged agency.” Minneapolis-Moline Company v. Purser, Tex.Civ.App.1962, 361 S.W.2d 239, writ ref., n. r. e.

Both the word “act” and “agreed” as contained in Special Issue No. 1 carry definite legal implications.

The word “act” denotes affirmative action or performance and an expression of will or purpose. An “act” signifies something done voluntarily by a person. An act is the result of the exercise of the will. Black says: “In a more technical sense it means something done voluntarily by the person, and of such nature that certain legal consequences attach to it.” Duncan v. Landis, 3 Cir., 106 F. 839, 45 C.C.A. 666; Randle v. Birmingham Ry., Light & Power Co., 169 Ala. 314, 53 So. 918, 921.

Webster defines “agreed” as “United or settled in or by a common opinion on consent. Can two walk together, except they be agreed. Amos III: 3.” McMurtry v. Addington, (Tex.Civ.App.) 354 S.W.2d 655.

In order to determine whether Appellant “agreed” to “act,” the Court referred the jury to the “Plan of Reorganization.” This was a legal instrument containing some fifteen (15) printed pages. Among other things, it contained numerous representations and warranties by the parties, as well as a provision which was somewhat similar to the retained advisory letter quoted here-inabove. In view of our disposition of this cause, we see no useful purpose in quoting the provisions of this lengthy instrument.

We believe Special Issue No. 1 to be subject to all of the objections leveled by Appellant in his first Point of Error. The issue, as framed, submits to the jury a mixed question of law and fact, if not purely a question of law. It begins by referring the jury to two separate instruments and then requires the jury to interpret the instruments and to arrive at a conclusion as to whether or not, in their opinion, Appellant “agreed” to “act” on behalf of Tennessee. The issue does not ask the jury to find any particular question of fact, but calls for the jury’s conclusion based upon their interpretation of the two instruments.

“It is elementary that the trial court should not submit to the jury for their determination an issue involving a mixed question of fact and law. It is likewise axiomatic that an issue should not be submitted to the jury, if the same involves the construction of a contract or written instrument, or if the same calls for the determination of a question of law by them.” Hanover Co. v. Hines, 11 S.W.2d 621 (Tex.Civ. App.) aff’d. 23 S.W.2d 289 (Tex.Com. App.); Burgess v. Sylvester, 143 Tex. 25, 182 S.W.2d 358; Schoenberg v. Forrest, (Tex.Civ.App.) 228 S.W.2d 556; Knutson v. Ripson, 163 Tex. 312, 354 S.W.2d 575.

Appellee’s argument that Special Issue No. 1 was merely a submission of the issue of whether or not the Appellant did “in fact” agree, would ignore the fact that Special Issue No. 1, specifically tells the jury to find whether “ * * * by virtue of the Plan of Re-organization of Fifteen Oil and the letter of agreement of May 2, 1960, between Dixon Cain and Tennessee-Louisiana Oil Company, Dixon Cain agreed to act * * Thus, as pointed out before, the Court directed the jury to construe two written instruments simultaneously and to determine whether or not, under their interpretation, Appellant “agreed” to “act”. The vice in the issue lies in the fact that the Court requires the jury to base their verdict, not upon the acts and conduct of Appellant, but upon whether or not the two instruments executed by Appellant amounted to an agreement by him to “act” for Tennessee. It was the duty of the Court to interpret the instruments and to determine the legal effects flowing therefrom. A finding by the jury upon a question of law or a mixed question of law and fact, will not support a judgment based thereon, after a proper objection has been made to its submission.

In view of our ruling requiring a reversal, we will defer a discussion of Appellant’s remaining points raising only questions of sufficiency of the evidence.

Because of the error pointed out herein-above, this cause must be reversed and remanded.

Reversed and remanded.


author: WILSON, Justice.

text:
    HARDWARE MUTUAL CASUALTY COMPANY, Appellant, v. Donnie Ray STYRON, Appellee.
    No. 4264.
    Court of Civil Appeals of Texas. Waco.
    Oct 1, 1964.
    Rehearing Denied Oct. 22, 1964.

      Bean & Manning, Frank M. Bean, Houston, for appellant.
    McClure & Lucas, Harold Lloyd, Houston, for appellee.
   WILSON, Justice.

Appellant’s eight points in a workmen’s compensation case all relate to an asserted “judicial admission” by claimant in a federal court appeal from the same award which is involved here. Appellant says it appealed to the United States District Court from the award, that appellee-claim-ant filed a pleading there praying for compensation in a sum below the jurisdiction of that court, and that the federal court case was then dismissed for lack of jurisdiction on his motion. It contends claimant’s federal court pleading was an “un-retracted judicial admission” which precluded recovery of 401 weeks’ compensation at the maximum rate for which judgment was rendered in the present case.

These contentions were presented by a special exception which was a speaking demurrer, by a motion in limine, by objections to testimony and the charge, by motion for judgment non obstante veredicto, and by motion for new trial. Appellant’s points complain of adverse action of the trial court on each of these.

The federal court pleading which is said to constitute the admission was never tendered in evidence on the trial of the case; during the trial there was no effort to prove it; its existence was only pleaded. For the first time, at a hearing on motion for new trial, did appellant ask leave to introduce the pleading in evidence “to assure that it is before the appellate court.” It then came too late. Kirk v. Head, 137 Tex. 44, 152 S.W.2d 726, 729; Houston, E. & W. T. Ry. Co. v. DeWalt, 96 Tex. 121, 70 S.W. 531, 537; McMillin v. Wilson, Tex.Civ. App., 121 S.W.2d 1029, 1031; Hickman v. Cooper, Tex.Civ.App., 210 S.W.2d 858, 861, writ ref. n. r. e.; Borel v. United States Casualty Co., 5th Cir., Tex., 233 F.2d 385; 2 McCormick and Ray, Texas Law of Evidence, Sec. 1146; 45 Tex.Jur.2d Sec. 88, p. 530. A motion for new trial may not be made the vehicle for introduction of evidence, not purporting to be newly discovered, which should have been earlier introduced. Affirmed.


author: SAMUEL A. DEW, Special Commissioner.

text:
    Emery E. FAGER and Max J. Friesen, Partners, Doing business as Fager & Friesen Insurance Agency, Respondents, v. J. W. STORMS and Storms-Green Construction Company, Appellants.
    No. 23872.
    Kansas City Court of Appeals. Missouri.
    Oct. 5, 1964.
    Donald B. Clark, Campbell & Clark, Kansas City, for appellants.
    Robert D. Youle, Daniel M. Dibble, Lathrop, Righter, Gordon & Parker, Kansas City, for respondents.
   SAMUEL A. DEW, Special Commissioner.

The plaintiffs sued to recover damages for conversion of certain road machinery. Upon trial without a jury, the court gave judgment for the plaintiffs for $10,000. Defendants have appealed.

This case is related to two companion cases with which it was tried, but not consolidated. They are: Kansas State Bank v. Storms et al., No. 23,873, Mo.App., 382 S.W.2d 805 and State ex rel. for the Use of Fager and Friesen Insurance Company v. Storms-Green Construction Company et al., No. 23,874, Mo.App., 382 S.W.2d 812. A separate judgment was rendered in each of the three cases, separate appeals taken and a single transcript filed in this court. For a more extensive account of the background of the transactions involved in the instant case reference may be had to the case of Kansas State Bank v. Storms et al., supra.

Defendants were prime contractors under a contract with the Highway Commission of Missouri for the construction and preparation of the roadbed to improve Route Í#67 in St. Francois County, Missouri. They subcontracted to Dale Bloom, a contractor, for that part of the job that required the excavation of rock. He owned and operated heavy road machinery and equipment necessary for that part of the road construction. Due to many unforeseen adversities, Bloom became insolvent with his subcontract far from completion.

Defendants, responsible as prime contractors for completion of the entire contract, entered into a written agreement with Bloom, dated December 26, 1958, to assume the unfinished part of his subcontract, to pay all of his debts incurred thereunder, to employ him as a superintendent on the job, and for Bloom to convey to the defendants thereby the road machinery in question, to be reconveyed to him under certain conditions provided for therein, more particularly noted later in this opinion. The written agreement was never recorded.

The plaintiffs were insurance agents in Overbrook, Kansas. They were partners and were cashier and assistant cashier, respectively, of Kansas State Bank in that town and operated their insurance agency in the quarters of that bank. They had furnished Bloom much of his insurance over the past years, and his overdue account with them for unpaid insurance premiums had accumulated to the amount of $13,831.55. To secure that indebtedness to plaintiffs, Bloom, on January 1, 1959, gave them his note for that amount, secured by a chattel mortgage on certain of the road machinery on the above job site in St. Francois County, Missouri. The note and mortgage were made on the bank’s forms designating the Kansas State Bank as payee and mortgagee, but the bank disclaimed any interest in them and promptly assigned them to the plaintiffs. The trial court ruled that the plaintiffs were at all times the true owners of the note and mortgage, which ruling was supported by substantial evidence. The mortgage was thereafter recorded January 17, 1959, in St. Francois County, Missouri, where the property was located and on February 2, 1959, in Douglas County, Kansas, where Bloom resided. The note becoming in default, plaintiffs, on September 11, 1959, demanded possession of the mortgaged property.

Certain parts of the mortgaged machinery and equipment had been seized by the holders of a prior mortgage (Kansas State Bank) and some had been sold by the defendants herein for $5,000 which, it is agreed, was its reasonable market value. Some was still retained by the defendants of the agreed reasonable market value of $5,000. The court found that the defendants had thus converted the mortgaged property to their own use and benefit and that the amount due on the Bloom note held by plaintiffs, with interest, was $10,997.20.

The new working agreement between Bloom and defendants above mentioned, covering the assumption of his subcontract by defendants, purporting on its face to have been executed December 26, 1958 and, therefore, to antedate plaintiffs’ mortgage of January 1, 1959, set forth the conditions and reasons for its execution and its mutual purposes, and thereafter it read as follows :

“3. Second Party hereby sells, assigns and transfers all right, title, interest or equity in and to all construction equipment, parts, supplies or other merchandise which he now has on the job.
* * * * X *
“5. When that part of the job heretofore sublet to Second Party has been fully completed, there shall be a final accounting at which time all expenses incurred by First Parties in completing the contract heretofore sublet to Second Party (including all bills which First Parties shall be required to pay that were incurred by Second Party in performing his part of the subcontract) shall then be balanced against all accounts that should be credited to Second Party for the work performed on such sub-contract, after which the surplus, if any, shall be paid to Second Party, and all equipment conveyed to First Parties under the provisions of this contract shall be returned and transferred to Second Party; should such accounting show that First Parties have incurred a loss, then in such event First Parties shall have the right to sell or dispose of all equipment conveyed to them by Second Party under the terms of this agreement, and proceeds from such sale shall be applied to reduce such loss, and the balance of such loss, if any, shall then be an obligation against Second Party”.

The plaintiffs firmly contend that the above agreement was by no means a Bill of Sale for the property referred to therein, nor otherwise a conveyance of title thereto, but a mere security device to secure defendants in undertaking the completion of Bloom’s unfinished subcontract, and that, further, the Bloom agreement though dated December 26, 1958, was in fact not signed and executed by the parties until January 4, 1959, subsequent to Bloom’s note and mortgage of January 1, 1959 held by the plaintiffs.

Defendants just as vigorously argue that their agreement with Bloom was agreed to and executed on December 26, 1958, as it states; that it was error to permit evidence to the contrary since defendant Horace Green, who signed for defendants, had since died; that the agreement did transfer and assign the Bloom equipment to defendants, including all right, title and interest therein to be used in the completion of the Bloom subcontract and to compensate defendants for assuming Bloom’s obligation; that the equipment was not security for the payment of a certain future debt exceeding the value of the property. It is insisted that to constitute the relationship of mortgagor and mortgagee the mortgagor “must retain the ability to recover the property by payment or performance”.

The court found that the Bloom agreement with defendants dated December 26, 1958, constituted a security device and not a bill of sale and “did not transfer absolute title to the defendants of any of the equipment described in the mortgage contained in plaintiffs’ Exhibit 6”. Defendants’ first point of error is that the court should have found that Bloom conveyed the property to defendants by his contract of December 26, 1958.

It is obvious that if defendants’ construction of their agreement with Bloom dated December 26, 1958 be correct, then such agreement, though unrecorded, would, under the circumstances in evidence, take precedence over plaintiffs’ mortgage of January 1, 1959, for want of title vested in Bloom to execute such mortgage. If, however, such unrecorded agreement between defendants and Bloom conveyed no title to the property described to defendants or to anyone, then on January 1, 1959, he would have retained and have vested in him the legal title to the property described in plaintiffs’ mortgage and would possess binding authority to execute the same. Furthermore, the motor vehicles among the property in question were subject to State Motor Vehicle Law and, in fact, could be transferred only under those regulatory statutes with which the evidence shows no compliance. Haynes v. Linder, Mo.App., 323 S.W.2d 505; Section 301.210 RSMo 1949, V.A.M.S. Bloom testified that he never assigned or delivered his vehicle titles to defendants and that he had no intention to convey title to his equipment to the defendants by the mere signing of the agreement; that “this equipment was mine”, and that he “figured it was my place to stay there”. He did, however, state that the agreement dated December 26, 1958, correctly stated the substance of the understanding between the parties to it.

It is said in 14 C.J.S. Chattel Mortgages § 5, p. 584:

“A sale is distinguished from a mortgage in that the former is a transfer of the absolute property in the goods for a price, whereas a mortgage is at most a conditional sale of' personal property as security for the payment of a debt or the performance of some other obligation, subject to the condition that on performance title shall revest in the mortgagor. * * * As conducing toward the construction of a transaction as a mortgage rather than as a sale, the courts will consider such facts as * * * that the bill of sale contains or is accompanied by a defeasance, that there is * * * an agreement for a reconveyance, * * * or that there is a continuation of indebtedness on the part of the seller”.

The court in Puryear-Meyer Grocer Co. v. Caldwell Bank, Mo.App., 4 S.W.2d 489, 490, said:

“One sure test as to whether a deed is intended as a mortgage is the fact that the debt is not thereby extinguished, but remains in existence. If there is no debt, the instrument cannot be considered as a mortgage; but, if it continues, it is proper to so construe the instrument. Bobb v. Wolff, 148 Mo. 335, 49 S.W. 996; Book v. Beasley, 138 Mo. 455, 40 S.W. 101; Carson v. Lee, 281 Mo. 166, 219 S.W. 629.
“In the case at bar, the instrument under consideration recited the amount of the indebtedness, and provided that, in event the net proceeds from the sale of the cotton ‘exceeded the above indebtedness, the excess shall be paid to first party.’ By this instrument the debt was not extinguished, but it is clear Stoker was to be credited only with the amount of the net proceeds from the cotton. He retained an interest in the cotton to the extent, at least, of the amount it might bring over and above what he owed plaintiff. Such a clause is common to mortgages and deeds of trust. It is a strong indication that the instrument is intended as a mere security and not a sale. If it were an outright sale, there could be no reason for paying the surplus over and above the indebtedness to Stoker. Of course, if the debt had been extinguished by the transaction we should have an entirely different situation”.

We believe the evidence and the law support the court’s conclusion of the legal effect of the defendants’ contract with Bloom that it constituted only a security device and did not convey unconditional title to the defendants.

Defendants also assign as error the court’s failure to find that the recording of plaintiffs’ mortgage should not be binding on defendants because seventeen days was an unreasonable period to wait to record the mortgage after its execution. Considering the fact that the mortgage was executed on New Year’s Day followed by two week-ends before the date of the recording, the remaining time for filing by a nonresident bank, without knowledge of defendants’ agreement with Bloom, was not, in our opinion under all the circumstances, sufficiently long to invalidate the recording as a matter of law.

Defendants further charge the court with error in failing to find that the plaintiffs were negligent in recovering the real market value of two trucks taken by them under their mortgage and to credit the mortgage indebtedness therewith. There was substantial evidence that plaintiffs sold a 1950 Chevrolet truck for $325, after spending $94.21 on repairs; that they left a 1954 International truck with Failing Drill with a sales and rental firm in Kansas City, with no offers, and later sold it at an auction sale for $5300, less commission of $250. Under the evidence the court committed no error in failing to find lack of diligence on the part of the plaintiffs in the sale of the equipment mentioned.

As noted, it is further urged by the plaintiffs that defendants’ agreement with Bloom was in fact executed on January 4, 1959, rather than on the date shown — December 26, 1958. The court found that the instrument was executed by Bloom and Green on January 4, 1959. Defendant Storms testified that it was prepared and signed by all the parties in the office of the attorney who prepared it on December 26, 1958. Bloom testified that at that time he placed all of the copies of the agreement, unsigned, in his pocket for further consideration and that on January 4, 1959, he met Horace Green, partner of defendant Storms, at a point on the Missouri side of the Missouri-Kansas State Line and both signed and executed the agreement, thus fixing the execution later than that of the plaintiffs’ mortgage not yet recorded. Prompt objection was made to such testimony on the ground that at the time of trial Green was deceased, citing Section 491.010 RSMo 1949, V.A.M.S. and the point was preserved for review.

Since, however, we have agreed with the trial court that defendants’ unrecorded agreement with Bloom dated December 26, 1958, did not divest Bloom’s title to the property involved, regardless of the date of its execution, but was merely a security device, and that the plaintiffs’ duly recorded mortgage on the same property took precedence over such agreement, the issue as to whether defendants’ agreement was executed December 26, 1958, or January 4, 1959, is moot and need not be determined. Of the $10,000 awarded plaintiffs by the judgment, the court correctly allocated $3870.05 to “Flat River insurance premiums” to be applied as a credit on any recovery in Suit No. 23,874, supra.

We find no error in the trial of this cause materially affecting the merits thereof. The judgment should be affirmed. The Special Commissioner so recommends.

The foregoing opinion of SAMUEL A. DEW, Special Commissioner, is adopted as the opinion of the Court. All concur.