author: CRITZ, C. CURETON, C. J.

text:
    BROOKS v. O’CONNOR.
    No. 5440.
    Supreme Court of Texas.
    March 4, 1931.

      See, also, 39 S.W.(2d) 22.
    R. H. Ward, Morris, Sewell & Morris, and A. M. John, all of Houston, for plaintiff in error.
    H. W. Wallace, of Cuero, and J. T. Line-baugh, of Victoria, for defendant in error.
   CRITZ, C.

On February 13, 1913, J. M. Rosborough conveyed, by general warranty deed, to E. F. Booty, the land in controversy in this suit, being all of Farm Tract No. 31, J. M. Rosborough Subdivision of the Valentina Garcia Four League Grant, in Jackson county, Tex., retaining the vendor’s lien to secure four notes for §1,050 each, due on or before one, two, three, and four years from date, respectively, all payable to J. M. Rosborough. The vendor’s lien was retained in the deed in the usual and customary language. In legal effect the deed also retained in Rosborough the superior title in the land to secure the payment of the notes.

On March 28, 1914, Rosborough, for a recited consideration of §4,528.03, conveyed and assigned the above four notes to Wm. J. O’Connor, executor of the estate of Thos. M. O’Connor, deceased. This transfer was by written instrument, and expressly conveyed the vendor’s lien and superior title in the land to the above grantee.

On the same date that Rosborough assigned these notes to O’Connor, March 28, 1914, E. F. Booty and wife, Gertrude Booty, executed to James McDonald, as trustee for Wm. J. O’Connor, executor, a deed of trust on the land in question to secure a note of even date with the deed of trust in the sum of §4,528.03, the amount paid to Rosborough by O’Connor for the four original notes. This last note matured March 28, 1919, and bore 8 per cent, interest. This deed of trust recited the fact that the §4,528.03 note thereby secured was given to take up and extend the four original vendor lien notes above described, and expressly preserved and carried forward the original lien, equities, and superior title as they theretofore existed.

Later, on October 5, 1915, E. F. Booty and wife Gertrude Booty, executed to L. W. O’Connor, trustee for Wm. J. O’Connor, executor, a deed of trust to secure a note for §4,890.27, maturing October 5, 1923, bearing 7 per cent, interest. This last note and deed of trust recites the fact that it is to take up and extend the note of March 28, 1914, for §4,528.03. . Also this last deed of trust preserves and brings forward the original vendor’s lien and superior title in the land in question.-

Both of the deeds of trust before mentioned cover the 160 acres of land conveyed to E. F. Booty by Rosborough above described.

Later, on January 20,1920, E. F. Booty and wife, Gertrude Booty, executed and delivered to L. W. O’Connor, trustee for Wm. J. O’Con-nor, executor, a blanket deed of trust on eight tracts of land in Jackson county, Tex., and one tract of land in Victoria county, Tex. The acreages of the Jackson county land are as follows: 213.1 acres, 160 acres, 160 acres, 127.3 acres, 160 acres, 187.3 acres, 279½ acres, and 80 acres. The Victoria county tract contained 251.3 acres. The 160-acre tract involved in this suit is one of the Jackson county tracts. This last deed of trust was given to secure a note for §4,500, dated of even date with the deed of trust, due December 20, 1920, and bears 8 per cent interest. This deed of trust recites the fact that it is second and inferior to nine several deeds of trust that are held by O’Connor, executor, against the nine several tracts included in the last blanket deed of trust. In other words, we conclude from the wording of this last deed of trust that the O’Connor estate already held a separate and independent indebtedness secured by a separate and independent deed of trust against each of the nine tracts included in the last blanket deed of trust, and. that the last blanket deed of trust was second and inferior to each of these nine former deeds of trust.

It seems that after the execution of the blanket deed of trust for §4,500 hereinabove mentioned, E. F. Booty became involved in considerable financial difficulties, and failed to meet the interest on the several indebted-nesses held by O’Connor, executor, and also failed to pay the taxes on the several tracts of land involved in the several deeds of trust and liens held by O’Connor, executor, and appealed to R. E. Brooks, his brother-in-law, for aid. Later, after considerable negotiations between O’Connor, executor, and Brooks, Brooks purchased the §4,500 note last above described, and the deed of trust lien securing same. O’Connor transferred this note and deed of trust to Brooks by written instrument, the transfer from. O’Connor, executor, to Brooks contained the following provision:

“The said Deed of Trust hereinabove referred to and herein assigned creates a blanket lien upon same eight parcels of land in Jackson County, Texas, and one parcel of land in Victoria County, Texas, and in making this transfer and assignment of the lien created by the Deed of Trust 'aforesaid the lien of said deed of trust is here declared to be secondary to and inferior to the liens described and défined and fixed by nine deeds of trust executed by D. W. O’Connor, Trustee, to secure Wm. J. O’Connor, Managing Executor under the will of Thos. M. O’Connor, deceased, in the payment of nine several notes; and in making this transfer and assignment grantor distinctly limits the lien of said deed of trust here assigned so that said lien is a lien secondary to the lien of said nine deeds of trust on said nine several parcels of land to the extent of the principal of said nine notes and the interest to accrue on said nine notes from the 1920 maturities of said interest on the principal of said notes and any and all future interest to accrue on said nine notes, and all interest on past due interest on said nine notes; and reserves the right to extend the time of payment of any interest that is now due or may become due on said nine notes or any of them and to enter into agreement with the said E. P. Booty and his wife, or E.- P. Booty alone to receive from the said E. P. Booty interest at the rate.of eight per cent per annum, on all past due interest that may accrue on said nine notes or any of them, and to grant such extension and to charge interest at the rate of eight per cent per annum on all* past due interest due and to become due on said nine notes or any of them without consulting the said R. E. Brooks; and any extension of the indebtedness represented by the note here now assigned shall contain a provision recognizing the right of grantor herein to extend the payment of interest and to charge interest at the rate of eight per cent per annum on all past due interest on said nine notes or any of them.
“At the time of executing this assignment the interest on all of said nine notes has been paid to the 1920 interest maturity date thereon and interest on interest on sums accruing as interest to 1920 interest maturity dates, leaving due upon the notes held' by grantor herein the principal of said nine notes and interest, and interest upon interest, accruing from 1920 interest maturity dates on said nine notes.”

It will be noted that this transfer expressly discloses that O’Connor, executor, retained a separate and distinct first lien against each of the nine tracts included in the blanket deed of trust, which was conveyed to Brooks. Purthermore, the transfer to Brooks expressly limits the prior rights of O’Connor, executor, to a first and superior lien and says nothing about retaining a superior title to each of the above nine tracts. Also it seems that about the time that Brooks took over the above $4,500 note from O’Connor, executor, by the written transfer above mentioned, he, as a part of the same general transaction paid to O’Connor, executor, several thousand dollars to be applied to interest, and taxes due by Booty on the nine tracts of land covered by the several individual deeds of trust retained by O’Connor, and' the blanket deed of trust purchased by Brooks.

After the above transactions had transpired, E. P. Booty died intestate on June 30, 1922, leaving surviving him his wife, Mrs. Gertrude Booty, and two minor children. Mrs. Booty, on October 30,1922, duly qualified as administratrix of the estate of E. P. Booty, deceased. Also in January, 1923, Mrs. Booty qualified as guardian of the estates of the two minor children of herself, and E. P. Booty, her deceased husband. Also it is admitted that Wm. J. O’Connor is the duly qualified and acting managing executor of the estate of Thos. M. O’Connor, deceased.

After the happening of the above events, O’Connor, executor, filed suit in the district court of Jackson county, Tex., against Mrs. Booty, individually, and as executor and guardian, and against the two minor children of E. P.. Booty, deceased, and also against Brooks in trespass to try title to recover the title and possession of the 160 acres of land here involved. In this suit O’Connor, executor, asserted his superior title to the 160 acres of land by virtue of being the holder of the original vendor lien notes, and superior title securing same. In this connection it will also be noted that O’Connor, .executor, has refused to submit his claim to the probate court. Also in this first suit the other eight tracts, and several liens and deeds of trust covering them, were not brought into litigation, but O’Connor, executor, only brought into litigation this one 160-acre tract, and asserted a superior title therein as against all of the Bootys, the Booty estate, and Brooks.

The Bootys, the. Booty estate, and Brooks answered in the above case by various pleas, which in the interest of brevity we do not here set out, but refer to the opinion of the Court of Civil Appeals, 287 S. W. 282, for a full statement thereof.

On trial in the district court in this first case judgment was rendered for O’Connor, executor, against all of the Bootys, the Booty estate, and Brooks, awarding O’Connor, executor, the title and possession of the 160 acres of land here involved, and divesting title out of the Bootys, the Booty estate, and Brooks, and adjudging that they and each of them had no interest therein.

The above case was duly appealed by the Bootys, the Bqoty estate, and, Brooks to the Court of Civil Appeals at Galveston, which court on original hearing in all things affirmed the judgment of the district court.

The Bootys and the Booty estate proceeded no further with the litigation, and filed no motion for rehearing in the above first case. Brooks, however, filed a motion for rehearing, and on consideration of such motion, the Court of Civil Appeals granted the same and set aside its original judgment in so far. as it applied to Brooks, and in so doing held that O’Connor, executor, had no right to assert a superior title in the land against Brooks. The final result of this first case was that judgment was rendered by the Court of Civil Appeals affirming the judgment of the district court as against the Bootys and the Booty estate, but reversing _ and rendering such judgment as applied to Brooks. We here quote the following portion of the opinion of the Court of Civil Appeals (287 S. W. 282, 290) in the first case.

“When,, therefore, they came to embody their mutual understanding thus arrived at in the formal assignment, they affirmatively provided that Brooks’ debt and mortgage should constitute a lien on the land alongside that of the appellees; the only limitation or reservation expressed being that his lien should be secondary to theirs ‘to the extent of the principal and interest’ on their debt. In the light of the undisputed evidence referred to, it becomes plain that the purpose and effect of these provisions was to merely postpone appellant’s note and lien to the first lien the appellees held, thereby preventing any possibility of his participating ratably with them in any foreclosure under their debt, and not to still preserve to themselves an originally existing right to rescind the sale and recover the land, as we before concluded.

“In the ease of Edwards v. Dickson, 66 Tex. 617, 2 S. ,W. [718], 720, the Supreme Court, in quoting 2 Pomeroy on Equity, § 804, say:

“ ‘Equitable estoppel is the effect of the voluntary conduct of a party whereby he is precluded, both at law and in equity, from asserting the rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person, who has, in good faith, relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right either of property, of contract, or of remedy.’

“The Supreme Court of the United States, in Dickerson v. Colgrove, 100 U. S. 578, 25 L. Ed. 618, thus states the ground upon which equitable estoppel rests:

“ ‘The vital principle is that he who by his language or conduct leads another tovdo what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted.’

“We think this principle rules the case at bar. From the uncontroverted proof it now seems to us to conclusively appear that the language and conduct of the appellees with reference to the relative, status of the two liens they held led the appellant to bpy the second one in reliance upon an understanding that it would be subordinate to theirs only in respect to priority of payment, and that, knowing then that he so acted, they should not now be permitted to disappoint his expectation.

“It follows from these conclusions that the motion below of appellant Brooks for peremptory instruction in his behalf should have been granted, and that both courts have heretofore erred in not so holding. His motion for rehearing will therefore be granted, and, in so far as concerns him, the prior judgments of both courts will be reversed, and judgment will here De entered that appellees take nothing against him on their suit to recover the land. No motion for rehearing having been filed by the other appellant, our former judgment as to her remains undisturbed. This judgment shall in nowise affect the O’Connors’ right as against Brooks to foreclose their prior lien.

“Motion of appellant Brooks for rehearing granted, and trial court’s judgment as to him reversed and rendered.”

The effect of the above holding, and the judgment thereunder, was to divest the Boo-tys, and the Booty estate, of all title and interest in the 160 acres of land here involved, anb vest all title owned or held by them in O’Connor, executor, but to leave O’Connor, executor, and Brooks, as between themselves, with thejr respective liens. This left O’Con-nor, executor, with a first lien and Brooks with a second lien,. Also the above judgment has effect as between O’Connor and Brooks to decree that O’Connor has no superior title, but only a bare first lien.

The Supreme Court refused writ of error in the above cause and the judgment became final.

After the' rendition of the final judgment by the Court of Civil Appeals in the first cause and the refusal of the writ.of error, the instant suit was filed by O’Connor, executor, against R. E. Brooks. This second suit is the cause involved in this appeal.

The present suit wa^ filed by Wm. J. O’Connor et al. against R. E. Brooks and seems to be a suit for the settlement and adjustment of rights between the parties as regards this 160 acres of land alone, and in the alternative to have the record of Brooks’ second lien upon the land removed as a cloud upon the O’Connor’s title. The plaintiffs’ pleadings are very voluminous, and are fully stated in the dpinion of the Court of Civil Appeals, 15 S.W.(2d) 182, and we refer to that opinion for a full statement thereof We, however, make the following condensed statement of O’Connor’s pleadings:

It is alleged that E. E. Booty is dead; that Mrs. Gertrude Booty, his surviving wife, is thp duly appointed, qualified, and acting ad-ministratrix of his estate, and also the duly appointed', qualified, and acting guardian of the estates of the two minor children of E. P. Booty, deceased, and Mrs. Gertrude Booty, and that the administration was then pending in the county court of Jackson county, Tex. It is also alleged that such administration had been in force since Oetocber 30, 1922. The petition then pleads the history and various transactions whereby E. E. Booty, deceased, acquired the 160 acres of land in litigation here; the various notes and deeds of trust executed by E. P. Booty for the benefit of the O’Connors; and the transactions between O’Connor, executor, and Brooks. The pleadings then allege the former suit between the. O’Connors on the one side, and the Bootys and Brooks on the other, and the result thereof.

After pleading as above, the O’Connors then pleaded the transactions by which Brooks acquired the $4,500 note secured by the blanket deed of trust against the- eight tracts of land in Jackson county, and the one tract in Victoria county. It is then alleged that this blanket deed of trust constitutes a lien on the 160 acres in question infe-ror to the deed of trust and lien held by the plaintiffs; and that plaintiffs do not know what amount is due on said second deed of trust. It is then alleged that the plaintiffs have requested Brooks to pay them the amount due upon their purchase money notes, and have offered to receive the same in satisfaction of their claim against the land, and that Brooks has failed and refused and still fails and refuses to pay, or to offer to pay the plaintiffs the amount due upon their purchase-money note.

The plaintiffs then invoke the equity powers of the district^ court of Jackson county, Tex., to settle the equities between them in the manner fully set out in the opinion of the Court of Civil Appeals, and finally pray as follows:

“Premises considered, plaintiffs prdy that defendant be cited in the terms of the law to appear and answer this petition, and that the defendant be required to set up all of his claims, rights and interests upon and .to the land aforesaid, that if the said Brooks fails by his answer herein to show or allege that he has any legal or equitable rights or liens in or to said land, or some of it, or if upon final hearing it be determined that said Brooks has no lien upon said land, or any of it, that then plaintiffs have judgment against said Brooks removing all said.cloud upon their title to said land and quieting their said title; and that if it be determined that said Brooks in fact has any lien upon said land, or any of it, securing any amount justly due him, that the amount of same he determined by the judgment of the court in this cause, and that the said lien for such amount be determined and adjudged to be inferior and subordinate to the rights of plaintiffs and also in such event that the court hear and determine from the evidence the amount legally and justly due plaintiffs upon the purchase money notes aforesaid and the renewals thereof, with interest and attorneys fee, and adjudge and decree that the same is secured by paramount lien upon all of said land in every respect superior and prior to the rights of defendant, Brooks, and that then the court by its decree herein foreclose the said superior right and lien of plaintiffs as against the said Brooks and order the sale of all of said land and premises as under execution and direct that the proceeds of such sale be first applied to the payment of all costs of this action and costs of sale, and, second, to the payment of the amount so adjudged and determined to be due these plaintiffs, and, third, that the remainder of such proceeds be applied to' such claim of defendant, Brooks, or otherwise, as the facts may warrant. And plaintiffs further pray for all such other and further relief, general and special, legal and equitable, as they may show themselves entitled to receive, and as in duty bound will ever pray.”

The pleadings of the defendant Brooks are fairly stated in the opinion of the Court of Civil Appeals [15 S.W.(2d) 182, 185], and we copy the following portion of such opinion:

“ ‘Now comes defendant, R. E. Brooks, and in answer to plaintiffs’ original petition filed herein, states to the court that this court ought not to entertain the cause of'action set forth therein and to further take cognizance of the same, because this court has no jurisdiction of the matters and things set forth therein, but exclusive jurisdiction of the same is vested in the Probate Court of Jackson County, Texas, for this:’
“This plea, which is presented as a part of his amended answer on which the case was tried, then sets,out the substance of the allegations of plaintiffs’ petition as to the execution of the vendor’s lien notes by E. P. Booty, and the transfer of these notes, together with the superior title held by the vendor of the land, to plaintiffs, and also the subsequent execution by Booty and wife of a $4,500 note to plaintiffs’ predecessor in title, secured by a deed of trust on the land, and the transfer and assignment to defendant of said note, together with the lien created by said deed of trust to secure its payment. The plea further sets out the allegations 'of plaintiffs’ petition, that by the express terms of the transfer of said note and lien the defendant Brooks ‘contracted, agreed and bound himself with plaintiffs that such second lien deed of trust should be and now is in every respect inferior and junior to the rights, title, liens and interests of plaintiffs in said land to the extent of the purchase money and interest and attorney’s fees thereon.’ It is then alleged, in the answer, that:
“ ‘This defendant admits, as alleged by plaintiffs, that plaintiffs obtained the note set out in plaintiffs’ petition for $4,500.00, and received the deed of trust from the said Booty and wife to secure the same, and that plaintiff assigned said note and said deed of trust and the lien thereof to this defendant, and that it was expressly provided and stipulated in said assignment that the note for $4,500.00 and the lien in the deed of trust to secure the same expressly provided that this defendant in accepting said assignment did so with the distinct agreement and understanding that the same was in every respect junior, subordinate and secondary to the lien of plaintiffs sought to be foreclosed in this case; and this defendant avers that he has never claimed to the contrary, but has always admitted and now admits and asserts that the said lien transferred to him, together with the transfer of said $4,500.00 note, is junior, subordinate and secondary to the lien of plaintiffs.
“ ‘This defendant further says that he has no claim to said tract of land or interest in the same of any character or sort and has not and does not now assert the same save and except as a junior lien holder upon said land to secure the indebtedness of said Booty to him, his said liens as aforesaid being subordinate and secondary and junior to that of the plaintiffs; that there has never been any issue or dispute between plaintiffs and this defendant as to the priority of plaintiffs’ said lien on said tract of land, and this defendant further avers that there has never existed and does not now exist any equities or conflicting claims of any sort to be adjusted between plaintiff and this defendant. That the undisputed facts are that plaintiffs have a prior and undisputed indebtedness secured by liens on the lands in controversy, which are first and superior to the indebtedness and liens of this defendant on said land.
“ ‘This defendant further avers that in the assignment by plaintiffs to this defendant of the $4,500.00 note, together with the deed of trust securing the same, as alleged by plaintiffs, it is expressly stipulated and provided therein that the said debt evidenced by said $4,500.00 note and the said deed of trust executed to secure the same, were junior, subordinate and secondary to the debt and lien sought to be foreclosed by plaintiffs in this cause, and defendant asserts that this defendant’s qlaim of lien on said land to secure said $4,500.00 note cannot and does not constitute any cloud upon plaintiff’s title, as said deed of assignment shows upon its face that the defendant’s said lien is subordinate, secondary, junior and inferior to plaintiff’s said lien.
“ ‘That this court, by reason thereof, has no jurisdiction of the matters and things set forth in plaintiffs’ said petition, but that such matters and things are exclusively cognizable in the Probate Court of Jackson County, Texas.
“ ‘That it is true that the defendant E. F. Booty died on the 30th day of June, 1922, in the County of Jackson, State of Texas, and that he died intestate, and that at the time of his death he was a resident of the County of Jackson, State of Texas; that on the 18th day of October, A. D. 1922, the defendant Mrs. Gertrude Booty was by decree of the County Court of Jackson County, Texas, appointed Administratrix of the estate of E. E. Booty, deceased, and that she thereafter gave a bond as such administratrix, in the amount fixed by the court and 'as required by law, and which bond has been duly approved by the Judge of said court; that on the 30th day of October, A. D. 1922, the said Gertrude Booty made and filed in said court her oath as said administratrix, and on the 30th day of October, 1922, letters of administration on the estate of said E. E. Booty, deceased, were granted to her and she thereby became and continued to be and is now the duly qualified and acting administratrix of the estate of E. F. Booty, deceased; that such administration is still pending and open, having never been closed.
“ ‘Wherefore, this defendant prays that this court will not take further cognizance of the matters and things set forth and contained in plaintiff’s said petition, but that this court will dismiss the same.’
“This plea was sworn to by the defendant.
“The defendant further answered as follows:
“ ‘And should this defendant’s plea to the jurisdiction of the court be overruled, without any manner waiving the same, but still insisting upon and relying upon the same, defendant for further answer to such petition avers and states:
“ T. That he demurs to the allegations in the same and says that the same are insufficient in law and show no cause of action against this defendant.
“ ‘2. Specially excepting to the allegations in said petition, this defendant says that the same are insufficient in law because it is not averred in said petition that the debt and lien of plaintiffs were ever presented to the said administratrix of the estate of E. F. Booty, deceased, or to the Probate Judge of Jackson County, Texas, for allowance and approval, as required by law; nor is there any averment therein that said administratrix has ever, refused to allow said lien or debt of plaintiffs, or that the Probate. Court of Jackson County has ever refused to approve said lien or debt.
“ ‘3. Defendant further specially excepts to said petition because said allegations show upon their faces that the Probate Court, of Jackson County alone has jurisdiction of the matters and things set forth in said petition, and has exclusive jurisdiction, over the enforcement and foreclosure of plaintiffs’ said debt and lien, and that this court has no jurisdiction thereof.
‘4. Defendant specially excepts to that part of the prayer in plaintiffs’ said amended original petition whereby they seek the relief that their superior title vendor’s lien and deed of trust lien on said land to be established, fixed and decreed to be in every respect prior, paramount and superior to any and every right of this defendant, and that the court by its decree not only determine and adjudge the amount of plaintiffs’ indebtedness, but that the plaintiffs’ lien be foreclosed, and that the decree of this court order the sale of all lands and premises as under execution, and that the proceeds of such sale be applied to the amount due the plaintiffs as determined by the decree of this court, because even if this court has jurisdiction to foreclose the liens of plaintiffs, that this court would not have jurisdiction to foreclose the lien's of plaintiffs and order the sale of said property because whatever judgment this court should render in the premises must be enforced by and through the Probate Court alone, this court having no jurisdiction or authority to enforce its decree of foreclosure.
“ ‘Defendant further prays that plaintiffs take nothing by their suit, but that this cause of action be dismissed and this defendant go hence without day and have judgment for costs.’ ”

The case was finally tried in the district court without a jury and resulted in a judgment for the O’Connors vesting them with title in the land, and canceling and annulling Brooks’ lien. We here copy the following from such judgment:

“Be it remembered that the above styled and numbered cause was regularly reached and called for trial on this, the 29th day of September, A. D. 1927, whereupon came the plaintiffs and defendant in person and by attorney, and waived a jury, and announced that they would submit all matters of fact as well of law to the court, and all parties announcing ready for trial, thereupon the defendant presented his plea and demurrers to the jurisdiction of this court in this cause, and the court having heard the same, and the evidence thereon adduced (the defendant announcing that he introduced his evidence solely under and for the purpose of sustaining his plea to the jurisdiction, and for no other purpose), and the court having heard arguments of counsel is of the opinion that said plea and demurrers to the jurisdiction of the court in this cause are not well taken and should be overruled, and it is ordered, adjudged and decreed by the court that defendant’s plea to the jurisdiction and his exceptions to plaintiffs’ petition challenging the jurisdiction of the court be and they are hereby in all respects overruled, to which action and judgment of the court the defendant then and there in open court excepted.
“And the cause proceeding to trial upon the merits of the case, and the defendant presenting his general and special exceptions to the plaintiffs’ petition, and the court having heard the same and arguments thereon, is of the opinion that same are not well taken, and it is accordingly by the court ordered, adjudged and decreed that each and all of said general and special exceptions of the defendant be and the same are hereby in all respects overruled, to which action and judgment of the court the defendant then and there in open court excepted.
“Thereupon, the court having 'heard the plaintiffs’ petition, the defendant announced to the court that he would not further plead in this cause other than his plea and exceptions to the jurisdiction of the court and his general' and special exceptions to plaintiffs’ petition and prayer that plaintiffs take nothing by this suit, nor submit any evidence whatsoever save the evidence he introduced under and in support of his plea to the jurisdiction of the court, and said nothing in bar of plaintiffs’ action. Wherefore the pláintiffs ought to recover as prayed in and'according to the merits of the cause of action set forth in their petition. And the court having heard the pleadings, evidence and remarks of counsel, and the defendant expressly refusing to assert or set up in answer to the merits of the suit, any claim, interest or lien in or upon the land hereinafter described, and specifically refusing to submit any proof or evidence to the court tending to prove or establish any right, title, lien or interest in or upon said land, or the nature, extent or amount of his claims, liens or interest upon or in said land, if any he has, the court finds and adjudges that plaintiffs are the legal owners of the land and premises hereinafter described and are entitled to have the cloud on their.title to the same removed and their title quieted as hereinafter decreed.”

The judgment then proceeds to cancel and annul Brooks’ deed of trust and lien in so far as same affects or clouds the title of the O’Connors in the 160 acres of land here involved, and decrees that Brooks shall be “forever debarred and foreclosed from having, demanding, setting up or claiming in any way or by any proceeding any right, title, mortgage or interest, claim or demand, legal or equitable in or to the land or any part thereof, by reason of said deed of trust or the promissory note described therein.” The judgment then decrees costs against Brooks. Brooks appealed from the above judgment to the Oourt of Civil Appeals at Galveston, which court in all things affirmed the judgment of the district court.'. 15 S.W.(2d) 182, Justice Graves dissenting. The case is before this court on writ of error granted on application of Brooks.

The case is presented in this court by various assignments of error, but as we construe them all of such assignments amount to two main contentions: (a) That the district court was utterly without jurisdiction to hear and determine the case, and (b) that the district-court had no right or power to render the judgment rendered.

We shall first proceed to discuss and decide the assignments which assail the power or jurisdiction of the district court to entertain the cause at all. As we understand the contentions of the plaintiff in error in this respect, they amount to this. It being conclusively shown that E. IT. Booty is dead, and that an administration is pending on his estate since a few months after his death in the county court of Jackson county, and there being no dispute between the parties hereto as to the priority of liens, the county or pro- ■ bate court is the only court vested with jurisdiction to foreclose the lien on the land in question.

In our opinion such assignments and contentions should be overruled. When the former cause between the, O’Connors upon the one hand, and the Bootys and Brooks on the other, concerning this very land, and largely these very issues, was terminated by final judgment which divested the E. IP. Booty estate and the Bootys of all title in the land, and vested same in the O’Connors, the effect of such judgment was to abrogate and terminate all liens the O’Connors had against the land in so far as the Booty estate was concerned, and at the same time to terminate, annul, and satisfy the indebtedness secured by the O’Connors’ deed of trust in so far as same constituted a claim against the E. F. Booty estate, but to leave such deed of trust and indebtedness in force in so far as same constituted a bare first lien on the 160 acres of land as between the O’Connors and Brooks. This being the case, of course the O’Connors could not invoke the jurisdiction of the probate court. They had no claim against the Booty estate, and no lien to enforce on any property belonging to it.

Since the O’Connors hád no claim against the Booty estate and no lien on any property belonging to it, but by express judgment and decree of the Court of Civil Appeals at Galveston did have a cause of action to be litigated and adjudicated with Brooks, it follows that some court must have jurisdiction to hear and determine the same. The cause was one concerning land and a lien on land, and from its very nature it is such a cause that the district court is the only tribunal with jurisdiction in the premises. Gregory v. Ward, 118 Tex. 526, 18 S.W.(2d) 1049.

In- the above-cited case our Supreme Court, speaking through Judge Cureton, held that in a case which from its nature involves controversies and issues over which, and between parties over whom, the probate court could not have jurisdiction, and the controversy and partiesi are such that the powers of the probate court are inadequate to grant full relief to which a party is entitled, the district court has jurisdiction and may grant relief. In support of this holding the Supreme Court cites Cannon v. McDaniel, 46 Tex. 303 ; George v. Ryon, 94 Tex. 317, 60 S. W. 427; Lauraine v. Ashe, 109 Tex. 69-75, 191 S. W. 563, 198 S. W. 501; Lauraine v. Masterson (Tex. Civ. App.) 193 S. W. 708.

It is true that in Gregory v. Ward, supra, the court held that the judgment must be performed through the probate court. This was the correct holding in that case,- but in the case at bar such a disposition is impossible because all title of the Booty estate in the 160 acres of land in question, and all liens of the O’Connors have been wiped out and destroyed in so far as any issue between the O’Connors and the Booty estate is concerned. Also the debt represented by the deed of trust has been wiped out, and satisfied in’ so far as any issue between the O’Connors and the Booty estate is concerned. • In such a case the probate court cannot allow a claim for O’Connor, executor, nor foreclose a lien against the Booty estate in his favor. Also if the district court cannot grant relief as between the O’Connors and Brooks, then the O’Connors are left with a right decreed to them by a final judgment of the Court of Civil Appeals, but absolutely without a remedy and without a forum in which to enforce such right.

Also, as before stated, Brooks has a blanket lien against nine tracts of land, one of which is the 160 acres here involved. The O’Connors have a separate and distinct lien against each of these nine tracts. Manifestly, Brooks would be unable, in a suit involving one tract only, to assert exactly what interest or lien he has in that particular tract. It follows that in order for all rights, -liens, and equities to be fully and equitably adjusted, it will be necessary to bring all liens, lands, and parties interested into one suit.

For the reasons stated, the judgments of the Court of Civil Appeals and the district court should be reversed, and the cause remanded to the district court for further proceedings in accordance with this opinion.

CURETON, C. J.

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.


source: Caselaw Access Project

author: CRITZ", C. CURETON, O. J.

license: Public Domain

text:
    BROOKS et al. v. O’CONNOR et al.
    No. 5404.
    Supreme Court of Texas.
    March 4, 1931.
    R. I-I. Ward, Morris, Sewell & Morris, and A. M. John, all of Houston, and John T. Vance and Rose & Sample, all of Edna, for plaintiff in error Gertrude Booty.
    H. W. Wallace, of Cuero, and J. T. Line-baugh, of Victoria, for defendants in error.
   CRITZ", C.

This is a companion case to cause No. 5440, R. E. Brooks v. Wm. J. O’Connor et al., 39 S.W.(2d) 14, this day decided by this court. Most of the facts and circumstances disclosed by this record are disclosed and set out by the opinion in cause No. 5440, above mentioned. We nefer to that opinion in so far as the matters and things therein disclosed and discussed apply here.

This suit was instituted in the district court of Jackson county, Tex., by Wm. J. O’Connor, executor, et al., against Mrs. Gertrude Booty, individually and as administratrix of the estate of her deceased husband, and also as guardian of the estates of the two minor children of Mrs. "Gertrude Booty and E. F. Booty, deceased, and also against the two children. R. E. Brooks, C. W. Boyce, Manuel Zambrano, and Saturnina Nanes were also made defendants. Thie petition is in trespass to try title to recover the title and possession of 213.1 acres of land in Jackson county, Tex., being subdivision No. 1 made of the lands in Valentine Garcia Grant, formerly belonging to J. M. Rosborough, fully described in said petition. ' On the trial of .the case the same facts with reference to the death of Thos. M. O’Connor and E. F. Booty, and the qualifications of the executor, administrator, and guardian, respectively, were shown as in cause No. 5440, supra.

Also the following facts were shown: On August 1, 1912, C. E. Stark and wife conveyed the 213.1 acres of land here involved to W. J. Upshaw and C. M. Mears. This deed recited a consideration of $925.70 cash and two notes aggregating $6,000, being one note for $1,000 and one for $5,000. Also this deed retained the vendor’s lien and superior- title in Stark to secure the payment of these notes.

Later, on September 30, 1912, Upshaw and wife, and Mears and wife, conveyed the above lands to E. F. Booty for a recited consideration of $925.70 cash and the assumption by Booty of the two notes above mentioned. This conveyance retained the vendor’s lien and superior title to secure the payment of the notes assumed.

Later, on September 10, 1917, C. E. Stark assigned the above $5,000 note given by Up-shaw and Mears to him and later assumed by Booty to Wm. J. O’Connor, 'executor. The recited consideration for this conveyance was $5,306.55. This instrument also conveyed the superior title and vendor’s lien.

Later, on September 18, 1917, E. F. Booty and wife executed and deliyered to L. W. O’Connor, trustee for Wm. J. O’Connor, executor, a deed of trust to the 213.1 acres of land to secure the payment of a note for $5,-500, of even date with the deed of trust. This note was payable to Wm. J. O’Connor, executor, and due September 18, 1922. It bore interest at 7 per cent. This deed of trust and note recites the fact that it is to take up and extend the principal and interest due on the above $5,000 note conveyed to O’Connor by Upshaw and Mears. This instrument also expressly preserves and brings forward the original vendor’s lien and superior title.

' Later, on January 20, 1920, E. F. Booty and wife, Gertrude Booty, executed and delivered to L. W. O’Connor, trustee for Wm. J. O’Connor, executor, a deed of trust on eight tracts of land in Jackson county, Tex., and one tract of land in Victoria county, Tex., to secure a note for $4,500. The 213.1 acres here involved was one of the nine tracts included in this blanket deed of trust. This deed of trust and note were later transferred and assigned to R. E. Brooks in the manner and under the circumstances shown in our opinion in cause No. 5440, supra.

It is also shown that no part of the $5,500 note for original purchase money held by O’Connor has been paid, and no interest has been paid thereon since September, 1921.

In this condition of the record this suit was filed by the O’Connors against the above named defendants. The O’Connors rely- on the superior title held by them by virtue of their being, the holders of the original vendor’s lien and superior title.

The defendants Boyce, Zambrano, and Nanes all answered disclaiming any interest in the land, and we are not further concerned with them.

The defendant Brooks filed original and amended answers in which to plead the general history of the title and his connection therewith, including the details of his negotiations and transactions with O’Connor, executor, setting up in detail the moneys paid by him to O’Connor, executor, the purpose for which such money was paid and the transactions by which he took over the $4,500 note and blanket deed of trust securing the same. Brooks also pleaded the fully history and the entire matter which has been set out in our opinion in cause No. 5440. Brooks also pleaded the death of E. E. Booty, the administration on his estate, and pleaded to the jurisdiction of the district court. Also Brooks pleaded waiver and estoppel on the part of the O’Connors. As we interpret these pleadings they ask for no affirmative relief.

Mrs. Booty answered in her individual capacity, and as administratrix and guardian, and pleaded limitation and also pleaded waiver and estoppel.

When the defendant Brooks asked leave to file his amended answer, plaintiffs announced to the court that they desired to dismiss their suit against him. Counsel for Brooks thereupon reguested the court to delay action until next morning. All parties agreed to this. The next morning Brooks filed his amended answer and the O’Connors renewed their motion to dismiss said suit against him without prejudice to any of his rights. This motion was granted by the court and Brooks ordered dismissed from the suit.

After the above transaction, Brooks filed his plea of intervention. This pleading, omit■ting formal parts, is as follows:

“Intervenor states and alleges that the only basis upon which plaintiffs are seeking to .maintain an action of trespass to try title herein is the rescission of a certain deed of conveyance wherein W. J. Upshaw and wife and C. M. Hears, and wife conveyed to E. F. Booty, Two Hundred Thirteen and one tenth, (213.1) acres of land described in plaintiff’s petition, by reason of the fact that the purchase money note for the principal sum of Five Thousand $5,000.00 Dollars, and renewals thereof had not been paid, such original note and the renewals thereof having been secured by a Vendor’s lien reserved in said deed in favor of the Grantors in said conveyance and by the retention by said Grantors of the superior title to said land securing the payment of the purchase money and which purchase money note was thereafter transferred to plaintiffs as well as the Vendors Lien and superior title securing the payment of said notes.
“Intervenor shows to the court that on January 20th, 1920, E. F. Booty and wife executed and delivered to L. W. O’Connor, trustee, a certain deed of trust covering among other lands, the land described in Plaintiffs Petition, for the purpbse of securing the payment of one (1) note for Four Thousand Five Hundred ($4,500.00) Dollars, payable to the order of William J. O’Connor, Managing Executor under the will of Thos. M. O’Con-nor, deceased, which note, together with the lien securing the payment of same was thereafter transferred unto said R. E. Brooks, who is now the legal owner and holder thereof, together with renewals of said note and lien and which said note and lien is now valid and subsisting claim and lien against the estate of E. F. Booty, deceased. That plaintiffs are attempting by said suit to defeat the rights of this intervenor and are rendering his said claims and lien inoperative and unenforceable in attempting to rescind the conveyance of said land whereby said land was sold and conveyed to E. F. Booty.
“This intervenor says that plaintiffs are estopped by their acts and conduct in rescinding said sale as will be fully shown by facts and evidence introduced under defendant’s plea of not guilty, and the said R. E. Brooks alleges that in order to protect his interest it is necessary and proper that he should be permitted to become a party to this suit in order that he may be able to assert and show that the plaintiffs herein have not the right to rescind the aforesaid conveyance and in this connection said Brooks alleges that he is entitled to present and maintain all such defenses as the defendants in said suit, have set up and alleged and this Intervenor here now adopts and makes his own all of the pleadings of said defendants in this case. *
“Wherefore said R. E. Brooks prays that he may be permitted to intervene herein and become a party to this suit for the reasons here-inabove set up and which he will be able to assert and prove tinder said “Plea of Not Guilty” and Re further prays for such other relief, general and special, that he may be able to show himself justly entitled to either in law or in equity.”

The O’Connors moved to strike out this plea of intervention for various reasons set out in the opinion of the Court of Civil Appeals. As we interpret this plea of intervention, it did not pray for any affirmative relief.

We here refer to and adopt the statement of the case and the pleadings set out in the opinion of the Court of Civil Appeals. 13 S.W. (2d) 220.

The case was finally tried in the district court with a jury, but at the close of the evidence the plea of intervention was stricken and the intervention dismissed. The trial court then peremptorily instructed a jury for the O’Connors. This verdict was returned as directed and judgment entered for the O’Connors against the Bootys and the Booty estate, divesting them of any right, title, or interest in the land in question and vesting the same in the O’Connors. No judgment was entered against Brooks other than to dismiss him from the case. The Bootys and Brooks both appealed to the Court of Civil Appeals at Galveston, which court in all things affirmed the judgment of the district court. 13 S.W.(2d) 220. The case is in the Supreme Court on two applications for writ of error, one filed by the Bootys and one by Brooks. Both applications were granted.

Under the above record, we think the Court of. Civil Appeals correctly held that the plaintiffs had the right to dismiss their case against Brooks. Under our statutes, article 2182, R. C. S. 1925, the plaintiff has the right to take a nonsuit, where a case is tried before a jury at-any time before the jury has retired. This right is absolute and cannot be denied. Of course, where the plaintiff dismisses his suit against the defendant, the defendant is not prejudiced as to any claim for affirmative relief. When we come to examine the pleadings of the defendant Brooks, we find that both by his amended answer and his plea in intervention, he pleaded purely defensively and not offensively, and in neither of such pleadings did he ask any affirmative relief. He merely pleaded a defense to the cause that had been dismissed.

Under such a record the trial court committed no error in granting the plaintiff a nonsuit against Brooks, and in dismissing his plea of intervention. We have carefully read .and considered the opinion of the Court of Civil Appeals with respect to this question, and think their holding and reasoning correct.

The brief of the Bootys in the Court of Civil Appeals contains only a statement of the case, and the assignments and propositions thereunder, upon which the Bootys rely for a reversal. The brief then contains the following:

“As each and all of the propositions presented in this brief have been presented at length in the brief of appellant Brooks, we trust the court, in the interest of economy of labor .and time, will permit these appellants, in support of their appeal, to adopt the statement of the nature and result of the case, the propositions, authorities and argument set forth in the brief of appellant Brooks filed herein. There may be no precedent for this, but as the facts controlling this case are the same, both in the appeal of appellant Brooks and these appellants, and the law being the same, we are unable to see, as the decision of this court in regard thereto as to appellant Brooks will necessarily determine this appeal as to these appellants, why this procedure may not be permitted by this court.”

As we interpret the brief in the Court of Civil Appeals and their application for the writ in the Supreme Court, the Bootys are making the same contentions for reversal that are made by Brooks. It follows that the overruling of the assignments contained in-Brooks’ application results in overruling the assignments contained in the Bootys” application.

However, were we to give the Booty brief a more liberal construction and construe it to mean that the facts pleaded as a waiver and estoppel by Brooks as a defense, to the cause of action asserted by the O’Connors against him prior to his dismissal from the ease also constituted a waiver and estoppel as to the Bootys, still the assignments of the Bootys should be overruled, as Brooks pleaded nothing that would constitute a waiver or estop-pel as to the cause of action asserted by the O’Connors against the Bootys. We therefore overrule all assignments contained in the application for the writ of error filed by the Bootys.

The result of this opinion is to leave all matters between the O’Connors and Brooks undecided and unprejudiced.

The judgment of the Court of Civil Appeals, which affirms the judgment of the district court, should be affirmed.

CURETON, O. J.

The foregoing opinion is adopted as the opinion of,the Supreme Court, and judgment will be entered in accordance therewith.


author: LEDDY, C. CURETON, C. J.

text:
    STANDARD SAVINGS & LOAN ASS’N v. FITTS et ux.
    No. 5716.
    Supreme Court of Texas.
    April 15, 1931.
    Clark, Harrell & Clark, T. D. Starnes, and Starnes, James, Clower & Gibson, all of Greenville, for plaintiff in error.
    Huffar & Ragsdale, of Greenville, for defendants in error.
   LEDDY, C.

This was an action of trespass to try title instituted by plaintiff in error, Standard Savings & Loan Association, against defendants in error, Louis Pitts and wife, Emma Pitts, in which it sought to recover the title and possession to a house and lot situated in the city of Greenville, Tex.

Upon a trial before the court, without the intervention of a jury, judgment was rendered denying plaintiff in error the recovery sought and a trustee’s deed under which plaintiff in error claimed title to the property was canceled.

The trial court filed findings of fact, which are not challenged by‘either party. It appears therefrom that defendants in - error, Louis Pitts and wife, Emma Pitts, on April 14, 1922, owned the property in controversy, which they used and occupied as a homestead. It seems that Pitts was desirous of raising some money for the purpose of discharging a note owing by. him to Brooks and Neville. Brooks informed Fitts that no loan could be procured against this property because of its homestead character, but that, if he and his wife would deed the property to. him (Brooks) and taken his note for $1,000, he would use the note as a basis for procuring a loan, and, when such loan was secured, he would re-convey the property to them. This scheme was carried out, and plaintiff in error purchased, before maturity and for value, the $1,000 note thereby created. It is conceded that it was an innocent purchaser of the note without notice of the simulated character of the conveyance from Pitts to Brooks, unless the knowledge of its agent Holmes acquired in the transaction in which it was created, should be imputed to it.

Plaintiff in error’s agent’s connection with the transaction is fully revealed by the fifth paragraph of the court’s findings of fact, which is as follows: .

“That A. R. Holmes was the agent of the Standard Savings & Loan Association, at Greenville, to the extent of soliciting loans and submitting applications for same to the company for approval, but was without authority to close loans until the board of directors of the company had approved the application: That Holmes, the agent of the company, knew that the conveyance to Brooks, by Pitts and wife was simulated and was made for the fraudulent purpose of creating an apparent lien and procuring thereon a loan against the homestead; and that he withheld such knowledge from his principal, the plaintiff, Standard Savings & Loan Association, and against its positive instruction not to take or submit an application for a loan where there was a suspicion of homestead evasion: That prior to the execution of the deed by Pitts and wife to Brooks, he (Holmes) explained to the-defendant, Emma Pitts, that the purpose of executing the deed, was to create an apparent lien and procure thereon a loan against the homestead sufficient-to pay her husband’s truck note and that Brooks would reeouvey the property as soon as the loan was procured.”

Plaintiff in error contends that it acquired a good title to this property under the trustee’s sale, which was made to secure the payment of the indebtedness held by it, because, under the facts found by the trial court, the knowledge of its agent as to the fictitious character of the sale of their homestead by Pitts and wife to Brooks should not be imputed to it. >

The Court of Civil Appeals [24 S.W.(2d) 507] concluded that, in the absence of a specific finding by the trial court of collusion between Fitts and wife and plaintiff in error’s agent Holmes, in support of the judgment an implied finding to the contrary should be presumed. We are unable to agree with the proposition that it does not affirmatively appear from the findings of fact made by the trial court there was collusion between plaintiff in error’s agent Holmes and Pitts and wife, the borrowers, in the transaction by which the loan was secured from plaintiff in error.

It is true the trial court does not find in express terms that Holmes colluded with the borrowers in obtaining a loan upon their homestead, but the finding is made that the agent actively participated in the scheme to perpetrate a fraud upon his principal, and purposely concealed the real nature of the transaction from it.

Prior to the execution of the deed by Pitts and wife to Brooks, the agent Holmes, whose specific instructions were not to take or submit an application for a loan in any case where there was any suspicion of a homestead evasion, explained to Pitts’ wife that the purpose of executing the deed to Brooks was merely to create an apparent lien against the homestead and procure thereon a loan sufficient in amount to pay the note her husband owed Brooks and Neville. She was assured by said agent that Brooks would reconvey the property as soon as such loan was obtained. It thus appears the agent actively aided and advised the borrowers in the fraudulent scheme to obtain a loan upon homestead property, and, in order to successfully consummate the same, deliberately concealed the real nature of the transaction from his principal. Holmes could not have known of Brooks’ intention to reeonvey this property to Pitts and wife unless he had received such information from Brooks himself. He is therefore placed in the light of having assisted in bringing about the consummation of the fraudulent transaction by communicating to Pitts’ wife Brooks’ intention to reconvey the homestead after the loan was procured. The conclusion is inescapable that there was secret concert of action between the agent and those interested in the fraudulent scheme to procure a loan upon the homestead. Such action is sufficient to constitute collusion. Bowen Imp. Co. v. Van Hafften, 209 Mo. App. 629, 238 S. W. 147; Deupree v. Thornton, 97 Neb. 812, 151 N. W. 305, L. R. A. 1917C, 65; Wills v. Central Ice & Cold Storage Co., 39 Tex. Civ. App. 483, 88 S. W. 265.

“While the knowledge of an agent is ordinarily to be imputed to the principal,” says Ruling Case Law, volume 21, p. 843, § 24, “it would appear now to be well established that there is an exception to the construction of imputation of notice from the agent to the principal in case of such conduct by the agent as raises a clear presumption that -he would not communicate the fact in controversy, as where the communication of such fact would necessarily prevent the consummation of a fraudulent scheme which the agent was engaged in perpetrating, or when the person-claiming the benefit of the knowledge or notice, or those whom he represents, colludes with the agent to cheat or defraud the principal.”

In Scripture v. Scottish-Am. Mortg. Co., 20 Tex. Civ. App. 153, 49 S. W. 644, 646, Chief Justice Pinley, in a case involving similar conduct of a loan agent, announces the doctrine that the principal would not be charged with the agent’s secret knowledge. In passing on this question, this distinguished jurist said:

“Again, if the- agent did know that the property was homestead, and, against the-positive instructions of his principal, made the loans, on concealing his knowledge from the principal, in collusion with the borrower, the effect of such conduct would be a fraud, upon the principal, and the principal would not be charged with his secret knowledge.”

The rule is otherwise where the- agent has been clothed by his company with authority to actually, consummate the loan. Under such circumstances, notice to him of the fictitious character of a conveyance would be notice to the company, for the obvious reason that in such case he would be its alter ego.

In this case no such authority was given the agent. His duty was merely to solicit for and submit applications for loans to his company, which were required to be approved by the board of directors. He had nothing to do with the determination of the question as to whether the company would complete the-loan. He was acting under orders not to take or submit an application for a loan where-there was a suspicion of homestead evasion. In complete disregard of this positive instruction, he actively participated with the borrowers in their fraudulent scheme to deceive the plaintiff in error by making it appear that a mere simulated conveyance of the homestead was a bona fide one, when he is bound to have known the whole transaction was designed for the fraudulent purpose of misleading and deceiving his principal.

The trial court’s findings as tp the conduct of the parties in connection with the making of this loan compels the conclusion that there was such collusion between plaintiff in error’s agent and the borrowers in an attempt to perpetrate a fraud upon plaintiff in error that tiie secret knowledge of the real nature of the transaction possessed by the agent should not, in all good conscience, be imputed to the principal. This salutary rule has been uniformly applied by the courts of this state, as well as thode of other jurisdictions. Centennial Mut. Life Association v. Parham, 80 Tex. 518, 16 S. W. 316; Pickett v. Dallas Trust & Sayings Bank (Tex. Com. App.) 24 S.W.(2d) 354; Scripture v. Scottish American Mortg. Co., 20 Tex. Civ. App. 153, 49 S. W. 644 (writ ref.); Cooper" et al. v. Eord, 29 Tex. Civ. App. 253, 69 S. W. 487 (writ ref.); Holmes v. Uvalde Nat. Bank (Tex. Civ. App.) 222 S. W. 640; T. P. Coal & Oil Co. v. Belcher (Tex. Civ. App.) 265 S. W. 1081; Frenkel v. Hudson, 82 Ala. 158, 2 So. 758, 60 Am. Rep. 736; Wickersham v. Chicago Zinc Co., 18 Kan. 481, 26 Am. Rep. 784; Allen v. South Boston R. Co., 150 Mass. 200, 22 N. E. 917, 15 Am. St. Rep. 185, and note 5 L. R. A. 716; Reisan v. Mott, 42 Minn. 49, 43 N. W. 691, 18 Am. St. Rep. 489; Brookhouse v. Union Pub. Co., 73 N. H. 368, 62 A. 219, 111 Am. St. Rep. 623, 6 Ann. Cas. 675 ; 2 L. R. A. (N. S.) 993, note; Critten v. Chemical Nat. Bank, T71 N. Y. 219, 63 N. E. 969, 57 L. R. A. 529; Gunster v. Scranton Illuminating, etc., Co., 181 Pa. 327, 37 A. 550, 59 Am. St. Rep. 650; note, 21 Eng. Rul. Cas. 845.

The judgments of the trial court and the Court of Civil Appeals are reversed, and judgment is here rendered for plaintiff in error.

CURETON, C. J.

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.


author: SHARP,' G CURETON, C. J. ,

text:
    CLARK et al. v. W. L. PEARSON & CO. et al.
    No. 5722.
    Supreme Court of Texas.
    April 15, 1931.

      E. B. & Howell Ward and Lewis H. Jones, ‘ all of Corpus Christi, for plaintiffs in error.
    H. J. Passmore and B. H. Kirk, both of Robstown, and Tarlton & Lowe, of Corpus Christi, for defendants in error.
   SHARP,' G

For a partial statement of the nature and result of this suit, we adopt the following statement made by the Honorable Court of Civil Appeals in its opinion:

“During-the period in which the transactions involved in this litigation occurred, the city of Robstown, in Nueces county, embraced a population of more than 1,000 and less than 5,000 inhabitants. By vote of its inhabitants, said city accepted the. benefits and adopted the provisions of chapter 9, tit. 28, of the present Revised Statutes (article 1086 et seq.), as provided in article 1104 thereof. Acting under the provisions of this chapter, the city council, by ordinances, ordered' the paving of certain streets within the corporate limits and levied special assessments against owners of property abutting upon the streets to be so improved to cover the whole cost of curbs and gutters and three-fourths of the cost of paving, under the authority of article 1090, and within the limitations prescribed in article 1088. The council, also by ordinances, entered into a contract with W. L. Pearson & Co. *to construct said improvements, and by virtue of the same article provided for the payment of. the city’s proportionate cost of such improvements, so contracted for, out of the available funds of the city, by appropriating 67 cents, or so much thereof as would be necessary, out of the annual ad valorem tax of $1.50. This debt was evidenced by the city’s 6 per cent, interest-bearing warrants to be issued as earned, in favor of the contractor, to the amount of $200,000, or so much thereof as became necessary under the contract.

“Before all the warrants mentioned had been issued by the city and delivered to the contractors, W. O. Clark, owning property abutting upon one of the streets so improved, subsequently joined by certain other citizens in the same class, brought suit against the city and its officials and the contractor, alleging that the whole official proceedings to improve said streets, as well as the special assessments, the tax levy, the contract with Pearson & Co., and the warrants issued and to be issued, were invalid and void. * * * Subsequently all the parties to that suit settled and compromised the matters involved in that litigation, and their agreement was embodied in a consent decree, approved by the trial court, and duly entered as the judgment of the court. * * * This was on March 13, 1929.

“On May 7, 1929, the city, proceeding under article 1096, sought to correct the mistakes and invalidity in the original assessment, by reassessing the cost of the improvement.

“Some time during the month of April, 1929, W. C. Clark, plaintiff in the original suit, joined later on by those intervening in that suit, filed the instant suit to set aside the agreed judgment rendered in the former suit, alleging fraud in its procurement, and by amendment in May sought further to establish the invalidity of the paving proceedings, contract, warrants, assessments, reassessment, and levies thereunder.

“This cause was tried by jury, and, from an adverse judgment based upon a directed verdict against them, Clark and his associates have brought this appeal.”

The Court of Civil Appeals affirmed the judgment of the trial court. For a more detailed statement of the nature -and result of the case, we refer to the opinion of the Court of Civil Appeals. 26 S.W.(2d) 382. Writ of error granted.

Plaintiffs in error contend that the obligations issued by the city of Robstown were bonds and not certificates or warrants, were not authorized by a vote of the people of the town, were based upon a special ad valorem tax levy of 67 cents on the $100 valuation, and were therefore void.

It is shown that the city of Robstown is an incorporated city with a population under five thousand inhabitants, and that by a popular vote of- the property taxpaying voters adopted what is now articles 1086 to 1096, inclusive, and articles 1101 and 1105, R. S. 1925.

By reason of the foregoing proceedings, that gave the city within its corporate limits, among other things, the following power:

(1) To pave the streets, improve any highway within its limits, and construct sidewalks, curbs, gutters, and sewers.
(2) The power to order improvements of any highway or part thereof within the city and to select the material and methods of such improvements and to contract for the construction of such improvements in the name of the city and to provide for the payments of such improvements out of any available funds of the city.
(3) The costs of making such improvements may be wholly paid by the city or partly by the city and partly by the owners of the property abutting thereon. In no event shall more than • three-fourths of the cost of any improvement, except sidewalks and curbs, be assessed against such property owners or other property. The entire cost of construction of the sidewalks and curbs in front of any property may be assessed against the owner thereof or his property.
(4) The governing body of the city shall have power by ordinance to provide for the time and terms of payment of such assessments and the rate of interest not to exceed 8 per cent, per annum, payable upon deferred payments thereon, or to fix a lien upon the property and declare such assessments to be a. personal liability of the owners of such abutting property. They shall have the power to cause to be issued in the name of the city assignable certificates declaring the liability of such owners and their property for the payment of such assessments and to fix the terms and conditions for such certificates.

Article 1090, R. S., in part, provides that:

“If any such certificate shall recite that the proceedings with reference to making such improvements have been regularly had jn compliance with law, and that all prerequisites to the fixing of the assessment lien against the property described in said certificate and fixing the personal liability of the owner have been performed, such certificate shall be prima facie evidence of the facts so recited.”

The city of Robstown having adopted, as required by law, the foregoing articles, the governing body of the city, under the provisions of the law governing same, unquestionably had the right to improve the streets and sewers without a vote thereon, and to order the improvements of any highway therein, or part thereof, and to contract for the construction of such improvements in the name of the city, and to provide for the payment of the costs of such improvements out of any available funds.

The law expressly authorizes the governing body of the city adopting the foregoing articles to issue in the name of the city assignable certificates declaring the liability of such owners and their property for the payment of same and to fix the terms and conditions for such certificates. Because the certificates or warrants have possibly some of the characteristics of bonds does not make them bonds. That interest coupons are attached to them, as is ordinarily the case with bonds, is not controlling. Easater v. Lopez, 110 Tex. 179, 217 S. W. 373; City of Tyler v. Jester, 97 Tex. 344, 78 S. W. 1058; San Patricio County v. McClane, 44 Tex. 892; Keel v. Pulte (Tex. Com. App.) 10 S.W.(2d) 694.

Quoting from the opinion of the Court of Civil Appeals in this case, it is said:

“At the time of authorizing this debt, the city council provided for the liquidation thereof by levying an ad valorem tax of 67 cents, or so much thereof as should be necessary, to provide a sinking fund and to pay the interest to accrue upon said warrants, as ■required by familiar constitutional provisions. Under this general authorization of 67 cents, the council appropriated 30 cents of the $1.50 ad valorem tax in each of the first two ensuing years, and 46 cents for the third and last past year. The levy and appropriations thereunder were included in the ad valorem tax, and, with the funds 'derived from the special assessments, were segregated from the general fund and levy, and designated as a special fund to pay the principal of said warrants as they matured, and the interest thereon as it accrued from year to year. By this process the debt is being liquidated out of the city’s ‘available funds,’ without raising the ad valorem tax rate beyond the constitutional limitation of $1.50.”

It is not shown that the tax levy made by the governing body of the city of Robstown exceeds the constitutional limitation of $1.50 upon the $100 valuation for taxable purposes.

Section 4 of article 11 of the Constitution of Texas reads as follows:

“Cities and towns having a population of five thousand or less may be chartered alone by general law. They may levy, assess and collect such taxes as may be authorized by law, but no tax for any purpose shall ever be lawful for any one year which shall exceed one and one-half per cent, of the taxable property of such city.”

The rule is well established that the city had the power to provide for the payment of its proportion of the cost of such improvements in interest-bearing warrants, without submitting the matter to a vote of the people. Keel, Mayor, v. Pulte (Tex. Com. App.) 10 S.W.(2d) 694; Simms v. City of Mt. Pleasant (Tex. Civ. App.) 12 S.W. (2d) 883; Bridgers v. City of Lampasas (Tex. Civ. App.) 249 S. W. 1083 (writ refused).

The foregoing contention is overruled.

Plaintiffs in error further contend that the governing body of the city of Robstown had no authority to make a reassessment of the cost of improvements, or any part thereof, against abutting property and its owners, because, in cause No. 9848, entitled Clark, et al. v. Pearson & Co. et al., pending in the district court of Nueces county, the original assessments had been decreed canceled on the ground that they were “irregular and invalid.”

In cause No. 9848, W. C. Clark and others, owners of abutting property upon one of the streets improved in the town of Robs-town, brought suit against the city, its officials and the contractor, to declare the entire proceedings to improve the streets, the special assessments, the tax levy, the contract made with Pearson & Co., and the warrants issued and to be issued void and invalid. The record shows that this suit was cbmpromised and settled. The matters involved in that suit and their agreement are embodied in a decree, agreed and consented to by all the parties, approved by the trial court, and entered as the judgment of the court. We will set out the material parts of the judgment bearing upon the issues involved in this suit. It recites that on the 13th day of March, 1929, the cause came on for trial and all parties announced ready for trial and a judgment entered therein, which, among other things, contains the following provisions:

“Thereupon came the parties in open court and announced that they had reached an agreement as to the judgment that should be rendered, and the Court then and there having heard and considered the agreement of the parties so announced, which agreement is in accordance with the judgment herein entered and .agreed to by the parties, and the Court being of the opinion that the agreement is in all things fair and equitable, and, therefore should be entered as a decree and judgment of the Court.”

The judgment further decreed that the special assessments made by the city “were irregular and invalid” and same were in all things cancelled.

The judgment further provides:

“That the contract entered into by the City of Robstown with the said W. L. Pearson & Company, was and is a binding and legal obligation and debt of the said city of Robstown, and the amount hereinafter adjudged to be owing, and that the warrants issued and to be issued as evidence of the said indebtedness in the amount- of $181,014.02, are legal obligations of the City of Robstown and are in conformity with the constitution and the laws of this State; and that the work to be performed by said W. L. Pearson & Company under said contract has been performed in accordance with the terms of said contract, and has been approved and accepted by the City of Robs-town through its proper authorities.”

■ Again it provides:

“Whereas there has been delivered heretofore to the said W. L. Pearson & Company warrants in the amount of $155,000.00, it is adjudged that said warrants so delivered are in all things legal and valid; and the City of Robstown is hereby ordered to issue the undelivered warrants provided for in the said contract, to-wit: the sum of $26,014.02, in addition to the $155,000.00 in warrants heretofore delivered and to deliver the said warrants to the said W. L. Pearson & Company.”

Article 1095, R. S., provides that:

“The governing body of any city shall be empowered to correct any mistake or irregularity in any proceedings with reference to such improvement, or the assessment of the cost thereof against abutting property and its owners, and in case of any error or invalidity, to reassess against any abutting property and its owner the cost or part of the cost of improvements, subject to the terms hereof, not in excess of the benefits in enhanced value of such property from such improvement, and to make reasonable rules and regulations for a notice to and hearing of property owners before such reassessment.”

Article 1097 provides for a special assessment as follows:

“In any case in which the public funds of a city or 'town may have been or may hereafter be expended, or its vouchers or certificates issued to any contractor, or any contract made therewith, for the special improvement, raising or lowering the grade of, opening, straightening, widening, paving, constructing or grading of any street, avenue, alley, sidewalk, gutter or public way, or any part thereof, and if for any reason, no part of the cost of such improvement has been borne by the abutting property or paid by the owner or owners thereof, either because an attempted assessment and enforcement thereof for the same was erroneous or void, or was so declared in any judicial proceeding, the governing body shall have the power to proceed at any time to specially ■assess or reassess, such abutting property with such amount of the cost of such improvement as it deems proper, but in no event shall the amount exceed the special benefits such property receives therefrom by enhanced value thereto, the amount of such' special benefits to be determined on a basis of the condition of such improvement as it exists at the time of such assessment or reassessment.”

Article 1101 provides that:

“Any such assessment or reassessment made by the governing body of any city or town with less than five thousand inhabitants may equal the entire cost of sidewalk, curb and gutter, and the cost of any street improvement, exclusive of street intersections, and such governing body of such town in making such assessment or reassessment, shall follow the procedure prescribed in articles 1082 and 1083 in so far as applicable, but no such assessment or reassessment shall be made in excess of the special benefits in enhanced value conferred thereby on the property abutting such improvement, or until the owner or owners of such property shall’have had notice, as provided above, and opportunity to contest such issue before such governing body under such rules and regulations as it may, by ordinance, prescribe.”

Article 1103 reads as follows:

“The- provisions of the six preceding articles relating to special assessments or reassessments are cumulative of all powers heretofore granted to any city or town either by general or special law; and all charter provisions of all cities and towns in this State heretofore adopted relative to the subject covered by this law are hereby validated.”
The contract entered into between the city of Robstown and Pearson & Company, whereby Pearson & Company were to do the improvements for the city, was dated June 7, 1926. This contract was ratified and confirmed by the city council of Robstown by resolution dated the 7th day of June, 1926. As shown above in cause No. 9848, a judgment dated March 13, 1929, was entered by agreement of all parties in that suit. It will be noted that in that judgment, among other things, it was decreed that the special assessments theretofore made by the city were “irregular and invalid”; that the contract between the city and Pearson ⅜ Company was “a valid and legal obligation and debt of the city”; that the warrants issued or to be issued by the city in the sum of 1181,000 “are legal obligations of the city of Robstown and are in conformity with the Constitution and laws of this State; that the work to be performed by said W. L. Pearson & Company under said contract has been performed in accordance with the terms of said contract and has been approved and accepted by the city of Robstown through its proper authorities”; that warrants in the amount of §155,000 already delivered to Pearson & Company “are in all things legal and valid,” and the city was ordered to issue and deliver additional warrants in the sum of $26,000 to cover the balance due said contractors for the work they had done under the contract. The judgment further provides that said judgment is “in all things fair and equitable.” It will be observed that there is nothing in the judgment which would prohibit the city of Robstown from complying with the provisions of article 1097, R. S., above quoted.

On April 3, 1929, the city council adopted the reassessment ordinance for the purpose of correcting the irregularities in the prior assessment made by the city. It is recited in the ordinance that the improvements have been fully completed and the “contract adjudged valid and fully and properly performed and said vouchers or warrants adjudged legal and valid obligations of the city of Robstown.” t •

The city council further found “that said re-assessment was just and equitable, and that the charge made against each parcel of property in said re-assessment is less than the benefits to said property by means of enhanced value thereof by reason of said improvement.” -

The city warrants issued contain the following provision:

“And it is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the issuance of this warrant, have been properly done, happened and performed, in regular and due time, form and manner, as provided by law, and that the total indebtedness of said city, including, this warrant, does not exceed the constitutional or statutory limitation.”

The rule is well established that municipal corporations are invested at least with an implied or incidental power to contract on the general credit of the city with respect to such improvements as they are authorized 6y law to make. Keel v. Pulte (Tex. Com. App.) 10 S.W.(2d) 604; Lasater v. Lopez, 110 Tex. 189, 217 S. W. 373; Payne v. Bank (Tex. Com. App.) 291 S. W. 209, 211; City of Galveston v. Loonie, 54 Tex. 517; City of Galveston v. Heard, 54 Tex. 420; Graves v. M. Griffin O’Neil & Sons (Tex. Civ. App.) 189 S. W. 778; Biddle v. City of Terrell, 82 Tex. 335, 18 S. W. 691; City of Terrell v. Dessaint, 71 Tex. 770, 9 S. W. 593; Police Jury, Tensas Parish, v. Britton, 15 Wall. 566, 21 L. Ed. 251; Claiborne County v. Brooks, 111 U. S. 400, 4 S. Ct. 489, 28 L. Ed. 470; Allen v. La Fayette, 89 Ala. 641, 8 So. 30; 9 L. R. A. 497; Hoffman v. Pawnee County, 3 Okl. 325, 41 P. 566; 19 R. C. L. p. 779, § 84.

It is now equally well settled, that cities incorporated under the general laws of the state have authority to issue interest-bearing warrants or certificates in evidence of indebtedness legally created. Keel v. Pulte supra; City of Corpus Christi v. Woessner, 58 Tex. 482; City of Tyler v. Jester (Tex. Civ. App.) 74 S.W. 359; Id., 97 Tex. 344, 78 S. W. 1058; Noel v. City of San Antonio, 11 Tex. Civ. App. 580, 33 S. W. 263; Payne v. Bank, supra.

It appears from this record that the city of Robstown is incorporated; that by special election its citizens have adopted the statutes which permit the city to improve its streets and highways. The improvement of highways and city streets is of a great public concern and is recognized as a public necessity and duty; the Legislature from time to time has enacted laws giving cities, under certain conditions, the authority to improve their highways and streets, and those laws should be rationally and sensibly construed as to accomplish the object for which they were enacted. The primary rule governing the construction of statutes in this state is that '“the provisions thereof shall be liberally construed with a view to effect their objects and promote justice.”

Under the state of this record we think the city of Robstown was authorized under the law to reassess’ the property as was done. This act did not violate any of the provisions of the federal or state Constitutions. Booth v. Asphalt Company (Tex. Civ. App.) 296 S. W. 345 (Writ refused); City of Dallas v. Atkins, 110 Tex. 627, 223 S. W. 170; Childress v. Carwile (Tex. Com. App.) 235 S. W. 543; Texas Bitulithic Co. v. Henry (Tex. Civ. App.) 197 S. W. 221; Gallahar v. Whitley (Tex. Civ. App.) 190 S. W. 757; Beatty v. Construction Co. (Tex. Civ. App.) 275 S. W. 716.

Article 1091, R. S., provides that “nothing herein shall be construed to empower any city to fix a lien by assessment against any property exempt by law from sale under execution,” etc. It is not contended that any one is undertaking to establish in this suit a lien against any property claimed as exempt and that question is not involved here.

We have carefully considered the many points raised by plaintiffs in error, and we have found no sound rea'son for holding, in view of this record, that the governing body, of the city of Robstown has not substantially complied with the law in making the contract .for the improvements, issuing certificates therefor, and making a reassessment against the property liable for the improvements made.

The judgment of the Court of Civil Appeals should be affirmed.

CURETON, C. J. ,

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.


author: SHORT, C. CURETON, C. J.

text:
    FLETCHER et al. v. HOWARD et al.
    No. 5725.
    Supreme Court of Texas.
    April 15, 1931.
    Vickers & Campbell, of Lubbock, for plaintiffs in error.
    Robert Lee Bobbitt, Formerly Atty. Gen., W. Dewey Lawrence, Formerly Asst. Atty. Gen., and W. B. Howard, of Childress, for defendants in error.
   SHORT, C.

The plaintiffs in error, qualified voters and property taxpayers in Childress county, suing for themselves and those similarly situated, by their application filed in the district court of Childress county,, asked for a temporary injunction restraining the defendants in error, as members of the commissioners’ court of Childress county, and as members of the state highway commission, respectively, and'the chief engineer of said commission, from diverting the proceeds of certain bonds issued and sold, from being used on a certain public road. Upon a hearing of this application, the same was denied, and the petition was held to he insufficient to state a cause of action on general demurrer. The plaintiffs in error having declined to amend their petition, the suit was dismissed, whereupon an appeal was taken to the Court of Civil Appeals at Amarillo, where the judgment of the district court was affirmed. 26 S.W.(2d) 444. The case has reached' the Supreme Court in the usual way.

It appears from the allegations in the petition, as well as from the facts, which the Court of Civil Appeals finds to have been alleged therein, that on December 31, 1927, there had existed for several years a public way through Childress county which had been laid out as a public road by the commissioners’ court and as such maintained, and recognized as a state highway by the highway commission, and which had been known, used, and recognized by the people of Childress county as Highway No. 4, the general direction being north and south, said highway traversing the territorial limits of the town of Childress, the county seat of the county. There was also on said date a similar public way extending east and west through the county and through certain towns in the county, which was designated as Highway No. 5. However, Highway No. 5 is not involved in this law suit. On the date mentioned the voters of Childress county, by virtue of an election duly called, authorized the issuance of bonds in the sum of $650,000 to provide for the construction, maintenance, and operation of macadamized, or paved roads, or turnpikes, and in aid thereof. These bonds were sold thereafter and the proceeds were put in the treasury of Childress county. Before this election, the question arose among the voters as to what particular roads were to be constructed and maintained with the proceeds of these bonds.' The commissioners’ court, in view of the agitation of this question, made and entered upon its minutes an order to the effect that, in the event the bonds were voted, to the amount of $650,000, for the purposes above mentioned, that the proceeds from the sale thereof should be used for the specific purpose, among others, for the construction of a concrete road, or its equivalent, or a higher grade of material, over the entire length of State Highway No. 4 in Childress county. When the proceeds of the bonds became available, the state highway commission, through its engineer, relocated a highway which it called State Highway No. 4, beginning at a point on the original Highway No. 4 to the south of the town of Childress, running in a northerly direction to the county line, which designated way left the town of Chil-dress about two miles to the east and proceeded to the northern boundary, the two ways being on an average two miles apart, and it is alleged the defendants in error proposed to use the proceeds of these bonds in constructing and maintaining this new road, called Highway No. 4, and not to use any part of it as the order of the commissioners’ court declared it should be so used, on that part of the original Highway No. 4, beginning to the south of the town of Childress and leading from said point by way of the town of Childres^, along said original highway to the county line to the north. There were other allegations, in the petition to the effect that the new public road, proposed to be constructed, was through an uninhabited, rough, and undesirable country, while the original Highway No. 4 had been constructed and maintained through an inhabited and fertile country. It is also alleged that the original Highway No. 4 led to a public bridge on Red river, while the proposed new route would require the construction of another bridge at another point on said river.

It is the contention of the defendants in error that they are justified in using the proceeds of these bonds on the newly designated Highway No. 4 for the reason that the order of the commissioners’ court, in designating State Highway No. 4, only used two control points, which are the south and the north boundary lines of Childress county, and that they, the defendants in error, under the law had the authority to use the proceeds of these bonds on any route they saw proper, provided only this route extended through the county from the southern boundary line to the northern boundary line.

Upon the other hand, it is the contention of the plaintiffs in error that the language of the order, which is copied in the opinion of the Court of Civil Appeals, is susceptible of only one construction, in view of the facts alleged in the petition, and that this construction confined the location of Highway No. 4 substantially to its location as it existed on the date of the election and as it had existed for many years previous thereto.

It also seems to be the contention of the defendants in error that the commissioners’ court had no power or authority to enter into the agreement with the voters, as pleaded by the plaintiffs in error.

In discussing article 3, § 52, of the Constitution, as well as article 8, § 9, the Supreme Court of this state, speaking through Associate Justice Pierson in Robbins v. Limestone County, 114 Tex. 345, 268 S. W. 915, 919, among other things said: “Of course these funds * * * may not be diverted to other purposes than those for which they were voted.” By article 2351, R. S. 1925, commissioners’ courts are authorized, among other things, to lay out and establish public roads when they deem it necessary, as well as to exercise the general control over public roads in their respective counties. Article 2352 authorizes commissioners’ courts to levy and collect taxes for road purposes, and this right to levy and collect taxes carries with it the right to expend the fund when so collected, to carry out the purposes for which it was collected. In Black v. Strength, 112 Tex. 188, 246 S. W. 79, 80, the Supreme Court, in speaking of a similar agreement, evidenced by the order under discussion made by the commissioners’ court, held that commissioners’ courts have the power and authority to enter into an agreement respecting the ápplication of the proceeds of the bonds, and that such an agreement “could not be arbitrarily ignored or repudiated without involving the perpetration of fraud or its equivalent oñ the voters,” and further: “That the will of those having to bear the bond burden should not be defeated by a mere change of mind on the part of the members 'of the commissioners’ court with respect to the particular roads needing improvement.” In Moore v. Coffman, 109 Tex. 93, 200 S. W. 374, wherein the commissioners’ court agreed with the voters to erect a bridge across a river at a designated crossing, the Supreme Court held that such bridge must be constructed out of the bond money at the crossing mentioned and designated in the election order, giving as a reason that it was a solemn contract to so construct the bridge with the money. In Heathman v. Singletary, 12 S.W. (2d) 150, 153, wherein this section of the Commission of Appeals, in a case where the highway commission was alleged to be diverting the bond money on a road other than Highway No. 19, said: “Had the plaintiffs in error pleaded and proved that the order, providing for the bond election, specified that the moneys should be expended on a highway between Riverside and Huntsville by way of Cline’s Prairie, and that these moneys were about to be so used on another route as would deprive them of a similar highway by way of Cline’s Prairie, they would have been entitled to the relief for wh’idli they prayed.” In Quisenberry v. Mitchell, 116 Tex. 378, 292 S. W. 160, 163, wherein the controversy arose. respecting the application of money to build a road from Seymour to Westover, Section A of the Commission of Appeals, among other things, said: “It must be held that, since the order of election designated the courthouse at Seymour and the town of Westover as controlling points for such proposed road, the fixing of such definite and specific places as points to be reached by such road will be given effect; and a portion of the bond money must be applied to the construction and improvement of a road between those two places.” In Grayson County v. Harrell (Tex. Civ. App.) 202 S. W. 160, 162, wherein the court, in speaking of the duty of the courts to enforce contracts of the kind and character in question, the court said: “It would be dangerous to hold that the commissioners’ court could recite in its order for the election one purpose or proposition, and by some other action or order, not made a part thereof, and not referred to in the official notice of the election, inject into the proposition limitations or conditions so that the actual result of the election would be to carry a different proposition from that actually voted on according to the official record.” In Wright v. Allen, 257 S. W. 980, 985, the Court of Civil Appeals had this to say on the question: “The pre-election orders entered by the commissioners’ court of Dallas county in* reference to said bond election must be treated as a contract between the commissioners’ court and the electorate entitled to vote at said election; not that the commissioners composing said court did not have the right to use their discretion vested in them by law in reference to the place of construction, the manner of construction and the cost thereof, but that they had exercised it in the making of said orders, and, the election having been held in pursuance thereof, the electors thereat, being vitally interested not only in the voting for the issuance of the bonds but in the construction of the road system, are entitled to be protected in the carrying out of the contract thus .made in the form of the orders entered.”

The opinion in Heathman v. Singletary, supra, is authority for the proposition that the act of the state highway commission, in relocating a state highway after a bond election, is a governmental one, and being untainted by fraud, and uriassailed by any accident or mistake, occurring in their performance, is valid, as well as for the proposition that the valid governmental act of the state highway commission in relocating a state highway, after a bond election, cannot be assailed by a private citizen without pleading and proving a condition of affairs demonstrating he has a personal interest in the subject-matter relating to the transaction between himself as such private citizen on the one hand, and the government on the other. But neither of these propositions is involved in this litigation. The plaintiffs in error do not attempt to have the act of the state highway commission, in locating the highway as it did, annulled, as indeed they could not do, since the state highway commission had the authority, under the law as it now exists, to locate a state highway wherever, in the exercise of its sound discretion, it sees proper. The plaintiffs in error merely contend that neither the state highway commission, nor the commissioners’ court, under .the alleged facts of this case, have the authority to divert the proceeds from the sale of the bonds from being expended on Highway No. 4, as it existed on the date of the election, where it appears that no part of said proceeds were intended to be so used. It appears, from the allegations in the petition, that the state highway commission and the commissioners’ court intend to use all of the proceeds from the sale of the bonds, which the voters intended should he used on Highway No. 4, as it existed on the date of the election, for the construction and maintenance of the new highway established by the state highway commission, the effect of which is to deprive the plaintiffs in error of the right which they acquired by virtue of the order made by the commissioners’ court to have the proceeds of these bonds used on Highway No. 4, p.s it existed when the agreement was made, and the election held.

It necessarily results from the conclusions we have reached that the judgments of the Court of Civil Appeals and that of the district court, in sustaining a general demurrer to the petition, and in refusing to order issued a temporary injunction, for which the petition prays, was error, necessitating a reversal of said judgments and a remanding of the ease for trial on its merits. The application for the issuance of a temporary writ of injunction is duly authenticated, and therefore the judge of the district court of Childress county is directed to grant the prayer of the plaintiffs in error, for the issuance of said writ, fixing the amount of the bond in such sum as he concludes to be sufficient, and to order the issuance of said temporary writ of injunction upon the filing of said bond duly approved, in accordance with the prayer in the petition of the plaintiffs in error, to continue in force until a final judgment shall have been rendered in the case, when said writ shall either be dissolved, in whole or in part, o'r perpetuated, in whole or in part, according to the result of the trial on the merits of the case.

The judgments of the Court of Civil Appeals and of the district court are 'reversed, and the cause is remanded with the above instructions.

CURETON, C. J.

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.