author: PLEASANTS, C. J.

text:
    HOGG et al. v. SHEFFIELD, Tax Collector, et al.
    No. 9450.
    Court of Civil Appeals of Texas. Galveston.
    March 3, 1931.
    Rehearing Denied April 9, 1931.

      Stephen L. Pinckney and David M. Picton, Jr., both of Houston, for appellants.
    A. R. Rucks, Floyd Enlow, and Carlos B. Masterson, all of Angleton, for appellee Brazoria County.
    F. T. Baldwin and G. P. Dougherty, both of Houston, for appellees Texas Co. and Humble Oil & Refining Co.
   PLEASANTS, C. J.

This suit was brought by appellants against the tax collector of Brazoria county, the county of Brazoria, two independent school districts, and a navigation district in said county, the commissioners’ court, and all the officials of said county and districts having to do with the assessment of property for taxation and the collection of taxes in said county, to enjoin the collection of taxes levied and assessed upon one-eighth of the oil and other minerals in lands owned by appellants in said county for the year 1927.1

Five private oil corporations engaged in the production of oil on the lands of appellants in the county were also made defendants.

Before the trial in the court below the state of Texas intervened in the suit and sought recovery against appellants for alleged delinquent taxes due for the year 1927, with interest, penalties, and costs.

The following sufficient summary of the substance of the pleadings is copied from appellants’ brief:

Plaintiffs pleaded that in the year 1927, through their agent, they rendered to the tax assessor of Brazoria county, Tex., for taxation all of their real and personal property subject to taxation in Brazoria county, as shown upon written inventory and rendition, copy of which was attached to' plaintiffs’ petition and made part thereof; that said inventory and rendition contained a written statement on its face reciting that no oil, gas, sulphur, or other minerals in or under the lands covered by the Hogg-Hamman mineral deed or lease was being rendered for taxation because plaintiffs had conveyed such minerals to John Hamman in 1913; that defendant tax assessor accepted such renditions, and defendant commissioners’ court, sitting as a board of equalization, approved the same and levied taxes on the property so rendered at values for which plaintiffs rendered the same, and plaintiffs paid all taxes levied against said property and against plaintiffs, before such taxes became delinquent; that plaintiffs did not render for taxation any oil, gas, sulphur, or other minerals in the lands covered by the Hogg-Hamman mineral deed or lease “for the reason that plaintiffs had sold and conveyed (and severed from their fee. estate in said lands) all the minerals of every kind and character in such lands unto John Hamman by deed' or lease dated June 6, 1913, recorded in” the deed records of Brazoria county, Tex., copy of such Hogg-Hamman mineral deed or lease being attached to plain- • tiffs’ pleadings and made part thereof for all purposes; that said mineral deed or lease severed all the minerals in and under the surface of the lands therein described and conveyed all of said minerals out of plaintiffs unto John Hamman; that by virtue of assignments or subleases from John Ham-man, the several oil company defendants held different portions of said property on January 1, 1927. Plaintiffs pleaded that as consideration for executing and delivering said Hogg-Hamman instrument, plaintiffs received the nominal sum of one dollar cash, and that the real considerations moving to plaintiffs for executing and delivering said instrument were the obligations on the part of lessee John Hamman to drill wells on such lands for the purpose of discovering oil, gas, and other minerals, and in the event of discovery to produce the same and to deliver to plaintiffs a royalty payable in money upon gas, sulphur, and other minerals which might be produced, and to deliver to the credit of plaintiff in any pipe line or pipe lines designated by plaintiffs and which connect with the wells or settling tanks, free of any charge to plaintiffs, or into plaintiffs’ own private storage at their expense, one-eighth of all the oil produced from such premises. Plaintiffs pleaded particularly section “Fifth” of such Hogg-I-Iamman instrument, which'reads as follows:

“Fifth: (a) In consideration of this lease second party agrees that first parties shall have the following royalty of the gross production of all oil or gas wells on said lands, to-wit: one-eighth of all oil and one-eighth of all gas; and first parties’ one-eighth royalty interest in all oil and gas marketed from said land to be paid over to them by second party at the end of each month, or whenever second party shall receive pay therefor, such royalty to he delivered by second party to the credit of first parties in any pipeline or pipe-lines which said first parties may designate, and which connect with the wells or connect with the settling tanks of second party, free of any charge to first parties, or into said first parties’ own private storage upon said land, or upon their other land adjoining, at the expense of said first parties; and first parties shall have one-eighth interest in all money realized from gas marketed from said land, as a royalty to be paid over to them, or their order, at the end of each month, or whenever second party shall receive pay therefor.
“(b) If sulphur or other minerals are produced on said land, second party shall pay first parties $1.00 per ton of 2240 pounds for each ton thereof produced and saved from said land; quarterly settlements to be made by second party with first parties by either the payment to them in person of proper amount or by its deposit to their credit in their bank, or its successor in business.”

That under the terms of such I-Iogg-Ham-man mineral deed or lease “plaintiffs had no title on January 1, 1927, or since, to any of the minerals in place and under the lands described in said deed, and were therefore not taxable in Brazoria County for any portion of said minerals.”

Plaintiffs pleaded that the tax assessor of Brazoria county assessed for taxation in 1927 against them and the respective oil company defendants herein, said undivided one-eighth interest in the oil, gas, and other minerals in and under (in place in the ground) the lands described in said Hogg-Ilamman mineral deed or lease; that in 1927 defendant commissioners’ court levied taxes thereon against plaintiffs-and said respective defendant oil companies jointly as. the owners thereof. They also pleaded that the defendants tax officials of Brazoria county were threatening to proceed to collect said taxes by suit against plaintiffs; that unless the trial court issued writ of injunction to protect plaintiffs from such threatened and impending action and effort of such taxing officials to collect from plaintiffs said illegally assessed and levied taxes, plaintiffs would suffer irreparable loss and damages for which they had no adequate remedy at law, etc. Plaintiffs prayed for writ of injunction to restrain defendant Geo. W. Sheffield, tax collector of Brazoria county, and all other tax officials. of said county, from collecting or attempting to collect from plaintiffs any part or all of said taxes assessed and levied for the year 1927 against said undivided one-eighth minerals involved in this litigation, or any interest, penalties, or attorney’s fees accrued thereon. They also prayed “for all and every relief, both legal and equitable as well as general and special that they may. be entitled to receive under law and in equity, and for all costs of suit.”

Plaintiffs also pleaded in effect that if they owned on January 1, 1927, the one-eighth interest in and under the lands described in their petition and which was assessed for taxes for 1927 by the county of Brazoria against plaintiffs and the defendant oil companies jointly, such assessment was illegal, void, and unenforceable against plaintiffs, in that the valuation placed upon said one-eighth interest was knowingly and purposely fixed by the board of equalization at a much larger value proportionally than the seven-eighth interest in the minerals under said lands owned and assessed by the defendant oil companies; “(d) That said values were fixed for taxation purposes pursuant to a- false, illegal and discriminatory policy, scheme, basis, rule, plan or method which was deliberately adopted and used by said Board in 1927 for that purpose; (e) that it was adopted and used generally for valuing all lessors’ undivided interests and all lessees’ undivided interests, in minerals in place in Brazoria County in 1927; (f) that said Board adopted and used said policy, scheme, basis, or method in valuing plaintiff’s one-eighth undivided interest in minerals (and so declared in open Board meeting held in 1927, to which plaintiffs were cited to appear) because plaintiffs, as lessors, wore entitled, under the provisions of the Hogg-Hamman mineral lease covering said lands, to have delivered to their credit in any pipe line designated by plaintiffs and attached to the wells on said premises, free of the cost of production thereof, one-eighth of the oil produced from said lands, whereas the defendants Oil Companies, as lessees, were obliged to incur the cost and expense of producing all of such oil; (g) that the ratio of discrimination in valuations against plaintiffs and in favor of defendants Oil Companies resulting from the use of said illegal policy, scheme, basis, or method ranged from 1.71 times as much, proportionately, to 7 times as much; (h) that such illegal and discriminatory policy, scheme, or basis so adopted and used in 1927 is still in use by said Board for valuing such mineral properties in ,place, and unless such Board and other taxing officials were restrained they would continue to use it; (i) that such policy, scheme, or basis (and also the actions of said Board and other taxing officials of said county in consciously valuing plaintiffs’ said properties excessively, arbitrarily, unequally and not uniformly by the use thereof) were illegal and discriminatory against plaintiffs and all other similar lessors or owners of royalty interests in minerals in place, and were also violative of section 1 of article 8 of the Constitution of Texas requiring that ‘Taxation shall be equal and uniform and all property in this State, whether owned by natural persons or corporations, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law,’ and also violative of the ‘due process’ clause and the ‘equal protection of the laws’ clause of the Constitution of the United States, which provide that ‘no State shall deprive any person of property without due process of law * ⅜ ⅜ nor ^0 any person within its jurisdiction the equal protection of the laws’; (j) that said Board of Equalization in 1927 did not equalize the values of plaintiffs’ said properties as they were required to do under the Constitution and laws of Texas; (k) that said false, arbitrary, illegal and discriminatory policy, scheme or basis of taxation as applied to lessors’ royalty interests and to lessees’ working interests in ‘producing properties’ consisted of ascertaining the average daily production of oil from a tract of land (averaged over the period of the first 90 days of the calendar year) and then multiplying one-eighth of such average daily production by $700.00 per barrel and using the product of such multiplication as the taxable values of such lessors’ one-eighth undivided interest in said minerals in place, and multiplying the remaining seven-eighths of such average daily production of oil by $400.00 per barrel and using the product of that multiplication as the taxable value of the lessees’ (defendants Oil Companies) seven-eighths undivided interest in said minerals; (1) that plaintiffs did not render said undivided one-eighth interest in minerals for taxation in 1927 but that the Tax Assessor of said county assessed the same for taxation in that year against plaintiffs and defendants Oil Companies, jointly; (m) that plaintiffs appeared at the 1927 meeting of the Board of Equalization to which they had been duly cited and offered evidence of the fair market value of their undivided one-eighth interest in said minerals in place, as well as of the whole of said minerals in place, as of January 1, 1927, and they protested in said open meeting to said policy, scheme or basis and also to such action of said Board of Equalization, both before and after the Board had fixed such excessive, illegal and discriminatory values upon plaintiffs’ undivided one-eighth interest in such minerals at amounts grossly in excess of the highest values thereof that were shown by any of the competent evidence of fair market value introduced at said Board hearing, and grossly in excess of one-seventh of the values placed by said Board on the Oil Companies’ seven-eighths undivided interests in such identical miner - als. ⅝ ⅜ ⅜ ”

Plaintiffs prayed for a writ of injunction to restrain defendants Geo. W. Sheffield, tax collector, and other tax officials of Brazoria county, from collecting or attempting to collect so much of the taxes assessed and levied in 1927 against plaintiffs as owners of the said several undivided one-eighth interests in oil, gas, and other minerals in place, as were excessive; and for all other relief, both general and special, legal and equitable, that plaintiffs, might be entitled to receive under the law and in equity; and for costs of suit.

Plaintiffs did not pray for any specific relief against the defendants oil companies, who had been taxed jointly with plaintiffs in 1927 for the taxes herein sought to be enjoined, viz.: The Texas Company, Gulf Production Company, Humble Oil & Refining Company, Crown Oil & Refining Company, Hyde Production Company. The pleadings were duly verified by affidavit of plaintiffs’ attorneys of record.

Defendants county of Brazoria and the officials thereof pleaded general demurrer and general denial. The defendants E. S. Crews, W. C. Phillips, G. W. Seibel, and Carlos Mas-terson filed general demurrer and general denial, and pleaded that they did not hold public offices in Brazoria county after January' 1, 1929. Defendant Hyde Production Company defaulted in appearance, but the citation directed to such defendant with sher-. iff’s return thereon showing good service on it is set forth in the transcript. Defendant Gulf Production Company filed plea in abatement, general demurrer, and general denial, and special exceptions.

The trial court sustained defendant Gulf Production Company’s plea in abatement and dismissed it as a party from the suit, over plaintiffs’ exception, before the case went to trial on its merits.

Defendant Humble Oil & Refining Company pleaded general demurrer, general denial, and specially that it had rendered in 1927 its seven-eighths interest in said properties that it held under sublease, and that the tax assessor had accepted such renditions and the board of equalization had approved them and levied taxes thereon, and that Humble Oil & Befining Company had paid all taxes assessed against them and such seven-eighths interest before such taxes became delinquent.

All other defendants filed answers pleading in effect general demurrer and general denial.

The state of Texas filed a petition in intervention in this cause on January 29, 1929, seeking recovery from plaintiffs (defendants in intervention) of alleged delinquent taxes for the year 1927 with accrued interest, penalties, and costs thereon and foreclosure of tax lien, upon an undivided one-eighth of the oil, gas, and other minerals in place in the ground in the lands described in the Hogg-Hamman mineral deed or lease.

In reply to such petition in intervention, plaintiffs set up as defenses thereto a general denial and also pleaded all the facts set forth in plaintiffs’ second amended original petition, which included the allegations that “plaintiffs had no title on January 1, 1927, or since to any of the minerals in place .in and under the lands described in said” Hogg-Hamman deed or lease, and plaintiffs “were therefore not taxable in Brazoria County for any portion of said minerals”; and plaintiffs (defendants in intervention) prayed for all relief, both general and special, legal and equitable, that they might be entitled to in law or equity.

The following facts found by the trial court are shown by the undisputed evidence:

Plaintiffs are, and were on January 1,1927, the owners of the lands in Brazoria county described in their petition, in and under which the oil and other minerals assessed for taxes by the tax assessor of the county for that year as plaintiffs’ and defendant oil companies’ property was situated. On June 6, 1918, plaintiffs being then the owners of these lands, executed to John Hamman the contract of sale and lease referred to in plaintiffs’ petition. This instrument, which is denominated a “Mineral Lease Contract,” in its first contractual paragraph declares: “That, for and in consideration of the sum of One Dollar ($1.00) cash in hand to first parties paid by second party, the receipt whereof is acknowledged, and of the covenants and agreements herein embraced and hereby undertaken by second party, first parties do transfer and set over, sell and convey (under the terms and conditions hereof, and for the period and purpose herein set forth) all the gas, oil, sulphur and other minerals and mineral substances whatsoever on, in and under the hereinafter described land, and the exclusive right and privilege to go on and upon said land, and to take possession thereof, for the purposes of drilling for and prospecting therefor, and, after the finding thereof, the development and production of same, and to that end, shall have the right to do and perform all proper and desired acts and things in the premises, especially the right to use all necessary water thereon or therein, and to erect any and all works and buildings, construct derricks, place machinery, and construct and place all manner of tanks and pipe lines desired.”

The fifth paragraph of the instrument has ■ been above set out in copying plaintiffs’ pleading. Other terms and provisions of this contract which may be pertinent to the questions discussed and determined in this opinion will be hereinafter set out, or stated in substance.

Plaintiffs, none of whom are residents of Brazoria county, rendered for taxes for the year 1927 all of their property in the county of Brazoria, both real and personal. This rendition of their property did not list or include any part of the unprodueed oil or other minerals underlying the lands described in their petition, but contained the following notation by them: “Note: It is not the intention to render a.ny of the oil, gas, sulphur or other minerals in the above lands, as said minerals were transferred, set over, sold and conveyed by Will C. 1-Iogg, Miss Ima Hogg, Mike Hogg, and Tom Hogg to John Hamman per instrument dated June 6, 1913, recorded in Book 125, pages 53 et seq., of the Deed Becords of Brazoria County, which instrument covers all of said land.”

This rendition was accepted and approved by the tax assessor and commissioners’ court of the county, and all taxes levied on the property, therein rendered were paid by plaintiffs in December, 1927. The tax assessor, however, placed upon the unrendered roll and assessed for taxes for that year against plaintiffs and the defendant oil companies, jointly, one-eighth of the oil and minerals underlying these lands. None of the taxes accruing upon this rendition and assessment were paid by plaintiffs or the defendant oil companies. These are the taxes the collection of which from them plaintiffs ask to be enjoined, and for which, with interest, penalties, and costs, the intervener, the state of Texas, sought and recovered judgment against plaintiffs in the court below.

The defendant oil companies, each of whom held under transfer and conveyance from John Hamman. separate portions of the oil and other minerals conveyed to him by plaintiffs by the instrument before set out, rendered for taxes and paid the taxes for the year 1927 on seven-eighths of the oil and minerals in and under the several tracts of land described in the respective conveyances to them from Hamman.

The able brief filed by counsel of appellants contains a superabundance of propositions and assignments of error, but we deem it only necessary to discuss and decide a few of these propositions.

The first proposition presented in the brief is: “The court should not have refused plaintiffs an injunction to restrain the tax collector and other tax officials of Brazoria County, Texas, from collecting or attempting to collect from plaintiffs any part or all of •the 1927 taxes which were assessed, and levied upon an undivided one-eighth (⅛) interest in oil, gas and other minerals in place in lands located in Brazoria County, Texas, because plaintiff did not own such minerals in place in the ground on January 1, 1927, or since then.”

If this proposition is sound and sustained by the authorities, the judgment of the trial court must be reversed and judgment here rendered for appellants, granting the injunction asked by them, and setting aside the judgment in favor of the intervener, the state of Texas.

It goes without saying that unless appellants had title and owned on January 1, 1927, the one-eighth interest in the oil and other minerals underlying 'their lands which was assessed against them and the defendant oil companies, jointly, for taxation for that year, they cannot be held liable for these taxes or any portion thereof. R. S. article 7151; Humble Oil & Refining Co. v. State (Tex. Civ. App.) 3 S.W.(2d) 559. It is well settled that injunction is the proper remedy to protect the taxpayer from any attempt on the part of the tax officers of the state to collect taxes unlawfully assessed against him. Lively v. Ry. Co., 102 Tex. 545, 120 S. W. 852. It is also well settled that minerals in place may by sale be severed from the land and held separately from the ownership of the land. Texas Co. v. Daugherty, 107 Tex. 234, 176 S. W. 717, L. R. A. 1917F, 989; Humphreys-Mexia Co. v. Gammon, 113 Tex. 256, 254 S. W. 296, 29 A. L. R. 607; Hager v. Stakes, 116 Tex. 453, 294 S. W. 835, 840; Ehlinger v. Clark, 117 Tex. 547, 8 S.W.(2d) 666, 670; Waggoner Estate v. Wichita County, 273 U. S. 113, 47 S. Ct. 271, 71 L. Ed. 566.

The language of the instrument executed by plaintiffs to John Hamman before set out, by apt, plain, and unambiguous words sells and conveys to Hamman “all the gas, oil, sulphur and other minerals in and under” the lands described in the instrument. The main consideration of this conveyance, as shown by the fifth paragraph of this- instrument, was the royalties thereafter stated upon the “gross production” of the minerals therein before conveyed to Hamman. The fact that the purpose of the conveyance, as stated in the first paragraph of the instrument and shown by its other provisions, was the exploration and development - by Hamman of the mineral resources of the lands, and his title to the minerals was limited and subject to termination under provisions of the lease requiring such development to begin within a fixed time and to be prosecuted with reasonable diligence, and that his right to such minerals after discovery and imoduction was to continue only as long as he continued to produce some of them in paying quantities and to comply with all of his contract undertakings, did not destroy the fee-simple character of his title to the minerals.

It is well settled by the decisions of our Supreme Court that the title of a grantee in such a conveyance is a determinable fee and the holder under such title is the owner of the minerals so long as he continues to comply with his contract agreements. Texas Co. v. Davis, 113 Tex. 321, 254 S. W. 304, 255 S. W. 601.

If this was not so, the grantees could not be held liable for taxes upon any portion of the minerals underlying lands held by them for the development and production of minerals under instruments of this character. Texas Co. v. Daugherty, supra.

The so-called “Mineral Lease Contract” involved in this case is not like the contracts construed by the Supreme Court of this state in the case of Hager v. Stakes, supra, and by the United States Supreme Court in the case of Waggoner Estate v. Wichita County, supra, in that in none of the leases involved in those cases was there a positive unrestricted conveyance by the grantor of all of the oil in and under the leased or conveyed land. In passing upon two of the five leases involved in the Hager Case, our Supreme Court bases its conclusion that the grantor remained the owner of one-eighth of the minerals in and under the land covered by the lease on the absence from the instrument of any express grant of all the minerals, or any authority conferred upon the lessee to appropriate the portion of the oil required to be delivered to the lessor. After reciting these facts, the court says in its opinion:

“On the contrary, each lease, after providing for the delivery of a stated fraction of oil to the lessor, contains this significant language: ‘The balance of such oil being the property of lessee.’ And, when each lease makes provision for the payment of reasonable royalty on minerals other than oil and gas, it continues, ‘and the minerals so produced, royalty excepted, shall be the property of lessee.’ * * * And bearing in mind that the minerals or any portion thereof could be severed and separately owned, and that the minerals or a fraction of same could be conveyed, in place, only as a part of the realty, there is no escape from the conclusion that the portion of the oil and other minerals not conveyed, but required to be delivered to the lessor, continued to belong to the lessor, and continued to be realty.
“Such was the conclusion of the United States Supreme Court in the Waggoner Case, where the court said: ‘It is to be noted that the leases contain no words of grant of the minerals as such, but the lands are demised solely for the purpose of drilling and mining. The lessees are in terms given neither title, right of appropriation, nor power of disposition of the share of the oil which is to be delivered to the lessor when severed from the soil. * * * ⅛ the absence of controlling authority in the Texas courts, we can find in the terms of the leases themselves no basis for the contention that the lessor granted or conveyed away his entire interest in the oil.’ W. T. Waggoner Estate v. Wichita County, 273 U. S. 113, 47 S. Ct. 271, 273, 71 L. Ed. 566.
“The language of each lease to the Atlantic Oil Producing Company, defining the property of the lessee as not.all the oil but only the remainder after the delivery of the lessor’s portion, refutes the contention that the contracting parties ever intended all the oil to become the property of the lessee. Equally conclusive is the language defining the extent of the lessee’s property right in the other .minerals save oil and gas.”

In another of the instruments construed in the Hager Case, the conveyance of the minerals qnder the land to the grantee expressly excepts therefrom the royalty reserved to the grantor. As set out in the opinion pf the Supreme Court, this conveyance is in the following language: “And, subject to the royalties hereinafter reserved, all of the oil and gas in and under said land is hereby granted and conveyed to the lessee. The royalties reserved by the lessor and which shall be paid by the lessee are: (a) On oil a quantity equal to one-eighth of all produced and saved, the same to be delivered at the wells or to the credit of the lessor in the pipe line to which the wells may be connected; (b) on natural gas, at the rate of $200 per annum * * *; (c) on gas produced from oil wells ⅜ * ⅜ and is not used for the manufacture of gasoline, at the rate of $25 per annum for each well. * * * ”

In commenting upon this language the court says: “We think the parties were about as careful as could have been expected had. they invoked the aid of able and experienced counsel to use language in these instruments designed to leave no fair doubt that the lessor was meant to remain the owner, as he was before he executed the instruments, of one-eighth the oil in the leased lands. Making the grant of all the oil and gas subject to the royalties reserved could have had no. other rational intent than to except from the minerals conveyed the equal one-eighth part of the oil.”

One of these leases does sell and convey all of the grantor’s interest in the land, but recites that a part of the consideration for the sale is one-eighth of all the petroleum produced from the land, and that: “This covenant shall run with the land, and on sale of said interest hereby conveyed in said premises, shall pass to and become obligatory upon the successive owners of the right and title hereby conveyed. It is agreed that no obligation is imposed on said J." M. Guffey Petroleum Company, its successors, or any holder of title under it, to drill or operate for oil on said premises, but that I, the said Lee Hager, my heirs and assigns, shall have such part of such petroleum only if and when produced.”

In commenting upon these provisions of the lease contract, our Supreme Court says: “We have concluded that, giving effect to all the language of this instrument, it does not grant or convey all the grantor’s undivided seventeen-eighteenths of the petroleum in this 150 acres of land, despite the positive terms of the granting and habendum clauses. For we think a dominant purpose of the parties was to make impossible any other disposition of one-eighth of seventeen-eighteenths of this petroleum than its delivery to the lessor, or his assigns, as the property of the lessor or his assigns. Hence no matter how poorly expressed, there being words disclosing such purpose, there is excepted from the grant the one-eighth part of the seventeen-eighteenths of the petroleum. It is obvious that the instrument negatives the view that the obligation to deliver a portion of the oil was intended to a mere personal covenant of the lessee or its assigns. Likewise, the obligation was not meant to inure to the personal benefit of the lessor. It was meant to benefit the owner of an estate in the land and to permanently run with the land.”

There is no such covenant in the lease contract in this case as that upon which the court in the case just mentioned based its holding that grantee had not conveyed all of the oil under the land. So the holding of the court in that case, that the grantor in none of the leases involved had parted with his title to one-eighth of the oil produced from the land, is based upon a different contract from the one we are called upon to construe in this case.

We think the able opinion of Chief Justice Cureton in the subsequent ease of Ehlinger v. Clark, 117 Tex. 547, 8 S.W.(2d) 666, 670, in construing the oil lease contract involved in that case, fully sustains the conclusion that appellants in this case conveyed to Hamman all of the oil in and under the land, and only became the owners of a one-eighth royalty interest in the oil after it was produced. So long as the oil remained in place in the land and the lessees complied with the provisions of the lease, they held the legal fee title to that part of the realty and the exclusive pos-, session and dominion thereover, and the mere fact that after it was physically severed from the land and became personal property th,ey were obligated, as a consideration for their lease, to deliver one-eighth thereof to appellants, did and could not change or limit their title to all of the oil as long as it remained unsevered from the land.

This conclusion makes it unnecessary for us to pass upon the many other propositions presented in the brief. It is deemed proper to say, however, that the majority of the court is of opinion that the rule by which the defendant tax authorities arrived at and fixed the value of the one-eighth royalty interest of a lessor who had reserved such interest in his conveyance to the lessee, as shown by the evidence in this case, is violative of the constitutional requirement that all taxes shall be “equal and uniform,” and if appellants were the owners of the property so assessed they would be entitled to relief on this ground.

None of the defendant oil companies were necessary parties to the suit, and no relief was asked against them by the plaintiffs. Upon this state of the record the judgment in their favor for costs against appellants cannot be disturbed.

The judgment of the trial court will be reversed, and judgment here rendered for appellants.

Reversed and rendered.


source: Caselaw Access Project

author: SMITH, J.

license: Public Domain

text:
    NELSON v. DETROIT & SECURITY TRUST CO.
    No. 8573.
    Court of Civil Appeals of Texas. San Antonio.
    April 1, 1931.
    Rehearing Denied April 29, 1931.
    Cofer & Cofer, of Austin, for plaintiff in error.
    Templeton, Brooks, Napier & Brown, of San Antonio, for defendant in error.
   SMITH, J.

The Detroit & Security Trust Company, a corporation domiciled in the state of Michigan, executor of the estate of Henrietta Powers, deceased, brought this action to recover of J. C. Nelson the amount of a promissory note executed by Nelson, and payable to said Powers. From a judgment by default rendered against him, Nelson prosecuted writ of error. The parties will be designated as in the court below, the trust company as plaintiff and Nelson as defendant.

Plaintiff’s trial petition in the court below was styled: .“Detroit and Security (Trust Company, Administrator with the Will Annexed of the Estate of Henrietta Powers, Deceased, vs. J. C. Nelson, No. B-58, 170.” The style of the case indorsed on the petition was as follows: “Detroit and Security Trust Company, Executor of the estate of Henrietta Powers, Deceased, vs. J. C. Nelson.” The representative character in which the plaintiff sued was described in the petition as follows:

“Now comes Detroit and Security Trust Company, Administrator with the Will Annexed, of the estate of Henrietta Powers, deceased, hereinafter called ‘plaintiff,’ complaining of J. C. Nelson, hereinafter called ‘defendant,’ and would respectfully show the court:
“That the Detroit and Security Trust Company is a corporation, duly incorporated under the laws of the State of Michigan, having its domicile and principal place of business in Wayne County, Michigan. That it is the successor of, and was formerly styled, Security Trust Company, and is one of the duly qualified and acting executors in the State of Michigan of the estate of Henrietta Rowers, deceased, made such under the terms of her last will and testament and the order admitting the same to probate in the Probate Court of Wayne County, Michigan, and holds ancillary letters and powers of administration over that estate in Texas, under the probate of said will by the Probate Court of Bexar County, Texas, as prescribed by law; that as such, it is the duly qualified and acting representative of the estate of Henrietta Powers, deceased, in the State of Texas.”

The note sued on was set out in the'petition, in haec verba, as was also a supplemental agreement executed by the defendant by endorsement made on the back of the note; various partial payments on the note were alleged in detail in the petition, as were all the usual formal declarations in suits upon written obligations.

Citation was issued and served upon defendant within the county, and was therefore not accompanied by certified copy of the petition. The citation contained each of the requisites prescribed by the appropriate statute. Article 2022, R. S. 1925. It correctly described the number of the suit, the court in which it was pending, the return day, the names of the parties, but incorrectly described the plaintiff as “administrator” instead of “executor.” It correctly described the note sued on, the parties thereto, the date, the maturity date, the payments and credits made and allowed; it showed the death of the payee, and that the plaintiff had instituted the suit in behalf of the payee’s estate, as the legal representative of the estate.

It is first contended by defendant that because plaintiff was described, in the citation served upon defendant, as “administrator,” the judgment by default in favor of plaintiff as “executor” was unauthorized; that this variance between petition and citation was fatal to the default judgment. We overrule these contentions. The citation met every requisite of the statute, and the defendant could not possibly have been misled by the use of the word “administrator” for the word “executor.” Article 2022; Pipkin v. Kaufman, 62 Tex. 545; Cave v. Mayor, etc., of City of Houston, 65 Tex. 619; Crutcher v. Williams (Tex. Civ. App.) 217 S. W. 1115.

In his fourth proposition defendant questions the capacity in which plaintiff brought the suit, contending that the probate court of Bexar county had no power to appoint plaintiff as administrator, with will annexed, of the estate in question. We think these are questions that should have been seasonably raised in the court below and in the probate court. At most, defendant’s complaints rest upon laxness in plaintiff’s allegations, and should have been presented in demurrers and pleas in abatement in the trial court. Nor will defendant be heard here, for the first time, to question the validity of a judgment of the probate court not void upon

• its face.

It is contended by defendant that plaintiff had no authority to maintain this suit because it is a foreign corporation doing business in this state without having secured a permit therefor from the state. We do not understand that a foreign corporation, acting as executor of an estate under appointment * by the will of a nonresident, and appointed thereto in ancillary proceedings in a court of competent jurisdiction in this state, is so engaged' in the transaction of business in this state as to require it to take out a permit therefor under the provisions of title 32 R. S. 1925 (article 1529 et seq.).

Moreover, we think the question of the qualification of plaintiff will be presumed to have been adjudicated in the probate court, when plaintiff was. granted letters testamentary for the purpose of administering the estate in controversy. ’

Eor a like reason we overrule defendant’s contention that because plaintiff’s corporate name has been changed from Security Trust Company to that of Detroit & Security Trust Company since its appointment as executor of the estate involved, it cannot lawfully act under its appointment. It will be presumed that the probate court passed upon the legality of plaintiff’s appointment and qualification to act, and granted letters testamentary to it only after properly determining those matters.

We conclude that the record sustains the judgment of the trial court against the attacks made upon it for the first time in this Court, and that judgment will be affirmed.


author: LANE, J. GRAVES, J.

text:
    JOHNSTON v. DIVERSIFIED FRUIT FARMS, Inc.
    No. 9508.
    Court of Civil Appeals of Texas. Galveston.
    Feb. 10, 1931.
    Dissenting Opinion Feb. 12, 1931.
    Rehearing Denied March 19, 1931.
    • C. M. Kay, of Houston, B. C. Johnson, of Port Arthur, and Roy Johnson, of Galveston, for plaintiff in error.
    McDonald & Wayman and H. E. Kleinecke, .Jr., all of Galveston, for defendant in error.
   LANE, J.

This was a suit by Floyd A. Johnston, plaintiff in error, against Diversified Fruit Farms, Inc., defendant in error, and M. S: Perez, to recover upon a series of six promissory notes executed by defendant in error on July 31, 1928, and payable to plaintiff in error and M. S. Perez. They were in the principal sum of $1,000 each and bore interest from July 31, 1928, at 7 per cent, per annum, payable semiannually, on December 31st and July 1st of each year, and contained the usual attorney’s fees clause. Numbered from 1 to 6 inclusive, the first note became due on or before December 31, 1929, and the remaining notes became due on the 31st day of December of each succeeding year in their respective numerical order. Each of the notes contained the following acceleration clause: “This note is one of a series of notes and it is understood and agreed that the failure to pay this note either principal or interest on any of said series 'of notes promptly when due, or failure to pay any other indebtedness due the payee when promptly due, shall at the opinion of the holder, mature the full amount thereof on the entire series, as the case may be.”

After alleging the execution and delivery of the notes substantially as above, plaintiff pleaded that after said notes were executed “he and defendant Perez had reached an agreement as to their partnership affairs after an accounting, wherein and whereby plaintiff owns a 60% interest in said notes and Perez owns a 40% interest therein; that under the terms of said agreement the said Perez duly authorized this plaintiff to act in all matters in handling the assets undisposed of, as more fully appears from the copy of such dissolution agreement hereto attached and marked Exhibit A for purposes of identification.” He then pleaded default in the payment of interest due on the notes, and, further, that “plaintiff has exercised his option as to such partnership property to declare said notes due.”

In the alternative, plaintiff pleaded, if mistaken in his right to declare all of said notes due, that defendant Perez had failed and refused to join him in declaring all of the indebtedness due; that he owned 60 per cent, thereof and declared his portion of said notes due because of default in payment of interest due July 1, 1929.

Plaintiff attached to his petition, and made it a part thereof, a copy of an agreement which set forth the terms by and under which a former partnership existing between him and M. S. Perez was dissolved, and by which the assets of such partnership were divided between the two partners, the parts of which pertinent to the issues involved in this suit are as follows:

“The firm owns six promissory notes totaling Six Thousand Dollars ($6,000.00), now in the possession of Jas. W. Wayman as trustee for the parties hereto, 60% of which notes is owned by F. A. Johnston and 40% by M. S. Perez. * * *
“Each party agrees not to use the other’s name in any future business transactions without written consent except for the purpose of collecting accounts or disposing of assets as per this agreement.
“Each party is retaining in his possession certain of the working papers and reports covering work heretofore ■ done, and it is agreed that if either should desire any such papers that are in the possession of the other in connection with work he may be called on to do, the papers will he available. It is understood that the papers will be returned to the party from whom they have been gotten after they have served their purpose.”

Plaintiff’s prayer was as follows: “Wherefore, * * * plaintiff prays for judgment for the amount of said notes, principal, interest and attorney’s fees with award to him of his portion thereof; or, in the alternative, for judgment for the amount of his interest in said notes, principal, interest, and attorney’s fees, with costs of court, and for such other and further relief as he may be justly due.”

Defendant in error filed its plea in abatement, a general demurrer, and special exceptions, alleging, in substance, that it appeared from the face of plaintiff’s petition that the only amount that could be due on the notes at the time this suit was filed was six months’ interest, which is below the jurisdiction of the district court.

The trial court sustained the general demurrer of defendant, and, upon the declination of plaintiff to amend his pleadings, dismissed his suit and rendered judgment on defendant’s cross-action for $154.

The plaintiff, Floyd Johnston, has appealed.

Appellant’s contentions for reversal, when reduced to their ultimate, are: First, that he had the right, by reason of the provisions of the notes, to mature all of them upon the failure of appellee to pay the first installment of interest when it became due; and, second, that if he be mistaken in the conclusions first stated, he did have the right to mature his 60 per cent, interest in the notes upon such default being made by appellee; wherefore the court erred in sustaining the defendant’s general demurrer to his petition; that, having pleaded such rights, the court erred in sustaining the general demurrer addressed to his pleadings.

We think appellant’s contention should be sustained.

It is shown that appellant, Floyd A. Johnston, and M. S. Perez were engaged in business as partners; that while so engaged they sold to appellee, Diversified Fruit Farms, Inc., certain of the firm’s assets, in part payment for which appellee, on the 31st day of July, 1928, executed and delivered to the firm six promissory notes, each for the sum of $1,000, bearing interest at the rate of 7 per cent, per annum, payable semiannually on the 31st of December and 31st of July of each year from the date of their execution. The first of the series of notes was payable on or before December 31, 1929, and the others in numerical order on or before December 31, 1930, and on the 31st of December of each succeeding year until all were paid. All of the notes, except to due dates, read as follows:

“$1000.00
“Galveston, Texas, July 31, A. D. 1928.
“On or before December 31,1929, after date, without grace, for value received, I, We, or either of us, as principals, promise to pay to the order of F. A. Johnson, and M. S.-Perez, at Galveston, Texas, the sum of One Thousand ($1,000.00) Dollars, with interest at 7%⅝ per annum, interest payable semi-annually, on December 31 & July 1, each year, from date until paid, together with an additional amount of 10 per cent, on both principal and interest, as attorney’s fee if placed in the hands of an attorney for collection, or if collected through bankruptcy or probate proceedings.
“This note is one of a series of notes, and it is understood and agreed that the failure to pay this note, either principal or interest, or any of said series of notes promptly when due, or failure to pay any other indebtedness due the payee, promptly when due shall at the option of the holder, mature the full amount hereof, or the entire series, as the case may be. .'
“No.-of Series of 6 Notes.
“Due ---
“Diversified Fruit Farms, Inc.
“By [Signed] Peter M. Gengler, President.”

On the 15th day of March, 1929, about nine months after the execution and delivery of the notes to the firm of Johnston & Perez by Diversified Fruit Farms, Inc., Johnston & Perez entered into a written agreement of dissolution of their partnership. By such agreement they disposed of a part of the assets of the firm, each taking certain named items of cash on hand, accounts, property, etc. the sixth, seventh, tenth, and eleventh sections of such dissolution agreement reading as follows:

“VI. The firm owns six promissory notes totaling Six Thousand Dollars ($6,000.00), now in the possession of Jas. W. Wayman as trustee for the parties hereto, 60% of which notes is owned by F. A. Johnston and 40% by M. S. Perez.
“VII. It is agreed that if the firm has done any work in the past now covered - by the books or by any of the matters referred to above, whatever amounts may be received therefrom shall be divided, if and when collected, ■ 60% to F. A. Johnston and 40% to M. S. Perez.
“X. Each party agrees not to use the other’s name in a'ny future business transactions without written consent except for the purpose of collecting accounts or disposing of assets as per this agreement.
“XI. Each party is retaining in his possession certain of the working papers and reports covering work heretofore done, and it is agreed that if either should desire any such papers that are in the possession of the other in connection with work he may be called on to do the papers will be made available. It is understood that the papers will be returned to the party from whom they have been gotten after they have served their purpose.”

The general rule which governs the construction of all contracts applies equally well to notes in so far as their construction is concerned. For instance, such rules as that the intent of the parties to the contract governs. A note, as any other instrument, must be construed as a whole so as to give effect to every part of it, if possible. In construing the notes involved in this, case we should look to the circumstances surrounding the parties thereto and ascertain therefrom and the language employed the obligations undertaken by the maker and the rights given the payee. At the time the notes were executed Johnston & Perez composed a firm. When appellee executed the notes and recited in each of them “it is understood and agreed that the failure to pay this note, either principal or interest, on any series of notes promptly when due, * * * shall at the option of the holder mature the full amount thereof on the entire series,” it knew that it was executing and delivering them to two persons, Floyd A. Johnston and M. S. Perez, and notwithstanding such knowledge it specifically provided that the holder, Johnston & Perez, might at their option, under certain circumstances, mature all the notes through the declaration of either of said partners. Is it not clear, when looking to the circumstances as they stood at the time of the execution and delivery of the notes, that appellee, in the use of the word holder, meant Johnston & Perez, and meant at that time to confer said option upon an active member of the business firm? If so, can it be reasonably thought that because Johnston & Perez, after they took the notes, agreed as to what portion or part of the undivided notes each should own destroyed the right of the partners, or either of them, to mature all the notes in the event the default mentioned was-made?

A suit may be maintained by a partnership when its affairs have not been entirely settled, though it has been dissolved. American Cotton Co. v. Whitefield & Mitchell (Tex. Civ. Ápp.) 88 S. W. 300; Traweek v. Pecos & N. T. Railway Co. (Tex. Civ. App.) 288 S. W. 843.

In construing any instrument, the court must consider the subject-matter; the object of making it; the sense in which the parties mutually understood it at the time it was made. It should be read by the light of surrounding circumstances in order to more perfectly understand the intent and meaning of the parties.

If, however, we are in error in the conclusions above expressed, we are, nevertheless, of opinion that appellant had the right to mature all the notes by availing himself of the option given to him and his associate, Perez, by the terms set put in the notes. By the agreement of dissolution above mentioned it was agreed that the six notes involved in this suit were partnership property, owned jointly by the two parties, of which Johnston owned 60 per cent, and Perez 40 per cent., and by the tenth section of said agreement it is provided that, for the purpose of collecting accounts or disposing of assets, as per the agreement, either party may use the other’s name in so doing. Thus appellant, Johnston, was constituted the holder of the notes for the purpose of colléction, and as such holder he had the authority to mature all the notes upon default being made in the payment of the interest due thereon.

The case of Bomar v. West, 87 Tex. 299, 28 S. W. 619, 520, cited and relied upon by ap-pellee to support its contention that appellant had no right to mature all of the series of notes involved- in this suit upon default being made in the payment of interest due thereon, is distinguishable from this case in this: In that case one Skinner executed and delivered to Bomar five promissory notes payable one, two, three, four, and five years after their respective dates, and to secure payment of such notes Skinner executed and delivered a deed of trust on certain land. Such deed of trust provided that: “In default of the payment of said notes, or of either of them, that a foreclosure of said trust deed should be had at the instance of said D. T. Bomar, or the legal' holder of said notes.”

The first of the series of notes was transferred by Bomar to West Publishing Company, and the other four to one Callahan. Skinner failed to pay the notes transferred to West Publishing Company when due, and the trustee,- at the request of that company, sold the land for the satisfaction of that note only. West Publishing Company became the purchaser-at such sale. At the time of such sale the other notes were held by Callahan and were not due. In the suit by West Publishing Company against BJomar and others in trespass' to try title, the plaintiffs, prevailed. On appeal our Supreme Court held that the sale by the trustee did not pass title to the land to the West Publishing Company. The court said: “The limitation upon the power of the trustee to sell upon default in the payment of either of the notes at maturity is that he shall act upon the request of ‘the holder of the notes.’ ” The court then says that it is of opinion that the language used in the deed of trust does not mean that, in case of a transfer of the several notes to different holders, any one of them has the right to demand a sale without the consent of the others. It is then said: “Now, the power of a trustee to make a sale in such a case can only be exercised when there has been a compliance with the limitations imposed by the terms of the grant. The deed in trust not having provided that a holder of any one of the notes should have the right to demand a sale, we conclude that the trustee acted without authority, and that his sale passed no title.”

In that case, the notes at the time of the sale were held by several different owners. In the present case, the notes were payable to the firm of Johnston & Perez, that firm was the holder of all the notes, and evidently the maker of the notes by the use of the words “holder of the notes” meant Johnston & Perez as a firm, or as joint holders of the notes. Upon their execution and delivery Johnston & Perez became the joint holder of the notes, and they, at the time Johnston availed himself of the option to declare all the notes due, were a part of the partnership assets of the firm of Johnston & Perez, each having a partnership interest therein, which they by their agreement had fixed as 60 per cent, for Johnston and 40 per cent, for Perez. They were as much the holder of these notes when Johnston sought to mature them as they were the day appellee executed and delivered them. No one except the original holder or holders had any interest in the notes. Indeed, there had been no change of ownership whatsoever. By the terms of the agreement between Johnston & Perez the notes remained partnership property, and by such agreement each was the holder thereof for the purpose of collection.

In the Bomar Case no attempt was being made to mature all the notes executed by Skinner. Skinner, so far as shown, was making no complaint of the enforcement of a penalty against him for his failure to pay the first note of the series when due, as the makers of the notes involved in the present suit are doing. The two cases do not present similar questions.

For the veasons pointed out we reverse the judgment, and, in view of the fact that the ■case was disposed of on demurrer, and that .appellee might desire to amend its pleading so as to set up some defense to plaintiff’s suit, ■we remand the cause for another trial.

Reversed and remanded.

GRAVES, J.

(dissenting).

This much of the able brief filed here by ■counsel for defendant in error is adopted as my dissenting opinion:

“If the only amount due on the notes at the time suit was filed was the first installment of interest due July 1, 1929, of -$210.00, then clearly the amount in dispute was less than the jurisdictional amount of the district court, and the learned trial judge was correct in sustaining the defendant’s demurrer. If plaintiff had the right to mature the whole indebtedness upon default of the first payment of interest, then the court erred, so that the sole and only question before this court is, ‘Did plaintiff have the right to mature the whole or his portion of the indebtedness upon defendant’s failure to pay the first installment of interest?’
“Plaintiff can only have the right to mature the entire series by virtue of the acceleration clause in the notes, which must be construed and enforced as any other provision in a contract. Notes and other instruments sometime provide for maturity of the whole indebtedness upon failure to pay principal or interest when due, and the failure to pay such principal or interest when due ipso facto matures the whole indebtedness. Notes and other instruments frequently provide for the maturity of the whole indebtedness at the option of the holders, or either of them. This clause permits one of several holders to elect to mature the whole indebtedness upon default by the maker, but in no case, so far as defendant has been able to determine, has the acceleration clause used in the notes under consideration allowed one of two payees to mature the whole indebtedness without the consent, election, and acquiescence of the other payee.
“The Supreme Oourt of Texas in the case of Bomar v. West, 87 Tex. 299, 28 S. W. 519, 520, had occasion to construe the clause used in the notes in the instant suit, and, in the opinion of that court, there is no such right in one of several payees of a note providing for acceleration at the option of the holder. In the reported case, plaintiff sued in trespass to try title, claiming title through a sale made under a deed of trust given to secure the payment of five notes payable to D. T. Bomar. The deed of trust provided: ‘In default of the payment of said notes, or either of them, then a foreclosure of said deed of trust should be had at the instance of said D. T. Bomar, or the legal holder of said notes.’ The first note of the series was transferred to the West Publishing Company, and the others to one Callahan. Upon default in the payment of the first note, the trustee, at the request of the publishing company, sold the land. The court held that the trustee did not pass title by his sale. In other words, since the publishing company was not the holder of all the notes, or the holders of the other notes did not join in the request, there was no right in the trustee, or the publishing company, to mature the whole indebtedness by virtue of the clause in the deed of trust. Judge Gaines, speaking for the Supreme Court, said in part:
“ ‘We are of opinion that the sale by the trustee did not pass title to the land. The limitation upon the power of the trustee to sell upon default in the payment of either of the notes at maturity is that he shall act upon the request of “the holder of the notes.” The literal meaning of this language is that any person who was the lawful holder of all the notes at the time default was made in the payment of either of them should have the right to demand of the trustee that he make the sale. It may be that it should be construed to mean that the joint demand of all the holders of the notes would be sufficient to authorize the trustee to execute the trust upon default in the payment of either. But we are of opinion that it does not mean that, in case of a transfer of the several notes to different holders, any one of them has the right to demand a sale without the consent of the others. * * ⅜ The deed in trust not having provided that a holder of any one of the notes should have the right to demand a sale, we conclude that the trustee acted without authority, and that his sale passed no title.’
“Plaintiff attempts to distinguish the above case, because it was a sale under a deed of trust in which strict compliance with all the terms and provisions is necessary. Nevertheless the words used in the deed of trust are of the same import as those used in the notes under consideration, and their construction and meaning should be the same whether used in notes, or a deed of trust.
“Further answering plaintiff’s attempt to distinguish the above case, Judge Ely, speaking for the court of Civil Appeals at San Antonio, in the case of Parker v. Mazur, 13 S. W.(2d) 174, said: ‘A court of equity must scan very closely the enforcement’ of an acceleration clause in a note. The construction contended for by plaintiff would be making a new contract for the parties by adding ’after the words ‘at the option of the holder,’ the words ‘or either of them,’ which latter provision is frequently found in notes.
“Plaintiff also pleaded that the notes were given for partnership property and that Perez had authorized him to act in all matters in handling the assets undisposed of, referring to the dissolution agreement attached to the petition.
“Paragraph X of the agreement .gave each one the right to use the other’s name in collecting accounts, or disposing of other assets as per the agreement, but the notes in question had already been disposed of in Paragraph VI of the agreement, whereby, as pleaded by defendant, plaintiff was given a 60% interest in the notes and Perez a 40% interest therein. If either partner had the right to mature the whole indebtedness prior to the dissolution not only without the consent of the other but against his wishes, such right was lost when the partnership was dissolved, and particularly by Paragraph "VI of the agreement whereby their rights in the notes were determined and they became thenceforth mere joint holders thereof as individuals in the separate proportions so fixed.
“It appears, then, that the honorable district court was correct in sustaining defendant’s general demurrer, thereby holding that plaintiff had no right to mature the whole indebtedness ; nor do the cases cited by plaintiff lead to any different conclusion.”

I think the judgment should have been affirmed.


author: BAUGH, J.

text:
    RAE et al. v. BAKER et al.
    No. 7577.
    Court of Civil Appeals of Texas. Austin.
    April 22, 1931.
    Appellants’ and Appellees’ Motion Overruled May 13, 1931.

      W. Marcus Weatherred, of Coleman, for appellant Rae.
    Burress & Dillard, of Atlanta, Ga., Griffin & Kimbrough, of McAllen, and ’ Dibrell & Starnes, of Coleman, for appellant Baker and others and appellees Dodge and others.
   BAUGH, J.

This appeal involves two questions, the construction of the will of Sarah M. W. Spence, and limitation title to 476 acres of land in Coleman county. The following facts appear;

On August 26, 1898, Sarah M. W. Spence executed her will, the part of which here involved reads as follows; “Item I. I give and bequeath to my two daughters Mrs. Sarah J. Baker and Margaret B. Denton, and my gran son James Walton Simmons the following property, towit four hundred and seventy six (476) acres of land in the County of Coleman State of Texas being #301 of Josiah Beall survey, about 15 miles west from town of Coleman. Being a part of tract set aside for Jno McClure and wife Susan McClure and-Sarah M. W. Spence as recorded in book B pages 210 & 211 — of records of Coleman County — also 167 acres of land in Campbell County, State of Georgia, being fractional lot of land No. 136 in the 14th District of originally Fayette now Campbell County and No. 6'7 in the 9th district of originally Coweta now Campbell County — said property to go to and vest in my said two daughters for and during their lives, then to go to and vest in their children if any survive them share and share alike. It being understood and is my will that the heirs herein named Mrs. Sarah J. Baker and Margaret B. Denton and James Walton Simmons shall each take a one-third interest or equal share in the above described property.”

Mrs. Spence died in October, 1901, her will was probated in Fulton county, Ga-., and copy of same with orders of probate filed in Coleman county, Tex., in February, 1906. In February, 1909, the three devisees named in said ' will conveyed in fee by warranty deed the Coleman county land to George Rae. Mrs. Sarah J. Baker died in 1912 and left surviving her nine children, who as plaintiffs claim title to a one-third interest in said lands, assert--ing that thei-r mother had, and could convey to Rae, only a life estate in said property. The other plaintiffs, appellees here, were the children of Margaret B. Denton, who is still living. They claim a remainder of one-third interest in said land subject to the life estate of their mother.

The trial court construed said will as vesting only a life estate in Sarah J. Baker and Margaret B. Denton, in all of said lands; found that the children of Margaret B. Den-ton were entitled upon her death to an undivided one-third,interest therein; found, in effect, that William Dodge Baker, son. of Sarah J. Baker, who died in 1912, was the only one of her nine children who had asserted any claim to said Coleman county lands within five years after reaching majority; awarded to him a one-twenty-seventh interest, but awarded to Rae title by limitation as against her other eight children, and awarded to the children of Margaret B. Denton an estate in remainder to an undivided one-third ■ interest in said lands; and ordered a partition accordingly.

Appellants contend, in substance, that, as to the Texas lands, said will vested a fee-simple title in the devisees, that the word “also” used between the description of the Texas lands and the Georgia lands was used in the sense of an additional “item,” and introduced another and separate devise, and that the term “said property” prefacing the life estate clause therein modified, referred to, and applied only to the Georgia lands; that is, that the will passed a fee-simple title to the devisees in the Texas lands, and a life estate only in the Georgia lands.

We do not so interpret said will. It is a cardinal rule of construction that the intent of the testator, if it can be ascertained, and is not contrary to public policy or in violation of law, will be effectuated. Where it is practicable to do so, this intent should be determined from the language of the will itself. We find nothing in the testimony, nor in the other provisions of the will, which aid in construing the portion above quoted. It is a general rule in this state both of statute and of decision that, where an estate in lands is granted or devised, unless limited by express words or by a fair construction, a fee-simple estate is always favored. Vernon’s Ann. Civ. Stats, art. 1291, and cases cited thereunder; and, if there be ambiguity as to the limitation attempted, or doubt as to its application, the larger estate will vest. Winfree v. Winfree (Tex. Civ. App.) 139 S. W. 36; Gilliam v. Mahon (Tex. Com. App.) 231 S. W. 712; Darragh v. Barmore (Tex. Com. App.) 242 S. W. 714.

In the instant case there can be no doubt as to the nature and character of the limitation imposed in express language. The only question is whether it applies to both tracts of land, or only to the latter. We think the fair interpretation of the language used points indubitably to the intent that both tracts be included in the devise made, and that the limitation applies-to both.. The term “also” is variously used, both as adverb and conjunction. In its conjunctive sense, as here used, it usually means “likewise,” “in a'ddition,” “in like manner”;' the latter meaning being that most usually attributed to it. See Webster’s Unabridged Dictionary. While the intervening description of the Coleman county land somewhat removes the devising clause from the term “also,” if these descriptions be omitted the following is the result: “I give and bequeath to my two daughters * * * and my gran son * * * 476 acres of land in the County, of Coleman State of Texas, * * * also 167 acres of land in Campbell County, State of Georgia, * * * said property to go to and vest in my said two daughters,” etc., limiting their interest to a life estate.

There appears no break in the context as between the two tracts of land, not even the beginning of a new sentence, but rather a continuation of the same devise so as to include both tracts of land. Using the term “also” in the sense of “and” or “and in addition” or “likewise” or “in like manner,” either or any of such meanings would we think indicate a clear intention of the testator to link and include both of said tracts of land in the same category, and, if so, clearly the term “said property” would refer to both tracts. That the term “said property” did refer to both tracts is further indicated, we think, in the last sentence of said item I, in which, after designating the devisees, the property, and the estate devised, the will provides that each shall “take a one-third interest or equal share in the above described property.” The term “above described property” undoubtedly includes both tracts, and was obviously used, in the same sense as the terms “said property” theretofore used in the will. We conclude, therefore, that the construction placed upon the will by the trial court was correct.

The two named daughters, having received only a life estate in said lands, could convey no greater interest than they had. Article 1290, R. S.; Gibbs v. Barkley (Tex. Com. App.) 242 S. W. 462. Margaret B. Denton, who is still living, though her deed purported to convey an estate in fee simple, conveyed only her life estate, and the right of possession of her children would not vest until her death. Limitation against them as to their estate could not, therefore, begin to run in favor of one in possession of said lands until her death. Morris v. Eddins, 18 Tex. Civ. App. 38, 44 S. W. 203; Olsen v. Grelle (Tex. Com. App.) 228 S. W. 927; Hensley v. Conway (Tex. Civ. App.) 29 S.W.(2d) 416; 2 Tex. Jur. 28, and numerous cases there cited.

Appellees by cross-assignments assail the action of the trial' court in denying to the eight children of Sarah J. Baker any recovery, urging that the registration of the deed from their mother to Rae was no notice to them; that Rae obtained only their mother’s title; that upon her death they became eotenants with him of said lands; and that, being cotenants with Rae, limitation in his favor would not begin to run unless and until actual notice that it was adverse had been given to them. They were nonresidents of the state, and no actual notice was given them by Rae of his adverse claim.

We think that said appellees could properly assume that their mother would attempt to convey no greater estate than she had; that is, her life estate. And, having acquired their estate, the remainder in fee, from the same source and by the same instrument through which their mother obtained hers, when that instrument was probated and recorded ’ in Coleman county, subsequent conveyances would be out of their chain of title, and the record of same would not be notice to them of an adverse claim of such grantee under the registration laws. White v. McGregor, 92 Tex. 55(3, 50 S. W. 564, 71 Am. St. Rep. 875; Leonard v. Benfford Lbr. Co., 110 Tex. 89, 216 S. W. 882; Lynch v. Lynch (Tex. Civ. App.) 130 S. W. 461. There was no cotenancy between the holders of the life estate and the remaindermen. The remaindermen were not entitled to any possession of their estate until the termination of the life estate. 11 Tex. Jur. 431. Upon the death of Sarah J. Baker in 1912, Rae became a cotenant with her children to the extent of their interest. He has never acquired their interest unless by limitation.

The relationship of .one cotenant to another is usually regarded in the nature of a trust, and notice of the hostile claim of one in possession against those out of possession, before it can be held to be adverse, must be brought to the knowledge of those affected. 11 Tex. Jur. 445,- and numerous cases there cited. While there are expressions in some of the cases which might be construed to mean that nothing save actual notice would suffice, we do not so understand the rule. Mere possession, improvements, or payment of taxes in themselves are not sufficient to constitute constructive notice to co-tenants of an adverse claim. But where the party in possession, as in this case, has been in open, notorious, adverse, and peaceable possession of said lands, making improvements thereon, paying taxes thereon, using and cultivating same, and openly claiming exclusive ownership thereof against the world for a period of twenty years, and for a period of seventeen years after the right of appellees to their possession accrued, and without knowledge or recognition of tiheir outstanding claim, which was not asserted by them until 1929, we think his adverse possession and claim was of such “unequivocal notoriety” as to conclusively constitute presumptive notice to ap-pellees of its hostile character. Phillipson v. Flynn, 83 Tex. 582, 19 S. W. 580; Stiles v. Hawkins (Tex. Com. App.) 207 S. W. 89, 95; Liddell v. Gordon (Tex. Com. App.) 254 S. W. 1098, 1100. That being true, the trial court properly rendered judgment against the eight children of Sarah J. Baker on the limitation issue.

Finding no error in the record, the judgment of the trial court is affirmed.

Affirmed.


author: LESLIE, J. LESLIE, J.

text:
    EASTLAND BUILDING & LOAN ASS'N v. EASTLAND COUNTY LUMBER CO.
    No. 747.
    Court of Civil Appeals of Texas. Eastland.
    Dec. 19, 1930.
    Rehearing Denied May 15, 1931.
    Turner, Seaberry & Springer, of Eastland, for appellant.
    Scott, Brelsford, McCarty & Brelsford, of Eastland, for appellee.
   LESLIE, J.

This is a suit by the Eastland County Lumber Company, appellee here, against the East-land Building & Loan Association, appellant for $420, alleged to be the balance of the consideration which the association- obligated itself to pay the lumber company for a $2,700 promissory note, and mechanic’s and materi-almen’s lien securing same; $2,280 having been theretofore paid the lumber company. Trial was before the court and resulted in a judgment for plaintiff for the amount sued for, and the association prosecutes this appeal. There are no findings of fact or conclusions Of law. The parties will be referred to as in the trial court.

For cause of action the plaintiff, lumber company, alleged that, by virtue of an agreement between itself and the loan association, the latter became bound and obligated to pay it the sum of $2,700, upon its indorsement to said loan association of said note, together with a transfer of the lien securing the same. That sueh indorsement and transfer were made on or about February 14, 1929, at which time, in part performance of its contract, the association paid to the lumber company $2,-2S0, leaving a balance of $420 due and unpaid, for which this suit was instituted.

The defendant association answered by general denial and specifically pleaded that, at the time of the transfer and assignment to it of said note and lien, there were two unpaid claims for labor and material (to R. P. Crouch for plumbing, $325, and to G. W. Sherrill for electric wiring, $95), aggregating $420; said sum was withheld by the defendant with the agreement that the lumber company would pay said outstanding claims and furnish.the association with receipted bills and releases therefor; whereupon, the remaining sum of $420 was to be paid by defendant to plaintiff. The defendant further specially pleaded partial failure of consideration, and that the plaintiff was liable on its warranty, notwithstanding it indorsed the note without recourse.

The material facts out of which the lawsuit arises are: J. O. Earnest and wife, Lorena Earnest, being desirous of erecting a homestead residence on a certain tract of land in Eastland county, contracted with L. D. Willis to construct the same, according to certain plans and specifications. The consideration was paid by the owners, part in cash and the part (here involved) by a promissory note payable to the order of said Willis for $2,700. The note and lien were executed with the legal formalities necessary to the fixing of a lien as security on a homestead. The note and lien were of date December 3, 1928. Immediately, on December 6th following, the note and lien were by said Willis indorsed ana transferred to the plaintiff lumber company and duly filed for registration in the county clerk’s office of Eastland county on December 7, 1928.

By written instrument bearing date February 14, 3929, the lumber company transferred the note and lien to the building and loan association, • and this instrument was filed for record on the 18th day of February, 1929. The note was indorsed, without recourse, by the lumber-company.

After the assignment of the note and lien to the lumber company, R. P. Crouch contracted with the original contractor, L. L. Willis, for the installation of the plumbing, and G. W. Sherrill contracted with the said Willis for the electric wiring of the Earnest house. The residence was apparently completed, according to contract, plans, and specifications, the latter part of January, 1929.

On February 18, 1929, the subcontractor, Crouch, took first steps to fix a lien against the property of the owner, J. O. Earnest, for material and labor furnished by him under the contract with Willis. Due notice was served upon the owner and a sworn account was filed in the office of the county clerk on February 19, 1929. The following day G. W. Sherrill took like steps to fix a lien for his labor 'and material against the owner’s property.

Although the original contractor, Willis, assigned and transferred' the note and lien to the lumber company on December 6, 1928, and the same was, on December 7, 1928, duly recorded in the county clerk’s office of Eastland county, he nevertheless proceeded with the construction of the residence, and, according to the undisputed testimony and the accounts filed by Grouch and 'Sherrill, it was with him that each of them contracted to furnish the labor and material, the price of which aggregates the sum here sued for, ■ and to secure which they attempted to fix respective liens.

From these undisputed facts it clearly appears that, after December 6, 1928, the date of the transfer of the note and lien by Willis, no one furnishing labor or material for the construction of this residence, by virtue of a •contract with Willis only, could fix any character of lien on the owner’s 'property as security for áuch labor and material. This is the material consideration in the case, and since Grouch and Sherrill contracted with Willis at a time when the owner of the building owed him (Willis) nothing, it was not thereafter within their power to serve the owner with notice and fix a lien on his property for the price of such labor and material furnished and used by virtue of such contract with Willis. It seems to have been uniformly held in this state that, after a note secured by a lien has been transferred by the contractor- to whom it was given, and under circumstances herein detailed, one furnishing labor and material to sueh original contractor (as did Grouch and Sherrill) cannot fix a lien against the property of the owner, and the assignee of a note and lien holds the lien as provided in the contract for the full amount of the note. Thelander v. Becker (Tex. Civ. App.) 199 S. W. 848 (writ refused); Beilharz v. Illingsworth (Tex. Civ. App.) 132 S. W. 106 (writ refused); Gordon-Jones Construction Co. v. Welder (Tex. Civ. App.) 201 S. W. 681 (writ refused).

- From what has been said it follows that it is our conclusion that the note and lien were in all respects what they purported to be when assigned by the lumber company to the building and loan association, and that, in so far as the particular claims here discussed are concerned, no legal reason existed or now exists for the withholding of the unpaid balance of the amount promised by the association for the $2,700 note and here sued for.

The defendant’s special defense, based upon the possibility of the Crouch and Sherrill claims being protected by liens against the owner’s property, is believed to be a misapprehension of the facts and without legal foundation, since, as pointed out, said claims were at no time protected by the original contractor’s lien against the owner’s property, and the subsequent attempt to fix a lien against that property availed nothing.

From these conclusions we pass to an examination of the testimony and consideration of the pleadings (especially those upon 'which the plaintiff seeks to recover judgment herein), with the view of determining whether or not the pleadings form a sufficient basis for the judgment, and whether or not there is any evidence reasonably supporting the judgment appealed from. As stated, there are no findings of fact or conclusions of law, and the judgment of the trial court must therefore be sustained if there is testimony supporting any theory authorizing it. L. D. Powell Co. v. Lee (Tex. Civ. App.) 257 S. W. 308.

Upon an examination of the pleadings, we find them sufficient to support the judgment, and we also believe the evidence is ample to support the same.

More specifically we do not sustain the defendant’s contention that the plaintiff alleged an unconditional contract with the defendant association to pay it (lumber company) $2,700 for the note and lien, and proved a conditional one to pay $2,280 for the same and the balance upon a contingency. There was evidence supporting the plaintiff’s allegations of an unconditional contract to pay the $2,700 for the note and the lien, and the matters involved in the contingency were occurrences or considerations subsequent to the actual making of the contract between the parties and were in the nature of precautions or excuses for a temporary nonperformance by the defendant association. The only variance which we discover is as to the date of the oral contract alleged. There was but a slight misdescription and to be available here the point should have been raised in the trial court. Kelsey v. Myers (Tex. Civ. App.) 29 S.W.(2d) 855.

What is here said necessarily disposes of the plea of partial failure of consideration, as well as the other matters of special defense, and believing each of the propositions urged by appellant to be without merit under the facts of the case, they are overruled and the judgment of the trial court is affirmed.

FUNDERBURK, J., not sitting.

On Rehearing.

LESLIE, J.

At a former day of this term the judgment of the trial court in this cause was affirmed. On motion for rehearing we have concluded that the judgment is erroneous and that it should be reversed and remanded for a new trial for the following reasons:

Omitting formal parts and portions of the pleadings not essential to the point under consideration, it will be observed that the plaintiff’s suit is upon an unconditional promise alleged to have been made by the loan association to the lumber company for the purchase of a note amounting to $2,700 and secured by a mechanics’ and materialmen’s lien on lot 8, block'27, Daugherty addition to the town of Eastland. The note and lien were executed by the owners, J. O. Earnest and wife, to the contractor, L. L. Willis, and by him transferred and sold to the lumber company.

Following these facts the plaintiff alleged specifically:

“That thereafter, on the said 14th day of February, 1929, plaintiff entered into an agreement and contract with defendant whereby it was agreed by and between plaintiff and defendant that plaintiff should sell, endorse and deliver to defendant said promissory note and execute and deliver to defendant a written assignment and transfer <ff said lien for and in consideration of the sum of $2700.00 then and there agreed and promised to be paid by defendant- to plaintiff for and in consideration of the endorsement and delivery by plaintiff to defendant of said noté and the execution and delivery by plaintiff of an instrument in writing, assigning, transferring and conveying said lien to defendant, said sum to be due and payable on delivery of said note and said written assignment, and further plaintiff would show that, in consummation of said contract and agreement it did on said 14th day of February, 1929, sell, endorse, and deliver to defendant said note and did by written instrument bearing said date duly execute, sell, assign, transfer and convey to defendant said note and said lien and all liens and titles held by it in and to said land, which said written instrument was on said date by plaintiff delivered to defendant.
“That, by reason of said contract and agreement, the endorsement and delivery of said note and the execution and delivery of the assignment, .transfer and conveyance of said lien, defendant promised and became bound and liable to pay plaintiff the said sum of $2700.00; that on the delivery of said note and said assignment, as above set out, defendant in partial fulfillment of its' debt and obligation paid to plaintiff the sum of $2280.00, leaving a balance then due -by it to plaintiff of $420.00, which said sum of $420.00 remains unpaid and owing to plaintiff, and though often requested defendant has hitherto failed and refused and still now refuses to pay the same or any part thereof, to the plaintiff’s damage in the sum of $420.00, together with interest thereon from the 14th day of February, 1929, at the rate of 6% per annum.”

The last -paragraph specifically sets forth plaintiff's elai'm for recovery of the $420. The failure to pay it as there alleged is the default charged to the defendant loan association. Respecting the plaintiff’s cause of action and the default charged, the defendant association, after general denial, answers thus:

“For further answer, if required, defendant says that, in connection with the agreement alleged in said petition and at the time the negotiations between plaintiff and defendant for the purchase of the note and lien therein described were being had, it became known that all of the labor and material used in the erection of the dwelling and called for in the mechanics’ and materialmen’s lien contract, and the plans and specifications referred to therein, had not been fully paid for. That this fact was known to plaintiff at the time of its offer to sell said note and lien to defendant and the matter discussed with defendant’s representatives. That as a result •of the discussion between the representatives •of plaintiff and defendant, and as a part and parcel of the agreement and obligations entered into by plaintiff in connection with the sale of said note and lien, it, through its representatives, agreed, to pay for said unpaid labor and material lohich amomited in the aggregate to the sum of $420.00 aivd furnish defendant dHth proper receipts and releases signed by the respective laborers and materi-almen. (Italics ours.) That defendant then agreed to pay the face value of said note and lien to plaintiff, less the amount of said bills aggregating $420.00, and to pay the balance of the face value of said note and lien when said receipted bills and releases were procured by plaintiff and delivered to defendant as agreed. That accordingly the defendant paid plaintiff the sum of $2280.00, which sum plaintiff accepted and thereupon endorsed the note over to defendant and also executed and delivered a transfer of the lien securing the same, agreeing to wait for the balance of the money until the receipts covering the $420.00 ■of bills had been procured. and delivered. That said bills were in favor of R. P. Crouch and Guy Sherrill; the first in the amount of $325.00. covering labor and'material for plumbing installed by said Crouch according to the plans and specifications; the second in the amount of $95.00 covering labor and material for electric wiring installed by said Sherrill according to the plans and specifications. ⅜ ⅞ t *
“That defendant was and has been at all times ready and willing to pay said balance to plaintiff upon the delivery of said receipts and releases, but that notwithstanding its obligation and agreement so to do, plaintiff failed and refused .to procure and deliver same. * * *
“That as long as said bills remained unpaid the lien contract was not security for the full face of the note, but only the face value thereof, less the amount necessary to fully pay said bills.”

We pass to a consideration of the testimony tendered by the plaintiff to support its declaration of an unconditional contract by which the defendant was to pay the full sum of $2,700 for the note and lien. That at some time prior to the exchange of the assignment and the receipt of the $2,280 there was an unconditional understanding between the plaintiff and the defendant to that effect is recognized in that portion of defendant’s answer alleging: “ * * * That, in connection with the agreement alleged in said petition, ■and at the time the negotiations between plaintiff and defendant for the purchase of the note and Uen therein described were being had, (italics ours) it became known that all of the labor and material * * * had not been paid for.”

Upon such allegations and admissions as these it would appear, though we do not so decide, that the defendant would have the right to open and close the argument under such a state of the record. However, we have examined the plaintiff’s testimony to support his right of recovery on the unconditional contract alleged and will set out some of the material portions of that testimony:

“I knew at the time I had the conversation with Mr. Bender with reference to the sale of this note.that Mr. Grouch or Mr. Sherrill had not received their money. I believe I stated that when I went up to get this check Mr. Harrell wrent with me, and I am not positive about it but I think he was with me. The check the loan company gave me was for $2280.00. As to what reasons the Building & Loan Association gave me. for not paying the full amount of the note, Mr. Bender said there were some bills that had not been paid. As to what my reply was, we agreed to let •them hold the'amount of the bills out, and he held that out to see whether or not the claims were just. That was agreeable with me. * s . * Yes, I think Mr. Bender made reference to the provision in the application, that the owner must furnish an affidavit that all outstanding bills, labor bills, had been paid before paying out any money on the loan at the time that we were 'discussing the payment of the loan. As to what he said about it, I think he wanted an affidavit that all bills were paid. ⅜ * *
“Yes, I knew at the time of the conversation of February 14th, that these bills had not been paid. * ⅜ * As to when I first learned about these bills not having been paid, it was when he started to give me the check for $2280.00, but I 'wouldn’t agree to take it then, and he held the cheek a while before I agreed to take it. * ⅜ ⅜ As to just what Mr. Bender said at that time, when I refused to accept the check, he said there were some contentions that some hills had not been paid and that he wanted to hold that amount out until it was definitely settled. * * *
“I.knew when we got the check for the loan that their bills were deducted.”

It nowhere appears in the plaintiff’s testimony that they ever procured'and presented to the loan company a receipt for the Crouch and Sherrill claims or a release of the lien, if any, which they purport to claim against the property of the owner. It is just a little equivocal as to what the agreement was upon this point. In the main it would seem that the agreement was that the payment of the $420 should be withheld until the association was shown that the Sherrill and Crouch claims were paid' and actually released, and in another sense it would seem that the agreement was that the amount should be withheld pending the ascertainment' of whether said claims were just. In the plaintiff’s testimony the chief witness testified: “We agreed to let them hold the amount of the bills out, and he held that out to see whether or not the claims were just. That was agreeable with me. * ⅜ * Yes, I think Mr. Bender made reference to the provision in the application, that the owner must furnish an affidavit that all outstanding bills, labor bills, had been paid before paying out any money on the loan at the time that we were discussing the payment of the loan.”

Of course, it is recognized that the point made by the lumber company, is that it is entitled to the payment of the $420 on a showing that neither Sherrill nor Crouch held a claim secured by lien on the owner’s property. In the appellee’s brief the contention is summed up as follows: “ * ⅜ ⅜, Neither of said subcontractors were entitled to their respective liens to secure the payment of his ■claim. We respectfully submit that appellee was and is now entitled to have paid to it by appellant the said sum of $420.00.”

It would seem from this record, as pointed out in our original opinion, that no valid lien exists against the Earnest homestead to secure the payment of the Crouch and Sherrill claims. But with that fact conceded, we have reached the conclusion that this judgment is not supported by the testimony because the testimony offered by the plaintiff itself, and above set out extensively, does not prove that there was, at the time the $420 was retained by the loan association, an unconditional contract between the litigants for the payment of $2,700 on the delivery of the transfer. In fact, the contract involved was somethintr else and rested upon the agreements with reference to the $420, and the nature of that agreement is particularly described in Hunter’s testimony itself.

If this $420 was to be retained until it .was ascertained that these claims were just, or if it wias to be retained until the receipts and releases were obtained by the lumber company and tendered to the association, then an entirely different situation presents itself to that upon which recovery is sought. From Hunter’s testimony alone it would appear that one or the other of these contingencies was a condition precedent to the lumber company’s right to demand the payment of the $420, and until it shows performance in such respect it cannot be said that it has put the association in default of that contract and agreement had at the time the check for $2,-280 was accepted. Until such default is shown the right of recovery does not exist. Riverside Lumber Co. v. Lee, 7 Tex. Civ. App. 522, 27 S. W. 161; Smoot & Smoot v. Nelson (Tex. Civ. App.) 11 S.W.(2d) 578; McGreal v. Wilson, 9 Tex. 427.

In the first opinion cited it is said: “It is an elementary rule of law that the allegata and probata must correspond. The plaintiff must recover upon proof of his case as he state's it.”

Whether or not the claims are just, and whether or not they are secured by a lien, those questions have not been adjudicated or otherwise settled, and an effort to settle the same by this litigation, to which the claimants are not parties, 'would seem to be a futile thing. We question, without deciding, whether ot not a judgment in this cause, merely with the parties at present therein, would be final, without making Crouch, Sher-rill, and Earnest parties thereto. We make this suggestion in view of another trial, for it very clearly appears from these pleadings and the briefs that Sherrill and Crouch are not bound by the judgment in this case, and that the affirmance of the judgment below iñ mo way precludes them from immediately instituting a suit against the association, the lumber company, and Earnest. In such a situation there would be the possibility of a double recovery against the loan association, were it here required to pay the amount involved to the lumber company on the judgment here under consideration.

To the extent indicated herein the original opinion will be modified. For the reasons assigned the original judgment of thm court is withdrawn, and the judgment of the trial court will be reversed and the cause remanded for another trial.

FUNDERBURK, J., disqualified and not sitting.