text:
    UNION SULPHUR CO. v. TEXAS GULF SULPHUR CO. et al.
    No. 7594.
    Court of Civil Appeals of Texas. Austin.
    July 15, 1931.
    Rehearing Denied Sept. 23, 1931.

      Cullen R. Liskotv, of Lake Charles, La., Proctor, Vandenberge, Crain & Yandenberge, of Victoria, Ingram & Munson, of Wharton, Vinson, Elkins, Sweeton & Weems, of Houston, and Black & Graves, of Austin, for appellant.
    P. O. Settle, Claude McCaleb, and W. H. Wilson, all of Houston, Jno. M. Corbett, of Bay City, Jno. E. Green, Jr., of Houston, Williams, Neethe & Williams, of Galveston, Orgain, Carroll & Bell, of Beaumont, H. L. Stone, of Pittsburgh, Pa., and R. L. Batts, of Austin, for appellee.
   McClendon, c. j.

Appellant, plaintiff below (called herein Union Company), sued Texas Gulf Sulphur Company (called herein Gulf Company), Gulf Production Company (called herein Production Company), and others to recover one-fourth undivided interest in the sulphur deposits in a 480-acre tract of land in Wharton county, and, in the alternative, for damages for failure to reasonably develop the mining of the sulphur on said tract under a mineral lease, referred to herein as the Weed' lease. The right to recover the mineral title was predicated upon extinguishment by limitation of appellees’ title acquired under the lease for failure to produce sulphur after its discovery, and upon abandonment.

At the conclusion of plaintiff’s testimony, defendants moved for an instructed verdict, and the trial judge announced as his opinion that the Weed lease was still in force, but that he was uncertain whether the issue of damages should be submitted to the jury; whereupon plaintiff announced that it did.not desire to have the issue of damages submitted to the jury. The court thereupon rendered judgment for defendants upon a directed verdict; from which judgment plaintiff has appealed.

The appeal presents three questions:

(1) Whether there was evidence, either conclusive as a matter of law, or prima facie, so as to support a fact finding, that the lease ¡had terminated by limitation.
(2) Whether there was any evidence of abandonment.
(3) Whether the judgment constitutes a bar to any rights appellant might have under the lease.

The first question involves a proper construction of the Weed lease, which bore date June 29, 1922, was upon the expressed consideration of $240 cash and the covenants and agreements thereinafter contained, and granted the premises to the lessee “for the sole and only purpose of mining and operating for oil and gas, or other minerals, or of laying pipe lines and of building tanks, power stations and structures thereon, to produce, save and take care of said product.”

It provided for one-eighth royalty of all oil produced and saved from the leased premises, and that “if sulphur is produced lessee shall pay 80 cts. per long ton royalty.” This is the only specific reference to sulphur in the lease.

The two following clauses, the first providing for a 5-year exploratory period, and the' second for its indefinite extension, are the main provisions around which the controversy revolves. For convenience we will refer to these clauses, respectively, as Nos. 1 and 2:

(1) “It is agreed that this lease shall remain in force for a term of five years from this date, and as long thereafter as oil or gas, or other minerals or either of them, is produced from said land by the lessee. The term of this lease may be extended under lp,st paragraph written herein.”
The paragraph referred to reads: (2) “If an oil well is actually drilling on these premises at the end of the five-year period, this lease shall remain in force as long as lessee continues drilling operations on said well, or any successive well, with due diligence and good faith in an effort to develop oil or gas or other minerals; provided not more than 00 days shall elapse after abandonment of one well before commencing another well, and if oil or gas or other minerals shall be discovered this lease shall remain in force as long thereafter as lessee continues to produce any one of said minerals.”

The following additional provisions should be noted:

“If no well be commenced on said land on or before the 29th day of June, 1923, this lease shall terminate as to both parties, unless the lessee on or before that 'date shall pay or tender to the lessor or to the lessor’s credit in the Bank of Hardin, at Hardin, Mo., or its successors, which shall continue as the depository, regardless of changes in the ownership of said land, the sum of fifty cents per acre, which shall operate as a rental and cover the privilege of deferring the commencement of a well for six months from said date. In like manner and upon like payments or tenders, the commencement of a well may be further deferred for like periods of the same number of months successively. And it is understood and agreed that the consideration first recited herein, the down payment, covers not only the privilege granted to the date when said first rental is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid, and any and all other rights conferred.
“Should the first well drilled on the above described land be a dry hole, then, and in that event, if a second well is not commenced on said land within twelve months from the expiration of the last rental period for which rental has been paid, this lease shall terminate as to both parties, unless the lessee on or before the expiration of said twelve months shall resume the payment of rentals in the same amount and in the same manner as hereinbefore provided.”

The first contention of appellant may be stated as follows:

(a) Under proper interpretation of the limitation set forth in the lease, the discovery of any one of the minerals covered by the lease in paying quantities during the five-year exploratory period (clause 1) would terminate the lease by limitation, unless at the end of - the five-year period said mineral or some other mineral covered by the lease was then being actually produced. The evidence showed either conclusively or as a fact issue that sulphur was discovered in paying quantities during the five-year period, and no sulphur or any other mineral was being produced on the 29th day of June, 1927. Therefore either the lease terminated by limitation, or a fact issue in that regard was presented.
(b) Even if the lease were extended (clause 2) by actual drilling on June 29, 1927, the fact that sulphur was thereafter found in said well in commercial quantities and was not thereupon or within a reasonable time produced, the lease terminated by limitation.

The facts upon which these contentions rest are without material dispute, and may be summarized as follows:

Shortly after the lease was executed, the interest of the lessee passed to the Production Company, which company complied with all the provisions of the lease both as to drilling and payment of rentals during the entire five-year period. Two oil wells were drilled prior to March, 1927, neither of which showed any evidence of oil, gas, sulphur, or other mineral. Well No. 3 was begun March 10th, and completed or abandoned March 29, 1927. It showed no indication of oil or gas, but at 671 feet a deposit of sulphur and lime was topped which was drilled into for 36 feet, when there was a cave-in and the well was abandoned. Cores of this deposit were taken and sent to the Houston office of Production Company. Well No. 4 was begun April 6th, and completed June 7, 1927. It showed a sulphur bearing limestone deposit of 122 feet. These two wells, it will be noted, were completed prior to June 29, 1927, the termination of the five-year period, and both showed sulphur bearing deposits. Well No. 5, 250 feet from well No. 4, was begun June 19, 1927, was being drilled when the five-year period ended, and was completed August 22, Í927. Sulphur was topped at 746 feet, and further drilling showed sulphur and lime deposit of 67 feet and sulphur and gyp of 101 feet. There was no indication of oil, gas, or any mineral other than sulphur in any of these wells. The latter part of September, 1927, a well, presumably No. 6, was brought in as an oil producer, and oil in commercial quantities has been produced from the leased premises ever since.

After the discovery of sulphur in well No. 3, there were negotiations between the Production Company and appellant looking to a transfer by the former to the latter of the sulphur interests in the lease. These negotiations fell through, and on June 16, 1927, the Production Company transferred said interest to the Gulf Company. From that time on there has been continuous drilling by both of said companies looking toward a development of the minerals in the land. Sulphur was not actually produced from the land until March 20, 1929, at which time the Gulf Company had erected and in operation a large sulphur mining plant. This suit was filed March 24,1928.

Appellant relies upon the testimony of Keever, its vice president, to establish its assertion that sulphur in commercial quantities was discovered in both Nos. 3 and 4 wells during the five-year period, and in well No. 5 after the five-year period. We give the following as a fair summary of his pertinent testimony:

The only method of mining sulphur in deposits of this character is by what is known as the Frasch method;, the process being to heat the sulphur to the point of liquification (245 to 248 degrees Fahrenheit) by forcing steam into the deposit, after which it is extracted _in its then liquid state. The process is quite complicated, and requires a large and expensive plant, besides extensive preparation in the way of providing adequate water supply and transportation facilities. Keever gave as the lowest cost estimate of such plant $50,000, and as the shortest time for erection 90 days. He detailed quite at length the varied experiences in sulphur mining of appellant both in Texas and Louisiana, from which it appeared that the only certain method of determining whether sulphur existed in paying quantities was by erecting a plant and putting it in operation. The upshot of his testimony in this regard was, that very favorable drill showings had proved unprofitable in some instances, and vice versa. In other words, it was always a gamble until demonstrated by the actual operation of a sulphur plant. His testimony further showed that, under prudent prospecting and where time therefor was afforded, a number of wells should be drilled to test out the extent of the deposit 'before incurring the expense of erecting a plant. Instances where appellant had drilled a large number of test wells, after sulphur was discovered and before erecting a plant, were given.

With reference to the core showings from wells 3 and 4, he testified: “Based upon my experience in the development of sulphur at Sulphur Mine, Louisiana, for the Union Sulphur Company, my opinion as to the presence of sulphur in the Chase & Hughes tract on the Boling Dome, from the logs and cores shown me, was that it showed there was plenty of sulphur; and it showed sulphur to be present on the Chase & Hughes tract on the Boling Dome in commercial quantities.”

The following is from his cross-examination : “Q. Well, I will ask you then, Mr. Kee-ver, in your judgment as an experienced sul-phur operator, are you prepared to say that it wouldn’t be good sound business judgment, before going in and operating on a 4S0-acre lease, the size of the Chase & Hughes lease, involved in this litigation, to engage in a development program, with a view of developing whether or not the sulphur lay under that tract, or a large part of the tract, instead of just in two wells? A. Under the circumstances, I think a plant would have been justifiable for the production of sulphur. It might have been a policy, if you had time, to drill another well or two before the construction of the plant. If I had the Chase & Hughes lease to operate and had a showing from the two wells that I have spoken about in my direct testimony, in determining the size and kind of a plant, the location of a plant, with reference to the 480 acres of land contained in this lease, I don’t think it would have been of much advantage to me, as an operator, to know whether the sulphur extended over the entire 480 acres, or only a portion of it, as I would have built the plant anyhow, from the showing that those wells have made; the reason that I would do that is that there have been several wells that we have produced sulphur from, that we have produced considerably over 100,000 tons of sulphur, which would justify the expense to demonstrate or determine whether there was sulphur there or not; if there was and it was necessary, there could have been additional plants built, in the meantime, for the further production of sulphur. It is my position that I would have built a plant on those two wells to demonstrate whether or not there was sulphur there in commercial and paying quantities, arid that’s the reason that I would have done it — because there was sulphur there showing in large quantities — and the only basis for it. That was the only way, ás I see it, that it could be demonstrated whether or not it was there in commercial and paying quantities, because I have drilled wells that didn’t show anything to speak of; we laid by for six and eight months because they didn’t show enough sulphur, that we thought justified putting hot water in them, and we steamed them and they made excellent wells. And I have drilled plenty of others that I thought would be good wells and that didn’t do very well; it is in the game. This sulphur is sort of a hazardous game; and if you haven’t something to go in with, you better not take out too big a stack.”

No preparation for the mining of sulphur other than exploratory drilling was begun during the five-year period or thereafter up to the filing of the suit.

It is a well-settled general rule that leases of this character import an implied covenant to reasonably develop the mineral resources of the demised premises. Upon the discovery, therefore, of sulphur in each of the wells 3, 4, and 5, there was an implied obligation on the part of the lessee to do whatever was reasonably necessary under the circumstances (1) to ascertain whether the deposit existed in commercial quantities; and (2) thereafter to reasonably develop the lease as to sulphur, both as regards exploration and production. Under the holding of the 'Commission of Appeals in Waggoner v. Sigler Oil Co., 284 S. W. 921, breach of this implied covenant would forfeit the lease, and this suit was originally brought under the doctrine there announced. June 28, 1929, the Supreme Court overruled this doctrine, 118 Tex. 509, 19 S.W.(2d) 27, 31, and held that the remedy for breach of implied covenants in mining leases is damages, or, in a proper case, equitable relief 'by way of specific performance, and, in the alternative, cancellation. The limitations which appellant seeks to have read into the lease are based (1) upon discovery of sulphur in commercial quantities during the five-year period, and nonproduetion of any mineral on June 29, 1927; and (2) discovery of sulphur in commercial quantities in well No. 5 on August 22, 1927,' and nonproduction of sulphur thereafter within a reasonable time.

Manifestly there is no express language of the lease providing for its determination upon either of these contingencies. The theory of appellant, as we gather it from the brief and argument, is that this interpretation follows necessarily from the fact that the grant was only for the purpose of mining and the main object of the grant was production from which rentals in the form of royalties would accrue to the lessor. The gist of appellant’s construction under clause 1 is that, since production was manifestly the main purpose of the lease, it was therefore not in the contemplation of the parties that there should be any extension of the exploratory period beyond the five years, if any mineral was discovered in paying quantities during that period, and the lease would thereupon terminate by limitation unless some one of the minerals covered by the lease was then being produced.

Following the same course of reasoning, appellant construes clause 2 to mean that once a mineral is discovered continuous production, either immediately or within a reasonable time, alone will extend the life of the lease.

In effect clause 1 is construed to exclude the privilege of extending the exploratory period under clause 2, if during the five-year period a mineral has been discovered in commercial quantities. We are unable to give this construction to either of the two clauses.

Clause 1, eliminating the privilege of extending the exploratory period beyond the five years, is the usual clause now found in oil and gas leases. Under it production at its close is essential to the continued life of the lease. It matters not what may have-transpired during the five-year period, what exploration or what preparation for production has been made, or what degree of proximity thereto has been reached. Unless there is actual production at the end of the five-year period, the lease terminates eo .instanti according to its express terms. On the other hand, where the several express provisions (not here involved) have been complied with, the lease by its express language is to “remain in force for a term of five years.” All •of the express provisions for keeping the lease alive during the five-year period were complied with. Under such circumstances the lease became absolute for the five-year period in so far as any limitation on the estate was concerned. We do not understand appellant to contend that discovery and failure to produce sulphur worked a determination of the estate during the five-year period, but that such discovery during the period terminated the estate at its close if at that time there was no production, regardless of clause 2. There is as cogent ground for the-former as for the latter view. In order to read either interpretation into the lease, resort must of necessity be had to the implied covenant to produce after discovery. The-language extending the exploratory period under clause 2 is as positive and certain as that providing for an absolute five-year exploratory period. But one condition is attached to-this extension privilege, and that is that an oil well be then drilling. If so, the exploratory period is expressly extended. The parties have so bound themselves, and so should they be held bound.

While it is unquestionably true that the-manifest main purpose of the lease was production from which the lessor would derive a royalty, and that therefore production upon discovery in commercial quantities was an .inescapable obligation of the lessee; still that obligation was not imposed by any express language of the lease, nor is there any provision for forfeiture or termination of the lease for breach of such obligation. It belongs, therefore, to that character of implied covenants, breaeh of which gives an action for damages, or other above-stated appropriate remedy; but does not terminate the estate either ipso facto as upon limitation or at the ■option of the lessor as upon condition subsequent. Where the lease expressly provides for the continued duration of the estate during the existence of express conditions, to hold that it may be terminated while those conditions exist on account of some implied obligation or covenant, would be doing violence to the language chosen by the parties to the instrument to express their intention and define their respective rights and obligations.

But, contends appellant, to hold that the lease may be kept alive by continuous drilling alone, after tlie discovery of some mineral in commercial quantities, would permit tlie lessee arbitrarily or even fraudulently to refrain from or to discontinue production, and thus defeat the manifest purpose of the lease. We have not here an arbitrary or fraudulent failure to perform the implied covenant for reasonable development. That equity would afford ample remedy in such circumstances we have no doubt. The question here, stated most strongly for appellant, is whether a limitation can he read into the lease for failure to produce, either immediately or in a reasonable time after discovery of the existence of a mineral in commercial quantities. Clearly, as already stated, there is no express limitation on that account, and the law should not imply one. Nor is there substantial merit, we think, in the suggestion that the purpose of the lease might be altogether thwarted without such limitation. In the absence of special circumstances not here involved and which are amply taken care of through implied covenants, the inducement to production affects the lessee as strongly as it does the lessor. The continued drilling provided for in the lease as a condition precedent to its continued life entails great expense, which would be altogether lost but for subsequent production. Thus a very cogent deterrent to nonproduction is expressly provided for, which the lessor may well have regarded sufficient to insure against the contingencies pictured by appellant.

We pass to a consideration of the last portion of clause 2 reading, “and if oii or gas or other minerals shall be discovered this lease shall remain in force as long thereafter as lessee continues to produce any one of said minerals.” Appellant contends that this language imports a limitation which terminates the estate upon discovery of a mineral in commercial quantities, unless there is production within a reasonable time. We do not so construe it. -There is nothing in the language. used which would continue the lease merely upon discovery in commercial quantities. It is only actual production that would continue the life of the lease under this provision. A holding that it would terminate for failure to produce must necessarily be based upon an implied covenant to produce after discovery.

Aside from this we think it clear that the provisions for continuing the life of the lease by production are cumulative of the provisions for its continuance by drilling. So long as there is compliance with the express provisions either for drilling or production, there is no termination of the estate.

Our discussion thus far has been under the assumption that the evidence showed or warranted a finding that sulphur in commercial quantities was actually discovered in wells 3, 4, and 5. We are not prepared to hold, however, that the evidence will support a finding of actual discovery in paying quantities. While amply sufficient to support a finding that the evidence of commercial quantities was quite favorable, it is equally clear that there could be no certainty that commercial quantities existed until a plant was constructed and put in operation, and actual mining commenced. The testimony of Keever demonstrates that the development, so far as sulphur was concerned, was still in the exploratory stage, and could not be advanced to the actual discovery in paying quantities stage, until a plant was constructed and mining begun. In other words, before •there could be discovery in paying quantities, there must be production. If we should attempt to apply appellant’s construction of the lease to the facts we would be met with insurmountable difficulties. The first evidence of the existence of sulphur was March 29, 1927, just ninety-two days before the expiration of the five-year period. Keever gives ninety days as the minimum time for constructing a plant, without which there could ibo no production. Can it be reasonably contended that immediately upon this discovery the Production Company was bound, at the risk of forfeiting the lease, to begin the erection of a plant and have it in operation and actually producing sulphur in commercial quantities by June 29, 1927? And suppose the Production Company had taken this view of the lease and had exerted every effort to that end, but due to some unforeseen and unavoidable contingency the ninety-two days remaining had not proved sufficient. Could it then be reasonably asserted that the lease terminated because there was no production at the end of the five-year period, although at that time an oil well was in drilling in full compliance with clause 2? Manifestly these questions must be answered in the negative; for it would be unreasonable to hold the lease terminated while the lessee was engaged in an act which by its express terms continued it in force, and had done or neglected nothing which the lease required or which could reasonably be expected of him under its provisions. . If then the lease is to expire by limitation for failure to produce after discovery, what standards are to be applied to the action or failure to act of the lessee? In the first place, what character of showing must be made regarding the deposit to require the lessor to tbegin the erection of a plant? Must he begin such erection immediately there is a showing sufficiently favorable to warrant a fair inference that the deposit exists in commercial quantities, and, if so, whose judgment is to determine whether the showing meets this test? Or has he some latitude or discretion as to whether further exploratory drilling would be prudent or advisable before incurring such an outlay? If there is a margin for such latitude or discretion, what are its extreme boundaries or limitations, and by what standards or criteria are they to be determined? Similar questions would arise in the preparation for and con- - struction of the plant; and all of these questions are pertinent in the light of the methods employed in mining sulphur as detailed by Keever. It is true that the obligation for reasonable development is implied. But here, as in the Sigler Case, the lessee’s duty as regards development after discovery is not defined' in the lease, and “breach of the lessee’s implied obligation for reasonable mineral operation will not authorize the forfeiture of the lease as for breach of condition subsequent, such obligation being a covenant.”

As was said in Decker v. Kirlicks, 110 Tex. 94, 216 S. W. 385, and quoted with approval in the Sigler Case: “The authority to forfeit a vqsted right or estate should not rest in provisions whose meaning is uncertain and obscure. It should be found only in language which is plain and clear — whose unequivocal character may render its exercise fair and rightful.”

Peculiarly apropos the present discussion is the following language of Chief Justice Stayton, in Benavides v. Hunt, 79 Tex. 392, 15 S. W. 396, 399:

“It is further insisted that the part of the tenth paragraph which obligated appellees ‘to use all economy in the conduct and management of said mining enterprise’ gave another condition, on non-compliance with which appellants .were entitled to terminate the estate.
“We are of opinion that this proposition cannot be sustained; and, if Tor no other reason, Because what would be deemed the ‘use of all economy’ would be too uncertain to recognize as a condition on, which a’ forfeiture might rest.
“It would vary as much as the opinions of witnesses might vary on a matter of fact about which no fixed rule determines compliance or non-compliance. Right to forfeit estates vested cannot exist by reason of the existence or non-existence of a state of facts not clearly defined.”

From the foregoing statement of the material facts it is quite clear that there has been no abandonment that would work a forfeiture of the lease. The record shows continuous exploration up to the very time of production in September, 1927, from which time the lease was kept in force both by production and by drilling.

Appellant’s third contention is thus expressed in its eighth proposition: “The judgment of the trial court, at all events, is erroneous in that said judgment is so broad that it might be construed as denying the existence of the royalty interest admittedly owned by the appellant. The judgment not only denies appellant’s right to a recovery of the sulphur on the theory that the lease from Chase to Weed has terminated but also denies appellant’s right to recover damages represented by additional royalties and this portion of the judgment is so broad that it might be construed as denying appellant’s ownership of a royalty interest. Accordingly, the judgment should at least be modified so that it will not prejudice appellant’s right to royalties on account of the production of sulphur-under the lease involved.”

The petition sought a cancellation of the lease and in the alternative damages for failure to reasonably develop. The alternative prayer for damages was abandoned, and a directed verdict was returned “for the defendants.” The judgment was in effect that plaintiff take nothing against the defendants upon any cause of action asserted in its second amended original petition. No complaint was made of the judgment on this score in the trial court, nor is it made the basis of any assignment of error. But aside from this we think the point is not well taken. The cause of action asserted in the amended petition was predicated solely upon expiration of the lease by limitation or abandonment, and in the alternative damages for failure to reasonably develop. Ownership of the royalties was not involved, except, perhaps, inferentially, under the alternative plea, in this way, if appellant had no interest under the lease, then it could not maintain an action for damages for failure to reasonably develop, and nonownership would have been a defense to that plea. But the case was not tried on that theory, and we do not think the judgment can be construed as affecting any royalty rights appellant may hold under the. Weed lease. However, we can see no objection to modifying the judgment in this, regard at the cost of appellant.

The trial court’s judgment is so modified as to be without prejudice to any royalty interest appellant may hold under the Weed lease, and, as so modified, it is affirmed. All' costs, trial and appellate, are assessed against appellant.

Modified and affirmed.


source: Caselaw Access Project

author: RANDOLPH, J.

license: Public Domain

text:
    CITY OF AMARILLO v. WARE.
    No. 3443.
    Court of Civil Appeals of Texas. Amarillo.
    Sept. 16, 1931.
    Rehearing Denied Sept. 30, 1931.
    Underwood, Johnson, Dooley & Simpson and Vance Huff, all of Amarillo, for appellant.
    Works & Bassett, of Amarillo, for appel-lee.
   RANDOLPH, J.

On September 15,1930, the above case pending on appeal in this court, was certified to the honorable Supreme Court of Texas for their answers to four questions propounded by us to them for our guidance. The questions were referred by the'Supreme Court to the Commission of Appeals for their answers to same, and that court answered three of the questions propounded by us, but declined to answer the fourth categorically “Yes” or “No.” 40 S.W.(2d) 57, 62.

By referring to the published answers, it will be seen that the Commission, while declining to answer question No. 4 categorically, did discuss at some length rules which that court evidently considered as a sufficient reply to said fourth question. Hence, accepting such discussion as an answer to our fourth question, we will proceed to decide the matter of law involved in such question as we interpret their answer to same.

The Commission of Appeals, in discussing the fourth question, said:

“In answer to the fourth question, the record discloses that the plaintiff, having sued for the permanent injury to his land, was entitled to recover as the true measure of his damages claimed the difference in the value of the land immediately before and immediately after the injury. In addition to the damages sustained to his land, he wás entitled to recover as a measure of damages to his then growing crops thereon the difference between the value of the crop just before and just after the damage. This rule has been so well discussed and the authorities bearing thereon , reviewed in the case of Raywood Rice Canal & Milling Co. v. Langford Bros., 32 Tex. Civ. App. 401, 74 S. W. 926, 928, (Writ Ref.), we quote from the opinion as follows:
“ ‘The measure of damages in such a case is stated to be 'the difference between the value of the crop just before and just after the damage. In speaking of the value of the growing crop at the time of the injury, of course was meant its value for the purpose of continuing its cultivation to maturity, for in most, if not all, cases, it would be valueless for any other .purpose. In ascertaining its value, proof must be heard either as to the market price or its intrinsic worth, and it follows that any witness who undertakes to speak intelligently as to its value must base his figures upon a sound estimate of what the crop would probably produce if well cultivated and uninjured, and to deduct from that result the cost of cultivation and marketing.’
@=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
“It is further said: ‘In Ry. Co. v. Pape, 73 Tex. 503, 11 S. W. 526, Justice Gaines, in a case involving damage to a growing crop, after stating the rule in substance as above, and remarking upon the fact that' usually there would be no market for such a thing, uses the following language: “It follows that in such a case some other method must be resorted to for the purposes of ascertaining its value. It seems to us that, as a general rule, the most satisfactory means of arriving at the value of growing crops is to prove its probable yield under proper cultivation, the value of such yield when matured and ready for sale, and also the expense of such cultivation, as well as the cost of its preparation and transmission to market. The difference between the value of the probable crop in the market, and the expense of maturing, preparing, and piac- ■ ing it there, will in most cases give the value of the growing crop with as much certainty as can be attained by any other method.” It is apparent from the language quoted that our Supreme Court has taken into consideration and adopted the methods which the ordinary witness as to value will naturally and logically employ in speaking to the value of a growing crop, and thus the court is indirectly influenced and controlled in such an inquiry by the estimated yield. The following Texas cases hav.e followed the rule as stated: Ry. Co. v. Borsky, 2 Tex. Civ. App. 545, 21 S. W. 1011; Ry. Co. v. Simonton, 2 Tex. Civ. App. 558, 22 S. W. 285; Ry. Co. v. McGowan, 73 Tex. 355, 11 S. W. 336; Ry. Co. v. Pape, 73 Tex. 501, 11 S. W. 526; Ry. Co. v. Joachimi, 58 Tex. 456.’ See Ry. Co. v. Schofield [72 Tex. 496, 10 S. W. 575], supra; F. W. & N. O. Ry. Co. v. Wallace, 74 Tex. 581, 12 S. W. 227.”

We therefore hold that, as the judgment of the trial court only permitted a recovery of crop damage for the year 1928, the crop destroyed at the time the permanent injury was inflicted on the land, the trial court properly admitted the evidence of the value of that crop destroyed.

There was no objection made to the excess of the judgment rendered by the trial court in such a way as to properly present that question for our review, and hence we do not consider same.

We therefore affirm the judgment Qf the trial court.

On Motion for Rehearing.

This case was originally submitted and argued on September 10, 1930. After the submission and argument, this court certified four questions to the Supreme Court for answer. Three of the questions were answered, but the court refused to answer the fourth question categorically “Yes” or “No.” On the return of the certificate with the answers of the Commission of Appeals, it occurred to the writer of this opinion that this court would like to hear argument upon the discussion of the Commission of Appeals of the fourth question submitted to the Supreme Court. For that reason on August 23, 1931, we set the case down for resubmission on September 9, 1931. In order that there might be no misunderstanding of the purpose of the' hearing and that notice might duly be given to opposing counsel so that they might be present, the court called attention of the clerk to the order made by us and directed him to call each of the opposing firms over the phone and notify them of the setting with the request for reargument.. In the presence of the writer, the clerk called the office of each of these firms and informed them on’ that day, August 23, 1931, that the case was set for submission and reargument on September 9,. 1931.

In addition to this, the clerk of this court issued and mailed to each of the opposing firms the customary written notice of the order setting' the case for resubmission and re-argument on September 9, 1931.

Mr. Bassett, of the firm of Works & Bassett, appeared at our request and presented a brief argument, and informed the court that the attorney for appellant had informed him the evening before that he could not appear in court because he was then leaving for the city of Lubbock.

This court has a rule never to permit oral arguments on motions for rehearing and not to permit arguments at all in such cases except upon the original submission. As stated, the original submission of this case was on September 10, 1930, when counsel for both parties were present and argued the case fully before this court. The request for re-argument was an invitation from this court to assist in enlightening the court upon one phase of the answers to our questions, and was not only for the benefit of this court, but for the benefit and as a courtesy to both counsel in the case.

We have before us a motion by one of the junior members of the firm representing the appellant, in which he requests this court to grant the plaintiff permission to present oral argument when this motion for rehearing is submitted in this court. This we have declined to do, and have overruled his motion, for the reason that we have devoted more time to this case than the questions involved required and that each of these counsel have had an abundant time in which “to have their day in court” and no injury has been done by us to said counsel in refusing to permit further oral argument.

The appellant calls our attention to the fact that neither this court nor the Commission of Appeals has passed upon the assignment of error in which error is claimed on the part of the trial court in failing to sustain defendant’s exception to plaintiff’s petition because said petition shows that the plaintiff had conveyed his title to the land damaged and is restricted to a recovery of those items of damage for loss of crop; the petition failing to show that he received a less sum than he would have received but for the construction of the storm sewer. We concede that we overlooked this assignment. Also, as we did not include this question in our certificate to the Supreme Court, same was not decided by the Commission of Appeals.

The plaintiff pleads his cause of action at great length, pleads his ownership of the land upon which’ he claims the permanent damage was inflicted, and alleges: “That after the accrual of all of said damages and the permanent depreciation of his property, as shown above, plaintiff on or about the 10th day of November, 1929, traded and disposed of said above described land in its then condition, but without many wise conveying or disposing of Ms said cause of action on account of the damages hereinbefore shown, said land having been so injured and depreciated in value before his said conveyance thereof and he being entitled to recover said full damages claimed on account of said injuries and their permanent nature, all of which accrued prior to said conveyance and which conveyance was only of said depreciated value.”

Supporting this pleading, we quote evidence from the testimony of plaintiff, Ware, as follows:

“I traded and disposed of my land in November of last year, and the deed that I gave recites that I received $13,500 for it. I traded .the land. As to why I recited the consideration in the deed of $13,500 when I didn’t consider I was getting $13,500, there has got to be something stipulated in a deed, and it was Mr. Henson’s suggestion. It didn’t make any difference what the valuation was if we could agree on a trade; that was immaterial, only to satisfy him and to go on record. That is what it was put in for.
“I was not advised that if I recited a consideration above what I was actually getting that it would add to my income tax, for that is not bothering me at all. Nobody advised me about my excess profit tax. I didn’t take that into consideration, and didn’t even think about it; I just wrote the $13,500 consideration in the deed. In a way, both of us suggested that figure of $13,500. As to what I actually got, I don’t know whether I got anything or not; I got a deed, and, of course, I think I got something or I wouldn’t have traded, naturally. I got a piece of land in the trade, 986 acres in Donley County, Texas. I assumed a debt of $11,250 against the Don-ley County land. I just merely traded my place for his equity in thd 986 acres. ⅛ * *
“I did not pay a commission on a valuation of $15,000. I paid a commission on a valuation of $13,500; in other words, I paid a 2½% commission on a valuation of $13,500. As to my swearing here that I was only getting $5,-000 or $6,000, you can take that any way you want it. I did not testify to Judge Works on my direct examination that I considered I was only getting for my place $5,000 or $6,-000. As to what I say was the real value that I did get for my place, that has got to be determined later, because I don’t really know. As I sit here now, I don’t estimate the actual value of my place. I don’t know whether one dollar or one million dollars. I could very easily lose the place I got, of course, I could have lost this place out here, and I had a pretty good chance to. I mean, that I could lose this down here if I didn’t pay the debts I assumed against it. As to what I considered his equity in his place down there, the place figured $24,650, and there was $S,150 Federal Loan against it. I took it in at $24,650, and I figured that his equity in it was about $16,-000; then, I owe him, personally, $3,200. I mean by that, that I gave notes back against it — I gave him vendor’s lien notes back against it for $3,200. That makes $11,000, and $11,500 from the $24,650 leaves $13,500. That is where I get the $13,500 consideration for the place. In other words, I thought that I was getting his equity worth $13,500 for my place, whether it was so or not, and that is where I get the $13,500 I recited in my deed.
“I don’t know that his equity in his place was worth to me $13,500, but I thought so; but I don’t know it. I did think so, unless I lose the place by letting it foreclose, unless I let the debt I assumed be foreclosed, but that is to be determined later. In a way, I got everything I expected to get unless I let it be taken away from me for non-payment of the debt I assumed; but the place may not determine what I expected it to b.e. I thought naturally from looking at it that the equity was worth $13,500, or I wouldn’t have traded for it. If I didn’t believe and think that I had an equity, after my investigation, to be worth $13,500 I wouldn’t have traded for it; I had to take it in at something.
“If my place has been damaged $10,000, and it was originally worth $16,000 as I have stated, I knew when I traded with Henson that $10,000 of that value on my place was gone. I didn’t tell him about those floods, and what damage had been done to me, simply because he didn’t ask me, and I didn’t volunteer to tell him. I just naturally kept that information to myself. In other words, I got $13,500 for what I considered was worth $6,-000. That is, in a trade. Naturally, I wanted to make as good a trade as I could.
“As to whether I want to change my testimony on that part now from the way I gave it yesterday — I didn’t tell you I considered that the cash valuation; and I am not changing my testimony now. If I told you in that way, you understood it that way; it wasn’t my intention. I want to change the meaning of my testimony from the way I gave it yesterday and the way you expressed it. I am wanting to change the meaning of what 1 meant. I might want to change the meaning of some of the words I used yesterday. 1 want to change the meaning of the words 1 used yesterday simply because I didn’t put it in the words the way I recollected it. I don’t understand lots of these big words that you fellows use: The word, ‘equity’ is plain enough and I understand what is meant by that. I told you how I arrived at the $13,500.-00 recited in my deed yesterday. As to my saying that I figured this man’s land at $25.-00 an acre — that is what he was holding it at in a trade, and it came to about $24,500. And I said that he had an $8,000 Federal Loan against it and that I gave him note that in addition to assuming his Federal Loan, so as to come to where his equity was $13,500.00 and that is what I wrote in my deed; that is what the deed shows. I don’t know that I am getting $13,500.00 equity in his land. 1 don’t think that I swore to you yesterday repeatedly that, Tf I had not thought I was getting $13,500 for my place, represented by his equity in that land, I would not have traded.’ I didn’t say anything like that. If I did use that language it was not true for I didn’t think it was worth it then, and I don’t think it is worth it now. If I used that language, I didn’t mean it that way. You must remember that I was on the stand over four hours yesterday and was drilled very hard; I am an ordinary person and you can get me crossed on some of my words.
“My story is now, to make a long story short, that I puffed up the value of my place $13,500 so as to keep from giving him so much difference between the Federal Loan and mine; in other words, I figured that he had puffed the value of his place, and I puffed the value of mine to correspond with his value, because I thought he was exaggerating the value of his, and I still do. I am not still exaggerating the value of my land. I didn’t just say that; I said I thought he was; I wanted to make it as big as I could. * * *
“The Donley County land was estimated at $25.00 per acre. It is hard to determine what the actual or real value of the equity I got in the Donley County land for my property, which was clear, was, since I have investigated it, I can’t say I can estimate that, not the real valuation. * * ⅜
“When I was asked on cross-examination in regard to this land out here in the way I figured it, when I was asked about putting the land in at $13,500 and how came it to be figured that way and I answered ‘In a way,’ I meant to cut down as much between that and the Federal Loan as possible; in other words, I meant to get as big a trade out of him as I could.” 1

Witness J. B; Martin testified that the land traded to Ware in exchange for the sixteen acres owned by him was of &e market value of $17.50 per acre. The witness Henson testified that the reasonable value of the sixteen-acre tract traded by Ware for the Donley county land in August, 1929, was $7,500. This was before the trade by Ware but after the damage was inflicted.

It is clear that Ware was not bound by the recitals in the deed as to the value of his sixteen acres, and he makes it clear that he was not intending to place that estimate as his consideration of its real value.

The trial judge’s findings necessary to warrant the judgment rendered by him cannot be set aside by us, because there is evidence to support it.

We quote from the folio-wing decisions cited by the appellee;

“Upon an appeal or writ of error every reasonable presumption will be indulged in favor of the findings of the trial court, even where no findings of fact and conclusions were filed by the. Court, or requested by either party. Moreover, any doubts as to the facts raised by the evidence, and any view of the law which the Coui-t could have applied under the pleadings and evidence, will be resolved in support of the judgment.” 5 Tex. Jur. § 747.
“The objections would be worth nothing if there had been a jury, and certainly they cannot be entertained where the cause was tried by the judge, and the presumption prevails that he gave weight to legal testimony alone, of which there was amply sufficient, in rendering his judgment.” Barreda v. Milmo Nat. Bank (Tex. Civ. App.) 241 S. W. 743, 746; Hogg v. Sinclair Oil & Gas Co. (Tex. Civ. App.) 38 S.W.(2d) 886.

We are of the opinion that there is no reversible error in the proceedings in the district court as presented to us, and therefore overrule appellant’s motion for rehearing, and affirm the judgment of the trial court.


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

text:
    STATE v. EPPERSON et al.
    Motion No. 9859.
    Commission of Appeals of Texas, Section B.

      Oct. 5, 1931.
    James V. Allred, Atty. Gen., and E. O. Mc-Kinse'y and Scott Gaines, Asst. Attys. Gen.,, for the State.
   LEDDY, J.

On December 31, 1928, Hidalgo county entered into a contract with J. C. Epperson, aru attorney, for the collection of delinquent state- and county taxes, by the terms of which Ep-person was to receive 15 per cent, of all such; taxes that might be collected as a direct re--sult of his services.

On April 1, 1929, said county made a contract with an abstract company to furnish; such abstracts to Epperson as would enable-him to bring proper suits for the collections of delinquent taxes, agreeing to pay the company for such services 10 per cent, of the-taxes collected as the result of such suits.

The parties operated under these contract» without any controversy arising up to October 17,1929. At that time there had been collected a total of $282,687.64 in delinquent, taxes, of which $108,763.57 was collected as-the result of the services rendered by Epper-son and the abstract company. Of the latter-sum Epperson was paid 15 per cent, and the-abstract company 10 per cent.; neither party claiming any part of the $173,924.07, which; it seems was collected independently of the-efforts of these parties.

On September 9, 1929, Epperson filed with; the commissioners’ court of Hidalgo county at written proposal setting forth that it would! be advantageous to all parties concerned if the contracts between him and the county and the county and the abstract company be canceled and a new contract made by which he would perform all the duties provided under both contracts; it being stated in his proposal that he would perform all the services specified in both contracts and in addition thereto certain other services in preparing a plat book system for the county without any additional remuneration other than that provided in the previous contracts.

It is made to appear that the commissioners’ court accepted this proposal, canceled both of the old contracts, and entered into a new contract with Epperson under date October 17, 1929. The order of the commissioners’ court and the new contract were prepared by Epperson and adopted by the commissioners’ court

It is further shown that since October 17, 1929, there has been collected in delinquent taxes as a direct result of Epperson’s services the sum of $18,285.38, and that Epperson has been paid a total of approximately $19,464.83. It is also shown that Hidalgo county during said time has collected the sum of $536,322.62 in delinquent state and county taxes which was not the result directly or indirectly of any services performed by Epperson.

On March 5, 1930, D. 0. Earnest and five other taxpayers of Hidalgo county filed in the Ninety-Third district court of Hidalgo county cause No. 7732, styled Earnest et al. v. Cameron, on the docket of said court, in which the plaintiffs sought to have the contract of date October 17,1929, canceled and to recover from Epperson money previously paid him thereunder. The grounds upon which cancellation of the contract was sought were:

(a) The commissioners’ court was without power to make such contract;
(b) Same was procured by fraud and collusion;
(c) That the compensation provided in said contract was so excessive as to be a legal fraud.

In this suit the state of Texas, through its proper officer, intervened, and, joined in the prayer for the relief asked by the taxpayers.

On April 23, 1930, the district court of Hidalgo county rendered its final judgment in said cause* canceling the contract of date October 17, 1929, enjoining its further recognition or performance, and in favor of the state and county for the moneys previously paid Epperson thereunder.

An appeal from the judgment rendered by the district court of Hidalgo county was duly perfected to the Court of Civil Appeals for the Fourth Supreme Judicial District. On August 15, 1930, before action had been taken by said Court of Civil Appeals in said cause, Epperson and the commissioners’ court of Hidalgo county entered into a contract in which it was recited that it was believed the judgment of the district court in said cause would be reversed, and it was agreed in the new contract that the time for the performance of the contract between Epperson and the county should be extended for a period to be calculated as provided in said contract, which Epperson claims is until April 22,1932; the evident purpose of the new contract being to give Epperson, in the event of the reversal of said cause, the benefit of the' time for performance which was interrupted by the judgment of the district court.

On January 21, 1931, the Honorable Court of Civil Appeals reversed the judgment of the district court and rendered judgment in favor of Epperson and overruled appellees’ motion for rehearing. 34 S.W.(2d) 685. The mandate of the Court of Civil Appeals was filed in the district court of Hidalgo county on July 31, 1931.

In the opinion rendered by the Court of Civil Appeals it was held:

(1) That the contract of date October 17, 1930, between Epperson and Hidalgo county was within the power and validly made by the commissioners’ court.
(2) That same was not made as a result of fraud or collusion.
(3) That the compensation provided therein was not so excessive as to constitute a legal fraud.
(4) That the contract was in all things valid and that moneys previously paid Ep-person could not be recovered.

On February 5, 1931, Epperson filed in the district court of Hidalgo county his petition for. mandamus against H. Tarpley, tax collector of said county. By amended petition the coiinty judge and all members of the commissioners’ court were made respondents. Jin this proceeding Epperson claimed that under his contract of October 17, 1930, the tax collector of said county held some $93,000 in commissions due him for his services under said contract. He alleged that under the terms of the contract he was entitled to 25' per cent, of- all delinquent taxes collected by said county whether the same were collected as the direct result of suits filed by him or otherwise, and that the respondent collector then had in his hands the sum of $93,000, which belonged to him as his commissions for services rendered under said contract.

On September 5, 1931, and before any trial had been had of the above-mentioned suit in Hidalgo county, the state of Texas, through its Attorney General, filed its petition in the Fifty-Third district court of Travis county against Epperson, H. Tarpley, tax collector of Hidalgo county, and George H. Sheppard, comptroller of public accounts of the state of Texas. In this suit the state sSeks to enjoin the comptroller from approving the contract of date August 15, 1930, and to require Tar-pley as tax collector to pay over to the state treasurer the state’s portion of the delinquent taxes collected. In so far as Epperson was concerned tlie state claimed in its petition that he had not performed the services required under said contract; that said contract had been duly terminated by the commission•ers’ courtand that in any event Epperson was not entitled to any percentage of delinquent state taxes collected except those collected as the direct result of. services rendered by him; and in the alternative it was alleged that if the contract relied on by Epperson be in fact susceptible of a different construction, it was the result of a mutual mistake of the parties thereto, it being their intention that Epperson was to receive as compensation for his services under said contract 25 per cent, of the delinquent taxes collected as the direct result of suits instituted by him, and there was a prayer for reformation of the contract so as to carry out the true intention of the parties.

Upon the filing of the petition in the above-mentioned ease, temporary injunction was issued by the district court of the Eifty-Third judicial district of Travis county, enjoining Epperson from further prosecuting his mandamus suit No. 8377 pending in the district court of Hidalgo county until the final determination of said suit in the district court of Travis county. Also temporary injunctions were issued and served against the state comptroller enjoining him from approving the contract of date August 15, 1930, between Hidalgo county and Epperson from collection of delinquent taxes, and also enjoining H. Tarpley as tax collector of Hidalgo county from paying over to Epperson any of the funds in controversy during the pendency of said suit.

On September 17,1931, Epperson filed in the Court of Civil Appeals for the .Fourth Supreme Judicial District his petition in an original proceeding in said court, No. 10752 on the docket of the court, styled J. C. Epper-son, Relator, v. State of Texas et al., Respondents, and upon the filing of said proceeding said court thereon granted writs of injunction and prohibition enjoining the officers of the state from proceeding in cause No. 50338 in the district court of Travis county, and in effect attempting to vacate the injunction orders issued by the judge of the Fifty-Third judicial district court of Travis county, above referred to; all parties being commanded by said Court of Civil Appeals to appear before said court on September 30, 1931, and show cause why such writs should not be made permanent. By subsequent order this hearing was postponed to October 7, 1931.

The state of Texas, through its Attorney General, has filed in the Supreme Court a motion for leave to file a petition for mandamus, the purpose of which is to compel the Fifty-Third district court of Travis county to proceed with the trial of cause No. 50338 instituted by the Attorney General in behalf of the state of Texas, and asking for the issuance of such writs of prohibition, injunction, etc., against the Honorable Court of Civil Appeals as may be necessary to cause them to vacate all orders which may tend to interfere with the trial of said cause by the district court of Travis county, and also seeking to enjoin Epperson from prosecuting his said suit in Hidalgo .county until the final determination of the state’s suit in Travis county.

It is apparent that the identical subject-matter of the suit brought by Epperson in the district court of Hidalgo county is involved in the suit which the state is now seeking to prosecute in the district court of Travis county. Before Epperson can recover the amount claimed in his suit in Hidalgo county, it devolves upon him to establish that he is entitled to the amount of commissions claimed by reason of the performance of certain services in accordance with the terms of his contract with the commissioners’ court of that county. The state’s suit in Travis county is based upon a denial of the existence of the propositions affirmatively asserted by Epperson. It contends that Epperson did not perform the services required under the terms, of his contract with Hidalgo county, and that such contract provided for a different amount of commissions from that claimed by Epperson.

The law in this state is thoroughly settled that, when a court of competent jurisdiction acquires jurisdiction of the subject-matter of a suit, its authority to determine all the questions involved therein continues, subject only to the appellate authority, until the matter is finally disposed of; and no court of co-ordinate jurisdiction can lawfully interfere with its action. Cleveland v. Ward, 116 Tex. 1, 285 S. W. 1063; Barrier v. Lowery et al., 118 Tex. 227, 11 S.W.(2d) 298,13 S.W.(2d) 688.

If the district court of Hidalgo county acquired jurisdiction to render a valid judgment in Epperson’s suit for mandamus to compel the payment to him by the tax collector of the county of funds alleged to be wrongfully withheld by said official, then such jurisdiction is exclusive and its right to finally determine the matters involved free from interference of any court of co-ordinate jurisdiction must be protected.

It is contended by the state th^t the district court of Hidalgo county did not acquire jurisdiction in Epperson’s suit in that county to render a valid judgment against the tax collector of said county, which would be binding upon the state, for the reason that the funds sought to be recovered therein belong to the state and it is not and cannot, without its consent, be made a party to such proceeding.

We are unwilling to agree to the correctness of the legal proposition thus asserted by the state. The state of Texas, through the enactment of a valid statute (Rev. St. 1925, art. 7335), has authorized the commissioners’ court of any county to make contracts for services in collecting delinquent taxes for a percentage of the taxes so collected. Cherokee County et al. v. Odom, 118 Tex. 288, 15 S.W. (2d) 538; Commissioners’ Court et al. v. Wallace et al., 118 Tex. 279, 15 S.W.(2d) 535.

By legislative act the state has constituted the tax collector of the county its agent to receive delinquent taxes collected under such contract, and it is the duty of such officer to pay all fees and commissions lawfully incurred in the collection thereof to the various parties who may be entitled thereto. Under such circumstances, the tax collector’s duty with reference to money belonging to persons who are entitled under valid contracts to receive the same from him is purely ministerial. If he withholds the payment of such funds when a person is lawfully entitled to receive same, he has failed to discharge a duty imposed upon him by law and his act is a wrongful one.

The district court of Hidalgo county is clothed with full authority to compel the tax collector of that county to discharge a ministerial duty imposed upon.him by law, and therefore it may lawfully determine whether the money claimed to belong to Epperson for services rendered under his contract is being wrongfuly withheld by such tax collector.

It is true that the district court of Hidalgo county does not possess jurisdiction to enforce the specific performance of the contract relied upon by Epperson or to award damages for any breach of said contract unless the state is a party to the proceeding. Herring v. Houston National Exchange Bank (Tex. Civ. App.) 241 S. W. 524. But Epperson’s suit is not one to enforce specific performance of his contract or to recover damages for the breach thereof. It is simply an action to compel an officer, as agent of the state, to pay over funds to a-party who claims to be lawfully entitled thereto. If the tax collector of Hidalgo county is in truth and in fact wrongfully withholding funds, as an officer and agent of the state, claiming no interest therein, but holding only for the state, an action to compel him to pay the same to a party entitled thereto is not one against the state which can only be brought with the consent of the state. United States v. Lee, 106 U. S. 197, 1 S. Ct. 240, 27 L. Ed. 171; Stanley v. Schwalby, 85 Tex. 349, 19 S. W. 264; Conley v. Daughters of the Republic, 106 Tex. 80, 156 S. W. 197, 157 S. W. 937; Imperial Sugar Co. v. Cabell (Tex. Civ. App.) 179 S. W. S3; Whatley v. Patten, 10 Tex. Civ. App. 77, 31 S. W. 60.

The ease of Imperial Sugar Company v. Cabell, above cited, involved an action by the original vendor against the board of penitentiary commissioners of the state of Texas to recover the title to certain lands which he had conveyed to said commissioners. It appears that at the time of the purchase of the land such commissioners executed vendor lien notes and that default was made in the payment of such notes at their maturity. The defense was sought to be made that inasmuch as the prison commissioners held this land for the state of Texas no recovery could be had in a proceeding wherein the state tvas not a party. This contention was denied, and it was declared to be a settled principle of law that an action against an officer or agent of the state for property alleged to be wrongfully withheld by him is not an action against the state, even though said officer claims to hold such property for and on behalf of the state.

If Epperson’s contention in the suit filed by him in Hidalgo county is true, that is, that he has performed certain services under a valid contract with the commissioners’ court, and that under the provisions of such contract he has earned certain commissions which lawfully belong to him, then it logically follows that the tax collector, as an agent of the state, is wrongfully withholding possession of property which it is his legal duty under the statutes of this state to deliver to Epperson. Our courts are clothed with full authority to compel an officer to perform this character of duty without the necessity of the state’s being a party to the proceeding.

An analogous principle is involved in that line of cases wherein taxpayers are permitted to enjoin an unlawful act of a tax collector in seeking to subject a citizen’s property to a tax lien. In such cases it is uniformly held that even though the case involves taxes due the state, the taxpayer is entitled to injunctive relief if the agent which the state has delegated to collect such taxes is wrongfully attempting to subject a citizen’s property to a tax lien.

If Epperson upon trial should obtain judgment in the suit filed by him for the amount of commissions under his contract with the commissioners’ court of Hidalgo county, which he claims to be wrongfully withheld by the tax collector, and that judgment should become final, certainly it could be pleaded as res adjudicata in an action subsequently brought by the state to recover such funds.

It therefore clearly, appears that the district court of Hidalgo county, at the time of the filing of the state’s suit in Travis county, had already acquired jurisdiction over the subject-matter there asserted; hence the former court is entitled to proceed without the interference of any other court of co-ordinate jurisdiction to finally determine Epperson’s right to recover the amount claimed.

It is within the province of the Court of Civil Appeals to inquire into and determine whether the action of the state in the Travis county suit in enjoining Epperson from proceeding in the Hidalgo suit in any way conflicts with the holding of that court in Epper-son’s original suit. If, however, that court on a hearing should vacate the orders of the district court of Travis county enjoining Epper-son from prosecuting his suit in Hidalgo county, the state of Texas would not be deprived of any right, as the orders of the district court of Travis county enjoining Epperson from prosecuting such suit and the tax collector from paying out the funds in his hands are void. Cleveland v. Ward, supra.

Nothing which has been said in this opinion should be construed as operating to deny the state the right through its proper official to intervene in the Hidalgo county suit for the purpose of urging any defenses which it may desire to present to the cause of. action asserted by Epperson.

We recommend that the motion for leave to file petition for mandamus be denied.

CURETON, C. J.

The opinion of the Commission of Appeals is adopted, and the motion for leave to file is overruled.


author: RYAN, J. CURETON, C. J.

text:
    SOUTHWEST SECURITY CO. v. JACQUES et al.
    No. 1319-5830.
    Commission of Appeals of Texas, Section B.
    Oct. 14, 1931.
    R. G. Hughes, of San Angelo, for plaintiff in error.
    Upton & Upton, of San Angelo, for defendants in error.
   RYAN, J.

Plaintiff in error brought this suit to recover on a promissory note for $400 dated July 20, 1928, with 10 per cent, per annum interest and 15 per cent, attorney’s fee, made by Joe Jacques to J. W. Newsom, and to foreclose a chattel mortgage lien on an automobile securing it. Jacques made default, and a personal judgment was rendered against him for the amount of the note, with interest and attorney’s fee, but foreclosure of lien was denied under the plea of intervention and proof thereunder, of Howard Graham, that he was the owner of said automobile and acquired it in good faith, for Value, without notice of any claim of the plaintiff company or' of defendant Jacques.

The Court of Civil Appeals affirmed that judgment. 31 S.W.(2d) 1098.

The trial court found as facts: In July, 1928, J. W. Newsom was engaged in the business of buying and selling secondhand cars, and the automobile above described was a secondhand automobile; Joe Jacques was employed by the said J. W. Newsom as an “Auto Laundry” at a car exchange in the city of San Angelo; on the 23d day of July, 1928, D. J. Hostetter Company, as agent for Mrs. I. Y. Jordan, sold and conveyed the above-described automobile to J. W. Newsom, which transfer and assignment was filed with the tax collector of Tom Green county, and the automobile delivered to J. W. Newsom; on the 28th, 29th, and 30th of August, 1928, J. W. Newsom had this car on a vacant lot, where he conducted the business of buying and selling automobiles, together with a number of other cars for sale, and on the 30th day of August, 1928, J. W. Newsom, for a valuable consideration, sold and transferred this car to W. C. Pratt, which transfer was registered with the county tax collector, as made and provided by law; thereafter the said W. C. Pratt sold and conveyed said automobile to Howard Graham, which was evidenced by a bill of sale and transfer duly registered with the county tax collector of Tom Green county, Tex.; the records, by regular transfers, show the ownership of this car to be in Howard Graham; neither W. C. Pratt, nor Howard Graham had any actual or constructive notice of the mortgage executed by Joe Jacques; no bill of sale was executed or delivered from J. W. Newsom to Joe Jacques; there was no testimony that Joe Jacques ever had possession of this automobile, or that J oe Jacques ever owned, claimed, or asserted any right, title, or interest in and to said property.

The trial court further found that W. C. Pratt made inquiry of J. W. Newsom as to whether there was any mortgage against said car, and was informed that there was not. He also telephoned Hostetter as to liens on said car and was informed that it was transferred to Newsom, clear. He examined the records and found no mortgage given by Newsom, and did not find the mortgage from Jacques to Newsom above referred to; that, on July 20, 1928, Joe Jacques executed a note payable to the order of J. W. Newsom for the sum of ¡¡5400. payable at the office of Southwest Security Company, San Antonio, Tex., and payable in monthly installments of $50 each; on the same day Jacques executed a chattel mortgage on the car in question, which mortgage, together with an assignment in favor of Southwest Security Company, was filed for record in the county clerk’s office' on the 20th day of July, 1928, at 9:10 a. m. The note above described was indorsed on the back by J. W. Newsom, payable to the order of Southwest Security Company. On the 23d day of July, 1928, Southwest Security Company gave a check for the sum of $348, which was paid on July 24, to J. W. Newsom in payment for said note; at the time that the Southwest Security Company delivered such check, it demanded of J. W. Newsom a bill of sale to him. transferring said car, but did not demand a bill of sale or transfer from J. W. Newsom to Joe Jacques.

The trial court concluded from the above and foregoing facts that, when W. 0. Pratt purchased said automobile from J. W. New-som, he took the same free from the mortgage held by Southwest Security Company. He also concluded, as a matter of law, that the mortgage introduced by plaintiff Southwest Security Company is insufficient to show ownership of said automobile in Joe Jacques, and that plaintiff is not entitled to a foreclosure of its mortgage, and that W. C. Pratt and Howard Graham are innocent purchasers for value without notice of plaintiff’s mortgage.

Those findings were not excepted to, and no attack is made upon them by any assignment of error.

We think disposition of this case is ruled by the doctrine of Rhea Mortgage Co. v. Lemmerman (Tex. Com. App.) 10 S.W.(2d) 690, 691, the facts being almost identical in both cases.

Paraphrasing the language of Judge Led-dy, who delivered the opinion in that case— there is no evidence ip the record, aside from the mortgage showing that Jacques was the owner of the car at the time he executed the mortgage under which plaintiff in error claims; the car was never licensed in the name of Jacques on the records of the county; the car was kept as part of Newsom’s stock, daily exposed for sale, and was never in the individual possession of Jacques.

As said by Judge Leddy in that case: "The overwhelming weight of authority establishes the rule that a mortgage on personal property made by one who is not the owner thereof, although placed of record, is not constructivo notice to any one dealing with the owner of the property.”

Here, as in that ease, there is no evidence in the record, aside from the mortgage, showing that the mortgagor was the owner of the car at the time he executed the mortgage; he held no bill of sale to 'himself, the car was never licensed in his name on the records of the county, and possession remained in Newsom, who conveyed to Pratt and Pratt to Graham.

It is claimed that the opinion of the Court of Civil Appeals conflicts with that of the Commission of Appeals, in Hennessy v. Automobile Owners’ Ins. Ass’n, 282 S. W. 791, 46 A. L. R. 521. We think not.

In that case, there was an actual sale to Hennessy with surrender of possession to him, though no bill of sale was delivered; Hennessy sold to Ohisholm and surrendered possession to the latter, but gave no bill of sale. Hennessy retained a mortgage on the automobile in question to secure payment of the notes executed to him by Ohisholm in payment for same. After the sale to Chisholm, the Automobile Owners’ Insurance Association issued its insurance policy against fire and theft, payable to Hennessy, mortgagee, as his interest might appear. After the issuance of the policy, and while same was in full force and effect, the car was stolen and destroyed by fire. The association refused to make payment under the policy on the ground that neither Hennessy nor Chisholm had a bill of sale to the destroyed car, and therefore that they acquired no title thereto. Judge Bishop simply held that such a sale, without a bill of sale being given, is not void, and that Hennessy had an insurable interest in the property insured, recoverable under the insurance policy issued to him. The facts in the two cases are entirely different in our opinion.

Believing that a correct conclusion was reached by the trial court and the Court of Civil Appeals, we recommend that their judgments be affirmed.

CURETON, C. J.

Judgments of the district court and Court of Civil Appeals are both affirmed, as recommended .by .the Commission of Appeals.


text:
    STEWART et al. v. BYRNE.
    No. 1313-5818.
    Commission of Appeals of Texas, Section B.
    Oct. 14, 1931.
    Wm. H. Wilson, of Houston, and Butler, Price & Maynor and Marsh & Mcllwaine, all of Tyler, for plaintiffs in error.
    Stewart & De Lange, of Houston, and Thomas, Storey & Grady, of Dallas, for defendant in error.
   RYAN, J.

H. E. Byrne, plaintiff below, on December 9, 1927, brought this proceeding in the district court of Harris County to set aside a judgment rendered against him on July 18, 1927, in favor of Carter Stewart for $14,731.-62, on the grounds that neither he nor his attorneys of record received any notice of the setting of the case for trial, that neither he nor his attorneys had any knowledge of the rendition of the judgment until it was too late to file motion for new trial (the time for which had expired), but, as soon as he received information that said judgment had been rendered, he filed this action to set it aside, and that he had a meritorious defense, in that in an amended answer filed on May 13,1926, he pleaded an adjudication and final discharge in bankruptcy, and that Stewart’s claim was provable against him, and was rendered nonenforeeable against him by reason of such discharge.

Pending this suit, W. L. Shirey was made a defendant; the judgment having been assigned to him by Stewart.

The answer, among other things, consisted of a general denial and special plea that Byrne had notice prior to July 18, 1927, that the court had set the cause for trial on that day and neither he nor1 his attorneys attended the trial, that he did not file a motion for new trial during the term, and he neither appealed from the judgment nor sued out a writ of error to have the judgment corrected.

The trial court submitted to a jury only one issue, viz.: “Did H. E. Byrne have knowledge or information in any way before July 18, 1927, that the case of Stewart v. Houston Finance Corporation, No. 103369, in the District Court of Harris County, had been set for trial on July 18, 1927?” to which the jury answered, “Yes,” and on such verdict rendered judgment that plaintiff Byrne take nothing against the defendants Carter Stewart and W. L. Shirey, and that they recover of liim all costs of suit, for which execution may issue.

The honorable Court of Civil Appeals at Galveston reversed the judgment below and rendered judgment in favor of Byrne, canceling, in so far as he is affected, the former judgment recovered by Stewart against him. 30 S.W.(2d) 305.

It appears that the district courts of Harris county have a rule regarding the setting of cases for trial, as follows: “No written request will be required to secure a setting for a non-jury ease, but a setting will be made either by agreement of both parties to try said cause on a day pertain, or if the party desiring to try said cause is unable to secure such agreement, then on application with notice to opposing party it will be set arbitrarily by the presiding judge on a date sufficiently distant to allow opposing party to prepare said cause for trial,” and it is contended that, when this case was set for trial, Byrne or his attorney should have been notified thereof, long enough in advance to allow him to prepare the case for trial, and that a mere long-distance telephone advice from a litigant on the same side with himself of its being set for trial less than four days in advance, one of which was Sunday, did not in any sense comply with the explicit notice thus plainly contemplated; there being at the same time no pretense of an existing agreement between the parties to try.

Mr. Roberts, one of Bryne’s codefendants, testified that in. a long-distance telephone conversation he had with the latter, on Thursday before the case was called for trial on the following Monday, he told Mr. Byrne “that the case of Carter Stewart v. Houston Finance Corporation was set down for trial in Houston on the 18th day of July, 1927. That was on Thursday before the case was actually tried.”

Roberts testified also: “My purpose.in calling Mr. Byrne was to get him to come down here and testify in that case, and after, talking with him at some length he said that he didn’t have any more interest in it, that he had been relieved of it by bankruptcy, and he wasn’t coming,” and, “The reason I waited until three days before the trial to ask Mr. Byrne to come to Houston was because I thought he would come; I thought he would be interested enough in his own welfare in the case to come. He then told me he wouldn’t come,” and “that was on Thursday, I think the 14th of July, 1927, four days prior to the time the case was set for trial. I am positive about it for the simple reason that I remember it so well I can’t be mistaken; I don’t think I can. I can be but I don’t think I can.”

Dr. Andrews, who was interested in the Tyler Commercial College, which was a party to the litigation resulting in the judgment rendered in the case of Carter Stewart v. Houston Finance Corporation et al., testified: “I had a conversation with the plaintiff, H. E. Byrne along-about the first part of the year 1927, in the Blackstone Hotel in Tyler, in his room. That was about February 10th, 12th or 14th, somewhere along there, 1927. In that conversation the case of Carter Stewart v. Houston Finance Corporation in which he was a defendant was discussed. The conversation came up by me asking him if he wouldn’t co-operate with us and showing him the situation we were in, and it came up at my suggestion. At the college we felt in need of Mr. Byrne who knew the case from beginning to end, we wanted his co-operation, and it was suggested that I go to see him and see whether or not that could be had. I talked to him and we drifted into the matter of the case apd he told me that he had taken the bankrupt. law and he was absolved from responsibility in the ease and that he had practically let his attorneys go, and that he was not going to take any more interest in it.”

Mr. Byrne denied all knowledge of any setting of the ease or that “it was being tried,’" and testified that he first learned, some time in September, in a conversation with Mr. Morris, that the case had been tried and judgment rendered against him, and that he relied upon his attorneys “keeping -up with the case”; also “if I had known that this case was set for trial for July 18, 1927, I would have presented my defense, which was bankruptcy. I had been discharged in bankruptcy and the case was listed. This Carter Stewart case was pending before my petition in bankruptcy.”

That rule of court is not mandatory; the character of notice to be given the opposing party is not prescribed; the purpose sought to be accomplished by the notice is that the adverse party may be apprised of the setting, to the end that, if he desire, he may appear and protect his interests when the case' is called. It is immaterial how he obtained the notice, so long as he did obtain it.

In this instance the notification was by Roberts, an interested party and codefendant with Byrne.

A court of equity will not interfere to set aside a judgment and grant a new trial, except upon a showing of strict diligence in the presentation of the cause and upon proof that, after doing all that such diligence required to be done, he has been deprived by fraud, accident, mistake, or other uncontrollable circumstances, of properly presenting his case upon the trial. And if, after it has become apparent that he must fail in his suit, he fails to avail himself of all means at his disposal to arrest the judgment and to exhaust every legal remedy to vacate it after it has been rendered, relief will be denied. That the complainant has a meritorious case, and that he has been compelled to suffer an adverse judgment by circumstances wholly beyond his control, are the fundamental grounds upon which the equity to demand a new trial must rest. Brownson v. Reynolds, 77 Tex. 254, 13 S. W. 986.

Relief will not be granted unless the party seeking it can show clearly to the satisfaction of the court that he has a good defense to the action, which he was prevented from making by fraud, accident, or the acts of the opposite party, wholly unmixed with any fault or negligence on his part. Johnson v. Templeton, 60 Tex. 238; Duncan v. Smith Grain Co., 113 Tex. 555, 260 S. W. 1027; White v. Powell, 38 Tex. Civ. App. 38, 84 S. W. 836.

Assuming that the discharge in bankruptcy was a good defense and was properly pleaded, was Byrne’s failure to offer and prove it at the trial the result of fraud, accident, or the acts of the adverse party, wholly unmixed with any fault or negligence on his part?

The burden of proof-was on Byrne to show, in addition to such discharge in bankruptcy, that he was not guilty of negligence in failing to move for a new trial of the case after the judgment was rendered and during the term of court at which it was rendered, or in failing to prosecute an appeal therefrom, if by such an appeal he could have urged the same facts as grounds for a reversal of the judgment. Freeman v. Miller, 53 Tex. 372; Harris v. Musgrave, 72 Tex. 18, 9 S. W. 90; Chambers v. Gallup, 30 Tex. Civ. App. 424, 70 S. W. 1009.

Byrne’s own testimony that, if he had known that the case was set for trial on July 18, 1927, he would have presented his defense of a release in bankruptcy, rendered unnecessary the submission of his special issue No. 2 (refused by the court), as follows:

.“If you have answered Special Issue No. 1 yes, then you will answer the following issue, otherwise you will not answer same.
“Was such notice, if any, given to H. E. Byrne or his attorneys at date sufficiently prior to July 18th, 1927, in order to allow H. B. Byrne and his attorneys a reasonable time to prepare said cause for trial?”

—and his special issues Nos. 3, 4, and 5 (also refused by the court), whether Carter Stewart or his attorneys gave notice to Byrne or any of the latter’s attorneys of an application to set the .case for trial, and if such application for such setting was sought to be made.

The jury having found that Byrne had prior notice of the setting, he could escape the effect of that finding only by showing that, although he had such notice, he was not negligent in not attending the trial and urging his defense, or in not asking for a postponement if he had not had sufficient time to prepare for trial, or in not filing a motion for new trial, or having it acted on and prosecuting an appeal from the overruling thereof.

These issues were not submitted by the court,- and Byrne did not request a submission thereof.

Whether he was or was not negligent, under the circumstances (the burden being on him to show that he was not negligent), was a.question of fact, and, not having been submitted,- is deemed found by the court in such manner as to support the judgment; there being evidence to support it. Article 2190, Rev. Stat. 1925; Ormsby v. Ratcliffe, 117 Tex. 242, 1 S.W.(2d) 1084.

In our opinion, the jury’s finding is conclusive of the question of negligence adversely to Byrne and the district court rendered the proper judgment.

We therefore recommend that the judgment of the Court of Civil Appeals be reversed and that of the district court be affirmed.

BEDDY, J., not sitting.

CURETON, C. J.

Judgment of the Court of Civil Appeals is reversed, and that of the district court is affirmed, as recommended by the Commission of Appeals.