text:
    Joseph Rodolfo CASTANOS, Appellant, v. The STATE of Texas, Appellee.
    No. 35299.
    Court of Criminal Appeals of Texas.
    Feb. 6, 1963.

      Roger L. Moore, El Paso, for appellant.
    Edwin F. Berliner, Dist. Atty., Jack N. Ferguson and Charles Andrew Gary, Asst. Dist. Attys., El Paso, and Leon B. Douglas, State’s Atty., Austin, for the State.
   McDonald, judge.

The offense is bigamy; the punishment, three years in the penitentiary.

The indictment charged that on or about January 19, 1962, the appellant did unlawfully marry Jenny Lee Doppelhauer in El Paso County, Texas, he having a former wife, Clarice Castaños, then living, whom he lawfully married on July 22, 1957.

The state adduced testimony from the witnesses, Mrs. Charles Andrews and her husband, Charles Andrews, and also from the prosecuting witness, Jennie Lee Dop-pelhauer. Mrs. Andrews testified that she met the appellant “through my husband”; that she had seen him on several occasions. When asked if appellant had ever introduced anyone to her as being his wife, she replied: “Yes, Mrs. Clarice,” and stated that this occurred in September of 1961 on a dove hunt and picnic and that appellant mentioned his wife several times. The witness further related that appellant referred to Clarice as his wife and that he called her “Honey”; that “he had three children at that time, and she was expecting”; that she was introduced to her as Clarice and as his wife; that the woman, Clarice, talked to the children and indicated that they were his (appellant’s) ; that in December, 1961, appellant “brought us that birth announcement, when his last baby was born” and that she asked how his wife and the baby were doing and he replied that “they were doing real nice”; that the birth announcement was signed Mr. and Mrs. Riidolfo Castaños; that twice she had seen this woman she knew as Clarice, at the picnic in September, and in October, but had not seen her since. It was further shown upon cross-examination of this witness that the picnic “wasn’t overnight; just one day.” The witness did not relate any facts to shed light upon the circumstances surrounding the occasion of her seeing the purported wife, Clarice, in October

Charles Andrews testified that he knew the appellant and had known him for approximately three years; that he had had occasion to see him in El Paso County during that period; that to the best of his knowledge appellant’s residence was in El Paso County; that during the three-year period he saw appellant maybe once or twice a week on occasions, maybe every two weeks and that during such three-year period appellant mentioned to him that he was married. The witness, however, did not recall when appellant first mentioned this to him. Mr. Andrews also related that he visited at the appellant’s residence three times; that appellant had introduced him “to a woman that he told me was his wife”; that this took place the first year he knew appellant; that he had known this lady for possibly two years; that she was introduced as Mrs. Castaños”; that appellant introduced the children “Not by name, but as, ‘These are my children’” and that he referred to them as his children. The witness further related that on his visits to appellant’s home he referred to the lady he had met as Mrs. Castaños, that she responded to this, and that appellant referred to her as his wife; that during this two-year period he never saw her on an occasion other than when he would visit in the home and that the last time he saw her in appellant’s home was on his visit there “Along, I believe, in August or September of ’61, somewhere along in there.” The witness also testified to virtually the same facts as to the dove hunt and picnic as related by his wife in her testimony. He further testified to a meeting at his home between the appellant and Mr. Doppelhauer (shown to be the father of the prosecutrix) and to a conversation wherein appellant was asked by Mr. Dop-pelhauer “if he was married and his answer was, ‘Yes and no’.” The witness Andrews testified further to an explanation by appellant that “he had received a Juarez divorce, but had since found it was no good, and he had filed suit for divorce in the United States, and that the divorce should be final by Saturday, or in the very near future.” The witness stated that this conversation “must have been around the 1st of December. I mean — Pardon me. It was the 1st of January to the 15th of January, something along there,” in 1962. Upon redirect examination, the witness testified that he visited the appellant’s home and that he lived at three different places; that the lady he met at appellant’s home on three different occasions and at the picnic and in the home of appellant’s father and had seen at the preliminary hearing was the same person, the one he knew as Clarice Castaños. When the witness was asked if Clarice Castaños was living with the defendant, he replied “Yes, sir.” Further testimony by Mr. Andrews related to a hunting trip when he discussed appellant’s marital status with Mr. Doppelhauer, appellant being on the trip but not present at the time of this conversation, and the subsequent meeting of these parties at the Andrews’ home after the hunting trip. Mr. Andrews then stated that he received a telephone call from the appellant and that “The first question he asked me was, did I inform Mr. Doppelhauer that he was married” and that appellant said “he had reason to believe that I was the informant * * It was at this subsequent meeting that the appellant mentioned the Juarez or Mexican divorce, that he had found that “it was invalid, and that he was getting a divorce here and it should be final Saturday, or in the very near future.” The witness was then asked if he had any further knowledge, at the time, of this later meeting, which was the latter part of December or the first part of January, as to whether “the Defendant and Clarice were living as man and wife,” and he responded: “I had no knowledge that he was still living with her or was living with her.”

The prosecutrix, Jennie Lee Doppelhauer, testified that she first met the appellant in Januar}*- of 1961 while she was working at a drugstore; that she had lived in El Paso for five years and that she was eighteen years of age; that appellant asked her for a date the first or second time she saw him; that he never mentioned his marital status any time prior to this date nor did he ever say whether or not he had any children; that she dated the appellant “steady” between the period of January, 1961, and May, 1961; that “It come up after May that he was married”; and that she went through a marriage ceremony with appellant in Juarez (Mexico) in May, 1961; that she did not live with him after this marriage; that in July of 1961 she questioned him about his being married; that someone had “called up” and that her conversation with appellant was based upon this telephone call; that appellant told her that what the telephone call was about was not true, but that when she questioned him again on a later date he stated that he was married but that he was divorced in 1959 in Mexico. The witness further testified that she had a child by appellant on June 6, 1962; that she first knew in November, 1961, that she was pregnant; that she went through a second marriage ceremony with appellant in El Paso County, at Anthony; that she went through this second ceremony “To get married in a church”; that the Reverend Brunner officiated at the Anthony Methodist Church and his wife was the witness, the ceremony taking place on January 19, 1962. The witness further testified that appellant told her he had obtained a divorce on January 2, 1962; and that she had not lived with appellant after the Anthony ceremony.

The state introduced into evidence an authenticated copy of a marriage license from Las Cruces, New Mexico, showing that Joe Rodolfo Castaños and Clarice For-tenberry were married July 22, 1957, by Henry G. Diaz, Probate Judge. The state also introduced into evidence the original marriage license issued by the El Paso county clerk showing that a marriage was performed between Joseph Rodolfo Cas-taños and Jenny Lee Doppelhauer on January 19, 1962, by Rev. Lester J. Brunner, Anthony Methodist Church minister, Anthony, Texas.

Appellant brings forward three formal bills of exception. In view of the qualification given them by the trial court, none of them present anything for review. Were they properly before us, however, we are of the opinion that none of these bills reflect error.

We call attention to the fact that the holding of this court in Hopson v. State, 115 Tex.Cr.R. 260, 30 S.W.2d 311, 70 A.L.R. 1028, was rendered inoperative by the passage of Art. 490a, Vernon’s Ann.P.C.

We find the evidence sufficient to sustain the jury’s verdict.

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


source: Caselaw Access Project

author: McDonald, judge. BELCHER, Commissioner.

license: Public Domain

text:
    John Clayton WILLIAMS, Appellant, v. The STATE of Texas, Appellee.
    No. 34881.
    Court of Criminal Appeals of Texas.
    Nov. 7, 1962.
    Rehearing Denied Jan. 9, 1963.
    Second Rehearing Denied Feb. 13, 1963.
    No attorney of record on appeal for appellant. John J. Pichinson, Wm. Brode Mobley, Jr., Corpus Christi, on rehearing only.
    Leon B. Douglas, State’s Atty., Austin, for the State.
   McDonald, judge.

The offense is burglary with intent to commit theft, with two prior offenses of felonies less than capital alleged for enhancement purposes; the punishment, life.

The injured party, Adolph Skrobarcyzk, testified that he owned a cafe and an adjoining garage in Corpus Christi; that appellant was in his cafe around 7 or 8 at night on October 30, 1960; that he wanted the keys to his (the witness’s) garage; that later they went to the garage and appellant tried to sharpen a tire tool; that the injured party sharpened it for him; that appellant had been drinking; that he (the witness) took the license number of the automobile appellant was driving; that the next morning the witness found the garage building had been broken into; that the hasp on the door was broken and that some oxygen tanks and acetylene tanks and torches and other items were missing; that later the officers returned the acetylene tanks and torch; that they were his items; that some paint was knocked off the tanks.

The officers testified that a crowbar was in the garage, with a “W” on it. The evidence further reflects that around 6 o’clock the following morning appellant was asleep in a car that belonged to his mother, at 610 Roberts Drive in Corpus Christi; that Dr. Cleopatra Adelaide Towne resided at that address; that after appellant left, Dr. Towne called the police; that there were acetylene tanks by the car which were not there before appellant was and that they were removed from the premises by the officers. It was shown that appellant’s mother owned the car; that paint scrapings were taken off the bumper of the car that had the same composition and color as the tanks from the garage.

The indictments, judgments, and sentences of the two prior convictions for theft and burglary were introduced, along with fingerprints. The fingerprints were examined and known fingerprints of the appellant were examined and, in the opinion of an officer, they were those of one and the same person.

Appellant did not testify nor offer any testimony.

No exceptions nor objections were taken to the court’s charge.

The court charged fully on the law of circumstantial evidence, and in our judgment protected all the rights of the appellant.

No brief has been filed on behalf of appellant.

There are no formal bills of exception, and the few informal bills of exception reflect no error.

It is the position of the state that the evi* dence is sufficient to support the conviction, since the property missing from the garage was found where appellant was in his car, asleep, early the next morning; the crowbar with a “W” on it was in the garage; and the paint from the bumper of the car appellant was driving was the same texture and composition as that on the tanks.

We find the evidence sufficient to sustain the verdict of the jury.

In Bernadett v. State, 166 Tex.Cr.R. 621, 317 S.W.2d 747, we held that evidence of defendant’s unexplained possession of some property recently stolen from a burglarized house was sufficient to sustain the jury’s verdict finding him guilty of burglary.

Finding no error, the judgment is affirmed.

ON APPELLANT’S MOTION FOR REHEARING

BELCHER, Commissioner.

The appellant complains of the delay in the filing of the transcript in this court. It appears from the record that sentence was pronounced and notice of appeal given on June 14, 1961, and the transcript was filed in this court on June 28, 1962. Delay in the filing of a transcript in this court may be in violation of the duty imposed upon the clerk of the district court by statute. Arts. 822, 841, 842, 843 and 844, C.C.P. These statutory requirements should be strictly observed. Art. 419, P.C.; 5 Tex.Jur.2d 505-508, Secs. 305-307; 12 Tex.Jur.2d 156-157. The delay in forwarding the transcript would not however warrant the reversal of the conviction.

Complaint is made of portions of the summary of the facts in the original opinion •wherein it states “that appellant had been drinking” instead of that “he looked like he’d had a few beers before he ever came in the place (bar)”, as shown by the testimony; and “that there were acetylene tanks by the car which were not there before appellant was, and that they were removed from the premises by officers” when the testimony shows that the tanks were not by the car which was in the driveway but by the door of the carport. These variances alone as shown could not warrant a ■different conclusion as to the commission of :the primary offense charged.

It is strenuously urged that the evidence is insufficient to support the conviction. 'The evidence has been re-examined in the 'light of appellant’s contentions and it is •concluded that the facts and circumstances in evidence are sufficient to sustain the jury’s finding that the appellant is guilty as ■charged.

The motion for rehearing is overruled.

•Opinion approved by the Court.


author: WOODLEY, Presiding Judge.

text:
    Arlenza KELLY, Appellant, v. The STATE of Texas, Appellee.
    No. 35050.
    Court of Criminal Appeals of Texas.
    Jan. 2, 1963.
    Rehearing Denied Feb. 20, 1963.
    •William H. Scott, Jr., Houston, for appellant.
    Frank Briscoe, Dist. Atty., Carl E. F. Dally and Erwin G. Ernst, Asst. Dist. Attys., Houston, and Leon B. Douglas, State’s Atty., Austin, for the State.
   WOODLEY, Presiding Judge.

The offense is keeping and exhibiting for the purpose of gaming, a policy game; the punishment, 2 years. (Art. 642c Vernon’s Ann.P.C.)

Reversal is sought upon the ground that the evidence is insufficient to sustain the conviction. Closely connected with this contention is the claimed error of the trial court in refusing to charge the jury that the mere taking or accepting or placing for another of a bet or wager of money, or a mere offering to take or accept or place for another such a bet or wager of money on a policy game is not proof of keeping or exhibiting for the purpose of gaming a policy game. The two grounds are discussed together in appellant’s brief.

Officer W. L. Kimble, qualified as an expert on matters involving the game of policy, identified the various figures in the game of policy as follows: The owner of the game, sometimes called the “white man”, is the individual who draws the numbers, determines the winners, and prints the tickets or “hit slips”. These are turned over, in turn, to a field man. The field man hires writers and pickup men and distributes the hit slips to the writers or to the pickup men and represents the only contact with the owner. There are one or more pickup men who receive the hit slips from the field man and distribute the same to the writers. Writers are the persons who take bets from players and sometimes have sub-writers who also take money and bets from players. The players, who number several hundred, maybe thousands in Harris County at the time of the offense alleged in the indictment, do business only with the writers. The average bet is probably one dollar ($1.-00). Each writer keeps a book in which is contained an original and two carbon copies. When a bet is placed by a player with the writer, the writer marks the bet down in the book, thereby making in his book an original and two carbon copies of his own record, and gives to the player a small ticket which is a carbon copy of the book entry, and represents the player’s receipt for his bet. The originals of the sheets in the book are torn out from the book and turned in, together with the money, by the writer to the pickup man who, in turn, delivers these “tear outs” and money to the field man, who, in turn, delivers them to the owner. At this time the field man receives back from the owner the printed “hit slips”, containing the listing of the day’s winningnumbers, which are passed down the same line to the writer who distributes them so-that the players will know whether they-won or not.

Vice Squad Officers obtained a search warrant authorizing the search of certain premises said to be occupied by appellant and by one Howard Marsh. The search warrant was executed about 4 A.M., at which time only Marsh and his wife were present. Some “policy bets” and $4.26 were found in a water glass in the front room.

Howard Marsh testified that the policy bets and money found in the water glass-, were left there to be delivered to appellant. He testified that he had previously delivered bets and money to appellant from another party.

Appellant arrived shortly before 7 A.M. He was arrested and a receipt for several' policy plays was found upon his person. It was stipulated that the receipt was in appellant’s handwriting.

Phillip Beadalio testified that players had left money and bets with him which appellant later picked up.

The jury was instructed that the mere possession of policy paraphernalia alone is-not proof of the offense charged in the indictment, and that the jury should acquit unless they believed from the evidence beyond a reasonable doubt that appellant kept or exhibited a policy game. “Keep” was defined as “holding the game in readiness-for the purpose of obtaining bettors, or for-gaming” and “exhibit” as signifying “the-act of displaying the game for the purpose-of obtaining bettors.”

The case was submitted as one of circumstantial evidence.

The evidence warranted a finding by the-jury that appellant’s part in the keeping and exhibiting of a policy game was that of' pickup man or field man. There is also-testimony referring to him as a writer, but no evidence requiring the submission of the-issue that appellant did no more than take, offer to take, accept or offer to accept, or to place or offer to place for a player a bet or wager of money on a policy game.

In the recent case of Jefferson et al. v. State, Tex.Cr.App. 364 S.W.2d 227, we upheld the felony conviction of a “writer” whose function was to take bets and pay off wins up to $10, and who was in possession of policy books.

For like reasons, and upon the same authorities, we hold that the pickup man or field man whose function is to receive from the writer, who accepted them from the players, money and bets on a policy game may be convicted as a principal in the keeping and exhibiting of a policy game.

Appellant’s remaining claim for reversal relates to the testimony of the witness Kimble, that appellant was a writer for the P & T Policy Company, and the trial court’s comment in eliciting such testimony from the witness.

Under examination by appellant’s counsel, the witness had testified in the absence of the jury that the information he had from Marsh and his wife was that the appellant was a writer for the P & T Company.

Later the witness testified before the jury, without obj ection, that the “P & T” was the last of some 15 policy games that had operated in Harris County when he began his tour of duty as a police officer attached to the Vice Squad of the Houston Police Department. He was asked what company the appellant wrote for and the court ruled that he could answer “if he knows”. Appellant’s request for leave to test the witness’ qualifications was granted. The voir dire examination was made in the jury’s presence, no request having been made that the jury be retired. On this examination the following occurred.

“Q. Although you have placed bets and played the game through other players, you yourself have never placed a bet with Arlenza Kelly, have you ?
“A. Not with Kelly, no sir.
“MR. SCOTT: We will object as to what knowledge he may have as being speculative and also—
“THE COURT: He told this Court he knew he was a writer for P & T.
“MR. SCOTT: I don’t believe he testified to that.
“THE COURT: I’ll ask him. Do you know if on this date the defendant was a writer for the P & T Policy Company?
“A. (By witness) Yes, sir.
“MR. SCOTT: If the Court please, I respectfully object to the comments of the Court—
“THE COURT: The jury will not consider any remarks of the Court except the rulings on the objections. I overrule your objection.
“MR. SCOTT; At this time I move for a mistrial based on the comments of the Court.
“THE COURT: That will be overruled.
“MR. SCOTT: Note our exception.”

The name of the company or the policy game was not alleged in the indictment and was not material.

In view of this fact and of the evidence, including the answer of the witness to the court’s interrogation, the court did not err in refusing to declare a mistrial.

The evidence is deemed sufficient to sustain the conviction and no reversible error appears.

The judgment is affirmed.


author: HUGHES, Justice.

text:
    RAILROAD COMMISSION of Texas et al., Appellants, v. Loyce PHILLIPS et al., Appellees.
    No. 11067.
    Court of Civil Appeals of Texas. Austin.
    Jan. 30, 1963.
    Will Wilson, Atty. Gen., Waggoner Carr (successor), Linward Shivers, Asst. Atty. Gen., Black & Stayton, Austin, for appellants.
    Powell, Rauhut, McGinnis, Reavley & Lochridge, Frank Douglass and Donald F. Nobles, Austin, for appellees.
   HUGHES, Justice.

This appeal is from a judgment declaring null and void an order of the Railroad Commission of Texas, dated May 25, 1962, made without notice or hearing, in relation to the assignment of acreage for proration-purposes in the Nan-Su-Gail (Sub-Clarks-ville) gas field in Freestone County, and enjoining enforcement of it. The judgment also reinstated a productive acreage order of the Commission for this field dated January 10, 1962, and ordered compliance therewith.

In the order of May 25, 1962, the Frank Devereux lease was, for the first time, assigned an allowable based on a unit assignment of acreage, the Commission reciting-in such order that it had “considered the evidence submitted with the completion of' Wise Operating Company’s Frank Dever-eux Well No. 1 and ruled that all units reduced as a result of two hearings held' August 17, 1961, and November 11, 1961, be-reinstated effective May 23, 1962.”

In this May 25th order the acreage assigned to appellees Jack L. Phillips and Loyce Phillips, while somewhat increased, constituted a smaller percentage of the field’s total productive acreage owned by and previously assigned to them. This resulted from acreage being assigned to the Devereux well.

As a result of the Commission order of May 25th appellees have lost approximately 8% of the total gas allowable for this field, the value of which for the months of July, August and September, 1962, aggregated ■$4,'400.00. This percentage of loss will continue for the life of the field if the order of May 25th stands.

The Frank Devereux Well No. I was drilled and completed as a producing gas well under these circumstances:

On March 21, 1962, appellant Watson Wise, d/b/a the Watburn Oil Company, made application to the Railroad Commission to drill a “Wildcat” Well No. I on the Frank Devereux 82.65 acre lease in Freestone County, to a depth of 5500 feet to the Woodbine zone or reservoir. The surface site of this well was found by the Commission to be in the Nan-Su-Gail field area. On March 23, 1962, the Commission issued a permit for this well which recited: “Regular provided this well is never completed in the Nan-Su-Gail Woodbine field for which field rules have been adopted.” In .an amended permit of the same date it was •stated: “Regular provided this well is never completed in the Nan-Su-Gail Woodbine or Sub-Clarksville fields for which field rules have been adopted.”

The Frank Devereux Well No. I was drilled to a depth of 4616' where it was completed April 1, 1962, as a gas producer in the Sub-Clarksville formation. It was not drilled to the Woodbine formation which is found some 400' lower. The well is perforated in and produces from a reservoir found at a sub-sea depth of from 4084' to 4094’.

The Frank Devereux Well No. I was drilled (as completed) in violation of the spacing and density rules for the Nan-Su-Gail (Sub-Clarksville) field.

Appellants base their defense of the Commission order of May 25th partly on the ground that appellees are judicially es-topped to attack it. The facts supporting this contention are, in substance:

The Commission has held two hearings after notice to the operators to determine the productive acreage that may be assigned gas wells completed in the field. In making such productive acreage determination the Commission necessarily had to fix the productive limits of the field. Ap-pellees have taken the position that on the east the productive limit of the field is fixed by a gas-water contact found at a sub-sea depth of -4070 feet. It has been appellees’ contention that a well completed below that sub-sea depth would produce water or, if it produced hydrocarbons, would produce such hydrocarbons from some reservoir other than the Nan-Su-Gail.

The Commission has accepted the above described contention of appellees, that is, in determining the amount of productive acreage that may be assigned gas wells in the eastern portion of the field, the Commission has done so by reference to such gas-water contact. In doing so the Commission necessarily has been required to determine the location of the -4070 foot contour and to project the location of said contour to the surface, thereby fixing to the east the productive limit of the field.

The Commission upon occasion may have differed with appellees as to the precise surface location of the -4070 foot contour but it has always agreed with appellees that the productive limit of the field to the east is fixed by a gas-water contact found at a sub-sea depth of -4070 feet.

Appellant Wise has taken the position that the field or reservoir is not limited to the east by a gas-water contact found at a sub-sea depth of -4070 feet. The Commission has never agreed with appellant and has always determined productive acreage, that is, has always determined the productive limit of the field to the east, by reference to such gas-water contact.

By drilling the Frank Devereux Well No. I it was established that the productive limit of this field to the east is not defined by a gas-water contact found at a sub-sea depth of 4070', and that the contour lines based on this erroneous assumption are incorrect.

Appellants cite no authorities to support their plea of judicial estoppel. We find none, and would not expect to do so since the matter before the Commission was in no sense judicial but purely of an administrative character.

We find no better statement of the principle to be applied here than the following statement of Chief Justice Archer in his opinion for this Court in Killingsworth v. Broyles, Tex.Civ.App., 300 S.W.2d 164:

“There is a distinction between judicial process and the administrative process, which, in general, precludes the application of the doctrine of res adjudicata to administrative proceedings. In judicial proceedings courts apply law to past facts which remain static and on the other hand administrative bodies are concerned with fluid facts and changing policies.”

Our statutes provide:

“In recognition of past, present, and imminent evils occurring in the production and use of natural gas, as a result of waste in the production and use thereof in the absence of correlative opportunities of owners of gas in a common reservoir to produce and use the same, this law is enacted for the protection of public and private interests against such evils by prohibiting waste and compelling ratable production.” Sec. 1, Art. 6008, Vernon’s Ann. Civ.St.
“It shall be the duty of the Commission to prorate and regulate the daily gas well production from each common reservoir in the manner and method herein set forth. The Commission shall prorate and regulate such production for the protection of public and private interests:
“(a) In the prevention of waste as . ‘waste’ is herein defined;
“(b) In the adjustment of correlative rights and opportunities of each owner of gas in a common reservoir to produce and use or sell such gas as is permitted in this Article.” Sec. 10, Art. 6008.

Commenting upon the authority conferred by these statutes, upon the Commission, this Court in Railroad Commission v. Humble Oil & Refining Co., Tex.Civ.App., 193 S.W.2d 824, 828, writ, ref., N.R.E., stated:

“The Commission’s power to regulate oil production in the interest both of conservation and of protecting correlative rights is a continuing one, and its proration orders are subject to change, modification or amendment at any time, upon due notice and hearing, either upon the Commission’s own motion or upon application of an interested party. This principle is now so well established as to require no citation of authority. * * * ”

See also 2 Am.Jur.2d, Sec. 525, Administrative Law, for a discussion of the continuing jurisdiction of an administrative agency.

Appellants, in the absence of authority to support their plea of judicial es-toppel, draw an analogy between the doctrine of res adjudicata which they state is applicable to administrative actions and the “corollary doctrine” of judicial estop-pel. It is quite true that certain types of administrative actions are properly within the scope of the principle of res adjudicata. It is the nature of the action, however, ■which is controlling. We quote from 2 Am. Jur.2d, p. 307:

“In general, the answer given by the courts to the question whether an administrative determination is capable of being res judicata depends upon the nature of the administrative action involved, and the doctrine of res judicata has been applied to administrative action that has been characterized by the courts as 'adjudicatory/ ‘judicial,’ or ‘quasi-judicial/ while to administrative determinations of ‘administrative/ ‘executive/ ‘legislative/ or ‘ministerial’ nature the rules of res judicata have been held to be inapplicable.”

See also 73 C.J.S. Public Administrative Bodies and Procedure § 147; National Labor Relations Board v. Baltimore T. Co., 140 F.2d 51, Cir.Ct.Appeals, 4th Cir.

We cannot conceive of a more administrative function than a determination of the outlines of a gas field for proration purposes. It is, therefore, our opinion that appellees are not judicially estopped to insist •upon adherence to the rules promulgated by the Commission for the Nan-Su-Gail (Sub-Clarksville) field under knowledge now extant even though they have previously and advantageously contended before the Commission the existence of facts now known to be untrue.

Appellants also urge that the Frank Dev-ereux Well No. I has been completed in accordance with the terms of the permit under which it was drilled because it was completed at a sub-sea depth below 407(7, and hence has not been completed in the Nan-Su-Gail (Sub-Clarksville) field as delineated by the Commission. Similarly, they contend that the Commission could have issued a regular location permit for the drilling of the Frank Devereux Well No. I provided only that such well not be completed above a sub-sea depth of 4070', since the Commission had accepted such depth as the eastern limit of the field.

We cannot sustain these contentions. They are without factual basis. The well was completed in the Nan-Su-Gail (Sub-Clarksville) field. The Commission did not, in the permit under which the well was drilled, say that the well could not be completed above or that it could be completed below the sub-sea depth of 407(7. It was plainly and unambiguously conditioned, “Regular provided this well is never completed in the Nan-Su-Gail Woodbine or Sub-Clarksville fields for which field rules have been adopted.” The Frank Dever-eux Well No. I was completed in violation of the terms of this permit. No amount of legerdemain can alter this fact. It is an illegal well.

The judgment of the Trial Court is affirmed.

Affirmed.


author: COLEMAN, Justice.

text:
    Harvey C. KILLEN, Appellant, v. BRAZOSPORT MEMORIAL HOSPITAL, Appellee.
    No. 14054.
    Court of Civil Appeals of Texas. Houston.
    Jan. 10, 1963.
    Rehearing Denied Feb. 14, 1963.

      Sam Houston Clinton, Austin, for appellant.
    Finis E. Cowan, Robert J. Malinak, Houston, Baker, Botts, Shepherd & Coates, Houston, of counsel, for appellee.
   COLEMAN, Justice.

This is an appeal from a summary judgment granted on motion of the defendant.

Appellant brought suit against the Brazosport Memorial Hospital for damages resulting from personal injuries sustained when appellant’s wife fell while walking in the corridor of the hospital. Appellant alleged that the hospital was negligent in certain respects, including:

“In failing to supply its employees who cleaned and mopped said floor covering proper equipment such as signs or other paraphernalia to warn of the hazard then and there existing.
“In permitting an employee to clean and mop said floor covering at a time when proper equipment such as signs was not available to warn of the hazard then and there existing.
“In hiring or retaining the employee who was then and there engaged in cleaning and mopping said floor covering and who was careless and negligent. * * * ”

Appellee answered to the merits and pled that the Brazosport Memorial Hospital is a charitable beneficial institution incorporated as such under the laws of the State of Texas.

Appellee filed a motion for summary judgment supported by affidavits. Appellant answered that the affidavit in support of appellee’s motion was that of the administrator of the hospital, an interested witness, “whose credibility was for the jury.” The answer asserted that depositions on file raised issues of fact (1) as to the status of appellee as a charitable organization; (2) negligence in the employment of servants; and (3) failure to properly establish safety rules. Appellant filed no affidavits in support of his answer.

The facts with reference to the organization and operation of the hospital were carefully developed by deposition and affidavit. Certain citizens of the Brazosport community secured a charter from the State of Texas authorizing them, as trustees, to acquire, erect, maintain and operate “a benevolent, charitable, scientific and educational Foundation in the City of Free-port, Texas, for the purpose of administering to the sick, to the infirm, to the helpless, to the maimed and to the afflicted of all creeds, colors and nationalities as may be brought to or presented at such Foundation * * * for the purpose of training young women in the nursing profession and for developing and training young physicians and surgeons; for conducting post graduate study and research in medicine and surgery. The foundation is managed through a self-perpetuating board of trustees. None of these trustees are doctors. The charter provided that the corporation should have no capital stock and should not be operated for profit. It also provided that none of the funds which the corporation might acquire by endowment, donation, bequest or fees collected from patrons for services rendered should be applied to any purpose other than the purchase, erection, maintenance, operation, enlargement and improvement of such foundation, its facilities, supplies, equipment and training school. The net value of the assets of the corporation as set out in the charter was $1500.00.

The Corporation on March 1, 1954, leased the premises and facilities of Free-port Hospital. As far as can be determined from the record, the leased premises were first owned and operated by Free-port Hospital Association, an agency of the Freeport Sulphur Company.. On March 1, 1953, the hospital properties were taken over by a partnership of four doctors, who operated a clinic on adjoining premises. The corporation leased the premises from this partnership and on March 1, 1955, purchased the hospital premises and equipment for a consideration of $188,416.00, paid as follows: (1) assumption of notes in the amount of $30,900.00 payable to the Freeport Sulphur Company; (2) payment of a $6,000.00 note to Freeport National Bank; (3) payment of a $10,000.00 note to Velasco State Bank; (4) assumption of loan payable to Freeport Medical and Surgical Clinic in the amount of $16,707.34; (5) notes payable to partnership in the amount of $124,808.66.

The consideration, as distinguished from the method of payment, was determined by impartial appraisers. No payment has been made on the note payable to the partnership although the balance due has been substantially reduced by donations, in the form of reductions in the balance due, by the individual partners.

The corporation has added a wing to the hospital building at a cost of $102,000.00, part of which was paid by a grant from the Ford Foundation. The payments made on the notes and to meet other expenses incurred by the hospital were made possible by an excess of revenue from paying patients over the operating expenses of the hospital.

The hospital is administered by the trustees through a paid administrator, nurses and other employees. Neither the trustees nor any of the doctors practicing in the hospital receive any salaries from the hospital or the corporation. There is no indication that the compensation of any of the employees is excessive. The corporation has been approved for tax exemption by all taxing authorities.

Appellant has not urged this Court to reject the doctrine of charitable immunity. He relies, first, on the rule that the burden rested on the hospital to prove facts establishing the defense of charitable immunity, as required by Barnes v. Providence Sanitarium, Tex.Civ.App., 229 S.W. 588. He then argues that in view of the numerous factors necessarily considered in determining whether or not a corporation is entitled to the protection of the charitable immunity doctrine, it is obvious that there are many fact issues to be determined.

In the determination of the questions raised by this appeal certain rules applicable to summary judgment proceedings must be applied. “The duty of the court hearing the motion for summary judgment is to determine if there are any issues of fact to be tried, and not to weigh the evidence or determine its credibility, and thus try the case on the affidavits. * * * ” Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929.

“It may well be that the ultimate facts in the case will be inferred from uncontroverted facts; and, if so, the inferences themselves are facts, and they are ‘controverted’ if reasonable minds could draw different inferences. Drawing these inferences is ordinarily the province of the trier of the facts; and summary judgment will not lie in such a situation unless the facts compel, to the exclusion of all others, the inferences which support the summary judgment.” Bliss v. City of Ft. Worth, Tex.Civ.App., 288 S.W.2d 558, writ ref., n. r. e.
“Where such an ultimate conclusion would not necessarily be the only conclusion possible to be made from the same evidence by reasonable minds, the conclusion would be a conclusion of fact and not of law. * ⅜ * Conclusions of fact, if ultimate and determinative, are to be made by the trier of facts, who does not function in summary judgment proceedings. * * *” Frazier v. Glens Falls Indemnity Company, Tex.Civ.App., 278 S.W.2d 388, writ ref., n. r. e.

However it is well settled that when a motion for summary judgment is supported by affidavits, depositions, stipulations or other extrinsic evidence sufficient on its face to establish facts, which, if proven at trial, would entitle the movant to an instructed verdict, the opponent must show opposing evidentiary data which will raise an issue as to a material fact. Gulf, Colorado & Santa Fe Railway Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492.

A careful examination of this record fails to reveal any dispute in the testimony material to the issue of charitable immunity. However, it is necessary to determine from the undisputed facts whether or not the only reasonable conclusion that might be drawn from these facts is the conclusion that the corporation as established and operated is an institution of purely public charity. Barnes v. Providence Sanitarium, Tex.Civ.App., 229 S.W. 588, err. dism. In making this determination the affidavits and other instruments must be construed liberally in favor of the appellant, and if any reasonable doubt arises as to the existence of a genuine issue as to a material fact, it must be resolved against appellee. Gulbenkian v. Penn, supra; Webster v. Webster, Tex.Civ.App., 293 S.W.2d 820, writ ref., n. r. e.

The income of the corporation from the operation of the hospital has substantially exceeded the operating expense each year. This fact, however, is not sufficient to raise a fact issue as to the corporation’s charitable nature. Scott v. Wm. M. Rice Institute, Tex.Civ.App., 178 S.W.2d 156, err. ref.

Appellant asserts, without contradiction, that the evidence shows that for the years 1955-1960 the “charity allowances” have never exceeded 2.15% of the total operating revenue. The hospital investigates all patients to determine their ability to pay the customary charges and requires payment from those having the ability to pay. No patient is turned away from the hospital because he is unable to pay. No continuing program for solicitation of gifts is carried out, nor is the corporation a beneficiary of the United Fund or Community Chest programs of Brazoria County. However, it has received gifts and grants for use in its work. This evidence is not sufficient to raise a question of fact as to the charitable nature of the institution. Steele v. St. Joseph’s Hospital, Tex.Civ.App., 60 S.W.2d 1083, err. ref.; Enell v. Baptist Hospital, Tex.Civ.App., 45 S.W.2d 395, err. ref.; Baylor University v. Boyd, Tex.Civ.App., 18 S.W.2d 700.

If from the evidence it can reasonably be inferred that the hospital was conveyed to the corporation at an excessive consideration so as, in practical effect, to permit the doctors forming the partnership conveying the property to continue its management for their private gain, or if the corporation operated the hospital in such a manner as to permit the inference that it was operated for the private gain of the partnership, or other individuals, a question of fact as to the charitable nature of the corporation is raised and the action of the trial court in granting this summary judgment is error. Malone-Hogan Hospital Clinic Foundation v. City of Big Spring, Tex.Civ.App., 288 S.W.2d 550, err. ref., n. r. e.; Raymondville Memorial Hospital v. State, Tex.Civ.App., 253 S.W.2d 1012, err. ref., n. r. e.

The evidence shows that the consideration for the purchase was determined by appraisal. Appellant offered no testimony that the price so determined was excessive. While the evidence shows that, as part of the purchase price, the corporation agreed to pay certain obligations of the partnership, no inference of private gain to the partnership could arise from this circumstance in the absence of evidence of an excessive purchase price.

The hospital has no laboratory or x-ray facilities and it entered into a contract with the clinic owned by the partnership located adjacent to the hospital building for the use of its facilities and technicians at a negotiated fee. The evidence shows that the charges made for the services do not exceed the usual and customary charges made elsewhere for similar services and that this procedure relieved the hospital of the necessity for making a large capital investment. The balance sheets in evidence indicate that the hospital’s receipts for such services substantially exceed the expense involved in rendering them. The evidence further shows that new construction by the hospital and clinic placed the buildings adjacent to each other and that the buildings are connected by a door. The administrator employed by the hospital when it was privately owned was continued in this position by the corporation. He also continued to manage the clinic and to draw salaries from both the hospital and the private clinic. There is nothing in the record to indicate that this arrangement resulted in private profit to the clinic or gave the owners of the clinic any control over the operations of the hospital.

According to the by-laws of ap-pellee, the medical staff of the hospital is organized into four sections: the honorary medical staff, the consulting medical staff, the attending medical staff and the visiting medical staff. The honorary medical staff consists of retired practitioners and other members of the medical profession of professional eminence deemed meritorious enough to obtain the honor. The consulting medical staff is elected from among members of the attending medical staff who have relinquished their duties as members of the attending medical staff. The attending medical staff is organized into clinical divisions and each member is given a definite seniority and grade; the attending medical staff is the “sole official representation of the medical staff of the hospital, and as such shall be expected to assist the Board of Trustees in all medical administrative affairs of the hospital,” and “all patients entering the hospital without an attending physician shall be referred to members of the attending staff for treatment.” The visiting staff consists of members of the medical staff who have been elected as such by the Board of Trustees, but they do not have any vote in the business session of the attending staff. The record does not reveal the identity of members of the “attending staff” during all of the years, but in fiscal 1959-60, of the eight members who did comprise it, the first four were the four partners who owned and operated the clinic and, until its transfer to the appellee, the Freeport Hospital. Patients are admitted to the hospital on a doctor’s order. A physician who is not a member of the staff may admit a patient up to three times in emergency situations, otherwise patients must be admitted on order of a member of the medical staff of the hospital. All appointments to the medical staff are for one year and the staff is subject to the control of rules and regulations adopted by the Board of Trustees. The attending medical staff has the responsibility of providing treatment for charity patients, staffing the Nurses Training School with competent instructors, holding monthly meetings to review the clinical experience for the benefit of all members of the medical staff, and advising the trustees on all matters required of them. They are also required to assign one or more of its members for emergency duty on holidays and other occasions when it might be anticipated that physicians would be difficult to locate. Membership in the attending staff is limited to physicians practicing in the immediate community. The visiting staff consists of the doctors who are privileged to use the hospital facilities, but who prefer courtesy status or who live at such a distance from the hospital as not to be immediately available for call. The evidence shows that every doctor who applied for admission to the staff was admitted and that the doctors composing the partnership in the clinic had no privileges or rights in connection with the hospital not granted to other members of the staff. There is one other hospital in the city and two in other parts of the county. This evidence is not of such nature as to raise a reasonable inference that the hospital is operated for the private benefit of the partnership. No doubt the operation of the hospital benefited all the doctors who practiced in it, as well as the employees who earned wages there, patients who were treated there, and nurses who trained there, but such incidental benefits to individuals will not justify the withdrawal from the corporation of the protection of the doctrine of charitable immunity.

Appellant’s contention that the hospital failed to furnish warning signs is not supported by the evidence. The hospital had three such signs, one of which was placed at the bottom of the stairs leading to the corridor where the mopping was done. There is evidence that the other two signs were available for use.

There is no competent evidence in the record to raise a fact issue as to any acts of negligence on the part of the corporation with regard to the employment or retaining of Janie Marquez, the employee charged with negligence causing appellant’s injuries. Before she was employed the Director of Nurses and Housekeeping Personnel interviewed her as to her background and previous employment and received good recommendations from previous employers. There had been no previous complaints that she mopped in an unsafe manner or without posting signs. Appellant furnished an affidavit that immediately after the accident Dr. McCary, a member of the attending staff, told Mrs. Marquez, “Honey, I have told you over and over to put up the wet sign in the hall when you mop.” Dr. McCary denied making the statement. While there is a fact dispute as to whether the statement was made, it is not material since the statement would not have been admissible in evidence on a trial. Dr. McCary was a member of the attending medical staff and the joint advisory committee,, but he had no authority to supervise the activities of Mrs. Marquez, nor to formulate rules and regulations for the hospital’s housekeeping personnel. He was neither an employee nor an agent of the hospital. Where an agent or an employee of a corporation makes an admission against the interest of that corporation, such admission is not admissible in evidence in a claim against the corporation unless it was made in the course or scope of the agent’s employment. McCormick & Ray, Texas Law of Evidence, 1st Ed., § 508, pp. 658-662; Rogers v. Collier, Tex.Civ.App., 223 S.W.2d 560, err. ref.; Le Sage v. Pryor, 137 Tex. 455, 154 S.W.2d 446; Southern Surety Co. v. Nalle & Co., Tex.Com.App., 242 S.W. 197. The by-laws of the corporation provide that members of the attending staff are expected to assist the Board of Trustees in all medical administrative affairs of the hospital. The staff is concerned only with medical aspects of the hospital and has no authority in any aspect of the control or supervision of the housekeeping. Knowledge possessed by Dr. McCary,, therefore, would not be knowledge of, or notice to, the hospital in matters concerning housekeeping. Luling Oil & Mfg. Co. v. Lane & Bodley Co., 49 Tex.Civ.App. 534, 109 S.W. 445; Wellington Oil Co. of Delaware v. Maffi, 136 Tex. 201, 150 S.W.2d 60; Teagarden v. R. B. Godley Lumber Co., 105 Tex. 616, 154 S.W. 973. The statement was not admissible as part of the res gestae because it pertained to things done and knowledge obtained before the accident which the declarant witnessed. Knapik v. Edison Brothers, Inc., Tex.Civ.App., 313 S.W.2d 335, err. ref.

Appellee presented testimony by affidavit that Janie Marquez was instructed by the Director of Nurses and Housekeeping Personnel to use warning signs when mopping floors. Appellant points to the failure to promulgate a written safety rule to that effect by the Board of Trustees or the administrator, as the breach of a non-delegable duty bringing this case within the exception to the rule of charitable immunity recognized in such cases as St. Paul’s Sanitarium v. Williamson, Tex.Civ.App., 164 S.W. 36, writ den.; Medical and Surgical Memorial Hospital v. Cauthorn, Tex.Civ.App., 229 S.W.2d 932, err. ref., n. r. e.; Clayton v. Southern Methodist University, Tex.Civ.App., 172 S.W.2d 197, rev. 142 Tex. 179, 176 S.W.2d 749; and Steele v. St. Joseph’s Hospital, Tex.Civ.App., 60 S.W.2d 1083, err. ref.

We think that the duty of supervision of cleaning personnel, and establishing procedures for them,, might properly be delegated, as it was in the case, to a director of housekeeping personnel. Felan v. Lucey, Tex.Civ.App., 259 S.W.2d 302, err. ref., n. r. e.; Baptist Memorial Hospital v. Marrable, Tex.Civ.App., 244 S.W.2d 567, err. ref., n. r. e.

• Here, since signs were available, a cause of action'would lie against a negligent employee. Ordinarily where a corporation breaches a non-delegable duty no cause of action could be maintained except as against the corporation. Thus,, under the reasoning of Southern Methodist University v. Clayton, 142 Tex. 179, 176 S.W.2d 749, and Medical and Surgical Memorial Hospital v. Cauthorn, supra, the failure to establish a written safety rule would not create a ground of liability against the corporation.

We are indebted to counsel for both appellant and appellee for the excellent briefs filed in this case. They were most helpful in the preparation of this opinion.

It is the opinion of this Court that the only inferences which reasonably may be. drawn from the undisputed testimony presented in this case are consistent with and support the ultimate conclusion that appellant’s cause of action against appellee is barred by the doctrine of charitable immunity, and that no other reasonable conclusion could have been reached by the Trial Court.

The judgment is affirmed.


author: GRISSOM, Chief Justice.

text:
    PARKER SQUARE STATE BANK et al., Appellants, v. TRIANGLE SUPPLY COMPANY et al., Appellees.
    No. 3768.
    Court of Civil Appeals of Texas. Eastland.
    Jan. 25, 1963.
    Rehearing Denied Feb. 15, 1963.

      Lee Humphrey, W. H. Sanders, Ernest Robertson, Wichita Falls, for appellants.
    Ross H. Scott, Dallas, Jack Bryant, Raleigh. Brown, Abilene, Robert E. Bowers, Breckenridge, Mike Lee, Abilene, Ronald Stephens, Graham, Kenneth J. Wise, Wichita Falls, Gary Cole, Jr., Asst. U. S. Atty., Ft. Worth, H. G. Andrews, Jr., Stamford, Byron Scarborough, Ft. Worth, for appel-lees.
   GRISSOM, Chief Justice.

Wise and Steadham Drilling Company drilled many oil wells for Fletcher Oil & Gas Drilling Corporation. As each well was completed Wise and Steadham presented to Fletcher an invoice and it approved the account and agreed that it should be assigned to a designated assignee. Although payment was due upon completion of each well, Fletcher ordinarily paid its accounts thirty to sixty days after an invoice was so presented and approved. In the meantime, to carry on their business, Wise and Steadham assigned the accounts to secure loans.

On March 15, 1961, Fletcher owed Wise and Steadham and their assignees $164,-690.99, evidenced by thirteen invoices which had been approved by Fletcher upon completion of thirteen wells by Wise and Stead-ham. On or before March 15th, all of said invoices and the accounts evidenced thereby had been assigned for a valuable consideration to Parker Square State Bank, City National Bank in Wichita Falls or Time Equipment and Supply Company. Said assignees and Triangle Supply Company, Carter Engine and Equipment Company, L. H. Strand and Kelley Supply Company, as garnishing creditors, United States of America, as a tax lien creditor, Tucker and Stephens Bulldozers, Inc., as a mechanic’s and materialman’s lien and judgment creditor, and others, as general creditors, claimed the money owed by Fletcher to Wise and Steadham or their assignees. Fletcher paid into court $54,624.77, and impleaded all of said parties for the purpose of having the court determine their respective rights to said funds. The District Court granted priority of right to receive such funds to said subsequent lien creditors in preference to Parker Square, City National and Time Equipment as to the assignments which had not been filed for record. In other words, the court held that the lien creditors who fixed their liens after said assignments had been delivered had a right to said funds over the assignees because notice of the assignments had not been filed for record. Parker Square State Bank, City National Bank and Time Equipment and Supply Company have appealed.

The principal question presented is whether the lien creditors who acquired liens after delivery of valid written assignment of the accounts, acquired rights to the funds superior to that of the assignees because the assignees had not filed notice of their assignments. This question must be determined by an interpretation of Article 260-1, Vernon’s Ann.Civ.St., which provides in Section 2 that assignments of accounts may be protected by execution and delivery of written assignments and by filing notice thereof. Section 6 provides that

“Whenever any person * * * shall in good faith take a protected assignment of any account * * * all creditors of, and all subsequent assignees, purchasers, and transferees of or from the assignor shall be conclusively deemed to have received notice of such assignment, dating from the time of the filing for record of the notice of assignment hereinabove provided ; and after such filing for record, no purchaser from the assignor, no creditor of any kind of the assignor, and no prior or subsequent assignee or transferee of the assignor, holding an assignment not protected, or holding as assignment under a notice of assignment subsequently filed for record, shall in any event have, or be deemed to have acquired, any right in the account * * so assigned or in the proceeds thereof, or in any obligation substituted therefor, superior to the rights therein of the assignee named in such prior protected assignment.”

In Section I an “account” or “account receivable” is defined so as to exclude therefrom the right to payment of money secured by a chattel mortgage or any other instrument which may be filed for record and the assignment of rights subject to special statutory provisions of the State or Federal Government relative to the rights of creditors or successive assignees.

Prior to the enactment of Article 260-1, the law in Texas was, as to the rights of assignees, that the first in point of time had the superior right. This seems to have been the majority view in the United States. Some states, notably Pennsylvania and California, adopted the English rule that the first assignee to give notice to the debtor had the prior right. Under the common law in Texas, if the contract was in existence at the time of the assignment, no creditor of the assignor could acquire rights therein superior to that of a prior assignee, regardless of notice to the debtor. Hess & Skinner Engineering Company v. Turney, 110 Tex. 148, 216 S.W. 621, 623, 25 Tex. Law Rev. 607. Unless there has been a failure to comply with a recording statute enacted for the protection of creditors, generally, an assignee takes priority over a subsequent lien creditor of the assignor who had no lien at the time the assignment was made. 6 C.J.S. Assignments § 92, p. 1149. In 1855, the Texas Supreme Court held that Texas had no law either requiring or authorizing recording of assignments and that in the absence of such a statute the recording of an assignment did not give notice of its existence. 1 Burnham v. Chandler, Trustee, 15 Texas 441, 443. In 1943, the United States Supreme Court in Corn Exchange National Bank v. Klauder, Trustee, 318 U.S. 434, 63 S.Ct. 679, 87 L.Ed. 884, 144 A.L.R. 1189, held (in a Pennsylvania case, in which state, as between assignees, the law gave priority to the assignee who first gave notice of the assignment to the debtor,) that assignments of accounts which, by reason of failure to give notice of the assignment to the debtor, were, by local law, inferior to the rights of a subsequent assignee who gave notice, were preferences and inoperative against the assignors’ trustee in bankruptcy. It held that the amended bankruptcy act provided a new test for the purpose of striking down secret liens and included a failure to record which could be asserted by a bona fide purchaser or a lien creditor of the transferor against the transferee.

It has been said that as a result of that decision thirty-five states have enacted statutes for the protection of assignees and lien creditors against the trustee in bankruptcy, who then apparently had the rights of a bona fide purchaser or lien creditor. Some statutes clearly provided that an assignee’s failure to record notice of his assignment enabled a creditor to establish superior rights by garnishing the account, “and that is the critical test adopted in the Bankruptcy Act.” 53 A.L.R.2d 1392, note. In a note in 246 F.2d at page 810, it is stated that the Bankruptcy Act was amended in 1950 to remove the threat that an assignment might be vulnerable to a claim by a trustee — as a preferential transfer merely because a subsequent assignee could attack it and that such amendment restored assignments to their pre-section 60 status in respect to a claim by a trustee in bankruptcy. The California Statute expressly provides that no assignment shall be valid against creditors or subsequent assignees without notice unless the assignment is recorded. With reference to that statute the court in Costello v. Bank, 246 F.2d 807, 811, said: “Actual notice to the obligor, which hitherto sufficed, was no longer enough. The statute also revised existing law as it related to creditors of the assignor. It placed such creditors in the same position vis-a-vis the first assignee as successor assignees in respect to priority of rights. This was more than Klauder compelled for it had long been the law in California that a non-notifying as-signee was entitled to priority over creditors of the assignor. Thus, the 1943 statute required the assignee to file the assignment to perfect his rights as against both subsequent assignees and creditors of the assignor.” '

In Keeran v. Salley, Tex.Civ.App., 244 S.W.2d 663, 666, (Writ Ref.), Keeran, a construction contractor, assigned to the Alice Bank a debt it expected Sun Oil Company to owe him by virtue of a contract not then in existence. Keeran employed Salley to do work in performing a contract Keeran later obtained from Sun. Notice of the assignment to the bank was filed for record. Thereafter, Salley sued Keeran for his debt and served a writ of garnishment on Sun. The right of the garnishing creditor to the money owed by Sun to Keeran was held superior to that of the prior as-signee. The reason was stated by Judge Norvell as follows:

“The filing of the notice of assignment of July 14, 1949, does not give the bank a prior right to the fund impounded by the writ of garnishment for the reason that the statute, Article 260-1, relating to assignment of accounts, defines the word ‘account’ or ‘account receivable’ as meaning, ‘an existing or future right to the payment of money presently due, or to become due under an existing contract: * * *.’ The contract which gave rise to the ‘account’ here involved was obviously not in contemplation when the notice was executed.”

It must be implied from this decision that it was believed that Article 260-1 had changed the rule that an assignee has priority over creditors who had no lien at the time the assignment was made, but that, because the assignment did not come within the definition in Article 260-1 of assignments which might be protected by recording, the recording of such an assignment did not protect the assignee against a creditor who subsequently fixed a lien by garnishment.

It was virtually so interpreted in Republic National Bank of Dallas v. Vial, 232 F.2d 785. That was a contest between an assignee and a trustee in bankruptcy over the right to collections from accounts assigned to the bank. The bank contended that by virtue of recorded notice of its assignment its rights were superior to that of the trustee in bankruptcy. The trustee objected to allowance of the bank’s claim as a secured claim because, among other reasons, the assignment was not protected under Article 260-1. The court held that because the account assigned to the bank was not in existence when notice of assignment was recorded that the bank’s assignment was not within the protection of Article 260-1. The decision was based upon Keeran v. Salley. The court said:

“This decision thus established the proposition that the filing of Notice of Assignment under Art. 260-1 protected only accounts which were in existence when the Notice was executed. This is dispositive of the issue here. Accordingly, we conclude that appellant did not acquire a valid lien on the disputed collections because none of the assignments of the accounts here involved was protected by the Notice of Assignments.
“We are also of opinion that appellant’s rights were inferior to those of the trustee because under the 1950 amendment to Section 60, sub. a (6) of the Bankruptcy Act, Congress provided that the recognition of equitable liens would be denied where, as here, available means of perfecting legal liens have not been employed. Consequently, under none of the assignments here at issue did the appellant acquire a lien on collections made during the four months period which was superior to that of the trustee.”

This case and the Keeran case are some justification for, if they do not compel, the conclusion that lien creditors now have rights superior to that of a prior assignee who has not recorded notice of an assignment which is within the protection afforded recorded assignments described in Article 260-1. After the decision in the Keeran v. Salley the Legislature, in 1955, amended Article 260-1, so as to include in the definition of “accounts” or “accounts receivable” the right to payment of money to become due under “future” contracts made during the effective period of the notice of assignment.

In Lawrence v. Delta Metals, Inc., 280 F.2d 86, 87, Delta Metals filed a claim in bankruptcy asserting it had a lien by reason of its assignment and by subrogation because funds assigned to it had been used to pay the bankrupt’s tax to the United States. The court said that Delta Metals did not have a right to be subrogated to the priority of the Government unless it had a lien upon the account which could have been asserted in bankruptcy; that it was not enough that the assignment was valid between the parties; that Article 260-1 provides for the protection of an assignment of an account by filing notice of the assignment but, because that statute was not complied with, there was no protected assignment and no lien which could be upheld in the administration of the bankrupt’s estate.

Unfortunately, we do not have the statutes in other states that are said to have been enacted as a result of the decision in Corn Exchange National Bank v. Klauder. However, we know from the decisions that Florida statute in clear language provides that the rights of lien creditors are superior to the rights of prior assignees who do not record notice of their assignments. In 53 A.L.R.2d 1392, we find this enlightening note:

“Likewise, the appellant’s contention that the Florida statute was not intended to protect creditors from secret, unrecorded assignments of accounts receivable, citing Wells v. Place, DCND Ohio, 92 F.Supp. 473, is rationally untenable in the light of the words of § 524.04(2):
“ ‘A protected assignee takes subj ect to: (a) Judicial liens on the account at the time his assignment became protected : (b) An assignment to another person which was protected before his assignment, except that an assignee takes priority over another assignee who files later than he did, regardless of the relative dates of their assignment.’
“We may judicially note that this statute, like those in 35 other states was adopted as a direct result of the Chandler Act amendment to § 60, sub. a of the Bankruptcy Act, 11 U.S.C.A. § 96, sub. a and its application in Corn Exchange Nat. Bank & Trust v. Klauder, 318 U.S. 434, 63 S.Ct. 679, 87 L.Ed. 884, 144 A.L.R. 1189. We incline to the view that the draftsmen of the Florida statute and the legislature were aware of the provision of the Bankruptcy Act then giving the trustee in bankruptcy the rights of any bona fide purchaser from or any creditor of the bankrupt. The effect of the language used by the legislature is to give the trustee in bankruptcy a better right than an unrecorded assignee of accounts receivable (as the statute defines them); and whether that was a primary motive of the legislature or not, such was clearly the Congressional intent in § 60, sub a. Wells v. Place, supra, is not in point, because the Ohio Statute involved there, Ohio Gen. Code § 8509-3, since amended, referred only to subsequent assignees and made no mention of creditors’ rights, as the Florida statute does. The Florida statute is clear that an assignee’s failure to record would enable an actual creditor of the assignor to establish superior rights by garnishing the account, and that is the critical test adopted in the Bankruptcy Act.”

Article 260-1 does not so clearly provide-that an assignee’s failure to record enables a creditor to establish superior rights by garnishing the account, or otherwise fixing a lien, but we think such was its purpose.

We are indebted to appellants for excellent briefs. Nevertheless, we are forced to the conclusion that the trial court correctly held that the rights of the appellants as to the accounts which they failed to file notice of their assignments were inferior to the rights of subsequent lien creditors.

In Scarborough v. Victoria Bank & Trust Company, Tex.Civ.App., 250 S.W.2d 918, 921 (Writ Ref.), it was expressly held that “a change is made in the common law rule as to priority of assignments of accounts. This was accomplished by a setting forth of a method whereby a notice of assignment could be filed in a public place and thus become ‘protected assignment.’ ”

Appellants contend that the judgment is contrary to the decision in Quinn v. Dupree, 157 Tex. 441, 303 S.W.2d 769, 775. Our Supreme Court did sustain the judgment of the trial court which held that the right of an assignee was superior to that of a subsequent garnishing creditor. The Court of Civil Appeals reversed and rendered judgment for the garnishing creditor, because it held the assignment was void as a matter of law. The Supreme Court discussed only that question and held that whether the assignment was void depended upon questions of fact which had been decided by the trial court and that its invalidity had not been established as a matter of law. The opinions do not disclose whether notice of the assignment was recorded. Article 260-1 was not mentioned. If the assignment was recorded our interpretation of the statute would require the judgment rendered by the Supreme Court. That court was careful to note, after deciding that the assignment was not void as a matter of law as held by the Court of Civil Appeals, “This disposes of all of the grounds upon which the Court of Civil Appeals reversed the judgment of the trial -court.” Perhaps, the Supreme Court was reluctant to interpret a statute when its interpretation was not called for by any point of error presented. (See Points 4 on which writ of error was granted in Mason v. Mason, Tex.Civ.App., 357 S.W.2d 442. The Texas Syllabi, January 16, 1963.)

Appellants say that the emergency clause of Article 260-1 and all its amendments show it was enacted for the benefit of banks, so that they could safely loan money on the security of assigned accounts. The statute does provide a way that an assignee may protect itself against subsequent assignees and lien creditors, that is, by filing notice of its assignment.

We have considered the cases cited by appellants and their forceful arguments. We think their cases may be distinguished as suggested in appellees’ briefs and that they do not require a conclusion contrary to that announced.

We have held that the rights of subsequent lien creditors are superior to the rights of assignees who fail to protect their assignments by filing notice thereof. This answers the claim of Parker Square and Time Equipment that the court erred in granting priority to the government’s tax lien over their prior unrecorded assignments. We agree with the further contention of the government that as a matter of federal law, since Texas requires recording to protect assignments against claims of subsequent lien creditors, the assignees’ liens were not sufficiently perfected or choate to prime a subsequent federal tax lien. United States v. Morrison, 247 F.2d 285, 288.

We think the court correctly held the parol transfer of an account to Time Equipment was not a sale but was an assignment.

Appellants complain because attorneys’ fees for the garnishee and attorney ad litem and other costs were ordered paid out of the fund. The garnishee, Fletcher, paid part of the money it owed Wise and Steadham into court, impleaded the assignees and lien creditors and asked the court to determine their respective rights to the fund. It was necessary for Fletcher to take that action. It had no duty to take the risk of determining which of the claimants was entitled to the money it owed Wise and Steadham. It properly employed attorneys, impleaded all claimants and paid the money into court. Texas Rules of Civil Procedure, rule 43. The lien creditors established superiority of their rights to the funds over the claims of appellants, as assignees. Appellants lost in the contest. We think appellants were not injured by the order as to costs and that the court did not err in ordering them paid out of the fund. Greer v. Franklin Life Ins. Co., 148 Tex. 166, 221 S.W.2d 857, 861.

All points lawfully presented have been considered and are overruled. The judgment is affirmed.


author: WILLIAMS, Justice.

text:
    George L. SHELTON, Jr., et al., Appellants, v. Theodore ECTOR et ux., Appellees.
    No. 16098.
    Court of Civil Appeals of Texas. Dallas.
    Jan. 25, 1963.

      C. B. Bunkley, Jr., Dallas, for appellants.
    Lefkowitz, Green, Ginsberg, Eades & Gilmore, Jack D. Eades, Dallas, for appellees.
   WILLIAMS, Justice.

Theodore Ector, and wife Doris Ector, brought this action in the nature of a trespass to try title suit against George L. Shelton, Jr., and Brady J. Jones. Plaintiffs asserted that they were the owners in fee simple of a lot located in Dallas, Texas, and that, on January 11, 1957, they had executed and delivered a warranty deed to defendants conveying all of their title and interest in said land in controversy, subject to a lien to secure the payment of a debt in the principal sum of $2,750.00, which sum defendants had advanced and paid, and also the assumption of the unpaid balance of a first lien note. Plaintiffs then contended that said deed was executed with the understanding and intention of the parties thereto that the same should be a mortgage to secure the money loaned and advanced by defendants and was not intended to operate as a warranty deed. Plaintiffs further asserted that it was never intended between the parties that said deed, absolute upon its-face, should pass title to the property and that plaintiffs executed said deed acting in complete reliance upon defendants verbal promise and assurance that the same was to serve only and solely as security for the debt created by the advances made to pay off pending debts of plaintiffs. Plaintiffs requested the court to set aside the deed and to construe the same as a mortgage.

Defendants answered with a plea of “not guilty” and a specific denial of the allegations of intent concerning the deed. Defendants alleged that plaintiffs had, following the execution of said deed, executed two lease agreements on the property in question and had breached the terms of said agreements. By cross action, defendants asserted their title to the property in question as evidence by the warranty deed and sought judgment for the title and possession of same.

At the conclusion of the evidence the case was submitted to the jury on two special issues and in response thereto the jury found (1) that the warranty deed in question was intended by the parties to be a mortgage; and (2) that such mortgage was to secure a debt in the sum' of $1,944.31. Defendants filed motion for judgment non obstante veredicto contending that there is no evidence, or that the evidence was insufficient, to support the jury’s answer to the two special issues and furthermore that the deed could not be construed as a mortgage, as a matter of law. Such motion was duly overruled and judgment rendered upon the jury verdict for plaintiffs.

In view of the nature of appellants’ points on appeal we deem it essential to briefly summarize the material testimony. The property involved had been owned by the family of Doris Ector, one of appellees, since 1881, and was partitioned to appellees in February 1954. Thereafter, in 1955, appellees borrowed $10,500.00, using the land as security and built a restaurant building on the property. Appellee Ector became involved in financial difficulties and sought the services of one J. H. Glenn, a real estate man, to aid him in finding someone from whom he could borrow money, using the property as collateral. Ector testified that Glenn referred him to appellants, Shelton and Jones, and that he contacted these two gentlemen seeking to borrow enough money to pay off approximately $2,500.00 in indebtedness which was apparently leather pressing. Ector, who is shown to have a fourth grade education, testified that during negotiations with appellants a sale of the property was not discussed hut that appellants told him that it would be necessary to go to a title company and draw up papers turning over the property as security for a two-year loan, plus a $1,-000.00 brokerag'e fee; that the only way this could be done was to transfer title to appellants, with a two-year option lease, so that they would know they were not going to get their money “messed up”. Appellants, appellees, Glenn, and appellants’ attorney met at the title company on January 11, 1957, and appellees signed the warranty deed. Ector did not receive any cash money from anyone at that time, but according to the closing statement of the title company the sum of $1,944.31 was advanced by appellants to the title company to be used in payment of appellees’ obligations and closing expenses. The first lien loan balance of $9,-407.78 was shown to have been assumed by appellants. No lease agreement was drawn up at that time although it was supposed to have been drawn up “right away” according to Ector. The lease agreement was finally drawn up in the office of appellants’ attorneys on January 28, 1957, and executed by Ector and his then partner, Hill, as lessees. This lease contained an option agreement to repurchase the property. Later a second lease, substantially identical to the first one, was executed on September 12, 1957, and also contained a repurchase agreement. Ector testified that he had not repaid the loan to appellants because they “put him out before the two years” agreed upon had expired. Ector’s wife, Doris Ector, also testified in substantial support of the testimony given by her husband.

The testimony of appellants, Shelton and Jones, and the witness Glenn, was in direct conflict in almost every detail with the testimony of Ector and his wife. Without detailing this testimony it is sufficient to say that all of these witnesses testified that the transaction was that of a sale and not a mortgage.

Appellants’ points one and two, briefed together, assert that the trial court erred in overruling and denying appellants’ motion for a judgment non obstante veredicto because the finding of the jury that the deed in question was intended to be a mortgage, and such mortgage was intended to secure a debt of $1,944.31, was "so against the weight and preponderance of the evidence as to be manifestly unjust.” (Emphasis supplied.)

We are immediately confronted with the procedural question of the sufficiency of these points to properly raise the question of the adequacy of the testimony to support the jury’s answers to the issues submitted. It is to be observed that appellants’ points-constitute an attempt to attack the action of the trial court in refusing to sustain their motion for judgment non obstante veredicto. These points do not question the failure or refusal of the trial court to-overrule any assignment contained in their motion for new trial. It is also interesting to note in the appellants’ motion for new trial no complaint is therein made of the action of the trial court in overruling their motion for judgment non obstante veredicto. Rule 418(b), T.R.C.P., provides that points on appeal must be germane to one or more assignments of error contained in the motion for new trial. Points of error not germane to any of the grounds of error specified in motions for new trial are considered waived. 3 Tex.Jur.2d para. 191, page 465; 4 Tex.Jur.2d, para. 658, pages 166-167; Buss v. Shepherd, Tex.Civ.App., 240 S.W.2d 382; Dyche v. Simmons, Tex.Civ.App., 264 S.W.2d 208. Accordingly, we are of the opinion that appellants’ points one and two, not being germane to any assignment of error contained in their motion for new trial, must be considered as waived.

Even if such points were to be considered as not being waived, yet we are of the opinion that appellants’ points one and two are fundamentally defective for the obvious reasons that said points challenge the trial court’s action in overruling their motion for judgment non obstante veredicto on the grounds that the jury findings sought to be set aside are “contrary to the great weight and preponderance of the evidence”. Any attack upon the action of the trial court in overruling a motion for judgment non obstante veredicto must, of necessity, constitute a “no evidence” point as opposed to an “insufficiency of the evidence” point. Rule 301, T.R.C.P., expressly provides that the trial court may render judgment non obstante veredicto “if a directed verdict would have been proper”. A directed verdict is only proper where there is no evidence to support the submission of an issue to the jury. To sustain a judgment notwithstanding the verdict, the reviewing court must determine that there was “no evidence” of probative force on which the jury could have made its findings. Burt v. Lochausen, 151 Tex. 289, 249 S.W.2d 194; Shelton v. Belknap, 155 Tex. 37, 282 S.W.2d 682; Crom v. Cameron County, Tex.Civ.App., 310 S.W.2d 664; Davidson v. Methodist Hospital of Dallas, Tex.Civ.App., 348 S.W.2d 400. Furthermore, the appellate court, in considering such “no evidence” point must weigh the question by considering only evidence favorable to the verdict and disregarding all other evidence. Todd v. Bruner, Tex.Civ.App., 349 S.W.2d 260; Shield Company v. Cartwright, Tex.Civ.App., 172 S.W.2d 108; Dallas Ry. & Terminal Company v. Bosher, Tex.Civ.App., 278 S.W.2d 357.

For an authoritative discussion of the often confusing question presented here, see the article by Chief Justice Robert W. Calvert entitled “No Evidence” and “Insufficient Evidence” 38 Texas Law Review, page 361, wherein he states that a point based upon or related to a motion for judgment notwithstanding the verdict is a “no evidence” point, and the fact that the point may -speak of “Insufficient evidence” or “not sufficient evidence” cannot make it otherwise. Accordingly, even if points one and two of appellants were not waived same must be considered by us as being “no evidence” points and therefore must fall because, as stated above, there was evidence before the trial court to amply justify the submission of the two special issues controlling this case.

We have gone further and reviewed the entire record within the purview of the rule laid down by our Supreme Court in re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, and find that we cannot say that the testimony revealed by the entire record is so contrary to the great weight and preponderance of the evidence as to be manifestly wrong. Appellants’ points one and two are overruled.

Appellants’ point four complains of the trial court’s action in overruling their motion for judgment non obstante veredicto because there is no evidence that the parties intended the deed to be a mortgage. While this point does present a “no evidence” point yet the same is waived because, as we have heretofore pointed out, appellants made no complaint of the court’s action in their motion for new trial. Even assuming the point to be properly raised, we cannot hold that there is no evidence in this record that the parties did not intend the deed to be a mortgage. The resume of the testimony above recited clearly demonstrates ample evidence in support of the submission of the issues to the jury. Appellants’ point four is overruled.

By their point three, appellants say that the trial court erred in overruling their motion for judgment non obstante veredicto since the deed in controversy, as a matter of law, cannot be construed as a mortgage. While this point is rather vague and indefinite we are able to determine from the argument in support of said point that it is appellants’ contention that since the evidence reveals no debt existing there can be no relationship of debtor and creditor between appellants and appellees and hence there can be no mortgage, as a matter of law. In support of this proposition appellants reveal that appellee Ector testified at one point during the trial that it was left up to him as to whether or not he would repay the money to appellants or let them keep the property. Appellants rely upon such cases as Young v. Fitts, Tex.Civ.App., 183 S.W.2d 186, and McMurry v. Mercer, Tex.Civ.App., 73 S.W.2d 1087, which hold that it is necessary that the relationship of debtor and creditor exist between the parties in order to constitute a mortgage. We do not disagree with the holding of these cases, but do find from this record that testimony of Ector relied upon by appellants does not conclusively establish the fact that no debtor creditor relationship existed between the parties. It is true that at one time during the cross examination of Ector he did testify that it was left up to him as to whether he would repay the indebtedness to appellants or let them keep the property. At another stage of his testimony, however, he stated positively that there was a debt owing by him and that he considered that he would bave to repay the same within two years. We think that his own testimony created an issue of fact which would have to be resolved by a jury. The jury resolved this question in favor of appellee Ector. The issue submitted to the jury was prefaced by an instruction by the court defining a mortgage which presupposed the existence of an indebtedness. We must therefore assume that the jury reconciled the conflict in favor of appellee Ector in the light of the Court’s instruction. Appellants’ third point is overruled.

By appellants’ fifth point complaint is made of the trial court rendering judgment because appellees have not tendered the payment of said alleged mortgage indebtedness. This question was not raised by proper assignment in appellants’ motion for new trial and is therefore not properly before this court. Appellants’ attorney candidly concedes in oral argument before this Court that this point does not comply with the rules and should be overruled. Therefore appellants’ point five is overruled.

Finding this record to be free from error, the judgment of the trial court is, in all things, affirmed.

Affirmed.


author: PHILLIPS, Justice.

text:
    LUMBERMEN’S INSURANCE CORPORATION, Appellant, v. The STATE of Texas, Appellee.
    No. 11037.
    Court of Civil Appeals of Texas. Austin.
    Jan. 23, 1963.
    Rehearing Denied Feb. 13, 1963.

      Henry Klepak, Dallas, for appellant.
    Will Wilson, Atty. Gen., Bob E. Shannon, Asst. Atty. Gen., Austin, for appellee.
   PHILLIPS, Justice.

This is an appeal from the 53rd District Court of Travis County, wherein the Attorney General of Texas, representing the State Board of Insurance, through a proceeding in quo warranto alleged that the appellant in this case, hereinafter referred to as Lumbermen’s, was insolvent and asked for certain injunctive relief, the appointment of a temporary receiver, and ultimately the cancellation of Lumbermen’s charter.

On March 12, 1962, the court issued a temporary restraining order, restraining Lumbermen’s from engaging in the insurance business and appointing a temporary receiver. On March 22, 1962, after a hearing, the temporary receivership was continued and a temporary injunction entered enjoining Lumbermen’s from engaging in the insurance business.

The hearing to make the injunction and' receivership permanent was held on the 8th and 9th of June, 1962, after which the-court found Lumbermen’s to be insolvent, that its liabilities exceeded its assets, that Lumbermen’s acted in violation of the laws of the State of Texas in investing its funds in the stock of a corporation which has not been in existence for five years, that the condition of the company was such so as to render the continuation of its business hazardous to the public. The Court further ordered that the receivership be made permanent, entered a permanent injunction which forbade Lumbermen’s from engaging in the insurance business in Texas, and •cancelled its charter and right to do business in Texas. In each of the above proceedings the receiver appointed by the Court was C. H. Langdeau, the Liquidator for the State Board of Insurance.

Lumbermen’s has appealed to this Court .assigning as error (1) the finding that the liabilities of the corporation exceeded its .assets, (2) that the corporation violated the laws of the State of Texas by investing its funds in the stock of a corporation which had not been in existence for a period of five years, (3) that a continuation of the • corporation’s business would be hazardous .to the public, (4) that the corporation was insolvent and in need of a permanent re- ■ ceiver, (5) that the Court erred in denying Lumbermen’s request to set the amount of the supersedeas bond so that the action and powers of the receiver could be suspended during the pendency of this appeal, (6) that the Court erred in denying Lumbermen’s motion for reasonable attorney’s fees out of the funds held by the receiver -so that the appellant could prosecute its .appeal without undue burden.

Lumbermen’s is a domestic stock fire and casualty insurance company organized and operating under the provisions of the laws of the State of Texas. The -corporation holds a certificate of authority from the State Board of Insurance, authorizing it to engage in the fire and casualty insurance business. The home office of the company is in Lufkin, Texas and the executive office is located in Dallas. Its president and principal managing officer is James D. Owens. It is not necessary, for the purpose of this appeal, to set out the tortuous process by which Owens acquired Lumbermen’s, suffice to say that when the receiver audited Lumbermen’s books he found that the book value of the company was $734,032.95 and that its liabilities were $1,347,422.43. The audit also showed that Lumbermen’s had purchased 9000 shares of stock in a certain T. A. Manning Company and claimed the value of these shares to be $969,000. Lumbermen’s carried the claimed value of this T. A. Manning stock on its books as an asset which, if allowed by the receiver, would have made the book value of the company greater than its liabilities. The receiver, however, disallowed the value of the Manning stock in toto under the provision of Article 2.10(5) of the Insurance Code, V.A.T.S. authorizing investments :

“5. In the stocks, bonds, debentures, bills of exchange or other commercial notes or bills and securities of any solvent dividend paying corporation at time of purchase, incorporated under the laws of this State, or of any othet State of the United States, which has not defaulted in the payment of any of its obligations for a period of five (5) years, immediately preceding the date of the investment.” (Emphasis added)

We hold that the action of the Trial Court in disallowing the value of the T. A. Manning Company stock as an asset 'of Lumbermen’s was correct. There is no dispute over the fact that the T. A. Manning Company had not been in existence for a period of five years preceding the investment. In Kansas City Title Insurance Co. v. Butler, Tex.Civ.App., 265 S.W.2d 154, error refused, n. r. e., this Court held with reference to the five year provision of former Article 3.39(4) of the Code which is virtually verbatim with present Article 2.10(5) of the Code:

“[W]hen we examine the statutes with reference to investments by life insurance companies we find that no investment may be made by such companies in the capital stock of a private corporation unless such corporation is solvent, has been in existence for five years next preceding such investment and has not defaulted in the payment of a debt during such time. Sec. 4, Art. 3.39, Insurance Code.
“The Title Building Company not having been in existence five years when appellant invested in its stock such stock was not admissible as an investment for life insurance companies and hence could not have been admissible as an investment by title insurance companies under Arts. 9.07 and 9.11, supra.” (Emphasis added)

Lumbermen’s is not a life insurance company, however Article 2.10(5) of the Code is a reenactment of former Article 4706 R.C.S. The five year provision was written into Article 4706 by a statute passed in 1941 (S.B. 82, Acts of the 47th Leg., R.S., p. 564).

Soon after this statute was passed, the then Chairman of the State Board of Insurance Commissioners asked the Attorney General to define the five year provision requirement in Article 4706, subdivision (d) as amended in 1941, and on July 7, 1942,-the Attorney General in opinion No. 0-4295A answered as follows:

“The 1941 amendment to Article 4706 therefore requires in addition to solvency and dividend payments a five year period of corporate existence during which the corporation has paid all of its obligations before the stock or commercial paper of such corporation shall be eligible as a source of investment for funds of fire and casualty insurance companies over and above their paid-up capital stock.” (Emphasis added)

This being the construction that was given to Article 4706, such construction was continued when that article was reenacted without substantial change as part of the present Insurance Code. This holds true even though the construction was made by an executive officer other than a court. See 39 Tex.Jur., 266-268.

Since the receiver correctly disallowed the T. A. Manning Company stock as an asset of Lumbermen’s, the record clearly shows that the liabilities of the company greatly exceeded its lawful assets and the Trial Court correctly found that Lumbermen’s was insolvent, in need of a permanent receiver and that a continuation of the corporation’s business would be hazardous to the public.

The Texas Insurance Code empowers the Court to appoint the statutory liquidator as receiver to take charge of the assets of the company and proceed with the company as the Court may direct:

“Whenever under the laws of this State a court of competent jurisdiction finds that a receiver should take charge of the assets of an insurer domiciled in this state * * * ” Art. 21.28, Section 2(a).

The action of the Attorney General in behalf of the Board of Insurance was correct, John L. Hammond Life Insurance Company et. al. v. The State of Texas, Tex.Civ.App., 299 S.W.2d 163, writ ref., n. r. e.

With respect to Lumbermen’s motion to supersede the judgment, we are of the opinion that the judgment of the District Court was one which may be suspended pending the appeal by the filing of a super-sedeas bond, Rule 364, 368, Tex. Rules of Civil Procedure. This point is well settled in Texas. See Houtchens v. Mercer, 1930, 119 Tex. 431, 29 S.W.2d 1031, 69 A.L.R. 1103; Waters-Pierce Oil Co. v. State, 107 Tex. 1, 106 S.W. 326. While these cases dealt with former Articles 2270 and 2275, rules 364 and 368, cited above, were copied practically word for word from said articles and the reasoning relative to the construction given laws reenacted with the same language, set out above in this opinion, applies here.

While the denial of supersedeas on the part of the Trial Court was error, we believe that the sustaining of this point does not require a reversal of the order granting the receivership. Brown v. Faulk, Tex.Civ.App., 231 S.W.2d 743, no writ history. The entire record has been reviewed by this Court, we have approved the finding of the Trial Court that Lumbermen’s is insolvent, that its liabilities exceeded its assets, and have approved the judgment of the Trial Court in placing the company in receivership, enjoining it from engaging further in the insurance business and can-celling its charter. In other words, at this stage of the proceedings, the question of supersedeas has become moot.

We hold that the Trial Court correctly overruled Lumbermen’s motion that the receiver be directed to pay an attorney’s fee and the appeal costs. There is no specific statutory authority for the Court to grant attorney’s fees as an expense in a receivership proceeding such as this and we have not been able to find any cases on this point in Texas. We adopt the general rule in other States that where an application has been made for the appointment of a receiver for a corporation, attorney’s fees as expenses in resisting such application, if made in good faith and upon reasonable grounds, may become a valid claim against the receiver. Whether such attorney’s fees and expenses are to be allowed rests in the sound discretion of the Court, in view of all the facts and circumstances. See Annotation in 89 A.L.R. 1531, and the cases cited therein.

We hold that attorney’s fees and other expenses of litigation are claims against the receiver and as such should be dealt with as any other claims under Article 21.28, Sec. 3 of the Insurance Code.

Affirmed.

      . “May invest its capital, surplus and contingency funds over and above the amount of its policy reserves .in the capital stock, bonds, bills of exchange, or other com-mereial notes or bills and securities of any solvent corporation which bas not defaulted in the payment of any debt ■within five (5) years next preceding such investment * ⅜ * ”