author: SHORT, P. J. CURETON, O. J.

text:
    CITY OF WICHITA FALLS v. MAULDIN et ux.
    No. 1232—5606.
    Commission of Appeals of Texas, Section B.
    June 10, 1931.
    Harris & Martin, of 'Wichita Falls, for plaintiff in error.
    George & Brannan, of Wichita Falls, for defendants in error.
   SHORT, P. J.

The defendants in error, who are husband and wife, and the owners of a certain town lot in the city of Wichita Falls, whereon there was situated a residence furnished with household and kitchen furniture and occupied by the owners, recovered a judgment against the plaintiff in error in the sum of $525 as damage to their property from surface flood waters caused to be thrown thereon by the alleged negligent acts of the plaintiff in error in grading and paving certain streets and cutting a certain ditch, into which the surface waters were diverted from their natural channel, which consisted of a drain located in the neighborhood of the property belonging to defendants in error, which had been sufficient, before the negligent acts done by the plaintiff in error, to carry off the surface flood waters without damage to defendants in error’s property. There was a jury trial, and the court submitted special issues, upon the answers to which the judgment is based. From this judgment the plaintiff in error carried the case to the Court of Civil Appeals at Port Worth, where the judgment of the district court was affirmed. 23 S.W. (2d) 771. The writ of error was granted upon the conflicts alleged.

The petition of the defendants in error alleges, and their testimony shows, that on several occasions these _ surface flood waters overspread their premises and rose above the floor of the dwelling from four to eight inches deep, injuring the floors, walls, papering, and the underpinning of the house, and damaging its contents in the way of rugs, furniture, clothing and pictures. The articles inside the house, of a personal nature, which were damaged, and in some cases destroyed, while not itemized in the petition, were specifically stated in the testimony, together with the estimated damage to each, aggregating more than the sum alleged as damages to the personal property, according to the findings of fact by the Court of Civil Appeals. The damage to this property is alleged to have been $250, which, deducted from the amount recovered, would leave the remainder of the damages to the house, fences, and the lot itself to be $275. These latter damages were not specifically stated, but wo think, the testimony is sufficient to justify the finding of fact, by the jury, that this $275 is a conservative estimate of the injuries inflicted upon the house, the fences, and the lot itself, by these surface flood waters, as evidently the Court of Civil Appeals so found.

According to the maps introduced by the parties, these surface flood waters, gathered from the watershed, were collected into a natural drain apparently commencing at the southeast end of Holliday street, which street extended to the northwest, and the general course of the drain was southeast. It crossed Twenty-First street, which ran east and west where that street intersected Princeton avenue, and entered the northwest corner of the block, traversing in an easterly direction the whole of that block, and crossed Broad avenue to the north of the injured premises, and thence southeasterly to a creek, where it emptied its waters, passing the premises to the east. Defendants in error’s premises are located on Broad avenue, which runs north and south, some 200 feet south of where Broad avenue intersects Twenty-First street. The plaintiff in error graded Twenty-First street, and paved Broad avenue, and in doing so it cut a ditch running east from the point where the drain intersected Princeton avenue and Twenty-First street, approximately 300 feet; thence south down Broad avenue to an alley running east; thence east through said alley approximately 165 feet; thence south through another alley to the point where the drain crosses said alley; thence across said drain in a southeasterly direction where it again intersects the drain, the effect of which was to divert the waters from the drain, as they originally flowed, into this ditch, and evidently on account of the turning of the waters at right angles at three different places, the flow of the waters was retarded, so that, by the time they reached the vicinity of the northeast corner of the premises belonging to the defendants in error,' they left the ditch towards the west, and overflowed these premises, which were lower than the ditch. The gist of the cause of action, asserted by the defendants in error, is that the plaintiff in error had negligently diverted this water from its natural flow through the drain, and caused it to invade their property, by the grading of Twenty-First Street and the cutting of the ditch, the defendants in error claiming that, while the plaintiff in error had the right to grade the street, as it did, it was its duty to use ordinary care in the handling of the surface flood waters which previously had flowed through the drain, and that, by grading the street and cutting the ditch in the manner it did, they were guilty of negligence.

While the plaintiff in error has assigned many errors alleged to have been committed by the trial court, its chief contention -is that, in doing what it did, it acted as an agency of the state, and that, in the exercise of its powers to grade streets and to provide drainage or sewerage, a municipal corporation does not become liable for the damage caused by the overflow of surface water. In this connection the plaintiff in error also contends that the water diverted into the ditch from the drain was the same water which would have flowed down the drain had the ditch not diverted it, and, that being true, it was within its rights in handling the water as it did, since it had the discretion to grade its streets according to its best judgment. Its contention is thus stated in the quotation from the opinion in Lessenger v. City of Harlan, 184 Iowa, 172, 168 N. W. 803, 804, 5 A. D. R. 1523: “A city is authorized under our statute to bring its streets to grade. This involves the idea of lowering or raising them above the natural level of the ground at points where the necessities of travel demand a lowering or raising. It has the power to open, grade, and improve its streets, and this involves grading, paving, and guttering. In determining the necessity for these, it acts in a legislative capacity, and is not answerable for error of judgment in this respect. * * * Where a city has authority, under the statute, to do a particular thing, through its properly constituted officers, it cannot be held liable to a citizen for consequences that follow the doing.”

In the first place, we do not think that the plaintiff in error was acting in the capacity of a governmental agency when it graded Twenty-First street and cut the ditch. It is true it had the right to do both, but, in exercising this right, it acted by virtue of its charter powers just as any other corporation would act within the scope of its power to do so. While the charter of the plaintiff in error gave it exclusive authority. over its • streets, with the right to grade them as it saw fit, the law does not authorize a municipal corporation, such as this is, to exercise this power in such a negligent way as to inflict damage upon the property of a private individual.

Section 17, art. 1, of the Constitution, provides that “no person’s property shall be taken, damaged or destroyed for, or applied to, public use without adequate compensation being made, unless by the consent of such person.” This section of the Constitution is discussed and construed in Fort Worth Improvement District No. 1 v. Fort Worth, 106 Tex. 148, 158 S. W. 164, 48 L. R. A. (N. S.) 994; McFaddin v. Jefferson County Drainage District No. 6 (Tex. Com. App.) 4 S.W.(2d) 33, 36; Railway Co. v. Fuller, 63 Tex. 467; Railway Company v. Hall, 78 Tex. 169, 14 S. W. 259, 9 L. R. A. 298, 22 Am. St. Rep. 42; Powell v. Railway Company, 104 Tex. 219, 135 S. W. 1153, 46 L. R. A. (N. S.) 615. The more recent decisions of our appellate courts are in harmony in holding that cities which are defined, under the law, as governmental agencies, are responsible for damage to a person’s property inflicted in the pursuance of their acts and functipns primarily for the benefit of those within the corporate limits of their municipality. Brewster v. City of Forney (Tex. Com. App.) 223 S. W. 175; Hidalgo Water Improvement District No. 2 v. Holderbraum (Tex. Com. App.) 11 S.W. (2d) 506; City of Forth Worth v. Wiggins (Tex. Com. App.) 5 S.W.(2d) 761; Ostrom v. City of San Antonio, 94 Tex. 523, 62 S. W. 909; White v. City of San Antonio, 94 Tex. 313, 60 S. W. 426.

Of course, a municipality is exempt from liability for injuries inflicted in the discharge of duty imposed upon it as an agency of the state, in the exercise of a governmental function for the public benefit, but this function must be strictly construed, and the benefit must be for the sole benefit of the public. The testimony in this case shows that, before this street was graded and this ditch was cut and the water thereby diverted from its natural flow, the drain through which it passed was sufficient to carry it off without doing any damage to the premises belonging to defendants in error, and -that, .after the work had been done upon the street by grading it and the cutting of the ditch in the' manner shown by the testimony, these waters, which had aforetime flowed harmlessly by the premises of the defendants in error, in times of flood, such as the testimony shows occurred when these damages were inflicted, flowed across and stood upon the lot belonging to the defendants in error to such a depth as it arose as high as eight inches above the floor of the house. Had there-been no direct testimony, as there was, to the effect that this damage was the result of the negligence of the plaintiff in error in constructing the ditch and grading the street, this fact alone would have been sufficient to have justified the jury in concluding that the plaintiff in error had been negligent in the manner by which it diverted these surface flood waters. The jury found that the paving of Broad street and the grading of Twenty-First street, as well as the manner in which the plaintiff in error disposed of the accumulated surface flood waters, was negligence, and that this negligence was the proximate cause of the damage done to the property of the defendants in error, and that the amount of this damage was $525.

When the plaintiff in error cut down the grade of this street, as it did, then it became incumbent upon it to provide another channel to care for the water thus diverted, in such a way as that the property of the defendants in error would be protected from damage, inasmuch as the testimony shows that these waters, when allowed to drain themselves naturally, had not inflicted any such damage in the past. The diverting of water from its natural channel, and throwing it upon the property of another, to his prejudice,' creates a liability for damage against him who does so in favor of the party so prejudiced. The plaintiff in error has the exclusive right to grade its streets and pave them, but, in the exercise of this right, it is incumbent upon it to do so by exercising ordinary care to avoid injuring the property of its citizens. The testimony in this case shows that the plaintiff in error did not exercise this care in this instance, and, under the rules of common justice, it should be compelled to respond in damage for the consequences of its negligence. The exemption of a governmental agency from liability pertains only to its acts or functions, which are performed as the agent of the state in furtherance of the- general law, for the interest of the public at large, as distinguished from those acts and functions intended primarily for the benefit of those within the corporate limits of a municipality. McQuillan on Municipal Corporations (2d Ed.) vol. 6, §§ 2792 and 2793. The city of Wichita Falls, under the facts of this case, does not come within this rule. The acts ‘done, of which complaint is made, were not done in the furtherance of a strictly governmental function solely for the public benefit, but were done primarily for the benefit of that portion of the public within the corporate limits of the city.

The writ of error was granted in this case on account of the facts alleged that the opinion of the Court of Civil Appeals is in conflict with other decisions on the subject we have been discussing. As we construe the opinions in the cases cited, there is no such conflict as is alleged, with the possible exception of that rendered in Wallace v. Oity of Dallas, 2 Posey, Unrep. Oas. 424. We do not find it necessary to discuss the opinion in that case, for the reason that the opinion in Posey’s Unreported Oases are not regarded as authority by the Supreme Court of this state. The rule is well settled now in Texas that, where- the proximate cause of damage to the citizen is not the- governmental plan adopted by the city, hut is a-negligent carrying out of such plan, the city is liable, not for adopting or carrying out the plan, but for the negligent execution of it. The principle announced in the case of the City of Galveston v. Posnainsky, 62 Tex. 118, 50 Am. Rep. 517, which is in harmony with the principle upheld in this case by the Court of .Civil Appeals, has been repeatedly approved by the Supreme Court,. and is quoted with approval in White v. City of San Antonio, 94 Tex. 313, 60 S. W. 426, and in Ostrom v. City of San Antonio, 94 Tex. 523, 62 S. W. 909, and in Cawthorn v. City of Houston, 231 S. W. 701, the latter opinion be-1 ing by the Commission of Appeals, which is expressly approved by the Supreme Court. This principle is also rather elaborately discussed by Judge Speer of this section of the commission in the casé of the City of Port Worth v. Wiggins, 5 S.W.(2d) 761.

While there are other assignments of error presented in the application for the writ of error, in view of the elaborate discussion by the Court of Civil Appeals of the matters presented, wherein it reached a correct conclusion under the facts of this ease, it is unnecessary to discuss any of them, being of the opinion, that all of them should be overruled.

We recommend -that the judgment of the Court of Civil Appeals aflirming that of the district court be aflirmed.

CURETON, O. J.

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


source: Caselaw Access Project

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

license: Public Domain

text:
    CAVERS et al. v. SIOUX OIL & REFINING CO. et al.
    No. 1446—5674.
    Commission of Appeals of Texas, Section A.
    June 10, 1931.

      Bonner, Bonner & Childress, Virgil Child-ress, Gerald L. Coffey, and Wm. N. Bonner, all of Wichita Falls, and Lyndsay D. Hawkins, of Breckenridge, for plaintiff in error Banner Oil Corporation.
    H. R. Wilson, of Fort Worth, for Victor Jeep and others.
    Oarrigan, Britain, King & Searles, of Wichita Falls, for J. A. Cavers and others.
    Fitzgerald & Hatchitt, of Wichita Falls, for Humble Oü & Refining Co.
   SHARP, J.

On December 11,1925, in cause No. 17285-0, J. A. Cavers instituted this suit In the district court of Wichita county against Sioux Oil & Refining Company, to recover on a note for $5,500 due December 14, 1921, and further sought to recover a foreclosure of the deed of trust lien on an undivided interest in an oil and gas lease on 52 acres of land in Stephens county, Tex.

The controversy is over the proceeds of a certain 32.39 per cent, interest in an oil lease in Stephens county. On June 16, 1924, Kloke Investment Company, W. A. Reddick, and Herman Reinboldt, with the National' City Bank of New York and others, procured a judgment in cause No. 4655 entitled National City Bank of New York et al. v. Sioux Oil & Refining Company, in the district court of ■Stephens county, foreclosing a lien dated November 1, 1922, on the property in question, and same was sold at sheriff’s sale on August 5, 1924, to William H. Barker. William H. Barker conveyed the property in controversy to Banner Oil Corporation on September 30, 1924. The foreclosure by the National City Bank et al. was upon deeds and mortgages executed by the Sioux.Oil & Refining Company, and it appears that this company had in 1920 executed to Kloke Investment Com--pany, trustee, a conveyance of the premises which was recorded, and at the same time there had been executed between said parties another instrument usually referred to as “accompanying letter,” and which latter instrument was not recorded for about a year after Banner Oil Corporation acquired its title, and in which letter it was provided that the conveyance to Kloke Investment Company was for the purpose: “To secure all loans made by and through your company to the Sioux Oil and Refining Company and to secure all endorsers on such potes as the Sioux Oil and Refining Company may make for said loans.”

It further appears that early in 1920, J. A. Cavers and some twenty or more others had advanced about $100,000 through Kloke Investment Company to Sioux Oil & Refining Company under the terms of an instrument, whereby after six months tho'se advancing the money had the option of taking stock or notes in the Sioux Oil & Refining Company, and if notes were taken they would be secured by the conveyance in trust to Kloke Investment Company of an interest in the lease. The so-called “accompanying letter”, addressed to the Sioux Oil & Refining Company is signed by Sioux Oil & Refining Company and Kloke Investment Company, and, after referring to the foregoing assignment, says: “The said assignment is made to you to be held in escrow as collateral security to secure all loans made by and through your company to the Sioux Oil and Refining Company and to secure all endorsers on such notes as the 'Sioux Oil and Refining Company may make for said loans.”

It further appears that early in September, 1925, the Banner Oil Corporation, whose title was then duly recorded and who was in open possession of the lease, operating the same, gave notice to all parties that it claimed the lease entirely, and that the notes of Cavers and others either had been paid, were void, or were barred by the statute of limitation.

•In August, 1926, Banner Oil Corporation filed a suit in the district court of Stephens county, Tex., No. 7239, against Kloke Investment Company, to cancel .the instruments above mentioned and to quiet its title. Thereafter Banner Oil Corporation was made a paxdy to certain suits and interventions in Wichita county, filed by Cavers, Jeep, and 'others, and it was agreed that the suit by the Banner Oil Corporation in Stephens county, having first been filed, should t>e first tried, and the suit in Stephens county was tried on January 27, 1927, and judgment rendered for Banner Oil Corporation “against Kloke Investment Company, Kloke Investment Company, Trustee, and any and every one whomsoever claiming by, through or under them or either of them.” The Kloke Investment Company excepted to this judgment and gave notice of appeal, but no appeal was perfected. It further appears from the record that Jeep and others had left their affairs pertaining to this matter to Kloke Investment Company; that Kloke Investment Company had at hand $4,000 which it retained for expenses, and that with the knowledge and consent of Cavers, Jeep, and others, employed the same attorneys to defend the suit brought by Banner Oil Corporation in Stephens county, and tq file a suit on their notes to foreclose their lien in Wichita county.

The judgment in Stephens county in cause No. 7239 was pleaded by Banner Oil Corporation in bar of the suit of Cavers et al. in Wichita county, and the plea of res adjudi-cata urged' by Banner Oil Corporation was sustained.

The case was tried before the court without a jury. The trial court heard testimony upon the issue, and the plea in bar of Banner Oil Corporation was sustained. The judgment was rendered for the Humble Pipe Line Company on the merits, and J. A. Cavers and interveners took nothing, except as against Sioux Oil & Refining Company who had signed the notes. An appeal was made to the Court of Civil Appeals at El Paso, and that court reversed and remanded the case to the district court of Wichita county for another trial. 23 S.W.(2d) 421. We refer to the opinion of the Court of Civil Appeals for a more detailed statement of the facts pertaining to some of the questions involved in this appeal. Writs of error were granted by the Supreme Court.

Banner Oil Corporation contends that the Court of Civil Appeals erred in not affirming the judgment as to W. A. Reddick and Herman Reinboldt, because the records conclusively show that they had no cause of action against t^e Banner Oil Corporation for being members of pool No. 2, described in the instrument dated November 1,1922, which expressly gave them a lien, and they joined plaintiffs for foreclosure of that lien in cause No. 4655, National City Bank et al. v. .Sioux Oil & Refining Company, in the district court of Stephens county and foreclosed that lien, and their interests in that instrument became merged in the judgment in that cause and, as a matter of law, their foreclosure of that lien on the lease in question gave the purchaser, under a judicial sale thereunder, an absolute title as against any other lien which they had or claimed.

The pleadings are voluminous, and same will be recited in connection with the discussion of the issues.

On November 1, 1922, Sioux Oil & Refining Company and the Northern Trust Company. executed an instrument styled “Agreement and Conveyance in Trust,” and described the creditors in two pools; those in pool No. 1 and those in pool No. 2. W. A. Reddick and Herman Reinboldt appear in one or both pools.

In the petition filed in suit No. 4655, National City Bank et al. v. Sioux Oil & Refining Company, in the district court of Stephens county, Reddick, Reinboldt, and Kloke Investment Company are listed among the plaintiffs filing same. In our opinion, they were parties to that suit, and the judgment rendered in that case merged the claim of Red-dick, Reinboldt, and Kloke Investment Company therein. Vieno v. Gibson, 85 Tex. 432, 21 S. W. 1028, 1029; Gutta-Percha & Rubber Mfg. Co. v. Mayor, etc., of Houston, 108. N. T. 278, 15 N. E. 402, 2 Am. St. Rep. 412; Watson v. Chicago, R. I. & P. R. Co., 169 App. Div. 663, 155 N. Y. S. 808; United States v. Price, 9 How. 83, 91, 94, 13 L. Ed. 56, 59, 60; Hamer v. New York Railways Co., 244 U. S. 266, 37 S. Ct. 511, 61 L. Ed. 1125.

Judge Gaines, in the case óf Yieno v. Gibson, supra, after holding, in effect, that a person holding several liens upon the same property can have but one foreclosure, in the absence of anything in the decree reserving or protecting his rights, says: “That the purchaser at a sale under such a decree takes the land discharged of the lien of the second note is affirmed by the text writers, and the doctrine is sustained by an almost, if not quite, unbroken' line of adjudicated cases. Wilts. Mortg. Eorec. § 494; 2 Jones, Mortg. § 1459; 8 Amer. & Eng. Ency. Law, note, page 196; West Bank v. Chester, 11 Pa. 282, 51 Am. Dec. 547; Poweshiek County v. Dennison, 36 Iowa, 244, 14 Am. Rep. 521; Kimmell v. Willard, 1 Doug. (Mich.) 217; Miles v. Skinner, 42 Mich. 181; Smith v. Smith, 32 Ill. 198; Standish v. Vosberg, 27 Minn. 175, 6 N. W. 489; Fowler v. Johnson, 26 Minn. 338, 3 N. W. 986, 6 N. W. 486; McLean v. Presley, 56 Ala. 211.”

We sustain this contention.

This brings us to the consideration of another question. Was the judgment of the district court rendered in cause No. 7239, entitled Banner Oil Corporation v. Kloke Investment Company, in Stephens county, res adjudicata of the matters alleged in this cause in the district court of Wichita county, Tex.?

This record tends to show that the attorney for the defendants in error in acting for them agreed that this action pending in the district court of Wichita county should be stayed and held until cause No. 7239 in Stephens county should be first tried, and when the attorney representing the defendants in error knew and, through whom, his clients knew from the pleadings then on file in the district court of Wichita county that it was claimed and alleged that the judgment in Stephens county would be a bar and res ad-judicata of and to this suit. The record further tends to show that said attorney well knew the issues involved in- the suit in 'Stephens county, and L.* S. Clark, president of ■the Kloke Investment Company, and trustee, had in fact advised part, if not all, of the parties of the pendency of the suit in Stephens county and the issues involved, and the claims there made by Banner Oil Corporation; that Clark received a letter from the Banner Oil Corporation, stating that the said Banner Oil Corporation claimed said lease entirely, and that Clark had advised a part, if not all, of said parties that they would get no further money from the lease, because of the claim made by the Banner Oil Corporation; that skid parties, or part of them, for whom Clark had acted in the matter, instructed him to proceed and take care of their interests, and left in his hands $4,000 expense money, and that he employed an attorney to take care of their interests, and that the attorney, in undertaking to do so, instituted this suit in Wichita county rather than answer the suit previously filed by Banner Oil Corporation against Kloke Investment Company in Stephens county, Tex-.; that said attorney filed an answer in the suit pending in the district court of Stephens county in the name of Kloke Investment Company, and same was tried upon its merits, and the judgment was rendered by the trial court for the Banner Oil Corporation, quieting its title to the leasehold in question and, among other things, said judgment reads: “That Banner Oil Corporation be, and it is hereby, quieted in its title to an undivided 32.29% interest in the seven-eighths working, or oil and gas leasehold, interest in the following described fifty-acre tract of land, so that neither the defendant nor anyone claiming under it shall hereafter own or claim any right, title or interest there. * * * That said mortgage be, and the same is hereby cancelled, vacated, set aside, and held for naught, and that neither Kloke Investment Company, nor Kloke Investment Company, Trustee, nor anyone claiming under them, or either of them, now owns or has any right to assert any right, title, or interest in or to the oil and gas leasehold estate.” And the attorney representing Kloke Investment Company in the district court of Stephens county gave notice of appeal in that action after a trial at which Clark was personally present and testified, and various notes, mortgages, etc., claimed by the parties were introduced in evidence, and the trial court rendered judgment in favor of the Banner Oil Corporation, and the effect of that judgment was disclosed to part, if not all, of the parties, and no appeal was ever perfected from that judgment.

The record further discloses that the suit, entitled Banner Oil Corporation v. Kloke Investment Company, No. 7239, in the district court of Stephens county, was one to quiet title to the oil and gas leasehold in question, and in said petition it was specifically alleged “in November, 1920, said Sioux Oil and Refining Company, owning about 32.29% of the seven-eighths working interest in said-fifty-acre lease, executed what on its face purported to be an assignment to the defendant, Kloke Investment Company, as trustee.” That said conveyance from Sioux Oil & Refining Company to Kloke Investment Company was security for certain improvements which Kloke Investment Company “had advanced or claimed to have advanced to the Sioux Oil & Refining Companythat the mortgage or conveyance was of record in Stephens county, and forms a cloud upon the title of Banner Oil Corporation. The prayer in that petition was “that plaintiff (Banner Oil Corporation) have judgment cancelling and annulling all right, title or claim of Kloke Investment Company at any time held, asserted, or claimed by it against the fifty-acre oil and gas lease above described, and for judgment quieting this plaintiff’s title to said fractional working interest in said oil and gas lease.” Kloke Investment Company filed its answer, upon which it went to trial, and, among other things, says: “Further answering herein this defendant says that the assignment from the Sioux Oil & Refining Company to the defendant here is as mentioned in plaintiff’s petition, was an assignment to the defendant herein as trustee, and that the title to the property as described in plaintiff’s petition was conveyed to the defendant herein in trust. ⅜ * * That the defendant was merely a trustee and held the property described in plaintiff’s petition in trust for the benefit of the parties loaning various sums of money to said Sioux Oil & Refining Company. * * ⅜ That this defendant is only a trustee and cannot bind said parties.”

It was further alleged that the Sioux Oil & Refining Company had- executed its note to various persons including Kloke Investment Company,-J; A. Cavers, and others, and that suits had been instituted and were then pending in the district court of Wichita county fox the foreclosure of their liens. It was also alleged “that said assignment above mentioned was made to-this defendant to be held in escrow and collateral security to secure all loans made by and through the defendant to the Sioux Oil & Refining Company” and “that the defendant in this case was conveyed the property in controversy in trust for the purpose of securing valid liens of Henry Haubens, J. A. Cavers and many other individuals who had instituted suit in the district court of Wichita County, Texas, for the purpose of foreclosing their respective liens, etc., and that this defendant is only trustee.”

At the conclusion of said trial, after a hearing upon the merits of the case, the court rendered, a judgment in favor of Banner Oil Corporation and against the Kloke Investment Company and Kloke Investment Conrpany, trustee, quieting title of the plaintiff, Banner Oil Corporation, in and to said leasehold estate, which judgment was dated January 27, 1927, and constitutes the judgment pleaded in this case in bar and as res adjudicata, and further adjudged that the, plaintiff, Banner Oil Corporation, ought to have and recover from defendant, Kloke Investment Company, judgment in all things prayed for; that neither Kloke Investment Company, nor Kloke Investment Company, trustee, nor any one claiming under them now owns- or has any right to assert any right, title or interest in or to the oil and gas leasehold estate created and existing by reason of that certain oil and gas lease dated June 10, 1915, and further quieting title of the Banner Oil Corporation in and to an undivided-32.29 per cent, of the seven-eighths working interest in said lease.

Jt is now the settled rule in this state that when suit was filed in the district court of Stephens county, the jurisdiction of that court attached, with power to permit the pleadings to be amended and amplified, new' parties to he made, to determine all essential questions, and do any and all things with reference thereto authorized by the Constitution and statutes of this state.

Since jurisdiction attached upon filing the suit in the district court of Stephens county, the rule is elementary that it could not be taken away or arrested by the subsequent proceedings in another court.

It, therefore, follows that the district court of Stephens county, having first acquired jurisdiction, may exercise it to dispose of the whole subject-matter of the litigation and adjust all the equities between the parties. Cleveland et al. v. Ward et al, 116 Tex. 1, 285 S. W. 1063.

, ⅞ The authorities-announce two rules with ⅜ reference to necessary parties in a suit in-i' volving the powers of a trustee.

' In the case of Galveston, H. & S. A. Ry. Co. v. Butler, 56 Tex. 506, our Supreme Court says: “In Pomeroy on Remedies it is said: ‘There is a broad distinction between the case . of an action brought in opposition to the trust, to set aside the deed or other instrument by which it was created and to procure it to be declared a nullity, and that of an action brought ip furtherance of the trust, to enforce its provisions, to establish it as valid, and to procure it to be wound up and settled. In the first case the suit may be maintained without the presence of the beneficiaries, since the trustees represent them all and defend for them. In the second, all the beneficiaries must be joined, if not as plaintiffs, then as defendants, so that the whole matter may be adjusted in one proceeding and a multiplicity of suits avoided. The reason of this distinction is obvious. It is that any one person interested in opposition to the trust has a right to test the validity thereof, and his voluntary action cannot be controlled by the will of others, while the trustees themselves are sufficient to represent and defend . all the interests of those who claim under the trust. But when the trust is assented to and the purpose is simply to carry out its provisions, all the beneficiaries are alike interested in that object and in reaching that same result, and it is just to the trustee that the controversy should be ended in one proceeding.’ See also Hallett v. Hallett, 2 Paige’s Ch. 15 ; Egberts v. Wood, 3 Paige’s Ch. 520 [24 Am. Dec. 236]; R. R. Co. v. Orr, 18 Wall. 473 [21 L. Ed. 810]; Kerrison v. Stewart, 93 U. S. 160 [23 L. Ed. 843]; Campbell.v. R. R. Co., 1 Woods, 368 [Fed. Cas. No. 2366]; Galv. R. R. v. Cowdrey, 11 Wall. 478. 479 [20 L. Ed. 199].”

This record makes it plain, in our judgment, that the suit in controversy falls under the rule first announced by the Supreme Court above, and that the beneficiaries described in the conveyance to Kloke Investment Company, trustee, were not necessary parties in the Stephens county suit. In support of our view we cite the following authorities: Lyons-Thomas Hardware Co. v. Stove Mfg. Co., 88 Tex. 468, 27 S. W. 100; Ebell v. Bursinger, 70 Tex. 120, 8 S. W. 77; Kerrison v. Stewart, 93 U. S. 155, 160, 23 L. Ed. 843.

In the case of Kerrison v. Stewart, supra, the Supreme Court of the United States in its opinion holds that where a trustee represents his beneficiaries in all things relating to the trust property, they are not necessary parties to a suit against him by a stranger, to enforce or declare void the trust; that in such cases the beneficiaries, although not parties, are bound by the judgment, unless it is impeached for fraud or collusion between him and the adverse party.

After reviewing the authority conferred upon the trustee in such matters, the court says: “Undoubtedly cases may arise in which it would be proper to have before the court the beneficiaries themselves, or some one other than the trustee to represent their interests. They then become proper parties, and may be brought in or not, as the court in the exercise of its judicial discretion may determine. But this was very clearly not a case in which such action was required; and so all the parties evidently thought, while the litigation was progressing. The trustee, as well as Kerrison & Beiding, appeared, and vigorously resisted the decree asked for. The report of the case in Stewart v. Kerrison, 3 Rich. S. G. 266, to which we have been referred, shows that they were represented by the same counsel who appear here for the creditors, that the argument was full, and the judgment carefully considered. In addition to this, Baton & Oo. and Hutton, who are among the creditors now resisting the decree, were named as parties to the suit, and might have appeared to defend, if they had been so inclined. They seem, however, to have been then content to leave their interests in the hands of the trustee, who certainly could present their defence if he would, and against whom no charge of neglect even is now made.”

Again the court says: “It follows that the creditors are concluded by the decree of the State court; and that necessarily disposes of this case, without further inquiry as to the other important questions argued before us. The object of the suit in that court was to avoid the deed to Charles Kerrison, as against the judgment of Stewart & Co.; and the decree was in accordance with the prayer of the bill. The validity of the judgment was necessarily involved in the suit; and the decree, as rendered, could not have been given except by establishing it.”

The case of Kerrison v. Stewart, supra, has been approved and followed by a long line of authorities, both state and federal. 9 Roses Notes on U. s! Reports, p. 301, etc. Our Supreme Court, in the case of Lyons-Thomas Hardware Co. v. Stove Mfg. Co., 88 Tex. 484, 27 S. W. 100, 107, in an opinion by Judge Brown, said: “We believe that reason and authority sustain the. proposition that, in a suit to set aside such an instrument, the beneficiaries in the deeds of trust were not necessary parties, and that the trustee represented all creditors for the purpose of sustaining the deeds under which he held for their benefit. Railway v. Butler, 56 Tex. 511; Ebell v. Bursinger, 70 Tex. 120, 8 S. W. 77; Kerrison v. Stewart, 93 U. S. 155 [23 L. Ed.. 843].”

The question of fraud or collusion is not raised here.

The second rule above described, to the effect that if an action is brought in furtherance of a trust to enforce its provisions, to establish it as valid, and to procure it to be wound up and settled, that the beneficiaries described in the instrument are necessary parties, is sustained by the following authorities: Cotton v. Coit, 88 Tex. 414, 31 S. W. 1061; Hall v. Harris, 11 Tex. 300; Ebell v. Bursinger, 70 Tex. 120, 8 S. W. 77; Milmo National Bank v. Cobbs, 53 Tex. Civ. App. 1, 115 S. W. 345, and many others could be cited.

As to what is necessary to support a plea of res adjudicata, we recognize fully the rule announced in the case of Philipowski v. Spencer, 63 Tex. 605, and other decisions of this state. However, the rule stated therein is not so rigid or unbending that it does not ’have its exceptions.

In 15 R. C. L., § 483, it is said: “The courts, look beyond the nominal parties, and treat all those whose interests are involved in the litigation and who conduct and control the action or defense as real parties, and hold them concluded by any. judgment which may be rendered, as for example those who employ counsel in the case, assume the active management of the proceeding or defense, or who pay the costs and do such other things as are generally done by parties. In other words, by participating in the proceedings one is es-topped by the judgment as to any questions actually litigated and decided therein.”

The foregoing rule was cited and approved by our Supreme Court in an opinion by Chief Justice Cureton in the case of American Indemnity Co. v. Fellbaum, 114 Tex. 127, 263 S. W. 908, 910, 37 A. L. R. 633. He said: “It appears to us that the judgment obtained in the suit of Miss Douglas Stough against the administrator may have'been binding? under the general rule on the indemnity company.' In other words, that the indemnity company, in so far as making that judgment conclusive, was a party to that suit. It had a right to make the defense, control the proceedings, examine and cross-examine the witnesses, and though not technically a party, it was so connected with the litigation by its interest in the result and by its active participation that it is bound by the judgment.”

The rule is clearly stated in 1 Freeman on Judgments (5th Ed.) § 435, as follows: “One illustration of this principle is seen in those cases where the persons affected have a common or general interest or are so numerous that it is inconvenient or impossible to make them all parties and their common situation and interest make it possible or their great number makes it necessary for one or more to represent all the others. Another illustration is found in those cases involving contingent interests in real estate, usually of persons not in being, wherein it becomes necessary in order that the property may be dealt with, for such interests to be represented by the holder or holders of some preceding vested estate. Still further illustrations are found in eases where a trustee or legal representative is deemed to sufficiently represent the interests of the beneficiaries of the trust or persons represented.”

In the case of Long et al. v. Martin et al., 116 Tex. 135, 287 S. W. 494, 495, in an opinion by Chief Justice Cureton, the Supreme Court of Texas, says: “Besides, the rule that a valid'judgment for a plaintiff is conclusive, not only as to defenses which were set up and adjudicated, but as to those which might have been raised inconsistent with the facts necessary to sustain the judgment, is one of universal acceptation. Cleveland v. Ward, 116 Tex. 1, 285 S. W. 1063, 1070, and cases there cited.”

In a very exhaustive opinion rendered by the Commission of Appeals in the ease of Houston Oil Co. of Texas v. Village Mills Co., 241 S. W. 122, 131, after discussing the binding effect of judgments upon the parties interested, it is said:

“In this connection, we quote as follows from a very strong opinion' by the United States Circuit Court of Appeals at New Orleans, delivered by Judge Pardee in case of Hauke v. Cooper, 108 F. 922, 48 C. C. A. 144:
“ ‘Neither the benefit of judgments on the one side, nor the obligations on the other, are limited exclusively to- parties and their privies.. Or, in other words, there is a numerous and important class of persons who, being neither parties upon the record nor acquirers of interests from those parties after the commencement of the suit, are nevertheless bound by the judgment. Prominent among these are persons on whose behalf and under whosu direction the suit is prosecuted or defended in the name of some other person. As is illustrated by the case of trustee and cestui que trust, the real party in interest cannot escape the result of a suit conducted by him in the name of another. The fact that an action is prosecuted in the names of nominal parties cannot divest the case of its real character, hut the issues made by the real parties, and the actual interests involved, must determine what persons are precluded from again agitating the question, and who are estopped by the previous decision. Whenever one has an interest in the prosecution or defense of an action, and he, in the advancement or protection of such interest, openly taires substantial control of - such prosecution or defense, the judgment, when recovered therein, is conclusive for and against him to the same extent as if he were the nominal, as well as the real, party to the action.”

In an opinion by Associate Justice Pierson, in case of Houston Terminal Land Co. v. Westergreen (Tex. Com. App.) 27 S.W.(2d) 526, 528, it is said: “It is not our purpose to hold or to support a view, sometimes contended for, that whenever in an action a party thereto might have pleaded a certain particular ground of recovery or of defense, but did not, he is precluded from setting up same in a subsequent suit between the same parties upon a different cause of action. But we do hold, in keeping, we think, with the well-established rule, that where an issue of fact is made in a suit which becomes necessary to and upon which the determination of the issues in that suit turned and rested, upon the establishment thereof by evidence in a subsequent suit between the same parties upon a different cause of action, such determination of the issue and the judgment based thereon in such former suit create an estoppel by judgment against the determination again of the self-same issue. Hanrick v. Gurley, 93 Tex. 479, 54 S. W. 347, 55 S. W. 119, 56 S. W. 330; Cromwell v. County of Sac, 94 U. S. 351, 24 L. Ed. 195; James Birckhead et al. v. Wm. Brown et al., 7 N. Y. Super. Ct. 134; So. Pacific R. Co. v. United States, 168 U. S. 48, 18 S. Ct. 18, 42 L. Ed. 355; 34 Corpus Juris, § 1322.”

It will be observed that in cause No. 7239, filed by the Banner Oil Corporation v. Kloke Investment Company in the district court of Stephens county, that after hearing the case upon its merits, the trial court rendered a judgment in favor of the Banner Oil Corporation against Kloke Investment Company, the effect of which we have already described; that no appeal was perfected from this judgment, and that the matters adjudicated thereunder became final.

In determining whether or not the pleadings support the judgment, they must be 'taken as a whole, and the averments of both parties may be looked to 'and considered. Lyon v. Logan, 68 Tex. 521, 5 S. W. 72, 2 Am. St. Rep. 511; Wright v. McCampbell, 75 Tex. 644,13 S. W. 293; San Marcos Electric Light & Power Co. v. Compton, 48 Tex. Civ. App. 586, 107 S. W. 1151; Law Reporting Co. v. Elevator Co. (Tex. Civ. App.) 168 S. W. 1001; 33 C. J. p. 1144. The statement of the Kloke Investment Company in its answer that it did not answer therein as trustee or that it did not desire to represent the beneficiaries claiming under the assignment tó that company as trustee, was not binding upon the trial court in disposing of the issues involved in that suit. American Indemnity Co. v. Fellbaum, supra; Chicago, R. I. & P. R. Co. v. Schendel, 270 U. S. 611, 46 S. Ct. 420, 422, 70 L. Ed. 757, 53 A. L. R. 1265; Freeman v. McAninch, 87 Tex. 132, 27 S. W. 97, 99, 47 Am. St. Rep. 79.

In the case of Chicago, R. I. & P. R. Co. v. Sehendel, supra, the Supreme Court of the United States, says: “A judgment is as binding upon an unwilling defendant as it is upon a willing plaintiff.”

In the case of Freeman v. McAninch, supra, Chief Justice Stayton says: “The plaintiff’s title was put directly in issue by the defendant’s answer in the former suit. It was the material and traversable matter in issue between these parties in that suit, and the judgment upon it is conclusive of that question in this suit. 1 Greenl. Ev. 52S et seq. It is not the less so because the defendant failed to produce any evidence of title on his part; otherwise, a party might avoid being concluded by the judgment, in any case, by withholding his evidence. The record of the judgment conclusively establishes that the title was in issue, and it was not competent for the defendant to impeach and contradict it by the introduction of parol evidence.”

It is to be further observed that in passing upon the plea in bar filed by the Banner Oil Corporation in cause No. 17285-0, pending in the district court of Wichita county, Tex., the trial court heard testimony touching this plea, and found that the judgment rendered in the district court of Stephens county was a bar to the matters alleged in the district court of Wichita county, as against the Banner Oil Corporation. Under the well-recognized rule of law in this state, it is presumed that, in support of such judgment entered, all facts were found in favor of the Banner Oil Corporation and others involved in said judgment,’which have any support in the evidence. The trial court under the law' had the right to consider what had been done by all the parties in the district court of Stephens county with reference to that suit. He had the right to consider that Kloke Investment Company was a party to that suit; that its president was present and testified, and that its attorneys in that suit now represent the various parties in the suit pending in Wichita county, and taking all of those matters into consideration, the facts raise'the issues presented herein, and it was the province of the trial court to pass thereon.

The opinion of the Court of Civil Appeals involved the legal effect of the evidence considered as a whole. We disagree with the findings of the Court of Civil Appeals that the legal effect of the evidence was that the judgment entered in the district court of Stephens county in cause No. 7239 was not a bar to the suit instituted by plaintiffs in the district court of Wichita county, in so far as the rights of Banner Oil Corporation were concerned.

In our judgment, the evidence tends to support the judgment entered by the trial court in this case in the district court of Wichita county, and that the judgment rendered by the trial court in cause No. 7239, supra, in the light of the entire record, was an unequivocal judicial determination that the assignment or lease involved in that suit was canceled and annulled, and the rights of all the parties thereunder adjudicated.

The view we take of this case renders it unnecessary to consider the other questions discussed in the opinion of the Court of Civil Appeals.

For the reasons herein stated, we recommend that the judgment of the Court of Civil Appeals be reversed, and that the judgment of the trial court be, in all respects, affirmed.

CURETON, C. J.

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


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

text:
    FISHER v. L. E. WHITHAM & CO.
    No. 1458—5693.
    Commission of Appeals of Texas, Section A.
    June 10, 1931.
    Carrigan, King & Surles, of Wichita Falls, for appellant.
    R. Wayne Frank and Milburn E. Nutt, both of Wichita Falls, for appellee.
   CRITZ, J.

This case is before the Supreme Court on certified question from the Court of Civil Appeals for the Second district at Fort Worth. The certificate fully states the case, and we therefore copy the same.

“The City of Wichita Falls is an incorporated city under the Home Rule Amendment to the Constitution, having more than 5,000 inhabitants. On November 1, 1926, acting by ' and through its Board of Aldermen, the City of Wichita Falls passed and approved a certain assessment’ordinance No. 846 fixing a charge and lien against abutting property and the owners thereof to evidence and secure a part of the cost of improving a portion of ■ Taylor street in said city upon which street lot 16, block 22, Floral Heights Addition to 'said city, being the property in controversy herein, abuts, when same was owned by appellant J. A. Fisher herein, in the sum of $901.95, said property fronting 150 feet on said street.

“Likewise on November 1, 1926, the. City of Wichita Falls, acting by its Mayor and City Clerk, executed a contract with appellees herein, for the .improving of said street and all property abutting thereon, by the construction of certain specified pavement, and then said parties executed a sub-contract whereby the said city agreed and obligated itself, as its pro' rata part and share of said work, to do all the necessary excavating, grading, ■and filling for said project.

“On September 12,1927; F. M. Rugeley, City Engineer of said City, being a ministerial officer thereof, certified to said Board of Aider-men that the contractors, being the appellees herein, had fully completed said improvement in accordance with the plans and specifications therefor, and recommended the acceptance of the work.

“Acting upon said City Engineer’s recommendation, the Board of Aldermen by resolution duly considered, passed, approved, and accepted the paving improvements on behalf ofu the city, and authorized the issuance of certificates of Special Assessment evidencing the indebtedness of the owners of the property as shown thereby, and in accordance with said resolution the Mayor and City Clerk executed and duly issued the certificate herein, No. 30-129, which recites in substance that same evidences a personal charge and assessment against J. A. Fisher, appellant, for his pro rata part of the cost of said improvements as shown thereby, and that all proceedings with reference to said work have been regularly had in compliance with law, and that all prerequisites to the fixing of the claim of personal liability have been performed.

“Upon the continued default- of the said J. A. Fisher in paying the first installment of said claim and charge, suit was brought on April 16, 1929, by the owners of the certificates, the appellees herein, to enforce collection of the full amount due. H. H. Haggard was made a party to said suit, because he had bought the property from the appellant Fisher, and was the ’ owner thereof at the time of filing suit. Upon the trial the suit was dismissed as 'to the said H. H. Haggard upon plaintiff’s motion, for it was shown that he did not assume or agree to pay the paving indebtedness, and that • plaintiffs (appellees) relied upon a personal judgment against j. A. Fisher as owner of the property when the assessment charge was made, it being his homestead at that time and no lien being fixed.

“At the time of the trial defendant Fisher, being appellant herein, answered by general demurrer, general denial, and plea of homestead, and by way of special answer plead that the certificate was void as a personal charge against him because the work was not done immediately after the contract was entered into, and the pavement should have been done within 115 days from date of said contract, and further, that time was the essence of said contract, although written notice was to be given by the City Engineer before the contractors would be required to start work. Appellant admitted by his answer that said city did not give written notice to the contractors to commence paving, as specified by the contract.

“To the defendant’s answer appellees filed their first supplemental petition, pleading a demurrer to defendant’s special answer and alleged defenses; also pleading .by special exception an estoppel by the 20-day statute of limitation; that the delay incident to the construction of the pavement was not a jurisdictional defect or omission; that even though the property in controversy was* the homestead of the defendant Fisher, he was nevertheless personally liable for the cost of the improvements, and further that the City of Wichita Falls, a Home Rule City, had by section 16, article 1175, full and exclusive power to improve the street and had all rights and legislative powers incident thereto.

“Upon the trial one special issue was submitted to the jury that was as follows:

“ ‘Find from a preponderance of the evidence before you whether the plaintiff L. B. Whitham & Company commenced the excavating and paving of the property involved within a reasonable time after November 1, 1926?’
“To which the jury answered ‘no.’

“Upon plaintiffs (appellees) motion for judgment notwithstanding the verdict, made in open court, the court, having fully informed himself upon the law applicable to the case at bar, thereupon held that the verdict of the jury was upon an immaterial issue, and further that appellant’s (defendants) contention of reasonable time was not'a legal defense to plaintiffs’ cause of action in the premises, and thereupon adjudged personal judgment in favor of appellee (plaintiffs) for the full amount due, as evidenced by said special assessment certificate.

“Appellant in due time filed his motion for a new trial, which was in all things overruled by the trial court on August 31, 1929, and thereafter on September 17, 1929, appellant perfected his appeal to this court.

“The sixth paragraph of the oi’dinance, by-virtue of which the-improvement under consideration was made, reads as follows:

“ ‘The fact that the improvements herein mentioned are being delayed pending the effect of this ordinance, and that the condition of said portion of street endangers the public health and safety, constitutes and creates an urgent public necessity requiring that the rules providing that ordinances be - read at more’than one meeting and for more than one time be suspended, and requiring that this ordinance be passed and take effect as an emergency measure, and such rules are accordingly suspended, and this ordinance is 'passed as an emergency measure, and shall be in force and effect immediately from and after its passage.’

“Section 3 of the contract between appellee and the City of Wichita Falls under which the paving was done with reference to the time of commencement and completion reads in part as follows:

“ ‘The contractor agrees to begin the work in fifteen days after being notified in writing so to do by the City Engineer, but shall not be required to commence said work or any part thereof until proceedings against the owners of property abutting upon the said street have been had assessing the proportion of cost of said improvements which is to be assessed against them and their property.
“ ‘The contractor shall prosecute said work with diligence after the commencement thereof and agrees to deliver the same in complete finished condition in accordance with the said specifications within one hundred (100) working days after the commencement thereof.’ * * *

“J. A. Fisher, appellant, after testifying that the property described in the assessment was his homestead until the latter part of July, 1927, at which time he had sold and moved out of the premises, testified about appellees’ efforts to get him to sign a mechanic’s lien contract as follows:

“ ‘After I sold the property and moved, they saw me about the paving of that street. I suppose it was the bookkeeper who saw me, I do not know. A young fellow came down to my house. He told me that he was representing L. E. Whitham & Company. He wanted me to sign a contract. I did not pay very much attention to the contract. It was a contract for the paving of that street. I told him that it was not my property. I had sold the property; I supposed that the paving was all dropped. I had not heard anything of that paving for a year prior to that. I told him that I did not want to pave it, that it was not my property. I told him not to pave it.’

“This witness further testified as follows:;

“ ‘When I sold this property to H. H. Hag-¡ gard, I did not sell it to him with any um derstanding on my part, with reference “to there being a lien on it. I understood at that time there was not' any. It had never been discussed by Mr. Haggard and me. It was my 'understanding that they were not going to put down the paving. I arrived at that conclusion because of the delay.’

“The following stipulation appears in the statement of facts' at page 7 thereof:

“ ‘It is agreed it was the 26th day of. August, 1927, when they started excavating and grading, and the improvements were completed on September 12th, 1927.’

“The witness Fisher further testified as follows:

“ T owned one-fourth of the property in the block. It was my homestead. I was .approached as late as July 30, 1927, to sign a mechanic’s lien and I refused. I do not know just the exact date it was, it was after I moved out and sold, I remember that. I guess that I refused to sign at all times, I did--not sign. The only paving of this particular project was just that little gap between two streets.’

“H. H. Haggard, one of the original defendants, who purchased .the property from appellant August 16, 1927, testified with reference to what he did when he found that ap-pellees were contemplating paving this street as follows:

“ ‘With reference to- the’ first knowledge I had that they were going to lay that paving up there, well, one morning about four or five days after I moved there, to be exact on the 24th day of August, they sent some teams up there and began to excavate. I asked them what they were going to do, and they said they were going to pave that street. I told them not to do it. They said “see the paving company.” I went to the office and asked for the manager and they said they were going to pave i± and were not looking to me for any money at all, and then I wasn’t satisfied with that and I wrote them a letter and registered it, and got the receipt back.
“ T had phoned to Whitham & Company’s office, I asked for the manager and some one answered as the manager. They said that they were not looking to me for the payment. In addition to that, I wrote them a letter. This is a copy of that letter. That is a return receipt that I registered to them, and here is the receipt for the register.’ ”

“The letter referred to in this testimony reads as follows:

“ ‘August 24, 1927.
“ ‘Messrs. L. E. Whitham & Co., 1901 Austin St., Wichita Falls, Texas.
-“ ‘Gentlemen:
“ ‘Please be advised by this that I have purchased the property located at 2400 — 10th' Street (corner Taylor & 10th) formerly owned by J. A. Fisher, that I use and occupy same as my homestead.
“ T understand you contemplate paving Taylor Street on the East of this property. When X bought this property I had no notice of any paving to be done and as I am not able to have same done at this time, this will notify you that I will not be responsible for the payment for said paving along this property.
“ ‘I take this means of notifying you of my intention before the pavement is laid. I remain,
“ ‘Yours respectfully, -.’
“This witness testified that he received a letter from appellee dated January 10, 1929, with reference to the payment of the installments on the certificate in question which claimed a lien against the property. The letter referred to is shown on page 31 of the Statement of facts, from which we quote the first sentence.
“ ‘As soon as we finished the paving improvement to your lot here, the city of Wichita Falls issued us a paying certificate in accordance with state law, showing a valid lien against your property.’

“George Dobson, the street superintendent during the time involved, testified in part as follows:

“ ‘The city did the excavation work some time, in the early part of the summer of 19.27. It was July or August — I could not tell you the exact date of that
! “ ‘My department is under the supervision of the city engineers at the time; all of that work is under the supervision of the city engineers, and all excavating work and things of that nature.’

' “This witness, likewise testified that L. E. Whitham, one of the partners composing D. E. Whitham & Company, appellee herein,' instructed them when to commence work on different paving projects. We quote his testimony as follows:

“ ‘As to who told us to go out there when we did do it, we had a list of it, Mr. Whitham sent Mr. Hunt a list of it, a list of this paving that was coming up each month. Mr. Whit-ham gave us a list of it that was ready to do. It came from Mr. Whitham. If Mr. Whitham had ordered us to do it immediately we could not have done it. We just took it as we could get to it. In a way we followed L. E. Whitham & Company’s directions, as he could get it ready and us ready for it.’

“Later on this witness testified as follows:

“ ‘If Mr. Whitham had directed us to have got to that earlier, with proper directions we could have done that, if we had left off something' else.
“ “To the best of my recollection we were, there excavating about three daySj but I would not say. for sure.’.

“Milburn E. Nutt, attorney for appellee, testified that the paving was not commenced earlier because the security of the cost of doing the paving was not closed until August 25, 1927. In this connection we quote his testimony further as follows:

“ T think that there were only four pieces of property on Taylor Street between Ninth and Tenth Streets. One of them we did not pave. We skipped S. E. Cockrell. J. A. Fisher’s was a homestead; we paved that. There were two more left. It did not take us ten months to get the two. It took the lawyers and the persons handling the estate of John Serrain. We did not pave the others without signing, as we did Mr. J. A. Fisher’s, because no personal judgment could be had against the deceased. Cockrell was out of the State temporarily. We had .the option to pave that; we paved it. Cockrell’s was not paved; it was skipped.’

“No attack has been made upon the regularity of the several ordinances and proceedings leading ¾> to the assessment in question, and there is no direct evidence in the record that the city engineer ever notified the contractor when to begin the improvement as contemplated by section 3 of the contract under which the paving was done; nor was the verdict of the jury questioned on the ground that the evidence fails to support it. The contention of appellant is thus stated in his first proposition, to wit:

“ ‘Under the terms of the contract between appellee and the city, the former was required to commence paving within a reasonable time from the date of the contract and complete same within one hundred days thereafter, hence, after the jury found that appellee did not commence said paving within' a reasonable time, the assessment certificate was void and the court erred in ignoring the finding of the jury as immaterial, and erred in rendering judgment against appellant, notwithstanding said finding.’

. “In support of the proposition so stated, appellant cites the following authorities, to wit: Andrae v. Watson (Tex. Civ. App.) 73 S. W. 991; Barber Asphalt Paving Co. v. Loughlin, 44 Tex. Civ. App. 580, 98 S. W. 948; Bush v. Merrill (Tex. Com. App.) 206 S. W. 834; Hilgert v. Barber Asphalt Paving Co., 107 Mo. App. 385, 81 S. W. 496; Paul v. Conqueror Trust Co., 125 Mo. App. 483, 102 S. W. 1070; Gilsonite Construction Co. v. Ark., etc., Coal Co., 205 Mo. 49, 103 S. W. 93; Heft v. Payne [97 Cal. 108] 31 P. 844, 44 C. J., section 3017, page 609; Page & Jones on Assessments, sections 535, 500.

“Appellees’ contention on the other hand is that this contract is between the City and the paving contractor; that the property owner is not a party thereto for the purpose of having a jury determination as to whether the work was done within a reasonable time as in inter parties contracts, for the reason that the party for whom the work has been done, namely, the City, has already by its acceptance of the work adjudged that the work was done within a reasonable time, which acceptance and approval of the work is final and conclusive, in the absence of fraud or bad faith. In other words the prime question in the case at bar for this court to determine is this: In municipal contracts, yvhere time is neither of the essence of the ordinance or the contract, and where the City has already determined by its acceptance of the work done under the contract that the work was done within a reasonable time, can a property owner who is not a party to that contract, in a suit on the assessment certificate, have a jury determination on the question of reasonable time, in the face of legislative determination by the City that the work was done within a reasonable time?

“We are not altogether fully agreed, because of which and because of the importance of the questions presented and of an early authoritative determination thereof, we deem it advisable to certify to your Honors for determination the following questions, to wit:

“1. Should the verdict of the jury, to the effect that L. E. Whitham & Company did not commence ‘the excavating and paving of the property involved within á reasonable time after November 1, 1926’ be disregarded as immaterial, as ruled by the court below?
“2. If not, then does the fact so found relieve the appellant J. A. Fisher from the personal obligation that .appellees seek to enforce; in other words, did the trial court err in rendering judgment in favor of B. B. Whitham & Company notwithstanding the verdict of the jury? ⅜ ⅜ ⅜ ”

The question here presented is simply this:

Where a paving contract between a city and a paving company does not specify when the work is to begin, and does not make time its essence, can such a length of time elapse between the making of the contract and the commencement of the work as will render an assessment against an abutting property owner unenforceable, where it is shown that the condition of the property owner has changed since the contract was made; that such changed condition was known to the contractor before the work was begun; and that the owner has been injured by the delay, or, in the absence of fraud or bad faith on the part of the city and contractor, does the acceptance of the paving by the city bind the property owner, regardless of the time taken to begin the work, the changed condition of the property owner, the resultant injury, and the fact that the paving company was fully apprised of such changed condition and resultant injury before it began the work?

We think the mere statement of the question demonstrates the fallacy of the contention of the paving company, to the effect that the acceptance of the work by the city is always absolutely binding on the property owner, simply because no fraud or bad faith was shown..

In our opinion the correct rule, as applied to the facts of the instant ease, is, that where a paving contract between a city and a paving contractor does not make time its essence, and provides no definite time for the work to begin, the acceptance of the work by the city is not final and binding on the property owner, where there has been a changed condition of the property owner, and an unreasonable delay in-beginning the work;1 which delay has resulted injuriously to the property owner, and the paving company has notice of such facts.

In Fitzgerald v. City of Huron, 47 S. D. 533, 199 N. W. 775, 777, cited by the paving company in its brief, it is said: “It may well be said that. the work had been completed and that both the city engineer and the city commissioners were apparently satisfied. Although there was some delay in completing the work, we cannot assume that the appellants were injured by such delay.”

The closing words of the above holding, '½ cannot assume that the appellants were injured by such delay,” are very significant, and demonstrate that the court intended to say that a difference existed between a ease where injury resulting from the delay was shown, and a case where no injury was shown.

In Robertson v. Southern Bitulithic Co., 190 Ky. 314, 227 S. W. 453, 454, cited by the paving company, the court said: “As between the contractor or the city on the one side, and the property owners on the other-, time was not of the essence of the contract. The delay did not disadvantage the appellants. As a matter of fact, had the street been constructed under a contract executed in the spring of 1917, the cost of materials at that time would have increased the amount apportioned against each of the appellants; they profited by the earlier made contract. The time for doing work relating to public improvements is within the municipal discretion, nor did the commissioners violate this discretion when they extended the time within which the work should' be done.”

Further on in the opinion, the court said: “It would not be meting out justice to the contractor, who has admittedly performed the obligations of this contract, to shoulder this loss on him when the city is not liable and where the property owner has ■ received the benefit of the work.”

It will be noted that in the above case the court expressly held that time within which public work is to be done is within municipal discretion, but that such discretion can be violated. Also the court expressly based its conclusions on the fact that the delay, had not injured the property owner. The words of the opinion, to the effect that it would he unreasonable to shoulder the loss on a contractor where ho has done the work, and the property owner has received the benefit thereof,, is authority to say that where an unreasonable length of time has elapsed before the ¡beginning of the work, and such delay has injured the property owner, it would be unreasonable to saddle the loss occasioned by the ■delay on the property owner, and this is certainly doubly true where the paving company was fully apprised of the facts.

. In Hubbell v. Des Moines, 168 Iowa 418, 150 N. W. 701, 703, cited by the paving company, it is said:

“The work had not been commenced at the time it was to be completed, and on this ground it, is- contended the assessments were void. The city council by resolution extended the time of performance until May 1st following, and to this the contractor’s bondsman consented. The manner of extending time in so’far as the city is concerned was directory. Not only did the contract omit any condition making, time of its essence, but, in prescribing a per diem penalty for delay and the conditions on which the time of performance might be extended, clearly indicated that completion after the day fixed therefor was contemplated as a possibility. No statute or ordinance exacted that a specific period be fixed in the agreement within which to be performed or that this be done before a day named. The only conditions with respect to time are to be found in the contract, and, as these contemplated an extension might be necessary, it ought not to be- said that such extension, if not beyond a reasonable limit within which the improvement, in view of the circumstances, should be completed, will invalidate the contract and obviate liability for the assessments. Heman v. Gilliam, 171 Mo. 258, 71 S. W. 163; Schibel v. Merrill, 185 Mo. 534, 83 S. W. 1069; City of Sedalia v. Smith, 206 Mo. 346, 104 S. W. 15; Jenkins v. Stetler, 118 Ind. 275, 20 N. E. 788; City of Leavenworth v. Mills, 6 Kan. 288; 1 Page & Jones on Assessments, 538.
“The only available ground of objection to an abutting property owner where the conditions are as in the contract in suit is that the performance has not been within a reasonable time, and we are not ready to say, in view of weather conditions of this climate, and without any showing, that the improvement was not completed within a reasonable time.”

In the above opinion it will be noted that the court expressly holds “it ought not to be said that such extension, if not beyond a reasonable limit, within which the improvement, in view of the circumstances, should be completed, will invalidate the contract and obviate liability for the assessments.” A casual reading of this holding demonstrates that the Supreme Court of Iowa was of the opinion that the contract cannot be unreasonably extended, and that the reasonableness or unreasonableness of the extension must -be determined by the attending circumstances.

In Blome Co. v. Herd, cited by the paving company, 185 S. W. 53, 57 (writ ref.) the Court of Civil Appeals held:

“It is insisted that inasmuch as, from the allegations made, it appears that the city accepted the work done by Rudolph S. Blome Company through its authorized officers, that such acceptance is conclusive, in the absence of an allegation of fraud or collusion in the acceptance'. In now passing upon the ruling of the trial court presented in the assignment, we wish first to note that appellants’ contention is made contingent on the assumption that the plea fails to embody a charge of fraud; and that under the circumstances now to be stated that we will give to the plea a wider reach or scope than is, perhaps, to be plainly defined by the terms of the plea, for later evidence in support of the plea was admitted and heard by the court and evidently considered by him, and, while the evidence was objected to on the ground that the approval of the work by the city engineer was conclusive, no objection was urged because of an insufficiency of the plea to authorize its admission, and this evidence, in our judgment, goes beyond a good-faith approval of the work by the city engineer. Reading some of the evidence, which, as appears from the court’s findings, was evidently credited by the trial court, we fail to see how the work could have been approved without marked incompetency, inexcusable negligence, or downright fraud on the part of the city authorities whose duty it was, under the contract with Rudolph S. Blome Company, to supervise and approve the work. It certainly met the measure of the allegation that it was ‘without due regard to the rights of the property owners on said street, including the plaintiff.’ * * *

“There was other testimony of like tendency which, if credited by the court, as was evidently done, as we have already stated would authorize an inference of fraud, and we know of no decision that goes so far as to hold that a citizen against whom a personal obligation has been imposed for paving, and to secure which a lien has been declared upon his property, is helpless under circumstances of the kind stated.

“For the purpose of the present discussion, it may be conceded that a city engineer’s act in approving an improvement of the character under consideration, when done in good faith and with due regard to the rights of the abutting owners, will be conclusive as against all attacks dependent upon matters of judgment and honest differences of opinion as to the character of the work; but it ought not to be so held, we think, where the departures from ■ specifications are so great as to amount to an' inference of fraud, or to constitute the work done substantially a different work from that contracted for.”

A reading of the above opinion will demonstrate that the court there held that the act of a city in approving an improvement when done in good faith, and with due regard for the. rights of abutting property owners, is conclusive. Certainly the converse is also true; that is, if the act is not done in good faith, or is done without due regard to the rights of the abutting property owners, it is not conclusive. This case only involved the quality and quantity of the materials, and the quality of the work.

In Hilgert v. Barber Asphalt Paving Co. (Mo.) the court held as follows: “The defendant did not complete the improvement within the 90 days stated in the contract. The law is that where a definite time for the completion of an improvement is specified in the ordinance ordering it, or, if no time be specified therein, but is made of the essence of the contract by the stipulation of the parties, then, in either case, if the work be not completed within the time so specified, the tax bills will be void. Neill v. Gates, 152 Mo. 585, 54 S. W. 460; Childers v. Holmes [95 Mo. App. 154] 68 S. W. 1046; Barber Asphalt Co. v. Ridge, 169 Mo. 376, 68 S. W. 1043; Rose v. Trestrail, 62 Mo. App. 352; McQuiddy v. Brannock, 70 Mo. App. 535; Whittemore v. Sills, 76 Mo. App. 248; Safe Deposit Co. v. James, 77 Mo. App. 616; City v. Davis, 80 Mo. App. 574; Ayres v. Schmohl, 86 Mo. App. 349 ; Winfrey v. Linger, 89 Mo. App. 159. As the ordinance ordering the improvement did not specify any time for the completion of the work, and as it was not made of 'the essence of the contract by the express stipulation of the parties thereto, it remains to be determined in what time the defendant was required to complete the improvement. Carlin v. Cavender, 56 Mo. 286, was a suit on a special tax bill issued by the city engineer of the city of St. Louis to defray the cost of improving a street in front of the property of defendant. The ordinance authorizing the work fixed no time for its completion. There was a time fixed in the contract for the completion of the work, but there was no stipulation making it of the essence of that contract. The work was not completed within the time limited by the contract, and this was one of the defenses pleaded and relied on in the case by the defendant property owner. The case went to the Supreme Court, where it was said by Judge Wagner in the course of his opinion, that: ‘There is obviously no merit in the point that the work was not completed within the time limited by the contract. There is nothing to show that time was of the essence of the contract. For prudential reasons, the engineer suspended the work for a time, and the contractors assented to the suspension; but, when it was deemed : advisable to proceed, the work was then com- : pleted and received. It does not appear that . the defendant suffered any injury hy the de- -, lay.’ Strassheim v. Jerman, 56 Mo. 104, approved the ruling made in Carlin v. Cavender. . In Ayres v. Schmohl, 86 Mo. App. 349, it was said that the vital difference between that. case and Carlin v. Cavender, ante, was that in • the latter the contract did not make the time prescribed of the essence of the contract, while in the former it did. It tvas also fur- ■ ther said in the same case that ‘Those cases (Carlin v. Cavender and Strassheim v. Jer-man) held that where the ordinance did not fix the time, and the contract did, a failure; to complete the work within the time stated ’ in the contract did not necessarily void the bills; there being nothing to show that it was • of the essence of the contract, or the delay-was unreasonable.’ The rulings of this court,' as was said in Ayres v. Schmohl, have been that the time in which public work should be done is a legislative function, and that; it cannot be delegated to the city engineer, • which rulings are in harmony with that made by the Supreme Court in Neill v. Gates, supra.' It inevitably follows from these considerations-that the time for the completion of the work; fixed by the engineer and inserted-in the contract was, at most, but directory. Where there is no definite time fixed for the .completion-of the improvement in the ordinance ordering it, and where the contract entered into in' pursuance thereof does not malee time of the/essence of the contract, it may now he regarded as the settled law of this jurisdiction that the proceeding should he construed to.require the completion of the improvement within a reasonable time, etc.” (Italics ours.)

In the above case it is shown that the Missouri rule is that where the delay is unreasonable, and injury to the abutting property owner is shown by. such delay, ■ the contract is unenforceable against the property owner.

We find no fault with the rule announced in the case of Blome Co. v. Herd (Tex. Civ. App.) 185 S. W. 53, supra,' to the effect that the acceptance of paving by the city is conclusive on the abutting property owner, as regards quality and quantity of workmanship and materials, when such acceptance is made in good faith and with due regard to the rights of abutting property owners, and the rule announced in Herring v. City of Mexia (Tex. Civ. App.) 290 S. W. 792, which, in principle; is to the same effect. The' principle involved in these two cases applies to the character and quantity of material, and manner of executing the work, and is corollary to the rule that if there is a substantial compliance with the terms of the contract in these particulars, the act of acceptance by the city is binding on the property owner. We think, however, that in a case where there is no substantial compliance with the terms of the contract as to quality or quantity of máterials, or kind and character of construction or woi*k, the owner is not bound by the acceptance by the city. Certainly the city cannot bind the owner to accept, to his injury, compliance with a purely statutory and involuntary contract, on his part, unless there is at least a substantial compliance therewith by the paving company.

Also we think it is the settled law of this state that where the contract prescribes no time when work is to begin the law presumes a reasonable time, and what is a reasonable time depends on the facts and circumstances of the case. Self v. King, 28 Tex. 652; Hart v. Bullion, 48 Tex. 278.

■ In the case at bar it is conclusively shown that the property here involved was at all times the homestead of Fisher, and later his vendee, Haggard; that Fisher sold to Haggard after the contract was made and before any work had begun; that the cost of the paving- was not taken into consideration in the sale price, and not assumed by I-Iagi gard; that the entire cost of the assessment must fall as a loss on Fisher if he is compelled to pay it; and that the paving company was fully apprised of these changed conditions, and resultant loss to Fisher, before they began the work. Also the jury found, on probative evidence in the record, t¡hat,tke delay was unreasonable. In such a case the property owner was released from liability to pay the paving certificate, and the trial court committed error in refusing to give that effect to the verdict of the jury. ■

Of course we do not intend to hold that the city did not waive'the delay as affecting its own liability, but we do hold that where the delay is unreasonable, and an abutting 'property owner, whose condition has changed since the making of the contract, is injured by such unreasonable delay, and the paving company is fully apprised of the change of condition, and injury resultant therefrom, that in so far as the property owner’s rights are concerned, the city cannot bind the property owner by accepting the paving.

The paving company contends, in a supplemental brief filed in this court, that the acceptance of the paving by the city was the exercise of a legislative function, duly authorized by law, and was therefore the city-acting in regard to a matter involving its discretionary powers, and under the rule announced in Stone v. City of Wylie (Tex. Com. App.) 34 S.W.(2d) 842, such acceptance was absolutely binding on the property owner, in the absence of a showing of capriciousness, arbitrariness, fraud, or bad faith. We do not deem it necessary for us to pass on the question as to whether acceptance by the city involved an act of municipal discretion. If such be admitted, it would not alter the result here. It would constitute an abuse of discretion on the part of the city, and the exercise of municipal power in a capricious and arbitrary manner so far as the property owner is concerned, for the -city to attempt to bind him to pay a paving certificate, by accepting an improvement after an unreasonable time has elapsed between the making of the contract and the beginning ■ of the work, where in the meantime conditions have changed as regards the rights of the property owner, with resultant loss to him, and this changed condition was known to the paving company.

The paving company contends that the defense here made by the property owner is barred or precluded by article 1096, R. O. S. of Texas, 1925. This statute reads as follows: “Any property owner, against whom or whose property any assessment or reassessment has been made, shall have the right within twenty days thereafter, to bring suit to set aside or correct the same, or any proceeding with reference thereto, on account of any error or invalidity therein. But thereafter such owner, his heirs, assigns or successors, shall be barred from-any such action, or any defense of invalidity in such proceedings or assessments or reassessments in any action in which the same may be brbught in question.”

This statute can have no application to this case. The twenty-day limit therein fixed begins to run from the date of assessment or reassessment. Clearly the statute only applies to a contest of such matters as have transpired up to and including the assessment or reassessment. To attempt to give application to the statute in this case would be to hold that the remedy was barred before the injury had occurred. Manifestly, such a construction would render the statute invalid.

We recommend that the questions certified to, be answered as above indicated.

CURETON, C. J.

The opinion of the Commission of Appeals answering the certified question is adopted and ordered certified.