author: JACKSON, J.

text:
    SULLIVAN v. BLACK, SIVALLS & BRYSON, Inc.
    No. 3639.
    Court of Civil Appeals of Texas. Amarillo.
    June 24, 1931.
    Rehearing Denied July 11, 1931.
    Birge & Nelson, of Amarillo, for appellant.
    Eischer & Fischer, of Amarillo, for appel-lee.
   JACKSON, J.

This is an appeal from a judgment obtained in the district court of Potter county, Tex., on December 19, 1930, by appellee against the appellant, for the sum of $1,736.88, with 6 per cent, interest therepn from the date thereof.

Appellee’s suit is based on two itemized and verified accounts for goods, wares, and merchandise alleged to have been sold and delivered to appellant at his special instance and request by appellee in 1921. One of the accounts is for the sum of $1,890.95, and the other for $1,680.85.

Appellee was refused a recovery on one of said accounts, but no complaint is made by either party of such action of the court.

Appellee’s account appeared on its face to be barred by the statutes of limitation and it pleaded certain letters, hereinafter set out, on which it relied as a written acknowledgment and renewal of its debt and declared on such letters.

The appellant answered by numerous demurrers, general denial, and the statutes of two and four years limitation (Rev. St. 1925, arts. 5526, 5527).

The case was tried to the court without the intervention of a jury, and judgment rendered for appellee as above stated.

The appellant challenges as error the action of the trial court in holding that the letters relied on by appellee tolled the statutes of limitation, because such letters are not sufficient to identify the debt sued on or the amount thereof, do not evidence an unequivocal acknowledgment of the indebtedness, and do not contain an express and unconditional promise to pay such debt.

On April 4, 1928, the appellee’s legal department wrote appellant as follows:

“We have two old accounts against you which were made in Commanche, Oklahoma, and which now amount to an aggregate sum of $5,231.95 as of April 1, 1928.
“These accounts have been turned over to this Department. We would very much prefer to have payment of these accounts. • The total amount is rather large and if you are not in a position to pay it all at this time, we would be willing to accept a substantial payment and grant an extension of time on the balance evidenced by your promissory note.
“Please let us have a remittance for part of these accounts at least by return mail, and oblige.”

On April 7, 1928, appellant answered the foregoing letter, in which he says: “Yours of April 4th received. I have been indebted to your firm for some time — the exact amount of the account I can’t remember at this time, but it does not seem to me to be anything like $5,231.95, as per your letter. However, I am getting on my feet financially after going broke in Oklahoma — everything that I owe I am going to be able to and am going to pay. Your account will not be forgotten. Your firm acted very nice, they did not institute suits or in any way try to hinder me in staging a comeback and for that reason yours will be one of the first accounts that will be attended to and as soon as I realize on some of the properties in which I am interested.”

The record discloses the following agreement: “It is agreed that the written condition on the bottom of the letter of date 4-7-28, ‘you will be paid as soon as I am able and realize on some of my property’, has been fulfilled and that if the letter otherwise is a promise to pay it is a matured demand.”

Testimony offered independent of the letters is sufficient to identify the indebtedness of appellant'as evidenced by-the account on which judgment was rendered, and is amply sufficient to sustain the finding implied by the judgment of the trial court that appellee sold and delivered to appellant on such account, at his special instance and request, goods, wares, and merchandise aggregating the amount of the judgment rendered by the court in favor of appellee.

It will be noted that appellee wrote appellant with reference to two accounts. That appellant, in his reply, states: “I have been indebted to your firm for some time.” He then refers to his account and questions the correctness only of the amount of the account. I-Iis uncertainty as to the amount manifestly arose in his failure to recognize the account on which appellee sued and was refused a recovery. In his letter he further states: “Everything that I owe I am going to be able to and am going to pay.” “Your account will not be forgotten.” And, “Will be one of the first accounts that will be attended to and as soon as I realize on some of the properties in' which I am interested.”

The parties, by the agreement contained in the record, in effect agree that the appellant has realized on his property, is able to pay, and that the demand has matured.

In Stein v. Hamman et al., 118 Tex. 16, 6 S.W.(2d) 352, 353, in answer to a certified question the Supreme Court says: “It is well settled that a statement in writing, signed by the party sought to be' charged, which clearly acknowledges the existence of a debt against him, carries with it an implied promise to pay the same.”

In Elsby v. Luna et ux., 15 S.W.(2d) 604, 605, the Commission of Appeals says: “We understand the rule to be that, ‘This new promise need not be expressed in the writing, but may be implied from what is written.’ ‘An unqualified and unequivocal acknowledgment in writing on the part of the debtor, of the existence of the indebtedness, unaccompanied by expressions indicating an unwillingness to pay same, will raise the implication of a new promise to pay the indebtedness.’ York v. Hughes (Tex. Com. App.) 286 S. W. 165; Coles v. Kelsey, 2 Tex. 541, 47 Am. Dec. 661; Howard v. Windom, 86 Tex. 560, 26 S. W. 485; Stein v. Hamman [118 Tex. 16] 6 S. W.(2d) 352 (certified question opinion adopted).”

In C. H. Hyer & Sons v. Morrow, 16 S. W.(2d) 938, 940, the Court of Civil Appeals at Fort Worth quotes this language from Chief Justice Gaines: “It would appear, therefore, that when a defendant clearly acknowledges in writing that the debt is a just and subsisting obligation, and evinces that although he is unable to pay at the time, he has no desire or purpose to repudiate any part of it, every evil which the statute of limitations was intended tp remedy is obviated, and that no reason exists why the demand should not be enforced.”

Under this record and these authorities, it is our opinion that the letters tolled the statutes of limitation, and the judgment .of the trial court is affirmed.


source: Caselaw Access Project

author: PLEASANTS, C. J.

license: Public Domain

text:
    TEXAS & N. O. R. CO. v. BINSWANGER & CO. OF TEXAS.
    No. 9549.
    Court of Civil Appeals of Texas. Galveston.
    July 6, 1931.
    Baker, Botts, Andrews & Wharton, Arter-bury & Coolidge, and Roy L. Arterbury, all of Houston, for appellant.
    King, Wood & Morrow, of Houston, for ap-pellee.
   PLEASANTS, C. J.

This suit was brought by appellee against appellant to recover damages in the sum of $12,000 to a shipment of thirty-two cases of plate glass purchased by appellee from the Standard Plate Glass Company of Butler, Pa. The glass was delivered at Butler to the Pennsylvania Railroad Company and was transported under a through bill of lading by that company and its connecting carriers, and delivered by appellant to appellee at Houston, Tex.

After alleging the facts showing the shipment to have been under a through bill of lading, which required appellee to pay all of the freight charges before the shipment was delivered to appellee, and the payment of such freight charges by appellee to appellant, and tliat tie glass was in good condition when received by the Pennsylvania Railroad Company, but when delivered to plaintiff was stained and damaged and some of it broken, the petition further alleges: “Plaintiff further shows the court that in consideration of the promise and liability of the plaintiff for the payment of the freight and other lawful charges, the defendant and its connecting carriers on said through bill of lading promised and agreed to safely carry and deliver said thirty-two cases of plate glass with reasonable diligence and dispatch to the plaintiff, hut plaintiff shows that instead of so safely carrying said goods with reasonable diligence and dispatch the defendant and/or its connecting carriers negligently caused or allowed said- plate glass to become damaged and be broken and stained and otherwise injured; that they did not carry and transport said goods with reasonable diligence and dispatch but negligently used and consumed an unreasonable length of time from the point of origin to the point of destination; that is, said shipment of plate glass left Butler, Pennsylvania, on or about July 19, 1928, and was not delivered to plaintiff at Houston, Tesas, until on or about August 20, 1928, more than thirty days after the shipment started, all of • which was to plaintiff’s damage in the sum of Twelve Thousand Dollar's ($12,000.00).”

Appellant answered with a general demurrer, a general denial, and a special plea of contributory negligence, and á plea that the alleged damage resulted from the inherent nature of the glass which made it susceptible to yellow stain that came from the yellow straw, also from the inherent nature of the yellow straw which caused it to give off yellow stain when it became wet; and appellant alleged that the shipment was loaded in an open gondola ear by the shippers as agents of appellee; that an open car was ordered by the shipper; that the glass was packed by the shipper and loaded by them into an open ear and said shipment moved from Butler, Pa., to New Xork by rail in said open car, unprotected from the rain; that said shipment, while in said open car, was subjected to a heavy rainstorm and became wet, which fact caused the glass to stain; that the shippers of said glass well knew that the glass would become stained under such conditions, and that since the glass became we.t as a result of the careless and negligent manner in which it was packed, which proximately caused ap-pellee’s loss, they were not entitled to recover.

Appellee by supplemental petition admitted that the shippers ordered an open car and that they packed and loaded the ear, but that they loaded it in the usual and customary manner, and in the ear furnished by the railroad company.

The ease was tried before a jury, and at the conclusion of the evidence the court instructed the jury to returii a verdict in favor of the plaintiff for the sum of $9,063.30. Such verdict was returned,-and judgment‘rendered for appellee for that amount.

When delivery was made to appellee, a considerable portion of the glass was stained and greatly damaged, and some of it was broken. The evidence shows that the glass was in first-class condition when it was received for transportation by the Pennsylvania Railroad.

The undisputed evidence shows the following facts: The stain resulted from the fact that the packing got wet; the shipment was crated, packed, and loaded by the shippers; the crates were of such size that they couldn’t be loaded into a box car, but had to be loaded in an open ear; while tar paper was nailed across the tops of the eases in the car, the sides and bottom ends of the crates were ex-pbsed to the weather; the open car moved a distance of 500 miles from Butler, Pa., to New Xork, and there was a considerable rainfall during that time of the year; the shipment was rained on considerably while it was in the open ear, and the packing got wet; the cases were packed with yellow straw, which when wet, gave off. a yellow stain which will cause glass to become stained; the glass will also become stained by chemical reaction when it remains packed two or three weeks after getting wet; this glass was loaded on the boat direct from the pier, and did not have an opportunity to get wet while being loaded; it was on the boat only seven days, reaching Galveston on August 18th, and, in the opinion of the manager of the plaintiff company, the glass got wet at least two or three weeks before that time; the glass stood upright, on edge, in the cases, and the stained portions were the bottom parts of the glass; the paper in between the glass was wet from twenty-four to thirty-six inches up from the bottom; if the bottom edge of the glass and packing should get wet, the moisture or water will rise by capillary attraction in the paper between the glass.

There was evidence which would sustain a finding by the jury that the glass and paper packing was wet when it reached New Xork, and received a further wetting from rain which fell on it while being inspected on its arrival, and that this wetting caused the stain and the larger portion of the damages awarded appellee by the judgment.

Upon this state of the evidence, the trial court erred in taking the case from the jury and refusing to submit to the jury the issue of the proximate cause of the damage to the glass, other than the breakage.

There was delay in the shipment after it reached New Xork which is not clearly accounted for, nor does the evidence disclose how the shipment was cared for during this delay further than to show that it did not become wet while being transferred from the car into the boat, which transported it to G-alveston, nor while it was on the boat. We do not think that the rule, that when goods for interstate shipment are delivered to the initial carrier in good condition, and delivered at destination in á damaged condition, a presumption obtains that the damage was caused by the negligence of the delivering-carrier or some of its connecting carriers, can be conclusively applied upon the evidence in this record.

When the defendant’s evidence showed that an efficient cause of the damage was the negligent manner in which the goods were packed by the shipper, it should have been left to the jury to determine from all the evidence whether or not such negligent packing was the proximate cause of the injury.

Of course if there had been no evidence tending to show that the damage was proximately caused by the negligence of the shipper, or some cause against which the carrier could lawfully be relieved of liability, the presumption that the damage was caused by the negligence of the carrier would be conclusive. This is true, because the carriers generally have the only means of knowing whether the shipment was handled with care. Galveston, H. & S. A. Ry. Co. v. Wallace, 223 U. S. 481, 32 S. Ct. 205, 56 L. Ed. 516. But it would, in our opinion, be unreasonable to extend this presumption so as to deny appellant the right to have a jury pass upon the issue raised by the evidence of the negligence of the shipper as the proximate cause of the damage to the goods.

The judgment of the court below is reversed, and the cause remanded.

Reversed and remanded.


author: DUNKLIN, J.

text:
    McCARTY MOTOR CO. et al. v. R. F. FINANCE CORPORATION et al.
    No. 12448.
    Court of Civil Appeals of Texas. Fort Worth.
    April 4, 1931.
    Cooper & Lumpkin, of Amarillo, for appellant.
    Kilgore & Rogers, of Wichita Falls, for ap-pellees.
   DUNKLIN, J.

F. A. Linn executed to the Fritz Motor Company his promissory note, payable in Wichita county, dated December 4, 1928, for the principal sum of $645, payable in monthly installments of $53 each, with the provision that a failure to pay any installment would give the holder the right to declare the entire note due. To secure the payment of the note, Linn also executed a chattel mortgage in favor of the payee upon an automobile. The note and mortgage were duly transferred and assigned by the payee before maturity to the R. F. Finance Corporation, who for a valuable consideration bought it in good faith and without notice of any defense thereto. After default in its payments, according to its terms, the assignee declared the whole debt due and sued Linn for a personal judgment, and also prayed for a foreclosure of the chattel mortgage both as against Linn and W. M. McCarty and’the McCarty Motor Company, who were likewise made defendants and who claimed the automobile under purchase from Linn. Judgment was rendered in favor of the defendant McCarty, of which no complaint is made. A judgment by default was rendered against Linn, and he has not questioned its validity by appeal; but the defendant McCarty Motor Company has appealed from the foreclosure decree.

The only contention presented by appellant is that it acquired title to the automobile by purchase from Linn’s vendee, free of the mortgage lien theretofore given.

The record shows that the chattel mortgage was executed by Linn in Wichita county on December 4, 192S, and that it was filed for record in that county on January 8, 1929. The mortgage recites that the automobile was then situated in the town of Eleetra, county of Wichita, Tex., and one of its provisions was that the mortgagor would not move it out of Wichita county without the written permission of the owner or holder of the note, and would not permit the use of the same out of said county, or allow it to be used in violation of any state or federal law.

The evidence shows without controversy that at the time of the execution of the mortgage the ear was in Wichita county, as recited in the mortgage. According to Linn’s testimony, he owned a home in Borger, Hutchinson county, and while he was in Wichita county he was engaged in the drilling of an oil well; that he and his wife occupied a rented house during their stay in Wichita county, and that he would make occasional trips in the automobile to his home in Borger and would then return to Eleetra; that he and his wife continued to reside in Eleetra until the latter part of June, 1929; that after the expiration of that period they returned to Borger a$d lived permanently in their home. That after .his return to Borger, and on July 11, 1929, he sold the car to Specter & Morgan, an automobile firm in Borger; that testimony was not controverted. It furT ther appears that on August 1, 1929, Specter & Morgan sold the car to the McCarty Motor Company, an automobile firm doing business in Potter county, who purchased the same in good faith, paying a valuable consideration therefor, after being told that it was free of any liens and without any actual notice of the mortgage in controversy. The mortgage was never filed for record in Hutchinson county, or any other county than Wichita county.

After the suit was filed, a receiver was appointed, who, in obedience to process of the court, took the car from the possession of the McCarty Motor Company over its protest.

The record further shows without controversy that the holder of the mortgage never consented to the removal of the car froyu Wichita county, and knew nothing of such removal until the suit was filed.

Several assignments of error are presented to the action of the court in overruling appellant’s motion to vacate the receivership for lack of proper grounds authorizing such action. Even though there was error in appointing a receiver, that would constitute no ground for reversing the judgment on the merits of the case. Accordingly, the assignments complaining of the appointment of the receiver as a ground for reversal are overruled.

By article 5490, Rev. Civ. Statutes, it is provided that every chattel mortgage upon personal property “shall be absolutely void as against the creditors of the mortgagor or person making same, as against subsequent purchasers and mortgagees or lien holders in good faith, unless such instrument, or a true copy thereof, shall be forthwith deposited with and filed in the office of the county clerk of the county where the property shall then be situated, or if the mortgagor or person making the same be a resident of this State, then, of the county of which he shall at that time be a resident.”

Article 6645 of the statutes reads:' “Every deed, mortgage, or other writing, respecting the title of personal property hereafter executed, which by law ought to be recorded, shall be recorded in the clerk’s office of the county court of that county in which the property shall remain; and if afterwards the person claiming title under such deed, mortgage, or other writing, shall permit any other person in whose possession such property may be to remove with the same, or any party thereof, out of the county in which the same shall be recorded, and shall not, within four months after such removal cause the same to be recorded in the county to which such property shall be removed, such deed, mortgage, or other writing for so long as it shall not be recorded-in such last mentioned county, and, for so much of the property aforesaid as shall have been removed, shall be void as to all creditors and purchasers thereof for valuable consideration without notice.”

Although the mortgage was not filed until a month and four days after it was executed, yet we do not believe that such delay would of itself be any reason for holding that as against appellant the lien never attached or that it was waived. As shown above, the sale by Linn to Specter & Morgan did not occur until several months after the mortgage was recorded, and, therefore, neither that buyer nor the appellant was prejudiced by plaintiff’s failure to file the mortgage forthwith. If the sales had occurred between the date of execution of the mortgage and the sales, a different question would be presented. Vickers v. Carnahan, 4 Tex. Civ. App. 305, 23 S. W. 338; Hackney v. Schow, 21 Tex. Civ. App. 613, 53 S. W. 713.

The holder of the mortgage was not required to file the same both in the county where the property was situated at the time the mortgage was given and in the county of the mortgagor’s residence. Such is true according to the express provisions of article 5490. See. also Oxsheer v. Watt, 91 Tex. 402, 44 S. W. 67.

As noted already, the purchase of the car by appellant was within less than two months after it was removed from Wichita county to Borger; and since the proof shows without controversy that the removal of the car at that time was without the knowledge or consent of the holder of the mortgage, it follows that the mortgage lien was not lost by reason of the provisions of article 6645 of the statutes. Karcher & Co. v. Davis (Tex. Civ. App.) 278 S. W. 302; Paschal v. Harris Motor Co. (Tex. Civ. App.) 280 S. W. 614. Under the facts stated and the authorities cited; plaintiff had a valid mortgage lien upon the car in controversy at the time appellant purchased the same, and, since it was duly recorded according to the provisions of the statutes, and was not lost by the removal of the car. from Wichita county before it was Sold, appellant purchased the same with constructive notice of such mortgage lien, and therefore showed no valid defense against the foreclosure sought, and the court did not err in instructing a verdict in plaintiff’s favor.

Accordingly, all assignments of error are overruled, and the Judgment is affirmed.


author: JONES, C. J.

text:
    DEMING INV. CO. v. GIDDENS et ux.
    No. 9398.
    Court of Civil Appeals of Texas. Dallas.
    June 27, 1931.
    Rehearing Denied July 20, 1931.
    See also (Tex. Sup.) 30 S.W.(2d) 287.
    Read, Lowrance & Bates, of Dallas, for appellant.
    Moore & Moore, of Paris, for appellees.
   JONES, C. J.

Appellees, Joe D. Giddens and wife, Ethel Giddens, secured a loan of $13,000 from appellant, Deming Investment Company, a corporation incorporated under the laws of the state of Kansas and legally doing business in this state. This loan was secured on February 16, 1921,and is evidenced by a note of that date executed by appellees to appellant in the sum of $12,000, with interest at the rate of 6 per cent, per annum payable annually on January 1st of each year until the maturity of the nóte on January 1, 1931, as evidenced by the coupon notes. The first of these notes is for the sum of $616, and the remaining nine of such notes is for the sum of $720 each. The principal note, as well as the coupon notes, provide for the acceleration of maturity if default should be made in the payment of any coupon note when it became due, and provided for 10 per cent, interest on all unpaid notes, from the time of the default.

Appellees, on the same date (February 16, 1921) and as a part of the same transaction, executed to appellant five other notes; the remaining $1,000 of the principal of the loan was included in the first and second of this series of notes. Note No. 1 of this series, which included $500 of the principal, was in the principal sum of $1,331.35, and matured January 1, 1922; note No. 2 was for the sum of $1,310, which included the remaining $500 of the principal, and matured January 1,1923. Each of the remaining three notes of this series was for $780, maturing respectively January 1, 1924, January 1, 1925, and January 1, 1926. By their terms and by the terms of the trust deed securing them, the holder of the series of five notes was empowered to declare all of said notes due and payable at his election on default of payment of any note of the series, and after their maturity was so declared, each unpaid note was to bear interest, from the date of the accelerated maturity, at the rate of 10 per cent, per annum.

The first note of $12,000, with its interest coupon notes, under its' terms was secured by a first lien created by a deed of trust given by appellees on 600 acres of land in Bed Biver county; Tex. The series of five notes was likewise secured by a deed of trust lien on the same land, but this lien was made secondary to the one securing the $12,000 note. The series of five notes purported to represent earned commissions due to appellant for negotiating the loan, and the written application to appellant by appellees for the loan contained a clause appointing appellant their agent to procure the loan, and to forward to the holder of notes the interest money as the same became due under the terms of the loan.

The second deed of trust, securing the se-ries of five notes, contained this clause: “ * * * And ⅛ ⅛ understood that the Deming Investment Company, while advancing the money to the first party (appellees) on said loan, is acting merely as the agent of the first party for the negotiation of the same in the market, and the notes secured by this deed of trust represent the earned commission which the party of the first part agreed to pay to the third party for the negotiations of said loan, regardless of any payment on the first lien note prior to its maturity.” Appel-lees paid the coupon note for $616 and note No. 1 in the sum of $1,331.35 on February 28, 1922, together with $32.45 as interest after the maturity of these said notes. This payment was made to appellant and it receipted appel-lees therefor, sending the $616 to the holder of the $12,000 note.

When the second note for $720, and the second note of the series of five notes, in the sum of $1,310, became due on January 1, 1923, appellees defaulted as to both notes and appellant, after paying to the holder with its own funds the amount of the coupon note, availed itself of its option to declare the remaining three notes of this series due and instituted this suit to recover the $720 advanced on the coupon note and the amount of the remaining four notes of the series of five, together with the 10.per cent, attorney fees and interest at the rate of 10 per cent, from the date of default, and for a foreclosure of the'deed of trust lien securing these notes. The first note for $12,000 was only incidentally involved in this suit. About five months after the execution of said note, it ■and the ten coupon interest notes attached thereto were sold and transferred by appellant to the Butland Trust Company.

Appellees defended this suit under a plea of usury and by cross-action sought to recover the statutory penalty alleged' to have accrued in their favor, by reason of the payment of usurious interest'. The allegations in the pleadings of both appellant and appellees are full and are sufficient to raise the issues herein discussed.

The case was tried to the court without a jury, and judgment was rendered in favor of appellees, decreeing the contract usurious, and awarding them a part only of the relief sought by their cross-action. Appellant has duly perfected its appeal to this court, and appellees have duly filed cross-assignments of error because of the denial by the trial court of the entire relief for which they prayed in their cross-action.

Appellant presents two main questions: (a) That under the terms of the contract, as shown by the application for the loan and by the notes and deeds of trust executed, it was not. in fact the lender of the m'oney to appel-lees, but was only the agent of appellees to procure for them the loan for which they applied, and that the clear terms of the instruments describing them as such agent are not changed because appellant advanced to appel-lees, from its own funds, the full amount of the loan, before they negotiated the said $12,-000 note, and that the series of five notes, except as to $500 of the principal of the loan in each of notes Nos. 1 and 2, represent the earned commission coming to them, and do not represent interest on the loan, (b) If, however, notes Nos. 1 and 2, less the $1,000 of the principal represented in said two notes, and notes Nos. 3, 4, and 5, be considered a part .'of the interest, the contract nevertheless is not usurious, because the loan was to run for ten years and these sums of money, together with the aggregate of the interest coupon notes on the $12,000 note, represent an amount less than the maximum rate of 10 per cent, per annum allowed by law, and hence the contract is not usurious. In their answer and cross-action, appellees do not contest their liability for the unpaid balance of $500, in the second note of the series of commission notes, but claim that the contract is usurious on its face, in that it appears that the series of five notes, except as to said portion of the principal of the loan, evidence a payment to the lender for use of money borrowed and do not represent commission to a broker for securing the loan of money. By their cross-bill, appel-lees sought to recover the statutory penalty of double the amount of the $616 they had paid as interest on the $12,000 note, double the amount of $831.35 they had paid to appellant as interest represented by the first of the series of five notes, and denied the right of appellant to recover from them the $720 advanced by it to the Rutland Trust Company, in discharge of the second interest coupon note. They also sought to recover double the amount of $32.45 that they had paid, as overdue interest, on the first of the series of fiv.e notes.

The court found as a fact that the contract between the parties is usurious, allowed plaintiff a recovery of $500 as part of the principal included in the second of the commission notes, and also allowed 10 per cent, attorney fees, making this recovery $550. The court also allowed a recovery in favor of appellant against appellees for $720, the principal of the second coupon note it had paid to the Rut-land Trust Company, and allowed 10 per cent, attorney fees additional, making the recovery on this item the sum of $792, and a total recovery against appellees of $1,342. The court canceled the other commission notes and denied recovery thereon.

The court allowed appellees, on their cross-action, recovery for the sum of $1,727.60, as penalty for collecting usurious interest. This amount is made up of double the sum of $831.-35, the amount of interest embraced in note No. 1 of the series of five notes, and double the sum of $32.45, the amount of overdue interest at the rate of 10 per cent, collected by appellant from appellees because of the belated payment. The court denied recovery of double the amount of the first coupon interest note of $616, paid by appellees and received by the Rutland Trust Company. When the recovery allowed appellant is subtracted from the recovery allowed appellees, it leaves a balance in favor of appellees in the sum of $385.-60, and judgment in favor of appellees for such sum was rendered.

Appellees’ cross-assignments of error challenge the correctness of the judgment in not allowing the recovery from appellant of double the amount of the first coupon note they had paid, and in allowing appellant recovery against them for the sum of $792, principal and attorney fees on the second coupon note, which had been paid by appellant to the Rut-land Trust Company in settlement of the second coupon note, in payment of which appel-lees had defaulted.

In reference to appellant’s first contention: Was it a mere broker, acting as agent for appellees, to secure a loan of $13,000? The findings of the trial court are to the effect that appellant was the actual lender 6f the money, and we think this finding is sustained by the evidence. The money borrowed was paid to appellees by appellant from its own funds. It represented to appellees, both by statements made by its manager and by state-. ments on the letterheads of letters written to appellees, that it furnished the borrower its own money and did not contract loans for the purpose of negotiating with some other lender of money. It is true that some five months after the amount of the loan was given to ap-pellees, it negotiated a sale or transfer of the note, representing $12,000 of this loan, to the Rutland Trust Company; but this in no way conflicts with the findings of the court that the loan was made by appellant acting in Its own behalf.

It is immaterial how or in what manner or form the lender of money cloaks a usurious charge for its use or detention, if the result is that such lender, by such means, exacts more than the maximum rate of interest, the contract is vitiated with the taint of usury. The lender may style the excessive interest a bonus or a commission given to him as agent, but if he is in fact the lender of the money, and hence acting for himself and not for another, and receives the bonus or commission for the lending of his own money, the law denominates such “bonus” or “commission” as “additional interest.” Mitchell v. Napier, 22 Tex. 121, 129; 39 Cyc. 971, 977; 27 R. C. L. 211, and authorities cited in these texts; Shear Co. v. Hall (Tex. Com. App.) 235 S. W. 195.

The second contention of appellant was certified, to the Supreme Court of this state, and in an opinion by Mr. Justice Greenwood, that court held that the contract was usurious. The statement of this court to the Supreme Court found as a fact that the notes styled commission notes were in fact interest notes, and the opinion of the Supreme Court assumed this to be a fact. The opinion of the Supreme Court is reported in 30 S.W.(2d) 287, and is styled Deming Investment Co. v. Giddens et ux., and the statement thereunder is here referred to and the opinion is cited as authority for the holding that the contract is usurious. See also Shropshire v. Commerce Farm Credit Co. (Tex. Sup.) 30 S.W.(2d) 282.

As to appellees’ cross-assignments: Did the court err in refusing to give appel-lees judgment for double the amount of the first coupon note paid to appellant and remitted by it to the Rutland Trust Company ? The action asserted on appellees’ cross-action is purely a statutory action in this state. The authority to sue for a penalty of double the amount of usurious interest paid by a borrower is given by article 5073, R. C. S., which declares that: “Within two years after the time that a greater rate of interest than ten per cent, shall have been received or collected upon any contract, the person paying the same or his legal representative may by an action of debt recover double the amount of such interest from the person, firm or corporation receiving the same. ⅜ ⅜ ⅜ ” Under this statute, appellees are allowed to recover double the amount of the interest from the one receiving the same; that is, the one for whose benefit it was paid. • In the instant ease, the Deming Investment Company, while it collected the usurious interest, did not receive the same within the meaning of this statute, and hence is not the one against whom the suit to recover such penalty can be maintained. The Rutland Trust Company was not a party to this suit, and no recovery, of course, was asked against it. This contention of appellees is overruled. Webb v. G. & H. Inv. Co., 32 Tex. Civ. App. 515, 75 S. W. 355; Western Bank & Trust Co. v. Ogden, 42 Tex. Civ. App. 465, 93 S. W. 1102.

Did the court err in allowing appellánt recovery against appellees in the sum of $792, principal and attorney fees, on the second coupon note paid by it to the Rutland Trust Company on default of appellees? The payment by appellant of the amount of that note was the payment of usurious interest charged against appellees, which neither the Rutland Trust Company nor appellant had a legal right to exact. The usurious contract was entered into by appellant; it knew all of its terms when it paid this money to the Rutland Trust Company. Article 5069 in part declares that: “ ‘Usury’ is interest in excess of the amount allowed by law; all contracts for usury are contrary to public policy and shall he void.” Under the plain terms of this statute, the contract for interest on this entire loan was void, and a suit in any form by appellant for any part of the usurious interest cannot be maintained, for appellant is not an innocent party. We sustain the cross-assignment of error in regard to this contention, and hold that the court erred in allowing appellant recovery of the $792, and erred in charging the amount of this recovery against appellees.

It follows that the judgment of the lower court must be reformed so as to deny appellant a recovery for the said sum of $792, and to increase appellees’ recovery in a like amount, but that in all other respects the judgment should be affirmed. As reformed the judgment in favor of appellees is changed to the sum of $1,177.60, in lieu of the $385 allowed by the trial court. All other assignments of error are overruled.

Reformed and affirmed.

On Motion for Rehearing.

Appellees have called our attention to the fact that, in reforming and affirming the judgment of the district court, we did not aij-low interest on the judgment as reformed at the rate of 6 per cent, per annum from the date of. the judgment in the district court. This was an oversight, and the judgment here rendered is corrected so as to provide for interest on the amount at the rate of 6 per cent, per annum from November 15, 1924, the date of the judgment of the district court. Article 5072, R. S. 1925; Baum v. Daniels, 55 Tex. Civ. App. 273, 118 S. W. 754. Appellees’ motion in all other respects is overruled.

Appellant’s motion for rehearing is overruled.


text:
    HUMPHREY et al. v. JONES et al.
    No. 12452.
    Court of Civil Appeals of Texas. Fort Worth.
    April 25, 1931.
    Rehearing Denied June 6, 1931.

      Bullington, Boone, Humphrey & King, of Wichita Falls, for appellants.
    Harry Bunnenburg and Milburn E. Nutt, both of Wichita Palls, for appellees.
   DUNKLIN, J.

On February 15, 1926, Dr. H. A. Waller bought from J. W. Akin 145 acres of land adjoining the city limits of Wichita Falls, for a total consideration of $11,345, in addition to a conveyance by Waller and wife to Akin of another tract of 488 acres of. land. The money -consideration included the assumption, by Waller of an outstanding note payable to C. F. Seibold, of date July 27, 1022, executed by J. W. Akin and secured by a deed of trust of even date on the tract above noted for the principal sum of $6,500, with accrued interest thereon in the sum of $281.64. The consideration also included two promissory notes given by Waller to the grantor, one for $600, payable on or before May 1,1926, and another for the sum of $3,963.35, due on or before January 1,1928, both of which notes bore interest at the rate of 6 per cent, per annum, and were secured by a vendor’s lien on the land conveyed. On October 30, 1926, H. A. Waller, joined by his wife, Florence Waller, executed a deed of trust on the same tract of land to Mrs. Annie L. Witcher, guardian of the estate of Frances Ann Saunders, a minor, in" which Leslie Humphrey was named as trustee, for the principal sum of $14,000, of even date with the deed of trust, due two years after date, bearing interest from date at the rate of 10 per cent, per annum, payable semiannually, with the usual 10 per cent, attorney’s .fees clause, and with the further provision that failure to pay any installment would give the holder-the option to declare the whole note due. Following the recital of that note are these provisions:

“The note hereinabove described, secured by this deed of trust, represents a renewal and extension of one certain note in the principal sum of Six Thousand Five Hundred ($6500.00) Dollars dated July 27th, A. D. 1922, executed by J. W. Akin and wife payable to C. F. Seibold, shown by deed of trust of even date therewith, executed by Fred T. Couper, Trustee, and the holder of the note secured by this deed of trust is subrogated to all of the rights, equities and liens given to secure the payment of said note of $6500.00.
“The grantors herein, towit, H. A. Waller and wife, Florence Waller, contemplate platting and subdividing the above described lands for sale of town lots, which town lots shall be subdivided .in accordance with plat of forty acres thereof, a copy of which plat is this day delivered to the beneficiary herein, and said grantors contemplate making additional plat of the remainder of said lands. It is agreed that the grantors may, with the consent of the trustee and beneficiary herein, plat said lands and make sales of lots on the lands already platted, as well as the additional lots on the lands her.eafter to be platted, but the proceeds from the sale of said lots, towit: the cash bonus and installments shall be deposited to the credit of the beneficiary herein in the savings account in the City National Bank, of Wichita Falls, Texas, and shall be held as additional security to this loan, and when said lot, or lots, have been fully paid for, and said funds are deposited to the credit of the beneficiary herein, in the savings account in the City National Bank of Wichita Falls, Texas, the said beneficiary and trustee shall release this lien as to said lot, or lots, so paid out, but this lien shall thereupon attach to said funds so deposited in said bank aforesaid, and it is provided herein that no lots shall be sold upon a basis of less than Five Hundred ($500.00) Dollars per acre, and in default of the payment of the indebtedness secured hereby, the said beneficiary and trustee shall be and are hereby authorized to withdraw, from said bank the funds so deposited hereunder and apply the same upon this indebtedness. But until a release is actually executed and delivered as to said lot or lots so sold, this lien shall continue as a first lien as to all of said lots.
“The grantors herein may retain from the sale of said lots a sum equal to ten per centum of the purchase price, to be used as commissions and advertising for the sale of said lots, which said ten per cent, shall not be subject to this lien. Provided, however, that said beneficiary and trustee herein may release from the sale of said lots, and the proceeds thereof, funds for the improvement and platting of additional lands, so that the streets may be graded, improvements placed thereon preparatory to the sale of such lots, but there shall always remain against the purchase price of each lot at least the sum of Two Hundred ($200.00) Dollars. But this provision- shall not have the effect of a release of said lot or funds until a release thereof has been actually executed and delivered as aforesaid.”

The deed of trust contained a further provision that, in the event default in the payment of any of the indebtedness occurred, the trustee would be authorized, at the reguest of the payee or any holder of the note, to sell the land to the highest bidder at public auction after advertising the sale, and execute deed of conveyance thereto with warranty of title, with a further provision that the proceeds of the sale should be applied as follows:

‘‘First, to the payment of all necessary costs and expenses incident to the execution of said trusts, including a fee to the trustee of five per cent, to be estimated upon the amount realized at said sale. Second, to the payment rateably of said note then unpaid principal and accrued interest (it being understood that when default shall be made in the payment of said note, or any installment of interest thereon, or a failure to pay any taxes assessed upon said property, after the same becomes by law delinquent, all of the indebtedness shall become at once' due and payable at the option of the holder thereof.) Third, the remainder, if any there shall be after the payment of all said costs and expenses and the principal and interest of said note, shall be paid to us, the said H. A.' Waller and wife, Florence Waller, or to our heirs, assigns or legal representatives.”

Mrs. Annie L. Witcher at the time was the duly appointed and qualified guardian of the estate of Frances Ann Saunders, a minor, and W. C. Witcher was her husband.

In July, 1926, prior to the execution of that deed of trust, H. A. Waller had prepared a proposed plat of land showing a subdivision in lots and blocks to be known as “Inglewood Place” to Wichita Falls, and after advertising the sale, he, during the month of July, had executed contracts of sale to several proposed purchasers of different lots in the proposed addition, a small cash consideration being paid at the time, and the balance payable in monthly installments. The proposed plat was later executed and acknowledged by Waller on November 30, 1926, and was duly filed for record in the plat records of Wichita county on December 1, 1926. The plat covered 40 acres of the 145-acre tract, and plaintiffs” lots were shown in that plat. On the 9th day of April, 1927, Waller and wife executed another deed of trust in favor of Annie L. Witcher, guardian of the estate of Frances Ann Saunders, on the same tract of land, describing it by metes and bounds as in the former deed of trust, with certain exceptions hereinafter noted, to secure the payment of a promissory note for the principal sum of $24,000, of even date, bearing interest at the rate of 10 per cent, per annum payable annually, due two years after date, with the 10 per cent, attorney’s fee clause, and a provision that default in the payment of any installment would give the holder the right to declare the whole debt due. Following a description of the note, the deed of trust contained these provisions:

“The note hereinabove described, secured by this deed of trust, represents a renewal and extension of one certain note of the principal sum of six thousand five hundred ($6,-500.00) dollars dated July 27, A. D. 1922, executed by J. W. Akin and wife, payable to O. F. Seibo!d, shown by deed of trust of even date therewith, executed to Fred T. Couper, trustee and the holder of the note secured by this deed of trust is subrogated to all of the rights, equities and liens given to secure the payment of said note of $6,500.00.
“The note hereinabove described also represents a renewal and extension of two certain promissory notes, executed by H. A. Waller, payable to the order of J. W. Akin, dated February 15, 1926, one in the principal sum of six hundred ($600.00) dollars and the other in the principal sum of three thousand nine hundred sixty-three & 35/100 dollars ($3,963.35), fully described in a deed from J. W. Akin to H. A. Waller, recorded in volume 246, page 321 deed records of Wichita County, Texas.
“The note secured by this deed of trust is also an extension and renewal of a certain indebtedness in the principal sum of fourteen thousand ($14,000.00) dollars secured by deed of trust dated October 30, 1926, and recorded in volume 72, page 499-500 deed of trust records Wichita County, Texas, and the holder of this indebtedness is subrogated to all of the rights, liens and equities given to secure the above described note Of which this note represents a renewal and extension.
“The grantors herein, towit, H. A. Waller and wife, Florence Waller, contemplate platting and subdividing the above described lands for sale of town lots, which town lots shall be subdivided in accordance with plat of forty acres thereof which plat was filed in the office of the county clerk of Wichita County, Texas, on December 1,1926, and said grantors contemplate making additional plats of the remainder of said lands. It is agreed that the grantors may, with the consent of the trustee and beneficiary herein, plat said lands and make sales of lots on the lánds already platted as well as the additional lots on the lands hereinafter to be platted, but the proceeds from the sale of said lots, towit, the cash bonus and installments shall be deposited to the credit of the beneficiary herein in the savings account in the City National Bank of Wichita Falls, Texas, and shall be held ¾3 additional security to this loan and when said lot or lots have been fully paid for, and said funds are deposited to the credit of the beneficiary herein, in the savings account in the City National Bank of Wichita Falls, Texas, the said beneficiary and trustee shall release this lien as to said lot or lots so paid out, but this lien shall thereupon attach to said funds so deposited in said bank aforesaid, and it is provided heroin that no lots shall be sold upon a basis of less than five hundred ($500.00) dollars per acre and in default of the payment of the indebtedness secured hereby the said beneficiary and trustee shall be and are hereby authorized to withdraw from said bank the funds so deposited hereunder and apply the same upon this indebtedness. But until a release is actually executed and delivered as to said lot or lots so sold, this lien shall continue as a first lien as to all of said lots.
“The grantors herein may retain from the sale of said lots a sum equal to ten per centum of the purchase price to be used as commissions and advertising for the sale of said lots, which said ten percent shall not be subject to this lien. Provided, however, that said beneficiary and trustee herein may release from the sale of said lots, and the proceeds thereof, funds for the improvement and platting of additional lands so that the streets may be graded, improvements placed thereon preparatory to the sale of such lots, but there shall always remain against the purchase price of each lot at least the sum of two hundred ($200.00) dollars. But this provision shall not have the effect of a release of said lot or funds until a release thereof has been actually executed and delivered as aforesaid.”

The following is a further provision contained in the instrument:

“Also there is excepted from this conveyance the following described lots, out of the Inglewood Place, the title to which is not in the grantors herein. •
“Lots 23 and 24 in block No. 3 and lots 20, 21, 22 and 24 in block No. 2, all of said Inglewood Place.”

The lots so excepted were not the lots in controversy in this suit.

Both the deeds of trust above referred to were duly recorded in the deed records of Wichita county.

Walter A. Jones and five others to whom Dr. Waller had, during the month of July, 1926, executed contracts to convey certain lots in the Inglewood Place addition, after payment of the balance due on those contracts, instituted this suit on January 7, 1930, against Annie L. Witcher, guardian of the estate of Frances Ann Saunders, the minor, and also against W. O. Witcher, husband of Annie L. Witcher, and Leslie Humphrey, trustee, to recover title to those lots, and to cancel the deeds of trust referred to above as against those lots. In the petition, those deeds of trust and the provisions thereof were specifically alleged, with further allegations that the consideration paid by them after October 30, 1926, the date of the first deed of trust mentioned above, had been paid in to the City National Bank of Wichita Falls in accordance with the provisions of that instrument, and by reason thereof their lots were released from those liens; that Mrs. Witcher had received on the indebtedness secured by the two deeds of trust the sum of $26,000, which amount was in excess of all liens held by her; that, if any of the funds paid into the City National Bank of Wichita Falls had been withdrawn, such withdrawals were permitted by the bank in its capacity as agent for the guardian, and therefore she is es-topped to say she has not received shch payments.

Plaintiffs further alleged that the deed of trust, óf date October 30, 1926, was taken by the defendants with actual knowledge of plaintiffs’ contracts of purchase from H. A. Waller theretofore executed in July, 1926. There were further allegations to the effect that the record of the deeds of trust constituted a cloud upon plaintiffs’ titles, which they sought to have removed.

There was a further 'prayer for a temporary writ of injunction to restrain the defendants from selling the lots under the deed of trust pending the suit. The judge of the district court granted the temporary writ. After the same was granted, Leslie Humphrey, trustee, acting under the powers given in the deed of trust last mentioned, sold at public auction all of the 145-acre tract not expressly excepted from the last deed of trust, and not including the lots claimed by plaintiffs in this suit, and realized from that sale the sum of $13,000, which was applied as a credit on the $24,000 note last executed-by H. A. Waller and wife and secured by the last-mentioned deed of trust..

The defendant filed answers to plaintiffs’ suit embodying general and special exceptions to the petition, a general denial, a plea of not guilty, and also specially pleaded the terms of the deeds of trust and actual and constructive notice thereof by the plaintiffs at the time of their alleged purchases, also giving credit for the $13,000 realized at the trustee’s sale, leaving a balance of $17,000 unpaid; praying for judgment establishing the deeds of trust held by Mrs. Annie L. Witcher as a superior lien to the asserted claims of the plaintiffs, and also for general relief.

In reply to the defendants’ answer, the plaintiffs filed a trial amendment, in which they specially pleaded that the $13,000 realized by the defendants from the trustee’s sale was in excess of the amount of the liens, interest, costs, and attorneys’ fees outstanding against the property during the month of July, 1926, when the plaintiffs entered into their contracts of purchase with H. A. Waller, and which was prior to the execution of the deed of trust of date October SO, 1926, and “that thereby any liens which might have encumbered the deed of any of plaintiffs herein have been fully discharged, paid off and satisfied.”

In reply to that pleading, the defendants specially pleaded that at the time the guardian made the loans to H. A. Waller she acquired a valid deed of trust on the property without actual or constructive notice of the alleged claims of plaintiffs.

On the trial of the case, special issues were submitted to the jury, which, together with their answers thereto, are as follows:

“1. Do you find from a preponderance of the evidence that before the execution of the first deed of trust referred to in favor of Annie L. Witcher, guardian, that Dr. H. A. Waller advised W. 0. Witcher that he had contracted to sell forty-two of the lots of the land covered by the deed of trust? Answer: Yes.
“2. If you have answered the foregoing issue in the negative you need not answer this but if you have answered in the affirmative, then answer: Do you find from a preponderance of the evidence that Annie D. Witcher was informed that Dr. Waller had contracted to sell forty-two lots above referred to? Answer: Yes. * * »
“5. Do you find from a preponderance of the evidence that at the time of the execution of the first deed of trust in favor of Annie L. Witcher the defendant Mrs. Annie L. Witcher had knowledge of such facts and circumstances as would put a reasonably prudent person on inquiry, which, if made, would have led to a knowledge of the fact that plaintiffs herein had contracted to purchase the lots in question? Answer: Yes. ⅞ * *
“3. If you answer special issue No. 1 ‘yes’, then find whether or not Annie L. Witcher or W. O. AVitcher acted as an ordinary prudent person in investigating the status of the title to the property' herein involved? Answer: Yes.”

Judgment was rendered in favor qf plaintiffs for the recovery of title to their respective lots and perpetually enjoining the guardian and her husband and the trustee and successors in trust from taking any steps to enforce the deeds of trust against those lots, except that a foreclosure was granted in favor of the guardian against the lots held by the plaintiffs, respectively, in the following sums: Lot 1, block 4, held by W. A. Jones and wife, $57.50; lot 3, block 2, held by W. J. Edwards and wife, $97.50; lot 2, block 2, held by W. J. Edwards and wife, $97.50; lot 10, block 3, held by Cecil Atkins Young, $72.50; lot 14, block 3, held by Cecil Atkins Young, $72.50.

The record does not disclose the theory upon which those foreclosures against plaintiffs’ lots were based.

The defendants have prosecuted this appeal from that judgment.

The controlling issue in the ease was whether or not the plaintiffs” lots should he freed of the mortgage lien held by the guardian; the defendants making no claim of title.

The findings of the jury in answer to issues 1, 2 and 5, and the testimony offered to support the same, were wholly incompetent to prove an understanding between the parties to the first deed of trust, of date October 30, 1926, that the lots claimed by plaintiffs were not covered by that lien. Henry v. Phillips, 105 Tex. 459, 151 S. W. 533; Rogers v. Rogers (Tex. Com. App.) 15 S.W.(2d) 1037. Nor were the same sufficient to show title in the plaintiffs prior to the time the guardian took the first deed of trust, since plaintiffs then held merely contracts of purchase with only' small portions of the entire consideration paid, notwithstanding the fact that later plaintiffs paid the balance of the consideration and procured deeds from Dr. Waller, all before this suit was instituted. Fraim v. Frederick, 32 Tex. 294. Furthermore, in the absence of any direction from Dr. Waller to the contrary, and in the absence of any equities in the plaintiffs requiring a different result, the guardian had the right to apply the $13,000 realized from the trustee’s sale as a credit on the $24,000 then due on the last mortgage, as a whole. And we have reached the conclusion that the pleadings of plaintiffs were not sufficient to present a claim for any relief under the doctrine of marshaling of assets. It was incumbent upon the plaintiffs to invoke that doctrine by special plea. David v. Roe (Tex. Civ. App.) 271 S. W. 196. It is to be noted further that the plaintiffs’ allegations to the effect that the debt owing by Dr. Waller, evidenced by the deeds of trust he had given to the guardian and amounting to $24,000, had been fully paid by reason of deposits made in the bank added to the $13,000 realized from the trustee’s sale, which was a disputed issue, was not submitted to the jury, nor did plaintiffs request its submission, and therefore they waived any right' of relief based thereon. Ormsby v. Ratcliffe, 117 Tex. 242, 1 S.W. (2d) 1084.

It is to be noted further that although there was testimony tending to show that at least one of the purchasers, and probably others, had made valuable improvements upon their respective lots, yet there was no claim made by plaintiffs of equities arising by reason of such improvements.

Moreover, there was neither allegation nor proof that the facts found by the jury in answer to issues 1, 2 and 5 were brought to the attention of the county court, vested by law with supervisory control of matters relating to the welfare of minors under such circum-, stances; it being assumed that applications to make the loans were granted and the loans later approved, although we have not found in the record any proof of such orders.

Accordingly, the judgment of the trial court is reversed, and the cause is remanded.


author: BLAIR, J.

text:
    EVANS v. McNEILL.
    No. 7614.
    Court of Civil Appeals of Texas. Austin.
    July 1, 1931.
    Rehearing Denied July 25, 1931.
    Nunn & Love, of Georgetown, Claud West-erfeld, of Dallas, and W. F. Robertson, of Austin, for appellant.
    E. H. Lawhon, of Taylor, and E. A. Camp, of Rockdale, for appellee.
   BLAIR, J.

On June 20, 1930, appellant sued appellee for an accounting upon two written contracts, by the terms of which the parties became interested in acquiring oil and gas leases, and in drilling oil wells, and providing that appellant was to receive $100 per month for his services in locating oil and gas deposits, and to also receive one-eighth of the net profits from sales of leases, oil or gas; appellant alleging that $500 was due him as salary; and that numerous leases were taken in the name of appellee, which he sold, sublet, or assigned without advising with or paying appellant anything therefor; and appellant prayed for an accounting of the partnership business, the appointment of a receiver of the properties, and for dissolution of the partnership. On July 12, 1930, ap-pellee answered by a general demurrer, special exceptions, a general denial, and a special plea under oath that both contracts had been terminated by mutual agreement in writing, settling all matters between the parties. On July 12, 1930, appellant filed his supplemental petition, denying under oath that he had executed any writing terminating the contracts; and on the same day appellee filed his supplemental answer, reaffirming that appellant had executed a release of the contracts; and that appellant had, on July 8, 1930, executed and delivered his written confirmation of the said release.

On October 7, 1930, appellant filed his second supplemental petition, denying that he had executed any confirmation of the release, which was signed by his counsel. On the same day, October 7,1930, appellee filed what was designated “Defendant’s Second Supplemental Answer,” but which in fact was his second supplemental or amended answer and cross-action, reaffirming that appellant had released the contracts and had confirmed said release in writing; and by cross-action prayed that the contracts and the lis pendens notice of the suit be cancelled and annulled as a cloud upon the title to his leases in Williamson'county ; whereupon the following, according to the recitations in the judgment, transpired:

“On this October 7, 1930, being the date on which this case was set for trial came on to be heard this ease, and thereupon same tie plaintiff and defendant by their respective attorneys, and thereupon the following proceedings was had, to-wit:

“Plaintiff requested leave to file his second supplemental petition which re'quest was granted. The defendant requested leave to file his second supplemental answer and cross-action, which request was granted, and thereupon the plaintiff requested the court to pass upon the defendant’s special exceptions, and thereupon defendant announced that since this was to be a trial on the merits he would waive all of his special exceptions to plaintiff’s pleadings. Thereupon plaintiff announced that he would be ready for trial on the application for receivership but did not understand that the case was set on its merits for this date but the court was of the opinion that the ease was set for this date for the consideration of not only the application for receiver but for the case to be disposed of ■ on its merits. Thereupon the plaintiff verbally requested that the case be continued to which the defendant objected, and plaintiff was granted time in which to prepare and file his formal motion for continuance but which motion was never filed. * ⅜ * Thereupon defendant insisted that plaintiff be required to announce and that the trial proceed, but plaintiff failed to announce or to present a written motion for continuance and upon being requested by the court to fake some action, the plaintiff verbally moved to dismiss this suit to which the defendant objected because he had heretofore filed a cross-action and which request on that account was by the court refused. Thereupon the plaintiff requested that he be permitted to take a non-suit, which request was granted without prejudice to defendant’s cross-action, and thereupon defendant announced ready on his cross-action and demanded trial but plaintiff remained silent. There being no jury and the matters of law and of fact being submitted to the court, the court after the foregoing proceeding and after the hearing of the pleadings and evidence, finds and is of the opinion that the law and the facts are with the defendant on his cross-action and that he is entitled to the relief prayed for by him.”

Accordingly judgment was rendered for ap-pellee canceling and annulling the contracts sued upon by appellant and the lis pendens notice of his suit as clouds upon title to land and leases owned by appellee; hence this appeal.

It is the contention of appellant that this judgment was by default, without citation or notice to him of the cross-action of appellee, and therefore void. We do not sustain the contention. It is true that no citation was issued out of the cross-action, but after it was filed counsel for appellant appeared in the case and sought a continuance of the case, and, failing in this, sought to dismiss appellant’s suit, which was refused ■because appellee had filed his cross-action. Counsel then took a nonsuit, which, under order of the court, was without prejudice to appellee’s cross-action; and, although asked to do so by the court, counsel in open court refused to further appear or answer in the cross-action seeking to cancel and annul the very contracts sued upon by appellant, but “remained silent” as the court proceeded to try the cross-action. ■

It is a settled rule that, where a plaintiff in a suit appears, either in person or by counsel, and proceeds with the trial of the cause, such as asking for a continuance, seeking to dismiss his suit, taking a nonsuit without prejudice to a cross-action filed, and in open court refuses to appear or answer in the cross-action theretofore filed, growing out of. the subject-matter of his suit, he must take notice of each and every pleading there,-tofore filed, including the cross-action. Sullivan v. Doyle, 108 Tex. 368, 194 S. W. 136; Roller v. Reid, 87 Tex. 76, 26 S. W. 1060; York v. State, 73 Tex. 651, 11 S. W. 869; Edinburg Irrigation Co. v. Ledbetter (Tex. Civ. App.) 247 S. W. 335; Gregg v. Texas Bank & Trust Co. (Tex. Civ. App.) 235 S. W. 689; Dougherty v. Bank (Tex. Civ. App.) 258 S. W. 501.

Nor was the judgment rendered against appellant by default. Appellant’s pleadings for recovery on the two contracts remained a part of appellee’s pleadings on his cross-action to cancel and annul the contracts, even after appellant took his nonsuit. Howe v. Central State Bank (Tex. Civ. App.) 297 S. W. 692 (writ ref.). Counsel for appellant refused on request of the court to answer or proceed in the cross-action after he had taken a nonsuit for appellant. The judgment taken under these facts was not one by default, but ⅝ “judgment nihil dicit,” which amounts to a confession of the cause of action stated, and carries with it, more strongly than a judgment by default, admission of the justice of appellee’s cross-action. Howe v. Bank, supra.

Nor do we sustain appellant’s contention that the court erred in rendering judgment canceling and annulling the lis pendens notice, because appellant had theretofore taken a nonsuit, which terminated the lis pendens notice as a matter of law. If such be the rule, to which we agree, then no harm could come to appellant because thd court canceled and annulled the lis pendens notice, which had already become canceled and annulled by virtue of appellant taking his nonsuit.

The judgment of the trial court will be affirmed.

Affirmed.

On Motion for Rehearing.

On motion for rehearing appellant insists that he made no such appearance in this suit after the filing of the cross-action as, would render unnecessary service of notice on him of the cross-action, and cites in support of his contention the cases of Harris v. Schlinke, 95 Tex. 90, 65 S. W. 172; and Early v. Cornelius (Tex. Com. App.) 39 S. W.(2d) 6, 8. These cases merely apply to their own facts the general rule of law announced in our original opinion, and rean-nounced in the last case cited as follows; “Although the plaintiff is charged with notice of all pleadings filed in defense of his suit, he is entitled to notice of interventions and cross-actions affirmatively setting up causes of action against him, and judgments rendered against him upon such interventions and cross-actions, in the absence of notice, waiver, or appearance, will be set aside.”

- But the facts in the instant case clearly show an appearance by counsel for appellant after the filing of appellee’s cross-action which grew out of the subject-matter of appellant’s suit. That is, appellant’s suit was upon two written contracts, and appellee’s cross-action was to cancel the contracts as clouds upon title to real estate. The recitals in the judgment show that, after the filing of the cross-action, counsel for both appellant and appellee appeared in open court. The case was called for trial and counsel for appellant requested the court to pass upon ap-pellee’s special exceptions to the petition. Counsel for appellee announced that, since the trial was to be on the merits, the exceptions would be waived. Counsel for appellant announced that he was not ready on the merits, but thought that the case was set for a hearing on the application for receivership of the properties involved in the contracts in suit. The trial court held that the case was set for hearing .on its merits, whereupon counsel for appellant verbally requested that the ease be continued; and, upon objection of counsel for appellee to the continuance, counsel for appellant was given time to prepare and file a motion for continuance. No motion was filed. Counsel then deposited a jury fee and requested that the cause be placed on the jury docket, to which appellee objected on the ground that such procedure would work a continuance of his case, and the court so ruled, sustaining appellee’s objection. Counsel then announced that appellant had not complied with appellee’s -motion for a cost bond, and that the cause should be continued in order that he might comply with the motion. Appellee requested and was granted permission to withdraw his motion for cost, and insisted that appellant be required to proceed with the trial; whereupon counsel for appellant moved to dismiss the suit, which motion was overruled upon ap-pellee’s objection that he had filed a cross-action. Counsel for appellant then requested that he be permitted to take a nonsuit, which request was granted by the trial court, but without prejudice to appellee’s cross-action. Appellee then announced ready on his cross-action, and, although the trial court requested counsel for appellant to proceed with the trial of the cross-action, he refused to do so, hut “remained silent.” Manifestly these facts constitute an appearance by appellant in the suit after the filing of the cross-action, under the rule announced in the cases cited by appellant, as well as cases cited in the original opinion, and the following cases: Davis v. Wichita State Bank & Trust Co. (Tex. Civ. App.) 286 S. W. 584; Degetau v. Mayer (Tex. Civ. App.) 145 S. W. 1054; Mueller v. Heidemeyer, 49 Tex. Civ. App. 259, 109 S. W. 447; and Morrison v. Walker, 22 Tex. 19.

Motion overruled.


text:
    AMERICAN MORTG. CORPORATION v. WYMAN.
    No. 7606.
    Court of Civil Appeals of Texas. Austin.
    July 1, 1931.
    Rehearing Denied July 25, 1931.

      S. A. Williams, of Dallas, for appellant.
    Sewell, Taylor, Morris & Garwood and W. J. Knight, all of Houston, for appellee.
   BLAIR, J.

This appeal is from an order overruling the plea of privilege in statutory form of appellant American Mortgage Corporation to he sued in. Dallas county, its domicile. Ap-pellee sued appellant in Harris county for conversion of his automobile, and in his affidavit, controverting the plea of privilege, alleged that appellant was a corporation; that it had sued appellee in Dallas county on a note and to foreclose a chattel mortgage lien' on the automobile; that it had caused a writ of sequestration to issue out of that suit under which an officer seized the automobile while it was in the possession of appel-lee in Harris county; that the officer, without any order of -the court issuing the writ of sequestration and without the consent of appellee, delivered the automobile in Har-, ris county to appellant’s agents, who drove same from Harris county to Dallas county, where appellant sold same at private sale, thereby converting the automobile to its own use. The evidence on the hearing of the plea of privilege established without controversy the principal facts alleged by appellee in his controverting affidavit, except that there was controversy with respect to whether appellant sold the automobile at private sale after obtaining possession thereof under the writ of sequestration and the delivery to it by the officer seizing the automobile. On this issue, appellee introduced a letter, dated April 28, 1930, written by counsel for appellant to counsel for appellee, in which counsel for appellant stated that the automobile had been sold before that date in satisfaction of the judgment, and that there remained approximately $100 due on the judgment. On the hearing of the plea of privilege, counsel for appellant testified that he wrote the letter without an examination of the files in the case, and offered in evidence the judgment render-, ed in favor of appellant against appellee in the Dallas county suit, which judgment bore date of April 1, 1930, and which provided that “an order of sale issue,” and that the automobile be “sold as under execution in satisfaction of this judgment.”

Appellant also offered in evidence an order of sale, issued on this judgment, dated April 22, 1930, and addressed to the sheriff or any constable of Dallas county, ordering the sale of the automobile as under execution in .satisfaction of the judgment. This the constable of precinct No. 1, Dallas county, executed, making the following returns thereon: “Came to hand on the 22nd day of April A. D. 1930 Ret. Executed this 31st May A. D. 1930, by levying on the within described property and selling to plaintiff for- $60.00 collecting fee of $7.50 from plff. Jdgment. not satisfied.”

The constable executed the bill of sale to appellant, which recites that he seized on March 1, 1930, the automobile in suit under an order of sale issued March 1, 1930, on a judgment dated March 1,1930; and that he sold the automobile to appellant, after notice as required by law, on May 30, 1930, the bill of sale being executed before a notary public on May 30,1930. No evidence was offered as to these discrepancies and impossible dates in the returns of the officer and in his bill of sale.

Upon this evidence, the trial court found and concluded that the pleadings and evidence adduced on the hearing of the plea .of privilege showed at least prima facie that appellant was a private corporation; that it was guilty of conversion of appellee’s automobile, in that, having elected to seize the automobile under a writ of sequestration and to proceed to judgment of foreclosure in order to subject the automobile to the satisfaction of the mortgage lien, it had no right thereafter to deal with the automobile, except in accordance with statutory provisions of forced sale as under execution; and that sale, before the time prescribed for sale as under execution, constituted a conversion of the automobile, a part of which cause of action for conversion arose in Harris county, thereby sustaining venue of the suit in Harris c'ourity under subdivision 23 of article 1995, which provides that “suits against a private corporation ⅜ *' * may he brought in any county in which the cause of action, or a part thereof, arose.”

There is no question as regards the rights of the appellant corporation to obtain possession of the automobile under the provisions of the mortgage executed by appellee, by reason of the fact that the automobile may have been taken from the county where it was originally mortgaged, or because of 'default in payment of the monthly installments due on the note; but the question here raised relates to the acts of appellant after it had obtained possession of the automobile under'the writ of sequestration. The appellant corporation elected to seize the automobile under a writ of sequestration and to procure judgment 'of foreclosure in order to subject the automobile to the satisfaction of •its lien on the sale, and, having thus elected its remedy, it had no authority to thereafter deal with the automobile - in any capacity other than as a mortgagee withholding possession from the mortgagor under a writ of. sequestration. Cameron v. Hinton, 92 Tex. 492, 49 S. W. 1047; Neill v. Johnson (Tex. Civ. App.) 234 S. W. 147; Sabine Motor Co. v. English Auto Co. (Tex. Com. App.) 291 S. W. 1088. And since appellant caused the seizure of the automobile by the constable? in Harris county' under the writ of sequestration, it had no right to thereafter deal with the automobile as owner. Mathes v. Huey-Philp Hdw. Co. (Tex. Civ. App.) 22 S.W.(2d) 1073; Soell v. Hadden, 85 Tex. 182, 19 S. W. 1087; Payne v. Lindsley, 59 Tex. Civ. App. 545, 126 S. W. 329; Singer Mach. Co. v. Rios, 96 Tex. 174, 71 S. W. 275, 60 L. R. A. 143, 97 Am. St. Rep. 901; Harling v. Creech, 88 Tex. 300, 31 S. W. 357. And since the trial court found that the sale was made be-fore the time the automobile could have been sold by appellant under judicial process, that appellant thereby converted the automobile. Adami v. Bowers (Tex. Civ. App.) 21 S.W.(2d) 590; Hughes v. Smith, 61 Tex. Civ. App. 443, 129 S. W. 1142; Sabine Motor Co. v. English Auto Co. (Tex. Com. App.) 291 S. W. 1088, 1089; Cameron v. Hinton, 92 Tex. 492, 49 S. W. 1047.

Nor do we sustain appellant’s contention that there was no evidence to sustain the finding of the trial court that appellant sold the automobile, after obtaining possession of it under the writ of sequestration, prior to the time it could have been legally sold as under execution. The evidence established these facts at least prima facie, which is all that is necessary to sustain' venue of a suit attacked by a plea of privilege. Palmer v. Pinkston (Tex. Civ. App.) 282 S. W. 668; Miller v. Flynn (Tex. Civ. App.) 279 S. W. 879; Bowers v. Bryant-Link Co. (Tex. Com. App.) 15 S.W.(2d) 598; San Marcos Baptist Academy v. Burgess (Tex. Civ. App.) 292 S. W. 626. It is true that appellant offered in evidence an order of sale and a bill of sale to the automobile, but the order of sale was dated April 22, 1930, and the officer’s return thereon showed that he made the sale thereunder May 31, 1930; whereas, the bill of sale recited that the sale was made May 30, 1930, and was sworn to before a notary public on the same day. It also recited that the order of sale was issued on March 1, 1930, on a judgment dated March 1, 1930, whereas, the judgment and order of sale relied upon by appellant were dated, respectively, April 1, 1930, and April 22, 1930; and counsel for appellant wrote counsel for appellee that the automobile had been sold prior to April 28, 1930; and that the proceeds had been applied to the satisfaction of the judgment, leaving a balance of about $100 due thereon. A legal sale of the automobile could not have been made prior to May 3, 1930, in satisfaction of the judgment. In order for appellant to overcome the prima facie facts thus established, it should have had the officer’s returns corrected, if incorrect, as required by statute. It should also have required the officer to execute a correction bill of sale, if the one introduced was not correct in reciting that the order of sale and judgment furnishing its basis were not dated March 1, 1930.

"The only fact remaining to be determined then is whether this cause of action for conversion arose partly in Harris county. It is indispensable to the maintenance of the cause of action for conversion for the complaining party to prove that the original taking0 of the property was without' his consent. Appellee proved that appellant took the automobile under a writ of sequestration issued out of his suit in Dallas eountjhfrom the possession of appellee in Harris coStto-; that the officer taking possession of the automobile under the writ delivered same to agents of appellant without the consent of appellee in Harris county, and that the agents of appellant drove the automobile from Harris county to Dallas county, where appellant sold it prior to the time the judicial sale could be legally made. All" acts'of appellant, with the" exception of the sale of the automobile, occurred in Harris county, and .are sufficient to support venue in that county in a suit against a corporation, even though the breach or violation of the right made the basis of the suit occurred in some other county.

It is settled law that a cause of action is that in which the plaintiff’s remedy has its origin, the fact or facts giving him the right to bring the suit. Western Wool Com. Co. v. Hart (Tex. Sup.) 20 S. W. 131; Danciger v. Smith (Tex. Civ. App.) 229 S. W. 909; Mercantile Bank & Trust Co. v. Schuhart, 115 Tex. 114, 277 S. W. 621.

In this case, the acts and transactions which occurred in Harris, county' showed that the right of appellee to the undisputed possession of his automobile was violated by the seizure under the writ of sequestration in Harris county; that the possession of the automobile was obtained by appellant under circumstances imposing upon appellant the duty to thereafter deal with it in. accordance with the statutes regulating the sale of property under execution. The facts and circumstances imposing this duty upon appellant arose in part in Harris county, and, the car being in Harris county when seized, is sufficient to sustain venue in that county under subdivision 23 of article 1895, which provides that suits against a corporation may be brought in the county in which the cause of action or a part thereof arose.

The trial court also found and concluded that the pleadings and evidence adduced on the plea of privilege showed at least prima facie that appellant seized and took possession of and converted the automobile to its own use under circumstances which constituted the original taking a trespass ab initio against appellee in Harris county, in that, having elected to sequester and to pro-1 ceed to judgment of foreclosure in order to subject the automobile to the satisfaction of its mortgage lien, it had no right to thereafter deal with the automobile except to sell as under execution, and that the sale, prior Jo the time for a sale under execution, constituted the original taking under the writ of sequestration a trespass ab initio against appellee, occurring in Harris county, thereby sustaining venue of the suit in Harris county under subdivision 9 of article 1995, which provides that “a suit based upon a ⅞ * ⅜ trespass may be brought in the county where such ⅜ ⅜ * trespass was committed.” This proposition is also based upon the alleged fact that appellant sold the automobile before the time it could have been sold under judicial process, and-that the sale under such circumstances amounted to a conversion of the automobile, and that the action of appellant in wrongfully seizing the automobile amounted to a trespass ab initio, entitling appellee to a judgment for the value of the automobile at the time it was seized in Harris county>-thereby bringing the same within the provision of the statute authorizing the institution of the suit in the county where the trespass was committed. It seems that the doctrine of trespass ab initio is firmly established in the common law of this country, that is, it has been recognized to be the law in this and in other states. In the case of Humphreys Oil Co. v. Liles (Tex. Civ. App.) 262 S. W. 1058, 1064, the court quoted the following from 26 R. C. L., 943, § 18:

“The rule is well established that where' an authority given by law is exceeded the party loses the benefit of his justification, and ' the law considers him a trespasser ab initio, although to a certain extent "he followed the authority given. The law will operate retrospectively to defeat all acts thus done under color of lawful authority, when exceeded, and a fortiori will it operate retrospectively to prevent the acquisition of any lawful right by the excess and abuse of authority given for useful and beneficial purposes,”
“The same doctrine extends to private citizens acting under authority of law. Hence a person becomes a trespasser' áb initio where he enters an inn lawfully if, after entry, he commits an assault on the owner or trespass on his property; or where he takes up an estray and uses it, not as a matter of necessity and for the benefit of the owner, but for his own benefit; or where, having a right to remove a trespasser’s goods from his premises, he abuses his authority.”

And in the same case, the court quoted as follows from 38 Cyc. 1000: “The general rule is laid down that where an entry is made or possession of property taken by authority Qf law which would be a trespass but for such authority, a subsequent abuse of the authority renders the doer a trespasser ab initio, and is applied to a mere failure to fulfill the conditions attached to the exercise of the right.”

In affirming the decision of the Court of Civil Appeals, supra, the Commission of Appeals, in 277 S. W. 100, 103, used the following language: “The Court of Civil Appeals correctly ruled that the trial court did not err in refusing to submit the defendants’ requested special issue as to whether or not the erection and maintenance of plaintiffs’ dam on Plummer’s creek interfered with the rights of the defendants as the owner of the mineral lease upon said land. Conceding that such structures were a nuisance or otherwise did interfere with the defendants’ rights in the operation of their lease, the utmost that could be said is, the defendants would have the right, if >they could do so peaceably, to abate the nuisance or remove the obstruction, without resort to court, provided in doing so they would go no further than the necessity required and not commit any overt act to their individual profit or advantage, beyond the proper enjoyment of their lease fights. But under the undisputed evidence and the findings of the jury, the defendants have gone further and have made unnecessary personal gain to themselves by appropriating to their own usé the impounded and escaping oil. In such a case the original act would not be excused ex necessitate rei, but rather would be attributed to the wrongful purpose to appropriate.” Burton v. Calaway, 20 Ind. 469; Jorgenson v. Story, 78 Mont. 477, 254 P. 427; Morse v. Reed, 28 Me. 481; Coffin v. Field, 61 Mass. (7 Cush.) 355, in which it is held that, “it is well settled, that a party who justifies the taking of another’s property, under legal authority or process, must show that he has acted strictly in conformity with the requirements of law; otherwise, he will be considered a trespasser ab initio, and liable to an action of trespass at common law.”

Again, in the case of Smith v. Gates, 38 Mass. (21 Pick.) 55, where defendant acting under a statute requiring the appraisement of the value of an animal and allowing a sale after 24 hours following appraisement, which appraisement was concluded at 10:30 a. m. on May 30th and at 9:45 a. m. on the same day notice was posted calling for the sale at 10 a. m. the next day, the sale being had at 10 .TO the next day, the defendant was held liable for conversion, the court saying, that “the defendant, having failed to conform to the requisitions of the statute, has clearly made himself a trespasser ab initio, and the plaintiff is entitled to recover the value of the horse so taken and sold.” See, also, Wyke v. Wilson, 173 Pa. 12, 33 A. 701; Pope v. Ray (Tex. Civ. App.) 244 S. W. 1032.

Since appellant seized the automobile in Harris county under the writ of sequestration, but thereafter dealt with the property as owner, whereas, it should have sold the same as under execution, the later wrongful acts will operate retrospectively to prevent the acquisition of any lawful right by abuse of authority given for Useful purposes; and since the conversion of appellee’s automobile occurred in Harris county, under such circumstances as constituted the taking a. trespass ab initio against appellee, venue of the suit for conversion is sustained in Harris county by virtue of subdivision 9 of article 1995, which provides that a suit for trespass may be brought in the county where the trespass is committed.

The judgment of- the trial court will be affirmed.