author: GRAVES, J.

text:
    GARROW, MacCLAIN & GARROW, Inc., v. TEXAS & N. O. RY. CO. et al.
    No. 9547.
    Court of Civil Appeals of Texas. Galveston.
    May 15, 1931.
    Rehearing Withdrawn June 4, 1931.
    Fulbright, Crooker & Freeman, of Houston, for appellant.
    Baker, Botts, Andrews & Wharton and Ar-terbury & Coolidge, all of Houston, for ap-pellees.
   GRAVES, J.

The suit was by appellant, a private corporation engaged in the business of a cotton factor at.Houston, against the several appel-lee railway companies composing “the Southern Pacific Lines of Texas,” to recover an aggregate excess or overcharge of $4,270.50, alleged to have been through a mistake of facts paid them by it in a series of fifteen checks between July 5, 1921, and July 1, 1922, as for freight on 3,876 bales of cotton hauled to Houston over their railways in different shipments during that period, with an alternative count for judgment for the stated sum as for money had and received.

After a demurrer and a denial, both general, the appellees specially pleaded that they had, at the different times the several cheeks were presented to them by him, refunded in cash to the appellant’s agent, Mr. Gammell, whatever sum was then due it on each one of them resulting from any excess in the amount thereof over the proper freight charge, that such agent had the authority to so receive the money for appellant, “and that, if the said Gammell was not authorized to accept said amount, then that in accepting the same he was acting within the apparent scope of his authority.”

The appellant, without challenging the sufficiency of this answering plea by specially excepting thereto, joined issue on the facts therein alleged by denying that its .agent, Gammell, was acting within the apparent scope of his authority in receiving the refunds specified.

The trial court, presumably under the view that Gammell was shown to have had no express authority to do' so, submitted the cause to a jury upon this single special issue:

“Was Gammell acting within the apparent scope of his authority when he received the refunds on the fifteen checks offered in evidence, aggregating $4,270.50? Answer yes or no as you may find.
“In this connection you are charged that an employee is acting within the apparent scope of his authority when from the acts and conduct of such man’s employer a reasonably prudent person having knowledge of such facts and conduct of such employer, acting in good faith, would conclude the employee had the authority to act as he did and would rely and act upon such assumption.”

On the return of an affirmative answer, judgment went for the appellees.

•All of appellant’s freight bills, including those evidenced by these transactions, were paid by checks, or vouchers, that indicated by recitations on the face thereof that they were for freight to Houston on a specified number of bales of cotton, the further facts about the fifteen here involved being reflected in this written agreement of the parties, which was in evidence below:

“It is agreed in the above entitled and numbered cause that the plaintiff, Garrow, McClain & Garrow, on the dates and in the amounts shown below, issued their checks, or vouchers, to J. A. Sanders, Agent of the Southern Pacific Lines;
“That Mr. Gammell, an employee of Gar-row, McClain & Garrow, took the checks to T. D. Elam, Cashier of the defendant railroad companies, for the purpose of paying the freight on the stipulated amount of cotton as stated in said Vouchers; that when Mr. Elam cheeked his freight receipts against the particular vouchers presented, they showed that the voucher was in excess of the true amount of freight due in the amounts shown below under the heading of amount of refund, whereupon Mr. Elam, as Agent for the defendant railroad companies, accepted said checks and paid to Mr. Gammell, said employee of plaintiff, the difference between the true amount owed and the amount specified in the check. That this amount was paid to Mr. Gammell in cash.
Amount of Check Amount of Refund
$ 609.72 $ 327.61
751.25 434.32
319.29 319.29
354.06- 289.72
1,006.26 238.81
1,284.19 494.24
734.90 440.06
506.37 292.29
1,291.58 ' 345.14
2,026.13 402.97
341.55 59.88
698.58 142.67
575.20 241.54
519.41 64.48
622.19 177.56
Total amount of Refund $4,270.53
“The issue between the parties being whether or not Mr. Gammell, the employee of Gar-row, McClain & Garrow, Inc., had authority to accept the money mentioned as paid him above for his employer.”

The undisputed testimony additionally showed that appellant’s employee thus named appropriated the. whole of the $4,270.50 so refunded to him to his individual use, without its knowledge, or consent, and that it never received any part thereof.

Appellant asks a reversal and rendition in its favor on two grounds, which are thus stated in its brief:

“First, appellees’ pleadings did not allege the necessary facts to constitute-estoppel and were wholly insufficient as a plea of estoppel, and therefore the court erred in submitting to the jury the question of whether or not the appellant should be estopped to deny tbe authority of its employee to receive payment of the money sued for from appellees.
“Second, the evidence was wholly insufficient to warrant the trial court in submitting to the jury such issue of estoppel.”

Both of these contentions are inept, we think, in referring to the issue of fact submitted by the court to the jury as “the issue of estoppel”; in our view, while it may be said to have in a sense rested on the same fundamental principle as a technical plea of estoppel, it rather should be termed what it plainly purports to be and is, the issue of “the apparent scope of his authority” to do for his principal what this agent was admittedly shown to have done, that is, received these refunds in cash from the appellees; the question submitted to the jury follows almost exactly the -wording of the appellees’ pleading tendering the affirmative defense that Gammell was acting within the apparent scope of his authority for appellant when he received the refunds from them in the way he did; in reply, instead of challenging its sufficiency as such by special exception, or otherwise averring that it did not apprehend just what was meant thereby, or what proof it would be called upon to present in opposition, it chose rather to in effect assert that it understood fully and to join issue on the facts charged by saying: “Plaintiff specifically denies allegations in paragraphs 3, 4, and 5 of the defendants’ said answer wherein the defendants allege that one W. G. Gammell was plaintiff’s agent with authority either apparent or actual to receive payment of the money herein sued for.” It could not therefore be heard to yet say the question propounded did not submit the issue of fact on which the minds of both parties had thus met in their pleadings.

The first claim for error must accordingly be overruled.

As concerns the second, although it only presents the point that the evidence did not even raise an issue of fact over whether or not Gammell had the apparent authority to accept the refunds for his employer — not that the jury’s finding that he ■ did have was so against the weight of the evidence as to be clearly wrong — we have not felt so sure; after carefully reviewing the statement of facts, however, the conclusion has been reached that the issue was raised as to all the checks, or items, except the third one listed above, that is, the one for $319.29, on which the refund paid in cash was the full amount. Had the verdict been attacked as being so against the preponderance of the evidence as to require its being set aside, this court would doubtless have so held, but, when the exercise of its authority is thus limited to determining merely whether there was enough to authorize a submission of the inquiry to the jury, it must hold there was, with the limitation stated.

It is true appellant’s officers and others directly, unequivocally, and undisputedly testified in effect that they never conferred on Gammell the authority to accept and receipt for these refunds, but, though uncontroverted, that does not meet the ultimate issue of fact inhering in this question to the jury that might become the basis of liability, especially when affirmatively answered in the light of the court’s accompanying instruction as to the law applicable; there was no exception or objection on appellant’s part to that statement of the rule,- and, in the circumstances attending, this court perceives none, so that, quite apart from whether his principals ever expressly empowered him to do that particular thing, the question becomes one of whether they permitted him to so act in the conduct of their freight business with the appellees as led them, knowing that attitude, in the exercise of reasonable prudence and good faith, to so pay him these refunds in the belief at the time that he had the authority to accept them.

As before indicated, we think the testimony tendered properly carried that issue to the jury; that Mr. Elam, appellees’ cashier who thus paid the refunds, acted in good faith in making them, is wholly without dispute; and that, considering not only the long-established practice of appellant’s named agent, but that also of other shippers rather generally in disposing of their freight bills in the same way at his office, his prudence in so doing as in reliance on its being agreeable on both sides does not seem questionable, otherwise than concerning the one check we have excepted.

Mr. Gammell had been in appellant’s employ during the whole period of these transactions, as well as some time both before and after. It was his duty to see that all cotton arriving in Houston consigned to appellant was delivered to it. 1-Ie was to assemble the bills of lading, and to receive and classify the arrival notices sent it by the railroad companies. It was his duty to check such arrival notices against the bills of lading and to accept for the appellant the delivery of the cotton. It was his duty to compute from these arrival notices the amount of freight that was due the railroad companies on them, and, having so computed and determined the amount of freight that was due on a given number of bales of cotton, to make out a cheek to the order of the railroad company for the amount of that freight. When this check was properly signed by the designated officers of the company, it was his duty to see that the freight was paid, the evidence further showing that, while the check might have been in some instances delivered to the railroad company by the office boy, or some other employee, it actually was often delivered by Gammell in person. These detailed services indicate many and varied duties on his part, each one rrfvolving considerable responsibility. It appears in this connection to have been, quite generally the custom in Houston for various concerns to pay the freight covering several shipments with one check, and that, in consonance with that practice, a check would often be presented to the railroad company, not only from appellant, but from many other business houses, the amount of which would be in excess of the amount of freight actually due, and that in such cases the cashier of the railroad company would take the check and pay back to the shipper the difference between the face of it and the amount of the freight actually due, taking the latter concern’s receipt for such refund. The ease at bar seems to have grown out of this custom. Gammell would present to the railroad company a check in excess of the amount that was actually due on the cotton received. In each instance, it haying been his duty to compute for his company the amount of freight that was due and to fill out the cheek for such an amount and present it to the officers for execution, he would explain to the appellees’ cashier that it would be considerable trouble to run such check back through his company’s books, and that it could be more easily handled by taking a refund of the difference between the amount of the check and the amount of the freight actually due. This was no unusual procedure, and the cashier of the railroad company kept a receipt book for such purpose, wherein he kept receipts from various concerns for money he refunded under such circumstances. In each instance, when he would make a refund to appellant’s agent, he would take a receipt for the amount, signed, “Garrow, MaeClain & Garrow, by Gammell.”

It further appears that occasionally it was detected in the appellees’ office that there had been some slight mistake in freight accounts, and on such occasions the railroad company would make a refund to Garrow, MaeClain & Garrow, and, when the money was paid at the latter’s office, they took a receipt for it just as they did when they made the refunds here involved to the agent, Gammell, at the railroad company’s office, that receipt being signed, “Garrow, MaeClain & Garrow, by Gammell,” just as were the receipts given to the railroad company at the latter’s office by the agent, Gammell.

• The résumé just given, while substantially taken from the appellees’ brief, correctly reflects what appears in the statement of facts.

Admittedly, although the practice outlined had been going on for the time and under the conditions indicated, appellant never made any check of Gammell’s work, nor of the status of its freight accounts with any of the appellee railroads, until after he had been let out of their employ because they did not need him any longer, and did not discover that he had defrauded the corporation in these transactions for about fifteen or eighteen months after they had closed their books for the cotton season during which his defalcations took place, when for the first time they ■belatedly cheeked over their entire freight record for that season.

From this evidence as a whole, the inference that Mr. Gammell was acting within the apparent scope of his authority for his principal as to all the checks, except that for $319.29, refunded in toto, does not seem unreasonable; as concerns that one, however, it showed on its face by the attached notices of arrival that the seventy-eight bales of cotton it covered the freight into Houston on had all been transported over a different railway system entirely, the I. & G. N. Railroad Company, and that it had in consequence been made payable to the appellees’ agent in error, wherefore, being at a glance wholly foreign to any business at all between appellant and appellees, there was no justification for the latters’ cashier, Mr. Elam, to pay it in full, notwithstanding when that fact was at the time discovered, on the statement of Gammell to him that he did not want to run it back through his employer’s books, but desired the money instead, so he could go to the I. & G. N. Railway Company and pay their bills in cash.

Further discussion is deemed unnecessary; these conclusions require a reversal of the trial court’s judgment as to this last-mentioned check, and the rendition here of judgment in appellant’s favor for the amount of it, together with 6 per cent, per annum interest thereon from and after the date of the filing of this suit, but an affirmance in all other respects; it has been so ordered.

Affirmed in part; reversed and remanded in part.


source: Caselaw Access Project

author: VAUGHAN, J.

license: Public Domain

text:
    TAYLOR v. THOMPSON et al.

    No. 10824.
    Court of Civil Appeals of Texas. Dallas.
    April 25, 1931.
    Rehearing Denied May 30, 1931.
    Renfro, Ledbetter & McCombs, of Dallas, for appellant.
    Thomas, Storey & Orady and R. G. Storey, alb of Dallas, for appellees.

      Writ of error granted.

   VAUGHAN, J.

Appellant, Frank F. Taylor, instituted this suit against appellees, Oran Terry Thompson, H. E. Byrne, J. O. Hunt, Security' National Bank, Mrs. Pearl C. Perry, and F. I. Perry, to recover against appellees Thompson and Byrne on a promissory note in the sum of $9,400 executed January 1, 1920, by appellee Thompson, payable February 1, 1930, to the order of Federal Mortgage Company of Dallas, Tex., and to foreclose against all of the appellees a deed of trust lien on 142.5 acres of land in Johnson county, Tex., securing the payment of said note. Appellant sought personal judgment against appellee Byrne on his assumption to pay said note as a part of the consideration for the conveyance of said tract of land to him by appellee Thompson on the 11th day of April, 1921. Thompson did not answer, but Byrne answered, alleging that he had filed a voluntary petition in bankruptcy and surrendered all of his assets; that he was granted a full and final discharge from all his debts on January 25, 1926; that any obligation against him had been discharged, and that the debt sued upon was one dis-chargeable in bankruptcy. To this defense, appellant alleged, by way of supplemental petition, • that the Merchants’ Loan & Trust Company, in due course, acquired the note sued upon from the original payee, Federal Mortgage Company, March 18, 1920; that said Merchants’ Loan & Trust Company received from the Federal Mortgage Company a duly executed transfer of said note and lien, of date March 18, 1920, and caused, same to he recorded in the deed records of Johnson county October 5, 1920, prior to the time ap-pellee Byrne purchased the land securing said note and assumed the payment thereof; that said Byrne had notice that the note wa⅜ owned by the Merchants’ Loan & Trust Company at the time he purchased the land securing the payment of said note; that said Byrne did not schedule said note as being owned by said loan company; that neither appellant nor the trust company for whom he was acting had actual notice or personal knowledge of the filing of said petition in bankruptcy, or of any proceedings incident thereto, until after this suit-had been filed; that appellant and the said trust company did not have any opportunity to prove said claim in bankruptcy and participate therein; that the Federal Mortgage Company was not his agent of the agent of the Merchants’ Loan & Trust Company, for whom he was acting at the time the note was purchased from the Federal Mortgage Company, or at the time the petition in bankruptcy was filed, or at the time said Byrne was discharged in bankruptcy; that the Federal Mortgage Company was adversely interested to said Merchants’ Loan & Trust Company and appellant, because during all of such time the Federal Mortgage Company was the owner and holder of notes against said land secured by an inferior lien to that of appellant, and that Byrne’s notice to the Federal Mortgage Company could not be imputed to tbe loan and trust company and appellant, because of sucb adverse interest of tbe Federal Mortgage Company to that of' said trust company; that appellant held tbe title to tbe note sued on for the Continental-Illinois Bank & Trust Company, successor in title by merger with tbe Merchants’ Loan & Trust Company.

Trial was bad before tbe court on March 21, 1930, without a jury, which resulted in judgment in favor of appellant against ap-pellee Thompson for $11,341.15, with foreclosure of the deed of trust lien on the 142.5 acres of land against all of the appellees. Appellant was denied a personal recovery against appellee Byrne, on the ground that he was as a matter of law, released from the payment of the note sued upon by his charge in bánlcruptcy.

This appeal presents only one question, and that without any conflict in the evidence, viz., whettíer or not appellee Byrne, having named the Federal Mortgage Company in his bankruptcy schedule as the owner of the $9,400 note, after it had been transferred by said mortgage company to the .Merchants’ Loan & Trust Company, which had no actual or personal notice of the bankruptcy proceedings, was discharged from liability for the payment of said note.

It is conceded by appellant that, if said debt was duly scheduled under section 35, ch. 3, title 11, Bankruptcy, United States Code Annotated, the trial court properly denied appellant recovery on said note against appel-lee Byrne, and, to the contrary, contends (a) 'that, if said debt was not duly scheduled in time for proof and allowance to have been, made within the meaning of said statute, in favor of the Merchants’ Loan & Trust Company, owner of said note; or (b) that if ap-pellee failed to discharge the burden that rested upon him to show that, not only was said $9,400 note scheduled, but that the schedule contained the true name and post ofliee address of the then owner, viz., the Merchants’ Loan & Trust Company; or (c) if not known to appellee that he exercised reasonable diligence to ascertain the name and address of such owner, then judgment should have been rendered against said appellee for the amount due on said $9,400 note.

It is evident from the record that the trial judge found, as a matter of law, that, under the following undisputed facts, appellee Byrne was released from liability for the payment of said note under his discharge in bankruptcy, viz., Byrne purchased the 142.5 acres of land securing the payment of the $9,-400 note and interest coupon notes thereto attached, April 11, 1921, after said note had been transferred of record to the Merchants’ Loan & Trust Company, March 18,1920; that said appellee did not list the Merchants’ Loan & Trust Company as owner of said note so as to give it an opportunity to participate in the bankruptcy proceedings; that the Merchants’ Loan & Trust Company did not have actual knowledge of such bankruptcy proceedings; that appellee Byrne, after he purchased said tract of land, made regular payments, both on the coupon notes and on the commission notes, to the Federal Mortgage Company of Dallas, Tex.; that such payments were made upon notices received by him from the Federal Mortgage Company, of payments maturing on said notes; that both before and after bankruptcy appellee Byrne paid some of the interest notes to Federal Mortgage Company, each note so paid being indorsed as follows: “Pay to the order of ⅜ * * without recourse. Federal Mortgage Company, by Fred Locher, Treasurer.” And further indorsed: “Pay to Federal Mortgage Company, Dallas, Texas, or order, for collection only. Illinois Merchants Trust Company of Chicago, F. E. Loomis, Cashier.”

In reference to the payments so made by him and why he listed under the schedule of liabilities the Federal Mortgage Company, as owner of said note, appellee testified as follows: “I did list under the schedule of liabilities the Federal Mortgage Company of Dallas, Texas, as the payee in said note, and the reason I did this I never knew that Illinois Merchants Trust Company owned the note sued upon or had any interest in the same until the coupon notes were delivered to me after payment, and I continued to pay the notes to Federal Mortgage Company, Dallas, Texas, because they were sent to that company for collection each time.”

Said appellee further testified, “I never personally gave the Illinois Merchants Trust Company, nor plaintiff Frank F. Taylor, notice of the bankruptcy.” By other testimony it was conclusively shown that the Federal Mortgage Company was not the agent of appellant or his predecessor in title, the Illinois Merchants’ Trust Company, at the time it purchased said note from the Federal Mortgage Company, nor at any subsequent time for any purpose other than that of handling the interest coupon notes for collection, and looking after the payment of taxes in arrears, and then only when requested specifically so to do.

Section 35, chapter 3, title 11, supra, in part reads as follows: “A discharge in bankruptcy shall release a bankrupt from all of his provable • debts, except such as ⅜ ⅜ * (third) have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy.”

This provision is discussed at length in section 155, 3 R. C. L. 336, from which we make the following quotation as being applicable to this appeal, viz.: “The provision in the act included only those cases where there was personal notice or knowledge of the bankruptcy proceedings on the part of the creditor, as distinguished from mere im-Xiuted or constructive notice or knowledge, and the general rule that notice to an attorney is notice to his client applies only where the knowledge of the attorney is acquired while acting for the client and the information relates to a matter within the scope of his agency. While in a proper case a principal may be charged with knowledge of bankruptcy proceedings possessed by his agent, such knowledge of a creditor’s agent is not imputable to the creditor where the agent’s interest in the matter is adverse to that of the creditor, there being no presumption that an agent under such circumstances will import his knowledge to his principal.”

In reference to this provision, the following observation is made in Collier on Bankruptcy (13 Ed.) vol. 1, p. 628, viz.: “* * * The requirement of duly scheduling the names and residences of creditors is a most important one. It is in compliance with the generally recognized principle that one shall not be barred of his claim without the opportunity of having his day in court. It is essential in order that proper notice in bankruptcy proceedings may be given. It has been construed with some strictness. The cases .thus far are uniform in interpreting the words of this subdivision to mean what they say.”

In the case of Birkett v. Columbia Bank, 195 U. S. 345, 25 S. Ct. 38, 40, 49 L. Ed. 231, it was held that the debt was not discharged because it was not scheduled, and the bank did not have actual notice of the bankruptcy proceedings. In commenting upon the effect that should be given said section 35, supra, it was announced that: “Actual knowledge of the proceedings, contemplated by the section, is a knowledge in time to avail a creditor of the benefits of the law, — in time to give him an equal opportunity with other creditors,— not a knowledge that may come so late'as to deprive him of participation in the administration of the affairs of the estate, or to deprive him of dividends. The provisions of the law relied upon by plaintiff in error [makers of the note] are for the benefit of creditors, not of the debtor. That the law should give a creditor remedies against the estate of a bankrupt, notwithstanding the neglect or default of the bankrupt, is natural. The law would be, indeed, defective without them. It would also be defective if it permitted the bankrupt to experiment with it, — to so manage and use its provisions as to conceal his estate, deceive or keep his creditors in ignorance of his proceeding, without penalty to him. It is easy to see what results such looseness would permit, — what preference could be accomplished and covered by it.” To the same effect, see the following Texas authorities, viz.: Fields v. Rusk et al., 36 Tex. Civ. App. 350, 82 S. W. 331; Bogart v. Cowboy State Bank & Trust Co. (Tex. Civ. App.) 182 S. W. 678.

Under the undisputed facts, we think it was conclusively established that said note was not duly scheduled by appellee Byrne, in that he did not state the true name and address of the owner of said debt, made known to him by the indorsements on the interest notes paid by him prior to the time he filed his petition in bankruptcy; or at least that, had he exercised reasonable diligence, he could and would have ascertained the true name and correct address of the owner .of said note before he filed his petition to be adjudged a bankrupt. Therefore, it is clear that, under the above authorities, appellee Byrne failed to state in his schedule the name and address of the owner of said note, viz., the Merchants’ Loan & Trust Company of Chicago, Ill., and, having failed to show that said trust company had actual or personal knowledge of said bankruptcy proceedings, appellee was not released from liability by his discharge, but remained liable for the payment of said note in accordance with the terms of his original assumption agreement.

It is contended by appellee that, even conceding that he had notice before he filed his petition in bankruptcy that the Merchants’ Loan & Trust Company was the owner of said note, nevertheless, as the Federal Mortgage Company was charged with notice of his bankruptcy proceedings by reason of being named as the owner of said nóte, the Merchants’ Loan & Trust Company was also chargeable with such notice because the Federal Mortgage Company was at that time the agent of the Merchants’ Loan & Trust Company, duly empowered to act for it in the matter. The undisputed evidence failed to establish that the Federal Mortgage Company had authority to act in appellee Byrne’s bankruptcy proceedings for the Merchants’ Loan & Trust Company; but, to the contrary, established that said mortgage company had never been the agent of said loan and trust company, other than that of a special agent for the purpose of collecting and forwarding interest payments and looking after the payment of delinquent taxes when requested so to do by said loan and trust company, and even for that purpose a general agency did not exist. Hoffmaster v. Black, 78 Ohio St. 1, 84 N. E. 423, 21 L. R. A. (N. S.) 52, 125 Am. St. Rep. 679, 14 Ann. Cas. 877; Cunningham v. McDonald, 98 Tex. 316, 83 S. W. 372; Evans-Snider-Buel Co. v. Holder, 16 Tex. Civ. App. 300, 41 S. W. 404.

To hold that notice of bankruptcy proceedings given to an agent should be charged to his principal, in'the absence of proof establishing that the agent had authority to act in such matters, or that such notice was properly communicated to the principal, would have the effect to hold that, under such notice, the agent had authority to decline or .forego participation in the bankruptcy proceedings, thereby depriving the principal of a valuable right through no act in his own proper person, or by some .one thereunto duly authorized to act for him. Such a ruling, we think, would contravene the spirit, if not the letter, of section 35, supra, as interpreted by the Supreme Court of the United States in Bir-kett v. Columbia Bank, supra.

Without conflict in the evidence, the following facts were established, of which ap-pellee Byrne had due knowledge, viz.: That the Federal Mortgage Company was, from the 24th day of April, 1921, to the trial of this cause, adversely interested to the Illinois Merchants’ Trust Company, in that it owned notes secured by a second deed of trust lien against the tract of land on which the prior lien existed to secure the payment of said note, which second lien would be impaired, if not entirely defeated, if the first lien and note secured thereby was established and proved for payment in Byrne’s bankruptcy proceedings; therefore the general rule that notice to an agent is notice to his principal could not apply in this case. LaBrie v. Cartwright, 55 Tex. Civ. App. 144, 118 S. W. 785.

Hence we are of opinion that the trial court erred in not rendering judgment against ap-pellee Byrne .on his assumption of the payment of the $9,400 note; therefore the judgment of that court is in that respect reversed, and judgment here rendered in favor of appellant against appellee Byrne for the sum of $11,341.15, with interest thereon from November 9, 1929, at the rate of 10 per cent, per annum, for all costs of suit incurred in this and in the trial court; that said judgment be and is in all other respects affirmed.

Reversed and rendered in part; affirmed in part.

On Appellee Byrne’s Motion for Rehearing.

In response to the seventh ground of said motion, viz., “This Honorable Court erred in rendering judgment against appellee Byrne for the sum of $11,341.15, because it affirmatively appears from, the record that appellant foreclosed upon the land in question and evidently realized a valuable consideration from the sale of the land, and there is no credit given on the judgment and no facts to support a rendition of the judgment for the full amount of the original note and interest,” we supplement our original opinion as follows:

That, in the event said tract of land has heretofore been or shall hereafter be sold under the foreclosure of the liens thereon, then the amount that has been or may be realized at such sale shall be credited upon said sum of $11,341.15 as of date said sale has b,een or may be made; that, if an order of sale has not been issued on the judgment of the lower court and sale made thereunder as provided by articles 3783, 3804 and 3808, R. S. 1925, then an order of sale shall issue out of the trial court to the sheriff or any constable of Johnson county, Tex., directing him to seize and sell said land as under execution against all of the appellees in satisfaction of the moneyed judgment against Oran Terry Thompson and H. E. Byrne, and, if the proceeds of such sale be insufficient to satisfy the judgment for said sum of $11,341.-15, interest and costs of suit, then to make the money or any balance thereof remaining out of any other property of the said Thompson and Byrne as in the case of an ordinary execution. Said motion is in all other respects overruled.

Overruled.


author: LESLIE, J.

text:
    NATIONAL LOAN & INVESTMENT CO. v. L. W. PELPHREY & CO.
    No. 797.
    Court of Civil Appeals of Texas. Eastland.
    Feb. 13, 1931.
    Rehearing Denied June 19, 1931.

      E. E. Solomon, of Breekenridge, and J. H. Synnott, of Dallas, for appellant.
    Bailey W. Hardy, of Breekenridge, for ap-pellee.
   LESLIE, J.

This is an appeal from an order of the trial court dissolving a temporary injunction restraining the sheriff of Stephens county from selling lots 8 and 9, block 15, Hanks second addition to the city of Breekenridge, Tex., previously levied on by the sheriff under orders of sale based on judgments in favor of L. W. Pelphrey & Co. against certain defendants who are not parties to this suit. The petition for. injunction, in substance, sets forth that said loan company had lent money to the original owner of said lots and taken a deed of trust thereon to secure the payment thereof. That after the loan was made, and the deed of trust duly recorded in the deed of trust records of the county, Pel-phrey & Co. paved a street alongside the lots, and the city of Breekenridge issued two separate paving certificates against the lots, one for each lot, and each for $162.50, bearing interest. Such certificates were issued by virtue of the authority granted by articles 1086 to 1096, inclusive, and articles 1104 and 1105, Vernon’s Annotated Texas Civil Statutes, 1925. Article 1090 provides, among other things, that: “Such assessments shall be secured by, and constitute a lien on said property, which shall be the first enforcible claim against the property against which it is assessed, superior to all other liens and claims, except state, county and municipal taxes.”

The statute makes this a first lien to secure the payment of the obligation evidenced by the paving certificates, with interest and reasonable attorney’s fees in ease of default in payment of installments, and collection is by suit. Default was made, and the entire indebtedness was, under the option given, declared due. The paving company filed two suits, one on each obligation, and for foreclosure of the statutory lien. Each suit was against the same parties and the indebtedness evidenced by each certificate was $162.95.

The loan company,' appellant here, was not made a party to either suit. The suits were tried and resulted in a judgment in each ease for the amount evidenced by the certificates, plus (1) $25 attorney’s fees in each case, allowed an attorney appointed by the court to represent a defendant cited by publication; (2) $100 in each case, allowed the attorney of the paving company as a reasonable attorney’s fees; (3) other general costs in each suit, amounting to $121.65.

The loan company is here contesting, as unreasonable and unauthorized, such, attorney’s fees and costs. Its particular contention is that the purpose of the litigation could and should hatfe been accomplished by one suit, thus eliminating all the costs and attorney’s fees in an unnecessary suit. That under article 2060 of the. Revised Statutes, regulating costs in suits which should have been joined, the two suits in question should have been consolidated and at least one-half of the costs saved thereby. The plaintiff .states its contention concisely thus: “That being a lienholder for more than the worth of the property, it has a right to be heard as to the amount it shall pay; that this is a direct suit to set the other judgment aside; that it has shown a meritorious defense to part of the judgments, and that it is entitled to a verdict of the jury thereon.”

The petition in each original suit declared on an indebtedness of $162.95, with interest, and for foreclosure, and from the foregoing it appears that the attorney’s fees and costs to date in each suit aggregate $221.65. In both suits these items aggregate $443.30. From this it is obvious that it becomes imperative that the loan company, if it would protect its security, pay off the superior claims (evidenced by the certificates), together with the costs accruing in such foreclosure suits. This is the foundation of its present complaint, and, under the theory on which this injunction was sought, it is recognized that the appellant does not offer any contest of that portion of the original judgments decreeing the amount of indebtedness due for the paving itself and establishing the paving liens as first claims against the property. The object of this suit appears to be for the sole purpose of reducing^attorney’s fees and costs to what would be proper and reasonable, had the original suits been prosecuted as one.

In addition to the above contentions, the appellant alleges that, by an agreement between itself and the paving company, it was the duty of the latter to notify it that the paving liens were, in arrears, and, before filing suit and incurring any costs, give it an opportunity to pay off and take over tlie superior obligations; that the paving company knew it would pay the liens and save the costs, if notified; that it was not notified of the delinquency, nor made a party to the suits.

A dissolution of the injunction was sought and had on some or all of the following grounds: (1) That the loan company was not a party to the two original suits, and, thei'efore, had no interest in the subject-matter of, or judgments in, said suits; (2) the proceeding was a collateral attack on said judgments; (3) no meritorious defense was shown; and (4) that there was no agreement, as alleged, not to bring the two suits in question. I

We are of opinion that the contention that the paving company agreed to notify the loan company of any default in payment of these particular certificates is not supported by the testimony. This suit was instituted several months prior to the date on which it is alleged the agreement was made. Appellant’s general attorney testified' in the case and made no mention of such an agreement and reliance thereon.

That the paving company’s lien is a first enforceable claim against the two lots, and therefore a superior lien to appellant’s, seems to be conceded. Article 1090, above quoted, makes it so, and such is the holding in Marriott v. Corder et al. (Tex. Civ. App.) 4 S.W.(2d) 213.

The appellee, Pelphrey & Co., seeks to uphold the judgment dissolving the injunction on the grounds that the appellant, being a junior or subordinate lienholder, was not a necessary party to the two original suits foreclosing the paving liens, and that the appellant, after such foreclosures, merely stands in the position occupied by other parties who have held inferior or junior liens while the superior lienholder foreclosed. Such authorities as Milmo Nat. Bank v. Rich, 16 Tex. Oiv. App. 363, 40 S. W. 1032, 1033; Reagan v. Evans, 2 Tex. Civ. App. 35, 21 S. W. 427; and Silberberg v. Pearson, 75 Tex. 287, 12 S. W. 850, are cited as holding that junior lien-holders are proper but not necessary parties, and that, while the holder of a superior lien in a foreclosure suit might, if he saw proper to do so, join them as parties, yet if he did not do so, their rights, if any, remained unaffected by the judgment. Appellee’s contention is reflected by a quotation in its brief, taken from Milmo Nat. Bank v. Rich, supra: “In the present case the first mortgage was foreclosed by a judicial decree, without the joinder of the second mortgagee, and hence without any reference to or effect upon his rights. I-Iis position' is unchanged by such sale, and his remedy after sueh sale is precisely what it was before; and that is to foreclose his lien on the land, subject to the rights held under the first mortgage.”

To the same effect is McDonald v. Miller et al., 90 Tex. 309, 39 S. W. 89, 94, wherein it is said: “The rule is announced, by all the authorities, that a junior incumbrancer who is not made a party to a suit to foreclose a prior mortgage or lien is not affected by the judgment in such suit.”

Prom these premises the appellee reasons that the loan company, not being a party to the foreclosure suits nor a necessary party to the same, and not being bound by the judgments therein, it is a stranger to said suits and has no interest therein, and therefore is in no position to have said judgments set aside, or to enjoin the sale of the interest of said defendants in said judgments.

It may be conceded that the appellant was not a necessary but -merely a proper party to the original litigation, .but to bind it and its interest in the subject-matter of thoso suits, it was necessary for it to have been made a party thereto. It is a stranger to those suits and these respective judgments, but for the purpose of this suit that fact is a source of strength and advantage to it. Thus situated, and bearing such relation to the original judgment, it approaches and attacks each of them under and by virtue of the rule of law governing collateral attacks by strangers, as clearly stated in 34 C. J., p. 526, § 832: “A stranger to the record, who was not a party to the action in which the judgment was rendered nor in privity with a party, is not prohibited from impeaching the validity of the judgment in a collateral proceeding ; but in order to do so he must show that he has rights, claims, or interests which would be prejudiced or injuriously affected by the enforcement of the judgment, and which accrued prior to its rendition, unless the judgment is absolutely void.”

To the same effect is Freeman on Judgments, vol. 1, p. 636, § 319. Each text cites numerous authorities from many jurisdictions in support of the rule. Freeman lists one Texas case, Heard v. Vineyard (Tex. Com. App.) 212 S. W. 489, and C. J. cites the Texas case of Turner v. Maury (Tex. Civ. App.) 224 S. W. 255. To these we add McDonald v. Miller, et al., supra, and also cite 34 C. J., p. 1017, § 1441.

In Beatty v. Davenport, 45 Wash. 555, 88 P. 1109, 1111, 122 Am. St. Rep. 937, 13 Ann. Cas. 585, a stranger to the record in the original suit was permitted to attack the judgment therein. In its opinion, the court used this language: “A rule otherwise would permit a man to be condemned unheard, or his property taken without notice, which, of course, is contrary to the plainest' principles of law or justice. The basis of the rule that a judgment regular upon its face cannot'be attacked collaterally is that there has been an adjudication of the question between the parties. Where it appears from the face of the record that a party interested was not before the court, and had no notice or opportunity to bo heard, the rule does not apply. Such parties may be heard upon questions of both law and fact as fully as though no judgment had been rendered.”

An examination of the contentions presented by this record discloses that the appellant, the loan company, comes squarely within the rule of law stated. Its lien against the lots being foreclosed on evidences a pre-existing right to that of the appellee’s, although it is made subordinate by the statute cited. It is also made to appear, from the pleadings and the testimony, that the lien held by the appellant, under and by virtue of its deed of trust, constitutes such a right, claim, or interest in the subject-matter of the two foreclosures as will be prejudiced or injuriously affected by the enforcement of those judgments, in the event the costs and attorney’s fees included therein and contested by this appellant are in fact unnecessary, unreasonable, and unauthorized by law. Certainly, if the lots are sold under said executions, the costs herein challenged will be carried forward by the judgment and sale and made a part of the incumbrance the appellant must lift in order to protect itself and its security.

We do not hnow, and are not concerned with, what á trial on the merits of this ease will disclose. Nor do we express any opinion on the reasonableness of the attorney’s fees; but the point is, upon the pleadings and the testimony before us, thq appellant at least makes a prima facie showing of such rights as entitles it to be heard upon the issues of fact presented by its petition for injunctive relief. Braly v. Webster (Tex. Civ. App.) 4 S.W.(2d) 580, and authorities there cited.

We hold that the appellant showed a pri-ma facie meritorious defence to at least a. part of each judgment, and that is sufficient. As said in 34 C. J. p. 339, § 552, “It is not necessary that defense should go to the entire action; it is sufficient if it purports to defeat any substantial part of the plaintiff’s claim.”

If, upon another trial, the appellant shows itself able to eliminate any of the attorney’s fees and costs, or any portion thereof, the method of procedure in such event would be, in principle at least, that indicated in the opinion in Safe-Deposit Co. v. Wright (C. C. A.) 105 5\ 155, 158. There the judgment was attacked for fraud, and the court says: “It has become a well-settled rule, therefore, that subsequent creditors and plaintiffs in junior judgments may collaterally impeach the senior judgment as having been entered or obtained by collusion between plaintiff and defendant, with intent to defraud or hinder such subsequent creditors. In such case, if the impeachment be successful, the effect is not to vacate the judgment, but only to disallow its interfering lien, so far as such subsequent creditors are concerned, leaving it in force as between the original parties, and for all other purposes.”

As applied to the instant case, a tender of the amount due the appellee, as evidenced by the paving certificates, together with such attorney’s fees and costs as may be ascertained to he proper in the trial, will entitle appellant, the loan company, to a full discharge of the superior incumbrance on its security. We interpret its pleadings as making such tender.

In other respects, the original judgment, as between the parties thereto, will remain undisturbed.

In passing on the issues before us, we have .deemed the pleadings sufficient to allege the insolvency of those who executed and delivered to the appellant the note which it holds and alleges to be secured by the deed of trust. The pleadings are not as clear in this respect as they should be, for it is apparent that if they are solvent the appellant might not be entitled to the relief herein sought. This is said in view of the final trial.

For the reasons assigned, the judgment of the trial court dissolving the temporary injunction is reversed, and the cause remanded for a trial on the merits.


text:
    AMERICAN EXCHANGE NAT. BANK OF DALLAS v. KEELEY.
    No. 10736.
    Court of Civil Appeals of Texas. Dallas.
    Jan. 31, 1931.
    Rehearing Denied May 30, 1931.

      Coke & Coke, and Thomas J. Murnane, all of Dallas, for appellant.
    Coker, Wilson, Rhea & Neel, and J. Hardy Neel, all of Dallas, for appellee.
   VAUGHAN, J.

Appellee, Thomas F. Keeley, instituted suit November 24, 1928, against appellant bank, independent executor of the estate of S. T. Morgan, deceased, to establish a claim of approximately $15,000, alleged to have been advanced about August 12, 1925, to pay off a note signed by Aztec Oil Company, a corporation, as principal, on which said Morgan was one of four sureties by indorsement.

Appellee, among other things, alleged: That on June 21,1925, the Aztec Oil Company executed a note in the sum of $50,000, payable to the Houston National Bank of Houston, Tex., which was indorsed by W. H. Grey, S. T. Morgan, R. A. Welch, and L. A. Carlton; that thereafter, on October 15, 1925, appellee, on behalf of said Morgan, paid to the Houston National Bank the sum of $15,000 in discharge of Morgan’s liability on said note; that thereafter said Morgan, with knowledge of all the facts, approved, confirmed, and ratified the acts of appellee in making said pg.yment for his benefit, and promised and agreed in writing to pay appellee said sum of $15,-000 plus interest; that said Morgan wrote letters to appellee, admitting therein the justness of appellee’s claim and demand for the payment of said sum so advanced. Appellee further alleged that the sum of $4,478.49 had been paid to him and credited to the amount due him by said Morgan, but that the balance remained unpaid; that he duly and properly presented his claim to appellant, independent executor of the estate of said Morgan, which was refused.

Appellant’s answer consisted of a general demurrer, general denial, and the two and four year statutes of limitation. Upon conclusion of the trial on December 19, 1929, both appellant and appellee moved for an instructed verdict. Appellee’s motion was granted, and-judgment entered December 20, 1929, in his favor for $13,151.88; said judgment and the basic proceeding leading thereto are properly before this court for review and revision. Appellee’s suit was not filed within two years after the payment of said $15,000 to the Houston National Bank, and, to remove the bar of the limitation statutes, pleaded by appellant, appellee relied upon three letters received by him from S. T. Morgan, dated, respectively, July 17, December 14, and December 28, 1927.

Following are the material facts established without contradiction in the record: That on June 21, 1925, the Aztec Oil Company executed its promissory note in the sum of $50,-000, payable to the order of the Houston National Bank of Houston, Tex., with interest, thereon at the rate of 10 per cent, per an-num from maturity until paid, due 90 days after date; that said note was indorsed by W. H. Grey, S. T. Morgan, L. A. Carlton, and R. A. Welch; that on October 15, 1925, the sum of $5,000 was paid on said note; that $15,000 was paid on said note by appellee by his eheck dated October 12, 1925, payable to the order of the Houston National Bank; that on or about said date, the estate of L. A. Carlton paid $15,000 and R. A. Welch $15,000 on said note; that on the payment of said three sums of money the following indorsement was placed on said note: “Pay to the order of R. A. Welch, estate of L. A. Carlton and Thomas F. Keeley, without recourse or warranty on us. Houston National Bank, by Milton Rorff, .vice-president”; that some time after the next preceding indorsement was made, the exact date not being shown by the record, the following indorsement was made on said note: “This note is transferred to the Aztec Oil Company without recourse on us in consideration of the Aztec Oil. Company delivering to each of us its $15,000.00 secured notes as partial remuneration for these cash payments made by each of us on this note. [Signed] R. A. Welch, Estate of L. A. Carlton by Otis Meredith, Thomas F. Keeley”; that the Keeley named in said indorsements is the appellee herein; that said sum of $15,000 so paid by appellee was for the use and benefit of said Morgan, one of the indorsers on said $50,000 note in discharge of his liability thereon ; that said payment was made without the knowledge or consent of said Morgan. As to the circumstances under which appel-lee made the payment of said $15,000, Henry K. Maas, a witness for appellee, testified: “I know that Mr. Keeley gave that eheck; it was paid for Sam. T. Morgan and for his part of the indorsement on that note dated June 21, 1925; at that time, October 12, 1925, Mr. Morgan’s condition, physically and financially, was bad; he was a sick man; he stayed at home most of the time and his finances had gotten in very bad shape; he had lost lot of money, and at that time he did not have the cash to pay his portion of that note and the bank was demanding payment. W. H. Grey was head of the Aztec Oil Company and left very suddenly for Europe, and he was gone. The Bank demanded payment of Mr. Morgan and I wired Mr. Keeley, knowing that he was a personal friend and business associate, and Keeley came down and they had a meeting and Keeley agreed to pay Morgan’s part of the note * * * along with Carlton and Welch.”

Said Morgan was not advised of, and had no notice in reference to, any of the proceedings testified to by said witness, until long after said sum of $15,000 had been paid by appellee to the Houston National Bank to be applied as a credit on said $50,000' note for his use and benefit. Three letters written by Morgan to appellee were introduced in evidence, and from same we extract the following as being all that, in any respect, relates to the payment of said sum of $15,000 by said appellee, viz.:

From letter of date July-17,1927, we quote: “In my hurried reply to your letter I overlooked expressing my deep appreciation of your kindness in payment for my account $15,000 on the Aztec Oil Company note to the Houston Bank for $50,000 *■ * ⅜. I am in hopes that the Ratton Furniture Company will arrange by a larger loan to take up the second mortgage note and preferred stock and that at an early date in which evident' I can with what the Aztec bonds may pay, 25 to 30 per cent., pay you and the bank.”

From letter of date December 14, 1927, we quote: “I enclose statement, etc. and write you this somewhat lengthy letter for the purpose of suggesting or asking that after careful inquiry and investigation of the value and future of the 15th Avenue property that you consider taking it over in settlement or part settlement plus what may be finally realized, if anything, from the prorata of the Aztec Oil Company bond turned over by the Houston Exchange National Bank at the time the note was paid. I have no data of date paid and amount of payment of this note except that I know that through -kindness and your friendship for me, you voluntarily protected my liability on the note when payment of the note was demanded by the bank at the time I was sick; and I feel that had you not done so and kept the transaction from reaching me until I had somewhat -recovered my health that this additional financial loss and trouble would have been sufficient to push me over the divide. Therefore, I am very desirous of getting this matter adjusted to the limit of my ability and especially to your entire satisfaction.”

From letter of date December 28, 1927, we quote: “I ha-ve no word from Gray as to the affairs of the Aztec Oil Company. I did not expect any lengthy or very reliable report from him but I was in hopes of hearing from him to the extent of his estimate as to amount we would realize from the bonds, say, 20 to 30 cents on the dollar. At 20 cents we would get out of the bonds about $17,000 taken over from the Houston Bank $3400; this amount added to my equity in the Seattle property $19,294, mentioned in my letter of the 14th instant, would make total of $22,694, and would enable me to make a further reduction in the price of the property and leave balance sufficient to pay you the amount in full that you paid the bank — plus interest.”

We further find .that Morgan never did repay said sum of $15,000 to the Houston National Bank, or to appellee; that he died January 30, 1928; that, for the transfer by ap-pellee of said $50,000 note to the Aztec Oil Company, he received from said company a note for the sum of $15,000, and $17,000 worth of its bonds as security therefor, part of the bonds that had been held as collateral by the Houston National Bank for the payment of the $50,000 note.

While it is doubtful that appellee’s petition contains allegations sufficient to show that his cause of action was based upon a subsequent promise to pay the debt created by implication on account of the payment of said $15,000, and barred by the two-year statute of limitation at the time this suit was filed, nevertheless we will, for the purpose of disposing of this appeal, treat his petition as having alleged a new promise created by the three letters above set out as the foundation of his action, and that his allegations setting out his original cause of action were only made for the purpose of showing a consideration for the subsequent promise alleged by him to have been made. Coles v. Kelsey, 2 Tex. 542, 47 Am. Dec. 661; Howard & Hume, Adm’rs v. Windom, 86 Tex. 560, 26 S. W. 483; Leigh v. Linthecum, 30 Tex. 101.

It is to be affirmatively gathered from the contents of said three letters, supra, that said Morgan acknowledged a debt of $15,000 had been created against him in favor of appellee by the payment of that sum on the $50,000 note to the Houston National Bank, and expressed a willingness to pay appellee such debt. Coles v. Kelsey, supra; Smith v. Fly, 24 Tex. 345, 355, 76 Am. Dec. 109; Gathright v. Wheat, 70 Tex. 740, 9 S. W. 76.

Nevertheless, if' the acknowledgment of the debt was accompanied with a promise to pay conditionally, the fact that the new promise contained the expression of a willingness to pay the bar of the statute of limitation would not be removed against the original cause of action forming the basis for the making of the new alleged promise. We have diligently searched the contents of the letters and have not been able to gather therefrom more than a meager conditional promise to pay appellee the indebtedness that was barred •by the two-year statute of limitation at the time the suit was filed, and which constitutes the consideration for the making of the new alleged promise to pay. Mitchell v. Clay, 8 Tex. 443. In that case the court held:

“(I) It is perfectly well settled that the acknowledgment of a debt, if accompanied- with a promise to pay conditionally, is of no avail, unless the condition be complied with, or the event happen, upon which the promise depends.
“(2) An offer to pay a debt which is barred by the Statute of Limitations, in specific articles, is a conditional promise, and will not avail the creditor as an acknowledgment of the justice of the claim, unless the offer be accepted within a reasonable time.”

Appellee signally failed to establish that any one of the conditions upon which S. T. Morgan promised to pay said indebtedness was complied with, or that any one of the events to be found in said letters had happened upon which said promise to pay depended. McDonald v. Grey, 29 Tex. 80. From its syllabi we quote:

“(1) It is free from all doubt that an acknowledgment which, by its immediate effect, will take a debt out of the bar of the statute of limitation must be clear and unequivocal, and neither qualified by conditions nor limitations. (Paschal’s Dig., Art. 4617a, Note 1027a.) — [Smith v. Fly], 24 Tex. 353.
‘‘•(2) If the new promise be upon condition, the plaintiff must prove a compliance with, or the happening of, the condition. [Mitchell V. Clay], 8 Tex. 443. .
“(3) If the condition be the offer of a compromise, the plaintiff must prove that he accepted the teims.”

In Webber v. Cochrane, 4 Tex. 31, it is held:

“The bar interposed 'by the statute, it is held now, can be repelled only by-an express promise, which must be proved in a clear and ex-plieit manner and be, in its terms, tineqnivocal and determinate. And if there be no express promise, bnt one is to be .raised by implication of law, from tbe acknowledgment of the party, such acknowledgment should contain an unqualified and direct admission of a previous subsisting debt which the party is liable and willing to pay; or the acknowledgment must be coupled with such circumstances as irresistibly imply a promise to pay, and unaccompanied by any ‘expression declarative, or qualification indicative, of a contrary intention.’ ([Bell v. Morrison], 1 Pet. 362 [7 L. Ed. 174]; [Young v. Monpoly], 2 Bailey [S. C.] 280; [Bell v. Rowland’s Adm’rs], 1 Hard. [Ky.] 301 [3 Am. Dec. 729]).
“These rules of construction were generally recognized before the enactment in England, Texas, New York, -and perhaps other States, of a further security against the defeat of tlie statute, by requiring authentic written evidence of the alleged promise or acknowledgment.”

Salinas v. Wright, 11 Tex. 572, from which we quote:

“Where the defendant had acknowledged in writing, that he was indebted to the plaintiff in a certain amount, which he promised to pay as soon as circumstances would permit,- it was held that the plaintiff could not recover, on that instrument alone, without proof of the ability of the defendant to pay.
“Where the petition alleged a promissory note, and the plaintiff, instead thereof, proved a promise to pay as soon as circumstances would permit, and did not prove the defendant’s ability to pay, it was held that the foundation of the action so manifestly failed, that the objection could be taken, although it was not assigned as error.”

Also see Krueger v. Krueger, 76 Tex. 178, 180, 12 S. W. 1004, 7 L. R. A. 72; York v. Hughes (Tex. Com. App.) 286 S. W. 165; Smith v. Fly, supra; Rowlett v. Lane, 43 Tex. 274, 276.

Appellee’s cause of action was upon the implied promise created by the payment of the $15,000 by him on the $50,000 note for the use and benefit of S. T. Morgan, and not upon that note or the note for $15,000 executed by the Aztec Oil Company to appellee, and said original cause of action, under the facts of this case, was barred by the statute of limitation 'of two years at the time this suit was instituted. Faires v. Cockerell, S8 Tex. 428, 31 S. W. 190, 639, 28 L. R. A. 528; Boyd v. Beville, 91 Tex. 439, 44 S. W. 287.

In view of the fact that a determination of the propositions not herein discussed is not necessary to a disposition of this appeal, same is pretermitted.

We are of opinion that the judgment of the trial court'should be reversed, and judgment here rendered for appellant, that appellee take nothing by'his suit, and it is so ordered.

Reversed and rendered.

'On Appellee’s Motion for Rehearing.

From this motion it is made to appear that the trial court, in instructing the jury to return a verdict in favor of appellee, was actuated by the theory on which the case was presented, not so much by appellee’s petition as by the way appellant’s defense thereto shaped and made prominent the theory that appellee’s case, as developed, rested entirely on the following allegations of his petition:

“That thereafter on October 15, 1925, and after the last said note heretofore mentioned became due, and after payment of same had been demanded by the Houston National Bank, and of the Aztec Oil Company and the endorsers,. W. H. Gray, S. T. Morgan, L. A. Carlton and R. A. Welch, said note was credited with a Five Thousand ($5000) Dollar payment. That on the same date, the plaintiff, Thomas F. Keeley, for and in behalf of- S. T. Morgan, then living, but now deceased, paid the sum of Fifteen Thousand ($15,000) Dollars to the Houston National. Bank, which was credited on the note heretofore described; that Fifteen Thousand ($15,000) Dollars was paid the Houston National Bank by the estate of L. A. Carlton, then deceased, and Fifteen Thousand ($15,000) Dollars was also paid by R. A. Welch, and the said note was, at that time, endorsed by the Houston National Bank to R. A. Welch, the estate of L. A. Carlton, deceased, and the plaintiff, Thomas F. Keeley, without recourse.
“That thereafter, tbe said 6. T. Morgan,now deceased, recovered from his then sickness, and was again restored to his health sufficiently to transact his business and manage his property, and after being advised that the plaintiff, Thomas F. Keeley, had, for and in behalf of S. T. Morgan, paid the sum of Fifteen Thousand ($15,000) Dollars on the said note, he, the said S. T. Morgan, ratified and approved the payment of said sum of money by the plaintiff, by acknowledging in writing the justness of the claim, and acknowledging in writing the payment made by Thomas F. Keeley, and approving of same, and stating and agreeing therein to reimburse and pay to the plaintiff the entire amount paid by him, together with interest thereon.”

That appellant interpreted appellee’s cause of action as being based upon a verbal promise of decedent, Morgan, made October 15, 1925, to repay him the sum of $15,000 paid by appellee to the Houston National Bank, on which said Morgan was one of four sureties, is evidenced by the fact that appellant llased its entire defense thereto upon a general denial and the two-year statute of limitation, and confined the introduction of evidence principally in support of its plea of limitation. Ap-pellee, to remove tile bar of limitation thus pleaded and sought to be established, relied upon the three letters written by decedent, Morgan, to him, contending that same was sufficient to and did remove the bar of the two-year statute of limitation, in that same constituted an acknowledgment coupled with a promise to pay the indebtedness then claimed and to recover which this suit was filed. This is further borne out toy the following grounds contained in appellant’s motion for a new trial: “(a) Same is not supported by the pleadings, in that the plaintiff sues upon an implied promise to repay money advanced in October, 1925, while by said letters he seeks to prove and recover upon a different tract not alleged in the pleadings; (b) same is not supported by the pleadings, in'that, plaintiff sues herein upon an implied contract to repay money advanced for defendant in- October, 1925, while by said letter he seeks to set up and recover on a different contract; (c) said letter is insufficient as an acknowledgment of the debt in accordance with the requirements of article 5539, Revised Civil Statutes of Texas, 1925, for the following reasons: (1) It contains no unqualified absolute promise to pay, (2) contains no acknowledgment of the debt, (3) does not refer to or identify the alleged debt sued on herein, (4) contains an offer upon condition, (5) consists of a mere offer of compromise. ⅜ * ⅜ ”

We are to assume that appellant’s contentions in the court below were the same as in this court, and that appellee opposed same in the .trial court in keeping with some of his counter propositions presented on this appeal.

The above review of the proceedings in the court below, as reflected toy the record before us, is no doubt explanatory of the action of the trial court in instructing a verdict in favor of appellee, and of this court’s action in reversing and rendering the case on the ground that the trial court should have rendered judgment in favor of appellant based upon the issue upon which the .trial court’s peremptory instruction was predicated in favor of appellee. A careful investigation of the case, as made by pleadings and the evidence, disclosed a situation necessitating the granting of appellee's motion for rehearing, in that the following testimony clearly presented material issues of fact that should have been submitted to the jury for their determination: “That on the 23rd day of March, 1925, the Aztec Oil Company, by W. H. Gray, its president, executed and delivered to the Houston National Exchange Bank of Houston, Texas, its promissory note, in the principal sum of Fifty Thousand ($50,000) Dollars, d-ue ninety days after date, which note was secured by gold bonds of the Aztec Oil Company, being Numbers 116 to 117, inclusive, in the amount of One Thousand ($1,000) Dollars, each, and bonds Numbers 254 to 309, inclusive, in the amount of Five Hundred ($500) Dollars, each. That the said Fifty Thousand Dollar note Was endorsed in blank by W. H. Gray, S. T. Morgan, R. A. Welch and L. A. Carlton. That said note was renewed on the 21st day of June, A. D. 1925, by the execution by the Aztec Oil Company of its note in the sum of Fifty Thousand ($50,000) Dollars, payable ninety days after date, to the Houston National Bank of Houston, 'Texas, the successor in business of the Houston National Exchange Bank, which note was secured by the same bonds of the Aztec Oil Company, hereinbefore more particularly described, and was endorsed by Gray, Morgan, Carlton and Welch.”

On October 15, 1925, the note dated June 21, 1925, became due, payment was demanded by the holder thereof, the Houston National Bank, of the Aztec Oil Company, and indors-ers, Gray, Morgan, Welch, and the estate of L. A. Carlton, deceased ; that at said time the sum of $5,000 was paid on said note by the Aztec Oil Company and appellee paid the sum of $15,000, the estate of L. A. Carlton, deceased, $15,000, and R. A. Welch, $15,000, which said payments were credited on said note, and it was indorsed by the Houston National Bank, as follows: “Pay to the order of R. A. Welch, estate of L. A. Carlton, deceased, and Thomas F. Keeley, without recourse or warranty on us,” and delivered to said in-dorsees ; that, at the time said indorsement was made, appellee delivered to the Houston National Bank the following check, duly drawn and signed by him, viz.: “Continental & Commercial Trust & Savings Bank, Chicago, ’Oct. 12, 1925. Pay to the order of Houston National Bank $15,000 — Fifteen Thousand no/100 dollars. [Signed] Thomas F. Kee-ley,” on which the Houston National Bank received the sum of $15,000 and applied same as a payment on said $50,000 note; that said $50,000 note was immediately thereafter transferred and delivered by said Welch, estate of L. A. Carlton, deceased, and appellee, Keeley, to the Aztec Oil Company as per their indorsement thereon: “This note is transferred to the Aztec Oil Company, without recourse on us, in consideration of the xlztec Oil Company delivering to each of us its Fifteen Thousand ($15,000) Dollar secured notes, as partial remuneration for the- cash payment made by each of us on this note”; that, at the time said transfer was made, appellee, Keeley, received from the Aztec Oil Company, as consideration for the making of the transfer, one note in the sum of $15,000, executed by said Aztec Oil Company, payable to said appellee, Keeley, and also received from said oil company for the purpose of securing the payment of said $15,000 note, bonds of said oil company of the face value of $17,000; that, at the time of said transactions, the decedent, S. T. Morgan, was very sick, in a dangerous and critical physical condition; that the Houston National Bank, payee in said note, was demanding payment of same and threatening to take necessary legal steps to enforce its collection; that appellee and said Morgan had been very friendly for thirty years as business associates; that Morgan died January 30, 1928; that the record does not show what disposition was made by appellee of said $15,000 note and bonds in the sum of $17,000, received from the Aztec Oil Company.

It is not to be gathered from the evidence, there being no degree of testimony to that effect, that decedent, Morgan, knew anything about or was ever advised by any one in reference to the transactions that were in fact had in reference to the handling and disposition made of said $50,000 note by appellee Welch and the estate of L. A. Carlton, deceased ; but, to the contrary, it appears therefrom that the transactions in refer'ence thereto were not disclosed to said Morgan. The only evidence introduced in this respect were the statements contained in the three letters written by said Morgan to appellee and the testimony of appellee’s witness Maas as set out herein and in our original opinion.

Article 5526, R. S. 1925, in part reads: “There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, all actions or suits in- court of the following description. * * ⅜ ” When can it be said that a cause of action has accrued within the meaning of said statute, becomes a material inquiry in view of the contentions of the parties litigant. In the cáse of Port Arthur, etc., v. Beaumont, etc., Mills, 105 Tex. 514, 143 S. W. 926, 928, 148 S. W. 283, 150 S. W. 884, 152 S. W. 629, the following rule is announced: “ * * * Before it can be said that a cause of action exists in a legal sense, there must be such a mature right as may be declared upon and maintained, subject only to such valid defenses by which it may be defeated. In 25 Cyc. 1065, the rule is laid down as follows: ‘ “The accrual of the cause of action” means the right to institute and maintain a suit; and whenever one person may sue another a cause of action has accrued, and the statute begins to run.’ Again, in 25 Cyc. 1065, it is said: ‘The statute of limitation begins to run from the time when a complete cause of action accrued — that is, when a suit may be maintained — -and not until that time.’ ”

The statute of limitation, therefore, can only be put in motion under said article when the right or cause of action accrues,, and not before, and this does not exist until facts have arisen which authorize' a person assernnjrTpcraim 'to obtain relief from some court of justice against the person liable on the alleged cause of action. Stanley v. Schwalby, 85 Tex. 348, 19 S. W. 264; Beach v. Wilson County, 62 Tex. 331; Reese v. Cobb (Tex. Civ. App.) 135 S. W. 220; Kansas City, M. & O. Ry. Co. v. State (Tex. Civ. App.) 155 S. W. 561; 37 C. J. 810, § 153.

Within itself, the voluntary payment by A of a debt due by.B, without B’s request, would not create a legal liability on the part of B to repay A the sum of money so paid for the use and benefit of B. Mings v. Griggsby Const. Co. (Tex. Civ. App.) 106 S. W. 192; Donaghey v. Williams, 123 Ark. 411, 185 S. W. 778; Pittsburgh-Westmoreland Coal Co. v. Kerr, 220 N. Y. 137, 115 N. E. 465.

In order for a causé of action to accrue on account of such transaction, it would be necessary that B, with a full knowledge of same, sanction and adopt the payment made by accepting the benefits thereof. However, if such payment is sanctioned and adopted by B (debtor), he thereby makes A (payor) his agent, and the promise to refund will be implied. Ross v. Pearson, 21 Ala. 473 ; Lee’s Ex’rs v. Virginia & Maryland Bridge Co., 18 W. Va. 299; Neely v. Jones, 16 W. Va. 625, 37 Am. Rep. 794; Wolff v. Matthews, 39 Mo. App. 376; Hodge v. De Laine, 137 S. C. 337, 135 S. E. 357; 41 C. J. 19 § 19.

Therefore, a cause of action would only accrue and legally exist on account of such voluntary payment from the date same was sanctioned and adopted by B, and the statute of limitation would only run from that date. Deaton v. Rush, 113 Tex. 176, 252 S. W. 1025; Southwestern Lumber Co. v. Evans et al. (Tex. Civ. App.) 275 S. W. 1078; Jones County v. Moore (Tex. Civ. App.) 4 S.W.(2d) 289; Angelina County v. Bond (Tex. Civ. App.) 16 S.W.(2d) 338; Irvine v. Angus (C. C. A.) 93 F. 629; Goodnow v. Stryker, 61 Iowa, 261, 16 N. W. 486; Pleasant Valley Hotel Co. v. Henderson, 33 Cal. App. 76, 164 P. 420; Runyon v. Snell, 116 Ind. 164, 18 N. E. 522, 9 Am. St. Rep. 839.

Following are the material issues that were presented by the pleadings and supported by evidence, herein set out, and that in the original opinion, which should have been but were not submitted to the jury, viz.:

(a) Whether or not appellee voluntarily advanced and paid $15.000 for decedent, Morgan, on the involved $50,000 promissory note;

(b) did decedent, Morgan, thereafter, with knowledge of all of the facts under which said $15,000 was paid, accept the benefits of same;

(c) whether or not said transaction was an investment by appellee for his own use and benefit. From this it follows as a natural sequence that, not only the court below erred in instructing a verdict to be returned in favor of appellee, but likewise1 this court committed error, not in reversing the judgment of the lower court, but in rendering judgment in favor of appellant.

Appellee’s motion for rehearing is therefore granted, and the judgment heretofore entered, reversing and rendering this cause, is set aside, and, instead thereof, judgment is now rendered reversing and remanding said cause for further proceedings not inconsistent with this opinion.

Reversed and remanded.

On Appellant’s Motion for Rehearing.

In our original opinion, we did not discuss appellant’s propositions based upon the action of the trial court in overruling appellant’s objections to and permitting the following testimony of appellee, by deposition, to be introduced in evidence:

“Q. Please state what comprised the securities on the fifteen thousand dollar note delivered to you? A. I got the fifteen thousand dollar note with seventeen thousand dollars worth of Aztec Oil Company bonds. The bonds were as collateral to the note to the Houston National Bank.
“Q. Mr. Keeley,'state for whom, if any one, you were acting when you received the fifteen thousand dollar note, together with the securities referred to above? A. I was acting for Sam Morgan.
“Q. State whether or not you accepted that note and the securities as in, full payment and settlement due you of the amount you had paid for Mr. Morgan? A. No sir, I merely acted for Sam Morgan to relieve him of that responsibility until such time as he could take care of it himself.”

Appellant objected thereto on the following grounds: (a) That every question and answer therein related to an alleged transaction by plaintiff with the decedent, S. T. Morgan, and as such was inadmissible under the provisions of Article 3716, R. S. 1925; (b) same constitute a self-serving declaration by plaintiff as to an alleged transaction on behalf of decedent; and (c) same was offered for the purpose of varying * * * the unambiguous terms of the indorsement upon the note dated June 21, 1925, showing that plaintiff surrendered and canceled the alleged obligation and accepted in lieu thereof the new obligation of said principal, Aztec Oil Company, for which company decedent, Morgan, was surety, and was inadmissible for the purpose of varying or contradicting the purpose and effect of said surrender and cancellation. In its motion for rehearing, appellant assigns this omission as error. Therefore, and in view of the fact that appellant is entitled to have this court “file a conclusion of fact and law upon” said points under articles 1373 and 1875,. R. S. 1925, relating, respectively, to conclusions of fact and law and supplemental findings, said motion to that extent is granted.

Evidence inhibited by article 3710, supra, is as to “any transaction with, or statement by, the testator, intestate or ward,” and unless the evidence so objected to related to a transaction with decedent, Morgan, appellant’s objection (a) was properly overruled.

A careful analysis of said testimony we think demonstrates that same was not in reference to any transaction had with decedent, Morgan, in that, by other uncontradicted evidence, it was established that no transaction in reference to the facts so testified to was had by appellee with deceased, Morgan, and, further, that appellee was testifying as to his intention; in other words, that mental attitude which moved him to engage in the transaction involving the payment of $15,000 on the note for $50,000, and the • other acts related thereto, and not as to any transaction had with decedent. Dean v. Dean (Tex. Civ. App.) 214 S. W. 505; Potter v. Wheat, 53 Tex. 401; Dodson v. Watson (Tex. Civ. App.) 225 S. W. 586; Bradley v. Bradley’s Adm’r, 178 Ky. 239, 198 S. W. 905; Omlie v. O’Toole, 16 N. D. 120, 112 N. W. 677; In re Knibbs’ Estate, 108 App. Div. 134, 96 N. Y. S. 40; Larson v. Swingley, 105 Neb. 116, 179 N. W. 303.

We are aware • of’ the fact that there are some expressions in the following cases that prima facie appear to be in conflict with the above holding, viz.: Holland v. Mimitz, 111 Tex. 419, 423, 433, 232 S. W. 298, 239 S. W. 185; Neitch v. Hillmann, 29 Tex. Civ. App. 544, 69 S. W. 494; Heath v. Moore (Tex. Civ. App.) 146 S. W. 709; Anderson v. Caulk (Tex. Civ. App.) 5 S.W. (2d) 816; Horlock v. Guardian Trust Co. (Tex. Civ. App.) 274 S. W. 204; Madero v. Calzado (Tex. Civ. App.) 281 S. W. 328. However, after a careful analysis of the facts of each of these cases, we have reached the conclusion that same do not present a real conflict.

As to objection (b), we think it is sufficient to say that, although in a sense said testimony was self-serving, in that, it could only be of beneficial interest to appellee, yet it was admissible on a material issue, viz. In what respect- did appellee in fact act, to make an investment for himself or to render a voluntary service to said Morgan ? The environments of this case, both as to pleadings and evidence, relieved said testimony from being self-serving, as that term, in legal parlance, is generally used. This, in the main, because said testimony was not absolutely inconsistent with the existence of facts different from those so testified to as same may be harmonized with, or used in explanation of, such different acts. State v. Lockett, 168 Mo. 480, 68 S. W. 563, 565; Brosnan v. Boggs, 101 Or. 472, 198 P. 890, 892.

As to objection (c), we do not think said testimony appears from the record to have been offered merely for the purpose of contradicting the indorsement of date June 21, 1925, upon the $50,000 note or the wording of the note for $15,000 received by appellee, nor to contradict the purpose and effect of the surrender and cancellation of the $50,000 note to the Aztec Oil Company, but as evidence bearing upon and to be taken into account in determining whether or not there existed, because of said transactions, a cause of action in favor of appellee.

We therefore hold that the court did not err in overruling said objections and in admitting said testimony. Said motion is in all things overruled.

Overruled.


author: FUNDERBURK, J.

text:
    MERCHANTS’ COTTON OIL CO., Inc., v. ACME GIN CO., Inc.
    No. 872.
    Court of Civil Appeals of Texas. Eastland.
    May 29, 1931.
    Rehearing Denied June 19, 1931.
    Beall & Beall, of Sweetwater, for appellant.
    Edward J. Hamner, of Sweetwater, for ap-pellee.
   FUNDERBURK, J.

Merchants’ Cotton Oil Company, Inc., brought this suit against Acme Gin Company, Inc., to recover damages for breach of a contract hy which the latter sold to the former 650 tons of cotton seed at $42.75 per ton. Plaintiff alleged that, as a result of defendant’s failure to deliver the seed, it was forced to go into the market and buy other seed at the price then prevailing of $53 per ton, or a total of $6,662.50 in excess-of the contract price, for which amount as damages judgment was sought. Among the defenses pleaded was a general denial. The judgment was determined by a single issue, which, as submitted to the jury and by them answered, was as follows: “Has plaintiff established, by a preponderance of the evidence, that the defendant made the contract with the plaintiff which is set out in plaintiff’s petition ? Answer yes or no. Answer No.”

Judgment having been rendered for defendant, plaintiff prosecutes this appeal.

Whether' defendants made the contract with plaintiff, as alleged, to sell the seed, was a material and sharply controverted issue upon the trial. Plaintiff offered in evidence on that issue a telegram as follows-:

“Roscoe, Texas, Oct. 10, 1923.
“Merchants Cotton Oil Co., Shreveport, La.
“Wire me your price in cancellation of contract made with you yesterday.
“R. E. Graeey.”

Objection was made and sustained, and the evidence excluded on the- ground that the telegram was sent in an effort to effect a compromise of the controversy involved' in the suit. The action of the court in excluding this evidence is complained of and presented as the first ground relied upon by appellant for a reversal of the judgment. The telegram did not purport on its face to be part of any negotiations for the compromise of a controversy. We do not understand appellant to contend that it does. When the objection was made, the court excused' the jury, and, in their absence, heard evidence to determine whether in fact the telegram had been sent in pursuance of a purpose to negotiate a compromise, and concluded that it had. The action of the court, including the testimony heard in reference to the matter, was emr bodied in a bill of exceptions. The testimony shows that R. E„ Graeey was the representative of the defendant who made the contract in question, if any was made; that such contract was negotiated through W. H. Brooks of Abilene. Graeey testified th^t, prior to the sending of the telegram, he had a telephone conversation with Brooks in which Brooks contended that a contract had been made, and the witness contended that a contract had not been made, and that Brooks had expressed an intention to hold the defendant to a liability for his commission in negotiating the contract.

Appellee contends that the question of the admissibility of the telegram was determined against appellant by this court upon a former appeal of the case, and that that decision having been permitted to become final, has become the law of the case. Merchants’ Cotton Oil Co. v. Acme Gin Co. (Tex. Civ. App.) 254 S. W. 680. It is true, as shown in the opinion, that this court did sustain the action oí the trial court in excluding this telegram, and that the same procedure was followed in presenting the question; namely, the court heard evidence to determine if the telegram in fact constituted a part of negotiations for a compromise settlement.

We have made a thorough reinvestigation of the question presented, and have only succeeded in convincing ourselves that it is one of extreme difficulty. Obviously, the telegram was of a highly probative nature upon a material issue. Its exclusion can only be justified, if at all, in order to serve the purpose which makes negotiations for a compromise of controversies inadmissible. The telegram was not an offer. It was at most a solicitation of an offer or proposition from appellant. Many authorities seem to suggest that the rule of exclusion extends only to offers or propositions for compromise. Others, however, appear to go further and include any and all statements made in the negotiations for a compromise settlement of an existing or prospective controversy. We have concluded that the question of the admissibility of this testimony is so close that we would not be justified in now reversing the position of this court upon the question. There seems to be here presented an instance where the principle familiarly known as the “law of the case” is especially applicable. • Upon this principle, and the authority of the former decision, we are disposed to sustain the action of the trial court.

The second ground urged by appellant for á reversal of the judgment embodies the contention that the form of the special issue above quoted directed the jury to a consideration of the evidence offered by plaintiff to the exclusion of the evidence, if any, offered by the defendant, going to show the existence of the contract. We are of opinion that the special issue is subject to that criticism, it is true enough that the plaintiff had the burden of establishing, by a preponderance of the evidence, the contract alleged, but the issue was one -to be determined from a consideration of all of the evidence in the case. It might well be true that the plaintiff, although offering some slight evidence, could fail to prove the contract by evidence which we would be justified in holding sufficient, and yet the contract be 'fully proved when plaintiff’s evidence was reinforced or augmented by evidence offered by the defendant. It is deemed unsafe to speculate as to the effect upon the jury of an improperly stated issue. Clearly, the real issue was whether or not it was shown by a preponderance of the evidence that the contract as alleged was made by the parties. We deem it unnecessary to go into a further discussion of the-question because of the disposition of the case which we make by reason of the next proposition considered. There is no occasion for the same question to arise upon another trial.

Appellant next insists that the following instruction, given in connection with the special issue above quoted, was erroneous. The instruction was: “In connection with the foregoing special issue, I charge you that a contract can only be made upon a definite offer upon one side, stating the terms and' the-amount of the consideration, and an acceptance upon the other side, either by a formal acceptance or an acquiescence, which makes-it certain that the offer made was intended to be accepted, and in order to constitute a contract the minds of the parties must meet, as to all of the terms.”

We find no objection to that part of the- instruction which directed the jury that, in order to constitute a contract, the minds of the parties must meet as to all of the terms, except perhaps that it was a general charge rather than a definition, and therefore not proper to be given in a ease submitted to the jury upon special issues. Such objection, was not made, and is not considered. But the record discloses, we think, that the contract alleged by appellant was not an express- contract as to all of its terms. The evidence suggests that some of the terms of the contract were implied from those expressed. Such being the case, it was misleading to tell the jury that a contract could “only be made upon a definite offer upon one side, stating the terms, (italics ours) and the amount of the consideration.” It must be presumed that the jury made their finding based, upon a compliance with said instruction. They had only to consider plaintiff’s testimony as to the provisions of the contract, and, upon comparison of same to the allegations of the petition, to ascertain that some of the terms alleged in the petition were not stated in any proposition, the alleged acceptance of which was claimed to have resulted in the contract. In other words, the jury, in strict compliance with the instructions, may have made the finding they did as to the existence of the contract based solely upon their determination that some of the alleged provisions of the contract were not expressly mentioned in the negotiations over the telephone, which were claimed to have resulted in the contract.

Because of this error, it is pur opinion that the judgment of the trial court should be reversed, the cause remanded for another trial, and it is accordingly so ordered.

LESLIE, J., not sitting.