author: WALKER, Chief Justice.

text:
    ELMORE et al. v. PEAVY.
    No. 3621.
    Court of Civil Appeals of Texas. Beaumont.
    Oct. 10, 1940.

      Daniel & Daniel, of Liberty, and Pitts. & Liles, of Conroe, for appellants.
    Thos. A. Wheat and T. J. Hightower,, both of Liberty, and Jeff Cochran, of Cleveland, for appellee.
   WALKER, Chief Justice.

On the 8th day of' October, 1938, on-highway No. 35, a collision occurred in Polk county between a truck and a Ford touring car in which Mrs. Ella Peavy, the wife of appellee, W. F. Peavy, was riding. This suit was filed in the district court of Liberty county on the 12th day of January, 1939, by appellee against Frank Hill El-more and H. M. Elmore, appellants, for damages for the injuries suffered by his wife in the collision. He alleged that the-truck was owned and operated at the time of the collision by Frank Hill Elmore and, H. M. Elmore, doing business as partners, under the firm name of Elmore & Son. H. M. Elmore answered under oath, denying the partnership as alleged by appellee, and further by pleas of general and special demurrers, general denial, etc. Frank Hill Elmore answered by pleas of general and special demurrers, general denial, etc. The-jury found against FI. M. Elmore on the-issue of partnership, and in favor of ap-pellee on the issues of negligence plead as the proximate cause of the collision, and assessed appellee's"" damages at the sum of $2,750. On the verdict, judgment was entered in favor of appellee for the damages assessed by the jury, from which appellants have duly prosecuted their appeal to this court.

H. M. Elmore’s first proposition is to" the effect that the evidence did not raise against him the issue of partnership with Frank Hill Elmore, and that the court erred in refusing to instruct a verdict in his favor. We sustain this proposition.

Denying the partnership as of the time of the collision, appellants offered the following testimony:

(1) The existence of a gin partnership between H. M. Elmore and his son, Frank Hill Elmore, during the years 1935, 1936 and 1937, with one gin at Cold Springs, one at Old Waverly, and one at Shepherd, Texas. H. M. Elmore testified that this partnership was dissolved in January, 1938, and that he never subsequently had any partnership of any kind or character with Frank Hill Elmore, and that in the dissolution of the partnership Frank Hill El-more took the gins at Cold Springs and Old Waverly, and he took the gin at Shepherd; that in May of 1938, he sold his gin at Shepherd to a certain party who lived at Huntsville. He testified further that at the time of the collision in issue in 1938 he had no partnership of any kind with Frank Kill Elmore.

(2) On the issue of the partnership during 1935, 1936 and 1937, and its dissolution in January, 1938, Frank Hill Elmore testified to the same facts testified to by his father, H. M. Elmore. He testified further that he still owned the gins at Cold Springs and Old Waverly, taken by him in the dissolution of the partnership, but that his father had sold the gin at Shepherd, taken over by his father in the dissolution. He testified that, subsequent to the date of the dissolution of the partnership in January, 1938, no partnership-of any kind or character existed between him and his father. He testified, and thi» point was established by other testimony beyond controversy, that the truck involved in the collision in issue was owned by him, operated by him, controlled by him, and that he employed and paid for the driver. The testimony was beyond controversy that H. M. Elmore had no interest in this truck, nor in its control and management, nor in its operation.

(3) Mr. Elliott Campbell, the banker with whom Elmore & Son, the partnership, did their business, testified: “I know H. M. and Frank Hill Elmore. They did business at my bank; they still do business as individuals. From 1935 to January, 1938, they carried a partnership account under the name of Elmore & Son. They were engaged in ginning and farming. After January 11, 1938, they did not have a deposit account with my bank under the name of Elmore & Son. Each of them told me during the month of December, 1937, that they were dissolving the partnership; that they were dissolving it the first of the year; that was the term used. They came in and closed out the account; the account was closed by Frank Hill Elmore on January 11, 1938. Both of them told me they were dissolving the partnership. At the time the partnership was dissolved Elmore & Son owed the bank. The farming operations were handled in the name of H. M. Elmore or borrowings in connection with the farming. In connection with the gin, it was Elmore & Son. That was the way the ex-obligations were signed, and on March 11, 1938, we renewed all of this paper in the name of H. M. Elmore and F. M. Elmore as individuals and eliminated the partnership. These obligations’ had been incurred under the partnership. They dissolved partnership and were unable to pay at that time. To keep from releasing either one we renewed it, letting each one sign H. M. and F. H. Elmore. They renewed the obligations as individuals.”

(4) At the time of the collision, the truck was loaded with cotton; the testimony was1 beyond controversy that H. M. Elmore had no interest in this cotton and no interest in its transportation.

As we construe the evidence, it established beyond controversy that, at the time of the collision, no partnership of any kind or character existed between FI. M. Elmore and Frank Hill Elmore, and that H. M. Elmore was not interested in the operation of the truck. The partnership that existed between H. M. Elmore and Frank Hill Elmore during 1935, 1936 and 1937, was dissolved, in January, 1938; that point was clearly established. Not only did H. M. Elmore and Frank Hill Elmore testify to the dissolution, but that fact vyas established by the testimony of Elliott Campbell, a disinterested witness, whose testimony on this issue must be accepted as true.

The circumstances relied upon by appellee, as against the testimony offered by appellants, did not raise the issue of partnership.

(1) Appellee showed, and that fact was admitted, that the doors of the truck had-printed on them,

“Elmore & Son

“Ginners

. “Willis, Tex. Rt. 2”

As to the weight of this circumstance, in Freeman v. Texas Bread Co., Tex.Civ.App., 111 S.W.2d 307, 308, the court said: “In the absence of any controverting proof, testimony that the defendant’s truck involved in the collision bore a sign containing the name, Texas Bread Company, is sufficient to raise the presumption of ownership of the truck by defendant, and agency and scope of employment of the driver.” But the testimony in this case controverted, and established bejrond issue, that at the time of the collision H. M. Elmore and Frank Hill Elmore were not partners. The fact that “Elmore & Son” was printed on the door of the truck simply gave rise to an inference of partnership, which, as a matter of law, was rebutted when appellants offered their testimony, clearly establishing that the partnership had been dissolved. Wilhite et al. v. Horton et al., Tex.Civ.App., 116 S.W.2d 807; Mrs. Baird’s Bakery v. Davis, Tex.Civ.App., 54 S.W.2d 1031, 1032; Austin Bros. v. Sill, Tex.Civ.App., 83 S.W.2d 716, 717; Younger Bros. v. Power, Tex.Civ.App., 92 S.W.2d 1147; Harper v. Highway Motor Lines, Tex.Civ.App., 89 S.W.2d 448, 450; Haden Co. v. Riggs, Tex.Civ.App., 84 S.W.2d 789; Riggs v. Haden & Co., 127 Tex. 314,. 94 S.W.2d 152; Alfano v. International Harvester Co. of America, Tex.Civ.App. 121 S.W.2d 466.

(2) Appellee puts great weight upon the statement made by Adair Lewis, the driver of the truck, immediately after the collision, that he was working for “Elmore & Son.” He denied making the statement, but accepting as true appelleé’s testimony that he did- make it, it was without probative weight. Agency cannot be established by the hearsay declaration of the agent. Lewis v. J. P. Word Transfer Co., Tex.Civ.App., 119 S.W.2d 106; Alfano v. International Harvester Co. of America, Tex.Civ.App., 121 S.W.2d 466.

(3) A few minutes after the collision, Adair Lewis, with those who were in the Ford car, left the place of the collision and went to a nearby house. One witness testified that, in answer to a request to write the name of his employer, he wrote “Elmore & Son” on a card. He testified that he -was asked to write the name which was on the truck door. Clearly, to write the name on the card was no part of the duties of his employment, was pure hearsay, and in no sense a part of the r.es ges-tae.

(4) No probative weight can be given to the fact that the tax renditions made in May, 1938, listed the three gins as owned by the partnership as of January 1, 1938. H. M. Elmore and Frank Hill Elmore were required to reader their property as of January 1, 1938.

(5) That a partnership existed between H. M. Elmore and Frank Hill Elmore in 1935, 1936 and 1937, did not raise a presumption that the partnership continued on through 1938.

(6) That the dissolution of the partnership was not published until after the accident was without probative weight.

- Under all the testimony, H. M. Elmore was not a partner with Frank Hill Elmore, and was entitled to an instructed verdict.

Special issue No. 10, submitted to the jury, was as follows: “Do you find from a preponderance ofi the evidence that the driver of the automobile truck on the time and occasion in question failed to exercise ordinary care and use of the means within his power, to avoid the collision and to avoid injuring the wife of this said plaintiff, after he saw said automobile of plaintiff ahead of him?” This issue was not on the weight of the evidence, and did not place an undue burden on defendants.

It was not error for appellee’s counsel to argue “there was only one primary issue in this cause to be decided by the jury and that is whether or not IT. M. Elmore and Frank Hill Elmore were partners.”

Since the lower court should have instructed a verdict in favor of H. M. El-more, the judgment against him is reversed and judgment here rendered in his favor, that he go hence without day and recover his costs. The judgment against Frank Hill Elmore is affirmed.

Reversed and rendered in part, and in part affirmed.


source: Caselaw Access Project

author: NORVELL, Justice.

license: Public Domain

text:
    SAWYER v. DIXON.
    No. 10625.
    Court of Civil Appeals of Texas. San Antonio.
    Sept. 18, 1940.
    Rehearing Denied Oct. 23, 1940.
    Neel & King, Nat B. King, and Fred Wulff, all of Laredo, for appellant.
    Gordon Gibson, of Laredo, for appellee
   NORVELL, Justice.

This is an appeal from a judgment of the District Court of Webb County awarding plaintiff, L. J. Dixon, a drilling contractor, a recovery of $1,806.40 against defendant, E. J. Sawyer, the holder of an oil ■and gas lease in Webb County. Sawyer '¡has appealed, and Dixon has filed cross-assignments of error. The parties will be designated as in the trial court, or by name.

Trial was to a jury and this case, as analyzed by us, presents the question of the proper judgment to be entered upon the jury verdict evidenced by answers to special issues.

This lawsuit arose from the following facts and circumstances: Sawyer, being the owner of an oil and gas lease to the depth of 3,500 feet covering 60 acres in Webb County, on July 8, 1936, entered into a written contract with Dixon to drill and complete an oil well thereon. This contract consists of thirteen separate paragraphs, but may be briefly summarized as providing that Dixon, as contractor, should drill the lease to a depth of 3,000 feet, unless Sawyer, the owner, should elect to complete or abandon the well at a lesser depth; the hole when completed at 3,000 feet, or a lesser depth, to be 9⅞ inches in diameter; the contractor to furnish at his own risk; cost and expense all material, machinery* appliances, labor and other things necessary to drill and complete the well, except (1) casing, (2) cement and (3) water, which were to be provided by the owner. Sawyer was: given the\ right to require the well to be abandoned or completed at any depth or in any stratum (under 3,000 feet). Upon completion of the well, at 3,000 feet or a lesser depth, the contractor was entitled to the contract price of $4,500. Provision was made for various tests during drilling operations1 and the owner agreed to pay an additional amount for core tests in excess of ten.

Paragraphs 6, 7 and 8 of the contract read as follows:

“6. It is further agreed that should said owner be not satisfied with the production which is obtained at lesser depth than three thousand (3000) feet, then Contractor agrees to undertake with reasonable care and diligence to clean said hole, and. deepen the same to a depth not over three thousand five hundred (3500) feet, and for such, deepening, Contractor shall be paid at the ' rate 'Of Two ($2.00) Dollars per foot.

“7. To determine the proper place to set casing, Contractor ¿-agrees, when so requested by owner, as hereinabove provided, to rat-tail said hole to a reasonable depth and to ream out suchl'hole to the size required by the casing designated by Owner. When it is thought that a sand has been reached which will- produce, in the opinion of the Owner, oil and gas in commercial quantities, Contractor shall complete the well, when directed to do so by Owner.

“8. It is specifically agreed that any and all material, machinery appliances, and all surplus material furnished by Contractor shall upon the completion or abandonment of said well, be removed by Contractor at his own risk and expense. Contractor agrees to keep an accurate log of all formations drilled and samples of any and all' formations encountered, if so requested by Owner.”

The well was drilled to a depth of approximately 2,031 feet and 7 inch outside-diameter casing set (which, according to-testimony in the record, is the recognized size of casing for a 9⅞ inch hole). The well first produced small amounts of oil and.then went to salt water.

Sawyer then requested Dixon to», proceed to deepen the well, under the provisions of Paragraph 6 of the contract. Dixon did proceed with these operations,, drilling through the 7" O. D. casing. He contends, however, that he did so under a subsequent oral contract. Dixon’s cross-assignment on this point is deemed without merit and overruled. Barlow v. Cotulla, 107 Tex. 37, 173 S.W. 874; 10 Tex.Jur. p. 139, sec. 81.

At about 3,060 feet, the drill stem twisted' off and lodged in the hole. Dixon worked: a day or so trying to get the drill stem out and 'then abandoned the job, as “it would' cost more money to get it out than the thing-was worth.” Sawyer, with Dixon’s permission, took his drilling rig and tried to-get the drill stem out of the hole. After three days plaintiff demanded possession of the rig. Sawyer, however, retained possession and at an expense of $2,143.71 removed the drill stem.

The plaintiff sued for a balance alleged! to be due him for deepening the well, at $2 pen foot, and for defendant’s use of the rig after he had demanded possession, thereof. By way of offset, defendant pleaded the value; of the, drill stem recovered from the hole and delivered to plaintiff, and also reconvened for the-- reasonable-expense of getting the drill stem out of the hole in order to look'at an oil sand which defendant believed existed just below the dap where the drill stem broke.

The findings of the jury necessary to-mention here were:

1. That Dixon had used reasonable care and diligence to clean and deepen the hole to a depth of 3,000 feet from the point where the casing had been set.

2. That Dixon had used reasonable care and diligence in the selection of the drilling rigs, tools and equipment engaged in the drilling operations.

3. That plaintiff had furnished a drilling rig capable of drilling the well to 3,500 feet.

4. That plaintiff had used reasonable care and diligence in the selection of a 4½ inch drill stem in the deepening operations.

5. That by the exercise of reasonable care and diligence, the well could not have been deepened below where the 7" O. D. casing was set to a depth of 3,500 feet.

6. That plaintiff has used reasonable care and diligence in attempting to remove the drill stem from the hole after it had twisted off at a point below 3,000 feet.

7. That defendant had used plaintiff’s drilling rig for a period of 32 days without plaintiff’s license and consent.

8. That the reasonable rental value of said rig for such period was $960.

9. That plaintiff had taken one more core than the ten he agreed to take at his expense; the core being taken at approximately 2,640 feet.

10. That the expenditure of $2,143.71 made by defendant in removing the broken drill stem was the reasonable value of such service.

11. That the value of the pipe and drilling equipment taken from the hole by defendant and delivered to plaintiff was $1,-775 (750 feet of 4½ drill pipe, $450; one swedge, $25; 1,000 feet of 3½ inch drill pipe, $1,250; one drill collar, $50).

Based upon these findings and a stipulation that plaintiff had deepened the well 910 feet and been paid for such deepening the sum of $1,000, the trial court entered judgment for the plaintiff in the sum of $1,806.40, made up of the following items: $820 for unpaid amount due for deepening the well, at $2 per foot; $960 for defendant’s use of plaintiff’s rig; $26.40 for the core taken at 2,640 feet. Recoveries on defendant’s set off and cross-action were denied.

The contract which is the basis of this litigation provides for two phases of drilling operations. The first phase was completed when casing was set and production attempted at a depth of 2,131 feet. The second phase began when an attempt was made to deepen the well. This operation which involved drilling through the casing was admittedly more hazardous and carried with it a higher rate of contract compensation. The exact wording of the contractor’s obligation in Paragraph 6, applicable here, was “to undertake with reasonable care and diligence to clean said hole, and deepen the same to a depth of not over 3500 feet.” The obligation relating to drilling to 3,000 feet or a lesser depth is “to drill and complete” a well; The trial court construed Paragraph 6, as binding the driller or contractor to make a good faith attempt to deepen the well, exercising reasonable care and diligence. The question of whether or not this was done raises fact issues' which were determined by the jury in favor of the contractor. We agree with the trial court’s interpretation of Paragraph 6 of the contract, and defendant’s propositions asserting that plaintiff (the contractor) was absolutely bound to drill to a depth of 3,500 feet are overruled.

Dixon, under the findings of the jury, therefore completed his deepening operations insofar as Paragraph 6 of the contract was concerned. Under Paragraph 8, however, he was obligated upon the completion or abandonment of the well to remove, at his own risk and expense, all materials, machinery and appliances furnished by him. The drill, pipe, etc., used to make up the drill stem left in the hole by the contractor are included in the terms “material, machinery and appliances.” Arkansas Fuel Oil Co. v. McDowell, 119 Okl. 77, 249 P. 717. Paragraph 8 appears in the contract subsequently to Paragraph 6, and is as applicable to the deepening operations provided for therein as it is to the drilling operations down to 3,000 feet. We, therefore, hold that Dixon, upon completion of his deepening undertaking provided for in Paragraph 6, was obligated to remove the drill stem from the hole. The fact that he used reasonable care and diligence to do- this does not excuse his non-performance. The record here shows that the defendant, after the plaintiff refused to proceed further with his attempts to recover the broken drill stem because the cost would be greater than the drill stem was worth, took over the well and did remove the drill stem at a cost of $2,143.71, which was found by the jury to be the reasonable value of such service. We are not here confronted with a case where it was. impossible to remove the broken drill stem. The contract obligation was capable of being performed and at a cost less than the contract price agreed to be paid for the drilling of the well. This cost is therefore defendant’s measure of damages. Covington Oil Company v. Jones, Tex.Civ.App., 244 S.W. 287; Henry Oil Co. v. Head, Tex.Civ.App., 163 S.W. 311; 4 Summers Oil and Gas, § 689, p. 107.

Under the contract as made by the parties, it was clearly contemplated that upon completion of the deepening operations, the defendant should have a clean hole, and the fact that after the drill stem was removed the well could not be, or was not, deepened, and did not produce oil or gas, can make no difference in the legal situation. Under the contract, after the driller had drilled as deep as he could by the exercise of reasonable care and diligence, the owner of the lease had the right to decide whether or not he would attempt to further deepen the well, with a different driller or different equipment, and attempt to make a producer out of it, or come back up the hole and attempt production at a lesser depth.' It is well settled that the belief of a driller that no production can be obtained from a well does not excuse his non-performance of contractual obligations with reference to the drilling of the well. The fact that it was afterwards determined that a well would not produce likewise fails to excuse non-performance of a contractual obligation. Covington Oil Co. v. Jones, supra.

The defendant inferentially suggests that he should be relieved of the item of $960 of the judgment rendered against him, as this recovery was allowed plaintiff as compensation for the defendant’s use' of- the rig in completing that which the plaintiff was legally obligated to ■do. Under the jury’s findings, the retention of the rig by the defendant was wrongful and amounted to a tort. The contract did not give the defendant the right to appropriate plaintiff’s rig to complete the contract. Plaintiff’s breach of contract can not relieve defendant -of his tort liability. Furthermore, the judgment rendered here must be based upon the findings of the jury, and we are unauthorized to consider the finding on the rental value of the rig to plaintiff as a part of the reasonable costs of completing the contract to defendant.

Our holding that defendant is entitled to recover the cost of completing the contract precludes a recovery for the value of the drill, pipe and equipment recovered from the well and delivered to plaintiff, as the recovery allowed compensates defendant for his loss as a result of plaintiff’s breach of contract.

What has been said makes unnecessary a discussion of other matters mentioned in the briefs of the parties. The judgment of the trial court is reversed and judgment here rendered for the defendant in the sum of $337.31, which is the difference between the amount awarded to plaintiff by tile trial court’s judgment, and the amount here awarded to defendant.


author: YOUNG, Justice.

text:
    HAYDEN v. DALLAS COUNTY et al.
    No. 13102.
    Court of Civil Appeals of Texas. Dallas.
    Aug. 9, 1940.
    Rehearing Denied Oct. 12, 1940.

      Leake, Henry, Young & Golden, of Dallas, for appellant.
    E. G. Moseley, Robert Ogden, and Clinton Foshee, Jr., all of Dallas, for appel-lees.
   YOUNG, Justice.

Upon a hearing, appellant’s petition for temporary injunction was overruled, and he has appealed. The subject matter of the suit was a written contract between Dallas County and the Automatic Voting Machine Corporation, dated May 29, 1940, for the lease of eighty voting machines over a four-months period — June 1 to September 30, 1940. Charles E. Hayden, as a taxpaying citizen and property owner, for himself and others similarly situated, sought to restrain the performance of the contract by either party, alleging same to be wholly void and unenforceable. Plaintiff’s petition for interlocutory and permanent relief extends through 28 pages of the transcript, but the facts underlying his detailed charges of invalidity, touching the contract in question, must be briefly stated.

The Automatic Voting . Machine Corporation, herein referred to as company, is a Delaware corporation, and has never had a permit to transact business in Texas. It was alleged and established through S. H. Lounsbury, the company’s sales representative in Texas, and from other competent sources, that Dallas County had purchased, in 1936, some 180 voting machines; that about March 11, 1940, the Commissioners’ Court passed an order directing the County Auditor to give notice relative to bids on rental of additional machines for a period not to exceed twelve months from June 1, 1940. Defendant company submitted a bid, whereby said machines would be furnished on a rental basis of $50 each over a four-month period, from june 1 to September 30, 1940; giving Dallas County the option, before the expiration of such date, of purchasing the lot at current selling prices, in which event the rentals payable September 1 were to be credited on the purchase price. In case the purchase option be not accepted, then the rental period should extend to May 31, 1941, at $75 per machine; the property so leased to be delivered at Dallas by May 15 and later returned to defendant’s home office at Jamestown, N. Y., freight charges prepaid. On May 29, 1940, the county, by formal order, authorized the execution of a contract for the machines on the four-month basis, providing the acceptance thereof by the Voting Machine Company should be a waiver of the sales requirement in its aforementioned bid, which contract was thereupon duly signed by all parties. The company bound itself to make good by repair or replacement, any defects in material or workmanship; furnish free directions for operation of the machines; and send a representative to the county before the first election, for the purpose of properly instructing custodians thereof in their use. The machines were delivered to the county prior to June 27, 1940, and. were duly accepted by court order; being obviously acquired .for use by the Dallas County electorate in the July and August Democratic Primaries.

There was evidence before the court that the defendant company had heretofore rented and later sold numbers of the machines to Gregg and Bexar Counties under contracts similar, so far as applicable, to Dallas County’s rental contract; performance bonds being entered into in each case by said corporation. The machines were in full compliance with Texas laws (Art. 2997a), as mechanical voting devices. Mr. Lounsbury testified further that his company, for educational purposes during election years, always send one or more technicians to localities where machines are maintained, , to instruct officials in handling them and in their use; and the company would continue such service as long as necessary; that after 20 years, if Dallas County changed custodians, and made the request of the factory, it would send the necessary technicians down to break in new men.

Appellant’s main grounds for asserting that Dallas County and defendant company are attempting to consummate a void transaction, are these: (1) That the voting machine concern is a foreign corporation, without a Texas permit; that the rental contract whereby voting machines are shipped into the State for temporary use, constitutes intrastate rather than interstate commerce; and that perforce of Art. 2031a, any payment under such lease contract is void and an unlawful diversion of tax funds, therefore, properly enjoinable; (2) that neither Arts. 1659, 2368a or 2997a, relative to competitive bidding, was complied with, rendering the rental contract void; it being argued that after the time had expired for acceptance of the Voting Company’s bid, Dallas County accepted only a part of said original offer, without re-advertisement; the result being a mere counter proposition by the county that could not legally be the basis of a contract between the parties under aforesaid statutes.

As stated, appellant’s suit is in-junctive in character and challenges the right of either party to perform the above rental contract on account of alleged invalidity ; hence its terms must be examined for a determination of whether defendant company was thereby engaged in an intrastate transaction. By the writing, the machines were to be shipped into Texas from another state, rented by Dallas County for four months, and then reshipped to Jamestown, N. Y., by the lessee; rentals being expressly payable to the lessor at its home office by September 1. The company was to furnish with the machines an instructor to enlighten custodians thereof in their use. The shipment of chattels from one state to another for lease only does not divest the transaction of its interstate character. This rule has been many times illustrated in the lease of moving picture films. Binderup v. Pathe Exchange, 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308. The terms of the contract in suit are well within the pronouncement of our Commission of Appeals in Ligon v. Alexander Film Co., 55 S.W.2d 1030, 1031. The rule was there stated: “It may be granted without .further ado, that had the transaction between the company and Ligón contemplated the doing of nothing by the company except to manufacture the films according to contract requirements and to ship them to the theaters at Lubbock, for the use and benefit of Ligón, the transaction would have been one of interstate commerce exclusively.” And, the equipment in question being of complex construction and mechanism, the agreement of defendant company to furnish technicians in aid of the purpose for which the machines were leased is only incidental to .the main transaction of interstate commerce. Leschen & Sons Rope Co. v. Moser, Tex.Civ.App., 159 S.W. 1018; Southern Discount Co. v. Rose, Tex.Com.App., 296 S.W. 482; York Mfg. Co. v. Colley, 247 U.S. 21, 38 S.Ct. 430, 62 L.Ed. 963, 11 A.L.R. 611, and notes. Appellant cites Davis v. United Shoe Repairing Machine Co., Tex.Civ.App., Beaumont, 92 S.W.2d 1107, as strongly In support of his contention that the dealings between the instant parties are intrastate. As pointed out by Judge Combs, the facts in the Davis case were meager. Therein the Massachusetts lessor retained many elements of control over the rented machines not essential to the original transaction of lease, and emphasizes the truism that each case involving commerce, whether interstate or intrastate, must be determined by the facts of the particular controversy. So, in the present record, the test to be applied is, whether the so-called service obligation of defendant company was directly relevant and appropriate to the rental and use of these machines. The terms of defendant’s contract are simply “to make good by repair or replacement any imperfections or defects in material or workmanship in said machines for the term herein stipulated ; provided said machines shall be properly cared for and properly prepared for elections”; to “send a representative to the County before the first election at which the machines are to be used, to instruct the persons who will have charge of the machines, so that such persons can properly care for and prepare the machines for elections and can properly instruct the election officers and voters in their use”. Considering the apparently complex mechanism of' these voting devices to the’ uninitiated, their qualities of novelty to recurring sets of electors and officials, we conclude the above local features of the transaction were but. incidental and appropriate to the lessors’ duty of full performance. York Mfg. Co. v. Colley, supra; Houston Canning Co. v. Virginia Can Co., 211 Ala. 232, 100 So. 104, 35 A.L.R. 912; Metal Door & Trim Co. v. Hunt, 170 Okl. 240, 39 P.2d 72, 101 A.L.R. 350, and annotations. We have carefully studied the Mississippi 'Supreme Court decision in Case v. Mills Novelty Co., 193 So. 625, reported and annotated in 126 A.L.R. 1102, and find the facts therein are readily distinguishable from the situation at hand. In this connection, it should be noted that Art. 2997a, Sec, 11, of our statutes, requires authorities in charge to hold public schools of instruction in the use of voting machines, upon notice and before all elections. The statements of Mr. Lounsbury, that his company would continue to conduct educational schools for five to twenty years, if necessary, after machines are sold, form no part of the rental contract; are more or less gratuitous; and have no particular bearing on its interpretation.

But, if we be mistaken in our conclusion that Art. 2031a is inapplicable to the contract in question, still the penalty of Sec. 5 thereof declares the acts of the offending corporation -void only “as to it”. Thus, the rights of the other contracting party are not affected. Hence, in this instance, it is Dallas County, in its discretion, and not plaintiff taxpayer, that is entitled to raise the inhibition of the statute. The county has not seen fit to do so. “It is the general rule under such a statute that contracts made in violation thereof are not void but voidable only, at the election of citizens who are parties thereto, * * (Italics ours.) Fletcher on Corporations, Vol. 17, p. 595; Yewell v. Board of Drainage Com’rs, 187 Ky. 434, 219 S.W. 1049. Even if we should assume the contract voidable in its inception as regards Dallas County,' it is one which this corporate body was authorized to make and was subject to later ratification, as was done. Williams v. Pure Oil Co., 124 Tex. 341, 78 S.W.2d 929; Kutzschbach v. Williamson County, Tex.Civ.App., 118 S.W.2d 930.

Finally, we think, the successive steps taken by the Commissioners’ Court, resulting in the rental contract for voting equipment, were in substantial compliance with all relevant statutes on competitive bidding. Bids were first sought on the rental of eighty machines, for a period not •to exceed twelve months. There was no response to the notice of the County Auditor, except from the Automatic Voting Machine Corporation. Its bid was on a four-month and eight-month basis, coupled with an option to purchase, not called for in the county’s proposal. The latter saw fit to accept the short time bid, without condition or alternative, and the rental contract was consummated on the terms therein stated.

No irregularity is shown in filing more than one bid; or in the submission of an alternative and conditional bid by a company which is the sole bidder; the record disclosing no other concern in the United States to be engaged in the business of renting voting machines. The disposition of bids under such situation, it seems to us, is peculiarly a matter for the sound discretion of the County Commissioners.

All assignments and propositions upon consideration are overruled, and the order refusing a temporary injunction will be affirmed.

Affirmed.

BOND, C. J., not sitting.


author: GRAVES, Justice.

text:
    BANTUELLE v. SOUTHWESTERN GAS & ELECTRIC CO.
    No. 11048.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 10, 1940.
    Lincoln & Harris, of Texarkana, for appellant.
    Arnold & Arnold and Wheeler, Atchley & Vance, all of Texarkana, for appellee.
   GRAVES, Justice.

This appeal is from a judgment of the District Court of Bowie County, sustaining appellee’s motion to set aside the jury’s findings — theretofore returned in-answer to special issues 1 to 4, inclusive, that had been submitted to it — and rendering judgment, notwithstanding such findings, in favor of the appellee and adversely to the appellant in his suit against it for both actual and exemplary damages for the alleged wrongful cutting off and discontinuance by it of the electric service appellee had been theretofore furnishing to appellant’s business in the city of Texar-kana, under written contracts therefor,, then pending between the parties.

All the special issues submitted, together with the jury’s ' responses, were these:

“Special Issue No. 1. Do you believe from a preponderance of the evidence that the plaintiff, Fred Bantuelle, made a contention with the defendant, Southwestern-Gas & Electric Company, that there had been an overcharge by the defendant on-his said electric light bill?

“We, the jury, answer: Yes.

“If you have answered Special Issue No. 1 (yes) and in that event only, then answer the following special issue:

“Special Issue No. 2. Do you find from, a preponderance of the evidence that such contention by the plaintiff, if there was-one, was made by the said plaintiff, Fred Bantuelle, in an honest belief that there had been an overcharge for the service rendered ?

“We, the jury, answer: Yes.

“If you have answered Special Issue No. 2 ‘yes’ and in that event only, then answer the following special issue:

“Special Issue No. 3. Do you find from a preponderance of the evidence that the plaintiff had reasonable grounds for making such contention, if any?

“We, tbe jury, answer: Yes.

“Special Issue No. 4. What sum of money, if paid now in cash, do you find from a preponderance of the evidence will reasonably and fairly compensate the plaintiff for loss of profit, if any, from his business on account of the electric! service being discontinued?

“We, the jury, answer: $200.00.

“Special Issue No. 5. Do you find from the evidence that plaintiff had discontinued his business at 1526 Texas avenue when defendant cut him off from its lines ?

“We, the jury, answer: No.

“Special Issue No. 6. Do you find from the evidence that the defendant made reasonable efforts to give the plaintiff the rates and class of service most advantageous to him?

“We, the jury, answer: Yes.

“Special issue No. 7. Do you find from the evidence that before defendant cut plaintiff off from its lines it gave plaintiff notice of its intention to so cut plaintiff off unless he paid said bill?

“We, the jury, answer: Yes.”

Obviously, the complained-of setting aside of the first four of these emasculated the judgment in appellant’s favor, wherefore, upon the appeal, he complains of that action, insisting that instead the court should have left those first four answers standing, disregarded the answers to succeeding issues 5, 6 and 7, and rendered judgment in appellant’s favor upon the verdict under the first four; whereas, in turn, the appellee contends the court was left no alternative — under the undisputed evidence — than to cast out the first four answers and then render the judgment it did, since the remaining three issues and the findings thereunder were in its favor.

As this court interprets it, the appellant’s position — when reduced to its ultimate — is, in substance, this, as the first four special issues upon which he relies import: Since he had made a contention to the appellee that there had been an overcharge by it on his electric light bill for the service rendered in an earnest belief that such was the case, and since he had had at the time reasonable grounds for making such contention, he was, upon that situation alone, entitled to a recovery for the $200 the jury had found was reasonable and fair compensation to him for the loss of profit from his business he had sustained on account of the electric service being so discontinued; as his main, if not sole, reliance for authority upon that proposition, he cites — in so far as adjudicated cases are concerned —Southwestern Gas & Electric Co. v. Stanley, 123 Tex. 157, 70 S.W.2d, 413, by our Supreme Court.

This court, after a careful review of the statement of facts, is constrained to disagree with the appellant and to conclude, rather, that the learned trial court was correct in the action taken, under the conclusive, if not undisputed, state of the evidence as a whole; it would be a work of supererogation to undertake here either a complete restatement or full résumé of it, hence its controlling substance and resulting effect, as this court conceives it, will be stated.

That may best be done, it is thought, by this statement from the brief for the ap-pellee herein, which has been carefully checked for accuracy and edited to its satisfaction by this court,-to-wit:

“The plaintiff did nothing in the way of co-operating with the defendant to secure the only other available class of service and rate applicable to his place of business; defendant was helpless in that regard without his cooperation; there were only two classes of service and -rates applicable to his business establishment, he contracted for one such rate by a written contract with the defendant, and the only other available rate and class was offered to himv under the terms of his written contract and he refused to accept such only other rate; he could have procured the ‘large lighting • and power’ rate and discontinued the ‘commercial lighting’ rate (the sole 2 rates referred to) that he had, by simply complying with the plain terms of his written contract with the defendant, that is, by making a separate written application for the ‘large lighting and power’ rate; on four or five occasions during the time that he had a connection the defendant tendered to him the large lighting and power rate, which plaintiff wanted, but that he did not sign the contract. Even if he had been permitted to carry the contract for the large lighting and power rate to an attorney and the latter had suggested a change in the terms of the contract, defendant could not have executed the contract without being guilty of discriminating against other users of the same class of service; it being a public utility, it necessarily was required to treat all customers alike; * * * if the defendant had made such a change, it would necessarily have had to violate the terms of its contract with the plaintiff by making a change in the rate and class of service, contrary to the terms of such contract; * * * and too, from the undisputed testimony, the plaintiff’s business was a seasonal one and during the summer months when he was running full force, the rates under the large lighting -and power would have been cheaper for such months than the commercial lighting rate, which he contracted for, but in the winter months, when plaintiff’s establishment was in a more or less dormant state, (out of season), his rate under the large lighting and power would have been greater than the commercial lighting classification which he contracted for, and under which he was furnished electric current; the only way one could determine which oí the two only available rates applicable to his place of business was the most advantageous to the plaintiff would be to run for a full period of twelve months on each rate and then compare the cost of the electric current under each of such classifications and applicable rates. * * *

“The contract which plaintiff and defendant entered into plainly stipulates that if two or more classes of service and rates are applicable to plaintiff, that the choice of such rates lies with the customer, plaintiff herein, and that if the customer obtains any rate or class of service different from that contracted for in writing, he should make a written contract for the other rate and class of service. As indicated, there were only two rates and classes of service applicable to plaintiff’s place of business, having regard to the electrical equipment and appliances installed and in operation there, namely ‘commercial lighting’ and ‘large- lighting and power’; he contracted for one, was dissatisfied with it, and the 'other was tendered to him, on the condition only that he execute a new contract for the other .rate and class; * * * furthermore, defendant offered to date the new contract for the other rate back to the date of the old contract and give plaintiff credit for the difference in the two rates during such ■entire period that he had been operating on the rate which he chose by contract; each time this tender of the only other available rate and class the plaintiff refused to accept; he simply would-not sign any other contract for another class and rate. * * *

“The defendant, operating in the home-ruled city of Texarkana, Texas, was under the supervision of the city government with reference to its rules, regulations, and rates, and its rate-schedules, classes of service, and customers’ contracts, were necessarily required to be uniform in order to avoid any discrimination between customers of the same class; that is, customers using the same, or practically the same, amount of current with virtually the same type and maximum demand of equipment; the defendant conducted its business in Texarkana, Texas, in that manner; further, the regulations of the Federal Government require that each customer be served with electric current under a contract, and under separate contracts for separate classes of service under different meters, in order for the auditors, who check the utility’s books, to determine the amount of gross-receipts tax; * * *

“The plaintiff, at no time, ever offered to pay the defendant for the electricity under the rates that he, plaintiff, contended should apply to his business, but denied.at all times that he owed anything, carrying such denial as far as the Justice Court, when defendant sued him for the amount of his delinquent bill. * * *

“The judgment of the Justice Court establishes the fact that at the time defendant discontinued plaintiff’s service that the latter owed the defendant, more than the amount of his deposit.”

In so concluding, it seems plain under the determinative facts thus shown here, that this cause is easily distinguishable from the Stanley case so relied upon by appellant, in that Stanley had two meters, one at his home, and one at his shop, “under separate contracts; he became delinquent on his bill'at the shop, and the service company discontinued his service at both his residence and shop, when the bill at his residence was fully paid and was not in default.”

That is a far cry from the factual basis here presented, which undisputedly ,shows that appellant flatly refused to comply with the terms of his written contract with the appellee, although it specifically provided the method of obtaining another, rate, should the one in effect become unsatisfactory; and, in doing so, and contending that it was overcharging him under it, he just as flatly asserted his intention not to pay his bill and that the appellee could not discontinue its service to his plant, without a judicial determination as to the correctness of his contention.

On the contrary, our courts, as applied to such circumstances, appear to have uniformly held that a utility concern, standing in the appellee’s shoes, had a right to discontinue its service, without any such prior judicial determination, for such a failure to pay for the current already used, especially where, as here, the customer at that particular time owed the utility company more than the amount of his deposit with it under the contract between them. See Texas Power & Light Co. v. Taylor, Tex.Civ.App., 201 S.W. 205; Withers v. Ft. Worth Gas Company, Tex.Civ.App., 238 S.W. 324.

It is deemed unnecessary further to dispose specifically of the presentments otherwise urged in the briefs, since these conclusions determine the merits of the appeal; from them it follows that the judgment of the learned trial court should be affirmed. It will be so ordered. ¡

Affirmed.


author: BLAIR, Justice.

text:
    BETHEA v. SHEPPARD, Comptroller of Public Accounts, et al.
    No. 8940.
    Court of Civil Appeals of Texas. Austin.
    Oct. 9, 1940.
    Rehearing Denied Oct. 30, 1940.

      Smith & Hall, of Edinburg, for appellant.
    Gerald C. Mann, Atty. Gen., Cecil C. Rotsch, Asst. Atty. Gen., and John J. McKay and Charles N. Avery, Jr., both of Austin, for appellees.
   BLAIR, Justice.

This appeal involves the construction of the joint will and trust agreement of Henry Henke and his wife, Catherine Henke, both deceased, placing their entire community estate under control of the instrument, to determine whether the State of Texas is due inheritance taxes on the net value of Catherine Henke’s one-half community interest in the trust estate, agreed to be $1,-074,048.96. The agreed net value of her separate estate is $270,800.08. If no taxes are due on any portion of the trust estate, the amount due the State is $6,282, which amount appellant tendered; but if the whole of the trust estate is subject to taxation, the amount due is $60,740.94; for which amount the trial court rendered judgment for the State.

The joint will and trust agrefement was executed January 27, 1928. Henry Henke died February 18, 1928. The trust instrument provided for certain bequests and annuities to become effective at his death, payable primarily out of the revenues of the joint trust estate, but if necessary resort to the principal or corpus of the trust estate to pay the annuities of Mrs. Henke .and Mrs. Bethea was authorized. Henry Henke was made trustee of Catherine Henke’s one-half community interest, if she predeceased him; but if he predeceased her, the Houston Land & Trust Company was appointed executor and trustee and the entire community estate was placed under control of the trust instrument. It made appellant, Mrs. Leona H. Bethea, the daughter and only child of the Henkes, the principal devisee or beneficiary. After the death of Henry Henke the will and trust instrument was probated as his will and the State was paid the inheritance taxes due on his one-half of the community estate, valued at $1,156,332.04, as having passed after his death to the said Leona H. Bethea as dev-isee or beneficiary; and such taxes are not here involved. Only the State’s claim for the inheritance taxes due on the one-half community interest of Mrs. Henke, as having passed under the will and trust instrument at Mrs. Henke’s death in 1936 to Mrs. Bethea, is here involved.

The community estate at the death of Henry Henke who predeceased his wife, consisted of stock in Henke & Pillot, Inc., a corporation engaged in the grocery business; business property in Houston; real estate notes and cash, of the aggregate value of $2,763,693.69. The average annual net income from this property for five years prior to the death of Henry Henke had been $154,529.89; and since his death the joint trust estate has produced an average annual net income of $122,812.04. The executor and trustee administered and operated the entire community estate for some time as one, but eventually opened two trust accounts, one being the “Estate of Henry Henke, Deceased,” and the other the “Mrs. Catherine Henke Trust,” and all charges, expenses, bequests and annuities have been paid equally from these accounts.

The material portions of the joint will and trust agreement providing for payment of annuities to Mrs. Henke and Mrs. Bethea, and making Mrs. Bethea the ultimate devisee or beneficiary, are as follows:

“In the event of Henry Henke’s death, if Mrs. Catherine Henke is living, then the joint property shall thereupon be taken charge of by the Houston .Land & Trust Company and kept intact until time for distribution arrives under the provisions hereof, and when such time arrives, the Executor and Trustee shall distribute said property according to the provisions hereof. If Henry Henke dies before the death of Mrs. Catherine Henke, the Executor and Trustee shall pay to Mrs. Catherine Henke, during her lifetime and at such times and in such amounts as she may desire, the sum of Forty Thousand Dollars ($40,000.00) per year out of the net revenue of our joint property, and if said net revenue is insufficient for such purpose, then the principal of our joint property shall be resorted to in order to pay such yearly sum, and such Executor and Trustee, after the death of Henry Henke and until time for distribution arrives, shall pay to our daughter, annually, the sum of Twenty-five Thousand Dollars ($25,000.00) at such times and in such amounts as she may desire, out of the net revenue of our joint property, and if such revenue is insufficient for that purpose, then the principal of our joint property shall be resorted to in order to pay said sum, and if the net revenue of our joint property will so justify, then said annual payments to Mrs. Catherine Henke shall be increased to Fifty Thousand Dollars ($50,000.00) and such annual payments to our daughter shall be increased to Thirty-five Thousand Dollars ($35,000.00); but should, Mrs. Catherine Henke die before the time for distribution arrives under the provisions of this will, the annual payments to our daughter, Mrs. Leona Bethea, shall be increased to the sum of Seventy-five Thousand Dollars ($75,-000.00) per annum, if the net revenue of our joint property will so justify, and if not, then such annual payment shall only be increased to the sum of Sixty-five Thousand' Dollars ($65,000.00) and if the net revenue of our joint property is insufficient for such purpose, then the principal of our joint property shall be resorted to in order to pay such yearly sum.”

“At the expiration t>f eight (8) years after the death of both Henry Henke and Mrs. Catherine Henke, meaning eight (8) years after the date of the death of the one who dies last, then the said Houston Land & Trust Company, after deducting expenses and charges incidental to the management of said estate up to that time, shall turn over to. our daughter, Leona Bethea, the balance of our estate, and if she be not living at that time, then the property that would have been turned over to her shall be retained and managed by said Executor, and Trustee as. it has been doing, for an additional five (S) years, and at the end of such five (5) years shall turn same over to the children of our daughter, Leona Bethea, share and share alike. * * * If our daughter, Leona Bethea, should die before the expiration of eight (8) years after the death of both of us * * * then * * * such executor and trustee shall expend such portion of the revenue from said grandchildren’s portion of our estates as may be reasonable * * * until said property is distributed to said grandchildren under the terms of this will * * *.”

“In case of the death of S. L. Bethea and my daughter, Leona Bethea, should remarry, the estate shall be divided, half to Leona Bethea and half to her children, this latter half to be equally distributed between the three children.”

From 1928 until the death of Mrs. Henke in 1936, she was paid $40,000 per year, one-half or $20,000 was paid out of her trust estate and one-half out of the Henry Henke trust estate; and during this same period Mrs. Bethea was paid $25,000 per year, one-half being paid out of each of said trust estates. Since the death of Mrs. Henke, Mrs. Bethea has been paid the increased annuity of $65,000 per year, one-half out of each of said trust estates. These annuities have been paid out of net revenues of the respective trust estates, which has at all times been sufficient to pay them.

The joint will and trust instrument further provided: “During the time the Houston Land & Trust Company, may act as Executor and Trustee under the provisions hereof, it shall have the power and authority to take control and possession of our joint property and to manage the same and to collect the revenue and indebtedness owing to same and may sell any part thereof for cash or on terms or exchange same, except that in selling and disposing of any of said property the consent of the advisory board hereinafter provided for shall first be obtained, * *

It was further provided that C. G. Pil-lott should have first option to purchase the shares of stock of Henke & Pillott, Inc.; that the proceeds of sales and excess revenues be reinvested by the executor and trustee with consent of the advisory board, who were named, their powers defined, and the manner of filling vacancies of the board provided.

Since the death of Henry Henke the executor and trustee and the advisory board have acted and functioned as provided for in the joint will and trust instrument, but have not sold any of the corpus of the trust ■ estates; same are still in existence and operation, except there has been some decrease in the value of the one-half community interest of Mrs. Henke, due to causes which are not material here.

The trial court construed the joint will and trust agreement as evidencing the intention of Mrs. Henke, the grantor or don- or, to withhold the right of full or complete possession or enjoyment of her one-half community interest in the community or joint trust estate, except the $12,500 annuity payable primarily out of revenues to Mrs. Bethea during the lifetime of grantor, from Mrs. Bethea, the grantee or donee, until after the death of grantor or donor, or not sooner than eight years after her death. Having so construed the instrument, and the evidence having shown that the grantee or donee had not prior to the death of grantor or donor received, controlled nor come into possession or enjoyment of any of the corpus of what is designated the “Mrs. Catherine Henke Trust” estate, the trial court accordingly i concluded that the inheritance taxes were!! due on the net value of the corpus of saidj trust estate under the provisions of Art. [ 7117 of our Inheritance Tax Laws, which! read: “All property within the jurisdic- ’ tion of this State, real or personal, corporate or incorporate, and any interest therein * * * which shall pass absolutely or in trust by will or by the laws of descent or distribution of this or any other State, or by deed, grant, sale, or gift made or intended to take effect in possession or enjoyment after the death of the grantor or donor, shall, upon passing to or for the use of any person * * * be subject to a tax * *

The main contention of appellant is that properly construed the joint will and trust instrument vested in her, through the trustee, the possession and enjoyment of the entire trust estate, except the life annuity payable to grantor, as of and from the effective date of the trust instrument; and that in consequence the trust estate is not taxable under the provision of the statute which taxes only transfers of property “made or intended to take effect in possession, or enjoyment after the death of the grantor.” In support of this contention and construction, appellant further contends that the trust instrument irrevocably transferred the joint trust estate to the trustee, and cites the provision giving full .power to the trustee to manage and control the entire trust properties, except as to certain acts which required consent of the advisory board; the provisions for payment of annuities out of the corpus of the trust estate, if revenues proved insufficient; the provision for reinvestment of the surplus revenues with consent of the advisory board; and the provision directing the trustee to turn over the remainder of the trust estate to appellant eight years after the death of the grantor, as manifesting the intention of grantor to transfer the entire estate, except that necessary to pay her annuity, to appellant as of and from the effective date of the trust instrument ; and contends that the provision requiring the trustee to resort to the principal or corpus of the trust estate, if necessary, to pay the annuity of grantor did not under the facts operate to defer until the death of grantor the enjoyment by appellant of all of the trust estate. Alternatively, appellant contends that if any portion of the trust estate value is taxable, it is only that portion of the value necessary to produce the annuity payable to grantor, and/or that portion necessary to pay the annuity of appellant prior to and after the death of grantor, or until eight years after the death of the grantor. These alternative positions are predicated upon the contention of appellant that the provisions for the payment of annuities out of the corpus -of the trust estate if necessary were more apparent or precautionary than real when viewed in the light of the pri- or history of the community property as producing revenues greatly in excess of the annuities provided for, and the fact that resort to the corpus of the estate was t never necessary to pay them. And all contentions are made as showing that factually and on principle the instant case is distinguishable from decisions of other states construing inheritance or succession tax statutes, which have generally held Íthat any transfer in trust wherein grantor or settlor reserves an income, or the beneficial enjoyment or control of the trust property to himself or herself for life or until after death, the property is taxable under the statutes taxing transfers made or intended to take effect in possession or enjoyment at or after death of the grantor or settlor.

We are in accord with the construction placed upon the joint will and trust instrument by the trial court and its conclusion that the net value of the cor-pus of the trust estate in suit was taxable upon the death of the grantor. That is,' we construe the instrument as conclusively showing the intention of grantor or set-tlor to withhold the full or complete possession or enjoyment of the trust estate, • except the annuity payable to appellant primarily out of the revenues, from appel- ¡ lant until after the death- of grantor, or until eight years after her death. The trust instrument expressly provides that the “remainder” of the estate “shall not be distributed” during the lifetime of grantor, and not “until the expiration of eight years after her death.” The transfer or right of possession or enjoyment of the remainder of the trust estate was made contingent upon appellant’s suiwmng~’tRe grantor, wjiích necessarily fixed appellant’s rights at or, after the death of grantor. The instrument also provided for the payment of an annuity to appellant of a certain amount until the death of grantor and for an increased amount for eight years after the death of the grantor, at which time the “remainder” of the estate was to be turned over to or paid to appellant. Thus the trust instrument expressly provided that the death of the grantor must in all events occur before the remainder of the estate can take effect in possession or enjoyment in appellant, the beneficiary. And thus. the trust instrument by its own terms brings the instant case squarely within the statute, which does not impose the tax on the transfer of the property, nor on the passing of the property from the grantor, nor on the right to become beneficially interested in the property, but] imposes the tax upon the passing of thel property or interest therein when “madefl or intended to take effect in possession or] enjoyment after the death of the gran-J tor.” In other words, the thing burdened! with_the~ tax is th.e right tq_receivé or_the 1 right jff succession. as distinguished from 1 the right of transfer. State v. Hogg, 123 Tex. 568, 70 S.W.2d 699, 72 S.W.2d 593.

It may be here observed that the case is one of first impression with regard to the construction of the statute above quoted. This fact has required an examination of the decisions of other states with%~.. respect to their inheritance or succession tax statutes, which decisions are in conflict in some respects. They present, however, constructions of statutes not exactly sifnilar and apply to dissimilar factual situations. And while such decisions are not directly in point, we think they present reasonable analogy in some respects to the instant case on the questions involved.

The decisions of other states show that courts have generally held transfers in trust wherein the grantor or settlor has reserved an income to be taxable under a statute taxing transfers made or intended to take effect in possession or enjoyment at or after the death of the grantor or set-tlor. 61 C.J. 1663, § 2484(d), and cases there cited; 121 A.L.R. 365, 366. See, also, 49 A.L.R. 874; 67 A.L.R. 1250; 100 A.L.R. 1246; and Cooper’s Estate, 320 Pa. 418, 183 A. 45; In re Murphy’s Estate, 182 Cal. 740, 190 P. 46; In re Lowengart’s Estate, 160 Or. 118, 84 P.2d 105. In the instant case an income or annuity of $40,000 or an increased income or annuity of $50,000, payable primarily out of the income or revenues, but with resort to the principal or- corpus of the trust estate if necessary, was reserved in grantor until her death, one-half of such income or annuity to be paid out of her community half of the trust estate. Several other annuities were likewise payable one-half out of each trust estate until the death of those to whom the same were payable, and one such annuity payee survived grantor. These provisions and facts bring the instant case within the rule stated.

It is also quite generally held that if the income of the trust property is payable to the beneficiary until the death of the grantor or settlor, at which time the remainder or corpus is to pass to the bent eficiary, the right to receive same or the | right of succession thereto is, as to the re's mainder, taxable as being made or intended to take effect in possession or enjoyment after the-death of the grantor or settlor. State Street Trust Co. v. Stevens, Treasurer & Receiver General, 209 Mass. 373, 95 N.E. 851; In re Patterson’s Estate, 146 App.Div. 286, 130 N.Y.S. 970, affirming Sun, 127 N.Y.S. 284; Matter of Cruger, 54 App.Div. 405, 66 N.Y.S. 636, affirmed 166 N.Y. 602, 59 N.E. 1121. In the instant case the trust instrument provided for an annuity of $12,500, payable to appellant, which might be and has been increased to $65,000 during the eight-year period after the ¡death of grantor or settlor, at which time the remainder of the trust estate is to be delivered to appellant. These facts and prgvisions bring the instant case withinthe ruiestatecC^

The decisions also hold that if the rights .of the beneficiaries are contingent upon their surviving the grantor or settlor of the trust estate, it -is the death i of the grantor or settlor which fixes the j rights to take or succeed to the trust es-f tate, and the passing or transfer is taxable 8 as one made or intended to take effect in|) possession or enjoyment after the death of ‘ grantor or settlor. People v. McCormick, 327 Ill. 547, 158 N.E. 861. The trust instrument here involved provided that if appellant, the beneficiary, did not survive grantor, or for a period of eight years after grantor’s death, the trust property should pass to the children of the beneficiary. These provisions make the rights of the beneficiary contingent upon the beneficiary surviving grantor, and bring the instant case within the rule stated.

And in Re Hollander’s Estate, 123 N.J. Eq. 52, 195 A. 805, 808, the court states generally: “The test of taxability is not the time of the complete divesting of the transferor’s interest or ownership; it is the time of the complete succession by the transferee. . Where there is a transfer of' a specific interest in property and the succession of the transferee does not become, and under the terms of the transfer is not to become, complete until a time at or after the death of the transferor, that transfer is taxable. ‘The distinction * * *. rests on * * * whether the donee is deprived of an interest of some kind! * * % un(-ji the donor’s death.’ ” See, also, People v. Moses, 363 Ill. 423, 2 N.E.2d 724; In re Toy’s Estate, 220 Iowa 825, 263 N.W. 501; and Kimball v. Potter, 89 N.H. 234, 196 A. 272, 274, wherein the court states that “the possession or enjoyment, within the statutory meaning, is such as is actual and real, and not such as is theoretical or deferred,” and that the tax was to be assessed on the value of the property at the death of the decedent.

We do not regard as necessary a lengthy discussion of the distinction recognized by the authorities between the federal estate tax and the inheritance or succession tax levied by the various states. Suffice it to say that the federal estate tax is imposed upon the right of grantor of transferrer to transfer property, and that the inheritance or succession tax by the State is imposed upon the right to receive or succeed to the possession or enjoyment of property. Nor is it necessary to discuss the conflict of authorities with respect to the distinction as to these two forms of taxes. Under the Federal Estate Tax La-w, the primary question to determine is when the decedent or grantor parted with all property rights. Under our State Inheritance or Succession Tax Statute, the primary question .is whether the transfer was made or intended to take effect in possession or enjoyment after the death of grantor ’ or settlor, particularly in cases of. transfer of property in trust. IFisTíot a question of when the beneficial interest is created, but the tax is imposed upon the right to receive in possession or enjoyment after the death of grantor or settlor. In consequence, a grantor or set-tlor may create an irrevocable trust during his lifetime, still if he postpones the right of possession or enjoyment of the bene- ' ficiary until after grantor’s death, the property or any interest therein is subject to the inheritance or succession tax at or after his death. Under our statute, where either “possession” or “enjoyment’.’ is made contingent upon the death of grantor or settlor of all or any part of the trust estate, such transfer is taxable. Nor is the fact that appellant was given an annuity payable out of the income, with resort to principal or corpus if necessary, material, because it is manifiest that the right of possession or enjoyment of income is not possession or enjoyment of the principal or corpus of the trust estate which produces that income. In re Fulham’s Estate, 96 Vt. 308, 119 A. 433, and In re Patterson’s Estate, Sur., 127 N.Y.S. 284, affirmed 204 N.Y. 677, 98 N.E. 1109. Under this and our above conclusions, it required the death of the grantor or settlor to vest in appellant any right of possession or enjoyment of the principal or corpus of the trust estate, except the possibility and right to resort to same to pay the annuity if the income proved insufficient, which never occurred. At_the death of grantor or settlor the full possession and enjoyment of_all,of the trust estate vested in appellant through the trustee, subject to be defeated only in part by her rpmqrfiági» prjnr _tq._the_.end of the eight-vear jperiod afterjthe death of grantor. Manifestly the statute does not authorize the postponement of the tax to await such contingency or condition subsequent, and these conclusions answer all alternative contentions of appellant that only portions of the value of the corpus or principal were taxable. Our above conclusions also deny the contention of appellant that the tax should be postponed to determine what eventuality might happen during the eight-year period after the death of grantor or settlor. Nothing in the (statute authorizes such postponement of the tax; hut to the contrary it shows that the legislature intended that ⅜-e tax become due andjpayable . immediately after the death" of_ grantor,. at which time, appellant, through the trustee, came into full possession and enjoyment of the entire trust estate, which right of possession or enjoyment the statute taxes.

The judgment of the trial court is affirmed.

Affirmed.


text:
    CONTINENTAL INV. CO. v. ARMSTEAD et al.
    No. 11014.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 3, 1940.
    Rehearing Denied Oct. 24, 1940.

      Elbert Roberts, Willett Wilson, and Joe Entzminger, all of Houston (Joe Entz-minger, of Houston, of counsel), fpr appellant.
    Albert J. DeLange, Robert P. Beman, Jr., and Emory T. Carl, all of Houston, for appellees.
   GRAVES, Justice.

This statement of the nature and result of the suit, conceded by the appellees to be in the main substantially correct, is taken from the appellant’s brief.

“This was a suit based upon a certificate of special assessment. The original paving proceedings, on which the certificate of special assessment was issued, was begun on January 13, 1931, when the City Council of the City of Houston adopted a resolution for the paving of Telephone Road in the City, from its intersection with .the South line of Lawndale Avenue to its intersection with the G. H. & S. A. Railway trabk at Brookline. Said City Council initiated the improvement of Telephone Road. On the 11th day of May, 1932, the City issued to the National Paving Company a certificate of special assessment in the amount of $819.83 with interest at 7% per annum and providing for reasonable attorney’s fees against ‘Zella Armstead and husband, E. S. Armstead, and H. S. Seltzer, each as their interest may appear, the owners of said property’. The first coupon of said certificate was payable 30 days after the date with four remaining coupons being payable one, two, three, and four years after date, together with interest thereon from date until paid at the rate of 7% per annum. When the first coupon-installment became due, said coupon was not paid, nor was any of said certificate ever paid, and the suit was filed on December 6, 1932, in the District Court of Harris County, on the appellees’ failure to pay the certificate as provided therein and citation was issued on the 6th day of December, 1932, to all the defendants, Zella Armstead, E. S. Armstead, and H. A. Seltzer. * * * H. S. Seltzer filed his answer on December 20, 1932, setting forth that he had sold and conveyed said premises prior to the happening of all things set forth in plaintiff’s petition and H. S. Seltzer disclaimed all right, title, and interest in and to said property. The original answer of Zella Armstead and husband, E. S. Armstead, was filed April 5, 1935, and their first amended original answer was filed May 13, 1936. * * * At the close of the testimony for the plaintiff, the Hon. Court instructed a verdict for the appellees against Continental Investment Company, appellant; said verdict of the jury being filed July 10, 1939, and judgment was entered accordingly on the 27th day of July, A. D. 1939.”

Appellant’s four propositions for a reversal are these:

“First Proposition. — The cause of action as pleaded by the Continental Investment Company and as proved by the Continental Investment Company, appellant herein, showed that the joint assessment was valid in all things and that the facts introduced showed that it was impossible to determine the interest of the parties in said property and being unable to ascertain what interest, if any, H. S. Seltzer had, the joint assessment was proper and valid.”

“Second Proposition. — The court erred in excluding from the evidence the block books of the Harris County Tax Assessor and Collector’s office wherein it was attempted to be shown that the property in question was carried in the name of H. S. Seltzer."

“Third Proposition. — The court erred in holding the certificate of special assessment invalid, because no harm or prejudice was shown by the defendant and the defendant failed to plead any prejudice or harm which resulted to them because of the joint assessment.”

“Fourth Proposition. — The pleadings and proof by the Continental Investment Company showed that the joint assessment as was contained in said certificate of special assessment was proper because it was impossible to determine the interest of the parties in said property and the proof showed that a reasonable &nd diligent attempt had been made to determine the true owners of the property and an issue should have been submitted to the jury as to whether such proof showed a reasonable and diligent attempt to determine the interest owned by each party and that the court erred in holding the certificate of special assessment invalid as a matter of law when no harm or prejudice was shown by the defendants.”

The peremptory instruction, while the consequent judgment does not so recite, was mutually conceded to have been based upon the court’s conclusion that the certificate in suit was invalid, as constituting a prohibited joint assessment against the property involved.

To repeat it, the exact language of the certificate recited that f'an assessment had been levied against Zella Armstead and husband, E. S. Armstead, and H. S. Seltzer, each as their interests may appear, the owner of said property”.

The resolution ordering the pavement was passed January 13th, 1932, and the sued-upon certificate of special assessment was dated May 11th, 1932. This court docs not find any dependable showing in the record, either as to what the actual state of the title to the land was, or as to what was its ownership, upon either of the dates thus indicated.

Upon its face, or as to form at least, as its quoted terms reflect, the certificate was clearly a joint one, in that it did not show the interests of the several parties named therein as “each the owner” nor the amount of the assessment levied against each, with the amount each was required to pay. City of Dallas v. Atkins, 110 Tex. 627, 223 S.W. 170; Uvalde Rock Asphalt Co. v. Lyons, Tex.Civ.App., 289 S.W. 202; Scanlan v. Gulf Bitulithic Co., Tex.Com.App., 44 S.W.2d 967, 80 A.L.R. 852.

Appellant’s able counsel concede that much, but in avoidance argue, as their quoted propositions presage, to quote their language on the point, as follows:

“Actually, however, it was not a joint assessment, since E. S. Armstead was the husband of Zella Armstead and neither he nor H. S. Seltzer owned any interest whatsoever in the property, it being the separate property of Zella Armstead, and since neither E. S. Armstead nor H. S. Seltzer owned any interest therein, certainly no assessment could be made against them. When the appellant refers to the assessment as a joint assessment in this brief, it does not mean a joint assessment as to ownership of the property, but only as to the naming of the parties jointly in the paving certificate, which amounts to no more than surplusage since Zella Armstead was the only one of the three named in the certificate who actually owned any interest in the property. Scanlan v. Gulf Bitulithic Co., Tex.Com.App., 44 S.W.2d 967, at page 971, Syl. 5, 80 A.L.R. 852; City of Dallas v. Atkins, 110 Tex. 627, 223 S.W. 170, 171.”

As a corollary, they append this further deduction: “Where it develops after the assessment proceedings that only one of three persons named in the certificate actually owns the property or has any interest therein, then it certainly would not be essential to separate or attempt to separate the amount of the liability of each owner.”

These positions, it is thought, are dependent upon two unsustainable assertions of fact as to antecedent proceedings, upon which the appellant now as as-signee of the National Paving Company, the original grantee in the certificate, relies, to-wit:

(1) That the property involved _ was shown by the evidence herein to have been entirely owned by Zella Armstead as _ her separate estate at' the time of the clared-upon paving proceedings; *

(2) That the testimony likewise showed that attempts were made by its predecessor in title to the certificate — the National Paving Company — and the City of Houston to ascertain the true interest owned by each of the parties named by the appellant in its trial petition herein as the several owners of this property at the time the paving proceedings thereon were ordered —that is, E. S. Armstead, Zella Armstead, and H. S. Seltzer.

So asserting the facts to be, it is appellant’s contention that the cause here presented is not ruled by the authorities cited supra, of which Scanlan v. Gulf Bitulithic Co., Tex.Com.App., 44 S.W.2d 967, and Uvalde Rock Asphalt Co. v. Lyons, Tex.Civ.App., 289 S.W. 202, 203, are the leading ones, but “offers from its facts an entirely new and distinct problem” akin to those involved in such cases as Realty Trust Co. v. Craddock, 131 Tex. 88, 112 S.W.2d 440; Davidson v. Railway Co., 29 Tex.Civ.App. 54, 67 S.W. 1093; Rabb v. Canal Co., 62 Tex.Civ.App. 24, 130 S.W. 916, and Walsworth v. San Antonio & A. P. Ry. Co., Tex.Civ.App., 10 S.W.2d 194, 195.

As already indicated herein, this court fails to find support for either claim, and —-presumptively at least — the learned trial court found on the facts against them both in rendering the adverse, judgment to appellant it did; in other words, no evidence has been indicated that .this property was -owned entirely by Zella Armstead as her separate estate at the time of the paving proceedings, and as recited above, the appellant specifically plead the contrary; neither has it been made to appear, either that the title records of Harris County at the time of the paving proceedings did not unequivocably show the state of the title to this property, or that appellant’s predecessor in title to the certificate at that time made any diligent or proper effort to ascertain the state of such title, or just who held it.

In this state of the record, no reason is perceived as to why the general rule invalidating such a joint certificate as this one was upon its face, as declared by .the authorities first herein cited, should not apply in this instance, as the court below held it did.

The accepted rule of diligence required of those seeking the establishment of such a -paving lien as this one is thus tersely stated in Uvalde Rock Asphalt Co. v. Lyons, Tex.Civ.App., 289 S.W. 202, 203, writ .of .error refused; “The very title examined for thei purpose of disclosing the names of the owners for assessment must have shown the amount of interest each claimed. Undoubtedly, the records of the city office would have disclosed the facts so easily discernable.”

Neither is it thought there was prejudicial error in the court’s exclusion from the evidence of proffered block books of the County Tax Collector’s office, purporting to show that the property in question was carried in the name of H. S. Seltzer. The matter thus tendered does not seem to have been material to any issuable fact in the cause; it was merely testimony from the Deputy Tax Collector to the effect that the unrendered tax rolls in that office showed this property as having been carried in the name of H. S. Seltzer, which unrendered roll itself reflected only the individual action by the Tax Collector’s office, and none, by the person affected himself, either with reference to the title to the property or taxes thereon; - wherefore, being thus an ex parte action upon the part-of the Tax Collector’s office, it would neither constitute evidence of any claim by the party in whose name it was thus nolens volens on his part carried on an unrendered roll, nor any evidence of what the actual title to the property at that time was.

While other subsidiary questions are discussed by the parties in their briefs, it is deemed unnecessary to dispose of them, since the conclusions stated determine merits of the appeal. They require an af-firmance of the judgment. It will be so ordered.

Affirmed.


text:
    MORRIS v. TIMES REVIEW PUB. CO. et al.
    No. 11049.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 10, 1940.
    Rehearing Denied Oct. 31, 1940.
    Old & Lilienstern, J. A. Ward, and L. F. Benson, all of Mt. Pleasant, for appellant.
    Hiram G. Brown, of Mt. Pleasant, for appellees.
   GRAVES, Justice.

This appeal is from a judgment of the District Court of Titus County, entered upon a jury’s verdict in answer to one. special issue submitted, wherein the appellant, Harold J. Morris, was denied any recovery against the appellees — Times Review Publishing Company] a corporation, of which G. W. Cross, Jack Cross, and Cecil Cross were president, vice president, and secretary-treasurer, respectively, as well as the sole directors, and against such three named persons as individuals — in his suit against them to compel them to transfer, or to have transferred, to him four shares of stock of such corporation on the books thereof, which shares he alleged himself to be the owner of under prior purchases one each thereof from Lorna Carr Leavell, Mr. Lilienstern, L. E. Keeney Estate, and the Rogers Estate.

The special issue, together with the jury’s answer thereto, was as follows:

“Special Issue No. 1: The evidence m this case shows that plaintiff, Harold J. Morris purchased 4 shares of stock in the Times Review Publishing Co., in the first part of 1938 from Lorna Carr Leavell, Mr. Lilienstern, the L. E. Keeney Estate, and the Rogers Estate.

“Do you find from a preponderance of the evidence that in April, 1938, or about said time, plaintiff, Harold J. Morris, sold such stock to Defendant, G. W. Cross, for a consideration of $125.00, to be paid by said Cross; answer ‘yes’ or ‘ño’.

“Answer: Yes.”

As will be noted, the trial court thus peremptorily charged the jury that appellant had been the actual owner of these four shares in the early part of 1938, as so alleged by him, that is, prior to the time the jury were in the quoted issue thus required to find whether he had later in that same month sold them to the appellee, G. W. Cross. So that, since neither litigant objects to this antecedent assumption of fact, the ownership of appellant at the time of this inquiry is no longer an issue.

For that reason, it is thought -that the fact otherwise alleged by appellant, as well as apparently shown, that no transfer of the shares from the prior owners to him had ever been entered upon the corporation’s books, nor certificate of that fact furnished him, is immaterial.

Wherefore, it is thought, the controlling, if not the sole question of law the appeal presents is whether such a sale of the same shares to the appellee, G. W. Cross, as the jury found occurred in the attending circumstances shown, constituted a defense to appellant’s mandamus suit. His position here is that it did not, that the court below erred in submitting any such an issue to the jury in the first place, and, in the second, in not having at his request duly made either eliminated it by instructed verdict in his favor at the close of the evidence, or by judgment non obstante veredicto after the jury’s answer had been returned.

This court cannot see eye to eye with appellant in these positions; in the first place, appellant sued the persons so constituting the directorate of the corporation —especially G. W. Cross — -as individuals, as well as in their official capacities, and, as stated, it must on appeal be assumed that he was then the rightful owner of the shares at the time he came to deal concerning them with G. W. Cross individually, as the jury found he did do; in the second place, he does not challenge the sufficiency of the evidence as a matter of fact to sustain the jury’s finding that he did make the sale of the four shares to G. W. Cross for $125; but what he contends for in this connection is that, under R. S. Article 1334, along with other statutes, no such a sale as the jury found to have been made by him to G. W. Cross was or could have been valid, because such transfer was not shown to have been made either upon the books of the corporation, or in such manner as its by-laws provided, the leading authorities cited by him for that position being Walker Caldwell Producing Co. v. Menefee, Tex.Civ.App., 240 S.W. 1023, error refused, and Hendricks v. Martin, Tex.Civ.App., 267 S.W. 1047, no error applied for. In answer to these contentions, the appellees, after citing their pleading to the effect that such a sale did take place, together with ample supporting evidence for the jury’s finding that it in fact took place, further answer as follows:

“Appellees earnestly contend that reason, justice, equity and the law support the judgment rendered in this cause, denying to Plaintiff -(Appellant) the writ of mandamus. Appellees insist that there is no law in this State requiring a transfer of stock to be made in writing or in any other particular manner. Article 1334 only provides that it be transferrable only on the books of the corporation in such manner 'as the by-laws may prescribe. We insist that no serious effort was made upon the trial of the case on the part of Plaintiff to show what the by-laws of the Times ' Review Publishing Company were upon that subject. Anyway, Appellees say, that as between the transferor, Plaintiff Morris, and the transferree, G. W. Cross, that becomes immaterial, because as between them the sale and transfer by delivery of the certificates passed ownership to said Defendant Cross. Volume 10 Tex.Jur., par. 211, reads as follows:

“ ‘Equitable Interest of Transferee Under Incomplete Transfer — In view of the statutory provision declaring that stock shall be transferable only on the books of the corporation in such manner as the bylaws may prescribe, a transferee of a stockholder is not invested with a complete title to the stock at law — that is to say, the right of ownership as against everybody, the right in rem — until it has been transferred to him on the books of the corporation. However, as between the parties, and as to creditors of the transferor or transferee, the rule is that delivery of the stock certificate with transfer endorsed either to a designated transferee or in blank passes ownership of the stock, regardless of the fact that no entry of the transfer has been made on the books of the corporation. This is not inconsistent with the statute, which controls as to the legal title to transferred stock, but leaves the Court to enforce equities created by unregistered dealings.’

“Further quoting from Vol. 10, Tex.Jur. par. 174-176:

“ ‘Stock in a corporation is property and the subject of free sale and delivery *

“ ‘Page 805:

" ‘A contract for the sale of shares of stock is governed, of course, by the rules which are applicable generally to assignments, contracts and sales * * * in this respect it has been held that the seller’s promise to deliver the stock is good consideration for the purchaser’s obligations under the contract * * * a contract for the sale of shares may be made by parol.’

“The numerous cases cited in that text support the rule. Certainly if a parol promise to deliver is good in law, as between the parties to the transfer, then certainly the actual delivery and sale, as in. the case at bar, was good as between Plaintiff and Defendant, G. W. Cross. Quoting further from Vol. 10, Tex.Jur., par. 198, pg. 831:

“ ‘* * * However, although not negotiable in the sense that an innocent purchaser for value from a thief obtains a right to the certificate as against the owner, certificates of stock are trans-ferrable by mere delivery.’

“The rule laid down in Vol. 10, Tex.Jur., par. 211, pg. 841, 842, hereinbefore quoted, ánd the cases cited therein, most definitely support the contention of Appellees in this case and the judgment entered therein. We particularly call the Court’s attention to Appellant’s brief on page 17 wherein he says:

“ ‘We have not been able to find any decisions of our Courts interpreting this statute in respect to the fact situation of this case.’

“Appellant appears to assume in his brief that even were the transfer made on the books of the corporation the transfer of the certificates would have to be made by written assignment. The authorities are unanimous against this contention. The same argument made by Appellant in support of his contention that proof by parol of a stock transfer or purchase of stock would ‘open a wide field for the practices of fraud’ could just as reasonably be made and effectively be made with respect to parol proof of any contract of sale or the sale and transfer of any property not required by statute to be consummated by written assignment. Please do not overlook the fact that the testimony was heard and a jury found therefrom that Plaintiff did sell these four shares of stock before it had been entered upon the books of the corporation to the Defendant, G. W. Cross, and that the certificates were actually delivered to said Defendant, and decided by Directors to enter same on books to G. W. Cross (S.F. p. 72). We agree heartily with Appellant that there are no decisions of our Courts in respect to a case involving facts as in the case at bar that even remotely support Appellant’s contention herein. On the other hand, as shown by Authorities cited and others too numerous to mention, a transfer of stock under the facts in this case as between the parties is good. We insist that the authorities cited in Appellant’s brief support the judgment rendered in this case denying the mandamus. Appellant quotes at some ■ length from the case of ‘Walker Caldwell Producing Company v. Menefee”'' [Tex.Civ.App.], 240 S.W. 1023, 1026. In that case, as is true of each case cited in Appellant’s brief, the rights of third parties are involved. Appellees say that the following quotation from the part of the Court’s opinion in the above case copied in Appellant’s brief clearly supports Appellees’ contention of the judgment in the case at bar and holds adversely to the contention of Appellant, such portion of the quoted opinion referred to is as follows (p. 2 of Appellant’s brief) :

“ ‘In other words, that Blank did not acquire legal title to the shares * * * because they were not obtained under regular transfer provided for by law * * and that Blank, at most, could acquire only an equitable assignment subject to the rights of Appellant under the law *

“Certainly, as between the parties, the transfer under the facts of the case at bar in any event passed equitable title to Defendant, G. W. Cross, and Appellant certainly cannot himself be entitled under .the facts in this case to the harsh and extraordinary remedy of mandamus to compel transfer on the books of the corporation of stock that the jury has found he had sold to G. W. Cross. In the case of ‘Hendricks v. Martin’ [Tex.Civ.App.], 267 S.W. 1047, cited and quoted from in Appellant’s brief, it is held that the transferee, although not acquiring legal title, acquired an equitable title.

“As stated in Appellant’s brief and in many of the cases cited, Article 1334 is for the protection of the corporation. On page 16 of Appellant’s brief, he says:

“ ‘This statute was enacted to protect the corporation * *

“Appellant, in his brief, page 23, quotes at length from the case of ‘Strange v. H. & T. C. Ry. Co.’, 53 Tex. 162. The following excerpt of the quoted opinion in Appellant’s brief should be sufficient authority against the contention of Appellant under the facts and findings in the case at bar and sufficient authority to support the judgment denying mandamus. Such excerpt is as follows:

“⅛- * * Although the certificate was not the share of stock itself, it was .what the company constituted the visible representation of it; and as between the shareholder and his assignee, the equitable, if not the legal title to the stock, would pass by a transfer of the certificate, and this without it being recorded on the books of the company. Angell & Ames on Corp., §§ 353-4; id., § 564; [New York & N. H.] R. R. Co. v. Schuyler, 34 N.Y. 30; McNeil v. [Tenth Nat.] Bank, 46 N.Y. [325], 331 [7 Am.Rep. 341]; Leitch v. Wells, 48 N.Y. [585], 592; [Commercial] Bank v. Kortright, 22 Wend. [N.Y. 348], 362 [34 Am. Dec. 317]; [Mount Holly, etc.], Turnpike Co. v. Ferree, 2 C. E. Green [117, 118], 17 N.J. [Eq. 117], 118; [Broadway] Bank v. McElrath, 2 Beasley, [24], 13 N.J. [Eq.] 24.

“ ‘Such certificate and transfer is prima facie sufficient to authorize the holder to demand of the company the privileges and benefits to which the original holder would be entitled. * * * ’ ”

These answering presentments are thought to be sound. Furthermore, to say the least, in the situation as presented to an appellate court, even if it could be said that actual ownership of the shares was not shown to have passed to G. V/. Cross under the alleged sale to him, still the right and title to them — as between him and the appellant as individuals — -was clearly shown to have been brought into issue by the pleadings and testimony, lienee, in any event, the ownership being a matter of doubt, no drastic writ of mandamus would issue. 28 Tex.Jur., Title “Mandamus”, paragraphs 11 and 12, and cited cases.

Pursuant to these conclusions an af-firmance will enter.

Affirmed.