author: HICKMAN, Commissioner.

text:
    MEXIA INDEPENDENT SCHOOL DIST. v. CITY OF MEXIA.
    No. 7585.
    Supreme Court of Texas.
    Nov. 8, 1939.

      A. E. Jackson, of Houston, for appellant.
    C. D. Jessup, Jr., of Houston, for appel-lee.
    A. H. Britain, of Wichita Falls, John T. Smith, of Austin, and W. M. Harmon, of Waco, amici curiae.
    L. L. Geren, of Groesbeck, for the County.
   HICKMAN, Commissioner.

This case is before us upon the following certificate from the Court of Civil Appeals, Tenth District, at Waco.

“The above cause is now pending before this court on motion for rehearing. The facts are stated in our opinion on the original hearing. Our holding, in some respects, is in conflict with the opinion by the Texarkana court in State v. Bagby’s Estate, Tex.Civ.App., 126 S.W.2d 687, which was published after the rendition of our decision. For this reason and because of the importance of the questions involved, we deem it advisable to certify to your Honorable court the following questions;
“(1) Upon the facts presented, did we err in holding that Vernon’s Annotated Statutes, art. 7345b (Acts 1937, 45th Leg., p. 1494-a, chap. 506) was not unconstitutional?
“(2) Since, upon the filing of plaintiff’s petition, the property owning tax debtor was served with citation as provided in Sec. 4 of the Act in question, but failed to answer therein, did the trial court thereby acquire jurisdiction to enter judgment in favor of the defendant, Mexia Independent School District, upon its plea of intervention and cross-action without further notice to the tax debtor? Tn other words, is Sec. 4 of the Act, which requires each party to the suit, when cited as directed therein, to take notice of all claims and pleadings then on file or thereafter filed in said cause by all other parties therein, valid ? In this connection, we call your attention to the holding of the Texarkana Court of Civil Appeals in the case of State v. Bagby’s Estate, 126 S.W.2d 687.
“A copy of our opinion and the transcript, together with the agreed statement of facts and copies of all briefs filed herein, will accompany this certificate and be before the court for all purposes.”

By an order of this court promulgated on December 9, 1936, Supreme Court Rule No. 15 was amended' so as to require that each certificate from a court of civil appeals be accompanied by the opinion or tentative opinion of that court. One of the purposes in promulgating that amendment was to enable this court to facilitate its work and avoid duplications by adopting the opinions or tentative opinions of the courts of civil appeals when they meet with the approval of this court.

We have carefully considered the opinion in the instant case prepared by Justice Alexander and, in so far as it discusses the questions certified to us, we approve and adopt same as our answer to such questions. A copy of that opinion, omitting' the heading and also omitting a certain portion thereof which has no particular bearing on the exact questions certified to us, follows and will be published as this court’s opinion in answer to the certified questions.

Our categorical answers to the questions are, first, “No,” and, second, “Yes.”

Opinion of Court of Civil Appeals

This suit was brought by the city of Mexia against A. N. Pigford to recover delinquent taxes alleged to be due for the years 1930 to 1937, inclusive, on certain lots within the city of Mexia belonging to Pigford. The Mexia Independent School District, the State of Texas, and county of Limestone were joined as defendants as provided in Vernon’s Annotated Civil Statutes, art. 7345b (Acts 1937, 45th Leg., p. 1494-a, chap. 506). Pigford and the state of Texas and county of Limestone defaulted. Mexia Independent School District answered and by plea of intervention and cross-action set up a claim against Pigford for taxes due it on the same property and sought foreclosure of its lien thereon. No new citation was served on Pigford on this cross-action. However, the original citation served on him contained the statement that the other taxing units above referred to had been made parties defendant and had been cited to appear and file their claim for taxes, and further recited: “Each party to said suit shall take notice of, and plead and answer to, all claims and pleadings now on file and here-, after filed in said cause by all other parties therein.” Upon the trial, the court sustained plaintiff’s motion and struck out the plea of intervention and cross-action of Mexia Independent School District and dismissed same and rendered judgment for plaintiff for its taxes with foreclosure of its lien. The Mexia Independent School District alone appealed.

Article 7345b, Vernon’s Ann. Civ.St., above referred to, reads, in part, as follows:

“Sec. 2. In any suit hereafter brought by or in behalf of any taxing unit as above defined, for delinquent taxes levied against property by any such taxing unit, the plaintiff may implead as parties defendant any or all other taxing units having delinquent tax claims against such property, or any part thereof, and it shall be the duty of each defendant taxing unit, upon being served with citation as provided by law to appear in said cause and file its claim for delinquent taxes against such property, or any part thereof. It shall be sufficient service upon the State of Texas in any county in such suit to serve citation upon the County Tax Collector charged with the duty of collecting such delinquent taxes due the State and county against such property and it shall be sufficient service upon any other taxing unit to serve citation upon the officer charged with the duty of collecting the taxes of such taxing unit or upon the Mayor, President, or Chairman or the governing body of such taxing unit, or upon the Secretary of such taxing unit. Any taxing unit having any claim for delinquent taxes against such property may waive the issuance and service of citation upon it.
“It shall be mandatory upon any such taxing unit so filing such suit or suits, in all cases where all other taxing units are not impleaded to notify all such taxing units not so impleaded of the filing of such suit or suits, such notice to be given by depositing in the United States mail a registered letter addressed to such taxing unit or units giving the name or names of the plaintiff and defendants, the Court where filed, and a short description of the property involved in said suit so that such taxing units not impleaded may have the opportunity to intervene as herein provided.”
“Sec. 4. Each party to such suit shall take notice of, and plead and answer to, all claims and pleadings then on file or thereafter filed in said cause by all other parties therein, and the citation upon each defendant shall so recite.
“Sec. 5. Upon the trial of said cause the Court shall hear, evidence upon the reasonable fair value of the property, and shall incorporate in its judgment a finding of the reasonable fair value thereof, in bulk or in parcels, either or both, as the Court may deem proper, which reasonable fair value so found by the Court is hereafter sometimes styled ‘adjudged value’, which ‘adjudged value’ shall be the value as of the date of the trial and shall not necessarily be the value at the time the assessment of the taxes was made; provided, that the burden of proof shall be on the owner or owners of such property in establishing the ‘fair value’ or adjudged value as provided in this section and, provided further that this section shall only apply to taxes which are delinquent for the year 1935 and prior years.”
“Sec. 8. No property sold for taxes under decree in such suit shall be sold to the owner of said property, directly or indirectly, or to anyone having an interest therein, or to any party other than a taxing unit which is a party to the suit, for less than the amount of the adjudged value aforesaid of said property or the aggregate amount of the judgments against the property in said suit, whichever is lower, and the net proceeds of any sale of such property made under decree of court in said suit to any party other than any such taxing unit shall belong and be distributed to all taxing units which are parties to the suit which by the judgment in said suit have been found to have tax liens against stich property, pro rata and in proportion to the amounts of their respective tax liens as established in said judgment, but any excess in the proceeds of sale over and above the amount necessary to defray the costs of suit and sale and other expenses hereinabove made chargeable against such proceeds, and to fully discharge the judgments against said property, shall be paid to the parties legally entitled to such excess.”

Section 9 of the Act provides that if at the tax sale the property is bought in by a taxing unit that is a party to the suit, it shall be held in trust for all taxing units adjudged to have liens on the same; that the property cannot be subsequently sold by such trustee for less than the adjudged value without the consent of all taxing 'units; and that the proceeds of any such sale shall be prorated among such units in proportion to their interest. It also provides for sale by the sheriff if the trustee does not sell same within six months after the expiration of the exemption period. Section 10 provides as follows:

“The purchaser of property sold for taxes in such foreclosure suit shall take title free and clear of all liens and claims for taxes against such property delinquent at the time of judgment in said suit to any taxing unit which was a party to said suit or which had been served with citation in said suit as required by this Act.”

Section 13 of the Act provides that said Act shall be cumulative of and in addition to all other rights and remedies to which any taxing unit may be entitled under existing law.

The proceedings in this cause appear to have been filed in keeping with the provisions of the Act above referred to and hence the intervener was entitled to present its claim for taxes against Pigford and to have foreclosure of its lien in said suit, unless, as contended by appellee, the Act in question is unconstitutional.

The Act in question undertakes to require all parties to take notice of all subsequent pleadings filed in the suit and it is contended by appellee that it is unconstitutional, because, if followed, it would deprive Pigford of his property without due process of law, in that it would permit an impleaded taxing unit to file a cross-action and recover judgment against Pig-ford for foreclosure of its lien without any citation to him thereon. The general rule is that the legislature in its discretion may prescribe what notice shall be given to a defendant in a suit, subject to the condition that the notice prescribed must conform to the requirement of due process of law. The requirement of due process of law is met if the notice prescribed affords the party a fair opportunity to appear and defend his interests. 12 C.J. 1230; Mabee v. McDonald, 107 Tex. 139, 175 S.W. 676. The statute in question applies only to a particular class of suits — ■ that is, suits brought by taxing units to foreclose tax liens on property. The citation served on the defendant must disclose to him the nature of the suit. lie is charged with knowledge of the law and therefore must know from the nature of the suit that there is a possibility of cross-actions by others. In other words, he is notified that an effort will be made to sell the particular piece of property for taxes and that all other defendants in the suit, as well as taxing units not parties thereto, who have an interest in the property have been invited to present their claims and to participate in the sale. Section 4 of the Act requires that the citation contain a recitation calling his attention to the fact that he is required to take notice of all pleadings then on file and such as may thereafter be filed by any and all parties. It is a well recognized rule that a defendant who has once entered his appearance in a cause is charged with notice of all amendments thereafter filed, including pleas of intervention and cross-actions by other defendants. Phillips v. The Maccabees, Tex.Civ.App., 50 S.W.2d 478, par. 3, and authorities there cited; 4 Tex.Jur. 641, § 20; Roller v. Ried, 87 Tex. 69, 26 S.W. 1060; Bryan v. Lund, 25 Tex. 98; Early & Clement Grain Co. v. Fite, Tex.Civ.App., 147 S.W. 673. If a defendant, merely because he has entered his appearance in an ordinary suit, can be required to take notice of all subsequent pleadings, interventions and cross-actions by the public generally, we see no reason why in a particular class of suits a -defendant, who has been served with citation that specifically warned him of the necessity of taking notice of subsequent pleadings, cannot be required to take notice of cross-actions of a particular kind by a particular class of claimants. We think the notice required by the statute affords all defendants a fair opportunity to be heard and therefore it does not violate the due process clause of our Constitution.

It is further contended that the Act is unconstitutional because it violates the provisions of Article 3, sec. 55, and Article 8, sec. 10, of our State Constitution, Vernon's Ann. St. These Articles read as follows:

Art. 3, sec. 55: “The Legislature shall have no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any corporation or individual, to this State or to any county or defined subdivision thereof, or other municipal corporation therein, except delinquent taxes which have been due for a period of at least ten years.”

Art. 8, sec. 10: “The Legislature shall have no power to release the inhabitants of, or property in, any county, city or town from the payment of taxes levied for State or county purposes, unless in case of great public calamity in any such county, city or town, when such release may be made by a vote of two-thirds of each House of the Legislature.”

In this connection, it is not contended that the statute under consideration undertakes directly to release any taxes to any one but it is contended in effect that since the Act authorizes the plaintiff to join as defendants all other taxing units having liens against the property and further provides that the purchaser of the property sold at -such foreclosure sale shall take title thereto • free of all liens for taxes, owing the taxing units that were parties to the suit, it is possible for the representatives of a taxing unit by failing to appear and file claim for the taxes due to thereby waive and release to the property owner the lien for such taxes. We recognize that it is possible, under the Act in question, for such representatives, by their carelessness or otherwise, to fail to properly foreclose the liens held by the taxing units which they represent, but this is a danger inherent in all governmental functions performed by human agents. It has always been possible for commissioners’ courts by failing to assess property at its full value, or for attorneys by failing to properly prove up their cases in tax suits, or for jurors by improperly resolving questions of fact in favor of the tax debtor, to thereby deprive a taxing unit of its just dues, but the mere existence of this possibility does not render all our tax laws unconstitutional. It is presumed that all public officials will honestly perform their official duties, Anderson v. Polk, 117 Tex. 73, 297 S.W. 219, and the statute and constitutional provisions in question must be construed in the light of that presumption. When so construed, the statute is not unconstitutional on the grounds stated. This exact contention was made in the case of Willacy County Water Control and Improvement Dist. No. 1 v. Lewis, Tex.Civ.App., 119 S.W.2d 159, and the San Antonio Court in that case, in an opinion by Associate Justice Slatton, overruled the contention. If the statute is followed and the officers perform their duty as they are presumed to do, it will be impossible to confer any special benefit on the tax debtor. When the statute is invoked, all taxing units have an opportunity to file their claims and to seek foreclosure of their liens. Upon the trial; the court judicially determines the actual value of the property and no one other than a taxing unit may buy the property in at the sale for less than such adjudged value. If the property brings its adjudged value, the taxing units will have received its full value, which is all that could possibly have been gotten out of it; and if it fails to bring its adjudged value, one of the taxing units may buy it in and hold the title in trust for the others, and consequently, the full value thereof will inure to the benefit of all such units. We overrule this contention.

It is suggested that the statute is unconstitutional because, by permitting a foreclosure of a tax lien through court,it violates the provisions of Article 8, sec. 13 of our Constitution as adopted in 1932, Vernon’s Ann.St. This section of the Constitution reads, in part, as follows:

“Provision shall be made by the first Legislature for the speedy sale, without the necessity of a suit in Court, of a sufficient portion of all lands and other property for the taxes due thereon, and every year thereafter for the sale in like manner of all lands and other property upon which the taxes have not been paid; and the deed of conveyance to the purchaser for all lands and other property thus sold shall be held to vest a good and perfect title in the purchaser thereof, subject to be impeached only for actual fraud; ⅜ ⅜ ⅜ »

It is insisted that this provision of the Constitution, by providing for a summary sale “without the necessity of a suit in Court,” is exclusive and inhibits foreclosure and sale through the court. The quoted provision does not appear by its own language to be exclusive. Necessarily, it must be construed in connection with other provisions of the Constitution. Article 8, sec. 15 of the Constitution, Vernon’s Ann.St, provides as follows:

“The annual assessment made upon landed property shall be a special lien thereon; and all property, both real and personal, belonging to any delinquent taxpayer shall be liable to seizure and sale for the payment of all the taxes and penalties due by such delinquent; and such property may be sold for the payment of the taxes and penalties due by such delinquent, under such regulations as the Legislature may provide.” (Italics ours.)

The italicized portion of the above section clearly delegates to the legislature the right to provide other methods than by summary sale by which property may be sold for the payment of taxes. State Mortgage Corporation v. State, Tex.Com.App., 17 S.W.2d 801; City of Henrietta v. Eustis, 87 Tex. 14, 26 S.W. 619. Article 5, sec. 8, of the Constitution, Vernon’s Ann.St., confers on district courts jurisdiction to foreclose liens on land, and we see no reason why taxing units should not be allowed to resort to such courts for the foreclosure of their liens. We think the legislature was fully authorized to provide as it did for foreclosure of tax liens through court. In fact, the enactment of some statute, such as is here under consideration, was apparently necessary in order to provide a forum for the adjustment of the claims of the various taxing units having liens on the same piece of property. It is a well known fact that in recent years there have grown up many overlapping taxing units. In many instances, the unpaid taxes, either by reason of the accumulation of several unpaid assessments, or as a result of the destruction of the improvements on the land, exceed the value of the land in its present condition. A third party cannot be induced to buy the property at the sale of any one of the taxing units because the unpaid taxes due other units, which the purchaser might be required to discharge, exceed the value of the property. If one of the taxing units, and particularly the state, buys the property in satisfaction of its own tax lien, there is a possibility that the other taxing units would lose their lien for all taxes then unpaid. State v. Stovall, Tex.Civ.App., 76 S.W.2d 206, writ refused, and authorities there cited; 61 C.J. 945, § 1215. If so, there would be a great advantage in favor of the unit first making the sale and buying the property in. The holding out of such a premium would lead to a race between the various taxing units to see which could be the first to make a sale and this would lead to antagonism between such agencies instead of that friendly cooperation that ought to exist between them as agencies of the state. The statute in question attempts to provide a forum by which the various claims of these agencies may be equitably adjusted. The Act provides that the remedies therein provided for shall be cumulative of all others and hence does not purport to exclude the right of summary sale as provided in Article 8, sec. 13. This contention is overruled.

⅝ ⅝ ⅜ ⅝ :J« ⅜ iji

We think the trial court erred in striking out the plea of intervention of the Mexia Independent School District and in refusing to allow said School District to establish its lien against the property.

The judgment of the trial court is reversed and the cause is remanded for a new trial.

Opinion adopted by the Supreme Court.


source: Caselaw Access Project

license: Public Domain

text:
    CRADDOCK v. SUNSHINE BUS LINES, Inc.
    No. 2265-7386.
    Commission of Appeals of Texas, Section A.
    Nov. 22, 1939.
    Wynne & Wynne, of Wills Point, for plaintiff in error.
    Thompson, Knight, Baker, Harris & Wright, Pinkney Grissom, and Rhodes S. Baker, all of Dallas, and A. A. Dawson, of Canton, for defendant in error.
   HICKMAN, Commissioner.

Judgment by default for $15,400 was rendered in favor of plaintiff in error Irl Craddock, hereinafter called plaintiff, against defendant in error Sunshine Bus Lines, Inc., hereinafter called defendant, for damages for personal injuries sustained by plaintiff and his wife and also injuries to their automobile, all resulting from a collision between the automobile in which they were-riding and a bus belonging to defendant. On the day following the rendition of the-default judgment a motion to set same aside and grant a new trial was filed by defendant, which motion was later amended and the amended motion overruled. On appeal the Court of Civil Appeals at Fort Worth reversed the trial-court’s judgment and remanded the cause with instructions to that court to vacate the default judgment and set the case down for trial on its merits in its regular order. 112 S.W.2d 248.

The suit was filed in the trial court on August 25, 1936, and at the same time two-citations were issued, one to Van Zandt county and the other to Kaufman county, both citations being returnable on September 7th. The Van Zandt county citation was served on the agent of defendant in that county on the day it was issued and the Kaufman county citation was served the following day by leaving a copy thereof at the business office of defendant in that county. Defendant carried indemnity insurance with the Travelers Insurance Company, and, by the terms of the policy, the Insurance Company was obligated to defend law suits of the nature of the instant one.

In its motion for a new trial defendant alleged that after the citations were served in the manner above indicated they were sent to John H. Awtry & Company, general agents of the Insurance Company; that Awtry & Company transmitted them with a letter to the Insurance Company on August 28th; that the envelope containing the letter and citations was opened by a lady employee in the claims department and by her passed on to a Mr. Morrison, who was in charge of that department, along with other mail received on that day; that Morrison checked the letter in such manner as to indicate that it related to urgent business and was to be returned to his desk with the files on the case either that afternoon or the next day; that due to a recent hail and wind storm in Dallas, which produced 400 claims against the company, the claims department was running behind with its work, and in order to meet the situation thus created the important mail was separated from that which was not so important and the former received first attention; that in some unexplained manner, the letter transmitting the citation became mixed with the general, or less important mail after being checked by Morrison, and was not discovered until September 10, the day upon which the default judgment was rendered in Van Zandt county; that upon its discovery, Morrison immediately took the citation to the attorneys of the Insurance Company, who proceeded with dispatch to ascertain the status of the matter, and on the following day filed a motion for a new trial; and that the attorneys representing plaintiff were advised of the foregoing facts and were also advised that the defendant was willing to try the case on its merits on the day the motion was filed or on any subsequent day. Facts were alleged which, if true, constitute a meritorious defense to the cause of action. Facts were also alleged which, if true, would establish that the judgment for $15,400 is grossly excessive.

Upon a hearing of the motion evidence was offered in support of all the material allegations therein contained. It was made further to appear upon the hearing that, if the judgment by default had been set aside on September 11, and a new trial granted, the plaintiff could have obtained a trial as soon as he could have done had an answer been filed before appearance day. It was also made to appear at the hearing that one of defendant’s attorneys, on the date the motion was filed, offered, on behalf of his client, to pay the plaintiff all of the expenses incurred in obtaining the default judgment. In short, it was shown, at least prima facie, that, had the default judgment been set aside and the case tried in its regular order, the plaintiff would have been in no worse position than he would have been had an answer been filed prior to the rendition of the default judgment.

An investigation of the question presented for decision by the above facts leads naturally for a beginning point to the case of Dowell v. Winters, 20 Tex. 793. In that case the defendant employed an attorney to answer for him, and the only excuse for his failure to do so was his mistake as to the law. The court, speaking through Justice Wheeler, recognized that the excuse was “certainly very slight;” but held that, since some excuse was proffered, the trial court should have set aside the default and granted a new trial. The opinion pointed out that it was not the intention of the attorney to suffer judgment to go by default. There was, of course, a showing made upon the hearing of the motion for a new trial of a meritorious defense, and it was also made to appear that the trial would not have been delayed, nor would the plaintiff otherwise have been injured, by the granting of the motion. Our court at that early date recognized the importance of setting up a guiding principle to rule in the decision of this important question of practice, as is manifest from this language taken from its opinion : “But the practice in our own Courts ought to be referable to some general principle, to produce uniformity * * * The Court then announced that principle in this language:

“But where the trial has not been delayed, and there is an affidavit of merits, we think the default should be set aside and the answer received, upon some showing by way of excuse for the failure to plead in time.

Some excuse, but not necessarily a good excuse, was the test there prescribed. When the opinion in that case is analyzed, it seems clear that the absence of an intentional failure to answer rather than a real excuse for not answering was the controlling fact.

In the case of Houston & T. C. Ry. Co. v. Burke, 55 Tex. 323, 40 Am.Rep. 808, the facts with reference to the excuse for failure to answer in time were strikingly similar to those in the instant case. The agent of the Railway Company who was served with citation should have forwarded same to Houston, but by mistake forwarded it to the general freight agent at another place. The freight agent was absent from his office and the citation remained on his desk until after default was taken. The trial court overruled a motion to set aside the default judgment and, in reversing the trial court’s judgment, the Supreme Court, speaking through Justice Gould, used this language:

" * * * We think the facts stated so far excused the failure to answer, that, if there .was also a showing- of a valid and meritorious defense, the court should have allowed the defendant an opportunity to make that defense available. The case made out is one of mistake and accident appealing strongly for relief from the judgment, if it be made to appear that the defendant would otherwise be deprived of a valid and meritorious defense. * * * ”

There are many other cases by the courts of this state of the same general import as the two above singled out, of which the following may be cited: Janes v. Laugham, 33 Tex. 604; Sedberry v. Jones, 42 Tex. 10, 11; Cowan v. Williams, 49 Tex. 380; Springer v. Gillespie, Tex.Civ.App., 56 S.W. 369; Clewis v. Snell, Tex.Civ.App., 59 S.W. 910; Mistrot Bros. & Co. v. Wilson, 41 Tex.Civ.App. 160, 91 S.W. 870; Pecos & N. T. Ry. v. Pearce, Tex.Civ.App. 117 S.W. 911; International Travelers Ass’n v. Peterson, Tex.Civ.App., 183 S.W. 1196; Miller v. First State Bank, Tex.Civ.App., 184 S.W. 614; Jackson v. Pure Oil Operating Co., Tex.Civ.App., 217 S.W. 959; Walker v. Harris, Tex.Civ.App., 227 S.W. 360; First National Bank v. Southwest National Bank, Tex.Civ.App., 273 S.W. 951; Borger v. Mineral Wells Clay Products Co., Tex.Civ.App., 80 S.W.2d 333.

Applying the rule announced in the Dowell-Winters case and followed in the other cited cases to the facts of the case before us, the certain conclusion is reached that the trial court should have granted the motion of the defendant to set aside the default judgment and reinstate the case on its docket. The failure to answer was on account of a mistake and was not intentional. The press of business resulting from the storm certainly constituted some excuse for the oversight; and the showing that there existed a meritorious defense, and that the plaintiff would not have suffered any injury by the granting of the motion, makes a strong appeal for relief from the judgment.

An inspection of the many decisions by our several courts on the question here involved reveals that the purpose of the court in the Dowell-Winters case in announcing the principle to which the practice should be referable, namely, to produce uniformity, has not been fully realized. Some lack of uniformity still exists. This is probably due, in part at least, to the fact that the question is controlled by principles of equity and it accordingly has been announced many times that its decision is directed to the sound discretion of the trial court. Naturally appellate courts will differ on the delicate question of whether trial courts have abused their discretion. While trial courts have some measure of discretion in the matter, as, in truth, they have in all cases governed by equitable principles, it is not an unbridled discretion to decide cases as they might deem proper, without reference to any guiding rule or principle. Trial judges desire and are entitled to have a principle or rule to guide them, and we, therefore, reannounce, in slightly changed language the rule established by the above authorities, as follows: A default judgment should be set aside and a new trial ordered in any case in which the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or an accident; provided the motion for a new trial sets up a meritorious defense and is filed at a time when the granting-thereof will occasion no delay or otherwise work an injury to the plaintiff. This is a just rule. It prevents an injustice to the defendant without working an injustice on the plaintiff. Such a rule has the sanction of equity.

The judgment of the Court of Civil Appeals is affirmed.

Opinion adopted by the Supreme Court.


author: GERMAN, Commissioner.

text:
    TEXAS EMPLOYERS INS. ASS’N v. SPARROW et al.
    No. 2262-7370.
    Commission of Appeals of Texas, Section A.
    Nov. 22, 1939.

      Royston & Rayzor and Robert Eikel, Jr., all of Houston, for plaintiff in error.
    Elton Cruse, of Beaumont, for defendants in error.
   GERMAN, Commissioner.

This is a compensation case, in which the beneficiaries of Allen Sparrow, deceased, were claimants, and they will be referred to as plaintiffs. Allen Sparrow was the employee. Texas Employers Insurance Association was compensation carrier and will be designated defendant. Southern Stevedoring & Contracting Company of Texas will be referred to as employer. The question for decision is: Was Allen Sparrow killed while in the course of his employment within contemplation of the Compensation Laws? The facts upon all essential particulars are undisputed. They are substantially as follows:

Sometime in October, 1935, longshoremen affiliated with the International Longshoremen’s Association went upon a strike and ceased work upon the city docks at Beaumont. Thereupon the various steamship companies doing business at Beaumont incorporated themselves into what was known as the Beaumont Maritime Association, Inc. The Bull Steamship Company was a member of this Association. The stevedoring companies, of which there were a number, including Southern Stevedoring & Contracting Company, were not in any way affiliated with the Beaumont Maritime Association, Inc. The Maritime Association proceeded to contract with what was known as the Independent Longshoremen’s Association Local No. 68011 to obtain laborers from this association to load and unload vessels belonging to members of the Maritime Association. Thereafter the Maritime Association brought a large number of the members of the Independent Longshoremen’s Association to the city docks and made arrangements to house and feed them there. They were housed and fed in box cars or bunk houses placed upon railroad tracks along by the side of the docks. None of the persons or companies doing stevedoring had anything to do with the housing and feeding of these longshoremen. On account of conditions arising from the strike most of those connected with the Independent Longshoremen’s Association remained upon the docks night and day, although they were left free to go and come at their will; and the testimony shows that about one-fifth of those belonging to that Association did go and come to the docks while doing work. For the convenience of those who did stay upon the docks the Maritime Association, through its secretary, had a telephone installed at a point on the docks near where the longshoremen were quartered. This was what was known as a public pay telephone, and those of the longshoremen who used it paid a small charge. The Southern Stevedoring & Contracting Company had nothing whatever to do with the installation or supervision of this telephone.

In the steamship business at the time in question the loading and unloading of ves-seis was conducted in the following manner: The steamship companies owned and operated the vessels. When necessary to load or unload a vessel, the Maritime Association, through its secretary, or occasionally the individual steamship company, contracted with some stevedoring concern to supervise the loading and unloading. This was the primary business of a stevedore. The longshoremen were the ones who did the actual labor. The Bull Steamship Company, although a member of the Maritime Association, appears to have made its own stevedoring contracts, and usually contracted with Southern Stevedoring & Contracting Company for that purpose. There were’,numerous other stevedoring concerns doing work upon the docks for various other steamship lines. It appears that most of the stevedoring companies drew upon the Independent Longshoremen’s Association for men to do the work of loading and unloading vessels. The practice seems to have been that the steamship line or company, sometimes individually and sometimes through the Maritime Association, would contract with an individual stevedoring concern for the loading or unloading of a particular vessel. The stevedoring company would then call upon the secretary of the Independent Longshoremen’s Association to furnish said stevedore with one or more crews of men, which crews would be in charge of a separate boss. One R. N. Adams acted as secretary and time-keeper for the Longshoremen’s Association. The Steamship Company, upon completion of the work contracted to be done, would pay the steve-doring company the amount agreed upon. The stevedore would then pay to Adams the wages due the various longshoremen who had been employed to do the actual work. Adams would deduct the amount, if any, due by the individual longshoremen to the Maritime Association for meals during the time he. was at work. He would then in turn pay to the foreman or boss in charge of each crew the aggregate amounts due such crew, and the boss of the crew would then distribute to the respective longshoremen the amounts due each. A small amount was deducted to pay expenses of the Independent Longshoremen’s Association and the services of the ’time-keeper or secretary.

The longshoremen worked by the hour. They appear to have worked when they pleased and laid off when they pleased. They worked at different hours during the day and night. They worked for different stevedores and upon different boats from time to time. The record of work done by Allen Sparrow during the forty-eight hours preceding his death is probably representative of the method of working. Beginning at 7:15 p. m. of November 16th he worked till 8 p. m. He then began at 8:30 and worked till 12 p. m. Beginning again at 7 a. m. on the 17th he worked till 12 noon. Then beginning at 1 p. m. he worked till 6 p.- m. Starting again at 8:30 he worked till 12:45 a. m. of the 18th. Beginning at 7 a. m. of the 18th he worked till 12 noon. Then beginning at 2:15 p. m. he worked till 6 p. m. He was killed about 7 p. m. of that day, as hereinafter set forth. On the 18th of November and for a number of days theretofore Sparrow had been working on a boat belonging to the Bull Steamship Line known as Jean. The Southern Stevedoring & Contracting Company had a contract with the Bull Steamship Line to unload and load the Jean. On the 18th he was a member of a crew of 21 laborers of which crew William Munford was boss. After working in the manner above indicated, Sparrow, along with other members of the crew, quit work at 6 p. m. for supper. There is nothing to indicate that Sparrow intended to return to work after getting his meal. The secretary, Adams, testified that the men usually worked until they got tired or burned out. He further testified that eight of the crew in which Sparrow had been working did not go back to work at 7:30 p. m. that evening, but fresh men took their places. As indicated above, Sparrow had worked during the preceding forty-eight hours a total of 27 hours and 15 minutes, a considerable portion of which time was at night. During the day on which Sparrow was killed another longshoreman by the name of Washington Jackson had been working for another stevedoring company on a vessel owned by the Lykes Brothers Steamship Line. Apparently most of these longshoremen had eaten their supper, including Sparrow, and were lounging around the docks in the neighborhood of the telephone which had been installed by the Maritime Association. A short time before 7 o’clock the telephone rang and one Dewey White, who had worked that day on the steamship Narbo, with Jackson, answered the telephone. White heard a woman’s voice on the telephone, who requested that Jackson be called to the phone. He was called and had a conversation with someone for a considerable length of time. While Jackson was talking Sparrow was some distance away near Adams, the secretary, and one Green, who had been working that day with Jackson. He inquired of Adams to know if there was a time limit on the use of the phone, and Adams replied that there was a limit of five minutes. There was a conflict in the testimony as to what was then said and done, but it seems to be reasonably certain that Sparrow said nothing to Jackson, and that when Jackson left the telephone he walked by Sparrow and stabbed him with a knife. As a result of the wound Sparrow later died. There was considerable testimony tending to show animosity on the part of Jackson toward Sparrow, on account of personal matters, but it seems to us that all of this is immaterial.

In the trial court judgment was in favor of plaintiff against 'Texas Employers Insurance Association, based on a finding that Sparrow was killed in the course of his employment as an employee of the Southern Stevedoring & Contracting Company. This judgment was affirmed by the Court of Civil Appeals, 109 S.W.2d 1137.

At the threshold of our discussion we are met with the serious question of whether or not Sparrow was an employee of Southern Stevedoring & Contracting Company. We are confronted with this inquiry, because it seems to us certain that he had such relation to the Bull Steamship Line as to come under the protection of its compensation contract. The Bull Steamship Line was a member of the Beaumont Maritime Association, Inc. That Association owned no vessels, but was merely the representative of its constituent members. The contract between the Beaumont Maritime Association, Inc., and the Independent Longshoremen’s Association Local No. 68011 was in writing. In that contract the Maritime Association was called party of the first part, and among other things it contracted as follows :

“The Party of the First Part agrees to give all of its Deep Sea stevedore work at the Port of Beaumont to the Party of the Second Part, beginning at 8:00 A. M., October 17, 1935, up to and including March 31, 1937, on conditions and terms hereinafter set out.”

In pursuance of that contract, and to aid in its fulfillment, the Maritime Association .made arrangements for lodging and boarding the members of the Independent Longshoremen’s Association on the docks. It then brought some two hundred of these members, under police protection and in closed conveyances, to the docks, where they were quartered. When the Maritime Association made the contract mentioned, its members knew that they had to contract in light of the regulations governing the loading and unloading of vessels; —that is through the intervention of a stevedore or stevedoring company. In the fulfillment of this contract with the Independent Longshoremen’s Association they therefore left no freedom of contract on the part of the Stevedoring, Company. In other words, the Bull Steamship Line, as a constituent member of the Association, could not allow the Southern Stevedoring & Contracting Company to contract with any one else for the actual work of loading and unloading its vessels without breaching this contract with the Independent Longshoremen’s Association. The Southern Stevedoring & Contracting Company could not therefore be an independent contractor. As the Bull Steamship Line knew that it could not get the benefit of the services of these men, as contracted for, without the intervention of a stevedore, it necessarily constituted such stevedoring company its agent for employing members of the Longshoremen’s Association to do the work of loading and unloading its vessels. The fact that the Maritime Association maintained the lodging quarters for these men, and provided meals for them, was a clear recognition that they were its employees, at least to such extent that they had to rely upon their services alone for the loading and unloading of vessels. If the compensation carrier of the Bull Steamship Line were before us we would be strongly inclined to hold that as to it Sparrow was killed while in the course of his employment. Unfortunately, however, for the plaintiffs the trial court gave an instructed verdict as to such carrier, and plaintiffs have prosecuted no appeal from that part of the judgment.

While it appears that an anomalous situation would be created by such an assumption, yet for the purpose of decision of this case as it is now presented we shall assume that Sparrow was an employee of the Southern Stevedoring & Contracting Company when he was killed.

After a very careful review of all the facts of the case, in light of practically all authorities, we are driven to the conclusion that Sparrow at the time of his unfortunate death was not in the course of his employment with the Southern Stevedoring & Contracting Company. By no course of reasoning can we distinguish this case from that line of cases involving injuries to employees while at their own homes or private boarding houses during meal hours. Even in cases where the employer himself furnishes a boarding or lodging place, absent a requirement of the terms of his employment, or as necessarily incidental thereto, that he lodge in said quarters, he is ordinarily not entitled to compensation for an injury at such place. In this instance, the Southern Stevedoring & Contracting Company had nothing whatever to do with the furnishing of the lodging and eating quarters of the men, but same were furnished by the Maritime Association alone, and it was 'paid therefor. In addition, Sparrow was not required to stay at said quarters. The proof is undisputed that at least one-fifth of the longshoremen left the docks and returned to the docks in the performance of their work. It is further true, as indicated above, that Southern Stevedoring & Contracting Company had nothing to do with the installation of the telephone and had no control over same or the use of same. Nor were Sparrow and Jackson co-workers, so far as the Southern Steve-doring & Contracting Company was concerned. If the injury does not arise in the course of employment, when an employee is injured at a bunk house or other lodging place furnished by an employer, except under conditions mentioned above, how can it be reasonably held that the injury is compensable when the employee is injured at a lodging place of his own choosing and not furnished by his employer? Our authorities, as well as many others, conclusively determine that there can be no recovery. Wallace v. Texas Indemnity Ins. Co., Tex.Civ.App., 94 S.W.2d 1201, writ refused; Associated Employers’ Reciprocal v. Simmons, Tex.Civ.App., 273 S.W. 686; London Guaranty & Accident Co. v. Smith, Tex.Civ.App., 290 S.W. 774, writ refused; Texas Indemnity Ins. Co. v. Clark, 125 Tex. 96, 81 S.W.2d 67; Moore v. Sefton Mfg. Corp., 82 Ind.App. 89, 144 N.E. 476.

The question is forcefully and fully discussed in the case of Guiliano v. Daniel O’Connell’s Sons, 105 Conn. 695, 136 A. 677, 56 A.L.R. 504. Particular reference is made to that case, as well as numerous authorities cited at pages 1255 and 1256 of 31 A.L.R.

The judgment of the Court of Civil Appeals is reversed. The judgment of the district court as to plaintiff in error Texas Employers Insurance Association is reversed, and the cause as to it is remanded. The judgment of the district court as to Travelers Insurance Company, the compensation carrier for the Bull Steamship Line, is unaffected.

Opinion adopted by the Supreme Court.


author: KRUEGER, Judge.

text:
    STEPHENS v. STATE.
    No. 20470.
    Court of Criminal Appeals of Texas.
    Oct. 11, 1939.
    Rehearing Denied Nov. 29, 1939.

      M. E. Lawrence, of Eastland, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   KRUEGER, Judge.

The offense is possession of whisky in dry area for purpose of sale; the punishment assessed is confinement in the county jail for a period of thirty days.

Appellant, by proper plea, questions the jurisdiction of the County Court over cases of this nature. He seems to take the position that since Brown County was dry area prior to the adoption of Section 20 of Article 16 of the Constitution of this State in 1919, Vernon’s Ann.St., and the penalty for a violation thereof was a felony, that offenses since the adoption of the amendment of the same section in 1935 are also felonies, inasmuch as the status of the county was restored as it existed prior to 1919.

The amendment to the Constitution in 1935, Vernon’s Ann.St., provides among other things as. follows; “ * * * In all counties, justice’s precincts or incorporated towns or cities wherein the sale of intoxicating liquors had been prohibited by local option elections held under the laws of the State of Texas and in force at the time of the taking effect of Section 20, Article XVI of the Constitution of Texas, it shall continue to be unlawful to manufacture, sell, barter or exchange in any such county * * any * * * intoxicants whatsoever, for beverage purposes, unless and until a majority of the qualified voters * * * shall determine such to be lawful.”

Appellant apparently contends that the provision in the amendment that it shall continue to be unlawful to manufacture, sell, or possess intoxicating liquor in such areas for the purpose of sale, etc., cannot be taken as a prohibitory provision to which the penalty prescribed in the Texas Liquor Control Act, Vernon’s Ann.P.C. art. 666—1 et seq., can have application, but may only apply to such territory as was wet area prior to the adoption of the amendment in 1919. We are unable to agree with him. He seems to lose sight of the fact that by the amendment of the above referred to article, all such area in which the sale of intoxicating liquor had been prohibited by local option elections held prior to the taking effect of the amendment in 1919 retained their dry status. In other words, the amendment to the Constitution in 1935 did not undertake or intend to abolish local option as it existed prior to the adoption of Section 20 of Article 16. The power to amend, revive or re-enact a law rests with the people of the State. They can amend the Constitution in any particular that they desire. All area that was dry by virtue of local option elections prior to the adoption of Sec. 20 of Art. 16 of the Constitution in 1919 were expressly restored to such status by the amendment of 1935, and the Legislature had a right to prescribe a penalty for violation thereof, which it did in the Texas Liquor Control Act. See Ferguson v. State, 133 Tex.Cr.R. 250, 110 S.W.2d 61.

Appellant has also brought forward a number of bills of exceptions complaining of the admission of evidence and a number of objections to the court’s charge. In the absence of a statement of facts, we cannot properly appraise the same.

No errors appearing in the record, the judgment of the trial court is affirmed.

PER CURIAM.

The foregoing opinion of the Commission of Appeals has been examined by the Judges of the Court of Criminal Appeals and approved by the Court.


text:
    Curley DAVIS, Appellant, v. STATE, Appellee.
    No. 20471.
    Court of Criminal Appeals of Texas.
    Oct. 11, 1939.
    Rehearing Denied Nov. 29, 1939.
    M. E. Lawrence, of Eastland, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   KRUEGER, Judge.

Conviction is for violation of the liquor law; punishment assessed is confinement in the county jail for a period of twenty days and a fine of $50.

The question presented by this record is identical with that presented in the case of Odell Stephens v. State, Tex.Cr.App., 133 S.W.2d 130, this day decided. For the reasons assigned by the court in that opinion the judgment is affirmed.

PER CURIAM.

The foregoing opinion of the Commission of Appeals has been examined by the Judges of the Court of Criminal Appeals and approved by the Court.


text:
    DAVIS v. STATE.
    No. 20469.
    Court of Criminal Appeals of Texas.
    Oct. 18, 1939.
    Rehearing Denied Nov. 29, 1939.
    M. E. Lawrence, of Eastland, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   KRUEGER, Judge.

Conviction is for violation of the liquor law; punishment assessed is confinement in the county jail for a period of ten days.

The question presented by this record is-identical with that presented in the case of Odell Stephens v. State, 133 S.W.2d 130, decided by this Court on October 11, but not yet reported [in State reports]. His-bills of exceptions cannot be properly appraised by us in the absence of a statement of the facts.

For the reasons assigned by the Court in the opinion above mentioned, the judgment is affirmed.

PER CURIAM.

The foregoing opinion of the Commission of Appeals has been examined by the-Judges of the Court of Criminal Appeals, and approved by the Court.


author: LOONEY, Justice.

text:
    SCHWARZ et al. v. NATIONAL LOAN & INVESTMENT CO.
    No. 12740.
    Court of Civil Appeals of Texas. Dallas.
    July 15, 1939.
    Rehearing Denied Oct. 28, 1939.

      Ramey & Adamson, of Sulphur Springs, and A. S. Jackson, of Dallas, for appellants.
    Randall & Gray, of Dallas, for appellee.
   LOONEY, Justice.

The events leading to the present controversy, briefly stated, are these: On March 12, 1927, Hawkins Court, Inc., conveyed to Otto Schwarz the lot of land involved in these proceedings, upon a recited consideration of $3,500, — cash $2,000, and a note for $1,500, retaining a lien on the land. This note was transferred by the vendor to the National Loan & Investment Company and, on April 1, 1927, Otto Schwarz and his wife Ruby executed a deed of trust on the lot to secure the note. On May 5, 1931, there was a foreclosure under this deed of trust, the Investment Company purchasing the property. Thereafter, on May 26, 1931, the Investment Company re-conveyed the property to Otto and Ruby, retaining a lien to secure $1,250 unpaid purchase money, payable in monthly installments of $20 each. Otto and Ruby executed a deed of trust on the lot to secure the installment note. On January 3, 1933, there was a foreclosure under this trust deed, the Investment Company again being the purchaser. On January 27, 1933, the Investment Company conveyed the premises to Viola Schwarz, retaining a lien to secure a purchase money note for $1,460, payable in monthly installments of $15 each; and Viola and her husband, A. C. Schwarz, gave a deed of trust on the lot to secure the note.

A. C. Schwarz, husband of Viola, and Qtto were brothers. It seems that, owing to the two preceding foreclosures, the Investment Company was unwilling to reconvey the property to Otto, but conveyed the same to Viola, she and her husband to execute, in favor of the Investment Company, the note and deed "of trust above mentioned. Under some arrangement between Otto and his brother and Viola, legal title to the land was held by Viola for the benefit of Otto and Ruby, who, at all times involved in this inquiry, retained possession of the premises, and Ruby made practically all monthly payments that were made on the note executed by Viola and her husband.

Viola Schwarz died prior to November 30, 1934, on which date, letters of administration on her estate were issued to her husband, A. C. Schwarz. Besides her husband, she left surviving the following children: Richard, Helen, Eleanor, Rose Katherine, Gladys Henry and A. C. Schwarz, Jr.

In this status, on July 2, 1936, Otto Schwarz filed in the court below an action of trespass to try title (cause No. 22,937-D) against A. C. Schwarz, Administrator of the Estate of Viola, and the National Loan & Investment Company, to recover title to the lot in question. The Investment Company answered the suit appropriately, and filed a cross-action in the nature of trespass to try title, against Otto Schwarz and Ruby, his wife, also A. C. Schwarz and the surviving children and heirs at law of Viola, deceased, seeking recovery of title to and possession of the lot. The Investment Company predicated its right to recover the land, on the contention that it had the right to rescind the contract of sale, because it had been breached by failure to pay the purchase money installments, as agreed. The cross-action was answered by Ruby and Otto; A. C. Schwarz, individually, also as administrator, and the children of Viola, disclaimed, except Rose Katherine,' a non compos mentis, for whom an answer was filed by the attorney appointed to represent her interest.

In this status of the pleadings, the cause was tried on the 9th day of April, 1937. After the introduction of evidence, Otto Schwarz took a non-suit, and, it appearing that there had been no default in the payment of purchase money, all installments having been regularly paid by Ruby, the court held that the right to rescind did not exist, therefore, announced that judgment ■would be rendered that the Investment Company take nothing by reason of its cross-action in trespass to try title.

It seems that the attorneys representing the Investment Company insisted that a clause be inserted in the judgment, expressly stating that the judgment pronounced was without prejudice to the rights of the Investment Company, if any, in regard to its unpaid purchase money and- the lien securing same.- Attorneys representing Otto and Ruby opposed the insertion of the clause in the judgment, and, after hearing opposing counsel, the court refused to permit the insertion of the clause, stating, however, in effect, that the only matter adjudicated was as to the right of the Investment Company to rescind the contract of sale; that no adjudication was made with reference to the lien, as that matter was not before the court. Thereupon, the following entry was made: “It is therefore by the court ordered, adjudged and decreed that the defendant and cross-plaintiff, The National Loan & Investment Company, a corporation, take nothing by reason of its cross-action against the plaintiff Otto Schwarz and the defendants Otto Schwarz, Ruby Schwarz, A. C. Schwarz, individually and as Administrator of the Estate of Viola Schwarz, Richard Schwarz, Helen Schwarz, Gladys Henry and husband, James C. Henry; Eleanor Schwarz and A. C. Schwarz, Jr., and Rose Katherine Schwarz;

Subsequent to the rendition of this judgment, no further payments were made by either Otto, Ruby or anyone else on the purchase money note. Their failure to make further payments was due to the advice of counsel, who was of opinion that, at the time the Investment Company filed its cross-action in trespass to try title (in cause No. 22,937-D), based upon its claimed right to rescind, it had two remedies; that is, could either have affirmed the contract of sale and sought foreclosure of its lien, or disaffirmed and rescinded, and, having elected to pursue the latter, and prosecuted its action of trespass to try title to a finality, and being defeated, was estopped to thereafter seek foreclosure.

A few months after the entry of the take nothing judgment (in cause No. 22,937-D), no further payments having been made on the purchase money note, the Investment Company instituted the present suit, naming as defendants the same persons in whose favor said judgment was rendered. The suit had a dual purpose: first, the Investment Company sought to have the judgment (in cause No. 22,937-D) reformed, by inserting therein the “without prejudice clause”, heretofore mentioned; the contention being that, the failure of the court to insert the clause at the time the judgment was rendered was due to deception practiced by appellants and their attorneys; and, in a second count, the Investment Company sought foreclosure of its lien on the lot to satisfy the unpaid portion of the purchase money note, alleged to be $1,308.-30. Lengthy answers were filed by both Otto and Ruby; Rose Katherine answered through the attorney appointed to represent her interest, and the effect of the answer of the other defendants, as recognized by the court in its judgment, was a disclaimer.

On April 26, 1938, the case was tried without a jury, resulting in judgment in favor of the Investment Company, correcting the take nothing judgment of April 9, 1937, by inserting therein the following clause, to wit: “It is the intent and purpose of this judgment only to deny to The National Loan & Investment Company its right to rescind its contract or deed dated January 27, 1933, executed by The National Loan & Investment Company, cross-plaintiff herein, in favor of Viola Schwarz and of record in Vol. 1790, page 123, of the Deed Records of Dallas County, Texas, and the validity of the lien therein retained and the deed of trust given to secure the same, together with the right to foreclose the same as against any and all of the parties hereto for breach or failure to comply with any of the terms, conditions or provisions thereof, shall not be prejudiced or impaired hereby or by any of the terms hereof, anything in this judgment to the contrary notwithstanding”, also decreeing as against all defendants foreclosure of the lien on the lot for the satisfaction of $1,-308.30, balance due on the note. From this judgment, Otto and Ruby Schwarz appealed, assigned errors, and urged propositions challenging the correctness of the judgment in the respects just mentioned.

We do not deem it necessary to discuss at any length the contention that the court erred in amending or correcting the judgment of April 9, 1937 (in cause No. 22,937-D), by inserting therein the without prejudice clause, as we do not regard the action of the court in so doing of any materiality, one way or the other. In rendering the judgment, the court could, with propriety, have inserted the without prejudice clause, as requested by appellee, without, in the least, prejudicing the rights of appellants, but its failure to do so, in our opinion, neither altered the status nor prejudiced the rights of appellee, for the simple reason that, the only matter decided was that the Investment Company failed to show that it was entitled to rescind the contract of sale. No adjudication was sought, nor was any had, involving the validity of the lien securing the unpaid purchase money. In the formal action of trespass to try title, neither the debt owing for unpaid purchase money, nor the validity of the lien securing same, was put in issue, nor was any adjudication made with reference thereto.

The first count, in our opinion, did not present a justiciable question, and the matter has been magnified far beyond its importance: However, will -state that, we fail to firid in-the record any real justification for the charge that appellants’ counsel was guilty of deception or -fraud, in opposing the insertion of the “without prejudice clause” in the judgment of April 9, 1937. We think it apparent that his position, although not disclosed at the time, was that, under the doctrine of election, as announced in the case of Marshall v. Mayfield, Tex.Com.App., 227 S.W. 1097, the right of the Indemnity Company to foreclose its lien in the future would be affected by the take nothing judgment, denying it the right to rescind.

So, we conclude that the controversy, in regard to the “without prejudice clause”, from beginning to end, was much ado about a relatively immaterial matter. However, if the court erred in" amending the judgment of April 9, 1937, by inserting therein the “without prejudice clause”, the error was altogether harmless, in that, it neither benefited nor prejudiced either party-

The record discloses that, while Otto and his wife, Ruby, filed separate answers and briefs, the main contention of each is the same, that is, that, under the doctrine of the election of remedies, appellee estopped’ itself to seek foreclosure of its lien. So, the question presented, is: Did the Investment Company, at the time it filed'its cross-action in trespass to try title, based upon its assumed right to rescind the contract of sale, have two available, inconsistent remedies? If so, having prosecuted the action to rescind the contract of sale to final judgment, waived its right of foreclosure, and es-topped itself to prosecute the present action.

For appellants to . successfully invoke the doctrine of the election of remedies, it must appear that appellee had two available, inconsistent remedies, one of

which was chosen and pursued to a finality; that is, it must be made to appear that at the time appellee filed its cross-action for the recovery of the land, it could either have rescinded the contract of sale and asserted its superior title to the lot, for failure to pay the purchase money due, or affirmed and sought foreclosure of its lien. This doctrine was very succinctly stated by Judge King, in Tullos v. Mayfield, Tex.Civ.App., 198 S.W. 1073, 1074, as follows: “In order to sustain a defense founded upon the doctrine of election, it must be made to appear that the plaintiff actually had two valid, available, and inconsisent remedies, and that he undertook to pursue one, and his supposition that he had a particular remedy, and his effort to enforce it, is immaterial, and does not constitute an election, unless the remedy, in fact, existed.”

On trial of the trespass to try title action, the evidence disclosed that there had been no default in the payment of the installments due on the purchase money note, therefore, the court held that the Indemnity Company had no legal right to rescind the contract of sale, hence rendered the take nothing judgment; and, as there had been no default, the right to institute foreclosure proceedings did not exist. The fact that appellee misconceived its right and, through a mistake, attempted to rescind and was defeated will not prevent it from prosecuting the present action of foreclosure, based upon a subsequent breach of the contract of sale, that is, failure to pay the purchase installments as provided in the contract.

In the case of White v. Bell, Tex.Civ.App., 290 S.W. 849, 851 (writ denied), Judge Barcus, speaking for the Waco Court, said:

“It is a well-established rule of law that, before an election of remedies is binding, there must have been in fact two separate, distinct, and inconsistent remedies existing at the time the election was made, and, if a party attempts a remedy which he thinks he has, but which as a matter of law does not exist, he is not thereby barred or defeated from prosecuting his legal remedy. 20 C.J. pp. 19-21; Wiseman v. Cottingham, 107 Tex. 68, 174 S.W. 281; Griffin v. Williams (Tex.Civ.App.) 142 S.W. 981; Tullos v. Mayfield (Tex.Civ.App.) 198 S.W. 1073. What we think to be the correct rule is stated and supported by authorities from almost every state in the Union in 20 Corpus Juris, p. 21, as follows:
“ ‘An election (of remedies) can exist only where there is a choice between two or more inconsistent remedies actually existing at the time the election is made. Hence, the fact that a party misconceives his right, or through mistake attempts to exercise a right to which he is not entitled, or prosecutes an action based upon a remedial right which he erroneously supposes he has, and is defeated because of such error, does not constitute a conclusive election and does not preclude him from thereafter prosecuting an action based upon an inconsistent remedial right.’ ”

See, also, Payton v. Travis County, Tex.Civ.App., 129 S.W.2d 361; other authorities could be cited to the same effect. So, we conclude that, under the facts and controlling rules of law, appellee was not es-topped to prosecute the present action of foreclosure.

Appellee does not seek a personal judgment against anyone for the unpaid purchase money, simply seeks foreclosure, alleging that there is a balance due on the note executed by Viola and her husband, A. C. Schwarz, of $1,308.30. For the first time, in their assignments and propositions, appellants challenge the correctness of the judgment, wherein the court fixed the amount of the unpaid purchase money at $1,308.30. This contention is urged because the statement of facts fails to include the purchase money note.

The record, in our opinion, conclusively shows that the note was in evidence; it was so considered by the court and by Mr. Adamson, attorney for appellant, during the examination of the witness Compere, who, while being questioned as to the amount due on the note, had same in his hand, and, at one juncture, Mr. Adamson stated: “We submit that the book (the pass-book) is the best evidence of the recitals in it, and any statement made by the witness would be his conclusion; the book is the best evidence of its contents, and the note is the best evidence of the payments that have been made upon it, or should have been made.” At another juncture in the examination the witness was asked: “Now, based upon that, what was due on this loan, as of April 1, 1937, on the principal ?” Mr. Adamson interposed an objection, stating: “We object to it, for the same reason we stated yesterday. The note is in evidence, and any statement by the witness would be his conclusion as to what the note and the pass-book showed.” The witness having answered that the pass-book showed correctly all payments on the note, the court observed, “The note is in evidence and the schedule of payments will show for themselves what they do show. Is that right?” Mr. Gray, counsel for appellee, answered, “Yes, Sir”.

In view of these record recitals, we do not think it can be successfully contended that the note was not put in evidence. As appealing parties, it was the duty of appellants to see to it that a correct statement, embodying all facts proven on the trial of the cause, was properly pre-pared before being presented for approval and signature by opposing counsel or the court. In the situation presented, we think appellants are estopped to take advantage of the absence of the note from the statement of facts, and that equity will regard as done that which ought to have been done. Besides, in addition to the note, the court had before it the deed from appellee to Viola, and the deed of trust executed by Viola and husband, each describing the note, as well as the pass-book showing all payments made on the loan. So, we do not think it can be said that the court erred in fixing the amount of the unpaid purchase money at $1,308.30.

We have examined and duly considered all other assignments and propositions urged for reversal, but, failing to find reversible error, the judgment of the court below is affirmed.

Affirmed.


author: CODY, Justice.

text:
    FINK et al. v. WHITE et al.
    No. 10861.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 12, 1939.
    Rehearing Denied Nov. 16, 1939.

      Roy L. Arterbury and Escar R. Wren, both of Houston, for appellants.
    Kemper, Hicks & Cramer, of Houston (John G. Cramer, of Houston, of counsel), for appellees.
   CODY, Justice.

This was an action of trespass to try title to lots 3, 4, 5 and 6, in Block 65, in Goose Creek, Harris County, brought by appellants against appellees. Appellees answered with a general demurrer, a general denial, a plea of not guilty, certain pleas of limitations, and with an offer to pay appellants such sums as the court might find appellees ought, in equity, to pay.

It was stipulated at the trial that the parties claimed under a common source of title, and that appellee Mrs. White had title to the lots unless it had been divested out of her and vested in L. Fink (appellants’ ancestor) by a certain tax judgment (for taxes due for the year 1928 in the sum of $23.74); order of sale issuing.thereunder; sheriff’s return thereon; and tax deed.

It was further expressly stipulated that the contention of appellee Mrs. White was that the judgment and order of sale expressly directed the sale of each of the four lots of land to be sold separately, but that instead of doing so, the sheriff disregarded such command, and attempted to sell the lots collectively, and thereby acted without the court’s authority, and that such sale, being an involuntary one, and not being supported by the judgment or order of sale, was ⅜ mere nullity.

The case was tried without a jury. The only evidence introduced was the stipulation of the parties, a part of which is above referred to, and a copy of the tax judgment, order of sale, sheriff’s return, and tax deed. The court rendered judgment against appellants, and in favor of appellee Mrs. White, for the title and possession of the lots, but rendered judgment against Mrs. White, and for appellants on Mrs. White’s tender, for the sum of $53.-93, which was the sum bid and paid by L. Fink for the lots at their sale, togeth-er with interest thereon at the rate of 6% ;per annum from the date the same was so paid. In response to appellants’ request the court- filed findings of fact and conclusions of law, which, in part, were as follows:

"III. With reference to the said tax deed to the said L. Fink, dated June 3, 1930, under which the plaintiffs herein claim title, I .find the following:
“(a) That on March 20, 1930, in cause No. 168,777 pending in the 61st Judicial District Court of Harris County, Texas, the State of Texas recovered a judgment against the defendant, Mrs. Linda White, in the amount of $23.74 for taxes due upon the above described lots for the year 1928, together with all costs of court, said judgment among other things -providing:
“ ‘And it is adjudged and decreed that a lien exists against each of said tracts or parcels of land for the amount of the taxes, interest, penalties and costs herein adjudged to be due on the same, which lien is hereby foreclosed as against said defendant on each of said tracts of land; and it is further ordered, adjudged and decreed that in default of payment of this judgment, interest, penalties and costs, an Order of Sale be issued by the Clerk of this Court directed to the Sheriff or any Constable of Harris County, Texas, commanding such officer to seize, levy upon and advertise for sale as under execution each of said tracts of land, and sell the same to the highest bidder for cash as under execution, * * *’■ and said judgment further authorized the subdivision of each of said lots or tracts into smaller tracts should the defendant file with the officer making sale a written request therefor.
“(b) I find that on April 29, 1930, an order of sale was issued by O. M. Duelos, Clerk of the District Court of Harris County, Texas, under the above described tax judgment, commanding the sheriff or any constable of Harris County, Texas, to sell the above described lots or tracts of land, such order of sale among other things providing as follows:
“ ‘Therefore, you are hereby commanded that you proceed to seize, levy upon and advertise for sale as under execution each of said above described tracts of land and sell the same to the highest bidder for cash as under execution’, said order of sale likewise providing that if the defendant'or her attorney at any time before the sale file with the sheriff a written request to divide or subdivide each of said lots or tracts into smaller tracts, together with the description thereof, that the sheriff or constable should sell the land in such subdivisions as the defendant may request.
“(c) I find that the sheriff of Harris County, Texas, disregarded the terms of both the above decree of foreclosure anij the order of sale issued thereunder, and offered for sale in solido all four of the lots or tracts above described, being lots Nos. 3, 4, 5 and 6 in Block No. 65 of the Town of Goose Creek, Harris County, Texas, and sold the four tracts above described, not separately, but as though they constituted one tract, to L. Fink on June 3, 1930, for the sum of $53.93, that being the highest and best bid made therefor, and that said four lots, collectively, were struck off to the said L. Fink, who complied with his bid by paying to the sheriff the sum of $53.93, which was sufficient to pay the judgment, interest, costs, and the cost of said sale, and that thereupon on June 3, 1930, the date of said purported sale, T. A. Binford, Sheriff of Harris County, Texas, did make, execute and deliver to the said L. Fink the sheriff’s tax deed above described purporting to convey to the said L. Fink, in consideration of the payment of said sum of $53.93, Lots Nos. 3, 4, 5 and 6 in Block No. 65 of the Town of Goose Creek, Texas, sold for taxes for the year 1928, said sheriff’s tax deed being dated June 3, 1930, and being recorded in Vol. 848, page 29 of the Deed Records of Harris County, Texas, and under which tax deed the plaintiffs herein claim title.”

The court then concluded, as a matter of law, that the case was ruled by Mills v. Pitts, 121 Tex. 196, 48 S.W.2d 941, 84 A.L.R. 319.

We have had occasion in the recent case of Fink et al. v. Grevsgard, Tex.Civ.App., 123 S.W.2d 383, writ refused, to follow and apply Mills v. Pitts. Appellants contend that the present appeal cannot be ruled by Fink v. Grevsgard, for the reason that it appears from the opinion therein that no challenge was made to the sufficiency of the evidence to sustain the court’s findings of fact in support of its judgment, whereas, in the instant case, appellants have challenged the sufficiency of the evidence to sustain the court’s finding to the effect that the sheriff sold the lots in solidó, and not separately. It is appellants’ contention, as we understand it, that the most that can be said is that the record is silent as to whether the lots were sold separately or in solido, and, in such case, the court must presume that the officer did his duty by making the sale in conformity with the order of sale. The court would, of course, have indulged the presumption in favor of the officer having performed his duty by obeying the court’s order, had not the record in this case presented sufficient evidence to sustain the court’s inference that the sheriff sold the lots in solido, contrary to the order of the court, and without authority. . Indeed, the record in the instant case appears to be identical with the record in the Mills case, as that record is reported in such case in the Court of Civil Appeals, at 19 S.W.2d 99 et seq. And it is to be noted that the trial court sustained the tax sale in the Mills case, but the Court of Civil Appeals reversed the judgment of the trial court and rendered judgment, and its action was affirmed by the Supreme Court. Hence, under the authority of the Mills case, the learned trial court was not only justified in inferring from the record in this case (which is the same as in the Mills case due, no doubt, to the employment of printed forms) that the sheriff sold the lots in solido,' contrary to the judgment and order of sale, but was required as a matter of law to do so.

Appellants further undertake to distinguish the instant case from the Mills case on the ground that the defendants in that case (i. e., the lot-owner who contested the validity of the tax sale) directly attacked the validity of such sale, whereas, in the instant case, appellees’ attack is collateral. It is true that in the Mills case the defendants filed, by way of cross-action, a trespass to try title action, but they did not therein allege that the sale was void, nor allege the grounds upon which it was void, while, in the instant case, though the appellees did not file any cross-action expressly attacking the tax sale, yet the parties did expressly stipulate that it was understood that Mrs. White was relying on the contention that the lots were sold in solido, contrary to the judgment and order of sale, and that such sale was void. Whether or not, after expressly stipulating that they understood Mrs. White’s contention to be that the deed, under which they, appellants, claim, is void, and the grounds on which she based such contention, appellants can justify their position as being stronger than it would have been if Mrs. White had filed a formal trespass to try title action to recover title to and possession of the lots, without revealing in any way the grounds' on which she based her right to recover, may well be doubted. But if, as was held in the Mills case, the tax sale was actually void, and affirmatively appeared to be void from the record in the case, then .it is immaterial whether Mrs. White made a direct, or merely a collateral attack on the sale, for a judicial sale which affirmatively appears to be void from the record in the case may be attacked collaterally. Indeed, it was necessary to appellants’ title to establish the validity of the tax sale; and instead of doing so appellants, by the record in the case, established that the sheriff’s sale was void.

The judgment is affirmed.

Affirmed.


author: O’QUINN, Justice.

text:
    CUCHIA et al. v. HEBERT.
    No. 3546.
    Court of Civil Appeals of Texas. Beaumont.
    Nov. 8, 1939.
    Rehearing Denied Nov. 15, 1939.
    W. O. Bowers, Jr., of Beaumont, for appellant.
    Lipscomb & Lipscomb, of Beaumont, for appellee.
   O’QUINN, Justice.

This is a paving lien suit filed August 25, 1934, by appellee, B. C. Hebert, against A. Cuchia, T. S. Reed Grocery Company, and appellant, E. R. Hicks. Cuchia failed to appear and answer, the Reed Grocery Company filed a disclaimer, leaving the contested issues between Hicks and 'Hebert.

Hebert sued to collect the amounts due upon two paving lien certificates issued on December 29, 1931, by the City of Beaumont to Scott Shambaugh, paving contractor, one against lot I and the other against lot 2 in block 19 of the Blanchett First Addition to the City of Beaumont, against A. Cuchia, the then owner of the lots. On January 2, 1932, Scott Sham-baugh transferred said certificates and paving liens to appellee Hebert. The certificates were payable in five equal installments evidenced by five coupons, the first due and payable in' thirty days from date, thp second one year from date, the third two years from date, the fourth three years from date, and the fifth -four years from date.

The City ordinance directing the improvements was passed August 11, 1931. The ordinance accepting the work and making the assessments and fixing the statutory liens • was passed December 29, 1931, the date of the certificates. The ordinance provided for payment of the paving on the date of the completion and acceptance of the work, and further provided that if the owner of the property had contracted privately he might make deferred payments accordingly, but did not prescribe the number nor the amount of deferred payments nor the times when said deferred payments should be made. Cuchia, the owner of the property, had so contracted with Shambaugh, the contractor for the right of making deferred payments, in the number above stated. This contract was approved by the City.

On February 25, 1929, A. Cuchia and his wife executed a deed of trust on the two lots in question, with other property, to secure the payment of a note in the sum of $10,000, payable to • appellant Hicks. Hicks foreclosed his deed of trust, the lots were sold and bought in by him on August 2, 1932.

The case was tried to the court without a jury. Judgment by default was rendered against A. Cuchia for $667.36 being the amount due on the paving certificates with interest and attorney’s fees, and for foreclosure of the paving liens on said two lots, against all parties defendant, and adjudging the costs, excepting the costs incurred by T. S. Reed Grocery Company, against A. Cuchia and E. R. Hicks, jointly and severally. Appellant Flicks thereupon excepted to said judgment and gave notice of appeal to this court.

There are no fact issues involved.

Appellant’s first assignment is that “An existing deed of trust lien on city lots is superior to a mechanic’s lien subsequently granted thereupon by the owner of the lots to á contractor for street paving abutting thereon, and said mechanic’s lien cannot be made superior to the deed of trust lien by city ordinance and the issuance of paving assessment certificate for such paving costs”.

The assignment is overruled. Article 1090, R.S.1925. Thurber Brick Co. v. Cox, Tex.Civ.App., 80 S.W.2d 435, writ refused; Kohfeldt v. City of Denison, Tex.Civ.App., 58 S.W.2d 549. Appellant, in his argument under his third assignment, relating to the question of limitation, so admits — he says:

“Appellant makes no contention that the paving lien created by the ordinance of December 29, 1931, and payable on that date, was not superior to his prior deed of trust lien, under Article 1090 Revised Statutes of 1925. No contention is made that any of the proceedings in connection with the fixing of said paving lien were irregular. It is contended that, on the face of the ordinance, the date fixed for the payment of the paving costs was December 29, 1931, and that appellee’s suit to collect said paving costs having been filed on August 25, 1934, is barred by the two-year statute of limitation.”

The effect of the second assignment is that the city ordinance did not expressly provide the terms of the contract authorized to be made by Cuchia, the property owner, and Shambaugh, the paving contractor, as to the number of deferred payments contracted for and the amounts and times of payment, and so his deed of trust lien was not subordinate to the paving lien. This assignment is overruled. The ordinance providing for the paving contained the following:

“The sum of money hereby assessed against abutting and railway property and the respective owners thereof, shall become due and payable (except as hereinafter stated) as of the date of the completion of said work and the acceptance thereof by said City as evidenced by a resolution of acceptance, and if said assessments are not paid at said time, they shall bear interest from such date until paid at the rate of seven per cent (7%) per annum, payable annually as it accrues.”
“Provided, however, that if the owners of any of said respective parcels of property shall have contracted with the contractor making said improvements for the privilege of paying said assessments on the deferred payment plan, then said respective assessments shall mature at the times and in the manner provided for in the contracts, etc”.
It is seen that the ordinance providing for the improvements did contain the very matters complained as omitted. In exercise of this privilege of contracting for delayed payments, Cuchia, on September 23, 1931, entered into a written contract with Shambaugh, the paving contractor, wherein he agreed “to pay at Beaumont, Texas, to Scott Shambaugh, his successors or assigns, whatever sum shall be ascertained to be the prorata share of the cost of said improvements, according to and under the terms of said resolution and ordinances and the said contract and the Charter of said City * * * the principal amount so ascertained shall be paid * ' * * in five equal installments, each becoming due and payable from and after the date of acceptance of said work by the City, the first in 30 days, the second in one year,” etc. The City approved this contract.

The paving was completed and was accepted by the City on December 29, 1931. Cuchia’s contract with Shambaugh for delayed payments was approved by the City on said date. On the date of the contract with Shambaugh, Cuchia executed to him a voluntary lien on the property involved to secure the payments provided for, in which the number, amounts and times of payment of the several installments were specifically set out. The paving certificates issued by the City for said work were duly delivered to Shambaugh, and on January 2, 1932, were transferred in writing by Shambaugh to appellee Hebert, and the transfer duly placed of' record in the M. & L. Records of Jefferson County, Texas.

The third assignment asserts that the action being for the cost of paving, the ordinance providing that the date of the acceptance of the work by the city should be the date of payment for the costs of paving, and the work having been accepted by the city on December 29, 1931, thus making the costs of the paving due on that date, and appellee Hebert having filed this suit for judgment on the debt and for foreclosure of the paving liens, on August 25, 1934, the action was barred by the two years’ statute of limitation, and the court erred in rendering judgment for appel-lee. This assignment is overruled. The initial resolution ordering the paving was adopted August 11, 1931. .The work was awarded to Shambaugh September 8, 1931. The amount of the assessment of the costs of paving was fixed by the ordinance December 29, 1931. After the paying lien thus attached, August 11, 1931, the property owner, Cuchia, entered into a written contract with Shambaugh September 23, 1931, reciting the proceedings to secure the assessment lien on the lots in question gender Shambaugh’s contract with the City, and obligating himself to pay to Shambaugh and his assigns the very debt so secured, described in the contract as “whatever sum shall be ascertained to be the prorata share of the costs of said improvements in front of said premises, according to and under the terms of said resolutions and ordinances and contract and the Charter of said City * * Thus Cuchia contracted in 'writing to pay the debt, in accordance with the requirements of the ordinance for the paving, and at the same time secured for himself an extension of the terms of payment as authorized to do by the ordinance and charter. This contract takes the case out of the two years’ statute and places it under the four years’ statute, Article 5527, R.S.1925. The two years’ statute not applying, it is seen that the action was brought less than four years after the due date, December 29, 1931, the suit being filed August 25, 1934. Kohfeldt v. City of Denison, Tex.Civ.App., 58 S.W.2d 549, 551; Thurber Brick Co. v. Cox, Tex.Civ.App., 80 S.W.2d 435, 437, writ refused.

No error appearing, the judgment is affirmed.