author: GRAVES, Justice.

text:
    ROBERTSON v. LYNCH DAVIDSON & CO.
    No. 10963.
    Court of Civil Appeals of Texas. Galveston.
    May 23, 1940.
    Rehearing Denied June 27, 1940.
    A. R. Rucks and Robt. M. Lyles, both of Angleton, for appellant.
    McFarlane & Dillard, of Houston, for appellee.
   GRAVES, Justice.

Tnis appeal is from a $241.60 judgment by the county court at law of Harris County, in appellee’s favor against appellant, entered pursuant to the return of an instructed verdict by the court, as for the amount found by the court to be then due upon appellant’s $450 note in favor of appellee’s predecessor in title thereto, of date March 31, 1936.

The sole question of law presented here is, as to whether or not such instruction of a verdict was erroneous, the appellant contending’ that it was, upon assignments, which may be thus epitomized:

(1) “Appellant pleaded and offered evidence tending to show that the note sued upon herein was not in the hands of an innocent purchaser, and that no consideration was given therefor; that it was only an accommodation note given without any consideration and with the distinct understanding that it would impose no obligation upon appellant.”

(2) “Nothing contained in the admission filed by appellant was sufficient to entitle appellee to a judgment herein, the only admission being to the effect that appel-lee had a prima facie case, unless the. same was defeated by the defensive facts; i. e., that the note was given only as an accommodation note, without any consideration, and with the distinct understanding that it would impose no obligation upon appellant, and was not in the hands of an innocent purchaser.”

Under the disposition determined upon for this appeal, no written opinion is required of this court; but, in deference to the painstaking aid given the court by counsel for both sides, as well as the importance of the question involved, this brief statement of the considerations upon which an affirmance of the judgment will be entered is made:

The $450 note sued upon was as follows: “$450.00 Alvin, Texas, March 31, 1936.
“Eighteen months after date, payable at rate of $25.00 per month, I, we, or either of us promise to pay to the order of Geo. M. Seaman, Receiver, Lynch Davidson & Company, Four Hundred Fifty and No/100 Dollars at Houston, Texas, or at office of Lynch Davidson & Company,' Houston, Texas, for value received, with interest at the rate of ten per cent per annum after maturity until paid. And in the event default is made in the payment of this note at maturity and it is placed in the hands of an attorney for collection; an additional amount of ten per cent shall be added to the same for attorney’s fees.
“The drawers and endorsers severally waive presentation for payment, protest and notice of protest for non-payment of note.
“Failure to pay this note at maturity shall, at the option of the holder of them; or any of them, at once mature and make payable all other notes this day given by the undersigned to said Lynch Davidson & Company.
“(Signed) A. J. Robertson.”

There were added averments as credits, resulting balance claimed to be due, and ownership of such note by the appellee at the date of suit.

Appellant answered by general demurrer, general denial, and special plea, to the effect that the note was then and had been from its inception “wholly without consideration, unenforceable, and created no liability, and imposed no obligation upon the appellant to pay the same or any part thereof”, for detailed reasons, hereinafter further referred to; on the call of the cause for trial, he further filed his “Admission Under Rule 31”, as follows:

“Now comes A. J. Robertson, the defendant in the above entitled and numbered cause, and admits that he executed and delivered the note sued upon by plaintiff herein and that plaintiff acquired the same in the manner alleged in his petition, but further allegés that the same was executed and delivered under the circumstances set forth in defendant’s answer filed in this cause and that plaintiff had knowledge of all of said facts at the time of the acquisition-of said note, and that therefore plaintiff has a good cause of action, except in so far as the same may be defeated in whole or in part by the facts of defendant’s answer filed herein constituting a good defense.
“That, defendant makes this admission after the issues of fact are settled and before the trial of this cause had commenced and demands the right to open and conclude in adducing evidence and in the argument of this cause.
“Wherefore defendant prays that the foregoing admission shall be entered of record and that he be accorded the right to open and conclude both in adducing evidence and in the argument of the trial of this cause, all as is provided by Rule 31 of the Rules promulgated by the Supreme Court of Texas governing the practice of District and County Courts in the State.”

The learned trial judge took cognizance of this admission, and granted the appellant the coveted right to “open and close” in the ensuing trial, which he availed himself of, but on conclusion of the evidence, in response to appellee’s motion therefor, gave the peremptory instruction referred to.

The facts so pled by the appellant in his answer, upon which he depended to defeat the appellee’s cause of action upon the note, are thus epitomized from his own brief:

“Further answering herein, defendant respectfully shows the court that the note sued upon by the plaintiff herein is wholly without consideration and unenforceable and creates no liability and imposes no obligation upon this defendant to pay the same or any sum of money whatsoever, either in Harris County, Texas, or elsewhere, for the following reasons, to-wit:
“That it was agreed between the parties thereto that this defendant should trade his automobile, which he had so worn out in the manner aforesaid (in furtherance of Receiver, Geo. M. Seaman’s business), as part of the purchase price upon a new automobile, and should pay a difference of $450.00 in cash and should draw a draft upon the said George M. Seaman, Receiver, for the said sum of $450.00, which said sum would be paid by said receiver, and that said new automobile should become the property of this defendant, and that he would receive said sum of money so furnished by said receiver and applied toward the purchase price of said new automobile to reimburse him, the said A. J. Robertson, for having worn out his automobile in the service of said receiver.
“In furtherance of said agreement and understanding, this defendant did exchange his old automobile, which had been so worn out in the furtherance of said receiver’s business, as aforesaid, for a new automobile, and did agree to pay, in addition to the amount allowed for said old automobile, the sum of $450.00 in cash, and did give the vendor of said new automobile a draft upon the said George M. Seaman, receiver, for said sum, which said draft was promptly paid by the said George M. Seaman, and this defendant took possession of said new automobile and the transaction was thereby closed.
“That several months thereafter, * * * said George M. Seaman, receiver, requested this defendant to come to his office, and upon his arrival at said office, the said George M. Seaman stated to this defendant that the payment of such a large sum as $450.00 at one time for an automobile and as automobile expenses for said business, was likely to be criticized by the court in which said receivership was pending, and therefore result in dissatisfaction among the creditors who had instituted such receivership and great embarrassment to such receiver, and that in order to avoid such criticism and embarrassment he, the said George M. Seaman, had prepared a note for $450.00, payable to himself, and being in all things identical with the note set out in plaintiff’s said petition, and that he desired this defendant to sign said note with the distinct agreement and understanding that said note would impose no obligation whatsoever upon this defendant, but would be credited with small amounts each month until the same was absorbed, and that such credit would be charged to automobile expenses and thereby the said George M. Seaman would avoid such criticism and embarrassment and that the sole purpose of the execution of said note would be to prevent such criticism, and that said note should not impose any obligation whatever upon this defendant, and this defendant executed said note under the ■ aforesaid circumstances at the request of the said George M. Seaman, receiver, merely to accommodate the said George M. Seaman, and in order that he might avoid such criticism, and with the distinct understanding and agreement with respect thereto, as is hereinbefore set out, and that for such reason said note imposes no liability upon this defendant and is wholly without consideration.
“That at the time the plaintiff, Lynch Davidson & Company, acquired said note, it acquired the same merely as successor in title to the receiver and the assets of said Lynch Davidson & Company, which were at said time in the hands of a receiver, and with full knowledge of all of the facts hereinbefore set out, and that therefore the plaintiff herein is in no sense a bona fide holder of said note for value, nor an innocent purchaser thereof, for a valuable consideration.”

Upon careful consideration of the record so presented, it is this court’s conclusion that appellant’s quoted answer, when reduced to its ultimate purport, plainly and unequivocally asserts that there was an entire want of consideration ab initio for the note given by him as distinguished from any failure of consideration whatever subsequent to its execution and delivery, for which reason it was void; that, at most, he therein declares himself to have been an accommodation-maker of the paper for Seaman, Receiver, and that he thereby brings the resulting case presented here squarely under the holdings of our Supreme Court in National Bank of Commerce v. Williams, 125 Tex. 619, 84 S.W.2d 691, and Cramer v. Cornell, Tex.Com.App., 130 S.W.2d 1023.

In other words, it seems clear that the only question appellant raises has been foreclosed the other way by the Supreme Court in the two cases cited, upon states of fact not in legal effect different from those presented here.

It would, therefore, serve no useful purpose to essay any first-hand construction of what the law is upon that question, provided the appellant’s answer had the resulting effect of classifying his case as coming within that rule, which this court thinks it did. The affirmance will be ordered.

Affirmed.


source: Caselaw Access Project

author: FOLLEY, Justice.

license: Public Domain

text:
    ANDERS v. HARTFORD ACCIDENT & INDEMNITY CO. et al.
    No. 5176.
    Court of Civil Appeals of Texas. Amarillo.
    June 17, 1940.
    W. F. Nix, of Amarillo, for appellant.
    Cantey, Hanger, McMahon, McKnight & Johnson and James C. Wilson, Jr., all of Fort Worth, and Peyton B. Randolph, of Plainview, for appellees.
   FOLLEY, Justice.

This suit was filed by the appellant, Dr. P. C. Anders, a practicing physician of Plainview, Hale County, Texas, against the appellees, the Hartford Accident & Indemnity Company and the West Texas Cotton Oil Company, to recover the sum of $396.10 for medical services rendered by the appellant to one Proctor Carter who was injured while in the employment of the West Texas Cotton Oil Company at Littlefield in Lamb County, Texas. The West Texas Cotton Oil Company carried workmen’s compensation insurance upon its employees in the Plartford Accident & Indemnity Company.

The insurance company paid the appellant for services rendered to the employee imm'ediately after the injury as provided in section 7 of article 8306, R.C.S. of Texas. It was for services rendered several months later on account of the same injuries that this suit was brought. From a judgment non obstante veredicto in favor of the appellees .this appeal is prosecuted.

The chief complaint of the appellant is with reference to the election of a special judge to try this cause. In his first four propositions the appellant asserts there is fundamental error apparent in the record because there was no substantial compliance with the procedure prescribed by law for the selection of a special county judge.

The copy of the court minutes appearing in the record in regard to the election of the special judge is as follows:

“On this the 21st day of July, The County Court of Lamb County, Texas, being then in session and the County Judge, Stanley Doss, being ill and unable and refusing to serve as such county judge, disqualified himself from the bench, and the practicing attorneys present did then and there open an election for special county judge; and,

“P. B. Randolph of'Plainview, Texas, an attorney at law; James C. Wilson, Jr., of Fort Worth, Texas, an attorney at law; and W. F. Nix of Amarillo, Texas, an attorney at law, did participate in the election in which three ballots were cast, on each of which ballots being cast was, ‘In favor of Robert Kirk, Olton, Texas, for special County Judge/
“Before entering upon the election, the sheriff, Sam Hutson, did proclaim at the courthouse door in Lamb County, Texas, that the election of a special Judge of the County Court was about to be made by the practicing lawyers present.
“There were three ballots polled in said election, all of said three ballots being in favor of Robert Kirk for said County Judge.
“And thereupon the oath prescribed by law was duly administered to the said Robert Kirk, attorney at law, special judge elected at said election, by the clerk of said court.”

Without a detailed discussion of the matter thus presented we think the above minutes of the court, in the absence of any other showing on the question, do not reveal any fundamental error, but on the contrary, show a substantial compliance with article 1934 and articles 1887-1892, R.C.S. of Texas.

By his fifth, sixth and seventh propositions the appellant contends the court erred in rendering judgment non obstante veredicto upon appellees’ motion therefor. The appellees object to our consideration of these propositions because they violate the rules for briefing. These propositions do not refer to any assignments of error nor do they indicate that they are based upon fundamental error. Moreover, they are not followed by any statement from the record, or otherwise, hearing upon the propositions, nor is there anywhere any reference to any portion of the record relative thereto. Under such circumstances it is not incumbent upon this court to search the record and supply this deficiency, neither are we compelled to consider such propositions in the condition in which they are presented. Rules 24, 25, 30 and 31 of Smoot’s Texas Court Rules; Terry et al. v. Williamson, Tex.Civ.App., 251 S.W. 813; Covin v. Covin, Tex.Civ.App., 24 S.W.2d 76; Blakeney et al. v. Johnson County, Tex.Civ.App., 253 S.W. 333; Stewart v. Poinboeuf et al., Tex.Civ.App., 270 S.W. 885.

The judgment is affirmed.


author: WALTHALL, Justice.

text:
    KORN et al. v. JOHNSON et al.
    No. 3944.
    Court of Civil Appeals of Texas. El Paso.
    May 23, 1940.
    Rehearing Denied June 13, 1940.
    A. E. Owens, of Alpine, and William H. Flippen and John W. Miller, both of Dallas, for appellants.
    Frank O. Ray, of Alpine, for appellees.
   WALTHALL, Justice.

This appeal is' prosecuted by appellants, defendants below, from a judgment of the District Court of Brewster County, Texas, in which suit Mrs. Lurline Johnson and husband, S. C. Johnson, and W. D. Johnson, as plaintiffs, sued Oskar Korn and E. Mol-lison, as defendants, to recover of them the amount of city, county and state valuation taxes, assessed against the properties described in the petition, one of which properties is in Alpine, Brewster County, and one in Fort Stockton, Pecos County. The taxes for which the suit was brought were for the years 1937 and 1938.

The suit is brought upon two lease contracts in writing, one of which, the Alpine contract, is of date September 20, 1929, and the Fort Stockton contract is of date February 21, 1929; each contract fully describes the real estate upon which the lease is made by the lessor, S. C. Johnson, to the lessees, Oskar Korn and E. Mollison.

The lease contracts embrace other matters than the payment of taxes, such as that the lessees will carry insurance policies for the matters therein specifically mentioned, but which other matters not being involved in this suit we omit stating.

The Alpine contract provides : “The lessee further agrees that he will pay such City, County and State valuation taxes as may be assessed against said building and lot and such taxes shall be paid by the lessee on or before maturity date.”

The Fort Stockton lease contract provides : “The party of the second part (appellants) further agrees that in consideration of this rental and lease agreement, that he will pay all such City-County and State valuation taxes as may be assessed against said building and said lots, and that such taxes shall be .paid on or before maturity date.”

The defendant lessees, appellants here, failed to pay the taxes upon each of the respective properties for the years 1937 and 1938, and the lessors, plaintiffs in the suit, were required to pay and did pay the taxes for each of the two years, and in this suit they seek reimbursement for the taxes paid, interest and costs of suit.

The aggregate amount of the taxes assessed and paid by appellees for each year is alleged and shown to be, the Alpine property, $580; the Fort Stockton property, $510. The issue as to the liability for taxes was involved in proceedings and suits in the courts in other cases.

In their answer declining liability for the taxes sued for defendants pleaded' in substance that for the taxes on the Alpine property, for the years subsequent to the year 1934 in cause No. 1742, styled Mrs. Lurline Johnson et vir. v. Oskar Korn and E. Mollison, plaintiffs in said suit, in their individual capacities, and upon the same cause of action, namely, recovery for taxes subsequent to the year 1934, were denied judgment for taxes, “upon the basis that the terms of the lease contract on the Alpine property, as altered by the agreed order entered in the Bankruptcy Court (Federal Bankruptcy Court, Dallas, Texas), and subsequently confirmed by the judgment of the State District Court, made the lessors therein liable for all taxes upon the real estate accruing subsequent to the year 1934, which denial of relief on the trial of the merits was incorporated in a judgment by the 112th District Court of Pecos. County, Texas (Fort Stockton County Seat), in cause No. 677, and which decree or judgment was affirmed by the Court of Civil Appeals at El Paso, * * * which said judgment still remains in full force and effect.”

As to the taxes on the Fort Stockton property, appellants Korn and Mollison answered that in cause No. 648, Oskar Korn v. W. D. Johnson et al., in the District Court of Pecos County, defendant W. D. Johnson in that suit filed a cross-action against Korn and Mollison to recover taxes for a period subsequent to 1934, in which Johnson was denied judgment on his cross-action, and on appeal the judgment was affirmed, and remains in effect (Tex.Civ.App., 117 S.W.2d 514).

Appellants further answered by way of estoppel, substantially to the effect that the lease contract provided for an arbitration on a disagreement; that an arbitration was. had and the award by the arbitrators was. accepted by the plaintiffs (appellees).

The trial court overruled some exceptions urged by defendants in that suit suggesting that defendants were excused from, the payment of the taxes on said properties subsequent to the year 1934, by the-federal court decree referred to in the petition.

Defendants’ exceptions were overruled.

Thé trial court, after the evidence was. heard, withdrew the case from the jury and, on plaintiff’s motion, entered judgment for plaintiff, Lurline Johnson, and against defendants (appellants). Defendants appealed, and that case was reviewed, by this court (117 S.W.2d 844), and the-judgment affirmed. The contract in that case is the same as in this, though the years. for which the taxes became due and payable: are different; also the main issues involved in that case were different from the issues in the instant case. The same might be said of the case of Korn et al. v. Johnson et al., 117 S.W.2d 844, reviewed by this court. . Both cases embrace the issue of liability ' for taxes on the same properties and under, The same leasehold contract. Without reviewing the cases at length, we can only refer to them with brief comments.

This appeal involves only the question of ,-the liability of appellants for the payment of the taxes on the two properties, described as Alpine and Fort Stockton, for the years 1937 and 1938.

In appellants’ propositions the contention is made in each of them in effect that the federal bankruptcy court decree referred to modified the covenant of the lease •contracts for the payment of the taxes for the years subsequent to the year 1934, thereby relieving appellants from the payment of the taxes for the years 1937 and 1938, for which this suit is brought.

Appellants admit in their brief that prior ito the date of the decree in the bankruptcy proceedings they were obligated by the terms of the original lease contracts to pay the real estate taxes involved here, but insist that the provision in the bankruptcy de•cree in the following language relieved them from so doing. Quoting from the decree : “Likewise it is agreed that the taxes •on and after 1934 as herein provided to be paid by the lessor shall be limited and restricted to real estate and its immediate improvements * * *.”

We think the language above quoted from the decree, as to the taxes, had reference to the years 193S and 1936, and no other years. The court was construing the lease contract only as to those years and as to evidence then before the court on the issues under consideration and under the agreement referred to. And what reference this court made to the bankruptcy decree evidently had reference to the years the court, in entering the decree, had in contemplation.

In Johnson v. Korn, 117 S.W.2d 514, at page 523, this court said: “We hold that by the terms of the lease contract as altered by the agreed order entered in the Bankruptcy Court and subsequently confirmed by the judgment of the District Court, the lessor was made liable for all taxes upon the real estate accruing subsequent to the year 1934. Unless such effect is given to the clause, with respect to taxes on the real estate and its immediate improvements which provided for their payment by lessor, the provision must be ignored. It is, however, as much a part of the contract as any other part of the document.”

In each of the original contracts the lessees (appellants) agree as a part of the consideration for the rental and lease agreement that they will pay all such city, county and state valuation taxes as may be assessed against the buildings.

The same conditions did not exist in 1937 and 1938 under the contract as in 1935 and 1936, when the bankruptcy proceedings were under consideration; nor were the parties to the lease contract present and agreed to a change or modification of the lease contract as in 1935 and 1936.

We are forced to the conclusion that the court’s order or judgment in the bankruptcy proceedings applied only to the years 1935 and 1936, and did not apply to subsequent years.

We think that for the years 1937 and 1938, now under consideration, the covenant of the lease contract applies without modification or change by conditions or agreement, or judgment in the bankruptcy proceedings.

Appellants submit in argument in their brief that this court recognized in Korn v. Johnson, 117 S.W.2d 844, that the federal court decree in the bankruptcy proceedings fixed the liability for the taxes upon the landlord.

We do not so construe the opinion. The question before this court in the case was whether or not the bankruptcy decree relieved appellants from the obligation to pay premiums upon the insurance carried upon 'the building. In considering the question this Court discussed the bankruptcy decree, and observed that there was no ambiguity about the provisions of the original contract creating this obligation; that this was not declared in the contract to be a part of the rental charge for the building, and further said, “the obligation was created by separate and independent covenants as was the obligation to pay the city, county and state taxes. The order in the Bankruptcy Court, though it provided that future taxes upon the real estate should be paid by the lessor, made no mention of the obligation of the tenants to carry insurance in favor of lessors upon the building.”

We think the clause in the above quotation, “though it provided that future taxes upon the real estate should be paid by the .lessor,” necessarily referred to the two years subsequent to 1934, and embraced only the two years 1935 and 1936, since only those two years, under the facts and circumstances, were before the court.

We have concluded that the trial court was not in error in holding that appellants were liable for the taxes for the years 1937 and 1938, and, appellees having paid the taxes, in rendering judgment for appellees for the recovery.

The case is affirmed.


author: WILLIAMS, Justice.

text:
    ANDING v. BYRD-HARMON DRILLING CO., Inc.
    No. 5640.
    Court of Civil Appeals of Texas. Texarkana.
    June 21, 1940.
    Rehearing Denied June 27, 1940.
    Hill & Bath, of Henderson, for plaintiff in error.
    Weeks, Hankerson & Potter, of Tyler, for defendant in error.
   WILLIAMS, Justice.

The oil wells situated on a 5-acre leasehold estate in Rusk County, owned by A. F. Anding, plaintiff below, having been drilled too deep, ceased producing oil. To recondition or plug back, so as to cut off the salt water, required the services of a cable tool rig to pull or lift the tubing; a derrick to which the cable tool rig is attached ; and equipment to pump cement down through the tubing. Byrd-Harmon Drilling Company, Inc., -defendant below, owner and operator of a standard cable tool rig, was employed by plaintiff to furnish certain labor and operate its rig in plugging back above wells at a scale of $150 for each 24-hour day’s service. Plaintiff furnished and erected a derrick to be used by defendant in this operation. The Independent Oil Well Cementing Company was employed by plaintiff to do the required cementing.

Each well was equipped with two-inch tubing run inside a seven-inch casing to a 3,700-foot depth. Well No. 2, which was reconditioned last, was plugged back without any trouble. Defendant proceeded to and did pull the tubing from well No. 1 with its rig, and cleaned the hole out to the depth designated by plaintiff’s foreman. It then let down and ran new tubing in the casing. The cement contractor proceeded then to do a “squeeze cement job,” that is, pumped down through the tubing sufficient cement calculated to rise 100 feet between the casing and tubing from the bottom. Then the cementing contractor instructed defendant to lift the tubing up to the desired height to “cut off the plug.” Defendant proceeded to lift the tubing with its rig. The top of the tubing had been raised two or three feet when the derrick shook and pulled in. Various efforts, to no avail, were made to pump the cement out and to pull the tubing before the cement set. Approximately 100 feet of tubing became cemented in the hole. As a result, additional time, labor and equipment were required and expended by both plaintiff and defendant to eliminate this condition and to complete the original undertaking.

Prior'to institution of this suit defendant had filed in the county clerk’s office, within the statutory time, a materialman’s and laborer’s lien against the ⅞ leasehold of plaintiff in the sum of $9,242.70 for services performed and material furnished on both wells. This suit by plaintiff was basically to have adjudged that he was not indebted to defendant as claimed by it, and for cancellation of the statutory lien so filed. In addition, plaintiff sought damages for added expenses incurred by him in removing the cemented tubing. Defendant answered with a general dfemurrer, denial, and special exceptions. In his cross action defendant sought recovery for its claimed indebtedness and for foreclosure of its statutory lien.

After the derrick had been erected by plaintiff, and prior to any operation, defendant removed from the derrick a “bull wheel girt” or “I-Beam.” Plaintiff contended in his pleadings and offered evidence in support thereof that the collapse of the derrick permitted the tubing to drop back and stick in the hole so it could not be removed before the cement set around it; and the collapse of the derrick was due to the negligence of defendant in removing the “bull wheel girt.” Defendant, on the other hand, contended and offered evidence in support thereof,' that the tubing had become stuck during the cementing operations, a hazard inherent in such an operation; that the cementing of the tubing was not due to the collapse of the derrick; that the collapse of the derrick was due to the fact that the tubing had become stuck, thus throwing an unusual pull on the derrick. In response to special issue No. 1, the jury found that defendant was not guilty of negligence in removing the “bull' wheel girt” or “I-beam.” To No. 25 the jury found that “the event of cementing the tubing in the well was the result of an unavoidable accident.” Other jury findings, which are not attacked, dealt with the number of days of service rendered and special equipment furnished or installed by defendant in the operations, and certain expenses incurred and expended by plaintiff. Upon findings No. 1 and 25, together with findings as to specific days of service and special equipment furnished by defendant, the court entered judgment that plaintiff take nothing, and awarded defendant recovery on its cross action in the sum of $9,122.20 with foreclosure of its lien on plaintiff’s ⅞ leasehold estate.

Plaintiff, under his first five propositions, asserts that the evidence is insufficient to support the jury’s verdict to issues No. 1 and No. 25. The two issues are largely controlled' by the same evidence and so treated by plaintiff in his brief. At the time the derrick collapsed the rig had lifted the tubing between two and three feet. Plaintiff offered evidence that this was proof that the tubing was not stuck when the pull began. Defendant’s witnesses testified that this two or three feet was due to the stretch in the pipe; that this was a common happening in a 3,700-foot string of pipe. A “6-hour cement,” a slow-setting cement, had been furnished the cementer by plaintiff. Within less than four hours a casing-pulling machine (made up of hydraulic jacks) in an effort to pull the tubing pulled it in two. Defendant offered evidence that the jacks were stronger than the derrick, and other testimony that this confirmed the claim that the tubing was stuck at the time the derrick collapsed. Plaintiff countered with evidence that the fall of the derrick permitted the tubing to drop back and stick; the sudden drop to twist and bend the tubing. That this prevented the hydraulic jacks from lifting it. To refute this, defendant offered evidence that the tubing had been equipped with Guiberson spiders and slips, a device which worked automatically, designed to permit tubing to be lifted from a hole and prevent tubing from slipping back. A long knife or cutting machine was used to cut a part of the tubing. Defendant offered evidence that if the tubing had been bent, the knife could .not have been used. There is evidence that the Guiberson spider had not been properly adjusted. Much of the evidence consisted of the opinions of witnesses, based upon their experiences in the oil fields, for necessarily what transpires 3,700 feet under the ground must rest to a great extent upon such character of testimony. The record discloses that undertakings such as this are of a hazardous nature, to such an extent that this work is done only on a per diem basis. There is evidence that the removal of the I-beam weakened the derrick; that this caused it to topple over; and that the derrick bent or caved in at or near where the beam had been removed. There is also evidence that this beam is not installed to support a derrick but to permit certain type of machinery to be attached in certain operations ; that in late times such beams were not installed because of the discontinuance of use of such machinery. According to some of the testimony a pull as here is done at a slight slant, and the sticking of the tubing caused such an unusual load to pull the derrick from its concrete fastenings ; that gosset plates used in bracing the legs of the derrick had been inserted in reverse by the builder, and this caused the derrick to buckle; and that the derrick was strong enough to pull all the tubing set in packing preparatory to cleaning out the hole. Above brief resume of a voluminous record, much technical/ discloses • that the respective claims were controversial. After a careful study of this record, the conclusion is not to be reached that the evidence is insufficient to support the jury’s findings. 3 Tex.Jur. 1096, Secs. 768, 769; 20 R.C.L. p. 19; E. L. Martin Inc. v. Kyser, Tex.Civ.App., 104 S.W.2d 592; Community Natural Gas Co. v. Lane, Tex.Civ.App., 133 S.W.2d 200; Rosenthal D. G. Co. v. Hillebrandt, Tex.Com.App., 7 S.W.2d 521; Western Assur. Co. of Toronto v. Busch, Tex.Civ.App., 203 S.W. 460, and authorities there cited.

As we interpret the remaining propositions, plaintiff contends that the court erred in entering judgment with foreclosure of lien on defendant’s cross action, in that from the undisputed evidence defendant merely made a demand to plaintiff of an account due of $8,315.20 and thereafter filed a lien for said services' and sued for $9,242.70, and the judgment rendered was in excess of the original account presented. The undisputed evidence shows that in February, approximately two months after the reconditioning of well No. 1 and about six weeks after the work on No. 2 had been completed, defendant made request by mail for payment and gave notice that the lien would be filed if not promptly paid. A summarized statement of the account then enclosed called for $2,-716.70 due for services on well No. 2, and $5,598.50 on No. 1. In March defendant filed a materialman’s and laborer’s lien. This was itemized and called for a total of $9,242.70 for which defendant sued. The judgment entered was for around $100 less than the amount sued for.

Above letter written, in February containing the first account contains a paragraph reading: “You have been fully advised from time to time the urgency of our need for at least a part of the money due us. We have been unable to make any collection whatever, or even to get a definite idea of when we might expect a settlement.” In plaintiff’s amended pleadings upon which he went to trial, he alleged, “but that during all of said time defendant claimed compensation from the plaintiff,' though no beneficial work was done by the defendant, at the rate of $150 per day, which was not just and reasonable and for which this plaintiff has refused to pay.” This would not support plaintiff’s claim that the first account rendered was an account stated, 1 Tex.Jur. p. 371, 1 C.J.S., Account Stated, § 1, p. 693, for such evidence does not import an agreement or acceptance by plaintiff, there being no evidence to the contrary.

The first account rendered was evi-dentiary to be considered by the jury in conjunction with the correctness of the subsequent account. In this connection plaintiff claims defendant padded the account to cover costs of collection. Defendant’s evidence on this phase is to the effect that charges were not made for full time on certain days in the first account rendered. That when it became patent that suit would be necessary, the full time was included in the itemized account with the lien so filed. And in support of its latter claim offered the daily driller’s reports and timetables. This evidence presented a question of fact for the jury. If the first account rendered had been an account stated, it would have constituted only prima facie evidence of the charges for the service. Dodson v. Watson, 110 Tex. 355, 220 S.W. 771, 11 A.L.R. 583.

The judgment is affirmed.


text:
    PEOPLES NAT. BANK OF TYLER v. CITY OF TYLER.
    No. 5637.
    Court of Civil Appeals of Texas. Texarkana.
    June 13, 1940.
    Rehearing Denied June 20, 1940.
    Lasseter, Simpson, Spruiell & Lowry, of Tyler, for appellant.
    Troy Smith, of Tyler, for appellee.
   WILLIAMS, Justice.

The Peoples National Bank of Tyler sued the City of Tyler, a municipal corporation, to recover on 4 sanitary equipment revenue bonds of $1,000 each, with interest and attorney fees. This was the balance unpaid of an original amount of $9,500 issued in July, 1931, by the city to .Sanitary Appliance Company and by the latter sold and delivered to the bank for a valuable consideration. They purport to-have been issued under Article 1111, R.C.S., Vernon’s Ann.Civ.St. art. 1111, pursuant to a purchase agreement with said company of 400 Saco Pit Toilets. Same is identical with the equipment described in American Nat. Ins. Co. v. Donald, Tex.Civ.App., 77 S.W.2d 1080. The issuance of the bonds grew out of an identical purchase contract, indenture, and city ordinance as detailed in above case. Here a mortgage was retained only against the equipment, and only the contemplated revenue to be derived from the rentals of such equipment was pledged to liquidate the bonds.

The indenture and bonds executed and issued provided for this equipment, styled Saco Pit Toilets, to be rented out by the city for a monthly rental of 75‡ per unit; that out of the revenue so realized, less certain expenses, the city was to pay not less than $225 monthly, and further in event of default the city was to pay $225 per month rental until the bonds were retired. Each of above instruments together with the bonds provided “the holder hereof shall never have the right to demand payment of- this obligation out of any funds raised by taxation.” The city, as the basis of issuance of the bonds and indenture, enacted an ordinance which in effect required the use of these units, prescribed penalties for failure to pay the rentals, and a fine of $100 per day for each day’s violation of any of the various provisions in the ordinance.

The venture did not get off to a flying start. Eventually 250 of such “Saco” seats and vent pipes were installed in privies. After a brief flash of success in collecting the rentals, the patrons gradually grew dilatory in paying. By September, 1935, practically all the patrons had ceased and refused to pay further, at least to the extent that the cost of collecting exceeded the amount realized. The city about this time conferred with and then offered the bank this property. The bank refused same, .starting it was in the banking business and none of its officials wanted to get into the “privy” business; wanted its money, and not the property. The plan of the bank at that time to have the city employ a certain collector did not materialize through no fault of the city. Evidently this proposed collector had studied the requirements of a comfortable seat for a toilet as advised by Chic Sale in his book “The Specialist.” He realized that the patrons were so dissatisfied with the equipment, and the construction of the enclosure minus light and library equipment, that they had theretofore . refused to pay, even in the face of being fined $100 a day; for he sought a more fruitful field. The city accounted for and paid over to the bank all revenue de- ■ rived from the rentals. In addition thereto the city had paid prior to September 30, 1934, to the bank on the bond issued $3,-672.29 out of, its general fund. The city expended further sums in an effort to faithfully comply with this venture. This equipment was in .no wise connected with the city’s sewer or water system. The purchase was not submitted to bids. No election was had on issuance of the bonds.

In the .original petition, filed January 14, 1938, the bank sought recovery on the bonds. Thereafter, on June 2, 1938, the bank made demand in writing for payment of bonds. A provision in the indenture provided for a written demand. A week later the cit-y tendered to the bank, in writing, the property. In the amended petition filed September 21, 1938, the bank sought recovery on the bonds; and in the alternative, to recover for the stipulated rental value of $225 per month from and after January 20, 1936, until such time as the aggregate amount equals the debt alleged to be due. And further, in the alternative, for reasonable value of the use and rental of the equipment from August 7, 1931, to date of trial, less $7,188 theretofore paid by the city. The city answered by general demurrer, denial, and the two and four-year statutes of limitation, and further pleaded that it did not claim any right, title or interest in the property and had theretofore tendered and there again tendered the property to plaintiff. The city alleged the warrants and contract to be void and that it had paid the bank out of its general fund on the bonds certain sums of money, giving dates and amounts, and sought to recover on a cross-action such sums from the bank, and in the alternative alleged that if the bank was entitled to recover, such money so paid out of its general fund should be set off against any amount the court might find to be due the bank. The cause was tried to the court. The bank was denied a recovery. The city was denied a recovery on its cross-action, and thus the trial court left the parties and the toilets where he found them.

The court concluded under the authority of American Natl. Ins. Co. v. Donald, 125 Tex. 597, 83 S.W.2d 947, that the bonds were issued in violation of the Constitution and void; and being void, the indenture and mortgage given to the bank as trustee to secure them is also void and the terms and provisions thereof are invalid. Appellant does not attack above conclusions of law. The trial court further concluded that if the city was originally legally liable to pay the value for the toilets when bought by it, its liability was barred by limitation; and defendant’s cross-action to recover the amount paid out of its general revenue funds to plaintiff was also barred by limitation. No assignment or cross-assignment attacks these two conclusions and they will not be noticed further.

Under the third and fourth conclusions of law the court found “the pit toilets attempted to be bought by the city to be installed on the private premises of citizens, and for the private use of the occupants of such premises are not, and were not, for the general use and benefit of the city, and were not such equipment as the city had any right to purchase (as distinguished from those things which a city might purchase and be liable for the value although there be some defect in the provisions made for payment), and, therefore the city is not liable for any rental value to the owner or seller or its assigns, of the property.” It is upon this conclusion of law that appellant directs its attack. And in connection therewith the fourth proposition reads: “Where a city obtains personal property by reason of the execution of void bonds, and thereafter tenders the property to the vendor, the vendor is entitled to recover the reasonable rental value for the use of the property for the period of time within the two years statute of limitations.”

And in support thereof urges the proposition that “A city organized under the general laws and having adopted the powers conferred therein, has power, under the city’s general powers, to promote public health, to contract for the purchase of sanitary pit toilets to be owned by the city and to be rented to property owners to facilitate owners’ compliance with sanitary ordinances.”

At the time of trial the opinion by the Commission of Appeals in the Donald case, supra, was the last expression on the subject here involved. That opinion held that municipal revenue bonds issued for the purpose of pit toilets which had no connection with the city’s water and sewer system and which the city rented to individual inhabitants, were void, and specifically stated that such pit toilets gave no benefit to the general public save and except that which might be incidental. In Baldwin v. Travis County, 40 Tex.Civ.App. 149, 88 S.W. 480, 481, 484, writ denied, it is stated, “And a county cannot be held liable in an action upon an implied contract or quantum meruit, unless the commissioners’ court was authorized to make the contract sought to be implied, or on which the quantum meruit is based.” In McQuillin on Municipal Corporations, Vol. 3, Sec. 1274, it is said: “If a contract is ultra vires it is wholly void * * * and (4) there can be no recovery on an implied contract, although it had been executed and the municipality has received the benefit of the contract.” In 19 R.C.S. p. 1064, it is stated, “When a contract is entered into in violation of a positive rule of law intended for thé protection of the taxpayers such as a requirement * * * that the incurrence of an obligation of a certain magnitude (as here) shall have the approval of the voters * * *, there can be no recovery * * * upon a quantum mer-uit.” Evidently the able and learned trial judge followed above authorities and the provisions in the bond and indenture that the holder should never have the right to demand payment out of any funds raised by taxation. But since the trial, the Austin Court of Civil Appeals in Collins v. City of Eldorado, 122 S.W.2d 690, in construing the holding in Southwestern Lloyds v. City of Wheeler, 130 Tex. 492, 109 S.W.2d 739, reached the conclusions that a city operated under the general laws had the implied power to purchase pit toilets. Writ of error was refused in the Eldorado case. This being the latest expression of the Supreme Court, we reluctantly conclude that the bank “has a right to seek recovery on the theory of quantum meruit.”

The court’s findings of fact will not authorize a judgment to be here rendered on the quantum meruit theory, or a denial of recovery on same. The court’s finding of fact No. 11 will not support a recovery on such theory. Because as stated in Sluder v. City of San Antonio, Tex.Com.App., 2 S.W.2d 841, 842, 845, “* * * where a * * * municipality receives benefits under a contract, illegal because not made in conformity with the Constitution or statute of the state, or charter provision of the city, it will be held liable on an implied contract for the reasonable value of the benefits which it may have received” and “would be limited to the reasonable value of the benefits received by the city.” To the same effect see West Audit Co. v. Yoakum County, Tex.Com.App., 35 S.W.2d 404; City of Texarkana v. Keeney, Tex.Civ.App., 50 S.W.2d 339; City of Mission v. Eureka Fire Hose Mfg. Co., Tex.Civ.App., 67 S.W.2d 455. The evidence presents a serious question as to whether the city received any benefits from this undertaking. The stipulation in the indenture of a rental of $225 is only evi-dentiary.

The date of the first tender and refusal, if in fact made, would be material in calculating the amount the city benefited, if any, from the use of the property, and the application of the statute of limitation urged as a defense to recovery. In the absence of either of such 'findings, and in view that the cause was disposed of under the first theory above discussed, the cause will be reversed and remanded.

We agree with the trial court wherein it is stated that “the court would not have permitted them to be actually tendered in court.” Being installed and in use on private premises of individuals as contemplated under the contract, probably perfumed, saturated and stained from usage, the city will not be required to seize and manually deliver these so-called pit toilets into the lobby of the bank or the court room in order to constitute a legal tender.

The judgment is reversed and cause remanded.


author: STOKES, Justice.

text:
    PROVIDENCE WASHINGTON INS. CO. v. FARMERS ELEVATOR CO., Inc.
    No. 5179.
    Court of Civil Appeals of Texas. Amarillo.
    June 17, 1940.
    Monning & Singleton, of Amarillo, for appellant.
    H. H. Smith, of Panhandle, for appellee.
   STOKES, Justice.

This is an appeal from a judgment of the county court setting aside an award of two appraisers and an umpire duly appointed under the provisions of an insurance policy issued by appellant upon a truck and trailer. The property was destroyed by fire on February 20, 1939, and under the provisions of the policy appellant and ap-pellee each selected an appraiser who met and selected an umpire and the three of them organized as an appraisal or arbitration committee to determine the amount of the loss. The appraisers met on the 24th of May, 1939, and assessed appellee’s damages at $550. Appellee, contending it ought not to be bound by the award because the amount thereof was determined as a result of fraud, gross mistake and bias on the part of the appraisers and gross inadequacy in the amount awarded, filed suit to set it aside and to recover on the policy.

The case was submitted to the court without the intervention of a jury and resulted in a judgment setting aside the award of the appraisers and a recovery by appellee of the sum of $800, from which appellant has perfected an appeal to this court.

The policy contained the usual provision for the appointment of appraisers and the selection by them of an umpire to determine the amount of damages occasioned by the destruction of the truck and trailer in the event the insured and the insurer could not agree thereon.

Appellant assigns error of the court in setting aside the award and rendering judgment against it for a greater amount because the evidence was not sufficient to establish bias or prejudice of the appraisers nor fraud, accident, mistake nor any other ground upon which, under the law, the court was warranted in such actibn. The appointment of the appraisers, the oath subscribed by them, and the return of their award are all in regular form and nothing appears upon the face of any of the proceedings conducted by them which would indicate irregularity of any sort. Appellee contends, however, that the appraisers acted in an arbitrary manner; that the award was the result of a gross mistake and that there was collusion of the umpire and one of the appraisers with the adjuster of appellant. It contends that the appraisers acted arbitrarily because two of them had not séen the truck before the fare; knew nothing of its value before its destruction, and arbitrarily used a price list of secondhand trucks in arriving at the value of the truck and trailer which were destroyed.

The record shows that J. W. Christopher, the appraiser appointed by appellee,. was a resident of Whitedeer where the truck and trailer were destroyed and had been in the wholesale oil and gas business there for some two years prior to the fire. Christopher testified that he was familiar with the truck and trailer and had seen them the day before they were destroyed. He also testified that he was familiar with the market value of the vehicles. In addition to this, the record shows the appraisers had before them a number of price lists showing the market prices of various makes of second-hand trucks and that they made an examination of the remains of the destroyed vehicles, which consisted of the frames, wheels, a portion of the tires and other parts that had not been destroyed by the fire. The adjuster for appellant testified that a very definite idea of the condition of such vehicles before they were destroyed by fire could be obtained by inspection of the indestructable parts 'after they had been damaged by examining the wearing portions and observing generally the apparent wear and tear to which the vehicle had been subjected before its destruction. It was also shown that the speedometer registered 38,000 miles. In addition to this, the appraiser selected by appellant was an employee of an automobile dealer at Amarillo and the umpire selected by the two appraisers was an automobile dealer in the same city. We think it rea--sonable, therefore, to assume that both of the appraisers and the umpire had a fair knowledge of the matters they were appointed to investigate. When the appraisers and umpire met to consider the matter, Christopher, the appraiser appointed by appellee, was of the opinion that the value of the truck and trailer prior to their destruction by fire was $900, the value of the truck, according to this witness, being $700 and the value of the trailer $200. His estimate of the sálvage after the fire was $100, leaving $800 as the damage for which he thought the award should be made. Wilkerson, the appraiser appointed by appellant, was of the opinion that the damages should be assessed at $425. There being an irreconciliable difference between them, they discussed the matter with Casey, the umpire, who was of the opinion that the damage should be assessed at $650. The record shows they discussed the matter fully and at length and finally agreed that the damages should be assessed at $550. The testimony shows that, while the price lists were considered by the appraisers, their conclusions were not based wholly thereon, but the award was from 25% to 50% greater than the price lists indicated similar vehicles were worth on the market at the time they were destroyed. Christopher and Casey were witnesses at the trial of the case in the county court and they both testified that they performed their duties to the best of their ability and each said that from the actions of the others he believed that all three of the arbitrators did likewise.

We do not see anything in this or any of the testimony contained in the record that would indicate the appraisers acted in an arbitrary manner. On the other hand, the record indicates they acted honestly and fairly, having in view only the desire and purpose to make a fair and honest adjustment of the matter and return a just and fair award.

Appellee further contends in this connection that the award was arbitrary, inaccurate and unfair because it was made without the testimony of witnesses having been adduced at the hearing and without any information concerning the condition of the vehicles before they were destroyed. It is not shown by the record that any witnesses testified before the appraisers, but it does not appear that appellee tendered any witnesses or made any request that testimony be heard. Furthermore the record contains no suggestion as to the nature of any evidence or testimony that was available to the appraisers nor that they declined to hear testimony or receive any information that could have been produced. Under this state of the record appellee is in no position to contend that the appraisers acted arbitrarily or that their award should be set aside on account of failure of the appraisers to hear testimony. In the absence of allegation and proof as to what the evidence may have been or a showing that there was evidence which was available and. that it was material, it must be concluded that there was no such evidence available or, if so, that it was not material to the issue. Elder v. McLane, 60 Tex. 383; Orient Insurance Co. v. Harmon, Tex.Civ.App., 177 S.W. 192.

As a basis for the judgment the trial court found that the appraisers’ award was arrived at by and through gross mistake on the part of the appraisers; that the appraisers were partial to appellant and that the award was grossly inadequate. We find nothing in the record which, in our opinion, warrants the finding of the court that the appraisers were partial to appellant. Indeed, we are unable to resist the conclusion that the acts and conduct of the appraisers and umpire in conducting the appraisal and in their discussions and efforts to arrive at a just and fair award, as shown by the evidence, reveal a high degree of fairness and impartiality. Neither of them was in any manner interested in the subject of the controversy. Neither of them was shown to be particularly friendly to either the appellee or the appellant, and all three of them must have been possessed of more than the average knowledge concerning the value of the destroyed property. There is no suggestion in the record that they declined to consider any material phase of the controversy or any evidence or-information that was available to them. The most that can be said of the award is that it may have been for a smaller amount than might have been determined by a court or jury, and it is well settled that a court will not substitute its judgment for that of the appraisers in the absence of a showing that the award was induced by fraud, accident, mistake or some circumstance which would render it unjust and unfair to one or both of the interested parties. Home Ins. Co. v. Walter, Tex.Civ.App., 230 S.W. 723; Brodhead-Garrett Co. v. Davis Lumber Co., 97 W.Va. 165, 124 S.E. 600; Larson v. Nygaard, 148 Minn. 104, 180 N.W. 1002.

As to the finding of the court that the award was effectuated through gross mistake on the part of the appraisers, we do not find any evidence in the record which, in our opinion, is of such a nature as to form a basis for such conclusion. As we have already said, the award may have been for a less amount than the court would have adjudged, but, even so, the court was not warranted for that reason in concluding that the award was based upon a mistake. The difference between the conclusion of the court and that of the appraisers was purely one of opinion. The award was the unanimous finding of the appraisers and umpire. It was arrived at deliberately and apparently in good faith. The only ground upon which the court is warranted in setting aside such an award on account of mistake is upon a showing that the award does not speak the intention of the appraisers. In this case the award was signed by all three of them and, while they differed in the beginning, their minds met in the final conclusion and neither of them testified to any fact which would indicate the award was-different in any respect from that which all three of them intended it should be. The correct rule in this respect was expressed by the court in the case of Gulf Insurance Co. v. Pappas, Tex.Civ.App., 73 S.W.2d 145, 146, in the following language: “The true question in such cases is, Were the appraisers laboring under a mistake of fact by which their award 'was made to operate in a way they did not intend?” Citing many authorities.

The only evidence of collusion that could be deduced from the record is that the opinion of Wilkerson, the appraiser who was appointed by appellant, as to the value of the property before its destruction by fire, is that it was the same as the opinion of the insurance adjuster, which was $650, and that this coincided with the value placed thereon by Casey, the umpire. In view of the fact that both Wilkerson and Casey were engaged in the automobile business and, therefore, must have been familiar with the value of such vehicles, and that the insurance adjuster was shown to have been constantly engaged in the business of appraising and adjusting claims for loss of such vehicles by fire arising under insurance policies, we cannot say that this circumstance, standing alone, shows collusion between them. There is no other intimation in the testimony which indicates any collusion and, in our opinion, the fact that the opinions of these parties coincided to some extent may be fully accounted for without necessarily impugning their motives. It is held that nothing will be presumed against such an award. Every presumption will be indulged in its favor unless it is contradicted by proof. Robbs v. Woolfolk, Tex.Civ.App., 224 S.W. 232; Green v. Franklin, 1 Tex. 497.

In support of the judgment entered by the court .setting aside the award of the appraisers and appellee’s contention that the same should be upheld, appellee cites us to the cases of Continental Insurance Co. v. Guerson, Tex.Civ.App., 93 S.W.2d 591, and Home Insurance Co. v. Ketchey, Tex.Civ.App., 45 S.W.2d 350. In the Guerson case, among other things which indicated the appraisers did not give serious consideration to their duties,, it was shown that the property destroyed by fire was household furniture, much of which was completely destroyed, nothing remaining but ashes. The appraisers promised to Mrs. Guerson an opportunity to appear before them at the scene o.f the fire and that they would consider her statements concerning the nature and value of the articles of furniture destroyed. They indicated the time when they would be there and Mrs. Guerson went to the house at the appointed time but found the appraisers had already conducted their investigation and left the premises. She was not afforded any other opportunity to appear before them, and it was shown they had no opportunity to know, and in fact did not know, anything about the value of the property destroyed and made no serious effort to inform themselves of that important feature of their duties. In the Ketchey case it was shown that the entire appraisal was dominated by McClellan and that Newbury knew nothing about the property that had been destroyed. A reading of the facts upon which the opinions in those cases were based will show that the purported appraisals were wholly unjust, arbitrary and lacked the elements of fairness. The instant case is not of that nature and is not controlled by the Conclusions of the courts in those cases. We think the entire record before us impels the conclusion that the appraisal was conducted in a fair and proper manner; that the award was the conclusion of the appraisers and umpire, fairly and honestly reached; that there was no partiality or collusion shown, and that the appraisers acted in an honest and conscientious manner. Under these circumstances the trial court was not warranted in setting aside the appraisal and its judgment will have to be reversed.

The case seems to have been fully developed, and since, in our opinion, the parties were bound by the award returned by the appraisers, it becomes our duty to render such judgment as the trial court should have rendered, which is that the appellee recover only the amount of the award, viz., $550. This amount having been duly tendered and' paid into the registry of the trial court, it will be ordered delivered to appellee by the clerk upon application and receipt therefor, the costs in the trial court and in this court being adjudged against the appellee.


text:
    WISE COMMON SCHOOL DIST. NO. 2 OF CASTRO COUNTY v. CASTRO COUNTY SCHOOL TRUSTEES et al.
    No. 5239.
    Court of Civil Appeals of Texas. Amarillo.
    May 27, 1940.
    Rehearing Denied July 1, 1940.
    Chas. H. Dean and Vincent Tudor, both of Plainview, for appellant.
    W. D. Benson, Jr., and George S. Berry, both of Lubbock, for appellees.
   FOLLEY, Justice.

This is an appeal from a judgment of the date of January 11, 1940, dissolving a temporary injunction theretofore granted on August 9, 1939, enjoining the County Board of School Trustees of Castro County, Texas, from entering any orders purporting to group the Hart Independent School District and the Wise Common School District No. 2.

The Hart Independent School District and the Wise Common School District are contiguous school districts lying wholly within Castro County, Texas. The Hart Independent School District contains 70 square miles and has a scholastic population of 125. The Wise Common School District contains 32 square miles and has a scholastic population of 14. No school has been maintained in the Wise district for the past five years, the scholastics of such district for the most part having attended the Hart school by a special arrangement between the trustees of the two districts.

On May 24, 1939, the County Board of School Trustees entered its order grouping the Hart and Wise districts as a rural high school under the provisions of articles 2922a and 2922c of Vernon’s Annotated Civil Statutes. Since the combined areas of the two districts exceeded 100 square miles such board ordered an election to be held on June 24, 1939, upon the question of grouping as required by article 2922c.

On June 23, 1939, the appellants, the Wise Common School District and two of its taxpaying citizens, filed suit against the appellees, the County Board of School Trustees of Castro County, the Hart Independent School District and its trustees, seeking relief enjoining the election, canvassing' and tabulating the returns thereof and issuing any orders in connection with the proposed grouping of the two districts. A restraining order was issued the day the petition was filed granting temporary relief as prayed for but was later on the same day modified in such manner that the election was permitted to be held the next day. The election resulted in 53 votes being cast in the Hart district in favor of the grouping and 12 votes in the Wise district against the grouping.

On August 9, 1939, a hearing was held on the application for a temporary injunction which culminated in a judgment on August 19, 1939, granting a temporary injunction, pending a final hearing, restraining the entering of any orders purporting to group the two districts but permitting the tabulation of the returns of the election. On January 11, 1940, at a hearing on the merits, the court dissolved the temporary injunction, thus denying the appellants any injunctive relief. It is from the dissolution of such temporary injunction that this appeal is prosecuted. The principal issues presented in this case have just recently been decided by this court in the case of County Board of School Trustees of Hale County, Texas et al. v. Mayfield Common School District No. 22 et al., Tex.Civ.App., 140 S.W.2d 956, which cause originated in the same judicial district as did the instant case. We therefore pretermit an extended discussion of these same issues.

No contention is made that the grouping was defeated by the fact that all the votes cast in the Wise district were against the proposition. There were only two districts involved in the election and a majority of the vote cast in the entire proposed district was in favor of the grouping. We think it is settled that where the proposed district does not contain more than seven elementary districts the will of the majority in the entire proposed district, and not the will of the majority in the individual districts, governs the election. County Board of School Trustees of Hale County, Texas, et al. v. Mayfield Common School District No. 22 et al., supra; Cox et al. v. Beard et al., Tex.Civ.App., 87 S.W.2d 882, writ refused; Florey Common School Dist. No. 5 of Andrews County et al. v. County Board of School Trustees of Andrews County et al., Tex.Civ.App., 126 S.W.2d 536, writ refused.

The appellants contend that the order of the Board of School Trustees grouping the districts was invalid because the real purpose of the board was not to establish a rural high school but merely to annex ’the Wise district to.the Hart district. They further assert that the grouping of the two districts was unwarranted, arbitrary and discriminatory and therefore void. It is our opinion these assignments are not supported by the record. Suffice it to say that there is no showing of an abuse of discretion, bad faith or fraudulent conduct upon the part of the board, which seems to be the only manner in which the action of such a body, in grouping school districts in keeping with the above statutes, may be successfully attacked. These assignments are therefore without merit. Bell et al. v. Kirkland et al., Tex.Civ.App., 41 S.W.2d 443, writ refused; Young County Board of School Trustees v. Bailey et al., Tex.Civ.App., 61 S.W.2d 130, writ refused; 37 Tex.Jur. 895, para. 37.

As in the Mayfield Common School District case, supra, the appellants herein vigorously assail the law granting authority to the county boards of school trustees to group or annex school districts, alleging the same to be unconstitutional because such law allegedly delegates legislative authority to such boards. We held in the Mayfield Common School District case that the constitutionality of this law is no longer an open question. In view of the many authorities supporting our position in this respect we are not inclined at this time to depart from our former holding on this issue. The assignment of the appellants urging the unconstitutionality of the law in question is therefore overruled. McPhail et al. v. Tax Collector of Van Zandt County et al., Tex.Civ.App., 280 S.W. 260, writ refused; Henderson et al. v. Miller et al., Tex.Civ.App., 286 S.W, 501, writ refused; Ivey et al. v. Keeling et al., Tex.Civ.App., 15 S.W.2d 1097, writ refused, 281 U.S. 699, 50 S.Ct. 352, 74 L.Ed. 1126; Lee v. Leonard Independent School Dist., Tex.Civ.App., 24 S.W.2d 449, writ refused; Butman et al. v. Jones et al., Tex.Civ.App., 37 S.W.2d 840, writ refused; Stinson et al. v. Graham et al., Tex.Civ.App., 286 S.W. 264, writ, refused; State v. Brownson et al., 94 Tex. 436, 61 S.W. 114; Webb County v. Board of School Trustees of Laredo, 95 Tex. 131, 65 S.W. 878.

The judgment is affirmed.


text:
    RANDOLPH et al., v. CITIZENS NAT. BANK OF LUBBOCK et al.
    No. 5138.
    Court of Civil Appeals of Texas. Amarillo.
    May 27, 1940.
    Rehearing Denied July 1, 1940.

      G. E. Lockhart and W. R. Porter, both of Lubbock, and Carl E. Ratliff, of Level-land, for appellants.
    E. L. Klett, of Lubbock, Weldon F. Johnson, of Levelland, and H. E. Geiger, of Tulsa, Old., for appellees.
    Thomas B. Greenwood, of Austin, J. A. Amis, Jr., of Emory, Rogers & Kilgore, of Wichita Falls, D. H. Bradley, George S. Berry, and W. D. Wilson, all of Lubbock, Allison & Gordon, of Levelland, and Wm. K. Hall and Eugene T. Adair, both of Fort Worth, amici curiae.
   STOKES, Justice.

This case was submitted in this court on March 25, 1940, and on April 1st thereafter we handed down an opinion in which we reversed and remanded the case to the lower court, with certain instructions. Ap-pellees have filed a motion for rehearing and a further consideration of the entire record and the authorities cited has convinced us that we erred in reversing the case. The original opinion is, therefore, withdrawn and the following opinion substituted therefor.

This is a suit in trespass to try title filed by appellants, Katie Randolph and her husband, W. M. Randolph, against appel-lees, the Citizens National Bank of Lubbock, Sam C, Arnett, George E. Benson, the Devonian Oil Company, and another defendant not necessary to mention. The record reveals that on the 9th of January, 1928, appellants purchased from one Bob Slaughter a tract of 163 acres of land located in Hockley County and as part of the purchase price they executed a vendor’s lien note in the sum of $982.20, due ten years after date, bearing interest at the rate of 7% per annum, the interest payable annually. On the 7th of February, 1928, appellants executed and delivered to R. L. Slaughter, Jr., a deed of trust in which they conveyed the land to him as trustee, the deed of trust being given as additional security for the vendor’s lien note. It contained a provision that upon default in the payment of any installment of the interest the holder of the note should have the right to declare the entire indebtedness due and cause the land to be sold by the trustee under the power of sale in the deed of trust. On the 28th of October, 1933, some five or six years interest being due and unpaid, Bob Slaughter, the payee, called upon R. L. Slaughter, Jr., the trustee, to execute the trust. Upon his refusal to do so, Bob Slaughter appointed A. J. Richards as substitute trustee and demanded that he advertise and sell the land and apply the proceeds to the payment of the note and interest as provided in the deed of trust. Richards posted notices and advertised the sale to take place on the 5th of December, 1933, at which time the land was sold to Bob Slaughter for a recited consideration of $1,500.42.

On the 27th of March, 1934, Bob Slaughter, for a recited consideration of $10, executed a deed conveying the land to appellee, Citizens National Bank, and on the 1st of March, 1937, the bank executed and delivered to the Devonian Oil Company an oil and gas lease thereon. Thereafter, on December 8, 1937, the Bank conveyed the land to appellees, Sam C. Arnett and George E. Benson, for a cash consideration of $3,000.

Appellants alleged that the foreclosure sale purported to have been made by A. J. Richards on the -5th of December, 1933, was void and did not divest them of the title because, first, the substitute trustee was requested to execute the trust by Bob Slaughter and that he was not at that time the holder of the note secured thereby but had delivered the same to the Citizens National Bank and the latter had not requested the substitute trustee to sell the land. Secondly, that the land was not sold by A. J. Richards, the substitute trustee, but that the sale was made by one Douglas Witherspoon, who had no authority to make the sale. They alleged, therefore, that the trustee’s deed executed by Richards in which he conveyed the land to Bob Slaughter was void and the deed from Slaughter to the Bank, the oil and gas lease from the Bank to the Devonian Oil Company, and the deed from the Bank to Arnett and Benson were ineffective and did not divest appellants of their title to the land.

Appellees answered (a) by a plea of not guilty, (b) general denial, (c) that they were innocent purchasers for value and without notice of appellants’ alleged claims, (d) the three year statute of limitation, (e) they pleaded the provisions of the deed of trust in reference to statements and declarations that may be made by the trustee concerning the sale, (f) facts which they relied upon as estoppel, and (g) the four year statute of limitation against the cancellation of the trustee’s deed.

The case was submitted to a jury upon special issues and upon their verdict and answers thereto the court rendered judgment in favor of appellees. Appellants filed a motion for a new trial which was overruled and they have perfected an appeal.

The case is presented here upon ten separate propositions of law supported by twenty-six assignments of error, but in the view we take of the case it will not be necessary to discuss all of them. The questions which must control our disposition of the case are, first, whether or not the sale made under the deed of trust had the effect of divesting appellants of their title; secondly, whether or not, under the circumstances revealed by the record, appellees are entitled to hold the land as innocent purchasers for value, and, thirdly, whether or not appellants are estopped by recitals in the deed of trust and the trustee’s deed.

The deed of trust executed by appellants was in the ordinary form of trust deeds and contained a provision that, upon default in the payment of the note in the sum of $982.20, together with the interest as it became due, the trustee, R. L. Slaughter, Jr., was authorized and empowered, at the request of the payee or any holder of the note, to sell the property to the highest bidder for cash after having given notice of such sale by posting written or printed notices at three public places in Hockley County, • and provision was made for the trustee to execute a trustee’s deed conveying the land to the purchaser. It was further provided in the deed of trust that in the event the trustee named therein should remove from the county or, for any reason, was unable to perform the trust imposed upon him therein, or if he refused to do so, the holder of the note should have the right to appoint a substitute trustee who should succeed to all of the powers and authority, and be charged with the same duties, as were granted to, or imposed upon, the named trustee. The record shows that R. L. Slaughter, Jr., the trustee named in the deed of trust, refused to discharge the trust and that Bob Slaughter duly appointed A. J. Richards as substitute trustee, who posted notices and advertised the sale of the land to take place at the courthouse door of the county on the 5th of December, 1933.

In answer to special issue No. 7 the jury found that A. J. Richards, the substitute trustee, did not make the sale. The testimony shows, in this regard, that Richards was present when the auction sale was opened but, before it had proceeded to any material extent, he left the place where the sale was being conducted at the courthouse door and did not return during the time it was. in progress. The evidence is undisputed that Douglas Witherspoon made the sale. He “cried off” the property and received the bids therefor. He also declared the bid accepted and announced that the property was sold to Bob Slaughter. The fact is established by the evidence and the finding of the jury, therefore, that the sale was not made by any person who had authority. to make it but was made by an agent appointed by the substitute trustee who did not possess authority from any one to appoint such an agent.

It is settled law in this state that the office of such a trustee involves personal confidence and his duties and powers as such cannot be delegated by him to another unless such authority is expressly granted in the deed of trust. The details concerning his conduct that are set forth in the instrument by which he is appointed must be strictly followed. The duties conferred upon a trustee under a power of sale do not permit him to absent himself while the sale is being conducted. His duty personally to execute the power granted to him in the deed of trust is not directory but strictly mandatory in character and cannot be exercised under any circumstances other than those prescribed in the instrument by which he receives his appointment. Fuller v. O’Neal, 69 Tex. 349, 6 S.W. 181, 5 Am.St.Rep. 59; Estelle v. Hart, Tex.Com.App., 55 S.W.2d 510. It must be concluded, therefore, that the sale of appellants’ land, made, as it was, by one who possessed no authority to make it, was void in so far as appellants, the purchaser at such sale, and any subsequent purchasers with notice are concerned.

The deed of trust executed by appellants and under which the sale was made contained the following provision: “And it is further specially agreed by the parties hereunto that in any deed or deeds given by any Trustee or substitute duly appointed hereunder, any and all statements of facts or other recitals therein made as to the non payment of the money secured, or as to the request to sell, the time, place, terms of sale, and property to be sold having been duly published, or as to any other act or thing having been duly done by any Trustee, or substitute, shall be taken by any and all courts of law and equity as prima facie evidence that said statements or recitals do state facts, and are without further question to be accepted.”

By substitute trustee’s deed, bearing date the 5th of December, 1933, the day the sale was made, A. J. Richards conveyed the land to Bob Slaughter, the purchaser at the sale, for a recited consideration of $1,-500.42, the amount bid by him at the sale. In the substitute trustee’s deed Richards made the following statement: “Whereas, I did, in accordance with said notices, on the first Tuesday in December, 1933, being the 5th day of the month, between the hours of 10:00 A. M. and 4:00 o’clock P. M. on said date, offer said property for sale at public auction to the highest bidder for cash at the courthouse door in Hockley County, in the town of Levelland, at which sale the property was struck off to Bob Slaughter for the sum of $1500.42.”

On the 27th of March, 1934, almost a year after he purchased the land at the foreclosure sale, Bob Slaughter conveyed it to the Citizens National Bank for a recited consideration of $10. The record shows, however, that sometime after receiving the deed the Bank cancelled a considerable amount of indebtedness owing to it by Slaughter. On the 1st of March, 1937, more than three years after the foreclosure sale the Bank executed and delivered to appellee, Devonian Oil Company, an oil and gas lease, covering the entire tract and reciting a consideration of $10 cash and certain covenants and agreements to be kept and performed by the lessee. On December 8, 1937, more than four years after the foreclosure sale, appellees, Sam C. Arnett and George E. Benson, purchased the land from the Bank, receiving from it a general warranty deed reciting a cash consideration of $3,000. The jury found that the Citizens National Bank, Sam C. Arnett, George E. Benson and the Devonian Oil Company all paid valuable considerations for the land when it was purchased by them respectively before they received any notice that appellants were claiming it and that they purchased the land under the belief that their respective immediate predecessors had good title thereto in so far as appellants were concerned. These findings have ample support in the testimony and are sufficient to support the contentions of appel-lees that they were innocent purchasers for^alue without notice of the infirmities asserted by appellants. Appellees were, therefore, entitled to the judgment rendered in their favor by the court below unless they are defeated by the contentions of appellants that their status as innocent purchasers is destroyed by the failure of the substitute trustee to observe the formalities incorporated in the deed of trust, the observance of which is required by the law, in conducting the foreclosure sale under the deed of trust. Their contention is that the sale to Bob Slaughter under the foreclosure was void because the same was not made by the substitute trustee in person but was made by Douglas Wither-spoon, a stranger and agent appointed by the substitute trustee. They contend, further, that the sale being absolutely void for this reason, none of the appellees are innocent purchasers and the court should have sustained their motion for a judgment based upon the findings of the jury to that effect. As authority for this contention appellants cite us to the case of Bowman v. Oakley, Tex.Civ.App., 212 S.W. 549, 551, and other cases of like import. In the Oakley case it was said: “While [when] it has been held that a purchaser in good faith and for value, and without actual notice, may rely upon recitals in the trustee’s deed when such recitals are authorized by the terms of the trust deed under which the trustee acts, yet it must be held, we think, that before the semblance of absolute verity can be given to such ex parte declaration it should clearly appear that the party, whose right it is sought to thereby destroy, authorized the trustee to make the statement or recital.”

In the deed of trust involved in that case it was agreed by the parties that in any deed given by the trustee, any and all statements of facts or other recitals therein as to the non-payment of the money secured, the time, place, terms of sale and property to be sold having been duly published, “or as to any other act or thing having been duly done by any trustee” shall be taken by any and all courts of law and equity as prima facie evidence that such recitals of fact did state facts and were, without question, to be accepted. The court observed that the trustee was authorized to recite the non-payment of the money secured and the performance of acts and duties of the trustee but noted the absence of authority in the deed of trust for the trustee to make any statements or representations of a request having been made by the beneficiary that he make the sale. The jury found in that case that the trustee was not requested by the beneficiary to make the sale and the effect of the holding is that, no such request having actually been made by the holder of the indebtedness, and the grantor in the deed of trust not having authorized the trustee to make the statement in his deed that such request had been made, neither the purchaser at the sale nor those holding under him could claim the rights of innocent purchasers for value. In the instant case appellants, in effect, authorized the substitute trustee to represent in his deed of conveyance to the purchaser that he, in person, had conducted the sale. This authority was contained in their agreement that in any deed given by him, any statements of facts or other recitals therein as to any act or thing having been duly done by the trustee should be taken as prima facie evidence that they were true and should be accepted without further question. In his deed the trustee represented that he, in accordance with the notices, etc., offered - the property for sale at public auction. The deed was executed by the duly appointed substitute trustee and the record reveals nothing in the chain of title held by appellees or otherwise that would constitute notice or put them upon inquiry as to the falsity of the representation. It will be seen, therefore, that the deed of trust in the instant case conferred authority upon the trustee to make representations, the absence of which in the deed of trust involved in the Oakley case constituted the basis for the holding made therein by the court. Indeed, it is intimated in the Oakley case that, if the trustee had been authorized by the grantors in the deed of trust to make the representation that the holder of the indebtedness had requested him to make the sale, they would have been bound by the representation to that effect made by the trustee in the deed executed by him although such request had not, in fact, been made.

In view of the authority expressly conferred upon the trustee by appellants when they executed the deed of trust and the recitals made by him in detailing his acts in connection with the sale and the manner in which the same was conducted, and the further fact that the record fails to disclose anything which could be held to constitute notice to appellees or put them upon inquiry as to the falsity of the representations made by the trustee in that regard, and the further fact that they paid valuable considerations for the land when they purchased the same, it must be held that appellees are protected in their respective purchases under the doctrine of innocent purchasers. The jury so found and the finding has ample support in the testimony. This conclusion is impelled, not because of the actual power in the trustee to convey the land, as he attempted to do by the trustee’s deed, but by the beneficent provisions of the doctrine of equity which shields one who purchases land under such conditions and imposes the loss upon him who has been generous in the extension to others of authority to bind him in such situations. Burnham v. Hardy Oil Co., 108 Tex. 555, 195 S.W. 1139; Schneider v. Sellers, 98 Tex. 380, 84 S.W. 417; Blair v. Hennessy, Tex.Civ.App., 138 S.W. 1076.

Moreover, the trustee’s deed was in all respects sufficient to place in Bob Slaughter the apparent legal title to the land and it has long been the law in this state that one who purchases land from another who has the apparent title, without notice of any infirmities therein, and pays a valuable consideration therefor, is protected under the equitable doctrine of innocent purchaser. Mast v. Tibbles, 60 Tex. 301.

Appellants make the further contention here that the sale under the deed of trust was void in its inception and throughout; that it conveyed no title to Slaughter, and none that could be conveyed by him to the Bank under any circumstances because, they say, the Bank was the holder of the indebtedness and the request of the trustee to make the sale was -not made by the Bank, but by Slaughter. The deed of trust provides that the trustee was authorized to make the sale when requested so to do by the holder of the indebtedness. The record shows that Bob Slaughter was the owner of the note but that he had pledged the same to the Bank as collateral security to his indebtedness to the Bank.

As a general rule the pledgee of commercial paper holds it as a trustee for the pledgor and, as such trustee, it is his duty to collect it when it becomes due and to take such steps as may be necessary to enforce collection. It does not follow, however, that the pledgor is not permitted to collect the indebtedness, enforce the security and file suit if necessary under an agreement with the pledgee which entitles him to do so. When the debt is thus collected by the pledgor the debtor is relieved of further liability thereon and if suit is filed by the pledgor under such circumstances, the pledgee is barred from any action thereon and the debtor is fully protected. The record shows that Slaughter had authority from the Bank to collect the debt and pay the proceeds upon his indebtedness to the Bank. The jury found that the Bank was the holder of the note but, in view of the undisputed testimony that it was held by the Bank merely as collateral to Slaughter’s indebtedness, the finding must be construed to mean nothing more than that. Liner v. J. B. Watkins L. M. Co., 29 Tex.Civ.App. 187, 68 S.W. 311.

In addition to what we have said concerning the status of appellees as innocent purchasers it may be said that appellants are estopped from contending that no title passed to appellees on account of the unauthorized manner in which the trustee’s sale was conducted because of the liberal authority conferred by them upon the trustee to make binding representations as to the manner in which he sold the land. Having given to him by the provisions of the deed of trust authority to delineate his actions in enforcing the trust and assured subsequent purchasers that any statement made by him in reference to his acts and conduct in enforcing the trust could be used by them as prima facie evidence that they were true and accepted without further question, and the statements and representations of the trustee in reference thereto being sufficient to cover every detail demanded by the deed of trust, appellants cannot now be heard to say that the statements of the trustee in his deed are untrue and thereby deprive innocent purchasers of the title which, through the assurance of appellants, they had the right to believe they were acquiring by the payment of valuable considerations.

A number of other questions are presented by the briefs but they could be material only in the event appellees were not protected as innocent purchasers of the land, and we do not deem it necessary to discuss them. If they hold good title as innocent purchasers such questions as rescission, the three and four year statutes of limitation and other questions raised by the brief are immaterial and not necessary to a disposition of the appeal.

What we have said indicates that, in our opinion, the judgment rendered by the trial court was the proper one. The motion of appellees for rehearing will be granted and the judgment of the court below affirmed.