author: BLAIR, Justice.

text:
    MEWHINNEY MERCANTILE CO. v. GOODNIGHT.
    No. 8909.
    Court of Civil Appeals of Texas. Austin.
    Dec. 13, 1939.
    Stanton Allen, of Bartlett, for appellant.
    Martin M. White, of Belton, for appel-lee.
   BLAIR, Justice.

This is a suit for the trial of the right of certain .personal property, between appellant, Mewhinney Mercantile Company, and appellee, Elmer Goodnight, as independent executor of the estate of Henry Goodnight, deceased. The litigation arose as follows: On May 17, 1938, appellant company obtained a judgment against Owen Goodnight, a brother of appellee, Elmer Goodnight, the executor, for $1,099.--56; and on October 7, 1938, caused an execution to be issued and levied upon the personal property in controversy, which was some farm stock. Prior to the levy of the execution, Owen Goodnight had, on October 1, 1938, executed and delivered a bill of sale to the property to Elmer Goodnight as said executor, in consideration of a credit of $300 on a note for the sum of $843, executed by Owen Goodnight and owned and held by the estate of Henry Goodnight, deceased, which note was then past due. On October 13, 1938, appellee, Elmer Goodnight, as said executor, filed with the Sheriff his oath and bond, and the Sheriff turned the property over to him. Appellant company alleged that Owen Goodnight executed the bill of sale to ap-pellee executor for the purpose of hindering, delaying, and defrauding his creditors, and particularly appellant. This appellee denied and, on the trial to the court without a jury, judgment was rendered for ap-pellee executor; hence this appeal.

Appellant presents six assignments of error which it- briefs under one proposition, as follows: “The conveyance of the property in controversy by Owen Goodnight to Elmer Goodnight, Executor, was void because it was made by Owen Goodnight for the purpose of defrauding his creditors, and it was not made for a valuable consideration.”

The conveyance to the executor in consideration of crediting Owen .Goodnight’s note due the estate with the sum of $300, constituted a valuable consideration for the conveyance. There is nothing to show that Owen Goodnight was not justly indebted to the estate for the amount due on the past due note of $843; and he had the legal right to pay such indebtedness out of any property or money which he might possess; and the selection of one creditor was not in fraud of any other creditor not holding a lien against the same property. It was the duty of Elmer Goodnight, as executor of the estate, to take charge of the assets of the estate, including the notes due the estate, and to collect them. Nor is the fact that Owen Goodnight conveyed the only non-exempt property he had in settlement of this debt any evidence of fraud of the rights of other creditors not having a lien. The rule of law controlling this question is stated in Vol. 20 Tex.Jur. 422, par. 65, as follows: “It is an elementary principle, reiterated in a multitude of cases, that in the absence of a law declaring preferences invalid every debtor, though insolvent, has the legal right to pay one or more of his just debts with any money or property he has, although the effect of the transaction may be to delay other creditors and to withdraw from their reach property which they might otherwise subject to the payment of their debts. This right is contingent, of course, upon the débtor conveying no.more property than is reasonably sufficient to satisfy .the debt, and upon the transaction being bona fide and not merely colorable.”

The same authority, on p. 431, par. 73, further states the rule as follows: “Just as a debtor has the right to prefer one or more of his creditors, every creditor may properly receive payment under a. preference lawfully made, although property is thereby withdrawn from the reach of other creditors which might otherwise be subject to the payment of their debts. For no creditor, without a lien, has the right to have the debt due to him paid out of any particular property of the debtor. And the fact that the transfer was induced through a threat of the creditor to attach the debtor’s property is immaterial.”

See, also, Dillard v. Duke, Tex.Civ.App., 107 S.W.2d 414, and Ellis v. Valentine & Son, 65 Tex. 532.

The judgment of the trial court is affirmed.

Affirmed.


source: Caselaw Access Project

author: LOONEY, Justice.

license: Public Domain

text:
    McMILLION et al. v. WILKINSON.
    No. 12796.
    Court of Civil Appeals of Texas. Dallas.
    Nov. 4, 1939.
    Rehearing Denied Dec. 16, 1939.

      Carden, Starling, Carden & Hemphill, of Dallas, for appellants.
    Touchstone, Wight, Gormley, Strasburger & Price, of Dallas, for appellee.
   LOONEY, Justice.

On June 27, 1936, Robert, the five-year-old son of H. E. and Grace McMillion, was struck by an automobile driven by Harry Wilkinson, while the boy was playing with his sisters in a narrow street in the City of Dallas, sustaining injuries from which he died the same day.

This suit was instituted on July 6, 1936, against Wilkinson, to recover damages for the death of the little boy; Grace McMil-lion, the mother of Robert, having died intestate, Mr. McMillion filed an amended petition in his own behalf and as next friend for Letha Della and Lillie Mae, minor daughters of McMillion and his deceased wife Grace, alleging that the defendant was guilty of actionable negligence in several respects, causing the death of his son, and sought recovery of $25,000 damages, based in part, on the alleged reasonable expectancy of plaintiff that, had the boy lived, he would have continued, after attaining his majority, to contribute substantial sums of money and many valuable services to his father. The jury having acquitted the defendant of negligence, the court rendered judgment in his favor, from which this appeal was prosecuted.

No complaint is here made either of the charge, the verdict of the jury, or the sufficiency of the evidence to sustain same. Plaintiffs urged, en masse, twenty-three assignments of error, and based thereon, in the nature of a general proposition, contend that, the assignments urged are grounded solely on the persistent efforts of defendant’s counsel to introduce irrelevant testimony, foreign to the issues, of a character calculated to prejudice the jurors against plaintiffs and their cause and, furthermore that, the argument of defendant’s counsel to the jury, was unwarranted and calculated to discredit the testimony of witnesses, adverse to the defendant, upon material issues of negligence; in substance, that the conduct of defendant’s counsel complained of renders it reasonably doubtful whether harm to plaintiffs resulted.

The general proposition just stated is divisible, presenting two points; that is, (1) whether the persistent efforts of defendant’s counsel to introduce a certain line of evidence was authorized by the pleadings, or, if not, and the same is considered prejudicial in nature, whether, in view of the entire record, there exists a reasonable doubt as to its harmful effect; and (2), whether the argument of counsel, complained of, was warranted, and, if not, whether it affirmatively appears that the same was without harmful effect.

Approaching the discussion, we deem it proper to make a short statement of certain undisputed facts. The record discloses that McMillion and his deceased wife, Grace, had, besides Robert, two little girls, seven and nine years of age, respectively, at the death of Robert; that plaintiff abandoned his wife and two little girls in the fall of 1936, leaving them without means and afterwards contributed nothing toward their support. Plaintiff failed to attend the funeral of his wife and, at the time of the trial, had not seen his little girls for about sixteen months, nor had he contributed anything for their support, but, in the meantime, had married again.

As before stated, plaintiff sued for $25,000 damages, part of which was sought on the idea that, had his son Robert lived, after becoming of age, he would have contributed substantial sums of money and rendered many valuable services to his father. It is obvious, we think, that this issue presented a rather latitudinous field for speculation as to the future, permitting the introduction of a variety of facts and circumstances bearing upon the character, disposition, habits, etc., of the parties involved. It is evident, we think, that, the conduct of defendant’s counsel, complained of, was an effort to introduce evidence illustrative of the nature, character, habits, disposition, etc., of plaintiff, on the theory that, while a son, after reaching majority, might be willing, if able, to contribute money and render services to a kind and affectionate father, regardful of the welfare of his wife and children, but that, it was improbable that a son would be inclined to render aid to a father who was unkind to his family, and without proper regard for their welfare and interest.’

The record discloses that the following transpired: Defendant’s counsel attempted to show and did show by plaintiff, that he had theretofore been arrested and placed in jail in Dallas County, but, on objection being made, the court excluded the answer and instructed the jury not to consider the same for any purpose. Counsel also sought to prove the reputation of the house where plaintiff carried his family to reside, and, on objection, this was also excluded and the court instructed the jury not to consider the question for any purpose. Quite a number of questions were asked plaintiff, seeking to show that he had threatened his wife and children and had beaten and wounded his wife, all of which plaintiff denied. It seems that, no objections were made to these questions. Plaintiff was also asked whether he had made an attack upon one of his little girls, as a result of which, a complaint was filed against him, charging incest. Objection was made and sustained, and the jury was-instructed not to consider the question. At this point, plaintiff’s counsel insisted that the court instruct defendant’s counsel to cease asking immaterial and prejudicial questions, which being overruled, counsel for defendant then stated that, he would ask the witness other questions of a similar nature, but was willing to ask them out of the presence of the jury. However,, this suggestion was not acted upon by either the court or counsel for plaintiffs, thereupon, plaintiff was asked if he had not made dangerous threats of bodily harm to his wife and children; this was denied, no objection being made to the question, was also asked if he attended his wife’s funeral; answered that he did not, the testimony showing that at the time, he was in John-, son County, about fifteen or twenty miles away; was also asked if he did not know that one of his little girls was then under the care of a doctor for a disease, but, on objection, the testimony was excluded; The record also discloses that, after the separation, Mrs. McMillion employed an attorney to file suit for divorce, stating to the attorney that her husband had wounded her.

The facts proven and the testimony excluded, as detailed, we think, tended to disprove plaintiff’s allegation that, his son “would have contributed substantial sums of money and many services to' said plaintiff after he became of age”. In determining this issue, the jury was called upon to speculate in regard to the probable future manifestations of affection and generosity by the son towards his father, hence any evidence tending to show the character of the father, that is, whether kind and affectionate towards his wife and children and regardful of their interest, or otherwise, was admissible. We do not think it can be said that, the persistent effort of counsel to introduce such testimony was more prejudicial in effect than the facts proven and those sought to be proved warranted.

The language of the Supreme Court of Minnesota, in Peterson v. Pete-Erickson Co., 186 Minn. 583, 244 N.W. 68, we think, is in point. The court said: “In an action by a husband for the wrongful death of his wife, evidence of his use of intoxicants, coupled with testimony indicating that the wife, because thereof, was contemplating a separation and possible divorce, is relevant to the question whether, had the wife lived, she would have continued financial contributions to plaintiff. In such a case, testimony of conversations between the deceased wife and a witness wherein the wife complained of her husband’s drinking, and indicating that she was considering divorce proceedings against him, are admissible. Such declarations are not objectionable as hearsay, but are part of the res geste.” One of our Courts of Civil Appeals evidently, entertained the. same idea, when, in Beaumont Traction Co. vi Dilworth, 94 S.W. 352, at page 356, it said, that, “it was admissible to prove that the deceased was a healthy, sober, and industrious man at the time of his death and that he worked regularly. Such testimony is always relevant in suits brought by children for injuries resulting in the death of their father as tending to show the damages sustained.” And again, the court said that, “The testimony of the witness Eliza Sad-berry to the effect that the deceased had abandoned plaintiffs some time prior to his death was admissible as evidence upon the quantum of damages sustained by plaintiffs by reason of his death, and it was error to exclude it.” We, therefore, override plaintiffs' contention that the effort of defendant’s counsel to introduce a certain line of evidence was either unwarranted or prejudicial.

The remarks of counsel excepted to, in substance, are these: At one point in the argument, defendant’s counsel stated that they (plaintiffs) are going to convict him (defendant), because he cannot tell you how many trucks were parked out there in that alley that day; also stated that, it was ridiculous and absurd to convict a man of negligent homicide for not stopping, if there was nothing to stop for; also that, plaintiffs were trying to convict the defendant for negligent homicide, because he was not over on the left hand side of the street and, in this connection, made the argument that, if defendant had been over on the left hand side of the street, plaintiffs would have had something to complain about; and, at another juncture, counsel said that, all the responsibility of this unfortunate accident rests on this poor man’s head (referring to the defendant); they (plaintiffs) are as innocent as the driven snow and he as black as midnight. Plaintiffs’ counsel having excepted to the remark as characterizing defendant as a poor man, counsel for • defendant said: “I didn’t say that he was a poor man and I am not talking about him in that sense at all. I am talking about this man, my client that they are trying to put all the blame on and blacken his name and his character and blame him in the county where he lives and make him entirely responsible for this accident and give them a clean bill of health and send him back to his wife mulct us for damages in the meantime.” Plaintiffs’ counsel having objected to the remarks of defendant’s counsel about blackening defendant’s name, and being overruled, counsel for defendant proceeded: “I say if you don’t blacken a man when he is claiming that he is innocent of blame for this child’s death, and they say on the contrary, you are just as guilty as you can be, and it was your negligence that did it, I don’t know of any way to blacken a man’s name. If that don’t blacken him, when you come up here to close this argument, I challenge you to say that it don’t.”

The above is the substance of the argument excepted to, upon which the assignments of error were predicated. We do not think the remarks were unwarranted. If it can be correctly said that the inferences and deductions were extravagant or far fetched, nevertheless, finding support in the evidence, were within the rule announced in the following cases, holding that similar arguments did not constitute reversible error: Texas & P. Ry. Co. v. Moody, Tex.Civ.App., 169 S.W. 1057; Saenger v. Dallas Ry. & Terminal Co., Tex.Civ.App., 67 S.W.2d 351; Columbus Mut. Life Ins. Co. v. Oldham, Tex.Civ.App., 115 S.W.2d 694.

The verdict, in our opinion, bears every evidence of a meticulous discrimination by the jury, in answering the questions propounded. Several issues were answered in favor of the contention of plaintiffs, although inconclusive in legal effect, yet were consistent, and, in our opinion, indicative of such deliberation, as to forbid the existence of either passion or prejudice. We, therefore, hold that the alleged persistent effort of counsel to introduce a certain line of evidence, was authorized by the pleadings, and that the argument complained of, was warranted by evidence. But, if in error in either conclusion, we are of opinion that, in view of the entire record, it cannot be correctly said that a reasonable doubt exists as to the harmlessness of the matters complained of.

Furthermore, we are of opinion that, a complete answer to the contentions of plaintiffs is found in the answers of the jury that convicted Mrs. Grace Mc-Million, mother of the little boy, of contributory negligence in permitting him to play, unattended, at or near the scene of the accident.

Reference to the assignments of error heretofore discussed fail to reveal that, the matters therein complained of had any connection with or relation to the negligence, whether or not, of Mrs. McMillion, in the respect mentioned; in fact, the alleged prejudicial attack made by defendant’s counsel upon plaintiff, was predicated largely upon his supposed mistreatment and neglect of his wife and little girls; and in effect, was in the nature of a defense of the deceased wife.

We think this finding of contributory negligence alone justified the court below in rendering the judgment appealed from. In the recent case of Gross v. Dallas Ry. & Terminal Co., Tex.Civ.App., 131 S.W.2d 113, 117, we had occasion to pass upon a similar situation, and, in that connection, said: “Errors in admitting or rejecting evidence, become immaterial where the case does not turn on the admitted or excluded evidence or where a decision is based on two or more findings and it is determined that one supports the judgment, there is no necessity to consider other findings or questions pertaining to the admission or exclusion of evidence having no relation to and cannot affect the particular finding that supports the judgment. See 3 Tex.Jur., page 1013, also page 1015 and authorities cited.” Application for writ dismissed. Also see Poteet v. W. T. Waggoner Estate, Tex.Civ.App., 96 S.W.2d 405, 408. For reasons stated, the judgment of the court below is affirmed.

Affirmed.


author: LESLIE, Chief Justice.

text:
    WISE v. CECIL.
    No. 1929.
    Court of Civil Appeals of Texas. Eastland.
    July 7, 1939.
    On Rehearing Dec. 1, 1939.
    Rehearing Denied Jan. 5, 1940.

      ■ Cox & Hayden, of Abilene, for appellant.
    Davidson & McMahon, of Abilene, for appellee.
   LESLIE, Chief Justice.

The opinion of this court on a former appeal is to be found in 109 S.W.2d 214, writ refused. The facts of the case are rather fully stated there. The difference, if any, in the material facts on this and the former appeal will be noted as the opinion proceeds.

Essentially this is a suit by C. W. Cecil to establish his right to-title and ownership of the North 1/2 of Sec. 634, Certificate No. 487, Block B, John H. Gibson Original Grantee, Yoakum County, Texas. He alleges that Oscar Wise, the defendant, in purchasing said land from the trustee in bankruptcy and taking title thereto in his own name, paid for it with a consideration (a collateral note) owned or furnished by himself. That is, plaintiff seeks “to have impressed upon the land a trust with the effect that the lands stand in lieu of the note,,subject to a like lien to secure the indebtedness as the collateral note.” Plaintiff also alleged tender of indebtedness due and sought to exercise his right of redemption.

The defendant answered by general demurrer, general denial and specially alleged that in so purchasing the land he had an understanding with the appellee that the indebtedness owing by the latter to him would be canceled, etc. That he in fact acquired an indefeasible title, etc.

The trial was before the court without a jury, and at its conclusion judgment was rendered for the plaintiff Cecil vesting title to the land in him upon his compliance with certain conditions specified in the judgment. On request, the learned trial court made findings of fact and conclusions of law. These, in substance, clearly reflect the facts of the case and applicable rules of law, and will be here set out and adopted:

“1. I find as a fact that there was no agreement between C. W. Cecil and Oscar Wise whereby Wise agreed to purchase the land for C. W. Cecil or to purchase the land as the agent of Cecil, but bought the same in order ‘to protect himself’.
“2. I further find as a fact that, after receiving notice from the Bankrupt Court of the proposed sale and terms thereof, defendant, Wise, went to John Porter, trustee in bankruptcy, and the said Porter prepared a proof of claim for said defendant and filed same in the estate of Mrs. Neal Mills, Bankrupt, and attached to the claim a copy of the vendor’s lien note held as collateral, defendant, Wise, retaining the original; that after advertising said land for sale, of which plaintiff, Cecil, had notice from the Bankrupt Court, and after Wise had talked to Cecil about purchasing the land at said sale, the said Wise attended said sale and bid the sum of One Thousand Dollars for said land, which was paid by crediting the collateral vendor’s lien note held by Wise to collaterally secure Cecil’s indebtedness to Wise; that thereafter Wise received a trustee’s deed to said land, John Porter, trustee of the bankrupt estate being grantor therein and Oscar Wise being grantee therein.
“3. I find as a fact that while such use of the vendor’s lien note held by Wise as collateral was with Cecil’s consent, nevertheless, - there was no agreement between Cecil and Wise whereby Wise agreed to cancel the debt and obligation of Cecil to Wise.
“4. I find as a fact that on April 4, 1934, there was written by Cecil, addressed to Wise, and received by Wise the following letter :
“ ‘April 4, 1934
“ ‘Mr. Oscar Wise,
“ ‘Moran, Texas '“Dear Mr. Wise:
“ 'As I will be out of town for a few days, I am writing to see if we cannot settle our deal like Mr. Chaney has suggested. He would like for us to finish our deal so he will know how to finish trading with me.
“ ‘I am enclosing a statement of your merchandise account to deduct from the balance I owe you. I suggest that you give me a deed to the land and you retain first vendor’s lien notes for the balance I owe you.
“ ‘I would like to split the balance into two notes — one due in one year and the other in two years with the right to pay them sooner if financially possible.
. “ ‘By settling the matter this way, I can handle my part of the financing and it will give you some good first lien notes that you ■can use for collateral. I will also help you dispose of these notes so that you can get your money. Also by settling this matter, I will know how to settle with Mr. ■Chaney.
“ ‘If these arrangements are suitable to you, please prepare the papers and I will sign them as soon as I return.
“ ‘Yours very truly,
" ‘Copy to J. M. Chaney
" T enc.’
“5. I find as a fact that Wise made no reply to said letter and did not, after the receipt of said letter, advise Cecil that he claimed the indefeasible fee simple title to the lands in controversy..
“6. I further find as a fact that at the •time of the sale by the trustee in bankruptcy Cecil’s indebtedness to Wise was approximately $1,000.00, and that Wise •credited the notes evidencing the indebtedness from Cecil to Wise with the sum •of $1,000.00, but did not return to Cecil either the five notes representing the original indebtedness of Cecil to Wise nor the collateral vendor’s lien note held by Wise to secure Cecil’s indebtedness.
“7. I find as a- fact that Oscar Wise paid the trustee in bankruptcy $30.00 in cash, as fees required in connection with the sale of said land, and since said sale has paid taxes on said-land and interest on the state indebtedness, and has been in possession of said land, and has leased same for oil and gas, and has incurred expenses in looking after said land and making said leases, and that in accordance with the stipulation of the attorneys for the respective parties made in open court, taking all of said factors into consideration, the present indebtedness of Cecil to Wise is $1200.-00.
“8. I find as a fact that Cecil has not deposited any money into court to pay said sum of $1200.0Q, but has offered to pay same upon the execution by Wise of a conveyance to Cecil of the lands in controversy, and that Wise has refused to make such conveyance.
“9. I find as a fact that notwithstanding the vendor’s lien note was placed with Wise by Cecil solely as collateral to secure Cecil’s indebtedness to Wise evidenced by five notes, the said Wise had not instituted any proceeding to foreclose the collateral lien on said vendor’s lien note, and that, as between Cecil and Wise, Cecil remained the owner thereof subject to Wise’s collateral lien thereon and same was subject thereto at the time Wise received the deed from John Porter, trustee.
“Conclusion of Law
“(a) I conclude as a matter of law that Cecil’s obligation to Wise was hot canceled and satisfied by force of any agreement between the parties, and that Wise’s act in crediting the notes evidencing the indebtedness from Cecil to Wise was unauthorized.
“(b) I conclude as a matter of law that, between Wise and Cecil, Cecil remained the owner of the vendor’s lien note held by Wise as collateral to secure Cecil’s indebtedness, and that by virtue of the facts hereinabove found the use of such note by Wise as the consideration for the acquisition of the lands in controversy resulted in a substitution of security as a matter of law and impressed said lands in Wise’s hands with a trust in favor of Cecil, the lands being subject to a lien similar to that which Wise held against the collateral vendor’s lien note.
“(c) I conclude as a matter of law that Cecil is entitled to a judgment _ in this cause, decreeing the title to said lands vested in the said Oscar Wise in trust for the said C. W. Cecil, subject to a lien to secure the indebtedness of Cecil to Wise amounting to- $1200 as agreed in open court.
“M. S. Long
“Judge Presiding.”

By various assignments of error and propositions thereunder, the appellant challenges the correctness of the different findings of fact and conclusions of law, as well as the judgment. In substance, - he insists, among other things, that under the facts the court erred, first, in holding that as between Wise and Cecil, the latter remained the owner of the vendor’s lien note held by Wise as collateral to secure Cecil’s indebtedness (evidenced by five personal notes) to Wise, and, second, in holding that the use of the “collateral note” by Wise as consideration for the land purchased and title taken in his name resulted in the substitution as a matter of law of the land itself 'for the “collateral note” used as the consideration in purchasing the same, thereby impressing the land in Wise’s hands with a trust in favor of Cecil, the land being thus subject to a lien similar to. that held by Wise against the vendor’s lien note. That the judgment entered pursuant to such findings and undisputed facts is erroneous and unwarranted by the record.

Each of these assignments is supported by. reference to alleged undisputed facts and findings by the trial court. The appellant seeks to have the judgment reversed and rendered in his favor and in the alternative, a remand.

• A careful consideration of this record convinces us that the material undisputed facts, plus those found by the trial court on sufficient testimony, do not sustain the appellant’s contentions but are of the opposite effect, sustaining the judgment of the trial court. The appellee seeks to sustain this judgment by a proposition to the effect that “Since he (Cecil) was the undoubted owner of the vendor’s lien note used by Wise in the purchase of the land, subject to the lien thereon in favor of Wise on account of the then existing indebtedness between Wise and Cecil, the use of such note in the purchase of the land gave rise to a trust in Cecil’s favor; the transaction stated constituting merely a substitution of the land for the note.”

The record discloses but little, if any, controversy about the controlling facts in this case. There is no dispute in the record that Cecil bought from Wise a stock of merchandise situated in Moran, by reason of which Cecil became indebted to Wise (and balance thereof at trial was about $1,200). Later, when Cecil desired to remove the remainder of the stock to Abilene, he gave Wise additional security by placing with Wise as collateral for (five) notes previously executed to him the vendor's lien note dated April 2, 1928, formerly executed by W. A. Stagner payable to the order of J. M. Chaney in the amount of $1600 and which had been assigned to Cecil by Chaney, and which was indorsed by Cecil as collateral in this language: “C. W. Cecil with recourse as collateral for series of five notes.” This $1,600 note is referred to herein as the “collateral note.”

The land securing the vendor’s lien note subsequently became the property of Miss Neil Mills who was later adjudged a bankrupt. John Porter, the trustee in bankruptcy, advertised the land fo.r sale, free of . liens and encumbrances. It was so sold. Wise, the holder of the vendor’s lien note in the meantime filed his claim in the bankruptcy court predicating the • same on the vendor’s lien note held by him as collateral. When Porter, the trustee, sold the land in due course of a bankruptcy proceeding, Wise purchased the land, using the vendor’s lien note so held by him as security (or $1,000 thereof) as the medium by which such consideration was paid. It is not claimed by anyone that at the time of such purchase by Wise he had theretofore foreclosed his collateral lien upon the vendor’s lien note, and there is no evidence of any divestiture of the complete legal title to the vendor’s lien note which reposed at all times in the plaintiff Cecil.

Cecil admitted upon the trial that he agreed that Wise could use this collateral vendor’s lien note in the purchase of the land from the trustee in bankruptcy or from the bankruptcy court. Therefore, we are determining rights originating in a resulting trust as contradistinguished from those arising out of a constructive trust.

Further, the trial court found that, “While such use of the vendor’s lien note held by Wise as collateral was with Cecil’s consent, nevertheless, there was no agreement between Cecil and Wise whereby Wise agreed to cancel the debt and obligation of Cecil to Wise.” It is upon this simple state of facts that the appellee predicates his contention that the use of the “collateral note” in the purchase of the land gave rise to a trust in his favor. That the transaction constituted merely á substitution of the land as collateral security in the place of the note which to that date was the recognized collateral security.

The undisputed facts favorable to Cecil, plus the disputed ones resolved by the court in his favor, warrant the judgment in his behalf upon well recognized principles of law and equity. Such rule is stated in Pomeroy on Equity Jurisprudence, 4th Ed., Vol. 3, p. 2347, sec. 1037, as follows: “In pursuance of the ancient equitable principle that the beneficial estate follows consideration and attaches to the party from whom the consideration comes, the doctrine is settled in England and in a great majority of the American states, that where property is purchased and the conveyance of the legal title is taken in the name of one person, A, while the purchase price is paid by another person, B, a trust at once results in favor of the party who pays the price, and the holder of the legal title becomes a trustee for him. In order that this effect may be produced, however, it is absolutely indispensable that the payment should be actually made by the beneficiary, B, or that an absolute obligation to pay should be incurred by him, as a part of the original transaction of purchase, at ■or before the. time of the conveyance; no ■subsequent and entirely independent conduct, intervention, or payment on his part would raise any resulting trust.”

For further statement and discussion of the rule see sec. 1038, same author, 65 C.J. p. 386, sec. 155; Vol. 1 Perry on Trusts, 6th Ed., sec. 26.

In principle, the opinion in Jackson v. Reed, Tex.Civ.App., 249 S.W. 529, 530, is in point here. The facts are strongly analogous and sufficiently appear in the' following excerpt of the holding: “The ■court was in error in instructing a verdict for the defendant, upon the facts as hereinbefore stated. The Erwin notes were pledged to Reed as collateral to further secure the payment of Jackson’s ■notes. Reed was authorized to bring suit .against Erwin on these collateral notes, to ■obtain judgment thereon for the amount of ■such notes, principal and interest, and the foreclosure of the vendor’s lien. He was also authorized to purchase the lots at sheriff’s sale, sold under an order of sale by virtue of such judgment; but, in purr chasing the lots, he took title thereto in trust for the benefit of Jackson, the pledg- or.. The effect of Reed’s judgment against Erzvin was to foreclose Erwin’s equity of redemption. The lots, when purchased by Reed, voere substiHited for the Erwin notes, and such judgment in no wise changed the relation of trustee and cestui que trust between Jackson and Reed as to the Erwin property. Reed not only had the right to purchase at the sheriff’s sale, but it was his duty to do so to prevent the property from being sacrificed. His bid for the property at such sale would not be charged against him on the indebtedness of the pledgor, but only so much as he might realize from the sale of the property fairly made would be thus charged.” (Italics ours)

This court would not be warranted in setting at naught the trial court’s conclusion rejecting Wise’s contention that he had an arrangement with Cecil which contemplated the cancellation of Cecil’s indebtedness to him at the time he appropriated the note as consideration for the purchase price of the lands conveyed him by the trustee in bankruptcy. The same is' true of the trial court’s conclusion that Cecil was not estopped to assert the rights contended for in this suit.

And in any event, it was the duty of the pledgee Wise to protect the pledgor to the extent that the security should not be sacrificed.

We have given careful consideration to the various assignments of error but our interpretation of the fact elements in the case render inapplicable the authorities cited and relied upon by appellant in his well prepared brief. A more detailed discussion of the testimony would serve no useful purpose and that is true with reference to appellant’s authorities.

Believing that the questions discussed are controlling and that the judgment should be affirmed, it is so ordered.

On Rehearing.

The appellant has made a very able motion for rehearing in this cause. The same has been given most careful attention by this court. A re-examination of the numerous points raised still leaves this court-with the conviction that the appeal in the main was properly disposed of by our original opinion. ■ The controlling propositions are given some additional discussion.

The respects wherein the' record upon this appeal differ from those on the former appeal, 'as pointed out by the appellant, are. not believed to be of any controlling importance.

If the contentions'of Wise be correct, then prior to the purchase of the land by him from the trustee in bankruptcy his former relations with Cecil had been changed. Cecil’s five notes to Wise had been discharged in consideration of the latter becoming sole and unconditional owner of the note which had theretofore been held only as collateral security for the five notes.

The trial court found against this contention. The court found that “there was no agreement between Cecil and Wise whereby Wise agreed to cancel the debt and obligation of Cecil to Wise.”

.The court further found that Wise bought the- land “to protect himself” and that with Cecil’s consent Wise used the collateral- note as he did. The amount. of the nóte (unpaid balance) was in round numbers $1,200'. The debt of Cecil owing to Wise for which the $1,200 vendor’s lien nóte was security was in round numbers $1,000. Absent any agreement Wise owned no-part of'the $1,200 note. True' he had the right to collect it but he had no right to, discharge the note for less than the full amount due. He had no right to discharge the lien ‘which secured the note- upon receipt of less than the full amount of the note. He proved the note (undoubtedly an act of' ownership) as a claim against the bankruptcy estate. He' thereby purported to clothe the bankruptcy-.court with jurisdiction to credit the sale price of-the property as part payment on the note. Whether or-not the $1,200 note was a debt of the bankrupt, the record, so far as .we have ascertained, does not show.. That,. however, is of no controlling'importance;.. If.it was a-debt of the bankrupt estate, then the act of 'yVise in-filing a claim upon-it constituted an invocation of the jurisdiction of the court, to discharge the debt by payment of less than the amount due. It would be immaterial that the ■ original note, and instead only a copy, was attached- to -the claim as filed.' In either event, the note was discharged without the payment' of the amount promised. If the amount of the -note was not a'debt against the bankrupt’s estate, a matter dependent'upon whether or not the bankrupt had assumed its payment, nevertheless the act of Wise in filing a claim upon it was an invitation to the court to discharge the lien for whatever amount Wise, or anyone else, should bid for the land. In any case Wise so dealt with the $1,200 note and the lien securing same, that unless excused by the consent of Cecil constituted a conversion of Cecil’s property.

The findings do not, in our opinion, show that Cecil was a party to the bankruptcy proceeding. Notice of “advertising said land for sale” which the court found that Cecil had, is not the same thing, we think, as notice that Cecil had submitted himself, or had legally been subjected, to the jurisdiction of the bankruptcy court to •adjudge that the land be sold free and clear of all liens and encumbrances. The court makes no findings of the legal equivalent of facts to show that Cecil was duly cited to show cause why the court should not adjudge that the land be sold free and clear of liens, etc.

However, the only materiality of the question whether Cecil was a party to the bankruptcy proceeding would be as an evi-dentiary fact. If full effect be given to the finding that Wise used the collateral ■ note as he did with the consent of Cecil, that is by no means conclusive that the land was taken by Wise free of any trust in favor of Cecil. Cecil was unable to protect his interest by purchasing the land. In any material sense he did fake the land in lieu of the lien, if not in discharge of the debt secured by the lien. The purchase of the land cost Wise nothing except the $30 exacted of him by way of advance of cost. In the absence, of any showing that Wise became the owner of the vendor’s lien note, the acceptance by him of a conveyance of the land in discharge of the noté and/or lien was tantamount to purchasing the land with Cecil’s property, which affords a familiar example of a-trust.

By certain assignments, and especially the- tenth and eleventh, the appellant challenges certain phases of the trial court’s-judgment. Based upon the conclusions of fact and general conclusions of law, the trial court decreed in part as follows :

“It is, therefore, ordered, adjudged and decreed by the court that the title and ownership of the north one half of section No. 634, Cert. No. 487, Block D, John H. Gibson original Grantee, Yoakum County, Texas * * be and it hereby is adjudged to be vested in the plaintiff C. W. Cecil, subject only to the lien hereinafter set forth.
“It is further ordered, adjudged and decreed by the court that the legal title to said land as hereinbefore vested in the defendant Oscar Wise (presumably by the sale effected through the trustee in bankruptcy) at the time of filing of this suit was in trust for the use and benefit of plaintiff C. W. Cecil, and that there is adjudged herein in favor of defendant Oscar Wise, a lien upon said land and all interest of C. W. Cecil therein, to secure the payment to said Oscar Wise of the sum of $1200 with interest thereon from this date at the rate of 8 per cent per annum.
"It is further ordered, adjudged and decreed by the court that the legal title to said land shall remain in the said Oscar Wise pending payment, satisfaction and discharge of the lien indebtedness herein adjudged in favor of the said Oscar Wise and that upon such payment and satisfaction of said lien indebtedness the legal title to said land shall become vested in the plaintiff C. W. Cecil.” (Italics ours)
The italicized portion of the judgment is excepted to as indefinite, uncertain and without support in the pleadings and that by reason threof “said cause should be reversed and rendered, or at least reversed and remanded, or said judgment should be corrected.”

In response to these assignments we have concluded that the judgment should be reformed or corrected as prayed for. In sustaining this contention it is ordered that the above quoted portion of the judgment be made to read as follows: It is, therefore, ordered, adjudged and decreed by the court that the title and ownership of the North one half of Section 634, Cert. No. 487, Block D, John H. Gibson original grantee, Yoakum County, Texas, containing 320 acres, more or less be and it hereby is adjudged to be vested in the plaintiff C. W. Cecil, subject only to the lien hereinabove set forth; that there is adjudged herein in favor of the defendant Oscar Wise a lien upon said land and all interest of C. W. Cecil therein to secure the payment to said Oscar Wise of the sum of $1200 with interest thereon from June, 4, 1938, until paid, at the rate of 8 per cent per annum, together with a foreclosure of said lien upon said land and interest in favor of said Oscar Wise;- and it is ordered and adjudged that said Wise have his order of sale to enforce this judgment, and that such order of sale shall have all the force and effect of a writ of possession as between the parties to this foreclosure and any person claiming under the defendant to such suit by any right acquired pending the same, as provided by law.

To the extent that appellant’s assignments have been sustained by virtue of the above reformation or correction of the judgment, the appellant’s motion for rehearing is granted. In all other respects the original judgment of this court affirming the judgment of the trial court is re-affirmed as per our original opinion of date July 7, 1939, as supplemented by what has been written herein in response to the appellant’s motion for rehearing.

Under the present disposition of the case the appellee is adjudged to pay the costs of this appeal.


author: STOKES, Justice.

text:
    GREAT SOUTHERN LIFE INS. CO. v. WILLIAMS et al.
    No. 5085.
    Court of Civil Appeals of Texas. Amarillo.
    Nov. 27, 1939.
    Rehearing Denied Jan. 2, 1940.

      Frank Tatum, of Dalhart, Fred R. Swit-zer and Vinson, Elkins, Weems & Francis, all of Houston, and Small & Arney, of Amarillo, for appellant.
    Otis Trulove and W. C. Vinyard, both of Amarillo, and E. E. Coons, of Texhoma, Okl., for appellees.
   STOKES, Justice.

This , suit was filed by appellees, Joseph L. Williams and his wife, and J. J. Dim-mitt, Jr., against appellant, Great Southern Life Insurance Company, and others not necessary to mention, in which appellees sought to set off certain sums of money paid by them as principal, interest and commissions against a note or bond in the sum of $40,000, executed by them on July 2, 1928, which they alleged was usurious. The note was secured by a deed of trust on 6,751.8 acres of land, three-fourths of which is owned by Williams and one-fourth by Dimmitt.

The record is unusually voluminous but the following statement, we think, will reveal the facts and situation exhibited by it in a manner sufficient to make clear the conclusions we have reached with reference to the issues presented.

On January 20, 1925, appellees Williams and wife owned all of the land involved in the suit. They were indebted to various parties who held liens on the land and desired to procure a loan to take up a portion of the outstanding indebtedness. Williams informed' one B. O. Taylor of his desire for a loan and Taylor recommended that he take the matter up with H. B. Dewey. The latter was, and for many years had been, engaged in the business of real estate loan broker and maintained an office at Amarillo where he lived. Appellee Williams explained to Dewey his situation and desire for a new loan and was informed by Dewey that it would be necessary for appellee to fill out an application and that he believed he could procure a loan in the sum of $40,000 from the Great Southern Life Insurance Company. Dewey maintained in his office blank applications for loans which he had procured from Appellant and a number of other life insurance companies. He testified that he selected appellant in preference to other loaning agencies from whom he had on occasions also procured loans for his clients because appellant seemed more inclined to favor loans on ranches and large tracts of land. Dewey explained to Williams in this conversation that his brokerage fee or commission for assisting Williams in procuring the loan would be 10% of the amount of the loan. The negotiations finally resulted in an agreement that Williams would pay the brokerage commission and make an application to appellant for a loan on his ranch in the sum of $40,000, to bear interest at the rate of 7% per annum. The application was executed and forwarded to appellant by Dewey and resulted in an agreement that appellant would loan to appellees Williams and wife $35,000 instead of the $40,000 for which they had applied. B. O. Taylor usually made inspections and appraisements of lands upon which appellant and others contemplated making loans, and Dewey was instructed by appellant to have the land appraised by Taylor, which was done in company with Dewey and Williams. Taylor made his report upon the appraisement and Dewey then procured from appellees their abstracts of title, had them extended to date, and forwarded them to appellant for examination. After the titles were approved the loan papers were forwarded to Dewey for 'execution by appellees Williams and wife and they were executed on January 20, 1925. The obligations consisted of two notes for $2,500 each, due January 20, 1928, and January 20, 1929, and one note in the sum of $30,000, due January 20, 1935, and provided for interest at the rate of 7% per annum, represented by attached coupons. After the papers were executed Dewey had them placed of record and extended into a supplemental abstract and forwarded them to appellant’s office at Houston. Appellant then disbursed the loan to the various creditors of appellees who held liens upon the land.

When the loan was closed Dewey agreed to accept notes of appellees for his commission of $3,500,'secured by a second lien on the land, and four notes in the sum of $875 each, secured by a second lien in the form of deed of trust, were executed and delivered to him by appellees Williams and wife. After receiving these notes and second deed of trust lien, Dewey discovered that the Sinclair Company who held a second lien on the land would not subordinate its lien to that of Dewey’s and that he would be forced to take a third lien on the land to secure his notes. He complained about this to appellee Williams and as a result the notes were cancelled and the $3,500 indebtedness rearranged by the execution of two notes in the sum of $250 each and four notes in the sum of $750 each, two of them falling due on February 20th of each of the years 1925, 1926 and 1927. A new deed of trust was given on the land to secure these notes.

After the $35,000 loan was closed WiL liams and wife conveyed to appellee, J. J. Dimmitt, Jr., an undivided one-fourth interest in all of the land. By July 2, 1928, appellees had again fallen into financial difficulties and were unable to pay the interest on the loan and other items of indebtedness owing by them to appellant and other parties and they applied again to Dewey to assist them in mereasing the loan of appellant to $40,000. They had paid $5,000 on the principal of the loan, thus reducing it to $30,000. The negotiations with Dewey, which were conducted by Williams, resulted in an agreement that ap-pellees would pay Dewey $660 as a commission if he would procure an additional loan of $10,000 from appellant, thus increasing its loan from $30,000, the balance then due thereon, to $40,000. Dewey took the matter up with appellant and the application was declined. Upon being so informed, Williams procured Dewey to make a trip to Dallas and, if possible, induce appellant to increase the loan as applied for. Dewey made the trip, appellees paying his expenses, and his efforts resulted in appellant’s agreement to increase the loan as desired by appellees. Dewey attended to the matter of extending the abstracts, having the new deed of trust executed and recorded and, after deducting the past due interest and other items owing to appellant by appellees, appellant sent to Dewey its check for $6,854.23, payable to appellees, and it was delivered to appel-lees by him.

Appellees alleged and contended in the trial court that both of the loans were usurious because 7% interest was charged in the notes and deeds of trust and, in addition thereto, they paid to Dewey who, they alleged, was the agent of appellant, the $3,500 commission on the first loan and $660 commission on the second loan, which payments, they contend, amounted to an additional charge for the use of the money which they borrowed from appellant and increased such charges to an amount greater than 10% per annum, thus tainting both loans with usury.

A jury was empaneled to try the case and at the close of the testimony appellant presented a motion for a peremptory instruction which was denied by the court and the case submitted to the jury upon special issues. After the verdict was returned both parties presented motions for judgment in their favor, the motion of appellant being overruled, and judgment fo.r appellees was entered by the-court upon the verdict of the jury, in which it was decreed that the loans were usurious and all amounts paid thereon, . including the commissions paid to Dewey, were credited to the principal of the loan, thus reducing the indebtedness to the sum of $8,556.35, for which it was decreed appellant holds a valid lien.

Inasmuch as only two days of the term of court remained after the judgment was rendered, no motion for a new trial was filed by appellant, but it excepted to the judgment and gave notice of appeal which has been duly perfected.

The case is presented in this court upon á large number of propositions supported by twenty-six assignments of error, but in the view we take of the case it is not necessary to discuss more than one of the general contentions made by appellant. The controlling. question in the case involves the action of the trial court upon appellant’s motion for a peremptory instruction.

Appellant contends that the action of the court in overruling its motion for a peremptory instruction was reversible error because of which the judgment should be reversed and judgment here rendered in its favor. The motion was based upon the ground that there was no • evidence in the case to the effect that H. B. Dewey was the agent of appellant or, if it could be said from the testimony that he was any sort of an agent, he possessed no more than special or limited authority and that appellant was not bound by his acts. It is contended, therefore, that the collection by him from appellees of the $3,500 as commission on the first loan and $660 as commission on the additional $10,000 procured under the second loan could not, under the law, be considered as compensation for the use or forbearance or detention of the money loaned to appellees.

Th'ere is no question that, if the notes which appellees gave to H. B. Dewey as commission are considered as charges made by appellant for the use of its money and are added to the 7% interest provided by the notes in the first loan, especially the two $750 notes that fell due the second year, it would extend the amount paid by appellees as compensation for the use of the money far in excess of 10%, the amount allowed by law to be charged as conventional interest and, therefore usurious. It is held by the courts of this state and practically all the other states of the Union that, as a general rule, when an agent of the lender charges and is paid by the debtor a commission or bonus in connection with a contract for a loan from his principal to a borrower and his action in doing so is ratified by the lender, the transaction is usurious if the amount so paid, plus the amount charged and designated as interest, exceeds the amount allowed by law to be charged for the use or detention of the money. Dodson v. Peck, Tex.Civ.App., 75 S.W.2d 461; Fowler v. Equitable Trust Co., 141 U.S. 411, 12 S.Ct. 8, 35 L.Ed. 794.

The rule is also well established that when a lender makes usurious exac-tions of his debtor, even though they are made through a third person, they are considered the acts of the lender and it is immaterial whether such third person is his agent or not. The rule is based upon the acts of the lender and the effect of such exactions upon the borrower. Our statute is plain and explicit in its provisions that parties to any contract may agree to and stipulate for only such rate of interest as does not exceed 10% per annum on the amount of the contract. It is provided that all written contracts whatsoever which may in any way, directly or indirectly, provide for a greater rate of interest shall be void and of no effect for the amount or value of the interest. Art. 5071, R.C.S.1925. In order to enforce the spirit and purpose of the statute, the courts have established and consistently enunciated the rule that all exactions,- by whatever term they may be designated, made by lenders of those who borrow money from them which have the effect of extending beyond 10% per annum the amount the borrower is required to pay for the .use of the money borrowed, are considered as interest. Its purpose is to maintain the spirit of the statute and prevent ingenious arrangements under which borrowers in necessitous circumstances may be filched of exorbitant sums under the guise of incidental expenses and ■other pseudonyms.

In order to apply the rule, however, it must be shown that the exactions were made by the lender. Where it is sought to charge the lender with usury in transactions under which commissions are paid to third persons by borrowers it must be shown that the charge was made or exacted by the lender or 'that the third person was his agent. Amounts so paid by borrowers to third persons who are agents of the lender are considered payments to the lender becausé they are in effect payments of compensation, salary or expenses of the machinery through which the lender loans his money.

The rule is otherwise, however, where the agent merely acts as a broker for the borrower in procuring the loan for him. It has never been a violation of our usury laws for a broker or any third party to charge a fee or commission to procure a loan for a client who may desire one. The business or occupation of loan broker is one of long standing ánd the broker’s right to charge reasonable commissions for his services to those in need of loans from third parties has long been recognized by the law. Stuart v. Tenison Bros. Saddlery Co., 21 Tex.Civ.App. 530, 53 S.W. 83; Leonard v. Smith, Tex.Civ.App., 99 S.W.2d 328; Trinity Fire Ins. Co. v. Kerrville Hotel Co., 129 Tex. 310, 103 S.W.2d 121, 110 A.L.R. 442.

Agency is a legal relationship which is based upon a contract, express or implied, of the parties or created by the law, by virtue of which one party is employed and authorized to act for another. The party so employed is the agent and the one who so employs him is the principal. Harkins v. Murphy & Bolanz, 51 Tex.Civ.App. 568, 112 S.W. 136. There is no contention in this case that H. B. Dewey was, by express contract either written or verbal, appointed by appellant as its agent. If an agency existed therefore it must be implied from the transactions and dealings that took place between them.

Dewey testified that he was representing Joseph L. Williams and working for Williams to obtain the $35,000 loan and that he was also working for Williams to obtain the renewal loan by which the indebtedness was increased to $40,000. His testimony was unequivocal and positive to that effect. He also testified that he charged appellees $3,500 for his services in assisting appellees in procuring the loans.

Appellee Williams testified that Dewey never made any statement to him as to whom he represented in getting the loan and that, in procuring the loan, he expected Dewey to “get out and do everything in his power to get the deal through.” He said furthermore that he went to Dewey as a loan broker with the idea of getting him to take the application and assist in every way possible in getting the loan through. Williams further testified that he had lived at Texhoma prior to taking up residence at Amarillo and, while living at Texhoma, he was engaged in the real estate brokerage business himself. He, therefore, was shown to be thoroughly familiar with the operations of real estate loan brokers and their relationship to lenders from whom they procured loans for their clients. He said that prior to making the application for this loan he knew nothing of the Great Southern Life Insurance Company; that he talked to B. O. Taylor about his indebtedness and that Taylor advised him to go to Dewey. He said at that time he did not know Dewey but that, on Taylor’s recommendation, he went to Dewey and opened up negotiations with him. He said Dewey told him that he (Dewey) would try to get the loan and that he then agreed to pay Dewey 1% a year on a ten-year' loan provided he got the loan. He said that was the compensation Dewey required and he was not to pay Dewey unless he got the loan. Williams’ testimony shows that at no time during the negotiations did he consider Dewey the agent of appellant but that he recognized Dewey as a loan broker and considered the arrangements between Dewey and himself as being the relationship that ordinarily exists between a loan broker and his client.

H. B. Dewey testified that Williams came to his office in December, 1924, and discussed with him the matter of procuring a loan. He said he told Williams he would try to handle his loan and asked him for a financial statement which Williams gave him. He said that he told Williams he would charge him 10% on the gross amount of the loan and that he was to perform for Williams services which involved .taking the application, transmitting it to the company, taking the company’s inspector to the land, and if the loan was approved, procure the abstracts and have them extended to date, assist in correcting any defects in the titles, seeing that the papers were properly filed, and attending to other matters of detail that were necessary in order to complete the loan transaction. He said that he was representing Williams and working for him to obtain the $35,000 loan and the renewal loan and that he did obtain the loan for Williams in the sum of $35,000 and charged him for his services in doing so the sum of $3,500. He said that in doing this he was acting as Williams’ agent.

A. C. Nicholson testified that he was manager of the investment department of appellant at Dallas and attended to some of, the details of these loans. He said that appellant did not pay Dewey anything for the-services he rendered in procuring or taking applications for loans; that the company and its officers understood Dewey was working for the borrower and assumed the borrower was,paying him therefor.

W. S. Horne testified that he lived at Houston and was vice-president and treasurer of appellant; that prior to assuming that office he was secretary of the company and. custodian .of all of its records. He said that during the time he was secretary,, which covered the period during which these two loans were made, there was never any order, resolution or motion passed by the board of directors of appellant authorizing or permitting any one to collect on its behalf any money from borrowers other than that which was provided by the loan papers themselves.

Other witnesses who were officers of appellant testified in the case but it was not shown by any witness that appellant, Great Southern Life Insurance Company, ever received any portion of either the $3,500 paid as a commission by appellees to Dewey when the first loan was procured of the $660 paid to him when the loan was-increased to $40,000 or that it ever entertained any purpose or intention of doing so. There is no testimony in the record which indicates that appellant ever at any time had the intention to appoint Dewey as its agent or that it ever intended to-recognize him as such. All of the witnesses who were connected in any way with the company maintained strongly that, while they assumed that Dewey was being paid by the borrower for his services, they dealt with him as an independent real estate loan broker and as the agent and representative of the borrower. Furthermore, Williams, who transacted all of the business on behalf of appellees, testified that the loans went through in a manner entirely satisfactory to him and that he had no complaint when the transactions were closed. After .the loan was closed he wrote a letter to a friend of his at Ideal, Texas, who seemed to be in need of a loan, introducing H. B. Dewey to her, and stated in the letter that Dewey was able, if anyone was, to successfully negotiate a loan on her ranch. In the letter he said: “I wish to say for Mr. Dewey that, if possible to put a loan through, he is able and competent in surmounting obstacles that defeat the average loan man. If you are ready to deal with Mr. Dewey, rest assured that he will look to your best interests in his dealings.”

We think this testimony is conclusive to the effect that Dewey had no authority from appellant to make loans on its behalf and that he was in no sense appellant’s agent. The record shows he had for many years maintained an office in the Blackburn Building at Amarillo and had upon his door a sign indicating his business was that of real estate loan broker. When clients appeared he would recommend that an application be made first to one company and then to another, depending upon which of them he thought would be most likely to be interested in extending the loan. Appellant not only did not participate in any of the commissions paid to Dewey by appellees but the record shows it did not know the amount he was charging them for his services. The case as presented by the record is simply that of a borrower employing a broker, who has no regular or established connection as agent with the lender and no arrangement of any kind for the payment to him of compensation for his services to effect loans. Such being the case appellant is in no respect chargeable with the acts and conduct of Dewey and the loans made by it cannot be tainted with usury by virtue of anything Dewey did in the matter nor by any amount’ that may have been collected by him from appellees as commission for representing them in the transactions. Ap-pellees were, therefore, not entitled to recover and it was the duty of the court to grant the motion presented and urged at the close of the testimony and give to the jury a peremptory instruction to return a verdict in favor of appellant.

Appellees contend that the record shows beyond question that Dewey performed valuable services for appellant in procuring real estate loans as an investment of its surplus money; that he was at the time soliciting loans on behalf of appellant, using its blank forms, having them signed by prospective borrowers and forwarding them to the home office of appellant. They contend, further, that the record shows that other parties procured loans from appellant through Dewey and that Dewey wrote them in regard to making loans and in response to his letters they came to his office at Amarillo and negotiated loans from appellant through him. They further suggest that Dewey was in the habit of looking at the lands proposed to be offered as security for loans, taking the final papers to borrowers to be 'executed by them, and thereafter looking after the titles, receiving checks from appellant for the loans and delivering them to the borrowers. They point out further that the officers of appellant testified that they did not send out blank applications for loans indiscriminately but preferred that loans be submitted by men who were able properly and carefully to fill out the blanks and give information about the value of properties in the community; that they used discretion in selecting such men, and wanted intelligent men who could give them the information they needed in forming conclusions as to the advisability of extending loans. They say, furthermore, that it was shown they assumed the borrower was paying Dewey for his services and that Dewey was not working for nothing and that they availed themselves of his services with the knowledge and acquiescence that he was getting compensation therefor from the borrower. They suggest further that the commission notes and deed of trust were given in the first loan simultaneously with the notes and deed of trust representing that loan and that when the $40,000 loan was closed the check for $6,854.23, payable to Williams and Dimmitt, was forwarded to Dewey and he delivered it to them. They contend also that, after the $40,000 loan was closed and some interest thereon became delinquent Dewey was appointed substitute trustee by appellant and at its request he posted notices of sale under which he proposed to sell the land as provided in the deed of trust and thereby collect the entire indebtedness which became due under the accelerated maturity clauses in the notes. They point out that, although appellees arranged to pay the delinquences and reinstate the loan, Dewey charged $50 for his services in posting and removing the notices which appellant’s officers insisted appellees should pay. They assert that these facts prove that Dewey was the agent of appellant in both transactions and that the charges made by him as commissions therefor should be classed as compensation paid to appellant for the use of the money appellees borrowed from it.

We cannot accede to these contentions of appellees. It is true the testimony reveals that all of these thing's were done by Dewey but none of them amounts to more than that which a loan broker would be expected to perform in procuring for his client a loan from any lending agency. It is not shown that, in procuring loans for other clients, Dewey acted differently, or procured his compensation in a manner that differed in any respect from his acts and conduct in procuring the loans involved here. Nothing in the testimony indicates that Dewey was at any time the duly appointed agent of appellant in procuring applications for loans nor that, in procuring applications and closing loans made by appellant, he acted in any capacity other than that of an ordinary loan broker. The fact that appellant desired intelligent men to handle papers through which it advanced loans to borrowers and that it exercised discrimination in selecting parties to whom it sent its blank applications for loans fall far short of that which is necessary to appoint or designate an agent. It merely shows business discretion on the part of the officers of appellant and that they desired to avoid applications for loans being sent to them by loan brokers or others who were not familiar with the many intricate details of the important matters involved in loaning large sums of money.

After a considerable portion of the interest on the $40,000 loan became delinquent appellant wrote to Dewey and he, on a number of occasions, urged appellees to pay the interest and prevent foreclosure. Appellees contend that this shows his first duty was to appellant and that he was representing it. We do not see anything unusual in this conduct. It happened long after the loans were made and it is not at all strange that a loan broker would be anxious that loans which he had induced loaning agencies to make to his client be kept in good standing. His own business reputation as a loan broker would, to some extent, be involved and it would be but natural that he should be concerned about such matters.

As to the act of appellant in appointing Dewey as substitute trustee to post notices and make sale of the land after a portion of the interest became delinquent, it is sufficient to say that this also happened long after the loans were made and in consequence only of the fact that the regular trustee provided in the deed of trust was unable to perform the services placed upon him by its terms. This incident had nothing to do with the original transactions in which the loans were made. The fee of $50 charged by Dewey for the services rendered by him as substitute trustee constituted a charge for which appellees were liable under the specific provisions of the' deed of trust. The insistance of appellant that appellees pay this fee to Dewey, therefore, is of no significance whatever.

Appellees urge that this case comes directly under the doctrine announced by the Supreme Court of the United States in the case of Fowler v. Equitable Trust Co., 141 U.S. 384, 12 S.Ct. 1, 5, 35 L.Ed. 786. We cannot agree with them in this contention. It is stated in that case that the “trust company established an agency at Springfield, Ill., for the purpose of securing loans upon real estate, and to that end constituted Johnston its agent. It made him a medium of communication between it and those in that locality who might wish to borrow money. It supplied him with the necessary blank forms, and expected him to' make a report as to the sufficiency of the security offered. Of course it knew that no-one would regularly perform the duties of such a position without reasonable compensation. That the agent might receive such compensation, the company came to' an understanding with him at the outset that he must make the borrower pay for his services. With such an arrangement between it and its agent, the company need not be informed in any particular case of the amount the latter would exact from the borrower as compensation for effecting a loan; but it must be held to have known-that the agent would not devote his energies and time to its business gratuitously,, and would not forward to.it an application for a loan, unless the borrower agreed to-compensate him for his services. The services performed by Johnston, as its regular local agent, charged with the duty of receiving and forwarding applications for loans, with his opinion as to the sufficiency of the security offered, were of substantial value to the company, as much so as if they had been performed under an arrangement that the company should, out of the money loaned, retain for him the amount which, by previous agreement with the-borrower, he was to receive as his compensation.”

If the record in the instant case revealed', that appellant. had established an agency at Amarillo for the purpose of securing loans upon real estate and to that end had constituted Dewey its agent and made him the medium of communication between it and those in that locality who might wish to borrow money, as the Equitable Trust Company did in the Fowler case, a situation would be presented entirely different from that which is shown by the record in this case. That such a distinction requires the application of different principles of law is well expressed by the court in the Fowler case in the following language: “It is not the case simply of a borrower •employing a broker,—who has no regular or established connection with the lender as agent, and no arrangement with the lender in respect to compensation for his services,—to effect a loan, and agreeing to pay him commissions. With agreements •of the latter kind the courts have no concern, and they are not permitted to affect the rights of the lender where he does ■nothing more than lend his money at such rate of interest as the statute permits.”'

See also Massachusetts Mut. Life Ins. Co. v. Boggs, 121 Ill. 119, 13 N.E. 550, by the Supreme Court of Illinois whose interpretations of the applicable law guided the Supreme Court in its consideration • and ■decision of the Fowler case.

In our opinion the record before us. is wholly lacking in any evidence to •establish an agency on the part of Dewey in any respect. If, however, by some ultra-liberal or charitable construction it could be said that a semblance of agency was •created, certainly it could not have been more than a special and limited authority that was conferred upon Dewey by appellant and it is well established in this state that the act of an agent having such limited .and special authority only, in charging a borrower a fee or commission for making a loan and attending to the details of •closing the same, is not the act of the lender and the amount so charged and ■collected by him does not render the loan usurious. Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046, 109 A.L.R. 1464; Noel v. Panhandle B. & L. Ass’n, Tex.Civ.App., 85 S.W.2d 773; Sales et ux. v. Mercantile Nat’l Bank, Tex.Civ.App., 89 S.W.2d 247.

If, therefore, it could be said that such an agency was created and shown by any of the testimony, it did not have the effect of relieving the trial court of his duty to instruct the jury to return a verdict for the appellant.

We may say further that there is nothing in the record to indicate an intention on the part of appellant to charge usurious interest for the loan. We do not find any evidence which suggests that the arrangements as made were tainted with an effort to avoid the law pertaining to usury or cover up a design to collect more than was legally due for a legitimate loan. Our courts hold that a proper construction of a contract requires the presumption that the parties intended to observe the law and a contract for the loan of money should not be held usurious unless, upon a fair and reasonable interpretation, it was the manifest intention of the lender to charge and collect more interest than that which is permitted by law. Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935; Southern States Mortgage Co. v. Lykes, Tex.Civ.App., 85 S.W.2d 780; Shive v. Braniff Investment Co., Tex.Civ.App., 68 S.W.2d 564; Braniff Inv. Co. v. Robertson, 124 Tex. 524, 81 S.W.2d 45, 100 A.L.R. 1421.

From what we have said it is apparent that in our opinion the appellees were, not entitled to recover, but that the trial court should have instructed the jury to return a verdict in favor of the appellants. The case seems to have been fully developed and thoroughly tried. We conceive no benefit that could accrue to any of the parties or purpose that could be served by another trial. The judgment of the trial court will, therefore, be reversed and judgment here rendered that appel-lees take nothing by their suit and -pay the costs of the trial court and of this court.


text:
    BRYAN et al. v. DALLAS NAT. BANK.
    No. 12801.
    Court of Civil Appeals of Texas. Dallas.
    Nov. 11, 1939.
    Rehearing Denied Dec. 9, 1939.

      E. P. Bryan, of Dallas, for plaintiffs in error.
    Hamilton, Lipscomb, Wood & Swift and Clifford McBride, all of Dallas, for defendant in error.
   LOONEY, Justice.

Thad Else and wife, Mary (colored people), executed to P. P. Martinez five promissory notes, the first four aggregating $1,503.48, were secured .by a first deed of trust on an improved lot in the City of Dallas, and the fifth note for $120 was secured by a second deed of trust on the same property. The deeds of trust were duly recorded, and contained identical provisions, authorizing Martinez to pay taxes and insurance premiums on the property, in the following language: “We further covenant that we will at all times during the continuance of this trust keep the buildings and improvements now or hereafter to be erected on said premises insured against loss by fire and tornado to the extent insurance can be obtained thereon * * * and to pay before the same shall become delinquent all taxes and assessments as may be levied or assessed against said premises or any part thereof. And it is expressly agreed that if the undersigned shall fail to effect said insurance and deliver such policies or to pay such taxes, then the said insurance may be effected and said taxes may be paid by the legal holder of said notes * * * and the sum so expended shall be a demand obligation and become a part of the debt hereby secured and shall draw interest at the rate of 10% per annum from date so expended until paid.” On different dates between January, 1929, and June 29, 1935, Martinez paid various items of taxes and insurance premiums on the property. Thad Else made various payments on the indebtedness, but left an unpaid balance at the time of his death. He died intestate on September 9, 1933, leaving as his only heirs at law his widow, Mary, and a son, Clyde Else; no administration being opened on his estate, Mary conveyed her interest in the property to Clyde. Martinez having died October 9, 1935, defendant in error was duly appointed and qualified as independent executor of his estate. Clyde Else, being unable to pay the balance remaining unpaid of the encumbrance against the lot, and being threatened with foreclosure proceedings, joined by his wife on November 14, 1935, conveyed the property to Mrs. Minnie L. Bryan, wife of E. P. Bryan; the consideration clause of the conveyance being: “That we, Clyde Else and wife, Jeffie Else of the County of Dallas, State of Texas, for and in consideration of the sum of Thirty Five Dollars cash in hand paid by Minnie L. Bryan out ■of her separate estate receipt of which is hereby acknowledged, and the further consideration of the promissory note of Minnie L. Bryan of even date herewith for the sum of Thirty Four Hundred Sixty Five & No/100 ($3465.00) Dollars, to be paid hy her out of her separate funds, payable at our instance and request to C. W. Bryan, ■or order, and owned by him for the balance of the purchase money for the land here conveyed with vendor’s lien retained •on said land to secure same, the principal being due five years after date, and bearing interest from date at the rate of eight per cent per annum, interest payable semi-annually from this date, providing for the usual acceleration and 10 per cent attorney’s fees, if placed in the hands of attorney for collection after due, or collected through the Probate Court. Said note is further secured by deed of trust of even ■date herewith to R. D. Seaton, Trustee, upon the hereinafter described land. Said land being taken by Minnie L. Bryan subject to a balance due on the principal of note payable to the order of P. P. Martinez, said balance being in the sum of $781.00.”

We deem it appropriate at this point to state that, the note for $3,465, payable to C. W. Bryan, and the deed of trust securing same, recited in the deed from Clyde to Mrs. Bryan, are extraneous matters having no real connection with the sale by Clyde to Mrs. Bryan, but, it seems, was a Bryan family affair, C. W. Bryan being a son of Mr. and Mrs. Bryan, and the note was created to serve some purpose of Mrs. Bryan. So, eliminating this foreign matter, the consideration clause proper reads: “That we, Clyde Else and wife, Jeffie Else of the County of Dallas, State of Texas, for and in consideration of the sum of Thirty Five Dollars cash in hand paid by Minnie L. Bryan out of her separate estate receipt of which is hereby acknowledged, * * *. Said land being taken by Minnie L. Bryan subject to a balance due on the principal of note payable to the order of P. P. Martinez, said balance being in the sum of $781.00.”

Defendant in error, as independent executor of the Martinez estate, instituted this suit against Mrs. Minnie L. Bryan and husband, E. P. Bryan, C. W. Bryan and wife, Ruth, Mary Else (widow of Thad), Clyde Else and wife, Jeffie, pleading, among other things, the deed from Clyde and Jef-fie to Mrs. Bryan, alleging that, by its terms, the lot in question was conveyed to her subject to the Martinez claim of $781, and sought foreclosure of the lien of the trust deed as against all defendants; personal judgment, however, was not sought against either defendant.

Mary, Clyde and Jeffie Else disclaimed and the other defendants (the Bryans) answered, contesting the indebtedness and the validity of the lien, plead that, the Martinez notes and trust deed were usurious; that the cause of action asserted was barred by the two and four year statute of limitation; that the indebtedness had been paid; that the lot in question was the business homestead of Thad and Mary at the inception of the lien sought to be foreclosed; that the statement in the deed to the effect that the property was conveyed subject to the Martinez debt, being the result of a mutual mistake, constituted no part of the consideration for the conveyance, therefore should be stricken from the deed; that the estate was not entitled to recover the amount claimed for taxes and insurance premiums paid by Martinez on the property, because, prior to the conveyance by Clyde to Mrs. Bryan, she (through her husband E. P. Bryan, who acted as her agent throughout) inquired of representatives of the Martinez estate as to the full amount of its claim against the lot and was informed that the same amounted to $781 due on notes, no mention being made of the fact that any portion of the claim represented taxes and insurance premiums paid, therefore, the estate should be estopped to claim any amount for taxes and insurance premiums, and that, under the terms of the trust deed, Martinez was not authorized to pay taxes on the property until same became delinquent; alleging that some, if not all, of the taxes were paid before becoming delinquent, therefore, with reference to the amount of taxes thus paid, Martinez was a mere volunteer. At the conclusion of the evidence, the court instructed a verdict for defendant in error and rendered judgment accordingly, fixing the amount of its claim at $663.86, and foreclosed the lien of the second deed of trust, on the lot, as against all defendants, from which the Bryans appealed by writ of error.

The pivotal question, answer to which, we think, will compose practically all questions presented, is, whether the clause found in the deed from Clyde Else and wife to Mrs. Bryan, reading “Said land being taken by Minnie L. Bryan subject to a balance due on the principal of nóte payable to the order of P. P. Martinez, said balance being in the sum of $781.00”, was the result of a mutual mistake, as contended.

E. P. Bryan, who wrote the deed, alone testified on this issue. His testimony is to the effect that, he prepared two deeds, the first contained the clause just quoted, and, thereafter, prepared another which he intended to use, omitting the clause in question; but, by mistake, the first deed prepared was executed. Testifying that, he first wrote the deed containing “the subject to” clause, said: “Then afterwards I wrote another deed leaving that out and through mistake when I went to close up the deal I got this deed instead of the other one and that is how come that in there, through mistake. I did not notice that this was in there. That I had gotten the wrong instrument until after this suit was brought.”

It is perfectly obvious that, there was no mutuality in regard to the mistake, as Bryan, alone, according to his own admissions, committed the mistake; hence, the evidence failed to raise an issue as to the alleged mutual mistake. In Sun Oil Co. v. Bennett, 125 Tex. 540, 84 S.W.2d 447, 450, Judge Smedley announced the controlling doctrine in the following language; he said: “If one of the parties intended that the lease cover and affect adjoining land owned by the lessor, there was no mutual mistake in the execution of the lease containing language which included such land. In the absence of fraud or inequitable conduct, a written instrument will not be reformed on account of mistake, unless the mistake is mutual; that is, a mistake common to both parties, both laboring under the same misconception in respect to the terms of the instrument. St. Paul Fire & Marine Ins. Co. v. Culwell (Tex.Com.App.) 62 S.W.2d 100; 36 Tex.Juris. p. 746, § 17, p. 750, § 19; 23 R.C.L. p. 327, § 20; note, 26 A.L.R. p. 501, and following; Black on Rescission and Cancellation (2d Ed.) vol. 1, p. 15, § 11, p. 396, § 128.”

Having purchased the property subject to the Martinez claim of $781, we are of opinion that, Mrs. Bryan is precluded from questioning either the amount of the claim or the validity of the lien securing same. In Bookhout v. McGeorge, Tex.Civ.App., 65 S.W.2d 512, 520, we had occasion to consider this identical question,, and disposed of same in the following language: “One purchasing real estate with knowledge of the existence of and in subordination to a mortgage, although the mortgage, as to the vendor, may be void, is bound thereby, and is estopped to thereafter dispute the validity of the lien. This-doctrine was announced in Rice-Stix, etc., Co. v. First National Bank, 231 S.W. 386, 388, where the Commission of Appeals-held that a purchaser of land, with knowledge that the vendor recognized as valid an existing lien, was estopped to challenge its validity, although the property conveyed, upon which the lien existed, was in fact the homestead of the vendor. Judge Spencer, speaking for the Commission on this-occasion, said: ‘The uncontroverted facts-showing that the bank took the property subject to the record, which revealed the lien and with knowledge that Gullidge-(vendor) recognized the lien as security to protect his indebtedness, it (the bank) is, as a matter of law, under such facts, es-topped to deny the validity of the lien and the mortgagee is therefore entitled to a. judgment of foreclosure.’ To the same effect see Wooten Motor Co. v. First Bank (Tex.Com.App.) 281 S.W. 196, 197.” Also, see Kansas City Life Ins. Co. v. Hudson,. Tex.Civ.App., 71 S.W.2d 574, writ refused.

In view of the uncontroverted testimony of Clyde Else, and the admissions of Mr. Bryan that, before closing the trade, he knew the Martinez estate was asserting a secured claim for $781 against the property, the conclusion, we think, is inescapable that the claim constituted a part, in fact,-the major part, of the consideration for the conveyance. Clyde Else, being examined by counsel for plaintiff in error, was asked :-

“Q. How much were they trying to-collect when they were threatening to sue you? A. $781. * * *
“Q. What was the deal between you and my wife with reference to that property?’ A. The deal between us was that you would give me $35 and that the rest of - it would be paid (the rest of it was the Martinez estate claim). * * *
“Q. What about the $781? A. The $781 statement was sent to me but I don’t know whether you had that into yours or not.
“Q. Was it deducted from the purchase-price? A. Not that-I know of.
“Q. You had no concern with the $781 did you? A. After I turned it over to you I didn’t. * * *
“(On cross-examination) Q. When you deeded this property to Mrs. Minnie L. Bryan you knew that there was a debt on the property, that Mr. Martinez had a lien on it? A. Yes.
“Q. Was it or not your understanding when you deeded that property to Mrs. Bryan that they would take that debt and lien off your hands, that you would not have to pay the debt if they took the property? A. That is right. * * *
“Q. And did they agree to take the Martinez debt off of your hands? A. Yes.
“Q. Wasn’t it your understanding— wasn’t it understood between you and the purchaser that the property was to be sold to the purchaser subject to Mr. Martinez’s debt ? A. Yes, to their paying the debt off and owning the piece of property.
“Q. Yes. A. That was provided they would take the whole debt off. Now, the $35, which he paid me was to clear me assuring me that I would have no interest in it at all.
“(On re-direct examination) Q. You were willing to take the $35? A. They had started to sue me three or four times, and I had no $781 to pay off, and I did not have enough money to improve the building. I had no one to go to and get them to help me fix the building; and my idea was to get out of it.
“Q. You did not want to have a lawsuit with Mr. Martinez, did you? A. No, I had no way to beat the case with Mr. Martinez. I felt like it would have been silly for me to try to do'it.”

The witness further testified that, in his opinion, at the time of the transaction involved, the property was worth seven or eight hundred dollars. Mr. E. P. Bryan testified that, while considering purchasing the property, he requested the land agent who approached him on the subject, to get a statement from Mr. Martinez as to every cent of money that he claimed against that property; that the agent told witness there were two notes on which there was an unpaid balance of $781; also, that the attorney representing the Martinez estate ‘phoned witness that there were two notes on which there was $781 due, but the attorney did not mention the fact that the claim included any amount for taxes or insurance premiums paid. In view of this testi.mony, we are of opinion that, the amount claimed by the Martinez estate was a part of the consideration for the conveyance by Clyde Else and wife to Mrs. Bryan, hence that, even if it had not been expressly so stated in the deed (as was done), nevertheless, under the undisputed facts, Mrs. Bryan would have taken the property charged with the lien indebtedness.

However, plaintiff in error contends that, at the time inquiry was made in regard to the amount of the Martinez claim against the property, the information obtained being that it was $781 due on notes, nothing being said in regard to the fact that the claim included taxes and insurance premiums, that defendant in error is now estopped to claim any amount not evidenced by notes. This insistence, we think, is based upon an erroneous construction of the provision of the deed of trust; the pertinent provision reads: “And it is expressly agreed that if the undersigned shall fail to effect said insurance and deliver such policies or to pay such taxes, then the said insurance may be effected and said taxes may be paid by the legal holder of said notes * * * and the sum so expended shall be a demand obligation and become a part of the debt hereby secured and shall draw interest at the rate of 10% per annum from date so expended until paid.” We think the language “shall * * * become a part of the debt hereby secured, etc.”, necessarily incorporated the sum or sums paid as taxes and insurance premiums into, and that, constructively, they became a part of the notes. Plaintiff in error was concerned only in the amount, and not as to-the constituent elements, of the claim; hence, the ■ omission to mention the fact that, the claim included taxes and insurance premiums paid by the holder of the notes, was not calculated to mislead plaintiff in error, nor do we think she was prejudiced by such omission.

It is also contended that Mr. Martinez was only authorized to pay delinquent taxes and, as some of the payments-claimed to have been made were before the taxes became delinquent, that with reference to all such, he was a mere volunteer. We overrule this contention. The debtor was obligated to “pay before the same shall become delinquent all taxes and assessments as may be levied or assessed against said premises or any part thereof. And it is expressly agreed that if the undersigned shall fail * * * to pay such taxes, * * * said taxes may be paid by the legal holder of said notes * * * Obviously, it was beneficial alike to debtor and creditor that, taxes be paid before becoming delinquent, otherwise penalties would have been added, thus increasing the burden of indebtedness and diminishing correspondingly the value of the security.

Failing to find reversible error, all assignments and propositions are overruled and the judgment of the court below is affirmed.

Affirmed.