text:
    WILSON et al. v. POLAND.
    (No. 1787.)
    Court of Civil Appeals of Texas. Beaumont.
    March 7, 1929.
    Rehearing Denied March 13, 1929.

      O. J. Todd, C. S. Pipkin, and Jack M. Moore, all of Beaumont, for appellants.
    David E. O’Fiel, of Beaumont, for appel-lee.
   WALKER, J.

On the 13th day of December, 1927, P. Poland instituted this suit against L. Wilson, A. H. Boyt, and American Rice Growers’ Association, alleging that L. Wilson was due him $528 for threshing 960 sacks of rice at 55 cents per sack and that the work was done under contract entered into “on or about November 1, 1927.” Pie pleaded a lien against the rice for the amount of his debt, and that it was in possession of the other defendants, who were asserting some sort of a claim against it. Boyt and American Rice Growers’ Association went out of the case without complaint, and their connection therewith will not be further referred to.

On February 6, 1928, Wilson answered by general demurrer, general denial, and specially, admitting the amount of plaintiff’s debt, less $111, which credit was conceded by plaintiff, but pleaded that the account was not due. He also pleaded as follows:

“Answering further herein this defendant says that he understands and believes that the South Texas Implement & Machinery Company, a corporation duly incorporated under the laws of the State of Texas with its principal place of business in Houston, Harris County, Texas, holds a claim against the plaintiff herein upon which they have brought suit for the collection thereof; that said South Texas Implement & Machinery Company has garnished this defendant for whatever funds he might hold in his hands as belonging to the plaintiff herein; that this defendant asks the Court that the South Texas Implement Company be duly cited in this cause and commanded to answer herein in order that they may set up what claim they have against the plaintiff herein and on whatever funds this defendant may have in his hands belonging to plaintiff, if any such he has.”

On the 28th day of March, 1928, South Texas Implement & Machinery Company intervened, pleading that it filed suit on the 6th day of December, 1927, against P. Poland in county court of Harris county, Tex., and in said cause recovered judgment against P. Poland on February 23, 1928, for $499.30; that, at the time it filed its suit against P. Poland, it sued out a writ of garnishment against L. Wilson; that said writ was served on December 9,1927, and on the 27th day of February, 1928, on the answer of said L. Wilson to said writ of garnishment that he owed P. Poland $378, an interlocutory judgment was entered in its favor against Wilson for said sum. On May 17, 1928, under leave of the court, David E. O’Fiel and James Poland filed their plea of intervention claiming the amount of plaintiff’s demand against Wilson under assignments from him, oné-third to O’Fiel and two-thirds to James Poland. On a trial to the court without a jury, it was found and so recited in the judgment that P."Poland assigned in writing one-third of his claim to David E. O’Fiel prior to service of the writ of garnishment against Wilson in the Harris county suit, and that prior to such service of the writ of garnishment against Wilson P. Poland made an equitable assignment of the other two-thirds of a claim to James Poland. On this finding judgment was entered against L. Wilson in favor of O’Fiel and James Poland for the full amount of the claim of P. Poland, and that the South Texas Implement & Machinery Company recover nothing. L. Wilson and South Texas Implement & Machinery Company have duly perfected their appeal from this judgment.

Appellants say that judgment for ap-pellees was fundamentally erroneous, on the ground that they came into court and pleaded their cause by a supplemental petition. It is true that they designated their pleading “Plaintiffs’ First Supplemental Petition,” but against a demurrer or assignment of fundamental error a plea should be construed by its essential nature, and not by the name given to it by the pleader. Appellees’ plea was in due form. They pleaded permission of the court to intervene, the assignment of plaintiff’s claim to tliem, the adoption oí plaintiff’s allegations, and his prayer for relief.

Judgment was properly entered for ap-pellee O’Eiel for one-third of the amount due by Wilson for the threshing of the rice. His assignment was in writing, executed be-for the service of the writ of garnishment upon Wilson, and was for 10 per cent, of P. Poland’s demand against Wilson, “if settled without suit and one-third if suit is necessary.” He gave Wilson due notice of his assignment, so that, had he so desired, he could have called it to the court’s attention in the garnishment proceeding and answered to that effect. He was to have one-third, if suit was necessary. The record showed affirmatively that suit was necessary and that his right to the one-third had matured. Therefore the court did not err in awarding O’Eiel a one-third recovery instead of a 10 per cent, recovery.

The judgment against the South Texas Implement & Machinery Company that it “take nothing and that said named James Poland, David E. O’Piel and Pat Poland and L. Wilson go hence without day and recover of and from said intervener, South Texas Implement & Machinery Company its costs,” is of doubtful meaning. The evidence fully sustained the allegations of the South Texas Implement & Machinery Company as to the validity of its Harris county judgment against E. Wilson, showing that a final judgment was entered in that ease in favor of the South Texas Implement & Machinery Company against E. Wilson on the 11th day of May', 192S, for $378. The issues between this company and Wilson were fully litigated in that suit, and the judgment is not subject to the collateral attack .here made. It follows that the judgment of the trial court against the South Texas Implement & Machinery Company must be reversed and- judgment here rendered that it go hence without day with its judgment against E. Wilson unimpaired, and that it recover its costs against L. Wilson.

The court erred in concluding that P. Poland, prior to the service of the writ of garnishment on Wilson in the Harris County suit, had made an “equitable assignment” of his claim against Wilson to James Poland.

P. Poland testified:

“I transferred my claim to my father and got more for if than it was worth so far. I transferred this claim to my father in writing and prior to the time that I transferred it to him in writing, I transferred it to him by word of mouth. The first time I made a promise to my father, or an agreement with my father that he could have the claim when it was paid was along about the first of the threshing and it was to pay him money I owed him. I was to pay him out of money for this threshing.”

James Poland testified:

“Pat Poland is my son. iPrior to September, 1927, I advanced some funds to my son, Pat Poland. He told me to let him have some money and he would pay it back when he got through threshing. 1-Ie owes me something-over $600.00. I didn’t advance it all at onetime. Last fall, a year ago, was when I let him the first money. After he bought this-separator and machine—he had some money and he paid what money he had on the machine and give two notes for the balance, so that fall, he didn’t make much money threshing and he come to me and said: T want to-get more money from you because I want to pay what I got on my note and keep my separator.’ ‘All right,’ I said, T will let you have more money and try to get along some way.’ I let him have it off and on and last •fall, after he got done threshing, he come and said he could not get the threshing money and some party he had working for him was in hard circumstances and he was working for him and he wanted to get enough money to pay him and I let him have it to pay him.”

David E. O’Eiel testified:

“I attempted to have- Mr. Wilson, the defendant, execute to us a written assignment of the' amounts which the American Rice Growers Association should realize from the sale of this rice and to this end prepared an assignment in writing for him to sign and hand to Mr. Boyt. The plaintiff, Mr. Pat Poland at the time that I prepared these writings and sent to Mr. Wilson, advised me-to assign this money, except my fees, to his father, and when I collected it to pay it to-him. At the time this suit was filed, I prepared an assignment in writing.”

To raise the issue of equitable assignment, James Poland rested under the burden of showing (a) that his son had made to him for his use an absolute appropriation of the Wilson claim; (b) that the assignment was of the whole of the claim or of a specific sum or fixed percentage thereof; and (c) that his son had parted with all control over the claim. The evidence of the Polands raised none of these issues. There was no absolute appropriation, no fixed sum or percentage was designated, nor did P. Poland part with control of the claim, but continued trying to collect it, hired an attorney for that purpose, and had suit instituted thereon in his own name, wherein he asserted ownership in himself. Nor did the testimony of O’Piel strengthen the case. The instructions testified to by him to assign the claim to James Poland and pay him the proceeds were very indefinite in their nature, and it was not shown whether the instructions were given before or after the service of the writ of garnishment, nor did these instructions constitute an absolute appropriation of the claim to the use of James Poland, who knew nothing of the instructions when given, nor ever knew. that they had been given, nor ever acted in any way thereon. In fact, as already stated, P. Poland never relinquished his control over the claim, but, whatever was the nature of the instructions'given to his attorney, withdrew them before they were ever acted upon, as he had a right to do, and asserted ownership in himself. The utmost legal effect of all the testimony was to raise an issue that P. Poland promised to pay his debt to his father out of the profits of his rice threshing, ■ and “a mere promise, though of the clearest and most solemn kind, to pay a debt out of a particular fund, is not an assignment of the fund, even in equity. To make an equitable assignment, there should be such an actual or constructive appropriation of- the subject-matter as to confer a complete and present right in the party meant to be provided for, even where the circumstances do not admit of its immediate exercise.” If the holder of the fund retain control over it, it is fatal to the claim of the assignee.

Discussing the issue of equitable assignment in Southern Surety Co. v. Bering Mfg. Co. (Tex. Civ. App.) 295 S. W. 837, Judge Pleasants quoted with approval the foregoing proposition from Christmas v. Russell, 14 Wall. 69, 20 L. Ed. 762. To the same effect was the holding of this court in Colleps v. Lumber Co., 185 S. W. 1043.

It follows that the judgment of the trial' court in favor of James Poland against L. Wilson must be reversed and judgment here rendered in Wilson’s favor that neither P. Poland nor James Poland recover anything against him, and that Wilson recover his costs.

Affirmed in part, and in part reversed and rendered.


source: Caselaw Access Project

author: RANDOLPH, J.

license: Public Domain

text:
    GENERAL MOTORS ACCEPTANCE CORPORATION v. STATE.
    (No. 3029.)
    Court of Civil Appeals of Texas. Amarillo.
    March 6, 1929.
    Slough & Gibson, of Amarillo, for appellant.
    J. S. Stallings, of Claude, and S. E. Eish, of Amarillo, for the State.
   RANDOLPH, J.

In this case this court made a statement of the case and certified to the honorable Supreme Court of Texas the following questions:

“(1) By the procedure outlined in Article 5112, does the sale by the state of Texas of the automobile in question dispose of the interest of the intervener as an innocent lien-holder ?
“(2) Has the intervener, as an innocent lienholder, the right to participate in the proceeds of such sale?”

The questions were referred to section A of the Commission of Appeals for answer. The Commission of Appeals, in an opinion by Judge Nickels, answered each of the questions in the affirmative and the holding of the Commission of Appeals was expressly approved by the Supreme Court. The issues presented, to the Supreme Court control the disposition of the case and as the opinion of the Commission of Appeals states the facts of the case, as set out in the certificate, a statement of the facts will not be repeated here. 12 S.W.(2d) 968.

The objection made by appellee to the consideration'by us of the matters set out in appellant’s (intervener’s) brief because the defendants Carter and Garrett were not made parties to the appeal bond will not be sustained. These defendants were charged by the state with the offense of unlawfully transporting liquor in the automobile in question and were convicted and sent to the penitentiary. The issue as to whether or not such a violation of the law had. occurred as authorized the forfeiting of the automobile was tried out and determined against those defendants after due service. They did not appeal from such judgment. Therefore the judgment concludes every right they had. Under the answers of the Commission of Appeals, the only issue to be determined was whether or not the intervener could share in the disposition of the proceeds of the sale of the automobile — a question of no vital interest to Carter or Garrett, they having lost whatever interest they had in the car by the judgment of the trial court which had determined the question of forfeiture against them. Hence they were not necessary parties to the appeal of the question for ultimate decision.

In accordance with the instruction of the. Supreme Court, the judgment of the trial court is here in part affirmed and in part reversed and so reformed as that the intervener will be granted recovery of judgment as prayed for, and such judgment, after the payment of costs in the lower court and in this court, to be. first paid off and discharged from the proceeds of the sale of the automobile, and that the residue of the proceeds of such sale be paid to the plaintiff, the state of Texas, including legal commissions upon th,e amount recovered by the state from such residue, and judgment will be entered accordingly.


author: GRAVES, J.

text:
    SUNYLAN CO. et al. v. POWERS.
    (No. 9263.)
    Court of Civil Appeals of Texas. Galveston.
    Feb. 26, 1929.
    Rehearing Denied March 14, 1929.
    Niday & Carothers, of Houston, for appellants.
    Johnson & McConnell, of Houston, for ap-pellee.
   GRAVES, J.

Appellee sued appellants for the cancellation of their written executory contract of sale to him of a lot in the Suny-lan addition to the city* of Houston, for the return of the money he had paid thereon with interest, and, in the" alternative, for damages laid at $1,854:17, upon substantially these allegations:

(1) That, to induce him to enter into the contract, appellants falsely represented to him that a street known as Sunylan street would be opened up and run on the east adjacent to his lot, that it would' be 69 feet wide, lowered at least 8 inches, and covered on an average with 6 inches of shell to be laid 16 feet wide in the middle thereof; that “they had procured a right of way for said Sunylan Street from the Sisters of Charity of the Incarnate Word, and that said street would be laid out and work begun thereon not later than September 1, 1926, and would be prosecuted with all due diligence and dispatch to completion. That the construction of said Sunylan Street, together with all of said improvements mentioned and specified in said contract, would be begun not later than September 1, 1926, and prosecuted with all due diligence and dispatch to completion, and that all of same would be completed not later than early spring, 1927. That said entire addition, and especially the property for which this plaintiff was negotiating, would be ready to put on the market for home sites by early spring following.”
(2) That he believed all of such representations to be true, relied upon them as material inducement, and would not otherwise have entered into the contract for the purchase of the lot or afterwards have paid the money he did thereon.
(3) That all these representations — inclusive of the ones written into the contract itself with reference to improvements — -were false, that appellants had not only failed to carry out any of their promises so made, but had not even procured a right of way from the Sisters of Oharity for Sunylan street; if they ever obtained a contract for that purpose, they had forfeited it because of failure on their part to carry it out, and no such right of way could then be procured; hence performance of their undertaking had become impossible.

The improvements specified in the contract provided for cement sidewalks, sanitary sewers, and fire plugs, as well as the laying out, grading, and shelling of certain streets in the addition, which included Sunylan, except that no reference was made therein to its being 60 feet wide, the plat of the addition only showing it to be 39 feet, all of which were by its terms “to be begun not later than September 1, 1926, and prosecuted with all due diligence and dispatch to completion.” There was no averment that a mutual mistake had been made by the parties to the contract, nor any that appellants, when making them, then had no intention of carrying out their alleged statements and promises.

Appellants in reply, after general demurrer and general denial, set out the contract in full, pleaded in bar certain provisions of it relating to complaints of delays in making the improvements, charged a voluntary abandonment) of his contract on appellee’s part, and denied having on their own made any misrepresentations of any character. They further specified the improvements claimed to have been actually made, admitted some delays they claimed to be due to matters over which thej1 had no control, and averred that, in the circumstances, they had been guilty of no lack of due diligence in prosecuting the improvements.

Certain special issues were submitted to a jury, No. 1 being this: “Did or did not O. B. Archer, before plaintiff signed the contract in question, represent to the plaintiff, R. E. Powers, that Sunylan Street would be sixty (60) feet wide.”

The jury answered this inquiry, “He did,” also subsidiary ones, by which it was found that such representation was material inducement to the appellee in entering into the contract, that he relied) upon it, and would not otherwise have executed the contract at all.

There were further issues designed to elicit whether or not the improvements referred to were begun and prosecuted as provided in the contract, but it is deemed unnecessary to set them or the verdict thereon out at length; they were all answered in the negative.

Judgment for the cancellation of the contract, and that appellee recover the amount he had paid thereon, together with interest, was entered on the verdict, and these additional findings by the court:

“Counsel for defendants admitted that, at the time plaintiff R. E. Powers, and C. B. Archer negotiated the'sale and purchase of the land involved in this suit, and at the time the contract in question was signed by the plaintiff and' W. R. Archer, the defendants honestly intended to make Sunylan Street sixty feet wide.
“The court) finds from the undisputed evidence, that when the sale of the land in question was negotiated and when said contract for the sale and purchase of said land was executed there was a mutual mistake in that the plaintiff and the defendants honestly believed Sunylan Street would be opened up sixty feet wide.”

We think this (determination resulted from the application of an erroneous theory of law to the undisputed evidence, and cannot be upheld; in other words, under the un: controverted testimony heard, there was neither fraud nor mutual mistake in the case, for these reasons: While the pleading of the 'appellee was sufficient to charge misrepresentation of one existing fact, to wit, that he was told the appellants' had procured a right of way for Sunylan street from the Sisters of Charity, he failed to prove that such a representation was ever made to him by them, both his allegations in other particulars and all the evidence heard going no further than to show that he was merely told before and on entering into the contract that Sunylan street would be 60 feet wide and would be so shelled, along with the other things likewise agreed to be done — that is, all the statements made were simply promises to do these things in the future — and there is not a scintilla of evidence tending to indicate that appellants did not then in good faith intend to fully carry out every one of them ; quite the contrary appears.

It is true that up to the time of this trial the other improvements had not been completed, Sunylan street had not been made 60 feet wide, and there was sufficient evidence to. have supported a finding that it never would be, because the Sisters of Charity had canceled their prior conditional agreement with appellants to donate the necessary 30 feet for that purpose on account of the latters’ failure to comply with its terms by December 1 of 1926, and would not renew the same; but nonperformance of forward-looking agreements or promises in such circumstances, in the absence of a lack of intention at the time to carry them out, does not constitute fraud. Edward Thompson Co. v. Sawyers, 111 Tex. 374, 234 S. W. 873; Mid-Continent Life Ins. Co. v. Pendleton (Tex. Civ. App.) 202 S. W. 769.

Indeed, the trial court expressly acquits the appellants of any fraud in its quoted finding that both sides were honestly mistaken. So that, we are left to deal only with the consequences of that interpolation.

In our view, there could not have been such mutual mistake here as entitled the appel-lee to a rescission, for two reasons:

(1) No then-existing or past-occurring fact-was either misstated to him or misrepresented by either party, all the promises and agreements made having had, to the knowledge of both parties, sole reference to acts to be done in the future, as to which therefore neither could in the nature of things know one way or the other; in other words, that situation was not susceptible of a mistake of fact that would on its development thereafter give either party the right to wipe out their agreement touching it, because both necessarily contemplated that it was only a contingency at best they were contracting about, and that, possibly at least, it might or might not come about.
(2) The parties themselves at the time expressly recognized this inherent uncertainty from the character of the contract they were making, and so contemplating, provided a special remedy against developments thereunder in paragraph VIII thereof, as follows: “This contract is executed in triplicate and the original copy is to he placed in escrow with the Houston National Bank of Houston, Texas, where all payments on the same shall be made and the purchaser shall, have, the right, by notice in writing, delivered to the Bank to stop thé payment by the Bank to .Seller of any money thereafter paid in to the Bank on this contract at any time the Purchaser finds that the Seller is not making the improvements in said action as specified in the foregoing paragraph, and until said specifications are complied with by the Seller.”

The idea here advanced, that to constitute fraud or mutual mistake there must be either a misrepresentation by one of the parties or an honest mistake by both as to an existing fact, is clearly the basis for: the decision in Mason v. Peterson (Tex. Com. App.) 250 S. W. 142, on which the appellee relies to sustain .this judgment; the court there expressly grounds its holding upon the finding that the number of acres of the land susceptible to irrigation by gravity — flow from a nearby canal had been misrepresented as an existing fact — that is, the purchaser had been told that not over 4 or 5 acres of it could not be so irrigated, when in fact 16.57 acres could not be, an actual discrepancy of 11.57 acres; it was merely held that this misrepresentation, irrespective of any knowledge of its being untrue or any intent to deceive on the part of the maker at the time, constituted legal or constructive fraud that entitled the purchaser to relief.

In so holding, the court simply remarked that even where there is no such fraud, and the misrepresentation, that is, one as to an existing fact, is the result of an honest mistake on the seller’s part, shared in by the buyer, the same relief will be granted as in the case of such fraud, citing Culbertson v. Blanchard, 79 Tex. 486, 15 S. W. 700; Cox v. Barton (Tex. Com. App.) 212 S. W. 652; Taylor v. Hill (Tex. Com. App.) 221 S. W. 267. Every one of these is a case of like sort, being grounded upon either a misrepresentation or a mutual misapprehension as to the. actual state of facts.

No stream of law can rise higher than its source, and the course of continuity of decision can never be continuously followed unless the determinative facts from which the rules flow are kept in mind; therefore, it is plain that our Commission of Appeals did not in this deliverance intend to hold that, where the evidence only develops that both parties to such a contract of sale had then in good faith been mistaken as to the happening of future events, one of them was entitled to a rescission.

The cancellation awarded , could not properly have been based on the éláimed failure to make the improvements in the time and manner specified in the written contract, because, in the provision just quoted, the appel-lee agreed to take care of that contingency in another way, by stopping the payments until compliance, and the bank indorsed its acceptance of the duty thereby imposed upon it. We think the remedy thus contracted for should be held to be exclusive upon that feature. 13 Corpus Juris, p. 696; Goss v. Northern Pacific, 50 Wash. 236, 96 P. 1078; Oltmanns Bros. v. Poland (Tex. Civ. App.) 142 S. W. 654.

While under these conclusions the ap-pellee was not in the circumstances entitled to a rescission of the contract of sale, it does not follow that he was without remedy for the wrongs charged; indeed, his alternative action for damages for alleged breach of contract might have furnished one.

For the errors indicated, the judgment has been reversed and the cause remanded for another trial.

Reversed and remanded.


text:
    CITY OF GALVESTON v. AMERICAN NAT. INS. CO.
    (Nos. 9185, 9186.)
    Court of Civil Appeals of Texas. Galveston.
    Feb. 13, 1929.
    Rehearing Denied March 7, 1929.
    Bryan F. Williams and P. A. Drouilhet, both of Galveston, for appellant.
    McDonald & Wayman and II. E. Kleinecke, Jr., all of Galveston, for appellee.
   GRAVES, J.

These two causes are disposed of together, both .being suits brought by the insurance company to enjoin the city of Galveston from seeking the collection of certain sums alleged to have been illegally assessed against its personal property as taxes for the years 1925 to 1927, inclusive, No. 91S5 involving those claimed for 1925 and 1926, No. 9186 those for 1927; the city answered in each ease with a general demurrer and general denial, adding in No. 9185 a cross-action for the recovery of the then unpaid portion of the assessments made by it for years therein involved, 1925 and 1926. The trials were before the court without a jury, and, no preliminary writs being sought or issued, resulted in judgments enjoining the city from enforcing the assessments complained of as well as from recovering upon the cross-action referred to, but denying the insurance company any recovery for over-payments it claimed to have made in 1925 by mistake.

The city appeals in both instances, insisting here, as it did below, upon its asserted right to enforce the assessments it made for all three years, while the insurance company, which is a domestic one incorporated under the laws of Texas, having concluded that the Claimed overpayment for 1925 was not recoverable because voluntarily made, contends that the judgments were substantially correct and should be affirmed.

The several assessments made by the city and against which the bill for injunction inveighed were: For 1925, $15,034.03; for 1926, $15,314.67; and for 1927, $8,111.94. Of these totals, the appellee had paid $10,926.90 on the $15,034.03 and $6,903.62 on the $15,314.07, so claimed, respectively, for 1925 and 1926, under an agreement between the parties that such credits should not affect the rights of either as to the resulting balance in either instance, thus leaving in dispute between them only the remaining amounts of $4,107.13 for 1925 and $8,411.05 for 1926; for 1927, the entire assessment was challenged, under the ap-pellee’s averment that it would have owed nothing for that year, had the deductions to which it was entitled in the process of assessment been made.

This statement from appellant’s brief as to how the appellee’s renditions and its own subsequent assessments of the same property, the differences between which gave rise to this litigation, were severally arrived at — being, as we think, substantially accurate — is quoted at this point as aiding in the statement of what the appeal involves:

“Both the appellee in making its renditions and appellant in making its assessments in question acted upon statements prepared by appellee showing the nature and amount of its assets on the taxing dates for each of the three years involved, as well as the total amount of its reserves and the value of its real estate as to which appellee furnished statements showing the value placed upon it in the statement of the total assets, as well as the values at which it had been assessed for taxation by the various authorities within whose jurisdiction it was located.
“In seeking to determine the amounts of the assessments which should be made, both appellee and appellant sought to apply the statutory provision which was in force on the taxing dates of each of the years, and which now appears as article 4754, R. S. 1925, reading as follows: ‘Insurance companies incorporated under the laws of this State shall hereafter be required to render for state, county and municipal taxation all of their real estate as other real estate is rendered. All personal property of such insurance companies shall be valued as other property is valued for assessment in this state in the following'manner: From the total valuation of its assets shall be deducted the reserve being the amount of the debts of insurance companies by reason of their outstanding policies in gross, and from the remainder shall be deducted the assessed value of all real estate owned by the eompaHy and the remainder shall be the assessed taxable value of its personal property. Plome insurance companies shall' not bo required to pay any occupation or gross receipt tax.’
“It was undisputed that for all the years involved the taxing authorities of the appellant city had consciously and deliberately assessed all property at 75 per cent, of what was considered to be its true value. And in making its rendition appellee rendered separately such of its real estate as was subject to taxation ,by the city, and then, to arrive at what it considered and contended to be the proper assessments on its personalty, deducted from its total assets an amount to cover tax-exempt federal bonds, a further amount to cover its reserves, and an amount equal to the total value of all real estate owned by it as valued at what was called its ‘book value’ — that is, the value at which it had been carried into the lists of assets. 75 per cent, of the remainders thus arrived at was contended by appellee to be the amounts at which its personal property should be assessed.
“Appellant, on the other hand, made the assessments complained of — that is, those for 1925 and 1926 — by deducting from the total assets all of the deductions as claimed by ap-pellee, excepting that covering real estate, as to which appellant deducted the total of the values at which it was shown various parcels of real estate had been assessed by the different taxing authorities in whose jurisdiction it lay. And 75 per cent, of the remainders thus arrived at were taken as the proper amounts for which the assessments should be and were made. Thus the differencfe in the amounts of the assessments made, and those which appellee claimed in its renditions, arise alone from the acts of appellant in deducting each year only the ‘assessed value’ of appellee’s realty, rather than the ‘book value’ or value at which that realty was carried on appellee’s books as assets.
“The question, then, which is presented as to the validity of the assessments for both the years 1925 and 1926, is simply the one as to whether, considering the adopted policy of appellant of assessing all property at 75 per cent, of its value, the assessments made against appellee were illegal to the extent that the latter was allowed a deduction of only an amount equal to the total values which had been placed upon its real property for the purposes of taxation by various governmental authorities — some of such realty being located in Galveston and the rest of it being scattered throughout the state of Texas and other states, and its total assessed value being considerably ,less than the figures at which it was carried in the lists of assets by the appellee company.”

Its additional statement, as affecting 1927 only, should also be quoted, as follows:

“We think it sufficient at this point to say of that assessment: That the allegations show that it was arrived at by deducting from the total assets of the company, exclusive of tax-exempt securities, only the legal reserve amounting to $21,327,229 and a figure of $732,-139i denominated assessed value of real estate, and assessing 75 per cent, of the re‘mainder as personal property subject to tax. And it is in the failure to allow, in addition to this legal reserve, the deduction of the other items of indebtedness claimed by appel-lee to be owing to it at that time, aggregating $1,716,987, and the deduction of the lesser assessed value of the real estate, instead of the full value thereof, that the invalidity of the assessment for 1927 is claimed to lie.”

The appellee also, though by somewhat different manner of statement, arrives at the same general terminus; so that, under the concededly undisputed facts, these situations result:

(1) While all the reserves listed by the ap-pellee in its rendition for those two years were deducted, still, as concretely looked at, the balances of $4,107.13 and $8,411.05, claimed by the city for 1925 and 1926, respectively, simply represent the taxes, at the $2.13 and $2.31 rates levied, on the difference for each of the two years between the book value and the assessed value of the insurance company’s real estate as an entirety; if such difference was not properly taxable as personalty under the quoted statute and appellant’s fixed policy of taxing only 75 per cent, of the-true value of all property, whether real or personal, the company owed no part of either item.
(2) None of the reserves so listed by ap-pellee for 1927, other than its stated legal reserve of $21,327,229, were allowed for that year; - had either its remaining $1,716,980 listed as such been deducted, or had the full value of its then held real estate instead of only the assessed value thereof been deducted, it would have owed no taxes op personalty for that year.

We agree with the learned trial court that the difference between the book value and assessed value of the real estate was not taxable in the circumstances, and that in all three instances the former instead of the latter should have been deducted in making the assessments. .

The only real estate appellee owned in Galveston during the three years was its home office building, the book and assessment values of which were: For 1925 and 1926 each, $835,017.61 and $502,556; for 1927, $700,466.-56 and $537,556 — the assessment values in each instance being the stipulated 75 per cent, of its true value that the city had separately collected taxes upon it at.

Outside of Galveston — that is, elsewhere in Texas and in two other states — the company owned over the same period real estate, for 1925, of the book value of $252,795 — assessed value where taxed of $269,455, for'1926, of the book value of $407,871 — assessed value where taxed $54,847, and for 1927, of the book value of $502,029.13 — assessed value where taxed $194,583.

We quote with approval so much of appel-lee’s argument on this subject:

“It is necessary that the real estate in the territorial limits of the city be considered separately from that in other states and places in Texas. It is clear that the city cannot -tax real or tangible personal property located outside the city. To do so would not only violate the Texas Constitution (section 11 of article 8), requiring property to be assessed in the county where situated, but wTould, under express holdings of the United States Supreme Court, run counter to the due-process clause of the Federal Constitution. Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 26 S. Ct. 36, 50 L. Ed. 150, 4 Ann. Cas. 493. Able counsel for the city will not contend that the city can directly tax real estate located outside its territorial limits. But has it not indirectly done so ? The facts are that in valuing the personal property for the year 1926 there was added $253,024, which is the difference between the true and assessed values of the property located out of the city, and, in valuing the personal property for the year 1927, there was added $307,-446, which is the difference between the true and assessed values of the property located out of the city. It is true there is no direct tax assessed against these amounts as real estate, but they were added to the value of the personal property and used as a basis for calculating and determining the amount of tax thereon. The real effect is that a tax under the guise of personal property is assessed on the difference between the true and assessed value of this property outside the city. The contention of the city is that it can take into account the difference between the true and assessed value of outside real estate, because the city has the right to consider that a part of the reserves are invested in the outside real estate to the extent that it is untaxed. Appellee claims that this outside real estate cannot be considered for any purpose’; that it must be eliminated along with United States bonds. Both are tax-free, and neither can be considered.
“The Supreme Court of the United States in two different cases, in effect, decided the question: Frick v. Pennsylvania, 268 U. S. 473, 45 S. Ct. 603, 69 L. Ed. 1058, 42 A. L. R. 316; National Life Ins. Co. v. U. S., 277 U. S. 508, 48 S. Ct. 591, 72 L. Ed. 968.
“These cases, and especially the Frick Case, establish the proposition not only that the city cannot, directly or indirectly, tax prop>-erty beyond its territorial limits or that is free from taxation, but cannot include the value of such property as a basis for computing or measuring the tax in respect to the property within its power and jurisdiction. The city can no more take into consideration real estate in New Mexico and Oklahoma than it can United States bonds. Neither can enter into the computation in determining what property can be taxed, or the basis for computing the tax on property within its power. The United States Constitution, under the many cases cited in the Frick Case, effectively eliminates the outside real estate from consideration. Both Commissions of Appeals have expressly held that United States bonds cannot be taken into consideration. City of Waco v. Texas Life Ins. Co. (Tex. Com. App.) 248 S. W. 315; City of Waco v. Amicable Life Ins. Co. (Tex. Com. App.) 248 S. W. 332. In the Texas Life Ins. Co. Case, it was said that they should not be taken into account, whether they were in the reserve or out of the reserve. A like holding was made in the Amicable Life Ins. Co. Case. By the same token, outside real estate cannot be considered, because it is clear that the city has no more right to consider real estate outside its jurisdiction than it has to consider United States bonds. The reason in the one case is the reason in the other.
“We now come to consider that part of the real estate located in the city of Galveston. Much that has been said has application to that. It is agreed that the real estate in the city was separately assessed, and the taxes paid thereon for each year at 75 per cent, of its true value.
“The difficulties in the case at bar have arisen because the city failed to apply the statute in keeping with the construction placed on it in City of Waco v. Texas Life Ins. Co., and City of Waco v. Amicable Life Ins. Co., supra. The city has used as the basis for assessment the amount of assets shown in the small, condensed financial statements published by the, company on the first of each year. This statement of assets includes United States bonds, real estate outside of Galveston, and, of course, the book value of the home office building. While these statements reflect the value of the company’s assets according to approved accounting methods, they should not be used as the basis for a determination of either the value or the items of assets to be taxed. * * *

“The use of this financial statement has also caused the outside real estate to be taken into account, with the result that the difference between the true and assessed value was taxed as personal property. In other words, the city, instead of listing and valuing the assets as is done in ordinary renditions, substituted, or used, the annual statement in which was included assets not required to be listed. It is apparent from arguments and assumptions in ai>pellant’s brief that the city contends that, in arriving at the ‘total valuation’ required to be made, all assets should be included, whatever they are and wherever located. It is assumed, if not argued, that this is the ‘total valuation’ that should be used before making the deductions the statute provides shall be made ‘in the following manner.’ There might be some basis for this argument, if the Commission of Appeals had not held otherwise. Able counsel for the city has not cited or referred to City of Waco v. Texas Life Insurance Co. That case, read in connection with the Amicable Life Insurance Company Case prescribes the method used. Both Commissions held that the rendition statutes, showing what property is to be listed and how it is to be valued, should be resorted to; not the small, condensed financial statements of the company. In the Amicable Life Insurance Company Case the court held that United States bonds should be eliminated from consideration, because subdivision 37 of R. S. 7162 provides that the list shall contain ‘amount and value of bonds and stocks other than United States bonds.’ It was put this way in the opinion: ‘When we turn to our statutes governing the assessment of personal property, we find that owners are required to list their property with the assessor under various headings or items. R. S. art. 7518.’ This article now is 7162. As we construe the opinion, this is a clear holding that the property should be listed as required by statute. If that is the method, then condensed financial statements of the eompány should not be used. The other Commission of Appeals, in City of Waco v. Texas Life Ins. Co., not only made the same holding, but went farther and clarified that part of the statute which tends to lend color to the thought that two different values should be put on the real estate for the purpose of valuing the personal property. The court, after quoting that portion of the statute requiring all of the personal property of such insurance companies shall be valued as other property is valued for assessment in this state in the following maimer, said:

“ ‘Then follows the process prescribed for arriving at the taxable value, as shown in the statute quoted. But there can be no “total valuation of its assets” until the personal property shall have been valued. The value of that property cannot be arrived at by the process prescribed after the words “in the following manner.” This is true because its value is an element in the “total valuation.” Therefore, the personal property must be valued before the process following the words “in the following manner,” can begin. In making that valuation the statute ■ says it “shall be valued as other property is valued for assessment in this state.” “Valued as other property is valued for assessment” can mean, in this statute, nothing more nor less than valued as the property of other persons is valued for assessment, and the whole expression can mean nothing but “all the personal property of such insurance companies shall be valued as the property of other persons is valued for assessment in this state.” Property of other persons is “valued for assessment in this state,” not by valuing their property, irrespective of its exempt or nontaxable character, but is valued by placing a valuation upon all property except the exempt and nontaxable property, and by eliminating all such property from such valuation. So, in order to value the personal property of insurance companies as other property, or as-property of other persons is valued for assessment, it is necessary that exempt and nontaxable personal property of insurance companies shall not be valued at all for tax purposes. Then it is proper for insurance companies and assessors, in valuing its personal property for assessment to leave out United States bonds, because they are nontaxable.’ It is thus made clear that the real estate is to be valued separately from the personal property. R..S. art. 7162 designates what and under what headings property shall be listed for taxation. * ⅜ ⅜
“It is obvious that if these decisions had been followed, appellee’s home office building should have been listed and valued at 75 per cent, of its true value. Its United States bonds would have been eliminated. And certainly a taxpayer in listing and valuing personal property does not include in, and as part of, that value any portion of his real estate, and especially that in other states or outside the city. Neither would he list any such item as the difference between assessed and market value of real estate. There is no subdivision of article 7162, or any other statute, that contemplates the listing of such an item. Nowhere does any statute in respect to taxation indicate that two different values of real estate are to be used. One value and one listing are all that is required. If two values are used, clearly the real estate is not rendered as other real estate is rendered. And if there is included in the listing of the personalty any such item as the difference between true and assessed value of realty, then clearly personal property is not valued as other property is valued.
“In the Amicable Life Ins. Co. Case the court said: ‘We think that the above-quoted language of article 4764 to the effect that the personal property shall be valued as other property for assessment in this state has reference not only to the method of fixing the value, but also to the property requires to he listes for taxation.’ * * * If all other taxpayers were assessed at full value, appel-lee could not complain. Since it uses one value in dealing with other people’s property, it cannot lawfully use two different values in assessing appellee. The statute, by requiring real estate to be rendered as other real estate, effectively places the obligation and duty on the city to treat an insurance company just like any other taxpayer in valuing its real estate, and requires this value thus arrived at to be of the items that go to make the ‘total valuation’ the statute requires. * ⅜ *
“The valuation of the property is a separate and distinct thing from making the deductions. The value must be determined before the deductions can be made. The statute requires both kinds of property to be valued as other property. It is clear that equality and uniformity are not accorded to appellee, if there is added to the value of its personal property a part of the value of its real estate. To do this is not to value its property as other property is valued. The effect is to make the company render 75 per cent, of the value of the real estate, and then be assessed in addition, on 75 per cent, of the difference between the true and assessed value. The result is that the real estate is taxed at 93.75 per cent, of its true value, 75 per cent, as real estate and 75 per cent, of the remainder under the guise of personalty. This is not equal and uniform taxation.
“Appellee does not claim it has been denied equality and uniformity in the sense discussed in appellant’s brief. No comparison in ultimate results can be made between a life insurance company and an individual taxpayer, because the latter does not have liabilities comparable to the reserve. What appellee urges is that, if the statute means what it certainly says, namely, that an insurance company’s real and personal property shall be assessed and valued as like property of other taxpayers, the city'has denied to it equality and uniformity. Clearly this is so, because its real estate is taxed at 03.75 per cent, of its value, whether it is in or outside of Galveston.”

These conclusions require an affirmance of the judgments, without reference to the'question elaborately discussed in the briefs as to whether or not the appellee was entitled to the deduction for 1927 of all or any part of the claimed $1,716,987 pver its admittedly deductible legal reserve of $21,327,229, considered either as reserve or as ordinary debts, which is not determined because regarded as unnecessary to the decision.

Affirmed.


author: HICKMAN, C. J.

text:
    HARVEY et al. v. CITY OF SEYMOUR.
    (No. 489.)
    Court of Civil Appeals of Texas. Eastland.
    March 1, 1929.
    Dickson & Dickson, of Seymour, for appellants.
    Joe A. Wheat, of Seymour, and Oarrigan, Britain, Morgan & King, of Wichita Falls, for appellee.
   HICKMAN, C. J.

Appellee, the city of Seymour, filed suit in the court below against appellants to enjoin them from erecting, constructing, and operating a cotton gin on the east one-half of block 4, original town of Seymour. The injunction was sought on two different grounds: First', that such cotton gin would be a nuisance; and second, that the land upon which it was alleged appellants were preparing to erect a gin was within a restricted area in the city of Seymour within which the ordinance of such city forbade the erection and operation of a cotton gin. The trial court sustained a special exception to that portion of the city’s petition in which an injunction was sought on the ground that the contemplated cotton gin would be a nuisance. No cross-assignment is before us complaining of this action of the trial court, and it need not, therefore, be further noticed. After a hearing on the merits, judgment was entered in favor of the city, perpetually enjoining appellants from erecting, constructing, and operating a gin on said property. The injunction was granted upon that portion of appel-lee’s petition which alleged and relied upon an ordinance prohibiting the erection and operation of certain industrial plants within the territory therein defined. The appeal is from that final judgment.

Upon the trial of the ease, no witnesses were offered; the only evidence introduced being documentary. The city offered its Ordinance No. 92, and also an ordinance enacted after the institution of the suit, known as Ordinance No. 84. We shall have occasion in this opinion to consider only Ordinance No. 92, which was enacted on May 11, 1925, and which provided, among other things, that it should thereafter be unlawful for any person, etc., to erect, construct, build, own, or operate any cotton gin, elevator, textile mill, or slaughterhouse within the limits of a certain defined section of the city, which was described in the ordinance by certain streets as boundaries. The ordinance, in section 2, contained this language:

“It being determined by the City Council that the erection of any such building as above mentioned are injurious to the health and peaceful occupation of the inhabitants within such section, and there not being in said section any of the kind of said buildings above referred to.”

It is admitted that the land upon which appellants contemplated the erection of the cotton gin was included within the restricted area as defined and bounded in the ordinance.

One of the defenses pleaded by the appellants was that the ordinance constituted an unreasonable restraint upon their rights to the exercise and enjoyment of their property, and thíR same was discriminatory against them and in favor of their competitors, in that other gins were being operated on property adjacent to their property and to which more residences were adjacent than to appellants’ property. This defense will be noticed later.

Another defense was based upon the facts that on April 25, 192T, one of the appellants went before the city council of the city of Seymour at a regular session and advised the council fully of an option contract appellants had to purchase the lot of land above mentioned, provided the city would grant permission for the erection of the gin on the lots and the persons residing in that portion of the city would likewise agree to its erection; that thereupon the following proceedings were had:

“Seymour, Texas, April 25th, 1927.
“Mr. I-I. R. McDavid and Mr. W. F. I-Iooser met with the Council in reference to building a gin on the East ⅛ of Blk. No. 4 of the original addition to the city of Seymour. Motion made and seconded that gin ordinance be amended to exclude the East ½ of Blk. No. 4, original addition to the city of Seymour, Texas, in gin zone. Motion carried with three votes for and one against.”

On the following morning certain property owners in the vicinity of this lot signed an agreement for the erection of the gin. Thereafter a protest in writing, signed by other property owners and residents, was presented to the city council. The matter came up for consideration before the council on May 9th, which was then disposed of by a motion to postpone action on the matter until the next regular meeting night. At the next regular meeting on May 23, 1927, an ordinance was read to the council and put upon its third reading and upon votp failed to pass by a vote of two in the affirmative and three in the negative. The ordinance was declared rejected. This ordinance undertook to accomplish in a legal manner what was intended to be accomplished in the motion of April 25th above referred to, namely, to exclude appellant’s prospective gin sight from the restricted area described in Ordinance No. 92. After the passage of the motion of April 25th, and the signing by certain citizens of their written consent to the erection of the gin, the appellants exercised their option to purchase the property, and actually paid a valuable consideration therefor, and moved certain building materials thereon.

This statement of facts discloses that appellants have probably been injured on account of their reliance upon the action of the city council on April 25th in passing the motion above mentioned, but their injury is not one for which the law provides any relief. The motion of April 25, 1927, was not an ordinance.

Article 1012, R. S. 1925, provides that: “The style of all ordinances shall be ‘Be it ordained by the City Council of the city of-.’ ” This provision of the statute is mandatory, and an ordinance not containing such enacting clause is void. Castleberry v. Coffee (Tex. Com. App.) 272 S. W. 767; Galveston, H. & S. A. R. Co. v. Harris (Tex. Civ. App.) 36 S. W. 776.

The motion in the instant case was not intended as an ordinance, does not appear to have been in writing, or to have been read three times, but was merely an ordinary motion orally made. Such motion did not have the effect of amending or in anywise affecting Ordinance No. 92 theretofore enacted. Appellants cannot, therefore, rely upon this mo-tión, but are in the attitude of having undertaken the erection of a cotton gin in a zone in which its erection was prohibited by ordinance. American Construction Co. v. Seelig, 104 Tex. 16, 133 S. W. 429; American Construction Co. v. Caswell (Tex. Civ. App.) 141 S. W. 1013; American Construction Co. v. Davis (Tex. Civ. App.) 141 S. W. 1019.

The only other defense which we need notice is the one above suggested, namely that Ordinance No. 92 was void. We think it is well established that, unless by the very language itself, as in the case of Spann v. City of Dallas, 111 Tex. 350, 235 S. W. 513, 19 A. L. R. 1387, an ordinance is unreasonable, the courts must presume, in the absence of evidence to the contrary, that the ordinance is reasonable, and that it was enacted by the legislative body of the city in the exercise of its sound discretion. The burden is on one attacking an ordinance on the ground of its unreasonableness both to allege and prove the facts which make it so. City of Austin v. Austin City Cemetery Ass’n, 87 Tex. 330, 28 S. W. 528, 47 Am. St. Rep. 114; Hunger Oil & Cotton Co. v. City of Groesbeck (Tex. Civ. App.) 194 S. W. 1121; Scruggs v. Wheeler (Tex. Civ. App.) 4 S.W.(2d) 616.

On the trial of this ease, appellants offered no witnesses. Their sworn answer alleged the unreasonableness of the ordinance, and gave some reasons for the conclusion that same was unreasonable and discriminatory. But the trial court found against their conclusions. There is nothing in the record before us which would warrant or justify us in setting aside and refusing to give effect to this finding of the trial court. We think it unquestionably within the authority of a city council to designate an area within the city within which cotton gins and like industries shall not be operated. City of Austin v. Austin City Cemetery Ass’n, 87 Tex. 330, 28 S. W. 528, 47 Am. St. Rep. 114; Scruggs v. Wheeler (Tex. Civ. App.) 4 S.W.(2d) 616.

In the absence of any proof to the contrary, and in support of the findings of the trial court, we must presume that the ordinance was reasonable and was not arbitrarily enacted as a discrimination against any person.

We do not believe the record discloses any reversible error committed in the court below, and its judgment will therefore be affirmed.


author: LANE, J.

text:
    GULF, C. & S. F. RY. CO. v. TERRELL BROS.
    (No. 9227.)

    Court of Civil Appeals of Texas. Galveston.
    Jan. 9, 1929.
    Rehearing Denied Feb. 14, 1929.
    F. J. & C. T. Duff, of Beaumont, H. L. Lewis, of Navasota, and Thompson, Knight, Baker & Harris and Geo. S. Wright, all of Dallas, for appellant.
    ' S. W. Dean, of Navasota (J. B. Leigh, of 'Navasota, on motion for rehearing), for ap-pellees.

      Writ of error dismissed.

   LANE, J.

This suit was brought by E. H. Terrell and Mrs. Etta Terrell, who were transacting business under the name of “Terrell Brothers,” against the Gulf, Colorado & Santa Fé Railway Company, to recover a judgment for the sum of $762.45, the value of eight bales of cotton which the plaintiffs alleged were destroyed by fire after the same had been accepted by the defendant for transportation as a carrier.

The defendant denied generally, and specially pleaded other matters of fact for the purpose of showing that at the time the cotton was destroyed it had not been accepted by it for transportation and that the same had not been tendered to it for transportation ; that shipping instructions had never been given to it; and that at the time said cotton was destroyed the relation of defendant as a carrier had not begun. Other defensive matters were set up, but it is not necessary to repeat them here.

The cause was submitted to the court without a jury upon the following agreed statement of facts:

“1. E. I-I. Terrell and Mrs. Etta Terrell, composing the copartnership of Terrell Brothers, and E. H. Terrell and W. I-I. Hendrix composing the firm of Terrell & Hendrix, are now and at tlie time of the transaction hereinafter referred to, were cotton merchants engaged in business at Allenfarm, Brazos County, Texas.
“2. The Gulf, Colorado & Santa Fé Railway Company is a railway and transportation company and at the time of the transaction hereinafter referred to, operated the line of railway running from Somerville to Beaumont, Texas, and through Allenfarm, Texas, transporting passengers and freight for hire.
“3. That Allenfarm, Texas, is a non-agency station on a line of railway of the defendant, Gulf, Colorado & Santa Fé Railway Company, and at the time of the transaction hereinafter referred to, Allenfarm, Texas, was a non-agency station at which time and place the defendant did not maintain an agent.
“4. That it was the universal, general and notorious custom at the time of the transactions hereinafter referred to at Allenfarm, Texas; that when a shipper desired to ship cotton from Allenfarm, Texas, over the lines of the Gulf, Colorado & Santa Fé Railway Company, that such shipper would flag the local freight train south bound and advise the conductor of said local freight train that such shipper desired a car or cars to be set out at Allenfarm, Texas, for the purpose of placing therein and shipping therein cotton; that at the time of such notice to the conductor of such local train, if the cotton was not to be shipped until the next south bound local passed through Allenfarm, Texas, the shipper would advise the conductor that the cotton would be loaded into the car and ready for shipment at the time the next south bound local passed through Allenfarm. That after such request of the shipper for placing the cars, the conductor receiving such request would place the number of cars required at Allenfarm, Texas; the shipper would then load the cotton onto the platform of the Gulf, Colorado & Santa Fé Railway Company at Allenfarm, Texas, if he had not previously loaded the cotton on the platform and from the platform would load the cotton into the car or cars that had been previously placed at Allenfarm, Texas, by the conductor, the shipper would then prepare a hill of lading on the form of the uniform bill of lading to be used by the Gulf, Colorado & Santa Fé Railway Company, a copy of which is hereto attached and made a part hereof, and on said form of bill of lading, the shipper would fill out the blanks showing the consignee and consignor, the description of the property, giving the numbers, weight, and marks of the hales of cotton and other information called for in the blanks of the bill of lading. The shipper would keep this hill 'of lading in his possession until the next local south bound freight train of the Gulf, Colorado & Santa Fé Railway Company passed through Allen-farm, Texas, at which time he would present such bill of lading, which had been prepared by him, to the conductor of said south bound local train and said conductor would seal the car or cars and sign the bill of lading, pick up said car or cars, attach it to his train and transport it to Navasota, the next agency station.
“5. At the time of the transactions, hereinafter referred to said universal and notorious custom above shown was well known to the plaintiffs and the defendant, and at that time the Gulf, Colorado & Santa Fé Railway Company did not and would not pick up any cotton at Allenfarm, Texas, except by its south bound local trains bound for Navasota and would only place cars at Allenfarm, Texas, by such train, and the said railway ran local trains through Allenfarm, Texas, to Nava-sota, Texas, only on Mondays, Wednesdays, and Fridays, and made return trips on Tuesdays, Thursdays, and Saturdays.
“6. That on Friday, November 20, 1925, J. P. Terrell, representing the plaintiffs, flagged the south bound freight of the Gulf, Colorado & Santa Fé Railway Company at Allenfarm, Texas, and advised Mr. Evans, the conductor of such train, that he desired a car for cotton seed and a car for cotton placed at Allen-farm, Texas, for shipment of cotton and cotton seed, and that the cotton would be loaded into said car and ready for shipment at the time of the arrival of the south bound .local freight train of the Gulf, Colorado & Santa Fé Railway Company, on Monday, November 23, 1925; that the conductor of said south bound train on Friday, November 20th, placed at Allenfarm, Texas, the two cars requested, and thereafter the plaintiffs placed on the platform of the Gulf, Colorado & Santa Fé Railway Company eight bales of cotton belonged to Terrell Brothers and five bales of cotton belonging to Terrell & Hendrix, and transferred said thirteen hales of cotton into said car that had been left by the conductor Evans at Allenfarm, Texas, for said cotton and the loading of said cotton in said car was completed by the said plaintiffs at about five o’clock p. m., November 20, 1925, and that said cotton was loaded for the purpose of shipment.
“7. That each of the plaintiffs prepared a bill of lading on the uniform bill of lading in use by the Gulf, Colorado & Santa Fé Railway Company a copy of which had heretofore been attached, showing the description of the cotton, the destination and the other information called for in the blanks of the said uniform bill of lading for the purpose of delivering the same to the conductor of the south bound local train of the Gulf, Colorado & Santa Fé Railway Company, on November 23, 1925.
“8. That about five o’clock a. m. on Noveni' ber 21, 1925, a fire occurred, of unknown origin, which completely destroyed said thirteen bales of cotton located in said car; that if said fire had not destroyed said thirteen hales of cotton, each of the plaintiffs herein would have, on Monday November 23, 1925, delivered tlieir respective bills of lading, ■which had been prepared by them, to the conductor of the south bound local freight train of the Gulf, Colorado & Santa Fé Railway Company on that ddte, and that said conductor would have signed said bills of lading, sealed said car containing said thirteen bales of cotton, placed it in his said train and carried it with his train to Navasota, Texas.
“9. That the reasonable cash market value of the eight bales of cotton belonging to Terrell Brothers at the time of said fire at Al-lcnfarm, Texas, was Seven Hundred Fifty One and 5Vioo ($751.51) Dollars. That the reasonable cash market value of the five bales of cotton belonging to Terrell & Hendrix at the time of said fire at Allenfarm, Texas, was Five Hundred Three and ^ioo ($503.18) Dollars.
“10. That the Gulf, Colorado & Santa Fé Railway Company had, .on a number of occasions, refused to issue to the plaintiffs herein, bills of lading on other shipments prior to the time that the cotton was picked up by the south bound freight train; that each of the plaintiffs herein were aware of the fact that the Gulf, Colorado & Santa Fé Railway Company would not issue bills of lading until such time.
“11. The bills of lading which had been prepared by the respective plaintiffs for presentation to the conductor of the south bound freight train on November 23,1925, were misplaced or destroyed and cannot at this time be produced.
“12. That during the season of 1925 and prior to November' 20, 1925, the respective plaintiffs had shipped cotton over the Gulf, Colorado & Santa Fé Railway from Allen-farm, Texas, and such shipments had all been made under such custom and had all been made to some consignee in Navasota, Texas. That during the seasons prior to 1925 the respective plaintiffs had made shipment from Allenfarm, Texas, over the Gulf, Colorado & Santa F6 Railway under such custom to consignee at destination other than Navasota, Texas. That the consignee named by the respective plaintiffs in the bills of lading prepared by the respective plaintiffs and which had not been delivered to the defendant at the time of the fire, was A. H. Wilson at Nav-asota, Texas. That the plaintiffs nor anyone on their behalf had any co'mmunication with any representative, agent or employee of the defendant after the conversation between conductor Evans and J. P. Terrell on November 20, 1925.
“13. Allenfarm, Texas, at the .time of the transactions involved herein contained only about twenty-five inhabitants, and at the time of such transactions each of the plaintiffs herein knew that the defendant, Gulf, Colorado & Santa'Fé Railway Company, did not have at Allenfarm, Texas, an agency.”

The bill- of lading attached to the agreement as an exhibit contained the following clause: “Property destined to or taken from a station, wharf or landing at which there is no regularly appointed freight agent shall be entirely at risk of owner after unloaded from cars or vessels or until loaded into cars or vessels, and except in case of carrier’s negligence, when received from or delivered to such stations, ‘wharves, or landings shall be at owner’s risk until the cars are attached to and after they are detached from locomotive or train or until loaded into and after unloaded from vessels.”

Upon the facts so agreed to and submitted, the court rendered judgment in favor of the plaintiffs against the defendant for $751.51, with interest thereon at the rate of 6 per cent, per annum from the 1st day of November, 1925.

The defendant has appealed,

Appellant contends that before liability of a carrier begins as a carrier and insurer there must be a complete delivery to it of a shipment for transportation; that if the shipper must perform some service or do some act to effect complete possession and control to the carrier, such as giving shipping instructions, the liability of the carrier does not attach ; that since the agreed facts show that no complete delivery of the shipment in this case had been made to appellant by procuring a bill of lading containing shipping instructions, nor in any other manner, appel-lees were not entitled to a recovery, and the court erred in rendering judgment for appel-lees and in not rendering judgment for appellant upon its request therefor.

We think the contention of appellant should be sustained. It is a well-established rule of law that a carrier is not liable as an insurer of goods to be shipped until complete delivery thereof is made to it, and in some manner accepted by it for shipment. Gulf, C. & S. F. Ry. Co. v. Anderson (Tex. Com. App.) 246 S. W. 1031; Ft. Worth & Denver C. Ry. Co. v. Tomson (Tex. Civ. App.) 250 S. W. 747; Hutchinson on Carriers, 112, 113; 4 R. C. L. p. 688.

Until shipping directions are given to the carrier, no complete delivery for immediate shipment is made, and in such case the carrier has not become an insurer of such shipment. 10 Corpus Juris, p. 226; Mich. So. & N. I. Ry. Co. v. Shurtz, 7 Mich. 515; Basnight v. Ry. Co., 111 N. C. 592, 16 S. E. 323; Alabama Great So. Ry. Co. v. Mt. Vernon Co., 84 Ala. 173, 4 So. 356.

In 10 Corpus Juris, p. 226, § 311, the following rule is stated: _ “A well-settled general rule, which is hardly more than a repetition of the propositions stated in the preceding section, is that notwithstanding the goods are in the actual custody of the carrier, its liability as such does not attach before shipping directions have been given, and that its liability is that of a warehouseman only (citing cases), and while it would seem that this principle might be rendered inoperative by custom or special contract, the implication that the carrier assumes the duty of immediate transportation and its responsibility of an insurer without knowing to what place and to whom goods are to be shipped must be clear.”

In the Michigan case it is said: “If the company cannot carry them because ignorant of the contemplated destination or, because no destination has been concluded upon by the owner, it would be gross injustice to hold them subject to the extraordinary liabilities of common carriers, while thus awaiting the determination of their owner.”

In the case of Basnight v. Ry. Co., 111 N. C. 592, 16 S. E. 323, it is said: “Treating the loading of the car upon defendant’s track as a delivery to defendant and an acceptance, it was not yet ready for' transportation, for the defendant had not been notified of its readiness, nor to whom it was to be shipped. It was necessary for the defendant -to await further orders before shipment. Where goods are delivered to a common carrier to await further orders from the shipper before shipment, the former, while they are so in his custody, is only liable as warehouseman”— citing cases.

It is not shown by any fact or Circumstance that the loss of the plaintiffs’ cotton was caused by reason of any negligence on the part of appellant; indeed, appellees make no contention that any such negligence was shown, but they rely for a recovery solely upon their contention that their cotton had been completely delivered into the possession of appellant for immediate shipment to A. H. Wilson at Navasota, Tex., and that appellant, had so accepted same. Such contention is based on the fact that all cotton shipped over appellant’s railroad by appellees from their farm during the fall of 1925 up to November 20, 1925, had been made to some consignee in Navasota (not specifically to Wilson).

It is apparent from appellees’ discussion that it is their contention that, although they had prior to the year 1925 made shipments of their cotton over appellant’s road to points other than Navasota, and to . parties other than Wilson, the fact that they had during the season of 1925 shipped only to Navasota was a sufficient instruction to appellant to continue to carry and deliver all future shipments to A. W. Wilson at Navasota.

Under the facts shown, we cannot agree with appellees that they had given appellant shipping instructions. We have examined the authorities cited by appellees, and we find that in all of them the carrier had either accepted the shipment tendered for immediate shipment, after shipping instructions had been received by them, or was under the law .bound to accept the same for shipment. But •in no case has it been held that the carrier had accepted the shipment for immediate transportation, and become an insurer, when shipping instructions had not in some manner been given.

The agreed facts also show that the cotton was placed in the car three days before the car was to be taken up by appellant, without any notice to appellant that it was so placed, and that it was destroyed two days before appellant was to place the car in its train for transportation.

Having reached the conclusion that by the agreed facts it is shown that the plaintiffs’ cotton was not destroyed as the result of any act of negligence on the part of appellant, and that no complete delivery of the same for immediate shipment was made to appellant, we hold that appellant was not liable for its loss. The judgment is therefore reversed, and judgment is here rendered for the appellant.

Reversed and rendered.


text:
    THOMAS et al. v. REA et al.
    (No. 9221.)
    Court of Civil Appeals of Texas. Galveston.
    Jan. 18, 1929.
    Rehearing Denied Feb. 14, 1929.

      J. B. Leigh, of Navasota, for appellants Fu-qua and Baker.
    S. W. Dean and Haynes Shannon, both of Navasota, for appellant Thomas.
    T. P. Buffington, of Anderson, for appellee Rea.
   GRAVES, J.

By bill of interpleader, appellants Fuqua and Baker sued their coappel-Kmt B. C. Thomas and appellee C. F. Rea, alleging that they had, by separate but interdependent contracts with them,' each dated March 19, 1926, undertaken upon the terms therein stipulated to buy the gravel on 282 acres of land in Grimes county at the purchase price per cubic yard of 10 cents to Thomas and 5 cents to Rea, respectively; that 'they then owed the defendants, between them, the sum of $2,500 for gravel that was to be removed during the first year under the contracts — they themselves having already received that sum from Grimes county on a resale of the gravel to it at 25 cents per cubic yard — but could not safely pay the one without laying themselves liable to again pay the other, for the reason that Thomas claimed to own all of the gravel that had been or might be produced from the land, while Rea claimed to own a life estate of one-half thereof. They prayed that Thomas and Rea be required to assert their several rights in and titles to the gravel remaining in the land,, as well as to the $2,500 in proceeds from the sales of it to that date, which sum they deposited in the -registry of the court, asking' also for discharge from further liability to either defendant, for attorney’s ■ fees, costs, etc.

Between the filing of the suit and the trial, Grimes county, which had in the meantime completed its contract with the plaintiffs, paid into the registry of the court $3,308.25, which sum represented the purchase price at 25 cents per cubic yard of all the gravel it had so bought from them, over and above that represented by the $2,500 deposited by the plaintiffs themselves, making $5,808.25 for slightly under a total of 25,000 yards removed.

The defendant O. F. Rea answered by general demurrer, general denial, and, by way of cross-action against the plaintiffs, alleged a breach of their contract with him and a conversion of his property by plaintiffs and Grimes county, praying that the county be made a party, and for judgment against Thomas for the title to one-half of the gravel in controversy, and- against the plaintiffs and Grimes county for One-half of the gravel removed at a value of 25 cents per cubic'yard.

Thomas answered by general and special exceptions, general denial, and, by way of cross-action, alleged breach of his contract with them by plaintiffs, pleaded estoppel as against the defendant C. F. Rea, and prayed judgment against plaintiffs and Grimes county for the total gravel removed at a price of 25 cents per cubic yard.

Grimes county answered, alleging deposit of the purchase price of all of the gravel in controversy used by it in the registry of the court in this cause, and thereupon, by agreement of all parties, the suit was dismissed as to the county.

The case was tried before the court, and, all exceptions of all parties being overruled, judgment was rendered in favor of the defendant Thomas against the plaintiffs for the sum of $2,500, in favor of the defendant O. F. Rea against the plaintiffs for the sum of $1,250, in favor of the defendant C. F. Rea against the defendant B. C. Thomas for the title to an undivided one-half interest in all of the clay and gravel on the land for and during the life of Rea, and in favor of plaintiffs for the balance remaining out of such sum of $5,808.25, after payment of the allowances in favor of the defendants above set out, the balance so remaining being the sum of $2,052.25, all costs being adjusted against defendants Thomas and Rea, each to pay one-half, except Rea was to pay all those incident to bringing Grimes county in.

All parties excepted, appellants protesting against so much of the judgment as awarded any recovery against them in excess of the $2,500 they paid into court, Thomas at the court’s refusal to hold him the owner of all the gravel as against Rea, and entitled to his full contract price therefor * against appellants, and Rea over th'e court’s failure to adjudge him entitled, in addition to the half interest in the gravel and the $1,250 in money given him, to one-half the excess over that sum that had been awarded Thomas, as well as to all costs as against Thomas.

We sustain the contention of appellants, so much of appellee Rea’s as -affects the costs, and recast the disposition made below accordingly; that is, judgment is here rendered reducing the total liability of appellants Fuqua and Baker to the $2,500 they so deposited, vesting in them the balance of the whole sum in court, dividing the $2,500 of it equally between their coappellant Thomas and appellee Rea, and requiring that Thomas pay all costs; the trial court’s, judgment in other respects remaining undisturbed.

These conclusions rest, in the main, upon considerations that may under the evidence be outlined in this way: Thomas at all times, asserted to Fuqua and Baker that he owned the fee-simple title to the entire 282 acres, and in consequence all the gravel within it; upon that representation, coupled with a further one that they did not need an abstract, in January preceding the formal contract of purchase between them of March 19, 1926, appellants procured from him an option to buy all the sand, clay, and gravel on the land at an agreed price of 10 cents per cubic yard, and began prospecting operations on it; thereupon Rea notified them that he claimed a life estate in one-half of all such gravel and clay; appellants then obtained and had abstracts of title to the land examined by their attorney, who reported that Rea did in fact own the life estate he claimed; thereafter, on or about March 17, 1926, but prior to entering into the contract of that date with him, appellants by appointment met Thomas and his attorney in the latter’s office and advised the two of Rea’s claim and of their own attorney’s opinion that it was valid; in such conference Thomas and his attorney both assured appellants that Rea in fact had no title to the gravel, the attorney telling them that their attorney had fallen into error in so concluding to the contrary on account of the fact that an instrument in the abstract he examined had been put in the wrong place, which he had accordingly no doubt overlooked, and that he himself would write a letter to appellants’ attorney calling his attention to such fact, and that it would not only settle Rea's claim but show Thomas to be the sole owner of the gravel involved; induced by these assurances and representations, relying upon them, and believing as the effect thereof that Rea really had no interest, appellants then and there made the contract with Thomas of March 17, 1926, whereby they agreed to buy the gravel from Thomas as the sole owner for 10 cents per cubic yard; but Banquo’s ghost would not down, and Rea’s claim promptly thereafter bobbed up again, appellant’s attorney on its recurrence repeating his conclusion to them that it was sound; they then, on April 28, 1926, dating the agreement back, however, to the same date as the one with Thomas March 17, 1926, made a written contract with Rea, which recited that he claimed to own a life estate in one-half the gravel on the land, and that they would pay him therefor 5 cents per cubic yard — half the price to Thomas for the whole interest — “upon the following terms and conditions: All moneys for the same to be deposited in the Farmers State Bank of Shiro, Texas, until such time as the said Rea shall settle with B. G. Thomas as to which of them owns said one-half (½) interest herein described.”

The learned trial court correctly held, under the undisputed evidence, that appellee Rea did in fact own the life estate in one-half the clay and gravel he had thus all along contended for; hence there was nothing else to do than grant him the recovery awarded him on that basis. This should have carried with it also, however, a judgment against Thomas for his costs, since the latter by his dispute of Rea’s title caused him without justification to lose the costs to appellants Fuqua and Baker. The facts showing Rea’s title were, in brief substance, these: On January 23, 1920, E. A. Edwards conveyed the 282 acres of land to appellee G. F. Rea; Rea on the same day and as a part of the same transaction, though by separate instrument, conveying back to Edwards a one-half interest for life in the gravel and clay on the land, both transfers having gone to record within a few days after that date. On July 8, 1920, Rea conveyed the land back to Edwards, taking.for the deferred purchase money certain vendor’s lien notes secured by vendor’s lien thereon; the deed having been filed for record July 9, 1920. On the same day, July 8, 1920, Edwards made a written contract with Rea, which, however, was not recorded, whereby Rea, as a part of the transaction represented by this contemporaneous recon-veyance of the land to Edwards, reserved an interest for life in one-half the gravel and clay on the land. These instruments were then followed, on July 16, 1920, by a formal conveyance from Edwards to Rea of a life estate of one-half interest in the gravel and clay on the land, which went to record on July 30, 1920, the uncontroverted testimony showing that the two instruments of July 8 and 16 of 1920, respectively, were but parts of one and the same transaction.

In this state of the record title to the land, ■coappellant B. C. Thomas, on August S, 1922, took a transfer from appellee Bea of the vendor’s lien notes Bea had so received from Edwards, which was filed for record November 17, 1922, knowing both actually and constructively before he purchased of these instruments and transactions between Edwards and Bea through which the latter had retained his claimed one-half interest in the clay and gravel, admitting in this trial that both of them had then told him about it. Shortly over two years later, on November 3, 1924, Edwards conveyed the land to Thomas in cancellation of these vendor’s lien notes; the title that went to him being such only as thus went to him through these last-mentioned two transfers.

In these circumstances, appellee Bea never held any lien on the life estate in half the gravel and clay on the land pursuant to the vendor’s Hen notes from Edwards, because, superior to and back of such lien, he had segregated and reserved that interest in the land from the sale the notes stood for, and Thomas, knowing both that fact and of the existence of the papers reflecting it when he first e.ame to purchase the notes and after-wards the Edwards title in satisfaction of them, took with notice of this reservation of interest in Bea and of the fact that neither the lien securing his notes nor the subsequent conveyance from Edwards could attach to or affect it. Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S. W. 296, 29 A. L. R. 607.

Under the facts stated, it is wholly immaterial to any right, of Thomas’ that this life interest in the gravel was not reserved in and spread upon the records along with the very instrument whereby Bea reconveyed the land to Edwards in consideration of the notes, since before he bought he knew it had in fact been a part of that transaction and had long been so shown of record.

Neither was Thomas ’in any position under his contract with them to claim or recover from appellants Fuqua and Baker more than- the stipulated 10 cepts per cubic yard on one-half of the total gravel so shown to have been removed, because he had induced them to enter into it on faith of his assurance that he was the sole owner, whereas the proof showed him to have been mistaken and to-have in fact owned only the half thereof; he was therefore estopped to demand payment for a greater interest than he had. Pomeroy on Equity, § 847; O’Connell v. Duke, 29 Tex. 299, 94 Am. Dec. 282; Watson v. Baker, 71 Tex. 739, 9 S. W. 867; Altgelt v. Gerbic (Tex. Civ. App.) 149 S. W. 233.

We find no lack of evidence supporting the •court’s finding of fact that appellants Fuqua and Baker did not breach their contracts with either their eoappellant Thomas or the ■appellee Bea; furthermore, by virtue of their terms and the cited circumstances under which they were entered into, these undertakings were interdependent, and it would have been inequitable and unjust to require Fuqua and Baker to pay twice for the one thing they had bought thereunder. This court’s judgment will enter, as above specified.

Affirmed in part; reversed and rendered in part.


author: CONNEB, O. J.

text:
    MITCHELL v. CITY NAT. BANK OF WICHITA FALLS.
    (No. 12069.)
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 12, 1929.
    Rehearing Denied Feb. 16, 1929.
    Baymond Myers, of Wichita Falls, for appellant.
    Bullington, Boone, Humphrey & King and John Q. Humphrey, all of Wichita Falls, for appellee City Nat. Bank.
    Bonner, Bonner & Fryer, of Wichita Falls, for appellee Jones.
   CONNEB, O. J.

As we understand the record in this ease, the material- question presented is a simple one. Briefly stated, ap-pellee instituted suit against M. D. May, E. W. Jones, and W. M. Mitchell on. a note, alleging that W. M. Mitchell and E. W. Jones was a partnership and that M. L. May, W. M. Mitchell, and;E. W. Jones constituted another partnership; that the partnership of Mitchell, Jones & May, by virtue of operations in the viSinity of Cross Plains, Tex., became in need of $15,000, for which the three partners were jointly and severally liable; that M. L. May applied to plaintiff for a loan of $5,000 to match $5,000 advanced by Mitchell and Jones, respectively; that said loan was made upon the credit of Mitchell & Jones, and a note therefor was executed, the firm name of Mitchell & Jones being placed on said note beneath the signature of M. L. May by E.' W. Jones.

There were other allegations not deemed necessary to our conclusion. The defendants M. L. May and E. W. Jones make no complaint of the judgment below, and the state of their pleadings need not be referred to. Appellant Mitchell, however, by a verified answer, pleaded, among other things not necessary to notice, that he had not executed the note or authorized'its, execution. Upon the conclusion of the evidence the court gave á peremptory instruction to the jury, which answered as directed, and judgment in accord therewith was entered against M. L. May, E. W. Jones, and W. M. Mitchell, with right of recovery in favor of E. W. Jones and W. M. Mitchell o.ver against M. L. May, and Mitchell has appealed.

The undisputed evidence is to the legal effect that W. M. Mitchell and E. W. Jones were partners engaged in leasing and developing oil lands in the vicinity of Wichita Falls, Tex. M. L. May was engaged in a like business in the vicinity of Cross Plains, in Callahan county, Tex. " The parties named formed a partnership designated as the partnership of Mitchell, Jones & May, for the purpose of leasing, drilling, and securing the production of minerals in the Cross Plains section. During the prosecution of the business of the partnership last named, it became necessary for the firm of Mitchell, Jonejs & May to secure additional funds. By agreement between the parties, Mitchell agreed to advance $5,000, and Jones and May likewise severally so agreed. Mitchell and Jones secured and deposited in the plaintiff bank the $10,000 agreed to be advanced by them. May sought to borrow the $5,000 that he agreed to advance from the plaintiff bank, but the bank declined to advance the money upon his signature alone, but did so on the note of May signed by the firm name of Mitchell & Jones, affixed by Jones. Thereupon the bank advanced the money, which was deposited to the credit of'Mitchell, Jones & May, and the evidence shows, we think, without any material variation or conflict, that the $15,000 so deposited to the credit of Mitchell, Jones & May was expended in the prosecution of the business of that firm, in the way of paying current and other indebtedness and in the prosecution of their business as drillers, etc.

Such being the state of the evidence, we are of opinion that the court properly gave the peremptory instruction assigned as error here. The case here is not one in which a partnership, like that of Mitchell & Jones, undertook to act as an accommodation surety for an individual, as was May’s. We therefore shall not enter into a discussion of the power of a partner, such as Jones, to bind the other members of his firm by signing the firm name to such a negotiable instrument, for it is familiar law that each member of a partnership has, as agent, power to bind all members of his firm for an indebtedness incurred in the prosecution of his firm's business; and this is true even though members other than the acting one is without knowledge of the obligatory act.

In Modern Law of Partnership, by Rowley, vol. 1, § 421, it is said: “The right to incur firm obligations would be of little .value if the power of the partner incurring the debt to sign the firm name to the instrument evidencing the obligation were denied. Hence the rule has grown up that a partner may sign the firm name to such contracts as he may be authorized to enter into and the firm will be bound thereby.”

The author cites numerous cases in support of the text thus quoted, such as George v. Tate, 102 U. S. 564, 26 L. Ed. 232, and cases from Maine, Massachusetts, and other jurisdictions. The same author, in section 425 says: “Associated very closely with the right of a member of a commerical partnership to borrow money in the 'firm name, is his right to exeéute negotiable paper for a partnership indebtedness. The giving of negotiable paper is as much an incident to the business of such a partnership as is the power to borrow money and in a general way the same rules apply.”

In 20 Ruling Case Law, par. 113, p. 903, it is said: “If one partner has authority to bind the firm for borrowed money, and it is loaned on his signature, to the credit and for the benefit of the partnership, the firm may be held liable therefor, although he signs his individual name to the instrument securing the loan.”

Again on page 903, par. 112, the author says: “But the fact that the payee of a note given by one partner in the firm name believed that the borrowed money for which it was given was to be applied to an individual purpose will not prevent the note from binding the firm, if the money borrowed was actually used for a partnership.”

In the case of Cannon v. Wing, 150 Mo.App. 12, 129 S. W. 718, it is held that where-the manager of a trading or commercial partnership borrows money for use in its business, the partnership and each of its members are liable.

See, also, to the same general effect, the cases of Commerce Trust Co. v. McMechen (Mo.App.) 220 S. W. 1019; Harris County v. Donaldson, 20 Tex. Civ. App. 9, 48 S. W. 791; Barton v. Ash & Co. (Tex. Civ. App.) 154 S. W. 608; Trust Co. v. Tindle (Mo. App.) 194 S. W. 1066; McLaughlin v. Mulloy, 14 Utah, 490, 47 P. 1031, by the Supreme Court of Utah. The case last cited seems quite similar to the one before us. In that case a firm, Kidder & Bro., became a constituent member of the firm of Blasón, Kidder & Co.; both firms were in the same line of business. The new firm manufactured and furnished lumber, in which Kidder & Bro. as a firm were dealing. The purpose was to make profits for Mason, Kidder & Co. which would inure to the use and benefit of Kidder & Bro. In the new copartnership, Kidder & Bro. constituted one partner and Blasón was the other. The copartnership, so formed in the pursuit of its business became indebted in California and elsewhere, and for the purpose of paying these debts it negotiated a loan of $8,000 from the Park City Bank. The note was extended for $8,000, and Geo. E. Kidder, without the knowledge of Bussell W. Kidder, in good faith and believing it to be for the best interest of Kidder & Bro. and that he had the legal right to do so, signed the name of Kidder & Bro. thereto as surety of the firm of Blasón, Kidder & Co., and Blasón also executed the note as such security. $5,000 of the money obtained on this paper was paid on the debts of Blasón, Kidder & Co. by its manager, Geo. C. Kidder, and the remaining $3,000 was credited to the account of the firm of Blasón, Kidder & Co. and was drawn out on checks of that firm in payment of its debts. On January 1, 1893, the note was renewed (as in this case) in the same manner in which it was originally given. The court in passing on this question held that under all of the circumstances it was of the opinion that Geo. C. Kidder had the lawful right, he being a member of the firm of Kidder & Bro., to sign the firm name on the note as surety, and that the firm of Kidder & Bro. was bound by such signature.

We conclude that under the undisputed facts it is immaterial that the appellant, Blitchell, did not know of or consent to the act of his partner Jones in executing the obligation in question, and that he received no personal benefit therefrom other than such as may or may not have accrued to him as a result of the prosecution of the Cross Plains business. Nor do we think there was any material fact controverted in the evidence which the court under the law was required to submit to the jury.

All assignments are accordingly overruled, and the judgment is affirmed.