text:
    AUSTIN BRIDGE CO. et al. v. TEAGUE.
    No. 9007.
    Court of Civil Appeals of Texas. Austin.
    March 5, 1941.
    Rehearing Denied April 9, 1941.

      Coleman Gay, of Austin, (Turner, Rodgers & Winn and M. B. Solomon, all of Dallas, of counsel), for appellant.
    A. M. Felts, Wheeler & Wheeler, and F. A. Tyler, all of Austin, for appellees.
   BLAIR, Justice.

Appellee, B. C. Teague, sued appellants, Austin Bridge Company, Austin Road Company, and the Superior Lloyds .of America, as surety, for the difference in the wages paid him as an unskilled laborer and the wages claimed to be due him as a skilled laborer for work done on a public works contract; and on a trial to the court without a jury recovered judgment for $479.40 as the balance of wages due, less 1% for payment of old age benefits; $47.-94 as attorney’s fees; and 6% interest on the judgment from its date; hence this appeal.

Appellee sued as a third party beneficiary under a contract between Austin Bridge Company-Austin Road Company and the State Highway Commission for the difference between the amount paid him as an unskilled laborer and the amount claimed to be due him for labor performed as a skilled laborer or master finisher of cement in the construction of bridges and culverts for the State of Texas on its Federal Aid Project #74 (2) in Travis County; appellee pleading as the basis of his right of recovery the. contract and the provisions of Article 5159a, Vernon’s Ann. Civ.Statutes (Acts 1933, 43rd Leg. p. 91), which statute was expressly made a part of the contract. Appellants contend that this statute does not afford appellee the remedy sought by him, and that he was not a third party beneficiary under the contract. Neither contention is sustained.

The emergency clause of the Act of 1933 recites that its purpose is to protect “laborers, workmen and mechanics engaged in doing and performing work on public works” and to secure to them the payment of certain per diem wages. The portions of the Act applicable here provide in substance as follows:

1. That before undertaking any public work the State Highway Commission “shall ascertain the general prevailing rate of per diem wages in the locality in which the work is to be performed for each craft or type of workman or mechanic needed to execute the contract”; and shall fix the rate of per diem wages to be paid them in the execution of the contract at “not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is performed”; and “shall specify in the call for bids for said contract, and in the contract itself,” the rate of per diem wages so ascertained and . fixed.

2. That the prevailing rate'of per diem wages so determined by the Commission “shall be final.”

3. That “it shall be mandatory upon the contractor * * * and * * * subcontractor * * * to pay not less than the said specified rates.”

4. That “the contractor shall forfeit as a penalty to the State * * * Ten Dollars ($10.00) for each laborer, workman or mechanic employed, for each calendar day, or portion thereof, such laborer, workman or mechanic is paid less than the said stipulated rates for any work done under said contract/’ and the Commission shall “cause to be inserted in the contract a stipulation to this effect.”

5. That “it shall be the duty of such public body [Commission] awarding the contract, and its agents and officers, to take cognizance of complaints of all violations of the provisions of this Act committed in the course of the execution of the contract, and, when making payments to the contractor of monies becoming due under said contract, to withhold and retain therefrom all sums and amounts which shall have been forfeited pursuant to the herein said stipulation and the terms of this Act.”

Section 5 of said Ac( of 1933 is Art. 1581a of Vernon’s Ann. Penal Code and provides that a fine of not exceeding $500 or six months’ imprisonment, or both, may be imposed upon any contractor or any representative of the state or political subdivision thereof, who shall wilfully violate or omit to comply with any of the provisions of the Act.

The contract referred to and made the Act of 1933 a part of it, and as directed by the Act, the Commission inserted the penalty clause in the contract, and specified in its call for bids and caused to be inserted in the contract its order ascertaining and fixing the general prevailing rate of per diem wages on an eight hour per day basis at $1 per hour for skilled labor; fifty cents per hour for intermediate labor; and forty cents per hour for unskilled labor. This order also defined in general terms the three stated classifications of labor, listing various kinds of laborers, workmen and mechanics under each classification; and listed under the classification “Skilled Labor,” among others, is “Master Finisher (pavement and structure).”

Appellants concede that the Act is primarily for the protection and benefit of the laborers and workmen in securing to them payment of the minimum wages prescribed. They contend, however, that since the Act does not specifically authorize workmen to bring suit for such wages claimed to be due them for work performed in the execution of a public works contract, they have no such right. In this connection, appellants cite the provisions of the Act giving the Commission the right to require the contractor to keep accurate records of work done by each laborer and the amount paid him; its right and duty to investigate all complaints for violation of the Act; and its right to forfeit to the state $10 per day for each laborer for each day he is paid less than the minimum' rate of wages prescribed; as being summary remedies provided by the statute in behalf of the workmen, and as being the exclusive remedies afforded by the statute. In addition, the penal code imposing a fine of $500 or six months’ imprisonment, or both, upon any contractor or any representative of the state or any subdivision thereof, for violation of the statute, is also cited as a further summary remedy in behalf of the workmen.

It is true that these remedies or provisions for the enforcement of the statute may indirectly aid workmen in securing the payment of the minimum rate of wages; but we do not regard them as being exclusive. Such provisions are penal in nature and like all penal laws were intended as deterrents to contractors not to pay less than the minimum rate of wages. Their enforcement, however, does not actually pay the minimum rate of wages prescribed, which is the primary objective of the statute, and we can conceive of no good reason why the legislature would give workmen the right to require a contractor of public works to pay them a minimum rate of wages, and then deny them the right to sue the contractor for such wages. We think the Act contemplates the authority of ’ workmen to enforce their right to be paid such wages by suit against the contractor. This becomes apparent when the Act in question is considered with other statutes enacted for the benefit and protection of workmen or laborers furnishing labor to any contractor for any public works. That is, Chap. 17, Acts 1925, 39th Leg., p. 44, Vernon’s Ann.Civ.St. Arts. 5472a, 5472b, provides that a workman or laborer furnishing labor to any contractor for any public improvements shall have a lien on any money, etc., which may become due the contractor by notifying in writing the public officials of the state of his claim. Chap. 78, Acts 1929, 41st Leg., p. 154, Vernon’s Ann.Civ.St. art. 5472b — 1, provides that when a claim or claims to fix the lien provided by Chap. 17 have been filed the contractor may release the lien by giving bond in double the amount of the claim, payable to the laborer and upon which he may sue. All of these statutes are in pari materis and authorize the instant suit. The parties so construed them by complying with their provisions as to notice of claim to fix the lien and giving of the bond to release the lien, and this suit is upon the contract and bond obligation.

We are also of the view that ap-pellee does have the right to maintain this suit as a third party beneficiary under the contract in suit. The provisions of the Act with respect to payment of minimum wages are required to be inserted in the public works contract and become a part of it. They were so inserted in the instant case. Such provisions of the contract are for the benefit and protection of the laborer, and the generally accepted rule is that a contract njade by two parties for the benefit of a third party may be enforced by the suit of the latter. Such is the holding in Hearn v. Ralph Sollitt & Sons Const. Co., Tex.Civ.App., 93 S.W.2d 551, wherein the similar federal wage law was involved, and the court construed the contract as authorizing the laborer to sue thereon as a third party beneficiary.

But appellants contend that if it is held that appellee may maintain this suit as a third party beneficiary under the contract, then he is bound by its terms which make the decisions of the engineer of the Commission final and binding on the parties; and that in consequence his finding and conclusion on the complaint of appellee that he had been paid the procer scale of wages for his work is conclusive and binding upon him and precludes his right of recovery under the following provisions of the contract:

1. “The engineer will decide all questions which may arise as to the interpretations of the plans and specifications; and as to the acceptable fulfillment of the contract on the part of the contractor. His decisions will be final and he will have executive authority to enforce and make effective such decisions and orders as the contractor fails to carry out promptly.”
2. “The work will be done under the supervision of the Engineer, to his satisfaction, and in accordance with the contract, plans and specifications. The engineer will decide all questions which may arise as to the quality or acceptability of materials furnished and work performed; the manner of performance and rate of progress of the work; the interpretation of the plans and specifications, and as to the acceptable fulfillment of the contract on the part of the contractor. His decisions will be final and he will have executive authority to enforce and make effective such decisions and orders as the contractor fails to carry out promptly.”
3.“The engineer will decide all questions which may arise as to the acceptable fulfillment of the contract on the part of the contractor. His decisions will be final. The engineer will act as referee in all causes arising under the terms of the contract between the parties thereto and his decision shall be final and binding.”

In this connection appellants also cite the provisions of Art. 5159a, § 4, which read as follows: “The term ‘general prevailing rate of per diem wages’ shall be the rate determined upon as such rate by the public body awarding the contract, or authorizing the work, whose decision in the matter shall be final.”

The evidence shows that appellee made complaint to the resident engineer of the Commission who was in direct charge of the work that he was being paid the wages of an unskilled laborer and that he should be paid the wages of a skilled laborer for the work he was doing. The engineer investigated the matter and told appellee that he was being paid the proper wages under his interpretation of the contract. The matter was called to the attention of the district engineer, who ruled likewise, and after a hearing before the Commission’s construction department, the State Highway Engineer made a like ruling. Appel-lee then filed his claim for the difference in the wages paid him as an unskilled laborer and the wages claimed as a skilled laborer, with the Commission, whereupon the Commission notified the contractor of the lien thus fixed upon money to become due on the contract, and suggested that the contractor might release the lien by filing the bond prescribed by Chap. 78, supra, which was done; and appellee brought this suit upon the contract and bond as provided by the statutes.

The quoted provisions of the contract require the engineer to act both in the capacity of an engineer and in the capacity of an arbiter or referee. In his capacity as engineer he is clearly authorized to finally pass upon the quality and acceptability of the work done under the contract, whether or not the plans and specifications were being properly followed; and whether or not the proper kinds and amounts of material were being used. He is likewise given final authority to determine whether the workmen and laborers were properly performing the work assigned to them.

These provisions of the contract relate primarily to questions arising' between the state and the contractor and come clearly within the settled rule that where the parties to a contract have stipulated that the determination of the engineer as to such matters shall be final and conclusive, both parties are bound by his determination, except in case of fraud or of such gross mistake on his part as would necessarily imply bad faith or a failure to exercise an honest •judgment. The provisions of quotations “1” and “2” are therefore not here involved. The provision here involved is quotation “3”, which provides that “the engineer will act as referee in all causes arising under the terms of the contract between the parties thereto and his decision shall be final and binding.” Appellants contend that “it is obvious that the question of whether or not a contractor has paid the wage scale required by the contract is a question arising under the terms of the contract.” Appellee concedes that as a third party beneficiary under the contract he is bound by any of its terms and provisions which affect his work or rate of wages as provided for in the contract; but that he is not bound by an erroneous interpretation placed upon the contract by the engineer, and that the last quoted provision of the contract does not so bind him; and that if it does so bind him, it is void as being an attempt to oust the jurisdiction of the court to determine this legal question. We think that the question presented is controlled by the rule stated by the Supreme Court in Galveston, H. & S. A. R. Co. v. Henry & Dilley, 65 Tex. 685, 691, and 692, as follows:

“There is no doubt but that when parties to such a contract submit such a matter to the decision of the engineer, his determination is final and conclusive, unless, in making it, he has been guilty of fraud, misconduct, or such gross mistake as would imply bad faith or a failure to exercise an honest judgment. Martinsburg & P. R. Co. v. March, 114 U.S. 549 [5 S.Ct. 1035, 29 L.Ed. 255]. But his decision must be in accordance with the contract. The parties agree, as they did in this case, that he shall determine as to the amount of the work done by them under the contract, not that he shall make a different contract for them. He decides under the legal construction of the contract, not upon such construction as he may choose to give it. He is not made the arbitrator, to whom is to be referred differences as to the meaning of the contract, and he cannot adopt rules of measurement that it does not authorize.”

In the instant case the engineer testified that under his “interpretation” of the contract the work of a “master finisher” of cement was not provided for nor required by the contract; but that if so, the work done by appellee was that of a master finisher of cement. Thus the engineer clearly placed his decision upon his interpretation of the contract as not providing for the work of a master finisher of cement. If the contract does provide for the work of a master finisher of cement, then his decision cannot stand because of the quoted rule that “his decision must be in accordance with the contract” and he may not give it any construction “he may choose to give it.”

It is also manifest that the quoted provisions of Art. 5159a, providing for the ascertaining and fixing of the general prevailing rate of wages, and that the Commission’s decision therein “shall be final,” relate to the preliminary duty of the Commission before “undertaking any public work.” Obviously, this finding or fixing of the minimum rate of wages must be final because the statute provides that the rate of wages so ascertained and fixed by the Commission “shall [be] specif [ied] in the call for bids for [the] contract, and in the contract itself.” If the rate of wages so fixed was not made final the contractor would be unable to make estimates of the cost of the work, and his contract would be indefinite and hazardous. But the question of fixing the prevailing rate of wages is not involvéd because the Commission did ascertain and fix it as directed by the statute. The question here presented is whether appellee actually performed the work of a skilled laborer as defined in the contract, or merely performed the work of an unskilled laborer and for which he was paid.

Appellants next contend that the contract did not fix $1 per hour as the minimum rate of wages for the type of work done by appellee, nor that he did the work of a master finisher of cement as that term is defined in the contract. These contentions are not sustained, because the engineer testified that if the contract called for the labor of a master finisher of cement, then appellee .performed that labor, and we interpret the contract as specifically providing for the labor of a 'master finisher of cement and fixing- the wages to be paid therefor at $1 per hour.

The order of the Commission ascertaining and fixing the rate of per diem wages was made a part of the contract as directed by the statute. It divided all labor into three general classes, skilled, intermediate, and unskilled, and defined each class in general terms as follows:

“Skilled labor: Skilled labor shall include the operators of complex heavy power equipment and skilled craftsmen of the journeyman grade whenever and wherever the nature of the work or labor agreements prevailing in the locality of the work require the use of craftsmen of this grade.
“Labor (intermediate grade) :
“(a) The operators of all power equipment other than complex heavy power equipment, except passenger cars, trucks of 1 ⅛ ton or less manufacturer’s rated capacity, and tractors of less than 20 horsepower manufacturer’s rated capacity.
“(b) Men performing any other labor which requires considerable training and experience.
“Unskilled labor: Unskilled labor shall include helpers to journeymen craftsmen and all other labor which requires no special skill or experience.”

Under the heading “Skilled Labor” was listed, among others, “Master Finishers (pavement and structure).” Under each of the headings, “Intermediate” and “Unskilled Labor,” were listed several who worked with cement, but neither of them included the character of work which the undisputed evidence showed appellee to have performed.

It may be again observed that the contract defined “skilled labor” only in general terms and as being labor performed by “skilled craftsmen of the journeyman grade whenever and wherever the nature of the work or labor agreements prevailing in the locality of the woi'k require the use of craftsmen of this grade.” It then lists “Master Finishers (pavement and structure)” as skilled labor, but does not define the term “Master Finisher,” nor define his duties, nor the character of his work. In consequence, “we could derive no light whatever from the contract itself” (Galveston, H. & S. A. R. Co. case, supra), and we must, as directed by the contract, determine whether the labor performed by appellee was that of a “skilled craftsman of the journeyman grade whenever and wherever the nature of the work or labor agreements prevailing in the locality of the work require the use of craftsmen of this grade.” This is the standard or test prescribed by the contract itself, and the engineers in charge of the work cannot destroy this provision of the contract by their interpretation of the contract as not providing for or requiring the labor of a master finisher of cement. j

The work done by appellee was finishing of cement bridges and culverts after the forms or frames were removed. In the main it consisted of “chamfering, floating, honeycomb work, and rubbing or polishing after the frame is removed.” He had nine years’ experience in his work. The contract described minutely how chamfering, floating, honeycombing, rubbing and polishing were to be done. The first work done by appellee was to finish five bridges which had failed to pass the inspection of the engineer for the Commission, and he continued to do this same finishing work on other bridges for several months. On cross-examination appellee testified:

“Q. In addition to polishing, floating, ■cutting chamfers, and doing this honeycomb work, what else did you do? A. That completes the work you have to do to take care of the bridges.”

Appellee and witness Hollis, a master finisher of cement, testified that “chamfer-ing, floating, honeycomb work and rubbing or polishing after the frame is removed * * * is the work of a cement finisher”; that each of them belonged to a local labor union which classified them as master finishers; that the work of' a master finisher is not different from the work done by appellee on the bridges in question; and that each of them had been employed for several months by the Colorado River Authority in Austin as master finishers doing the same work as appellee did on the bridges in question.

On this issue the engineer in charge of the work for Commission testified as follows :

“Q. What was the work of a master finisher on these culverts and bridges? A. We did not have any master finisher.
“Q. You did not have a master finisher on this work? A. Not under our interpretation of the term, and according to the work done, no sir, this had none.
“Q. Whatever work was done, he did it? A. Yes, sir, under the direct supervision of the foreman.
“Q. Under this section of the work Mr. Teague and Mr. McNabb were doing the work? A. Yes, sir.
“Q. Whatever finishing work was done on these bridges and culverts, they did it, whether it was called master finisher or not? A. Yes, sir.
“Q. If a man is using a float that is a straight edge, and is using this float doing straightening work and smoothing work, he is a master finisher is he not? A. Yes, but so is a trowel man. This aluminum straight edge is the final work. This is gone over finally and must be perfectly smooth, and the metal straight edge is used for that purpose.
“Q. A master finisher is .one who uses this aluminum straight edge instead of the wooden straight edge? A. No, sir.
“Q. If, technically they are the same, what difference is there? A. According to the time taken in using this.
“Q. According to your testimony you do not have a master finisher out there. A. This type of work does not require a master finisher.
“Q. Why put a master finisher in the contract, if he is not used ? A. Because it is used for all jobs and many contracts. They are mimeographed and a part of every contract.
“Q. If it required'a master finisher they would have been required to furnish one? A. Yes, sir.
“Q. Although the contract called for a master finisher, your theory is that you did not require a master finisher and you did not use one? A. No, sir.”

To the same effect was the testimony of the engineer in charge of the work for the Bridge Company.

Over objection appellants offered in evidence “Sheet 13” and “Sheet 14” of a Digest and Interpretation of Special Provisions for Projects financed by Regular Federal Aid Funds, which read as follows:'

“The term ‘master finisher’ has been changed to include finishers of concrete riding surface on bridge floors, in addition to the master finisher on concrete pavement. This grade does not include rubbers or average trowel men, but should cover the employee or employees responsible for obtaining the smooth finish on the roadway surface.” • ■
“The rubbing of concrete culverts and bridges shall come under the classification of unskilled labor, even though it is entirely possible that some of these laborers may be paid a higher rate of pay and be considered as straw bosses in charge of gangs performing this work.”

■ These provisions were not incorporated in the contract and their purpose as stated in the Digest was as follows: “It should be borne in mind that this Digest is for informational purposes to aid the State’s and contractors’ representatives in interpreting the Special Provisions, and in no way supersedes the Special Provisions as approved by the Chief of Bureau.”

The “Special Provisions” referred to are the above quoted three classifications of labor, and by express language the Digest instructions were “in no way to supersede the Special Provisions as approved by the Chief of Bureau,” which defined a skilled laborer as being a “skilled craftsman of the journeyman grade whenever and wherever the nature of the work or labor agreements prevailing in the locality of the work require the use of craftsmen of this grade.” This simply brings us back to the question of whether when viewed from this standard or test prescribed by the contract, the work of appellee was skilled labor, or was in “the nature of the work or labor agreements prevailing in the locality of the work require the use of craftsmen of this grade.” The trial court held that the above evidence showed appellee to be a skilled laborer or master finisher as defined by the contract, and we sustain that conclusion, which we believe is sustained by the case of Galveston, H. & S. A. R. Co. v. Henry & Dilley, supra, holding that, “if we could derive no light whatever from the contract itself, we should have to read it in the light of the practice and usage of the company,” or as in the instant case, in the light of the “nature of the work or labor agreements prevailing in the locality of the work require the use of craftsmen of this grade.”

Appellants’ remaining proposition is as follows: “Plaintiff has waived his rights to maintain this suit and is estopped to assert same and has released any claims he might have for additional compensation by virtue of having executed the daily time sheets wherein he agreed to the hourly ,rate he was being paid, and by virtue of having accepted the various checks which were tendered to the plaintiff and accepted by him as payment in full for his services, and by virtue of having executed the release as payment in full for said services, and by virtue of having induced the defendant companies to continue his employment. by leading them to believe he was satisfied with his wages.”

Appellee, in answer to appellants’ plea of waiver and estoppel alleged and proved that he signed the releases solely to obtain the check tendered to him by appellants; that he did not know the provisions of the contract providing for skilled labor; that no dispute existed as to the amount of wages due him under the contract at the time; and that he was not paid any consideration for the releases other than the amount tendered him for unskilled or intermediate labor. Under these facts the trial* court concluded that there was no consideration for the releases and that there was no estoppel on the part of appellee to claim the $1 per hour due him under the contract. Such conclusion is sustained by the authorities. Oviett v. Warner, Tex.Com.App., 288 S.W. 434; Southwestern Gas & Electric Co. v. Cobb, Tex.Civ.App., 200 S.W. 1116; Lone Star Canal Co. v. Cannon, Tex.Civ.App., 141 S.W. 799; Guinn v. Culver, Tex.Civ.App., 81 S.W.2d 176; Chicago Fraternal Life Ins. Ass’n v. Herring, Tex.Civ.App., 104 S.W.2d 901. The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: MONTEITH, Chief Justice.

license: Public Domain

text:
    NORRIS et al. v. GULF PRODUCTION CO. et al.
    No. 11182.
    Court of Civil Appeals of Texas. Galveston.
    Feb. 27, 1941.
    Rehearing Denied April 3, 1941.

      Clay Cooke, of Fort Worth, for appellants.
    Fouts, Amerman & Moore, of Houston, for appellee Plummer.
    John E. Green, Jr., William Stone Wells, and Archie D. Gray, all of Houston, for ap-pellee Gulf Production. Co.
   MONTEITH, Chief Justice.

This is an appeal from an order sustaining a plea of privilege in an action brought in the district court of Harris County by appellants, F. A. Norris et al., against appellees, Gulf Production Company and others, wherein they alleged their ownership of certain described lands, and the oil and gas leasehold estates therein, situated in Victoria County, Texas, and sought damages for the conversion and appropriation of the oil and gas produced therefrom.

Appellants’ original petition was filed on August 17, 1937. Appellees were cited to appear on September 13, 1937. On September 11, 1937, prior to the return day in said citation, appellees, Gulf Production Company and Albert Plummer, filed their respective pleas of privilege to be sued in the district court of Victoria County, under Subdivision 14 of Article 1995, Revised Civil Statutes of 1925, Vernon’s Ann.Civ. St. art. 1995, subd. 14.

On October 11, 1937, appellants filed their controverting affidavit in which they sought to retain venue of said action in Harris County. No motion was filed by appellants seeking permission of the court to file said controverting plea after the expiration of five days after the filing of said plea of privilege. No copy of said controverting plea was served on appellees, and no hearing was had on said pleas of privilege or said controverting affidavit until August 12, 1940.

On June 15, 1940, appellants applied for and were granted leave to file an amended petition, wherein they sought recovery of their proportional interest in the net profits derived from the oil and gas produced from said land.

On a hearing on appellees’ pleas of privilege on August 12, 1940, an order was entered sustaining said pleas ' and directing the transfer of said cause to the district court of Victoria County. Appellants have appealed from this order.

The parts of said Article 1995 material to this appeal, and Subdivision 14 thereof on which appellees rely, read:

“No person who is an inhabitant of this State shall be sued out of the county in which he has his domicile except in the following cases: * * *
“14. Lands. — Suits for the recovery of lands or damages thereto, * * * or to prevent or stay waste on lands, must be brought in the county in which the land, or a part thereof, may lie.”

Article 2007, Revised. Civil Statutes, Vernon’s Ann.Civ.St. art. 2007, provides that, if the plaintiff in a suit desires to controvert a -plea of privilege, “he shall within five days after appearance day file a controverting plea under oath, setting eiut specifically the fact or facts relied upon to confer venue of such cause on the court where the cause is pending.”

Article 2008, Revised Civil Statutes, Vernon’s Ann.Civ.St. art. 2008, provides that upon the filing of a controverting plea a hearing shall be had thereon after a copy of such controverting plea shall have been served on each defendant, or his attorney, for at least ten days, exclusive of the day of service and the date of hearing.

Article 2019, Revised* Civil Statutes, Vernon’s Ann.Civ.St. art. 2019, provides that if a plea of privilege is sustained, the cause shall be transferred to the court having jurisdiction thereof.

It is the established rule in this state that a plea of privilege, sufficient on its face and filed in due time, deprives the court in which the action is filed of jurisdiction to enter any other judgment than one transferring the case, under R.S.Article 2019, unless a controverting affidavit is filed within five days after appearance day, under said Article 2007, and that, if so filed, a hearing thereon cannot be had until defendants who have filed pleas of privilege have been served with notice thereof for ten full days. Galbraith v. Bishop, Tex.Com.App., 287 S.W. 1087.

It is further held that said Article 2007, which prescribes a limitation upon the time when a controverting affidavit to a plea of privilege shall be filed, is mandatory (McKittrick v. McDaniel, Tex.Civ.App., 300 S.W. 97; Sibley v. Continental Supply Co., 116 Tex. 403, 292 S.W. 155), and that if a controverting affidavit is not filed within the time prescribed under said Article 2007, the result is the same as if no controverting plea had been filed and that, under said Article 2019, the only jurisdiction the court then has is to enter judgment sustaining the plea of privilege and ordering the cause transferred to the proper court for trial. Russell Grader Mfg. Co. v. McMillin, Tex.Civ.App., 271 S.W. 124; Green v. Brown, Tex.Civ.App., 271 S.W. 394; Barnum et al. v. Lancaster Hardware Co., Tex.Civ.App., 40 S.W.2d 1103.

In construing said Article 2007 it is further held that the burden rests upon the plaintiff to procure the disposition of a plea of privilege during the term of court at which it is filed, or to show that the business of the court prevented such consideration at that term. Bundrant v. Woodley, Tex.Civ.App., 32 S.W.2d 664; White v. White, Tex.Civ.App., 105 S.W.2d 779; American Fidelity & Cas. Co. v. Jones Transfer & Storage Co., Tex.Civ.App., 46 S.W.2d 1054; Klapuch v. Dickey, Tex.Civ.App., 91 S.W.2d 484; Brashears v. Strawn National Bank, Tex.Civ.App., 57 S.W.2d 177.

Article 2013, Revised Civil Statutes, Vernon’s Ann.Civ.St. art. 2013, provides that pleas to the jurisdiction, pleas in abatement, and other dilatory pleas and demurrers, not involving the merits of the case, shall be determined during the term of court at which they were filed, if the business of the court will permit.

Rule 24 of the County and District Courts provides that, “All dilatory pleas, and all motions and exceptions relating to a suit pending, which do not go to the merits of the case, shall be tried at the first term to which the attention of the court shall be called to the same, unless passed by agreement of the parties with the consent of the court; and all such pleas and motions shall be first called and disposed of before the main issue on the merits is tried.”

In the instant case it is uncontroverted that the pleas of privilege filed by appel-lees, Gulf Production Company and Albert Plummer, were filed within the statutory period; that the controverting plea of appellants was filed approximately a month thereafter and that appellees were not served with copies thereof, as required by said Article 2008, nor was the venue question raised by appellees’ pleas of privilege called to the court’s attention for disposition at the term of court at which said pleas were filed, nor during the succeeding seven terms of said court, and no application was made by appellants for a postponement thereof -and no order was entered continuing hearing on said pleas of privilege from term to term without prejudice, nor was a written agreement entered into between counsel for appellants and ap-pellees, as provided for under said Rule 24, that such pleas would be continued from term to term without prejudice. The first hearing on said question was had in the district court of Harris County on' August 12, 1940.

It follows that the district court of Harris County had no alternative than to enter an order transferring this cause to the district court of Victoria County.

Appellants contend that said appellees’ pleas of privilege, in which they sought change of venue of said suit to Victoria County solely under Subdivision 14 of Article 1995, Revised Civil Statutes, was insufficient in law, since by amendment and new citations appellants’ cause of action was changed to eliminate any claimed controversy over title to lands or interest therein.

The pleas of both appellees, Gulf Production Company and Albert Plummer, which were in substantially the same language, alleged that the Harris County district court ought not to have or take further action or cognizance of said suit than to have the same transferred to tlie court having jurisdiction of the alleged cause of action; that no exception authorizing the bringing or maintaining of said suit in Harris County existed and that they had not consented to or waived their privilege of being sued in Victoria County, where the land was situated. They alleged: “That this suit is primarily and mainly for the purpose of the recovery of damages ¡to land situated in Victoria County, Texas, and to stay waste on land situated in Victoria County, as shown upon the face of plaintiffs’ petition, to which reference is here made for all purposes, and that no part of the land and premises described in plaintiffs’ petition, from which recovery for oil removed therefrom is sought, is situated in Harris County, Texas, but that said land lies wholly within Victoria County; that under Subdivision 14 of Article 1995 of the Revised Statutes of Texas of 1925, this suit is required to be brought in Victoria County, Texas, where the land involved is situated.”

The precise question here presented has been decided by this court contrary to appellants’ contention in the case of Budde v. Navarro Oil Co., Tex.Civ.App., 125 S.W.2d 1055.

In that case, in which the facts were similar in all material respects to those in the instant case, suit was filed in Harris County seeking recovery of oil produced from leases on land situated in Montgomery County. Defendant therein filed a plea of privilege in substantially the same form as that filed by appellees herein, seeking a transfer of said cause to the district court of Montgomery County, on the grounds that the suit fell .within the provisions of Subdivision 14 of the venue statute. In sustaining the district court’s order transfer-'ing the cause, this court held that the ultimate purpose of appellant’s suit was to recover title to and possession of the royalty interest in lands located in Montgomery County, and that therefore his action was a suit for recovery of lands and that such an action must be brought in the county where the land lies, pursuant to said Subdivision 14 of R.S. Article 1995'.

The court held that the face of plaintiff’s petition would be resorted to in order to properly determine the question of venue.

In their original petition appellants alleged that they owned the land and the leasehold estates from which the oil and gas for which they sought recovery was produced. In their amended pleading they alleged that they and appellees were the joint owners of a block of mineral leases on land situated in Victoria County under a joint adventure and that they were entitled to share in all the profits derived •therefrom; that appellees became trustees therefor and had sold and appropriated oil derived therefrom. They sought recovery of a percentage of the profits derived from such operations and a percentage of the assets of said joint adventure.

It is obvious from above pleadings that appellant’s suit is an action to recover title to and possession of a royalty interest in lands alleged to be owned by them and located in Victoria County and that therefore it is a suit “for the recovery of lands or damages thereto, or to remove incum-brances upon the title to land, * * * or to prevent or stay.waste on lands” within the meaning of Subdivision 14 of R.S. Article 1995, and that it “must be brought in the county where the land lies, pursuant” thereto. Budde v. Navarro Oil Co., Tex.Civ.App., 125 S.W.2d 1055, 1057; Elder v. Miller, Tex.Civ.App., 116 S.W.2d 1171; Frost v. Standard Oil Co. of Kansas, Tex.Civ.App., 107 S.W.2d 1037; Robinson v. O’Keefe, Tex.Civ.App., 107 S.W.2d 419.

It follows from above conclusions that the judgment of the trial court must be in all things affirmed. It is so ordered.

Affirmed.


author: WALTHALL, Justice. SUTTON, Justice.

text:
    BUSBY et al. v. MICHAEL.
    No. 3980.
    Court of Civil Appeals of Texas. El Paso.
    Sept. 26, 1940.
    Rehearing Denied March 27, 1941.
    John P. Giles, D. A. McAskill, Dave Watson, T. M. West, and Morriss & Morriss, all of San Antonio, for appellants.
    Swearingen & Miller and Johnson & Rogers, all of San Antonio, for appellee.
   WALTHALL, Justice.

This suit was filed in the 45th District Court of Bexar County by Lorena H. Busby, hereinafter called Lorena Busby, joined in the suit by her husband, O. M. Busby, against Arthur M. Michael. The purpose of the suit was to recover some 692 acres of land fully described in the petition, and which land plaintiff Lorena Busby, while a party to the suit, alleges was held by defendant L. M. Michael for her benefit.

Lorena Busby died, the other plaintiffs were joined, and the suit was carried on in her name. The suit of the plaintiff was to recover the title and possession of the land, to ascertain an adjudication and adjustment of the indebtedness of their mother with L. M. Michael. Lorena Busby died November 20, 1936, and left surviving her the present plaintiffs. O. M. Busby thereafter conveyed his interest, inherited from his wife, Lorena Busby, in the land, and filed his disclaimer. The suit is based on a written contract of date September 16, 1916, between the said Lorena H. Busby and her husband, O. M. Busby, on the one part, and L. M. Michael, the father of appellee, on the other. In the suit plaintiffs sought a decree in the nature of specific performance of said contract.

To the plaintiffs’ fifth amended original petition the defendant answered by general demurrer and special exceptions, which the court overruled, a general denial, plea of not guilty, and specially pleaded that defendant owned the land in controversy, pleaded the five and ten years statutes of -limitation and the statute of frauds, and in the alternative pleaded that if he was not the owner of the land, he was the owner of certain specified debts secured by a lien against the land, and prayed for judgment for his debts; that his debts be secured by a lien against the land, and that his lien be foreclosed.

As disclosed by the said contract of September 16, 1916, the title to the property involved at the time of the execution of the contract was vested in one H. E. Mc-Keen, and the circumstances and situation of the parties are set forth wifh particularity in said contract. The contract is attached to and made a part of the petition.

While the contract is lengthy, we state it here:

“The State of Texas
“County of Bexar.
“This contract and agreement made and entered into in quintuplícate, each being an original, by and between Oscar M. Busby and Lorena Busby, his wife, parties of the first part, of the County of Frio and State of Texas, and Louis M. Michael, of the County of Bexar and State of Texas, party of the second part, Witnesseth:
“1st. Whereas, said Oscar M. Busby be■ing indebted with others jointly and severally to said Louis M. Michael, in a large sum of money, evidenced by a certain personal judgment against said Oscar M. Busby, George F. Wideman, and Joseph Greer, originally in the amount of Eleven' Thousand, Two Hundred and Twenty-seven Dollars and Fifteen cents, with 8% interest until paid, rendered in the District Court of the 45th Judicial District, Bexar County, Texas, on the 28th day of June, 1915, in cause numbered on the docket of said Court, B-9351, and also against Mrs. Lucy A. Hinkle for the same amount, as her interest may be in certain lands described in said suit, which have been sold and the proceeds of sale have been applied to and credited on said judgment, leaving now due and unpaid on said judgment about the amount of Seven Thousand Dollars.
“2nd. And whereas, on or about the -day of August, 1915, the said Louis M. Michael, caused an abstract of judgment to be recorded in the abstract of judgment records of Frio Courity, Texas, under the statute in such cases made and provided,' whereby said part of said judgment unpaid amounting to about Seven Thousand Dollars, became a lien on any and all lands of said O. M. Busby, not exempt from execution in the said County of Frio, and was a judgment lien on the lands hereinafter described.
“3rd. And, whereas, on or about the 8th day of November, 1915, one H. E. Mc-Keen, filed his original petition, and on the 6th day of January, 1916, filed his first supplemental petition in the District Court of Frio County, Texas, cause No. 1453, styled H. E. McKeen vs. O. M. Busby et al, among defendants being said Louis M. Michael, the said suit being nominally in trespass to try title and for damages, claiming in said petitions that said H. E. Mc-Keen was the owner in fee simple of the-lands hereinafter set out and described, as-651 acres; in fact there being 691 acres-within the metes and bounds hereinafter set out; and that the title asserted in said petitions of said H. E. McKeen was paramount and superior to the judgment lien of said Louis M. Michael; when in truth and in fact said suit of said McKeen was a deceitful, fraudulent and covinous action, by and between said H. E. McKeen and said Oscar M. Busby for the purpose of suing for and obtaining a judgment for a fictitious, false and fraudulent amount of money, and to hinder, delay and defraud the bona fide creditors of him, said Oscar M. Busby, one of whom specially is as above described, said Louis M. Michael.
“4th. And whereas, thereafter, on the 10th day of March, 1916, the said H. E. McKeen did conspire with and induce said Oscar M. Busby to enter into a writing signed by both, a false, fraudulent, covinous and unlawful agreement and contract, whereby the said H. E. McKeen purposed and intended to falsely and fraudulently obtain a false, untrue and fraudulent judgment in said cause No. 1453 on the docket of said district court of Frio County, Texas, and to hinder, delay and defraud the bona fide creditors of said Oscar M. Busby, of whom said Louis M. Michael is the largest in amount, and which fraudulent agreement is in the following words and figures, to-wit :
“ 'State of Texas,
“ ‘County of Frio
“ ‘Whereas, there is now pending in the District Court of Frio County, Texas, a cause entitled H. E. McKeen vs. O. M. Busby et al, No. 1453 on the docket of said court, which suit is an action by the said McKeen to obtain the title and possession of 651 acres of land in Frio County, Texas, being a part of Sur. No. 321, in the name of Alexander Lynch, the said H. E. McKeen being entitled to the title and possession of said land by virtue of the trustee’s deed thereto obtained by virtue of' the foreclosure of a mortgage upon said land theretofore given to the said McKeen and to B. H. Kelly, Trustee, to secure the payment of a note for $2100.00 theretofore executed by O. M. Busby in favor of the said H. E. McKeen; the said O. M. Busby is further indebted to the said H. E. Mc-Keen on account of the said H. E. McKeen being the owner and holder of a certain judgment purchased by him and transferred to him by one J. C. Hybarger and taken against O. M. Busby and J. C. Hybarger in a suit filed by the Hillyer-Deutsch-Jar-ratt Co., and is also indebted for interest, costs and other sums of money aggregating in all the sum of $5300.00. In addition to the said sum of $5300.00 it is contemplated by the parties hereafter signing this instrument that the said H. E. McKeen will take up and pay off to the order thereof one certain promissory note for the sum of $3000.00, due August 1, 1916, and executed by O. M. Busby in favor of E. E. Yates in part payment for the 651 acres of land above mentioned, which said note is a first lien upon the said land.
“ ‘For and in consideration of a settlement and adjustment of all litigation and adjustment of all differences and indebtedness existing between them the above named H. E. McKeen of Bexar County, Texas, and O. M. Busby of Frio County, Texas, have' entered into the following agreement and contract, to-wit:
“ ‘The said O. M. Busby agreed that the •said H. E. McKeen, plaintiff in the suit above mentioned shall have immediate judgment of the District Court vesting the title and possession of the said 651 acres of land in him the said H. E. McKeen, the •said McKeen adjusting the costs of suit, the amount thereof being included in the sums of money hereinabove mentioned, as well as plaintiff’s attorney’s fee and costs: that the said McKeen shall at once enter into full possession of said land without let or hindrance on the part of him, the ■said Busby. Also the said Busby agrees and confesses that the said H. E. McKeen is the owner and holder of the fee simple title to Lot No. 7 and the North one-half -of Lot No. 8 out of Block No. 6 of the Town of Pearsall, Frio County, Texas, and that the said Busby has no interest or ■claim therein except such as is provided for under the terms of this contract.
“ ‘The said H. E. McKeen, the considerations named in this contract, him moving, agrees that should the said O. M. Busby within ninety days from the date of this contract secure and pay to him, the said H. E. McKeen, the sum of $8300.00 in cash, that he will upon receipt of such payment, make, execute and deliver to the said Busby, or to such person or persons, selected by the said Busby for that purpose, a deed to all the lands and lots in this instrument heretofore described, said deed to be one of special warranty; or that if the said Busby shall find person or persons, who are willing to loan to him sufficient money upon the said land to pay the said McKeen such sum of $8300.00, then for such person at the proper time when the loan is negotiated and ready to be made the said McKeen will make proper deed to a third person for the purpose of permitting the said loan to be made and the said sum of $8300.00 so realized shall be paid to said PI. E. McKeen. It is understood that in either event the said McKeen out of the said sum of $8300.00 shall take up and pay off and obtain a release of the $3000.00 note due Mrs. E. E. Yates here-inabove mentioned.
“ ‘In the event that during the above mentioned ninety days the said Busby fails to raise the said sum of $8300, then the said H. E. McKeen, at the expiration of the said ninety days, agrees to execute and deliver to the said O. M. Busby a deed to the Pearsall property, being Lot No. 7 and N. one-half of Lot No. 8 out of Block No. 6 above mentioned, and to receive from the said Busby therefor a note secured by vendor’s lien retained in said deed for the sum of $1300 due one year after date with interest from date at the rate of eight per cent per annum.
“ ‘It is fully understood and agreed that after the expiration of the ninety days herein mentioned that the said O. M. Busby shall have no further right to redeem the 651 acres of land herein mentioned, nor have any interest therein, except that from said time until the 1st day of January, 1917, the said McKeen agrees that the said Busby may find, if possible, a purchaser for said land, who will pay therefor in cash at least $7000.00 and the balance in and on such terms as may be agreed upon, and that out of the consideration paid for said land over and above the sum of $7000.00 and the actual cost of improvements placed upon said land by McKeen between this date and January 1st, 1917, or whatever date the sale is consummated (it being contemplated that the said land will sell for considerably more than $700.00) the said Busby shall have one-half and the said McKeen the other and remaining one-half but that out of said Busby’s one-half of said profits, he shall pay McKeen the amount due on the $1300.00 vendor’s lien note herein mentioned; it is fully understood that the said McKeen may sell the place himself or assist the said Busby in finding a buyer, but in either event divisions will be stated.
“ ‘It is fully understood and agreed between the parties hereto that should the said Busby fail to raise the money necessary to redeem the property herein mentioned within ninety days from this date, then, the deed to the town property having been executed as herein contemplated and the note for $1300.00 to H. E. McKeen having been delivered, the said Busby shall have no further interest in, right or title of any kind or character except sales right herein given in and to the 651 acres of land, nor shall the said McKeen after accepting and receiving the said $1300.00 vendor’s lien note from the said Busby have claim or demand against him for the sum of $7000.00, that being the amount herein named and representing the amount of indebtedness from which the land is taken and to be hereinafter held, and after the 1st day of January, 1917, should the land not have been sold and the said sum of $7000.00 thereby paid to the said Mc-Keen, the said sum of $7000.00 shall be deemed fully cancelled and the said Mc-Keen shall have no further claim on Busby therefor, neither shall the said Busby have any claim upon the 651 acres of land.
“ ‘In witness whereof, we, the said H. E. McKeen - have hereto subscribed our names to this original and a duplicate thereof this 10th day of March, 1916.
“‘H. E. McKeen
‘"O. M. Busby.’
“(Acknowledgment here omitted)
“5th. And thereafter, and on the same day, March 10th, 1916, with said fraudulent agreement, and in pursuance thereof, the said H. E. McKeen, then and there unlawfully, fraudulently, covinously, and in contempt of said District Court of Frio County, did proceed to take such false and fraudulent judgment in said cause No. 1453, which judgment is in the following words and figures, to-wit:
“ ‘II. E. McKeen vs. O. M. Busby et al.
“‘No. 1453.
“‘March 10, 1916.
“ ‘On this day came on to be heard the above styled and numbered cause, and the plaintiff being present in person, and by attorney, announced ready for trial, and the defendants, O. M. Busby and L. M. Michael, having appeared and filed answers separately, and the defendants E. Deutsch, J. A. Nix, Wallace Rogers,-and Clay Coker each having filed separate disclaimers herein, and the defendants M. T. Lyles, The Alamo Home Builders and Richey & Casey having failed to appear or answer, though it appearing that defendant M. T. Lyles was duly cited herein on the 31st day of January, 1916; that the Alamo Home Builders, a corporation was duly cited herein on the 8th day of January, 1916; and that Richey & Casey, a firm composed of R. A. Richey and L. A. Casey, was duly cited by service on R. A. Richey on the 8th day of January, 1916, each of whom has wholly made default.
“ ‘And all parties having waived a jury and all matters of law and of fact having been submitted to the Court, who after hearing the pleadings, the evidence and the argument is of the opinion the plaintiff is entitled to recover herein as prayed for.
“ ‘It is therefore considered, ordered, adjudged and decreed by the Court that the plaintiff, H. E. McKeen do have and recover the title and possession of and to the below described lands and premises from, and of each and all defendants as follows: From defendants O. M. Busby and L. M. Michael upon their answers; from defendants M. T. Lyles, Alamo Home Builders and Richey & Casey by default; from defendants J. A. Nix, Wallace Rogers, E. Deutsch and Clay Coker on their respective disclaimers.
“ ‘It is further ordered that defendant J. A. Nix and Wallace Rogers each go hence without day and recover their respective costs herein for which let execution issue.
“ ‘It is further ordered that defendant E. Deutsch and Clay Coker each be adjudged to pay his respective costs herein for which let execution issue.
“ 'It is further ordered and decreed that plaintiff recover of and from defendants L. M. Michael, O. M. Busby, M. T. Lyles," Alamo Home Builders, a corporation, and Richey & Casey, a firm composed of R. A. Richey and L. A. Casey, and from each of them, all other costs herein incurred not otherwise adjudged and for which let execution issue. That the plaintiff have also his writ of possession vesting in him the title and possession of and to the following described lands: (Description here omitted)
“ ‘And it is further ordered, adjudged and decreed that any and all right, title, claim or interest heretofore or now existing in favor of said defendants and each of them to said land is hereby cancelled and held for naught, and plaintiff’s title thereto is in all things quieted.
'“The State of Texas,
“ ‘County of Frio.
“ ‘I, Sam Johnson, Clerk of the District Court in and for Frio County, Texas, do hereby certify that the above and foregoing is a true and correct copy of the judgment in the above styled and numbered cause, as the same appears of record in Vol. 1, Pages 1S9 and 160, of the Minutes of the District Court, Frio County, Tex.
“ ‘Given under my hand and seal of office, this the 20th day of April, A. D. 1916. “‘(Seal) Sam Johnson,
“ ‘Dist. Clerk, Frio Co. Texas.’
“6th. And whereas, after said false and fraudulent judgment had been taken in said District Court of Frio County, and after its adjournment for its term, the said Oscar M. Busby did first disclose to said Louis M. Michael the said false, fraudulent and covinous conspiracy and agreement in writing signed by said H. E. Mc-Keen and himself, whereby the valid, legal and subsisting judgment lien in favor of said Louis M. Michael, on the lands described in said McKeen judgment holding said judgment lien to be subordinate to said false and fraudulent claim and demand of said McKeen, was obtained, thus hindering, delaying and defrauding Louis M. Michael of his just and legally established debt of about seven thousand dollars with 8% interest per annum thereon.
“7th. And whereas, thereafter and on the Sth day of August, 1916, the said O. M. Busby did file his suit No. 1477 in the District Court of Frio County, Texas, against said H. E. McKeen to set aside and hold for naught said judgment, for the false, fraudulent and covinous practices entering into the same and clearly proved and established by said fraudulent and false contract and agreement of March 10, 1916, signed by said McKeen and said Busby.
“8th. And whereas, it has been made to appear to Louis M. Michael and to Leo Tarleton and Ryan & Matlock, his attorneys, that Mrs. Lorena Busby, wife of said Oscar M. Busby, is a bona fide and just creditor of her husband for a portion of the purchase price, her separate estate, of the land described in said McKeen judgment last set out; and in consideration of the premises, — ■
“Now, therefore, it is hereby agreed, understood and contracted by and between Oscar M. Busby and Mrs. Lorena Busby, parties of the first part, acting under the advice and consent of John T. Bivens, their attorney, and Louis M. Michael, party of the second part, acting under the advice and consent of Leo Tarle-ton and Ryan & Matlock, his attorneys, that said Mrs. Lorena Busby, joined by her husband to authorize, will appear and enter her appearance by intervention in said suit No. 1477 styled Oscar M. Busby v. H. E. McKeen, now pending in the District Court of Frio County, Texas, and assert her claim as creditor of her husband for the amount of indebtedness due her by reason of the proceeds of the gift from her father, that went into the purchase price of said lands last described when conveyed to her husband; and on the other part, it is understood, agreed and contracted, that Louis M. Michael shall also intervene in said suit No. 1477, styled O. M. Busby vs. H. E. McKeen, to set aside said false, fraudulent and covinous judgment obtained in said District Court on March 10, 1916, and to revive his judgment lien fixed as alleged on said land by said Louis M. Michael, which it is now admitted is about the amount yet due of seven thousand dollars; and that both said O. M. Busby and Lorena Busby will in every way they can facilitate the early trial of said cause, and will freely and frankly as witnesses, disclose and truthfully state the facts as they exist, and will do. all they can to legally revive and restore the lien the said Louis M. Michael acquired on the said described tract of land by the abstracting and filing his abstract of judgment in the abstract of judgment record of Frio County, Texas.
“And it is further understood, agreed and contracted, and this is an essential part of this agreement entered into and made part of this contract, that all parties hereto will aid by all legal and proper means to carry this agreement into effect, that the Michael judgment lien as it existed on the abstract judgment record of Frio County, Texas, on and prior to the 10th day of March, 1916, shall be revived and foreclosed with all convenient legal speed, and an order of sale issued for the sale of said land described herein, and an execution of said judgment of said Louis M. Michael; and in the event of the revival of said judgment lien, issuance of order of sale and of sale thereunder that he, said Louis M. Michael, will accept the sum and amount of Twenty-five Hundred Dollars, with five hundred dollars attorney’s fee to be paid Leo Tarle-ton, and Ryan & Matlock, attorneys for said Michael, on said intervention suit, and costs of suit, in all Three Thousand Dollars, and costs, in full settlement and compromise of said judgment lien or otherwise against said Oscar M. Busby in favor of said Michael; the said amount to be paid in cash, or at the option of Mrs. Lorena Busby, and Oscar M. Busby, or other assignee or holder of her interest in this contract and agreement, to be secured by first lien on said described land, or other real property satisfactory to the holders and each of them, of the Three Thousand Dollars to be paid as compromise of the Michael judgment against Oscar M. Busby; and in the event said compromise amount is not paid in cash but the same is deferred and secured as above provided, then said Three Thousand Dollars shall bear eight per cent interest per annum, and time of payment fixed at not more than two years from the date this offer of compromise takes effect for cash in the first instance.
“And for further and more explicit understanding, it is agreed and contracted, that should Louis M. Michael be the purchaser of said land upon which his lien rests by a credit on said judgment by his bid, for the full amount of his said judgment of about seven thousand dollars, more or less, he will, irrespective of how much credit on said judgment his purchase price of said land may be, he agrees, upon payment of said compromise amount of three thousand dollars to convey by special warranty deed, the land above described, should he get sheriff’s deed to the same, to Mrs. Lorena Busby, or to any other, person she may in writing designate as the vendee thereof.
“It is well understood that the said Louis M. Michael is agreeing to and binding himself to take less than one-half of the unpaid judgment now valid and subsisting in his favor against Oscar M. Busby and will release said Oscar M. Busby from any further payment on said judgment, when this compromise settlement is completed and carried into effect, and that time in which it is to be closed is important, and all parties pledge themselves to do all in their power legally and proper to be done to secure at as early date as possible the judgment of the matters in issue, the sale of said land and completion of this agreement;’ but should said judgment lien of said Louis M. Michael be not revived, or if revived, not foreclosed for any reason, or the said three thousand dollars, compromise amount of said judgment of said Louis M. Michael against said Oscar M. Busby, be not paid or secured as provided, then it is understood the consideration for .this contract shall be held to have failed, and the proposition for compromise made herein by said Louis M. Michael will no longer exist.
“Wherefore, we Lorena Busby, joined by her husband, Oscar M. Busby, to authorize, parties of the first part, and Louis M. Michael, party of the second part, acting under the advice and consent of their counsel respectively, to-wit: John T. Bivens, Counsel for Lorena Busby and Oscar M. Busby, and Leo Tarleton and Ryan and Matlock, as Counsel for Louis M. Michael, do each sign this agreement in quintuplícate, each being an original, as if it was only one,- this 16th day of September, A. D. 1916.”

(Contract signed by both parties and their attorneys).

The performance of the several obligations on the part of Lorena and O. M. Busby referred to in the contract is alleged to- have been by a series of parol agreements alleged in plaintiffs’ fifth amended original petition, the effect of which, ap-pellee claims, was to relieve Lorena Busby from all obligations thereof while still preserving her rights in said property.

Louis M. Michael died in 1920, leaving by will all of his property to his surviving wife, Olga Michael.

Olga Michael died in 1927 leaving by will her estate to her three sons, and on June 10, 1927, the other two brothers conveyed the property to Arthur M. Michael.

The court overruled all exceptions of both parties, to which exception was made by plaintiffs. The case was tried with a jury.

At the conclusion of the evidence the court instructed a verdict in favor of defendant Arthur M. Michael for the title and possession of the land in controversy and removing cloud from title, and instructed verdict against Arthur M. Michael and in favor of O. M. Bitsby on Michael’s cross action for damages. The court further decreed that Arthur M. Michael recover from plaintiffs, Ethel Busby Gray, her husband, and the other plaintiffs, all named, the land involved and fully "described in the judgment.

Opinion

The written contract of September 16, 1916, copied above, is the foundation of this suit, is made a part of appellants’ petition, and appellants’ assignments are considered in reference thereto.

Appellants present three assignments, but we think the first assignment is the only one we need to consider. It is lengthy, but we copy it in full: “The trial court erred in instructing the jury to.return a verdict against the plaintiffs and in favor of the defendant, over the objection of the plaintiffs, because the evidence conclusively showed that Lorena Busby was the actual, equitable owner of the 692 acres of land sued for, as shown by a written contract executed by Lorena Busby et vir, and L. M. Michael. And that at the time of the execution of this written contract one H. E. McKeen had recovered a judgment foreclosing a supposed lien on this land against O. M. Busby et al (Lorena Busby not being a party to this suit), among which was L. M. Michael. That in said contract of September 16, 1916, and two supplemental oral agreements for a valid and sufficient consideration L. M. Michael agreed to purchase the prior vendor’s lien note for Lorena Busby in order to save the land for Lorena Busby and agreed to intervene in the suit No. 1477, Busby v. McKeen, seeking to cancel the said McKeen judgment, and to foreclose the first lien as well as the other liens on said "land, and to buy in the land at foreclosure sale and to hold the land for Lorena Busby and to deed the land to her by a special warranty deed upon the payment of $3,000.00 as set out in said written contracts and two supplemental oral agreements (which were fully performed by L. M. Michael), and Lorena Busby did thereafter tender to L. M. Michael the $3,000.00 as contracted for, and thereupon L. M. Michael persuaded Lorena Busby to permit him to carry this debt which was agreed to by both L. M. Michael and Lorena Busby, and that L. M. Michael never did deny or claim that he was not holding this land for Lorena Busby and that after-wards Lorena Busby tried to pay to Arthur M. Michael, the defendant in this suit, the amount due on her debt to L. M. Michael, and has tendered upon the trial of this case in cash, in open court the full amount of the debt, all interest, taxes and costs and still tenders the same to the defendant in satisfaction of Lorena Busby’s debt, and she demands a deed to her land as provided in said contract; and the plaintiffs occupied the land in question until 1932, and all of these issues in this cause should have been submitted to the jury.”

Because of the supplemental oral agreements, referred to in the assignment, and the modifications and changes of agreement upon which the suit is based made by the parol agreements and often referred to in appellants’ fifth amended original petition, the trial court concluded, and so held, that the written agreement, by reason of the subsequent parol changes, was unenforceable by reason of the statute of frauds; that a contract required to be in writing may not be modified, changed or altered by subsequent oral agreement; that any such oral changes, by reason of the statute of frauds, destroys the agreement.,

Now the suit is based upon the contract of September 16, 1916, and, as the assignment states, “two supplemental oral agreements.” The record shows that the written contract was modified, changed and altered by the subsequent oral agreement. The petition in many places refers to the modifications and changes in the written contract made by the subsequent oral agreement. In instances changes were made by suits in the courts.

Article 3995 of thé Revised Civil Statutes requires the contract here to be in writing, and any oral modification thereof is prohibited by the statute of frauds.

The law is clearly stated by Judge Smedley, for the Commission of Appeals, in Robertson v. Melton, 131 Tex. 325, 115 S.W.2d 624, 118 A.L.R. 1505, and is to the effect that parties to a written contract coming within the provisions of the statute of frauds may not, by mere oral agreement, alter one or more of the terms thereof, and thus make a new contract resting partly in writing and partly in parol, and states the reason for the rule. Judge Smedley refers to many cases as sustaining his opinion.

In the opinion it is said, as in this case, that there are authorities suggesting qualification of the rule stated. Judge Smedley discusses the rule as to modifications, and as stated in Kistler v. Latham, Tex. Com. App., 255 S.W. 983, and held, as we understand it, that the matter sought to be modified or altered by parol was required to be in writing, and in fact in the writing it could not be modified by subsequent parol agreement.

It seems to us that a similar condition is here as in the Robertson v. Melton case and in the Kistler v.' Latham case.

Now while we think the evidence is such as shows that Lorena Busby’s money bought the property and that the property was her separate estate, as contended by appellants, that is not the question before us.

For reasons stated we have concluded that the trial court was not in error in instructing the verdict and in rendering the judgment.

The case is affirmed.

On Rehearing.

SUTTON, Justice.

As disclosed in the original opinion in this case, the court, at the conclusion of all the testimony, instructed a verdict for the defendant. The instruction of the verdict and the rendition of the judgment are based upon the court’s construction of the written contract copied in full in the original opinion. He construed it to be a contract for the sale of lands, and therefore not subject to oral modifications. The correctness or otherwise of the court’s construction of the contract and the instruction of the verdict is the sole question to be determined on this appeal.

This court in its original opinion affirmed the judgment. The consideration now is on the motion for rehearing.

We have concluded the trial court was in error, and likewise this Court in its original opinion.

Of course, if a contract is ambiguous or difficult of construction the situation of the parties and their relation to the subject matter at the time the contract was made may always be looked to for the purpose of interpreting the contract. The evidence in this case, from both interested and disinterested sources, establishes the fact that Mrs. Busby furnished, out of the funds inherited by her from her father’s estate, to the extent of $2,000, the cash payment made on the tract of land involved in this suit, and that it was not a loan out of her separate funds. How the balance of the purchase money in the sum of $3,000, for which a vendor’s lien note was executed, was paid may become a question of fact to be determined on the trial of the case. It may be presumed that Michael and his attorneys, at the time they entered into the contract of September 16, 1916, knew the facts as they were and as developed on the trial of this cause, and therefore knew that Mrs. Busby was the owner of a two-fifths interest in all events in the lands. All the parties knew at that time the record title had gotten into McKeen.as a result of the fraud of himself and O. M. Busby. Mrs. Busby, on September 16, 1916, was interested in protecting her interest in the land. Michael held a deficiency judgment against O. M. Busby; had abstracted it in Frio County for the purpose of fixing a judgment lien against the land in the name of O. M. Busby. Michael likewise was interested in protecting any interest that he might acquire in the land by virtue of his abstract of judgment. To further their common interests Michael and Mrs. Busby, joined by her husband, therefore, entered into the contract of September 16, 1916. The heart and core of that contract is found in the second paragraph following the numbered paragraph “8th.”

We think it plain that Louis M. Michael agreed to sell, and Mrs. Lorena Busby agreed to buy, the judgment Michael held against her husband, O. M. Busby, for the sum of $3,000 and costs. That agreement is found in this recitation in the paragraph referred to: “ * * * and in the event of the revival of said judgment lien, issuance of order of sale and of sale thereunder, that he said Louis M. Michael, will accept the sum and amount of Twenty-five Hundred Dollars, with Five Hundred Dollars attorney’s fee to be paid Leo Tarleton, and Ryan & Matlock, attorneys for said Michael, on said intervention suit, and costs of suit, in all Three Thousand Dollars and costs, in full settlement and compromise of said judgment lien or otherwise against said Oscar M. Busby in favor of- said Michael; * *

This is the meat of their agreement, and there is no reference whatever made to the sale and purchase of any land, but it refers to a sale and purchase of the judgment and judgment lien against Oscar M. Busby. The contract continues with a provision that the amount to .be paid may be in cash, or, at the option of the Busbys or other assignee or holder of her interest in this contract and agreement, deferred for two years and draw eight per cent interest, thereby making it plain that she and they had in mind the procurement of one who had the money and could and would come to her rescue; the contract reciting further that the $3,000 is to be paid as compromise of the Michael judgment against Oscar M. Busby.

It is perfectly clear that the parties contemplated some one other than the Busbys or Michael might become the purchaser at the sheriff’s sale of the land. Had that occurred, and some one bid any sum in excess of the $3,000 and costs, Mrs. Busby would have been entitled to the excess and owned the judgment against her husband. Had Mrs. Busby become the purchaser at the sheriff’s sale and neither paid the money nor given the formal mortgage as provided for in the contract, equity would have regarded that done which ought to have been done, and construed the contract of September 16, 1916, to be a mortgage in favor of Michael to secure his debt. Hicks v. Morris, 57 Tex. 658, 662; Boehl v. Wadgymar, 54 Tex. 589; Taylor v. H. J. Huck & Co., 65 Tex. 238, 242; Texas W. Ry. Co. v. Gentry, 69 Tex. 625, 8 S.W. 98; Johnson v. Portwood, 89 Tex. 235, 248, 34 S.W. 596, 787; Parks v. O’Connor, 70 Tex. 377, 385, 8 S.W. 104; Dunman v. Coleman et al., 59 Tex. 199.

There can be no distinction made as to the situation of the parties. The relation of debtor and creditor remained the same. Michael’s deed, therefore, was nothing more nor less than a mortgage. What happened afterwards is a matter of pleading and proof. Of course it was contemplated that Michael might become the purchaser at the sheriff’s sale, and that he might therefore take the sheriff’s deed to the property. This is emphasized in the paragraph following the one last referred to in this language: '“ * * * that should (meaning nothing more than 'if’) Louis M. Michael be the purchaser of said land upon which his lien rests by a credit on said judgment by his bid, for the full amount of his said judgment of about seven thousand dollars, more or less, he' will irrespective of how much credit on said judgment his purchase price of said land may be, he agrees, upon payment of said compromise amount of three thousand dollars to convey by special warranty deed, the land above described, * * This provision is merely emphasizing the fact that he recognized Mrs. Busby’s superior interest in the land and was willing therefore to accept less than one-half the amount of his judgment, not for the land described in the contract and involved in this suit, but for his judgment against Oscar M. Busby. That was further emphasized in the next paragraph wherein the recitation is made that he is agreeing and binding himself to take less than one-half of his unpaid judgment, valid and subsisting in his favor against O. M. Busby, and that he will release Busby from any further payment on said judgment when the compromise settlement is completed.

The only provision to be found in the whole of the contract, where it relates to the agreement that could possibly suggest or lead anyone to in any wise think the contract was one for the sale of real estate, is' the provision wherein he agreed to convey the land to Mrs. Busby by special warranty deed in the event he should become the purchaser at the sheriff’s sale.

What was or could have been the reason to anticipate that Michael might revive his judgment lien and not foreclose it? As against McKeen, assuming the fraud, it was good and could be foreclosed; as against Mrs. Busby it could not.

From the standpoint of Michael and his attorneys, there were two apparent reasons why the Busbys should not and did not intervene in Cause No. 1477: (1) If the facts were permitted to develop as they did in this trial, and as we must presume they were known to be, the court would not have permitted the foreclosure as against Mrs. Busby’s interest; (2) a common fight and joint effort might make the issues of fact difficult in the light of the previously admitted conspiracy and fraud of O. M. Busby. This latter situation confronted the Busbys and their attorney and probably was the reason why they remained out.

The testimony shows that Louis M. Michael was a moneylender in San Antonio. The undenied testimony is that O. M. Busby pledged a $9,000 vendor’s lien note, the property of his wife, to Michael to secure a note for $7,000; that the proceeds of the $7,000 were, $100, for which the receipt (exhibit G) was given, a check for $5,900, and $1,000 retained by Michael as a commission for making the loan. The deficiency judgment for approximately $7,000, abstracted and mentioned in the agreement of September 16, 1916, was in the suit brought by Michael on this $9,000 note.

We have concluded, therefore, that the contract is not one for the sale of real estate, but was one for the sale and purchase of the judgment against Oscar M. Bushy, and that the motion for rehearing should be granted, the former judgment of this court and that of the trial court reversed and the cause remanded for a new trial, and it is so ordered.