author: BLAIR, Justice.

text:
    G. & H. MOTOR FREIGHT LINES, Inc., et al. v. RAILROAD COMMISSION et al.
    No. 8978.
    Court of Civil Appeals of Texas. Austin.
    May 1, 1940.
    Rehearing Denied May 29, 1940.

      Spears, Conger, Baskin & Spears, of San Antonio, Robert W. McKissick and W. W. Heath, both of Austin, and Curtis E. Hill, of Dallas, for plaintiffs in error.
    Rawlings & Sayers and Nelson Scurlock, all of Fort Worth, for defendant in error Red Arrow Freight Lines, Inc.
    Gerald C. Mann, Atty. Gen., and Geo. W. Barcus and Glenn R. Lewis, Asst.
    Attys. Gen., for defendant in error Railroad Commission of Texas.
   BLAIR, Justice.

Appellants, G. & H. Motor Freight Lines, Inc., Brown Express Company, C. T. English, and Charles Herder, Jr., instituted this statutory proceeding against ap-pellees, the Red Arrow Freight Lines, Inc., and the Railroad Commission, to set aside an order of the Commission authorizing the Red Arrow to operate certain common carrier motor carrier service between Bremond and LaGrange, to cancel the certificate of authority, and to perpetually enjoin the Red Arrow from any operation thereunder. From the adverse judgment of the trial court appellants have appealed.

The following statements from appellees’ brief with respect to 'the nature and result of the proceeding will serve as a preliminary statement to each question presented on this appeal:

"The Red Arrow is a motor carrier operating over routes connecting Fort Worth, Dallas, Houston, San Antonio and cities in the Rio Grande Valley. One of the routes served by it extends from Dallas south to Bremond via Ennis, Corsicana and Mexia. Another route extends from Houston to San Antonio via Rosenberg, Eagle Lake, Columbus, Schulenburg and Luling. There was a connection extending from Schulenburg north to LaGrange. Finally, the Red Arrow had a route extending from San Antonio to Victoria via Cuero. This line connected with one extending from Houston to Corpus Christi and points in the Rio Grande Valley.
“On April 8, 1936, the Red Arrow filed an application, numbered 1991 on the docket of the Commission, for authority to operate a common carrier motor carrier service from Bremond to Cuero via Hearne, Rockdale, Giddings, LaGrange, Schulenburg and Yoakum.' After a hearing- the Commission entered an order, dated March 30, 1937, denying the application.
“On September 16, 1937, Red Arrow filed another application, numbered 2126 on the docket of the Commission, for authority to operate a common carrier motor carrier service over the same route between Bremond and Cuero, conditioned, however, first, that the applicant be prohibited from serving intermediate points between Bre-mond and LaGrange on freight originating in and destined to Houston, San Antonio, Austin or Dallas, and prohibited from serving San Antonio or Austin over this route on freight originating in or destined to Dallas or any intermediate point between LaGrange and Bremond, and prohibited from serving Austin and San Antonio on freight originating in or destined to Waco, and prohibited from serving intermediate points between ' LaGrange and Rockdale on freight originating in or destined to Waco, but providing that none of the restrictions should limit or restrict the operations by virtue of other certificates of public convenience and necessity that had theretofore been issued to the Red Arrow by the- Commission. Secondly, as to that portion of the route between Schulenburg and Cuero, the application was conditioned that Red Arrow be prohibited from serving Halletsville on freight originating in or destined to Houston.
“After notice to all interested parties, a hearing was had wherein plaintiffs (appellants herein), among others, appeared and contested the application before the Commission. However, on September 27, 1938, the Commission entered an order granting the application. This order provided:
“ ‘It, is further ordered by the Commission that this order shall not be final and become effective until twenty days after it is actually signed by the Commission; provided, however, that if a motion for rehearing of the application be filed by any party at interest within such twenty day period, this order shall not become effective until such motion is overruled, or, if such motion be granted this order shall be subject to further action by the Commission.’
“On October 8, 1938, the plaintiffs (appellants herein) filed a motion for. rehearing on the application with the Railroad Commission, wherein they prayed that the order entered by the Commission on September 27, 1938, and just referred to, ‘be stayed until the rehearing can be set down and conducted under the rules and regulations of the laws of the State of Texas and that protestants be given an opportunity to orally argue the matters involved before the entire Commission.’ On November 15, 1938, the Commission entered an order ‘that' protestants’ motion for rehearing in the above application be and the same is hereby granted.’ Finally on January 12, 1939, the Commission entered an order reciting that it had reconsidered the application and the oral argument made after.the motion for rehearing was filed and granted, and had reached the conclusion that the errors assigned in the motion for rehearing were not well founded. It was, therefore, ordered that the order dated September 27, 1938, granting the application be reaffirmed and made final.
“Following the order of January 12, 1939, just referred to, plaintiffs (appellants herein) filed a second motion for rehearing on January 18, 1939, and it is claimed by them that the Commission entered an order, dated January 19, 1939, granting this second motion for rehearing. However, the trial court found that the instrument referred to ‘was never intended nor entered as an order of the Railroad Commission.’ And in compliance with the order of January 12, 1939, which appears to be a final- order in every respect, granting the application of Red Arrow, the Railroad Commission on January 26, 1939, issued to the Red Arrow Certificate No. 3009, authorizing the service applied' for.”

Appellants contend that since the application of Red Arrow in Common Carrier Motor Carrier Docket No. 1991, denied by 'the Commission on April 30, 1937, was in all material respects similar to or identical with its application in Common Carrier Motor Carrier Docket No. 2126, filed September 26, 1937, and no changed condition after the denial of the first application having been shown, the Commission should have sustained the plea of res adjudicata of appellants based on the order of denial in the Docket No. 1991 application. This plea of res adjudicata was presented to the Commission on its hearing of the Docket No. 2126 application and denied by it. It was also presented to the trial court on the appeal and by it denied. The denial of the plea of res adjudicata by the Commission and the trial court is sustainable upon two grounds. In the first place an examination of the two applications shows a substantial difference between them. By the first application in Docket No. 1991, Red Arrow sought a certificate authorizing a common carrier motor' carrier service between Bremond and Cuero via Hearne and other intermediate towns. This was denied. The subsequent application in Docket No. 2126 sought a certificate to operate over the same route, and contained conditions or restrictions so as to prohibit service to intermediate points between Bremond and Cuero, and specifically restricted other services from named points on the route to or from Houston, San Antonio, Austin, Dallas, Waco, and other places. These restrictions were not contained in the first application. The second application was also conditioned that Red Arrow be prohibited from serving Hallettsville on freight originating in or destined to Houston, which was not contained in the first application.

In the second place, there was substantial evidence showing a change of conditions subsequent to the time the Commission denied the first application and before the granting of the second application. These changed conditions arose by reason of the fact that Red Arrow had purchased certificates of other operators which increased its volume of freight moving from Fort Worth and Dallas to South Texas. By its application in Docket No. 2126, Red Arrow sought to handle this and other freight over a direct route to the south, which prior to this application was compelled to follow a route going east from Mexia to Palestine, from Palestine to Houston, and thence to San Antonio, Corpus Christi, and other towns covered by Red Arrow’s certificates in the Rio Grande Valley.

It is manifest from the facts stated that the order of the Commission denying the first application did not purport to determine the question of the public convenience and necessity for the through service from Fort Worth and Dallas south only, because it had to determine the question in the light of the fact that the first application also sought authority to serve all intermediate towns from Bremond to Cuero. Nor did it determine the question of the public necessity and convenience of the through service on the first application in the light of the conditions which developed subsequent to such hearing by reason of the fact that Red Arrow purchased other certificates which would require the handling of additional freight over a direct route to the south rather than over the circuitous route above described.

The parties do not disagree upon the rule that if the second application was substantially different from the first application, or that if there had been a substantial change of conditions between the time of denial of the first application and the granting of the second application, the doctrine of res adjudicata would not apply. The differences of the parties arise on the question of whether there was any evidence showing a substantial difference between the two applications, or showing a substantial change of conditions arising subsequent to the denial of the first application and before the granting of the second application. We hold that the facts above stated constitute substantial evidence sustaining the action of the Commission on the res adjudicata question. As sustaining our conclusion on this question we cite: Magnolia Petroleum Co. v. New Process Production Co., 129 Tex. 617, 104 S.W.2d 1106; Hermann v. Allen, 103 Tex. 382, 128 S.W. 115; Bryson v. Mid-Kansas Oil Co. Tex.Civ.App., 297 S.W. 1045, writ refused; Galveston Chamber of Commerce v. Railroad Commission, Tex. Civ.App., 137 S.W. 737; 26 Tex.Jur. 60.

’Appellants further contend that the order of the Commission entered September 27, 1938, in Docket No. 2126 is void, because pursuant to their motion filed October 8, 1938, the Gommission on November 15, 1938, granted a rehearing, which had the effect of granting a new trial as in a court, and set aside all prior proceedings had in Docket No. 2126, including notice, hearing, and the order of September 27, 1938, granting the application of Red Arrow for the common carrier motor carrier service in question, leaving the application in Docket No. 2126 in the same status that it occupied immediately after it was filed and before it was set for hearing.

In this connection appellants also assail the order of the Commission dated January 12, 1939, granting the common carrier motor service in question and certificate of authority therefor, because it is contended that after the order of November 15, 1938, granting the rehearing, the status of the application in Docket No. 2126 was the same as if a trial court had granted a new trial, setting aside all prior orders in Docket No. 2126, including notice and hearing, and required the Commission to proceed after notice as in a trial de novo; and that all orders entered after the granting of the rehearing on November 15, 1938, were void because entered (1) without notice and hearing; (2) without any evidence to support them; and (3) without the required written findings of fact as provided by Sec. 12(a) of Article 911b, Vernon’s Ann. Civ. St.

Neither of these contentions is sustained.

It is apparent from all of the orders of the Commission above detailed that it intended to and did retain jurisdiction over the application presented by Red Arrow in Docket No. 2126 until its final order of January 12, 1939, which finally determined the controversy and granted the application by reaffirming its order of September 27, 1938, and directing that the certificate of authority to operate the common carrier motor carrier service in question be issued to Red Arrow. This intention of the Commission is clearly stated in its order of September 27, 1938, which granted the application, but postponed its effective date for twenty days in which a motion for rehearing might be filed, and in which event the order specifically provided as follows: “ * * * that if a motion for rehearing of the application be filed by any party at interest within such twenty day period, this order shall not become effective until such motion is overruled, or, if such motion be granted this order shall be subject to further action by the Commission.”

That appellants understood this provision of the order as continuing the jurisdiction of the Commission is shown by their motion for a rehearing filed on October 8, 1938,-wherein they prayed that the order of September 27, 1938, “be stayed until the rehearing can be set down and conducted under the rules and regulations of the laws of the State of Texas, and that protestants (appellants herein) be given an opportunity to orally argue the matters involved before the Commission.” Appellants did orally argue their motion for rehearing before it was granted on November IS, 1938, and the final order of the Commission, dated January 12, 1939, recited that it had reconsidered the application and the oral argument made after the motion for rehearing was filed, and had reached the conclusion that the assignments of error contained in said motion were not well founded; and therefore declared that the order dated September 27, 1938, granting the application be reaffirmed and made final, and that the certificate of authority be issued for, the service in question. Thus it is clearly shown that the Commission by every act and order prior to its final, order of January 12, 1939, intended to reconsider the matter in controversy on the basis of the record of the hearing and order of'September 27, 1938, which order was specifically suspended .“subject to further action of the Commission.” The wisdom of such procedure is manifest, because the Commission is not confronted with the question of whether the order granting the application would authorize operation from its date. It has notified the parties that the order is suspended pending the motion for rehearing and “subject to further action of the Commission,” and it must be held that the parties understood that the Commission after its order of November 15, 1938, granting the motion for rehearing, intended to reserve jurisdiction for the purpose of finally granting or refusing the application in whole or in part, and to accordingly issue the certificate authorizing the operation.

If, as contended for by appeh lants, the order of. November 15, 1938, . granting the rehearing, is analogous to the granting of a motion for a new trial in a civil case, then the case of Gulf, C. & S. F. Ry. Co. v. Muse, 109 Tex. 352, 207 S. W. 897, 4 A.L.R. 613, is in point and sustains our view that under the procedure above detailed the Commission necessarily retained jurisdiction and finally disposed of the matters in Docket No. 2126, on January 12, 1939. In the Muse case the court extended its term because of shortness of time. The jury returned a verdict against the railroad for $4,000. Within two days the plaintiff filed a motion for a new trial, which was later granted by the court. The railroad company immediately filed a motion for rehearing and to set aside the order granting the new trial, whereupon the court directed the parties to brief the questions presented; and several weeks thereafter the court granted this motion, and finally rendered judgment for plaintiff for $4,000. The Court of Civil Appeals held that the granting of plaintiff’s motion for a new trial ended the extended term of the court, and that all subsequent orders made in the cause, were without authority in law and void. The Supreme Court, however, reversed the judgment of the Court of Civil Appeals, holding that the jurisdiction of the court over both the subject matter and the parties continued until all issues of both law and fact had been finally determined, and that since the order vacating the award of the new trial ' was made before the end of the extended, term, its validity was beyond question. In. reaching this conclusion, the court reasoned that the court retained jurisdiction' of all steps leading to a final judgment, including the award of a new trial and the setting aside of such an award to correct error or injustice. This rule should apply with equal or greater force to a hearing before the Commission for a certificate of necessity and convenience to operate motor carrier service, because such proceedings do hot require strict rules of pleadings and evidence as do civil cases, and the Commission does not have terms as do the courts. Railroad Commission v. Brown Express, Tex.Civ.App., 106 S.W. 2d 327. And particularly should it be held in the instant case that the Commission retained jurisdiction, because by its order of September 27, 1938, granting the application, it expressly provided that if a motion for rehearing were filed and granted, then “this order 'should be subject to further action by the Commission.”

The contentions that the order of January 12, 1939, overruling the motion for rehearing, finally granting the common carrier service in question and issuing the certificate therefor, was made without notice and hearing, without evidence to support it, and without the required written findings of fact by the Commission, are not sustained.

There is no dispute that appellants had notice of the application in Docket No. 2126; that they appeared and that evidence was introduced; that the Commission filed a lengthy opinion granting the application on September 27, 1938, which opinion contained a complete finding of fact on the various issues in controversy; and no attack is made upon the sufficiency of these facts to sustain the order of September 27, 1938, granting the application. It is also manifest that after ,the hearing and order of September 27, 1938, the Commission intended to retain jurisdiction of the application in Docket No. 2126, not as an original matter, nor as a matter for a trial de novo; but as a case which already had been tried and was pending on motion for a new trial or for a rehearing to correct any error that may have been pointed out in the motion. Nor is there any dispute that appellants filed this motion for a rehearing and were afforded a hearing and argument thereon. This motion was granted “subject to further action by the Commission.” Appellants did not request the taking of further testimony either iij their motion or otherwise so far as is revealed by the record; and this fact alone distinguishes the instant case from the case of Sproles Motor Freight Line v. Smith, Tex.Civ.App., 130 S.W.2d 1087, relied upon by appellants. The record is without dispute that they had notice of each step taken by the Commission until it finally disposed of the matter on January 12, 1939. This procedure meets every test of due process as to notice and hearing, because appellants did have a fair opportunity to appear and defend their interests. Mabee v. McDonald, 107 Tex. 139, 175 S.W. 676. And rehearings or new trials are not essential to due process of law, either in judicial or administrative proceedings. Pittsburgh C. C. & St. L. R. Co. v. Backus, 154 U.S. 421, 14 S.Ct. 1114, 38 L.Ed. 1031; Sproles Motor Freight Line, Inc. v. Smith, Tex. Civ. App., 130 S.W.2d 1087, writ refused; Railroad Commission v. Brown Express, Tex. Civ.App., 106 S.W.2d 327; Georgia Public Service Com. v. United States, 283 U.S. 765, 51 S.Ct. 619, 75 L.Ed. 1397; Baltimore & O. Railroad Co. v. United States, 304 U.S. 58, 58 S.Ct. 767, 82 L.Ed. 1148; United States ex rel. Delaware & H. R. Corp. v. Interstate Commerce Com., 60 App.D.C. 83, 51 F.2d 429. However, in the instant case appellants were permitted to file a motion for rehearing and to present oral argument thereon, which motion after being considered by the Commission was overruled.

Appellants further contend that if this court holds that the filing of the motion for rehearing and the action of the Commission thereon retained its jurisdiction over the subject matter until its order of January 12, 1939, then, on January 19, 1939, the Commission granted a second motion for rehearing, which set aside the order of January 12, 1939, and therefore left the application in Docket No. 2126 pending before the Commission for further proceedings. This contention is predicated upon the fact that appellants, after the final order of January 12, 1939, filed a second motion for a rehearing; and introduced in evidence an order, dated January 19, 1939, purporting to have been signed by Commissioners -Thompson and Sadler, granting this second motion for a rehearing. On this order the name of Sad-ler had been obliterated by ink lines drawn through it, and underneath was written, in the handwriting of Commissioner Sad-ler, the words, “Signature withdrawn S.” These facts sustain the finding and conclusion of the trial court that the instrument or order referred to “was never intended nor entered as an order of the Railroad Commission.”

In any event, it appears that the Commission made a docket entry on January 26, 1939, denying the second motion for a rehearing, and on the same day issued the certificate of convenience and necessity to Red Arrow authorizing the service in question. This concluded the matter so far as concerned the Commission.

The judgment of the trial court is affirmed.

Affirmed.


source: Caselaw Access Project

author: BAUGH, Justice.

license: Public Domain

text:
    HOERSTER v. WILKE et al.
    No. 8904.
    Court of Civil Appeals of Texas. Austin.
    May 8, 1940.
    Rehearings Denied June 5, 1940.

      Agnes Sagebiel and Petsch & Usener, all of Fredericksburg, for appellants.
    N. T. Stubbs, of Johnson City, and J. B. Wieser, of Fredericksburg, for appellees.
   BAUGH, Justice.

D. J. Hoerster, as receiver for Oscar Krauskopf and William Bierschwale who formerly as partners had operated a private bank under the name of Citizens Bank, at Fredericksburg, Texas, brought this suit on August 7, 1934, against Ernst Wilke, Sr., on his promissory note for $3,000, dated January 21, 1931, payable on demand to said bank. Said Receiver also sought to set aside certain assignments and conveyances made by Wilke to members of his family, on the ground that they were without consideration, rendered Wilke insolvent, and were made to defraud his then existing and future creditors. These conveyances consisted of an assignment in June, 1928, of $16,400 in vendor’s lien notes to his wife, Emma Wilke; conveyance to his daughter, Emma T. Wilke, on May 30, 1930, of a house and lot in Fredericksburg; and a conveyance on the same date to two daughters, Sophie Hohman and Hermine Land, of about 500 acres of land in Gillespie County. Ernst Wilke, Sr., in addition to general and special exceptions, and general and special denials, pleaded limitation against the debt; that it was the debt of his son, Ernst Wilke, Jr., on which he was at most only surety; and if liable pleaded as a set-off certain notes payable to Wilke, Jr., which were turned over to the bank as collateral and which he alleged they had negligently failed to collect, but had permitted to become barred by limitation.

His wife, Emma Willce, and the children to whom the conveyances were made, pleaded the three and four-year statutes of limitation, and by cross-action sought to have their titles to the respective properties quieted. Trial was to a jury on special issues and upon their answers thereto judgment rendered in favor of Hoerster, as Receiver, for the full amount of the debt; but cancellation of the conveyances was denied; and title to the respective properties quieted in the grantees. Both Hoerster and Wilke, Sr., have appealed.

We first consider Wilke's appeal. The note in question was executed to take up an overdraft on said bank theretofore made by the Sudden Service Garage of Fred-ericksburg. The bank asserted liability against Wilke, Sr., as against his sworn denial, on the grounds that at the time the overdraft was incurred Wilke, Sr., was a partner with his son in the Sudden Service Garage; or if not in fact a partner, that he was liable for the debt on the ground that he had held himself out to the bank to be such partner and had induced the bank to extend credit to that concern on such representation and belief; or that in any event he had induced the bank to extend such credit on his agreement to see that its debts were paid, or to pay them himself.

These issues were made by this pleadings and the evidence and were submitted to the jury. In response to the various issues submitted the jury found:

1. That Wilke, Sr., was, at the time the debt accrued, a member of the partnership business of Sudden Service Garage;

2. That he held himself out to the officers of the bank as such;

3. That the officers of the bank believed, at the time they extended credit to the Sudden Service Garage, that he was such partner;

4. That a reasonably prudent person would have so believed;

5. That prior to the accrual of said debt Wilke, Sr., promised the officers of the bank that he would be personally responsible for the overdrafts of the Sudden Service Garage;

6. That the bank extended credit to the garage in reliance upon such promises;

7. That Wilke, Sr., did not sign said note as surety for his son.

Wilke’s first contention is that he was entitled to an instructed verdict in his favor in that having denied under oath the existence of the alleged partnership, the burden was upon the plaintiff to prove its existence; and that the evidence wholly failed to do so. ' This contention relating to the proof is not sustained. Such burden was upon the plaintiff to make such proof. On the issues presented the testimony was sharply conflicting. It is not controverted that in August, 1929, the Sudden Service Garage secured an automobile sales agency; that it could not pay for the cars as received; and that arrangements were made with the bank to honor overdrafts for the purchase price of cars received, with the understanding that such overdrafts would be paid off as the cars were sold; and that this type of credit was extended by the bank to the Sudden Service Garage.

As to the circumstances, conditions and representations under which credit ■was extended by the bank, the testimony of Wilke, Sr., and Wilke, Jr., was directly in conflict with that of the officers and employees of the bank. The jury chose to believe the latter and render their verdict accordingly. That being true their findings will not be disturbed.

It was not necessary, in order to create'a partnership liability against Wilke, Sr., for plaintiff to prove an actual partnership agreement between the father and son. Such a partnership liability may rest as well upon estoppel of one or both parties to deny the existence of the partnership relation, where their conduct or representations are such as to lead to the extension of credit to the firm on a legitimate assumption of a partnership relation. In such case it is immaterial whether an actual partnership relation existed or not. Secs. 32 and 33, Tex.Jur. vol. 32, pp. 270-273.

Appellant Wilke next contends that plaintiff’s pleadings asserted liability against him based only upon the existence of an actual partnership relation between him and his son; that recovery must depend upon this ground alone; and that therefore issues 5 and 6 which related to a partnership by estoppel should not have been submitted. That is, that a partnership by ■estoppel was not pleaded in the alternative.

This contention is not sustained. Plaintiff did allege an actual partnership between the father and son. Immediately following such allegation he further pleaded that if he be mistaken in his allegations as to the existence of an actual partnership between them; then that the son was conducting said business, and the father held himself out as a partner and led the bank to so believe, extend credit, etc., on such representations, setting out detailed facts as estopping Wilke, Sr., from denying the existence of a partnership relation. While not expressly designated as an alternative plea, such is the essential nature and result of such allegations and they must be so construed. Under such allegations plaintiff’s right of recovery manifestly would not depend solely upon proof- of an actual partnership relation.

Wilke, Sr., also contends that failure of the trial court to submit to the jury the issue of the offsets pleaded was error. His allegations in this regard were that Ernst Wilke, Jr., had transferred to said bank secured notes payable to him aggregating in amount approximately $1,800 to be applied on the debt of the Sudden Service Garage to the bank; that the sums collected thereon by the bank had not been credited on said debt; and that the bank and the Receiver had negligently permitted some of these notes to become barred by limitation. Manifestly, this was an independent ground of defense, pro tanto, to the note sued upon. It was not submitted to the jury, nor did Wilke request that it be submitted. Consequently, it is deemed to have been waived. See 41 Tex. Jur. § 256, p. 1070, and numerous cases cited in support of the text.

Nor is there any conflict in the findings of the jury that an actual partnership existed between Wilke, Sr., and Wilke, Jr.; that Wilke, Sr., held himself out as a partner and so procured credit; and further that he agreed, in order to obtain credit for the Sudden Sérvice Garage, to personally be liable for its debts. These were alternative grounds upon which his liability was predicated. And the finding, where supported by competent evidence, either of actual partnership, or partnership by estoppel, would merely render immaterial the 'finding of an agreement to be personally liable.

We now consider the appeal of Hoerster. The first contention made is that the trial court erred in refusing to submit to the jury the requested issues as to whether the assignment of the vendor’s lien notes to Mrs. Wilke, and the deeds to his children, were made with the understanding between them that these properties were to still remain the properties of Wilke, Sr. The bona fides of the conveyances, or whether they constituted merely simulated transactions with no intention to pass title to the grantees; was raised by the pleadings. As stated by Judge Gaines in Steffian v. Bank, 69 Tex. 513, 518, 6 S.W. 823, 824, and quoted in Cox v. Payne, 107 Tex. 115, 118, 174 S.W. 817, 818, “The instrument must not only be placed within control of the grantee, but this must be done by the grantor with the intention that it shall become operative as a conveyance.” See also 14 Tex.Jur., § 59, p. 821. If, therefore, Wilke did not intend that this assignment to his wife and the conveyances to his daughters operate to transfer title to them none would pass, and such purported conveyances would afford no basis for even color of title under Arts. 5507 and 5508, R.C.S. 1925.

The evidence was clearly sufficient to raise the issues requested to be submitted. On this question we need look only to the evidence which would support an affirmative answer to the issues requested, and disregard that to the contrary. So considered there was evidence to the following effect: That in 1928 Wilke, Sr., was being sued in San Antonio and. was fearful that his property would be taken away from him, and made the assignment of the vendor’s lien notes to his wife for that reason; that he never delivered possession of said notes to his wife but kept them in his possession, claimed to own them and as late as 1933 offered to hypothe-cate them to the bank as collateral security. That Emma T. Wilke was only 15 years of age when he conveyed her the property in Fredericksburg; that thereafter he continued his control and management thereof, as well as of the ranch property deeded to the other two daughters, renting or leasing same and collecting the rents therefrom, and rendering all of said properties for taxes in his own name continuously up until after the instant suit was filed. All this was done with the full knowledge and consent of the children. While they testified that their father paid to them the rents collected by him, none of them could remember how such payments were made, when, where, nor in what sums. Such evidence was, in our opinion, clearly sufficient to raise a jury issue as to whether Wilke, Sr., ever intended by such conveyances to vest title to said properties in the grantees; and to require the submission of the requested issues.

The next question presented relates to limitation. The suit of Hoerster, Receiver, to set aside the assignment in 1928, of the vendor’s lien notes, and the deeds of May, 1930, was grounded upon fraud. It was not a suit for the land, but a personal action, to which the four-year statute of limitations applies, and which began to run from the date the fraud was committed, or if not disclosed by the transactions themselves, from the date the fraud should have been discovered by the exercise of reasonable diligence. Eckert v. Wendel, 120 Tex. 618, 40 S.W.2d 796, 76 A.L.R. 855; 20 Tex.Jur., §§ 132-134, -pps. 485-487. Nor is the recording of the fraudulent conveyance presumptive notice to the creditor of the fraud. It is but a circumstance, and not notice to the creditor that the recitals of consideration paid are false. The jury found in the instant case, upon sufficient evidence to sustain their finding, that a reasonably prudent person would not have discovered the fraud prior to August 7, 1934. Hence, limitation against the creditors’ action to set aside the conveyances would run from that date.

The jury also found in answer to issues submitted that the daughters of Wilke, Sr., to whom said conveyances were made, had, prior to August 7, 1934, held peaceable and adverse possession of said lands “under title or color of title from the State of Texas” for more than three years prior to the filing of this suit. Based upon this finding, and notwithstanding the findings of fraud, and that the creditor could not in the exercise of ordinary care have discovered such fraud prior to August 7, 1934, the court rendered judgment vesting title to said lands in the grantees and quieted their titles thereto against the creditor.

It seems to us paradoxical to say that a deed fraudulent against creditors from its inception, which Arts. 3996 • and 3997, R.C.S., declare to be void, and which the creditor may within four .years from the date of such deed, or from the date of his discovery of the fraud, have set aside, can as to the grantee who is a recipient of the benefits of such fraud, and without payment by him of a consideration, form the basis of, and sustain, title in him under the three-year statute of limitation (Art. 5507, R.C.S.). Such, however, is the holding as we interpret it, of the Supreme Court in Eckert v. Wendel, supra; Rutherford v. Carr, 99 Tex. 101, 106, 87 S.W. 815, and as applied by us in Watkins Co. v. Gibbs, Tex.Civ.App., 66 S.W.2d 355.

As above stated, however, if there was never any intention of the parties to the deeds to convey title thereby, they never became effective as conveyances and would not sustain title in the grantees under the three-year statute. Because of the error of the court in refusing to sub-i mit these issues the cause must, as to such grantees, be reversed.

The judgment of the trial court in so far as it rendered judgment in favor of Hoer-ster, as Receiver, against Ernst Wilke, Sr., is affirmed. In all other respects, it is reversed and the cause remanded for a new trial.

Affirmed in part and in part reversed and remanded.


author: FOLLEY, Justice.

text:
    COUNTY BOARD OF SCHOOL TRUSTEES OF HALE COUNTY et al. v. MAYFIELD COMMON SCHOOL DIST. NO. 22 et al.
    No. 5222.
    Court of Civil Appeals of Texas. Amarillo.
    April 29, 1940.
    Rehearing Denied June 3, 1940.

      W. D. Benson, Jr., and Geo. S. Berry, both of Lubbock, for appellants.
    W. H. Evans, of Lubbock, and Dan M. Cook and Vincent Tudor, both of Plain-view, for appellees.
   FOLLEY, Justice.

This is an appeal from a temporary injunction restraining the County Board of School Trustees of Hale County, Texas, the Hale Center Independent School District and the trustees of such district from declaring the results of an election held on December 16, 1939 and from entering any orders in connection therewith. The election was held in accordance with articles 2922a and 2922c, Vernon’s Annotated Civil Statutes, for the purpose of determining whether or not the Center Plains Common School District No. 4, the Clements Common School District No. 34, the Stoneback Common School District No. 19 and the Mayfield Common School District No. 22, should be annexed to the Hale Center Independent School District. All of such districts lie wholly within Hale County.

In order to fully comprehend the issues presented herein we deem it necessary to review briefly the factual background of the present litigation.

The Hale ' Center Independent School District has a scholastic population of 326 and an area of 44½ square miles; the Center Plains district a scholastic population of 24 and an area of 20 square miles; the Clements district a scholastic population of 26 and an area of 18 square miles; the Stoneback district a scholastic population of 31 with an area of 20 square miles; and the Mayfield district a scholastic population of 43 and an area of 25 square miles. All of the districts in the aggregate were contiguous and contained as a whole an area of over 100 square miles but consisted of less than 7 elementary school districts. The Hale Center district has a bonded indebtedness of $70,750; the Clements district a bonded indebtedness of $1,500; and the Mayfield district a bonded indebtedness of $4,000. The other districts were not shown to have had any bonded indebtedness.

On June 18, 1938 the County Board of School Trustees of Hale County, purporting to act under the authority of article 2922a et seq., Vernon’s Annotated Civil Statutes, entered an . order annexing the Center Plains district to the Hale Center district. On August 8, 1938 the same board entered its order under the same statutory authority annexing the Clements district to the enlarged Hale Center district. Immediately thereafter an election was held in the enlarged district upon the question of assuming the bonded indebtedness of the districts which election resulted in such assumption.

On July 15, 1939 the County Board of School Trustees, purporting to act under the authority of article 2922a et seq., issued its order annexing the Stoneback district to the combined districts of Hale Center, Center Plains and Clements. It will be noted from the above statement as to areas that the combined area in these four named districts was in excess of 100 square miles, and, therefore, under the provisions of article 2922c, an election in the proposed rural high school district was necessary to determine the question of annexation. No such election was held. However, an election was held in the alleged combined district upon the question of the assumption of the bonded indebtedness of the component districts which resulted in such assumption by the purported enlarged district.

On August 7, 1939 the County Board of School Trustees, also purporting to act under the authority of article 2922a et seq., ordered an election to be held on August 30, 1939 for the purpose of determining whether or not the Mayfield District should be annexed to the alleged enlarged district of Hale Center, Center Plains, Clements and Stoneback. There were 20 votes cast for annexation and 23 against annexation in the Mayfield district in such election. In the Hale Center district as theretofore purportedly enlarged, however, the vote was 106 for and 3 against annexation.

On August 17, 1939, before the above election was held, independently of the present litigation, the Mayfield district instituted Cause No. 5113 in the District Court of Hale County against the County Board and the Hale Center district seeking to restrain the defendants therein from entering any orders annexing the Mayfield district to the enlarged Hale Center district. The court issued therein its temporary restraining order enjoining the County Board and the Hale Center district from proceeding further in the annexation other than holding the election on August 30, 1939 and tabulating the results thereof. In the meantime, in another action independent of the present suit, the State of Texas with the Clements district as the relator instituted a quo warranto proceeding in the same court in Cause No. 5150 in which an attack was made upon the validity of the annexation of the Clements district to the Hale Center district. In Cause No. 5150 wherein the Clements district was the relator, the Hale Center district and the County Board of School Trustees were respondents, and the Center Plains and Stoneback districts were inter-veners. On November 23, 1939 the district court entered a final judgment in Cause No. 5150 declaring void and of no effect all orders of the County Board made and entered attempting to annex or group the Center Plains, Clements and Stoneback districts with the Hale Center district and further decreeing that such districts should be restored to their former status. On the same day in Cause No. 5113 the court rendered judgment permanently enjoining and restraining the County Board of School Trustees and the Hale Center Independent School District from annexing the May-field Common School District to the Hale Center district under the order of August 7, 1939 and under .the election held on August 30, 1939.

Immediately after the two judgments were rendered in the above two causes and on the same day, to-wit, November 23, 1939, the County Board of School Trustees of Hale County entered an order that the Center Plains, Clements, Stoneback and Mayfield common school districts be annexed to the Hale Center Independent School District to form a rural high school under the authority of articles 2922a and 2922c, and ordered an election to be held on December 16, 1939 to determine whether or not such common school districts should be annexed to the Hale Center district. 'The election was held as ordered and the result of the voting in the respective districts was as follows: in the Hale Center district 143 for annexation, 7 against; Center Plains, 19 for, 2 against; Clements, 5 for, 19 against; Stoneback, 11 for, 11 against; and Mayfield, 19 for, 21 against. The result of the total votes of the entire proposed district was 197 for annexation .and 60 against annexation.

On December IS, 1939, one day prior to the election, the present suit was filed by the Mayfield and Clements districts, together with certain taxpayers of the latter district, against the County Board of School Trustees, the Hale Center Independent School District and its trustees seeking to restrain the appellants from declaring the results of the election of December 16, 1939 and from entering any orders relative thereto. The substance of the complaint of the appellees was that the Hale Center district, together with its trustees, patrons and employees entered into a plan to annex the common school districts to the Hale Center district for the purpose of taxing the common school districts, and that in order to accomplish such purpose the appellants had solicited the transfer of scholastics from common school districts to the Hale Center district, offering free transportation and free tuition for such transferees, thereby depleting the number of scholastics in the common school districts to such an extent that it became impossible or impracticable to operate schools in the common school districts. They further alleged that the County Board of School Trustees had given their aid to such plan and scheme of the Hale Center district and that the acts of such board in furtherance of such unlawful scheme constituted an abuse of discretion and an arbitrary use of power so unjust and discriminatory as to render illegal and void the act of the County Board of November 23, 1939 annexing the districts and ordering the election for December 16, 1939.

The trial court issued a temporary restraining order upon the day the suit was filed granting to the appellees the temporary relief prayed for, and, on January 8, 1940, after a formal hearing, the court issued a temporary injunction restraining the defendants from declaring the results of the election and from entering any orders concerning the creation of a new rural high school or annexing the common school districts to the Hale Center district until the further orders of the court.

The findings of fact of the trial court upon which the temporary injunction was predicated were substantially the same as we have outlined above, but in addition thereto, the trial court made some other findings which the appellants assert afforded the principal grounds for the relief granted. Such additional findings were to the effect that after the temporary writ had been issued in Cause No. 5113 enjoining the annexation of the Mayfield district to the Hale Center district and before the hearing in the quo warranto proceeding in Cause No. 5150 to test the validity of the annexation of the Clements district, the appellants reached the conclusion that under the situation as it then existed the Mayfield district could not he annexed because a majority of the voters therein were opposed to it; that in order to circumvent the will of that majority and in order to circumvent the will of the majority of the voters in the Clements district, the appellants procured the intervention of the Stoneback and Center Plains districts in the quo warranto proceedings for the purpose of dissolving the entire district as it then existed and for the further reason that the County Board might immediately thereafter enter the orders annexing all four of the above named common school districts to the Hale Center district; that such was done because the combined area of all the districts involved would be in excess of 100 square miles and would require an election at large in the proposed district which, by virtue of the voting strength of the Hale Center district, would result in a vote in favor of annexation; that the attorneys in Causes 5113 and 5150 came into court on the day the judgments were rendered therein with previously prepared orders in which the Stoneback and Center Plains districts intervened in Catise No. 5150; with previously prepared orders dissolving the district as it then existed; with previously prepared orders perpetuating the injunction in Cause No. 5113; with previously prepared orders annexing the four common school districts to the Piale Center district and calling the election of December 16, 1939; and that after the entry of the orders in Causes 5113 and 5150 the County Board of School Trustees walked from the district court room into the county court room, there held a meeting, and entered the prepared annexation orders and the order for the election.

It is our opinion that there is-nothing contained in the last mentioned findings nor in the facts of this case as a whole sufficient to warrant the issuance of the temporary injunction herein. In articles 2922a and 2922c the Legislature has granted to county boards of school trustees great latitude and power in the establishment of rural high schools. The constitutional authority of the Legislature to grant such powers to the county school boards is no longer an open question. Henderson et al. v. Miller et al., Tex.Civ.App., 286 S.W. 501, writ refused; Ivey et al. v. Keeling et al., Tex.Civ.App., 15 S.W.2d 1097, appeal dismissed, 281 U.S. 699, 50 S.Ct. 352, 74 L.Ed. 1126; Prosper Independent School Dist. et al. v. County School Trustees, Tex.Com.App., 58 S.W.2d 5; County School Board of Angelina County et al. v. Homer Common School District et al., Tex.Civ.App., 291 S.W. 268; Young County Board of School Trustees v. Bailey et al., Tex.Civ.App., 61 S.W.2d 130, writ refused. So far as the alleged effort of the appellants to circumvent the will of the voters in the common school districts is concerned, article 2922c provides that it is only necessary for the districts to be annexed to consent to annexation by majority vote therein when the proposed rural high school district contains more than seven elementary districts, which was not the case herein. Where, as here, the proposed district does not contain more than seven elementary districts, the will of the majority in the individual districts is not essential to annexation. The issue is governed entirely by the majority will of the entire proposed district as expressed by the voters at an election called for such purpose. Nor is it necessary under article 2922c that a majority of the school trustees in such elementary districts consent to the formation of the proposed district. Cox et al. v. Beard et al., Tex.Civ.App., 87 S.W.2d 882, writ refused; Countz et al. v. Mitchell et al., 120 Tex. 324, 38 S.W.2d 770; Florey Common School Dist. No. 5 of Andrews County et al. v. County Board of School Trustees of Andrews County et al., Tex. Civ.App., 126 S.W.2d 536, writ refused; Trinity Independent School Dist. v. District Trustees, Dist. 24, Trinity County, et al., Tex.Civ.App., 135 S.W.2d 1021, writ refused. It has also been held that where the first resolution of the county school board annexing common school districts to an independent district was not in conformity with articles 2922a and 2922c such fact did not prevent the board from passing subsequent resolutions conforming to such laws. Henderson et al. v. Miller et al., supra.

There was no finding or evidence of any fraud, lack of good faith or abuse of discretion upon the part of the County School Board in its action in issuing the annexing orders in controversy, unless it could be said that the action of such board and the other appellants in securing the intervention of the Stoneback and Center Plains districts in the quo war-ranto suit and in the preparation of the orders before judgments were rendered in the prior causes, constituted such misconduct. To this theory of the appellees urging that such action constituted fraud and abuse of discretion we are unable to subscribe. We fail to see any wrongful conduct upon the part of the appellants in securing the intervention of parties in a law suit whose rights may be affected by the judgment to be rendered therein. Nor do we think there was any vice in the action of the attorneys in the prior suits in preparing in advance of the judgments therein such orders as reflected the desires of the litigants involved in such controversy. The judgment of the quo warranto proceeding declared void all orders theretofore issued by the County School Board with reference to annexing or grouping the districts, and this judgment was binding upon all the parties affected thereby. Kuhn et al. v. City of Yoakum et al., Tex. Com.App., 6 S.W.2d 91. But such judgment did not have the effect of depriving the County Board of the right to thereafter proceed to create a new rural high school district under the authority of the above articles of the statute. The fact that such new action might circumvent the will of the majority of the voters in some of the districts involved does not, in our opinion, under the law as it. now exists, indicate fraud, bad faith or an abuse of discretion upon the part of the County Board of School Trustee's. The Legislature saw fit to give such board the authority to circumvent the will of the majority in some of the districts when such Legislature provided in article 2922c that rural high schools containing more than 100 square miles may be formed as indicated in article 2922a “upon a vote of a majority of the qualified electors in the said proposed rural high school district voting at an election called for such purpose”. It is apparent that this provision warrants the creation of such a district if the election in connection therewith results in a majority vote for annexation over the proposed district at large regardless of the outcome of the election in some of the districts involved. Trinity Independent Dist. v. District Trustees, Dist. 24, Trinity County et al., supra. This rule may seem unfair to the smaller common school districts which are situated near or adjacent to an independent district, as is contended most vigorously by the appellees herein with a great deal of logic and zeal, but such rule seems to be the law, and therefore, if the appel-lees obtain any relief from the injustice asserted by them, such relief must necessarily come from the Legislature rather than from the courts.

The judgment is reversed and the temporary injunction is dissolved.


author: O’QUINN, Justice.

text:
    WATSON et al. v. WHITTON.
    No. 3539.
    Court of Civil Appeals of Texas. Beaumont.
    April 19, 1940.
    Rehearing Denied May 4, 1940.
    John F. McLaurin, of San Augustine, and Minton & Minton, of Hemphill, for appellants.
    J. R. Bogard, of San Augustine, for ap-pellee.
   O’QUINN, Justice.

Suit by appellee, Whitton, against L. Watson et. al., appellants, in trespass to try title to 165 acres of land, a part of the Sarah Welding survey of 330 acres, situated in San Augustine County, Texas, describing the 165 acres by metes and bounds, and being the north half of said 330 acre survey.

Defendants, appellants, answered disclaiming as to all of the land except a tract of 32¾4 acres, specifically described as the Charles G. Bruce tract, alleged to have been granted to said Bruce by the State of Texas, describing same by metes and bounds, and. as to said Bruce tract they answered by general denial and plea of not guilty.

The case was tried to the court without a jury, and judgment was rendered for appellee for the land sued for. We have the case on appeal.

The record discloses that appellee sued for the title and possession of the 165 acre tract — the north half of a 330 acre tract known as the Sarah Welding survey. Appellants answered disclaiming any claim to land on the Welding survey, but set up title to 32½ acres known as the Charles G. Bruce tract which adjoined the Welding survey. The suit, when developed, narrowed down to a contest as to the location of the line between the Welding and Bruce surveys.

There are 13 assignments of error in appellants’ brief. These assignments and the propositions based upon them are presented grouped. As they relate to as many different and unrelated matters, they could not, under the rules for briefing, be grouped for. presentation. Further, these assignments are followed by a single statement which is not addressed to any particular assignment, which quotes copiously from the statement of facts. We are unable to apply this statement to any one of the assignments or propositions. It appears to apply to them all indiscriminately. The rule requires that each assignment or proposition shall be supported by an appropriate statement from the record, and does not contemplate that a party may set out numerous propositions presenting different questions, and then make one general statement and argument addressed to none of the propositions, but merely condensing the entire record according to his view of the facts. While we do not think the rules for briefing should be given a technical or arbitrary interpretation, where there has been a substantial effort at compliance therewith, yet where t there is so complete neglect to meet their requirements, as here evidenced, they should be enforced. Rule 31, Court of Civil Appeals. Austin v. Freestone County, Tex.Civ.App., 288 S.W. 870, writ refused; Warren v. Houston Oil Co., Tex.Civ.App., 296 S.W. 637, affirmed, Tex.Com.App., 6 S.W.2d 341; Simpson v. Fulcher, Tex.Civ.App., 45 S.W.2d 1012, writ refused; Bustamante v. Haynes, Tex.Civ.App., 55 S.W.2d 137, writ dismissed; Holsomback v. Taylor. Tex.Civ.App., 61 S.W.2d 544; Williams v. Kelley, Tex.Civ.App., 77 S.W.2d 263; Grand Lodge Colored Knights of Pythias of Texas v. Rhodes, Tex.Civ.App., 72 S.W.2d 1106; Bates v. J. D. McCollum Lumber Co., Tex.Civ.App., 107 S.W.2d 1107; Walker v. T. & N. O. Ry. Co., Tex.Civ.App., 75 S.W. 47.

Assignment No. 9 is to the effect that the court erred in rendering judgment for appellee for all of the land claimed by him (the Welding 165 acres) because the partition deed by and between the children of W. N. Whitton and Mary E. Whitton did not convey the interest of Sallie P. Orr, one of the heirs of said W. N. and Mary E. Whitton, because her acknowledgment of and to said deed was fatally defective in that it was not in conformity with the statutory requirements of the State of Texas relating to the acknowledgment of a married woman. Appellants cited authority to sustain their contention in this particular. The challenge to the acknowledgment was that it did not recite that she did not wish to retract her execution of the deed. Failure to include this requirement in a married woman’s acknowledgment renders the deed, as to her, void, but it is well settled that the sufficiency or validity of her acknowledgment cannot be questioned by a stranger to the' wife’s title in suit in trespass to try title. Buvens v. Brown, 118 Tex. 551, 18 S.W.2d 1057. Appellants being strangers to the wife’s, Mrs. Sallie P. Orr’s, title are not permitted to question the sufficiency of her acknowledgment to the deed.

We have considered the entire record, and no reversible error appearing, the judgment is affirmed.

Affirmed.


author: FUNDERBURK, Justice.

text:
    McGEHEE et al. v. BROOKINS et al.
    No. 2022.
    Court of Civil Appeals of Texas. Eastland.
    May 10, 1940.
    Rehearing Denied June 7, 1940.

      D. M. Oldham, Jr., of Abilene, and Thomas & Thomas, of Big Spring, for appellants.
    Coffee & Coffee, of Big Spring, for appel-lees.
   FUNDERBURK, Justice.

This suit was brought by Mrs. William B. Brookins, joined by her husband, William B. Brookins, against Mrs. Ernestine Mc-Gehee and her husband, Albert McGehee, to foreclose an alleged judgment lien upon land in Howard County. The judgment, the basis of said lien, was for the sum of $982.18 recovered by Mrs. Brookins in Dallas County on June 19, 1933 in her then name of Dona Jarman against said Ernestine McGehee in her then name of Ernestine Chalk, a feme sole. (Plaintiff, among other things, prayed that “said indebtedness * * * be established” ; but no facts were alleged showing any necessity of re-establishing by a new judgment the indebtedness already established by the former judgment.)

The defendants, among other things, pleaded in defense (1) fraud in the procurement of the original judgment; (2) payment of the debt, of which said judgment awarded recovery; (3) discharge in bankruptcy proceedings.

In a jury trial the verdict was for the defendants. However, upon motion of plaintiffs for judgment, notwithstanding the verdict, judgment was rendered for plaintiffs as prayed. From that judgment the defendants have appealed.

For brevity we shall refer to Mrs. William B. Brookins as plaintiff, and to Mrs. Ernestine McGehee as defendant.

The questions for decision are so presented as to make it proper to consider first, whether the judgment debt in question was duly scheduled in the bankruptcy proceedings. If a provable debt is duly scheduled by a bankrupt, it is unimportant whether the creditor receives actual notice of the bankruptcy proceedings. 'The law is “A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (third) have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy.” 11 U.S.C.A. ch. 3, § 35. The debt in defendant’s schedule was listed thus: “Mrs. Dona Jarman, Dallas, Texas, (Operating S. M. U. Shop, Dallas, Texas).$892.18.”

It was shown conclusively that when the schedule was filed the name of plaintiff was Dona Brookins and that her residence was in 'Chicago. At the time the judgment was recovered plaintiff’s name was Dona Jar-man; she operated a business under the name of “S. M. U. Style Shoppe” in Dallas, Texas, and resided at the Adolphus Hotel, in Dallas, Texas.

According to what seems to us to be the weight of authority a due scheduling of provable debts by a bankrupt includes (1) the correct name of the creditor, if known, and (2) the residence of the creditor, if known, and if not known, a statement to that effect.

It is believed that Freeman v. Hawkins, 77 Tex. 498, 14 S.W. 364, 19 Am.St.Rep. 769, as authority, compels the conclusion that the schedule here involved did not state the correct name of the creditor. For authority that the name of the creditor must be correctly stated in the schedule and the misnomer will be ground for holding that the debt was not “duly” scheduled, though the variance is comparatively unimportant, see cases annotated in U.S.C.A. Title 11, § 35, note 147, p. 193.

As to the other of said two essentials to the due listing of debts, the requirement is that the residence of the creditor be given, if known to the bankrupt, or if not known, that it be so stated. 11 U.S.C.A. ch. 3, § 25, subd. 8. The bankrupt is under duty to use reasonable diligence to ascertain the residence of the creditor, and if thereby he acquires knowledge of such residence he must state it correctly, and if he fails to ascertain such residence, to state that the residence is unknown. It is believed to be implicit in a schedule, which fails to state that the creditor’s residence is unknown, that the bankrupt (after reasonably diligent inquiry, if necessary) knows such residence and has truly stated same.

In the schedule filed by the defendant, not only the name and residence of the creditor was incorrectly stated, but the name under which plaintiff formerly operated a business, and which was known to the defendant, was incorrectly stated; it being “S. M. U. Style Shoppe”, but stated to be “S. M. U. Shop.” It is our conclusion that the debt was shown to be not duly scheduled.

Not having been duly scheduled, it was not discharged by the order discharging the bankrupt, unless plaintiff was given notice or had actual knowledge of the bankruptcy proceedings. There was, in our opinion, no evidence whatever that plaintiff was given notice of the bankruptcy proceedings, and it is only material to inquire whether she acquired actual knowledge thereof.

In the absence of any evidence showing whether or not the debt was duly scheduled, it would have, upon evidence of the order of discharge alone, been presumed that it was duly scheduled and therefore discharged. However, it being established that the debt was not duly scheduled, the burden was upon defendant to show that plaintiff had actual knowledge of the bankruptcy proceedings. State of Texas v. National Bank of Cleburne, 116 Tex. 214, 288 S.W. 435; Hill v. Smith, 260 U.S. 592, 43 S.Ct. 219, 67 L.Ed. 419.

There was no evidence of such notice, unless it consisted of notice to Garland Woodward, an attorney, imputed by law to the plaintiff. The jury found that Garland Woodward, on or about January 1, 1936, acting as an attorney, had the judgment for collection and was acting as attorney in the employ of Mrs. Dona Jarman. It was also found that said attorney was acting in the employ of some other person or persons, other than Mrs. Dona Jarman.

It was agreed that the petition in bankruptcy was filed December 28, 1935, and the order of discharge was made August 3,1936. On April 12, 1935, E. Taylor Armstrong, of the firm of Storey, Sanders & Sherrill, of Dallas, Texas, wrote to Garland Woodward, an attorney at Big Spring, advising that “Our client, Mrs. William Brookins, formerly Mrs. Dona Jarman, is the owner and holder of a valid judgment in the amount of $982.18 against Miss Ernestine Chalk. It is my understanding that the young lady’s family is quite wealthy, and that the judgment should be collectible.” They further advised as follows: “We have the case on a one-third contingent basis, and would be glad to remit one-half of our fee to you when the judgment is collected. I am enclosing herewith an abstract of judgment, together with stamps to cover the cost of recording, if you think it advisable to file the same at this time. Please let me hear from you at your earliest convenience in regard to this matter.”

The next day (April 13, 1935) Woodward & Coffee wrote defendant as follows : “We' have just had placed in our office for attention a judgment against you in the sum of $892.18 [$982.18] rendered in favor of Mrs. Dona Jarman and have been requested to take action to collect same. We will greatly appreciate your calling at our office regarding this matter and with kindest personal regards, we beg to remain” etc.

The abstract of judgment was' duly filed on the 13th day of April, 1935. On January 4, 1936, Mr. D. M. Oldham, Jr., Referee in Bankruptcy, wrote to Woodward & Coffee a letter saying: “I understand you represent Mrs. Dona Jarman, one of the creditors in the above bankrupt case, whose address was given in the schedules as ‘S. M. U. Shop, Dallas, Texas.’ We sent her a notice to this address and it was returned this morning; therefore, I am enclosing to you two notices, one for you and the other to send to Mrs. Jarman. Please see that she gets the notice. Thanking you, I am, Very truly yours.”

On February 13, 1939, Storey, Sanders, Sherrill & Armstrong wrote to Coffee & Coffee, attorneys at Big Spring, as follows: “In 1935 I had some correspondence with Mr. Woodward in connection with the judgment now held by Mrs. Wm. Brookins, formerly Dona Jarman, recovered against Miss Ernestine Chalk in 1933 in the sum of $982.18. At that time Mr. Woodward was of the opinion that due to the fact that Miss Chalk had no property in her own name at that time, it would be better to await the possibility of her inheriting property from her father. It is my understanding that her father died about Christmas of 1938, and my client is very anxious to collect this judgment if at all possible. As explained to Mr. Woodward, who, I understand, no longer lives in Big Spring, we have this matter on a one-third contingent basis and would be glad to remit one-half of our fee to you when the judgment is collected, if you desire to handle the same. We would appreciate your letting us hear from you immediately as to the possibility of effecting a collection of this judgment.”

Mr. D. M. Oldham, Jr., attorney for defendant, as a witness, upon being asked from what source he received the information upon which he based the statement in the letter “I understand you represent Mrs. Dona Jarman” answered: “Mr. Woodward came and asked if this bankruptcy would be a release from the debt. Garland Woodward was the man who asked me * * * That is the only way you boys had anything to do with it.” He further testified: “Garland Woodward had been there with his judgment, as I remember it, to find if it would be a release and I told him it would. Q. You don’t say Garland Woodward had a copy of the judgment with him, do you? A. Well, I didn’t see it. The girl [defendant] testified on the stand that they had a judgment * * *. He [Garland Woodward] wasn’t over there [at Abilene] on the bankruptcy proceedings. He had some other business. Garland frequently came by the office and discussed with me about bankruptcies and what to do in certain things. In this particular case he had a debt to collect against this girl. She knew she was going to be heir to a good deal of property and she couldn’t get it then, and, of course, she didn’t have anything, and he asked me if a bankruptcy would release it and I told him it would.”

The question, stated concretely, is whether the foregoing constituted evidence sufficient to raise the issue and support a finding that Woodward was, on December 28, 1935, employed as attorney by, and for, plaintiff in such way that it was his duty to inform plaintiff of the existence of the bankruptcy proceeding. If such was the case, the law conclusively presumes that the attorney discharged his duty; otherwise, there is no such presumption, and we here repeat that, as we see it, there was no other evidence that plaintiff had any notice.

In our opinion, there was no evidence that Woodward, or Woodward & Coffee, at the time Woodward made inquiry of Oldham as to the effect of the bankruptcy proceeding on the judgment, or at any time from December 28, 1935 to August 3, 1936, including the time when Oldham wrote that he understood Woodward & Coffee represented plaintiff, was employed by plaintiff, or by her authority as her attorney to collect the judgment in question. The first letter was no more than an offer of employment by other attorneys not shown to have authority to employ attorneys for plaintiff. The letter of Woodward & Coffee to the defendant is no evidence that they had accepted the offer of employment, even from the Dallas attorneys. The letter was entirely consistent with the view that it merely sought information desired to enable Woodward & Coffee to determine whether they would accept the offered employment. Thev evidently filed the abstract of judgment, but it is shown by the recitations in a letter of the Dallas attorneys four years later that Woodward was of the opinion that'due to the fact that Miss Chalk had no property in her own name, it would be better to await the possibility of her inheriting property from her father. The evidence is entirely consistent with the conclusion that the abstract of judgment was filed as any attorney would have done as a matter of courtesy, and the whole matter of employment for the future left unsettled. Woodward having filed the abstract of judgment, if he did, and having advised that further efforts to collect the judgment be deferred to await an uncertain contingency, it is quite natural that Woodward, upon hearing of the bankruptcy proceeding, would make the inquiry with which he is credited. The fact that he made the inquiry would be no evidence, we think, that he was at that time employed as the attorney to collect the judgment. It would be just as reasonably referable to a purpose on his part to advise the Dallas attorneys of his knowledge of a prospect to collect the judgment.

At any rate, there was an entire absence of any evidence that the Dallas attorneys had authority from the plaintiff to employ for her other attorneys. Giving all the evidence the strongest possible effect in favor of the defendant, the most that could be contended is that it shows employment by the Dallas firm of lawyers of the Big Spring firm to assist the former and be compensated, not by the plaintiff, but by the Dallas lawyers. “Where an attorney is employed by a firm of collecting agents who have received the claim to be collected from its owners, his knowledge is not that of the owners of the claim but only that of the collecting agency.” 7 C.J.S., Attorney and Client, 856, § 69a; Hoover v. Wise, 91 U.S. 308, 23 L.Ed. 392.

The assignments of error under which it is contended, in effect, that the defendant was entitled to judgment on the ground that the debt for which the judgment awarded recovery had before suit been paid, and that defendant had not been cited to appear in the suit, seem to us to merit little discussion. It is deemed sufficient to say that such attack upon the judgment is collateral, and neither the pleadings, nor the evidence showed any valid defense upon such grounds.

It is, therefore, our conclusion that no error is shown, and the judgment of the trial court should be affirmed. It is accordingly so ordered..


author: SPEER, Justice.

text:
    WHITEHEAD v. CITY NAT. BANK IN WICHITA FALLS et al.
    No. 14095.
    Court of Civil Appeals of Texas. Fort Worth.
    May 17, 1940.
    Rehearing Denied June 7, 1940.

      Henry R. Bishop, Houtchens & Hout-chens, Lloyd H. Burns, and J. Harold Craik, all of Fort Worth, for appellant.
    Bullington, Humphrey & Humphrey, of Wichita Falls, for appellee City Nat. Bank in Wichita Falls.
   SPEER, Justice.

This is an appeal from a judgment of the District Court of Tarrant County, sustaining a plea of privilege.

H. G. Whitehead sued H. L. Stripling, a resident of Tarrant County, K. B. Connor, a resident of Dallas County, and City National Bank in Wichita Falls, a banking corporation with its place of business and domicile in Wichita County, Texas. The defendant bank filed its plea in abatement and subject thereto, its plea of privilege, claiming its right to be sued in Wichita County. The parties will carry the same designation here as in the trial court, except when necessary to designate them by name.

The plaintiff instituted his suit against the named defendants, seeking a joint and several judgment against all. The defendant bank timely filed its plea of privilege and plaintiff controverted it by a plea which is substantially the same as his amended petition. The controlling point in the appeal is, did the controverting plea allege a joint, and several liability to plaintiff as against the bank and the resident defendant Stripling?

The controverting plea covers twelve pages of the transcript, but in the interest of clarity we feel impelled to give a sufficient summary of the document to enable us to make our discussion of the issue intelligible.

It is alleged in the controverting plea, substantially, that on April 4th, 1939, defendant Stripling, a resident of Tarrant County, Texas, executed and delivered to plaintiff a check drawn on City National Bank, Wichita Falls, Texas, in the sum of $7,000, payable to plaintiff or bearer, signed by Stripling; it bore on its face this notation: “Payment for one-fourth H. G. Whitehead interest in Calvin Brown royalty, Gregg County.” That check was endorsed, “H. G. Whitehead, K. B. Connor, Bob Whitehead.” That Bob Whitehead had no interest in the transaction; that Connor was related to Stripling, was interested with him in the purchase of said royalty and acquainted with Stripling’s financial ability to pay; plaintiff refused to accept Stripling’s check and Connor endorsed it to induce its acceptance, but for which endorsement plaintiff would have refused it; that by said endorsement Connor obligated himself jointly with Stripling for its prompt payment when presented to the Wichita Falls bank. That upon receipt of the check plaintiff endorsed it and deposited it with First National Bank of Odessa, Texas, for collection. That the Odessa bank, in due course of business, promptly sent the check to its correspondent, the Fort Worth National Bank, with the written .request to collect it and “wire fate.” That the words, “wire fate”, in common usage among bankers, meant that the bank on which the check was given would promptly wire the sending bank, at Odessa, whether or not said check had been paid promptly when presented. That the Fort Worth bank received the check and forwarded it in due course of business to the Wichita Falls bank, on which it was given, with instructions to “wire fate”, meaning that defendant Wichita Falls bank should wire the Fort Worth bank within 24 hours after its receipt whether or not the check had been paid.

It is further alleged that defendant City National Bank in Wichita Falls received the check from the Fort Worth Bank on April 8th, 1939, and did not wire fate thereon nor notify the Fort Worth hank as to whether or not payment had been made, hut held same until April 13th, 1939, before advising either the Odessa or Fort Worth bank whether the check had been paid • or refused. That from April 8th, 1939, until April 13th, 1939, defendant City National Bank in Wichita Falls failed and refused to wire fate of the check, but thereby held it an unreasonable and unlawful length of time before performing said duty of wiring the fate of the check. That on said April 13th, 1939, the defendant bank returned the check unpaid to the Fort Worth bank, with notation thereon, “Payment refused.”

Further allegations were made that Stripling had no account with Wichita Falls bank; that the bank knew from the notation on the check that it was given for purchase of plaintiffs royalty, and was charged with the duty of acting promptly upon receipt of it and wire fate within twenty-four hours, but that in a desire to aid Stripling it held the check for an unreasonable and unlawful length of time under an agreement with Stripling to enable him to raise funds with which to make payment; that said conduct, delay and joint action by the bank with Stripling were wrongful and illegal, thereby causing plaintiff to sustain the loss of his property, given in exchange for the check.

Allegations in the controverting plea further show that under the custom and practice of bankers, when a check is presented for payment with instruction from the sender bank to the paying bank to “wire fate”, it is meant that the paying hank must either pay the check or wire the sender, within 24 hours after its receipt, that payment has not been made, giving the reason, and that a failure to so notify the sender, means the paying bank has accepted the item and becomes liable for its payment. That because of the acts of defendant bank in not wiring fate of the check and the holding by it of the item for the time shown, plaintiff was deprived of the right to repossess his property before it was transferred to innocent purchasers, and the defendant bank became jointly and severally liable with Stripling for its payment to plaintiff. Prayer was for this relief.

The evidence presented upon the trial of the issue sustains the contention of plaintiff relating to the liability of the resident defendant Stripling. The judgment entered by the trial court sustained the plea of privilege filed by defendant hank in Wichita Falls. In that judgment this language is found: “* * * and that it never at any time was a resident of Tar-rant County, Texas, and that no exception to exclusive venue in the county of one’s residence provided by law exists in this cause, so as to confer jurisdiction and venue over the defendant City National Bank in Wichita Falls, in the courts of Tarrant County, and that the cause of action asserted by plaintiff against the defendant City National Bank in Wichita Falls, and the alleged resident defendant H. L. Stripling, is not a joint and several cause of action.”

We have concluded that the trial court erred in sustaining the plea of privilege upon the grounds above indicated.

It is now well settled that the venue issue is made up of the plea of privilege by a defendant and the controverting affidavit of the plaintiff, who seeks to hold venue in a county other than the residence of the defendant. The burden of proof is upon the plaintiff to establish that right by showing that one of the exceptions to exclusive venue exists as provided by Article 1995 and the exceptions thereunder. 43 Tex.Jur. sect. 109, p. 844; Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91; Farmers Seed & Gin Co. v. Brooks, 125 Tex. 234, 81 S.W.2d 675, and many decisions by the several Courts of Civil Appeals.

Exception 4 under Article 1995 confers venue on a non-resident defendant when sued jointly with a co-defendant residing in the county where the suit is instituted.

The construction of exception four has been the subject of much controversy by our courts, but it is now definitely settled that when venue is sought to be acquired under this exception, the action against both defendants must be instituted in good faith, and upon hearing, proof must be made showing a prima facie cause of action against the resident defendant and the pleadings must state a cause of action against the non-resident. The rule is established that the cause of action as alleged must be one in which the resident and non-resident defendants are properly joined or, stated another way, the action against the resident defendant must be shown to be one so intimately connected with the one alleged against the non-resident that the two may be joined under the rule intended to avoid a multiplicity of suits. The proof against the resident defendant is never made by introduction in evidence of the pleadings, but as against the -non-resident the pleadings will suffice. Stockyards National Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300.

The above rule is not disputed by the Wichita Falls Bank in the case at bar, but it is contended that the pleadings of plaintiff (the controverting affidavit) do not allege a joint and several cause of action against it and Stripling. This contention has prompted us to summarize that pleading as shown above and, as indicated, we hold against defendant Bank’s contention. It is immaterial, insofar as this appeal is concerned, whether upon a trial on the merits plaintiff can establish the truth of his allegations as against the non-resident bank.

It has frequently been held by our appellate courts that evidence of a defensive nature to plaintiff’s cause of action against the non-resident is not admissible in the hearing on venue; although it has often found its way into the record upon such hearings, it has no probative value in determining the issue of venue. Bradley v. Trinity State Bank, 118 Tex. 274, 14 S.W.2d 810; Vitopil v. Gray, Tex.Civ.App., Ill S.W.2d 1202; Farrell v. Lawrence, Tex.Civ.App., 97 S.W.2d 391; and Stockyards National Bank v. Maples, supra. In the last cited case, the certificate to the Supreme Court contained this recitation [95 S.W.2d 1301]: “No character of cause of action was shown to exist against the bank [the non-resident defendant], but, to the contrary, the evidence affirmatively disclosed that the plaintiff had no cause of action against it.” A question was propounded to the Supreme Court and answered, which meant that when a joint cause of action was alleged against the two defendants, and proof made of a proper action against the resident defendant, the pleadings of the joint action against the two defendants was sufficient to hold the non-resident for trial'with its co-defendant, in a county other than its residence. In answer to the third question, the court said, at page 1304 of 95 S.W.2d: “The answer to the second question would not be altered if the evidence upon the hearing of the plea of privilege affirmatively disclosed that the plaintiff had no cause of action, either joint or several, against the nonresident defendant.”

The plea of privilege and the controverting affidavit constitute the pleadings upon which the hearing is had on the venue trial. Farmers Seed & Gin Co. v. Brooks, 125 Tex. 234, 81 S.W.2d 675; Compton v. Elliott, 126 Tex. 232, 88 S.W. 2d 91. In the case at bar, no demurrer nor exception was urged against the sufficiency of the controverting affidavit, because it did not allege a cause of action. The same rule applies, in this respect, to cases tried on a venue hearing as in causes tried upon their merits. In such circumstances, it is well settled that in passing upon, general demurrers, the court must not only accept allegations of the petition (controverting affidavit in this case) as true, but must also indulge all reasonable intendments in support of their sufficiency. The last expression of our Supreme Court on this point is found in Mansell et al. v. Texas & P. Ry. Co., Tex. Com.App., 137 S.W.2d 997.

Upon cross examination of a representative of- the Fort Worth National Bank, in the instant case, it was revealed that that bank was the agent of the Odessa Bank in the matter of collecting the check in controversy, and that the witness, as such representative and agent, advised the Wichita Bank in a conversation on the telephone to hold the check until it could contact Stripling, and that the Wichita Bank did in fact follow that instruction. It is contended here that the Wichita Bank did as instructed, and consequently has done no wrong in the premises. This evidence goes to the merits of plaintiff’s action against the defendant Bank, but is of no probative force in the venue hearing. Authorities above cited support this statement. It tends to emphasize the holding in Stockyards National Bank v. Maples, supra, that even though it affirmatively appears from the evidence that plaintiff has no cause of action against the non-resident, if the pleadings are otherwise the plea of privilege should be overruled. We express no opinion on the effect of the evidence as against the non-resident defendant’s liability. That question is not before us. It occurs to us that the evidence referred to and other evidence of like kind prompted the’trial court to sustain the plea of privilege. If this be true, as fair and equitable as it may have appeared to the trial court, such holding cannot be sustained under the decisions cited. The assignments of error by plaintiff, complaining of the judgment sustaining the plea of privilege, are well taken.

Defendant Bank, the appellee, contends by counter propositions that its plea in abatement should have been sustained by the trial court, which, if done, would have obviated the hearing on the venue issue. The plea in abatement was properly and timely presented. By it, as well as by plaintiff’s amended petition, it was shown that when plaintiff instituted this suit, he named City National Bank of Wichita Falls as defendant, and had citation served upon the same person as its official, as was served when, by amendment, plaintiff changed the name of the defendant to its true corporate name, City National Bank in Wichita Falls. The plea in abatement was overruled when presented. The amended petition was filed and the pleas in abatement and of privilege involved here were filed in response to the amended pleading. We fail to see any ground for the abatement, unless it could have affected accrued court cost.

In any event, as in this case, the proper defendant corporation had been sued, although not precisely in its true corporate name. The defect did not deceive or mislead that defendant; it was sufficient, when process was served, to put defendant on notice of plaintiff’s action. Abilene Independent Telephone & Telegraph Co. v. Williams, 111 Tex. 102, 229 S.W. 847; Wichita Coca Cola Bottling Co. v. Levine, Tex.Civ.App., 68 S.W.2d 310, writ refused; Areola Sugar Mills Co. v. Doherty, Tex. Civ.App., 254 S.W. 650, writ refused; West v. Johnson, Tex.Civ.App., 129 S.W. 2d 811, writ refused. The plea in abatement was properly overruled and the issues involved in the plea of privilege were squarely before the court.

The non-resident defendant bank, by counter propositions, also seeks to sustain the court’s action in sustaining its plea of privilege by a contention that the residence of Stripling was not positively established by competent proof to be in Tarrant County. It is not thought necessary to point out that evidence but we find sufficient evidence in the record to ' support the establishment of his residence in Tarrant County. The nearest conflict that could be pointed out is to the effect that Stripling is a single man and stays much of his time in other counties.

We conclude and so hold that the trial court erred in sustaining the plea of privilege, under the recited findings in the judgment that no exception to exclusive venue in the county of one’s residence as provided by law is shown to exist in this case. For the error pointed out and under the authorities cited, the judgment of the trial court is reversed and here rendered, overruling the plea of privilege. It is so ordered.

On Motion for Rehearing.

Among other things called to our attention by City National Bank in Wichita Falls in its motion for rehearing, is an expression used by us in our original opinion, wherein we said: “Upon cross examination of a representative of the Fort Worth National Bank, in the instant case, it was revealed that that bank was the agent of the Odessa Bank in the matter of collecting the check in controversy * * .” It is asserted in the motion that our statement was an incorrect announcement of the law; but that under the facts revealed in the record, the Fort Worth Bank was the agent of plaintiff, who delivered the check to the Odessa Bank for collection. It is obvious that we did not make the statement as being what we conceived to be the law, but simply summarized what a witness had testified to. The only error in the statement by us was wherein we said the testimony was given on cross examination. We have again consulted the record and find that counsel for the City National Bank in Wichita Falls elicited the testimony from that Bank’s witness, on direct examination. We agree with counsel that the testimony and our statement about it were susceptible to an erroneous statement of the law.

For fear that our quoted statement should again be misunderstood, we think the law is well settled that under the circumstances involved here, the Fort Worth National Bank was the agent of plaintiff, it having been fairly selected by the Odessa Bank to make the collection of the check. Tillman County Bank of Grandfield, Oklahoma v. Behringer, 113 Tex. 415, 257 S.W. 206, 36 A.L.R. 1302, and Garver v. Howard, 113 Tex. 371, 257 S.W. 209.

The above statement and our explanation of it, herein contained, in- no way affect or change the conclusions reached by us in the original opinion. We can see why, upon the trial of the case on its merits, it may become important as ■ to whether plaintiff was bound by the acts of the Fort Worth Bank; therefore we are glad to clarify the statement.

With the above explanation, the motion for rehearing is overruled.