author: CODY, Justice.

text:
    GILLETTE et al. v. HOUSTON NAT. BANK.
    Na. 10946.
    Court of Civil Appeals of Texas. Galveston.
    April 11, 1940.
    Rehearing Denied May 9, 1940.
    Tamp W. Grobe, of Houston, for appellants.
    Meyer C. Wagner and A. Milton Vance, both of Houston, for appellee.
   CODY, Justice.

This is a suit for the conversion of a certificate of stock numbered 228,003, issued to Alma Dick Gillette for one hundred shares of the capital stock of the Texas Corporation, brought by Mrs. Gillette, joined by her husband, against Houston National Bank. The value of the stock at all relevant times was $4,095.

Mrs. Gillette alleges that in July of 1934, she pledged the certificate, along with others, with Sterling & Baker, a partnership, in pledge to secure a note, payable to bearer, for $9,100. That in May, 1935, she gave Sterling & Baker, at their request, instruments reading:

“For Value Received,
hereby sell, assign and transfer unto .(.) shares of the. Capital Stock of the. standing in.name on the books of said. represented by Certificate No.herewith and do hereby irrevocably constitute and appoint . .attorney to transfer the said stock on the books of the within named company with full power of substitution in the premises.
Dated.
Alma Dick Gillette
Roy W. Gillette
“In presence of: J. D. Seymour.”

She alleged that said instruments were to be used only if the note were not paid; that on the 14th of July, 1936, she paid $4,600, and gave her renewal note for $4,500, which was paid in full March 10, 1937; and since which time neither she nor her husband have owed Sterling & Baker anything. That without her knowledge or authority Sterling & Baker pledged said certificate numbered 228,003 to the bank as collateral to secure a debt owed by themselves to the bank (together with one of the blank instruments) ; that such indebtedness to the bank was secured by other collateral whose value greatly exceeded the debt due the bank. That the partnership, Sterling & Baker, and its members, were adjudged bankrupt on November 2, 1937, and thereafter, on November 4, 1937, the bank wrongfully and unlawfully sold said certificate, and wrongfully filled in or caused to be filled in the blanks in the aforesaid instrument in such a way as to make it appear that the sale had been authorized. That Mrs. Gillette and her husband did not learn of the unlawful conversion until November, 1937, and on November 20, 1937, demanded of the bank the return of the certificate, which the bank refused to return.

The bank answered with a general demurrer and a general denial, and further, that appellant having given the certificate to Sterling &. Baker for the purpose of providing collateral, but having, by her execution of the assignment and power in blank, clothed Sterling & Baker with the indicia of ownership and with apparent power to transfer the certificate, she thus held out to all persons to whom said certificate and accompanying power might be presented by Sterling & Baker to whom she entrusted it, that such holder had title to said certificate and authority from her to transfer title thereto and sell or pledge same. The bank further alleged that the certificate and accompanying power, along with other certificates of stock, were delivered to it by Sterling & Baker on June 4, 1935, as collateral security for a bearer note of Sterling & Baker for $45,000. The bank pled reliance upon the assignment and power in blank which accompanied the certificate, and that it acquired same in due course of business, in good faith, and without notice of rights of appellant in the certificate, or of want of authority of Sterling & Baker to pledge it, took it as collateral, and surrendered in exchange for stocks then delivered it 269 shares of the Humble Company of the value of (about) $15,000, which it had theretofore held as collateral to the $45,000 note; and that it, the bank, thereafter made to Sterling & Baker further cash loans upon the faith of the collateral which it held, and that it would not have surrendered such Humble stock, nor made such further loans, but for its reliance upon said assignment and power in blank and its belief in the representations made by appellant thereby. That appellant should have anticipated, from the fact that the assignment and power was executed in blank, and not restricted to an assignment to provide collateral, that Sterling & Baker might make the use of it that they did, ■ and appellee pleaded that appellant was estopped to deny that Sterling & Baker had authority to transfer title to said stock and to pledge the same to appellee. Appellee further pleaded a general custom at Houston, and in Texas, that title to corporation stock paásed by delivery 'of the certificate with blank assignment and power accompanying same, executed by the party whose name appeared on the face of the certificate, without each transferee of the certificate being required to have it transferred to his name on the books of the issuing corporation, and that such certificates of stock accompanied by such transfers and powers of attorney formed the basis of commercial transactions and were fully used as collateral by persons in said community, and that it was customary for banks, brokers and the public generally to accept certificates of corporate stock so endorsed without inquiry. That it was a further general custom that the blank assignment and power of attorney duly executed by the person whose name apr peared on the face of the certificate of stock should be left blank until some person into whose possession the certificate might come should desire to have the stock transferred on the books of the corporation, in which event the holder was authorized to fill in the blanks of the assignment and power.

Appellant by supplemental petition pled coverture as a bar to appellee’s plea of limitation.

Upon special issues the court rendered judgment for appellee, the bank. These were, omitting non-essential parts, as follows :

“Special Issue No. 1.
“Was the bank, on June 4, 1935, a bona 'fide pledgee of the 100 shares of stock represented by certificate 228003? You are instructed that a bona fide pledgee of stock is a pledgee who has, in good faith, received such stock as collateral without notice of adverse rights of another person and without notice of facts which would cause a person of ordinary prudence, in the exercise of ordinary care, to make inquiry as to the rights of such other person.” The jury answered, “It was”.
“Special Issue No. 2.
“Did the bank believe in good faith at the time it accepted certificate No. 228003, that Sterling & Baker had the right to pledge it to secure their indebtedness to the bank?” The jury answered, “It did”.
“Special Issue No. 3.
“At the time the bank accepted said certificate as collateral to the $45,000.00 loan, did it surrender to Sterling & Baker in exchange therefor 269 shares of stock of the Humble Oil & Refining Company theretofore held as collateral to said loan ?” The jury answered, “It did”.

In answer to special issue No. 4, the jury found that the bank surrendered 269 shares of the Humble Company stock on June 4, 1935, in good faith, upon the assignment and power executed by appellant et vir., which accompanied certificate No. 228003. In answer to special issue No. 4 — a, the jury found that the bank surrendered the 269 shares of the Humble Company ón June 4, 1935, in reliance upon the assignment and power executed by appellant et vir., which accompanied certificate No. 228003. In answer to special issue No. 5, the jury found the bank would not have surrendered to Sterling & Baker said shares of the Humble Company and accepted in substitution the certificate No. 228003 but for its reliance upon the assignment and power attached thereto. In answer to special issue No. 6, it was found that the bank made additional loans to Sterling & Baker subsequent to the delivery to it of certificate No. 228003, in good faith upon the assignment and power which accompanied the certificate. That the bank’s additional loans to Sterling & Baker subsequent to the delivery to it of the certificate were in reliance upon such assignment and power. That.the bank would not have made additional loans.to Sterling & Baker after it received the certificate in pledge but for such assignment and power. In answer to special issue No. 8, the jury found that appellant was not negligent in entrusting certificate No. 228003, with the assignment and power in blank, to the holder of the $9,100 note. To special issue No. 10, the jury found appellant was not negligent in failing to restrict the assignment and power which she executed so as to show by its terms that the holder had power to deal with the stock only for the indebtedness owed by her to the holder of the $9,100.

Appellant testified that early in 1933 she executed to Sterling & Baker a note for $9,100, and put up as collateral with Sterling & Baker 380 shares of Texas Company stock, and 41 shares of American Telegraph and Telephone Company stock; and that attached to each certificate delivered to them in connection with such note was one of the blank stock powers signed by herself and her husband. Appellant testified that the way she paid off the note was by selling 180 shares of such Texas Company stock. This sale of 180 shares she accomplished by giving Sterling & Baker an order in writing to sell such 180 shares, —she did not fill out the blanks in any of the powers she had given in connection with such stocks. It was appellant’s understanding that the stock power attached to each certificate pledged by her to Sterling & Baker was to be used in conjunction with the contract embodied in the note, and in the event she failed to pay off her note the power would be used to foreclose, that is, to enable Sterling & Baker to sell the stock if she did not pay the note. She knew that if she failed to live up to the obligations represented by her note, that the blanks would be filled in and the stock delivered to a purchaser. She trusted Sterling & Baker.

Under the evidence just referred to, which is undisputed, Sterling & Baker were without actual authority to dispose of appellant’s certificate of stock. In the leading case of McNeil v. Tenth National Bank, 46 N.Y. 325, 7 Am.Rep. 341 (cited with approval in Strange v. Houston & T. C. R. R. Co., 53 Tex. 162) it is said: “It must be conceded, that as a general rule, applicable to property other than negotiable securities, the vendor or pledgor can convey no greater right or title than he has. But this is a truism, predictable of a simple transfer from one party to another where no other element intervenes. It does not interfere with the well-established principle, that where the true owner holds out another, or allows him to appear, as the owner of, or as having full power of disposition over the property, and innocent third parties are thus led into dealing with such apparent owner, they will be protected. * * * Simply intrusting the possession of a chattel to another as depositary, pled-gee or other bailee, or even under a conditional executory contract of sale, is clearly insufficient to preclude the real owner from reclaiming his property, in case of an unauthorized disposition of it by the person so intrusted. * * * But if the owner intrusts to another, not merely the possession of the property, but also written evidence, over his own signature, of title thereto, and of an unconditional power of disposition over it, the case is vastly different. There can be no occasion for the delivery of such documents, unless it is intended that they shall be used, either at the pleasure of the depositary, or under contingencies to arise. If the conditions upon which this apparent right of control is to be exercised, are not expressed on the face of the instrument, but remain in confidence between the owner and the depositary, the case cannot be distinguished in principle, from that of an agent who receives secret instructions qualifying or restricting in apparently absolute power.”

In Russell v. American Bell Telephone Co., 180 Mass. 467, 62 N.E. 751, the distinction is clearly pointed out by Chief Justice Holmes, as follows: “The qualification of the rule, as not applying when the instrument is stolen, is not based upon the name of agent’s crime but upon the fact that in the ordinary and typical case of theft the owner has not intrusted the agent with the document and therefore is not considered to have done enough to be es-topped as against a purchaser in good faith. He certainly has not done enough if the estoppel is based upon the principle that when one of two innocent persons is to suffer the sufferer should be the one whose confidence put into the hands of the wrongdoer the means of doing the wrong. But in a case like the present the agent has been intrusted with the converted property * * *. The ground of estop-pel is present and the estoppel arises. The distinction is not new. ■ On the one side are cases * * * where an agent or servant simply had access to a document remaining in the possession of the owner; on the other, cases * * * where possession is intrusted to the agent for one purpose and he tises it for another.” (Italics ours.)

The distinction just referred to is recognized in Phillips v. Citizens’ National Bank, Tex.Com.App., 15 S.W.2d 550, 552, where the facts were that Phillips lost a stock certificate endorsed in blank and it was returned by the finder to Wilson, who thereafter pledged it to secure another loan. In deciding the case the Commission of Appeals said: “In view of the fact that certificates of stock, when indorsed in blank, are transferable by mere delivery, they are frequently referred to as quasi negotiable. But in such cases the transfer of the title is really upon the principle of estoppel. 14 C.J. p. 665. Thus where an owner of such certificate trusts it to another for a particular use and that other exceeds his actual authority and transfers the certificate to an innocent purchaser for value, the latter may successfully hold the same as against the real owner through estoppel.” (Italics ours.) But in the case just quoted from the court said: “Here the estoppel relied upon is the negligence of Phillips in losing the certificate”. Phillips had not entrusted his property and indicia of title to anyone, but had lost -it. The Phillips case does not hold that an innocent purchaser in such case is entitled to prevail only if the owner was negligent. But, as pointed out by appellee here, what it does say is that, even in the instance where the owner losing the certificate and power is not estopped by the rule which bars the right of, the owner trusting those documents to another, he may yet be estopped if he is guilty of negligence which is a proximate cause of the subsequent acquisition by another.

The fact then that appellant was not negligent, as found by the jury, in entrusting the certificate with the accompanying blank stock power to Sterling & Baker, does not prevent appellee from invoking the principle of estoppel that when one of two innocent persons must suffer the sufferer should be the one whose confidence put into the hands of the wrongdoer the means of doing the wrong.' It cannot be denied that appellant so entrusted Sterling & Baker, with the apparent power to pledge the certificate as to induce the bank in good faith to accept such certificate. The understanding that appellant had to the effect that Sterling & Baker should make use of the blank stock power only to sell such certificate to pay off the note was in the nature of a secret limitation on such stock power. The case of State Trust & Savings Bank v. Mayes, Tex.Civ.App., 67 S.W.2d 419, 420 (which was affirmed without written opinion on original hearing) does not hold contrary to our conclusion, just expressed. The facts in that case are very similar to those in .this. But in that case the main ground -of -defense relied upon and pled was that the owner of the stock “failed to use ordinary care when she executed the said assignment and endorsement in blank and delivered the stock certificates to the Kramer Securities Company, same being assignment and endorsement for a specific purpose. That she should have foreseen that the Kramer Securities Company might transfer, assign or pledge her stock certificates if she did not in some way attach the same to the note and pledge agreement which she signed; that she should have foreseen that by executing the assignment and endorsement in blank and delivering the same to the Kramer Securities Company without attaching said certificates to the note and pledge agreement, that same might or would fall into the hands of an innocent purchaser for value. That she is now es-topped by her failure to use ordinary and due care and diligence * * * in asserting as against the defendant who is holding same as security for its loan to the Kramer Securities Company.” The Court recognized ■ that the owner of stock who endorses stock certificates in blank and places them in the possession of another party as collateral security for a loan may be guilty of such negligence in the handling of the stock as would estop him from enforcing ownership against an innocent third party. And the court stated that it was this rule of law that was invoked in that case as a defense. “The issue is thus narrowed to the inquiry as to whether defendant in error, in the light of attending circumstances, ought to have anticipated the wrongful act committed by the securities company. This is a question of fact to be determined by the court or jury trying the case. * * * The court necessarily found, in the instant case, that defendant in error was not guilty of the negligence alleged, and, as this finding is on a question of fact * * * it is * * * binding upon this court.” The question was not before the court in that case, however, whether, if the defense had invoked the rule of law that when one of two innocent persons must suffer the sufferer should be the one whose confidence put into the hands of the wrongdoer the means’ of doing the wrong. Of course every one knows that the confidence he places in another may be abused, and when it is abused this abuse is generally due to the perfidy of the one trusted rather than to the negligence of the one who reposed'the confidence. And the principle of estoppel whereby when one of two innocent persons must suffer the sufferer should be the one whose confidence put into the hands of the wrongdoer the means of doing the wrong, would be nullified if the one in whom the confidence was reposed was so notoriously untrustworthy .that only the negligent and improvident trust him. Indeed, every one has the right to believe that another will not commit a felony, such as committed in connection with pledging the certificate. We therefore overrule appellant’s assignment that the court should have granted her motion- for a judgment notwithstanding the verdict, or based upon the finding that she was not ’negligent.

In the early case of Strange v. Houston & T. C. Ry. Co., 53 Tex. 162, in holding that the plaintiff took good title, the court said:

“Browder, the original shareholder, testified that he placed his certificate of stock, with a blank transfer executed by him thereon, in the hands of Fletcher, for the purpose of effecting a sale.
“Having thus given to Fletcher possession of the original certificate with' the external indicia of ownership and the right of disposal, Fletcher’s subsequent sale of it, under which plaintiff Strange claims, clothed him with the apparent legal title.
“The rights of Strange, if bona fide,’ do not depend upon the actual title or authority of Fletcher to sell, but upon the act of Browder giving the apparent authority, and which would estop him and his assignee. Saltus v. Everett, 20 Wend. [N.Y. 267] 278 [32 Am.Dec. 541]; McNeil v. National Bank, 46 N.Y. 325 [7 Am. Rep. 341]; * * * Mount Holly L. & M. Turnpike Co. v. Ferree, [17 N.J.Eq. 117] 2 C.E.Green 117; Holbrook v. Zinc Co., 57 N.Y. [616] 617.”

Now if the rights of the bank to the certificate pledged to it were acquired bona fide we do not see, under the facts of this case, why it did not have the right to sell the certificate and apply the proceeds to the payment of the .note which it secured. Appellee had no notice of appellant’s claim to the certificate at the time of the foreclosure sale in November. It is true that appellee held collateral of the value of some $20,000 in excess of its secured debt. But this did not impair its right, certainly .in the absence of notice of appellant’s rights, to sell out such collateral as it considered proper to pay off its debt, and hold the balance for Sterling & Baker, or their creditors. In Johnson v. Bixby, 8 Cir., 252 F. 103, 104, 1 A.L.R. 660, it is said: “ * * * ' since the certificates were signed in blank and taken innocently by Finley, Barrel & Co., such pledge was binding. * * * A considerable amount of stock, including all of that here involved, had been pledged for the sole purpose of collaterally securing this indebtedness. The pledgee could sell any or all of it for that purpose. But, if it elected to dispose of the collateral gradually by piecemeal, then it must stop when the proceeds thereof were unquestionably enough to satisfy all possible claim.”

In Meyer’s The Law of Stock Brokers and Stock Exchanges, the author says: “The broker’s pledgee has the right to enforce his claim against the broker by the sale of the pledged securities, and if he does so in the manner required by law or by his agreement with the broker he does not incur any liability to the true owner of the pledged stock.” Vol. I, Sec. 75(c). See also In re J. C. Wilson & Co., D.C., 252 F. 631; 33 Tex.Jur. 715; Labor Bank & Trust Co. v. Dow, Tex.Civ.App., 26 S.W.2d 925, 928; 38 C.J. 1369.

In Le Marchant v. Moore, 150 N.Y. 209, 44 N.E. 770, 773, it is said: “The defendants, as pledgees, were entitled to regard Evans & Company [the brokers] as owners until they were notified of the plaintiffs’ [customers’] rights.”

In Harper v. First State Bank of Grand Prairie, Tex.Civ.App., 3 S.W.2d 552, 554, the court said: “A bona fide holder of negotiable paper pledged as collateral to an indebtedness is not required to proceed first against other collaterals also , pledged to secure such indebtedness becáuse of equities alleged to exist between the original parties to such pledged paper.”

We are dealing here with an instance of where the plaintiff brings a suit for conversion after the foreclosure sale; indeed, notice was brought home to the pledgee of a plaintiff’s rights to stock only after such stock had been sold. And in speaking of the right of the maker of a note pledged by the payee to a third party as collateral for a debt to require such third party to resort to other securities because of the existence of defenses as between the maker and payee, it is. stated in Sowell v. Federal Reserve Bank, 5 Cir., 294 F. 798, 799, 801, that the doctrine of marshalling, “does not require a bona 'fide holder of negotiable paper, pledged as collateral to an indebtedness, to .proceed first against other collateral, because of equities alleged to -exist between the original .parties to the pledged paper. * * * The rights .of the obligors, on the other collateral, could be determined only in a proceeding to which they were all made parties.” ‘

Appellant is relying on the Holding in Live Stock State Bank v. Locke, Tex.Civ.App., 277 S.W. 405, 406, where it is said: “The presumption is to be indulged in favor of Locke that the other notes held by plaintiff bank as collateral security were valid and collectible, and the burden rested upon the plaintiff [bank] to overcome the presumption.” But that principle cannot apply here. The facts in the Locke case were that Locke gave his note to the Bank of Miami for (about) $1,700. This bank was indebted to Live Stock State Bank (of Kansas City Missouri) in excess of $30,-000, on September 3, 1923, and on that date it pledged Locke’s note, together with the notes of about thirty others, to the Live Stock State Bank, as collateral to its indebtedness. On November 2, 1923, the Live Stock State Bank failed, and the liquidating agent for the State of Missouri took over its affairs, and thereafter brought suit against Locke on his note and to, foreclose its claim. The Bank of Miami failed February 21, 1924, and at that time was indebted to the Missouri bank in the sum of $30,000. The Miami Bank held on deposit, at the time it failed, about $8,000 belonging to Locke. It was held, and we believe correctly, that the liquidating agent must first resort to the other collateral under the facts of that case. It is clear, however, that the Locke case is not in conflict with the Harper case, supra. In the Harper case, as in the case at bar, the suit was for damages for conversion of plaintiff’s property, and was brought after the foreclosure. The bank had the contract right to appropriate the collateral security to the payment of its debt. And while it is not necessary to decide in the present case whether, had appellant resorted to a court of equity to require the bank to first exhaust its other collateral, she could have compelled this to be done, yet it is clear that, after the bank has .foreclosed its lien on its collateral security, and the suit is one for damages for conversion, damages cannot be recovered, for the bank had the legal right to appropriate its collateral security to the payment of its debt. And should it be. conceded that, prior to the foreclosure, it could have been required by equity first to exhaust other collateral, this does not apply after the foreclosure of the lien, the exercise of a legal right under a lawful contract of security.

Though appellant is suing appel-lee for damages resulting to her from the conversion of her certificate, her contention seems to be that by reason of the requirements of Art. 4614, R.S.1925, as amended in 1929, Vernon’s Ann.Civ.St. Art. 4614, title to her certificate could not be transferred out of 'her by means of the blank stock power signed by her and her husband. The article reads in part: “* * the wife shall have the sole management, contrql, and disposition of her separate property, both real and personal; provided however * * * the joint signature of the husband and wife shall be necessary to a transfer of stocks and bonds belonging to her or of which she may be given control by this law.” It was held by the Commission of Appeals in Shear Co. v. Wilson, 292 S.W. 531, 535, “The transfer of such stock owned' by a married woman must be through ‘the joint signature of the husband and wife,’ and therefore necessarily implies that the transfer must be in writing. Such transfer, no doubt, could be made by indorsement on the certificate, even in blank, for the statute does not undertake to regulate, as in case of conveyances of land, the form of the transfer. It merely requires such transfer to be upon the joint signature of the husband and wife. Any transfer, therefore, otherwise good at law, would be sufficient.” As the blank power, executed as appears above, is shown, by custom, to be sufficient to transfer stock generally, we see no reason why, when the requirement of the law has been fulfilled by having the joint signature of the husband and wife, it is not entirely adequate. But if appellant’s objection should be held to be valid, it would be fatal to any recovery of damages by her for conversion against appellee. For it is essential to a recovery for conversion that the title to the thing converted pass to the one who converts it. And if the title failed to pass out of appellant her action should have been brought against the corporation in which she owns the shares of stock, which was the remedy which Mrs. Wilson pursued and received. Shear Co. v. Wilson, Tex.Com.App., 292 S.W. 531.

Appellant contends that the custom of passing title to stock by delivery when accompanied by such a blank power as, set out above which was relied upon by the bank was unlawful 'because only the last transferree was to pay the tax under such custom.' While we do not believe appellant h'as shown any violation of the revenue law by the custom referred to, we believe that the finding by the jury of the bank’s .good faith' acquisition of the certificate makes any inadvertent violation of the revenue laws (if there had been any) insufficient to destroy appellee’s rights, acquired in good faith. And for that reason we do not discuss this contention at length. Furthermore, if the seller violated the law, we do not see how that could destroy the purchaser’s rights. See State National Bank v. Potter, Tex.Civ.App., 231 S.W. 828; Burson v. Huntington, 21 Mich. 415, 4 Am.Rep. 497.

After laborious consideration, we are unable to say that any reversible error is presented. Judgment of the court below should be affirmed, and it is so ordered.

Affirmed.

On Appellants’ Motion for Rehearing.

In the very recent case of Sackenreuther v. Winston et al., Tex.Civ.App., 137 S.W.2d 93, 97, writ of error refused, the facts are in many respects similar to the facts in this case. There, as here, appellant contended that, since his certificates of stock were non-negotiable, the title thereto could have passed into appellees only by estoppel by reason of his negligence, and that, the jury having found that he was not guilty of negligence in delivering and assigning such stock to Sterling & Baker, the court erred in rendering judgment in favor of appel-lees. But this court, speaking through Chief Justice Monteith, applied the principle “that where one of two persons, equally entitled to consideration, as far as their purposes are concerned, must suffer from the delinquency of a third, the loss more properly falls upon him, who, having readily at hand the means of protection, has failed to avail himself of them.” This principle is equally applicable to the facts of this case. We must overrule appellants’ motion for rehearing.

Motion refused.


source: Caselaw Access Project

author: WALKER, Chief Justice.

license: Public Domain

text:
    KILPATRICK et al. v. GULF PRODUCTION CO. et al.
    No. 3627.
    Court of Civil Appeals of Texas. Beaumont.
    March 22, 1940.
    Rehearing Denied April 10, 1940.

      ’ W.' T.' McNeill, of Beaumont, Xavier Christ, of Pt. Arthur, and D. E. O’Fiel and Leroy McCall, both of Beaumont, for plaintiffs in error.
    Walter C. Clemons, of Houston^ C. T.' Duff and Lamar Cecil, both of Beaumont, and John E. Green, Jr., and R. J. Lack-land, both of Houston, for defendants in error.
   WALKER, Chief Justice.

The appeal is by writ of error but the parties will be referred to as appellants and appellee Gulf Oil Corporation. On the 22nd day of November, 1938, J. C. Kil-patrick instituted this suit in trespass to try title, pleading also the several statutes of limitation, to recover of and from Gulf Production Company the title and possession of lot No. 4, a subdivision of the Mun-son Bowes survey in Jefferson county, containing 45.7 acres of land. On. the 25th day of October, 1937, appellant, John Tra-han,, and certain other parties, intervened, pleading the same issues made by Kilpat-rick in his petition. On the 21st day of November, 1938, appellee filed its first amended original answer pleading the general demurrer, general denial, not guilty, and the several statutes of limitation. On the 14th day of .February, 1939, on trial to a jury, judgment was entered on an instructed verdict that the plaintiff and inter-venors “take nothing by this suit as to the lands sued for herein.” Appellee was “given judgment” against Kilpatrick and appellants “for the title and possession of the lands described herein.” As we understand the record, plaintiff Kilpatrick did not appeal from the judgment of the lower court; the intervenors as appellants - have duly prosecuted their appeal. Kilpatrick, in his original petition, natned Gulf Production Company as defendant; by an amended petition filed on the 22nd day of November, 1938, it was alleged that Gulf Production Company had been dissolved, and that its assets and liabilities, and all its properties, had been taken over and were held by Gulf Oil Corporation, “and that the said Gulf Oil Corporation is the real defendant in this cause”; intervenors made the same allegations.

The Munson Bowes survey, containing 320 acres of land, was patented to Munson Bowes on the 19th day of October, 1847, under certificate No. 26 for 320 acres of land issued to Munson'Bowes, dated the 7th day of February, 1846. The 320.acres covered by the Munson Bowes patent was surveyed in May, .1845. In February, 1847, before the issuance of the patent, Munson Bowes executed to David Garner the fol-. lowing deed:

“Know all men by these presents that I,' Munson Bowes in and for the consideration of the sum of $100.00 to me paid by David Garner the receipt of which is hereby acknowledged do hereby bargain sell alien, release and convey unto the said David Garner and his heirs forever all my-right title interest and claim of to and in my headright certificate No. 26 issued to me by the board- of Land Commissioners for Jefferson County for 320 acres of land together with all the land which I would be-entitled to by virtue of said certificate.
“To have and to hold the said certificate together with all the land which is or may be surveyed by virtue of said certificate to the said David Garner and his heirs forever.’.’

Appellee, Gulf Oil Corporation, holds the land in controversy — -the mineral rights in the land — under a regular chain of transfers from and under David Garner. On this statement, appellee holds the superior title to the mineral rights, for it is immaterial on the issue of title, that Munson Bowes executed his deed to David Garner before the patent issued. Adams & Wicks v. House, 61 Tex. 639; Cagle et al. v. Sabine Valley Timber & Lbr. Co., 109 Tex. 178, 202 S.W. 942, 6 A.L.R. 1426.

Munson Bowes was accidentally killed abo'ut the close of the Civil War. Appellants claim through his surviving widow, Katherine Bowes, on the theory that after the death of her husband she lived upon the land in controversy to about 1895, and perfected a title by the statute of limitation of ten years. They make -the point that this issue was raised by the evidence as a fact issue for the' jury, and'that the court erred in instructing a verdict against them on this theory of the case. We have given careful attention to appellants’ testimony on their theory of limitation. -There was evidence to the effect that Katherine Bowes lived in an old log house on the survey, holding about two. acres of land under cultivation, and claimed it as her home, and that this claim continued from “about the time of the death of her husband until her death in about 1895.” But as we understand the evidence, it did not raise the issue of continuous possession; the evidence was simply to the effect that she was “off and on” the land during that time. While , the testimony of appellants failed to show a continuous occupancy, the testimony of Presto Bowes, a grandson of Katherine Bowes, affinnatively denied continuous possession. He testified (Q. and A. reduced to narrative) : “The best that I can remember my grandmother lived off and on on that land ever since before I was - born. I heard her make statements that she had lived other places; she had lived at other places, to farm, or to live on, something like that to work. I know where she lived; sometimes she lived at the forks of the bayou, I don’t know how far that is from the Bowes survey- — ft was somewheres néar four miles. There was more than one house on the Munson Bowes survey. At the time of my .grandmother’s death I don’t believe anybody was living on this land. My grandmother.lived for a while at the forks of the creek about two' miles from the Bowes. As to where my grandmother lived Í answer only oh hearsay; they say. she. lived at Honey Point some; she lived off and on with Stockholm ; I don’t remember that she lived with any Of the children except'Mrs.'Stockholm. She had'sorile children living in Beaumont; álie would go to Beaumont and stay with them some. She lived around with the various children, but mainly with Mr.' and Mrs.-Stockholm.”

To perfect title by limitation there must be a continuous occupancy and possession. Pendleton v. Snyder, 5 Tex.Civ.App. 427, 24 S.W. 363. Presumptions cannot be in dulged in support of appellants’ limitation claim. Woods v. Hull, 90 Tex. 228, 38 S.W. 165.

By the possession of Katherine Bowes, appellants contended on oral argument — the point is' not presented by an assignment of’error — that they raised the issue of presumption of a deed into Katherine Bowes. That contention is denied. Having executed a valid deed to David Garner, a subsequent deed to his wife would not have vested her with title. Under the authorities, the presumption could not be indulged that Munson Bowes executed a subsequent deed to his wife. Houston Oil Co. of Texas v. McCarthy, Tex.Com.App., 245 S.W. 651, 652. There is not a scintilla of evidence in 'the record suggesting that Dayid Garner and those under him conveyed the land in controversy to Katherine Bowes. On these conclusions, since 'appellants as plaintiffs were forced to rely upon the strength of their title, the judgment of'the lower court could be affirmed.

But appellee, Gulf Oil Corporation, was given an affirmative recovery of the land; and if appellants’ points be conceded, yet under the evidence appellee established title by limitation to the Munson Bowes survey- subsequent to 1895.

We give appellants’ third proposition: “The evidence showing that although C. C. Roberts had some sort of possession of the M. Bowes 320 acre tract, of which the land in controversy was a part, from some time about 1915 until about May 1923, when he sold the tract to the City National Bank, at and after which there came a break in occupancy until about and after February 1925, and during which time no one was in possession claiming said land for anyone, the trial court erred in holding that the ten years plea of limitation asserted by defendants in error was good, and instructing .the jury to find for defendant in error and against plaintiff in error.”

C. C. Roberts was one of the grantors in appellee’s chain of title. We have, quoted appellants’ proposition only for the concession that appellees’ possession began in 1915. From 1915, Roberts and those holding under him, to and including appellee, were in continuous possession of all the Munson Bowes 320 acres, holding it under a good and sufficient fence, claiming, using and occupying it every day until this suit was filed in 1935. On that point, there was no controversy in the evidence.

There was no merit in appellants’ contention that there was “a break in the occupancy.” This is a legal conclusion drawn by appellants from the undisputed facts. In 1917, Will Hays rented the entire survey from Roberts for a pasture, and took immediate possession. At the time he made his entry, the entire survey was held under a good and sufficient fence, and Hays remained in continuous possession until this case was tried, using, claiming, holding, and occupying the land as a tenant. Because he did not know of the sale of the land to the City National Bank by Roberts, and did not learn of the change in ownership until the early part of 1925, when he learned that it was owned by I. R. Bordages (and on learning of the fact renewed his contract of tenancy with Bordages), appellants contend that there was a break in occupancy. It seems to be their proposition that, though Hays continued in possession under his contract with Roberts, his possession did not inure to the benefit of Roberts’ grantee. Appellants’ contention is overruled; there was no break or hiatus in the possession through which appellee holds. Remaining in possession continuously under his contract with Roberts, Hays’ possession was the possession of Roberts’ grantee. He was not holding for himself but for the owner of the title under which he went into possession. Carothers v. Covington, Tex.Civ.App., 27 S.W. 1040; Cobb v. Robertson, 99 Tex. 138, 86 S.W. 746, 87 S.W. 1148, 122 Am.St.Rep. 609; Doe v. Clayton, 73 Ala. 359. On appellants’ concession of the beginning of appellee’s claim and occupancy in 1915, appellee’s title by limitation was perfected prior to 1926.

But both parties have briefed the case on a proposition to the effect that possession did not begin until 1917. If possession began in 1917, then appellants make the following point against appellee’s title by limitation to the mineral interest. On February 12, 1925, I. R. Bordages, a remote grantee under Munson Bowes, executed a mineral lease on the Munson Bowes 320 acres to Gulf Production Company. On the 12th day of March, 1926, Bordages executed to Gulf Production Company his mineral deed, filed for record April 20, 1926, conveying to it “all the minerals in, under or upon the Munson Bowes 320 acres of land.” The title of Gulf Production Company was regularly transferred to appellee, Gulf Oil Corporation. On these facts, appellants contend that the execution by Bordages of his lease to Gulf Production Company and his conveyance of the mineral rights to Gulf Production Company — both instruments executed prior to the maturing of the statute of limitations of ten years if possession began in 1917 — constituted a severance of the mineral rights from the surface, and that the subsequent possession by Hays as a tenant of Bordages, of the surface, did not have the effect of maturing in appellee a title by limitation to the minerals. This proposition is denied. It is the law of this state that a deed executed by one in possession, and who continues his possession the full length of .the limitation period, severing the mineral rights from the surface, does not stop the running of the statute of limitation in favor of the mineral rights. Broughton v. Humble Oil & Ref. Co., Tex.Civ.App., 105 S.W.2d 480; Clements v. Texas Co., Tex.Civ.App., 273 S.W. 993; Thomas v. Southwestern Set. & Development Co., Tex.Civ.App., 131 S.W.2d 31.

But appellee perfected a title by limitation of five years to the mineral rights, independent of the possession by 'Hays as a tenant- of the- surface rights. On this proposition we take the following statement from appellee’s brief:

“I. R. Bordages, the record owner holding the superior title to the land involved, executed an oil, gas and mineral lease to Gulf Production Company on February 12th, 1925. This lease covered the entire 320-acre survey (Doc.Ev., p. 14). Gulf Production Company, whose title Gulf Oil Corporation acquired, went into possession of the Munson Bowes 320-acre survey and began actual drilling operations for the production of oil and gas from said land on February 11th, 1926.
“W. C. Clemons, Gulf Production Company’s superintendent in charge of its operations in the Gulf Coast territory, testified that Gulf Production Company began drilling of the first well on February 11th, 1926, and that the drilling of said well continued until March 8th, 1926. This well was completed as a dry hole. However, well No. 2 was begun on March 17th, 1926, and was continously drilled until April 13th, 1927. No production was had from this well. Prior to the completion of well No. 2, well No. 3' was begun on February 8th, 1927, and finished on. August 26th, 1927. Well No. 4 was begun on September 14th, 1927, and was finished on March 25th, 1928. Well No. 5 was begun on April 6th, 1928, and finished on May 12th, 1928. Well No. 6 was begun on June 18th, 1928, and was finished as a producer on September 7th, 1928. This well No. 6 produced about 3797 barrels of oil and later, however, this well was reworked; said reworking job having been completed on March 20th, 1931. Well No. 7 was begun on February 20th, 1929, and this well was completed as a producer on June 17th, 1929, and continued to flow until July 19th, 1929. Well No. 8 was begun on November 28th, 1929, and was completed on April 15th, 1930.
“The witness Clemons further testified that from the time Gulf began operations on the land on February 11th, 1926, until March 30th, 1931, Gulf Production Company was continuously drilling and attempting to produce oil on the Munson Bowes 320-acre survey. During all of that time Gulf Production Company had derricks, standard rigs, toolhouses, and the ordinary machinery necessary to drill and produce oil, gas and other minerals.
“The deed under which Gulf Production 'Company claimed covered the entire 320-acre survey. It was agreed that Gulf Production Company paid all taxes of every kind when they became due and before they became delinquent, beginning with the year 1926 up to and including the year 1937.”

These acts of possession by appellee, subsequent to the date of its lease and deed from Bordages, matured in it title by limitation under the statute of five years. Authorities last above cited; see, also, 1 Summers Oil & Gas, § 138; 1 Am.Jur. 859—Adverse Possession, Sec. 120; Plant v. Humphries, 66 W.Va. 88, 66 S.E. 94, 26 L.R.A.,N.S., 558; Humphreys v. Idaho Gold Mines Development Co., 21 Idaho 126, 120 P. 823, 40 L.R.A.,N.S., 817; 13 A.L.R. 380; 67 A.L.R. 1446; 93 A.L.R. 1236.

Appellants’ answer to this conclusion is to the effect that the heirs of Katherine Bowes in 1897 executed among themselves a partition deed, dividing the Munson Bowes survey into seven lots, and that appellee conducted no drilling operations on lot 4. There is no merit in that contention. Appellee, and those through whom it holds, claimed the entire Munson Bowes survey as one tract. It was deeded to them as one tract, fenced, used and occupied by them as one tract. The partition in 1897 was not binding upon appellee and did not withdraw lot No. 4 from its claim of title to the entire 320 acres.

Affirmed.


text:
    ANTHONY MILLER, Inc., v. TAYLOR-FICHTER STEEL CONST. CO., Inc.
    No. 3632.
    Court of Civil Appeals of Texas. Beaumont.
    March 22, 1940.
    Rehearing Denied April 10, 1940.

      Alto V. Watson, of Port Arthur, Chas. S.Pipkin, of Beaumont, and Conlen, La-Brum & Beechwood, and George E. Beechwood, all of Philadelphia, Pa., for appellant.
    Orgain, Carroll & Bell, of Beaumont, and K. W. Stephenson, of Orange, for ap-pellee.
   WALKER, Chief Justice.

This case was heard in the court below on the pleadings. The judgment sustained the plea in abatement filed by appellee, Taylor-Fichter Steel Construction Company, Inc., to the petition of appellant, Anthony Miller, Inc. The plea in abatement made the issue that appellant, a foreign corporation, was transacting business in Texas without the permit required by Article 1529, Vernon’s Ann.Civ.St.: "Permit. Any corporation for pecuniary profit, except as hereinafter provided, organized or created under the laws of any other State, or of any territory of the United States, or of any municipality of such State or territory, or of any foreign-government, sovereignty or municipality, desiring to transact or solicit business in Texas, or to establish a general or special office in this State, shall file with the Secretary of State a duly certified copy of its articles of incorporation; and thereupon such official shall issue to such corporation - a permit to transact business in this State for a period of ten years, from the date 'of so filing such articles of incorporation.” . .

We give the following summary of appellant’s petition:

(1) Appellant is a private corporation, organized and existing under and by virtue of the laws of the State of New Jersey, with its principal office in the State of New Jersey. Appellee is a Delaware corporation, with an office and agent in Jefferson County, Texas. On May 1, 1938, and since that time, appellee was and is the principal contractor for the erection of the Neches River bridge, over the Neches River in the State of Texas.

(2) Between the dates of May 1, 1938, and July 27,. 1938, appellant was not engaged in nor had it ever been engaged in the transaction of business in the State of Texas, nor had it had either a general or special office in the State of Texas. Between these dates, appellee, acting by and through its agents thereunto duly authorized, made certain false and fraudulent misrepresentations of fact and concealment of facts to appellant in the City of New York and State of New York to induce appellant to enter upon and undertake a contract with defendant for the cleaning, scraping and painting of the Neches River bridge, located across' the Neches River, a navigable stream between Jefferson County and Orange County, Texas, -Appellant, relying on the misrepresentations and fraudulent concealments of appellee, oh July 7, 1938, in the City of New York, in the State of New York, entered into a contract with defendant for the cleaning and painting of said bridge. The misrepresentations and fraudulent concealments were of material facts made by appellee to appellant for the purpose of inducing appellant to rely thereon and to act thereon to its detriment. Appellant did act and rely thereon to its detriment; the representations by appellee to appellant were false and known to be false by appellee at the time they were made; but appellant did not know that they were false. By reason of these misrepresentations appellant was induced to execute the contract to do the work outlined above.

(3) The cpntract entered into between appellant and appellee was subject to the approval of the State Highway Commission of the State of Texas 'and the federal P. W. A. Directors; appellee, through S. D. Kapelsohn, obtained such permission and approval of said contract. On or about August 1, 1938," appellant “for the first time” entered upon the performance of its contract with appellee.

(4) When the conditions falsely represented to appellant came to its attention, appellant ■ called them to the attention of appellee; thereupon appellee, both in the State of Texas and in the City and State of New York, from time to time during the period from August, 1938, to December, 1938, promised appellant, as an inducement to it to furnish the material and to continue to perform the work, to pay for all costs of material to be furnished and for labor to be performed and expenses incurred, plus a profit, and to meet and comply with the warranties upon which the original contract was executed. Appellant, relying on these promises and inducements, continued to furnish the labor and material and to perform the work; finally appellant demanded of appellee that the agreements 'and promises thus orally made in the State of Texas and the City and State of New York, be reduced to writing, which appel-lee refused to do. Because of the failure on the part of appellee to contract in writing to pay on a 'cost plus basis, and because it refused to perform the conditions agreed upon orally, appellant discontinued work on the bridge at the close of the working day on January 25, 1939. Appellant entered on the work in August, 1939, on the Neches River bridge in Texas, and discontinued work at the close of the working day on January 25, 1939.

Opinion.

No point is made that Article 1529, supra, and also Articles 1536 and 2031a, do not control this case. The point at issue is one of procedure. In answer to the plea in abatement, was appellant required to plead and prove that it had a permit to do business in Texas; or, in support of its plea in abatement, was appellee required to offer proof that appellant did not have a permit? The court heard no evidence, but determined, as a matter of law on the allegations of the petition, that appellant’s cause of action, if any it had, was not jus-ticiable in the courts of this state, and dismissed the suit. It is appellant’s point that its petition did not affirmatively allege a transaction within Article 1529, and, therefore, appellee should have supported its-plea in abatement with proof. It is our conclusion that the court correctly sustained the plea in abatement, and that appellant’s proposition should be overruled.

The original contract for, painting, scraping, cleaning, brushing, etc., the Neches Riyer bridge was executed on the 7th day of July, 1938, by appellant in the City and State of New York, induced by fraudulent representations made to appellant by appellee in the City and State of New:York. -On the theory that, these allegations constituted a cause of action, appellant plead for the cancellation of the original contract,- invoking the local forum on principles of comity. The fact that the contract was induced by fraud, standing alone, did not give appellant a cause of action for cancellation. It was required also to allege that it had suffered substantial damages as a proximate result of the fraud. Russell v. Industrial Transport Co., 113 Tex. 441, 258 S.W. 462. In its petition, appellant recognized the soundness of this proposition by pleading'substantial damages as the proximate result of the alleged fraud; in its brief it makes this statement:' “The injury suffered by plaintiff is set out as a necessary element of plaintiff’s action, but no recovery is sought therefor.” So, appellant’s cause of action for cancellation consisted (a) of the fraud inflicted upon it by appellee in the City and State of New York, and (b) of the damages suffered by it in Texas as a proximate result of its attempt to execute the contract in Texas.

The effort of appellant to execute the contract in Texas constituted doing business in Texas, within the meaning of Article 1529. When the contract was executed in the City and State of New York, it reasonably appears from the allegations of the petition that the parties contemplated that it would take many months for its due execution; appellant was engaged in its execution from August, 1938, to the 25th day of January, 1939, and then abandoned the work before it was completed. In S. R. Smythe Co. v. Ft. Worth Glass & Sand Co., 105 Tex. 8, 142 S.W. 1157, 1159, our Supreme Court held that similar facts constituted doing business in Texas. The court said: “It is immaterial where the agreement was made, whether in Texas or in Pennsylvania. Its performance was to be had in Texas.” Under that case, clearly the work appellant was required to do on the Neches River bridge constituted doing business in Texas, business it could not transact without a permit under Article 1529. On the allegation of appellant’s petition, to maintain its cause of action in the courts of this State, it was required to allege affirmatively that it had a permit. The only answer to the plea in abatement was for appellant to amend its petition and plead a permit. When it refused to meet the issue made by the plea in abatement, as a matter of law on the construction of the petition, the lower court correctly ruled that appellant’s cause of action was not justiciable in the courts of this state. See also Smith et al. v. Jasper County Lbr. Co., 124 Tex. 156, 76 S.W.2d 505, and the many authorities therein cited.

We have discussed the issues presented by appellant on its theory that its cause of action was for the cancellation of the contract executed in the City of New York on the 7th day of July, 1938, that being the only theory presented by its brief. But the cancellation of the contract of the 7th day of July, 1938, is not the case plead by appellant. After pleading the execution of the original contract, appellant plead further that, to make the contract binding, it was necessary for it to be ratified by the Highway Department of the State of Texas, or its engineer, and that appellee secured this ratification. It plead further that, after it entered upon the execution of the original contract and after it discovered the fraudulent acts of appel-lee, the original contract was amended by subsequent oral conditions, agreed to by both appellant and appellee, partly in the State of Texas and partly in the City and State of New York. So, the original contract was no longer binding upon the parties but the parties were bound by the new contract entered into orally. The damages suffered by appellant accrued in Texas. All these facts affirmatively appear on the face of the petition; and, therefore, to have any standing in the courts of this State, as against the issues of law made by the plea in abatement, appellant was required to plead affirmatively that it had a permit to do business in Texas. Authorities last above cited.

Appellant prayed only for cancellation of the original contract. We overrule its proposition that “any demand” as used in Article 1536: “No such corporation can maintain any suit or action, either legal or equitable, in any court of this State upon any demand, whether arising out of the contract or tort, unless at the time such contract was made, or tort committed, the corporation had filed its articles' of incorporation under the provisions of this chapter.” means a demand for damages or something due, and does not comprehend within its meaning a cause of action for cancellation. An action to cancel a con? tract constitutes a demand in equity. Article 1536 is broad enough, in our judgment, to cover an equitable demand to cancel a contract, and bars the right if the foreign corporation, suing as plaintiff, has not secured the necessary permit to do business in Texas.

The judgment of the lower court is affirmed.

Affirmed.


author: BAUGH, Justice.

text:
    W. T. CARTER & BRO. et al. v. STATE et al.
    No. 8959.
    Court of Civil Appeals of Texas. Austin.
    April 3, 1940.
    On Motion for Correction May 8, 1940.
    C. R. Wharton, of- Houston, V. A. Collins, Fox Campbell, Z. L. Foreman, and M. M. Feagin, all of Livingston, and Dillon Anderson, James W. Mehaffy, and Baker, Botts, Andrews, & Wharton, all of Houston, for appellants.
    Gerald C. Mann, Atty. Gen., and Robert E. Kepke, James Noel, and H. Grady Chandler, Asst. Attys. Gen., for appellee State of Texas.
    Bryan, Suhr, Bering & Bell, of Houston, and Henry H. Brooks, of Austin, for other appellees.
   BAUGH, Justice.

The question presented on this appeal is one of conflict of jurisdiction between the District Court of Travis County, Texas, ■and the District Court of Polk County, Texas. Appeal to this court is from an order of the District Court of Travis County-refusing- to dissolve a temporary injunction, granted ex parte, by the Travis County Court against-the plaintiffs in two Polk County suits, enjoining them from further prosecuting the Polk County suits or taking any further steps therein than to dismiss same.

The history of this litigation is already largely of record in reported cases. Briefly summarized it is as follows: Sometime prior to June 9, 1937, Short, Gholson, Ses-sums, and Smith applied to the Commissioner of the General Land Office for an oil and gas lease on some 3,000 acres of land in Polk County as unsurveyed public free school land belonging to the State. A portion of this land was at the time occupied by W. T. Carter & Brother, V. A. Collins, and B. E. Quinn under claims of grants from the State as a part of the Andres Morales League, titled in 1835. For convenience, the latter named parties will be referred to as occupants; and the parties first above named will be referred to as applicants. Ón June 9, 1937, the occupants sued the applicants and the Land Commissioner in the District Court of Polk ' County to enjoin the Land Commissioner from executing to the applicants a mineral lease on said lands on the grounds that the occupants owned them. This injunction was granted by the trial court before the Land Commissioner had acted on their applications ; affirmed on appeal therefrom by the Court of Civil Appeals, 121 S.W.2d 486; writ granted by the Supreme Court and these judgments reversed and the injunction dissolved. See 126 S.W.2d 953. Meantime, on june 17, 1937, the State filed suit in the District Court of Travis County in trespass to try title to all of these lands against' some 300 defendánts, including both appellants and appellees herein, subject to whatever rights the applicants might have to a mineral lease thereon. This suit was filed 'at the instance of the applicants who were made defendants.

After the decision of the Supreme Court on the appeal from the original Polk County suit, some of the occupants of said lands (appellants here), under their construction of the opinion of the Supreme Court in that case, filed two'suits in the District Court of Polk County on March 9, 1939, against the ■four applicants above named — Short, Ghol-son, Sessums and Smith — for -damages for alleged slander and disparagement of the occupants’ title. To these suits the applicants and the State interposed pleas in abatement of the State’s suit against them then pending in the District Court of Travis County. These pleas were overruled by the District Court of Polk County. Thereupon, the District Court of Travis County, upon application of the State and of the four named applicants, issued the ex parte temporary injunction here involved. The plaintiffs in those suits filed their motion to dissolve that injunction which was overruled; hence this appeal.

The first question, briefly stated, therefore, is: Does the suit by the State in-Travis County in trespass to try title to, and possession of, all of these lands against some 300 or more defendants preclude the appellants, who had for many years occupied, used and claimed title to á part of said lands under asserted grants from the State, and paid taxes thereon, from suing the named applicants in Polk County, Texas, for damages for slander of their titles?

The general rule is well settled that when a court has properly acquired jurisdiction over the parties and subject matter of a controversy, it can retain that jurisdiction to the exclusion of all other courts of concurrent jurisdiction; and can protect such jurisdiction so first acquired by injunctive process. Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063; Conn v. Campbell, 119 Tex. 82, 24 S.W.2d 813; Way v. Coca Cola Bottling Co., 119 Tex. 419, 29 S.W.2d 1067; 1 Tex.Jur., Secs. 67-71, pp. 93-101; 11 Tex.Jur. Sec. 59, p. 787. In general it may be said that the essential basis for this rule is identity of parties and of subj ect matter in the two suits; and whether the judgment in the suit first filed will be res adjudicata of the matters involved ins a subsequent suit. Though the identical issues may not be involved in the two suits, if the issues involved in the suit last filed! are entirely dependant upon and concluded! by the issues to be adjudicated- in the suit, first filed; then the second suit,should beheld in abeyance until the first suit is disposed of. Tidewater Oil Co. v. Railroad Com., Tex.Civ.App., 76 S.W.2d 553. Ap-pellees contend that such is the situation; presented in the instant suit.

The Travis County suit is by the State as sole plaintiff. It seeks recovery of' title to said lands against all defendants,, subject to whatever rights the named applicants may have to a mineral lease thereon. The superior title of the State could be: adjudicated without establishing the rights of the defendant applicants. to a mineral lease thereon. That question could be then left to the determination of the Land Commissioner who has not acted upon their application, and whose duty it is to first pass upon these matters. Short v. W. T. Carter & Bro., Tex.Sup., 126 S.W.2d 953; Art. 5421c, Sec. 8, Vernon’s Ann.Civ.Tex. Stats.

Though the State is the sole plaintiff in the Travis County suit, it is not controverted that its suit was brought at the instance of the named applicants. While they are nominally defendants, it appears that they are in effect plaintiffs, and that the Attorney General is relying upon them not only to defray the expenses of the State’s suit, but to secure the evidence upon which it is to be tried. They likewise joined in the application for the injunction here involved, manifestly, among other things, to avoid the necessity of defending the suits against them in Polk County. Regardless of this, however, and of the policy of the Attorney General, necessitated by lack of sufficient appropriations to prosecute the State’s suits otherwise, to rely upon private parties to pull the laboring oar in the State’s lawsuits on the prospect that they also may profit thereby, these matters are not decisive of the issues here presented.

It is urged by appellants herein that neither the parties nor the subject matter of the Polk County . suits are identical with those in the Travis County suit; that the State is, not a party to the Polk County suits; that the Polk County suits involve only a private controversy between the parties to those suits, a. determination of which would not be res adjudicata against the State; and consequently that no such conflict of jurisdiction exists which would warrant the Travis County District Court in enjoining the prosecution of the Polk County suits. Appellants rely particularly upon the case of Prairie Oil & Gas Co. v. State, Tex.Civ.App., 214 S.W. 363, affirmed by the Supreme Court in 231 S.W. 1088; and the language of the Commission of Appeals in Short v. Carter & Bro., 126 S.W.2d 953. It may be conceded that a judgment in the Polk County suits, the State not being a party thereto, would not constitute res adjudicata, as such, against the State in the Travis County suit. If, in the Polk County suits, there had been involved only a superior right to purchase said lands from the State, or the superior right, as between the parties to those suits, to a mineral lease thereon, or other claims between such parties not predicated • upon an absolute fee simple title in appellant; those .cases, under the authorities cited, could have proceeded to a final judgment without prejudice to the' right of the State to establish its title to said lands in the Travis County suit. But the Polk Coupty suits for .slander of title show upon the face of the pleadings therein to be predicated upon an absolute title asserted by appellants to said lands. Such title was the basis of their cause of action in those suits, and a recovery therein would necessarily have required an adjudication of the title to said lands. Since the real controversy involved is the proper location of the Andres Morales League, the proper location of the boundaries thereof would have been necessary to an adjudication of the Polk County suits. And a final adjudication of these matters, fixing the boundaries of that Survey, would be binding and conclusive in all subsequent suits involving the same subject matter whether'the parties and the property involved in such suits are identical or not. This, not on. the ground of estoppel, nor as res adjudicata; but under 'the recognized rule of stare decisis. Benavides v. Garcia, Tex.Com.App., 290 S.W. 739; Porter v. State, Tex.Civ.App., 15 S.W.2d 191, writ ref.;. Blaffer v. State, Tex.Civ.App., 31 S.W.2d 172, writ ref.; 11 Tex.Jur. Sec. 96, p. 838; 26 Tex.Jur., Sec. 368, p. 46; idem Sec. 493, p. 303. If, therefore, the Polk County suits should proceed- to - final judgments, establishing title to said lands in appellants, which, under their pleadings would have been necessary to their recovery in those suits; and in doing so, had judicially located on the ground the boundary lines of the Andres Morales-League; Such a judgment would, under the doctrine-of stare decisis, be conclusive against all parties in a subsequent suit involving the same controversy. And this is true even in a suit by the State relating to vacancies, though the State be not. a party to the suit in which such boundaries were judicially established. Porter v. State, supra; Blaffer v. State, supra; Federal Royalty Co. v. State, (Whiteside Case); 128 Tex. 324, 98 S.W.2d 993, 996. If, as contended by appellants, they are entitled to proceed to final judgment in the Polk County suits, wherein it would be necessary to adjudicate both title and boundaries of the Morales League; it would follow as a matter of course that an appeal from judgments therein would require the appellate courts to review the issues therein tried. And a determination of those issues, that is, of title and boundary, would be binding, under the rule of stare decisis, upon the State in any other suit brought by it involving the same lands.

Venue of the State’s suit was properly laid in Travis County under Art. 5420, R.C.S.1925. All the parties to the Polk County suits were also parties to the Travis County suit. The State is not interested in the controversy as to damages between the parties defendant; but since the outcome of that controversy ultimately depends upon an adjudication of the issues of title and boundaries, appellants can either adjudicate their controversy in the Travis County suit, or it can be held in abeyance in the Polk County suits until the Travis County suit is determined, and then be tried in Polk County.

The contention of appellants that great hardship, delay and additional 'expense is imposed upon them by such a course, may be conceded. These matters were taken cognizance of by the Legislature, and Art. 5420 amended in 1939, so as to require such suits by the State to be brought in the county where the land or a part thereof is situated. H.B. 359, Acts 1939, Reg.Sess. 46th Leg., p. 464, Vernon’s Ann. Civ. St. art. 5420. But the instant suit was filed in Travis County prior to this amendment.

We must also assume that the Attorney General will prosecute the State’s suit for said lands with diligence and expedition; and not permit the applicants for a mineral lease thereon to use his good offices for any purpose of delay, or to protect themselves from damages for torts asserted against them by the aggrieved occupants, in which the State is not interested. The concern of the State is the recovery of its public lands. Its suit for that purpose was properly brought in Travis County. Having properly acquired jurisdiction over the subject matter, which, as above stated, would, under the rule of stare decisis, be interfered with by the Polk County suits, the Travis County District Court had authority to protect its jurisdiction by injunction. We do not interpret the injunction granted to require appellants to dismiss their suits in Polk County. They can be held in abeyance until the Travis County suit is disposed of.

Under the conclusions reached, the judgment of the trial court is affirmed.

Affirmed.

On the State’s Motion for Correction of Findings of Fact.

The Attorney General complains that if our statement in our opinion to the effect that the applicants had for many years, occupied, used and paid taxes on said lands under asserted grants from the State, were intended as a fact finding, it is not sustained by the record on this appeal; and asks that it be corrected. For the sake of accuracy, we make this correction. Such facts are not definitely shown in this record. However, such facts were definitely alleged in appellants’ pleadings in the Polk County suits, copies of which do appear in this record. They are also reflected in the opinion of the Court of Civil Appeals in Sessums v. W. T. Carter & Bro., 121 S.W.2d 486; and we took them to be without dispute.

Further complaint is also made of our statement to the effect that the “Attorney General is relying upon them (the applicants) not only to defray the expenses of the State’s suit, but to secure the evidence upon which it is to be tried.” This statement was predicated upon fact recitals made by the Court of Civil Appeals in 121 S.W.2d 486, supra, wherein the Attorney General represented the State, and was obviously true when the suit was filed in Travis County. It was also stated in oral argument of this cause and not denied.

In fairness to the present Attorney General, however, it should be said that in his motion herein he represents and states t& the court that since the filing of the Travis. County suit and his succession to that office, his department has made its own independent investigation of the facts relating to the alleged vacancy, and is now prosecuting the State’s suit in Travis. County, independent of any action on ⅛’? part of the vacancy applicants.

The State’s motion is therefore granted in the respects above indicated.

Granted.


author: O’QUINN, Justice.

text:
    COUSINS et al. v. SPERRY.
    No. 3613.
    Court of Civil Appeals of Texas. Beaumont.
    March 14, 1940.
    Rehearing Denied April 10, 1940.
    J. R. Beck and Geo. E. Holland, both of Beaumont, for appellants.
    Morris & Bennett, of Beaumont, for ap-■pellee.
   O’QUINN, Justice.

This is an appeal from a judgment of the 60th District Court of Jefferson County, Texas, perpetually enjoining the defendants below, J. D. Hensley, R. D. Cousins, and W. R. Cousins, their tenants, agents, servants, and employees, from further using or travelling over a certain passageway pr road described in appellee’s petition, and from further trespassing upon said property, and from further molesting her in her peaceable possession and enjoyment of her said property.

The case was tried upon appellee’s first amended original petition, the appellants’ first amended original answer and cross-action, and appellee’s first supplemental petition and answer. The land involved is 1.-S67 acres, a portion of a 15 acre tract out of the Absalom Williams survey in Jefferson County, Texas.

On December 9, 1925, J. D. Hensley owned the 15 acres, of which the 1.567 acres is a part, and on that date he and his wife, Nellie Hensley, conveyed the 15 acres by general warranty deed to Gold Hill Gardens, a Texas corporation, in consideration of $9,000 paid, and the assumption of % of three certain promissory notes in the sum of $2,400 each, dated June 30, 1925, executed by J. D. Hensley and payable to the order of Eley A. Blanchette, in one, two and three years after date, respectively, bearing 8% interest. This deed was promptly placed of record. Immediately after acquiring the property, Gold Hill Gardens began to establish a nursery on said land and opened a driveway into same from the highway leading from the City of Beaumont to Voth. The land bordered on the highway. Gold Hill Gardens fenced the 15 acres and placed a gate at the entrance of the driveway off of the highway into the nursery grounds.

On June 15, 1928, Gold Hill Gardens negotiated a loan of $10,000 from the San Ja-cinto Life Insurance Company, and executed its eight promissory notes therefor, the first seven in the sum of $1,000 each, and the eighth for $3,000, said notes due and payable to said insurance company in one to eight years, respectively, after date. To secure the payment of these notes, Gold Hill. Gardens, at the time said notes were given, executed to George A. Wells, trustee for the benefit of said San Jacinto Life Insurance Company, a deed of trust covering all of said 15 acres of land, said deed of trust containing the usual terms, covenants, provisions, and agreements with the powers contained in such instruments of conveyance. This instrument was recorded in the Mortgage and Lien Records of Jefferson County, Texas, on June 20, 1928. , ■

On May 31, 1932, for a valuable consideration, San Jacinto Life Insurance Company transferred and assigned the notes and deed of trust on the land securing the payment of the notes, to Great Southern Life Insurance Company.

On November 18, 1936, for a valuable consideration, Great Southern Life Insurance Company transferred and assigned the notes and deed of trust on the land securing the payment of the notes, to Mrs. Lucy Fuller.

On May 12, 1937, for a valuable consideration, Mrs. Lucy Fuller transferred and assigned the notes and deed of trust on the land to secure the payment of the notes, to Mrs. Maybelle E. Sperry.

On December 4, 1937, the notes not having been paid, Mrs. Sperry directed the trustee, George A. Wells, to sell the land under the deed of trust, and accordingly he, Wells, trustee, duly advertised the land for sale, and on January 4, 1938, sold the land under the deed .of trust lien and same was purchased by Mrs. Sperry, and Wells executed to her a deed to the land, 1.567 acres. From time to time parties had purchased portions of the 15 acres, and as these parcels of the .land were sold, releases of the deed of trust lien were executed covering the sold parcels, leaving, at the time of the trial, only 1.567 acres still subject to the deed of trust lien.

On February 15, 1930, J. D. Hensley being the owner of a- portion of the-15 acres originally owned by him, situated in the northern part of the 15 acres, and desiring a passage way or road from the Voth Highway (Flighway 8) to his,land, he purchased from Gold Hill Gardens a roadway. The deed conveying same was as follows:

“The State of Texas
“County o.f Jefferson Know All Men by
These Presents:
“That Gold Hill Gardens, a private corporation, duly incorporated under the laws of the State of Texas, the principal office being in Beaumont in said county and state, for and in consideration of the sum of One ($1.00) Dollar, in hand paid said corporation, and other good and valuable considerations, the receipt of which is hereby acknowledged, have granted, and conveyed, and by these presents do grant and convey unto the said L. D. Hensley, his heirs and assigns, the free and undisputed use, liberty, privilege and easement of passing in and along a certain way across a certain tract of land situated in said county adjoining the premises of said J. D. Hensley, and now occupied by the said Gold Hill Gardens, being a part of the same tract of land conveyed to the said Gold Hill Gardens by the San Jacinto Life Insurance Company, and by deed dated on 31st. day of January, A. D. 1929, and recorded in the records of said county, in book 226 M. & L. page 25-27, to which reference is here made, said way being fifty (50) feet in breadth and extending from the N. W. corner of a plat or parcel of ground owned by the said J. D. Hensley and described and filed for record in book 317, D. R. page 221-222, of said county and extending due west to the highway known as the Voth Road, said way being the one now used as a road together with free ingress, egress, regress, to and for the said J. D. Hensley, his heirs and assigns, and their heirs and their tenants, by foot, with carts, wagons, carriages, automobiles and other vehicles, horses, mules,, or cattle, as by him or them shall be necessary or convenient at all times and seasons forever, in, along, upon and out of-said way, in common with the said Gold Hill Gardens and their tenants, to have and to hold all and singular the rights and privileges aforesaid to him, the said J. D. Hensley, his heirs and assigns to their proper use and behoof, in common with the said Gold Hill Gardens and their assigns and tenants.
“In witness whereof, Gold Hill Gardens, aforesaid, have caused these presents to be signed by E. W. Gross, its president, and its common seal hereunto affixed this 15th day of Feb.A.D. 1930.
“(seal) Attest: Gold Hill Gardens
“C. S. Dickens. By E. W. Gross, President.”

The instrument was duly acknowledged, and placed of record.

The only question for decision is that of whether the defendants (appellants herein) were entitled to the use of said fifty foot strip conveyed to J. D. Hensley for use as a passage or roadway- to his premises, they owning land adjoining said fifty foot strip or roadway. When W. R. Cousins and R. D. Cousins acquired their property, whether before or after the easement to Hensley, or before or after the deed of trust mortgage was given on the whole of the 15 acres of land by Gold Hill Gardens to San Ja-cinto Life Insurance Company, is not disclosed by the record. Neither does it appear from the record from whom they acquired the property. As before stated, it does appear that portions of the 15 acres were from time to time conveyed, and that as they were sold, the holder of the lien released same as to the portions sold, leaving, finally, the 1.567 acres unpaid for and covered by the deed of trust lien. The roadway conveyed to Hensley crossed over this I.567 acres. The objection of Mrs. Sperry' to persons passing on and over this road on the 1.567 acres brought this law suit.

The roadway granted to Hensley by Gold Hill Gardens was a private way. For a consideration it was granted by the owner of 'the land to and its use confined to J. D. Hensley, his heirs, assigns and tenants. It was not granted to or for the use of the public in general. 50 C.J. (Subject Private) page 373, Sec. 33. It was not a public highway or road. We find nothing in the record to indicate it was authorized, laid out, opened up or maintained by the county authorities. It was located, graded and shelled by the owner of the land, Gold Hill Gardens, for the accommodation of persons wishing to enter upon the 15 acres to inspect or purchase nursery stock then and there being grown by the Gold Hill Gardens for sale. Its use by persons generally different from business of the nursery, did not continue for that length of time to have given the general public a right to its use by prescription. There is no contention that its use for travel purposes was obtained by condemnation. The whole contention of appellants, as we understand the record, is that as they owned the land on or near to the roadway granted to Hensley, that they too were entitled to its free and unobstructed use. The Plensley road being a private way obtained by purchase and its use restricted solely to him, his heirs, assigns and tenants, the contention is not sound. Furthermore, Mrs. Sperry being the owner and holder of the unpaid notes, the payment of which was secured by the deed of trust on the land, given before the easement was conveyed to Hensley, and the notes being due and unpaid, and she caused the trustee to sell the land under the deed of trust lien, she purchasing the property at the foreclosure sale, she took the title to the land free from the easement. Rembert v. Wood, 16 Tex.Civ.App. 468, 41 S.W. 525, writ refused.

No error appearing, the judgment is affirmed.


author: JACKSON,. Chief Justice.

text:
    PARK v. COULSON.
    No. 5140.
    Court of Civil Appeals of Texas. Amarillo.
    April 22, 1940.

      Grady L. Fox, of Amarillo, for appellant.
    Henry L. Ford, of Amarillo, for appel-lee.
   JACKSON,. Chief Justice.

The appellee, L. T. Coulson, instituted this suit in Justice Court, Precinct No. 1, of Potter County, Texas, against the appellant, W. B. Park, on a promissory note executed by him in renewal of a former note for the sum of $185 due on or before twelve months after October 6, 1935. From a judgment in justice court in favor of appellant an appeal was prosecuted to the county court.

The appellant as a defense pleaded the note was given for services of the appellee as a chiropractor who was not a legally licensed physician nor medical doctor as required by the laws of the State of Texas and all charges for such services were in violation of law and the note given therefor was illegal and without consideration.

The appellee testified that he was a licensed chiropractor in the State of Oklahoma where the services for which the note was given were rendered.

There is neither allegation nor proof in this record as to the right of ap-pellee to practice chiropractic in the State of Oklahoma and, in the absence of such proof, it is presumed that the law of Oklahoma relative to the practice of a chiropractor for pay is the same as the law in Texas. Kinney et al. v. Tri-State Telephone Co. et al., Tex.Civ.App., 201 S.W. 1180; Brand, Banking Commissioner et al. v. Eubank, Tex.Civ.App., 81 S.W.2d 1023; Hicks et al. v. Rapides Grocery Co., Inc., Tex.Civ.App., 101 S.W.2d 1042; Mauritz et al. v. Schwind et al., Tex.Civ.App., 101 S.W.2d 1085.

Article 741 of the Penal Code of the State of Texas provides:

“Any person shall be regarded as practicing medicine within the meaning of this chapter:
“1. Who shall publicly profess to be a physician or surgeon and shall treat or offer to treat any disease or disorder, mental or physical, or any physical deformity or injury, by any system or method, or to effect cures thereof.
“2. Who shall treat or offer to treat any disease or disorder, mental or physical, or any physical deformity or injury, by any system or method, or to effect cures thereof and charge therefor, directly or indirectly, money or other compensation.”

The record shows conclusively that the note was given for the treatment of a patient by appellee for some supposed disease or disorder, physical deformity or injury or some mental or physical ailment and, under the law of the State, article 739 of Vernon’s Texas Statutes, 1936 Civil and Penal Code, Centennial Edition, and articles 740 and 742 of Vernon’s Texas Statutes, 1939 Cumulative Supplement, Civil and Penal Code, the appellee was prohibited by the penal laws of this State from collecting fees as a chiropractor and for so doing was subject to prosecution for violation of our criminal law. The charge for services of appellee was therefore unlawful and the note for the services was illegal and unenforceable.

In 10 Tex.Jur. 248, para. 142, the law is stated in the following language:

“Where the original contract is illegal, any subsequent contract which carries it into effect is also illegal. A mere change in the security or in the form or evidence of a demand will not remove the taint. If the subject matter of the contract can be traced back between privies to an original illegal contract, the substituted security is void; and this is true even though the parties liable on the last security were not privy to the illegal bargain.
“A contract guaranteeing performance of an illegal contract, or a lien securing its performance, is also invalid, and notes or checks given pursuant to such a contract, or a note given in renewal of, or in substitution for, a previous note which was founded on an illegal consideration, or a subsequent promise to pay the debt evidenced by such a note, cannot be enforced.”

A note given pursuant to a contract illegal will not be enforced as between the parties. 10 Tex.Jur. 294, para. 143.

The judgment is reversed and the cause remanded.


text:
    EAST TEXAS CONST. CO. v. LIBERTY COUNTY.
    No. 3658.
    Court of Civil Appeals of Texas. Beaumont.
    April 11, 1940.
    John L. Compton, of Liberty, for appellant.
    Daniel & Daniel, T. J. Hightower, and Thos. A. Wheat, all of Liberty, for ap-pellee.
   WALKER, Chief Justice.

This appeal was prosecuted by appellant, East Texas Construction Company, from the judgment of the lower court sustaining the general demurrer of appellee, County of Liberty, to its petition. For cause of action, appellant alleged that:

(1) It was a Texas corporation, and ap-pellee was a county of the State of Texas, “created and existing under and by virtue of the laws and constitution of the State of Texas”.

(2) On the 6th day of June, 1938, appel-lee entered, into a written contract with certain oil companies named in its petition to construct one of its public roads “in consideration of the aforementioned oil companies donating collectively the aggregate sum of $3800.00, to be used in the purchase of pit run gravel from plaintiff at the rate of 75‡ per cubic yard”.

(3) On the 16th day of August, 1938, ap-pellee passed an order “approving and accepting the road,” and under the order the sum of $3,800, the money donated by the oil companies, was paid to appellant.

“V. ' That in order to finally complete said road as agreed by defendant, it was necessary to place thereon 709½ cubic yards of gravel in addition to the 5066 cubic yards at the rate of 75‡ furnished by said oil companies or the equivalent thereof, the sum of $3800.00. That said additional 709½ cubic yards of gravel was delivered on said road by plaintiff, with the full knowledge and consent of defendant, its agent, serYant and employees and defendant used and accepted said gravel in the furtherance of constructing said road in compliance with its contract with said oil companies with full knowledge of all agreements and covenants existing between the parties.
“VI. That said additional 709½ cubic yards of gravel delivered to defendant, its agent, servant and employees by plaintiff as aforesaid, was for the exclusive use and benefit of defendant in the furtherance of its contract with said oil companies and that defendant received value therefor, and used, accepted and enjoyed the benefits therefrom and by reason thereof has become bound and liable to pay plaintiff the reasonable market value thereof.
“VII. That said 709½ cubic yards of gravel had a reasonable market, value of $1.25 per cubic yard and that said price is the usual and customary charge for the kind of gravel furnished defendant and that the same was reasonably worth the sum of $1.25 per cubic yard.
“VIII. That after the delivery of said 709½ cubic yards of gravel by plaintiff on said road and the acceptance of same by-defendant, plaintiff presented its claim to defendant’s auditor and commissioner’s court as required by law and that although repeated demands have been made by plaintiff, upon defendant to pay the same defendant has failed and refused to do so, to plaintiff’s damages in the sum of $886.-25.
“Wherefore, premises considered, plaintiff prays the court that the defendant be cited to appear and answer herein and that upon final trial hereof, it have judgment for its debt in the sum of $886.25 for costs of court, for all other relief, both special and general at law and in equity, to which it may show itself justly entitled, etc.”

Opinion.

Since, on the allegations of the petition, the gravel in controversy was sold and delivered by appellant and accepted by appellee on contract without competitive bids, the contract was unauthorized by law. City of San Antonio v. French, 80 Tex. 575, 16 S.W. 440, 26 Am.St.Rep. 763; Sluder v. City of San Antonio, Tex.Com.App., 2 S.W.2d 841. But these authorities also sustain the proposition that appellee, on the allegations of the petition, was liable to appellant for the reasonable value of the benefits received by it from its appropriation of appellant’s gravel in the construction of its road. Appellee does not controvert that proposition. We quote from its brief:

“If it could be proved that the County received and retained any benefit from such gravel being dumped on the county road (which is denied by answer of the County), then the appellant might recover the reasonable value of the benefit to the County — provided the appellant had sufficient pleadings under which evidence could be offered to sustain such a judgment.
“That is the whole trouble with appellant’s petition, and is the reason the general demurrer was sustained, to-wit: Because the pleading does not contain any allegation as to the amount of benefit received by the County from the placing of this gravel on its road, and neither does the petition contain any allegation as to the reasonable value of the benefits received by the county from such unauthorized contract.”

On the allegations of the petition, under the rule of general intend-ments, appellant received benefits in the construction of its road from the appropriation of the 5,066 yards of gravel at the rate of 75 cents per cubic yard; that, because the road was constructed under appellant’s orders, under contract to pay 75 cents per cubic yard for the gravel, and the road was accepted by appellee as in compliance with its contract. Gulf Refining Co. v. Bonin, Tex.Civ.App., 242 S.W. 776, syllabi 5 and 6. The petition alleged that it required an additional 709½ cubic yards to complete the road. Under the rule of general intendments, appellee received “benefits” in the use and appropriation of this additional gravel, as in the use and appropriation of the 5,066 cubic yards actually used and actually paid for. True, appellant alleged that this additional gravel was of the market value of $1.25 per cubic yard. However, notwithstanding this allegation, appellee’s “benefits” were limited to the sum of 75 cents per cubic yard. To recover beyond that sum, it was necessary for appellant to allege attendant circumstances increasing the value of the benefits received by appellee; the petition contained no such allegation.

It is clear to us that appellant’s petition contained the essential elements of a cause of action for benefits received, good as against the general demurrer. If appellee desired a more particular pleading, the defects should have been pointed out by special exceptions. 33 Tex.Jur. 571, Pleading, Paragraph 134.

Judgment of the lower court reversed and cause remanded.


author: SMITH, Chief Justice.

text:
    LOPEZ v. GARCIA et al.
    Nos. 13935, 13944.
    Court of Civil Appeals of Texas. San Antonio.
    April 10, 1940.
    Rehearing Denied May 8, 1940.
    Robt. A. Soné and S. D. Hopkins, both of Corpus Christi, for plaintiff in error.
    H. F. Montgomery and George C. Gaines, Jr., both of Houston, Neel & King, of Corpus Christi, and Perkins & Floyd, of Alice, for defendants in error.
   SMITH, Chief Justice.

On February 12, 1938, judgment was rendered in the District Court of Duval County against plaintiff, Juan Lopez, in favor of defendants, Francisco Lopez Garcia and others.

In due time, on August 5, 1938, Lopez filed his petition for writ of error, together with affidavit in lieu of error bond, and defendants timely filed their contest of the affidavit.

No formal action was taken upon said affidavit or contest thereof, but on January 9, 1940, defendants filed an instrument in the case stating that they “wish to withdraw their contest of the pauper’s oath heretofore filed in this cause and wish to waive service upon the application for writ of error filed herein” and thereupon formally waived such service. It appears that plaintiff had no actual notice of the filing of this instrument, and that the trial court took no action thereon, even if cognizant of the filing.

Thereafter, on March 20, 1940, defendants filed in this Court their motion to affirm on certificate in due form accompanied by partial transcript of the proceedings below, and, four days later, on March 24th, plaintiff filed his motion for sixty days’ additional time over that allowed by statute for filing the record on appeal. The question presented is, then, Sh'all defendants’ motion to affirm on certificate be denied and plaintiff’s motion for additional time be granted; or, vice versa?

Under the facts the filing of defendants’ contest of plaintiff’s affidavit had the effect of suspending plaintiff’s right to appeal without bond until the contest was disposed of, by an order denying it, or by its withdrawal or dismissal, or by waiver. Here it was neither tried nor denied, nor does it appear to have been formally dismissed, nor was the request for withdrawal formally acted upon below, and plaintiff seems to question the sufficiency of the adjudication of the matter of the right of appeal without bond, as well as the sufficiency of the waiver of citation in error by defendants. But, as all parties have nevertheless proceeded upon the assumption ‘ that the filing of defendants’ request for withdrawal of their contest and waiver of citation had the effect of perfecting the writ, this Court must either adopt that assumption, or dismiss the writ, since it ought to be obvious that if the writ of error was not perfected by that act it was not perfected at all, and we have no jurisdiction. In aid of the right of appeal we hold that the writ of error was perfected on January 9, 1940, when defendants filed their request for withdrawal of their contest of the pauper’s affidavit, which amounted to a waiver thereof, and their formal waiver of citation in error.

When plaintiff filed his petition for writ of error and affidavit in lieu of bond, on August 5, 1938, his counsel, a resident of a nearby county, wrote the clerk of the trial court requesting him to issue citations to the numerous defendants in error and forward to the sheriffs of the various counties of defendants’ residence for service, and also that he furnish counsel with the address of the official court reporter, and prepare transcript of the record. The clerk ignored this communication and plaintiff took no further notice of his case during the ensuing nine months or until May 5, 1939, when his counsel again wrote the clerk asking for information of the status of the proceeding and for transcript on perfection of the appeal. The clerk disregarded this communication, as before, and plaintiff again settled back into a state of apparent indifference to his case, until ousted therefrom apparently by notice of defendants’ motion for affirmance on certificate, filed on March 20, 1940. Thereupon, on March 24, 1940, plaintiff filed his motion for enlargement of the time allowed him by law in which to file the record in this Court.

We are of the opinion that plaintiff has shown no diligence in preserving or prosecuting his appeal, or good cause for failing to present his record in this court within the time prescribed by law. The judgment of which he seeks to complain was rendered on February 12, 1938. He delayed filing his petition for writ of error until just before the expiration of the six months allowed by law therefor, which was legal diligence of course, but of the slow motion variety. He timely filed his affidavit in lieu of bond, but there his diligence ceased, absolutely. Except to write a perfunctory letter to the clerk then, and a still more perfunctory one nine months later, plaintiff took no notice of his appeal or of his rights thereunder until confronted with notice of defendants’ motion to affirm on certificate, whereupon, on the very last day of the seventy-five days allowed him in which to show good cause existing during the first sixty days of that period, he filed his motion for additional time. It has been more than two years since the judgment was rendered in this cause, and we hold that under the facts stated plaintiff is in no position to invoke judicial discretion in aid of further delay in the prosecution of the attempted appeal.

Plaintiff’s motion for additional time will be overruled, and defendants’ motion to affirm on certificate, granted.

On Motion for Rehearing.

We deem it proper to state that neither of the attorneys representing plaintiff in error in this proceeding was of counsel for him in the trial court.

Plaintiff in error’s motion for rehearing will be overruled.