author: HARPER, C. J. HARPER, C. J.

text:
    MORRIS v. BROWN et al.
    (No. 387.)

    (Court of Civil Appeals of Texas. El Paso.
    Jan. 21, 1915.
    On Rehearing, Feb. 18, 1915.)
    1. Pleading <@=5182 — Admissions.
    Untraversed allegations in an answer denying that the relation of attorney and client existed as alleged by the petition are not admitted, as it is unnecessary to traverse the allegations of the answer.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 387, 388; Dec. Dig. <@=182.]
    2. Attorney and ' Client <@=>63 — Contracts —Agency.
    Under a contract whereby an attorney was to clear the title of a tract of land, B. was to pay the costs, and the owner was to convey a two-thirds interest in the land to the other two, the attorney was the agent of the other two parties, and anything done by the attorney or by others employed by him would inure to the benefit of the other two.
    [Ed. Note. — For other cases, see Attorney and Client, Cent. Dig. §§ 85, 87; Dec. Dig. <@=>63.]

      3. ATTORNEY AND CLIENT <@=>63 — CREATION of Relation — Contracts.
    Where G. was under contract to clear the title to a tract of land in consideration of B. paying the costs and the owner deeding’ a two-third interest to the other two if successful, M., forming a law partnership with G. during the pendency of a suit in which it was attempted to clear the title, becomes an attorney for all the parties to the contract by participating in the suit with a promise for a portion of the land and prosecuting an appeal with knowledge of the contract, since B.’s act in paying costs amounted to a consideration for the legal services rendered.
    [Ed. Note. — Eor other cases, see Attorney and Client, Cent. Dig. §§ 85, 87; Dec. Dig. <@=>63.]
    4. Attorney and Client <@=>125 — Confidential Relation — Purchase oe Property by Attorney.
    Where M., a law partner of G., who was under contract to clear title to a tract of land in consideration of B. paying the costs and the owner deeding a two-third interest to the other two if successful, became an attorney for the parties to the contract by participating in a pending suit, he could not after the unsuccessful termination of that suit start another suit against K., who claimed a portion of the tract adversely, and then buy K.’s interest and dismiss the suit so as to preclude the rights of B., but he held the title to such tract in trust.
    [Ed. Note. — For other cases, see Attorney and Client, Cent. Dig. §§ 250-263; Dec. Dig. <§=> 125.]
    5. Novation <@=>1 — Substitution of Debtor ¿-Contract of Attorney.
    Where M., a law partner of G., who was under contract to clear the title to land in consideration of B. paying the costs and the owner deeding a two-thirds interest to the other two, became an attorney for the parties, and while such bought the interest of the owner subject to the contract a novation did not take place, and hence a contention that B. had only the right to recompense M. for his outlay and claim tiñe, and if he did not he ratified the purchase, was not tenable, as the purchase simply made M. a joint owner in the land from a common source of title if title could be cleared.
    [Ed. Note. — For other cases, see Novation, Cent. Dig. § 1; Dec. Dig. <@=>1.]
    6. Contracts <@=>261 — Clearing Title — Right to Cancel.
    Where M., a law partner'of G., who was under contract to clear title to land in consideration of B. paying the costs and the owner deeding a two-thirds interest to the other two, became an attorney for the parties by participating in a pending suit with knowledge of the contract and thereafter bought the interest of the owner, that G. refused to further prosecute the case would not give M. the right to cancel the contract as to B., so as to preclude rights of B. in a purchase of an adverse interest by M., as M. was a party to the contract by purchase from the owner and also by reason of his employment as attorney.
    [Ed. Note. — For other cases, see Contracts, Cent. Dig. §§ 1174-1180; Dec. Dig. «=>261.]
    7. Attorney and Client <@=>125 — Purchase of Proferty Adversely.
    Where an attorney purchases property adversely to his client, he cannot contend as against the client that his vendor’s title was void.
    [Ed. Note. — For other cases, see Attorney and Client, Cent. Dig. §§ 250-263; Dec. Dig. <$=> 125.]
    8. Attorney, and Client <@=>123 — Purchase of Property — Contract.
    Where M., a law partner of G., who was under contract to clear title to land in consideration of B. paying the costs and the owner deeding a two-thirds intex-est to the other two, became an attc ney for the parties to the contract, he could purchase the interest of the owner subject to the contract.
    [Ed. Note. — For other cases, see Attorney and Client, Cent. Dig. §§ 239-245, 248, 249; Dee. Dig. <@=>123.]
    9. Appeal and Error <@=>1040 — Harmless Error — Exception to Pleading.
    The failure to sustain an exception to a paragraph of the petition is not reversible error, where the paragraph is not material to plaintiff’s recovery.
    [Ed. Note. — For' other cases, see Appeal and Error, Cent. Dig. §§ 4089-4105; Dec. Dig. <S=> 1040.]
    10. Appeal and Error <@=>1062 — Harmless Error — Special Questions to Jury.
    The submission of a special question on an immaterial issue is harmless error.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4212-4218; Dec. Dig. <@=3 1062.]
    Appeal from District Court, El Paso County; A. M. Walthall, Judge.
    Suit by Frank Wells Brown against Frank G. Morris, Sam B. Gillett, and P. E. Kern. From a judgment for plaintiff, ' defendant Morris appeals.
    Affirmed.
    Frank G. Morris and T. A. Falvey, both of El Paso, for appellant. C. L. Galloway, 5. P. Weisiger, Turney & Burges, Bates McFarland, and S. B. Gillett, all of El Paso, for appellee.

       Writ o£ error pending in Supreme Court.

   HARPER, C. J.

This suit was brought by Frank Wells Brown against Frank G. Morris, Sam B. Gillett, and P. M. Kern, for certain land, was submitted to a jury upon special issues, and resulted in a judgment for Brown for an undivided one-third interest in 60 acres, from which this appeal is taken.

The jury made the following findings of fact:

“(1) Did defendant S. B. Gillett intervene in cause No. 5705, on September 23, 1905,'as the attorney of Pat Breen, himself, and plaintiff Brown, in the name of Pat Breen, but for the purpose of establishing the Breen claim of title, for their joint use and benefit? Answer: Yes.
“(2) Had plaintiff Brown, prior to the dismissal of the suit of Morris v. Kern, No. 8916, and the execution by Kern of the deed dated March 4, 1912, repudiated the contract of April 6, 1905, and declined to do those things imposed upon the said Brown by the terms of said contract? Answer: No.
“(3) Did the relation of attorney and client exist between defendant F. G. Morris and plaintiff Frank Wells Brown during the time said Morris was acting as attorney in the intervention in the case of C. O. Coffin v. C. R. More-head et al., No. 5705? Answer: Yes.
“(4) Did plaintiff Frank Wells Brown comply with the terms of the contract between himself, S. B. Gillett, and Pat Breen of date April 6, 1905? Answer: Yes.
“(5) Did defendant Frank G. Morris represent all the parties interested in the Breen claim of title while he was prosecuting that claim of title in cause No. 6705, under his contract with Sam B. Gillett? Answer: Yes.
“(6) Did plaintiff Brown acquiesce in and ratify the action of Sam B. Gillett in employing said Morris as attorney to prosecute the Breen claim in cause No. 5705? Answer: Yes.
“(7) Did plaintiff Frank Wells Brown and defendant F. G. Morris understand that the employment of said Morris by Sam B. Gillett was for the use and benefit of all parties claiming under the Breen title, and that said Morris was representing all of the claimants under the Breen claim of title in said' litigation? Answer : Yes.
“(8) Does the deed from P. E. Kern to F. G. Morris, dated March 4, 1912, state the true and full consideration for the conveyance of the 60 acres of land therein described? Answer: No.
“(9) What was the consideration for the execution of the deed dated March 4, 1912, from P. E. Kern to F. G. Morris? Answer: The dismissal of the suit and settlement of the Breen claim and for legal services rendered and to be rendered.
“(10) Did F. G. Morris accept the 60 acres of land described in the deed from P. E. Kern to him in the settlement of the entire Breen claim? Answer': Yes.
“(11) Did Kern convey the 60 acres described in said deed dated March 4, 1912, to Morris for the purpose and with the understanding and agreement with Morris that they were settling the entire Breen claim? Answer: Yes.
“(12) Did the defendant Morris release or convey to Kern verbally or in writing any right or title of plaintiff Brown, if any he had, or right to aennire any interest in the Breen title or in Brown’s claim under the Breen title? Answer: Yes.
“(13) Did defendant Morris obtain any information from plaintiff Brown about the Breen title or claim which defendant Morris had not already acquired from the title papers which were in possession of Gillett after. Gillett employed Morris and before Morris talked with Brown about the title ? Answer: No.
“(14) Did Gillett and Morris in good faith contemplate that the probable course of prudent procedure to perfect the Breen title after Breen’s case had been lost in the Supreme Court required that further proceedings should be taken in the United States court and that any suit brought in the state court. should be removed to the United States court for trial at the time defendant Morris wrote-the letter read in evidence before the court and jury, suggesting such probable course of procedure and demanding to know of Brown whether or not he would perform his contract to pay all court costs that Gillett might incur in perfecting the title? Answer : Yes.
“(15) Plaintiff Brown filed an amended petition on April 23, 1913, in his former suit wherein he still claimed the Breen title and not under Morris’ claim under the Kern title. Did plaintiff Brown, before April 23, 1913, learn from P. E. Kern substantially all that Brown ever learned as to what lie alleges to be the true consideration of the deed from Kern to Morris ? Answer: No.
“(16) Did the plaintiff Brown on April 23, 1913, have full information as to the consideration of the Kern deed to Morris, as he alleges the consideration to be in his amended petition filed in this cause? Answer: No.
“(17) Were the legal services rendered by defendant Morris the whole or part of the consideration moving Kern to make the deed to Morris for 60 acres? Answer: Part.
“(18) Did the defendant Morris release or convey to Kern verbally or in writing any right or title of plaintiff Brown, if any he had, to acquire any interest in the Breen title, or in Brown’s claim under the Breen title? Answer: Yes.”

Additional statement of facts: On the 6th day of April, 1905, Sam B. Gillett and Frank Wells Brown entered into an agreement with Pat Breen, as applicable to this opinion, substantially as follows:

. “* * * "Whereas Pat Breen in 1885 purchased a 160-acre interest in survey No. 270, El Paso county, Texas, from M. J. McKelligon: * * * Now, therefore, said Gillett agrees to perfect title thereto, * * * and said Brown agrees to pay all court costs that may be incurred in that behalf, and for and in consideration of said legal services and the defraying of said • court expenses, said Breen hereby agrees to execute and deliver to said Gillett and Brown a good and sufficient deed to an undivided two-thirds interest in and to said land as soon as he shall be convinced that the title to said land is in him, etc.”

In September, thereafter, Gillett, as attorney for Breen, intervened in a suit pending, entitled O. R. Morehead v. O. O. Coffin et ah, Gillett and Brown not being made parties to the suit, and asserted the Breen title.to 160 acres of survey No. 270. Thereafter, during the pendency of said suit, Gil-lett and Morris, appellant, formed a law partnership, and Gillett agreed to allow Morris one-fifth of any land recovered as his part under the Breen contract. Morris, with full knowledge of the provisions of the Breen-Gillett-Brown contract, took active charge of the prosecution of the suit, assisted in the trial‘in the lower court, and participated in the preparation and prosecution ■ of the appeal to the Supreme Court, which resulted in judgment against the Breen title. Brown refused to allow Morris any fee. The reason given was that Gillett was obligated to do the legal work and he to pay costs. Brown employed Edwards & Edwards to assist in the trial of the ease.

While the case of Morehead v. Coffin et al. was pending in the Supreme Court, Morris purchased Breen’s title for $500. The deed to Morris contained the stipulation that:

“It was the intention to convey all the grantor’s interest in the lands, subject only to the contract for a part of said land heretofore made with Gillett and Brown, which Morris understands and agrees to respect.”

After the Supreme Court of Texas decided’ against the Breen title, Morris proposed to Gillett and Brown that the ease could again be filed, first in the state court, and then transferred to the United States court. Brown refused to pay any costs in the United States court, but still expressed a willingness to pay any costs incurred in a further prosecution of a case to establish the Breen title in the state courts. Morris filed suit in the state courts and Brown intervened in the suit. While the latter suit was pending before the district court of El Paso county, Morris took a deed from P. E. Kern for 60 acres, reciting as consideration $10 and the further consideration of legal services rendered by said Morris in perfecting title to MeKelligon’s survey (being land in controversy in tbis suit) and bis agreement to assist in tbe prosecution in all courts necessary in the ease of Kern v. C. O. Coffin. Tbe suit last filed by Morris was filed against Kern, who held tbe adverse title to tbe Breen claim, and, upon tbe execution of tbe deed from Kern to Morris, tbis suit was dismissed.

Tbe appellant’s brief contains many assignments of error, followed, in some instances, by numerous propositions. To answer each one separately would require a very lengthy opinion, so we will confine ourselves to a discussion of those containing what is believed to be tbe propositions of law upon which tbe rights of tbe parties to tbis appeal rests; and, as to such, we are of tbe opinion:

The first and second assignments charge that tbe evidence does not support tbe findings of the jury, especially in connection with the facts admitted by the pleadings. There is no admission in the pleadings that the relation of attorney and client existed or did not exist between Morris and Gillett. Brown’s pleadings are sufficient to charge that the relationship existed, and the fact that Morris’ answer alleged the facts to be different, and his allegations not denied, do not constitute admissions. It is not necessary tb traverse tbe allegations in defendant’s answer, because they were merely the converse of the plaintiff’s allegations. G. H. & S. A. Ry. Co. v. Pennington, 166 S. W. 464.

Tbe contract between Breen, Gillett, and Brown, quoted above, made Gillett tbe agent of both Brown and Breen, and constituted the only authority to Gillett or any one else to prosecute suits, or to employ counsel to prosecute or assist in the prosecution of a suit, or suits, to establish the Breen claim of title to tbe land in controversy, and anything Gillett did pursuant to tbe contract and in tbe interest thereof must necessarily be done for tbe joint interest of all three of the parties thereto, and whatever might be accomplished by Gillett in person or by others employed by him inured to the benefit of all three; because the subject-matter of the contract is so inseparably connected that an attorney could not represent one without, at the same time, representing all. Anything recovered must be apportioned between the three as provided in the contract.

Brown’s act of securing all, and, from time to time, paying parts of the costs incurred, amounted to the payment to the attorneys acting in tbe prosecution of tbe suits a good consideration for their services, and without which no one could lawfully act, because Brown’s part was necessary to be performed — else, the contract never could have become operative.

Morris accepted the employment with full knowledge of tbis contract, so, when he pleads and admits by his testimony that he accepted the employment, it was tantamount to an admission that he contracted to represent all the parties interested, whether party to the suit or not.

Morris, by his position of attorney in the case, acquired knowledge of all the facts upon which Brown hoped to secure a one-third interest in 160 acres of land; likewise, of the facts which might defeat a recovery, with full knowledge of Brown’s interest,. as a party to the contract under which the attorney alone was authorized to act. Under such state of facts, it must be held that be had entered into such confidential and contractual relations with Brown as to constitute the legal relation of attorney and client. Tbe evidence is amply sufficient to sustain all tbe findings of tbe jury to that effect.

Tbe third, fourth, fifth, sixth, twelfth, nineteenth, and twentieth assignments charge that the evidence is insufficient to support certain findings of the jury and are overruled for the reason given next above.

The relationship of attorney and client having existed, Morris could not at any time purchase an interest in the land in controversy, in opposition to the title of his client, without it being held in trust for tbe benefit of bis client. Sanford Baker v. Humphrey, 101 U. S. 494, 25 D. Ed. 1065; Henry v. Rorman, 25 Pa. 354, 64 Am. Dec. 703; Douglass v. B. Blount, 95 Tex. 369, 67 S. W. 484, 58 L. R. A. 699.

Appellant urges tbe proposition that even though he be held to have occupied the position of attorney to Brown, when the purchase from Breen took place, be (Brown) only bad tbe right to elect to take bis interest by paying Morris tbe money he was out in purchasing the Breen title, not having elected to do so, but having elected not to take advantage of such purchase by affirming Morris’ status as acquired under such contract, and by proceeding and claiming only under tbe Breen contract to himself, such election was final, and the acceptance of Morris in the place of Breen constituted a novation, because thereby Breen was released from tbe former contract, and Morris substituted in tbe place of Breen as tbe client of Gillett and Brown.

The answer is that tbe original contract between Breen, Gillett, and Brown gave Brown an interest in tbe land by its performance, which Morris could not buy from Breen. Although tbe deed purported to convey it, by conveying tbe whole of tbe land subject to Gillett and Brown’s right to perfect title, etc., so it was not a purchase of an adverse title in any sense, and Brown could not be divested of any interest in tbe land by Breen’s sale to Morris; so it follows that this purchase by Morris did not place him in any different contractual relationship with Gillett and Brown, but simply placed him (Morris) in a position of a joint owner in the land, from a common source, if title could be cleared, and there was nothing done by the parties which constituted a novation of contract.

And there is nothing in appellant’s contention that the pleadings and evidence show that Brown refused to further carry out his part of the contract and that he thereby forfeited his interest to Morris, because the pleadings are not susceptible of such construction, and the facts sustain the finding of the jury that Brown did not refuse to perform.

But appellant urges that Gillett refused to further prosecute the cause, and, the contract between Breen, Gillett, and Brown being entire, neither could perfect any right under it without performance by each; and there being no pleading in this case that Gillette was willing to perform, but the proof being that_Gillett refused to further prosecute the case, the contract was breached, and Brown’s remedy is against Gillett for damages, and no right to an interest in the land was perfected, and all right to perfect was lost by cancellation declared by Morris.

If it could be held that Morris never occupied the position of attorney to Brown, this would be a good proposition of law; but he (Morris), having been mistaken as to the legal effect of accepting the employment from Gillett, overlooks the fact that he, upon purchase of the Breen interest, occupied a dual position — a party to the contract by purchase and by reason of his employment as attorney. He occupied Gillett’s position, as well as Breen’s. If he occupied Breen’s pdsition alone, he could have canceled the contract for refusal upon the part of either of the other parties to perform his obligations under it; but he has so bound himself, by accepting employment and undertaking the prosecution of the object of the contract, that he cannot occupy .the inconsistent position of refusing to further pursue the prosecution as attorney for Brown, and thereupon claim the contract is for that reason breached.

The fact that the Breen title was void because the original purchaser and the land commissioner did not comply with all the provisions of the law, and that therefore, as contended by Morris, Brown could not recover in any suit, is immaterial, for Morris cannot deny his client’s title and his trusteeship for their benefit. Henyan v. Trevino, 137 S. W. 458.

The seventh assignment charges that the court erred in overruling an exception to the following paragraph of plaintiff’s pleading:

“That during the pendency of said litigation and while said F. G. Morris was acting or pretending to act in the confidential capacity as attorney for and representing or pretending to represent this plaintiff and said Patrick Breen, therein, and while occupying said confidential relation of attorney for this plaintiff and without his knowledge and consent, he, the said IP. G. Morris, acting in utmost bad faith to plaintiff, in violation of law and derogation of plaintiff’s rights, and in utter disregard of his own oath as an attorney, and his duties and obligations to plaintiff, the said F. G. Morris wrongfully procured the said Patrick Breen, on, to wit, the 28th day of June, 1910, to make and deliver to him, the said F. G. Morris, a deed of conveyance of all of said Breen’s then interest in said land, which deed is of record in Book 156 on page 478 thereof, the Deed Records of El Paso County, Texas, to which record reference is here made for a fuller description thereof; and which deed the defendant F. G. Morris has on the 23d day of May, 1913, filed among the papers of this cause.”

The proposition is that the disqualification of an attorney applies to the purchase of an adverse title, and that the Breen title was not adverse. The court should have sustained the exception, because Morris could buy the Breen title as was done subject to the rights of Brown and Gillett; but the failure to do so is not reversible error for the reason that the pleading was not material to plaintiff’s right to recover his interest. The adverse title acquired in this case is the Kern title to 60 acres of the McKelligon survey, claimed by Breen and about which the contract in evidence was executed.

The eighth assignment is that:

“A new trial should be granted because the answer of the jury to question No. 2, when taken in connection with question No. 14, and the undenied allegations as to the passing of the letters of September, 1911, between defendant Morris and plaintiff Brown and Gillett, show as a matter of law that plaintiff Brown did give unequivocal notice to defendant Morris that he would not perform his contract, for which reason Morris canceled said contract, the jury in its answer to question 14 removed all claim of excuse for plaintiff’s refusal to perform his contract.”

The question submitted by special issue No. 14 is the good faith of Morris and Gillett in proposing the procedure in the United States court to perfect the Breen title, which, under the facts of this record, was an immaterial issue. Brown agreed, as shown by the letters in evidence, that he would pay all costs incurred in the state courts, and the cause never got any further, and it is very doubtful if the cause could have been transferred to the United States court, and the facts show conclusively that the Kern deed was made to Morris in consideration of the dismissal of the cause pending in the state court, the costs of which Brown was obligated to pay, and had not repudiated his obligation. However, this question is disposed of by the observations under the first and second assignments, wherein it is held that Morris was at no time in a position to rescind his contractual obligations as an attorney with Brown and Gillett.

The eleventh assignment reads:

“The court erred in giving to the jury the eleventh paragraph of the general charge of the court over the objection of the defendant Morris, because it assumes that Morris was attorney for the plaintiff Brown at the time be instituted suit in his own name against P. E. Kern and others, and at the time he made the transactions with P. E. Kezm, which resulted in Kern executing to Morris a deed tp the land in controversy, whereas, the uncontroverted evidence . shows that Morris’ employment, as attorney, was only for the purpose of the former Breen suit against Morehead and others, and that the termination of the suit of Morehead v. Coffin et al. terminated the relations of attorney and client which Morris may have had with any one by reason of his connection with that case.”

The answer is that, under the pleadings and facts of this case, the court was justified in assuming that Morris was the attorney of Brown in submitting the facts as grouped.

We find no error in overruling appellant’s demurrers complained of in thirteenth, fourteenth, and fifteenth assignments. They are therefore overruled.

The sixteenth is that the court erred in submitting to the jury the question of what the consideration was for the deed from Kern to Morris. The answer is that it did not matter what the consideration was; the only question is: Did Morris obtain an adverse title to Brown’s interest?

And the seventeenth and eighteenth, being in effect the same, are overruled for the same reason.

Appellant further urges that, by reason of the fact that the deed from Kern shows that he only got his interest in the land claimed by Breen and in no wise settled the interest of Brown and Gillett, he thereby took title free from any trust relationship existing between himself and Brown, and that Brow^i could still prosecute his (Breen’s) claim for title if he so desired. We are not concerned with what Brown might do towards recovering an interest in the balance of the 160 acres, but what are his rights in relation to the 60 acres?

Whatever Morris got in taking up an adverse title to Brown’s claim, he took to the extent of Brown’s interest, in trust for Brown, and there is no necessity to draw any fine distinctions here to define whether the trust relationship so existing was constructive, resulting, or express.

In effect, he asserts that he can acquire Breen’s title, also the right to prosecute suits in perfecting or .clearing it up, then dismiss the suit, the record title being in him, no other person being therefore in a position to assert title, to then claim that he in no wise has compromised,or settled plaintiff Brown’s right to further pursue his remedy to clear up the title to the entire 160 aci-es. The transaction is not to be sustained on any such grounds. The acquiring of an interest in the thing in controversy in opposition to the title of his client is forbidden, because, as the decisions above cited say, “it places him under the temptation to be unfaithful to his trust.” Such a purchase inures therefore to the benefit of his client as his interest may appear. Brown had a one-third undivided interest in any land the title to which was cleared by any person party to the contract. Where the confidence has relation to the title of the land, the fidelity of the counsel must necessarily follow the title of his client, wherever it goes. In this case, Brown’s interest is one-third of the land acquired from Kern, because the Kern title was the adverse title to clear up which the suits were prosecuted by Morris for Breen, Gillett, and Brown, under a contract, the conditions of which Morris was thoroughly cognizant, and by which he was bound.

The assignments are overruled, and the cause affirmed.

WARTHALL, J„ did not sit in this case.

On Rehearing.

HARPER, C. J.

In original opinion, at beginning, it is stated that there was a “verdict for Brown for an undivided one-third interest in 60 acres.” There was simply a finding by the jury on special issues, and the use of the word “verdict” was inadvertent. We should have used “judgment.” Correction has been made in the original opinion.

A careful consideration of the motion confirms the view that, under the peculiar facts of this case, it was properly found by the jury that the relationship of attorney and client existed between Morris and Brown, and judgment was properly rendered upon the findings of the jury in the latter’s favor. The motion for rehearing is overruled.

In response to request of appellant, additional findings of fact are denied. The original opinion is so amended as to make the special issues submitted by the trial court and the answers thereto, and the additional findings of fact contained in the opinion, the findings of fact in this case, which we consider sufficient.
      <@=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      ¿fcsjEor other cases s.ee same topic and KEY-NUMBER In all ICey-Numbered Digests and Indexes


source: Caselaw Access Project

author: RICE, J.

license: Public Domain

text:
    WRIGHT et al. v. GRAND LODGE K. P., Colored, et al.
    (No. 5389.)
    (Court of Civil Appeals of Texas. Austin.
    Oct. 28, 1914.
    On Motion for Rehearing, Jan. 13, 1915.)
    1. Insurance ©=>769 — Fraternal Insurance — Beneficiaries — Relatives by Blood Within the Eourth Degree.
    Under Vernon’s Sayles’ Aim. Civ. St. 1914, art. 4832, permitting blood relatives within the fourth degree to be designated as beneficiaries of fraternal insurance certificates, nephews and nieces may be designated as beneficiaries, falling within that degree.
    [Ed. Note. — For other eases, see Insurance, Cent. Dig. §§ 1932, 1937,-1938; Dec. Dig. ©=> 769.]
    2. Insurance ©=>771 — Fraternal Insurance — Beneficiaries — “Legal Representative.”
    The constitution of a fraternal insurance order provided that the beneficiaries should be the wife, children, legal representatives, or persons dependent on the member for support, and that a husband separated from his wife, but not divorced, could designate some one or more persons other than his wife as beneficiaries, provided the beneficiaries designated to the exclusion of his wife should be his children, or, if none, he could designate as beneficiaries any of the classes above named. Held that, while the term “legal representatives” usually is understood to refer to executors or administrators, it is elastic, and includes the nieces and nephews of a member who is separated from his wife.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1935, 1937; Dec. Dig. <@=771.
    For other definitions, see Words and Phrases, First and Second Series, Legal Representative.]
    3. Interpleader <@=35 — Attorney’s Fee — Right to.
    Where the proceeds of an insurance certificate are claimed by several, and it is doubtful who is entitled, the insurer, who paid the money into court and required the parties to interplead, is entitled to reimbursement for attorney’s fees so expended.
    [Ed. Note. — For other cases, see Interpleader, Cent. Dig. § 70; Dec. Dig. <@=35.]
    4. INTERPLEADER <@=35 — PROCEEDINGS — AT- ' torney’s Fee.
    Where a fraternal insurer, sued in the county court, paid the money into court, and prayed that the court determine to whom it belonged, and its attorney thereafter filed a bill in the circuit court to require the claimants to interplead, the insurer was not entitled to an allowance of attorney’s fees for the filing of the bill in the circuit court, where it was dismissed for want of jurisdiction.
    [Ed. Note. — For other cases, see Interpleader, Cent. Dig. § 76; Dec. Dig. <©=35.]
    On Motion for Rehearing.
    5. Appeal and Ebbob <©=3173 — Presentation op Grounds op Review in Coubt Below— Necessity.
    Where defendant insurer admitted its liability and paid the amount of the certificate into court, it could not on appeal for the first time question its liability, and assert that the beneficiary was not entitled to the full amount paid into court.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1079-1089, 1091-1093, 1095-1098, 1101-1120; Dec. Dig. <©=173. ]
    6. Appeal and Ebbob <©=1116 — Review—Determination.
    Where counsel for defendant insurer consented to the appellate court’s determination of their counsel fees, the court will allow a fee, though there be no evidence before it, instead of remanding the cause.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4411, 4412; Dec. Dig. <©= 1116.]
    Appeal from McLennan County Court; Geo. N. Denton, Judge.
    Action by John Robertson, as next friend of George Wright and others, against the Grand Lodge of Knights of Pythias, Colored, which impleaded Georgia Johnson Matthews and another. From a judgment for the latter, plaintiff appeals,
    Reversed and rendered.
    Taylor & Forrester and J. A. Stanford, all of Waco, for appellant. J. D. Williamson, of Waco, for appellee Grand Lodge K. P. Neff & Taylor, of Waco, for appellee Georgia Johnson.
   RICE, J.

This suit was brought by appellant, John Robertson, as next friend for the minors, Geo. Wright, Blanch Johnson, and G. Lucile Anderson, against the Grand Lodge of Knights of Pythias, Colored, to recover the sum of $500, to which it is claimed said minors were entitled by reason of their being the beneficiaries named in a certificate of insurance issued by it to Andrew Matthews, their uncle, now deceased, who had paid all dues thereon, and complied with all the rules and regulations of said order. It was alleged that Georgia Johnson Matthews and W. Erskine Williams were claiming some interest in said policy, for which reason they were also made defendants. The Grand Lodge answered, admitting that it owed the $500, which it tendered into court, asking the court to determine to whom it belonged, and praying for its costs and $100 attorney’s fees. The defendant Georgia Johnson Matthews answered that she was the surviving wife of the said Andrew Matthews, deceased, and that she was entitled, by reason thereof, to recover said $500, asserting that appellants, who were the nieces and nephew of her husband, could not, under the constitution of said order, be beneficiaries under said policy. To which appellants replied that at the time said certificate was issued, and at the time of the death of Andrew Matthews, he and his wife, Georgia Johnson Matthews, were separated, and had been so separated and living apart for about seven years, and that under the constitution of said order they were entitled to be named as beneficiaries under said policy. W. Erskine Williams, while having accepted service, failed to appear and file any pleadings, and the case was dismissed as to him. There was a trial before the court without a jury, resulting in a judgment in favor of Georgia Johnson Matthews, from which appellants have prosecuted this appeal.

The principal question necessary to be determined is whether or not appellants were entitled to be named as beneficiaries in said policy, and this is dependent upon the construction to be given to the constitution of said Grqnd Lodge. The facts show that appellants are the nieces and nephew of the deceased, Andrew Matthews, .to whom the certificate was issued, and they were not dependent upon him for support, neither was he aged nor infirm, nor was he himself dependent upon any person or institution for support, and no one was dependent upon him for support. At the date the policy was issued, to wit, November 27, 1910, and at the time of his death, he and his wife, Georgia Johnson Matthews, were separated and living apart, and had been for about seven years. They had no children, and the said Andrew Matthews, deceased, left no child or children by any one.

The following parts of the constitution of the Grand Lodge were introduced in evidence. In the last clause of section 1, chapter 1, stating the object of the order, is the following:

“To create a fund from which, on reasonable and satisfactory proof of the death of a member who has complied with all the requirements of the order,.there shall be paid to the person or persons named in the policy of membership (which is here termed) as beneficiary or beneficiaries. The beneficiary or beneficiaries shall be the wife, children, the legal representatives or persons dependent upon the member for support. The name or names of the beneficiary or beneficiaries shall be written in every policy issued.”

Section 4:

“A husband separated from his wife, but not divorced, may designate some one or more persons other than the wife his beneficiary, provided the beneficiary so designated to the exclusion of the wife shall be his child or children, if such be. If there be no child or children, and he be aged or infirm, he may designate as his beneficiary the person or persons upon whom he depends for support; should he not be aged or infirm he will only be permitted to name as beneficiaries, other than his wife, the beneficiaries named in section 1 of this article; and in the order therein named to the persons dependent upon him for support.”

Our statute (article 4832, Vernon's Say les’ Tex. Civ. Stat.) upon the subject of fraternal benefit societies does not forbid nieces or nephews to be named as beneficiaries, but, on the contrary, permits, among others, relatives by blood within the fourth degree to be designated as such, which would include them. So if, under the facts, they fall within the class named in the constitution of the order, as above outlined we think they are clearly entitled to be named as beneficiaries in said policy.

Is there, then, anything in the constitution that excludes them from being named as beneficiaries? The first section thereof names four distinct classes from whom the insured may select his beneficiary, and further specifies that the “name or names of the beneficiary or beneficiaries shall be written in every policy issued.” As his wife was separated from him and not divorced at the time the policy was issued to Andrew Matthews, he had the legal right to designate some one or more persons other than his said wife his beneficiaries therein, provided, of course, that such beneficiary or beneficiaries so designated to the exclusion of his wife should be his child or children, if there should be such; in the event there was none, which is the case here, and he was not aged or infirm, and dependent upon no one for support, and no one was dependent upon him, then he was permitted to name as his beneficiaries other than his wife some person in the class named in section 1 above outlined, and in the order therein n?imed. This being true, if his nieces and nephews could be regarded as legal representatives, then he had the right to name them as his beneficiaries in said policy. “As a general rule, when a benefit certificate issues from a benefit society the designation on the face of the certificate as to who shall be the beneficiary is conclusive on that subject.” 29 Cyc. 121.

But it is not necessary to determine whether this rule should be applied in this case, for while it is true that the phrase “legal representatives” is ordinarily construed to refer to executors or administrators, yet it is said in 29 Cyc. 122, 123, that:

“In determining’ the meaning and scope of the words ‘children’ and ‘issue,’ ‘heirs’ and ‘devisees,’ and ‘legal representatives’ and ‘estate,’ as those terms are used in the member’s designation of beneficiaries, or in statutes, or the charter or laws of the society, for the purpose of determining beneficiaries, the courts adopt a liberal rule of construction, so as to effectuate the intent of the parties and the benevolent objects of the society.”

Applying this rule in the instant ease, we conclude that the term “legal representatives” is sufficiently comprehensive to embrace the nieces and nephews of the deceased. We do not think that the wife, under the facts, was entitled to the fund. She was living separate and apart from the husband, which gave him the privilege of selecting some other beneficiary under the constitution of the order, and he saw fit to exercise it, and we think that the persons named were eligible, and that the court below erred in holding that they were not.

It is also contended on the part of appellants that the award of $100 as attorney’s fees is excessive. While we think it is true, under the authority of Nixon v. N. Y. Life Ins. Co., 100 Tex. 250, 98 S. W. 380, 99 S. W. 403, that the lodge, where there is a contest over and it is doubtful who is entitled to the fund, has the right to employ counsel to represent it, pay the same into court, and pray that the court determine to whom it should belong, for which it is entitled to attorney’s fees and costs, still we think, in the instant case, that the fee allowed is excessive. It is true that counsel states that the fee charged is reasonable; but this embraces services for filing a suit in the district court to require the contending parties to interplead, which was dismissed for want of jurisdiction. This, we think, should not be considered in determining the fee allowed the lodge. This’ expense was unnecessary, since the district court had no jurisdiction; but we think the allowance for attorney’s fees should be limited to services performed in the present case. As there was no evidence as to what amount would be reasonable for such service in the county court, we conclude that the judgment of the trial court should be reversed, with instructions to render judgment in favor of appellants against said Grand Lodge for $500, the amount of said policy, less attorney’s fees and court costs, and that the court proceed to hear evidence and determine what would be such reasonable attorney’s fee, and also-direct that, as between appellants and Georgia Johnson Matthews the court costs so-awarded the Grand Lodge be adjudged against her in favor of appellants; and the court is directed to render judgment accordingly.

Reversed, with instructions to render.

On Motion for Rehearing.

The lodge, in its motion for rehearing, claims that it is only liable in the sum of $300, stating that it was in error in admitting liability in the sum of $500, alleging that the policy sued on shows that it was issued November 27, 1910, and the pleadings show that Andrew Matthews, to whom it was issued, died November 11, 1911, and that the constitution of said Lodge provides that all policies issued on and after July 1, 1910, shall entitle the beneficiary to the minimum amount of $300 within the first 12 months of membership, based upon the date of issuance of policy; that in the case of death after 24 months from the date thereof the.beneficiary shall be entitled to $400; and that in case of death of insured after 36 months from the date of policy the beneficiary shall be entitled to $500. Wherefore it prays that judgment be reformed, and entered against it for the sum of $300 only, and that this court adjudge the amount due it as attorney’s fees.

This contention was not made in the court below, nor in this court until now; but, on the contrary, its liability to the extent of $500 was expressly admitted, both in the trial court and in the brief of its counsel, and that amount was paid into the registry of the court, for which reason we think the question cannot now be raised.

In addition to this, it is evident from the affidavits attached to appellants’ resistance to this motion, as well as the pleadings in the case, that the original certificate, which seems to have been lost, was issued in 1905, and therefore the supposed copy thereof used in evidence by agreement must have been incorrect as to its date. Besides this, there is no pleading which would authorize such a change, even if there was sufficient evidence to support the allegations of the motion in this respect.

Since counsel for appellees concur in the request that we fix the amount of attorney’s fees to which the lodge may be entitled, we have concluded to do so, and now here fix the same at the sum of $50.

The motion, therefore, asking that the judgment be reduced in amount is overruled, but is granted as to fixing the amount of attorney’s fees. It follows, from what we have said, that the judgment heretofore entered, reversing the case, with instructions to the trial court, should be, and the same is now hereby, set aside, and said judgment of the trial court is now here reversed and rendered in favor of appellants against said lodge for the sum of $500, the amount of said policy, less $50, attorney’s fees, and court costs, and direct that as between appellants and Georgia Johnson Matthews the costs so awarded the Grand Lodge are adjudged against her in favor of appellants.

Reversed and rendered.
      ©=AFor other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      <@=:>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HIGGINS, J.

text:
    GALVESTON, H. & S. A. RY. CO. v. PATTERSON.
    (No. 390.)
    (Court of Civil Appeals of Texas. El Paso.
    Feb. 4, 1915.)
    1. Caeeiees @=>219 — Carriage of Live Stock — Connecting Caeeiees.
    Where by express contract the initial carrier contracts to deliver at the end of its line and to be bound only on its own line, the connecting carrier is not liable, under Rev. St. 1911, art. 731, for injuries to cattle shipped occurring on the line of the initial carrier.
    [Ed. Note. — For other cases, see Carriers, Cent. Dig. §§ 950, 951; Dec. Dig. @=>219.]
    2. Caeeiees @=>228 — Live Stock — Connecting Carriers — Presumptions.
    In an action against a connecting carrier, evidence held sufficient to rebut the. presumption that the cattle were received by defendant from the initial carrier in good condition.
    [Ed. Note. — For other cases, see Carriers, Cent.. Dig. §§ 957-960; Dec. Dig. @=>228.]
    3. Appeal and Eeeoe @=>1103 — Deteemination of Cause — Reveesal.
    Where the verdict is clearly contrary to the evidence, it is the duty of the appellate court to reverse and remand.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3938-3943; Dee. Dig. @= 1103.]
    4. Evidence @=>474 — Maeket Value — Cattle Shipped.
    To establish the market value at the place of delivery of cattle injured in shipment, it must be shown that like cattle had been bought and sold there in sufficient quantity and often enough to establish a market, and a witness having no knowledge of any sale of such cattle as were injured at the place of delivery within a year prior to shipment is not competent to testify as to market value.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 2196-2219; Dee. Dig. @=>474.]
    5. Caeeiees @=229 — Evidence @=>113 — Mae-ket Value — Cattle.
    Where the market value at the place of delivery of an animal injured in shipment is not shown, the intrinsic value of the animal is the measure of damages, and may be shown by the price paid therefor, but otherwise if market value is shown.
    [Ed. Note. — For other cases, see Carriers Cent. Dig. §§ 930, 963, 964; Dec. Dig. @=>229-, Evidence, Cent. Dig. §§ 259-296; Dec. Dig. @=* 113.]
    6. Appeal and Eeeoe @=>263 — Exceptions-Insteuctions.
    Assignments of error to the giving and refusal of charges cannot be reviewed, in the absence of exception, as required by Acts 1913, c. 59 (Vernon’s Sayles’ Ann. Civ. St. 1914, §§ 1954, 1970, 1971, 1973, 1974, 1984a. 2061).
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1516-1523, 1525-1532; Dec. Dig. @=>263.]
    Appeal from Terrell County Court; J. B. Ross, Judge.
    Action by G. R. Patterson against the Galveston, Harrisburg & San Antonio Railway Company. Prom a judgment for plaintiff, defendant appeals.
    Reversed and remanded.
    W. B. Teagarden, of San Antonio, Boggess & Smith, of Del Rio, and Baker, Botts, Parker & Garwood, of Houston, for appellant. G. J. Henskaw and A. T. Folsom, both of Sanderson, for appellee.
   Findings of Fact.

HIGGINS, J.

Patterson brought this suit against the railway company to recover the value of a Hereford bull which it is alleged died from injuries received while being transported by the company. The animal was shipped from Beeville, Tex., over the line of the San Antonio & Aransas Pass Railway Company, to San Antonio, and there delivered to appellant, over whose line it was transported to Sanderson, Tex.

The contract of carriage issued by the initial carrier provided that it would transport the animal to San Antonio, the end of its line on the route over which it was waybilled for further transportation. The contract contained this further provision:

“It is further stipulated and agreed between the parties hereto that, as the live stock mentioned herein is to be transported over the road or roads of other railway companies and in other cars than those of this company, and as the party of the first part is only to transport said stock to the aforesaid station named as the end of its line on the route over which said stock is to be shipped, the party of the first part is only to be bound for the transportation of said stock to said station; it being understood and agreed by both parties hereto that the only purpose of making this contract is that the party of the first part shall transport said stock to said station, and protect the through rate of freight named herein for the benefit of the party of the second part, and the party of the first part shall in no manner be responsible for any loss or injuries occurring to said stock after the same has left the line of the San Antonio & Aransas Pass Railway Company, nor be responsible for the carriage beyond.”

The evidence shows the animal was one of a car load of 30, and several of the number were in an injured condition when delivered to appellant at San Antonio. The testimony of the conductors handling the shipment from San Antonio to Sanderson shows a rapid run, without any switching, rough handling, or anything done to injure the animals. It is shown that at different points one of the bulls was down, and at Langtry the bull in question was down and being trampled by the others. He was then transferred to another car. At Del Rio, a division point between San Antonio and Langtry, the conductor noticed the bull down and objected to taking the shipment out with him in that condition, but was ordered to proceed.

Conclusions of Law.

The contract of carriage was not fox-through transportation. It does not fall within the provisions of article 731, R. S., and the connecting carrier was not liable for injuries to the animal oce-urring upon the line of the initial carriel-. Railway Co. v. Jones, 104 Tex. 92, 134 S. W. 328.

The evidence discloses a proper handling and transportation while in appellant’s possession, and plainly rebuts the presumption of negligence which ordinarily prevails against the delivering carrier when the shipment is shown to have been delivered to the initial carrier in good condition and reaches the end of its journey in a damaged state.

It is manifest that the verdict in this ease is wrong and clearly contrary to the evidence. In such case it is our duty to reverse •and remand. Railway Co. v. Schmidt, 61 Tex. 282; Zapp v. Michaelis, 58 Tex. 275; Short v. Kelly, 62 S. W. 944; Kohlberg v. Awbrey & Semple, 167 S. W. 829. The assignment raising this question is sustained.

Error is assigned to the admission of the testimony of Patterson as to the market value of the animal at Sanderson at the time of death. Objection was made that he had failed to show a market value at San-derson for Hereford bulls,. such as this. Upon his direct examination, he testified he was familiar with the market price at San-derson of such bulls at the time in question, but his cross-examination disclosed he had no knowledge whatever of any sales of such animals having been made at Sanderson within a year prior to the arrival of his shipment. Nor is this fact established by other evidence. In order to establish a market value at the place of delivery, it was necessary to show that like cattle had been bought and sold there in sufficient quantity and often enough to establish a market value. The evidence does not measure up to this standard. Railway Co. v. Jackson, 99 Tex. 343, 89 S. W. 968; Railway Co. v. Crowder, 152 S. W. 184; Railway Co. v. Mulkey, 159 S. W. 113. The assignment indicated is sustained, as well as those which assert that the verdict in this respect is without competent evidence to support it.

Error is assigned to the exclusion of testimony offered to show the price paid by plaintiff for the animal. ■ For the guidance of the court respecting this question upon retrial, it may be said that, if a market value for such animals at Sanderson at the time of its death be shown, that, of course, would be the proper measure of damage, and such evidence would not be admissible. Railway Co. v. Dilworth, 95 Tex. 327, 67 S. W. 88. On the other hand, in the absence of such market value, its intrinsic value would be the proper measure, and in such case evidence of the price paid therefor would be admissible as a circumstance to be considered in determining such value. Railway Co. v. Garrett, 96 S. W. 53; Railway Co. v. Dishman, 41 Tex. Civ. App. 250, 91 S. W. 828; Railway Co. v. Crowder, supra; McCullough v. Burdett, 142 S. W. 612.

The answer of the witness Staton to subdivision D of cross-interrogatory No. 3 was improperly admitted. Railway Co. v. Bigham, 138 S. W. 432; Railway Co. v. Roberts, 101 Tex. 418, 108 S. W. 808.

Various assignments complain oí the giving and refusal of charges. No exceptions in regard thereto were taken, as required by Acts 1913, c. 59, p. 113 (Vernon’s Sayles’ Ann. Civ. St. 1914, §§ 1954, 1970, 1971, 1973, 1974, 1984a, 2061). For this reason they are overruled.

Reversed and remanded.
      <§r»For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    OGLESBY v. DURR.
    (No. 5420.)

    (Court of Civil Appeals of Texas. Austin.
    Dec. 16, 1914.
    Rehearing Denied Jan. 13, 1915.)
    1. Insurance <@=>64r-LiEN — Priority—Deposits oe Insurance Company.
    Under Rev. St. 1911, § 4909, requiring a mutual fire, storm, and lightning insurance company to deposit with the state treasurer certain securities to be held by him in trust for the policy holder, and section 4910, providing that, if any such company shall fail to pay a Judgment against it for more than 60 days after its rendition, the funds on deposit with the treasurer may be garnished, a writ of garnishment cannot be issued against such funds so as to give the plaintiff priority therein over other policy holders after the company depositing the funds has become insolvent and has ceased to be a going concern transacting business in the regular way.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 89; Dec. Dig. <§==>64.]
    2. Insurance <§=>52 — Insurance Companies —Going Concern.
    Such company has ceased to be a going concern after the commissioner of insurance and banking has canceled its permit to do business, though no suit had yet been instituted by the Attorney General to forfeit its charter.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 49, 64, 65; Dec. Dig. <§=>52.]
    3. Insurance <@=>64 — Insolvency—Garnishment of Deposits.
    Rev. St. 1911, § 4910, authorizing garnishment of the funds of an insurance company deposited with the state treasurer, must be construed so as not to render ineffective other sections of the same act, providing that the funds deposited shall be held in trust for the policy holders, and, so construed, authorizes garnishment only when the corporation is a solvent going concern.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 89; Dec. Dig. <@=>64.]
    4. Garnishment <@=>58 — Property Subject— Deposit of Insurance Company.
    In the absence of statutory authority, funds deposited with a state treasurer by an insurance company, in trust for the policy holders, are in custodia legis and not subject to garnishment.
    [Ed. Note. — For other cases, see Garnishment, Cent. Dig. § 113; Dec. Dig. <@=>58.]
    5. Garnishment <@==>32 — Property Subject-Trust Funds.
    A trust fund is not ordinarily the subject of garnishment.
    [Ed. Note. — For other cases, see Garnishment, Cent. Dig. § 53; Dec. Dig. <@=>32.]
    Error from District Court, McLennan County; Tom L. McCullough, Judge.
    Intervention by George Durr in an action by J. P. Clevinger against the Mecca Fire Insurance Company. From, a judgment granting to the claim of the intervener a priority to certain funds in the hands of the receiver, John S. Oglesby, the receiver brings error.'
    Reversed, and judgment rendered for receiver.
    Spell & Sanford and W. W. Ñaman, all of Waco, for plaintiff in error. R. L. Allen, of Waco, and Cunningham & Oliver, of Abilene, for defendant in error.

       Writ of error pending in Supreme Court.

   RICE, J.

Geo. Durr, defendant in error, in a suit filed August 8, 1912, in the county court of Taylor county, against the Mecca Fire Insurance Company of Waco, a mutual fire, storm, and lightning insurance company, incorporated and transacting business under the laws of this state, by virtue of chapter 10, tit. 71, of the Revised Statutes of 1911, recovered judgment against said company on the 22d day of October, 1912, for the sum of $508.12, with 6 per cent, interest thereon and all costs of suit. Said company had theretofore, in compliance with said law, deposited with the state treasurer money and securities amounting to the sum of $6,-000. Before the rendition of said judgment, to wit, October 1, 1912, said Durr caused a writ of garnishment to be issued and served upon said state treasurer, and thereafter, on the 26th of October, caused another writ of garnishment to be issued and served upon said officer, both of which issued out of the county court of Taylor county. Said treasurer having, prior to the 30th of December, 1912, answered both of said writs, admitting an indebtedness to said company, and stating that he had effects belonging to it in his hands exceeding the amount of said judgment, interest, and costs, judgment was <on said day rendered against said treasurer in favor of said Durr in said garnishment cases for the sum of $508.12, with interest and costs of suit, providing, however, that the payment of one of said judgments would operate as a satisfaction of the other. On the 26th of October, 1912, J. P. Clevinger recovered judgment against said insurance company in the district court of McLennan county and applied for a receiver against it, and John S. Oglesby, plaintiff in error, was on the same day by said court appointed receiver, and empowered and directed to take charge of all the assets and funds of said company for the benefit of its creditors. He thereafter gave bond and qualified on the 2d day of November, 1912, and entered upon the discharge of his duties; but at the time said original suit was filed in Taylor county, as well as when said writs of garnishment were issued and served, the claims of numerous policy holders- of said company, other than said Durr, had matured, were due, owing, and unpaid, but none of them had been put in judgment, nor had writs of garnishment been served on the state treasurer, other than as above stated; but said insurance company did not have assets, including the deposit with said treasurer, at any of said times sufficient to pay the claims which had matured on its policies; and on the 24th of September, 1912, the commissioner of banking and insurance of this state had canceled its permit to do business; but otherwise said company was a going concern, engaged in business under the powers conferred by its charter, until the appointment of said receiver. On the 14th of December, 1912, said district court entered' an order requiring all persons having claims against said company to file the same as in-terveners in said cause before the 13th of January, 1913, which time was afterwards extended by said company until the 19th of February; and on said December 14th said court likewise entered an order directing said state treasurer to surrender to said receiver all funds deposited with him by said company — of all of which facts said Durr was notified on the 24th of December, 1912. Thereafter, on the 11th of January, 1913, he filed his intervention in said cause, reciting the facts with reference to the several judgments obtained by him, and asked that his claims be given priority in payment over the claims of the creditors not having sued out writs of garnishment. Thereupon said Og-lesby, receiver, and plaintiff in error herein, filed an answer to said intervention, alleging that the fund in the hands of the state treasurer had been deposited by said company in accordance with and under the authority of the laws of this state, in trust for its policy holders, and further alleged that said treasurer was holding said funds and refused to deliver them to him on account of said garnishments, praying that said intervention be set down for hearing, and that the court determine the claim of priority asserted by said intervener; and on the 12th of December, 1913, said intervention came on to be heard when said court rendered judgment allowing and approving the claim of said Durr as a full, valid, and prior claim against said insurance company, and against the funds and securities in the hands of the state treasurer and receiver, with a prior lien thereon, and decreed that said claim was prior to the claims of other intervening creditors for the full amount thereof, including principal, interest, and costs, aggregating the sum of $556.47, and directed said Oglesby, as receiver, to pay over 'to the clerk of the county court of Taylor county said sum, with the direction that said claim be paid in full before the distribution of the funds or money belonging to said company among the other creditors, from which judgment this writ of error was sued out; and this ruling is assigned as error by the plaintiff in error, on the ground that the funds and securities deposited by the Mecca Fire Insurance Company with the state treasurer were for the benefit of all policy holders, and that, where a trust is thus established for the equal benefit of Several persons,. ho one of them will be entitled to priority to the exclusion or detriment of the others; and this is the principal question involved in this appeal, and, so far as we are advised, has never been passed upon by the courts of this state.

The statute under consideration has been twice construed: First, in the case of Robbins v. Midkiff, 46 Tex. Civ. App. 272, 102 S. W. 430, wherein it was held that said act applied, not only to an insurance company organized under it, but embraced and included all mutual companies theretofore organized, but which were acting thereunder, and therefore held that, in a proper case, their effects deposited by such companies with the state treasurer were subject to garnishment The case of Graham v. Sparks, State Treasurer, et al., 56 Tex. Civ. App. 483, 121 S. W. 597, cited by plaintiff in error, merely holds that the funds of sueh insurance companies deposited with the state treasurer were not the subject of garnishment after a receiver had been appointed and its charter forfeited. In the- instant case there was no forfeiture of charter, nor had the company been placed in the hands of a receiver prior to the issuance and service of the writs of garnishment, for which reason it is contended, on the part of defendant in error, that its funds in the hands of the state treasurer were subject to the writs of garnishment sued out. The determination of this question, then, involves the consideration and interpretation of certain articles of chapter 10, tit. 71, of the Revised Statutes of 1911, article 4905 of which provides for the incorporation of such companies, and designates the laws by which they shall be governed. Article 4906 treats of the application for permits, to be issued by the commissioner of insurance and banking ; article 4907 of the conditions for obtaining charter, etc.; and article 4908 relates to the organization and the qualification of officers and directors, while articles 4909, 4910, 4911, and 4913 treat of how the funds shall be invested, the procedure in case of failure to pay loss, and the disposition of such.funds, and provide for the cancellation and forfeiture of their charters. Article 4909 provides that, upon receipt of the license referred to in the preceding articles, said mutual company shall issue policies at once on the application submitted to the commissioner of insurance and banking for inspection, and collect the amount due on the notes representing the first assessment on the policies issued. Sixty per cent, of the amount so collected (it being not less than $6,000) shall be invested by the duly authorized officers of said mutual company in first mortgage bonds on lands in this state, at not exceeding 60 per cent, of the value of said lands, or in bonds of this state, or any county in this state, or in the bonds of any city, town, or school district or corporation, provided said bonds have been approved by the Attorney General, and deposit said securities with the treasurer of this state within 90 days after the issuance of charter m trust for the potion holders fen• saoh mutual companyf etc., The latter .part of article 4910 provides that-should any company incorporated under the provisions of this chapter, within 60 days after the rendition of any judgment against such company, fail to pay same upon request of the party obtaining the judgment, the commissioner of insurance and banking shall furnish to him a list of the securities held in trust by the state treasurer 'for such company, and all such securities shall be subject to garnishment. While article 4913 provides that an examination shall annually, and at •such other, times as he deems proper, be made by the commissioner of insurance and banking into the affairs of said company and of the securities held in trust by the state treasurer, and if it shall appear that the amount of securities on deposit is less than the amount required herein to be on deposit, he shall at once notify the officers of said company; and unless the amount of the deficiency is placed on deposit with the state treasurer in money or securities, as therein provided, within 60 days, the permit issued by him to said company shall be canceled;- and lie shall report the same to the Attorney General, who shall at once bring suit to forfeit the charter of such company; and such company shall not be authorized to levy or collect assessments on premiums after the institution of such suit, etc.

We think that said fund, under the facts disclosed by the record, was not, at the time the writs of garnishment issued, the subject of garnishment as the property of said Mecca Fire Insurance Company, under this statute, for two reasons: First, because, in our opinion, at the time of the issuance and service of such writs, said company was insolvent and no longer a going concern. It is unquestionably true, under the authorities in this state, that the effects of an insolvent corporation are the subject of garnishment while it is a going concern, transacting its business in the usual and ordinary way, but are no longer subject to such garnishment when it becomes insolvent and ceases to do business in the usual and ordinary way, at which time its funds become a trust fund for the benefit of all of its creditors. See Orr & Lindsley Shoe Co. v. Thompson, 89 Tex. 501, 35 S. W. 473.

The facts, we think, clearly show that such company was insolvent at the time the state treasurer was garnished. Was it a going concern at that time, in the ordinary acceptation of this term? We think not. It appears that its permit had, before such writs were served, been canceled by the commissioner of insurance and banking; and while it is true that its charter had not been forfeited by the Attorney General, nor suit brought for such purpose, still, it could not, after such cancellation, do business in the regular and usual way. It might be inferred, however, from the last article above referred to, that notwithstanding such cancellation, until suit was filed by the Attorney General, said insurance company might levy and collect assessments; but this does not mean, we think, that it could transact other business. The power granted under the statute might be exercised merely for the preservation of its old business. If it was insolvent and not conducting business in the ordinary way, as we think the facts clearly show, then such fund was not ordinarily the subject of garnishment, but became a trust fund for the benefit of all of its creditors alike, and no one of them could obtain priority by garnishment over the others.

Nor does the statute authorizing the funds of such company in the hands of the state treasurer to be garnished alter the case, because we think this article must be construed in connection with other sections of the statute, which provide that such funds deposited with the treasurer are to be held by him in trust for the policy holders of the company; it being a familiar principle that, in the interpretation of statutes, they shall be given such construction as will uphold all of their provisions, and carry out the evident intention of the Legislature in the light of surrounding circumstances and the objects intended to be accomplished. Rosenberg v. Shaper, 51 Tex. 140; State v. Harter, 188 Mo. 516, 87 S. W. 941. Surely, if said treasurer was holding such fund in trust for the benefit of all the policy holders of the company; as declared in the statute-, it could not be contemplated that one by garnishment, where the company was insolvent, eould obtain priority over the rest, because to do so would defeat the very purpose and object of such deposit; on the contrary, we think that the clause providing for garnishment was intended to be exercised only while the company was solvent, transacting its business in the usual and ordinary way. This construction permits a creditor, whose judgment has not been paid within 60 days after its rendition, to enforce collection thereof by garnishment proceedings, where the company is solvent, and at the same time sustains all of the other provisions of the statute, whereas the interpretation contended for by defendant in error would defeat the beneficent object for which such companies are incorporated, to wit, the equal protection of their policy holders.

Without the aid of this statute, however, this fund could not have been garnished at all, for the reason that such funds in the hands of the state treasurer are in custodia legis, and not the subject of garnishment. See volume 2, Shinn on Garnishment, § 505; Waples on Attachment and Garnishment, 218, 225 ; 20 Cyc. 988G; Id. 990, where it is said:

“Likewise, on grounds of public policy, the government of the United States and officers and agents thereof, and the government of the individual states and their officers and agents, are exempt from process of garnishment.”

See, also, 24 Cent. Dig. tit. Garnishment, § 36.; Rollo v. Andes Insurance Co., 23 Grat. (Va.) 509, 14 Am. Rep. 147.

Besides, this fund is' expressly declared to be a trust fund by said statute, and therefore was not ordinarily the subject of garnishment. See 20 Cyc. 993.

Believing that the court erred in rendering judgment in favor of the defendant in error, and since the facts are fully developed, it becomes our duty to reverse said judgment and here render the same in behalf of plaintiff in error, which is accordingly done.

Reversed and rendered.
      ig^jFor other caf.es see same topic and KEY-NUMBER in all Ivey-Numbered Digests and Indexes


author: JENKINS, J.

text:
    W. C. BELCHER LAND MORTGAGE CO. v. TAYLOR et al.
    (No. 5405.)

    (Court of Civil Appeals of Texas. Austin.
    Nov. 11, 1914.
    Rehearing Denied Feb. 20, 1915.)
    1. Limitation on Actions <&wkey;167 — Bae on Debt as Bae on Security — Vendob’s Lien.
    Where a lien on land to secure purchase-money notes is only equitable, not expressed in the deed to the land or in the notes, it is barred when such notes are barred by limitation.
    [Ed. Note. — For other cases, see Limitation of Actions, Cent. Dig. §§ 651-653; Dec. Dig. <&wkey;> 167.].
    2. Subrogation &wkey;>23 — Advances to Discharge Incumbrance.
    Where defendant advanced the owner money to pay the original purchase-money notes, he thereby acquired an equitable lien upon the land which he could assert within any period before the extinction of the lien by limitation running on the debt
    [Ed. Note. — For other cases, see Subrogation, Cent. Dig. §§ 60-66; Dec. Dig. &wkey;23.]
    3. Husband and Wife <s&wkey;273 — Community Pbopeety — Rights op Subvivoe — Mort-gagb to Pay Pub,chase Money.
    Where a husband bought land and executed purchase-money notes therefor, at his death the debt was owed by the community estate, not by his wife personally, and she, as survivor of such estate, could sell or mortgage the property to pay or secure the debt, but upon remarriage her power as survivor ceased.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. §§ 1008-1024; Dec. Dig. <&wkey;> 273.]
    4. Husband and Wipe &wkey;>273 — Community Pbopeety — Rights op Subvivob — Mobt-gage to Pay Purohase-Money Notes — Rights of Children.
    Where a purchaser gave notes for land and died, his widow, as survivor of the community, was tenant in common of the land with her -minor children, and had a right to take measures to preserve the property, but, as against the children, she had no power to mortgage the land for a sum greater than the original debt.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. §§ 100S-1024; Dec. Dig. <&wkey;> 273.]
    5. Mobtgages <&wkey;372 — Sale Under a Void Deed op Trust — Effect.
    A trustee’s deed was void and conveyed no title when the sale was under a deed of trust which the mortgagor had no authority to execute, as against her minor children, to .secure payment of money borrowed to discharge the original purchase-money notes given for the land by her husband.
    [Ed. Note. — For other cases, see Mortgages, Cent. Dig. §§ 1102, 1103, 1105-1117; Dec. Dig. &wkey;>372.]
    6.Husband and Wipe <&wkey;154 — Mortgage by Wife — Personal Liability — Effect op Extensions op Payment.
    Where a married woman mortgaged land jointly with her husband, joining in the execution of the note, she did not thereby become personally liable for the debt, and if, after her husband’s death, she secured extensions of time for payment so long as to bar the husband’s debt by limitation, such extensions did not affect her personal liability for the debt, and so had no vigor to render valid, as to her or her minor children, the sale of the mortgaged land.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. § 604; Dec. Dig. &wkey;>154.]
    7.Mortgages <&wkey;350 — Place op Sale — Deed op Trust — Statute.
    Under statute of 1889 requiring that sales under deeds of trust be made in the county where the land is situated unless otherwise stipulated, a new promise by. a widow to pay notes secured by joint deed of trust of herself and husband did not authorize the sale, except as directed by statute, although the deed of trust contained such an authorization.
    [Ed. Note. — For other cases, see Mortgages, Cent. Dig. § 1048; Dec. Dig. <&wkey;>350.]
    8.Acknowledgment &wkey;>20 — Who May Take —Married Woman — Deed op Trust — Interest op Officer.
    Where a married woman executed a mortgage upon her homestead jointly with her husband, and acknowledged the same before a no-' tary, who was financially interested in the consummation of the transaction by way of commission from the lender, the mortgage is void; knowledge of the facts on the part of the lender being imputed to him, as a matter of law, from the knowledge of his agent.
    [Ed. Note. — For other cases, see Acknowledgment, Cent. Dig. §§ 104^-111; Dec. Dig. 20.].
    9.Acknowledgment <&wkey;62 — Interested Notary — Sufficiency of Evidence.
    Evidence held to show that an agent had knowledge that the acknowledgment of a married woman’s deed was taken before an officer financially interested in the transaction.
    [Ed. Note. — For other eases, see Acknowledgment, Cent. Dig. §§ 345-347; Deo. Dig. <&wkey;62.]
    Error from District Court, Bastrop County; Ed R. Sinks, Judge.
    Action by Mahala Taylor and others against the W. C. Belcher Land Mortgage Company. Judgment for plaintiffs, and defendant brings error.
    Affirmed.
    Wm. J. Berne, of Ft. Worth, for plaintiff in error. Fowler & Fowler, of Bastrop, for defendants in error.

       writ of error pending in Supreme Court.

   Findings of Fact.

JENKINS, J.

1. Charles H. Glover purchased the land in controversy in 1882 from John Wilkes, and executed therefor his several promissory notes, two of which were for the sum of $300 each, due respectively on or before October 15, 1887 and 1888, with 19 per cent, interest thereon after maturity, and provided that they might be liquidated in cotton at 10 cents per pound, basis good ordinary.

2. Glover, with his wife, one of the defendants in error, moved upon the land at the time he purchased the same, and resided thereon as his homestead until his death; and his wife continued to reside thereon as her homestead up to the time of the trial of this case.

3. No lien was retained upon the land in either the deed to Glover, or in either of the notes.

4. Glover died intestate in March, 1884, leaving his widow and six minor children, aged from one to eleven years. In November, 1886, his widow married H. M. Taylor.

5. On November 26, 1887, the first of the two notes mentioned being due, and payment being demanded, and neither Mahala Taylor, former wife of Glovef, nor her children, who were minors, having the money with which to pay same, and having no property other than their said homestead, Mahala Taylor and hex-husband, H. M. Taylor, applied to plaintiff in error for money with which to pay off said loan. Said application was granted, and plaintiff in error advanced $585, which was used as follows: $500 was paid to John Wilkes, the owner and holder of said notes, $60 to S. M. Smith and $25 to R. P. Jones, as commission for obtaining said loan.

6. Wilkes transferred said notes to plaintiff in error. This was not intended as a sale of said notes to plaintiff in error, but to sub-rogate it to the rights of Wilkes. At the same time Mahala Taylor and her husband wrote upon said notes their acknowledgments that the notes were a just debt, and promised to pay the same at the expiration of five years, in accordance with their bond and notes of that day; and they executed their note, called a bond, of even date therewith, in the sum of $600, payable to plaintiff in error, with interest at the rate of 7 per cent, per annum, payable semiannually, and also 10 interest notes, payable semiannually, the first due in 6 months, for $5, the remainder for $9 each, due semiannually thereafter. They also, at the same time, executed a deed of trust on said land to Horace H. Oobb, trustee, to secure said notes, reciting therein that it was to secure plaintiff in error in the payment of a just and subsisting original purchase-money debt. It provided that, in case of default, the land might be sold at the courthouse door in Travis county, upon-notice posted for 10 days on the courthouse door of said county, and that, in the event of the failure or refusal .of the trustee to act, such sale should be made by the acting sheriff of Travis county, as substitute trustee.

7. On September 22, 1893, H. M. Taylor having died, and Mahala Taylor being then a widow, she obtained from plaintiff in error a five-year extension of said $600 note, and on October 10, 1898, and again on October 1, 1903, obtained from plaintiff in error a like extension.

10. The last extension having expired, and said $600. note being due and unpaid, and said Cobb having refused to further act as trustee, the sheriff of Travis county, at the request of plaintiff in error, advertised and sold said land, as provided in the deed of trust, at which sale the plaintiff in error became the purchaser on April 4, 1911, for the sum of $875, and thereafter, on April 13, 1911, said sheriff executed and delivered to plaintiff in error a deed to said land.

11. Plaintiff in error was the only bidder at the sale, and bought the land for about one-third of its value.

12. In the loan transaction S. M. Smith acted as broker and agent for both plaintiff in error and defendants in error, and also for Wilkes, the owner of the notes. R. P. Jones acted as agent for defendants in error and Wilkes.

Opinion.

This suit was brought by defendants in error in the form of trespass to try title, and also to cancel the deed made by the sheriff of Travis county, substitute trustee, as' being a cloud on the title of defendants in error. Though the deed of trust be void, plaintiff in error, having advanced the money with which the Wilkes notes were paid, was subrogated to his rights, which were to establish his equitable lien by judgment and subject the land to sale. Wilkes’ lien being only an equitable one, it would have been barred when his notes were barred by limitation. Vinson v. Whitfield, 133 S. W. 1096; Windom v. Howard, 26 S. W. 176; Pitschki v. Anderson, 49 Tex. 1. “It is a settled rule in this state that when a vendor’s lien is not expressed in a deed to land, and the note has become barred, the lien cannot be enforced against the land.” Johnson v. Dyer, 19 Tex. Civ. App. 602, 47 S. W. 731. This is but an application of the common-law rule that a lien is an incident of the debt, and will stand or fall with it. A vendor’s lien reserved in a deed rests upon a different proposition. The right of plaintiff in error to enforce the equitable lien against the land might have been asserted by cross-action, had it filed the same in time, hut it did not assert such right until more than four years after the expiration of the last extension. Such being the state of the pleading, the only issue in this ease was as to the validity of the deed made by the sheriff of Travis county, as substitute trustee.

The trial court held that the deed made by the sheriff was void, for the reason that the renewals, while keeping alive the lien (if any) in the original deed of trust, did not keep alive the power to sell in Travis county as against the statute of 1889 requiring such sale to be made in the county where the land is situated. The view which we take as to the invalidity of the deed of trust renders it unnecessary for us to pass upon this point.

The debt evidenced by the Wilkes .notes was not owing by either the wife or children of Glover. It was a debt owing by the community estate of Glover, deceased, and his surviving wife; and, as survivor of said estate, she may have sold or mortgaged property to pay or secure such debt, but, upon her subsequent marriage with Taylor, her rights as survivor ceased. Hasseldenz v. Dofflemeyer, 45 S. W. 830.

As tenant in common with her children, she had the right to extend the debt in order to preserve the property upon which it was an implied lien, neither she nor her children being able to pay the note that had matured, and such extension being beneficial both to her and her children. Under such circumstances a party is authorized to act for his or her eotenants, even though they be minors. Under- such circumstances she may have had authority t'o mortgage the land for the debt for which the lien existed, but certainly. not for any additional amount, so as to be binding upon the minors. This debt at the time the mortgage was executed was the then value of the Wilkes notes. The evidence does not indicate with certainty what this value was. The notes were payable on or before maturity, and might be discharged in cotton at 10 cents per pound. No testimony appears in the record as to the value of cotton at that time; but, as Wilkes sold the notes for $500, it may fairly be presumed that their value was that sum. That plaintiff in error did not consider the notes worth their face value is shown by the testimony of S. M. Smith, a witness for plaintiff in error, who assisted in negotiating the notes, and who testified that plaintiff in error would not buy them, for the reason that they were payable on or. before maturity, and might be paid in cotton. One of the notes was not due until 12 months after the mortgage was executed, and, as it bore no interest until maturity, it certainly was worth at least the legal interest (6 per cent.) less than its face value, which would reduce its value to $2S2, making the total indebtedness against the land at that time $582. The mortgage was for $600, with interest, including the interest notes, at 10 per cent, per annum, payable semiannually. Including Smith’s and Jones’ commissions, plaintiff in error advanced $585; and this under the agreement that the debt should be .made payable in money, secured by a mortgage, and the interest increased to 10 per cent., payable semiannually, including the $300 note not due, and which bore no interest until maturity.

The land being the homestead of H. M. Taylor and wife at the time the-mortgage was given, they could not mortgage it for an amount in excess of the purchase-money debt, which we have seen may fairly be presumed to have been $500, and certainly not more than $582. The sale was by virtue of the deed of trust, and, as it was given for an amount in excess of that for which the homestead was liable, and in excess of the amount for which the minors’ interest was liable, it was void, and the trustee’s deed conveyed no title. Hillyer v. Westfall, 67 S. W. 1047; Girardeau v. Horkins (on motion for rehearing) 126 S. W. 637; Building Ass’n v. Goforth, 94 Tex. 259, 59 S. W. 873.

Mrs. Taylor, being a married woman, at the time of the execution of the note which the mortgage was given to secure, could not bind herself personally for the debt. It was in default of the payment of this debt that the trustee sold the land. If the extensions obtained by 'Mrs. Taylor after the death of Taylor amounted to no more than extensions of the original promise to pay, then the note executed by her was void at the time of the trustee’s sale. A void indebtedness cannot be extended, for the reason it never existed. A void debt is no debt. If such extensions were new promises to pay, made after she became a feme sole, then they did not authorize the sale in Travis county, by reason of the statute of 1889.

The mortgage executed by Mrs. Taylor was void for another reason. Being a married woman, she could not execute a mortgage upon her separate property, nor upon her homestead, without acknowledging the same before an officer authorized to take her acknowledgment. Jones, the notary before whom the acknowledgment was taken, was interested in the transaction to the extent of $25, which he was to receive in the event such mortgage was given, and without which plaintiff in error would not have advanced the money with which to pay off the Wilkes notes, and which sum he did receive as part of the commission for negotiating the deal. Brown v. Moore, 38 Tex. 648; Rothschild v. Daugher, 85 Tex. 333, 20 S. W. 142, 16 L. R. A. 719, 34 Am St. Rep. 812; Miles v. Kelly, 40 S. W. 602; Sample v. Irwin, 45 Tex. 573.

Smith, who acted in the capacity of a broker, and who inspected the land for plaintiff in error, knew that Jones was to receive $25 commission for assisting in negotiating the deal, and we think that his knowledge was imputable to plaintiff in error. Smith testified, without contradiction, that:

“By contract with Jones, Wilkes was to receive $500 for the notes, and Jones, as his commission, was to receive $25. I, for my commission, was to receive $60, and the Belcher Land Mortgage Oomjpany $15. * * * The company prepared these deeds of trust and bond and coupon notes, and delivered them to me, and I delivered them to Jones. - * * * I examined the above-mentioned land in person, the examination being made to determine the value of the land, and also to see who was living upon it. * * * The report is in my handwriting-. * * * It is immediately under the-head ‘Inspector's Report.’ * * * In said transaction R. P. Jones acted for Wilkes, and also for H. M. Taylor and Mahala Taylor. * * * In 1887, at the time of the aforesaid transaction concerning said land, I had frequently acted as inspector of lands for parties wishing to make loans. * * * The bodies of said instruments (the mortgage and notes), except where printed, are in my handwriting. * * * I did work for the company during October and November, 1887, and had an account with them on their books.”

The $60 was paid Smith by crediting Ms account on the books of plaintiff in error for that amount. $525 was paid by check. Smith was a real estate and loan agent in Austin at the time, where plaintiff in error had its office.

For the reasons stated, we affirm in all things the judgment of the trial court, setting aside and canceling the deed of trust, and decreeing title and right of possession in defendants in error.

Affirmed.
      <gs=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes