author: RICE, J.

text:
    McCORMICK et al. v. CORNELL & WARDLAW et al.
    (No. 5721.)
    (Court of Civil Appeals of Texas. Austin.
    Feb. 21, 1916.)
    1. Corporations <&wkey;309(l), 509(1) — Insolvency- — Prefebenoes—Attachment—-Yailiditv.
    Until a corporation becomes not only insolvent, but has likewise ceased to be a going concern, it has the power to prefer its creditors by executing a mortgage or otherwise; and a diligent creditor of such corporation, although he be a director, can in good faith secure such preference over other creditors by attachment or garnishment.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1366, 1372, 2006, 2009.]
    2. Corporations <&wkey;688 — Insolvency op Foreign Corporations — Preferences—Validity.
    Where a foreign corporation was insolvent and its president knew of such condition and negotiated to prevent creditors from taking steps against it and then assigned his claim against the corporation to certain persons, they could not, 'by attachment, secure a preferential lien upon the corporation property as against other general creditors.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 2661-2663.]
    3. Corporations i&wkey;545(l) — Insolvency — Preferences to Officer — Validity.
    The law should properly hold the creditor who was president and general manager of a corporation to the utmost good faith in attempted collection of his claim, in order to obtain a preference over other creditors.
    Appeal from District Court, Tom Green County; J. W. Timmins, Judge.
    Suit by Cornell & Wardlaw assignees of Charles S. Rees, against the Russell Oil Company wherein Clair McCormick and others, as receivers, intervened. Judgment for plaintiffs, and interveners appeal.
    Reversed, with instructions.
    Boggess '& Smith, of Del Rio, for appellants. Cornell & Wardlaw, of Sonora, for appellees.
   Statement of the Character and Result of Suit.

RICE, J.

As appellees concur in appellants’ statement of the nature and result of the suit, as set forth in their brief, we copy same as follows:

“(1) This suit was originally brought by James Cornell and L. J. Wardlaw, appellees, in the district court of Sutton county, on November 5, 1913, against the Russell Oil Company, a foreign corporation, to recover an indebtedness alleged to be due by such corporation to their assignor, Chas. S. Rees, aggregating $1,053.19 In plaintiffs’ original petition it is alleged that said indebtedness was assigned to plaintiffs October .28, 1913.
“(2) Coincident with the filing of their suit, plaintiffs sued out against the defendant a writ of attachment, directed to Edwards county, which was executed by the sheriff of Edwards county on November 6, 1913, by levying upon certain well drilling machinery and other property located in Edwards county, as the property of the Russell Oil Company, all valued by the sheriff at $1,600.
“(3) Service of notice of plaintiff’s petition, together with a certified copy thereof, was duly had upon the defendant corporation by delivery thereof to its vice president and secretary, respectively, in New York City.
“(4) On March 24, 1914, Clair McCormick, W. L. Holmeg, J. S. Gaughey, Eugene Thompson, S. N. Gaughey, H. W. Lazrine, A. Holmeg, the Sonora Mercantile Company, the Roach-Mc-Lymont Company, and J. S. Gething, as receiver of the Russell Oil Company, under appointment by the district court of Val Verde county (appellants here) under express leave of the court filed in the district court of Sutton county their joint and several petitions of intervention herein.
“(5) In briefest summary, the interveners, except the receiver, set out in their petition of intervention that defendant Russell Oil Company was a foreign corporation; that plaintiffs’ assignor, Chas. S. Rees, was the president oí said company; that the Russell Oil Company was for several months prior to the institution of plaintiff’s suit insolvent, and wholly unable to pay its debts in ordinary course; that said defendant had, several months prior to plaintiffs’ suit, ceased to be a going concern, by reason whereof the assets and property of defendant, located in Texas and elsewhere, had become, prior to plaintiffs’ suit, and were then, a trust fund for the benefit of all the creditors of said defendant; that the interveners, except the receiver, are general and unsecured creditors of the Rus--sell Oil Company.
“(6) Petition of intervention further avers that appointment on November 10, 1913, of J. S. Gething as receiver of said company by the district court of Val Verde county, at instance of Clair. McCormick for benefit of dll creditors who might join therein or intervene, and further alleged said receiver’s qualification under such appointment.
“(7) The petition of intervention alleged indebtedness of the Russell Oil Company to each of the interveners in the amounts and for the consideration following: Clair McCormick, for work and labor, $772.72; Clair McCormick, as-signee, material and supplies, $15.40; J. S. Gaughey, for work and labor, $205.00; J. N. Gaughey, for work and labor, $195.00; Eugene Thompson, for work and labor, $230.00; W. L. Holmeg, for work and labor, $132.00; H. W. Lazrine, for work and labor and cash, $509.96; A Holmeg, for work and labor, $7.20; Roach-McLymont, for material and supplies, $53.40; Sonora Mercantile Co., for material and supplies, $445.85.
“(8) It is alleged by interveners the claims for work and labor accrued in March and April, 1913, and was just and due and unpaid.
“(9) Interveners further averred that the only tangible assets belonging to defendant out of which its creditors can reasonably hope to realize their debts, consisted of the property seized under the plaintiffs’ writ of attachment.
“(10) That plaintiffs are the assignees of Chas. iS. Rees, who is now and was, at the time of the institution of this suit, and for a long time prior to the institution of this suit, the president and one of the directors of said Russell Oil Company.
“(11) That said Chas. S. Rees was, at the time of the institution of said suit, and is now, the principal managerial officer of the defendant, and has charge, direction, and control of its affairs.
“(12) They further alleged: ‘These interven-ers are informed and believe, and so charge the fact to be, that this suit was brought by the plaintiffs herein, at the instance and request of said Chas. S. Rees, the latter acting in collusion with the defendant herein for the purpose of hindering, delaying, and defrauding these in-terveners, the creditors of the defendant.’
“(13) Interveners prayed that they be allowed to defend against the suit brought by plaintiffs, who are the assignees of Ohas. S. Rees; that on final trial interveners have judgment against defendant Russell Oil Company for their several debts due them, with interest and all costs of suit; that the plaintiffs be denied a preferential claim or lien upon the property of the defendant herein; that the property seized under plaintiffs’ writ of attachment be sold under orders of the court and the proceeds be applied ratably to the payment of the interveners’ claims and of others who may join or intervene herein, and for general relief.
“(14) Service of notice of interveners’ petition of intervention, with certified copy thereof, was duly had upon the Russell Oil Company, by service upon its vice president and secretary respectively.
“(15) No answer or appearance was made by the Russell Oil Company, nor was any further pleadings filed by the plaintiffs.
“(16) On November 3, 1914, an order was made by the district court of Sutton county in said cause, by agreement, directing sale of the attached property by the sheriff, and venue was changed to Tom Green county.
“(17) The transcript from Sutton county, certified May 1, 1915, was filed in the trial court May 8, 1915.
“(IS) On January 31, 1916, the case was tried to the court, and judgment was rendered in favor of plaintiffs, establishing their debt against defendant Russell Oil Company, adjudging a foreclosure of their attachment lien, and denying interveners any relief. Interveners in open court excepted and gave notice of appeal.
“Statement of the Evidence.
“An agreement as to facts was, on the trial below, read in evidence. For convenience, those parts thereof deemed by appellants material and controlling are here stated. It was agreed:
“(1) That the debts of the various interveners are likewise just, due, and unpaid, and were just, due, and unpaid at the time of the filing of their petition of intervention, and were just, due, and unpaid at the time of the institution of this suit by the filing of plaintiffs’ original petition, and that the facts alleged in their petition of intervention as to the accnial and existence of said debts are true.
“(2) That at the time of the institution of this suit those interested in the Russell Oil Company contemplated the continuance of drilling operations, and intended to continue to prospect for oil or gas upon lands held by them under lease. It is agreed that this clause shall be considered and construed in connection with the letter of Chas. 8. Roes, dated October 30, 1913.
“(3) That P. M. Shannon, vice president Russell Oil Company, contracted the various debts upon which the claims of interveners are based.
“(4) That the indebtedness 'of the Russell Oil Company to Chas. 8. Rees, basis of plaintiffs’ suit, was assigned by him to the plaintiffs for the purpose of enabling them to collect same for his account, and that plaintiffs herein have not paid Chas. S. Rees anything of value as a consideration for said assignment, other than the obligations of plaintiffs, as attorneys, to collect same for him.
“(5) That Chas. S. Rees did not direct the suing out of the writ of attachment in this case, but forwarded to Cornell and Wardlaw, as attorneys, the assignment, copied and set out in plaintiffs’ pleadings, with the request that they proceed to the collection of same in a manner dictated by their judgment. That plaintiffs accordingly resorted to attachment proceedings for the purpose of acquiring jurisdiction, and did not resort to the attachment for the purpose of securing a preference over other creditors.
“(6) That all the debts specified in interven-ers’ petition of intervention were incurred by the Russell Oil Company in connection with its operations in Edwards county.
“(7) That Chas. S. Rees was, during the time of said operations, a director and the president of the Russell Oil Company, and was president of said company at the time of the institution of this suit.
“(8) That on October 18, 1913, prior to the institution of plaintiffs’ suit, Messrs. Boggess & Smith, attorneys for interveners herein, addressed a communication to P. M. Shannon, V. P., of the Russell Oil Company, at Jasper, Ala., a carbon copy being sent to A. T. Bulkeley, secretary treasurer of the Russell Oil Copmany, 1123 Broadway, New York, the subject of such communication being a request for payment of the claims of interveners. That shortly after October 22, 1913, Messrs. Boggess & Smith, attorneys for interveners, received a communication purporting to be signed by Chas. S. Rees, president, dated October 22, 1913, upon stationery bearing the printed name ‘Russell Oil Company, 1123 Broadway, Cor. 25th St.,’ and bearing the printed legend ‘Charles S. Rees, President,’ which said letter it is agreed will be read in evidence, and carbon copy of Messrs. Boggess & 'Smith’s letter of October 18, 1913, may be read in evidence when identified by Bamar Smith.
“(9) That on October 23, 1913, Boggess & Smith addressed a letter to Chas. S. Rees, president of the Russell Oil Company, a carbon copy of which may be read in evidence upon being identified by Lamar Smith.
“(10) On October 30, 1913, Boggess & Smith received from Chas. S. Rees, president of the Russell Oil Company, a letter which it is agreed may be read in evidence upon being identified by Lamar Smith.
“(11) That the oil leases taken and owned by the Russell Oil Company before and after the institution of plaintiffs’ suit were not paid for in cash, but the consideration therefor was payment of royalty upon oil or gas found.
“(12) That the Russell Oil Company had not, at the time of the institution of this suit, and has not now, within the knowledge of plaintiffs or these interveners, any property or funds in Texas, other than the property seized under plaintiff’s writ of attachment, and the leaseholds as above set out.
“(13) Interveners then read in evidence letter received from Chas. S. Rees dated October 30th, above referred to, as follows: ‘Our secretary, Mr. Bulkeley, being out of the city, and not being in position to know if he has advised you as to the conclusion of the stockholder's’ meeting, held Oct. 24, have decided it may be well for me to inform you what action was taken in regards to your favor of the Oct. 16th. The stockholders’ meeting was held on October 24, with a majority of stock represented and your letter and proposition as to bill of sale, was presented for their consideration, and I am very sorry to say, did not meet with their approval, for it was well known by the majority of the stockholders that Mr. iShannon had superseded his authority in incurring this indebfc edness, also felt that Mr. McCormick must have been aware of the fact as well and they also feel that the material, etc., making up the general outfit, is worth so much more than the amount in question, that it was decided at the meeting that a committee should be appointed to try and see if they could not possibly devise some means whereby they could secure sufficient capital to meet those claims which are just, as I might say here that some of the claims are somewhat irregular and naturally would have to have some adjustment of them before they are paid. The committee is also authorized to try and not alone secure additional capital to meet the just claims, but secure enough capital to continue operations down there. In case they fail in this manner, they will try to sell the effects in general and liquidate its indebtedness. X assure you the company always desired to pay its indebtedness and always has, except up to the present claims, which you are representing, but I assure you that this was incurred entirely on the personal authority of the manager, without the knowledge or consent of the company. Mr. McCormick who, as Mr. Shannon states, was the representing agent and should have known, if he really did not know, that no such liabilities should ever have been incurred against the company, for Mr. Shannon was particularly told and warned, as well, not to incur any further indebtedness than the money had in hand to take care of. He makes a great many plausible excuses, and puts the burden of some of his excuses on Mr. McCormick, still all this will not put the company in good appearance down there with you, but we think and hope that under the circumstances, that no action will be taken against the company, until we have given this committee some time to try and relieve us of our present position. I might say that the company fully understands your position, representing these claims and know that the majority of your clients are familiar with the outfit we have there, as well as- to its costs, and that there would be no danger of its ever being taken away from there, or if sold, that it is well worth all the claims you represent, in fact, twice as much, at any decent sale. I do not desire to advise you as to your action in securing your clients’ claims by litigation, but I do say that the committee will have to be well assured that these claims are all just and right against the company. In closing I desire to inform you this was the decision of the stockholders’ meeting, and would be pleased to hear if our secretary has so advised you. Yours very truly, Chas. S. Rees, Pres’t.’
“(14) The district court of Val Yerde county made an order appointing intervener J. S. Gething receiver of the Russell Oil Company. All the money derived from the sale of the attached property, after payment of costs, aggregating $956.45, has been paid to appellees by the district clerk.”

Opinion.

The sole question for our determination is whether or not the facts as disclosed by this record will justify the judgment of the court awarding appellees priority of payment of their claim out of the fund of the Russell Oil Company deposited in the registry of the court, arising from the sale of the well machinery under the writ of attachment. We are not unmindful of the finding of fact by the trial court that the company, at the institution of this suit, was a solvent, going concern, and that the law seems to be well settled that until a corporation becomes not only insolvent, but has likewise ceased to be a going concern, it has the power to prefer its creditors by executing a mortgage or otherwise, and that a diligent creditor of such corporation, although he be a director, can in good faith secure such preference over other creditors by attachment or garnishment, etc. See Lyons-Thomas Hardware Co. v. Perry Stove Mfg. Co., 86 Tex. 143, 24 S. W. 16, 22 L. R. A. 802; Shoe Co. v. Thompson, 89 Tex. 501, 35 S. W. 473; Frank Co. v. Berwind, 47 S. W. 681, in which latter case it was held that a director of a corporation in a state of insolvency, but yet a going concern, may, by attachment and levy on its property, gain a preference over other creditors for a debt incurred by such corporation in good faith to such director, since it was permissible for the corporation to voluntarily prefer one of its directors. Notwithstanding this doctrine, appellants contend that it should not obtain as applied to the facts of this case, urging by their eighth assignment, submitted as a proposition, that the court erred in the judgment rendered herein in adjudging that the interveners take nothing by their suit, but as against them that the defendant company go hence without day; and that they likewise take nothing as against plaintiffs, because the undisputed facts and testimony show: (a) That the Russell Oil Company was justly indebted to interveners in the amount specified in their petition of intervention herein; (b) that plaintiffs are the assignees and suing for the benefit of Chas. S. Rees, a general and unsecured creditor of the defendant company; (c) that the said Rees was at the time of the issuance and and levy of plaintiffs’ writ of attachment a director and the president of the Russell Oil Company; (d) that at and prior to the issuance and levy of plaintiffs’ writ of attachment, the said Ohas. &. Rees, plaintiffs’ assignor, had actual knowledge of interveners’ indebtedness against the Russell Oil Company; (e) that at and prior to the issuance and levy of plaintiffs’ writ of attachment, the Russell Oil Company was, to the actual knowledge of said Rees, financially embarrassed, and was unable to discharge its obligations in due course of business; (f) that said Chas. S. Rees, plaintiffs’ assignor, was guilty of bad faith towards the interveners in urging them to defer legal action against the Itussell Oil Company, of which he was the president, while at the same time arranging for the issuance and levy of what is now claimed on his behalf to be a preferential attachment on ¿11 its known tangible assets in Texas; (g) that said Chas. S. Rees, plaintiffs’ assignor, shortly prior to the levy of plaintiffs’ writ of attachment, represented to interveners’ attorneys, in his capacity as president of the Russell Oil Company, that if sufficient capital was not raised to pay in-terveners’ debts, the affairs of the company would be liquidated. And by their second proposition thereunder it is insisted that, where it is shown without dispute that a foreign corporation doing business in Texas is financially embarrassed; that the president of such corporation has actual knowledge thereof, and such corporation, through its president, had negotiated with the attorneys in Texas for certain general creditors of. such corporation, and urged that no legal action be taken against the corporation pending efforts of its stockholders’ committee to reorganize its affairs; that such president had represented to the attorney for such creditors that if sufficient capital was not raised to pay its debts, its affairs would be liquidated; that while such negotiations were pending the president of the company assigned his unsecured claim against the company to the Texas attorneys for the company for collection for his account — such assignees could not, by attachment, secure a preferential lien upon all the tangible assets of such corporation in Texas as against the other intervening general creditors of such corporation.

We agree with appellants in this contention, for here the creditor who seeks to apply the entire assets of this concern to his own separate use and benefit is shown to be aware of the financial straits of the company, its inability, not only to meet its own obligations, bat likewise the claims of interveners and others who have furnished labor and material for conducting its business, all of which was long past due; that he had gone so far as to advise their attorneys that a committee of the stockholders had been appointed for the purpose of making arrangements by which not only to secure money to pay off its indebtedness in Texas, but also to procure funds to continue operations down there, and that if this could not be accomplished, the company would go into liquidation, expressing the hope that in the interim no action would be taken by them looking to the enforced collection of the claims of their clients. Two days before writing this letter, and before such committee had reported, we find this director and president, who was the general manager of the company, assigning and forwarding his claim for collection to his attorneys in Texas, with instructions to use their best judgment in its collection, which resulted in the suing out and levying of this attachment on November 5th upon all of its available assets, of which fact no mention was made in said letter. The only character of business the company seems to have been doing at this time was the procuring of oil leases for a royalty', but for which no cash money was paid.

We believe that the law, under such ■circumstances, should properly hold a creditor, who is the president and general manager of such company, to the utmost good faith in the attempted collection of his claim in order to obtain a preference over other creditors; and such seems to have been the view entertained by Mr. Justice Ely in Prank Co. v. Berwind, supra. In 10 Cye. p. 1255, we find it stated:

“Fourth. Doctrine that corporations cannot prefer their directors and officers: (a) Statement of Doctrine. The better doctrine and one resting on principles of justice too obvious for explanation or comment, is that when a corporation is insolvent, or when it reaches such a condition that its creditors, (sic directors) see that they must deal with its assets in the view of its probable suspension, they cannot use those assets to prefer themselves, as creditors or trustees, in respect of past advantages to the prejudice of its general creditors” (citing numerous authorities).

The editor, continuing on page 1256, says:

“The governing principle is that the directors and managers of insolvent corporations are trustees of the funds as well for the creditors as for the corporation, and are bound to apply them pro rata, and cannot use them to exonerate themselves to the injury of other creditors.”

Again on the same page we find the fallowing :

“This obligation to hold the assets of the corporation as a trust fund for equal distribution among its creditors attaches to the directors, not only when they have voted the corporation to be insolvent, but whenever the fact that it must discontinue business by reason of insolvency comes to their knowledge. This knowledge of insolvency is not, and cannot from the very nature of things, be a positive knowledge. It is a reasonable belief, founded upon probabilities, having reference to the company’s affairs. It is sufficient to put an end to the rights of directors to prefer themselves as creditors for them to know that it is probably insolvent, although sometimes, it is to be confessed, the courts have gone far in indulging a want of knowledge or judgment on the part of the directors in this particular. The only sound principle, then, is that the directors of the corporation cannot prefer themselves as creditors, either when it is in fact insolvent, or when its condition is such that the act is done by them in contemplation of its insolvency.”

Notwithstanding the law gives a preference to a creditor, even though he be a director, for the enforcement of his claim against a solvent, going corporation, still, where the record shows, as it does in this instance, that such creditor, who was the manager thereof, was well aware that his company was on the verge of insolvency, owing debts for labor, supplies, and material that were long past due, and which it was unable to pay, he will not be permitted to lull to inaction other creditors, or their representative, and thereby obtain an advantage over them in the collection of his own claim; but the law, under such circumstances, will exact of him the utmost good faith toward them.

Believing, for the reasons stated, that the record in this proceeding did not justify the trial court in awarding appellees a preference and priority of payment out of said fund, its judgment is reversed, and the court is instructed to render judgment distributing the fund, heretofore mentioned, in the registry of the court, ratably among all creditors of said corporation whose claims have been established, including those of plaintiffs and in-terveners, either through its receiver or through any other agency the court may see proper to order.

'Reversed, with instructions.
      <S=»For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: BROOKE, J.

license: Public Domain

text:
    TEXAS & N. O. R. CO. v. TURNER.
    (No. 189.)
    (Court of Civil Appeals of Texas. Beaumont.
    March 28, 1917.)
    1. Tbial <&wkey;392(2) — Findings and Conclusions— Statute.
    Under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1989, requiring trial judge on request to state in writing the conclusions of fact found by him separate from the conclusions of law, which conclusions of fact and law shall be filed with the clerk and constitute part of the record, and article 2075, providing that the judge of the district or county court shall-have ten days after adjournment of the term at which the case was tried to prepare his findings and conclusions, they cannot be filed within ten days after the end of the subsequent term at which judgment nunc pro tunc was entered, so that a request to file findings and conclusions made at the trial was seasonable, and the failure to file them was reversible error.
    [Ed. Note. — Eor other cases, see Trial, Cent. Dig. § 917.]
    2. Judgment <&wkey;273(4) — Entry Nunc Pbo Tunc — Geounds.
    A judgment nunc pro tunc should not be entered unless some proper and sufficient evidence be adduced to show that the court had in fact announced or rendered the judgment which it is the purpose of the nunc pro tune entry to correctly evidence,' as the purpose of a nunc pro tunc entry and its only legitimate function is to correctly evidence from the. records of the court a judgment, decree, or order actually made by it, but which for some reason has not been entered of record at the proper time.
    [Ed. Note. — For other cases, see Judgment, Cent. Dig. § 528.]
    Error from Orange County Court; D. C. Bland, Judge.
    Suit by J. S. Turner against the Texas & New Orleans Railroad Company. Judgment for plaintiff, and defendant brings error.
    Reversed and remanded.
    See, also, 182 S. W. 357.
    Baker, Botts, Parker & Garwood, of Houston, and Orgain, Butler & Bolinger, of Beaumont, for plaintiff in error. Bisland & Bruce, of Orange, for defendant in error.
   BROOKE, J.

Defendant in error instituted this suit on the 23d day of December, 1914. The suit was for damages against plaintiff in error for the killing of three mules and injuring one mule. The case was tried at the January term, 1915, of the county court of Orange county, and resulted in a judgment in favor of the defendant in error. On appeal, the judgment was reversed, and the cause remanded, and on the 18th day of April, 1916, the cause again went to trial before the court, a jury having been waived. The issues were made under the original petition filed on December 24, 1914, and the original answer of plaintiff in error, filed on January 4, 1915, and at the April term, 1916, the court pronounced judgment in favor of the defendant in error for $630. On the 22d day of April, 1916, plaintiff .in error filed its amended motion for new trial, which was on the same day overruled, and on the same day, to wit, April 22, 1916, plaintiff in error filed a request for findings of fact and conclusions of law by the trial judge. On May 26th, plaintiff in error filed his bill of exception to the court’s failure to file his findings of fact and conclusions of law. On the 6th day of July, 1916, at a subsequent term of the court, to wit, the July term of said court, plaintiff in error filed its motion for the entry of judgment nunc pro tunc, and on the same day the court sustained said motion and ordered a judgment entered nunc pro tunc, which judgment was duly entered upon the 6th day of July, 1916. After the entry of the judgment at the July term of the court, the plaintiff in error filed no additional request for findings of fact and conclusions of law. In other words, plaintiff in error did not renew its former request, and the court, at its July term, as above stated, did not file any findings of fact and conclusions of law. No bill of exception to tire failure of the court to file his findings of fact and conclusions of law within ten days after the adjournment of the July term of the court was filed. Thereafter, on the 10th day of October, 1916, plaintiff in error filed its petition for writ of error, which petition was duly served upon defendant in error.

The first and second assignments of error are as follows:

(a) “The court erred to the prejudice of defendant herein in failing and refusing- to file in this case, within the time and in the manner provided by law, its findings of fact and conclusions of law, a request that the court make and file said findings and conclusions having been duly made by the defendant, as shown by defendant’s bill of exception No. 1, and injury resulting to the defendant by the court’s failure to do so.”
(b) “The judgment herein rendered is erroneous and prejudicial to the defendant, in that it is not supported by any findings of fact, although findings of fact were requested to be filed in the case by the defendant.”

The bill of exception to the action of the court is as follows:

“Be it remembered that the above cause came on for trial in the county court of Orange county, Tex., before Hon. D. O. Bland, judge of said court, on Tuesday, April 18, 1916, same being at a regular term of the county court of Orange county, Tex., and same being regularly set and called for trial in its order -upon the docket of said court on said 18th day of April, A. D. 1916.
“Be it further remembered that the trial of said cause before 1-Ion. D. 0. Bland, judge of said court, without the intervention of a jury, continued from the morning of said 18th day of April, A. D. 1916, until noon of the next day, April 19, 1916, at which time a judgment was rendered in favor of the plaintiff and against defendant for the sum of $630 and all costs of court.
“Be it further remembered that on the 22d day of April, 1916, which said 22d day of April was the last day of the said April term of said county court of Orange county, the defendant, Texas & New Orleans Railroad Company, fileu in said cause its first amended motion for new trial, in lieu of its original motion for new trial which had been filed in said cause on April 19, 1916; that said first amended motion for new trial was called to the attention of the court by counsel for defendant in open court on said 22d day of April, A. D. 1916, and was by the judge presiding, Hon. D. O. Bland, in' all things overruled, to which action of the court in overruling said motion for new trial the defendant then and there in open court duly excepted, and in open court gave notice of appeal to the Court of Civil Appeals for the Ninth Supreme Judicial District of Texas, at Beaumont, Tex.
“Bo it further remembered that on said 22d day of April, 1916, after the overruling of defendant’s said first amended motion for new trial, and after defendant, through its attorneys had in open court given notice of appeal, as hereinabove set out, the defendant, Texas & New Orleans Railroad Company, filed in said cause by and through its attorneys of record its written motion, in which motion said defendant moved and requested Hon. D. C. Bland, Judge presiding in said cause, to prepare and file therein, as provided by law, his findings ol fact and conclusions of law, which said motion for findings of fact and conclusions of law was then and there on the 22d day of April, A. D. 1916, called to the attention' of the judge presiding, Hon. D. C. Bland, by counsel for the defendant, Texas & New Orleans Railroad Company.
“Be it further remembered that the said April term of the county court of Orange county, Tex., at which term the cause styled and numbered as above was tried, expired by operation of law at midnight on said 22d day of April, A. D. 1916, and that thereafter, to wit, on the - day of April, A. D. 1916, and within ten days from and after said 22d day of April, 1916, Chas. T. Butler, one of the attorneys of record for the defendant, Texas & New Orleans Railroad Company, in the above styled and numbered cause, requested said Hon. D. O. Bland, in chambers at the courthouse in Orange county, Tex., to make and 'file his findings of fact and conclusions of law in said cause, in pursuance of the motion for findings of fact and conclusions of law to be filed in said cause, as provided by law, by the judge trying said cause, within ten days from the expiration of the term of court at which said cause was tried.
“Be it further remembered that Hon. D. C. Bland, judge of the county court of Orange county, Tex., who presided upon the trial of said cause, failed to file among the papers of said cause_, or with the clerk of said court, within the time provided by law, viz. ten days from and after said 22d day of April, A. D. 1916, his findings of fact and conclusions of law, as requested in writing by the defendant, Texas & New Orleans Railroad Company, to which action of said Hon. D. C. Bland, in failing and refusing to file in said cause, within said time his • findings of fact and conclusions of law, as requested by the defendant, the defendant, Texas & New Orleans Railroad Company, excepts, and here and now tenders this, its bill of exception, complaining of the action of Hon. D. O. Bland, in failing to file such findings of fact and conclusions of law within said time, and prays that this, its bill of exception to the action of the court, be in all things examined, approved, and settled, and ordered filed as a part of the record in this cause.
“This the 26th day of Hay, A. D. 1916.
“Respectfully submitted, Hightower, Orgain & Butler, Attorneys for Defendant, Texas & New Orleans Railroad Company.
“In chambers, Orange, Texas, this the 26th day of May, A. D. 1916.
“The foregoing bill of exception being presented this day in chambers, same is examined and is in all things approved and ordered filed as a part of the record in this cause. D. C. Bland, Judge of the County Court, Orange, County, Texas.”

No findings of fact or conclusions of law were ever filed by the court.

Article 19S9 of Vernon’s Sayles’ Texas Civil Statutes, provides:

“Upon a trial by the court, the judge shall, at the request of either of the parties, state in writing the conclusion of fact found by him, separately from the conclusions of law; which conclusions of fact and law shall be filed with the clerk and shall constitute a part of the record.”

Article 2075, Vernon’s Sayles’ Texas Civil Statutes, provides:

“The judge of any district or county court shall have ten days after adjournment of the term at which a Cause may be tried in such court in which to prepare his findings of fact and conclusions of law in cases tried before the court, when demand is made therefor.” (Italics ours.)

Defendant in error has filed a very able, elaborate, and ingenious brief, to the effect that the trial is not finally ended until the entry of said judgment, and the plaintiff in error has the right to then request findings of fact and conclusions of law, and a failure to request such findings of fact and conclusions of law at said time is a waiver of his right to demand such findings, and we are cited to a long list of authorities to sustain their proposition. We do not believe that the authorities cited sustain the proposition that findings of fact and conclusions of law could be filed within ten days after the end of the term at which the judgment nunc pro tune was entered, and that the cases cited merely hold that the time for perfecting appeal, filing bills .of exception and statement of facts, relate from that time, and that it has not been held, and we do not understand how it could be held, by the appellate courts that the filing of the findings of fact and conclusions of law apply, for the reason that the statute itself is, as quoted above, that the findings of fact and conclusions of law shall be filed within ten days from the end of the term at which the case was tried.

As stated in the case of Finnigan-Brown Company v. Escobar et al., 192 S. W. 258, the purpose of a nunc pro tuno entry, and its only legitimate function, is to correctly evidence upon the records of the court a judgment decree or order actually made by it, but which, for some reason, had not been entered of record at the proper time. A judgment nunc pro tunc should not be entered unless some proper and sufficient evidence be adduced to show that the court had, in fact, announced or rendered the judgment which it is the purpose of the nunc pro tunc entry to correctly evidence. In the case of Wandry v. Williams, 103 Tex. 94, 124 S. W. 85, Chief Justice Gaines, handing down the opinion, says:

“In regard to the third question, we fail to see how a mandamus would be applicable to the case. After ten days home elapsed from the adjournment of the court, the power of the trial judge to file conclusions of fact and law ceases. We do not perceive how in so short a time a mandamus suit could be instituted and prosecuted to a recovery. Besides the trial judge, having ten days after adjournment to file Ids conclusions, the party * * * cast in the suit may not know until the time has elapsed that lie will not do so.”

We have carefully considered the brief of the defendant in error, and we hold that the plaintiff in error seasonably filed his motion with the trial court to file his findings of fact and conclusions of law, and the fact that the court refused to filé his findings of fact and conclusions of law was error, which necessitates a reversal of this cause.

Reversed and remanded.

HIGHTOWER, O. J., recused and not sitting.
      <S&wkey;For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HIGGINS, J.

text:
    TURNER v. ONTIBEROS.
    (No. 673.)
    (Court of Civil Appeals of Texas. El Paso.
    March 22, 1917.
    Rehearing Denied April 19, 1917.)
    1. Appeal and Error <&wkey;1010(l) — Review-Setting Aside Eindings.
    Where a finding of fact has some evidence to support it, the appellate court will set it aside only where it is against such a -preplon-derance of evidence that it is clearly wrong.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3979-3981.]
    2. Release <&wkey;12(3), 16 — Grounds op Avoidance-Absence op Fraud .
    Mere inadequacy of consideration for which a release is given and ignorance of the releas;- or’s rights is insufficient to avoid the release in absence of fraud or other improper influence.
    [Ed. Note. — For other cases, see Release, Cent. Dig. §§ 20, 31.]
    3. Release <&wkey;17(2) — Fraud—Knowledge op Condition.
    Mere knowledge of the releasor’s ignorance and weakness of mind will not make the other party guilty of fraud.
    [Ed. Note. — For other cases, see Release, Cent. Dig. § 32.]
    4. Release <&wkey;15 — Mental Capacity — Sue-PERING AND OpIATES.
    One whose mind is so enfeebled by suffering or influence of opiates that he does not understand the nature and effect of his release is incompetent to execute it.
    [Ed. Note. — For other cases, see Release, Cent. Dig. § 30.]
    5. Release <®=^52 — Suppiciency op Allegation-Mental Capacity.
    Allegation that execution of a release “was done without his knowledge or consent” or “while he was under the influence of opiates or suffering from the injuries and was not himself” sufficiently alleged mental incapacity in the absence of special exception.
    [Ed. Note. — For other cases, see Release, Cent. Dig. § 92.]
    6. Release <&wkey;57(l) — Mental Incapacity — Evidence.
    Evidence that plaintiff was in great pain, out of his head, and did not know anything or anybody when signing release was evidence of mental incapacity.
    [Ed. Note. — For other cases, see Release, Cent. Dig. §§ 106, 107.]
    7. Appeal and Error <&wkey;994(3) — Credibility op Witnesses — Question por Trial Court. Upon trial before the court without a jury the credibility of witnesses was a question for the court.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3904-3906%.]
    Appeal from District Court, El Paso County; Ballard Coldwell, Judge.
    Action by Felipe Ontiberos against S. T. Turner. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    Burges & Burges, of El Paso, for appellant. Weeks & Owen and Gibson & Wilson, all of El Paso, for appellee.
   HIGGINS, J.

Ontiberos was a laborer upon Turner’s farm. While engaged in feeding a feed chopper, his hand was caught by the knives of the machine and his fingers severed. He brought, this action to recover his damages sustained by the injury. The defendant pleaded assumed risk, contributory negligence, and a release executed in consideration of $25 paid.

By supplemental petition appellee denied the execution of a release, but averred, if defendant had such a release executed by him, “that the same was done without his knowledge or consent, or while he was under the influence of opiates or suffering from the injuries and was not himself;” that the payment of $25 was a wholly inadequate consideration ; that he was a minor at the date the release was executed.

The case was tried before 'the court, and judgment rendered in favor of plaintiff for his damages in the sum of $975. Findings of fact and conclusions of law were filed by the court. He found that defendant was negligent in failing to provide a safe place to work and in failing to instruct plaintiff in the use and’ dangers of the machine; that plaintiff did not assume the risk and was not guilty of contributory negligence; that the release pleaded by defendant was executed by plaintiff, and that he received $25 in consideration thereof; that such sum was wholly insufficient and inadequate; that he was 21 years of age at the time of his injury; that plaintiff was ignorant of his rights at the time he executed the release, which was known to defendant; that at the time the release was executed plaintiff “was not in such condition of mind as to know or appreciate the nature or effect of signing such release,” which was known to defendant. Upon the facts found the court concluded that the defendant became liable to plaintiff, and “that the release obtained by defendant was not binding on plaintiff on account of the weakness of plaintiff’s mind at the time of such release, on account of the inadequacy of the consideration therefor, and on account of his ignorance of his rights.”

Under his fourth and fifth assignment it is asserted that the evidence discloses that plaintiff’s injuries were proximately caused by his own negligence and that he had assumed the risk. Under the first and second assignments it is asserted that the evidence so overwhelmingly discloses that the plaintiff was guilty of contributory negligence or had assumed the risk that this court should set aside the findings of the lower court upon these issues. We will not undertake to detail the evidence upon the issues. It is sufficient to say that in our opinion the issues are raised by the evidence and that it is sufficient to support the findings.

The appellate court will set aside a finding of fact which has some evidence to support it in those cases only where the finding is against such a preponderance of the evidence that it is clearly wrong. Insurance Co. v. Fulghum, 177 S. W. 1008; Railway Co. v. Somers, 78 Tex. 439, 14 S. W. 779; 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 evidence upon the issues of assumed risk and contributory negligence does not fall within this rule.

The remaining assignments relate to the findings and conclusions as to the validity of the release. Mere inadequacy of the consideration for which the release was given and ignorance by plaintiff of his rights at the time the release was executed, in the absence of fraud, or some other improper influence, is insufficient to avoid the release. There is no finding of fraud or other improper influence.

The mere knowledge upon the part of defendant of plaintiff’s ignorance and his weakness of mind does not make defendant guilty of any fraud. So, if the release is to be avoided, it must rest upon the mental incapacity of plaintiff to contract at the time it was given. The court found as a fact that plaintiff “was not in such condition of mind as to know or appreciate the nature or effect of signing such release,” and one of his legal conclusions was that the release was not binding on account of the weakness of plaintiff’s mind at the time it was given. This, in effect, was a conclusion that plaintiff was mentally incompetent to contract when he gave the release. Upon this phase of the case appellant asserts there was neither pleading nor proof sufficient to support such a finding.

The pleading is not in a satisfactory condition upon this issue. The allegation is that, “if this defendant has a release executed by this plaintiff, the same was done without his knowledge or consent, or while he was under the influence of opiates or suffering from the injuries and was not himself, if such was the case.” One whose mind is so enfeebled by suffering or the influence of opiates that he does not understand the nature and effect of his agreement or act is incompetent to contract. 1 Parsons on Contracts (9th Ed.) p. 383; 9 Cyc. 459. In the absence of a special exception, the allegation was sufficient to raise the issue of the plaintiff’s mental capacity to execute a valid release. The allegation that the release “was done without his knowledge or consent” or “while he was under the influence of opiates or suffering from the injuries and was not himself” was sufficient to convey the idea that the execution of the release was under such circumstances that his mind was without an understanding of its nature and effect.

This would be all that is required unless a special exception was addressed to the form of the allegation. As to the evidence upon the issue, it is very true there is an abundance of testimony that the plaintiff was perfectly rational and himself when he executed the release. On the other hand, it is shown that the release was given on the second day after the injury and after plaintiff had been placed under an anesthetic and an operation performed.

The plaintiff testified he was in terrible pain, out of his head, and did not know anything or anybody for the first five days after the accident. This was evidence of mental incapacity. The trial court having accepted the plaintiff’s version of his mental condition, there is nothing for this court to do except to sustain the finding. The credibility of the witnesses was for that eourt to pass upon.

Affirmed.
      &=>Por other cases see same tonic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: KEY, C. J.

text:
    PHILADELPHIA UNDERWRITERS’ AGENCY OF FIRE ASS’N OF PHILADELPHIA v. CHEEVES et al.
    (No. 5752.)
    Crane & Crane, of Dallas, for appellant. W. O. Cox and Sam D. Snodgrass, both of Temple, for appellees.
    (Court of Civil Appeals of Texas.
    March 6, 1917.)
    1. Appeal and Error <&wkey;>1053(3) — Reversal —Prejudicial Evidence.
    Whether a case will be reversed because of testimony introduced calculated to prejudice jury, when court instructed jury to disregard it, will depend on particular facts of each case.
    [Ed. Note. — Por other cases, see Appeal and Error, Cent. Dig. §§ 4180-4182; Trial, Cent. Dig. § 977.]
    2. Appeal and Error <&wkey;1053(3) — Reversal —Prejudicial Evidence.
    Where a verdict against insurer was supported by the evidence, and jury were directed to disregard witness’ statements as to payment of a policy by another company, not called for by the question, and counsel asking it conceding the objection will be taken, it will not be reversed.
    [Ed. Note. — Por other eases, see Appeal and Error, Cent. Dig. §§ 4180-4182; Trial, Cent. Dig. § 977.]
    Appeal from Bell County Court; W. S. Shipp, Judge.
    Action by P. E. Cheeves and others against the Philadelphia Underwriters’ Agency of the Pire Association of Philadelphia. Judgment for plaintiffs, and defendant appeals.
    Affirmed.
   KEY, C. J.

This is a county court case, in which the plaintiffs recovered a verdict and judgment against the defendant upon an insurance policy against damage by tornado, windstorm or cyclone, and the defendant has appealed.

But four questions are presented in appellant’s brief, all of which have been considered and decided against appellant. The second is the only one we care to refer to in this opinion; and, while it is not entirely free from difficulty, we have reached the conclusion that the case should not be reversed on that point.

The question referred to arises in this way: The policy sued on was for $4,000. The damage alleged to have been sustained was $955.70, but the plaintiffs sued the defendant for only half of that amount, and in explanation of that fact they alleged that they held another policy against another insurance company for the same amount, and therefore the defendant was liable for only half the value of the property. While one of the plaintiffs was testifying, he was asked by his counsel if he had another policy upon the building, and if it was for the same amount, and he answered that he had; that it was for the same amount, and had been paid. Whereupon the defendant’s counsel not only objected to that portion of the answer of the witness which stated that the other policy had been paid, but asked the court to withdraw the case from the jury and to declare a mistrial. In reply to that request the plaintiffs’ counsel stated to the court that he did not insist upon that part of the witness’ answer, and that he was willing for the court to instruct the jury not to consider that statement, which the court immediately did by telling the jury orally that they must disregard the answer of the witness in reference to the payment by any other company of any other policy. The court overruled the defendant’s request to have the trial arrested and a mistrial declared, and defendant excepted, and that ruling is assigned as error.

Cases have been reversed by the Supreme Court and by this court because of the wrongful conduct usually of overzealous counsel in willfully placing or attempting to place before the jury-testimony highly calculated to arouse sympathy, or otherwise improperly influence the jury, notwithstanding the fact that the trial court had attempted to prevent such harmful result by instructing the jury to disregard such testimony. However, that rule is not inflexible; the holding being that each case must be decided upon its own peculiar facts. In this case the question asked by appellees’ counsel did not call for the portion of the answer that was objected to, and it is not made to appear that the witness who volunteered that additional statement did so for the purpose of getting before the jury improper testimony. As soon as that testimony was objected to the attorney on the other side conceded that the objection was well taken, stated that he did not insist upon such testimony, and that he was willing for the court to instruct the jury to disregard it, which was done.

In view of the facts referred to, and the further fact that the verdict of the jury seems to be well supported by the testimony given by the plaintiffs’ witnesses, and also in accordance with the decided preponderance of the evidence, we have reached the concluí sion that this case should not be reversed on account of the conduct here complained of.

No reversible error has been shown, and the judgment is affirmed.

Affirmed.


text:
    COMPTON v. HOPKINS et al.
    (No. 5774.)
    (Court of Civil Appeals of Texas.
    March 21, 1917.)
    Appeal and Ebroe <&wkey;773(4) — Review—Af-firmance.
    Where an examination of the record failed to disclose any fundamental error, and appellant submitted no brief on appeal, the case being submitted on the briefs for appellee, judgment will be affirmed.
    [Ed. Note. — Por other cases, see Appeal and Error, Cent. Dig. §§ 3104, 3109.]

      Appeal from Williamson County Court; Richard Critz, Judge.
    Action by C. V. Compton against Y. P. Hopkins- and P. D. Rosenbaum. From a judgment against Rosenbaum alone and in favor of ■ Hopkins, plaintiff appeals.
    Affirmed.
    Melasky & Moody, of Taylor, for appellee Hopkins.
   RICE, J.

This suit was brought by appellant against Y. E. Hopkins, as maker, and P. D. Rosenbaum, as indorser, of a promissory note indorsed to appellee. Upon a jury trial appellant recovered judgment against Rosenbaum alone for the amount of the note, interest, and attorney’s fees, judgment being entered in favor of Hopkins, and he was discharged with his costs, from which judgment appellant has prosecuted this appeal, but has filed no brief in this court, the case having been submitted on the briefs for appellee alone.

An examination of the record failing to disclose any fundamental error, the judgment of the court below is in all things affirmed.

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


text:
    KLYCE v. GUNDLACH.
    (No. 5758.)
    (Court of Civil Appeals of Texas. Austin.
    March 14, 1917.)
    1. Landlord and Tenant <&wkey;48(%) — MISREPRESENTATIONS — Waiver.
    Where plaintiff falsely represented to defendant, to whom she rented agricultural land, that it was free from Johnson grass, but defendant discovered that the land was soclded with Johnson grass, either at the time he went into possession or executed the contract of lease and a mortgage to secure the rent, he waived any right of action to recover damages occasioned by falsity of the representations.
    2. Landlord and Tenant <&wkey;48(2) — Misrepresentations as to Nature op Property— Measure op Damages.
    Where defendant, who leased agricultural land from plaintiff, was damaged by her false representations that it was free from Johnson grass, his measure of damages is the difference between the value of the crops he would have raised, had the land been free from such grass, and the value of the crops he raised. He cannot recover as damages the value of his labor, etc., in seeding and cultivating the land.
    [Ed. Note. — For other cases, see Landlord and Tenant, Cent. Dig. § 116.]
    3. Trial <&wkey;349(l) — Submission op Special Issues — Necessity.
    Under Vernon’s Say les’ Ann. Civ. St. 1914, art. 1984a, and Acts 33d Leg. c. 59, declaring that in all jury cases the court, upon request of either party, shall submit the case on special issues raised by the pleadings and the evidence, the refusal of the court to submit a case upon special issues as requested is reversible error.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 823.]
    Appeal from B'ell County Court; W. K. Saunders, Special Judge.
    Action by Mrs. S. L. Klyce against Carl H. Gundlach, who answered, filing a plea in countervention. From a judgment for defendant on his plea in countervention, plaintiff appeals.
    Reversed and remanded.
    A. D. Dyess, of Temple, for appellant. Jno. B. Daniel, of Temple, for appellee.
   RICE, J.

During the fall of 1914 appellant rented 65 acres of land near Temple to appellee for the year 1915, for the sum of $300, money rent, upon which he paid the sum of $50, and executed his note for the balance, secured by a mortgage lien on a pair of mules, and this suit is brought to enforce the collection of the balance due on said note, and foreclose said mortgage lien. Appellee admitted the' execution and delivery of the note and mortgage, but defended on the ground that appellant represented that the land was free from Johnson grass and was ini a good state ;otf cultivation, whereas, in truth, and in fact, the farm was sodded with Johnson grass, and was not in a good state of cultivation, whereby he was unable to make a crop thereon, notwithstanding he made diligent effort to cultivate the same in a farmerlike manner, reconvening in damages in the sum of $600. Appellant replied that, at the time of the making of the rent contract and the execution of the note and mortgage, appellee had full knowledge of the condition of the farm, and that the same was set in Johnson grass, whereby he waived his claim for damages, and was es-topped from setting up fraud. The case was tried before a jury, and resulted in a verdict and judgment in behalf of appellant for the amount due on the note, together with foreclosure of her mortgage lien, and in appel-lee’s favor for the sum of $600, as damages, from which this appeal has been taken.

The facts show that during the fall of 1914 appellant rented 65 acres of her farm to appellee for the ensuing year for the sum of $300, money rent, upon which he paid her the sum of $50 cash, promising to execute his note for the balance and give a mortgage on a pair of mules to secure same, at which time he and appellant rode over and looked at the land. On the 1st of January thereafter he moved upon the place and began work thereon. The note and mortgage in question were executed on the 27th day of January, 1915, at which time he had broken up a considerable portion of the land, and had found that the same was thickly set with Johnson grass. He testified that, notwithstanding this, he executed said papers, because he had been to considerable expensa in moving, and appellee threatened to dispossess him if he refused to do so; it being then too late to get another place. The evidence is conflicting as to whether appellant told him that the land was set in Johnson grass at the time he rode over and examined the same. Appellee testified that he planted tlie land in corn and cotton, and made diligent effort to raise a crop thereon, but was unable to do so on account of the Johnson grass.

The second assignment complains of the action of the court in overruling and striking out appellant’s plea of waiver. Appellant set up the fact that at the time of the execution of the note appellee was in possession of the land and knew its condition with reference to being set in Johnson grass, and that by the execution of the note he waived whatever cause of action, if any, he had, based upon the alleged fraudulent representations of appellant with reference thereto, asserting by her proposition thereunder that no recovery can be had upon an action of fraud and deceit, when it is shown that at the time the contract was made the complaining party knew the true condition of the land he was renting. We think this assignment is well taken, because the evidence raises an issue as to whether appellee knew the land was set in Johnson grass at the time he made the contract, and that it is uncontroverted to the effect that at the time he executed the note he knew the condition of the land. This being true, he could not recover on his plea in reconvention, because by the execution and delivery of the note he must be held to have waived his cause of action based on the alleged misrepresentations as to the character of the land by appellant. See Cresap v. Manor, 63 Tex. 485; Calhoun v. Quinn, 21 S. W. 705. Misrepresentation to a party having knowledge of the facts, or means of ascertaining them, can form no basis for an action of fraud and deceit. Warner v. Munsheimer & Co., 2 Willson, Civ. Cas. Ct. App. § 393; 20 Oyc. 92, wherein it is said:

“If the defrauded party acquires knowledge of the fraud while the contract remains executory, and thereafter does any act in performance or affirmance of the contract, or exacts performance from the other party, he thereby condones the fraud and waives his right of action.”

Believing that the court erred in striking out this plea, we sustain this assignment.

As a basis for his cross-action appel-lee set up the fact that he had worked with his teams in the cultivation of said land from January to August, feeding himself and teams, from which he realized nothing, and that the value of his services and that of his team was the sum of $600. To this plea appellant addressed a general demurrer, which was overruled. This action of the court-is assigned as error. We think the cross-action set up an improper measure of damages, and that it was subject to the demurrer urged. In this connection appellant requested, and the court refused, the following special instruction:

“Gentlemen of the Jury: If you should find that, prior to the rental contract in controversy, the plaintiff, Mrs. S. L. Klyce, made material representations that were false as to the character of the land she was to rent to defendant; that the defendant, Carl H. Gundlach, was deceived thereby, and entered into said contract, relying .upon said false and fraudulent representations, if any, then you will find for defendant a verdict for such damages as he has sustained because of said false and fraudulent representations if any. In this connection you are instructed that the measure of damages in this case is the difference between the value of the crops which the defendant could, by due diligence, have grown upon the land as it existed, and the value of the crops which he could and would with the same amount of labor and expenditure have grown upon the land, if it had been as represented by the plaintiff, taking into consideration the relative costs in attempting to make'and gather the crops.”

This charge, we think, states the correct measure of damages, and should have been given, for which reason we sustain the fifth assignment, complaining of the court’s refusal to so charge the jury.

At the conclusion of the évidence appellant requested and the court refused to submit the ease to the jury upon special issues, but gave a general charge. Appellant properly reserved her bill to the action of the court in this respect, and assigns the same as error. Article 1984a, vol. 2, Vernon’s Sayles’ Bev. Stats., among other things, provides that:

“In all jury cases the court, upon request of either party, shall submit the cause upon special issues raised by the pleadings and the evidence in the case.”

This is a plain statutory requirement, and the refusal to comply therewith on the part of the court, when properly requested by either party, is reversible error. See Acts 33d Leg. Begular Session, p. 113.

For the errors indicated, the judgment of the court below is reversed, and the cause remanded.

Beversed and remanded.
      @=»For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: RICE, J.'

text:
    BALCAR v. LEE COUNTY COTTON OIL CO.
    (No. 5777.)
    (Court of Civil Appeals of Texas. Austin.
    March 31, 1917.)
    Mortgages <&wkey;133 — Property Covered— “ Ajppurtenajít. ”
    Where a company operating a cotton seed oil plant executed a deed of trust on its property situated in a town, a seedhouse located in the country a number of miles away on the land of a party who had contracted to buy cotton seed for the company did not pass to the purchaser at sale under the deed of trust as appurtenant to the company’s property, in the town, though the seedhouse was owned by the company, since the seedhouse was not essential and necessary to the conducting of the oil mill, while “appurtenant” means a thing belonging to another thing as principal and which passes as an incident to the principal thing (citing Words and Phrases, Appurtenant).
    [Ed. Note. — For other cases, see Mortgages, Cent. Dig. §§ 260, 264, 265.]
    Appeal from Lee County Court; John H. Tate, Judge.
    Suit by the Lee County Cotton Oil Company against V. Balear, Sr. From a judgment for plaintiff, defendant appeals.
    Judgment reversed, and judgment rendered for defendant.
    Wm. O. Bowers, of Giddings, for appellant. Richard W. Mayfield and Thomas W. Thompson, both of Giddings, for appellee.
   RICE, J.'

This suit was originally brought by appellee against appellant in the justice court of Precinct No. 1, Lee county, and on plea of privilege being sustained, the venue was changed to precinct No. 6, same county, to recover the sum of $125, damages for the conversion of a seedhouse erected by the Giddings Industrial Corporation, on land belonging to appellant near V. Balear, Jr.’s, store, about four miles east of Dime Box, at the intersection of the Ledbetter and Caldwell road with the old San Antonio road.

The facts show that in 1908 the Giddings Industrial Corporation, which afterwards by an amendment of its charter became the Cotton Oil Company, was conducting a cotton seed oil mill in the town of Giddings, and about the 1st of July of said year entered into a contract with Y. Balear, Jr., to purchase seed for it, upon the condition that the Cotton Oil Company would erect near said store a seedhouse within which to store seed purchased. The land upon which the store stood and the seedhouse was to be erected belonged to appellant, who consented to its erection. Nothing was said, however, between the agent of the mill company and appellant as to how long the seedhouse should remain cm his land, nor was anything said about how long V. Balear, Jr., should buy seed for the mill. There was no agreement in writing at the time with reference to such building, nor any agreement to pay anything for the ground the house occupied, but the agent testified that he understood the seedhouse should remain on the land as long as Y. Balear, Jr., bought seed for the oil mill, and that when he quit buying that the Cotton Oil Company could take the house off. It is not shown that appellant said anything from which that understanding could be implied. The seedhouse .was built soon thereafter on blocks set in the ground, just like other houses are built, and attached to the land, and was for several years used for the purpose of storing seed purchased by Balear, Jr., as agent of the oil mill.

On the 22d of March, 1910, the Cotton Oil Company became financially embarrassed and borrowed from the First National Bank of Giddings the sum of $10,000, to secure which it executed a deed of trust to A. J. Nesbit, trustee, for the benefit of the bank, upon all of “the following described real estate and property, lying and being situated in the county of Lee, state of Texas, to wit: In the town, of Giddings, being known, designated, and described as lots numbered as follows: The west half of lot No. (3) three in block No. forty-seven, and lots Nos. (4) four, (5) five, (6) six, (7) seven and (8) eight in block No. (47) forty-seven in the town of Giddings, state of Texas, according to the map of said town as drawn by Theo. Kosse, a copy of which is upon record in Book 19, page 319, of Record of Deeds of Lee county, Tex., to which reference is hereby made for a more particular description thereof, and being the same property conveyed by J. A. Fields to the Giddings Industrial Corporation, by deed of date June 24, 1907, duly recorded on June 26, 1907. Also all houses and machinery thereon situated, including Atlas boiler and engine, Hoppes heater and complete steam plant; also one complete Van Winkle cotton seed oil mill, consisting of seedhouse, machinery, linters, hullers, separators, pressroom machinery, shafting, pulleys, belts, and all other machinery, appliances, buildings and equipment of every kind and description, .whether named above or not, now situated on the above-described premised; and all machinery, houses, and equipment of every character that may hereafter be placed thereon by said Giddings Industrial ■ Corporation, together with all and singular the rights and appurtenances to the same belonging or in any wise incident or appertaining.” Thereafter the property above described was purchased at trustee’s sale by J. S. Hillsman, through whom, by mesne conveyances, appellee claims title to the seedhouse in question; all such conveyances containing practically the same description as above. In 1911, V. Balear, Jr., ceased to purchase seed, and in 1914 removed his store to the new town of Dime Box, after which appellant removed the seedhouse and converted it to his own use and benefit.

The pleadings raise the issue, first, as to whether or not the seedhouse remained the personal property of the Cotton Oil Company, with the right on its part to remove the same; and, second, whether or not appellee obtained title thereto by reason of its purchase of the property of the Cotton Oil Company sold by virtue of said deed of trust. The trial in the justice court resulted in favor of appellant, from which the case .was appealed to the county court, where a nonjury trial was had, and judgment rendered in behalf of appellee, based on both issues, from which this appeal is prosecuted.

Appellant by his assignments contends that the court erred in rendering judgment in behalf of appellee, for the reason that it did not acquire title to the seedhouse through its purchase of the property described in the deed of trust; urging by his proposition thereunder that if it ever had title to the property in controversy same was acquired either through the Giddings Industrial Cotton Oil Company, or the Farmers’ Cotton Oil Company, and before it could prevail in this suit it became necessary to connect itself with that title, and, having failed to do so, it was error for the court to render judgment in its favor.

Even though it be admitted for argument’s sake that the seedhouse became the personal property of the Giddings Industrial Corporation, or the Cotton Oil Company, by reason of its agreement with Y. Balear, Sr., and that said corporations, or either of them, had the right to remove said house thereunder, still it does not necessarily follow that the house became the property of appellee by reason thereof, because, notwithstanding this, it would become necessary for appellee, in order to acquire title thereto, to connect itself with such Cotton Oil Company’s title. This it claims to have done by virtue of its purchase of the property of the Cotton Oil Company from J. C. Hellsman, it being the same property described in said deed of trust, basing its contention on the fact that the seed-house was an appurtenance to the property so purchased by him. It will be recalled that the property described in the deed of trust was all situated in the town of Giddings, while the seedhouse in question was evidently located, as shown by the testimony, in the country a number of miles away. Will the facts as disclosed by this record show that the seedhouse was appurtenant to the Gid-dings property? We think not.

In 3 Cye.’ p. 565, the word “appurtenance” or “appurtenant” is defined as being:

“A thing belonging to another thing as principal, and which passes as incident to the principal thing. A thing used with, and related to, or dependent upon another thing more worthy, and agreeing in its nature and quality with the thing whereunto it is appendant or appurtenant.”

See, also, volume 1, Words and Phrases, p. 477; also Hunstock v. Limburger, 115 S. W. 327, and authorities there cited.

In Barrett v. Bell, 82 Mo. 110, 52 Am. Rep. 361, “appurtenance,” as. used in a lease of a hotel and appurtenances, means such things as are actually and directly necessary to the enjoyment of the property; and hence a kettle situated on a lot not included in the lease of the hotel, and not indispensable to its enjoyment, although a convenience to such property and used by the lessor in connection therewith, is not an appurtenance. Note 33a, volume 4, Corpus Juris, p. 1467, in speaking of the word “appurtenance,” says:

“It is therefore limited to that which is necessary to the enjoyment of the principal thing granted. Cleary v. Skiffich, 28 Colo. 362, 373, 65 Pac. 59, 89 Am. St. Rep. 207.”

It is further said in the same note that:

“An appurtenance is that only which is incidental or indispensable to the proper use of the premises demised. A mere conveyance does not create an appurtenance.”

Note “b,” same volume, says:

“The true test as to whether a thing is an incident or appurtenance seems to be the property of relation between the principal and adjunct, which is to be ascertained by considering whether they agree in nature and quality so as to be capable of union without incongruity, and is actually and directly necessary to the full enjoyment of the property” — citing Barrett v. Bell, 82 Mo. 110-114, 52 Am. Rep. 361.

Can it be said in the present instance that the seedhouse was absolutely essential and necessary to the conducting of the oil mill? We think not. Certainly no one reading the description as set forth in the deed of trust upon which appellee’s right is based could reasonably conclude that a seedhouse a number of miles in the country could be held to he an appurtenance to the lots in Giddings, upon which the oil mill was situated.

It follows from what we have said that we conclude that title to the seedhouse in question did not pass by reason of the purchase by appellee of the property of the Cotton Oil Company, as described in its deed of trust. Therefore it becomes our duty to reverse and render judgment in behalf of appellant, and it is so ordered.

Reversed and rendered.
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