author: HARPER, C. J.

text:
    PRYOR v. KRAUSE et al. (two cases).
    (Nos. 192, 310.)
    (Court of Civil Appeals of Texas. El Paso.
    April 30, 1914.
    Rehearing Denied June 25, 1914.)
    1. Judgment (§ 670) — Conformity to Pleadings.
    Where the petition complains of a defendant in his individual capacity only, a judgment against him can only bind him in that capacity.
    [Ed. Note. — Eor other cases, see Judgment, Cent. Dig. §§ 1181, 1185; Dec. Dig. § 670.]
    2. Parties (§ 59) — Defects—Amendments— Power of Court.
    Where a defendant is in court in his individual capacity, an amended petition complaining of him in his capacity as executor and trustee, based on the same facts, is not a new
    cause of action against him, and is properly allowed.
    [Ed. Note. — Eor other cases, see Parties, Cent. Dig. §§ 90-94, 165; Dec. Dig. § 59.]
    3. Parties (§ 76) — Defects—Amendments— Petition.
    A plea in limine by a defendant, sued in his individual capacity, which sets forth a pending action by him individually and as executor and trustee against plaintiff and another, individually and as trustees, and others, and which prays for the dismissal of the action for want of proper parties, based on the fact that defendant should have been sued in his representative capacity, accompanied by an answer which sets forth a plea of not guilty and special matters of defense, without waiving the plea in limine, does not show a defect of necessary parties, but merely shows the necessity of suing defendant in his representative capacity, and authorizes an amendment of the petition so as to ask for judgment against him in his representative capacity; otherwise the judgment can be against him individually only.
    [Ed. Note. — Eor other cases, see Parties, Cent. Dig. §§ 117-121; Dec. Dig. § 76.]
    4. Appearance (§ 19) — Jurisdiction Acquired — Petition—Amendments.
    Where, in trespass to try title, a defendant, sued in his individual capacity, appeared in his representative capacity by filing a plea alleging facts showing his representative capacity, the court acquired jurisdiction to enter judgment against him in that capacity on plaintiff amending the petition stating a cause of action against him in his representative capacity.
    [Ed. Note. — Eor other cases, see Appearance, Cent. Dig. §§ 79-82, 84-90; Dec. Dig. § 19.]
    5. Appearance (§ 19) — Jurisdiction Acquired-Parties.
    Where, in trespass to try title, two defendants were sued both in their individual and representative capacities, and one of them entered his formal appearance and disclaimer, and the-other defendant filed a plea constituting an appearance in his representative capacity, the court had jurisdiction to render judgment for plaintiff.
    [Ed. Note. — Eor other cases, see Appearance, Cent. Dig. §§ 79-82, 84-90; Dec. Dig. § 19.]
    6. Executors and Administrators (§ 430) —Actions in Individual Capacity.
    An executor, in his individual capacity, may sue to establish his title to the property of the estate claimed by a cestui que trust.
    [Ed. Note. — For other cases, see Executors and Administrators, Cent. Dig. §§ 1683-1688; Dec. Dig. § 430.]
    7. Executors and Administrators (§ 72)— Actions in Individual Capacity.
    The act of an executor in placing property on the inventory returned is only prima facie evidence of title in the estate, which may be rebutted by proof that the title was not in testator, and does not estop the executor from suing to recover the property in his individual capacity.
    [Ed. Note. — For other cases, see Executors and Administrators, Cent. Dig. § 321; Dec. Dig. § 72.]
    8. Executors and Administrators (§ 72)— Management of Estate — Orders of Probate Court.
    Title to land does not pass by any order of probate court, where it was not owned by decedent.
    [Ed. Note. — For other cases, see Executors and Administrators, Cent. Dig. § 321; Dec. Dig. § 72.]

      9. Trusts (§ 206) — Conveyance by Tbus- ■ tees — Estoppel.
    A trustee joining her cotrustees in executing a blanket deed of trust as trustees is not thereby estopped from suing for the recovery of the property on offering to do equity by offering to pay the proper proportion of the money borrowed by the trustees.
    [Ed. Note. — For other cases, see Trusts, Cent. Dig. §§ 283-292; Dec. Dig. § 206.]
    10. Costs (§ 177) — Guardian ad Litem — Compensation — Taxation.
    Where plaintiff, in trespass to try title against an adult and infants, filed a motion to have a guardian appointed for the infants who had no guardian, the compensation for the guardian ad litem were costs incurred by plaintiff.
    [Ed. Note. — For other cases, see Costs, Cent. Dig. § 695; Dec. Dig. §.177.]
    11. Trespass to Try Title (§ 50) — Costs— Liability.
    Where adult and infant defendants in trespass to try title had no interest in real estate, the fees of the guardian of the infants appointed on the motion of plaintiff must be taxed against plaintiff.
    [Ed. Note. — For other cases, see Trespass to Try Title, Cent. Dig. §§ 80, 81; Dec. Dig. § 50.]
    Appeal from and Error to District Court, El Paso County; A. M. Walthall, Judge.
    Consolidated actions by Annie P. Krause against Thomas D. Pryor, individually and as executor and trustee, and others. There was a judgment for plaintiff, and defendant Thomas D. Pryor, in his individual capacity, appeals, and in his representative capacity, brings error.
    Affirmed.
    See, also, 150 S. W. 972.
    Frank G. Morris and Stanton & Weeks, all of El Paso, for appellant and for plaintiff in error. Davis & Goggin, of El Paso, for ap-pellee and for defendant in- error. T. C. Lea, Jr., of El Paso, for Guardian ad Litem.

      For other oases see same topic and section NUMBER in Dee. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

      For otiier oases see same topic and section NUMBER in Dee. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HARPER, C. J.

Annie P. Krause, by her first amended original petition, filed February 14,1912, sued Thos. D. Pryor and John P. Pryor in their individual capacities, and also in their representative capacities, as independent executors and trustees under will of Fannie D. Porter, deceased, C. W. Fas-sett, receiver of the estate of said deceased, Porter, Frederick Pryor, Thomas Aubrey Pryor, Frances Pryor, Francis D. Pryor, and John P. Pryor, Jr., in trespass to try title to certain premises in the city of El Paso.

The original petition is not shown in the record, but from recital in foregoing amendment it appears to have been filed September 26, 1910. By reason of this omission from the record we are not accurately and definitely advised as to the capacities in which the defendants were originally sued, but we gather from other portions of the record that said Thos. D. Pryor and John P. Pryor in their representative capacities were not sued originally.

Mrs. Fannie D. Porter died November 24, 1896, and her will, hereinafter copied in part,; was regularly admitted to probate, and plaintiff, Annie P. Krause, and defendants John P. Pryor and Thos. D. Pryor qualified as executors and trustees of the estate as therein provided, and entered upon the discharge of their duties as such. The receiver Fassett answered by plea of not guilty.

The other defendants in the cause were grandchildren of Fannie D. Porter, and disclaimers were filed by Francis D. Pryor on February 7, 1911, and by John P. Pryor, Jr., on February 8, 1912, in which title was expressly admitted to be in plaintiff. Frederick Pryor, Thomas Aubrey Pryor, and Frances Pryor being minors, a guardian ad litem for them was appointed, who answered in their behalf, as hereinafter indicated.

On January 7, 1911, John P. Pryor filed a disclaimer expressly admitting the truth of the facts alleged by plaintiff with reference to the title to the premises in controversy, and on February 12, 1912, he entered his appearance in the cause in-his representative capacity, and as such, and in behalf of the estate of the decedent, disclaimed any interest in the premises. At the time this appearance and disclaimer were made, the amended petition, complaining of him in his representative capacity, had not been filed, but the first supplemental petition filed February 8, 1912, hereinafter noted, had been filed, in which judgment against him in such capacity was asked.

On January 19, 1912, Thos. D. Pryor filed his first amended answer, which he termed a plea “in limine,” for the purpose of showing that there was a defect of necessary parties defendant. The pleading is confusing, but we gather the following material allegations: That in cause No. 8056, pending in the Thirty-Fourth district court of El Paso county, wherein Thos. D. Pryor, individually and as executor and trustee of estate of Fannie D. Porter, was plaintiff, and Annie P. Krause, and John P. Pryor, individually, and as such trustees of said estate, together with other persons, were parties defendant, upon the petition of said Thos. D. Pryor, C. W. Fassett was appointed receiver of the estate of said decedent, including the property here in controversy, and that Fassett qualified as such; that on September 15, 1910, he had filed in said cause his amended petition, making Frank Davis Pryor, John P. Pryor, Jr., Frederick Pryor, Thomas Aubrey Pryor, and Frances Pryor, children of John P. Pryor and grandchildren of deceased, as additional parties defendant; that the amended petition was divided into two counts, and was a bill in equity; that he had alleged all of the facts conected with the will and estate of Fannie D.’ Porter, and claimed an accounting both as heir at law and as joint executor and administrator and as tenant for life under the will; that in the first count it was claimed that the will was invalid, as violating the rule against perpetuities, but that question is still undetermined by the court in which said cause is pending; that by the second count in the petition the validity of the will was assumed and an accounting claimed as an executor and trustee and as a life tenant or beneficiary; a copy of the Porter will was attached to the pleading and made a part thereof, and its due execution and probate averred; that he and Annie P. Krause and John P. Pryor had qualified as executors and trustees thereunder, and had afterwards filed an inventory and appraisement of the estate, which included the premises sued for; that the premises so sued for by plaintiff are held by said parties as executors and trustees, and by Fassett as receiver under the appointment aforesaid, and that Fassett, by reason of such appointment, represented all of the beneficiaries under the will, and Annie P. Krause, John P. Pryor, and Thos. D. Pryor as executors and trustees ; that the defendants in said cause on November 30, 1910, filed a motion to vacate the receivership and set forth divers and sundry grounds by which they attempted to make an accounting for and on behalf of the said Annie P. Krause and John P. Pryor as independent executors as aforesaid, and, a supplemental motion to vacate the receivership having been filed by said defendants, the court, on December 18, 1910, in said cause No. 8056, discharged the receiver Fassett; that by reason thereof Fasset is without authority to further appear in this cause in behalf of the heirs at law, beneficiaries, and executors and trustees under the Porter will, and that the court had lost jurisdiction over the person and subject-matter of the suit, so far as the authority of the receiver was concerned; that he (Thos. D. Pryor) and John P. Pryor had never been made parties to the suit in their capacities as executors, trustees, and beneficiaries under the Porter will, and, as shown by the terms of the will, he would not in such capacity be authorized to interpose all of the defenses-’ and claims which should be urged; that by reason of the premises there is a defect and nonjoinder of necessary parties defendant; that Annie P. Krause and John P. Pryor and such of the grandchildren of Mrs. Porter as were of age, as shown by the pleadings, disclaimers, and orders of court, were acting together and against his ihterest and the interest of the minor heirs. Wherefore he presented his plea “in limine,” and prayed that the suit be dismissed for want of proper parties defendant, and, if not dismissed, that the proper and necessary parties defendant be brought before the court, and further proceedings stayed until this was done.

The answer then, without waiving the plea “in limine,” contained a plea of not guilty and special matters of defense not necessary to state in detail.

On February 8, 1912, plaintiff filed first supplemental petition claiming that there was no necessity to make further parties to the suit, but, if so, she asked judgment against John P. Pryor and Thos. D. Pryor in their representative capacity, as well as their individual capacity, and against all of the defendants in whatever capacity they might assert claim to the property.

On February 15, 1912, the minors Frederick Pryor, Thomas Aubrey Pryor, and Frances Pryor, by their guardian ad litem, filed an amended answer, in which they adopted the plea “in limine” of Thos. D. Pry- or ; also pleaded “not guilty” and special matters of defense not necessary to state in detail.

On February 12, 1912, the court entered an order sustaining the plea “in limine” to the extent that Thos. D. Pryor and John P. Pryor, in their representative capacities as executors and trustees of estate and will of Fannie D. Porter, were required to be made parties defendant, but held that making them parties defendant in such capacity did not constitute a new cause of action, and did not require the issuance of citation to bring Thos. D. Pryor before the court in his representative capacity, but that he was already befoi-e the court and would be required to answer in such capacity.

In the pleadings filed by Thos. D. Pryor subsequent to the entry of this order he expressly stated that his appearance was in his individual, and not his representative, capacity.

Upon trial judgment was rendered in favor of Annie P. Krause for the premises sued for, together with improvements thereon, upon condition that she pay off certain notes which constituted a lien thereon executed by herself, John P. Pryor, and Thos. D. Pryor. From this judgment Thos. D. Pryor in his individual capacity prosecuted an appeal, and is before this court as an appellant. In his representative capacity he prosecuted a writ of error, and in that capacity is before the court also as plaintiff in error. The two proceedings upon appeal have been consolidated and considered together.

The original brief filed by Pryor as an appellant was stricken out for failure to comply with the rules and leave given to re-brief. The cause was rebriefed by him, but the last brief is even more violative of the rules than the one originally filed. It is violative of the rules in numerous particulars, and a due regard for the rights of adverse parties and of the duty to present questions upon appeal in such a manner that the court may intelligently grasp and pass upon same demands a due regard for the rules of briefing and the manner in which questions raised should be presented. The assignments in appellant’s brief are confusing in the extreme, and this condition is not aided, but greatly intensified, by the supporting propositions and mass of irrelevant and immaterial matter contained in the brief.

There are 83 errors assigned in a printed brief of 305 pages, presenting all the questions that arose upon the trial. The effect of the appeal under such circumstances is simply to transfer the case from the trial court to this for retrial upon all contested points, without any responsibility being assumed by counsel of selecting, as required by rule 35, and presenting the most important questions in the determination of the case.

To present the views of the court upon each and all of the errors assigned separately would require a voluminous opinion, disproportionate to the importance of the questions raised by most of them. The necessity is therefore devolved upon this court of selecting and presenting such questions as are deemed important to be considered in determining what disposition should be made of the case.

We feel that this brief is such a flagrant violation of the rules that it should not be considered, but, because of the importance of some of the questions raised and the fact that the Supreme Court have indicated that these rules promulgated by it are not to be taken too seriously, we have decided to consider the assignments.

So without further comment upon such assignments as are not specifically mentioned they are overruled because they are without merit, or that they are not in conformity with the rules of this court.

The first assignment submitted as a proposition in brief on writ of error No. 310 reads:

“The court erred in rendering judgment against this defendant in his capacity as executor and trustee of the will and e'state of Fannie D. Porter, deceased, for the real estate described in the judgment in this case, in that this defendant was not brought into said case as a party to this suit by process and service thereof, nor did he appear in this cause in his capacity as executor and trustee aforesaid before said judgment was rendered, and that therefore the court had no jurisdiction to render a judgment against him in said capacity, as such executor and trustee.”

And the same question is raised in brief in 192 on appeal by many assignments. This assignment most ingeniously obscures the true question involved, and presents a false issue. Of course, a court has no authority to render judgment against a defendant who has not been served with citation or in any manner entered his appearance. As to that there can be no doubt. But Thos. D. Pryor was a party defendant and before the court. The court had jurisdiction over his person. True, he was only there in his individual capacity, in the sense that a judgment could not have been rendered which would bind him in his representative capacity, because of the state of plaintiff’s pleadings, which did not complain' of him in that capacity; from which it followed no judgment could have been rendered which would bind him in that capacity. Hanrick v. Gurley, 93 Tex. 458, 54 S. W. 347, 55 S. W. 119, 56 S. W. 330; Landon v. Townsend, 112 N. Y. 93, 19

N. E. 424, 8 Am. St. Rep. 712; 2 Black on Judgments, § 536.

But when the plaintiff amended and complained of him in his representative capacity, there was then potential authority vested in the court to render judgment against him in both capacities, because he was in person before the court and subject to its jurisdiction. When the amendment was filed he was lawfully before.the court. The amendment did not make a new party; it merely complained of a present party in an additional capacity, and it was in no wise necessary that new citation issue to bring him into court, because he was already there, was represented by counsel, was charged by law with notice of the amendment complaining of him in his representative capacity, and, in fact, had actual notice thereof. The amendment was not a new cause of action such as would require the issuance of citation. The cause of action was the same, and based upon same facts. The amendment merely authorized a judgment against Pryor, divesting him of his possession, the property sued for, as trustee; in other words, in a capacity which was not previously authorized by the pleadings. Bearing clearly in mind the fact that Thos. D. Pryor was already before the court subject to its orders and had actual and constructive notice of the filing of the amendment, it will readily be perceived that an amendment which asked relief against him in the representative capacity, when he was already before the court, did .not require a new citation. Thos. D. Pryor was only one person. As a person he was before the court, and, being so, it could authorize amendments by which judgment could be entered, which would bind him in his several capacities. By analogy the views here expressed are supported by the following authorities: Rabb v. Rogers, 67 Tex. 335, 3 S. W. 303; Hay & Grain Co. v. Ratliff Bros., 144 Ky. 161, 137 S. W. 1035; Whitehead v. Herron, 15 Tex. 127, 65 Am. Dec. 145; Randolph v. Barratt, 41 U. S. (16 Pet.) 138, 10 L. Ed. 914; Gray v. Alderson (Ky.) 123 S. W. 317; Van Dorn v. Ry. Co., 93 Fed. 260, 35 C. C. A. 282.

The plea “in limine” set up that there was a defect of necessary parties. Such was not the case. The dual capacity of Thos. D. Pryor, did not make two men out of him. No new parties were brought into court by the amendment. Its only effect was to ask for and authorize judgment against the same parties in an additional capacity, subject to the right to apply for continuance for the term in order that the defenses in the representative capacity might be prepared and properly presented. If the pleadings had not been amended so as to ask for judgment against the Pryors in their representative capacity, the court could nevertheless have rendered a valid judgment against them, which would not have been the case if there was a defect of necessary parties. Such judgment,- however, would have bound them as individuals only, and not as executors and trustees.

This question is entirely separate and distinct from, and must not be confused with, the propriety of the court’s action in proceeding to trial and judgment at the term at which the amendment was filed. This presents the right of continuance. The sole question in its last analysis is: Did the court have the authority to permit an amendment which would bind Pryor in his representative capacity and render judgment thereon without issuing and serving a citation directed to him in such capacity? Under the facts and for reasons indicated, the court was so authorized.

Irrespective of this view, the plea “in limine” of itself constituted an appearance by Thos. D. Pryor in his representative capacity, and when plaintiff amended so as to authorize a judgment against him in such capacity, he had, by virtue of his plea, entered an appearance which gave the court jurisdiction to enter judgment against him in that capacity.. This view is not affected by the fact that by the terms of the will the executors could not act singly. It is a question of whether the court had jurisdiction over him, so as to enter a judgment against him, which is quite distinct from the question of the effect of the judgment upon the interest of the estate. If he could be brought in singly by citation, he could singly enter an appearance so far as he himself was concerned.

The error next assigned by appellant in 810, and presented as a proposition of law, and by him in 192 by 16 different assignments, charges that:

“The court erred in rendering judgment for plaintiff for the land described in the judgment, while the land was in the hands of the executors and trustees without such executorship having been closed and the executors discharged, and without two or more of the executors or trustees being parties plaintiff or defendant hereto in their capacities as such executors and trustees, as without such parties the court had no jurisdiction over the land to render a decree for plaintiff, for the title or possession thereof; the powers of the executors being limited by the will so that two or more of them were required to represent the said estate.”

By amended petition, Thos. D. Pryor and John P. Pryor were made parties defendant in their representative, as well as individual, capacities. John P. Pryor entered his formal appearance and disclaimer, and, in passing upon the first assignment, we have held that the court had jurisdiction and authority to render judgment against Thos. D. Pryor in his representative capacity. Therefore the premise upon which this latter assignment is based — i. e., that the court had no jurisdiction to render judgment for the land because two of the executors and trustees were not before the court — is false and not well taken.

The appellant in both briefs urges several assignments which charge that:

“The court erred in rendering judgment for plaintiff against this defendant as executor and trustee, because the plaintiff, being a co-executor and trustee with this defendant, could not, while remaining such executor and trustee, be permitted to maintain a suit against this defendant as co-executor and trustee for the land held by them as executors and trustees of the estate of Dannie D. Porter, deceased.”

Under this assignment appellant urges that, since this property was claimed by the executors and trustees as property of the estate, and committed to their charge as executors and trustees, she was disqualified to set up title in herself, while she remained trustee.

The will among other provisions, contains the following:

“I devise and bequeath all the lands, tenements, hereditaments and real estate of every tenure, and all the money, securities for money, goods, chattels, credits and personal estate owned by me, or of or to which I shall at my death be seized or entitled unto my children John P. Pryor, Annie P. Krause, and Thos. D. Pryor, and their successors, trustees upon the following trusts and conditions:
“I direct my said trustees to divide the income, but not the principal, of my said estate, after paying all taxes and other necessary expenses, equally between my said children during the term of their natural lives.
“Upon the death of any of my children, I direct that the one-third (%) income of my said estate to which said child was entitled during life, be applied to the use and benefit of the issue, if any, of such deceased child. Said surviving trustee and their successors shall pay over to such issue, if any, or at the election of such trustee, or their successors, expend for the use and benefit of such issues, share and share alike, the income of said one-third (%) of my said estate so set aside.
“I direct that upon the death of my last surviving child, my said estate shall be divided into as many parts as there are grandchildren of mine surviving, and each of said grandchildren shall thereupon be entitled to receive one of such parts.
“I direct that all the trustees appointed or provided for by this will, shall join in every act done as such trustees, and that is provided for in this will, or required by the execution of my wishes as the same are herein expressed.
“Provided, however, that if any one of my said children shall depart this life the two surviving children shall have power to execute this trust; and provided further, if two or more of my said children shall depart this life, or shall refuse to act as trustees any court of competent jurisdiction shall appoint one or more trustees to act in the stead of such deceased, or refusing trustees, so that there shall always be two trustees to act, either partly by my own appointment and partly by the appointment of such court, or wholly by the appointment of such court; and provided, further, that in the event either one of my said children shall refuse to accept such appointment as such trustee, any two of my said children who shall accept such appointment, as trustee, shall have full power to execute this trust.”

It will be seen that by the will, Annie P. Krause, appellee, and. John P. Pryor and Thomas D. Pryor, appellant, were made executors and trustees of the estate of Fannie D. Porter, deceased, and that there shall always be two trustees to act. The evidence shows that all three accepted the trust and qualified.

The testimony is practically uncontradict-ed that Mrs. Porter, several years prior to her death, executed a deed to the property sued for, as a gift to her daughter, which for reasons given, was never put on record, and that after the death of Mrs. Porter it was destroyed by fire; that upon the death of Mrs. Porter, John P. Pryor attended to the matter of probate and inventory of the property, and included the property in controversy in the inventory by mistake; and that it so remained and was treated as property of the estate up to the institution of this suit.

It is clear that, under .the facts in this case, appellee is entitled to recover, unless she is prohibited by law from maintaining this suit while she remains trustee of that for one of the reasons assigned by appellant she is estopped from maintaining this suit.

It is a well-settled proposition of law that an executor in his individual capacity is a stranger to the estate, and may sue to establish his title to property of an estate claimed by the cestui que trust. White v. Shepperd, 16 Tex. 168; Clapp v. Engledow, 72 Tex. 252, 10 S. W. 462; Koppelman v. Koppelman, 94 Tex. 42, 57 S. W. 570; Carroll v. Carroll, 20 Tex. 732; Little v. Birdwell, 21 Tex. 597, 73 Am. Dec. 242.

And it is equally well established that the act of an executor, administrator, or guardian of placing property upon the inventory returned is only prima facie evidence of title in the estate, which may be rebutted by proof that the title was not in the testator.

And that title to lands do not pass by any order of probate court where it was not owned by the deceased. Bradley v. Love, 60 Tex. 473.

Appellant has cited many authorities for his contention that appellee cannot maintain this suit while remaining trustee, and urges the proposition with such apparent earnestness that the distinguishing features of the cases cited by them and the ones cited above as authority for our holding will be dwelt upon at length.

In Iturri v. Whitehead, 22 Tex. 556, the court said:

“It would seem, on general principles, that, after it was made apparent to the court that the plaintiff had been appointed guardian of the defendants, the suit ought to have been dismissed.”

And this excerpt is quoted with approval in Sandoval v. Rosser, 86 Tex. 682, 26 S. W. 933. In order to understand this it is necessary to consider the nature of the action. The suit was brought by Whitehead against Rodriguez as guardian of the Iturri minors for an interest in certain real estate and rents therefrom, which he claimed, under the laws of descent and distribution, through his deceased wife. During the progress of the suit he became guardian of the minors, and was acting as such when the trial was had. In order for Whitehead to take any judgment for the minors he necessarily would be taking it against himself as guardian, and

in order for him to take judgment for the property in his personal right he must get judgment against himself as guardian, and that is just what the rule of law quoted means that he cannot do; but weré he suing the minors in his personal capacity for property to which he alleges they never had title, or, as in this case, in his personal capacity, sued the executors who were legally qualified to represent the minors and the trust estate under the will—i. e., “any two of the trustees may act in the event one should fail or refuse to act in all matters pertaining to the estate”—it is plain that he would not take any judgment against himself as trustee or executor. In other words, the trustee or executor as such will not be permitted to dispute or question the title of the cestui que trust or minor, but in his personal capacity he may establish that he has the title and that the minor or cestui que trust never had title. In other jurisdictions it has been repeatedly held that an executor or administrator can maintain an action against • his co-executor or coadministrator as the case may be. Pringle v. Pringle, 130 Pa. 565, 18 Atl. 1024; Ely v. Ely (N. J.) 50 Atl. 657, affirmed in 64 N. J. Eq. 790, 53 Atl. 1125; Baker v. Baker, 3 Munf. (Va.) 222; Muller v. Muller, 76 N. J. Eq. 429, 79 Atl. 428; Evans v. Evans, 23 N. J. Eq. 71; Black v. Shreeve, 7 N. J. Eq. 440, 457; Petty v. Young, 43 N. J. Eq. 654, 12 Atl. 392; Ransons’ Executors v. Geer, 30 N. J. Eq. 244; Marsh Executors v. Oliver’s Executor, 14 N. J. Eq. 259; Barnhardt v. Smith, 86 N. C. 473; Johnson’s Executors v. Dubel (N. J.) 3 Atl. 705; Stiver v. Stiver, 8 Ohio, 217; Rogers v. Rogers, 75 Hun, 133, 27 N. Y. Supp. 276; Rodes v. Rodes, 24 Grat. (Va.) 256; Huff v. Thrash, 75 Va. 546.

The next question is: Is the appellee es-topped from prosecuting this suit under all the facts and circumstances.

In Little v. Birdwell, supra, it is held that the mere returning of property in the inventory does not estop a person from asserting title to it.

“It is not an estoppel in deed, and, to constitute it an estoppel in pais, the admission it contains must have been acted on by others, who would be prejudiced in consequence, were the party who made the admission permitted to retract it. It must be such as that good faith and fair dealing toward others, who have received it as true, and acted upon it, forbid that it be retracted.”

And we find no evidence in this record that any person has acted upon it to their prejudice.

Appellant further urges that the appel-lee is estopped by her act in joining with the other trustees in the execution of a blanket deed of trust as trustees. As between the parties to the deed in trust and to purchasers under the deed in trust, such would be the legal effect of the act, but the trust estate was not prejudiced by it, and, if it were, the trial court decreed that the portion of the money so borrowed and applied to the construction of the building erected upon the property sued for shall first be paid by appellee before she have title free from this debt, so the estate will not be prejudiced by the judgment entered. Ap-pellee offered to do equity, and the court has by its judgment protected the appellants. Patterson v. Patterson (Civ. App.) 27 S. W. 887; Coddington v. Wells, 59 Tex. 49.

Appellant in No. 192 by several assignments charges that the court erred in taxing as costs against him the fee of $250 allowed the attorney, as guardian ad litem, for representing the minors.

The petition alleged that certain ones of the defendants were minors, without guardian, and appellee, plaintiff, filed her motion to have one appointed. Under such state of facts the compensation to be paid the attorney appointed for services in the case, authorized to be taxed as part of the costs of the suit, are to be deemed costs incurred by the appellee, plaintiff below.

If a judgment be rendered against minors represented by a guardian ad litem, it is proper that the costs be taxed for the services of the guardian as other costs should be taxed against the minors, and collected out of their 'estates, unless there be some equitable consideration which would authorize the court to tax the costs against the successful party. In this case it has been determined that the minors had no interest in the lands sued for, and Thomas Pryor, appellant, had no interest in anything they might have recovered, sc? the fee should have been taxed against the plaintiff (appellee), and the judgment of the lower court is here reformed accordingly. Mitchell v. Mitchell, 80 Tex. 101, 15 S. W. 705; Ashe v. Young, 68 Tex. 123, 3 S. W. 454.

There being no reversible error in the record, the judgment of the lower court will be reformed as indicated and affirmed, and it is so ordered.


source: Caselaw Access Project

author: DUNKLIN, J.

license: Public Domain

text:
    TEXAS STATE BANK OF WALNUT SPRINGS et al. v. FIRST NAT. BANK OF MERIDIAN et al.
    (No. 7880.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    March 28, 1914.
    Rehearing Denied May 23, 1914.)
    1.Banks and Banking (§ 226)-Deposits— Actions — Variance Between Allegations and Proof.
    In an action by one bank against another on a forged check, the petition alleged that the check was drawn on plaintiff bank, while the check in evidence was originally drawn on another bank, but on the face thereof near the top was written the name of plaintiff bank. Held, that there was no fatal variance; there being no question as to, the identity of the check.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 867-870; Dec. Dig. §
    2. Banks and Banking (S 147) — Deposits— Payment of Forged Checks — Rights as Between Banks.
    The rule that a bank is conclusively presumed to know the signature of its depositors and cannot recover for the payment of a forged check to a bona fide purchaser is applicable only where the purchaser is not negligent in failing to discover the forgery.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 438-154; Dec. Dig. § 147.]
    3. Banks and Banking (§ 149) — Deposits— Payment of Forged Check — Rights as Between Banks.
    A bank paid a forged cheek drawn on a bank in another town, and, indorsing it for collection, sent it to plaintiff bank located in the same town with the drawee bank. The drawee refused to pay it because the drawer bad no account with it, whereupon plaintiff, believing the check was meant to be drawn on it, as the drawer had an account with it, paid it. Held that, as the indorsement to plaintiff was for collection only, and did not pass title, the payment by plaintiff was in the nature of an advancement by it as agent for defendant bank, and hence it could recover the amount advanced.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 453, 454; Dec. Dig. § 149.]
    4. Banks and Banking (§ 147) — Following Trust Property or the Proceeds Thereof.
    A bank, after having paid a forged check, could not follow the money paid to the forger into the hands of a third party, who took it in due course of business in good faith upon a valuable consideration.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 438-454; Dec. Dig. § 147.]
    Appeal from Bosque County Court; S. P. Hale, Judge.
    Action by the First National Bank of Meridian and others against the Texas State Bank of Walnut Springs and others, in which defendants filed a plea over against W. A. Lee. From judgments for plaintiffs against defendant bank and for defendant bank against defendant Lee, both defendants appeal.
    Affirmed as to the bank and reversed and remanded as to Lee.
    H. S. Dillard, B. J. Word, J. P. Word, and 5. H. Lumpkin, all of Meridian, for appellants. Cureton & Cureton, of Meridian, and Davis & Cocke, of Waco, for appellees.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   DUNKLIN, J.

Will Gotcher forged the name of W. B. Griffin to a cheek drawn on the Farmers’ State Bank of Meridian, Tex., for $800, payable to N. W. Murffey or bearer. Gotcher representing himself to be Murf-fey, the payee, presented the cheek to B. E. Seale, cashier of the Texas State Bank of Walnut Springs, Tex., to be cashed, telling Seale that he had just sold some mules to W. B. Griffin, and that the check was given for the purchase price of same. He was a stranger to Seale at that time, but represented that he was a neighbor of Griffin. He stated that he desired to open an account with the Texas State Bank of Walnut Springs, and desired $450 in cash on the check, and $350 to be deposited to bis credit in that bank. The cashier complied with this request, and forwarded the check to its correspondent bank at Waco for collection, having first indorsed it as follows:

“Pay to the order of any bank, banker, or trust company. Previous indorsements guaranteed. Texas State Bank of Walnut Springs, Texas.”

The bank who first received it for collection was the Citizens’ National Bank of Waco. That bank forwarded it to the City National Bank of Galveston, who in turn sent it to the First National Bank of Meridian. The bank last named presented it to the drawee, the Farmers’ Guaranty State Bank of Meridian, who refused payment because W. B. Griffin, whose name'appeared as drawer of the check, had no account in that bank. But W. B. Griffin did have an account with the First National Bank of Meridian at that time, and the officers of that bank, acting upon the supposition that W. B. Griffin had intended to draw the check upon that bank, instead of the drawee bank, stamped the name of the First National Bank of Meridian, Tex., on the face of the check just above the name of the drawee bank, then charged it to W. B. Griffin, and forwarded the amount of the check to the Galveston bank. Through the Galveston bank and the Waco bank the amount so collected was paid over to the Walnut Springs bank. Later the First National Bank of Meridian was informed by Griffin that the check was a forgery, and his account thereupon was credited with the amount of the check that had been charged against him. The cashier of the Walnut Springs bank, having been informed of the forgery, paid over to the First National Bank of Meridian $350 which had been placed to the credit of the forger, and which had never been drawn out by him, but refused to pay the balance, $450, which Gotcher had already collected.

Thereupon the First National Bank of Meridian instituted this suit against the Walnut Springs bank to recover such balance. In its petition plaintiff alleged substantially that defendant was guilty of negligence in purchasing the cheek without detecting the forgery, that Gotcher was a stranger to defendant’s cashier at the time, and that the cashier had the means and opportunity of ascertaining whether or not the signature to the check was genuine, and was charged with the duty so to do before purchasing and forwarding the check for collection, and that by his acts in so purchasing, indorsing, and forwarding the check for collection plaintiff was led to believe that the check was genuine, and, acting upon such belief, paid it.

In its answer to plaintiff’s petition, the defendant bank pleaded a general denial, and specially that plaintiff, in cashing the check purporting to have been signed by W. B. Griffin, who was a depositor, of that bank, without discovering the forgery, was guilty of negligence precluding a recovery; and by way of a special refutation of the charge of negligence against it further alleged the circumstances recited above under which defendant bank accepted the check from Gotcher and paid him the $450 and deposited the balance to his credit.

Defendant also filed a plea over against W. A. Lee alleging that Gotcher paid the $450 he had received from defendant bank to Lee. Defendant further alleged that at the time Lee received the money he knew, or had reason to believe, that Gotcher had obtained it from defendant bank by fraud, and by committing forgery, and that Lee had paid no consideration therefor. It was further alleged that after Lee received the money, and while all the means which he possessed for enforcing any demand he held against Gotcher were still available to him,, he was advised by defendant bank of such •forgery; notwithstanding which he refused to pay over the money to defendant bank, and converted it to his own use. A prayer for recovery against Lee was predicated upon the facts so alleged. In addition to a general denial of the facts alleged in the plea over against him, Lee alleged negligence on the part of defendant bank in paying the money to Gotcher, a stranger, without making any effort to discover whether or not the check was genuine; further, that if any part of the-money was paid to him he received it in good faith and in due course of trade, without any notice of the forgery; that he had credited the payment upon a valid debt owing to him by Gotcher, which was well secured by chattel mortgage on stock of value in excess of the amount of money so received; and that it will now be impossible to reinstate such original debt and security.

The testimony showed without controversy that soon after the transaction between-Gotcher and defendant bank Gotcher paid to Lee $450 on a note he owed to Lee, and to secure which he had executed a mortgage-on about 60 head of cattle.

The transaction between Gotcher and defendant bank was through B. E. Seale, its-cashier, who after identifying the forged check, testified as follows:

“The party who presented that check to the-bank passed his name as N. M. Murphree, but afterwards I learned his name was Gocher. Mr. Gocher came into the bank, and I was at the window, and I saw he was a stranger, and introduced myself to him, and he said Murphree-was his name, and that he wanted to open an account with us. I asked him where he was-from, and he said he was a neighbor of W. B. Griffin, and said he had sold Mr. Griffin some-mules for $800. He handed me a check for $800 and said he wanted $450 in cash, and wanted credit for $350. Yes; he had the cheek already written out when he came in the bank. My impression at the time was that the check was drawn on the First National Bank of Meridian. I knew that Mr. Griffin was a customer of the First National Bank of Meridian, while it was my impression at the time it was on the First National Bank of Meridian, but it was listed by Mr. Rushing (defendant’s bookkeeper) as being on the Farmers’ Guaranty State Bank of Meridian. I think there were some marks on the cheek, but I may be mistaken about this. It is my recollection that there was. I paid Gocher $450 in cash, and gave N. M. Murphree credit for $350. I put it in N. M. Murphree’s name on my books. I paid him all this money in currency. I did not ask him for indorsements, because he was opening an account with the bank, and if I had asked him to get somebody to identify him he might have said that he would go to the other bank. As soon as I cashed the check I called Mr. Rudasill up over the telephone and asked him if he would pay the check, and he said he would pay it. Had he said he would not pay the cheek I could have gotten the money from him before he left town. Yes; Gocher and myself were the only men in the bank at the time the check was cashed.”

J. M. Rudasill, president oí plaintiff bank, testified as follows:

“I remember a telephone conversation with Mr. Seale, of the bank of Walnut Springs, about the date the check in controversy was cashed. Mr. Seale called me up and asked me if I would pay W. B. Griffin’s check on our bank for $800, and I told him I would pay a' check for that amount. Yes; our bank did pay a check purporting to'be signed by W. B. Griffin for that amount. Yes; I have seen that check before. No; that is not W. B. Griffin’s signature.”

G. W. Tidwell, active vice president of plaintiff bank, testified with reference to the check:

“I do not know whether I saw this check until after it was paid and the forgery discovered or not. It is a frequent occurrence for checks to come to our bank drawn on other banks. Sometimes this happens two or three times a day, and sometimes not oftener than once or twice a week. We frequently have checks drawn by customers of ours on checks of other banks. We sometimes present these checks to the other banks for collection, and if they do not pay them we decide the check was intended for our bank. Yes; we keep the signatures of some of our customers; if a new man comes in we take bis signature. No; I would not take the signature on this check as the signature of Mr. Griffin. I cannot tell which one of our employés took this check over to the other bank when it came to us. Yes; Mr. Griffin had a deposit in our bank at that time of the payment of the check. I think if I had looked at the signature at the bottom of that check I would have known that it was not W. B. Griffin’s signature.”

The trial judge instructed the jury to return a verdict in favor of the plaintiff against defendant bank for the $450 sued for, with interest, which was done.

Upon the plea over against Lee the jury were instructed as follows:

“You are further instructed that, if you find from a preponderance of the evidence that the defendant Will Gotcher delivered to W. A. Lee any part of the $450 received by Gotcher from the Texas State Bank on the forged check which has been admitted in evidence before you, and if you further believe that Lee knew at the time that said money so paid him, if any, was procured by such forgery, or if you find that any of said money was paid to said Lee by said Gotcher, and that said Lee afterward was advised and learned that it was the proceeds of said check before he had changed1 his relation, to his injury or loss, by the surrender of any security, as creditor of said Gotcher, then you will find for the defendant Texas State Bank against said defendant Lee for such sum as you may find from the evidence to have been so received by said Lee from said Gotcher, with interest at the rate of 6 per cent, per annum thereon from the date you may find it was so received by said Lee.”

A verdict was returned in favor of defendant bank against Lee for $450, with, interest. Defendant bank and defendant Lee both have Appealed.

In plaintiff’s petition it was alleged that the forged cheek was drawn on plaintiff hank, and to the introduction of the cheek in evidence upon the trial defendant bank objected, on the ground that it was at variance with the check alleged by plaintiff, in that, as shown by undisputed testimony, it was drawn on the Farmers’ Guaranty State Bank of Meridian, and not upon the plaintiff, and because, further, after plaintiff received it with indorsements thereon it changed the check by stamping its name upon the face of the check just above the name of the drawee bank, thus making it appear that it was drawn on plaintiff bank. Error has been assigned to the action of the court in overruling the objection. Appended to the bill of exceptions to this ruling is the following statement by the trial judge in approving the bill:

“Allowed with the explanation that at the time the check was offered in evidence it had stamped on the face thereof, near the top, the words, ‘First National Bank of Meridian,’ and that before it was admitted in evidence testimony had been admitted to the effect that when said check was presented to the Texas State Bank it had written in pencil above the words ‘Farmers’ Guaranty State Bank,’ the words, ‘First National Bank,’ and the attorneys of all the parties to the suit had spoken of said check as the forged check, and had it identified by witnesses as the check referred to in their several pleadings. No surprise was claimed by any party on account of variance, and thereupon the said check was admitted in evidence.”

In view of this explanation by the trial judge, and for the further reason that plaintiff’s suit was not upon the check as constituting of itself the cause of action, but was upon all the facts alleged, this assignment is overruled. F. W. & D. G. Ry. Co. v. Harland, 62 S. W. 971; rule 62a (149 S. W. x).

By another assignment appellant bank insists that the court erred in giving a peremptory instruction in plaintiff’s favor, and in not instructing the jury to return a verdict for appellant if they should believe, as established by uncontroverted evidence, that the check was drawn on the Farmers’ Guaranty State Bank of Meridian. By different propositions the reasons presented for sustaining this assignment are substantially as follows: First, the voluntary payment of the check by plaintiff after the drawee had refused to pay it; second, the alleged negligence of the plaintiff in paying the check purporting to be that of its customer W. B. Griffin, whose signature was known to the plaintiff, relying on previous indorsements of the check, and without a close examination of the handwriting of the drawer to determine whether or not same was that of Griffin ; third, the contention that there was no negligence on the part of appellant in failing to require identification of Gotcher .before paying to him the money on the check, which was payable to bearer.

By other assignments the same reasons are urged in support of the contention that the court erred in overruling appellant’s motion for a new trial. In support of the assignments appellant has cited several authorities, a few of which only will be mentioned.

The case of N. W. Nat. Bank v. Bank of Commerce, by the Supreme Court of Missouri, reported in 107 Mo. 402, 17 S. W. 982, was a suit by the Northwestern National Bank of Chicago against the Bank of Commerce of Kansas City. The facts upon which a recovery was sought were as follows: A forged draft on plaintiff purporting to be drawn by a bank in Omaha, one of plaintiff’s customers, in favor of John Whitney, who, as appeared afterwards, forged it, was cashed by .the defendant bank. That bank then forwarded it to Chicago for collection, indorsing it “For collection,” and when presented plaintiff bank paid it. It was held that defendant was a bona fide holder of the draft; that the indorsement “For collection” did not transfer to plaintiff the ownership of it, nor of its proceeds when collected, and that plaintiff could not recover by reason of the general rule, which was announced in the following language:

“The general rule is that the drawee of a bill of exchange or draft is bound to know the handwriting of his customer, the drawer; and, if he pays a bill or draft in the hands of a bona fide holder for value, he is concluded by the act, although the bill or draft turns out to be a forgery. This rule was first announced by Lord Mansfield in Prive v. Neal, 3 Burrows, 1354 (1762), and has been followed and approved by the English courts, and an overwhelming majority of the American courts, including the Supreme Court of the United States and of this state. U. S. Nat. Bank v. National Park Bank [59 Hun, 495] 13 N. Y. Supp. 411; Stout v. Benoist, 39 Mo. 277 [90 Am. Dec. 466]; Bank v. Yost [58 Hun, 606] 11 N. Y. Supp. 862; 4 Harv. Law Rev. 297, and cases cited. See 3 Amer. & Eng. Encyc. Law, 222, where the English and American authorities are collated.”

The case of First National Bank of Rolla v. First National Bank, also by the Supreme Court of Missouri, reported in 141 Mo. App. 719, 125 S. W. 513, was very similar to the case last cited, and in which, as in the former ease, it was held that a bank upon whom a forged check was drawn could not, after honoring it, recover the amount paid to another bank who was a bona fide holder for value. In the decision in that case numerous authorities are discussed showing the different doctrines announced in different jurisdictions. Some of those authorities follow the general rule that the drawee bank is conclusively presumed to know the signatures of its depositors, and in no event will be allowed to recover the amount paid on a cheek forged upon one of such depositors. According to others the drawee may recover of the purchaser of a forged check the amount paid when it can be shown that the purchaser was negligent in failing to discover the forgery at the time he purchased it.

In Farmers’ & Merchants’ Bank v. Bank of Rutherford, by the Supreme Court of Tennessee, reported in 115 Tenn. 64, 88 S. W. 939, 112 Am. St. Rep. 817, it was held that the drawee of a forged cheek who knows the genuine signature of the person whose name is signed thereto is guilty of negligence precluding a recovery of the amount so paid when such payment is made relying upon previous indorsements, and without examining such signature to determine whether or not it is genuine.

In Moody v. National Bank, 19 Tex. Civ. App. 278, 46 S. W. 660, it was held that the drawee of a forged check, after paying the same, could not recover the amount so paid of another bank to whom payment had been made and who was a purchaser thereof for value and who in purchasing the same was guilty of no negligence in failing to discover the forgery.

Appellant bank and appellee bank both invoke the decision of the First National Bank v. Farmers’ & Merchants’ State Bank, by the Court of Civil Appeals for the Third Judicial District of this state, 146 S. W. 1034. The facts of that case were substantially as follows: AT. T. Nichols was a depositor of the Farmers’ & Merchants’ State Bank of Ballinger. His name was forged to a check upon that bapk which was cashed by the First National Bank of ATalnut Springs. After being cashed, and upon demand of the ATalnut Springs bank, the Ballinger bank paid it. The suit was instituted by the latter bank against the ATalnut Springs bank to recover the money so paid to it, and a judgment allowing such a recovery was affirmed on appeal. The check bore the indorsement:

“Pay to the order of any bank or bankers. All previous indorsements guaranteed.”

Such indorsement is practically the same as in the present ease. In the opinion the following finding of fact appears:

“The testimony shows that, if the cashier of the Ballinger bank had exercised proper care, he could have ascertained that the draft was a forgery before that bank paid it, and that he was guilty of negligence in that respect. No testimony was submitted showing how, why, or under what circumstances the defendant bank acquired and paid for the draft, but it was admitted at the trial that it cashed it and paid for it at the time it was drawn.”

In the opinion rendered the court quotes with approval section 464 of Moss on Banks and Banking, in which it is stated that the old doctrine promulgated in 1762 by Chief Justice Mansfield, in effect, that a bank is conclusively presumed to know the signatures of its depositors and cannot recover money paid to the purchaser of a forged check in the name of a depositor, is “fast fading into the misty past, where it belongs.” In accord with the modern rule, as announced by Mr. Moss, the court, in the concluding part of the opinion, uses the following language:

“True it is the plaintiff was guilty of negligence in not ascertaining the forgery before it paid the draft, but it does not appear that such negligence resulted in any injury to. the defendant. In other words, the draft being a forgery, the defendant could not enforce its payment, and had no right to the money received from the plaintiff thereon, and, if compelled to refund it, will be in no worse condition than it was before it received the plaintiff’s money. Such being the case, it is immaterial that the plaintiff was 'negligent, because it does not lie in the defendant’s mouth to say to the plaintiff: ‘While I had no right to the money, I have a right to keep it, because if you had exercised proper care and diligence I would not have obtained it.’ Such doctrine is unsound at law, is contrary to the plain principles of justice, and repugnant to the fundamental rules of equity. If it should be held that the title to property can be divested out of the owner merely by his negligence in permitting it to pass from his possession, a thief might acquire title to property which he had stolen from a negligent owner. Such doctrine cannot be sound.”

See, also, 2 Daniel on Negotiable Instruments, §§ 1665a, 165T; Randolph on Commercial Paper, § 1486. This reasoning appeals to us as sound, and we approve it. Furthermore, it is in line with the decision of our Supreme Court in Rouvant v. S. A. Natl. Bank, 63 Tex. 610, in which the court, after announcing the general rule that a bank will not be heard to assert a mistake as to the signature of one of its customers after it has paid a forged check, proceeds to quote with approval from Natl. Bank of N. A. v. Bangs, 106 Mass. 444, 8 Am. Rep. 349, in which the following language is used:

“In the absence of actual fault or negligence on the part of the drawee, his constructive fault, in not knowing the signature of the drawer and detecting the forgery, will not preclude his recovery from one who has received the money with knowledge of the forgery, or who took the check under circumstances of suspicion without proper precautions, or whose conduct has been such as to mislead the drawee, or to induce him to pay the check without the usual scrutiny or other precautions against mistake or fraud.”

The name of Igell, who was a customer of the bank named in the above case, was forged to a check which was sold to Rouvant. There were some suspicious circumstances in connection with the passing of this check to Rouvant, which were known to him at the time, but which were not communicated to the bank at the time he collected the money on the check. Rouvant was a responsible merchant in the city of San Antonio, and well known to the bank as such. It was held that under those circumstances the bank might well assume that there was no suspicious circumstances ’attending the execution of the check, “and no question as to the identity of the person who drew and signed it; that the loss was attributable to Rouvant’s negligence and upon him it should fall.” To the same effect is First Natl. Bank of Danvers v. First Natl. Bank of Salem, 151 Mass. 280, 24 N. E. 44, 21 Am. St. Rep. 450. For a collation of authorities bearing upon the question now under discussion, see note to People’s Bank v. Franklin Bank, 17 Am. St. Rep. 884.

In the ease of First Natl. Bank of Rolla v. First National Bank, 141 Mo. App. 719, 125 S. W. 513, by the Supreme Court of Missouri, referred to above, the check in controversy bore the following indorsement at the time it was paid by the drawee:

“Indorsement guaranteed. Pay any national or state bank or order.”

It was’held that such an indorsement was for collection only, and did not operate to pass title to the check.

It will be noted that in the authorities discussed above in each instance the suit was by the drawee of the forged check who had paid the same, while in the present case the plaintiff bank was not the drawee of the check. Plaintiff bank had been selected as one of the agencies of the defendant bank to collect the check from the drawee, and if, as held by the authority last cited, the indorsement was for collection only, and did not operate to transfer title of the check to the-plaintiff, then the transaction by the plaintiff bank was essentially an advancement by the plaintiff bank, the collecting agent, to the defendant bank, its principal, of $800, for which it received nothing, and only $350 of the amount so advanced has been repaid to such agent. True, the officers of plaintiff, through a mistake of fact, supposed the check was intended to be drawn upon that bank, and paid the check upon that mistaken belief, but. such mistake of fact did not operate to change the legal relations of the parties relative to the check, especially in view of the urgent insistence by the defendant bank that plaintiff had no right to change the check by stamping its name upon the face-of the check as the drawee. Under such facts we doubt that the old rule announced by Chief Justice Mansfield above noted would be applicable here. But, however that may be, we are of the opinion that the court did not err in instructing a verdict in favor of the plaintiff against the appellant bank.

We next come to the assignments of error presented by appellant W. A. Lee to-the judgment over against him in favor of the defendant bank. One of the assignments is to the refusal of the court to give a peremptory instruction in favor of Lee. As noted above, the court instructed a verdict against Lee in the event of a finding by the jury that he knew of the forgery at the time he received the money from Gotcher, or that afterwards he was advised of the forgery before he changed his relation to his injury or loss by surrendering any former security given him by Gotcher for the debt which Gotcher paid him with the proceeds of the-forged check. There was evidence tending to show that the money paid by Gotcher to Lee was a part of the proceeds received by Gotcher from the defendant bank upon the forged check, and that at the time Lee was-advised of such, forgery he could have successfully asserted the lien theretofore given him by Gotcher to secure the debt. But there was no testimony tending to show that at the time Lee received the money from Gotcher he had reason to believe that the same had been procured by Gotcher by dishonest methods. In fact, there was no testimony tending to show that at the time Lee received the money he knew from whence it came. Some two weeks elapsed after defendant bank paid Gotcher the money before any one discovered the forgery. Here, again, there is some confusion in the authorities. In the case of Holly v. Domestic & F. Missionary Society, by the United States Supreme Court, reported in 180 U. S. 285, 21 Sup. Ct. 395, 45 L. Ed. 531, many authorities are cited with approval announcing the rule substantially as follows:

“The law wisely from the considerations of public policy and convenience, and to give security and certainty to business transactions, adjudges that the possession of money vests a title in the holder as to third persons dealing with him and receiving it in due course of business and in good faith upon a valid consideration. If the consideration is good as between the parties, it is good as to all the world. ‘Money,’ said Lord Mansfield in Miller v. Race (4 Burr. 452), ‘shall never be followed into the hands of a person who bona fide took it in the course of currency and in the way of his business.’ ”

To the same effect is First Natl. Bank of Birmingham v. Gibert, by the Supreme Court of Louisiana, 123 La. 846, 49 South. 593, reported in 25 L. R. A. (N. S.) 631, 131 Am. St. Rep. 382, the decision in which contains a collation of numerous authorities, some announcing the general rule,- and others announcing certain modifications of the same rule under certain circumstances. The evidence conclusively shows that Lee received the money from Gotcher in due course of trade, and that the transaction as between them was binding, and upon the strength of the foregoing authorities we -are of the opinion that the court erred in refusing to give a peremptory instruction in favor of appellant Lee.

For the reasons above noted the judgment in favor of plaintiff bank against defendant bank is affirmed, and the judgment in favor of appellant bank against appellant Lee is reversed, and judgment is here rendered in favor of appellant Lee as against appellant bank’s plea over against him.

Affirmed in part, reversed and rendered in part.

CONNEE, C. J., not sitting.


author: HUPP, C. J.

text:
    DANIEL v. SPAETH.
    (No. 631.)
    (Court of Civil Appeals of Texas. Amarillo.
    June 6, 1914.)
    1. Bills and Notes (§ 497) — Presumptions.
    Where a negotiable instrument is shown to have been indorsed in blank, there is a presumption that it was so indorsed and transferred before maturity.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1448, 1675-1681, 1683-1687; Dec. Dig. § 497.]
    2. Bills and Notes (§ 358) — Tsanseee-—Con-sideration.
    Indebtedness is a sufficient consideration for the transfer of a note.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 913-923, 961; Dec. Dig.
    3. Bills and Notes (§ 358) — Bona Fide Purchasers — Consideration.
    Though plaintiff received a note in payment of a debt which he had lost all hope of collecting, the debt was a valuable consideration for the note, so that he took it free from defenses such as want of consideration, which could have been asserted against the payee.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 913-923, 961; Dec. Dig. § 35S.]
    4. Bills and Notes (§ 497) — Burden or Proof.
    In an action by an indorsee of a note who took it before maturity, -the maker has the burden of proving that the indorsee received it without consideration and that he took it with notice that the consideration therefor had failed.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1448, 1675-1681, 1683-1687; Dec. Dig. § 497.]
    5.Bills and Notes (§ 497) — Actions—Burden or Prooe.
    In an action by an indorsee of a note procured by fraud or based on illegal consideration, the maker first has the burden of proving the fraud or illegality, but upon that proof the indorsee must show that he paid consideration before maturity, whereupon the maker is hound to show that he took the note with knowledge of the fraud or illegality.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1448, 1675-1681, 1683-1687; Dec. Dig. § 497.]
    6.Bills and Notes (§ 497) — Defenses—Notice.
    Where a maker of a note seeks to defeat recovery by an indorsee on the sround that the consideration failed, he must show that the in-dorsee at the time he received the note had notice of failure of consideration.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1448, 1675-1681, 1683-1687; Dec. Dig. § 497.]
    7.Bills and Notes (§ 337) — Defenses—Notice — Failure of Consideration.
    An indorsee of a note who has no actual notice of defenses available by the maker against the payee is not charged with constructive notice of such defenses, unless the circumstances are such that had faith must be presumed in the absence of inquiry.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 818, 856-863; Dec. Dig. § 337.]
    8.Bills and Notes (§ 525) — Actions—Defenses — Evidence.
    In an action by an indorsee of a note, evidence held insufficient to show that he was charged with notice of the failure of consideration for the note.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1832-1839; Dec. Dig. § 625.]
    Appeal from Cooke County Court; R. V. Bell, Judge.

      Action by Russ Daniel against Albert Spaetb, begun in justice’s court and appealed to the county court. Prom a judgment there for defendant, plaintiff appeals.
    Reversed and rendered.
    Garnett & Garnett, of Gainesville, for appellant. Potter, Culp & Culp, of Gainesville, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HUPP, C. J.

This case originated in the justice court of precinct No. 1, Cooke county, Tex., and from a judgment in that court the case was appealed to the county court of that county; in the county court the case was tried before a jury and resulted in a verdict and judgment against appellant, from which appellant appeals.

The appellant, Russ Daniel, sued Albert Spaeth, appellee, on a note dated December 2, 1911, for $130, due six months after date, payable to the order of Weisenborn Manufacturing Company, with interest after date at the rate of 7 per cent, per annum, and providing for 10 per cent, attorneys’ fees; the note was signed by appellee, Albert Spaeth, and was indorsed by Weisenborn Manufacturing Company, per R. L. Leeson, secretary and treasurer.

The appellee answered by general denial and also alleged specially that the note was obtained from him by false and fraudulent statements and representations; that Weis-enborn Manufacturing Company represented that it was the owner of a certain plant hoe, commonly called a cotton chopper, to which it had obtained a patent and that the machine had been tried and tested; that it worked admirably and would do good, efficient work and the work of a dozen hands with ordinary hoes; and that said company also sold appellee the patent right in and to Cooke county, and that appellee was induced to purchase the machine and the patent right by the statements and representations of said company, and to execute the note therefor; that the statements were false; and that the machine was incomplete and would not do the work recommended, and is of no value. He further alleged that the machine was to be delivered by the company not later than the month of February, 1912; that it was not delivered until the 3d of June, 1912, after the cotton chopping was over and too late to use the machine purchased in his own field or to sell to others in Cooke county; that it was material that he have the machine to do his own cotton chopping and as a sample to sell to others if it would do the work; that he would not have executed the notes and bought the machine and patent right if he had not been assured that the machine would be received in time for the cotton season; that the failure to deliver the machine until the 3d day of June deprived appellee of the use of the machine or as a demonstrator for others, so that he could sell the same. After the machine reached appellee, he tried and tested it and found it was wholly deficient or worthless ; that if the appellant acquired the note before maturity he did not acquire it in due course of trade and did not pay a valuable consideration therefor and is not an innocent holder thereof; that the appellant knew of the fraudulent means by which the company had induced appellee to execute the note, and he also knew of the failure of consideration for which said note was given and knew sufficient facts concerning the execution of the note to put a prudent person upon inquiry.

The note sued on was introduced in evidence and is substantially as set out by appellant , in his statement. It is indorsed in blank by the Weisenborn Manufacturing Company, as above set out. The appellee testified he was in Houston December 2, 1911. He there saw a machine, a cotton chopper, and while examining it Mr. Weisenborn, the president of the company, which was going to manufacture the machine, approached ap-pellee and asked him if he (appellee) lived in a cotton country, and, when appellee informed Weisenborn that he did, he invited appellee to his office after dinner.

“When I went back after dinner and went to his office, he got me into buying one of these machines and the right to sell them in Cooke county, Tex. After telling him I lived in North Texas, a cotton country, he told me that I ought to have one of these choppers and that I ought to buy the right to sell them in my county; that I could make more money out of selling these machines than I could off a 1,000-acre farm. He then talked me into buying the sale rights. He said he would send me a sample by the first part of February, 1912. I then executed the contract purchasing the sale right in Cooke county, and one of the machines.”

The appellee introduced the “district agent’s agreement,” by the terms of which the Wei-senborn Manufacturing Company, appointed L. A. Spaeth, district agent, to sell the Wei-senborn plant hoe at wholesale or retail for five years in Cooke county, “and agrees to ship him whenever he may order, one sample machine, at the price of $60 each, f. o. b. the factory, and as many more as he may sell in the above-named territory, at the same price, $60.00 each, to supply sales. He has this day settled by $26.00 cash, 60 da. note, $104.00; 6 mos. note, $130.00, for $260.-00, same being payments in full for said sample machine for contract and privilege of territory named.” This agency contract stipulated the price for which the machines were to be sold and the discount to be allowed appellee, etc. It is stipulated that if 12 months shall lapse without 10 machines being ordered, the company, at its election, terminates the contract and may appoint a new agent If the contract is so ended, the agent might, within 30 days after receiving notice thereof, forward to the factory all sample machines, and 'upon receipt the company would pay him the price he paid for them and, upon payment of such sum, “all rights, liabilities and duties of both parties shall, as to each other, cease, terminate and end.” Then follows the stipulation as to the duties of the agent, etc. This agency contract is dated December 2, 1911. The ap-pellee also introduced letters from G. P. A. Weisenborn, addressed to him, dated respectively December 29, 1911, January 6, January 23, February 5, February 19, and March 15, 1912, in which Weisenborn asked appellee to pay off the two notes one for $104 and one for $130, agreeing to discount them, and in the last letter informed appellee there would be some delay in the delivery of the cotton chopper; that certain improvements were being made which would render it more perfect and shipments would be made in the near future. The appellee also introduced several letters from appellant Russ Daniel, .to himself, in substance as follows. One letter dated April 10, 1912, in which Daniel states:

“I am sure I did not intend any sort of discourtesy much less get mad. The notes I believe are signed unconditionally and as such I have a right to require payment as an innocent purchaser. All know that. I beg to suggest that if there is anything between you and Mr. Wei-senborn or Weisenborn Manufacturing Company it is not a matter for me, but between you and them. I believe your lawyer or^banker, either or both, will so advise you. Please be kind enough to say whether you intend to pay the notes without contest. I need the money. Please consult attorneys or your banker and advise me. I have nothing to do with and know nothing about any failure of contract. You can take that up with parties.”

On May 1, 1912, he wrote:

“I expected to have heard from you to-day in reply to my last. Please write me at once; also a line in care of the Brazos Hotel, Houston, as I rather expect I may have to go there for a few days and I want to have your reply by that time. As I understand, you do not dispute the notes and they are due by you but the company was to ship you a machine which it has not done. Please confirm this. I know from what the bank says of you your agreements are good. I very much prefer to discommode myself rather than you and when it appeared the company had not come up with agreements I preferred to insist on its doing so to enforcing written contracts in the shape of the notes which do not contain any conditions. I will see that you get the machine at once and on receipt of Inv. and B/L, you will remit check to cover $104.00 note and the other one, $130.00 when due. Thanking you for a prompt reply and also if you will write me at Houston, as well as here, a short note, I beg to remain, etc.”

Again on May 9, 1912, he wrote:

“I failed to hear from you at Houston. I hope if you have not replied fully to my last you will do so at once. I am trying to help you out to get the machine and to get the latest improvements. It certainly now appears about perfect. Please write me at once. State if machine was shipped. If not, will see that it is at once.”

There are two other letters, the dates of which are not given, in which he is insisting upon an answer to his letters and upon the payment of the note, and in one he states that:

“I will try to see that you get' the machine at once. This beats courts. Do not desire to be harsh and I am sure you desire to do the right thing.”

The appellee further testified that the machine was to have been shipped February, 1912, but was not shipped until June 3, 1912.

“I tried to use it in my cotton field and it was no account at all. It did not do the work. I tried two half days to use the chopper and it would not do the work. I set it aside. I notified the Union_ Supply Company, which had succeeded the Weisenborn Manufacturing Company, that the machine would not do the work and I did not want it. I never heard from them. I received the letters from Russ Daniel, the plaintiff in this case, before I received the machine. * * * The machine would not do the work Weisenborn said it would.”

At this point appellant introduced, a letter from appellee to Russ Daniel, to his address at Terry, Tex., dated, March 27, 1912, in which appellee acknowledged the receipt of Daniel’s letter, and appellee says therein, “and here is your reply concerning the note due and transferred to you.” He further says he does not know a thing about it. Can’t read the letter (appellant’s), and promises to tell more about it upon hearing further from Daniel. The letter is almost unintelligible.

Geo. Spaeth testified that he saw the machine work; that it was not satisfactory. “It would hit a few licks, then skip, and I did not consider that it did satisfactory work.” Mrs. Albert Spaeth testified her husband tried the machine twice in the field, “and it was not satisfactory to me. It did not chop to suit. It did work in an unsatisfactory manner.”

The appellant testified G. P. A. Weisen-born was indebted to him in the sum of $500 for money loaned him by appellant, which sum was due January 2, 1912. At the time of the loan, Weisenborn, to secure the payment of the $500, delivered $1,000 of the stock of the Weisenborn Manufacturing Company as collateral. At the time of taking the stock, appellant testified he thought the company solvent; that the last of December, 1911, or the first of January, 1912, he became convinced that the stock was of but little value. He then began pressing Weisenborn for payment of bis $500, and was informed by him that the only way Weisenborn could pay was to transfer the note in question and some others, and shortly thereafter did transfer the note to appellant. The note was not then due, and he then had no notice of any fraud, wrong, or failure of consideration in its execution and did not know there was any defense to the note at the time he took it and did not know there was any unfulfilled contract between appel-lee and the manufacturing company. There was nothing on the face of the note to evidence its consideration, but it was a plain, promissory note. At the time he purchased the note there was a letter from a bank in Gainesville attached to the note that Spaeth was perfectly good for his obligations and that he accepted the note as money and considered it as that much money; that he did not have and had never had any interest in the manufacturing company or connection with it.

On cross-examination he testified he thought the stock was worth the money when he obtained it and that Weisenborn was good when he loaned the $500. The loan was made September 18, 1911, and Weisenborn showed him a statement which placed his assets at about $20,000. At that time the manufacturing company was engaged in manufacturing wire fence, picket fence, and fencing machines, and was not then manufacturing cotton choppers. He gave the check to Weisenborn for the $500, on the American National Bank, Beaumont, Tex., which was dated September 18, 1911. He gave the names and amount of other notes by other parties turned over to him by Weisenborn at the time he procured the notes in suit.

“At the time these notes were transferred to me I might have known they were given in payment for cotton chopping machines and the right to sell them in the counties in which the parties lived, but I did not know there was any defect in said choppers or that the contract for their delivery was unfulfilled. I subsequently learned that Weisenborn was selling a patent cotton chopper-. I have not collected any of these notes but am trying to do so and brought suit to collect this one.”

He further testified that all he could collect on his $500 was the notes transferred to him. He testified that he was then in the lumber business and had been for about a year at the town of Terry, and that, when he took the $1,000 stock to secure the $500, he thought it would make the loan safe. He testified that he first thought he got the note in question the latter part of December, 1911, but that upon looking over the correspondence he knew he got the notes not later than the latter part of March, 1912.

The trial court, after instructing, the jury to find for the plaintiff the amount of the note, interest, and attorneys’ fees, unless under subsequent instructions they should find for defendant, gave the following: .

“If you find from the evidence that the plaintiff took the note in controversy before its maturity for a valuable consideration, but at the time of taking said note he had knowledge of the equities and defenses set up by the defendant and that the said note was given for the purchase of the machine called a cotton chopper, and that said machine was worthless for the purpose of chopping cotton and of no value to the defendant, then, in that event, you will find for the defendant.”

The jury returned the following verdict:

“We, the jury, find for the defendant on the grounds that we failed to find that plaintiff, at the time he took the note, gave any valuable consideration for same; said plaintiff considering his claim against the said company at the time worthless.”

The appellant assigns error in refusing his specially requested charge directing a verdict for the plaintiff, and in giving the charge above set out by the court, and in overruling his motion for a new trial, because of the insufficiency of the testimony. Appellant asserts that the evidence shows that he was the purchaser of the note in due course of trade before maturity for a valuable consideration, without notice of appel-lee’s alleged equities. The note in this case is negotiable and was indorsed in blank by the payee therein. The presumption of law is that it was so indorsed and transferred before maturity. The facts are uncontro-verted that appellant was in possession of this note so indorsed before its maturity. The letters of both appellant and appellee evidence that fact. The uncontradicted testimony of appellant is that he took this note in part payment of an indebtedness of $500 due him by Weisenborn. Indebtedness is recognized by our courts as being a sufficient consideration for the transfer of a note, and such transfer would be in due course of trade. Blum v. Loggins, 53 Tex. 136; Liddell v. Crain, 53 Tex. 549; Kauffman v. Robey, 60 Tex. 308, 48 Am. Rep. 264; Greneaux v. Wheeler, 6 Tex. 526. So if it was taken as collateral security to a preexisting debt, or for a concurrent obligation, it would be upon a valuable consideration in due course of trade. Authorities supra; Lane v. Bank, 155 S. W. 307. The jury recite in their verdict that they find for the defendant on the ground that plaintiff did not give “any valuable consideration therefor.” This finding is against the presumption of law, as well as against the un-controverted testimony in this case. They appear to have based such finding on the ground that appellant considered “his claim against said company at the time worthless.” It may be that appellant had lost hope of collecting his debt, but it was nevertheless a debt which he had a right to collect and furnished in law a valuable consideration for the note. The fact that he regarded the debt worthless did not render taking the note out of the due course of business. The evidence in this case shows simply a failure of consideration for the note, if indeed it is sufficient for that purpose. The rule in such case is that the appellant Daniel suing his assignee under a written endorsement, purporting to have been executed prior to maturity of the note, is presumed to have paid a valuable consideration and bought without notice of the defense set up by defendant, and the burden rested upon the latter to show that Daniel did not pay valuable consideration for the note, or if he did, that he had notice of the defense interposed by the defendant. Mulberger v. Morgan, 47 S. W. 379; Herman v. Gunter, 83 Tex. 66, 18 S. W. 428, 29 Am. St. Rep. 632; Rische v. Bank, 84 Tex. 413, 19 S. W. 610; McAlpine v. Finch, 18 Tex. 831; Daniel, Neg. Inst. (5th Ed.) § 814.

If the note was obtained from the maker by fraud or upon illegal consideration, the burden is on the maker to show such fraud or illegality, and, when that is shown, the burden is shifted to the assignee to show that he paid value before maturity, and when the assignee shows such a purchase the burden is then on the maker to show at the time the assignee purchased that he then had notice of such fraud or illegality. Hart v. West, 91 Tex. 184, 42 S. W. 544; Prouty v. Musquiz, 94 Tex. 87, 58 S. W. 721 and 996; Hillebrandt v. Ashworth, 18 Tex. 307; Daniel, Neg. Inst. (5th Ed.) §§ 819, and 848.

If the allegation that the note was obtained through fraudulent representation be sufficient to bring the note within the rule that refers to fl'aud and illegality in obtaining and placing in circulation the note, the evidence in this case falls short of the requirement. The evidence does not show any representation made as to the machine, but at most it shows that the machine proved worthless on trial. The consideration for the transfer of the note is presumed, and the proof, we think, establishes the fact that it was obtained before maturity and in due course of trade as that term is defined and understood by our courts, and upon a valuable consideration. The only question therefore is: Did appellant, at the time of coming into possession of the note, have notice that there was a failure of consideration therefor? The note suggests on its face nothing that would put a party upon notice that there was no consideration for it. It is a plain negotiable note, properly indorsed by the company, and was so indorsed when it came into the hands of appellant. Appellee argues because appellant, after obtaining possession of the note, wrote that the note was signed unconditionally and that he required payment of it as an innocent purchaser, and further that he understood appellee did not dispute the note,- and that the company was to ship a machine, which it had not done, and that he was trying to help appellee to get the machine, and get the latest improvements on the machine and further that he would see that it was shipped; and appellee further contends that because of the testimony of appellant that he might have known the note was given in payment for a cotton chopping machine and for the right to sell, was sufficient notice to appellant of the appellee’s defense. We do not see how any of these facts charged appellant with notice that the consideration for the note had failed. If he knew the note was’ given for the machine, it does not show that appellee would find the sample worthless upon receiving it. The notice must have been received at the time appellant came into possession of the note. The burden was on appellee to show such notice. This we do not think he has done. Mr. Daniel gives the rule in section 796, which appears to be in accord with the authorities in this state and others:

“That the circumstances must be so pointed and emphatic as to amount to proof of mala ¿des in the absence of inquiry or such as to be prima facie inconsistent with any other view than that there is something wrong in the title and thus amount to constructive notice; in other words, we would say that, if the circumstances are of such a character as to create such a distinct and legal presumption and prima facie proof of fraud or some equity between prior parties, it would operate as legal information, as constructive notice to the transferee.”

Such is substantially the rule announced by the Missouri Supreme Court in Horton v. Bayne, 52 Mo. 533. The rule stated by Stor-ey is criticised by Daniel. The rule as given by Storey is quoted in Greneaux v. Wheeler, 6 Tex. 526, but Daniel suggests that that case “follows it as adopting the very contrary precedent.” We think that case more nearly follows the rule given by Daniel, and subsequent cases in this state appear to have so understood. Greneaux v. Wheeler, supra; Mulberger v. Morgan, 47 S. W. 379, 738; Wilson v. Denton, 82 Tex. 531, 18 S. W. 620, 27 Am. St. Rep. 908, and others. The ordinary rule of constructive notice which applies to the purchase of property in general is not applicable in the case of negotiable instruments. There is, we think, nothing in this record which would have charged appellant with bad faith when he took the note as part payment of his indebtedness. Again, a machine had not been delivered sat the time appellant purchased the note. Appellee at that time did not know the machine was worthless. He testified that it was to have been delivered to him in February, 1912, and that it was not delivered until June of that year. The contract which he signed stipulated it should be shipped “whenever he may order one sample machine.” The evidence does not show when he ordered it. If it can be considered that he ordered for February, 1912, there is not a fact showing appellant knew that at the time he purchased the note, when the machine was to be shipped, or that it in fact had not been shipped. All the knowledge he had upon the question appears to have been obtained after he purchased the note. His rights are to be determined by what they were when he purchased the note. In the case of Rische v. Planters, 84 Tex. 413, 19 S. W. 610, the Supreme Court held substantially that the as-signee could not be affected by facts which occurred subsequent to his purchase. Prouty v. Musquiz, 94 Tex. 87, 58 S. W. 721, 976; Lock v. Citizens’ National Bank, 165 S. W. 538; Rohde v. Lafayette Lodge, 15 Tex. 449; Gosling v. Griffin, 85 Tenn. 737, 3 S. W. 642; Trigg v. Saxon, 37 S. W. 567. We think the court was in error in refusing to instruct a verdict for appellant and in submitting the issue to the jury. We believe the appellant should have judgment for the principal, interest, and attorneys’ fees due on the note. The judgment of the trial court will be reversed and here rendered for appellant for the amount sued for.

Reversed and rendered.