author: HALL, J.

text:
    KERBOW et al. v. WOOLDRIDGE et al.
    (No. 918.)
    (Court of Civil Appeals of Texas. Amarillo.
    Feb. 23, 1916.
    On Motion for Rehearing, April 5, 1916.)
    1. Schools and School Distbicts <@=>80 (1) —Contbacts—Statutory Requirements— Necessity of Compliance.
    Under Vernon’s Sayles’ Ann. Civ. iSt. 1914, art. 2904n (Acts 33d Leg. c. 120, § 13), providing that no public school building shall be constructed until the board of trustees shall have first secured a permit from the officer legally authorized to issue it, and article 2904o, providing that no person charged with the duty of disbursing school funds shall pay or authorize the payment of any money for the construction of a school building until the permit has been secured, there can be no recovery by the school trustees or by the contractor and his sureties with reference to a building constructed under a contract for which no payment was procured either on the express contract or on an implied contract arising from the benefits resulting from the construction of the pleading.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 191, 193, 194; Dec. Dig. <@=>80 (1) •]
    2. Schools and School Distbicts <@=>81(2) —Contracts—Sureties—Liability of Ma-terialmen.
    The invalidity of a contract for the construction of a school building, because no permit was issued for it as required by Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 2904n, 2904o, does not defeat the right of one who furnished materials or labor for the construction to recover from the sureties of the contractor on the bond to secure such claims given as required by articles 6394f-6394j.
    [E:d, Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196; Dee. Dig. <@=>81 (2).]
    3. Schools and School Districts <@=>81(2) — Contracts — Bond — Validity — Conformity to Statute.
    Where a bond given by the contractor for a school building under Vernon’s iSayles’ Ann. Civ. St. 1914, arts. 6394f-6394j, requiring the contractor to give the usual penal bond with the additional provision that he will promptly make payments to all persons supplying him with labor or materials, required the contractor to pay the indebtedness incurred by the trustees for labor and materials instead of that incurred by the contractor, the bond, if not a valid statutory bond, was valid as a common-law obligation.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196; Dec. Dig. <@=81(2).}
    4. Schools and School Districts <@=>81 (2) —Contracts—Bonds—Clerical Error.
    In a bond given by a school building contractor which stated that it was for the benefit of those furnishing labor and materials to the contractor, a condition requiring the payment of debts incurred by the school trustees was manifestly a clerical error, and will be construed to secure the payment of debts incurred by a contractor.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196; Dec. Dig. <@=81 (2).]
    5. Principal and Surety <@=>101(2) — Discharge of Surety — Alteration of the Surety Contract — Materiality.
    Where a contract for the construction of a school building, to which was attached a bond securing performance, was changed after some of the sureties had signed by pasting a strip of paper over a provision that the money due under the contract should be paid to the superintendent of building and by him disbursed to the materialmen and laborers, the alteration was material, and discharged the sureties who had theretofore signed.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. § 170; Dec. Dig. <@=> 101(2).]
    6. Principal and Surety <@=>39 — Discharge of Surety — Liability of Cosurety.
    One who signed as surety a bond previously signed by others who were represented to him to be bound thereby when the assured contract had been altered so as to release the liability of the other sureties is not liable on the bond.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 82-85; Dee. Dig. <@=> 39.]
    7. Appeal and Error <@=>1039(13) — Harmless Error — Variance.
    Where the petition declared upon a school building contract with an interlineation, but the contract as offered had a strip of paper pasted over the interlineation one end of which was loose so the writing could be seen, and the other parties had set out the contract in their pleadings in the altered condition, the admission of the contract, if objectionable because of the variance, could not have surprised the other-parties, and the error was therefore harmless.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 4086; Dec. Dig. <©=> 1039(13).]
    8. Alteration of Instruments <@=>27(3)— Documentary Evidence — Altered Instrument-Burden of Proof.
    The burden is on one offering an altered or mutilated writing to explain its condition before it is admissible in evidence.
    [Ed. Note. — For other cases, see Alteration of Instruments, Cent. Dig. §§ 242, 243; Dec. Dig. <@=>27(3).]
    9. IScHOOLS AND SCHOOL DISTRICTS <@=>81(2) —Bond of Contractor — Acceptance.
    Permission by the school trustee to the contractor to take down his forfeit money after the presentation of his bond and to proceed with the work is a sufficient acceptance of the bond.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 396; Dec. Dig. <@=>81(2).]
    10. Schools and School Distriots <@=>81(2) — Bond of Contractor — Discharge of Surety — Rejection of Bond.
    The refusal of school trustees to accept a contractor’s bond when first tendered because the sureties were not sufficient does not terminate the liability of its sureties so as to prevent the contractor from securing other sureties and again presenting the bond for acceptance.
    [Ed. Note. — For other cases, see Schools and' School Districts, Cent. Dig. §§ 195, 196; Dec. Dig. <&wkey;81(2).]
    11. Action <&wkey;47 — Misjoinder — Contract and Tort.
    There is no misjoinder of an action in contract by a materialman against the sureties on a school contractor’s bond for the value of material furnished and an action against the school trustees for tort committed in failing to take the required statutory bond, since suits in contract and tort may be joined when they grow out of the same .transaction.
    [Ed. Note. — For other cases, see Action, Cent. Dig. §§ 469, 470, 472-489; Dec. Dig. &wkey;47.]
    12. Schools and School Districts <&wkey;81(2) —Contracts—Bonds.
    Where a bond given by a school building contractor stated that it was for the benefit of all persons who might furnish labor and material, and provided that it should be satisfied if the contractor should complete the building free of all mechanics’ liens, one who furnished material can recover on the bond, though there could be no mechanics’ liens on a school building.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196; Dec. Dig. &wkey;81(2).]
    On Motion for Rehearing.
    13. Schools and School Districts <&wkey;86(2) — Contracts — Action — Presumption — Compliance with Statute.
    In a suit on a contract for the construction of a school building, compliance with Vernon’s Sayles’ Ann. Civ. St. art. 2904n, requiring a. permit to be secured before a contract for the erection of a school is entered into, must be affirmatively shown; it cannot be presumed in view of article 2904o, prohibiting every disbursing officer from paying out any portion of the funds for the construction of the building until the permit has been secured, since the court should not order an officer to do what may be contrary to the law.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 203-205; Dec. Dig. &wkey;>86(2).]
    14. Appeal and Error <&wkey;708 — Questions Presented — Facts Outside the Record.
    The Court of Civil Appeals cannot consider facts stated in the motion for rehearing, but not shown by the record.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 2948; Dec. Dig. &wkey;>708.] ■
    Appeal from District Court, Donley County; Hugh L. Umphres, Judge.
    Action by Mrs. M. A. Wooldridge, as executrix of the will of J. C. Wooldridge, deceased, against H. C. Kerbow and others, in which R. B. Gatlin filed plea in intervention. From the judgment, defendants appeal.
    Reversed and remanded, and motion for rehearing overruled.
    Simpson & Steed and Harwood Beville, all of Clarendon, for appellants. H. B. White and A. T. Cole, both of Clarendon, R. V. King, of Hedley, E. F. Ritchey, of Clarendon, and Davis & Davis, of Gainesville, for appel-lees.
   HALL, J.

Appellee, as executrix of the will of her deceased husband, by whom this suit was originally instituted, made herself a party to the action, and by a second amended original petition alleged that about the 1st of September, 1913, J. C. Wooldridge, deceased, was the owner of a wholesale and retail lumber yard in Hedley, Tex., and engaged in the sale of lumber and building material; that one of the defendants, E. O. Barnes, was a mechanic and contractor; that E. L. Kennedy, Clark Cook, and William Mace were the duly qualified trustees of common school district No. 2, Donley county, Tex.; that said trustees were desirous of erecting a public school building within said district; that bonds in the sum of $6,000 had previously been voted for that purpose; that said bonds had been sold, and the proceeds thereof were in the hands of said trustees ; that the trustees entered into a written contract with E. O. Barnes, a copy of which was attached to the pleading, whereby said Barnes agreed to erect a school building for said district at a price of $5,600; that in order to secure the performance of said contract upon his part Barnes executed a bond in the sum of $2,500, a coi>y of which was also attached to the pleadings; that said bond inured to the benefit of those who might furnish labor or material in the construction of said building, and was conditioned that the defendant Barnes should pay for all labor and material used in the construction of said building, and that in the event of his failure to do so the laborers and materialmen had a right of action thereon; that the debt for the material furnished by plaintiff was covered by the terms of said bond; said bond was signed by H. O. Ker-bow, A. M. Beville, P. A. Buntin, L. O. Barnes, and H. C. Brumley; that by so doing the appellants, as sureties on said bond, became liable to plaintiff in the amount of his debt; that in carrying out his contract the defendant E. O. Barnes purchased from plaintiff a large amount of building material, to wit, about $2,007.97, an itemized sworn statement of which was attached to the pleadings, which said amount was entitled to certain credits, reducing the balance due to $1,738.57; that the defendant E. O. Barnes worked on said building until about the 18th of December, 1913, on which date he abandoned the work, but that the material shown in the account had been purchased by him before such abandonment; that said bond was executed under the general laws of the Thirty-Third Legislature (chapter 99), and that in accordance with the provisions of said act and the breach of the contract by E. O. Barnes plaintiff had instituted this suit against the contractor, sureties on his bond, the school district, and the trustees thereof, for the recovery of his debt; that by reason of the fact of the erection of the school building and the use and enjoyment thereof by the patrons of the district that said dis-triet and trustees were legally entitled to pay Mm Ms debt, and that the material had been purchased by the trustees, together with the contractor.

The appellants the sureties on the bond filed their amended original answer, which contained a general and seventeen special exceptions, a denial that appellants were liable to plaintiff as sureties, and contested the justice of the account against them. It is further alleged that said material was not sold to the trustees or to the school district, but to the contractor, E. O. Barnes, and his subcontractor, S. H. Bolling.

Appellants Beville, Buntin, B. O. Barnes, and Brumley admitted by way of special answer that they had signed the bond, but alleged that after their signatures had been secured the defendant trustees, as co-obligees in said bond, rejected it when tendered to them, because of its insufficiency, and released them from all liability thereon, demanding of the contractor a bond signed by a surety company on pain of forfeiting a check for $200 previously deposited by the contractor ; that the said E. O. Barnes never procured a surety company bond; that appellants Beville, Bunting, L. 0. Barnes, and Brumley were never afterwards informed that said trustees had rescinded their action in refusing the bond and that they had later approved the same; that said trustees never did thereafter in fact approve said bond; that after they had signed the bond the trustees, acting through their agents, W. I. Mills and B. W. Kieran, who were the superintendents of construction of said building, took the contract which the bond they had given secured, and which said contract was printed on the reverse side of the same sheet of paper containing said bond, both of which instruments were to be considered together, and made a material alteration in the contract by pasting a piece of paper over a clause written into the face thereof, which clause provided that the 80 per cent, of the money due every two weeks on estimates should be paid to W. I. Mills, and by him disbursed; that they would not have signed the bond without said clause being contained therein; that this alteration was made before the contractor, Barnes, had incurred plaintiff’s debt.

Appellant Kerbow admitted that he signed the bond set out in the plaintiff’s petition, and that the alteration last mentioned had been made therein when he executed it, but that at the time same was presented to him it bore the signatures of his codefendant sureties, and that the school trustees, acting through Mills and Kieran, as their agents, and the contractor, Barnes, represented to him that the other sureties were bound thereon, when said parties knew that the school trustees had rejected the bond with the other sureties, and had released them by materially altering the instrument; that this occurred before the plaintiff’s debt had been incurred.

The appellants Beville, Buntin, L. O. Barnes, and Brumley further alleged that when they signed the bond the contract which it was given to secure contained a clause providng that the money due in the construction of said building should be paid to W. I. Mills, and by him disbursed, and he should be superintendent of construction; that in violation of said provision the trustees discharged Mills, and refused to pay any money into his hands, but paid the moneys due for work on the building directly to the contractor, E. O. Bames, and to the subcontractor, S. H. Bolling; that this occurred before the major portion of plaintiff’s debt had been incurred; and that said four appellants were therefore released.

All five of the sureties further alleged that the contract between the school district and E. O. Barnes provided that the building should be completed within 60 days from the time notice was served to proceed with the work, the time to be extended only on the happening of certain contingencies mentioned in the contract; that in violation of said clause in said contract, and without the happening of any of the contingencies mentioned therein, the trustees extended the time for the completion of the building more than 2 months; that said extension contract was made between the trustees and E. O. Bames, the consideration for which was the promise on the part of the trustees not to charge the contractor, Bames, with the damages provided in the contract for delay and the agreement on the part of the contractor, Barnes, to labor on the building after the contract time for the completion thereof had expired; that a large part of the plamtiff’s debt was incurred after the extension was granted; that the contract which the bond was given to secure provided that no portion of the work should be sublet without the written consent of the architect; that in violation of said clause, and without obtaining the consent of the architect, the school district and its trastees permitted the contractor, Barnes, to sublet a large portion of the work on the building to one S. H. Bolling; that the subletting was done without the knowledge of appellants, but with the knowledge of the original plaintiff, J. C. Wooldridge; that the plaintiff sold to S. H. Bolling $826. 77 worth of the material for the value of wMch suit was brought, knowing that Bolling was a subcontractor in violation of the terms of the contract; hence appellants were released; that the trustees refused to pay to the contractor, E. O. Barnes, or his superintendent, W. I. Mills, the money due upon certain estimates regularly allowed by the superintendent of construction, and on other occasions refused to allow estimates when the same were due, so that the contractor, Bames, was forced to abandon work on said building, by reason of which wrongs these appellants asked Judgment over against the school trustees for the amount of any judgment plaintiff might isecure against them; that, when the contractor, Barnes, abandoned work on the building, there was about .$867.35 worth of the material which had been furnished by plaintiff lying on the ground near the building, and that plaintiff could have recovered the same by the use of any diligence, thus saving himself from loss to that extent, but that he negligently failed to do so, and permitted the material to be worked into the building by one Chism, who completed the work after the contractor, Barnes, defaulted; hence they were not liable for this sum; that under the terms of the bond they were bound, if at all, as sureties, to pay only such debts as might be incurred by the school trustees in the construction of the building, and alleged that the debt of plaintiff was not incurred by the school trustees, but by the contractor, E. O. Barnes, and that even he was not bound to pay for same, but was only required to provide and furnish material; that the school district and its trustees overpaid on the work as it progressed during the construction of the building, in violation of the terms of the contract, thus releasing appellants.

R. B. Gatlin filed a plea in intervention, alleging that he was interested in the subject-matter; * that he was 'a laborer on the building, together with a large number of other persons named in his pleading; that he and the others had been hired by the contractor, E. O. Barnes, who owed intervener, .and the other parties named in the plea, the various sums shown in sworn accounts attached to the plea for labor done on the building; that said Barnes and the sureties ■ on his bond were obligated to pay him all the sums set forth in his plea, alleging that he had purchased all of said accounts from the original creditors.

Appellants replied to the plea of intervention by general and special exceptions, general denial, and specially answered that they were bound, if at all, on the bond to pay debts incurred by the trustees only, and that the intervener’s debt was incurred by the contractor, Barnes, and not by the trustees; that $173.50 of the claim of one Geo. Ryan sued for by the intervener was for money loaned by Ryan to the contractor, Barnes, so they could not be liable therefor.

The defendants the school trustees filed a plea of misjoinder of parties and of causes of action, because the plaintiff was seeking to hold the sureties liable upon a contract and the trustees liable because of a tort committed in failing to take the bond required by law and in breaching the same after it was taken. By way of cross-action the trustees alleged that common school district No. 2 of Donley county was in need of a new school building, for which bonds in the sum of $6,000 had been voted; that they let ;the contract for the erection of the building to E. O. Barnes; that he was to complete the same within 60 days from the time notice was served upon him to proceed with the work; that his contract, a copy of which was attached to their cross-action, provided that, if he failed to finish the work within the contract time, he should pay to said trustees as liquidated damages the sum of $10 per day for each day’s delay; that as a prerequisite to the taking effect of said contract they required the said Barnes to execute a bond to them in the sum of $2,500, signed by the appellants' Kerbow, Beville, Buntin, B. C. Barnes, and Brumley, whereby the sureties upon said bond became liable to said trustees for any sums they might be forced to pay out above the contract price and for all damages occasioned 'by delay; that the said E. O. Barnes did not complete the building within the time, and abandoned the work about the 18th day of December, 1913; that about the 27th day of December, 1913, they notified the sureties of his default; that they then took possession of the building and of the material on hand, and as soon as possible advertised for bids to complete the building; that the smallest bid received was $2,904.25, which was $223.93 more than the contract price, for which amount they asked judgment against the sureties on the bond. It is further alleged that by reason of the default of the contract of E. O. Barnes the trustees were deprived of the building 135 days' over the contract time, and asked judgment against appellants for the further sum of $1,350, being $10 per day for said delay, which they alleged was a reasonable damage to the school district; that some person unknown to them committed spoliation upon the contract made between them and E. O. Barnes by writing into the face of the same after it had been signed by them as trustees, and by Bames, the following : “The eighty per cent, as allowed by the superintendent, W. I. Mills, shall be paid to the said W. I. Mills, who .will disburse the same to all who have furnished labor and material equally”- — alleging that said clause was no part of said contract; that when said contract .and bond was finally delivered to them, accepted, and approved that a piece of paper had been pasted over said clause, leaving the same in its natural state. They prayed that the contract be reformed so as to read as originally executed, and that said clause be stricken out of the same.

The bondsmen, by first amended original answer to the cross-action of the trustees against them and to the plea of intervention, after certain special exceptions, pleaded a contract and agreement made upon a sufficient consideration between the trustees and E. O. Barnes, by which they agreed not to charge him with overtime used in the work on the building; that the trustees further knowingly permitted the contractor to'sublet a portion of the work in violation of -the contract; that they paid the money due for the work on the building to E. O. Barnes and S. H. Bolling, instead of W. I. Mills; that after they had all signed the bond, except appellant Kerbow, the trustees refused to accept the same and rejected it; that the trustees, through their agents, materially altered the contract and bond by striking out the clause which provided that the money should be paid to W. I. Mills. Appellant bondsman Kerbow alleged that said trustees, through their agents, perpetrated a fraud upon him in procuring him to sign the bond by representing that the other appellants were bound thereon, when they knew the bond had been rejected; that they altered the bond and contract, thus releasing them; that the $200 attorney’s fees sued for by said trustees and the damages for overtime were not included in the terms of suretyship in said bond; that said trustees failed to give the sureties any notice of the default of the contractor until about two months had expired. They denied that the trustees let the contract for the completion of the building by a public bid and for the least sum obtainable. Estoppel against the trustees in the recovery of $223 is set up, alleging that the trustees overpaid the work to E. O. Barnes and S. H. Bolling in violation of the contract, and that they refused to pay E. O. Barnes and Mills the money due upon certain estimates made by the superintendent of said building, and refused to permit certain estimates to be made when they were due, and by so doing prevented the contractor, Barnes, from completing the building, which he would have done if not prevented by said.trustees. The prayer is for judgment over against the trustees for the amount of any judgment that might be taken because of their wrong.

The plaintiff, Mrs. Wooldridge, by first supplemental petition, among other exceptions and pleas, alleged that in the sale of the materials to the contractor, Barnes, her deceased husband relied upon the school trustees having required such a bond in conformity of law; that such trustees informed plaintiff’s agent before the sale was made that such a bond had been taken, and said trustees personally guaranteed to plaintiff the payment of his debt in full.

A jury was impaneled to try the issues. Upon the close of the testimony the trial judge withdrew the issues from the jury, and instructed a verdict upon the bond against E. O. Barnes, as principal, and his sureties, in favor of the plaintiff in the sum of $1,889.45, and in favor of common school district No. 2 against the principal and sureties on the bond in the sum of $1,572, and in favor of the intervener, Gatlin, against the same parties for the sum of $352.90, and in favor of Gatlin against E. O. Barnes alone in the sum of $184.50, and in favor of the defendants the trustees, Kennedy, Mace, and Cook, as against all parties. Upon the return of the verdict a judgment was entered in conformity therewith, the judgment providing that *the claim of the common school district, amounting to $1,573, should be first paid from the proceeds of the judgment, and that the plaintiff and inter-vener, Gatlin, should participate in any amount remaining.

Plaintiff filed a motion to reform the judgment. The motion was granted, and the court gave the school district priority in the judgment for the sum of $223 only, being the amount which the district was forced to pay to complete the building over and above the contract price. The judgment as reformed further provides that plaintiff and intervener, Gatlin, should next be paid the amount of their claims proportionately, and, if any sum remained, that it should be applied to the balance due the school district.

We are confronted with fundamental error upon the very threshold of the casein the formation of the contract between the trustee and E. O. Barnes the parties have overlooked Acts 1913, e. 120, p. 244, which is incorporated in Vernon’s Say les’ Civil Statutes as chapter 19A, tit. 48. This act was operative when the building in question was constructed. It declares in detail what shall be done in the construction of public school buildings with reference, to providing light, heat, ventilation, etc., for the pupils. Vernon’s Sayles’ Civil Statutes, art. 2904n (section 13 of the act), provides that no public school building shall be constructed in this state at an expense of more than $400 until the board of trustees of the district in which the work is to be done shall have first secured a school building permit from the officer legally authorized to issue it certifying that the plans and specifications of the proposed building conform to hygienic, sanitary, and protective regulations established by this act for public school buildings in Texas. The article further provides that for buildings in common school districts the county superintendent of public instruction of the county in which the school is to be located is required to examine the plans for such building and to grant the permit. Article 2994o provides that no person charged with the duty of disbursing school funds or of authorizing disbursement of school funds in the state shall pay or authorize the payment of any vouchers or in any other manner pay out any sum of public money for the construction of any school building at an expense of more than $400 until such permit has been secured, and that any disbursing officer failing to observe the provisions of the act shall be held liable for such amounts so paid out.

In Bone v. Black, 174 S. W. 971, this court held that under the provisions of the act a contract for the erection of a school building could not be enforced where it did not appear that a permit had been issued by the proper officer. While in that case the building had not been constructed, the rights of the contracting parties are in no degree altered because of the erection of the building and the consequential benefits' to the district. The failure of the parties to contract strictly in accordance with the terms of the statute renders the contract itself void and precludes a recovery upon an implied contract. Section 51 of the drainage act of 1907 (Acts 30th Leg. e. 40) provides that the commissioners may employ counsel to represent the district “upon such terms and for such fees as may be agreed upon by them and approved by the county judge.” Matagorda County Drainage District v. Gaines & Corbett, 140 S. W. 370, is a case in which the appellees, as attorneys, sought to recover fees alleged to be due them from the drainage district for professional services rendered the commissioners. They recovered in the lower court, but upon appeal Judge Fly reversed and rendered the judgment, saying:

“It was clearly the intent of the Legislature to require as an essential the approval of the chief officer of the county. The official watchman of the county treasury undoubtedly by this requirement was made to safeguard and protect the fund that was raised by taxation of the inhabitants of a district, and to render more difficult the making of contracts which might squander a fund raised for the public good. The authority to contract for the services of attorneys is given by section 51 alone to drainage commissioners, and to that we must look to ascertain the mode of exercising the power. The law requires the approval of the county judge of contracts made by drainage commissioners for legal services, just as it requires the approval of contracts for canals and other improvements by the county judge. It is the rule, stated by JDillon in his work on Municipal Corporations (5th Ed.) § 783, and fortified by numerous authorities, that when the mode of contracting is specially and plainly prescribed and limited, that mode is exclusive, and must be pursued, or the contract will not bind the corporation. The rule is a salutary one,-upholding the legislative checks and restraints put upon the officers of municipal corporations, and strictly construing the powers conferred upon them in the disbursement of public funds. To hold that a contract made in a different mode from the exclusive one prescribed by the Legislature can be enforced would be to nullify and destroy the law, and to set up judicial discretion or judicial pleasure instead thereof. Experience has taught how prone municipal officers are to squander and dissipate public funds, even when held to the strict letter of their warrant of authority, and, if requirements of the statute which the Legislature has deemed necessary can be set aside by a court, the last safeguard has been destroyed, and the public left at the mercy of improvident or unscrupulous servants. Drainage commissioners are the agents of their respective districts in attending to and superintending its affairs; but, when debts are to be incurred and money expended, the law provides that they cannot act without the approval of the county judge. The mode of incurring liabilities is prescribed by statute, and as said by Chief Justice Roberts in Ferguson v. Halsell, 47 Tex. 421: ‘The prescribing of a mode of exercising a power by such subordinate agencies of the government has often been held to be a restriction to that mode.’ In the case of Bryan v. Page,'51 Tex. 532, 32 Am. Rep. 637, a suit was instituted to recover of the city of Bryan the reasonable value of legal services rendered under employment by the mayor, and the court, in reversing and rendering judgment for the city, held: ‘The charter gave the power to employ legal counsel, but prescribed that the power be exercised by, or at all events in accordance with, an ordinance of the common council. The charter, the source of all the power of the mayor or council over the subject, having limited the mode of its exercise; they could not in a different mode make a valid contract; nor could they by any subsequent approval or conduct impart validity to such contract.’ To the same effect is Noel v. City of San Antonio, 11 Tex. Civ. App. 580, 33 S. W. 263. The authorities cited, as well as various others, hold that, where the power of contracting is limited to a certain mode, the officers of a municipal corporation cannot in a different mode make a valid contract, nor can they by any subsequent approval or conduct vitalize such contract, nor would the law imply such contract. * * * As said by the Court of Appeals of New York, in Smith v. City of Newburgh, 77 N. X. 131: ‘An absolute excess of authority by the officers of a corporation in violation of law cannot be upheld; and, when the officers of such a body fail to pursue the strict requirements of a statutory enactment under which they are acting, the corporation is not bound in such cases. The statute must be strictly followed, and a person who deals with a municipal body is obliged to see that its charter has been fully complied with. When this is not done, no subsequent act can make the contract effective.’ ”

See also McDonald v. New York, 68 N. Y. 23, 23 Am. Rep. 144; Peck v. City of Hempstead, 27 Tex. Civ. App. 80, 65 S. W. 653; 10 R. C. L. p. 708, § 36; Id., p. 801, § 112.

In Hitchcock v. Galveston, 96 U. S. 341, 24 L. Ed. 659, the following language from State Board v. Citizens’ Ry. Co., 47 Ind. 407, 17 Am. Rep. 702, is approved:

"Although there may be a defect of power in a corporation to make a contract, yet, if a contract made by it is not in violation of its charter, or of any statute prohibiting it, and the corporation has by its promise induced a party relying on the promise and in execution of the contract to expend money and perform his part thereof, the corporation is liable on the contract.”

A pleading based upon a contract which must be executed in accordance with the terms of the statute must allege facts showing compliance with its requirements in order to be good as against a general demurrer. Crowell Independent School District v. First National Bank of Benjamin, 163 &. W. 339; McCollum v. Adams, 110 S. W. 526. In the note to McCormick v. Niles, 27 L. R. A. (N. S.) p. 1120, the law applicable to the liability of municipal corporations for benefits received under contracts violative of statutory restrictions is stated as follows:

“By the great weight of authority where by statute the power of a municipality or other public corporation to make a contract is limited to. a certain manner and under certain circumstances, and any other manner of entering into a contract, agreement, or obligation is expressly or impliedly forbidden, no implied liability can arise against the municipality for benefits received under a contract within the scope of such statute and violative thereof.”

It follows that neither the school district nor the contractor and his sureties can re-coyer anything from the other by reason of the written contract or npon an implied contract.

Appellants claim that the bond in this case was executed under Acts of the Legislature of 1913, c. 99, (Vernon’s Sayles’ Civil Statutes, arts. 6394f to 6394j, inclusive). A comparison of this act with Act Cong, of Eeb. 24, 1905, c. 778, 33 Stat. 811 (U. S. Comp. St. 1913, § 6923), shows that they are practically identical, and that the Texas statute has been passed after the federal statute. Investigation shows that several of the states have adopted the provisions of the federal statute, and that the purpose of such enactment in all cases is to assure the payment of debts incurred in the construction of public buildings to mechanics and materialmen. Under the law as it existed prior to the enactment of- this statute, mechanics and materialmen c-ould acquire no lien upon public buildings. Although the contract, in our opinion, as heretofore stated, is void, it does not follow that the obligation resting upon the sureties in the contractor’s bond is discharged ; on the contrary, the weight of authority is that the invalidity of the building contract in no way affects the liability of the sureties upon the contractor’s bond for the value of materials and labor furnished the contractor in the prosecution of the public work. 4 Elliott on Contracts, § 3543; Knight & Jillson Co. v. Castle, 27 L. R. A. (N. S.) 597, note 13; Bell v. Kirkland, 102 Minn. 213, 113 N. W. 271, 13 L. R. A. (N. S.) 793 and note, 120 Am. St. Rep. 621.

The bond upon which this suit is based is substantially as follows:

“Know all men by those presents that we, E. O. Barnes and the other subscribers hereto, of the city of -, county of Donley, state of Texas, are held and firmly bound unto the trustees of common school district No. 2 of the city of-, county of Donley, state of Texas, as well as to all persons who may furnish labor or material on the contract hereinbefore mentioned, in the sum of twenty-five hundred ($2,500.-00) dollars, lawful money of the United States of America, to be paid to the said trustees and to said parties who may furnish labor or material, their executors, administrators, or assigns, for which payment well and truly to be made we bind ourselves, one and each of our heirs, executors, and administrators, jointly and severally firmly by these presents. Sealed with our hands. Dated this 26th day of July, 1913. The condition of this obligation is such that, if the above-bóunden E. O. Barnes, his executors, administrators, or assigns, shall in all things stand to and abide by and well and truly keep and perform the covenants, conditions, and agreements in the above-mentioned contract entered into by and between the said B. O. Barnes and the said trustees, dated on the 26th day of July, 1913, for the construction of the work or works on the lot mentioned in the foregoing contract, and shall duly and promptly pay and discharge all indebtedness that may be incurred by the said trustees in carrying out the said contract, and complete the same free of all mechanics’ liens, and shall truly keep and perform the covenants, conditions, and. agreements in said contract and in the within instrument contained on his part to be kept and performed, at the time and in the manner and form therein specified, as well as all costs, including attorney’s fees, in enforcing the payment and collection of any and all indebtedness incurred by said trustees in carrying out the said contract, then the above obligation shall be void, else to remain in full force and virtue. This bond is made for the use and benefit of all persons who may furnish labor or material on the hereinbe-fore mentioned contract, according to the provisions of law in such cases made and provided, and may be sued upon by them as if executed to them in proper person.

“In testimony whereof,” etc.

The statute above mentioned provides that the contractor shall execute the usual penal bond, with good and sufficient sureties, with the additional obligation that such contractor shall promptly make payments to all persons supplying him with labor and material in the prosecution of the work provided for in said contract. The bond is in substantial compliance with this requirement of the statute in obligating the contractor to duly and promptly pay and discharge all indebtedness that may be incurred by the said trustees in carrying out the said contract, and to complete the same free of all mechanics’ liens, unless it be that it binds the sureties to pay the indebtedness incurred by the trustees instead of indebtedness incurred by the contractor. There is considerable contention on the part of the parties as to whether this is a statutory bond or merely a common-law obligation. We incline to the opinion that in its essential parts it is in conformity with the requirements of the statute, but in any event, if liability has otherwise accrued under it, so far as its form is concerned,' it would be good as a common-law bond. The right of action arising from a breach of this bond is one of common-law liability, and does not depend upon the existence of the statute. Even without the statute, or without a bond of any kind, the materialmen and laborers would be entitled to recover against Barnes upon his common-law liability. State v. Teague, 50 Tex. Civ. App. 535, 111 S. W. 234; Knight & Jillson Co. v. Castle, supra, 27 L. R. A. (N. S.) 581, note 6; Dillon, Municipal Corporations (5th Ed.) § 830.

Under several assignments of error appellants contend that, because the bond provides that it shall be void if payment is made for all material and labor debts incurred by the school trustees, and the undisputed proof shows the debts were incurred by the contractor, and not by the trustees, no liability attaches to the sureties. The question was raised in the court below by exceptions, plea, special charge, and objections to evidence. Ordinarily such a bond is a dual obligation (Equitable Surety Co. v. United States, to Use of McMillan & Son, 234 U. S. 448, 34 Sup. Ct. 803, 58 L. Ed. 1394), evidencing the terms of an undertaking between the trustees, on the one hand, and the contractor and his sureties, on the other. The original contract being void, the obligation to the trustees is a nullity. It also constitutes an obligation between the latter and all persons who may furnish labor and material in the construction of the building. Considered in this aspect, it must he liberally construed. Equitable Surety Co. v. United States, supra. The contract referred to in the bond is the building contract, which the evidence shows was written upon the same paper, and must be construed in connection with the bond. By referring to the contract it will be seen that th'e contractor covenanted and agreed with the trustees of said school district that he would provide and furnish labor and materials of such kind, quality, and description as might be proper and sufficient for completing and finishing all the work mentioned in the contract. It is clear from the record that the use of the word “trustees” in th'e bond, instead of the word “contractor,” is a clerical error, and a mistake of the scrivener. The rule is that such mistakes do not have the effect of releasing the parties from the contract, but the court will correct the mistake and construe the writing which evidently does not speak the original intention of the parties so as to make it conform thereto. 1 Elliott on Contracts, § 809; 2 Elliott on Contracts, § 966; 3 Elliott on Contracts, §§ 2367, 2378.

Th'e next contention urged is that, the contract having been altered in a material term, the effect of it is to release the sureties upon the bond from all liability. The facts are that after E. O. Barnes had been awarded the contract, and its terms had been reduced to writing and signed by him and the trustees, the contractor then took the instrument and endeavored to obtain sureties upon his bond satisfactory to the trustees; that he approached A. M. Beville, who consented to become a surety, but before signing the bond wrote into that part of the contract which provides that the trustees shall pay the contractor on certificates of the superintendent from time to time as the work progressed SO per cent, of the estimated value of the work this clause:

“And the 80 per cent., as allowed by the superintendent, W. I. Mills, shall be paid to the said W. I. Mills, who will disburse the same to all who have -furnished labor or material equally.”

L. O. Barnes, the father of the contractor, H. O. Brumley, and P. A. Buntin, signed the bond while the contract had in it the words inserted by Beville as above stated; Buntin signing in pencil. The trustees declined to accept the bond for the reason that the sureties were not considered sufficient. The contractor then contemplated executing a bond with a surety company as his surety, but, being informed that the clause inserted by Beville in the contract would militate against his obtaining a bond signed by a surety company, he pasted a paper over the clause, effectually concealing the words. Eailing to obtain the surety company upon the bond, H. O. Kerbow signed it as an additional surety, knowing nothing of the insertion of the words in the contract by Beville, or that they had been concealed by pasting the piece of paper over them. At this time Buntin again signed it with ink. When Kerbow executed the bond with the clause inserted by Beville covered up, the trustees, considering it good for the amount, accepted it, knowing that Be-ville had interlined it, and that Barnes had pasted paper over the clause inserted.

When Beville made the interlineation in the contract neither the principal, Barnes, nor any of the sureties had executed the bond,, though the contract had been signed by the trustees. An alteration of the contract before the bond, which in this connection must be considered as a part of it, was executed by the principal and sureties, did not avoid the bond as to them, nor as to the trustees if the latter accepted the instruments with knowledge of the change. Prior to the interlineation by Beville the contract bound the trustees to pay to the contractor 80 per cent, of the estimated value of the work. Subsequent to the interlineation the contract bound the trustees to pay the money to the superintendent, Mills, by whom it was provided it should be paid upon debts for labor and material. It is apparent that this term is material, a change of which might greatly affect the liability of the sureties to laborers and materialmen. However, the contract being void, because not approved by the county superintendent of public schools, as required by the statute, it is a matter of no importance except in so far as it may affect the obligation of the sureties to those furnishing labor and material in the construction of the building.

The act of the contractor, Barnes, in pasting the slip of paper over the interlineation materially changed the contract which the sureties, by their undertaking in the bond, had guaranteed, resulting in a release from liability of the sureties, with the possible exception of Kerbow and Buntin. Kerbow alleged facts which, if proven, may also entitle him to be released, but Buntin has not by his pleadings set up any facts which would, if true, release him. The amended petition declared upon the contract as interlined by Barnes, and had a copy of it attached as an exhibit. To sustain the allegation plaintiff offered in evidence a contract in which the interlined clause had a slip pasted over it, but torn loose at one end. This constituted a variance. However, since one party had declared upon it in its original condition, and the other parties set it out in their pleadings in its altered condition, and the slip pasted over the interlineation was raised so the writing could be seen, appellants could not have been surprised, and the action of the court in overruling the objection, if error, was harmless. The burden is upon the one offering an altered or mutilated writing to explain its condition before it is admissible in evidence. The fact that the trustees permitted Barnes to take down his forfeit money after the presentation of the bond and to proceed with the work is a sufficient acceptance.

There is no merit in the contention that the refusal of the trustees to accept the bond when first tendered them, because the sureties were not sufficient, terminated the liability of sureties then upon it. There is nothing in the record which would prohibit Barnes from adding other sureties and again presenting it to the trustees for acceptance. There was an issue made by' the pleadings and evidence as to the item of $12 for lime which should have been submitted to the jury.

The pleadings show no misjoinder of either parties or causes of action. Suits upon contracts and torts may be joined when they grow out of the same transaction. Hoskins v. Velasco National Bank, 48 Tex. Civ. App. 246, 107 S. W. 598; Hooks v. Fitzenrieter,' 76 Tex. 277, 13 S. W. 230.

Appellant contends under the fifteenth assignment that, because the condition of the bond is that Barnes shall duly and promptly pay and discharge all indebtedness, etc., and complete the building free of all mechanics’ liens, the exception to the amended petition should have been sustained, because the petition fails to show that either the plaintiff or intervener, Gatlin, had a mechanic’s lien fixed upon the building. The bond expressly provides that it is made for the use and benefit of all persons who may furnish labor or material, and, if considered as a common-law bond, the labor done and material furnished is a sufficient consideration to support it. It was alleged that Barnes did partially comply with the condition named in the bond, and the words, “free of all mechanics’ liens” may be considered as surplusage and still the instrument be complete as an obligation. The statute under which this bond was executed, was designed to provide security as a substitute for the lien which might otherwise exist in favor of mechanics and materialmen, such lien not being permissible upon a public building, for which reason the federal courts, in construing the statute from which the Texas statute was evidently drawn, have always given it a liberal construction in favor of laborers and materialmen, and we think the rule should be applied here. Equitable Surety Go. v. United States to Use of McMillan & Sons, 234 U. S. 448, 34 Sup. Ct. 803, 58 L. Ed. 1394. Besides the issue as to whether all of the material charged in the itemized bill was used in the building, there are other issues of fact which the court should have submitted to the jury.

The transcript in this case contains over 260 pages, nearly half of which is taken up by the pleadings of the parties. The pleadings of all parties are unnecessarily prolix, and before another trial the court should order a repleadei.

For the errors pointed out and because the court directed a verdict, the judgment is reversed, and the cause remanded.

On Motion for Rehearing.

Appellants insist that, since the contract was entered into between the contractor and the trustees, we should presume that the permit required by Vernon’s Sayles’ Oivil Statutes, art. 2904n, was previously issued. By the explicit terms of section 14, c. 120, Acts of 1913 (article 2904o), every disbursing officer of school funds is prohibited from paying out any portion of such fuuds for the construction of a building costing more than $400, until the permit required by the act has been procured; and a violation of this inhibition renders the disbursing officer liable for the sum so paid. Certainly a party who seeks to recover any part of such fund should show by Ms pleadings that he has met the condition precedent upon which his right to demand the money of the disbursing officer depends. No court should by its judgment require the payment of a claim to which the claimant was not entitled without suit, and it is fundamental that his pleadings should allege every fact necessary to a recovery. If the permit has, in fact, been issued, the pleadings should show it, and because they do not they are subject to general demurrer, and the error is fundamental. The requirement that the permit be obtained relates to the power and authority of the parties to contract, rather than to its form when the contract is made. Reynolds v. Schweinefus, 27 Ohio St. 313, is a case where the power of a city council to improve the streets of the city, without the prior recommendation of the board of city improvement was involved. In discussing the presumption of the performance of official duty, Ash-burn, J., said:

“When a statute requires an act to be done, and gives no dii'eetion as to the mode of performance, and proceedings are had in the direction of performance, the duty will be presumed to have been rightfully performed until the contrary is made to appear. This presumption does not arise so strongly in regard to the exercise of power as to the performance of duty under the power. * * * So that, in cases where restraint is put upon their action by statute, and they can only act upon the authority of a report and recommendation of another body, it would not be wise, by mere construction, to lessen the force of the restraint to presume jurisdiction simply because of its exercise.”

The classification and appraisement of public lands before they are placed upon the market by the land commissioner and sold must not only be alleged, but proved.

“The establishment of that distinct fact has been held to be one of the essentials of a plaintiff’s case, so that no recovery can be had without it.” Anderson v. Walker, 95 Tox. 596. 68 S. W. 981: Hardman v. Crawford, 95 Tex. 193, 66 S. W. 206; Thompson v. Gallagher, 32 Tex. Civ. App. 591, 75 S. W. 567, writ'of error denied, 97 Tex. 649, 77 S. W. xv.

In our opinion, the statute in question limits the power of the parties to contract. It appears from the. motions for rehearing that the statute had been complied with, but the record fails to show it, and we cannot consider questions presented which could properly arise only under a record showing compliance with the statute. That portion of the opinion in which it is stated that the bond, as between materialmen and laborers, upon the one part, and the contractor and his bondsmen, on the other, should be liberally construed, is probably a too generous statement of the rule, and that expression is withdrawn. 'In all other respects we think we hare correctly announced the rules of law which should govern in another trial, and the motions for rehearing are overruled.
      -@=3Foi- other case.- seo same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      <S^Por other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: TALBOT, J.

license: Public Domain

text:
    FINLEY et al. v. WAKEFIELD.
    (No. 7460.)
    (Court of Civil Appeals of Texas. Dallas.
    March 11, 1916.)
    1. Bills and Notes <&wkey;>452(l) — Purchase erom Bona Fide Holder — Purchase eor Sbite.
    The legal and equitable owner and holder of a note, given to secure advancement of the purchase price of land, by indorsement and written transfer and assignment from the assignee of the original payee, for valuable consideration, could sue the makers, though he purchased the note for spite and not for profit or in the ordinary course of trade.
    [Ed. Note. — For other cases, see Bills and Notes, Dec. Dig. <&wkey;452(l).]
    2. Homestead <&wkey;81 — Interest Subject.
    When a guardian’s sale of land to husband and wife was confirmed by the county court, the title vested substantially in the purchasers, subject to the payment of the purchase money, who, before the execution and delivery to them of deeds by the guardian and a ward, had such an interest in the land that they" could impress a homestead upon it, since the homestead right may attach to an equitable estate, or an estate for life, or even a leasehold interest, while the confirmation by the court of the sale related back to and conveyed title from its date.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. §§ 114-118; Dec. Dig. &wkey;81J
    3. Homestead <&wkey;96 — Lien eor Attorney’s Fees.
    Where a vendor of land requires the purchaser to - stipulate in the original purchase-money note for the payment of attorney’s fees if the note is not paid at maturity, and it is placed in an attorney’s hands for collection, a lien on the land is created by the obligation to pay fees, which cannot be defeated by the subsequent establishment of a homestead.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. §§ 147-153; Dec. Dig. <&wkey;96.]
    4. Homestead <&wkey;96 — Lien eor Attorney’s Fees.
    Under the Constitution, protecting the homestead of a head of a family from forced sale for the payment of all debts except for the purchase money, etc., where buyers of land from a guardian, the sale being subsequently confirmed by the county court, gave a purchase-money note, stipulating for attorney’s fees, which was subsequently renewed, the notes having been given subsequent to the fixing of the buyers’ homestead upon the land, and the original contract not having stipulated for attorney’s fees, such fees could not be made a charge upon the land, since, when homestead property cannot be le-gaily incumbered, except for certain purposes specified, a liability not embraced in such purposes cannot become by contract a charge upon the property because coupled with another obligation with which the property may be charged.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. §§ 147-153; Dec. Dig. &wkey;96.]
    5. Guardian and Ward <&wkey;81 — Order oe Sale oe Land — Authority oe Court — Presumption.
    In the absence of contrary proof, every fact necessary to support the authority of the county court to make an order of sale, directing a guardian to sell the wards’ land, and to confirm the sale made thereunder, must be presumed.
    [Ed. Note. — For other cases, see Guardian and Ward, Cent. Dig. §§ 334r-336; Dee. Dig. <&wkey;> 81.]
    6. Guardian and Ward <&wkey;108 — Sale oe Land by Order oe Court — Title oe Ward.
    Where a county court ordered the sale by a guardian of her wards’ lands, such sale, and its confirmation, passed title to the buyers, subject only to the payment of the unpaid purchase money, leaving no title in a ward or her husband.
    [Ed. Note. — For other cases, see Guardian and Ward, Cent. Dig. §§ 369, 395-398; Dec. Dig.. <&wkey;108.]
    7. Guardian and ward <&wkey;98 — Sale oe Lands — Consummation.
    Where the court’s order of sale authorized a guardian to sell the wards’ land's for cash or half cash and balance on credit as to her should seem best for the interest of the estates of the minors, and the buyers, instead of paying a part of the purchase price cash and executing their notes for the balance, as originally agreed with the guardian, gave their note to a third person, who furnished the purchase money in cash to the guardian, the sale, as reported to the court and confirmed by it, was carried out, and the buyers acquired title through the confirmation, and not through a deed from a ward thereafter executed.
    [Ed. Note. — For other cases, see Guardian and Ward, Cent. Dig. § 369; Dec. Dig. (®=»98.]
    8. Bills and Notes <&wkey;445 — Election to Declare Due.
    Where the assignee of a note, given to secure the- advancement by the payee of the price of lands purchased by the makers, sold in his turn, with the understanding that the suit instituted by him thereon should be dismissed, its dismissal did not sot aside or annul his previous election to declare the entire note due for nonpayment of interest, or estop his transferee from such election and declaration after he purchased.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1311-1329; Dec. Dig. &wkey; 445.]
    9. Judgment <&wkey;675(2) — Binding Force on One Not a Party.
    Where a bank, to which a note was delivered as collateral security, returned the same to the pledgor or Ms counsel that suit might be brought upon it by the pledgor, an attorney of the bank bringing and prosecuting the suit to judgment, the judgment rendered was binding on the bank, and estopped it to maintain a suit on-the same cause of action.
    . [Ed. Note. — For other cases, see Judgment, Cent. Dig. § 1191; Dec. Dig. <§=>675(2).]
    10.. Abbeal and Error <&wkey;1036(3) — Immaterial Error.
    In suit on a note, where the judgment, under the circumstances, was binding on a bank not a party, error of the court in declining to continue the case to make the bank a party was immaterial.
    [Ed. Note. — Eor other eases, see Appeal and Error, Cent. Dig. § 4071; Dec. Dig. <&wkey;1036 (3).]
    11. Husband and Wife <&wkey;238(3) — Judgment Not Personal Against Wife.
    In suit on a note renewing a note given by the purchasers of land at guardian’s sale to secure the advancement of the purchase price by the original payee, judgment decreeing that plaintiff recover of the purchasers, husband and wife, the amount sued for, with foreclosure of liens, and directing that, if the property condemned to pay the judgment should not sell for enough to satisfy it, plaintiff should have execution against the husband for the balance, but that no execution should ever issue against the wife, was not in proper form for a judgment other than personal against the wife.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. § 855; Dec. Dig. <&wkey;238(3).]
    Appeal from District Court, Grayson County; M. H. Garnett, Judge.
    Suit by John T. Wakefield against A. P. Finley and another. From a judgment for plaintiff, defendants appeal.
    Reversed in part, reformed in part, and otherwise affirmed.
    C. B. Randell and J. W. Finley, both of Sherman, for appellants. Wolfe & Wood, of .Sherman, for appellee.
   TALBOT, J.

On April 11, 1914, appellee filed suit on note, dated October 6, 1909, signed by appellants and payable to H. O. Head, or order, five years after date, for the sum of $1,260, with interest at the rate of 8 per cent, per annum, and stipulating that if the same was placed in the hands of an attorney for collection, the makers agreed to pay 10 per cent, on the amount as reasonable attorney’s fees. The note sued on was given in renewal and extension of a certain other note, dated August 25, 1903, signed by appellants, payable to the order of W. H. O’Neal as trustee, five years after date, for the sum of $1,200, with interest at the rate of 8 per cent, per annum from date, and 10 per cent, attorney’s fees if placed in the hands of an attorney for collection. The said W. H. O’Neal, trustee, for a valuable consideration, transferred and assigned said note to H. O. Head, to he held by him as security for payment of the note sued upon, and thereafter, on the 16th day of April, 1914, the said H. O. Head, by written transfer, sold and conveyed said note to appellee. The note was secured by a vendor’s lien, as well as by a deed of trust, executed by appellants on the land described in plaintiff’s petition, and the interest on said note, according to its terms, was payable annually, on the 6th day of October ■of each year, and the deed of trust stipulated that if default was made in payment of any installment of interest thereon, when due, that the same could, at the option of the holder, be declared due and payable. Appellants had failed to pay certain installments of interest due on said note, and H. O. Head, who was then the legal and equitable holder and owner of the note, declared the same due, and brought suit thereon. The appellee then purchased the note, and H. O. Head then dismissed his suit. After acquiring said note, appellee borrowed $1,000 from the Sherman Loan & Trust Company, and placed the note with it as collateral security for such loan, but for the purpose of bringing suit upon it said company returned said note to appellee. Ap-pellee, after purchasing the note, ratified the act of said Head in declaring the note due, and further exercised his option of declaring the same due and payable, according to the terms of said note and the authority conferred upon him as the holder thereof, by said deed of trust, and brought this suit.

The principal matters of defense were; First, that the note sued on .and the deed of trust given on the land involved in the controversy were not obtained in the usual course of business nor for profit or business reasons, hut for spite, and that appellee was estopped from claiming the attorney’s fees sought to be recovered; second, that the ap-pellee had no lien on said land for the attorney’s fees claimed in his petition, because said land, at the time the original note was given to W. H. O’Neal and at the time the renewal note sued on was Executed, which provided for the payment of attorney’s fees, was, and had been for some months, the homestead of appellants. The property described in appellee’s petition belonged to two minor children, Lula Sophia Matthews and Paul Matthews, and Mrs. M. T. Brown was their guardian. Mrs. Brown, as such guardian, made application to the county court of Grayson county, Tex., for an order to sell said property. On January 17, 1903, this application was granted, and Mrs. Brown, by order of the court duly made, was authorized and directed to sell the property for cash or half cash and the balance on credit, not to exceed four years, as to her should seem best for the interest of said estate. On June 4, 1903, said guardian reported to the court that she had sold the property to Eudora T. Finley, one of the appellants, at private sale, on May 15, 1903, for $1,600, one-half thereof to be paid cash and the remainder in equal installments, payable on or before one, two, and three years from date of said sale, each secured by note bearing 10 per cent, interest from its date, and by vendor’s lien on said premises. On June 11, 1903, said sale was approved and confirmed by the court, and Mrs. Brown, as guardian of the estates of said minors, was ordered to make deed to the purchaser, Mrs. Eu-dora Finley, upon her compliance with the terms of the sale. The appellants were, at the time of all the transactions in question, husband and wife, and the property was purchased with the intention of making it their home, and before or about the time of the confirmation of tfie sale by tbe county court they moved onto it, and continuously since that date have occupied, used, and claimed it as their homestead. In making the purchase of the property from the guardian of the minors, appellants did not contract or agree to pay any attorney’s fees whatever, and the order of sale did not require that the purchaser agree to pay attorney’s fees in any event. At some time, the date of which the record does not disclose, but prior to the making of any deed by the guardian, the minor, Lula Sophia Matthews, intermarried with Charles E. Hipolite. On the 25th day of August, 1903, Mrs. Brown, as guardian, executed and delivered to appellant Mrs. Eu-dora Finley a deed for the land in question. This deed purports to have been made by virtue of the order of sale granted to Mrs. Brown as guardian of the Matthews children, the sale to Mrs. Eudora Finley, and the subsequent confirmation thereof by the county court, and contains the following recitations:

“And whereas said purchaser has elected to pay and has paid the entire purchase money: Now therefore, in consideration of the premises and the payment of the entire purchase money as follows: Four hundred dollars ($400.00) paid by Mrs. Eudora T. Finley and received by me for Lula Sophia Hipolite, formerly Lula Sophia Matthews, and twelve hundred dollars ($1,200.-0O) paid by W. H. O’Neal, trustee, and for which said Mrs. Eudora T. Finley and her husband, A. P. Finley, have executed their certain promissory notes, payable five years after date, with the privilege of paying the same at the end of two years or at the end of any year after said two years and before five years, interest payable semiannually at the rate of 8 per cent, per annum, and providing for 10 per cent, attorney’s fees, and to secure the payment of said note the vendor’s lien is hereby retained and the grantor herein does hereby sell and convey to the said W. H. O’Neal, trustee, the superior title and vendor’s lien given by law to further secure said note, which is also further secured by the grantee herein, joined by her said husband, executing their certain deed of trust to secure the said W. H. O’Neal as trustee, I, Mrs. M. T. Brown, guardian as aforesaid, have granted, sold,” etc.

Following tbe foregoing recitations is the habendum clause, the description of the property, and this provision:

“It is expressly understood, however, that the vendor’s lien is retained upon said premises and improvements, to W. H. O’Neal as above specified, until the note above mentioned and all interest thereon, is fully paid, according to its tenor and effect.”

On. the same day that Mrs. Brown executed the deed just referred to, Mrs. Lula Sophia Hipolite, joined by her husband, also execrated and delivered to appellant Mrs. Eudora Finley a deed to said property, which, omitting the description of the land, the habendum and warranty clauses, and formal parts, is as follows:

“Know all men by these presents, that we, Lula Sophia Hipolite, formerly Lula Sophia Matthews, joined by her husband, Charles E. Hipolite, of the county of Jefferson, state of Arkansas, in consideration of the sum of one thousand six hundred dollars ($1,600.00) paid to Mrs. M. T. Brown, guardian of the estate of said Lula Sophia Matthews and Paul Matthews, as follows: Four hundred dollars ($400.00) paid by Mrs. Eudora T. Finley to said guardian for me, and the sum of one thousand, two hundred dollar's ($1,200.00) paid said guardian by W. H. O’Neal, trustee, and for which said Mrs. Eu-dora T. Finley and her husband, A. P. Finley, have executed their certain promissory note payable five (5) years after date with the privilege of paying the same at the end of two (2) years, or at the end of any year after said two (2) years and before five (5) years, interest payable semiannually at the rate of eight per cent, per annum, and providing for ten per cent, attorney’s fees, and to secure the payment of said note a vendor’s lien is hereby retained and the grantors herein do hereby sell and convey to said W. H. O’Neal, trustee, the superior title and vendor’s lien given by law to further secure the said note, which is also further secured by the grantee herein, joined by her said husband, executing their certain deed of trust to secure the said W. H. O’Neal as trustee, have granted, sold and conveyed and by these presents do grant, sell and convey unto the said Eudora T. Finley of Grayson county, Texas, as her sole and separate property the undivided one-half interest of the said Lula Sophia Hipo-lite in and to that certain tract or parcel of land situated in the city of Sherman in Grayson county, Texas, and being part of the J. B. Mc-Anair survey. Said land having been the property of the estate of Lula Sophia Matthews and Paul Matthews, minors, guardianship proceedings on which estate is pending in the county court of Grayson county, Texas, by order of which court entered on the 17th. of January, 1903, the guardian of said estate, Mrs. M. T. Brown, was ordered to make sale of said property, and such sale was accordingly made to said Eudora T. Finley and was duly confirmed by said court and this deed is intended to convey to said Eudora T. Finley all interest of said Lula Sophia I-Iipolite and Charles E. Hipolite in said property. But it is expressly agreed and stipulated that the vendor’s lien is retained in favor of said W. H. O’Neal against the above-described property, premises and any improvements until said note and all interest thereon is fully paid according to its face, tenor and effect, when this deed shall become absolute.”

These deeds were delivered to appellants at the same time and were recorded in the deed records of Grayson county.

The case was tried before the court without the aid of a jury, and the trial resulted in a judgment in favor of appellee against both appellants for the sum of $1,728.80, being the amount of the principal, interest, and attorney’s fees represented by the note sued on, with foreclosure of the liens claimed by appellee on the land described in appel-lee’s petition, and directing that an order of sale be issued, commanding the sheriff of Grayson county to sell said land and apply the proceeds of such sale to the payment of the judgment. The judgment further provided that if the land did not sell for enough to satisfy the same, appellee have execution against A. P. Finley, but that no execution ever issued against Mrs. Eudora Finley.

The first assignment of error complains of the court’s action in sustaining appellee’s demurrer to that portion of appellant’s petition charging that the note in suit was not obtained by appellee for profit, or in the ordinary course of trade, but for spite. The court did not err in this ruling. If the appellee was the owner and holder of the note sued on, it was immaterial, so far as Ms right to sue thereon is concerned, whether he obtained the same for profit or in the ordinary course of trade or for spite. He alleged that he was the legal and equitable owner and holder of the note, by indorsement and written transfer and assignment from H. O. Head, for a valuable consideration, and these allegations entitled him to maintain the suit, regardless of the motives that actuated him in purchasing the note.

Assignments 2 and 3, in so far as they assert that the court erred in not finding that appellants had not agreed to pay an attorney’s fee, nor agreed that any of the papers should stipulate for such fee, will be overruled. The evidence very conclusively shows that the note executed and delivered by appellants to W. I-I. O’Neal for a part of the purchase money of the land involved in this suit and the note sued upon, which was given in renewal of said O’Neal note, provided for the payment of 10 per cent, attorney’s fees, if placed in the hands of an attorney for collection, and that such provision was made with the knowledge and consent of appellants.

By more than one assignment of error it is asserted by appellants, in substance, that the amount of the attorney’s fee allowed ap-pellee, and included in the judgment rendered in his favor, was no part of the original purchase price agreed to be paid for the land involved in this suit; that the first time appellants promised or agreed to pay an attorney’s fee, in the event the deferred payments for said land were not made when they became due, was when they executed the note for $1,200 to W. I-I. O’Neal, on the 25th day of August, 1903, which provides for such fee; that before and at- that time said property was, and continuously since has been, the homestead of appellants, and the court erred in making the amount of said attorney’s fee a charge against said property and in foreclosing liens therefor.

The assertion in the assignments to which we • refer, to the effect that the first time appellants, in the transactions out of which this controversy arose, agreed to pay an attorney’s fee, was on August 25, 1903, when the $1,200 note stipulating therefor was executed and delivered to W. H. O’Neal, is clearly borne out by the record, and if before and at the time the stipulation for the payment of attorney’s fees was made the appellants had acquired such, an interest in or title to the land in controversy as authorized the establishment of a homestead upon it, then the evidence is practically conclusive that it constituted the homestead of appellants when the agreement to pay attorney’s fees was entered into. As stated in a former part of this opinion, the order of the county court, authorizing and directing the guardian of the minors, Lula SopMa Matthews and Paul Matthews, to sell the land, did not require her to exact of the purchaser thereof an agreement to pay attorney’s fees, and no-such agreement was exacted or required of appellants or entered into by them with said guardian. The first time any such agreement was made was when a stipulation to that effect was incorporated in the note made by appellants to W. I-I. O’Neal August 25, 1903. This was some months after the guardian had been granted an order to make sale of the property, the sale thereof to appellants and the confirmation of said sale by the court. There was then no promise or agreement included in appellant’s original contract of purchase to pay attorney’s fees, and the first agreement to that effect was made-, as stated, when the $1,200 note payable to W. H. O-’Neal was executed on the 25th day of August, 1903. On the issue of homestead vel non the facts are undisputed. The appellants bought the property with the intention of making it their homestead, and moved upon it prior to or about the time the sale by the guardian to them was confirmed by the probate court of Grayson county, and ever since that time they have occupied, claimed, and used it as such. The questions then are: First, did appellants acquire, before the execution and delivery to them of the deeds made by Mr-, and Mrs. Hipolite, and by Mrs. Brown as guardian, on August 25, 1903, by the sale to them by said guardian and confirmed by the court, such an interest in or title to the land involved in this litigation as that the homestead character could be impressed upon it? and, second, did the attorney’s fee, provided for in the note executed and delivered by appellants to W. H. O’Neal on the 25th day of August, 1903, and which was likewise provided for in the renewal note sued on, constitute a part of the purchase money agreed to be paid for the land, or the obligation assumed by appellants, against which the homestead claim of appellants could not prevail? The first question, we think, should be answered in the affirmative and the second in the negative. In Wheatley v. Griffin, 60 Tex. 209, it is said:

“There is nothing in the Constitution or laws of this state which prevents the homestead right of the wife from attaching to any interest in land which may be owned by the husband or wife, or by the community, and be used as homestead; and the great current of authority is to the effect that the homestead right will attach to an equitable estate, an estate for life, or even to a leasehold interest.”

Wlien the sale made by the guardian, Mrs. Brown, to the appellants was confirmed by the decree of the county court of Grayson county, the title of the land vested substantially in appellants, subject, of course, to the payment of the purchase money, and the execution of the deed, on August 25, 1903, by Mrs. Brown as guardian, was at most but the formal evidence of the title vested by such decree of the court. Rock v. Heald,. 27 Tex. 523. Prior to the date of this deed, and about the time of the confirmation decree referred to, appellants moved upon the land and dedicated it to homestead purposes. It was not essential to the attaching of homestead rights that the fee to the land had passed, or that the purchase money had been paid, although the land remained subject to the vendor’s lien. The confirmation by the county court of the sale made by the guardian to appellants under its order related bach to and conveyed title from the date of such sale. Edwards v. Gill, 5 Tex. Civ. App. 203, 23 S. W. 742. It is thus very well established by the decisions of this state that by the order of sale, the sale and its confirmation by the court, appellants acquired such title or interest in the land in question from the date of the sale as gave them the legal right to fix their homestead upon it, and the evidence is without dispute that about said date they designated it by use and occupancy as such. At the time, then, that appellants signed the note of $1,200 payable to W. H. O’Neal, for the deferred payment of purchase money for the land and in which for the first time attorney’s fees were agreed to be paid, the land constituted, the homestead of appellants.

The second question remains, namely, did the attorney’s fee stipulated for in the O’Neal note and carried into the renewal note sued on constitute a part of the purchase money agreed to be paid for the land, or the obligation of appellants, against which their homestead claim could not prevail? In other words, did there exist for the payment of such fee a lien upon the land superior to the homestead rights of appellants? It is doubtless true that where a vendor of land requires the purchaser to stipulate, in the original note executed for the purchase money, or a part thereof, for the payment of attorney’s fees in the event the note is not paid at maturity and is placed in the hands of an attorney for collection, a lien is created by the obligation which cannot be defeated by the subsequent establishment of a homestead upon the land. In such a case the judgment of foreclosure may embrace the amount duo as such fees. Garrett v. Interstate Bank, 79 Tex. 133, 15 S. W. 224; Neese v. Riley, 77 Tex. 348, 14 S. W. 65; Green v. Johnson, 44 S. W. 6. But when provision is not made for attorney’s fees in the original note given for the purchase money, and a renewal note is taken- after the property has become the homestead of the purchaser, with stipulation for attorney’s fees, no lien is thereby created for sucn fees superior to the homestead claim. Bullard v. Mayne, 49 S. W. 522. The Constitution of this state protects the homestead of the head of a family—

“from forced sale for the payment of all debts except for the purchase money thereof, or for part of such purchase money, the taxes due thereon, and for work and material used in constructing' improvements thereon; and in this last case only when the work and material are contracted for in writing with the consent of the wife, given in the same manner as is required in making sale of the homestead.”

The attorney’s fees sought to be recovered in this suit, as will be seen, are not embraced within the exceptions named in the Constitution, for which the homestead may be incumbered, and, although the promise to pay same is included in the note given W. II. O’Neal and in the renewal note payable to H. O. I-Iead upon which this suit is founded, still as this promise was not made in the original contract of purchase, but subsequent to the fixing of appellants’ homestead thereon, they cannot be made a charge upon the land. In Walters v. Loan Association, 8 Tex. Civ. App. 500, 29 S. W. 51, this court said that the proposition announced in Neese v. Riley, supra, and similar cases—

“is clearly right where the parties are authorized to incumber the property generally to secure their obligations; but when the property cannot legally be incumbered, except for certain purposes specified in the Constitution, a liability not embraced in such purposes cannot become by contract a charge upon the property on account of the fact that it is coupled with another obligation with which the property may be charged.”

We adhere to this view, and as the property in question constituted the homestead of appellants at the time they first contracted to pay attorney’s fees, the same did not become a charge upon said property because coupled with their obligation to pay the deferred payment of $1,200 purchase money. The trial court therefore erred in ordering the property sold for the payment of such fees.

That the minor Lula Sophia Matthews had intermarried with Charles E. Hipolite prior to the time her guardian conveyed the land to appellants, and that she, joined by her husband, also conveyed said land to appellants, does not alter the ease. The evidence shows that this marriage occurred before the date of the deed executed to appellants by the guardian, Mrs. Brown, but whether before or subsequent to the date of the order of sale granted by the county court, the sale and confirmation under which said deed was made, does not appear. That the guardianship was still pending at the date of said order of sale, said sale, the confirmation thereof, and when the deed of said guardian was executed and delivered is not controverted. If the minor Lula Sophia Matthews was married to Hipolite prior to the time the order of sale was granted, or tire date of its confirmation, it does not so appear. In this state of the evidence the validity and binding effect of the county court’s orders upon Mrs. Hipolite cannot be questioned, even though it should be admitted, which is not done, that said orders would have been ineffectual for the purpose intended had it been shown that her marriage-occurred prior thereto. In the absence of proof to the contrary, every fact necessary to support the authority of the county court to make the order of sale, directing the guardian to sell the land and to confirm said sale, must be presumed. It not being shown by the evidence that Lula Sophia Matthews intermarried with Charles Hipo-lite before the order of the county court was made directing the guardian to sell, or the date of the sale to appellants, or confirmation of said sale, the presumption will obtain, for the purpose of sustaining the validity and legal effect of said orders, that such marriage took place thereafter. The effect of the county court’s order of sale, the sale to appellants by the guardian, and the confirmation of said sale passed the title of land to appellants subject only to the payment of the unpaid purchase money, and left no title in Mrs. Hipolite, or her husband, as a subject of conveyance by them, and the deed given by them to appellants at the date of the guardian’s deed cannot have the effect of fixing upon the land conveyed a charge for the attorney’s fees claimed.

Nor do the facts that appellants entered into an agreement with W. H. O’Neal to furnish them $1,200 of the purchase money, giving him their note therefor, and electing in view thereof to pay all cash to the guardian for the land, .instead of paying a part of the purchase price cash and executing their notes for the balance, as authorized by the order of sale granted to the guardian, materially affect the question. The consummation of the sale of the land in that manner was, to say the least, as favorable to the minors and the estates represented by the guardian as would have been a strict compliance with the original terms of sale as agreed on by the appellants and the guardian. The order of sale authorized the guardian to sell the property for cash or half cash and balance on credit as to her should seem best for the interest of the estates of the minors, and we fail to see how it can fairly and reasonably be said as we understand appellee does in effect, that the sale as reported to the court and confirmed by it was never carried out, and hence Mrs. Finley did not acquire title by reason of the confirmation of the sale reported by the guardian, but by reason of the deed made by Mrs. Hipolite and her husband, upon the therein expressed consideration of $400 cash paid by Mrs. Finley to Mrs. Brown as guardian and $1,200 paid said guardian by W. H. O’Neal, trustee, and for which said last-named sum Mrs. Finley and her husband, A. P. Finley, executed their promissory note, providing for 10 per cent, attorney’s fees, etc. Mrs. Finley acquired the title of the land by reason of the order of sale, the sale to appellants, and the confirmation of that sale by the court, and the conveyance from Mrs. Hipolite and her husband was ineffectual to vest the title thereof in her, as she then had no title to convey; and neither the said deed nor the transactions between appellants and W. H. O’Neal recited therein operated to fix as a charge upon the property therein attempted to be conveyed the attorney’s fees stipulated in the note to O’Neal to be paid.

The contention of appellants, to the effect that the court erred in not finding that by a valid agreement, entered into between appellants and H. O. Head while the said Head owned the note sued on and during the pendency of the suit instituted thereon by the said Head, there was an extension of time, for the payment of the interest due on said note, and hence a waiver of the right to declare the note due for default in the payment of such interest, which was binding on appellee, will be overruled. The evidence is wholly insufficient to show that any agreement for such an extension was made; and the sale of the note sued on to appellee, with the understanding that the suit instituted by H. O. Head was to be dismissed, and its dismissal, did not have the effect to set aside or annul the election of H. O. Head to declare the entire note due under the terms of the contract for nonpayment of interest, or estop the appellee from such election and declaration after he purchased the note.

It is further contended that:

“The court erred in not finding that the Sherman Loan & Trust Company had an interest in the subject-matter of the suit and was a necessary party.”

This contention is not believed to be well taken. As pointed out by appellee’s counsel, the only interest which the Sherman Loan & Trust Company ever had in the note sued on was acquired by appellee’s delivering the same into its possession as collateral security, and the evidence shows without contradiction that before this suit was instituted, it was returned to appellee or his counsel, not only with knowledge that suit would be brought upon it by appellee, but for that express purpose. One of the attorneys of said company brought and prosecuted the suit to judgment, and there is no pretense that it was not fully aware of the institution and pendency of this suit. Under these circumstances the judgment rendered on the note is binding on the Sherman Loan & Trust Company, and will estop it from maintaining a suit on the same cause of action. This being true, there was no material error on the part of the court, if a!ny at all, in declining to continue the case for the purpose of making said company a party to the suit.

As shown in our statement of the nature and result of the suit, the trial court decreed that the appellee recover of appellants,. A. P. Finley and his wife, Mrs. Eudora Finley, the amount sued for, with foreclosure of' liens, and directed that if the property condemned to pay the judgment should not sell for enough to satisfy the same, appellee have-execution against A. P. Einley for the balance, but that no execution should ever issue against Mrs. Eudora Finley. This judgment is treated by appellants as a personal one against Mrs. Finley and assigned as error. It may be that since the judgment provides that no execution shall ever issue against Mrs. Finley, it should not be regarded as a personal one against her, but we do not approve of the form of the judgment, and it will be reformed so as to relieve it of the objection urged by appellants.

For the reasons indicated, the judgment of the court below, in so far as it forecloses the lien claimed by appellee and orders the property described in appellee’s petition sold for the payment of the amount of the attorney’s fees recovered, will be reversed, and judgment here rendered denying a foreclosure of said lien and condemnation of said property for the payment of such fees. The judgment will also be reformed so as to deny a personal recovery for any amount against Mrs. Finley. In all other respects the judgment is affirmed.
      ^r=Eor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      ©ss>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes