source: Caselaw Access Project

author: BOYCE, J.

license: Public Domain

text:
    YOAKUM v. GOSSETT.
    (No. 1277.)
    (Court of Civil Appeals of Texas. Amarillo.
    Jan. 23, 1918.)
    1. Wobk and Labor <§=54(2) — Implied Promise.
    Where one performs valuable services for another and the latter expresses no dissent or avails himself of the services, a promise to pay the reasonable value of the services is implied.
    2. Work and Labor <§==4 (2) — Implied Promise.
    A promise will not be inferred where there are facts wholly inconsistent with the contraot to be implied or where an express promise would be contrary to law.
    3. Work and Labor <&wkey;4 (2) — Implied Promise.
    Not every request for, or acceptance of services on the. part of another will imply an intent to pay'therefor.
    4. Brokers &wkey;>67(l) — Acting as Agent por Both Parties.
    A broker cannot, without the consent of both parties, act as agent and receive compensation from both for the same transaction.
    5. Brokers <&wkey;>67(l) — Action for Commission-Implied Promise to Pay.
    Where a broker was employed by one party to the trade, the fact that the other secured a benefit from the broker’s services in the sale of its own property would not authorize an inference that there was an implied promise on the part of the other to pay a commission.
    G. Brokers <&wkey;G7(l) — Action for Commission-Custom.
    That there was a custom that each party to an exchange pay 2% per cent, commission on his property would not authorize a recovery of a broker’s commission from a party to a trade who knew nothing of the custom.
    7. Customs and Usages <&wkey;15(l) — Contracts —Construction.
    An established or notorious custom or usage with reference to the subject-matter of a contract may be shown for the purpose of construing a contract and determining the right of the parties with reference to matters in regard to which the contract is silent.
    Error from Wheeler County Court; L. D. Miller, Judge.
    Suit by F. E. Gossett against S. H. Yoa-kum. Judgment for plaintiff, and defendant brings error.
    Reversed and remanded.
    R. H. Cocke, Jr., of Wellington, and A. M. Mood, of Amarillo, for plaintiff in error. J. B. Reynolds, of Wheeler, for defendant in error.
   BOYCE, J.

F. E. Gossett, defendant in error, brought this suit against S. H. Yoakum, plaintiff in error, to recover a broker’s commission. Plaintiff sues as the assignee of the claim of F. G. Ford, and alleges that said Ford was employed by one Newberry to sell a certain 1 y2 section of land in Wheeler county, and was offering to sell the same to the defendant Yoakum, and in the course of the negotiations the defendant, Yoakum, offered to buy the same at a price satisfactory tb the said Newberry, provided that in said deal said Newberry would accept a stock of goods owned by said Yoakum, at a named price, to be credited on the purchase price of the land, and that after sundry negotiations between Yoakum and Newberry, participated in and promoted by tbe said Ford, tbe said trade was closed; that the said Ford and the defendant Yoakum agreed, with the sanction of the said Newberry, that said Ford should receive as compensation for bis services to the defendant, in assisting in the disposition of said stock of merchandise, a commission amounting in the aggregate to the sum of $265. Plaintiff further pleaded that under such conditions as above set forth the said Ford, at the instance and request of the defendant, performed such services for him, and that the defendant accepted the same, and thereby became bound to pay the said Ford the reasonable value thereof, which was alleged to be the sum of $265.

The testimony shows that Yoakum came to Wheeler county to look at land, and that Ford, as the agent for Newberry, showed him the land described in plaintiff’s petition, stating price, terms, etc. Luring this time Yoak-um proposed to buy the land if he could put in as part payment a stock of goods owned by him, located at Dodsonville, Tex., where Yoakum resided at the time. Nothing was said between the parties as to Yoakum paying any commission to Ford on the transaction, or receiving any compensation from Yoakum in the event the trade was consummated. Ford turned Yoakum over to Newber-ry, and they completed the transaction. Under-the terms of Newberry’s employment Ford was to receive 2% per cent, commission on the sale of lands brought about by him, whether paid for on a money basis or other property was taken in exchange, and in this particular instance Newberry paid Ford the commission according to agreement. There is some testimony that there was a general custom in Wheeler county that 5 per cent, commission was paid on the sale of real estate made on money terms, and that when an exchange was made this was divided, each party paying 2% per cent, on his property and the party having the excess in the exchange paying 5 per cent, on such excess. Some of the witnesses examined did not know of such custom, and defendant expressly denied having any knowledge thereof. The jury found that there was no contract for payment of commissions as alleged, but answered the following issue in the affirmative:

“Has the plaintiff shown by a preponderance of the evidence that F. G. Ford made a sale to said Newberry of the stock of goods at the instance and request of the defendant, S. H. Yoakum, and did the defendant accept the benefit of such services?”

They further found that the value of such services was $190, for which amount judgment was entered for the plaintiff.

The first assignment of error complains of the refusal of the court to give a peremptory instruction for the defendant. We think this assignment must be sustained. In order for plaintiff to recover there must have been a contract of employment, express or implied. There was certainly no express contract of employment shown. Can such a contract be implied from the circumstances as we have briefly stated them? “Contracts implied in fact arise under circumstances which, according to the ordinary course of dealing and the common understanding of men, show a mutual intention to contract. * * * Thus, where one performs for another, with the other’s knowledge, a useful service of a character that is usually charged for, and the latter expresses no dissent or avails himself of the service, a promise to pay the reasonable value of the service is implied. * * * A promise will not be inferred where there are facts wholly inconsistent with the contract to be implied, or where an express promise would be contrary to law. Both express contracts and contracts implied in fact are based on consent.” R. C. D. vol. 6, pp. 587, 58S; O. J. vol. 9, p. 556; Elliott on Contracts, §1858; Clarke on Contracts, 2429; 9 Cyc. 242. In order to establish an implied contract on Yoakum’s part to pay Ford for his services in the transaction, it must appear that the services were rendered under such circumstances as that it may be fairly inferred that it was the intent of the parties that Yoakum should pay for such services. Dunn v. Price, 87 Tex. 318, 28 S. W. 681; Ballentine v. Mercer, 130 Mo. App. 605, 109 S. W. 1040. It is not every request for or acceptance of services on the part of another that will imply an intent on the part of the beneficiary to pay therefor. Bonner v. Bradley, 14 Tex. Civ. App. 234, 36 S. W. 1014; Schrimpf v. Settegast, 36 Tex. 301. In this case Yoakum was dealing with Ford as the agent of his adversary in the trade. Ford, as a matter of law, could’ not, without full knowledge and consent of the parties, act as agent and receive compensation from them both in the transaction. C. J., vol. 9, pp. 568-576; Keitt v. Gresham, 174 S. W. 884; Hill v. Patton, 160 S. W. 1155; Moore v. Kelley, 162 S. W. 1035. The relation of the parties was such, therefore, that a contract on the part of defendant, Yoakum, to pay Ford for his services would be a breach of good faith, and illegal, unless it was shown that Newberry had consented to allow his agent Ford to act for and receive commission from the purchaser. Yoakum, therefore, had the right to assume that Ford was being paid by his employer, Newberry; and, while the said Yoakum incidentally received a benefit from the services in the sale of his own property, no contract to pay therefor can he legitimately implied from such facts.

The evidence as to the custom above referred to does not affect this conclusion. If the custom was to divide commission, Ford had ho claim here because he has received his full commission under the contract with his initial employer. But, if the custom applied to the facts of this case, it would not be sufficient to justify a recovery by Ford, because there was no evidence that such custom was known to the defendant, Yoakum. The law of usages and customs in relation to contracts is usually applied in the interpretation and construction thereof. An established or notorious' custom or usage with reference to a particular trade or subject-matter of a contract may be shown under proper pleading for the purpose of construing the contract and determining the right of the parties under the contract with reference to matters in regard to which the contract is silent. Schmitt v. New Braunsfelser Unterstuetzungs Verein, 32 Tex. Civ. App. 11, 73 S. W. 568; O. M. Insurance Co. v. Reymershoffer Sons, 56 Tex. 234; Schaub v. Dallas Brewing Co., 80 Tex. 634, 16 S. W. 429. And it is sometimes said that a contract itself cannot be established by custom. 12 Cyc. 1083, and authorities cited. However that may be, bearing in mind that the question as to whether or not there was an implied contract on the part of Yoakum to pay Ford for his services in consummating the trade must be determined by the rules hereinbefore stated, it is clear that before an intention on the part of Yoakum to pay Ford for such services' may be fairly implied, it must be shown that Yoakum had knowledge of such custom, which was not in accordance with the general principles of law that would regulate the transaction. While a custom may be shown to be so long established and general in its application that it affords presumptive evidence that the parties knew of its existence, though even then in a case of this kind it could not be conclusive, the proof in this ease falls short of this, showing, and there is no other evidence of knowledge on the part of the defendant of such knowledge, and lie expressly denies knowledge thereof.

For these reasons we think the case must be reversed and remanded.

HUFF, O. J., not sitting, being absent in Austin, with committee of judges passing on applications for writs of error.
      <&wkey;>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: KEY, C. J.

text:
    KLARAS v. NORTH BRITISH & MERCANTILE INS. CO. OF LONDON & EDINBURGH.
    (No. 5857.)
    (Court of Civil Appeals of Texas. Austin.
    Dec. 21, 1917.
    Rehearing Denied Jan. 30, 1918.)
    1. Courts <&wkey;480(2) — Injunction—Courts of Same State — Enforcement of Judgment.
    Where creditor of insured garnished insurer, which paid amount of policy into district court after insured had sued on the policy in county court, and the creditor got judgment which was paid, the district court could not perpetually enjoin enforcement of the county court judgment against the insurer, in view of Vernon’s Sayles’ Ann. Civ. St. 1914, art. 4653, requiring writs of injunction to stay execution of a judgment to be returnable in the county where the suit is pending.
    2. Courts <&wkey;480(2¡) — Injunction—Right to Writ.
    In such ease it was not necessary, in order to prevent irreparable injury, to enjoin execution of the county court judgment, since such court, on showing that the garnishee had paid the debt, had power to make any necessary order.
    Error from District Court, McLennan County; E. J. Clark, Judge.
    Action by the Central Texas Exchange National Bank of Waco against B. Klaras, wherein the North British & Mercantile Insurance Company of London & Edinburgh was garnished, and prayed that an action by B. Klaras against it be enjoined. Judgment for plaintiff and order that the injunction issue as prayed, and Klaras brings error.
    Affirmed in part, and in part reversed and dismissed.
    W. L. Eason, of Waco, for plaintiff in error. Locke & Locke, of Dallas, for defendant in error.
   KEY, C. J.

The trial judge’s findings of fact and conclusions of law sufficiently indicate the nature and result of this suit, which findings and conclusions are as follows:

“Findings of Fact.
“(1) On or about May 21, 1913, the garnishee issued a policy of fire insurance to one A. Kron-berger, whereby it undertook to indemnify the said Kronberger to an extent not exceeding $400 against direct loss or damage by fire for a period of three years from May 21, 1913,-to a house at 2414 South Fourth Street, Waco, Tex. Later, and prior to June 21, 1915, the property covered by said policy was sold by said Kronberger to B. Klaras, and the garnishee consented thereto. Said policy was numbered 2558022.
“(2) On June 26, 1915, the said B. Klaras,. 1 by his attorney, W. L. Eason, forwarded to the garnishee proofs under said policy on account of a loss by fire of said house on June 21, 1915. The proofs were received by the garnishee on June 27, 1915. The policy of insurance was of the Texas standard form, providing that the sum for which the garnishee was liable should be payable 60 days after receipt by it of proofs of loss, and also providing that the policy should be void in case of a change in interest, title, or possession of the subject of insurance.
“(3) That on June 25, 1915, at the instance of Central Texas Exchange National Bank of Waco, plaintiff in a suit styled Central Texas Exchange National Bank of Waco v. B. Klar-as, pending in this court and numbered 661 on the docket thereof, a writ of garnishment of proper form was issued and duly served on the same date on the garnishee. The amount of the debt claimed by Central Texas Exchange National Bank of Waco against B. Klaras was in excess of the amount of the insurance policy issued by the garnishee on said building.
“(4) The garnishee after the receipt of the proofs of loss learned that on December 10, 1914, B. Klaras had conveyed the property covered by said policy of insurance to George Bazouros by warranty deed duly filed for record in the records of McLennan county, Tex., and made an investigation to determine the circumstances of such conveyance, and whether thereby a change occurred in the interest, title or possession of the subject of insurance which would avoid the policy.
“(5) On August 7, 1915, the garnishee filed its original answer to the writ of garnishment.
“(6) On August 26, 1915, B. Klaras instituted suit in the county court of McLennan county, Tex., against North British & Mercantile Insurance Company of London & Edinburgh to recover the sum of $400' under said policy on account of said loss on June 21, 1915. The defendant in said suit was duly served with citation immediately and in time to require an answer at the term of said court convening Sentember 6, 1915.
“(7) The defendant’s attorneys, Locke & Locke, at Dallas, prepared on September 4, 1915, and mailed on the same date to the clerk of the district court of McLennan county, Tex., the garnishee’s first amended original answer in this suit, and to the clerk of the county court of McLennan county, Tex., its original answer in said suit of B. Klaras against it.
“(8) In said answer to the suit in the county court the defendant admitted the indebtedness of $400 claimed, but set up the fact of the service on it of the writ of garnishment aforesaid, and of the fact that it had filed an amended answer in the garnishment suit admitting the indebtedness and offering to pay the money into the registry of the court,, and alleging that B. Klaras had filed an independent suit against the garnishee for the amount of such debt and making him a party thereto and praying that the prosecution of said independent suit be enjoined, and in said answer in the county court suit the defendant prayed that the suit be abated or be stayed pending the proceedings in the garnishment suit. The defendant’s attorneys wrote to W. L. Eason, attorney for said B. Klaras, on September 4, 1915, advising him of the forwarding to the clerks for filing of said amended answer in garnishment and. of said original answer in the county court suit and advising him of the contents of the same as stated as above, and inquired his wishes with respect to the suit in the county court and requested that he advise them of any setting of the ease, or if it should be set for September 7th, 8th, or 9th that he telegraph them at their expense. Such letter was received by said Ea-son on September 6, 1915. The defendant’s attorneys in forwarding said answer in the county court suit to the clerk of the county court also requested said clerk to advise them of any setting of the case and to do so by wire at their expense if the case should be set for September 7th, 8th, or 9th.
“(9) The first amended original answer in the garnishment suit was filed on September 7, 1915, and the original answer in the county court suit was filed September 6, 1915.
“(10) On September 6, 1915, W. L. Bason, attorney for B. Klaras, called up the office of the garnishee’s attorneys in Dallas, Tex., by telephone, at their expense, and stated to them that he would ask the county judge for judgment in said county court case on the defendant’s answer when the case was called on the appearance docket the following morning. The defendant’s attorneys replied that if he made such request of the judge and if judgment was entered they would move to set it aside.
“(11) On the call of the appearance docket in the county court on the morning of September 7, 1915, said county court suit not having been set for trial on that date, W. L. Eason, as attorney for B. Klaras, when this case was reached, stated to the court that the suit was upon an insurance policy and that the plaintiff’s debt was admitted, and requested the entry of judgment in favor of plaintiff for $400 on the admission in defendant’s answer. Neither the petition nor the defendant’s answer was read to the court, and the court was not apprised of the fact that the defendant in said answer set up the service on it of a prior garnishment.
“(12) On September 8, 1915, the garnishee’s first amended original answer in the garnishment suit having been called to the attention of the judge of the court and request made for the issuance of a temporary restraining order in accordance with the prayer of such answer, a fiat was entered by the judge on such answer directing the issuance of such temporary restraining order against the further prosecution of the suit in the county court upon the filing of a bond in the sum of $800. Said bond was filed and the writ of injunction was issued and served on said Klaras on September 13, 1915.
“(13) In the principal suit out of which said garnishment was issued, judgment was rendered on November 22, 1915, in favor of the plaintiff Central Texas Exchange National Bank of Waco, Tex., against B. Klaras, among others, jointly and severally, for a sum in excess of the amount of said indebtedness of $400.
“(14) The garnishee on account of said policy of insurance and said loss occurring June 21, 1915, thereunder, became indebted to B. Klaras in the sum of $400. The debt for which suit was instituted in the county court, as aforesaid, is the same as the debt garnished in this suit.
“(15) The garnishee has denosited with the clerk of the court, in pursuance of the order of the court, the sum of $400, being the amount of its indebtedness under said policy for said loss.
“(16) Said building covered by the policy in question was totally destroyed by the fire.
“Conclusions of Law.
“1. I conclude from the foregoing facts that the garnishee, in order to protect itself from the vexation and expense of double litigation and the possibility of double recovery, was entitled to the remedy of interpleader, making the plaintiff in the county court suit a party to the garnishment suit in this court and restraining the further prosecution of the suit in the county court.
“2. I conclude that the indebtedness owing by the garnishee to B. Klaras was duly garnished by Central Texas Exchange National Bank, and that said bank is entitled to the benefit of 'said' indebtedness.
“3. I conclude that the garnishee is entitled to a reasonable attorney’s fee to be deducted from the amount of its indebtedness or out of the fund deposited in the registry of the court for the amount of such indebtedness, and that $25 is the amount of such fee. I conclude further that the garnishee is entitled to its. costs to be also deducted from the amount of said indebtedness or fund.
“4. I conclude that judgment should be rendered in favor of Central Texas Exchange National Bank against the garnishee for the amount of such indebtedness, less its said attorney’s fees and costs, and that the garnishee is entitled to an injunction perpetually restraining the said Klaras from the further prosecution of said suit in the county court, and so from attempting to collect for his own account the amount of indebtedness decreed to the said Central Texas Exchange National Bank.”

Opinion.

A decree was rendered in accordance with the findings and conclusions of the trial judge, and B. Klaras has prosecuted a writ of error from that decree. His complaint is that the district court has no jurisdiction to perpetually enjoin the" enforcement of the judgment of the county court in his favor against the insurance company. That complaint is well taken, and requires a reversal of the judgment. Article 4653, Revised Civil Statutes; Smith v. Morgan, 28 Tex. Civ. App. 245, 67 S. W. 919; Broocks v. Lee, 50 Tex. Civ. App. 604, 110 S. W. 756; Ry. Co. v. Butler, 52 Tex. Civ. App. 323, 114 S. W. 671; Thallman v. Buckholts, 181 S. W. 791; Baker v. Crosbyton Ry. Co., 107 Tex. 566, 1S2 S. W. 287; Marshall v. Spiller, 184 S. W. 285; Hammack v. Schley, 186 S. W. 872.

The statute cited provides that:

“Writs of injunction granted to stay proceedings in a suit, or execution on a judgment, shall be .returnable to and tried in the court where such suit is pending, or such judgment was rendered.”

In the cases just cited that statute is construed, and, with certain exceptions, some of which are indicated by the Supreme Court in Baker v. Crosbyton Ry. Co., it is held that, while a writ of injunction may be granted by a judge of another court, the same should be made returnable to the court whose proceedings it is sought to have stayed, and that no other court has jurisdiction to perpetuate such preliminary injunction.

We do not think the case at bar falls within any of the exceptions which have been, or should be, made to the statute. It is not claimed that the judgment of the county court is void for want of jurisdiction, or for any other reason; nor is it claimed that an execution issued upon that judgment had been levied upon property exempt from forced sale, as was the case in Leachman v. Capps & Canty, 89 Tex. 690, 36 S. W. 250, and Van Ratcliff v. Call, 72 Tex. 491, 10 S. W. 578. It may be conceded that the district judge has the power to issue whatever restraining writs may have been necessary to preserve the subject-matter of the litigation in the district court, but this case does not fall within that category.

The plaintiff obtained judgment against both appellant and the garnishee insurance company, and the latter has satisfied the judgment against it. Therefore it was not necessary to enjoin Klaras from enforcing his judgment in the county court in order to protect the plaintiff in this case; nor would a failure to perpetuate the injunction have resulted in irreparable injury to the insurance company. True it is that litigant should not be required to pay the same debt twice, but the county court in the exercise of its equitable powers could have, and, for aught that we know, can yet, make whatever orders and issue whatever writs may be necessary to prevent the accomplishment of that result. In other words, at the time the district court made the injunction perpetual the county court had, and still has, full power, upon a showing by the garnishee that he has already paid the debt, to make whatever orders and issue whatever writs may be necessary to prevent the enforcement of the county court judgment, and therefore no reason exists for not holding that the statute above quoted applies to this case.

So much of the decree appealed from as enjoins the plaintiff in error B. Klaras from the enforcement of his judgment against the garnishee, North British & Mercantile Insurance Company of London & Edinburgh, is set aside, and that part of the . case is dismissed. But in all other respects the decree referred to is affirmed.

Affirmed in part, and in part reversed and dismissed.
      <&=aFor other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: TALBOT, J.

text:
    PENNSYLVANIA RUBBER CO. v. McCLAIN.
    (No. 7868.)
    (Court of Civil Appeals of Texas. Dallas.
    Jan. 19, 1918.)
    1. Monopolies <&wkey;17(2) — “Conspiracy in Restraint op Trade” — Sale oe Goods.
    An agreement between two persons that one will buy from the other exclusively, or that one will sell to the other exclusively, a given commodity, constitutes a “conspiracy in restraint of trade,” within the meaning of Vernon’s Sayles’ Ann. Civ. St. 1914, art. 7798, suhd. 1.
    [Ed. Note. — For other definitions,, see Words and Phrases, First and Second • Series, Conspiracy.]
    2. Contracts &wkey;>138(2) — Illegality and Restraint ow Trade.
    In an action and cross-action, where both parties relied upon a contract that is illegal as being a “conspiracy in restraint of trade,” neither can recover.
    3. Appeal and Error &wkey;>909(5) — Presumption — Interstate Commerce.
    Where the record does not show that a transaction was interstate commerce, it will be. presumed otherwise when questioning the legality of a contract therefor.
    . Appeal from Ellis County Court; W. M. Tidwell, Judge.
    Action by the Pennsylvania Rubber Company against W. 6. McClain. From a judgment for plaintiff, and for defendant on ■ cross-action, plaintiff appeals.
    Reversed and dismissed.
    S. E. Dawson and J. C. Lumpkins, both of Waxahachie, for appellant. Robert L. Sullivan, of Waxahachie, for appellee.
   TALBOT, J.

The appellant sued the ap-pellee in the justice court of precinct No. 1 of Ellis county upon an account for $183.45. The appellee answered by general demurrer and general denial. Appellee also, by way of reconvention or cross-action against appellant, alleged in substance that the goods specified in the account sued on by appellant were sold and delivered to appellee upon a contract whereby appellant agreed with ap-pellee that if appellee would buy its goods appellant would not sell to any other person in the city of Waxahachie, and would allow appellee a commission-or discount of 17% per cent, on all goods bought and sold by appellee of appellant’s goods under said contract; that if appellant should breach said contract and sell any of its goods to any person other than appellee in the city of Waxa-hachie that appellant would pay appellee the commission of 17% per cent, on the goods so sold, the same as if he (appellee) had sold them; that appellant breached said contract by selling its goods to other parties in the city of Waxahachie, and by reason thereof appellee was entitled to recover of appellant “approximately $120.” Appellee further alleged that he had been damaged as a result of the breach of the contract entered into between him and the appellant, in addition to the loss of the commissions agreed to be paid him in the event of such breach, in the loss of profits he would have made had said contract been faithfully kept and performed by appellant, amounting to $80. In the trial in the justice court appellant was allowed the amount of its account, $183.45, arid the appellee $100 of the amount claimed in his plea of reconvention. Judgment was therefore rendered in favor of the appellant in that court for the sum of $83.45. From this judgment appellant appealed to the county court. In the county court special exceptions were sustained to appellee’s plea in re-convention, and he amended. In this amended plea he alleged, substantially, as in his original plea of reconvention, that the goods mentioned in the account sued on by appellant were sold and delivered to him under the contract set forth in his pleadings filed in the justice court as has been stated, but specifically averred that:

“From the 31st day of August, 1915, to about the 28th day of October, 1915, plaintiff [appellant here] sold $809.06 worth of automobile casings and tubes to the W. B. Jackson Motorcar Company in Waxahachie, Tex., and that defendant [appellee here] is entitled to and that the plaintiff is indebted tp defendant in the sum of $141.59, the same being 17% per cent, commission on the amount of goods described, sold by plaintiff to the W. B. Jackson Motorcar Company.”

In this amended plea appellee alleged that the amount of damages sustained by him in the loss of profits as a result of the breach of the contract entered into between him and appellant was $52. Thus by his amended pleading filed in the county court he claimed that by reason of the breach of the contract set up he had lost by way of commissions agreed to be paid him $141.59 instead of “approximately $120,” claimed in the justice court, and $52 for loss of profits instead of $80, claimed in that court. Upon the coming in of this amended plea of reconvention the appellant filed a motion to dismiss the appeal, insisting as a reason therefor that it appeared from said plea that the cause of action declared on exceeded the jurisdiction of the justice court, and hence the county court had no jurisdiction. The appellant also excepted to and moved to strike out ap-pellee’s cross-action or plea in reconvention on the ground that it appeared that the contract upon which it was based constituted a “conspiracy in restraint of trade,” within the meaning of subdivision 1 of article 7798 of our anti-trust statute. Both the plea to the jurisdiction of the court and the motion to strike out the appellee’s answer for the reason stated were overruled, the case tried upon its merits without a jury, the appellant allowed the amount of its account of $183.45, the appellee allowed his claim of $141.58, and judgment rendered in favor of appellant for $41.87. From the judgment so rendered the appellant appealed to this court and assigns as error the rulings of the trial court in overruling its plea to the jurisdiction of the county court and motion to strike out the appellee’s plea in reconvention.

The question raised in reference to the jurisdiction of the county court to hear and determine appellee’s cross-action or plea in reconvention is, perhaps, not free from difficulty, but we do not regard it absolutely necessary to decide it. The justice court unquestionably had jurisdiction of the amount of the account sued on by the appellant, and as the contract upon which that account is based bound the appellant, according to its. contention, the undisputed evidence and findings of the trial court, not to sell any of its goods and wares of the character furnished and sold to appellee and described in said account to any other person in the city of Waxahachie, Tex., where appellee was engaged in business, no recovery could be had upon it, and both the appellant’s suit and the appellee’s plea in reconvention should have been dismissed. Manifestly, it was the purpose of the contract to give to appellee' the exclusive right to handle and sell appellant’s goods in the city of Waxahachie,. and such a contract is denounced and prohibited by the statute to which we have referred. By this statute any combination in restraint of trade is unlawful, and courts should instantly refuse to recognize and give effect to such a combination whenever in the course of a legal proceeding growing out of the same such appears to be its character. The statute in question expressly declares that an agreement or understanding between two persons that one of them will buy from the other exclusively a given commodity, or that one of them will sell exclusively to the other a given commodity, constitutes a conspiracy in restraint of trade. An agreement to do either or both has the effect to prevent competition, and falls within the condemnation of the statute. Wood v. Texas lee & Cold Storage Co., 171 S. W. 497; Star Mill & Elevator Co. v. Ft. Worth Grain & Elevator Co., 146 S. W. 604; Jersey-Creme Co. v. McDaniel Bros., 152 S. W. 1187.

The contract upon which the assert-e&rights of both the appellant and appellee being illegal and nonenforceable by either party to it for the reason stated, the judgment of the court below is reversed, and the suit of the appellant, as well as the cross-action or plea in reconvention of the appellee, is dismissed. Railway Co. v. Canyon Coal Co., 102 Tex. 478, 119 S. W. 294; Troy Buggy Works Co. v. Fife & Miller, 74 S. W. 956; Gus Feist Co. v. Albertype Co., 109 S. W. 1139. The record does not show that the transaction involved is interstate commerce.
      d&wkey;For other oases see same topic and KEY-NUMBER In all Key-Numbered Digests and Indexes


author: JENKINS, J.

text:
    BOLDING et al. v. BOLDING et al.
    (No. 5822.)
    (Court of Civil Appeals of Texas. Austin.
    Jan. 2, 1918.
    On Motion for Rehearing, Feb. 13, 1918.)
    1. Bills and Notes <&wkey;344 — Purchase ajft-ee Maturity — Notice.
    Where eight vendor’s lien notes were sold to a trust company, indorsed in blank, and, the notes being overdue, the trust company sent four of them to a bank for collection, the subsequent purchaser of the notes was affected with notice that the payee had parted with his title to them, and her purchase of them did not affect the priority of the trust company’s lien as to the remaining four notes.
    2. Partnership &wkey;*156 — Acts oe Partner-Estoppel against Other.
    Where a partner, in inducing Ms sister to purchase certain vendor’s lien notes, acted for the benefit of the firm, his partner was estop-ped to say that so far as he was concerned the sister in purchasing the notes did not acquire a vendor’s lien against the land of the partnership.
    3. Partnership &wkey;>179 — Liability oe Property for Debts oe Firm — Right oe Partner to Demand Application.
    Partnership property is liable for partnership debts, and each partner has the right t« demand that it be so applied.
    4. Judgment &wkey;>18(2) — Pleadings to Support.
    Where a partner alleged that his suit was brought to obtain a settlement of partnership accounts, and defendant partner and his sister alleged that the debts due the sister were partnership debts, the pleadings were sufficient basis for decree subjecting the partnership property, after payment of prior liens, to the payment of the partnership debts to the sister.
    On Motion for Rehearing.
    5. Principal and Agent &wkey;» 177(6) — Kn owl-' edge op Agent — Imputation to Principal.
    The purchaser of notes from a trust company, through an agent who knew that the trust company did not propose to sell the notes, but was demanding payment from the agent who had assumed their payment, was bound by the knowledge of her agent, and, as against the rights of the trust company under the notes, acquired nothing.
    6. Partnership <&wkey;152 — Act op Partner-Binding Force.
    Where a partner who had assumed payment of vendor’s lien notes, in purchasing them for a sister from a trust company, represented the partnership as well as his sister, and, by the pretended sale, received the money of his sister, and applied it to the benefit of the firm, the sister having no actual knowledge that the trust company was not willing to sell the notes, _as between her and the firm, her brother was the agent of ,tlie partnership, which was bound by his representations that the sister was acquiring title to the notes, consequently the vendor’s lien for their security.
    Error from 'District Court, Tom Green County; J. W. Timmins, Judge.
    Action by J. P. Bolding and others against B. R. Bolding and others. To review the judgment, defendants Bolding bring error.
    Reversed, with instructions.
    S. E. Taylor, of San Angelo, and Warren & Briggs, of Gilmer, for plaintiffs in error. Blanks, Collins & Jackson, of San »Angelo, for defendants in error J. P. and Delia Bold-ing. Wright & Harris, of San Angelo, for defendant in error Concho Valley Loan & Trust Co.
   Findings of Fact.

JENKINS, J.

(1) J. P. Bolding owned the 125-acre tract of land mentioned in the pleadings herein, and W. H. Bolding held certain vendor’s lien notes against the same. By agreement of said parties this land was sold to R. L. Williams at an agreed valuation of $12,500, a drug store being taken in part consideration, and vendor’s lien notes for the remainder.

(2) Said parties agreed to become equal partners in the drug business, each to contribute a like amount of capital.

(3) J. P. Bolding put into the business $3,-400 more than was put in by W. H. Bolding.

(4) Williams failed to pay for the 125 acres of land, and deeded it to J. P. and W. I-I. Bolding, the consideration being the cancellation of his notes.

(5) J. P. and W. H. Bolding borrowed from the Concho Valley Loan & Trust Company for the drug business $2,000, and. executed a deed of trust on the 125 acres to secure the same.

(6) The trust company sold this note and mortgage to B. R. Bolding, and the samé is past due and unpaid.

(7) J. P. and W. H. Bolding traded the drug store to W. J. McDonald for the 160 acres of land described in the pleadings herein, and assumed the payment of eight vendor’s lien notes theretofore executed by McDonald to T. J. Neal in part payment of same.

(8) Neal sold these eight notes to thfe trust company, and indorsed the same in blank.

(9) The first three of these notes being past due and unpaid, W. H. Bolding, who lived at Mt. Pleasant, in Titus county, wrote to the trust company that he could find a purchaser for them. The Trust Company answered that they would not sell these notes, and that unless they and the accrued interest on all of the notes were paid they would bring suit on all of them. W. I-I. Bold-ing replied, requesting that the notes be sent to a bank at Mt. Pleasant for collection. This wa.s done, and the bank remitted the amount due on the three notes, together with the interest due on all of the notes.. When the fourth note became due, it was sent to the bank at Mt. Pleasant for collection, and the bank remitted to the trust company the amount due thereon. The trust company supposed that these notes and the interest had been paid by W. H. Bolding.

(10) In fact, W. H. Bolding sold these notes to his sister, B. R. Bolding, who had no actual notice of the bank trust company’s refusal to sell them. She also paid the interest on the remaining notes.

(11) B. R. Bolding also took up certain notes which represented partnership indebtedness of J. P. and W. I-I. Bolding.

(12) On January 15, 1916, J. P. Bolding sued out and had levied a writ of attachment on certain lots in San Angelo owned by W. H. Bolding, alleging an indebtedness against him of $1,220.75.

Opinion.

From the judgment rendered by the court, of which it is unnecessary to state further than the same is complained of by the appeal herein, B. R. and W. H. Bolding have sued out a writ of error.

We do not think that reversible error was committed in overruling W. H. Bolding’s special exception, nor in refusing to admit the testimony of the witness Bullock a,s to the value of the 125-acre tract of land. We think that the court erred in not foreclosing the vendor’s lien in favor of B. R. Bolding on the four notes owned by her, subject to the prior vendor’s lien held by the trust company to secure the payment of the four notes held by it.

in so far as the purchase of said notes from the trust company was concerned, W. H. Bolding had no authority to sell them. They were not sent to him, but to the bank for collection, and the bank did not undertake to sell them. It is true they were indorsed in blank by Neal, and a purchaser of the same before maturity would have obtained title thereto. But the notes being overdue, the purchaser was affected with notice that Neal had parted with his title thereto, and her purchase of them under the circumstances did not affect the priority of the trust company’s lien as to the remainder of the notes.

However, W. H. Bolding in inducing B. R. Bolding to purchase these notes was acting for the benefit of the drug firm of which he was a partner, and we do not think it lies in the mouth of J. P. Bolding to say that, so far as he is concerned, B. R. Bolding in purchasing said notes did not acquire a vendor’s lien against the land then and now owned by said copartnership. B. R. Bolding had no notice of the refusal of the trust company to sell said notes. She simply accepted the proposition made to her by W. H.Bolding to buy the notes, and authorized him to draw her check on her account with the bank to pay for them. The notes were delivered to her.

We also think that the trial court erred in overruling the motion of W. H. Bolding and B. R. Bolding to decree that the partnership property, after the payment of prior liens, should be subjected to the payment of the partnership debts owing to B. R. Bolding and unsecured ‘by her mortgage or vendor’s liens. It is elementary that partnership property is liable for partnership debts, and such partner has the right to demand that it be so applied. Williams v. Meyer, 64 S. W. 70; Wiggins v. Blackshear, 86 Tex. 665, 26 S. W. 940; Moore v. Steele, 67 Tex. 435, 3 S. W. 450.

Appellant J. P. Bolding contends that the pleadings were not sufficient as a basis for such decree. We think they were. J. P. Bolding alleged that this suit was brought to obtain a settlement of partnership accounts. Both W. H. and B. R. Bolding alleged that the debts due B. R. Bolding were partnership debts, and the court found such to be the fact.

On account of the errors committed in the trial of this case, we reverse and remand the same, with instructions to the trial court to enter judgment herein as follows:

1. In favor of the trust company against J.P. and W. H. Bolding for its debt, principal, interest, and attorney’s fees, as evidenced by the four vendor’s lien notes held by it, with foreclosure of its vendor-’s lien on the 160 acres of land, with execution for any unpaid balance after applying the proceeds of the sale of said land to payment of its judgment. The remainder of such proceeds, if any, to be paid to B. R. Bolding on her judgment, as hereinafter directed in the next paragraph hereof. The remainder, if any, after satisfying her said judgment, to be paid into the registry of the court.

2. In favor of B. R. Bolding against J. P. and W.- H. Bolding for the amount of her debt, principal, interest, and attorney’s fees, as evidenced by the four vendor’s lien notes held by her, and her debt by reason of her payment of interest on the eight vendor’s lien notes, and foreclosure of her vendor’s lien, subject to the-prior lien of the trust company mentioned in paragraph 1 of these directions, with execution for balance remaining unpaid, if any, after applying the proceeds of the sale of said 160 acres of land as directed in said paragraph No. 1 and in this paragraph.

3. In favor of B. R. Bolding against J. P. and W. H. Bolding for the amount, principal, interest, and attorney’s fees, as evidenced by the $2,000 note held by her, and foreclosure of her mortgage lien on the 125 acres of land, with execution for balance should the proceeds of the sale of said land be not sufficient to satisfy her judgment as directed in this paragraph. The balance of the proceeds of such sale, if any, to be applied to the payment of the judgment of B. R. Bolding, as directed in the next paragraph hereof, to the extent of such judgment. Should the proceeds of the sale of the 125 acres exceed the amount necessary to satisfy the judgment directed in this paragraph and the judgment in favor of B. R. Bolding directed in the next paragraph hereof, the remainder to be paid into the registry of the court. ■

4. In favor of B. R. Holding against J. P. and W. H. Bolding in addition to the amounts mentioned in paragraphs 2 and 3 hereof, for the amounts, principal, interest, and attorney’s fees, of the notes held by her, the proceeds of which were used in paying the partnership debts of J. P. and W. H. Bolding, whether said notes were signed by both of said partners or by J. P. Bolding only. Should any money remain in the registry of the court after satisfying the lien judgments herein directed, the same to the extent of the judgment directed in this paragraph shall be paid to B. R. Bolding.

5. Should any money remain in the registry of the court after satisfying all of the judgments hereinbefore directed, and all costs herein incurred, the same to the extent of the $3,400 excess advanced by J. P. Bold-ing on the partnership account shall be paid to said J. P. Bolding. Should any excess still remain, the court shall partition the same equally between J. P. and W. H. Bold-ing, and, for the purpose of making such partition, the court shall retain jurisdictioh hereof until it be ascertained whether or not there'is anything left to be partitioned.

6. Should J. P. Bolding not be repaid the excess contributed by him to the partnership as herein provided, judgment shall be rendered in his favor against W. H. Bolding for one-half of such excess remaining unpaid, and in such event, he shall have judgment foreclosing his attachment lien hereinbefore referred to, and execution for any balance after the sale of said lots under said attachment, and the trial court shall retain jurisdiction hereof until it be ascertained whether or not it becomes necessary to foreclose such attachment lien.

Reversed, with instructions.

On Motion for Rehearing.

Appellants contend that we are inconsistent in holding that B. R. Bolding did not acquire the vendor’s lien as against the trust company by her purchase of the four vendor’s lien notes, but that she did thereby acquire a vendor’s lien as against the partnership of J. P. and W. H. Bolding.

Our view of this matter is this: B. R. Bolding supposed that she was purchasing these notes from the trust company; but as in said transaction she acted through W. H. Bolding, who knew that the trust company did not propose to sell said notes, but was demanding their payment, she is bound by the knowledge of her agent, and as against the rights of the trust company she acquired nothing. As W. H. Bolding in said transaction was also representing the partnership of which he was a member, and by the pretended sale of said notes received the money of B. R. Bolding, and applied the same to the benefits of the partnership, and as B. R. Bolding had no actual knowledge that the trust company was not willing to sell said notes, as between her and the partnership, W. H. Bolding was the agent of the partnership, and the partnership is bound by his representations that B. R. Bolding, by the payment of the principal and interest of said notes, was acquiring title to the same, and consequently the vendor’s lien for their security. We think that J. P. Bolding is es-topped from repudiating the transaction consummated by his partner for the payment of a partnership debt. .

The motion for a rehearing is overruled.

Overruled.
      <@=i>Por other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      <&wkey;fFor other oases see same topic and KEY-NUMBER. in all Key-Numbered Digests and Indexes


author: HARPER, C. J.

text:
    HORN v. PRICE et al.
    (No. 787.)
    (Court of Civil Appeals of Texas. El Paso.
    Jan. 24, 1918.)
    I. Appeal and Error <&wkey;1045(3) — -Harmless Error — Challenge to Juror.
    Where a juror stated he had an opinion which it would take evidence to remove, but record does not show who the opinion favored, and he said he would disregard the opinion, and appellant did not take advantage of a peremptory challenge, there was no error in refusing a challenge for cause.
    2. Execution <&wkey;194(2) — Claims oe Third Persons — Evidence.
    If a. judgment debtor sold cattle belonging to claimant, and bought other cattle for claimant with the money, and these were levied on, a question to the execution debtor as to whether claimant owned cattle in the county was not objectionable as being too general as to time; time being immaterial.
    3. Evidence &wkey;>175 — Best and Secondary-Tax Rolls — Ownership oe Chattels.
    Where judgment debtor wasl disclaiming ownership of property levied on, an objection, to a question as to whether he did not render the property in his own name, on the ground that the tax rolls were the best evidence, was erroneously sustained, because the tax rolls are not the best evidence. .
    4. Evidence <@^186(9) — Best Evidence— Tax Rolls.
    The rendition sheet is the best evidence of the fact of rendition, and not the tax rolls.
    5. Appeal and Error ‘@^692(1) — Matters. Reviewable — Bill oe Exceptions.
    Where the bill of exceptions does not show what the answer would have been, no error is-shown in the sustaining of an objection to evidence.
    6. Execution <&wkey;196 — Claim oe Third Party-Ownership — Question eor Jury.
    Evidence of a third party’s claim to property levied on under execution held to take to the jury the question as to ownership.
    7. Execution <&wkey;194(l) — Claimants of Property — Burden oe Proof.
    Under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 7786, providing that the burden of proof' is on one claiming property in the hands of a judgment debtor on which execution is levied, the fact that the judgment creditor was permitted to open and close did not shift the burden-of proof, or entitle the court to place the burden on such creditor.
    Appeal from District Court, Ector County;. Chas. Gibbs, Judge.
    Action by J. C. Horn against Ben Callison. Judgment for plaintiff. Levy under execution having been made, Tommie Price filed' a claimant’s bond. Prom judgment in favor of claimant, plaintiff appeals.
    Reversed and remanded.
    Grisham & Grisham, of Sweetwater, T. P. Grisham, of Big Springs, W. P. Leslie, of Colorado, Tex., and Jerrell C. Babb, of Sweet-water, for appellant. Judkins & Murphy, of El Paso, for appellees.
   HARPER, C. J.

J. C. Horn, having a valid judgment against appellee Callison and' one Steen, caused alias execution to be issued to Ector county and served by the sheriff upon certain cattle, and Tommie Price-filed claimant’s bond, and this appeal is from, a judgment in her favor entered upon the verdict of a jury in answer to special issues, submitted.

The first assignment urges that it was-error for the court to refuse appellants’ challenge for cause of a juror who stated that he had an opinion as to the merits of the case-which it would take evidence to remove. There is nothing in the record to show which side his opinion favored. The qualification, of the bill of exception by the trial judge recites that the juror stated, if taken, he would disregard the opinion and try the case according to the law and the evidence adduced upon the trial. It further recites tha.t appellant had another peremptory challenge when this challenge for cause was made. There was no error in refusing the challenge under such circumstances. Chapman v. State, 66 Tex. Cr. R. 489, 147 S. W. 580.

The[ following written agreement as to facts is contained in the statement of facts:

“(1) That the cattle involved in this suit were purchased by Ben Callison from W. T. Whittenberg and Fount Armstrong, and that the same were paid for by the personal check, or checks, of Ben Callison, -drawn on the Midland National Bank of Midland Tex., given by Ben Callison and drawn by him on his individual account.
“(2) That Ben Callison never had but one account at said bank at any one time, and that said account was at all times in his individual name, and that said Callison drew checks on said account for his living and running expenses and for various and sundry expenses, and that said bank, nor no official thereof, was ever informed by said Callison, or any other person, that any part of said account was in any manner a trust fund, or that Tommie Price, or any other person, owned the same in whole or in part.
“(3) That Tommie Price has at no time had an account in said bank.
“(4) That during the fall of 1913 Ben Calli-son owed the Midland National Bank a note for about $400, secured by a chattel mortgage on certain cattle, other than those involved in this suit, and that he sold said cattle to J. R. Dublin, who paid off said note and delivered to Ben Callison the surplus after paying off said note, which surplus was placed to the -credit of the individual account of Ben Callison in the aforesaid bank, and subsequently the said Callison purchased the cattle involved in this suit and paid for the same in part or whole by check, or checks, drawn upon said fund.
“(5) That, when Ben Callison purchased the -cattle involved in this suit from Fount Armstrong and T. W. Whittenberg, he did not require or receive a bill of sale conveying said cattle, and that he, the said Ben Callison, has never made a bill of sale conveying said cattle to Tommie Price, or any other person.
“(6) That, when said cattle were levied upon by the sheriff of Ector county, they were in Ector county, Tex., and located upon the S'la-tor ranch, and that Ben Callison had control and possession of said ranch ánd all stock located thereon, and that Tommie Price is the stepdaughter of Ben Callison, and lives with him.”

The record further discloses that Tommie Price is the stepdaughter of defendant in attachment, Ben. Callison; that during the time from eight years of age until marriage, from time to time, certain cattle had been given to her by different parties; they were taken in -charge by said Callison and cared for with his cattle; that from time to time as he sold his cattle hers were sold also. It now being testified by said Callison that he had something over a thousand dollars which had come into his possession from such sales of her cattle, and that it was with this money these cattle in controversy were purchased for her. There is no evidence in the record that the stepdaughter knew of the purchase nor in any way consented to it or accepted the cattle as hers, she not having testified in the case. We also note that the claimant’s bond is signed, her name, Tommie Price, by F. A. Judkins, attorney, so the issue is: Who became the owner of the cattle levied upon by reason of the purchase?

The second assignment charges error in permitting witness Ben Callison to answer the question: “State whether or not Tommie Price had any cattle in Ector county.” Answer was, “Yes.” The grounds of objection being: The question was leading, was too indefinite, because it does not confine the knowledge of witness to the specific cattle involved in this transaction and does not fix the time of such ownership. Bearing in mind that the issue is, did Tommie Price have cattle which were' sold by Callison and the. proceeds invested for her, in the cattle in controversy, and whether the title to such cattle so purchased vested in her, the question and answer were not subject to the objection assigned, because the time she owned cattle is immaterial if she in fact owned cattle and the money paid for these were the proceeds of sale thereof. This disposes of the sixth, as it Is to the same effect.

The third assignment is that the court erred in sustaining the objection of defendant to the question to Callison: Did yon not render this property in your own name? The reason for the objection is that the tax rolls are the best evidence. The proposition is that the evidence was intended for impeachment of the witness. The reason for the objection is not tenable. The original rendition sheet would show an affidavit as to the ownership, but the rolls would not, and he should have been required to answer1 the question over such objection.

The fifth is that the tax rolls were not admissible for defendant. The assignment is good; the rendition sheet is the best evidence of the fact of rendition.

There is no merit in the fourth. The court sustained an objection to a question, and the bill of exceptions does not reveal what the answer would have been.

The seventh is based upon the proposition that the court should have given a peremptory instruction for the plaintiff, appellant here. After a careful survey of the evidence, we conclude that the evidence is such as to require the court to submit the issue to the jury.

The ninth, being to the same effect, is overruled for the same reason.

The eighth charges that it was error to place the burden of proof upon the appellant by the court’s charge. Article 7786, Vernon’s Sayles’ Statutes of Texas, reads:

“If it [the property] was taken from the possession of the defendant in such writ or any other person than the claimant, the burden of proof shall be on the claimant.”

And it is admitted that the defendant in-execution had possession of the cattle. It was therefore error to place the burden of proof upon appellant, and the fact that appellant was permitted to open and close the case would not shift the burden.

For the reasons assigned, the cause is reversed and remanded for a new trial.

WALTHALL, J., did not sit, being absent on committee of judges assisting the Supreme Court.
      <§=>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: MOURSUND, J.

text:
    AMERICAN INDEMNITY CO. v. BOARD OF TRUSTEES OF ROBSTOWN INDEPENDENT SCHOOL DIST.
    (No. 5914.)
    (Court of Civil Appeals of Texas. San Antonio.
    Jan. 2, 1918.
    Rehearing Denied Feb. 6, 1918.)
    1. Schools and School Districts @=>81(2)— Contractors — Bond—Notice of Contractor’s Default.
    The mere failure on the part of school trustees to give the surety notice of the default in time of performance of the contractor to erect a school building, which the parties stipulated should work a forfeiture, was not sufficient to show waiver by the trustees of the contractor’s duty to request, in writing, additional time for doing the work.
    2. Schools and School Districts @=>81(2)— Notice to Surety oe Default of Contractor-Evidence.
    In an action by school trustees against the surety on the bond of the contractor to erect a school building, evidence held insufficient to show actual notice to the surety through its local agent of the failure of the contractor to complete the building in time.
    3. Schools and School Districts @=>81(2)— Contractor’s Bond — Notice of Default.
    If the local agent of the surety knew that the building was not completed by the contract date, the fact did not charge the surety with notice of the contractor’s default, where, under the contract between the. latter and the board of trustees of the school district, the time could have been extended Without knowledge of the surety.
    4. Schools and School Districts @=>81(2)— Contracts — Bond — Notice of Default —Condition Precedent — Construction.
    Though the bond given by the contractor did not specifically state that failure to give the surety notice of default as to time for completion1 as provided should release the surety, the provision as to notice created a condition, compliance with which was a necessary prerequisite to recovery on the bond; the language being that usually employed in drafting a condition precedent, the paragraph embracing all the obligations imposed on the trustees, and the intention clearly appearing from the entire instrument that the liability of the surety was conditioned on the performance by the trustees of the obligation as to notice imposed on them.
    5. Principal and Surety @=>123(3) — Release of Surety — Failure to 'Give Notice.
    It is not Texas doctrine that a surety for hire is only released from the payment o'f damages for his principal’s delay in completing the work by the owner’s failure to give the notice of default required by the bond.
    6. Schools and School Districts @=>81(2)— Contractor’s Bond — Default—Notice to Surety.
    Where the surety on the bond of the contractor contracted with the board of school trustees for notice of the contractor’s failure' to complete the building in time, tho. effect to be given the breach by the school trustees was not dependent on the rights given the surety by the contract; and the question whether the surety would have derived benefit from such notice was not material.
    7.Schools and School Districts @=>81(2)— Contractor’s Bond — Notice of Default to Surety — Actual Notice — Effect.
    Though the surety had actual notice of the contractor’s default as to time of completion, compliance with the provision of the bond requiring notice to the surety of such default, on which provision the liability of the surety was conditioned, was necessary.
    Appeal from District Court, Nueces County; W. B. Hopkins, Judge.
    Suit by the Board of Trustees of the Robs-town Independent School District against C. D. Patterson and the American Indemnity Company. From a judgment for plaintiff, after dismissal as to Patterson, the indemnity company appeals.
    Judgment reversed, and judgment rendered for the Company.
    Terry, Cavin & Mills, of Galveston, E. P. Scott, of Corpus Christi, and E. I-I. Cavin, of Galveston, for appellant. 6. R. Scott, Boone & Pope, of Corpus Christi, for appellee.
   MOURSUND, J.

The board of trustees of the Robstown independent school district, in its corporate capacity, sued C. D. Patterson, as principal, and American Indemnity Company, as surety, upon a bond for the faithful performance of a contract between Patterson and said board of trustees to ' erect a school building for said school district, which contract was breached by Patterson. Tho pleadings of the parties are lengthy, and their nature will be sufficiently disclosed in discussing the various assignments of error. The case was dismissed as to Patterson, and upon a trial without a jury judgment was rendered against the American Indemnity Company for $20,160.

The findings of fact and conclusions of law of the trial court are lengthy, and therefore, instead of copying the same in full, we will, as we dispose of the assignments of error, copy of state the substance of those to which the assignments relate.

The contract provided, in substance, that Patterson should, within six months from the ■ date of the delivery to him of a certain $20,-000 issue of Robstown independent school district bonds, erect a two-story brick building. The bonds were delivered to Patterson on the 7th or 8th of January, 1914. When Patterson abandoned the building in October, 1914, it was about 55 per cent, completed. The specifications for the construction of the building contained the following provision:

“The contractor shall be entitled to one day in addition to said stipulated time for each day’s delay resulting from additional work or changes in work required from time to time or for specific delays from other causes, as may be approved by the architects or owners, which additional time must be stated by the contractor in writing within eight days of such delay, giving dates and causes, which if correct, shall be certified by the architect or owner. Should the contractor neglect to ask for additional time, within the time specified above, it is mutually agreed that no just claim exists or shall exist for an extension of time.” ,

No request by the contractor for additional time was made in the manner specified. The court’s twentieth finding of fact reads:

“I find that due to weather and other conditions delays occurred in the progress of construction of said building, on account of which Patterson did not make, and the board of trustees did not require him to make, application in writing for additional time,- as provided in said contract, but said board of trustees waived said requirement of said contract.”

The indemnity bond contained the following provision:

“Provided, however, that in the event of any default on the part of said principal in the performance of any of the terms, covenants, or conditions of said contract, or in the event of any claim, demand, judgment, lien, cost, or fee being obtained or made against the said obligee, for or on account of the prosecution of the work as aforesaid, written notice thereof with a statement of the principal facts showing such claim, demand, judgment, lien, cost, or fee, and the date thereof, shall within thirty days after the same shall have come to the notice of the said obligee, be given to the American Indemnity Company at its office in the city of Galveston, Tex.”

The first notice given by the board to the indemnity company consisted of a letter written by Mr. Herrington, superintendent of Robstown schools, dated October 1, 1914, calling attention to the fact that the contract required the completion of the building by the 7th day of July, 1914, and that the building was little more than half completed, and Patterson had practically quit work. The court’s twenty-fourth, twenty-seventh, and thirty-third findings of fact are as follows:

“(24) I find that as soon as said board of trustees ascertained that said Patterson had abandoned said building, and within 30 days after said building had been so abandoned, said hoard of trustees in writing notified said American Indemnity Company that said building had been abandoned, and demanded that said American Indemnity Company perform said contract and complete and finish said building.”
“(27) I find that defendant American Indemnity Company had notice that said school building was not completed, furnished, and equipped in accordance with said contract within the time stipulated in said contract.”
“(33) I further find that there was no provision in the contract in this cause requiring 20 per cent, to be withheld by the board of trustees until the completion of said building, and that the bond sued on in this cause contained no such provision, and that the bond executed by the American Indemnity Company as surety did not provide that said American Indemnity Company should have the right, after default by Patterson, at its option, to assume or sublet said contract and to proceed thereunder as if no default or abandonment had occurred, and that said bond did not contain any provision, in case of default by Patterson, entitling the American Indemnity Company to subrogation, and that the bond contained no provision providing that failure to give notice of default should release the surety.”

The court’s sixth, seventh, and eighth' conclusions of law are as follows:

“(6) I find that a failure to, comply with that provision in the bond sued on as to notice would not release the surety from liability in the absence of a showing as to its materiality in the absence of a provision in the contract itself providing that the same should release the surety, or that the surety should have the right to-enter upon and take possession of the material on the ground, and become subrogated to the rights of the principal.”
“(7) I find that the defendant American Indemnity Company, the surety, had notice that the building was not completed within six months from the date of the delivery of the-bonds to Patterson.
“(8) I find that notice of Patterson’s default in the performance of his contract was given to the American Indemnity Company, the surety, in accordance with the contract.”

The first .eight assignments of error relate to the issue of notice, it being contended, with regard to questions of fact, that the-court’s findings of fact numbered 24, 27, and 33 are contrary to the great preponderance of the evidence, and that the evidence fails to show that notice as provided for in the'bond was given by the trustees to the indemnity company of the default of Patterson in failing to complete the building within the time contracted for, and further that the evidence does not show that the company had actual notice of such default, and with regard to questions of law that the court’s conclusions numbered 6, 7, and 8 are erroneous, and that in order for the trustees to recover it was incumbent upon them to allege and prove compliance on their part with the provision in the bond with respect to notice, regardless of whether or not the company had actual notice of the default.

The twenty-fourth finding of fact is supported by the evidence, and so is the thirty-third, with the exception of the statement “that the bond contained no provision providing that failure to give notice of default should release the surety.” The provision of the bond with respect to notice has been copied above, and its legal effect will be considered in the discussion of the questions of law. The court did not specifically find as a fact that notice of the default in completing the building within the time provided in the contract was given by the trustees within 30 days after such default. It is true that he found, and the finding is not challenged, that:

“Hue weather and other conditions delays occurred in the progress of construction of said building, on account of which Patterson did not make, and the board of trustees did not require him to make, application in writing for additional time, as provided in said contract, but said board of trustees waived said requirement of said contract.”

In view of this finding the court appears to have been of the opinion that notice given after the abandonment of the work was a compliance with the provision of the bond. Under the terms of the contract the time for-completing the building expired on July 7th or 8th, that is, within six months after the delivery of the bonds to Patterson, and the failure to complete it within such time constituted default of which notice should have been given, unless the time was extended as provided by the contract. Herrington’s letter was dated October 1st, and constituted the only written notice to the company given by or in behalf of the trustees. If it be.conceded that the time for completing the building could be extended in the manner found by the court, without releasing the surety, concerning which we have grave doubts, the fact remains that the court did not .find that the extensions agreed upon were sufficient to show a compliance with the provision with respect to notice. The evidence adds nothing to the finding, in fact, there is no evidence that the board of trustees, or any official thereof, thereto authorized, ever undertook to waive the request in writing or to grant additional time. The mere failure to do the very thing which the parties stipulated should work a forfeiture is not sufficient to show waiver. Davis v. La Crosse Hospital Ass’n, 121 Wis. 579, 99 N. W. 351, 1 Ann. Cas. 950. We therefore conclude that the findings of fact fail to show a compliance by the trustees with the provision of the bond with respect to notice.

The court’s twenty-seventh finding is to the effect that the indemnity company had notice of the default, presumably intending to find that it had knowledge thereof at the time of the default or within thirty days thereafter. There is no evidence to the effect that the indemnity company had actual notice of such default.

The court’s twenty-second finding of fact is as follows:

“I find that at the time the bond executed by said Patterson, as principal, and American Indemnity Company, as surety, was executed, and during the time said Patterson was engaged in the construction of said building, said American Indemnity Company had an agent in the city of Corpus Christi, Nueces county, Tex., who represented said defendant in making said bond, and at the time said bond wa's executed said American Indemnity Company and said Patterson entered into an agreement whereby said Patterson was required to deposit in the First State Bank of Bishop, in the town of Bishop, Nueces county, Tex., for the purpose of paying for the lumber, labor, and other material used in and about the construction of said building, and the performance of said contract with said board of trustees, and that none of such funds should be withdrawn from said bank by said Patterson except by checks countersigned and approved by said agent of said American Indemnity Company, and I further find that pursuant to said agreement said Patterson deposited the proceeds of said , bonds in said First State Bank of Bishop on or about the 24th day of January, A. D. 1914, and that thereafter from time to time drew checks on said funds which were honored and paid by said First State Bank of Bishop until all said funds were withdrawn out of said bank, and that each and all of said checks were-so countersigned by the agent of said American Indemnity Company.”

The correctness of this finding may be conceded, but there is no evidence that the funds were not all checked out prior to July 7, 1914; hence it cannot be said that Southgate knew the building was not completed. He did not reside in Robstown, and may have relied upon statements by Patterson and handled the matter negligently. The cashier of the bank did not furnish a list showing the dates and amounts of the various checks approved by the agent of the bonding company, nor did he state when the last of the funds derived from the bond sale were checked out. He stated that Patterson’s account showed a balance of $8,175.59 on July 7th, but he also stated that Patterson deposited funds received for erecting a building at Bishop and checked against the account in payment for expenses incurred at Bishop as well as those for the Robstown building. The agent should doubtless have kept up with the progress of the work, but there is no evidence that he did, and therefore it cannot be said that the indemnity company had actual notice of the failure of Patterson to complete the building. But, if the agent knew that the building was not completed by July 7th, that fact would not charge the company with notice of Patterson’s default; for under the contract the time could have been extended without the knowledge of the indemnity company. There is no evidence that the agent knew the time had not been extended.

The seventh and eighth conclusions of law filed by the trial court are erroneous, in view of oür conclusions with- reference to the facts, and the judgment cannot be sustained unless the sixth conclusion of law is correct. While the bond does not contain the specific statement that the failure to give notice as therein provided shall release the surety, we think it is evident that the provision creates a condition, compliance with which is a necessary prerequisite to a recovery on the bond. The language is that usually employed in drafting a condition precedent ; the paragraph embraces all the obligations imposed upon the trustees; and we think the intention clearly appears from the entire instrument that the liability of the indemnity company is conditioned upon the performance by the trustees of the obligations imposed upon them. In the case of Walsh v. Methodist Church, 173 S. W. 241, it was held that the surety company was released because the church did not give notice of the failure to complete the building in the time prescribed in the contract, but the court laid stress upon the fact that the bond gave the surety company the right to assume and sublet the contract and to receive all moneys which were to be paid to the contractor. In this "case neither the bond nor the contract gave the indemnity company the right to sublet-the contract, and the consideration was paid to Patterson in advance. We are therefore confronted with the question whether this difference in the contracts calls for the application of different rules of law. The appellees do not concede the correctness of the holding in the cited case in so far as the court held that the surety was entirely released, and contend that the failure to give notice should only be held to operate as a release from any claim for damages on account of delay. In support of this proposition, they cite cases from other states, while appellants cite a number of cases holding that the surety is entirely released. We find that the decisions vary as the conception of the status of sureties for hire varies. In a majority of the states it is held that the business of surety companies is essentially that of insurance, and that therefore their rights and liabilities under their contracts will be governed by the laws of insurance. See note to Hormel v. American Bonding Co., 33 L. R. A. (N. S.) 513. Practically all of these cases go back to eases decided by the Supreme Court of Washington for authority, and the substance of their holdings may be said to be that provisions similar to the one under consideration in this ease will be treated as follows: (1) A failure to give notice of default in not completing the building within the prescribed time will release the surety from the payment of damages for delay ; (2) the failure to give notice of default in paying debts for material, etc., will entirely release the surety. This holding, we think, is not supported by any satisfactory reason, and deprives the parties of the right to contract that the failure to give notice of one default (failure to complete in time agreed upon) shall have the same effect as failure to give notice of another default (the nonpayment of bills for material).

“Parties may think some matter which is apparently of very little importance essential, and if they sufficiently express an intention to make the literal fulfillment of such a thing a condition precedent, it will be one.” Elliott on Contracts, § 1580.

See, also, section 2098.

“Where notice is stipulated for in the contract, failure to give such notice will discharge the guarantor altogether, and he may avail himself of this defense without showing himself damaged in any amount by not receiving notice. It is like any other conditional contract, and cannot be enforced except upon performance of the condition.” .Stearns on Suretyship, § 68; Brandt on Suretyship & Guaranty (3d Ed.) § 113, note 37.
“To the extent, and in the manner, and under the circumstances pointed out in his obligation he is bound, and no further.” Miller v. Stewart, 9 Wheat. 680, 6 L. Ed. 189.

In Indiana the courts recognize á distinction in the construction of contracts of compensated sureties, as distinguished from voluntary sureties, and construe ambiguous language against the surety, but when a condition requiring notice of default is plainly expressed, or its meaning has been arrived at, they enforce the same just as strictly as if the contract had been that of a voluntary surety. Knight & Jillson v. Castle, 172 Ind. 97, 87 N. E. 976, 27 L. R. A. (N. S.) 573; Beech Grove Imp. Co. v. Title Guaranty Co., 50 Ind. App. 377, 98 N. E. 373; Wainwright Trust Co. v. U. S. Fidelity & G. Co. (Ind. App.) 114 N. E. 471. In the first-cited ease the court said:

“This is a plain stipulation of the bond, and by it the liability of the guarantor is measured, and upon it he has a right to stand. It is not ambiguous or indefinite, and we have no right to say that the obligee or the gratuitous .beneficiary did not thereby get all the protection either was entitled to expect; sic seripta est. Neither is it a question whether the condition is reasonable or unreasonable, so long as it is not fraudulent or unconscionable. Dobbin v. Bradley, 17 Wend. 422, where Bronson, J., speaking for the court, says: ‘The question is not whether the conditions by which he has thought proper to qualify his liability were either reasonable or unreasonable, nor whether they could in any way prove beneficial to the defendant. He had a right to judge of that matter for himself, and we have no authority to review his judgment.’ ”

The cases of National Surety Co. v. Long, 125 Fed. 887, 60 C. C. A. 623, and U. S. Fidelity & Guaranty Co. v. Rice, 148 Fed. 206, 78 C. C. A. 164, are cited and approved in the Indiana cases. In the Long Case the contention was made that a provision for notice was immaterial in view of the provisions of the .building contract, and the court said:

“Moreover, it is not indispensable to the .validity or to the enforcement of this plain covenant of the obligee — this condition precedent to the liability of the defendant under the bond— that the latter should either establish its beneficence or its materiality, or that it should show that it has sustained injury from the failure to fulfill it. Parties to agreements have the right and the power to contract that things immaterial as well as things material shall be the subjects of their warranties, or of conditions precedent to their respective liabilities, and their contracts in the one case are as legal and binding as in the other. The all-sufficient, the conclusive, answer to the suggestion that the subject of the warranty or of the condition precedent is immaterial, and its breach without effect,-is that the parties had the right to agree and they have contracted otherwise. The immateriality of a warranty or of a condition precedent made by the agreement of the parties and the innocuousness of a failure to perform it do not nullify or mitigate the fatal effect of the failure prescribed by their contract.”

Aside from the case of Walsh v. Methodist Church, supra, we find no Texas case in which provision in the bond requiring notice was considered, but we find that our Supreme Court in the case of Lonergan v. S. A. Trust Co., 101 Tex. 63, 104 S. W. 1061, 106 S. W. 876, 22 L. R. A. (N. S.) 364, 130 Am. St. Rep. 803, has criticized the Washington cases in which a distinction is made between compensated and voluntary sureties, and, in effect, held that the rule of strictissimi juris is applicable to suretyship for hire. This being the case, the doctrine that the surety is only released from the payment of damages for.delay by the failure to give .the notice required by the bond finds no support in our decisions, and we believe it cannot be sustained without making a different contract for the parties than the one expressed by their plain language. We are also of the opinion that the court’s sixth conclusion of law is erroneous in holding that the effect to be given the breach by.the trustees of the provision of the bond with respect to notice is dependent upon the rights given the indemnity company by the contract for the construction of the building. The indemnity company considered notice of the default in failing to complete the building important to it, and contracted for it in identically the same language that it contracted for notice of the failure to pay bills. It is plain that it made the liability dependent on the compliance by the trustees with the provision. That it had the right to so contract, we think, is shown by the authorities quoted from, and the question of whether it would have derived benefits from the notice is not material. However, even though the building contract may not have been as favorable to the surety as those considered in other cases, the conclusion that the company would have derived no benefit from notice can rest only upon conjecture and speculation.

We also hold that, even if the indemnity company had had actual notice of such default, the trustees would not be relieved from the duty of complying with the provision up-, on which the liability of the indemnity company was conditioned under the terms of the contract.

Our conclusions with respect to the question of notice require that the judgment be reversed, and judgment rendered in favor of appellant. It will therefore be unnecessary to consider any other assignments of error.

Reversed and rendered.
      @=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes