author: RICE, J. KEY, O. J.

text:
    W. R. MILLER & CO. v. HOBDY et al.
    (Court of Civil Appeals of Texas. Austin.
    Jan. 15, 1913.
    On Motion for Rehearing, June 25, 1913.)
    1.Principal and Agent (§ 170) — Authority of Agent — Rights of Third Persons— Ratification.
    Where a principal, who has expressly limited the authority of his agent, fails to object to an entirely different course of business, he must be deemed to have ratified the course of business.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 638-643; Dec. Dig. § 170.]
    2. Banks and Banking (§ 130) — Deposits— Authority of Agent.
    A bank, which knew that the authority of an agent to draw checks in the name of the principal was limited to the drawing of checks for spot cotton, could not justify the payment of checks drawn by the agent 'for cotton futures, where it knew that fact at the time the checks were drawn and paid, or had knowledge of facts as would put it on notice that the checks were drawn in payment of cotton futures, and the principal to hold the bank liable for such payments need not show that the bank received benefits from the misapplication, but need only show that the bank, chargeable with notice of the facts, honored the checks, thereby aiding the agent in misappropriating the funds.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 319-325, 327; Dec. Dig. § 130.]
    3. Banks and Banking (§ 130) — Deposits— Authority of Agent.
    Where a bank, knowing that an agent had authority only to draw checks in the name of his principal for spot cotton, honored checks drawn by the agent payable to the manager of a concern conducting a bucket shop, and the bank knew the business of the concern and credited the amounts of the checks honored to the account of the concern, it was liable to the principal for the misappropriation of his funds..
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 319-325, 327; Dec. Dig. § 130.]
    On Motion for Rehearing.
    4.Appeal and Error (§ 1175) — Disposition of Case on Appeal — Remand.
    Where the evidence greatly preponderates against the judgment, but there are facts tending to support the findings, the Court of Civil Appeals cannot reverse the judgment and render judgment for the defeated party, but must reverse and remand the case.
    [Ed. Note. — For other cases, see Appeal and Error. Cent. Dig. §§ 4573-4587; Dec. Dig. § 1175.]
    Key, C. J., dissenting in part
    Appeal from District Court, Brown County; John W. Goodwin, Judge.
    Action by W. R. Miller & Co. against R. L. Hobdy and another. From a judgment granting insufficient relief, plaintiff appeals.
    Reversed and remanded.
    Snodgrass & Dibrell, of Coleman, and A. L. Curtis, of Belton, for appellant. Goodson & Goodson, of Comanche, for appellees.

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

   RICE, J.

This suit was instituted by W. R, Miller <fc Co., appellants, as plaintiffs below, against R. L. Hobdy and the First National Bank of Comanche, Tex., for the recovery of, certain sums of money belonging to them claimed to have been converted by appellees, by means of certain checks unlawfully drawn by Hobdy in the name of Miller & Co. on said First National Bank. There was a trial before the court without a jury, resulting in a judgment in favor of plaintiffs against Hobdy in the sum of $8,111.75, less the sum of $413.51, for which judgment was rendered against said First National Bank, from which judgment appellants have appealed.

The only question involved in this appeal is as to the correctness of the judgment rendered in appellants’ favor against the First National Bank: It is contended on the part of appellants that they were entitled to judgment against said bank for the sum of $5,750.50, which was the total amount of checks claimed to have been unlawfully drawn during the month of October, 1905, by Hobdy against them, through said First National Bank, which had been paid by said bank with their funds on deposit therein.

The facts, briefly summarized, disclose: That appellants were a partnership composed of W. R. Miller and B. A. Ludlow, who during the years 1903, 1904, and 1905 were engaged in the business of buying spot cotton at various points; their home office being Brownwood, Tex. That Ludlow was the active member of said firm, having • charge of the business thereof, residing at Brown-wood. That plaintiffs employed R. L. Hobdy during the years 1904 and 1905 to purchase spot cotton for said firm; his duties being those of a “take-up man,” whose express authority was to purchase spot cotton f. o. b. cars, and to pay for same by draft on them with bill of lading attached. That plaintiffs were not engaged in buying or selling cotton futures, and said Hobdy had no authority from them to buy or sell cotton futures, and no authority from them to draw cheeks or drafts against said firm or its account for account of cotton future deals of any character whatever, nor had he ever done so, prior to the drawing of the checks in question. That said Hobdy, with authority above stated, was engaged in buying cotton for plaintiffs at Comanche during the years 1904 and 1905, and bought various and sundry lots of cotton at that place for them. That he made arrangements with said First National Bank, by which said bank opened up, an account in the name of plaintiffs, permitting Hobdy to draw checks on them in their name, per himself on said bank in payment of cotton purchased by him for plaintiffs. That, when sufficient cotton had been purchased in this manner to constitute a shipment, he would then draw on plaintiffs in favor of said bank with' bill of lading attached for the amount of such cotton. That plaintiffs knew of the arrangement thus made with the bank, and knew how Hobdy was buying and paying for the cotton purchased by him for them, making no objection thereto, and never at any time informing the bank that he had no authority to make such arrangements and pay for cotton by checks on it in the name of plaintiffs. That said bank did not know of the limitation thus placed by plaintiffs on Hobdy’s authority, and supposed that in opening the account with said bank in the name of plaintiffs, and drawing checks in said firm’sname to pay for-cotton actually purchased, he was acting within the scope of his authority. That in 1905 R. Beamer, as agent, conducted a “bucket shop” in Comanche, under the name of the Comanche Cotton Exchange. That Beamer attended to all the business of said exchange, which was the buying and selling of cotton futures, which exchange belonged to Cellar of St. Louis, and Beamer, as his agent, deposited all cash and checks belonging to said exchange that came to him as its agent in the First National Bank of Comanche, Tex., and said bank remitted, when requested by Beamer, all such moneys to the Bank of Commerce at St. Louis, for Cellar; this being usually done at the close of each day’s business. That said bank and its officers knew of the business conducted by said exchange, and knew that Beamer was conducting said business as its agent. The account of the Comanche Cotton Exchange with said bank was kept in the name of the Comanche Cotton Exchange, and, when remittances were made to Cellar, said Beamer would draw against this account in favor of the First National Bank, and said bank would then wire the remittances to the St. Louis Bank for Cellar. That Hobdy, during 1905, at Comanche bought and sold cotton futures through the Comanche Cotton Exchange, transacting the business with R. Beamer. These future transactions were conducted by Hobdy in his own name, and were unknown to plaintiffs. On October 5th, 1905, Hobdy drew a check for $700, and on the 6th of October, 1905, Hobdy drew a cheek for $500, another October 12th for $1,250, another October 13th for $1,000, another October 14th for $1,000, and another October 16th for $1,000, each of which were drawn on the First National Bank of Comanche in favor of said Beamer, and each signed by Miller & Co., per H., and each of said checks were forthwith deposited by R. Beamer in the First National Bank to the credit of the uomanche Cotton Exchange, and each of them were given by Hobdy in settlement and adjustment of his individual and personal cotton future transactions with said cotton exchange; said Miller & Co. having no connection with said transactions or any knowledge thereof. On the 16th of October, 1905, said Hobdy drew a check in his own favor on said First National Bank for $300, signing the name of Miller & Co. to said check, by Hobdy, the proceeds of which were applied by the First National Bank to the payment of an individual indebtedness of Hobdy to said bank, which last transaction forms the basis of the judgment rendered against the bank in behalf of appellants. Said bank paid all the cheeks above enumerated out of the funds of W. R. Miller & Co. then on deposit in said bank, which were sufficient for said purpose.

We do not think the First National Bank was in any way affected by the express authority given to Hobdy limiting him only to the purchase and payment of cotton by draft drawn on Miller & Co. with bill of lading attached, because it appears that by subsequent dealings with said Hobdy an entirely different course of business was transacted, of which appellants had knowledge; and, failing to object thereto, must be held to have ratified such course of dealing.

But it clearly appears from the evidence that said bank knew that Hobdy’s agency was for the purpose of buying spot cotton, and was limited by his course of dealing with them to the drawing of drafts in the name of Miller & Co. in payment therefor. So that they were not, by reason of these facts, justified in the payment of any checks drawn by Hobdy on Miller & Co., in payment for cotton futures. But it is contended by said bank that, unless it had actual knowledge of the fact that the cheeks above set out were drawn by him in payment for cotton futures, then they are absolved from liability to appellants. We think it is immaterial as to whether they had affirmative knowledge of this fact or not, provided it is made to appear that at the time said checks were drawn and paid they had knowledge of such facts and circumstances as would put them upon notice that such checks were drawn in payment of cotton futures, because, if they were charged with such notice by reason of such facts, then payment by them of such checks would be such a diversion of the funds of Miller & Oo. as would subject them to liability.

Now, are there such facts and circumstances in this record? We think there are. First, it appears that Beamer succeeded one Gowan in the management of this cotton exchange, which was located on the ground floor just across the square from appellee’s bank, was openly conducted during' the fall of 1904 and 1905, and liberally patronized by the public, and that Gowan had fully explained the nature and scope of the business to the bank. At the time that Beamer took charge of this cotton exchange, it appeared that he was introduced to the officers of said bank, who opened an account with the cotton exchange, with a knowledge of the fact that its only business was that of selling cotton futures. Its officers knew that Beamer had no other business than that of conducting said cotton exchange; and immediately upon presentation by Beamer of each of said checks they turned to. the books and credited the amounts thereof to the account of said cotton exchange, and thereafter either remitted to Cellar & Co., as per their arrangement heretofore indicated, or paid the same out to various persons who were dealers with said exchange.

These facts were sufficient, we think, to charge the bank with the knowledge that said checks were not drawn by Hobdy in payment for spot cotton; and were sufficient, in our judgment, to put them upon notice that they were given in payment for cotton futures; and the bank in so honoring said cheeks, and at once crediting the proceeds thereof to the account of the cotton exchange, must be held liable. See Commercial & Agricultural Bank v. Jones, 18 Tex. 811; U. S. Fidelity & Guaranty Co. v. Adoue & Lobit (Sup.) 137 S. W. 648, 37 L. R. A. (N. S.) 409; Id. (Sup.) 138 S. W. 383 (on rehearing); First State Bank of Bonham v. Hill, 141 S. W. 300; Interstate Nat. Bank v. Claxton, 97 Tex. 569, 80 S. W. 604, 65 L. R. A. 820, 104 Am. St. Rep. 885; City Nat. Bank v. Martin, 70 Tex. 643, 8 S. W. 507, 8 Am. St. Rep. 632.

In the case of Bank v. Jones, supra, it was said: “It cannot be doubted that Dye had authority to deposit this money in bank on account of plaintiffs; if not conferred in express terms, at least impliedly from the nature of the transaction. It was intended by the plaintiffs that it should be so deposited. That was the purpose for which it was consigned to Dye. He was but the instrument of the plaintiffs used by them for the purpose of employing in their behalf the agency of the bank. There was therefore a privity between the bank and the plaintiffs, and the bank became directly and immediately responsible to the plaintiffs, and not merely to the' agent employed by the plaintiffs in making the deposit. Being so responsible, there can be no clearer proposition than that they had no right to pass the deposit to the private account of Dye. Whenever they did so, they were guilty of a fraudulent conversion of the money of the plaintiffs, because they knew that the money was not Dye’s, but the plaintiffs’, and that he had no authority or right to have it passed to his private account.”

It is ordinarily true that, where an agent has authority to draw checks on a bank in the name of his principal during the regular course of its business, it cannot be held responsible for honoring the check drawn by said agent in payment of his own obligation, unless it had notice of facts or circumstances that would apprise it of the purpose for which said check was so unlawfully drawn. Yet, if there are such facts and circumstances that would put it upon notice of the unlawful purpose for which said check is drawn, it should be held responsible. In 5 Gyc. 530, subd. O, it is said: “A bank cannot knowingly permit an agent or trustee to use trust money to discharge his individual indebtedness to others, and ought to refuse to honor his check for diverting trust money to pay other creditors. Nor should it permit him to transfer trust money to his own account, for this is often a fatal step to its use for an individual purpose.”

Certainly the agent must act in good faith towards the principal. If there are any circumstances surrounding the transaction that would- visit the bank with the knowledge that the agent is misappropriating the funds of his principal, it would be the duty of the bank to refuse payment of such ^heek. It is not necessary that the bank, as appellee contends, in order to be liable must necessarily have received benefit from such misapplication of the funds by the agent. Duckett v. National Bank, 86 Md. 400, 38 Atl. 983, 39 L. R. A. 84, 63 Am. St. Rep. 513; Leake v. Watson, 58 Conn. 332, 20 Atl. 343, 8 L. R. A. 666, 18 Am. St. Rep. 270. But its liability is apparent if, with a knowledge of facts that would charge it with notice of the misappropriation by the agent, it honors the check, or aids the agent in so misappropriating the funds of his principal, as was done in the instant case.

In National Bank v. Claxton, supra, Mr. Justice Williams, among other things, says: “Other cases to be distinguished are those in which a principal is the depositor and occupies a contractual relation to the bank, but an agent is given authority to draw his. checks against the deposit for the benefit of the principal or of his business. In such, cases the bank is not authorized to pay cheeks-drawn by the agent for his own benefit if it knows, or, it is sometimes said, if it have good reason to know, the fact. It is mainly from expressions in opinions discussing these two classes of eases that the courts below reached the conclusion that it was the duty of the bank to avail itself of the means it had of knowing of the misappropriation of defendant’s money by his agents.”

Here the deposit was in the name of the principal. The bank knew, from its long course of dealing, that the agent had authority to draw against the principal in payment for actual spot cotton; from which it must be inferred that it knew he had no other authority. Yet, with this knowledge, the bank honors a check drawn by said agent against his principal, payable to a man whom the facts show never owned or sold a bale of spot cotton, and whose only business, within their knowledge, was that of a dealer in cotton futures; and immediately, on presentation of the check, transfers on its books the amount represented thereby to the credit of this cotton future exchange, another of its customers. What stronger circumstances than this could there be to visit them with a knowledge of the fact that the agent was transcending his authority and misappropriating the funds of his principal? We think, under all the circumstances, it was immaterial whether or not they actually knew that Hobdy was dealing in futures. These circumstances were sufficient to put them upon notice that said agent was so dealing, and that the giving of such cheeks was outside of his authority.

So believing, we hold that the lower court erred in holding that the bank was only liable to appellants for the amount of the $300 cheek drawn by Hobdy in his own behalf, and paid by it out of the funds of appellants; for which reason it becomes our duty to reverse and render the judgment in favor of appellants against said bank for the sum of $5,750, with 6 per cent, interest from the 16th of October, 1905, and it is accordingly so ordered; but the judgment below heretofore rendered against Hobdy in behalf of appellants is, in all things, affirmed.

Affirmed in part and in part reversed and rendered.

On Motion for Rehearing.

After a full consideration of appellees’ motion for rehearing, we have concluded the same should be granted to the extent of reversing and remanding the case, instead of reversing and rendering, as heretofore ordered. We think the evidence greatly preponderates against the judgment as rendered in favor of appellees; but, while this is true, we are not prepared to say but'that there were facts and circumstances in evidence which tend to support the finding of the court. This being true, under the holding in Irving v. Freeman (Sup.) 155 S. W. 931, and other cases there cited, we deem it our duty to reverse and remand the case, and it is so ordered.

Motion granted. Reversed and remanded.

KEY, O. J.

(dissenting). I concur in granting a rehearing in this case, but have heretofore thought, and still think, that the judgment ought to be affirmed.

The trial court found as a fact that the bank had no knowledge that the checks were given by Hobdy in settlement of transactions in cotton futures or of his individual indebtedness to the cotton exchange; and, in my opinion, the testimony sustains that finding, and therefore this court ought to affirm the judgment.


source: Caselaw Access Project

author: FLY, C. J.

license: Public Domain

text:
    RALEY et al. v. D. SULLIVAN & CO. et al.
    (Court of Civil Appeals of Texas. San Antonio.
    May 28, 1913.
    On Motion for Rehearing. June 18, 1913.)
    1. Appeal and Ebbor (§ 563) — Statement of Facts — Foem.
    A statement of facts should be typewritten, but if the parties be unable to meet the expense of typewriting it must be prepared in neat chirographic form, and is insufficient when disfigured by erasures, interlineations, and pasters.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 2500; Dec. Dig. § 563.]
    2. ADVERSE Possession (§ 24) — What Constitutes.
    That defendant occasionally entered upon land, planting a small quantity of sugar cane, and occasionally used the land for pasturage will not constitute an adverse holding, it appearing that the amount of land used was very small; for peaceable and adverse possession means one that is actual, continuous, visible, notorious, distinct, hostile, fair, and open.
    [Ed. Note. — For other cases, see Adverse Possession, Cent. Dig. §§ 114, 115; Dec. Dig. § 24. For other definitions, see Words and Phrases, vol. 1, pp. 227-236; vol. 8, p. 7568.]
    3. Vendor and Purchaser (§ 261) — 'Validity — Peopeett which mat be Conveyed.
    A vendor of land who retained a vendor’s lien thereon owns a superior title to the land; and, while he cannot convey the equitable title owned by his vendee, he may convey his legal title.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 674 — 686, 688-695; Dec. Dig. § 261.]
    4. Adverse Possession (§ 20) — Improvements in Good Faith.
    Where defendant obtained a quitclaim deed to land for $15, intending to perfect her title by adverse possession, it cannot be accomplished on the theory of improvements in good faith, where such improvements were very slight and did not benefit the land, and defendant recognized the validity of an outstanding title By offering to purchase it.
    [Ed. Note. — For other cases, see Adverse Possession, Cent. Dig. §§ 106-108; Dec. Dig. § 20.]
    5. Vendor and Purchaser (§ 231) — Bona Fide Puechasees — Notice—Records.
    A purchaser of land is chargeable with notice of a prior deed of his vendor to another person, which has been duly recorded.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 43, 55, 487, 513-539; Dec. Dig. § 231.]
    6. Limitation of Actions (§§ 173, 182)— Plea of Limitations.
    No one except defendant can plead limitations, and when not pleaded it cannot be taken advantage of.
    [Ed. Note. — For other cases, see Limitation of Actions, Cent. Dig. §§ 658, 676-680, 682, 695, 705; Dec. Dig. §§ 173, 182.]
    7. Limitation of Actions (§ 104) — Time of Acoeual of Action — Fraud.
    Where defendant’s grantee who purchased the land in suit under a contract to discharge a vendor’s lien thereon concealed his assumption of the debt, so that plaintiff could not have discovered it by any diligence, the grantee’s active fraud will prevent the running of the statute of limitations.
    [Ed. Note. — For other cases, see Limitation of Actions, Cent. Dig. §§ 511-513; Dec, Dig. § 104.]
    8. Bankruptcy (§ 425) — Discharge—Debts Discharged.
    Under Act July 1, 1898, c. 541, § 17, 30 Stat. 550 (U. S. Comp. St. 1901, p. 3428), declaring that a 'bankrupt will not be released from debts not duly scheduled in time for proof and allowance, unless the creditors had actual knowledge of the proceedings in bankruptcy, a discharge in bankruptcy will not release a grantee of land from liability for payment of vendor’s lien notes which he assumed, when acquiring the land where he concealed his assumption of the debt and did .not schedule either the land or debt.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. § 775; Dec. Dig. § 425.]
    9. Vendor and Purchaser (§ 265) — Conveyance by Purchaser — Assumption of Debt by Payee — Rights of Original Vendor.
    Where an owner of land who held it subject to the payment of vendor’s lien notes conveyed the same, his grantee agreeing to discharge the notes, the holder of the notes might sue the grantee directly.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 492, 700-712; Dec. Dig. § 265.]
    10. Vendor and Purchaser (§ 190) — Estop-pel by Deed.
    A grantor of land cannot assert title as against her grantee.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 384 — 392; Dec. Dig. § 190.]
    Appeal from District Court, Bexar County; J. L. Camp, Judge.
    Action by D. Sullivan & Co. against Carrie Coleman, consolidated with an action by D. M. Poor against Helen Raley and others. From a judgment for plaintiffs, defendant Raley, plaintiff Poor, and others appeal.
    Affirmed.
    Wm. Aubrey, C. S. Robinson, and James Raley, all of San Antonio, for appellants. Denman, Franklin & McGown, of San Antonio, for appellees.

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

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

   FLY, C. J.

Sullivan & Co. sued Carrie Coleman for debt and to foreclose a vendor’s lien on block No. 1 in Mission Ridge addition, Bexar county, Tex., and D. M. Poor instituted suit against James Raley, Helen Raley, and M. H. Poor to recover said block No. 1. The two causes were consolidated, and D. Sullivan & Co. filed an amended petition alleging that R. W. Coleman executed and delivered to M. H. Poor a promissory note for $650, secured by a vendor’s lien on the land described, that M. H. Poor indorsed and delivered the note to D. M. Poor, who indorsed and delivered it to petitioners ; that R. W. Coleman, maker of the note, died after Sullivan & Co. purchased the note, leaving no heir to his community estate except his surviving wife, Carrie Coleman; that she left the state of Texas in 1893 and has been absent since; that she inherited and is the owner of the land described in the note, subject to the vendor’s lien; that Miss Helen Raley, D. M. Poor, and M. H. Poor are asserting some pretended claim to the property and that Carrie Coleman is now Carrie Burr. Helen Raley pleaded not guilty, and. pleaded three, four, and five years’ limitations and valuable improvements in good faith. D. M. Poor answered by general and special exceptions and pleaded payment of the note and four and ten years’ limitation, and also set up his discharge in bankruptcy. Carrie Burr filed a plea of intervention alleging that R. W. Coleman bought the land from M. H. Poor, paying $600 in cash and giving a note for a balance of $650, that he died in 1893, that on or about April 28, 1893, she executed to D. M. Poor a deed to the land, which was done merely to secure payment of the $650 note, and she expressed a willingness to pay off and discharge the note and take the property. James Raley disclaimed any interest in the property. The cause was submitted to the court, without a jury, and judgment rendered that D. M. Poor recover the property, and that the vendor’s lien of D. Sullivan & Co. be foreclosed thereon. This appeal was perfected by D. M. Poor, Helen Raley, and Carrie Burr.

The statement of facts is one made up by the attorney for Helen Raley, and, in the absence of an agreement by counsel for the other parties, approved by the trial judge as corrected by him. The statement is in writing and in parts of it is so marred and disfigured by erasures, interlineations, and pasters as to be deciphered with great difficulty, and no such statement of facts should be considered by an appellate court. In this day of stenography and typewriting it is almost inexcusable to impose such a task upon a court as that of attempting to decipher a statement of facts made up as this one is. Even if unable to meet the expensé of typewriting, an intelligible statement of facts might be prepared in neat chirographic form. Not only is the statement of facts patched and scratched, and interlined, but, to add to the difficulty of understanding, many questions and answers have been inserted.

It appears that on May 25, 1892, M. H. Poor executed and delivered to R. W. Coleman a deed to the land in controversy, for a cash consideration of $600 and $650 evidenced by a promissory note secured by a vendor’s lien on the" land, which was to become due two years after date, the lien being reserved in the deed. On February 2, 1894, M. H. Poor executed a deed to the same land to D. M. Poor reserving a vendor’s lien. In October, 1892, R. W. Coleman died, and on April 28, 1893, Carrie Coleman, his widow, his- survivor and only heir, conveyed the land to D. M. Poor, a vendor’s lien being reserved in tlie deed to secure the payment of the $650 note executed by B. W. Coleman. There was a recitation in the deed that D. M. Poor assumed payment of the $650 note. The deed was filed for record on January 24, 1912. On November 24, 1906, M. H. Poor by quitclaim deed conveyed the land to Helen Baley and the same was filed for record on day of execution. That was the third deed made by M. H. Poor to the same parcel of land. The taxes on the land were paid by Helen Baley up to' and including those of 1911. The suit of D. Sullivan & Co. against Carrie Coleman was filed on May 24, 1698, and was pending when Helen Baley obtained the quitclaim deed from M. H. Poor. Before the expiration of five years James Baley wrote letters to D. M. Poor offering to buy the land. He made an offer of $400 for the land on December 23, 1911, although at that time he claimed to have title to the land by three years’ limitation and estoppel. He nor Helen Baley had any house on the land and no one lived on it. A few slight improvements were made on it and a narrow strip plowed. The fence was in bad repair and would not hold eattle.

The evidence was totally insufficient to show title by limitation in Helen Baley. According to the testimony of James Baley the use and enjoyment of the block was confined to the planting of some figs and berry vines, an occasional use of the land for pasturage purposes, cutting mistletoe off the trees, and planting two strips of sorghum perhaps once or twice. Prank Dawson, a witness for Helen Baley, swore that he lived two or three blocks from the block in controversy, that it was covered with brush, except some open spaces like a road, that Baley planted a little cane in the open space, which was very small, at one end, 10 or 12 feet wide and at the widest part 35 feet, and perhaps 100 to 200 feet long. The block contained about 2acres. The only use Dawson made of the block was to turn his cattle in, and when they ate the cane they walked out. That was in 1910 and 1911. Dawson said he never saw any fig trees or blackberry vines on the land. He had lived near the land 10 or 12 years and saw nothing planted on the land except the two plantings of cane. It required continuous use and possession to acquire title by limitation. There was no pretense of this by Helen Baley or her agent. Pendleton v. Snyder, 5 Tex. Civ. App. 427, 24 S. W. 363; Buster v. Warren, 35 Tex. Civ. App. 644, 80 S. W. 1063; Hutcheson v. Chandler, 47 Tex. Civ. App. 128, 104 S. W. 435. In the last case cited it was said: “The property was inclosed, it is true, and appel-lees may be said to have been in possession by reason of this inelosure, but the acts of use or enjoyment seem to have been confined to the planting of a few trees and rose bushes and to an occasional use of the property by certain persons, with the permission of appellees, for the purpose of - pasturing therein two or three cows ‘to keep the grass down.’ This use was not shown to have been continuous.” Peaceable and adverse possession means a possession that is “actual, continuous, visible, notorious, distinct, hostile, fair and open.” Hunter v. Malone, 49 Tex. Civ. App. 116, 108 S. W. 709. The first assignment of errór of Helen Baley is overruled.

The second assignment is to the effect that a deed given by a vendor to another party before default on the part of his first vendee is void. At the time that M. H. Poor executed the deed to D. M. Poor he still owned the superior title to the land, and while he could not convey the equitable title owned by B. W. Coleman he could convey his legal title to another. Such sale did not amount to a rescission of his sale to Coleman, but the evidence purpose was to put D. M. Poor in the position occupied by M. H. Poor, which appeared from a transfer of the $650 note to D. M. Poor. The evidence showed that D. M. Poor was the real owner of the land, and the deed to him was merely a recognition of his right to the land or its proceeds. M. H. Poor had been holding the the land in trust for D. M. Poor.

The third assignment of error is overruled. This is not an action to set aside a deed made by M. H. Poor to Helen Baley, and the case of Kennon v. Miller, 143 S. W. 986, decided by this court, has no applicability whatever. Helen Baley was not in possession of the land for five years and cannot claim anything under the statute of limitation of five years. The fourth assignment is without merit, and is overruled. James Baley, for Helen Baley, recognized D. M. Poor’s right to the land by offering him $400 for it. That offer was made in 1911.

There was no evidence to sustain improvements in good faith by Helen Baley. She obtained the quitclaim deed, at a cost of $15, with the evident intention of endeavoring to perfect a title by limitation, and that showed that she was not acting in good faith in putting the trifling improvements she did on the land. Staley v. Stone, 41 Tex. Civ. App. 299, 92 S. W. 1017. There is nothing in the evidence to show that the improvements added anything to the value of the land. Herndon v. Reed, 82 Tex. 647, 18 S. W. 665.

When M. H. Poor sold the land in question to B. W. Coleman, reserving a vendor’s lien, the superior title remained in him, and when M, H. Poor afterwards conveyed the land to D. M. Poor that title was conveyed to him. That deed was placed on record, and Helen Baley was charged with notice of it when she accepted a quitclaim deed from M. H. Poor. The letters written by her agent to D. M. Poor clearly show that they knew of D. M. Poor’s claim to the land and that M. H. Poor had conveyed nothing to Helen Baley. She was in December, 1911, claiming the land, not by purchase, but by “the three year statute of limitation, and by estoppel.” There is no evidence upon which to base the claim of estoppel.

The suit on the note against Carrie Burr was filed before the four years from the due date had expired, but if it had been filed afterward and the continued| absence of Mrs. Burr from Texas be not taken into account still the question of limitation is not an issue because Mrs. Burr did not plead limitation. No one else can raise that question for her, or obtain any advantage from the suit not having been prosecuted after it was filed. Mrs. Burr admitted the justness of the claim of D. Sullivan & Oo. against the land.

When D. M. Poor bought the land from Mrs. Burr and assumed- the debt of $650, evidenced by the note given by R. W. Coleman, he became the principal obligor thereon and D. Sullivan & Oo. could, and no doubt would, have sued him for the debt had he not concealed the fact of his assumption of the debt. His concealment of his assumption of the debt was positive, active fraud upon the rights of the holders of the note and was not a mere failure to disclose, and the statutes of limitation did not begin to run until the fact of his obligation was discovered. It does not appear that the fraud could have been discovered any earlier than it was by any amount of diligence. Ransome v. Bearden, 50 Tex. 119; Calhoun v. Burton, 64 Tex. 515; Railway v. Gay, 86 Tex. 571, 26 S. W. 599, 25 L. R. A. 52; Oldham v. Medearis, 90 Tex. 506, 39 S. W. 919; Pitman v. Holmes, 34 Tex. Civ. App. 485, 78 S. W. 961; Boren v. Boren, 38 Tex. Civ. App. 139, 85 S. W. 48.

The statute of limitation did not run in favor of D. M. Poor. When Poor was declared a bankrupt in 1909, he did not list the land in question as a part of his assets and did not mention the $650 note which he had placed with D. Sullivan & Co. as collateral security. His discharge in bankruptcy did not release him from his debt, or his land from the lien. In section 17, p. 3428, U. S. Comp. St. 1901, it is provided that a bankrupt will not- be released from debts which “have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy.” Easley v. Bledsoe, 59 Tex. 488.

It is well sustained by authority that D. M. Poor, by his promise to pay the note as a part of the consideration for the deed executed by Mrs. Burr, became liable to pay the note to D. 'Sullivan & Co., and in default became liable personally to them and a suit could be maintained by them directly against him for foreclosure of the lien. McCown v. Schrimpf, 21 Tex. 22, 73 Am. Dec. 221; Spann v. Cochran, 63 Tex. 240; Heath v. Coreth, 11 Tex. Civ. App. 91, 32 S. W. 56.

Mrs. Burr has filed no brief in this cause, and there being no fundamental error as to her the judgment will not be disturbed. However, she sold the land to D. M. Poor and could not recover it from him.

We have considered all the points of any consequence or importance in the case, and finding no error justifying a reversal, the judgment is affirmed.

On Motion for Rehearing.

It was incorrectly stated in the original opinion that Mrs. Burr had not filed a brief, and the brief of Mrs. Burr has been considered in connection with her motion for a rehearing. We find no merit in her assignments of error, She had sold all her interest, a mere equity, in the property to D. M. Poor and could be interested in no way except to see her indebtedness to D. Sullivan & Co. paid off and discharged. D. M. Poor took her place as to the debt for the original purchase money for the land. No judgment was obtained against her on that note, and she has no more right, title, or interest in the land than she would have had if D. M. Poor had paid off and discharged the note, and she has no right to be urging the questions raised in her brief. Her assignments are all overruled, as well as her motion for rehearing.

The motions for rehearing of D. M. Poor and Helen Raley are also overruled.


author: RASBURY, J.

text:
    BANNER v. THOMAS.
    (Court of Civil Appeals of Texas. Dallas.
    June 7, 1913.
    Rehearing Denied June 28, 1913.)
    1. Continuance (§ 51)—Surprise.
    • Surprise as a ground for further continuance cannot be claimed because the special setting of the case, agreed on when the case was first continued, was not known of by associate counsel, called into the case after such setting, till five days before the day for which it was so specially set.
    [Ed. Note.—For other cases, see Continuance, Cent. Dig. §§ 69, 79, 85, 87, 88, 118, 128, 130, 132, 135, 141, 147; Dec. Dig. | 51.]
    2. Appeal and Error (§ 1043) — Harmless Error—Refusal of Continuance — Preparation of Case.
    Refusal of continuance asked for by associate counsel because they were not “fully informed” and the leading counsel were otherwise engaged, cannot be complained of; the pleading and record indicating not only a well-prepared case, but a thorough understanding of the issues by counsel.
    [Ed. Note.—For other cases, see Appeal and Error, Cent. Dig. §§ 4115-4121; Dec. Dig. § 1043.]
    3. Continuance (§ 26)—Diligence.
    Refusal of continuance to enable defendant to secure experts to examine the fixtures, asked for six months after commencement of the action, is warranted on the ground of lack of diligence; the litigation primarily involving the question' of plaintiff’s compliance with his contract to make and install the fixtures, and defendant having been in exclusive possession thez’eof.
    [Ed. Note. — For other cases, see Continuance, Cent. Dig. §§ 7A-93; Dec. Dig. § 26.]
    4. Contracts (§ 322) — Performance — Evidence.
    As a circumstance to be considered with others on the issue of defectiveness of the work on fixtures, manufactured and installed by plaintiff for defendant, plaintiff may show that while they were being installed, under defendant’s constant observation, he made no complaint with respect to them.
    [Ed. Note. — For other cases, see Contracts, Cent, Dig. § 1801; Dec. Dig. § 322.]

      5. Appeal and Error (§ 1060) — Harmless Error — Misconduct of Counsel.
    Reversal will not be granted because of misconduct of counsel, unless it appears the verdict is against the weight of the evidence or excessive, especially where the court admonished the jury not to consider such misconduct, and the complaining party made no request for a charge that the jury should not consider the matter.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 4135; Dec. Dig. § 1060.]
    6. Appeal and Error (§ 1048) —>■ Harmless Error.
    Complaint may not be made of cross-examination ; all the facts sought to be elicited thereby, save one which was excluded, having been testified to by the witness on direct.
    [Ed. Note. — For other- cases, see Appeal and Error, Cent. Dig. §§ 4140-4145, 4151, 4158-4160; Dec. Dig. § 1048.] .
    7. Pleading (§ 36) — Effect of Allegations in Pleading.
    Plaintiff, who manufactured and installed fixtures for defendant, which defendant refused to accept and pay for as agreed, seeking to recover the fixtures and damages, and so obliged to allege and prove that he had substantially complied with his contract, could in aid of such obligation taire the position in his pleading that defendant by remaining in possession of the fixtures was estopped to assert that they were not in substantial compliance with the contract, without this being used against him as an assertion of acceptauce by defendant, limiting his remedy to a recovery of the contract price.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 81-86; Dec. Dig. § 36.]

      8. Trial (§ 251) — Instructions—Issues.
    Where in an action, aided by sequestration, to recover property and damages, defendant re-plevied the property, hut at the trial admitted the title was in plaintiff and abandoned claim thereto, the bare legal right of defendant to replevy was not an issue, so as to entitle him to an instruction' thereon.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 587-595; Dec. Dig. § 251.]
    Appeal from District Court, Dallas County; J. C. Roberts, Judge.
    Action by Lawrence Thomas against Ben Banner. Judgment for plaintiff. Defendant appeals.
    Affirmed.
    Carden, Starling, Carden & Hemphill and Geo. O. Wallace, all of Dallas, for appellant. Spence, Knight, Baker & Harris, of Dallas, for appellee.

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

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

   RASBURY, J.

The suit out of which this appeal originates was instituted in the lower court by Lawrence Thomas, the appellee, against Ben Banner, the appellant. The suit, aided by the writ of sequestration, was to recover the title and possession of certain store fixtures and furniture manufactured for and installed in appellant’s store in the city of Dallas by appellee under contract, whereby appellant agreed to pay therefor $3,100. -payable $1,000 when the fixtures were completed and set up in appellant’s store, the balance in four installments of $525 each, due in '2, 4, 6, and 8 months from completion, of the fixtures, and which, upon completion, it was alleged appellant declined to accept and pay for according to his contract. It was also alleged that the fixtures, etc., were intrinsically worth the contract price, but that nevertheless and because constructed for the peculiar uses and purposes of appellant, their market value after removal from appellant’s store was ohly $1,000. Judgment was accordingly asked for title and possession of the fixtures and damages in the sum of $2,272.35, being the difference between the contract price and the market value thereof. Judgment was also sought for the further sum of $161.65, the value of certain other workoand material furnished appellant. As indicated, appellee applied for and secured a writ of sequestration under authority of which the sheriff of Dallas county took possession of the fixtures. Appellant re-plevied same and retained possession thereof pending the determination of the suit.

Appellant, by his answer, admitted the title to the fixtures to be in appellee, but alleged that he was in possession of same by reason of the incompleted contract of appel-lee, by which he was to install same, and that he had refused to accept and pay for them because they were so defectively constructed as not to be in substantial compliance with the contract, and particularly alleged that appellee agreed to complete and install the fixtures October 1, 1911, but in fact did not complete same until October 24, 1911, by reason of which delay appellant was damaged in the loss of business and various other items aggregating $2,915, an enumeration of which is unnecessary in reviewing the issues involved in this appeal, and all of which were eliminated except an item of $365 for one month’s rent, which appellant alleged he lost because of appellee’s delay in installing the fixtures. Appellant specially denied the value of the fixtures as alleged by appellee and set their value at $500. Also that he used same after installation to save both himself and appellee damage.

Upon trial there was verdict for appellee for the title and possession of the fixtures, and the value of which was placed by the jury at $1,094.18, and for damages and interest in the sum of $2,233.11. The verdict was against appellant on his claim for the item of $365 rental. Judgment was in ae-cordance with the verdict. Any reference to the testimony or any conclusions of fact necessary to the determination of the case will be made in disposing of each issue raised by the assignments of error.

The first assignment of error challenges the action of the court below in refusing to continue or postpone the trial of the case. The application for a continuance or postponement of the suit recites that the law firm of Lively, Nelms & Adams was employed by appellant at the institution of the suit on November 22, 1911. Thereafter, appellant, on May 1,1912, associated with them the law firm of Carden, Starling, Carden & Hemphill; the first-named firm, however, remaining leading counsel in the case. Prior to the employment of the last-named firm, and on April 15, 1912, the case was called for trial and continued upon application of appellant. At that time it was agreed, and the court made notation upon his docket, that the case should be assigned for trial on May 20, 1912. Subsequent to the setting of the case the trial court’s jury cases were all regularly assigned, which included the instant case, which was set for trial June 12, 1912. The case was included in the regular assignment through inadvertence on the part of the clerk. No authority for changing the special setting was authorized by either the court or appellee. On May 9, 1912, and prior to the call of the case, but subsequent to the employment of the firm of Carden, Starling, Carden & Hemphill, Mr. Geo. O. Wallace, a member of that firm, represented appellant in securing the deposition of appellee. Upon call of the case on May 20th, in accordance with the agreed setting, Lively, Nelms & Adams were engaged in the criminal district court of Dallas county in the trial of a “murder case,” and it was not possible for them to be present upon trial of the instant case. Upon the related facts appellant claimed he was entitled to a continuance of the case, or postponement thereof to the regular assignment of June 12, 1912, for the reason that Lively, Nelms & Adams were familiar with the ease, while the firm of Carden, Starling, Carden & Hemphill, because of their ■ recent employment, was not fully informed as to the facts and defenses in the case, and for the further reason that they were not informed of the special setting of the case, in fact only knew it on May 15th, and had relied upon the case being called June 12, 1912, and while strenuously endeavoring to be ready for the special setting were not in fact prepared. An additional reason was that they desired further time in which to procure expert cabinet makers to examine the fixtures in order that the condition of the same might be accurately described to the jury. Our view of the complaint here maintained is that it involves, at most, matters within the discretion of the trial judge, and that the record fails to show any abuse of that discretion. Mayer, Kahn & ] Freiberg v. Duke, 72 Tex. 445, 10 S. W. 565. It appears that the case was continued April 15, 1912, upon the express agreement that it would be assigned for trial upon the day it was tried, and that any other setting was unauthorized, and this was within the knowledge of both appellant and his leading counsel, and it can hardly be said to have surprised them. As relates to the unpreparedness of associate counsel, Messrs. Carden, Starling, Carden & Hemphill, who were compelled to try the case because of the unavoidable absence of leading counsel, it is not shown that any material injury was sustained by appellant because of such unpreparedness, or that appellant was any the less ably represented. It is true that the application does recite that they were not “fully informed” with reference to the facts and defenses in the case, but the pleading and the record indicate not only a well-prepared case, but a thorough understanding of the issues by counsel for appellant. Watkins v. Atwell, 45 S. W. 404. That portion of the application which seeks further delay that experts may be secured to examine the fixtures in order that they might testify as to the condition of same furnishes neither legal nor equitable basis for the motion. Aside from the testimony,. which was in fact adduced in reference to condition and quality of the fixtures, an entire lack of diligence in that behalf is shown by the application, since appellant had approximately six months in which to secure such expert testimony. The litigation primarily involved the issue of whether appellee had complied with his contract, and hence expert testimony was essential to a trial of the case, and in view of the fact that appellant had been in exclusive possession of the fixtures, and that experts were presumably easily procurable, the application was not sufficiently meritorious.

The second and third assignments of error complain of the action of the court in permitting' appellee and his witness George P. Cook to testify that appellant made no complaint with respect to the fixtures while being installed in appellant’s storehouse. Appellant asserts that since the contract between the parties did not require his approval or disapproval of the work as it progressed, and since it was the duty of appellee to install the work according to contract without reference to his attitude about the matter, the admission of the testimony was highly prejudicial. We think the admission of the testimony was proper. Appellee asked these questions in the process of proving his compliance with his contract, and it occurs to us that the answers elicited were both pertinent and material. The fixtures were being placed in the storehouse of appellant under his constant observation, and whether it was his duty to approve the work or not it would have been but a natural thing for him to object to any inferior work placed therein if he knew it, and whether he knew it or not the fact that he made no objection was a circumstance, not conclusively against the issue that the work' was defective, but one to be considered by the jury for what it was worth along with all other facts and circumstances admitted in testimony. Carter & Donaldson v. Childress, 99 S. W. 714.

The fourth assignment of error complains of the misconduct of Rhodes S. Baker, of counsel for appellee. Before concluding the testimony in rebuttal by appellee, counsel, after tendering in evidence certain matters of record, stated in open court in the hearing of the jury: “We also desire to make formal tender in open court to the defendants of all this property, conditioned that they pay us contract price for it.” No response to this offer was made by appellant. Whereupon same counsel, pursuing the subject, said: “We also tender to them the property for the contract price, offering to submit to the jury the question as to whether there should be any reduction on account of the alleged noncompliance with the fulfillment of the contract.” Exception to the last tender was taken by appellant, who moved the court to instruct the jury not to consider same. Thereupon the court said: “The jury, of course, will not be affected by anything said except the evidence and the law as given in charge in deciding the ease; they have sworn to decide this case according to the law and evidence and, of course, they will do so.” The bill of exceptions taken at the time discloses no more than we have just detailed. It does not complain that the court’s method in admonishing the jury .that they should not be affected by anything other than the evidence given upon trial of the case was ineffective for that purpose, or that further exception was taken on that account. Nor does it appear that appellant requested a special charge to the jury that they should not consider same. In fact, counsel appears to have abandoned the matter after the court’s remarks. Upon the related facts, then, the question arises, Was the offer made by counsel in fact misconduct, and if so, was it calculated, after the court had admonished the jury as stated, and appellant had failed to pursue the matter further by requesting an instruction to the jury, to bias and prejudice the jury against appellant? Waiving the question of whether counsel was in fact guilty of misconduct, the general rule in reference to misconduct of counsel is that the case will not be reversed, because of misconduct, unless it appears that the verdict is against the weight of the evidence or excessive. Particularly is this true where the court has admonished the jury not to consider such misconduct of counsel and the complaining party rests his case at that point, and requests no charge from the court on the subject. The verdict in this case is one supported by the testimony, and we are unable to say that a different result might have been reached but for counsel’s statement. Neither the issues in the case nor counsel’s remarks were of the kind calculated to arouse prejudice in the minds of the jury, and we accordingly overrule the assignment.

The fifth assignment of error complains of the action of the court in permitting counsel for appellee on cross-examination to ask appellant’s witness Shafarman certain questions tending to show bad faith on appellant’s part in replevying the fixtures. The substance of the testimony sought to be elicited was that after appellee claimed he had finished the fixtures according to contract, and failed to get a settlement with appellant, and after he had sequestrated same, that then appellant, notwithstanding he claimed no title in the fixtures, had replevied same, and had had the use thereof from the time he replevied them until the suit was tried. Because of objections by appellant the appellee fell short of proving by this witness that appellant’s motive in replevying the fixtures was that indicated by the questions. But if, as a matter of fact, the purpose of the examination was to show bad faith on the part of appellee in refusing to accept the fixtures it occurs to us that the testimony was admissible. The issue was whether the fixtures had been completed in accordance with the contract, and the act of the appellant in retaining the same in the face of his contention that they were not in accordance with the agreement, was either the result of bad faith or due to the very reason assigned by him in his pleading, to wit, the desire-to avoid damage to both himself and appellee. Further, it may be said, aside from the latitude permitted upon cross-examination, that all the facts sought to be elicited by the cross-examination had been testified to by the witness on the direct examination, save the point as to appellant’s motive in replevying, and that question was excluded by the court.

The sixth assignment of error, in effect, complains of the action of the court in submitting to the jury for its determination whether or not the alleged delay in installing the fixtures caused any damage to the appellant ; the claim being that it was undisputed that there was a delay of a month, and that the court should have instructed the jury to return a verdict for appellant for one month’s rent, the amount of damage claimed. The contract for building in the fixtures set a day for completing same provided appellee was not delayed by causes beyond his control. Appellant alleged a delay of one month, and that same was due to the fault of appellee, and sought to recover as damages one month’s rental covering the period-of delay, while appellee ascribed the delay to the failure of appellant, among other things, to have the building ready for him. There was testimony supporting both allegations, which we do not consider it necessary to quote, sufficient to take, the issue to the jury. There is no complaint of the charge of the court on any ground other than that the evidence was insufficient to authorize the submission of the issue at all. That disputed matters of fact are to be solved by the jury is too well settled to require discussion or the citation of authorities, and, as we have said, there was testimony sufficient to take the issue to the jury and, that being true, it becomes our duty to overrule the sixth assignment of error.

By his seventh and ninth assignments of error appellant complains of the refusal of the court to give his special instructions one and two, which were, in substance, a direction to the jury to find against appellee on his claim for damages. These requests were based upon the fact that appellee in his pleading took the position that appellant by remaining in possession of the fixtures was estopped as matter of law from asserting that they were not in substantial compliance with the contract, and that appellee having thus urged an acceptance in law was bound thereby, and could not recover the property and his damages, as sought by his suit, but could only recover the contract price of the fixtures. We do not understand that the allegation just recited can be made to subserve the purpose attempted. It was necessary for the appellee to allege and prove in the court below, in making out a prima facie case, that he had at least substantially complied with his contract in installing the fixtures. In doing so he had the right to assert against appellant, any fact or legal principle the result of appellant’s conduct or attitude, which would establish such compliance. To do this in no respect curtailed his right to recover in the manner he did. The claim of estoppel affected the question of a compliance with the contract by appellee, and could not be used for the purpose of destroying appellee’s remedy if in fact he had complied with his contract. That appellee had the right to proceed as he did is too well settled for controversy. Bang v. Rickmers, 70 Tex. 110, 7 S. W. 527; Victor Safe Co. v. Texas State Trust Co., 101 Tex. 94, 104 S. W. 1040.

By his tenth assignment of error appellant complains of the court’s refusal to instruct the jury that he had the right to execute the replevy bond he did execute and retain by virtue thereof possession of said fixtures, and that his action in so doing could not be considered as either acceptance or approval of said fixtures. Appellant’s right to replevy the fixtures was not and could not properly have been an issue upon trial. The right of a defendant to replevy in sequestration is statutory, and the disposition of the property and the rights and liabilities of the parties are automatically adjusted by statute upon the determination of the suit, and to have given the charge as respects the right to replevy would have been to do an unnecessary thing. On any other theory of the ease the charge would hate been upon the weight of the testimony, since, under the charge as requested, the jury would not have been entitled to consider the good faith of the possession of appellant after appellee’s demand for settlement under his contract. Further, as the pleading and issues stood at trial, appellant having admitted the title of the fixtures to be in appellee, and having abandoned any claim to the title thereto which he in fact asserted when he replevied the fixtures, all questions were eliminated, so far as related to appellee’s suit, except the question of his right to recover damages, and the bare legal right of appellant to replevy was in no sense an issue.

The eleventh assignment of error raises in a different manner the issue raised by the tenth assignment. The twelfth assignment of error, claiming the verdict is excessive, is not, in our opinion, sustained by the testimony in such manner as to constitute reversible error. Accordingly the eleventh and twelfth assignments are both overruled.

The judgment is affirmed.


text:
    WELSH et al. v. WARREN.
    (Court of Civil Appeals of Texas. Texarkana.
    May 29, 1913.
    On Motion for Rehearing, June 26, 1913.)
    1. Principal and Surety (§ 117) — Discharge — Building Contracts — Improper Payments to Principal.
    A building- contract which stipulates for weekly payments of 85 per cent, on estimates of the actual labor done and materials furnished, and for the payment of the balance on completion of the work, does not require that the payments shall be in proportion only as the work done bears to the completed building, or that the owner shall pay only a certain per cent, of the contract price as the building progresses, and .does not require that 15 per cent, each of the amount of labor done and of materials furnished shall be reserved for protection of a surety, but the contract is complied with provided there is not a payment in excess of 85 per cent, of the whole estimate made up of labor and material furnished.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 283-285; Dec. Dig. § 117.]
    2. Principal and 'Surety (§ 117) — Discharge — Building Contracts — Improper Payments to Principal.
    Evidence held to support a finding that an owner emplojung a contractor to construct a building under a contract calling for weekly payments of S5 per cent, on estimates of the actual labor done and material furnished did not make advances to the contractor in excess of the contract, and the contractor’s surety was not released.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 283-285; Dec. Dig. § 1TJ.]
    3. Principal and Surety (§ 83) — Building Contracts — Estoppel to Assert Liability.
    Where a building contract provided that the contractor would furnish the labor and materials to the satisfaction of an architect, but that no acceptance or payment should be con-elusive of full performance, and that the owner should make weekly payments of 85 per cent, on estimates of the actual labor done and materials furnished, and the parties agreed that a third person should make weekly estimates without authority to superintend the work, the owner making weekly payments on estimates furnished was not estopped as against the contractor’s surety from recovering expenses in overhauling and rebuilding part of the work improperly done.
    [Ed. Note. — Eor other cases, see Principal and ' Surety, Gent. Dig. §§ 129', 130; Dec. Dig. 83.]
    4. Principal and Surety (§ 82) — Extent oe Liability — Building Contracts — Construction.
    Where a building contract provided that the advances required to be made by the owner each week should not be deemed an acceptance or waiver of any defective work by the contractor, and did not require the owner to inspect the quality and character of the work, or that the architect should do so before the owner should make the advancements, the owner making the advancements was not estopped from recovering from the contractor’s surety as a part of the damages the amount paid the architect for services in supervising the overhauling of defective work done by the contractor.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. § 127; Dec. Dig. § 82.]
    Appeal from District Court, Upshur County; R. W. Simpson, Judge.
    Action by J. R. Warren against Frank Welsh and another. From a judgment for plaintiff, defendants appeal.
    Affirmed.
    Appellee brought this suit against Frank Welsh and the Commonwealth Bonding & Casualty Insurance Company, a corporation, on a bond executed to him by Frank Welsh, as principal, and the Commonwealth Bonding & Casualty Insurance Company, as surety. The bond was conditioned for the performance and fulfillment on Frank Welsh’s part of a contract of even date with the bond for the furnishing of material and all labor and to erect a certain building on the property of appellee according to plan and specifications attached to the contract. By the terms of the contract Frank Welsh was to erect, according to agreed written plan and specifications, a two-story residence and to furnish all necessary labor and materials, except such material as was specially mentioned as being furnished by the owner, and was to complete the building by May 15, 1912, or to pay to the owner $2 per day for every day after the 15th of M!ay that the work remained unfinished. In constructing the building Welsh was to perform the labor and furnish the materials “under the direction and to the satisfaction of J. Dawson Mathews, architect, or such other person as may be employed by the owner as superintendent,” and the contract provided that “the contractor within 24 hours after receiving written notice from the superintendent shall remove from the grounds or building all condemned materials, whether worked or unworked, and shall take down all work condemned as unsound and improper, or as in any way failing to conform to the drawings and specifications, and in case of his failure so to do the superintendent acting for the owner may, after three days’ notice, furnish such materials or labor as may be necessary to have such direction performed, and the expense incurred thereby shall be charged as a payment to the contractor under this contract. If such expense shall exceed unpaid balance, contractor shall repay owner on demand.” It was further provided: “The contractor shall permit the architect, the owner, and all persons representing said parties to inspect the work or any part thereon at all times during the progress of the same.” Appellee was to pay Welsh therefor “the sum of $3,300 as follows: Each week during the life of this contract and progress of work, estimate shall be made of actual labor done and material furnished, and owner shall pay 85 per cent, of same upon said estimate, lawful money U. S. A.; remainder of contract price retained by owner shall be paid in lawful nrmey of the U. S. A. within five days after work is completed, except the owner shall have the right to retain any sums necessary to pay off just and unsatisfied claims against the contractor for labor or material used on said work, said claim being for labor or material to be furnished by contractor under the terms of the agreement, also may, at his option, retain the sum of 10 per cent, of the total contract price and 10 per cent, of any price made for extra work for a period Of 30 days after completion of contract.” It was stipulated: “It is agreed no acceptance or payment under the contract shall be conclusive that the contractor has fully performed this contract if, as a matter of fact, he has not done so nor as a waiver of any defective work.” Welsh performed about two-thirds of the work but abandoned the contract before the building was completed ; and appellee, who in the meantime had paid Welsh on estimate of actual labor done and material furnished $2,528, was compelled to finish the building at an additional cost to him of $4,411.47 as being necessary to complete the building according to the plan and specifications. There is no question made on appeal that Welsh did not fail to comply with his contract. Appellee alleged performance of the stipulations in the written contract to be performed by him and averred as a breach the abandonment of the work by Welsh, and his failure, and the surety’s failure and refusal to complete the same, necessitating the employment by him of others at great expense to him, the inferiority of the work done and failure to be in accordance with plans and specifications, requiring it to be torn down and overhauled, and appellee’s loss thereby, placing his damages at $3,735. There is no question made over the inferiority of the work done by Welsh. Other parties were brought in the case on the ground that they were asserting some kind of liens, but as they passed out of the case it is not necessary to refer to them. Prank Welsh did not make answer. The Commonwealth Bonding & Casualty Insurance Company answered by denial and specially pleaded: (1) That appellee had paid Welsh $2,528 without reference to work done, which breached the terms of contract requiring only 85 per cent, of the estimate of actual labor done and material furnished to be paid before the completion of the building; (2) that the amount sued for, except $750, represented a complete change of the plan and specifications, and appellant was not liable therefor; and (3) that appellee had a superintendent who superintended the work and paid out the money weekly for him, and this paying Welsh $2,528 was an acceptance by appellee of the work done and material furnished by Welsh up to the time of the abandonment, under the terms of the contract, and the surety company was not liable for moneys expended in overhauling and rebuilding such work done by Welsh. A trial was to the court without a jury, and judgment was rendered against Welsh for $3,COO and against the surety company for $3,300, with 6 per cent, interest. The evidence warrants the judgment for appellee, and the judgment is therefore sustained.
    McCord & Campbell, of Longview, for appellants. Warren & Briggs and M. B. Briggs, both of Gilmer, for appellee.

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

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

   LEVY, J.

(after stating the facts as above).

By its second assignment of error the appellant surety company makes the contention that judgment should have been entered in its favor because it was discharged through the failure of the owner of the house and the contractor to perform the contract according to the agreement therein which provided that the owner was to pay the contractor for the work “the sum of $3,300 as follows: Each week during the life of this contract and progress of work estimate shall be made of actual labor done and material furnished, and owner shall pay 85 per cent, of same upon said estimate in lawful money U. S. A.; remainder of contract retained by owner shall be paid in lawful money of the U. S. A. within five days after work is completed.” The contract contained the agreement mentioned. The evidence admittedly shows that the contractor abandoned the contract after commencing the work, At the time the contractor abandoned the contract, the building was about two-thirds finished, having the walls and partitions up, the floors to the second story in, and the roof on. At the time of the abandonment of the contract the appellee had paid over to the contractor the total sum of $2,52S; the same having been paid only as the work progressed each week and only for labor done and material furnished for the building. As to whether there was’compliance with or failure of performance of the particular terms of contract complained of rests in the evidence given by appellee and Mitchell. Appellee testified that “It was agreed between Welsh and me that for the purpose of making estimates of the work, and so far as making payments was concerned, Mr. Mitchell would look after that, as superintendent to that extent. * * * I think it was $2,528 that I paid to Welsh, leaving only a balance of $772 to complete the building. * * * I did not have him to furnish me along, while he was erecting the building, with the bills for the different materials which he had purchased; I knew about practically most of the bills, but I did not take any copies of any bills. When I paid him I reserved nothing with which to pay these bills. I would not pay him just whenever.he would call on me for money. As the work progressed every week Mitchell paid him the amounts. I put the money to his credit as trustee to make payments. * * * Every week he advised me of the amounts he was paying; he knew how many men they had on the job and could tell how many days’ work they had put in. It was a matter of very easy calculation, what the labor amounted to, and in that way the estimates were made. * * * I did not pay up the labor in full. The purpose and intention was to keep back within the provisions of the contract all the time. I presume that the laborers were paid in full each week up to the last week, when they were not; but the material was not paid up in full; the material was never paid up in full. Each week I took an approximate éstimate of everything as it went along. The superintendent would know as what his judgment was as to whether or not the proper estimates were made on the work as it progressed. * * * As to what estimates Mr. Mitchell made of the work, and whether he paid 85 per cent, of the labor and material, or whether he paid all the labor off each week, I know that after the matter was wound up (that is, when Welsh quit) there was $668.30 of labor and material that went into the building that had not been paid for by me or Welsh; and that is more than 15 per cent., which the contract says I shall keep back.”

W. B. Mitchell testified as follows: “Mr. Warren asked me to look over the building and to make estimates on it and to see if anything went wrong. I am familiar with the provisions of the contract relative to making payments of 85 per cent, of labor done and material furnished. In making the estimates I estimated and paid, according to my best judgment, within the 85 per cent., and I tried to hold it to less than that. The payments were made according to my estimates from time to time. When the foreman presented his bills and pay rolls I would look over his list, and I demanded the time book; and by that means, and with my knowledge of the men he had on the job, passing there every day, I would arrive at the correctness of the matter. I did not keep the bills and pay rolls, but I took a receipt for the checks I gave him showing whether for labor or material.” He further testified: “I would pay the men up entirely every Saturday night. In some cases I did not pay them up entirely, and in some cases I did not hold back anything. I kept the labor pretty well paid up as I went along. I paid off for part of the material that he furnished. For instance, a bill for material was furnished; I would not deduct 15 per cent, of it, but would pay it all, whatever it was. I paid their bills for freight in full. I did not deduct anything out of the bills, but would just pay their bills. * * * I paid the money directly to Mr. Ouberly, gave him a check, and he paid the bills himself. Whenever he presented a bill, for instance, he claimed he had a bill for sand or something of that sort to be paid, I made an estimate and considered whether or not he had enough to cover that within the 85 per cent.; and if he did, on my estimate, I paid it. I did the same way with reference to labor, pay rolls, making my estimates on labor done and material furnished as a whole.” He further testified that he knew Welsh was getting hardware, cement, and the materials in the aggregate of $668.30, and that in making his estimates he figured these as part of the material on the ground, but no bills for said items were ever presented or paid, and according to his estimates • payments were less than 85 per cent. It was shown that there was $668.30 worth of material furnished in the building at the time above the $2,528 paid the contractor and not paid for by the owner or the contractor.

The following eases seem to be authority for the proposition that the surety of the contractor would be released if advances were made by the owner to the contractor in excess of contract provisions: Ryan v. Morton, 65 Tex. 258; McKnight v. Mfg. Co., 155 S. W. 977. And we for the moment assume the correctness of the decisions mentioned. The difficulty here, though, is to hold that the evidence so conclusively establishes, as assumed by the assignment, that there was such a breach of the terms of contract mentioned on the part of the owner of the house and the contractor as to require the court to say, as a matter of law, that there was a breach in respect to the points above mentioned. The judgment of the trial court involves the finding of fact against the contention made by appellant, and we would not be authorized to disturb such finding if there is evidence to warrant such finding. It is plain to be seen, we think, from the language of the provision in question, that it was not the agreement of the owner and the contractor that payments by the owner to the contractor should be in proportion only as the work bore to the completed building, nor that the owner should pay only a certain per cent, of the contract price as the building progressed. The payments were to be, as expressly provided, 85 per cent, of each weekly “estimate” made actual labor done and material furnished.” That the payments were made weekly during the progress of the work, and only for actual labor done and material furnished, seems not to be a disputed point in the evidence. Hence the fact appearing that the building was only two-thirds completed at the time of the abandonment, in connection with the fact that $2,528 was paid of the $3,300 contract price, would not in this record be sufficient to show accelerated payments in violation of the contract. And the assignment must rest for merit entirely upon the further contention that the evidence shows that the owner in the payments made exceeded 85 per cent, of “said estimate.” It would be difficult to say that the evidence did not authorize the finding by the trial court, as involved in the judgment, that an “estimate,” within the meaning of the contract, was made by the parties, and that advances were made by the owner’s agent on such estimate as a whole. While it does appear that the labor was paid in full at the end of each week, it does not appear conclusively, taking the evidence as a whole, that the estimate of the cost of the material for the building was fully paid up and in excess of 85 per cent, of the whole estimate. The language of the provision does not require that 15 per cent, each of the amount of the labor done and the amount of material furnished shall be reserved by the owner, it is of sufficient compliance that there be not payment in excess of 85 per cent of the whole estimate made up of both labor done and material furnished. And especially was the finding warranted that at the time of the abandonment of the contract the payments were not in excess of the amount to be paid under the contract if force and weight be given, as the court was authorized to do, to the fact that $668.30 worth of material was not paid by the owner. This item of material aggregating $668.30 that went into the building, when added to the $2,528 paid by the owner, would go to show that $3,196.30 in labor done and material furnished went into the building, and that the owner had not paid on the whole estimate a sum in excess of 85 per cent. It is shown that this $668.30 was in the estimated sum on which Mitchell figured 85 per cent. As we cannot say, as a matter of law,.that the evidence shows a breach of the agreement, the assignment must be overruled.

By the third and fourth assignments of error grouped the contention is made that it was error to allow appellee a recovery for the especial amount of expenditures for labor and material shown in the evidence to have been necessarily incurred in overhauling and rebuilding certain work of the contractor, because appellee’s superintendent, Mitchell, made payments for the worls done' and materials furnished and made no objections as the work progressed, and which operated (úb an acceptance of the work done by the contractor, concluding appellee under the contract from questioning the inferiority of the contractor’s work. In other words, the assignment complains of the judgment being excessive to the amount expended in overhauling the inferior work of the contractor for the reasons advanced in the assignments. It would seem to be a full answer to the assignments, as against the contention of es-toppel by negligence against the appellee as a matter of law, that the parties to the building contract expressly provided: “It is agreed'no acceptance or payment under the contract shall be conclusive that the contractor has fully performed this contract, if, as a matter of fact, he has not done so nor as a waiver of any defective work.” And further on the facts of the case we cannot say that estoppel by negligence, as a matter of law, exists, arid the assignments for this reason must be overruled. The contract provided: “The contractor shall and will well and sufficiently perform and furnish the labor and materials under the direction and to the satisfaction of J. Dawson Mathews, architect, or such other person as may be employed by the owner as superintendent.” The testimony in the record shows that Mitchell was not employed as a superintendent on the building, but it was agreed between appellee and the contractor that Mitchell should be the person to “estimate” weekly the cost of actual labor done and materials furnished for the purpose of having the 85 per cent. paid. It was understood that Mitchell was not to perform any duties on or about the building. As Mitchell was not a superintendent on or about the building, and it was so understood that he was not, he owed no duty under the contract to make decision and pass upon and approve or disapprove the work being done by the contractor. If it had appeared as a fact, which it does not here, that Mitchell was a superintendent employed as such on the building by. the owner, then a different ruling might be made. Jones v. Risley, 91 Tex. 1, 82 S. W. 1027. And as the authority of Mitchell was to make “estimate” only for purpose of advances, and with no authority to inspect or superintend the work and the kind and quality of the work done, it would follow that appellee was not bound by the contract nor by estoppel from questioning the inferiority of the work done by the contractor. Mathews, the architect, testified that he drew the plan and specifications, but that he was never on the ground while the contractor was putting up the building, and never inspected the building until after the contractor abandoned the work. When the architect did inspect the building he discovered that the walls of the building were not plumb, the floor was not level, the foundations were in wrong, none of the rooms were of the size called for by the plan, and the brick work had cracked. It was necessary for the whole work to be gone over because of its inferiority and to complete it according to the contract plan and specifications. No question is made as to the inferiority of the work done by the contractor nor as to the work not being done according to the plan and specifications, and no question is made that the architect specified did accept the work of the contractor as it progressed. The surety company guaranteed the faithful performance of the work, which involves a risk on the part of' the surety company of the inferiority of the work done by the contractor. And, besides, paragraph 8 of the contract contemplates that the work may be done defectively by the contractor and authorizes the owner to have such condemned work done over and the expense incurred charged to the contractor and! paid by him. Hence the amount necessary and proper for overhauling the work is recoverable. The assignments are overruled.

By the fifth assignment the contention is made that appellee was not entitled to-recover as a part of his damages the amount, paid the architect for services in supervising the overhauling of the work done by the contractor on the ground that appellee was estopped from making such claim by reason of having paid out the advances required by the contract without inspection of the work done either by himself, the architect, or the superintendent. It is believed there is no estoppel by negligence or carelessness, as a matter of law, in the case, as ruled in the preceding assignments, and this assignment should be overruled. The contract expressly provides that the advances required to be-made by the owner each week shall not be-deemed an acceptance or waiver of any defective work by the contractor, and the contract does not require that the owner shall inspect the quality and character of the work or that the architect or superintendent shall do so before the owner shall make the 85-per cent, advance. And it is not claimed that appellee himself, or the architect or Mitchell for appellee, ever as a fact accepted the work done by the contractor, either in whole- or in part. So the evidence would seem to-support the finding by the court, as involved-, in his judgment, that the owner was not guilty of negligence on which to predicate estoppel, and we would be bound by this finding, since the assignment does not ehallengethe finding of fact.

By the sixth assignment appellant contends, that there was error in not allowing it credit for the sum of $772 balance due on the contract price of the building. It appears that the 85 per cent, advances paid to the contractor amounted to $2,528, leaving $772 as a balance of the $3,800 contract price. The itemized account of the damages sued on and' proven was $4,411.47. The $772 was credited. on this amount, leaving a balance of $3,630.47, and judgment was rendered against the contractor for the $3,639.47, and against appellant for $3,300 the amount of the bond. Thus it appears that due credit was allowed for the $772 by deducting that sum from the amount expended by appellee in completing the building. After deducting the $772 from the amount expended in completing, the remainder, which was $3,639.47, was the proven necessary cost of the building in excess of the contract price. The credit given inured' to the credit and benefit of both the contractor and the surety, and the damages for which judgment was given were authorized.

The judgment is affirmed.

On Motion for Rehearing.

Appellant especially argues that it was error to overrule the third and fourth assignments, which were grouped. We still think, as before, that the two assignments mentioned can only properly he construed as presenting for our- determination the one point that the judgment is excessive to the extent of the amount expended by appellee in overhauling inferior work done by the contractor upon the ground that the proof established estoppel by negligence in supervising the work against appellee. This assumes, as we undertook to say before, that the proof so conclusively established estoppel by negligence as to require us to say, as a matter of law, that estoppel by negligence against appellee in supervision of the work of the contractor existed and should be applied. We still think we would not be warranted in so holding, as a matter of law, and that the finding of fact in that respect, as involved in the judgment of the court, would be binding on us. As we could not say, as a matter of law, that estoppel by negligence in supervising the work of the contractor was established against appellee, then we feel constrained to rule, as before, that the judgment could not be held excessive upon the ground of the assignment.

The motion is overruled.