text:
    SOUTHERN ENGINE & PUMP CO. v. TENEHA LIGHT & POWER CO.
    (No. 7408.)
    (Court of Civil Appeals of Texas. Galveston.
    June 15, 1917.)
    1. Sales <S&wkey;359(2) — Remedies oe Buyer— Sufficiency.
    In an action on notes given for the purchase price of an engine, and to foreclose a chattel mortgage lien on such property, evidence held to j uscify the conclusion that the engine', as such, had no value.
    [Ed. Note. — For other cases, see Sales, Gent. Dig. § 1068.]
    2. Sales <&wkey;>354(5) — Remedies of Buyer— Rescission — Market Value.
    As the answer alleges that the engine was worthless, and the evidence amply sustains the allegations that the engine was worthless as such, although some parts of the engine may have had some value as manufactured machinery or as junk, failure of consideration was sufficiently pleaded and-shown to defeat the right of niaintiff to recover on the notes, although the market value of the engine contracted to be delivered and the market value of the engine actually delivered were not pleaded.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. § 1014.]
    3. Sales <&wkey;178(3) — Acceptance.
    Where the contract for. the sale of an engine provided that use of the .engine for Í0 days constituted an acceptance thereof, and that any complaint as to defects must be made in writing within 10 days from the date of its first use, stating specifically and fully wherein the engine failed to fulfill specifications, although such notice in writing was not given the seller within 10 days after the engine was installed and put into operation, where it appeared that for the first 4 or 6 days the seller’s agent was present, for the purpose of seeing that the engine was properly installed, and during that time there was no doubt in the mind of the buyer or such agent that the engine would not operate successfully, and the buyer was notified in writing on the fourteenth day, after the engine was started, that it was not operating properly, and pointed out the defects in its operation specifically, and upon receiving such notice the seller made no claim that the buyer had accepted the engine, held that plaintiff’s failure to make a complaint in writing within 10 days did not constitute an acceptance, or defeat his right to show that the consideration 'of the contract had failed, and upon this ground, have a cancellation of the purchase-money notes and recover amount paid by. him to the seller.
    [Ed. Note. — For other cases, see Sales, Gent. Dig. § 463.]
    4. Appeal and Error &wkey;>909(l) — Review— Presumptions.
    In an action on notes given for the purchase price of an engine, where there was nothing in the statement, under an assignment of error, to show that express charges were incurred under the warranty in the contract, which provided that express charges on replaced parts were to be paid by the buyer, the appellate court cannot presume that the charges were incurred under the conditions in the warranty, and an assignment of error to the judgment, wan-anting such express charges to the buyer, cannot be sustained.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3675.]
    Appeal from District Court, Harris County ; J. D. Harvey, Judge.
    Suit by the Southern Engine & Pump Company against the Teneha Light & Power Company, in which the defendant pleaded damages in reeonvention in the answer. Judgment for defendant, and plaintiff appeals.
    Affirmed.
    Bryan & Bryan, of Hpuston, for appellant. 'Dallas Ivey, of Tenaha, and Carter & Walker, of Center, for appellee.
   PLEASANTS, C. J.

This suit was brought by appellant to recover of M. M. Eichelberger, who was doing business under the firm name of Teneha Light & Power Company, on 10 promissory notes, dated April 16, 1914, for $50 each, with interest, and 10 per cent, attorney’s fees, which notes were given as part of the purchase money of certain machinery and material sold by appellant to appellee, and to foreclose a chattel mortgage lien on said property and also to recover $43.39 on open account for merchandise sold by appellant to appellee.

. Defendant in his answer after admitting the purchase of the engine under the contract declared on by plaintiff and the execution of the notes pleaded in substance that he was induced to enter into the contract for the purchase of the engine by fraudulent misrepresentations ■ of plaintiff’s agent who sold him the engine; that the engine was purchased under an express warranty, by plaintiff that it would successfully operate, and that if it did not plaintiff would furnish an engine that would; that because of some latent defect in its construction it could not be successfully operated; that shortly after it was installed its defective condition developed, and defendant notified plaintiff, who endeavored to remedy the defects and make the engine operate properly; that plaintiff’s repeated 'efforts to discover and remedy the defects were unavailing, and defendant was not able to successfully operate his plant with the engine, and plaintiff failed, when so requested by defendant, to comply with its contract of warranty and furnish defendant an engine that would successfully operate; that defendant’s continued efforts to run his plant with said engine, which he was induced to make by the repeated promises of plaintiff to rpmedy the defects in the engine, and assurance that it would make the engine work properly, caused defendant much loss and damage. The amount of the damage claimed is itemized and each item is specifically pleaded in the answer in re-convention against plaintiff. The answer further avers that defendant, being unable to successfully operate his plant with said engine, after several months’ earnest endeavor so to do, sold the plant, reserving the engine; that the engine is worthless, and the consideration for said contract and notes has wholly failed.

“Further answering herein, he says that he now tenders the engine to plaintiff, and asks that plaintiff be required to receive the same, and that the contract between plaintiff and defendant be canceled, and that he recover the purchase price paid by him on said engine, and that the notes sued on herein by plaintiff be canceled and held for naught, and that he recover his damages, actual and exemplary, and for all costs of suit, and all matters between plaintiff and defendant touching, the. matters involved in this suit he fully inquired into, and for special and general relief, both in law and equity, he will ever pray.”

Plaintiff filed a supplemental petition, in which it specially excepted to the several items of damage claimed by defendant, and specially pleaded that under the contract defendant had 10 days in which to test the engine, and that if he failed to complain to plaintiff of any defects, or continued to run the engine after the 10 days, it would constitute an acceptance of the engine, and that the engine commenced operating on May 12th, and on May ISth appellee accepted same in writing (which writing was set out in full), and continued to operate the engine the entire month of May and for more than 10 days.

Defendant filed his first amended first supplemental answer December 2, 1915, pleading that the defects in the engine were latent, and could not be discovered sooner than they were, and denying a waiver of any right he might have.

The trial in the court below without a jury resulted in a judgment that plaintiff take nothing by its suit; that the consideration for the notes had failed; that the engine was the property of plaintiff, and the title thereto vested in plaintiff. It was further adjudged that defendant recover of plaintiff the sum of $500, which he had paid plaintiff as part of the purchase price of the engine, and the further sums of $55 excess freight paid by the defendant on said engine, $52 express paid by defendant on cylinders for said engine, sent him by plaintiff in its efforts to remedy the defects in the engine, and $72 for repairs of said cylinders.

The evidence shows that the engine was installed on May 12, 1914, and put in operation by Mr. Cook, the agent of plaintiff, sent to Teneha for the purpose of starting its operation. He remained there 4 or 5 days. It operated satisfactorily for about 24 hours, and began to show that there was some'material defect in its construction. The manner in which the engine performed is thus stated by defendant:

“Now, from the 12th of May, when this engine was installed, to the 28th of Blay, the condition of the engine, in its operation, was that it seemed to heat excessively in the crank shaft. Mr. Cook, the plaintiff’s representative, was there and knew it. That was after the 12th. Mr. Cook was there 4 or 5 days, I don’t remember just which, at that time. From the 12th of May to the date of the letter I have in my hand, that engine kept heating in the crank shaft ■all the time. -It continued running hot in the crank shaft, and Mr. Cook gave us to understand when he was there that that was due to the internal combustion in the engine, and it would always be hot. I made a further report o'f that to them, about' the 26th. The letter handed me is dated at Teneha, Tex., May 26, 1914, and is as follows: ‘We are up against a new trouble, and have been fighting it since the 22d, with hopes of finding the trouble. The engine gets hot. Friday night, it stopped on us from heat. Saturday night we had to shut down at 10:30, and worked all day Sunday, and since each morning from 3 to'5 it gets so hot it has to be shut down. We have taken the engine apart and cleaned the rings and everything about it, and now are up against a new proposition that we are. not able to solve. It seems as though the oil burns on the cylinder and makes it work hard, and that heats the piston, and crank shaft.’ The condition that I described in that letter existed at that time; that letter is a correct statement of the trouble I had with the engine. The letter was written on the 26th. I had that engine installed on the 12th; it had been running 14 days up to that time.”

The engine could not be made to operate successfully for any length of time, and defendant was continually calling upon plaintiff to remedy its defects. In response to these calls plaintiff repeatedly sent men to Teneha to try and make the engine operate properly, and sent a new cylinder every few weeks to replace cylinders which wore out or were cut 'out for some unexplainable reason; but notwithstanding these efforts of plaintiff the defects were not remedied, and the engine would not operate successfully. The engine developed its guaranteed horse power, which was sufficient to properly operate defendant’s plant; but, as before stated, because of some unexplained defect in its construction it could not be made to operate successfully, except for intervals. Sometimes it would not operate at all, and at other times its operation was wholly unsatisfactory.

Defendant finally became satisfied that it could not be made to operate successfully, and demanded of plaintiff that it comply with its contract, and furnish him an engine that 'would so operate. After evading for some time a positive answer to this demand, and making further representations to defendant that the engine would eventually operate properly, plaintiff finally refused to furnish another engine. The evidence justifies the conclusion that the engine as such had no value.

Appellant’s first assignment of error is as follows:

“The court erred in entering judgment against the plaintiff and for the defendant on his plea of failure of consideration, and in canceling the notes sued on by plaintiff, for the reason that said issue was not before the court, there being neither pleading nor evidence to support the same, in this: That it was not alleged and not proven what was the market value of the engine contracted to be delivered, and what was the market value of the engine actually delivered.”

We do not think there is any merit in this assignment. The answer alleges that the engine was worthless, and the evidence amply sustains the allegation that it was worthless as an engine. Of course, some parts of it may have had some value as manufactured machinery, and the material out of which it was made doubtless bad some value as junk; but when it is shown that the engine as such was worthless to appellee, and that appel-' lant failed to comply with its contract to furnish appellee an engine that would operate successfully, we think a failure of consideration is shown, which defeats the right of appellant to recover upon the notes, and entitled appellee to recover the amount paid by him on the contract. Hallwood Cash Register Co. v. Berry, 35 Tex. Civ. App. 554, 80 S. W. 857.

The second and third assignments complain of the judgment on the ground that the defendant retained possession of the engine after he discovered that plaintiff had breached its contract, and under the terms1 of the contract use of the engine for ten days constituted an acceptance thereof, and defeats defendant’s right to a1 cancellation of the notes and recovery of the amount paid by him. The provision of the contract upon which these assignments are predicated reads as follows:

“Should there be any doubt in the mind of the purchaser that the material furnished is as represented herein, he must advise Southern Engine & Pump Company, at Houston, Tex., ini writing (by registered mail) within 10 days from date of its first use, stating specifically and fully wherein it fails to fulfill the specifications, whereupon we shall have 60 days within which to fulfill same. No such complaint being received hereunder, or the continued use of such machinery after expiration of time mentioned, shall constitute acceptance thereof as being in full compliance with contract.” '

The evidence shows that no notice in writing was given appellant within 10 days after the engine was installed and put in operation, specifying in what respect it failed to fulfill the specifications of the contract. But the evidence further shows that for the first 4 or 5 days in which the engine was operated appellant’s agent was present for the purpose of seeing that it was properly installed1 and assisting in remedying any defects in its operation, and there whs then no doubt in the mind of appellee “that the material furnished was nob as represented,” and both he and appellant’s agent thought the engine would operate successfully. Appellant was notified in writing on the fourteenth day, after the engine was started, that it was not operating properly, and the defects in its operation specifically pointed out. Upon receiving this notice, appellant made no claim that appellee had accepted the engine and waived his right to require a performance of its contract; but, on the contrary, appellant recognized its duty to carry out its contract and provide an engine that would operate successfully, and for this purpose again sent its agent to examine the engine and remedy the defects in its operation.

We do not think, upon these facts, it should be held that defendant’s failure to make complaint in writing within 10 days after he began operating the engine defeats his right to show that the consideration of the contract had failed, and upon this ground have a cancellation of the notes and recover the amount paid by him for the engine. 35 Gyc. p. 424.

The fourth assignment complains of the judgment for $52 express charges1 on cylinders, on the ground that under the terms of the contract these charges were to be paid by defendant. The statement under this assignment is as follows:

“The written contract between the parties contained this express warranty, namely: ‘Guarantee. Any part of the engine returned f. o. b. factory within one year from date of engine invoice, broken on account of defect in material employed in said part, will be replaced or delivered f. o. b. factory free of charge.’ The judgment included $52 express paid by appellee on the cylinders.”

There is nothing in this statement to show that the express charges on the cylinders were incurred under the conditions in the guaranty quoted, and we cannot so presume. In the absence of such showing in the statement, the assignment cannot be sustained.

We think the judgment should be affirmed; and it has been so ordered.

Affirmed.
      <@=s>For other cases see same topic anti KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: PLEASANTS, C. J.

license: Public Domain

text:
    C. W. HAHL & CO. v. HUTCHESON, CAMPBELL & HUTCHESON.
    (No. 7387.)
    (Court of Civil Appeals of Texas. Galveston.
    June 1, 1917.
    Rehearing Denied June 14, 1917.)
    1. Payment <&wkey;87(l) — Duress — Recovery Back.
    An action to recover money paid under duress being essentially a proceeding in equity, it is essential to plaintiff’s right to recover that it appear that defendant ought not in justice and good conscience to retain the money.
    [Ed. Note. — For other cases, see Payment, Cent. Dig. § 283.]
    2. Attorney and Client &wkey;>148(2) — Compensation oe Attorney — Ownership oe Judgment.
    Under a contract between attorneys and client, providing that the client should pay one-half of any sum- recovered by suit on a claim, after paying all expenses of litigation, the attorneys became equitable owners of one-half of the judgment recovered by them for their client, though the contract contained no words of conveyance.
    [Ed. Note. — For other cases, see Attorney and Client, Cent. Dig. § 353.]
    3. Assignments <&wkey;48 — Equitable Assignment-Formality.
    An equitable or constructive assignment of a fund does not depend upon any particular form of words, but may be created by any language or act making an appropriation of the fund.
    [Ed. Note. — For other cases, see Assignments, Cent. Dig. § 133.]
    Appeal from District Court, Harris County ; Chas. E. Ashe, Judge.
    Action by C. W. Hahl & Co. against Hutcheson, Campbell & Hutcheson. From judgment for defendants, plaintiffs appeal-.
    Affirmed.

      L. B. Moody, of Houston, for appellants. Hutcheson & Hutcheson, of Houston, for ap-pellees.
   PLEASANTS, C. J.

This suit was brought by appellants, C. W. Hahl & Co., a firm composed of C. W. Hahl and P. A. Connable, against the appellees, Hutcheson, Campbell & Plutcheson, a partnership' engaged in the practice of law, and A. It. Anderson, sheriff of Harris county, to recover the sum of $6,-457.10, with interest thereon from September 4, 1009, alleged to have been paid ap-pellee Anderson for the use and benefit of the other appellees under duress of property, and the further sum of $750, alleged to be the reasonable attorney’s fees and the amount which appellants had agreed and contracted to pay its attorneys for prosecuting this suit. Prior to the trial in the court below C. W. Hahl became the owner of his partner’s interest in plaintiff' firm, and by amended petition prosecutes this suit individually. As briefly summarized as possible, the facts alleged in the petition, upon which plaintiff’s cause of action is based, are as follows:

On January 21, 1908, a judgment was rendered in the district court of Harris county in favor of E. M. Paulson, B. B. Haugan, and ffis. dander, composing the Southland Immigration Association, against C. W. Hahl & Co., for the sum of $17,500. A motion for new trial filed by C. W. Hahl & Co. was overruled, and in due time an appeal was perfected to this court by said firm. Said cause was affirmed’by this court on January 4, 1909, and application' for writ of error was refused by the Supreme Court in May, 1909. While the cause was pending in the Court of Civil Appeals, appellee B. B. Haugan transferred his one-third interest in the judgment to his coappellee, Wm. dander. Thereafter, on September 8, 1908, dander, for a valuable consideration, assigned and transferred his two-thirds interest in the judgment to J. N. Taub. This transfer was, on the 9th of September, 1908, filed with the papers of the cause and noted in minutes of the court as required by the statute. After the purchase of this two-thirds interest in the judgment by Taub, he and Hahl & Co. entered into an agreement of compromise of said judgment, and Hahl & Co. executed and delivered to him a note for the amount agreed to be paid in compromise of said judgment. While the application for writ of error was pending, the one-third interest of E. M. Paulson was settled and released by Paulson and appellees, Hutcheson, Campbell & Hutcheson.

After the mandate from the Court of Civil Appeals had been filed in the lower court, appellees Hutcheson, Campbell & Hutcheson, who were the attorneys for Paulson, Haugan, and dander in said suit, caused an execution to be issued on said judgment, and after writing an indorsement on the writ to the effect that one-thii’d of the judgment had been released, they put the execution in the hands of appellee A. It. Anderson, with instructions to collect thereon one-half of the remaining two-thirds of said judgment and pay same over to them. This execution was issued without the consent and over the protest of J. N. Taub, and with full knowledge on the part of appellees that the interests of Haugan and dander in said judgment had been transferred to Taub, and that he had entered into the agreement of compromise with C. W. Hahl & Co., as before stated. Acting under the direction and instructions of defendants Hutcheson, Campbell & Hutche-son, the defendant Anderson, on July 31, 1909, levied said execution upon lands of. plaintiff in Harris county of more than $100,-000 in value. Plaintiff, before said levy was made, advised Anderson of all of the facts before stated, showing the want of authority in the other defendants to procure the issuance of said writ, and requested him not to levy upon his property thereunder. Notwithstanding plaintiff’s protest Anderson made the levy and advertised the property for sale. In order to prevent the sale of the property under said execution, plaintiff applied to the judge of the Sixty-First judicial district for a writ of injunction restraining defendants from making said sale. This application for injunction was refused on August 3, 1909. The Court of Civil Appeals had then adjourned for the term, and could not meet until October, 1909. Plaintiff had on July 13, 1909, before the issuance of the execution, entered into a contract to convey the lands levied upon under said execution within 60 days from the date of said contract, and had become bound and obligated to convey same with a perfect title. It was impossible for plaintiff to carry out this contract without obtaining a release of the levy, and, as before stated, no relief could be obtained by plaintiff within the time allowed by the contract by appeal from the order of the district judge refusing the injunction. Under these circumstances plaintiff, in order to prevent the great loss and damage that a failure to comply with said contract of sale would have caused him, was compelled to pay to the said Sheriff Anderson one-half of the two-thirds balance due upon said judgment and thus obtain a release of said levy. This money, $6,457.10, was paid under protest and with notification to defendants that plaintiff would immediately file suit against defendants to recover same, together with damages for the wrongful and unlawful levy of the execution and collection of said sum.

In addition to a general demurrer, special exceptions, and plea of res adjudicata, by which the judgment in the injunction suit is pleaded in bar of plaintiff’s right to recover in this suit, the defendants’ answer, after a general denial, presents the following defenses:

(1) They pleaded that they liad and owned an equitable assignment, lien, and charge upon the cause of action and judgment for the amount recovered by them, under a contract with idle plaintiffs in the Southland Immigration Association suit, to bring said suit for them upon the basis of one-half interest in the cause of action and recovery, and therefore, as such owners and so interested, they had a right to cause the execution to be issued and to collect moneys due them, and have a right now to keep that which they had obtained.

(2) That, if it be held that the defendants have no equitable title, interest, lien, or charge upon the judgment, or cause of action, and the contract between them and their said clients only operated as a personal debt or promise that clients would pay them out of the judgment, then, when the judgment was obtained, defendants acquired an equitable claim on the same, with which plaintiff, having had express knowledge in writing from defendants of their interest, could not interfere, without plaintiff being guilty of participation hi a fraudulent transaction as to these defendants. That, therefore, plaintiff had not come into equity with clean hands, and had no standing in a court of equity to maintain an equitable case upon a situation which was the result of his own wrongful and fraudulent conduct.

(3) That the statutes of the state of Texas declare all conveyances of the character which this one to Taub was, made as it was with the cognizance and under the procurement of Hahl, and for the purpose of defrauding and defeating defendants out of their interest in the judgment, void, and that the defendants, not coming into equity with clean hands, could not in this suit assert any rights or claims arising out of said purported and fraudulent transfer.

(4) That the basis and foundation of this kind of a cause of action is that defendants have money which they ought not in conscience to have obtained or to hold, whereas, the evidence in this case shows, and the jury and court found affirmatively that the defendants were entitled to this sum, either by way of having an interest in the judgment, or by way of being satisfied by payment out of same, and that but for the fraudulent conduct of their client and Halil they would have received the same without the necessity of process or litigation, and these defendants having received said money into their possession, which in equity and conscience they ought to have had and ought to keep, no court of equity will set in motion its machinery to deprive them of it.

(5) That if the defendants did not have a one-half interest in the judgment, or equitable lien and charge thereon, and only had a debt against Olander and Haugan, still, under the undisputed facts, the plaintiffs in the original suit, Olander and Haugan, had agreed and promised to pay the defendants the said amount out of any recovery made by them, and defendants in good conscience and equit3r were entitled to said sum, and would-have obtained same but for the fraudulent transfer' made by the said Olander, with the purpose and intent to defraud Hutcheson, Campbell & Hutcheson, which intent was participated in by Hahl, the plaintiff in ■ this suit, and aided by him, in that he paid Olan-der $1,260 in money to assist him to make the pretended sale to Taub, so that a court of equity, upon the maxim “Ex dolo malo causa non oritur,” which has its counterpart in the legal maxim, “No man can profit by his own wrong,” could not allow plaintiff in this suit to assert any rights against the defendants growing out of the said fraudulent transfer.

The trial in the court below with a jury resulted in a judgment in favor of defendants. The evidence .shows the following facts:

In April, 1907, William Olander called upon appellees, Hutcheson, Campbell & Hutche-son, with whom he had no previous personal acquaintance, for the purpose of employing them to collect a claim of himself, B. B. Haugan, and E. M. Paulson, doing business under the name of Southland Immigration Association, against O. W. 1-Iahl & Oo. After an investigation of the facts, ■ said appel-lees advised Olander that they would take the case, and he told them that the South-land Immigration Association had no money, and thereupon the following written agreement for a contingent fee was entered into between them:

“State of Texas, County of Harris.
“Know all men by these presents that this memorandum of agreement, this day entered into by and between E. M. Paulson and B. B. Plaugan, of ^Minneapolis, Minn., and Wm. Olan-der, Bee county, doing business under the firm name and style of the Southland Immigration Association, -parties of the first part, and Hutcheson, Campbell & Hutcheson, of Hams county, Texas, parties of the second part, wit-nesseth: That the parties of the first part have this day employed the parties of the second part to bring and prosecute for them- a suit against the firm of O. W. I-Iahl & Oo., of Houston, Plarris county, Texas, for a commission due the parties of the first part by the said O. W. Hahl & Oo., for the sále of some land in Bee county, Texas, known as the ‘Nutt Ranch,’ amounting to 10,900 acres, the commission claimed by the parties of the first part of O. W. I-Iahl & Oo. being $2.50 per acre for the said 10,900 acres, and the parties of the first part hereby agree to pay to the parties of the second part one-half of any amount that may he recovered on said claim aigainst said O. WT. Hahl & Co., after paying all the expenses of the litigation, and the parties of the second part hereby agree to take charge of said claim of the parties of the first part against O. W. Hahl & Co., institute suit at once, undertake to prosecute the samo to final judgment, on the term's above stated of one-half of any amount recpver-ed for their services, and will assist in the collection of any judgment that may be had or obtained by the parties of the first part.
“It is agreed between the parties hereto that in the event the parties of the first part shall fail to secure a judgment against the said C. W. I-Iahl & Co., that whatever costs may he incurred in prosecuting said suit, the same will be borne equally- that is, the parties of the first part pay one-half, and the parties of the second part the other half.
“This agreement executed in duplicate.
“Witness our hands this the 22d day of April, A. D. 1907. [Signed] Southland Immigration Ass’n, per Wm. Olander, Parties of the Eirst Part. Hutcheson, Campbell & Hutcheson, Parties of the Second Part.”

This contract was made before the filing of the suit of the Southland Immigration Association against C. W. Hahl & Co., and was never acknowledged by Olander, nor filed among the papers in said case, nor noted on the docket, nor on the minute book, where the judgment in said cause was entered. Thereafter said appellees filed said suit, and on January 21, 190S, judgment was rendered therein in favor of E. M. Paulson, B. B. Haug-an, and William Olander, and against C. W. Hahl & Co., for $17,500, from which judgment the defendant therein immediately appealed, under a supersedeas bond. Shortly after-wards said appellees wrote appellant a letter, in which they claimed to be the owners of a one-half interest. By an assignment filed among the papers in said cause on June 15, 1908, and duly noted on the margin of the minute bools, I-Iaugan assigned to Olander all of his interest in said suit. On September 8, 1908, Olander assigned to J. N. Taub all of his interest in said judgment, stating that he was the owner of two-thirds of same, which assignment was duly acknowledged and filed among the* papers in said cause on September 9, 1908, and noted on the margin of the minute book. On January 11, 1909, this two-thirds interest in said judgment was compromised between Taub and appellant for $4,250. Thereafter, in February, 1909, said judgment was affirmed by the Court of Civil Appeals, and an application made to the Supreme Court for writ of error. In April, 1909, the Paulson one-third interest in said judgment was assigned to A. E. Connable, and afterwards released by him. Appellees, Hutcheson, Campbell & Hutcheson, joined in the assignment of this one-third interest to Connable. Thereafter, in May, 1909, writ of error was denied by the Supreme Court, and on June 21, 1909, the mandate was filed in the trial court. On July 27, 1909, appellees 'caused the clerk of the trial court to issue an execution under said judgment, and placed an indorsement thereon that one-third of the judgment had been paid and released, and placed same in the hands of the sheriff, and instructed him to collect on said execution one-half of the remaining two-thirds and to pay the same over to them.

Hutcheson, Campbell & Hutcheson were never paid any fee by the Sohthland Immigration Association or any member of said firm. All of the costs incurred in the suit against Hahl- & Co. were paid by Hutcheson, Campbell & Hutcheson; the Immigration Company never having been called upon by them to advance or pay any of said costs. All of the allegations of the plaintiff’s petition as to the levy of the execution, suit to enjoin the sale, the fact that plaintiff, in order to secure release of his property from the levy and prevent great loss and damage, satisfied the execution by paying the amount demanded under protest, and immediately brought this suit to recover it back from ap-pellees, are sustained by the undisputed evidence.

The evidence further shows that 1-Iahl, with notice of the claim of Hutcheson, Campbell & Hutcheson to a one-half interest in the judgment, procured the transfer of the judgment from Olander to Taub. Olander came to Hahl to sell him the judgment, and offered to take $3,000 for the interest of himself and Haugan in the judgment, which upon the face of the judgment was a two-thirds interest. Hahl told him he did not have the money to- buy the judgment himself, but that Taub had frequently bought judgments against him and that he might buy this one. Olander went to see Taub and after several conferences with him and with Hahl the trade was finally made. Taub offered Olander $2,000 for the two-thirds interest in the judgment, but Olander refused this offer and went back to see 1-Iahl. The further negotiations between these parties, which resulted in the transfer of the judgment, are thus stated by appellant 1-Iahl:

“I stated to Olander that if he (Olander) would accept Taub’s offer of $2,000 and sell the two-thirds of said judgment to Taub for said sum, I would give Olander my note for $1,000 to make up the difference between the amount Taub was willing to pay and the amount Olander was willing to take, to which proposition Olander agreed, and went away to close up the sale to Taub, but shortly came back and said that it was all off, as Taub had reconsidered his offer and was unwilling to pay more than $1,750, and thereupon I agreed to give my note to Olander for $250 more, so that Olander might get the $3,000 required by him, to which Olander agreed, and again went away and completed the sale of said two-thirds of said judgment to said Taub. After Olander went away the second time I talked with Taub over the telephone. I did not see Taub in person at all. Over the telephone I told Taub that I would like to have him buy the judgment, if he would, and that if he would agree to give me time, in ease the judgment went against me, I would agree to reimburse him for the money he paid, to prolong the time and give me a chance to pay it out. I did not, in that conversation, or in a subsequent conversation, tell Taub that I would give Olander these notes, or either of them, as an inducement to sell the judgment to him.”

He further testified:

“I paid $1,250 to Olander to induce him to sell to Taub, but I do not call that working up a trade. I paid that $1,250 as a bonus, in order to get the judgment in the hands of Mr. Taub. I paid this amount of $1,250 to induce the sale to,Taub for $1,750 óf a $17,500 judgment; that’is, a two-thirds interest.”

The following issues only w'ere submitted to the jury:

“No. 1. Did Hutcheson, Campbell & Hutche-son and the .Southland Immigration Association, in making their agreement for the bringing and prosecution of the suit, intend that Hutcheson, Campbell & Hutcheson should have a one-half interest in whatever might ’ be recovered by that suit as compensation for their services?
“No. 2. Did J. N. Taub, at the time-or before the transfer to him of the judgment, have notice of such facts and circumstances as would arouse the suspicion of an ordinarily prudent man, and which would, in the exercise of ordinary prudence, have caused him to make inquiry as to the purpose for which such transfer was made?”

The verdict answered both of these questions in tlie affirmative. The evidence sustains both of these findings.

Appellant’s first assignment of error complains of the refusal of the court to instruct the jury to find a verdict for plaintiff, and the second assignment, complains of the judgment in favor of defendants upon the ground that upon the undisputed evidence plaintiff was entitled to a judgment notwithstanding the findings of the jury. The proposition under the first assignment is as follows:

“It appearing from the evidence that in September, 1908, J. N. Taub became the owner of a two-thirds interest in the Southland Immigration Association suit, which was compromised and settled between appellant and Taub in January, 1909, and that A. E. Connable became the owner of the remaining one-third interest in said suit, and released the same in -April, 1909, and that in July, 1909, appellees procured the unauthorized issuance of an execution under said judgment and levied the same upon appellant’s property, and that he paid them on September 4, 1909, .the sum of $6,-457.10, and that said money was paid under duress of property, he was entitled to recover that amount from appellees, with interest thereon, and the court ought to have so instructed the jury, when requested so to do by appellant.”

Under the second assignment this proposition is presented:

“When attorney and client have contracted that the attorney shall have a one-half interest in whatever may be recovered by the suit as-compensation for his services, and pending the suit the client compromises with the defendant in the suit for less than the amount of a judgment which has not become final, but has been supérseded by an appeal under a supersedeas bond, the amount to which the attorney is entitled is determined and fixed by the amount of the compromise, and not by the amount of the superseded judgment, and Taub as the owner of the ITaugan and Olander interests in said judgment, having compromised the same with the defendants therein for the sum of $4,250, the amount to which appellees were entitled could not exceed $2,125, with interest from January 11, 1909, and appellees having forced appellant to pay $6,457.10, he was entitled to judgment against appellees for the difference between the two amounts, with interest from September 4, 1909, and the court ought not, therefore,. to have rendered judgment that appellant .take nothing herein.”

These two assignments present the only two material questions raised by the record. The remaining assignments either present in different forms the questions raised by the first two, or present, questions in regard to the admissibility of .evidence which we do not regard as material, 'and, while each of the assignments has been duly considered, all of them except the first two are overruled without discussion.

The action to recover money paid under duress is essentially a proceeding in equity, and to entitle the plaintiff in such action to recover it must appear that the defendant ought not in justice and good conscience to- retain the money. In 30 Cyc. 1303, -the rule is thus stated:

“But in order to recover moneys paid under duress, it must be shown not only that there was duress, but also that it was against equity and good conscience for the payee to retain the money.”

Under this rule any irregularity or want of legal authority for the method pursued by appellees to obtain the money from appellant would not entitle him to recover it back, if in justice and good conscience appellees are entitled to retain it. Of course, if the means used by appellees to obtain the money were wrongful, and appellant suffered damage thereby, he would be entitled to recover such damage; but no such question is raised by this record. We think the one controlling question in the case is whether, under the contract between Hutcheson, Campbell & Hutcheson and the Southland Immigration Association, they became the equitable owners of one-half of the judgment recovered in the suit of the Immigration Association against appellant. If they were such owners, they are entitled to retain the money they obtained from appellant by the levy of the execution, because the undisputed evidence shows that appellant, after having been notified of their interest in the judgment, actively assisted Olander to procure the purchase of the judgment by Taub in total disregard of appellees’ rights therein, and if he could have shielded himself under the plea that Taub, from whom he subsequently obtained a release of the judgment, was an innocent purchaser, he is debarred from such plea by the finding of the jury that Taub was charged with notice of ap-pellees’ claim and the purpose and effect of the transfer of the judgment by Olander.

We think the contract above mentioned, construed in the light of the circumstances under which it was made, clearly evidences that the intention of the parties in its execution was to, give appellees one-half of the judgment rendered in the suit, and notwithstanding- the fact that it contains no words of conveyance of an interest in the cause of action, when the judgment was obtained appellees became the equitable owners of one-half thereof. “An equitable or con-’ structive assignment does not depend upon any particular form of words, but the court of equity constructs the assignment out- of the situation of the parties. Any language or act which makes an appropriation of a fund amounts to an equitable assignment of that fund. No particular form of '-words or form of instrument is necessary.” .2 Am. & Bng. Enoy. of Law (2d Ed.) p. 1055. In 5 Corpus Juris, p. 910, it is said :

“Any words or transaction which shows an intention on the one side to assign, and an intention on the other to receive, if there is a valuable consideration, will operate as an effective, equitable assignment” (citing many Texas cases, among them Davis v. State National Bank, 156 S. W. 321).

In 2, Ruling Case Law, § 21, p. 614, is perhaps the best discussion from an editorial standpoint of the question. The editor says:

“Since equity disregards mere form, no particular words or particular form of instrument is necessary to effect an equitable assignment. Any language, however informal, if it shows the intention of the owner of the chose in action to transfer it, so that it will be the property of the transferee, will act as an equitable assignment. It has been said that any order, writing, or act which plainly makes an appropriation of a fund or debt may amount to an equi-' table assignment, and that the true test of an equitable assignment is whether the debtor would be justified in paying- the debt to the person claiming to be the assignee. Thus it has been held that there is a valid assignment in equity whenever the person to whom an obligation is due authorizes its payment to another, either for his own use or for that of some other person, or authorizes any one to receive or hold the moneys, and to apply them to any specific purpose other than for the benefit of the assignor. An assignment- may be in parol, or partly in writing and partly oral. If the equitable assignment of a debt is in writing, and the. in tent and contract of the parties are not fully expressed, it has been held that parol evidence is admissible as in similar cases in reference to written instruments.” Moore v. Lowrey, 25 Iowa, 336, 95 Am. Dec. 799.

These general principles announced by the text-writers are fully supported by the opinions of our highest courts, among which we cite the following: Railway Co. v. Ginther, 96 Tex. 295, 72 S. W. 167; Davis & Goggin v. Bank, 156 S. W. 321; Barnes v. Alexander, 232 U. S. 119, 34 Sup. Ct. 276, 58 L. Ed. 530; Wylie v. Coxe, 15 How. 415, 14 L. Ed. 753; Wood v. Casserleigh, 30 Colo. 287, 71 Pac. 360, 97 Am. St. Rep. 138; Clark v. Iron Works, 81 Fed. 310, 26 C. C. A. 425. In our opinion the judgment of the court below should be affirmed; and it has been so ordered.

Affirmed.
      ®s.Por other oases see same topic and KEY-NUMBEK in all Key-Numbered Digests and Indexes


author: FLV, O. J.

text:
    VIVIAN v. SAN ANTONIO, U. & G. R. CO.
    (No. 5872.)
    (Court of Civil Appeals of Texas. San Antonio.
    May 30, 1917.
    Rehearing Denied June 22, 1917.)
    1. Carriers <@=>303(2) — Injuries to Passengers — Alighting—Invitation.
    - Where an infirm aged passenger had disclosed his destination to the trainmen, statement of one of them, “Well, we are here,” was not an invitation for the passenger to alight while the train was moving.
    [Ed. Note. — Eor other cases, see Carriers, Cent. Dig. § 1226.]
    2. Carriers <@=>303(S) — Duties to Passengers.
    Partial blindness of a passenger does not require presence of an attendant to keep him from leaving the moving train, but only, presence of assistance to alight when the train stopped.
    [Ed. Note. — Eor other cases, see Carriers, Cent. Dig. § 1232.]
    3. Carriers <@=>298(1) — Injuries to Passengers — Negligence.
    It is not negligence for a train to jerk or accelerate speed suddenly while approaching a station, since the railroad need not anticipate that passengers will stand on steps of a moving train.
    [Ed. Note. — Eor other cases, see Carriers, Cent. Dig. §| 1205, 1206.]
    4. Carriers <@=>320(1) — Injuries to Passengers — Negligence—Evidence.
    Evidence in passenger’s action for injuries held to warrant direction of verdict for carrier.
    [Ed. Note. — For other cases, see Carriers, Cent. Dig. §§ 1315, 1317.}
    Appeal from District Court, La Salle County; J. E. Mullally, Judge.,
    Action by Lafayette Vivian against the San Antonio, Uvalde & Gulf Railroad Company. Judgment on directed verdict for defendant, and plaintiff appeals.
    Affirmed.
    Magus Smith, of Pearsall, and Covey C. Thomas, of Cotulla, for appellant. Mason Williams and J. O. Hall, both of San Antonio, for appellee.
   FLV, O. J.

This is a second appeal of this case, the opinion on the former appeal being found in 180 S. W. 953. There is a full statement of the case theiein, and it is unnecessary to repeat it here. After hearing the testimony offered for appellant, the court instructed a verdict for appellee.

The evidence showed that appellant, a man 66 years old, desiring to go from Gardendale to Crystal City, bought a ticket and got on the caboose of a freight train where the ticket was taken up by an employé of appel-lee. Before getting on the caboose, appellant asked a couple of men, .who seemed- to be loading something on or off the train, when the train would get to Crystal City, and they replied when the whistle blew. He stated he told them his sight was bad, and that he desired to get to Crystal City before night. He was told afterwards by another man to get aboard, which he did without assistance. He stated: “My condition was such that I could not see; I was partly blind at that time.” Appellant stated that, when nearing Crystal City, a trainman came through the caboose and said, “Well, we have got here,” and passed out the front end of the car, and appellant got up and passed out the rear end of the caboose. He got down on the lower steps, and as the caboose 'was nearing the depot appellant started to get off, when the train increased its speed, and he tried to recover his place on the step, but went off on his shoulder and was injured. It was dark when this happened. It was not shown that any employé of appellee saw appellant on the step or knew that he was trying to get off the moving train. He was not told by-any one to get off tlie train, nor was be informed that the train would stop for sucb a short time that he would be compelled to hurry off. His bad eyesight did not cause him to fall off the train, and appellee was under no obligation to have employés to assist appellant in leaving the train before the train stopped. He had no reason for believing that the train would not stop to let him off, and he knew that freight trains do not stop usually at passenger depots. He knew the train passed the passenger depot at Woodward before it stopped. He knew that the train was moving, and must have known the danger of trying to get off. He was trying to get off when he fell. He said: “When I say I aimed to step off, I mean I was trying to get off.” Appellant Jived at Gardendale, about 100 yards fsom the depot, and he went there on the day he was hurt unattended, and bought his ticket, and without difficulty worked his way into the caboose of a freight train. Pie was no novice in traveling on trains for he claimed to have “experience on cattle trains” as well as “experience on passenger trains.” He knew it was a freight train, and knew their methods at stations. There is nothing to indicate that the man to whom appellant communicated the fact that his eyes were defective was an employé of the railroad or who got on the train. When he got to the caboose he testified: “I just shoved my way right on into the caboose and got a seat and sat down.” Appellant knew the danger attendant upon getting off trains.

It is claimed that appellee, knowing the condition of appellant’s eyes, invited him to leave the train, and then failed to render him assistance in alighting from the car. All that appellant claims that the trainman said to him was, “Well, we are here.” This cannot be tortured into an invitation to alight from the moving train, no more than the ordinary call of a brakeman for a station 200 or 300 yards from the depot would be an invitation for all passengers on board, bound for that station, to rush out and jump off the moving train. Every one who has had experience on trains, as appellant claims he has, knows that information that a place has been reached is made for some appreciable time before the train comes to a stop, in order that preparation may be made for a prompt exit when the stop is made, and that the call is not made to induce passengers to jump off the train while moving. Appellant was not deceived or misled by the words of the trainman; he knew it was night, he saw men on the platform and lights in the depot, and he knew that the train was moving, just as well as if his eyes had been young and perfect, and yet he attempted to get off the train while moving, and claims to have been thrown while attempting to regain his footing on the lower step. No necessity had been created by appellee for him to leave the train until it stopped as it did at or near all depots. There was no cause for him to believe that he would not be given time to alight, if that could have excused his negligence and temerity in trying to get off a moving train. No one connected with the railroad knew that he was on the steps, for no one saw him get up and move to the rear of the car, and no one could anticipate that he would be so utterly regardless of his safety that he would attempt to alight while the train was moving. The increase of speed or jerk would not have hurt appellant had he been in any other position but that of alighting. The evidence fails to show any negligence on the part of appellee, but clearly shows gross negligence and an utter disregard of the rules of safety upon the part of an old experienced traveler. He was perfectly acquainted with the surroundings, having “gotten on trains lots of times there,” and he tried to get off .when the caboose “was about 20 or 30 steps more or less from the depot.” He did not wait for the caboose to get in front of the depot, where it would evidently have stopped. It seems that appellant had before engaged in the hazardous act of getting off moving trains. His infirmity of sight emphasizes his negligence in endeavoring to leave a moving freight train at night. Appellant testified, “I am sort of like Sam Jones, my education has been badly neglected,” but lack of education should not have rendered him imprudent and foolhardy. Perhaps he overestimated the activity and agility of a man approaching the limit of three score and ten years, and believed that he could, as he had before, leave a moving train with safety, but for his error in judgment he must suffer, and not the carrier.

The partial blindness of appellant did not make it incumbent on appellee to have an employé to watch him and prevent him from leaving the caboose while it was moving, but could have demanded only that some one should be present to assist appellant, if necessary, to alight when the train stopped. Bad eyesight did not contribute to the disaster, but a lack of ordinary care upon the part of appellant.

The only act that appellant could rely upon as negligence upon the part of appellee is that of accelerating the speed when near the depot, and that could not have been negligence, because appellee had no reason to anticipate that appellant would go down on the steps and hang on with one foot in the air in the act of alighting from a moving car. It was not alleged or proved that any one-knew that appellant was on the step in the act of getting off. 1-Ie should not have been there, and if he had stayed where he was, he would not have been hurt. He was not invited, nor was it hinted at that he should get off the car while it .was moving. It is not pretended that the train would not have come to a complete stop and have afforded ample time for appellant to leave the car.

The only possible act of negligence, as before stated, shown by the evidence was that of accelerating the speed of the train while appellant was getting off. It might not have been negligence per se for a half blind man, at night, to attempt to get off a moving train, but it could not be negligence in the railway company, in the absence of knowledge of the dangerous position occupied by its passenger, to increase the speed or jerk the car. However, as said in the case of Railway v. Highnote, 09 Tex. 23, 86 S. W. 923:

“He acted strictly upon his own judgment in so doing and the railroad company cannot be held liable for the results which flowed from such acts. The plaintiff by his own testimony was guilty of contributory negligence in the act of alighting from the train.”

See, also, Railway v. Leslie, 57 Tex. 83, and Walker v. Railway, 151 S. W. 1142.

The contributory negligence was uncontroverted, and there was no evidence of negligence upon the part of the railroad compány. It .was not error to instruct a verdict for appellee. Railway v. Rowland, 90 Tex. 365, 38 S. W. 756; Railway v. Wallace, 139 S. W. 1052.

The judgment is affirmed.
      For other cases see same topic and KEY-NUMBER in all Key-Numhered Digests and Indexes


author: CONNER, C. J.

text:
    STAPLETON v. TRUSSELL et al.
    (No. 8645.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    May 19, 1917.)
    1. Schools and School Districts <^=80(2)— Erection of Sciioolhouses — Acceptance . of Bids.
    Vernon’s Sayles’ Ann. Civ. St. 1914, art. 2844, authorizing school district trustees to contract for the erection of buildings, etc., does not arbitrarily require that the lowest bid be accepted.
    [Ed. Note. — For other cases, see Schools an'd School Districts, Cent. Dig. § Í92.]
    2. Schools and School Districts <&=62— Action Against Trustees — Sufficiency of Petition.
    A petition, alleging that a tax had been levied for building a schoolhouse, and that the school district trustees had not accepted the lowest bid, is insufficient, since Yernon’s Sayles’ Ann. Civ. St. 1914, art. 2844, authorizing them to contract for erecting buildings, etc., does not arbitrarily require acceptance of the lowest bid, nor does the petition show that the tax had been collected, or any amount paid from its proceeds.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 145^-148, 158, 160, 305.]
    3. Schools and School Districts @=>62— Action Against Trustees — Complaint.
    In an action against school trustees for not accepting the lowest bid for a schoolhouse, an answer of two trustees, that they had delegated to a third defendant the authority to receive bids, does not render him individually liable to them, since there is no allegation that he took any action, or that, if he did so, he acted in bad faith as to Ms codefondants.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 145-148, 158, 160, 305.]
    Appeal from Wise County Court; J. W. Walker, Judge.
    Action by - Brandon ■ Trussell and. . others against A. Stapieton and others. From a judgment for plaintiffs, and for certain defendants against the named| defendant, the named, defendant appeals.
    Reversed and remanded,
    McMurray & Gettys, of Decatur, for appellant. Ratliff & Spencer, of Decatur, for ap-pellees.
   CONNER, C. J.

TMs appeal is from the judgment of the county court rendered in a de novo trial on appeal from a justice court. The judgment rests upon the following pleadings, which are in writing. Omitting formal parts, the plaintiff’s petition is as follows:

“Comes now Brandon Trussell, county superintendent of Wise county, Tex., for and on behalf of common School district No. 67, and J. F. Conley, G. A. Kincaid, and G. D. Sewell, resident property taxpaying voters of said district, for and on behalf of said district, and common school district No. 67 of Wise county, Tex., hereinafter styled plaintiffs, complaining of A. Stapleton, W. A. Claburn, and 1-Iarve Farrington, trustees of district, hereinafter called defendants, and for cause of action herein would with respect show to the court as follows, to wit:
“(2) That plaintiffs and defendants are ail residents of and domiciled in Wise county, Tex. That plaintiff common school district No. 67 is a corporation by virtue of the laws of Texas.
“(3)' That said district voted a 50-eent tax for the purpose of the building and erection of a schoolhouse in said district; and that the said schoolhouse was to be built and the contract given to the party or parties offering the lowest bid in response to the advertised invitation to send in bids. That said advertisement was made and bids received by the trustees defendant herein.
“(4) That the said trustees received bids ranging from $137.50 up to $275. That all bids were properly sealed and received by the said trustees, but that the said trustees, wholly disregarding the interests of said common school district, and their advertised invitation to set the contract for said building to the lowest bidder, accepted the bid of $250, disregarding the bids of all others, and especially the lower bids.
“(5) That by reason of said trustees accepting the contract bid of $250 in preference to the lowest bid of $137.50, and having paid the contractor under the bid the sum of $250, the said school district has suffered a loss of $112.50; all of which is due to the acts of the said trustees, as aforesaid.
“(6) Wherefore, premises considered, plaintiffs pray that they have judgment against the said trustees for and on behalf of the said common school district in the sum of $112.50, and the common school district prays judgment for said sum, and for such other and further relief as they may be entitled in law and equity, and they will ever pray.”

In the justice court the defendants filed the following original answer, which presumably was also urged in the county court:

“(2) TJiat plaintiffs have no right to institute this suit.
“(3) That plaintiff school district has not been injured and -has paid out nothing herein.
“(4) Defendants enter general denial and demand strict proof.”

In the county court the following further answer wasi noted upon the trial court’s docket:

“W. A. Claburn and Harve Earrington enter a general and special denial, and further, that they, and each of them, say that they delegated to defendant Stapleton authority and power to receive said bids, and they ask that any judgment that may be rendered against them, that they have judgment over and against the said A. Stapleton.”

The judgment appealed from was in favor of common school district NO'. 67 for $112.50, ■ as prayed for, with a further judgment in favor of the defendants W. A. Claburn and Harve Earrington ovei against the defendant A. Stapleton, in accordance with the prayer of their special plea.

Numerous objections to the proceedings below are presented, but we deem it sufficient to say that in ouk opinion the pleadings of the parties are wholly insufficient to authorize the judgment rendered. By a ■reference to chapter 15 of title 48 of Vernon’s Sayles’ Texas Civil Statutes relating to the subject of education, it will be seen (article 2844) that:

“The trustees of a school district shall contract for the erection of the buildings and superintend the construction of the same; and the county superintendent shall draw his warrant or warrants upon the school fund so appropriated only upon the accounts first approved by them.”

So doubtless the trustees complained of in this action had the power, under the law, to advertise and receive bids for the erection of a sehoolhouse in common school district No. 67; but there is nothing in the law that-arbitrarily requires such board to accept the lowest bid that may be received. As specified in the law, their power in making such contracts is general, and in the absence of limitations they are required merely to act faithfully and in the exercise of their best judgment so as to best serve the interest of their district It is nowhere alleged in the petition under consideration that in the action of the trustees complained of the board, or any member thereof, acted corruptly or in bad faith, nor is it alleged in the petition that the person who presented the lowest bid of $137.50 was one whose bid it would have been wise to accept. Eor aught that appears in the petition, he may have been insolvent or unable to give approved security for the performance of his contract, or in bad repute as a workman, or that for some other sufficient reason the trustees in the exercise of their best judgment deemed it for the interest of. the district that the bid should be rejected. The bid of $250 that was accepted, for aught that appears in the petition, may have been the lowest responsible bid that was presented. So that, as indicated, the mere fact — and this is all that is alleged — that the trustees did not accept the lowest bid, is insufficient to establish a liability against them.

It is to be further noted that, while the petition alleges that a “fifty-cent tax” for the purpose of building a sehoolhouse had been levied, it does not allege the prerequisites to a valid levy, nor that in fact any tax had ever been collected by virtue thereof, or that the amount paid the contractor was out of the proceeds of such levy or out of other funds belonging to the district and chargeable thereto. So, if it be admitted that the remaining trustees could avoid the responsibility placed upon them by the law and wholly commit to the defendant Staple-ton the determination of what bid to accept, such trustees can have no right of action against Stapleton in the absence of an allegation of some state of facts that would make him liable to them. In the answer of the defendants Claburn and Earrington, no fact is alleged except the fact that they delegated to the defendant Stapleton the authority and power to receive bids. It is not alleged that Stapleton received a bid, or took any action in the manner, or that, if he did so, he acted in bad faith in falsely representing the bids to secure their later approval. Or if it be said that the answer is to be construed in the light of the plaintiff’s petition and to have been amplified thereby, yet, as we have already seen, the petition itself is wholly deficient in an allegation of bad faith at least on the part of Stapleton.

We conclude that the judgment must be reversed, and the cause remanded, and it is so ordered.
      <§=3For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BUCK, J.

text:
    C. R. MILLER & BRO. v. MUMMERT et al.
    (No. 8576.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    March 31, 1917.
    Rehearing Denied May 19, 1917.)
    1. Appeal and Error @=>761 — Assignments of Error — Propositions.
    Rule 31 of the Court of Civil Appeals (142 S. W. xiii), providing that to each point stated as a proposition under each assignment of error there shall be subjoined a brief statement, in substance, of such proceedings, or part thereof, contained in the record, as will be necessary and sufficient to explain and support the proposition, With reference to the pages of the record, is not violated where the briefer, instead of quoting the evidence and findings in base verba, in good faith makes abbreviated statements based on the actual facts testified to, and the findings and other proceedings in the record, with reference to the pages of the record sustaining the statement.
    [Ed. Note. — -Eor other cases, see Appeal and Error, Cent. Dig. § 3096.]
    2. Appeal and Error <@=^740(2) — Assignments of Error — Multifariousness.
    An assignment of error is not multifarious, ■which states various reasons why a conclusion of law is erroneous, since the reasons given’are not part of the assignment.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3028.]

      3. CORPORATIONS (©=547 — CHANGE OX NAME— Effect.
    An authorized change in the name of a corporation has no effect on its identity, nor on its rights and obligations.
    [Ed. Note. — Ear other cases, see Corporations, Cent. Dig. § 134, 135.]
    4. Corporations (©=3445 — Property—Power to Convey.
    In absence of collusion between a grantor corporation and its grantee to defraud grantor’s creditors, deed from solvent corporation conveys good title, stripped of equitable lien claimed by grantor’s creditor, whose debt is not reduced to judgment at time of conveyance, whether or not grantee had notice of claim.
    [Ed. Note. — For other eases, see Corporations, Cent. Dig. § 1784.]
    5. Corporations (©=5625 — Dissolution—Remedy of Creditors.
    Where a solvent corporation is dissolved, leaving debts due to creditors, and assets are distributed among stockholders, remedy is, in the absence of actual fraud, against stockholders, under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1206.
    [E'd. Note. — For other cases, see Corporations, Cent. Dig. § 2473.]
    Buck, J., dissenting in part
    Appeal from District Court, Tarrant County; Ben M. Terrell, Judge.
    Bill for an injunction by C. R. Miller & Bro., a corporation, against Harry B. Mum-mert and others. From an order dissolving a temporary injunction, complainant appeals.
    Reversed, and injunction perpetuated.
    Bryan, Stone & Wh.de and W. C. Blalock, all of hi;. Worth, for appellant. Flournoy, Smith & Storer, of Ft. Worth, for appellees,
   BUCK, J.

On October 4, 1913, C. R. Miller & Bro., Manufacturers, a corporation having its domicile in Dallas county, filed suit in the district court of Tarrant county against Harry B. Mummert and the sheriff and first deputy sheriff of Tarrant county, alleging that said plaintiff had been since July 17, 1912, the legal and equitable owner in possession of certain lots in the city of Ft. Worth, Tarrant county, described as lots 1, 2, and 3, block 33, Union Depot addition to said city, holding said lots under a certain deed of conveyance, of date July 17, 1912, executed by Miller Bros.-McCrary Company, a private corporation, duly acknowledged for grantor therein by the proper officer of said corporation, which deed was on said date delivered to the plaintiff by the grantor, arid was by the plaintiff on September 26, 1912, filed for record in the office of the county clerk of Tarrant county, and thereafter duly recorded. It was alleged that the plaintiff paid the grantor a valuable consideration for said lots, and that at the time of said conveyance the said grantor was the owner of the legal and equitable title to same, and was in possession thereof under and by virtue of a deed of conveyance to it in the usual and proper form, made and executed on August 3, 1911, by the Texas Overall Company, a private corporation, and that the grantor in the last-mentioned deed received from grantee a valid consideration for said lots, and that-said last-mentioned deed was by the grantee therein duly filed for1 record on May 14, 1912, in the office o'f the county clerk of Tarrant county, and was by said clerk thereafter duljo recorded in the deed records of said county. Plaintiff further averred that in a certain cause pending in the county court of Tarrant county for civñ cases, the defendant Mum-mert on October 4, 1912, recovered a judgment against the Texas Overall Company in the sum of $245.75, on which judgment said defendant Mummert caused the clerk of said court to issue an execution against the Texas Overall Company, dated September 3, 1913, directed to the sheriff or any constable of Tarrant county, commanding any such officer to levy upon and sell any property that might be found in said county belonging to the Texas Overall Company, for the satisfaction of said judgment; that defendant Mummert placed said execution in the hands of defendants the sheriff and deputy sheriff of Tar-rant county, and caused said officers to execute said' writ by levying upon the hereinbe-fore described lots; that said officers did levy said execution on said property on September 15, 1913, and did thereafter, by direction of defendant Mummert, advertise said property for sale on October 7, 1913, at public vendue. Plaintiff sought an injunction against said defendants, to restrain each of them from proceeding further in the matter of the sale of the above-described property, alleging that defendant Mummert had no interest whatever in the above-described lots, and had no such interest since the execution of the deed from the Texas Overall Company to Miller Bros.-McCrary Company aforesaid. A temporary injunction having been granted as prayed for, upon a hearing the injunction was dissolved, from which order and judgment the plaintiff appeals.

The judgment below recites, in part, as follows:

“And it further appearing to the court, after hearing the evidence and argument of counsel, that the Texas Overall Company, a corporation, has been dissolved, and at the time of its said dissolution was justly and truly indebted to defendant herein, Harry B. Mummert, which now amounts to $288.83, which has never been paid, and that said defendant recovered judgment in the county court of Tarrant county for civil cases, Tarrant county; Texas, against said Overall' Company, on which there is now due and unpaid said sum of $288.83; and it further appearing to the court that the deed purporting to have been made by said Texas Overall Company to Miller Bros.-McCrary Company, under which plaintiff herein claims, made after the dissolution of the said Texas Overall Company, was invalid and passed no title to said Miller Bros.-McCrary Company to said property described,” etc. said Texas Overall Company should be and constitute an equitable lien on the property described. From the court’s findings of fact filed, herein the following facts may be noted, to wit:

Therefore the court adjudged and decreed that the defendant Mummert’s debt against

(1) On August 2, 1911, at a meeting of the stockholders of the Texas Overall Company, a resolution was passed to dissolve said corporation, and a certificate of dissolution was prepared and signed by the proper officers and forwarded to the secretary of state and filed in the latter’s office on August 7, 1911.

(2) That at the time of said dissolution the Texas Overall Company was solvent, and paid all of its debts except the one sued upon by defendant Mummert.

(S)That the defendant Mummert sued the Texas Overall Company on a contract for $222.50, on July 28,. 1911, in the county court of Tarrant county for civil cases, and obtained a judgment against the Texas Overall Company for $245.75, with interest, on October 4, 1912.

(4) That on August 2, 1911, at a meeting of the stockholders of said Texas Overall Company and prior to the resolution, the directors of said company authorized the sale of the lots in controversy, on which was located said company’s manufacturing plant, and being all of the property owned by it, except notes and accounts, to Miller Bros.-McCrary Company, which company had not at that time been incorporated, for $16,000 .cash; and C. R. Miller, the president of said Texas Overall Company, was authorized by said resolution to execute and deliver deed to the purchaser.

(5) That on August 2, 1911, at a meeting of the organizers of Miller Bros.-McCrary Company, a resolution was passed authorizing the purchase of said property mentioned at said price of $16,000.

(6) That the application for the incorporation of Miller Bros.-McCrary Company was dated August 2, 1911, and was forwarded to the secretary of state, along with the certificate of dissolution of the Texas Overall Company, and in the same envelope, and was filed in the office of the secretary of state on August 7, 1911.

(7) That the same parties who .were stockholders in the Texas Overall Company, and at the same meeting in which they had voted to dissolve said corporation, organized the Miller Bros.-McCrary Company, and made an application for’ charter for said latter company.

(8) That the $16,000 paid by Miller Bros.-McCrary Company, or the organizers of said company, for said lots, was paid partly in cash and partly in stock in the Miller Bros.-McCrary Company, issued to some of the organizers of said company, who had been stockholders in the Texas Overall Company, and that said Miller Bros.-McCrary Company did not assume the payment of the claim of the defendant Mummert, which afterwards ripened into the judgment aforesaid. That the consideration so paid was distributed among the stockholders of the Texas Overall Company, each stockholder receiving, either in cash or in stock in the new company, the face value of his stock in the dissolved 'company,

(9) On May 8, 1912, a deed was executed to said lots to the Miller Bros.-McCrary Company, signed by Texas Overall Company, by C. It. Miller, president, and that said deed was dated back to August 3, 1911, and was not impressed with the seal of the corporation grantor.

(10) On July 7, 1912, Miller Bros.-McCrary Company, acting by its vice president, E. B. Miller, duly authorized, executed a deed to said property to the plaintiff, C. R. Miller & Bros., Manufacturers.

(11) C. R. Miller was president of each of the three corporations herein mentioned, and testified in the trial, on October 4,1912, of the case of H. B. Mummert against the Texas Overall Company.

(12) An appeal was taken from this judgment in the name of the Texas Overall Company, .which had theretofore been dissolved; the appeal bond being signed, “The Texas Overall Company, by Its Attorneys,” and by C. R. and E. B. Miller, as sureties. The judgment of the trial court was affirmed by the Court of Civil Appeals.

(13) That the plaintiff corporation, as well as Miller Bros.-McCrary Company, had notice of the debt of Mummert against the Texas Overall Company prior to the execution of the two several deeds, the one in the name of the Texas Overall Company to Miller Bros.-Mc-Crary Company, and the other from the Miller Bros.-McCrary Company to the plaintiff.

(14) The court found the facts as to the issuance of the execution and the levy on the property in controversy and the advertisement for sale thereof, in accordance with the pleadings of the plaintiff heretofore mentioned, and that no sale was ever made of said property because of the injunction issued, and that no payment had ever been made on said judgment.

(15) That the Texas Overall Company and the Miller Bros.-McCrary Company are one and the same corporation, there having been only a change in the name.

(16) That on May 2, 1914, plaintiff made a deed of conveyance of the property in controversy to one of its employes, F. W. Page, in-consideration of his note of $3,500.

(17) That the plant of the Miller Bros.-McCrary Company on the lots in controversy was destroyed by fire April, 1912, leaving said Miller Bros.-McCrary Company in assets the lots in controversy, and accounts and hills, etc., and that thereafter plaintiff company was organized and undertook to purchase said lots.

(18) The court further found as a question of fact though we do not adopt this finding, that neither Miller Bros.-McCrary Company nor plaintiff company was an innocent purchaser of said property for value, without notice of the defendant Mummert’s debt, and any lien he might have against said property, and that the transfer of said property to the plaintiff was a fraud upon the rights of the creditors of the Texas Overall Company and the Miller Bros.-McCrary Company, including the rights of Mummert.

There is no finding by the court as to when the Miller Bros.-McCrary Company was dissolved, but the statement of facts shows that it was dissolved, the date not being given, and that at the time of its dissolution the stockholders of said corporation received par value for their stock, and that said stockholders had more than enough property subject to execution to satisfy the amount of the judgment in the case of Mummert v. Texas Overall Company, and that the corporation was solvent at the time of its dissolution and paid all its debts except the Mummert claim.

Appellant has presented in its brief some 14 assignments of error, but, in the view the majority take of the case, we do not deem it necessary to take them up and discuss them seriatim.

Appellee objects to a consideration of each of said assignments because of an alleged failure to brief them in accordance with rule 81 for the Courts of Civil Appeals (142 S. W. xiii), and for failure to subjoin to each the statement required by such rule. The basis of the objection is that the statements do not contain excerpts from the statement of facts, and other portions of the record, to sustain them, but rather the conclusion of the briefer as to what such facts establish. For illustration, under the first and second assignments of error, the statement recites:

“The court found that, if the title to the property in controversy passed to appellant, it passed subject to an equitable lien in favor of the appellee Mummert. (Tr. p. 33.) * * * He also found that at the time of the dissolution of the Texas Overall Company it was solvent and had paid all of its debts except the debt of appellee. (Tr. p. 27).”

In other words, instead of quoting the evidence and findings in hsec verba, the briefer makes a shorthand rendition of the evidence shown, and the proceedings had, and the facts found, with reference to the pages of the record sustaining the statement. We are not prepared to say that, where such abbreviated statements are shown to be made in good faith, and to be based upon the actual facts testified to by witnesses, and the findings of the court, and other proceedings contained in the record, and where reference is made under each statement to that portion of the record where the basis therefor may be found, such a form of statement sliould be held to be a violation of the rule, though we do not commend such practice. In part, the rule reads as follows:

“To each of said propositions .there shall be subjoined a brief . statement,. in substance, . of such proceedings, or' part thereof, 'contained in the record, as will be necessary and sufficient to explain and support the proposition, with a reference to the .pages of the record.- This statement must be made faithfully in reference to the whole of that which is in the record having' a bearing upon said proposition, upon the professional responsibility of the counsel who makes it, and without intermixing with it arguments, reasons, conclusions, or inferences.”

Under appellee’s general objection to all of the assignments, we have not had our attention directed to any statement by appellant which is inaccurate, and which we think can be said to be violative of the rule. Hence we overrule this objection of appellee.

Appellee further objects to certain of the assignments because of an alleged multifariousness. We do not think this objection can be sustained. For instance, appellant’s third assignment reads as follows:

“The court erred in paragraph 3 of his conclusions of law, wherein he found that the defendant iMJummert had an equitable lien upon the property in controversy to secure the payment of the amount due him on said deed, because: (a) 'Said finding of law is'not based upon sufficient findings of fact to sustain it. (b) Because there are no pleadings to support such a conclusion of law. (c) Because such conclusion of law' is not sustained by any evidence in the record,” etc.

The reasons given for the assignment of error do not constitute any part of the”assignment. First Nat. Bank v. Fuller et al., 191 S. W. 830, by this court, and the cases there cited* including Land Co. v. McClelland, 86 Tex. 179, 23 S. W. 576, 1100, 22 L. R. A. 105.

Since the court found, and the evidence sustains such findings that in the dissolution of the Texas Overall Company and the incorporation of the Miller Bros.-McCrary Company, there was merely a change in the name of the corporation, and that the two companies were in fact one and the same corporation, we need not take the time to discuss the question of whether the deed executed in the name of the Texas Overall Company, by its president, C. R. Miller, subsequent to- the dissolution of said Overall Company, and without the impress of the seal of the corporation, would'have conveyed title, had the grantee been an independent corporation. For an authorized change in the name of a corporation has no more effect upon its identity as a corporation than a change in the name of a natural person has upon his identity. It would not affect the rights of the corporation, nor lessen nor add to its obligations. 7 R. C. L. p. 129, § 99. and cases there cited. Hence we are limited in our inquiry upon this point to the issue of whether or not the deed from the Miller Bros.-Mc-Crary Company to C. R. Miller & Bro., Manufacturers, conveyed title to the property in controversy free of any lien asserted by Harry B. Mummert.

For all that appears of record at the time said deed was executed by Miller Bros.-McCrary < Company, such corporation was solvent, with, assets sufficient to pay its stockholders and creditors in full. As hereinabove stated, it does not appear when this corporation was dissolved, but evidently subsequent to the execution of this deed. The majority see no reason why it was not authorized to convey good title to the property in controversy, relieved of any equitable lien claimed by defendant Mummert 7 R. O. U. p. 573, § 561, says:

“Of course, a corporation holds its property subject to the payment of the corporate debts, and when a corporation sells or transfers its entire property to a purchaser, knowing the fact, the latter is chargeable with knowledge that the property is subject to the corporate debts, and that equity will, in proper cases, allow the corporate creditors to follow the property into the hands of the purchaser for satisfaction of their claims. This is frequently done when a corporation sells its property to another, thereby forming a new corporation, composed mostly, if not wholly, of the same persons. The transaction is fraudulent and void as to the creditors of the old corporation not assenting thereto, and persons who hold stock in the new corporation, solely in consideration of their .claims as creditors or stockholders of the old one, are chargeable with notice of the fraud, and are not innocent purchasers as against creditors of the old corporation who did not assent to the change. The latter may follow the specific property of the old corporation, as in other cases of transfers fraudulent as to creditors. Still a* purchaser from a corporation is not bound to follow the price in to the hands of the seller, and see to the just and proper! distribution of it among the latter’s stockholders .and creditors. In the absence of fraudulent connivance or collusion to wrong the stockholders or creditors, the purchaser discharges his obligation by paying the price to the competent ■officers of the selling corporation, who’ are the agents of the stockholders, and to whom thé latter must look for the protection of their rights. * * * The right of the creditor to Impeach the transaction depends upon its fraudulent character. The mere fact that the corporation, in disposing of its property, dealt with persons who at the same time were charged with the duty of representing its interests, does not, by itself, render the transaction fraudulent. The mere fact that a corporation, at the time of conveying its property, failed to provide for the payment of a single contested claim, does not raise a presumption that the sale was made to defraud creditors, where the circumstances tend to show that there was no actual fraud.”
“The purchase by one corporation of the property of another is not different in law from similar contract between individuals, except perhaps in the fact that legislative authority may he required in the one case and not in the other. In neither case is the vendee liable for the torts or contractual obligations of the vendor, unless such liability was voluntarily assumed ■by the former.” 7 R. C. L. p. 156, § 128; Railway Co. v. Newell, 73 Tex. 334, 11 S. W. 342, 15 Am. St. Rep. 788.

Therefore it may be safely said that, in the absence of fraud and collusion on the part of and between the Miller Bros.-Mc-Crary Company and C. R. Miller & Bro., Manufacturers, the conveyance of July 17, 1912, passed to the grantee title stripped of any equitable lien in favor of Mummert, and irrespective of question of notice on the part of the grantee of the claim asserted by Mummert. But the court found as a fact that the transfer of the property in controversy to plaintiff—

“was a fraud upon the rights of the creditors of said Texas Overall Company and the Miller Bros.-McCrary Company, including rights of the defendant Mummert herein.”

By its fourteenth assignment appellant assails this finding. The undisputed testimony, that of C. R. Miller, shows that appellant paid to its grantee $3,500 for the vacant lots after the destruction of the plant in April, 1912; also that the grantor corporation was solvent at the time of its dissolution, and there is no suggestion that it was insolvent at the time of the conveyance; also that the stockholders of the grantor corporation were solvent at the time of the dissolution. We have been cited by appellee to no evidence, and we find none in the record, which in the opinion of the majority establishes fraud on the part of the grantee in receiving the property, or on the part of the grantor in conveying it. It is in evidence .that C. R. Miller was the president of both corporations, that as such he had knowledge of the pendency of the Mummert suit, and testified in the case of October 4, 1912, some weeks subsequent to the transfer of the property. The court found that the officers and directors of the grantee corporation had notice of defendant Mummert’s debt and lien. C. R. Miller testified:

“I suppose the suit of Mummert against the Texas Overall Company was pending in the county court at the time of the dissolution of the Texas Overall Company. At the time of the dissolution, there was a meeting of the stockholders. I don’t suppose any of them knew of the pendency of this suit, save me, and I never thought of it. I was a stockholder in the Texas Overall Company. No arrangements were made to take icare of a judgment in this case, should one be rendered; the stockholders had plenty of money; they were able to pay it if a judgment was rendered. Nothing was said about it by me to the other directors, at that time or any other time. I don’t know whether they knew anything about the pendency of the suit; I never thought of it. * * * Over a year, probably a year and a half, after the dissolution of this company, the case was tried in the county court. I was present at the trial and testified. * * * The reason it did not occur to me to say anything about the pendency of this suit at the time of the final meeting of the stockholders of the Texas Overall Company was I never gave it any thought, because the stockholders were financially responsible, and if it owed any debts they were certainly collectible. I had no idea they would get a judgment.. * * * I suppose it was the duty of the attorneys to set up in that case, when it was tried, that the Texas Overall Company had been dissolved. I didn’t see they had anything to do with it. G. H. and W. E. Con-nell and myself were certainly responsible.”

I. N. McCrary testified in part:

“As I remember, C. R. Miller verbally agreed that, all debts accrued by the Texas Overall Company, with the exceptions of the notes due banks and foreign accounts, would be settled without any of the new members becoming liable. This was at the time of the dissolution of the Texas Overall Company and the organization of the Miller Bros.-McCrary Company. At that time, as I remember, there was something said about a suit against the Texas Overall Company; but I do not remember the names of the parties in the case, as it was at that time that C. R. Miller assumed all liabilities against the Texas Overall Company other than notes due banks and foreign accounts such as those due mills in the East for raw materials.”

The majority, at least, consisting of Chief Justice CONNER and Associate Justice DUNKLIN, are of the opinion that the fourteenth assignment should be sustained. The writer dissents from this conclusion, being of the opinion that the trial court, who heard the witnesses testify, was justified in concluding that the conveyance mentioned was in fraud of the rights of the defendant Mum-mert, and was made with a knowledge of his claim, and with the intention to deprive him, in part, at least, of the means of satisfying his debt, should he recover judgment, and that the fourteenth assignment should be overruled. But, since the majority has concluded otherwise, said assignment is sustained, and the judgment reversed.

In the opinion of the majority, the evidence having been fully developed, no useful purpose could be subserved by remanding the case for another trial. This conclusion is, in addition to what has been heretofore said, fortified, if not made conclusive, by a consideration of article 1206, Vernon’s Gayles’ Texas Civil Statutes, which, in the absence of actual fraud, provides the remedy for creditors, in the ease of a dissolved corporation. If the corporation was solvent at the time of its dissolution, and the assets were distributed among the stockholders, the majority are of the opinion that the remedy of appellee was against such stockholders.

Therefore judgment will be here rendered for appellant, perpetuating the injunction prayed for in the court below.
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