author: PLEASANTS, C. J.

text:
    J. M. FROST & SONS et al. v. CRAMER.
    (No. 7401.)
    (Court of Civil Appeals of Texas. Galveston.
    Dec. 14, 1917.
    Rehearing Denied Jan. 10, 1918.)
    1. Vendor and Purchaser &wkey;>334(6) — Deposit o-n Purchase Price — Recovery.
    Where 'a purchaser deposited $1,800- under a contract between himself and a vendor to purchase land, and the vendor, having good title to only part of the tract, made a tender of only that part and .failed to deliver a full and complete abstract of title within the time provided by the contract of sale, the purchaser, refusing to complete the contract, was entitled to a return of the deposit.
    2. Pleading <®=69 — Action to Recover Deposits — Pleading—Construction.
    Where the purchaser’s assignee, suing to recover the amount of such deposit, alleged in his petition that the purchaser had received abstracts of title within the time allowed by the contract and had specified defects in the title and had been ready and willing to tender the total consideration upon the vendor’s compliance with the contract, the petition could not be construed as an admission that within ten days after the contract of sale was executed the vendor furnished the original purchaser with an abstract of title, but would be construed as an allegation that the purchaser within the time allowed by the contract had made his written objection to defects in the title.
    3. Pleading c&wkey;36(2) — Admission Contrary to Undisputed Fact — Effect.
    In such case it would.be an unjust and unwarrantable application of the rule that a party is bound by admissions in his pleadings to hold, in the face of the undisputed evidence to the contrary, admitted without objection, that the purchaser, notwithstanding such admission, was bound to accept the title shown by the abstract of title, or forfeit his deposit.
    4. Vendor and Purchaser <&wkey;214(2) — Purchaser’s Assignment oe Contract — Validity.
    A written instrument, entitled “Assignment Contract of Sale,” whereby a purchaser assigned his rights under a recorded contract of sale duly signed and acknowledged, was, as between the purchaser and his assignee, a valid contract conveying the purchaser’s interest in the land, and admissible even though the assignee could not have enforced specific performance against the vendor.
    5. Records <&wkey;6 — Instruments Entitled to Record — “Concerning Lands.”
    Such instrument was an instrument “concerning lands,” within the purview of Rev. St. art. 6823, and, being properly acknowledged, was entitled to be recorded.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Concern.]
    6. Lost Instruments <&wkey;23(3) — Secondary Evidence — Execution and Loss op Instrument.
    In action by the assignee of a purchaser’s interest under a contract to recover the purchaser’s deposit with a third person, evidence held sufficient to show that the original assignment was lost, and to show proof of its execution, if it was not such an instrument as was entitled to be recorded.
    7. Pledges <&wkey;20 — Assignment op Contract —Right to Recover Deposit.
    Where an assignee of a purchaser’s interest under a contract for resale of the land at a profit assigned his right as security for the payment of his note before he had obtained the purchaser’s assignment of his right to recover a deposit made under the contract, the holder of the note had no claim upon the deposit.
    Appeal from District Court, Harris County; Chas. E. Ashe, Judge.
    Action by W. R. Cramer against J. M. Frost & Sons, a firm composed of J. M. Frost, J. M. Frost, Jr., and H. G. Frost, in which R. E. Brooks intervenes. Judgment for plaintiff against J. M. Frost & Sons, and in favor of plaintiff, and J. M. Frost & Sons against intervener, and defendants J. M. Frost & Sons and the intervener appeal.
    Judgment for plaintiff against defendants J. M. Frost & Sons affirmed, and judgment against intervener reversed and judgment rendered in his favor.
    Baker, Botts, Parker & Garwood, of Houston, for appellants. Gill, Jones, Tyler & Potter, of Houston, for appellee.
   PLEASANTS, C. J.

This suit was brought by appellee Cramer against J. M. Frost & Sons, a firm composed of J. M. Frost, J. M. Frost, Jr., and H. G. Frost, to recover the sum of $1,800. The petition alleges in substance that the $1,800 in controversy was deposited with said firm by A. B. Kempland under a contract between said Kempland and Chas. R. Brown, acting for himself and as representative of the estates of J. M. Brown and Mrs. R. A. Brown, deceased, for the purchase and sale of a tract of 1,200 acres or more of land on the George L. Bellows survey in Harris county; that Brown failed to comply with the terms of his said contract of sale, and by reason thereof Kempland was entitled to have said money returned to him by Frost & Sons; and that he had transferred and assigned his claim and right to said sum to plaintiff. R. E. Brooks intervened in the suit, claiming that the said Cramer had executed and de livered to the Chas. B. Moling Company a note for $1,130, drawing 8 per cent, interest from its date, January 15, 1912, the note due in 60 days, providing for an additional 10 per cent, on principal and interest should the note not be paid when due and be placed in the hands of an attorney for collection, etc., and alleging that the said Cramer, to secure said note, had executed and delivered to Paul Bauer, trustee, a written assignment of the said Cramer’s interest in the contract first above described; and further alleging that by certain transactions and assignments appellant R. E. Brooks became and is the owner of the said $1,130 note executed and delivered by the said Cramer to the said Chas. B. Moling Company and assignment given to secure same. Whereupon the said intervener prayed that he be permitted to prosecute the suit against J. M. Frost et al. for his own use and benefit, and for the use and benefit of the said W. H. Cramer, “to the end that he may be secured in the payment to him of the sum due him by said Cramer, the balance of the recovery by him herein, if any, to be applied by the court as it deems just and equitable; and he prays for such other and further relief as to which he may show himself entitled, general and special, at law or in equity, and so will he ever pray.”

Appellee, in reply to said petition of intervention, filed general demurrer, special exception, general denial, and plea of failure of consideration for the said $1,130 note.

In addition to a general demurrer and general denial, defendants’ answer contains a special denial of plaintiff’s allegations to the effect that the plaintiff and those under whom he holds have forfeited each obligation agreed by them to be performed in said earnest money contract, and stating that as a matter of fact Kempland and all those claiming under him have failed and refused and neglected to carry out the terms of the earnest money contract, and especially that Kempland had never tendered any money or notes which he was required to tender under the terms of the earnest money contract, and that said Kempland refused to carry out the terms of the said contract and forfeited same and relinquished any rights that he ever had thereunder. Defendants further alleged that the earnest money contract between the said Ohas. R. Brown, independent executor, and A. B. Kempland, is not an assignable contract under the laws of this state, and that neither Cramer nor the intervener Brooks acquired or could have acquired any interest therein or rights thereunder. .The defendants further alleged in their answer that Kempland received the abstracts of title in due time under the earnest money contract and accepted the title as entirely satisfactory; that the title was and is good; that, if it were not good, it has nevertheless been accepted and approved by the said Kempland; further, that the said Cramer has no interest in said contract and cannot be heard to complain as to the condition of the title. The defendants further pleaded the defense of limitation to plaintiff’s suit. In answer to the suit of intervener Brooks, defendants filed a general demurrer and general denial and adopted and reasserted against the intervener all of the pleas contained in their answer to plaintiff’s petition.

The suit was tried before a jury on April 10, 11, 12, and 13, 1916. At the conclusion of the evidence, the court charged the jury peremptorily as follows;

“Ton are instructed to return your verdict in this case in favor of plaintiff and against defendants J. M. Frost & Sons for the sum of $1,800, with 6 per cent, per annum thereon from September 28, 1911, to date, and in favor of plaintiff and defendants J. M. Frost & Sons against the intervener R. E. Brooks; that intervener take nothing by this suit.”

The jury returned a verdict as instructed, and judgment was rendered in accordance therewith. From this judgment defendants J. M. Frost & Sons and intervener Brooks have apipealed.

The first assignment of error presented by appellants Frost & Sons is as follows:

“The court erred in permitting the plaintiff to recover herein and in entering a judgment in favor of plaintiff for this reason: The original earnest money contract provides that the party of the first part (the J. M. Brown estate et ah) shall deliver to the party of the second part (A. B. Kempland) within ten days from August 4, 1911, an abstract of title to the property and the plaintiff admits in his pleadings that this provision was fully complied with. The contract further provides: ‘Should any defect appear in the title to the property herein sold, the party of the second part shall, within ten days from delivery to him of the abstract of title, give notice to the party of the first part in writing, specifying the defect or defects considered to exist in said title, and all defects not so specified shall be treated and considered as waived.’ The proof is that the party of the second part failed within ten days to give notice to the party of the first part in writing specifying the defect or defects considered to exist in said title, and therefore all defects, if any, were expressly waived; there being no defects in the title, the said Kempland and not the J. M. Brown estate or these defendants, breached the earnest money contract, from which it follows that the plaintiff, as assignee of Kempland, had no rights under the contract and was not entitled to recover judgment herein. This is especially true since the plaintiff has not pleaded or proved any waiver of this provision in the contract by the Brown estate or by these defendants and has not pleaded or proved any es-toppel upon the part of the Brown estate or these defendants to insist upon this provision in the contract.”

The contract for the sale of the land between Brown and Kempland was for the sale of a tract of “1,200 acres or more” out of tracts described. The undisputed evidence shows that, in the 1,200 acres contracted to he sold by Brown, R. E. Brooks owned an undivided interest of not less than 275 acres, and that he refused to make a deed to Brown or convey his interest to Kempland upon the terms stipulated in the contract between Brown and Kempland, and that Kempland refused to buy any of the land unless he could buy it all. After several conferences and every reasonable effort, on the part of Brown to acquire the Brooks title, he made a tender of the deed to Kempland of the portion of the land to which he had a good title. The following letter, which was sent to defendants Frost & Sons at the time he sent the deed to the bank to be tendered to Kempland, shows his understanding of the contract and is an admission that he could not convey title to the land he had contracted to sell:

“I have this day drawn draft on A. B. Kemp-land through Adoue & Lobit, Bankers, for the cash balance due of $4,980.00, accompanied by notes to be signed, and the deed to our undivided interest in the ‘Bellows’ land being 830 acres the deed acknowledged receipt of $1,800.00 in hand paid, which is the earnest receipt you hold in escrow, & the balance cash due of $4,-980.00 & 2 notes for $2,838, each due in 1 & 2 years respectively; we are in this deed conveying all our title in this land. We have adopted this method, drawing through the bank, at the advice of our attorneys as a means of having an undisputed record that we have made an official tender of the deed. A. B. Kempland will either have to accept the deed, pay the money & execute the notes or else retire from the transaction as we will have done all that the law requires. If he complies with the conditions of the deed, then you and I as Ind. Exr. will settle in accordance with our contract. If he does not then the sale falls thru & all bets are off. This being in full accordance with our conversation had in your attorney’s office on Blonday. I would suggest that you see Mr. Kempland the first thing in the morning and have him get busy so as to be able to close the deal before the close of banking hours.”

The undisputed evidence further shows that a full and complete abstract showing tho, condition oí the title to the property as it appeared, of record at the date of the abstract was not furnished Kempland’s attorney until after September 22, 1911, that being the date of the abstractor’s certificate to a supplemental abstract of 22 pages, and that Kempland’s objections in writing to the latter, were made on September 27, 1911. The following agreement of the parties introduced in evidence shows when the abstract was certified and delivered to Kempland’s attorney:

“It is agreed that the abstracts marked ‘A’ and ‘B’ were the abstracts furnished by the vendor to the vendee in connection with this contract; that abstracts down to the certificate dated August 9, 1911, were furnished to the vendee on August 11,1911; and that the additional supplement, certified September 22, 1911, containing the 22 pages, was furnished between September 22 and 25, 1911.”

The provisions of the contract of sale material to the questions presented on this appeal are as follows:

“Said sale and purchase is made upon and subject to the following terms and conditions, viz.: The party of the first part agrees to deliver to the party of the second part within 10 days from the date hereof an abstract of title to. said property and upon demand at any time within SO days thereafter to execute or cause to be executed and delivered to the party of the second part upon payment of the balance of cash consideration, and the execution of notes for deferred payment as above specified, a deed conveying a good title to said property, clear of all in-cumbrance except as above provided. Should any defect be found in the title herein sold the party of the second part shall, within 10 days from the delivery to him of the abstract of title, give notice to the party of the first part in writing, specifying the defect or defects considered to exist in said title and all defects not so specified shall be considered and treated as waived. The party of the first part shall have 30 days after receipt of such notice in which to remedy said defects and remove the objections to said title so specified. Now, if the party of the first part shall fail in the performance of his obligations as above stipulated within the respective time specified, or, in case of any substantial defect being found in the title proposed to be conveyed, shall fail to remedy such defect within the time above specified, then and in either of said events, the party of the second part may, at his option, either treat this agreement as canceled and on demand be entitled to a return of the cash payment already made, or proceed to enforce a conveyance of said property in accordance with this contract; if the party of the first part shall comply with his undertakings as herein set forth, and if the party of the second part shall fail to complete his purchase by paying the balance of cash payment, and executing notes for deferred payments, as above specified, within 30 days after delivery to him of the abstract of title, or, in the case of valid objection to the title, within 30 days after said objection or objections shall have been removed, or ascertained to be unfounded and notice to that effect given said party of the second part, then and in that event this contract and all rights of the party of the second part hereunder shall be at an end and the said cash payments hereby acknowledged shall be forfeited one-half to the party of the first part and one-half to J. M. Frost & Sons.”

It does not appear from the evidence nor from any pleading in the case that Brown or the Brown estate is now or has ever asserted any claim to the .$1,800 deposited by Kempland with defendants, and our conclusion upon the undisputed evidence before set out is that Kempland was entitled to have the deposit returned. Tharp v. Lee, 25 Tex. Civ. App. 439, 62 S. W. 93; Raywood Co. v. Sharp, 175 S. W. 499; Greer v. International Stock Yards, 43 Tex. Civ. App. 370, 96 S. W. 79; Sparkman v. Davenport, 160 S. W. 410.

But, as shown by the assignment above set out, the contention of appellants Ftost & Sons is that, regardless of the rights of the parties as shown by the undisputed evidence, plaintiff Oramer was not entitled to recover because he stated in his petition that:

“The plaintiff and those under whom he holds, within the time allowed in the contract aforesaid, received the abstracts to said property, had same examined, and delivered an opinion to the defendants, setting out the various defects in the title of the said property, and at all times stood ready and willing to tender and deliver the total consideration named in said contract upon a compliance by the defendants with the obligations by the terms of said contract resting upon them, and further a tender was made to the defendants and their representatives in an effort to get them to carry out their part of the contract which they have failed and refused to do.”

The argument is that as plaintiff admits that Kempland received the abstract within the time allowed by the contract, which was within ten days áfter its date, and the undisputed evidence shows that no notice in writing of objections to the title shown by the abstract was given within the next ten days, all defects in the title were waived, and Kempland could not thereafter refuse to accept the deed tendered him by Brown.

This contention and argument are unsound. In the first place, it is not a fair construction of the petition as a whole to say that the language quoted is an admission that within ten days after the contract of sale was executed Brown furnished Kemp-land with an abstract of title .to the property. The date upon which the abstract was delivered was in no way material to plaintiff’s case, but the time within which the objections were made after the abstract was furnished might have been material, and the fair construction of the pleadings is that all that was intended to be alleged was that Kempland had “within the time allowed by the contract” made his objections in writing to the title. It seems to us that it would be an unjust and unwarrantable application of the rule that a party is bound by admissions in his pleadings to hold in the face of the undisputed evidence in this case, admitted without objection by defendants, that Kempland was bound to accept the title shown by the abstract or forfeit his $1,800 deposit. Altgelt v. Elmendorf, 86 S. W. 41; Thompson-Houston Electric Co. v. Berg, 10 Tex. Civ. App. 200, 30 S. W. 454.

To prove his right to recover as the assignee of Kempland, pláintiff introduced in evidence, over the objection of defendants, the following certified copy of an' instrument on record in the office of the county clerk of Harris county:

“No. 108,331.
“J. A. Beeler et al. to W. H. Cramer.
“Assignment of Contract of Sale.
“The State of Texas, County of Harris.
“Know all men by these presents, that we, J. A. Beeler and A. B. Kempland, of Harris county, Texas, for a valuable consideration to us in hand paid by W. H. Cramer, of Harris county, Texas, hereby sell, assign, transfer, and deliver unto the said W. H. Cramer, all our right and interest in and to that certain contract of sale executed to A. B. Kempland by Chas. R. Brown, independent executor of the estate of Mrs. R. A. Brown, deceased, dated August 4, 1911, recorded in Vol. 276, pages 89 and 90, Harris County Deed Records, which is referred to for better description, and we hereby assign unto the said Cramer all interest therein with full power of enforcement.
“Witness our hands this 10th day of October, 1912. [Signed] A. B. Kempland.
“J. A. Beeler.
“The State of Texas, County of Harris.
“Before me, the undersigned notary public in and for Harris county, Texas, on this day personally appeared J. A. Beeler and A. B. Kemp-land, known to me to be 'the persons whose names are subscribed to the foregoing instrument of writing, and acknowledged to me that they executed the same for the purposes and considerations therein expressed.
“Given under my hand and seal of office at Houston, Texas, this 10th day of October, 1912.
“[Signed] E. W. Witt,
■“[Seal.] Notary Public, Harris County, Texas.
“Piled for record Oct. 11, 1912, at 1:10 o’clock p. m. Recorded Oct. 14, 1912, at 12:15 o’clock p. m. [Signed] Geo. Jones,
“Clerk County Court Harris County, Texas, “By D: L. Weed, Deputy.”

The defendants J. W. Frost & Sons and the individuals composing said partnership objected to the introduction of this certified copy in evidence, the objection being that the instrument was not such a one as could, under the law, be filed for record and proved by the introduction of a certified copy thereof, and further that the plaintiff had not proved any diligence in endeavoring to secure and introduce the original instrument, and that the copy offered in evidence was secondary evidence; further, that the instrument was irrelevant and immaterial to any issue in the case; and, further, because the earnest money contract itself is of such a personal character that no interest therein could be assigned by the said Kempland, which objections were urged by these defendants at the time the purported copy of the instrument was offered in. evidence.

In connection with this instrument, the testimony of J. A. Beeler, one of the grantors in the instrument, was introduced by plaintiff:

“I don’t know where the original of the assignments of the original contract of August 4, 1911, between the Brown, estate, represented by the Frosts, and A. B. Kempland, which assignment is signed by me and A. B. Kempland and acknowledged and recorded, is. I have made efforts to discover the original. I have looked all through my desk and everywhere I thought it might be, and I did not find it. I made efforts to secure it from A. B. Kempland. I wrote several letters to Kempland, but I could never find his address. I don’t know the present whereabouts of Mr. Kempland. I tried to secure the paper from W. H. Cramer. I asked Cramer when he was down here two or three weeks ago. I think I wrote to Cramer once before.
“I recall a transaction between Mr. Kempland and Mr. Frost, or J. M. Frost & Sons, about August, 1911, with reference to the Brown land. At that time' Mr. Kempland and I were partners in the real estate business. I was interested in said contract in that I had put up part of the earnest money. Kempland and I were partners in all transactions. I took the acknowledgment to this instrument and I was interested in the deal.”

We think the instrument was admissible. It may be true, as contended by defendants, that the contract for the conveyance of the land was a personal contract of such character as to be unassignable in the sense or to the extent that assignee of Kempland could not have enforced specific performance against Brown, and yet as between Kemp-land and his assignee it was a valid contract conveying Kempland’s interest in the lands he might acquire from Brown under the contract. It seems clear to us that it is an instrument “concerning lands,” within the purview of article 6823, Revised Statutes, and being properly acknowledged was entitled to be recorded. We think the evidence of Beeler was sufficient to show that the original instrument was lost, and was also sufficient proof of the execution of the original if it was not such an instrument as was entitled to be recorded. Shifflet v. Morelle, 68 Tex. 382, 4 S. W. 843.

What we have said disposes of the material questions presented by the appeal of defendants Frost & Sons. We have considered all of the assignments presented in the brief of said appellants, and none of them can be sustained. It follows that the judgment in favor of plaintiff against said de-fendants should be affirmed, and it has been so ordered.

The first contention of appellant Brooks under his assignment complaining of the charge of the court instructing a verdict against him in favor of plaintiff and defendants is that the evidence was sufficient to show that said appellant through transfers and assignment under plaintiff Cramer had acquired a lien upon the $1,800 in controversy to secure the payment of a note for $1,-130 executed by Cramer and now held and owned by Brooks.

The only interest Cramer had, in the contract of sale at' the time he executed the note and transferred his interest in the contract in trust to secure the payment of the note was that evidenced by a contract between Kempland and C. B. Moling, by which Kemp-land agreed to sell to Moling at a profit of $2 per acre whatever land he might acquire from Brown under the contract of sale before mentioned'. Cramer became the as-signee of this contract .between Kempland and Moling and assigned his rights thereunder to secure the payment of the note.

At the time this assignment was made, Cramer had not obtained from Kempland the assignment of Kempland’s right to recover the $1,800 in controversy.

Upon this state of facts, the trial court correctly held that Brooks had no interest in nor claim upon the $1,800 in the hands of defendants. We think, however, that the petition of intervener Brooks shows a cause of action in his favor against Cramer on the note. No special exception was urged to the sufficiency of the petition in this respect and no plea of misjoinder of causes of action. On the contrary, Cramer joined issue with intervener on the question of his liability on the note and pleaded want of consideration. No evidence was offered on this plea, and upon the evidence adduced on the trial Brooks was entitled to a judgment against Cramer for the amount due' upon the note.

The judgment against Brooks on his suit upon the note is therefore reversed, and judgment here rendered in his favor.

Affirmed in part, and in part reversed and rendered.
      ©soFor other cases see same topic ana KEY-NUMBER in all Key-Numbered Digests and Indexes

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source: Caselaw Access Project

author: JENKINS, J.

license: Public Domain

text:
    PARK v. SOUTH BEND CHILLED PLOW CO.
    (No. 5837.)
    (Court of Civil Appeals of Texas. Austin.
    Dec. 12, 1917.
    Rehearing Denied Jan. 16, 1918.)
    1. Sales <§=>313 — Security eoe Purchase Price — Vendor’s Lien.
    There is no right to a vendor’s lien to secure the purchase price of a chattel after it has been delivered.
    2. Bankruptcy <§=>172— Trustee’s Action to Cancel Chattel Mortgage — Conditions Precedent.
    Defendant’s chattel mortgage having been filed for record prior to the petition in bankruptcy, the trustee was not entitled to have the mortgage canceled without first tendering the amount due thereon, unless the mortgage was void.
    3. Bankruptcy <§=>185 — Chattel Mortgage-Rights op Trustee.
    If the chattel mortgage to the seller lor the purchase price was void as to creditors of the buyer who had fixed a lien on the property when the petition in banki'uptcy was filed, it was void as to the trustee in bankruptcy in view of Bankruptcy Act July 1, 1898, c. 541, § 47, subd. “a,” cl. 2, 30 Stat. 557, as amended by Act Cong. June 25, 1910, c. 412, § 8, 36 Stat. 840 (U. S. Comp. St. 1916, § 9631), providing that the trustee shall be vested with all rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings.
    4. Courts <®=>91(2) — Hollowing Decision op Higher Court.
    The Supreme Court having held that Rev. St. 1911, art. 3970, declaring void every mort-, gage or lien attempted to be given by the owner on stock in trade of which he continues in possession, does not apply to a lien resulting' from a conditional sale, the Court of Civil Appeals is bound by such decision.
    5. Courts <®=>91(1) — Following Decision op Higher Court — Equity*
    Although the Supreme Court might have rested its decision upon one proposition only where it went further and decided another, its decision thereon is binding on the Court of Civil Appeals.
    6. Bankruptcy <§=>140(1) — Trustee op Conditional Buyer — Title.
    Although a conditional sale contract provided that a sale by the buyer would vest title, the buyer had the legal title subject to a mortgage until such sale was made in view of Rev. St. 1911, art. 5654, declaring the reservation of title to secure purchase money to be a chattel mortgage, and such title and none other passed to the trustee in bankruptcy under Bankruptcy Act July 1, 1898, §' 70, subd. “a” (U. S. Comp. St. 1916, § 9654), providing that the trustee shall be vested with the title of the bankrupt.
    Appeal from District Court, Bell County; F. M. Spann, Judge.
    Action by M. O. H. Park, trustee in bank-rutcy, against, the South Bend Chilled Plow Company. Demurrer to petition sustained, judgment thereon, and plaintiff appeals.
    Affirmed.
    J. D. Williamson, of Waco, for appellant. D. H. Doom, of Austin, for appellee.
   Findings of Fact.

JENKINS, J.

Appellant, trustee in bank-rutcy of the estate of Skinner Mercantile Company, of Rogers, Bell county, Tex., brought suit to recover the title to certain agricultural implements, and to cancel alleged liens thereon claimed by appellee. He alleged that the Skinner Mercantile Company purchased said goods of appellee under a written contract, by the terms of which it was agreed that appellee retain title to same until they were fully paid for, and that proceeds of the sales of same should be held in trust for appellee; that it was agreed in said contract that said goods were to be daily exposed for sale, and sold by said mercantile company in their usual course of trade, and that title thereto would by such sales be vested in any purchaser who might buy the same; that said written contract was filed in the office of the county clerk of Bell county as a chattel mortgage a short time prior to the filing of the petition in bankruptcy by Skinner Mercantile Company; that said goods were unsold when such petition in bankruptcy was filed, and were in the possession of appellant as trustee for said bankrupt estate, and that title thereto is vested in him as such trustee; that by virtue of the laws of the state of Texas, the attempted reservation of title constitutes said contract a chattel mortgage, and that the same is void under the laws of this state; that by virtue of the act of Congress he, as such trustee, has all the rights in said property that could have been acquired by a creditor who had fixed a lien thereon by any judicial process; that he is the owner of said goods for the further reason that the Skinner Mercantile Company might, as of the date it was adjudged a bankrupt, have transferred said goods and passed title thereto to, the purchaser, under the terms of said contract with appellee.

The court sustained a demurrer to said petition, and from judgment thereon appellant has perfected this appeal.

Opinion.

In 1879 the Legislature of this state passed an act providing for assignments by debtors for the benefit of their creditors. The seventeenth section of that act reads as follows:

“Every mortgage, deed of trust, or other form of lien attempted to be given by the owner of any stock of goods, wares or merchandise daily exposed to sale, in parcels, in the regular course of the business of such merchandise, and contemplating a continuance of possession of said goods, and control of said business, by sale of said goods by said owner shall be deemed fraudulent and void.” Acts 16th Leg. c. 53.

This section was omitted from title 8, Assignment for Creditors, in the Revised Statutes of 1895, hut was carried forward as article 2548, title 50, relating to Frauds and Fraudulent Conveyances, and is now article 3970 of the Revised Statutes of 1911. Article 5654 of the Revised Statutes of 1911, passed in 1885, reads as follows:

“All reservation of the title to or property in chattels, as security for the purchase money thereof, shall be held to be chattel mortgages, and shall, when possession is delivered to the vendee, be void as to creditors and bona fide purchasers, unless such reservations be in writing and registered as required [by law] of chattel mortgages.”

There is no such thing, either at common law or by our statute, as a vendor’s lien to secure the purchase price of a chattel after it has been delivered to the purchaser. Lewis v. Steiner, 84 Tex. 365, 19 S. W. 516. But for article 5654, supra, the contract here under consideration would not have been a mortgage. The transaction would have amounted to a conditional sale, and no title would have passed to the Skinner Mercantile Company until the notes executed by it for the purchase money had been paid. Bank v. Tufts, 63 Tex. 115. But our statute (article 5654, supra) expressly declares such transactions to be chattel mortgages, and in all cases, so far as we know, not involving the construction of article 3979, supra, it has been so held.

In Harling v. Creech, 88 Tex. 301, 31 S. W. 357, Mr. Justice Brown, speaking for the court, said:

“The language, ‘all reservations of title to or property in chattels as a security for the purchase money thereof, shall be held to be chattel mortgages,’ is plain, and admits of no other construction. Whenever the transaction assumes that shape, the law gives it the character of a chattel mortgage.”

In Crews v. Harlan, 99 Tex. 97, 87 S. W. 656, 13 Ann. Cas. 863, Chief Justice Gaines said:

“The effect of the statute is to change the nature of the contract from that of a sale, to take effect so as to pass the title, only upon the payment of the purchase price, to a mortgage to secure the debt.”

Such being the law of this state, ap-pellee’s chattel mortgage having been filed for record prior to the filing of the petition for bankruptcy, appellant is not entitled to have appellee’s mortgage lien canceled without first tendering appellee the amount due thereon, unless said mortgage is void by virtue of article 3970, supra.

Section 47, subd. “a,” cl. 2, of the Bankruptcy Act provides that trustees in bankruptcy “as to all property in the custody, or coming into the custody of the bankrupt court, shall be decreed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings thereon.” U. S. Gomp. St. 1916, § 9031. So, if appellee’s mortgage was void as to a creditor who had fixed a lien on the property in controversy the day the petition in bankruptcy was filed, it is void as to appellant.

As an original proposition, the writer would hold that article 3970 applies to the instant case, unless it should be held not to apply for the reason that the specific articles mentioned in the contract here under consideration are not “any stock of goods, wares, or merchandise daily exposed to sale in parcels,” etc., within the meaning of said article. In view of the disposition which we make of this case, it is unnecessary for us to decide this point.

But, in Bowen v. Lansing Wagon Works, 91 Tex. 385, 43 S. W. 872, in which the facts were substantially the same as in the instant case, in so far as concerns the point now under consideration, it was held by our Supreme Court that article 3970 did not apply, for the reason that the transaction was “a reservation by the vendor and not any form of lien attempted to be given by the owner.” I do not think this proposition is sound. It is true that the parties there, as here, intended to reserve title in the seller. But, as said by Chief Justice Gaines, in the excerpt above given from Grews v. Harlan, the statute in such cases passes the title to the purchaser. Parties to a contract are conclusively presumed to have intended the legal consequence of the language deliberately used by them. The contract having passed the title to the purchaser, and it being in law a chattel mortgage given by him, it was, in my opinion, a “form of lien attempted to be given by the owner,” which, if it comes within the condemnation of article 3970, supra, is void. • However, as the decision in the Bowen Case was rendered by our Supreme Court, and has been followed by Courts of Civil Appeals in Mayfield v. Harlan, 184 S. W. 313, Hall v. Keating, 33 Tex. Civ. App. 526, 77 S. W. 1054, and in Mlansur v. Beeman, 45 S. W. 729, and by the federal court in Re Raney (D. G.) 202 Fed. 1003, and in Re Anson (D. C.) 203 Fed. 871, and has doubtless become the basis of numerous, commercial transactions, I feel constrained, to yield to its authority, and, speaking now for the court, we overrule appellant’s contention in this regard.

Appellant insists that we should not be controlled in the instant case by the decision in the Bowen Case, for the reason in that case those who had accepted under the assignment were not creditors who had fixed their liens by any judicial process. The court might have rested its decision in that' case upon that point only, but it did not do so. It decided the other point also.

We also overrule appellant’s assignment to the effect that the demurrer to his petition should have been overruled for the reason that section 70, subd. “a,” of the Bankruptcy Act provides that the trustee shall be vested with the title of the bankrupt, as of the date he was adjudged a bankrupt, to all property which prior to the filing of the petition he could have transferred.

It is true that appellee could have transferred the property in question at any time prior to his becoming a bankrupt, and the purchaser would have acquired a perfect title thereto. But he had not done so. The title which he had was the legal title subject to the mortgage which he had given. This title and none other passed to the assignee.

For the reasons stated, we affirm the judgment of the trial court herein.

Affirmed.
      ®=sFor other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: KEY, C. J.

text:
    PARK v. JOHN DEERE PLOW CO.
    (No. 5838.)
    (Court of Civil Appeals of Texas. Austin.
    Dec. 12, 1917.
    Rehearing Denied Jan. 16, 1918.)
    Appeal from District Court, Bell County; E. M. Spann, Judge.
    Suit by M. C. H. Park, trustee, against the John Deere Plow Company. Judgment for defendant, and plaintiff appeals.
    Affirmed.
    J. D. Williamson, of Waco, for appellant. Etheridge, McCormick & Bromberg, of Dallas, for appellee.
   KEY, C. J.

This is a companion case to, and involves the same questions as, M. C. H. Park, Trustee, v. South Bend Chilled Plow Co., 199 S. W. 843, decided by this court to-day, and for the reasons stated in that case, the judgment in this ease is affirmed.

Affirmed.


author: HIGGINS, J.

text:
    HASSELL et al. v. ROSE et al.
    (No. 760.)
    (Court of Civil Appeals of Texas. El Paso.
    Dec. 6, 1917.
    Rehearing Denied Jan. 3, 1918.).
    1. Appeal and Error <§=>748(2) — Assignments of Error — Sufficiency—Statute.
    Under Rev. St. 1911, art. 1612, as amended by Acts 33d Leg. c. 136 (Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1612), providing that the assignments of error shall be filed before the transcript of the record is taken from the clerk’s office, appellant was not authorized to file new or original assignments of error after the trap-script had been filed in the Court of Civil Appeals, and such assignments could not be considered and would be stricken on motion.
    2. Appeal and Error <§=3659(2), 748(2) — Assignments of Error — Certiorari.
    In such case, and where the assignments had been lost or destroyed, it was incumbent upon appellant to substitute them, as provided by Rev. St. 1911, arts. 2157-2163, inclusive, and when so substituted the transcript on appeal could be perfected by certiorari.
    3. Appeal and Error <§=>719(1) — Assignments of Error — Review—“Fundamental Error.”
    Without proper assignments presented to the Court of Civil Appeals, it can consider only “fundamental error,” which is such error as is readily seen and which lies at the base and foundation of the proceeding and which necessarily affects the judgment, or error in law apparent on the face of the record, and fundamental error does not require an examination and weighing of the evidence to determine whether the assignment is well taken.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Fundamental Error.]
    Appeal from District Court, Anderson County; Jno. S. Prince, Judge.
    Action between Mrs. Annie B. Hassell and others and Mrs. M. E. Rose and others. Judgment for the latter, and the former appeal.
    Affirmed.
    W. R. Petty, of Palestine, for appellants. N. B. Morris, of Palestine, for appellees.
   HIGGINS, J.

This appeal is prosecuted from a judgment rendered in the district court of Anderson county on June 5, 1916. The certificate of the clerk to the transcript of the record discloses that the same was delivered to appellants’ attorney on September 22, 1916. The record was filed in the Court of Civil Appeals of the First Supreme Judicial District October 11,1916. Appellants filed their brief on February 9, 1917. Thereafter, by order of the Supreme Court, the appeal was transferred) to this district and the record filed in this court February 20, 1917. The transcript contained no assignments of error. On March 12, 1917, appellants filed a motion to have the transcript returned for correction. In the motion it was set up that the transcript was defective and erroneous in that the clerk in making up the same, by mistake or oversight, left out the assignments of error filed in the district court on the 10th day of August, 1916. Thereafter, this court, on March 29, 1917, granted this motion and ordered issuance of a writ of certiorari requiring the clerk of the district court to send up to this court the assignments of error filed in said court by appellants. In response to the writ there was filed in this court on April 12, 1917, copies of two assignments. The certificate thereto shows that the same were filed in the court below on April 2,1917. Appellees, on November 20, 1917, filed a motion to strike out the assignments of error upon the ground that the same were not filed in the district court and carried forward in the transcript, nor were same filed within the time required by law, but were filed too late to be considered on appeal. In support of the motion an affidavit was filed by E. T. McCain, who was formerly district clerk of Anderson county during the year 1916. The substance of this affidavit is that, when he prepared and delivered the transcript to appellants’ attorney, no assignments of error had ever been filed, and that the omission of the same from the transcript was not due to mistake or oversight, but because the same had never been filed; that some time in February or March, 1917, appellants’ attorney called upon him to know about these assignments, and this was the first time the attorney had ever mentioned the same tq him; and that he then told the attorney that he had never filed them.

Article 1612, R. S., as amended by Acts of 33d Legislature, c. 136, General Laws Reg. Sess., provides that the assignments of error shall be filed before the transcript of the record is taken from the clerk’s office. In the condition of this record, the motion to strike out the assignments must be sustained. The certificate to the supplemental transcript sent up in response to the writ of certiorari shows that the assignments sent up in the supplemental transcript were filed April 2, 1917- — long subsequent to the time the transcript had been filed in the Court of Civil Appeals of the First District. It was too late at that date to file original assignments of er.ror. If appellants had filed proper assignments of error in the court below on August 10, 1916, these were the assignments and the only assignments which could properly be presented in this court. If those assignments had been lost or destroyed, it was incumbent upon appellants to substitute the same in the manner provided by articles 2157 to 2163, inclusive. When so substituted, the transcript on appeal could have been perfected by certiorari. There was no authority to file new or original assignments of error on April 2, 1917. For the reasons indicated, we cannot consider the assignments as presented in appellants’ brief. The motion to strike out the same must be sustained.

In the absence of proper assignments presented in this court, we can consider only “errors in law apparent on the face of the record,” or, as they are sometimes designated, “fundamental errors.” All other errors not assigned are waived. District Court Rule 101a (159 S. W. xi); Searcy v. Grant, 90 Tex. 97, 37 S. W. 320; City of Beaumont v. Masterson, 142 S. W. 984; McPhaul v. Byrd, 174 S. W. 644; Holloman, v. Black, 188 S. W. 973. There is no fundamentr 1 error presented by this record, so far as we can ascertain. In order to pass upon the merits of the assignments presented, it would be necessary for this court to examine the entire statement of facts, and it is definitely established by the decision of Judge Brown in Houston Oil Co. v. Kimball, 103 Tex. 94, 122 S. W. 533, 124 S. W. 85, that the term “fundamental error” is not one which requires an, examination and weighing of the evidence to determine whether or not the assignment is well taken. A “fundamental error” has also been defined as one readily seen, lying at the base and foundation of the proceeding and affecting the judgment necessarily. Wilson v. Johnson, 94 Tex. 272, 60 S. W. 242; Searcy v. Grant, supra; Fuqua v. Brewing Co., 90 Tex. 298, 38 S. W. 29, 750, 35 L. R. A. 241; Harris v. Petty, 66 Tex. 514, 1 S. W. 525.

If we are at liberty to examine the statement of facts in this case for the purpose of ascertaining whether or not error has been committed, it still cannot be said that the errors complained of by appellant are readily seen; so under neither of the definitions given in the cases to which we have referred can the contentions of appellant be considered as presenting fundamental error.

In thq absence of any errors properly assigned or fundamental errors appearing, it follows that the judgment must be affirmed.

Affirmed.

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


author: MOURSUND, J.

text:
    SCHOOL DIST. NO. 7 v. FRAZIER.
    (No. 5942.)
    (Court of Civil Appeals of Texas. San Antonio.
    Jan. 2, 1918.)
    1. Tbial <@=3397(4) — Findings of Fact — Evidence.
    Where it is assigned as error that the court did not make certain findings of fact, and such assignments involve facts contradictory to findings made, such assignments will be overruled where the findings made are supported by the evidence.
    2. Appeal and Error <@=>219(2) — Findings of Fact — Necessity for Request.
    Where no request is made for findings on a . certain issue, error cannot be assigned for failure to make findings on such issue.
    3. Dedication <@=339 — Estoppel — Statements and Declarations.
    An agent for sale of town-site lots is not estopped to claim ownership by purchase of a certain lot by statements that such lot was public property, where no one was induced to purchase lots thereby.
    Appeal from District Court, Refugio County ; Jno. M. Green, Judge.
    Suit by School District No. 7 against Berd T. Frazier. Judgment for defendant, and plaintiff appeals.
    Affirmed.
    E. Gordon Gibson, of Rockport, for appellant. J. Turner Vance, of Refugio, and Fowler & Fowler, of Goliad, for appellee.
   MOURSUND, J.

The district trustees of district No. 7, county of Refugio, sued Berd T. Frazier to recover an acre of land and the value of a building removed therefrom, alLeging that said land had been donated and dedicated for school purposes by Burton & Danforth, the original town-site promoters, and that Frazier purchased the land from Burton & Danforth with knowledge of such dedication. Plaintiffs also pleaded estoppel against Frazier, alleging that he had represented that such lot was public property while acting as agent for Burton & Danforth.' Frazier answered by general denial and plea of not guilty. The trial resulted in a judgment in favor of defendant.

The court’s findings of fact and conclusions of law are as follows:

“Findings of Fact.
“(1) That the plaintiffs here in open court abandoned all claim to the tract of land and building sued for, and for all damages against defendant, Berd T. Frazier, in the capacity of trustees for the public, or in any capacity save as trustees of district No. 7, Refugio county,
“(2) That both plaintiffs (said district trustees) and the defendant, Berd T. Frazier, claim title to the land and premises herein sued for, by and through Burton & Danforth, a firm then composed of E. O. Burton and A. H. Danforth, as the common source of title.
“(3) That the attorney for plaintiffs was duly and properly authorized to file and prosecute this suit.
“(4) That said Burton & Danforth did agree to execute a deed to a suitable site or tract of land to be used for school purposes to the proper parties at the proper time within the limits of said school district, no particular tract being indicated.
“(5) That in accordance with said agreement the said Burton & Danforth did tender the proper parties, to wit, the district trustees of district No. 7 of Refugio county, Tex., a deed to the tract of land herein sued for, and said deed was refused by said trustees, and by such refusal thereby declined to take and accept said tract of land and building situated thereon.
“(6) That at no time did Burton & Danforth intend to dedicate, nor did they dedicate, the tract of land and building thereon, or either of them, herein sued for, for school purposes, or any other purpose, but at all times retained the legal and equitable title thereto, and the custody, management, and control thereof, and the use thereof by the public and school trustees was by permission of said Burton & Danforth only.
“(7) That after the refusal of said trustees as aforesaid to take and accept the deed to said land and premises herein sued for said trustees selected another and different site or tract of land which they desired to use for school purposes, and, thereupon requested, the said Burton & Danforth did make, execute, and deliver to said trustees a deed to the tract of land so selected by said trustees, which deed was taken and accepted by said trustees and duly filed for record in the proper county.
“(8) That the site so selected by said trustees and to which they accepted the deed was more centrally located and was of greater value for school purposes than the tract of land and building sued for herein, and was of equal value otherwise.
“(9) That it was the will and wish of the majority of the citizens of Bayside and of said school district No. 7 that the school he located on the site so selected by said trustees.
“(10) That nothing was paid to said Burton & Danforth for the tract of land so accepted by said trustees, and that the same was accepted in accordance with the promise of the said Burton & Danforth to deed a suitable tract of land or site to said school district for school purposes.
“(11) That said Burton & Dánforth at no time agreed to execute a deed to or to dedicate two sites or tracts of land to said school district No. 7 or to Bayside Oolony, each or either of them, for school purposes or for the use of the public generally.
“(12) That it was the intention of each, the said school trustees and said Burton & Dan-forth, that the deed to the property and site so selected by said trustees was to be accepted in lieu of all claims such trustees may have had to the said tract of land and building thereon herein sued for.
“Conclusions of Law.
“(1) That the property herein sued for was never dedicated by the said Burton & Danforth for any purpose, and the legal and equitable title thereto is now in the defendant, Berd T. Frazier.
“(2) That by the acceptance of said deed to the site and tract of land so selected by the trustees of said school district No. 7, the same being so accepted in lieu of any claim such dis* trict, or said trustees, may have had to the tract of land and premises sued for, such school district and said trustees are estopped from claiming the tract of land, or building, or either, herein sued for, and judgment should be rendered for the defendant, Berd T. Frazier, and judgment is so rendered.”

The first five assignments of error attack the fourth, fifth, and sixth findings of fact. Our conclusions with reference to the findings are as follows:

The fourth finding of fact is erroneous only in so far as it states that the lot to be conveyed was to be situated in the school district. At that time the school district was not in existence. In a pamphlet advertising Bayside lots, Burton & Danforth stated:

“(A) This Bayside tract contains 2,655 acres of land, and we will subdivide it as follows: One hundred acres on the shore of Copano Bay has been set aside for a town site, and will be subdivided into 500 lots each 50x125 in size, In addition to these lots a public square or plaza, a site for a public school, and three sites for churches of different denominations will be deeded to the trustees selected by the purchasers of this land; 2,500 acres will be subdivided into 500 five-acre farms; and we believe that each of these lots and farms is worth as much as the other.”

This announcement referred to the old Bayside tract, and that alone, as testified by Burton. At the time this pamphlet was issued the site for a school had not been designated, but later on the lot in controversy was selected by Burton & Danforth, and after the school district was created they tendered a deed thereto to the trustees for such school district, but it was rejected because it contained a reversionary clause and conditions objected>to by the trustees. The evidence justified the court in finding that the only agreement made by Burton & Danforth was one to convey the lot, and that they had no intention to divest themselves of title by dedication.

The sixth finding of fact in its entirety is supported by the testimony.

While we find the facts to be different in minor respects from those found by the trial court, the tacts, as found by us, support bis first conclusion of law, which is adopted by us as correct.

The sixth and seventh assignments complain because the court did not make certain findings of fact, and the eighth assignment is to the effect that the undisputed evidence showed that Frazier had represented to intending purchasers that the lot was public property, and thereby estopped himself from setting up any claim of title thereto. By these assignments it is undertaken to add to the findings of fact of the trial court when no request for additional findings was made to the trial court. The sixth and seventh assignments may be said to involve facts which are contradictory of those actually found by the court, and might be construed as an attack on the court’s findings, above discussed. They will be overruled because we find the court’s conclusions to the contrary to be supported by the evidence.

The issue to which the eighth assignment relates was not touched upon by the trial court in his findings, and, as appellant made no request for a finding thereon, it is not in a position to assign the error attempted to be assigned. Caplen v. Cox, 42 Tex. Civ. App. 297, 92 S. W. 1048; Gladys City Oil Co. v. Right of Way Oil Co., 137 S. W. 171; Capps v. City of Longview, 122 S. W. 427; Savage v. Umphres, 62 Tex. Civ. App. 209, 131 S. W. 291. We may also add, however, that the statement in the brief fails to show that either of the two witnesses whose testimony was relied upon was induced to purchase lots by anything said by Frazier; so there is no estoppel even as to such persons.

The remaining assignments relate to the court’s second conclusion of law. As the judgment must be affirmed regardless of such conclusion, it is unnecessary to consider such assignments.

The judgment is affirmed.
      <©=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    THELANDER et ux. v. BECKER.
    (No. 5817.)
    (Court of Civil Appeals of Texas. Austin.
    Nov. 28, 1917.
    On Motion for Rehearing, Jan. 16, 1918.)
    1. Mechanics’ Liens <g=113(2) — Amount — Notice.
    A materialman’s lien against a building is limited to the amount due from the owner to the contractor when the materialman’s notice is served.
    2. Mechanics’ Liens <⅜=>115(1) — Owner’s Debt to Contractor—Payment.
    An owner’s note to a building contractor held not payment of the debt so as to preclude materialmen from thereafter acquiring liens on the owner’s property.
    3. Mechanics’ Liens <§==>113(2) — Owner’s Debt to Contractor—Notice to Material-men .
    Materialmen are charged with notice whether any debt is due the contractor from the owner when materialmen’s notices of liens are filed.
    4. Mechanics’ Liens <©=>115(2) — Owner’s Debt to Contractor—Payment.
    A building contractor’s assignment of the owner’s negotiable note as collateral security held a payment of the contract price so as to preclude materialmen from thereafter fixing liens against the owner’s property.
    Appeal from District Court, Travis County; Geo. Calhoun, Judge.
    Action by Herman Becker against Frank P. Thelander and wife and another. Judgment for plaintiff, and defendants Thelander and wife appeal.
    Affirmed in part, and in part reversed and rendered.
    Hart & Patterson, of Austin, for appellants. Fiset, McClendon & Shelley, of Austin, for appellee.
   Findings of Fact.

JENKINS, J.

(1) On March 14, 1914, appellants owned and occupied as their homestead a certain lot in Austin, Travis county, Tex.

(2) On said, date appellants entered into a written contract with Walter D. Allison, acknowledged as required by law to fix a lien on a homestead, to erect a dwelling house on said lot for the consideration of $4,600, Allison to furnish all material and perform all the labor in connection therewith.

(3) The contract recited that the sum of $4,600 to be paid for said work was evidenced by the promissory note of appellants for that amount, due three years after date, with interest at the rate of 8 per cent, per annum. The note, which was copied in full in the contract, was in the usual form of promissory notes, and was payable to Walter D. Allison, or order.

(4) The contract contained, among other things, the following:

“It is expressly agreed and understood that this note is given in payment of labor and material furnished and used in the construction of a certain two-story residence building [describing the same and the lot], and for the payment thereof a mechanic, materialman, laborer, and contractor’s lien is retained * * * and it is agreed and understood that said promissory note may be assigned, and said assignee or purchaser shall have, and be subrogated to, all of the rights and equities of the party of the first part, and to have and to hold the same, together with all the rights and appurtenances to the same belonging or in any wise incident or appertaining.”

(5) Said contract was filed in the office of the county clerk of Travis county, June 19, 1914, and was duly recorded by said clerk.

(6) Allison erected the dwelling in accordance with the plans and specifications of the contract.

(7) Allison purchased lumber from appel-lee, a lumber dealer, to the amount of $2,-347.24, and used the same in said building. Appellee has not been paid for the same or any part thereof.

(8) On May 26, 1914, Allison, being indebted to the Austin National Bank in the sum of $3,000, assigned said $4,600 note to said bank to secure said indebtedness, and $1,000 additional that day loaned him by the bank, and also to secure any amount that he might thereafter become indebted to said bank. Prior to the notice served on appellants, as hereinafter stated, Allison became indebted to said bank in the additional sum of $500.

(9) When said note was assigned to the bank it did not know that Allison had purchased lumber from appellee, nor that Allison was indebted to appellee.

(10) Prior to the notice served on appellants by appellee, and prior to the assignment of the note to the bank, appellants paid to Allison on said contract the sum of $2,963.60. No credit was entered on the note, and the bank had no knowledge of such payment when the note was assigned to it.

(11) On June 17, 1914, appellee served on appellants a notice, as required by law for fixing a lien on a homestead, that Allison was indebted to him for lumber used in the erection of said house in the sum of $2,347.24.

(12) Subsequent to the service of said notice, and prior to the filing of this suit, appellants paid to the bank the full amount of said note, principal, and interest, and the same was applied by the bank to the payment of said indebtedness of Allison to it.

(13) Appellants did not know until notice was served on them by appellee that Allison had bought lumber of appellee, nor that he was indebted to appellee.

(14) Judgment was rendered in favor of appellee against Allison for $2,347.24 and interest, and establishing a lien in favor of appellee against) appellants for $1,762.38, with legal interest from date of said judgment.

Opinion.

1. One who has a house erected does not owe a materialman for the material furnished the contractor and used in the erection of the house. Such debt is the debt of the contractor; but by serving the statutory notice on the owner, the materialman may fix a lien on the building to secure his debt to the extent of the indebtedness of the owner to the contractor when such notice was served. Such notice has the same effect as garnishment in ordinary cases. Lonergan v. Trust Co., 101 Tex. 80, 104 S. W. 1061, 106 S. W. 876, 22 L. B. A. (N. S.) 364, 130 Am. St. Rep. 803; Berry v. McAdams, 93 Tex. 431, 55 S. W. 1112.

2. If the owner owed nothing to the contractor when the notice was served, the ma-terialman acquired no lien by the service of the notice. Ricker v. Schadt, 5 Tex. Civ. App. 460, 23 S. W. 907; Brick Co. v. Stratton, 53 S. W. 703; Pall v. Nichols, 43 Tex. Civ. App. 582, 97 S. W. 145.

* 3. It follows as a corollary to the preceding statements that the owner will he protected to the extent of payments made by him prior to the service of the notice. Wilkerson v. McMurry, 167 S. W. 275; Nichols v. Dixon, 85 S. W. 1051; Riter v. Oil Co., 19 Tex. Civ. App. 516, 48 S. W. 758.

4. Appellants assert that the execution of the note was payment for the work to be done. It was not payment in the sense that it extinguished the debt due by appellants, or changed the nature of such indebtedness. The contract expressly provided that the note was secured by a mechanic’s lien. Jt was simply evidence of the indebtedness, and as long as it was held by the contractor he had a lien on the house to secure his debt, and materialmen might have fixed their liens on the house to the extent of the indebtedness of appellants to the contractor. But they could fix no lien after appellants ceased to be indebted to the contractor. So the issue here is, Did appellants cease to be indebted to Allison when he assigned the note to the bank?

5. While the Constitution and the statute give materialmen a lien for material furnished the contractor to the extent of the indebtedness of the owner to the contractor when the statutory notice is served, whether or not any such debt is then due depends upon the contract between the owner and the contractor, of which those furnishing material must take notice. Fullenwider v. Longmoor, 73 Tex. 480, 11 S. W. 500; Henley v. Wadsworth, 38 Cal. 356; Riter v. Oil Co., supra; Palls v. Nichols, 43 Tex. Civ. App. 582, 97 8. W. 145.

6. The contract in the instant case showed that appellants had executed to the contractor a negotiable promissory note. This was evidence of their indebtedness to him so long as he was the owner of said note. But the note being negotiable, it was evidence of appellants’ indebtedness to the holder of said note, if the same should be assigned in due course of trade. It is absurd to say that the appellants became indebted to the assignee of such note, and at the same time remained indebted to the payee for the sum evidenced by the note after he had assigned the same.

7. In Glass Co. v. Iron Co., 147 S. W. 620, the owner of a building had accepted an order from the contractor for the balance due on the contract. It was there held that the acceptance of the order extinguished the debt to, the contractor, and that a materialman could not thereafter fix a lien on the building. To the same effect was the holding in Beilharz v. Illingsworth, 62 Tex. Civ. App. 647, 132 S. W. 106.

Appellee seeks to distinguish these cases from the instant case, in that there the orders were given to materialmen who might have fixed their liens, but that here the bank did not furnish material or labor in the construction of the building. We do not regard this circumstance as important. Had the materialmen in those cases fixed their liens, they would not have been entitled to have received payment in full, as they did by the acceptance of orders, but only their pro rata with other materialmen or laborers who may have also fixed their liens. R. S. art. 5637. The point decided in Glass Co. v. Iron Co., supra, -was that:

“The acceptance of the order * * * had the effect of passing to the lumber company the ownership of that balance. Nothing thereafter remained in the hands of Orowdus (the owner of the building) to which the contractor might lay claim, and nothing to which subsequent liens could attach.”' 147 S. W. 623.

So in this case, the assignment of the note had the effect of passing to the bank the ownership of the entire debt evidenced by the note. Nothing thereafter remained in the hands of appellants to which the contractor might lay claim. Upon motion for rehearing the court said that efforts to establish liens against the property after acceptance of the order, and thereby making Orow-dus the personal debtor of the lumber company, “would be as ineffectual as if the debt had been discharged in cash, instead of this system of novation.”

The legal effect of an order when accepted is to discharge, pro tanto, any debt that the acceptor might owe the party giving such order. The legal effect^ of indorsing a negotiable promissory note’is to order the maker to pay the amount thereof to the assignee. It requires no acceptance on the part of the maker to give effect to such order. It is a part of his original contract to pay the debt evidenced by such note to the order of the payee.

If the issue as to whether the bank had a lien on the house should be deemed of any importance, the answer is that as assignee of said note it did have the contractor’s lien for the full amount of the indebtedness to Allison, as especially provided in the contract.

We do not think that the cases of McGuire v. Bidwell, 64 Tex. 43, and Johnson v. Improvements Go., 88 Tex. 505, 31 S. W. 503, are in point even upon the issue as to whether giving a negotiable note is payment of the debt. In those cases it was held that whether the giving of a promissory note amounts to payment depends upon the facts of the particular case. In both of the cases referred to, it clearly appeared that the notes were not given in payment of a debt, but only as a basis for credit. Had the notes in these cases become the property of a third party, .a different question would have been presented. In such case we think it would have been held that by assigning the note the payee had elected to treat the same as payment pro tanto.

In McGuire v. Bidwell, supra, the court said:

"The rule is that a negotiable promissory note of the debtor does not amount to the payment of the indebtedness for which it is given unless the circumstances show that such was the intention of the parties.”

We recognize this rule as between the maker and the payee of the note, but, applying it in all of its strictness, we think the circumstances of this case clearly show that it was the intentibn of the parties that the debt to Allison might be paid by his assignment of the note, and thereby substituting another party as the owner of such debt. We quote from said contract as follows:

“It is agreed and understood that said promissory note may be assigned, and said assignee or purchaser shall have and be subrogated to all of the rights and equities of the party of the first part” (Allison).

One of the rights of Allison was to be paid the debt evidenced by the note. This right, it was provided by the contract, he might assign, and upon doing so such right no longer belonged to him but to the assignee of the note. The rights of his creditors to fix materialmen’s liens were dependent upon his rights to collect from the owner of the house the debt evidenced by the note, in the absence of the same having been garnisheed by fixing the statutory lien.

It is true the note was assigned to the bank as collateral, but such transfer constituted the bank a purchaser for value, and the collection of the same by the bank, and the application of the proceeds to the debt of Allison, entitled the appellants to the same protection that they would have had had they paid the same to Allison. Rawles v. Perkey, 50 Tex. 316; Kauffman v. Robey, 60 Tex. 310, 48 Am. Rep. 264 ; Martin v. Bank, 102 S. W. 131.

We are of the opinion that, under the facts as herein stated, the appellants were not indebted to Allison at the time the notice was served upon them by appellee, and therefore the appellee did not acquire a lien against the property of appellants by service of such notice.

The judgment of the trial court against Allison, from which no appeal was taken, is affirmed. But the judgment against appellants establishing a lien against their property is reversed, and judgment on said issue is here rendered in behalf of appellants that appellee take nothing by his suit against them, but that they go hence without date, and recover of appellee their costs in this behalf expended.

Affirmed in part, and in part reversed and rendered.

On Motion for Rehearing.

The request of appellee that we’ supplement our finding of fact No. 3 is granted as prayed for. The motion for a rehearing is otherwise overruled.

Motion overruled.
      <©=?For other oases see same torio and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BOYCE, J.

text:
    PHILLIPS et al. v. CROW.
    (No. 1270.)
    (Court of Civil Appeals of Texas. Amarillo.
    Dec. 12, 1917.
    Rehearing Denied Jan. 16, 1918.)
    1. Animals <§=348 — 'Trespassing—Duties oe Owner.
    The common-law rule requiring restraint of cattle by tethering or inclosure is not in force in this state.
    2. Animals <⅝^55 — ¡Trespassing—Fencing— Negligence — Presumption .
    Upon a finding that an owner has failed to surround his land with a fence sufficient to exclude stock of ordinary disposition, the law conclusively presumes him guilty of negligence precluding recovery for trespass.
    Appeal from District Court, Hall County; Hon. J. A. Nabers, Judge.
    Action by A. D'. Crow against J. W. Phillips and another. Prom a judgment for plaintiff, defendants appeal.
    Reversed and remanded.
    T. T. Clark, of Memphis, and Jas. N. Browning, of Amarillo, for appellants. Elliott & Moss, of Memphis, for appellee.
   BOYCE, J.

The appellee, Crow, sued appellants, Phillips and Irby, for conversion of 29 head of stock cattle, an'd in the alternative for possession of said cattle and damages on accqunt of their wrongful taking arid detention by defendants. The defendant Irby denied that he had taken possession of said cattle with any intention of converting them, but alleged that such possession was taken for the purpose of preventing their trespassing on his premises and destroying his crops. He pleaded that plaintiff’s field adjoined this defendant’s, and that the defendant had between them a fence sufficient to protect the inclosure from entry of cattle of the usual and ordinary disposition; that plaintiff’s said cattle were of a breachy, fence-breaking nature, and that plaintiff, knowing such fact permitted them to range on his own field, knowing that they would break through the fence and destroy defendant’s crop; that said cattle did break through said fence and damaged defendant’s crop, and said defendant Irby, by a counterclaim, sought to recover damages for the value of his crop so destroyed. The defendant Phillips’ connection with the case grew out of the alleged fact that he assisted the defendant Irby in taking possession of and holding said cattle, but, as none of the assignments relate specifically to his liability, independent of the rights of the said Irby, it is not necessary to further state the pleading or evidence in relation to the issues presented as to said defendant. The plaintiff, by a supplemental petition, alleged that the 'defendant Irby was guilty of contributory negligence in that he failed to erect and maintain a fence around his field sufficient to keep out cattle of ordinary disposition.

The evidence was sufficient to require a submission to the jury of the issues as to the breachy nature of plaintiff’s cattle, his knowledge thereof, and the sufficiency pf the defendant Irby’s fence to turn cattle of .ordinary disposition. In the charge to the jury the court gave the ordinary definition of negligence, contributory negligence, and proximate cause, and submitted special issues, one of which required a finding as to whether the plaintiff, Qrow, was guilty of negligence in putting his cattle in his field adjoining that of the defendant Irby, which issue was answered in the affirmative, but the jury answered another issue to the effect that such negligence was not the proximate cause of the entry of the cattle into defendant Irby’s field. The second issue submitted was as follows:

“(2) Was defendant’s west fence such a fence as was reasonably sufficient to exclude from his field cattle of ordinary disposition as to breaking fence and which were not of a vicious or fence-breaking nature?” To which the jury answered: “We do not agree.”

The séventh issue submitted was as follows:

“(7) Was defendant Joe Irby guilty of contributory negligence as same has been defined, in either failing to erect and maintain a sufficient fence along the west line of his field, if he did, or in permitting said fence to become dilapidated and the wire slack, if he did, or in the matter of setting said fence with small posts at the distance they were apart, if he did, or in the matter of not building said fence of sufficient height to turn cattle of-’ordinary disposition, if he did?” To which the jury answered: “Yes.”

The eighth issue was as follows:

“If you answer ‘Yes’ to the last question, then say whether or not such contributory negligence, if such there was on the part of the said defendant, contributed to or caused said cattle to breach said fence as a proximate result thereof?” To which the jury answered: “Yes.”

The jury also found that plaintiff was damaged $144 on account of loss of milk from cows held by defendants, and made partial findings as to the value of the defendant Irby’s crop destroyed by said cattle. Upon this verdict the court entered judgment for the plaintiff for the recovery of said cattle and the sum of $44 damages, and that the defendant Irby take nothing by his cross-action against the plaintiff.

Appellant insists that no judgment could be entered on the verdict of the jury because of its failure to agree on an answer to the second issue above quoted, which presented a material issue as to appellant Irby’s right to recover on his counterclaim, while appellee contends that the answer of the jury to the seventh and eighth issues virtually disposes of this issue against appellant, so that an answer to the second issue becomes immaterial. We take it that the jury, in answering that the plaintiff was guilty of negligence in putting his cattle in the field adjoining defendant Irby’s, probably found that said cattle were known to the plaintiff to be breachy. There is no contention that appellant Irby’s fence was a statutory lawful fence, but tbe evidence, as we have said, is sufficient to warrant the submission of the seconS issue to the jury. The law as to appellant Irby’s rights under such' circum-' stances is well settled by decisions of the Supreme Court in the case of Clarendon Land & Investment Co. v. McClelland, 86 Tex. 179, 23 S. W. 576, 1100, 22 L. R. A. 105, and Id., 89 Tex. 483, 34 S. W. 98, 35 S. W. 474, 31 L. R. A. 669, 59 Am. St. Rep. 70, and is thus stated by Judge Brown in the report of the decision in 89 Tex. 483, 34 S. W. p. 99, 31 L. R. A. 669, 59 Am. St. Rep. 70:

“(1) That the common-law rule, which required every man to restrain his cattle either by tethering or by inclosure, is not in for.ce in this state, and that every owner of land in this state who desires to exclude therefrom cattle running at large, or in an adjoining pasture, situated as these pastures were, must throw around his own land an inclosure sufficient to exclude all animals, of the class intended to be excluded, of ordinary disposition as to breaking fences or in-elosures. (2) It is the right of every owner of domestic animals which are not known to him to be vicious, mischievous, or diseased to allow them to run at large, or to occupy his own inclosed lands when adjoining those of. another. (3) If the owners of land have around it a fence sufficient to turn cattle of all sizes and kinds, of ordinary disposition as to breaking fences, and the inclosure is entered by cattle which are known to the owners to be vicious, in the sense that they have the habit of breaking into inclosures when the same class of cattle would not ordinarily do so, the owner of such cattle would be liable for such damages thereby occasioned as would ordinarily result from such trespass.”

It will be noted, that in this statement of the law no mention is made of negligence. However, a reading of the reports of the case disclose that the act of the owner of breachy cattle known to him to be so in allowing them to run at large, as also the failure of the owner of land to surround it with a fence sufficient to exclude the class of stock of the ordinary disposition which it is desired to exclude, is characterized as negligence. The application of the term may not be strictly proper, for those decisions and a consideration of the principles upon which the conclusion announced is reached show that the question of negligence does not become one of fact, as in the ordinary case of nonstatutory negligence, but follows as a matter of law a finding of the existence of certain facts without a further finding as a matter of fact that they constitute negligence. The following authorities, as well as the announcement of the law in the case of Clarendon Land Investment Co., Ltd., v. McClelland, supra, support this conclusion. Congress & Empire Spring Co. v. Edgar, 99 U. S. 645, 25 L. Ed. 488; Cooley on Torts (3d Ed.) vol. 2, p. 696; Thompson on Negligence, vol. 1, p. 780, § 845. The law as stated by the Supreme Court, grows out of a modification to suit the conditions of the settlement of this country of the common-law rule announced by Shear-man & Redfield on the Law of Negligence, § 27, and quoted by judge Brown in the opinion in the case of Clarendon Land & Investment Co., Ltd., v. McClelland, reported in 89 Tex. 483, 35 S. W. 475, 31 L. R. A. 669, 59 Am. St. Rep. 70, as follows:

“The owner of large animals (such as horses, oxen, sheep, etc.) is under an unqualified obligation at common law to restrain them from trespassing upon lands of other persons; and he is therefore unconditionally liable as a trespasser himself for any trespass committed by his animate property. The law conclusively presumes negligence against him, without regard to the facts of the particular case. Whatever damage his animal does while trespassing is an aggravation of the trespass, for which he is also liable.”

And the law, as announced in the McClel-land Case, supra, is the result of a modification of this rule • and the application of the principle that the owner of an animal, known to him to be vicious, is liable for injury inflicted by him if he does not restrain him. Upon the establishment of such facts the law, as in the case of the trespassing animal at common law, conclusively presumes negligence, and it does not become an issue of fact. Also -if the defendant’s fence was not sufficient to prevent the entry o'f stock of ordinary disposition, he could not recover because there would be a conclusive presumption of negligence against him. So in this case, if the jury had returned an affirmative answer to the second issue, the defendant would have been entitled to dámages, assuming that the finding of negligence pn the part of appellee in turning his cattle into his own field is based on the fact that said cattle were breachy, and this fact was known to appellee. A finding on the issue was therefore material. We cannot say that the finding of contributory negligence against the defendant, in answer to the seventh issue is equivalent to a finding that defendant’s fence was not sufficient to turn cattle of ordinary disposition. The jury evidently did not understand the issues to be identical, otherwise they could not have answered one and failed to agree on an answer to the other. The court must not have so understood it either, or he would not have submitted both issues. If plaintiff knew his cattle were breachy when he turned them into his own field, he would be liable to the defendant Irby for damages on account of their breaking into Irby’s field if the said defendant’s fence around his field was sufficient to turn cattle of ordinary disposition — this qualification as to the sufficiency of the fence was stated only in connection with the last clause of the seventh issue and in connection with the height of the fence. So, that even if it were proper to submit the question of negligence in such case as one of fact, the issue is not literally correctly stated. We are of the opinion that since the jury could not agree on its answer to a material issue as to defendant’s counterclaim for damages no judgment could be properly entered on the verdict and the case must be. reversed for this reason. Garlitz v. Runnels County Nat. Bank, 152 S. W. 1151; Bargna v. Bargna, 127 S. W. 1157.

We suggest that upon another trial it would, be well in the submission of these issues to eliminate entirely any issue requiring a finding of negligence and submit only the issues of fact upon which the liability would depend, as stated in the above quotation from the case of Clarendon Land & Investment Co. v. McClelland.

The charge refused, made the basis of the first assignment of error, is a correct statement of the law, but if the case is submitted on special issues requiring a finding of fact as to such matters, it. would not be necessary to give such charge.

The other assignments present questions which are not likely to arise upon another trial, and need not be discussed.

Reversed and remanded.
      <S=s>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes