author: BROOKE, J.

text:
    PENNOCK v. TEXAS BUILDERS’ SUPPLY CO.
    (No. 165.)
    (Court of Civil Appeals of Texas. Beaumont.
    March 15, 1917.)
    1. Principal and Surety &wkey;155—Relation —Petition.
    A petition, alleging that a corporation executed its notes to plaintiff, and that before-delivery an individual defendant became a surety thereon by writing his name across the back of them, that when the notes were made the corporation owed plaintiff for goods, and that it was threatening to take measures for collection, and that the individual defendant caused the-company to execute such notes, and, on plaintiff’s refusal to accept them unless better secured, offered to and did indorse them, was sufficient to show that defendant was a surety.
    [Ed. Note.—For other cases, see Principal and Surety, Cent. Dig. § 422.]
    2. Principal and Surety <&wkey;155—Consider-ation—Petition.
    Such allegations were sufficient to show a consideration passing to defendant for his signature to the notes.
    [Ed. Note.—For other cases, see Principal and Surety, Cent. Dig. § 422.]
    3. Principal and Surety &wkey;>155—Failure to Sue Principal—Pleading.
    In such action, it was not necessary to allege that the corporation principal was insolvent at the institution of the suit, nor to allege any reason or excuse for failure to sue it at the first or second term of court after the notes matured.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. § 422.]
    4. Principal and Surety <&wkey;45 — Consideration— Sufficiency op Evidence.
    In an action on notes signed by a corporation and indorsed by defendant evidence as a surety, held to support finding that plaintiff did not accept the notes when first tendered to it, and that defendant’s signature, made thereafter to induce acceptance, was not a subsequent, separate, and entirely distinct transaction from the original execution and delivery, so as to require a new consideration.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. § 22.]
    6. Malicious Prosecution <&wkey;64(2) — Good Faith — Supeiciency op Evidence.
    In an action on the notes of a corporation, alleging the individual defendant to be a surety thereon, evidence held to support a finding that the issuance and levy of an attachment on his safe was made in good faith.
    [Ed. Note. — For other cases, see Malicious Prosecution, Cent. Dig. § 152.]
    ■6. Appeal and Error &wkey;>1033(8) — Favorable Error — Damages.
    In an action upon notes of a corporation on which the individual defendant was surety, he could not complain of a finding awarding him $20 for the levy and attachment of his safe, where such damages had no basis in the testimony, and where there was no complaint, and the matter of the absence of testimony on that issue was not properly called to the attention of the court of civil appeals.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 4060.]
    7. Damages <&wkey;9o — Actual Damages — Purpose.
    The purpose of the law in awarding actual damages is to repair the wrong done and compensate for injury inflicted, but not to impose a penalty, and any method affording the injured party more than a just and reasonable compensation is not the correct measure of damages, whether the injury be the result of a willful wrong or an honest mistake.
    [Ed. Note. — For other eases, see Damages, Cent. Dig. §§ 222-229.]
    8. Damages <&wkey;91(2) — Exemplary Damages.
    Where an act has been done in good faith although it may result in serious injury to the defendant, there can be no recovery of exemplary damages.
    [Ed. Note. — For other cases, see Damages, Cent. Dig. § 199.]
    9. Appeal and Error <&wkey;1151(l) — Determination of Cause — Interest—Calculation.
    In an action on notes brought against the surety where - the court found that plaintiff would be entitled to recover the face amount of the notes, including interest and attorneys’ fees less a credit, or the aggregate sum of $229.-04, with interest at 8 per cent, from the date of the judgment, an unintentional error in the calculation of interest would be corrected on appeal.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4499-4505.]
    Appeal from Jefferson County Court, at Law; D. P. Wheat, Judge.
    Action by the Texas Builders’ Supply Company against O. H. Pennock, Junior, with writ of attachment, in which defendant brought a cross-action. Judgment for plaintiff with allowance on cross-action, and defendant appeals.
    Affirmed.
    John W. Mackey, of Beaumont, for appellant. M. M. Mothner, of Beaumont, for ap-pellee.
   BROOKE, J.

Appellee, Texas Builders’ Supply Company, on March 11, 1915, sued appellant, and for cause of • action alleged that Pennock Improvement Company, a corporation, executed two notes to appellee, due March IS and March 10, 1914, respectively, and upon which appellant, O. H. Pennock, was a surety; that Pennock Improvement Company was not made a party, it having been adjudged to be a bankrupt before the institution of this suit. The suit was tried before the court without a jury, and resulted in a judgment against appellant for $229.04. On the same day of the institution of this suit, appellee caused a writ .of attachment to be sued out and levied upon an iron safe owned by appellant and used by him in the conduct of real estate and insurance business. Upon a trial of the whole case, the court found that the safe was exempt property; that the levy of the writ of attachment thereon was wrongful; and gave judgment against appellee and sureties upon appellant’s cross-action for actual damages in the sum of $20, with costs of the attachment proceeding. The appellant, in due time, perfected his appeal to this court. Counsel on either side could not agree upon a statement of facts. Therefore separate statements of fact were filed by each, and the court, as required by law, filed its statement of facts on May 20, 1916, and the same became a part of the record in this cause. Upon request, the court filed its findings of fact and conclusions of law, as follows:

“Findings of Fact.
“First. I find that on the 5th day of August, A. D. 1913, the Pennock Improvement Company, a corporation, was indebted to the plaintiff, Texas Builders’ Supply Company, in the sum of $237.10, for certain building materials sold and delivered to it theretofore at the special instance and request of the said defendant, O. H. Pennock, Jr., to which said O. IT. Pennock, Jr., the said Texas Builders’ Supply Company looked to, and it was so understood and agreed by the said Texas Builders’ Supply Company, and the said O. H. Pennock, Jr., jointly with said Pennock Improvement Company, for payment thereof, and chai’ged the said Pennock improvement Company therewith wholly as an accommodation to the said O. I-I. Pennock, Jr., the said O. H. Pennock, Jr., being advised by the said plaintiff, and its agent, T. E. Danziger, that the Texas Builders’ Supply Company did not know that Pennock Improvement Company, meaning that no credit could be extended to it, but that such account would be charged to the said Pennock Improvement Company, solely as an accommodation to the said O. H. Pennock, Jr., but that it was understood that the said O. H. Pennock, Jr., should be jointly responsible with such Pen-nock Improvement Company for the payment of such account; that the said O. H. Pennock, Jr., was at such time during the various times that the items comprising such account were purchased — the secretary and treasurer of the Pen-nock Improvement Company, the said T. E. Danziger with whom all dealings were had by the said O. H. Pennock, Jr., and the Pennock Improvement Company with reference to the matters in controversy here was and is the secretary and treasurer of the said Texas Builders’ Supply Company, plaintiff.
“Second. I find that on the 18th day of September, A. D. 1913, the Pennock Improvement Company was without sufficient available capital and credit to liquidate the account aforesaid, at which time said account was long past due and unpaid, and at such time and prior thereto the said. Texas Builders’ Supply Company by and through its said T. E. Danziger was pressing the said O. H. Pennock, Jr., and the Pennock Improvement Company, for such payment and liquidation of such account, and was threatening to institute suit and take vigorous measures towards bringing about such liquidation and payment of such account, and fully intended so to do, and would have done so, but for the action of the said O. H. Pennock, Jr., as hereinafter indicated.
“Third. I find that on the said 6th day of August, A. D. 1913, plaintiff, Texas Builders’ Supply Company, by and through its said T. E. Danziger, directed to the said O. II. Pennock, Jr., the following letter: ‘Herewith statement of Pennock Improvement Company, showing amount due us of $241.70. As you are aware, the above has been carried on our books from month to month for a long period and without interest and we have been satisfied to accommodate you all possible, however, we find that now we need these funds and would thank you to let us have either your check or a short time note by return mail if possible and oblige. Yours truly, Texas Builders’ Supply Co., [Signed] T. E. Danziger, Secy.’
“I find that the account mentioned in said letter was the one for which the notes in controversy were given, and that the said O. Hi Pennock, Jr., was being requested therein to close such account with either his personal check, or his personal short time note, that it was not intended, and that the said O. H. Pen-nock did not so understand, that the check of the Pennock Improvement Company, nor a note of such Pennock Improvement, was being requested.
“Eourth. I find that all the matters and things relative to the account and indebtedness above mentioned were transacted by and between the said O. H. Pennock, Jr., acting for himself, and the said Pennock Improvement Company, and the said T. E. Danziger, acting for the Texas Builders’ Supply Company, and that the said account was charged to the Pennock Improvement Company as an accommodation to the said O. H. Pennock, Jr., but that the Texas Builders’ Supply Company looked to the said O. H. Pennock, Jr., and the Pennock Improvement Company, jointly and severally, for payment thereof,-and that such was the understanding by and between said Texas Builders’ Supply Company and the said Pennock Improvement Company and the said O. H. Pennock, Jr.
“Fifth. I find that during the months of August and September-, A. D. 1913, the said Texas Builders’ Supply Company, by and through its said T. E. Danziger, was pressing, insisting, and calling upon the said O. II. Pennock, Jr., for settlement and liquidation of said account, and demanding of the said Ó. II. Pen-nock, Jr., payment thereof.
“Sixth. I find that on the 18th day of September, A. D. 1913, the said O. H. Pennock, Jr., in response to the -pressure and urgent requests of the said Texas Builders’ Supply Company, by and through its said T. E. Danziger, made and executed, for and in behalf of the Pennock Improvement Company, two certain promissory notes of the following tenor, reading, and effect:
“ ‘$137.10. Sept. 18, 1913. Six months after-date for value received-- promise to pay to the order of Texas Builders’ Supply Company, one hundred thirty-seven & 10/100 dollars, at Beaumont, Texas, with interest after date at the rate of eight per cent, per annum, and if not paid at maturity and collected by an attorney or by legal proceedings an additional sum of ten per cent, on the amount of this note as attorney’s fees. The Pennock Improvement Co., by O. H. Pennock, Jr., Secy. & Treas. No. -. Due -.’
“ ‘$100. Dec. 20, 1913. Ninety days after date for value received, we promise to pay to the order of Texas Builders’ Supply Company one hundred & no/10O dollars, at Beaumont, Texas, with interest after date at the rate of eight per cent, per annum and if not paid at maturity and collected by an attorney or by legal proceedings, an additional sum of ten per cent, on the amount of this note as attorney’s fees. The Pennock Improvement Company, by O. H. Pen-nock, Jr., Secy. & Treas. No. 34. Due-.’
“I find that said notes though dated on the 18th day of September, A. D. 1913, and the 20th day of December, A. D. 1913, respectively, were both made and executed on the 18th day of September, A. D. 1913.
“Seventh. I find that on the 18th day of September, A. D. 1913, the said O. H. Pennock, Jr., delivered in person at the office of the Texas Builders’ Supply Company, at Beaumont, Tex., the said notes above mentioned, unto the hands of one Hr. De Young, then president of said Texas Builders’ Supply Company, who at such time notified and advised said O. II. Pennock, Jr., that T. E. Danziger was out of the office; that he, the said De Young would hand such notes to the said T. E. Danziger for attention upon his return;- that the said T. E. Danziger returned to the office of the said Texas Builders’ Supply Company and was immediately notified by the said De Young of said notes, whereupon the said Danziger, after examining same, expressed his dissatisfaction therewith and then and there telephoned the said O. H. Pennock, and in the course of said conversation advised said Pennock that such notes were unsatisfactory, not of the kind contemplated, and could not be accepted. I find that said De Young, in receiving said notes from the hands of said Pennock, did not intend same to constitute an acceptance thereof, in satisfaction of the above-mentioned indebtedness, and that the said O. 1-1. Pennock, Jr., understood that the reception of said notes on the part of said De Young was not such acceptance, but that such acceptance was dependent upon the future action of the then absent T. E. Danziger.
“Eighth. That on the following day and pursuant to the aforementioned ’phone conversation, said T. E. Danziger called upon the said O. H. Pennock, Jr., at the office of the said Pennock Improvement Company, and returned said notes to the said O. II. Pennock, Jr., then and there again advising the said O. II. Pen-nock, Jr., that said notes were unsatisfactory and would not be accepted, and further suggested that if the said O. H. Pennock, Jr., would indorse said notes as surety, that they would then be acceptable and satisfactory; that the said O. II. Pennock, Jr., then indorsed his name on the back of said notes, and retendered same to the said Danziger, who accepted same in satisfaction and settlement of the aforementioned account.
“Ninth. I find that said T. E. Danziger, kept all books and had exclusive charge of all financial matters of and pertaining to the business of the said Texas Builders’ Supply Company, and in particular to the matters involved in this suit, a fact well known and understood by the said O. H. Pennock, Jr.
“Tenth. I find that said Pennock Improvement Company was insolvent and adjudicated bankrupt during the month of February, 1915.
“Eleventh. I find that the said O. H. Pennock, Jr., failed to instruct in writing the said Texas Builders’ Supply Company to institute suit, or take measures to enforce the collection of said notes and failed so to do during the period of solvency of said Pennock Improvement Company and at the maturity of said notes, either or both.
“Twelfth. I find that on the 11th day of March, A. D. 1915, the Texas Builders’ Supply Company instituted this suit and caused a writ of attachment to be issued out of this court and levied upon one Diebold safe, same being the office safe of the said O. H. Pennock, Jr., with the name of the said O. H. Pennock, Jr., thereon, which said safe was, however, not taken from, but left in the possession of the said O. H. Pennock, Jr.; it being the understanding by and between O. H. Pennock, Jr., and the officer making such levy, that the said O. H. Pennock, Jr., would safely and securely keep same subject to the further orders of this court.
“Thirteenth. I find that at the time such safe was levied upon, and left in the possession of said O. H. Pennock, Jr., the said Pennock was engaged in the insurance and real estate business at Beaumont, Tex., and that it was being used by him for the purpose of keeping and storing papers and valuables connected with his said business and occupation and trade.
“Fourteenth. I find that the said O. H. Pen-nock, Jr., after the safe was levied upon, removed the contents thereof and discontinued the use of same for a period of ten days.
“Fifteenth. I find that the reasonable value of the use of said safe during such period of ten days to aggregate the sum of twenty & no/100 dollars ($20.00).
“Sixteenth. I find: That on the 29th day of February, 1915, the said O. H. Pennock, Jr., purchased a metal fireproof safe, commodious and specially arranged on the inside to accommodate his business and at the time of such purchase contemplated selling or disposing of the safe levied upon as aforesaid, and did on the 3d day of March, 1915, cause to be inserted in the Beaumont Enterprise, a newspaper published at Beaumont, Tex., the following advertisement, wherein said safe was by him offered for sale, to wit: ‘For sale — At a bargain; one fireproof Diebold safe; 3x2y2 outside measurement; §14 feet high; double door. O. H. Pennock, 550 Keith Bldg. 3-3-tfc.’ That said advertisement was run in said newspaper up to and including the 12th day of March, 1915, for which the said O. H. Pennock, Jr., paid the Beaumont Enterprise the sum of one & ?5/ioo ($1.75) dollars.
“Seventeenth. I find that the said O. H. Pen-nock, Jr., concluded to withdraw said safe from the market and from sale, about the 14th day of March, 1915.
“Eighteenth. I find that the said Texas Builders’ Supply Company was not actuated by malice in causing such attachment to be levied, and that the said O. H. Pennock, Jr., suffered but ten days’ inconvenience and no embarrassment or humiliation.
“Nineteenth. I find that on the day prior to the levy of such execution, and in response to such advertisement aforesaid, said Texas Builders' Supply Company, by and through its agent, one William Ferringer, called at the office of the said O. H. Pennock, Jr., and inquired of and from iSug Du Perier, the agent and employé of .the said O. H. Pennock, Jr., then in charge of the office and business of the said O. H. Pen-nock, Jr., and in particular charge of the safe and with full and complete authority to make sale of the safe levied upon herein, whether or not said safe was for sale, the amount of money asked therefor, whether or not title could be delivered free of incumbrances, whose property it was, and the reasons for selling same, to which the said Du Perier replied that the safe levied upon was the one being offered for sale; that the price was $75; that the title free from incumbrances would be then delivered; that the reasons for selling same was that the said O. H. Pennock, Jr., had recently purchased another safe, which said other safe was then pointed out to the said Ferringer; and that the said O. H. Pennock, Jr., had and would have no further use for the safe levied upon. I further find that R. M. Mothner and T. E. Danziger are sureties on the attachment bond of plaintiff.
“Conclusions of Law.
“First. I conclude that the notes involved in this controversy were not binding upon either parties until accepted by the Texas Builders’ Supply Company, and that the transaction was executory and incomplete until such acceptance, and that delivery of same was not made in the sense of completing an executed and binding contract until such notes were accepted by the said Texas Builders’ Supply Company.
“Second. I conclude that said notes were delivered to and accepted by the Texas Builders’ Supply Company when placed in the hands of T. E. Danziger by O. H. Pennock, Jr., and after the name of the said O. H. Pennock, Jr., had been duly indorsed thereon.
“Third. I conclude that the effect of such in-dorsement by the said O. H. Pennock, Jr., bound him as surety on such notes, and that the intention of all the parties concerned at such time was that he be so bound.
“Fourth. I conclude that there was a good, valuable, and sufficient consideration, passing to the said O. H. Pennock, Jr., for his indorsement on said notes and to bind him thereon as surety.
“Fifth. I conclude that the said O. H. Pen-nock, Jr.’s, responsibility being that of surety and not indorser, it was unnecessary to allege or prove that the said Pennock Improvement Company was insolvent at the maturity of said notes, either or both.
“Sixth. I conclude that it was unnecessary for the Texas Builders’ Supply Company to institute suit on said notes or either of same, at the first or second term of this court, after maturity, against the said O. H. Pennock, Jr., because his responsibility on such notes was that of surety.
“Seventh. I conclude that it was the duty of O. H. Pennock, Jr., to notify in writing in full and explicit terms the Texas Builders’ Supply Company to sue the said Pennock Improvement Company during its period of solvency, and a failure of the Texas Builders’ Supply Company so to do, in the absence of such written notice, did not release the said O. H. Pennock from liability on said notes.
“Eighth. I conclude, in any event, that the plaintiff, Texas; Builders’ Supply Company, would be entitled to recover of and from the said defendant, O. I-I. Pennock, Jr., the face amount of said notes, including interest and attorney’s fee, less the credit of $50, or the aggregate sum of $229.04, with interest thereon at the rate of 8 per cent, per annum from the date of judgment herein and its costs in such behalf expended.
“Ninth. I conclude that the office safe of the said O. H. Pennock, Jr., levied upon in this suit, was exempt from attachment at the time of such levy, and further that such levy was void and ineffective because the officer making same only took constructive possession of such safe; actual possession thereof not having been taken by such officer.
“Tenth. I conclude that such attachment was issued and caused to be levied by the plaintiff, Texas Builders’ Supply Company, in good faith, and that the defendant, O. H. Pennock, though entitled to recover on his cross-action from the plaintiff, Texas Builders’ Supply Company, and sureties on attachment bond, to wit, R. M. Mothner and T. E. Danziger in the sum of $20, and costs in such behalf incurred for such void levy of attachment; that he is not entitled to exemplary damages, the levy having been made in faith, and upon the belief by the Texas Builders’ Supply Company, its agents and employés, that such safe had been abandoned for the purposes for which the law exempts it and because plaintiff was not actuated by malice in making such levy. D. P. Wheat,
“Judge of the County Court of Jefferson County, at Law.”

We are confronted at the outset with, a motion that appellant’s assignments of error be not considered, for the following reasons: The first and second assignments are not followed by a proper statement; the third assignment refers to the last foregoing statement, and there is no foregoing statement; that the fourth assignment has no proposition or statement; that the fifth assignment has no statement; that the sixth has under it, while called a statement, an argument; that the seventh assignment has no statement; that the eighth assignment has no statement; that the ninth assignment has neither proposition nor statement; that the tenth assignment has no statement; neither has the eleventh, the twelfth, the thirteenth, nor the fourteenth assignments of error. In other words, that these assignments should not he considered, because not briefed in accordance with the rules.

In the case of Ford Motor Car Co. v. Freeman et al., 168 S. W. 81, the court uses this language:

“The consideration of this assignment is objected to by appellees on the ground that it is not briefed in accordance with the rules. This objection is well taken. A proposition without a sufficient statement cannot, under the rules and laws of this state, be considered; and a statement which fails to show that objection was made to a charge given and complained of by appeal, and particularly one which fails to refer to a bill of exception, where a bill is required to preserve the point, giving the number of the bill or page where it can be found in the record, is insufficient. (Citing Ferguson v. Fain, 164 S. W. 1040; Stephenson v. Luttrell, 160 S. W. 666.)”

Continuing, the court says:

“ ‘No reference is made to a bill of exceptions in the twenty-third assignment of error, nor in the propositions and statement thereunder; and this court assumed, as it had a right to do, that there was no bill of exceptions. It is under no obligation to search through the statement of facts or other parts of the record to find bills of exception.’ As in the cases cited, no reference is made to a bill of exception in the assignment under consideration, nor in the proposition and statement thereunder. The assignment is not, therefore, entitled to consideration.”

The brief in the instant case is far from being free from the objections urged. In fact, we shall be compelled hereafter to require that cases be briefed in accordance with the rules. However, we shall not refuse in this case to consider the assignments.

The first and second assignments are as follows:

(a) “The court erred in overruling defendant's general demurrer to the original and supplemental petitions of plaintiff, for the reasons that: (a) Said petitions do not state such facts as would make the defendant in law a surety on the notes sued on; (b) said petitions do not show that there was any consideration passing to defendant for his signature on said notes; (c) that said petitions wholly fail to allege that the Pennock Improvement Company, maker of said notes, was insolvent at the time of the maturity thereof; and (d) that said petitions fail to allege any reason or excuse for the failure to sue defendant to the first or second term of court after said notesi matured.”
(b) “The court erred in paragraph one of its findings of fact, and the conclusion of law and judgment based thereon, to the effect that the defendant was originally or became jointly bound or liable for the payment of the account of the Pennock Improvement Company, and that ‘it was understood that the said O. H. Pennock, Jr., should be jointly liable for the payment of such account,’ because such finding and conclusion are not supported by the pleadings or the evidence and are contrary to the la.w.”

We have carefully considered these assignments, and we are of opinion that the petitions of appellee do state such facts as would make the appellant a surety on the notes sued on. The allegations of the original petition show:

“That on the 18th day of September, A. D. 1913, the Pennock Improvement Company, a corporation, * * * made, executed, and delivered to plaintiff its certain promissory note for the sum of $137.10.”

And the same averment is made concerning the note for $100, and it further alleged:

“That on the day and date of said note aforesaid, and prior to the delivery thereof to plaintiff, the defendant, O. H. Pennock, Jr., became a surety thereon by writing his name across the back of same, and did then and there by such indorsement bind and obligate himself to pay such note according to its face, tenor, reading, and effect.”

And it is further alleged:

“That at the time the said notes mentioned in plaintiff’s said original petition were made, executed, and delivered to the said plaintiff, and at the time the said O. H. Pennock, Jr., wrote his name across the back of same, thereby becoming a surety, that the defendant, Pen-nock Improvement Company, owed the plaintiff an account for goods, wares, and merchandise* furnished it, aggregating the amount of both of said notes, which said account was then and there long past due and unpaid, am] said plaintiff was at such time, to wit, the days and dates upon which the said notes were made, executed, and delivered and the said O. H. Pen-nock placed his name across the back of same, pressing and insisting upon immediate settlement and was threatening to take such measures as would be calculated to bring about an adjustment, satisfaction, and liquidation of said account, and in order that the situation be relieved, the said O. IT. Pennock offered and did pursuant thereto cause the said defendant, Pennock Improvement Company, to make and execute the notes as aforesaid. That the tender of such notes was by plaintiff refused until same were 'better secured, whereupon defendant, O. H. Pennock, Jr., then offered to and did place Ms name on the backs of each of said notes, and plaintiff then accepted same.”

In other words, the allegations in the petition are sufficient to show that appellant was a surety, that there was a consideration passing to appellant for his signature, and we do not believe, while it was fully shown that the Pennock Improvement Company was insolvent at the institution of the suit, that the same was necessary to he alleged, neither are we of the opinion that it was necessary to allege any reason or excuse for failure to sue the appellant at the first or second term of court after the notes matured. The findings of the court show, and there is evidence to support the said findings, that it was understood between the parties that the appellant was t'o be jointly liable for the payment of the account. In fact, the testimony leads to the conclusion that credit was given alone and reliance was had upon the promise of appellant. The assignments are therefore overruled.

The third and fourth assignments of error are as follows:

(a) “The court erred in Ms findings of fact numbered 2, 3, 4 and 5, and the conclusions of law and judgment based thereon, which was in effect that the forbearance of suit on an account due plaintiff by the Pennock Improvement Company was a valuable or sufficient consideration for the notes executed by the' defendant.”
(b) “The court erred in paragraph 4 of his findings of fact and the conclusion of law based thereon, to the effect that, in his transactions with plaintiff, the defendant ‘was acting for himself’ individually, because such finding and conclusion are not supported by the evidence and are contrary to the law.”

We have examined the record, and cannot agree with the contentions of appellant. These assignments are therefore overruled.

The fifth and sixth assignments of error are as follows:

(a) “The court erred in paragraph 7 of his findings of fact, to the effect that the delivery of said notesi by tho Pennock Improvement Company to Geo. C. De Young,, president of the plaintiff company, with the information that same were delivered in settlement of the account of the Pennock Improvement .Company, and the retaining of said notes without protest or objection by the said De Young, president, did not constitute a completed transaction; and the court further erred in refusing to find that the delivery of said notes to plaintiff’s president was a delivery" to plaintiff, and that plaintiff was estopped to deny that it was bound by the acts of its president.”
(b) “The court further erred in paragraph 7 of his findings of fact, in refusing to find therein that plaintiff’s request for defendant’s personal signature on said notes, and the defendant’s signing of same, was a subsequent separate and entirely distinct transaction from the execution and delivery of said notes by the Pen-nock Improvement Company.”

The testimony shows that on August 6, 1913, appellee made demand upon the defendant for the payment of the notes, and offered to accept the appellant’s short time note in settlement thereof. On September 18, 1913, in response to letters and other pressure, appellant was informed that no credit had been given, the Pennock Improvement Company, but the credit had been extended to Pennock, individually, and that the notes of Pennock Improvement Company would not be accepted, and that thereupon the appellant placed his name upon the said notes, with the distinct understanding that he was a surety upon the same for their payment. We see no merit in the above assignments, and they are therefore overruled.

Appellant’s seventh assignment complains of the finding of the court that defendant was liable as a surety or copromisor on the notes, “because the pleadings of the plaintiff, and the uncontradicted evidence, show that the debt for which they were given was a pre-existing debt due by a corporation of which defendant was merely a shareholder, that there was no prior agreement that defendant was to become surety for said debt, and that there was no consideration paid him for his signature to said notes or either of them; wherefore at the time of signing of said notes by defendant, the consideration therefor had been fully executed, and the finding and judgment of the court were contrary to the law.”

The eighth assignment is:

“That the court erred in Ms finding and judgment in holding the defendant to be liable as a surety on said notes, because it having been shown by the' pleadings of plaintiff and defendant, and by the testimony, that the notes sued on were executed by the Pennock Improvement Company, a corporation, .in consideration of a debt due by it alone to plaintiff, and delivered by it in the office of plaintiff to its president, Geo. O. De Young, that the said De Young, president, received and retained the said notes bearing only the signature of Pen-nock Improvement Company, the maker thereof, without objection or protest, and without intimation that defendant’s signature thereon was expected or would be demanded, and that on a day thereafter the said notes were presented by plaintiff to defendant with request that he indorse his name thereon, and that be did so; wherefore the court erred in Ms refusal to find that the defendant thereby became merely an accommodation indorser of said notes without consideration and for the benefit of plaintiff alone, and that he was released from liability thereon by reason of plaintiff’s failure to sue to the first term or the second term of court after the maturity thereof.”

We have carefully examined the record, and, without quoting from the pleadings or from the testimony, we are of opinion that these two assignments are without merit, and therefore they are overruled.

■ The matters called to our attention by the ninth and tenth assignments seem to be the same as those under their first assignment, and therefore, without unduly burdening this record, we simply say that we find no merit in the contentions, and they are therefore overruled.

By the eleventh assignment of error it is complained that:

“The court erred in his refusal to find fo-r defendant on Ms cross-action that the writ of attachment was issued without probable cause because plaintiff, as the basis for the issuance of the writ of attachment, having made afii-davit that ‘said O. H. Pennock, Jr., defendant in said cause, is about to convert Ms property and a part thereof into money, for the purpose of placing it beyond the reach of his creditors,’ and having introduced no evidence in support of said allegation, except to the effect that the office safe, which is exempt from execution and attachment, was, prior to said attachment, being advertised for sale, and the sale or threatened sale of exempt property constituting no ground for attachment, and the defendant having shown by competent evidence that the allegations of said affidavit were untrue, and the plaintiff having failed to show that it had reason to believe that the grounds alleged did in fact exist, the finding of the court and the conclusion thereon that the issuance and levy of such attachment were made in good faith was contrary to the law and the evidence.”

We have examined the findings of the court, as complained of above, and do not see that any error was committed by the trial court in the matter complained of. The assignment is therefore overruled.

The twelfth and thirteenth and fourteen assignments of error are as follows:

(a) “The court erred in his finding of fact paragraph 15, and the judgment based thereon, to the effect that the value of the use of said safe during the period of ten days held under attachment is only the sum of $20, because said finding and judgment are not supported by the evidence; the only evidence on that subject being that of the defendant himself, who testified that the use of the safe was of the value of $10 per day. Wherefore said finding and judgment do not conform to the proof.”
(b) “Having found that the writ of attachment was levied upon an office safe owned and used by an. insurance and real estate agent in the conduct of his business, that the said safe was, under the law, exempt property, that the levy of the writ of attachment thereon was wrongful, and that defendant is entitled to damages for such wrongful levy, the court erred in his refusal to award defendant exemplary damages as prayed for in his cross-action.”
(c) “It having been shown by a preponderance of the evidence that the writ of attachment herein sued out was without probable cause, that said writ was, by express direction of plaintiff, levied upon exempt properly, and the court having found that such levy-was illegal and wrongful, the court erred in refusing to hold that such wrongful issuance and levy was malicious per se, and that by reason thereof defendant is entitled to both actual and exemplary damages on his cross-action.”

As to the twelfth assignment, the evidence as to the appellant’s actual damage for the alleged wrongful levy of the attachment writ, and the awarding appellant $20 as damages, it occurs to us is not a matter about which appellant can be heard to complain, as having no basis in the testimony. It is true that appellant testified that the damage inflicted upon him was $10 per day during the ten days in which the attachment was in force; but the fact in evidence showing that the safe was being advertised for sale for the sum of $70, it seems to us, would reflect the conclusion that it would be inequitable and unjust to pay the appellant $100 for the detention under the attachment writ, for ten days, property which he was offering to sell and part with the complete title thereto forever for the sum of $70. We believe from the testimony in this case, which shows that appellant had already purchased another safe in which to store his records prior to the time that he had offered the safe which was levied on for sale, and that while appellant said in his testimony that he was damaged by the nonuse of same $10 per day, there is no fact in his testimony upon which could be based such a conclusion. Nothing was said by him upon which a court or jury could actually estimate the actual damages inflicted upon the appellant by reason of the nonuse of the safe for ten days; and as said before, there being no testimony whatever in the record, the appellant, in our opinion, should not be heard to complain that the $20 allowed by the court as damage to the appellant for the detention of the safe during ten days is inadequate. However, there is no complaint, nor has the matter been properly called to the attention of this court by the appellee with reference to there being no testimony on the issue; and, the court having found $20 as damages, we are of opinion that appellant should not be heard to complain.

“The purpose of the law, in awarding actual damages, is to repair the wrong that has been done to compensate for the injury inflicted but not to impose a penalty. Any method that will afford the injured party more than just and reasonable compensation is not the correct measure of actual damages, whether the injury be the result of a willful wrong or an honest mistake.” With reference to exemplary damages, it may be well to say that:

“Where an act has been done in good faith, although it may result in serious injury to the defendant^ there can be no recovery of exemplary damages.”

It was shown by the evidence, and so found by the court, that appellee’s claim was fair and just, and that there was no malice in the suing out of said writ of attachment. The facts also are undisputed that the officer at no time took the safe in his actual possession, but left it with the defendant, under agreement to be held subject to further order of the court, and that there was nothing said or done that would have led the defendant, appellant here, to believe other than that the safe was to remain in his possession until the trial of the case.

It is urged that the note for $137.10, dated September 18, 1913, drawing interest at the rate of 8 per cent, per annum, was without payment until June 10, 1914, when $50 was paid. It is further urged that interest on June 10,1914, a pe'riod of eight months and twenty-two days, aggregated $7.90; that of this $50 but $42.10 should be applied to the principal, reducing it to $95; that interest on $95 from June 10,1914, to March 22, 1916, the date of the judgment, a period of one year, nine months, and two days, aggregated $13.34; that the principal and interest combined made $108.34; that the additional 10 per cent, attorney’s fee brought the total to §119.17. It is further alleged that the note of September 18, 1913, for §100, with interest at 8 per cent., on March 22, 1916, which was the date of the judgment, remained unpaid for a period of two years, three months, and two days, the principal, interest, and attorney’s fees, aggregating $129.84, and that the amount of the judgment should have been, if properly calculated, the sum of §249.01.

We are of opinion that the contention of appellee is right, and that it was an error committed by the trial court unintentionally, for in the eighth conclusion of law the court says that:

“The Texas Builders’ Supply Company would be entitled to recover of and from the said defendant, O. H. Pen nock, Jr., the face amount of said notes, including interest‘and attorney’s fee, less the credit of §50, or the aggregate sum of §229.04, with, interest thereon at the rate of 8 per cent, per annum from the date of judgment herein, and its costs in such behalf expended.”

Therefore the error was an error of calculation on the part of the trial court, and was an unintentional error in calculation.

Believing as we do that the appellant had a fair and impartial trial, and that Ms rights have been carefully guarded, and finding no error save that of calculation in the action of the trial court, the remaining assignments of appellant are overruled, and judgment is here and now entered for appellee in the sum of §249.01, to bear interest from the date of the judgment of the trial court at 8 per cent, per annum; and, as so reformed, the judgment in this cause is in all things affirmed.
      <fcaFor other oases see same topic and KEY-NUMBJSR. in all Key-Numbered Digests and Indexes

      other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: JENKINS, J.

license: Public Domain

text:
    GEE et ux. v. PARKS.
    (No. 5727.)
    (Court of Civil Appeals of Texas. Austin.
    Feb. 26, 1917.
    Rehearing Denied April 4, 1917.)
    1. Bankruptcy <§=>188(3) — Rights op Trustee-Secret Equities.
    The wife paid seven-eighths purchase price of land taken in name of husband. The husband bought goods and gave his note and mortgage to a company. The company borrowed money from a bank, depositing accounts and the note and mortgage as collateral, and was thereafter declared bankrupt. The trustee recovered the collateral from the bank. Seld, that he became a lien creditor as to the assets of the bankrupt company, and his rights were superior to the secret equity of the debtor’s wife, which had in no way been brought to the notice of the creditor, of the bank, or of the trustee.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. §§ 270, 295.]
    2. Bankruptcy <§=>151 — Rishts op Trustee —Property oe Bankrupt.
    Under Bankr. Act July 1, 1898, c. 541, § 47, §0 Stat. 557, as amended by Act June 25, 1910, c. 412, § 8, 36 Stat. 840 (U. S. Comp. St. 1913, § 9631), reading that the trustee as to all property in custody of the bankruptcy court is vested with all rights of a creditor holding a lien thereon, upon declaration of bankruptcy the trustee has title to all the property of the bankrupt.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. §§ 193, 239.]
    3. Bankruptcy <§=>257 — Rights oe Trustee —Secret Equities.
    Where a wife paid seven-eighths purchase price of land taken in name of her husband, and he bought goods giving note and mortgage to a company which borrowed money from bank depositing accounts and the note as collateral, and the company was thereafter declared bankrupt, and the trustee recovered the collateral from the bank, the husband’s title being the legal title, and the creditor having the right to convey legal title, the trustee could also convey it.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. §§ 356, 357.]
    4. Bankruptcy <§=>268 — Rights oe Trustee —Secret Equities.
    In such case, where an innocent party purchased the note and mortgage, _ paying _ value therefor without notice of the wife’s equity, he acquired title as against her, even though the creditor might not have done so.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. §§ 372, 379.]
    5. Bills and Notes <§=>317 — Purchase oe Note Past Due — Notice.
    Purchaser of past-due note takes it with notice of any defense which the maker may have, but not with notice of secret equities of third persons.
    [Ed. Note. — For other cases, see Bills and Notes, Gent. Dig. § 763%.]
    Appeal from District Court, Brown County; John W. Goodwin, Judge.
    Suit by W. C. Parks against John E. Gee and wife. Judgment for plaintiff, and defendants appeal.
    Affirmed.
    Wilkinson & McGaugh, of Brownwood, for appellants. McCartney & McGee, of Brown-wood, and E. B. Hendricks, of Austin, for appellee.
   Findings of Fact.

JENKINS, J.

We adopt as our findings of fact the following findings by the trial court:

“(1) I find that the note sued upon was executed on the 7th day of August, 1913, and was due and payable 30 days after date, and that at the time of the execution thereof John Gee also made, executed, and delivered the mortgage sued upon to secure said note.
“(2) I find that the note sued upon was given by John Gee in renewal of a previous note given by him to Baker-Timmins Hardware Company, which previous note was unsecured.
“(3) I find that the land embraced in the mortgage given by John Gee to Baker-Timmins Hardware Company was conveyed to John Gee, and the title thereto stood in his name at the time of the execution of the said mortgage, and has ever since so stood; that John Gee purchased said land, giving therefor a house and lot in the city of Brownwood, and assuming an incumbrance of §600 against said land; that the house and ,lot given in exchange for the land in question was purchased by John Gee, and the title thereto taken in his name; that said house and lot cost $1,600; that Mrs. Gee, intervener, paid out of her separate means §1,400 of the §1,600 given for the house and lot; and that it was the understanding by and between her and John Gee that she was to have fourteen-sixteenths interest in said house and lot.
“(4) I find that at the time John Gee executed the note and mortgage in question Baker-Timmins Hardware Company had neither actual nor constructive notice of any interest of Mrs. Gee in the land in question or that she claimed any interest in said land.
“(5) I find that Baker-Timmins Hardware Company borrowed from the Coggin National Bank $10,000, and gave said bank its note therefor, with W. C. Parks as surety; that at the time Parks signed said note as surety, and as an inducement to him to so sign the same. Baker-Timmins Hardware Company deposited with the Coggin National Bank as collateral a large amount of notes and accounts due Baker-Timmins Hardware Company, with the understanding and agreement by and between it and Parks and the said bank that said notes and accounts should be held as collateral to secure the note of Baker-Timmins Hardware Company to said bank, and also to indemnify W. C. Parks as surety on said note to the bank; that among the notes so deposited by Baker-Tim-mins Hardware Company with the Coggin National Bank, was a note given by John Gee to said hardware company, and which was later, and after its maturity, renewed by the giving of the note sued upon by plaintiff.
“(6) I find that within four months next before Baker-Timmins Hardware Company were adjudged bankrupt said company borrowed of the Citizens’ National Bank $20,000 for which it executed to said bank its note with W. C. Parks as surety. I find that Baker-Timmins Hardware Company, W. C. Parks, and said bank also had a contract and agreement in all respects similar to the contract and agreement between said hardware company, Parks, and the Coggin National Bank with reference to the Citizens’ National Bank, and to indemnify W. C. Parks as surety, and X find that a large amount of such collateral was deposited with said Citizens’ National Bank for said purpose.
“(7) I find that the note sued upon was given by John Gee in renewal of a former note given by him to Baker-Timmins Hardware Company; that said former note had been deposited with the Coggin National Bank under the agreement referred to in the-finding of fact, and that when the note sued upon was taken in renewal thereof, and before its maturity, it was deposited with the Coggin National Bank, and took the place of the original note; that the old John Gee note, at and before the maturity thereof, had been deposited with Cog-gin National Bank, under the aforesaid agreement, and was held by it under said agreement at the time of its said renewal. I find that W. C. Parks never before the filing of this suit knew of or had either actual or constructive notice of Mrs. Gee’s intei’est in the land in question, or that she ever claimed any interest therein.
“(8) I find that about the-day of-, A. D. 191 — , Baker-Timmins Hardware Company was adjudged bankrupt by the United States District Court at San Angelo, Tex., and G. S. Mason appointed trustee; that said trustee instituted suit against the Coggin National Bank and W. C. Parks to recover all the collateral notes and accounts deposited with said bank under the agreement referred to in the -finding of fact, and that he also instituted suit against the Citizens’ National Bank and W. C. Parks to recover all collateral paper deposited with said bank under agreement referred to in-finding of fact; that the suit against Parks and the Citizens’ National Bank resulted in judgment in favor of the trustee for all the collateral paper held by it; that after judgment W. C. Parks effected a settlement with said trustee by which he purchased from and the trustee released his claim as trustee on all the collateral held by the Coggin National Bank and the Citizens’ National Bank, including the note sued on, paying therefor $19,000, and the judgment against the Citizens’ National Bank was thereby satisfied, and the case against the Coggin National Bank and W. C. Parks dismissed.
“(9) That the ground upon which the assignee in bankruptcy sought to recover and upon which he did recover in the suit against Parks and the Citizens' National Bank was that the hy-pothecation of said collateral was a preference under the bankrupt laws and the trustee relied upon the same ground to recover the collateral held by the Coggin National Bank.
“(10) I find that W. C. Parks had no notice, actual or constructive, of intervener’s interest in the land in controversy, or of her claim thereto, until after the filing of this suit.
“(11) I find that the note given by Baker-Tim-mins Hardware Company, and signed by W. C. Parks, as surety, and payable to Coggin National Bank, has been paid.
“(12) I find that the face value of the collateral deposited by Baker-Timmins Hardware Company with Coggin National Bank and the Citizens’ National Bank was $-.
“(13) X find that the note sued upon was payable to Baker-Timmins Hardware Company or order, and was not indorsed, but was transferred by written contract to said bank, as collateral, and after maturity was transferred by written assignment by the trustee to W. C. Parks.”

The court filed conclusions of law as follows :

“(1) That plaintiff is entitled to recover of and from John Gee the amount of the note, principal, interest, and attorney’s fees, as found by the jury.
“(2) I find that Mrs. Gee is the equitable owner of fourteen-sixteenths interest in the land described in the mortgage, and that two-sixteenths of it is the community estate of John Gee and wife.
“(3) I find that as between Baker-Timmins Hardware Company and Mrs. Gee, Mrs. Gee would be entitled to assert her equitable title to the_ land embraced in the mortgage, but as against W. C. Parks, she ought not to be heard to assert her equitable title to said land:
“First, because at the time the note and the one for which the note in this suit was given in renewal were pledged to Coggin National Bank and W. C. Parks neither the bank nor Parks had notice, actual or constructive, of her equitable title to the land.
“Second, because the trustee in bankruptcy, under the act of 1910, took the note and mortgage in question, and is entitled to all the rights and remedies of a lien creditor without notice of Baker-Timmins Hardware Company and W. C. Parks having bought the note and mortgage from the trustee, and, having paid a valuable consideration for the note and mortgage, is entitled to be protected as an innocent purchaser for value of the note and mortgage.
“Third, because W. C. Parks, having acquired by way of pledge the note and mortgage in question, without notice of Mrs. Gee’s equitable title, and he having purchased said note and mortgage from the trustee in bankruptcy for value and without notice of Mrs. Gee’s equitable title to the land, is entitled to be protected against her equitable title.
“(4) The fact that the note was past due when purchased by W. O. Parks from the trustee in bankruptcy would not charge him with notice of the equitable title of Mrs. Gee, and he took the note and mortgage, by his purchase from the trustee, relieved of her claim to the land.
“(5) I find that Mrs. Gee, to the extent that she paid interest on the $600 incumbrance on the land, is entitled to become subrogated to the rights of the holder of that lien, as against W. C. -Parks.
“(6) I therefore find for plaintiff, and against Mrs. Gee for the debt, interest, and attorney’s fees, as fixed by the verdict of the jury, and foreclosure of the mortgage lien in favor of W. C. Parks against John Gee and wife, Mrs. Gee, subject to the prior lien for $600, and I find that the proceeds of sale should be applied, first, to reimburse Mrs. Gee, and the balance be applied to plaintiff’s debt and costs.”

Judgment was entered in accordance with said conclusions.

Opinion.

There are a number of interesting questions of law raised under the assignments in this case, but we think that the following proposition by the appellee is correct, and that it is determinative of this case, .without reference to the other questions involved, to wit: The trustee in bankruptcy became a lien creditor as to the assets of the BakerTimmins Hardware Oompany upon the institution ■ of bankruptcy proceedings against the said company superior to the secret equity of Mrs. Maud Gee, the intervener. Fairbanks Shovel Co. v. Wills, 240 U. S. 642, 36 Sup. Ct. 466, 60 L. Ed. 841; Acme Harvester Co. v. Beekman, 222 U. S. 300, 32 Sup. Ct. 96, 56 L. Ed. 213; Everett v. Judson, 228 U. S. 474, 33 Sup. Ct. 568, 57 L. Ed. 927, 46 L. R. A. (N. S.) 154; Cooper Grocery Co. v. Park, 218 Fed. 43, 134 C. C. A. 64; In re Pittsburg Coal Co., 215 Fed. 704, 132 C. C. A. 81; In re Kruse (D. C.) 234 Fed. 472; Bank v. Sabin, 227 Fed. 581, 142 C. C. A. 211; Interstate Banking & Trust Co. v. Brown, 235 Fed. 32, 148 C. C. A. 526; In re Ricketts, 234 Fed. 287, 148 C. C. A. 187; In re Waters Co. (D. C.) 206 Fed. 845.

We adopt the following portion of the argument of appellee as our opinion in this case:

“Prior to the 1910 amendment to the bankrupt law it had been held by the Supreme Court of the United States in a series of cases, of which the cases of York v. Cassell, 201 U. S. 344 [26 Sup. Ct. 481, 50 L. Ed. 782], and Thompson v. Fairbanks, 196 U. S. 516 [25 Sup. Ct. 306, 49 L. Ed. 577], are leading examples, that a trustee in bankruptcy took the title of the bankrupt subject to all equities existing in or against it in favor of third parties. The lower and intermediate federal courts had likewise often so ruled, as is shown by the authorities covering this matter cited in appellant’s brief, and a vast number of others which might be cited. The practical results obtained in bankruptcy proceedings by following this construction of the law, which by the way was manifestly correct, frequently led to the greatest frauds, and was such an invitation to perjury that Congress in 1910 amended the act, making section 8 thereof read in part as follows: ‘And such trustees as to all property in the custody or coming into, the custody of the bankruptcy court, shall be deemed vested with all rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied.’ See 36 U. S. Statutes at Large, p. 840, which statute is set out in words or substance in the cases above cited. The lower federal courts in construing this amendment, as usual, did not agree, but it is of no interest to review their contrary holdings, as the cases above cited are authoritative and final. Appellants in their brief, among other things, say that this property was never in the custody of the bankrupt court, because its physical possession remained either with the Coggin National Bank or with W. C. Parks. In the case of Harvester Co. v. Beekman [222 U. S. 300, 32 Sup. Ct. 96], 56 L. Ed. 213, in discussing this question, the gupreme Court of the United gtates announced the law as follows: ‘The exclusive jurisdiction of the bankruptcy court is so far in rem that the estate is regarded as in custodia legis from the filing of the petition.’ Paragraph 5, § 70a, of the bankrupt act provides that there shall vest in the trustee all property which prior to the filing of the petition the bankrupt could by any means have transferred or which might have been levied upon and sold under judicial process against the bankrupt. In the case of Fairbanks v. Wills, supra, the same court, in construing the amendment of 1910, used the following language: ‘ginee the amendment * * * of the Bankruptcy Act by the act of June 25, 1910, trustees have the rights and remedies of a lien creditor or a judgment creditor as against an unrecorded transfer. The estate was in custodia legis from the filing of the petition.’ The provision of' the bankrupt act above quoted is itself a complete answer to appellant’s contention in, this respect. It cannot for a moment be denied that the Baker-Timmins Hardware Company could have transferred the note and security involved in this suit. Parks and the bank merely had a lien against it. The legal title remained with the Baker-Timmins Hardware Oompany. It was the property of-the bankrupt, and passed into the custody of the bankrupt court immediately upon the institution of bankruptcy proceedings. Prior to this time it could have been subjected to a lien by a writ of garnishment by any creditor of the Baker-Timmins Hardware Oompany. If a creditor of the hardware company had served a writ of garnishment upon the Goggin National Bank, he might or might not have acquired a lien. There being a conflict of authority upon this proposition, we pass it up without further comment. He certainly would have impounded its proceeds subject to the rights of the bank. But if such creditor had served a writ' of garnishment on John E. Gee, the maker of this note, he would have obtained a lien against it, which would, of course have carried the mortgage lien security, See Thompson v. Hardware Co., 156 S. W. 301. For the general principle of lien involved see Foeke v. Blum, 82 Tex. 441 [17 S. W. 770]. Now suppose that a creditor of the Baker-Timmins Hardware Company had served a writ of garnishment upon John E. Gee, and made the Coggin National Bank a party to the suit, or the bank had intervened in the garnishment- suit, and judgment had been rendered subjecting the Gee note and its mortgage security to the garnishment lien, and suppose the court had ordered the note and security sold under this judgment in order to speedily realize on it, and Parks, or any one else, had bought the note and mortgage at this sale, paying 'a valuable consideration therefor, without any notice of Mrs. Gee’s -alleged equity, then the title of the purchaser would be beyond question. Now the amendment of 1910 places the trustee in bankrupty in identically the same position as such garnishing creditor holding such garnishment lien, and a sale by the trustee to Parks gave him a perfect title, free of the claims of Mrs. Gee. H:Z * *
“John Gee’s title was the legal title, See Patty v. Middleton, 82 Tex. 591 [17 S. W. 909], If Baker-Timmins Hardware Oompany had sold this land -under their deed of trust, a purchaser paying value would have gotten a perfect title. The trustee certainly could confer as much title as the hardware company could, guppose the trustee had foreclosed the deed of trust, a purchaser at his sale surely would have been protected.
“Recurring to the effect of the amendment of 1910, the case of Bank v. Sabin, supra, was a contest between the trustee and a bank, in which the bank had advanced money to the bankrupt to buy a stock of goods under an agreement that the bankrupt should hold the goods as trustee for tlie bank.' The-court held that the trustee in bankruptcy was entitled to the goods ag-ainst the claim of the bank. The court said: ‘To the contention of the appellant that the trustee is without authority to maintain the proceeding, for the reason that no creditor had secured a lien upon the goods at the time the bank took possession of them, and hence the trustee secured no greater rights than the bankrupt himself had, it is only necessary to state that * * * under this provision of the statute (meaning the amendment of 1910) the trustee is not limited to such objections to a transaction between the bankrupt and a creditor as the bankrupt might have had, but he may make any objection’that a creditor holding a Ken might make.’ * *
“In the case of Grocery Co. v. Park, above cited, the Circuit Court of Appeals for the Fifth Circuit, in discussing this amendment, used the following pertinent language: ‘The petitioners in this case claim that the trustee takes this property subject to the lien of the deed of trust by reason of the fact that said security was mentioned in the voluntary petition of bankruptcy, and therefore, although the deed of trust was not recorded as required by the statute of Texas, the trustee takes it with notice of the lien, and therefore subject to it. To decide this question it is necessary to consider in what capacity the trustee in bankruptcy takes the property. Does he take it as an ordinary voluntary purchaser, or does he take it as representing the rights of the creditors with a lien acquired by legal or equitable means, and subject only to such liens and rights as would be valid against such creditors? The provision of the amendment of 1910, read in connection with 67a, would seem to settle this question against the contention, of the petitioners in this case.’
“The amendment of 1910 does not clothe the trustee with the rights of a lien creditor as to the property coming into his ‘possession,’ but clothes him with such rights as to all property coming into the custody of the bankruptcy court. That a state court, notwithstanding it had foreclosed a lien on property could not proceed to sell it after the intervention of bankruptcy, was decided by the San Antonio Court of Civil Appeals in the case of Kopplin v. Ludwig, 170 S. W. 105.
“In the case of Roszell v. Coal Corp. (D. C.) 235 Fed. 351, a decision which has just been handed down, the court, quoting from the case of Lazarus v. Prentice, 234 U. S. 263 [34 Sup. Ct. 851, 58 L. Ed. 1305], said: ‘The filing of the petition and adjudication in the bankruptcy court * * * brought the property of the bankrupts wherever situated into custodia legis, and it was thus held from the date of the fifing of the petition.’ ”

Such, being the law, it follows from the facts in this casé that, the trustee in bankruptcy having acquired the right of the bankrupt in the note and deed of trust sued on, plus the right of a lien creditor, and W. C. Parks having purchased said note and security, and paid value therefor, without any notice of the intervener’s equity, he acquired title as against the intervener, even though the Baker-Timmins Hardware Company might not have done so. Cantrell v. Dyer, 6 Tex. Civ. App. 551, 25 S. W. 1098; Holmes v. Buckner, 67 Tex. 107, 2 S. W. 452; White v. Frank, 91 Tex. 71, 40 S. W. 962; Saunders v. Isbell, 5 Tex. Civ. App. 513, 24 S. W. 307; Lynch v. Johnson, 170 N. C. 110, 86 S. E. 995; Webber v. Clark, 136 Ill. 256, 26 N. E. 360, 32 N. E. 748; Hardin v. Osborne, 97 Ill. 571.

It is contended by appellant that appellee is affected with the equity of Mrs. Gee, for the reason that the note which he purchased from the trustee in bankruptcy was past due. The purchaser of a past-due note takes it with notice of any defense to the note which the maker may have, but does not take it with notice of the secret equities of third persons. Kempner v. Huddleston, 90 Tex. 184, 37 S. W. 1066; Cordage Co. v. Seymour, 67 Minn. 311, 69 N. W. 1082; Moffett v. Parker, 71 Minn. 139, 73 N. W. 851, 70 Am. St. Rep. 319; Layman v. Vicknair, 47 La. Ann. 679, 17 South. 265; Bank v. Garlick, 137 La. 282, 68 South. 611; Dulin v. Hunter, 98 Ala. 539, 13 South. 301; Porter v. King (D. C.) 1 Fed. 760; Mohr v. Byrne, 135 Cal. 87, 67 Pac. 11; Gymnasium Co. v. Bank, 179 Ill. 599, 54 N. E. 297, 46 L. R. A. 753, 70 Am. St. Rep. 135; Justice v. Stonecipher, 267 Ill. 448, 108 N. E. 723; Jones on Mortgages, § 843. In the case of Cordage Co. v. Seymour, supra, the court said:

“The general rule is that a purchaser of past-due commercial paper takes it subject to all equities existing between the parties to the paper, but not to any latent equities in favor of the third party.”

And such we understand to be the law.

For the reasons stated, the judgment of the trial court is affirmed.

Affirmed.
      <§=>For Other oases see same topic and KEY-NUMBER i.n all Key-Numbered Digests and Indexes


text:
    PECOS & N. T. RY. CO. v. RAILROAD COMMISSION OF TEXAS.
    (No. 5712.)
    (Court of Civil Appeals of Texas. Austin.
    Feb. 15, 1917.
    Rehearing Denied March 28, 1917.)
    1. Trial <^>331 — Sufficiency of Findings to Support Judgment — Inconsistent Findings.
    In a suit to enjoin the enforcement of an order of the Railroad Commission requiring plaintiff railroad to build a station at a designated place, where the answer to special issues as to whether plaintiff had designated a depot in a place named in each was “Yes; * * * but not permanent,” and the answer to a special issue as to whether plaintiff had at any time established a stopping place at or near the place designated by the commission for receiving and discharging passengers and freight was “No,” and the answer to a special issue whether the order of- the Railroad Commission was unreasonable was “No,” the verdict was so ambiguous and contradictory as to require a reversal of a judgment for defendant based thereon, since in order to support a judgment a verdict taken as a whole must be plain in its meaning and not inconsistent in its findings upon material facts.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 783.]
    2. Railroads ®=»58 — Construction—Designation of Depoiy-Change.
    By the direct provisions of Rev. St. 1911, art. 6550, no railroad company may change its depot grounds after they have been designated.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. §§ 130, 131, 133, 135, 136.]

      3. Appeal and Error <@==>837(7) — Beview— Evidence.
    The appellate court cannot look to the evidence, unless it is uncontradicted, to see what the jury ought to have found in order to determine what they did find, but when a verdict is apparently not clear, it may look to the evidence to determine that it is in fact ambiguous.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3262.]
    4. Bailroads <@=>58 — Construction—Designation oe Depot.
    By placing a suggested location upon its preliminary map as a place suitable for a depot, and so reporting it to the chief officers of the railroad, who after investigation decided not to designate such place as a depot or a station, a railroad did not designate such place as a depot within the meaning of Bev. St. 1911, art. 6550.
    [Ed. Note. — For other cases, see Bailroads, Cent. Dig. §§ 130, 131, 133, 135, 136.]
    5. Trial <@=>350(1) — Submission oe Special Issues — Designation oe Bailroad Depot.
    On the issue as to whether or not the plaintiff had designated such place as a depot, it was error to submit two special issues as to whether or not the plaintiff had designated a depot naming a different place in each as but one question as to the designation of such depot should have been propounded, and no answer should have been received except “Yes” or “No.”
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 828.]
    6. Bailroads <@=>58 — Construction—Designation op Depot.
    For the purposes of such case, two places separated only by the railroad track are one and the same place.
    [Ed. Note. — For other cases, see Bailroads, Cent. Dig. §§ 130, 131, 133, 135, 136.]
    7. Bailroads <@=9(2) — Beview of Order Designating Station — Documentary Evidence, — Maps.
    If plaintiff’s road was in fact, if not in name, built and owned by another railroad company, a map issued by the immigration department of such other railroad showing the place indicated by the Bailroad Commission as a station on plaintiff’s road was admissible.
    [Ed. Note. — For other cases, see Bailroads, Cent. Dig. §§ 17-19.]
    8. Bailroads <@=>9(2) — Construction oe Depot-Order oe Bailroad Commission — Evidence — Burden oe Proof.
    By the direct provisions of Bev. St. 1911, art. 6658, the burden was on the plaintiff to show by clear and satisfactory evidence that the order of the Bailroad Commission as to the cost of the depot ordered to be erected at the place indicated was unreasonable and unjust to the plaintiff.
    [Ed. Note. — For other cases, see Bailroads, Cent. Dig. §§ 17-19.]
    9. Bailroads <@=>58 — Construction—“Depot Grounds” — “Station.”
    The words “depot grounds” as used in Bev. St. 1911, art. 6550, are synonymous with “station” (citing Words and Phrases, Station).
    [Ed. Note. — For other cases, see Bailroads, Cent. Dig. §§ 130, 131, 133, 135, 136.]
    Appeal from District Court, Travis County; Geo. Calhoun, Judge.
    Suit for injunction by the Pecos & Northern Texas Bailway Company against the Bailroad Commission of Texas. From a
    judgment for defendant and from the refu'sal of a motion for a new trial, the plaintiff appeals.
    Beversed, and remanded for a new trial.
    Terry, Cávin & Mills, of Galveston, Madden, Trulove, Byburn & Pipkin and W. H. Kimbrough, all of Amarillo, and Bamsey, Black & Bamsey, of Austin, for appellant. B. F. Looney, Atty. Gen., Luther Nickels, Asst. Atty. Gen., A. B. Martin, of Plainview, and N. A. Stedman, of Austin, for appellee.
    Statement of the Case.
    JENKINS, J. On February 25, 1914, the following proceedings were had before the Bailroad Commission of Texas.
    “Office of Bailroad Commission of Texas.
    “Austin, Texas, February 25th, 1914.
    “Hurley, on P. & N. T. By., Petition for Depot and Station Facilities.
    “Hearing No. 1446.
    “The above numbered and entitled cause having been called for hearing by the commission on the 16th day of December, 1913, in pursuance of notice duly given, and the parties hereto having appeared by their representatives, the commission, having heard the evidence and argument of counsel, and having taken the matter under advisement, and having now duly considered the same, finds that Hurley is a station on what is known as the Texico-Lubbock cut-off of the Pecos & Northern Texas Bailway Company, and that said Pecos & Northern Texas Bail-way Company is under the duty of providing and maintaining an adequate depot and depot building at said station for the accommodation of passengers, and to keep and maintain an adequate freight depot and building at said station for the receiving, handling, storing, and delivering of freight, and to build sidings and spur tracks sufficient to handle all the business tendered said railway company at said station; and the commission further find that one building to be constructed of such material and design as said railway company may determine, and at a cost of not less than $250, and not more than $500, within the discretion of said railway company, will be sufficient for the present needs of the public in the accommodation of both freight and passenger business of said station of Hurley.
    “It is therefore ordered by the Bailroad Commission of Texas that said Pecos & Northern Texas Bailway Company be and it is hereby ordered and required, within sixty days after the delivery of a copy of this notice to its general manager, to erect and complete at said station of Hurley a building of such material and design as said railway company may determine, and at a cost within its discretion of not less than $250 and not more than $500, such building to be suitable for the accommodation of both passengers and freight, and that said railway company shall within said period of sixty days build such sidings and spur tracks at said station as will be sufficient to handle all business tendered said railway company at said station.
    “William D. Williams, “Earle B. Mayfield,
    “Commissioners.
    “Attest;
    “E. B. McLean, Secretary.”
    On April 14, 1914, the appellant filed a petition in the district court of Travis county asking for a temporary injunction to restrain the Bailroad Commission from enforcing said order, with a prayer for perpetual injunction upon final hearing.
    Upon trial the case was submitted to a jury upon the following special issues:
    “Question 1. Did the Pecos & Northern Texas Railway Company at any time prior to the institution of proceedings before the Railroad Commission of Texas designate depot grounds at Hurley?
    “In connection with the above question you are instructed that, in determining whether depot grounds were designated by the railway company at Hurley, it is not necessary that such depot grounds should be in or.within the town of Hurley, as platted, but it would be sufficient if the place at which such depot grounds were designated, if they were designated at all, was within a reasonable distance from the town of Hurley as platted, provided that in view of the attending circumstances you believe from the evidence that a place near, but not within, the town of Hurley was a reasonable designation of that place as the site for the depot grounds. And you are further instructed that the term ‘depot grounds’ in legal contemplation signifies the same thing as a railroad station.
    “Question 2. Did the plaintiff, the Pecos & Northern Texas Railway Company, prior to the making of the defendant Railroad Commission’s order offered in evidence in this ease, designate any place on its Texico-Lubbock cut-off at or near the Hurley town site as any kind of station or depot grounds?
    “Question No. 3. If in answer to question No. 2 you find that the plaintiff, before, the making of said order by the defendant, Railroad Commission, designated any place on said cut-off at or near the Plurley town site as any kind of station, then you will state at what place, if any, said station or depot grounds were, located, with reference to the sections and section lines and other lines indicated on the map furnished by the railway company to the Railroad Commission of Texas.
    “Question 4. Did the Pecos & Northern Texas Railway Company at any time prior to the institution of proceedings before the Railroad Commission of Texas establish the place referred to in the evidence as Warren’s Siding, Muleshu, or Hurley as a siding and stopping place for receiving and discharging way passengers and freight?
    “Question 5. Was the order of the Railroad Commission of Texas entered on February 25, 1914, offered in evidence in this case, requiring the plaintiff, the Pecos & Northern Texas Railway Company, to erect and complete at a place called I-Iurley a building of such material and design as said railway company might determine, and at a cost within its discretion of not less than $250, and not more than $500, such building to be suitable for the accommodation of both passengers and freight, and requiring said railway company to build Such siding and spur tracks at said place as would be sufficient to handle all business tendered said railway company at said place, unreasonable and unjust to said railway company as to the amount which would be required to be expended thereby? Before you would be justified under the law in answering this question in the affirmative, the plaintiff herein, the Pecos & Northern Texas Railway Company, must have shown to you by clear and satisfactory evidence that said order was unreasonable and unjust to it.”
    To the first question the jury answered: “Yes; preliminary, but not permanent.” To the second question the jury answered: “Yes; preliminary, but not permanent.” To the third question the jury answered: “On section 21, block Y.” To the fourth and fifth questions the jury answered: “No.”
   Opinion. • .

We are of the opinion that the court erred in refusing to grant the appellant a new trial upon the ground that the verdict is insufficient as a basis for a judgment. In order to support a judgment, a verdict, taken as a whole, must be plain in its meaning and not inconsistent in its findings upon material facts. In support of the proposition that the verdict must be plain, intelligible, and unambiguous we cite Moore v. Moore, 67 Tex. 293; Brown v. Harless, 22 Tex. 646; Aultman v. Cappleman, 36 Tex. Civ. App. 523, 81 S. W. 1243; Riske v. Rotan Grocery Co., 37 Tex. Civ. App. 494, 84 S. W. 243; Schwartzman v. Cabell, 49 S. W. 113; Railway Co. v. Hathaway, 75 Tex. 557, 12 S. W. .999. As sustaining the proposition that a verdict must not be contradictory, see Waller v. Liles, 96 Tex. 21, 70 S. W. 17; Yeary v. Smith, 45 Tex. 56; Cushman v. Masterson, 64 S. W. 1031; Taylor v. Flynt, 33 Tex. Civ. App. 664, 77 S. W. 964; Stoker v. Fugitt, 102 S. AY. 743; Goldstein v. Heflin, 174 S. W. 891.

The statute requires'railway companies to designate their depot grounds before constructing their roads. R. S. arts. 6550 and 6551. Had the jury simply answered “Yes” to the first question, it would have been a finding that appellant did designate depot grounds at Hurley. If they meant to find that such designation was in the sense in which that word is used in the statute, there was no necessity for them to say that it was a permanent designation; for in such case the statute makes it permanent by forbidding its change.

What did the jury mean by adding the words “preliminary designation, but not permhnent”? Did they mean that the appellant designated such place as a station on its road, with the intention of putting in side tracks and a depot building, but afterwards changed its mind and moved this station 3% miles to the place where the evidence shows the depot was built, and that therefore such designation was temporary and not permanent? If so, judgment should have been for appellee, for the reason, as above stated, the appellant, under such circumstances, was forbidden by law to make such change.

AVe cannot look to the evidence, unless it is uncontradicted, to see what the jury ought to have found in order to determine what they did find. But when a verdict is apparently not clear, we may look to the evidence to determine that it is in fact ambiguous. It was the contention of appellant, supported by its evidence, that it never designated Warren Siding or Hurley as a depot, in the sense in which that word is used in that statute, but that the only sense in which it designated it as a station was that it was suggested as such, and so placed upon its preliminary map, as a place probably suitable for a depot, and so reported to its chief officers,; but that they after investigation decided not to designate that place as a depot or station. If the jury meant to find this contention to be true, then there was never any legal designation of depot grounds at Hurley. Which did they mean? Quien sabe? We cannot tell. '

The answer to the second question, to say the least of it, is not clarifying; and the answer to the fourth question renders obscurity doubly obscure.

The questions propounded were calculated to lead to obscurity and contradictory answers. There were but two issues in this case, and these were whether or not appellant, prior to the construction of its road, designated depot grounds at Hurley, and, if so, was the order of the commission fixing the amount to be expended by appellant in providing a suitable building unreasonable and unjust to the appellant? But one question as to the designation of such depot grounds should have been propounded, together with such explanation as was necessary to enable the jury to intelligently answer the question, and no answer should have been received, except a direct answer, “Yes” or “No.”

There was no error in the explanation given by the court in connection with the first question, as to what was meant by Hurley and as to what was meant by depot grounds. The. undisputed evidence shows that Warren Siding or Muleshu and Hurley are separated only by the railroad track, and that for the purpose of this case they are one and the same place.

Appellant assigns error on the admission of a map issued by the immigration department of the Santa Fé system, and which shows Hurley as a station on appellant’s road. The only objection to this map which we .deem it necessary to notice is that a map issued by the Atchison, Topeka & Santa Fé Railway system is no proof of the location of a station on the road of the Pecos & Northern Texas Railway, the appellant herein. So far as we can gather from the record, the Pecos & Northern Texas Railway Company, while operating under a separate charter, is in fact a part of the Atchison, Topeka & Santa Fé Railway, and was in fact, if not in name, built and is owned by the latter railway company. If such is the fact, we think the map in question was admissible in evidence.

There was no error in that portion of the court’s charge which, in effect, instructed the jury that the burden was on appellant to show by “clear and satisfactory evidence” that the order of the Railroad Commission as to the cost of the depot ordered to be erected at Hurley was unreasonable and unjust to appellant. This is the language of the stab-ute. R. S. art. 6658; R. R. Commission v. Galveston, 105 Tex. 101, 145 S. W. 573.

“Depot grounds,” as that expression is used in the statute, is synonymous with “station.” Hill v. Railway Co., 75 S. W. 876; Railway Co. v. Thornsberry, 17 S. W. 523; 13 Cyc. 1041; Words and Phrases, vol. 7, p. 6644.

We do not deem it necessary to speeifical•ly discuss the remaining assignments of error. They have been considered and are overruled.

For the reason that the verdict is ambiguous and contradictory, the judgment of the trial court is reversed, and this cause is remanded for a new trial.

Reversed and remanded.
      á^For other eases see same topic ana KEY-NUMBER in all Key-Numbered Digests and Indexes

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