author: HUFF, O. J.

text:
    WARREN et al. v. PARLIN-ORENDORFF IMPLEMENT CO. et al.
    (No. 1383.)
    (Court of Civil Appeals of Texas. Amarillo.
    Dec. 4, 1918.
    Rehearing Denied Jan. 8, 1919.)
    1. Limitation oe Actions <@=>180(5) — Pleading — Exceptions.
    In suit to establish plaintiff’s and inter-veners’ interest in a note, exception, to the effect that cause of action asserted by plaintiff creditor showed that cause of action was barred, was properly overruled, where claims of inter-veners, other creditors, was not barred.
    2. Limitation of Actions <@=>167(1) — Suit to Enforce Pledge or Trust.
    Note, together with contract of sale, whereby sellers warranted title and agreed that proceeds of note received from buyers should be applied to any and all debts against property, amounted to an assignment of note to sellers’ creditors, and suit by a creditor was not barred, although he'could not maintain suit on debt; a bar by statute not paying the debt.
    3. Limitation of Actions <@=>167(1) — Suit to Enforce Pledge or Trust.
    A pledgee of property may sell or sue for conversion, although debt which it was given to secure is barred.

      4. Assignments for Benefit of Creditors <§=>3 — Transaction Creating Trust for Creditors.
    Where sellers and buyers agreed that proceeds of note representing part of consideration for goods should he applied to payment of any and all debts or claims against goods, held, that creditors of sellers had an interest in note and were entitled to judgment for proportional amount of their claims.
    5. Assignments for Benefit of Creditors <§=>44 — Notice to and Acceptance by Creditors.
    Although creditors of sellers did not know, at time of its ci’eation of trust in note given as part consideration for goods, they had a right thereafter to affirm it and to enforce it in their favor, and, when they affirmed trust, they were no longer simple contract creditors.
    6. Assignments for Benefit of Creditors <§=>295(8) — Action on Note — Pleading— Judgment.
    In suit by creditors of sellers to enforce a trust in note given by purchasers, allegation that purchasers, parties defendant, executed the note and signed the contract, creating the trust, authorized a judgment against the purchasers for the amount of the note.
    7. Trusts <§=>336 — Suit by Beneficiary.
    Where trustee seeks to repudiate the trust, the beneficiary may sue to enforce the trust.
    8. Fraudulent Conveyances <§=>213 — ' Bulk Sales Law — “Creditor.”
    One who purchased a note given by the buyers as part consideration for goods purchased would not be a “creditor,” within Bulk Sales Law (Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 3971-3973), providing- that a bulk sale shall be void against creditors.
    [Ed. Note. — For other definitions, see AVords and Phrases, First and Second Series, Creditor.]
    9. Estoppel <§=>78(2) — Inconsistent Conduct.
    Sellers and buyers would be estopped from claiming that sale was in violation of Bulk Sales Law (Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 3971-3973) to defeat just debts, which both had agreed to pay and made provision to pay out of the consideration for sale.
    10. Fraudulent Conveyances <§=>225 — Es-toppel of Creditor — Inconsistent .Conduct.
    Creditors of sellers by affirming contract of sale made it their own, and would be estopped to set up that it was originally illegal.
    11. Election of Remedies <§=>7(1) — Reducing Debt to Judgment.
    A creditor of sellers by reducing debt to judgment, after creation of trust in note, held not to have elected to pursue a different remedy than that which he had by virtue of agreement between sellers and buyers, whereby trust was created in favor of sellers’ creditors in note given as part consideration for the goods.
    12. Election of Remedies <§=>7(1) — Changing Form; of Obligation.
    Creditors of sellers by taking notes for debts, after creation of trust in note, held not to vhave elected to pursue a different remedy than that which they had by virtue of agreement between sellers and buyers, whereby trust was created in favor of sellers’ creditors in note given as part consideration for the goods.
    13. Assignments for Benefit of Creditors <§=>333 — Purchaser with Notice — Rights.
    One who came into possession of note given as part consideration for goods, and held in trust for benefit of' creditors of sellers, after note was due and had notice of the facts, cannot complain that in suit by creditors to realize on the note he was not awarded the residue.
    14. Lis Pendens <§=>4 — Lis Pendens Purchaser.
    One who purchased a note long after maturity, and after suit was begun thereon, would, be a pendente lite purchaser, and lis pendens would apply to her.
    15. Evidence <§=>459(1) — Parol Evidence to Identify Parties — Admissibility.
    AVhere contract provided that note given as part of purchase price for goods should be applied by sellers to payment of all claims against the goods, parol evidence was admissible to show who were creditors of sellers.
    Appeal from District Court, Deaf Smith County; Reese Tatum, Judge.
    Action by thelParlin-Oreaidorff Implement Company against M. AV. AVarren and others, in which certain creditors intervened. From the judgment rendered, M. AV. AVarren and others appeal.
    Affirmed.
    G. AV. Bareus, of Waco; Veal & Lumpkin, of Amarillo* and A. S. Rollins, of Houston, for appellants.
    Carl Gilliland, of Hereford, for appellee Parlin & Orendorff Implement Co.
    Madden, Trulove, Ryburn & Pipkin, of Amarillo, for appellee Morrow-Thoinas Hardware C'o.
    Knight & Slaton, of Hereford, for appellees Texas Harvester Cot, AVyetli Hardware & Mfg. Co., and Hibbard, Spencer & Bartlett & Co.
   HUFF, O. J.

This is an action originally brought by Parlin-Orendorff Implement Company, a corporation, against J. I. AValker and J. J. Perkins, a partnership, under the name of AValker & Perkins, and G. AV. Bareus and M. AV. AVarren. Suit was instituted March 9, 1914, and on the 5th day of June, 1915, judgment wasi rendered in which the defendant M. AV. AVarren was dismissed by the plaintiff. That case was appealed to this court and reversed because necessary parties to the suit were not parties in that action. Upon its return to the trial court, the plaintiff filed its third original petition. In the meantime, however, certain creditors intervened in the original suit, and, alter reversal and filing the amendment, the plaintiff, Parlin-Orendorff Implement Company made M. W. Warren a party defendant to the suit and the other members of the partnership of Warren Hardware Company, and for cause of action it is alleged that J. J. Perkins and J. I. Walker, on or about the 14th day of January, 1913, composed a copartnership, known as Walker & Perkins, and on that date entered into an agreement with M. W. Warren and C. W. Warren on the one part, and Walker and Perkins on the other, Walker & Perkins being the first party and C. W. Warren and M. W. Warren parties of the second part, who were acting for the Warren Hardware Company. The parties of the second part in that contract conveyed all the merchandise, goods, etc.,- of the Warren Hardware Company, situated in the town of Hereford, Deaf Smith county, and in payment for the above-mentioned property J. J. Perkins was to convey six tracts of land of 177 acres each, aggregating 1,068 acres, at the price of $15 an acre, totalling $15,930, less the debt which Roberts county held against the land, and the balance was to be paid by Walker & Perkins to the parties of the second part, the Warrens; $4,000 to be evidenced by a note for that sum, the note to be dated as of the date of the contract, and to mature 90 days from such date, with interest at 8 per cent. The contract also contained the following clause:

“Third. Second parties guarantee to the first parties that they, the second parties, will pay or cause to be paid, any, every and all indebtedness of claims of whatsoever nature, kind or amount which may be due or owing upon or for any and all the property described in the first paragraph, and that second parties will make a'good and sufficient bill of sale, conveying and warranting the title to all of said property to first parties against any and all persons whomsoever, and deliver all of said property to first parties clear and free from all claims, debts, except such as the second parties will hereafter fully satisfy, pay off and discharge themselves. The proceeds of the note above mentioned which first parties are to make and pay to second parties, being intended and agreed to be applied to the payment of any and all debts of claims which may be owing for or against any of the property mentioned in paragraph first, and the proceeds of said note must be applied to the payment of any and all claims for or against said property until all such claims and debts are fully liquidated. And in the event the proceeds of said note are insufficient to fully pay off and discharge all of such indebtedness, then, nevertheless, the second parties undertake and agree to fully pay off and discharge any and all such claims.”

This' contract was signed Walker & Perkins, per J. I. Walker, and Warren Hardware Company, by C. W. Warren. There are necessary allegations, showing that the parties executing this contract were doing so for their respective copartnerships. It is alleged that Walker & Perkins were, by the terms of the contract, to execute the $4,000 note upon the final consummation of the contract, and the note to be dated as of the date .of the contract. It was also alleged that the Warren Hardware Company was doing business in the town of Hereford, and that the plaintiff sold it merchandise, which was used by said partnership in the business and which indebtedness was evidenced by a promissory note made by the partnership on November 12, 1910, that being the date of the note, and due August 15, 1911, for the sum of $1,610.99, bearing interest from date until paid at the rate of 8 per cent, per annum to maturity, and 10 per cent, per annum thereafter, providing for the payment of 10 per cent, attorney’s fees, and that said indebtedness was a portion of the indebtedness referred to and understood and contemplated by the parties to the contract, in the third paragraph, heretofore quoted. The plaintiff also alleged that the Warren Hardware Company was indebted to Hibbert, Spencer & Bartlett, evidenced by two promissory notes, due respectively June 15 and July 15,1913, each for $183.13, and was also indebted to the Texas Harvester Company, as evidenced by two promissory notes, one for $1,000 and one for $685, and also was indebted to Morrow-Thomas Hardware Company on a note for $1,000, with credit of $200, and was also indebted to the Wyeth Hardware & Manufacturing Company in the sum of $293; that all the above indebtedness of the creditors named was the indebtedness referred to and agreed to, contemplated and understood by the parties to said contract as being the indebtedness and all the indebtedness referred to in paragraph third of the contract; and that there was no other indebtedness at the time said contract was entered into or that accrued thereafter. They allege that the Warren Hardware Company was still owing and due on the respective amounts above set out, which have not been paid; that after the execution of the contract above set out, and after it was fully consummated, completed, and carried out, on the part of Perkins & Walker, who executed to defendant M. W. Warren and C. W. Warren the note provided for in the contract for the sum of $4,000, dated January 22, 1913, due 90 days after date, bearing interest at 8 per cent, and providing for attorney’s fees.

It is further alleged that the note for $4,000 was executed and delivered to the defendants Warren, to be held by said Warrens in trust to be by them collected and the proceeds thereof to be paid to plaintiff and the above creditors hereinbefore named and specified, but that, after executing and delivering said note the defendant, 6. W. Barcus, after its maturity and with full knowledge of the purpose for which it was executed, and with knowledge of such facts as would and should have put him upon inquiry, and without paying any consideration thei’efor, and for the sole purpose of assisting his father-in-law, M. W. Warren, in hindering, delaying, and defeating said creditors of the said Warren Hardware Company, above mentioned, in the collection of their respective debts, and their equitable rights and interest in said $4,000 note, acquired possession of said note and now claims to be the rightful and legal owner and holder of said note, but in truth and fact is only holding it fraudulently for the purpose of defeating plaintiffs, and other creditors mentioned in this petition, out of their equitable interest and rights in said note. And for that purpose M. W. Warren and C. W. War-en, and each of them, transferred and delivered to Barcus the note and refused to exercise and perform the duties of trust provided in said contract for them to perform in the collection of said note and the payment of the proceeds thereof to the plaintiff and the other creditors mentioned. It is alleged that the $4,000 note is long since past due, and that the note due the Parlin-Orendorff Implement Company was also due and unpaid.

It prayed that it have its judgment against M. W. Warren, C. W. Warren, and Marvin Cross, who was shown to have been a partner of the Warren Hardware Company, for the full amount of its note, principal and interest, and that it have its judgment against Walker & Perkins and as to and against the defendant O. W. Barcus for the full amount of said note for $4,000, together with all accrued interest that may be due thereon, and for costs of suit, and that the decree for recovery of said $4,000 note order and adjudge that the amount of said recovery be prorated in the payment and satisfaction of plaintiff’s indebtedness and the indebtedness due by the said Warren Hardware Company, to the other creditors named in the petition. Walker & Perkins answered admitting executing the contract and the promissory notes as alleged in plaintiff’s petition, and also that the creditors to whom the Warren Hardware Company was indebted, as explained to them, at the time of the execution of the contract, were as stated by plaintiff and the several interveners herein, and that the provision of the contract was for the protection of those creditors; that they were then and had always been willing to pay said note to the payee therein or any legal holder thereof, upon the payment of the creditors, as provided for in the contract. They allege that without their knowledge or consent the defendants transferred it to G. W. Barcus. They fully, in their pleading, recognized their obligation under the contract and note. The several creditors named in the plaintiff’s petition also filed what is termed in the record separately pleas of intervention, setting up their indebtedness against the Warren Hardware Company, and claiming the right to .participate in the trust funds. Morrow Thomas Hardware Company, in addition to setting up their note against the company, also alleged that since the execution of the contract they had obtained a personal judgment against the partnership of Warren Hardware Company, or had reduced their claim to a judgment. One or two other of the creditors changed the form of their indebtedness from account to note, signed by the partnership.

The court, upon hearing the case, rendered judgment for the amount of $4,000 and ascertained the indebtedness due each of the creditors by Warren Hardware Company, together with interest, up to the date of the juagment, and decreed that they be paid their proportional amount out of the judgment so recovered against Walker & Perkins, rendering judgment against Barcus and M. W. Warren. The facts are sufficient to show that Barcus purchased the note after maturity or came into possession of it at that time with full knowledge of the trust alleged in the petition. The facts sustain all the material allegations of the plaintiff’s petition. Barcus set up, by his answer, purchase of the note before maturity without notice; filing several exceptions to the various pleas of the diffei'-ent parties.

Assignments 1 and 2 assail the action of the court in overruling a general exception to the petition by Barcus, and what he tenns a “special exception,” but which in fact is only a general one to the appellee Parlin-Orendorff Implement Company’s petition, on the ground that the cause of action was barred by the statute of limitation. From the statement it will be seen the $4,000 note was executed to M. W. Wanren and O. W. Warren, by Walker & Perkins, in pursuance to a written contract upon the sale and purchase of a stock of goods and as part of the consideration thereror paid by Walker ■& Perkins. The original petition made M. W. Warren a party, but he was dismissed upon the rendition of a former judgment, and this court reversed that judgment because he and the members composing the Warren Hardware Company were not made parties, holding that all the creditors of the firm for whose benefit the notei was executed should be parties. Afterwards the amendment upon which .trial was had was filed, bringing in all the parties. At that time the debt due Parlin-Orendorff Company by the Warren Hardware Company was barred by the four years’ statute of limitation. This suit, it will be perceived, is to establish plaintiff’s and interveners’ interest in the note in the nature of a trust, and to charge M. W. Warren and ,G. W. Barcus as trustees of the same, and to establish liability of Walker & Perkins on the note so executed by them for the benefit of plaintiff and interven-ers, in the proportion of their l'espective debts.

It seems to be the contention of appellant, because the Warren Hardware Company could have pleaded the bar of the statute to Pai-lin-Orendorff Implement Company, that therefore the whole cause should fall. The other creditors’ debts were not barred, and as to them the exception should not have been sustained. There were no special exceptions as to the cause of action asserted by Parlin-Orendorff Company further than; that it showed that the cause of action was barred. There was therefore no error in overruling the exceptions. We will state at this time that the judgment of tire court did not render a judgment in favor of Parlin-Orendorff Implement Cbmpany against the Warren Hardware Company, authorizing the issuance of an execution to satisfy their debt, but only ascertained the amount of the debt that was due them at the time the contract set out was executed, and for the purpose of getting their proportional part thereof.

■[2] It is not'contended that the $4,000 note was barred. If the written contract had the effect to constitute such note a trust fund to pay Parlin-Orendorff Implement Company’s debt, then certainly that company’s action to enforce the trust was not barred. The contract and note amounted to an assignment of the note pro tanto to Parlin-Orendorff Implement Company, and that company had that much interest ini the note, for which it had the right to sue. This, we think, would be true whether the Parlin-Orendorff Implement Cbmpany couldi have maintained a suit on the debt due it by the Warren Hardware Company. Our Supreme Court has held, in discussing the right to sell by a trustee with power to sell, under a deed, after the debt was barred, that the statutes of limitation are generally to operate solely upon the remedy in the courts, and not to destroy the debt. Fievel v. Zuber, 67 Tex. 275, 3 S. W. 273; Goldfrank & Co. v. Young, 64 Tex. 432.

A pledgee of property may sell or sue for conversion even though the debt is barred for which it was given to secure. Hudson v. Wilkinson, 61 Tex. 609. In the case last above cited, the debtor placed a wagon and mules under an instrument in writing in the hands of the pledgee to secure a note of the creditor. The debtor afterwards sold the property to another who had knowledge of the trust. The party in whose hands the property was placed brought suit for it against the purchaser thereof. It was held:

“In case of a pledge, the fact that the debt which it was made to secure is barred by the statute of limitation would constitute no defense to an action by the pledgee against another for a wrongful conversion of the property; for the reason that the pledgee has a special property in the pledge, and entitled to its possession until the debt is paid. It is said: ‘The statute simply bars th’e remedy — it does not extinguish the debt. Consequently, where a lien is given upon property for the payment of a claim, whether by contract or by the custom or usage of trade, the lien may be enforced, ah though the remedy upon the debt itself is barred.’ Wood on Limitation of Actions, p. 47, and note.”

In this case one of the original debtors, who was permitted to hold the note as a pledgee to pay plaintiff’s debt, seeks to repudiate hia trust and assert title to the note in himself, and also sought to sell it to another in violation of the trust, and then seeks to defeat the beneficiaries’ right because the debt which was secured thereby has since been barred. The rights in this note under the contract of pledge or trust existed until the debts were paid for which it was executed. A mere bar by the statute does not pay the debt. The debt still exists, and until paid the trust can be enforced.

The third assignment asserts that the special exceptions of Barcus to the pleas of intervention should have been sustained, and by propositions asserts: (1) That the interveners did not allege any fact showing any interest in the $4,000 note; (2) that their only remedy was by garnishment; (3) that there was no allegation in the petition that would authorize a judgment against Walker & Perkins. The petition shows the note represented $4,000 of the consideration paid for the goods by Walker & Perkins to Warren Hardware Company. This note was executed under the written contract, providing: Eirst, that the Warren Hardware Company guaranteed that all indebtedness or claims whatsoever would be paid; second, they should execute a bill of sale warranting the title against every one and that the goods were clear and free from debt; third, the proceeds of the note being intended and agreed to be applied to the payment of any and all debts or claims until all such debts are fully liquidated and in the event it was insufficient to pay the debts, nevertheless the hardware company agreed to fully pay off and discharge all such claims. There can be no question under this contract but that the $4,000 note represented part of the consideration for the goods; that the parties agreed that the proceeds of the note should be applied to the debts. It was the duty of each of the contracting parties to see that the note or its proceeds should be so appropriated. They both obligated themselves to that effect; but one of the payees in the note, after getting the note, tried to repudiate this trust and divert the proceeds of the note to one of its members, and he to his son-in-law, Barcus, who, with full knowledge of the trust, claimed to have purchased it. These interveners allege, and in fact prove beyond any question, that they were the creditors of the hardware company, and were the parties intended to be secured by the note. They adopted fully the pleadings of the plaintiff and set up their own claim. Even though they may not have known of the trust at the time of its creation, they had a right thereafter to affirm it and to enforce it in their favor. Wallis v. Beauchamp, 15 Tex. 304; Ellis v. National Exchange Bank, 38 Tex. Civ. App. 619, 86 S. W. 776. When they affirmed the trust, they were no longer simple contract creditors, but had a lien or trust created in their favor by the vendors and vendees in the sale of the goods. They had the right to go into court and enforce that lien or trust and share in the proceeds pro rata, whether as original parties to the suit or as interveners.

The allegation that Walker & Perkins executed the note and signed the contract, agreeing to be liable for that amount, authorized a judgment against them for that amount, directing payment of the debts proportionately out of the proceeds of the note established by the judgment for which an execution could issue. By the terms of the agreement,'$4,000 of the purchase price for the consideration of the stock of goods evidenced by the note, payable to the order of M. W. and O. W. Warren, was a trust fund to pay “any and all indebtedness or claims which may be owing for or against an.y of the property” so purchased. And the plaintiff and! interveners were entitled to a judgment for their proportional amount on their claims or debts. Ellis v. National Exchange Bank, supra; Foy v. East Dallas Bank, 28 S. W. 137. Where the trustee of bailee seeks to repudiate the trust, the beneficiaries may sue to enforce the trust. Bank v. Wheeler, 33 W. 1093; Silliman v. Gano, 90 Tex. 637, 39 S. W. 559, 40 S. W. 391; Kennedy v. Baker, 59 Tex. 150; Peters Shoe Co. v. Murray, 31 Tex. Civ. App. 259, 71 S. W. 977.

It is asserted the sale violated the Bulk Sale Law (Acts 31st Leg. c. 27 [Vernon’s Sayles’ Ann. CSv. St. 1914, arts. 3971-3973]). That law simply provides a bulk sale shall be void as against creditors. Certainly it was not void as between Walker & Perkins and the Warren Hardware Company. Barcus was not a creditor, and he should not claim the contract void and at the same time assert a claim of right under it. M. W. Warren was a member of the hardware company, and in fact received the consideration of the sale of the goods; that is, the land was deeded to him, and he claims to have received the note in question. The vendors and vendees certainly would be estopped from setting up their illegal acts to defeat just debts which both had agreed to pay and made provisions to pay out of the consideration for the sale. The creditors, by affirming the contract, made it their own, and would be estop-ped from setting up that it was originally illegal. They might have done so before affirming the contract, perhaps, in which case there would have been no lien or trust fund created, and they could have treated Walker <S5 Perkins as trustees under the Bulk Sales Law, and garnisheed them to secure a lien; but there was no need of fixing a lien or trust by attachment or garnishment when the contract fixed it and the vendors and vendees, as well as the creditors, assented to the trust so created. All that the parties were required to do was to execute the trust, and, if the trustees sought to repudiate it, the beneficiaries had the right to resort to the courts jointly to enforce it and prevent the repudiation.

There are assignments to the effect that Morrow-Thomas Hardware Company, having reduced its debt to judgment after the trust was created, elected to pursue a different remedy. We do not think so. The judgment is simply another evidence of the same debt secured by the note in question, and evidences the fact that the debt was unpaid, etc.

It is also asserted that some of the other creditors, after the contract in this case, evidenced their debt by taking notes, and that this was a waiver or an election not to rely_ upon the trust. The debt secured by the contract it is not asserted was paid, and the only effect of taking the notes was to evidence the debt by the note and only had the effect to postpone payment of the debt. There is no element of election of remedies or a waiver in either of these instances in our judgment. It .only aided to keep the debts alive and prevented the bar to run against them.

It is also asserted that taking the notes with interest, and rendering judgment that the $4,000 note be prorated on such basis, would be a wrong to Barcus, in that he was entitled to the residue after paying the original debts. The evidence establishes that he came into possession of the note after it was due and had full knowledge of the facts, or was in possession of facts sufficient to warrant the finding that he had such knowledge or notice. We think his ease presents no equity.

Barcus also complains that the evidence shows that the note was, at the time of the trial, in possession and held by his sister-in-law, Mrs. Gratland. The facts show, if she in fact bought the note or was in possession of the note, she did so long after this suit was instituted and long after the maturity of the note. She was a pendente lite purchaser, and lis pendens applies as to her.

It is also asserted that the court should not have admitted testimony as to what creditors were to be paid out of the note at the time of the making of the contract. It is asserted that this evidence varied the terms of the contract. On the contrary, the proof of who the creditors were falls under the very terms of the contract. It identified them. This is permissible in contracts of this character with like terms. The evidence in this case is amply sufficient to show that the judgment was properly rendered for the plaintiff and interveners, who were the creditors contemplated by the contract at the time of its execution. Barcus nor Warren, nor either of them are innocent purchasers of the note, as is' fully shown by' the evidence. '

It would be a useless waste of time to review each and all of the assignments, ¡and it will be sufficient to overrule them generally. Tlie assignments based on the exceptions as discussed by us give our view of the law governing this case, and the allegations of the petition and the pleas of intervention are amply and fully proved.

The judgment will be affirmed.
      ig=>For other oases see same topic and KEY-NUMBER in. all Key-Numbered Digests and Indexes

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


source: Caselaw Access Project

author: HODGES, J.

license: Public Domain

text:
    WESTERN UNION TELEGRAPH CO. v. ARMSTRONG.
    (No. 2017.)
    (Court of Civil Appeals of Texas. Texarkana.
    Nov. 13, 1918.
    Rehearing Denied Nov. 14, 1918.)
    1. Commerce @=>28 — Negligent Delivery of Message — What Law Governs.
    Where a telegram was sent from another state into Texas, and through the negligence of the office in Texas was not delivered, the measure of damages is governed by the state decisions and not the federal decisions, and mental anguish is an element of actual damage.
    2. Appeal and Error @=>1056(3) — Harmless Err or — E vidence — Exclusion .
    Exclusion of evidence which has no probative force is immaterial and harmless.
    3. Telegraphs and TSelephones @==>54(7), 66 (1) — Liability op Telegraph Company-Limitation op Liability.
    Those who deal with telegraph corporations are entitled, if they insist upon it, to have their v messages transmitted and delivered free from ■aU-conditions or limitations, except those imposed by the law of the land, and, when a surrender of any part of that right is claimed, the telegraph company must be able to establish a valid agreement to that effect.
    4. Telegraphs and Telephones @=>54(7)— Liability op Company Conditions— Rules.
    A rule ■ of a telegraph company that telegrams should be written on certain forms, and the stipulations on the back of such forms, were not binding on the sender of a telegram, having no knowledge thereof, who telephoned a message, 'although the agent recorded the message upon one of such blanks.
    5. Pleading @=>291(1) — Reply — Written Contract — Verification.
    Where the sender of a telegram 'telephoned the message and the telegraph agent, without the sender’s knowledge, wrote it upon one of its forms, a verified reply denying the execution of a written contract by the sender was not necessary.
    6. Telegraphs and Telephones @=>71— Mental Suffering — Excessive Damages.
    Verdict of $1,250.64 for mental suffering resulting from being deprived of opportunity to be with and nurse a sister during her last illness and to be present at the burial was excessive, and will be reduced to $500.
    Appeal from District Court, Titus County; J. A. Ward, Judge.
    Action by Mrs. Lula Armstrong against the Western Union Telegraph Company. Judgment for plaintiff, and defendant appeals.
    Affirmed on condition of remittitur.
    Chas. S. Todd, of Texarkana, and Albert T. Benedict, of New York City, for appellant.
    Wilkinson & Davidson, of Mt. Vernon, T. C. Hutchings, of Mt. (Pleasant, and J. F. Wilkinson, of Austin, for appellee.
   HODGES, J.

This appeal is from a judgment in favor of the appellee for the sum of $1,250.64 as damages for mental suffering due to the negligent failure of the appellant to deliver a telegram notifying her of the serious illness of her sister. 'There is little, if any, dispute about the facts. On February 8, 1916, J. L. Landers sent the following message from Normandy, Tenn., to the appellee at Mt. Pleasant, Tex.:

“To Mrs. Lilla Armstrong, Mt. Pleasant, Texas. Like for you to come if possibly can. Had Sister operated on Tuesday. Mother has given out and cannot wait on her any longer. Three gallons of water from her system today.”

Landers was a brother, and the “Sister” referred to in the message was a sister of the appellee. The message was received at Mt. Pleasant, but, because of conduct which is admitted to be negligent, was not delivered till several days after appellee’s sister died and was buried.

By appropriate assignments the appellant presents the same ‘general propositions involved and discussed in Telegraph Co. v. Bailey, 184 S. W. 519; s. c., 108 Tex. 427, 196 S. W. 516; and Telegraph Co. v. Brown, 202 S. W. 1049. That defense was based upon the fact that, this being an interstate message, the measure of damages was governed by the federal decisions, and mental anguish should not be allowed as an element of actual damage. It is unnecessary to add more to what has heretofore been said on those subjects, and the cases above cited are referred to as authority for overruling that group of assignments.

Among other defenses relied upon 'was the failure of the appellee to present her claim for damages within 95 days after her cause of action arose. Appellant pleaded specially that it had adopted a rule requiring each message for transmission to be written upon a form provided by it for that purpose, or that the message should be attached to that form by the sender or his agent so as to leave the printed heading in full view above the message. Upon the trial of this case it offered in evidence a copy of that rule. It also offered in evidence the following stipulation printed on the back of its blank forms:

“Clause 6. The company shall not be liable for damages, or for statutory penalties, in any case where the claim is not presented in writing within ninety-five days after the cause of action, if any, shall have arisen.”

The rule was excluded upon the ground that there was no evidence that it had been filed with the Interstate Commerce Commission. The printed stipulation on the blank form was excluded upon the ground that it was not binding upon the appellee.

The testimony offered by the appellee, and which was not disputed, shows that J. L. Landers, the sender of the message, lived at Normandy, a small town in Tennessee, which was without any telegraph office. It was the custom of people living at Normandy, when desiring to send telegraphic messages, to phone them to the appellant’s office at Shel-byville, a short distance .away and in the same state. On February 8th Landers called the appellant’s agent at Shelbyville over the telephone and communicated orally the message hereinbefore quoted. The agent accepted the message and agreed to transmit it. No written memorandum was made by Lan-ders, nor was there any mention by either Landers or the agent of such memorandum. Landers testified, without contradiction, that he did not know of any rule adopted by the telegraph company requiring their blanks to be used on such occasions, and did not know whether the agent subsequently used one; neither did he know that the telegraph blanks used by the appellant had printed on them stipulations such as the clause offered in evidence.

The evident purpose of the testimony excluded was to establish the fact that the parties to the message were bound by the contractual stipulation requiring the claim for damages to be presented within 95 days after the cause of action arose. While the particular objections urged, to the introduction of the rule requiring the use of appellant’s blanks may have been insufficient to justify its exclusion, the error is immaterial and harmless if. the testimony had no probative force. If it did not, then there is no good reason for reversing this case in order to permit the introduction of testimony valueless when admitted, or which may be excluded upon other grounds. Let us concede that the appellant had adopted a rule requiring its blank forms to be used in receiving messages for transmission. The evidence in this case shows that none was used or authorized to be used by the sender on that occasion. The adoption of the rule when proved could only be regarded as a circumstance tending to show that appellant’s agent at Shelbyville, after receiving the message over the telephone, may have recorded it upon one of appellant’s blanks on the back of which was the printed stipulation relied upon in this case. Assuming that the agent did this, was that act sufficient to bind the opposite party to the terms of a stipulation of which he was entirely ignorant? A telegraph company cannot escape the legal consequences of its misconduct without the consent of the injured party. A liability which the law imposes upon it remains till it is voluntarily released by the person with whom the company is dealing. If in advance of the transmission of a message the telegraph company desires to secure concessions which relieve it of any part of the legal consequences of a breach of duty, or which bind the other party to a course of procedure different from that prescribed by law and more favorable to the telegraph-company, there must be a valid contract to that éffect. The making of contracts with telegraph companies is in all material respects governed by the same rules that control the making of contracts generally. The stipulations and terms must be knowingly and voluntarily agreed to by the party they undertake to bind. It is true that telegraph companies, as public service corporations, have the right to adopt and enforce reasonable rules for the regulation of their dealings with the public; but this does not include the power to indirectly compel the sen--ders of messages, and pother beneficiaries, to surrender any part of their legal rights in claims for damages resulting from a breach of duty. Telegraph companies cannot, under the guise of exercising a rule-making power, secure an immunity which only a contract can give. They will not be permitted to adopt a rule requiring all messages tendered for transmission to be written upon their blank forms, and then provide as their only forms those which contain printed stipulations imposing conditions and limitations upon the liability of the company. Those who deal with such corporations are entitled, if they insist upon it, to have their messages transmitted and delivered free from all conditions or limitations except those imposed by the law of the land. When a surrender of any part of that right is claimed, the telegraph company must be able to establish a valid agreement to that effect.

If in this case the court had admitted in evidence the rule and the printed stipulation offered, the evidence would not have made out the defense for which it was intended. The important question before the court was, not what the telegraph company did under its rule-making power, but what the-parties to the contract agreed to at the time this message was sent. The appellant offered no other evidence tending to show that the message was reduced to writing in any form or upon any character of blank. It may be, and doubtless is, correct to say that one who voluntarily uses, without objection, a telegraphic blank which bears upon its face notice that the message is sent subject to the conditions and stipulations appearing on the back, is chargeable with a knowledge of those conditions and stipulations, and, in tlie absence of some express dissent, becomes bound by them; but it does not follow that one who delivers an oral message to an agent of the telegraph company can be obligated to those conditions by the unauthorized act of such agent in recording the message upon one of those blanks for convenience in transmission. In this instance, when the appellant’s agent at Shelbyville accepted the oral message from Landers over the telephone the contract between Landers and the appellant was completed, and it is of no consequence what the agent thereafter did without the knowledge or the consent of Landers.

Counsel for appellant insists that, in the absence of a verified reply denying the execution of a written contract by Landers, its defense founded upon that issue could not be attacked. The rule invoked applies only to written contracts, and in this case no written contract was replied upon by the appellee, nor was any offered in evidence by the appellant. Hence the objection is untenable.

It is also urged that the verdict in this case is excessive. It appears from the testimony that the only injury sustained by Mrs. Armstrong was the mental suffering resulting from being deprived of the opportunity to be with and nurse her sister during the latter’s last illness and to be present' at the burial. While our courts recognize that such injuries constitute the basis for actual damages, they have never adopted any rule by which to determine its measure other than the reasonable estimate of the trial court or the jury. We are of the opinion, however, that the verdict in this case transcends the limits usually allowed in such instances as compensation for mental suffering. We think a verdict for $500 would, under the circumstances, be sufficient.

If the appellee should within 20 days from this date file in this court a remittitur of $750.64, the judgment will be affirmed. Otherwise, it will be reversed, and the cause remanded for another trial.
      <§=>For other cases see same topio and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HARPER, C. J. HIGGINS, J. HARPER, C. J.

text:
    STEWART & THREADGILL v. EL PASO & S. W. CO. et al.
    (No. 886.)
    (Court of Civil Appeals of Texas. El Paso.
    Nov. 21, 1918.
    On Rehearing, Dec. 18, 1918.
    Further Rehearing Denied Jan. 9, 1919.)
    Appeal and Error <⅜=>1071(6) — Failure to File Conclusions op Fact and Law — Con-plicting Evidence — Reversal. ' ■
    In shipper’s action involving issues as to whether two railroads were negligent in handling shipment of live stock, whether shipper was damaged thereby and amount of any -damage, where the evidence was conflicting and the court, sitting without a jury, dismissed one defendant and found for the other, its failure to file its findings of fact and conclusions of law, after due request, under Rev. St. 1911, art. 2075, prevented appellant from fairly presenting the appeal, and was ground for reversal.
    Appeal from District Court, El Paso County; p. R. Price, Judge.
    Suit by Stewart & Threadgill against the El Paso & Southwestern Company and the Galveston, Harrisburg & San Antonio Railway Company. Judgment by the court, sitting without a jury, dismissing the El Paso & Southwestern Railway Company from the suit, and in favor of the Galveston, Harrisburg & San Antonio (Railway Company, and plaintiffs appeal.
    Reversed and remanded.
    Jackson & Isaacks, of El Paso, for appellants.
    Beall, Kemp & Nagle, of El Paso, Baker, Botts, Parker & Garwood, of Houston, and W. A. Hawkins, of El Paso, for appellees.
   HARPER, C. J.

This was a suit brought by appellants, Stewart & Threadgill, a co-partnership composed of J. F. Stewart and W. W>. Threadgill, against the El Paso & Southwestern Company and the Galveston, Harrisburg & San Antonio Railway Company, appellees, in which the appellants sought damages of the appellees for alleged negligence in the shipment of about 2,000 head of goats from Turquoise, N. M., to Del Rio, Tex., over the railway of the appel-lees, the appellants alleging that, on account of the delays and other negligence of the appellees, the goats were injured, and the, appellants thereby damaged in the sum of $2,-500. The appellee El Paso & Southwestern Railway Company answered by general demurrer and general denial. The appellee Galveston, Harrisburg & San Antonio Railway Company, by their first amended original answer, answered by general demurrer and general denial and a special plea that the shipment was an interstate shipment, and under the terms of the bill of lading appellants valued their goats at $3 per head, and thereby secured lower rates than they would have secured, and that appellants were estopped from claiming a greater value of said goats. The case was tried before the court without a jury, and on December 26, 1917, the court rendered judgment, dismissing the appellee El Paso & Southwestern Railway Company from the suit, which order of dismissal was entered nunc pro tunc on January 26, 1918, and on January 4, 1918, rendered judgment in favor of the appellee Galveston, Harrisburg & San Antonio Railway Company, from which judgments the appellants, Stewart & Threadgill, have appealed.

We are asked to reverse this judgment upon the sole ground that the trial court failed to file its findings of fact and conclusions of law upon proper and seasonable request, having been filed as provided by article 2075, Revised Civil Statutes of Texas of 1911. It will be noted from the statement of the nature of the case that for plaintiff to recover there were only two questions of fact to be determined by the trial court, viz. was the railroad company negligent in handling the goats? and were they injured or damaged by reason of such negligence? The judgment entered is equivalent to findings upon both in favor of defendant, and the law applicable followed in due course. We note also that a motion for a new trial was filed in which the sole point is urged that under the evidence the trial court should have found for the plaintiff. We further note that a statement of facts was prepared and filed and brought into this court with the record, and it is properly certified to by the trial judge. It is further noted that appellant’s counsel refused to agree upon a statement of facts solely upon the ground that the court had failed to make and file findings of fact and conclusions of law, and that there is no contention upon the part of appellant that the statement of facts is not full and complete, and it may be further, noted that by the assignments of error filed in the trial court the sole point raised, aside from the failure to file findings of fact and conclusions of law, is that the judgment of the court is contrary to the law and the facts. There is no suggestion in the brief of appellants that they have been prejudiced by the failure to file findings of fact and conclusions of law, and we think the record before us conclusively shows that no other assignment of error could have been made had the findings been made. Therefore, adopting the reasoning of Chief Justice Conner in his dissenting opinion in Emery v. Barfield, 156 S. W. 311, confirmed by the opinion of the Supreme Court, 107 Tex. 306, 177 S. W. 952, we hold that:

“It does not appear that the omission of the trial judge to duly file his conclusions has prevented a proper presentation of the questions involved in this appeal, nor has it operated to the prejudice of appellants in presenting their appeal. It does not therefore, in itself, warrant a reversal of the judgment.” Rule 62a (149 S. W. x).

Affirmed.

HIGGINS, J.

(concurring). The record discloses that judgment against appellants was rendered January 4,1918. Assignments of error, containing a number of specifications, were filed March 18,1918. Appellants filed the transcript in this court on March 25, 1918. Thereafter, and in due time, appellee filed its motion in this court for permission to file the.statement of facts, which was granted, and the statement was filed. Attorneys for appellants declined to agree to same, and it w;as prepared by the trial court. Upon its face it appears to be fair and complete, and there is nothing to indicate the contrary. Appellants’ brief was filed long subsequent to the filing of the transcript and statement of facts. The sole ground of error presented in the brief is the failure to file the findings of fact and conclusions of law. The issues in this case are few and simple, and upon the facts reflected by the pleadings and evidence, I see no reason why appellants could not have properly presented all of the assignments which they filed in the lower court, and had the merits of their appeal decided, notwithstanding the failure of the trial court to file findings and conclusions.

Where the record discloses that appellants have been deprived of no substantial right by the failure of the trial court to file his findings and conclusions, and has not been thereby prevented from making a fair presentation of the merits of his appeal, I think it clear, upon the authorities cited in the opinion of the Chief Justice, that there should be no reversal by reason alone of such failure. I attach no importance to the fact that the statement of facts was not an agreed one. If it was fair and complete, that is all appellants have a right to expect of any statement of facts.

I do not desire to be understood as holding that trial courts are at liberty, at will, to disregard the plain provisions of article 1989 and deprive litigants of the right therein granted. I merely hold that in this particular case appellants were not deprived of any substantial right by the omission of the trial court, and are therefore not entitled to a reversal.

For this redson, I concur in the affirmance.

On Rehearing.

HARPER, C. J.

Upon consideration of appellants’ motion for rehearing, the conclusion is reached that we erred in affirming this case, and that same should be reversed on account of the failure of the trial court to file its findings of fact and conclusions of law, as requested by appellants.

Judge Conner’s dissenting opinion in Emery v. Barfield, 156 S. W. 311, approved by the Supreme Court (107 Tex. 306, 177 S. W. 952), was cited in support of the conclusion that the failure to file these findings upon the record presented in the instant case did not necessitate a reversal. In Peers v. Williams, 174 S. W. 864, an appeal was presented upon an agreed statement of facts. The trial court, however, had failed to file findings of fact and conclusions of law as requested by appellant. The case was reversed solely on account of this failure in an opinion likewise written by Chief Justice Conner. Discussing the matter, Judge Conner says:

“Possibly the able Judge who tried the case deemed it immaterial to so file his conclusions, in view of a line of decisions of our courts holding that a failure to comply with the statute by filing conclusions when seasonably requested is not a sufficient ground to cause a reversal of a judgment on appeal where, as in this case, there is a statement of facts. See Jacobs v. Nussbaum [63 Tex. Civ. App. 520] 133 S. W. 484; Sutherland v. Kirkland, 134 S. W. 851. But these cases proceed upon the assumption that the facts were substantially undisputed, and that therefrom it affirmatively appeared that the failure was without probable harm, the court in each instance practically applying the principle now embodied in rule 62a (149 S. W. x), which provides that: ‘No judgment shall be reversed on appeal and. a new trial ordered in any cause on the ground that the trial court has committed an error of law in the course of the trial, unless the appellate court shall be of opinion that the error complained of amounted to such a denial of the rights of the appellant as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case, or was such as probably prevented the appellant from making a proper presentation of the case to the appellate court.’
“None of these cases go so far as to hold that it is not error to fail to file conclusions when properly requested, and it will be found, we think, to be substantially the uniform rule to reverse the judgment in case of such failure where there is no statement of facts or where the evidence, exhibited in the statement is conflicting. See Wandry v. Williams, 103 Tex. 91, 124 S. W. 85; Wood v. Smith, 141 S. W. 795; Shepherd & Davenport v. McEvoy, 144 S. W. 285; Kyle v. Blanchette, 158 S. W. 796.
“In the case now before us the evidence indicates several possible theories for appellee's recovery, none of which is free from difficulty. For instance, it may possibly be contended that the 120 bales of cotton burned in fact weighed more than is shown by the gin weights at Myra, for which excess appellant should, account under the terms of the original agreement between the parties, or it may be contended that, regardless of the issue of an excess, appellant should account to appellee for money had and received under the terms of the agreement, if any, with the railway company’s claim agent. But these are mere conjectures. It cannot be said to be clear that appellee was entitled to recover upon either theory suggested, and the very least that may be said of the testimony is that it is conflicting, and appellant under the law has a clear light to have the conflict determined in a court having original jurisdiction for the determination of conflicting evidence; this court having no such power.
“In accordance with the authorities cited, it is ordered that the judgment be reversed and the cause be remanded.”

As is thus pointed out, all of the cases, apparently, where a judgment has been affirmed, notwithstanding the failure of the trial court to file findings and conclusions, proceeded upon the assumption that the facts upon the material issues in the case were substantially undisputed, and that it therefore affirmatively appears the failure was without probable harm.

In the ease at bar, there were three issues of fact presented, viz.: Was the railroad company negligent in handling the animals? Were they damaged by reason of any such negligence? And, if so, the amount of such damage. Upon each of these issues, the evidence was conflicting. This court is unable to determine what the finding of the trial court was in respect to these several issues. The trial court may have found that the company was negligent, but that the dnimals had not been damaged, or its findings may have been vice versa. Or it may be that the court found all of these issues of fact in favor of the appellants, but may have deduced an incorrect legal conclusion. We are without any information as to the basis of the court’s action in rendering judgment for the defendant. In this condition of the record, we are now of the opinion that we erred in holding that the failure of the trial court did not prevent appellants from making a fair presentation of their appeal. It may be that had the court filed the findings and conclusions, the appellants would not have been able to show any reversible error, but we cannot so presume. In support of the conclusion now reached, see the following authorities: Schofield v. Bank, 175 S. W. 506; Overton v. K. of P., 173 S. W. 472; Broderick v. Brick Co., 150 S. W. 600; Poulter v. Smith, 149 S. W. 279; Owen v. Smith, 203 S. W. 1171; Bloch v. Bloch, 190 S. W. 528; Guadalupe County v. Poth, 153 S. W. 919; Railway Co. v. Dairy Co., 137 S. W. 137; Sutherland v. Kirkland, 134 S. W. 851.

The motion for rehearing is granted, and the cause now reversed and remanded.
      <S=5>Por other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: LEVY, J.

text:
    COMMERCIAL CREDIT CO. v. GILES.
    (No. 1983.)
    (Court of Civil Appeals of Texas. Texarkana.
    Nov. 2, 1918.)
    1. Alteration op Instruments 12-Notes Given as Part op Order — Separation' by Payee — Authority.
    A contract order for the purchase of goods payable by a series of negotiable notes; providing that the payee might detach the notes from the order, being consistent, contemporaneous agreement, authorized the payee to detach the notes.
    2. Bills and Notes <©==>47 — Notes Attached to Order por Goods — Construction.
    A mere recital in a contract order that the purchase price of the goods might be paid in notes attached thereto did not make the payer’s obligation a conditional one.

      3. Alteration of Instruments 16— “Material Alteration” — Effect.
    Any material alteration of an instrument destroys its obligation and renders it unenforceable, and any alteration causing the instrument to speak differently in legal effect from that which it spoke originally is a “material alteration.”
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Material Alteration.]
    4. Alteration of Instruments ⅞^9 — Detaching Note from Contract Order — Materiality.
    The payee’s detachment of a series of negotiable notes from a contract order permitting their detachment was not a material alteration rendering the notes void.
    5. Bills and Notes <S=>365(1) — Liability of Maker — Innocent Holder.
    The maker Of negotiable notes attached to a contract order permitting their detachment by the payee would be liable to an innocent holder even though the order contract and notes were revoked in the hands of the payee and it could not maintain an action thereon against the maker.
    6. Bills and Notes <§=>363 — Action on N ote — Consideration—Recovery.
    In action on notes originally attached to a contract order and detached by the payee, as permitted by the order, and sold to plaintiff, an innocent holder, for 76 per cent, of the face of the notes until the remainder should be paid by the maker, the holder’s recovery should be limited to 76 per cent, of the face of the notes.
    Appeal from Fannin County Court; S. F. Leslie, Judge.
    Action by the Commercial Credit Company against Ellis Giles. Judgment for defendant, and plaintiff appeals.
    Reversed, and judgment rendered for plaintiff.
    The appellant, a corporation, sued the ap-pellee on a promissory note signed by him and made payable to the order of the Partin Manufacturing Company. The appellant claimed that it was an innocent purchaser of the noto in due course of trade, before maturity, and for value. The appellee answered by denial, and pleaded a material alteration of the note, failure of the consideration, cancellation, and fraudulent circulation of the same by the Partin Manufacturing Company, and notice to the appellant before institution of the suit that the note was fraudulent, without consideration, and void, and appellee would not pay it. The appellant made reply that he was an innocent purchaser, and with a plea of estoppel. There was a trial before the court without a jury, and judgment was entered in favor of the appellee.
    The court made findings of fact, here adopted, substantially as follows: That on April 13, 1916, the appellee executed a written order to the Partin Manufacturing Company, having its general office at Memphis, Tenn., for certain merchandise to be delivered to him at Leonard, Tex. The order further contained an agreement on the part of the Partin Manufacturing Company to deliver the goods and to provide certain printed and advertising matter intended to increase the sales of the appellee, a merchant, and to guarantee an increase in the sales and collections of ap-pellee to the amount of $10,000 in the next 12 months, and to pay 9 cents on every dollar that the appellee fell short of that amount of increase. It was provided:
    “3. Terms: All the above-named goods to be included in the purchase price of $900.00 Three per cent, off cash in ten days. By special agreement the above can be paid in six installments of one hundred and fifty dollars ($150.00) each, in three, four, five, six, seven and eight months if the notes attached hereto properly signed accompany this order. The attached notes are executed and tendered in settlement of this order, and Partin Mfg. Co. is authorized to detach same on acceptance of this order. If order is not accepted notes are to be canceled and returned to purchaser.
    “4. In consideration of the special method set forth in your plan and the terms and agreement herein contained, this order cannot be countermanded, but to stand as given on day and date hereof. Any verbal or written agreement not embraced herein will not be binding on Partin Mfg. Co. This order is given with a •full and complete understanding of the conditions herein and after reading same.”
    Following after the signature of the appel-lee, and on the same sheet of paper containing the above order and agreement, was the note sued on and five others of the same denomination signed by the appellee and payable to the order of the Partin Manufacturing Company in three, four, five, six, seven, and eight months, respectively, after date. All of the notes bear date of April 13, 1916. At the time the notes were signed by the appel-lee, they were all contained on one sheet of paper, and there were no lines nor perforar tions between said notes; but the order and the agreement and the notes were all on the same sheet of paper. The order and agreement and the notes were signed by the appel-lee with the understanding that they were to be forwarded to the Partin Manufacturing Company at Memphis, Tenn., by its salesman then present at Leonard, Tex., for acceptance or rejection. But the appellee countermanded and revoked the order and agreement before acceptance by the Partin Manufacturing Company of said order and agreement and notes. The court further finds:
    “That after said contract and said notes were placed in the hands of the Partin Manufacturing Company, and after the Partin Manufacturing Company had notice of the cancellation of said contract and notes by said defendant Ellis Giles, said Partin Manufacturing Company cut said notes from the sheet of paper in which they were printed so as to separate the,notes from each other and from the contract to which they were attached, and Partin Manufacturing Company fraudulently circulated the note sued on.
    “That after said notes were so detached, and prior to the maturity of same or any of same, said Partin Manufacturing Oompany negotiated the note sued on to the Commercial Credit Company for a valuable consideration, said Commercial Credit Company not having any actual notice of any defect or vice in said notes, said Partin Manufacturing Company guaranteeing the payment of said note and endorsing the same over to said Commercial Credit Company.
    “That Partin Manufacturing Company and the plaintiff are both corporations, duly incorporated, and neither of such corporations having a domicile in the state of Texas. That defendant prior to the institution of this suit gave notice to plaintiff that he would not pay the note sued on for the reason that the same was fraudulent and without consideration. That said Partin Manufacturing Company is solvent. That said Commercial Credit Company during the year 1916 purchased three batches of notes from the Partin Manufacturing Company as follows: Approximately $10,000.-00 on April 3, 1916, another lot of about $11.-000.00 on April 24, 1916, approximately $15,-000.00 on May 2, 1916, the notes of Ellis Giles, including the ones sued on, being included in the last transaction. Of the first lot of paper purchased as aforesaid, 81 per cent, has been paid prior to the 19th day of September, 1917, of the paper purchased April 24, 1916, which included the note sued on, 61 per cent, has been paid prior to September 19, 1917. All of the paper sold by the Partin Manufacturing Company to said Commercial Credit Company was disposed of on the following terms and conditions: 76 per cent, of the amount of said notes were paid in cash by said Commercial Credit Company, and the balance of 24 per cent, being withheld by said Commercial Credit Company to be paid to the Partin Manufacturing Company only upon payment to the Commercial Credit Company of the face amount of the notes purchased from it. I further find that no payments further than the said 76 per cent, has ever been paid.”
    Thos. P. Steger, of Bonham, and J. G. Mc-Grady, of El Paso, for appellant.
    Cunningham & McMahon, of Bonham, for appellee.
   LEVY, J.

(after stating the facts as above). Although it was determined as a fact that the appellant purchased the note before maturity, for a valuable consideration, without notice of a fraud, the court concluded, as a matter of law, that the detachment and separation of the note sued on were void, and that the appellant was not entitled to have judgment against the appellee, who was the maker of the note. Appellant challenges this conclusion and asks the reversal of this judgment of the court. There does not appear any erasure or addition or subtraction of terms of the notes. The facts relied on to show alteration are only that the notes were cut and detached from the same piece of paper upon which the order contract was written, and then circulated. The contract order referred to the notes in the following words only:

“3. Terms: All the above-named goods to be included in the purchase price of $900.00. Three per cent, off cash in ten days. By special agreement the above can be paid in six installments of one hundred and fifty dollars ($150.00) each, in three, four, five, six, seven and eight months if the notes attached hereto properly signed accompany this order. The attached notes are executed and tendered in settlement of this order, anS Partin Mfg. Co. is authorized to detach same on acceptance of this order. If the order is not accepted notes are to be canceled and returned to purchaser.”
The notes are worded as follows:
“$150.00 P. O. Leonard; State, Texas.
“Date, Apr. 13th, 1916.
“Eight months after date for value received I promise to pay to the order of Partin Manufacturing Oompany, Incorporated, one hundred and fifty dollars ($150.00) at First State Bank, Leonard, Texas. [Signed] Ellis Giles.”

It is evident from the face of the contract order that the maker contemplated that the attached notes would, in a certain event, be detached from the contract order; and it appears from the face of the note that it is a negotiable promissory note. The contract order and the notes together appear simply contemporaneous agreements, and with no terms or conditions in the contract order qualifying, varying, or affecting the terms of the notes, and there is no repug-nancy between them. And the separation of the notes from the contract order presented no different situation, either in fact or in legal effect, than, for illustration, had the notes been written upon a distinct and separate sheet of paper and pinned to the order contract. The mere recital in the contract order that the purchase price of the goods can be paid in notes does not make the obligation a conditional one. It is well settled that any material alteration of an instrument destroys the obligation of the contract and renders it unenforceable; and unquestionably any alteration which causes the instrument to speak different, in legal effect, from that which it spoke originally, is a material alteration. 3 Page on Contracts, § 1511; 3 Elliott on Contracts, § 2012. But, on the contrary, if there is no such change in language or meaning, and the legal validity and operation of the instrument, or its apparent regularity, is not affected, then there is not a material alteration rendering the instrument void. 2 Daniel on Negotiable Instruments (5th Ed.) § 1398; 1 R. C. L. par. 4, p. 967; Tutt v. Thornton, 57 Tex. 35. And it is believed the facts of the instant case do not warrant the conclusion of law that there was such material alteration as rendered the notes absolutely void. The case of Spencer v. Triplett, 184 S. W. 712, is, it is thought, distinguishable from this case. There the court stated that: 1

“The note, when construed in connection with the remainder of the contract, was not negotiable.”

This construction implies that the court concluded from the record that the order to the Acme Sales Company contained agreements qualifying the terms of the note. And the authorities cited by the court show that in.the writing there were agreements qualifying the terms of the notes, and that their consequent separation legally affected and changed the liability of the maker of the notes. Therefore the facts therein would amount to an alteration and have that legal effect.

The note not being void upon the contention of alteration, the maker would be liable to an innocent holder, as the court finds the appellant to be, although the order contract and the notes were canceled and revoked in the hands of the Partin Manufacturing Company, and the Partin Manufacturing Company could not maintain an action thereon against the maker. For, as said in Greneaux v. Wheeler, 6 Tex. 515:

“The title is derived from the instrument itself, and not from the title, which the party has who transfers it. The possession of the note gives the holder disposing power over the same. The note passes as a species of currency, without inquiry as to the title of the holder. It is immaterial whether the vendor be an attorney at law, or not; or whether he has obtained it * * * by fraud, by finding, or upon trust. The title of the transferee depends upon the possession of the vendor, but on none of the circumstances under which it was obtained. This possession gives him authority to sell; and if the buyer has acted in good faith, and paid a valuable consideration, his title cannot be impugned.”

Appellee contends the judgment should be affirmed under the authority of Van Winkle Gin & Mach. Co. v. Citizens’ Bank of Buffalo, 89 Tex. 147, 33 S. W. 862. It is believed that the facts here are essentially different, and that the same principle of that ease does pot apply here.

It is concluded that the judgment should be reversed, and that judgment should be here now rendered in favor of the appellant; but, in view of the finding of the court that the appellant paid only 76 per cent, of the face of the note and contracted with the Partin Manufacturing Company not to pay the balance of 24 per cent, until that sum of money was paid over by the maker, a recovery, in the special facts of this case, may be allowed, it is thought, only to the extent of 76 per cent, of the face of the note. The costs of the trial court and of this court will be taxed against the appellee.
      <gcbPor other-cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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


author: HIGGINS, J.

text:
    McKNIGHT v. PECOS & TOYAH LAKE IRR. CO. et al.
    (No. 927.)
    (Court of Civil Appeals of Texas. El Paso.
    Dec. 18, 1918.
    Rehearing Denied Jan. 9, 1919.)
    1. Constitutional Law ©=>80(2) — JtjDicrAL Powers — Delegation—Boaed of Water ENGrNEEBS.
    Acts 35th Leg. c. 88, §§ 105 and 118 (Vernon’s Ann. Civ. St. Supp. 1918, arts. 5011 %f, 5011½?1), in so far as they attempt to confer upon the board of water engineers the power to determine and establish the relative rights of claimants to water, violate Const, art. 2, dividing the powers of government, and article 5, § 1, vesting judicial power exclusively in the courts.
    2. Injunction @=»74 — Officebs — Violation of Constitutional Rights — Boaed of Water Engineers.
    Where the hoard of water engineers is about to exercise power to adjust petitioner’s property rights contrary to his constitutional right to have them adjusted by the courts, he is entitled to injunction.
    Appeal from District Court, Reeves County; Chas. Gibbs, Judge.
    Petition by C. K. McKnight against the Pecos & Toyah Lake Irrigation Company and others to enjoin proceedings before the Board of Water Engineers. Judgment for defendants, and plaintiff appeals.
    Reversed, and judgment rendered granting temporary writ of injunction.
    Howard & Cooke, of Pecos, for appellant. B. F. Looney, Atty. Gen., and C. M. Cure-ton, Asst. Atty. Gen., for appellees.
   HIGGINS, J.

On September 14, 1918, ap--pellant, McKnight, presented to the Honorable C. C. Gibbs, judge of the district court of Reeves county, his petition for a temporary injunction. The petition was presented in vacation and the hearing was ex parte. The petition complained of the Pecos & Toy-ah Lake Irrigation Company, a corporation, and the unknown stockholders and directors thereof, and also of W. T. Potter, C. S. Clark, and John A. Norris, composing the board of water engineers of the state of Texas. A condensed statement of the material allegations of the petition is as follows:

That Potter, Clark, and Norris have issued and published a notice of the holding of a meeting to be held in Ward county, Tex., and in Reeves county, Tex., on the 24th to 26th days of June, 1918, in pursuance of a petition filed with the board by the Pecos & Toyah Lake Irrigation Company, requesting the determination of the rights of various claimants to the waters of the Pecos river, and that they would commence the taking of testimony in' said cause as to the rights of all parties claiming water from' said stream or its tributaries on June 24, 1918, at the courthouse in Ward county, and would continue the taking of said testimony until the 25th day of June, 1918, at 5 p. m., and that they would hold a meeting for the taking of testimony in ‘Reeves county on June 26, 191S; that, in pursuance of said purpose, said board of water engineers promulgated and issued alleged rules of procedure and requirements for adjudication and final determination of all water rights in the state of Texas, which read as follows:

“Rules of Procedure and Requirements of the Board of Water Engineers in re the Adjudication and Pinal Determination of All Water Rights in the State of Texas.
“1. The daily session of the board shall be held in some room or place in the county courthouse of each and every county named in the original order and notice of the board, relative to each respective stream or other source of supply, from 9:00 a. m. to 12:00 m. and from 2:00 p. m. to 5:00 p. m. on each and every day allotted for hearings in each county.
“2. At least one member of the board or the secretary of the board shall be continuously present at the appointed place and time for the purpose of receiving and filing such testimony, records and data as may be presented by each and every claimant of water rights.
“3. The members of the board will make such personal investigations, surveys and measurements and collect such data as, in their judgment, may be necessary for the completion of the record in each case.
“4. All data collected by the board shall be reduced to writing and filed as a part of the record in the case to which it relates.
“5. The data and information collected and filed by the board shall be for the guidance and enlightenment of the board in arriving at a just, equitable and lawful decision on the whole matter, and must not be construed as an act of the board in assisting any claimant to make out his case.
“6. All evidence, testimony and exhibits shall be reduced to writing and filed with the board as a part of the case to which same relates.
“7. No testimony will be taken before the board save and excepting such testimony as the board may; on its own motion, desire to hear, and all such testimony, if any, so taken, shall be reduced to writing and filed as a part of the record of the case to the 'issues of which it is pertinent.
“8. In case the board desires to take the testimony of any witness or witnesses, relative to any claim of right, the board 'will furnish the claimant with the name of such witness or witnesses, and it shall be the duty of such claimant to produce the witness or witnesses before the board, and provide for the taking and transcribing of such testimony without expense to the state.
“9. No oral arguments will be permitted during the period designated for the taking and filing of the statements of claims and testimony of claimants; but a written argument or brief may be filed by the claimant or his attorney at any time prior to the date bn which the final finding of the board is made.
“10. The board will not* permit the. filing of any contest until all the claims and the testimony relating thereto have been filed and taken, and until the time is fixed and notice given, as required by statute, for the inspection and examination of the testimony, and the filing of such contest or contests, if any.
“11. The board will not permit any claimant to file any supplemental. * * * ”

Plaintiff alleged: That he is the owner of a tract of land situate in Reeves county, which is riparian to the Pecos river and abuts upon the stream and is entitled to the use of the water thereof for irrigation purposes. That said land is entitled to the use of the waters of the Pecos river diverted by the Farmers’ Independent Canal Company, by virtue of the appropriation of said company and the riparian character of plaintiff’s land. That the Farmers’ Independent Canal Company is a mutual corporation, formed for the purpose of diverting water and delivering same to the lands of plaintiff and others under the system entitled thereto, and is owned and operated as a mutual company by plaintiff and the other farmers under the system. That Potter, Clark, and Norris came to Barstow and Pecos on the date specified in the notice, but did not take any testimony or hold any meeting as provided by law and stated they would receive written statements which they would take to Austin and consider in determining and adjudicating the water rights of plaintiff and others in said river, and that at some subsequent time they would issue a decree adjudicating all of said water rights. That no hearing was had such as is contemplated by Vernon’s Ann. Civ. St. Supp. 1918, arts. 5011 %f to 5011½1, inclusive, in that no testimony was taken at said hearing, as provided in article 501iy¿hh, but the board merely stated that it would receive such written proofs, verified by affidavit, as parties desired to file. That said proceedings attempted to be held by the defendants are claimed to be proceedings under articles 5011½1 to 5011%w. That said acts of the Legislature attempt to confer upon the board, of water engineers judicial power to summon witnesses, take testimony, and determine the right of plaintiff and others to the waters of the Pecos river, acquired by their appropriations, but that said acts, so far as they attempt to confer such judicial power and authority upon the board of water engineers, are in violation of the Constitution of the state of Texas and void, and that the hearing and attempted adjudication of plaintiff’s property rights by said board is an unlawful and unconstitutional invasion of his rights. That said board is without power to proceed even under said statute, because it is attempting to proceed upon the petition in the name of the Pecos & Toyah Lake Irriga* tion Company, which had forfeited its charter on July 2, 1915, for nonpayment of its franchise tax, and that said corporation has never been reinstated, and there is no such person capable of filing- said petition, and said proceeding is fictitiously brought to invade the rights of the real users of water from the Pecos river, and the board has no authority to proceed therein; that there are a large number of water users on the Pecos river, taking water from the same, to wit, the plaintiff, the Arno Co-operative Irrigation Company, and other parties, naming them. That said parties are the actual water users from the river. That there are no other persons, firms, or corporations taking or using water from the Pecos river, and the board has no jurisdiction to proceed in said hearing without a petition from some of the water users of said stream, even if said acts be constitutional.

That no such petition has been filed before the board. That the law does not authorize the board to hold said proceeding and to take testimony and enter its decree adjudicating and determining the rights of claimants to the waters of ’said stream, except upon a petition to the board signed by one or more water users upon the stream, and no such petition has been filed, because the Pecos & Toyah Lake Irrigation Company is defunct, nonexistent, and not a water user from the river. That it has never diverted or used or attempted to divert or use one drop of water from said river and has no means to divert water, and by reason thereof said board is illegally proceeding in said cause. That said board, while at said hearing, announced that they would not consider or respect riparian rights in their determination or adjudication, but only those rights acquired by appropriation and actual use. That plaintiff’s rights in said stream are based upon the riparian character of his land. That his land has been irrigated and cultivated from the waters of said stream, and plaintiff is unable to prosecute an appeal as provided in article 5011%mm of said act, for the reason that said river is an extensive water course and there are perhaps 100 people who would file proofs of claim with the board. That the costs of appealing would be prohibitive, and plaintiff would be financially unáble, and the provisions for appeal are impracticable and inoperative, because Jhe statute does not provide any method of taxing costs or repayment of costs by the adverse party in case said appeal should be successful. That the costs of appeal are prohibitive, and plaintiff and other riparian landowners would be thereby precluded from prosecuting such appeal. That, if defendants are permitted to proceed with the hearing, the title to plaintiff’s water rights will b.e clouded by the decision and decree of the board, and hie will be irreparably damaged, for which he. has no adequate remedy at law. That there, has been instituted and is now pending in the District Court of the United States for the Western District of Texas, at Del Rio, Tex., a suit styled Neal S. Doran et al. v. Grand-falls Water & Development Company et al., being No. 2 in equity, to which said suit plaintiff is a party defendant, and all other water .users of the Pecos river are parties defendant. That in said suit the following relief is asked for by the plaintiff therein:

“That each of the defendants aboye named be cited in terms of law to appear herein and set up this claim, or alleged right, title, or interest in and to the waters of the Pecos river aforesaid and its claimed or alleged right to take and appropriate the same for any purpose, and that thereupon such rights, titles, or interest-be decreed, determined, and adjudged by this court, and that upon hearing hereof this court adjudge, decree, and determine that the right, title, and interest of the said defendant Imperial Irrigation Company, and of the plaintiffs herein be adjudged, decreed, and determined to be prior in point of time and superior in right and equity to the alleged rights, titles, or interests of the defendants, and each of them.
“That upon hearing hereof it be decreed, adjudged, and determined by this court that the said defendants, and each of them, be perpetually enjoined and restrained from taking, diverting, storing in reservoir, or in any other manner appropriating any of the water flowing in the said Pecos river until and after the said defendant Imperial Irrigation Company has taken and appropriated the amount of water of said river to which it is entitled as aforesaid, and that this court enforce its decree in the premises by appropriate orders, executions, and proceedings in the premises; and may it please your honor to grant unto the plaintiffs a sub-.pcena of the United States of America issuing out of and under the seal of this honorable court directed to the said defendants herein, an,d each of them, therein and thereby commanding them on a day certain therein to be named and under a certain penalty to be and appear before this honorable court, then and there to answer, but not under oath, an answer under oath being hereby waived, all and singular the premises, and to stand to, perform, and abide by such order, direction, or decree as may be made against them, or either of them, in the premises as shall seem meet and equitable and good conscience.”

That there is pending in the district court of Reeves county a suit to which the Ward county irrigation district No. 1 is a party, against the Farmers’' Independent Canal Company, to determine the relative rights of said claimants to the waters of said stream. That none of said suits have been referred to the board of water engineers, but are pending in the courts, and in said suits temporary orders have been issued adjudicating temporarily this claimant’s rights to the waters of the Pecos river as against said other claimants. That the action of the board will infringe upon tile jurisdiction of the said District Court of the United States and of the district court of Reeves county and of the district court of Ward county in the suits aforesaid, resulting in a multiplicity of suits and contrary decrees and a confusion of the rights of plaintiff and other claimants to the water, and that plaintiff and the other claimants will he unable to obey the decree of court and the board at the same time. That there is no contest between this claimant and any of the other claimants to water upon the Pecos river other than the contest pending in the suits aforesaid. That plaintiff has submitted the matters herein mentioned to the board of water engineers and has requested them to discontinue said hearing, because no proper petition has been filed before them and because said acts are unconstitutional, and has requested the board to postpone its hearing and decision until the board can obtain an opinion from the Attorney General of the state, as provided by law, as to the constitutionality of the act, but that the board has refused such request and is threatening to go ahead with its proceeding, well knowing its decree would be void and unconstitutional, but believing that because of the enormous expense of an appeal, with no provision for repayment therefor, that no party could or would appeal from its decision. That the board is thereby usurping the jurisdiction of this court and other courts in said cause and subjecting plaintiff and other claimants to a multiplicity of suits and great expense without any adequate remedy at law and without any petition of any actual user of water from the Pecos river-.

The petition prayed for the issuance of a temporary writ of injunction, restraining the board from entering and filing for record in the records of Reeves county and Ward county its alleged adjudication and decree, affecting the rights of plaintiff and others to the use of the waters of the Pecos river, and that upon final hearing the injunction be made perpetual, and for general relief. The district judge refused to issue the temporary injunction sought, and from the order of refusal this appeal is prosecuted.

Appellant presents the cause to this court upon three main propositions:

1. That the act of the Legislature under which the board of water engineers is attempting to proceed to a final determination and adjudication of plaintiff’s property rights, to wit, to the waters of the Pecos river, is in violation of article 2 and section 1 of article 5 of the Constitution of Texas.
2. That, if said act is constitutional, nevertheless said board cannot proceed and put the actual users of water from the Pecos river to the expense of a hearing and consequent appeal, except upon the petition of an actual user of water from the stream, and no such petition being filed, because of the matters alleged with respect to the Pecos & Toy-ah Lake Irrigation Company, the board is proceeding without authority.
3.That the matters attempted to be adjudicated by the board would be in conflict with the jurisdiction of the District Court of the United States and the district court of Reeves county in the cases pending before said courts, and the act of said board would be infringement upon the judicial power of said courts by an executive branch of the government.

The constitutionality of the act in question is manifestly the main question in this case. The second and third contentions are pertinent only in the event the constitutionality of the law be upheld. A complete revision of the irrigation laws of this state was effected by the provisions of chapter 88, Gen. Laws 35th Leg. p. 211 (Vernon’s Ann. Civ. St. Supp. 1918, arts. 4991-50111/2w). The proceedings of the board sought to be enjoined are based upon the authority conferred in sections 105 et seq. of the act mentioned. A brief outline of the contents of these sections, material to the question presented, is as follows:

It is provided that upon a petition to the board of water engineers, signed by one or more water users, upon any stream or other source of water supply, requesting the determination of the relative rights of the various claimants to the waters of such streams or other sources of supply, it shall be the duty of the board, if upon investigation they find the facts and conditions are such as to justify, to make a determination of such rights, fixing a time to begin the taking of testimony and the making of such examinations as will enable them to determine the rights of the various claimants. In case suit is brought in any court for the determination of rights to the use of water, the case may, in the discretion of the court, be transferred to the board for determination, as provided in the act. Provision is made for the giving of notice and taking of testimony by the board and where the hearing shall be held. The claimant or owner is required to present in writing to the board all the particulars necessary for the determination of his rights to the waters of the stream or other source of water supply to which he lays claim; and prescribing the information which the statement of the claimant shall contain; provides for its verification ; provides for the taking of testimony by the board and the adjournment of its meetings for that purpose from time to time and place to place; and that, upon the completion of the taking qf the testimony, notice shall be given by the board to the various claimants that at a time and place to be named in the notice all of the evidence will be open to inspection of the various claimants or owners and others. Authority is giv■en the board , to employ stenographers, hy-drographers, and other experts in order to properly perform its duties required by sections 111 to 123, all moneys expended for such purpose to be charged as costs in the proceeding, and providing for its collection; provides for a contest by any one desiring to contest any of the rights of the persons who have submitted evidence, and providing for a hearing of such contest; gives the board the right to issue subpoenas and compel the attendance of witnesses to testify and give evidence, and also confers power upon the board to order the taking of depositions and to issue commissions to take same, in such manner as the board by written rule may provide; and that the witnesses shall receive the same fees as in civil cases, the costs to be taxed as the board may direct ; provides that the evidence taken shall be filed as a public document in the office of the board. It is made the duty of the board at the time specified in the notice to make an examination of the stream or other source of water supply and the works diverting water therefrom, prescribing what such examination shall include, and that the observation and measurements required to be made shall be reduced to writing and made a matter of record in the office of the board. It provides further that, as soon as practicable after the compilation of the date and the filing of the evidence in the office of the board of water engineers, “the board shall make and cause to be entered of record in its office, findings of fact and an order of determination, determining and establishing the several rights to the waters of said stream, and where the evidence taken at such hearing as herein provided shall disclose existing water rights not represented at such hearing, said rights shall be included in such findings of fact of said board and shall be likewise determined and established.”

A certified copy of such order of determination and findings is to be filed in every county in which the stream or any portion of a tributary is situate, or by which it flows, in the office of the county clerk. It is made the duty of the secretary of the board, upon the final determination of the rights to the waters of any stream or other source of water supply, to issue to each person, association, or corporation represented in the determination, upon the payment of the prescribed fee, a certificate signed by the chairman of the board and attested under the seal by the secretary, setting forth the name and post office address of the owner of the right, the date of priority, extent and purpose of the right, etc. Any party or any number of parties, acting jointly, may take an appeal from the decision of the board to the district court. Provision is made for the manner and form of perfecting an appeal and the filing in the district court of certified copies of the order of determination made by the board from which the appeal is taken, together with copies of all evidence and data offered before the board or prepared by the board. Any appeal so taken to the district court shall be tried de novo in said court. It provides that, in the trial in the district court, testimony taken before the board, maps, plats, plans, and surveys, and all other data, shall be admissible in evidence, and that, after final hearing upon an appeal, the court shall enter a decree affirming or modifying the order of the board of water engineers and assess such costs and apportion the same as it deems just. Prom the judgment of the district court, provision is made for appeals to the Court of Civil Appeals and Supreme Court, and it is further provided that the" determination of the board of water engineers as affirmed or modified on appeal shall be conclusive as to all prior rights and upon the rights of all existing claimants. It is provided that all persons not presenting claims to the board shall be barred after three years, but that nothing in the act shall be held to in any way destroy, infringe, or impair the right of any riparian owner to the use of the water from such stream for domestic purposes and use or for the use of stock, and that it shall not be necessary for the claimant of this right to appear or assert his right to such use, but that the same shall be respected. Nothing in the act is to be considered as a recognition of any riparian right in the owner of any lands, the title to which shall have passed out of the state subsequent to July 1, 1895, nor shall it be construed to alter, affect, impair, increase, destroy, validate, or invalidate any existing or vested right of property existing at the date the act goes into effect. It is further provided that, if any section or provision of the act shall be held unconstitutional, it shall not be held to invalidate any other provision.

This law differs in no material respect from the Wyoming law after which it is modeled. The irrigation law of Nebraska also copies the Wyoming law. Both of those states have constitutional provisions like Texas, vesting judicial power exclusively in the courts. Article 2 of the Texas 'Constitution provides that:

“The powers of the government of the state of Texas shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit: Those which are legislative to one, those which are executive to another, and those which are judicial to another; and no person or collection of persons, being one of these departments, shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted.”

Section 1 of article 5 provides that the judicial powers of the state shall be vested in the courts therein specified.

The courts of both Wyoming and Nebraska have upheld the constitutionality of the laws of those states. Those courts hold that the power conferred upon the board of water engineers is not judicial, but quasi judicial, which can lawfully be conferred upon and be exercised by administrative boards.

.O.ur law, in sections 105 and 118, confers upon the board of water engineers the power to determine and establish the relative rights of the various claimants to the waters of streams and other sources of supply. It cannot be questioned that it is a property right which the board is to thus determine and establish by its order. Various issues of fact and questions of law are necessarily involved and must be decided in exercising the power conferred. To this court, it seems clear that, in determining and establishing the relative rights of various claimants to such waters, the board would be exercising a purely judicial function and a judicial power which under our Constitution is vested exclusively in the courts. We cannot agree with the courts of Wyoming and Nebraska that this is merely a quasi judicial power.

The act is therefore held unconstitutional in so far as it attempts to confer this power upon the board. No opinion is expressed as to the legality of any other delegation of power in the act.

Since it appears from the petition that the board is about to exercise this power contrary to appellant’s constitutional right to have it exercised by the courts alone, and that his property rights will be affected by any order which the board may make respecting the same, It follows that appellant is entitled to the injunction sought.

The question presented is of great public importance, and its decision involves vast, interests. In such cases, it seems to be the" established practice of the Supreme Court to grant writs of error and authoritatively establish the law with full discussion of the question. In view of this practice, it seems that no useful purpose is served by the Courts of Civil Appeals in lengthy discussion and elaboration of their views. We therefore refrain from so doing and simply announce our conclusion and the reason upon which it is based.

Reversed, and judgment here rendered that a temporary injunction issue as sought.
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