author: SWEARINGEN, J.

text:
    GORDON-JONES CONST. CO. et al. v. WELDER et al.
    (No. 5910.)
    (Court of Civil Appeals of Texas. San Antonio.
    Feb. 20, 1918.
    Rehearing Denied March 20, 1918.)
    1. Bankruptcy <§=o215 — Jurisdiction — Contractor’s Bankruptcy.
    A contractor’s bankruptcy does not deprive a state district court of jurisdiction to distribute funds in the owner’s hands among mechanic’s lien claimants and subcontractors.
    2. Mechanics’ Liens <&wkey;3 — Statutes—Validity.
    Rev. St. 1911, art. 5623, limiting recovery by subcontractors to the original contract price, does not violate Const, art. 16, § 37, guaranteeing a lien to materialmen and laborers.
    3. Mechanics’ Liens <&wkey;206 — Assignment op Contract — Effect.
    Where a contractor’s assignment of his contract was recognized by the owner before I subcontractors and lien claimants gave the statutory notice of their claims, the assignee’s rights were superior to those of such subcontractors.
    4. Mechanics’ Liens <&wkey;281(4) — Amount Due Contractor — Sufficiency of Evidence.
    In a mechanic’s lien proceeding, evidence that the contractor assigned the contract before abandoning it held to sustain a finding that nothing was due the contractor at the date of abandonment.
    Appeal from District Court, Victoria County; Jno. M. Green, Judge.
    Suit in pature of an interpleader by John J. Welder against the Gordon-Jones Construction Company and others. From a judgment, certain defendants appeal.
    Judgment reformed and affirmed.
    0. A. Keller, of San Antonio, and R. L. Daniel and C. F. & C. C. Carsner, all of Victoria, for appellants. H. M. Aubrey, of San Antonio, and Proctor, Vandenberge, Crain & Mitchell, of Victoria, for appellees.
   SWEARINGEN, J.

John J. Welder, the appellee, filed this suit in the nature of an interpleader against the appellants, Gordon-Jones Construction Company, the Alamo Iron Works, Peden Roofing Company, Monarch Metal Manufacturing Company, G. D. Robbins, Texas Glass & Paint Company, Chas. Lucas Company, Elgin-Butler Brick & Tile Company, New Jersey Terra Cotta Company, J. Deseo & Son, Uhrich Planing Mills Company, R. P. Field, and the Collinsville Manufacturing Company, and against a number of other parties who did not appeal from the judgment of the trial court. The defendants were materialmen, subcontractors, laborers, the original contractor and its bondsmen, and the Victoria National Bank, an assignee of the contractor. The purpose of the suit was to secure a legal'adjustment of the respective rights of all parties in and to the contract price promised by the owner, Mr. Welder, to the contractor, the Gordon-Jones Construction Company, and also to determine the liabilities of the contractor and its bondsmen to Mr. Welder.

Without the intervention of a jury, the court rendered judgment dismissing many of the defendants, none of whom appealed. The judgment decreed:

“That after all due allowances to the plaintiff (Welder) under and by virtue of his contract with the defendant the Gordon-Jones Construction Company there remains in his hands the sum of $17,598; that out of said fund the defendant the American Cement Plaster Company is entitled to be paid the sum of $1,056.28, the defendant the American Three-Way Prism Company is entitled to be paid the sum of $858.32, and the defendant Al La Fleur is entitled to be paid the sum of $556, of which amount the plaintiff is entitled to receive the sum of $185 by virtue of written assignment executed by the said defendant ; that after the three payments indicated above are made the defendant the Victoria National Bank, of Victoria, Tex., is entitled’ to be paid out of said fund in full the promissory note executed by the Gordon-Jones Construction Company to said bank for the prinei-pal sum of $11,000, dated December 15, 1913, and bearing interest at the rate of 8 per cent, per annum until paid, interest payable annually, and is likewise entitled to be paid the balance of $650, balance due upon a promissory note for $2,650, executed by the Gordon-Jones Construction Company to the said bank', dated December 15,1913, with interest on said balance from said date until paid at the rate of 8 per cent, per an-num, interest payable annually, aggregating the sum of $14,633.34; that after the above-mentioned payments are made out of said fund the remainder thereof, or so much of the remainder as may be necessary to pay 46⅜ per cent, of the claim of the defendant the Monarch Metal Manufacturing Company, which, for the purposes of this decree, is fixed at $2,135, should be applied to said claim of said defendant; then, after this amount has been paid, the remainder of said fund, or so much thereof as may be necessary, shall be distributed in proportion to the respective amounts of the unpaid balance of their claims between the said Monarch Metal Manufacturing Company and the defendant the Alamo Iron Works, whose claim, for the purposes of this distribution, is hereby fixed at the sum of $1,782.51. No lien is held to exist in favor of either defendant named in this section. After the payment above set forth, out of said fund, the remainder thereof, if any, should be distributed among the remaining defendants, in proportion to the respective amounts of their claims, excepting as hereinafter set forth, said claims of said defendants, for the purpose of this distribution, being fixed as follows:
R. P. Field. $ 320 15
Uhrich Planing Mills Company. 2,325 00
Elgin-Butler Brick & Tile Company 256 10 Collinsville Manufacturing Company 739 79
J. Deseo & Sons. 1,157 03
New Jersey Terra Cotta Company. . 872 87
Texas Glass & Paint Company. 393 83
American Paint Company. 1,433 50
Chas. Lucas Company. 139 00
Peden Roofing Company. 517 50
National Marble Company. 431 22
“Provided, however, that no distribution shall be made of any of said funds to the defendant J. Deseo <⅞ Sons or to the defendant the Col-linsville Manufacturing Company until each and all of the other distributees under this section shall have been paid 50 per cent, of the amount of their claims, as herein fixed. When fifty per cent, is paid to each of the remaining distribu-tees named in this section, then the said defendants the Collinsville Manufacturing Company and J. Deseo & Sons shall participate in the distribution of the remainder of said fund, in proportion to the amount of their respective shares. No lien is held to exist in favor of ei-i ■ther defendant named in this section. Each and' all of said above-named defendants are entitled to a judgment for the full amount of the claim fixed in favor of each against the defendant the Gordon-Jones Construction Company, and from its trustee in bankruptcy, H. M. Abernathy, subject only to such payments as may be made upon their indebtedness from the distribution of this fund.”

The original petition alleged a contract whereby the Gordon-Jones Construction Company bound itself to construct a building for the appellee Welder for a stipulated price; that in accordance with the contract the contractors partially erected the building, when it abandoned the contract, after which the owner, Mr. Welder, as stipulated in the contract, completed the building according to the contract specifications; before the abandonment of the contract the contractor was paid by the owner 80 per cent, of the architect’s estimates; to complete the building after the abandonment by the contractor, the owner spent a large sum of money; that by reason of delay in completion of the building the owner suffered damages liquidated by the terms of the contract. It was alleged that a large amount of the contract price remained in the owner’s hands which he desired to pay to those entitled to it.

The appellees herein severally answered, setting out their accounts for material or labor or their subcontracts, stating the amount claimed by each, and each claimed a mechanic’s or materialman’s lien on the building. Each claimed a personal judgment against the owner as well as against the contractor.

No objection being raised in appellants’ briefs to the trial court’s findings of fact, except the twentieth, which we find to be supported by the evidence, we adopt them as our findings of fact:

“Conclusions of Fact.

“First. The plaintiff, John J. Welder, on, to wit, the 23d day of November, 1912, contracted with the defendant The Gordon-Jones Construction Company for the erection of the five-story bank and office building described in the pleadings, the plaintiff being the owner and the said construction company the contractors, the total consideration to be paid being $135,949.
“Second. That, in accordance with the terms of said contract,-the contractor furnished plaintiff bond in the sum of $67,874.50 to secure to plaintiff the faithful performance of said contract, on which said bond the Texas Fidelity & Bonding Company was surety.
“Third. That by the terms of said contract the construction company undertook to complete the said building within 220 working days from the date of the contract, and in case of failure so to do the said construction company contracted to pay to plaintiff as liquidated damages the sum of $50 per day for each and every day it should be in default in the performance of this provision; any sums of money falling due under this provision to be retained by plaintiff out of any sums of money in his hands due or to become due to the contractor.
“Fourth. That said contract also provided, in substance, that if the contractor should for any reason fail in the performance of any of the stipulations of said contract, the owner should be at liberty to terminate the employment of the contractor and to complete the work and provide necessary material therefor, and in such case the contractor should not be entitled to receive any further payments under said contract, but provided that the bondsmen of the contractor should have the right, should they so desire, to complete the contract in case of such default.
“Fifth. The contract further provided, in substance, that if the contractor should fail to pay any claim for which, if established, the owner of the premises might become liable, the owner should have the right to retain an amount of money sufficient to completely indemnify him against such claims, and should there prove to be any such claim after all payments were made, the contractor should refund to the owner all amounts that the latter should be compelled to pay.. The bond given binds the contractor and its surety to fully indemnify and save the owner harmless against all loss, damages, and cost which he may suffer or incur by reason of the failure of the construction company to carry out and perform its contract.
“Sixth. That after the execution of said contract and bond the defendant .the Gordon-Jones Construction Company began the erection of said building and continued said work until the 29th day of January, 1914, on which date it abandoned the work and notified plaintiff that it could not complete the same, the building then being far from complete.
“Seventh. That upon said abandonment by the contractor the surety on the bond, the Texas Fidelity & Bonding Company having been notified, waived its right to complete the building, and the plaintiff thereupon took possession and prosecuted the work to completion on June 1, 1914.
“Eighth. That during the progress of the work, and prior to the abandonment of the same, the plaintiff paid to the defendant upon architect’s estimates furnished in accordance with the provisions of the contract the sum of $101,912.66, the last estimate of $8,000 having been paid on December 15, 1913.
“Ninth. That the construction company failed to complete the building within the time specified in the contract, and, due allowance being made for Sundays, holidays, and weather conditions, the plaintiff is entitled to compensation for 151 days’ delay over and above said time limit, and that the actual damages suffered by plaintiff by reason of said delay was $30 per day or a total of $4,530.
“Tenth. That the cost to the plaintiff of completing the building for labor and material, after the abandonment of the same by the contractor, was $9,297.84, which amount was certified as correct by the supervising architect under a provision- of the contract making their certificates conclusive as to such cost. But I also find, aside from said certificate, that this amount was actually expended by plaintiff to complete the building under the terms of the contract.
“Eleventh. That when the defendant the Gordon-Jones Construction Company abandoned the construction of the building January 29, 1913, said defendant was indebted to the various defendants herein named for labor and material furnished in the construction of said building, as follows:
American Cement Plaster Company $1,056 28
American Three-Way Prism Company S5S 32
Al La Fleur. 556 00
Monarch Metal Manufacturing Company . 2,135 00
Alamo Iron Works. 3,342 52
R. P. Field. 320 15
Uhrich Planing Mills Company. 2,325 00
Elgin-Butler Brick & Tile Company 10
Collinsville Manufacturing Company 1,479 40
J. Deseo & Sons. 2,314 06
New Jersey Terra Cotta Company.. 872 87
Texas Glass & Paint Company. 393 83
American Paint Company. 1,433 50
Chas. Lucas Company. 139 00
Peden Roofing Company. 517 50
National Marble Company. 431 22
“Twelfth. That in pursuance of an agreement with the Gordon-Jones Construction Company, by which plaintiff agreed to pay the various creditors of said construction company on said building 50 per cent, of all claims approved by the construction company, plaintiff paid to the defendant J. Deseo & Sons the sum of $1,157.03 on the - day of-, 1914, to defendant the Alamo Iron Works the sum of $1,560.01 on the- day of - — , 1914, to defendant the Collinsville Manufacturing Company the sum of $739.70 on the- day of-, 1914, to defendant, the Texas Glass & Paint Company the sum of $51.28 on the •-— day of-, 1914, and to defendant the Victoria Planing Mills the sum of $22.50 on the - day of -, 1914, said payments aggregating $3,530.-52, and the Gordon-Jones Construction Company was at the time of such payments indebted to each of said defendants to whom payments were made for double the amount so paid, for labor and material furnished in said building, and the accounts of each and all of whom were approved by the defendant construction company.
“Thirteenth. That the cost of extras not covered by the contract which were incorporated in said building, over and above the reductions in construction made during the progress of the work, amounted to $921.73, which should be added to the contract price of the building.
“Fourteenth. That at the completion of the building by plaintiff there remained in his hands the sum of $17,598.66, due allowance being made for all payments made by him, the cost of completion of the building and the demurrage to which he was entitled as actual damages, as above set forth.
“Fifteenth. That on the 15th day of December, 1913, the defendant, the Gordon-Jones Construction Company executed its two certain promissory notes, payable to the defendant the Vietorial National Bank, one for $11,000, and the other for $2,650, both bearing interest at the rate of 8 per cent, per annum until paid, interest payable annually, the first-mentioned note being given for funds with which to pay for labor and material entering into the construction of the building, and $650 of the last-mentioned note being- for the same purpose, the remaining $2,000 being for other purposes having no connection with the plaintiff’s building, and was afterward paid and the note credited with that amount; that there was due upon said $11,000 note and the $650 balance of the $2,650 note at the time of this trial, principal and interest, the sum of $14,633.34, excluding attorney’s fees not claimed. ;
“Sixteenth. That the defendant the Gordon-Jones Construction Company, for the purpose of securing the payment of the $11,000 note and the balance of the $2,650, did, on the 17th day of December, 1913, by an instrument in writing, transfer, set over, and assign unto the defendant the Victoria National Bank all estimates on said building thereafter to be made, and all amounts of money that should thereafter become duo the Gordon-Jones Construction Company under the contract for the erection of said building, and did on the same date notify the plaintiff in writing of such transfer and assignment, and the plaintiff did on that date accept the transfer and assignment so made, and afterward, on the same date, did by an instrument in writing guarantee to the defendant the Victoria -National Bank the payment of said notes to the extent of $11,000.
“Seventeenth. That at the time of the payment by plaintiff of the last-named estimate of $8,000 on December 15, 1913, and at the time of his acceptance of the transfer and assignment made by the defendant the Gordon-Jones Construction Company to the defendant the Victoria National Bank of all amounts thereafter to become due, and at the time of plaintiff’s acceptance of said transfer and assignment and his guaranty of the payment of $11,000 thereof, the plaintiff had no notice of the claims of any of the defendants herein for labor and material furnished, excepting the following:
The defendant the American Cement
Plaster Company.$1,056.28
The defendant the American Three
Way Prism Company. 858.32
The defendant Al La Fleur. 556.00
—each of whom had given written notice to the plaintiff prior to the 15th day of December, 1913, in compliance with the statute for fixing mechanics’ and materialmen’s liens, and that these named defendants thereafter, within the time required by statute, filed with the county clerk their itemized verified accounts to perfect such liens.
“Eighteenth. That after the last payment by plaintiff of December 15, 1913, and after his acceptance and guaranty of the transfer and assignment by the defendant the Gordon-Jones Construction Company to the defendant the Victoria National Bank of December 17, 1913, as above set forth, the defendant the Monarch Metal Manufacturing1 Company gave to plaintiff the statutory notice of its claim amounting to $2,-135, and the defendant the Alamo Iron Works gave statutory notice to the plaintiff of its claim, aggregating $1,782.51, and both of said defendants, within the statutory period, filed verified itemized accounts with the county clerk for record.
“Nineteenth. That neither of the remaining defendants herein, to wit, R. P. Field, the Uhrich Planing Mill Company, the Elgin-Butler Brick & Tile Company the Collinsville Manufacturing Company, J. Deseo & Sons, the New Jersey Terra Cotta Company, the Texas Glass & Paint Company, the American Paint Company, Chas. Lucas Company, the Peden Roofing Company, or the National Marble Company gave the statutory itemized written notice to plaintiff of their claims nor filed with the county clerk the itemized verified accounts or written contracts required by statute to perfect a lien.
• “Twentieth. That the contract provided only for payments upon estimates made by the architects, and no estimate was made after that of December 15, 1913, which was paid by the plaintiff, and there was no amount of money due the contractor at the time of his abandonment of work under it.
“Twenty-First. That the Texas Fidelity & Bonding Company, surety on the contractor’s bond, was duly served by the plaintiff with written notices with verified statements of the facts showing the default of the contractor, within the time and in the manner specified and required by the provisions of the contractor’s bond.
“Twenty-Second. That the Gordon-Jones Construction Company has been declared bankrupt in the United States District Court of the Western District of Texas, and its affairs are now being administered by a trustee in bankruptcy, to wit, H. M. Abernathy.
“Twenty-Third. That the affairs of the Texas Fidelity & Bonding Company are now being administered by trustees under a trust agreement executed by said company, said trustees being G. N. Bebout and E. N. Gaffney, both of whom are made parties defendant in this cause.”

The trustee of the Gordon-Jones Construction Company assigns as error the refusal to sustain his plea in abatement. The proposition is that the Gordon-Jones Construction Company had been adjudged a bankrupt prior to the filing of this suit, and that the bankrupt proceedings were pending when this suit was tried; that therefore the bankruptcy court had exclusive jurisdiction of the cause. There was no error as contended, for we believe the rule is as stated in appellee’s counterproposition:

“In a bankruptcy proceeding where money or property are held by a third person, who has a direct interest in the retention and disbursement thereof, and as to which the bankrupt has only a disputed or doubtful claim, the bankruptcy court has no jurisdiction whatever, and any claim on the part of the bankrupt must be asserted by a plenary suit in a court of proper jurisdiction, which in this instance is the district court of Victoria county.”

See Loveland on Bankruptcy, vol. 2, § 540, and cases cited; First National Bank v. Chicago Title & Trust Co., 198 U. S. 280, 25 Sup. Ct. 093, 49 L. Ed. 1051; Bardes v. Hawarden Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 L. Ed. 1175; In re Heintz, 201 Fed. 338, 119 C. C. A. 576, 29 Am. Bankr. Rep. 19; In re Geller (D. C.) 216 Fed. 558, 32 Am. Bankr. Rep. 629; In re Rathfon Bros. (D. C.) 200 Fed. 108, 29 Am. Bankr. Rep. 22; In re Goldstein, 216 Fed. 887, 133 C. C. A. 91, 32 Am. Bankr. Rep. 802; M. Coppard, Trustee, v. Gardner, 199 S. W. 650.

The assignment is overruled.

The contention is made by the first assignment that article 5623, in so far as it limits subcontractors’ rights to recover to the contract price agreed upon by the owner and contractor, is unconstitutional because forbidden by article 16, § 37, of the Texas Constitution, which guarantees a lien to ma-terialmen and laborers.

Our appellate courts have held that the statute is not forbidden by that article of the Constitution. The distinction is made that subcontractors deal with the contractor and have no privity with the owner, whose obligation is solely to the contractor. However, by the article of the statute mentioned subcontractors are given a method for impounding the funds payable by the owner to the contractor and for forcing the payment of that fund to the subcontractors by a lien on the owner’s property. This procedure is often spoken of as a form of garnishment by which the subcontractor can secure payment from the contractor’s funds that may be payable by the owner.

The statute further provides that after the fund mentioned has been impounded by the statutory procedure the owner’s property can be taken to force the rightful payment of the impounded fund to those who invoked the procedure. Horan v. Frank, 51 Tex. 401; First Baptist Church v. Carlton Lumber Co., 173 S. W. 1179 (writ of error denied by the Supreme Court, 183 S. W. xv); First National Bank v. Lyon-Gray Co., 194 S. W. 1146; Lyon-Gray Lumber Co. v. Nacona Cotton Oil Mill, 194 S. W. 633; Texas Glass & Paint Co. v. Crowdus (Sup.) 193 S. W. 1072; Thelander v. Becker, 199 S. W. 848; Kahler v. Carruthers, 18 Tex. Civ. App. 216, 45 S. W. 163; Texas Glass & Paint Co. v. S. W. Iron Co., 147 S. W. 622; Strang v. Pray, 89 Tex. 525, 35 S. W. 1054; Berry v. McAdams, 93 Tex. 434, 55 S. W. 1112; Shields v. Morrow, 51 Tex. 393; Lonergan v. Trust Co., 101 Tex. 80, 104 S. W. 1061, 106 S. W. 876, 22 L. R. A. (N. S.) 364, 129 Am. St. Rep. 803; Cameron v. Terrell, 36 S. W. 102; Camerpn v. Trueheart, 165 S. W. 58; Guarantee S. L. & I. Co. v. Cash, 87 S. W. 749; James v. St. Paul Sanitarium, 24 Tex. Civ. App. 664, 60 S. W. 322. The statute is not unconstitutional.

The assignment is overruled.

By the second assignment it is urged that the court erred in rendering judgment in favor of the Victoria National Bank for more than $11,000, the amount guaranteed to the bank by the owner after assignment to it of the contractor’s claim for contract price. The transfer was made to the bank by the contractor, and the transfer was accepted by the owner before any statutory notice was given by any of the appellant subcontractors to appellee Welder. Prior to the statutory notice the owner could make any settlement with the contractor of the contract price without considering the subcontractors. If a settlement was made by which the owner was obligated to pay the assigned fund to the bank, and this settlement was prior to any statutory notice to the owner by the subcontractors, the settlement was valid and binding. In this instance the contractor on December 17, 1913, transferred all its* interest in the contract fund to the bank for a valuable consideration. This transfer was accepted by the owner on the same day December 17, 1913. At that time three subcontractors had impounded the fund by statutory notice, and tírese three obtained judgment for the amount of their claims, and do not appeal. No other claimants gave statutory notice of their claims to the owner until long after the transfer to the bank. Under these facts so much of the contract fund in the owner’s hands as was necessary to pay the promissory notes payable to the bank by the contractor to secure which the transfer- was made must be paid to the bank. Thelander v. Becker, 199 S. W. 848; Muller v. McLaughlin, 37 Tex. Civ. App. 449, 84 S. W. 687; Fullenwider v. Longmoor, 73 Tex. 484, 11 S. W. 500; Texas Glass & Paint Co. v. S. I. Co., 147 S. W. 620; Wilson v. Sherwin-Williams Paint Co., 160 S. W. 418; Texas Builders’ Supply Co. v. Beaumont Construction Co., 150 S. W. 770; Berry v. McAdams, 93 Tex. 431, 55 S. W. 1112; Horan v. Frank, 51 Tex. 405. Lonergan v. Trust Co., 101 Tex. 80, 104 S. W. 1061, 106 S. W. 876, 22 L. R. A. (N. S.) 364, 129 Am. St. Rep. 803; Nichols v. Dixon, 99 Tex. 262, 89 S. W. 765.

The second assignment is overruled.

The third, fourth, fifth, and sixth assignments complain of various rulings of the court, all of which involve the same general principles of law. All are presented by appellants in a group, and will be soon considered by us. Three propositions are made under these assignments:

‘First Proposition. A building contractor cannot, by assigning his interest under the contract, deprive materialmen who have no notice thereof of their rights to liens, especially when the contractors could not recover from the owner without satisfying such liens.
“Second Proposition. Within the time fixed for registering liens every person dealing with property is charged with notice of the existence of such liens.
“Third Proposition. When lien is perfected it relates back to the time when the work was done.”

None of thq three propositions states the law correctly. The rule, as announced by many decisions from an early date to the latest published opinions, is correctly stated in appellee’s counter proposition:

“Until notices of subcontractor’s claims are given to owner, in accordance with statute, he and contractor may make such settlements as they choose,- and owner may make prepayments upon the contract, or may accept asiSignments of any future estimates to become due upon the same,’ or may. obligate himself to assume any indebtedness of contractor to others, and should he do so, then such prepayments, assignments, or assumption of liability to others take precedence over all subcontractor’s claims, of which the owner had only subsequent notice. * * *

In the present case the assignment of estimates by the Gordon-Jones Construction Company to the Victoria National Bank and its acceptance by Welder created an obligation upon the owner to pay said fund to the bank and extinguished the contractor’s right thereto; therefore this accepted transfer took precedence over all claims of which the owner at the date of the acceptance of the transfer to the bank did not have statutory notice. Harris County v. Donaldson, 20 Tex. Civ. App. 9, 48 S. yr. 791; Sunset Brick & Tile Co. v. Stratton, 53 S. W. 703; Harris County v. Campbell, 68 Tex. 22, 3 S. W. 243, 2 Am. St. Rep. 467; Ricker v. Schadt, 5 Tex. Civ. App. 460, 23 S. W. 908; Thelander v. Becker, 199 S. W. 848; Texas Glass & Paint Co. v. S. W. Iron Co., 147 S. W. 620; Texas Glass & Paint Co. v. Crowdus, 193 S. W. 1072 (Sup. Ct.); Beilharz v. Illingsworth, 62 Tex. Civ. App. 647, 132 S. W. 106; South Texas Lumber Co. v. Concrete Construction Co., 139 S. W. 913; Foley v. Houston C. Mfg. Co., 106 S. W. 160; Ogburn Gravel Co. v. Watson Co., 190 S. W. 205; Youngberg v. El Paso Brick Co., 155 S. W. 715; Rice Common School District v. Oil City Iron Works, 180 S. W. 1121; National Bank of Denison v. Coleman, 151 S. W. 1123; Fielder Lumber Co. v. Smith, 151 S. W. 605.

The third, fourth, fifth, and sixth assignments are overruled.

The seventh assignment assails the twentieth fact found by the trial court, viz.: That there was no money due the contractor at the time of the abandonment. The contract was abandoned by the construction company January 29, 1914. All funds payable by the owner to the contractor had been assigned by the contractor to the bank, and the assignment accepted by the owner on December 17, 1913, more than a month previously. The finding is sustained by the evidence. The seventh assignment is overruled.

By the eighth assignment it) is contended that a list made by the contractor showing the several balances due to each of the subcontractors, and presented to the owner, was sufficient notice to impound the contract fund in accordance with the statute. The list was not the notice required by the statute, a discussion of which is rendered unnecessary by the following facts: The list was presented to the owner, Mr. Welder, December 22, 1913. The contractor’s interest in the funds had been transferred and the transfer accepted by the owner on December 17, 1913.

Each of the assignments presented in briefs for the individual appellants have been considered by us, and are overruled because of our conclusions hereinabove stated, or for tbe reason that the notices required by the statute (article 5622) were not given. Our explanation of what constitutes an itemized statement of contract or account as required by the statute (article 5622) is very fully and clearly stated by Associate Justice Brown in the case of Meyers v. Wood, 95 Tex. 67, 65 S. W. 174. The statements rejected by the trial court were not in accordance with the law, and therefore not legal notices.

The contention of the Alamo Iron Works that Mr. Welder became liable to it for 50 per cent, of its claim by reason of a letter offering to pay a 50 per cent, dividend upon the signing of the letter' by the Alamo Iron Works, and by the offer to pay the balance in 60 days thereafter, is without merit. The dividend paid was out of the contract fund, and the. balance was to have been out of the same fund. That balance is awarded by the judgment herein.

It is admitted by all parties that the calculation of the amount of the claim of the bank was error, and we are requested by appellees to correct the judgment in that respect. Accordingly we here reform the judgment by reducing the amount stated in paragraph 3 of the judgment, which is $14,633.34, to $14,428.-20. The reduction here made amounts to $205.14, which amount is to be distributed in accordance with the order of the trial court expressed in the fourth and fifth paragraphs of the judgment rendered by the trial court.

The judgment is reformed as above indicated and affirmed.

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


source: Caselaw Access Project

author: PLEASANTS, O. J.

license: Public Domain

text:
    AMERICAN INDEMNITY CO. v. NELSON et al.
    (No. 7496.)
    (Court of Civil Appeals of Texas. Galveston.
    Feb. 21, 1918.)
    1. Master and Seevant ⅞=3398 — Workmen's Compensation Act — Medical Aid— Necessity for Notice to Insurer.
    Under Yernon’s Sayles’ Ann. Civ. St. 1914, art. 5246k, providing that an insurer shall furnish medical aid during the first week of an injury to a servant, if it receives reasonable notice of the injury, a servant cannot recover for medical aid where the insurer was not notified of the injury and given an opportunity to furnish its own physician.
    2. Master and Servant <&wkey;389 — Workmen’s Compensation Act — Medical Expenses — Wiio May Recover.
    Any one who paj's for medical services for a servant may recover from the insurer, under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 5246k, providing that insurer pay for one week’s medical aid to an injured servant.
    Appeal from Galveston County Court; Geo. E. Mann, Judge.
    Suit by T. L. Kennedy against May and W. E. Nelson. Defendants had the American Indemnity Company made a party defendant. Judgment for plaintiff against May and W. B. Nelson, and in their favor over against the Indemnity Company, and it appeals.
    Reversed and rendered.
    Terry, Cavin & Mills, of Galveston, for appellant. Aubrey Fuller and V. M. Clark, both of Galveston, for appellees.
   PLEASANTS, O. J.

This appeal is from a judgment in favor of appellees against appellant for $150. The judgment was rendered in a suit brought by T. L. Kennedy against appellees, May Nelson and W. E. Nelson, to recover the sum of $225 alleged to be the reasonable compensation due him for medical services rendered by him to William Nelson, th'e minor son of appellees. May Nelson and W. E. Nelson answered, alleging that at the time William Nelson received the injuries which made the plaintiff Kennedy’s services necessary, he was employed by the Bellman Dry Goods Company, and that the Bellman Dry Goods Company was a subscriber undér the Texas Workman’s Compensation Act of 1913 (Acts 33d Leg. c. 179 [Yernon’s Sayles’ Ann. Civ. St. 1914, art. 5246h-5246zzzz]), and that American Indemnity Company, appellant, was the “association” which under the act insured the payment of the compensation provided -by the act to the employés of the Bellman Dry Goods Company. They further alleged facts showing that William Nelson’s injuries were received in the course of his employment with the Bellman Dry Goods Company, and alleged that under th'e provisions of section 7 of part I of the act, th'e said American Indemnity Company was required during the first week of William Nelson’s injuries to furnish reasonable medical aid, hospital services, and medicines, which1 they alleged were not furnished by the American Indemnity Company. They, therefore, had the American Indemnity Company, appellant here, made a party defendant to the suit, and prayed for judgment over against it for any sum for which they might be held liable to the plaintiff. Appellant answered by general demurrer and general denial. The case was tried by the court with a jury, and on the answers of the jury to special issues submitted to it by the court, judgment was rendered in favor of Dr. Kennedy against May Nelson and W. E. Nelson for $200, and in favor of May Nelson and W. E. Nelson over against appellant for $150.

The facts are undisputed. William Nelson, the minor son of appellees, who was in the employment of the Bellman Dry Goods Company, w.as injured in the performance of the duties of his employment on Novenmer 9, 1915. The Fellman Dry Goods Company was a “subscriber” under the Texas Workman’s Compensation Act of 1913, and the appellant was the “insurer” under said act of the employés of said company. Immediately after the accident the Bellman Company called Dr. W. H. Fisher, Jr., to attend to the boy’s injuries. Dr. Fisher took him to an infirmary and dressed his wounds, and about two hours thereafter he was taken to his parents’ home. Appellees then called in Dr. Kennedy who was their family physician, and he treated the boy until his injuries were healed.

The jury found that the reasonable value of the medical services rendered by Dr. Kennedy during the first week of the injury suffered by William Nelson was $150. This finding is not assailed by appellant. There is no evidence that any notice of William Nelson’s injury was given to appellant before Dr. Kennedy was employed by appellees to treat him, nor that appellant knew of his injury during the time he was being treated. Dr. Fisher did not see the boy after he was taken from the infirmary. He testified:

“1 was not called to further treat the case, hut was willing and ready to treat it at any time. T understood that Dr. Kennedy had aft-erwards been called in by Mrs. Nelson. The American Indemnity Company finally paid my bill amounting to $25 for the services I performed to the boy.”

The statute under which the liability of appellant is claimed is article 5246k, Vernon’s Sayles’ Texas Civil Statutes. This article is as follows:

“During the first week of the injury the association (the insurer) shall furnish reasonable medical aid, hospital services, and medicines when needed, and if it does not furnish-these immediately. as and when needed, it shall repay all sums reasonably paid or incurred for same, provided, reasonable notice of injury shall be given to the said association.” ■

It seems to us 'that this statute is plain and unambiguous, and that by its plain terms no association or insurance company organized or acting thereunder in insuring the employés named in the act can be held liable for medical aid furnished an injured employé unless the insurer is given reasonable notice of the injury before such medical aid is furnished. The obvious purpose of requiring this notice to be given is to give the insurer an opportunity to select and contract with a physician of his own choosing. 'The final result of an injury to an employé and the consequent amount of the insurer’s liability may often depend largely upon the medical treatment given during the first week of the injury, and charges -for such treatment might be much less when done under a contract made by the insurer than when left to be determined by evidence, which is often conflicting, of the reasonable value of the medical treatment. For these reasons it -seems to us entirely proper that before an insurer is made liable for money paid or incurred for medical aid furnished an insured employé that the insurer should be given an opportunity to furnish such aid. But what■ever may be the reason for the statute, as before said, we think its language -is plain and unambiguous, and it must be construed as making the liability of the insurer dependent upon failure to furnish medical aid after reasonable notice of the injury. Statutes of other states similar to ours have been so construed. Huntington v. Parlier, 1 California Accident Comm. Dec. 10; Pecott v. American Ins. Co., 223 Mass. 546, 112 N. E. 217; City of Milwaukee v. Miller, 154 Wis. 652, 144 N. W. 188, L. R. A. 1916A, 1, Ann. Cas. 1915B, 847; Green v. Burke, 1 Cal. Ind. Acci. Com. Decisions, 13.

We think appellant’s assignment which complains of the judgment on the ground that there is no evidence showing any liability of appellant for the amount claimed by appellees iii this suit should be sustained.

The writer is also of opinion that in no event could appellees be entitled to recover th'e amount paid by them for medical aid furnished their son. The rights given by the Texas Workman’s Compensation Act is to the injured employé, and any suit brought under the statute for compensation of any kind due thereunder must be brought •by the employé or his representative. The majority of the court, however, do not think the right to sue for money paid or incurred for medical services rendered an injured employ é is only given by the statute to the em-ployé, but that any person who pays for such medical aid or incurs liability therefor may sue the association and recover the amount so paid or incurred.

For the reason first above stated, the judgment of the court below is reversed and judgment here rendered for appellant.

Reversed and rendered.
      <g£5>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: GRAVES, J.

text:
    KIRLICKS et al. v. TEXAS CO. et al.
    (No. 7448.)
    (Court of Civil Appeals of Texas. Galveston.
    Jan. 23, 1918.
    Rehearing Denied Feb. 28, 1918.)
    1. Appeal and Error <&wkey;230 — Objection BELOW — PEREMPTORY INSTRUCTION.
    Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1971, providing that objections to the charge, .which shall be in writing and submitted to 'the parties for examination and objection, shall be waived unless presented to the court before the charge is read to the jury, does not apply to a peremptory instruction, but only in actual jury trials.
    2. Mines and Minerals &wkey;>78(l) — Oil Lease —Wells to be Drilled.
    ■An oil lease, providing that if -oil is found in, paying quantities in the first well, the lessee will, in 30 days, begin boring a second well on some other acre of the tract, and continue’⅛ bore as developments may justify, till at least five or six wells have been completed, “or the acre on which the lessee has failed to drill a well reverts to the lessor,” by written notice to that effect being served, is at least ambiguous as to-whether it does not require a well to be.drilled on each acre, and not merely two on different aeres, and three more anywhere, presenting a question for the jury under evidence ■of fact and circumstances that may throw light thereon.

      3. Mines and Minerals <&wkey;78(7) — Oil Lease —Forfeiture—Pleading.
    Pleadings as a whole, in action by lessee in oil lease, for price of oil sold, in which the purchaser interpleaded others, held, under the principle that a tenant may not deny his landlord’s title, to disclose such interest in the land in those so brought in as to entitle them to a hearing on the issue of forfeiture of lease.
    4. Mines and Minerals &wkey;>78(7) — Oil Lease —Forfeiture—Question for Jury.
    Evidence held to make an issue for the jury on the question of forfeiture of an oil lease by failure to drill required wells and abandonment of operations.
    5. Trial &wkey;>143 — Taking Case from Jury.
    The evidence raising an issue, failure to submit it. is error, notwithstanding any preponderance of the evidence.
    Error from District Court, Harris County; Chas. E. Ashe, Judge.
    Action by H. R. Decker against the Texas Company and another, others being inter-pleaded by the Texas Company. Peremptory instruction was given for plaintiff, and John A. Kirlicks and others bring error.
    Reversed and remanded for new trial.
    McMeans, Garrison & Pollard, of Houston, for plaintiffs in error. Carothers & Brown, of Houston, for defendants in error.
   GRAVES, J.

H. R. Decker sued the Texas Company and John A. Kirlicks, in part alleging:

“That heretofore, to wit, on the 15th day of May, A. D. 1909, J. B. Brockman, Elizabeth Dunman, John A. Kirlicks and other parties, who were then the owners in fee simple of the tract of land hereinafter described, made, executed and delivered to the plaintiff their certain lease in writing, by the terms of which, for and in consideration of $10 and other considerations, they demised, granted and leased to said Decker, his heirs and assigns, all the oil and gas to be found above ‘Cap Rock’ in and under the following described tract of land,” etc.

After further declaring that he had complied in all respects with the terms of the lease, which was to run ten years, Decker then pleaded that he had bored a number of producing wells on the land, and during the year 1913 had produced therefrom and delivered to the Texas Company 691.19 barrels of oil at the agreed purchase price of $1 per barrel, but that John A. Kirlicks and others, claiming the oil, had notified the Texas Company not to pay him therefor, which the company had accordingly refused to do; that they were asserting title both to the land and the oil produced therefrom, contending that Decker’s lease was invalid, or had been forfeited, which claims had cast a cloud upon his own title to the premises and the oil. He prayed that the Texas Company be required to bring in as parties to the suit all persons who were asserting any interest in the oil in its possession, in order that their claims might be adjudicated therein, that he have judgment for the value of the oil, and that these clouds so cast upon his title to the premises and the oil thereupon be removed and canceled, etc. More extended reference to the terms of the lease will hereinafter be made. The Texas Company answered that it was merely stakeholder, but had been notified, as charged by Decker, by Kirlicks that he and the other landowners claimed the oil, offered to pay the money value thereof into court, and brought into the suit Gussie M. Kirlicks, wife of John A. Kirlicks, Mrs. Sadie Conoway, a widow, Henry F. Fisher, George ¡Sears, and L. S. Warnecke, who were alleged to be the owners of the land. Although both were served, neither Sears nor Mrs. Conoway answered, but the others thus vouched in, joined by John A. Kirlicks, one of the two original defendants, filed answers, attaching thereto full copy of the lease so declared upon by Decker, denying that the latter was entitled to the proceeds of the oil sued for, or to the other relief sought, and alleging in much detail that he had failed in several respects to comply with the terms and conditions of the lease, in consequence of which he had forfeited in whole and in part all rights thereunder. By way of cross-action, they further charged that Decker had wrongfully used $500 worth of fuel oil from the land, for which they asked judgment. Details of these answering averments will likewise be later herein recurred to. At the close of the evidence the court took the entire case from the jury, and by peremptory instruction directed a verdict for plaintiff, upon the consequent return of which judgment was entered against all the named defendants for the $691.19 held by the Texas Company as stakeholder, that they take nothing by their cross-action against Decker for the value of the alleged fuel oil, and that the clouds cast upon the latter’s title to the leasehold premises by the claims of forfeiture asserted by all the defendants — other than the Texas Company — be removed. From that judgment this appeal is prosecuted through writ of error by John A. Kirlicks, Gussie M. Kirlicks, Mrs. Sadie S. Conoway, and L. ■S. Warnecke; H. R. Decker, H. F. Fisher, the Texas Company and George D. Sears being made defendants in error. The court’s peremptory charge was given to the jury on October 29, 1915. The verdict of the jury was returned on the same day. On October 30, 1915, the plaintiffs in error filed certain exceptions, claiming that the court had erred in giving this charge. The record contains no bill of exceptions, order of court, nor other evidence that objections were presented to this charge before it was read to the jury and were overruled by the court, and that exception was duly reserved.

Under these conditions, since all of the assignments carried into the brief of plaintiff in error are based upon alleged error of the court in so giving the peremptory instruction, objection is at the outset presented to this court’s consideration of any of the assignments, upon the ground that all objections thereto were waived by the failure to object before it was read to the jury, as is provided by article 1971, Vernon’s Sayles’ Statutes (Acts 33d Leg. p. 113, § 3). But we are unwilling to so hold, believing as we do that this statute does not apply to a peremptory instruction upon the whole case which takes from the jury the right to pass upon the facts. In at least two preceding cases this court has declined to so apply it, and, despite a contrary holding by others of our Courts of Civil Appeals, we still think that the correct conclusion. See Conn v. Houston Oil Co., 171 S. W. 522; Railway Co. v. Higginbotham, 173 S. W. 484. Prior to the announcement of this court’s view in these two cases, however, there had arisen a conflict in 'decision over the question between other Courts of Civil Appeals, and the matter is now pending before the Supreme Court on a writ of error granted by it because of such conflict, in the case of Walker v. Haley, 181 S. W. 559. A collation of most of the cases on the subject is there made, to which may be added the following: Thorne v. Dashiell, 189 S. W. 986; Carr v. Bank, 189 S. W. 988; Huling v. Moore, 194 S. W. 194; Byrne v. Tex. L. & L. Co., 198 S. W. 600. In these circumstances, we neither feel it our duty to now refrain from determining the issue in accord with our own conviction because of a previously existing conflict in the holdings thereon of like courts of no greater authority, nor to uncertainly delay the prompt dispatch of business in this court by certifying to the Supreme Court the precise question already for some time pending undisposed of there. We, therefore, proceed to here pass upon it.

Prom the opinions in the cases referred to, it will appear that the Amarillo court is so far the only other one of our appellate courts holding that the statute in question has no application to a peremptory charge; but that court bases its conclusion upon the opinion that the giving or refusing of a peremptory instruction raises a question of fundamental error, and should be reviewed upon appeal, whether excepted to or not. While concurring in the conclusion there reached, we do not rest it upon the same ground. It seems to us that the very terms of the statute itself contemplate that it should only be applicable to trials before a jury upon controverted issues of fact. Its provisions in full are as follows:

“Art. 1971. The charge shall he in writing and signed by the judge; after the evidence has been concluded the charge shall be submitted to the respective parties or their attorneys for inspection and a reasonable time given them in which to examine and present objections thereto, which objections shall in every instance be presented to the court before the charge is read to the jury, and all objections not so made and presented shall be considered as waived; before the argument is begun, the judge shall read his charge, and all special charges given by him to the jury in the precise words in which they were written; he shall not charge or comment on the weight of evidence; he shall so frame the charge as to distinctly separate the questions of law from the questions of fact; he shall decide on and instruct the jury as to the law arising on the facts, and shall submit all controverted questions of fact only to the decision of the jury.”

Just how the delivery of a written charge to the jury on the law of the case could have reference to a situation where no jury was necessary does not readily occur to us; for the action and authority of the judge under a peremptory instruction determining the entire case seems to us of similar import to his action in ending the whole controversy in other ways, such as in sustaining a general demurrer to the evidence, or a plea to the court’s jurisdiction to entertain the matter before it at all. If this kind of general charge had been intended to apply to these instances in which the judge alone could terminate the entire case, and no jury’s guidance in matters they had the province and authority to pass upon, that is, controverted issues of fact, was to be provided for thereby, why require it: (I) To be in writing; (2) to be submitted to the litigants for written objections; and (3) to be read to the jury; and all this after the evidence has been concluded, and before argument to the jury is begun? No such elaborate procedure was necessary. Nor is it any answer, we think, to say that a peremptory charge “is a concrete application of the law of the case to the facts,” for the reason that these detailed terms and requirements of the statute reasonably contemplate that something determinable by them should be left before the jury, to which the charge could properly relate.

Moreover, the provisions of succeeding article 2061, Vernon’s Sayles’ Revised Statutes, that the ruling of the trial court in giving, refusing or qualifying of instructions to the jury shall be regarded as approved, unless excepted to as provided for in foregoing articles, cannot aid the contention that the preceding article 1971 applies to a peremptory charge, because our Supreme Court in Railway Co. v. Dickey, 187 S. W. 184, has directly held that it concerns special instructions only, and has no reference to the general charge, with which alone article 1971 deals.

We think the plain major purpose of the Legislature in this statute, enacted as it evidently was in response to the need for more simplified procedure, especially upon appeal, was to give the trial judge in actual jury trials every opportunity to eliminate any errors' from his general charge before submitting the fact issues therein squared with the law to the jury for their determination, thereby reducing the probabilities of new trials and reversals, and that its thought was not upon such summary and independent action as may be taken by the judge alone when, by peremptory charge, be removes the controversy from the consideration by the jury.

Under these views, we overrule the objection.

Looking, then, to the merits of the assignments, and after a full consideration of the pleadings and evidence, we conclude that two separate issues of fact were raised, which should have been submitted to the jury: (1) What was the meaning of the lease contract with reference to whether or not, after the first two wells, a further well should be drilled upon each additional acre of the land; (2) whether or not Decker had forfeited the lease, in whole or in part, by reason of any failure upon his part to comply with its terms.

The provision of the lease regulating the manner of drilling the wells, was the following:

“7. It is further agreed that in the event oil is found in paying quantities in said first well, then the lessee agrees and covenants that within thirty days from the completion of such successful well he will begin the boring of a second well on some other acre of said tract herein leased, and continue to bore additional wells upon the tract herein leased as developments may justify, until at least five or six wells have been completed, or the acre upon which said second party has failed to drill a well reverts to the first party by written notice to that 'effect being served upon said second party by said first party.”

There was a sharp controversy between the parties as to the meaning of this paragraph of their contract with reference to other wells- after the first two; Kirlicks and associates claimed that it obligated Decker to drill one well on each additional acre of the entire 20 acres, while the latter contended, and the court seems to have held, that hie was only required to drill a total of five wells upon the whole-of the land, only the first two of which . must be upon different acres, the location of the remaining ones being left to his judgment. The evidence was undisputed that five wells in all were drilled, four of them upon the same acre, and the other one upon a different acre.

We are not prepared to say the contract did not contemplate the drilling of an additional well, after the first two, upon each acre of the balance of the land, just how the acre (that is, any acre) of the land upon which the lessee had failed to drill a well could revert to the lessors, as provided in the concluding clause of. the quoted -part of paragraph 7 of the lease, is not clear to us, unless the drilling was thereby meant to be by the acre, especially as there was some evidence tending to show that the .tract was laid off in acre blocks, or at least was so treated by the parties to the lease. At best we think there was ambiguity in the contract in this respect, and that the question of its real meaning, under the intention of the parties, and such other facts and circumstances as would throw light upon it, should have been submitted to the jury for a finding.

It was pointedly material for the precise obligation undertaken by the lessee to be clearly defined, in order to further determine the equally pertinent question as to how he had discharged it.

In reference to this last-mentioned question, we think the issue of forfeiture also was clearly raised by both pleadings and proof, contrary to the contention of defendant in error Decker, and that his further position that plaintiffs in error did not, by either pleadings or proof, disclose such interest in the land as entitled them to a hearing upon the issues they tendered in reply to his suit, or to any relief, is not well taken. It seems to us that this latter contention discounts the initial attitude bf defendant in error Decker in bringing his suit, and the subsequent effect of the judgment he took therein. It must here be recalled that he brought the suit and specifically declared upon the lease in question, under the allegation that John A. Kirlicks and others therein named were the owners in fee simple of the land to which it related, and that as such owners they had executed and delivered to him the very instrument under which all the rights he now asserted accrued to him, and that it was at his instance that all of the defendants there were brought into the suit for the avowed purpose, as against those particular persons, of establishing the rights so claimed. Indeed, the Texas Company, whom he originally sued for that express purpose, not only brought in all the other defendants except John A. Kirlicks, who was an original defendant, under the averment from information and belief that they and Kirlicks were the owners of the land, but further set out that, in giving it the written notice of the claim of such owners to the oil in its- hands, as had been charged in paragraph 5 of Decker’s petition, John A, Kirlicks had done so for himself and as attorney for all other owners; and upon the trial Kirlicks .so testified without objection.

Moreover, after being thus summoned in that character of suit, the previously named defendants who answered, after admitting execution and delivery by them of the lease sued upon 'and setting up a full copy of it, repeatedly alleged their ownership of the land, declared their consequent right and title to its possession and proceeds in and from oil, and in minute detail charged Decker with having violated practically every one of his obligations under the lease, and that he ha.d accordingly forfeited, all and singular, his rights thereunder. True they did not specifically pray for a cancellation of the lease, but time and again, after denying that plaintiff Decker -had any rights under it, reiterated that “the owners of the land” were entitled to that relief also, as well as that above detailed.

In replying to these answers by supplemental petition, Decker not only conceded that Kirlicks and the other owners were entitled to the royalty oil as prescribed by tbe terms of tbe lease, wbicb be asserted bad been paid to them, but for all tbe purposes of tbe suit repeatedly admitted, as we tbink, that they did have such substantial interest in its subject-matter, that is, tbe land and tbe oil produced therefrom, as entitled him to the affirmative relief against them be therein sought; one of several similar aver-ments to this effect being tbe following:

“That the defendant Kirlicks did, about the time that he alleges, make claim that the plaintiff had forfeited his lease, but never attempted to take possession of said wells or operate them, and that prior to his claim of forfeiture as alleged, he, together with all of the other owners of the land, received without question their royalty from said wells, knowing that the oil was produced from such wells, and encouraged the plaintiff to continue to produce oil from said wells; that the plaintiff relied on these acts of the owners of the land, and acted thereon, and on account thereof said Kirlicks and the other owners of the land are now estopped to deny that the land upon which the plaintiff’s wells are located was a part of the land covered by his lease.”

Finally, as has been shown in our preliminary statement tbe judgment was one in tbe lessee’s favor against all of tbe defendants as lessors of tbe land, not only for tbe money value of tbe oil produced from it, tbe Texas Company being held merely as an innocent stakeholder, but quieting bis title to tbe leasehold upon tbe premises as against their claim that it bad been invalidated because of bis failure to live up to its requirements.

We, therefore, tbink that defendant in error Decker was in no position to defeat tbe right of plaintiffs in error to be beard before tbe jury upon the issues thus tendered in their answers, upon tbe claim that they did not show sufficient interest in tbe land covered by tbe lease, and that, under tbe circumstances recited, having tbe right to assert them, their defenses as pleaded would be deemed to be for, and would inure to, tbe benefit of tbe owners of tbe land.

We tbink tbe principle that the tenant may not deny bis landlord’s title is applicable. Fowler v. Simpson, 79 Tex. 617, 15 S. W. 682, 23 Am. St. Rep. 370; Cobb v. Robertson, 99 Tex. 145, 86 S. W. 746, 87 S. W. 1148, 122 Am. St. Rep. 609.

Neither can we agree that the evidence was insufficient to require submission of tbe question of forfeiture. Upon this feature tbe lease provided:

“6th. It is further mutually agreed that in case lessee abandons said property; or in case he fails to operate any particular well which is in actual operation on said tract, which is producing either oil or gas, for the period of thirty days, and fails to operate same for said period, unless such failure is unavoidable and is because of broken machinery that cannot by proper care and diligence be sooner replaced or put in order, or because of the wells clogging so as to reasonably require a longer time to clean and put them in order, then this lease and such producing well and the land herein-above provided to operate it, shall revert to the lessors.”

In addition to the previously mentioned and undisputed fact that no well was drilled on any other acre than tbe first 2, Kirlicks testified that Decker bad not only failed for about 90 days to even attempt to operate tbe wells already drilled upon these 2 acres, but bad actually abandoned them, along with the rest of tbe land, bad paid no royalty nor done any work of any sort during that time, and bad confessed bis inability to develop and operate tbe property as tbe lease required, and admitted the resulting forfeiture of all bis rights, except as to two producing wells. There was similar proof offered from other sources also.

It may be that tbe evidence preponderated against a forfeiture, but we tbink that issue was certainly raised, and tbe failure to submit it constituted error. Walker v. Finney, 157 S. W. 948; Carter v. South Texas Lumber Yard, 160 S. W. 626; I. & G. N. Ry. Co. v. Williams, 160 S. W. 639; Zimmermann v. Baugh, 161 S. W. 943.

Some of tbe assignments are objectionable as being multifarious and without supporting statements; but we tbink others sufficiently raise the questions discussed, and we sustain that much of them without seriatim or more detailed treatment, and, for the errors pointed out, reverse tbe judgment and remand tbe cause for another trial.

Reversed and remanded.
      <fe=J?or other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      ©=jFor other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HARPER, O. J.

text:
    NATIONS et al. v. NEIGHBORS et al.
    (No. 794.)
    (Court of Civil Appeals of Texas. El Paso.
    Feb. 14, 1918.
    Rehearing Denied March 7, 1918.)
    1. Husband and Wife <&wkey;273(8) — Community Property — Sale by Survivor — Pending Administration.
    Where property of deceased was left to an executor in trust without action of the probate court, a deed of testator’s half of community property by the survivor, before the executor qualified, was ineffective.
    2. Executors and Administrators <&wkey;138(l) —Power to Sell Real Estate.
    Where executor was left the right to “manage and control” and “invest proceeds of rents and sale, all the rest of said property just as if it was his own,” the title was in the executor, and he could sell either real or personal property to pay debts, although the will devised all the property to a certain person to be turned over to her when she reached the age of 21 years.
    3. Wills <&wkey;439 — Construction—Intention.
    The intent of the testator, as expressed in the whole instrument when read in the light of the circumstances surrounding the testator when the will was written, must govern.
    Appeal from District Court, Pecos County; Joseph Jones, Judge.
    Trespass to try title by Elizabeth B. Neighbors and others against J. H. Nations and another. Judgment for plaintiffs, and defendants appeal.
    Reversed and rendered.

      Williams & Jackson, of Ft. Stockton, and Turney, Culwell, Holliday & Pollard, of El Paso, for appellants. Terrell & Terrell, of San Antonio, W. Van Sickle, of Alpine, and W. A. Hadden, of Et. Stockton, for appellees.
   HARPER, O. J.

Appellee, Elizabeth. Beatrice Neighbors, a minor, suing by her mother, Aileen M. Brannon (joined by her husband, V. O. Brannon) as next friend, and joined by Aileen M. Brannon, administratrix, with the will annexed of the estate of R. B. Neighbors, deceased, and as guardian of the estate of the aforesaid Elizabeth B. Neighbors, filed suit in trespass to try title to certain lands described in her petition, situated in Pecos county, Tex., against the appellants, J. H. Nations and S. Ross Peters. They further alleged that on or about March 25, 1916, Nations sold said lands with other lands to the appellant Peters, taking as part payment certain vendor’s lien notes, and pray for judgment for title and possession of the land and cancellation of the notes referred to above in so far as they may affect the property described, for rents and damages, etc. Defendants answered by plea of not guilty, general denial, and specially that the land in controversy was the community property of R. B. Neighbors and his wife, A. M. Neighbors, at the time of the death of the former; that deceased left a will which named R. S. Neighbors, his brother, independent executor without bond, and which will stipulated that the executor should have full possession and control of his property, the same as if it was his own until his daughter Beatrice Neighbors, plaintiff herein, should arrive at the age of 21 years; that the surviving wife qualified as survivor of the estate and took charge thereof as provided by statute; that the estate at that time owed $18,396.58; that to settle same this land and other property was sold by her, and that the lands in controversy were sold to J. H. Nations & Co. for the sum of $5,000, together with cattle thereon; that the situation was such that the cattle thereon were not salable to advantage without selling both together, etc.; that after the sale a full and complete settlement was had with the executor; that the land sold for its full value; that the surviving wife and the independent executor joined in the deed to said Nations & Co.; that they have paid the taxes, amounting to $815.26, and expended $1,580.70 in defense of suits of adverse claimants, and have paid the state of Texas $617.76 unpaid purchase price; that in case plaintiff recovers they be awarded said amounts, together with the $2,500 purchase price of the lands. The parties filed the following agreed statement of facts:

“It is agreed that the common source of title to the property described in plaintiffs’ petition was in R. B. Neighbors, deceased, and that it was community property of deceased at the time he died, and his wife, Aileen M. Neighbors, now Mrs. V. C. Brannon, or Aileen M. Bran-non; that R. B. Neighbors died in Pecos county, Tex., on the 23d of November, 1904, leaving surviving him a wife and a minor child, Elizabeth Beatrice Neighbors, at that time about 2½ years of age; that the estate consisted of both real and personal' property belonging to the community estate and to R. B. Neighbors, individually, as will be hereinafter set out.
“It is agreed that the land described in plaintiff’s petition being the land sued for, was community property of the estate of R. B. Neighbors and Aileen M. Neighbors, now Mrs. V. C. Brannon; that the will attached hereto was duly probated in Pecos county, Tex., and R. S. Neighbors qualified as independent executor, without bond, on March 6, 1905, and was acting as independent executor at the time the contract and deed, copies of which are attached hereto, were entered into between Mrs. Aileen M. Neighbors, individually and as survivor, and R. S. Neighbors, individually and as executor of estate of R. B. Neighbors, deceased, and that at the same time Mrs. Aileen M. Neighbors had qualified by complying with all requirements of the statutes of this state as survivor of the community estate of R. B. Neighbors and herself, on, to wit, January 3, 1905, and was so acting then and at the time of the execution of the deed from her as community survivor and individually, to J. H. Nations & Co. to the land sued for, and until her marriage with V. C. Brannon on January 15, 1906; that the debts owing by the community estate at the time the contract was made and deed delivered amounted to $18,396.58, and the personal property was of value far in excess of that amount;’ that the purchase price for the one-half interest in the land which is sought to be recovered in plaintiffs’ petition was $2,300, which was paid to Mrs. Aileen M. Neighbors by J. H. Nations & Co., and was accounted for by her in her settlement with R. S. Neighbors, independent executor of the estate of R. B. Neighbors, deceased; that the agreement hereto attached between the parties is made a part of this agreement; that Aileen M. Brannon, in acting under the order of the court in this case, is suing as administra-trix with the will annexed of R. B. Neighbors, and also as guardian of the person and estate of Elizabeth B. Neighbors; that S. Ross Peters was familiar with the facts at the time of his purchase and claims such title only as J. II. Nations had at the time deed was made to the property described in plaintiffs’ petition to S. Ross Peters; that the deed from Mrs. Aileen M. Neighbors and also the deed from R. ,S. Neighbors, heretofore referred to, was made to J. H. Nations & Co., a firm composed of J. H. Nations and U. S. Stewart, and that thereafter U. S. Stewart conveyed his interest to J. II. Nations, and thereafter J. H. Nations conveyed said property to S. Ross Peters; that J. H. Nations has paid taxes since the purchase, amounting to $407.50, and has paid interest due the state on purchase money amounting to $309; that J. H. Nations brought certain suits to remove cloud from title on the property described in plaintiff’s petition, and expended therefor the sum of $700, but said suits were brought without the knowledge or consent of the plaintiff or her representatives, but was necessary to perfect record title to the lands sued for, and were reasonable charges; that at the time of R. B. Neighbors’ death he was in peaceable and adverse possession, using,. occupying, and enjoying the property described in plaintiffs’ petition for three years, and had paid all taxes on same before they became delinquent, and complied with the three-year statute of limitation; that after the purchase of the lands sued for by J. H. Nations & Co. they and J. H. Nations and S. Ross Peters used, occupied, and paid taxes on same before they became delinquent each year so as to comply with the requirements of the statutes of five and ten years limitation, having peaceable and adverse possession during such periods; that section 14, described in plaintiffs’ petition, was the home section of R. B. Neighbors and a portion of it was used and occupied by him and his wife as a home; that at the time the suits were brought to remove cloud from the title to the one-half interest in said lands sued for herein the balance of said land owned by J. H. Nations, same being the other undivided half interest which he secured as the interest of Mrs. Aileen M. Neighbors as her community interest, and to which plaintiffs make no claim, was involved in the suits to remove cloud from title; that the notes mentioned in plaintiffs’ petition, a portion of which are secured by vendor’s lien upon the property described in plaintiffs’ petition, belong to J. H. Nations; that Mrs. Aileen M. Bran-non does not live upon any of the property described in plaintiffs’ petition, and has not lived there since the sale to J. H. Nations. & Co.; that the reasonable rental value of said lands sued for was $104.40 per annum.”

Copy of will:

“State of Texas, County of Bexar.
“I, R. B. Neighbors, of Pecos county, state of Texas, being of sound and disposing mind, uninfluenced by any other motive than to dispose of my property as I think right and just, in view of the uncertainty of life and the certainty of death do by this writing make my last will and testament as follows:
“Paragraph 1st: I bequeath my body to the earth from which it sprung and my soul to God.
“Paragraph 2nd: I desire that upon my death that all my just debts be paid and I so direct.
“Paragraph 3rd: I give, will and bequeath to my beloved wife, Aileen M. Neighbors the sum of fifty dollars per month in cash so long as she remains single, and direct that on the first day of each month of every year that the said Aileen M. Neighbors is unmarried my executor to be hereinafter named shall pay to said Aileen M. Neighbors the said sum of fifty dollars, to be used and disposed of by her as she pleases and further direct that if on the first day of any month my executor has not ready cash with which to pay this bequeath that he shall sell some property for the purpose of raising the sum in this paragraph of this my will given my wife and in the event of her marriage I direct that said payments shall cease altogether.
“Paragraph 3rd: I hereby give, will and bequeath to my brother R. S. Neighbors five hundred head of stock cattle to be selected by him as his own property out of any and all cattle I may own at the time of my death.
“Paragraph 4th: I give, will and bequeath to my beloved daughter Elizabeth Beatrice Neighbors after deducting the foregoing bequests of my said wife and my said brother all of the residue and remainder of all property, real, personal and mixed of which I may die possessed and I declare that I am now the owner of above five thousand head of mixed cattle, and one-fourth interest in the Koehler Hotel at Port Stockton, Texas; two lots and a feed yard in Port Stockton, Texas; six tracts of land in Pecos county, Texas, in the name of L. 0. Serun, and forty head of horses and mules and my homestead on my ranch situated in Pecos county, Texas, about forty miles south of Port Stockton, Texas, and sundry leases of land. That my cattle brand is N and my horse brand the same and XS on two mules.
“Paragraph'5th: It is my will and I so direct that the said R. S. Neighbors receive the five hundred head of cattle herein bequeathed to him and do with them as he pleases and that my executor pay to my said wife the fifty dollars in cash bequeathed to her in paragraph 2nd of this my will and testament until she marries, when said payments shall cease and to take charge of and manage and control, investing proceeds of sales and rents, all of the rest of said property just as if it was his own until my daughter, Elizabeth Beatrice arrives at the age of twenty-one years when said property by my executor or his successor shall be turned over to her.
“Paragraph 6th: I hereby appoint my brother R. S. Neighbors, executor of this my last will and testament without bond and direct that no court of law or equity in this state have any jurisdiction or control of my said estate other than to probate and record this my will and testament. The words ‘head’ and ‘of the rest of’ on page four of this writing were interlined before signing.
“In testimony of all of which I hereby sign my name in the presence of J. M. Eckford and -, who sign this writing as witnesses at my request at San Antonio, Texas, on this the 8th day of September, Anno Domini, 1903. “Witnesses: R. B. Neighbors.
“J. M. Eckford.
“John Kinahan.”

Appellants urge seven assignments attacking the conclusions of law as follows:

Pirst. “ ‘1. I find that Aileen M. Brannon, formerly Aileen M. Neighbors, did not have authority as community survivor to convey the property involved in this suit while there was independent administration pending under a will left by her husband, R. B. Neighbors; R. S. Neighbors having qualified as independent executor in accordance with law.’
Second. “ ‘2. The R. B. Neighbors will gave the executor therein named no power of authority to sell or otherwise dispose of the plaintiff’s interest in the lands sued for under the facts shown.’
Third. “1. The plaintiff derived her interest and title in the land sued for under and by virtue of the terms of the will of her father, R. B. Neighbors, which interest vested in her immediately upon the death of her said father.”
“I find that the fee simple title to the property was by said will vested in Elizabeth B. Neighbors, a minor, and that the will gave to the executor no authority to convey.”
Pourth. “4. Plaintiffs are entitled to recover the title and possession of the land sued for, together with the rents for the use thereof since defendants took possession thereof, upon returning to defendants the amount paid by them to R. S. Neighbors, and A. M. Neighbors, under the contract of June Y, 1905 ; for the interest in the land in dispute, together with the legal interest thereon to date and all taxes paid and the amount paid the state on the school land pur-cll3.S6S **
“12. I further find that the plaintiff, Elizabeth B. Neighbors, is entitled to recover as rent from J. H. Nations the sum of $1,200.60.”
Pifth. “6. The defendants are not entitled to recover any sum by reason of suits brought to remove cloud from the title on the property described in pláintiff’s petition, because the same were voluntarily made under conditions that cannot form any basis for liability on part of plaintiff.”
“10. I further find that, inasmuch as the suits were filed to remove cloud to clear the record title only, and without knowledge or consent of the plaintiff, Elizabeth B. Neighbors, or her representatives, J. H. Nations is not entitled to recover any amount expended in the suits brought by him voluntarily to remove cloud from the title.
“11. I further find that he is not entitled to recover same because it is admitted that the plaintiff owned a good title to the land by limitation.”
“16. The court erred in failing and refusing to render judgment for defendant J. H. Nations for the sum of $700, expended by him in clearing the record title to the land sued for.”
Sixth. “3. I find that if said will of R. B. Neighbors had not given to the executor authority to convey, he could not have conveyed for a nominal consideration, and that the deed from him to J. H. Nations & Co., conveyed no title.
Seventh. “12. The court erred in his fifteenth conclusion of law filed on March 17. 1917, wherein he found that the lien retained in deed from Nations to Peters should be canceled so far as it affects the lands in controversy, because plaintiffs have no interest in the lands and no right to have said lien canceled.”
“17. The court erred in canceling the lien set up and provided in the deed from Nations to Peters, and in holding that same was void.”

The propositions present for our determination the following questions: (1) Was the surviving wife empowered by law "to sell the land sued for by reason of having qualified under the statute as survivor of the community? Appellees say no, because there was an administration pending. (2) Was the executor empowered to sell the land by the provisions of the will?

The agreed facts show that the testator died November 23, 1904; that the widow qualified as survivor of the community estate January 3, 1905, and that the will was probated, and Neighbors, the executor named in the will, qualified as independent executor without bond March 6, 1905; that the contract of sale to Nations of this land, cattle, etc., was executed by both on June 7, 1905; that a deed was executed by Mrs. Neighbors, individually and as survivor, ad* ministratrix for the land in controversy, to Nations and Stewart, September 2, 1905; that on September 19, 1905, Neighbors, as independent executor, executed a deed to Nations and Stewart for this land and many other parcels for the nominal sum of $5; that the purchase price of $2,300 of the land was accounted for to the executor by the surviving widow. Prom the latter we conclude that the deed by the executor was in confirmation of the sale by the survivor, before mentioned.

Under these facts Mrs. Neighbors had no authority as survivor to sell the land in controversy because of the pending administration. Matula v. Preytag, 101 Tex. 357, 107 S. W. 536.

Upon the death of a person his property immediately vests in some one, either the heirs at law, devisees under the will, or in the trustee or executor.

The legal effect of the provisions of the will was to vest the title to the testator’s one-half interest in the executor in trust: First, for the payment of the debts; second, the specified legacy of $50 per month to the surviving widow until marriage; and, third, for the minor child until she reached the age of 21 years upon which event title to vest in her. Haring v. Shelton, 103 Tex. 10, 122 S. W. 13. Por this reason the testator’s portion of the community estate was placed in the control of the executor without action by the probate court except to probate the will; therefore no title passed by the deed of the survivor.

This brings us to the question: Was the executor authorized by the will to make the sale in question? In construing a will the intent of the testator, as expressed in the whole instrument when read in the light of the circumstances surrounding the testator when the will was written must govern. McMurry v. Stanley, 69 Tex. 227, 6 S. W. 412.

“No particular form of words is necessary to create a power of sale. Any words which show an intention to create such power, or any form of instrument which imposes duties upon a trustee that he cannot perform without a sale, will necessarily create a power of sale in the trustee.” 2 Perry on Trusts, § 766; Wisdom v. Wilson, 59 Tex. Civ. App. 593, 127 S. W. 1128.

The third paragraph expressly authorizes the executor to sell property to pay the legacy of $50 per month to his wife, and the fifth authorizes him “to take charge of and manage and control, investing proceeds of sales and rents all the rest of said property just as if it was his own until my daughter arrives at the age of 21 years, when said property by my executor or his successor shall be turned over to her.”

We are of the opinion that a proper con-' struction of this will is that it vests the title to .all the property in fee, but in trust, in the executor, and none of it in the child until the expiration of the trust, and that, since it charged him with duties which could not be performed without a power of sale, such power must, even in the absence of express words to that effect, be implied, and that the words, “manage and control” and “invest proceeds of rents and sale, all the rest of said property just as if it was his own,” more clearly indicate that it was the. intention of the testator, to confer the power, but surely the power must be implied from the use of such words. Mortgage Co. v. Massie, 94 Tex. 339, 60 S. W. 544; Cook v. Cook, 47 Atl. 732; Robinson v. Robinson, 105 Me. 68, 72 Atl. 883, 32 L. R. A. (N. S.) 675, 134 Am. St. Rep. 537.

Appellee urges that by paragraph 4 of the will the title to the property in question vested immediately upon the testator’s death in the testator’s daughter. It reads:

“I give, will and bequeath to my beloved daughter ⅜ ⅞ ⅜ after deducting the foregoing bequests to my said wife and my said brother, all of the residue and remainder of all property, real, personal and mixed, of which I may die possessed, and I now declare that I am now the owner of about 5000 head of mixed cattle, and one-fourth interest in the Koehler Hotel”

—and names the property in controversy. Upon the proposition, if we understand it, that since the personal property (cattle) sold for a sufficient sum to cover all the indebtedness, it was not intended by the testator that any other than the personal property should be sold, and they suggest that the independent executor is by law limited, as administrators are, to the sale of personal property first to meet the debts of the estate.

In Dulin v. Moore, 96 Tex. 135, 70 S. W. 742, it was held that where a clause in a will gave certain property to devisees without qualification, and there was a subsequent clause creating a trustee to receive and control same with power to sell, tire two clauses should be construed together, and in so doing the proper construction would be that the intention was that the title was devised in trust for the beneficiaries named. But in this case we have the further terms upon which to determine the intent of the testator as to the real estate that he shall manage, control, and invest all proceeds of sales of all the rest of the property just as if it was his own. This vests in the executor a discretion, which by the facts he has exercised in selling this particular land, because it was not practicable nor for the best interests of the estate to sell the cattle without also selling the land upon which they ran, it also became a matter of discretion to sell this land to pay the unpaid purchase money due upon it to the state, and the provision that he shall invest the proceeds, and that “the rest of the property” (that left after paying debts, legacies, expenses, etc.) is to be turned over to his daughter at the age of’21 years, clearly indicates that the executor was not confined to sales of property for the payment of commuility debts.

We therefore hold that the contract of sale executed by both the survivor and the executor and the confirmation by the executor’s deed and the receipt of the purchase price by the latter conveyed title to appellants. The cause therefore must be reversed and rendered for appellants; and it is so ordered.

WALTHALL, J., not sitting.
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