text:
    NEWTON COUNTY BANK v. MONTGOMERY et al.
    (No. 6821.)
    (Court of Civil Appeals of Texas. Galveston.
    April 8, 1915.)
    Bills and Notes <§=^>299 — Presentment and Protest — Liability or Indorsees.
    Under Rev. St. art. 579, providing that the holder of any negotiable promissory note may, in order to fix the liability of the makers or indorsers, bring suit before the first term of the district or county court at which suit can be brought, or before the second term of such court, after the accrual of the right of action, upon showing good cause why action was not brought before the first term, suit need not be brought at either the first or second term of court in order to fix the liability of indorsers on a note, which by its terms waives presentment for payment and protest. .
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 680-705; Dec. Dig. <§=> 299.]

      Appeal from Newton County Court; W. E. Gray, Judge.
    Action by the Newton County Bank against E. P. Montgomery and others. From a judgment for defendants, plaintiff appeals.
    Reversed and remanded.
    Wightman & Hancock, of Newton, for appellant.
   LANE, J.

This action was brought by the Newton County Bank on the 26th day of March, 1913, against the Merchants’ Produce Company, a corporation, as principal makers, and against E. F. Montgomery, R. D. Hines, and F. W. Plines, parties composing the firm of R. D. Hines & Bro., as indorsers, to recover upon a promissory note executed and delivered by the Merchants’ Produce Company to said Montgomery. This note was dated February 17, 1911, was payable to the order of said E. F. Montgomery on the 17th day of August, 1911, has the usual stipulation for attorney’s fees in the event default is made in payment after maturity, and contains a clause waiving presentment for payment, days of grace, protest, etc. Said note was, indorsed on its back as follows:

“Pay to Burkeville Post.
“E. F. Montgomery.
“Pay to Newton County Bank.
“Burkeville Post.
“E. F. Montgomery.
“R. D. Hines & Bro., per R. D. Hines.”

The defendant Montgomery answered that plaintiff had not brought suit on said note in time so as to bind him as an indorser thereof, and that no proper protest of said note was had after it became due. He also filed his plea in reconvention, wherein he alleges that the plaintiff bank was indebted to him in the sum of $431.07, and prayed for judgment over against said bank for the balance due him of $89.78.

The defendants R. D. and F. W. Hines, for themselves and for said firm of R. D, Hines & Bro., answered that, while their names appear on the back of said note as indorsers, they were not in fact such; that they were induced to put their names on said note, after they had sold it to plaintiff, by its cashier, J. S. Peters, who had them to sign said note for the purpose of showing where the same came from, and how it came into the bank’s possession; ' and further that said Peters, as an inducement to have them sign the note as indorsers, told them that the bank held securities of E. F. Montgomery, the payee and prior indorser, and that he would use such securities to protect said Hines in their in-dorsement of said note, and that such statement induced them to indorse the same.

Plaintiff, in its supplemental plea, excepts to that portion of defendant Montgomery’s answer that sets up his cross-bill as being too indefinite to require answer, and further pleads the two years’ statute of limitation in bar of any recovery on said cross-bill.

The case was tried before the court without a jury, and the court rendered judgment that plaintiff do not recover of the defendants, and that defendant Montgomery do not recover on his cross-bill, and that both defendants recover the costs incurred by them, respectively, from the plaintiff.

Upon proper request the trial court filed a mixed finding of facts and conclusions of law as follows:

“Conclusions of Law and Fact.
“Article 579, Texas Civil Statutes, says in part that the holder of any bill of exchange or promissory note, assignable or negotiable by law, may secure and fix the liability of any drawer or indorser of such bill of exchange, and every indorser of such promissory note, without exchange, or against the maker of such promissory note, before the first term of the district or county court to which suit can be brought, after the action shall accrue, or by instituting suit before the second term of said court, after the right of action shall accrue, and showing good cause why such suit was not instituted before the first term next after the right of action accrued.
“In this case (No. 98 on the county court docket) the note sued on was given by the Merchants’ Produce Company, of Beaumont, Tex., on the 17th day of February, or Burkeville, Tex., six months after date of instrument. Said note was signed by the Merchants’ Produce Company, and was made payable to E. F. Montgomery or bearer, and had a clause in small script near the bottom waiving by maker and all indorsers presentment for payment, protest, days of grace, etc. Time of extension was also waived. Note shows the following indorse-ments on back: ‘Pay to Burkeville Post. E. F. Montgomery.’ ‘Pay to Newton County Bank. Burkeville Post.’ ‘E. F. Montgomery.’ ‘R. D. Hines & Bro., per R. D. Hines.’ Note also shows to be indorsed by the Newton County Bank.
“Plaintiff sets up in their petition that the Merchants’ Produce Company is actually and notoriously insolvent, and states for cause of action that the above-mentioned company, through their treasurer, D. R. Barry, executed the above-mentioned note, and that said note was delivered to E. F. Montgomery, the defendant. Note was dated on the 17th day of February, 1911, calling for the sum of $341.29, due in six months. .
“Suit was brought on the note at the April term of the county court of Newton county, 1913, over one year after maturity. Several terms of the county court had passed in the meantime. Plaintiff sets up in their petition that the Merchants’ Produce Company are insolvent, and introduces evidence to that fact, but nowhere in their pleadings do they set up and plead that the Merchants’ Produce Company were insolvent at the maturity of the above-mentioned note, nor do they introduce any proof to show that the Merchants’ Produce Company was insolvent at the time that the note matured, nor do they attempt to show any diligence at that time in attempting to collect the note from the makers of the above-mentioned note.
“Plaintiff pleads that said note was regularly protested for nonpayment after the same fell due, and that said note was protested in the time required by law for protest.
“The defendant sets up a general denial of the plaintiff’s petition, and demurs generally to all the pleadings of the plaintiff, and says that nowhere does the plaintiff show that they ever exhausted their remedy against the principal of the note. The defendant shows that more than 12 months had elapsed after the note sued on was due before suit was brought. Defendant sets up that E. F. Montgomery, one of the principals of the note, had paid the note to J. S. Peters, cashier of the Newton County Bank, by placing in trust to Peters several pieces of land situated in Newton county, Tex.
“The court is of the opinion that the plaintiff the Newton County Bank did not bring suit as is required by the statutes; that they waited until several terms of the county court had passed before the filing of the suit on the above-mentioned note.
“The court is of the opinion that the plaintiffs did not show due diligence in trying to collect the note from the maker, the Merchants’ Produce Company, at the time of the maturity of the note.
“(A) Court is of the opinion that the plaintiff did not show good cause why suit was not brought on said note as is required by law.
“(3) The court is of the opinion that the plaintiff should have pleaded and proven the Merchants’ Produce Company was insolvent at the time of the maturity of the note.
“(4) There is no proof before the court that the Merchants’ Produce Company was notoriously insolvent at the time of the maturity of the note.
“(5) The evidence before the court shows that the plaintiff’s attorney made some inquiries here in the town of Newton, and also wrote to some parties in Beaumont, as to the Merchants’ Produce Company’s insolvency, and that they were told here in Newton that the produce company was ‘busted,’ and that what they learned from their Beaumont inquiries were that the company was not in business any more at that place.
“(6) There is no proof that any legal inquiry was made in Jefferson county as to what was done with the assets.of the Merchants’' Produce Company.
“(7) There is no proof before the court that any legal effort was made at the time of the maturity of the note, or at any time was there any effort made to find out the true condition of solvency of the Merchants’ Produce Company.
“(8) While plaintiff pleaded that note was protested as is required by law, the note shows that it was protested on August the 19th, allowing only two days of grace.
“(9) Nowhere does the note show any extension was' made on the face, as is required by law. We are of the opinion that the holder of the note should have shown the extension on the face of the note to protect the holder according to the statutes against the indorsers of said note.
“(10) It is the opinion of the court that the plaintiff should take nothing by his suit, and that the plaintiff should pay all cost that has accrued in the cause.
“(11) It is the opinion that the defendant should take nothing by his cross-action.”

The conclusions of law and fact copied above do not conform to the provision of article 1989, Revised Statutes 1911, to the effect that, upon a trial by the court, the judge shall, at the request of either party, state, in writing, the conclusions of fact found by him separately from the conclusions of law. But, as there is no bill of exception to the action of the court in this particular found in the record, we will consider the same. And as, there is no statement of facts in the record, we are called upon to gather from such conclusions of law and fact, as best we can, what were the real facts presented to the trial court upon which he based the judgment entered. If we understand the findings of the trial judge, they are to the following effect: The note sued upon was executed and delivered by the Merchants’ Produce Company to E. F. Montgomery, as alleged by plaintiff; that said note contained a clause which recites that the makers and indorsers waive the presentment of the note for payment and protest .and days of grace, etc.; that said note was protested on the second day after it became due, not considering three days of grace; that said note was indorsed on its back by E. F. Montgomery, the payee, and by appellee Hines, and that said note was the property of the appellant at the time of the trial; that the appellant did not bring suit on said note so as to bind the indorsers; that said appellant did not use due diligence to collect from the maker of the note at its maturity; that appellant did not show good cause why suit was not brought on said note at the first term of court after it became due; that there was no proof that the maker of said note was insolvent at the time the same became due. The court makes no finding with reference to the cross-bill filed by appellee Montgomery. Upon these findings the trial court concludes that appellant, plaintiff in the court below, was not entitled to recover on said note, and that all costs of suit should be adjudged against him, and that appellee Montgomery should take nothing by his cross-bill.

The trial court, in finding against appellant, ignores the waiver which he found to be a part of the note sued upon, and based his conclusions on the fact that suit was not brought on said note at the first term of the court having j urisdiction of the matter, after it became due, nor at the second term of said court, and that no suit was brought thereon until about one year thereafter.

In view of the fact, as found by the trial court, that by the terms of the note presentment for payment, protest, etc., were waived by the maker and indorsers, it was not necessary that suit should be brought at either the first or second terms of the court to fix the liability of the indorsers. We therefore think that judgment should have been rendered for appellant upon said note, except in so far as the amount due thereon may be offset by the cross-bill pleaded by appellee Montgomery, if the same or any portion thereof be established by proper proof. In the case of Leeds v. Hamilton Paint & Glass Co., 35 S. W. 77, the Court of Civil Appeals for the Fourth District, speaking through Judge Fly, says;

“The following clause is found in the note sued on: ‘The drawers and indorsers severally waive presentment for payment, protest, and notice of protest and nonpayment of this note.’ When presentment of a bill or note at maturity and notice of protest have been waived by the party entitled to them, under the ■ law, the holder is excused from performing these acts. When the waiver is embodied in the instrument itself, the waiver then enters into the contract of every party who signs, whether as drawer, maker, acceptor, or indorser. 2 Daniel, Neg. ínst. par. 1002. Appellants having expressly waived presentment for payment, protest, and notice, it would be an idle consumption of time to inquire into questions raised as to the validity of notice to appellants, or the competency of testimony as to a presentment for payment and protest. The waiver of presentment for payment,' protest, and notice of protest fixed the liability of the appellants who indorsed the note just as the protest would have done had it been required and made. The position that it seems is taken by appellants, that both protest and suit are required to fix the liability of an indorser, is not correct. The statute permits the liability to be fixed by protest or suit. Sayles’ Oiv. St. art. 262. It was not error to exclude evidence of a verbal promise made by II. Hamilton, to whom the note was indorsed by appellants, that he would sue on the note if it was not paid at maturity. The note had been indorsed to the Hamilton Paint & Glass Company by Hamilton before its maturity, and no notice of any agreement made by him to appellants was brought home to it, and it could not be bound by his declaration or promises. If appellants desired suit brought on the note at maturity, they should have paid the amount of it to the holders, and instituted the suit. They cannot claim exemption from liability, as a surety might, because prompt action was not taken, when their liability has been fixed by protest or waiver. 1 Brandt, Sur. § 2.”

Prom what has been said., it is evident that the trial court erred in the judgment rendered, and that appellant was entitled to recover upon its note, unless the amount due thereon should be offset by proof of the cross-bill of appellee Montgomery. Therefore the judgment of the lower court is here reversed, and the cause remanded.

Reversed and remanded.
      ©u^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: MOURSUND, J.

license: Public Domain

text:
    HOUSTON PACKING CO. v. McDONALD, Justice of the Peace, et al.
    (No. 5465.)
    (Court of Civil Appeals of Texas. San Antonio.
    April 14, 1915.)
    Courts <@=169 — Jurisdiction — “Amount in Contro verst”— “Costs. ”
    Attorney’s fees sought to be recovered under Rev. St. 1911, art. 2178, are not merely “costs,” but are a part of the “amount in controversy,” within the statutes fixing the jurisdiction of courts.
    [Ed. Note. — For other cases, see Courts, Cent. Dig. §§ 413-425, 428-436, 443, 456, 458, 465; Dec. Dig. <§n»169.
    For other definitions, see Words and Phrases, Pirst and Second Series, Amount in Controversy ; Costs.]
    Error from District Court, Harris County; Chas. E. Ashe, Judge.
    Petition for mandamus by the Houston Packing Company against W. T. McDonald and others. A demurrer to the petition was sustained, and judgment of dismissal entered on a refusal to amend, and plaintiff brings error.
    Affirmed.
    Hutcheson & Hutcheson, of Houston, for plaintiff in error. Baker, Botts, Parker & Garwood, Lane, Wolters & Storey, R. C. Patterson, and Bentley Nelson, all of Houston, for defendants in error.
   MOURSUND, J.

The Houston Packing Company, plaintiff in error, filed suit against the Texas & New Orleans Railway Company before W. T. McDonald, justice of the peace, on the 11th day of December, 1912, for $7.50, damages for lost meat hooks, all costs of suit, and $20 attorney’s fees. The attorney’s fee was sought to be recovered under the provisions of article 2178, Revised Statutes of 1911; a compliance with the provisions of said statute being duly alleged by the plaintiff. Judgment was obtained by the plaintiff for the sum of $7.50, with 6 per cent, interest from January 30, 1912, together with $10 attorney’s fee and all costs of court.

The Texas & New Orleans Railway Company filed an appeal bond within the time required by law and sought to appeal the case to the county court, at law, of Harris county, on the theory that, although the judgment was for a less amount than $20, the amount in controversy was in excess of $20, because plaintiff had sued for an attorney’s fee of $20, as well as the claim amounting to $7.50. The appeal bond was approved by the justice of the peace, and the transcript sent to the county court. Thereafter the Houston Packing Company filed' a motion in the county court to dismiss the appeal for want of jurisdiction. This motion was overruled. On May 15, 1913, the Houston Packing Company filed its petition for mandamus in the district court of Harris county, Tex., alleging the facts above detailed, and seeking to compel the justice of the peace to issue execution on his judgment.

The court sustained a general demurrer to the petition for mandamus, and, the relator having refused to amend, the suit was dismissed.

Plaintiff in error contends that the court erred in sustaining the general demurrer, basing its contention upon the theory that the amount in controversy, as well as the judgment, was less than $20, and therefore no appeal could be taken, and relator could by mandamus compel the issuance of execution by the justice of the peace. The attorney’s fee sued for constituted a part of the amount in controversy within the meaning of our statutes fixing the jurisdiction of the courts, and therefore respondent’s suit was for $27.50, and, the appeal having been duly perfected, the judgment of the justice’s court was set aside and annulled. We had occasion to pass upon this question in the case of St. Louis, B. & M. Ry. Co. v. Knowles, 171 S. W. 245; and after fully considering all the cases cited in appellant’s brief herein, although not discussing all of them, we concluded that an attorney’s fee sued for under the provisions of article 2178 constituted a part of the amount in controversy, and not merely costs. Our reasons for so holding are stated in that opinion and need not be repeated. In addition to the cases therein relied upon, we cite the following eases called to our attention by appellee, viz.: G. & I. Ry. Co. v. Gregory, 59 S. W. 310; Clark v. Ford, 7 Kan. App. 332, 51 Pac. 938; Phenix Ins. Co. v. Stahl, 78 Kan. 448, 528, 96 Pac. 854.

As the facts alleged do not show that the justice’s court judgment is in full force and effect, but show that it has been annulled, the judgment of the trial court is correct, and must be affirmed. We do not express any opinion on the question whether mandamus would be the proper remedy under the facts alleged, were it held that the attorney’s fee sued for constituted costs.

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


author: PLEASANTS, C. J.

text:
    STACEY v. McCLAVE.
    (No. 6745.)
    (Court of Civil Appeals of Texas. Galveston.
    March 3, 1915.
    Rehearing Denied April 8, 1915.)
    Executors and Administrators <S=o449— Claims — Service—Pleading—Variance.
    The evidence showing plaintiff took charge of deceased’s business under an agreement to receive as compensation a share of the profits, he may not, even if the evidence show the amount of profits, recover in. an action against the ad-ministratrix for a certain sum as due him, as the value thereof, for services rendered deceased as bookkeeper and clerk.
    [Ed. Note. — For other cases, see Executors and Administrators, Cent. Dig. §§ 1850-1854; Dec. Dig. <@=449.]
    Appeal from Liberty County Court; I. B. Simmons, Judge.
    Action by C. McClave against Hattie E. Stacey, administratrix. Judgment for plaintiff, and defendant appeals.
    Reversed and rendered.
    Stevens & Stevens, of Liberty, for appellant. Marshall & Harrison, of Liberty, for appellee.
   PLEASANTS, C. J.

This suit was brought by appellee against appellant as administra-trix of the estate of William Stacey, deceased, to recover the sum of $904.94 alleged to be due plaintiff for services rendered the deceased as bookkeeper and clerk in a mercantile business owned by deceased in the town of Devers, in Liberty county, in the years 1910 and 1911. In addition to a general denial, the defendant specially pleaded, in substance, as follows:

“That about the 24th day of January, 1910, the said William Stacey, deceased, being the owner of a certain stock of goods, wares, and merchandise at Devers, Tex., of the value of two thousand seven hundred ($2,700.00) dollars, the said William Stacey, deceased, and plaintiff entered into an agreement by the terms of which the plaintiff was to take charge of the storehouse containing said stock of goods and conduct a mercantile business with the said stock of goods; the said William Stacey to furnish the capital and goods. In consideration of the services rendered by 'the said plaintiff in conducting said mercantile business, it was agreed that the plaintiff and the defendant should equally share in the profits of said business, it being understood, however, that the plaintiff was not to become the owner of any of said goods unless he furnished one-half of the invoice value, which option the plaintiff had the right to exercise. That the plaintiff never at any time paid any money into said business, wherefore his interest in the same consisted only of a one-half interest in such profits as might be made out of said business. That said William Stacey, deceased, was to furnish a house free of rent to the plaintiff for the first year, which he accordingly did. That said business was conducted by the said McClave from the said 24th day of January, 1910, until about the-day of April, 1911, and that, instead of there being any profits in said business, there was an actual loss, of, to wit, one hundred and sixty-five dollars ($165.00).”

The trial in the court below with a jury resulted in a verdict and judgment in favor of plaintiff.

The evidence shows that plaintiff performed services as bookkeeper and salesman in the store of Wm. Stacey & Co., at Devers, in Liberty county, from January 24, 1910, to April 19, 1911, and that the reasonable value of the services performed by him was $85 per month.

The undisputed evidence further shows that plaintiff took charge of this business under an agreement to receive as compensation for his services a portion of the profits of the business. The testimony of all the witnesses, both plaintiff’s and defendant’s, tends to establish this fact, and plaintiff in his testimony does not deny that such was the agreement. The letter heads used by the firm of Wm. Stacey & Co. show that said firm was composed of Wm. Stacey and plaintiff, C. Mc-Clave. There is no claim that the deceased made any express contract to pay plaintiff for his services, and the undisputed evidence negatives any implied agreement on the part of the deceased to pay him the value of his services, but, as before stated, all of the evidence tends to show that plaintiff was to receive as compensation for his services a portion of the profits of the business. There is no evidence showing what, if any, profits were made during the time plaintiff conducted the business. If the evidence had been sufficient to show the earnings or profits of the business, plaintiff could not upon his pleadings in this suit recover any portion of said profits.

Because, in our opinion, upon the undisputed evidence, plaintiff is not entitled to recover anything in this suit, the judgment of the court below is reversed, and judgment here rendered in favor of appellant.

Reversed and rendered.


author: KEY, C. J.

text:
    BROOKE SMITH & CO. v. DENNIS.
    (No. 5478.)
    (Court of Civil Appeals of Texas. Austin.
    April 7, 1915.)
    Appeal and Error >®=»499 — Preservation op Grounds op Review — Objections to Charge.
    Dnder Acts 33d Leg. c. 59, § 3 (Vernon’s Sayles’ Ann. Civ. St. 1914, art. 2061), providing that the rulings of the court in the giving, refusing, or qualifying- of instructions to the jury shall be regarded as approved unless excepted to as provided in foregoing articles, where the record contained no bills of exception showing that objections were raised previously to the submission of the case to the action of the court in giving and refusing instructions, all objection thereto was waived.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2295-2298; Dec. Dig. <@=> 499.]
    Appeal from Brown County Court; Frank H. Sweet, Judge.
    Action by Brooke Smith & Co., against H. L. Dennis. Judgment for defendant, and plaintiffs appeal.
    Affirmed.
    Arch Grinnan, of Brownwood, for appellants.
   KEY, C. J.

This is a suit upon a promissory note executed by appellee, H. D. Dennis, made payable to the order of J. W. Stayton, and by the latter transferred to Brooke Smith & Co., plaintiffs in the court below. The defense interposed was that the execution of the note was procured by certain false and fraudulent representations. The question of innocent purchaser is not involved in the appeal. The case was submitted to a jury upon a charge which, in the main, was correct; and from a verdict and judgment in favor of the defendant, the plaintiffs have appealed.

There are but few assignments of error, and most of them complain of the action of the court in giving and refusing instructions to the jury. We fail to find in the record any bill of exception showing that the objections now urged as to the action of the trial court referred to were made in that court before the case was submitted to the jury, as required by the amendment of 1913 (Acts 33d Leg. c. 59, § 3 [Vernon’s Sayles’ Ann. Civ. St. 1914, art. 2061]), and, for that reason, the objections stated have been waived. However, we do not wish to be understood as intimating that either of the objections urged is regarded by this court as tenable.

No reversible error has been shown, and the judgment is affirmed.

Affirmed.
      <§s»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HENDRICKS, J.

text:
    PIPKIN et al. v. WARE et al.
    (No. 755.)

    (Court of Civil Appeals of Texas. Amarillo.
    March 27, 1915.
    On Motion for Rehearing, April 17, 1915.)
    1. Deeds <@=>207, 208 — Actions—Evidence.
    The execution and deliveiw of a deed may be established by circumstantial evidence.
    [Ed. Note. — For other cases, see Deeds, Cent. Dig. §§ 614-632; Dec. Dig. <@=>207, 208.]
    2. Lost Instruments <@=>23 — Deeds—Delivery — Establishment.
    The execution and delivery of a lost deed may be established by the entry of acknowledgment, coupled with the grantor’s nonclaim for many years and failure to deny execution.
    [Ed. Note. — For other cases, see Lost Instruments, Cent. Dig. §§ 51-57; Dec. Dig. <@=> 23.]
    3. Vendor and Purchaser <@=>244 — Bona Fide Purchasers — Who Are.
    Evidence held insufficient to show that plaintiffs were bona fide purchasers without notice of defendants’ claims.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 609-611; Dec. Dig. <@=>244.]
    4. Vendor and Purchaser <@=>229 — Bona Fide Purchasers — Who are.
    Attorneys, employed by a grantor to recover land by setting aside an earlier conveyance, who as compensation received a conveyance of part of the land in controversy, are not bona fide purchasers.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 477-494; Dec. Dig. <@=>229.]
    On Motion for Rehearing.
    5. Vendor and Purchaser <@=>229 — Bona Fide Purchasers — Notice.
    If a purchaser pursues a proper inquiry and ascertains facts which would satisfy a prudent man that there was no defect in title, or if inquiry would not have shown any defect, he may be a bona fide purchaser.
    [Ed. Note. — For other cases, see Vendor and .Purchaser, Cent. Dig. §§ 477-494; Dec. Dig. <@=>229.]
    6. Vendor and Purchaser <@=>229 — Bona Fide Purchasers — Inquiry'.
    Where a prospective purchaser has notice of facts putting him on inquiry, he is bound to make inquiries of his vendor.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 477 — 494; Dec. Dig. <@=>229.]
    7. Adverse Possession <@=>104 — Actions — Evidence.
    While mere nonclaim and nonpayment of taxes will not result in a loss of title save by limitations, such facts are evidence of a grant.
    [Ed. Note. — For other cases, see Adverse Possession; Cent. Dig. §§ 595-602; Dec. Dig. <@=> 104.]
    Appeal from District Court, Hale County; L. S. Kinder, Judge.
    Action by H. J. Pipkin and others against R,. C. Ward and another. From a judgment for defendants, plaintiffs appeal.
    Affirmed.
    C. D. Russell and Graham & Graham, all of Plainview, for appellants. Mathes & Williams, of Plainview, for appellees.

       Writ of error pending in Supreme Court.

   HENDRICKS, J.

This is a controversy in trespass to try title over lot No. 29, in block No. 31, in the town of Plainview, Hale county, Tex., between appellants, M. T. Dalton, as the survivor of D. W. Dalton, deceased, H. J. Pipkin, E. Graham, and E. J. Howard, against the appellees, R. O. Ware and the Dofiohoo-Ware Hardware Company, a corporation, and defendants in the lower court. The plaintiffs, Howard, Graham, and Dalton, claim an undivided half interest in said lot by virtue of a conveyance from H. J. Pip-kin of date August 12, 1910, and recorded the next day, and upon the consideration in the face of the deed “of $10.00 and other valuable considerations in hand paid,” said deed containing a clause of general warranty. The defendant R. O. Ware (appellee in this court) deraigns title through a deed from H. J. Pipkin (one of the plaintiffs), to one I/. S. Moseley, claimed to have been executed and delivered November 5, 1891, from Moseley to Hall by deed executed and recorded March 12, 1892, and through a deed from W. S. Hall to himself dated May 12, 1902, and recorded October 4, 1907. The alleged deed from , H. J. Pipkin to Moseley, through which R. O. Ware deraigns, is claimed to be a lost instrument; and it was agreed,, upon the trial of the cause, that the defendants “had made proper search for [said deed] conveying the lot in controversy, to entitle them to offer secondary evidence of the execution and delivery of such deed, and preliminary proof of search for such deed” was waived. We quote the following from the statement of facts:

Defendants introduced in evidence an entry in the record of acknowledgments taken by S. P. Strong, clerk of the county court of Hale county, Tex., and an archive in the office of the county clerk of Piale county, Tex., being found ' on page 44, and being numbered No. 369, and was as follows:

The jury in response to special issues answered that H. J. Pipkin made, executed, and delivered to L. S. Moseley the deed to said lot, and the appellants assign that the testimony is insufficient to support said answer, for that the only testimony relating to the question of the execution of same—

“was the record of an acknowledgment purporting to be an acknowledgment of such a deed, and this alone is insufficient to prove the execution (or delivery) of the deed, in view of the fact that L. S. Moseley himself stated that he had no recollection of such a transaction.”

They also assign, based upon objections to the deed when offered in evidence, and likewise upon a motion to strike same from the record, that it was never shown by the defendants that there was such a deed from Pipkin to Moseley, nor that the same had been lost or destroyed, and that the entry of the record of acknowledgment was irrelevant and immaterial, and that such record was not notice to the plaintiffs that a deed from Pipkin to Moseley was in existence. A letter from L. S. Moseley to the attorneys representing appellees, of date November 25, 1910, in effect stated that, upon examination of his papers, he was unable to find such an instrument, and had no recollection about such a transaction, but that if he made a deed to W. S. Hall, he must have had title to said lot from some one.

It. O. Ware testified that the Ware-Dono-hoo Hardware Company, of which he was manager, while a partnership, had placed a building upon the lot, and was using the same without any knowledge of the ownership of the property, and while the same was being used, W. S. Hall claimed said lot, and as the result of negotiations between him and Hall he obtained, in consideration of the sum of ?50, the deed from Hall of date May 12, 1902, and that thereafter the Ware-Dono-hoo Hardware Company, first as a partnership, and then as a corporation, continued to use the property for warehouse purposes to some time in 1907. The record shows that during 1907 the said Ware-Donohoo Hardware Company changed to a different management and control, by a transfer of a majority of the stock, which was owned by Ware and Donohoo, and with a further continued use thereafter of said property by said corporation, with a suggestion in this record of a different claim of ownership by said corporation through a different title than that of R. C. Ware.

There- is a suggestion in the record that H. J. Pipkin, the grantor in the alleged lost deed, had been living near Clovis, N. M., for a period of 12 or 15 years prior to the trial of this cause.

This suit was filed in the district court of Hale county, and Mr. Graham, one of the plaintiffs, testified that possibly about 60 days prior to the institution of the suit the firm of Dalton & Graham accepted an offer of employment through E. J. Howard, one of the other plaintiffs, for the purpose of proving H. J. Pipkin’s title to the property, and which employment was the sole consideration for the conveyance by said Pipkin to E. J. Howard and Dalton & Graham of the undivided half interest in the lot by deed of date August 12, 1910, above mentioned. There is no testimony in the record from Pipkin, nor from any other source, of any claim by Pipkin of the title to, or ownership of, said lot during the interim of time between the alleged execution of the Pipkin-Moseley deed, nearly 19 years, and the time of the negotiations between Howard and Graham & Dalton, resulting in the institution of this suit. There is no proof of the payment of taxes by Pipkin upon the property subsequent to the time of the alleged execution and delivery of the deed by him to Moseley of date November 5, 1891.

It having been agreed that defendants had made a proper search for a deed from Pipkin to Moseley, to entitle them to offer secondary evidence of the execution and delivery of same, we are of the opinion that the acknowledgment record, with the absence of claim and the lack of proof of the payment of taxes on the part of I-I. J. Pipkin, the length of time that has elapsed, with the proof of execution and delivery of a conveyance from Moseley (Pipkin’s alleged grantee) to Hall, and the claim by Hall of ownership to said property, in connection with the occupancy of said property, either by Ware or the Ware-Donohoo Hardware Company, coupled with the evidence of the entry of acknowledgment by Pipkin of a deed to Ware, constitute sufficient testimony to present to the jury the execution and delivery of a deed to Moseley by Pipkin, and that said record of acknowledgment, in connection with the other circumstances detailed, was competent and material evidence of that fact. •

A deed may be established by circumstantial evidence. Bounds v. Little, 75 Tex. page 316, 12 S. W. 1109. Appellants quote from the case of Overand v. Menczer, 83 Tex. 130, 18 S. W. 304, that it is necessary, to introduce evidence of the proper execution of an instrument claimed to be lost, that the same once existed as a valid instrument of conveyance. We think an analysis of that cause, as to the insufficiency of the facts commented upon by the court to sustain the lost deed, exhibits the inapplicability of that case to this record, and a more extended quotation from the opinion rather negatives, instead of sustains, the position assumed by the appellants. The court said:

“It is contended that the deed in question was lost. It was nevertheless necessary to introduce evidence of its proper execution, and that it once existed as a valid instrument of conveyance. * * * This evidence may be of direct qr cvrcumstaniial character, but it must be offered.”

The court further said, that there was no hint in the record that such a deed was in existence, except in a statement condemned as hearsay, found in an answer in another cause, and—

“the isolated fact, relied upon by appellees, that the land for a series of years was not rendered for taxes by Mrs. Overand is wanting in probative force, in the absence of other evidence tending to show the execution or the existence of the deed.”

The case of Mayfield v. Robinson, 22 Tex. Civ. App. 390, 55 S. W. 401 (writ of error refused) says:

“This certified copy [a notarial record of acknowledgment], to which appellants also objected, was correctly admitted, not as sufficient alone to establish the delivery of the deed, but in corroboration of the statement of A. O. Herndon, and to show that such a deed was signed and acknowledged on the date, before the officer, and in the county in question. The authority of the clerk to make and certify to the copy and the admissibility of the copy are clear.”

Also see Hutcheson v. Massie, 159 S. W. 317, decided by this court, in which it is held that a notarial record of acknowledgment, in connection with other testimony, is admissible testimony to prove a lost deed. While a writ of error was granted by the Supreme Court in that cause, it was not upon this point.

The case of Trice’s Heirs v. McCaleb, 138 S. W. 792, was one. where the notarial record of an acknowledgment, for the purpose of proving a lost instrument, was rejected, because a sufficient predicate had not been laid. The court said:

“Had the loss of the deed been shown, or had it been proved that it could not be produced on the trial, the evidence complained of would) have been admissible as a circumstance to show its execution and delivery.”

Of .course the court did not mean that you would have to prove that a deed was executed before the acknowledgment was admissible, for if you proved its execution, the record of acknowledgment would not be necessary except as cumulative evidence. The authorities do not condemn a record of an acknowledgment as competent and material testimony, where a sufficient predicate is made as to inability to produce the alleged lost instrument. This litigation does not present a bare record of acknowledgment as the only proof of a lost instrument, which we do not decide; but it presents a record of acknowledgment in connection with other probative circumstances. Pipkin was an antagonistic litigant, claiming adversely to Ware, and we do not think Ware would be required to explore the consciousness of Pipkin and risk a denial as to his execution of such an instrument; but, however, there is some significance in the failure of the denial of execution of such an instrument by Pipkin, especially when the record suggests that several years before the trial the attorneys for Pipkin, not only knew of Ware’s claim, but the claim of the source of same.

The jury also answered that E. J. Howard and Graham & Dalton were not purchasers for value in good faith of the undivided half interest in the lot, and further answered that they had notice that H. J. Pipkin had made a deed to Moseley at the time the Pipkin deed to the undivided interest was made to them. The record is quite suggestive, at least, that prior to the Pipkin deed to them, Graham had actual notice that R. O. Ware had a claim upon the lot. If we should concede that at the time they received the deed and accepted the employment Graham had no actual knowledge of the Pipkin-Moseley deed, at best tbeir knowledge could only be considered a misconception of the source and derivation of Ware’s claim, and upon the doctrine of inquiry, as a jury question, we think the finding upon this issue is sufficiently supported by the testimony.

Again, if Pipkin, actually made the deed to Moseley, through whom Ware claims, in accordance with the jury’s finding, and he then employed attorneys upon a consideration of a conveyance by him of an interest in the same property, which he had previously deeded, how could Howard, Dalton, and Graham become innocent purchasers? Though we may assume (however the record is silent) that after having made the deed to Moseley, at the time he employed the attorneys, he had forgotten the execution of such an instrument, he in effect, however, is enrploying them to recover against a deed which had been previously executed by him. If so, why would not Howard, Dalton & Graham in this character of case stand in the shoes of the grantor? The case of Tobin v. Benson et al., 152 S. W. 642, is one where Benson had been employed to procure a lost deed and place the same upon record, in consideration of which he was granted a portion of the prop-’ erty, and was not one, so far as Benson was concerned, involving an employment to clear, the title to property tending to a repudiation of the grantor’s own deed. Benson procured the substitute deed in that case, which he was employed to do, and placed the same of record, thereby performing the service, which constituted a valuable consideration, and without notice of an unrecorded outstanding title. Here the very employment, when pursued to a final result, makes the performance of the service, in destroying the deed, the consideration of that employment. We do not think innocent purchaser applies to such a case.

In this conception, this court does not impute whatever any element of wrong to anybody; the record, so far as counsel are concerned, does not present any unfair dealing whatever, but a mere insistence of what is conceived to be certain legal rights.

All assignments are overruled, and the judgment is affirmed.

On Motion for Rehearing.

Appellants assert, in their motion for rehearing, that this court was in error in saying that the attorneys for Pipkin, several years before the trial of this cause, not only knew of Ware’s claim, but the claim of the source of same. It is true that there is a statement that the fact of a lost deed was not known until about six months previous to the trial of the cause; however, there is this testimony, which at least is indicative of knowledge of Ware’s claim through Hall and Moseley:

“I can’t be positive when I examined the records and found that Ware was claiming under this other chain of title [the chain from Moseley], My best recollection is that I made no examination until we got ready to file the suit, and that was the first time I knew of the other chain of title under which Ware claims.”

This suit was instituted by appellants September 8,1910. There is in this record the following testimony, which we will admit is rather hard to construe as to its meaning and effect as to the question of notice, and likewise as bearing upon the question of due inquiry:

“My impression is that I looked at the record to see if Pipkin had title, and found that deed from Mr. Pipkin regularly recorded from him on down; but I am not sure when I ascertained that — whether before or afterward.”

As to the question of notice, based upon the doctrine of inquiry, the appellants further say, in effect, that as to any discovery of a conveyance from Pipkin to Moseley, though they may have known, at the time they accepted the deed from Pipkin, that Ware claimed the land, any investigation they would have made would have been fruitless. We, of course, admit the rule that if a purchaser has information and pursues a proper inquiry,, and ascertains facts which will satisfy a prudent man that there is no defect of title, he can still be an innocent purchaser (Bacon v. O'Connor, 25 Tex. 213); and it is likewise the rule, of course, that though inquiry has not been made, but if it had been and notice of defect would not have been discovered, the result is the same (Bowles v. Belt, 159 S. W. 887).

Viewing it as the jury could have viewed it, it is at least inferable that the appellants knew that Moseley deeded to Hall and Hall to R. C. Ware, when'they accepted the deed from Pipkin; they knew that Ware claimed the land. There is a condition in this record ■which we did not analyze in detail in the original opinion, which, it seems to us, is overlooked by appellants. Viewing the testimony, and specially that recited herein, the jury could have found actual knowledge to appellants of the Moseley and Hall deeds; and certainly, as stated, they are presumptively charged with the knowledge of these conveyances on account of their notice of Ware’s claim. It may be they could not have discovered, by inquiry of Moseley, from whom he procured any title, but, having knowledge of such salient facts sufficient to excite inquiry, could they have discovered such information from Pipkin, their own grantor? “If a person has sufficient notice to place him upon inquiry, and does not take advantage of the means at his command to learn the facts, he must be considered as knowing the facts.” Devlin on Deeds (3dAEd.) vol. 2, § 743A, p. 1374. Appellants m&y say, of course, that we could not be expected to inquire of our own grantor and of our own client committing his claim to us for suit whether he had previously conveyed the land; neither would we be expected to go any further than the record. It is the law that one — ■

“is not required to institute inquiries as to the existence of rights of which there is no evidence upon the records, unless there he some fact whioh he hnows, or should Imow, sufficient to eacite inquiry in the minds of prudent persons.” Paris Grocery Co. v. Burks, 101 Tex. 111, 105 S. W. 175. (The emphasis is ours.)

The record of acknowledgment by Pipkin to Moseley of a deed purporting to convey this land is undisputed. Appellants concede in their motion that “article 3697, R. S. provides that the record of acknowledgments is admissible as evidence of the contents thereof” (though denying as to the condition here that the acknowledgment is any proof of delivery). The fact of the execution of a deed to Moseley by H. J. Pipkin, irrespective of delivery, is practically undisputed, though, of course, appellants may not concede the inference.

This suit has been pending since September, 1910, without any denial by Pipkin of the execution, or delivery, of such, a deed, no statement whatever by him, at the time he committed the business to his attorneys to recover this land, that at said time he did not remember any such instrument. What would he have answered appellants if they had inquired? which We think clearly it was their duty, having the knowledge of the other claim, the same as it would have been the duty of any other vendee attempting to obtain title to the property.

Appellants further say, with reference to the fact of nonelaim by Pipkin:

“We have never understood that a person could lose title to property on account of non-claiin and nonpayment of taxes, except by limitation.”

Nonelaim is, however, significant testimony of a grant, when connected' with other circumstances, and has always been so considered. Davidson v. Wallingford, 88 Tex. 625, 32 S. W. 1030; Huff v. Crawford, 89 Tex. 220-221; Stafford v. Kreinhop, 63 S. W. 166.

The motion for rehearing is overruled.
      (g^jFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    POTKA et al. v. CARTER.
    (No. 5472.)
    (Court of Civil Appeals of Texas. Austin.
    April 7, 1915.)
    1. Trespass to Try Title <@=546 — Special Verdict — Conflicting Findings.
    In trespass to try title against a tenant, where the landlord dispossessed the tenant on writ of sequestration, and the jury found that the tenant had abandoned his rent contract before the writ issued, and that the facts stated in the afiidavit for the writ were true, but also found that the landlord had breached the rental contract, the findings were necessarily conflicting, and do not support a judgment for the tenant for damages caused by his dispossession under the v?rit of sequestration.
    [Ed. Note. — For other cases, see Trespass to Try Title, Cent. Dig. § 68; Dec. Dig. <@=346.]
    2. Appeal and Error <@=1073 — Harmless Error — Judgment—Time op Taking Epeect.
    Plaintiff, in trespass to try title, cannot complain that the judgment awarding him possession was declared to be effective from the termination of his rental contract with defendant, which was seven months before the judgment was rendered, and not to become effective from the time of dispossession under sequestration prior to that time, since he could not be harmed thereby.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4240-4247; Dec. Dig. <©=> 1073.]
    Appeal from District Court, Falls County; Richard I. Munroe, Judge.
    Trespass to try title by N. Potka against Ed Carter, in which plaintiff secured possession of the property by writ of sequestration. From a judgment awarding possession of the premises to plaintiff, but giving damages to defendant for dispossession under the writ of sequestration, plaintiff, together with the sureties on his sequestration bond, appeal.
    Affirmed in part, and in part reversed and remanded.
    Spivey, Bartlett & Carter, of Marlin, for appellants. E. W. Bounds, of Marlin, for appellee.
   KEY, C. J.

Appellant N. Potka sued appellee in the usual form of trespass to try .title and for possession of a small plot of ground and a house situated thereon, and sued out a writ of sequestration, under which an officer dispossessed appellee.

Appellee filed a replevy bond, which was approved by the proper officer; but he claimed that appellant prevented him from regaining possession of the house under his replevy bond. He also filed a general denial, a plea of not guilty, and cross-action seeking to recover damages, and alleging, in substance, that he rented from appellant the house referred to, together with about 37 acres of land, which he was to cultivate for the year 1913. He alleged that, as a result of appellant’s suing out the writ of sequestration and by other means preventing him from occupying, using, and cultivating the land, he had sustained certain specified damages. He also alleged that the grounds upon which the writ of sequestration issued were false, and that appellant acted maliciously and wantonly in suing out that writ, and on that account he claimed damages, both actual and punitory.

The case was tried in July, 1914, and after the jury had returned a verdict answering certain special issues, judgment was rendered for appellant for title and possession of the premises sued for, that part of the judgment to take effect on the 1st day of January, 1914, at the expiration of the rental contract between the parties. Judgment was also rendered upon appellee’s cross-action against appellant N. Potka and the sureties on his sequestration bond, for $133.55, and the costs of suit were taxed against appellant Potka. Being dissatisfied with that judgment, Potka and the sureties on his sequestration bond have prosecuted tbis ap'peal.

Without discussing the assignments of error in detail, we hold that the court committed what was perhaps fundamental error when it rendered any judgment for appellee upon his cross-action, because that judgment is without support in the findings of fact. In response to the first special issue the jury found that prior to the time appellant sued out the writ of sequestration appellee Carter had already abandoned and given up his rent contract for the year 1913; and in response to the second issue the jury found that the facts stated in the affidavit upon which the writ of sequestration was issued were true, thereby finding, in effect, that the writ of sequestration was legally issued. Now, if the writ of sequestration was legally issued and executed, appellee was no longer entitled to possession of the house, nor to the use of the land, and therefore he was not entitled to recover any damages upon that score. But it is contended on behalf of appellee that the jury found that appellant had breached the rent contract in the manner alleged in appellee’s answer, and in response to the fourth special issue it seems the jury did so find, and, inasmuch as that finding is necessarily in conflict with the previous findings to the effect that appellee, prior to the issuance of the writ of sequestration, had, in effect, breached the contract, and also found in response to the second issue that the writ of sequestration was legally sued out, we hold that the verdict does not support the judgment for appellee for damages, notwithstanding the fact that the jury found that he had sustained a certain amount of damages. The findings referred to nullified each other, and left the court without sufficient findings upon which to base a judgment awarding damages.

In concluding this opinion we cannot refrain from expressing surprise at a portion of appellant’s first assignment of error, which asserts that the judgment “is erroneous with respect to the title and possession of the. premises in controversy, wherein it decrees that same shall not take effect until January 1, 1914; but it should have been that plaintiff recovered the title and possession of the premises in controversy, and that he recover of defendant his costs.” Now, the judgment was rendered in July, 1914, and,. instead of decreeing that it should not take effect until some future date, it, declares that it shall take effect on the 1st day of January, 1914. So it seems that, instead of the judgment’s postponing the plaintiff’s right of recovery of possession of the land, it operates retroactively, which could not be harmful to appellant. So our conclusion is that so much of the judgment as awards to appellant title and .possession of the premises sued for should be affirmed, and that the judgment as to the issues presented in appellee’s cross-action should be reversed, and the cause remanded.

Affirmed in part, and in part reversed and remanded.
      @=>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    POTKA v. FARMER.
    (No. 5473.)
    (Court of Civil Appeals of Texas. Austin.
    April 7, 1915.)
    Appeal from District Court, Palls County; Richard I. Munroe, Judge.
    Trespass to try title by N. Potka against Ed Parmer, in which plaintiff secured possession of the property by writ of sequestration. Prom a judgment awarding possession of the premises to plaintiff, but giving damages to defendant for dispossession under the writ of sequestration, the plaintiff appeals.
    Affirmed in part, and in part reversed and remanded.
    Spivey, Bartlett & Carter, of Marlin, for appellant. E. W. Bounds, of Marlin, for appellee.
   KEY, C. J.

This is a companion case to the

case of N. Potka v. Ed. Carter, 175 S. W. 812, this day disposed of by this court, and the same judgment is rendered in this case as was rendered in that.

Affirmed in part, and in part reversed and remanded.


author: HUPP, C. J.

text:
    COWBOY STATE BANK & TRUST CO. v. GUINN et al.
    (No. 745.)
    (Court of Civil Appeals of Texas. Amarillo.
    March 13, 1915.
    Rehearing Denied April 10, 1915.)
    1. Banks and Banking &wkey;>112 — Acts of President — Liability of Bank.
    Where a bank president, in selling its stock, was acting as agent of the institution, the bank was liable for his fraudulent representations.
    [Ed. Note. — For other, cases, see Banks and Banking, Cent Dig. §§ 271, 272; Dec. Dig. &wkey;> 112.]
    2. Banks and Banking <&wkey;118 — Representation BY OFFICER — EVIDENCE — SUFFICIENCY.
    In a suit on a note given in payment for bank stock, evidence held to support a verdict that the bank president, who made fraudulent representations, was acting as the bank’s agent.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 1726-1738; Dec. Dig. &wkey;118.]
    Appeal from District Court, Fisher County; John B. Thomas, Judge.
    Action by the Cowboy State Bank & Trust Company against J. O. Guinn and others. Prom a judgment for defendants, plaintiff appeals.
    Affirmed.
    Jno. W. Woods, of Rotan, Harry Tom King, of Galveston, and Theodore Mack, of Ft.. Worth, for appellant. Higgins & Hamilton, of Snyder, and L. H. MeCrea, of Roby, for appellees..
   HUPP, C. J.

This is the second time this case appears in this court by appeal (160 S. W. 1103). Originally appellant bank instituted a suit against appellees, J. O. and J. A. Guinn, on a note for $2,693.90,. dated December 17, 1911, and due March 17, 1912, with interest from maturity at the rate of 10 per cent, per annum, and 10 per cent, attorneys’ fees, payable to the order of the bant. The Guinns pleaded fraud and failure of consideration, and that the bank stock for which the note was given was in fact owned by the bank and was in the name of Arlon B. Davis, its then president, for sale, and further alleging that the original note, of which the note sued on is a renewal, was for $2,352, setting out the renewals. The admission of appellant in its brief will be sufficient without further setting out the ap-pellees’ answer, as follows:

‘Tn other words, a case of fraud, so far as the sale of the capital stock by Davis to the plaintiffs is concerned, was made out in the pleadings.”

Appellant answered by supplemental petition, that it acquired the note in the regular course of business for a valuable consideration, without notice of any of. the alleged misrepresentations, inducing the execution of the note; that the sale of the stock and taking of the note therefor was a personal transaction of Davis with the appellees, and not by him as president of the appellant bank, and that he was without authority in any event as president to make the representations relied upon; that at the time of the alleged sale the entire stock of the bank had been sold, and that it was not the owner of any of its capital stock and had none for sale. The case was submitted to a jury, who returned special findings, upon which the trial court rendered judgment for the appel-lees.

The appellant makes the following commendable statement:

“In view of the findings of the jury, to the effect that Arlon B. Davis made to J. O. Guinn the representations alleged in the answer with regard to the value of the stock in the Cowboy State Bank & Trust Company, and that these representations were false and were material inducements to the defendants, J. O. Guinn and J. A. Guinn, in signing the note sued on in this cause, being answered in the affirmative, and in view of the further fact that the jury, in answer to special issue No. 5, found that J. O. Guinn and J. A. Guinn relied upon the representations made by Arlon B. Davis, we shall omit from this statement any reference to these matters, and shall assume, as we are bound to do, that the representations made by Arlon B. Davis to the appellees were false and were material, and acted upon by appel-lees to their prejudice.”

The brief of appellant is to be commended, also, in omitting the assignments with reference to the charge and the refusal to give special charges because no bill of exceptions was taken, as required by law, and for that reason could not properly be considered, and it therefore presents but one assignment, to wit:

“Because the vei’dict of the jury and the judgment of the court is contrary to the law and the evidence, and is not'supported by the evidence, in this: There is no evidence in this record to warrant the jury in finding that the bank stock in controversy was the stock of the Cowboy State Bank & Trust Company, or that Ax-lon B. Davis, in the transaction with the defendants, was acting for the bank and as the bank’s agent.”

The court submitted to the jury special issue No. 1:

“(a) Was the transaction between Arlon B. Davis and J. O. and J. A. Guinn an individual transaction on the part of Arlon B. DaviS;' whereby in consideration of the note sued on in this case he was selling to the defendants Guinn 20 shares of his stock in the Cowboy State Bank & Trust Company; or (b) was said transaction a transaction had by Davis as agent or representative of the bank for the bank in the sale of stock belonging to the bank?”

The jury answered question No. 1, “As agent for the bank.” The parties on the trial entered into the following agreement, which is copied into the record:

“It is agreed by and between the parties to this suit that at the time of the Guinn transaction in controversy, Arlon B. Davis was president of th'e Cowboy State Bank & Trust Company, and that W. B. Eoy was the cashier of the Cowboy State Bank & Trust Company, and both were acting as such at the time, and that they and each of them were familiar with the entire transaction in controversy.”

J. O. Guinn testified to the representations as set out by him and as having been made by Davis. This witness .testified, further, that Davis, in the first conversation he had with him, said that it would be against the banking laws of the state for the bank to loan its own money to buy its own stock, and that if he closed the deal he would have to arrange the details of the transaction so as to make it conform to the banking laws of the state. If he did not, and the state banking inspector—

“got hold of it, that he would raise cane with him' and' would make it hard for him [Davis] if he [the inspector] caught it, but that he [Davis] would have to arrange the details of it so that it would conform to the banking laws of the state so as to avoid the banking laws.”

Davis told the witness, so he testified, that the moment he signed the note he would become a stockholder in the bank, and that his name would be entered on the register and kept in the vaults and, further, there was no such thing as bank stock. He testified he (witness) was ignorant in such matters, and accepted Davis’ statement as true. He testified that after getting uneasy about the matter he went to the bank and inquired of the cashier, Mr. Eoy, to ascertain if he was a stockholder. He then said to him, “Mr. Guinn I am a friend to you hoys, and you have not been treated right”; that he did not examine at that time the books. After-wards Foy said, in order to satisfy his mind, he would show him that he was not a stockholder, and would show him the register, and upon examining the register he found his name was not on the register, and that when he found out he was not a stockholder, he refused to further'renew his note; that Eoy told him if he would renew the note and secure it with a deed of trust on land he would try to get his stock for him; that Dr. Callan, who succeeded Davis in the presidency of the bank, when Guinn called upon him for the stock, told him to be easy for two or three weeks, and he thought he could get the stock; that he was trying to get Davis down there to straighten up his crooked business; that he afterwards called upon the bank with his attorney and demanded to see the books, and was again told he was not a stockholder. On cross-examination witness testified Davis, in offering the stock for sale—

“said he wanted to place it with me, but the stock belonged to the bank, was the way I understood it. As to whether he told me in so many words that the stock belonged to the bank, will say that is the way I took it, for he says, ‘Now, Dick, the bank can’t loan money to buy its own stock because it is against the banking laws of the state, and I will have to arrange so the stock can be kept in my name so as to avoid the banking laws.’ ”

Davis gave Guinn the following letter at the time the original note was signed and delivered:

“Kotan, Texas, August 25, 1910.
“J. O. Guinn, Camp Springs, Texas — Dear Sir: This is to certify that I have sold you twenty shares of my stock in the Cowboy State Bank & Trust Company, transferable to you or your order upon the payment of your note of August 17, $2352.00, to said bank and maturing Deb. 17, 1911, or a renewal or substitution thereof.
“Yours very truly, árlon B. Davis.
“Witness:
“W. L. Foy.
“J. A. Guinn.”

The original note and the renewals thereof were payable to the order of the Cowboy State Bank & Trust Company. The facts show that when the note was signed by J. O. and J. A. Guinn, that Foy, who witnessed the above, was cashier of the bank, and was within a few feet of the negotiations, and heard, if not all of them, at least a part. When the note was signed Davis handed it to Foy as cashier of the bank and directed him to credit his, Davis’, account, with $2,-OQO, the bank taking the discount It is shown this amount was subject to the check of Davis. This amount the bank applied to indebtedness due the bank by Davis.

Dr. Callan, who succeeded Davis as president of the bank, in February, 1912, testified that Guinn demanded the stock from him, and that he told Guinn the bank had no stock to issue; that his understanding was that Davis had some stock as collateral to some indebtedness of his in the bank. He also testified to buying stock in the bank on two occasions. In each instance he bought the stock through Davis. The first was the stock of Mr. Leonard; the last stock which was issued upon the increase of the capital stock he bought direct of the bank through Davis. He gave his note for this stock which he testified took him nearly two years’ to pay. He did hot think the last stock he bought was attached to his note as collateral.

Foy, the cashier, testified: That he was present during the transaction. At that time Davis had $9,000 or $10,000 stock in the bank. That he told Foy in the presence of the Guinns that he had sold them, or one of them, $2,000 worth of his stock, and that he would hold it as collateral to secure Guinn’s note. That the Guinns renewed their note three times, and Davis, while president handled the renewals. After ’Gallan, became president they were called upon for another renewal, with real estate security. Guinn demanded his stock, and Foy assured him if he renewed the note with the security he would get his stock. He further states that he had not, at any time, refused to deliver the stock if the appellees would renew and secure the note, that was the very thing he was trying to do, renew the note and deliver the stock, and that he was in a position at all times to deliver them the stock. He says Davis had certificates of stock of some $4,000 or $5,000 in his, Davis’, private papers, in the; bank, and that he had authority from Davis when the note was paid to issue it to appellees, and it was in the vaults for that purpose, subject to his, Foy’s, control. This witness also shows that most of the stock he purchased in the bank he bought from Davis or from a Mr. Bailey, a kinsman of Davis and the former cashier of the bank. He borrowed money from the bank and gave his note for the money and took the money and bought this stock. He testified the bank did not hold the stock for the Guinn boys, but that he personally held it as an individual for Davis and did not hold the stock for the bank or as collateral security on the note, but was holding it until the note was paid ; that the Guian boys at all times were capable of paying their note. The reason he did not deliver the stock was appellees did not pay the money on the note. “When they paid me the money on the note, then I was willing to deliver to them their stock and never until then — that is right. Yes, sir; whenever they paid that note, I could have delivered to the Guinns their stock. The note represented all that the bank held against the Guinns, and the stock represented what the agreement was between Davis and the Guinns. As to whether, then, the cash represented the payment for the stock and not payment for the note also, if they had tendered the cash it would have represented the payment for the note, and if they had produced the cash, I would have given them their note. Yes; we would also have delivered them their stock, but we would not have delivered them their stock unless they had paid cash in full on that note.” He further testified that he had an agreement with Davis that he would take the note and give Davis credit if Davis would hold the stock to secure the bank. Davis nev^r indorsed the original or the renewal notes. The evidence does not show that he was held by the bank •as being liable on tbe note to the bank by appellees.

Davis’ testimony shows that the bank increased its capital stock in 1909, $25,000; that of this stock he took $8,000, W. R. Bogart, $7,000, and A. R. Bogart, $5,000, and the other $5,000 was sold to other and various parties; that to pay for his $8,000 he borrowed money from the Union National Bank, $8,000. ■ He testified that the minute books of the bank on May 27, 1910, show that the directors allowed him credit for $8,000, and he used this money to pay the loan he had obtained to pay for the stock purchased. When the new stock was issued he was indebted to the bank for $5,000. This sum was money he got from the bank to pay other banks for money borrowed to pay for the stock in the original corporation. This witness’ testimony shows that at the directors’ meeting approving the note of appellees, there were present Eoy, W. R. Bogart, N. Harrison, and Arlon B. Davis. The evidence, as shown by the minute books, is that these directors were each heavy borrowers from the bank. After the issuance of the new stock, Harrison was owing $6,500; A. R. and W. R. Bogart were indebted for their firm, $10,083.88. Davis testified that he, then at the trial, owned $4,000 of the stock, which had been up as collateral to a note given by Harrison to the bank, which he (Davis) after-wards purchased. It is shown by all the evidence that the appellees were regarded as solvent, and their notes signed by them individually, good by the officers of the bank. The testimony of the appellant’s witnesses is that the stock for which appellees gave the note belonged to Arlon B. Davis and did not belong to the bank at the time of the transaction between 'Davis and appellees. We believe there are facts sufficient to authorize the finding of the jury that the stock belonged to the bank when sold to appellees by Davis, and that in its sale Davis was the agent of the bank. This being true, the fraudulent representations, made by Davis, as the agent of the bank, rendered the bank liable therefor. Cowboy State Bank v. Guinn, 160 S. W. 1103; Bank v. Cruger, 91 Tex. 446, 44 S. W. 278.

If Guinn’s evidence is to be believed, he and Davis, when the stock was purchased, regarded it as the property of the bank, and that the bank could not loan its money to purchase its own stock, and it was arranged to be kept in the name of Davis. This, record strongly suggests that such shifting and scheming had been resorted to by some of the directors, if not all of them, and other stockholders. The method of buying this stock, as shown from the testimony of the cashier and the then president, to say the least of it, was an unusual one. Davis claimed to have been selling the stock as his own, yet took a note payable to the bank. He did not indorse the note or in any way become liable to the bank for its payment but nevertheless retained the stock until the money was received on the note, and at the same time the note was regarded as gilt edge. The cashier says the stock was in his possession, to be held until the note was paid, but yet says it was not held as collateral. He says he was holding it for Davis, and yet Davis had received the cash on this note, and thereby received full consideration for the stock. What interest could Davis have in retaining this stock when he had been paid for it and was in no way responsible for the payment of the note? If sold the stock was not his. If Guinn got" the money and paid for it, the stock was his. If it was not the bank’s property, or held by the bank to secure the note, why should the cashier refuse to deliver it? The explanation readily suggested is that it was the bank’s property, and nothing was given for it but a note which was in clear violation of the law. It is certainly suggested by the record that ini order to increase the capital stock the directors borrowed the money to pay for stock subscriptions, and after the charter was obtained the directors gave to Davis a right to borrow just the amount of his stock subscription, which amount he did borrow, and by that amount paid oft the loan which he had obtained to comply with the law requiring the capital stock to be fully paid in. This stock, or at least a part of it, was held, the cashier says, in the bank. Davis would not deliver it when he sold it and got the cash; the bank would not deliver it until the note was paid, which its officers pronounced good, and which was not put up as collateral to the note. We think from the fact's the jury was warranted in inferring that this stock was held in the name of Davis for the bank, and when he sold it he did so as the agent of the bank. If he did, then it was not only a failure of consideration, but the note was void. Gen. Bonding, etc., v. Mosely, 174 S. W. 1031, recently decided by this court, Judge Hall rendering the opinion. We believe this case should be affirmed; and it is accordingly so ordenad.
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