author: JENKINS, J.

text:
    GUARANTEE LIFE INS. CO. OF HOUSTON v. CITY OF AUSTIN.

    (Court of Civil Appeals of Texas. Austin.
    March 11, 1914.
    Rehearing Denied March 25, 1914.)
    1. Taxation (§ 167) — -Cokpobations—Cap-ital Stock — Employment in Business.
    Where, pursuant to Acts SOth Leg. c. 170, § 8, authorizing insurance companies to deposit with the state treasurer their capital stock, or the securities covering it, and at their option to withdraw or substitute such stock or securities, an insurance corporation having its office in Houston deposited the securities in which its capital stock was invested, thereby obtaining a better financial standing by reason of its ability to advertise and print on its policies the fact' of such deposit, such securities were not employed in its business in Austin so as to be subject to taxation there.
    [Ed. Note. — For other cases, see Taxation, Cent. Dig. § 290; Dec. Dig. § 167.]
    2. Taxation (§ 74) — “Pbopebty” Subject-Evidences oe Debt.
    For the purposes of taxation, bonds, notes, and other negotiable instruments are “property,” and not mere evidences of debt, in view of Rev, St. 1911, art. 7505, defining personal property for the purposes of taxation as including all evidences of debt owned by citizens of the state.
    [Ed. Note.' — For other cases, see Taxation, Cent. Dig. §§ 159, 160; Dec. Dig. § 74.

    For other definitions, see Words and Phrases, vol. 6, pp. 5693-5728; vol. 8, p. 776S-7770.]
    3. Taxation (§ 276) — Pbopebty Subject-Situs oe Pbopebty.
    Where, pursuant to Acts 30th Leg. c. 170, § S, authorizing insurance companies to deposit their capital stock, or the securities covering it, with the state treasurer, an insurance company having its office in Houston did so deposit the secured notes in which its capital stock was invested, and the corporation advertised and printed the fact of such deposit on its policies, thereby obtaining better financial standing, the situs of such notes was in Austin, and they were taxable there under Const, art. 8, § 11, providing that all property shall be assessed for taxation and the taxes paid in the county were situated, since, aside from the question of whether they were property or only evidences of debt, the fiction of law that tangible property follows its owner is disregarded in the state, when opposed to the equitable consideration that property ought to bear its just proportion of taxes at the place where it receives governmental protection.
    ['Ed. Note. — For other cases, see Taxation, Cent. Dig. §§ 453, 466-468; Dec. Dig. § 276.]
    4. Taxation (§ 587) — Pbopebty Subject-Situs oe Pbopebty.
    The illegal assessment and voluntary payment, in the city where a corporation was domiciled, of a tax on securities having a situs in another city was not a defense to the enforcement of a tax thereon by the city where they were situated.
    [Ed. Note. — For other cases, see Taxation, Cent. Dig. §§ 1196-1200; Dec. Dig. § 587.]
    Appeal from District Court, Travis County; George Calhoun, Judge.
    Action between the Guarantee Life Insurance Company of Houston, Tex., and the City of Austin. From a judgment for the City, the Insurance Company appeals.
    Affirmed.
    Lane, Wolters & Storey and Wm. A. Yin-son, all of Houston, for appellant. J. Bould-in Rector, City Atty., J. W. Maxwell, and Lightfoot, Brady & Robertson, all of Austin, for appellee.

      For other eases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

       Application for writ of error pending in Supreme Court.

   JENKINS, J.

This case was tried before the court, without a jury, on the following agreed statement of facts (omitting exhibits):

“(1) That the city of Austin is a municipal corporation, duly and legally incorporated by a special act of the Legislature of the state of Texas, and having its domicile in Travis county, Tex., and whose mayor is A. (P. Wooldridge.
“(2) That the Guarantee Life Insurance Company of Ho.uston, Tex., is a corporation, duly and legally incorporated under and by virtue of the laws of the state of Texas, for the corporate purpose of doing a life insurance business in Texas, and whose principal place of business is in Houston, Harris county, Tex., and whose secretary is H. W. Coeh-nower, who resides in Harris county, Tex.
“(3) That the Guarantee Life Insurance Company of Houston, Tex., has filed all the articles of incorporation, etc., paid all the franchise taxes, etc., and in fact performed all the obligations and duties required of it by the laws of the state of Texas, and by the rules of the commissioner of insurance and banking of the state of Texas, to properly and legally do business in the state of Texas, but has not paid to plaintiff the taxes claimed by it.
“(4) It is agreed that, under and by virtue of its charter of incorporation, the plaintiff has, and continually has had, since the date of its original incorporation, the power and authority, to be exercised by its city council, to levy and collect annual taxes for current expenses and public free schools, and to pay interest and sinking fund annually on valid bonded indebtedness of the city, and for various other purposes, 2% per cent, on the assessed value of all property in said city, on property made taxable by law for- county and state purposes.
“(5) It is agreed that plaintiff, acting under and by virtue of the power and authority so vested in it, and by its city council, by ordinances duly passed for that purpose, and duly approved by its mayor, on the dates hereinafter-mentioned, did lawfully levy the following taxes for the years hereinafter mentioned and set out; the amounts of said taxes levied for the purposes set out being the sums levied on each $100 worth and valuation of all property situated within the corporate limits of said city, and taxable by law for state and county purposes:
“1908.
“For the year 1908, by ordinance duly passed on October 19, 1908, and approved October . 20, 1908, for current expenses and general improvements of the city and its property, $1 on each $100 worth of valuation of all property in said city, for the purpose of paying interest and creating a sinking fund on the valid bonded indebtedness of the city, 50 cents on each $100 worth and valuation of property, and, for the support of the public schools of the city, 33% cents on each $100 worth and valuation of such property.
“1909.
“For the year 1909, by ordinance duly passed December 29, 1909, and approved December 29, 1909, for current expenses and general improvement of the city and its property, 95 cents on each $100 worth of and valuation of all property in said city, and, for the payment of interest .and creating a sinking fund on the valid bonded indebtedness of the city, 38 cents on each $100 worth and valuation of property, and, for the support of the public free schools of the city, 33% cents on each $100 worth and valuation of such property.
“(6) It is agreed that all taxes properly and lawfully levied and assessed by virtue of the charter and ordinances of the said city of Austin become a' first lien on said property, and that, in case the court shall hold that the defendant is due taxes on the property described herein, and in plaintiff’s petition, or any part thereof, that the plaintiff is entitled to a lien on said property to secure the payment of said taxes.
“(7) It is further agreed that, in the assessment of the property described herein, the same has been duly and legally assessed in accordance with all forms and regulations of the city charter, and the ordinance applying thereto.
“(8) It is agreed that, under and by virtue of the city charter of the city of Austin, and all ordinances now in force by said city, that the whole amount of taxes bears interest at the rate of 6 per cent, per annum from the date said tax became delinquent, and that the said city has a lien on the property to secure the payment of the said interest, if entitled to recover of defendant said taxes.
“(9) It is agreed that the city, under its charter, and by proper ordinance, has provided for the collection of an additional 5 per cent, upon the amount of said delinquent taxes as a penalty against the delinquent taxpayer failing, neglecting, or refusing to pay' said taxes before the same shall have become delinquent, and that the. said 5 per cent, penalty shall be a part of said taxes and a lien against the property on which said taxes are due, if entitled to recover of defendant said taxes. •
“(10) It is agreed that the city charter of the city of Austin provides that, if the city assessor or collector shall discover any property subject to taxation for any year heretofore, and which shall for any cause escape taxation, he shall require the same to be listed and assessed according to the rate of taxation levied for the year or years it was omitted, and enter the same as a supplement to the next roll, stating the year, and the taxes thereon shall be collected in the same manner as other assessments: Provided, that such supplementary roll may be made at any time, and reported to the city council for its approval. The taxes assessed upon such supplemental rolls shall be due at once upon approval of such roll by the city council, and, if not paid within 60 days thereafter, shall bear interest at the rate of 6 per cent, per annum, and may be collected by seizure and sale or suit, as provided for the collection of other taxes. And it is further agreed that the assessment of the property involved in this suit was made and approved by the city council of the said city of Austin on the 12th day of October, 1912, and that such assessment was duly and legally made and said .rolls approved on said date under and by virtue of the charter of the city of Austin, and that the said taxes became delinquent on the 12th day of December, 1912, and, by reason of the failure of the defendant herein to pay said taxes, the same bears interest from said 12th day of December, 1912, at the rate of 6 per cent, per annum, and, further, by reason of the said defendant’s failure to pay said taxes on said date, the said penalty of 5 per cent, then and there became due and payable: Provided, plaintiff is entitled to recover of defendants said taxes.
“(11) It is hereby agreed that the defendant herein deposited in the state treasury of the state of Texas the securities hereinafter named, under provisions of section 8, c. 170, of the General Laws of Texas, enacted by the Thirtieth Legislature, and approved April 24, 1907, p. 318, Acts of Thirtieth Legislature 1907, which reads as follows:
“ ‘Sec. 8. That any insurance company coming within the provisions of this act, or the stockholders thereof, may, in addition to the deposit required by this act, at its or their option, deposit with the treasurer of this state the capital stock or any part thereof, of such company, or securities covering such capital stock, and may, at their option, withdraw or substitute such stock or securities so. voluntarily deposited; provided, that the substituted securities shall be approved by the insurance commissioner.’
“The securities which were so deposited on January 1, 1908, were in the following amounts and character: One note for §75,-000, executed by Faber Planting Company on the 23d day of August, 1906, and due on-the 23d day of August, 1916, which said note is secured by a deed of trust on 4,000 acres of land. And one note for §25,000, executed by H. Masterson on February 7, 1907, and due February 7,1908, which said §25,000 note is secured by four vendor’s lien notes, Nos. 1 to 4, three for §25,000 each, and one for §15,000, making a total of §90,000, which said vendor’s lien notes were executed by the Texas Town Lot Improvement Company, and payable to H. Masterson. That said §25,-000 note was renewed in the year 1908, to become due in 1910. All of which said notes and deed of trust were on deposit in the state treasury in the city of Austin, Tex., on the 1st day of January, 1908, as was permitted by law, and which said two notes so deposited in the state treasury as aforesaid were and are of the aggregate reasonable* cash, market, and face value of more than §100,000.
“For the year 1909 there' remained on deposit by the defendant, under like circumstances and conditions in said state treasury, on the 1st day of January of said year 1909, the following amount and character of securities : One note for §75,000, executed by Faber Planting Company on the 23d day of August, 1906, and due the 23d day of August, 1916, which said note is secured by a deed of trust on 4,000 acres of land. And one note for §25,000, executed by H. Masterson on February 7, 1907, and due February 7, 1908, which said §25,000 note is secured by four vendor’s lien notes, Nos. 1 to 4, three for §25,000 each, and one for §15,000, making a total of §90,000, which said vendor’s lien notes were executed by the Texas'Town Lot Improvement Company, and payable to H. Mas-terson. That said §25,000 note was renewed in the year 1908, to become due in 1910. All of which said notes and deed of trust were on deposit in the state treasury in the said city of Austin, Tex., on the 1st day of January, 1909, as was permitted by law, and which said two notes so deposited in the state treasury as aforesaid were and are of the aggregate reasonable cash, market, and face value of more than §100,000.
“(11a) It is agreed that, upon the making of said deposit, the defendant received the official receipt of the state treasurer therefor, and that, after the making of said deposits and the issuance of receipt of the state treasurer therefor, the defendant advertised the fact of the issuance of such deposits and such receipts, and printed such fact upon the policies issued by said defendant.
“(12) It is agreed that all of said securities were payable at the home office of the defendant in the city of Houston, Harris county, Tex., together with principal and interest, and not in the city of Austin, Travis county, Tex.; that, while said securities were in the custody of the treasurer of the state of Texas, defendant, under the terms of said act of 1907, could at any time withdraw the same, or any part thereof, substitute other credits therefor, if it was desired, or withdraw the entire deposit at any time at its pleasure,. without substituting other securities therefor.
“(13) It is agreed that on January 1,, 1908, the capital stock of defendant was §100,-000, and that the surplus was §16,134.24; that on January 1, 1909, the capital stock of defendant was §100,000, and its surplus was §13,419.99; that of the said capital stock of defendant there was invested in the said securities on deposit with the state treasurer at Austin the sum of §100,000 on January 1, 1908, and the sum of §100,000 on January 1, 1909.
“(14) It is further agreed that the defendant had and owned moneys, credits, securities, and other personal property in the city of Houston, Harris county, Tex., and elsewhere, on the 1st day of January, 1908, to the amount and value of §116,134.24, which is shown by a verified sta Cement of the auditor of the said defendant company hereto attached marked ‘Exhibit A,’ and made a part hereof; and it is further agreed that the said company assessed for taxation moneys, credits, securities, and other personal property to the amount of and value of §62,500, as will be shown by a verified copy of the as-sesment rolls of the city of Houston, Harris county, Tex., for the year 1908, which is hereto attached and marked ‘Exhibit B,’ and made a part hereof.
“It is hereby further agreed that the defendant had and owned moneys, credits, securities, and other personal property in the city of Houston, Harris county, Tex., and elsewhere, on the 1st day of January, 1909, to the amount and value of §113,419.99; which is shown by the verified statement of the auditor of defendant hereto attached and marked ‘Exhibit C,' and made a part •hereof; and it is further agreed that the said company assessed for taxation moneys, credits, securities, and other personal property to the amount and value of §75,000, as will be shown by the verified copy of the assessment rolls of the city of Houston, Harris county, Tex., for the year 1909, hereto attached and marked ‘Exhibit D,’ and made a part hereof.
“(14a) It is agreed that for many years it has been the custom ?.nd policy of the city of Houston to assess securities of banks and insurance companies domiciled in said city of Houston at less than the full valuation, and that during the year 1908 the securities of the Guarantee Life Insurance Company were assessed on a basis of 60 per cent, valuation, and during the year 1909 on a basis of 66% per cent, of their value, as is shown by the affidavit hereto attached from James P. Welsh, assessor ana collector of the city of Houston during the years 1908 and 1909.
“(15) It is agreed that during each of "the years 1908 and 1909 the defendant, through its general counsel and fourth vice president, J. E. Wolters, and other officers, at various times made credits upon said notes of interest payments, and on one occasion withdrew the note for $25,000, executed by H. Master-son, and had same forwarded by mail to the First National Bank of Houston, Tex., and had the said H. Masterson to execute a new note for like amount, which said new note was then deposited with the state treasurer, and the original note surrendered to the maker.
“(16) It is expressly understood and stipulated that nothing contained in this agreement shall be construed as a waiver on the part of the defendant to contend that, as a matter of law, the city of Austin has no jurisdiction, authority, or power whatsoever, either under its charter or any general law, to render for taxation or collect taxes upon any intangible personal property, including the securities deposited by defendant in the state treasury for 1908 and 1909 that may be on deposit, located, or situated in any state department in the capitol of the state pf Texas, or any other building or premises over which the state of Texas has exclusive jurisdiction and control by reason of the fact that same is property belonging to the state of Texas.
“(17) It is further agreed that, if the plaintiff is entitled to a recovery of the defendant for the taxes sued upon, it is entitled to judgment in the amounts named in Exhibits A and B, attached to plaintiff’s petition, aggregating the sum' of $3,671.48, taxes and penalty, and in addition 6 per cent, interest thereon from December 12, 1912. [Signatures of Attorneys.]
“It is further agreed that the charter of the city of Austin is hereby made a part of this agreed statement of facts, the same as if a copy were attached thereto, and that either party may read to the court or cite any article, section, or part thereof, for the purposes of the trial of this cause.
“It is further agreed that the deposit of the securities herein described was made by the defendant with the state treasurer on August 10, 1907; that the H. Masterson $25,000 note remained on deposit with the state treasurer until March 28, 1911, when it was delivered to the defendant, and in lieu thereof there was deposited with the state treasurer on said date two notes on R. E. Sears, aggregating $26,000; that the $75,000 Faber Planting Company note remained on deposit with the state treasurer until April 29, 1913, when same was delivered to defendant, and there was substituted therefor other securities, aggregating $76,500, which, together with the Sears notes, aggregating $26,000, still remain on deposit with the state treasurer. [Signatures of Attorneys.]”

Judgment was rendered in favor of ap-pellee for $3,671.48, as taxes and penalties, with 6 per cent, interest from December 12, 1912.

Opinion.

Three issues are presented by this appeal, viz.: Were the notes sued on personal property, within the meaning of our tax laws? Was their situs in the city of Austin during the years 1908 and 1909? And were they employed by appellant in its business in the city of Austin during said time?

Appellant concedes that, if said notes were employed by it in its business in Austin during the years for which the tax was levied, the júdgment should be affirmed, but denies that such was the fact. With this contention we agree. Appellant was not in business in the city of Austin any more than it was in business in every other city or county in Texas in which its agents sold insurance. Its principal and, so far as the record shows, its only office was in the city of Houston. It is true that by depositing said notes with the state treasurer it obtained a better financial standing in Austin and elsewhere, but the same results would have followed had a reputable bonding company in Austin guaranteed its contracts; but such guarantee would not have made Austin its place of business.

Appellant contends that the notes are not property; that the property is the debt, of which the notes are merely evidence. Except when taxation is being considered, this statement is in accord with legal terminology, and, strictly speaking, is a fact. But it has been held by the courts of this state and of other states, and by the Supreme Court of the United States, that, for the purpose of taxation, bonds and notes and other negotiable instruments are more than mere evidences of deb&wkey;that "they are property. State v. Fidelity Co., 35 Tex. Civ. App. 214, 80 S. W. 544, and cases there cited; Jesse French P. & O. Co. v. City of Dallas, 61 S. W. 942. Whatever difference of opinion may exist on this, as an abstract proposition of law it cannot be doubted that a state has the power to declare such instruments property for the purposes of taxation (State v. Fidelity Co., supra), and this state, as our statutes were construed in Hall v. Miller, 102 Tex. 289, 115 S. W. 1168, has so declared. See, also, State v. Fidelity Co. and Jesse French Piano & Organ Co. v. City of Dallas, supra.

If these notes were property, they were tangible, personal, corporeal property, capable of having a situs, independent of the domicile of the owner, and, if so, we think the evidence shows that their situs was in the city of Austin. The situs of tangible personal property is the place where it is actually located, unless such location be temporary; that is, with a definite idea of its removal from such place within a short time. It is true that appellant had the option to withdraw the notes at any time; but it is evident that it had no intention of doing so. Keeping these notes, or others of like amount and value, on deposit permanently with the state treasurer was of great financial benefit to appellant. It deposited them in 1907. The $75,000 note was not due until August 23, 1916. It was kept continuously on deposit with the state treasurer until about the date of the trial of this cause — nearly six years— when it was substituted with other like securities. The $25,'000 note was renewed in 1908; the renewal note maturing in 1910. This renewal note was substituted for the original, and remained on deposit with the state treasurer until 1911, when it was substituted by two other notes aggregating $26,000, which notes remained on deposit to the date of the trial. The law under which these deposits were made, permitted, though it did not require, such deposits. The appellant advertised the fact that it had made and was maintaining such deposit, and printed the same on its policies, which it was permitted to do, only while such deposit remained. By making such deposit, appellant not only increased its financial standing in Texas, but also was enabled to obtain a permit to do' business in other states, without further security, which it could not otherwise have done. We do not think it can be said, under these circumstances, that the notes were only temporarily in Austin at the time the taxes were levied upon them by that city.

Aside from the question as to whether the notes were property, or only evidences of debt, which is intangible, we think the judgment of the trial court must be affirmed. The decisions as to whether the situs of a debt is, for the purposes of taxation, at the domicile of the- owner, or at the place where the evidence of such debt is permanently located, are irreconcilable. That intangible property follows its owner is a fiction of law, which many courts have disregarded when opposed to the equitable consideration that property ought to bear its just proportion of taxes at the place where it receives governmental-protection, and this is the view which obtains in Texas, as we understand the decisions of our courts. This view has been so fully considered and so exhaustively discussed, with such abundant citation of authority in the cases of Hall v. Miller, 102 Tex. 289, 115 S. W. 1168; State v. Fidelity Co., 35 Tex. Civ. App. 214, 80 S. W. 544, and Jesse French Piano & Organ Co. v. City of Dallas, 61 S. W. 942, that a further discussion of the subject by us would be a work of supererogation.

Appellant, in support of its contention, cites the case of Ferris v. Kimble, 75 Tex. 476, 12 S. W. 689, and contends that the subsequent cases above referred to do not overrule or limit the doctrine announced in that case, but differentiate it, by the fact that in that case Ferris was a resident of Texas, and in the other cases the owners of the debt were nonresidents. To our minds the distinction is without difference. The actual situs of personal property depends upon a given state of facts, and not upon who owns it, or where the owner resides. If the Ferris Case can be differentiated from the other and later cases above referred to, we think it must be upon the fact that the notes sought to be taxed by the city of Wax-ahaehie were at all times in the possession of Ferris, who resided outside of said city, by reason of the fact that they were in his private portfolio, over which he alone had control. We do not feel called upon to express any opinion as to the soundness of this deduction, if indeed the court which rendered that decision was controlled by that fact. The opinion seems to be based upon that line of decisions which hold that “moneys and credits are assessable at the place of the owner’s residence.” If this be true, it seems to us immaterial whether the owner resides in the state or out of it. The later decisions in this state certainly do not so hold. It appears to us that the real basis of the later decisions is that notes are property, and therefore taxable, under our laws, at the place where they are situated. “Promissory notes are now recognized as property, and are included in the terms of the statute of 1905.” Hall v. Miller, supra. “Such personal estate [the debt] may be said to exist where the obligations for payment are held.” Hall v. Miller, 110 S. W. 170. “Bonds and securities, when properly executed, assume a concrete form which gives them a tangible situs.” State v. Fidelity Co., 35 Tex. Civ. App. 218, 80 S. W. 544.

Our Constitution (article 8, § 11) declares that “all property, whether owned by persons or corporations, shall be assessed for taxation; and the taxes paid in the county where situated. * * *” Article 7505, R. S. .(formerly article 5063), defines personal property as follows: “Personal property shall, for the purposes of taxation, be construed to include all * * * evidences of debt owned by citizens of the state.” Whatever else a note may be, is it “evidence of debt”? “Person” includes corporations. R. S. art. 7506. Within the meaning of our tax laws, the appellant is a person and a citizen of this state. As defined by article 7505, its notes are property. The notes upon which the tax was levied were at the time of such levy situated in the city of Austin. It is agreed that the tax on the notes was legally levied, and should be paid, “provided plaintiff is entitled to recover of defendant said taxes.”

It appears from the agreed statement of facts that appellant rendered these notes for taxes in the city of Houston, in Harris county, Tex., for the years 1908 and 1909, and paid such taxes to said city. If these notes were legally assessable in Austin, Travis county, Tex., for the years 1908 and 1909, they were not legally taxable in the city of Houston, and the voluntary payment of such tax in and to said city of Houston is no defense to their payment in and to the city of Austin, where such tax was legally assessable and payable. State v. Fidelity Co., supra. The facts in this case-are stronger for appellee on this point than were the facts in the case above cited. There the tax was legally assessed by the state of Maryland; here it was illegally assessed by the city of Houston.

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

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    WILLIAM CAMERON & CO., Inc., v. TRUEHEART.
    (Court of Civil Appeals of Texas. Austin.
    Jan. 21, 1914.
    Rehearing Denied March 11, 1914.)
    1. Mechanics’ Liens (§ 128) — Proceedings to Perfect — Necessity oe Filins Statement.
    Const, art. 16, § 37, providing that mate-rialmen shall have a lien upon the improvement for materials furnished, fixes the lien of the ma-terialman where the materials are furnished under contract with the owner of the premises, and, in order to enforce the lien against the owner, it is not necessary to file an account with the county clerk, as required by Rev. St. 1911, art. 5621.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. § 177; Dec. Dig. § 128.]
    2. Mechanics’ Liens (§ 61) — Right to Lien —Necessity of Contract with Owner.
    Under Rev. St. 1911, art. 5621, providing that a materialman who furnishes materials under a contract with the owner, or certain representatives of the owner, shall have a lien upon the improvement, a contract with the owner is essential to fix the lien.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 77, 78; Dec. Dig. § 61.]
    3. Mechanics’ Liens (§ 59) — Right to Lien —Contract with Owner — Purchaser under Executory Contract — “Owner.”
    Under Rev. St. 1911, art. 5621, providing that a materialman' who furnishes materials under a contract with the owner shall have a lien upon the improvement, a purchaser of the land under a verbal executory contract, which was subsequently carried out by the giving of a deed, was the owner within the statute.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 75, 76; Dec. Dig. § 59. For other definitions, see Words and Phrases, vol. 6, pp. 5134-5151; vol. 8, p. 7744.]
    4. Mechanics’ Liens (§ 199) — Operations and Effect — Priority—Vendors’ Liens.
    As between a vendor’s lien upon the land and the lien of a materialman who subsequently furnished lumber for improvements, under a contract with a purchaser of the land under an ex-ecutory agreement, the equities were all with the materialman as respects the improvements.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 371-374; Dec. Dig. § 199.]
    5. Mechanics’ Liens (§ 198) — Operation and Effect — Priority—Liens in General.
    Under the express terms of Rev. St. 1911, art. 5621, a materialman’s lien attaches to the improvements in preference to any prior lien upon the land.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 34S-355 ; Dec. Dig. § 198.]
    6. Mechanics’ Liens (§ 298) — Enforcement —Removal of Improvements.
    Under the direct provisions of Rev. St. 1911, art. 5629, the purchaser of the improvements on land at a foreclosure sale to satisfy a mechanics’ lien may remove such' improvements within a reasonable time.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 622, 623; Dec. Dig. § 298.]
    7. Mechanics’ Liens (§ 5) — Construction of Statutes.
    Rev. St. 1911, arts.' 5621, 5622, giving a mechanic’s lien upon the improvements the precedence over prior liens on the land, and authorizing the removal of such improvements, are in derogation of the common law, but, .being intended to secure mechanics and materialmen in their pay, and under the express terms of Rev. St. 1879, p. 718, Gen. Prov. § 3, should be liberally construed to effect the purpose.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 3, 5; Dec. Dig. § 5.]
    8. Mechanics’ Liens (§ 59) — Right to Lien —Contract with Owner — Purchaser under Executory Contract.
    A purchaser of land under an executory contract, who subsequently fails to comply with his contract and receive a deed, is not the “owner” within Rev. St. 1911, art. 5621, giving_ a lien for materials furnished under contract with the owner of the land.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 75, 76; Dec. Dig. § 59.]
    9. Mechanics’ Liens (§ 59) — Right to Lien —Contract with Owner — Ownership of Land.
    Even though a deed by a corporation did not take effect as a conveyance because its corporate seal was not attached, it was evidence of a contract to convey which could be specifically enforced, and the grantee, who, under a previous verbal contract to convey, had erected improvements, was the “owner” within Rev. St. 1911, art. 5621, giving a mechanic’s lien for materials furnished under contract with the owner.
    [Ed. Note. — For other cases, see Mechanics’ Liens, Cent. Dig. §§ 75, 76; Dec. Dig. § 59.]
    10. Corporations (§ 455) — Corporate Powers and Liabilities — Use of Seal on Contracts and Conveyances.
    Rev. St. 1911, art. 7092, abolishing the use of seals on any contract, bond, or conveyance, except such as are made by corporations, does not make all contracts by corporations void unless under seal, but merely leaves the law as it was before, under which a seal was required to a deed of land by a corporation, but not to a contract to convey land.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1801-1803; Dec. Dig. § 455.]
    11. Deeds (§ 77) — Right to Contest Validity.
    In a suit to adjust the equities, the holder of a prior vendor’s lien could not question the sufficiency of a deed by a corporation to the person who erected the improvements upon -which a mechanic’s lien was claimed, because its corporate seal was not attached, where the corporation was not objecting to the mechanic’s lien nor seeking to repudiate its deed.
    [Ed. Note. — For other cases, see Deeds, Cent. Dig. § 209; Dee. Dig. § 77.]
    12. Mechanics’ Liens (§ 57) — Right to Lien — “Contract with Owner” — Ownership op Land.
    Where a deed to a corporation was made before its charter was issued, the title vested in the incorporators, and as each tenant in common is the owner except as to his co-owners, a contract with one, to which no objection was made, was a “contract with the owner” within Rev. St. 1911, art. 5621, giving a mechanic’s lien for materials furnished under contract with the owner.
    [Ed. Note. — For other cases, see .Mechanics’ Liens, Cent. Dig. §§ 64-71, 74; Dec. Dig. § 57.]
    13. Deeds (§ 13) — Requisites and Validity —Parties.
    A deed will not pass title to a grantee not in existence.
    [Ed. Note. — For other cases, see Deeds, Cent. Dig. §§ 21, 22; Dec. Dig. § 13.]
    14. Corporations (§ 30) — Incorporation and Organization — Contracts with Cor-porators.
    The subscribers for the stock-of a corporation constituted a voluntary association prior to the issuance of its charter, and a deed to the corporation vested title in them individually, though they held in trust for the corporation, and might be compelled to convey to it, or be estopped to deny its title by permitting it to deal with the land as its own.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 97-100; Dec. Dig. § 30.]
    15. Tenancy in Common (§ 11) — Mutual Rights and Liabilities — Title and Rights in General.
    A tenant in common is the owner of the land as against every one except his co-owners.
    [Ed. Note. — For other cases, see Tenancy in Common, Cent. Dig. §§ 23, 28; Dee. Dig. § 11.]
    Appeal from District Court, Runnels County; John W. Goodwin, Judge.
    Suit by H. M. Trueheart against William Cameron & Co., Incorporated, and others. From a judgment for plaintiff, the defendant named appeals.
    Reversed and rendered.
    Stone & Wade, of Ballinger, for appellant. C. T. Dalton, of San Angelo, and H. P. Young, of Paint Rock, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   Findings of Fact

JENKINS, J.

(1) On November 25, 1908, the land described in appellee’s petition, situated in Concho county, Tex., was sold in part consideration of the notes sued on; a vendor’s lien being retained to secure said notes.

‘ (2) On January 20, 1909, appellee became, and still is, the owner 'of said notes, and they are due and unpaid.

(3)On or before May 6, 1910, several parties, among whom was R. A. Terry, agreed to organize a corporation, to be known as the “South Heights Land & Loan Company.” Said parties subscribed for the stock of said corporation, as required by law, and on said date in due form applied for a charter for said corporation.

(4) A charter for said corporation was issued May 11, 1910.

(5) On May 7, 1910, a deed was executed to thé South Heights Land & Loan Company for an undivided one-half interest in a certain tract of land by the owner thereof, the same being a part of the land referred to in the first finding of fact herein, and including lots 3, 4, and 5 in block 66 of the South Heights addition to' the town of Paint Rock, in Concho county. Subsequent to May 11, 1910, said corporation purchased the other half interest in said land.

(6) From May 6, to August 12, 1910, appellant, who was engaged in the retail lumber business, sold to R. A. Terry lumber of the value alleged by it, consisting of the items shown in its answer herein, for the purpose of erecting buildings and fences on said lots, and the same was so used.

(7) At the time said'lumber was so purchased and used, Terry had a verbal contract with the said land company for the purchase of said lots, and was in possession of the same. Said contract was carried out as follows: By agreement of parties J. T. Dawson, the president of said land company, on September 10, 1910, executed a deed in the name of said company to W. A. Norman for said lots, and on December 20, 1910, Norman executed a deed to said lots to Terry. The deed from said land company has no corporate seal, and it was not shown to have been executed by authority of the board of directors.

(8) Appellant never filed its account for the lumber sold to Terry with the clerk of Con-cho county until January 11, 1912.

(9) On February 15, 1912, appellant filed suit in the district court of Runnels county against Terry for price of the lumber so sold to him, and to enforce its materialman’s lien on the improvements so erected on said lots, and March 12, 1912, recovered judgment in said suit against Terry for $803.30, with foreclosure of its lien on the said improvements, and on April 29,1912, said improvements were sold by virtue of an order of sale issued on said judgment, and appellant became the purchaser of said improvements at said sale and received a deed therefor.

Upon these undisputed facts the court held that Terry was not the owner of. said lots at the time he purchased the lumber from appellant, nor at the time he erected the improvements thereon, and never at any time became such owner, and therefore appellant acquired no lien on said improvements.

Opinion.

The only issue in this case is as to whether or not appellant, by reason of the facts above stated, acquired a lien on the houses and fences erected on said lots superior to the vendor’s lien of appellee. The proper determination of this issue depends upon whether or not Terry was the owner of the lots within the meaning of the statute (R. S. art. 5621) at the time he made the contract with appellant for the purchase of the lumber used in the erection of the improvements on said lots.

1. Where the work is done or material furnished under contract with the owner of the premises, the Constitution fixes the lien (article 16, § 37), and in such case it is not necessary, in order to enforce the lien against the owner, to file the account provided for in the statute (R. S. art. 5622). Bank v. Taylor, 91 Tex. 78, 40 S. W. 879, 880; Strange v. Pray, 89 Tex. 525, 35 S. W. 1054; Loan & Investment Co. v. Cash, 87 S. W. 749; Building Co. v. Construction Co., 150 S. W. 770. Therefore, if Terry was the owner of the lots, it is immaterial that appellant did not file its account with the clerk of Concho county.

2. In order to fix the lien, there must be a contract with the owner of the land. R. S. art. 5621; Sheer v. Cummings, 80 Tex. 294, 16 S. W. 37; Nicholstone Co. v. Smalley, 21 Tex. Civ. App. 210, 51 S. W. 527.

3. But the issue still remains, Was Terry the owner of the lots within the meaning of the statute? In Schutze v. Alamo Co., 2 Tex. Civ. App. 236, 21 S. W. 162, this court, speaking through Mr. Justice Key, now Chief Justice of this court, said: “It is true, perhaps, that a strict interpretation of the statute will limit its benefits to those who furnish labor, or material, under a contract with the owner, or with his agent, trustee, or contractor, made while he is such owner; but in view of the broad language of the Constitution, and our statutory provision which declares that the rule of the common law that statutes 'in derogation thereof shall be strictly construed shall have no application to the Revised Statutes, and that the provisions thereof shall be liberally construed, with a view to perfect their objects and to promote justice (Rev. Stat. p. 718, Gen. Prov. § 3), we do not think this interpretation ought to prevail in this case.”

In the instant case the equities are all on the side of appellant. Appellee, in purchasing the notes acquired a vendor’s lien on the land in its then condition. Appellant is not resisting the enforcement of this lien, and is not asking any relief that would depreciate the value of the land as it was at the time appellee purchased the notes. If it is permitted to move oif the improvements that Terry made with appellant’s lumber, appellee will still have all that he paid for, and all that he had any reason to expect when he bought the notes, he knowing at that time, as a matter of law, that if the owner or any subsequent purchaser placed improvements on the land and failed to pay for the same, they could be sold and moved off, by the enforcement of the statute in reference to liens for ■ labor performed or material furnished for such improvements. The statute expressly provides that such liens shall attach to such improvements “in preference to any prior lien upon the land” (R. S. art. 5621), and that they may be removed. (R. S. art. 5629). Owens v. Heidbreder, 44 S. W. 1087.

This is a remedial statute in derogation of the general rule of the common law that a house erected upon land becomes a part thereof. Bldg. Ass’n v. Clark, 33 S. W. 881; Crooker v. Grant, 5 Tex. Civ. App. 182, 24 S. W. 690. It is intended to secure mechanics and materialmen in their pay, and ought to be liberally construed to effect its purpose. That the courts of this state have given a liberal construction to this statute appears from decisions to which reference is hereinafter made.

4. The proposition that article 5621 should be construed to refer to the owner in the strict sense of that word is not supported by the decisions in Faber v. Muir, 27 Tex. Civ. App. 27, 64 S. W. 940, Association v. Perkins, 80 Tex. 62, 67, 15 S. W. 633, and Smith v. Huckaby, 4 Tex. Civ. App. 80, 23 S. W. 397. Those decisons are to the effect that a party in possession of land, under an executory contract to purchase the same, but who does not comply with his contract, fails to pay the purchase money, and in consequence thereof never receives a conveyance of the land, is not the owner of same, and therefore cannot incumber it with a mechanic’s or materialman’s lien. Such we understand to be the law. But in the instant case Terry did not breach his contract with the land company. On the contrary, he fully complied with the same, and received through Norman what was intended by said company to be a deed to the lots which he had contracted to purchase.

5. We refer to the following cases illustrative of how the courts have' construed this statute: A party in possession of land under a verbal contract, specific performance of which could be enforced, is the sole owner of the land. Queen Ins. Co. v. May, 35 S. W. 831. Where a mortgagee permits the insurance on a burned building to be used in erecting another building on the land, the materialman’s lien is superior to the mortgage lien. Building Association v. Clark, supra. Where the party for whom the work was done was not the owner at the time he contracted for- same, he is the owner, within the meaning of the statute, if he afterwards becomes such owner. Schultze v. Brewing Co., 2 Tex. Civ. App. 236, 21 S. W. 163. Td the same effect is the decision of the Supreme Court of Kentucky under a similar statute. See Creamery v. Mfg. Co., 45 S. W. 896.

6. It is contended on the part of appellee that Terry never at any time became the owner of the lots, for the reason that the alleged deed from the land company to Norman, under which Terry claimed the lots, was not executed under the seal of the land company, and therefore never took effect as a conveyance of said lots. Shropshire v. Behrens, 77 Tex. 275, 13 S. W. 1043. But, though this be true, it was evidence of a contract to convey which under the facts of this case could have been specifically enforced. Miller v. Alexander, 8 Tex. 43. It is true that our statute abolished the use of seals as to “any contract, bond or conveyance” (R. S. art. 7092), except “such as are made by corporations.” But this does not mean that all contracts made by corporations not under seal are void; if so, a bill of lading issued by a railroad company would be void. It means that the use of seals, where they were therefore required, was abolished, except as to corporations. A seal was theretofore required to a deed to land (English v. Helms, 4 Tex. 233), but not to a contract to convey land (Miller v. Alexander, supra; Holman v. Criswell, 13 Tex. 45; Martin v. Weyman, 26 Tex. 467).

7. Aside from what has been said in the preceding paragraph, we do not think that appellee should be heard to question the sufficiency of the deed from the land company on the technical ground that it did not have the impress of the corporation’s seal. •This was not a suit of trespass to try title, wherein the plaintiff is required to recover upon the strength of his own title, but a ■suit to adjust the equities between the parties. Had the land company placed the improvements upon the land under the same circumstances that Terry placed them there, it is certain that appellant could enforce its lien against appellee. The land company is not _ objecting to the enforcement of appellants lien, nor seeking to repudiate its deed; why should appellee be permitted to do soV If appellant’s lien impaired the value of the lien that was purchased by appellee, there would be some reason for his objection, but it does not do so.

8. For another reason we think it should be held that Terry was the owner of the land. The conveyance of a one-half undivided interest to the South Heights Land Company was made before the charter to that company was issued. A deed will not pass title to a grantee not in existence. Prior to the issuance of the charter those who had subscribed for the stock of the corporation were a voluntary association, and the deed vested title to them individually. It is true in such case they would hold as trustees for the corporation subsequently formed, and might be compelled to convey the land to the corporation, or they might be estopped to deny the title of the corporation if they stood by and saw it deal with the land as its own, but, nevertheless, the deed in this case conveyed the legal title to those who afterwards became stockholders in the corporation, and not to the corporation itself. Terry was one of these parties. A tenant in common is the owner of the land as against every one except his co-owners.

We hold under the facts of this case that Terry was the owner of the lots within the meaning of the statute with reference to the materialman’s lien, for which reason appellant acquired a lien on the improvements superior to appellee’s lien; that by the purchase of said improvements under its judgment against Terry foreclosing said lien, appellant became the owner of said improvements and is entitled to the possession of same, and to a reasonable time in which to remove them from said lots. For which reason the judgment of the trial court is reversed and here rendered for appellant in accordance with this opinion.

Reversed and rendered.


author: RAINEY, C. J.

text:
    BELLE SPRINGS CREAMERY CO. v. MARSHALL et al.
    (Court of Civil Appeals of Texas. Dallas.
    March 28, 1914.)
    Courts (§ 169) — County Court — Jurisdiction — Amount in Controversy.
    Where plaintiff sued defendant in the county court on five notes, aggregating $942.75, with 10 per cent, interest and attorney’s fees, praying judgment for the amount of the notes and fees, the amount in controversy exceeded the jurisdiction of the county court!
    [Ed. Note. — For other cases, see Courts, Cent. Dig. §§ 413-425, 428-436, 443, 456, 458, 465; Dec. Dig. § 169.]
    Appeal from Dallas County Court; W. F. Whitehurst, Judge.
    Action by the Belle Springs Creamery Company against A. F. Marshall and others. From a judgment in favor of defendants, plaintiff appeals.
    Reversed and dismissed.
    George Sergeant and Meador & Davis, all of Dallas, for appellant. Ross M. Scott and Greenwood, Walker & Williamson, all of Dallas, for appellees.

      For other cases seo same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   RAINEY, C. J.

This suit was instituted in the county court of Dallas county at law by appellant to recover against appellees on five promissory notes, aggregating in amount $942.75, with 10 per cent, interest and 10 per cent, attorney’s fees. Defendants answered by general denial and specially that appellant was a foreign corporation, and had no permit to do business in this state, and that the contract between the parties was in derogation of the anti-trust statutes of this state. A trial resulted in a judgment for appellees, from which appellant prosecutes an appeal.

The record shows that the county court of Dallas county at law had no jurisdiction of the amount involved in this case. The notes sued on amount in the aggregate to $942.75, and 10 per cent, additional for attorney’s fees makes the amount sued for, exclusive of interest, $1,037.02. Judgment for the amounts of the notes and attorney’s fees were prayed for, which, together, exceed the jurisdiction of the county court. Moore v. Eoy (App.) 15 S. W. 199.

As said court had no jurisdiction of this cause, the judgment will be reversed, and the cause dismissed.


author: HARPER, C. J.

text:
    TEXAS, G. & N. RY. CO. et al. v. BERLIN.
    (Court of Civil Appeals of Texas. El Paso.
    March 12, 1914.
    Rehearing Denied April 2, 1914.)
    1. Appeal and Error (§ 664) — Record— Bill of Exceptions — Qualification by Judge.
    Qualifying statements, appended to bills of exceptions by the court when approving the same, are controlling as to the facts stated therein.
    [Ed. Note. — Eor other cases, see Appeal and Error, Cent.' Dig. §§ 2856-2859; Dec. Dig. § 664.]
    2. Venue (§ 32) — Residence of Parties— Waiver of Objection.
    A plea of privilege to be sued in the county of the defendant’s residence is a preliminary plea, which is waived if not fully presented before announcement of ready for trial, and evidence offered on the trial could not be relied on in support of such a plea.
    [Ed. Note. — Eor other cases, see Venue, Cent. Dig. §§ 47-50; Dec. Dig. § 32.]
    3. Appeal and Error (§ 743) — Record— Questions Presented for Review — Admission of Evidence.
    An assignment of error in admitting certain testimony will be overruled where, though there is no reference to the part of the statement of facts where such testimony appears as required by the rules of the court, the court, after careful inspection of the statement of facts, fails to find any such testimony.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2999, 3011; Dee. Dig. •§ 743.]
    4. Evidence (§ 177) — Best and Secondary Evidence — Primary Evidence Beyond JURISDICTION.
    Testimony as to the eonténts of certain letters and telegrams was admissible, where they were shown to be without the jurisdiction of the court.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 557, 570-679; Dec. Dig. § 177.]
    5. Appeal and Error (§ 1050) — Review-Harmless Error — Admission of Evidence.
    Though evidence of similar acts having no connection with the controversy is generally inadmissible, its admission rests largely in the court’s discretion, so that it is not ground for reversal unless it is clear that it influenced the verdict; and error, if any, in admitting such evidence was not reversible where there was other positive evidence of. the fact to be established.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1068, 1069, 4153-4157, 4166; Dec. Dig. § 1050.]
    6. Corporations (§§ 215, 254, 256) — Stockholders — Liability for Corporate Debts —Statute.
    Rev. St. 1911, art. 6458, providing that the stockholders of any railroad shall be liable to its creditors to the extent of the amount unpaid on their stock, makes the stockholders sureties to that extent, and it is unnecessary to prove insolvency of the corporation, but the judgment should direct execution against the corporation, and, if not satisfied, then against the stockholders.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 826-828, 845-848, 852, 854, 870, 892, 1036-1048; Dec. Dig. §§ 215, 254, 256.]
    Appeal from Midland County Court; J. H. Knowles, Judge.
    Action by W. E. Berlin against the Texas, Gulf & Northern Railway Company and others, wherein J. B. Rea intervened as plaintiff. From a judgment for plaintiff, the defendants appeal.
    Reformed and affirmed.
    A. S. Rollins, of Amarillo, for appellants. Chas. Gibbs, J. M. Caldwell, and Earl Anderson, all of Midland, and S. P. Weisiger, of El Paso, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HARPER, C. J.

W. E. Berlin filed this suit in the county court of Midland county, Tex., against the Texas, Gulf & Northern Railway Company, J. A. Underwood, and W. N. Sadler, to recover the sum. of $219.65, alleged to be due him by the said railway company for wages, alleging that work was performed at instance and request of G. A. Ryan, its duly authorized agent, and further alleging that the said railway company so indebted to him was insolvent, and that appellants Underwood and Sadler were subscribe ers to the capital stock of the said company’, and that they had paid in only 5 per cent, of the amount subscribed, and asked judgment against said Underwood and Sadler for the amount of their unpaid subscription. J. B. Rea by permission from the court was permitted to intervene as plaintiff (as appears from the face of the judgment, but no pleadings in his behalf appears in the record). The defendant railway company -filed plea of privilege to be sued in the county of its residence, general demurrers, general denial, and pleaded specially, denying the agency of G. A. Ryan, alleging that said Ryan was not authorized to make debts on its account, and, if debts were created, they were and are debts of the said Ryan individually, and that it had not authorized or ratified any debts made by him. Upon trial before the court without a jury judgment was rendered for plaintiff, from which this appeal is perfected.

The first and second assignments in brief of railway company charge that the court erred in overruling its plea of privilege to be sued in the county of its residence. The plea of privilege was properly verified, and bill of exception taken to the action of the court in overruling the plea, but the court qualifies the order approving the'bill by the statement: “The foregoing bill is approved, with the qualification that no evidence was offered in support of said plea of privilege.” There is nothing in the record to show that evidence was offered in relation to this plea, except in the general statement of facts, approved by the court; witness W. N. Sadler testified “that he had never lived in Midland county, Tex., but lived in Potter county, Tex.; that defendant J. F. Underwood has never lived in Midland county, Tex., but lives in Fannin county, Tex., and the defendant railway company has no office in Midland county, no line of railway in Midland county, and no agent in said county.”

The effect of the qualification of the judge upon the bill of exceptions is that when the plea of privilege was presented for consideration by the court, which should be prior to trial on the merits, no evidence was offered in support of it. The question then arises, Can the defendant rely upon the evidence of witnesses adduced during the trial on the merits to support his plea of privilege? This being a preliminary plea, and not being presented fully before announcement of ready for trial, will be considered waived. Karner v. Ross, 43 Tex. Civ. App. 542, 95 S. W. 46.

The third assignment charges “that the trial court erred in permitting Geo. A. Ryan to testify, over the objection of defendant, that he was authorized to make all contracts for the employment of labor and the purchase of supplies, and have same charged to the defendant railway company.” There is no reference to the part of statement of facts where such testimony appears, and for that reason the assignment is not in conformity with the rules of this court, but upon careful inspection of the statement of facts, we find no such testimony as complained of in the bill of exceptions. The assignment is therefore overruled.

The fourth assignment, in permitting Geo. A. Ryan to testify as shown in the following bill of exceptions: “ * * * The following question was asked: How did you receive your authority to act as agent for the defendant railway company? To which question the witness answered that he received such authority in talk and through letters and telegrams, to which answers the defendants objected, because the letters and telegrams were the best evidence of their contents, and, unless they were shown to be written under the proper authority, they would not be binding upon defendant.” The court approved the bill of exceptions, with the following qualifications: “The witness was a nonresident of Midland county. He had testified that the letters and telegrams were without the jurisdiction of this court; and, since there is no provision of law authorizing plaintiff to compel the production of said letters and telegrams, I considered that secondary evidence was admissible.” Also the witness has testified that said letters and telegrams were written and sent by W. N. Sadler, vice president and general manager of the defendant railway company. The statement appended to the bill by the trial judge and the statement of facts show conclusively that one of the two of the reasons given for objecting to the testimony complained of is not supported by the facts (Slaven v. Wheeler, 58 Tex. 27), and where letters and telegrams are beyond the jurisdiction or process of the trial court, it is no error to admit secondary evidence of their contents (Missouri & P. Ry. Co. v. German, 84 Tex. 141, 19 S. W. 461; Sayles v. Bradley, 92 Tex. 406, 49 S. W. 209).

The fifth and sixth assignments charge that the court erred in permitting the witness Ryan to testify, over objections of the defendants, that similar accounts to the one sued on were sent by him to the defendant railway company, and were paid by it without objection. The general rule is that evidence of other similar acts of a party, or of those who are mere strangers to the controversy, independent of and having no connection with the act or event in controversy, is regarded as inadmissible, but the act of admitting or rejecting such testimony is, in the main, considered a matter of discretion upon the trial court, so unless it was clear, upon the whole record, that the admission of the testimony probably influenced the verdict against the party objecting, it would not be ground for reversing a cause. And in this case there is positive evidence that the witness had express authority to make the debts sued on, and to bind the railway company therefore, so it is not likely, if error to admit the testimony, that it affected the rendition of the verdict. Since the seventh assignment charges that there was no evidence of authority in Ryan to contract debts chargeable to the 'appellant, it is disposed of by the observations next above.

The second and ninth assignment of appellants Underwood 'and Sadler complain that there is no allegation and no evidence of insolvency of'the defendant railway corporation, hut that the testimony showed that it had assets. Article 6458, Rev. Civ. Stat. 1911, provides: “Each stockholder of any railroad corporation shall be held individually liable to the creditors of such corporation to ah amount not exceeding the amount unpaid on the stock held by him, for any and all debts and liabilities of such corporation until the whole amount of the capital stock of such corporation so held by him shall have been paid.” The effect of this statute is to make the stockholders sureties on the .obligations of the railway company to the extent of the amount unpaid on the stock held by them, and it would not be necessary to prove that the corporation is insolvent; but when judgment is recovered against the corporation, and the evidence adduced upon the trial shows that the parties sued are stockholders, and that a sufficient amount remained unpaid on the stock so held to meet the debt sued for, as in this case, the judgment of the trial court should direct execution to issue, first, against the corporation, and, if not satisfied, then against the stockholders, to the extent of any unpaid portion of stock.

Under article 1626, Rev. Oiv. Stat: 1911, the judgment of the trial court is so reformed; and it is so ordered.

Reformed and affirmed.


author: RAINEÍ, C. J. BOOKHOUT, J.

text:
    CARSEY v. HAWKINS.
    (Court of Civil Appeals of Texas. Dallas.
    June 3, 1911.
    Rehearing Denied April 4, 1914.)
    1. Highways (§ 184) — Animals Frightened by Automobiles — Contributory Negligence— Sufficiency oe Evidence.
    Evidence, in an action for the death of one mule and injury to another from a runaway caused by fright at an automobile negligently operated by defendant along the public highway, held insufficient to show that plaintiff’s son, who was in charge of the mules, was guilty of contributory negligence, barring recovery.
    [Ed. Note. — For other cases, see Highways, Cent. Dig. §§ 471-474; Dec. Dig. § 184.]
    2. Highways (§ -181) — Animals Frightened at Automobile — Negligence—Liability.
    Where a person operating an automobile along a public highway, after seeing that a team of mules indicate fright and are liable to run away, increases the speed of the car, and thereby causes a noise which is calculated to and does frighten the mules, he is liable for the resulting damages.
    [Ed. Note. — For other cases, see Highways, Cent. Dig. § 469; Dec. Dig. § 181.]
    3. Highways (§ 181) — Animals Frightened by Automobile — Negligence—Anticipated Injury — Defense.
    Where the operator of an automobile, at the time he negligently frightened a team of mules, causing them to run against a tree, whereby one was killed and the other- injured, must have known that some injury would result to them, he could not avoid liability on the ground that the particular injury could not have been anticipated.
    [Ed. Note. — For other cases', see Highways, Cent. Dig. § 469; Dec. Dig. § 181.]
    Bookhout, J., dissenting."
    Appeal from Hunt County Court; J. W. Manning, Judge.
    Action by J. A. Hawkins against John M. Carsey. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    See, also, 163 S. W. 586.
    Looney, Clark & Leddy,. of Greenville, for appellant. Evans & Carpenter, of Greenville, for appellee.

       ‘For other oases see same topic and section NUMBER in Deo. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   RAINEÍ, C. J.

The appellee brought this suit against appellant to recover damages on account of the death of one mule and injury to another, which resulted from the running away of said mules, and which runaway was caused from fright at an automobile, which was negligently' operated by appellant along a public highway. Defendant pleaded a general denial, and upon a trial before the court, without a jury, judgment was rendered for plaintiff, and the defendant appeals.

The evidence shows that appellant, with his wife, was traveling in an automobile along a public road, running north. This road intersects a public road running east and west, where appellant continued his journey westward. There was a culvert at said intersection, and as appellant approached it he slowed up, and -after crossing it he increased the speed of the machine, which made a noise not unusual when starting up speed, but which some of the witnesses designated a “terrbile noise.” Near the intersection of these roads Henry Hawkins, 17 years of age, a son of appellee, had been working a pair of mules, hitched to a grader, a short distance west of said intersection, had unhitched them from the grader, and had driven them to one side of the road, and they were about 30 feet from the road when the automobile passed them. When the machine crossed the culvert the mules were in full view, of appellant; the mules began to indicate fright and to cut up, which was seen by appellant. He increased the speed of his machine making the “terrible noise,” causing the mules to break loose from the boy. They ran one on either side of the tree, and, the harness being too strong to break, one of the mules’ neck was broken, and the other badly injured. The appellant had placed some dogwood branches with blooms on them in his auto, which extended a short distance above the auto. Young Hawkins testified in reference to the cause of the mules running away as follows: “Well, the noise, the size of the thing, and all; of course they could see them things, and the rattling, I guess.” Also: “Well, I didn’t think about the mules getting scared. 1 would have drove them away if I had thought about them getting scared. I had time to get back out of the way. Could. have got back out of the way,” behind the schoolhouse, which was 65 feet away, but thought he had them under control. There was testimony that the auto was seen coming about 200 yards away, and that Hawlñns had to hurry to get out of the way of the auto.

Appellant contends that the evidence is insufficient, in that it shows there was no negligence on the part of appellant; that appellee was guilty of contributory negligence, and that the injury could not have been anticipated by appellant. It'was lawful for the appellant to operate his machine along the public highway. It was also lawful for young Hawkins to have the mules where he did, and it was the duty of both to use care the appellant not to scare the mules and cause them to run away, and young Hawkins to control his team and prevent them, if possible, from running away. The evidence, we think, justified the court in holding the ' appellant guilty of negligence in increasing the speed of the machine and allowing it to make the noise it did, which frightened the mules and caused them to run away. He saw that the mules indicated fright and were liable to run, and the court was warranted in holding that increasing the speed and making the noise was an act of negligence which should not have been committed. The evidence shows no necessity for increasing the speed at that point which caused the noise, as the machine with the accompanying noise, was calculated to frighten the mules. It was his duty to desist from moving forward, to prevent frightening the mules, if necessary, at least for a sufficient time for the mules to have been moved to a safe distance.

We think the rule applicable here that applies to the operation of railway engines. It is held in railway cases that the company will be held liable for injuries if the servants, by ringing the bell, blowing the whistle, or causing steam to escape, causes a team to run away if at the time such noise was made the employés knew, or have “reason to believe that it would probably frighten said team, and that injury might result” therefrom. Railway Co. v. Spence, 32 S. W. 329; Railway Co. v. Box, 81 Tex. 670, 17 S. W. 375; Railway Co. v. Carson, 66 Tex. 345, 1 S. W. 107; Railway Co. v. Hamilton, 66 S. W. 797.

We do not think the position that appellant could not anticipate the injury is well taken. It cannot be said that no injury could be anticipated from the mules running away. They were yoked together by double harness, with some timber not far distant, and it was probable some injury would result to them by becoming frightened and running away. The rule in such cases is not that the particular injury could be anticipated, but that some injury might be anticipated under such circumstances.

The trial court having held that there was no contributory negligence on the part of young Hawkins, we are not inclined to hold differently, as the evidence does not show the appellee guilty of negligence.

The judgment is affirmed.

BOOKHOUT, J.

(dissenting).

I regret that I am unable to concur with my brethren in the conclusions reached by them in this case. While the amount involved is small, owing to the importance of the questions raised by the appeal, I deem it proper to state my views thereon.

The evidence is insufficient to sustain a finding that the automobile was equipped in a manner reasonably calculated to unnecessarily frighten animals along and upon the highway, as alleged in the petition; and the evidence shows that the mules were not on or along the highway at the time they took fright and ran away. L. S. Green, a witness for plaintiff, testified: “The automobile looked like it had some dogwood bushes or something of that sort on it; they were sticking up, well, hanging over, around mostly, and I believe it was dogwood blooms that he had in there, some kind of decoration on it, and as the automobile turned around the corner there these branches were flopping up and down like.” Henry Hawkins for plaintiff, testified: “It had some branches on it; I don’t know about how many branches it had; as well as I remember there was just one on each side, looked like several little bushes on each branch; they had some blooms, and they were standing up straight.” Will Hed-rick testified: “There were a lot of branches in the automobile * * * just in between the seats.” Appellant Carsey testified: “We had nothing in the car except some flowers, a dogwood branch or limb, with some blooms on it, the limb was possibly as long as this desk here, and approximately as wide as this desk [indicating desk in courtroom]; the limb was laying up across this way [indicating], across the back seat and then extended down under the footboard of the car, and the limb was not sticking above the top of the car over 6 inches; it was a dogwood limb, with some branches on it and blooms on it.” Mrs. Carsey testified: “There was Mr. Carsey and myself in the car, and we had some dogwood branches in the car; they were in bloom and extended from one seat back to the other, from the front seat to the back seat; one end of the branches was placed on the front seat, and the other went as far back as the back seat, they went back to the top part of the car and extended over the top a little there; I don’t know just how large they were; it was a limb cfit off of a tree, and we were taking it home for the children, one of the-little girls.”

There is no evidence in the record that the dogwood branches in the ear frightened the mules. The majority opinion states “that when the machine crossed the culvert the mules were in full view of appellant, the mules began to indicate fright, and to cut up, which was seen by appellant.” This finding does not show that at that time the mules were in peril. The mules were not at that time on the highway. Henry Hawkins, who had charge of the mules, testified: “I had them driven out of the road about 10 minutes, I suppose when the automobile came along; I could not say just exactly how long I stood there; after I drove them out of the road I stood there and tried to hold them, when I got them out of the road just stopped them there; the team was headed down the road. The automobile was coming down -the road, I guess, 200 yards; it was about 200 yards, or maybe further, from the corner coming up the road when I got the mules turned around, and from that time until the automobile got there, I just stood there and held the mules.” He had ample time to take the mules out of the way, and in a safe place, had he desired to do so. His father, the plaintiff, himself, saw where he had the mules while the automobile was coming, and “thought they were out of danger.” When the car passed over the culvert the mules were beginning to shy, the witness Green says, but the boy “had them under control.” Oarsey swears that the young fellow was apparently trying to drive the mules’ towards the ear, and “seemed to have them under control.” No signal was given for the car to stop, slow up, or1 otherwise. Had it been given, the car could have been stopped in two or three feet. The car made no noise not ordinarily incident to the operation of such a-vehicle under ■ the circumstances. It was neither alleged nor proved that the automobile was running at an unlawful or excessive rate of speed. After having slowed up in passing over the culvert, it began to run faster, and made what is termed in. the opinion, a “terrible noise.” The evidence shows that the noise was not unusual, or any greater than is usually made after the car has been slowed up and then started off again. If the' rule announced in the opinion of the court is to control in the. operation of an automobile, then when the person operating the same sees one ploughing in a field, along the side of the road, and his animals are “cutting up” or showing fright, he should stop his car, even though not requested to do so, or assume the risk of such animals breaking loose and running away and injuring themselves. This the law does not require. The statute recognizes the right to operate automobiles .upon the highway. Gen. Laws. 1907, p. 193. Section 5 of the act provides that “any person driving or operating an automobile or motor vehicle shall at the request, or signal by putting up the hand, or by other visible signal from a person riding or driving a horse or horses or other domestic animal, cause such vehicle or machine to come to a standstill as quickly as possible and to remain stationary long enough to allow such animal to pass.” I am of the opinion that under the facts no actionable negligence was shown- on the part of appellant. Acts 1907, p. 193; Eichman v. Buckheit, 128 Wis. 385, 107 N. W. 325, 8 Ann. Cas. 435.

The rule that in the operation of steam railway cars, where the engineer sees animals on the track, or about to be driven thereon, and discovers their peril, it is his duty to refrain from ringing the bell, blowing the whistle, or causing steam to escape if he knows, or has reason to believe, that it would possibly frighten such animals, causing injury to result therefrom, does not apply. There is no discovered peril in the case. The mules were not in the road, but from 30- to 119 feet from the nearest point the car would pass. They were unhitched from anything, and in charge of one apparently competent, who had chosen the place where they stood as a safe place to await the passing of the car. He had seen the car pass these mules going south a few hours before, and knew tbeir disposition and was familiar with the noise automobiles make. His father, the plaintiff, and the owner of the mules, “thought they were in a safe place.” There is a large open scope of prairie around the sehoolhouse, and these mules were away from the road and on the prairie hitched to nothing, and being held by one who had been working them to a road grader. Though they appeared to be somewhat frightened as the automobile approached, the boy had them under control. No effort was made to drive them further away. No signal was given to stop the car, and the mules did not whirl and run until the automobile got about opposite them, according to plaintiff’s witness, and, according to defendant, not until after it had passed. Under these facts, can it be assumed, with reason, that the driver of the car could reasonably foresee that, to continue along the public highway, where he had the lawful right to travel, making only the noise ordinarily incident to the operation of the car: (1) The mules would run; (2) that they would break away and get loose from their driver, who gave no signal to stop or otherwise, and appeared to have them under control ; (3) that they would continue to run until they came to a tree several hundred feet away; and (4) that they would then run on each side of it and one of them get killed? I think not. As said by Chief Justice Gaines in Bigham Case, 90 Tex. 227, 38 S. W. 164: “Nothing short of prophetic ken could have anticipated” such a result. • Can it be said that a span of mules, with harness on, but hitched to nothing, and being held by their driver in an open prairie, field, lot, or pasture, are in “peril” merely when frightened at a lawful vehicle approaching in a lawful manner? Where was the peril? They were gentle mules. They had seen the car a few hours before. They were out of the road in the open prairie. Could any reasonable man assume, • even if they broke loose and ran, that they would run away-from the prairie into the timber and astraddle of a tree and thereby be hurt? And this, too, in the face of the fact that their custodian who knew their disposition gave no-sign of danger whatever, but awaited the-passing of the car. To so hold is to stretch the doctrine of discovered peril far beyond-the breaking point and defeat the very purpose of the statute requiring a car to stop when a signal is given. In my opinion the-appellant could not have anticipated that in starting his car up after having crossed the culvert, making no more noise than a car usually makes under such circumstances, the-appellee’s mules would break loose from their driver, run away, and run on different sides, of a tree, causing the death of one and injury to the other. Railway v. Bigham, 90 Tex. 227, 38 S. W. 162; Seale v. Railway, 65 Tex. 274, 57 Am. Rep. 602; Brush Elec. Co. v. Le Fevre, 93 Tex. 607, 57 S. W. 640, 49 L. R. A. 771, 77 Am. St. Rep. 898; Railway v. Welch, 100 Tex. 121, 94 S. W. 333; Prokop. v. Railway, 34 Tex. Civ. App. 520, 79 S. W. 101.

I am of the opinion the judgment should be reversed, and judgment here rendered for appellant.