author: SMITH, Justice.

text:
    CAMPBELL v. ST. LOUIS, B. & M. RY. CO. et al.
    No. 9044.
    Court of Civil Appeals of Texas. San Antonio.
    April 12, 1933.
    Rehearing Denied May 3, 1933.
    Jesse G. Foster, of Raymondville, for appellant.
    S. L. Gill and R. F. Robinson, both of Ray-mondville, Graham, Graham & Graham, of Brownsville, and A. B. Crane, of Raymond-ville, for appellees.
   SMITH, Justice.

Appellee railway company operates a branch line of its railway from San Perlita to Raymondville, where it connects with the main line. The Railway Express Agency, a corporation, operates an express business separately from appellee, but uses the latter’s facilities in such operation, for which it imposes and collects separate charges. It is a familiar operation and relation, known in a general sense to all.

San Perlita seems to be a considerable shipping point for truck growers, whose products go forward by express. San Perlita and Raymondville, a few miles apart, are ■common points; that is to say, the express company collects the same charges upon shipments, and the shipper pays the same charges thereon, whether made from the one point <or the other.

Only one express carrying train moves over the railroad each day from San Perlita to Raymondville, leaving San Perlita at 3:30 o’clock in the afternoon. Express shipments arriving at the station from the farms after that hour must wait over until the following day, unless carried by truck to Raymond-ville, and put on trains passing through late in the nighttime. The result is that it is to the great advantage of the shipper, when he misses the 3:30 train at San Perlita, to get his shipment over to Raymondville in time for the night trains.

Out of these necessities has grown the custom of moving such belated shipments, originating at San Perlita, by truck to Raymond-ville, for the night train.

It seems that Pruitt, the joint local agent of both the railway and express companies at San Perlita, is entitled to a commission of 10 per cent, of the charges on all express shipments billed out of his station, although the gross charges collected thereon by the express company are no more than upon like shipments originating at Raymondville. In short no one but the express agent profits by the fact that a shipment is billed from San Perlita rather than from Raymondville.

In this situation there originated the custom whereby the shippers in the San Perlita vicinity billed their shipments at the San Perlita express office, and then hauled them by truck and actually delivered them to the ■express company at Raymondville, whence they were shipped out by the usual method; that is, by train. By this process the ex-■pi'ess agent at San Perlita got his commission and the shipper caught an earlier train with his produce. But the result was still the same to the express company, as it was of course to the railway company, which was but the instrumentality of the express company.-

This situation developed the present controversy. Appellant, H. D. Campbell, was the largest shipper at San Perlita, and prior to - the transaction here involved billed his belated shipments at San Perlita and then hauled them in his own trucks to Raymond-ville, where they were actually first delivered to the express company for transportation. Both Campbell and the express agent were mutually interested in this method, since the former thereby secured earlier movement of his produce, and the latter got 10 per cent, of the express charges. They thereupon hit on the plan of getting the railway company or the express company to pay Campbell for trucking the shipments from San Perlita to Raymondville, at the rate of $3.60 per truck load of produce, including that of others as well as his own. The agent first endeavored to get his principals to contract with him to do this hauling, but without success, whereupon he proposed to various officials of his principals that the hauling contract be given Campbell, who proceeded upon the assumption that such contract would be forthcoming from the carriers, until his bills therefor aggregated $450. The carriers declined to recognize such contract or pay Campbell’s bill, and were sustained in the suit thereon filed later by Campbell, who has appealed.

We conclude, without hesitation, that the judgment must be affirmed. The proposed contract was an extraordinary one in sundry respects. Its proponents, the agent and the shipper, alone would profit by it, and the carriers, whom the proponents elected should pay for its performance, were to receive none of the profits therefrom. Its execution would have the effect of a discriminatory preference of shipper Campbell over other shippers, which perhaps would subject the carriers to prosecution and damages. In order to bind the carriers to such contract, even granting they could legally enter into’ such, the evidence should clearly show that their responsible officials entered thereunto, or ratified such agreement when made by an agent of limited authority, such as Pruitt. No such showing was made in the case.

None of the testimony even tended to connect the express company with the transaction, whereas the testimony connecting the railway company therewith was certainly not so conclusive as to authorize this court to override the findings and judgment of the trial judge. The evidence was such as to amply support the implied findings of the trial judge that the responsible officials of the carriers at no time approved or ratified the alleged agreement made by their local agent with appellant, and that such agreement was but a private arrangement between the agent and appellant, who alone profited thereby.

The judgment is affirmed.


source: Caselaw Access Project

author: BAUGH, Justice.

license: Public Domain

text:
    FORD v. WHEAT et al.
    No. 7817.
    Court of Civil Appeals of Texas. Austin.
    March 22, 1933.
    Kerr & Gayer, of San Angelo, for appellant.
    Collins, Jackson & Snodgrass, of San An.•gelo, for appellee Ira L. Wheat.
    Seay, Seay, Malone & Lipscomb, of Dallas, for appellee United States Fidelity & Guaranty Co.
   BAUGH, Justice.

This is the second appeal of this ease. A full statement of it is found in our former •opinion reported in 22 S.W.(2d) 948; and in the opinion of the Commission of Appeals on writ of error granted, reported in 36 S.W.(2d) 712, to which reference is made in the interest of brevity. Suit was by the owners of the residuary estate of E. R. Jackson, deceased, against the administrator and the surety on his bond, to recover the amount found by the probate court, in the order approving the administrator’s amended final account, to be ■due and owing by the administrator to the •estate. In our former opinion, we held that the administration was in effect closed and the administrator discharged, and that limitation had run against the beneficiaries under said bond; and affirmed the judgment of the trial court. The-Commission of Appeals, with express approval of the Supreme Court, reversed our holding that the administration was closed, held that limitation had not run against plaintiffs’ cause of action, and reversed and remanded the case. Upon a second hearing, the trial court sustained a plea in abatement of the defendants, appellees here, that the district court was without jurisdiction because the administration of said estate was still pending, and that the jurisdiction of the probate court was exclusive. This appeal is from that judgment.

In this the trial court clearly erred. Ap-pellees contend that only the question of limitation was presented in the application for writ of error on the former appeal; -that only that issue was decided by the Supreme Court; that therefore whatever was said in the opinion of the Commission of Appeals with reference to the right of appellant to sue the administrator and his bondsmen before said estate was finally closed was necessarily. obiter; and that the holding of the Commission of Appeals on that question is contrary to numerous decisions, citing, amongst others, Buchanan v. Bilger, 64 Tex. 589; Northcraft v. Oliver, 74 Tex. 166, 11 S. W. 1121; Bluitt v. Pearson, 117 Tex. 467, 7 S.W.(2d) 524; Boedeker v. Boedeker (Tex. Civ. App.) 258 S. W. 566; Maxwell’s Unknown Heirs v. Bolding (Tex. Civ. App.) 11 S.W.(2d) 814; and O’Neil v. Norton (Tex. Com. App.) 29 S.W.(2d) 1060, 1062.

These cases and , numerous others have held that the jurisdiction of the probate court over estates is fixed by the Constitution, and, when once attached in the administration of such estates, is exclusive. This rule is well settled. This, however, does not deprive district courts of jurisdiction in matters wherein the powers of the probate court have been exhausted, and there is nothing further that the probate court can do. It is patent that the district court cannot interfere with the probate court’s proper adminis-tr^ion of an estate where the probate jurisdiction has been invoked and is still pending. But matters of which the probate court does not have jurisdiction, or wherein it has gone as far as it can go in the premises, or where its powers “are inadequate to grant the full relief sought, then the district court has jurisdiction and may grant relief.” O’Neil v. Norton, supra; Ford v. Wheat (Tex. Com. App.) 36 S.W.(2d) 712, 713; Stewart v. Morrison, 81 Tex. 396, 17 S. W. 15, 26 Am. St. Rep. 821.

Regardless of what the application .for writ of error on the former appeal of this case may have shown, the Commission of Appeals expressly found tliat the administration of said estate of E. R. Jackson was still pending in the probate court, and expressly held, which holding was approved by the Supreme Court, that the district court had jurisdiction of appellant’s cause of action, being the same cause of action involved in this appeal, even though said administration had not been closed. The issue of the jurisdiction of the district court was necessarily before the Supreme Court, and necessarily had to he sustained before that court’s order reversing and remanding the case could be made. Otherwise the Supreme Court would have ordered the - suit in the district court dismissed on the former appeal. That being true, this court and the trial court are bound by that order as a final adjudication of that issue. And it was immaterial what subsequent orders the prob'ate court may have entered after this case had been reversed by the Supreme Court. Such orders could not defeat the jurisdiction of the district court over the subject-matter, after such jurisdiction had already properly attached. Cleveland v. Ward, 116 Tex. 1, 285 S. W. 1063.

The judgment of the trial court is therefore reversed, and the cause remanded for trial.

Reversed and remanded.


author: LESLIE, Justice.

text:
    HUNT v. THROCKMORTON INDEPENDENT SCHOOL DIST.
    No. 1097.
    Court of Civil Appeals of Texas. Eastland.
    April 7, 1933.
    E. G. Thornton, of Olney, for appellant.
    Jno. Lee Smith, of Throckmorton, and A. H. Carrigan, of Wichita Falls, for appellee.
   LESLIE, Justice.

This is a suit by the Throckmorton Independent ’School District against E. W. Hunt for the collection of school taxes assessed against his property as of January 1, 1930. The property involved was 8,856 acres of ranch land situated in the district. He tendered to' the tax collector, and into court at the trial of this case, an amount based upon his personal rendition of said land at the value of $7.50 per acre. The tender was received without prejudice to the contentions of either litigant, and the trial before the court without'a jury resulted in a judgment for the plaintiff for the amount of $484.37 over and above the plaintiff’s tender, and in accordance with the valuation placed upon his land by the district’s board of equalization, and for foreclosure of lien, etc. The defendant appeals, and the parties will be referred to as in the trial court. •

The judgment ought to be affirmed unless the testimony given by the plaintiff’s witnesses compels a different conclusion. The defendant presents two propositions, and they make, in substance, the same contention, that the undisputed testimony discloses that the school district’s board of equalization adopted an illegal plan or system of valuing property in the district which denied him the benefit of equal and uniform taxation, and amounted to a discrimination against him in the valuation of his ranch lands as compared with the values accepted by the board under the plan for (1) other ranch lands; (2) farm lands; (3) city property; and (4) cattle, situated in the district.

Article 8, § 1 of the Constitution of Texas provides: “Taxation shall be equal and uniform. All property in this state, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.’’

Pursuant to the above authority the Legislature enacted article 7206, R. S. 1925, and the third section thereof is as follows: “They shall equalize improved lands in three classes, first-class to embrace the better quality of land and improvements, the second-class to embrace the second quality of lands and improvements, and the third-class to embrace lands of but small value or inferior improvements. 'The unimproved lands shall embrace first, second and third class, and all other property made as nearly uniform as possible.”

The board of equalization (referred to as the board), after due notice to Hunt, and over his protest, raised his property renditions on said land from $7.50 to $12.50 per acre. Against the district’s asserted right to collect taxes upon such enforced valuation, Hunt defends upon the ground that the board, in raising the value of his land, acted arbitrarily, illegally, and in an unconstitutional manner, in that (1) it ignored the provisions of article 7206, R. S., and especially subdivision 3 thereof above s.et out; (2) that it made a blanket valuation of farm lands in the district for the year of 1930, without reference to the character, location, or improvements at $15 per acre, when in fact such lands ranged on January 1, 1930, from $30 to $60 per acre; (3) that as to ranch lands in the district on said date, the board made a blanket valuation of $12.50 per acre, when in fact such lands had a value ranging from $10 to $30 per acre; (4) that like discrimination was made in the valuation of cattle, which was taken at $20 per head, when in fact their values ranged on said date from $25 for common cattle to $200 for registered cattle; (5) that city property in the district at said time was taken at one-third of its value, whereas his ranch land was assessed at its full market value, at least; (6) that the foregoing conduct and procedure on the part of the board resulted in injury to the defendant, rendering its act in raising the valuation of his property void.

By reference to the statement of facts we find that the three members of the board of equalization, J. W. Weaver, O. E. King, and J. C. Dawes, among other witnesses, testified in behalf of the plaintiff. It goes without comment that we find the defendant’s contentions abundantly supported by the testimony coming from him and his witnesses, but, as remarked in the outset, we-are essentially concerned with the uncontroverted facts established by the testimony adduced from the plaintiff’s witnesses. We will not extend the length of the opinion by quoting verbatim from the statement of facts, but shall content ourselves with the substance thereof.

Weaver testified the board put all farm lands in the district at $15 per acre and pasture and ranch lands at $12.50 per acre, except 20 sections of the Swinson ranch, valued at $10 per aere; that the board did not take every separate piece of property in the district and distinguish the difference in it and the other properties, and set an equal value on that particular piece of property; that the farm lands in the district were taken at $15 per acre without reference to improvement and distance from town; that rs.nch lands, without reference to location or improvement, were taken at $12.50 per acre, except the 20 sections of Swinson ranch taken at $10 per acre; that some ranch lands were near town, well improved; that others were 10 or 12 miles from town, without improvements; that some ranch lands had better water supply than others, and some had natural water on them; that pasture lands were put on an equality; that the board did not take farm land and divide it' into three different classes, and did not take ranch lands and divide them into three different classes, and did not take unimproved lands and divide them into three different classes; that they classified ranch lands in one classification and farm lands in another, and other lands as best they could; that on January 1, 1930, farm lands in the district had an average valuation of $30 an acre, and that all such lands in the district were arbitrarily valued for tax purposes at $15 per acre; that they did not attempt to put a 100 per cent, valuation on town property, but figured it “about 50 per cent.”; that ranch lands were something about equal.

The witness King testified substantially as did Weaver, that the board took farm lands, irrespective of the difference in value, at $15 per acre; that ranch lands except said 20 sections, and irrespective of value, were taken at $12.50 per acre; that the board did not attempt to divide the improved and unimproved land into three classes for the purpose of valuing. the same; that the Hunt lands were worth from $12.50 to $15 per acre; that the Boyd farm taken at $15 an acre was worth $40 an acre; that the Palls farm was worth $30 an acre, and the King farm $25 an acre; that ranch lands, irrespective of difference in value, were likewise taken at $12.50 an acre, with the exception mentioned.

The witness Dawes testified that the board put most of the ranch lands, without regard to difference in improvements, at the same price; that the lands in the ' district were not classified unless the 20 sections of the 'Swinson ranch were so treated; no attempt was made to value the town property at 100 per cent, of its value, but an attempt was made to value it at 75 per cent, of its value; that ranch lands in the district were arbitrarily valued at $12.50 per acre, and farm lands in the district at $15 per acre; that the Hunt ranch was worth $15 per acre, with the improvements on it.

Testimony as to the value placed upon various specific farms was given. Such lands, with two exceptions, ranged in values from $80 to $50 per acre. One farm was valued at $25 per acre by one witness and as high as $35 per acre by another, while a second farm was valued at $25 per acre by one witness and a member of the board, and as high as $35 by another witness.

The testimony of at least two members of the board of equalization established that the city property was assessed at 50 per cent, of its value. One of the members testified that they attempted to assess it at 75 per cent, of its value, but an examination of the value placed on several distinct pieces of city property discloses • that it was taken at 50 per cent, or less.

Prom the foregoing it conclusively appears that there is a want of equality and uniformity in taxation in such school district as applied to defendant’s lands directly traceable to the unwarranted plan or system used by the board in valuing said lands for the year of 1930. Assuming his ranch lands to have a fair market value of $12.50 per acre, it is obvious that the amount of money he has tendered into court on the basis of his renditions at $7.50 per acre, amounts to a payment on a valuation of 60 per cent, of the market value of his lands. To say the least, this is a greater rate of taxation than that levied against farms and city property. As compared with other ranch lands we are of the opinion that no discrimination or lack of uniformity in valuation is necessarily shown, but as compared with the valuations placed on farm lands and city property by the board, the defendant makes out a clear case on his contention that the board arbitrarily adopted a system of valuation which resulted in fixing upon his property a value without regard to and in violation of the principle of uniformity and equality required by the Constitution. Hence we sustain the defendant’s propositions. The law applicable to the facts of the case is clearly stated in the following authorities, which compel the conclusions reached, and as above stated: Article 8, § 1, Constitution of Texas; article 7206, R. S. 1925; Randals v. State (Tex. Civ. App.) 15 S.W.(2d) 715; Slaughter et al. v. Sundown Ind. School Dist. (Tex. Civ. App.) 41 S.W.(2d) 478; Lively v. M., K. & T. Ry. Co., 102 Tex. 545, 120 S. W. 852, 857; Langlay v. Smith, 59 Tex. Civ. App. 584, 126 S. W. 660; Weatherly Ind. School Dist. v. Hughes (Tex. Civ. App.) 41 S.W.(2d) 445; Town of Pleasanton v. Vance (Tex. Com. App.) 277 S. W. 89; Garza Land & Cattle Co. v. Redwine Ind. School Dist. (Tex. Civ. App.) 282 S. W. 905; City of Houston v. Baker (Tex. Civ. App.) 178 S. W. 820; Power v. Andrews (Tex. Civ. App.) 253 S. W. 870; Richardson v. State (Tex. Civ. App.) 53 S.W.(2d) 508; Rowland v. City of Tyler (Tex. Com. App.) 5 S.W.(2d) 756.

While there is no evidence that the hoard of equalization purposed to do the defendant individually any harm, nevertheless “the intention with which the acts were done is of no consequence” (Lively v. M., K. & T. Railway), and, since the plan adopted was fundamentally wrong and necessarily worked an injury to the defendant, he was entitled to the relief sought. Rowland v. City of Tyler (Tex. Com. App.) 5 S.W.(2d) 756; Druesdow v. Baker (Tex. Com. App.) 229 S. W. 493: Brown v. First Nat’l Bank (Tex. Civ. App.) 175 S. W. 1122.

Uniformity - in taxation throws the proper burden of taxation on each individual taxpayer, and the principle should never be departed from. The greatest benefit comes to each and all when it is scrupulously observed. The value of property is the correct standard of uniformity and the Constitution has so fixed it. Taxation cannot be in proportion to the value of property unless the value of all property is ascertained by the same standard. Lively v. M., K. & T. Ry. Co.

This is not a case where the evidence goes no further than to raise an issue of fact as to whether or not the assessment was excessive, or where the values under attack arise out of a mere difference of opinion.’ Hence such authorities as Early v. City of Waco (Tex. Civ. App.) 3 S.W.(2d) 131, relied on by the plaintiff, are not deemed controlling here.

We have above referred to certain testimony adduced on the trial, but the testimony generally in connection with that specifically referred to, when propei’ly and reasonably construed, discloses that the defendant’s property was valued at 100 per cent, of its market value on January 1, 1930, whereas other property in the district, namely, farm lands and city property, were taken at 50 per cent, or less of their value. The plan adopted and above discussed logically led to inequality and discrimination. Further, if it be held that the market value of defendant’s ranch on January 1, 1980, was $15 per acre, the highest value placed thereon by any witness, the result would be the same. For the defendant that would be taxation on the basis of 83½ per cent, of the value of his property, and it would conclusively appear that the same vice complained of was still present in the case.

For the reasons assigned the judgment of the trial court will be reversed and judgment here rendered in favor of the defendant, and that plaintiff take nothing by the suit. It is so ordered.


author: HIGGINS, Justice.

text:
    GILL v. BENNETT.
    No. 2808.
    Court of Civil Appeals of Texas. El Paso.
    April 6, 1933.
    Rehearing Denied May 4, 1933.
    .Upton & Upton, of San Angelo, for appellant.
    Kemp & Nagle, of El Paso, and Brian Montague, of Del Rio, for appellee.
   HIGGINS, Justice.

This is a suit by J. R. Bennett against R, H. Gill and others.

The controversy is over an undivided %>24 interest in the minerals in a section of land containing 640 acres. The defendants, other than Gill, are conceded to be the owners of an undivided 12¾28 mineral interest; and, as to those defendants, and that interest, no point is presented by the appeal. The point at issue is whether Bennett owns an undivided ¾28 (¾024) interest in the minerals, or an undivided ⅝024 interest. The issue was found in favor of Bennett, and Gill appeals.

The appeal is presented upon an agreed statement of facts.

This agreement discloses the following:

J. D. Jones, the owner of the section, conveyed to Bennett an undivided ¾6 interest in and to all of the oil, gas, and other minerals in and under, and that might be produced from, an undivided 80 acres out of said section, together with the right of ingress and egress for the purpose of mining, drilling, and exploring said land for oil, gas, and other minerals and removing the same.

Thereafter, on December 7, 1926, Jones executed an oil and gas lease on said section to Gill on a regular 88 form. The lessee agreed:

“1st. To deliver to the credit of lessor, free of cost, in the pipe line to which they may connect their wells, the equal one-eighth part of all oil produced and saved from the leased premises.
“2nd. To pay the lessor one-eighth of net proceeds for the gas from each well where gas only is found, while the same is being used off the premises. * * *
“3rd. To pay lessor for gas produced from any oil well and used off the premises at the rate of one-eighth of the net proceeds, payable monthly for the time during which such gas shall be used. Should the lessee desire to utilize casing-head gas coming from oil wells upon the premises herein described for the purpose of manufacturing gasoline, lessee shall have the privilege of so doing by paying to the lessor one-eighth of the proceeds derived from the sale of said casing-head gas at the wells.”

The lease also provides: “If said lessor owns a less interest in the above described land than the entire and undivided fee simple estate therein, then the royalties and rentals herein provided for shall be paid the said lessor only in proportion which their interest bears to the whole and undivided fee.”

Gill conveyed to various parties the interest in the oil and gas in the section of land which he acquired by the foregoing lease, and it is agreed that such assignees (who are the other defendants) own ⅞ of the oil and gas in the section. As to these assignees it was agreed “that they are the owners of seven-eighths of the oil and gas in, on and under said section of land.” " '

On January 13, 1927, Bennett executed and delivered to J. D. Jones an instrument which reads:

“The State of Texas, County of Pecos
“Whereas, heretofore, on April 6th, 1926, J. D. Jones, did execute and deliver to J. R. Bennett, one certain Mineral Deed, wherein and whereby he conveyed to the said J. R. Bennett, a one-sixteenth interest in and to all of the oil and gas and other minerals in and under and that may be produced from certain lands fully described in said mineral deed, which said mineral deed is recorded in Volume 33, page 316, Deed Records of Ward County, Texas, and which said deed and the record thereof is hereby referred to and for a description of the property conveyed, and for all purposes, and,
“Whereas, it has been agreed between the said J. D. Jones, Grantor, in said deed, and the undersigned J. R. Bennett, Grantee, in said deed; that the said J. D. Jones, had and has the absolute right and authority to lease the lands described in said deed, for the purpose of mining, drilling and exploring said lands for oil, gas and other minerals and removing the same therefrom, and had and has the absolute right and authority to execute oil and gas and mineral leases on said land described in said mineral deed above, mentioned for such time and on such terms and conditions as to him may seem fit, and that the said J. R. Bennett, nor any one claiming under him has no right or interest in the bonus or rents collected by the said J. D. Jones or his assigns, under any oil and gas or other mineral leases or leases so executed by the said J. D. Jones, now
“Therefore, in consideration of the premises and of One Dollar ($1.00) cash to me in hand paid by J. D. Jones, the receipt of which is hereby acknowledged, and for the purpose of setting out and making plain to the public the intention of the parties in the said mineral deed first herein described, I, J. R. Bennett, the original Grantee in said mineral deed first herein described, do hereby relinquish and disclaim any right, title or interest in or to any bonus or rents collected by the said J. D. Jones, or his assigns, from any oil and gas lease, or other mineral lease, that has heretofore been executed or that may hereafter be executed by the said J. I). Jones on said land described in said mineral deed, and do hereby grant, sell and convey unto the said J. D. Jones, all of the right, title and interest that I may have by virtue of said mineral deed in any and all bonuses and rentals or other monies that may have been collected or may be collected by the said J. D. Jones, on any oil and gas lease or, leases, or mineral lease or leases covering said land,'or any part thereof, and I hereby absolutely ratify and confirm any and all oil and gas leases or other mineral leases that have heretofore been made, or that may hereafter be made, by the said J. D. Jones covering the land described in the said Mineral Deed, except as to the clause in said lease or leases warranting the title to said land.”

On November 7, 1928, J. D. Jones conveyed the section to Eugene Mays. Mays conveyed certain mineral interests in the land, and then conveyed to R. H. Gill the land and all mineral interest in the land then owned by Mays.

The agreement between the parties further provides:

“7th. Appellant, Gill,- contends and claims that by the execution of the instrument copied above that appellee, Bennett ratified the oil and gas lease executed by Jones and seven-eighths of his interest should pass to said lessee during the life of said lease; and on the termination of said lease,- his full interest would revert to Bennett; and that Bennett will only be entitled to one-eighth of ¼28⅛ of all oil and gas produced during the life of said lease, as ⅞ths of his interest would pass to and be owned by the assignees or owners of the oil and gas lease; and that Gill acquired ¾024 mineral interest in his deed from Eugene Mays, durin£ the life of said lease.
“8th. Appellee, Bennett claims and contends that by the execution of the instrument; as copied above he did not part with or waive in favor of the owner of said oil and gas lease any of his interest, and that he is entitled to receive and recover a ½28⅛ interest of the whole of the oil and gas produced on said land, and claims that said instrument is only a recognition by J. R. Bennett of the oil lease theretofore executed by J. D. Jones and, any leases which might subsequently be executed by him, that it was a disclaimer and relinquishment on the part of J. R. Bennett in favor of J. D. Jones to a participation in any rentals or bonuses theretofore received by J. D. Jones or thereafter to accrue by virtue of any lease to be executed to J. D. Jones. He claims thát by virtue of said instrument that Bennett was the non-participating royalty owner to the extent of ¼28⅛]1 interest in the minerals produced.
“9th. It is hereby agreed that if the instrument copied above has the effect of ratifying said oil and gas lease executed by Jones, and that ⅞⅛ of the interest owned by Bennett would pass to the owner of the lease, and he would be entitled to %th of his interest as royalty, then in that event this cause should be reversed and rendered in favor of R. H. Gill, so that he, R. H. Gill will have an undivided ¾024 interest during the life of said oil and gas lease, and that Bennett will have only ¼024 interest during the life of said oil and gas lease. Otherwise, should it be determined that the instrument above copied does not pass to the owner or owners of said oil and gas lease %th of the interest originally owned by the said J. R. Bennett; during the life of said lease, then in that event, said cause should be affirmed.”

Opinion.

Both sides concede that the controlling question in the case is the proper interpretation to be placed upon the instrument executed by Bennett on January 13,1927.

On December 7, 1926, Jones and Bennett were tenants in common of the oil, gas, and other minerals in the section of land, Jones owning an undivided 12⅞28 interest therein, and Bennett owned the other ¾28 interest.

On that date Jones executed the oil and gas lease whereby he undertook to grant and lease the section to Gill for the purpose of mining and operating for oil and gas. Jones was without authority to grant and lease the mineral interest of Bennett, but it was of course competent for the latter to ratify the unauthorized act. 38 Cyc. 106 and 111; 1 Tiffany on Beal Property, 682; 7 B. O. L. 877, 879, and 882; Werner v. Hayfield Co. (Tex. Civ. App.) 248 S. W. 766; Texas & Pacific C. & O. Co. v. Kirtley (Tex. Civ. App.) 288 S. W. 619; Van Deventer v. Gulf P. Co. (Tex. Civ. App.) 41 S.W.(2d) 1029. If Bennett did ratify the oil and gas lease, it operated as effectively as if he had originally joined in the same and.passed to Gill ⅞ of the oil and gas in the section subject to the terms and conditions of the lease.

If there was such ratification, then Bennett is a participating royalty owner and entitled to y128 of the oil and gas royalty, agreed to be paid by the lessee.

On the other hand, if there was no such ratification, then Bennett is nonparticipating in the royalty, but is entitled to ¾28 interest in all of the oil and gas produced from the whole section.

In construing the instrument in question, the intention of the parties is of primary and controlling importance. The instrument is unambiguous. Such being its nature, the intention of the parties must be determined from the instrument itself considered as a whole. Reynolds v. McMan Oil & Gas Co. (Tex. Com. App.) 11 S.W.(2d) 778.

Counsel for appellee assert it was plainly not the purpose of the instrument to evidence an election on Bennett’s part to abide by the lease theretofore executed in favor of Gill, but it was merely a recognition of a right on the part of Jones to do what he did in connection with the lease and deal with the entire mineral interest, appropriating to Jones’ own use all moneys received as rentals and bonuses without accounting therefor to Bennett and reserving to Bennett his ¾28 interest in all of the oil produced from the section.

But, in our opinion, the instrument clearly evidences the intention of Bennett to abide by the lease theretofore executed by Jones, and there is nothing to indicate that Bennett intended to reserve to himself his full ½28 interest in the oil and gas produced from the land.

' To so hold would be to wholly disregard the concluding portion of the instrument, which reads: “And I hereby absolutely ratify and confirm any and all oil and gas leases or other mineral leases that have heretofore been made, or that may hereafter be made, by the said J. D. Jones covering the land described in the said mineral deed, except as to the clause in said lease or leases warranting the title to said land.”

This express ratification of all previous leases is in complete harmony with the previous recitals in the instrument that Jones had the absolute right and authority to lease the land for the purpose of mining, drilling, and exploring for oil and gas and to execute oil and gas leases on the land for such time and on such terms as he saw fit.

The instrument of January 13, 1927, clearly constitutes a ratification by Bennett of the previous lease executed by Jones in favor of Gill. Upon this view it follows that title to ⅞ of the oil and gas in the section passed to Gill by the lease of December 7, 1926, upon the terms and conditions stated in the lease, and the judgment should be reversed and here rendered in favor of Gill as stated in the ninth section of the agreement quoted above. It is so ordered.

Beversed and rendered.


author: CRITZ, Commissioner. CTJRETON, Chief Justice.

text:
    ROSE v. FIRST STATE BANK OF PARIS, TEX., et al.
    No. 6031.
    Supreme Court of Texas.
    March 15, 1933.
    King, Mahaffey, Wheeler & Bryson, of Tex-arkana, for plaintiff in error.
    Moore & Moore, of Paris, for defendants in error.
   CRITZ, Commissioner.

This suit was filed in the district court of Lamar county, Tex., ,by A. J. Rose against First State Bank of Paris, Tex., a then insolvent state banking corporation in the hands of the state banking commissioner, as well as against C. H. Noyes and a number of other individuals who are alleged to have been officers and directors of the above bank on and " prior to April 26, 1926. The relevancy of this date will later appear.

For convenience we will hereafter refer to Rose by his name, to First State Bank as the bank, and to Noyes and the other individual defendants as Noyes et al.

Rose’s petition in the district court alleges that on April 26,1926, the bank was insolvent, that it had been in such insolvent condition for some time prior to such date, and that Noyes et al., during such time, well knew such fact. It is then alleged that on the date of April 26,1926, Rose deposited in the bank the sum of-$16,000 and there was then issued to him by the bank a written certificate of deposit for that amount. The certificate is pleaded in full. It is sufficient to say that it is dated April 26, 1926; it is due January 1, 1927, and is for $16,000. It is not necessary to detail Rose’s pleadings in full, but they will be treated as sufficient to state a cause of action against the bank on the written certificate above mentioned. Also Rose’s pleadings will be treated as sufficient to allege a cause of action against Noyes et al. under article 533, R. O. S. 1925, unless such cause of action was barred by the two-year statute of limitation at the time the suit was filed in the district court.

At this time we deem it proper to say that the following facts affirmatively appear on the face of Rose’s petition: The deposit was made by him in the bank on April 26, 1926; it was due on January 1, 1927; the bank closed on May 30, 1926, Rose learned of its insolvent condition very shortly thereafter, and the suit was filed on April 26, 1930.

. No answer was filed by the bank and judgment went against it for the sum of $13,930. No one is complaining of this part of the judgment.

Noyes et al., among other defenses, pleaded by special demurrer the two-year statute of limitation as a bar to any recovery against them by Rose. The trial court sustained this demurrer and on Rose’s refusal to amend dismissed the cause as against said Noyes et al. Rose appealed to the Court of Civil Appeals, which court in all things affirmed the judgment of the district court. 38 S.W.(2d) 863. r Rose brings error.

From the statement we have made, it is evident that we are here concerned with but one question; which is whether Rose’s petition shows upon its face that his alleged cause of action against Noyes et al. was barred by the two-year statute of limitation at the time the suit was filed. It is evident that the suit was not filed against Noyes et al. within two years from the time Rose’s cause of action accrued, and if the two-year statute applies his right to recover is barred. We shall now proceed to decide that question.

As stated above, the legal effect of Rose’s petition is to sue the bank on the certificate of deposit, -and to sue Noyes et al. under article 533, R. C. S. 1925, on their statutory liability to him for knowingly accepting his deposit for the bank at a time it was insolvent or in a failing condition. The statute in question reads as follows: “No president, director, manager, cashier or other officer or agent of any bank or banking institution organized and doing business under the provisions of this article shall receive or assent to the reception of deposits, or create or assent to the creation of any debts by such bank after he shall have knowledge of the fact that it is insolvent or in failing circumstances. Every person violating the provisions of this article shall be individually responsible for such deposits so received and all debts so contracted. Any director who may have paid more than his share of the liabilities mentioned in this article may have the proper remedy at law against such other persons as shall not have paid their full share of such liabilities. In case of the insolvency of one or more of such officers, agents or managers, the same shall be paid for the time being by those who are solvent, in equal proportion.”

A reading of the above statute convinces us that its purpose and effect is to create a personal statutory liability on the part of officers and directors of state banks, who accept deposits for the bank or create debts on its part, at a time when they have knowledge that such bank is insolvent or in a failing condition. When Rose made his deposit, and received the certificate of the bank evidencing the same, the bank’s liability to him rested on a contract. Not so as to the liability of the officers and directors of the bank. That liability rested on the fact that the statute made them personally liable because they accepted the deposit for the ‘bank at a time when they knew it was insolvent or in failing condition. In other words, the liability of Noyes et al. was created purely by the statute.

Our two-year limitation statute, art. 5526, R. O. S. 1925, in so far as it applies to this case, roads as follows:

“There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description: * * *
“4. Actions for debt where the indebtedness is not evidenced by a contract in writing.”

It will be noted that under the foregoing statute “actions for debt * * * shall be commenced and prosecuted within two years after the cause of action shall have accrued, not afterwards,” etc. It is the settled law of this state that the phrase “actions for debt,” as used in our limitation statutes, is not the common-law action for debt in its strict literal interpretation, “for we have no .actions which come strictly and technically within that denomination.” Robinson v. Varnell, 16 Tex. 382; Gordon v. Rhodes & Daniel, 102 Tex. 300, 116 S. W. 40, 41; Texarkana & Ft. S. Ry. Co. v. Houston Gas & Fuel Co. (Tex. Com. App.) 51 S.W.(2d) 284; Miller v. Kountz Corporate School District (Tex. Com. App.) 54 S.W.(2d) 344.

In the early case of Robinson v. Varnell, supra, our Supreme Court, speaking through Judge Wheeler, announced the rule of interpretation stated by us above. In the later case of Gordon v. Rhodes & Daniel, supra, our Supreme Court, speaking through Judge Williams, reaffirmed the rule in Robinson v, Varnell, and used the following very significant language: “It follows that if a cause of action be for a debt, in the sense of this statute,. the debt need not be evidenced by or founded qpon contract at all to come within the two-years statute.”

Judge Williams then calls attention to the fact that the opinion in Robinson v. Varnell went so far as to hold that an action for damages arising out of a written contract'was governed by the four-year statute of limitation as provided by present subdivision 1 of article 5527, R.-C. S. 1925. The two commission casds above cited simply follow the rule announced in the two Supreme Court eases cited and discussed by us.

We have already demonstrated that the cause of action asserted by Rose against Noyes et al. is not founded on any written contract as between him and them. The only written contract was between the bank and Rose. We have also demonstrated that the liability of Noyes et al. to Rose is a debt created by statute. Certainly if a suit for damages arising out of a contract is a debt within the meaning of our limitation statute, a suit on a personal liability created by statute is also a debt within the meaning of such statutes.

Rose’s petition shows upon its face that any cause of action he may have had against Noyes et al. had accrued more than two years prior to the filing of this suit. It is therefore barred by the two-year statute of limitation. The Court of Civil Appeals and district court both so held. It follows that the judgment of both lower courts should be affirmed.

CTJRETON, Chief Justice.

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.


author: LEDDY, Judge. CURETON, Chief Justice.

text:
    PLEMMONS INDEPENDENT SCHOOL DIST. et al. v. STINNETT INDEPENDENT SCHOOL DIST. et al.
    No. 1421-6178.
    Commission of Appeals of Texas, Section B.
    May 3, 1933.
    Perry S. Pearson, of Amarillo, and Norman Coffee, of Stinnett, for plaintiffs in error.
    Lackey & Lackey, of Stinnett, Aynesworth &’Aynesworth, of Borger, Stone & Guleke and Sanders & Scott, all of Amarillo, and David W. Stephens, of Fort Worth, for defendants in error.
   LEDDY, Judge.

Several taxpayers brought separate suits in the nature of bills of interpleader in the district court of Hutchinson county against plaintiffs in error Plemmons Independent School District and its officers, and the defendants in error Stinnett Independent School District and its officers. In these suits it was alleged that each of said districts was attempting to collect school taxes for the year 1930 upon certain property owned by the plaintiffs. The relief sought was that the two districts be required to answer and show which of them was entitled to assess, levy, and collect taxes against plaintiffs’ property for said year. They tendered into court the amount of the taxes averred to be due and prayed to be discharged with their costs.

By proper order these suits were consolidated and the pleadings filed were as in a single suit. For convenience the plaintiff in error will hereinafter be referred to as the Plemmons District and defendant in error as the Stinnett District.

The Plemmons District by its answer averred its right to the taxes tendered by the plaintiffs in the several suits by virtue of its incorporation as a school district by a legislative act, which disclosed that its boundaries included the property owned by those filing the interpleader suits.

The Stinnett District answered, claiming to be entitled to the taxes involved by reason of certain proceedings of the county board of school trustees of Hutchinson county, in which the lands described in the inter-pleader suits were, on February 28, 1930, detached from the original territory of the Plemmons District and attached to the Stin-nett District.

It further answered to the effect that if the proceeding by which said territory was detached from the former district and attached to it was for any reason irregular or invalid, the same was validated by the provisions of article 2742i, Vernon’s Ann. Civ. St. (Acts 1930, p. 79, c. 40, § 1).

It also pleaded that on May 2S, 1928, by valid order of the board of county school trustees, there was detached certain other territory from said Plemmons District and attached to its district, and that by reason of the enactment of the validating act aforesaid the annexation of .said territory was in all things validated, and it asked the court to so decree.

By supplemental petition the Plemmons District attacked the validity of the proceedings by which the board of county school trustees detached its territory and attached it to the Stinnett District by order dated February 28, 1930, .on the ground that the petition for annexation of said territory, upon which the order of the county board of school trustees was based, did.not contain a majority of the qualified voters residing in said district as is required by law.

In reply to the Stinnett District’s plea that the territory annexed by order of the county board of school trustees on-May 28, 192S, be decreed as a part of its district, the Plem-mons District pleaded that said annexation proceedings had been declared void in a quo warranto proceeding, duly brought in the district court of Hutchinson county, which judgment had been affirmed by the Court of Civil Appeals. It pleaded said final judgment as res judicata of the claim of the Stinnett 'District to said territory.

It was also averred by the Plemmons District in its supplemental petition that the validating act set up by the Stinnett District did not cure any irregularity in the annexation of said territory under the order of February 28,1930, because said act was passed by the Legislature on the 18th day of February, 1930, became effective as a law on March 10, 1930, and the proceedings alleged as having been cured by said act were had on February 2S, 1930, which was after the date of the passage of the validating act. It was further averred that said act did not operate to validate the annexation of territory under either of the orders of the board of county school trustees because the enacting" clause thereof was not legally sufficient to support that part of the act attempting to validate proceedings detaching territory from one district and attaching it to another.

The case was tried by the court without a jury. Judgment was rendered awarding the taxes involved to the Stinnett District, and determining that the annexation by it of said territory on February 28, 1930, was in all things valid. The court also adjudged that the territory annexed to the Stinnett District by order of the board of county school trustees on May 28, 1928, was, by reason of the enactment of the validating act, legally made a part of said district.

Upon appeal to the Court of Civil Appeals that court sustained defendant in error Plem-mons District’s plea of res judicata, as against the effort of the Stinnett District to have declared valid the annexation of territory had on May 28, 1928. It reformed the judgment of the district court wherein it adjudicated said annexed territory as validly a part of the Stinnett District, and, as so reformed, the judgment of the trial court was affirmed [46 S.W.(2d) 734],

Each school district involved in this case insists that the other is making a collateral attack upon the validity of its incorporation, and that no such attack can be made except in a proceeding by quo warranto or one in which the state is a party.

The Stinnett District has made no attack upon the validity of the Plemmons District, either as it existed prior to the annexation or subsequent thereto. It does not contend that said district as it formerly existed was not a valid incorporation, nor does it claim that since said territory has been detached therefrom the district with its present territory is not a valid incorporation. The Stinnett District is but affirming the validity of its own incorporation. This it has a clear right to do in any character of legal proceeding.

The Plemmons District, however, does attack the validity of the Stinnett District as it is now constituted. It asserts that said district with its present boundaries is illegal, in that the annexation of the additional territory is invalid, and it seeks to have the court so declare. In fact, the Plemmons District’s right to the taxes involved can be determined only by its establishing the invalidity of the annexation proceedings, by which the Stinnett District included the properties of the interpleading plaintiffs within its boundaries.

The rule in this state is settled that the validity of an extension of territory by a city or school district can be assailed only in a proceeding in the nature of a quo war-ranto or one to which the state is a party. Crabb v. Celeste Independent School District, 105 Tex. 194, 197, 146 S. W. 528, 39 L. R. A. (N. S.) 601, Ann. Cas. 1915B, 1146; Brennan et al. v. City of Weatherford, 53 Tex. 330, 37 Am. Rep. 758; City of El Paso v. Ruckman, 92 Tex. 86, 46 S. W. 25; Kuhn v. City of Yoakum (Tex. Com. App.) 6 S.W.(2d) 91.

The Stinnett District insists that the Court of Civil Appeals erred in holding that the judgment in the quo warranto proceeding was res judicata of its claim that there was a valid annexation of territory to its district from the Plemmons District under the order of May 28,1928, of the board of county school trustees.

The Stinnett District filed no application for writ of error in which it complained of the reformation of the judgment of the trial court by the Court of Civil Appeals. For this reason that portion of the judgment has become final, and is not now subject to review by this court.

Our holding that the Plemmons Dis-. trict cannot assail the validity of the annexation proceedings of date February 2S, 1930, in this character of suit, renders it unnecessary to discuss the constitutionality of the validating act or to determine its effect upon such proceedings..

We recommend that the judgment of the Court of Civil Appeals be affirmed.

CURETON, Chief Justice.

The judgment of the Court of Civil Appeals affirmed as recommended by the Commission of Appeals.


author: CRITZ, Judge. CURETON, Chief Justice.

text:
    ATCHISON, T. & S. F. RY. CO. v. SAXON.
    Motion No. 10642; No. 1409-5601.
    Commission of Appeals of Texas, Section A.
    May 3, 1933.
    See, also, 38 S.W.(2d) 775.
    Turney, Burges, Oulwell & Pollard, of El Paso, for plaintiff in error.
    Winbourn Pearce and Walker Saulsbury, both of Temple, for defendant in error. .
   CRITZ, Judge.

In this case Mack Saxon, ancillary administrator of the estate of J. W. Moore, deceased, recovered a judgment in the district court against Atchison, Topeka & Santa Fé Railway Company. On appeal, the Court of Civil Appeals reversed this judgment and rendered judgment for the railway company. 21 S.W.(2d) 686. The administrator prosecuted error to this court, which was granted. On hearing in this court, the judgment of the Court of Civil Appeals was reversed, and the judgment of the district court affirmed. 36 S.W.(2d) 228. On application of the railway company, the Supreme Court of the United States granted a writ'of certiorari, and on hearing reversed the judgment of this court and remanded the cause to this court for observance of the judgment of the United States Supreme Court. 284 U. S. 458, 52 S. Ct. 229, 76 L. Ed. 397.

On receiving the mandate from the United States Supreme Court, this court again considered this case and finally remanded it to the district court for a new trial. 50 S.W.(2d) 1095.

In prosecuting writ of error to this court, the administrator filed writ of error bond in the sum of $1,000, conditioned as follows:

“Now, therefore, know all men by these presents:
“That we, Mack Saxon, ancillary administrator and personal representative in Texas of the estate of J. W. Moore, deceased, as principal, and the other signatory parties hereto, as sureties, acknowledge ourselves bound to pay to the said Atchison, Topeka and Santa Fé Railway Company the sum of One Thousand and No/100 ($1,000.00) Dollars, conditioned that the said Mack Saxon, ancillary administrator and personal representative in Texas of the estate of J. W. Moore, deceased, plaintiff in error, shall prosecute his writ of error, and his application therefor, with effect, and shall pay all costs which have accrued in the court below, and which may accrue in the Court of Civil Appeals and in the Supreme Court.”

It appears that costs have been incurred in this case in the United States'Supreme Court, the Supreme Court of Texas, and the Court of Civil Appeals as follows:

The administrator now tenders to the clerk of this court the sum of $54.05, and attempts to comply with article 1774, R. C. S. of Texas 1925, by filing application for the issuance of mandate without the payment of costs, except the costs in the Court of Civil Appeals, and accompanies such application with an affidavit to the effect that both he and the estate he represents are insolvent, and unable to pay the above costs or give security therefor, etc.

In our opinion the motion should be denied for two reasons:

(a) Because the administrator has already given security for costs in this court and the Court of Civil Appeals by giving the writ of error bond in the amount and conditioned as above shown. Certainly, where the' party applying for the issuance of mandate from this court without the payment of costs under article 1774, supra, has filed writ of error bond in an amount more than such costs to secure the same, he is in no position to ask for the issuance of a mandate on the ground that he is unable to pay costs or give security therefor. The statute under consideration contemplates that, before the mandate will issue without the payment of costs, the party applying therefor shall rest under two disabilities; that is, he must be both unable to pay, and unable to give security. If he has already given full security, he has no rights under the statute at all.

(b) It appears from the record that the judgment of the United States Supreme Court requires the payment of the costs in that court by the administrator. Also that judgment is certified to this court for observance.. Under such a record this court will not order the issuance of a mandate without the payment of the costs in the United States Supreme Court, unless some authority can be found for such action in the federal statutes, or the United States Supreme Court shall by order or judgment authorize the same. We have been cited to no federal statute authorizing the issuance of mandate without the payment of the costs in the United States Supreme Court, and the record contains no order from that court on the subject. Jones v. Kansas City Southern Railway Co. (Tex. Com. App.) 29 S.W.(2d) 988.

We recommend that the motion to issue mandate without payment of costs filed herein by Mack Saxon, administrator, be refused.

CURETON, Chief Justice.

The motion to issue mandate without payment of costs is overruled as recommended by the Commission of Appeals.

We approve the holdings of the Commission of Appeals on the questions discussed in the opinion.


text:
    MOORE et al. v. ROCK CREEK OIL CORPORATION et al.
    No. 1400-6023.
    Commission of Appeals of Texas, Section B.
    May 3, 1933.

      Doreniield, Poster & Eullingim, of Amarillo, for plaintiffs in error.
    Underwood, Johnson, Dooley & Simpson, of Amarillo, for defendants in error.
   LEDDY, Judge.

Plaintiffs in error were stockholders in the Rock Creek Oil Corporation. They made proper demand upon the president and secretary of said company to be permitted to examine its books and records. These officers of the company notified plaintiffs in error that they would permit them to examine such books and records upon certain specified conditions. The conditions named were clearly such as the company had no right to impose against stockholders seeking the statutory right of inspection.

The issuance of a writ of mandamus was sought in this proceeding to compel said corporation to grant plaintiffs in error the statutory right of inspection of its books and records.

Defendants in error’s answer included a plea by which it sought to justify its. refusal to permit said stockholders to examine the books and records of the company. In such plea it was averred that there existed a spirit of hostility on the part of M. E. Bates, E. K. Whitehead, and O. A. Leland, who were formerly members of the board of directors of said company, against Ed R. Mayer, the president of said corporation; that at the last annual meeting of the board of directors held in April, 1929, at an election for directors, Bates, Whitehead, and Leland were defeated for re-election as members of the board of directors; that such action increased the feeling between said parties and the officers of said corporation; that while these parties were not plaintiffs in this suit, they had instigated the bringing of the suit by the plaintiffs in error for the purpose of harassing, vexing, and annoying the officers of the company ; that each of these men had been making attacks upon the character and integrity of the officers of the company, and that they desired to continue on the board of directors for the purpose of annoying and harassing said president in the discharge of his duties to the company; that said three former directors had secured the adherence of a small minority of stockholders, including plaintiffs in error, who instituted this suit; that the plaintiffs in error were all partisans of said Bates and Whitehead in that they shared the feeling of unfriendliness and hostility toward the said Mayer; that they supported the efforts of said Bates, Whitehead, and Leland to remain on the board of directors, and that when they were defeated they became incensed against Mayer; and that in prosecuting this suit the plaintiffs in error are working in concert and pursuant to a common understanding with Bates and Whitehead.

It was further averred that the company had a full and complete audit of its affairs made regularly each year by a reputable and competent public accountant; that such audits have been full and complete and copies have at all times been on file at the office of the company, open to the inspection of all stockholders, including plaintiffs in error, and that printed data from said audits covering all the results and summaries thereof, and the balance sheets, and the profit and loss statements incorporated therein, had been regularly mailed each year to all of the stockholders, including the plaintiffs in error, and that the latter have at all times had the full benefit of the audits of the company and have had in their possession copies thereof.

It was charged that the true intent and purpose off the plaintiffs in error was to go through the form of making a so-called audit ; that they were not actuated by any genuine desire to seek knowledge or information relative to the affairs of the company, but that their demand for such inspection proceeded from ulterior motives, that plaintiffs in error are acting in concert with Bates and Whitehead, and that they are ready to serve their desire, which is to secure something purporting to have the trustworthiness of a professional audit, in the hope and desire to find something or some way to use such audit to alarm other stockholders of the company and disturb their confidence and satisfaction in the management of the company without any real or just cause; that a part of their purpose is to gratify their enmity toward the said Mayer through this suit in order to keep up a state of agitation and demoralization among the general body of the stockholders by stirring up dissatisfaction, discontent, and distrust among the stockholders of the company, and to arouse general public doubt in the stability and soundness of the company in the belief that such purpose and activity will he hurtful and ruinous to the said Mayer.

The answer further set forth that the said Bates had theretofore procured a stockholder’s license in the state of Colorado, and has dealt in the stock of said company and wishes to continue such practice, and by virtue of the instigation of the plaintiffs in error herein and the effects of this suit, she means to keep up a state of agitation and demoralization in the affairs of the company and thereby promote an unsettled market standing of the stock of the company, which will facilitate dealing in the stock in her own interest, and the exploitation of the stock of the stockholders, and such activity is and will be altogether without regard to the effect that such conditions in the company are destructive to its best interests and the welfare of the general body of stockholders and the value of the stock.

It was further averred that during the time Bates and Whitehead were on the board of directors it became general and public knowledge that they were hostile to the president •of the company, and that dissension existed in the directorate of the company, and such condition and public knowledge thereof reacted unfavorably to the company; that if the plaintiffs in error are permitted to have their own way by further annoying and harassing the company by this suit and their designs herein to prolong such vexatious interference in the affairs of the company, and with the personnel of the stockholders, and succeed, along with the said Bates, in their common hostile purpose herein, the standing and credit of the company and the value of its stock will be further depressed to the great pecuniary detriment of the company and its stockholders.

Plaintiffs in error demurred to the above answer. This demurrer was sustained by the trial court. They declined to amend, and the cause was tried upon an agreed statement as to the facts substantiating the allegations of plaintiffs in error’s petition. Based upon such facts, the trial court awarded the writ of mandamus as prayed for.

Upon appeal by defendants in error to the Court of Civil Appeals, the judgment of the trial court was reversed and the cause remanded for another trial. 41 S.W.(2d) 501. The ground of reversal was that the trial court erred in sustaining the demurrer urged to the defendants in error’s answer. Writ of error has been granted to determine the correctness of that ruling.

The question we are called upon to decide is whether the facts averred in defendants in error’s answer constitute a defense to the statutory right accorded stockholders of this corporation to examine its books and records upon proper demand.

At common law the right of inspection was not an absolute one. Under this rule the stockholder was compelled to establish that the inspection was asked in good faith and for an honest purpose.

The authorities are somewhat in conflict as to the absolute or qualified character of a stockholder’s statutory right of inspection (Rev. St. 1925, art. 132S). The decided weight of authority, however, is that when the right is conferred by statute without restriction it is an absolute one. Pfirman v. Success Min. Co., Ltd., 30 Idaho, 468, 474, 166 P. 216; Powelson v. Tennessee Eastern Electric Co., 220 Mass. 380, 107 N. E. 997, Ann. Cas. 1917A, 102; People v. Keeseville, etc., Ry. Co., 106 App. Div. 349, 94 N. Y. S. 555; People v. Bowie (Sp. Sess.) 166 N. Y. S. 905; State ex rel. Doyle v. Laughlin, 53 Mo. App. 542; State ex rel. Spinney v. Sportsman’s Park & Club Ass’n, 29 Mo. App. 326; Cincinnati Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 56 N. E. 1033, 48 L. R. A. 732, 78 Am. St. Rep. 707; Poster v. White, 86 Ala. 467, 6 So. 88; Cotheal v. Brouwer, 5 N. Y. 562; Clawson v. Clayton, 33 Utah, 266, 93 P. 729; Venner v. Chicago City Ry. Co., 246 Ill. 170, 92 N. E. 643, 138 Am. St. Rep. 229, 20 Ann. Cas. 607; State ex rel. Costelo v. Middlesex Banking Co., 87 Conn. 483, 88 A. 861; Purst v. W. T. Rawleigh Medical Co., 282 Ill. 366, 118 N. E. 763; People v. Pacific Mail S. S. Co., 50 Barb. (N. Y.) 280.

It does not follow, however, that in every instance this right will be enforced by the courts. It must be borne in mind that the enforcement of the right is by mandamus. Such a writ is not issued as a matter of right, but in the exercise of a sound judicial discretion which allows the court to view other considerations than the mere legal right of the relator. This principle is well illustrated by the decision of our Supreme Court in Westerman v. Mims, 111 Tex. 29, 227 S. W. 178, 181. In that case the relator sought by writ of mandamus to compel the respondent secretary of state to instruct the county clerk of Galveston county to have the name of Aubrey Puller printed on the official ballot for the November election as an independent candidate for district judge. It was made to appear that said respondent had fully complied with the election laws requisite to have his name placed upon the ticket as su.ch candidate. In other words, he was seeking to enforce an undisputed legal right. It was disclosed, however, that the respondent Puller had voted in the Democratic primary. He had taken a pledge to support all of the nominees of that primary. Under such circum-s'tances the court declined to put into motion its legal machinery to aid the respondent to consummate his purpose to defeat a candidate whose nomination he had solemnly pledged himself to support. In denying th'e writ the court, speaking through Justice Greenwood, said:

“Our statute empowers this court to issue writs of mandamus ‘agreeable to the principles of law regulating such writs.’ Article 1526, Vernon’s Sayles’ Texas Civil Statutes.
_ “Among the principles regulating the issuance of writs of mandamus, which cannot be regarded otherwise than as clearly settled, is one which is thus stated in section 1380 of Spelling’s Extraordinary Relief:
“ ‘While the remedy by mandamus is not equitable, but strictly legal, yet by analogy to the principles prevailing in courts of equity it is a uniform requirement that the relator in seeking this remedy must come into court with clean hands.’
“To the same effect, see section 26, High’s Extraordinary Legal Remedies.”

The Supreme Court of Ohio in American Mortgage Co. v. Rosenbaum, 114 Ohio St. 231, 151 N. E. 122, 124, 59 A. L. R. 1368, in discussing the discretion vested in the court to issue a writ of mandamus to enforce a strict legal right of this character, said: “The principle involved in this case is not new, but, on the contrary, is very old, very simple, and very fully in accord with good sense and common honesty; that is to say, one may possess a legal right, unconditional in character, with respect to the enforcement of which he may avail himself of all legal remedies applicable thereto, and, still, if the results which must attend and follow the enforcement are such as will shock the conscience of a court of equity, that court, if asked to issue its mandatory injunction as an aid to such enforcement, should, in the exercise of a sound discretion, deny the application and leave the party to pursue his legal remedies. Extraordinary writs are issued by courts of equity to prevent and correct wrongs, but are not employed to promote wrongs.”

The Supreme Court of the United States, in Turner v. Fisher, 222 U. S. 204, 209, 32 S. Ct. 37, 38, 56 L. Ed. 165, has declared a similar rule. Justice Lamar, speaking for the court, made this observation: “Mandamus * * ⅜ win not be granted in aid of those who do not come into court with clean hands,” since the writ issues “to remedy a wrong, not to promote one.”

Where a stockholder seeks to enforce by mandamus the statutory right of inspection, he 'has made a prima facie case when he alleges his interest as a stockholder and the refusal of the corporation to grant him such right of inspection after proper demand therefor. It is not essential that he allege or prove that in seeking the issuance of such writ he is acting in good faith and for an honest purpose. The statute places no such restriction upon the right granted, and the court cannot do so.

But when the corporation pleads, and is able to'establish by proof, a state of facts sufficient to convince the court that the stockholder is not seeking the information which might be revealed by the desired inspection for the protection of his interest as a stockholder, or that of the corporation, but that he is actuated by corrupt or unlawful motives, the court will not, by the issuance of its writ of mandamus, aid him to consummate such corrupt and unlawful purposes.

We are thus brought to a decision of the question as to whether the facts alleged in defendants in error’s plea are sufficient to show that plaintiffs in error’s request for the issuance of the writ of mandamus should be denied because it has been made to appear by the averments of the answer that they are not in court with clean hands.

In considering the sufficiency of defendants in error’s answer, all of the allegations with reference to the injurious effect upon the corporation by the suit brought by plaintiffs in error must be eliminated. If plaintiffs in error’s demand for an inspection of the books of the eoiTporation should have been granted, it necessarily follows that they would be entitled to prosecute this suit to enforce the right thus denied, even though its bringing might have all of the injurious effects alleged. We shall therefore consider only those averments of the answer which, are made the basis of the corporation’s refusal of the plaintiffs in error’s demand for inspection. Briefly summarized, they are as follows:. (1) That there existed a spirit of hostility between plaintiffs in error and the officers of the company,. and that the former, in seeking to ascertain the condition of the company’s affairs, were in hopes of finding something which could and would be used to alarm other stockholders; (2) that the plaintiffs in error had been furnished full information as to the financial condition of the company through its annual financial statement and copies of annual audits made at its instance; (3) that the demand for inspection and the suit to enforce same were instigated by. Dr. Bates for the purpose of depressing the market value of the corporation’s stock in order to facilitate her dealing in the same as a stock broker.

The mere fact that stockholders seeking an inspection are on unfriendly terms with the company is no ground for denying their statutory right of inspection of the books of the corporation. Cobb v. Lagarde, 129 Ala. 488, 30 So. 326; Furst v. W. T. Rawleigh Med. Co., 282 Ill. 366, 118 N. E. 736; Meysenburg v. People, 88 Ill. App. 328; Ellsworth v. Dorwart, 95 Iowa, 108, 63 N. W. 588, 58 Am. St. Rep. 427.

Nor is it any reason for denying such examination that plaintiffs in error hope to find something alarming in the affairs of the company, which they intend to communicate to other stockholders. If in truth and in fact no alarming condition exists, presumably it will not be found through any examination made by plaintiffs in error. If there is existent anything in the financial affairs of the company which would be reasonably calculated to alarm .the stockholders in general, we see no reason why plaintiffs in error could not properly communicate such fact to other stockholders. The stockholders of a corporation are the beneficial owners of the corporate property, and are therefore vitally interested in knowing tlie true condition of its affairs. If a condition exists which is calculated to alarm the stockholders, they are legitimately entitled to know such fact, and there would be nothing improper should plaintiffs in error communicate the information thus obtained to other stockholders.

Defendants in error are not entitled to defeat plaintiffs in error’s statutory right of inspection by offering them the substitute of financial statements issued by the company or an auditor’s report made at its instance. The right given the stockholders by the statute is an absolute one. They cannot be required to accept a substitute in the way of financial statements and auditor’s reports which may -be believed by the corporation’s officers to be just as good as the statutory right of examination. The right thus granted by the statute cannot be bartered away by the officers of the corporation.

The motive attributed to Dr. Bates of desiring to depress the market value of the corporation’s stock so that she might, as a broker, deal more profitably in the sale of the same, cannot properly be charged against the plaintiffs in error even though it is averred that plaintiffs in error were acting under the instigation of Dr. Bates in making the demand for examination and bringing this suit. Dr. Bates was not one of the stockholders who demanded the inspection, nor is she a party to this suit. The motive actuating her cannot be fairly imputed to the plaintiffs in error. It is not charged that they will participate in any profits made by Dr. Bates in the sale of the company’s stock. It is wholly incredible that the stockholders who made the demand for an examination of the company’s affairs and brought this suit to enforce such demand were motivated in doing so to depress the market value of their own stock in the company in order to facilitate the sale of the corporation’s stock by a third person.

Defendants in error’s answer is largely made up of legal conclusions as to the motives actuating plaintiffs in error in their demand for the right of inspection of the corporation’s books and records.. It is our judgment that the facts alleged are not sufficient to show that plaintiffs in error are in court with unclean hands because actuated by corrupt or unlawful motives in seeking an examination into the company’s affairs.

We therefore conclude the trial court’s action in sustaining the demurrer to defendants in error’s answer was proper, and that the Court of Civil Appeals erred in holding to the contrary.

We recommend that the judgment of the Court of Civil Appeals be reversed and that of the trial court affirmed.

CURETON, Chief Justice.

The judgment of the Court of Civil Appeals is reversed and that of the district court affirmed as recommended by the Commission of Appeals.


author: SHORT, Presiding Judge. CURETON, Chief Justice.

text:
    McGLOTHLIN v. COODY et al.
    No. 1406-6040.
    Commission of Appeals of Texas, Section B.
    May 3, 1933.
    Ratliff & Ratliff, of Haskell, for plaintiff in error.

      D. J. Brookreson, of Benjamin, for defendants in error.
   SHORT, Presiding Judge.

We take the following statement of this case from the application for the writ of error:

“This was a suit instituted in the District Court of Knox County, Texas, by A. C. Mc-Glothlin, plaintiff in error, to foreclose a judgment lien claimed to exist against certain lands in said county, owned by ,6. H. Coody and his wife, Cora Coody. Several years prior to the institution of said suit, Chas. E. Coombes had recovered a judgment in the District Court of Jones County against said G. H. Coody for debt, and against said Coody and one Mrs.- J. T. George for foreclosure of a vendor’s lien upon certain property situated in Benjamin, Texas. An abstract of the judgment was duly filed in Knox County, and was indexed as required by law, except (as found by the trial court), it “was not indexed under the letter ‘G’ and no index made of the defendant, Mrs. J. T. George’s name on said index.”
“In the original suit, no personal judgment was rendered in favor of Coombes against the defendant, Mrs. J. T. George, but Mrs. George recovered judgment for costs against her co-defendant,' G. H. Coody, by reason of his cross-action against her, and the officers of the court recovered judgment against the respective parties for the costs incurred by them.
“Subsequent to abstracting the judgment in the original suit, Coody executed a deed of trust upon the land involved to the defendant in error, First Bank of Truscott, to secure certain indebtedness to that bank, by reason of which fact, the bank was made a party to the present suit. The bank, in addition to resisting plaintiff in error’s lien, and the right to foreclose, sought recovery of its debt and foreclosure of the deed of trust. A trial was had without a jury, and the trial court rendered judgment in favor of plaintiff in error against Coody for the balance due on the judgment, and the bank recovered judgment against Coody and foreclosure of the deed of trust. By reason of the fact that the abstract of judgment in the original suit ‘was not indexed under the letter “G” and no index made of the defendant, Mrs. J. T. George’s name on said index’, the trial court adjudged that the lien of the bank was superior to plaintiff in error’s judgment lien, •but because of the default of Coody and his wife, gave plaintiff in error judgment of foreclosure of the judgment lien, subject to the foreclosure adjudged in favor of the bank.
' " “The Court of Civil Appeals for the 11th Supreme Judicial District, affirmed the judgment of the trial court [39 S.W.(2d) 133], Motion for re-hearing was duly filed, presenting each of the errors assigned in this application, which was overruled on the 12th day of June, A. D. 1931, and your applicant now applies for a writ of error.
“As stated by the Court of Civil Appeals in the opinion, ‘the sole question presented is whether or not, by reason of the failure to index said abstract of judgment alphabetically in the name of Mrs. J. T. George, one of the defendants in the judgment, the judgment lien ever in fact came into existence.’ ”

The application was granted on the conflicts alleged principally by reason of the alleged conflict with the case of Blum v. Keyser, 8 Tex. Civ. App. 675, 28 S. W. 561.

Articles 5447, 5448, and 5449, R. C. S. 1925, necessarily control the only question involved, and .the law of this case depends upon a proper construction of those articles. These articles are as follows:

“Article 5447. Each clerk of a court, when the person in whose favor a judgment was rendered, his agent, attorney or assignee, applies therefor, shall make out, certify under his hand and official seal, and deliver to such applicant upon the payment of the fee allowed by law, an abstract of such judgment showing:
“1. The names of the plaintiff and of the defendant in such judgment.
“2. The number of the suit in which the judgment was rendered.
“3. The date when such judgment was rendered.
“4. The amount for which the judgment was rendered and balance due thereon.
“5. The rate of interest 'specified in the judgment.
“Each justice of the peace shall also make and deliver an abstract of any judgment rendered in his court in the manner herein provided, certified under his hand.
. “Art. 5448. Each county clerk shall keep a well bound book called the ‘judgment record,’ and he shall immediately file and therein record all properly authenticated abstracts of judgment when presented to him for record, noting therein the day and hour of such record. He shall at the same time enter it upon the alphabetical index to such judgment record, showing the name of each plaintiff and of each defendant in the judgment, and the number of the page of the book upon which the abstract is recorded. He shall leave a space at the foot of each such abstract for the entry of credits upon and satisfaction of such judgment, and shall enter the same when properly shown.
“Art. 5449. When any judgment has been so recorded and indexed, it shall from the date of such record and index operate as a lien upon all of the real estate of the defendant situated in the county where such record and index are made, and upon all real estate which the defendant may thereafter acquire situated in said county. Said lien shall continue for ten years from the date of such record and index; hut if the plaintiff fails to have execution issued upon his judgment within twelve months after the rendition thereof, said lien shall cease to exist.”

However, the articles involved here are 5447 and 5448, and it appears that, according to the provisions of article 5447 the clerk of a court, upon an application having been made, shall make out, certify, and deliver to the applicant an abstract of judgment, showing five different things, the first of which is that the abstract shall show the' names of the plaintiffs in the judgment, and of the defendants in the judgment, not the name of one of the plaintiffs, and not the name of one of the defendants, but the names of the several defendants, if there be several, and the names of the several plaintiffs, if there be several, appearing upon the face of the judgment. After this has been done, and this instrument has been handed to the clerk, where it is sought to create a lien, then, according to article 5448, this clerk shall record all properly authenticated abstracts of judgment when presented to him for record, noting therein the day and hour of ’such record, and, after -he has done this, the clerk is required to enter it upon the alphabetical index to such judgment record, showing the name of each plaintiff and of each defendant in the judgment and the number of the page of the book upon which the abstract is recorded. In other words, the judgment lien given by plaintiff in a judgment is purely a statutory one, and a person who asserts that he has such a lien must show that each and every requirement of the statute has been followed in order that he shall establish the existence of such lien.

The judgment rendered in the district court of Jones county, which was abstracted and recorded in Knox county, was rendered against Mrs. J. T. George in favor of the plaintiff, Coombes, in that suit, foreclosing a vendor’s lien on certain town property in Benjamin, Tex., and in favor.of the defendant, Mrs. J. T. George, on the cross-action of the defendant, G. H. Coody, and Mrs. J. T. George, recovered an affirmative money judgment against said G. H. Coody to the extent of the cost incurred by reason of said cross-action. Among the findings of fact by the trial court is the following: “I further find that the said abstract of judgment was not indexed under the letter ‘G,’ and no index made of the defendant, Mrs. J. T. George’s name on said index.” The opinion of the case of Blum v. Keyser, supra, is in partial conflict with the opinion in this ease, and to the extent that it is in conflict it should be overruled. In that case the court held that it was not necessary to place the names on the indirect index. To that extent we think the opinion of the court in that case is erroneous. The statute which requires the abstract of judgment to show the names of each party, both plaintiff and defendant, has not been complied with in this case, and no lien was created. In the case of Cocke v. Conquest, 2 S.W.(2d) 992, 994, wherein the opinion of the Court of Civil Appeals was approved by the Supreme Court, in an opinion in the same case, 13 S.W.(2d) 348, it was said by the Court of Civil Appeals: “ ‘The names of all the parties to the judgment appear in the index direct and reverse, but the names of Minnie A. Conquest and It. M. Davis as defendants in judgment do not appear under the page of the index originally set aside for indexing names beginning with the letter “C.” ’ This was not a compliance with the law with reference to proper indexing and therefore, it created no lien upon the property in question.”

In Askey v. Power, 36 S.W.(2d) 446, the Commission of Appeals, in its opinion, among other things, held that right to a judgment lien is purely statutory, and to secure it there must be substantial compliance with all requirements of statutes relating to subject. In the case of Bonner v. Grigsby, 84 Tex. 330, 19 S. W. 511, 31 Am. St. Rep. 48, the Supreme Court held that merely leaving the number of the judgment off was not a compliance with the statute and created no lien. To the same effect is the opinion in the case of San Antonio Loan & Trust Company et al. v. Davis (Tex. Civ. App.) 235 S. W. 612. In the case of McLarry v. Studebaker Bros. Co. of Texas (Tex. Civ. App.) 146 S. W. 676, 678, the court, among other things, said: “We are of the opinion that the statute * * * makes it necessary to index the judgment alphabetically in the name of each plaintiff and of each defendant in the judgment, and that it is required that it shall be correctly indexed, giving each of such names.”

In the case of Guaranty State Bank of Donna v. Marion County National Bank (Tex. Civ. App.) 293 S. W. 248, 249, it was held: “This requirement is mandatory, and is construed to mean that the names of each party to the judgment, both plaintiff and defendant, must appear in the index in its alphabetical order.” See, also, Noble v. Barner, 22 Tex. Civ. App. 357, 55 S. W. 382; Gullett Gin Co. v. Oliver, 78 Tex. 182, 14 S. W 451; Vidor v. Rawlins, 93 Tex. 259, 54 S. W. 1026; Evans v. Frisbie, 84 Tex. 343, 19 S. W. 510; Pierce v. Wimberly, 78 Tex. 189, 14 S. W. 454; Nye v. Moody, 70 Tex. 434, 8 S. W. 606; Nye v. Gribble, 70 Tex. 462, 8 S. W. 608; Belbaze v. Ratto, 69 Tex. 636, 7 S. W. 501; Anthony v. Taylor, 68 Tex. 403, 4 S. W. 531; Askey v. Power (Tex. Com. App.) 36 S.W.(2d) 446; Bush v. Farris (C. C. A.) 71 P. 770, 774; Shirk v. Thomas, 121 Ind. 147, 22 N. E. 976, 16 Am..St. Rep. 387 and note. In other words, we find the authorities are substantially in harmony to the effect that, before one can create a judgment lien under the statute, by registering an abstract of judgment, he must comply with all requirements of the statute, since the statute does not empower him to create a lien in any other manner.

We recommend that the judgment of the Court of Civil Appeals affirming that of the district court be affirmed.

CURETON, Chief Justice.

The judgments of the District Court and the Court of Civil Appeals are both affirmed as recommended by the Commission of Appeals.