text:
    MILLER et al. v. FOARD COUNTY et al.
    No. 3876.
    Court of Civil Appeals of Texas. Amarillo.
    March 8, 1933.
    Rehearing Denied April 12, 1933.
    Bartlett, Thornton & Montgomery, of Dallas, for appellant American Surety Co.
    M. M. Hankins, of Quanah, for appellants R. D. Fox, G. M. Thacker, N. J. Roberts, J. R. Beverley, and J. W. Bell.

      Storey, Peak & Storey, of Vernon, for appellant Que R. Miller.
    R. D. Oswalt, of Crowell, and Marsliall & Perkins, of Quanah, for appellee Foard County.
   JACKSON, Justice.

Foard county instituted this suit to recover $26,427.97 from Que R. Miller, tax collector, R. D. Fox, N. J. Roberts, G. M. Thacker, J. R. Beverley, and J. W. Bell, the individual sureties on Miller’s official bond for his term as tax collector ending December 31, 1930, and the American Surety' Company of New York, a corporation, the surety on his official bond for the period from January 1, 1931, to 'September 1st thereafter. $1,389.80 of said sum were alleged to be school taxes, the recovery of which was eliminated by the court.

The county alleged the election and qualification of -Miller as tax collector for two terms, his duty to collect and receive all tax moneys due the county, and all registration fees for motor vehicles licensed in the county and pay such collections to the proper officers thereof; that as tax collector he, with the individual sureties, executed his official bond for the -first term ending December 31, 1930, and that he and the corporate surety executed his official bond for the second term, which was terminated by the resignation of Miller September 1, 1931.

The county set up the terms, conditions, and amount of each bond, the approval thereof by the gommissioners’ court, and attached copies of said bonds to- its petition as a part thereof.

The county alleged that during the period from August 1, 1930, to September 1, 1931. Miller coilected approximately $51,343.86, the exact amount of which it could not state, but that during said period he collected, after deducting the legal commissions claimed, the sum of $25,038.17 taxes, interest, penalties, and registration fees which he failed to pay to the county or its proper officers; that $220.50 thereof were special road taxes, $8,476.33 were registration fees for motor vehicles or license taxes, and $16,341.34 of said sum constituted occupation, poll, and county ad va-lorem taxes; that Miller was indebted to -the county in the sum of $25,038.17, in which sum he had defaulted and for which he and his sureties were liable; that the whole of said sum so collected and unaccounted for, except approximately $1,274.35, was collected as taxes assessed and upon the tax rolls of the county for the year 1930; that the county could not state on what date the defalcation occurred, or which set of sureties was liable therefor, hut that all sums for which the tax collector had failed to account were covered by one or the other of his official bonds, for which reason both sets of sureties were made parties defendant.

The county sought judgment against Miller for the amount of taxes collected by him and not paid to the county, with legal interest, and against the individual sureties and the corporate surety for such portion of said shortage as the evidence showed each set of sureties to be respectively liable.

Que R. Miller answered by general demurrer, general denial, and pleaded that neither he nor his sureties upon either of said bonds were responsible to the county for any unpaid sum collected as motor vehicle registration fees, because he as tax collector received approximately $15,000 as registration fees for motor vehicles, the owners of which were nonresidents of Foard county; that he issued tax receipts aggregating the sum of $1,000, for which he accepted checks, and they were never paid, and for the amount of such registration fees and such checks neither he nor his bondsmen were liable.

The individual sureties pleaded general demurrer, special exceptions, and asserted that Foard county had and maintained a county. depository for the period covered by their bond; and all taxes collected by Miller were 'deposited therein; that he issued tax receipts for checks not paid and receipts in payment of his personal obligations and license fees to nonresident motor vehicle owners, for all of which reasons the individual sureties owed no obligation to the county.

The corporate surety pleaded general demurrer, special exceptions, general denial, and specially that a part of the registration fees for motor vehicles were received from nonresidents of Foard county, and did not involve the official duty of the tax collector, and were therefore illegally collected, and that all moneys collected by Miller during the period covered by the corporate surety’s official bond were deposited in the county depository, which discharged Miller and the corporate surety.

The record shows that the parties entered into the following agreement;

“It is agreed that reports filed by the tax collector for the months of January, 1931,-to August, 1931, inclusive, show the total amount of automobile registration fees collected by him during that period, and the net amount thereof due the County, after deducting his fees for collecting same, are as follows: Gross collections, $18,504.98; Net amount due County,. $17,848.10.
“It is further agreed that the total amounts paid by the Collector to the County Treasurer, (and which was by her deposited to the credit of the Road and Bridge Fund) upon the above mentioned reports, was the sum of $9,371.77; and the same was paid to the Treasurer, in the several amounts, and upon the dates testified by her.
“It is further agreed that the report for the first part of January, 1931, report and include Commercial Vehicle Receipts numbered one to twelve, inclusive; that each of said receipts hear date in the month of December, 1930; that the total gross amount collected by said twelve receipts is the sum of $774.70; and that said sum of $774.70, was collected by the Collector during the month of December, 1930, and prior to January 1, 1931.
“But nothing in this agreement shall be construed as an agreement that said reports were admissible in evidence, or that the introduction thereof proves or tends to prove the material allegations or any of them, in plaintiff’s second amended original petition.”

In response to special issues submitted by the court, the jury found, in effect, that Que R. Miller failed to account for and pay over to Foard county, after deducting the legal commissions, county ad valorem, special road, poll, and occupation taxes amounting to $3,-336.96, collected from August 1, 1930, to December 31, 1930; that he failed to account for and pay over to Foard county, after deducting the legal commissions claimed, county ad valorem, special road, poll, and occupation taxes amounting to $13,108.03, collected from January 1,1931, to September 1,1931.

On this agreement and the findings of the jury the court rendered judgment against Que R. Miller and the individual sureties for the sum of $3,336.96, with interest, and for the sum of $768.70'as registration fees, aggregating a' total of $4,105.66; and against Que R. Miller and the corporate surety for the sum of $13,108.03 with interest, and $7,707.63 as registration fees, or an aggregate of $20,-815.66.

The individual sureties, having. failed to file bond, did not perfect an appeal. Que R. Miller perfected his appeal, but filed no brief.

The corporate surety, appellant, presents as error the failure of the court to instruct the jury that any tax money received and deposited by the collector in the county depository would constitute an accounting and discharge appellant from liability therefor, as the evidence discloses that part of the money sued for was so deposited.

. This contention is decided adversely to appellant by Chief Justice Hall in Miller et al. v. State (Tex. Civ. App.) 53 S.W.(2d) 792, writ refused.

The appellant challenges the sufficiency of the testimony to support the finding of the jury that Miller from January 1, 1931, to September 1st thereafter, when he resigned,collected and failed to account for $13,108.03, because the evidence shows that a part of said sum was collected in December, 1930, and under the law appellant was not liable for such part.

The official bond upon which the county seeks to hold the- appellant became effective January 1, 1931, and any taxes collected and misappropriated prior to that date would not be chargeable against this appellant. Coe et al. v. Nash County Judge, 91 Tex. 113, 41 s. W. 473; Newcomer et al. v. State of Texas, 77 Tex. 286, 13 S. W. 1040; State of Texas v. Middleton’s Sureties, 57 Tex. 185.

Under article 7261, R. C. S., it was the duty of Que R. Miller, at the end of each month, to make a report to the commissioners’ court of all collections made for the county in the manner and form prescribed for reporting taxes collected for the state under article 7260. These articles require that he show each and every item of ad valorem, poll, and occupation taxes collected by him during the month; that he present this report, together with the tax receipt stubs, to the county clerk, whose duty it is to compare such report with said stubs as to names, dates, and amounts and, if correct, certify thereto.

The record discloses that Que R. Miller, as tax collector by his deputy Marion Crowell, made the report as required by law for the taxes collected during the month of January, 1931; that the report was sworn to by the deputy and by Que R. Miller, and properly certified by A. G. Magee as county clerk. The report shows that the taxes which appellant contends were collected and paid in December, 1930, were not collected and paid until the month of January, 1931.

Testimony was introduced tending to show that certain items on the report were collected and paid in December, but such evidence was not so conclusive that it would authorize this court to disregard the finding of the jury to the effect that such items were collected and paid in January.

“In determining whether a peremptory instruction should be given or whether there is testimony to support the findings of a jury in this case, only the testimony supporting plaintiff’s claim may be considered, and we must accept as true the evidence supporting the findings of the jury on the issues presented. Roddy et al. v. Citizens’ State Bank of Copeville (Tex. Civ. App.) 11 S.W.(2d) 652; M., K. & T. Ry. Co. of Texas v. Cunningham, 118 Tex. 607, 23 S.W.(2d) 343; Willis & Conner v. Turner (Tex. Civ. App.) 25 S.W.(2d) 642; Henry v. Publix Theatres Corporation (Tex. Civ. App.) 25 S.W.(2d) 695; Frazier v. Hanlon Gasoline Co. (Tex. Civ. App.) 29 S.W.(2d) 461; Henderson v. Burkholder (Tex. Civ. App.) 29 S.W.(2d) 937.” Jones v. Jones (Tex. Civ. App.) 41 S.W.(2d) 496, 497.

The appellant contends by proper assignments that the law requires the owners of motor vehicles to apply to, register with, and pay license fees to the tax collector of the county in which such owner resides at the time of registration, and, as the evidence discloses without dispute that Que R. Miller, from January 1, 1931, to September 1st thereafter, collected $7,997.74 from owners who were-nonresidents of Foard county, it was error to render judgment against it for said sum because such collections were no part of Miller’s official duty, tbe faithful performance of which the appellant guaranteed by its bond.

The record discloses that Que R. Miller collected, according to his reports, from January 1 to September 1,1931, the net amount of $17,-848.10 as motor vehicle registration fees, of which sum $740.70 was collected during December, 1930; that he accounted for the sum of $9,371.77, leaving a balance collected after January 1st and unaccounted for of $7,701.63. The testimony discloses without contradiction that $603.89 of this amount were registration fees collected from residents of Eoard county; that $1,876.62 thereof were collected as registration fees from nonresidents of the state; that $5,221.12 thereof were registration fees collected from owners of motor vehicles who resided in Texas, but did not live in Foard county; that Miller went out of Foard county and solicited the payment of much of such last two items; that the members of the commissioners’ court knew and acquiesced in the collection of registration fees from owners who did not reside in Foard county.

Article 827b, § 2, Vernon’s Ann. P. C., provides that a nonresident of the state owning- a motor vehicle that he desires registered may apply “through-a County Tax Collector for the registration thereof,” and obviously permits a tax collector of any county to whom application is made to issue the license provided by law, collect the fee therefor,. and pay the same to the county.

Article 6675a — 2, Vernon’s Ann. -Civ. St., provides, in part: “Every owner of a motor vehicle, trailer or semi-trailer used or to be used upon the public highways of this State * * @ shall apply each year to the State Highway Department through the County Tax Collector of the County in which he resides, for the registration of each such vehicle owned or controlled by him ⅜ * * for the ensuing or current calendar year or unexpired portion thereof.”

Article 6686, R. C. S., subd. d, reads as follows: “All registration fees shall be paid in the county in which the owner lives at the time of registration of said motor vehicle.”

Article 6675, R. C. S., repealed before the transaction here involved occurred, permitted the owner of a motor vehicle to pay registration fees at “the office of the county tax collector of the county in which he resides or in which the vehicle to be registered is being operated.”

The omission of the language “Or in which the vehicle to be registered is being operated” from article 6675a — 2, the provision of subdivision d of article 6686 requiring that: “registration fees shall be paid in the county in which the owner lives,” together with the provision of article 6675a — 10 authorizing each county to retain all registration fees collected until the amount for the current year shall have reached the sum of $50,000, said sum to be deposited to the credit of its road and bridge fund, clearly manifests the intention of the Legislature to direct and require such registration fees to be collected by the tax collector of the county in- which the owner of the vehicle lives.

If these statutes fail to accomplish such purpose, it follows that the funds of one county may be received and appropriated by another county.

This brings us to a consideration of whether appellant as bondsman is liable for the registration fees collected by Que R. Miller, tax collector, from owners of motor vehicles who reside in Texas but did not live in Foard county.

The bond executed by appellant is in conformity with the statute, and provides that Miller shall faithfully perform all the duties of his office as collector of taxes for and during the full term for which he was elected.

It is settled in this state that a surety for compensation has the same protection in law as a surety who executes a bond without compensation. Lonergan v. San Antonio Trust Co., 101 Tex. 63, 104 S. W. 1061, 106 S. W. 876, 22 L. R. A. (N. S.) 364, 130 Am. St. Rep. 803; Hess & Skinner Engineering Co. et al. v. Turney et al., 110 Tex. 148, 216 S. W. 621, but the surety on an official bond does not occupy altogether the same position as a surety of a private contract, Brown v. Sneed, 77 Tex. 471, 14 S. W. 248, 252.

The Texas authorities recognize the rule which distinguishes the liability of a surety for the acts of an officer for which they are liable and for acts for which they are not liable.

“The former are termed acts done ‘virtute officii,’ and the latter ‘colore officii.’ The distinction is this: Acts done ‘virtute officii’ are when they are within the authority of the officer, but when doing it he exercises that authority improperly, or abuses the confidence which the law reposes in him; whilst acts done ‘colore officii’ are where they are of such nature the office gives him no authority to do them.” Gold v. Campbell, 54 Tex. Civ. App. 209, 117 S. W. 463, 468.

In Jeff Davis County v. Davis (Tex. Civ. App.) 192 S. W. 291, writ refused, - the same rule is announced. See, also, Fidelity & Deposit Co. v. Smith, 35 Ga. App. 744, 134 S. E. 801.

The Supreme Court, in Wood v. Stirman, 37 Tex. 584, says that: “If the appellee collected taxes without authority of law, he alone is responsible for that illegal act, and neither his securities nor the county are responsible to appellants for the money so collected, notwithstanding he may have paid the same Into the county treasury, to be disbursed as' other funds of the county.’*

In Heidenheimer Bros. v. Brent, 59 Tex. 533, it is said: “The mere fact that the sheriff had the money in question in his possession is not enough to bind his sureties. It must also appear that it came into the hands of the sheriff by virtue of some process or lawful authority, and that he then failed to pay it over.”

Again, in Brown v. Sneed, supra, the Supreme Court holds: “The sureties on the 'bond of a clerk of a court were held not to be liable for money paid into his hands by executors, etc., because it was not in the line of his official duties as clerk of the court to receive such money; and they were liable only for the performance of his official duties.”

In Henderson County v. Richardson et al., 15 Tex. Civ. App. 699, 40 S. W. 38, 39, the court announces: “We think it clear that the sureties of the said Dickerson were only bound for moneys that he might have received in his official capacity; and as the moneys he received from the sale of school lands were not received by him in his official capacity as county judge, nor in the official discharge of his duties as such, the appellees are not liable therefor.”

In American Surety Co. of New York et al. v. Hidalgo County et al. (Tex. Civ. App.) 283 S. W. 267, 269, the court states the rule as follows: “The liabilities of sureties are strictis-simi juris, and cannot be extended beyond the terms of their contracts. The mere fact that the treasurer had the money of the drainage district and failed to account for it did not render his sureties liable. It was absolutely necessary to show that the money came into his hands as county treasurer under the terms of his bond as such treasurer.”

We are not unmindful of the rule which holds sureties on official bonds liable for illegal taxes and illegal fees voluntarily paid, but the registration fees in controversy were legal fees payable to the proper counties for their road and bridge funds, and their collection by Que R. Miller was a diversion thereof, and his acts in so doing were not authorized or sanctioned 'by law. They were not illegal fees voluntarily paid, but were legal fees unlawfully collected under the col- or of office and not in the performance of official duty. If this conclusion is correct, the appellant in this case was not responsible for the $5,221.12 registration fees collected by Que R. Miller from owners of motor vehicles residing in Texas but not living in Foard county.

The assignments of error attacking the action of the trial court in overruling appellant s demurrers to the county’s petition are untenable. Article 1989, R. C. ’S.; Harris County v. Charlton, 112 Tex. 19, 243 S. W. 460, 245 S. W. 644.

The contention of appellant that the court committed reversible error in failing to define “legal commissions” is overruled.

The assignment of error on which this proposition is based is, in part, as follows: “The amount of legal commissions was shown by uncontroverted evidence and was ascertainable by mathematical calculation.” The amount of commissions charged did not affect the judgment against the appellant.

The judgment of the trial court awarding plaintiff judgment against the corporate surety for registration fees for the sum of $7,707.-63 is reformed so as to allow the county to recover from this appellant as registration fees only $2,480.51; and, as so reformed, the judgment is affirmed.

MARTIN, J., not sitting.


source: Caselaw Access Project

author: LESLIE', Justice. FUNDERBURK, Justice

license: Public Domain

text:
    DAVIS v. JARNIGAN et al.
    No. 1072.
    Court of Civil Appeals of Texas. Eastland.
    March 29, 1933.
    Rehearing Denied April 7, 1933.

      J. D. Barker, of Cisco, for appellant.
    Stinson, 1-Iair, Brooks & Duke, of Abilene, for appellees.
   LESLIE', Justice.

G. S. Jarnigan and H. Feagan sued G. F. Davis, a road contractor, for moneys alleged to be owing to them by him for road work under subcontracts. They sued for $2,291.87 road work in Jones county, $912.19 road work in Wise and Parker counties, $500 attorney’s fees, and $2,500 damages alleged to have been sustained by them' in that Davis caused them to move their teams and road-working equipment from Jones to Parker and Wise counties before the right of way was procured, thus delaying their work and damaging them in said amount.

The defendant answered by general denial, plea of settlement, and in cross-action sought to recover against the plaintiffs on their promissory note in the sum of $2,191.87, alleged' to have been executed and delivered to him in settlement of their accounts.

By a verified supplemental petition the plaintiffs denied the allegations of the defendant’s answer and specially alleged that the note for $2,191.87 - was left with the defendant for a special purpose, and that it did not represent any unconditional obligation. In this respect they alleged that a dispute arose between them and the defendant concerning the alleged indebtedness by one to the other; that they were unable to agree on such matters; that the defendant had possession of their teams and road-construction equipment and refused to surrender them to plaintiffs; that they had entered into a contract to grade and excavate roads in Brown county, and had agreed to begin the work at a specified time, and were unable to gain possession of their teams and equipment; that, in order to release them, they executed the note in question and left it with the defendant under a separate and contemporaneous agreement and understanding that if the state engineer’s estimates (not then at hand) later disclosed that the defendant owed him (as they contended) that the defendant should pay same and return the note, and that, on the other hand, if such estimates disclosed that the plaintiffs owed the’defendant, they would pay the same, and be entitled to the return of the note. That is, the note passed into the hands of Davis for the special purpose to obtain the release of teams, etc., and to be held pending definite ascertainment of status of accounts between the parties.

Such, we think, is the reasonable construction of the plaintiffs’ pleading, which, in that respect, is as follows:

“Plaintiffs allege and say in answer to defendant’s answer set out in Paragraphs 8 and 9, wherein the defendant alleges that plaintiffs executed and delivered to said defendant one certain promissory note in the sum of $2191.87, is not due and owing by these plaintiffs to said defendant, all of which was well known to said defendant at the time said note was executed by these plaintiffs and that gaid note was executed and delivered to said defendant herein under the following circumstances:
“That these plaintiffs under said contract and agreement of putting up the road-in Wise and Parker Counties, Texas, to perform the work and complete the road in accordance with said contract and agreement and after these plaintiff's had finished and completed said work and road that the said defendant would permit them to complete, and after the state engineer had in all things approved and confirmed their work these said plaintiffs had obtained another contract for the putting up of another road in Brown County, Texas, which was well known to the defendant, and that they proceeded to have a settlement with said defendant on all their work done and performed in Jones, Parker and Wise Counties, Texas, and the said defendant contended at said time that those plaintiffs were duo and owing'the said defendant sums of money, which they did not owe, and that these plaintiffs at said time desired to move all of their teams and tools from Wise and Parker County, Texas, to Brown County, Texas, and the said defendant objected and refused to permit these plaintiffs to move their teams and tools from Wise and Parker Counties, Texas, from the job which they had completed for said defendant, and told these plaintiffs that unless they did execute to the defendant the note herein mentioned and set out that they could not move their teams and tools. That at said time these plaintiffs, acting herein by H. Feagin, steadfastly insisted with the defendant that he did not owe him anything and that when the final estimates came in from the building of Parker and Wise Counties, Texas, as well as the Jones County job, it would show that he, the defendant was due and owing these plaintiffs sums of money in excess of the amount claimed by the defendant that the said plaintiffs owed the said defendant. But notwithstanding the statements of said Feagin to the said defendant contended and persisted that unless the said plaintiff would execute said note set out and mentioned in the defendant’s said answer the said plaintiffs could not move their teams and tools and that he would keep the same until said note was executed by the said plaintiffs.
‘.‘The said plaintiffs herein informed the said Davis, defendant herein, that they had contracted to put up some road in Brown County, Texas, and that unless said teams and tools were released and they got on the job that they would lose large sums of money and would forfeit their contract and agreement with the parties in Brown County, Texas, and these plaintiffs say that said statements were true and. all of which were known to be true by the said defendant herein, but the said defendant continued to insist that he would not under any circumstances let the said plaintiffs move said teams and tools until said note was signed and the said defendant herein promised and agreed with the plaintiffs herein that if they would execute the note for $2191.87 set out and described in the defendant’s said answer herein, that when the final estimate was had for the work done on the Jones, IVise and Parker Counties jobs, if it was then determined that the said plaintiffs did not owe the said defendant anything that he would cancel the note and return it to these plaintiffs and would pay them any balance that was due and owing them under their said original contracts and that these plaintiffs, under said circumstances and agreements, made, executed and delivered said note for said sum of $2191.87, and after the execution and delivery of said note, the final estimates were had on the Jones County job as set out and alleged in plaintiffs’ petition, and it was determined that the said defendant herein was due and owing these plaintiffs a balance of $2291.95.
“That after the execution- and delivery of said note by the plaintiffs herein to the defendant final estimates were had on the Wise and Parker County jobs, as set out in plaintiffs’ petition, and that there was due the plaintiffs for said Wise and Parker County jobs the sum of $5119.37, as set out in plaintiffs’ petition and that the said plaintiffs then and often thereafter insisted with the said defendant to have a settlement of all of their work done and labor performed in keeping with their original contract and agreement but the said defendant failed and refused to do so and failed and refused to cancel and return the plaintiffs’ said note in the sum of $2191.87, and that in the execution and delivery of said note, as hereinbefore mentioned and set out in the sum of $2191.87, there was no consideration moving between the parties and that the consideration for which said note was executed has wholly failed and that there is a total failure and lack of consideration for the execution and delivery of said note in the sum of $2191.87; all of which the said defendant had due notice.”

Trial was before the court and' jury, and in response to the issues the jury found: (1) That at the date of the execution and delivery of the note for $2,191.87, a bona fide dispute existed between plaintiffs and defendant as to any balance due by plaintiffs to defendant ; (2) that at time of execution of the note plaintiffs and defendant did not agree that the former owed the latter $2,191.87; (3) that plaintiffs and defendant, at said date, did not have accounts stated between them of respective claims listed in pleadings; (4) that plaintiffs excavated and moved 55,240 cubic yards of dirt for defendant on the Jones county job; (5) that plaintiffs did for defendant 182½ hours of blading on said road; (6) plaintiffs were not overpaid by defendant for the Jones county work; (7) plaintiffs did not agree that bills paid by defendant to one Carlton -were proper charges against them; (8) that defendant Davis owed plaintiffs a balance of $1,311.14 on the Jones county job; (9) he owed them no balance on the Parker and Wise county work; (10) that plaintiffs were damaged' $440 by defendant’s failure to obtain right of way in Parker county before moving them to that place; (11) that plaintiffs sustained no loss in moving teams, etc., from one point to another in Parker county.

Based on this verdict the court entered a judgment in favor of plaintiffs against the defendant for the sum of $1,311.14, and otherwise, in accordance with the verdict, except as to the item of $440, as to which judgment was rendered in favor of the defendant..

Proposition 1 complains that the court erred in admitting testimony to the effect that the plaintiffs were damaged by the defendant’s moving them to Parker and Wise counties before the right of way was procured, thereby causing them unnecessary expense and delay. The second proposition is that the court erred in refusing to exclude the testimony, on motion of the defendant. All of this testimony related to the $440 item of damages, and since the judgment on that item is in favor of the defendant and is not complained 'of by the plaintiffs, these propositions are overruled. For the same reason proposition 3 becomes immaterial.

Propositions 4 and 5 are to the effect that the court committed “fundamental error” in permitting the plaintiffs to offer testimony to establish the alleged contemporaneous pa-rol agreement entered into at the time of the execution and delivery of the note. The contention is that the effect of such evidence was to ingraft upon a written instrument a contemporaneous parol agreement and that it did not establish “failure of consideration,” etc.

These propositions are overruled. The action was between the immediate parties to the note, and the evidence was admissible to show that the note, though absolute in form and delivered to the manual possession of the payee, was delivered for a special purpose and not intended to take effect as a binding obligation or as a complete and final settlement between the parties, but was for holding by Davis to abide the results of the engineer’s estimates and the accomplishment of the special purpose. The suit was in effect a final settlement and adjustment of all claims by the respective litigants growing out of the road work as a whole in Jones, Jack, and Parker counties. All phases of their mutual undertakings and obligations in that matter were explored, and' issues covering all contentions submitted to the jury, with the result that a finding was made that the defendant owed the plaintiffs an unpaid balance of $1,311.14 on the Jones county job. Other issues were resolved in favor of the plaintiffs, and some of them in favor of the defendant. Instead of finding that the note was given in settlement of an amount agreed' to by the plaintiffs as due the defendant, the verdict is that there was a dispute in that matter, and that the plaintiffs did not agree that they owed the defendant the amount specified in the note. The verdict as a whole means that at the date of the note plaintiffs owed the defendant nothing, but that he in fact owed them, which they at all times contended. In fact, the case in its fundamental features is the same as that disposed of in the case of Roddy et al. v. Citizens’ State Bank (Tex. Civ. App.) 11 S.W.(2d) G52, 653, wherein the trial court, upon objections, excluded testimony similar to that here admitted, and which action of the court was held to be error. The contention was there disposed of in this language:

“The excluded testimony tended to support defendants’ theory; that is, that the notes were signed for a special purpose, with the understanding that an accounting would be had later, and all errors, if any existed, corrected and the notes reduced to correspond. This evidence, in our opinion, should have gone to the jury for what it was worth.
“The Negotiable Instrument Act, art. 5932, § 16, in part, reads as follows: ‘ * * * As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or endorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. ⅜ ⅜ * ’
“In the case of Waters v. Byers Bros. & Co. (Tex. Civ. App.) 233 S. W. 572, 588, this provision was under construction and Judge Boyce, for a majority of the Amarillo court, expressed the view that the statute made no material change in the rule as it existed at common law.
“The common-law rule was concretely and clearly stated by Judge Key in Hawkins v. Johnson (Tex. Civ. App.) 181 S. W. 563, as follows: ‘ * * * The weight of authority seems to support the proposition that parol evidence is admissible for the purpose of showing that a promissory note, though absolute in form, and delivered to the manual possession of the payee, was not intended to take effect as a binding obligation until the happening of a stipulated contingency. (Citing authorities.)’
“The case of Allen v. Herrick Hdwe. Co., 55 Tex. Civ. App. 249, 118 S. W. 1157, is in point. Suit was by the payee against the maker on a note, who set up a contemporaneous verbal agreement to the effect that there was to be an accounting at a later date between the parties, and, if this disclosed that the note was in excess of the maker’s indebtedness, proper credit would be entered. The court said this plea set up a valid equitable defense and that evidence to support same did not vary or contradict the terms of the note, because it was not intended that the note should be a complete and final settlement. This is the doctrine, both at common law and under the Negotiable Instrument Act, of the following authorities: Meeks v. Holmes Commerce Co. (Tex. Civ. App.) 154 S. W. 365; Williams v. Walter A. Wood Mowing & Reaping Mach. Co. (Tex. Civ. App.) 154 S. W. 366; Street v. J. I. Case Threshing Mach. Co. (Tex. Civ. App.). 188 S. W. 725, 726, 727; Exum v. Mayfield (Tex. Civ. App.) 297 S. W. 607; Burke v. Dulaney, 153 U. S. 228, 14 S. Ct. 816, 38 L. Ed. 698; Union Investment Co. v. Epley, 164 Wis. 438, 160 N. W. 175; 22 C. J. 1148, § 1540. Also for a ;full annotation see 20 A. L. R. 421, 502.”

This opinion and the authorities therein cited rule the instant case, and in point with them we cite the recent case of Rector v. Evans, 6 S.W.(2d) 105, by the Commission of Appeals and expressly approved by the Supreme Court. See, also, Helmke v. Prasifka (Tex. Civ. App.) 17 S.W.(2d) 463 (writ refused) and Pope v. Hennessey (Tex. Civ. App.) 38 S.W.(2d) 834. It is not governed by Chalk v. Daggett (Tex. Com. App.) 257 S. W. 228, 230. That case is distinguishable on the facts from this one. The court rendering that opinion said of the ease: “In the present case, however, the answer alleges not only that the note involved in this point was delivered but that it was given, and was intended to he endorsed, to a bank in order to obtain money to pay off a judgment against the parties, and that thereafter, according to the contemporaneous agreement, it was only to be paid upon Condition, or, it may be, was not to be paid at all.”

By the sixth proposition the defendant asserts that: “It was fundamental error * ⅜ ⅞ f01. ⅛6 court to fail to submit to the jury the ultimate controlling issues so that when answered by them the court could base a judgment thereon, disposing of the appellant’s cross-action.” The contention is built on that portion of article 2190, R. S., as amended by Acts 1931, c. 78, § 1 (Vernon’s Ann. Oiv. St. art. 2190), which provides that, when a court submits a case on special issues, “he shall submit all the issues made by the pleading.” However, that article further provides that: “Failure to submit an issue shall not be deemed a ground for reversal of the judgment, unless its submission has been requested in writing by the party complaining of the judgment.” No such request appears to have been made in the trial court, and no point made on its omission. In this situation any ultimate issue presented by the cross-action was waived. Ormsby v. Ratcliffe, 117 Tex. 242, 1 S.W.(2d) 1084, Speer’s Law of Special Issues, p. 413, § 299. However, we are of opinion that the issues submitted, taken together and properly construed, amount to a fair submission of all material issues presented by the respective litigants. The proposition is overruled.

By the eighth proposition the appellant contends that the court erred in entering the judgment on the verdict for the reason that same was incomplete and did not dispose of the ultimate issues. From the viewpoint of the defendant the verdict sufficiently supports the judgment, and the proposition is overruled.

Other points become immaterial, and for the reasons assigned the judgment of the trial court is affirmed.

FUNDERBURK, Justice

(dissenting).

Plaintiffs’ suit was for balances claimed to be due upon two certain contracts for road work, one dated February 24, 1930, and the other June 2, 1930. The petition made no mention of any subsequent contract or agreement, or the execution of the $2,191.87 note. Defendant’s answer, among other things, alleged an overpayment on said contracts of $2,207.53 ; that-about December 4, 1930, when a settlement was attempted, there was a bona fide dispute regarding the state of the accounts growing out of said contracts, which was settled by the plaintiffs’ executing to de< fendant the note for $2,191.87. By way of cross-action defendant alleged a cause of action against plaintiffs on the said note and prayed for judgment thereon. By supplemental petition plaintiffs alleged, in reference to said note, among other things, an agreement as follows: “And the said defendant herein promised and agreed with the plaintiffs herein that if they (that is, plaintiffs) would execute the note for $2191.87 set out .and described in the defendant’s said answer herein, that when the final estimate was had for the work done on the Jones, Wise and Parker Counties jobs, if it was then determined that the said plaintiffs did not owe the said defendant anything that he would cancel and return it to these plaintiffs and would pay them any balance that was due and owing them under their said original contracts and that there plaintiffs, under said circumstances and agreements, made, executed and delivered, said note for said sum of $2191.87.” (Italics ours.) It was also alleged that the note was executed to gain permission of defendant for plaintiffs to move their teams and tools to Brown county. The agreement thus alleged would imply that if the final settlement showed that plaintiffs owed the defendant as much as the amount of the note, then said amount would be payable according to its provisions, and if something less than the amount of the note, credit thereon would be given accordingly. It was not alleged that the agreement was made without any intention on the part of defendant to perform it, nor was any other fact alleged to show that the agreement alone did not constitute a valid contract enforceable as such. If valid, such an agreement, of itself, was an all-sufficient consideration for the execution and delivery of the note. It was not alleged, in substance or effect, that said note was delivered for any special purpose, or subject to any condition precedent to its taking effect. All parties agree that when the note was executed and delivered there had been a bona fide dispute and the jury so found. The record shows indisputably, I think, that that dispute was settled by the plaintiffs’ executing and delivering the note in consideration of the permission of defendant to the removal of plaintiffs’ teams and tools, and in consideration of the promise and agreement of defendant “that when the final estimate was had for the work * ⅜ ⅜ if it was then determined that the said plaintiffs did not owe the said defendant anything, that he would cancel the note and return it to these plaintiffs, and would pay them any balance that was due and owing them under said original contracts.” This parol agreement could not be proved to show that the note never had any validity. It could only be proved as in itself a cause of action which gives full recognition to the validity of the note. The agreement, I think, if properly construed, was valid and enforceable as a cdntraet, for the reasons discussed in Johnson v. Elmen, 94 Tex. 168, 69 S. W. 253, 52 L. R. A. 162, 86 Am. St. Rep. 845. If so, after the making of such contract plaintiffs no longer had any cause of action upon the original contracts. “If a new contract is substituted by agreement, the original is at an end, and no recovery can be had on it, nor can any action be maintained to cancel or rescind it. Failure to perform a substituted contract does not revive the original one, and the cause of' action of the pax’ty not in default is upon the new contract and not upon the original.” 10 Tex. Jur. p. 375, § 211; Braddock v. Brockman (Tex. Civ. App.) 29 S.W.(2d) 811. Just recently we held this same principle applicable to the substitution of a right of rescission by a new agreement, and that the available cause of action in such case is upon the agreement. Minneapolis-Moline Power Implement Co. v. Gatski, 57 S.W.(2d) 593. Another applicable rule of law is stated thus: “An independent parol agreement which is shown to have been entered into as an inducement to the making of a written contract may be proved and enforced, although it is not referred to in writing.” 17 Tex. Jur. p. 826, § 311; Callaway v. Albin, 114 Tex. 5, 261 S. W. 372.

In my opinion plaintiffs sought recovery and the court gave them judgment upon a wrong theory. They had no rights based upon want or failure of consideration for the note. Their own pleadings alleged such a consideration. The only cause of action which plaintiffs really had, as shown by their allegations in the supplemental petition, was one, the validity of which was dependent upon the validity of the note. They were under the necessity of conceding the validity of the note in order to be entitled to prove the verbal contract, and thereby get credit for all or a part of such note by judgment upon their cause of action upon the oral agreement of which the note was the supporting consideration.

But plaintiffs did not sue upon that cause of action. The allegations in the supplemental petition were purely defensive, and in denial of the validity of the note. Even if the pleadings were sufficient, the cause was submitted to the jury on no such theory. As to the cause of action upon which plaintiffs relied for recovery being as it was inconsistent with the validity of the note, the evidence of the contemporaneous parol agreement was subject to the rule stated in 17 Tex. Jur. p. 847, § 3S3, upon the authority of Chalk v. Daggett (Tex. Com. App.) 257 S. W. 228, and Shaw v. Lumpkin (Tex. Civ. App.) 241 S. W. 220, as follows: “It is not permissible to show a contemporaneous oral agreement that a'note for a certain sum, payable at a fixed time, was not to be collectible until there had been an accounting between the parties, and that it was then to be payable wholly or partly in credits to be shown by the accounting.” If, on the other hand, plaintiffs had sued upon the agreement made contemporaneously with the execution of the note, thereby giving full recognition to the validity of the note, then such evidence would have been admissible because its effect could, not have been to contradict or vary the terms of the note. A failure to recognize this distinction accounts, in my opinion, for a number of decisions, and particularly Pope v. Hennessey (Tex. Civ. App.) 38 S.W.(2d) 834, and Roddy v. Citizens’ State Bank (Tex. Civ. App.) 11 S.W.(2d) 652; the last-named two cases being recognized in Tex. Jur. as being in conflict with Chalk v. Daggett, supra, and Shaw v. Lumpkin, supra. See 17 Tex. Jur., p. 847, § 383.

In my opinion, R. S. 1925, art. 5932, § 16, can have no application. AVhat special purpose was it, either pleaded or proved, for which the note was delivered? Was it the purpose of plaintiffs to deliver it as a trick or artifice to induce the defendant to yield his claim of right — apparently recognized by-plaintiffs — to prevent the removal of the teams and tools until a settlement was made? I think certainly the special purpose within the meaning of said statute must be some common purpose of the parties. AVhat purpose of interest or possible advantage to defendant, as well as to plaintiffs, did or could the notes serve if the agreement was as alleged by the plaintiffs? It afforded no security for any balance which might be found to be due defendant by the subsequent accounting. It furnished no equivalent advantage for his yielding the claim or right to prevent the removal of the teams and tools. I can conceive of no purpose of any concern to the defendant which the delivery of the note, under the circumstances, served, and •the only purpose from the standpoint of the plaintiffs was to induce the defendant to yield his claim of right to prevent the removal of the teams and tools with no compensating advantage whatever.

Plaintiffs had the right, by alleging and proving the cause of action which they, according to allegations in their supplemental petition, really had, to require defendant to comply with his agreement, and by showing that at the time the note was givon nothing was due him, to enforce credit of the whole amount of the note and thereby enforce his obligation to “cancel and return” same, not in the sense that it was a-void and meaningless thing, but to the contrary, in. the sense that by the thus enforced performance of the agreement the note was in effect paid and its consequent cancellation and return the same as a note is cancelled and returned when paid.

In this case the importance of the fact is overlooked or minimized, I think, that the note was admittedly delivered. “A parol condition affecting the payment of a delivered (italics ours) instrument is not enforceable if it operates to add to, take from or vary the terms of the writing. Oral evidence is inadmissible to vary an unconditional promise to pay money by showing a prior or contemporaneous parol agreement that the promis-sor shall not he required to pay, or that it was not absolutely payable, as for example, that it should be payable only upon the performance of a specified condition or the happening of a certain contingency * * *. Nor is it permissible to show an oral agreement reducing the amount stipulated to be paid, as for example, an agreement that a less sum is to be paid upon a certain contingency, or providing for a remission or rebate of a portion of the principal or interest, or a contemporaneous agreement that a joint and several maker- of a note was liable for only a part of it.” 17 Tex. Jur. p. 844, -§ 388.

If these well-settled principles of law can be set at naught simply by regarding each case as one in which the parol agreement) provides for a conditional delivery or delivery for a special purpose, and that regardless of the fact that no such condition or purpose be shown or even alleged, then it has certainly come to pass that a promissory note, except where the doctrine of innocent purchaser for value applies, is an utterly meaningless thing.

It may be that had the suit been upon the proper cause of action and the issues submitted and determined accordingly, the judgment would not have been much different from what it is; but, giving effect to the note instead of canceling it, and crediting plaintiffs with the amount the jury found they were entitled to, a very different judgment would be required. The issues to the jury become largely meaningless when applied to the proper cause of action, since they were found upon an entirely different theory.


author: CONNER, Chief Justice.

text:
    SHUMAKE v. HAWKINS.
    No. 12805.
    Court of Civil Appeals of Texas. Fort Worth.
    March 18, 1933.
    Rehearing Denied April 15, 1933.
    A. H. Carrigan, of Wichita Falls, for appellant.
    Taylor, Muse & Taylor, of Wichita Falls, for appellee.
   CONNER, Chief Justice.

This suit was instituted by the appellant and went to trial upon an amendecL original petition filed March 5, 1932, in which the plaintiff alleged that on or about July 20, 1930, he had orally leased to the defendant a farm in Clay county, Tex., for the crop year beginning August 1, 1930, and ending December 31, 1931; that the leased land consisted of about 600 acres; that the defendant was to cultivate the land and plant it in wheat and oats in the fall of 1930 and in cotton and corn in the spring of 1931 and to pay plaintiff rent therefor in the usual third and fourth of said crops; that plaintiff was required to only furnish defendant the land, and was to be at; no expense in planting and cultivating said crops for said period. It was further alleged that the defendant had complied with his contract in cultivating the lands, and had paid to the plaintiff the crop rent for the period named.

Plaintiff further alleged that on or about the 1st of August, 1930, he had furnished the defendant as his tenant money, animals, tools, and supplies to make a crop on said premises for the period of the lease, such furnishing being necessary to enable defendant to make and harvest his crops; that on or about, to wit, August 1, 1930, the plaintiff orally sold to defendant for the purposes stated ten mules for the aggregate price of $810, and certain personal property, consisting of farm machinery, etc., for the aggregate' price of $1,394.45, for all which the plaintiff prayed judgment with a foreclosure of his landlord’s lien on the crops raised by the defendant on the premises and on the ten mules and farm tools so sold.

There were other claims sued upon by appellant which are not material to the present appeal, having been adjusted by the judgment, and as to which no question is raised.

The defendant answered, admitting his indebtedness of $810 for the value of the mules, and also admitted that he was indebted for tools and machinery to the extent of $250, but among other things specially pleaded that in July, 1930, the plaintiff had by oral contract leased’ the premises described in plaintiff’s petition for the full period of 5 years, within which time plaintiff, at the time of the sale,- agreed that he (defendant) might pay for the mules and farm machinery for which plaintiff sought to recover. The_ defendant also pleaded in abatement, alleging “that the suit for the recovery of said property is not past due at this time, and will not be past due until August 1,1935, and that by reason of the same and all of the hereinbefore alleged facts that the plaintiff is estopped from the demanding the payment of the same at this time, and said suit for said sum should be abated in all things as prematurely instituted.”

In reply the plaintiff pleaded a general denial and the statute of frauds.

The case was submitted to a jury .upon special issues, in answer to which the jury found the value of the separate pieces of farm machinery and of the mules, and further that: “When W. D. Hawkins bought the mules and other personal property mentioned on or about August 1, 1930, was it agreed between him and O. J. Shumake that W. D. I-Iawkins should have five years within which to pay for same? Answer: Yes.”

Upon the answer quoted the court set aside the jury findings as to the value of the farm machinery and mules, and upon the verdict entered his judgment sustaining the plea in abatement on the ground “that the plaintiff’s cause of action will not be due until the' first day of August, 1935.” It was accordingly decreed that the cause of action for the mules, machinery, etc., be dismissed “without prejudice to plaintiff to hereafter recover the value of the same and it is here decreed that the recovery for said personal property will not be past due until August 1, 1935.” Erom the judgment and decree so rendered the plaintiff duly prosecuted this appeal.

The validity of the oral lease of the farm described in the plaintiff’s petition is not questioned on this appeal, and it is agreed by both parties to the appeal that the only question for our determination is whether the oral contract for the payment of the mules and farm machinery is in violation of the statute of frauds.

Article 3995, so far as pertinent, reads that “no action shall be brought in any court in any of the following cases, unless the promise or agreement upon which such action shall be brought, or some memorandum thereof, shall be in writing and signed by the party to be charged therewith or by some person by him thereunto lawfully authorized: * * * 5. Upon, any agreement which is not to be performed within the space of one year from the making thereof.”

The evidence shows that the defendant had been a renter of the farm involved in this litigation for 5 years preceding the date of •the alleged 5-year lease. As to this contract the plaintiff testified as shown in the following quotation that the rental contract was-from year to year, to wit:

“Q. What happened at the end of that year? A. Well he says what are you going to do with me, have I given you satisfaction. I says, yes, I says, well you can have it for another year.
“Q. How about the next year? A. Well so on each year.
“Q. State to the jury whether or not you ever rented to him for more than a year at a time. A. Never.
“Q. Now then, in the summer of 1930, when you rented your said farm to the defendant, state to the jury whether or not you rented it for more than a year. A. One year at a time.
“Q. Did you rent it for the crop year of 1930 for more than one year? A. I did not.”
J. O. Hawkins, son of the defendant, testified on the same subject as follows:
“Q. Just state the conditions under which the stock was to be paid. A. He agreed to let us have it more than one year. It was a five year pay contract. We didn’t figure we would have time to pay for all that on one years terms.
“Q. Was there any time set? A. Yes, sir.
“Q. What was it? A. Anywhere between a one and five year contract.”
The witness W. D. Hawkins, testifying in, his own behalf with regard to the contract, testified as follows:
“Q. In 1930, July or August, did you have any contract for the years of 1930 and 1931, beginning August, 1930 ? A. Yes, sir. I think it was about August 10th, I think it was maybe a little earlier than that He wanted to change up and get off the half crops, sell his teams and everything and quit furnishing anybody anything and he proposed to me to sell out these materials and let me rent it all on a third and fourth.
“Q. What about the machinery? A. Them farm tools? I had to buy farm tools and machinery and all to buy 6 mules. * * *
“Q. What was the agreement, that is what I want you to tell the jury the payment of it, how it was to be paid. A. Well he first wanted it all in one year and I told him that we couldn’t take it that way, that we just would not be able to furnish the machinery and rent the whole farm of about 700 acres. He told me that he would give me more time and I asked him how much more and I told him I could not take it unless I could get it in 5 years, buy that much stuff and the rest of the stuff I would have to have. He first said he would have to go and talk it over with his children. He went off and in about four or five days he came back and we closed it, he was to let me have it for 5 years, teams, tools and everything else.
“Q. What was said between you and Mr. Shumake with reference to which you were ■to pay it out of the crops or how you were to pay it? A. Pay it out of the crops each year.
“Q. After you made it? A. Yes, sir.
“Q. When he came back five days later and you closed and agreed on the purchase of this machinery, was it then or later you bought the 4 mules? A. I think it was the same day, maybe a day later, just 4 or 5 days difference in the sale.
“Q. With reference to the 4 mules were the terms to be the same? A. Yes, sir. I purchased them four mules, they was to go into Bailey Moline on a Earm-All Tractor.”

It is held that, in the absence of some positive law to the contrary, the right of contract is a necessary incident to the right to hold and own property, and the law recognizes the right of parties to contract with relation to property as they see' fit, provided they do not contravene public policy and that their contracts are not otherwise illegal. 10 Texas Jurisprudence, p. 16, § 5.

In the ease of Walker v. Johnson, 96 U. S. 424, 427, 24 L. Ed. S34, by the Supreme Court of the United States, it is said: “In order to bring a parol contract within the statute, it must appear affirmatively that the contract was not to be performed within the year. We have had occasion to examine this question very recently in the case of McPherson v. Cox (96 U. S. 404 [24 L. Ed. 746]). We said, in that case, that the statute ‘Applies only to contracts which, by their terms, are not to be performed within the year, and not to contracts which may not be performed within that time.’ The court said, in regard to that case, which was a contract by a lawyer to conduct a suit in court, that there was nothing to show that it could not have been fully performed within a year. So, in this case, the lock and dam were to be completed on or before Sept. 1, 1871. Clearly, the contractor had the right to push his work so as to finish it before November, 1870, which would have been within a year from the date of Walker’s contract with plaintiff.”

In Franklin Sugar Co. v. Taylor, 37 Kan. 435, 15 P. 586, it was held that a parol contract will not be adjudged void' by reason of the prohibition of the statute of frauds and perjuries, unless it affirmatively appears that, fairly and reasonably interpreted, it does not admit of a performance within the year.

The case of Adair v. Stallings, 165 S. W. 140, 141, by the Amarillo Court of Civil Appeals, was one in which the court was required to pass upon the validity of an oral contract to keep up and repair a partition fence between the parties. In disposing of the question the court said: “By exceptions to the statement of appellee to the evidence and to the charge of the court, appellant insists that the oral contract to repair and keep in repair the fence should show the time for performance to avoid the statute of frauds. The contract as pleaded and proved does not provide that it is nobto be performed within a year. It might have been performed upon some contingency within a year, and therefore will not be defeated by the statute of frauds. Thomas v. Hammond, 47 Tex. 42; Taylor v. Deseve, 81 Tex. 246, 16 S. W. 1608; Railway Co. v. Wood, 88 Tex. 191, 30 S. W. 859, 28 L. R. A. 526; Shropshire v. Adams, 40 Tex. Civ. App. 339, 89 S. W. 448.”

It is to be noted in the case now under consideration that the testimony in behalf of the defendant and approved by the verdict of the jury shows the contract for the payment of the mules and farm machinery was performable within, and not at the expiration of, the 5 years. In other words, the contract does not affirmatively show that it could not be performed within the space of one year, and therefore not void under the statute of frauds under the authorities we have quoted, which we think in accord with our own and other cases. To illustrate, the Arkansas Supreme Court in the case of Arkansas Midland Ry. Co. v. Whitley, 54 Ark. 199, 15 S. W. 465, 466, 11 U. R. A. 621, held that a parol agreement to keep and maintain cattle guards on each side of a person’s land so long as a railroad is operated over it need not be in writing under a statute requiring every agreement “not to be performed within one year” to be in writing.

In Wooldridge v. Stern, 42 F. 311, 9 L. R. A. 129, by the United States Circuit Court for the Western District of Missouri, it is held that an oral promise to provide for the support and. education of a minor 14 or 15 years old until lie becomes 21 years of age is not a contract “not to be performed witbin a year” witbin tbe meaning of tbe statute of fi-auds requiring suck contracts to be in writing, as it may be performed witbin a year if tbe child should die witbin that time.

Our own Supreme Court in the case of Weatherford, M. W. & N. W. Ry. Co. v. Wood, 88 Tex. 191, 30 S. W. 859, 860, 28 L. R. A. 526, held that a verbal agreement on the part of the railroad company to pay Wood a certain sum in cash and to issue to him a pass over the road for himself and family for a period of 10 years, the pass to be issued annually on the first of each year, and to stop its trains at bis bouse to let him and bis family get on or off whenever they desired to do so within-the 10 years, was not in violation of the statute of frauds, but was enforceable. Tbe court said: “It seems to be well settled that where there is a contingency expressed upon the face of the contract or implied from the circumstances, upon the happening of which witbin a year the contract or agreement will be performed, the contract is not within the statute, though it be clear that it cannot be performed witbin a year, except in the event the contingency happens. Thus an agreement to give an annual pass over a railroad during life is performable by the happening of the implied contingency of the death of the donee witbin the year, and is not witbin the statute” — citing other cases in harmony with the declaration made.

Tbe Maryland Court of Appeals in Lewis v. Tapman, 90 Md. 294, 45 A. 459, 460, 47 L. R. A. 385, in passing upon an oral contract by tbe defendant to marry plaintiff “witbin three years from a designated date,” bad this to say: “There was evidence in the cause that tbe contract to marry was to be performed witbin three years, and there was no evidence of a specific agreement that it should not be performed witbin a year. According to all tbe cases, if there was a possibility of its being performed within a year, and there was no stipulation that it should not be, then tbe contract would not be witbin tbe statute, even though it bad relation to a subject-matter to which tbe statute was applicable. Cole v. Singerly, 60 Md. 348; Ellicott v. Turner, 4 Md. 476.”

Our Court of Civil Appeals for tbe First district held that an oral partnership contract to be continued for 5 years was not witbin the statute of frauds, as tbe partnership might be dissolved at any time by death. Shropshire v. Adams, 40 Tex. Civ. App. 339, 89 S. W. 448. See, also, Johnston v. Bower-sock, 62 Kan. 148, 61 P. 740, by tbe Supreme Court of Kansas.

Tbe contract for tbe payment of plaintiff’s mules and farm machinery as established by the verdict of the jury can not, we think, be held, as a matter of law under tbe authorities cited, to be in violation of our statute of frauds. Defendant’s son. testified in substance that the-debt could have been paid witbin a year out of the first crop. There is no finding to the contrary, and we cannot say that upon a farm of tbe size rented and with tbe working force and machinery under control tbe defendant might not have raised a crop tbe ensuing year of sufficient value to have liquidated the debt, notwithstanding such result may have been dependent upon tbe contingency of whether tbe Giver of all good furnished tbe necessary showers of sunshine and rain. Nor are we able to say tbe contract was unreasonable in its general character. Defendant had long been a tenant of the plaintiff and, inferentially, in full possession of plaintiff’s confidence. Some of tbe evidence indicates that be was without tbe necessary stock and implements to carry on the farm work, and that tbe same was furnished by tbe plaintiff; that plaintiff desired to relieve himself of the burden of so doing, and hence not unreasonably willing to trust defendant to pay for the mules and farm machinery out of crops raised during the 5-year period. At all events, should such a contract be established by the court or verdict of the jury, we can but think that it should be upheld. The judgment of the court, therefore, in sustaining the plea in abatement and in dismissing the cause of action for the payment of the mules and farm machinery, on the verdict of the jury as returned, was erroneous, and the judgment, in reciting that plaintiff’s cause of action did not accrue until immediately after the expiration of the 5-year period, was particularly erroneous. We think a reasonable interpretation of the contract requires the defendant out of the proceeds of each year’s crop to pay upon the indebtedness declared upon such sum as defendant could reasonably pay after retaining a sufficient amount to enable him to reasonably continue a successful operation of the farm.

For the reasons stated, we conclude that the judgment of the trial court should be reversed and remanded for further consideration not inconsistent with this opinion; the judgment, however, in favor of appellant for a balance due upon a promissory note declared upon is left undisturbed, the cost of appeal to be taxed against appellee.


author: ALEXANDER, Justice.

text:
    STANDARD SANITARY MFG. CO. v. SOUTHERN SURETY CO. OF NEW YORK.
    No. 1326.
    Court of Civil Appeals of Texas. Waco.
    March 9, 1933.
    Rehearing Denied April 20, 1933.
    Arnold & Cozby, of San Antonio, for appellant.
    Douglas & Black, of San Antonio, and John T. Suggs, of Dallas, for appellee.
    P. H. Swearingen and Hirshberg, Mueller/ Powell & Green, all of San Antonio, amici curiae.
    John T. Suggs, of Dallas, and P. H. Swear-ingen and Hirshberg, Mueller, Powell & Green, all of San Antonio, amici curiae.
   ALEXANDER, Justice.

In 1930, the San Antonio Independent School District, acting through its board of education, entered into a written contract with the Seidel Plumbing & Heating Company as contractor whereby said contractor agreed to furnish all labor and material and to install certain plumbing in a public school building for an agreed price. The contractor as principal and Southern Surety Company of New York as surety, in compliance with the provisions of Revised Statutes, article 5160, as amended in 1929 (chapter 226, § 1 [Vernon’s Ann. Civ. St. art. 5160]), executed and delivered a bond to said board of education in the sum of $1,950 guaranteeing the payment of the claims of all workmen and furnishers of material on the job. The Standard Sanitary Manufacturing Company sold and delivered to the contractor certain materials which were used on said job. Before completion of the work, the contractor abandoned the job and was adjudged a bankrupt and the board of education was compelled to complete the improvements. After completing the improvements, there remained on hand in the possession of the board of education the sum of $342.22 over and above the amount necessarily expended by the board in completing the work. Within twelve months after the contractor abandoned the job, the Standard Sanitary Manufacturing Company brought this suit against the school district and its board of education and the Southern, Surety Company of New York to recover the amount of its unpaid account. It gave notice to the board of education and did all other things necessary to a recovery except that it did not file with the county clerk of Bexar county within ninety days from the date of the delivery of the material an itemized and verified statement of the material so furnished by it to the contractor. The trial court allowed a recovery in favor of the plaintiff against the school district for the said sum of $342.22 which had been retained by the board and tendered into court, but denied a recovery for the balance of the plaintiff’s •account. The plaintiff appealed.

The sole question to be determined is whether the appellant was required, as a prerequisite to a recovery on the bond, to file an itemized, verified statement of its claim with the county clerk within ninety days from the date when it furnished the material to the contractor.

Revised Statutes, article 5160, as amend ed in 1929 (Vernon’s Ann. Civ. St. art. 5160), provides that the contractor, upon entering into any contract for the construction of any public improvements, shall “execute the usual Penal Bond, with the additional obligation that such contractor shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract.” It provides that any person who has furnished materials in the construction of such public improvements shall have the right to intervene in any suit brought to recover on such bond and to have his rights adjudicated therein. Said act further provides: “Provided further, that all claims for labor and material furnished to said contractor, and all claims for labor and material furnished to any contractor shall be itemized and sworn to as required by Statutes as to mechanic’s lien claims, and such claims shall be filed with the County Clerk of the County, in which said work is being prosecuted, within ninety days from the date of the delivery of said material and the performance of said work.”

Under the last quoted provision of the above act we think it a necessary prerequisite to a recovery on a bond given in compliance with the terms of said act, by one who has furnished materials used in the construction of such public improvements, that an itemized sworn statement of such account be filed with the county clerk within ninety days from the date of the delivery of such materials. While the act does not, as did the Act of 1927 (Acts 1927, 40th Leg., 1st C. S., p. 114, ch. 39, § 1), provide that any claims not so filed shall not be secured toy such bond, yet we think it necessarily results that one who does not comply with the terms of the act which creates the right, shall not receive the benefits thereof. O’Connor v. Metropolitan Casualty Co. (Tex. Civ. App.) 56 S.W.(2d) 686; Fidelity & Deposit Co. v. Prassel Sash & Door Co. (Tex. Civ. App.) 24 S.W.(2d) 539 (writ refused); Detroit Fidelity & Surety Co. v. Pippins & Clarkson (Tex. Civ. App.) 47 S.W.(2d) 886, par. 1; American Surety Co. v. Axtell Co., 120 Tex. 166, 36 S.W.(2d) 715; American Surety Co. v. Alamo Iron Works (Tex. Com. App.) 36 S.W.(2d) 714; Detroit Fidelity & Surety Co. v. Moberly (Tex. Civ. App.) 52 S.W.(2d) 298, par. 9; Ætna Casualty & Surety Co. v. Woodward (Tex. Com. App.) 41 S.W.(2d) 674; Union Indemnity Co. v. Rockwell (Tex. Com. App.) 57 S.W.(2d) 90.

The appellant contends that the bond given in this case went further than was required by the statute and created a contractual obligation on the part of the contractor and his surety to pay all claims for material furnished and that by reason thereof appellant is entitled to recover on said bond as a common-law bond independent of, and without complying with the terms of, the statute. The bond contained the following óondition: “ * * * Conditioned, and this obligation is such that should the said Seidel Plumbing & Heating Co. Inc., fully and faithfully per-. form the said contract upon their (its) part, in accordance with its terms * * * and pay and satisfy all just and lawful claims or damages arising from or out of the same, to or for the benefit of the said San Antonio Board of Education (including the payment of all sums due all subcontractors, workmen, laborers, mechanics and furnishers of material by the said contractors, and for all whose benefit, as well as that of the San Antonio Board of Education, this bond is made and given; and the same shall be and are hereby made privies and parties hereto, with the right to sue and recover hereon as their interest may appear) * * * and shall pay all sums due or owing to all persons and corporations who have contracted with the said contractors, or who have furnished labor or materials to the said contractors * * * and the further condition and obligation of this bond is that the said Seidel Plumbing & Heating Co. Inc., contractors, shall promptly make all payments due or owing to all persons and corporations supplying or furnishing them * * * with material or labor in the prosecution and performance of the work provided in said contract. * * * It is agreed that this bond shall be construed to be a contractual bond for the benefit of all parties mentioned.”

We do not believe that the bond creates any greater obligation than that required by the statute. The provision of the bond that the contractor “shall promptly make all payments due or owing to any persons and corporations supplying or furnishing them with material or labor in the prosecution and performance of the work provided for in said contract,” is practically the same condition as that required toy the statute. The further provision, in substance, that the bond was for the benefit of subcontractors, laborers, and furnishers of material and that such parties should have a right to sue and recover thereon, added nothing to the bond other than that required by the statute. The. statute requires the execution of such bond for the protection of the parties above named and Revised Statutes, article 5161 expressly authorizes such parties to maintain an action on such bond. It would not be reasonable to hold that a contractor and his surety, by reason of their having executed a bond in response to the demand of the statute, and in compliance with the terms thereof, for the purpose of protecting rights created by the statute, should, by virtue thereof, be held responsible for obligations not authorized by such statute. Practically the same contention here made was urged in the case of Fidelity & Deposit Co. v. Prassel Sash & Door Co. (Tex. Civ. App.) 24 S.W.(2d) 539. The Court of Civil Appeals in that case overruled the contention here made by appellant and a writ of error was refused by the Supreme Court.

Furthermore, it was held in the case of Indemnity Ins. Co. v. South Texas Dumber Co. (Tex. Com. App.) 29 S.W.(2d) 1009, that even though the bond created a common-law obligation independently of the statute, yet since the bond was given in reference to the demand of the statute, it must be construed in connection therewith and that the remedies afforded by the statute were exclusive. It was further held that any right of action which accrued to a materialman under a bond so taken by a municipality for public improvements was regulated by the statute creating such right. In that case it was held that since such statute'provided that an action could not be brought on a bond given in compliance with the terms thereof after one year from the completion of the job, that an action could not be maintained thereon after the expiration of said period of limitation even though the bond be construed as a common law obligation. For a like reason it results that since the act which requires the giving of guch bond creates the right of the materialman, he, in order to recover thereon, must comply with the provisions of the act with reference to filing notice with the county clerk, even though the bond be construed as a common-law obligation. American Surety Co. v. Axtell Co., 120 Tex. 166, 36 S.W.(2d) 715.

The judgment of the trial court is affirmed.


author: LESLIE, Justice.

text:
    BURFORD OIL CO. v. JEFFERIES.
    No. 1081.
    Court of Civil Appeals of Texas. Eastland.
    March 10, 1933.
    Rehearing Denied April 21, 1933.
    Phillips, Trammell, Chizum, Price & Estes, of Fort Worth, for appellant.
    Scarborough, Ely & King, of Abilene, for appellee.
   LESLIE, Justice.

D. H. Jefferies sued the Burford Oil Company, a corporation, and J. P. Bohannon in the district court of Taylor county. The Bur-ford Oil Company filed its plea of privilege to be sued in Dallas county. Jefferies controverted the plea and seeks to maintain the venue in Taylor county. The plea of privilege was overruled and the Burford Oil Company appeals.

The appellant’s first contention is that thei appellee having sued a nonresident for breach of a contract, the burden was on him, after appellant’s plea of privilege was filed, to prove the execution of the contract by the appellant, or its authorized agent, and that he failed to do so.

The controverting affidavit proceeds upon the theory that the oil company appointed J. P. Bohannon its agent in Taylor county, Tex., and contracted with him to sell its gasolina in Taylor and adjoining counties; that said agent, acting under and hy virtue of his contract with the defendant, contracted and agreed to sell to appellee the necessary gasoline for his needs in said territory; that Jefferies agreed to buy from Bohannon such gasoline, which was to be delivered by Bohan-non to Jefferies at the tanks and warehouse of said Bohannon in Taylor county; that the defendant Burford Oil Company accepted and approved and ratified the agreement between its agent Bohannon and said Jefferies; that as a result of said contract between Jef-feries and Bohannon, which was ratified and approved by the Burford Oil Company, the plaintiff Jefferies undertook to furnish gasoline to his customers in said territory and bought from said Bohannon a part of the said gasoline on the contract; and that without any excuse or reason the defendant breached and terminated and undertook to cancel said contract between Bohannon and the plaintiff. That such breach occurred in Taylor county, and the cause of action arose therein.

From the foregoing it is obvious that Jefferies’ suit is on the contract entered into between Bohannon, the alleged agent of appellant and himself, and it seeks to hold the oil company liable on the contract because Bohannon was acting as the agent of the appellant, and for the further reason that said contract was directly ratified and confirmed by the Burford Oil Company.

We have carefully considered the contract entered into between J. P. Bohannon and the Burford Oil Company, of date February 4, 1929. Among other things it provided: “That in consideration of the advantages and benefits to the buyer (Bohannon) it having a fixed and reliable source of supply of gasoline and other advantages, and the advantages and benefits to seller (Burford Oil Company) in having a fixed and known outlet for its products, and in further consideration of the mutual agreements herein contained, buyer, during the term of five years from date hereof, agrees to buy from seller, and seller agrees to sell to buyer, on the terms and conditions hereinafter stated.” The contract throughout is an undertaking by which the company was to sell to Bohannon gasoline, for which he was to pay a fixed price, and there is nothing in the contract or in the testimony generally which made Bohannon the agent of the oil company. It was a sales contract and nothing more. It did not create an agency and was in law identical in effect with such contracts as have been construed in the following cases: American Brewing Ass’n v. Woods (Tex. Com. App.) 215 S. W. 448; Texas Farm Bureau Cotton Ass’n v. Stovall, 113 Tex. 273, 253 S. W. 1191; Fuqua v. Pabst Brewing Co., 90 Tex. 298, 38 S. W. 29, 750, 35 L. R. A. 241; Texas & Pacific Coal Co. v. Lawson, 89 Tex. 394, 32 S. W. 871, 34 S. W. 919.

Further, and of controlling importance, the letter from the -Burford Oil Company, alleged to be a ratification or confirmation of the Bohannon-Jefferies contract, in no way makes the oil company a party to that contract. It reads as -follows:

“Referring to our contract with Mr. J. P. Bohanno-n, Abilene, Texas, dated February 4th, 1929, this will serve to confirm our conversation of this date and interpret the original contract to the effect that we will protect Mr. D. H. Jefferies of Abilene, Texas, under the terms of the contract with Mr. Bohannon.
“In the event Mr. Bohannon is unable to make deliveries to D. H.. Jefferies, then we will protect D. H. Jefferies under the terms of the original contract with Mr. J. P. Bohan-non.
“Copy of contract by and between Burford Oil Company and J. P. Bohannon is attached hereto.”

The company by that letter does not assume the obligations of the contract between Bo-hanhon and Jefferies so as to become liable along with Bohannon for its fulfillment. Whatever character of contract or obligation was created by that letter, it was separate and distinct from the Bohannon-Jefferies contract, declared upon by the plaintiff, and an examination of the controverting affidavit, as well as the plaintiff’s petition, discloses that the plaintiff’s suit is not based upon the contract essentially evidenced by the letter. That letter evidences an independent undertaking on the part of the oil company to supply Jefferies with the gasoline he was entitled to under his contract with Bohannon in the event of the failure of Bohannon to comply with the terms of said contract. Further, the contract between Bohannon and Jefferies does not purport to bind the oil company. The parties to that contract recognized Bohannon’s inability to so bind the company, for Jefferies, before entering into his contract with Bohannon, made a trip to Pecos and there obtained from the oil company an assurance that, if he was unable to obtain from Bohannon the supply of gasoline contemplated by the Bohannon-Jefferies contract, the oil company would, as an independent undertaking, supply the same. Such is the understanding evidenced by the foregoing letter.

Therefore, the appellee having failed to show that the appellant was a party to the Bohannon-Jefferies contract, or ever assumed its obligation, the first proposition must be sustained.

The venue cannot be maintained in Taylor county on the ground that the corporation defendant had an agent in that county. As above held, Bohannon was not the appellant’s agent, and if it be conceded that Bohannon was at any time the agent of the company for any purpose in that county, the uneontradicted facts disclose that he was not their agent for any purpose at the time the suit was filed. He had been discharged prior to that date. Article 1995, subd. 23, R. S. The record discloses that at the time the plaintiff Jefferies brought the suit (February 10, 1932), the Burford Oil Company had terminated its contract with Bohannon, who, for such breach, sued the company in August, 1930, and settled with it on the basis of his original contract with the company.

Venue cannot be maintained in Taylor county upon the ground that the Burford Oil Company was a private corporation, and the cause of action or a part thereof arose in that county. As shown, the Burford Oil Company was not originally and never became a pai’ty to the Bohannon-Jefferies contract upon which the suit is based, and the controverting affidavit and the petition each disclose that the plaintiff did not attempt to sue on the independent contract, if any, created by the letter. The second proposition is sustained.

Neither can the venue be maintained in Taylor county under, exception 4 (R. S. art. 1995, subd. 4), which provides if two or more defendants reside in different counties, suits may be brought in any county where one of the defendants resides. The suit is based on an alleged breach of a contract, and was brought jointly against the Burford Oil Company and Bohannon, and on the theory that it was a joint cause of action against both defendants, or one in which both could properly be joined to avoid a multiplicity of suits. Bohannon resides in Taylor county but no bona fide cause of action is shown against him, since he complied with his contract during its existence. In the contract of April 13, 1929, between himself and Jefferies, among other things, it was provided: “The said Bohannon has a contract with Burford Oil Company, dated the 4th day of February, 1929, a copy of which is attached to this contract for the purpose of reference, the said contract being a contract of purchase from Burford Oil Company of gasoline. The said Bohannon, under the terms of said contract, will sell in Abilene and vicinity and neighboring counties gasoline to retailers and jobbers. The said Bohannon agrees, during the life of said contract, (italics ours) to sell to the said Jefferies for his use and distribution the necessary gasoline for his needs in the above territory, and the said Jefferies agrees to buy from the said Bohannon gasoline necessary for his needs in said territory during the life of this contract.”

The uncontroverted evidence is that Bohan-non performed said contract with Jefferies during the life of. his contract with the oil company, and he limited his duties and obligations to Jefferies to such contingency. After supplying the gasoline to Jefferies for five or six months, Bohannon’s contract was terminated by the breach of the oil company, and Bohannon having supplied Jefferies with said product “during the life of said contract,” it nowhere appears in this record that he at any time breached his contract with Jefferies, and as above shown no bona fide cause of action is made out against said defendants or either of them, which would authorize the maintenance of the suit in Taylor county under exception 4. Richardson v. D. S. Cage Co., 113 Tex. 152, 252 S. W. 747; Padgett v. Late Cisco Amusement Co. (Tex. Civ. App.) 54 S.W.(2d) 201.

We sustain assignment 3.

For the reasons assigned the judgment of the trial court is reversed, and it is the order of this court that the venue of the cause be changed from Taylor county to the proper district court of Dallas county, Tex.