author: JONES, O. J.

text:
    WYLL v. KENT.
    No. 11083.
    Court of Civil Appeals of Texas. Dallas.
    Nov. 26, 1932.
    Rehearing Granted Jan. 7, 1933, and Judgment Reformed and Affirmed.

      Wm. E. Bane and E. M. Reichman, both of Dallas, for appellant.
    Alvin H. lane, of Dallas, for appellee.
   JONES, O. J.

In a suit by appellee, Willis Kent, against appellant, I. Wyll, in a district court of Dallas county, appellee recovered judgment in the sum of $5,242.20, with interest at the rate of 6 per cent, per annum, and also title to, and possession of, two prints of the motion picture film entitled “The Pace That Kills.” An appeal has been duly perfected to this court, and the facts are as follows:

On May 4, 1929, appellee entered into a written contract with H. T. Peebles and Lee Riley, under the terms of which appellee leased to said parties, “The sole and exclusive right to exhibit and distribute to exhibitors for exhibition for theatrical purposes,” for a period of three years, in the states of Texas, Oklahoma, and Arkansas, prints of the moving picture film known as “The Pace That Kills.” The written contract is very lengthy and we will only state those provisions that are necessary to decide the issues of this appeal. The consideration for the use of the prints of such picture was that 'there would be paid to appellee “the total sum of fifty per cent of the gross revenue derived from the picture, after deducting the cost of the positive prints purchased. By gross revenue is meant the actual amount of money paid by the theatre for the use of the picture, whether payed on percentage or flat rate.” The lessees were required, under the contract, to make monthly reports to appellee, and to make remittances of 50 per cent, of the gross receipts on the first day of each calendar month, for the preceding month.

Certain stipulations in section 6 of the contract, in effect, are: (1) That the lessee would not copy or duplicate any prints in its possession, or permit them to be copied or duplicated; (2) that lessees would not exhibit or permit such prints to be exhibited in any territory other than that allotted it under the contract; (3) that the lessee would not part with the possession of any of said prints, or any part thereof, except in accordance with the conditions of the agreement; (4) that if ■any prints, or any part thereof, leased to the lessee, are stolen or destroyed, it would notify lessor immediately and use all reasonable endeavor to recover the same; (5) that lessee would furnish lessor, within twenty-four hours of request therefor, with full information of the locations at any stated times of any prints of the pictures secured from the lessor; (6) that at the expiration of the lease period, lessee would return all prints, or furnish affidavit that they had been destroyed.

In paragraph 12 is contained the stipulation that: “It is further understood and agreed between the parties hereto that, by reason of the breach of paragraph 6 of this agreement, it would be impossible to ascertain the exact amount of damages that would 'accrue to the lessor by reason of any such breach, and the sum of Five Thousand ($5,-000) Dollars is hereby stipulated and agreed between the parties as liquidated damages therefor.” As above epitomized, paragraph 6 contains six conditions, the violation of any one of which would mature, in favor of ap-pellee, a liquidated demand in the sum of $5,-000. The written contract apparently was in force from May 4, 1929, approximately through the month of October, 1929.

Appellant was not a party to the written contract, but it is alleged by appellee that he purchased from lessees, a one-third interest in such contract and thereby became an equal partner with the lessees during the time the' contract was in force. The contract of ap-pellee with the original lessees, while dated May 4, 1929, had been agreed upon on or before April 11,1929. Appellant’s contract with Peebles and Riley is shown by the following instrument:

“April 11th 1929
“Mr. I. Wyll, Dallas, Texas
“Dear Sir:
“Confirming our conversation of this date, we have a contract for the distribution of two motion pictures, The Pace That Kills and Linda, for the states of Texas, Oklahoma and Arkansas, said contract being with Willis Kent for the pictures to he distributed on a fifty-fifty basis for the producer.
“For the sum of eight hundred dollars we will give you a third interest in our contract with Willis Kent for the distribution of these two pictures, in other words, you are to re-ceiye one-third of the net profit derived from the distribution of these pictures.
“It is understood that no one shall receive any salary from this arrangement, with the exception of Lee Kiley, who is to draw a salary of fifty dollars per week from date and this salary arrangement shall remain in effect for a period of six months and at that time a new arrangement, mutual to all partners shall be effected.
“It is also understood that all checks covering salary, office expense, rent, traveling expenses and 'all other expense connected with the distribution of the two pictures shall be signed by Lee Riley and shall in every instance be countersigned by H. T. Peebles.
“Yours very truly,
“[Signed] Lee Riley
“[Signed] H. T. Peebles
“Accepted:
“[Signed] I. Wyll
“Issy Wyll.”

It will be noted that, when the contract was put in writing, on May 4, 1929, the picture “Linda,” mentioned in the letter, was omitted from such contract. Appellee alleged that appellant, by this contract, entered into between himself and Peebles and Riley, adopted the terms of the original lease contract and thereby became bound by such terms. It is alleged by appellee that, after the execution of the contract between appellant and Pee-bles and Riley, the firm name of “Special Pictures Company” was adopted, and the three partners did business under such name. In July, 1929, Riley sold his interest to. Pee-bles and appellant. In the latter part of September, 1929, Peebles died, and appellant became the sole representative of the Special Pictures Company. When appellee was informed of the death of Peebles, he came to Dallas and demanded possession of the prints, which appellant refused to give. Peebles’ estate is alleged to be insolvent, for which reason his personal representative is not made a party to this suit. Riley loft Dallas after the sale of his interest, and his residence is unknown, for which reason he is not made a party to this suit.' Appellee never received any remittances from the Special Pictures Company, or any member of such firm, although the prints furnished were shown under lease contracts from said company in various moving picture houses. Only one report was sent to appellee, and that embraced the first month of business, and showed no gross receipts. Appellee alleges this report to be erroneous in respect to the receipts.

Appellant, in his answer, urged a general demurrer and special exception to the petition, on the theory that no liability on the contract rested on him, and denied under oath that he was at any ‘time a member of the firm known as the Special Pictures Company, or was a partner with Peebles and Riley. He further pleaded, in effect, that he was a friend of Peebles of long standing, and that to help him he loaned the firm the sum of $800; that no note was taken for such loan, but that he was to receive one-third of the profits as consideration for this loan; that he never at any time concerned himself about the management of the affairs of the Special Pictures Company, and never had read, and did not know, the terms of the contract entered into between appellee and Peebles and Riley.

By appropriate allegation in the petition, appellee seeks to recover the amount due him under the lease contract, alleged to have been paid to the Special Pictures Company, for use of prints of “The Pace That Kills” by moving picture companies, and also to recover $5,000 as liquidated damages for breach of a condition in paragraph 6 of the written contract, in that, without the consent or knowledge of appellee, the Special Pictures Company sold one print of the said picture for the sum of $125.

The case was tried to a jury, submitted on special issues, and the findings of the jury on those issues material to this appeal are: (1) Appellant purchased an interest in the business of the Special Pictures Company from Lee Riley and H. T. Peebles on or about the 11th day of April, 1929; (2) the Special Pictures Company parted with the right of possession of the prints in question, or of a part thereof; (3) the exhibitors paid to the Special Pictures Company, for the rentals for showing the film picture, the sum of $860.20.

On this finding and the undisputed evidence, the trial court entered a judgment in favor of appellee against appellant for the sum ot $5,242.20; $5,000 of the amount of the judgment clearly represents what the court construed to be liquidated damages, for the breach of that condition of paragraph 6 of the contract which forbade the sale of any of the prints that had been furnished the Special Pictures Company by appellee. We are unable to determine precisely the manner in which the court arrived at the sum of $242.20, the remaining amount of the judgment, except that it could only represent appellee’s portion of the gross receipts of the business received by the Special Pictures Company.

Appellant makes three major contentions on this appeal, viz.: (1) That as appellant did not execute the contract forming the basis of this suit, but only contracted with Peebles and Riley for a one-third interest in the profits, as a consideration for the $800 placed by him in the business, he never adopted appel-lee’s contract, and hence a suit cannot be successfully maintained against him because of its breach; (2) that as the.terms of the contract forbade, the purchase of an interest therein by any one, without the written consent of appellee, and as the interest appellant secured by his contract with Peebles and Riley was had without the consent or subsequent ratification of appellee, then he could not hold appellant as a party to the’ contract ;■ and (3) that the clause in the contract which stipulates $5,000 damages for a breach of certain provisions of the contract, is not, in fact, liquidated damages, but is merely a penalty, and the court erred in construing such provision as liquidated damages. ■ These contentions of appellant will be discussed in the order above named.

Is appellant liable to appellee, under the terms of the contract executed by Peebles and Riley? While the contract between appellant and Peebles and Riley bears date of April 11,1929, the undisputed evidence is that it was not executed until May 13, 19'29, nine days after the date of the contract by appel-lee with Peebles and Riley. At this time, the contract between appellee and Peebles and Riley was entirely executory, no business having been transacted by the Special Pictures Company when appellant purchased his interest therein. The contract that appellant executed, by which he became interested in the business of the Special Pictures Company, recites that he bought an interest in the contract under which the company was doing business, and that he was to receive one-third ' of the net profits derived from such business. The purport of this recital is to make him a partner in the business. The effect of appellant’s testimony is that he never .became a partner in the business, but only was to receive an interest in the net profits of the business to ¡be conducted entirely by Peebles and Riley, in order to receive payment of the $S00 advanced to them. This evidence, together with the recital in appellant’s contract, and other facts as to the conduct of the business, made an issue of fact as to whether appellant was actually a participating partner in the business, and responsible to appellant or any • third party in the conduct of the business. This issue of fact was submitted in the form of a special issue to the jury, and resolved ¿gainst appellant. As such finding of the jury is sustained by evidence, we adopt same, and hold that appellant was a partner in the business of the Special Pictures Company from its inception. Being a partner in the business, which was operated entirely under the terms of the contract between appellee and Peebles and Riley, appellant became responsible equally with Peebles and Riley for the carrying out of the terms of such contract. Cothran v. Marmaduke, 60 Tex. 370; 47 C. J. 839; 20 R. C. L. 985; Page on Cont. vol. 3, § 1700, p. 2932; Hoffman v. Stewart, 184 Ill. App. 66, 68; Bowman & Steadman v. Farmers’ State Bank, 168 Minn. 221, 209 N. W. 863; Moore v. Thorpe, 133 Minn. 244, 158 N. W. 235; Kefauver v. Price et al., 136 Ark. 342, 206 S. W. 664. The assignment of error in this respect is overruled.

Could appellee maintain the suit against appellant under its contract with Peebles and Riley when he never assented' to appellant’s purchase of an interest in such contract? Section 10 of the contract declares that the lessees (Peebles and Riley) “will not assign, transfer, mortgage, hypothecate or set over, directly or indirectly, or by operation of law, or in any way part with the rights and lease claimed herein, without the consent of the lessor (appellee) in writing.” Such clause in a contract is generally held to have been inserted for the sole benefit of the lessor, and hence he is the only one who can lawfully complain of its violation. One, who is a party with the lessee to the violation of such a contract provision, cannot accept an assignment of an interest in a contract, reap the benefits therefrom, and then rely upon such provision to defeat his liability thereunder. Such is the precise position of appellant in this assignment of error, and it is overruled.

Is the sum of $5,000, stipulated to be paid for a breach of any one of six conditions of the contract, liquidated damages, as declared by the contract, or merely a penalty? Such provision in a contract presents for decision one of the most perplexing questions encountered in the construction of written agreements. As stated by 17 C. J. 934, “It seems to be generally conceded, indeed, that each case must be permitted to stand pretty much on its own peculiarities and particular facts, and that no general rule applicable to all contracts are deducible.” This authority, however, does lay down what appears to be a general rule to aid in the construction of such a provisiqn in contracts, when in its text it declares that, “Where the parties have agreed on the amount of damages, ascertained by fair calculation and adjustment, and have expressed this agreement in clear and explicit terms, the amount so fixed will be treated as true damages and not as a penalty.” This? announcement of the rule is sustained by adjudicated cases from many states cited in note under the text. 17 C. J. 934. We will adopt the rule above announced, as a working basis, for the purpose of determining whether such provision in the contract shall be treated as liquidated damages or merely as a penalty.

The provision of the contract under consideration declares that, “It is further understood and agreed between the parties hereto that, by reason of a breach of paragraph 6 of this agreement, it would be impossible to ascertain the exact amount of damages that would accrue to the lessor by reason of such breach,” and then declares that the sum nam§d is “hereby stipulated and agreed between the parties as liquidated damages therefor.” The six conditions of the contract, to each of which this stipulation applies, are given in the statement above. The only reason given in the clause of the contract under consideration for naming the sum of $5,000 as liquidated damages is that, “It would be impossible to ascertain the exact amount of damages that would accrue to the lessor by reason of such breach.” Such difficulty necessarily exists in the breach of conditions in a great many contracts of this character. The recitation in this clause of the contract precludes the idea that such sum was named after attempting to mate “a fair calculation and adjustment” of the damages that might flow from a breach of any of the named conditions. It is manifest on the face of the six conditions that the damages resulting to appellee from a breach of a condition would vary greatly in amount, according to the condition breached. Yet, the stipulation takes no cognizance of this fact, but fix-' es the same amount as damages for the breach of a condition that could result only in trivial damages, as is fixed for a breach of a condition that could result in much heavier damages. This clearly demonstrates, to our minds, that the sum of $3,000 was named without inquiry, and purely as an arbitrary adjustment of the damages. Under such condition, 17 C. J. 951 declares that: “Where the agreement contains several distinct and independent covenants upon which there may be several breaches, and one sum is stated to be paid upon breach of performance, that sum will be considered a penalty and not liquidated damages. If the parties would stipulate the damages in such case, they should express the sum to be paid upon each distinct breach.” The rule of law above announced has been applied in our state. Palestine Ice, Fuel & Gin Co. v. Walter Connally & Co. (Tex. Civ. App.) 148 S. W. 1109 (writ of error denied) ; Bowden v. Southern Bock Island Plow Co. (Tex. Civ. App.) 206 S. W. 124; 13 Tex. Jur. p. 122, § 45.

We believe the trial court correctly construed the paragraph of the contract under review, as presenting a question for determination by the court and not for the jury. We are, however, further of the opinion that the learned trial judge erred in construing the clause in question of the contract as providing for liquidated damages, rather than as a penalty, and that he should have submitted the issue of damages for the breach in question for the determination of the jury. This error will require a reversal of this case, and it is so ordered.

Beversed and remanded.

On Motion for Behearing.

As shown by the original opinion, this cause was reversed and remanded, because, in the opinion of the court, the trial court erroneously construed the contract herein, naming $5,000 as agreed damages for the breach of any one of five conditions of the contract, forming the basis of this suit, to be an agreement for liquidated damages in said amount, and not a contract for indemnity. The case was reversed and remanded for the benefit of appellee so that in another trial he could prove the damages suffered by reason of the alleged breach.

Appellee, in his motion for rehearing, waives the right to recover damages for such breach, and prays the court to modify the former judgment by rendering judgment in favor of appellee in the sum of $242.20, as appellee’s share of the gross receipts from a lease of the motion picture film, and to render judgment against him on his claim for $5,000 liquidated damages.

Construing appellee’s motion for rehearing to be, in effect, a remittitur of the $5,000 allowed by the trial court as liquidated damages, and as appellant, though denying that he could be 'held legally liable on the contract, never questioned 'the correctness of this amount as representing appellee’s portion of the amount due on the rent of the film to exhibitors of the picture, the court therefore grants said motion and directs that judgment, reversing and remanding the cause heretofore entered, be set aside, and that judgment of the trial court be reformed so as to deny appellee recovery of the sum of $5,-000 as liquidated damages, and affirm the judgment as to the item of $242.20, with interest at the rate of 6 per cent, per annum from the date of the judgment in the district court.

Judgment of the trial court is reformed as above indicated and, as reformed, affirmed; costs of this appeal to be taxed against ap-pellee.

Affirmed.


source: Caselaw Access Project

author: PELPHREY, C. J.

license: Public Domain

text:
    PRATLEY v. SHERWIN-WILLIAMS CO. OF TEXAS.
    No. 2769.
    Court of Civil Appeals of Texas. El Paso.
    Jan. 19, 1933.
    See, also (Tex. Civ. App) 21 S.W.(2d) 321; (Tex. Com. App.) 36 S.W.(2d) 195.
    Edward G. Wallace, D. A. Erank,'Pat Howe, and Allen & Allen, all of Dallas, for appellant.
    Hawkins Golden, Sam A. Leake, W. T. Henry, and Harold H. Young, all of Dallas, for appellee.
   PELPHREY, C. J.

In the afternoon of November 20, 1925, a truck belonging to appellee, and being driven by Bentley Barnett, collided with a car belonging to J. T. Jones near the intersection of Williams and Henry streets in the city of Dallas. Immediately after the collision, ap-pellee’s driver began making inquiries of the bystanders as to what they thought of the collision; that the driver inquired of á man by the name of James as to what he thought of the situation, and James advised appel-lee’s driver to let the insurance company settle the matter. The driver then asked appellant for his opinion, and upon appellant telling him he thought the same as Mr. James, the driver -became angry, stepped to the truck, took from it a pair of brass or iron knucks or some other hard instrument, and assaulted appellant, greatly injuring him.

Appellant filed this suit to recover $26,000 damages from appellee.

The trial court sustained a general demurrer to appellant’s petition and, upon his refusal to amend, dismissed his suit.

In view of the action of the trial court, we shall here quote the material portions of the petition:

“6. That while your plaintiff was standing in the street near the scene of the said collision and without anything being said or done by plaintiff, the defendant’s said driver began to make inquiries of the bystanders as tp what the bystanders thought about the said collision, as it was part of his duty as driver of said truck when a collision took place to obtain the names of witnesses and make a report thereof to his employer, the defendant herein; that as a part of his said duty the said driver was making such inquiries and attempting to make some arrangements to have said truck moved and determine the respective liabilities of the defendant and the other car which was in the collision.
“7. That in order to obtain 'evidence and the names of the witnesses favorable to the defendant, the said driver and agent of the defendant made inquiries of several persons in the vicinity as to what each saw and what his opinion was as to the liability of the respective drivers, and what should be done in regard to said collision; that it was among the duties and within the general scope and apparent scope of the employment of said driver of defendant to look after defendant’s said truck and obtain the names of witnesses and statements, if possible, from the same favorable to the defendant.”
“9. Immediately upon receiving said answer from the said James, the defendant’s said driver asked the plaintiff what he thought about it, meaning thereby to find out whether or not plaintiff would make a favorable witness for the defendant. This was the first word that had passed between plaintiff and defendant’s said truck driver; that plaintiff merely remarked to defendant’s said truck driver that he was of the same opinion as expressed by Mr. James, intending to convey to the defendant’s said driver that in the opinion of the plaintiff the defendant’s said driver was entirely to blame for the collision ; that immediately thereafter, the defendant’s said driver seemed to become infuriated and stepped back behind his truck and took from his pocket or from said truck a pair of brass or iron knucks or some other hard instrument, the exact nature of which is unknown to plaintiff, and, without any warning whatsoever stepped up to plaintiff and proceeded to assault and strike plaintiff in the face and head, causing the injuries hereinafter set out; that the said assault was made upon the plaintiff without any provocation whatsoever other than as before stated and was made upon the plaintiff because of the fact that his answer to the driver’s request for information as to what he thought about said'; collision was unfavorable to the defendant and was not such testimony as defendant’s said driver was seeking, and said blow or blows was struck by defendant’s said driver while in due course of his employment and in pursuit of his duty to obtain information and obtain the names of witnesses favorable to the defendant.” .

After detailing the injuries inflicted by appellee’s driver, his petition reads:

“ * * * That as a result of said injuries, he lost time from his work and had his earning capacity decreased, and same will be decreased for all time to come; that he was earning One Hundred and Twenty-five ($125.00) Dollars per month at the time of said accident, and would have been promoted and earned a larger amount if it had not been for the injuries sustained; that he suffered great pain and mental anguish and has had his body'weakened and his efficiency decreased, and that the said injuries are permanent ; that as a result of said injuries and the said damages before set out, he has been damaged in the sum of Twenty-five Thousand ($25,000.00) Dollars, for which the defendant is -liable.”
“12. That defendant was negligent in addition to the matters hereinbefore set out in that it employed and kept in its employ said driver who was a man of ungovernable temper, a fighter, a dangerous character, a hot headed man, a person of unconscionable principles in reference to the welfare of his fellowman, a reckless man when excited, and a quarrelsome man, and that the disposition of the said driver was known to the defendant, or by the use of ordinary care could- and should have been known to the defendant long prior to the date of the assault upon plaintiff, and was further negligent in that the said agent and servant of the defendant, in the due course of his business, and while acting within the apparent scope of his authority to collect and obtain evidence in its behalf favorable to itself in regard to said collision before referred to, assaulted and injured plaintiff as before stated.”

Appellant first contends that the trial court erred in sustaining the demurrer because of its allegations in paragraph No. 12, in which he charged appellee with negligence in employing and keeping in its employ the truck driver after his nature was known or should' have been known to it.

Appellee counters with the contention that said paragraph alleges no cause of action because there is no allegation therein that the-negligence of appellee in employing and retaining the truck driver in its employ was a proximate cause of appellant’s injuries.

In a suit to recover on account of negligence, the petition must show that the defendant’s alleged negligence was the sole cause of the injury, or that it contributed' thereto. 45 O. J. § 666, pp. 1093, 1094.

However, where facts are alleged which show a eausál connection between the-alleged negligence and the injury, the petition need not expressly allege that the negligence was the proximate cause of the injury. 45 O. J. § 668, p. 1095; Uvalde v. Stovall (Tex. Civ. App.) 279 S. W. 889; Canyon Power Co. v. Gober (Tex. Civ. App.) 192 S. W. 802.

The allegations here do not fall within the exception, and the trial court’s action, in so far as the paragraph mentioned is concerned, presents no error.

The question as to whether under the facts as pleaded appellee would be liable to appellant is more difficult.

It was originally the rule that the master was not liable for damages resulting from the willful, wanton, or malicious acts óf his-servant unless done by his express direction or with his assent, although the act was committed within the line of the servant’s duties. But now in almost all jurisdictions it is well settled that the master is liable for the willful or malicious acts of the servant done in the course of his employment and: within its scope, although the acts were not expressly ratified by the master or authorized by him. 39 C. J. § 1487, pp. 1292, 1293; 18-R. C. L. § 256, pp. 799, 800; Texas & N. O. Railway v. Parsons (Tex. Civ. App.) 109 S. W. 240, affirmed 102 Tex. 157, 113 S. W. 914, 132 Am. St. Rep. 857.

The following rule as to the liability of the master for damages arising from an assault and battery committed by the servant is laid down in 89 O. J. § 1506, on page 1806: “Applying the doctrine of respondeat superi- or especially in its application to cases of willful, wanton and malicious injury, a master is liable to a third person on whom an assault and battery is wrongfully made by his servants while acting within the scope of their employment, that is, whenever the nature of the employment authorizes the servant to use force, and he improperly exercises such authority against a person who is not in fault, or uses more force than the circumstances of the case require.”

18 R. O. L. § 268, p. 807, has the following to say relative to liability in such cases: “The liability of an employer for an assault and battery committed by an employee is to be' determined with a view to the character of the business conducted. If the assault can be said to have been within the scope of the employment, the employer will be held liable; but if the employee’s act was foreign to the service in which he was engaged the employer will not be held accountable.”

Our Supreme Court, in the case of International & G. N. Railway v. Anderson, 82 Tex. 516, 17 S. W. 1039, 1040, in discussing a charge of the court where the railway company was sought to be held for damages resulting from a brakeman putting appellee off a freight train, said: “To hold the master liable for the act of his servant, it is not necessary that the servant should have authority to do the particular act. The act of the servant may be contrary of his express orders, and yet the master may be liable. But the act must be done within the scope of the general authority of the servant. It must be done in furtherance of the master’s business, and for the accomplishment of the object for which the servant is employed. For the mode in which the servant performs the duty he is engaged to perform, if wrongful, and to the injury of another, the master is liable, although he may have expressly forbidden the particular act. But whether the act in question can be implied from the general authority conferred upon the servant must, in general, depend upon the nature of the service he is engaged to perform, and the circumstances of the particular case.”

In St. Louis S. W. Railway v. Mayfield, 35 Tex. Civ. App. 82, 79 S. W. 865, 867, the court said: “A master can only be liable for the willful and deliberate wrongs committed by the servant when they are done on his account, or for his purpose. To hold the master liable, the act must be done within the scope of the general authority of the servant. It must be in furtherance of the master’s business, and for the accomplishment of the object for which the servant was employed.”

See, also, I. & G. N. Railway v. Cooper, 88 Tex. 607, 32 S. W. 517.

In G., H. & S. A. Railway v. Currie, 100 Tex. 136, 96 S. W. 1073, 1074, 10 L. R. A. (N. S.) 367, the court held that an engine dispatcher, having charge of the engines and machinery in a round house, and handling a hose conveying a blast of compressed air, provided to work certain machinery, but which, as an experiment, he .was using to extinguish fire in an engine, who turned the air blast, in sport, upon the person of an engine wiper, inflicting injuries, was not engaged in the employer’s service. The court said: “Let it be conceded that in holding the hose in readiness to put out any fire that might again flare up, Nicholls was performing a duty as servant, and that had he, while thus holding it, or in attempting to use it for the purpose for which it was held, negligently turned it against one of the other employees, his negligence would have been imputable to his employer as incidental to the effort to do that which was in the line of the servant’s duty. It may be further conceded that if, in directing the hose at a fire to put it out, he had also struck with it one of the other servants, either to make him get out of the way, or for some other purpose, the motive thus partly influencing his act towards such other would not deprive it of its legal character, as done in the master’s business. It is in cases of the character supposed, where there has been a mingling of personal motive or puipose of the servant with the doing of his work for his employer, that much of the difficulty and conflict of opinion have arisen in determining whether or not the wrong committed should be ascribed to the master or be regarded as the personal tort of the servant alone. It is now settled, in this state at least, that the presence of such a motive, or purpose in the servant’s mind does not affect the master’s liability, where that which the servant does is in the line of his duty, and in the prosecution of the master’s work. But, when he goes entirely aside from his work, and engages in the doing of an act not in furtherance of the master’s business, but to accomplisb some purpose of his own, there is no principle which charges.the master with responsibility for such actions.”

Bearing in mind that the question of whether an act done is within the scope of the servant’s employment is usually one. of fact 'and therefore to be, ordinarily, determined by the jury, yet we have concluded that the petition stated no cause of action.

In other words, the facts alleged, conceding them to be true, would not warrant a recovery against appellee. It is clear, we think, that the assault here complained of was not committed in line of the truck driver’s duty or in the prosecution of the master’s work, but, rather, that he in committing the assault went entirely aside from the furtherance of' appellee’s business.

Appellant cites us numerous cases where storekeepers, innkeepers, saloonkeepers, express companies, and railway companies have been held liable for assaults upon customers by employees. An examination of those cases will reveal that the liability was based upon a breach of duty owed the customer and passenger; therefore, they can have no application here.

To hold with appellant here would be to say that every employer would be liable for damages to any person who might be assaulted by his employee where the meeting was occasioned by the employee’s duties.

The judgment of the 'trial court is affirmed.


author: McClendon, c. j.

text:
    BRENAN v. EUBANK.
    No. 7801.
    Court of Civil Appeals of Texas. Austin.
    Jan. 4, 1933.
    Robert L. Russell, Sr., of Brownwood, and Barry Miller and George Sergeant, both of Dallas, for appellant.
    Woodruff & Holloway, of Brownwood, for appellee.
   McClendon, c. j.

On February 14, 1929, Brenan and Eubank contracted in writing for the exchange of 44 shares of stock in the Brownwood State Bank, held by Eubank, for a building in Brownwood, owned by Brenan, on the following terms; “Price, to be paid fop the gtock $5,280.00. Price of building to be $4,000.00. The building to be delivered to J. B. Eubank free of incumbrance, and to pay to J. B. Eubank Twelve Hundred Eighty ($1280.00) cash upon consummation of sale: The said J. B. Eubank agrees to deliver to John Bren-an the bank stock free of all incumbrance.” On the following day the transaction was consummated in the following manner: Eubank indorsed to Brenan a certificate for 40 shares of stock, which was surrendered to the bank and a new certificate issued to Brenan, which he indorsed to Eubank, and attached as collateral security to a note, dated February 15, 1929, in favor of Eubank for $2,225, due six months after date, with 8 per cent, interest. The items included in this note were: The $1,280 difference in the agreed price of the exchanged properties; $725 principal, and $20 earned interest on a vendor’s lien note outstanding against the building, which Eubank assumed; and $200 real estate agent’s commission to Posey (5 per cent, on' $4,000). Brenan paid Eubank interest on the note for the first two six-month periods. The bank was taken over by the state banking commissioner in June, 1930; and shortly thereafter Brenan brought this suit against Eubank, Posey, the agent, Walker, president of the bank, and the banking commissioner; to cancel the contract and note, and recover back his building, and in the alternative for $10,000 damages. Brenan dismissed as to Posey, Walker, and the banking commissioner, and the court entered judgment in favor of Eubank upon a directed verdict.

Brenan has appealed upon three assignments of error,, urging the following propositions:

(1) The trial judge was disqualified because he was a stockholder and director in the bank.

(2) The trial judge abused his discretion in allowing, after evidence had been offered by both sides, a trial amendment to Eubank’s answer, to the effect that the trade only contemplated 40 shares of stock and that the figure “44” was inserted in the contract by mutual mistake.

(3) The evidence upon the merits of the case presented fact issues, and a directed verdict was-therefore not warranted.

We overrule the first proposition on two grounds:

(1) The record does not show that the trial judge was a stockholder or director, or had any interest in the bank. The bill of exception upon this issue does not disclose the ground upon which disqualification was urged. The only record evidence of such disqualification is its unverified assertion in Brenan’s motion for new trial, manifestly insufficient. City of Austin v. Nalle, 85 Tex. 520, 550, 22 S. W. 668, 960.

(2) The pleadings do not assert any liability against the bank, and, when the commissioner was voluntarily dismissed from the suit, whatever disqualification may have theretofore existed was removed.

The trial court has a wide discretion in allowing amendments to pleadings at any time even after verdict. This discretion is not subject to review except when the record shows an abuse, to constitute which soma prejudice must be shown by the complaining party. This is elementary. It was not shown or claimed that the amendment operated as a surprise to Brenan. On the contrary, the pleading upon which Eubank went to trial alleged that the agreement sued upon “did not provide for the sale of forty-four (44) shares of stock, but intended and provided for the sale by this defendant to plaintiff of forty (40) shares.” The evidence showed that when the bank was organized the stock subscribers paid in $110 per share, $10 of which went to surplus, and that this fact caused the confusion in the number stated in the contract. Moreover Brenan himself testified:

“Q. On the 15th (Feb., 1929) certificate No. 88 (40 shares) was issued to you? A. Yes, sir, and there was another one of four shares. Four shares of stock had been paid to Mr. Eubank as a dividend and he included that four shares of stock.
“Q. That was issued to you? A. Yes, sir.
“Q. And then you endorsed it over to Mr. Eubank as collateral? A. Yes, sir.”

The record conclusively shows t'hat the contract was not carried out according to its terms. Brenan was to pay $1,280 in cash. This he did not have. The building was to be free of incumbrance. It was incumbered with a vendor’s lien for $725 plus earned interest. To meet this situation Eubank took Brenan’s note with the bank stock as collateral. At that time, February 15, 1929, Bren-an knew exactly what stock Eubank had and executed the necessary indorsements to transfer it to Eubank as collateral for his note. There is no dispute in the evidence upon this point. The trial amendment merely con-" formed the pleadings to the uncontroverted facts. Clearly there was no.abuse of judicial discretion in allowing1 it. The cited case of Johnson v. Sunshine Oil Corp’n, 111 Tex. 578, 243 S. W. 455, is manifestly not in point. The other cases cited are those in which the trial court refused to allow the amendment, and it was held not an abuse of discretion. In such case the burden is upon the party offering the amendment to show that he had a legal right to amend at the time and under the existing circumstances'. Here the amendment was allowed, and the burden was on the other party to show, prejudice, which not only was not done, but prejudice was negatived by the record.

Upon appellant’s third proposition we adopt, for the purposes of this appeal, the following statement from appellant’s brief as to the ground upon which he sought recovery, although we doubt whether his pleadings will support the statement: “This suit was one for rescission and cancellation of a contract alleged to have been procured by fraudulent representations of the defendants as to the value of the Bank stock given.in exchange for the land.”

The only evidence of representation as to value was that the stock was worth the contract price, $5,280, and that Walker for the bank agreed to loan as much as 70 per cent, of its face value with the stock as collateral, which he later declined to do on the ground that state banks were prohibited by law from lending money upon the security of their own stock.

The burden of proof was upon appellant to establish prima facie every element essential to his cause of action based upon fraud. These elements were: “A material false statement, made knowingly or recklessly as regards its falsity, for the purpose of being acted upon and actually being acted upon by the defrauded party to his detriment.” Gulf, C. & S. F. Ry. Co. v. Houston (Tex. Civ. App.) 45 S.W.(2d) 771, at page 776(9).

In at least one of these essential elements, the falsity of the representation as to the value of the stock, the evidence wholly fails. The only evidence of value of the stock on February 14, 1929, was to the effect that on that date its book value was the contract price of approximately 135 per. cent, (actually 132 per cent.) of the par value, and that there had previously been a 10 per cent, dividend.

Appellant asserts: “It was a question of fact for the jury as to whether a Bank, insolvent in June 1930, could have been solvent with stock worth 100 cents to 135 cents on the dollar in February 1929.” This we think is a non sequitur.

Even in normal times there is no presumption that a bank which is closed by the department for some undisclosed reason was insolvent sixteen months prior to the time of closing.

Independently of this we think we may take judicial notice of general economic conditions; that the stock market crash which heralded the present “depression” occurred in October, 1929; that in its wake numerous banks and financial institutions all over the country, which had theretofore been not only abundantly solvent, but in a flourishing financial condition, failed; that this was especially true of the smaller banks (that in question was capitalized for $50,000).

The record is entirely silent as to the bank’s assets and liabilities at the time it was closed in June, 1930. Equally silent is the record as to why the bank was closed, whether from some irregularity committed by the directors, or that its then liquid assets were insufficient to meet the requirements of the banking laws. 1

We think a mere statement of appellant’s position in the light of current history carries its own refutation, and that further comment would be superfluous.

We stated above that we doubted whether appellant’s pleadings sufficiently raised the issue of fraud urged in the above statement from the brief, which is appellant’s interpretation of his own pleadings and the only ground of error urged upon the merits of the case. These pleadings are quite voluminous, and are embellished with a plethora of verbiage. If we were called upon to analyze them, we would say at most they present two grounds of relief: (1) That Eubank did not deliver to Brenan any bank stock; and (2) that Brenan failed to get the bank loan of 70 per cent, par value of the stock as represented to him.

The first of these grounds is negatived by Brenan’s own admissions. True he did not retain the stock in his possession or custody. In fact he may never have had the manual possession of it. But he accepted it as tendered to him, indorsed and hypothecated it to Eubank. All of this was voluntary on his part. In this there was no misrepresentation of fact, no fraud, no breach of contract even.

The second ground will be discussed below.

If we turn to the evidence, we find the gravamen of his complaint, as deduced from his own testimony, to be, in substance, as follows: His only reason for selling the building was to raise funds for an investment he was contemplating. Posey told him that the bank would lend 70 per cent, of the par value of the stock. Together they went to see Walker, who confirmed this statement. This was on February 14, 1929, the day the contract was executed. The next morning he went to the bank, and the entire transaction was consummated as above detailed. At that time Walker confirmed his previous assurance regarding, the bank loan. That afternoon he called at the bank to negotiate the loan, and Walker declined for the reason above stated, showing him a copy of the inhibitory statute. 1-Ie then demanded of Walker the return of his deed and note, and was told that all papers were in Eubank’s hands.

Then was the "time for him to bring his suit for rescission of the contract, instead of waiting sixteen months, and until after the bank had closed its doors. In the interim Eubank had paid Posey $200 commission on behalf of Brenan; had discharged the vendor’s lien on the building; had had the building in his possession collecting the rentals; had lost whatever opportunity he might .otherwise have had to dispose of his bank stock to advantage. Upon this aspect of his case Brenan knew every fact on the afternoon of February 15, 1929, that he knew in June, 1930.

Rescission is an alternative equitable remedy, and must be exercised with reasonable promptness. R. R. Com. v. Rau (Tex. Civ. App.) 45 S.W.(2d) 413, at page 417(11).

If we should treat the suit as one for damages for fraud or breach of contract, the evidence furnishes no basis for recovery.

Viewing the case from every standpoint, and indulging every presumption which a most liberal interpretation of the record will warrant favorably to appellant, we are unable to find any basis of recovery which the record will support.

The trial court’s judgment is affirmed.

•Affirmed.


author: SMITH, J.

text:
    BROWN & ROOT, Inc., et al. v. DURLAND.
    No. 8924.
    Court of Civil Appeals of Texas. San Antonio.
    Nov. 30, 1932.
    Sneed & Martins, of Austin, Wilcox & Graves, of Georgetown, and Coke R. Stevenson, of Junction, for appellants.
    Morriss & Morriss, of San Antonio, and C. H. Gilmer, of Rock Springs, for appellee.
   SMITH, J.

This action was brought in the district court of Edwards county by D. D. Durland against Brown & Root, Inc., and the American General Insurance Company, corporations domiciled in Travis and Harris counties, respectively. The suit was to recover upon a bond executed by said corporations as principal and surety, respectively.

It was alleged by appellee as plaintiff below that he furnished certain materials to Brown & Root, Inc., for its use as a contractor in constructing a public highway in Edwards county, which, after notice to the state highway commission, entitled appellee to a lien upon any “monies, bonds or warrants” due or to become due contractors such as ap-pellee, as provided in article 5472a, Vernon’s Ann. Civ. St.

Appellee asserted such claim, alleged notice thereof upon the highway commission, and further alleged that Brown & Root, Inc., as principal, and said insurance company, as surety, executed a “surety bond,” and thereupon collected from the commission all monies due the contractor upon said contract, as authorized by act of 1929, 41st Deg., 2d C. S., ch. 78, § 1, p. 154 (Vernon’s Ann. Civ. St. art. 5472b — 1, § 1). This action was brought upon said bond under authority of section 2 of said act (Vernon’s Ann. Civ. St. art. 5472b — 1, § 2) which provides: “Sec. 2. At any time within six months from the date of filing of said surety bond, the party making or holding such claim or claims may sue upon such bond, but no action shall be brought on such bond , after the expiration of such period. One action upon said bond shall not exhaust the remedy thereon, but each obligee or assignee of an obligee named therein may maintain a separate suit thereon in any court and in any jurisdiction. * * * ” (Italics ours.)

Both defendants urged pleas of privilege, which were overruled, and both have appealed.

It is conceded by all parties, and is obvious from the record, that the pleas of privilege should have been sustained, unless appellee is entitled to maintain the action in Edwards county by virtue solely of the italicized provision in section 2 of the act in question, that the actions therein provided for may be maintained separately by each claimant thereunder “in aivy court and in any jurisdiction.”

We are of the opinion that it was not intended by the Legislature that the provision in question should operate to fix venue in conflict with the provisions of the general venue statute. Article 1995, R. S. 1925. The act did not purport in its title or elsewhere to he a venue statute, or to repeal existing statutory venue provisions.

The provision that such actions may be maintained “in any court and in any, jurisdiction” is too broad and all-encompassing— is too general in its scope — to be given effect in direct contravention of express provisions of the Constitution and statutes relating to jurisdiction and venue.

If interpreted in accordance with appellee’s contentions, the provision can have no less effect than that such actions may be maintained in any court in any community in this state, if not in all the world, regardless of the amount in controversy or the status or residence of the parties.

Eor example, if the construction relied on by appellee be followed to its logical conclusion, a person residing in Cameron county having a claim of $65,000 against another resident of Cameron county may maintain an action thereon in the justice of the peace court in precinct No. 8, or any other court, of Dal-lam county; or a person residing in Orange county, having a claim for $1.98 against a neighbor in the same county, may maintain an action thereon in either a justice of the peace court, or any other court, in El Paso county; or, if there be 254 claimants against one such bond, which is easily conceivable, each could maintain a separate suit upon his claim in a different county, in any justice, county, probate, or district court in such county, regardless of the amount of his claim, and even though all those creditors and their common debtor reside in one and the same county.

It is inconceivable that the Legislature intended to perpetrate such a travesty upon the administration of justice; nor can such absurd construction be given effect in order to deprive the citizen of his valuable right, vouchsafed not only vby the letter of the general law, but by public policy as well, to defend in his own domicile against suits brought against him.

Appellee concedes that the term “any court” means, of course, any court having jurisdiction of the amount of the claim to be asserted, but contends that the term “any jurisdiction” may not be so qualified, but must be given a literal and restricted interpretation meaning any precinct or county that may suit the pleasure, malice, cupidity, judgment, or caprice of the claimant. But we can see no reason why the first phrase, “any court,” is entitled to any more liberal construction than the second phrase, “any jurisdiction.”

In our opinion the whole clause expresses, in the thoughtless language of current state legislation, an intention of the Legislature to provide that all beneficiaries of the surety bond provided for in the act shall be entitled to sue separately thereon in “any court” (of competent jurisdiction) in “any jurisdiction” (available to him under the general venue statute).

The nature of the cause of action here asserted is such as to be maintainable in the county of the domicile of either of the defendants, Travis or Harris counties. Commonwealth Bank & Trust Co. v. Heid Bros. (Tex. Com. App.) 52 S.W.(2d) 74.

The judgment is therefore reversed, and judgment will be here rendered that the venue of this cause be changed to the district court of the Bitty-Third judicial district of Travis county, Tex., and the clerk of the district court of Edwards county is directed to make up a transcript of all the orders made in said cause, certifying thereto officially under the seal of the court, and send it with the original papers in the' cause to the clerk of the said district court of the Fifty-Third judicial district of Travis county.

Reversed and rendered.


author: MARTIN, J.

text:
    LINDSEY et al. v. HARGETT.
    No. 3942.
    Court of Civil Appeals of Texas. Amarillo.
    Jan. 18, 1933.

      R. A. Wilson, of Amarillo, for appellants.
    R. A. Stone and Stone & Guleke, all of Amarillo, for appellee.
   MARTIN, J.

Bindings of fact, the correctness of which, neither party challenges, are incorporated in ■the transcript. The material portions of these are: That appellant and Almarene Lindsey were married in 1905 and that this relation continued until 1916, when Almarene Lindsey, died, leaving of the wedlock five children, .all minors, the eldest then being eleven and the youngest one year old; that a quarter section of land near Amarillo was then owned as community property, which had, during the .year 1913, been platted and subdivided into blocks and lots with properly dedicated streets; that in February, 1917, upon proper application and after due approval of a bond, an order was entered by the county court of Potter county authorizing Roy Lindsey, appellant, to “control, manage and dispose of the community property of himself and the said Almarene Lindsey, deceased”; that the appraisement then on file of the community property included the quarter section of land above, described; that thereafter two notes were executed, payable to appellee, the first for $5,000, dated April 6,1927, and the second for $2,000, dated October 10, 1927; that said notes were secured by deeds of trust upon portions of said property; that the $5,000 note and both of the deeds of trust were executed by appellant “individually and as survivor of the community estate of himself and Almarene Lindsey, deceased”; that all the money borrowed at this time from appel-lee was used by appellant in building houses on said land known as the Lindsey addition.

Appellee brought suit on said notes and for foreclosure against appellant “both in his individual capacity and as survivor of the community estate of himself and wife Almarene Lindsey, deceased.” He alleged that the $5,-000 note and the two deeds of trust were executed by appellant in the capacities in which he is sued herein. His prayer was for judgment against the said Roy Lindsey, both in his individual capacity and as survivor of the community estate of himself and deceased wife, Almarene Lindsey. The petition failed to specifically allege that the notes sued on constituted a community debt or any facts showing this. It failed, also, to allege that appellant ever qualified under the statute.

Judgment was rendered by the trial court for appellee as prayed for.

Briefly stated, the legal issues here are: (1) That the said petition went no further than to allege a cause of action against appellant personally and for foreclosure, and is wholly insufficient to state a cause of action against the community estate as such so that any deficiency judgment could be collected out of the community property; and (2) that the evidence failed to show the existence of a community obligation, and therefore will not support the judgment rendered by the trial court against the community property.

Article'' 3668 (Rev. St.) provides, in substance, that the return to the county judge of the inventory, appraisement, list of claims and bond. The order approving them, shall also authorize such survivor to control, manage, and dispose of such community property, etc. Article 3669 provides, in part: . “When the order mentioned in the preceding article has been entered, such survivor * * * shall have the right * * * of * * * being sued with regard to the same, in the same manner as during the lifetime of the deceased.”

This language apparently evidences a legislative intent to authorize suits on community debts to be filed against the surviving husband personally after he has qualified under the statute. In Carter v. Conner, 60 ,Tex. 52, it was held that a levy and sale of community property passed the title to such, though the judgment was against the surviving husband alone, and though the pleadings failed to allege that the claim sued on was for a community debt. After appellant herein qualified as survivor under the statute, his authority and power over the community property coincided with that possessed by him prior to the death of his wife. It included the right even to mortgage such property to secure his personal debts. McGraw et al. v. M. & P. National Bank of Sherman (Tex. Civ. App.) 34 S.W.(2d) 633, and authorities there collated. It is not absolutely necessary that such qualified survivor in conveying property should in any manner refer in the instrument itself to the power under which he purports to act or to the community administration in order to pass full title to community property. McGraw et al. v. M. & P. National Bank of Sherman, supra. The above statute, construed in the light of the decisions referred to, we think justifies us in concluding that a suit for a community debt may be brought against the surviving husband individually after he has properly qualified as survivor without making any reference in the pleadings to his appointment and qualification, and that a levy and sale of community property under a judgment in such a proceeding passes all title thereto.

We think it appears from tlfe allegations of the petition already quoted that appellee intended to charge that the debt sued on was a community obligation, though it is not directly so stated.

The findings of the trial court evidence the continuance of a development program with reference to the “Lindsey Addition,” begun prior to the death of appellant’s wife, and which eventuated in the borrowing and expenditure of the money in question for the benefit of the community estate after her death. By the terms of article 3669 appellant had the right to “manage * * * such community property as may seem for the best interest of the estate.” This discretion lodged with the survivor carried with it, we think, the right to continue a program already begun, and as an incident of such right to borrow money to effectuate this purpose which would properly constitute a charge against the community estate. The trial court specifically found that “the whole business venture was a community project, from which Lindsey could derive no profit to the exclusion of his children, and for which the community estate is bound.” We concur in this view.

The judgment is affirmed.


text:
    BEACON OIL & REFINING CO. v. STATE.
    No. 7915.
    Court of Civil Appeals of Texas. Austin.
    Jan. 11, 1933.
    T. U. Boone, of Wichita Falls, for appellant.
    James Y. Allred, Atty. Gen., and Maurice Cheek and Willis E. Gresham, Asst. Attys. Gen., for the State.
   McClendon, c. j.

Appeal from an interlocutory order granting a temporary restraining and mandatory injunction in favor of the state against Beacon Oil & Refining Company (called herein the refining company) requiring the latter to file with the Railroad Commission certain' daily and semimonthly reports prescribed by the commission in what are designated as forms E-H and E-I in rules promulgated by the commission in performing its functions under the mineral oil proration laws.

The only question urged in the appeal is alleged error of the trial court in overruling a plea in abatement setting up the filing by the refining company of a bill in equity in the United States District Court for the Eastern District of Texas, at Tyler, wherein the commission was sought to be enjoined from enforcing the rules involved in the order appealed from.

Appeals from interlocutory orders are hot allowed except in the specific instances authorized by statute. Our statutes do not allow appeal from interlocutory orders granting or overruling pleas in abatement on the ground of another suit pending. Review of such orders can only be had in an appeal from a final judgment. The instant appeal is only from the interlocutory temporary injunctive order, and does not confer jurisdiction to review the order overruling the plea in abatement.

The order appealed from is affirmed.

Order appealed from affirmed.


author: ' SMITH, J.

text:
    DISMUKES v. DISMUKES.
    No. 8949.
    Court of Civil Appeals of Texas. San Antonio.
    Dec. 21, 1932.
    Rehearing Denied Jan. 18, 1933.

      Atlas Jones, of Uvalde, for appellant.
    Bitzler H. Jones, of Uvalde, for appellee.
   ' SMITH, J.

This is a controversy between a divorced mother and father over the custody of their six year old son. Under existing orders of the trial court the boy is awarded to the custody of his father on Sunday? and of his mother during the remainder of the time.

Originally, when the divorce was decreed on September 17, 1029, the father was granted the custody of his son two hours a week, but this order was modified on September 15, 1931, as it now is. The present action is in the form of a new suit to further modify the order so as to extend the father’s custody of the boy.

The matter was heard by a jury, who found in response to a special issue that “conditions affecting the welfare of the child” have not “changed” since the last decree regulating its custody. Upon this finding the trial judge denied any relief to the father, who has appealed.

There was a great deal of testimony in the /case, consisting largely of small bickerings between the parents of the unfortunate and helpless victim of the controversy. Much óf the testimony was inadmissible and had no bearing upon the paramount issue of what is for the best interest of the child, except to disclose the miserable tragedy which has thrust him into a domestic no man’s land,' across which he is bandied back and forth between the hates and jealousies of his divorced parents.

We conclude that the evidence does not warrant a disturbance of the existing situation, since the child cannot be removed from the custody of both parents. The jury had no guide in the evidence to enable them to compare prior conditions with those existing after the last decree or to advisedly answer the sole issue submitted to them, yet the trial judge heard the evidence and declined to set aside the verdict or readjust the status of the child, and this court is not disposed to revise his orders thereon, or to hold that he has in anywise abused his discretion in the case.

All of appellant’s assignments of error and his motion for rehearing are overruled, and the judgment is affirmed.

The foregoing opinion will be substituted for the original, which will be withdrawn.


author: HARVEY, J. CURETON, C. J.

text:
    HOLT v. FARMER.
    No. 1601-5989.
    Commission of Appeals of Texas, Section A.
    Feb. 1, 1933.
    Sanders & Scott, of Amarillo, for plaintiff in error.
    R. H. Templeton, of Wellington, for defendant in error.
   HARVEY, J.

The plaintiff in error, D. E. Holt, brought this suit in the district court of Wheeler county, against the defendant in error, R. E. Farmer, to recover the amount alleged to be due on three promissory notes executed by Farmer. The latter resides in Collingsworth county, and this fact is alleged in the petition of the plaintiff, Holt.

The petition is silent as to where the notes are payable, and no other fact is alleged showing venue in Wheeler county. The defendant, Farmer, filed his original ¿nswer to the plaintiff’s petition, and therein pleaded, in the order named: (1) General demurrer; (2) a special exception on the ground that the petition showed on its face that the defendant resided in Collingsworth county, and did not show that venue lay in Wheeler county; (3) general denial. Subsequently during the same term of court, the defendant, Farmer, filed his amended original answer in which the general, exception, special exception, and general denial contained in the original answer were repeated, and these were followed by special pleas alleging payments for which he had not received credit on the notes sued on. Thereupon Farmer invoked a ruling of the trial court on the general exception and special exception contained in the amended answer. Both exceptions were overruled. The case then went to trial before a jury. The plaintiff introduced in evidence the notes sued on, and they showed on their face to be payable in Collingsworth county. When the notes had been introduced in evidence, the plaintiff, Holt, rested. Farmer then requested the court to instruct the jury to return a verdict for the defendant, on the ground that the plaintiff’s petition showed on its face that the defendant resided in Collingsworth county, and the notes sued on showed on their face to be payable in that county. This request for peremptory instruction was refused and the trial proceeded. At the conclusion of the testimony in the case, the court peremptorily instructed a verdict for the plaintiff, Holt. The verdict being returned,, judgment was entered accordingly. Farmer appealed and assigned error in respect of the several actions of the trial court stated above. The Court of Civil Appeals sustained' the assignments of e'rror going to the overruling of the defendant’s special exception above mentioned, and to the refusal of the peremptory instruction requested by Farmer. Basing its decision on those rulings, the Court of Civil Appeals reversed the judgment of the trial court and remanded the cause [36 S.W.(2d) 317].

For reasons to be given, the Court of Civil Appeals erroneously sustained the assignments of error it did. Although article 1995 of the Statutes provides that no person in this state shall be sued out of the county in which he has his domicile, the provision is not of a jurisdictional nature but merely gives the defendant the personal privilege to be sued in the county of his residence. This privilege must be asserted by proper pleading filed in due order of pleading, else the privilege is waived. R. S. articles 2006 and 2012. The special exception interposed by Parmer, claiming his privilege to be sued in the county of his residence, was, in the contemplation of the prevailing rule of procedure prescribed by the Supreme Court, a dilatory plea, and should have preceded any and all pleas going to the merits of the case. Rule 7, District and County Courts; Townes, Texas Pleading, p. 517. The general exception, which preceded the special exception in the defendant’s answer as filed, went to the merits of the suit, in that the sufficiency of the plaintiffs petition to show a cause of action against the defendant was thereby challenged; whereas, the special exception merely challenged the right of the plaintiff to bring his suit in Wheeler county. It follows, therefore, that the special exception was not filed in due order of pleading, and the privilege undertaken to be asserted thereby was waived. Dickson vi Scharff (Tex. Civ. App.) 142 S. W. 980; Townes, Texas Pleading, p. 351. Besides, the two exceptions contained in the defendant’s answer were presumably determined by the trial court in the order pleaded, there being nothing in the record to show the contrary. For the reasons shown, the trial court properly overruled the special exception. The peremptory instruction to the jury, which was requested by Farmer, was properly refused, for the reason that in no event would the fact that venue was improperly laid constitute a defense to the notes.

The trial court committed error, however, in peremptorily instructing a verdict for the plaintiff, Holt. Because of this error, the judgment of reversal entered by the Court of Civil Appeals should remain undisturbed. There is testimony to show the following facts which, if true, would entitle the defendant, Farmer, to a credit of $600 on the notes sued on: The notes were executed by Farmer to one J. R. Edwards in the year 1920, and were "transferred by the latter to Holt shortly'after their execution. In the year 1922, Farmer rented to Edwards certain land, for an agreed rental of $600. Farmer did not know until long afterwards that Edwards had transferred to Holt the notes in question. In the rental contract, which was in writing, it was expressly stipulated that said rental was to be credited on said notes. Holt was present when this rental contract was made, and knew its terms. Later on, the rental was paid over by Edwards to Holt. The latter did not apply same as a credit on said notes, but did apply same on some other notes. In some respects, the testimony concerning those other notes is not entirely clear. At any rate, Holt, under the circumstances detailed, did not have the right to appropriate the $600 to the payment of any debt other than that represented by the notes in question; for Holt anew that Farmer had designated in the rental contract, as he had the right to do, the debt to which the rental for the land was to be applied.

There were other payments made to Holt, by one M. A. Wadsworth, of moneys due from the latter to Farmer. But the testimony regarding these payments is obscure in some respects ; consequently in view of the probability that the testimony may be more fully developed at another trial, we shall not undertake at this time to determine whether Holt ought to have applied said payments on these notes or not.

For the reason hereinabove stated, we recommend that the judgment of the Court of Civil Appeals, reversing the trial court’s judgment and remanding the cause, be affirmed.

CURETON, C. J.

The judgment of the Court of Civil Appeals, reversing and remanding this cause, is affirmed, as per opinion of the Commission of Appeals.

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


author: RYAN, J. CURETON, O. J.

text:
    SOUTHERN SURETY CO. v. WEAVER BROS. et al.
    No. 1380-5972.
    Commission of Appeals of Texas, Section B.
    Feb. 1, 1933.

      J. T. Suggs, Jr., and Rice, Hyman & Suggs, all of Dallas, and Anderson & Lewis, of Center, for plaintiff in error.
    Sanders & McLeroy, Davis & Davis, and E. H. Carter, all of Center, and Chas. L. Brach-field and John R. Arnold, both of Henderson, for defendants in error.
   RYAN, J.

Weaver Brothers, building .material dealers, instituted this suit in the district court of Shelby county against the Methodist Episcopal Church South, of Center, Tex., N. O. Thomas & Sons, contractors, and Southern Surety Company, surety on the contractors’ construction bond; judgment was sought against the several defendants for the price of certain material sold by Weaver Brothers to the contractors and used by them in constructing a building for the church. The surety company was sued on the theory that being the surety on the contractors’ bond to secure the faithful performance of the building contract, and having taken over the work after default by the contractors, it was liable for the unpaid material bills. A lien was ■also claimed against the church.

Trial was before a jury on special issues, and on its verdict judgment was rendered in favor of Weaver Brothers against the surety company and N. 0. Thomas & Sons for the sum of $4,091.57, with recovery over against Thomas & Sons in favor of the surety company. Any recovery against the church was denied, and its property was released from the claimed lien.

The surety company and Weaver Brothers appealed from said judgment which was affirmed by the Court of Civil Appeals, 35 S.W.(2d) 255, and the case is now before the Supreme Court on application for writ of error granted the surety company “because of alleged conflicts” with decisions of other Courts of Civil Appeals and of the Supreme Court on questions of law necessary to the decisions of the cause.

In addition to a general denial, the surety company specially pleaded in defense: (1) The bond on which it was sued was one of indemnity to the church only, and could not afford plaintiff (Weaver Brothers) a cause of action; (2) the contractors had defaulted, in the building contract, and thereafter the owner church had expended not only all of the remainder of the contract price, but' also $1,-226 supplied by the surety company for the necessary expense of completing the building ; (3) the surety company received no part of the contract price from the church, nor any funds whatever, but to the contrary the church had secured from it and used $1,226 as above stated; and (4) that the final acceptance of the building by the church, subject to payment by the surety company of any and all amounts due for material furnished and labor performed which were then unpaid, and its continued liability as surety on the contractors’ bond, therefor, was not a contract, was without consideration, and in no manner imposed obligations beyond its bond, on the surety.

The contract entered into between the owner church and contractors provides: “The owner shall have the right, prior to the signing of the contract, to require the contractors to furnish bond covering the faithful per-1 formance of the contract and the payment of all obligations arising thereunder, in such form as the owner may prescribe and with such sureties as he may approve.”

Bond was executed by the contractors with the Southern Surety Company as surety, to the church, in the sum of $20,000, conditioned that whereas the contractors entered into contract with the church (by reference thereto, which was made a part of the bond) to erect a new church building in the City of Center, for the sum of ⅞30,000, therefore, if the contractors shall complete said contract according to the plans and’specifications ■ for same, and shall indemnify the church against all loss or expense resulting from the contractors’ failure to pay all labor and material bills in connection with said contract, said bond shall become null and void, otherwise to remain in full force and effect.

It was further provided in the bond that no liability shall attach to the surety thereunder, unless in the event of any default on the contractors’ part to perform any of the terms, covenants, or conditions of the contract, the church shall promptly, upon knowledge thereof, and not later than ninety-five days after such knowledge, notify the surety by written notice with a statement of the principal facts showing such defaults and the dates thereof.

In due time, the church, in writing, advised the surety of certain work not completed according to the contract, and certain unpaid debts due by the contractors, among which was the claim of Weaver Brothers to the amount of $4,091.57. This notice, dated October 4,1927, also stated: “The contractors are still at work on the church and advise that they are going to complete the church according to plans and specifications, and this notice to you is intended only to give you the notice that is required by the terms of your bond and you can be governed accordingly.”

The notice signed by Weaver Brothers, addressed to the chairman of the church’s building committee, dated September 23, 1927, advised the nonpayment of a balance of $4,-091.57, resulting from purchases of material by the contractors and used in the building amounting to $15,514.60, less credits amounting to $11,423.09, and stated: “We are herewith filing this claim against the building fund and shall hold this claim against the building until said unpaid balance is paid.” Statements showing invoice date and amount of each invoice were attached thereto. •

The jury found that the surety had notice on September 19, 1927, of Weaver Brothers’ claim, that on September 23, 1927, the church acquired such notice, and on September 27, 1927, the church had on hand the sum of $4,220.98, unexpended, of the contract price.

The jury further found that the church knew that Weaver Brothers had filed a notice or lien for an unpaid part of their bill, and at the time their first account was filed with the county clerk, the church held the above-unexpended amount of the contract price; also that the church received notice in writing at the time of each purchase from Weaver Brothers of each item of material that went into the erection of the church building.

By written communication, dated October 21, 1927, the surety advised the church as follows: “This letter evidences release for such balance of retained percentage on the Church Contract above referred to, as is necessary for,completion of the building, payment of such amounts to be made for payrolls and other necessary expenses for completion on order and signature of Mr. Butler Johnson, our agent in Center, Texas, whose signature appears at the bottom of this letter. Yours very truly, Southern Surety Company, By Ben T. Harrison, Attorney-in-fact. Countersigned. Butler Johnson.”

In consideration of the execution of said bond by the surety, the contractors and surety agreed that, in the event of 'the contractors’ failure to carry out said contract with the church, the surety may at any time thereafter take such steps as it may deem necessary or proper to obtain due performance thereof or its release from liability thereunder. For the better protection of the surety, the contractors assigned to it all tools, plant, equipment, and materials, then or thereafter in or upon the work, including all materials purchased for or chargeable to the contract, which may be in process of construction, in storage elsewhere, or in transportation to the site; also all payments, funds, moneys, or property due or to become due as provided in the contract, and all rights in and to all subcontracts, then or thereafter entered into, and the materials embraced therein. It was further agreed that in the event the contractors shall fail or be unable to complete said contract, the president or vice president of the surety company was appointed the contractors’ true and lawful attorney with full right and authority to sign the contractors’ name to any voucher, check, release, bill of sale, satisfaction, or paper necessary or desired to carry into effect the purpose of said assignment; the surety was also authorized to enter upon and take possession of said tools, plant, equipment, materials, and subcontracts, and enforce, use and employ such possession.

The jury found that the surety company took over and completed the building; that it was taken over on October 21, 1927; that, the surety company directed or requested the church to pay out the money on hand in the church’s building fund, after said surety company had received notice of the unpaid bills owing to Weaver Brothers; and that the 10 per cent, authorized to be retained by the original contract between the church and the contractors was expended after the surety company had notice of said unpaid bills due to Weaver Brothers.

Payments, after the contractors abandoned the work, were made upon the approval of Butler Johnson, whom the jury found was the duly authorized agent for the surety company ; to complete the work required the expenditure of all the contract price with the additional sum of $1,226 advanced by the surety company.

It is stated by the Court of Civil Appeals: “The surety company assumed the obligations of the contract and completed the building according to the plans and specifications and at its request the church furnished it the following certificate:

“Center, Texas, January 10, 1928.
“Southern Surety Company, lies Moines, Iowa.
“Gentlemen: This is to advise you that subject to the exceptions hereinafter stated, the Methodist Episcopal Church South, of Center, Texas, has been completed to the satisfaction of the building committee, and is accepted by said Committee, subject to said exceptions, which are as follows:
“(1) It is not intended to release you from payment of any and all amounts due for material furnished and labor performed in the construction and erection of said church which are now unpaid, hut that you remain liable as surety on contractors bond for the payment of such amounts.
“(2) It is not intended by this instrument to accept hidden defects, if any there be, in the erection of said church.”

• — which was accepted by the surety, without objection.

Opinion.

The church’s contract required of it the payment of a stipulated sum, $30,000, for the erection of a church building. The church made such payment in installments on architect’s estimates, as provided in the contract, first to the contractors, and, when they abandoned the job, then to those performing labor and furnishing material; such latter estimates having the approval of Butler Johnson, the surety’s representative; therefore the church discharged its obligation.

When the contractors abandoned the work, the church had on hand as retainage under the contract, a larger amount of money than required to pay Weaver Brothers’ claim. This retainage was provided for by the contract and of course was for the protection of the surety as well as laborers and material-men, and was applicable as well to the claim of Weaver Brothers as to the claims, if any, of others similarly situated.

By direction of the surety, the church was released of such retainage, and the amount thereof used in payment of other claims necessary for the completion of the building, on the order of Butler Johnson, the surety’s agent at Center, Tex.

If this retainage had been applied to the payment of claims owing by the contractors at the time of their abandonment of the work, necessarily the amount needed by the surety for the future completion would have been proportionately increased; the use of such retainage to pay for future completion, instead of to all claims against the contract, was therefore to the surety’s advantage.

The bond is payable to the church, and the-church could enforce it to the extent of claims for labor and material, because it secures the owner to that extent, against such claims. It is contended that the bond was not intended for the benefit of a party not privy thereto and not entered into with such third party’s -benefit as its object, and therefore not recoverable on by Weaver Brothers, who were not parties thereto and not secured thereby; in other words, that only the church can recover thereon.

In Gen. Bonding & Casualty Ins. Co. v. Waples Lumber Company (Tex. Civ. App.) 176 S. W. 651 (writ of error refused), the bond was similar to that in the instant case; recovery thereon by a materialman was denied because liability was to the owner only, and not to the benefit of materialmen where the bond itself or the contract requiring its execution did not provide that the bond should be payable to the materialmen, or that it should inure to their benefit.

To the same effect is the holding in National Bank of Cleburne v. G., C. & S. F. Ry. Co., 95 Tex. 176, 66 S. W. 203, and in Santleben v. Alamo Cement Co. (Tex. Civ. App.) 25 S. W. 143.

The Legislature (Gen. Laws, 24th Leg. 1915, e. 143) enacted a statute requiring the owner to take a bond from the contractor, the effect of which was to permit suit to be brought by materialmen (among others) on sueh bond and recover thereon in the same manner as if the bond were made payable directly to them; but this was held to be unconstitutional as an unwarranted interference with the liberty to contract. Southern Surety Co. v. Nalle & Co. (Tex. Com. App.) 242 S. W. 197; Williams v. Baldwin (Tex. Com. App.) 228 S. W. 554; Wright v. A. G. McAdams Lumber Co. (Tex. Com. App.) 234 S. W. 878.

Therefore, if the owner suffered no loss or damage because of the contractors’ failure to comply with the terms of the contract, no liability existed under the bond against the surety in favor of the owner. Putegnat Co. v. Fidelity & Deposit Co. (Tex. Com. App.) 29 S.W.(2d) 1004.

It is true that no person can sue upon a contract unless he be a party to or in privity with it, but provisions in a contractors’ bond sueh as “the obligation of this bond shall inure to the benefit of material men and sub-contractors,” give them a right of action on the bond not dependent upon the existence of a materialman’s or laborer’s lien. U. S. Fid. & G. Co. v. Thomas (Tex. Civ. App.) 156 S. W. 573; American Emp. Ins. Co. v. Roddy (Tex. Com. App.) 51 S.W.(2d) 2S0; Austin Bros. Bridge Co. v. Love (Tex. Com. App.) 34 S.W.(2d) 574 ; 7 Tex. Jur. p. 98.

But, as correctly stated by the Court of Civil Appeals, the record showing that upon the contractors’ default the surety took over and completed the building and supervised the payment of the funds agreed to be paid by the church, the surety became entitled to all the benefits of the contract and assumed all its responsibilities.

It is argued' that because the contract provides (article 33) “neither party to the contract shall assign the contract or sublet it as whole without the written consent of the other, nor shall the contractor assign any moneys due or to become due to him hereunder, without the previous written consent of the owner,” and because no sueh written consent of the church to the assignment by the contractor to the surety was shown, the latter does not, by acting with the owner in effecting completion of the building, become liable under the building contract by virtue of being the contractors’ assignee.

It may be true that the surety did not reserve in its bond any right to complete the building on the contractors’ default, but the contract between the surety and contractors did so provide, when the surety reserved the right therein to take such steps as it (the surety) may.deem necessary or proper to obtain due performance of the contract and release from liability thereunder, and took an assignment of tools and equipment, payments, funds, moneys, and property due, or to become due, under the contract, as well as all rights in and to subcontracts and materials embraced therein, and it was under such contract that the surety .acted in the completion of the building, appointed its own foreman, and directed payment by the church of all funds in connection therewith; this was done with the approval of the church, as is evidenced by the church’s payments under and only with the approval of the surety’s representative, which we think satisfies- the objection. Then, finally upon request by the surety of proper clearance from the church, the church accepted the' building from the ' surety, subject to certain conditions as here-inaboye stated.

We are cited by plaintiff in error to Employers’ Casualty Company v. Rockwall County, 120 Tex. 441, 35 S.W.(2d) 690, and Gollnick v. Fry, 119 Tex. 23, 23 S.W.(2d) 677, 681, as sustaining its contentions herein. In the first-cited case the contract was between the surety who completed the contract and claimed a retainage fund in the county’s hands, under an assignment of all the deferred payments and retained percentages and all moneys due and payable to the contractor at the time of his default in the contract or cessation of work thereunder or that may thereafter at any time become due and payable to the contractor on account of the contract, ■on the one hand, and a bank, claiming the entire fund under an assignment from the contractor made subsequent to the assignment to the surety, on the other hand. The bank claimed priority in right to the retainage fund, first, because it loaned the contractor money, which was used to pay laborers and materialmen, and therefore subrogated to their rights — but the court held that there was no assignment or agreement therefor by the laborers and materialmen to that effect, and therefore no subrogation; second, because the surety’s claim could accrue only after and conditioned upon the contractors’ default, which was subsequent in time to the accrual of the bank’s claim. The court held that the surety’s claim to the retained fund, under its assignment, was superior to that of the bank; the surety’s right being by reason of the anterior assignment to it, as well as by subrogation, which is in line with the holding in Prairie State Nat’l Bank v. United States, 164 U. S. 227, 17 S. Ct. 142, 41 L. Ed. 412, that the right of subrogation for a surety relates back to the making of the original contract.

In Gollnick v. Fry, supra, the contractor, reserved the right to, and did in fact, perform the contract; the lumber company merely furnished material and advanced money to the contractor by paying his orders therefor, in carrying out the contract by the contractor.

Clearly said eases are distinguishable from, and not authority here. The rule followed by us in this case is fully recognized in Gollnick v. Ery, as follows; “If it had been attempted, with the consent of the owner, for a valuable consideration, to substitute the lumber company for the contractor, such company would thereby have assumed and obligated itself to fully perform the contract according to its terms. C. J. vol. 5, p. 977.”

It is also argued that if the holding of the Court of Civil Appeals is allowed to stand, no longer can any surety afford to discharge its obligation by completing a defaulted contract, on the premise that the liability of a surety who refuses to perform a defaulted building contract can in no event exceed the amount reasonably expended by the owner in effecting completion, less the amount of the contract price in the owner’s hands at the time of the default; thus penalizing a willingly performing surety. Liability in the present case is of course dependent upon the contract between the parties and the bond securing the performance thereof.

If the surety had refused to complete the contract and the owner church had done so, it (the church) would have become liable for material and labor used in doing so, and unquestionably could have enforced same against the surety. Fidelity & Dep. Co. v. Kelsay L. Co. (Tex. Com. App.) 29 S.W.(2d) 1052, 1059. Such liability would not have been less; the material in question went into the building (H. & S. Eng. Co. v. Turney, 110 Tex. 148, 154, 216 S. W. 621), and of course had to be paid for by some one. If the surety had refused to perform and the owner had then taken over the completion, the latter’s liability for the material used existed. Security to the church against such a claim is provided for by the bond itself. So there is no merit or force in that argument.

But the surety having taken over the contract and completion of the building, we think this case is ruled by the principles announced in Putegnat Co. v. Fidelity & Deposit Co. (Tex. Com. App.) 29 S.W.(2d) 1004, 1007, as correctly held by the Court of Civil Appeals, 35 S.W.(2d) 255.

In that case, as here, the contractor agreed to construct a certain building in accordance with certain plans and specifications, and to furnish all necessary labor and material therefor, and also a bond with approved security. In both cases, the contract required completion of the work; in that case the bond provided “that if the principal shall abandon said contract * * * the surety shall have the right, at its option, to complete said contract or to suh-let completion thereof” ; there is no such provision in the bond here, but that right was reserved in the contract between the surety and the contractor, was acted on by the surety, and the building completed by the surety because of that right, with the approval of the church, as evidenced by the church thereafter paying out its building fund under the surety’s direction and supervision.

In both cases, the contractor, before the building was completed, abandoned the enterprise, and the surety completed the building.-

As there said by Presiding Judge Short of this section of the Commission of Appeals: “When the owner notified the defendant in error [surety] that the contractor had made default, the record shows that it elected to complete the contract, thereby becoming entitled to all the benefits of the contract and assuming all its responsibilities. When the defendant in error reserved the right to make this election, and after he had exercised it, under the very conditions which it had previously prescribed, there was an assignment to it by virtue of the existence of the conditions set forth in the contract which had been made between the owner and the contractor. The contract having thus been assigned by the existence of the conditions and the election on the part of the defendant in error to complete the contract, the defendant in error became entitled to the benefits of the contract, and necessarily assumed its burdens. The owner discharged his obligations under the contract. The contractor failed to discharge his, whereupon the defendant in error exercised its right to complete the contract and to stand on the terms of the bond, which, as we have seen, was so written as to embrace within its terms the contract made between the owner and the contractor. The facts in this case show the elements of an assignment by the contractor to the defendant in error of the contract, with the consent of the owner of the building, whereby the defendant in error, upon its election to complete the contract, became entitled to all of its benefits and assumed all of its responsibilities.”

The facts in the two cases are essentially the same.

Here, also, it is shown that the church accepted the building, after its completion by the surety, with the express reservation of the nonintention to release the surety from payment of unpaid amounts due for material furnished and labor performed in the construction and erection of the church, and the express requirement that the surety remain liable for the payment of such amounts. This conditional release was not objected to by the surety, and to our minds evidences the acceptance thereof, and an intention of the parties that such unpaid claims for material and labor must be settled by the surety.

The surety took over completion of the building after it had notice of Weaver Brothers’ claim, and thereafter accepted the release from the church with the requirement that it would be responsible for all unpaid materials.

As further said in Putegnat v. Fidelity & Deposit Co., supra: “The testimony shows, without dispute, that at the time the defendant in error elected to exercise this right, to complete the contract, after the contractor had abandoned the contract, it had information that the contractor had, in pursuance of his obligation with the owner, procured from the plaintiffs in error the material necessary to construct the building, but that the contractor had not paid for this material. The testimony further shows, without dispute, that this material was actually used by the contractor in the furtherance of his efforts to perform his part of the contract. * * ⅜ This contract, the right to complete which the defendant in error exercised, has mutual and dependent stipulations. It is stipulated that the contractor should construct, at his own expense, a certain dwelling in a certain location. Another* stipulation is that the owner of the dwelling should pay therefor a certain sum of money when completed, according to certain plans and specifications. Each of these stipulations is dependent, the one upon the other. By the express terms of the contract, it is apparent that the parties thereto contemplated that, as and when the contractor performed the acts he agreed to perform-, the owner of the dwelling in process of erec1 tion should likewise do the things he agreed to do. The contract being a mutual and dependent one, when the defendant in error demanded and received from the owner what the contractor would have been entitled to demand and receive from him had t-he latter completed the contract, as the defendant in error had done, the law implied upon -the part of the defendant either an assertion that all things had been done which the contract required to be done or a promise that it would do everything which the contract had required to be done in order that it should be completed. Where one accepts the benefits of a contract, he must assume its burdens.1’

We have reached the conclusion that the surety assumed the defaulted contract, was entitled to and received the benefits thereof, and became subject to the liabilities thereof, one of which was the payment of Weaver Brothers’ claim, and therefore recommend that the judgments of the district court and Court of Civil Appeals be affirmed.

CURETON, O. J.

The judgments of the district court and of the Court of Civil Appeals are affirmed, as recommended by the Commission of Appeals.

       38 S.W.(2d) 1098.