author: JONES, C. J.

text:
    CONNALLY et al. v. CONTINENTAL-SOUTHLAND SAVINGS & LOAN ASS’N.
    No. 11167.
    Court of Civil Appeals of Texas. Dallas.
    Nov. 21, 1931.
    Rehearing Denied Nov. 12, 1932.
    Renfro, Ledbetter & McCombs, Louis J. Hexter, Win. Andress, Jr., W. Gregory Hatch-er, and Goggans & Ritchie, all of Dallas, for appellants.
    Geo. T. Burgess, of Dallas, and Maco Stewart, of Galveston, for appellee.
   JONES, C. J.

Mrs. May Connally, one of the appellants, filed, a suit in a district court of Dallas county against Continental-Southland Savings & Loan Association, appellee, to recover the sum of $5,100, alleged to be due her -'by virtue of the fact that she owned class O shares in ap-pellee association, of the par value in said amount, and that when she subscribed for the shares she paid in cash to appellee the par value of the stock. A number of others, who are appellants, intervened in the suit, also seeking a recovery of the value of matured shares, which they severally owned in the appellee association. A temporary writ of injunction was sought by each appellant to restrain an alleged illegal transfer of the assets of appellee, until its obligation to each had been paid. The trial court sustained a general demurrer to the pleading of each appellant, and a judgment of dismissal was entered in the cause. An appeal has been duly prosecuted to this court for review of the judgment. The following is a sufficient statement of the case:

A general demurrer having been sustained, this court must treat as established facts on this appeal all of the facts alleged in the pleadings of appellants. The petition of the plaintiff and each plea of intervention are substantially the same in respect to the allegations on which is rested the cause of action.

Appellee was incorporated as Continental Savings & Building Association, and about January 30, 1929, the assets of the Southland Building & Loan Association, were purchased by appellee and all of the liabilities of the selling corporation were assumed by the purchasing corporation. When this purchase was made, the name was changed to Continental-Southland Savings & Loan Association.

As the fact appears from the pleadings that the present stockholders in the appellee association, who had subscribed for stock in the selling association, have all of the rights that accrued to them under the selling association, the case will be discussed as though appellee was the original association. It is shown that appellee is a solvent and active building and loan association, chartered under the' •building and loan laws of this state, with idle, money in its treasury in a sum of more than twice the amount alleged to he due all of the appellants. Each appellant has given the notice legally required to make the sum sought to he recovered due and payable. Each appellant claims that he has priority over every other like claim due to investment stockholders. In other words, the petition of plaintiff and each plea of intervention contain all of the necessary allegations to entitle each party to priority in payment from the idle fund of a solvent and active building and loan association.

The allegations in plaintiff’s petition and in each intervener’s plea show that Maco Stewart has made a proposition to purchase all of the assets of appellee association and to assume its obligations to the stockholders on terms stated in the written proposal, accepted by appellee’s administration officers and submitted to the stockholders for their acquiescence. The proposal is as follows:

“A Proposal from Maco Stewart to Shareholders of the Continental-Southland Savings and Loan Ass’n, Dallas, Texas, September 12th, A. D., 1981.

“When substantially all of your shareholders whose stock is pledged to secure real estate loans and two-thirds in number and amount of your other shareholders, sign and return duplicate of this letter authorizing liquidation of the Continental Southland Savings and Loan Association (and such liquidation approved by the Banking Commissioner as required 'by law) and the sale to me of all assets for $4,231,195.13, I will purchase all stock in Continental Southland Savings & Loan Association on the following terms:

“The auditors, Hutchinson, Smith, Prince and Harris, have divided your assets into two classes, A and B (as per their enclosed statement) placing into Class A your properly secured and current real estate loans plus sufficient amount of lawful stock loans and note of liquidating company to bring the total assets to $5,090,243.91 (being 75% of total outstanding stock other than permanent stock and stock pledged to secure real estate loans), and placing into class B your remaining assets subject to your liabilities. The note of the liquidating corporation to be payable on or before five years and bearing interest at the rate of six per cent. (6%) payable monthly with right to pay thereon at any time any sum desired and same to be secured by lien on all assets of liquidating corporation.
“I will pay for the assets in Class A, stock in Guaranty Building & Loan Co., amounting to $5,090,243.91 to be evidenced by Certificates (in form printed on back hereof) and same to be exchanged and distributed ratably to your shareholders (other than permanent shares and shares pledged on real estate loans) in proportion to their credits shown on the books of the Continental Southland Savings and Loan Association.
“I will pay for the remaining assets in Class B, stock in the Mortgage Liquidating Corporation to be formed by me and operated solely for the purpose of liquidating your Class B assets, subject to your liabilities. The stock in such liquidating corporation will be non-par stock in usual form. There shall be seven directors of whom four shall be named by Continental-Southland’s present directors and three by Stewart and any action by Board to receive two-thirds vote of Board.
“The foregoing assures your shareholders receiving the full benefit of all assets of the Continental Southland Savings and Loan Association.
“On the basis of your Class A assets being fixed as above stated each Continental South-land shareholder (other than permanent shareholders and shareholders whose shares are pledged to secure real estate loans) will receive stock in Guaranty Building & Loan Co. to the extent of seventy-five per cent, of the amount now credited on the books to his stock, and for the remainder will receive his pro-rata of stock in the liquidating corporation. As an illustration — One who has credit on the Continental Southland books of say $1,000.00 will receive 7½ shares of stock in Guaranty Building & Loan Co., of the face and par value of $750.00 and will also receive 250 shares in the Liquidating Corporation, all of which will be preferred over the shares to be issued as Common stock to your permanent shareholders.
“The certificate in stock of Guaranty Building & Loan Co. provides for dividends quarterly and expressly restricts filing of application for withdrawal to one-fifth of the amount per year.
“The assets of the Liquidating Corporation will consist principally of real estate and delinquent notes and be liquidated in an orderly manner and as fast as can be done without sacrifice. Guaranty Building & Loan Co. will furnish, without charge, all clerical services in the home office necessary in such liquidation, and no charge will be made for my services to the Liquidating Corporation.
“When the proposed plan meets the required approval, each shareholder in Continental-Southland will be promptly notified to send in stock to the First National Bank of Dallas, which will act as transfer agent for the stock.
“The assets so transferred to me will be simultaneously by me transferred, the Class A assets to the Guaranty Building & Loan Co. and the Class B assets to the Liquidating Corporation.
“Each borrower will receive credit on his loan for the amount paid in as stock dues and dividends as credited to his account by the books of the Association and such borrower shall execute extension note payable to Stewart or assigns for the balance as shown by such, books at the same rate of interest provided in note now held by the association and principal and interest re-payable in installments of not less than $12.50 per month per thousand.
“Time is of the essence of the contract and the required approval must be had by October 18, 1931, and the deal will then be promptly closed.
“Respectfully,
“Maco Stewart.”

Appellants allege that the approval of the required two-thirds majority of the investment stockholders will be given, that the proposal of Stewart will thereby be accepted upon its terms, and that all of the assets of appellee will thus pass into the possession and apparent ownership of Stewart, and that they will thus be deprived of a vested right to have immediate payment of the full withdrawal value of their shares. They further alleged, in effect, that the proposal of Stewart is illegal, in that the proceedings to be had under the terms of the proposal, to effect the dissolution and liquidation of appellee, are neither that of voluntary liquidation, as provided for in our building and loan law, nor that of a consolidation with another like association, nor a transfer of appellee’s “engagements, funds and property” to another association. Appellant’s allegations in respect to the solvency of appellee, the fact that it is an active building and loan association, and that the proceedings attempted to be carried out under the proposal of Stewart, are illegal, are very full and complete, but it is not deemed necessary to state the scope of such pleadings, other than as given above.

Appellants contend that the allegations in their petition state a cause of action existing solely against appellee, in that, if they established by proper proof the truth of these allegations they are entitled, under the law, to the relief they seek, and that the court erred in sustaining the general demurrer.

Appellee contends that the court did not err in sustaining both the plea in abatement and the general demurrer to the petition, because (a) the pleadings show on their face that other investment shareholders are directly interested in the subject-matter of this suit and are therefore necessary parties; (b) the suit is prematurely instituted, in that the building and loan law requires the approval of the banking commissioner before such a transaction can be consummated, and the Stewart proposal also makes such an approval a condition precedent to consummation, and that the pleadings of appellants show that the transaction sought to be consummated had not reached the stage where such approval could be formally given; (c) that, under the building and loan law of this state, it is entirely within the discretion of the banking Commissioner as to whether the proposed transaction can be consummated, and, in the , absence of an allegation of fraud in securing the approval of the banking commissioner, the courts are without jurisdiction in the premises; (d) that, if appellants be entitled to payment of their accrued claims, they must secure this through the order and direction of the banking commissioner to appellee’s officers, and cannot invoke the power of a court until this means to secure payment has been exhausted.

It is not necessary to consider separately these different contentions, but they will be considered together. Whether appellants’ contention is sustained, or whether it must fall before appellee’s contentions, must be determined from the construction given the statutes in our building and loan laws, applicable to the matters under review. This statutory law is so comprehensive in its terms and so complete in its application to every phase of the business of building and loan associations that, to our minds, the conclusion is inevitable that the Legislature intended that the methods therein prescribed should be exclusive of any other method of accomplishing the same purpose. This law prescribes with particularity both the method of organizing and the purposes for which such associations are organized; it classifies the kind of shareholders that may exist in such associations, and clearly defines the rights of each; it prescribes the procedure to follow in the dissolution and liquidation of an insolvent association ; it prescribes the procedure to follow in the dissolution and liquidation of a solvent association, the procedure by means of which one association may be consolidated with another, the procedure by means of which an association may sell its assets and transfer its engagements; and it further provides that all of these statutory proceedings must have the approval of the banking commissioner, or must be done under his supervision before final consummation.

The duties of the banking commissioner, relating to building and loan associations, are defined in our building and loan law with such particularity that we conclude that his entire duties in reference to building and loan associations are therein described, and that he can perform no duty other than those either expressly given or clearly implied by the statutes composing this law. This officer is given, by article 881a — 17, Vernon’s Ann. Civ. St., supervision over, and control of, all building and loan associations, doing business in this state, and is charged with the execution of the laws of this state relating to Such associations. Article 881a — -13 makes it the duty of this officer to act when any building and loan association is conducting its business, in whole or in part, contrary to law, or failing to comply with the law, etc. Article 881a — 54 prescribes the method by which two or more building and loan associations may be consolidated, or the method by which the sale of the engagements, funds, and property of a building and loan association may be transferred to another, and provides that, “No consolidation or transfer provided herein shall take effect until the terms and conditions have been approved by the Banking Commissioner of Texas,” and like instances might be cited. From these excerpts and others that might be quoted from the building and loan statutes of this state, it is clear that the banking commissioner’s duties relate only to those proceedings and transactions of building and loan associations permitted and allowed by statutory law, except only when such an association is operating its business contrary to the building loan statutes. It follows as an inevitable conclusion that, if the Stewart proposal to take over the “engagements, funds and property” of the appellee association, is such a transaction as Is authorized by such statutes, then the banking commissioner is vested with power to approve or disapprove such transfer, and, in the absence of fraud, his action in the premises would be final, and appellants would be relegated to the purchaser for the enforcement of their claims. The same conclusion must follow if the proposal of Stewart, calling for a dissolution of the appellee association and the winding up of its affairs, be such a voluntary dissolution and liquidation as is authorized by these statutes. In such an event, appellants would have to look to the cash proceeds of appellee’s assets for their claims.

Is the transaction embraced in the Stewart proposal authorized by, or in contemplation of, the building and loan law of this state? • This must be answered by applying the terms ■of the proposal to the provisions of articles 881a — 54 and 881a — 55, supra. Article 881a— 54 reads: “At the annual meeting or at any meeting called for that purpose, any two or more building' and loan associations organized under the laws of this state may, by vote of two-thirds of all shareholders of each of the different associations, resolve to consolidate into one association upon such terms as shall be mutually agreed upon by the directors of such associations; or any such association may transfer its engagements, funds and property to any other such association upon such terms as may be agreed upon by its board of directors, when approved by two-thirds of all the shares of all members convened in special meeting for that purpose, the notice sent to each member of record specifically stating the object of the meeting; if such notice shall state affirmatively the terms upon which such consolidation is contemplated and shall state that any member not present at the meeting in person or by representative will be regarded as having voted for the transfer or consolidation, such absent member shall be counted as being among the required two-thirds affirmative vote; but such transfer shall not prejudice the right of any creditor of any such association to have payment of. his debt out of the assets and property thereof, nor shall any creditor be thereby deprived of or prejudiced in any right of action then existing against the officers or directors of said association for any neglect or misconduct; providing that the reorganized association shall be liable for all obligations to stockholders of the associations existing prior to such consolidation, and providing, further, that no consolidation or transfer provided herein shall take effect until the terms and conditions have been approved by the Banking Commissioner of Texas, and until a copy of the resolution, certified by a majority of the board of directors of each association, shall be filed with said Banking Commissioner of Texas, and recorded in the same manner hereinbefore provided for amendments to charters.”

Article 881a — 55 reads: “At the annual meeting or at any meeting called for that purpose, any Building and Loan Association of this State may, by a vote of shareholders owning two-thirds of the voting shares in force, resolve to liquidate and dissolve the corporation; providing; that before such resolutions shall take effect, a copy thereof, certified to by the president and the' secretary of such Association, together with an itemized statement of its assets and liabilities, sworn to by a majority of its Board of Directors shall be filed with the Banking Commissioner of Texas. When the Banking Commissioner of Texas has approved such resolution it shall thereafter be unlawful for such Association to issue stock or make any loans, but all its income and receipts in excess of actual expense of management shall be applied to the discharge of its liabilities; and the officers of the Association, under the direction of its Board of Directors and under the supervision of the Banking Commissioner shall thereupon proceed to liquidate the affairs of the Association and reduce the assets thereof to cash and distribute the same among the shareholders in proportion to the withdrawal value of the holdings of each shareholder at the time of the passage of the resolution to dissolve. Provided, however, that the plan of the liquidation, including contemplated expenses and the sale of any or all of its assets shall have the approval of the Banking Commissioner or his authorized representative before any expenses are incurred or any sale or sales are made, and any and all expenses incurred by the Banking Commissioner or his duly authorized representative shall be paid from the assets of the Association.”

The Stewart proposal 'offers to appel-lee’s investment shareholders, which offer includes appellants, stock in the Guaranty Building & Loan Association, to the extent of 75 per cent, of the amount now credited on appellee’s books to each of said shareholders, and for the remaining 25 per cent, of such credit, shares in the liquidating corporation created, as specified in the proposal. Each appellant, haying paid in full the par value of the stock issued to him, has credit therefor on appellee’s books, and would receive for each $1,000 worth of stock, $750 worth of stock in the Guaranty Building & Loan Company, and 250 shares in the liquidating corporation. Under the by-laws of the Guaranty Building & Loan Company, each appellant could withdraw in one year only 20 per cent, of the stock issued to him. In other words, it would require five years to complete the withdrawal value of the ’stock given him in the Guaranty Building & Loan Company.

Such is the character of voluntary liquida^ tion of appellee’s assets contemplated under the Stewart proposal. Said article 881a — 55 prescribes the character of a voluntary liquidation of a building and loan association, and is the only voluntary liquidation that is placed under the supervision of the banking commissioner. A mere glance at article 881a —55 discloses that the Stewart plan of liquidation is not simulated to the plan directed by this statute. Under the statutory plan, all assets-of the association are required to be reduced to cash and distributed to the shareholders in proportion to the withdrawal value of the holdings of each shareholder at the time the voluntary liquidation was ordered by the association. The Stewart plan distributes no cash, but gives stock to the shareholders, the par value of which is equal to 75 per cent, of the surrender value of each investment member’s holdings, and the remaining 25 pdr cent, in the liquidating corporation. The conclusion is inevitable that the Stewart proposal for a voluntary liquidation by appellee is not one contemplated by the statute, and hence is not one over which the banking commissioner is given jurisdiction to act.

Is the transfer embraced in the Stewart proposal authorized by, or in contemplation of, the provision of article 881a — 54, describing the manner under which transfer of the “engagements, funds and property” of a building and loan association may be consummated? We do not think so. This statute declares that “Any such association may transfer its engagements, funds and property to any other such association upon such terms as may be agreed upon by its board of directors, when approved by two-thirds of all the shares of all members convened in special meeting for that purpose * * * ; but such transfer shall not prejudice the right of any creditor, of any such association to have payment of his debt out of the assets and property thereof * * * ; providing that the reorganized association shall be liable for all obligations to stockholders of the associations existing prior to such consolidation. * * * ”

It appears from this statute that the only character of statutory transfer is one to another building and loan association; however, in its last analysis the Stewart proposal has this effect, because the proceeds of the transfer are given to appellee’s shareholders in stock of the Guaranty Building & Loan Association, another similar association. Appellee, as a solvent and active building and loan association, now owes each appellant the full surrender value of his stock, and each appellant is entitled to payment in cash of this surrender value from the idle fund now on hand. • Under the statutory transfer described in article 881a — 54, this obligation must be carried out by the purchasing association. The Stewart proposal ignores this obligation and substitutes in lieu thereof another and entirely different obligation of the Guaranty Building & Loan Company. The conclusion therefore must follow, that the Stewart proposal does not embrace the character of transfer authorized by article 881a — 54, and, not coming under the provisions of article 881a — 55, supra, the proposal is one entirely outside of the statute and not under the supervision of the banking commissioner.

'The proposal of Stewart not contemplating such a transfer of the engagements, funds, and property of appellee as is authorized by the building and loan statutes of this state, it follows that the provision of article 881a — 54 which allows a statutory transfer to be authorized by two-thirds vote of the shareholders, cannot apply to the Stewart proposal, and appellants not agreeing to such transfer will not be bound by such vote of the shareholders. Article 881a — 54 of the building and loan statutes, in effect, is a guaranty to the stockholders in a solvent and active building and loan association, that no character of transfer of the entire assets of such company can be forced on them by a two-thirds vote of all the shareholders, except the character of transfer described in said article. Article 881a — 55 of such law is a guaranty to the shareholders in every solvent and active building and loan association that no voluntary dissolution and liquidation can be forced on them by a two-thirds vote of all the shareholders, except that character of voluntary liquidation described in said article.

The Stewart proposal not being authorized either by the provisions of article 881a —54 or article 881a — 55, of our building and loan statutes, it follows that it does not rest within the discretion of the banking commissioner to bring it within either of such articles by an attempt to consummate the proposed transaction with the stamp of his official approval.

Are all of the permanent shareholders of the appellee association necessary parties to this suit? We do not think so. When appellants had matured their claims, it became the duty of appellee to pay each claimant the amount of the surrender value of his stock from one-half of the idle money in its treasury. The pleadings show, and we must treat such showing as a fact, as against a general demurrer, that the necessary funds to pay these claims are on hand for such purpose. In a suit to enforce such claims, appel-lee is the only necessary defendant. Kelly v. Republic Bldg. & Loan Ass’n (Tex. Civ. App.) 34 S.W.(2d) 924; 14 R. C. L. 355, 356, and authorities cited in note No. 19. This suit is not an injunction suit, for the temporary writ of injunction prayed for is only incident to the main purpose of the suit, and this incidental matter cannot control the question of necessary parties. Under subdivision 2 of article 4642, R. C. S. 1925, it is provided that, if one party to a suit threatens, or is about to do, some act in violation of the irights of another party to the suit, an to-junction may be issued’ to restrain the commission of such suit. In the instant suit, appellee not only threatens to, but is in. the process of, transferring all of its engagements, funds, and property to another association in a transaction not authorized by the building and loan statutes, and hence the right to apply for a writ of injunction as an incident to the suit is a statutory right and does not change the character of the principal suit.

If it should be determined on a hearing in the trial court that appellee is a solvent active building and loan association, then appellants are entitled to a temporary writ of injunction restraining the sale and transfer of the assets of the association until their matured claims have been satisfied from funds that can be legally used for such purpose. On the other hand, if it should be determined at such hearing that appellee is insolvent and unable to satisfy the matured claims of appellants, then appellants would not be entitled to such injunction, nor would they be entitled to a judgment in their favor for their matured claims. As stated in 4 R. 0. L. 356, § 15, “It seems to be generally held that the right to withdraw and receive what has been paid exists only where the association is a going concern, and cannot be exercised where the association is, at the time, known to be insolvent, for the condition of insolvency is incompatible with the right of any member to withdraw his contribution to the general fund until the proper proportion of the losses has been ascertained and adjusted.” On insolvency of such an association, a member with matured claims cannot assert other than his right for a pro rata share in the distribution of its assets. Our building and loan association law clearly manifests the intention to place an insolvent building and loan association under the administration of the banking commissioner. Our conclusion, therefore is that, if it be established oh the hearing of this case that appellee is insolvent, then our statutes allow but two courses: (1) A liquidation under the statute had under the guidance and supervision of the banking commissioner ; or (2) a reduction of the association’s liabilities to its members on the plan provided by article 881a — 56. This must be done under the supervision of the banking commissioner.

It necessarily follows that it is the holding of this court that appellants stated a cause of action and that the trial court erred in sustaining the general demurrer, and the case is reversed and remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and remanded.


source: Caselaw Access Project

author: LAWHON, J.

license: Public Domain

text:
    CONNER v. MANNING.
    No. 2272.
    Court of Civil Appeals of Texas. Beaumont.
    Nov. 3, 1932.

      Adams & McAlister, of Nacogdoches, for appellant.
    Denman & Fowler, of Nacogdoches, for ap-pellee.
   LAWHON, J.

Appellee brought this suit against appellant in the county court of Nacogdoches county, alleging that appellant resided in Deon county, Tex. For cause of action it was alleged that a truck owned by appellee was being driven on a highway about a mile west of Douglas, Tex., on "or about March 19, 1931, and that appellant was riding in a Dodge car on this date, same being driven by his daughter under his direction. It was stated that the daughter was appellant’s agent, servant, and employee on this occasion. It was further alleged that as appel-lee’s truck was about half way across a bridge, appellant’s car came down a hill and ran directly into the truck and that no attempt was made by the driver of appellant’s car to avoid the collision; that as a result of the collision appellee’s truck was totally destroyed, to his damage in the sum of $315. Appellant filed a plea of privilege claiming the right to be sued in Leon county, where he resided, and his plea also alleged that no exception to exclusive venue in Leon county existed. Appellee contested the plea, making practically the same allegations as made in his original petition, upon which the cause was heard. The court tried the issue raised by the plea of privilege and controverting answer but did not try the case on its merits, and, at the conclusion of the testimony, the court overruled appellant’s plea, and this appeal is based solely on this judgment.

The appellee introduced only one witness, and his testimony in full was as follows:

“Q. What is your name? A. Morgan Hill.
“Q. Were you driving a truck for Mr. Manning some time last spring? A. Yes sir.
“Q. Do you remember the date? A. No sir.
“Q. Wasn’t it about March 19th, of last year? A. Yes sir.
' “Q. Where-were you driving from? A. I was driving from Alto to Douglas.
“Q. I will ask you whether or not the accident occurred on that date? When you were on that road? A. What did you say?
“Q. About where did the accident occur? Tell the court now in your own words what happened? A. Well, I got on this bridge about three-fourths on the way across and a woman came right straight on.
“Q. What bridge was it? A. I started across Caney Creek bridge about one-half mile the other side of Douglas.
“Q. Which way were you driving? A. West.
“Q. Which way was the woman driving? A. She was driving East on the Douglas highway.
“Q. Tell the court what happened. A. And I was about three-fourths of the way across the bridge' when she ran into me.
“Q. She came on the bridge and ran into your car? A. Yes sir, she ran into my car.
“Q. She ran her ear into yours? A. Yes sir.”

Appellant contends that the evidence is insufficient to maintain venue in Nacog-doches county, and we are of the opinion that this contention should be sustained. When a plea of privilege is controverted, as provided in article 2007, R. S. 1925, the burden rests upon the plaintiff to establish by competent, evidence that suit has been brought in the proper county. Johnson v. Dallas Cooperage & Woodenware Co. (Tex. Com. App.) 34 S.W.(2d) 845; A. B. Richards Medicine Co. v. Mullens (Tex. Civ. App.) 272 S. W. 516; World Co. v. Dow, 116 Tex. 146, 287 S. W. 241. Appellee was attempting to fix venue in Nacogdoches county under subdivision 9, art. 1995, R. S. 1925, which provides that suits based upon a trespass may be brought in the county where the “trespass was committed, or * * * where the defendant has his domicile.” It was alleged that appellant resided in Leon county. It was, therefore, necessary for appellee to show that the alleged trespass was committed by appellant in Nacogdoches county. The evidence merely disclosed that a woman driving a car ran into plaintiff’s truck on a bridge across Caney creek about half a mile west of Douglas, Tex. The evidence does not attempt to connect appellant with the woman driving the car. In Harrison v. Amador (Tex. Civ. App.) 9 S.W.(2d) 279, the court said: “As to the other appellants, H. T. Harrison and M. E. Harrison, there was no proof that Snodgrass was their agent, nor that they owned any interest in the truck, nor that they were in any way responsible for the accident and the resulting damages; and the trial court should have sustained their respective pleas of privilege. It is not proper on a plea of privilege hearing to try the case on its merits, but in this case it was incumbent upon appellees, after the pleas of privilege had been filed, to have alleged and proved that each of the appellants was at least jointly and severally responsible for the trespass which occurred in Williamson county, in order to have maintained venue in that county against each of them.”

There are numerous cases holding that a plaintiff who seeks to hold a defendant in a county other than the one in which he resides must introduce proof showing a bona fide cause of action in the county where venue is sought to be laid. Richardson v. D. S. Cage Co., 113 Tex. 152, 252 S. W. 747; Johnson v. Dallas Cooperage & Woodenware Co. (Tex. Com. App.) 34 S.W. (2d) 845; De Mars v. Montez (Tex. Civ. App.) 277 S. W. 402.

It was alleged that appellant was in the ear and directing its operation and that his daughter was driving, she, at the time, being his agent, servant, and employee. The allegations contained in the petition and the controverting affidavit were not proof of the facts stated. Meadows & Co. v. Turner (Tex. Civ. App.) 270 S. W. 890; Benson v. Travelers’ Ins. Co. (Tex. Civ. App.) 40 S.W. (2d) 966.

It was necessary for appellee to both plead and prove that the trespass was committed in Nacogdoches county. The petition alleged that the collision occurred about one mile west of Douglas, Tex., but it is not alleged that this place is in Nacogdoches county. Douglas is not a county seat and this court does not judicially know its location. M., K. & T. R. Co. v. Lightfoot, 48 Tex. Civ. App. 120, 106 S. W. 395; Dallas Brewery v. Holmes, 51 Tex. Civ. App. 514, 112 S. W. 122. In World Co. v. Dow, 116 Tex. 146, 287 S. W. 241, 242, the Commission of Appeals quoted from Coalson v. Holmes, 111 Tex. 502, 240 S. W. 896, as follows: “To deprive a defendant of the right of trial in the- county of his domicile, the case against him must be within an exception to article 1830 of the Revised Statutes. With the venue challenged, under proper plea, by one sued without his county, as shown by the plaintiff’s pleading or by proof, the burden not only to allege but to prove that the ease is within one of the exceptions to the statute rests on the plaintiff.”

There being neither pleading nor proof that appellant committed the trespass alleged in Nacogdoches county, we reverse and remand the cause with instructions to the trial court to transfer the cause to Leon county, Tex. Reversed and remanded, with instructions.


author: JACKSON, J.

text:
    BLACKWELL v. GENERAL MOTORS ACCEPTANCE CORPORATION.
    No. 3810.
    Court of Civil Appeals of Texas. Amarillo.
    Oct. 12, 1932.
    Rehearing Denied Nov. 23, 1932.
    Hugh L. Umphres, of Amarillo, for appellant.
    Dorenfield, Foster & Fullingim, of Amarillo, for appellee.
   JACKSON, J.

The appellee instituted this suit in the district court of Potter county, Tex., against the appellant to recover the principal sum of ?2,-575.25 due in monthly installments, evidenced by a written sales contract executed by the appellant and payable to Carl Ray as part of the purchase price of a certain Cadillac automobile.

The appellee sufficiently alleges the terms of the contract pertaining to payment and default; the stipulations thereof creating a chattel mortgage lien against the automobile; the assignment in writing to appellee of the contract by Carl Ray; attaches to and makes a part of its petition the sales contract; and prays for judgment for its debt, foreclosure of its mortgage, and the sale of the property thereunder.

The appellant answered by general demurrer and general denial.

The case was submitted to the court without the intervention of a jury and judgment rendered for appellee for its debt and the foreclosure of its mortgage, which action of the court is before us for review.

At the request of appellant the court filed his findings to the effect that Carl Ray was a dealer in automobiles during the month of February, 1931, in Amarillo, Tex.; that prior to February 23d of that year the appellant was negotiating with Carl Ray for the purchase of the automobile, and on Sunday, February 22d, he agreed to purchase and the sales contract was executed at Ray’s place of business in Amarillo on Sunday, February 22d; that on said day some-of the employees were at his place of business, serviced the automobile, and did what was necessary in closing the sale; that appellant took possession of the automobile and continued to use it until a writ of sequestration issued in this suit was levied thereon the 3d day of June, 1931; that appellant never tendered said automobile to Carl Ray or the appellee, nor offered to rescind the transaction by which he acquired possession thereof; that appellee is duly* incorporated and authorized to transact business in this state; that the sales contract was dated February 23d and was by written transfer of the same date sold to ap-pellee for a valuable consideration without notice or knowledge that the sale was made on Sunday and that the assignment from Carl Ray to appellee was not sufficient to put ap-pellee on inquiry. The court refused to find whether or not all the employees were at the place of business on said Sunday or whether the place was kept open on that day for the purpose of making the sale to appellant or for any other purpose. The court states in his findings that he seriously doubts his right to consider the illegality of the contract on the evidence offered by defendant to the effect that the transaction involved occurred on Sunday, but has determined to do so.

Appellant makes no complaint of the fact findings of the court, but challenges the judgment against him as unwarranted because the contract sued on as a matter of law was illegal under article 286 of the Penal Code, inasmuch as the court’s findings show that Carl Ray was a dealer in automobiles and at his place of business sold and delivered the machine in controversy to appellant on Sunday.

The instrument sued on is not drawn payable “to bearer” nor “to the order of a specified person or to him or his order” and contains no .language which “clearly indicate an intention to conform to the requirements” of the Negotiable Instruments Law, and hence is nonnegotiable. Article 5932, §§ 8, 9, 10, R. C. S.

The Supreme Court of Mississippi, in our opinion, in construing a contract substantially in the language of the one involved in this suit, correctly held it to be nonnegotiable. J. W. McNees Motor Company v. Brumfield, 157 Miss. 132, 126 So. 898. Quast et ux. v. Ruggles, 72 Wash. 609, 131 P. 202, is also authority that the instrument involved is not negotiable.

The appellant did not file a plea of non est factum and did not assert by verified plea that the assignment of the sales contract was a forgery. He did not allege that the contract was illegal or set up any fact to show illegality but relied entirely on his general denial. His contention is that the illegality 'of a contract need not be specifically pleaded as a defense and that the evidence offered by him under his general denial was admissible, and having established thereby that the sale was made on Sunday, the court should refuse to enforce it.

The authorities are in hopeless conflict on the proposition urged, and appellant cites numerous decisions from foreign jurisdictions which sustain his contention. He also calls our attention to the following cases by the Texas courts: Texas & P. Coal Co. v. Lawson, 89 Tex. 394, 32 S. W. 871, 34 S. W. 919; Pasteur Vaccine Co. v. Burkey, 22 Tex. Civ. App. 232, 54 S. W. 804, 805; Willis et al. v. Weatherford Compress Co. (Tex. Civ. App.) 66 S. W. 472; Bishop v. Japhet (Tex. Civ. App.) 171 S. W. 499, 500; Osage Oil & Gas Co. v. Caulk (Tex. Civ. App.) 243 S. W. 551; Amarillo Oil Co. v. Ranch Creek Oil & Gas Co. (Tex. Civ. App.) 271 S. W. 145. These Texas cases he asserts hold that when the illegality of a contract appears, even though, not pleaded, the court will at once refuse to enforce its provisions.

The seeming conflict between the holdings announced in the above Texas cases and in other decisions by the Texas courts is, we think, apparent rather than real and arises from general expressions and obiter dicta statements. The rule adopted by the Texas courts seems to be that: “The plaintiff cannot recover when it is necessary for him to prove, as a part of Ms cause of action, his own illegal contract or other illegal transaction ; but if he can show a complete cause of action without being obliged to prove his own illegal act, although such illegal act may incidentally appear, and may be important even as explanatory of other facts in the case, he may recover.” Beer et al. v. Landman, 88 Tex. 450, 31 S. W. 805, 807.

In Floyd et al. v. Patterson, 72 Tex. 202, 10 S. W. 526, 527, 13 Am. St. Rep. 787, Judge Gaines quotes with approval the following language: “It has been observed that the test whether a demand connected with an illegal act can be enforced is whether the plaintiff requires any aid from the illegal transaction to establish his case.”

The same eminent jurist approves this holding again in Oliphant et al. v. Markham et al., 79 Tex. 543, 15 S. W. 569, 23 Am. St. Rep. 363. This rule is adhered to by the Texas courts in Hall v. Edwards (Tex. Com. App.) 222 S. W. 167; Simon v. Garlitz, 63 Tex. Civ. App. 172, 133 S. W. 461; Stone v. Robinson et al. (Tex. Com. App.) 234 S. W. 1094.

None of the Texas authorities cited by the appellant supra contravene this rule. In Coal Co. v. Lawson, the illegality of the contract sued on was “apparent on its face.” In Vaccine Co. v. Burkey, the court says: “Erom its terms, the contract appears to come within the prohibition of the statute against trusts.” In Willis v. Weatherford there was no allegation that the contract was illegal, but intervener resisted the recovery “pleading the facts.” In Bishop v. Japhet, it is said the plaintiff to avoid the defendant’s legal title “is obliged to prove his participation in a transaction prohibited by the civil and penal laws of our state.” In Osage Oil Co. v. Caulk, the record discloses that the contract sued on was a contract for labor on Sunday, hence the illegality appeared on the face of the contract. In Amarillo Oil Co. v. Ranch Creek Oil & Gas Co., the record discloses that by trial amendment the appellant pleaded the facts disclosing the illegality of the contract.

In Heffron v. Pollard, 73 Tex. 96, 11 S. W. 165, 168, 15 Am. St. Rep. 764, Judge Gaines, for the 'Supreme Court, says: “In order for defendant to have availed himself of the illegality of the contract as a defense, he should have pleaded it.”

In Mullin v. Nash-El Paso Motor Co. (Tex. Civ. App.) 250 S. W. 472, 475 (writ denied), the court at El Paso holds: “The rule of pleading is that, if a plaintiff, in order to make out his cause of action, is required to show that the contract sued upon is, for any reason, illegal, the court will not enforce it, whether pleaded as a defense or not. But when the illegality does not appear from the contract itself or for the evidence necessary to prove it, but depends upon extraneous facts, the defense is new matter, and to be available, it must be pleaded.”

To the same effect are the holdings in Markle v. Scott, 2 Willson, Civ. Cas. Ct. App. § 674; and Turner v. Gibson, 2 Willson, Civ. Cas. Ct. App. § 714; Nunn v. Lackey, 1 White & W. Civ. Cas. Ct. App. § 1331.

In Bland & Server v. Brookshire, 3 Willson, Civ. Cas. Ct. App. § 446, the court quotes with approval Adams v. Gay, 19 Vt. 358, by the Vermont court, as follows: “We think contracts made upon Sunday should be held an exception in soxhe sense from the general class of contracts which are void for illegality. Such contracts are not tainted with any general illegality; they are illegal only as to the time in which they are entered into. When purged of this ingredient they are like other contracts. Contracts of this kind are not void because they have 'grown out of a transaction upon Sunday. This is not sufficient to avoid them; they must be finally closed upon that day. And, although closed upon that day, yet if affirmed upon a subsequent day they, then become valid.”

We deem it unnecessary to cite the decisions of foreign jurisdictions holding that illegality is a special defense which must be pleaded and that evidence to prove such defense is not admissible under a general denial.

Plaintiff’s petition did not disclose that the sales contract sued on was executed on Sunday, neither was this fact revealed by the contract itself or the assignment thereof or any testimony offered by plaintiff to prove its cause of action. The appellee objected to the proof offered by appellant showing that the sale was made on .Sunday because there was no pleading that rendered such testimony admissible. These exceptions properly appear in the record and are made the basis of cross-assignments of error by appellee. These cross-assignments are sustained because, in our opinion, this testimony was not admissible under the general denial.

The judgment is affirmed.


text:
    FINANCE CORPORATION OF AMERICA v. STONE et al.
    No. 3891.
    Court of Civil Appeals of Texas. Amarillo.
    Oct. 19, 1932.
    Rehearing Denied Nov. 16, 1932.
    R. E. Prothro and Fischer & Fischer, all of. Amarillo, for appellant.
    R. E. Stalcup, of Dalhart, and Underwood & Strickland, of Amarillo, for appellees.
   JACKSON, J.

Lela O. Stone, a feme sole, purchased an automobile from J. H. Austin, who was doing business in Amarillo under the trade-name of Aubum-Amarillo Company. In part payment for the car she executed an installment note dated January 4, 1930, in the principal sum of $366.96. The note provides for 15 per cent, attorneys’ fees in case of default, and has the usual acceleration clause. At the same time she executed a chattel mortgage upon the automobile to secure the payment of the note, which provides that, in the •event of a failure to pay any installment at maturity, the holder of the note was empowered to take possession of the property, with or without notice, and to sell the same at either public or private sale, and to apply the proceeds, less the expenses, as a credit upon the note; that a balance of $244.64 was unpaid. when the maker defaulted in the installment due May 23, 1930.

For value before maturity, Austin, under his trade-name, transferred the note to the appellant Finance Corporation.

Said corporation instituted this suit, alleging in part as follows: “That plaintiff -is a corporation duly organized and existing under and by virtue of the laws of the State of Pennsylvania; that the defendant Lela O. Stone is a single woman and resides in Potter County, Texas; that defendant J. H. Austin is a resident citizen of Hartley County, Texas, and at the time and times hereinafter mentioned, was engaged in the automobile business at Amarillo, Potter County, Texas, under the trade name of Auburn-Amarillo Co.” •

Lela O. Stone defaulted.

The defendant Austin filed a plea in abatement, the substance of which is that plaintiff was a foreign corporation, having no permit to do business in the state of Texas; that the cause of action arose out of transactions done and performed within the state of Texas; and prayed that the suit be abated. This plea was not verified.

In reply thereto the plaintiff filed a supplemental petition which consists of a general demurrer, general denial, an admission that it was a foreign corporation and had no permit to do business in Texas; but further alleged that it had never done any business in the state of Texas as such term is interpreted under the laws of the state requiring foreign corporations to obtain a permit to transact intrastate business. Plaintiff further set out the terms of its agreement with Austin which provides, in effect, that plaintiff should aid Austin in financing sales of automobiles by purchasing from him notes given therefor, agreeing that ho would indorse and guarantee the payment of all such notes, and alleges that the note sued on was executed and taken under said contract. Plaintiff denied that it had ever maintained an office in Texas, that the contract with Austin was entered into in Pennsylvania, and the note sued on was payable there.

On a trial to the court without a jury, plaintiff’s general demurrer to the plea in abatement was overruled, and, after a hearing upon the merits, the court sustained the plea in abatement and rendered judgment that plaintiff take nothing against the defendants.

Appellant’s first proposition is that, unless the truth of the plea appears of record, an answer that plaintiff has not legal capacity to sue must be verified.

This is an abstract proposition of law which, as stated, is not correct. It assigns no error committed by the court, and, of course, cannot be considered.

It is contended under this proposition that the court erred in overruling the appellant’s general demurrer to the plea in abatement, and that such ruling was error because the plea was not verified. Failure to verify a plea in abatement may render it subject to a- special exception. If the plea alleges facts sufficient, if true, to abate the suit, it would be good as against a general demurrer because.it is sufficient in substance. If the defendant fails to make oath to the plea, it is a matter of form required by the statute, and is a defect which can be challenged only by special exception. Unless it is specially excepted to for that reason, the defect is waived. A general demurrer will not reach it. Thompson v. Rutz (Tex. Civ. App.) 278 S. W. 333.

It is insisted by the second proposition that the trial court erred in sustaining Austin’s plea in abatement and dismissing the suit, for the reason that the burden of proof was upon Austin to establish the plaintiff’s legal incapacity to sue, and further because “no competent or relevant testimony or evidence was given by defendant to prove plaintiff’s legal incapacity and because the preponderance of the evidence showed that all transactions by the plaintiff in its acquisition of the note sued upon were in the nature of interstate transactions.”

This proposition is certainly not sustained by the record. The trial judge was not required to file findings of fact or conclusions of law, and we find none in the record.

The evidence shows that the appellant has its principal office and domicile in Philadelphia, Pa.; that a traveling representative came to Amarillo and selected E. A. Regal and his son and Mr. Prothro to represent it in Amarillo; that appellant’s representative was named Risner, and Prothro’s testimony is that Risner informed him that the Finance Corporation of America intended to finance Baker automobile dealers in Amarillo, and stated that, in order to facilitate the closing of loan arrangements for the protection of the company, a legal representative be appointed in Amarillo for the purpose of checking up credit risks, and that his company had found it to be a good policy to have two checks made on the credit risk on each deal; that he had already talked with Mr. E. A. Regal and agreed with him to engage in credit reporting for his company, and he wanted another man to check from another point of view and furnish information for his company; that Risner then agreed with witness Prothro for the latter to make credit reports covering each deal that his company financed, and that Risner furnished witness with written forms of procedure to be followed in making reports. The witness introduced a writing which is headed: “Credit reporting procedure,” which recites that “as early as possible in the progress of a deal the dealer will telephone to our local representative and give him the information contained in applicant’s statement. Our local representative will then telephone to our local credit report agent, who will make his investigation of the applicant.” According to Prothro the Baker Automobile Company went out of business and Risner came again to see witness with reference to financing retail sales of automobiles for the Auburn automobile, and stated to him that his company had the same arrangements they had on two previous occasions with Mi’. Regal to make credit reports.. Prothro stated positively that Risner was the representative of the Finance Corporation of America, and this testimony is not denied. It appears that Prothro is the attorney for the appellant, representing it in this litigation both in the trial court and in this court.

It appears from other testimony that Regal and Prothro were the local representative and local credit reporting agent, respectively, living in Amarillo and representing the appellant. The office of Regal & Son was the appellant’s office for all business transactions in Amarillo and surrounding territory, and its permanent records and files covering its transactions for two or three years were kept in that office. When sales were made by Austin, Regal as the representative of the company would sign the drafts given in pay! ment for the cars and prepare chattel mortgages and see that they were duly filed with the county clerk. Regal as an insurance agent would issue policies covering the sold automobiles payable to the appellant company in accordance with prior arrangements made with the company. He signed the papers necessary to be executed in selling cars as the local representative of the appellant and had his son, young Regal, go to Austin’s place when they first commenced dealing with Austin, and check up the cars on hand'. Both Regal and Prothro had all the necessary blanks furnished them by the' appellant, which blanks were distributed to ear dealers and used in carrying on the business. Regal finally approved the papers evideno ing the sales of cars sold by Austin, and the testimony tends strongly to show that the insurance company which Regal represented and in which the sold cars were insured was owned or controlled by the appellant company.

Prior to January 1, 1930, the approval of all deals was made at appellant’s home office in Philadelphia. This was unsatisfactory to Austin, as it delayed the consummation of many of his sales, and the parties arranged that after January 1, 1930, approval of sales was to be made by Regal as local representative in Amarillo. Under the new arrangement, Regal prepared the papers in his office, including the chattel mortgages and insurance policies, and made drafts on the home office, and deals were immediately consummated, and he assumed the duty of seeing that the chattel mortgages were duly filed in the office of the county clerk.

The evidence further shows that many of the cars, including the one involved in this case, were repossessed by the appellant company and sold under the power of sale contained in the chattel mortgage, and that in such repossession and sale E. A. Regal, as the local representative of appellant, acted as appellant’s agent. It further shows that about forty transactions similar to the one involved in this suit were consummated by the parties and under the circumstances disclosed here.

In our opinion, this testimony is sufficient to sustain the holding of the trial court to the effect that appellant was transacting and soliciting business in Texas, and had established a special office in Amarillo with local representatives in .the prosecution of such business.

The third proposition is that agency cannot be proved by hearsay nor by parol testimony as to declarations made by an alleged agent nor by unauthorized acts or conduct on the part of such alleged agent.

This is an abstract proposition of law, and assigns no error committed by the trial court.

This is also true of the fourth proposition, by which it is asserted that the right to sue upon a transaction of interstate commerce is not lost by a showing that the corporation has been engaging, without having a permit, in other transactions of an intrastate character.

If these propositions were entitled to consideration, a sufficient answer thereto would be that the trial was before the court without a jury, and, while the record may show that some irrelevant and immaterial testimony was elicited, there is legal and competent testimony sufficient, aside from the statements of appellant’s counsel made from the witness stand under oath, that appellant was transacting business contrary to R. S. art. 1529 et seq., and that under the express provision of article 1536 it was not entitled to maintain this suit.

The judgment of the trial court is therefore affirmed.


author: BARCUS, J.

text:
    COLLINS v. DAWSON.
    No. 1235.
    Court of Civil Appeals of Texas. Waco.
    Oct. 13, 1932.
    Rehearing Denied Nov. 25, 1932.

      Collins & Houston, of Dallas, for appellant.
    Harry P. Lawther and Alex Pope, both of Dallas, for appellee.
   BARCUS, J.

In May, 1929, appellee notified appellant that T. L. Bradford and T. W. Vardell owned 10,500 shares of stock in the Southwestern Life Company, which was a majority of the stock in said company; that same was for sale at approximately $700 per share. Thereupon appellee and appellant undertook the sale thereof, and as a result said stock was sold for more than $7,000,000.

It appears that Vardell and Bradford, the owners of the stock, were the clients or customers of appellee, and that appellee associated appellant with himself for the purpose of selling said stock. At appellant’s request ap-pellee left the details of the selling and the negotiations leading up to same to appellant. The stock was sold to the Missouri State Life Insurance Company, and a short time before the sale was consummated appellant informed appellee that he would not expect any commission if the sale went through, but that his remuneration would be his employment in the new company as one of its active officers on a salary of $50,000 per year, and he told ap-pellee that he could get him $10,000 if he would accept it in full payment of services rendered. This appellee declined. Appellee then' notified all parties at interest that if the sale was consummated he would expect a commission of $10 per share. After the sale was consummated it was found that appellant, by reason of other connections, could not accept an office in the insurance company which purchased the stock. In order to compensate appellant for the services he had rendered in consummating the deal, Vardell and Bradford each agreed to pay him $25,000. Before any of said money was paid to appellant, appellee instituted suit against Var-dell and Bradford in his individual name for the total commission which he claimed was due on the sale of said stock. Vardell then made an agreement with appellant to pay $30,000; $10,000 thereof to be paid appellee Dawson, and $20,000 to appellant Collins, provided he could get a release signed by both appellant and appellee releasing him, Vardell, from further liability to either of the parties. This agreement was carried out, and appellee received from Vardell $10,000, and dismissed his suit against Vardell, and appellant received $20,000 from Vardell; Thereafter Bradford paid appellant $20,000 and took a receipt from him for any claim he, appellant, might have for services rendered in consummating the sale of the stock.

Appellee prosecuted his suit against Bradford and collected from Bradford, as a result of said litigation, $15,000. Appellee paid his attorneys one-third of the amount received from Vardell, and one-half of the amount received from Bradford. Thereafter appellee instituted this suit against appellant to recover one-half of the $40,000 which the appellant had collected from Vardell and Bradford. Appellant in his answer contended that appellee had no interest in said $40,000; that same was not paid to him as a commission, but was paid to him by Vardell and Bradford as a gift showing their appreciation of his services. He further claimed that appellee by having filed suit against Vardell and Bradford waived any right he might have had to sue for any interest in said money, and contended that appellee was estopped by his actions froffii recovering anything against him, appellant. Appellant further by cross-action asked for an accounting between himself and appellee, alleging that it was necessary for him to apd he did spend $1,000 in expenses in consummating the deal, and that he had to employ one Trimble to assist him, and had paid Trimble $20,0(30 of the $40,000 which he had received, and alleged that appellee was indebted to him for $10,250, for which he asked judgment against appellee.

In response to special issues, the jury found that appellee associated appellant with him in the sale of the stock, and that as a result thereof appellee collected commissions totaling $40,000 from Bradford and Vardell for negotiating the sale of the stock, and that ap-pellee was entitled to one-third thereof. It found that appellee did not agree with appellant to terminate his association with him for the sale of said stock. It found that appellant did not pay Trimble $20,000 of the $40,-000 he received as commissions. It found that appellant spent $1,000 in consummating the sale, and that same was a reasonable chax’ge. It found that appellant was not entitled to receive any part of the money which appellee had collected from Vardell and Bradford. Based on said findings, the trial court deducted the $1,000 expenses from the $40,000 which appellant had collected, and gave appellee judgment for one-third of the remaining $39,-000, with 6 per cent, interest from the date appellant had collected same.

By its first four propositions, appel-. lant contends the trial court erred in not instructing the jury to return a verdict for it, on the theory that appellee was not entitled to recover' because his association with appellant, if it ever existed, had been terminated by mutual consent before he received the $40,-000 compensation, and because he was estop-ped to recover since he failed in this suit to tender to him, appellant, one-half of the commissions which he, appellee, had received; and further, that by having brought suit against Vardell and Bradford he had elected a remedy which, in effect, barred him from recovering in this suit. We overrule all of these propositions. Under the testimony we think appellant and appellee were partners or at least engaged in a joint enterprise in the sale of the stock in question and were to share whatever commissions were paid by virtue of any sale thereof; Under said agreement, either appellee or appellant could have collected all or any portion of the commission due by Bradford and Vardell, and, if paid in good faith, the partnership would be bound. Appellant, by his actions as revealed from the record, was claiming that he did not collect any commission, but that the $40,000 paid him was a gift which Vardell and Bradford ¡paid him as a thank offering for the services he rendered, and that appellee was not entitled to participate therein. As we view the record, whatever amount appellant received either as a reward or as commission was collected by him for the joint use and benefit of him and appellee. He could not, after the transaction was closed, or after the negotiations had begun which ultimately resulted in the sale being made, repudiate his contract with appellee and thereby deprive appellee of his interest in whatever money he, appellant, might collect in the way of commissions or rewards for having consummated the sale.

Appellant and appellee, in so far as the transaction in controversy was concerned, were either partners or engaged in a joint en-teriKise for the purpose of selling the stock owned by Vardell and Bradford in the life insurance company. Each of them was entitled to a portion of the emoluments derived therefrom. It is a well-settled principle of law that one partner can collect all or any portion of any money payable to the partnership, and, if he collects all of the money due from any debtor, his receipt therefor binds the partnership. Whatever money he does collect, however, unless the other partners waive same, inures to the benefit of the partnership. It is equally true that where a debt- or pays one partner a part of a partnership debt, in a suit therefor against him by the partnership or any member thereof, he is entitled to a credit for the payments he has made. Whether the suit brought by Dawson against Bradford and Vardell should have been abated because all members of the partnership or joint enterprise did not join in said suit is not a question before us. The fact that one partner collects a portion of a debt due the partnership does not, we think, bar or preclude him from participating in the funds collected by another partner from the same debtor. A partial payment to one of the partners of a part of a debt due by a person to a partnership does not thereby cancel the remaining portion of the debt or prevent the other members of the partnership from collecting same.

Appellant complains of the action of the trial court in submitting the issue to the jury as to whether appellee associated appellant with him in the sale of the 10,500 shares of insurance stock, on the theory that the issue assumed that appellee had authority to sell said stock. We overrule this proposition. It is immaterial whether appellee had such authority at the time he associated appellant with him for the purpose of selling said stock, if as a matter of fact he thereafter got the permission from the owners thereof, and if as a matter of fact as a result of the joint efforts of appellant and appellee a purchaser for said stock was found with whom the owners of the stock contracted, and as a result thereof paid a commission.

Appellant complains of the issue submitted by the court to the jury as to whether he paid Trimble $20,000 of the money he received from Vardell and Bradford, on the theory that there was no evidence to the contrary. We overrule this proposition. Trimble and appellant each testified at length relative thereto, and there was such a variance in their testimony and same was do confusing that the jury was authorized to find that appellant, as a matter of fact, did not pay Trimble said sum of money as a commission for his having assisted in the sale of said stock.

Appellant complains of the action of the trial court in submitting to the jury the issue to determine what per cent., if any, of the $40,000 which appellant collected appellee was entitled to recover, on the theory that said issue did not require the jury to take into account any credits that he, appellant, might be entitled to under the evidence and other issues submitted. We overrule this contention. The trial court submitted other issues for the jury to determine the amount of credits, if any, appellant was entitled to recover either as a basis for a judgment by appellant against appellee on his cross-action, or as a credit on any amount that the jury might find appellee entitled to recover from appellant. The trial court allowed as an offset to appellee’s recovery all of the credits which the jury found appellant was entitled to.

Appellant contends that the answers of the jury that appellee was entitled to only one-third of the $40,000 which he, appellant, had collected and that he, appellant, was not entitled to any portion of the money which appellee had collected, are without support in the evidence. The fact that appellee did not recover the amount he claimed to be due him from appellant would not authorize this court to reverse the judgment on the complaint of appellant. With reference to appellant’s claim for a portion of the funds collected by appellee, the record shows thát appellant informed appellee prior to the time he instituted his suit against Yardell and Bradford that he, appellant, had no claim against said parties and would not join in any litigation, and the record shows that appellant appeared as a witness testifying on behalf of and at the request of Bradford in said suit. The jury was authorized to find under the evidence that appellant claimed no interest in said litigation and had released Yardell and Bradford from any claim he had, and had relinquished and released to appellee any and all sums of money that might be recovered in said litigation. As a matter of practical application, after deducting the amount which appellee was required to and did pay his attorneys, each of the parties received practically the same amount. Under the record in the case, a judgment for appellant and appellee jointly against Vardell and Bradford for a 5 per cent, commission on the $7,000,000 sale would have found support in the evidence, and each of the parties would have been entitled to their respective interests. Either party- could relinquish his claim for his pro rata part, but could not relinquish the claim of the other parties or his partners therein.

We have examined all of appellant’s propositions, and same are overruled.

The judgment of the trial court is affirmed.


author: PEE CURIAM.

text:
    STERLING et al. v. WILLIFORD et al.
    No. 1372.
    Court of Civil Appeals of Texas. Waco.
    Oct. 27, 1932.
    C. S. Bradley, of Groesbeck, and T. S. Christopher, of Austin, for appellants.
    Williford & Williford, of Fairfield, for ap-pellees.
   PEE CURIAM.

This is an appeal from an order entered by the judge of the Seventy-Seventh judicial district court of Freestone county. C. N. Willi-ford and others presented their petition to said judge, in chambers, complaining of Governor Ross S. Sterling, James Y. Allred, Attorney General, L. G. Phares, chief of the highway patrol, the members of the highway commission, and J. R. Session, sheriff of Freestone county, in which plaintiffs allege that they are each engaged in farming and raising cotton for sale and in buying cotton at Fair-field and other points and transporting and shipping same by trucks owned by them from Fairfield to Houston, Tex.; that Fairfield is not served by any railroad nor common carrier; that the nearest railway station is at Teague, but that ‘the highway from Fairfield to Teague is undergoing repair and is closed to traffic and cannot be used, and that it will not be in condition to 'be so used for a period of at least ninety days, which will include the entire cotton shipping season of the year 1932. The plaintiffs alleged that Houston is the nearest deep water port from Fairfield where cotton can be marketed and exported; that plaintiffs are the owners of certain trucks, and have been engaged in the business of transporting cotton by trucks from Fairfield to Houston for a number of years, and that they will suffer irreparable injury unless they are permitted to so move their cotton to market ; that the plaintiffs haul more than 7,000 pounds of cotton at a load, and that such trucks cannot be operated economically in the transportation of cotton by hauling smaller loads; that the defendants, under and by virtue of the provisions of the Acts Forty-.Second Legislature, Regular Session, c. 232, p. 607 (Vernon’s Ann. P. G. art. 827a, § 1 et seq.), are interfering with the plaintiffs, and will not permit them to haul more than 7,000 pounds at a load over the public roads of the state, and that the plaintiffs will suffer irreparable injury unless they are allowed to so use their trucks. The plaintiffs allege that section 5 of said act (Vernon’s Ann. P. O. art. 827a, § 5), which prohibits the operation of a truck on the public highways of this state with a load of more than 7,000 pounds, is unconstitutional because it violates article 1, § 19, of the Bill of Rights of the Constitution of the state of Texas and article 14, § 1, of the Amendments to the Constitution of the United States. They prayed that the defendants be enjoined from interfering with the plaintiffs, their agents and servants in the operation of their trucks in transporting cotton from Fairfield and other points to Houston in loads in excess of 7,000 pounds.

The trial court, in chambers, without notice or a hearing, granted the injunction as prayed. The defendants appealed.

We do not deem it necessary to discuss at length the question of whether section 5 of the act in question is constitutional. This section was held to be valid by the Supreme Court of the United States in the case of Sproles v. Binford, 286 U. S. 374, 52 S. Ct. 681, 76 L. Ed. 1167, and likewise by our own Supreme Court in the cases of Ex Parte W. W. Sterling, 53 S.W.(2d) 294, and Ex Parte L. G. Phares, 53 S.W.(2d) 297.

The appellees seek to avoid the effect of the act in question by showing that they come within the exemption provided in section 5(b) thereof (Vernon’s Ann. P. O. art. 827a, § 5(b), which provides that the limitation of 7,000. pounds per load as provided for in section 5 of the act shall not apply to motor vehicles when such vehicles are used only to transport property from point of origin to the nearest practicable common carrier receiving or loading point. Their contention is that, while Teague is ordinarily the nearest practicable common carrier receiving or loading point to Fairfield, since the road from Fairfield to Teague is closed to 'traffic, the ap-pellees must of necessity haul their cotton to Houston, and in so doing they should not be limited to a 7,000-pound load. Section 5(b) of the act extends the exemption only “to vehicles when used only to transport property from point of origin to the nearest practicable common carrier receiving or loading point or from a common carrier unloading point by way of the shortest practicable route to destination, provided said vehicle does not pass a delivery or receiving point of a common carrier equipped to transport such load, or when used to transport property from the point of origin to point of destination thereof when the destination of such property is less distant from the point of origin thereof than the nearest practicable common carrier receiving or loading point equipped to transport such load. * * *” The appellees allege that Houston is “the nearest deep water port to Fairfield where cotton may be marketed and exported,” but they do not allege that Houston is the nearest practicable common carrier receiving or loading point nor that such trucks in going from Fairfield to Houston do not pass a receiving point of a common carrier equipped to transport such load, nor that the distance from Fairfield to Houston is less than the distance from Fairfield to the nearest practicable common carrier receiving or loading point equipped to transport such load. The petitioners therefore did not bring themselves within the exemption provided for in section 5(b) of the act.

Since the appellees did not allege in their petition any valid ground entitling them to the injunction, the judgment of the trial court is reversed and the injunction dissolved.


author: PER CURIAM.

text:
    PHARES et al. v. EMERSON.
    No. 1344.
    Court of Civil Appeals of Texas. Waco.
    Oct. 27, 1932.
    Mr. & Mrs. C. S. Bradley and J. E. & B.' L. Bradley, all of Groesbeck, and Elbert Hooper and T. S. Christopher, both of Austin, for appellants.
    M. E. Gates, of Huntsville, for appellees.
   PER CURIAM.

This is an appeal from an order entered by the judge of the Seventy-Seventh judicial district court granting a temporary writ of injunction. On July 26, 1932, B. O. Emerson and G. C. Emerson presented to said judge, in chambers, their petition complaining of L. G. Phares as the chief of the highway patrol, all highway patrolmen, all licensed inspectors and public weighers, all sheriffs and constables of the state of Texas, many of whom are named, and many others, in which petition it was alleged that the plaintiffs were the owners of certain trucks and trailers used in connection therewith and were licensed to and were engaged in the business of hauling freight for hire over the public roads of this state and desired to continue in such business ; that the defendants had prevented and would continue to prevent these plaintiffs from hauling loads of more than 7,000 pounds over the roads of this state, unless an injunction was granted. They presented two specific grounds for the granting of the writs, to wit, first, that section 5 of House Bill 336, chapter 282, page 507, Acts Regular Session 42d Legislature (Vernon’s Ann. P. O. art. 827a, § 5) which makes it a violation of the law for any motortruck or trailer to transport loads over the roads of this state in excess of 7,000 pounds, is unconstitutional and void because said act is discriminatory, in that it applies to motortrucks only, and further because such trucks cannot be operated at a profit by hauling loads of less than 7,000 pounds, and plaintiffs’ vested right to so use their trucks will be destroyed if such law is enforced; and, second, because the district judge in Upton county had theretofore granted a temporary writ of injunction in favor of certain other truck owners against the same defendants restraining said defendants from enforcing said law as against the' plaintiffs named in the Upton county suit, and said plaintiffs therein, as the result of the granting of said writ, are being allowed to haul truck loads of more than 7,000 pounds on the public roads of this state, and are thereby given an exclusive privilege not enjoyed by these plaintiffs, and that this constitutes an unjust discrimination against these plaintiffs who are engaged in the same line of business.

The trial judge, in chambers and without notice or a hearing, granted the writs of ⅛-’ junction as prayed. It was ordered that said writs should remain in force so long as the injunction granted in the Upton, county case should be in force. The reason given by the trial judge for granting the writs, as stated in his fiat, was that, so long as the writs of injunction remained in force in the Upton county case, the plaintiffs in that suit would enjoy an unjust and unequal privilege, and it would be an inequitable discrimination against the plaintiffs herein unless they were granted a like writ. The defendants duly appealed from the order granting the temporary writ.

We do not deem it necessary to discuss at length the question of whether section 5 of the act in question is constitutional. This section was held to be valid by the Sppreme Court of the United States in the case of Sproles v. Binford, 286 U. S. 374, 52 S. Ct. 581, 76 L. Ed. 1167, and likewise by our own Supreme Court in the eases of Ex parte W. W. Sterling, 53 S.W.(2d) 294, and Ex parte L. G. Phares, 53 S.W. (2d) 297.

The fact that the district judge in Upton county had previously granted a like writ to other truck owners against the same defendants and that such plaintiffs in the Upton county case thereby obtained a privilege not enjoyed by plaintiffs herein, was not a sufficient reason for granting the injunction in -this case. If the plaintiffs in the Upton county ease showed good cause for the issuance of an injunction, they were entitled to the writ; but this would not entitle others, tho'ugh engaged in the same line of business, to a like writ, unless they alleged good grounds therefor independent of the allegations that their competitors had been granted a similar writ. Each plaintiff, in presenting his petition to the court, must allege his own grounds for recovery, and cannot rely on the mere allegations that others engaged in the same line of business have either legally or illegally obtained such relief. To hold that the granting of the writ of injunction in the Upton county case had the effect to confer upon all other truck owners a right to a similar writ would be giving to the Upton county judgment a greater effect than was intended thereby. This same proposition was presented to the Supreme Court as ground for sustaining the injunction in the case of Ex parte W. W. Sterling, 53 S.W.(2d) 294, but was there overruled. Moreover, since the granting of the writ in this case, the Supreme Court has held that the writ of injunction in the Upton county case was improperly granted. Ex parte L. G. Phares (Tex. Sup.) 53 S.W.(2d) 297.

In order for a court of .equity to restrain the enforcement of a criminal law, two facts must appear, viz., first, that the law is unconstitutional and void; and, second, that its enforcement constitutes a direct invasion of a vested property right of the complainant. The appellees have no vested right to use the public roads to haul freight for hire, and the statute, the enforcement of which they seek to enjoin, is not unconstitutional. Box v. Newsom (Tex. Civ. App.) 43 S.W.(2d) 981, and cases there cited; Ex parte W. W. Sterling (Tex. Sup.) 53 S.W,(2d) 294.

Since the appellees did not allege in their petition any valid ground entitling them to the injunction, the judgment of the trial court is reversed and the injunction dissolved.


author: JONES, O. J.

text:
    CLARK et al. v. TABERS, Inc.
    No. 11071.
    Court of Civil Appeals of Texas. Dallas.
    Nov. 5, 1932.

      J. P. Rice and W. J. Rutledge, Jr., both of Dallas, for appellant.
    Mike T. Lively and E. E. Kueera, both of Dallas, for appellee.
   JONES, O. J.

In a suit in the county court of Dallas county at law No. 2, appellee recovered judgment against appellant, Mrs. Martha Mildred Clark, in the sum of $725, with interest at 6 per cent, per annum from date, from which judgment this appeal is duly prosecuted. The term “appellant” will refer to Mrs. Clark, as her husband, W. H. Clark, Jr., is only a pro forma party. The following are the facts:

On April 25, 1929, appellant was a single woman living with her father and mother, Dr. and Mrs. Whitfield Harrell. On such date, and for many years previous thereto,- ap-pellee had operated in the city of Dallas a retail jewelry store, and Dr. Harrell, with members of his family, were general customers of the store. Some days previous to such date, appellant had visited appellee’s store for the purpose of having repairs made on an article of jewelry. ■ While in' the store, a clerk, by the name of Harris, noticing a bracelet with a diamond setting worn by appellant, showed her a platinum brooch set with diamonds, which matched the bracelet, and wanted her to purchase same. Appellant was very much pleased with the brooch, which was priced at $875, but declined its purchase. On the date above given, appellant returned to the store to get the article of jewelry that had theretofore been left for repairs and was waited upon by Eugene. Taber, one of appellee’s officers. Ta-ber had been informed by Harris that appellant was very much pleased with the brooch previously shown her, and the brooch was again brought from the stock for the purpose of renewing the offer of sale. The-result of this attempted sale was that it was agreed that appellant should take the brooch home with her and show it to her father, Dr. Harrell, to ascertain if he would consent to its purchase. That evening, when Dr. Harrell was approached on the subject, he declined to examine the brooch and refused to consent to its purchase.

Harris, appellee’s clerk, who first discussed with appellant thé purchase of the brooch, died suddenly on the night of April 24, 1929, the night preceding the day the brooch was delivered into the possession of appellant. In consequence of his death, appellee’s store was closed on the forenoon of April 26, 1929, the day of the Harris funeral, and was not opened until some time early in the afternoon, but was open for business from about 2 p. m. until closing time. Including the three officers, there were about fourteen employees in appellee’s store. Appellant was only acquainted with Messrs. Eugene Taber, Hugh Taber, Miss Eidola Taber, and the deceased, Mr. Harris. The other employees she did not know. It had been the custom of this store to make sales of goods to members of Dr. Harrell’s family, and charge same to him. The sales theretofore made and charged had been of small price compared to the sale price of this broqeh.

On the day following the taking home of the brooch by appellant, she went in her ear in the forenoon to Baylor Hospital to visit her mother, then a patient in such institution, and showed her the brooch which she carried with her pinned on her dress. After she visited her mother, appellant drove down town to fill an engagement to serve tea at the Junior League, between the hours of 11 a. m. and 2 p. m. At the close of her services at this place she was joined by W. H. Clark, Jr., to whom she was then engaged to be married, and about 2:15 p. m. they went to the garage, secured appellant’s car, and Clark drove the car to the front of appellee’s place of business, the car standing somewhat in the street from the curb, in front of the store. Appellant alighted from the car, went into the store, where she saw only one'person, described as a middle-aged man of medium size, a brunette, wearing glasses, who, stood behind a sales counter some little distance from the front of the store. She did not see any of the Tabers in the store at this time, nor any other person. The Messrs. Taber usually left the store for lunch at about 2 p. m. She informed the person thus described that she had come to return the brooch that she had carried from the store the day before, for what resulted in a futile effort to secure her father’s consent to its purchase, delivered the brooch to this person, and requested him to tell Mr. Eugene Taber of the fact of its return. She immediately returned to the car and was driven home. This is appellant’s testimony as to the delivery to appellee of the brooch, and it is corroborated by Mr. Clark in all respects, except as to the conversation had with the person to whom the brooch was delivered. Mr. Clark did not see this person, nor did he hear the conversation. Appellant’s deposition was taken in' this case in a law office, and a number of appellee’s employees were paraded before her, but she refused to attempt to identify the employee to whom she gave the brooch, because she was uncertain that she could be positive in any such identification, and did not desire to reflect on any one, unless she could be positive in her identity. The brooch was never replaced in appellee’s stock, and was never found. A number of the employees attended the Harris funeral, but had returned at the time the store opened in the afternoon.

It is a reasonable inference, and we find it as a fact, that all parties to the transaction considered the matter a closed incident; ap-pellee believing that Dr. Harrell, because of the supposed retention of the brooch by appellant, had consented to its purchase and that the sale of the brooch for $875 had been made; appellant and Dr. Harrell believing that the brooch had been returned to and accepted by appellee, as ending negotiations for its sale. This status of. the .parties remained until the early days of June, when a bill for $875, covering the purchase price of the brooch, was sent to Dr. Harrell. No payment was made, on the ground that the brooch had not been purchased, but had been returned. Mrs. Harrell and appellant had conversations with the Tabers, in which the facts from their standpoint were set forth. The Tabers 'denied that the brooch had been delivered to any of their employees, and that by reason thereof claimed that the bill should be paid. City detectives and a private detective agency were consulted, the first by Mr. Clark, acting for appellant, and the second by appel-lee, but no report was ever made to any person in reference to the result of any investigation by such detectives.

The suit was instituted by appellee, after the marriage of appellant to Mr. dark, against Dr. Harrell and appellant, Mrs. Clark, and against her husband, W. H. Clark, Jr., as a necessary pro forma party. Plaintiff sought recovery, first, on the ground that a sale of the brooch had been .made and that Dr. Harrell, because of the custom theretofore followed by appellee and acquiesced in by Dr. Harrell, was liable for the purchase price, and also against appellant as the direct purchaser of the brooch. An alternative plea alleged, in effect, the delivery of the brooch on a conditional sale, the condition being that the father, Dr. Harrell, should give his consent thereto; that having thus obtained possession of the brooch, it was wrongfully and unlawfully applied to their use and benefit, and that they were thereby guilty of conversion of same; that its reasonable market value at the time of its conversion was $875.

Appellant and Dr. Harrell defended on the ground that the brooch had been delivered to appellant, on the insistence of appellee, for the purpose only of securing the consent of her father to its purchase, that her father declined to consent to its purchase, and that it was returned to appellee, or to some one appellee had clothed with apparent authority to accept the brooch, and that there was neither a sale of the brooch to them, nor its conversion by them.

The case was tried to a jury, and, there being no evidence to raise any issue of liability against Dr. Harrell, either for the alleged purchase price of the brooch or for its reasonable cash market value, at the time of its alleged conversion, the court properly gave peremptory instruction to the jury in his favor. There was no evidence raising an issue as to appellant’s liability as a purchaser of the brooch, and hence no issue on this phase of the case was submitted. The issue of appellant’s liability for the reasonable cash market value of the brooch, on appellee’s alternative plea of conversion, was submitted to the jury in the form of ’special issues, and, a verdict on such issues being returned favorable to appellee, the judgment above described was entered.

Appellant contends that the court was in error in refusing peremptory instruction in her favor, on the ground that the evidence conclusively shows that she had returned the brooch to appellee. To this contention we cannot agree. It is true that there is no direct evidence contradicting appellant’s affirmative and' positive evidence that she did return the brooch to some one in appellee’s store, who apparently was a clerk, and as such authorized to receive it for appellee. There were no questions asked by appellant as to whether he was an employee, but, seeing him in a position behind the counter, appellant assumed that he was a clerk or salesman connected with the store. Appellee, through its officers, gave affirmative testimony that no person of the description given by appellant of the one to whom she gave the brooch was employed in any position in the store. Appellee’s three executive officers, all of whom worked in the store, and two of the employees, each testified that the brooch was not returned to either of them; the other employees were not called as witnesses. This evidence is sufficient to raise an issue as to the return of the brooch to an agent or employee of appellant, or to some one who had been permitted by appellee to be in the position in its store of an apparent employee. The assignment of error on this issue is overruled.

Appellant also contends that, under the evidence in this case, she was only a gratuitous bailee of the brooch, when it was delivered into her possession. To this we cannot agree, for the reason we believe the evidence of both appellant and appellee shows that the bailment was for the mutual benefit of both parties, and hence not a gratuitous bailment. On the one hand, appellee delivered possession of the brooch to appellant in an effort to consummate its sale, and to receive the benefit derived therefrom; on the other hand, appellant received possession of the brooch in the hope that she could secure the consent of her father to make the purchase, and to receive the benefit that would come to her from the purchase of the diamond brooch, which it appears she very much desired. The bailment had its origin in the combined effort of the two parties to consummate the sale of the brooch to one of them for the benefit of both, and is a bailment for the mutual benefit of the bailor and the bailee. Citizens’ National Bank of Jasper v. Ratcliff & Lanier (Tex. Com. App.) 253 S. W. 253, and authorities therein cited;' 3 R. C. L. 94. The assignment of error on this issue is overruled.

The question as to whether there was prejudicial error to appellant, in the manner in which the special issues were submitted to the jury, is a more serious one. This manner of submission was duly excepted to by appellant, and error is duly assigned on the action of the court in overruling such exceptions, and submitting the issues as framed. These issues are:

“(1) Do you find from a preponderance of the evidence that defendant Martha Mildred Clark, failed to return the diamond brooch involved herein to Tabers, Inc., its agents, servants or employees?
“(2) Do you find from a preponderance of the evidence that defendant, Martha Mildred Clark, failed to exercise ordinary care in the matter of returning the diamond brooch involved herein to Tabers, Inc.?”

To each of these issues the jury returned an affirmative answer, and the judgment decreeing appellee’s liability for the reasonable market value of the brooch was determined by this verdict.

Under the first issue, the jury could have believed, under the evidence, that appellant returned the brooch to a person in appellee’s store in a position of apparent authority to receive same from her, but, because they further believed that such person was neither actually an agent, servant, or employee of appellee, would be compelled to answer such issue in the affirmative, thereby requiring appellant to reap the consequences of appellee’s action in allowing a person to be in the position of an employee in its store, though not actually so engaged. Appellant’s pleading raised the issue of the brooch being returned to appellee’s store to one apparently in its employ. The evidence of appellant tended to support such issue made by the pleading, and it was error for the court to overrule appellant’s objection, and not to frame special issue No. 1 so as to include an apparent agent or employee, as well as an actual agent or employee.

Issue No. 2 is not responsivé to any pleading by appellee, and .hence the negligence of appellant as to the return of the brooch cannot be made an independent basis for recovery. Appellee seeks recovery only on two grounds: (1) That there was a sale of the brooch for $875; and (2) in the alternative, that there was a, wrongful conversion of the brooch by appellant, rendering her liable for its reasonable cash market value. The duty, however, rested on appellant, when she undertook to return the brooch, to exercise ordinary care to make such return to an authorized agent or employee of appellee. In view of appellant’s duty in this respect, and in view of her pleading to the effect that she returned the brooch by surrendering it either to an actual or apparent employee of appel-lee, if the court had included an apparent employee in the submission of special issue No. 1, we are of the opinion that the submission of the issue of negligence on the part of appellant, as an answer to her affirmative defense, that the brooch was returned to an apparent employee of appellee, would have been proper, but such submission should be restricted to the particular act of negligence in returning the brooch to such apparent employee, and should not be given in the general term used by the court in this issue.

Appellant complains that there is no proper evidence before the court to enable the jury to determine the reasonable market value of the brooch at the time it is alleged to have been converted. We overrule this assignment of error, for we think the evidence of Eugene Taber, as to the value of this brooch, as well as to the costs of material and labor that went into its making, clearly authorizes the finding of the jury on the market value. Taber testified that it was of the reasonable value of $875, the price asked for it. He further testified that the material entering into the mailing of the brooch cost something oyer $600.

Appellant raises in her pleading the issue of the negligence of appellee in not earlier notifying appellant that the brooch had not been returned. We believe the evidence raises this issue. The undisputed evidence shows that not even a conditional sale of the brooch had been made when it was delivered to appellant. Before a sale could be consummated, it was understood that Dr. Harrell would have to make the purchase by agreeing to accept the brooch for appellant, and to become responsible for the purchase price of $875. Without receiving any word from appellant or Dr. Harrell, appellee waited approximately six weeks without having made any inquiry as to whether a purchase was to he made, and then sent a bill to Dr. Harrell for $875, on the assumption that the purchase had been made. No issue on this question was submitted to the jury, and none requested by appellant.- AVe have only suggested that such issue is raised by the evidence, in view of another trial of the case.

It is therefore our opinion that this case must be reversed because of the errors above pointed out, and a new trial had in conformity to the views herein expressed. The judgment in favor of Dr. Harrell is not disturbed by this reversal.

Reversed and remanded.