author: HALL, C. J.

text:
    MILLER et al. v. STATE.
    No. 3895.
    Court of Civil Appeals of Texas. Amarillo.
    Oct. 19, 1932.
    Rehearing Denied Nov. 2, 1932.
    See, also, 53 S.W.(2d) 790.
    Bartlett, Thornton & Montgomery, of Dallas, for appellants.
    James Y. Allred, Atty. Gen., R. G. Waters and Neal Powers, Asst. Attys. Gen., and R. D. Oswalt, of Crowell, for the State.
   HALL, C. J.

From the record before us it seems that this case has been tried in the court below and is here on appeal as an agreed case under R. S. art. 2177. While the record does not in all things comply with the statute and the rules governing the procedure in such cases, these defects will be waived and the appeal considered.

It appears that the appellant Miller was elected tax collector of Foard county, assuming the duties of the office on January 1, 1929, and that he was re-elected in 1930 and qualified for his second term January 1, 1931, and served until September 1, 1931. His first official bond, with the American Surety Company of New York as surety, was duly executed and filed January 1, 1929. His second bond was duly executed and filed on January ,1, 1931. The bonds are identical in their provisions, except as to dates and amounts, and both contain the following condition: “If the said Que R. Miller shall well and faithfully perform all the duties of his office as collector of taxes for and during the full term for which he was elected, then this obligation shall be null and void; otherwise to remain in full force and effect.” Certified copies of the bonds are made parts of the record, which contains these further material facts, briefly stated: The first bond is in the sum of $14,-760; the second is in, the sum of $16,554.-80. It is further .stipulated that Miller acted as tax collector from January 1, 1929, until about September 1, 1931, and during said period accounted to the state of Texas for all taxes, penalties, and interest collected by him prior to December 1, 1930. That from December 1, 1930, until be ceased to act, be collected as taxes, penalties, and interest due tbe state of Texas, tbe sum of $19,213.84. That subsequent to December, 1930, be deposited in tbe Bank of Crowell (tbe legally selected depository of Board county),1 to bis credit as collector, tbe sum of $15,037.59. That tbougb legal demand bad been made therefor, be bad failed and refused to pay over to tbe state of Texas and tbe treasurer thereof said "taxes, penalties, and interest, the sum of $16,720.83 which be bad eollected. That of such sum $3,334.-22 represents taxes, penalties, and interest due tbe state collected by him in December, 1930, and the sum of $13,386.61 represents taxes, penalties, and interest due tbe state which be bad collected during tbe first eight months of tbe year 1931, “unless tbe ■depositing of $15,037.59 in tbe county depository hereinbefore mentioned constitutes a remittance and a paying over of such funds to tbe extent of tbe amount so deposited to tbe proper officials of the State of Texas.” It is further stated that tbe account of Miller as tax collector in tbe county depository as of July 20, 1931, was overdrawn in tbe sum of $6.12. That on said date tbe depository bank closed its doors and has since ceased to do business, and since said time Board county has no designated county depository, and no further deposits were made by Miller as tax collector in any banking institution, and that there is now no fund on deposit in any bank or elsewhere out of which tbe state of Texas can satisfy its claim against Miller.

Tbe suit was filed in Board county and by agreement tbe venue was changed to Wilbarger county.

Based upon the agreed ease, the court rendered judgment against Miller and tbe American Surety Company of New York, jointly and severally, in tbe sum of $16,-720.83, decreeing that of such amount the sum of $3,334.22 should bear interest at 6 per cent, from January 1, 1931, and tbe remainder should bear interest at tbe same rate from January 1, 1932.

Brom this judgment the American Surety Company has appealed.

Tbe controversy is before us upon three propositions, as follows:

(1) Where state taxes have been deposited by the tax collector and accepted by tbe duly qualified depository as a deposit to bis credit as tax collector, as in this case, tbe depository becomes charged with tbe duty of paying tbe money, less tbe approved commissions, to tbe state treasurer and the surety on tbe collector’s official bond is no longer liable therefor;

(2) Tbe surety on a tax collector’s bond is not liable for money which be is permitted, by tbe official depository, to withdraw from his official account;

(3)Tbe judgment rendered against this appellant includes at least a part of tbe amount deposited by Miller in tbe county depository and' to that extent is without evidence to support it for tbe reason that there is no evidence that Miller was responsible for tbe deficit in bis official account.

This is not an action sounding in tort. Tbe state does not sue to recover money which has been embezzled or misapplied. Tbe suit is based upon tbe two bonds made by tbe tax collector which, as heretofore stated, bind him to faithfully perform all tbe duties of bis office as collector of taxes.

As said in State v. Middleton’s Sureties, 57 Tex. 185, tbe contract of tbe sureties upon a tax collector’s bond is that the collector shall pay in to tbe state treasurer either directly or indirectly all funds which be might collect and which under tbe law are so to be paid. Judge Stayton further said in that case that: “Tbe money in tbe bands of tbe collector is not bis money * * * he pays it over in tbe performance of bis duty, — tbe duty which tbe sureties have undertaken that he shall perform faithfully. * * * It is true, as argued, if tbe collector shall misapply tbe public funds, his sureties are responsible.” Tbe statutes of this state clearly and definitely set out tbe duties of tbe tax collector, and these statutes enter into and are necessarily a part of tbe contracts evidenced by tbe collector’s bond.

As said in 7 Tex. Jur. 86, § 24, tbe obligors in a bond executed pursuant to a statute are presumed to have known tbe terms of the statute and to have contracted accordingly. Tbe statute (see Rev. St. 1925, art. 7247) upon which such a bond rests and to which it relates becomes a part of the bond to the same extent as tbougb incorporated in tbe instrument and should be read into it regardless of the intention oí tbe parties.

R. S. art. 2549, relating to tbe selection of tbe depository for county funds, provides, in part, as follows: “It shall also be tbe duty of tbe tax collector of such county to deposit all taxes collected by him, or under bis authority, for the State and such county and its various districts and other municipal subdivisions, in such depository or depositories, as soon as collected, pending tbe preparation of bis report of such collections and settlement thereon. * * * ” Tbe article then provides for tbe accrual of interest on daily balances, that tbe bond of tbe depository should stand as security for all such funds, and proceeds as follows: “Upon such funds being deposited as herein required, 'the tax collector and sureties on his bonds shall thereafter be relieved of responsibility for its safe-keeping.”

The appellants insist that under the above-quoted provisions of the statute the depository is alone responsible for taxes which have been collected and deposited in accordance with the provisions of this article of the statute. We cannot assent to this proposition.

As held in State v. Harvey (Tex. Civ. App.) 15 S.W.(2d) 82, this article only requires the collector to deposit money as soon as collected pending the preparation of his monthly reports and payments to the officers of the state and county as directed by articles 7250, 7260, and 7261.

Also, the further provisions of article 7260 refute the contention of appellants. This article further prescribes the duties of the tax collector with reference to all sums which have been deposited by him.

Subdivision 1 of the article provides: “At the end of each month the tax collector shall * * * make an itemized report under oath to the Comptroller, showing each and every item of ad valorem, poll and occupation taxes collected by him during said month, accompanied by a summarized statement showing full disposition of all State Taxes collected.

Subdivision 2 provides: “He shall present such report, together with the tax receipt stubs to the county clerk, who shall within two days compare said report with said stubs, and if same agree in every particular as regards names, dates and amounts, he shall certify to its correctness. * * * ”

Subdivision 3 provides: “The tax collector shall then immediately forward his reports so certified to the Comptroller, and shall pay over to the State Treasurer all moneys collected by him for the State during said month, excepting such amounts as ha is allowed by law to pay in his county, reserving only his commissions on the total amount collected, and to enable him to do so, he may, at his own risk, send the same to the State Treasurer at the least cost to the State, on which he shall be allowed credit by the Comptroller upon filing receipt showing actual amount of exchange paid. The tax collector may, in making remittances of funds to the State Treasurer or any other State officer, board, commission or employee of the State, make the same by sending cash or a check on the county depository, if the funds are in the county depository, or if the same, in due course, are required to be in such depository. * * * If such funds are sent in cash, by registered letter, by post-office money order, express money order or by bank draft or bank check or depository check, in such event the liability of the persons sending the same shall not cease until the same money is actually received by the State Treasurer or the duly authorized State depository or other authorized officer in due course of business. The State Treasurer, whenever he may receive a remittance from a tax collector, shall promptly pay the money so remitted to the State Treasury, on the deposit warrant of the Comptroller, and the money when so' deposited shall be a credit to the said tax collector.”

There is nothing in the law which authorizes the selection of a depository for county funds which requires the depository ito make any remittance of said funds or any part thereof to the state treasurer or any other officer.

We believe, as suggested by appellee, that the enactment of the county depository law was to provide a place of deposit for moneys collected by the tax collector pending the preparation of his report and the remittance by him to the state treasurer. Prior to the enactment of the depository law, tax collectors were held responsible for all taxes collected by them without regard to the manner in which such funds were 1'ost; this rule being subsequently modified 'by relieving them of liability if the loss was the result of the act of God or the public enemy. By providing for a county depository which was required to make a bond for the safe-keeping of the funds intrusted to it, the Legislature sought only to relieve the tax collectors of liability pending the making of their report and a remittance to the proper officers mentioned in the foregoing statute.

The agreed case shows that at the time the county depository closed its doors and ceased to do a banking business, Miller’s account as tax collector was overdrawn $6.12. This does not indicate that the depository bank had embezzled or misapplied any of the funds.

Although Miller filed a cost bond, he has filed no brief in this case and does not question the right of the sítate to a judgment against him.

The provision in R. S. art. 2549, supra, that upon such funds being deposited the tax collector and sureties on his bond should thereafter be relieved of responsibility for its safekeeping, has no reference whatever to the duty of the tax collector to subsequently remit such funds to the state treasurer.

The contention of the appellants to the effect that the depository bank in permitting Miller to withdraw the funds for his individual use, released the surety on the collect- or’s bond, is without merit. The record does not show who withdrew such fund nor who is responsible for the money being withdrawn, nor was it necessary for the state to prove these facts.

With reference to this contention, it is said in 3 Oooley on Taxation (4th Ed.) 2707, § 1373: “In many cases it is made the duty of some auditing board or other authority to examine the collector’s accounts periodically, and come .to a settlement with him for previous collections. Undoubtedly all such boards or authorities should perform their duty, and give the sureties such benefit as might accrue to them therefrom; but the legal view of provisions of law imposing such duties is, that they are made, not for the protection of sureties, but of the public. The sureties undertake for the conduct of the principal, and cannot require the state to protect them against his misconduct or neglect. If, therefore, they suffer from neglects which are not only his neglects, but also those of some other public officer or board, the loss must be borne by themselves. If periodical settlements would tend to their advantage, they will be expected to look after them in their own interest.”

Miller contracted at his own risk to send the money to the state treasurer at the least possible cost to the state. The language of the article clearly implies that the remittance is to be made by the collector and not the depository bank and that the collector alone is to be credited with the amount of the remittance, when it is said the “State Treasurer, whenever he may receive a remittance from a tax collector, shall promptly pay the money so remitted to the State Treasury, on the deposit warrant of the Comptroller, and the money when so deposited shall be a credit to the said tax collector.” The liability of the collector and not the depository bank is also emphasized by this further language in the .statute: “The liability of the persons sending the same shall not cease until the same money is actually received by the State Treasurer or the duly authorized State depository or other authorized officer in due course >of business.” Prior to the enactment of the depository law the tax collector was an insurer, and such law modified his liability by relieving him of responsibility where the money was lost by the bank and such loss 'occurred without the fault of the collector. State v. Tyler County State Bank (Tex. Com. App.) 282 S. W. 211, 45 A. L. R. 1483. If the money was lost by the bank through no fault of Miller, that fact should have been pleaded and proven. Wilson v. County of Wichita, 67 Tex. 647, 4 S. W. 67.

Where the suit is brought by the state based upon the official bondl and the state proves the amount of money collected and the .amount accounted for or remitted, leaving a deficiency, as in this case, the state has made .a prima facie case and is entitled to recover without being required to go into the enemies’ ■camp and show who has embezzled or misappropriated it. Mahon v. Kinney County (Tex. Civ. App.) 28 S. W. 1024; State v. Middleton’s Sureties, supra.

The judgment is affirmed.

MARTIN, J., not sitting.


source: Caselaw Access Project

author: GALLAGHER, C. J.

license: Public Domain

text:
    BURTON v. PERRY.
    No. 1244.
    Court of Civil Appeals of Texas. Waco.
    Sept. 15, 1932.
    Rehearing Denied Nov. 3, 1932.

      Chamberlain & Jasper and Lee R. Stroud, all of Dallas, for appellant.
    Benj. Chilton, of Dallas, and Butler, Price & Maynor, of Tyler, for appellee.
   GALLAGHER, C. J.

This suit was instituted in the district court of Dallas county by appellant, Jerry A. Burton, against Baldwin Motor Company, a corporation, in trespass to try title to recover a certain tract of land situated in said county. Appellant alleged that said motor company was claiming title under a sheriff’s deed to the property sued for, executed in pursuance of a levy and sale under an execution issued out of the county court of Smith county, Tex., in a suit in which said Baldwin Motor Company was plaintiff and H. E. Kahle was defendant, and in which judgment was rendered against said Kahle as principal and appellant and another as sureties on said Kahle’s replevy bond. The Baldwin Motor Company was thereafter adjudged a bankrupt, and appel-lee, Edward E. Perry, was appointed trustee of its estate. He, with leave of the court, made himself a party defendant in the cause in lieu of said corporation. He pleaded not guilty, and by cross-action sought judgment against appellant for the title and possession of the land sued for.

The case was tried to the court, and judgment rendered that appellant take nothing and that appellee, as trustee in bankruptcy of the estate of Baldwin Motor Company, bankrupt, recover of appellant the title and possession of the land sued for.

Opinion.

Appellant presents a group of assignments in which he contends that the judgment rendered against him as one of the sureties on the replevy bond of the defendant Kahle was interlocutory only and wholly insufficient to support an execution, because said replevy bond was signed by three sureties and judgment was rendered thereon against the principal and only two of said sureties. He further contends therein that the levy of the execution issued on said judgment, the sale made by the sheriff of Dallas county thereunder, and the deed executed by said sheriff purporting to convey the property sued for to said Baldwin Motor Company, were all void because not based upon a valid final judgment. Appellee introduced in evidence copies, duly certified by the clerk of the county court of Smith county, of the original petition, affidavit, and bond for sequestration, writ, of sequestration, sheriff’s return thereon, replevy bond, and the judgment rendered by the county court of Smith county. Pie also introduced a certified copy of the answer filed by the defendant Kahle in said suit, and of certain entries made by the court on his docket in said cause. Said certified copy of the replevy bond showed that the same was signed by H. E. Kahle, as principal, J. R. Tipton, J. R. Denny, and appellant, Jerry Burton, as sureties. Attached thereto were copies of affidavits of solvency made by appellant, Burton, and said Denny. The proceedings shown by said certified copies were regular in every respect except that the signature of the surety J. R. Tipton to said replevy bond was ignored and the judgment rendered on saia' bond was against Kahle as principal and Denny and appellant only as sureties. The finality of said judgment in the county court of Smith county and its sufficiency to support an execution are the only issues presented' in this appeal.

The statute provides that when a suit in which property has been sequestered and replevied is decided against the defendant therein, final judgment shall be rendered against all the obligors on the replevy bond, jointly and severally, for the value of such property. R. S. article 6852. The several sureties on Kahle’s replevy bond, by signing the same, became parties to the suit, and neither notice nor pleading was required to support a judgment against them for the 'value of the property replevied. Mills v. Hackett, 65 Tex. 580, 582; Harding v. Jesse Dennett, Inc. (Tex. Civ. App.) 17 S.W.(2d) 862, 864, par. 4 (writ refused). They were, however, parties to such suit in only a limited or special sense. Harding v. Jesse Dennett, Inc., supra, page 864 of 17 S.W.(2d) par. 8; Clayton v. Stephenson (Tex. Civ. App.) 254 S. W. 507, 508, par. 1, and authorities there cited; Trammell v. Trammell, 15 Tex. 291, 292; Oliver v. Lone Star Cotton Jammers’ & Longshoremen’s Ass’n (Tex. Civ. App.) 136 S. W. 508, 510, par. 5. While, under the authorities hereinbefore cited, judgment cannot be properly rendered against the sureties on a replevy bond unless judgment is also rendered against the principal therein, we see no reason why the plaintiff in a suit could not waive a judgment against any or all the sureties on such a bond. Such a waiver might be recited in the judgment or in a separate order on the minutes. Mills v. Hackett, supra. The judgment of the county court of Smith county in said cause, as shown by the certified copy thereof introduced in evidence, did not contain such a recital, but the same shows that the court stated in said judgment that the sequestered property had been replevied by the defendant Kahle by executing his replevy bond therefor with J. R. Denny and Jerry A. Burton as sureties, and that the court thereupon rendered judgment against said Kahle as principal and against said Denny and Burton as sureties on such replevy bond in the sum of $534.06. It is apparent therefore that the court, with the bond before it, notwithstanding the name of Tipton appeared thereon as surety, did not recognize him as a party thereto nor render any judgment against him. Such being the terms of the judgment, it will- be presumed the court made some order effectively disposing of said Tipton. Gullett v. O’Connor, 54 Tex. 408, 415; Burnett & Ross v. Sullivan, 58 Tex. 535, 538; Carlton v. Krueger (Tex. Civ. App.) 115 S. W. 619, 622, and authorities there cited; Burton Lingo Co. v. First Baptist Church (Tex. Com. App.) 222 S. W. 203, 204. While such presumption is rebuttable, it nevertheless devolved on appellant to introduce testimony showing- that some disposition of said Tipton as a party to the replevy bond was not made. Gathings v. Robertson (Tex. Com. App.) 276 S. W. 218, 219 (top first column). Appellant, for the purpose of showing that no such disposition was made, introduced in evidence the certified copies above referred to. He had the clerk make a single certificate to all the same in the aggregate. For the purpose of showing affirmatively the contents of each of said instruments, entries, and orders, such certificate was sufficient. Appellant, however, had the clerk of said court to state in his certificate that the foregoing instruments, entries, and orders, enumerating them, constituted (with certain immaterial exceptions) “a true and correct copy of all the proceedings * * * ⅛ the case of Baldwin Motor Company v. H. F. Kahle,” etc. Such is, in substance, the form of certificate prescribed by statute for authenticating transcripts on appeal. R. S. art. 2282. There is, however, no statutory authority for the clerk of a court to make, certify, and deliver a transcript of the proceedings in a cause for use as evidence in another cause in some other court. Said statute therefore has no application in this case. The clear import of said certificate is that the clerk attempted thereby to certify that no other entry or order in said cause appeared on the judge’s docket or the minutes of the court except those shown by the copies preceding such certificate. Such negative fact or facts could not be proved by certificate, but could be proved alone by the sworn testimony of the lawful custodian at the time of the records of said court. Our Supreme Court, at an early day, quoted with approval on this issue from the case of Bullock v. Wallingford, 55 N. H. 619, as follows: “When a party desires to prove the negative fact that there is no record, he must do so in the usual way, —by the. deposition of the proper officer, or by producing him in court, so that he may be sworn and cross-examined as to the thoroughness of the search made. If the summoning of such officer to testify in relation to the public records at the call of a suitor shall be found impracticable, by reason of interfering with his public duties, the remedy must be found in further legislation.”

To this excerpt our Supreme Court added the following: “The principle applicable to the point before us is that the custodian of the records is the proper officer to prove that a record does not exist.” Edwards v. Barwise, 69 Tex. 84, 87, 6 S. W. 677, 679. See, also, Watson v. Texarkana Pipe Works (Tex. Civ. App.) 257 S. W. 1003, 1005, par. 2; Myers v. Jones, 4 Tex. Civ. App. 330, 23 S. W. 562, 563; C. R. Miller Mfg. Co. v. Coleman (Tex. Com. App.) 29 S.W.(2d) 991, 994, par. 6; 22 C. J. pp. 838, 839, § 980, and cases cited in notes 91, 94, and 95 thereto.

Appellant having wholly failed to rebut the presumption that the court made some order effectively disposing of the surety Tip-ton, such presumption must be given full force and effect.

The judgment of the trial court is therefore affirmed.


author: BLAIR, J.

text:
    BENGE v. CROSSLEY et al.
    No. 7737.
    Court of Civil Appeals of Texas. Austin.
    Oct. 5, 1932.

      Whipple & Redford, of San Antonio, for appellant.
    N. T. Stubhs, of Johnson City, for appellees.
   BLAIR, J.

Appellees, E. C. Crossiey and Arthur Gal-breath. sued appellant, Mrs. Lura D. Benge, for a broker’s commission in connection with the exchange of ranch properties between appellant and Edwin G. Glass; and at the conclusion of the evidence obtained an instructed verdict and judgment for $2,334.38; hence this appeal. •

Appellant contends that the evidence raised jury questions (a) as to whether appellees were the sole procuring cause of the exchange of the properties as alleged by them; and (b) as to whether appellees were employed as agents of appellant in the exchange of the properties, or were mere volunteers as to her.

There was no jury question involved as to whether appellees were the sole procuring cause of the exchange of the properties, because that issue was not material or pertinent to the terms of the alleged implied contract of employment relied upon by appellees for a recovery of the commission. In substance they alleged that the Glass ranch was listed with them for sale or trade, and further alleged that since appellant, while the. transaction or trade was still executory, accepted the services of appellees and the benefits thereof with full knowledge that they were real estate brokers, claiming to represent both parties to the trade, and would expect and demand a certain commission from appellant if the trade was made, elected to go on with the trade, she thereby impliedly employed appellees as her agents, and was precluded from thereafter questioning the right of ap-pellees to their commission. The legality of this theory of recovery is not questioned by appellant; but she contends that a jury question was presented by the evidence as to whether she made the trade knowing that ap-pellees were claiming to represent both parties, and would expect and demand a certain commission if the trade was concluded under the terms agreed upon between her and Glass, or whether appellees were merely volunteers as to her.

Appellees testified in effect that appellant did close the trade with full knowledge that they were claiming to represent both parties, and would expect and demand a certain commission if the trade was made. On the other hand, appellant’s testimony, as well as that of her son, was to the effect that appellant claimed she was being represented by another agent, and that while appellant knew appellees were claiming to represent both parties and claiming a commission before the trade was closed, she specifically repudiated the claim, and told appellees that she would not close the trade upon the terms agreed to between her and Glass if they expected or would demand a commission from her; and that she closed the trade believing and understanding that appellees would not expect or demand a commission from her; and that she would not have made the trade but for the understanding before the trade was made that she was not to pay appellees any commission. This evidence presented a sharp conflict as to whether appellant closed the trade knowing that appellees were still claiming to represent her and would expect and demand a commission from her; or conversely, as to whether appellant closed the trade upon the terms agreed to, believing and understanding that appellees would not expect or demand a commission from her; and the question or issue was therefore for the jury.

The contention in this connection, that appellees were mere volunteers as concerned appellant, is not material under the theory of reasoning relied upon by appellees. The rule as to volunteered services is stated in 7 Tex. Jur. 410, as. follows: “In the case of volunteered services, all the preliminary requisites of liability are satisfied if there be acceptance of the broker’s services with knowledge that he is a broker and expects a commission for his services if accepted.”

To the same effect is the holding in Cole v. Denton (Tex. Com. App.) 34 S.W.(2d) 1091, and Stevens v. Karr, 119 Tex. 479, 33 S.W.(2d) 725, wherein the Commission of Appeals affirmed the judgment of this court, 297 S. W. 287. See, also, Harris v. Phillips (Tex. Civ. App.) 280 S. W. 895.

This was the rule or theory of recovery relied upon by appellees. The trial court instructed a verdict upon the belief that the evidence established all prerequisites of liability under the rule. We hold the evidence raised a jury question as to some of the preliminary requisites of liability as above pointed out.

Certain testimony to the effect that appellant had listed her land with other agents for sale or trade, and that these agents first told her about the Glass ranch and told her sons to go see it, was excluded. Appellant contends that this testimony was wrongfully excluded because pertinent to the issue of whether appellees were the sole-procuring cause of the trade. We hold, as above stated, that no such issue was in the ease, and the exclusion of evidence on the issue waa not error. The question of whether appellees were the sole procuring cause of the trade is not involved in or pertinent to the terms of the alleged implied contract of employment relied upon by appellees for a recovery of the commission, nor to the issue of whether appellant closed the trade knowing that ap-pellees were still claiming to represent her and would expect and demand a commission from her. San Antonio Cotton Mills v. De Latte (Tex. Civ. App.) 43 S.W.(2d) 486.

The cause is reversed and remanded.

Reversed and remanded.


author: O’QUINN, J.

text:
    YOUNG et ux. v. LINN MOTOR CO.
    No. 2225.
    Court of Civil Appeals of Texas. Beaumont.
    Oct. 21, 1932.
    Rehearing Denied Oct. 26, 1932.
    A. W. Dycus and Y. J. Wistner, both of Port Arthur, for appellants.
    Fred A. White, of Port Arthur, for appellee.
   O’QUINN, J.

This suit grew out of a party wall contract. Linn Motor Company, a corporation, located and doing business in the city of Port Arthur, Jefferson county, Tex., owned lot 3, block 143, in said city, and Dr. T. W. Young and his wife, Mrs. T. W. Young, owned the adjoining lot 4, block 143, in said city. Linn Motor Company, desiring to erect a brick building upon its lot, and Dr. Young and wife contemplating building upon their lot at some time in the future, entered into the following contract for'the building of a party "wall on the dividing line of their lots, to wit:

“The State of Texas, County, of Jefferson.
“This Agreement, made and entered into this 29th day of May, A. D. 1929, by and between Linn Motor 'Company, a corporation with its office and principal place of business located in Port Arthur, Jefferson County, Texas, herein called first party and Dr. T. W. Young and wife, Mrs. T. W. Young, each residing in the city of Port Arthur, Jefferson County, Texas, called second parties, witness-eth that:
“Whereas, the first party is the owner of ■ Lot 3, Block 143 of the City of Port Arthur, Jefferson County, Texas, and the secón,d parties are the owners of Lot 4, Block 143 of the city of Port Arthur, Jefferson County, Texas, which two lots are adjoining; and
“Whereas, the parties hereto desire to provide for the erection o£ a party wall on the dividing line between the said lots;
“Now, therefore, this agreement witnesseth that Linn Motor Company, first party, will construct a wall, the center line of said wall to coincide with the boundary line between said lots Number 3 and 4 in Block 143 of the City of Port Arthur, Texas, said wall to be two stories high, the first story thereof to be approximately seventeen (17) inches thick and to be constructed of brick and reinforced concrete, the second story of said wall to be approximately thirteen (13) inches thipk and to be constructed of brick. Said wall shall have a necessary and suitable foundation for its support. Said foundation may extend on either side of the boundary line between the two lots such distance as may be absolutely necessary for the support thereof not to exceed an extension of twelve (12) inches beyond the edge of said wall. Said wall may extend the full length of the boundary line between said lots.
“The costs of constructing the wall above described shall be paid by the first party and the second party hereto shall have the right to join on to, connect with and tie into said wall, or any portion thereof at any time they may see fit, upon payment to the first party of the sum of Twenty-three Hundred Thirty ($2330.-00) Dollars. Second parties have the right in joining on to said wall to cut into said wall for the purpose of tieing connecting walls thereto any reasonable depth not to exceed four inches.
“And the parties hereto covenant, for themselves and their respective successors, assigns, heirs and representatives, each to and with the other, its or their successors, assigns, representatives and heirs, to observe the above agreement, and the covenants herein contained shall run with the land; but no owner is to be responsible, except for its acts ■or defaults while owners. Should said wall, after the same becomes a joint wall,' need repairs said repairs shall be made and each party pay its or their proportionate part of such repairs. It is further agreed by the parties hereto that this agreement shail be perpetual.
“In witness whereof, Linn Motor Company, first party, has caused this instrument to be executed by its Vice President, duly authorized, and Dr. T. W. Young and wife, Mrs. T. W. Young, in their own behalf have affixed their signatures hereto:
“This contract executed in duplicate on May 29, 1929.
“Linn Motor Company
“By [Signed] J. D. Hogan, V. Pres.
“First Party
“T. W. Young, Jr.
“Mrs. T. W. Young
“Second Parties
“Attest: [Signed] Glenn Bell, its Secretary”

This contract was duly acknowledged by all parties.

Under this contract, Linn Motor Company built the party wall. Later, August 31, 1929, Dr. Young and wife leased their lot to P. H. Inman for a period of seven years for the rental of $100 per month. Inman was a member of the Inman Chevrolet Company. This company was doing business and occupying a brick building- on the l.ot adjoining lot 4 on the opposite side from the Linn Motor Company building. That left lot 4 between the two brick buildings, Linn Motor Company’s on one side, and the one occupied by the In-man Chevrolet Company on the other. After leasing lot 4, Inman closed the ends by erecting a strong wire fence with a lift gate in front. He also erected a shed covering some 45 or 50 feet of the rear end of the lot. It was covered with corrugated iron roofing. The Inman Chevrolet 'Company used the lot for the storing and display of used cars. When this use commenced to be made of the lot, appellee, Linn Motor Company, demanded payment by Dr. Young of the agreed price of one-half of the party wall, $2,330. This Dr. Young refused, and Linn Motor Company brought this suit against Dr. Young'and his wife, and P. H. Inman and Major Inman, to recover said sum.

Defendants Young answered by general demurrer, general denial, and specially denied that any building such as was contemplated by the parties in their party wall contract had been erected upon the property. The defendants Inman answered by general demurrer, general denial, and specially that the structure erected by them was exclusively upon lot 4, and at “some distance from the dividing line.”

The case was tried to a jury. At the conclusion of the evidence, appellants moved for an instructed verdict, which motion was refused. The court then instructed the jury to return a verdict in favor of appellee Linn Motor Company against the defendants Dr. Young and his wife for the amount sued for, and in favor -of the defendants P. H. Inman and Major.Inman, which they did, and judgment was entered accordingly. Motion for a new trial was overruled, and Dr. Young and wife bring this appeal.

Appellants’ first proposition urges that the court erred in refusing their motion for an instructed verdict. This is based upon the contention that the structure erected upon the lot and its use is not such building or use of the party wall as was contemplated by the parties in the party wall contract. The facts are without dispute. In addition to the facts stated above, the record discloses that the party wall was built half upon each lot. In-man put a concrete-floor on lot 4 covering the entire lot up to the party wall. The shed ■built by Inman was not in any manner attached to or supported by the party wall. It was supported by steel or iron posts set in the concrete floor some 18 inches from the wall. The shed covered some 45 or 50 feet of the rear end of the lot and had corrugated iron roofing. The remainder of the lot was not covered but was entirely open — that is, had no roof. The ends of the lot were closed by heavy wire fencing, and there was a lift gate at the front. As above stated, Inman ■Chevrolet Company used the lot for storing and displaying used cars. The following pictures illustrate the nature and character of the structure Inman placed on the lot:

The party wall contract, set out supra, provides that the cost of constructing the party wall should ¡be paid by the first party (Linn Motor Company) and the second party (Dr. Young) should have the right to join onto, connect with, and tie into said wall at any time he saw fit upon the payment to Linn Motor Company of the sum of $2,330, and that Dr. Young should have the right in joining onto the party wall, to cut into said wall for the purpose of tying connecting walls thereto. The controlling question is: Has Dr. Young made such use of the party wall as to render him liable to Linn Motor Company for one-half of its cost, $2,330, stated in the contract. We think it plain that the use of the party’ wall contemplated by the parties is the ordinary use to which a party wall is-put, namely, that -of resting the timbers or material'of which the house is being built up;on or in it, or tying to it, or otherwise" supporting the building in such way.as,is commonly and ordinarily done ■ in, biiilding on a party wall. It was evidently the contemplation of the parties that Dr. Young, at such time as he desired, was to build- on his lot a permanent building and that same was to be joined onto and tied into the party wall — in other words, the paTty wall was to become an integral part of the building erected by Dr. Young, giving strength and support thereto. Under the undisputed facts no such building has been erected. The lease contract between Young and Inman provides that Inman shall have the right at the end of his lease period to remove any improvement he might place on the lot. The structure erected by Inman was intended to be and is temporary. Under the contract, liability for contribution for the walls of the party wall would not mature until the owner of lot 4 appropriated the use of 'the party wall for the purpose and as a part of a building- erected in accordance with and in pursuance of the contract; The structure erected by Inman and its use is not such building or such use of the party wall as would entitle appellee to judgment for half the cost of the wall. 47 O. J. § 61, p. 1351 (and authorities cited under same); 20 R. O. L. § 23, pp. 1099, 1100 ; 22 A. & E. Ency. Law (2d) 251.

But appellee contends that because the wall incloses one side of the lot, that is, incloses one side of the shed or structure erected and used by Inman under his lease of the lot, that this is in accord with the terms of the party wall contract and is such use of the party wall as renders appellants liable for half of the cost of the wall. We do not think so. We have just held that the building of the shed by Inman was not such building, in relation to the party wall contract, as rendered Dr. Young liable for half of the cost of the wall. Likewise, that the use of the wall in the manner shown is incidental only, slight and temporary in character, and not such ad to make the owner of lot 4 liable for contribution to the cost of the wall. The utilization intended is such as to make the wall a part of some permanent structure. Moreover, Linn Motor Company, appellee, is the owner of, the party wall in its entirety until it receives pay for half of the cost: of same from the adjacent owner of lot 4. That being true, it is in the attitude of having built -the party wall on its own lot and users of the adjacent lot having inclosed three sides, the wall making the fourth or completing inclosure. In this situation, it seems to be well settled that the owner of a town or city lot is not liable to the owner of an adjacent wall when he merely avails himself of it as a part of the inclosure of his premises. Nolan v. Mendere, 77 Tex. 565, 14 S. W. 167; 19 Am. St. Rep. 801; Conner v. Joy (Tex. Civ. App.) 150 S. W. 485; Kingsland v. Tucker, 115 N. Y. 574, 22 N. E. 268; Sheldon Bank v. Royce, 84 Iowa, 288, 50 N. W. 986. Numerous other cases so holding could be cited. No possession is taken or control- exercised over the wall, and hence no appropriation of same. Its use by Inman is only incidental. The very terms of the party wall contract provide for the erection by Dr. Young on his lot of a permanent and substantial building that would be joined onto, attached, and tied into the party wall, thereby making the wall the part of an actual building, and it was contemplated that it would be necessary in the ' erection of such building and in joining onto and tying into same to cut into said wall for the attaching to and resting on and in said wall of timbers or metal material necessary for the construction of said building. It is too plain for. discussion, we think, that the fence and shed erected by Inman in no way came within the intention or terms of the party wall contract. The -motion of appellants for" an instructed verdict should have been given.

The provisions of the party wall contract being plain and unambiguous, and the evidence without dispute, from what we have said it follows that the judgment of the trial court should be reversed and judgment here rendered for appellants, which is accordingly done.

Reversed and rendered.


author: MARTIN, J.

text:
    KINARD et al. v. SIMS et al.
    No. 3868.
    Court of Civil Appeals of Texas. Amarillo.
    Sept. 28, 1932.
    Rehearing Denied Nov. 9, 1932.
    Willis, Studer & Studer, of Pampa, for plaintiffs in error.
    Cole & Porter, of Clarendon, for defendants in error.
   MARTIN, J.

For convenience, the parties hereto will carry the same designation as in the trial court.

Plaintiffs, Beulah Kinard and others, sued defendant Huselby and others for an undivided one-half interest in a section and a half of land in Wheeler county, describing themselves in the petition as the heirs and all the heirs of their .mother,’Margaret Sew-ell, deceased, and alleging that the property sued for was the community estate of their father, John Q. Sewell, and their deceased mother, Margaret-Sewell.

The petition is lengthy, and it is unnecessary here to detail further than to say it seems to have sufficiently alleged a cause of action based upon the fraud of their father in selling the premises for the purpose of depriving them of their interest therein, of which all grantees in the line of title had full notice.

Upon the trial a peremptory instruction was given for defendant Mark Huselby; the other defendants having either disclaimed or been dismissed from the suit.

Since the disposition of this case will turn upon the sufficiency of the evidence to show the alleged fraud, we will here repeat the substance of so much of it as illustrates the law question hereafter discussed.

John Q. Sewell and Margaret Sewell, parents of the plaintiffs herein, owned, on September 30, 1915, and prior thereto, as community property, the section and a half of land in controversy, having purchased the same from defendant Hark Huselby and given as part of tbe consideration for the payment of same five vendor’s lien notes in the sum of $900 each. On the last-mentioned date the mother of plaintiffs, Margaret Sewell, died intestate, leaving eight children, who are plaintiffs herein, seven of whom were minors- at the date of her death, varying in ages at the time from about 3 years to about the age of 22. That thereafter, on May 16, 1916, an extension agreement was entered into by and between John Q. Sewell and the defendant Mark Huselby, in which the last three of the aforesaid series of five vendor’s lien notes were extended to October 28, 1919; the first two appearing to have been paid. That prior to this time John Q. Sewell had started community administration proceedings in the county court, but was unable to give bond, and he abandoned same without qualifying. That some time during the fall of 1916 negotiations were begun between John' Q. Sewell and H. J. Willis of Clarendon for an exchange of properties, which was finally consummated by the conveyance from Willis to Sewell of certain properties in Clarendon and by the conveyance from John Q. Sewell to H. J. Willis of the property in controversy, a part of his deed reciting as follows: “That I, John Q. Sewell * ** for myself and as survivor of the community estate of myself and my deceased wife Margaret Sewell, independent of the probate court, for and in consideration of the sum of $12,000.00 paid and assumed to be paid by H. J. Willis * * * as-follows: $9,000.00 cash in hand paid, the receipt of which is hereby acknowledged, and $3,000.00 by the said| Willis of the payment of three vendor’s lien notes dated October 28, 1908, due three, four, and five years after date respectively, with interest and payable to the order of Mark Huselby, and being the last three of a series of five notes executed by the undersigned John Q. Sewell in part payment for the hereinbelow described lands ⅞ ⅜ * and for the further consideration that the said Willis shall assume and pay the taxes for the year 1916 now due and payable upon said land.”

That at the time of this conveyance the community estate of Sewell and deceased wife owned personal property consisting of cattle, hogs, horses, mules, farming implements, etc., the estimated value of which was about $8,000. That a life insurance policy for $1,000, payable to John Q. Sewell, on the life of Margaret Sewell, had also been collected, and from its proceeds the expenses of her last sickness and her funeral expenses had been paid. That the debt to Mark Hus-elby, evidenced by said three notes, with about $300 accumulated interest thereon, represented all the community debts owing at the time. That there was, in fact, no cash paid; the $9,000 cash mentioned in the deed being represented by property in Clarendon conveyed to John Q. Sewell in his own name. That his purpose in making this exchange, as testified by him, was to enable him to educate his children.

That thereafter Willis conveyed the Sew-ell property to one I. Akers, in consideration, among other things, of the assumption on the part of said Akers of the payment of the $3,000 due Huselby as purchase money on the' said land. That thereafter the said Akers conveyed to B. M. Shelton the land in controversy for a consideration, in part, of the assumption by Shelton of the same notes to Huselby. That, after the date of the. conveyance to Shelton, Huselby made an extension in writing of the time of payment of the notes in question to Shelton, until October 1, 1924. That thereafter Huselby brought suit against Shelton, to which the Sewell heirs were not made parties, upon the said vendor’s lien and other notes, which resulted in a compromise, and a deed was executed and delivered to Huselby by Shelton and wife, which contains the following recitation: “For and in consideration of the sum of $12,500.06 to us paid and secured to be paid by Mark Huselby as follows: $1,000.00 cash in hand paid, receipt whereof is hereby acknowledged, and the balance also paid at the delivery of these presents by the surrender and cancellation of all those vendor’s lien notes and personal notes held by said Mark Huselby against the said B. M. Shelton fully set out and described in plaintiff’s first amended original petition now on file in cause No. 1011, entitled Mark Huselby, vs. B. M. Shelton, et al., in the District Court of Wheeler County, Texas, (this being a compromise of said suit) and described as follows: three vendor’s lien notes, for $900.00 each (notes three, four and five) of a series of five made by John Q. Sewell to Mark Huselby of date October 28, 1909, due respectively October 28, 1911, 1912, and 1913, since renewed and extended by agreements numbers one and two.”

This deed also describes other notes not necessary here to mention. It -was further shown that the $1,000 in cash was actually paid; that the compromise agreement had been fully executed and possession delivered, but that there had been no actual physical cancellation and delivery of the three Husel-by notes therein described.

These are the major facts upon which the plaintiffs .rely for a recovery, except certain testimony of John Q. Sewell and B. M. Shelton, which will be detailed and discussed in the opinion.

The right and power of the survivor of the community estate to sell same without administration to pay a community debt has been so long and so ofttimes recognized that it has become a rule of property in Texas no longer open to question, and in support of which it seems entirely unnecessary to cite authorities. We here call attention,' however, to cases where such sales have been upheld where there was an assumption of the payment of a community indebtedness. Morgan v. Lomas (Tex. Civ. App.) 159 S. W. 869; Jones v. Harris (Tex. Civ. App.) 139 S. W. 69; Clemmons v. McDowell (Tex. Com. App.) 12 S.W.(2d) 955.

There is, however, an exception to this well-known rule, under which plaintiffs herein claim the right of recovery. It may be stated in general terms that the exception which was early in our jurisprudence recognized as invalidating such a sale, and which has been referred to many times throughout our judicial history, is the presence and proof of fraud on the part of such survivor in making same, of which his grantee had notice. While such a rule has been ofttimes stated in general terms, there are few, if any, cases in Texas in which it has been given concrete application under a state of facts similar to those claimed to exist in the instant case.

Fraud is a somewhat elusive and shadowy term, the wisdom of defining which in exact terms has been questioned. It has been defined in some cases as “any cunning or artifice used to cheat or deceive another,” and it has been said of it that it is synonymous with “bad faith. — overreaching and dishonesty.” 26 C. J. 1050, 1060.

The burden of proving the existence of facts which give rise to the power to sell community property on the part of the survivor is on the purchaser of same, Moody v. Butler, 63 Tex. 210; while the burden of proving the existence of fraud in such a sale is on the party asserting it, Cage v. Tucker’s Heirs, 14 Tex. Civ. App. 316, 37 S. W. 180.

The rule first above announced is recognized by the plaintiffs, apparently, in this cáse,' but the claim is made that sufficient facts and circumstances were introduced in evidence tending to show fraud on the part of the survivor, of which his immediate and remote vendees had notice, to make an issue Of fact fox the jury’s consideration, and the court erred in not submitting this phase of the case to the jury.

The nature of plaintiff’s contentions with respect to this question will appear in the discussion below, and we will forego, to conserve space, repeating all of them verbatim.

Among the facts mentioned as tending to prove the presence of fraud was the proof made, without apparent contradiction, that much more than enough personal property was owned by the estate to pay the indebtedness due Huselby, and therefore no reason existed for making a sale of the real estate.

It has been held expressly that the survivor need not exhaust the personalty before selling the real estate. Wenar v. Stenzel, 48 Tex. 484; Davis v. Carter, 55 Tex. Civ. App. 423, 119 S. W. 724. The right of such survivor to sell real estate to pay community debts is not affected by the amount and value of personal property owned by the estate at the time of such sale. Mere errors of judgment will not invalidate the sale. The survivor’s power being a general one, the courts may not interfere with his discretion in a matter of this kind. Kirkland v. Oil Investment Co. (Tex. Civ. App.) 41 S.W.(2d) 125; Speer’s Law of Marital Rights, §§ 583, 580. Nor is the question affected by the fact that, as in this case, the debt was not yet-due. at the time of the sale. Rippy v. Harlow, 46 Tex. Civ. App. 52, 101 S. W. 851. Likewise the disproportion between the value of the property sold and the amount of the debt is unimportant, in the absence of fraud. Crawford v. Gibson (Tex. Civ. App.) 203 S. W. 375.

It perhaps is necessary to state in this' connection that the record conclusively shows that the consideration received for the property in controversy was adequate and that the value of the Clarendon property was fully equal to the value of the Sewell property received in exchange for it. -We also regard the facts as conclusively showing, not only that it was agreed as part of the consideration for the sale of the property in controversy that a community debt was to be paid by the purchaser, but, in fact, that it was paid. A community obligation, being assumed, in writing and paid, it results as a matter of law that the conveyance in question was made to pay a community debt, and this regardless of what Jhe survivor’s motive was in making the sale. Clemmons v. McDowell (Tex. Com. App.) 12 S.W.(2d) 955; 31 C. J. p. 209. The presumption of good faith attends such sales, Manchaea v. Field, 62 Tex. 135; and it seems hardly necessary to add that the purchaser is not bound by a secret fraudulent intent of the survivor. .

This brings us to a discussion of eertain phases of Sewell’s testimony which, it is claimed, shows such fraud of which his immediate grantee and others in the line' of title had notice, as would invalidate the sale, and is the only one that has given us any concern on the. question of whether there was a jury issue in this case.

It may be stated as a fact we think that all the grantees in this line of title had such notice of the existence of a community es- • tate and of the facts already discussed as would put them on inquiry, but we do not regard any of the facts already stated as of sufficient cogency to invalidate a sale. The power and right to sell by the survivor certainly would imply the right to buy by a purchaser, and, since the power to sell springs from and arises out of the.existence of community debts and a community status, it would be an entirely illogical holding to say that a state of facts which gave a survivor in community the right to sell would, if known to the purchasers, deprive them of the right to buy. After eliminating the questions already discussed which it is either claimed invalidated the sale or constituted notice, we have left of such' facts only the naked proof of a community estate, a community debt, and a conveyance to pay same. The real question in this case is whether the sale was fraudulently made by the survivor with intent to cheat and defraud his children out of the estate, of which the immediate vendee and those claiming under him had notice.

John Q. Sewell testified, in substance, that he had no intention at the time of dividing the Clarendon property with his children, but that he took it in his own name so that he could handle it, and that Willis had knowledge of this. We find, however, he further testified as follows:

“Q. At the time of your conveyance of this land to Mr. Willis, was it your purpose thereby to cheat, swindle or deprive your children, plaintiffs in this case, out of anything justly belonging to them? Answer yes or no. A. No.
“Q. Do you now state that you and Mr. Willis entered into a conspiracy or scheme to beat your children out of their portion of said community estate? Answer yes or no. A. No.
“Q. If you have testified directly or to the fact that you and H. J. Willis entered into a conspiracy or plan for the conveyance of the land by you to Willis for the purpose of defrauding your own children, then tell whether this conspiracy or plan was first suggested by you or by Willis, and also tell exactly what was said either by you or by him' when the conspiracy or plan was first suggested. A. There was no conspiracy entered into between H. J. Willis and myself over the sale of this land.”

It has ofttimes been held that the purchaser from a survivor in community is under no duty to see to the proper distribution of the purchase money. Sanger v. Moody’s Heirs, 60 Tex. 102; Stone v. Jackson, 109 Tex. 385, 210 S. W. 953; Ashe v: Yungst, 65 Tex. 631.

As already stated, practically all the Sewell children were, at the time,-minors, and some of them of tender years. The Clarendon property was incapable of partition. We find no testimony in this record that Sewell intended ultimately to defraud his children out of this estate. We do not regard his intention not to partition and divide with minor children property, that was incapable of partition as evidencing the fraudulent intent contemplated by law. We find no evidence of any fraudulent conspiracy between Sewell and Willis, and particularly is the record lacking in evidence of a notice of any fraudulent intent by Willis. If Willis had good title, it logically follows that Huselby, who acquired whatever title Willis had, would be protected. We find testimony from both Sewell and Shelton in the record showing that all the grantees knew, in a general way, about the condition of the estate, but, as already indicated, there being community debts and the right to sell on the part of the survivor, the buyer’s right could not be affected by these facts which show a right to convey.

We have bottomed this opinion upon botl) a -lack of proof of fraudulent intent on the part of Sewell to permanently deprive the children of the community property when the sale was made, and the lack of notice of such fraud by the purchaser Willis. We say this without regard to the status of the title arising from the fact that the grantee Akers was an innocent purchaser without any notice that would put him on inquiry as to the fraud alleged to exist.

If we are mistaken in our conclusion that Willis was an innocent purchaser and if we concede that the proof is sufficient to show a fraudulent purpose on the part of Sewell to cheat his children out of their inheritance, it would not, under our view of the record, necessitate a reversal, since we believe the evidence wholly insufficient to bring notice of such fraudulent purpose home to the purchaser Akers, who bought for a valuable consideration and had conveyed to him the land from Willis. This would protect appellee Huselby, who purchased the legal title even though he had knowledge of the fraud. The rule has been well stated by Judge Pleasants as follows: “It is equally well settled that, if a subsequent purchaser with notice acquires title from a former purchaser, who bought for value and without notice, such subsequent purchaser succeeds to all the rights of his grantor. When land once becomes freed from equities by a bona fide purchase by one having no notice of the equities, such purchaser obtains a complete jus dis-ponendij and any one who takes title from him takes it free from said prior equities, notwithstanding he may have notice thereof at the time he buys. Grace v. Wade, 45 Tex. 522; Lewis v. Johnson, 68 Tex. 450, 4 S. W. 644. We think it logically follows from these decisions that the burden upon one asserting an equitable claim against the purchaser of a legal title, who has not purchased directly from the holder of the legal title against whom the equity arose, is not discharged by merely showing that the last purchaser had notice of the equity, but the proof must go further and show that the land was not free from such equity in the hands of any of the intermediate vendors of said purchaser. This is the holding in the following eases: Peterson v. McCauley (Tex. Civ. App.) 25 S. W. 826; Burleson v. Alvis, 28 Tex. Civ. App. 51, 66 S. W. 285.” Thomason el al. v. Berwick, 52 Tex. Civ. App. 153, 113 S. W. 567. See, also, the following authorities: Laffare v. Knight (Tex. Civ. App.) 101 S. W. 1034; Allen v. Anderson & Anderson (Tex. Civ. App.) 96 S. W. 54; Garner v. Boyle, 34 Tex. Civ. App. 42, 77 S. W. 987 (affirmed in 97 Tex. 460, 79 S. W. 1066); Long v. Fields, 31 Tex. Civ. App. 241, 71 S. W. 774; Hickman v. Hoffman, 11 Tex. Civ. App. 605, 33 S. W. 257; Goddard v. Reagan, 8 Tex. Civ. App, 272, 28 S. W. 352; Gulf, C. & S. F. Ry. Co. v. Gill, 5 Tex. Civ. App. 496, 23 S. W. 142.

The judgment is affirmed.


author: WALTHALL, J.

text:
    FIRST TEXAS PRUDENTIAL INS. CO. v. NUTE.
    No. 2724.
    Court of Civil Appeals of Texas. El Paso.
    Oct. 27, 1932.
    Rehearing Denied Nov. 10, 1932.
    Turney, Burges, Culwell & Pollard and James F. Hulse, all of El Paso, for appellant.
    Ponder S. Carter and C. L. Galloway, both of El Paso, for appellee.
   WALTHALL, J.

On August 4,1930, appellant insurance company, issued and delivered to Cora J. Nute, wife of appellee, Charles A. Nute, its policy of insurance upon her life in which appellee was named as beneficiary.

Appellee sued upon said policy, alleging the death of his wife, that he had furnished proof of loss, demand for payment, and failure to pay. The suit is for the face value of the policy plus statutory penalty and attorney fees.

As a defense, the appellant insurance company set up that in her written application for insurance the insured represented that she had never had heart disease; that said representation was false and material to the risk; that ’said policy of insurance provided that it was to be void and of no effect unless when said policy was delivered to insured and accepted she was in perfect health, free from infirmities or disease; that, at the time said policy was delivered the insured, she was suffering from heart disease; and therefore said policy never took effect.

The cause was tried without a jury, and, after hearing the evidence, judgment was rendered for appellee, from which this appeal is duly prosecuted.

Opinion.

The trial court filed findings of fact and conclusions of law as follows:

“1. That defendant insurance, company, in the course of an intensive canvass in the neighborhood in which the deceased lived called on her and secured her signature to an application for insurance.
“2. That the policy of insurance was issued and delivered to her'by the agent of the company and, at the time of such delivery, she was in perfect health, although previously she had suffered ailments of a serious nature involving her heart, commonly called a leaky valve, caused from endocarditis; hut at the time of the application for and issuance of the policy, there was no evidence of her suffering from this ailment and that she was up and engaged' in her household duties.
“3. That chronic endocarditis caused an organic defect in the heart of the deceased, which was bound to have existed throughout the rest of her life, from December, 1929.
“4. That she had no intention of defrauding the company and allowed a life insurance policy on her life to lapse two or three months before her death for the sum of $1000.00.
“5. That she died approximately six months after the issuance of the policy sued on from a condition contributed to chronic endocardi-tis, which became active after the issuance of the policy.
“6. The attorney’s fees, as agreed upon, were $200,00.”
The court concluded that the representations in the application were correct in all material respects, and that the policy became effective upon delivery.

The only questions presented are as to the sufficiency of the evidence to sustain the court’s finding that “at the time of such delivery (referring to tlie póliéy) she (referring to the insured) was in perfect health,” and that “at the time of the application for an issuance of the policy there was no evidence of her suffering from this ailment (involving her heart), commonly called a leaky valve, caused from endocarditis.” No finding was made or requested to be made as to any infirmity other than as above. On the part of appellant and briefly stated, it is to the effect: In answer to questions, Dr. "Vernon S.. Rogers, testified : He attended the insured in January and February, in 1928, and in September, October, and November, in 1929, and treated her , for blood condition, a leaky valve, a physical . structural organic condition of the heart, not a natural condition of the heart; she had what is called endocarditis, an infection along the heart valves, in the nature of a decomposition, an organic defect in the heart, a condition bound to have existed throughout the rest of her life. In answer to the question: “Is a person who has a heart such as you said she had, could she be said to be in perfect health?" To which witness answered: “Well, that will depend on what you mean by perfect health. A person could have that type of heart, and until such time comes as it is put ' under,too much of a load, that person will feel in good health, but the organic defect remains there; whether it is inevitable that that heart is going to leak in such way that death vyill result, will depend upon whether the infection on those heart valves can be stopped; if it can be stopped the patient will remain in good health so long as the heart is not overtaxed.” Witness saw the insured in December, 1930, but gave her no treatment. The “leaky valve” was the indirect cause of her death; the heart not being able to push the blood along, it leaked back and produced stagnation in the lung. The leaky heart is not necessarily fatal within itself. Numerous people who have leaky hearts die with some other malady. Witness did not hold an autopsy on the body of the insured. A blood clot might produce the same symptoms as a leaky heart. The symptoms are practically the same at the time of death.

' Mrs. Edith Mallory, a daughter of deceased, testified: Lived adjoining her mother and knew when she received the policy; she and her mother were together practically all the time; is the only child and saw her mother off and on every day; never heard her complain very much; was present when she died; her mother stated she had been taking soda; Witness usually gave her a little soda to relieve the gas; her mother worked around the house; had the “flu” often; at the time of her death she was sick about one and one-half hours.

The medical examiner’s report of insured is in the record. By question and answers to the examiner, the following, in effect, is shown: Height, 5 feet and 4 inches; weight, 145 pounds; personal appearance as to health, good; detected no heart or lung disease, of disease of any kind; applicant never had any severe illness or injury; if so, it has not affected the constitution; home surroundings are sanitary; do not suspect intemperate habits or immoral life; examination made at home; no one present; applicant is well formed and healthy in appearance; menstrual functions are regular; married 20 years ago; two children; no miscarriage or difficulty in labor; no suspicion of'uterine disorder; no disease of breast.

Under head of remarks, the following:

“I certify that I have this 14th day of July, 1930, personally seen and questioned the applicant at No.-street Cara, City of El Paso, and verified all the answers hereon, and am satisfied that I examined or inspected' the same person whose signature appears on the reverse side hereof.
“I recommend the company to accept the risk for $590.00, my opinion being that applicant is first class risk for that amount.
“Approved for-by-
“[Signed] Irving McNeil,
“Examiner’s Signature.”

The court found there was no fraud in procuring the policy; nothing to show the company’s examiner of the insured was misled by the applicant. In such cases the rule seems to be well established that the medical examiner is an agent with limited powers, but his acts in and about the business intrusted to his care come within the same general rules of agency as to other special agents. Couch’s Cyclopedia of Insurance Law, vol. 2, § 511; Joyce Law of Insurance (2d Ed.) vol. 1, § 412.'

No question is made as to the admissibility of the examiner’s report. Some criticism is made by appellant of the failure of the evidence to show who the examiner was, whethér he was a medical expert or otherwise. The court could very fairly presume in the absence of any evidence to the contrary that the company’s medical examiner was qualified to make the medical examination of the applicant, and report the facts included in h'rs report as he found the facts to be, .and correctly certify them to his principal. •

There is no statement in Dr. Roger’s statement that he at any time advised the insured that she had a leaky heart or advised her as to her condition; nor is there any evidence that on the day of the medical examination the insured knew that she was not in good health, if she was not; and what she said as to her health was but the expression of an opinion. National Life & Accident Ins. Co. v. Sumlar, 185 Ark. 1189, 51 S.W.(2d) 866.

We have concluded that the evidence was legally sufficient to sustain the trial court’s finding and the judgment based thereon.

The case is affirmed.


text:
    SOUTHWESTERN DRUG CORPORATION v. JOHNSON.
    No. 3861.
    Court of Civil Appeals of Texas. Amarillo.
    Sept. 14, 1932.
    Rehearing Denied Nov. 9, 1932.
    James O. Cade, of Amarillo, for appellant.
    Reynolds & Heare, of Shamrock, for ap-pellee.
   MARTIN, J.

Appellee sued appellant for the alleged conversion of certain fixtures not necessary here to mention, upon which he claimed a landlord’s lien.

His petition alleges, in substance, that on or about the 1st day of April, 1930, he leased and let to one J. Fred -Smith, by a verbal contract, a certain store building in the town of Shamrock, for a period of one year beginning the 1st day of April, 1930, and ending the 31st day of March, 1931, for an annual rental of $720; that immediately after the-making of said contract the said Smith placed in said building the fixtures and personal property in controversy in this suit. He further alleges that the said Smith paid on his contract the sum of $300, leaving a balance of $420 unpaid; that he had a valid and subsisting landlord’s lien against all the items of fixtures described in his petition, to.secure him in the rent of said building, and that, while said fixtures were still in said building and during the existence of his lien, on or about the 1st day of March, 1931, appellant entered said building, carried away the said items, and converted the same to its own use and benefit; that Smith was and is notoriously insolvent, and. that the said property carried away was of the reasonable market value of more than $420. His prayer is for the recovery of $420.

The appellant answered by general demurrer, general denial, and specially that it held' a valid chattel mortgage on the property in' controversy superior to the alleged landlord’s lien of appellee. It further alleged that one M. Reynolds had been appointed trustee for the benefit of the creditors of J. Fred Smith; that appellant had filed a foreclosure suit, which was thereafter settled by agreement signed by M. Reynolds, trustee, Mr. and Mrs. J. Fred Smith, and Herbert Gallan, the alleged purchaser of the property in controversy at a trustee’s sale. It further pleaded res judicata of all matters in controversy,' and that the parties above named had signed a complete bill of sale of the property to it.

Certain issues not necessary to here detail' were submitted to the jury, upon whose answers a judgment was rendered for appel-lee • in the sum- of $420 against appellant^ as prayed for.

Three propositions have been briefed by appellant. No brief is on file for appel-lee.

We give here the substance of so much of the evidence as is necessary to illustrate the legal propositions hereafter discussed. The evidence for appellee showed that he had rented, through his daughter as agent, a storehouse’in Shamrock by verbal lease, for one year, for the sum of $720, payable $60 per month, with provision that any unpaid balance would be due at tbe end of the rental period; $300 was paid at various times on tbis contract; tbe fixtures in controversy were in tbe building at tbe time; that Smith was in possession from April 1, 1930, for several months thereafter; that Smith executed and delivered a chattel mortgage on the fixtures in controversy to appellant about the latter part of April or May, 1930, which was immediately filed in the clerk’s office. On September 11, 1930, appellant received a letter from M. Reynolds notifying it that X Ered Smith had made an assignment for the benefit of his creditors and that Mr. Reynolds had been designated as the assignee. No written assignment appears in the record. Reynolds testified that the assignment was made orally. Thereafter, about November 18, 19⅞0, appellant brought suit to foreclose its chattel mortgage in the district court of Potter county, to which, however, appellee was not a party. Thereafter an agreement of settlement was made by M. Reynolds, Mr. and Mrs. X Fred Smith, and Herbert Callan, defendants in said suit, conveying all their right, title, and interest in the property in controversy to appellant in consideration of a release of themselves from all claims against the signers of such release. In February, 1931, appellant took possession of said fixtures and removed them from Shamrock, Wheeler county, to Potter county, and converted them to its own use. The original suit for conversion was filed by appel-lee on June 20, 1931.

It is first claimed by appellant that a general demurrer should have been sustained to appellee’s first amended original petition, because it contains no allegation whatever that he had been damaged in any sum of money.

As already indicated, the petition did allege sufficient facts to show a valid rental' contract, an unpaid balance, a valid landlord’s lien, a conversion of the property during the existence of such lien, and the value of the 'property converted. These facts sufficiently showed damages and the extent thereof. If appellee had merely pleaded that he had been damaged, without stating the facts, his petition would have been subject to a demurrer. Wagner v. J. B. Colt Co. (Tex. Civ. App.) 234 S. W. 934. We overrule this assignment.

The second assignment of error raises the question that the evidence presented no issue for the jury, since the lien on the property involved had already been foreclosed and a settlement entered into between appellant on the one hand and M. Reynolds, trustee for the creditors, and J. Fred Smith and Herbert Callan on the other.

Appellee herein was not a party to such settlement, nor to the suit. The whole question turns on whether or not M. Reynolds, as trustee, had authority to bind the appel-lee herein by any contract. Unquestionably the burden rested upon appellant to show the authority of Reynolds to release the lien of appellee. If there had been a legal assignment for the benefit of the creditors of Smith in which Reynolds was appointed assignee or trustee, the record before us fails to show it. We have nothing here except the bare statement contained in a letter of Reynolds that an assignment had been made and he had been appointed assignee, which appointment appears to have been oral. Its terms are nowhere given. The requirements of title 12, R. S. 1925 (article 261 et seq.), relating to assignments for creditors, are not shown to have been complied with in any particular. Among these is article 262, which requires such an instrument to be in writing. Even if in writing, it might be void for uncertainty. McWilliams v. Cornelius, 66 Tex. 301, 17 S. W. 767. Only valid assignment passes title to the assignee. Golden Rod Oil Co. v. Noble (Tex. Civ. App.) 233 S. W. 524, 528. We regard this record as being bare of any showing of authority on the part of Reynolds to bind appellee by any kind of settlement, particularly a settlement in which he gave away all the rights of ap-pellee without any consideration. This is true regardless of the ultimate decision of the courts as to the validity of the Texas assignments for creditors statute, concerning which two contradictory holdings have been made. Star v. Johnson (Tex. Civ. App.) 44 S.W.(2d) 429, and authorities there cited.

The third proposition presented is that the chattel mortgage held by the Southwestern Drug Corporation was prior and superior to the purported landlord’s lien of appellee, and that there could not have been a conversion, and a peremptory instruction should have been given.

By the terms of article 5238 of the Revised Statutes, the landlord is given a preference lien upon certain property of his tenant for rents due and to become due for a period of twelve months “reckoning from the beginning of the lease or rental contract ⅞ * * so long as the tenant shall occupy the rental premises, and for one month thereafter.” This article further provides that, “in order to secure the lien for rents that are more than six months due, it shall be necessary for the person leasing or renting any storehouse or other building * * * to file in the office of the county clerk of the county * • ⅜ * ,a sworn statement of the amount of rent due, itemized as to the months for which it is claimed to be due.”

The rental contract and occupancy which antedates the chattel mortgage of appellant created a landlord’s lien on the fixtures then on the premises, and such lien was in existence at the time appellant’s chattel mortgage was given. It created a lien for the entire rental period superior to that of a chattel mortgage given subsequent to its creation. Marsalis et al. v. Pitman, 68 Tex. 624, 5 S. W. 404. As we interpret the oral contract, the amount in controversy was not due as rent necessarily at the time of the conversion. The appellee’s right to a cause of action immediately arose upon the illegal conversion of the property in controversy in February, 1931. This is not a suit to enforce the landlord’s lien, but a suit for conversion, the right to which has existed since - February, 1931. We are not able to agree with the contention of appellant that a peremptory instruction should have been given.

The judgment is affirmed.