author: WALKER, J.

text:
    SHAW, Banking Com’r, v. NETHERY et al.
    No. 2301.
    Court of Civil Appeals of Texas. Beaumont.
    Sept. 29, 1932.
    Rehearing Denied Oct. 6, 1932.
    Cousins & Bell, of Beaumont, for appellant.
    Edward Clark and W. T. Davis, both of San Augustine, for appellees.
   WALKER, J.

This suit was filed in the district court of Sabine county by C. A. Nethery and seven other stockholders of the People’s State Bank of Bronson, Sabine county, Tex., against James Shaw, banking commissioner of the state of Texas, on the following allegations;

First. The People’s State Bank, being insolvent, was in process of liquidation under orders of the defendant, who had levied an assessment against each of the plaintiffs and the other stockholders of the bank for an amount equal to the par value of the stock in the bank owned by them. This assessment was made “under the law in such cases made and provided, in order to supplement the assets of said bank in liquidation for the purpose of paying its debts.”

Second. Suit had been instituted, cause No. 31, in justice court, precinct No. 1, of Sabine county, Tex., against plaintiff O. O. Nethery, by defendant for the sum of $50; likewise in cause No. 28 in said justice court defendant had instituted suit against plaintiff Loy S. Nethery for the sum of $50; likewise in cause No. 30 in said justice court said defendant had instituted suit against plaintiff W. O. Nethery for the sum of $50; likewise suit had been instituted in eause'No. 438 in the county court of Sabine county by defendant against plaintiff C. S. Nethery for the sum of $750; likewise suit had been instituted in cause No. 536 by defendant in county court of Sabine county against plaintiff D. C. Nethery for the sum of $300; likewise suit had been instituted by defendant in cause No. 537 in the county court of Sabine county against plaintiff G. A. Nethery for the sum of $750; likewise suit had been instituted by defendant in cause No. 539 in the county court of Sabine county against plaintiff P. H. McGowan for the sum of $250; the amount sued for by the defendant against the plaintiff in each of said suits being the amount of stock owned by each of said plaintiffs in said insolvent bank.

It was further alleged that all of the suits, as enumerated above, were based upon thé stock assessments made by the defendant herein against said plaintiffs and each of them as stockholders in said bank, and “that all of said plaintiffs, as defendants in said cause of action, have substantially the same defenses against said purported assessment, arising from a common cause and all the mat•ters in controversy in all of said suits are governed by the same legal rule and involve similar facts; * * * that the right attempted to be asserted in the separate suits above mentioned, are common against a number of persons against which each of said defendants in said suits who are plaintiffs here, will urge the same defenses in each one of said suits against said James Shaw, acting as Banking Commissioner of the State of Texas, thereby entailing unnecessary delay, annoyance and expense, all of which matters in controversy between said James Shaw, acting as Banking Commissioner of the State of Texas, against said plaintiffs as defendants, rests upon the same questions of law and substantially the same questions of fact and should be determined in one suit.”

Third. It was further alleged that many other persons owned stock in -the said bank, and there was attached to the petition a list of the additional stockholders, and that said parties were liable to respond in damages for said assessment and “that your petitioners as shareholders, as a matter of law are entitled to a pro rata return of whatever amount might remain on hand after paying the obligations of said bank; that they assert their right of contribution against all of said stockholders and upon information and belief charge the fact to be, that some or all of said stockholders have not been sued and are able to respond in damages in some amount on said assessment, if the same shall have been determined to be valid; and they further charge upon information and belief that under the color of the law said Bank Commissioner, his agents, servants and employees, in the liquidation, of said bank are about to make compromises with the other stockholders in amounts much less than the' full value of said assessments in violation of the rights of the plaintiffs to contribution.”

The prayer was “that all of said stockholders be made parties to this suit in order that their liability, if any there be, be determined and fixed to the end that all rights between said Banking Commissioner of the State of Texas and these defendants in said above named suits and plaintiffs here and all of said stockholders may he finally concluded in one suit and that said James! Shaw as Banking Commissioner of the State of Texas be forbidden and restrained from further prosecuting said several suits already filed and from further prosecuting any several suits against any of said stockholders severally and from making any compromises with said other stockholders until further orders of this court, and that defendant be cited to appear and answer this petition, and that process issue out of this court commanding all of said stockholders to appear and answer herein and for all relief in law or equity, both special and general, that they may be entitled to by reason of the premises.”

Upon presentation of the petition to the district judge of Sabine county, *the injunction prayed for was granted an'd duly issued. From that order, without filing a motion to dissolve, the defendant promptly perfected his appeal.

Opinion.

The injunction was improperly granted, and should be dissolved. The banking commissioner has the right to institute separate suits against each of the stockholders for the amount due by them under the assessment as made under the provisions of our banking law. In Stringfellow v. Patterson (Tex. Civ. App.) 192 S. W. 555, it was held that a' suit on stock assessments was not a proceeding in equity hut an action at law, and that the liability of the stockholders under our banking laws was not a secondary, but a primary, liability. In that case the exact point in issue in this case was decided adversely to appellees’ contention. Quoting the first syllabus, the court held: “The liability of a bank stockholder, imposed ■by Vernon’s Sayles’ Ann. Civ. St. 1914, art. 552 [now 535], is legal in character, not merely equitable, so that the commissioner of banking can maintain a suit thereon against one stockholder without bringing Rll others before the court.”

The allegation in plaintiffs’ petition that the defendant was “about to make compromises with the other stockholders in amounts much less than the full value of said assessments, in violation of the rights' of the plaintiffs to contribution,” was subject to demurrer. Under article 454, Revised Statutes, as amended in 1931 (Vernon’s Ann. Civ. St. art. 454), the banking commissioner was expressly given the power to “sell or compound bad or doubtful stockholders assessments * * * levied against stockholders of such bank on such terms as the Court shall direct.” As directly supporting this construction of the statute, see Hall, Commissioner of Banking, v. Tyler County (Tex. Civ. App.) 247 S. W. 582.

For the reasons stated, the judgment of the lower court granting the injunction is dissolved, and this cause remanded for trial in accordance with this opinion.

Injunction dissolved; cause reversed and remanded.


source: Caselaw Access Project

author: GALLAGHER, C. J.

license: Public Domain

text:
    JOHNSON v. EDRINGTON.
    No. 1264.
    Court of Civil Appeals of Texas. Waco.
    Sept 22, 1932.

      J. W. Thomas, of Belton, and Tirey & Tir-ey, of Waco, for appellant.
    Jos. W. Hale and Sleeper, Boynton & Kendall, all of Waco, for appellee.
   GALLAGHER, C. J.

This suit was instituted by appellant, D. P. Johnson, against appellee, O. A. Edring-ton, on an express verbal contract to recover broker’s commissions on the sale of a certain farm by the' Union Central Life Insurance Company to said Edrington. Appellee denied that he ever entered into such a contract with appellant, and further defended on the ground that such contract, if any, was wholly without consideration and inhibited by the statute of frauds; that appellant, without his knowledge or consent, was also acting at the time for and in behalf of said life insurance company; and that the contract of purchase was executory. Appellee made said Union Central Life Insurance Company a party defendant in the suit, and alleged that said company, acting by and through its agent, McFarland, had agreed to indemnify him and hold him harmless from any claim for commission on said sale which appellant might assert against him, and sought a recovery against said company thereon in event appellant recovered against him.

One Schmaley owned a farm of 203 acres situated in Bell county. It was incumbered with a lien held by the Union Central Life Insurance Company. One Preston, an agent of the life insurance company in Bell county, apparently expecting the early acquisition by said company of the legal title to 'said land in satisfaction of its lien, listed the same for sale with appellant. His authority to do so was not shown. Neither does it appear that his action in doing so was ever recognized by said company. There is no contention that appellant was ever invested by said agent, or any one else, with authority to offer or agree to terms or to '.execute a contract of sale. Appellant included said farm in his advertised list of real estate bargains. Appellee saw the advertisement and applied to appellant for further information concerning the same. Appellant went with him to examine the farm, and found Schmaley still in possession. They attempted to negotiate for the purchase of his equity together with his personal property used in operating the same. Pending such negotiations, one of Schmaley’s creditors attached the farm, thereby further complicating the situation. All efforts to purchase from Schmaley failed. The life insurance company ultimately obtained title to the land. Shortly thereafter appellee again came to appellant at his office in Belt-on to renew his efforts to purchase said farm. It appears that .at that time the matter of selling said farm was in the hands of the company’s agent McFarland at Waco, subject, however, to approval by some one at its home office. According to appellant’s testimony, appellee then asked him to go with him at once to McFarland’s office in Waco, that his wife was sick, and that he was unable to comply with such request. Appellant further testified that he advised appellee that he expected or desired a commission from the life insurance company if appellee purchased said farm, and that appellee agreed that he would tell McFarland so, and also itell him that the reason he did not come was-the sickness of his wife. Appellant further testified that appellee returned the next day and advised him that McFarland was anxious to make the trade; that he asked ap-pellee if he spoke to McFarland about his commission; that appellee replied that he mentioned it, but that they were then interrupted and both of them forgot about it; that appellee in that connection further stated that he knew that McFarland, for reasons of his own, liked to have it appear to his company that he had effected sales of real estate belonging to it without the assistance of agents or brokers; that appellee was willing to deal with McFarland on such basis, and that he felt that McFarland would give him a better price than he would be willing to make if an agent’s commission were to be paid, and that he (appellee) would pay appellant the commission if he bought the farm. Appellant further testified that he relied on said promise, and did not further participate in negotiating the sale of said farm.

Appellee denied promising to pay appellant a commission if lie purchased said farm, but further testified that he did agree with appellant to discuss with McFarland the question of a commission on said sale, that he did so, and that McFarland denied liability therefor. Both appellant and appellee testified that the usual and customary commission for the sale of real estate was 5 per cent, on the purchase price. Appellee entered into a written contract with McFarland for the purchase of said farm for the sum of $9,000. Said contract was duly approved by the home 'office of the company. Appellant shortly thereafter went into possession of the property, and was still in possession thereof at the time of the trial. There is no contention that said contract was not a valid one nor that the same was not legally enforceable. A fuller statement of the testimony is not necessary to the determination of the issues of law hereinafter discussed.

The case was tried to a jury. Appellee asked for an instructed verdict in his favor against appellant, which was refused. The ■court instructed the jury to return a verdict in favor of the life insurance company against appellee on his cross-action, which was done. The court, however, over certain objections of appellee, submitted the case between him and appellant to the jury on special issues, which issues and the answers of the jury thereto are as follows:

“No. 1: Hid the defendant, O. A. Edrington, agree to and with the plaintiff, H. P. Johnson, to pay him a commission, in the event he bought from the .Union Central Life Insurance Company the John Schmaley 203 acre farm in question in Bell County? Answer: Tes.
“No. 2: Was said agreement made, if you find that it was made, prior to the 17th day of February, 1930? Answer: Yes.
“No. 3: Was the contract, if any, made between plaintiff and defendant with reference to the commission in question a detriment to the plaintiff? Answer: Yes.
“No. 4: Was the contract, if any, made between plaintiff and defendant with reference to the commission in question of benefit to the defendant, Edrington? Answer: Yes.

Appellant moved for a judgment in his favor on the verdict, which was denied. Ap-pellee moved for a judgment in his favor non obstante' veredicto, under the provisions of article 2211 of the Revised Statutes, as amended by. the Act of April 25, 1931 (Gen. Laws Regular Session 42d Legislature, chapter 77 [Vernon’s Ann. Civ. St. art 2211]). The court granted said motion, and entered judgment that appellant take nothing against appellee and that appellee take nothing on his cross-action against the Union Central Life Insurance Company.

Opinion

Appellant, by appropriate assignments of error, assails the action of the court in overruling his motion for judgment on the verdict returned by the jury and in rendering judgment against him notwithstanding such verdict. Article 2211, above referred to, provides that the judgment rendered by the court shall conform to the verdict, but authorizes the court, on motion and notice, to render judgment contrary to the verdict when, and only when, a directed verdict in favor of the party urging such motion would have been proper. Appellant is therefore entitled to a reversal of the judgment appealed from unless the court erred in refusing appellee’s request for an instructed verdict.

Appellee contends that the testimony before the court shows as a matter of law, that is, with such certainty that reasonable minds cannot differ as to the effect thereof, that the promise which appellant testified he made to pay a commission if he purchased said farm was wholly without consideration. The testimony above recited shows, or tends to show, that the Schmaley farm had been listed for sale with appellant; that appellee became interested in the purchase thereof as a result of appellant’s efforts; that, when the time arrived for appellant to present ap-pellee as a prospective purchaser to McFarland, the company’s agent authorized to negotiate terms of sale, the sickness of appellant’s wife prevented him from doing so; that appellee agreed to explain his absence and advise McFarland that he expected to be paid a commission. Appellee did in fact purchase the farm on terms satisfactory tt> the life insurance company. Appellant, on the facts recited, would have had reasonable ground for asserting a claim against the life insurance company for commissions on such sale, and, upon denial' of such claim, to- have attempted to establish his right to such commissions by an action in court. Marr-Piper Co. v. Bullis (Tex. Com. App.) 1 S.W.(2d) 572, 575. Such right was a valuable ond, and, according to appellant’s testimony, was voluntarily abandoned by him at the instance of appellee and upon appellee’s express promise to pay the commissions so claimed by him. According to appellant’s testimony, appellee also stated as a ground for his promise to pay such commission himself that he expected to purchase the property on better terms than he would be able to do if appellant was asserting against the life insurance company a right to commissions on such sale. Such statement tended to show an acknowledged benefit to appellee arising out of appellant’s abandonment of his claim against the life insurance company -for commissions. The testimony tended to show not only the yielding of a valuable right and consequent detriment to appellant, but also the conferring of an advantage upon appellee which he at the time deemed valuable. The testimony raised an issue of a valid consideration for appellee’s promise to pay appellant’s commissions, which issue was properly submitted to the jury for determination. Muller v. Riviere, 59 Tex. 640, 642, 46 Am. Rep. 291; Abraham v. Goldberg, 6 Misc. 43, 25 N. Y. S. 1113. Such contract, though oral, being for a consideration deemed by appel-lee to be valuable to him it was not inhibited by the statute of frauds (Rev. St. 1925, art 3995). Mitchell v. Kennady (Tex. Civ. App.) 238 S. W. 293, 294, par. 1, and authorities there cited.

Appellee also contends that the testimony shows as a matter of law that appellant’s representation of the life insurance company was without his knowledge or consent, and that the same was of such character as to defeat his right to claim the promised commissions. Appellee testified that appellant never told him that Preston, purporting to act for the life insurance company, had listed the Schmaley farm with him for sale, and appellant failed to testify affirmatively ■that he did so. Appellant, however, did testify that he disclosed to appellee before he went to talk to McFarland about purchasing the farm that he was expecting a commission if appellee purchased the same, and that appellee promised to so advise McFarland. His testimony on this point is corroborated in substance by the testimony of appellee himself. According to appellant’s testimony, it was only after appellee, in his absence, had .approached McFarland and discussed with ■him the purchase of the property that he proposed to appellant to take no further action ■in the premises and waive any claim for commission against the life insurance company, in consideration of appellee’s promise to pay the same. There is no testimony in the record showing or tending to show that appellant was clothed by the life insurance company, or Preston, purporting to act in its behalf, with any discretion in the matter of advising, negotiating, fixing, or agreeing upon the price to be paid by appellee for said farm, nor that he had any power to bind the ■company by contract with reference thereto. Appellant’s position, as disclosed by the testimony, was that of a mere middleman to bring the parties together so that they might treat with each other and make their own bargain. An ordinary real estate broker with whom land is listed for sale does not necessarily occupy such a position of trust and confidence as to authorize him to offer price and terms of sale nor impose upon him the duty of actively participating in such negotiations. If the duty of a broker is that of a mere middleman to bring the parties together that they may treat with each other and make their own bargain, his representing both parties is in no wise improper or inconsistent. Allen v. Roach (Tex. Com. App.) 292 S. W. 195, 197, and authorities there cited; T. A. Hill & Son v. Patton & Schwartz (Tex. Civ. .App.) 160 S. W. 1155, 1157, par. 5. The testimony above recited fails to show as a matter of law, as contended by appel-lee, that he did not have notice that appellant had theretofore purported to act as agent for the life insurance company, nor that appellant’s relation to such company was of such character as to defeat his right to claim the promised commissions.

Appellee further contends that the evidence shows that he did not purchase said farm but merely entered into an executory contract for the purchase thereof, and that such contract contains provisions authorizing the life insurance company to cancel the same in event of his default in complying with its terms. The testimony showed affirmatively that appellee, shortly after the execution of said contract, entered into possession of said farm, made payments on the purchase price thereof, and was at the time of trial still occupying and claiming the same. The fact that he was not under the terms of the contract entitled to a deed thereto until he had complied with certain stipulations contained therein was immaterial. The contract was valid and enforceable at the option of the company, and was sufficient to support appellant’s claim for commission. Francis v. Foster, 113 Tex. 521, 522, 260 S. W. 1023, and authorities there cited.

None of the matters urged by appellee would have justified the court in giving an instructed verdict in his favor, and they are therefore insufficient to justify the action of the court in rendering judgment in his favor notwithstanding an adverse verdict. The court erred in overruling appellant’s motion to enter judgment on the verdict of the jury and in rendering judgment for appellee notwithstanding the same.

The judgment of the triai court denying appellant a recovery against appellee is reversed, and judgment is here rendered that appellant recover of appellee the sum of $450, commissions on said sale and purchase, together with interest thereon at the rate of 6 per cent, per annum from the 17th day of February, 1930, together with costs accrued in this cause both in this court and in the court below. Otherwise the. judgment of the trial court is affirmed.


author: DUNKLIN, J.

text:
    BLEDSOE v. GRAND LODGE OF UNITED BROTHERS OF FRIENDSHIP OF TEXAS et al.
    No. 12775.
    Court of Civil Appeals of Texas. Fort Worth.
    June 25, 1932.
    Rehearing Denied Sept. 24, 1932.
    Fred S. Dudley and Mike E. Smith, both of Fort Worth, for appellant.
    Johnson & Peden and Nabrit, Atkins & Wesley, all of Houston, for appellees.
   DUNKLIN, J.

This suit was instituted by W. F. Bledsoe against the Grand Lodge of United Brothers of Friendship, hereinafter referred to as the association, to recover a judgment in the sum of $8,800 alleged to be due plaintiff as salary to which he was entitled as Grand Master of the association. W. L. Davis was also made a defendant upon allegations that, contrary to and in violation of the constitution and by-laws of the association, he had assumed to exercise the powers and privileges of the office of Grand Master to the exclusion of plaintiff, who, according to the constitution and by-laws of the association, was rightfully its Grand Master. It was further alleged in the petition that defendant Davis wrongfully usurped the functions of that office on May 3, 1930, and had excluded plaintiff therefrom ever since, and the debt sued for against the association was for the.salary of $300 per month accruing since that date, that amount of compensation being fixed by the constitution and by-laws of the association. It was alleged that under the constitution and bylaws of the association Davis was ineligible to hold the office, by reason of his failure to pay the prescribed dues, the nonpayment of which automatically worked a suspension of his membership in the association.

In the petition plaintiff sought and was-granted a temporary writ of injunction restraining Davis from exercising the functions and privileges of Grand Master. Later that' temporary writ of injunction was dissolved, and from that order of dissolution plaintiff has prosecuted this appeal.

It was alleged that the defendant Grand Lodge of United Brothers of Friendship was incorporated as a fraternal benefit association under the laws of the state. •

Chapter 8, tit. 78, Rev. Oiv. Statutes 1925 (article 4820 et seq.), is the law governing “fraternal benefit societies.” Article 4820 of that chapter authorizes incorporation with powers and under regulations shown in the subsequent articles. Article 4822 of that chapter gives to the society the right to have a “supreme legislative or governing body.” And by article 1 of the constitution of the defendant association, it is provided that the Supreme Lodge is the source of all powers given to the association by the laws of the state of Texas, and is vested with exclusive jurisdiction and power to do and perform many acts that are expressly enumerated in ten separate sections of the article, including the power to determine appeals from subordinate lodges and temples. Other articles of the constitution prescribe how members of the Grand Lodge and the Grand Master shall be elected,'the qualifications of voters at such .elections, who are eligible to election to the Grand Lodge, the duties and powers, of the Grand Master, the method of filling vacancies in office, etc.

It is. a well-settled rule that in order to obtain relief in equity through the means of a temporary writ of injunction, the complainant must show that he has no other adequate legal remedy, and the petition must negative every fact from which it could reasonably b.e'inferred that he has a legal remedy against the wrong complained of. Hill v. Brown (Tex. Com. App.) 237 S. W. 252; Southern Surety Co. v. Texas Oil Clearing House (Tex. Com. App.) 281 S. W. 1045, and decisions there cited; Gillis v. Rosenheimer, 64 Tex. 246.

If, as alleged in plaintiff’s petition, the defendant Davis was wrongfully usurping the office of Grand Master of the association, ip is clear that the governing.body of the association, provided for in the constitution, would have had jurisdiction to oust him therefrom and reinstate plaintiff if he was the rightful holder of that office, as alleged by him. And under the rule of equity just stated, in order to show a right to the writ of injunction prayed for, it was incumbent upon plaintiff to allege and prove that he had applied to the governing body for that relief without success. But the petition contains no allegation that any such attempt had •been made to get relief in that manner, and no excuse has been offered for failure to take that step. And his failure so to do was of itself a sufficient ground for dissolving the writ of injunction that was issued.

The cause of action alleged against 5the association for debt is separate and independent from that alleged against the defendant Davis. There has been no suggestion by appellee of a misjoinder of causes of action and of parties defendant; but aside from that observation it is to be noted that the sole cause of action alleged against Davis- was for his removal from office as Grand Master and for reinstatement of plaintiff to that office. To grant the temporary writ of injunction prayed for would have the effect of determining the sole cause of action against Davis in advance of a hearing on the merits; it appearing from the allegations in plaintiff’s petition and also in the answer filed by Davis that the latter is now exercising the functions of the office under a claim of right thereto. It is elementary that the issuance of a temporary injunction is ancillary to the main cause of action; and the proper function of such a writ is to restrain the doing of some act which would disturb the status of the subject-matter or in some manner prejudice the rights of plaintiff which may be established on a final trial of the merits. We quote the following from 22 Oye. p. 878: “Officers of a corporation -will not be enjoined from acting as such within their chartered powers and in the exercise of discretion, for malfeasance in office or other reasons, even though they are only de facto officers. It is not the province of equity to decide the right to an office, although it may do so as an incident to matters otherwise within its jurisdiction y and where an injunction to prevent an officer from acting as such is really to test the validity of his election it will be refused. Nor is injunction the proper. remedy for the removal of an officer, nor for restoring one wrongfully removed.”

In 14a Corpus Juris, p. 63, the following is said: “While the contrary has been -held, the general rule is well settled in most jurisdictions that a court of equity has no power or jurisdiction to entertain a bill merely for the purpose of reviewing a corporate election; nor to oust parties in possession who claim to have been elected.” See, also, pages 76 to 77 of the same volume.

And in 32 Corpus Juris, p. 240 the following is said: “It is not the province of equity to decide the right to an office although it may do so as an incident to matters otherwise within its jurisdiction; and while there is some authority to the contrary, it has very generally been held that, where an injunction to prevent an officer from acting as such is really to test the validity of his election, it will be refused.”

To grant the temporary writ of injunction prayed for by the plaintiff would clearly be in contravention of the well-established rule announced in those authorities; and also in violation of the further rule in equity announced in 32 Corpus Juris, p. 26: “If the issuance on preliminary application of an injunction mandatory in nature will have the effect of granting to the complainant all the relief that he could obtain upon a final hearing, the application should be refused except in very rare cases, and then only where complainant’s right to the relief is clear and certain.”

And in support of the announcement last quoted the following decisions, among others, are cited by the author: McFadden v. Wiess (Tex. Civ. App.) 168 S. W. 486; Ort v. Bowden (Tex. Civ. App.) 148 S. W. 1145; American Lead Pencil Co. v. Schneegass (C. C.) 178 E. 735. See, also, 14 R. C. L. pp. 314, 315.

Therefore, the action of the trial court in dissolving the temporary writ theretofore issued is sustainable under the doctrine of the authorities last referred to, independently of other reasons.

In view of the foregoing conclusions, the judgment of the trial court dissolving the writ of injunction is affirmed, without a discussion of other grounds urged by appellee in support of the order, a determination of which becomes unnecessary.


author: FUNDERBURK, J.

text:
    FIRST NAT. BANK OF BRECKENRIDGE v. FIRST NAT. BANK OF STAMFORD.
    No. 981.
    Court of Civil Appeals of Texas. Eastland.
    June 3, 1932.
    Rehearing Denied Oct. 7, 1932.
    Goggans & Allison, of’ Dallas, for appellant.
    Wagstaff, Harwell, Wagstaff & Douthit, of Abilene, ánd B. P. Davenport, of Stamford, for appellee.
   FUNDERBURK, J.

This is a suit by the First National Bank of Stamford, hereinafter called the'Staniford bank, against the First National Bank of Breckenridge, hereinafter called the Breckenridge bank, to recover .the sum of $11,016,15, being the balance of a deposit in the original .amount of, $15,000 credited by the latter bank to ,the. former. R. V. Coívert, president and executive officer of the Stamford bank, on June 7, 1930, wrote to M. E. Daniel, president of the Breckenridge bank, as follows:

“I may need the use of $10,000.00 of' your funds- for a few days. • If it is convenient for you to let me have this money I would, be glad to make a demand note, sending it to you for credit of The First National Bank of Stamford for my usé. I can return the funds any day that you may need it. I have a line of credit from one of the big New York banká, however, I do not wish to go to them for any money until along about the first of July. Hoping every thing, is coming good with you,' and with kind regards,
“Very truly yours, R. V. Colvert.”

Before the Breckenridge bank made reply, Colvert called Daniel over long-distance, telephone and asked about the loan. He.stated to Daniel that the Stamford bank was getting low and he wanted to increase,the cash reserve of said bank. Daniel, for the Breckenridge bank, told Colvert he would loan him the money, but that the proceeds of the $15,-000 note to be made by Colvert ■ therefor would be deposited to the credit of the Stamford bank and could not be drawn upon by said bank but must remain in the said Breckenridge bank and be subject to the payment of said note, which could be charged to said account at any time the Breckenridge bank desired to do so, and that interest at 2 per cent, would be paid on the balance kept in the bank until the note (which was to draw 6 per cent.) was discharged. Daniel, in this conversation, told Colvert that, unless this agreement was made, lie would not loan him the money, and Oolvert agreed that the money would remain in defendant bank until the $15,000 note was paid; that 2 per cent, would be paid on the amount kept on deposit; that the note would draw 6 per cent, interest; and that the account was subject to be charged with the note so executed by R. V. Oolvert at any time the Breckenridge bank desired. Following this conversation the Breckenridge bank wrote Colvert as follows:

“Dear Mr. Colvert:
“I enclose herewith blank demand note for your convenience in handling the loans mentioned in your letter of today. We will be glad to handle this for you as per your letter for either of the amounts mentioned therein.
“With kindest personal regards, I am,
“Yours truly, M. E. Daniel, President,
“Per Secretary.”

About four days after receipt of the above letter, Oolvert wrote Daniel, as president of the defendant bank, as follows:

“As per your letter of the 9th inst., I am enclosing herewith my $15,000.00 note, dated June 16th, due on demand. Please place proceeds of this paper to the credit of The First National Bank of Stamford, Texas, for my use.
“Thanking you for this accommodation, and with kindest personal regards,
“Very truly yours, R. Y. Colvert.”

Upon receipt of the last-named letter, the" Breckenridge bank credited the Stamford bank with the sum of $15,000, the amount of the note, and mailed to the latter the usual credit card. The same day that this note was mailed to the Breckenridge bank, R. V. Colvert made out in his own handwriting a . deposit slip for $15,000, and had the bookkeeper credit same to his personal account and charge the amount thereof on the books to the Breckenridge bank. At that time the individual account of Colvert was overdrawn $10,518.19, and, at the close of business the same day, was overdrawn $3,810.24. All the 'entries were made by the bookkeeper solely from the deposit slip, without any advice from the Breckenridge bank. Subsequently, one draft for $5,000 against said deposit in the Breckenridge bank was presented and was paid, upon the assumption that such sum was temporarily needed by the Stamford bank and would be replaced. No demand was ever made for the restoration of said $5,000. The Breckenridge bank mailed several statements to the Stamford bank, showing the state of the account, one mailed November '29, 1930, showing a balance of $11,016.14. At that time there had been no change in the account outside of the said $5,000 draft, except the monthly interest which had been credited. Two of the statements were rendered in response to‘ requests of bank examiners for verification of accounts. On December 10, 1930, the Breckenridge bank applied the balance of the deposit to R. V. Colvert’s unpaid note, wired the Stamford bank of such action, and refused payment of the draft of the Stamford bank upon it for said balance of $11,016.14. No officer or director of the Stamford bank, other than Colvert, had any actual knowledge of the agreement of Colvert with the Breckenridge bank. R. Y. Colvert, at the time of all the transactions mentioned, was insolvent; but neither bank had actual knowledge of such fact. The Breckenridge bank gave no notice to the Stamford bank concerning the' nature of the transaction had through Colvert, save such, if any, as was imputed to it by the knowledge of Colvert. Colvert had no authority to make the agreement for the Stamford bank that the deposit would not be drawn upon or that the note could be charged to the account.

Upon substantially the above facts the trial court concluded “that the said Colvert, at the time he was borrowing the money from the First National Bank, of Breckenridge, was acting absolutely in his own behalf and without the knowledge of the other officers and directors of The First National Bank of Stamford, and that any knowledge of the said Colvert in the transaction would not be imputed to The First National Bank of Stamford, and therefore the plaintiff should recover in this case,” etc.

Judgment was accordingly rendered for the Stamford bank for the amount of the deposit, including the 2 per cent, interest, from which judgment the Breckenridge bank has appealed.

We have reached the conclusion that judgment should have been given for the Breckenridge bank. The Breckenridge bank contends, in effect, that the facts show a bank transaction in which Colvert being the sole representative of the bank, his knowledge is to be imputed to the bank, even though he may have had an individual interest in the matter adverse to the bank. The Stamford bank contends that the facts disclose an individual transaction of Colvert with the Breckenridge bank, from which it seems to be assumed that it can take the benefits of the transaction free of the agreements between Colvert and the Breckenridge bank, which he was without authority to make, and of which it had no knowledge. It is further the latter’s contention that the special agreements between Colvert and the Breckenridge bank were illegal, ultra .vires, and void. As we see it, it is unnecessary for us to determine whether the transaction was valid or void. It is likewise unnecessary to determine whether the facts show a bank transaction or an individual transaction. If the transaction was void as being contrary to law or public policy, then the law will leave the parties where they have placed themselves, and the Stamford hank cannot, for that reason,' recover the balance of the deposit. 10 Tex. Jur. p. 190. From the standpoint of the Stamford hank it was never a party to the transaction and certainly could derive no benefit from an illegal and void contract, even if made in its behalf. If the transaction is to be construed as a valid bank transaction, it necessarily comprehends a valid contract between the two banks. By virtue of such contract, if it existed, there was created between the banks the relation of debtor and creditor; such being the relation between a bank and its depositor. Clearly there was no such contract unless it was the agreement between Colvert and the Breekenridge bank. By that agreement the right of the Stamford bank to the deposit or any part thereof was at all times subject to the superior right of the Breekenridge bank to apply the deposit in discharge of Colvert’s note. This condition put the Stamford bañk to an election to either claim nothing by the transaction or else take subject to the terms of the agreement. Goldstein v. Union Nat. Bank, 109 Tex. 555, 213 S. W. 584.

If the transaction was the individual transaction of Colvert with the Breekenridge bank, the result is no different. If such was the case the principle is controlling which applies to one for whose benefit a contract is made by other parties. That rule is: “The beneficiary * * * can acquire no better right to enforce the contract than that held by the contracting parties themselves. He must accept the contract as it was made and must succeed or fail upon its provisions.” 10 Tex. Jur., Contracts, §§ 109, 116. Suppose it was unquestionably an individual transaction, and the deposit had been credited to Colvert. And further suppose that upon exhibiting the deposit slip the Stamford bank had done just as it did, namely, credited the account of Colvert with the amount, and charged same to the Breekenridge bank. Could it be plausibly contended that, short of any showing of a fraudulent conspiracy or collusion, the Breekenridge bank would have lost the benefits of its agreement giving it the right to charge the note to the deposit at any time it saw fit to do so? No good reason occurs to us for so holding. If the deposit was the individual deposit of Colvert, then what is the basis of the Stamford bank’s claim to it? What gives rise to the relation of debtor and creditor between the two banks such as must exist if the Stamford bank is entitled to recover the balance of the deposit? The only basis disclosed by the record, other than the agreement made between Colvert and the Breekenridge bank, is the simple act of the Stamford bank in crediting $15,000 to the account of Colvert and charging the amount thereof to the Breekenridge bank. The Breekenridge bank had nothing to do with this transaction. It was in direct violation of the agreement between Colvert and the Breekenridge bank. The situation is no different, as we see it, than if Colvert had falsely stated that he had $15,000 on general deposit in the Breekenridge bank, and upon the faith of that statement the Stamford bank had passed to his credit a like amount and had permitted him to draw it out without first confirming the representation.

We are therefore of opinion that the judgment of the trial cqurt should be reversed and judgment here rendered for the Breckenridge bank, which is accordingly so ordered.


author: PER CURIAM.

text:
    J. D. McCOLLOM LUMBER CO. v. WHITFIELD et al.
    Motion Nos. 7349, 7363; No. 7842.
    Court of Civil Appeals of Texas. Austin.
    July 13, 1932.
   PER CURIAM.

- The 'judgment and motion for new trial were entered February 27,1932; appeal bond filed March 15, 1932; record filed in this court May 9, 1932; notice by registered mail immediately sent to ■ attorneys for' appellees of filing and date of filing as provided in R. S. art. 1847, as amended by chapter 64, p. 98, § 1, Gen. Laws Reg. Sess. 42nd Leg. (1931); Vernon’s Ann. Civ. St. art. 1847; motion to affirm on certificate filed June 24, 1932; motion to dismiss appeal and strike cause from the docket on the ground that the record was not filed- within sixty days after order overruling motion for new trial filed July 11, 1932. -

In verified answer to affirm on certificate, appellant’s attorney states that on April 19, 1932, he applied to the district clerk for the record, and was advised it was completed, but had not been proof read, and that it would require a day or two “to arrange and tie the transcript,” and, proof read same, and the clerk agreed to do so and to forward the record to the clerk of this court within the requisite time; arid that he relied upon this representation of the clerk, and did not know that the record had not been filed in time until he was notified of the motion to affirm on certificate. The clerk of this court inadvertently computed the time for filing from the date of filing of the appeal bond, and filed the record when presented on May 9, 1932.

The filing of the record within the time prescribed by law is not jurisdictional, and can be waived by appellee. City of Eagle Lake v. Lakeside Sugar Refining Co. (Tex. Civ. App.) 144 S. W. 709 (error denied).

Court of Civil Appeals rule 8 requires that all motions relating to informalities in the manner of bringing a case into court shall be filed within 30 days after filing the transcript, “otherwise the objection shall be considered as waived, if it can be waived by the party,” ' Under this rule any matter which is not jurisdictional is waived by the failure of the appellee to object thereto by motion filed within the prescribed 30 days. Farmers’ State Bank v. Bell (Tex. Civ. App.> 176 S. W. 922.. ■

It was held in Austin v. Brelsford (Tex. Civ. App.) 289 S. W. 91, that rule 8 did not apply where the clerk had filed the record without authority after the time prescribed1 by law, because under such circumstances the unauthorized act of the clerk' would not be considered as a filing of the transcript provided for in the rule. The cafees cited in support of this holding (Robson v. Moore [Tex. Civ. App.] 166 S. W: 908; and Eagle Lake v. Refining Co. [Tex. Civ. App;] 144 S. W. 709) do not, in our opinion', support this holding. In the former, case it was expressly held that, where the appellee had been notified' of tbie filing of the transcript as provided in Court of Civil Appeals' rule 7b, and for' more than seven months failed to file any’- motion to' dismiss, he “waived the late filing of the transcript.” ' The second case ■held that, where the' case' had been transferred from another Court of Civil Appeals, it would be presumed that the clerk acted upon authority of the court in filing the transcript. It was expressly held in that case that the time of-filing was not jurisdictional, and might be waived by the appellee.

Under rule 7b above it is made the duty of the clerk of the Court of Civil Appeals to notify the appellee of the filing of the record. This provision is carried into the above amendment of Revised Statutes, art. 1847', which further expressly provides that the notice shall be of the date of the filing. The manifest purpose of this statute is to put the appellee on notice of the date of filing the transcript in order that he may make all proper objections within the thirty 'days prescribed by rule 8.' The date of order overruling motion for new trial is a matter of record not only in the transcript but in the trial court, and with notice of - the daté of filing of the transcript it was a simple matter for appellee’s attorney to ascertain whether it had been filed in time. It is stated by the latter in the motion to dismiss that he relied upon the presumption that the clerk followed rule 2, and did not make this checking;

While it is primarily the duty of the clerk to ascertain from the record whether the time for filing has elapsed, it is also-the duty of the appellee to ascertain whether some error has been made in that regard, and to call such error to the court’s attention by motion within thirty days. The mistake of the clerk does not relieve the appel-lee of this duty.

We are of opinion that the failure to file the transcript within the time prescribed by law has been waived in so far as appel-lees can waive it.-

However, this court -is not without power to consider the motion, though filed after the expiration of the prescribed thirty days. Farmers’ State Bank v. Bell, supra.

The record was filed twelve days after the prescribed sixty days had expired. Our docket shows that five eases were filed subsequently to the sixty-day period, and prior to the actual filing of the record. It also appears from the condition of our docket that, had the record been filed on April 27th (the last day), it would not have been reached for submission and decision earlier than it will be reached under its May 9th filing. Ap-pellee has suffered no prejudice or inconvenience by reason of the delay; and, since the attorneys for appellant and appellees have both been derelict, the former in failing to file the record within the statutory time, and . the latter in failing to object on that ground within the thirty days, and the dereliction of each is ascribed to reliance upon the clerk —the one upon the promise of the district clerk to forward the record in time; and the other upon the presumption that the clerk of this court had followed rule 2 — we do not feel called upon to exercise our discretion to consider the motion to dismiss and strike from the record, filed forty-six days after the transcript was filed.

We also feel that this is a proper case to exercise our discretion to permit the filing of the record after the time prescribed by law, in view of all the circumstances above set forth, especially in view of the fact that no prejudice or injury will result therefrom.

Both motions are overruled.

Motions overruled.


author: McClendon, c. j.

text:
    TYSON et al. v. UNION CENTRAL LIFE INS. CO.
    No. 7712, Motion No. 7387.
    Court of Civil Appeals of Texas. Austin.
    Aug. 5, 1932.
    Rehearing Denied Sept. 28, 1932.
    Chambers & Gillis, of Cameron, and E. A. Camp, of Rockdale, for appellants.
    Henry, Biekett & Bickett, of Sam Antonio, for appellee.
   McClendon, c. j.

Suit upon a promissory note and to foreclose a trust deed lien upon real estate in the hands of administrators, whose decedent had purchased the land subject to the lien, but had not assumed the debt. The only question which the appeal presents is whether the district court committed error in decreeing an order of sale instead of certifying its judgment of foreclosure to the county court for execution,

The question presented arises out of the following undisputed facts:

February 6, 1920, M. Y. Tyson (then the owner of the property which consisted of 294 acres of farm land) and wife executed a trust deed thereon, securing M. V. Tyson’s note to the insurance company (Union Central Life Insurance Company) of $6,000, due January 1, 1931, and eleven interest coupon notes maturing annually.

' February 5, 1929, the bank (Cameron State Bank) acquired the land subject to the insurance company’s trust deed lien. February 26, 1929, the bank, conveyed the land to C. W. Tyson, subject to the insurance company’s trust deed lien; the grantee executing vendor’s lien notes in favor of the bank, as a part of the purchase price. December 6, 1930, C. W. Tyson died intestate, and December 30, 1930, Averitt and Newton, in whose favor Mrs. Daisy Tyson (widow of C. W. Tyson) waived her right to be appointed administratrix, were appointed administrators by the county court of Milam county, and took possession of and are administering the estate including the land in suit.

The first twelve Interest coupon notes were paid. Default was made in the thirteenth and in the principal note; and this suit was brought in the district court of Milam county by the insurance company against M. V. Tyson personally thereon, and against him, his wife, the bank, the administrators, and Mrs, Daisy Tyson, for foreclosure of the trust deed lien. M. V. Tyson and wife defaulted, and the bank filed a disclaimer of any interest in the land. Both by verified plea and exceptions to plaintiff’s petition, the administrators challenged the jurisdiction of the district court on the ground that the land was in the custody of the probate (county) court, which latter had exclusive jurisdiction of the foreclosure proceeding. They further, ‘by exception, challenged the jurisdiction of the district court to decree a foreclosure sale for a like reason. This plea and these exceptions were overruled, and judgment was rendered against M. V. Tyson personally upon the principal and interest notes in suit, and against all other defendants foreclosing the trust deed lien and ordering the property sold in satisfaction of the judgment, any excess to be paid to the administrators.

The administrators, who alone have appealed, concede that the district court properly assumed jurisdiction to render judgment upon the notes and to foreclose the trust deed lien; but having done so, they contend that it exhausted its jurisdiction over the property, and must certify the judgment to the county court for execution in 'so far as resort to the property foreclosed upon is concerned.

The insurance company contends for jurisdiction in the district court to order the sale, upon the ground that this was essential to the adjustment of the equities of all the parties, the county court’s jurisdiction in that regard being wanting or inadequate, and especially so since its debt was not assumed by Tyson, and appellee had no claim, and had asserted none, against his estate.

We concur in appellants’ above contention.

The general principles which control the question presented are so well settled in the jurisprudence of this state that, at this late date, it is only necessary to state them.

Generally speaking, where the county court, sitting in probate, has taken possession, through its administrators, of property of a decedent whose estate is being administered, its jurisdiction over the property is exclusive and cannot be interfered with by any other courts This principle is recognized both in the federal and state courts. Robertson’s Adm’x v. Paul, 16 Tex. 472; Buchanan v. Monroe, 22 Tex. 637; Atchison v. Smith, 25 Tex. 228; Cannon v. McDaniel, 46 Tex. 303; Rogers v. Kennard, 54 Tex. 30; Smithwick v. Kelly, 79 Tex. 564, 15 S. W. 486; Whitmire v. May, 96 Tex. 317, 72 S. W. 375, 376; Lauraine v. Ashe, 100 Tex. 69, 191 S. W. 563, 196 S. W. 501; Gregory v. Ward, 118 Tex. 526, 18 S.W.(2d) 1049; Byers v. McAuley, 149 U. S. 608, 13 S. Ct. 906, 37 L. Ed. 867.

The rule applies, even though it is necessary to invoke the jurisdiction of the district court to establish a claim against the property or adjust the equities of the parties therein.

A different rule, of course, applies where the property does not in fact belong to the estate. Weeks v. Goldstein (Tex. Civ. App.) 288 S. W. 540. And sales or orders of sale have been upheld or not disturbed by the appellate courts, where the administrator was a party to the district court proceeding, and had acquiesced in or not appealed from the judgment ordering the sale. Nevill v. Hinkle (Tex. Civ. App.) 276 S. W. 324; Willis v. Graf (Tex. Civ. App.) 257 S. W. 664 (error dismissed). Under the facts of these cases the district court manifestly had jurisdiction to adjudicate the lien and decree the' foreclosure; and since the representatives of the estate were before the court and bound by the decree, its order of sale could not be attacked collaterally, or on appeal by parties other than the representatives of the estate.

The fact that the lien is for purchase money or of such other character as to be superior to claims for funeral expenses, expenses of last illness and of administration, and allowances to the widow and children, does not militate against this rule. Robertson’s Adm’x v. Paul; Buchanan v. Monroe; Cannon v. McDaniel; Whitmire v. May, supra.

Nor is the rule different where the decedent was not personally bound upon the lien debt, and the lien creditor has no claim against his estate. This point is adverted to in Whitmire v. May, supra (Gaines, G. J., writing), as follows: “When a mortgagor has sold the property subject to the lien, and the vendee has not assumed the mortgage, the latter does not owe the debt. It is a mere incumbrance on a specific piece of property. But since it is held that the mortgagee must proceed in the probate court to enforce his lien, it must follow that he has the right to make oath to his claim, not as a claim against the entire estate, but as a claim against a specific part thereof, and to have it allowed and approved or otherwise established as provided by law.”

We know of but one exception to the general rule above stated; and that is where the situation is such that adequate relief cannot be afforded through sale in the probate court. Such a situation was presented in Lauraine v. Masterson (Tex. Civ. App.) 193 S. W. 708, and Lauraine v. Vaughn (Tex. Civ. App.) 193 S. W. 712 (companion cases in which Judge Graves dissented and writs of error were refused). Briefly, the facts there were these: Mrs. Allen and her son jointly had large real estate holdings in East Texas, upon which were liens (mortgage and judgment) securing joint debts to various creditors. Suit was brought in the district court by a creditor, and a receiver of the joint property was appointed. Thereafter, and pending the receivership, Mrs. Allen died, and her administrator applied to the Supreme Court for a writ of mandamus to compel the district judge to vacate the receivership as to Mrs. Allen’s estate. The application was denied upon the holding “that the District Court has the power to maintain in the suit there pending its possession- of the property through the receiver until its jurisdiction over the cause is at an end; and as it is not made to appear here that that jurisdiction is exhausted, this court will not issue a man-damns to oust its possession of the property.”

The following is quoted from the opinion (Phillips, O. X, writing): “To make our ruling plain, it is. to be understood that only the Probate Court has jurisdiction to sell for the payment of debts the property of a decedent upon whose estate administration has been commenced or is pending. Rogers v. Kennard, 54 Tex. 30; Smithwick v. Kelly, 79 Tex. 564, 15 S. W. 486; Atchison v. Smith, 25 Tex. 228. Our holding is made with clear reference to the want of such power in the District Court.. As applied to the character of ease'last discussed, — where, notwithstanding a pending administration, the jurisdiction of the District Court may be availed of for the settlement of questions affecting the estate which the powers of the Probate Court are inadequate to determine, this is also the rule. The judgment in such a ease is to be performed through the Probate Court, and if a sale of property is necessary to its performance it must be made by that court. Cannon v. McDaniel, supra. An attempted exercise of this power by the District Court is not here involved; nor, with administration upon the estate of Mrs. Allen commenced, is it to be assumed that its exercise will be attempted. The present case concerns alone a jurisdiction which is entirely distinct from such power, and which, from aught that here appears, may be properly exercised by the District Court.” 109 Tex. 69, 191 S. W. 563, 566.

Upon rehearing the opinion was modified to leave open the question whether sale could properly be ordered by the district court under the facts of that case. After reiterating the views expressed in the original opinion as embodying the general rule, the court say: “Whether there is anything in this case as it stands in the District Court which renders it not subject to the general rule, we do not in this proceeding feel called upon to determine. The record of the cause is not before us; and this, of itself, would preclude its determination. We decline to affirm that the case is not subject to the rule, and deem it preferable that we here express no opinion upon the question. The original opinion is therefore modified to the extent that it indicates a holding upon the authority of the District Court in the suit there pending to direct a sale of the decedent’s interest in the property. The determination of the question as arising in such a case was not necessary to the disposition of the mandamus proceeding; it is left open for decision until such time as it may be properly presented.” 109 Tex. 69, 196 S. W. 501.

The Galveston Court’s holding when the question later came before it in the two above causes in 193 S. W. is rested upon the inadequacy of the remedy which the county court could afford, and this manifestly for the reason that it could not order a sale of Mrs. Allen’s son’s interest.' The district court alone could afford to the joint creditors the relief to which they were entitled as regards the joint property.

In Stewart v. Webb (Tex. Civ. App.) 156 S. W. 537, 539, there were questions of sure-tyship and subrogation, presenting complications which do not arise in the case at bar. Whether these differences call for a different rule in the two cases, we deem unnecessary to pass upon. In reaching the conclusion that the. district court acquired jurisdiction for all purposes including sale of the property in the hands of the administrator, the court say: “In this distinct proceeding, if the jurisdiction.of the district court attaches, we think it is to be invoked practically for all purposes, for the reason that upon examination of the statutes with reference to the divesture of title and enforcement of claims, this character of judgment, we think, clearly is not within the purview of * . * * those statutes for that purpose.”

This conclusion, in our opinion, is in direct conflict with the holdings of the Supreme Court, the latest expression of which is to be found in Gregory v. Ward, supra. The language of those statutes apply to all judgments where satisfaction is to be had from property in the hands of the administrator. The only exception so far recognized by the Supreme Court is where the inadequacy of remedy in the county court extends to the sale of the property and application of the proceeds to the satisfaction of the judgment. In this regard the opinion in Stewart v. Webb, reads: “The rights of Smith and defendants Callis are just as prominent and substantive as the rights of the estate;, they have equities with reference to this estate, and the defendant Smith also would be clearly entitled to subrogation under certain conditions, and the kind and character of sale contemplated by the probate statutes being to some extent different from the order of sale following a judgment in the district court, we can see no reason why the district court in furtherance of the execution of his judgment should not issue the order of sale, and a sale to be made thereunder, and that the independent parties in this suit, on account of their rights, affected by this litigation have that right without their equities being affected by the probate statutes with reference to the order of sale contemplated in those enactments. Articles 3488, 3489, 3494, 3495, 3496, New Revised Statutes.”

It may be that under the peculiar facts of that case, a sale by the county court would not ■ afford adequate protection to all the ■parties. If that be true, then the correctness of the decision on this point must be conceded. The court does not point out in what respect the county court’s jurisdiction in the matter of sale was inadequate, or in what way such sale would be detrimental to the rights of any party to the suit. In so far as concerns the instant ease, the county court has every power to protect the rights of appellant, which the district court has. It can make the same character of sale the district court can make, and can in like manner give possession to the purchaser. On the other hand,' the county court has wide discretionary powers, by means of which, while enforcing the rights of lienholders, it may also protect the interests of the estate, as owner of the equity of redemption — powers which are wholly wanting in the district court in ordinary foreclosure proceedings. There is no right of appellee in the property foreclosed upon, which cannot be protected as fully in the county court as it can in the district court, and there is no claim or burden which the county court may impose upon the property which could not be imposed by the district court. The principles laid down in Lauraine v. Ashe, Gregory v; Ward, and other cited cases, leave no room for substantial doubt in our mind that the sale should be effected through the county court.

That portion of the trial court’s judgment ordering sale of the property foreclosed upon is reformed so as to provide that the judgment be certified to the county court for sale of the property and application of the proceeds in accordance with the trial court’s judgment; which, in all other respects, is affirmed.

Reformed and affirmed.

On Appellee’s Motion for Rehearing.

In predicating error upon our holding that in making sale of the property the probate court has every power which, the district court has to protect appellee’s rights, appel-lee points out that the manifest purpose of appellants is to delay the sale in order that the estate may benefit by use of the property, and in order to subject the proceeds of sale to payment of expenses of funeral, last illness and administration, and of allowances, attorney’s fees, etc.

' What the administrators may urge or claim in the probate court has no bearing upon the question of its jurisdiction; nor is such question affected by the wider powers of that court over those of the district court in making sales. The judge and not the administrators will pass upon the orders of that court. The duties and obligations of fairness and impartiality to all parties litigant, and the presumption that those duties and obligations will be performed, apply alike to the official acts of the judges of each of these courts. The wider discretion vested in the probate^ judge is for a manifestly salutary purpose)' and against abuse of that discretion ample protection is afforded in the right of appeal. Proceeds of the sale (until appellee’s debt is satisfied) are not subject to the claims contended for by the administrators; and appellee’s right in this regard cannot be prejudiced or impaired by sale through the probate court. The property is an asset of the estate and is in the custody of the probate court, whose jurisdiction to administer thereon is exclusive, excepting only where its powers adequately to protect the interests of all parties is wanting. Such inadequacy does not appear in the instant case,, and the jurisdiction of the probate court should therefore not be infringed.

The motion is overruled.

Overruled.


author: WILLSON, O. J. LEVY, J.

text:
    TEXAS & P. RY. CO. v. WOODARD.
    No. 4229.
    Court of Civil Appeals of Texas. Texarkana.
    July 7, 1932.
    Rehearing Denied Sept. 22, 1932.

      Bibb & Bibb, of Marshall, for appellant.
    S. P. Jones, Franklin Jones, and Percy Woodard, all of Marshall, for appellee.
   WILLSON, O. J.

(after stating the case as above).

It will be noted, on looking to the part of appellee’s petition set out in the statement above, that his suit (except for the $7.52 he alleged he paid to be carried back to Alexandria) was not for injury to either his person or property, but was entirely for mental suffering he was subjected to as a result of conduct of employees of appellant in demanding in the presence of other passengers that he pay again, or leave the train, fare he had already paid, in threatening if he did not do that to arrest him, and in describing him as a “hard-boiled negro.” It is held that “actual damages cannot be recovered for mental suffering, where there is no physical injury, no injury to property, nor other element of actual damages.” Gulf, C. & S. F. Ry. Co. v. Trott, 86 Tex. 412, 25 S. W. 419, 40 Am. St. Rep. 866, and see Malin & Browder v. McCutcheon, 33 Tex. Civ. App. 387, 76 S. W. 586; Texas Electric R. Co. v. Price (Tex. Civ. App.) 218 S. W. 1092; Williams V. Yoe, 19 Tex. Civ. App. 281, 46 S. W. 659; Texas Power & Light Co. v. Taylor (Tex. Civ. App.) 201 S. W. 205; Ft. Worth & R. G. Ry. Co. v. Jones, 38 Tex. Civ. App. 129, 85 S. W. 37; Stein v. Greenbaum (Tex. Civ. App.) 203 S. W. 809; Southwestern Bell Tel. Co. v. Cook (Tex. Civ. App.) 30 S.W.(2d) 497 ; 3 Cooley on Contracts, §§ 2144, 2145 ; 3 Page on Contracts, §, 1582; 3 Sutherland on Damages, §§ 976, 980. It follows that a cause of action for a sum in excess of $7.52 was not stated in appel-lee’s petition. As the district court was without power to hear and determine the suit so far as it was for the $7.52 (Lissner v. Stewart (Tex. Civ. App.) 147 S. W. 610; City of Desdemona v. Wilhite (Tex. Civ. App.) 297 S. W. 874; Gaddis v. Tel. Co., 33 Tex. Civ. App. 391, 77 S. W. 37), it follows, further, that this court is without jurisdiction of the appeal, and cannot do otherwise than dismiss same. Western Union Tel. Co. v. Arnold, 97 Tex. 365, 77 S. W. 249, 79 S. W. 8; City of Ft. Worth v. Zanecetti (Tex. Com. App.) 29 S.W.(2d) 958; A. B. Richards Medicine Co. v. Graves (Tex. Civ. App.) 273 S. W. 702; Malin & Browder v. McCutcheon, 33 Tex. Civ. App. 387, 76 S. W. 586.

Accordingly the appeal is dismissed.

On Rehearing.

The motion of appellee for a rehearing is overruled.

The motion of appellant insisting that this court, instead of dismissing the appeal, should have reversed the judgment of the court below and dismissed the cause, is sustained, and the judgment rendered here June 23, 1932, will be modified accordingly. Pecos & N. T. Ry. Co. v. Canyon Coal Co., 102 Tex. 478, 119 S. W. 294.

LEVY, J.

(dissenting).

It is not doubted that the rule obtains in this state, as is clearly stated in the majority opinion, that in cases of the merely negligent act of the defendant mental suffering is not recognized as an element of damage wh'ere there has been no physical injury. Gulf, C. & S. F. Ry. Co. v. Trott, 86 Tex. 412, 25 S. W. 419, 40 Am. St. Rep. 866, and other cases. But the rule is otherwise in certain eases such as where there is negligent infraction of a contractual obligation, or where there is affirmative or active negligence attended with circumstances of indignity. Hale v. Bonner, 82 Tex. 33, 17 S. W. 605, 14 L. R. A. 336, 27 Am. St. Rep. 850; International & G. N. R. Co. v. Anchonda, 33 Tex. Civ. App. 24, 75 S. W. 557; Lancaster v. Mebane (Tex. Civ. App.) 260 S. W. 252; Chicago, St. L. & P. R. Co. v. Holdridge, 118 Ind. 281, 20 N. E. 837; Austro-American Steamship Co. v. Thomas (C. C. A.) 248 F. 231, L. R. A. 1918D, 873; 3 Thompson on Neg., §§ 3195, 3288. And it is believed, in view of the attending circumstances in this case, the rule allowing mental suffering, proximately resulting from a legal wrong, as an element of damages is applicable.

In the facts set forth in the plaintiff’s petition there was a legal wrong, giving the right of action, of a breach of a valid contract of carriage between the passenger and the carrier, attended by circumstances of certain misconduct or negligent act of the carrier’s employee. The employee refused to accept the proffered return ticket, and notified the passenger in the presence of other passengers that he must pay the fare to Alexandria when no fare was due or must leave the train, and threatened the passenger with arrest unless such order was obeyed. The carrier’s duty extended not only to carry the passenger on that train from New Orleans to Alexandria on his regularly issued and paid-for return ticket without his paying further fare, but also included protection from acts of annoyance or indignity on the part of the carrier’s employees.

It is believed that tie passenger was entitled to be awarded damages for the sense of indignity and annoyance visited upon Mm by tbe threatened expulsion from the train, although he paid the illegal fare rather than be ejected, and although there has been no physical injury.


author: PELPHREY, C. J.

text:
    DALLAS RY. & TERMINAL CO. v. CURTIS.
    No. 2695.
    Court of Civil Appeals of Texas. El Paso.
    Sept. 15, 1932.
    Rehearing Denied Oct. 6, 1932.
    Worsham, Rollins, Burford, Ryburn & Hincks, of Dallas, for appellant.
    John G. Wilson, of Dallas, for appellee.
   PELPHREY, C. J.

Appellee, as next friend for his minor daughter, Dorothy Curtis, filed this suit in the district court of Dallas county to recover damages for personal injuries alleged to have been received while she was boarding a street car of appellant, at which time it was alleged that the motorman closed the door and raised the step before said minor daughter had time to enter the car, causing injuries to her leg from which the disease osteomyelitis developed.

Thirty-five special issues were submitted to a jury, and in response thereto the jury found that Dorothy Curtis, on or about the 25th day of August, 1929, attempted to board a street car of appellant; that while attempting to board the street car, she was injured by being caught in the step of the entrance door of the street car; that the motorman failed to keep the door open and the step lowered for a sufficient length of time to enable her to safely enter the car; that such failure was negligence and a proximate cause of the injuries sustained by her; that the motorman failed to keep a lookout for her to see that she was free of the step before raising it; that such failure to keep a lookout was negligence and a proximate cause of the injuries; that Dorothy. Curtis did not attempt to board a street car of appellant on May 27, 1929; that the physical condition of Dorothy Curtis resulted proximately from getting her foot and leg caught in the step of appellant’s car on or about August 25, 1929; that the injuries were not the result of an unavoidable accident; that Mrs. Curtis did not fail to exercise ordinary care in.assisting Dorothy to board the car; that Mrs. Curtis did not fail to exercise ordinary care in keeping a lookout for Dorothy while they were boarding the ear; that the diseased condition of Dorothy’s leg did not result from some cause other than getting her foot and leg caught in the step of appellant’s car; that Mrs. Curtis did not fail to exercise ordinary care with respect to advising the motorman that Dorothy was yet to board the car; that Mrs. Curtis did not fail to exercise ordinary care in the matter of holding Dorothy while she was about to board the car; that Mrs. 'Curtis dtó not fail to exercise ordinary care in the matter of directing Dorothy’s movements in boarding the car; that Mrs. Curtis did not fail to exercise ordinary care in leaving Dorothy upon the street unattended while she (Mrs. Curtis) boarded the car; that the motor-man controlled the movement of the step or door which caught and injured Dorothy; that the injuries to Dorothy proximately resulted from negligence of the operator of the street car in causing the step to close on her foot and leg while she was boarding the street car, on or about August 25, 1929; that the street car was not equipped with a treadle door at • the front end thereof; and that $11,000 would - reasonably compensate Dorothy for the injuries received by her. Upon these findings, judgment was rendered for appellee in the sum of $11,000, and an appeal has been perfected to this court.

Appellant contends that the trial court" should have instructed a verdict in its favor' because the evidence wholly fails to show any actionable negligence on its part; that the judgment should have been set aside because the overwhelming weight of the evidence showed that Dorothy was not injured-on August 25th, but. only received a slight-injury to her hand on May 27th from which osteomyelitis could not have developed; that the court erred in striking out appellant’s-plea of contributory negligence on the part of Dorothy Curtis; that the court erred in certain instructions given to the jury; that the court erred in refusing to permit appellant to ask Dr. Milliken certain questions as-to what the book of Dr. Willis Campbell contained as to osteomyelitis; that certain arguments of appellee’s counsel were inflammatory and prejudicial; and that certain answers of the jury were in conflict. After a careful examination of the whole record, we have concluded that the judgment must be reversed and the cause remanded because of the improper argument, and we shall, first-address ourselves to a consideration of those assignments and later in the opinion consider those which we deem it necessary to discuss in view of a reversal.

In opening argument counsel for ap-pellee made the following statement: “This thing happened, Gentlemen, and it is somebody else’s baby and not yours, and I asked you this question when you were impannel-ed as jurors and you remember it, if you will try this case just like you would want one tried for yourself, and you said you would. All right, that means that you take that little baby over there, sitting in the lap of her mother, injured as she is injured, (at this point plaintiffs counsel, John G. Wilson, pointed to and looked towards the minor plaintiff, Dorothy Curtis, who was sitting in the lap of her mother, Mrs. D. E. Curtis, at the counsel table, and - was wearing over her diseased limb a steel brace extending from her foot to a point about midway between her knee and thigh) how much would it take to put your little baby, whose arms will go to your neck' this evening as you come home and put a baby kiss upon your cheek, how much would it take to cause you to put your child in the position of that little baby over there?” And again in closing argument he stated: “Gentlemen of the Jury, I want you to go out to the jury room and give this child just such a .verdict as you would want your child to- have, and don’t let the Street Railway send her away empty handed.”

Exceptions to the above argument were taken after the argument was concluded and those exceptions are made the basis of appellant’s fourteenth and fifteenth assignments of error. This ' argument' was, we' think, clearly improper, in that it appealed to the feeling of the jury, and we cannot say that it had no effect upon the jury in their de-, termination of both the question of negligence and the amount awarded.'

Unless we can say that, under the circumstances, it affirmatively appears that no prejudice resulted, it is our duty to reverse the judgment. Floyd v. Fidelity Union Casualty Co. (Tex. Com. App.) 39 S.W.(2d) 1091; Bell v. Blackwell (Tex. Com. App.) 283 S. W. 765; Behringer v. South Plains Coaches (Tex. Com. App.) 13 S.W.(2d) 334; Hubb Diggs Co. v. Bell, 116 Tex. 427, 293 S. W. 808.

In the case at bar it is not definitely shown that Dorothy has suffered any permanent injury or will suffer any permanent deformity or crookedness in her limb, therefore a judgment of $11,000 would certainly be subject to question on the ground of - being excessive.

In view of the fact that the judgment must be reversed, it would 'be improper ■ to enter into a discussion of the questions rais-. ed. by appellant’s first, second, third, and fourth propositions.

We are of opinion that the court properly sustained appellee’s demurrer to apr pellant’s plea of contributory negligence on the part of Dorothy. It is undisputed that she was only five years of age at the time in question, and we cannot believe that a child of such tender years could be held liable for her conduct in boarding a street car as the record here shows she was doing at the time. Texas & P. Ry. Co. v. Fletcher, 6 Tex. Civ. App. 736, 26 S. W. 446; Texas & N. O. R. Co. v. Brouillete, 61 Tex. Civ. App. 619, 130 S. W. 886 (writ refused); Cook v. Houston Direct Nav. Co., 76 Tex. 358, 13 S. W. 475, 18 Am. St. Rep. 52; Evansich v. Gulf, C. & S. F. Ry. Co., 57 Tex. 126, 44 Am. Rep. 586.

The court properly excluded the question addressed to Dr. Milliken as to what the text-hook on orthopedic surgery, written hy Dr. Willis Campbell, had to say as to the development of osteomyelitis. St. Louis, A. & T. Ry. Co. v. Jones (Tex. Sup.) 14 S. W. 309; Boehringer v. A. B. Richards Medicine Co., 9 Tex. Civ. App. 284, 29 S. W. 508; Burt v. State, 38 Tex. Cr. R. 397, 40 S. W. 1000, 43 S. W. 344, 39 L. R. A. 305, 330; Gulf, C. & S. F. R. Co. v. Farmer (Tex. Civ. App.) 108 S. W. 729.

In view of another trial it is unnecessary to discuss the remaining assignments.

The Judgment is reversed, and the cause remanded for the reasons above stated.


author: LEVY, J.

text:
    TEXARKANA ELECTRIC CO. v. PUTCH.
    No. 4241.
    Court of Civil Appeals of Texas. Texarkana.
    Sept. 22, 1932.

      S. H. Mayes, of Little Rock, Ark., and Rodgers & Rodgers, of Texarkana, for appellant.
    S. P. Jones and Franklin Jones, both of Marshall, and Keeney & Moseley, of Texar-kana, for appellee.
   LEVY, J.

(after stating the case as above).

The points on appeal complain (1) of submitting to the jury special issues 1 to 6, as being without any evidence to warrant or support them, and (2) the contributory negligence of the appellee was the proximate cause of his injury, and (3) the amount of damages awarded is excessive. Issues 1, 2, and 3, as may be observed, require at the hands of the jury the finding, first, of the existence or not of the giving of adequate warning of the approach of the truck, and, then, of whether or not the failure to give such warning constituted negligence proximately causing injury to appellee. While the law does not make the driver of a motor vehicle upon the public street or highway an insurer against injury which may happen in consequence of his being there, yet it demands of him the exercise of what is described to be reasonable or ordinary care. This degree of care is a care and foresight commensurate with the danger to others which attend the particular situation. In this particular case there was evidence going to show, and at least raising the issue, that the driver of the truck endeavored to drive between the street car and the parked automobile while the street car was stopped. The passageway between the parked automobile and the street car while it was at a standstill was admittedly so narrow as to render the act of attempting to drive the truck between them dangerous, especially to the appellee, who at the time was standing by the automobile, completely absorbed, as may be inferred, in his work of putting oil in the automobile. The driver of the truck saw the appellee putting the oil in the automobile. The circumstances appear such as to require the driver of the truck to give timely warning of an adequate nature to the áppellee of his intention to pass. He owed to the latter the duty of exercising reasonable care to avoid injuring him while making the attempt. There is no evidence that the truck driver did blow the horn or otherwise give warning of his approach and attempt to pass. There is affirmative evidence that the driver did not blow the horn or give warning as he attempted to pass. The evidence is simply undisputed that the driver did not blow the horn or give any warning. The issues as submitted were therefore relevant to a particular matter in respect to which some evidence had been given. It may not be said there was error in giving an instruction or submitting an issue to the jury having no basis or foundation in the evidence in the case.

The other issues of negligence complained of likewise involve the use of reasonable care under the circumstances. There is evidence going to show that the truck driver did not attempt to drive between the street car and the parked automobile while the street car w^s at a standstill. But there is evidence to the contrary, and that the street car was stopped and at a standstill, and the truck driver attempted to drive between the parked automobile and the street car, striking the appellee while making the attempt.' There was affirmative evidence that there was not sufficient room or space between the parked automobile and the street car when at a standstill for a truck to safely pass without striking appellee, standing at the place he was.

The issue of contributory negligence vel non was, it is thought, in the circumstances appearing purely a matter for decision by the jury. There was evidence going to show that the appellee was intent upon the work he was doing and did not know of the approach- or attempt at approach of the truck and was struck by the truck while at work pouring oil in the parked automobile. The jury found as a fact that he had not stepped back and in the street when struck.

It may be that the amount of damages is large, but it is quite difficult for the appellate court to say the award made by the jury is grossly excessive. It was in the province of the jury to consider all the factual elements bearing on the injury and its extent, and- the care and attention exercised by ap-pellee to attend and nurse it, and to take the view of the evidence that the appellee was seriously and permanently injured solely by reason of being struck by the truck. There is the entire absence of any bias or prejudice appearing on the part of the jury in making the award as done. It is believed after due consideration of the entire record that the appellate court would not be warranted in disturbing the verdict of the jury.

The judgment is affirmed.


text:
    BARNES v. McCULLOCH.
    No. 7687.
    Court of Civil Appeals of Texas. Austin.
    July 27, 1932.
    Rehearing Denied Sept. 28, 1932.

      ' Baker & Baker, of Coleman, for appellant.
   McClendon, c. j.

This suit was in form one in trespass to try title and for damages. The real and only issue in the case was whether McCulloch, who was a tenant of Barnes upon the property in suit during the year 1930, had a rental contract from Barnes covering the year 1931. This issue was submitted to the jury and answered in favor of McCulloch. From a judgment upon this finding Barnes has appealed.

We have reached the conclusion that improper argument to the jury by attorneys for appellee presents reversible error.

The evidence upon the issue whether a verbal rental contract had been made was sharply conflicting, that of McCulloch and wife affirming the making of such contract and that of Barnes denying it.

One of McCulloch’s attorneys in his argument to the jury stated, “Gentlemen of the jury, let the defendant, H. M. McCulloch go ahead for the balance of this year (meaning the year 1931) and raise a crop on those premises.” This statement was objected to as being prejudicial, inflammatory, and irrelevant to the issue before the jury. When the objection was made, McCulloch’s attorney replied in the presence and hearing of the jury: “Gentlemen of the jury, do not permit the defendant t,o go ahead and make a crop, but throw him out in the lane.” This reply was objected to for like reasons, and the court instructed the jury not to consider the argument. Another attorney of McCulloch, in his jury argument, stated: “Gentlemen of the jury, it is up to you as to whether you will put these people (meaning the defendant, his wife and family) out in the lane or let them make a crop on this place this year.” Like objections were made to this argument and the court stated to the jury: “Gentlemen, you will not consider what, the lawyers in this case say you will be governed solely by the evidence given on the witness stand, in answering the issue submitted.”

It is urged that the argument was improper, prejudicial, and inflammatory, and that its deleterious effect was not removed by the court’s instructions to the jury. The argument was clearly improper. It was an appeal to the jury to decide the question propounded, not upon its merits, but in such a way as to give appellee possession of the land during 1931. It charged the jury with the responsibility of depriving defendant and his wife and family of a home and “putting them out in the lane.” That this was an appeal to the sympathetic emotions of the jury is manifest. Its reiteration twice after objection and adverse ruling of the court, manifests a deliberate purpose to secure its beneficial effects, and emphasizes the importance of those effects in the minds of the defendant’s attorneys.

There have been a number of recent decisions by the Commission of Appeals upon the subject of improper argument of counsel. From these the general rule may be deduced that, where the case is one in which the situation of one of the parties is such as to appeal to the sympathy of men of normal emotions, and the argument is such as to excite such sympathy to action, the judgment will be reversed, even though the jury may be instructed to disregard the argument, unless it can be said, from an examination of the entire record, that all reasonable doubt as to the deleterious effect of the argument has been removed. While, of course, we have no1 means of knowing whether the argument influenced the jury, its character was such that it was calculated bo do so, and, when we consider the situation of the parties (landlord and tenant), the consequences to the defendant, his wife and family, of an adverse finding, and the sharp conflict in the testimony, a very substantial doubt supports the conclusion that the argument, twice repeated over objection and adverse ruling, had the effect which counsel’s persistent efforts to press it upon the jury manifest they intended it should have. See upon this subject Floyd v. Fidelity Union Casualty Co. (Tex. Com. App.) 24 S.W.(2d) 363; 2 Tex. Jur. pp. 222 et, seq., § 147.

The trial court’s judgment is reversed and the cause remanded.

On Appellee’s Motion for Rehearing.

The motion is predicated upon the sole •contention that we erred in overruling a motion to dismiss the appeal setting up an alleged settlement of the controversy which rendered the questions in the case moot. The motion to dismiss and the contest thereof presented conflicting affidavits upon the controlling issue whether there had been a settlement for the use of the premises for 1931. The issue of fact thus presented is one to be litigated upon a further trial of the case in the court below, and cannot be determined upon the present appeal.

' The motion is overruled.


author: SELLERS, J.

text:
    LOYAL FRIENDS OF AMERICA BENEV. ASS’N v. STEWARD.
    No. 4223.
    Court of Civil Appeals of Texas. Texarkana.
    June 24, 1932.
    Rehearing Denied July 7, 1932.
    Keeney & Moseley, of Texarkana, for appellant.
    Wm. V. Brown, of Texarkana, for appel-lee.
   SELLERS, J.

George Steward filed this suit in the district court of Bowie county to recover upon a certificate of insurance issued by appellant, Loyal Friends of America Benevolent Association, upon the life of Carrie Steward, who was the wife of appellee. The petition of appellee alleged that the certificate was issued on November 5, 1925, for the sum of $500 to be paid to appellee as beneficiary in said certificate on the death of Carrie Steward in two installments or reliefs. The first installment of $200 was due and paid immediately on the death of the insured, who died April 17, 1930, and this suit is to recover the second installment of $300 which it is alleged is long paát due and unpaid. The certificate sued on contains the following provision:

“Class A Membership Certificate “No. 16600 .Age 37
“That if the holder of this certificate has complied with all the laws, constitution, rules and regulations of the Loyal Friends of America Benevolent Association as may now be in force, or that may hereafter be in force, and which shall be in force at the time of the death of said Comrade of the Loyal Friends of America Benevolent Association will cause to be paid to the relatives named below a portion of the Burial-Relief, not exceeding the sum of $200.00, that may have been paid in by the membership of the Loyal Friends of America Benevolent Association, within 24 hours after receipt of satisfactory proofs of death of the said Comrade herein named, and the balance which may be due under this certificate, according to the laws, constitution, rules and regulations, not exceeding the sum of $300.00, shall be payable at the annual meeting of the State Grand Lodge on the second Tuesday in July next following the death of said Comrade.’’

The appellant, a fraternal benefit society, denied liability for the second installment and in this connection pleaded section 3 of its constitution and by-laws, which it is alleged was a part of its contract with the insured. That portion of section 3 being material to the question here involved is as follows:

“Section 3. If the comrade named in any certificate has complied with all by-laws, constitution, rules and regulations of the Loyal Friends-of America Benevolent Association, which may now be in force, or that may hereafter be in force, and which shall be in force at the time of death of such comrade, the Loyal Friends of America Benevolent Association -will cause to be paid to the relatives named in said certificate, a portion of the burial relief, which may be on hand to the credit of such burial relief fund, not exceeding the sum of $200.00 in Class A Certificates, not exceeding the sum of $100.00 in Class B Certificates, and not exceeding the sum of' $50.00 in Class C Certificates, within 24 hours after receipt of satisfactory proofs of death of the Comrade named in said certificate. •
“The balance which may be due under any Certificate by reason of the death of the Comrade therein named, according to the Constitution and By-Laws, rules and regulations of the Loyal Friends of America Benevolent Association, and not exceeding the sum of $300.-00 under Class A Certificates, and not exceeding the sum of $200.00 under Class B Certificates, and not exceeding the sum of $50.00 under Class C Certificates, shall be payable at the annual meeting of the Grand Lodge held on the second Tuesday in July next following the death of said Comrade.
“And it is understood and agreed that should the fund on hand to the credit of said Burial-Relief be insufficient to pay said Second Relief in full to all beneficiaries entitled to receive the same under and in accordance with said Constitution and By-Laws, then such amount as shall be on hand to the credit of said Burial-Relief shall be divided equally between all beneficiaries who may be entitled to said Second Relief in accordance with the said Constitution and By-Laws.”

The case was tried to a jury, and after the conclusion of the evidence the court instructed a verdict for the plaintiff for the amount sued for and upon said verdict entered judgment accordingly in favor of the appellee in the sum of $300, the balance due on the certificate together with $100 attorney’s fees and the 12 per cent, penalty of $36. From this judgment the appellant has duly prosecuted this appeal.

The main question involved on this appeal is whether on the contract sued upon and the evidence offered on the trial the court was authorized to instruct the jury to return a verdict for the appellee as he did. This court has given considerable time and thought to the determination of this question, and has reached the conclusion that the trial court’s action should be sustained.

• As we view the record, the contract between the appellant and the insured is composed of the certificate issued to the insured together with the constitution and by-laws in force at the time the insured became a member thereof, together with all the amendments to the constitution and by-laws which did not have the effect of reducing the value of the certificate issued the insured. Ericson v. Supreme Ruling, Fraternal Mystic Circle, 105 Tex. 170, 146 S. W. 160; Amarillo Mut. Benevolent Ass’n v. Franklin (Tex. Oiv. App.) 33 S.W.(2d) 859. The contract between the parties by which appellant agreed to pay ap-pellee $500 upon the death of the insured is a conditional one. That condition shown by the provision of the certificate above quoted is that sufficient funds must have been paid in by the members of the Loyal Friends of America Benevolent Association to take care of the installments when they became due. The further condition about when the installments are due is of no importance in this case.

There is undisputed evidence in this case to the effect that by amendment of appellant’s constitution and by-laws the class A certificate of the insured, Carrie Steward, had been consolidated with other class certificates which reduced the value of the certificate involved. Again it is admitted that appellant has at this time a suit pending against E. J. Crawford, its National Grand Secretary, up until the first of 1930, for embezzling funds of the appellant to the astounding sum of $30,000, which J. W. Hunt, appellant’s National Grand Master, admits, if collected, would be available for the purpose of paying the claim sued upon. It is also interesting, as well as material, to note that while appellant’s constitution and by-laws require the National Grand Secretary to give a bond, none was required of him by the National Grand Master, who is the head officer in charge of the business affairs of appellant. Yet, the secretary was handling thousands of dollars every year of funds paid in by the members of appellant society. We are of the opinion that this record, as a whole, negatives the contention that no funds had been paid in by the members of appellant society sufficient to pay appellee’s claim, but, on the contrary, appellant’s testimony is more to the effect that there are no funds on hand available for the purpose of taking care of the claim of this certificate, and to this effect are the issues requested by the appellant to be submitted to the jury which the court refused. As before stated, the condition upon which appellee’s recovery ' was limited was whether sufficient funds had been paid In by the members to take care of the claim sued upon, and not whether there was presently on hand sufficient funds to pay the claim. The provisions of the constitution and- by-laws above quoted go no further, in our opinion, than to direct how and when the funds paid in by the members should be distributed. This court will not go on record-as denying a recovery on this certificate when it is made to appear that appellant has reduced the value of the insured’s certificate by consolidating it with other classes of certificates of less value, and especially when the society has a claim in the form of a suit for embezzled funds which, in law, is an asset of the appellant. Appellant, in our opinion, is liable to its certificate holders who have claims for whatever amount it may he shown the Grand Secretary embezzled of the funds of appellant irrespective of whether such embezzled funds are recovered or not. To hold otherwise would be to say that, notwithstanding the members of appellant society paid in their dues in sufficient amounts to take care of all claims on the certificates, appellant could defeat its liability for such claims by a simple showing that one of its grand officers in charge of its funds had embezzled the same, and certainly no such construction should be indulged.

As we view the record, no effort was made by appellant’s officers to show how much money had been paid in by its members and the disposition made thereof. In fact, the testimony of the officers in charge, on cross-examination, is to the effect that they did not know just how many members were now in the society or just how much money had been paid in for all purposes. This character of testimony would tend to conceal the material facts. The testimony that they had exhausted all funds on hand available for the purpose of paying this claim, in our opinion, should be held as nothing more than a conclusion of the witnesses.

We sustain appellant’s contention that appellee is not entitled to recover the penalty and attorney’s fees. The appellant, under the statute, is a fraternal benefit society and as such is exempt from the payment of attorney’s fees. It is true that article 4831a, now in effect, authorizes such a recovery ; but at the time of the death of the insured in this ease such article was not in effect, and for that reason not applicable in this case.

The judgment of the trial court will be reformed so as to allow appellee a recovery of $300 only, and as so reformed will be affirmed.