author: MURRAY, Justice.

text:
    STATE LIFE INS. CO. v. DUKE.
    No. 9274.
    Court of Civil Appeals of Texas. San Antonio.
    Feb. 28, 1934.
    Rehearing Denied March 28, 1934.
    Morriss & Morriss, of San Antonio, for appellant.
    Alfred Petsch, of Fredericksburg, and Walter Petsch, of Kerrville, for appellee.
   MURRAY, Justice.

In October, 1932, there were pending in the district court of Kerr county two separate and distinct causes of action, both instituted by appellee, James F. Duke; one being cause No. 1737 and styled. James F. Duke v. ¿Etna Life Insurance Company; the other being cause No. 1738, and styled James F. Duke v. State Life Insurance Company of Indianapolis, Indiana, the latter being the cause on appeal herein.

The ¿Etna Company employed the law firm of Boyle, Wheeler, Gresham & Terrell of San Antonio to represent it, and the State Life Insurance Company employed Judge W. C. Baker, of Kerrville, Tex., to represent it.

Mr. Wheeler of the law firm of Boyle, Wheeler, Gresham & Terrell called Judge Baker over the telephone and undertook to employ Judge Baker to assist him in the trial of the ¿Etna case, No. 1737; Judge Baker being already employed in the State Life cause, No. 1738, suggested to Mr. Wheeler that they exchange services in the two cases, which was agreed upon. Answers were prepared, signed by the San Antonio firm ana Judge Baker, and filed in both cases.

The ¿Etna case, which was cause No. 1737, was first called and tried; Mr. Wheeler and Judge Baker conducting the defense. The trial resulted in appellee recovering upon a life insurance policy the sum of $1,370, for several months of total disability. This judgment was entered October 6, 1932. On October 17, 1932, cause 1738 was called for trial and the same attorneys appeared for the appellant herein. ' After the1 trial began, attorneys of record for appellant suggested to attorneys for appellee that this cause involved the same questions of law and fact as cause No. 1737, and that it was useless to try both cases; that they were willing to let cause No. 1738 abide by the decision on appeal in cause No. 1737. Whereupon the following agreement and stipulation was entered into and signed by attorneys of record for both sides: ■

“No. 1738. James F. Duke vs. State Dife Insurance Co.
“In the District Court of Kerr County, Texas, “October Term, A. D. 1932.
“In the above styled and numbered cause, it is agreed by and between James F. Duke, as plaintiff, and the State Life Insurance Company of Indianapolis, Indiana, as defendant, both parties acting herein by and thru their attorneys of record, that this cause shall stand on the docket of this court to await the dletermination of the Appellate Courts of the case of James F. Duke vs. Aetna Life Insurance Co. No. 1737. In the event the Aetna case No. 1737, is reversed and remanded, this cause shall thereupon stand for trial as if this agreement had not been entered into. In the event that the said Aetna case No. 1737 is affirmed by the Supreme Court of the State, or in the event that the judgment therein becomes final otherwise, then, the said State Life Insurance Company of Indianapolis, Ind., agrees to abide by said judgment, and to pay to the plaintiff, James F. Duke, promptly, the sum of $1370.00, in full satisfaction of disability installments on the two policies involved herein, up to and including the month of October, 1932. The said sum of $1370.00 consists of the following items:
“Disability installments up to and including the month of October, 1932, $1,000.00.
“12% statutory penalty, $120.00.
“Statutory attorney’s fees, $250.00.
“And the said State Life Insurance Company of Indianapolis, Indiana, agrees in that event also to pay the court costs that have accrued up to that time.
“And it is further agreed by the State Life Insurance Company, in the event of the af-firmance of the judgment in the Aetna casa No. 1737, that such judgment as may therein he finally rendered relating to all questions of disability of the plaintiff Duke shall also become binding upon the State Life Insurance Company in this case.
“And, for the purpose of carrying out this agreement, in the event of the affirmance of the judgment in the Aetna case No. 1737, Court is requested to enter a judgment in accordance with this agreement in this cause No. 1738, in like terms with the judgment which becomes final in the Aetna case and as soon as the mandate in such Aetna case is received in this Court.
“This agreement made in open Court, and filed in the papers of .this cause, this the 17th day of October, A. D. 1932, as evidenced by our signatures.
“James F. Duke, Plaintiff
“By Walter Petsch
“Alfred Petsch
“Attorneys of Record.
“The State Life Insurance Company, of Indianapolis, Indiana, Defendant.
“By W. C. Baker
'“Boyle, Wheeler, Gresham & Terrell
“Attorneys of record.”

An appeal was attempted in cause No. 1737, but the record was not presented to the Court of Civil Appeals within the time required by a recent act of the Legislature, and the cause was, on February 1, 1933, affirmed on certificate, without a hearing on the merits. At the March term of the district court of Kerr county, the appellee, upon motion made, secured judgment against appellant in cause No. 1738, pursuant to the stipulation above set out, in the sum of $1,370, which covered several monthly installments of total disability provided for in the insurance policies. The State Life Insurance Company has perfected this appeal.

The one main question ¡here presented is: Did the attorneys, Judge Baker and Mr. Wheeler, either one or both, have authority to execute this stipulation and thereby bind appellant to have judgment entered against it in cause No. 1738, if and when the judgment rendered in cause No. 1737 became final?

It is settled law that ordinarily an attorney who has been employed only to defend a lawsuit is a special agent and does not have the blanket authority to employ other counsel to assist him or enter into a compromise or settlement of the cause of action. 5 Tex. Jur. 444, § 41; 3 A. & E. Encyc. Law (2d Ed.) 354.

However, it is equally as well settled law in this state that where an attorney is employed to represent the same or different parties in several lawsuits involving the same issues and the same law, he may properly enter into an agreement to let all of such cases abide the decision in one case. 6 C. J. 648, § 156; 3 A. & E. Encyc. Law (2d Ed.) 354; Savage v. Dorn (Tex. Civ. App.) 60 S.W.(2d) 312.

Such agreements expedite the business of the court, save cost of litigation, save the time of the courts, the lawyers, the parties, and quite often of witnesses. But, on the other hand, if an attorney is not employed in the case to be appealed, he cannot agree to let his client’s case abide by the decision of such a case because he, nor his client, has any control over the appeal. So if either Mr. Wheeler or Judge Baker were employed in both cases it was not improper for them to enter into the stipulation. We will first consider Mr. Wheeler’s connection with these two cases.

The testimony of Judge Baker shows that on October 25, 1332, some eight days after the trial, Judge Baker wrote to the general attorney of appellant, Judge Chas. F. Coffin, informing him that Mr. Wheeler had come to Kerrville and assisted him in the trial of this cause and that they had entered into an agreement to abide by the final disposition on appeal of cause No. 1737. Appellant did not notify appellee, or his counsel, that it resented Mr. Wheeler’s coming into the case and that he had no authority to represent it. In fact, the only intimation that Mr. Wheeler was not properly representing appellant is a statement contained in the affidavit of Charles F. Coffin, made on March 31, 1933, wherein he states, under oath, that: “Neither said State Life Insurance Company through any officer or agent, nor I, as its counsel, employed the firm of Boyle, Wheeler, Gresham & Terrell, nor any member thereof, to represent said State Life Insurance Company in the cause or causes aforesaid, nor to have any connection therewith.”

It appears from the above that Judge Coffin, as general counsel for appellant, being put on notice that Mr. Wheeler was appearing in this cause as an attorney for his company and executing agreements for it upon which appellee was relying and on the strength of which appellee had agreed to a continuance never took any steps to notify appellee, or any one else, that his company would not be bound thereby, but waited until the contingency upon which the stipulation was based had happened and had resulted unfavorably to his company; then, for the. first time, he says that Mr. Wheeler had no authority to represent him and he repudiates the agreement. Appellant contends that it would not have accomplished anything to 'have sooner notified appellee, as there was not another regular term of court in Kerr county until March, 1933. This will not excuse appellant’s long delay in repudiating the acts of the attorney who had purported to act for his company. A special term of court might be called at any time and this case again called for trial. Judge Baker, although admitting that he had had several letters from Judge Coffin, did not recall his making any complaint until after cause No. 1737 was affirmed on certificate. We conclude that appellant has, by its long silence, ratified the employment of Mr. Wheeler in the case and is now estopped to deny that Mr. Wheeler was its attorney of record in cause No. 1738.

Having concluded that Mr. Wheeler was a proper attorney of record in this cause for appellant, the stipulation was binding on appellant.

It is not necessary for us to here decide whether or not Judge Baker could bind appellant by this stipulation. If Mr. Wheeler could do so, that would be sufficient to make the stipulation binding on appellant.

It is contended by appellant that this stipulation is void because it is offering to settle a client’s case upon a wager or gamble. We cannot agree with this contention for the reason that the failure of cause No. 1737 to be heard on appeal on its merits is the result of a risk which must be taken in every appeal. If cause No. 1738 had been tried and appealed, it might have met with the same mishap. When the recent act of the Legislature became effective, allowing but sixty days for the filing of a record on appeal, many cases were lost because not filed in time.

We see nothing unconscionable or improvident in this stipulation. It was a bona fide attempt to save the expense, time, and work of two appeals when one would serve all useful purposes. The fact that, due to no fault of appellee, a hearing was not had upon the merits in cause No. 1737, or the fact that such an event might happen, does not render the stipulation improvident or unconscionable.

The judgment is affirmed.


source: Caselaw Access Project

author: COMBS, Justice.

license: Public Domain

text:
    SMITH v. NAVARRO.
    No. 2522.
    Court of Civil Appeals of Texas. Beaumont.
    March 19, 1934.
    Hardway & Cathey, of Houston, for appellant.
    Sewell, Taylor, Morris & Garwood, of Houston, for appellee.
   COMBS, Justice.

This appeal is from a judgment of the county court of Harris county, the appeal being originally to the Court of Civil Appeals at Galveston and the case was transferred to this court on equalization of the docket by the Supreme Court.

The suit was filed by appellee, A. R. Navarro, to recover the sum of $325 for two months rent alleged to be due under the terms of a written contract of lease entered into between the. appellee, Navarro, as lessor, and appellant, Smith, as lessee. The case is before us on an agreed statement of facts. The written contract of lease was dated January IS, 1927, and was to run for a term of ten years, the appellant agreeing to pay for the first and second years an annual rental of $1,650 per year, for the third and fourth years $1,800 per year, for the fifth and sixth years $1,950 per year, for the seventh and eighth years $2,100 per year, and for the ninth and tenth years $2,250 per year. All rentals were to be paid in advance in monthly installments.

At the time of entering into the contract the property was unimproved, and appellee agreed to erect thereon for the use of appellant a brick building according to plans and specifications which were agreed to and attached to the contract. The lease contract contained the following provisions;

“IV. For the purpose of binding the lessee in this lease, the lessee has this day deposited, in escrow, with Federal Trust Company, the sum of $562.50, which sum shall be delivered to lessor upon the acceptance of the leased premises by lessee, and shall be held by lessor as security for the performance by lessee of his agreements herein contained. Lessor shall, however, during the time he holds said money, and provided that no default occurs by lessee, on account of which default this lease is terminated, pay to lessee interest on such sum of $562.50 at the rate of 5% per annum, which interest shall be payable semi-annually.”
“V. In the event lessee makes default in the payment of any installment of rent due hereunder, as the same becomes due and payable, and such default continues for ten (10) days, then lessor shall have the option to declare the leasehold estate forfeited by lessee and may re-enter and take possession of said premises, and lessee agrees to deliver peaceable possession of said premises to lessor when demanded after such ten day period of grace. Upon the termination of this lease-by default, lessor shall retain the said sum of $562.50 above referred to, as liquidated damages and not as a penalty, and all parties shall thereupon be released from this-contract.”
“IX. Lessor agrees to pay all taxes properly levied and assessed against the leased premises, and lessee agrees to reimburse lessor for one-half of the increase in taxes on the land value, if any, after the first year, and one-half of the increase of taxes on improvements, if any, after the second year. If lessee should refuse and fail ■ for thirty (30) days after notice to pay his pro-rata share of said taxes paid by lessor as herein provided for, then such failure or refusal shall be deemed sufficient ground for a cancellation of this lease by lessor, such cancellation, however, to be made only at the option of lessor, and in the event of such cancellation, lessor shall retain the $562.50, as above provided, as liquidated damages.”

The building was constructed according to agreement and appellant entered into possession of the property and occupied it until the 23d day of May, 1932, at which time„ being in default for the payment of rents for a period of two months, he vacated the premises at the request of appellee. At the time appellant vacated the premises he owed appellee $325, accrued and unpaid rentals on the property. Appellee retained the $562.50 liquidated damages which had been deposited with him in accordance with the provisions of the rent contract above set forth. He then brought this suit to recover the unpaid rentals. Appellant, by his answer in the court below, after pleading a general demurrer .and general denial, specifically pleaded the above-quoted provisions of the contract, alleged that appellee had retained the $562.50 and that appellee’s retention of same under the terms of the contract fully satisfied and discharged all of his obligations to appel-lee.

The trial was to the court, a jury being waived, and the trial court rendered judgment in favor of appellee and against appellant for the rentals sued for, plus interest and costs.

Appellant concedes that the stipulation for the retention of the $562.50 by appellee in the event of a breach is in the nature of liquidated damage, no point being made that it was intended as a penalty. The sole question for determination then is whether, in contemplation of the parties, the amount specified as liquidated damages was meant to include any rentals accrued and unpaid at the time the appellee should exercise his option to cancel the contract.

Oonstruing the contract as a whole, it seems clear to us that the parties intended the provision for liquidated damages to protect against the consequences of appellant’s vacating the premises before the expiration •of the lease. Appellee had obligated himself to construct, and did construct, a building for the special use of the appellant, and appellant had unconditionally obligated himself to occupy the premises and to pay the rentals specified for a period of ten years. Had appellant, during the term of the lease, abandoned the leased premises without just cause, he would have been liable to account to ap-pellee for all damages suffered by him by reason of the loss of the future rentals. Newark Shoe Stores, Inc., v. Loeb (Tex. Civ. App.) 47 S.W.(2d) 366. In providing for ap-pellee’s option, as lessor, to declare the lease forfeited in case of the breach of the lease contract by appellant it was within the reasonable contemplation of the parties that damage would result to appellee from loss of future rentals in case of such forfeiture. It is apparent also that the exact amount of such damage might be difficult of proof or ascertainment. It is precisely upon this proposition of the difficulty of ascertaining the damages which might arise from the breach of certain contracts that stipulations for the payment of liquidated damages have been upheld by the courts. 13 Tex. Jur. p. 114, 126. Langever v. R. G. Smith & Co. (Tex. Com. App.) 278 S. W. 178. As said in Elliott on Contracts:

“In the case of liquidated damages the parties anticipate and agree in advance for a certain amount of damages which will be accepted as full compensation for such injury as may be sustained by a breach of the agreement.” Elliott on Contracts, vol. 2, § 1559, p. 847.

Rents which had accrued at the time of forfeiture of the lease contract by the lessor were capable of exact ascertainment at any time the forfeiture might be declared. Hence there could have been no occasion for the parties to make such rentals the subject of liquidated damage. It is evident also that the liquidated damage was to apply in the event of a forfeiture for failure to pay one-half of increase in taxes, as provided in paragraph IX above quoted. Moreover, the rentals here sued for cannot be considered damages in any sense. Damages have been defined as “the pecuniary compensation, recompense or satisfaction for an injury sustained.” 8 R. C. L. 420. The $325 owed by appellant to appellee at the time appellant vacated the premises was a debt. It arose by reason of the fact that appellant occupied appellee’s premises under an agreement to pay rent. Therefore, it is not owed as “compensation, recompense or satisfaction for the injury” occasioned by the breach. And it cannot be said that the parties so intended in the absence of a clear and unequivocal provision evidencing such intent.

The foregoing considerations make it evident, we think, that the trial court correctly construed the stipulation for liquidated damages as being intended by the parties as agreed compensation to the lessor for losses resulting to him from the lessee’s breach of the agreement and the consequent loss of future rentals occasioned thereby.

The judgment of the trial court is in all things affirmed.


author: PUNDERBURK, Justice.

text:
    HOUSTON LAND & TRUST CO. et al. v. SHELDON.
    No. 1226.
    Court of Civil Appeals of Texas. Eastland.
    Feb. 9, 1934.
    Rehearing Denied March 16, 1934.

      Blanchard & Woodul, W. P. Hamblen, and Robt. Ring, all of Houston, for plaintiffs in error.
    Boyle, Wheeler, Gresham & Terrell, of San Antonio, for defendant in error.
   PUNDERBURK, Justice.

On 'September 19, 1930, Mrs. Nellie Howard B.urgle Bates, while insane (having become so, as found by the court, on August 2S, 1930), executed a note to Houston Land & Trust Company (hereinafter called the bank) for the principal sum of $5,000 due April 5, 193-2, bearing 7 per cent, interest. At the same time, as collateral security for said note, she indorsed a $15,000 note secured by vendor’s lien and deed of trust lien on certain lands in San Antonio, with transfer of said note and liens; said collateral note being payable to her deceased mother, but owned by her as sole devisee of her mother’s estate. The $5,-000 note was given for borrowed money paid by a $4,936.27 check, drawn to the order of Mrs. Nellie B. Bates. The amount named in the check represented the full amount- of the loan, less $63.73 expenses incurred by the bank in connection with making the loan. The entire transaction, including the receipt of the proceeds of said cheek, was handled iby L. A. Adamson, purporting to act throughout as the attorney and business manager for Mrs. Bates.

Subsequently to the execution of said note, Mrs. Bates was duly adjudged insane, and this suit was brought by Joe S. Sheldon, her guardian, against said bank and L. A. Adam-son to cancel the $5,000 note and the transfer and indorsement of said $15,000 note, as well as the transfer of the liens securing same, upon the ground of her mental incapacity to contract. The only relief sought by the suit, other than an alternative claim for damages against Adamson alone, was the cancellation of said instruments (including cancellation of Mrs. Bates’ indorsement of the collateral note) and the recovery of judgment against said bank of a sum (shown to be $350) representing interest payments on said $5,000 note, which had been collected as interest due on said collateral note and thus appropriated. Since no other relief was sought, except in the alternative, and the judgment decreed cancellation as prayed, the alternative cause of action averred as against Adamson becomes unimportant upon any question presented for our decision.

Plaintiff in the statement of his cause of action for cancellation alleged that his ward never at any time received any part of the proceeds of said $5,000 note, but that same was received and wrongfully converted by said Adamson. Plaintiff’s petition charged the commission of fraud by Adamson. The alleged fraud consisted of the facts that Adamson knew of Mrs. Bates’ mental incapacity, and with such knowledge procured her to execute said instruments and to make said indorsement.

Upon a nonjury trial the court decreed the cancellation of the instruments as prayed for, but gave the bank judgment against plaintiff far $1,477.21, with interest thereon at the rate of 6 per cent, per annum from October •5, 1981. Said judgment also declared the existence of an equitable lien in favor of said defendant upon the $15,000 collateral note, but further provided that the judgment and said lien should be enforced in the probate court. Recovery of the said sum of $1,477.21 was awarded to the bank upon the theory that same, plus $350 which had- been collected as interest on the collateral note and applied in payment of interest on the $5,000 note aggregating $1,727.25, was the amount of the proceeds of said $5,000 note which had in fact been used by Adamson in providing necessaries for plaintiff’s ward. The judgment awarded defendant bank recovery against Adamson upon its cross-action for $3,272.73, being the difference between the total proceeds of said $5,000 note and the said sum of $1,727.25, together with interest, costs, etc.

Both defendants have brought the case here by writs of error.

The first of several questions presented arises out of a contention to the effect that the trial court erred in not finding that the sum of $2,500 of the proceeds of the $5,000 note sought to be canceled was expended by Mrs. -Bates for necessaries, in that it was conclusively shown that such sum was used to pay and discharge a debt in that amount for legal services which constituted a charge against the estate of Mrs. Burgle, deceased, devised to Mrs. Bates, and which amount the latter, prior to the time the court found her to have become insane, had agreed was a proper and reasonable charge.

A proper consideration of the case and determination of the questions sought to be presented by the assignments of error are complicated by what we conceive to be certain errors of a more or less fundamental nature, resulting from the case having been tried upon incorrect theories, not directly challenged by the plaintiffs in error. It is deemed advisable to deal with these matters preliminarily. '

The judgment, among other things, awards the bank recovery against the guardian of $1,477.21, with a lien on the collateral $15,000 note, and with provision that the judgment and lien be enforced in probate court. There were no pleadings to support that part of the judgment. There were no pleadings which would support a judgment absolutely awarding the cancellation sought and a£ the same time awarding the bank a recovery against plaintiff of $1,477.21, or any other amount. The only cause of action alleged by plaintiff against the bank was one for cancellation and for the recovery of a sum (shown to be $350) received as interest paid on the $15,000 collateral note and appropriated in payment of interest on the $5,000 note. The bank alleged no counterclaim or cross-action against plaintiff for any sum. The nearest approach to such a subject-matter to ibe found in the bank’s pleadings is the following: “ * * * ¾⅛ defendant says that it is informed and believes, .and so believing charges the fact to be that the whole amount of said sum of $5,000 was expended for the use and benefit of Nellie Howard Burgle Bates, in payment of her care, upkeep and expenses and in payment of obligations justly and truly incurred by her, and that she received the full and complete benefit of the same, and that the plaintiff should not be permitted to recover of and from this defendant any sum of money which was paid out 'by it for the use and benefit of the said Nellie Howard Burgle Bates.” This was purely a defensive plea. It was sufficient, no doubt, to tender the issue that plaintiff was not entitled to the cancellation sought, except, at least, upon condition that plaintiff restore the money for which said note was given; it being alleged that same had all been used for necessaries. The declaration that plaintiff should not be permitted to recover of defendant “any sum of money,” etc., was evidently inadvertent, since plaintiff was not seeking to recover “any sum of money,” except as said before the comparatively small sum of $350 allegedly misappropriated in payment of interest on the $5,000 note.

As affecting the right of plaintiff to the cancellation sought against the bank and the duty, if any, to restore all, or any part, of the proceeds of the note, we are of the opinion that plaintiff’s petition alleged no facts sufficient to charge Adamson with any fraud that could affect such right or duty. Adam-son was not alleged to have any interest in the $5,000 note or the $15,000 collateral note, or the transferred liens securing the latter, and hence no facts were alleged to show any reason for, or right to, a decree of cancellation as to Adamson. The only parties interested in the suit in so far as it was an action for cancellation were the plaintiff and the bank. The only -cause of action alleged -by plaintiff against Adamson, as said before, was an alternative one for damages, which, because of the court’s action in awarding cancellation (the other alternative), passed out of the cáse for all purposes properly to be considered upon this appeal.

It seems to have been the theory of plaintiff and of the trial court that the fact that, at the time Adamson procured Mrs. Bates to execute the note and transfer in question, she was insane and Adamson knew that fact, showed that Adamson was guilty of fraud. To such a view we are unable to assent. , Fraud as to whom? Mrs. Bates or the bank? It is unimportant as regards the right of cancellation that it may have ¡been fraud against the bank. To be material, it must have been fraud as to Mrs. Bates. Was it fraud as a matter of law if Adamson, as he claimed, being charged as attorney of Mrs. Bates and manager of her estate, with the responsibility of supplying her with the necessaries of life, and having no money for such purpose, borrowed the money by having her execute the $6,000 note and make said transfer, even though it be granted that he knew she was insane? We do not think so. Insane though she were, she could bind her estate for the payment of necessaries. 24 Tex. Jut. 382, § 8. That in doing so she executed the note and transfer in question at the instance of her attorney and without his disclosing to the bank the fact of her incapacity certainly in itself shows no fraud of the attorney, at least as against his client. If afterwards, through errors' of judgment or wrong motive — it is immaterial which — he used part of the fund for other purposes than to supply her with necessaries and converted it, that fact is important only as affecting plaintiff’s obligation to make restoration as a condition to the right of cancellation. The obligation to restore would be limited to the amount used for her benefit.

The trial court was of the opinion that the burden of proof was upon the bank to show that the consideration given for the nota was used for necessaries, and, if less than all was so used, the amount thereof. That view, it must be admitted, is supported by decisions in the following cases: Rowan v. Hodges (Tex. Civ. App.) 175 S. W. 847; Brown v. Brenner (Tex. Civ. App.) 161 S. W. 14; Jones v. Meyer (Tex. Civ. App.) 248 S. W. 777; Shaw v. Gillespie (Tex. Civ. App.) 270 S. W. 1043; Wisdom v. Peek (Tex. Civ. App.) 220 S. W. 210; Donaldson v. Meyer (Tex. Com. App.) 261 S. W. 369; Smith v. Thornhill (Tex. Civ. App.) 12 S.W.(2d) 625.

If this were a suit, at law, by the bank against Mrs. Bates to recover upon the note, a plea and proof of insanity would, no doubt, constitute, prima facie, a complete defense to any liability on the note. In such case for its protection the bank would be under the necessity of pleading and proving what amount of the consideration paid for the note, if any, had been used for necessaries, and would be limited to a recovery of such amount. We are also of the opinion that even in a suit like this, for cancellation, if the defendant did not resist cancellation on the ground that the right thereto was conditional upon restoration of the value of benefits received under the contract, such an attitude would amount to a rescission by consent. The defendant in such case would, nevertheless, have a cause of action for recovery of any part of the consideration used for the benefit of the incompetent, and would have the burden of pleading and proving that the consideration was so used, and, if less than all, the amount thereof. This would involve an independent suit, and would have to be prosecuted as such, or as a cross-action. It is evidently upon such a theory that a money judgment in this case was rendered for the bank. But, as we have said, this is not such a case as the one supposed, because there was no pleading of any cross-action by the bank as against the plaintiff, and the bank did contest plaintiff’s right to cancellation without restoration of benefits.

Would the rule admittedly applicable in the supposed cases apply to a case like this where the plaintiff is not defending against a legal liability on the note, and is not claiming a rescission conceded by the adverse party, but is appealing to a court of equity to cancel obligations valid on their face and importing consideration on the ground of incapacity to contract?

Unquestionably the maxim applies that he who seeks equity must do equity. The offer td do equity within the meaning of the maxim is a matter of pleading, but the doing of equity is a condition upon which the relief, if .any, is to be granted. A general rule is stated as follows: “The great weight of authority is, however, to the effect that where a contract with an insane person has been entered into in good faith, without fraud or imposition, for a fair consideration, without notice of the infirmity, and before an adjudication of insanity, and has been executed in whole or in part, it will not be set aside unless the parties can be restored to their original position. Such contracts are enforced against the insane person, not so much because they possess the legal essential of consent as because by means of an apparent contract he has gained an advantage or benefit that cannot be restored, and that therefore it would be inequitable to permit him or those in privity with him to repudiate it.” 14 R. C. L. p. 584, § 40; 9 C. J. p. 1215, § 108; 24 Tex. Jur. p. 384, § 9.

This is not a correct statement of the law as it is now interpreted by the courts of this state. It is quoted here to aid in a better understanding of what the law is now by directing attention to the changes that have taken place. The principles of law applicable to insane persons are just the same, so far as our investigation reveals, as those applicable to minors. If so, of course, decisions dealing with the rights of minors and conditions and limitations upon such rights, particularly in reference to the cancellation of contracts, are equally applicable to insane persons. It is interesting, therefore, to note that as late as the decision in Bullock v. Sprowls, 93 Tex. 188, 54 S. W. 661, 662, 47 L. R. A. 326, 77 Am. St. Rep. 849, it was declared, in harmony with the foregoing quotation, to be a general rule “that an attempt by the maker of a deed to disaffirm it, on the ground that it was executed while he was under the disability of .minority, must, in order to be successful', be accompanied by a restoration of the consideration received for the property conveyed.” (Italics ours.) In support of that statement of a general rule, the court cited: Cummings v. Powell, 8 Tex. 88; Womack v. Womack, 8 Tex. 417, 58 Am. Dec. 119; Kilgore v. Jordan, 17 Tex. 356; Stuart v. Baker, 17 Tex. 421; Bingham v. Barley, 55 Tex. 285, 40 Am. Rep. 801; Graves v. Hickman, 59 Tex. 383; Harris v. Musgrove, 59 Tex. 403; Vogelsang v. Null, 67 Tex. 465, 3 S. W. 451; Wade v. Love, 69 Tex. 522, 7 S. W. 225; Ferguson v. H., E. & W. T. Ry. Co., 73 Tex. 344, 11 S. W. 347; H., E. & W. T. Ry. Co. v. Ferguson, 73 Tex. 349, 13 S. W. 57.

It was thus reaffirmed as a general rule in this state that a minor, and therefore also (as we have said) an insane person, as a condition upon which the right of cancellation on the ground of incapacity to contract exists, is required to restore the consideration received. Bullock v. Sprowls, supra, merely declared an exception to this general rule. One exception had previously been recognized in Vogelsang v. Null, supra, to the effect that the obligation to restore the consideration as a condition upon the right of cancellation did not exist when no consideration had been received. The further exception recognized in Bullock v. Sprowls was to the effect that, even where the consideration had been received, the obligation to-restore does not extend to any part thereof not at the time of disaffirrhanee in the possession, or within the control of, the incompetent, or which had not been used for his benefit. (The word “benefit” will be used in the sense meaning the reasonable value of necessaries, and the payment of legal charges against the property of the incompetent, or payments made for its protection, as referred to in said decision and others like Searcy v. Hunter, 81 Tex. 644, 17 S. W. 372, 373, 26 Am. St. Rep. 837; Folts v. Ferguson, 77 Tex. 301, 13 S. W. 1037; Westbrook v. Adams (Tex. Civ. App.) 17 S.W.(2d) 116; First National Bank v. MeGinty, 29 Tex. Civ. App. 539, 69 S. W. 495; Askey v. Williams, 74 Tex. 294, 11 S. W. 1101, 5 L. R. A. 176.) Said general rule, with the modification thereof declared in Bullock v. Sprowls, may be embodied in a single proposition as follows: A minor or insane person, as a condition upon his right to cancel a contract because of incapacity, is required to restore the consideration received only to the extent of the part thereof, if any, remaining in his possession, or subject to his control, or the reasonable value of benefits received from such consideration. As to the necessity of making restoration where a beneficial use had been made of a part of the consideration, it was said in Searcy v. Hunter, supra: “That should be made to depend upon the question whether their services (i. e., services of attorneys) were beneficial to the infant or not. If so, the plaintiff should in no event recover vAthout an offer to pay and the payment of a just and reasonable compensation.”

It is believed there has been no change in the law as it has always existed, to the effect that the right of cancellation of such a contract on the ground of incapacity is a conditional right as relates to the obligation, where it exists, to make restoration. The changes which have been declared are such as do not affect the conditional nature of the right of cancellation, but rather the degree or amount of restoration which under exceptional circumstances is required to be made.

If we are correct in our conclusions so far, it is obvious that the only circumstances under which the right of cancellation would be unconditional would be when no part of the consideration had ever been received, or, if received, was not in the possession or within the control of the minor or insane person, and had not been used for his benefit. Whose burden would it be in the assertion of a right of cancellation to plead and prove the facts to show that the right claimed is an unconditional right, or, if not unconditional, that the condition exists which supports the right? Plaintiff herein has pleaded that his ward received no part of the consideration paid by the bank for said $5,000 note. In so pleading, plaintiff was relieved of any obligation to plead an offer to restore anything; that is to say, he pleaded facts to show an unconditional right to cancellation. But would plaintiff simply by so pleading cast the burden upon the hank to prove that the consideration, or some definite part thereof, had been received? It should not require the citation of authority, wei think, to support the proposition that no such shifting of the burden of proof would result. In Wade v. Love, 69 Tex. 522, 7 S. W. 225, plaintiff pleaded that no consideration had been received, and thereby sought to be relieved of any obligation to make restoration, but the court said: “A copy of the conveyance to Bates was made a part of the petition, and recited a consideration paid of $500. It was therefore incumbent upon plaintiff to prove, not only that the sum mentioned was not in fact paid, hut also that she had received no other consideration for the land. Saving offered to return nothing, she was hound to prove that she had received nothing.” (Italics ours.) This was but the application of an elementary principle governing the burden of pleading and proof. If a right as it usually exists is one dependent upon a condition, or — what is the same thing —is unconditional only when exceptional circumstances exist, in either case plaintiff, seeking to enforce such right, must, in order to state a right of action, either allege the facts to show the exceptional circumstances or the existence of the condition upon which the right depends. The burden, of course, would be upon him who was required to plead such facts to prove them. Since the decision in Bullock v. Sprowls, supra, proof of an allegation that no consideration had been received would include proof of the fact that no benefit from such consideration had been received. Indeed, such would have been true prior to that decision. In Wade v. Love, supra, as already shown, under a plea of no consideration received, the burden was declared to be upon plaintiff to prove “not only” that consideration, which the terms of the contract imported, “was not in fact paid, but also that she had received no other consideration.” Proof of the receipt of no other consideration would necessarily include proof of the receipt of no benefits.

The receipt of the consideration or benefits thereof by plaintiff’s ward does not mean the actual manual possession of same in person. It is true that in Vogelsang v. Null, supra, the court held that receipt of the consideration by an agent who did not pay it over to the infant did not show that the consideration was received by the infant. The undisputed evidence showed that no part of the consideration had been received. But, in the instant case, there was- evidence tending to show that perhaps the entire amount of the consideration for the note had been used for the benefit of Mrs. Bates. As before said, the court found that $1,727.25 had been so used. To the extent that the proceeds of the note were used by Adamson for the benefit of Mrs. Bates, the ease is precisely the same, we think, as if that amount of the money had been paid to her, and by her personally used for the same purposes. It must be borne in mind that the relation of attorney and client, or principal and agent, is a contractual relation. Such a contract, like the note in question, is not void, but only voidable. That question was not fully settled in this state when Vogelsang v. Null, supra, was decided. See Williams v. Sapieha, 94 Tex. 430, 61 S. W. 115. At any rate, the instant case is more like the later case of Bullock v. Sprowls, wherein it was said: “The question presented is whether or not the plaintiff was required, as a condition of disaffirming his conveyance and recovering the land, to restore a consideration received for it which was not in his possession or control when he arrived at full age, but had been dissipated by him while still a minor. If he is to be required to restore, without inquiry as to the disposition made by him of such consideration, we can see no reason why the exaction should not be a restoration of the whole sum paid by Bullock. He would not, in our opinion, be exempted from this requirement by the principle laid down in Vogelsang v. Null, 67 Tex. 465, 3 S. W. 451. In that case the minor never received the purchase money, but it went into the hands of, and ivas appropriated hy, those who Joined with her in the conveyance. Here, wMle the money was not paid into the minor’s hands, it was paid to Allen, with his consent and in accordance with his agreement. He received it in the way in which he stipulated to receive it. The transaction was, in effect, the same as if the money had been paid to him, and hy him' turned over to Allen, as the price of the interest in the business, and the question exactly the same as w>ould have arisen had such been the facts." (Italics ours.) Upon the same principle, we think, the conclusion is warranted that where, as here, the consideration is received by the attorney of the incompetent for the purpose o-f being used by him for her benefit, it has presumably been so used, and therefore received by the client. To whatever extent the same is in fact used for such purpose, the obligation to restore is lust the same as if such payment was actually received by the client and used for the same purposes. This view is in accord with that expressed by the Court of Civil Appeals in Williams v. Sapieha (Tex. Civ. App.) 59 S. W. 947, as stated in 7 Tex. Jur. p. 962, § 47: * * ⅜ ⅜ whel.e the defendant in good faith paid money to the attorney-in-fact for the plaintiff, the latter may not be excused from the above rule (that is, from the obligation to restore) since in the absence of anything to the contrary it will be presumed that the agent discharged his duty by paying the plaintiff.” In the same way, we think, would the presumption obtain that an attorney having possession of moneys belonging to his incompetent client, and being the consideration received for a contract of th'e incompetent, and whose duty it was under the terms of his employment to use the money for her benefit, did his duty in that respect, nothing to the contrary appearing. Plaintiff seeking a cancellation, and by his pleading having assumed the burden of proving that no part of the consideration was received by his client, cannot discharge that burden merely by evidence to show that it was received by his ward’s attorney, without further showing that same was not used for the benefit of said ward, and, if less than all was so used, what part of the whole was not used.

It seems to have been considered that Williams v. Sapieha, 94 Tex. 430, 61 S. W. 115, 116, is authority for the proposition that the burden of proof is upon the bank. In our opinion, the case does not so hold. Question 2 therein certified to the Supreme Court was: “If only voidable [that is, the power of attorney and sale of land thereunder], will the appellant be permitted to rescind the power of attorney and deed made in pursuance thereof, in the absence of an offer to return the purchase price, or otherwise place the purchaser in statu quo?” The court answered: “We answer the second question that the facts stated in connection with the certificate do not show that the lunatic still had in his possession any of the money paid for the land or any property acquired with it, nor that it had been expended for him or by him in the purchase of necessaries. In the absence of such proof, he would not be required to return the consideration received. Bullock v. Sprowls, 93 Tex. 188, 54 S. W. 661, 47 L. R. A. 326 [77 Am. St. Rep. 849]”’ (Italics ours.) It is apparent that the court made no direct answer to the question certified. The question relates to a matter of pleading, the answer to a matter of evidence. Although the answer is somewhat ambiguous, it does appear to be a reaffirmation of the law as declared in Bullock v. Sprowls, supra. In so far as it can be considered an answer to the question certified, it was about the equivalent of the following: “No, there is no obligation to offer to return all the purchase price. Unless some of it was on hand, or had been used for the purchase of necessaries, there was no duty to return any part of it, and, of course, no necessity for offering in the pleadings to do so.” No question of burden of proof was certified. We do not believe that the court by at most a questionable implication meant to overturn the well-settled law as previously many time declared. If this answer be given the meaning attributed to it, the decision would have the effect of abolishing all practical distinctions between void and voidable contracts. A plaintiff in a cancellation suit would not have to plead that no consideration was received, or offer to make any character of restoration. It could easily be possible that a minor who had received the full consideration for his contract, and by trading had increased it tenfold, could, with the money in a lock box or held by some one in trust for him, if such facts were unknown to the other party, cancel the contract by which he had received it all by merely alleging and proving incapacity at the time it was made. We cannot bring ourselves to believe that by at most a debatable implication any such far-reaching change in the law has been' wrought.

It is our conclusion that the court erred in decreeing cancellation absolutely; that by the terms of the judgment cancellation should have been made conditional upon restoration of the value of benefits. That provision should have been made in the judgment itself for enforcement of such restoration, instead of- certifying to the probate court for enforcement.

It is further our conclusion that the court should have found the reasonable value of the services of Adamson both to Mrs. Burgle and Mrs. Bates, and have included same in the amount required to be restored as a condition to cancellation; the burden of proof being upon the plaintiff to show what amount of the entire consideration for the note, if any, was not used for the benefit of Mrs. Bates.

In our opinion, it should not have been presumed that Adamson, having possession of the proceeds of the note in the sum of $4,-936.27, and also other money belonging to Mrs. Bates, used such other money in supplying necessaries for his client, rather than the proceeds of the note. The burden was upon plaintiff to show what part, if any, of the proceeds of the note was not used for the benefit of Mrs. Bates.

No fraud of Adamson was either pleaded or proved which would justify the cancellation sought without restoration of the amount of reasonable attorney’s fees. ,

Eor these reasons, it is our opinion that the judgment should be reversed and the cause remanded, and it is accordingly so ordered.


text:
    RAILWAY EXPRESS AGENCY v. McCARRICK.
    No. 9287.
    Court of Civil Appeals of Texas. San Antonio.
    March 14, 1934.
    John C. North and R. B. King, both of Corpus Christi, for appellant.
    B. H. Kirk, of Robstown, for appellee.
   MURRAY, Justice.

Appellee, James G. McCarriek, instituted this suit against appellant, Railway Express Agency, seeking to recover the sum of $1,035, alleged damage to a carload of radishes, shipped from Bishop, Nueces county, Tex., and consigned to L. D. Goldstein at Philadelphia, Pa.

Appellee alleged that the radishes were in good condition • when delivered to appellant at Bishop and that they were in bad condition when delivered to consignee in Philadelphia, as a result of appellant’s negligence in permitting the radishes to freeze in transit. Appellee further alleged that the damage was caused from defects in the refrigerator car furnished by appellant, which defects existed either at'the time the car was furnished or developed in transit. That the market value of the radishes at the ■ time they arrived in Philadelphia, except for the damaged condition, would have been $1,800, but that as a result of the damage to the radishes, which resulted from the negligence of. appellant, the market value of the radishes when they arrived in Philadelphia was only $765, and that appellee was damaged in the sum of $1,035, together with interest thereon.

The trial was to a jury, and upon the answers of the jury to the special issues propounded to them the trial court rendered judgment in appellee’s favor and against appellant, in the sum of $1,236.37, from which judgment appellant brings this appeal.

Appellant’s first proposition complains of the trial court’s overruling its special exceptions directed to appellee’s allegations of negligence with reference to the leaks in the doors of the ¿refrigerator car. The exceptions complained of the allegations of negligence being vague and indefinite. The court did not err in overruling these exceptions. The car was in the possession of the express company, it was its property, and it was in a better position to know when and where and how the leaks occurred, if they did occur, than appellee.

By its second assignment of error appellant complains of the trial court’s refusal to strike out that part of appellee’s petition wherein it was stated that appellant was bound to deliver the shipment in good and marketable condition. It is contended that this is equivalent to an allegation that the carrier is an insurer of perishable property. While it is true that a carrier is not an insurer of perishable freight,- the rule is well settled that where perishable property is delivered to a carrier in .good condition and arrives at destination in bad condition, and where it has been transported by the carrier in refrigerator cars especially constructed and equipped for transporting such perishable property, a presumption arises that such damage is the result of the carrier’s negligence. Missouri, Kansas & Tex. Ry. Co. v. McLean, 55 Tex. Civ. App. 130, 118 S. W. 161; 8 Tex. Jur. p. 396, § 269; American Ry. Express Co. v. H. Rouw Co. 185 Ark. 526, 48 S.W.(2d) 220; T. & N. O. R. .R. Co. v. East (Tex. Civ. App.) 57 S.W.(2d) 175; Mo. Pac. R. R. Co. v. S. L. Robinson & Co. (Ark.) 66 S.W.(2d) 1055; G., C. & S. F. Ry. Co. v. Morrow (Tex. Civ. App.) 66 S.W.(2d) 481; P. & S. F. Ry. Co. v. Andrews (Tex. Civ. App.) 278 S. W. 478; G., C. & S. F. Ry. Co. v. Belton Oil Co., 45 Tex. Civ. App. 44, 99 S. W. 430. The trial court did not err in overruling this special exception.

Assignments 3, 4, 5, 6, 7, 8, and 9 refer to tlie court’s ruling on questions of evidence, and in view of the disposition we will make of this appeal, we refrain from discussing these matters.

By- its tenth and eleventh assignments appellant complains of the court submitting to the jury the question as to whether or not the car became defective in transit. We overrule these assignments. The evidence was undisputed that the ear was defective when it arrived at its destination. This evidence would support a finding either that the car was defective when loaded or had become so in transit. Furthermore, the damage having been shown to have resulted from the leak in the door to the car, the burden shifted to the carrier to show that such damage was not the result of its negligence, and there are some cases going so far as to hold that the carrier will be excused only on a showing that the damage was caused by acts of God or a public enemy, or inherent defects in the commodities shipped. American Ry. Express Co. v. H. Rouw Co., 185 Ark. 526, 48 S.W.(2d) 220; 8 Tex. Jur. p. 398 § 269; Fentiman v. Atchison, etc., 44 Tex. Civ. App. 455, 98 S. W. 939.

Appellant, by its twelfth and thirteenth assignments, complains that the evidence was insufficient to sustain the finding of the jury that this car of radishes was of the reasonable market value of $765 when it was received by consignee in its alleged damaged condition. We sustain this assignment. The only evidence of the market value of this car of radishes was given in the deposition of the witness Herman L. Gol-dstein. He attached to his deposition what purported to be an account sales of this car of radishes. It was dated January 18, 1930, while the evidence clearly shows that .the car was not received in Philadelphia until January 20, 1930. This account sales could not be correct 6r of any weight if it was made on the 18th, and we have no right to presume that it was made on any other day. It is further shown that some of these radishes were not removed from the car until January 28, 1930.

It was incumbent upon appellee to prove the market value of these radishes on January 20, 1930, the day they were received by consignee. There is no proof as to this fact. The witness Herman L. Goldstein did testify that the radishes were sold for the best price obtainable, but he does not say on which date, nor that the best obtainable price was the reasonable market price. Houston & T. C. Ry. Co. v. Lewis (Tex. Civ. App.) 185 S. W. 593; Gulf, C. & S. F. Ry. Co. v. Peacock, 60 Tex. Civ. App. 250, 128 S. W. 463; M., K. & T. Ry. Co. v. McLean, 55 Tex. Civ. App. 130, 118 S. W. 161.

In the absence of proof of the reasonable market value of the radishes on the day they arrived at the destination and in the damaged condition in which they did arrive, there is no way to properly determine the amount of appellee’s damages. This will necessitate the reversing of this judgment. All other assignments of error are rendered immaterial.

The judgment will be reversed, and the cause remanded.


author: JACKSON, J.

text:
    COMMERCIAL INV. TRUST, Inc., v. SMART et al.
    No. 3766.
    Court of Civil Appeals of Texas. Amarillo.
    March 16, 1932.
    Rehearing Denied April 13, 1932.
    Second Motion for Rehearing Filed April 9, 1934.
    Jno. A. Coffee, of Hereford, for appellant.
    W. H. Russell, of Hereford, for appellees.
   JACKSON, J.

This suit was instituted in the county court of Doaf Smith county, Tex., by the Commercial Investment Trust, Inc., against the defendants, W. S. Smart, and his wife, Mrs. W. S. Smart, on a note executed by them to the Panhandle Barber Supply Company, dated July 17, 1930, in the principal sum of $163, with 10 per cent, interest thereon and 15 per cent, attorneys’ fees as provided therein. The plaintiff alleges that the note was payable in monthly installments of $10 each; that the defendants had paid one installment of $10, and had thereafter defaulted, and under the accelerating clause plaintiff had declared the balance of the principal, with unpaid interest, and attorneys’ fees, due; that contemporaneously with the execution of the note the defendants made and delivered their chattel mortgage on certain personal property fully described in the petition, of the reasonable value of $175, to secure the payment of said note; that on July 21, 1930. the note was transferred and assigned to it by the Panhandle Barber Supply Company, and that plaintiff is now the legal owner and holder of said note. Plaintiff sought judgment for its debt and a foreclosure of its chattel mortgage lien.

The defendants answered by general demurrer, special exceptions, and, among other mings, pleaded that they were entitled to credit for certain payments on said note which they alleged discharged and satisfied the indebtedness evidenced by the note sued ■on, 'and prayed that plaintiff recover nothing against them by reason thereof, and the mortgage lien be canceled; that they go hence without day and have all such other and further relief to which they are entitled •either in law or in equity.

By way of cross-action the defendant, Mrs. W. S. Smart, joined pro forma by her husband, sought to recover from plaintiff the sum of $950 for a tort growing out of the same transaction, committed by the plaintiff and its agents on said Mrs. Smart, the alleged facts of which are set out in detail, and asked for actual damages in the sum of $750, and exemplary damages in the sum of $200.

In response to special issues submitted by the court, the jury found, in effect, that the defendants were due the plaintiff on its note a balance of $40.78that the defendant, Mrs. W. S. Smart, suffered actual damages by reason of the tort alleged in the sum of $400, and exemplary damages in the sum of $100.

On these findings the court rendered judgment that the plaintiff recover nothing agaipst the defendant, Mrs. W. S. Smart; that it have judgment against W. S. Smart for $40.78, that plaintiff’s note and chattel mortgage be canceled and held for naught; that the defendants have judgment against the plaintiff for the sum of $500, which amount should be credited with $40.78, leaving a net judgment in favor of the defendants for the sum of $459.22, with costs and interest, from which judgment the plaintiff prosecutes this appeal.

The appellant presents as error the action of the trial court in rendering judgment in favor of the defendants because the amount placed in controversy by the defendants in their cross-action exceeds the sum of $1,000, and hence the county court was •without jurisdiction.

The appellant pleaded that the defendants owed it a balance of $153 principal, and 15 per cent, attorneys’ fees alleged to have been stipulated for in the note. ,

The appellees pleaded certain payments made by them on the note, which they alleged were sufficient to discharge it, and asked that the chattel mortgage be canceled, which was equivalent to asking the court to hold that the note was null and void, because, so long as the note or any part thereof was in force and unpaid, the chattel mortgage was valid for the purpose of securing the payment of such balance.

In addition to asking the cancellation of appellant’s indebtedness, the appellees sought to recover $750 actual damages and $200 exemplary damages, which, together with the amount they claimed they had paid on the note, made the amount placed in controversy by their cross-action in excess of $1,000.

There is no statement of facts in the record, but the issue submitted to the jury by the court as to the amount of the balance due appellant by the appellees on the note discloses that the amount claimed by appellant which appellees asserted had been paid was not only made an issue by the pleadings but was a controverted issue under the testimony. This is also evidenced by the judgment of the court affirmatively canceling the note and mortgage. The amount put in controversy by the appellees’ cross-action being in excess of $1,000, the court was without jurisdiction to entertain such cross-action. Billings v. Southern Supply Co. (Tex. Civ. App.) 194 S. W. 1170; Smith Premier Sales Co. v. Connellee (Tex. Civ. App.) 147 S. W. 1197; Parlin & Orendorff Implement Co. v. Clements, 54 Tex. Civ. App. 356, 117 S. W. 495; Cable Co. v. Rogers, 44 Tex. Civ. App. 620, 99 S. W. 736.

This is the law as announced by this court in Commercial Credit Co., Inc., v. Moore, 270 S. W. 582. The record in that case discloses that the appellant had sued for an unpaid balance on an installment note secured by a chattel mortgage, and that appellee in his answer asked for the cancellation of said note and mortgage, and in his cross-action sought to recover alleged damages in the sum of $955, which, together with the balance on the note and which appellee sought to cancel, aggregated an amount in excess of the jurisdiction of the county court.

After the case was remanded the appellee Moore, by amendment, reduced the damages claimed in his cross-action to an amount which, added to the balance of the note which he sought to have canceled ($191.55), aggregated a sum less than $1,000.

On a second appeal, Commercial Credit Co. et al. v. Moore, 288 S. W. 508, this court, in a majority opinion, held that appellee had the right, when not fraudulently done, to amend, if the amount claimed in the original pleading was not a fixed sum. The record on the second appeal discloses that the balance of the debt claimed by appellant which appellee sought to cancel and the amount of damages claimed by appellee in his cross-action was less than $1,000, and therefore within the jurisdiction of the county court.

The judgment is reversed, and the cause remanded.

On Motion for Rehearing.

The appellees insist in their motion for rehearing that this court erred in holding that the county court was without jurisdiction of thoir cross-action, because they had not therein placed in controversy an amount exceeding $1,000. Their contention is that their plea alleging payment of the note sued on by appellant and asking for the cancellation of the note and mortgage is not to he considered in determining the amount involved in their cross-action.

Article 2014, R. C. S., requires that payment must be specially pleaded or the proof of payment is not admissible. Payment therefore cannot be shown under an answer containing only a general denial. It will be noted that appellant sought to recover on a note for $163, with interest and attorneys’ fees, and to foreclose a chattel mortgage on personal property alleged to be of the value of $175. The appellees pleaded payment and asked that this chattel mortgage lien against their property be canceled, because the note, the payment of which was secured by the chattel mortgage, had been paid. Appellant could not, under the state of this record, have taken a nonsuit of its cause of action and thereby prejudice the right of appellees to show that the debt evidenced by the note sued on by appellant had been paid and obtain a judgment canceling said note and mortgage.

It is settled that the defendant may set up in his answer any matters of defense which go to defeat the plaintiff’s cause of action, and, if the defendant pleads a cross-complaint touching the subject-matter of the suit, he may have legal redress against the plaintiff for any relief to which he is entitled and this right to affirmative relief cannot he defeated by a voluntary nonsuit by plaintiff of his cause of action. Bradford et al. v. Hamilton, 7 Tex. 55.

A party owing a note secured by a lien may maintain a suit for the cancellation thereof and a release of his property from the lien. Johnson v. Lockhart et al., 20 Tex. Civ. App. 596, 50 S. W. 955.

In Jackson v. Burst, Edwards & Co. (Tex. Civ. App.) 154 S. W. 243, 244, it is said: “Hid the answer of appellant present a state of facts which entitled the appellant to the affirmative relief asked in his prayer, to wit, the cancellation of the note sued upon and a judgment for costs? In strict construction the pleading may be said to be an answer; hut if the facts stated as a defense are such facts as would support an independent suit for cancellation of the note we can conceive no reason why the allegations thereof in an answer, followed by appropriate prayer, would not be sufficient, under our system of pleading, to constitute a plea seeking affirmative relief.”

The motion for rehearing is overruled.


author: FUNDERBURK, Justice.

text:
    HAYS v. SHAW, Banking Com’r, et al.
    No. 1222.
    Court of Civil Appeals of Texas. Eastland.
    April 6, 1934.

      Kirby, King & Oversbiner, of Abilene, for plaintiff in error.
    Ocie Speer, Fred S. Rogers, and Jay H. Brown, all of Austin, for defendants in error.
   FUNDERBURK, Justice.

This suit was brought by W. 'S. Hays, against James Shaw, banking commissioner, and Abilene State Bank, to recover $S87 (less $83.70), which had been deposited in said bank prior to its insolvency. The deposit was sought to be recovered as one entitled to priority in payment over general creditors Of the bank, upon the theory that it was made for a specific purpose, agreed to by the bank, and therefore constituted a trust fund. Plaintiff was a Confederate veteran, and the deposit represented the proceeds of pension wax-rants issued to him by the state of Texas. There were alternative allegations, apparently designed to show the fund came into the possession of the banking commissioner charged with a trust, in that same being pension money was exempt by R. S. 1925, art. 6213, from payment of the debts of plaintiff, and from garnishment, execution, or other legal process, and could not be seized in any manner, or for any purpose.

The defendants, in addition to a general demurrer and general denial, specially pleaded estoppel, based upon the fact that plaintiff had made proof of his claim as a general creditor and had been paid thereon a 10 per cent, dividend (being the $83.70 above mentioned).

Upon a nonjury trial the court found that the deposit of $887 was a general deposit, and not a special deposit, and that plaintiff by making proof of claim therefor as a general depositor, and, by accepting the dividend of $S3.70 paid upon such claim, had bound himself by an election of remedies. The court further found that at the time the banking commissioner took over the assets of the bank there was $411.25 cash in the vault, and the bank" had to its credit in correspondent banks a sum in excess of $10,000. Further findings recite that the plaintiff was 85 years of age and not conversant with the law relating to the filing of claims against banks in liquidation; -that the form for making claim was sent voluntarily by the banking commissioner with the request to execute and return same, all of which was done by Roscoe Hays, plaintiff’s son, acting as his duly authorized agent, who, however, was not himself conversant with the laws relating to the filing of such claims. Afterwards the claim for priority payment, with credit acknowledged for the dividend payment, was made by plaintiff himself. The court further found that the administration of the estate by the banking commissioner would not be delayed or retarded by the filing of the claim for priority.

The judgment was for the defendants, based upon the conclusions (1) that the deposit was general, and therefore not entitled to priority in payment; and (2) that plaintiff had bound himself by electing another remedy. Plaintiff has prosecuted writ of error. The parties will be referred to as in the lower court; i. e., plaintiff and defendants.

It is the conclusion of a majority of the members of the court that all those propositions which in one way or another present questions of estoppel or election of remedies are, regardless of their merits, if the questions were open, ruled by the opinion othe Commission of Appeals in Tyler County State Bank v. Shivers, 6 S.W.(2d) 108. Under this view, said propositions are required to be, and are, overruled. The writer is of the opinion that the propositions should be sustained, based upon the conclusion that the opinion in said Tyler County State Bank Case, upon this point, is incorrect both upon reason axxd the best authority, and, the judgment in that case being also based upon an independent ground, the opinion does not necessarily express the views of the Supreme Court. Even under this view, however, the propositions which would be sustained would be rendered immaterial because of the conclusions hereinafter stated. Hence it is deemed unnecessary to devote further discussion to this phase of the case.

There was, in our opinion, no ex-ror in the judgment, or any part of the proceedings upon which it must depend for support, in any respect, of which complaint is made, in so far as said judgment was based upon the finding that the deposit was general and not entitled to priority in payment. . Neither the pleadings nor the evidence disclose any contention that the deposit was a “special deposit” in the strict sense of that term. To be such, it was necessary that thei-e had been an agreement that the identical warrants deposited, or at least the identical moneys representing the proceeds of said warrants, should be returned to the depositor. “A special deposit is a delivery of property, securities, or even money, to the bank for the purpose of having the same safely kept, and the identical thing deposited returned to the depositor.” 7 C. J. 630, § 306. The theory upon which plaintiff sought to have the deposit adjudged to he entitled to priority appears to have been that it was of the nature of a special deposit, in that it was made for a specific purpose. ‘‘While such a deposit is sometimes termed a ‘special deposit,’ and partakes of the nature of a special deposit to the extent that title remains in the depositor, and does not pass to the bank, yet it seems more accurate to look on this as a distinct class of deposit. In using deposits made for the purpose of having them applied to a particular purpose, the bank aots as the agent of the depositw * * * and the agency created by the deposit is revocable by the depositor at any time before the purpose of the deposit has been accomplished.” (Italics ours.) 7 C. J. 632, § 367. “A general deposit * * * is the payment of money into the bank to be repaid on demand, in whole or in part, as called for in any current money.” 7 C. J. p. 628, § 305.

The burden of proof was upon plaintiff to show that the deposit was not a general deposit, or (which amounts to the same thing) was a special deposit, or deposit for a specific purpose. There was a total absence of any evidence to show a special deposit in the strict sense of that term. It is questionable, we think, if there was any evidence so far rebutting the presumption of a general deposit as to raise an issue of fact as to whether the deposit was one for a specific purpose. But, conceding there was, we believe it must be held that there was ample evidence to support the trial court’s conclusion of fact that the deposit was a general one, and therefore not a deposit for a specific purpose. What, according to any evidence when given the fullest credence, was the bank required to do with the deposit different from what it was under obligation to do if it was a general deposit? There was no evidence that the bank was to do otherwise than pay plaintiff money up to the amount of the deposit when and as called for. Evidence of the express purpose or intention that it would not be called for until a time dependent upon (he happening of certain contingencies was no evidence to show that plaintiff did not have the right to demand payment -of the deposit at any time. There was no evidence of any particular purpose for which the deposit was to he made, which purpose was of such nature that, in the use of the deposit for such purpose, the bank could act solely in the capacity of agent for plaintiff. In paying the amount of the deposit to plaintiff, the bank would be acting for itself. Plaintiff, in receiving such payment, would be acting for himself. It would be an anomaly to say that plaintiff in such case would by his agent pay himself the amount of the deposit. He could not be both the payor and payee. For this and other reasons, the conclusion is that the specific purposes for which a deposit may be a deposit for specific purposes do not include such as the evidence in this case tends to show.

We are of the opinion that the rights of the parties as reflected by the record are in no wise affected by the provisions of R. S. 1925, art 6243. Said provision is the last article of R. S. 1925, title 100, relating to Pensions. The provision is: “No amount awarded to any person under the provisions of this law (italics ours) shall be liable for the debts of any such person; shall not be assignable and shall be exempt from garnishment or other legal process.” The italicized words “this law,” as the provision was originally enacted, referred to Acts 1919, p. 10, c. 10, relating to city pensions to firemen and policemen (R. S. 1925, arts. 6229 to 6243, inclusive). If it had been the legislative intent to so change the law as to extend that provision to pensions of Confederate veterans, it is reasonable to suppose that, instead of the words “this law,” there would have been substituted “this title,” or words to that effect. Besides, if the provision should be construed as applying to Confederate pensions, it would not operate, we think, to give a deposit of such any right of priority in payment. Theoretically, the dividends which will be received from such a deposit represent the amount of the deposit remaining on hand when the bank became insolvent. In no just sense, we think, can it be said that the remainder'of the deposit has been subjected to the debts of the plaintiff, or subjected to garnishment, or other legal proceedings, or has been assigned within the meaning of any of the prohibitions of said statute.

We accordingly conclude that (he judgment of the court below should be affirmed, and it is so ordered.


author: .O’QUINN, Justice.

text:
    JENKINS v. RUNNELS et al.
    No. 2556.
    Court of Civil Appeals of Texas. Beaumont.
    March 15, 1934.
    E. B. Lewis, of Center, for appellant.
    Sanders & McLeroy,' of Center, and Huggins, Kayser &' Liddell, of Houston, for ap-pellees.
   .O’QUINN, Justice.

Appellant brings this appeal from a judgment of the district court of Shelby county ■sustaining a plea of privilege. As the appeal will have to be dismissed, we shall not make any statement of the nature of the suit or of the grounds upon which it was sought to maintain venue in the court where the suit was filed.

Upon hearing the court sustained the plea of privilege on March 27, 1933. No motion for a new trial was filed. Notice of appeal was given. Appeal bond was filed May .3, 1933. As stated, the judgment was rendered on March 27, 1933. The last day for filing the record in this court was May 26, 1933. Article 1839, R. S. 1925 (as amended by Acts 43d Leg. [1933], c. 67, p. 142 [Vernon’s Ann. Civ. St. art. 1839]). This article provides: “In appeal or Writ of Error the Appellant or plaintiff in error shall file the transcript with the Clerk of the Court of Civil Appeals within sixty days from the final judgment or order overruling motion for new trial, or service of the writ of error; provided, by motion filed before, at, or within a reasonable time, not exceeding fifteen days, after the expiration of such sixty day period, showing good cause to have existed within such sixty day period, why said transcript could not be so filed, the Court of Civil Appeals may permit the same to be thereafter filed upon such terms as it shall prescribe.”

A motion to extend the time for filing the record was filed in this court on June .14, 1933, and was granted, extending the time for filing until August 1, 1933. A second motion for extension was filed and granted on July 31, 1933, extending the time for filing until September 1, 1933. The transcript was filed in this court August 28, 1933, and the statement of facts on August 2, 1933. Ap-pellees duly ' filed their motion to dismiss because the record was not filed within the time required by law; hence the court is without jurisdiction to hear and determine the matter.

This motion must be sustained. The first motion for extension of time in which to file the record was not filed in this court until June 14, 1933, which was 79 days after the rendition of the judgment. It is well settled that a Court of Civil Appeals is without authority to permit the filing of the record of a case on appeal after the expiration of the 60 days allowed for the filing of the transcript, where appellant fails to apply for extension of time within the 75-day period, as prescribed by article 1839, as amended, though good cause may have existed within the 60-day period, for failing to file the record within the required time. Hunter v. Moore (Tex. Com. App.) 62 S.W.(2d) 97; Red v. Bounds (Tex. Com. App.) 63 S.W.(2d) 544; Wall v. Gillen (Tex. Civ. App.) 63 S.W.(2d) 270; Harris v. Boswell (Tex. Civ. App.) 64 S.W.(2d) 1029.

It is contended that the motion to dismiss should be overruled because upon motion this court granted an extension covering the time when the record was filed. This contention is without merit. We did grant an extension, hut same was inadvertently done and was without effect. The motion for extension having been filed after the expiration of the 60-day period allowed for the filing of the transcript, and after the expiration of the 75 days for the filing of such motion for extension (79 days after the rendition of the judgment), we were without authority to grant the extension even though good cause existed for failing to file the record within the time required hy law. Hunter v. Moore (Tex. Com. App.) 62 S.W.(2d) 97.

The motion to dismiss is sustained, and the appeal is dismissed.


text:
    COMMERCE REALTY CO. et al. v. CHAS. F. THOMPSON SCENIC CO.
    No. 9299.
    Court of Civil Appeals of Texas. San Antonio.
    March 21, 1934.
    YandeiTIoeven & Greathouse, Sylvan Lang, and Morris Wise, all of San Antonio, for appellants.
    Samuel De Groot, of Los Angeles, Cal., and' Hertzberg & Kercheville, of San Antonio, for.-appellee.
   MURRAY, Justice.

Appellee, Chas. F. Thompson, doing 'Business under the trade-name of Chas. F. Thompson Scenic Company, instituted this: suit seeking to recover damages from appellant Commerce Realty Company, resulting to him as a consequence of Commerce Realty Company’s breach of a certain contract giv-, ing appellee the exclusive advertising right in the Aztec Theatre and further agreeing to exhibit an advertising curtain in said theatre.. Thompson was to pay $500 per month for the curtain, and in turn he had sold' twenty subcontracts to advertisers who were- to use space on this curtain.

Thompson alleged that Commerce Realty Company breached its contract by failing to exhibit the advertising curtain, during the last three months of the year, and that he was thereby damaged in the sum of $3,204.42.

The trial was before the court, without the intervention of a jury, and judgment w-as rendered in Thompson’s favor in the sum of $1,-510.9S. The trial judge made and filed his. findings of facts and conclusions of law.

Commerce Realty Company interpleaded' the San Antonio Amusement Company and. alleged that it had leased the Aztec Theatre and had assumed the advertising contract,: and had agreed to save and hold harmless' Commerce Realty Company therefrom. Judgment was accordingly rendered in favor of Commerce Realty Company over and against the San Antonio Amusement Company.

Appellants complain of the trial court’s permitting oral testimony with reference to the subcontracts. The trial court permitted this only after the attorneys for appellants had brought- out such matter on cross-examination, and we find no reversible error in this.

It is -clear from the findings of facts and conclusions of law that the 'trial judge ¡based judgment herein upon the amount the subcontracts would produce according to their terms during the last three months of the main contract, which were the months of January, February and March, 1939, less the $500 per month Thompson should have paid appellants. Two of the twenty subcontracts did not run for the full year, and they were properly excluded from consideration by the trial judge.

By appellants’ second assignment of error they complain of the trial court’s taking into consideration, in arriving at the amount of damages, three of the subcontracts, which it is contended had been breached by the sub-advertisers not meeting their weekly payments. This 'was insufficient to show a breach of these contracts, and we overrule this assignment.

The third assignment complains of the taking into consideration two of these subcontracts,' one of which had -been settled and another assigned and settled. These settlements took place after appellants’ breach on the main contract, and the trial court properly considered these contracts in determining the amount of appellee’s damages.

The fourth assignment complains of the trial court’s consideration of five of the subcontracts, which had been paid in full in determining the amount of appellee’s damages. We sustain this assignment. Appel-lee collected in full on these contracts, including the three months that the curtain was not shown. He has never refunded to such subcontractors for the time their advertisement was not shown. Any claim that such subcontractors might now assert against ap-pellee would be -barred by limitation and he could easily defeat their claim. The -burden was on appellee to show his damages resulting as a consequence of appellants’ breach of the main contract. He will not ¡be permitted to secure judgment of items which he says he was unable to collect as a result of the breach by appellants, when the evidence shows that he has collected those items and retained the money up to and including the time of the trial. The trial judge found that appellee would be compelled to return these sums to the subcontractors. This finding is not supported -by the pleadings or the proof. These items amount to the sum of $1,-170, and this sum should be deducted from the amount of the judgment, which was $1,-510.9S, leaving the sum of $340.98, which is the sum that appellee should have recovered.

The judgment of the trial court will be reformed so as to reduce appellee’s recovery to the sum of $340.98, and as thus reformed is affirmed.

Reformed and affirmed.


author: LEVI, Justice.

text:
    MARBLE SAV. BANK OF RUTLAND, VT., v. DAVIS.
    No. 4591.
    Court of Civil Appeals of Texas. Texarkana.
    Jan. 31, 1934.
    Rehearing ‘Denied Feb. 8, 1934.

      E. R. Pedigo and G. P. Zimmerman, both of Austin, for appellant.
    Neyland & Neyland, of Greenville, for ap-pellee.
   LEVI, Justice.

The appellee brought the suit against the appellant bank seeking, upon the alleged ground of usurious contract, to have payments of interest on the principal sum previously made by her or for her benefit applied in discharge of the balance of $1,300 on the principal note originally for $2,350 with interest; to cancel the deed of trust on sixty-five acres of land-executed to secure payment of the note and interest; to remove from the land the cloud east upon the title.

The appellant answered by general denial, and by way of cross-action sought judgment on the note with foreclosure of the lien on the land and an order of sale.

The case was tried before the court upon an agreed statement of facts which included the principal note, the coupon interest notes, and the deed of trust. It was agreed “that if the plaintiff is not entitled to recovery on her plea of usury, the defendant is entitled' to judgment of foreclosure and order of sale on the cross action.”

The court, finding usury, credited the principal note with the sums paid upon the principal and the interest coupon notes and adjudged the note discharged thereby, canceled the deed of trust upon the land, and removed the cloud from the title to the land, and adjudged the cost against the defendant bank.

The facts in the case, as material to state, show that the principal note was made payable to the Maxwell Investment Company and was thereafter, on March 22, 1922, transferred to the appellant bank and the appellant bank is now the owner of the note and has been since its transfer; that the appellee has paid each of the coupon notes due and has paid on the principal note the sum of $1,-050, leaving due and unpaid thereof the sum of $1,300; that the note, signed by the appel-lee and of date February 1, 1922, reads as follows:

“First Mortgage Real Estate Note.
“No. 18640 “$2,350.00
“On the 1st day of January, 1933, without grace, for value received, we promise to pay to the order of Maxwell Investment Company at the Guaranty Trust Company of Kansas City, Missouri, Twenty-Three Hundred Fifty and No/100 ($2,350.00) Dollars, in lawful money in the United States of America, with exchange on the City of New York, with interest thereon at the rate of 7% per annum, payable annually, according to the terms of coupon interest notes of even date herewith and hereto attached.
“This note shall bear interest at the rate of 10% per annum after maturity until paid. In the event of default in the payment of this note or any interest thereon, both note and coupon shall be payable at the office of said Company, Dallas, Texas. Partial payment may be made in accordance with privilege endorsed on the back of this note.
“Dated this 1st day of February, 1922.
“[Signed]-.”

On the back of the note is indorsed:

“Privilege is granted to pay $100.00 or any multiple thereof on any interest date, provided such payment does not exceed ⅛ of the principal in any one year. This privilege is not to be cumulative.”

Attached to the above note were eleven coupon interest notes. Coupon interest note No. 1, signed by the appellee, reads as follows:

“Coupon Note.
“No. 18640 " “$150.70.
“On the 1st day of January, 1923, for value received, we promise to pay to the Maxwell Investment Company or bearer at the Guaranty Trust Company at Kansas City, Missouri, One Hundred Fifty and 7%0o ($150.-70) Dollars in lawful money in the United States of America with exchange on the City of New York, for interest due on that date according to, the tenor of a principal note for $2350.00 of even date herewith. This coupon to draw 10% interest after maturity until paid.
“Dated this 1st day of February, 1922.
“Coupon No. 1. “[Signed] -.”

The ten other coupon interest notes are identical with the above coupon interest note No. 1, except as to their respective due dates and the amount. The ten coupon interest notes are in the amount of $164.50 each and due respectively on January 1, 1924, to January 1, 1933, inclusive.

The plaintiff executed a deed of. trust upon sixty-five acres of land to secure payment, as recited in the deed-of trust, of the principal note and also of the payment of each of the interest coupon notes. The deed of trust provides, as far as need be stated, that:

“The grantor hereby covenants and agrees .with said third party and its successors and assigns as follows, to-wit:
“* * * In the event default shall be made in the payment of principal or interest, and said note or notes or any of the coupons thereto attached shall be placed in the hands of an attorney for collection, or to be proved or established, or allowed in any court, to pay 10% of the amount thereof as attorney’s fee, and further,- in the event of such default, to pay said principal, interest and attorney’s fee at the office of said third party at Dallas, Texas; * * * But if default he made in the payment of any indebtedness herein provided for, whether principal or interest, when the same becomes due and. de-mandable, or if default be made in any stipulation, agreement or covenant herein contained, then the whole of the indebtedness may, at the option of said third party, or any holder of said note or notes, or other indebtedness secured hereby, without notice to said grantors, be declared! due and payable, and the said third party, or any holder of said note or notes, or other indebtedness secured hereby, may, at its or their option, institute proceedings respectively for the collection at law or in equity, of such amounts as may then be unpaid, or the said party of the second part or his successors hereunder when so requested by the third party, or any legal holder of said note or notes, shall take possession of said property and shall sell or cause the same to be sold, or so much thereof as may seem to him necessary to meet said indebtedness and the expense of executing this trust. * * * And shall receive the proceeds of such sale to bo applied as follows : * * * Third, to the whole debt due to the said third party, its successors or assigns, together with all interest thereon etc.

The conclusion of the trial court was that:

“The terms of the deed of trust secured the payment of the coupon interest notes as well as the principal note and gave the right, upon default in the payment of any coupon interest note, of the holder of them to declare them all due as well as to declare the principal due, and such terms of the .deed of trust makes the contract usurious.”

The single point for decision on appeal, as agreed by the parties, is “that of whether or not the contract, evidenced by the principal' note, the interest coupons and the deed of trust was, as a matter of law, usurious by reason of the acceleration clause in the deed of trust.”

It is believed the trial court has correctly construed the terms of the accelerating clause in the deed of trust, as authorizing collection of usurious interest under' the statutes. The argument of appellant is that the words “then the whole of the indebtedness may” be “declared due and payable” refer only to the interest and interest notes that have become in arrears and finally payable and are not paid. But it is thought that this construction is not the necessary and unavoidable one. That every word of the clause may have a fair construction without introducing such restrictive construction. It was expressly provided that whenever “any indebtedness herein provided for, whether (it be) principal or interest,” through a “default” or arrears of timely payment become “due and demandable” as a matter of fixed obligation as to time of payment, then, and in that event, “the whole of the indebtedness,” meaning the indebtedness collectively “herein provided for” and then payable as well as payable in the future, may be “declared due and payable.” The words “the whole of the indebtedness may be declared due and payable” refer not alone to indebtedness owing aid in arrears and payable, but speaks as well prospectively of the indebtedness collectively payable in futuro. Stated in other words, the whole of the indebtedness herein provided for shall be due and payable whenever there is default “in any indebtedness herein provided for, whether it be principal or interest.” An indebtedness may mean a sum owed or owing, but sometimes what is owing is not due. A .note payable a year after date is legally owing upon its delivery to the payee, but it is not due until the year .has elapsed. The language broadly used “that the whole of the indebtedness” provided for shall become due and collectible is hardly susceptible of the limited construction that the principal and accrued interest only shall become due and collectible. If so intended, the simple language could easily have been used that the principal and accrued interest shall be due and de-mandable. If tbe language of either the principal note or the deed of trust had indicated, as some of the reported cases show, the meaning of the “whole indebtedness” to be the principal and “accrued interest,” then a different situation may have been present here. It is quite clear when effect is given, as must be done, to the right of the lender or holder to advance or accelerate the due date, that the rate of interest as fixed in the contract will automatically be increased, amounting to usury under the statutes. Shropshire v. Commerce Farm Credit Co., 120 Tex. 400, 30 S.W.(2d) 282, 39 S.W.(2d) 11, 84 A. L. R. 1269; Bothwell v. Bank & Trust Co., 120 Tex. 1, 30 S.W.(2d) 289, 76 A. L. R. 1480; Reynolds Mortgage Co. v. Thomas (Tex. Civ. App.) 61 S.W.(2d) 1011; and other cases.

There is distinguishment between the language of the present accelerating clause and that in Ætna Life Ins. Co. v. H. D. Foster et ux., 66 S.W.(2d) 428, lately decided by this court, and Spiller v. Bell (Tex. Civ. App.) 55 S.W(2d) 634.

The judgment is affirmed.


author: FLY, Chief Justice.

text:
    SCHWANDNER v. DAVIS.
    No. 9297.
    Court of Civil Appeals of Texas. San Antonio.
    March 21, 1934.
    Morriss & Morriss, of San Antonio, and Frank Lane, of Bracketville, for appellant.
    Walter F. Jones and Robt. M. Lyles, both of Del Rio, for appellee.
   FLY, Chief Justice.

Appellant contested the election of appellee to the office of county commissioner of precinct No. 2 of Kinney county. The cause was heard by the district judge, who sustained the ruling of the officers of the election, that appellee had been elected to the office of commissioner. The officers of the election certified that appellee had received thirty-five votes and appellant twenty-eight votes, thus giving appellee a majority of seven votes over appellant. After hearing the evidence, the trial judge found that appellee was elected to the office by a majority of one vote, he having received thirty votes and appellant twenty-nine. Several of the votes counted by the election officers for appellee were cast out by the court.

The election, before the district judge, turned on the legality of the ballot east by Rafaela I-Iernandez, who was shown to have been a native of Mexico, who-had removed to Texas and married in 1926. Appellant inti'o-duced the testimony as to the alienage of Rafaela Hernandez and went no further, not seeking to show that she had never been naturalized. Appellee introduced no evidence as to Rafaela Hernandez, but claimed that the presumption was that she had been naturalized and that the burden was on appellant to establish the contrary. Appellant offered no testimony on the trial to show that R.afaela Hernandez was not a naturalized citizen of the United States, and therefore unauthorized to vote.

The main question, as heretofore stated, is the correctness of the decision of the district judge as to the status of Rafaela Hernandez as a citizen of the United States. This court has heretofore passed on the identical question presented in this case and it was held that when it was established that a person was alien born, the presumption would prevail that the state of alienage continued, but it was also held that that presumption would be overcome by the presumption arising from the action in permitting the former alien to vote, that such alien had been naturalized and had become an American citizen. Kartes v. Fritter (Tex. Civ. App.) 63 S.W.(2d) 389. No reasons have been given, no'r arguments advanced, that have shaken the belief by this court that such opinion is the law in this case and we adhere to it.

There was sufficient evidence to sustain the finding of the trial judge that Tomas Falcon, at the time he east his ballot for appellee, was a resident and legal voter of precinct No. 2 of Kinney county, and the proposition assailing the ruling of the trial judge as to Tomas Falcon is overruled.

The court did not err in refusing to allow appellant to reopen the case after it had been decided. The affidavits attached to the motion to reopen did not prove nor tend to prove that Rafaela Hernandez was not a naturalized citizen. Rafaela Hernandez was one of the affiants and she was not asked — or at least did not swear — that she had not been naturalized, but her testimony, as that of the other affiant, was to the effect that her parents were not naturalized citizens of the United States.

We overrule the proposition presenting this question and affirm the judgment.