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PALM et al. v. NUNN. (No. 1360.)

(Court of Civil Appeal of Texas. , Amarillo. May 15, 1918 # Denied June

1. APPEAL AND ERROR 3:719(6) - FUNDAMENTAL ERROR—DIRECTION OF VERDICT. The action of the trial court in directing a verdict presents a question of fundamental error, which it is the duty of the Court of Civil Appeals to consider without any assignments. 2. BILLS AND NOTES @:301—LIABILITY OF INDORSER—RIGHTS. Where a note was given, secured by a chattel mortgage, and the payee did not record the mortgage, and indorsed the note to plaintiff, and assigned the chattel mortgage to him, the plaintiff's duty to record the mortgage could not be inferred from his mere acceptance of the note and unrecorded mortgage, unless facts were shown making it inequitable for him to deny that such was his duty, and the plaintiff could recover against the original payee as an indorser. 3. APPEAL AND ERROR &=1099(3) – SUBSEQUENT APPEAL-LAW OF THE CASE-SEVERABLE ISSUES. Where, in an action by the indorsee of a note who was assignee of an unrecorded chattel mortgage to secure the note against the payee of the note as indorser, a finding of fact was made that mortgaged property was in the hands of bona fide purchaser, which finding, not complained of, would not be fundamental error, action of appellate court in affirming that part of the judgment, having reversed on the issue of liability of indorser, could not be assailed on appeal from judgment rendered on retrial; rule 62a (149 S.W. x) permitting affirmance and reversal as to severable issues. 4. BILLS AND NOTES @:523 - RECOURSE ON SECURITY-ESTOPPEL. In an action against payee of note as indorser by the indorsee and the assignee of an unrecorded chattel mortgage on cattle, executed to Secure it, held relative to release of indorser that plaintiff was not estopped under the evidence from denying that it was his duty to record mortgage.

Appeal from District Court, Armstrong County; Hugh L. Umphres, Judge.

Action by G. J. Nunn against E. P. and Albert Palm. Judgment for plaintiff upon a directed verdict, and defendants appeal. Affirmed.

Crudgington & Works, of Amarillo, for appellants. S. E. Fish and Kimbrough, Underwood & Jackson, all of Amarillo, for appellee.

HALL, J. On the former appeal of this case, as reported in 194 S. W. 406, it was styled Nunn v. Smith. After the introduction of the evidence upon this trial the court directed a Verdict in favor of Nunn.

[1, 2] Under numerous assignments of errOr the appellantS challenge the Court’s action, and appellee has filed Objections to the consideration of many of these assignments. This court has heretofore held, and notwithstanding the fact that several other Courts of Civil Appeals are not in accord with us upon the proposition, we still hold that the action of the trial court, in directing

a Verdict, presents a question of fundamental error, which it is our duty to consider without any assignments. In accordance With this holding we have carefully reviewed the record, and have concluded that the trial court was justified in giving the peremptory instruction. On the former appeal We held that by transfer of the note and mortgage, under the conditions shown, appellants impliedly consented to the risk involved in a failure to forthwith record the mortgage. We may infer from the facts in the record before us that the mortgage was in the hands of appellants for about ten days before it was delivered to appellee Nunn. On the former appeal Judge Boyce, speaking for the court, said: “If appellant Nunn assumed the duty of recording the mortgage, of course his failure to do so would operate as a release; but this aSSumption of duty cannot be inferred from the mere acceptance of the note and unrecorded chattel mortgage, and the duty to record the mortgage would not exist, unless such

facts were shown as would make it inequitable for him to deny that such was his duty,” etc.

We find no facts in this record which Would estop him from denying that it was his duty to register the mortgage. The mortgage had not been recorded when appellants indorsed the note. If in their opinion it was necessary to record it in order that they might be protected, they should have filed it With the county clerk, or have required appellee, by some express agreement, to subSequently do so. No additional facts were Shown in this trial bearing upon that issue, and under the former opinion of this court there was nothing to require the trial judge to Submit it.

[3] Another question presented by appellants' brief which we consider is the criticism of that portion of the former opinion affirming the judgment in so far as it deCrees that Louis Hanson purchased the mortgaged property without notice. The issue was clearly drawn in the first trial; there was an express finding of the jury upon that issue against appellants’ contention, and upon the former appeal no complaint was made by appellants of such finding. As provided by rule 62a (149 S. W., p. X), “If it appears to the court that the error affects a part only of the matter in controversy, and the issues are severable, the judgment shall only be reversed, and a new trial ordered as to that part affected by such error,” the judgment of the ' COurt rendered on the first appeal having released Hanson from all liability, did not present fundamental error, and under the rule quoted and the well-understood practice of this court, no other course was left for us than the affirmance of that part of the judgment. The trial court, therefore, would not have been Warranted in Submitting the issue of Hanson's liability to the jury upon the secOnd trial.

[4] Upon the issue of estoppel, in Our Opinion there is nothing in the letter of August 28, 1914, written by appellee's attorneys, Which could have been taken by appellantS aS either a direction or license not to resort to all means to protect themselves from liability upon the note, and upon the trial no effort was made by appellants to prove what, if anything, they would have done but for the letter; in fact, the record is replete With testimony showing that appellants recognized their liability, notwithstanding the fact that the mortgage had not been duly recorded and the mortgaged property had been disposed of by Smith. While appellant testified. On direct examination that the note and Chattel mortgage in question Were executed and accepted by them in accordance with their prior agreement, made with appellee to take such note and mortgage as part of the consideration for the transfer Of the land, they did not testify that appellee agreed to record the mortgage or assume any responsibility by reason of the fact that it had not been recorded. Even though the court had submitted to the jury the issue as to whether or not the note and mortgage had been arranged to the Satisfaction of appellee and taken and accepted by him as part of the consideration, and although a finding favorable to appellants upon such issue had been returned by the jury, still appellants would not be relieved as indorserS under the record before uS.

Finding no reversible error, the judgment is affirmed.

HUFF, C. J., not sitting; being absent in Austin on committee of judges, passing on writs of error for Supreme Court.

PONDER et al. v. CRENWELGE et al. (No. 6038.)

(Court of Civil Appeals of Texas. San Antonio. May 15, 1918. On Motion for Rehearing, June 12, 1918.)

1. JUDGMENT ©->256(5)—VERDICT TO SUPPORT.

Where only the receiver of a railroad was sued, a verdict against the company alone will not support a judgment against the receiver and the company.

2. CORPORATIONS @:559(6)—RECEIVERS.

As a general rule, a corporation is not liable for any acts of a receiver, who has full pos# of its property and entire charge of its affailrS.

4. TRIAL (3=335–APPoRTIONMENT OF DAMAGES BETWEEN CARRIERS. Where the contract of the initial carrier was to transport to a certain place, and there deliver to the connecting carrier, and where there was no partnership between the carriers or ratification of the original contract, evidence which wholly failed to show damages which occurred on each line afforded no basis for an apportionment of damages by the jury. 5. CARRIERS @:174 – RATIFICATION OF CONTRACT OF INITIAL CARRIER. Receiving from initial carrier goods for transportation was not a ratification of the initial carrier's contract, but merely a compliance with Rev. St. 1911, arts. 6608–6612, requiring connecting carrier to receive and transport all freight delivered to it by any other line.

Appeal from District Court, Gillespie County. Suit by F. O. CrenWelge and others against A. R. Ponder, receiver, and others. Judgment for plaintiff, and certain defendants appeal. Affirmed in part, and reversed and

remanded in part.

Mason Williams, of San Antonio, and E. H. Crenshaw, Jr., of Kingsville, for appellants. Martin & McDonald, of Austin, Martin & Petsch, of Fredericksburg, and T. M. West, of San Antonio, for appellees.

FLY, C. J. F. O. Crenwelge, Dave Reed, and J. C. Campbell instituted this suit against Frank Andrews, receiver of the St. Louis, Brownsville & Mexico Railway Company, Duval West, and A. R. Ponder, receivers of the San Antonio, Uvalde & Gulf Railway Company, the San Antonio & Aransas Pass Railway Company, M. H. Trice, receiver of the San Antonio, Fredericksburg & Northern Railway Company, and the St. Louis, Brownsville & Mexico Railway Company, to recover damages to 259 head of cattle which were delivered to Frank Andrews, receiver at Armstrong, Tex., to be transported to Fredericksburg, Tex. It was alleged that after the shipment Was made the initial carrier had been released from the authority Of the receiver, and had aSSumed all the debts Of Such receiver. The receiver did not answer and under an agreement made by Counsel Was dismissed from the Suit. The cause was tried by jury resulting in a verdict and judgment in favor of appellees against the St. Louis, Brownsville & Mexico Railway Company for $859.66, against the San Antonio, Uvalde & Gulf Railway Company for $859.66, against the San Antonio & Aransas Pass Railway Company for $122.65, and in favor of the San Antonio, Fredericksburg & Northern Railway Company. Duval West, having been relieved from the receivership of the railway company for which he had formerly acted, Was dismissed from the suit, and judgment WaS rendered against A. R. Ponder, receiver of the San Antonio, Uvalde & Gulf Railway Company, and also against the company.

3. CARRIERS @:76–INJURY TO SHIPMENT -
PARTIES ENTITLED TO RECOVER.
Consignee and another who did not buy an
interest in the cattle until they reached their
destination would have no right to recover
against the carriers for cattle killed and injured
in transit; the owner not having sold them an
interest in the chose in action.

6: For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

[1, 2] The San Antonio, Uvalde & Gulf Railway Company was not a party to the suit, only its receiver being sued, but the Verdict Was against the company. The receiver being a party to the suit, and all the facts showing that he was in charge of the Company, and that he answered in the case, it might be presumed that it was the intention of the jury to find against the receiver; however, they did not SO find, but against the company alone. It may have been merely an irregularity, but it should have been corrected before the Verdict Was received. The judgment did not follow the verdict, but was rendered against both the receiver and the company which was not a party to the suit. The authorities cited by appellees do not apply to such a case as this, but were rendered in cases where the Verdicts abbreviated the names of railway companies, designating them by the initial letters of the names. We have Seen no Case Where a judgment was sustained that was based on a verdict against one not a party to a suit. The receiver was not named in the Verdict, and the railroad company was not named as a party in the pleadings. The general rule is that the corporation is not liable either in a civil suit or criminal proceeding for any acts of the receiver who has full possession of its property and entire charge of its affairs. Elliott, Railroads (2d Ed.) $ 581, and authorities in footnote. As said in Rail. way V. Dorough, 72 Tex. 108, 10 S. W. 711: “It is settled law that the receiver of a railroad company is the representative of the court, and not of the company, and that the company is not liable for his acts or those of his employés.”

[3] The evidence showed that the cattle when shipped belonged to J. C. Campbell, and were consigned to Otto CrenWelge, One of the plaintiffs. Crenwelge did not buy an interest in the cattle until they reached their destination, and after that Dave Reed bought an interest in the cattle. Campbell, Crenwelge, and Reed brought the suit, and there was a verdict in favor of all of them upon which a joint judgment was rendered. There is no testimony showing that Campbell sold an interest in the chose in action to his COplaintiffs. It is clear that neither Reed nor Crenwelge showed any right to recover damages for cattle killed and injured before they had any interest in them, and upon What theory they recovered is not disclosed by the record. If any one had the right to recover it was Campbell alone who owned the cattle when the damage occurred and who did not sell any interest in the damages to Crenwelge or Reed. It is true that Crenwelge in his testimony was in conflict with Campbell in that he claimed to have an interest in the cattle before they reached Fredericksburg. His testimony, however, showed that he did not have any interest in the cattle

CauSe all his claim to an interest Was ShOWn to rest on an agreement to buy the cattle if they were as represented by Campbell when they reached Fredericksburg. Reed bought from Crenwelge. [4,5] The written contract between Campbell and the initial carrier Was to transport the cattle from Armstrong to Oden and there deliver them to the San Antonio & Aransas PaSS Railway Company, and they were SO delivered. There was some evidence of rough handling, but no attempt was made to Separate the injuries received. On the line of the initial carrier from these inflicted on the other lines, and there was no basis Whatever for the verdict rendered against the initial or any connecting line. There was no allegation of a partnership existing betWeen the CarrierS. The evidence did not show that the original contract was ratified by the connecting carrier, because the original COntract Was made for the line Of the initial carrier alone. Receiving the goods for transportation was not a ratification of the initial carrier's contract, but was merely a compliance With the statute which requires the connecting carrier to receive and transport all freights and passengers delivered to it by any other line. Articles 6608–6612, Rev. Stats. As said in Railway v. Baird, 75 Tex. 265, 12 S1 W. 533: “In the face of such legislation the evidence should show something more than that a through shipment was made, which would require the freight to pass over several lines of railway to its destination, that a price was fixed for the entire transportation and collected by the last carrier, before it ought to be held that there was a joint contract for transportation that would render each carrier liable for failure * * on the part of other carriers in the connected lines.” To the same effect is Railway v. Dwyer, 75 Tex. 572, 12 S. W. 1001, 7 L. R. A. 478, 16 Am. St. Rep. 926. The initial carrier made a contract for itself alone and limited its liability to its own line, as it was authorized to do. McCarn v. Railway, 84 Tex. 352, 19 S. W. 547, 16 L. R. A. 39, 31 Am. St. Rep. 51; Railway v. Looney, 85 Tex. 165, 19 S. W. 1039, 16 L. R. A. 471, 34 Am. St. Rep. 787; Railway v. Short, 25 S. W. 142; Railway v. Wilbanks, 7 Tex. Civ. App. 495, 27 S. W. 305; Railway v. Gray, 45 Tex. Civ. App. 208, 99 S. W. 1126; Railway V. Groves, 48 Tex. Civ. App. 45, 106 S. W. 417. That each line was only liable for the damages that arose on its line was recognized, but the evidence totally failed to show the damages that occurred on each line, and there was no basis whatever for the apportionment made of the damages by the jury. The assignments attacking the charge are OVerruled. There was an agreement signed by the attorneys of plaintiffs and all the railway companies, to the effect that the receiver of the St. Louis, Brownsville & Mexico Railway railway company had taken control of its property and assumed the debts and liabilities of the receiver. That agreement not only appears in the transcript of the record, but is made a part of the judgment, and appears in the Statement of facts. Of course there is no possible basis for the contention found in the brief of the railway in question that the agreement was not signed by its Counsel. The Statement of facts gives the substance of the agreement, and states that it was made between counsel, and the Statement of facts, of Which it is a part, Was signed by counsel for the St. Louis, Brownsville & Mexico Railway Company. While it appears that the agreement was inserted in the Statement of facts after it was made up, there is nothing to indicate that it was inSerted after the Statement Was signed by the attorneys. If it was, however, the record clearly shows that the agreement was made by the attorney who represented the St. Louis, Brownsville & Mexico Railway Company in the trial court, and, in justice to that attorney, We deem it proper to State that he did not brief the case in this court, but it Was briefed by another attorney Who no doubt OVerlooked the agreement, copied into the transcript, and the recital in the judgment. The San Antonio & AranSaS PaSS RailWay Company did not appeal, and no complaint has been made as to the Verdict in favor of the San Antonio, Fredericksburg & Northern Railway Company, and as to those two companies the judgment Will be affirmed; but as to the St. Louis, BrOWnSVille & Mexico Railway Company and the San Antonio, Uvalde & Gulf RailWay Company, the judgment is reversed, and the cause remanded.

On Motion for Rehearing.

There are two judgments copied into the record; in the first judgment Was rendered against the San Antonio, UValde & Gulf Railway Company and the receiver. There was no verdict against the receiver. The Second judgment, Which is the Only One that should have been placed in the record, upon suggestion of appellees, Was corrected So as to Strike out the name of the railway company last named as well as the name of the San Antonio, Fredericksburg & Northern Railway Company and the words “for which they have their execution.” As corrected, the judgment Was against the St. Louis, Brownsville & Mexico Railway Company for the sum of $859.66, against A. R. Ponder, receiver, for $859.66, and against the San Antonio & Aransas Pass Railway Company for $122.65, and in favor of the receiver of the San Antonio, Fredericksburg & Northern Railway Company. It was Stated in Our Opinion that the judgment was against the San Antonio, UValde & Gulf RailWay Company, aS appears

from one of the judgments, but that was omitted in the second or corrected judgment and judgment rendered against Ponder, against whom no verdict was returned. This is an immaterial matter to correct, and does not affect the judgment of this court, except the reversal is as to Ponder, receiver, and not as to his railroad, which was not a party to the suit.

Our judgment will be corrected so as to affirm as to the San Antonio & Aransas PaSS Railway Company and the receiver of the San Antonio, Fredericksburg & Northern Railway Company, and so as to reverse as to the St. Louis, Brownsville & Mexico Railway Company and A. R. Ponder, receiver of the San Antonio, Uvalde & Gulf Railway Company. With the exceptions of making the corrections indicated, the motion for rehearing is Overruled.

c

LONG, Sheriff, et al. v. KNOTT et ux. - (No. 7975.)

(Court of Civil Appeals of Texas. Dallas. May 11, 1918. Rehearing Denied June 15, 1918.)

INJUNCTION S->111—RETURN OF WRIT—VENLE—STATUTE.

Rev. St. 1911, art. 4653, providing that writs of injunction granted to stay proceedings in a suit or execution on a judgment shall be returnable to and tried in the court where the suit is pending, or such judgment is rendered, is especially applicable when the injunction proceedings restrain the sale of specific property described in an order of sale, the effect of which is to suspend the process and questions the validity of the process; but where the property of one who is not a party to the judgment has been levied upon, he may claim that his rights shall be tried in the court of his domicile, nor is the statute and the rule applicable to injunctions seeking to restrain the sale of a homestead on the ground of exemption, and in such case the court of the county where the party seeking injunctive relief resides has jurisdiction to try the issue of homestead and to proceed in judgment.

Appeal from District Court, Hill County; Horton B. Porter, Judge.

Suit by J. D. Knott and wife against Fred Long, Sheriff, of Hill County, Tex., and the Monnig Dry Goods Company, to enjoin the Sale of land. Motion to dissolve injunction overruled, judgment for plaintiffs granting a perpetual injunction, and defendants appeal. Affirmed.

Chas. T. Murphy, of Ft. Worth, for appellants. R. M. Vaughan and J. D. Abney, both of Hillsboro, for appellees.

TALBOT, J. This suit was brought by the appellees, J. D. Knott and his wife, Carrie Içnott, against the appellants, Fred Long, sheriff of Hill county, Tex., and Monnig Dry Goods Company, a private corporation, with its principal office and place of business in Ft. Worth, Tarrant county, Tex., to enjoin the sale of 10 acres of land, which is described by metes and bounds, situated in Said Hill county. The petition alleges and the evidence warrants the following conclusions of fact: Prior to the 20th day of October, 1914, and continuously up to the trial of this cause, the land involved constituted a part of appellees' homestead. On the date Stated appellee J. D. Knott was indebted to C. W. Thompson, a resident of Hill county, Tex., in the sum of $711.36, and the said Thompson being unwilling to carry said indebtedness longer, without some kind of security, induced the appellees to execute and deliver to his Wife, Mr.S. S. A. Thompson, the following instrument: “Abbott, Texas, 10–20–14. “Due S. A. Thompson, or bearer, the sum of ($711.36) seven hundred eleven and 36/100 dollars for value received at 8% interest from date, said amount to be paid on or before Oct. 20th, 1915, and upon payment of said amount of money, the said S. A. Thompson is to deed back a certain ten-acre tract of land to J. D. Knott and wife, Carrie Knott, and this paper to be null and void, otherwise to remain in full force and effect. . D. Knott. - “Carrie Knott.” To secure the indebtedness evidenced by the above instrument appellees Were induced to and did agree with C. W. Thompson that they would give him a lien on 10 acres of land constituting a part of their homestead, and in pursuance of such agreement they executed and delivered to him an absolute deed in form conveying to him the Said land, but with the distinct understanding that, although said deed was absolute in form, it was not to convey absolute title to Mr.S. S. A. Thompson, but merely to create a lien upon said land to secure the payment of the instrument above set out. Notwithstanding said deed was executed only as a mortgage on the tract of land therein described, C. W. Thompson, joined by his wife, S. A. Thompson, on the 30th day of April, 1916, without the knowledge or consent of appellees, executed and delivered a deed of trust to L. W. Peck, as trustee, conveying to him as Such trustee the land described in the instrument which appellees had given the said Mrs. S. A. Thompson to secure Edward T. Murphy in the payment of a note for $530.81, dated April 30, 1916, payable October 1, 1916. This deed, of trust was recorded in Hill county, Tex. Before the execution of this deed of trust C. W. Thompson had become indebted to the appellant herein, Monnig Dry Goods Company, in the sum of $530.81. This debt against C. W. Thompson was by the Monnig Dry GOOdS COmpany placed in the hands of said Murphy, who was a practicing attorney, for collection Or adjustment, and said Murphy, representing Said company and acting for and in its behalf, procured the execution of Said note of $530.81, and said deed of trust, and the only consideration for their execution was the settlement of said preexisting indebtedness in favor of the Mon

G->For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

the acts of Edward T. Murphy were for the use and benefit of Said dry goods company, and were in fact the acts of Said company. The method pursued in the transaction was as follows: Murphy arranged with C. W. Thompson to deliver to him his (Murphy's) check for $530.81, payable to Monnig Dry Goods Company, and in consideration of said check Thompson executed his note for said sum of $530.81, payable to Murphy or order, and to Secure the payment of said note exeCuted the deed Of trust mentioned to L. W. Peck as trustee. The check for $530.81 was sent by Thompson to Monnig Dry Goods Company, and the note and deed of trust were delivered by him to Murphy. Soon after this Murphy indorsed without recourse and delivered said note to Monnig Dry Goods Company in consideration of the cancellation and Surrender to him of said check of $530.81, Whereupon the pre-existing indebtedness in favor of Said company against Thompson Was canceled and the said note of $530.81 execu-, ted to Murphy was received and accepted in lieu thereof. Before the deed of trust was executed to L. W. Peck as trustee, C. W. Thompson informed Edward T. Murphy that the deed from Knott and Wife to Mrs. S. A. Thompson for the 10 acres of land described in Said deed of trust Was executed Only as a mortgage or deed of trust to Secure Thompson in the payment of an indebtedness amounting to $711.36, and that Thompson did not have any other title to Said land, and that On the payment of said indebtedness Said property was to be released or reconveyed to appellees Knott and wife. The Monnig Dry Goods Company did not pay to Edward T. Murphy anything of Value for his indorsement and delivery to it of the note executed by Thompson. The Monnig Dry Goods Company sued C. W. Thompson, as the only defendant, on said note of $530.81 and the deed of trust given to secure the same in the district court of Tarrant county, and on the 2d day of February, 1917, judgment was rendered in said cause in favor of said company as plaintiff and against the said Thompson for the amount than due thereon, which was $454.88, with interest and costs of suit, together with a foreclosure of the deed of trust On the 10 acreS Of land therein deScribed and in controversy in this suit. On the 9th day of March, 1917, an order of sale was issued on said judgment directed to the sheriff or any constable of Hill county, Tex., commanding a levy upon and Sale of Said land, and to apply the proceeds arising from Such sale to the payment and satisfaction of said judgment, interest, and costs. This order of sale Was received by the appellant Fred Long, Sheriff of Hill county, On the 12th day of March, 1917, and levied by him on said date upon the land in controversy. Neither of the appellees in the present suit were parties to the said suit of Monnig Dry Goods Company

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