ditional 10 per cent. on the amount due for expenses of collection. Ten per cent. of the amount due at institution of the suit was $171.90, instead of $230. This discrepancy is of such a nature as to be, we think, immaterial, and does not constitute such a variance as to invalidate the attachment. The petition and affidavit both describing the indebtedness correctly and stating the aggregate amount due, the mere statement that the 10 per cent. amounted to more than it really did, which was readily ascertainable by a simple calculation, is not sufficient to vitiate the attachment.

The only remaining assignment of error is: "The court erred in refusing to foreclose the attachment lien on the property attached, because the levy of the attachment created a lien in favor of plaintiff; and the fact that the East Line Lumber Company was insolvent would not prevent the levy from giving preference." The judgment recites that "the East Line Lumber Company was a private corporation, and was insolvent," at the time the writ of attachment was levied. There is no statement of facts or findings of the court contained in the record. We are therefore warranted in concluding that when the writ of attachment was levied defendant in error had ceased to be a "going concern." The question here at issue has never been directly decided by the supreme court of this state. The weight of American authority outside of this state we think is that a creditor of an insolvent corporation can obtain a preference lien upon its property by the levy of a writ of attachment. This view, it seems, is held by the court of civil appeals of the Third supreme judicial district at Austin. See Harragan v. Quay (Tex. Civ. App.) 27 S. W. 897. We are unable, however, to reconcile this holding with the doctrine enunciated by our supreme court in the case of Lyons-Thomas Hardware Co. v. Perry Stove Manuf'g Co., 86 Tex. 143, 24 S. W. 16. In that case it is held that neither the stockholders nor directors of an insolvent private corporation can make a preferential deed of trust for the benefit of certain creditors to the exclusion of others. The reason given for this holding is, in effect, that when a private corporation becomes insolvent,-that is, when it "has ceased to do business, or has taken, or is in the act of taking, a step which will practically incapacitate it for conducting the corporate enterprise with reasonable prospect of success, or its embarrassments are such that early suspension and failure must ensue,"the property of the corporation becomes a trust fund, and such a condition confers upon "any unsecured creditor of the corporation a right to a ratable share of the proceeds of all the assets of the corporation not subject to priorities lawfully existing when the condition arose." In the same case the court says: "The assets of an insolvent corporation, which has ceased to carry on business, and does not intend to resume, is a fund from

which all creditors not secured by valid liens existing before the condition was fixed have the right to be paid on terms of perfect equality." If this be the true doctrine, then it follows that the levy of a writ of attachment upon the property of an "insolvent" corporation does not create a prior lien to the claims of unsecured creditors of such corporation, because when such condition arose each creditor's claim stood, in relation to the property, "upon terms of perfect equality," and their right to a "ratable share" of the same would not be affected by such a levy. No priority can be gained by such a proceeding, as the creditors "have the right to have the specific property owned by the corporation subjected to the payment of the sums due them"; and this is inconsistent with the idea that under such circumstances a levy of an attachment will give priority.

The appellant insists that under the statute he has a lien upon the property by virtue of the writ of attachment levy, and entitled to a foreclosure of same. This contention would be correct if the property of the corporation remained subject to the control and management of its officers in the same manner as before "insolvency," but such is not the case. When the corporation became insolvent, the functions of its officers changed. and they then became trustees of the property, and were bound to manage and control it for the benefit of creditors and stockholders. If the officers, after such condition arose, attempted to divert the fund from its legitimate purpose, a creditor would have the right to prevent such improper use by calling in the aid of the courts; but in such a proceeding all the creditors would be interested, and such proceeding would not give the moving creditor a preference lien upon the property. If lawful liens exist when the corporation becomes insolvent in the manner indicated, of course such would have priority. After such a condition arises, no preference lien can be created, but all unsecured creditors "have the right to be paid upon terms of perfect equality"; and this condition of affairs cannot be changed by the act of a creditor in suing out and having a writ of attachment levied upon the property. The levy of the writ of attachment gave appellant no prior lien on the property of the corporation, and therefore the judgment of the court below is affirmed.

On Rehearing.

(Nov. 18, 1895.)

RAINEY, J. The disposition of the case heretofore made by us is adhered to. In the original opinion rendered we used language holding a private corporation to be insolvent, and the property trust funds in the hands of its directors for the benefit of creditors, when it "has ceased to do business, or has taken, or is in the act of taking, a step which will practically incapacitate it for conducting the corporate enterprise with reasonable prospect of success, or its embarrassments are such

that early suspension and failure must ensue." The language here quoted is from an Alabama case, where an officer of the insolvent corporation was a creditor thereof and seeking to recover his debt by attachment proceedings, and from which case Judge Stayton quotes said language with approval in the case of Lyons-Thomas Hardware Co. v. Perry Stove Manuf'g Co., 86 Tex. 143, 24 S. W. 16. This test is applicable when a creditor who is an officer of the insolvent corporation is seeking to collect his debt, but it may be too broad in its scope when applied to creditors generally. As to this, however, it is unnecessary for us to express an opinion, as the East Line Lumber Company had ceased to do business when its property was seized by the writ of attachment. It is only necessary for us to hold that when a private corporation ceases to do business its property is held by its directors as trust funds for the benefit of its creditors, and the same is not subject to the levy of a writ of attachment. This, in our opinion, is in strict accord with the doctrine enunciated in the case of Lyons-Thomas Hardware Co. v. Perry Stove Manuf'g Co., supra. The motion for rehearing is overruled.

GODDARD v. PEEPLES.

(Court of Civil Appeals of Texas. Nov. 2, 1895.)

VENDORS' LIENS-PRIORITY.

Plaintiff, who held two notes secured by vendor's lien on land, sent the one first due to W. for collection, and W. sent it by express to a certain town with instructions to the express company to deliver it on payment to a certain person who was an indorser. Such indorser procured the company to transfer it to B., who paid the amount due, which was sent to plaintiff through W. Neither plaintiff nor W. knew that B. took up the note. Held, that B.'s vendor's lien was postponed to plaintiff's lien securing the second note due.

Appeal from district court, Raines county; E. W. Terhune, Judge.

Action by W. D. Peeples against J. C. Rhodes and N. L. Cole on a note and to foreclose a vendor's lien. J. H. Goddard was made a defendant, on the allegation that he held a note secured by co-ordinate lien on the same land. From a judgment declaring plain

tiff's and Goddard's liens co-ordinate, defendant Goddard appeals. Modified.

Bomar & Bomar, for appellant.

FINLEY, J. This suit was instituted by W. D. Peeples upon a note for $100, executed by J. C. Rhodes to N. L. Cole, as part consideration for a tract of land. The suit was against Rhodes, and N. L. Cole as indorser, and sought a foreclosure of the vendor's lien upon the tract of land in part payment of which it was given. J. H. Goddard was made a party defendant in the suit, upon the allegation that he also held a note executed

The

by Rhodes as part consideration for the land, and that the same was a co-ordinate lien with that asserted by the plaintiff. cause was tried below upon an agreed statement of facts, as follows: "That November 25, 1889, N. L. Cole and wife, M. Cole, made, executed, and delivered to J. C. Rhodes a deed conveying the land described in plaintiff's petition. That part of the consideration of said deed was cash, and part three promissory notes in writing, to wit, all dated November 25, 1889. The first was for $100, payable November 1, 1890, which note has been paid off and discharged; the second note was for $100, due November 1, 1891; the third was for $160, due November 1, 1892. All of said notes draw 12 per cent. interest from date; interest payable annually on November 1st of each year; and each of said notes provided for 10 per cent. attorney's fees in case of legal proceedings. That the above-mentioned deed retains the vendor's lien to secure the payment of said notes. That the second and third of said notes have been placed in the hands of an attorney, and suit brought thereon. That N. L. Cole duly transferred said second and third notes to O. S. Bowman by a written transfer on the back thereof. That O. S. Bowman duly indorsed said two last-mentioned notes to J. H. Goddard by writing his name across the back thereof. That about twenty days after the maturity of the second note, being for $100, due November 1, 1891, J. H. Goddard sent J. F. Willington of Fort Worth, Texas, the said $100 note for collection. That said J. F. Willington sent said note to Emory, Texas, by Pacific Express, to N. L. Cole, with instructions to deliver said note to N. L. Cole on payment of same. That the agent of the Pacific Express Company, at the request of N. L. Cole, transferred said note to J. W. Ballew, and J. W. Ballew paid said agent of the Pacific Express Company said money, which was sent to J. F. Willington, who sent same to J. H. Goddard, and neither J. F. Willington nor J. H. Goddard knew that J. W. Ballew took up said note. J. W. Ballew, for a valuable consideration, transferred said note to W. D. Peeples, who now holds same; and that J. H. Goddard now holds the third of said notes, being for $160, and interest and judgment for Peeples foreclosing his lien upattorney's fees." The court below rendered

on the land, and also foreclosing the lien in behalf of Goddard, treating them as co-ordinate liens, and entitled to pro rata payment from the proceeds of the sale of the land. From this judgment Goddard has appealed.

The main controversy is upon the point as to whether the liens are co-ordinate, or whether Goddard's lien is entitled to priority in payment. It appears that the express agent had no authority to transfer the note to Ballew. His authority was limited to a delivery of the note to N. L. Cole upon payment of the amount called for by its terms. The owner of the note, Goddard, did not consent that

the note should pass out of his hands into the hands of a purchaser who would hold and assert it as a lien upon the land co-ordinate with the lien existing in favor of the other $160 note, held by Goddard. As against the maker of the note, Rhodes, and indorser, Cole, who procured Ballew to take up the note, it remained as a subsisting unpaid demand, with a vendor's lien upon the land to secure its payment; but as against the owner of the note, who did not know of the transfer, and who thought that he had received payment upon the note, extinguishing it, it has no such force. Goddard, in all probability, would not have consented to the transfer of the note to another person to be held as a claim upon the land, as it diminished, to that extent, the value of the security for the other $160 note held by him, and which fell due after this $100 note originally sued upon. We think the principle here asserted is laid down in Cason v. Connor, 83 Tex. 26,. 18 S. W. 668; Brick v. Bual, 73 Tex. 511, 11 S. W. 1044; Union Trust Co. v. Monticello & P. J. Ry. Co., 63 N. Y. 311. The court should have given judgment in favor of plaintiff upon his note, foreclosing his lien upon the land; but this lien should have been postponed to the payment of the $160 note held by Goddard. Judgment also should have been rendered in favor of Goddard for the amount of his note, interest, and attorney's fees, and a foreclosure of the vendor's lien upon the land having priority of payment over the lien in favor of Peeples.

It is also complained that the amount of the judgment rendered in favor of Goddard in the court below was less than the amount he was entitled to recover upon the note. The amount of the judgment rendered in favor of Goddard was $224.67. By calculation we By calculation we find that the interest on the principal sum, $160, from the date of the note to the date of the judgment, being 4 years, 2 months, and 27 days, at the specified rate of 12 per cent., would amount to $81.44. The note provided for 10 per cent. attorney's fees. It does not appear from the agreed statement of facts upon which the case was tried whether attorney's fees were to be allowed upon the principal and interest or only upon the principal, and under this state of fact we would only be authorized to compute attorney's fees upon the principal. This would amount to $16. By adding the interest, $81.44, attorney's fees, $16, and principal, $160, together, we find the aggregate sum to be $257.44. The judgment should have been rendered for this sum. The judgment of the court below will be reversed wherein it treats the lien as being of equal dignity and co-ordinate, and is here rendered giving priority to the lien in favor of appellant, Goddard. The judgment is also reformed so as to award judgment for $257.44 in favor of Goddard, with interest thereon from the date of the judgment of the court below. Reformed and rendered.

KILDOW v. IRICK.

(Court of Civil Appeals of Texas. Dec. 7, 1895.)

ACTION FOR COMMISSIONS-TRIAL-INSTRUCTIONS. 1. Where, in an action for commissions due under contract, the evidence shows a different contract from that alleged, an instruction allowing recovery on that alleged is erroneous.

2. An instruction from which the jury might infer that the court was of the opinion that a fact not shown by the evidence was in fact shown is erroneous.

Appeal from Cooke county court; J. E. Hayworth, Judge.

Action by James Irick against Josiah Kildow, as surviving partner of Kildow & Faller, for salary due under contract of employment. From a judgment for plaintiff, defendant appeals. Reversed.

S. B. Garrett, for appellant. Culp, for appellee.

Reasons for Reversal.

Green &

TARLTON, C. J. The appellee brought this suit to recover from the appellant, as the surviving partner of Kildow & Faller, the sum of $377.65. The indebtedness claimed was under a contract by the terms of which, as alleged, the firm of Kildow & Faller employed the plaintiff to take orders for them for tombstones and monuments, for which he was to receive a commission of 20 per cent. on sales and 5 per cent. additional when the plaintiff put up the work. The contract proved was not so broad as that alleged in the petition. The evidence showed that the plaintiff was not entitled to commissions on sales until the work was put up and paid for by the purchaser; nor in cases where orders were countermanded by the purchaser; nor where the plaintiff had failed to get from the purchaser the name of the deceased, with the dates of birth and death. Excluding from the commissions claimed the items coming within the exceptions stated, and taking into consideration the admitted credits and off sets pleaded by the defendant, it is quite clear from the record, as we read it, that the plaintiff was not entitled to a recovery of $128 awarded by the verdict of the jury. So standing the pleadings and the evidence, the court instructed the jury as follows: "You are further instructed that if you believe from the evidence that there was a contract entered into between plaintiff and defendants as shown in plaintiff's petition, and that plaintiff in good faith performed his part of the contract, and if you further find that the rights of third parties had accrued under said contract, and that the defendants refused to make any effort on their part of the contract, you will then find for the plaintiff whatever sum you find he is entitled to on account of the failure of the said defendants to comply with their part of said contract." We sustain the appellant's assignment complaining of this charge. It is objectionable, because the testimony of the plaintiff himself shows

the contract was not in fact as set out in the petition, and hence the instruction was not justified by the evidence; because it is not perceived how the rights of third parties could have affected the rights and duties of the plaintiff and defendant under the contract of employment; and because the jury might have understood from the charge that the court was of opinion that there was evidence to the effect that the defendant's firm refused to make any effort on their part of the contract,—a conclusion unjustified by the record, and improper in the court. The judgment is accordingly reversed, and the cause is remanded.

CALDWELL v. LAMKIN et al. (Court of Civil Appeals of Texas. Dec. 18, 1895.)

ATTACHMENT-PLEA IN ABATEMENT-AMENDMENT -DEFECTIVE BOND-NONRESIDENT SURETIES.

1. As a defective plea in abatement may be cured by amendment, it was not error to permit defendant to file a second amended plea after he had answered, not waiving the plea in abatement.

2. Plaintiff has no right to substitute a new attachment bond, where the original was abated for the insufficiency of the sureties.

3. A plea in abatement lies to show the insufficiency of an attachment bond, when it appears to be prima facie good.

4. Where plaintiff admitted that the sureties on the attachment bond were nonresidents, and it appeared by the clerk's affidavit, attached to the plea in abatement, that the bond was approved on the ground that the sureties were solvent, as shown by a certificate to that effect from the clerk of a court in another state, and on the faith of the representations of plaintiff's attorneys, there was sufficient evidence to abate the bond for the nonresidence of the

sureties.

5. An attachment bond with nonresidents as sureties was properly quashed on a plea in abatement.

R. Johnston and F. Flournoy parties defendant, upon the alleged ground that they claimed to own the land levied on. Prayer for judgment for debt and foreclosure of attachment lien as against all the defendants. September 25, 1894, Lamkin filed an amended. plea in abatement, and asked the quashal of the writ of attachment upon the ground that the sureties on the bond for attachment, to wit, A. B. Lamb and W. T. Wrather, were nonresidents of the state of Texas, and were resident citizens of the state of Tennessee, and had no property in this state, wherefore the bond furnishes no security to defendant, and is not the bond required by law. But on October 19, 1894, defendant Lamkin, by leave of the court, amended this plea, setting up the same facts, and further showing how the clerk of the state court came to approve the bond. This plea was sworn to. On the same day that the first amended plea in abatement was filed, defendant Lamkin filed a general denial, expressly premising that it was done, not waiving his plea in abatement. Defendants Johnston and Flournoy answered, each claiming one of the tracts of land levied on, and resisting the foreclosure of the attachment lien upon the grounds that they had valid debts against defendant Lamkin, which had been respectively secured by mortgages on the land, and deeds from Lamkin to their respective surveys of land, in satisfaction of their debts and mortgages. It is unnecessary, as we think, to further state the particulars of their pleas, as, according to our views of the case, plaintiff was not entitled to a foreclosure of the attachment, because the attachment itself was properly quashed. On September 28, 1894, plaintiff filed a motion to substitute the attachment bond, tendering the bond, with good sureties. resident in the state of Texas. September 29, 1894, plaintiff filed a reply to

Action on a note, aided by attachment, by S. H. Caldwell against L. A. L. Lamkin and others. From the judgment rendered, plaintiff appeals. Affirmed.

This suit was brought August 9, 1894, by the appellant, S. H. Caldwell, against appellee L. A. L. Lamkin, for $3,787.30, due by note of date April 14, 1891, executed by appellee Lamkin to Y. Q. Caldwell and S. A. Miller, as administrators of the estate of R. D. Caldwell, deceased, which note was by the administrators of the estate, for value, transferred, without recourse, to appellant, S. H. Caldwell, who sued as owner and holder. On the same day attachment was issued against Lamkin to Caldwell county, Tex., and was on the same day levied on two tracts of lands, as the property of Lamkin; and a certified copy of the attachment and return of levy was on August 9, 1894, deposited with the county clerk of Caldwell county for record, the land levied on being situated in Caldwell county. September 4, 1894, in vacation, the plaintiff amended his petition, making W.

we deem it unnecessary to notice in detail. On the same day that defendant Lamkin filed his amended plea in abatement,-October 19, 1894,-plaintiff filed a motion to strike it out upon the ground that it was filed after a plea to the merits; that there was no law requiring sureties on attachment bonds to be residents of the state; that the bond first filed was sufficient, being in form, and approved by the clerk of the court, constituting a full compliance with the statute. On October 19, 1894, the case was tried by the court without a jury, when the court overruled plaintiff's motion to substitute the attachment bond, and the motion to strike out defendant Lamkin's amended plea in abatement, sustained the plea, abated the bond, quashed the attachment, and rendered judgment for the plaintiff for the amount of his debt against Lamkin, for $3,787.30, and 6 per cent. interest per annum from April 18, 1891, and against the plaintiff and in favor of defendants Johnston and Flournoy, the plaintiff taking nothing against them, and that they recover their costs of plaintiff. Plaintiff has appealed.

S. H. Caldwell, in pro. per. McNeal, Harwood & Walsh and L. J. & A. B. Storey, for appellees.

COLLARD, J. (after stating the facts). The first error assigned is "that the court erred in allowing defendant Lamkin to amend his plea in abatement, and file a second amended plea, after motion to strike out his first amended plea had been sustained by the court, and after he had answered to the merits, because the amendment was not authorized by law, and came too late after answer to the merits, and because, having amended the plea once, and going to trial thereon, and it having been stricken out on motion of the plaintiff, no further plea on that subject could have been legally made." The original and first amended pleas in abatement are not in the record. It seems, however, that the original plea was filed before Lamkin's original answer, as the answer commences: "Come defendant Lamkin, and, not waiving his plea in abatement, denies," etc. The order acting on the motion of plaintiff to strike out the second amended plea is in the first part of the final judgment, as follows: "On this October 19, 1894, this cause being regularly called for trial, the parties plaintiff and defendant announced ready for trial on the law in the preliminary questions. The defendant L. A. L. Lamkin having, by leave of the court, filed his second amended plea in abatement, to abate the attachment bond in this cause, for reasons set out in said plea, the plaintiff moved the court to strike out said plea, for reasons stated in said motion, which motion was by the court heard and overruled, to which action of the court plaintiff at the time, in open court, excepted. The plaintiff then, in open court, tendered a new attachment bond, signed by plaintiff, and James G. Burleson, A. R. Chew, and Eugene Clark, as sureties, by motion, asked leave of the court to substitute said new bond for and in lieu of the first and original attachment bond filed in this court, for the reasons set out in said motion to substitute, which said motion was by the court overruled, to which action of the court the plaintiff at the time, in open court, excepted. Then came L. A. L. Lamkin, and presented his second amended plea in abatement, asking the court to abate the attachment bond filed in this cause, and quash plaintiff's writ of attachment, and the affidavit of B. T. Palmer, therewith filed, for reasons set out in said plea, which plea was by the court sustained, said bond abated, and the plaintiff's attachment quashed, to which actions and rulings of the court the plaintiff at the time, in open court, excepted: (1) Because said bond being sufficient in amount, and conditioned as required by law, and signed by a sufficient number of sureties, and approved by the proper officer, said bond was a full and complete compliance with the attachment laws of this state; and there was no statutory au

thority for going behind and questioning the validity of an attachment bond, when said bond was prima facie good on its face. (2) Because, said bond being prima facie good, evidence was necessary to overcome its validity, and no evidence was offered by defendant in support of said plea in abatement, whereupon both parties, plaintiff and defendant, announced ready for trial on the merits of the case, a jury being waived," etc. The motion to strike out the second amended plea in abatement, among other reasons for the ruling asked, set up that it was filed after answer to the merits, and after issue joined. It does not appear, as stated in the assignment of error, that the second amended plea was filed after his first amendment had been stricken out on motion of plaintiff. It does not appear but that it was filed by leave of the court. The preceding pleas upon the same subject are not before us, and it does not appear that they were not amendable. The original evidently preceded the answer to the merits, as the answer referred to in it was not waived. Howeth v. Clark, 4 Willson, Civ. Cas. Ct. App. § 314. A defect in a plea in abatement may be cured by amendment, upon leave of the court, as any other defective plea. It may be done in the county court on appeal. If plaintiff is correct that the first amended plea was stricken out on his motion, it was not error to allow defendant to amend the plea, the rule being that when demurrer is sustained to a plea in abatement the defendant may plead over. Ritter v. Hamilton, 4 Tex. 326; McDonald v. Tinnon, 20 Tex. 245; Lodge v. Leverton, 42 Tex. 18; Rev. St. art. 1192. The amended pleading objected to was duly sworn to. There was no error in refusing to strike it out.

2. It is next insisted by plaintiff that the court erred in refusing to allow him to substitute the new bond in attachment for the original, because the first bond was valid in form and substance, sufficient in amount, conditioned as required by law, and approved by the clerk of the court, and was a full compliance with the statute of attachments, and on the objection by defendant, by his plea in abatement, that the sureties were nonresidents of the state, it was the proper practice to allow the filing of a new bond curing and meeting the objection; and this even if the first bond was not in fact good, and especially when the defect in the bond did not appear on the face of the bond questioned. The bond objected to was in form, for the proper amount, had two sureties, and was approved by the clerk of the court. absence of statutory authority, the old bond could not be substituted by a new one, especially as the defect in the original bond existed at the time the attachment was issued. 1 Am. & Eng. Enc. Law, 905-908; Drake, Attachm. 146; Wap. Attachm. 124, 125, 127; Whitley v. Jackson, 1 White & W. Civ. Cas. Ct. App. § 575; Winn v. Sloan, Id.