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ditional 10 per cent. on the amount due for which all creditors not secured by valid liens expenses of collection. Ten per cent. of the existing before the condition was fixed have amount due at institution of the suit was the right to be paid on terms of perfect equali$171.90, instead of $230. This discrepancy is ty.” If this be the true doctrine, then it folof such a nature as to be, we think, immate- lows that the levy of a writ of attachment rial, and does not constitute such a variance upon the property of an "insolvent" corporaas to invalidate the attachment. The petition tion does not create a prior lien to the claims and affidavit both describing the indebtedness of unsecured creditors of such corporation, becorrectly and stating the aggregate amount cause when such condition arose each creddue, the mere statement that the 10 per cent. itor's claim stood, in relation to the property, amounted to more than it really did, which "upon terms of perfect equality," and their was readily ascertainable by a simple calcu- right to a “ratable share” of the same would lation, is not sufficient to vitiate the attach- not be affected by such a levy. No priority ment.
can be gained by such a proceeding, as the The only remaining assignment of error
creditor's "have the right to have the specific is: “The court erred in refusing to foreclose property owned by the corporation subjected the attachment lien on the property attach- to the payment of the sums due them"; and ed, because the levy of the attachment creat- this is inconsistent with the idea that under ed a lien in favor of plaintiff; and the fact such circumstances a levy of an attachment that the East Line Lumber Company was in
will give priority. solvent would not prevent the levy from giv- The appellant insists that under the statute ing preference.” The judgment recites that he has a lien upon the property by virtue of “the East Line Lumber Company was a pri- the writ of attachment levy, and entitled vate corporation, and was insolvent," at the
to a foreclosure of same. This contention time the writ of attachment was levied. would be correct if the property of the corThere is no statement of facts or findings poration remained subject to the control and of the court contained in the record. We are
management of its officers in the same mantherefore warranted in concluding that when ner as before "insolvency," but such is not the writ of attachment was levied defendant the case. When the corporation became inin error bad ceased to be a "going concern." solvent, the functions of its officers changed. The question here at issue has never been
and they then became trustees of the properdirectly decided by the supreme court of this ty, and were bound to manage and control it state. The weight of American authority out- for the benefit of creditors and stockholders. side of this state we think is that a creditor If the officers, after such condition arose, atof an insolvent corporation can obtain a pref- tempted to divert the fund from its legitimate erence lien upon its property by the levy of purpose, a creditor would have the right to a writ of attachment. This view, it seems, prevent such improper use by calling in the is held by the court of civil appeals of the
aid of the courts; but in such a proceeding Third supreme judicial district at Austin. all the creditors would be interested, and such See Harragan v. Quay (Tex. Civ. App.) 27 S. proceeding would not give the moving credW. 897. We are unable, however, to reconcile ,
itor a preference lien upon the property. If this holding with the doctrine enunciated by
by lawful liens exist when the corporation beour supreme court in the case of Lyons-Thom- comes insolvent in the manner indicated, of as Hardware Co. v. Perry Stove Manuf'g Co., course such would have priority. After such 96 Tex. 143, 24 S. W. 16. In that case it is a condition arises, no preference lien can be held that neither the stockholders nor direct- created, but all unsecured creditors "have the ors of an insolvent private corporation can right to be paid upon terms of perfect equalimake a preferential deed of trust for the ty”; and this condition of affairs cannot be benefit of certain creditors to the exclusion of changed by the act of a creditor in suing out others. The reason given for this holding is, and having a writ of attachment levied upon in effect, that when a private corporation be- the property. The levy of the writ of attachcomes insolvent,-that is, when it "has ceas- ment gave appellant no prior lien on the proped to do business, or has taken, or is in the erty of the corporation, and therefore the act of taking, a step which will practically judgment of the court below is affirmed. incapacitate it for conducting the corporate enterprise with reasonable prospect of suc
On Rehearing. cess, or its embarrassments are such that
(Nov. 18, 1895.) early suspension and failure must ensue,"- RAINEY, J. The disposition of the case the property of the corporation becomes a heretofore made by us is adhered to. In the trust fund, and such a condition confers upon original opinion rendered we used language "any unsecured creditor of the corporation a holding a private corporation to be insolvent, right to a ratable share of the proceeds of all and the property trust funds in the hands of the assets of the corporation not subject to its directors for the benefit of creditors, when priorities lawfully existing when the condi- it "has ceased to do business, or has taken, tion arose." In the same case the court or is in the act of taking, a step which will says: “The assets of an insolvent corpora- practically incapacitate it for conducting the tion, which has ceased to carry on business, corporate enterprise with reasonable prospect and does not intend to resume, is a fund from of success, or its embarrassments are such
that early suspension and failure must en- by Rhodes as part consideration for the land, sue.” The language here quoted is from an and that the same was a co-ordinate lien Alabama case, where an officer of the in- with that asserted by the
asserted by the plaintiff. The solvent corporation was a creditor thereof cause was tried below upon an agreed stateand seeking to recover his debt by attachment ment of facts, as follows: "That November proceedings, and from which case Judge Stay. | 25, 1889, N. L. Cole and wife, M. Cole, made, ton quotes said language with approval in the executed, and delivered to J. C. Rhodes a case of Lyons-Thomas Hardware Co. v. Per- deed conveying the land described in plainry Stove Manuf'g Co., 86 Tex. 143, 24 S. W. tiff's petition. That part of the considera16. This test is applicable when a creditor tion of said deed was cash, and part three who is an officer of the insolvent corporation promissory notes in writing, to wit, all dated is seeking to collect his debt, but it may be November 25, 1889. The first was for $100, too broad in its scope when applied to cred- payable November 1, 1890, which note has itors generally. As to this, however, it is un- been paid off and discharged; the second note necessary for us to express an opinion, as the was for $100, due November 1, 1891; the East Line Lumber Company had ceased to third was for $160, due November 1, 1892 do business when its property was seized by All of said notes draw 12 per cent. interest the writ of attachment. It is only necessary .
from date; interest payable annually on Nofor us to hold that when a private corporation vember 1st of each year; and each of said ceases to do business its property is held by notes provided for 10 per cent. attorney's its directors as trust funds for the benefit of fees in case of legal proceedings. That the its creditors, and the same is not subject to above-mentioned deed retains the vendor's the levy of a writ of attachment. This, in our lien to secure the payment of said notes. opinion, is in strict accord with the doctrine That the second and third of said notes have enunciated in the case of Lyons-Thomas been placed in the hands of an attorney, and Hardware Co. v. Perry Stove Manuf'g Co., suit brought thereon. That N. L. Cole duly supra.
The motion for rehearing is over- transferred said second and third notes to 0. ruled.
S. Bowman by a written transfer on the back thereof. That 0. S. Bowman duly indorsed said two last-mentioned notes to J. H. God
dard by writing his name across the back GODDARD v. PEEPLES.
thereof. That about twenty days after the (Court of Civil Appeals of Texas. Nov. 2,
maturity of the second note, being for $100, 1895.)
due November 1, 1891, J. H. Goddard sent VENDORS' LIENS-PRIORITY.
J. F. Willington of Fort Worth, Texas, the
said $100 note for collection. That said J. F. Plaintiff, who held two notes secured by vendor's lien on land, sent the one first due to
Willington sent said note to Emory, Texas, W. for collection, and W. sent it by express to by Pacific Express, to N. L. Cole, with ina certain town with instructions to the express structions to deliver said note to N. L. Cole company to deliver it on payment to a certain person who was an ir lorser. Such indorser
on payment of same. That the agent of the procured the company to transfer it to B., who Pacific Express Company, at the request of paid the amount due, which was sent to plain- N. L. Cole, transferred said note to J. W. Baltiff through W. Neither plaintiff nor W. knew
lew, and J. W. Ballew paid said agent of the that B. took up the note. Held, that B.'s vendor's lien was postponed to plaintiff's lien se
Pacific Express Company said money, which curing the second note due.
was sent to J. F. Willington, who sent same Appeal from district court, Raines county;
to J. H. Goddard, and neither J. F. Willing
ton nor J. H. Goddard knew that J. W. BalE. W. Terhune, Judge. Action by W. D. Peeples against J. C.
lew took up said note. J. W. Ballew, for a
valuable consideration, transferred said note Rhodes and N. L. Cole on a note and to foreclose a vendor's lien. J. H. Goddard was
to W. D. Peeples, who now holds same; and
that J. H. Goddard now holds the third of made a defendant, on the allegation that he
said notes, being for $160, and interest and held a note secured by co-ordinate lien on the
attorney's fees." The court below rendered same land. From a judgment declaring plain
judgment for Peeples foreclosing his lien uptiff's and Goddard's liens co-ordinate, defend
on the land, and also foreclosing the lien in ant Goddard appeals. Modified.
behalf of Goddard, treating them as co-orBomar & Bomar, for appellant.
dinate liens, and entitled to pro rata payment
from the proceeds of the sale of the land. FINLEY, J. This suit was instituted by From this judgment Goddard has appealed. W. D. Peeples upon a note for $100, executed The main controversy is upon the point as to by J. C. Rhodes to N. L. Cole, as part con- whether the liens are co-ordinate, or whether sideration for a tract of land. The suit was Goddard's lien is entitled to priority in payagainst Rhodes, and N. L. Cole as indorser, ment. It appears that the express agent had and sought a foreclosure of the vendor's lien no authority to transfer the note to Ballew. upon the tract of land in part payment of His authority was limited to a delivery of which it was given. J. H. Goddard
the note to N. L. Cole upon payment of the made a party defendant in the suit, upon the amount called for by its terms. The owner allegation that he also held a note executed 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
KILDOW v. IRICK.
. assert it as a lien upon the land co-ordinate
(Court of Civil Appeals of Texas. Dec. 7, with the lien existing in favor of the other
1895.) $160 note, held by Goddard. As against the
ACTION FOR COMMISSIONS-TRIAL--INSTRUCTIONS. maker of the note, Rhodes, and indorser, Cole,
1. Where, in an action for commissions due who procured Ballew to take up the note, it under contract, the evidence shows a different remained as a subsisting unpaid demand, contract from that alleged, an instruction allowwith a vendor's lien upon the land to secure
ing recovery on that alleged is erroneous.
2. An instruction from which the jury its payment; but as against the owner of the
might infer that the court was of the opinion note, who did not know of the transfer, and that a fact not shown by the evidence was in who thought that he had received payment
fact shown is erroneous. upon the note, extinguishing it, it has no such Appeal from Cooke county court; J. E. force. Goddard, in all probability, would not Hayworth, Judge.
have consented to the transfer of the note to Action by James Irick against Josiah Kil
another person to be held as a claim upon dow, as surviving partner of Kildow & Falthe land, as it diminished, to that extent, the ler, for salary due under contract of employvalue of the security for the other $160 note ment. From a judgment for plaintiff, deheld by him, and which fell due after this fendant appeals.
Reversed. $100 note originally sued upon. We think
S. B. Garrett, for appellant. Green & the principle here asserted is laid down in
Culp, for appellee.
Reas is for Reversal.
TARLTON, C. J. The appellee brought Co., 63 N. Y. 311. The court should have
The court should have this suit to recover from the appellant, as the given judgment in favor of plaintiff upon his surviving partner of Kildow & Faller, the note, foreclosing his lien upon the land; but
sum of $377.65. The indebtedness claimed this lien should have been postponed to the
was under a contract by the terms of which, payment of the $160 note held by Goddard.
as alleged, the firm of Kildow & Faller emJudgment also should have been rendered in ployed the plaintiff to take orders for them favor of Goddard for the amount of his note,
for tombstones and monuments, for which interest, and attorney's fees, and a foreclo
he was to receive a commission of 20 per sure of the vendor's lien upon the land hav
cent. on sales and 5 per cent, additional when ing priority of payment over the lien in favor
the plaintiff put up the work. The contract of Peeples.
proved was not so broad as that alleged in It is also complained that the amount of the the petition. The evidence showed that the judgment rendered in favor of Goddard in plaintiff was not entitled to commissions on the court below was less than the amount he
sales until the work was put up and paid for was entitled to recover upon the note. The by the purchaser; nor in cases where orders amount of the judgment rendered in favor were countermanded by the purchaser; nor of Goddard was $224.67. By calculation we
where the plaintiff had failed to get from the find that the interest on the principal sum, | purchaser the name of the deceased, with $160, from the date of the note to the date the dates of birth and death. Excluding of the judgment, being 4 years, 2 months, from the commissions claimed the items comand 27 days, at the specified rate of 12 per ing within the exceptions stated, and taking cent., would amount to $81.44. The note pro- into consideration the admitted credits and vided for 10 per cent. attorney's fees. It off sets pleaded by the defendant, it is quite does not appear from the agreed statement clear from the record, as we read it, that the of facts upon which the case was tried wheth- plaintiff was not entitled to a recovery of er attorney's fees were to be allowed upon $128 awarded by the verdict of the jury. So the principal and interest or only upon the standing the pleadings and the evidence, the principal
, and under this state of fact we court instructed the jury as follows: "You would only be authorized to compute attor- are further instructed that if you believe ney's fees upon the principal. This would from the evidence that there was a contract amount to $16. By adding the interest, $81.- entered into between plaintiff and defend44, attorney's fees, $16, and principal, $160, ants as shown in plaintiff's petition, and that together, we find the aggregate sum to be plaintiff in good faith performed his part of $257.41. The judgment should have been the contract, and if you further find that the rendered for this sum. The judgment of the rights of third parties had accrued under said court below will be reversed wherein it contract, and that the defendants refused to treats the lien as being of equal dignity and make any effort on their part of the contract, co-ordinate, and is here rendered giving prior- you will then find for the plaintiff whatever ity to the lien in favor of appellant, Goddard. sum you find he is entitled to on account oť The judgment is also reformed so as to the failure of the said defendants to comply award judgment for $257.14 in favor of God. with their part of said contract.” We susdard, with interest thereon from the date of tain the appellant's assignment complaining the judgment of the court below. Reformed of this charge. It is objectionable, because and rendered.
the testimony of the plaintiff himself shows the contract was not in fact as set out in the R. Johnston and F. Flournoy parties defendpetition, and hence the instruction was not ant, upon the alleged ground that they claimjustified by the evidence; because it is not ed to own the land levied on. Prayer for perceived how the rights of third parties judgment for debt and foreclosure of attachcould have affected the rights and duties of ment lien as against all the defendants. Septhe plaintiff and defendant under the con- tember 25, 1891, Lamkin filed an amended tract of employment; and because the jury | plea in abatement, and asked the quashal of might have understood from the charge that the writ of attachment upon the ground that the court was of opinion that there was evi- the sureties on the bond for attachment, to dence to the effect that the defendant's firm wit, A. B. Lamb and W. T. Wrather, were nonrefused to make any effort on their part of residents of the state of Texas, and were resi
, the contract,-a conclusion unjustified by the dent citizens of the state of Tennessee, and record, and improper in the court. The judg- had no property in this state, wherefore the ment is accordingly reversed, and the cause bond furnishes no security to defendant, and is remanded.
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 CALDWELL V. LAMKIN et al.
same facts, and further showing how the
clerk of the state court came to approve the (Court of Civil Appeals of Texas. Dec. 18,
This plea was sworn to. On the same ATTACHMENT-PLEA IN ABATEMENT-AMENDMENT
day that the first amended plea in abatement -DEFECTIVE BOND-NONRESIDENT SURETIES.
was filed, defendant Lamkin filed a general 1. As a defective plea in abatement may denial, expressly premising that it was done, be cured by amendment, it was not error to not waiving his plea in abatement. Defendpermit defendant to file a second amended plea
ants Johnston and Flournoy answered, each after he had answered, not waiving the plea in abatement.
claiming one of the tracts of land levied on, 2. Plaintiff has no right to substitute a and resisting the foreclosure of the attachnew attachment bond, where the original was
ment lien upon the grounds that they had abated for the insufficiency of the sureties. 3. A plea in abatement lies to show the in
valid debts against defendant Lamkin, which sufficiency of an attachment bond, when it ap- had been respectively secured by mortgages pears to be prima facie good.
on the land, and deeds from Lamkin to their 4. Where plaintiff admitted that the sure
respective surveys of land, in satisfaction of ties on the attachment bond were nonresidents, and it appeared by the clerk's affidavit, attach
their debts and mortgages. It is unnecessary, ed to the plea in abatement, that the bond was as we think, to further state the particulars of approved on the ground that the sureties were
their pleas, as, according to our views of the solvent, as shown by a certificate to that effect
case, plaintiff was not entitled to a foreclosure from the clerk of a court in another state, and on the faith of the representations of plaintiff's
of the attachment, because the attachment itattorneys, there was sufficient evidence to
self was properly quashed. On September 28, abate the bond for the nonresidence of the 1894, plaintiff filed a motion to substitute the sureties. 5. An attachment bond with nonresidents
attachment bond, tendering the bond, with as sureties was properly quashed on a plea in good sureties, resident in the state of Texas. abatement.
September 29, 1894, plaintiff filed a reply to Appeal froni district court, Caldwell county; the answer of Johnston and Flournoy, which H. Tiechmueller, Judge.
we deem it unnecessary to notice in detail. Action on a note, aided by attachment, by On the same day that defendant Lamkin filed S. H. Caldwell against L. A. L. Lamkin and his amended plea in abatement,-October 19, others. From the judgment rendered, plain- 1894,-plaintiff filed a motion to strike it out tiff appeals. Affirmed.
upon the ground that it was filed after a plea This suit was brought August 3, 1894, by to the merits; that there was no law requirthe appellant, S. H. Caldwell, against appel- ing sureties on attachment bonds to be resilee L. A. L. Lamkin, for $3,787.30, due by dents of the state; that the bond first filed note of date April 14, 1891, executed by ap- was sufficient, being in form, and approved pellee Lamkin to Y. Q. Caldwell and S. A. by the clerk of the court, constituting a full Miller, as administrators of the estate of R. compliance with the statute. On October 19, D. Caldwell, deceased, which note was by the 1891, the case was tried by the court without administrators of the estate, for value, trans- a jury, when the court overruled plaintiff's ferred, without recourse, to appellant, s. H. motion to substitute the attachment bond, and Caldwell, who sued as owner and holder. On the inotion to strike out defendant Lamkin's the same day attachment was issued against amended plea in abatement, sustained the Lamkin to Caldwell county, Tex., and was plea, abated the bond, quashed the attachon the same day levied on two tracts of lands, ment, and rendered judgment for the plainas the property of Lamkin; and a certified tiff for the amount of his debt against Lamcopy of the attachment and return of levy kin, for $3,787.30, and 6 per cent. interest per was on August 9, 1894, deposited with the annum from April 18, 1891, and against the county clerk of Caldwell county for record, plaintiff and in favor of defendants Johnston the land levied on being situated in Cald- and Flournoy, the plaintiff taking nothing well county. September 4, 1894, in vacation, against them, and that they recover their the plaintiff amended his petition, making W. I costs of plaintiff. Plaintiff has appealed.
S. H. Caldwell, in pro. per. McNeal, Har- thority for going behind and questioning the wood & Walsh and L. J. & A. B. Storey, for validity of an attachment bond, when said appellees.
bond was prima facie good on its face. (2)
Because, said bond being prima facie good, COLLARD, J. (after stating the facts). The evidence was necessary to overcome its validfirst error assigned is "that the court erred in ity, and no evidence was offered by defendallowing defendant Lamkin to amend his plea ant in support of said plea in abatement, in abatement, and file a second amended plea, whereupon both parties, plaintiff and defendafter motion to strike out his first amendedant, announced ready for trial on the merits plea had been sustained by the court, and of the case, a jury being waived,” etc. The after he had answered to the merits, because motion to strike out the second amended plea the amendment was not authorized by law, in abatement, among other reasons for the and came too late after answer to the mer- ruling asked, set up that it was filed after its, and because, having amended the plea answer to the merits, and after issue joined. once, and going to trial thereon, and it hav- It does not appear, as stated in the assigning been stricken out on motion of the plain- ment of error, that the second amended plea tiff, no further plea on that subject could was filed after his first amendment had been have been legally made.” The original and stricken out on motion of plaintiff. It does first amended pleas in abatement are not in not appear but that it was filed by leave of the record. It seems, however, that the orig- the court. The preceding pleas upon the inal plea was filed before Lamkin's original same subject are not before us, and it does answer, as the answer commences: "Come not appear that they were not amendable. defendant Lamkin, and, not waiving his plea The original evidently preceded the answer in abatement, denies,” etc. The order act- to the merits, as the answer referred to in it ing on the motion of plaintiff to strike out was not waived. Howeth v. Clark, 4 Willson, the second amended plea is in the first part Civ. Cas. Ct. App. § 314.
Civ. Cas. Ct. App. $ 314. A defect in a plea of the final judgment, as follows: “On this in abatement may be cured by amendment, October 19, 1894, this cause being regularly upon leave of the court, as any other decalled for trial, the parties plaintiff and de- fective plea. It may be done in the county fendant announced ready for trial on the court on appeal. If plaintiff is correct that law in the preliminary questions. The de- the first amended plea was stricken out on fendant L. A. L. Lamkin having, by leave his motion, it was not error to allow defendof the court, filed his second amended plea ant to amend the plea, the rule being that in abatement, to abate the attachment bond when demurrer is sustained to a plea in in this cause, for reasons set out in said plea, abatement the defendant may plead over. the plaintiff moved the court to strike out Ritter v. Hamilton, 4 Tex. 326; McDonald v. said plea, for reasons stated in said motion, Tinnon, 20 Tex. 245; Lodge v. Leverton, 42 which motion was by the court heard and Tex. 18; Rev. St. art. 1192. The amended overruled, to which action of the court plain- pleading objected to was duly sworn to. tiff at the time, in open court, excepted. The There was no error in refusing to strike it plaintiff then, in open court, tendered a new out. attachment bond, signed by plaintiff, and 2. It is next insisted by plaintiff that the James G. Burleson, A. R. Chew, and Eugene court erred in refusing to allow him to subClark, as sureties, by motion, asked leave of stitute the new bond in attachment for the the court to substitute said new bond for original, because the first bond was valid in and in lieu of the first and original attach- form and substance, sufficient in amount, ment bond filed in this court, for the reasons conditioned as required by law, and approved set out in said motion to substitute, which by the clerk of the court, and was a full comsaid motion was by the court overruled, to pliance with the statute of attachments, and which action of the court the plaintiff at the on the objection by defendant, by his plea time, in open court, excepted. Then came in abatement, that the sureties were nonresiL. A. L. Lamkin, and presented his second dents of the state, it was the proper practice amended plea in abatement, asking the court to allow the filing of a new bond curing and to abate the attachment bond filed in this meeting the objection; and this even if the cause, and quash plaintiff's writ of attach- first bond was not in fact good, and especialment, and the affidavit of B. T. Palmer, ly when the defect in the bond did not aptherewith filed, for reasons set out in said pear on the face of the bond questioned. plea, which plea was by the court sustained, The bond objected to was in form, for the said bond abated, and the plaintiff's attach- proper amount, had two sureties, and was ment quashed, to which actions and rulings approved by the clerk of the court. In the of the court the plaintiff at the time, in open absence of statutory authority, the old bond court, excepted: (1) Because said
: (1) Because said bond be- could not be substituted by a new one, esing sufficient in amount, and conditioned as pecially as the defect in the original bond required by law, and signed by a sufficient existed at the time the attachment was isnumber of sureties, and approved by the sued. 1 Am. & Eng. Enc. Law, 905-908; proper officer, said bond was a full and com- Drake, Attachm. 146; Wap. Attachm. 124, plete compliance with the attachment laws 125, 127; Whitley y. Jackson, 1 White & W. of this state; and there was no statutory au- Civ. Cas. Ct. App. $ 575; Winn v. Sloan, Id.