American Surety Co. of New York v. Bay City Cattle Co.

• Decision Date: 11 December 1924
• Docket Number: (No. 8566.)
• Parties: AMERICAN SURETY CO. OF NEW YORK et al. v. BAY CITY CATTLE CO. et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

Page 247

268 S.W. 247

AMERICAN SURETY CO. OF NEW YORK et al. v. BAY CITY CATTLE CO. et al.^*

(No. 8566.)

Court of Civil Appeals of Texas. Galveston.

December 11, 1924.

Rehearing Denied January 22, 1925.

Error from District Court, Harris County; W. E. Monteith, Judge.

Action by the Bay City Cattle Company and others against the American Surety Company of New York and the National Cattle Loan Company. Judgment for plaintiffs, and defendants bring error. Affirmed.

Vinson, Elkins, Wood & Sweeton, Campbell, Myer, Simmons & Hawkins, and Fred R. Switzer, all of Houston, for plaintiffs in error.

Baker, Botts, Parker & Garwood, Barksdale Stevens, and Winston Carter, all of Houston, for defendants in error.

GRAVES, J.

The facts underlying this cause were as follows:

J. C. Hybarger, an extensive operator in the buying and selling of cattle, purchased in Florida at least 740 head of cattle in accordance with an agreement between him and the National Cattle Loan Company, whereby it advanced money to its bank to pay drafts drawn by him to cover the purchase price of and transportation charges on the cattle to Texas; as security for the money so advanced, Hybarger attached to, or wrote on the drafts drawn therefor, a conveyance of the cattle from him to the bank for the benefit of the loan company; it was further the habitual practice between him and the loan company that, when cattle were thus bought by him and collected together, he would then execute a chattel mortgage on them to it to secure this money.

After the cattle were so purchased, Hybarger shipped them direct from Florida to the pasture of the Bay City Cattle Company in Brazoria county, Tex., where they were placed on July 23, 1920, under a contract between him and the cattle company, by which he was to pay pasturage on them at the rate of 35 cents per head per month; the cattle company at the time knowing nothing of his prior transaction with the loan company and being under the impression that the cattle were owned by him.

Thereafter, on August 21, 1920, after they had so been in the cattle company's pasture, and had been cared for by it since the preceding July 23d, Hybarger, who was then a resident of San Antonio, Bexar county, Tex., executed at Houston and delivered a chattel mortgage on these cattle to the loan company to secure his notes to it maturing in December of the same year in the total sum of $35,540, which instrument, however, was not filed for record in Brazoria county, where the cattle were located, until September 7, 1920, and of which execution and filing the cattle company had no actual knowledge or notice, nor were they apprised of any claim under the mortgage, until in April, 1922.

On December 13, 1920, Hybarger sold and removed from the pasture 210 head of the cattle, about 70 had by that time escaped or died, and the remaining 460 head remained in there until April 20, 1922; none of the charges for pasturage or other services rendered were ever paid.

On April 20, 1922, the two companies referred to, the loan company and the cattle company, the former claiming the right to take and appropriate the remaining 460 head of the cattle pursuant to the terms of its chattel mortgage, and the latter asserting an agistor's or an equitable lien on them to secure the pasturage, branding, dipping, and vaccination charges thereon, amounting in all to $4,100.66, agreed that the controversy should be settled in a suit between them to be filed by the cattle company, whereupon the loan company executed a bond to the cattle company, with the American Surety Company of New York as surety, agreeing in effect to pay such of these charges as the loan company was either held liable to it for, or as might be determined to carry a superior lien on the cattle to the loan company's claim. The cattle were then surrendered to the loan company and this suit followed, being filed by the cattle company as plaintiff against the loan and surety companies as defendants, declaring upon the charges before described, and asserting both an equitable and a statutory lien on the cattle, superior to any claim under the chattel mortgage.

The cause was tried before the court without a jury; judgment first being entered in favor of defendants in error for $518, as for pasturage on the cattle for the first two months only, from July 23 to September 23, 1920, but later in the same term and on further argument, this decree was set aside and a judgment was entered for defendant in error for the full amount they sued for, $4,100.66, with interest from its date. From that recovery against them, the loan and surety companies prosecute this writ of error. The court below filed these conclusions of fact and law:

"Findings of Fact.

"(1) I find that J. C. Hybarger purchased the cattle in question in Florida for shipment to Texas; that, prior to the purchase of said cattle, he negotiated in St. Louis with the president of the National Cattle Loan Company for money to finance the purchase of said cattle; that thereafter the cattle were purchased and draft drawn on the National Stockyards Bank and paid by the National Cattle Loan Company; that thereafter the cattle were shipped to Texas and immediately placed in the pasture owned by the plaintiff in this case, with the knowledge of the defendant National Cattle Loan Company that the said cattle were to be shipped to Texas, and with their knowledge a short time thereafter the cattle were placed in the pasture owned by the plaintiff.

"(2) I find that the pasturage contract agreed upon was a month to month contract at the rate of 35 cents per head.

"(3) I find that, at the time of entering into said contract, J. C. Hybarger stated to Mr. Le Tulle, one of the plaintiffs in this case, that he thought said cattle would remain in said pasture for a period of at least six months.

"(4) I find that, at the time the chattel mortgage was executed on August 21, 1920, by J. C. Hybarger, the defendant National Cattle Loan Company knew that the cattle in question were in the pasture of the Bay City Cattle Company.

"(5) I find that, before the execution of said chattel mortgage, and at the time the cattle were placed in the pasture, or soon thereafter, J. C. Hybarger advised the National Cattle Loan Company where the cattle had been pastured and also the condition of the cattle.

"(6) I find that, at the time the cattle were placed in the pasture of plaintiff, J. C. Hybarger authorized the plaintiff to brand, dip, and vaccinate said cattle, which work was afterwards done, and I find that the charges made for said work were reasonable.

"(7) I find that J. C. Hybarger sold, on December 13, 1920, 210 head of said cattle to one Nevins, which were left in said pasture for a certain period of time, that, at the time said cattle were removed by Nevins, Mr. Le Tulle had knowledge that they were being removed, and that the rental charges had not been paid thereon up to December 13, 1920, the date of the sale of the cattle to Nevins; and I further find that, at the time Mr. Hybarger sold the cattle to Nevins, Mr. Le Tulle had no knowledge of said sale.

"(8) I find that on December 13, 1920, when the said 210 head of cattle were sold by J. C. Hybarger to one Nevins, said sale was made without the consent or knowledge of any duly authorized officer or agent of the Bay City Cattle Company. And I further find that the purchaser of said 210 cattle paid the full amount of pasturage from December 13, 1920, until the time they were taken out of said pasture.

"(9) I find that, at the time the balance of said cattle were disposed of by the defendant in this case, there was no equity over and above the amount of the indebtedness to them.

"(10) I find that the charge of the plaintiff for pasturing the cattle at the rate of 35 cents per head per month was reasonable.

"(11) I find that the pasturage of the cattle, as done by J. C. Hybarger, was necessary for the care and preservation of the cattle.

"(12) I find that the Bay City Cattle Company is a corporation, which has been dissolved since the institution of this suit, and that the plaintiffs are the directors and trustees of the dissolved corporation.

"(13) I find that the defendant American Surety Company of New York executed the bond herein sued upon as surety for the defendant National Cattle Loan Company.

"(14) I find that plaintiff had no actual notice of the execution or the filing of the cattle mortgage introduced in evidence until a short time prior to the removal of the cattle from the pasture of plaintiff.

"(15) I find that, at the time J. C. Hybarger bought the cattle in question in Florida, it was contemplated by the said Hybarger and the defendant National Cattle Loan Company that the said cattle would be shipped to Texas, and would be pastured by Hybarger in pastures owned by persons other than J. C. Hybarger, and that the chattel mortgage in question was executed by J. C. Hybarger to secure the purchase price and expense of transporting said cattle to Texas, pursuant to the agreement between said Hybarger and National Cattle Loan Company had in the negotiations between them set out in section 1 hereof, of which agreement and negotiations the plaintiffs had no knowledge.

"Conclusions of Law.

"(1) I conclude, as a matter of law, that the plaintiffs, as trustees and directors of the Bay City Cattle Company, are entitled to recover against the defendants herein the pasturage of the cattle from July 23, 1920, to April 21, 1922, at the rate of 35 cents per head per month, and that they are entitled to recover the reasonable charges proven on the trial of this case for the dipping, branding, and vaccinating said cattle.

"(2) I conclude, as a matter of law, that the plaintiffs, as directors and trustees of the Bay City Cattle Company, are entitled to judgment against the defendant National Loan Cattle Company and the American Surety Company of New York, jointly and severally, and that the...