Bryan College Interurban Ry. Co. v. Kropp

• Decision Date: 22 June 1917
• Docket Number: (No. 5876.)
• Citation: 197 S.W. 733
• Parties: BRYAN COLLEGE INTERURBAN RY. CO. v. KROPP.
• Court: Texas Court of Appeals

197 S.W. 733

BRYAN COLLEGE INTERURBAN RY. CO. v. KROPP.

(No. 5876.)

Court of Civil Appeals of Texas. San Antonio.

June 22, 1917.

Rehearing Denied October 10, 1917.

Appeal from District Court, Brazos County; J. C. Scott, Judge.

Action by August Kropp against the Bryan College Interurban Railway Company. Judgment for plaintiff in part, and defendant appeals. Reversed and rendered.

Doremus, Butler & Henderson and Taliaferro & Armstrong, all of Bryan, for appellant. W. C. Davis and J. G. Minkert, both of Bryan, for appellee.

FLY, C. J.

This is a suit instituted by appellee to recover on two promissory notes, each due on March 1, 1916, and to foreclose a laborer's lien on the property of appellant, which it was alleged that appellee held under the Constitution and laws of Texas. The appointment of a receiver was also sought. The notes were executed in the name of appellant by O. E. Gammill, who was alleged to have been, at the time, the vice president and general manager of the railway company. His authority to execute the notes was denied by appellant. Appellant filed a general demurrer and a number of special exceptions, which were overruled. The cause was tried with the assistance of a jury, and verdict and judgment rendered in favor of appellee for the amount of the two notes, interest, and attorneys' fees, and for a foreclosure of the laborer's lien. The receivership was denied by the court. Our conclusions as to the facts are given in connection with the consideration of the assignments of error. Two other parties intervened and were given small judgments against appellant.

This suit was filed on February 17, 1916, about 12 days before the maturity of the notes, and the first, second, third, fifth, sixth, and seventh assignments assail the action of the court in refusing to sustain exceptions to the amended petition on the ground that the notes had not matured when the petition was filed. There is no merit in the assignments of error and they are overruled. The declaration on the notes by the amendment after they became due cured the premature action and appellee had the right to prosecute his suit to judgment. Culbertson v. Cabeen, 29 Tex. 247; Cox v. Reinhardt, 41 Tex. 592; Burns v. True, 5 Tex. Civ. App. 74, 24 S. W. 338; Foley v. Houston Co-Op. Co., 106 S. W. 160. Bringing the action 12 days prematurely could not have injured appellant. It could have demanded the costs that accrued before the debt was due. Dalton v. Rainey, 75 Tex. 516, 13 S. W. 34.

Appellant seems to labor under the impression that there was an attempt to create a lien by the execution of the notes, but that is not the case. The notes were executed merely to preserve the evidence of the debt; the law had created the lien. Rev. St. art. 5640. The law gives an absolute lien to all mechanics, laborers, and operatives who may have performed labor, or worked with tools, teams, or otherwise in the construction, operation, or repair of any railroad, locomotive, car, or other equipment, and to whom wages are due or owing for such work, etc. It is provided in article 5643 that the lien created by article 5640 shall cease to be operative in 12 months after the creation of the lien, if steps are not taken to enforce it. The lien was created by the performance of the labor and not by the execution of the notes, which were merely a recognition of the existence of the debt. Article 6724 has no application to the notes herein sued on. The notes did not create the lien; the law created it. The ninth and tenth assignments of error are overruled.

It could not have injured appellant to allow testimony tending to show that appellant owed appellee and that the notes were given for that debt. The evidence was pertinent and proper. The eleventh, twelfth, and thirteenth assignments of error are overruled.

Appellant had denied the authority of Gammill to issue notes for the company, and it was not improper to allow testimony to the fact that appellant had recognized and ratified other notes executed by Gammill. Appellant had availed itself of the labor of appellee; it had ratified a prior note made to him by Gammill, who was its vice president and general manager. He had absolute control of the railroad, and contracted for all labor, contracted to pay for it, and sometimes did pay for it. His authority to give notes arises from his having assumed and exercised that power in the past, and the company had accepted the labor and received the benefit of it. Wharton v. Bank, 153 S. W. 699; Railway v. Nicholson, 61 Tex. 491.

In the case of Street Railway v. National Bank, 62 Ark. 33, 34 S. W. 89, 31 L. R. A. 535, 54 Am. St. Rep. 282, the Supreme Court of Arkansas holds the corporation liable on a negotiable promissory note executed by its president, when the evidence has shown that the board of directors or by-laws empowered him to execute it, or where by allowing him to do such things he is clothed with apparent authority to so act, or where there has been ratification of the act, or where the corporation has received the proceeds or any benefit from the transaction. This case comes fully within the purview of one or more of the conditions. The general manager was clothed with apparent authority to execute the notes, his act was ratified, and appellant received benefits from it. The fourteenth and fifteenth assignments of error are overruled.

The Constitution of Texas does not provide for a lien in favor of railroad laborers, mechanics, and operatives, but their lien is only statutory, being given by article 5640, Revised Statutes. That statute is separate and distinct from articles 5621 to 5639, and is not subject to the requirements and provisions of those articles in regard to fixing the lien. Under the provisions of articles 5640 to 5643, inclusive, the only requirement is that steps to enforce the lien must be taken within 12 months after the creation of the lien. The lien is created by the performance of the work and the right accrues to the wages. There might be an agreement postponing the time at which the wages should become due and the lien should accrue. The only method of enforcement of the lien indicated by the statute is by a suit for the wages that may be due. Railway v. Berry, 31 Tex. Civ. App. 408, 72 S. W. 1050.

A careful consideration of the evidence convinces this court that all of the debt evidenced by the two notes was due at some time before the notes were executed. Most of it was due, perhaps, quite a length of time before the notes were executed. The notes postponed the time of payment for one year from their date. No mention was made, at the time the notes were given, of any lien on the railroad property, and there is no acknowledgment of the existence of the lien in either of the notes. They were treated as a settlement of all matters between appellant and appellee.

The facts show that in 1912 there was an accounting between appellant and appellee which revealed that there was due him the sum of $1,175. He was given credit on the books for that sum. This was due on work for two previous years. Of course the lien was lost on that sum by the expiration of a year's time, as it was carried as an open account until January, 1914. At that time $300 in cash and a note for $2,000 was given to appellee in settlement of his account, except $235, which was carried as an open account. On March 1, 1915, appellant gave appellee a note for $1,019.65, for amount due outside the amount evidenced by the $2,000 note, and took up the latter note by...