Texas Bank & Trust Co. v. Smith

• Decision Date: 28 February 1917
• Docket Number: (No. 2467.)
• Citation: 192 S.W. 533
• Parties: TEXAS BANK & TRUST CO. OF BEAUMONT v. SMITH et al.
• Court: Texas Supreme Court

192 S.W. 533

TEXAS BANK & TRUST CO. OF BEAUMONT v. SMITH et al.

(No. 2467.)

Supreme Court of Texas.

February 28, 1917.

Certified Question from Court of Civil Appeals of First Supreme Judicial District.

Proceedings for foreclosure of liens against George W. Smith and others, in which the Texas Bank & Trust Company intervened. From an adverse judgment intervener appealed, and questions were certified by Court of Appeals to Supreme Court. Questions answered.

Carlton, Townes & Townes, R. E. Hardwicke, and Townes, Foster & Hardwicke, all of Beaumont, for appellant. Lipscomb & Williams and Geo. D. Anderson, all of Beaumont, for appellees.

PHILLIPS, C. J.

The case presents a controversy between an irrigation company, certain landlords, and a mortgagee with respect to the existence and priority of the lien claimed by the irrigation company.

In the year 1909 one George W. Smith was in possession of certain lands leased by him from the owners, using the same for a rice farm. To successfully grow rice on the land irrigation was necessary, and the only water accessible for the purpose was that from the canals of the irrigation company. In July of 1909 Smith entered into a contract with the irrigation company, by the terms of which water for irrigation purposes was to be furnished him by the company for an agreed price. Prior to the making of this contract Smith had executed a mortgage to a banking company to secure the payment of money loaned him to be used in growing the rice crop. This mortgage was duly registered before the irrigation contract was made. The owners of the land knew at the time their leases were made to Smith that his purpose was to cultivate the land in rice, as did also the banking company at the time it took its mortgage.

Default having been made by Smith in the payment of rent due by him for some of the land, the owner of such land, — one of the landlords, filed suit for the rent due and for foreclosure of the landlord's lien upon the crop of rice thereon grown. Afterwards the irrigation company filed a separate suit seeking the recovery of the amount due by Smith under the water contract and a foreclosure of a lien upon the entire crop. The two suits were consolidated. The banking company intervened, setting up its mortgage lien, as did also the other landlords asserting their landlord's liens.

The questions propounded by the honorable Court of Civil Appeals are as follows:

"1. Smith being a lessee, and not the owner of the land, and the contract for water having been made with him and not with the landowners, did the Irrigating Company, by its contract made with Smith and by furnishing water for the irrigation of the crops in pursuance thereof, acquire a lien on the crops so irrigated by virtue of the provisions of Art. 3130 of Sayles' Civil Statutes?

"2. If the foregoing question is answered in the affirmative, then we ask, was such lien superior to the mortgage lien of the Texas Bank and Trust Company, and to the liens of the landowners for the rents of their lands?"

The statute in force in 1909 with respect to the lien of an irrigation company upon crops grown on land for the irrigation of which it had furnished water, was in these words:

"Every person, corporation or association of persons which has heretofore constructed or which may hereafter construct any ditch, canal, dam, lake or reservoir for the purpose of irrigation, and who shall lease or rent the water from said ditch, canal, dam, lake or reservoir to any person or association of persons or corporation owning any lands subject to irrigation from any such ditch, canal, lake, dam or reservoir, such person, corporation or association of persons owning such ditch, canal, lake, dam or reservoir shall have a preference lien, superior to every other lien, upon the crop or crops raised upon the land thus irrigated under such lease or contract." Act of 1895, Sec. 18 (General Laws of 1895, page 25); Art. 3130, Sayles' Civil Statutes of 1897; Art. 5009, Revised Statutes 1911.

The term "owner," as generally used, signifies one who has the legal or rightful title. But this is not always the sense in which it is employed. It is not rigid in meaning, and in statutes is not infrequently used to denote one holding for himself and in his own right but having less than an absolute title. Its meaning depends in a great measure upon the context and the subject matter to which it is applied. Thus in statutes defining duties of railroads and denouncing a penalty against the corporation "owning the railroads," or exacting certain requirements of the companies "owning the tracks," the corporation in control of and operating the railroad, though simply a lessee of the property, is an "owner" within the meaning of such statutes. State v. St. Joseph, St. L. & S. F. Ry. Co., 46 Mo. App. 466; B. & O. R. R. Co. v. Walker, 45 Ohio St. Rep. 577, 16 N. E. 475; Chicago, R. I. & P. Ry. Co. v. State, 84 Ark. 409, 106 S. W. 199. In an action to recover the possession of real estate, to maintain which only a possessory title was necessary, a tenant for years properly alleged himself to be "the owner" of the real estate. Parker v. Railroad Company, 79 Minn. 372, 82 N. W. 673. Other cases illustrating like uses of the term are Schott v. Harvey, 105 Pa. 222, 51 Am. Rep. 201; Camp v. Rogers, 44 Conn. 291; Peterson v. Johnson, 132 Wis. 280, 111 N. W. 659. The last case concerned a statute imposing the duty on "the respective occupants of adjoining lands, used and occupied for farming purposes," of maintaining partition fences, unless they should otherwise mutually agree. It then provided:

"And owners of lands who do not maintain and keep in repair lawful partition fences shall not be entitled to recover any damages whatever for trespasses by the animals of owners of any adjoining lands with whom partition fences might have been maintained if such lands had been inclosed."

The word "owners" as used in the quoted part of the statute was held to include persons designated by the word "occupants" in the preceding part.

That the term may signify one whom the owner of the title has clothed with the possession and control is recognized by this court. In the opinion of Chief Justice Stayton in Turner v. Cross and Eddy, Receivers, 83 Tex. 218, 18 S. W. 578, 15 L. R. A. 262, in speaking of the terms "owner" and "proprietor," this is said:

"Both words are doubtless often used to express right to property in a thing less than absolute or exclusive right, but when this occurs it will ordinarily appear from the context, and in all such cases the person holds for himself and in his own right; and as stated in brief of counsel, `the right of such a person to the possession and control springs not from an act to which the concurrence or consent of the owner is not required, as in the appointment of a receiver, but from the direct act of the owner or proprietor, who thereby clothes the person placed in the possession and control with the right to operate the same for his own benefit."

The sense in which the term "owning" was used in that part of the statute under consideration which requires that the lease of water be to one "owning" the lands to be irrigated, in order for the irrigation company to have the statutory lien upon the crops thereon grown, cannot be accurately determined without consulting the context of the act of which the statute was a part. As already noted, the statute was Section 18 of the Act of 1895. Section 11 of the Act as amended at the same session (General Laws of 1895, page 23; Art. 3125, Sayles' Civil Statutes of 1897), throws a distinct light upon the question, since it is the part of the act which deals with the duties of irrigation companies chartered under it or the general laws, defines the classes of water rights which may be sold or leased, and designates those entitled to obtain them.

After authorizing the formation of corporations with the powers conferred by the act, this section declares:

"All such corporations shall have full power and authority to make contracts for the sale of permanent water rights, and to have the same secured by liens on the land or otherwise, and to lease, rent or otherwise dispose of the water controlled by such corporation for such time as may be agreed upon, and in addition to the lien on the crops hereinafter provided for, the lease or rental contract may be secured by a lien on the land or otherwise."

This is a general provision designating the kinds of water rights which irrigation companies may grant to consumers. They are of two distinct classes, permanent water rights, and those of a limited duration. This distinction is important, and materially aids in the interpretation of Section 18. Permanent water rights, this provision contemplates, are to be sold. Other water rights are to be leased or rented. The former are to be evidenced by contracts of sale; the latter by contracts of lease. With whom are such respective classes of contracts...