Case ID: sw_218/html/0104-01.html
Source: Caselaw Access Project
Author: {"author": "PLEASANTS, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WARREN et al. v. JOHNSON et al.
    (No. 7758.)
    (Court of Civil Appeals of Texas. Galveston.
    Nov. 20, 1919.
    Rehearing. Denied. Dec. 18, 1919.)
    1. Chattel mortgages <©=>113 — Mortgage to INDEMNIFY SURETY CONSTRUED TO AUTHORIZE SALE ONLY IN CASE OF JUDGMENT NOT APPEALED FROM.
    A chattel mortgage, executed to indemnify a surety on a claimant’s bond authorizing the trustee to take possession and sell the property if judgment should be rendered against the mortgagor and he should not appeal, and providing, in case of an appeal the mortgage should remain in force, and if judgment should be rendered against the surety the same remedy should apply, and providing that the surety’s remedies and rights should be fully matured without it being required to first pay any judgment, costs, and expenses, did not authorize a seizure and sale in case of a judgment against the claimant from which he appealed.
    2. Chattel mortagages <©=>113 — Mortgage, AUTHORIZING SALE IN CASE OF JUDGMENT UNLESS “APPEAL” WAS TAKEN, INCLUDED WRIT OF ERROR.
    A chattel mortgage to indemnify the surety on a claimant’s bond, authorizing a sale of the property if judgment was rendered against the mortgagor and no appeal taken, used the word “appeal” as meaning a taking of the case to a higher court by any authorized method, including a writ of error.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Appeal.]
    Appeal from District Court, Harris County ; Hugh M. Potter, Special Judge.
    Suit by Mrs. J. B. Warren and husband against S.' Johnson and others. Judgment for defendants, and plaintiffs appeal.
    Reversed and remanded.
    A. C. Van Velzer, of Houston, for appellants.
    A. B. Wilson and E. T. Chew, both of Houston, for appellees.
   PLEASANTS, C. J.

This suit was brought by Mrs. J. B. Warren, joined by her husband, against Lion Bonding & Surety Company, J. A. Allen, R. E. Goree, A. B. Wilson, A. O. Blackwell, John Boone, Ge.orge Khul-man, Sid Westheimer, and Ludwiek Scharck, to recover damages for the alleged wrongful conversion by defendants of an automobile belonging to plaintiff, Mrs. Warren.

The petition alleges that in a suit brought by the Atlas Construction Company on April 2, 1915, against one Steve Johnson, an attachment sued out by the plaintiff in said suit ■was levied upon the automobile in question as the property of the defendant Johnson, and that thereafter, on May 5, 1915, J. B. Warren filed a claimant’s oath and bond for trial of the right of property in said automobile, the Lion Bonding & Surety Company being the surety upon said bond; that on November 24, 1915, the Atlas'Construction Company recovered judgment in the suit against Johnson, with foreclosure of its attachment lien, and also recovered judgment in the trial of the ’right of property proceedings against J. B. Warren and the Lion Bonding & Surety Company, the surety on his claimant’s bond, for the sum of $550 and all costs of said proceedings.

It is further alleged that before the judgments in the suits before mentioned were rendered, the matter in controversy between the Atlas Construction Company and the said defendant Johnson had been fully settled, and Johnson released from all claims and demands by said company, and that the purpose and object of the parties (defendants here) in continuing the prosecution of said suits and obtaining judgments therein “was not to reach the said Johnson, but to proceed against and reach the said Warren, and to convert the said automobile to the use of the defendants herein, their agents and attorneys, by taking ‘snap’ judgments.”

The petition contains allegations of fraud and willful wrong on the part of the defendants, .which for the purposes of this opinion it is unnecessary to set out.

It is also alleged that plaintiff Mrs. Warren purchased the automobile from her husband on June 20, 1915. The judgment against-Warren and the Lion Bonding & Surety Company, the surety on his claimant’s bond, was brought to this court for review by writ of error, and was set aside by the judgment of this court. No execution was levied upon the judgment, the only execution issued having been returned “unsatisfied by order of the plaintiff.” The Lion Bonding & Surety Company did not pay the judgment rendered against it as surety on the claimant’s bond, or any part of it. After this judgment was rendered against it, and before. the writ of error was sued out therefrom by Warren, it brought suit by its trustee, Allen, against Warren, and sued out an attachment which was levied upon the car. This attachment was quashed. Thereafter it sued out two writs of sequestration in said suit, both of which were also quashed, after which it dismissed its suit.

The defendant Boone, who in his official capacity as constable held possession of said car under said writs of attachment and sequestration, refused upon the quashing of the writs and the dismissal of the suit to deliver the car to plaintiff Warren, but delivered it to the Lion Bonding & Surety Company upon its execution and delivery to him of a bond of indemnity. Having obtained possession of the car in this manner, said company sold it for $100, and appropriated the proceeds to the payment of costs and attorney’s fees incurred in the litigation before mentioned.

Plaintiffs in this suit alleged that the value of the car was $300. In addition to this value they claim actual damages in the sum of $3,000 as the value of the use of the car, and exemplary damages in the sum of $5,000. They also claim $500 as attorney’s fees.

The defendants answered by general and special exceptions and general denial, and further defended upon the ground that the Lion Bonding & Surety Company was expressly authorized by the terms of a chattel mortgage executed and delivered by Warren to J. A. Allen, trustee, to indemnify said company, as Ms surety upon his claimant’s bond, “to take possession of the automobile and sell it at public or private sale and apply the proceeds to the payment of any court costs, expenses, and attorney’s fees for which Lion Bonding & Surety Company was liable, whether paid or not, and authorized the sale of the automobile and application of proceeds without payment in advance by Lion Bonding & Surety Company of any court costs, expenses, and attorney’s fees, which such court costs, expenses, and attorney’s fees had heen incurred by Lion Bonding & Surety Company, or for wMch it was liable; that said automobile was sold under the terms of said chattel mortgage for $100, and the proceeds applied to the payment of court costs, attorney’s fees, and expenses, leaving a balance due defendant surety company of $150.”

The trial court held that the surety company had the right to take possession of the car under the terms of the application for the bond and the indemnity contract and sell it, applying the proceeds to court costs, attorney’s fees, storage, etc., incurred by it for its protection, and the court instructed the jury to return a verdict for defendants. Under appropriate assignments of error appellant assails this ruling of the trial court.

The application made by ^ Warren to Lion Bonding & Surety Company to execute as surety his claimant’s bond contains the following provision:

“The indemnitor will perform all conditions of said bond on the part of the in,demnitor to be performed and will at all times indemnify and keep indemnified the surety and hold and save it harmless from any and all damages, loss, costs, charges and expenses of any kind or nature whatsoever which it may at any time sustain or incur by reason of its suretyship, and will pay over to the surety, its successors or assigns, all sums of money which may be paid by or for the surety or which it may become liable to pay by reason of such suretyship. Council and attorney’s fees, whether incurred under retainer or salary, or any other expense incurred by the surety at any'time, in any litigation, investigation, collection of premiums due on this bond or in seeking its discharge as surety shall be deemed a proper charge or expense within the meaning of the preceding sentence, and the surety is hereby authorized to prove such costs or expenses in any action or proceeding against the indemnitor, and include the same in any judgment or decree, which may be recovered against said indemnitor, and the company may bring as many actions hereupon as there are defendants, the recovery of each judgment not to be a bar to. the recovery of any other judgment. That in any accounting which may be had between the indemnitor and the surety, the surety shall be entitled to credit for any and all disbursements in and about matters herein contemplated made by it.
“That the surety shall at its option have and may exercise in the indemnitor’s name or otherwise, any and all rights and privileges which the indemnitor has or may have in the premises.
“That the indemnitor hereby further agrees if any suit is brought on the bond herein applied for, to permit said company to employ its own counsel or attorney to defend such suit and to repay to said company the fee of said counsel or attorney and all other costs ana expenses to which said company may be put in defense of said suit.”

The conditions of the chattel mortgage executed by Warren for the purpose of indemnifying his surety are as follows:

“In the event judgment should be rendered against me in the above numbered and entitled cause upon said claimant’s bond, in said court, and I should not appeal said cause within the time allowed by the statutes of the state of Texas, now in force, then the said J. A. Allen, or his successors hereinafter named, is hereby authorized and directed to get possession of said above-described property, and sell the same at either public or private sale and apply the proceeds'to the payment of any judgment that may be rendered against me in the above numbered and entitled cause, upon said claimant’s bond, and any and all costs of court and attorney’s fees which may be incurred by the said J. A. Allen or his successors in taking possession of and selling said automobile and applying the proceeds to the payment of said judgment; and in the event said automobile shall not bring sufficient money to pay off said judgment, interests, costb and attorney’s fees, and any and all other expenses incurred by the said J. A. Allen, or his successors, I hereby agree and obligate myself to pay any balance.
“In the event I shall appeal from the decision of the court upon the trial of the above numbered and entitled cause, this chattel mortgage shall remain in full force and effect, and in the event any judgment shall be rendered against Lion Bonding & Surety Company upon the claimant’s bond by the Court of Civil Appeals or Supreme Court, the remedy as herein provided in the foregoing paragraph shall apply.
“It is hereby stipulated and agreed that said above-described property may be sold to pay any judgment, interest, court costs and attorney’s fees and other expenses, without Lion Bonding & Surety Company first having paid the same, it being hereby expressly understood and agreed that the remedies and rights of Lion Bonding & Surety Company shall be deemed fully matured, and its right of action shall not depend upon the payment of it of any sums of money hereunder.
“It is hereby further stipulated and agreed that this chattel mortgage together with my application to Lion Bonding & Surety Company for the claimant’s bond, upon which Lion Bonding & Surety Company is surety, shall be and form one contract and agreement, and that all of the rights and remedies provided for in the application shall be in no wise impaired, changed, altered or varied by the provisions contained in this chattel mortgage, unless Lion Bonding & Surety Company shall elect to pursue the remedies herein prescribed and given it in lieu of any remedies and rights given it in said application, and that the Lion Bonding & Surety Company may adopt any remedies herein given or contained in the application as to it may seem most suitable and adaptable to the preservation and securing of its rights and remedies to save it from any loss, damage, court costs, expenses or injury.”

We cannot agree with the trial court in the construction placed by it upon the contract of indemnity. The authority given the trustee to take possession of the automobile and sell it for the purpose of indemnifying the Lion Bonding & Surety Company is given only in event judgment should be rendered against the claimant on his claimant’s bond, and he should fail to appeal therefrom, and this limitation upon the right of seizure by the trustee is again expressed in the provision of the contract which declares that in event an appeal is taken the mortgage shall continue in full force and effect for the protection of the surety against any judgment that may be rendered by the appellate court.

There is nothing in the succeeding clause of the contract, which authorizes the sale of the property to protect the surety against liability on the claimant’s bond and the costs and expenses incurred by it without its having first paid same, which in any way affects the plain provision that the right of arbitrary seizure and sale can only be exercised in event there is a judgment against the claimant on the bond and no appeal is taken therefrom.

The undisputed evidence shows that a- writ of error was sued out by appellant from such judgment within the time allowed by law, and that the judgment was reversed by the appellate court.

The only question we think that could arise upon the construction of this contract is whether in the clause “appeal said cause within the time 'allowed by the statutes now in force,” the word “appeal” was used in its restricted technical, sense, and does not include taking the cause to a higher court by writ of error. In its ordinary sense an appeal of a case means taking it to a higher court by any authorized method. Our statutes give the right of appeal by writ" of error, and also by the more direct method of simply giving notice in the trial court and filing an appeal bond within a prescribed time thereafter. Either method of procedure is an appeal of the cause. Our Supreme Court and appellate courts have held in a number of cases that a writ of error is but one of the methods of appeal, and the word “appeal,” when used in our statutes, unless by the context and evident purpose and intent of the act is intended as designating the specific method of taking a case from a lower to a higher court designated in the statute as appealing the case, includes the method of appeal by writ of error. Luckett v. Townsend, 3 Tex. 120, 49 Am. Dec. 723; Green v. Martin, 43 Tex. 653; Magee v. Chadoin, 44 Tex. 488; Railway Co. v. Lacy, 7 Tex. Civ. App. 63, 26 S. W. 413; La. & Rio Grande Canal Co. v. Quinn, 160 S. W. 151; Trammell v. Rosen, 165 S. W. 518.

We think the word “appeal” in this contract means only the taking of the cause to the appellate court for review without reference to the method by which the appeal is taken.

The evidence raised the issue of damage as claimed by appellants, and the case should have gone to the jury under proper instructions.

It follows from these conclusions that the judgment should be reversed and the cause remanded; and it has been so ordered.

Reversed and remanded. 
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