H. E. Simms and J. J. Harrison, appellees, sued appellant, Theodore Plummer, to recover $12,900, alleged to be due appellees on account of sales of certain lands in Bee and Karnes counties, Tex., belonging to appellant, under and by virtue of sales contracts they had with Plummer. One of the contracts was dated March 31, 1909, and covered'18,720.5- acres of land known as the Lott ranch, in Bee county; and on July 10, 1909, the other contract for the salei of 640 acres known as the Word section was made. These contracts were made by Wm. Simms, on behalf of his firm, a copartnership known as Simms, Harrison & Simms. Under the terms of these contracts, Plummer had the right to cancel the same January 1, 1910, if he was not satisfied with the sales being made, and he did cancel them on that date.
The petition alleges that they sold 2,259 acres of the land under the contracts, and that there was due them $15,764.84 out of such sales at the time of the cancellation of the contracts, but that appellant was entitled to charge against them their pro rata of the expenses incurred as provided in said contracts, which expenses amounted to $5,-588.91, thus leaving a balance due appellees in the sum of $9,260.97. It is also alleged that at the time the contract was canceled purchasers of said land had given notes aggregating more than $20,000, and that after payment of expenses Simms, Harrison & Simms were to have an undivided one-half interest therein, but that such notes might be pledged by appellant to secure his indebtedness due the Lo'tts for purchase money of the land, provided that the interest of Simms, Harrison & Simms in said notes should be designated and set apart to. them as between them and the said Plummer, and kept and held by the then holders in escrow for the use and benefit of Simms, Harrison & Simms, and that both parties should join in an application to have some bank in Beeville made a depository for all of said notes, which. would hold same until the debt for which the same were pledged should be paid off, at which, time appellees were to receive their part of the notes and interest accruing thereon. It is alleged that appellant failed and refused to deliver these notes to a bank in Beeville or to appellees, but converted same to his own use and paid the Lott debt with same. Claim is further made for the sum of $2,380.60 in cash as thes plaintiffs’ share of forfeit money which it is alleged Plummer converted to his own use.
The answer admitted the contract and practically the sales made and forfeit money received, but denied conversion of the plaintiffs’ interest in the notes, claiming that, under the contract with the Lotts which was made a part of the sales contract, said notes were not to be divided until the Lott or purchase-money debt was paid, and alleged that same had not been paid. Defendant also pleaded that the Simms contract was assigned to the Simms Colonization Company, a Kansas corporation which had not complied with the laws of Texas by filing a copy of its articles of incorporation with the secretary of state of Texas and obtaining a permit to do business in Texas; that whatever service was performed was by that corporation, and that same constituted doing business in Texas, and it could not maintain this suit; further, that by reason of the assignment of said contract plaintiffs had no interest in the notes, and could not maintain the suit. Defendant alleged that the sales so made by the Simms Colonization Company amounted to $1,999.11, and that under the contract the Colonization Company was entitled to receive, exclusive of commissions to agents, $14,762.91, less advances to the said corporation and to Simms, Harrison & Simms, including advances for subdivision, operating expenses, and interest thereon, etc., which it was alleged aggregated $13,500, leaving a balance of approximately $1,261. This amount it is claimed plaintiffs could not recover because of the assignment of the contracts to the corporation.
Plummer alleged that $23,205.75 in purchasers’ notes were delivered to him, and under the terms of the Lott contract — his contract of purchase which was made a part of the sales contract — were turned over to Lott, Pittman, and others to be held as collateral security for the purchase money for the land, and admitted that, after the payment of the debts the notes were turned over to secure, and operating expenses were paid, the plaintiffs were entitled to an undivided one-half interest in the notes, subject to the pledge of the notes aforesaid, but that under the assignment Simms Colonization Company succeeded to whatever interest the plaintiffs had. Defendant admitted that thei interest of plaintiffs or Simms Colonization Company in said notes had never been turned over to them, and that no application had ever been *1039made to a Beevillt' bank to act as depository of the notes, but alleged that all of the notes werei deliyered to him, and in turn delivered to the Lotts and Pittmans in accordance with the purchase contract for the land, and alleged that the purchase-money debt had never been paid off, but merely transferred and taken up by Central Trust Company of San Antonio.
The trial before a jury resulted in a verdict and judgment for $6,964.54 in favor of H. P. Simms and J. J. Harrison. It may here be said that Wm. Simms sold his interest prior thereto to H. P. Simms.
As the main points of this controversy hinge on the proper interpretation of the contract between the parties, it is necessary to set out the following paragraphs of that document:
“(1) The second parties and each of them agree to begin at once and thoroughly and extensively' advertise and push the sale of said lands, devoting their exclusive attention thereto, and sell the same as rapidly as possible.
“(2) The lands are to be sold by the second, parties at a scale of prices to be hereafter agreed upon between the parties, in writing, and no subdivision thereof to be sold at less than the scale price mentioned thereon, and the scale price of no subdivision shall be for less than $18.00 per acre. The terms and conditions of each and every sale or contract of sale of very tract or part of said land shall be in strict comjdiance with the terms, conditions, and provisions of said contract of purchase owned by the first party, unless herein otherwise provided for sale of ten-acre tracts, a copy of which is hereto attached and marked ‘A,’ as before said. In other words, all of the terms, provisions, and conditions of said contract attached and marked ‘A,’ in so far as the same were meant and intended to obligate and control the first party in selling and contracting for sale any part of said lands, and securing releases of the parts of said land sold, shall rest against and govern and control the second party in making sales thereof, except in case of ten-acre tracts., hereinafter provided for, until all the obligations against the first party which are secured by lien on said lands, as recited in said contract marked ‘A,’ have been fully paid off and discharged, after which to be made on terms mutually agreeable to the parties hereto during the life of this contract.
“(3) That part of the first cash payment made by each purchaser of any part of said land from second parties (except ten-acre tracts) over and above the amount thereof provided to be paid by first party on the purchase price by him on said land, as specified in said contract of purchase attached and marked ‘A,’ which shall be paid to the first party, shall at once, and as soon as collected, be deposited with the bank, to be designated as the depository, to the joint credit of both parties hereto, and shall be disbursed as follows:
“(A) An amount thereof equal to $2.00 per acre on the land sold in each instance to be applied by second parties towards paying part of what they may owe their agent in such instance for making the sale, and when any purchaser pays first due of .the notes given by him on any part of the purchase price to him of the tract of land purchased by him, the agent making such sale shall be entitled to the balance of his commission, to wit, $1.00 per acre, which said sum, in which event, first party agrees and binds himself to advance and pay to said agent of second parties, provided there be no money on hand from sale of ten-acre tracts to meet second parties’ deferred obligations to agents.
“(B) An amount equal to $1.75 per acre on the land sold in such instance to be paid second parties, which second parties agree to accept in full payment for all expenses, except the following items of expense: (1) Expenses heretofore incurred by first party, or the Simms Colonization Company, to date, in survesdng and platting and cutting roads, and the moneys expended and debts incurred by the Simms Colonization Company for expenses while operating under contract of September 7, 1908, which first party agrees shall not exceed $9,000, as well as expenses to be hereafter incurred by the first party for surveying, clearing, platting, and getting lands ready to put on the market, which first party is to do when necessary; (2) the commissions due agents of second parties, not to exceed $3 per acre, except in sale of ten-acre tracts, hereinafter provided for. The items of expense enumerated in paragraphs 1 and 2 next above shall, on final settlement, be borne equally, one-half by first party, and one-half by second parties.
“(C) The balance of the first cash payment, if any, paid by each purchaser (except in case of ten-acre tracts) to be at once divided equally, one-half to first party, and one-half to second party.
“(4) At the expiration of this contract, or when all of said land has been sold, if sold before this contract expires on its face, there shall be a full and complete settlement between the parties on the following basis, which shall constitute the basis of their rights therein:
“(A) First party to receive an amount equal to $13.00 an acre for all of said land sold by second parties during the life of this contract, and in addition thereto, receive the amount due him for any moneys previously advanced by him or by the Simms Colonization Company (corporation) to second parties, including all moneys advanced and to be advanced by first party, and said Simms Colonization Company (corporation) to survey and prepare said land for sale, together with 6 per cent, interest thereon per annum from date of several advancement, and of the remainder of the proceeds of all sales made by second parties, whether the same be in the shape of notes or cash, shall belong jointly, one-half to the .first party and the other half to the second parties herein, and if any of said notes then remain pledged to secure any part of the obligations of the first party, which obligations are secured by lien on the said lands of the ‘Lott’ ranch, in keeping with the terms of the contract hereto attached, and marked ‘A,’ then the amount of the share and interest of the second parties, if any, thus pledged, shall be designated and set apart to them as between the parties thereto, and said part thus designated and set apart to second parties shall bekept and held by the said then holders thereof, in escrow, for the use and benefit of the second parties, subject alone to said pledge, it being-agreed that the said holders thereof at the time shall first exhaust the interest of the first party in any such notes thus pledged before resorting to the interest therein of the second parties, and both parties agree to join in an application to have some bank in BeeviUe made depository for all said notes, and hold same according to the terms of this agreement.
“ (B) When the debt, for which said notes may be pledged at the time of such settlement has been fully paid off and 'discharged, then that amount of said notes designated and set apart for second parties shall be delivered by the holder thereof to said second parties, and to no one else, and the second party shall have the benefit of all interest accruing on said notes thus designated and set apart to them in any such settlement, and first party shall be entitled to all interest due on the notes not set *1040apart to second parties. It is further understood that first party shall pay all interests due by him to the owners of the land on any obligations created by him under this contract with them.
“(5) The first party agrees to hereafter advance second parties $800.00 per month, beginning April 1, 1900, for and during' the next succeeding three months, payable monthly, and which sums thus hereafter advanced, together with the sum not exceeding $8,500.00 heretofore advanced by first party to second party, shall be paid to the first party, by the second parties, at San Antonio, Tex., in the following- manner: Eifty cents per acra on each acre sold, except land sold during July and August, 1909 (except ten-acre tracts), as fast as deeds are delivered, shall be deducted from the $1.75 per acre out of the first cash payment by purchasers allowed second parties for expenses, as herein-before provided and paid first party, until said $2,400.00, together with the amount not to exceed $3,500.00 heretofore advanced, with interest thereon at 7 per cent, per annum, has been fully paid off and discharged: Provided, however, such payment shall not in any case exceed an amount which will reduce the amount going for expenses to second party on any sale below $1,25 per acre. Should any such payment to first party be less than 50 cents per acre on any sale, it shall be made up to first party on subsequent sales in which there is sufficient surplus over $1.75 per acre to protect same.
“(6) It is further agreed that, if by January 1, 1910, the second parties have not sold or contracted to sell such reasonable number of acres of said land as to satisfy the first party, he shall have the option to cancel and vacate this contract. * * *
“(9) This contract shall continue and be in force until the 1st day of July, 1910, unless previously canceled and terminated under the provisions hereof, but no longer. * * *
“(12) If this contract shall become vacated and canceled at any time, then any settlement as between the parties shall be based on the number of acres of land sold under the terms of this contract by second parties to date of cancellation of same, and no liability shall rest against either party in favor of the other on account of any part of said lands which may remain unsold at the time.
“(13) Triplicate contracts of purchase shall be made by second parties, one to purchaser, one to Plummer, and keep one, until consummation of the trade. All earnest money collected on said contracts shall be immediately deposited with a bank- or trust company in San Antonio, Tex., to be agreed upon, in trust for all parties concerned in this contract. Should any prospective purchaser fail to complete his contract, all earnest money held to secure said contract upon his failure shall be divided into, three parts, one-third (%) to the agent making such sale, one-third (%) each to the first and second parties, and in such proportions at once disbursed by the parties.
“(14) It is agreed and understood that this contract shall cover all sales and contracts of sales made from said eighteen thousand seven hundred and twenty and 5-10 acre tract before the signing of this agreement, and when this agreement shall have been executed all earnest money, cash, and notes held by second parties shall be deposited in accordance with terms of this agreement as to lands to be hereafter sold.
“(15) Expense of maintaining an office at S'an Antonio shall nob be chargeable as an item of expense on final settlement had between parties herein.
“(16) No obligation shall, under any circumstances, rest upon the^ first party, or any liability arise against him, for any act or thing done by the second parties, outside of the scope of this contract, and it is distinctly understood between these contracting parties, and all sub-agents acting under the second parties shall take notice of the fact, that the party of the first part shall not be liable to second parties, nor to any other person in any event, for commissions on the sale or proposed sales of any of said lands or for any expenses o-r other claims or demands whatsoever, except as herein provided, and all contracts made between second parties and any other persons shall be made to conform to the terms and conditions of this conti'act so far as the first party is concerned.
“(17) Second party agrees to operate and advertise for sale said land under the trade ñame of ‘Simms Colonization Company,’ a co-partnership composed of second parties.
“(18) This contract shall not be varied by either party, except in writing, signed by them. This contract is made in lieu of, and to take the place of, said contract dated September 17, 190S, and supplement thereto of January 28, 1909.
“(19) The death or disability of W. M. Sims shall terminate this contract at once.
“(20) Each party hereto shall have a lien on all interest of the other party in this contract, and all proceeds arising therefrom, to satisfy any indebtedness due by one to the other undgr the terms hereof.”
The seventh clause of the contract made June 10, 1909, in regard to the sale of the Word section of .640 acres is as follows:
“(7) First party shall have the option to cancel this contract on January 1, 1910, provided second parties have not, previous to said date, sold a quantity of said land sufficient to satisfy first party, and, in case of such cancellation, a settlement to he then made between the parties on the basis of the terms hereof ,as to all said land sold by second parties prior to said cancellation, and further than such a settlement no liability to rest against either party in favor of the other on account of said cancellation.”
There was no error in the court’s refusal to charge the jury to find for the defendant. The contract provides that the proceeds of sales of the land in the shape of notes shall be placed in some bank in B'eeville, to be held in trust; and, while Plummer is given the right to place said notes with the Lotts as collateral security for the purchase money of the land, he is not given the right to dispose of appellee’s interest therein. Each party having an interest in these notes, the mere privilege is extended appellant to place them as collateral security. He is not given the right to sell appellees’ interest therein, and when he does sell same and pay his own debt with that interest in the notes he converts that interest to his own use and benefit. Instead of preserving tbe interest of appel-lees in the notes, appellant sold same or applied the whole of the notes in settlement of his own debt, which is a final disposition of the same. This assignment is overruled. Russell v. Deutschman, 100 S. W. 1164; Oliver v. Piatt, 44 U. S. (3 How.) 401, 11 L. Ed. 622; S. A. Nat. Bank v. Blocker et al., 77 Tex. 73, 13 S. W. 961; Hardie v. Wright, 83 Tex. 345, 18 S. W. 615; Marberry v. Bank, 6 Tex. Civ. App. 607, 26 S. W. 215.
The evidence shows that appellant disposed of all the notes received, and it is really immaterial whether the original purchase-money debt for the land was paid or merely *1041transferred to the Central Trust Company, because Plummer said himself:
“The sale of the land was so slow money was not provided to meet the interest and make payment on my notes as they became due; therefore I was obliged to sell these notes as soon as they became marketable to meet the interest that was due and past due on my notes, and the money was applied and credited on my notes.”
Subdivision 15 of the contract provided that the Lotts should keep all notes until Plummer had paid his obligation to them in full, and, while this would give the Lotts the right to hold the proceeds until their debt was paid, and appellees would be bound by that as a part of their sales contract, it would not give appellant the right to sell appellees’ interest in said notes, nor would it relieve him from the duty of accounting therefor in a final settlement after he had sold them.
|;1, 2] Clauses 3 and 4 of the contract provide for the distribution of the money, etc., and a full and complete settlement in case the contract of sale runs its full term and is carried out. But a provision was also incorporated in paragraph 12 giving appellant the right to cancel the contract January 1, 1910, and that right he exercised; consequently the question arises as to what the intention of the parties was as to how the items of expense were to be divided in the event of such cancellation. Testimony explaining this intention would not vary the provisions of paragraphs on subdivision 1, 2, and 3 of section B of the .third paragraph of the contract, because those subdivisions deal with a completed contract where its terms have been carried out by the sale of the land or the running the full term of the contract. The question here at issue was: Did the parties intend by paragraph 12 of the contract to provide that in the event the contract was canceled that the expenses referred to in paragraph 3 should he prorated on the basis of the number of acres sold? Paragraph 3 says that on final settlement these expenses shall be borne equally, and that is where the contract expires by its terms or is fulfilled by the sale of all the land. Paragraph 12 must have meant a different method of settlement than in 3, because, if such were not Its purpose, it would be useless. It occurs to us that the meaning of paragraph 12 is that any settlement growing out of a cancellation of the contract should be based on the number of acres sold; but this meaning cannot be said to be so certain as to preclude the necessity of submitting it to the jury to determine what the intention of the parties were as to such expenses. The objections, however, to the testimony were not well taken, because it was merely for the purpose of explaining what was meant by the parties when that clause was put in the contract, meaning of the writing not being certain. This is not varying the terms of paragraphs 3 and 4, because they deal with a contract whose terms have been fulfilled, and. this paragraph deals with another subject entirely. And, where a. part of a contract is ambiguous, it is not error for the court to submit to the jury to determine what the intention of the parties was. The court did not err in submitting that matter to the jury, and the second assignment is overruled. Arlington Heights Realty Co. v. Light Co., 160 S. W. 1109; Railway v. Anderson, 36 Tex. Civ. App. 121, 81 S. W. 781; Nalle v. McKnight, 126 S. W. 902; Feigelson v. Brown, 126 S. W. 17; Ginnuth v. Blake Co., 28 S. W. 828.
The third assignment is disposed of by what we have already said, and the same is overruled.
The court did not err in refusing appellant’s special charge No. 5, because the settlements provided in paragraphs 3 and 4 had reference to the completion of the contract or the expiration of the same under the time limit. The contract was canceled, and it therefore became necessary to adjust the rights of the parties as provided in the twelfth paragraph. The fourth assignment is overruled.
The fifth to seventh assignments, both inclusive, relate to the introduction of testimony as to the intention of the parties or meaning of clause 12, and they are overruled for the reasons already given. If it was not error to submit that issue to the jury, - certainly it was not error to admit the evidence on that issue.
[3] The eighth assignment complains that the evidence does not show that the contract for the Word section was canceled before its expiration by its own terms, and therefore there is no basis for prorating the expenses, advances, etc., on account of that land. The plaintiff’s petition charged that both contracts were canceled January 1, 1910, and defendant’s answer does not deny this. Further, appellant, answering paragraph 5 of the petition, denies that at the time of the cancellation of said contracts aforesaid Simms, Harrison & Simms had made sales of said land, and says the sales were made by the Simms Colonization Company. It seems to have been undisputed that both contracts were canceled. Where the petition charges that both contracts were canceled, and this is not denied, proof on that matter is entirely unnecessary. The assignment is overruled.
[4] The contract (thirteenth clause) provided that forfeit money on sales that were not completed should be divided, one-third to subagent making the sale, and one-third each to the contracting parties (appellant and appellees). Appellant requested a charge to the effect that in determining the number of acres sold the jury should take into account the number of acres contracted to he sold upon which earnest money was collected. . Appellant received his one-third of that money, the distribution of which was governed by said thirteenth paragraph, and, of course, he *1042still had his land. In the event of snch forfeit money, the parties had fixed their own measure of adjustment hy providing for the distribution of the forfeit money. The ninth assignment is overruled; and the tenth and eleventh assignments, being without merit, are also overruled.
[5] The twelfth assignment assails the action of the court in refusing to give appellant’s requested special charge No. 4, to the effect that if Simms, Harrison & Simms had assigned their contract to the Simms Colonization Company, a Kansas corporation, before the service was performed, and that corporation accepted the contract and undertook to carry it out, and it had not obtained a permit to do business in Texas, to find for the defendant. There was what was known as the Simms Colonization Company, a corporation chartered under the laws of Missouri, of which appellant was president. In making the contract with appellees, or with Win. Simms, appellant stipulated that they were to do business under the name of Simms Colonization Company, and business was done under that name. The appellees all testified positively that the contract was not assigned to the Simms Colonization Company of Kansas, hut stated that they did organize said corporation, and expected to- pay for their stock therein out of what they realized out of this' sales contract. They further say that the corporation never undertook to carry out the contract of sale at all. These parties, together with J. J. Harrison’s wife and D. F. Bowman, owned all of the stock in the corporation. This corporation was not organized until about October, 1909, and Harrison said:
“We expected to go ahead, after the sale of this land was over, with the corporation. That is what the corporation was intended for, to get another piece of land, buy it, and go ahead and sell it. The contract made with Mr. Tlum-mer provides that Simms, Harrison & Simms were to devote their exclusive time and attention to the sale of the Lott lands.”
In paragraph 17 it is provided that the land should be advertised for sale under the name of Simms Colonization Company, and paragraph 19 provides that the death or disability of W. M. Simms should terminate the contract. It is true some of the correspondence with appellant was on the letter heads of, and signed by, the corporation, but appellant says he made no contract with the corporation and did not recognize the same. Some of the checks given were indorsed hy Simms, Harrison & Simms to the corporation. This, however, is in line with their uncontra-dicted statements that they were paying for their stock out of what they made out of the sale of the Lott lands. It is absolutely immaterial, though, what they did with the money they made out of the Lott lands, so long as the corporation itself was not doing business in Texas in handling this land. In view of appellees’ positive testimony that they did not assign the contract, and the further requirement of the contract that Simms, Harrison & Simms do business in advertising these lands under the trade-name of Simms Colonization Company, and in the absence of any evidence of an assignment of a positive nature, we do not think the charge would have been justified. Furthermore, the auditor’s report was not excepted to because it improperly states an account between appellant and Simms, Harrison & Simms, or on the ground that there was no money due and owing that firm because of the alleged assignment of the contract. The assignment is overruled. St. Louis, etc., Ry. Co. v. Freedman, 18 Tex. Civ. App. 553, 46 S. W. 101; Galveston, etc., Ry. Co. v. Noelke, 110 S. W. 82; El Paso, etc., Ry. Co. v. Harris & Liebman, 110 S. W. 145.
On the whole, it appears that the case was fully developed and fairly tried, and we are not disposed to disturb the judgment, and it is in all things affirmed.
<£=^For other oases see same topic and KEY-NUMBER- in. all Key-Numbered Digests and Indexes
<@x^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and .Indexes