author: SMITH, Justice. GREENHILL, Justice GRIFFIN, Justice

text:
    KEY WESTERN LIFE INSURANCE COMPANY, Appellant, v. STATE BOARD OF INSURANCE et al., Appellees.
    No. A-8018.
    Supreme Court of Texas.
    Oct. 3, 1961.
    Rehearing Denied Nov. 29, 1961.

      Joe S. Moore, Graves, Dougherty & Gee, Austin, for appellant.
    Will Wilson, Atty. Gen., Fred B. Wer-kenthin, Ray V. Loftin, Jr., Asst. Attys. Gen., for appellees.
   SMITH, Justice.

This is a direct appeal from a decision of the District Court of Travis County affirming an action of the Commissioner of Insurance and the State Board of Insurance. The appeal is authorized by Section 3-b of Article S of the Texas Constitution, Vernon’s Ann.St.; Article 1738a, Vernon’s Civil Statutes, and Rule 499-a, Texas Rules of Civil Procedure.

Appellant is a life insurance company with home offices in Abilene. Appellant’s Policy Form Pic No. 1 was approved by the Commissioner of Insurance on August 27, 1957, in accordance with the provisions of Article 3.42 of the Insurance Code, V.A. T.S., and appellant immediately began offering the policy to the public.

In March 1958, the Commissioner of Insurance initiated a series of hearings and inquiries regarding Policy Form Pic No. 1 which lasted until March 19, 1959, when the Commissioner withdrew approval of the policy form in Office Order 3675. The Commissioner gave several reasons for his action, including: that the premium charged was exceedingly high for the benefits provided in the contract and can be justified only by promising high returns from the investments provided for in Option 2, infra; in view of certain policy provisions and the evidence and testimony presented at the public hearing, the Commissioner was of the opinion that the. policy form contained provisions which “encouraged misrepresentation”, and were “unjust, unfair, inequitable, misleading, deceptive, or contrary to law and the public policy of this state”. Furthermore, the Commissioner found that the policy form violates Rule 20 of the Board’s Official Order No. 957, dated May 26, 1958; the policy form is not a participating insurance policy authorized by the laws of this state; a “Guaranteed Interim Endowment Option” obligated Key Western to engage in the investment, trust, banking, or other similar business on behalf of the policyholders, and the company was acting outside its charter powers; “the Guaranteed Interim Endowment” provided by the policy was in reality the return of a- portion of the premium paid. In view of all this, the Commissioner found that appellant’s policy Form Pic No. 1, “By its very terms and provisions, and within the writ; ten contract itself, encourages misrepresentation, is unjust, unfair, inequitable, deceptive and contrary to the public policy of this state, and is contrary to Rule 20' of Official Board Order No. 957 of the State Board of Insurance, and Article 21.21, Texas Insurance Code, and obligates Key Western Life Insurance Company to engage in a business and function beyond its charter powers.” The Commissioner then found that “these findings and conclusions, taken separately or together, subject the entire policy to disapproval under the provisions of Section (f) of Article 3.42, Texas Insurance Code. The Commissioner specifically finds that each of the separate conclusions is sufficient for disapproval of the policy under Article 3.42.”

This order was affirmed by the State Board of Insurance Order No. 1557, dated March 28, 1959. On March 31, 1959, appellant timely filed this suit in the 98th District Court of Travis County to have reviewed and set aside the action of the Commissioner of Insurance and the State Board of Insurance. The administrative order was attacked on grounds which included both a challenge of the constitutionality of the statute under which the action was taken (Article 3.42 of the Insurance Code) and assertions that the order withdrawing approval of the policy form was invalid for other than constitutional reasons. A permanent injunction was sought. After a trial before the court without a jury, judgment was entered denying all relief sought by plaintiff, the court reciting in its judgment “that the orders complained of are in all things supported by substantial evidence”. This direct appeal followed.

Policy Form Pic No. 1 embodies a plan offered by Key Western in which insurance benefits and investment opportunities are offered in one policy. Some agents of Key Western were equipped with an audiovisual kit which presented the policy provisions in graphic form with discussions of the value of the policy as an investment set out in optimistic terms, to say the least. An alternative oral presentation was substantially the same. All policyholders, regardless of age, have the same program which features the same cost and offers the same benefits to all policyholders, except that benefits above age 35 are reduced. All policyholders pay $365 per year — -(“a dollar a day”).

Policy Form Pic No. 1 contains five “benefits” provided by the policy; three are designated as “Death Benefits”, and two as “Endowment Benefits”. The death benefits at age 35 are payments to the beneficiary in the following amounts: (A) $7,-500 payable on death of the insured; (B) $2,000 at the end of 15 years from the date of insurance, and (C) $100 on each contract anniversary date following the death of the insured. The returns characterized as “endowment benefits” are payable to the insured, if living, and are characterized by the contract as: (A) a “guaranteed annual interim endowment” whereby the company promises to pay $50 when the first year’s premiums have been paid and $100 each year thereafter when the succeeding years’ premiums have been paid; and (B) payment a “maturity endowment” whereby Key Western promises to pay a single payment of $2,000 on the maturity date of the contract. Under this “guaranteed annual interim endowment” the policy provides that “the person controlling this contract may elect in writing on forms satisfactory to the Company to have the proceeds thereof applied according to one of the following options:

“1. Toward payment of the Annual Premium due if the balance of such premiums is paid.
“2. May authorize the Company to transmit the proceeds thereof with reasonable promptness to a registered or authorized security dealer, or to the agent of the underwriter of a mutual fund designated by the person controlling this Contract, to purchase shares or fractional shares or both at the current offering price for the account of the Insured in any mutual fund which the person controlling this Contract may designate and which is registered in the state of the Insured’s residence.”

According to the evidence, no policyholder has ever exercised Option 1. Option 2 is at the heart of this case. The actuary who designed the policy testified that Option 2 is what makes the Guaranteed Annual Interim Endowment “attractive”; that he doubted whether the company could sell the policy to any extent without Option 2; and that the policy was “designed to be sold on the merits of (Option 2)”. Since comparable insurance benefits can be obtained for approximately $200, policyholders electing Option 2 in effect pay the company a fee of $115 the first year and $65 per year thereafter to simply mail the policyholder’s “guaranteed annual interim endowment” ($50 the first year, $100 in subsequent years), to the investment company.

Among other points presented, the appellant contends that appeals to the District Court from orders of the State Board of Insurance and the Commissioner of Insurance are to be determined by the preponderance of the evidence rule in a trial de novo of the issues heard and decided by the Board rather than being determined by the substantial evidence rule as was done in this case. We have concluded to sustain this point under the facts of this case. Such action requires that the judgment of the trial court be reversed and the cause remanded to that court for a new trial. Before disposing of this point, however, we shall pass upon the points which challenge the authority of the State Board of Insurance and the Commissioner to withdraw approval of the policy form issued by the appellant.

Appellant’s first point of error is that the provision of Article 3.42(c) of the Insurance Code which authorizes the Board of Insurance Commissioners to withdraw approval of a policy form “at any time” is unconstitutional. Appellant insists that since the power to withdraw approval is not mentioned in the title of the 1957 amendment to Article 3.42, then Article III, Section 35, of the Texas Constitution has been violated.

The title of Senate Bill 438 (55th Legislature, Regular Session, Acts of 1957, Ch. 501, p. 1463), by which Article 3.42 was amended, is as follows:

“An Act to amend Articles 3.42 and 3.43 of the Insurance Code (Acts 1951, 52nd Legislature, Chapter 491, as amended) relating to the filing with and approval by the Board of Insurance Commissioners of all policy forms, endorsements, and riders issued by any life, accident, health, accident and health or hospitalization insurance company, doing business in this state; prescribing , the method of filing and providing for its approval within thirty days unless disapproved or approved within such time by written order of the Board; providing [for] specific grounds for disapproval; providing for judicial review of any such orders; repealing all laws in conflict herewith; providing for a sev-erability and saving clause; and declaring an emergency.”

Section 35 helps assure that our legislators will not approve legislation containing unnoticed and unwanted provisions, even though in the press and din of legislative affairs it is not always possible for them to examine all the parts of each proposed bill. Holman v. Cowden & Sutherland, Tex.Civ.App., 158 S.W. 571, wr. ref. Gulf Insurance Co. v. James, 143 Tex. 424, 185 S.W.2d 966. Appellant maintains that the above title “descends into details, purporting to reveal the substance of the changes wrought by the amendment, but gives no hint of other changes incorporated in the body of the bill.” Appellant cites cases which deal with various ways in which Section 35 may be violated, including: new and independent subjects in an amendatory bill; captions which conceal the true purpose of a statute or do not reasonably apprise the legislator of the scope of the bill so as to prevent fraud or surprise; and provisions in the caption having no relevancy to the principal object of the Act. See Arnold v. Leonard, 114 Tex. 535, 273 S.W. 799; Ward Cattle & Pasture Co. v. Carpenter, 109 Tex. 103, 105, 200 S.W. 521; Board of Water Engineers v. City of San Antonio, 155 Tex. 111, 283 S.W.2d 722; Hamilton v. St. Louis, S. F. & T. Ry. Co., 115 Tex. 455, 283 S.W. 485. However, the present case is more closely analogous to Board of Ins. Com’rs v. Sproles Motor Freight Lines, Tex.Civ.App., 94 S.W.2d 769, 772, wr. ref. There the Court of Civil Appeals considered an attack on a statute giving the then Board of Insurance Commissioners the authority to fix premium rates for automobile insurance. The title of that Act (Chapter 253, Acts 40th Legislature, 1927) read: “An Act to authorize the Commissioner of Insurance of the State of Texas to fix the rate of automobile insurance, providing a penalty for violation of the provisions thereof, and declaring an emergency.” The Act itself provided, among other things, that “the Commissioner may withdraw * * * approval of any rate * * * if in his judgment such rate is unjust, unreasonable or inadequate to provide for the obligations assumed by the insurer.” Attack was made, as here, that the statute violated Article 3, Section 35, of the Constitution, because, among other reasons, “its title does not contain the subject-matter relative thereto.” The principal objection was that there was no provision in the title authorizing the Board to change the rates after once having approved them. The court considered the appropriate requirements of a title, and held “the subject of the proposed legislation is sufficiently stated in the title to the act.” Faced with a similar problem, we hold that the title of Article 3.42, supra, meets the constitutional requirements.

Next, appellant contends that the Commissioner erred in disapproving Option 2 because the Commissioner’s interpretation of Article 3.42(b) was too literal. With this contention we do not agree. Article 3.42(b) is as follows:

“No application form which is required to be or is attached to the policy, contract or certificate, and no rider or endorsement to be attached to, printed upon or used in connection with any policy, contract or certificate described in Paragraph (a) of this Article shall be delivered, issued or used in this state by any insurer described in Paragraph (a) of this Article unless the form of said application, rider or endorsement has been filed with the Board of Insurance Commissioners and approved by said Board as provided in Paragraph (c) of this Article. Provided, however, that this Article shall not apply to riders or endorsements which relate to the manner of distribution of benefits or to the reservation of rights and benefits under such policies, contracts and certificates, and which are used at the request of the holder of the policy, contract or certificate(Emphasis added.)

The Commissioner obviously has not viewed Option 2, supra, as a' “rider or endorsement” within the meaning of the above Article, but rather considers Option 2 a part of the policy itself. Appellant argues that the same result achieved by Option 2 could have been achieved by the policyholder executing an assignment to a securities dealer, or the same provisions could have been attached to a separate piece of paper and would then have been without the control of the Commissioner. The option is neither a rider nor an endorsement in the literal sense, and the Commissioner chose to interpret the statute in the literal sense. The Commissioner did not err in so doing. The provision was actually, literally, and physically a part of the policy itself. The Commissioner may well have reasoned that the presence of the option in the body of the policy was probably instrumental in obtaining 100 per cent policyholder selection of Option 2 if for no other reason than it lulled the policyholder into acquiescence in the key option by its very physical presence in the body of the policy rather than emphasizing its presence by its being separate and apart as a rider.

In its fourth point of error, appellant asserts: “Article 3.42, Texas Insurance Code, is so vague and grants such sweeping powers, unbridled by any standard or guides, that it results in an unconstitutional delegation of authority by the Legislature to the Board of Insurance.” Appellant points out that action by the Board under the “encourages misrepresentation” provision necessarily means “a matter of opinion”, citing Railroad Commission v. Shell Oil Company, 139 Tex. 66, 161 S.W.2d 1022, 1025:

“ * * * It is a well-established principle of constitutional law that any statute or ordinance regulating the conduct of a lawful business or industry and authorizing the granting or withholding of licenses or permits as the designated officials arbitrarily choose, without setting forth any guide or standard to govern such officials in distinguishing between individuals entitled to such permits or licenses and those not so entitled, is unconstitutional and void.”

The present case does not fall within the prohibition of the Shell case, supra. We hold that Article 3.42 in this regard is constitutional. The present case is more closely analogous to Jordan v. State Board of Insurance, Tex., 334 S.W.2d 278, 279. That case upheld the standard “not worthy of the public confidence”. In upholding such standard, the court cited Administrative Law Treatise, par. 2.03, by Professor Davis, wherein there were given numerous illustrations of phrases employing general terms which have been held sufficient as administrative standards, and we quote therefrom, as follows:

“(T)he standards the Supreme Court (of the United States) has held adequate include ‘just and reasonable,’ ‘public interest,’ ‘unreasonable obstruction to navigation,’ ‘reciprocally unequal and unreasonable,’ ‘public convenience, interest, or necessity,’ ‘tea of inferior quality,’ ‘unfair methods of competition,’ ‘reasonable variations,’ ‘unduly or unnecessarily complicate the structure’ of a holding company system or ‘unfairly or inequitably distribute voting power among security hold•ers.’ ”

The standard “encourage misrepresentation” appears equally as definite as the standard “unworthy of the public confidence”, as well as the standards cited. The true test is whether the idea embodied in the phrase is reasonably clear. The phrase meets that test.

We come now to a consideration of appellant’s contention that appeals to the district court from orders of the State Board of Insurance and the Commissioner of Insurance are to be determined by the preponderance of the evidence rule in a trial de novo and not by the substantial evidence rule. Appellant insists that the judicial review statutes are constitutional, and that the trial court erred in testing the orders complained of by the substantial evidence rule, contrary to the express provisions of the applicable judicial review statutes. The pertinent statutes are:

Article 3.42(g) provides:

“Appeals from any order of the Board of Insurance Commissioners issued under this Article may be taken to the District Court of Travis County, Texas, in accordance with Article 21.44 of Sub-chapter F of this Insurance Code, or any amendments thereof.”

Article 21.44 of Subchapter F provides, in part, that any party dissatisfied with any decision of the Board of Insurance Commissioners “may file a petition setting forth the particular objections to such decisions” in the District Court of Travis County, Texas.

The statute sets forth a standard of review as follows:

“The action shall not be limited to questions of law and the substantial evidence rule shall not apply, but such action shall be tried and determined upon a trial de novo to the same extent as now provided for in the case of an appeal from the Justice Court to the County Court.” (Emphasis added.)

Article 1.04(f) of the Insurance Code is partly as follows:

“If any insurance company or other party at interest be dissatisfied with any decision, regulation, order, rate, rule, act or administrative ruling adopted by the State Board of Insurance, such dissatisfied company or party at interest after failing to get relief from the State Board of Insurance, may file a petition setting forth the particular objection to such decision, regulation, order, rate, rule, act or administrative ruling, or to either or all of them, in the District Court of Travis County, Texas, and not elsewhere, against the State Board of Insurance as defendant. Said action shall have precedence over all other causes on the docket of differ7 ent nature. The action shall not be limited to questions of law and the substantial evidence rule shall not apply, but such action shall be tried and determined upon a trial de novo to the same extent as now provided for in the case of an appeal from the Justice Court to the County Court." (Emphasis added.)

It is clear that the district court has not afforded a trial de novo as provided by the above statutes, but to the contrary has reviewed the Board’s ruling according to the “substantial evidence rule” and held that Key Western’s attack on the ruling failed. The Board’s Order No. 7635 concludes:

“Therefore, all Premises Considered, it appears to the Commissioner of Insurance that Policy Form Pic No. 1 of the Keywestern Life Insurance Company, by its very terms and provisions, and within the written contract itself, encourages misrepresentation, is unjust, unfair, inequitable, misleading, deceptive and contrary to the public policy of this state, and is contrary to Rule 20 of Official Order No. 957 of the State Board of Insurance, and Article 21.21, Texas Insurance Code, and obligates Keywestern Life Insurance Company to engage in a business and function beyond its charter powers. These findings and conclusions, taken separately or together, subject the entire policy to disapproval under the provisions of Article 3.42, Texas Insurance Code. * * * ”

The district court Dy reviewing the ruling of the Board under the substantial evidence rule has in effect found the applicable review statutes in this case to be unconstitutional in so far as they provide for “preponderance of the evidence” review. In other words, the district court has held, in effect, that to afford Key Western a trial de novo, under the preponderance of the evidence rule, the court trespasses on that area of our government reserved to the legislature, thus violating Article 2, Section 1, of the Texas 'Constitution. We hold that a review by the courts of the action taken by the Board of Insurance under Article 3.42, supra-, in this case may constitutionally be had under the “preponderance of the evidence” standard. The district court was without authority to substitute a nonstatutory standard for that prescribed by the statute. Key Western was entitled to a review by trial de novo. Review by trial de novo has all the attributes of an original action in the reviewing court. The trial court must weigh the evidence by the “preponderance of the evidence” standard. Trial de novo has been defined as “A new trial or retrial had in an appellate court in which the whole case is gone into as if no trial whatever had been had in the court below.” See Black’s Law Dictionary; Ex parte Morales,, Tex.Cr.App., 53 S.W. 107, 108. Trial de novo is not an “appeal”, but is a new and independent action. See Corporation Commission of Arizona v. People’s Freight Line, 1936, 41 Ariz. 158, 16 P.2d 420; Investors Syndicate of America v. Hughes, 1941, 378 Ill. 413, 38 N.E.2d 754.

The maximum scope of judicial review that may be provided for the ruling of an administrative agency is a problem that has vexed the courts of this and other jurisdictions numerous times. There are numerous cases in Texas and other jurisdictions where the courts have applied the substantial evidence rule to the review of administrative decisions where the particular statute involved in those cases apparently called for a complete redetermination of the issue. See for example, Fire Department of City of Fort Worth v. City of Ft. Worth, 1949, 147 Tex. 505, 217 S.W.2d 664; Bradley v. Texas Liquor Control Board, Tex.Civ.App.1937, 108 S.W.2d 300, no writ history; Jones v. Marsh, 1949, 148 Tex. 362, 224 S.W.2d 198; Appeal of Fredericks, 1938, 285 Mich. 262, 280 N.W. 464; City of Jackson v. McLeod, 1946, 199 Miss. 676, 24 So.2d 319.

The Texas Constitution provides that the powers of govenxment shall he divided into three distinct departments: Legislative, Executive, and Judicial, and that except in instances expressly permitted by the Constitution, “no person, or collection of persons, being of one of these departments, shall exercise any power properly attached to either of the others, * * Article 2, Sec. 1, Texas Constitution. Under this Section of Article 2 (or similar provisions contained in the constitutions of other states) provisions in Acts of legislatures calling for the review of legislative determinations or executive rulings by a trial de novo in a judicial tribunal have been declared invalid as violative of the constitutional doctrine of separation of powers. A power or authority which cannot be lawfully delegated directly to the judiciary by the Legislature because of the constitutional provision cannot be conferred upon the courts by means of a de novo trial after an administrative hearing. Davis v. City of Lubbock, Tex.1959, 326 S.W.2d 699; Cromwell v. Jackson, 1947, 188 Md. 8, 52 A.2d 79; Mississippi Insurance Commission v. Insurance Co. of North America, 1948, 203 Miss. 533, 36 So.2d 165.

“The criterion used (by the courts in de-tei'mining the constitutionality of the review statute) is whether the reviewing court is required to exercise a function that is deemed nonjudicial, * * *. The perplexing problem is the determination of what is judicial and what is nonjudicial.” 4 Davis, Administrative Law Treatise, § 29.10 (1958). Many definitions of legislative functions and judicial functions have been set forth by various courts. The Supreme Court of the United States stated:

“A judicial inquiry investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation, on the other hand, looks to the future and changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power.” Prentis v. Atlantic Coast Line, 211 U.S. 210, 29 S.Ct. 67, 69, S3 L.Ed. 150.

In 73 C.J.S. Public Administrative Bodies and Procedure § 8, p. 306, it is said:

“It has been stated that the nature of the final act and the character of the process and operation, rather than the general character of the authority exercised, is determinative. The action of an administrative body or officer is adjudicatory in character if it is particular and immediate, rather than, as in the case of legislative or rule-making action, general and future in effect.”

These definitions aid us in reaching an answer to the specific question facing this Court: Is the determination that the policy form contains' provisions which “encourage misrepresentation or are unjust, unfair, inequitable, * * * ” a “judicial function” or a “legislative function” ?

Appellee urges that the determination made by the Board in the instant case is a legislative function in which the Board utilizes “legislative discretion”. With this contention we do not agree. The instant case is not controlled, as claimed by appel-lee, by the holding of this Court in the case of Davis v. City of Lubbock, Tex.1959, 326 S.W.2d 699. Appellee fails to appreciate that there is a distinction between the types of decisions rendered by different administrative agencies. Some agencies perform judicial or quasi-judicial functions; others exercise powers which are essentially legislative. In re Harmon, 1958, 52 Wash.2d 118, 323 P.2d 653.

Article 3.42(f) and the standard therein expressed are to be distinguished from the statute and applicable standard which were before this Court in the Davis v. City of Lubbock case, supra. In that case this Court held that Section 17 of the Urban Renewal Act which provided for a review by trial de novo of any order or other act of the city or other agency was unconstitutional as a violation of Article 2, Section 1, of the Constitution of Texas. In reaching this conclusion the court said:

“ * * * it is quite clear that a decision that it [a particular area] is a slum area under (3) of the definition is a decision of a question of pure public policy.”
“A decision or conclusion by the agency that a particular area is a ‘Slum Area’ or a ‘Blighted Area’ is thus made to rest upon a finding involving legislative discretion. A de novo judicial review of such a decision would clearly involve the exercise by the courts of nonjudicial powers.” (Emphasis added.) 326 S.W.2d 699, 714.

Section (3) of the definition referred to by the court reads in part: “which is detrimental to the public health, safety, morals or welfare of the city.” Section 4(h), Article 1269Z-3, Vernon’s Annotated Texas Statutes.

Under Article 3.42(f) of the Insurance Code the Board of Insurance Commissioners may disapprove or withdraw previous approval of the policy form:

“ * * * if, and only if,
“(1) It is in any respect in violation of or does not comply with this code.
“(2) It contains provisions which en- ' courage misrepresentation or are unjust, unfair, inequitable, misleading, ■ deceptive or contrary to law or to the public policy of this state.
“(3) It has any title, heading, or other indication of its provisions which is misleading.” (Emphasis added.)

“The board can exercise only such authority as is conferred upon it by law in clear and unmistakable terms and the same will not be construed as being conferred by implication.” Board of Insurance Commissioners v. Guardian Life Ins. Co., Tex.Com.App.1944, 142 Tex. 630, 180 S.W.2d 906, 908. See also Humble Oil & Refining Co. v. Railroad Commission of Texas, 133 Tex. 330, 128 S.W.2d 9; Commercial Standard Ins. Co. v. Board of Insurance Commissioners, Tex.Civ.App., 34 S.W.2d 343, wr. ref. Therefore, the Board in the instant case could exercise no more discretion than the terms of the statute clearly provide, and it appears from a literal reading of the statute that the Board was not to have broad legislative discretion. The Board of Insurance Commissioners is empowered to disapprove a form for certain specific reasons only and may not dictate to the insurance companies the particular form to be used. Its only duty is to determine whether the form of the policy submitted for its approval meets the standards prescribed by the statute. The action of the Board of Insurance Commissioners “is particular and immediate, rather than, as in the case of legislative or rule-making action, general and future in-effect.”

The dissimilarity between the standard set forth in Article 3.42(f) and the standard before the Court in the Davis case, supra, is readily apparent. The Board of Insurance Commissioners under Article 3.42(f) does not make a determination “of a question of pure public policy,” as in the Davis case, supra [326 S.W.2d 714], The Board may disapprove a form “if, and only if” it violates the provisions of the statute. Under the provisions of the statute, the State Board of Insurance is also-empowered to disapprove or withdraw approval of a policy form if the form is contrary to the public policy of the state. It is to be noted that this particular provision provides no standard by which public policy is to be measured. The absence of a standard or guide to govern the Commissioner of Insurance or the State Board of Insurance in the determination of what type of policy form would be contrary to public policy would leave it to the unbridled discretion of the Commissioner and the Board to disapprove in the first instance or withdraw previous approval of a policy form. This would leave the right to enter into insurance contracts subject to the arbitrary discretion of the Commissioner and the State Board of Insurance. This of itself would render the statute void. See Railroad Commission v. Shell Oil Company, supra. However, if possible, it is the duty of the courts to construe a statute in such a way as to avoid repugnancy to the Constitution. This may be done by holding that the “public policy” of which the statute speaks is defined in the statute itself. It is the right of the public to be free of insurance contracts which contain “provisions which encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive * * * Thus, the determination made by the Board of Insurance Commissioners under Article 3.42(f) is clearly a quasi-judicial function. Such determination is reviewable on appeal by a trial de novo under the preponderance of the evidence rule. This is particularly made clear when we consider that the court, the trier of the facts, in determining whether or not the policy “encourages misrepresentation” is not limited to a consideration of the words and phrases of the policy alone, but may consider outside, relevant factors, as herein pointed out, in its evaluation of these words and phrases.

The Supreme Court of Minnesota, in an early case dealing with the problem of determining whether a given function was “legislative” or “judicial”, said:

“As a general proposition of law the Legislature cannot delegate legislative powers to the judiciary or require the judges of the various courts of the state to do any acts which are not in their nature judicial. Kilbourn v. Thompson, 103 U.S. 168, 26 L.Ed. 377, and cases there cited; * * * But it is not always easy to discover the line which marks the distinction between executive, judicial, and legislative functions, and when duties of an ambiguous character are imposed upon a judicial officer any doubt will be resolved in favor of the validity of the statute, and the powers held to be judicial. Foreman v. Board County Com’rs, 64 Minn. 371, 67 N.W. 207. In many instances the acts which are to be done require the performance of functions, some of which are judicial and others legislative or executive, and these are often so interwoven and connected that they cannot readily be separated and distinguished. When this is the case the court will not attempt to unravel the combination, but will sustain the act against the constitutional objection.” State ex rel. Patterson v. Bates, 190S, 96 Minn. 110, 104 N.W. 709, 711.

Appellee also relies upon the case of Farmers and Merchants Ins. Co. v. State Board of Ins., Tex.Civ.App., 321 S.W.2d 354, 357, wr. ref. n. r. e. In that case the Court of Civil Appeals considered a statute which authorized a trial de novo if an appellant were “dissatisfied with any order of the Board respecting its application [for permission to write insurance for less than the maximum rate prescribed by the Board of Insurance]”. The court in holding the statute unconstitutional cited the case of Southern Canal Co. v. State Board of Water Engineers, Tex.Civ.App., 311 S.W.2d 938.

The present case is distinguishable from the Farmers and Merchants case. That case involved the question of whether a rate is “inadequate” or “unfairly discriminatory”. The determination of whether or not a rate deviation should be granted depends upon a variety of factors listed in the statute. These factors are such as would involve the use of “legislative discretion” or the exercise of “quasi-legislative” power. The Board may deny the application “if it finds the resulting premium would be inadequate or unfairly discriminatory’3. Such a determination is a question involving broad legislative discretion, and not susceptible to full redetermination by the judiciary. Therefore, it would appear that although the Farmers case, supra, was correctly decided, it does not govern the disposition of the instant case.

Appellee points out numerous problems and difficulties which will be encountered by the courts in attempting to provide a de novo review for this type of administrative decision. This Court in Southern Canal, supra, also emphasized the dire results possibly attendant from such a course of action. With these views this Court is in full accord.

However, the fact that a statute may have mischievous or even disastrous results is no basis for declaring the same to be unconstitutional. “It should perhaps be reiterated that Courts have no concern with the wisdom of legislative acts, but it is our plain duty to give effect to the stated purpose or plan of the Legislature, although to us it may seem ill advised or impracticable.” State Board of Insurance v. Betts, 1958, 158 Tex. 612, 315 S.W.2d 279, 281. See also, Board of Insurance Commissioners of Texas v. Guardian Life Ins. Co., 1944, 142 Tex. 630, 180 S.W.2d 906.

We therefore hold that in so far as the trial court held the judicial review statutes unconstitutional as applied to the instant case, it was in error. The function of the Board of Insurance Commissioners under Article 3.42(f) is quasi-judicial, and therefore the courts could properly make the same determination on trial de novo.

In view of another trial of the case, we deem it necessary to discuss the points of error raised by appellant pertaining to the relevancy and admission of certain evidence before the Board and the trial court.

Appellant attacks the admission of the premium rates before the Board and contends that the Board has no authority to regulate premium rates. The trial court refused to allow testimony pertaining to the premium rates. We find that the premium rate charged is of evidentiary value in determining whether the policy “encouraged misrepresentation”. If the premium rates charged were so high that unreasonably high returns must be promised, this would encourage misrepresentation.

Appellant insists that “If the rate has to be looked to in order to discover the supposed inequity, then it is not the provisions of the policy which cause it but the rate.” What appellant fails to recognize is that the rate has an undeniable effect on whether or not provisions of the policy might necessarily have to be misrepresented in order to sell the policy; therefore evidence of the rate charged is relevant in determining if the policy “encourages misrepresentation” and if introduced in the trial court on retrial, would be admissible. The use of the premium rate charged as circumstantial evidence of whether or not the policy “encourages misrepresentation” is not directly or indirectly an attempt to regulate rates.

Appellant next maintains that the meaning of the policy provisions are clear and unambiguous, and that such provisions, standing alone, do not misrepresent anything. Therefore, appellant reasons that it is error to consider the policy provisions in relation to anything outside the four corners of the policy itself. At this point we again turn our attention to a recurring question in this case. Should the Court and the Board be limited to a consideration of the words and phrases of the policy alone, or may the Court and the Board consider outside, relevant factors in its evaluation of these words and phrases?

In determining what construction is to be placed on the phrase “encourages misrepresentation” contained in Subdivision (2) and the language “If it [the policy] has any * * * other indication of its provisions which is misleading” contained in Subdivision (3) of Article 3.42(f), supra, we are mindful of the following elementary rules of statutory construction summed up' in 39 Texas Jurisprudence, at pages 217, 218, and supported by substantial Texas authority:

“Thus it is settled that a statute will be construed with reference to its intended scope, its general purpose, and the ends or objects sought to be attained. * * * Where the statutory language * * * admits of more than one meaning it is to be taken in such a sense as will conform to the scope and intent of the act, and will best or most certainly accomplish its purpose, without doing violence to plain statutory language. Thus where a statute is designed to afford a remedy for existing evils, it should be given such signification as will afford a reasonable remedy. Contrariwise, a construction that is repugnant to the object of the law or that will defeat, thwart or unduly limit its plain purpose, will be avoided if possible.”

And see: Ex parte Flake, 67 Tex.Cr.R. 216, 149 S.W. 146; Crooms v. State, 40 Tex. Cr.R. 672, 51 S.W. 924, 53 S.W. 882; Magnolia Petroleum Co., v. Walker, 125 Tex. 430, 83 S.W.2d 929, certiorari denied 296 U.S. 623, 56 S.Ct. 144, 8 L.Ed. 442; Wray v. Citizens National Bank, Tex.Com.App., 288 S.W. 171; Red v. Bounds, Tex.Com. App., 122 Tex. 614, 63 S.W.2d 544; Trimmier v. Carlton, 116 Tex. 572, 296 S.W. 1070; Highway Comm. of Texas v. Vaughn, Tex.Civ.App., 288 S.W. 875, er. ref.; Adams v. Bida, Tex.Civ.App., 83 S.W.2d 420, reversed on other grounds at 125 Tex. 458, 84 S.W.2d 693; Longoria v. State, 126 Tex.Cr.R. 362, 71 S.W.2d 268; Oliver v. State, 65 Tex.Cr.R. 150, 144 S.W. 604; Higgins v. Rinker, 47 Tex. 393; Shelton v. Wade, 4 Tex. 148; Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 138 S.W. 575; Texas Co. v. Schriewer, Tex. Civ.App., 38 S.W.2d 141, modified Smith v. Texas Co., Tex.Com.App., 53 S.W.2d 774; First Texas State Ins. Co. v. Smalley, 111 Tex. 68, 228 S.W. 550; Cannon’s Administrator v. Vaughan, 12 Tex. 399; Ex Parte Miller, 85 Tex.Cr.R. 263, 211 S.W. 451.

With this principle before us it becomes evident that the court and the Board would clearly be within their authority in considering all pertinent factors in arriving at their decision, and not just the words of the policy alone. As has been succinctly stated by a Louisiana court in a situation similar to our own:

“ * * * While it is true that the Secretary of State, not the Commission, has the responsibility and power to enjoin ‘any unfair or deceptive act or practice prohibited’, LSA-R.S. 22:-1215, we feel that the Commission could properly take notice of the large newspaper advertisements ‘informing’ the public of State Farm’s membership fee plan which in the Commission’s opinion were misleading. The Insurance Code is an integrated whole. The Commission is not required to leave the stable door unlocked until the horse is stolen.” State Farm Mutual Automobile Insurance Co. v. Louisiana Insurance Rating Commission et al., La.App., 79 So.2d 888, 894.

Appellant contends that the Board and the Court must look only to the form of the policy. We do not agree. We hold that the Court will be justified in considering ■outside factors in its determination. The Board and the Court must have the power, in approving or disapproving a policy, to •consider not only the terms of the policy form itself, but also the fact that the policy will be used in an undesirable scheme. Our ■conclusion does not give the Insurance Board unbridled opportunities to abuse its powers. The Legislature has carefully provided for appeal from orders of the Board to guard against such abuse. This present action is an excellent example of the extent to which such an appeal can be perfected.

Finally, appellant contends, “.The trial court erred in receiving in evidence, and considering as a basis for upholding the orders in question, testimony and exhibits concerning the means by which the policy was sold or advertised for sale, because advertising materials or methods may not be utilized directly or indirectly as a ground for disapproval of, or withdrawal of approval of, appellant’s policy form.” Our answer to that contention is that it would he unreasonable to suppose that the Commissioner or the trial court must disregard facts which have a material relation to the matters under their inquiry, especially where, as here, the advertising was directly welded to the provision in question, Option 2, supra. Appellant urges that it was not the.intent of the Legislature that deceptive advertising practices be a ground for disapproval of the policy form. With this we agree, but advertising practices may be relevant in determining if the statutory grounds exist. A consideration of the policy form aside from the advertising accompanying it would be to view the policy as if “in a vacuum”, as appellee has phrased it. We hold that the trial court may view policy provisions and advertising practices together to determine the acceptability of the policy itself. This is by no means an attempt by the'Commissioner or the Court to regulate advertising.

The judgment of the district court is reversed and the case is remanded to that court with directions that any subsequent trial proceed in a manner not inconsistent with this opinion.

STEAKLEY, J., not sitting.

GREENHILL, Justice

(concurring).

I agree that the trial de novo provisions of the statute are constitutional. But I disagree that the policy itself should be struck down because of oral representations or misrepresentations made by agents in connection with the selling of the policy. Any policy of insurance is capable of being misrepresented. And, as I read it, this policy itself contains nothing which is illegal, which of itself is misleading or fraudulent,- or which peculiarly lends itself to misrepresentation.

The Legislature has clothed the Board of'Insurance with broad power in Article 21:21 of the Insurance Code to deal with and stop misrepresentations and false advertising made in connection with the sale of insurance policies. The Board is also given the power to call before it any person who is accused of deceptive acts or practices or unfair methods of competition in the business of insurance. It has authority to issue cease and desist orders to stop the objectionable practices. To me, this would have been the proper approach to the objectionable practices in this case.

As originally introduced in the Legislature, Senate Bill 438, which became Article 3.42 of the Insurance Code, authorized the Board to disapprove a policy form “(d) If the purchase of such policy is being solicited by deceptive advertising.” This authority was deleted before enactment. This is evidence of legislative intent that misleading advertising and practices outside of the policy should be separately dealt with, and that the policy should be judged by its own terms.

I agree that misleading and deceptive practices should be stopped. I disagree only in the manner in which they should be stopped.

CULVER, J., joins in this opinion.

GRIFFIN, Justice

(dissenting).

I cannot agree with the majority opinion and I therefore respectfully dissent.

I dissent from the holding that the matter of the content and form of insurance policy provisions can be tried de novo. The ■content and form of insurance policies most ■certainly are administrative matters and not judicial matters. In the first instance, to permit the courts to write insurance policies would, in my opinion, lead to interminable confusion and great lack of uniformity. Such procedure would lead to the approval of one form of policy for one company, and approval of another and different form for another company.

      . The pertinent part of Article 3.42 is Section (f) as follows:
      “(f) The Board of Insurance Commissioners shall forthwith disapprove any such form, or withdraw any previous approval thereto if, and only if,
      “(1) It is in any respect in violation of or does not comply with this Code.
      “(2) It contains provisions which encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive- or contrary to law or to the public policy of this state.
      “(3) It has any title, heading or other indication of its provisions which is misleading.”

      . “(c) Every such filing hereby required shall be made not less than thirty days in advance of any such issuance, delivery or use. At the expiration of thirty days the form so filed shall be deemed approved by the Board of Insurance Commissioners unless prior thereto it has been affirmatively approved or disapproved by the written order of said Board. The Board of Insurance Commissioners may extend by not more than an additional thirty days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial fifteen day period and at the expiration of any such extended period, and in the absence of such prior affirmative approval or disapproval, any . such form shall bo deemed approved. The Board of Insurance Commissioners may withdraw any such approval at any time. Approval of any such form by such Board shall constitute a waiver of any unexpired portion of the waiting period, or periods, herein provided.”

      . “Sec. 35. No bill (except general appropriation bills, which may embrace the various subjects and accounts, for and on account of which moneys are appropriated) shall contain more than one subject, which shall be expressed in its title. But if any subject shall be embraced in an act, which shall not be expressed in the title, such act shall be void only as to so much thereof, as shall not be so expressed.”

      . “In considering any application * ⅜ * the Board shall give consideration to the factors applied by insurers or rating organizations generally used by such insurers or rating organizations in determining the bases for rates; the financial condition of the insurer; the method of operation and expenses of such insurer; the loss experience of the insurer, past and prospective, including where pertinent the conflagration and catastrophe hazards, if any, both within and without this state; to all factors reasonably related to the kind of insurance involved; to a reasonable margin for an underwriting profits for the insurer, and, in the case of participating insurers, to policyholders’ dividends.” Art. 5.26, Texas Insurance Code.


source: Caselaw Access Project

author: MORRISON, Judge.

license: Public Domain

text:
    Leo Daniel LUTON, Appellant, v. STATE of Texas, Appellee.
    No. 33632.
    Court of Criminal Appeals of Texas.
    Oct. 2, 1961.
    James H. Martin, Dallas (on appeal only) for appellant.
    Henry Wade, Dist. Atty., and James K. Allen, Jerome V. Chamberlain, Jr., Frank W. Watts, George R. Milner, Jr., and Phil Burleson, Asst. Dist. Attys., Dallas, and Leon B. Douglas, State’s Atty., Austin, for the State.
   MORRISON, Judge.

The offense is murder; the punishment, death.

The witness Bryant testified that he and his wife were engaged in the operation of a grocery store on the night in question when appellant, in company with another man, entered the store holding handkerchiefs to their faces, brandishing pistols, and demanded the money from the cash register. Bryant testified that instead of complying he struck the nearest robber but appellant, who was farthest from him, shot him and later shot his wife, and then fled. It was shown that the bullet wound inflicted upon Bryant’s wife was fatal and that during- the course of the scuffle between Bryant and appellant’s companion appellant had dropped his handkerchief from his face and the identification was positive.

Bryant’s testimony was corroborated by the witness Ince who was present in the store at the time.

Appellant was shown to have collided with a truck near the scene of the robbery within minutes thereafter and was removed from the wreckage of his automobile in which a pistol, which had been fired, was found.

Appellant did not testify or offer any evidence in his own behalf.

We shall discuss the contentions presented by the various bills of exception.

The first bill of exception complains that the court erred in excusing certain jurors who had conscientious scruples against the infliction of the death penalty. We have carefully pursued the examination of each of them and find that all of them were subject to the challenge made.

Bill of exception No. 2 as qualified by the court reflects that after the court had received the verdict of the jury and had discharged them the attorney for appellant requested that the court hold the jury together “in connection with some motion he sought to urge after verdict.” The nature of the motion is not shown, and we find no error reflected by the bill.

Bill of exception No. 3 relates to a motion to declare a mistrial based upon the contention that each juror was not sworn individually upon his selection. As qualified, the bill reflects that each juror was in fact sworn upon his selection.

Bill of exception No. 4 complains that in his argument the prosecutor said, “the type of man the evidence shows this defendant to be,” and this constituted a reference to appellant’s failure to testify. The court certifies that no such objection was made at the time, and we have concluded that, if made, it would have been untenable.

Because of the extreme penalty, we have examined the record with great care, but find nothing further to discuss that would in any way add to the jurisprudence of this state or solve any issues in the case.

Finding the evidence sufficient to support the verdict and no reversible error appearing, the judgment is affirmed.


author: DICE, Commissioner. BELCHER, Commissioner.

text:
    Emma Vasquez RODRIQUEZ, Appellant, v. STATE of Texas, Appellee.
    No. 33539.
    Court of Criminal Appeals of Texas.
    June 7, 1961.
    Rehearing Denied Oct. 25, 1961.

      No attorney for appellant of record on appeal; Wm. Davenport, San Angelo, for appellant on rehearing.
    Leon B. Douglas, State’s Atty., Austin, for the State.
   DICE, Commissioner.

The conviction is for the unlawful possession of marihuana; the punishment, 15 years.

The State’s evidence shows that, on the night in question, certain officers, armed with a search warrant, went to a house in •the City of Lamesa around 11:30 p. m. to -search for narcotic drugs. When they arrived appellant was not present and they ■were admitted into the house by a woman who lived next door. At the time, the neighbor woman’s two teenage daughters were sleeping in the front living room of the residence sought to be searched and, .after they got up, dressed, and left, the -officers proceeded to search the house. After prizing up a floor board in a back room, the officers found buried in some dirt, which appeared to have been recently disturbed, a quart fruit jar “a little over half full”, containing a substance that appeared to be marihuana. Upon the trial, it was stipulated that the substance contained in the fruit jar was marihuana and, in addition thereto, Chemist Donald W. Hanna of the Texas Department of Public Safety testified that he had examined the substance and that it contained marihuana which weighed ’92 grams.

It was further shown by the State’s evidence that appellant lived in the house searched by the officers and where the marihuana was found. Sheriff Mayfield testified that he had known appellant for six years and knew that she lived in the house. He further testified that, at the time of the search, appellant’s husband was not living at the house with her and that, to his knowledge, no one else was living there. Mrs. O. M. Sealy, upon being called as a witness by the State, testified that she was a neighbor of appellant and that she knew that appellant had lived in the house searched for over a year.

Appellant did not testify or offer any evidence in her behalf.

We find the evidence sufficient to sustain the conviction.

The record contains no formal bills of exception and there are no objections to the court’s charge. No brief has been filed on behalf of appellant.

We have examined the informal bills of exception appearing in the statement of facts and find no reversible error therein. Appellant waived her objection to the evidence of the search of the house by not objecting to the admission of the marihuana in evidence when offered by the State. Killingsworth v. State, 165 Tex.Cr. R. 286, 306 S.W.2d 715. The court’s action in permitting the State to re-open the case after closing and offer additional testimony was authorized by Article 643, Vernon’s Ann.C.C.P., which provides: “The court shall allow testimony to be introduced at any time before the argument of a cause is concluded, if it appear that it is necessary to a due administration of justice.” Under the record, no abuse of discretion is shown and we perceive no error. Bernadett v. State, 166 Tex.Cr.R. 621, 317 S.W.2d 747.

The judgment is affirmed.

Opinion approved by the Court

On Motion for Rehearing.

BELCHER, Commissioner.

A re-examination of the record supports appellant’s position that she reserved an objection to the testimony showing the search of her house and the introduction of the fruits thereof into evidence.

As stated in the original opinion, the officers had a search warrant at the time of the search. The affidavit and warrant with the return thereon showing its execution were introduced in evidence without objection and are in the record. An examination of said instruments and the evidence pertaining thereto shows them to be valid. Therefore, the search was legal, and the admission in evidence of the fruits of the search was not error.

The motion is overruled.

Opinion approved by the Court.


author: BOYD, Justice.

text:
    UNITED STATES COLD STORAGE CORPORATION, Appellant, v. FIRST NATIONAL BANK OF FORT WORTH et al., Appellee.
    No. 16256.
    Court of Civil Appeals of Texas. Fort Worth.
    Oct. 20, 1961.
    Rehearing Denied Nov. 17, 1961.
    Bowyer, Thomas, Crozier & Harris, and H. T. Bowyer, Dallas, for appellant.
    Cantey, Hanger, Johnson, Scarborough & Gooch, and Sloan B. Blair, Fort Worth, for appellee The First National Bank of Fort Worth.
    Harry N. Ward, Fort Worth, for appellee North Fort Worth State Bank.
   BOYD, Justice.

United States Cold Storage Corporation sued Rosenthal Packing Company, First National Bank of Fort Worth, hereinafter called National Bank, and North Fort Worth State Bank, hereinafter called State Bank. Judgment was rendered for the plaintiff against Rosenthal, but summary judgment was rendered for both banks. The plaintiff appeals from the summary judgment.

On May 11, 1960, appellant issued its check, drawn on National Bank, payable to Rosenthal in the amount of $30,000. The ■check, which represented a loan, was issued on Rosenthal’s assurance that it would on that day or the day following store in appellant’s plant, as collateral, meat products of market value greatly in excess of the amount of the check. Rosenthal stored no products in appellant’s plant.

On the day the check was issued Rosen-thal deposited it in State Bank, the check bearing the indorsement “for deposit only”. Steddum, State Bank’s executive vice president, testified by deposition that he sent the check with other items by messenger to National Bank late in the afternoon of May 11th. On the morning of May 12th, appellant, having learned that State Bank was refusing payment on Rosenthal’s checks, some of which were payable to appellant, orally instructed National Bank to stop payment on the $30,000 check which it had issued to Rosenthal. National Bank did not stop payment, but paid the check on May 13th and charged it to appellant’s account.

Appellant alleged that Rosenthal was insolvent; that it ordered payment stopped before the check had been presented to National Bank for payment, and that National Bank agreed to stop payment; that National Bank waived the statutory provisions regarding stop payment instructions; that State Bank was not a holder in due course, since it took the check for collection only and for deposit, and also acted in bad faith, knowing that Rosenthal was overdrawn on its books, and was insolvent, and said bank had on May 11th refused payment on Rosenthal’s checks, and was chargeable with knowledge that Rosenthal was not entitled to the proceeds of the check. Appellant asked for judgment against National Bank, and, in. the alternative, against State Bank, and, in the further alternative, against Rosenthal.

By points of error appellant contends that there was an issue of fact as to whether National Bank was negligent in paying the check; an issue as to whether State Bank was holder of the check in due course; that National Bank waived the provisions of the Statutes concerning stop payment instructions ; and that neither bank should have judgment because the check was restrictively indorsed and placed in State Bank for collection only.

When Rosenthal deposited the check in State Bank its account was overdrawn in excess of $90,000, and the bank credited the overdraft with the amount of the check. We may assume that had the check been returned by National Bank it would have been charged back to Rosenthal’s overdraft.

We have reached the conclusion that the jttdgment should be affirmed. Even though National Bank should have stopped payment if it agreed to do so, we are unable to see how appellant has been injured by National Bank’s action in paying the check if State Bank was a holder in due course. Brady on Bank Checks, 2nd Ed., p. 363. Had the check not been paid by National Bank, State Bank would have had a claim for $30,000 against appellant, who issued the check and put it into the stream of commerce. It is true that State Bank would in that event also have had a cause of action against Rosenthal, the insolvent in-dorser of the check. Appellant had a cause of action against Rosenthal, which now has been reduced to judgment. If appellant collects from Rosenthal, it is not injured, regardless of the check’s having been paid by National Bank, because appellant’s liability to State Bank was thereby extinguished. We think it would have been immaterial if State Bank, by a bookkeeping entry, had charged the check back to Rosen-thal had it been returned unpaid. State Bank’s cause of action arising on the check was against both appellant as maker and Rosenthal as indorser, and the claim against appellant would not have been surrendered or released by the making of such an entry on the bank’s books. Riverside Bank v. Woodhaven Junction Land Co., 34 App.Div. 359, 54 N.Y.S. 266.

As to whether State Bank was a holder in due course, we look to the negotiable instruments law and to the adjudicated cases.

Article 5935, sec. 52, Vernon’s Ann.Tex. St., provides:

“A holder in due course is a holder who has taken the instrument under the following conditions:
“1. That it is complete and regular upon its face;
“2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact;
“3. That he took it in good faith and for value;
“4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.”
Article 5933, sec. 25, provides that:

“Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time.”

“It has generally been held or stated that the bank’s application of the proceeds of a deposited item to the depositor’s antecedent debt owed to the bank is a giving of value for the instrument and constitutes the bank a holder in due course.” 59 A.L.R.2d 1194; and on the next page the text says: “The general rule, supra, has been applied to a previously overdrawn account.” And on page 1187 the same text says that this is so notwithstanding the fact that it was received by the bank for collection, and notwithstanding the fact that the instrument is indorsed “for deposit only.” See, also, Lowrance Motor Company v. First National Bank of Auburn, 5 Cir., 238 F.2d 625, 59 A.L.R.2d 1164; Holt v. First State Bank of Miami, Tex.Civ.App., 74 S.W.2d 1050; City State Bank in Wellington v. Lummus, Tex.Civ.App., 277 S.W.2d 262; Taylor & Co. v. Nehi Bottling Co., Tex. Civ.App., 30 S.W.2d 494; Burnett’s Trust v. Farmers State Bank in Mexia, Tex.Civ.App., 175 S.W.2d 453.

We think State Bank was a holder in due course unless there was an issue as to its bad faith.

Of course, State Bank knew that Rosen-thal had a large overdraft, and the bank had on May 11th refused payment, on account of insufficient funds, of several of Rosenthal’s checks, including some payable to appellant. Appellant argues that State Bank knew or should have known that Rosenthal got the $30,000 check without any consideration moving from Rosenthal to appellant; but just how the bank knew or should have known that, appellant does not make clear. Neither is it clear that, if it knew that appellant had issued the check without consideration, the bank was obligated to exercise any kind of guardianship over appellant to protect it from its own mistakes. Appellant did not then consider its action a mistake, and was willing to make the loan on Rosenthal’s assurance that collateral would be deposited on that or the next day; and it does not appear how the bank, which took the check from a concern with which appellant was willing to do business, was called upon to veto a transaction which was regular on its face.

We believe the summary judgment was proper, and it is affirmed.


author: BARROW, Justice.

text:
    George D. HOLLAND, Appellant, v. H. B. LESESNE, Appellee.
    No. 13813.
    Court of Civil Appeals of Texas. San Antonio.
    Oct. 11, 1961.
    Rehearing Denied Nov. 8, 1961.

      Trueheart, McMillan, Russell & West-brook, San Antonio, for appellant.
    Baskin, Casseb & Gilliland, San Antonio, Gordon L. Hollon, Boerne, for appellee.
   BARROW, Justice.

This appeal involves two causes which were consolidated and tried together. One is a suit by appellee against appellant to impress a constructive trust upon a certain tract of land situated in Bandera County, Texas, fronting on Medina Lake and known as “Frosty Point”, and the other, a suit for actual and exemplary damages by appellee against appellant by reason of the conversion of certain personal property. The first suit is Cause No. F-119781 on the trial court docket, and the second, Cause No. F-128875 on said docket. Upon a jury verdict on special issues, judgment was rendered adjudging appellee to be the owner in fee simple of an undivided one-half interest in and to the subject land, and divesting appellant of any title or claim to said one-half interest. Judgment was also rendered, in favor of appellee and against appellant, for actual damages in the sum of $1,660.50, exemplary damages in the sum of $1500.00 and costs in the sum of $236.70; and requiring the sum of $6,250.00, less the recovery against appellant, to be paid by appellee into the registry of the court, for the benefit of appellant as the purchase price of the property vested in appellee. The first suit above mentioned will hereafter be called “The Land Suit”, and the second suit, “The Damage Suit.” Appellant will be called Holland and appellee, Lesesne.

The pertinent facts in general are as follows : For some years prior to the transactions involved herein, Holland and Lesesne, as well as their respective families, had been warm personal friends. They desired to secure a place for week-end outings. They visited and inspected some lake front sites with the plan to purchase one jointly, but found no suitable place. Holland mentioned that he had a friend who owned lake front property and might be willing to lease it. They looked at the property and then jointly leased it for one year. There were two houses, as well as some other improvements on the property. The two houses were in bad state of repair, and the lease was made upon the following terms: Holland and Lesesne were to pay to the owner, Walter Liese, $100.00 each, and were to repair each of the houses, so as to put them in livable condition. Holland and Lesesne were to, and did, share equally in these expenses. Holland occupied the east house, and Lesesne occupied the west house. The property so leased is that involved in this suit. It is known as “Frosty Point” and will be so referred to herein. Shortly after it was leased, Holland and Lesesne discussed buying the property jointly, and in December, 1957 or early in January, 1958, entered into an agreement to purchase it. Under the agreement, title was to be taken in the names of both parties. They were to share equally in the payment of the purchase price, and the property was to be owned by the parties jointly in equal shares. They agreed that Holland should conduct the negotiations with Liese, however, at the time, Holland had already made arrangements to buy the property. Thereafter, on February 15, 1958, Holland presented to Lesesne an earnest money contract to sign, covering the purchase of the subject property, and for the first time revealed to him that he proposed to exchange property and services for the subject property. The property which Holland proposed to trade was a piece of real estate, a lot in San Antonio, at that time owned jointly by himself and one Ted Mahone. Holland proposed to value the lot at $10,500.00, and was to build a swimming pool for Liese which was valued at $2,000.00, making a total of $12,500.00, for Frosty Point, one-half thereof to be paid by Lesesne to Holland. Lesesne agreed to these terms and signed the contract which Holland retained. However, thereafter, Lesesne, according to his testimony, recalled having overheard a conversation between Holland and Mahone regarding the valuation of the San Antonio lot in the deal between them, wherein Holland was acquiring Mahone’s interest in said lot, and the figure at which they valued it was far below the sum of $10,500.00, at which Holland valued the lot to him. The next day he called Holland and told him to hold up the deed until he could talk to him. The following day, February 16, they discussed the matter, and, according to Lesesne’s testimony, after much discussion and argument, Holland agreed to reduce the figure on the lot from $10,500.00 to $9,700.00, making the price for Frosty Point, $11,700.00, rather than $12,500.00. Holland, however testified that Lesesne became outraged, called him a crook and said he would have nothing more to do with him. On the following day February 17, 1958, Holland entered into a contract with the seller, Liese, to purchase the property in his own name. Thereafter, he and Lesesne continued to discuss how they would partition the property between themselves, as to how and where the division lines were to be drawn, and the matter of the use of a well on the premises, also the adjustment of the cost of utilities, etc., until about the month of June, 1958, when Holland, for the first time, told Lesesne that he did not intend to keep the agreement, that he had bought the property for himself in his own name. Between the last two above mentioned dates, Lesesne made permanent and valuable improvements on the part of the land he was to get, and had no knowledge of any intended breach of their original agreement. Thereafter, Lesesne continued to occupy the Lesesne house on the property, until he was forcefully dispossessed by Holland in May, 1959.

Inasmuch as there are two separate causes of action involved herein, we shall consider them separately.

The Land Suit.

By his first point, Holland contends that his motions for instructed verdict, judgment, and judgment n. o. v., should have been granted for the reasons that the agreement was not in writing and no fiduciary relationship was shown. The point must be overruled. The jury finding, together with the undisputed evidence, is sufficient to establish a constructive trust and to impress the trust upon the title to the property. Since the decision of the Supreme Court in FitzGerald v. Hull, 150 Tex. 39, 237 S.W.2d 256, 261, it has been well established that such strict and technical relationships as trustee and cestui que trust, principal and agent, attorney and client, are not indispensable, but that such informal relationships, such as moral, social, domestic, or merely personal ones, where one person trusts in and relies upon another, are sufficient. The Supreme Court, quoting from 54 Am.Jur., §§ 225 and 226, stated the rule as follows:

“ ‘While a confidential or fiduciary relationship does not in itself give rise to a constructive trust, an abuse of confidence rendering the acquisition or retention of property by one person unconscionable against another suffices generally to ground equitable relief in the form of the declaration and enforcement of a constructive trust, and the courts are careful not to limit the rule or the scope of its application by a narrow definition of fiduciary or confidential relationships protected by it. An abuse of confidence within the rule may be an abuse of either a technical fiduciary relationship or of an informal relationship where one person trusts in and relies upon another, whether the relation is a moral, social, domestic, or merely personal one.’ Sec. 225, 54 Am.Jur., ‘Trusts’, p. 173. (Emphasis added)
“ ‘The abuse of a confidential relationship by acquiring property through the employment of knowledge or interest obtained in such relationship constitutes a sufficient basis for equitable relief in the form of the declaration and enforcement of a constructive trust in respect of such property and in favor of the person wronged. The relationships of trustee and cestui que trust, principal and agent, client and attorney, and employer and employee, are striking, but far from exclusive, examples of confidential relationships within the meaning of this rule. * *

Sec. 226, Idem, pp. 173-174” (Emphasis by Supreme Court.)

In the case at bar, the undisputed evidence shows that during all the relevant period of time an unusually close personal friendly and confidential relationship existed between the parties and their families. They visited each other regularly, they dined together, and they vacationed together.

By his second point, Holland contends that the court erred in refusing to submit his Special Issue No. 1, inquiring whether or not appellant had repudiated any agreement for the joint purchase of the land, and in refusing to submit his Special Issue No. 2, inquiring whether or not appellee acquiesced in such repudiation, and in refusing to submit appellant’s Special Issue No. 7, inquiring whether or not appellee, after learning of the repudiation, abandoned his rights under the contract.

In his third point, Holland contends that the court erred in refusing to submit his Special Issue No. 3, inquiring whether or not any agreement for the purchase of land was mutually rescinded by appellee and appellant, and in refusing appellant leave to file a trial amendment alleging such mutual rescission.

These points are overruled. In the first place, the points are multifarious and need not be considered. Rule 418, Texas Rules of Civil Procedure; Smith v. Brown Express, Tex.Civ.App., 343 S.W.2d 550. Secondly, the requested issues used only the words, “repudiated”, “acquiesced in”, “abandoned” and “rescinded”, and did not include in the issues the factual elements necessary to be included therein, nor did Holland, in connection therewith, submit any substantially correct definition or explanation of the terms. Therefore, he cannot complain of the court’s failure to give such issues. Rule 279, T.R.C.P. The opinion in Hough v. Grapotte, 127 Tex. 144, 90 S.W.2d 1090, cited by Holland, supports the above statement of the rule. Moreover, as for the third point, the question of whether or not a trial amendment is allowed is entirely within the discretion of the trial court. No abuse of that discretion has been shown in this case.

By his fourth point, Holland contends that the court erred in submitting, over his objection, “Question No. 1” inquiring whether or not the parties agreed that Holland would negotiate with the landowner for the joint purchase of the land, in submitting “Question No. 2” inquiring whether or not Holland informed Lesesne that the owner had agreed to sell for $12,500.00, in submitting “Question No. 3” inquiring whether or not Lesesne and Holland agreed to jointly purchase the land for a consideration of $12,500.00, and in submitting “Question No. 4” inquiring whether or not each of the parties were to acquire an undivided one-half interest in the land, because these questions were not supported by the allegations of Lesesne’s pleadings.

In connection with these points, Holland argues that the jury in answer to “Question No. 5” found that there was no agreement between the parties that the value of the Broadway lot was to be fixed at $9,700.00 as part of the purchase price to be paid for the Frosty Point property, and rejected Lesesne’s theory of the case, therefore, judgment should have been rendered in his favor. He contends that the jury having found, in response to Question No. 5, that the parties did not agree that the value of the Broadway lot should be fixed at $9,700.00 precluded recovery by plaintiff. We do not agree. This jury finding, when applied to the evidence was simply a finding that after the parties agreed on the $12,500.00 price, they did not make an agreement reducing the price, and was against Lesesne on his contention that the price was reduced.

By his fifth point, Holland contends that the court erred in permitting Lesesne to file a trial amendment after the verdict of the jury had been returned, received, and filed. The trial amendment alleged, in substance, that plaintiff tenders into court one-half the purchase price of the land, and alleged the price to be $11,700.00, or, in the alternative, $12,500.00.

We agree with Holland that the court erred in permitting the filing of the trial amendment. Rule 67, T.R.C.P. However, such error is harmless. We have examined plaintiff’s original petition, and have reached the conclusion that it is sufficient without the aid of the trial amendment. We observe that Points Nos. 4 and 5 are multifarious and not subject to consideration by this Court. Nevertheless, we will dispose of the points on their merits.

We have examined plaintiff’s trial petition and find that, while it is somewhat vague and indefinite, it does raise the issues submitted to the jury. While it alleges that the parties at that time valued the trade-in property and services at $11,700.00, the pleading, when construed as a whole, alleges that Holland was delegated and entrusted to do the negotiating, and that each party would pay or contribute one-half of the purchase price, whatever it was. The pleading further alleges, that plaintiff tenders one-half of the purchase price, whatever it was. No special exceptions were urged to the pleading. Plaintiff’s petition contained a statement sufficient to give fair notice of the cause of action. Rule 47, T.R.C.P. During the trial, Holland at no time objected to the evidence raising Questions Nos. 1, 2, 3 and 4, on the ground of the absence or deficiency of pleading. Holland did not object to the submission of any of said issues on the ground that they were not raised by the pleadings, as required by Rule 274, T.R.C.P. Furthermore, Holland in his motion for new trial did not assign as error the submission of any of such issues on the ground of lack of pleading. Rule 324, T.R. C.P. The appellant cannot complain for the first time on appeal.

By Holland’s sixth and last point in the land suit, he contends that the court erred in submitting, over his objection, Question No. 7, which inquired whether or not “after such agreement, if any, (inquired about in Question No. 3), and in reliance thereon the Plaintiff, Hugh Lesesne, made substantial and valuable improvements on the house that he was occupying on the property in question,” because the issue is multifarious in that two ultimate issues are submitted therein. The point is overruled.

The making of valuable or substantial improvements in reliance on the agreement is not necessary to the establishment of a constructive trust. The issues as submitted could have been answered in the negative and such finding would not have barred a recovery by plaintiff. Fitz-Gerald v. Hull, supra. The making of improvements on the land is at most an evidentiary fact tending to prove reliance by plaintiff on defendant to keep the agreement. The issue submitted is immaterial, and, therefore, any error in its submission has not been shown to have injured appellant, and is therefore harmless. Rule 434, T.R.C.P.

The Damage Suit

The evidence on the issue of conversion is undisputed. On or about May 5, 1959, when the Lesesne house on Frosty Point, was occupied by and under the exclusive control of Lesesne, as it had been during all the time relevant to this controversy, and at a time when Lesesne, claiming to be a joint owner of the land, had filed the above land suit and was in peaceful possession of said house, Holland went to said house and unlocked it and removed all of Lesesne’s personal belongings therefrom and moved them to his storage yard in San Antonio, Texas. At the same time, he removed Lesesne’s boat and boating equipment to his own home in San Antonio. The next day he stored the contents of the house at Scohey’s warehouse in San Antonio and stored the boat and boating equipment at the Biltwell Boat Company in San Antonio. All of this was done without Lesesne’s knowledge, permission or consent. Holland then wrote Lesesne a letter telling him where his property was and that he could get it, although it had been stored in Holland’s name. Lesesne sued for the value of his property rather than for the recovery of the property.

The trial court submitted two issues thereon, inquiring in Question No. 8, what was the market value of the property taken from the Lesesne house, and in Question No. 9, what was the market value of the boat and boating equipment taken from the premises by defendant. Thus, it is apparent that the trial court concluded that the evidence conclusively established a conversion of the property. In this the trial court was correct.

A conversion has been defined as any distinct act of dominion wrongfully exerted over another’s property, in denial of his right or inconsistent with it. The test is whether the wrongdoer has exercised a dominion over the property in exclusion or in defiance of the plaintiff’s rights. Gulf, C. & S. F. Ry. Co. v. Buckholts State Bank, (Tex.Com.App., opinion approved), 270 S.W. 1008.

Holland makes the following contentions: (1) That the court should have submitted the issue as to whether there was a conversion of the property. (2) That the court should have submitted his requested issue inquiring whether or not Holland made reasonable arrangements for the personal property of Lesesne to be subject to his disposition and control. (3) That judgment should have been rendered in his favor because as a matter of law the evidence did not show a conversion. (4) That the court should have granted him leave to file a trial amendment alleging plaintiff’s failure to mitigate his damages; and (5) the court should have submitted his requested issue inquiring if plaintiff failed to mitigate his damages. We do not agree.

The facts were undisputed; they either constituted a conversion or they did not. We are of the opinion that they did. Sinclair v. Stanley, 64 Tex. 67, 69 Tex. 718, 7 S.W. 511; Bradley v. McKinzie, Tex.Civ.App., 226 S.W.2d 458; Hicks Rubber Co. Distributors v. Stacy, Tex.Civ.App., 133 S. W.2d 249; Stidham v. Lewis, Tex.Civ.App., 23 S.W.2d 851; Henderson v. Beggs, Tex.Civ.App., 207 S.W. 565; Crawford v. Thomason, 53 Tex.Civ.App. 561, 117 S.W. 181; Hofschulte v. Panhandle Hardware Co., Tex.Civ.App., 50 S.W. 608.

It is well settled that the owner of converted property has an option of bringing an action either for its specific recovery or for its market value. 42 Tex.Jur. 543, Trover and Conversion, § 32. It is also well settled that where property has been converted the owner is generally under no obligation to take it back upon a tender by the wrongdoer. Hence, such a tender will not preclude the recovery of damages for the conversion. 42 Tex.Jur. 539, Trover and Conversion, § 28. Since Lesesne elected to sue for the value of the property, the measure of damages in such case being the market value of the property at the time and place of conversion, there could be no mitigation thereof. The contentions of tender of the property and mitigation of damages must be overruled. The trial court’s action in submitting to the jury only the damage issue was correct.

We sustain Holland’s contention that the court erred in granting judgment for exemplary damages in the sum of $1,500.00, for the reason that there was no finding that the conversion was either malicious or willful. A finding that the conversion was either malicious or willfully done is essential to a recovery of exemplary or punitive damages. This was plaintiff’s issue, and the issue is waived in the absence of a request by plaintiff for the submission thereof. Rule 279, T.R.C.P. No such finding having been made or requested by Lesesne, the recovery of exemplary damages cannot stand.

The judgment is reformed by deducting the recovery of exemplary damages by Lesesne in the sum of $1,500.00. The judgment of the trial court adjudging H. B. Lesesne to be the owner of an undivided one-half interest in the land described in the judgment, and divesting George D. Holland of any title or claim to said interest so vested is affirmed. That part of the judgment which required PI. B. Lesesne to pay into the registry of the court the sum of $2,852.-80 for the benefit of George D. Holland, is reformed by requiring H. B. Lesesne to pay into the registry of the trial court the additional sum of $1,500.00. Costs are adjudged, three-fourths against appellant, George D. Holland, and one-fourth against appellee, H. B. Lesesne.

Reformed and affirmed.


text:
    Abe S. ALLEN, Appellant, v. TEXAS ELECTRIC SERVICE COMPANY, Appellee.
    No. 16240.
    Court of Civil Appeals of Texas. Port Worth.
    Oct. 13, 1961.
    Rehearing Denied Nov. 17, 1961.
    Stone & Stone, Jacksonville, Peery & Wilson, Wichita Falls, Jones, Brian & Jones, and Franklin Jones, Marshall, for appellant.
    Bullington, Humphrey, Humphrey, & Fillmore, Wichita Falls, Cantey, Hanger, Johnson, Scarborough & Gooch, Fort Worth, Nelson & Sherrod, Wichita Falls, Black & Stayton, and John W. Stayton, Austin, for appellee.
   BOYD, Justice.

This is an appeal by Abe S. Allen from a take nothing judgment in his suit against Texas Electric Service Company.

Appellant was seriously injured when he came into contact with an uninsulated energized wire carrying 7,200 volts, while working for R. B. Stovall Construction Company, and was paid $27,404.00 by Stovall’s compensation insurance carrier. Appellee had contracted with Stovall to change ou1. cross arms of its power lines which needed replacement, and to replace small wires, known as No. 4 ASCR, with larger wires, known as No. 4/0 Aluminum, in which work appellant was engaged when he received his injuries. The method employed in replacing the wires was to leave the energized smaller wire in service and to replace it in sections by pulling in the heavier wire with a rope and fastening it alongside the energized lighter wire and then to de-energize the lighter wire and to energize the heavier wire. This method required anchoring points for both the new and the old wires, and these anchoring points were established by putting in what were called “double dead-ends”. Appellant and his coworker Davis were putting in double dead ends when appellant was injured.

Appellant alleged in substance that ap-pellee retained such right of control and supervision as to make it liable for appellant's injuries, which, it is alleged, resulted from appellee’s failure to exercise, its control with reasonable care; that the work contracted to be done by Stovall was inherently dangerous, and that appellee had the nondelegable duty of supervision and enforcement of safety measures, which duty it failed to perform; that it was negligent in furnishing insufficient and defective equipment; that it was negligent in failing to furnish a safe place for appellant to work; and that such acts of negligence were proximate causes of appellant’s injuries.

The jury acquitted appellee of negligence with respect to the furnishing of equipment and the condition of the place of work; found that the work was inherently dangerous, and that appellee was negligent in failing to cause a foreman or superintendent to make a safety survey of the contemplated job, in failing to make recommendations of precautions to be used, and in failing to require a foreman to supervise; and that such acts of negligence were proximate causes of appellant’s injuries. Causative acts of negligence were found against Stovall in failure to require a foreman to watch the performance ot the work, in failing to make a safety survey, and in failing to insist upon the proper use and application of safety equipment, but none of such acts was found to he the sole proximate cause. The jury also found that the action of appellant in starting to make his dead-end connection before his fellow employee, working on the other end of the connection, had finished his work, was contributory negligence. Damages were found in the amount of $190,600.

On motion by appellant the court disregarded the finding as to contributory negligence, but overruled appellant’s motion for judgment; and on motion by appellee it disregarded the findings that the work was inherently dangerous, that appellee was negligent in failing to make a safety survey, in failing to give precautions to be followed, and in failing to require a foreman to supervise the progress of the work being done by appellant, and sustained appellee’s motion for judgment.

By exhaustive brief and oral argument appellant ably presents the contentions that it was shown that appellee retained such right of control as to make it liable for appellant’s injuries, and that appellee had the nondelegable duty to enforce safety rules and precautions in the performance of work found by the jury to be inherently dangerous. We are unable to agree with appellant’s contentions.

The general rule is that the owner-contractee is not liable for injuries sustained by employees of an independent contractor in the performance of the work which has been engaged. Continental Paper Bag Co. v. Bosworth, Tex.Civ.App., 215 S.W. 126; 27 Am.Jur., sec. 30, p. 510; Annotation, 20 A.L.R.2d, p. 901. An exception to the general rule exists where the employer of the contractor retains control over the operative details and the right to direct the manner in which employees of the contractor perform their work. In such case the employer of the contractor must exercise reasonable care for the safety of such employees. Allbritton v. Sunray Oil Co., D.C., 88 F.Supp. 54; Sun Oil Co. v. Kneten, 5 Cir., 164 F.2d 806.

In his brief appellant admits that the written contract between appellee and Stovall had no provision as to appellee’s right or lack of right to control the work of Stovall. Our careful search of the record fails to disclose any evidence of appellee’s right of control, other than to see that the work was done in accordance with the contract. Appellee did not direct Stovall’s employees in their work. They took orders only from Stovall. No issue was submitted or requested as to appellee’s right of control; and since appellant alleged that he was working as an employee of Stovall when he sustained his injuries, and that Stovall was doing the work under a contract with appellee, it would appear that it was appellant’s burden to show conclusively, or obtain a jury finding of, the existence of the right of control in ap-pellee. Grant v. Marshall, 154 Tex. 531, 280 S.W.2d 559; McCarver v. City of Corpus Christi, 155 Tex. 153, 284 S.W.2d 142; Rule 279, Texas Rules of Civil Procedure.

Another exception to the general rule of non-liability of the owncr-contractee seems to exist where the contractor’s employees are injured as a result of conditions attending work which is unusually dangerous in itself as the result of circumstances brought about by the owner-contractee. Sun Oil Co. v. Kneten, supra; Continental Paper Bag Co. v. Bosworth, supra; 23 Tex.Jur., sec. 22, p. 569.

It appears that there was no hazard connected with the work which appellant was doing which was known to appellee and not known to appellant. Stovall furnished all of the safety equipment with which the work was done. Appellant was familiar with the work, and he said that he understood the danger involved should he come into contact with the energized line. He was an experienced electrical worker, having been a lineman for eleven years, a first class lineman for several years, and a foreman for three companies. He said that he supposed he had made, or assisted in making, or supervised the making of, seven or eight thousand dead-end connections, but he would not say that thousands were made on energized lines. The voltage on some of the energized lines on which he had made dead-end connections was as high as 12,000 or 12,500. Although at one place in the record appellant testified that the dead-end shoes which were furnished him by Stovall should be used for making connections on copper wires, and that another type of shoe would be better for aluminum wires, with which he was then working, at another point he testified as follows:

“Q. Was there anything lacking there that * * * Stovall * * * failed to have on the truck that you figured, based on your experience, that you needed to make that cut? A. No, sir.
“Q. Everything was there? A. Yes, sir.
“Q. Did you employ it all, use it all, in making the cut ? A. All that I needed, yes, sir.”
It is not known how or why the accident happened. Appellant said that he did not know whether his foot got into the neutral wire. He testified:
“Q. * * * Did you fall or lose your balance or just what happened? A. I don’t know. * * *
“Q. * * * Did you slip? A. No, Sir, I ca?r't say that I slipped.
“Q. And do you testify that you don’t know what happened? A. That’s right. * * *
“Q. And in making that loop, is it possible that the wire got loose from you and hit you on the shoulder? A. Yes, sir.
“Q. It would just spring out, is that right? A. Yes, sir.
“Q. And if that didn’t happen, what is your other opinion as to how the accident happened? A. Well, I could have slipped, the hooks.
“Q. Your climbers could have slipped? A. Yes, sir, but I don’t think they did. Of course, I don’t know. I couldn’t be positive either way, one way or the other.
“Q. You don’t have any opinion about it now? A. No.”

We cannot bring ourselves to believe that this record shows that appellee failed in any duty it owed to appellant, or that anything it might have done during the progress of the work would have prevented the accident.

In Robert E. McKee, Ganeral Contractor v. Patterson, 153 Tex. 517, 271 S.W.2d 391, 393, the court said: “A general contractor in control of premises owes a duty to the employees of subcontractors similar to that owed by an owner or occupier of land to his invitees. . * * * In determining whether a landowner is liable to an invitee for injuries sustained on the premises, the duty of the landowner is frequently phrased as one ‘to exercise ordinary care to keep the premises in a reasonably safe condition’ so that the invitee will not be injured. * * * But that is only a simplified statement of the duty, suifi • cient to meet the problems presented in the particular cases. There are certain qualifications not there expressed. It is now well established in this state that the duty as there expressed does not extend to those invitees who know or should know of the existence of the particular condition and who appreciate or should appreciate its dangers. * * * What the qualification means, of course, is that inasmuch as the invitee has knowledge of the dangers there is no duty on the owner to warn him of them. It means also that if, having knowledge of the dangers, the invitee exposes himself to them he must take the premises as he finds them and there is no duty on the owner to protect him even by the use of reasonable precautions to eliminate the hazards.”

In Deaton v. Board of Trustees of Elon College, 226 N.C. 433, 38 S.E.2d 561, it was held that the general rule that one having work done by an independent contractor is under the obligation to furnish reasonable protection against consequences of hidden dangers, applies only to latent dangers which the contractor or his servants could not reasonably have discovered and of which the owner knew or should have known.

In Hammond v. City of El Dorado Springs, 362 Mo. 530, 242 S.W.2d 479, 31 A.L.R.2d 1367, it was held that the employer-contractee was not liable to the employee of an independent contractor for injuries resulting from conditions obviously dangerous and known to be so by the employee.

In Le Vonas v. Acme Paper Board Co., 184 Md. 16, 40 A.2d 43, the court held as a matter of law that the employer of an independent contractor, who had been engaged to hoist steel beams to the roof of its building, was not liable to employees of the contractor for injuries sustained through electric shocks from wires hanging within four feet of a steel cable used for hoisting the beams. In resting its decision on the ground that there was no duty on the part of the contractee to warn the contractor or his employees that the electric wires were dangerous, the court pointed out that the plaintiffs had the advantage of long experience in structural steel work; that, whether or not they had been warned, they could easily see the wires; and that the defendant did not possess any superior knowledge of the dangerous instrumentality.

Our disposition of the case makes unnecessary a determination of other contentions set forth in appellant’s brief.

The judgment is affirmed.