author: McDonald, judge.

text:
    Jake Benjamin PRUITT, Appellant, v. The STATE of Texas, Appellee.
    No. 35214.
    Court of Criminal Appeals of Texas.
    Jan. 30, 1963.
    Rehearing Denied April 17, 1963.
    Z. D. Allen, Crampton & Crampton, Wichita Falls, for appellant.
    Stanley Kirk, Dist. Atty., Wichita Falls, Stanley M. Vickers and James H. Doores, Asst. Dist. Attys., Wichita Falls, and Leon B. Douglas, State’s Atty., Austin, for the State.
   McDonald, judge.

The offense is attempted rape; the punishment, two years in the penitentiary.

The facts of this case, as developed by the state, show that Officer J. H. Williams, while patroling a little-used road outside Wichita Falls, saw an automobile pull off the road and stop. When he approached it he at first saw no one but then observed appellant getting up from the back seat. The prosecuting witness, a twelve-year-old girl, was lying on her back in the rear of the car, with her clothes disarranged. The officer later observed her putting on a pair of panties.

The prosecuting witness testified that about four or five months before this the appellant had begun playing with her breasts, putting his hand in her panties “and different things.” Her testimony as to attempted penetration was not clear on direct examination but when called as a rebuttal witness she testified to actual penetration on the day in question.

The appellant gave a confession, which was placed in evidence, admitting acts of fondling the prosecutrix. He took the stand, however, and denied any attempts at intercourse with the girl. He also testified that he was incapable of having intercourse and was substantiated by his wife on this point.

The only complaint leveled in the appellant’s brief relates to the jury argument of the prosecution. This question is presented in a formal bill of exception approved by the court. It reflects that in his closing argument the prosecutor said:

“One other thing I might say or I might reiterate if you let this defendant go he will never be tried for this offense again or anything or any lesser offense concerning this particular occurrence that happened on the 29th day of-. * * * (Emphasis ours.)

The appellant objected to this on the grounds that the defendant could he tried for fondling, even though he were acquitted on the charge of attempted rape.

The remark was not that he could not but that he will never he tried for any lesser offense concerning the occurrence.

While the remark might not have been proper, we see no reversible error reflected thereby. We think the prosecutor was telling the jury what the future policy of his office would be. We doubt that any district attorney would pursue the prosecution further in a case of this kind and resort to a fondling prosecution if his efforts failed to secure a conviction under the girl’s testimony as to the occasion she and the appellant were found in the car.

While we recognize the established rule that fondling is not a lesser included offense of rape, from what we have said we do not feel that the complained-of remark constitutes error calling for a reversal.

Finding the evidence sufficient to sustain the jury’s verdict, the judgment is affirmed.


source: Caselaw Access Project

author: WILSON, Justice.

license: Public Domain

text:
    C. W. FRAZIER, Appellant, v. Sgt. B. G. STENNETT, Appellee.
    No. 4178.
    Court of Civil Appeals of Texas. Waco.
    Aug. 8, 1963.
    Rehearing Denied Aug. 29,1963.
    Pat Maloney, San Antonio, for appellant.
    Hobart Huson, Jr., San Antonio, for ap-pellee.
   WILSON, Justice.

In a non-jury automobile collision case the court rendered judgment for defendant. The court made no findings of fact as to negligence or proximate cause, notwithstanding plaintiff’s timely request for the findings and his subsequent written notice of the omission. The court concluded that “no act or omission adduced by the evidence concerning defendant’s operation of his automobile was shown or proved to be negligence as a matter of law” or “shown to be a proximate cause of the collision as a matter of law.”

Plaintiff’s wife was traveling south on a four-lane expressway at dusk. She was alone. The two-lane portion of the highway on which she drove was one-way southbound and was separated from the two-lane northbound portion by a 45 foot median strip. She was traveling, as the court found, at a speed between 50 and 55 miles per hour. The headlights of her car, as well as those of others on the highway, except defendant’s, were burning. The court found her headlights were burning; those of defendant’s were not. It is undisputed, and the court found, that defendant’s vehicle was being driven north in the wrong direction toward plaintiff’s car on the one-way southbound portion of the highway. She discovered defendant’s compact car meeting hers, first seeing it as the court found, when it was 10 or 15 feet in front of her automobile. There was a head-on collision in which she sustained serious injuries. The highway partolman investigating the accident testified, and the court found, that defendant’s car left 154 feet of discernible skid marks. He testified defendant smelled strongly of alcoholic beverages and that a bottle of liquor one-fourth full was in his car. The officer had previously passed defendant, sitting in his parked car at the dead-end of an access road adjacent to the expressway. To reach the southbound lane from this point where as-cess was controlled, defendant was required to enter at an exit, or cross the median strip.

Plaintiff pleaded eight acts of defendant’s negligence as a proximate cause. Defendant pleaded no negligence on the part of plaintiff’s wife; his pleading was a general denial. Defendant did not testify, and tendered no evidence.

The court concluded “as a matter of law the operation by defendant of his automobile in a northerly direction at the place where the collision occurred was not negligence per se.” We sustain appellant’s attack on this determination. The undisputed evidence and the findings of the court establish that defendant violated the provisions óf Secs. 59(b) and 62 of Art. 6701d, Vernon’s Ann.Tex.St., and operated his vehicle contrary to the' statutory duties so imposed. His conduct was so opposed to the dictates of common prudence under the circumstances that it may . be said without hesitation or doubt, that no person of ordinary prudence would have committed it. He was negligent as a matter of law. Texas Co. v. Betterton, 126 Tex. 359, 88 S.W.2d 1039, 1040; Mundy v. Pirie-Slaughter Motor Co., 146 Tex. 314, 206 S.W.2d 587, 590.

It is impossible to determine the basis for the judgment. Having made numerous evidentiary findings, and having failed to find on any other ultimate issue in the case despite request, the court filed “conclusions of law” reciting that no conduct of defendant was proved to be negligence or a proximate cause “as a matter of law.” The court having refused request for further findings, appears to have refused to make additional requested findings (that defendant’s act of driving his car in a northerly direction in the lane of traffic in which plaintiff’s wife was driving was a proximate cause; or even that he was so driving it), on the ground they “were not supported by the evidence.” Neither appellant nor this court can know therefrom whether judgment was based on a holding that such findings were without support in 'the evidence. If it was intended to determine there was no evidence to support the requested findings, the determination is erroneous. If the judgment may be said to rest on fact findings that defendant was not negligent in driving his car in a northerly direction under the circumstances, or that his negligence was not a proximate cause of the collision, we sustain plaintiff’s contention that they were contrary to the overwhelming preponderance of the evidence.

Reversed and remanded.


author: MURRAY, Chief Justice.

text:
    Jim HENERY, d/b/a Jim Henery Body Shop, Relator, v. The.Honorable Philip A. SCHRAUB et al., Respondents.
    No. 14185.
    Court of Civil Appeals of Texas. San Antonio.
    July 10, 1963.
    Rebearing Denied July 31,1963.

      Don L. Baker, Austin, for relator.
    James C. Martin, Walter Groce, Corpus Christi, for respondents.
   MURRAY, Chief Justice.

This is an original mandamus proceeding. Relator, Jim Henery, d/b/a Jim Hen-ery Body Shop, was heretofore given leave to file petition for writ of mandamus against the Honorable Philip A. Schraub, Judge of the County Court at Law No. 2, in Nueces County, ordering and commanding him to reinstate Relator’s judgment dated May 18, 1962, against Respondent James C. Martin, rendered in that court in Cause Number 8896, styled Jim Henery, d/b/a Jim Henery Body Shop v. James C. Martin,

Cause No. 8896 went to trial, before a jury, on March 26, 1962. On March 28th the jury returned a verdict composed of the jury’s answers to the seven special issues submitted. Thereafter Relator submitted a proposed form of judgment to Judge Schraub by mail. After Judge Schraub received the proposed judgment, Respondent James C. Martin and Walter Groce, attorneys for Respondents, advised Judge Schraub that they desired to contest the entry of such judgment, and requested that they be notified of the time for the submission of such proposed order, in accordance with the provisions of the local court rules. Judge Schraub states in his affidavit, attached to Respondents’ answer to the petition for writ of mandamus, as follows:

“ * * * That due to the press of business and the large number of orders submitted to this Court, I inadvertently signed and ordered entered the judgment proposed by the attorney for the Plaintiff in the suit pending in my Court without notifying either the attorney of record or the parties thereof. That a motion for new trial was filed and an amended motion for new trial was likewise filed in said cause and that a hearing thereon was set for June 15, 1962, at 2 o’clock p. m. and the attorney for the Relator as Plaintiff in said suit was notified immediately by mail of the date of such hearing and that on the 13th day of June, 1962, a letter was written by the attorney for Plaintiff and received by me on the 14th day of June, 1962, that he would not be present at such hearing and submitted therewith a Memorandum Brief of the authorities he was relying upon. Such motion was actually heard at that time and was set for hearing, to-wit: on June 15, 1962, at 2 o’clock p. m., and on said date I announced from the Bench in Open Court that the Judgment of May 18, 1962, was set aside and entered a notation to that effect on the docket sheet, signed the same, and ordered it entered in the minutes. I later, on June 28th, made a further notation on the docket to the effect that such judgment was set aside and at the same time signed a formal order in more detail than the docket
order that I signed on June 15, 1962, and ordered the same entered in the minutes, which order had been dictated by me to my official court reporter on the 15th day of June, 1962, but was not written up until the 28th day of June, 1962.
“Since the entry of the above orders, I received a motion from the attorney for the Relator requesting that I vacate the above orders and that I reinstate the judgment that I had previously set aside, but no request has been made for a setting of such motion for hearing.”

It is the above judgment rendered on May 18, 1962, that Relator seeks by this proceeding to have reinstated. We have no jurisdiction or authority to order Judge Schraub to reinstate this judgment, under the showing here made. The original motion for new trial was not filed within the ten-day period required by Rule 329b, Subd. 1, Texas Rules of Civil Procedure. The effect of a motion not filed within the ten-day period is set out in Rule 329b, Subd. 5, which reads as follows:

“ * * * The failure of a party to file a motion for new trial within the ten (10) day period prescribed in subdivision (1) of this rule shall not deprive the court of jurisdiction to set aside a judgment rendered by it, provided such action be taken within thirty (30) days after the judgment is rendered. The filing of a motion for new trial after ten (10) days have expired and before thirty (30) days have expired since the rendition of the judgment shall not operate to extend the court’s jurisdiction over the judgment for a period of more than thirty days from the date of the rendition of judgment.”

It is quite clear that the judgment rendered May 18, 1962, was effectively set aside on June 15, 1962, within the thirty-day period. Accordingly, the petition for a writ of mandamus is overruled.


author: BARROW, Justice.

text:
    AETNA INSURANCE COMPANY et al., Appellants, v. Hugh WEATHERFORD et al., Appellees.
    No. 14130.
    Court of Civil Appeals of Texas. San Antonio.
    June 19, 1963.
    Rehearing Denied July 17,1963.

      Clemens, Knight, Weiss & Spencer, San Antonio, for appellants.
    Green, Green & Wiley, Perry R. Smith, San Antonio, for appellees.
   BARROW, Justice.

This is a suit for declaratory judgment that Leonard P. Smith is an additional insured under the terms of a garage liability policy issued by Aetna Insurance Company to Bailey & Carpenter, Inc., a Texas corporation doing business as an automobile dealership. On August 2, 1957, Smith was operating a 1947 Chrysler automobile which was involved in a collision at the intersection of San Saba and Martin Streets in the City of San Antonio, with a vehicle occupied by appellees. Subsequently appellees secured a default judgment against Smith for sums within the coverage afforded under the policy issued to Bailey & Carpenter, Inc. Following a jury trial, the trial court overruled appellants’ motions for judgment and for judgment non obstante veredicto and rendered judgment for appellees against appellant Aetna Insurance Company for the amount of the default judgment against Smith plus accrued interest. No affirmative relief was sought against appellant Bailey & Carpenter, Inc. Five questions were submitted to the jury and these jury findings are set forth with the evidence pertaining to each.

The primary question presented is, was Smith an “additional insured” under the policy at the time of the accident? The garage liability policy issued by appellant to Bailey & Carpenter, Inc., contains the following provisions pertinent to this appeal:

“III. Definition of Insured. With respect to the insurance under coverages A.B. and D., the unqualified word ‘insured’ includes the named insured and also includes * * * (2) any person while using an automobile covered by this policy, * * * provided the actual use of the automobile is by the named insured or with his permission.”

To determine this, question, it is necessary to review a rather complex series of events which began on July 31, 1957.

Mrs. Donnell, mother of Smith, managed an apartment house at 814 Camden Street, San Antonio. Smith lived in this house and there operated a radio and television repair shop. A few days before July 31, 1957, Robert Duty and wife moved into this house. Duty had another job during the day, but at night assisted Smith in delivering the repaired units. Smith did not have a car, and deliveries were made by use of Mrs. Donnell’s car. This arrangement was not satisfactory to her and Smith agreed to help Duty secure a car which would be used some in Smith’s business. Mrs. Donnell had previously purchased two cars from Bailey & Carpenter, Inc., and she and Smith were both known to its members. About noon on July 31st, Mrs. Donnell and Duty visited the dealer’s lot located at 1006 South Flores Street and Duty became interested in the 1947 Chrysler involved herein. They returned to the apartment house and Smith later telephoned R. L. Harrell, the sales manager of Bailey & Carpenter, Inc. Harrell agreed to sell the car to Smith for $100.00, of which sum $50.00 was to be paid down and a thirty-day note executed for the remaining $50.00. About 6:00 p. m. that day, Smith and Duty went to the lot to close the deal. Harrell had gone home and it was necessary for the salesman to telephone Harrell and get authority to close the deal on those terms, and to place the title in the name of Duty. Smith gave Bailey & Carpenter, Inc., his check for $50.00 and signed the note. Duty signed forms for the application for certificate of title and the required purchaser’s affidavit. The certificate of title remained in the possession of Bailey & Carpenter, Inc. The evidence showed that a dealer has ten days in which to file these papers. The possession of the car was given to Duty and Smith, and they left in the car. The jury, in answer to Questions Nos. 1 and 2, found substantially:

No. 1. That on the evening of July 31, 1957, when the 1947 Chrysler was placed in the possession of Duty and Smith, Bailey & Carpenter, Inc., through its agents, servants, or employees, agreed to sell said automobile to Duty and Smith or either of them.
No. 2. That on the evening of July 31, 1957, when the 1947 Chrysler was placed in possession of Duty and Smith, the said Duty and Smith, jointly or either of them individually, agreed to buy said automobile.

Smith and Duty both testified that the sales agreement was that the check would not be sent to the bank, but would be held until Smith could bring the money to Bailey & Carpenter, Inc., and pick up the check. This testimony was contradicted by both Harrell and the salesman who closed the deal, and the jury, in answer to Question No. 5, found that the agreement to sell was conditioned upon the payment of the $50.00 check by the bank when presented.

On the morning of August 1st, the bookkeeper of Bailey & Carpenter, Inc., took the check to the bank upon which it was drawn and there learned that Smith had no account. Upon learning this fact, Bailey & Carpenter, Inc., began a series of telephone and personal calls to Smith at the apartment house. These calls and visits began shortly after the dealer learned the check was not valid, and continued through August 2, 1957. The exact conversations are somewhat disputed, however, the testimony is clear that Bailey & Carpenter, Inc. was very displeased and indignant with Smith and demanded immediate action. The jury found upon sufficient evidence, in answer to Question No. 3, that Bailey & Carpenter, Inc., through its agents, servants or employees, cancelled its agreement to sell and demanded the immediate return of the automobile prior to the time of the collision.

The whereabouts of Duty and the car during the evening and night of August 1st is not determined by the record. Duty testified he was at the apartment that night, but Smith said he did not see Duty on August 1st. Smith and Duty both testified that Duty returned from work about 5:30 p. m. on August 2d. About 8:00 p. m. Smith advised Duty of the “hot” check and Bailey & Carpenter’s demand for return of the car. Duty then delivered the keys to Smith. Smith did not immediately return the car as demanded, and made no attempt to contact Bailey & Carpenter, Inc., in any way. He testified that he had previous arrangements for a date at 10:00 that night with a waitress employed in a night club located in the 300 block of South Zarzamora Street. He determined that he would go by the club and then have his date follow him in her car to the lot of Bailey & Carpenter, Inc. After securing the keys from Duty, Smith took a nap until about 8 :30 or 9:00 p. m. and then drove the 1947 Chrysler out to the night club. His proposed date was sick and not at work, so he drank two bottles of beer with a friend, and was retracing his route to the night club when the wreck occurred. He subsequently pleaded guilty to a charge of driving while intoxicated. He testified that he was going to return the car to Bailey & Carpenter, Inc., and take a taxicab to the apartment house.

Camden and Martin Streets run generally in an east-west direction, and Flores and Zarzamora Streets run generally in a north-south direction. The apartment house is about five or six blocks north of the intersection of Martin and Flores Streets, and the premises of Bailey & Carpenter, Inc., are about fifteen blocks south of this intersection. Zarzamora Street is west of Flores Street. The jury, in answer to Question No. 4, found that Smith was returning the 1947 Chrysler to the possession of Bailey & Carpenter, Inc., pursuant to its cancellation of sale and demand to return it, when the collision occurred.

Appellant asserts that Smith was not an additional insured at the time of the accident, as he was operating the vehicle as a conditional vendee, and, in any event, it was not being used with the permission of Bailey & Carpenter, Inc. Although there are relatively few cases on this point, the rule appears to be well settled that a conditional vendee does not use the insured vehicle with the consent or permission of the conditional vendor, and therefore is not within the coverage of an omnibus clause of an automobile liability insurance policy as involved in this case. See 36 A.L.R.2d 673 ; 5A Am.Jur., Automobile Insurance, p. 94. The reason for this rule is that the automobile is no longer owned by the insured in such a sense as will, legally speaking, enable the insured to give or withhold his permission or consent to the use of the automobile by the conditional vendee, since the vendor, though retaining title to the car until fully paid for, does so for security reasons only and has no control over the car and no right to its use.

In Rush v. Smitherman, Tex.Civ.App., 294 S.W.2d 873, writ ref., this Court discussed the relationship between seller and purchaser where the formal legal title had not been transferred in accordance with the Texas Certificate of Title Act. The contract to sell was recognized as between the parties and it was held that when the accident occurred, the conditional vendee was not driving the vehicle by force of authority or permission from the seller. See also World Fire and Marine Insurance Co. v. Puckett, Tex.Civ.App., 265 S.W.2d 641.

Appellees do not question this rule, but say that it has no application here, since the jury found the sale was conditioned upon the validity of the check, and when the check failed the sale failed. In our opinion, it is immaterial whether payment of the check was a condition precedent or condition subsequent, in that in any event the possession of Smith and Duty was by virtue of this sales agreement and not by virtue of any consent or permission of Bailey & Carpenter, Inc. Furthermore, the jury found that Bailey & Carpenter cancelled the sales agreement and demanded the immediate return of the car. It is seen also that this right to rescind upon discovery of the “hot” check was recognized by Smith and Duty.

The Supreme Court in Guinn v. Lokey, 151 Tex. 260, 249 S.W.2d 185, approved the rule that a vendor who has been induced by fraud to part with his property is entitled to rescind the sale if he so elects. See also Raby v. Sweetzer, 12 Tex.Civ.App. 380, 34 S.W. 779. Upon this rescission, title in the automobile vested in Bailey & Carpenter, Inc., and it was entitled to possession. Flatte v. Kossman Buick Co., Tex.Civ.App., 265 S.W.2d 643; Deahl v. Thomas, Tex.Civ.App., 224 S.W.2d 293.

This was the relationship of the parties when Smith secured the keys to the automobile from Duty. Appellees urge that Smith became a bailee for benefit of Bailey & Carpenter, Inc. Such a contention ignores the basic fact that possession of the car had been obtained by Smith and Duty through the fraud of Smith in giving a worthless check. This contention further ignores the fact that in order to effectuate the rescission, it was necessary that the car be restored to Bailey & Carpenter, Inc. 77 C.J.S. Sales § 107. Any permission given Smith must be found in this relationship and the jury’s finding that Bailey & Carpenter, Inc., “demanded the immediate return of the 1947 Chrysler.” Unquestionably, Smith did not do this. Appellees urge, however, that any deviation was only a slight or minor one and would not nullify Smith’s initial permission.

The construction of the omnibus claus.e of liability insurance .policies as here involved has been the source of considerable litigation. The constructions placed upon this clause by the various courts have been generally classified under three rules. These are: a liberal rule, by which any use after initial permission is granted is said to be with the permission of the named insured; a strict rule, whereby not only the initial permission is required, but also the particular use being made of the insured vehicle at the time involved, must have been with the express or implied permission of the named insured; and a rule that a minor deviation from the purpose for which the insured granted permission to use the vehicle will not be sufficient to defeat the coverage. Olgin v. Employers Mut. Cas. Co., Tex.Civ.App., 228 S.W.2d 552; 5 A.L.R.2d 600; Appleman, Insurance Law and Practice, §§ 4366-4368.

It appears that Texas does not follow either the liberal or strict rule. Rather, it is our opinion that the cases in this state have applied a rule that the vehicle must be used for a purpose reasonably within the purpose and limits intended by the parties. This rule does not exclude coverage for an immaterial deviation, but requires the use to be reasonably within the intention of the parties at the time consent was given. In Salitrero v. Maryland Cas. Co., Tex.Civ.App., 109 S.W.2d 260, writ ref., it was said that it is not the court’s function to attach greater scope to the bailment than was attached to it by the parties. In Olgin v. Employers Mut. Cas. Co., supra, coverage was denied where the truck, although in custody of an employee, was used in violation of instructions of the employer. The relationship of the parties and the scope of the permission given is very important. Obviously, the same construction could not be applied to the permission given a regular employee operating a company vehicle, or a social friend, as that applied to the permission given a stranger to take a vehicle to a specific location. The relationship of Smith with Bailey & Carpenter, Inc., upon rescission of the sales agreement, because of the “hot” check, requires a narrow construction of the permission given.

When ' we review the actions of Smith in the light of his relationship with Bailey & Carpenter, Inc., it cannot be said that he was operating the 1947 Chrysler with its permission at the time of the accident, under the terms of the insurance policy. (1) Smith was not within the “time” intended by the parties: Bailey & Carpenter, Inc., had been trying to get the car back since the morning of August 1st. Duty returned to the apartment house with the car about 5:30 p. m. on August 2d; Smith obtained the car keys about 8:00 p. m.; the accident occurred between 10:00 p. m. and 10:30 p. m. During this interim, Smith became under the influence of intoxicants. (2) Smith was not carrying out the express or implied “purpose” of his permission : he was given permission for one explicit purpose, the immediate return of the car; it cannot be said that this is any implied authority to combine a date, which was unknown to Bailey & Carpenter, Inc., with the return of the car. (3) Smith was not on the direct “route” as required by the “immediate return of the vehicle”: he had turned off South Flores Street and the direct route, when he turned to the west onto Martin Street and went out to the night club; he was on his return to South Flores Street when the accident occurred. It has been held that the return from a deviation is a part of the deviation. Southwest Dairy Products Co. v. De Frates, 132 Tex. 556, 125 S.W.2d 282, 122 A.L.R. 854; Olgin v. Employers Mut. Cas. Co., supra. This rule is not changed by the jury’s finding of Smith’s intention to return the car. Mos-queda v. Albright Transfer & Storage Co., Tex.Civ.App., 320 S.W.2d 867. Under all these factors, it cannot be said that this was an immaterial deviation.

In view of our holding that Smith was not an additional insured under the policy, it is not necessary to discuss appellants’ other points which complain of procedural errors.

The judgment of the trial court is reversed and judgment here rendered that ap-pellees take nothing by this suit and that appellants recover their costs.


author: DIXON, Chief Justice. BATEMAN, Justice

text:
    The TRAVELERS INSURANCE CO, Appellant, v. EMPLOYERS CASUALTY CO, Appellee.
    No. 16135.
    Court of Civil Appeals of Texas. Dallas.
    June 28, 1963.
    Rehearing Denied July 26,1963.

      Gay & Meyers, Austin, for appellant.
    Leachman, Gardere, Akin & Porter, and Gordon H. Rowe, Jr., Dallas, for appellee.
   DIXON, Chief Justice.

This case involves the interpretation and application with reference to particular facts of a Texas Standard Form automobile liability policy covering trucks while unloading ready-mixed concrete.

The policy in question was issued by Employers Casualty Company, hereinafter called Employers, to Capitol Aggregates, Inc., hereinafter called Capitol. The latter company makes and sells ready-mixed concrete. The concrete is mixed while being transported in a large revolving drum on a truck.

The accident which gave rise to the present controvery occurred at the site of the construction of a new high school building in Austin, Travis County, Texas. In the performance of Capitol’s contract with the general contractor, one of Capitol’s trucks arrived at the construction site, lowered a chute at the rear of the truck which caused the ready-mixed concrete to flow down the chute into a bucket attached to a crane. The bucket was then moved by the crane to a form into which the concrete was emptied from the bucket. In the course of moving a bucket of concrete to the form the crane collapsed, killing three employees of the general contractor.

The bucket and crane were not owned or operated by Capitol. They were owned and were being operated by Borders Steel Erection Company, hereinafter called Borders. The latter company was the concrete subcontractor on the construction project. There was no privity of contract between Capitol and Borders. Capitol’s contract was with the general contractor.

Travelers Insurance Company, appellant, hereinafter called Travelers, had issued a Texas standard form contractor’s general liability policy to Borders. The beneficiaries of the three men killed brought suit against Borders and their claims were settled by Travelers for $61,-020.30.

Thereafter Travelers brought suit in Travis County against Employers seeking a ruling that primary coverage of the accident was afforded under the policy issued to Capitol by Employers because the policy covered the use of Capitol’s trucks while loading and unloading. The two insurance companies are agreed that the payment of $61,020.30 was a reasonable settlement.

Appellee Employers filed a plea of privilege asking that the suit be transferred to Dallas County where appellee has its principal office. Travelers filed a controverting affidavit alleging that venue properly lay in Travis County under subd. 23 of Art. 1995, Vernon’s Ann.Civ.St, which permits suit to be maintained against a corporation in the county where the cause of action arose.

Appellee’s plea of privilege was sustained and on appeal the order was affirmed. Travelers Insurance v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235, wr. ref. n. r. e. The Court of Civil Appeals at Austin upheld the trial court’s implied finding that appellant had failed to prove a cause of action, therefore subd. 23 Art. 1995, V.A.C.S. could not be invoked to cause the case to be transferred to Dallas County.

In a trial in Dallas County on the merits before the court without a jury, judgment was rendered in favor of Employers that Travelers take nothing by its suit.

Travelers rests its appeal on one point of error. It alleges that the trial court erred in holding that “the unloading of the ready-mixed concrete was completed at the instant it was emptied from the trans-mix truck into a bucket attached to a crane which was to carry it to a place it would occupy in the slab, instead of holding that the unloading continued while the concrete was carried in a continuous movement from the truck to the form.”

It is generally agreed that in policies such as that here under consideration the phrase “including loading and unloading” is a phrase of expansion and extension. But the decisions are not in agreement as to the exact extent of the expanded coverage. ,

One line of decisions follows the “coming to rest” theory. The substance of this theory is that the unloading “includes the process of removing or lifting the article from the truck up to the point where the article is first set down or ceases in the movement which took it from the truck.” Pacific Auto Ins. Co. v. Commercial Casualty Ins. Co., 108 Utah 500, 161 P.2d 423, 160 A.L.R. 1251 (1945) and annotations following.

The other line of decisions follows the “complete operation” theory, which appellant contends has been adopted as the rule in Texas. Red Ball Motor Freight v. Employers Mut. Liability Ins. Co., 5 Cir., 189 F.2d 374; Allstate Ins. Co. v. Valdez, D.C., 190 F.Supp. 893.

However that may be, the authorities in other jurisdictions are apparently not in harmony as to the meaning of the “complete operation” theory. Some cases hold that the theory means that the unloading continues until an article, such as concrete, reaches its “ultimate destination,” or “the place of its use.” Lamberti v. Anaco Equipment Corp., 16 A.D.2d 121, 226 N.Y.S.2d 70; Wagman v. American Fidelity & Casualty Co., 304 N.Y. 490, 109 N.E.2d 592.

Other cases hold that a “complete operation” theory means that the unloading continues “to the place where the employees of insured turn them over to the party to whom they are to make delivery.” Pacific Auto Ins. Co. v. Commercial Casualty Ins, Co., supra. This.is the holding in American Employers Ins. Co. v. Brock, Tex.Civ.App., 215 S.W.2d 370, wr. ref. n. r. e., a Texas case relied on by appellant.

We are of the opinion that under the particular circumstances of this case we must hold that the unloading, of Capitol’s truck had been completed before the accident occurred, therefore the judgment should be affirmed. We base our conclusions on four grounds, which we shall now state.

(1) We believe we are bound by the holding of oúr Supreme Court when it declined to grant a writ of error in Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235 with the notation “refused, n. r. e.” The notation means that though the Supreme Court may not have agreed with everything said in the opinion of the Austin Court of Civil Appeals, it did agree that the judgment of the Court of Civil Appeals was correct. The only possible ground the Supreme Court could have had for holding that the judgment was correct was that Travelers had failed to plead and prove a cause of action as required by subd. 23 of Art. 1995, V.A. C.S. Such a holding necessarily implies that the unloading had been completed at the time of the accident, for it is undisputed that the accident occurred and that it occurred in Travis County. If the unloading had not been completed at the time of the accident the judgment sustaining Employers’ plea of privilege could not have been correct.

Appellant in seeking to avoid the effect of the Supreme Court’s holding says that the judgment in Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235 has no binding effect because it was merely an order entered after a venue hearing at which less evidence was introduced than in the trial on the merits. We cannot agree with this contention.

When it is sought to retain venue in a county where the cause of action arose under subd. 23 of Art. 1995, V.A.C.S., it is necessary at the venue hearing to plead and prove a cause of action. Victoria Bank .& Trust Co. v. Monteith, 138 Tex. 216, 158 S.W.2d 63, 67; Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91.

As to the evidence, the only difference in the evidence introduced at the venue hearing and at the trial on the merits was that at the hearing on the merits a general contractor named George Brock testified. He stated that the ready-mixed concrete, because of its nature and quality, begins to harden immediately upon its coming to rest, hence is not a storage item “except at the place where you finally want it to come.” However Brock’s testimony was only cumulative of the testimony given at the venue hearing by H. W. Haile, Jr., Capitol’s Vice-President and Manager, which testimony was read into the record at the trial on the merits. Haile testified that it is not practicable to “stockpile” mixed concrete.

(2) The Austin Court of Civil Appeals in its opinion above referred to holds that Texas follows the “coming to rest theory.” Appellant, as we have stated, contends that Texas follows the “complete operation” theory. Even if we were to accept appellant’s contention in that regard we would nevertheless hold that the Texas version of the “complete operation” theory does not go so far as to embrace the “ultimate destination” doctrine of Lamberti v. Anaco Equipment Corp., 16 A.D.2d 121, 226 N.Y.S.2d 70 and other cases. It adheres to the principal announced in American Employers Ins. Co. v. Brock, Tex.Civ.App., 215 S.W.2d 370, to the effect that the unloading is completed when the material being unloaded is turned over to the party to whom delivery is to be made. In this case the party was Borders, the subcontractor acting for and in behalf of the general contractor with whom Capitol had its contract. The actual unloading of the material from Capitol’s truck into Borders’ bucket had been completed and Borders’ crane collapsed after the concrete had been turned over to Borders.

Appellant relies, among others, on both the Brock case above cited, and the case of Panhandle Gravel Co. v. Wilson, 248 S.W. 2d 779. The facts in the above two cases differentiate them from the present case.

In the Brock case the facts undoubtedly brought the case within the loading provision of the policy. The opening and closing of a sidewalk elevator shaft by the insured’s employees was certainly a part of the loading process whereby the employees of the truck owner undertook to load a can of garbage from the elevator to the truck. However as we have already pointed out, the Brock case by reason of its pronouncement as to the law of “unloading” seems to us actually to support ap-pellee’s position as to the law applicable in this case.

In the Wilson case a large rock fell off a truck while it was being driven on the highway a considerable distance from the gravel company’s plant. But as appellant itself says in its brief the accident came about “Because of the negligent manner in which it [the truck] was loaded.” It is plain that the negligent loading of the truck had a causal connection with the accident in the Wilson case, which fact seems to us to distinguish it from the present case.

(3) We think also that coverage under the “loading and unloading” provisions includes a requirement of showing some causal connection between the loading or unloading and the accident. Travelers Ins. Co. v. Employers Casualty Co., Tex. Civ.App., 335 S.W.2d 235; General Accident Fire & Life Assurance Corp. v. Jarmuth, 32 Misc.2d 424, 150 N.Y.S.2d 836; Caron v. American Motorists’ Ins. Co., 277 Mass. 156, 178 N.E. 286; Perry v. Chipouras, 319 Mass. 473, 66 N.E.2d 361; Liberty Mutual Ins. Co. v. Hartford, etc., 7 Cir., 251 F.2d 761. In this case, so far as the record shows, it was a defect in Borders’, crane which caused the accident, not anything done in the unloading of Capitol’s truck. The connection between the accident and unloading of the truck seems too remote to include coverage of the accident under Capitol’s policy.

(4) If there is a fact question involved in this case (we do not say there is) we must uphold the implied finding of the Austin Court of Civil Appeals and the trial court here that Capitol’s unloading process had been completed when the accident occurred. Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ.App., 335 S.W.2d 235; Providence Washington Ins. Co. v. Smulcer Trucking Co., 302 S.W.2d 255.

There is evidence to support such a finding. We quote portions of the testimony of Haile:

“Q. Who was the general contractor on that job?
“A. M. Z. Collins Construction Company.
“Q. Did you have a subcontract from Collins?
“A. A verbal subcontract, yes.
“Q. What did that contract embrace?
"A. To furnish ready-mix concrete to him for the construction of that project.”
* * * * * *
“Q. The concrete on the job, what did your contract embrace there?
“A. Our agreement was to bring ready-mixed concrete of a certain specification to the job to be used by the general contractor in the construction.”
⅜ ⅜ ⅝ ⅜ ‡ ⅜
“Q. After it is put into the bucket or conveyor, do your company or employees have any further control over the concrete?
“A. Absolutely none whatsoever.”
⅝ ⅜ ⅝ ⅝ ⅜ ⅜
“Q. On this occasion when the boom buckled and fell on these men, did you or your company have any control whatsoever over that boom?
“A. Absolutely none.
“Q. Will you state whether or not, even after your trucks have driven off, that (sic) disposition is made of the buckets of concrete.
“A. On some occasions I am sure that is true. We can empty our concrete into the bucket and drive our truck away from the job site, and then the concrete bucket can very conceivably be moved and dumped into the forms.
“Q. Tell the court whether or not conveying this bucket that the concrete has been emptied into up to the place where the concrete is to be emptied from the bucket is part of your transporting job?
“A. No, sir; absolutely not.”
* * * * * *
“A. * * * if he wants to start piling it on the ground, it is his, as soon as it gets out of the truck.”

Appellant’s point on appeal is overruled.

The judgment of the trial court is affirmed.

WILLIAMS, J., concurs.

BATEMAN, Justice

(concurring).

I concur in the result reached, but only on the first ground mentioned in the main opinion. We are in agreement that our Court is bound by the conclusions of the Austin Court of Civil Appeals in Travelers Ins. Co. v. Employers Casualty Co., Tex. Civ.App., 335 S.W.2d 235, because of the refusal of the writ of error, “No Reversible Error”; otherwise this would be a dissenting opinion since it is my earnest conviction that the conclusion of the Austin Court, that appellant failed to prove a cause of action, was wrong. Likewise, I am unable to agree with the second, third and fourth grounds for affirming the judgment, as set forth in the main opinion. In discussing those grounds I shall use the same numbers to avoid verbiage.

(2) There seems to be considerable confusion among the few Texas authorities as to which of the two theories of construction the Texas Courts follow. The Chief Justice speaks of “The Texas version of the ‘complete operation’ theory” but the Austin Court of Civil Appeals, in Travelers Ins. Co. v. Employers Casualty Co., Tex.Civ. App., 335 S.W.2d 235, 238, says: “We do not believe the cases follow the ‘completed operations’ theory, but rather the ‘coming to rest’ theory.” Our own Court, in American Employers’ Ins. Co. v. Brock, Tex.Civ. App., 215 S.W.2d 370, err. ref. n.r.e., set forth the rationale of the two theories and quoted from some of the decisions expounding each of them, but the only principle of law actually announced in that case was that, since the language of the policy provision in question was ambiguous and capable of more than one construction, the court should interpret the same liberally in favor of the insured and strictly against the insurer. It is true that in the early part of the opinion it was said that appellant contended for the application of the “coming to rest” theory, while the appellee relied upon the “complete operation” theory; the decision was in favor of the appellee; therefore it might be said that the court favored the latter theory. But, as stated above, the Austin Court says we follow the other. Which theory do we follow? It is difficult to say, in the absence of a definitive expression by our Supreme Court.

In the main opinion it is said that “It (Texas) adheres to the principle announced in American Employers Ins. Co. v. Brock, Tex.Civ.App., 215 S.W.2d 370, to the effect that the unloading is completed when the material being unloaded is turned over to the party to whom delivery is to be made. In this case the party was Borders, the subcontractor acting for and in behalf of the general contractor with whom Capitol had its contract.” I do not read the opinion in the Brock case as being to that “effect,” but that is beside the point. The point is that I am fearful that the Chief Justice has lost sight of the fact that here we are considering Borders, not Capitol, as the “insured” under the Employers policy; we are trying to determine whether Borders was “using” the ready-mixed concrete truck by unloading the same, within the terms of the policy.

If we are to follow the “complete operation” theory, and if it is correct to say that “the unloading is completed when the material being unloaded is turned over to the party to whom delivery is to be made,” then it seems to me to be inescapable that in this case the unloading had not been completed when the accident happened because it had not been turned over to the general contractor, the “party to whom delivery is to be made.” It will not do merely to say that the concrete was turned over to the general contractor, Collins, by being turned over to Borders who was acting for Collins, thus making the operation complete. This presupposes that Borders was in some way made the agent of Collins to receive the wet concrete from Capitol, but I find neither pleading nor testimony of any such instruction or authorization in the record or in fact anything to indicate clearly for whom Borders was acting. But even assuming that Borders was so authorized, we must not lose sight of the fact that it is Borders’ alleged negligence in handling the concrete with a defective crane that was made the basis of the original claims, and that this occurred while Borders was removing the concrete from the truck to the forms. I say that in so removing the concrete Borders was actually unloading the truck.

The testimony quoted in the main opinion and in that of the Austin Court of Civ* il Appeals merely establishes that Capitol’s responsibility for, and its control over, the concrete ceased as soon as it left the truck; also that Capitol had no control over the crane. As I see it, these facts are wholly immaterial, for it is not Capitol’s conduct which is under scrutiny here. No claim was made by anyone against Capitol. The question here is: Who unloaded the truck? Presumably Capitol’s employees turned the spigot or valve which permitted the concrete to flow down the chute into the bucket; but suppose this employee had merely driven the truck to the site and said to Borders or his employee: “Here is the concrete. It will flow down the chute if you will turn that spigot.” If Borders turned the spigot would anyone question that he was unloading the truck? One might reply: “No, but the unloading was completed when the concrete was loaded in the bucket.” But what if instead of using the crane and bucket, Borders put the lower end of the chute into the upper end of a trough, or on a conveyor belt, leading to the forms. Could it then be properly said that the unloading was complete when it first touched the trough or belt? Or, wouldn’t it be more reasonable to say that the unloading process was not complete until the concrete reached its ultimate destination? I think this would be true no matter who actually turned the spigot.

As I see it, the principle of law involved would be the same if the truck were an open-bed type of truck with the material lying in the bed of the truck and the bucket of the crane was designed to scoop up the material and carry it to the forms, instead of having the material flow down a chute into the bucket. The principle should be the same as if one of Borders’ employees was standing in the open bed of the truck and throwing the material out from the truck with a shovel directly into the forms. If such a workman should scoop up a quantity of the material and hold it in his shovel a second until he determined exactly where he should deposit it, wouldn’t it be just as reasonable to say that the material had “come to rest” in the shovel as to say, as the Austin Court and the main opinion of this court have said, that the material “has come to rest” when it flows down the chute into the bucket?

The facts are almost identical with those in Lamberti v. Anaco Equip. Corp., 16 A.D. 2d 121, 226 N.Y.S.2d 70, 73. There the ready-mix truck contained more concrete than enough to fill the bucket of the crane. The concrete would flow down the chute into the bucket as in this case, and the crane would carry the bucket to the forms, dump the concrete therein and return for another bucketful, and on the third trip from the truck to the forms the concrete was accidently spilled on the plaintiff, injuring him. The question involved in that case was, as it is here, whether the operators of the crane and bucket were “using” the ready-mix truck by unloading it, thus bringing themselves under' the coverage of the automobile policy issued to the owners of the ready-mix truck. The court held that they were covered, using the following language, which I think very significant in the light of the testimony quoted in the main opinion in our case:

“It is not unfair to the insurance carrier to hold that the delivery function was not complete until the concrete reached its ultimate destination. Particularly so in the case of mixed concrete where there could be no intermediate place of sojourn. By the very nature of that material it is essential that it be taken directly from the delivery truck to the place at which it becomes a permanent portion of the construction. Concrete, unlike lumber or other building materials, cannot be stored at the job site for later incorporation into the structure. It must be deposited immediately at its permanent resting place. It is for that very reason that a transit-mix truck is used in this type of operation. If it were the intention of the insurer to confine its liability to a more circumscribed aspect of the loading process. language appropriate to such end could have been employed.”

In another place in the same opinion we find this language: “The sole test is whether the means used was in the process of unloading. In this case the bucket was merely an instrument to effect the unloading.”

It seems to me that the facts of the Lam-berti case are so like those in this case, and the logic of the Lamberti opinion so reasonable and sound, that it should be followed in this case, making it unnecessary to base the holding, as we did in the Brock case, upon the principle that the language in question is ambiguous and should be construed strictly against the insurer, which principle of construction should be employed as a last resort. But if need be in this case, that principle could easily be employed to reach the same result as reached in the Lamberti case.

We used the principle in the Brock case to establish coverage under a similar clause, and in that case nothing had been either loaded onto the truck or unloaded off of it at the time of the accident. Why should it not be used in this case, where the accident occurred during the process of removing the material from the truck to the forms ?

If it is now proper to say there is no coverage or liability because the unloading had been completed when the accident occurred, we should have said in the Brock case there is no coverage 6r liability because the loading had not commenced when the accident occurred.

It seems to me that appellee would be liable under either of the two theories. It was not a “complete operation” when the concrete was first placed in the bucket, or until it reached “its permanent resting place.” Moreover, there was no “coming to rest” until that time, for a material which cannot be stockpiled, even temporarily, but must be kept in a constant state of agitation until it reaches its final resting place in the permanent structure of which it is to be a part, cannot properly be said to have “come to rest” in the bucket which is to transport it away from the truck as soon as it is filled. I cannot agree to the conclusion that the unloading was completed as soon as the concrete left the confines of the truck.

(3) In the main opinion it is pointed out that “it was a defect in Borders’ crane which caused the accident, not anything done in the unloading of Capitol’s truck,” but I submit that this begs the question, which is: Does appellee’s policy insure Borders against liability for its negligence?' The type of negligence is immaterial. If Borders was engaged in unloading the concrete truck when the accident occurred the causal connection is clearly established.

(4) The main opinion speaks of our duty to uphold “the implied finding of the trial court that Capitol’s unloading process had been completed when the accident occurred,” but as pointed out above, we are not here concerned with Capitol’s unloading process, but with Borders’ unloading process. Moreover, the “implied finding” is not of a fact, but a conclusion of law which controls the entire case.

In conclusion, I do not have any way of knowing what the intent of the parties to-this insurance contract was except by the language used in the policy. There are numerous other out-of-state cases which I think are quite persuasive, such as Wagman-v. American Fidelity & Casualty Co. (NY), 304 N.Y. 490, 109 N.E.2d 592, which seems-to be a leading case on which the court in-the Lamberti case strongly relied; also-Pacific Auto. Ins. Co. v. Commercial Casualty Ins. Co., 108 Utah 500, 510, 161 P.2d 423, 160 A.L.R. 1251, wherein the Utah court said this: “Normally a delivery is not completed until the deliveror has finished his handling of the article, has completed his assignment or task of putting the articles into the possession of the receiving party.” In our case, the general contractor, M. Z. Collins Construction Company, is the “receiving party” and Borders is the “deliver-


author: PALMORE, Judge.

text:
    Jack S. WALKER et al., Appellants, v. VALLEY PLUMBING, INC., Appellee.
    Court of Appeals of Kentucky.
    June 28, 1963.
    Richard C. Oldham, Clinton R. Burroughs, Louisville, for appellant.
    George E. Dudley, Louisville, for ap-pellee.

      . The Cather & Son claim is not before us on this appeal

   PALMORE, Judge.

By written contract dated May 7, 1957, one R. E. Pearson agreed to construct a home for the appellants, Jack Walker and wife, and convey it to them on completion. The work was completed early in July and the transaction was closed on July 8, 1957, by payment of the balance of the purchase or contract price and conveyance of the property to the Walkers. When the Walkers moved into the new home on September 9, 1957, they discovered that the outside water faucet was connected to the hot water and the dishwasher was connected to the cold water only. After an unsuccessful attempt to secure corrective action through Pearson they ascertained that Valley Plumbing, Inc., the appellee, had done the plumbing work and thereupon contacted Valley, which proceeded to correct the defect during the first week of October, 1957.

Unbeknown to the Walkers when the correctional work was ordered by them and done, Valley had not been paid by Pearson and was owed $1395 for the plumbing job on the house. Pearson had given to the Walkers at the time of closing on July 8, 1957, an affidavit that all laborers, material-men and subcontractors had been paid in full. Valley had neither filed in the county clerk’s office a statement pursuant to KRS 376.010(2) that it had furnished or expected to furnish labor or materials, nor had it notified anyone pursuant to KRS 376-010(3) of its intention to hold the property liable for its claim. But on December 11, 1957, within 75 days after doing the slight additional work in October of 1957, Valley did proceed to notify the Walkers and record a statement of its lien claim. This was the first actual notice to the Walkers that Valley had not been paid.

In this proceeding brought by Valley to enforce its lien claim the chancellor held that the Walkers, as equitable titleholders, had been “owners” of the property since the date of the contract in May of 1957, hence were not intervening bona fide’ purchasers for value and without notice entitled to protection by virtue of KRS 376.010(2); that the services performed in October of 1957 were the last work done pursuant to the plumbing contract; and that the notice given to the Walkers on December 11, 1957, being within 75 days thereafter, complied with KRS 376.010(3), Accordingly, judgment was entered sustaining the lien for $1395. We considered that the questions involved were of sufficient novelty and general interest to sustain the Walkers’ motion for appeal under KRS 21.080 and RCA 1.180.

It is interesting to note that in this same case the chancellor disallowed a similar lien claim, asserted by one Cather & Son, on the ground that the Walkers were bona fide purchasers under KRS 376.010 (2) , The ground of distinction was that Valley “proceeded against the Walkers as owners while Cather & Son did not.” In other words, the protection enjoyed by the Walkers on July 8, 1957, by virtue of KRS 376.010(2) was made subject to Valley’s right under KRS 376.010(3) to give notice within 75 days after completion of its work and was erased by the events of September and October, 1957. This cannot be.

The lien conferred by KRS 376.-010(1) is subject to several limitations. One is that a statement containing the information specified in KRS 376.080 must be recorded within 6 months after the claimant has ceased to labor or furnish materials. Another is that if the claimant has not contracted directly with the owner he must give him written notice within 75 days after the last item of his material or service has been furnished. KRS 376.010(3). Still another is that his lien will lose priority to “a mortgage or other contract lien or bona fide conveyance for value without notice, duly recorded” unless he shall theretofore have recorded a statement that he has furnished or intends to furnish labor or material, showing the full amount thereof. KRS 376.010(2). All of these limitations are consistent. Compliance with the recordation and notice provisions of KRS 376.080 and KRS 376.010(3) will preserve and perfect the lien, but to protect it against a bona fide purchaser for value without notice KRS 376.010(2) expressly requires the claimant to get to the court house first.

That the Walkers were bona fide purchasers for value without notice within the meaning of KRS 376.010(2) seems clear from a reading of Collier v. Dillon, 313 Ky. 244, 230 S.W.2d 617 (1950). In that case Dillon, by contract with Alford, was building on Alford’s lot a house for which he was to be paid on monthly estimates. The Colliers contracted with Alford to buy the property on completion of the building. In order to protect their down payment the Colliers took from Alford a second mortgage, which they recorded in February of 1948. In September of that year it became apparent that Alford would be unable to pay for completion of the house, and in October Dillon gave to both Alford and the Colliers written notice of his intention to hold the property liable. Dillon thereafter recorded his lien statement within the time prescribed by KRS 376.080. Under these circumstances it was held that although the Colliers knew Dillon was building the house and was being paid monthly pursuant to progress estimates, and knew that Alford was borrowing money to make the payments, their mortgage was protected by KRS 376.010(2) and had priority over Dillon’s construction lien. It was sufficient that the Colliers did not have actual notice, when their investment was made, that Dillon had not been paid. In the instant case the Walkers had no actual notice until December 11, 1957, that Valley had not been paid. Under the same principle, regardless of whether they were equitable owners (or even if they had been part legal owners) before that time, their investment on July 8, 1957, was entitled to the protection of KIRS 376.010(2).

We do not attach great significance to the “ownership” status of the Walkers with respect to KRS 376.010(2). Whatever it was, they innocently put up money for a further interest in the property and recorded their title instrument before having actual or constructive notice of Valley’s claim. The “ownership” of property is not an inseverable entity that must pass all at once. It may be acquired piecemeal, wholly or in part, and there is no reason why one who successively acquires separate interests in it cannot be a bona fide purchaser for value without notice as to each or any of the interests so acquired. The fact that the Walkers obtained their title in two stages, first by contract, with a down payment in May and then by deed upon payment in full in July, makes no difference in principle. On each of these two occasions they parted with money in good faith and without notice. Therefore, the interest or quantum of title obtained by them in each instance, whether it be styled legal or equitable, was equally subject to the coverage of KRS 376.010(2) upon recordation.

Hannan v. Handy, 104 Conn. 653, 134 A. 71, 47 A.L.R. 259 (1926), cited by appel-lee in support of a contrary view, apparently did not involve a special statute comparable with KRS 376.010(2) protecting interests acquired in good faith for value and without notice.

T. W. Spinks Co. v. Pachoud Bros., 263 Ky. 119, 92 S.W.2d 50 (1936), and Montgomery v. Allen, 107 Ky. 298, 53 S.W. 813 (1899), in which it was held that the vendee under a contract of purchase and sale is the “owner” within the meaning of the statutes in question, are distinguishable by the circumstances that in each of them the lien claimant dealt with the executory vendee. They stand for the proposition that a purchaser under a contract of sale, if he is in possession of the property and the vendor consents to his contracting for the construction of improvements thereon, is so far an owner that the lien of construction contracts made by him will have priority over the title or lien of the vendor. In this case Valley did not contract with the Walkers.

The distinction drawn by counsel between Collier v. Dillon, 313 Ky. 244, 230 S.W.2d 617 (1950) and this case, in that the Walkers “dealt with” Valley whereas the Colliers had not dealt with the contractor Dillon, is not tenable. Whatever lien Valley ever had in this property arose before, and was cut off when, the Walkers perfected their interest as bona fide purchasers by recording the deed of conveyance in July of 1957. We recognize the principle that minor finishing work done at the request of the owner may revive and renew the running of the time limits for notice and recording under KRS 376.010(3) and KRS 376.080. National Surety Co. v. Price, 162 Ky. 632, 172 S.W. 1072 (1915); Akers & Co. v. Weil, 251 Ky. 689, 65 S.W. 2d 712 (1933); City of Ashland v. Ben Williamson & Co., 294 Ky. 446, 171 S.W. 2d 968 (1943). These, however, were cases in which it was the same owner against whom the claimant was originally entitled to assert a lien, not a new owner having no notice or knowledge of the unpaid claim, and against whom the statute provided no assertible lien after recording of his deed. Surely it must be recognized that it would be grossly unjust to saddle a $1395 liability on the Walkers simply on the basis of their innocent and unguarded act in requesting Valley to remedy a defect in the work done by it for Pearson and for which they already had paid Pearson. Indeed, in a true sense their request upon Valley was derivatively the action of Pearson himself, as they had no claim on Valley except through him. As to the Walkers, Valley had no lien in the first place, hence had .nothing to revive or renew by the work done in October of 1957. There was no such “dealing” by the Walkers with Valley as would, in our opinion, raise against their interest a lien where none existed before.

The judgment is reversed with directions that the lien claim of Valley Plumbing Company be disallowed.

      . See, for example, KRS 376.020.


text:
    AMERICAN NATIONAL INSURANCE COMPANY, Appellant, v. Ruby M. ALLEN, Appellee.
    No. 4154.
    Court of Civil Appeals of Texas. Waco.
    Aug. 8, 1963.
    liehearing Denied Aug. 29,1963.
    Beard, Kultgen & Beard, Waco, for appellant.
    Dunnam & Dunnam, Waco, for appellee.
   WILSON, Justice.

Appellee, as beneficiary, recovered judgment on a jury verdict in her action on a life insurance policy issued by appellant August 16, 1961 insuring the life of her husband.

Insured applied for the insurance August 4, 1961, and was given a medical examination by Dr. Lattimore, a general practitioner employed by appellant for that purpose. His report recited that after careful inquiry and examination of insured he found no evidence of past or present disease of heart or blood vessels. In his written statement to the medical examiner insured answered “No” to questions as to whether he had ever had or been treated for dizziness, high blood pressure, diseases of the heart, chest pain, or other physical disorder (except “glasses”) and answered that he was in good health. He answered “Yes” to the question: “Have you ever had X-ray, electrocardiogram, blood sugar, or any special laboratory tests” ? The explanation to this answer as written by Dr. Lattimore and signed by insured recited, “Chest X-Ray, State Health Department, Mobile Unit, 1956 at St. Petersburg, Fla., found O. K.” and “nervous indigestion a week or 10 days 1957. Full recovery lost 2 or 3 days. No recurrence. No sequelae. Dr. C. C. Smith, Waco, Texas.”

There was evidence to show that insured consulted Dr. Smith, a heart specialist, in May, 1957, complaining of recurrent chest pains and numbness radiating into left shoulder and arm, and that his electrocardiogram was “not normal”;- that he gave a history of previous chest pain diagnosed by a Houston physician- as coronary artery disease. Dr. Smith prescribed an antispasmodic and pavorel phosphate, drugs used in treatment of coronary diseases to dilate the coronary blood vessels. In November, 1957 he was admitted to a hospital with abnormally high blood pressure under confirmed diagnosis of acute myocardial infarction and arteriosclerotic heart disease, having suffered an occlusion. After 10 days’ treatment he was dismissed from the hospital, and was at home about 30 days. A part of the heart muscle had died, being replaced by scar tissue. The following January and November he was again examined after complaining of continued substernal chest pain. In July, 1959 he reported to Dr. Smith an attack of severe weakness with cramping, but the examination showed his condition to be normal. In March, 1960 insured was again examined by Dr. Smith, complaining of a severe chest pain and symptoms the doctor said were commonly associated with heart disease, for which medication used in treating heart disease was prescribed. No evidence of acute myocardial damage was noted. In March, 1961 he was again examined, with symptoms of weakness, dizziness and radiating chest pain. In November of that year Dr. Smith again examined him, the complaints being the same. An antispasmodic, belladona, phenobarbital and duotrate for treatment of heart disease were prescribed. He was then suffering from heart disease, according to Dr. Smith. Insured was not seen by Dr. Smith from that time until he died in the hospital in July, 1962, the cause of death being given as acute myocardial infarction. Dr. Smith states that in his opinion insured was suffering from arteriosclerotic heart disease “from 1957 on”; that heart damage from a first such attack reduces heart reserve so that succeeding attacks are more likely to be fatal; that there was no way to cure the arteriosclerotic condition after it occurred.

The beneficiary testified she never knew insured had heart trouble; that he never had an attack of indigestion that caused him to go to a doctor, but he went to the doctor in 1957 because “he lifted too heavy a load of tar and he was supposed to climb this ladder with it and he went for heart strain”; that when insured went to the hospital the doctor told her “he had just strained some ligaments around his heart and all from lifting too heavy”, and that her husband was “aware that this was what was wrong with him.”

The physician making the insurance medical examination for appellant testified he did not talk to Dr. Smith at the time of making his report. Dr. Smith testified he had no recollection of having talked to the examining doctor.

Appellant says it is entitled to judgment because the jury found insured “intentionally answered ‘no’ to the question” in the application inquiring whether he had ever had chest pain or disease of the heart; that the answer was false; that insured knew or should have known the answer was false; that insured so answered for the purpose of inducing appellant to issue the policy; and that the company relied on the answer in issuing the policy. The jury also returned a negative answer to an issue inquiring whether the condition of insured’s heart and arteries when the policy was issued was one of the causes of his death, but answered affirmatively that the acute myocardial infarction he sustained in 1957 made his death from a' later myocardial infarction more likely.

Appellant says that these findings by the jury established its pleaded defense and precluded recovery. Appellee replies that it was necessary to obtain a specific finding of “intent to deceive”, and that without this finding the defense is incomplete. Ap-pellee made no objections to the charge. Appellee relies on Pioneer American Ins. Co. v. Meeker, Tex.Civ.App., 300 S.W.2d 212, writ ref. n. r. e.; Roosth v. American General Life Ins. Co., Tex.Civ.App., 330 S.W.2d 652, writ ref. n. r. e.; Universal Life & Acc. Ins. Co. v. Burden, Tex.Civ.App., 294 S.W.2d 855, no writ; Colorado Life Co. v. Newell, Tex.Civ.App., 78 S.W.2d 1049, writ ref.; Great Southern Life Ins. Co. v. Doyle, 136 Tex. 377, 151 S.W.2d 197; American Central Life Ins. Co. v. Alexander, Tex.Com.App., 56 S.W.2d 864. These and other decisions, it is true, contain language to the effect that the misrepresentation must have been made with intent to deceive. None of these cases, with one exception to be noted, may be said to support appellee’s position that it is necessary to submit this element as an issue so worded.

In the Alexander case the insurer did not plead that “the insured’s answers were intentionally made”, and the trial court’s action in sustaining special exceptions was held to be proper. In the Doyle case the jury specifically found insured did not know her answers were false and that she did not make them for the purpose of inducing the company to insure. In Meeker, a suit to cancel, no issue was submitted on intent except as to intent to deceive, and the jury made a negative finding. There were further findings, however, that insured did not know the answers were false, that he could not have known that a physician had found his blood pressure was above normal, and that although he could have known the falsity of a representation concerning the last doctor to examine him, the question was not particularly called to his attention. It was found the insurer “was in possession of facts sufficient to put it on notice as to the truth or falsity of the representations.” In Burden there was an express finding insured did not make the false statement “to induce appellant to issue the policy.” In Newell the jury found insured did not know she was suffering from an ailment, and insurer pleaded nothing relating to intent or reliance. The opinion of one of the three justices in the Roosth case, Tex.Civ.App., 330 S.W.2d 652, may be said to support appellee’s contention. It is not the opinion of that Court, however. The justice concurring declined to adopt appellee’s position as the basis for affirmance, saying:- “It is my further view that the issues as submitted comprehended ‘intent to deceive’ ”. The judgment properly rested on other grounds.

In our opinion the test applicable is stated by the Supreme Court in Clark v. National Life & Acc. Ins. Co., 145 Tex. 575, 200 S.W.2d 820, 823. There insurer requested no issues relating to its pleaded defense of fraud, and none were submitted. In answer to the only issue submitted, the jury found insured was in good health when the policy was issued. The Court said that to avoid the policy for a false answer insurer’s burden was to plead and prove (a) the answers made by insured were false or untrue, (b) the “insured knew, or should have known, that they were untrue” and (c) that he made them wilfully and “with the intention of inducing the insurer to issue him a policy.” In the present case the jury found the myocardial infarction of 1957 made his death from a later myocardial infarction more likely. The policy contained an incontestability clause.

That it is not necessary to submit a specific issue on intent to deceive, but as said in the Roosth concurring opinion, this element is comprehended by the issues here submitted, is settled authoritatively, we think, in Texas Industrial Trust v. Lusk, Tex.Civ.App., 312 S.W.2d 324, 327, writ refused. There the jury found the representation was made, that it was false, that it was made with knowledge it was untrue, that defendant relied on it, and that it was made with intent to induce defendant to act on it. Appellant complained that the trial court failed to submit an issue inquiring as to fraudulent intent, and whether the representations were “made to deceive”. Justice Pope said, “The utterance of a known false statement, made with intent to induce action, in our opinion, is equivalent to an intent to deceive.” This is the rule we think we are required to follow, and the Supreme Court has held that insurer’s burden is satisfied by establishing insured knew or should have known the representation was untrue. But for another finding to be noticed, the foregoing findings would entitle appellant to judgment.

Appellant contends that the trial court erred in failing to disregard a jury finding that insured was “in good health” at the time of delivery of the policy, and in failing to define the quoted term. In view of remand, it is not necessary to pass on this, or appellant’s points 1, 5, 6, 10-12.

In answer to a series of 18 issues the jury found, in effect, that after insured’s death an agent of insurer told the beneficiary that if she would furnish proof of death the company would pay her the face of the policy promptly; that the agent acted within the apparent scope of his authority and then knew the facts as to the condition of insured’s health at the time of delivery of the policy (which the jury had found was then “good”) ; that he intended for the beneficiary to rely thereon, and she did so; that the statement induced her “to pur-' chase a new home” and “sell her bedroom furniture”; that this was “a material change in her position”; and the statements that the proceeds would be paid promptly “was a waiver” by the company “of all defenses it may have had to the payment of the proceeds.” Appellant having made numerous valid objections to the issues, did not obtain an order on its motion to disregard these findings, but attacks them here and in its motion for new trial. Appellee urges they establish waiver and estoppel.

These findings constitute no basis for estoppel. An essential element of equitable estoppel is that a party acts to his prejudice. Jones v. Mid-State Homes, Inc., Tex.Sup., 356 S.W.2d 923, and is induced to change his position in some material respect for the worse. To be material, the altered position must bear some substantial relationship to the subject matter. Ralston Purina Co. v. U. S., 58 F.2d 1065, cert. den. 289 U.S. 732, 53 S.Ct. 594, 77 L.Ed. 1481; 3 Pomeroy, Equity, 5th ed., Sec. 812; 22 Tex.Jur.2d 684. If it be assumed that apellee’s purchase of a home and sale of furniture was a change of position for the worse and resulted in injury (which is not shown) these acts bear no reasonable relationship to the subject matter, and es-toppel is not in the case.

The findings recited above do not establish waiver. Waiver is the intentional relinquishment of a known right, “with full knowledge of the material facts.” Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855, 865; Rolison v. Puckett, 145 Tex. 366, 198 S.W.2d 74, 78. The beneficiary pleaded the insurer had knowledge of insured’s prior chest pain and heart condition; that if he was not in good health, -it had knowledge of that fact when the policy was issued, and that after insured’s death the agent, with full knowledge of tire prior condition of insured’s health, chest pains and heart trouble, promised plaintiff the company would pay the face of the policy if she would file proof of death. No issue was submitted or requested, however, as to appellant’s knowledge of previous chest pain or heart trouble. Appellant objected to the issues submitted on this and numerous other grounds. The issue submitted and found was that the agent knew the material facts pertaining to the condition of insured’s “health at the time of the delivery of the policy”. This, the jury had found, was “good”. We are unable to find evidence of probative force that the company or the agent knew insured had any pre-issuance disease of the heart before the promise to pay was made. The agent testified he did not know of insured’s previous myocardial infarction or heart trouble when he talked to the beneficiary. The effect of the jury findings is that the agent and appellant knew insured was “in good health” at the time of delivery of the policy, and the agent knew he was “in good health” (at the time of such delivery) when he thereafter told the beneficiary payment would be made.

By another separate issue, No. 3, the court inquired whether any right appellant “may have had to cancel the policy because of the condition of deceased’s health was waived” by it, to which the jury answered “Yes”. Defendant’s objections that this was a general issue which did not restrict the jury to any specific rights waived or conduct constituting waiver were overruled. The issue was a global submission of a question of law, and the objections should have been sustained. Cole v. Waite, 151 Tex. 175, 246 S.W.2d 849, 853; Knutson v. Ripson, Tex.Sup., 354 S.W.2d 575, 576; Alexander v. Tips, Tex.Civ.App., 268 S.W. 965. See Roosth & Genecov Production Co. v. White, 152 Tex. 619, 262 S.W.2d 99, 103.

Since the issues relating to estoppel and waiver were erroneously submitted, and since the judgment is apparently based thereon, the judgment is reversed and the cause remanded.


author: WALTER, Justice.

text:
    NATIONAL LIFE ASSURANCE COMPANY OF TEXAS, Appellant, v. Ola Lee NEVES et al., Appellees.
    No. 3821.
    Court of Civil Appeals of Texas. Eastland.
    July 26, 1963.
    Rehearing Denied Sept. 6, 1963

      Harless & Bailey, Dallas, for appellant.
    Bryant, Glenn & Thomas, Abilene, for appellees.
   WALTER, Justice.

Ola Lee Neves and her husband recovered a judgment against National Life Assurance Company of Texas for $650.00, penalty and attorneys’ fees, for weekly indemnity benefits. The insurance company has appealed contending the court erred in overruling its motion for judgment non obstante veredicto because the record conclusively establishes the sickness upon which Mrs. Neves bases her claim for disability benefits had its beginning prior to the effective date of the policy and that Mrs. Neves knowingly made false representations in her application for insurance about the condition of her health.

The insurance company answered appel-lees’ petition with a general denial and an allegation that the sickness upon which Mrs. Neves’ claim is asserted originated prior to the effective date of the policy. It also pleaded that she made false representations in her application which were material to the risk involved. It tendered into court $88.50, the full amount of all premiums and charges made and elected to cancel its policy.

The insurance company admitted that Weldon Marshall was its agent on the 20th day of August, 1961, and that on such date the insurance company issued to the appellees the policy sued upon and that Mrs. Neves was suffering from coronary insufficiency.

Mrs. Neves testified that she was acquainted with Weldon Marshall. He called at her beauty shop for the purpose of selling her some insurance. The first time he called she was busy. He later called on her at her home. Her husband and her son were present. When Mr. Marshall started asking her questions, she informed him that she had a report from her doctor and requested him to read it. This report is dated August 1, 1960, and addressed to Legal Security Life Insurance Company, Dallas, Texas, and signed by her doctor, Dr. E. J. Hawkins. The letter stated that Mrs. Neves has been treated in November, 1950, for laryngitis; December, 1952, for the flu; April, 1952, for allergic rash; March, 1953, for sore throat; August, 1953, for virus pneumonia; March, 1955, for cold and cough; October, 1956, for bronchitis and sinus; November, 1957, for flu; March, 1958, for angina secondary to anemia; June, 1958, for hemorrhoids; May, 1959, for virus pneumonitis; January, 1960, for poor circulation; February, 1960, for dizzy spells; and May, 1960, for the flu. The letter was introduced in evidence and sent up in its original form. Some other dates are given and some other ailments are listed, but they are not legible. Marshall read this letter and informed her-“Mrs. Neves, I don’t see any reason why you shouldn’t be covered.” Marshall filled out her application. She signed it and wrote him a check for the initial premium. The first illness she had, after the policy was written, was on the 15th day of October, 1961, at her home while she was in bed about 11:00 o’clock at night. She woke up with a severe pain in her chest and stomach. She thought she had indigestion. She took some Rol-Aids which did not relieve her and her husband called the doctor. She saw Dr. Willingham at Cox Qinic that night. She stayed in the hospital three days on this occasion. She left the hospital and continued to see her doctor every ten days until she became extremely ill on February 4, 1962. Dr. Willingham informed her that he thought she had angina. She went to see Dr. Hawkins, who had run two electrocardiograms on her previously. Dr. Hawkins examined her again and informed her that the electrocardiogram had changed and he agreed with Dr. Willingham’s diagnosis. On cross examination Mrs. Neves testified she saw Dr. Hawkins on September 2, 1961, and that on such occasion she might have had chest pains but that it wasn’t the same kind of chest pain that she had when she had her attack in October. She saw him on September 2, 1961, which was about two weeks after she signed her application for insurance. Dr. Hawkins had been treating her for ten or twelve years. In 1950 he treated her for some circulatory problem which she testified was not serious. He prescribed some medicine for the circulatory ailment but she couldn’t take it. She has had chest pains since 1950. When she was in the hospital from October 15, to October 18, 1961, Dr. Willingham prescribed nitroglycerin tablets, Demerol and Darvon.

Mrs. Neves’ husband testified that he was present in their home when the agent for the insurance company called on his wife. He corroborated her testimony in general and testified specifically that his wife showed Mr. Marshall Dr. Hawkins’ letter of August 1, 1960, addressed to the Legal Security Life Insurance Company. Mr. Marshall stated in the presence of his wife and him and their son that “He didn’t see any reason that she couldn’t be insured.”

The appellees’ son, R. W. (Bud) Neves, testified that he was present and heard Mr. Marshall ask his mother about her prior illnesses and that his mother delivered to Mr. Marshall Dr. Hawkins’ medical report and Marshall said “He said that that wouldn’t have any bearing on the policy that she was applying for.”

Mrs. Neves testified that she informed the insurance company’s agent of her numerous past illnesses and periods of hospitalization. The insurance company objected to this because there were no pleadings to support it. The court overruled the objection. One of the purposes of a pleading is to advise the court of the facts relied upon by the parties to sustain or defeat the suit. 45 Tex.Jur.2d 365. Under the pleadings in this case, we have concluded that the court did not err in admitting such testimony. In Universal Life and Accident Insurance Company v. Barron, Tex.Civ.App., 269 S.W.2d 467, (Ref. N.R.E.), the court said: “When an issue of fraud is involved, all testimony having any reasonable bearing upon that issue is admissible and may be considered by the jury in reaching a verdict. Fraud may be proved directly or by circumstances.”

The soliciting agent for the company had knowledge of Mrs. Neves’ prior illnesses and this knowledge is imputed to his company. Article 21.02, Volume 14A, Insurance Code; Baylor Law Review, Volume XIV, Fall, 1962, Number 4, page 413.

We have considered all of the appellant’s points and find no merit in them. They are overruled.

The judgment is affirmed.


text:
    UNITED FEDERAL LIFE INSURANCE COMPANY et al., Appellants, v. Joe H. CLOUD, Appellee.
    No. 3788.
    Court of Civil Appeals of Texas. Eastland.
    July 26, 1963.
    Rehearing Denied Sept. 6, 1963.
    John D. Reed, Austin, Dewey Cox, Jr., Ranger, for appellants.
    Bill Atkins, Arlington, for appellee.
   WALTER, Justice.

Joe H. Cloud filed suit against United Federal Life Insurance Company upon a sworn account for labor performed and materials furnished for installing plumbing equipment at the Gholson Hotel in Ranger. The insurance company filed a denial under oath and made Mrs. Gwen Roberts, their alleged agent, a party and sought judgment over against her for any judgment rendered against it.

In a non-jury trial, the court rendered judgment for Cloud for the total amount of $3,152.61 and for foreclosure of his mechanic and materialman’s lien and granted the insurance company judgment over against Mrs. Roberts.

The insurance company and Mrs. Roberts have appealed. At the outset we are confronted with appellee’s contention that appellants’ points 1, 3 and 4 are too general to he considered. The first point is “The trial court erred in granting plaintiff judgment against defendant for labor performed and materials furnished.” When we consider the statement and argument under this point it is clear that appellant is presenting a “no evidence” point. This is likewise true concerning the other general points.

When the appellant contests the trial court’s judgment without requesting findings of fact or conclusions of law, we must assume that the trial court’s findings were all in support of its judgment. The judgment must be affirmed if there is any evidence of probative force to support it upon any theory authorized by law. Renfro Drug Company v. Lewis, 149 Tex. 507, 235 S.W.2d 609, 23 A.L.R.2d 1114; City of Abilene et al. v. Meek et al., Tex.Civ.App., 311 S.W.2d 654 (Writ Ref.).

Mrs. Gwen Roberts, one of the appellants, “adopts in its entirety the brief of appellant United Federal Life Insurance Company, filed herein without reservation.”

The insurance company filed a third party complaint and asked for judgment over against Mrs. Roberts, its tenant and alleged agent. The insurance company attached a lease-option to purchase agreement it had with Mrs. Roberts as an exhibit. Cloud alleged that it was a sham agreement that the insurance company executed for the purpose of avoiding liability for improvements and repairs to its property.

The following statement of facts constitutes a summary of the evidence introduced. On February 27th, 1961, the insurance company, as owner of the Gholson Hotel at Ranger, entered into a lease-option-to-purchase contract with Mrs. Roberts. This lease was for a period of six months. Paragraph 4 provided that Mrs. Roberts would not encumber the premises or bind the owner for any purchases during the term of the lease, nor obligate the owner in any manner for labor or improvements. It further provided that all labor and improvements were to be paid by Mrs. Roberts on a cash basis. Mr. Cloud’s first dealings with Mrs. Roberts, concerning the repair job on the hotel, was a letter written to Mrs. Roberts. It was a proposal to do certain work and furnish certain supplies. Mrs. Roberts informed him that it would be necessary for her to notify the insurance company concerning the work. He first installed a hot water heater and worked on the hot water system. Thereafter he was instructed by Mrs. Roberts to work on a day to day basis. Cloud’s business is located in Fort Worth. Each day Mrs. Roberts would instruct the plumber on the job about the work to be done the following day and she or the plumber would call the Fort Worth office and order the materials. Cloud called Mr. Lawrence, the president of the insurance company, and asked him when he could expect payment of his bill. Lawrence told him that he thought that payment had been made, and he needed some time to check into the matter with Mr. Bohls, an officer of the company who was familiar with the work. Mr. Cloud told Lawrence that if he was not paid for his work he was contemplating taking his material out and Mr. Lawrence said “Now, Mr. Cloud, don’t be hasty, let’s don’t do that. Give me time to check into it. We’ll see that you get your money.” Cloud testified that Lawrence did not deny owing the account. On the same day Mr. Lawrence called Mr. Cloud and informed him that his company had issued a check to Joe E. Cloud and that it had been endorsed and paid by the bank. It later developed that some one forged Mr. Cloud’s endorsement on the check and cashed it. The president of the insurance company was asked the following question “And, I believe you stated in your deposition that your company is holding this $821.00 and some odd cents to apply to this particular account?” and he answered, “We are holding it.” In these telephone conversations Mr. Lawrence never did indicate to Mr. Cloud that Mrs. Roberts did not have authority to make the improvements.

Mrs. Cloud testified to substantially the same thing that Mr. Cloud did.

Mr. Bohls, secretary for the insurance company, testified that the hotel was turned over to him by the insurance company and that he entered into the lease agreement with Mrs. Roberts. That, subsequent to execution of the lease, he received authority from his board of directors to do additional work and pay half of the expenses up to $3,000.00. They did not specify what work was to be done or the price that was to be paid. This was left entirely to Mrs. Roberts’ discretion. Mrs. Roberts called Mr. Bohls and told him they owed a plumbing bill. The insurance company wrote a check payable to Cloud for its one-half which amounted to $821.50.

Mr. Lawrence testified that Mrs. Roberts had no authority other than the original contract and that the insurance company had not given her any additional authority. He further testified that the originial lease with Mrs. Roberts had been extended and was in full force at the time of trial; that his company had issued checks in excess of $1850.00, as set out in the lease-option agreement, and that it had paid for additional repairs that were not originally contemplated by said instrument.

After the lease-option to purchase contract was executed, Mrs. Roberts and the insurance company entered into another agreement by the terms of which the insurance company was obligated to pay for other repairs on the hotel not contemplated in the original agreement. Under the new agreement it is not disputed that Mrs. Roberts was authorized to contract with any person, firm or corporation to do additional repair work on the hotel and the insurance company would be obligated to pay any amount up to $1,500.00 for said repairs. We are of the opinion that Mrs. Roberts had actual authority from the insurance company to bind them for any amount up'to $1,500.00. Our question narrows down to the proposition of whether she had apparent authority to obligate the company for the amount of the judgment in excess of $1,-500.00. The insurance company knowingly permitted Mrs. Roberts to hold herself out as their agent. The company also clothed her with the indicia of authority which would lead a prudent person to believe that she actually had authority to bind the company for the full amount of any repair bill on the hotel. Under the new agreement, Mrs. Roberts was the duly authorized agent for the insurance company and was acting within the scope of her actual and apparent authority in contracting with Qoud for the plumbing repairs. Pursuant to such actual authority, she made such contract and the insurance company issued its check to Cloud for $821.50 in payment for its share of the plumbing expenses.

“An agent’s authority is presumed tobe coextensive with the business entrusted to his care. Moreover, such presumed or apparent authority is not diminished by private limitations placed thereon by the principal, where such limitations are known only to the principal and the agent, and are not communicated to innocent third parties dealing with the agent.” 2 Tex.Jur. (2d) 490. “Accordingly, if an agent’s conduct is within the scope of his apparent authority, his principal will be deemed to be bound thereby, even though the agent’s conduct may violate certain private instructions given by the principal to the agent only." 2 Tex.Jur. (2d) 491.

The record does not disclose that the insurance company made any effort to notify the plaintiff of any limitation it had placed upon Mrs. Roberts’ authority to expend its funds for the repair of its building. We are compelled to hold that Mrs. Roberts had implied authority to bind the insurance company for the amount of the judgment in excess of $1,500.00.

The parties agreed that $750.00 would be a reasonable attorney’s fee for the work performed by the appellee’s counsel. The appellant, however, did not agree that the attorney’s fee would be appropriate in this case and strongly contends that Article 2226 of Texas Revised Civil Statutes Vernon’s Ann. St. was not applicable to the facts in this case. The appellants’ contention being that the contract for repairs was a special contract and that Article 2226 does not provide for attorney’s fees in such a case. Article 2226 provides that when any person has a valid claim against another person or corporation for personal services rendered, labor done, material furnished, or suits founded upon a sworn account, and provided proper notice is given, he can recover in addition to his claim, a reasonable amount as attorney’s fees. We have concluded that the appellee’s claim is a suit founded upon a sworn account and is also a claim for labor done and materials furnished and comes within the purview of said statute. Ferrous Products Company, Inc. v. Gulf States Trading Company, Inc., 160 Tex. 399, 332 S.W.2d 310.

We have examined all of appellants’ points and find no merit in them. They are overruled.

The judgment is affirmed.