author: CONNER, C. J.

text:
    CROWLEY et al. v. REDMOND.

    No. 12456.
    Court of Civil Appeals of Texas. Fort Worth.
    April 25, 1931.
    Rehearing Denied May 23, 1931.

      P. M. Brantly qnd H. M. Harrington, both of Port Worth, for appellants.
    Polk, Sansom & Terrell, of Port Worth, and Geo. T. Burgess, of Dallas, for appellee.

       Writ o£ error granted.

   CONNER, C. J.

The appellee, P. A. Redmond, instituted this suit on March 23, 1930, in trespass to .try title against J. C. Crowley, and wife, Maude Teague Crowley, and Lillian Lois Crowley and Dorothy Jean Crowley, minor children of J. C. Crowley and a former wife, and Helen Loreta Crowley, who had attained her majority, to recover lots 9 and 10 in block No. 44 in the Sycamore Heights addition to the city of Port Worth, Tex. The claim of title on appellee’s part was predicated upon a substitute trustees sale and deed dated January 2,1929. There is no objection to the form of the deed which in terms conveyed full title to the lots which at the time, and at all times mentioned in this opinion, were jointly owned and occupied by J. C. Crowley and his children as a homestead. The deed of trust had been given to secure the payment of certain renewed obligations executed by Crowley and wife and Crowley as guardian for improvements upon the homestead. The original and renewed obligations, to secure the improvements and trust deed liens as had been given, were all authorized by orders of the probate court of Tarrant county upon applications therefor by J. C. Crowley as guardian of his children. No material objection appears to the form or regularity of the applications or probate orders. The orders recite the presentment of the application, the advisability of the improvements and repairs “in order that said property can be> sold and the best interest of said minors served thereby,” that “said property is the only property owned by said minors,” and that “J. C. Crowley, guardian as aforesaid, be and he is hereby authorized, empowered and instructed to make and enter into any and all kinds of contracts, mechanics liens and other papers necessary to bind said above property owned by said minors for security for the amount necessary for said improvements, one half of the cost of same to be borne by the interest of said minors and the remaining one half of the costs of said improvements to be paid by the said J. C. Crowley and secured by his interest in said property, and the said J. C. Crowley, be and he is hereby empowered to make any and all extensions, and renewals of said mechanics liens, as may be necessary, and to convert said mechanics lien into a trust lien, and to make, execute and deliver any one and all of such instruments as may become necessary and to agree upon the due date of said incumbrance on said property which date shall not be later than five years from date of execution of said mechanics lien.” This order was dated March 3, 1927, and orders of similar purport and effect were later made authorizing extensions and renewed obligations and liens under which ap-pellee Redmond claims.

The plaintiff in an alternative pleading set forth the improvements that had been made, the original and renewed obligations and liens which had been authorized and executed, the acquisition thereof by plaintiff for a valuable consideration, and prayed that such liens be foreclosed and the property ordered sold for the payment of the aggregate amount due thereon, which, at the time of the filing of the plea on March 23, 1930, amounted in the aggregate to $2,272.23.

The defendants answered, so far as it is thought necessary to notice, by general and special demurrers, the general denial, and a plea of not guilty.

The case came on for trial on the 31st day of March, 1930, and the court, after having rpled upon the demurrers and exceptions, and after the introduction of the evidence, upon the motion of the plaintiff, instructed the jury which had been impaneled in the ease to return a verdict “for plaintiff against all defendants for title and possession of the property in controversy.” Verdict was returned and judgment rendered in accordance with the instructions, and defendants have duly prosecuted this appeal.

We fail to find merit in appellants’ contentions that there was a misjoinder of parties. All defendants were joint owners and possessors of the premises plaintiff sought to recover, and all were indeed necessary parties.

Nor do we find merit in the contention to the effect that plaintiff:, having sued to recover title and possession of the premises in controversy, was estopped from recovering the relief sought in his alternative plea.

It no where appears that the plaintiff had ever prosecuted to final judgment an action to recover title and possession. And the defendants having attacked the validity of the orders of the probate court under which plaintiff asserted right to recover title, wé think it entirely permissible on the part of the plaintiff to have pleaded as he did in the alternative.

' We .therefore conclude that the court did not err in overruling the demurrers presenting the contentions of a misjoinder of parties and actions.

Aside from some minor criticisms of the proceedings not thought to be material, appellants insist that the court erred in giving the peremptory instruction, to wit:

(A) “Because under the law and the facts proven the plaintiff was not entitled to a recovery of the estate, title or interest of said minor wards in or to the premises in contest, and the court erred in rendering judgment of recovery by plaintiff of the estate, title and interest of said minors in and to said premises.”

(B) That the evidence.fails to show “that said plaintiff was entitled to a valid deed or trust lien or other like lien against saidi promises, or that said substitute trustee was possessed of lawful power or authority to execute said deed of trust instrument or to effect sale of said premises thereunder; or that said plaintiff acquired valid title to said premises by virtue of said purported sale of the same by said substitute trustee.”

We cite the following articles from Revised Civil Statutes of 1925, to wit:

Article 4102: “The county court shall appoint guardians of minors, ⅜ * ⅜ -settle accounts of guardians, and transact all business appertaining to the estates of minors. * * *"
Article 4107: “Each decision, order, and judgment of the court in matters of guardian'ship, shall be rendered in open court at a regular term thereof except in cases where it is otherwise specially provided.”

The appointment and legal status of J. C. Crowley as the guardian of the estate of his minor children is not questioned, and article 4164 says that: “The guardian of the estate is entitled to the possession and management of all property belonging to the ward, to collect all debts, rents or claims due such ward, to enforce all obligations in his favor, to bring and defend suits by or against him; but in the management of the estate, the guardian shall be governed by the provisions of this title.” Title 69 (articles 4102-4329).

Article 4165: “It is the duty of the guardian of the estate to take care of and manage such estate as a prudent man would manage his own property. * * * ”

Article 4195, chapter 8, title 69, in so far as pertinent, reads: “When the income of the ward’s estate, and the personal property thereof, and the proceeds of previous sales, are insufficient for the education and maintenance of the ward, or to pay the debts against the estate, the guardian, or any person holding a valid claim against the estate, may, by written application to the court in which such guardianship is pending, ask for an order for a sufficient amount of real estate to be sold to make up the deficiency, or when the property of the ward consists in whole or ■in part of an undivided interest in real estate and the guardian believes it to be the best interest of the estate of the ward to sell such real estate, he may, by written application to the court in which such guardianship is pending, ask for an order for such real estate to be sold; or when the real estate of such minor is encumbered by a valid lien to secure a debt which is due or is about to become due, or when the taxes are due on the property of said ward, or when the holder of such debt has applied for or is threatening to apply for an order of sale of the real estate of the minor and the guardian has not in his hands sufficient funds to pay such debts, such guardian may by written application to the court in which such guardianship is pending, apply in writing for an order to obtain an extension of such debt and to secure the same by a mortgage or deed of trust on the real estate of such minor; or if the real estate of such minor or any part thereof is not revenue producing, or the revenue therefrom could be increased by making improvements or additional improvements or repairs thereon, such guardian may make a written application to such court to make such improvements or repairs on such real estate as he may deem beneficial to the ward, and to secure the payment for the same by mortgage, deed of trust, mechanics contracts and material men lien.”

Article 4196: “The guardian shall apply 'for such order as is provided in the preceding article, whenever it appears that a necessity exists therefor, and set forth fully in his application with an exhibit, under oath, showing fully the condition of the estate.”

Article 4198: “Whenever an application for the sale of real estate is filed, * * * the judge shall designate a day to hear such application, which may be heard in term time or vacation. * * * ”

Article 4200: “A sale of real estate may be for cash, or for part cash and part credit, at public auction or private sale, as may appear to tlie court to be tbe best interest of the estate.”

Article 4201 provides that an order for the sale of real estate shall give such description of it as will identify it; whether it is to be sold at public auction or private sale, the time and place of sale; the necessity and purpose of such sale, and “shall require the sale to be made and the report thereof to be returned to the court in accordance with law.”

Article 4213: “All sales of the property of the ward shall be reported by the guardian to the court in which the guardianship is pending within thirty days after the sale is made.”

Article 4214 provides the requisites of the reports, and article 4216 declares that: “At any time after the expiration of five days from the filing- of a report of sale, the court shall inquire into the manner in which such sale was made, and hear evidence in support of or against such report, and if satisfied that such sale was fairly made and in conformity with law, and that the guardian has filed bond as required herein, which has been duly approved by the court, the court shall cause to be entered a decree confirming such sale. * * * ”

Article 4217: “If the court is not satisfied that the sale was fairly made, and in conformity with law, order shall be entered, setting the samé aside, and ordering the property to be again sold if necessary.”

Article 4219:' “If real estate be sold, the conveyance shall be by deed, and shall refer to the deeree of the court confirming the sale and ordering the conveyance to be made, by giving the date and term of the court of such order. Such conveyance shall vest the right and title of the ward to such real estate in the purchaser, and shall be prima facie evidence that the law has been complied with in making such sale.”

From the references and quotations we have made from our statutes, it seems evident, as has indeed been many times decided, that the probate court is a court of general jurisdiction with full control in the first instance over the estates of minors. As such, it has been given express authority, as will be seen from the latter part of article 4195, quoted above, to entertain an application of the guardian of a minor’s estate to make improvements or repairs on such real estate as he may deem beneficial to the ward, and to secure the payment for the "same by mortgage, deed of trust, mechanic’s contracts, and materialman’s lien. Article 4196 makes it the duty of the guardian to apply for an order of sale whenever it appears that a necessity exists therefor. The court is required to designate a day for the hearing, which shall continue until the court is satisfied concerning the application. If the court be satisfied, then it makes the order for the sale. A report thereof must be made and confirmed by the court.

As may be seen by reference to our preliminary statement, no statutory informality appears in the appointment of J. 0. Crowley as guardian or in his application to have improvements made, execute obligations in payment thereof or in the orders of the probate court granting the application or in the orders approving the obligations of indebtedness and renewals and extensions thereof as hereinbefore recited. Nor is the ownership of such indebtedness of appellee Redmond, questioned. We therefore think it quite plain that the several applications and orders of the probate court referred to must be held to be conclusive in this case. The attack upon these proceedings is manifestly a collateral one, and it is well settled upon principles of public policy that inquiry by evidence aliunde the record cannot be heard in a collateral attack upon the judgment of a domestic court of general jurisdiction, legal on its face, as to any fact which must be passed upon in order to render it valid.

In the case of Weems, Receiver v. Masterson, 80 Tex. 45, 15 S. W. 590, 591, it was held by our Supreme Court in an opinion by Chief Justice Stayton, not only that probate courts were courts of general jurisdiction, but also that “all presumptions will be indulged in favor of the jurisdiction of such courts, when exercised over a subject-matter confided to them by law, that will be in favor of the jurisdiction of any other court of general jurisdiction, and that their judgments and decrees cannot be collaterally attacked unless the record shows the want of jurisdiction. In the absence of such a showing it must be presumed that the. jurisdiction exercised in a given case was the exercise of lawful power.” To the same effect is the case of Crawford v. McDonald, 88 Tex. 626, 33 S. W. 325.

In the case of Schaeffer v. Williams, 208 S. W. 220, by the San Antonio Court of Civil Appeals, writ of eri’or denied, it was held that, though an application for sale of a ward’s land by a guardian failed to allege grounds for sale, as set forth in the statutes, it could not be attacked collaterally on account of such failure.

We are of the opinion, therefore, that the objections and demurrers in behalf of appellants to the appellee’s alternative plea were properly overruled, and that upon proof of the facts alleged in such plea appellee was entitled to a. judgment for the indebtedness shown with a foreclosure of the liens exhibited.

We are of the further opinion, however, that the court erred in giving the peremptory instruction to find for appellee the title and possession of the lots involved. While the statutes give ttie probate court the power to authorize a guardian to execute such obligations and create such liens as may b.e necessary to secure the cost of the improvements shown to be necessary, we do not think the sale shown in this case by the substitute trustee can be upheld. It may be argued that, the guardian having been given express authority to execute a “deed of trust,” presumably in the usual terms, the trustee named would have implied power to execute the trust by a sale of the property. But it seems quite plain from the statutes we have quoted that when a sale becomes necessary an application therefor must b.e made to the probate court. This application must be heard and the sale ordered, either for cash or credit, as may appear to the court to be for the best interest of the estate. After the sale, due report thereof must be made and approved before the title passes, and we do not think the probate court may divest itself of the supervisory powers thus provided and authorize a trustee to sell without reference to any order or proceeding in the probate court, execute deed, and convey good title. The question thus decided was not argued before us "and our attention called to any authority to support the conclusion, and the only case that we have been able to find is that of Kelsey v. Trisler, 32 Tex. Civ. App. 177, 74 S. W. 64, 66, by the Galveston Court of Civil Appeals. That was a case in which it appears that one Lucian Minor made application to the probate court of Jefferson county for appointment as the guardian of the estate of a Mrs. Kelsey, alleged to be a person of unsound mind, residing in the state of Michigan, who owned 1, 107 acres of land in Jefférson county, Tex. The record in the case shows that Minor made a sale of the land under an order of sale therefor by the probate court of Jefferson county, and-that the sale was confirmed. It was held, however, in an opinion written by Mr. Justice Pleasants, that the sale was unauthorized, for the reason that no order of court was shown appointing Minor guardian. The court said: “-The county court of Jefferson county could only lay hold upon the estate of appellant through the hands of a regularly appointed guardian, and, until such guardian had been appointed by it, said court had no power to make an order authorizing the sale of any of the property of the estate, and any order so made would be void” —citing Rose v. Newman, 26 Tex. 131, 80 Am. Dec. 646; Stafford v. Harris, 82 Tex. 184, 17 S. W. 530; Scott v. McNeal, 154 U. S. 47, 14 S. Ct. 1108, 38 L. Ed. 896.

In the case of Rose v. Newman, 26 Tex. 131, 80 Am. Dec. 646, it was held, quoting from the headnotes: “However plenary the powers of the County Court may be upon the subject of a partition of a deceased person’s estate, yet, when a sale of the property becomes necessary to carry out the partition, such sale must be made by the administrator, and cannot be made by a commissioner appointed by the County Court for the purpose, so as to divest the title of the heirs.” That case was adhered to by our Supreme Court in Stafford v. Harris, 82 Tex. 178, 17 S. W. 530, holding that the sale involved cbuld not “be made through a trustee or commissioner.”

The sale by the substitute trustee in the present case was to the appellee himself, and he, of course, must be held to have had full knowledge of the trustee’s want of authority. The sale was therefore void and must be set aside.

The question arises: How shall we dispose of the appeal? While, as already appears, only the guardian under the required applications and orders of the probate court can generally make valid sales of a ward’s real property, yet the record discloses that the property involved is jointly owned by the appellant J. C. Crowley and his minor children; that the minors have no other property with which the indebtedness involved can be satisfied; that the jurisdiction of the district court was duly invoked in a suit of trespass to try title; that that court alone is clothed with powers adequate to foreclose’ liens upon' lands; and that the property in question is incapable of partition. Under such circumstances, we think that the judgment of the court below must be set aside and the cause remanded, with instructions to the district court to hear and determine appellee’s alternative plea, and, if the facts as therein appear and as shown on the trial of this case below ar,e proven, to then ascertain and adjudge in appellee’s favor the amount of his indebtedness, establish the liens, order the sale of the property as under execution, and apply the proceeds thereof, after the payment of costs, one-half which belong to the minors and one-half which belong to the appellant J. G. Crowley, the excess, if any, to be equally divided between J. C. Crowley, the guardian, and his named children. See Lauraine v. Masterson (Tex. Civ. App.) 193 S. W. 708, writ refused.

On Motion for Rehearing.

Appellee earnestly insists that we erred in holding that the sale of the property of the minors involved in this case by the trustee was invalid. The gist of the contention is that the Legislature had authority to authorize the probate court to determine whether it would permit the guardian to execute a mortgage or a deed of trust, and that the statute (article 4195) in using bo'th terms, the term “deed of trust” must b.e construed as an instrument containing a power in the trustee to sell. The contention is supported by a plausible argument. But while it is true thát the term “deed of trust” implies an instrument containing a power to sell, yet we do not think the implication must necessarily be given effect in every case. To illustrate, in the case of Jackson v. Harby, 65 Tex. 710, our Supreme Oourt Lad occasion to construe an instrument designated as a “trust deed to secure” a debt. During tbe course of the -opinion, the court said: “Deeds of trust conveying property directly to trustees, made to secure and pay particular creditors, though expressed in terms sufficient to pass title, if made for creditors generally, are construed to be mortgages, ‘with some of the qualities of an assignment super added.’ Baldwin v. Peet, 22 Tex. 718 [75 Am. Dec. 808]; Burrill on Assignments, 3d Ed. secs. 6, 7, 8. The instrument under which the plaintiffs claimed, was of this character.”

In McLane v. Paschal, 47 Tex. 365, it is said, quoting from the headnotes: “It is now finally and definitely settled by this court, that a deed of trust to secure the payment of a debt, does not operate as an absolute trans; fer of the property, on which it is executed, to the trustee, upon the trust mentioned in the deed, defeasible upon the conditions therein stipulated; but that such instrument is, in legai effect, a mere mortgage, with a power to sell.”

In view, therefore, of the solicitude of the Legislature in providing safeguards for the interests of minors in the forced sale of their property, we think the terms “mortgage” or “trust deed,” as used in the order of the probate court, authorizing the guardian in question to so incumber the property of his wards, should be construed as synonymous in spirit or purpose, and that if, in any case under the laws relating to the subject, as is contended, an emergency case arises which would authorize the probate court to confer upon the guardian a power to sell the property of minors incumbered without observing the safeguards generally provided, the order at least should specifically state that the trust deed might contain the power to sell. -

It can certainly be said that the records in the proceedings of the probate court under consideration present no emergency for the trustee in the deed of trust to execute the power of sale therein provided.

We conclude that the motion for rehearing should be overruled.


source: Caselaw Access Project

author: BUCK, J.

license: Public Domain

text:
    ANDERSON-BERNEY REALTY CO. v. SORIA.

    No. 12442.
    Court of Civil Appeals of Texas. Fort Worth.
    March 14, 1931.
    Rehearing Denied April 18, 1931.
    Bryan, Stone, Wade & Agerton, of Fort Worth, for appellant.
    McLean, Scott & Sayers and Levy & Evans, all of Fort Worth, for appellee.

      Writ of error granted.

   BUCK, J.

This is a suit filed by Plasida Soria against the Anderson-Berney Realty Company and the Employers’ Liability Assurance Corporation, Limited. Plaintiff alleged that she was the surviving widow of Victoriano Soria, who met his death from injuries sustained on February 23, 1929, during his employment and while he was performing the duties of his employment for the Anderson-Berney Realty Company as “straw boss” or foreman of a group of employees of said Realty Company, and as night watchman for said company; that at the time of said employment said Realty Company was a subscriber to the workmen’s compensation liability insurance, and had met all the requirements placed on said company by law, and was in every way eligible to carry compensation insurance, employing regularly at all times referred to herein more than three employees; that defendant, realty company, furnished the deceased a house located on the premises to live in, where work was being done, for the purpose of watching the property and tools of defendant during the nighttime; that deceased had been so employed for more than a year next preceding February 23, 1929, at which time he sustained injuries which caused his death; that on said last named date, while engaged in the course of his employment as night watchman, and some time between the hours of 8 p. m. and daylight the next morning, he was attacked by some person whose identity was unknown, and such person inflicted injuries on Soria by striking him with a hatchet or hammer or other instrument about the face and head, thereby wounding him, and that he died therefrom on February 25, 1929; that prior to the employment of plaintiff's husband the defendant insurance company had issued to the defendant Realty Company Employers’ Life Insurance, and that said realty company was a subscriber to the workmen’s compensation insurance carried with the defendant insurance company; that by the terms of said policy of insurance it was provided that, if any of the employees of said realty company met his death from injuries received while engaged in the course of his employment, said insurance company would pay, and thereby become liable to pay, and agreed to pay, the surviving widow of such employee an amount equal to 60 per cent, of said employee’s average weekly wage, not to exceed $20 per week for a total period of 360 weeks, and agreed to pay the legal beneficiaries of Victoriano Soria the said amount.

Plaintiff further alleged that she was the surviving legal beneficiary of the deceased, and was entitled to the full amount of compensation due such beneficiary.

After the filing of the suit, it was apparently discovered that the defendant, realty company, had allowed its compensation insurance policy to lapse, and that at the time of Soria’s death it had no such policy. Therefore the insurance company was dismissed with ii¡s costs from the case, and the trial proceeded as between the plaintiff and the realty company.

During the trial Mr. B. L. Agerton, counsel for the defendant, entered into this agreement in the record:

“It is agreed that if any liability exists under the evidence in this case and under the finding of the jury, then that when the court comes to the ascertaining of the amount of liability, the same shall be fixed at $3073.26.
“It is agreed for the purpose of this' trial, that the average weekly wages of the deceased Soria was twenty-one dollars per week. The defendant agrees without waiving its rights to insist that no issue whatever should be submitted to the jury, but that this is a case in which a verdict in its favor should b.e instructed by the court, that it will take no exception to the failure of the court to submit to the jury any issue bearing upon the matter of a lump sum settlement, or the amount thereof; but that the matter of awarding a sum in a lump amount may be determined by the court, and that for the purpose of calculating such amount, should it become necessary under whatever verdict may be rendered herein, the standard discount tables used by the Industrial Accident Board of the State of Texas may be used and the amount thereof'arrived at therefrom by the court.”

Plaintiff alleged that, at the time of her husband’s employment by the defendant company, said defendant company was insured in the Employers’ Life Assurance Corporation, Limited, and that by the terms of said insurance policy said beneficiary of an .employee, if .said employee should be killed while in the performance of any of his duties, would be entitled to the compensation provided; that since there was an agreement between the defendant,' realty company, and the deceased that the deceased, or his beneficiary, should receive compensation if he should be injured or killed while in the course of his employment, and since the defendant, realty company, had not notified him by filing a notice with the Industrial Accident Board, and posting three printed notices in “public places around such subscriber’s plant” that he was no longer carrying insurance, it must be conclusively presumed that Soria had notice and knowledge of the fact that said subscriber had theretofore made provision with the association for the payment of compensation under the Workmen’s Compensation Law (Vernon’s Ann. Civ. St. art. 8306 et seq.), and that such relationship and provision continued until Soria’s death; that therefore, since by the contract of employment compensation was payable to the plaintiff beneficiary upon the death of her husband during the course of his employment, and the defendant, realty company, had not notified said employee by a compliance with section 20 of article 8308 that he no longer was a subscriber, he was bound and obligated to pay to said beneficiary the amount which would be due from the insurance company.

The evidence tends to show without contradiction that the deceased was killed while in the house provided for his occupancy by the realty company, by some one unknown. The evidence further shows that he was employed as a night watchman over the tools of the realty company, and his only duties were to sleep in the house and look after the tools under his charge. '

The cause was submitted to a jury upon special issues, which will be Hereinafter noted, together with their answers:

“1. 'At the time of the injuries which caused Victoriano Soria’s death, was he engaged as a night watchmdn by the defendant? Answer: Ves.
“2. If you Raye answered Issue No. 1 “No’, then you need not answer any further questions, but if ‘yes’, then answer: At the time of the injuries which caused the death of the said Soria, was he acting in the performance of his duties as night watchman, if you have so found, for the defendant? Answer: Yes.
“3. If you have answered No. 2 ‘No’, do not answer any further questions, but if ‘Yes’ then answer: Prior to the injuries to the said Soria which led to his death, did he know that the defendant had ceased to be a subscriber to the workmen’s compensation insurance? Answer: No.
“4. Prior to the injuries to the said Soria which led to his death, had notices to the effect that the defendant' had ceased to be a subscriber to workmen’s compensation insurance been posted in three public places around the defendant’s premises where Soria, the deceased, was working? Answer: No.
“5. Where the injuries sustained by the deceased Soria on the night. of February 23, 1929, caused by an act of some other person with an intention of injuring said Soria because of motives personal to such other person and not directed against Soria in connection with his employment by or with this defendant? Answer: No.”

The court rendered judgment in accordance with the agreement heretofore noted, awarding to plaintiff a lump sum. settlement of $3,-073.26, together with interest thereon from the date of the trial and all costs of suit, except the costs which were therefore taxed and adjudged against the plaintiff. From this judgment defendant has appealed.

Opinion.

In view of the agreement heretofore recited of Mr. Agerton for defendant, it will not be necessary for us to discuss the evidence pertaining to several matters, such as to the marriage of plaintiff with the deceased; the fact that she was sick at the time of defendant’s death, and therefore objection was made to holding the funeral of deceased at her home; and that there were two children born to her and the deceased, both of whom had previously died; and that she was at the time of the trial sick and in a position to demand and require a lump sum settlement, etc.

Article 8308, § 18a, provides that a subscriber under the Workmen’s Compensation Law shall immediately notify the parties of the fact that he is a subscriber, stating in such notice his name, place of business, character of business, the approximate number of employees, estimated amount of pay roll, etc.

Sections 19 and 20 of the same article read:

“19. Every subscriber shall, as soon as he secures a policy, give notice in writing or print, or in such manner or way as may be directed or approved by the board, to all persons under contract of hire with him that he has provided for payment of compensation for injuries with the association.
“20. Every subscriber shall, after receiving a policy give notice in writing or print, or in such manner or way as may be directed or approval [-ed] by the board to all persons with whom he is about to enter into a contract of hire that he has provided for payment of compensation for injuries by the association. If any employer ceases to be a subscriber, he shall on or before the date on which his policy expires, give notice to that effect in writing or print or in such other manner or way as the board may direct or approve to all persons under contract of hire with him. In case of the renewal of his policy no notice shall be required under this law. He shall file a copy of said notice with the board.”

Article 8306, § 3c, reads:

“From and after the time of the receipt by the Industrial Accident Board of notice from any employer that the latter has become a subscriber under this law, all employees of said subscriber then and thereafter employed, shall be conclusively deemed to have notice of the fact that such subscriber has provided with the association for the payment of compensation under this law. If any employer ceases to be a subscriber he shall on or before the date on which his policy expires give notice to that effect to the Industrial Accident Board, and to such subscribers’ employees by posting notices to that effect in three public places around such subscribers’ plant.”

The Supreme Court of Texas in a recent decision, Zurich General Accident & Fidelity Ins. Co., Limited, v. Walker, 35 S.W.(2d) 115, reversed the decision "of this court in Zurich General Accident & Liability Ins. Co. v. Walker, 21 S.W.(2d) 334, and rendered the case in favor of the defendant, and said, in substance, that, by the wording of the Workmen’s Compensation Law, the employees are conclusively presumed to know that the employer has taken out workmen’s compensation insurance. Therefore Walker was conclusively presumed to have known that hjs employer had taken out such insurance; and he could not claim that he did not know that his employer had taken out insurance to compensate him for such injuries as he suffered.

It is a well-recognized rule of law that •the existing statutes and the settled law of the land at the time a contract is made become a part of it, and must be read into it. 6 R. C. L. p. 854, § 243; Texas Jurisprudence, under title of contracts, par. 82.

Therefore, at the time the contract of employment was made between the defendant and the deceased, it must be conclusively presumed that the deceased had knowledge that the employee was insured under the Compensation Act. And the failure of defendant to give a statutory notice that he had ceased to be a subscriber would bind the defendant to compensate the beneficiary of the deceased as she would have been compensated if the contract of insurance was in existence.

Under sections 3 and 3a, article 8306, the deceased agreed to waive his right at common law or under any statute of this state to recover damages for injuries sustained in the course of his employment, and bound himself and his beneficiaries to look solely to appellant’s insurer for compensation in the ease of injury or death resulting from injuries received in the course of his employment.

Under section 3c, article 8308, and section 20, article 8308, the defendant agreed that, if it should cease to be a subscriber, it would on or before the date on which its policy expired give notice to that effect .to the Industrial Accident Board and to its employees by posting notices to that effect in three public places around its plant.

If the defendant company contracted that it should remain a subscriber until or unless it gave notice to the contrary, then its original contract of hire with Soria remained in •effect. The failure to renew the policy or obtain another policy of insurance constituted a breach of contract until or unless it gave notice to the contrary. The beneficiary under the Workmen’s Compensation Law was entitled to receive from appellant the equivalent of that which it contracted to provide, namely, the value of what she would have obtained from the insurer under the compensation policy of insurance. See Bayon v. Beckley, 89 Conn. 154, 93 A. 139.

It is not shown in the evidence that the employer gave notice to its employees that it had ceased to be a subscriber, and there is considerable evidence to show that it had not given such notice. Under the Workmen’s Compensation Law an emifioycr may refuse to become a subscriber, in which event the employee must rely upon his right of action at common law for damages. If the employer is not a subscriber, his commoniaw defenses, such as contributory negligence, etc., are taken away, and he may be liable in damages for injuries sustained by the employees in the course of their employment, or for death resulting from personal injuries so sustained, even though such injury or death directly or proximately resulted without the employer’s negligence. Article 8306, Rev. Civ. Statutes. In such a case, if the employer and employee contract on that basis, that law becomes a part of the contract of employment.

If the employer elects to become a subscriber to the Workmen’s Compensation Law, the employee, upon entering the employment, may waive his right of action for damages at common law or under any statute- of this state, against his employer, and agree to look solely to the association for compensation under the terms of the Compensation Act. If an employer, through the proper steps, becomes a subscriber, and if an employee, upon entering the'employment, does not give written notice that he relies upon his right of action at common law for damages against his employer for injuries sustained in the course of his employment, the employer is not liable in damages, and the employee must look solely to the association for compensation in the event of injury. Or, if the employer become a subscriber, and the employee, when entering the employment, gives written notice to the employer that he claims his right of action at common law or under any statute of this state for recovery of.damages sustained in the course of his employment, then the employee has a right of action against his employer for damages sustained through the negligence of the employer, under the common, law and the statutes of this state.

When the deceased entered the employment •of defendant, defendant had become a subscriber to the Workmen’s Compensation Act. It is in evidence that the defendant did not give to his employees the written notice prescribed by law that he had ceased to be a subscriber. The provision for compensation, in the event of injury or death, was one of benefit bestowed upon and accepted by the deceased, and his employment continued up until the date of the death of deceased without any change whatsoever, with the exception that appellant permitted the policy of insurance, taken out by it for the benefit of its employees, to lapse without having given notice to Soria, or to any other of its employees, that it had ceased to be a subscriber. The statute says the employer ceasing to be a subscriber shall give written notice, posted in three public places in his plant, that he has ceased to be a subscriber. This provision must have been intended to accomplish some purpose. Certainly it was intended to impose the duty and obligation upon the employer, who had become, and who had ceased to be, a subscriber, to give such notice as provided by law. Obviously,' it was enacted for the protection of the employee.

We believe that in the instant ease the defendant, the employer, would be liable to the beneficiary or the employee for such relief and compensation as she would be entitled to if the policy had been continued, and which the insurance company would owe the beneficiary, plaintiff below. It will be remembered that there is no requirement of any notice being given on the part of the employer of the renewal of the policy.

It is shown by a bill of exception that Jones, the foreman of the defendant company, on June 10, 1929, made a statement concerning the death of the deceased, giving the statement to the insurance company’s representative. That statement at that time reflected the truth in a general sort of way; that statement, introduced in evidence, was signed by him. On the trial Mr. Jones was asked the following questions:

“Q. Did you or not, Mr. Jones, state that on February 24, 192Ó, Sunday morning, at an unknown hour, one Victoriano Soria, who was employed by the above company, as a foreman in daytime and at night as a foreman of the company’s tools, etc., was shot?i A. I told the story to the insurance man and those are his words.
“Q. Is that in the statement? A. It evidently is, yes, sir.”

We think there was no error in admitting the statement in an effort to contradict the testimony of the witness, as ruled by the court. Though a party cannot ordinarily discredit his own witness, he may prove facts inconsistent with the witness’ testimony, even though he discredit the witness by doing so, and this rule applies in both civil and criminal cases. Parlin & Orendorff Co. v. Miller, 25 Tex. Civ. App. 190, 60 S. W. 881; Id., 94 Tex. 707, 60 S. W. 881, writ of error refused.

While Mr. Jones was on the stand, he seemed to be inclined to make a distinction, and contended that the deceased was not a “night watchman”; yet he admitted facts which constituted the deceased an employee during the night while he slept in the house protecting appellant’s property. Some legal purpose would be subserved by this part of the contract, and we believe, after he stated that the deceased was not employed as a night watchman, that the court correctly ruled that the statement was admissible, which tended to show that- he was a night watchman.

We conclude that a cause of action has been pleaded and proved by plaintiff, and that the judgment of the trial court should be affirmed, and it is accordingly so ordered.


author: REINHARDT, Special C. J. WILCOX, Special A. J.

text:
    SOVEREIGN CAMP W. O. W., v. CAMERON.
    No. 7569.
    Court of Civil Appeals of Texas. Austin.
    July 1, 1931.
    Rehearing Denied Aug. 12, 1931.

      Smith & Neill, of San Angelo, for appellant.
    D. I. Durham and R. G. Hughes, both of San Angelo, for appellee.
   REINHARDT, Special C. J.

On March 10, 1930, appellee filed her suit in the district court of Tom Green county, Tex., against appellant on a beneficiary certificate issued her deceased husband, Edwin I. Cameron, wherein she was named beneficiary. The” case was tried before the court without a jury on July 11, 1930, and the judgment was rendered for appellee in the sum of $1,100 with legal interest from February, 1929, and costs. Notice of appeal was promptly given. Findings of fact and conclusions of law were filed in due time, as was a supersedeas bond and assignments of error, so that the ease is now before this court for review.

It is alleged that at the time of his death the deceased had fully paid all the dues and assessments on the certificate, and all provisions' in the certificate had been complied with, and the certificate was in full force and effect. This is denied in the answer. The appellant pleaded that the deceased had allowed his certificate to lapse and become null and void under the laws of the order by reason of his nonpayment of the regular dues and assessments for June and July, 1928, before the expiration of said month of July, and that he had not been reinstated under the laws of the order. The appellee in reply pleaded waiver of forfeiture for nonpayment of dues and assessments within the prescribed time by accepting payment of the same unconditionally after that time.

The appellant’s society is a fraternal beneficiary association having a lodge system with a representative form of government incorporated under the laws of the state of Nebraska with its home office in Omaha, Neb. Edwin I. Cameron, deceased, and husband of appellee made application for membership in the order on March 10, 1928. On March 26, 1928, the benefit certificate was duly issued to the deceased in the sum of $1,000, wherein appellee was named beneficiary. The certificate contained an agreement of the insured to make prompt payment of all dues and assessments and to comply with and conform to all the laws, rules., and regulations of the order. The deceased did not pay his installments for June and July, 1928, and he became suspended after July 31, 1928. The report of the nonpayment of his dues and his consequent suspension was received at the home office of the appellant on August 16, ,1928. On August 29, 1928, the insured, Edwin I. Cameron, became sick and was carried to a hospital, where he died September 1st. On August 30, 1928, before he died a Mr. Bell paid the clerk of the local Woodmen camp installments for the months of June, July, August, and September. On September 14, 1928, the dues which were paid on August 30 were received at the home office of the appellant. On October 16, 1928, the report of the death of Edwin I. Cameron was received at the home office of the appellant and on February 9, 1929, the appellant declined to pay the claim of appellee and sent the appellee a check covering the dues which it received on September 14, 1928. The policy upon which the suit was brought provided, among other things pertinent to the issues involved, that the Sovereign Camp of the Woodmen of the World in consideration of certain warranties contained in the application and the further consideration of monthly payments would pay to the beneficiary, Anna M. Cameron, upon the death of the insured $1,000, and also $100 for the erection of a monument; that the certificate is issued and accepted subject to all the conditions set forth therein, and on the reverse side thereof and the provisions of the constitution, laws and by-laws of the association; that the articles of incorporation, and the constitution, laws, and by-laws of the association and all amendments to each thereof which may be made thereafter, the application for membership and medical examination signed by the ap-' pellant therein named as member as approved by the Sovereign Physician of the association and the certificate shall constitute the agreement between the association and the member and that, if payments required by the constitution, laws, and by-laws of the association are not paid by the member, the certificate shall be null and void, and, should the certificate become void for any cause, acceptance of, any payment from or for the member or other act by any camp officer or member of the association thereafter shall not operate as an estoppel or as a waiver oí the terms of the contract. The application signed by the deceased, Edwin I. Cameron, contained, among other provisions pertinent to the issues involved in this ease, the following :

“I hereby certify, agree and warrant that * * ⅜ my being suspended or expelled from, or voluntarily severing my connection with, the Society, or any failure on my part to comply with the laws of the Society now in force or hereafter adopted, shall make my ■beneficiary certificate void, and all rights of any person or persons thereunder shall he forfeited.
“I agree to make all payments for which I may become liable while a member of the Society as required by its Constitution, Laws and By-Laws, as now in force or which may be hereafter adopted, and at the time and in such manner and amount as may be provided by said Laws and if I do not make said payments at the time and for the amount required and provided in the Constitution, Laws and By-Laws of the Society, the certificate issued upon this application shall be null and void and all payments made by me thereon shall be retained by the Society.”

The constitution, laws and by-laws of the Sovereign Camp Woodmen of the World, pertinent to the issues involved, are as follows:

“See. 63 (a) Every member of this Association shall pay to the Clerk of his Camp one annual assessment or one monthly installment of assessment as required by these laws or by the provision of his certificate, which shall be credited to and known as the Sovereign Camp Fund, and he shall also pay such camp dues as may be required by the By-Laws of his camp. He shall pay any additional dues or other payments which may ba legally called.
“(b) If he fails to make any payments on or befoye the last day of the month he shall thereby become suspended, his beneficiary certificate shall be void, the contract between such person and the Association shall thereby completely terminate, and all moneys paid on account of such membership shall be retained by the Association as his liquidated-proportionate part of the cost of doing business and the cost of the protection furnished on the life of said member from the delivery of his certificate to the date of his suspension.
“Such person, if in good health, may thereafter make a new contract with the Association, upon the same terms and conditions, by complying strictly with the provisions of these laws, contained in Sections 65, 66 and 67. See 26 (g).
“Sec. 64. A person who becomes suspended for nonpayment of assessments or installments of assessment is not entitled to any benefits of this Association, nor shall he receive the pass word or participate in-any of the business or social proceedings of the Camp to which he had belonged.
“Sec. 65. ⅜ * * Whenever installments of assessments are paid by or for a person who has become suspended for the purpose of again making him a member, such payment shall be held to warrant that he is at the time of making such payment in good health, and to warrant that he will remain in gqod health for thirty days after such attempt to again beeome.a member, and to contract that such assessments when so paid after he has become suspended for non-payment of assessments shall be received and retained without waiving' any of the provisions of this section or of these Laws until such time as the Sovereign Clerk shall have received actual, not constructive or imputed, knowledge that the person was not in fact in good health when he attempted to again become a member. Provided; that the receipt and the retention of payment of such installments of assessments in ease such person is not in good health shall not make such person a member or entitle him or his beneficiary or beneficiaries to any rights whatever.
“Sec. 68 (a) The retention by the Association of any installment of assessment paid by or for any person after he has become suspended in order to again make him a member, shall not constitute a waiver of any of the provisions of this Constitution, Laws and By-Laws, or an estoppel upon the Association.
“(b) Any attempt by a suspended person to again become a member shall not be effective for that purpose unless such person be in fact in good health at the time and continue in good health for thirty days thereafter, and the payment of any unpaid installment of assessment shall be a warranty that such person is at the time in good health and that if the warranty is not true the certificate shall be null and void.
“See. 82 (a) No officer, employee or agent of the Sovereign Camp, or of any Camp, has the power, right or authority to waive any of the conditions upon which beneficiary certificates are issued, or to change, vary or waive any of the provisions of this Constitution or these laws, nor shall any custom on the part of any Camp or any number of Camps — with or without the knowledge of any Sovereign Officer— have the effect of so changing, modifying, waiving or foregoing such laws or requirements. Each and every beneficiary certifi-. cate is issued only upon the conditions stated in and subject to the Constitution and Laws, then in force or thereafter enacted, nor shall the knowledge or act of any officer or employee of this Association cause a Waiver of the provisions of these laws by the Association or an estoppel of this Association.
“(b) The Constitution and Laws of the Association now in force, -or which may hereafter be enacted, tbe application and beneficiary certificate of membership shall constitute the contract between this Association and the member."

There is no question but that under the facts of this case the policy of insurance sued upon became forfeited, null, and void on August 1, 1928, by reason of the fact that the insured failed to pay his monthly installments for the months of June and July. 'Then the only question remaining in this case is whether or not the payment of the installments for June, July, August, and September made by Bell on August 30, 1928, while the insured was sick, constituted a waiver of forfeiture or constituted a new contract upon which the beneficiary could recover. Under the facts of this case, and under the terms of the policy, the local camp clerk had no right or authority to waive anything. He could bind the company only within the scope of his authority, and his authority extended merely to the collection of the monthly installments. He certainly could not waive the forfeiture without a full knowledge of the existing facts, and there is nothing in the record to show that at the time he accepted the installments on August 30, 192S, he knew that the insured was sick, and, even if he did know it, such knowledge was not binding upon the company, for the reason that the same is contrary to the terms of the policy, and the agent cannot bind the principal except within the scope of his employment.

It certainly cannot be said that the Sovereign Clerk at the home office waived the forfeiture for the reason that he could not waive such forfeiture without a full knowledge of the facts. He did not know that the insured had become suspended until August 16, 1928, and on August 29, 1928, when the insured became sick, the policy was forfeited, null, and void. He did not know that the insured became sick on August 29, 1928. He did not know that any attempt had been made by the insured to pay his dues until September 14, 1928, when the same had been received at the home office, and at the time the insured was already dead. Under the terms of the policy, there was a condition precedent to the reinstatement or the making of a new contract that the insured at the time of making his delinquent payments must be in good health, and it is shown that he became sick on August 29,1928, and .the installments weie paid by Bell on the following day. The insurer could not waive the forfeiture without a full knowledge of the facts, and it is well settled that “forfeiture for default in payment of a premium is not waived by acceptance of the premium or by other acts of insurer after the death of the insured without knowledge of his death.” 37 C. J. 528; Kan. City Life Ins. Co. v. Elmore (Tex. Civ. App.) 226 S. W. 709; Joyce on Insurance Paragraph 1374, Vol. 3, Page 2543; Horstmann v. Capital Life Ins. Co., 194 Mo. App. 434, 184 S. W. 1164; Life Ins. Co. v. McAfee (Ky.) 90 S. W. 216; Wright v. Ins. Co., 204 Mo. App. 124, 221 S. W. 383.

If there was no waiver of the forfeiture, then the remaining question is whether or not the payment of the installments for June, July, August, and September made by Bell on August 30, 1928, and the receiving of same by the Sovereign Clerk after the death of the deceased constituted a new contract upon which the beneficiary could recover. Under the terms of the policy, a new contract can be entered into any time within three months, provided all past-due installments are paid, but when the same are paid there is an express warranty by the terms of the policy to the effect that the insured is in good health at the time his installments are paid, and that he will remain in good health for a period of thirty days thereafter. This being a part of the insurance contract, and being an express warranty, the contract would not be binding if the warranty was untrue, and it is not disputed that, at the time the installments for June, July, August, and September were made, the insured was then sick with appendicitis, from which he died on September 1st.

The appellee in this ease relies very strongly upon the case of Bailey v. Sovereign Camp, W. O. W., 116 Tex. 160, 286 S. W. 456, 288 S. W. 115, 47 A. L. R. 876, but the facts in that case are considerably different from the facts in this case, and the terms of the policy are also different. Under the terms of the policy in the Bailey Case, a suspended member had the right to again become a member by paying all arrearages and dues to the clerk of his camp within ten days from the date of his suspension, provided he was in good health at the time, and after the expiration of ten days, and within three months from the date of suspension, he could become reinstated by paying to the clerk of his camp all arrearages and dues, and also deliver a written statement and warranty that he was in good health at the time and would so continue for thirty days thereafter. It was also shown in that case that for some time previously the insured had been allowed to pay his dues after the prescribed time, but in this case the policy provides that he may again become a member by paying all arrearages and dues, but that such payment, whether paid by him or for him, constituted a warranty to the effect that he was in good health at such time, and would so continue for thirty days thereafter, and that the acceptance of such dues by the clerk would not constitute a waiver or an estoppel on the part of the Sovereign Camp.

The views expressed in this opinion are not in conflict with the opinion of the Special Supreme Court in the Bailey Case. It is held in the Bailey Case that, after the ten-day period, the insurer did not have to accept the money without the written warranty provided in the by-laws concerning good health, and, when it did accept the money without demanding and receiving the written warranty, it waived the requirement of good health, and thereby waived the forfeiture. Under the contract sued upon in the present ease, it is specifically provided that “whenever installments of assessments are paid by or. for a person who has become suspended for the purpose of again making him a member, such payment'shall be held to warrant that he is at the time of making such payment, in good health, and to warrant that he will remain in good health for thirty days after such attempt to again become a member, and to contract that such assessments when so paid, after he has become suspended for non-payment of assessments, shall be received and retained without waiving any of the provisions of this section or of- these laws until such time as the Sovereign Clerk, shall have received actual, not constructive or imputed, knowledge that the person was in good health when he attempted to again become a member. Provided that the receipt and retention of payment of- such installments of assessments, in case such person is not in good health, shall not make such person a member, or entitle him or his beneficiary, or beneficiaries, to any rights whatever.”

Under the contract involved in this suit, it is further specifically provided: “Any attempt by a suspended person to again become a member, shall not be effective for that purpose, unless such person be in fact in good health at the time and continue in good health for thirty days thereafter; and the payment of any unpaid installments of assessments shall be a warranty that such person is at the time in good health, and that if the warranty is not true, the certificate shall be null and void.”

Under the laws of the order quoted above, which became a part of the contract sued upon, it was not incumbent upon the clerk of the local camp to demand a written warranty of good health, or even to inquire as to the condition of the insured’s health at the time the delinquent installments were paid to him, and, consequently, the acceptance of such installments by the clerk of the local camp did not make or constitute a waiver of the previous forfeiture.

The payment of the installments was in itself a representation and warranty that the insured was at that time in good health, and the clerk had the right to rely upon such warranty. The facts are, however, that instead of the insured being in good health at the time the delinquent installments were paid, he was then dangerously ill, and died the second day thereafter, consequently the certificate sued upon was forfeited, null, and void, and the payment made by Bell of the past-due installments did not reinstate the insured as a member of the Order.

It might be said that, had not the insured become sick and died, the insurer would have accepted the installments and continued the policy in force. On the other hand, it could just as easily be said that, had not the insured become seriously sick at a time when his policy was forfeited, Mr. Bell would not have troubled himself to pay Cameron’s installments.

For the above reasons, the judgment is reversed, and judgment is here entered in favor of the appellant, the appellee to pay costs of the trial court and of this court.

Reversed and rendered.

On Motion for Rehearing.

WILCOX, Special A. J.

Appellee’s attorneys have filed herein a motion for rehearing, in which it is very strenuously contended that the opinion rendered in this case is in conflict with the opinion in the Bailey Case, 116 Tex. 160, 286 S. W. 456, and 288 S. W. 115, 47 A. L. R. 876. The writer does not think any such conflict exists. Under the contract of insurance in the Bailey Case, the insured had no absolute right to pay the past-due installments, without at the same time furnishing the written warranty of good health, and the local clerk did not have to accept such past-due installments without being furnished such written warranty. Under the contract sued upon in this case, it is specifically provided “any attempt by a suspended person to again become a member, shall not be effective for that purpose, unless such person be in fact in good health at the time and continue in good health for thirty days thereafter, and' the payment of any unpaid installments of assessments shall be a warranty that such person is at the time in good health, and that if the warranty is not true, the certificate shall be null and void.”

It is held in the Bailey Case, 116 Tex. 169, 288 S. W. 115, 47 A. L. R. 876, that, after the certificate became forfeited, the holder was no longer a member, and “he was no longer bound by the conditions of his certificate, except in so far as his right to enforce reinstatement was concerned.” Under this holding Cameron, even though he had been suspended and his certificate of insurance had become forfeited, was bound by the conditions and provisions of his contract in reference to his right to be reinstated as a member and to reinstate his insurance. In addition to the provisions of the contract quoted above, there are further provisions which are quoted in full in the original opinion rendered in this cause, which further provide that the payment of unpaid installments after the ten-day period, and within the three months period, shall be held to warrant that the insured is in good health at the time and will remain in good health for thirty days after such attempt to again become a member, and that such assessments, when so paid, shall be received and retained without waiving any of the provisions of the contract until the Sovereign Clerk shall have received actual, and not constructive or imputed, knowledge that the person was not in good health when he attempted to again become a member.

As stated in the original opinion, under these provisions of the contract, the payment of the past-due installments was in itself an express warranty that dt the time Cameron was in good health. At the time these installments were paid, whether paid by Cameron himself or by some one else for him, he was charged with notice of, and bound by the above-mentioned provisions of the contract in reference to reinstatement, and the acceptance of the' installments by the clerk of the local camp was not a waiver of the previous forfeiture. Under these provisions of the contract, it was not incumbent upon the local clerk to ascertain whether or not Cameron was in good health at the time, and even though the clerk might have known of Cameron’s illness, still the only authority the local clerk had was to receive and remit the money, and his receipt thereof did not constitute a waiver of the previous forfeiture.

The motion for rehearing is therefore overruled.

Overruled.


author: DUNKLIN, J.

text:
    CRUMP et al. v. HELLAMS et al.
    No. 12490.
    Court of Civil Appeals of Texas. Fort Worth.
    June 20, 1931.
    T. R. Boone and E. T. Duff, both of Wichita Falls, for appellants.
    P. B. Cox, of Wichita Palls, for appellee.
   DUNKLIN, J.

E. M. Crump and C. G. Crump, composing the partnership firm of Crump Brothers, were engaged in the retail grocery business in the city of Wichita Falls. The manner of conducting the business was indicated by the trade-name employed by the defendants of “E-Z Self Serving Grocery Store.” The store was so arranged that customers might pass up and down the building in making their selections of goods and merchandise which they desired to purchase. In 'the rear end there was a large refrigerator equipped with eight doors which opened into shelves where milk, cream, butter, vegetables, and other products were kept. Those compartments and the doors opening into them were arranged one above the dther. The compartments in which the articles were kept extended from the front .to a depth of 20 to 24 inches, and the lower compartment was from 2 to 4 inches from the floor. The next compartment above that one was from 18 to 20 inches above the floor, and the next one a corresponding distance above that.

Mrs. Addie Hellams was a customer of the defendant’s store, and on or about May 11, 1929, she entered therein with the implied consent and permission of the owners; she went to the refrigerator for the purpose of making a purchase of milk products. She opened the door of the lower compartment, and while stooping over, as she was compelled to do in order to inspect and take therefrom certain articles therein, one John M. Fox, another customer, opened an upper door of the refrigerator and swung it back above Mrs. Hellams’ body without giving her any warning of his act in so doing. After Mrs. Hellams had procured the milk products from the lower compartment, and without warning that the door above her had been left or held open, she straightened up and her back came in contact with that door and by reason thereof she sustained serious and painful injuries.

Mrs. Hellams and her husband, T. M. Hellams, instituted this suit against the members of the partnership firm operating the store and also John M. Fox to recover damages for the injuries she sustained. A joint and several judgment was rendered in favor of plaintiffs against the defendants John M. Fox and the members of the partnership firm for the sum of $500. The judgment against Fox was by default and he has prosecuted no appeal; but the Crump Brothers have prosecuted this appeal from the judgment against them.

The cause of action alleged against Fox was for negligence in opening and leaving open the refrigerator door which caused Mrs. Hellams’ injuries. The allegations of negligence on the part of the Crump Brothers, which were sustained by the findings of the jury, were (1) in failing to give any warning to customers using the refrigerator not ■to open the top doors of the same while another customer was using the lower compartment; (2) in failing to give notice to Mrs. Hellams and John Fox of the danger, if any, of two customers using the refrigerator at the same time; (3) in failing to have some one present to warn Blrs. Hellams and Fox of the danger of opening one of the top doors of the refrigerator while she was using the lower compartment. The jury further found that each of the acts of negligence so found by them was the proximate cause of Mrs. Hellams’ injury; and there were further findings exonerating Mrs. Hellams of the charge of contributory negligence in several particulars pleaded by the Crump Brothers.

The evidence showed that the refrigerator was of the same’ pattern as those used in nil stores of like kind operated by other dealers, and of the same pattern of those ordinarily used in homes; that each of the doors of the refrigerator was swung with springs attached so that when turned loose by a customer after being opened would instantly. close by the force of the springs; that the accident happened about 11 or 12 o’clock in the day; that there were signs posted in the store in conspicuous places that the store was a self-serving store; that Blrs. Hellams was a mature woman, who had often used this same refrigerator and knew the self-serving plan upon which the store was operated; that while she was attempting to take from the lower compartment of the refrigerator some milk products, the defendant John Bl. Fox, who was another customer, and with whose acts appellant was in no wise connected, opened the door of the upper compartment, and when Blrs. Hellams attempted to arise from her stooping position her back struck the open door just above; and that neither of the Crump brothers was present at the time of the accident or had anything to do with the opening of the door by Fox.

Appellants have assigned error to the refusal by the court of their request for an instructed verdict in their favor, and we have reached the conclusion that the assignment should have been sustained.

In 45 Corpus Juris, p. 639, it is said: “There can be no actionable negligence in the absence of some duty which has been neglected or violated, and hence in order that a person may have a cause of action on account of an injury to person or property resulting from negligence it is necessary that the act or omission complained of should have involved some breach of duty owed to him or to the person whom he represents by the person of whose negligence he complains.” And in the same volume, page 647, it is said: “The duty, breach of which may constitute negligence, must be a legal duty, and not a mere moral duty.” And again on page 910 it is said: “Passive negligence may constitute proximate cause if it is the direct cause of the injury. But where the negligence of one person is merely passive and potential, while the negligence of another is the moving and effective cause of the injury, the latter is the proximate cause and fixes the liability.”

Another rule is that to support a recovery for negligence it must appear that the injury should reasonably have been foreseen as a probable consequence of the act or omission constituting negligence. 45 Corpus Ju-ris, p. 913 et seq., in which many cases are cited to support the text, such as T. & P. Ry. Co. v. Bigham, 90 Tex. 223, 38 S. W. 162; City of Dallas v. Maxwell, 248 S. W. 667, 27 A. L. R. 927, by the Commission of Appeals.

In 29 Cyc. p. 471, in discussing the necessity of protecting dangerous places or in-strumentalities for the safety of those rightfully there, the following is said: “No precautions are necessary where the danger is obvious and unconcealed, or known to the person injured, or where it was the duty of the person injured to do the thing, failure to do which caused the injury.”

We quote the following from 1 Cyc. p. 647: “That one should so use his own as not to injure another is an approved maxim of the common law. The very idea of property, however, involves the common principle of the property itself being used and enjoyed in the manner most advantageous to. its possessor, and the maxim is construed to mean that damage resulting from reasonable and ordinary use alone will not constitute a legal injury.”

In Texas Loan Agency v. Fleming, 92 Tex. 458, 49 S. W. 1039, 44 L. R. A. 279, a judgment, in favor of a tenant of a rooming house for injuries sustained as the result of walking through a door of the second story which was not protected by any bars or guards, was reversed by our Supreme Court upon the conclusion reached that no actionable negligence was shown.

The following excerpt from 20 R. C. L. § 52, p. 56, is especially applicable here: “The mere ownership of land or building does not render one liable for injuries sustained by persons who have entered thereon or therein; the owner is not an insurer of such persons, even when he has invited them to enter. Nor is there any presumption of negligence on the part Of an owner or occupier merely upon a showing that an injury has been sustained by one while rightfully upon the premises. The true ground of liability is the proprietor’s superior knowledge of the perilous instrumentality and the danger therefrom to persons going upon the property. It is when the perilous instrumentality is known to the owner or occupant and not known to the person injured that a recovery is permitted. In the language of Mr. Justice Harlan (Bennett v. Louisville & N. R. CO., 102 U. S. 577, 26 L. Ed. 235), the owner is liable to invited persons for injuries ‘occasioned .by the unsafe condition of the land or its approaches, if such condition was known to him and not to them, and was negligently suffered to exist, without timely notice to the public or to those who were likely to act upon such invitation.’ ⅜ * * And, hence, there is no liability for injuries from dangers that are obvious, or as well known to the person injured as to the owner or occupant. Accordingly, it has been held that the rule of liability to invited persons has no application to a case where a person who, from' his experience through many years in a sailing vessel, knows that it is customary to leave the hatchways of vessels open while lying in port.”

In F. W. Woolworth v. Graham (Tex. Civ. App.) 257 S. W. 574, and again reported in (Tex. Civ. App.) 277 S. W. 223, it was held that a storekeeper was not liable for injuries suffered by his customer as the result of slipping and falling on a wet spot in the floor.

Many other decisions might be cited to the same effect, such as Chilberg v. Standard Furniture Co., 63 Wash. 414, 115 P. 837, 34 L. R. A. (N. S.) 1079; Dolan v. Callender, McAuslan & Troup Co., 26 R. I. 198, 58 A. 655, by the Supreme Court of Rhode Island; and Fry v. Hillan (Tex. Civ. App.) 37 S. W. 359.

Indeed, it appears that the injury to Mrs. I-Iellams was due solely to the negligence of defendant John'M. Fox in opening the door of the refrigerator at the time he did open it, and that his act in so doing could not have been foreseen by appellant as likely to occur any more so, and probably not as much so, as by Mrs. Hellams herself who evidently knew of his presence at the time.

Accordingly, the judgment of the trial court against the appellants is reversed, and judgment is here rendered that plaintiffs take nothing of them, and that appellants recover their costs against those plaintiffs, both in the trial court and in this court.

The judgment in favor of plaintiffs against defendant John M. Fox is left undisturbed.


author: JACKSON, J.

text:
    MARYLAND CASUALTY CO. v. MEYER.
    No. 3562.
    Court of Civil Appeals of Texas. Amarillo.
    June 24, 1931.
    Rehearing Denied July 11, 1931.
    Dorenfield, Foster & Fullingim, of Amarillo, for appellant.
    Harney & Buckley, of Borger, for appellee.
   JACKSON, J.

The appellee instituted this suit in the district court of Gray county, Tex., against the appellant, the Maryland Casualty Company, to cancel and vacate, because of the alleged fraud of appellant, an agreed settlement for compensation entered into by appellee as an injured employee of the Western Carbon Company and appellant as'compensation insurer of the employees of said Carbon Company.

The appellee alleged that on the 22d day of December, 1928, while an employee of the Western Carbon Company and in the course of such employment, he fell into a ditch about ten feet deep, which bruised his body, injured his spinal column, strained the muscles, ligaments, tissues, and tendons in his back, and that he sustained a double hernia. That at the time of such injuries he was earning a daily wage of $4 and had been earning such sum for substantially the whole of the year immediately preceding his injury. That his average weekly wage amounted to $23.07; that 60 per cent, of his average weekly wage is $13.84. That because of such injuries, his speech is impaired, he is unable to perform the duties required of him as a laborer, and is permanently and totally disabled, by reason of which the appellant became indebted to him for 401 weeks at 60 per cent, of his average daily wage, or a total of $5,540.64.

That, immediately after his injury, the appellant secured accommodations for him in the hospital owned and operated by Drs. Mc-Kean and Conner in the city of Rampa, Tex. That he remained in said hospital until about the 25th day of April, 1929. That appellant paid all expenses in connection with his treatment. That Drs. McKean and Conner are competent physicians and knew or should have known the exact physical condition of appellee. That said physicians, who are the agents of appellant, fraudulently represented to appellee that the only injury he had sustained was a double hernia; that an operation would correct such injury and that he would suffer no further inconvenience or pain and would be able to labor and earn money as he had previously done. That he submitted to such operation. That he was ignorant of his rights and in a weak physical condition. That he did not know that Drs. McKean and Conner were the agents of appellant, but had implicit confidence in their advide, and while in the hospital in such weakened condition, after they had represented to him that an operation would correct his injuries, and that he would be able to work and pursue his employment as theretofore, he relied on such representations and was induced thereby to enter into an agreed settlement, by the terms of which he accepted the sum of $75 in full settlement and satisfaction of his claim against appellant for compensation. That the $75 mentioned in the compromise agreement was represented to be compensation for a period of one month only, and that he would receive $75 per month for five additional months and two weeks. That said physicians knew of ap-pellee’s mental and physical condition and fraudulently induced and coerced him into signing said release and accepting such settlement for his compensation. That thereafter, without the knowledge of the appellee, such release and settlement was submitted to and approved by the Industrial Accident Board of the state of Texas. That the acts, conduct, and representations of said agents of the appellant were made for the purpose of overreaching appellee and fraudulently securing such release and discharge of appellant from further liability. That he but recently ascertained that such representations were false, and that said physicians knew at the time they were made that plaintiff was permanently and totally disabled.

That, because of such fraudulent representations, appellee has instituted this suit to set aside such purported settlement agreement and to secure an order directing the Industrial Accident Board to hear plaintiff’s claim upon its merits, so he may prosecute such claim to a final award.

The defendant answered by general demurrer, numerous special exceptions, and general denial.

On the findings of the jury on the special issues submitting fraud, the court set aside as null and void the compromise agreement and ordered the clerk to forward to the Industrial Accident Board of Texas a certified copy of the judgment to advise such board of the action of the court. From which judgment this appeal is prosecuted.

The appellant, because of the insufficiency of the amount involved in the compromise settlement, as alleged, challenges the jurisdiction of the district court to hear the case and cancel, set aside, and hold said compromise settlement null and void.

The record discloses that on December 22, 1928, the appellee was employed by the Western Carbon Company, which carried insurance to protect its employees with appellant; that appellee was receiving $4 per day for his services for seven days a week; that, while engaged in the services of his employer, he was accidentally injured. That on December 27th thereafter he was placed in the McKean and Conner hospital at Pampa, Tex., where he was treated at the expense of appellant; that about two weeks after he entered the hospital appellee was advised by Dr. McKean that an operation would relieve his back and his hernia. That about six weeks after he entered the hospital he was operated on, his hernia relieved, and after he left the hospital it became entirety well. That the doctor advised him that the pain in his back would gradually go away after the operation. That this was all the statement made to him before the operation. That after the operation, the doctor told him that he would not be able to do heavy work for six months, but could do light work earlier. That he knew his back was hurting, and the doctor did also. That the doctor did not conceal anything about his condition or his back hurting, as he knew there was something wrong with his back. That when he was discharged from the hospital the doctor told him he was in good physical condition and he could do light work. That this was the only time the doctor concealed anything about his physical condition. That after he left the hospital his hernia got well. That after he was discharged, he worked seven days for the Western Carbon Company, made $4 per day, the same amount he had theretofore received, and quit because he and other men were laid off. That he secured a position with another carbon company at the same wages and worked about a month. That while he was in the hospital, Dr. Mc-Kean furnished him with a law book and he had read that he would receive wages for twenty-six weeks for his hernia, and that he thought he was getting that amount when he signed the compromise agreement. That when he left the hospital his throat was affected, but he did not have the nervousness and jerking and twitching until after he went to work again after he was discharged and was not so afflicted at any time when he had conversations with Dr. McKean. That on February 20, 1929, he .entered into the compromise agreement subject to the approval of the Industrial Accident Board of the state. That appellee, on May 10th, after having been discharged from the hospital on May 3d, accepted a payment in settlement for his compensation, a check from the insurer for the sum of $75. That he went from Amarillo to Kingsmill to receive his check. That at the time he received his check he signed the release and was advised by the superintendent of the Western Carbon Company that he would not be paid any more, and on May 17th thereafter he employed counsel to represent him and secure such compensation as he was entitled to under the compensation law.

In our original opinion, we sustained appellant’s contention that the district court was without jurisdiction to cancel and vacate the alleged fraudulent compromise agreement, for the reason that, under such agreement and appellee’s allegations, the greatest amount involved in said agreement was $487.50. We based this holding on the doctrine that, in order to entertain a suit for cancellation and rescission of a written instrument, the authority of the court is dependent on its possessing jurisdiction of both of the parties and the subject-matter involved. 4 R. C. L. page 489; 7 Tex. Jur. 887; Crawford v. Sandridge, 75 Tex. 383, 12 S. W. 853; Jesse French Piano & Organ Co. v. Clay, 40 Tex. Civ. App. 638, 90 S. W. 682; Hollis v. Finks, 34 Tex. Civ. App. 12, 78 S. W. 555; Mixan v. Grove, 59 Tex. 573; Cleckler v. American Motors Finance Co. (Tex. Civ. App.) 24 S.W. (2d) 514.

On further consideration we have concluded that the opinion by the Commission of Appeals in Lumbermen’s Reciprocal Association v. Henderson, 15 S.W.(2d) 565, affirmatively approved by the Supreme Court, settles the question of jurisdiction against appellant’s contention and our holding in the original opinion.

In the Henderson Case he claimed that, after he had been paid $391.88, he was fraudulently induced by the insurer to execute what purported to be a compromise settlement, by the terms of which he was to be paid $111.38. This settlement was approved by the Industrial Accident Board, and thereafter Henderson made application to the board to cancel the alleged fraudulent settlement and award him compensation for his injuries under the Workmen’s Compensation Law (Vernon’s Ann. Civ. St. arts. 8306-8309). The board ruled against him, and he sued in the district court to cancel and set aside the alleged fraudulent agreement and the ruling of the board thereon, and to recover the compensation allowed under the compensation statutes of this state. The district court canceled the compromise settlement for fraud, set aside the action of the board, and rendered judgment for Henderson for compensation. This action of the district court was affirmed by the Court of Civil Appeals, 1 S.W. (2d) 646. A writ of error was granted, and the Supreme Court held th'at the district court was without jurisdiction to render judgment in favor of Henderson for compensation, because the record failed to disclose that the Industrial Accident Board had passed on the merits of his claim. However, the Supreme Court did hold •that the district court had jurisdiction to cancel the compromise settlement for fraud, and the sum specified in the compromise settlement was but $111.38. Manifestly this amount was not the basis of jurisdiction, as fundamental error apparent of record would have been presented, of which the Supreme Court would have taken cognizance. In the instant case, the appellee did not sue to recover any sum of money on account of the alleged fraudulent settlement or on account of his alleged injuries, but simply sought to have the alleged fraudulent settlement canceled so as to leave him free to file his claim for compensation and secure the ruling of the Industrial Accident Board on the merits of his claim. Under his allegations he had been deprived of that right by fraud and the value of such right, measured by the allegation of his injuries, the permanency thereof, the wages he received, and the amount he was entitled to recover under the Compensation Law, is sufficient to give jurisdiction to the district court.

W. W. Meyer, the appellee, having failed to present to the Industrial Accident Board his claim for compensation, and the merits of such claim never having been passed on by said board, the district court had no jurisdiction of his claim for compensation. But if his allegations and proof as to his injuries, the extent thereof, and his wages, are true, the amount involved was the difference in the amount he was entitled to under the Compensation Law and what he had received under . the alleged fraudulent settlement. Lumbermen’s Reciprocal Association v. Henderson, supra; Texas Indemnity Ins. Co. v. Davis (Tex. Civ. App.) 32 S.W.(2d) 240; 15 C. J. 753, § 52.

The appellant’s assignment assailing the sufficiency of the testimony to support the finding of the jury that, at the time the ap-pellee signed the compromise agreement, the appellant fraudulently and falsely represented to him or concealed from him his true physical condition as it then' existed, must be sustained. The compromise settlement, according to the record, was signed February 20, 1929. The appellee testified that the only time Dr. McKean concealed from him anything relative to his physical condition was on May 3d, when he was discharged from the hospital, and at that time the doctor advised him that he would not be able to do heavy work for six months, but could do light work. The testimony shows that appellee entirely recovered from the effects of the double hernia, and that the nervous jerking, twitching and involuntary tremor of his muscles developed after he was discharged from the hospital and had returned to work. The testimony is wholly insufficient to show that the doctor made any representations relative to appellant’s liability or nonliability to appellee for his injuries, or that any representation was made to him regarding the amount he could or could not recover. That when the compromise agreement was presented to appellee, it provided for the payment of $50. That appellee objected to this amount, and the sum was changed to $75 by the doctor, and thereafter was signed and accepted by appellee without any advice, suggestion, or representation having been made to him. That no one, except Dr. McKean, ever talked to appellee about the compromise settlement. The testimony tends to show .that appellee’s physical condition could have resulted from the injuries he received, but it dpes not show that such results usually and ordinarily follow such injuries. It is not sufficient to show that the doctor knew such results would follow, or by the exercise of proper care should have known it.

The record discloses that testimony was offered, over the objection of the appellant, showing that appellee’s conditionjhad changed since the compromise settlement and after he had been discharged from the hospital. In order for such testimony to be admissible, it should be made to appear that the doctor knew, or should have known, that the. representations made were untrue.

The appellee relied solely on his allegations of fraud, not pleading either accident or mistake.

“Under the Workmen’s Compensation Act a compromise settlement made between an injured man and the compensation insurance company duly approved by the Industrial Accident Board, the' money being paid, constitutes a bar to any further claim on his part for compensation, in the absence of the showing of fraud, accident or mistake and where such claim has been duly compromised and settled, with the approval of the Board, the injured claimant is not entitled to recover additional compensation on the sole ground of a showing of a change in his condition after the compromise settlement.” Lumbermen’s Reciprocal Association v. Day (Tex. Com. App.) 17 S.W.(2d) 1043, 1044.

The motion for rehearing is granted, the. original opinion is withdrawn, and the judgment of the trial court is reversed, and the cause remanded.