text:
    REPUBLIC NATIONAL LIFE INSURANCE COMPANY, Appellant, v. Sudie SPILLARS et al., Appellees.
    No. 4078.
    Court of Civil Appeals of Texas. Waco.
    Dec. 6, 1962.
    Rehearing Denied Jan. 10, 1963.

      Thomas G. Nash, Jr., Dallas, for appellant.
    Mac L. Bennett, Jr., Normangee, Fulbright, Crooker, Freeman, Bates & Jawor-ski, M. W. Parse, Jr., Houston, Boyd M. Bailey, Madisonville, for appellees.
   WILSON, Justice.

Credit Life insurance governed by the provisions of Insurance Code Art. 3.S3, Vernon’s Annotated Texas Statutes is the subject matter of this cause. Judgment was rendered against the insurer in a non-jury trial. No findings or conclusions were filed.

A group creditors life policy was issued by appellant, effective July 1, 1960, to Farmers State Bank of Madisonville. in consideration of an original single premium paid by the bank. It provided initial life insurance coverage for all eligible debtors of the bank whose names and amounts of indebtedness were then submitted by the bank to appellant. It further provided that “all new debtors of the same class or classes may likewise be insured hereunder from the date they become new debtors” of the bank.

The bank’s application for the group pol-. icy specified that coverage was excluded for debtors “who are delinquent on their contracts of indebtedness on the date insurance under the policy would otherwise have become effective on such debtors.”

J. D. Spillars, Sr. executed a note to the bank December 23, 1960 in renewal of a previous note secured by a chattel mortgage, and evidencing extension of an indebtedness to the bank which had existed two or three years. Spillars delivered to the president of the creditor bank a check on that bank dated December 23, 1960 in the amount of the premium for his coverage under the group policy. Spillars did not then have sufficient funds on deposit to pay the check, and the president temporarily held it in his desk. Later Spillars told the bank president he realized he was overdrawn, but would soon sell some calves and “take care of the check.” Again, the president testified, “he came back in here and told me that he was fixing to sell the calves and to go ahead and write the insurance; and I wrote the insurance on January 14th, at his request.” A certificate of insurance bearing that date was issued by the president as appellant’s agent. On January 17, 1961 Spillars died.

Appellant urges that recovery is precluded because of failure to establish the premium for his coverage was paid while Spillars was alive. The point is overruled. The president of the bank, as appellant’s agent, issued the certificate of insurance before the death of Spillars. There is nothing in the certificate, application or policy obligating the debtor to pay or remit a premium to the insurer. This was the creditor’s obligation. Ins.Code, Art. 3.50, Sec. 1(4) (b), Vernon’s Ann.Tex. Stats. The application of the bank to the insurer for the group policy required that “Subsequent premiums for insurance becoming effective after effective date of the policy shall be remitted by the creditor to the company on the last business day of each calendar month after the effective date of the policy.’’ The insurer does not contend the group policy was breached or ineffective because of the bank’s delay in making remittance to it.

The bank’s duty under the terms of the policy was to forward to the insurer “an itemized list of names of all debtors and the amounts of their respective indebtedness on which insurance was made effective during each such month.” There was no requirement that applications be accepted or approved by the company before insurance on lives of individual debtors became effective. The established system of premium payment and method of remittance agreed to and acquiesced in by appellant was that the bank reported the names of insured debtors, their premiums and the loan amounts on or before the fifth day of each month on certificates issued during the preceding month; and that a deposit to the credit of the insurer of the total amount of premiums on such insurance was made in the Farmers’ State Bank within such time. Spillars’ check cleared the bank February 3rd, and appellant’s account was credited with the amount of his premium February 2nd. The bank’s report of insurance effective in January, sent to appellant, listed the names, debts and premiums of 22 debtors numerically by effective dates, extending from January 3 to January 27, 1961. Spillars’ name was the 15th by number and effective date. The total amount of premiums payable, including that for Spillars, was shown on the report, and was deposited to appellant’s credit. The bank president testified he accepted Spillars’ check in payment of the premium for the insurance.

The group policy and the statute afforded the bank, as policyholder, a grace period of 31 days for the payment of the premium for insurance on Spillars’ life, and the payment was made by the bank — the only one obligated to make it — well within that period.

Appellant next contends Spillars was not eligible to become an insured debtor of the bank because he was not a “new” debtor, as that term is used in the policy provision first quoted above. The point insisted upon is that he was already a debtor in July, 1960 when the group policy was first issued to the bank, and was not then listed as an insured debtor; and he was thus an “old” debtor when his certificate of insurance was issued in January, 1961. We reject the definition sought. The group policy afforded coverage for all qualified debtors of the bank “whose respective names and amounts of indebtedness as of the effective date of this policy are submitted by the creditors to the Company” as being “initially insured” on its effective date. It then provided that while the group policy is in force “new” debtors might likewise be insured from the date they became new debtors of the bank. We think the provision meant only to authorize coverage on debtors other than those “initially insured” at any time after the effective date of the group policy; that it did not condition eligibility on contemporaneity of inception of indebtedness; and that debtors other than those “initially insured” became eligible as newly insured debtors from and after the date they became debtors.

Further ground for reversal is the contention that recovery was unauthorized because of failure to show Spillars was not delinquent in paying his debt to the bank, under a policy provision excluding coverage of' delinquent debtors. Spillars’ only note or insured debt was dated December 23, 1960 and was payable on or before June 23, 1961, over five months after he became insured. The point is overruled.

Since Art. 3.62 Insurance Code provides an insurance company shall be liable to pay the “holder” of the policy penalty and attorney fees, appellant says Spillars’ estate may not recover therefor because the bank — not Spillars — was the holder of the policy. The present group policy provided the insurer would issue to the bank “for delivery to each insured debtor” an “individual certificate which shall state the amount of insurance to which he is entitled.” In this case the bank relinquished its claim against the insurer to the estate, by stipulation. The contract provided insurance on the life of Spillars. Although it provided the proceeds should be paid to the bank as the statute specifies, it also required they be “applied by the creditor to reduce or extinguish” Spillars’ debt. Although the bank became thereby the immediate beneficiary as loss-payee, it was such to facilitate payment by the insurer and for protection of the bank’s interests; but the ultimate and direct beneficiary was the estate of Spillars as well.

“Where the statute makes insurer liable to the ‘holder’ of the policy, the word ‘holder’ refers not to custody, but to beneficial ownership, and the holder is the person who, having the right to sue, has exercised that right successfully.” 46 C.J.S. Insurance § 1407, p. 724; and see Mercury Life Ins. Co. v. Mata, Tex.Civ.App., 310 S.W.2d 130, 134, writ ref.; Huddleston v. Home Life Ins. Co. of N. Y., 182 Ark. 1036, 34 S.W.2d 221; United States v. H. R. Henderson & Co., D.C.Ark., 126 F.Supp. 626. It is not necessary to distinguish Hartford Accident & Ind. Co. v. Morris, Tex.Civ.App., 233 S.W.2d 218, writ ref. n. r. e., since workmen’s compensation insurance, there considered, is not within the terms of Art. 3.62. Southern Surety Co. v. Nelson, 111 Tex. 140, 229 S.W. 1113. Affirmed.


source: Caselaw Access Project

author: GRISSOM, Chief Justice.

license: Public Domain

text:
    TRINITY UNIVERSAL INSURANCE COMPANY, Appellant, v. Horace E. HORTON et ux., Appellees.
    No. 3756.
    Court of Civil Appeals of Texas. Eastland.
    Dec. 14, 1962.
    Rehearing Denied Jan. 11, 1963.

      Simon & Simon, Fort Worth, for appellant.
    Turner & Seaberry, Eastland, for appel-lees.
   GRISSOM, Chief Justice.

Horace E. Horton and wife sued Trinity Universal Insurance Company on its fidelity bond to recover losses sustained by reason of the fraud of their salesman. The salesman had procured written orders from purchasers in the southeastern part of the United States, sent them to the Hortons, the Hortons filled the orders and paid the salesman his commission for the sale of that merchandise. The purchasers claimed that the salesman did not sell them the merchandise but agreed to deliver it to them on consignment, that is, to be paid for only when it was sold. The Hortons investigated the claims and took back from the purchasers the merchandise not already sold. The Hortons seek to recover from the insurer the damages they sustained as a result of the salesman’s fraud.

After introduction of the testimony of a witness and of some documents, plaintiffs withdrew their announcement of ready and the trial was postponed. Thereafter, the Hortons filed a motion for summary judgment, attaching thereto the affidavits of said purchasers and Mr. Horton which tend to show the fraud of the salesman, loss by the Hortons and their right to recover from the bonding company. The insurer filed an answer and affidavits controverting plaintiffs’ motion. It contended that plaintiffs’ affidavits were inadmissible, at least in part, and that facts essential to recovery on the bond were not conclusively established. The court granted plaintiffs’ motion for a summary judgment and entered judgment for the Hortons. The insurer has appealed.

Appellant’s first point is that the testimony of the purchasers, even if adduced by deposition or direct testimony, that the salesman, prior to the time they signed the orders, represented that the merchandise would be delivered to them on consignment, was inadmissible because it varied and contradicted the written orders. Since appellees’ suit is based upon fraud we think such testimony was not subject to that objection. Point one is overruled. Dallas Farm Machinery Company v. Reaves, 158 Tex. 1, 307 S.W.2d 233; Texas & Pacific Railway Company v. Presley, 137 Tex. 232, 152 S.W.2d 1105.

Appellant’s second point is that because the written orders introduced by appellees showed a sale of the merchandise and Mr. Horton testified that Davis still claimed they were bona fide sales a fact issue was raised as to whether there was a sale. Appellant’s third point is that the affidavits, of the purchasers were subject to the objection that they contained conclusions and hearsay; that they were contradicted by other evidence apd, therefore, were not conclusive of the facts requisite to rendition of a summary judgment. The fourth point is that, since the bond sued upon insured the Hortons against loss sustained through fraudulent acts of its employees, fact issues were raised as to whether the salesman was guilty of fraud, the Hortons sustained damages and, if so, the amount thereof.

Excepting the contention in said points that the testimony violated the parol evidence rule, we sustain points 2, 3 and 4. Mr. Horton testified to the effect that the orders signed by said purchasers, received and filled, were taken on appellees’ forms for the sale of merchandise and showed a sale, not a consignment. He testified that when he investigated the claims of the purchasers they said his salesman had agreed that the merchandise would be delivered to them on consignment, and that their orders would so show. But, he also testified that when he contacted his salesman, the salesman claimed that he had made bona fide sales to said purchasers, as shown by the orders, and that he had no agreement with the alleged purchasers for them to obtain the merchandise on consignment. Assuming the admissibility of such testimony, such evidence discloses that there was an issue of fact as to whether the merchandise was actually sold to said alleged purchasers. But, disregarding the testimony as to what the purchasers and salesman told Horton, fact issues were raised. Appellant’s counter affidavits pointed out that the affidavits of the alleged purchasers were contradicted by their written purchase orders which they signed. In the affidavits of the alleged purchasers they say that the sale was represented by the salesman to be on a consignment basis and that after the merchandise, was delivered they were told that Davis was not authorized to sell on consignment. The affidavit that Davis represented that the, merchandise would be delivered on consignment, does not purport to quote Davis and states a conclusion. The statement that they were told that Davis was not authorized to send the merchandise on consignment was hearsay.

The burden was upon appellees - to conclusively establish that their salesman - was guilty of fraud, that they were damaged thereby and the amount thereof. There were issues of fact as to whether Davis committed a fraud; whether appellees were damaged thereby and the amount of damages. '

Texas Rule of Civil Procedure 166-A requires that affidavits supporting a motion for summary judgment be made on personal knowledge and state facts which would be admissible on a trial of the case. The affidavits must contain statements of fact which the affiant knows and is able to substantiate on a trial. They must show affirmatively that the affiants are competent to testify to the matters stated therein. Hearsay statements and conclusions of law may not be considered. On the hearing of a motion for a summary judgment the court must determine whether there is any issue of fact to be tried. The court cannot weigh the evidence, determine the credibility of the witnesses and try the case on affidavits. All doubts as to the existence of a genuine issue as to a material fact must be decided against the party moving for a summary judgment. The court must accept as true all evidence of the party opposing such a motion which tends to support his contention and must give him the benefit of every reasonable inference which may be drawn therefrom. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929; Box v. Bates (Sup.Ct.), 346 S.W.2d 317.

We overrule appellant’s fifth point in which it contends that a fact issue was raised as to whether Davis was an employee.

The judgment is reversed and the cause is remanded.


author: McDONALD, Chief Justice.

text:
    Ed GUMMELT, Sr. and Ed Gummelt, Jr., Appellants, v. SOUTHWESTERN INDEMNITY COMPANY, Appellee.
    No. 4071.
    Court of Civil Appeals of Texas. Waco.
    Dec. 13, 1962.
    Rehearing Denied Jan. 10, 1963.
    Riley, Jones, Boyd, Westbrook & Lovelace, Waco, for appellants.
    D. B. Kultgen, Waco, for appellee.
   McDONALD, Chief Justice.

This case presents the question of the priority of the lien of the State of Texas for Special Fuels Tax under former Article 7065b-14(g) (now Art. 10.17 Taxation General Vol. 20A V.A.T.S.), over the prior lien of a private creditor; and also, presents the question of whether a surety on a bond guaranteeing payment to the State of taxes due, who pays such taxes, under such bond upon default by the taxpayer, is sub-rogated to the priority status of the State, in asserting such lien.

W. S. and W. B. Mosley operated a service station called “Ed’s Service Station.” The station was operated on land owned by defendant (appellant) Ed Gum-melt, Sr. At the station “Special Fuels” subject to tax under former Art. 7065b-14 (g) V.A.T.S. were sold. In 1956, the Mos-leys executed a bond for $3000 to secure payment of their Special Fuels Tax. Plaintiff (appellee), Southwestern Indemnity Company, was surety on such bond. In 1957, the Mosleys defaulted, and Southwestern paid to the State $3000 as the bond required. The State (through the State Comptroller) assigned to plaintiff the State’s claim. At the time of the Mosleys’ default on the State tax, the Mosleys were the owners of certain equipment and certain accounts receivable.

In 1955, and prior to the foregoing, the Mosleys executed a note to the Community State Bank with Ed Gummelt, Sr. as a surety. Such note was secured by chattel mortgages on the equipment and supplies at the service station, and on the accounts receivable. The Mosleys defaulted on the note to the Community State Bank, and the balance due thereon, $2125.73, was paid off by the surety, Ed Gummelt, Sr. The bank assigned their debt and the lien securing same to Gummelt, Sr., who assigned to Gummelt, Jr. Gummelt, Jr. collected $3318.70 from the accounts receivable, and sold the equipment and supplies for $750, (for a total of $4068.70).

Plaintiff Southwestern, after- paying the State the $3000 and taking assignment from the State, instituted this suit against the Gummelts, asserting that it, by virtue of the payment to the State and the assignment from the State, became subrogated to the lien of the State, and that such lien was superior to the lien assigned to the Gummelts. Plaintiff further alleged that defendants had notice of all of the facts, and that their acts in the premises constituted a conversion of the security (of the State assigned to plaintiff).

Trial was before the Court without a jury, which, after hearing, rendered judgment for plaintiff against Gummelt, Jr. for $3000 and against Gummelt, Sr. for a lien on the premises known as “Ed’s Service Station” to secure payment of the $3000' (and for foreclosure of such lien).

Defendants appeal, contending:
1) Article 10.17 does not, of its own force, create a perfected lien, and until it is asserted and perfected by the State, (and thus attaches to specific property), it is an inchoate and general lien, to which there can be no subrogation.
2) Even if the State perfected its statutory lien, and plaintiff was subrogated thereto, it would be inequitable and contrary to public policy to allow further subrogation to the statutory priority of the State.
3) Even if the plaintiff be completely subrogated to the preferred lien of the State against the Mosleys, plaintiff cannot recover from defendant who has equities superior or at least equal to those of plaintiff.

Article 10.17 (formerly 7065b-14g) provides that all taxes due by any dealer “shall be secured by a preferred lien, first and prior to any and all other existing liens, contract or statutory, legal or equitable, and regardless of the time such liens originated,” upon all of the property of any dealer used in the business, and upon all “accounts and notes receivable”; and upon “each tract of land * * * which is used in carrying on such business.”

Thus the language of the statute itself resolves this first question: the State does have a priority lien for special fuels tax, over the prior lien of a private creditor, and that such lien is an attached lien to the property of the taxpayer used to conduct the business, his accounts receivable, and the real estate upon which the business is conducted. Such statute resolves such lien to be specific and perfected,, as distinguished from an inchoate and general lien.

The foregoing is confirmed by State v. Wynne, 134 Tex. 455, 133 S.W.2d 951, which involved the State’s claimed lien for motor fuel taxes under Art. 7065b-8 VAS (an almost verbatim copy of Art. 7065b4 (g), the provision here involved). Such case holds that the State has a lien superior to the liens of all private creditors, regardless of when created; and that the lien applies to all property used in the fuel dealer’s business, even though the dealer does not own the property.

Plaintiff, a surety on the defaulting taxpayer’s bond, paid the State the taxes due, and the Trial Court held that it was subrogated to the priority status of the State in asserting such lien. We think the Trial Court correct.

There may be subrogation of sureties to the right of the State. See Boaz v. Ferrell, Tex.Civ.App., (n. w. h.) 152 S.W. 200; Skipwith v. Hurt, 94 Tex. 322, 60 S.W. 423; Anderson v. Walker, 93 Tex. 119, 53 S.W. 821; New Amsterdam Cas. Co. v. 1st Nat. Bank, Tex.Civ.App., Er.Dis., Judg.Cor., 134 S.W.2d 470.

A surety who pays the principal’s debt stands in the shoes of the original creditor as to any securities and rights of priority. Fox v. Kroeger, 119 Tex. 511, 35 S.W.2d 679, 77 A.L.R. 663. In such case our Supreme Court holds:

* * * we now announce the rule in Texas to be that, where the surety pays the debt of the principal, he has his election to either pursue his legal remedies and bring an action on an as-sumpsit, or the obligation implied by law in his favor for reimbursement by the principal; or he can prosecute an action on the very debt itself, and in either event he stands in the shoes of the original creditor as to any securities and rights of priority.”

From the foregoing we hold that the lien of the State of Texas was specific and attached, and a priority lien to defendants’ hen; and that plaintiff in discharging the Mosley’s tax liability to the State of Texas, succeeded to the State’s lien and to the State’s priority status with reference to such lien.

Defendants’ points are overruled and the judgment of the Trial Court is affirmed.


author: WILSON, Justice.

text:
    William Daniel HOWZE, Appellant, v. Homer GARRISON, Jr., et al., Appellees.
    No. 3956.
    Court of Civil Appeals of Texas. Waco.
    Dec. 13, 1962.
    Rehearing Denied Jan. 10, 1963.

      Beard, Kultgen & Beard, Waco, for appellant.
    Frank Beard, Asst. Dist. Atty., McLennan County, Waco, for appellees.
   WILSON, Justice.

Construction of Sec. 33, Art. 6701h, Vernon’s Ann.Tex.St. is the problem presented. Plaintiff sought to enjoin total suspension of his driver’s license, alleging he was employed to drive motor vehicles for an incorporated city. He asserted Art. 6701h has no application to him “while he is operating motor vehicles owned by” the city, and that the Act does not authorize complete suspension of his license so as to interfere with his driving such vehicles. He states the question here is whether the statute authorizes suspension of his license to drive vehicles for the city. The trial court denied relief.

Section 33 of Art. 6701h provides “This Act shall not apply with .respect to any motor vehicle owned” by any municipality, and others specified; nor generally to motor vehicles of certificated motor carriers subject to requirements of certain sections of Arts. 911a and 911b, V.A.T.S.

We think Sec. 33 concerns only “motor vehicles”, and not drivers or their licenses.

If we accepted appellant’s proposed interpretation, a driver whose license was suspended would also be authorized, notwithstanding, to operate vehicles for bonded or insured motor bus and motor carrier companies to whose “vehicles” the Act also “shall not apply”.

While appellant is interested primarily in his own license in this case to operate certain vehicles, we must look to the effect of a holding such as he urges on other drivers and other vehicles in Texas affected by Sec. 33. We no more consider it the legislative intent to make the exception applicable to drivers of municipally owned vehicles than to drivers of motor buses and vehicles of carriers subj ect to requirements of Art. 911a, Sec. 11 and Art. 911b, Sec. 13.

Appellant relies on Attorney General’s opinion V-1380, 1951, which relied in turn on City of St. Paul v. Hoffmann, 1946, 223 Minn. 76, 25 N.W.2d 661. The Minnesota statute did not provide for suspension of registration of vehicles as does Art. Ill, Sec. 5(b) and Art. IV, Sec. 13(a) of the Texas Act. The Minnesota court expressly observed that its statute must have intended to exempt drivers since it “operates exclusively by suspension of licenses to operate motor vehicles and not against the vehicles themselves,” as does our enactment.

In City of Phoenix v. Lane, 76 Ariz. 240, 263 P.2d 302 the Arizona Act contained an exception that suspension provisions should not apply to the driver of his employer’s vehicle, but should apply to the employer only.

The distinction between these cases and ours is pointedly drawn by the Supreme Court of Missouri in City of St. Louis v. Carpenter, Mo. 1961, 341 S.W.2d 786. The Missouri statute, as does ours, made the suspension provisions operative both on the operator’s license and the registration of vehicles. The Missouri Motor Vehicle Safety Responsibility Law made its provisions inapplicable, as does our Sec. 33, to “any motor vehicle owned by” a municipality. The Missouri Supreme Court held, as do we, that .reading the exemption contended for into the statute is not justified.

The trial court’s judgment first dismissed the action with prejudice, and thereupon disposed of the merits. It is modified to delete the dismissal, and as modified is affirmed.


author: COLEMAN, Justice.

text:
    GARNOR-EVANS & COMPANY et al., Appellants, v. Eula WEBBER et vir, Appellees.
    No. 13994.
    Court of Civil Appeals of Texas. Houston.
    Dec. 6, 1962.
    Rehearing Denied Jan. 10, 1963.
    Fulbright, Crooker, Freeman, Bates & Jaworski, J. S. Covington, Jr., Houston, for appellants.
    Fred Parks and Donn C. Fullenweider, Houston, for appellees.
   COLEMAN, Justice.

This is a suit for damages against an insurance agent based on a misrepresentation of the coverage of a Hospital and Medical Expense Insurance Policy made by the agent after the policy had been sold and delivered.

After the expense incident to surgery was incurred, the insurance company denied liability since the policy did not cover expenses caused by illness originating within thirty days of the date of the policy.

The case was tried to a jury and judgment was entered on the verdict in favor of 'the plaintiff against the agent, but not the insurance company.

Mrs. Eula Webber purchased from Gar-nor-Evans & Company a policy of insurance commonly referred to as a hospitalization policy. Her application for insurance was made on February 10, 1956. The policy was issued by the Boston Insurance Company on March 16, 1956 and was delivered to her. On April 4, 1956 Mrs. Webber called Mr. Arthur Evans, the agent who had sold the policy to her, and asked him whether her insurance policy would cover the expense of an operation if she had it immediately. After checking a specimen policy and recalling that the application for the policy was taken in February, Mr. Evans assured her that the expense would be covered by the policy. The operation was performed on April 10, 1956, and the insurance company subsequently denied liability. Medical and hospital bills were incurred by Mrs. Webber in a sum in excess of $998.27. The jury found that the representation made by Mr. Evans was material and caused Mrs. Webber to act in a manner different from the action she would have taken otherwise, resulting in damage to Mrs. Webber in the sum of $998.27.

The insurance policy purchased by Mrs. Webber provides:

“ * * * This insurance is against loss resulting from accidental bodily injury sustained while this policy is in force, * * * and from sickness which is contracted and begins after this policy has been maintained in force for not less than thirty days, and causes loss commencing while this policy is in force. * * * ”

There is evidence that appellant told Mrs. Webber that the expense of the operation would be paid by the policy of insurance. This statement was false, both because the policy was not effective at the time the operation was performed and because the sickness was not covered by the policy since it was “contracted” and began before the effective date of the policy. The expense would not have been payable under the terms of the policy had the operation been delayed until the policy had been “maintained in force” more than thirty days. Appellant contends that no damage was proven.

Special Issue No. 7 reads: “What amount of money, if any, do you find from a preponderance of the evidence to be the damages, if any you have found, incurred by Mrs. Webber as a result of the representation by Mr. Evans?” No complaint is made as to the form of the Issue, but appellant complains that the evidence is insufficient to support the answer made by the jury. No evidence was produced before the jury on the Issue of damages except the cost of the operation, post operative treatment, and necessary hospitalization expenses.

This is not a suit for the damage incurred by reason of the purchase of a policy of insurance in reliance on false representations. The gist of appellee’s cause of action is that she was induced to have an operation performed on her by reason of a false representation that the cost of the operation would be paid by the insurance company. The testimony establishes that the operation was beneficial to her and that she probably would have had the operation performed had the false representation not been made. There is evidence, however, that the false representation caused her to have the operation sooner than she might otherwise have undergone it.

“If the statement is viewed as a general rule, it may be said that in an action for damages arising out of false representations, the recovery is limited to the actual loss sustained as a result of the representations, and not the profit that might have been made had the representations been true. That is to say, a recovery may ordinarily be had only for the damage sustained as a direct and proximate result of the fraud.” (26 Tex.Jur.2d, Fraud and Deceit, § 131, p. 108.)

See also Booth v. Coward, Tex.Com.App., 265 S.W. 1026; Prosser, Law of Torts, 2d ed., pp. 568-571.

Here appellee would not have been entitled, as damages, to the sum which would have been paid by the insurance company had the representation been true; rather she is entitled to recover any loss actually sustained by reason of the action she took because of the information given her by appellant. From a careful review of the evidence, we conclude that the only result of the misrepresentation of the coverage of the insurance policy was immediate surgery on appellee rather than surgery at a future date. The evidence is insufficient to establish the fact of legal damage, as distinguished from the amount of damage. In the absence of evidence from which the jury could conclude that appellee was damaged by the conduct of appellant, the trial court erred in submitting the issue on damages and in rendering a judgment based on the answer made to such issue. 17 Tex. Jur.2d, Damages, pp. 92-93; Wilson v. Jones, Tex.Com.App., 45 S.W.2d 572.

In view of our disposition of this question, we find it unnecessary to consider other assignments of error presented by appellant.

The judgment of the Trial Court is reversed and judgment is rendered that ap-pellee take nothing by her suit.


text:
    B. F. CUMMINGS, Appellant, v. Frank Y. VAN VALIN, Appellee.
    No. 4026.
    Court of Civil Appeals of Texas. Waco.
    Nov. 29, 1962.
    Rehearing Denied Dec. 20, 1962.

      Riley, Jones, Boyd & Lovelace, Douglas Boyd, Waco, for appellant.
    Haley, Koehne, Fulbright & Winniford, W. C. Haley, Waco, for appellee.
   McDONALD, Chief Justice.

This is an appeal from sc judgment in favor of plaintiff, upon a jury verdict, in a rear end- collision case. Plaintiff brought this suit- for personal injuries sustained as a result of defendant’s car being driven into the rear end of plaintiff’s car when plaintiff’s car was stopped behind a line of traffic stopped at an intersection red light stop sign. Trial was to a jury which, in answer to Special Issues, found:

1) Defendant'was following plaintiff too closely.
2) Such was negligence.
3) Such was' a proximate cause of plaintiff’s injuries and damages.
4) Defendant failed to stop his automobile in response to the red signal light.
5) Such failure was negligence.
6) Such was a proximate cause of plaintiff’s injuries and damages.
7) Defendant failed to keep a proper lookout.
8) Such was negligence.
9) Such was a proximate cause of plaintiff’s injuries and damages.
10) Defendant’s act of driving his automobile into the rear of plaintiff’s automobile was negligence.
11) Such was a proximate cause of plaintiff’s injuries and damages.
12) Sets plaintiff’s damages (for physical pain and mental anguish, future pain and mental anguish, loss . of earnings, and medical expenses) at $4000.
13)Defendant was not acting under a sudden emergency. (After issues acquit plaintiff of contributory negligence and find that the occurrence was not the result of an unavoidable accident).

The Trial Court entered judgment for plaintiff upon the verdict.

Defendant appeals, contending:
1) The Trial Court erred in submitting Issues 4, 5, 6, 10, and 11, since they constitute a comment on the weight of the evidence, and make the facts of the accident itself a ground of recovery.
2) The Trial-Court erred ½ permitting plaintiff to testify as to medical treatment received in California, and expenses for same; and in permitting Dr. Gassier (of Texas) to testify as to the reasonableness of the California medical expenses.
3) The Trial Court erred in permitting plaintiff to testify as to his earnings and the expenses of his business, when the books of the business would have been the best evidence.
4) The Trial Court erred in not granting a mistrial when plaintiff’s attorney asked defendant if it were not a fact that he received a traffic ticket as a result of the accident.
5) The Trial Court erred in refusing to submit defendant’s requested issues inquiring whether the condition of the street and weather constituted the “sole cause” of the accident.

We revert to defendant’s 1st contention. Defendant contends issues 4, 5, 6, 10 and 11 constitute comments upon the weight of the evidence, and make the facts of the accident itself grounds of recovery. Defendant ran into the rear of plaintiff’s automobile when it had stopped behind a line of traffic at an intersection stop signal. Defendant testified that there was nothing to prevent his seeing plaintiff’s car from the time he got behind him up to the time of the collision; and that he really has no explanation of exactly how the accident happened except that’ his judgment was bad on bringing his car to a stop. Under such circumstances we think the' very act which inflicts the injury may be negligence. See: Edwards v. Hawkins, Tex.Civ.App. (n.w.h.) 77 S.W.2d 1098; Sutherland v. Cotter, Tex.Civ.App. (n.w.h.) 226 S.W.2d 476.

We think the issues proper under the facts of this case, but in any event other issues, uncomplained of, are adequate to support the judgment.

Defendant’s 2nd contention complains of the Trial Court’s permitting plaintiff to testify as to medical treatment he received in California and expenses for same; and in permitting Dr. Gassier (of Texas) to testify as to the reasonableness of the California medical expenses. The foregoing presents no error. Plaintiff testified only to facts that- he knew to be true and which were facts within plaintiff’s own knowledge. Dr. Gassier testified that with his knowledge of plaintiff’s condition, if plaintiff was treated by Dr. McPherson, an orthopedic surgeon in San Diego, California, some 4 or 5 times; and went to Scripps Clinic for physical therapy treatments 6 or 7 times in San Diego, California, that a charge of $52.00 would be a reasonable charge. See: 23 Tex.Jur.2d p. 630.

Defendant’s 3rd contention is that the Trial Court erred in permitting plaintiff to testify as to the earnings and expenses of his business, when the books of the business would have been the best evidence. Plaintiff testified that the business was his and that he handled it entirely and that he knew its earnings and expenses and what such were. No error is presented.

Defendant’s 4th contention complains of the refusal of the Trial Court in not granting a mistrial when plaintiff’s attorney asked defendant if he received a traffic ticket as a result of the accident. Plaintiff’s attorney asked the complained of question. Defendant’s attorney objected and moved for a mistrial. The Trial Court overruled the motion for mistrial but instructed the jury not to consider the question. The defendant never answered the question. We think the error, if any, was cured by the instruction of the Trial Court. See: Condra Funeral Home v. Rollin, 158 Tex. 478, 314 S.W.2d 277. The complained of matter in any event, under the record as a whole, could not and did not cause the rendition of an improper judgment in the case. Rule 434, Texas Rules of Civil Procedure.

Defendant’s 5th contention is that the Trial Court erred in not submitting requested issues inquiring whether the condition of the street and weather constituted the “sole cause” of the accident. Defendant collided into the rear end of plaintiff’s car while plaintiff was stopped behind a line of traffic at an intersection stop signal light. The jury found that defendant was guilty of several acts of negligence proximately causing the collision, including the failure of defendant to keep a proper lookout. As noted, defendant testified he saw plaintiff stopping in front of him in a normal stop for a red light, and that he started to stop but used bad judgment in stopping in the space available; and that there was nothing to prevent his seeing plaintiff’s car continuously from the time he got behind it, up to the time of th( collision. Under the record, the issue wan not raised.

All of defendant’s points and the contentions thereunder made are overruled The judgment is affirmed.


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    Harvey E. COBB, Appellant, v. Frank HALTON et al., Appellees.
    No. 4057.
    Court of Civil Appeals of Texas. Waco.
    Dec. 6, 1962.
    Rehearing Denied Jan. 10, 1963.
    Kelley, Looney, McLean & Littleton, Edinburg, for appellant.
    Wagner & Graham, Brownsville, for ap-pellees.
   McDONALD, Chief Justice.

This is an appeal from a judgment that plaintiff take nothing in a personal injury suit.

Plaintiff Cobb and defendant Halton were both truck drivers. Halton drove a truck labeled Reynolds Refrigerated Truck Service, under an arrangement with defendant Reynolds Refrigerated Truck Service, Inc. Cobb and Halton had both hauled loads to Massachusetts, and were returning to Texas, when on the evening of 21 February 1958, they both stopped in the State of New York at the “State Line Cafe.” They parked their trucks in the parking area, ate their supper, and at about 9:00 p. m. on leaving the cafe discovered that both trucks had mired into the ice and snow on the parking lot, and would not move. They undertook to free the trucks by stretching chains in front of the driver wheels, so that the trucks might develop sufficient traction to pull out of the ice. In pursuit of their efforts, Cobb stretched a chain in front of the left driver wheel of Halton’s truck, and then went around to the right driver wheel. While Cobb was stretching a chain in front of this wheel, Halton got into the cab of the truck and released the clutch on the truck (which was running), causing the wheels to spin, and the wheel and chain struck Cobb, inflicting serious injuries on him by jerking and breaking his right arm and shoulder.

Cobb sued Halton and Reynolds Truck Service for damages for such injuries. Defendant Reynolds answered that Halton was not its agent or employee, but an independent contractor; that plaintiff was guilty of contributory negligence; and assumed the risk of injury voluntarily by his own conduct.

Default judgment was taken against Hal-ton, and trial to a jury was had as to Reynolds Truck Service.

The jury found:

1, 2 & 3) That Halton was the agent of Reynolds; acting within the scope of his agency at the time and place of plaintiff’s injuries; and that Halton and Reynolds were engaged in a joint venture.
4 through 12) That Halton failed to keep a proper lookout; failed to warn plaintiff of his intention to spin the wheels prior to setting the wheels in motion; that such constituted negligence and a proximate cause of plaintiff’s injuries.
22) Immediately prior to the time plaintiff placed the chain in front of the right driver wheel there was danger surrounding the operation.
23) This danger was open and obvious to the ordinary prudent man.
24) Plaintiff’s voluntary exposure to this open and obvious danger was a proximate cause of his injuries.
26) Halton was an independent contractor as to Reynolds Truck Service, in operating the truck on 21 February 1958.
27 & 28) The failure of plaintiff to make arrangements with Halton not to start the driver wheels until notified that the chain under the right driver wheel was in position was negligence, and a proximate cause of plaintiff’s injuries.
32) Plaintiff’s damages were fixed at $22,614.84.

The Trial Court entered judgment on the verdict that plaintiff take nothing as to defendant Reynolds Refrigerated Truck Service.

Plaintiff appeals, contending the Trial Court erred in entering judgment that he take nothing, through its giving effect, if it did:

1) To the finding that Halton was an independent contractor, since Reynolds was liable under the facts as a matter of law.
2) To the findings of plaintiff’s voluntary exposure to risk (Issues 22, 23, 24), such defense being unavailable because: a) it was not plead; b) the basic issue was inadequately submitted; and c) no issue pertaining to the essential element of negligence was submitted.
3)To the defense of contributory negligence (Issues 27 and 28), because such erroneously imposed on plaintiff the duty to foresee or anticipate Halton’s negligence.

We revert to plaintiff’s 3rd contention that the Trial Court erred in giving, effect to Issues 27 and 28 which found that plaintiff was guilty of negligence in not making arrangements with Halton not to start the driver wheel until he was notified that the chain under such wheel was in place, and that such was a proximate cause of plaintiff’s injury. Plaintiff contends that this issue erroneously imposed¡ upon him the duty to foresee or anticipate Halton’s negligence. As noted, Halton was convicted of primary negligence proximately causing plaintiff’s injuries.

The accident happened at night; the temperature was about zero; ice and snow covered the lot where the 2 trucks were parked. The trucks were mired into the ice, but had the engines running, and there was quite a bit of background noise in the area. Plaintiff testified that he placed the chain under the left driver wheel of Hal-ton’s truck; that Halton was not in the cab of the truck at that time; that when he went around to place the chain-’ under the right driver wheel he had no idea Halton was going to get into the cab. That Halton did get into the cab without his knowledge, and released the clutch, starting the driver wheels in motion.

Halton testified that Cobb was to poke the chains under the tire as it turned; that he was causing the driver wheels to turn; that Cobb never requested him to stop the wheel from turning; and that the first he knew of the accident was when he got out of the cab and went around to the side of the truck arid found Cobb holding his shoulder and in'pain.

Cobb knew that the motor of the truck was running; he knew that at some point the wheels were to be set in motion in order to attempt to move the truck. We think the jury justified from all the facts in finding plaintiff guilty of negligence in failing to make arrangements with Halton not to start the wheels until notified that the chain was in position.

Plaintiff’s 3rd contention is overruled. Plaintiff’s 1st and 2nd contentions pass out of the case.

The judgment of the Trial Court is affirmed.


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    Dr. C. W. BUTLER, Jr., et al., Appellants, v. DAVY CROCKETT FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellee.
    No. 14002.
    Court of Civil Appeals of Texas. Houston.
    Nov. 1, 1962.
    On Rehearing Dec. 6, 1962.
    Ted Musick, Houston, for appellants.
    Adams & Granberry, F. P. Granberry, W. D. Julian, Jr., Crockett, for appellee.
   COLEMAN, Justice.

Dr. C. W. Butler, Jr., a person of unsound mind, and Allie Maude Butler, individually and in her capacity as guardian of the person and estate of Dr. C. W. Butler, Jr., have appealed from a summary judgment, by the terms of which the Davy Crockett Federal Savings and Loan Association was granted judgment for the balance due on a note and the foreclosure of a deed of trust lien.

The motion for summary judgment was unsworn. An affidavit was attached to the motion by which the President and Secretary of the Association swore that the facts stated in the original petition were true and that no payments were made on the note since the petition was filed. Copies of the note and deed of trust were attached to the motion, but there is no evidence that these copies are correct copies of the originals.

The original petition alleged the execution of the note and the deed of trust by the defendants; that the note was in default; and the exact balance due on the note. It alleged that the deed of trust conveyed certain described real estate to a named trustee for the benefit of the plaintiff. It also alleged that a claim had been filed against the estate of Dr. Butler for more than thirty days and the guardian had failed to approve it.

Appellants filed a controverting affidavit by which Allie Maude Butler denied that she signed the deed of trust relied on by plaintiff, and further swore that “these premises is her homestead and has been her homestead since before the inception of the deed of trust instrument and her homestead has never changed.” Her affidavit further stated that “proper claims have not been made against his estate in order to foreclose under a deed of trust in this suit. * * * »

Defendants further filed a sworn answer in which Mrs. Butler stated that she owned a one-half community interest in the property on which plaintiff seeks to foreclose; that she has lived on the property since its purchase and lived on it at the time the answer was prepared. She stated that she always claimed the property as homestead and that it was her homestead, and had never been abandoned as such. She also stated in the answer that she had not signed the deed of trust on which plaintiff sued.

It is obvious that fact issues are raised by the pleadings, and the Association has not shown by evidence that the issues so raised cannot be supported in fact. Where justiciable issues of fact are raised by the pleadings, a summary judgment cán-not be granted. Butler v. Summers, 151 Tex. 618, 253 S.W.2d 418.

However, if the Association .ban show as a matter of law that 'the 'defendants have no defense to the cause of action asserted against them, the summary judgment should be granted since, in Such case, the disputed fact issues would be immaterial. Seale v. Muse, Tex.Civ.App., 352 S.W.2d 534, ref., n. r. e.; Gunnels v. Atcheson, 288 S.W.2d 878, Tex.Civ.App.

The Association contends' that all disputed fact issues raised by the.pleadings and affidavits were determined adversely to defendants in Cause No. 8547, Allie Maude Butler et al. v. J. G. Beasley, Jr., Trustee, et al., by judgment rendered January 11, 1960, in the District .Court of Houston County, Texas, 3rd Judicial District. A copy of this judgment was attached to the motion for summary judgment, but it was not a sworn or certified copy. The judgment was entered by the court in which the summary judgment proceeding was pending, and the Association contends that the trial court could take judicial notice of its own records in a cause involving the same subject matter between the same, or practically the same, parties.

The Supreme Court of Texas has held in Gardner v. Martin, 345 S.W.2d 274, a case which cannot be distinguished..on.this point, that:

“Subsection (e) of Rule 165-A speaking of forms of affidavits says, ‘ * * sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith * * *.’ Defendants’ motion for summary judgment Teferred to Cause No. 58-68, and states ■* * * * which matters are all of record in said court, to which record reference is hereby made.’ Plaintiff further says that defendants’ motion was not sworn to, nor was it accompanied by an affidavit. Rule 166-A (a) and (b) specifically provide that in proper cases motions for summary judgments may be made ‘with or without supporting affidavits.’ Since our decision in Willoughby v. Jones, 151 Tex. 435, 251 S.W.2d 508, it has been settled that a summary judgment is not necessarily out of order where the corresponding motion is unverified and unsupported by affidavits, citing Rule 166-A, Texas Rules of Civil Procedure and 4 McDonald, Texas Civil Practice, pp. 1386 et seq., § 17.26. We hold, however, that a compliance with Rule 166-8(e) required that the certified copies of the documents referred to should be attached to the motion. There were no papers, records, or other documents from said Cause No. 58-68 attached to the motion by either sworn or certified copies. Since the matters referred to were court records, certified copies should have been attached to the motion ; therefore, defendants had not complied with the provisions of Rule 166-A and were not entitled to a summary judgment.”

The judgment of the Trial Court is reversed and the cause remanded for trial.

On Motion for Rehearing

Where issues of fact are raised by unsworn pleading, in the absence of affidavits or sworn testimony, and where issues of fact are raised by sworn pleadings, a summary judgment may not be granted. In this case issues of fact were developed by respondent’s sworn pleading and her affidavit contesting the motion for summary judgment.

We have ordered this cause reversed and remanded for trial. In order to remove uncertainty as to the effect of the order, the motion for rehearing is granted in part and the case is reversed and remanded to the trial court.


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    E. J. BURKE, Sr., Appellant, v. MERRILL LYNCH, PIERCE, FENNER AND SMITH, INCORPORATED, Appellee.
    No. 4050.
    Court of Civil Appeals of Texas. Waco.
    Nov. 29, 1962.
    See also 346 S.W.2d 663.

      James E. Barlow, San Antonio, for appellant.
    Lang, Byrd, Cross, Ladon & Oppenheimer, San Antonio, for appellee.
   McDONALD, Chief Justice.

This is a broker’s action against a customer. Plaintiff brokerage firm,. Merrill Lynch, Pierce, Fenner & Smith, alleged that defendant Burke, on 30 October 1959, ordered them to sell 2000 shares of Cinerama stock at 454 Per share; that they executed such order on 1 December 1959, and credited defendant’s account for $8,251.43; that plaintiff called on defendant to deliver the stock for transfer to the purchaser, and defendant failed to make delivery; that on 12 January 1960 plaintiff purchased such stock on the open market for defendant’s account for 5¾ and 5⅝ per share, or a total of $11,-426.82.

Plaintiff called on defendant to make good its loss of $3175.39 and defendant refusing, plaintiff filed the instant case for such amount, plus attorneys’ fees.

Trial was to a jury which found:

1) Defendant Burke authorized plaintiff brokerage firm to enter an open order for sale of 2000 shares of Cinerama stock for him, at 4¼ per share.
2) Plaintiff sold such stock at such price for defendant.
3) Defendant failed to deliver to plaintiff the stock certificates to cover the sale.
4) Plaintiff purchased 600 shares of Cinerama stock on the open market at
51/2, and 1400 shares at 5⅝ to make delivery on the prior sale.
S) Reasonable attorneys’ fees for plaintiff’s attorney are $1000.

The Trial Court entered judgment on the verdict for $3159.39, plus $1000 for attorneys’ fees.

Defendant appeals, contending:

1) The Trial Court erred in not submitting requested defensive issues that there was a specific agreement between the parties that a sale could only be made on the day the order was given.
2) There was no evidence that the stock was originally sold by plaintiff.
3) There was no subrogation agreement from the purchaser to plaintiff, and defendant would have no liability to plaintiff.
4) The Trial Court erred in allowing attorneys’ fees.
5) The Trial Court erred in not submitting requested issues concerning customs and practices of the exchanges in notification of the customers when stock is sold, and whether such loss was caused by negligence of plaintiff.

Defendant’s 1st and 5th contentions relate to the refusal of the Trial Court to submit requested issues to the jury inquiring whether there was an agreement between the parties that a sale could only be made on the day the order was given; and concerning certain customs and practices of ⅛⅜ stock exchanges in notification to customers when stock is sold.

The requested issues relate to affirmative defenses which defendant did not plead. The Trial Court properly refused to submit requested issues concerning defenses not plead by the defendant. Matthews v. General Accident Fire & Life Assur. Corp., 161 Tex. 622, 343 S.W.2d 251; Jenkins v. Hennigan, Tex.Civ.App., (n.r.e.), 298 S.W.2d 905; Texas Rules of Civil Procedure, rules 67, 277, 297.

Defendant’s 2nd contention is that there was no evidence that the stock was originally sold by plaintiff. The evidence is undisputed that plaintiff sold the 2000 shares of Cinerama stock on 1 December 1959 at 4¾4 per share. The witness Glasser and the witness Crane both so testified. The documentary exhibits further show that plaintiff s'old such stock at the price testified and on the day in question. Such documentary exhibits were records and business memoranda kept by plaintiff in the regular course of business and are admissible under Art. 3737e, Vernon’s Ann.Civ.St.

Defendant’s 3rd contention is that there was no subrogation agreement from the purchaser of the stock to plaintiff, and that defendant would have no liability to plaintiff. Defendant further contends that defendant’s liability, if at all, would be to the purchaser, and that the most plaintiff could be entitled to would be for loss of his commission. We reject the foregoing. A broker or agent is entitled to recover not only commissions, but all losses sustained in carrying out his principal’s contract. Bibb v. Allen, 149 U.S. 481, 13 S.Ct. 950, 37 L.Ed. 819; Kahn v. Harris, Upham & Co., Tex.Civ.App., 247 S.W.2d 139, aff’d 151 Tex. 655, 253 S.W.2d 647; Guay v. Schneider, Bernet & Hickman, Inc., Tex.Civ.App. (n.r.e.), 341 S.W.2d 461. In the Guay case, supra, this court holds in a parallel situation:

“If the principal repudiated the short sale, or failed to meet margin requirements, the broker could buy at the market price — even though higher — to cover the account.”

Defendant’s 4th contention is that the Trial Court erred in allowing attorneys’ fees. The Trial Court allowed $1000 attorneys’ fees to plaintiff’s attorneys, such being found to be reasonable by the jury. If attorneys’ fees are allowable, they must be such under. Article 2226, R.C.S., as “personal services rendered.”

Is plaintiff’s claim one for “personal services rendered”?

Statutes authorizing a recovery of attorneys’ fees are penal in character and are to be strictly construed. When strictly construed the words “personal services” are not as broad and all encompassing as the word “services”. The term “personal services” indicates that the act done for the benefit of another is done personally by a particular individual. The “services” rendered by plaintiff were the purchase and/or sale of stock (for which it received a commission). It is our view that the services here rendered were not personal services, under the holding of our Supreme Court in Van Zandt v. Fort Worth Press, Tex., 359 S.W.2d 893. We sustain the point.

The judgment of the Trial Court is reformed to exclude therefrom the $1000 attorneys’ fees, and as reformed is affirmed. Costs on appeal are taxed one-fourth to plaintiff and three-fourths to defendant.

Reformed and affirmed.


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    KENDRA, INC., Appellant, v. WACO HOTEL SUPPLY COMPANY, Inc., Appellee.

    No. 4066.
    Court of Civil Appeals of Texas. Waco.
    Nov. 29, 1962.
    Rehearing Denied Dec. 20, 1962.
    Ñaman, Howell, Smith & Chase, George Chase, Waco, for appellant.
    Sleeper, Boynton, Burleson, Williams & Johnston, B. R. Sleeper, Waco, for appellee.
   WILSON, Justice.

Appellant Kendra alleged appellee defrauded it by issuing fictitious invoices, representing merchandise it did not purchase, in order that Kendra’s manager and vice-president, Williamson, could obtain checks from Kendra’s bookkeeper to pay for merchandise appellee had sold to Williamson and delivered to his home. In a non-jury trial a take-nothing judgment was rendered.

Kendra’s points, in the main, challenge the judgment and the court’s findings of fact as having no evidence to support them, or as being against the great weight and preponderance of the evidence.

The findings attacked are that Williamson was the alter ego of Kendra; that the merchandise in question was sold to, and Williamson had authority to purchase it for Kendra; that appellee received no money in excess of that owed by Kendra for merchandise sold to it; that there was “no proximate cause between” appellee’s conduct and damage to Kendra; that at the time the fictitious invoices were prepared Kendra owed appellee the amount represented by the invoices and hence, Kendra suffered no damage thereby; that no corporate official of appellee participated in preparation of the invoices; that payment of the invoices 'was: made by Kendra at the sole direction of Williámson, who was duly authorized to make payment and issue checks; that Kendra’s loss was suffered as a result of placing Williamson in the position of manager and vice-president and that there was no prearranged plan between Williamson and any corporate official of ap-pellee concerning' the matters in dispute. The court concluded Kendra was bound by Williamson!s-conduct; which occasioned its loss.

Appellant concedes with candor that there is no direct evidence that appellee connived with Williamson to defraud appellant, but urges the circumstances establish this as the only reasonable "inference which can be drawn.

Williamson was general manager and vice-president of Kendra, Inc., a manufacturer. ’Its president, who resided in Florida and was abroad during the time in question, vested Williamson with express “authority to purchase merchandise for” the corporation ; and told appellee’s salesman Williamson was the general manager of the business, “in full charge.” No limitation was placed on his authority. For several years Kendra had purchased,’ by Williamson’s order, small equipment items from appellee, which was engaged in selling hotel and restaurant supplies. It sold no residential equipment.

Shortly after Williamson became general manager he called appellee’s salesman to the factory and told him that the number of Kendra’s employees had increased to the point he desired to replace a portable catering service with a snack bar, counter, range, waffle iron, toaster and ice box. The salesman made a lay-out of the planned facility, and Williamson gave him an order on Kendra’s account, for a. two-unit commercial waffle iron and heavy-duty, 24-hour, 10-speed mixer, a commercial type toaster and grill, directing that these be delivered to his residence for storage until the. fixtures were built in the factory. Kendra then had more than 100 employees. The salesman testified that when he complied .with Williamson’s request to make.a-.layout for the snack bar, and discussed its arrangement, he “got an order for the range right then.” Williamson stated he would also store this heavy-duty commercial stove in his residence' garage until he completed the counter and fixtures in the factory, and that he would notify appellee’s salesman when he was ready for installation. Williamson directed that the range be charged to his personal account.

No payment having been received by ap-pellee after invoices and statements covering this merchandise were mailed, the salesman called on Williamson for payment. The latter stated he had lost some invoices and was unable to reconcilé the account. He instructed the salesman to have invoices prepared and delivered as he instructed; he would “get it straightened up.” Williamson listed other merchandise to be shown on the new invoices as having been sold to Kendra, and showing total charges equal to the balance then due for the equipment actually sold and delivered. The salesman took Williamson’s list to appellee’s bookkeeper, from whom he obtained new invoices showing Kendra purchases as directed by Williamson. No entry of such charges was made on appellee’s books. Williamson approved these and obtained Kendra’s checks from its bookkeeper in payment. Williamson’s conduct was detected, he was discharged, “skipped out” and was arrested in Kentucky.

The salesman and appellee’s secretary testified .Williamson “was the Kendra Company as far as we were concerned.” Kendra’s president testified he did not know the purpose for which Williamson ordered the equipment which appellee delivered; and the record does not negative a reasonable inference that it was actually ordered for Kendra’s use. There is no record showing that Williamson actually converted the equipment to his personal use, whether or not it was installed or used in his residence, or as to whether Kendra finally obtained possession. The president testified he had seen the items at Williamson’s home and they were not “received at Kendra.”

While a portion of the record is susceptible of construction to the effect that appellee’s secretary participated in preparation of the invoices, in that she answered questions inquiring whether “you” prepared fictitious invoices in connection with what appellee did, there is positive testimony that the invoices were prepared by appellee’s bookkeeper without the secretary’s knowledge or participation.

Appellant insists that if the evidence does not show appellee knowingly and actively participated in fraud, it was charged with notice of Williamson’s lack of authority because of the unusual circumstance “that the merchandise was to be delivered to Williamson’s home, rather than appellant’s place of business, as had always been done before”, and that the range was charged to Williamson’s personal account. A portion of the charge for the range had been paid by Kendra’s check, issuance of which had been obtained by Williamson before the fictitious invoices were delivered.

We are unable to say there was no evidence supporting the material findings which support the judgment, or that they are contrary to the overwhelming preponderance of the evidence. All of appellant’s points are overruled. Affirmed.


author: RICHARDS, Justice.

text:
    INTERNATIONAL HARVESTER CREDIT CORPORATION et al., Appellants, v. Miller RHOADES, Appellee.
    No. 11058.
    Court of Civil Appeals of Texas. Austin.
    Dec. 12, 1962.
    Rehearing Denied Jan. 9, 1963.

      Bryan, Suhr & Bering, James P. Bailey, Houston, Dan Moody, Jr., Austin, for appellants.
    David L. Tisinger, Austin, for appellee.
   RICHARDS, Justice.

Miller Rhoades brought two suits in the 126th District Court of Travis County. In the first suit International Harvester Company and Ed Kyrish were defendants and in- the second International Harvester Credit Corporation and Ed Kyrish were defendants. In each of the suits Rhoades sought to cancel and rescind certain contracts covering the sale of ten trucks purchased from International Harvester Company and for the cancellation of purchase money notes secured by chattel mortgages given in part payment of the purchase price of the trucks which notes were held by International Harvester Credit Corporation, and ,for damages from all defendants for loss of his investment, together with foreclosure of an alleged equitable lien on the trucks in question to secure his damages and investment. He also prayed for the appointment of a receiver to sell the trucks, which relief has been abandoned, and for injunctive relief. An ex parte restraining order was issued in each suit restraining the defendants from taking possession of the trucks and in the second suit International Harvester Credit Corporation was restrained from transferring certain promissory notes and chattel mortgages executed and delivered by Rhoades in connection with the purchase and sale of the trucks which had been acquired by International Harvester Credit Corporation. For brevity, International Harvester Corporation will be referred to as “Harvester Company” and International Harvester Credit Corporation will be referred to as “Credit Corporation.”

In the second suit, Credit Corporation answered defensively and filed a cross-action against Rhoades for debt, foreclosure of certain chattel mortgage liens given to secure the payment of the promissory notes executed by Rhoades in part payment for the trucks and as cross-plaintiff, made application for and obtained a writ of sequestration of the trucks covered by the chattel mortgages. Sequestration bond of $172,-000.00 was filed and the writ was issued and delivered to the Sheriff of Travis County, Texas.

Rhoades, under a second application for temporary injunction in the second suit, obtained two ex parte restraining orders, one of which restrained Credit Corporation, as cross-plaintiff, from “issuing, or serving or causing to be served any writ of sequestration, attachment or other legal process * * * ” The second order restrained the Sheriff of Travis County, Texas, from executing the writ of sequestration which had been issued and delivered to him and the Sheriff was made a party, defendant. Harvester Company, Credit Corporation and Kyrish then filed motions to dissolve all restraining orders.theretofore entered and Credit Corporation filed its reply to Rhoades’ second application for temporary injunction.

The Trial Court consolidated the two suits and having heard the second application for a temporary injunction and motions to dissolve, overruled the motions to dissolve and granted the temporary injunction, by the terms of which Harvester Company, Credit Corporation and Kyrish were enjoined and restrained “from pursuing any effort to sequestrate, or sell through sequestration, the ten International trucks and related equipment described in the pleadings of the plaintiff and defendants, and the defendants are further restrained and enjoined from indirectly taking any other action calculated to move, or cause to be moved, the said trucks and equipment from their present location, it being the intention of this order that the status quo shall be preserved and maintained” upon the filing of an injunction bond in the sum of $5,000.00. All defendants have appealed from the order granting the temporary injunction.

This appeal is predicated upon three points of error: (1) that since Rhoades had a complete, clear and adequate remedy at law, the Trial Court erred in granting his application for temporary injunction; (2) that Rhoades having failed to allege and prove a threatened irreparable injury for which he had no adequate remedy at law, the Trial Court erred in granting the temporary injunction, and (3) that Rhoades having failed to prove any right to the possession of the trucks in question, the temporary injunction should not have been granted.

After the filing of the cross-action by Credit Corporation under the provisions of Art. 6840, Vernon’s Civil Statutes, it filed the necessary affidavit and bond in the sum of $172,000.00 and a writ of sequestration was issued by the District Clerk and delivered to T. O. Lang, Sheriff of Travis County, Texas, for levy. However, prior to any action by the Sheriff, the Trial Court, at Rhoades’ request, issued 'the temporary injunction restraining Harvester Company, Credit Corporation, Kyrish and the Sheriff from proceeding under the writ of sequestration. At the hearing on the temporary injunction Rhoades testified that he had never made any attempt to make a replevy bond because he could not afford it since the annual premium was $3,400.00. He also stated that he had a net worth of $206,000.00 and guessed that he could respond to a judgment if one were entered against him.

The general rule is that an injunction will not be granted where the party seeking it has a plain and adequate legal remedy.. Hill v. Brown, Tex.Com.App., 237 S.W. 252, 253. Here Rhoades had two alternative legal remedies which were available to him: (1) to make a replevy bond, or (2) in the event the sequestration was wrongful, to recover his damages under the sequestration bond. In addition, no evidence was offered to show that either Harvester Company or Credit Corporation was insolvent and unable to respond in damages and hence he failed to negative the existence of an adequate legal remedy. Lewis v. Clark, Tex.Civ.App., 129 S.W.2d 421, 423, error dism., Bagley v. Higginbotham, Tex.Civ.App., 353 S.W.2d 868, N.W.H.

Although.Rhoades had a net worth of $206,000.00, he contends that he . was financially unable to make the replevy bond because the premium would cost him $3,-400.00 per year. As stated in Harris v. Siegel, Tex.Civ.App., 68 S.W.2d 330, 331:

“Appellant did not exercise his legal right to replevy by giving the necessary bond, but resorted to a court of equity to enjoin the execution of the writ of sequestration, on the grounds that he was financially unable to make the bond, and alleged that the value of the property is arbitrarily stated in the affidavit by appellee to such an excessive amount as to render appellant unable to comply with the requirements of the statutes.
“We are of opinion that such inability does not vary the rule. Where a party has a full, complete, and adequate remedy at law, it is his duty to avail himself of, such remedy, as it gives him all of the protection that can be given by writ of injunction. The bond' for the writ is a provision and conditional obligation to pay all damages, should it be decided that such sequestration was wrongfully issued. The defendant may avail himself of the adequate remedy for the recovery of damages by referring to the bond.”

Rhoades also testified that unless the. injunction was issued he would suffer irreparable injury, but the only injury of which he complains was that if the trucks were taken under the writ of sequestration, the defendants would injure the property. He also stated , that he had not used the trucks and did not really care what happened to them. But assuming his surmise to be correct, then Rhoades still had another adequate legal remedy by obtaining his own writ of sequestration. Burdette v. Bell, Tex.Civ.App., 218 S.W.2d 904, 906, N.W.H.

Rhoades pleaded that he was entitled to foreclosure of an equitable lien against the ten trucks and testified that unless the defendants were restrained he was afraid his security would be injured, but in such case he had an adequate legal remedy by writ of sequestration. Burdette v. Bell, supra; Lewis v. Clark, supra.

Irreparable injury has been defined as “an injury of such a nature that the injured party cannot be adequately compensated therefor in damages, or that damages which may result therefrom cannot be measured by a definite, certain or usable pecuniary standard.” Gulf Oil Corp. v. Walton, Tex.Civ.App., 317 S.W.2d 260, 263. In our opinion, Rhoades has failed to prove an irreparable injury for which he has no adequate remedy at law. If the trucks are injured while in the possession of the, Sheriff under the writ of sequestration, Rhoades has an adequate legal remedy for damages upon the sequestration bond. In addition Rhoades did not plead or prove that Harvester Company, Credit Corporation or Kyrish are insolvent or cannot respond in damages. On the contrary, the evidence is that both Harvester Company and Credit Corporation are eminently solvent and able to respond in damages. Lewis v. Clark, supra. All of appellants’ points of error are sustained.

The granting of a temporary injunction, where an adequate remedy at law is available, constitutes an erroneous abuse of the discretionary powers vested in the Trial Court. Burdette v. Bell, supra; Bagley v. Higginbotham, supra. The judgment of the Trial Court is reversed and rendered and the temporary injunction is dissolved. Costs of appeal are assessed against appellee.

Reversed and rendered.


author: SMITH, Justice.

text:
    Cleveland A. SKATES, Petitioner, v. CITY OF PARIS et al., Respondents
    No. A-9237.
    Supreme Court of Texas.
    Jan. 9, 1963.
    M. D. Emerson, Paris, Tex., for petitioner.
    Ben F. Mooring, .City Atty., Paris, Tex., for respondents.
   SMITH, Justice.

This is a case wherein the Chief of Police of the City of Paris, in the exercise of the power vested in him by Article 1269m, Section 16, Vernon’s Annotated Civil ■ Statutes of Texas, and in accordance with the pertinent provisions thereof, suspended indefinitely, Lieutenant Cleveland A. Skates, the Petitioner here, a member of the Paris Police Department. Such action was based upon charges of “Acts of Incompetency”— “Neglect of Duty” in violation of the provisions of Section 5 of the Firemen’s and Policemen’s Civil Service Law. Within the time required by said Article of.the Statute, Skates perfected his appeal to the Civil Service Commission of the City of Paris. On September 19, 1960, a public hearing was held, and on November 8, 1960, the Commission entered its order sustaining the action of the Chief of Police. Skates perfected an appeal to the District Court of Lamar County, Texas, and subsequently filed a motion for summary judgment, which was granted. The Civil Service Commission also filed a motion for summary judgment, which was overruled.

Skates motion for summary judgment was sustained by the District Court on the ground urged by Skates that the order o'f dismissal did not, as required by Article 4269m,'Section 16, supra, show that it was based'upon-any finding by the Commission of the truth of the specific charges against Skates.- The judgment entered on September 18, 1961, recites that no genuine issue as to any material fact existed, and that the Commission’s motion for summary judgment was without merit. The judgment further recites:

“that the order of the Firemen’s and Policemen’s Civil Service Commission of the City of Paris, Texas, * * * permanently dismissing the plaintiff from the Police Department of the .City of Paris, Texas, is not entered and based upon a finding by the Commission of the truth of any of the specific charges against such employee, Cleveland A. Skates, and is wholly .invalid ' * *

.. This judgment has been reversed by the Court of Civil Appeals and that Court has rendered judgment that the order entered by the Commission met all the requirements of Article 1269m, .Section 16, supra, and sustained the action of the Civil Service Commission in permanently dismissing Skates from the police service. 359 S.W.2d 669.

We reverse the judgment of the Court of Civil Appeals and affirm that of the trial court. Since the sole question presented in this court is whether the order is void for the.failure of the Commission to. make a finding of the truth of the specific charges against Skates, it is unnecessary to detail the facts in this opinion. The Court of .Civil Appeals,, in relying upon the case of City of Houston v. Melton, Tex., 354 S.W.2d 387 to support its holding that the order was valid, apparently misconstrued the holding of this court in that case.

In that case, this court was passing directly upon the same provision of the statute, as here, and the question was whether or not the order entered by the Commission was valid. We held that

“[t]he requirement [of the statute] is that the Commission must make a finding of the truth of the specific charges against such employee, and a careful analysis points up the fact that the order is based upon such findings. The order permanently dismissed Melton from the police force of the City of Houston as is required by the provision of Article 1269m, § 16.”

The majority and dissenting opinions in the Melton case are in agreement on the proposition that no employee of the police department shall be suspended or dismissed by the Commission except upon a finding by the Commission of the truth of the specific charges against such employee. The holding by this court in the Melton case that the order contained all requisite and necessary findings as required by the statute affords no support for the holding of the Court of Civil Appeals in the present case that “the findings of the Commission are sufficient.” This, for the reason that even a casual examination of the order entered in this case re-weals that it contains no findings whatever. The Melton case is sufficient authority to support our holding that the order under consideration is void and nothing appears in the record that remotely meets the requirements of the statute.

The provision of Article 1269m, Section 16, that no employee shall be suspended or dismissed by the Commission except upon a finding by the Commission of the truth of the specific charges against the such employee was placed in the statute, no doubt, to insure that no suspension or dismissal would be upheld by the Courts on a ground not found against such employee by the Commission. We cannot sustain the contention that the subsequently filed affidavit that the Commission found the truth of all the charges except No. 1, contained in the order of suspension is sufficient to cure its defects. To hold that the statute permits the filing of findings at a later date would defeat the purpose of the statute, and would be contrary to our holding in the Melton case.

The judgment of the Court of Civil Appeals is reversed and that of the trial court is affirmed.

      . “The hearing of Lieutenant C. A. Skates was held in the City Council Room in the City of Paris on the 19th day of September, 1960, at a Public Hearing upon charges with the Civil Service Commission by Dan A. Bills alleging certain violations of the Civil Service Rules and containing an indefinite suspension of Lieutenant C. A. Skates. The defendant was present in open court with his counsel, B.-Ray Smith, and entered a plea of not guilty to the specifications contained in the order of suspension. There were present at and conducting the hearing B. B. Richey and Morris Kimbell. The Commission 'sustained 'and hereby sustains the indefinite suspension of the classified employee, and it is the order of the Commission that the said employee shall be permanently dismissed from the Police Department of the City of Paris, Texas.”

      . “ * * ⅜ No employee shall be suspended or dismissed by the Commission except' for violation of the Civil Service rules, and except upon a finding by the Commission of the truth of the specific charges against such employee. * * * ”


author: GREENHILL, Justice.

text:
    HARDWARE MUTUAL CASUALTY CO., Petitioner, v. Claudine COURTNEY et vir, Respondents.
    No. A-8843.
    Supreme Court of Texas.
    Jan. 9, 1963.

      Taylor & Tyler, Austin, for petitioner.
    Byrd & Davis, Austin, for respondents

      . Texas Employers Insurance Ass’n v. Kubiak (Tex.Civ.App.1955), 276 S.W.2d 909, writ ref., N.R.E.; American General Insurance Co. v. Quinn (Tex.Civ.App.1955), 277 S.W.2d 223, writ ref., N.R.E.; National Surety Corp. v. Bellah (5th Cir., 1957), 245 F.2d 936.

   GREENHILL, Justice.

' This is a workmen’s -compensation case. The Question is whether the triál court acted correctly in instructing’counsel for the insurer not to mention' to the jury that the injured employee ever refused to súbmit to a myelogram' or surgery or- that an operation iqight 'cure or benefit her condition. The answer to this question depends upon whether the insurer properly demanded or tendered an operation and whether it admitted liability in such a way as to make the proffered testimony admissible.

After a trial by jury, the employee recovered a judgment for total and permanent disability. The action of the trial court was affirmed by the Austin Court of Civil Appeals, one justice dissenting. 353 S.W.2d 299.

The general problem presented here has been before this Court in three recent cases: Truck Insurance Exchange v. Seelbach, 161 Tex. 250, 339 S.W.2d 521 (1960); Texas Employers’ Insurance Association v. Shelton, 161 Tex. 259, 339 S.W.2d 519 (1960); and Cook v. City of Austin, 161 Tex. 294, 340 S.W.2d 482 (1960). In Shelton, the insurer tendered an operation and requested the Board to order a medical examination if the employee refused to submit to an examination. Though the insurer by implication assumed the expense of the operation, it did not admit general liability. In Seelbach, no surgery was recommended, tendered, or demanded while the employee’s case was before the Board. The need for an operation did not become apparent until after the Industrial Accident Board’s award became final. In Cook, the employee was said to have knowledge, while his case was before the Board, that surgery would help him. But no operation was tendered or demanded while his case was before the Board. In all three of these cases, it was held that the trial court correctly excluded evidence similar to that proffered here. In these three cases, this Court had before it the line of cases including the Quinn and Kubiak cases, and the ruling substantially to the contrary by the Fifth Circuit in the Bellah case. It chose to follow Quinn and Kubiak. And in Seelbach, Shelton, and Cook, this Court held that for the insurer to be in a position to offer the testimony, it must have (1) admitted liability and (2) tendered an operation to the employee, and (3) the tender must have been made while the matter was still before the Board and before the Board’s award had been finally made.

It will be helpful, in considering the facts set out below, to keep in mind the steps set out in Quinn to enable the insurer to get in this testimony:

1. The insurer must admit liability;
2. It must tender an operation while the claim is pending before the Board;
3. If the employee refuses the operation, the insurer must make a demand to the Board to require the examination; and
4. The insurer must show the examination was had and the action of the Board thereon.

The facts in this case and the voluminous correspondence between counsel for plaintiff and counsel for the insurer are set out at length in the opinion of the Court of Civil Appeals, 353 S.W.2d 299 to 303, and only the substance thereof will be repeated here.

Mrs. Claudine Courtney injured her back while at work in October of 1959. The insurer assumed liability and paid her weekly compensation for 33 weeks plus medical expenses. During that time, she was sent by the insurer to Doctors Esquivel and Tisdale who considered that she had only a back strain. In March of 1960, before her payments were stopped in June of 1960, Dr. Esquivel reported that although he did not think Mrs. Courtney had a disc lesion, he recommended to the carrier and to claimant’s attorney that she be examined by a neurosurgeon and “perhaps have myelogram studies made to rule out such a lesion.” She was not sent to a neurosurgeon and no myelogram was run at that time.

In June of 1960, while the matter was still before the Board, the insurer stopped making compensation payments. It wrote the Board that it was stopping because, based on its doctors’ reports, Mrs. Courtney merely had a lumbar strain and had ceased receiving any medical attention; that the doctors had indicated that the claimant was no longer disabled. While it does not clearly appear, it is apparent that Mrs. Courtney thereafter asked the Board to require the insurer to continue making payments.

On October 21, 1960, counsel for the insurer again wrote the Board that it had stopped payments for the above reasons; that it appeared that “this claimant has been overpaid” because she hadn’t reported for treatment since December 11, 1959, “and we have no evidence that the claimant should have any residual disability or loss of earning power whatever.”- It stated that none of the doctors had recommended surgery, and it had no information that she required surgery. Then follows language which is pertinent on tender of an operation:

“However, we * * * are giving notice, through your Honorable..Board, that if claimant’s attorney has any evidence or any infprmation indicating that this claimant - requires surgery, then the insurer hereby tenders the claimant a surgical operation at the hands of Dr. S. Esquivel. * * * ”

Mrs. Courtney’s attorney replied on October 22, 1960, that Dr. Esquivel had recommended a myelogram on March 18, 1960, and that Dr. Tisdale’s report of June 8, 1960, suggested the possibility of a disc protrusion; but that the insurer had not paid Mrs. Courtney any compensation since June 13, 1960, or suggested any further treatment. He said, however, that he would agree to postpone the hearing before the Board to see whether Mrs. Courtney’s condition required an operation if the carrier would bring her compensation payments up to date and would continue them until it could be definitely determined whether surgery would be required.

Insurer’s counsel replied that he interpreted Mrs. Courtney’s counsel’s letter as requesting a myelogram. He thereupon wrote:

“ * * * we accordingly, hereby tender the claimant a myelogram at the expense of the insurer at the hands of Dr. S. Esquivel. * * * The insurer also offers to resume the payment of weekly compensation when the claimant reports for the myelogram and to continue the payment * * * until the claimant is released by Dr. Esqui-ygj * * *»

Mrs. Courtney’s counsel replied that his letter had been misinterpreted: “Claimant is not requesting a myelogram or surgery unless it is the opinion of either Dr. Esqui-vel or Dr. Tisdale that a myelogram or operation will * * * materially and beneficially improve claimant’s condition and * * * [is] advisable, * * * ” He again expressed a willingness to postpone the hearing before the Board if the insurer brought claimant’s payments up to date and continued them “until it is definitely established whether or not surgery is advisable. While not clear on this point, the carrier’s letter * * * appears to offer the payment of weekly compensation only during the time required to perform and recuperate from a myelogram.”

t The insurer’s counsel replied by a letter addressed to the Board. He wrote that, “We * * * note that the attorney and the claimant have not accepted the insurer’s tender.” He again stated that compensation payments had been stopped because Mrs. Courtney had not been seen by any doctor since March 28, 1960, and that she had been paid compensation for 33 weeks [$683], The letter concludes:

“We, therefore, contend that this claimant has been overpaid for temporary total incapacity, and we certainly deny that she has any residual disability, or any loss of earning power.
“Inasmuch as this claimant has not reported back for any further treatment in over nine months, now, and .does not want myelogram or surgery, we request that your Honorable Board proceed to a final award denying further recovery in this case ” [Emphasis ours.]

The Board on November 3, 1960, entered its final order. It recited that certain payments had been made, and that the claimant had “failed to establish by proof that she suffered further disability than that for which compensation has heretofore been paid. Therefore, claim for additional compensation is denied.”

This suit was then filed as an appeal from this final order of the Board. After the suit was filed and shortly before trial, Mrs. Courtney, at Dr. LaLonde’s request and at the expense of the insurer, did undergo a myelogram. It was the opinion of the doctor that the test showed a lumbar disc protrusion.

We again refer to the holdings of the cases set out above. Has the insurer done those things which are required of it to make the proffered testimony admissible upon the trial? We think that it has not.

Accurately speaking, Section 12e of Art. 8306, Vernon’s Texas Civil Statutes Annotated, does not speak in terms of a “tender” of an operation. It provides for a “demand in writing” for an operation followed by a request that the Board require the employee to submit to an examination to see if surgery is desirable and beneficial. We shall refer to the necessity for a demand for an operation later herein. But Seelbach and others speak in terms of a tender, and we shall assume for the present that an unconditional tender is sufficient for our purposes here.

As pointed out in Seelbach and Shelton, both Sections 12b and 12e say, “In all [such] cases where liability for compensation exists * * Then they speak about surgery. These cases then point out that the first thing the insurer must do to make the proffered testimony admissible is to admit liability. The cases have not said what liability must be admitted. The clear import of the cases referred to is that in tendering an operation, liability must clearly be taken out of the case in so far as the surgery is concerned. In Texas Employers’ Ins. Ass’n v. Shelton, 161 Tex. 259, 339 S.W.2d 519, the carrier tendered surgery with its expenses but reserved the right to deny liability. This Court said that was not enough.

While we' would not attempt to prescribe the form for such admission, to remove the question of liability, the insurer would have to admit unequivocally the substance of the following: a compensable injury to the employee in the scope of employment; liability for the injury for which a surgical operation would or should prove beneficial to the employee; liability for the cost of the operation, including doctors, hospital, medical, and convalescent care as prescribed by the statute and the Board; and liability for the consequences of the operation, within the provisions of the workmen’s compensation act. Compare Texas Employers Ins. Ass’n v. Musick (Tex.Civ.App.1961, no writ), 349 S.W.2d 619.

The carrier here fell short of these requirements. First and last, its position was that the claimant had been overpaid and that claimant had no residual disability. In between, it did not unequivocally offer surgery and full responsibility therefor. Neither the insurer nor its doctors recommended surgery while her case was before the Board. It made an offer to pay compensation during the period beginning when she appeared for her myelogram and continuing until she was released by the doctor. There was nothing said about liability thereafter.

The insurer in its briefs says that this, or at least some of this, is implied in its letters, and that, if not, it would be estopped to deny liability. It is our holding that the tender and admission of liability must not be left to implication and estoppel.

Since we have held that the trial court correctly excluded the proffered testimony for the above reasons, and since the claimant has recovered for total and permanent disability, it is unnecessary for us to decide whether the carrier must also pay compensation continuously from the date of injury to the time of the operation. We reserve that question and express no opinion thereon.

The insurer contends that it is being penalized because of the Board’s failure to act; that it was the Board’s duty to require an examination and surgery, if it was found to be necessary. There are at least two answers : first, as above referred to, the statute [12e] speaks in terms of a demand in writing for surgery. When a demand in writing has been made, then it is the duty of the Board to order a medical examination of the claimant. If the Board unanimously finds that surgery is desirable, it may direct the claimant to submit to an operation. The insurer requested none of these steps here as the carrier did in Shelton. Second, the carrier itself represented to the Board that Mrs. Courtney had been overpaid, “does not want a myelogram or surgery, and we request that your Honorable Board proceed to a final award denying further recovery in this case.” The carrier is simply not in a position to lay this matter at the feet of the Board. The steps to be followed by the carrier were pointed out in the Quinn case which are set out above. They were not followed. By the above we do not hold that to make the proffered testimony admissible, the carrier must make a demand in writing for an examination or operation. The holding is that before the insurer may excuse itself and place the responsibility on the Board, it must follow the steps outlined in the statute.

The judgments of the courts below are affirmed.