author: RICHARDS, Justice. PER CURIAM.

text:
    C. H. LANGDEAU, Receiver of General American Casualty Company, Appellant, v. John L. DICK et al., Appellees.
    No. 10941.
    Court of Civil Appeals of Texas. Austin.
    March 14, 1962.
    Rehearing Denied April 4, 1962.
    Motion to Set Aside Judgment Denied May 2, 1962.

      Cecil C. Rotsch, John R. Grace, Harold G. Kennedy, Austin, for appellant.
    Maverick, Tynan & Gochman, San Antonio, Smith, Mcllheran & Jenkines, Wes-laco, for appellees.
   RICHARDS, Justice.

Suit was brought by C. H. Langdeau as receiver of General American Casualty Company against John L. Dick et ux. to recover upon their promissory note dated December 26, 19S2 in the sum of $6,000.00 to General American Casualty Company in payment for six $1,000.00 5% Debenture Bonds of General American Casualty Company, Series 1952, and to foreclose a deed of trust lien on certain real estate under a deed of trust executed by Dick et ux. as security for the note. General American Casualty Company was placed in temporary receivership in the 126th District Court of Travis County, Texas on June 17, 1954 and C. H. Langdeau is its receiver.

Dick et ux. having answered only by general denial, Langdeau filed motion for summary judgment based on pleadings filed and exhibits thereto attached pursuant to-Rule 166-A, Texas Rules of Civil Procedure. Dick et ux. thereupon filed their first amended original answer admitting execution of the note and deed of trust but alleging that the note and deed of trust were void or voidable because the execution thereof was induced by fraud, misrepresentation, concealment and in violation of the Securities Act of 1933, 15 U.S.C.A. § 77a et seq. and additionally that they had exercised their option to cancel the contract for the purchase of the Debenture Bonds because General American Casualty Company or its successors had failed and refused to pay installments of interest on the bonds for more than thirty days after the interest became due, thereby permitting them to exercise their option to cancel and terminate the bond purchase agreement, which pleading was controverted by Langdeau in a supplemental petition.

After filing their first amended original answer Dick et ux. then filed their answer to Langdeau’s motion for summary judgment as follows:

“Defendants’ first amended original answer, filed herein, raises fact issues of misrepresentation, fraud, concealment and in violation of the Securities Act of 1933, all of which are genuine issues of material fact, which require trial.”

and in the same instrument filed their motion for summary judgment against Lang-deau on the ground that the deed of trust and note attached to Langdeau’s motion for summary judgment revealed that the note and deed of trust are subject to termination and cancellation by Dick et ux. -and that the same had been cancelled and terminated and therefore there is no genuine issue of material fact which would entitle Langdeau to judgment, attaching thereto an affidavit executed by their attorney, Garland F. Smith. Langdeau filed his answer to defendants’ motion for summary judgment consisting of special exceptions and a denial that the provisions in the deed of trust providing for the cancellation and termination of the note and deed of trust was available against him as receiver, attaching Langdeau’s affidavit stating that prior to the date General American Casualty Company was placed in receivership and also as of June 1, 1954, the note and deed of trust sued upon were not can-celled and terminated.

Before either of the motions for summary judgment were submitted to the Trial Court Dick et ux. filed a cross-action against Langdeau as cross-defendant joined therein as cross-plaintiffs by R. Gordon Pierce et ux. and D. H. Zachman et ux., in which cross-action each of the cross-plaintiffs sought to cancel, rescind and recover from Langdeau the notes and deeds of trust given by them for the purchase of the Debenture Bonds, Series 1952, of the General American Casualty Company in the case of Dick et ux.; of sixteen $1,000.00 5% Debenture Bonds of Alamo Casualty Company, Series 1952, in the case of Pierce et ux.; and of ten $1,000.00 5% Debenture Bonds of Alamo Casualty Company, Series 1952, in the case of Zachman et ux., Alamo Casualty Company having been the predecessor of and merged into General American Casualty Company prior to receivership. Each of the promissory notes in question were secured by deeds of trust on real estate executed by cross-plaintiffs as security for the notes given to the respective companies as consideration for the purchase of the bonds.

As their basis for cancellation, rescission and recovery of the notes and deeds of trust, all cross-plaintiffs alleged that the notes and deeds of trust were secured by fraud, misrepresentation and deceit and in violation of the National Securities Act of 1933 and the mail fraud section thereof by General American Casualty Company as set forth in detail in the first amended original answer of defendants John L. Dick et ux. and which allegations contained “in said answer in Paragraphs I through XVI, all of which are hereby adopted and made a part hereof to assert affirmatively Plaintiff’s cross-action for fraud, deceit, violation of the Securities Act, assertion of the Statutes of Limitation and all other matters pled therein.”

Dick et ux. then filed their first amended motion for summary judgment alleging that there was no genuine issue as to any material facts and that on the basis of the pleadings, exhibits and affidavits attached thereto and depositions taken in connection with the receivership of General American Casualty Company, of which the Trial Court had judicial knowledge, they were entitled to summary judgment as a matter of law upon the grounds that (1) they had exercised their right to cancel and terminate the bond purchase contract agreement under its provisions; (2) the note was without consideration and/or (3) the consideration of the note failed; (4) the note was given for bonds in violation of Art. XII, Sec. 6, of the Constitution of and the laws of the State of Texas, including Art. 1348, Texas Civil Statutes, since the note was not money paid, labor performed, or property received and therefore void or voidable; (5) that General American Casualty Company at the time the note was issued was insolvent and doing business in violation of the laws of Texas prohibiting insolvent corporations to operate in Texas, especially Art. 1379, Texas Civil Statutes, and the bond purchase contract including the notes was therefore void or voidable as a matter of law; (6) that cross-plaintiffs are entitled to set-off the amount of the bonds against the amount of the note; and (7) that the note and deed of trust were executed as a result of fraud perpetrated by the agents, employees, officers and directors of General American Casualty Company, of which fraud the Court has judicial knowledge. Motions for summary judgment were filed by Pierce et ux. and Zachman et ux. based upon the same grounds alleged in the Dick motion but omitting the 7th ground. Each •of the motions for summary judgment was supported by the affidavits of Garland F. Smith, attorney for each of the plaintiffs in the cross-action, which will be adverted to later in this opinion, the cross-plaintiffs .and one Spencer R. Bowyer.

Langdeau filed unsworn answers to the cross-actions which consisted of special exceptions, pleas of estoppel, laches, waiver, and general and special denials and answers to the motions for summary judgment filed by the various cross-plaintiffs stating that fact issues were raised as to each of the grounds upon which relief was sought in the motions for summary judgment. The answers to the motions for summary judgment were not sworn to nor were they supported by controverting affidavits.

Prior to the hearing on the various motions for summary judgment the Trial Court overruled all the special exceptions contained in Langdeau’s first supplemental petition and his answers to each of the cross-actions brought by the cross-plaintiffs. On the hearing of the motions for summary judgment filed by cross-plaintiffs Dick et ux., Pierce et ux., and Zachman et ux., the Trial Court considered the pleadings and exhibits attached thereto and the motions for summary judgment together with the affidavits and exhibits attached thereto and found that there was an absence of any genuine issue as to any material fact relating to the defenses raised against the notes described in the cross-actions and that Langdeau was not entitled to recover on the notes described in the cross-actions

The Court then entered judgment that Langdeau take nothing by his suit and can-celled, released, rescinded and declared to be null and void all of the notes executed by the cross-plaintiffs together with the deeds of trust securing payment thereof. The Court further ordered that the various Debenture Bonds of General American Casualty Company and Alamo Casualty Company be delivered by the cross-plaintiffs to the Clerk of the District Court of Travis County who was then instructed to deliver them to Langdeau as receiver for the General American Casualty Company, from which judgment Langdeau, Receiver of General American Casualty Company as cross-defendant, has perfected his appeal herein.

Langdeau as Receiver of General American Casualty Company will be hereinafter referred to as appellant, John L. Dick et ux., R. Gordon Pierce et ux. and D. H. Zachman et ux. will be referred to as ap-pellees and General American Casualty Company and Alamo Casualty Company will be referred to as Insurance Company.

Appellant bases this appeal upon four points of error. We will first discuss his fourth point of error, as follows:

“The Trial Court erred in granting appellees’ motions for summary judgment on the grounds; (1) that appel-lees were entitled to cancel the notes in the exercise of a contract right or option; (2) that said notes were given without consideration and/or the consideration for such notes failed; (3) that the bonds were given in violation of Article 12, Section 6, Texas Constitution, and Statutes of Texas, including Article 1348, Texas Civil Statutes; (4) that the notes and bond purchase contract were void or voidable inasmuch as the insurance company or companies, at the time of the issuance of the notes, were insolvent, but doing business in violation of the laws of Texas prohibiting insolvent corporations to operate in Texas, especially Article 1379, Texas Civil Statutes; or (5) that said notes and deeds of trust were executed as a result of fraud perpetrated by the agents, employees, officers and directors of the insurance company or companies upon appellees; because a material question of fact is raised by the pleadings as to each of such grounds.”

This is an appeal from the granting of a summary judgment under Rule 166-A, Texas Rules of Civil Procedure, Subsection (c) of which provides in part:

“The judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

This rule has been construed as allowing summary judgment only when there is no disputed fact issue and it is the duty of the Court hearing the motion for summary judgment to determine if there are any issues of fact to be tried. The burden of proof that there is no genuine issue of any material fact is upon the movant and all doubts as to the existence of a genuine issue as to a material fact must be resolved against the movant. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931. Thus, if there is a genuine issue as to any material fact summary judgment will not lie.

But if no genuine issue of material fact exists as to any of the seven grounds asserted by appellees for which summary judgment would be granted as a matter of law, the judgment of the Trial Court should not be disturbed. It is therefore necessary to examine each ground in order to ascertain the legal effect thereof as a basis for judgment absent any genuine issue of material fact.

The transactions between the Insurance Company and the appellees which form the basis of the present controversy consist of the making of contracts by appellees with the Insurance Company for the purchase of 5% debenture bonds or notes issued by the Insurance Company. As an illustration, ap-pellees Dick et ux. executed on December 26, 1952 their promissory note in the sum of $6,000.00, due on or before December 26, 1962, with interest thereon payable at the rate of 2% semi-annually from date until paid, which note was secured by a deed of trust on certain lands situated in Hidalgo County, Texas. The deed of trust was in ordinary form but contained this additional stipulation:

“The above described note is given for the purpose of purchasing by party -of the first part of $6,000.00 in Debenture Bonds of General American Casualty Company, Series 1952, dated December 1, 1952, being bonds numbered 15 through 20, both inclusive, which bonds bear interest at the rate of 5% per annum, and it is understood and agreed between the undersigned and •General American Casualty Company that in the event General American Casualty Compcuny, its successors or assigns fails or refuses to pay any installment of interest on the bonds, or .either of them, within thirty days after the same shall become due and payable, according to the terms thereof, thereupon the undersigned, his heirs, executors, administrators or assigns, shall .have the right and option to cancel and .terminate this deed of trust and bond purchase agreement, and upon the surrender by the undersigned, his heirs, ' executors, administrators or assigns, to General American Casualty Company, • its successors or assigns, of all of the bonds above mentioned, thereupon this ■deed of trust shall be of no further force and effect, and shall be fully released; provided, however, that the rights of General American Casualty •Company hereunder shall not be impaired or otherwise affected by such right and option so given to the undersigned, his heirs, executors, administrators or assigns to cancel and terminate this deed of trust. It is further understood and agreed that the undersigned, holder of the bonds, will not sell or ■convey same except to General American Casualty Company for the purpose of retiring mortgage loan.” Italics supplied.

As a part of the contract the Insurance Company delivered to Dick et ux. six $1,000.00 debenture bonds dated December 1, 1952 and due December 1, 1962, with an •option to redeem on December 1, 1957. Attached to each bond were 20 interest coupons, each in the principal sum of $25.00 which matured on June 1st and December 1st of each year beginning June 1, 1953. Also attached to the bonds were 5 coupons known as “principal sum reduction” coupons, each in the sum of $200.00, maturing on December 1, 1952 “or any interest due date thereafter” and annually thereafter, which the Insurance Company agreed to pay at the option of the holder.

Each bond also contained the following recitations:

“3. This issue of Debenture Bonds is secured by a pledge of the surplus funds and the Company agrees to set aside out of the surplus and/or surplus profits, an amount not to exceed the equivalent of two percent (2%) of the premium income of the previous six (6) months on each interest due date, which amount shall be sufficient to provide one twentieth (½o) of' the proportionate part of the principal total of the issue sold and the accrued interest to that date.
“4. From this fund on each interest paying date, the Company will pay, first, the interest due and accrued as of said date; and, secondly from the balance in the sinking fund it will pay Principal Sum Reduction Coupons tendered and will pay or call for redemption the principal sum balances of this issue, December 1, 1962, with option to redeem all Principal Sum balances December 1, 1957 at the then Principal Sum value plus one percent (l'%) premium.
“5. Provided that the Company pledges it’s full faith and credit to all agreements herein and further provided that prior to maturity these bonds shall not otherwise be construed as a liability of the General American Casualty Company.
“6. In the event of the sale, rein- : surance, liquidation or consolidation of the General American Casualty Company, or any part thereof, the obligation to make payments as provided shall not in any manner be reduced thereby and shall be assumed by and be binding upon any successor, assign or reinsurer of General American Casualty Company, according to the terms of said obligation.
“7. The conversion and optional provisions stated by the Company on reverse side hereof together with coupons attached are hereby made a part of this bond.”

Among the conversion and optional privileges referred to in par. 7 of the debenture bond, it is recited that interest coupons are withdrawable with interest on dates shown thereon each year in cash. There is also typewritten upon the same page “THIS BOND IS SUBJECT TO CONTRACT ATTACHED.” The transcript of the record fails to reveal any contract attached to the bond, but since both appellant and appellees have treated the provisions in the note, deed of trust and the bond as constituting a contract, it is presumed that the words “contract attached” refer to the note and deed of trust with particular reference to the above quoted option to cancel contained in the deed of trust.

Ordinarily the words “debenture bond” means a note or series of notes issued by a corporation as authorized by its Board of Directors providing for interest at a specified rate and constitute written promises to repay money loaned to the corporation. The principal and interest of these notes may or may not be payable out of specified net profits of the corporation and are generally issued by the corporation as a means of raising capital funds rather than by the issuance and sale of preferred stock. 19 C.J.S. Corporations § 1147, p. 723; Hildebrand on Corporations, Sec. 480. The purchasers of such debenture bonds or notes thereby become preferred creditors of the corporation upon liquidation to the extent only of the profits from which the bond or note is payable, otherwise they are considered as ordinary creditors.

However, in the instant case, it is readily apparent that the appellees in contracting to purchase the debenture bonds or notes from the Insurance Company did not become creditors of the Insurance Company for the following reasons. Under the terms of the contract appellees Dick et ux. were to receive from the Insurance Company on each bond the sum of $25.00 payable semiannually or a total of $300.00 per year. In turn, appellees obligated themselves to pay to the Insurance Company 2% interest upon their notes payable semi-annually or a total of $120.00 annually, thereby creating a balance due them from the Insurance Company in the sum of $180.00 annually for 10 years or a total sum of $1800.00 in excess of their obligation to the Insurance Company on their notes. In addition, the 5 principal sum reduction coupons on each bond payable on December 1 of each year beginning December 1, 1953, each in the sum of $200.00, would be payable to retire the principal of the note given for the purchase of the bonds in question on December 1, 1957, if the Insurance Company desired to avail itself of the option set forth in par. 4 of the debenture bond and which, in any event, would be due and payable upon December 1, 1962, the date of the maturity of appellees’ notes.

Stated differently, appellees were to pay no consideration whatever to the Insurance Company for the purchase of the debenture bonds, but on the contrary if the Insurance Company had performed the contracts according to their terms, appellees would have received an annual profit on each of the bonds of $150.00, if the Insurance Company had exercised its option, or $300.00 on December 1, 1962, for which appellees had not paid any monetary consideration to the Insurance Company.

Since par. 5 of the bond provides that “the Company pledges its full faith and credit to all agreements herein” and that prior to the maturity the bond shall not otherwise be construed as a liability of the Company, appellees were placed upon notice that the Insurance Company would not be required to list any of the bonds as liabilities of the Company upon its books, financial reports or records prior to the maturity date thereof.

However, no such restriction was placed upon the use by the Insurance Company of appellees’ notes secured by the deed of trust liens on the real estate in Hidalgo County, Texas as capital assets of the Insurance Company or their deposit with the State Treasurer for the protection of the Company’s bondholders as provided by Art. ■8.05 of the Texas Insurance Code, V.A.T.S. The note and deed of trust of appellees Dick et ux. were so deposited with the State Treasurer as shown by the record. Since the record does not affirmatively show that either the Pierce or Zachman notes were deposited by the Insurance Company with the State Treasurer under the provisions of Art. 8.05, there is no presumption that they were so deposited. From the clear and unambiguous terms of the contract between each of the appellees and the Insurance Company it is apparent that appellees are not creditors of the Insurance Company after payment of their notes except to the ■extent of the unpaid interest coupons and principal sum reduction coupons attached to ■each of the bonds, since appellees did not pay any valuable monetary consideration to the Insurance Company as a basis for the purchase of the bonds.

But the Insurance Company did agree to pay to appellees a monetary consideration ■of $50.00 per annum on each of the debenture bonds for the use of the notes and deed of trust liens as part of the capital assets of the Insurance Company to the same extent as though appellees had contracted to purchase preferred stock of the Insurance Company with a 5'% dividend payable out of the surplus or surplus profits •of the company’s business, which preferred ■stock would be a part of the Insurance Company’s capital. This is emphasized by the provision that each bond shall not otherwise be construed as a liability of the Insurance Company. Certainly the policyholders and the general public had the right to rely upon appellees’ notes which were secured by liens upon real estate as forming a part of the capital assets of the Insurance Company without any corresponding liability.

Appellees having been placed upon full notice of the various recitations in the debenture bonds, notes and deeds of trust and having neither loaned nor paid any monetary consideration whatever to the Insurance Company in return for the annual profits which they were to receive from the Insurance Company for the use of their notes as capital assets, it is our opinion and we hold that the rights and liabilities of each of the appellees with respect to their contracts for the purchase of the debenture bonds are analogous to the rights and liabilities of persons who agree to purchase shares of preferred stock of the Insurance Company executing their promissory notes as consideration therefor, with the exception that appellees are creditors of the Insurance Company to the extent of the unpaid semi-annual interest coupons and principal reduction coupons.

Appellees’ first ground or theory in support of the summary judgment is that they had exercised their right to cancel and terminate the bond purchase contract agreement under the cancellation provision contained in the deed of trust above referred to. It is undisputed from the record that appellees Dick et ux. could not have exercised their option to cancel the agreement because of the failure of the Insurance Company to pay the interest coupons which matured June 1, 1954 since the option to cancel could only be exercised in the event the interest coupons due June 1, 1954 were not paid by the Company on or before July 1, 1954. The Insurance Company having been placed in the hands of the receiver on June 17, 1954, their rights and liabilities on their contracts became fixed on that date by Sec. 2(c), Art. 21.28, Texas Insurance Code. Appellees Pierce et ux. and Zach-man et ux. admitted in their cross-actions that although the cancellation provision in the deeds of trust executed by them provided for the exercise of such option in the event the interest coupon due June 1, 1954 was not paid by the Company within the expiration of ten days from its due date, which period would have elapsed prior to the institution of receivership proceedings on June 17, 1954, they then did not attempt to exercise such option until on or about December 1, 1954, the date upon which such appellees and others instituted an action in the United States District Court for the Southern District of Texas for the purpose of cancelling and rescinding the transaction.

Since the rights of all parties had become fixed on June 17, 1954 and appellees Pierce et ux. and Zachman et ux. not having exercised their options to cancel their contracts prior thereto, all appellees’ assertions of the rights of cancellation and rescission as grounds for the rendition of the summary judgment are without legal basis.

Appellees assert as their second and third grounds for summary judgment that the notes were without consideration or that the consideration of the notes failed. As stated above, the consideration for appellees executing the notes was the agreement of the Insurance Company to pay to appellees the difference between 5% annual interest upon the bonds and the 2% interest payable to the Insurance Company upon the notes resulting in appellees paying no monetary consideration to the Insurance Company for the execution of the notes. When the receivership proceedings were instituted on June 17, 1954 the rights and liabilities of all parties became fixed and appellant was under no obligation to pay the interest coupons until the process of the liquidation reached the stage for the distribution of the assets of the receivership estate which were available for the payment of appellees’ claims. In this connection it is admitted that none of the appellees ever filed any claims against the receivership estate within the time or as required by Sec. 3(a), (b) or (d), Art. 21.28, Texas Insurance Code.

As to failure of consideration the record shows that appellees Dick et ux. failed to make the payment of the 2% semi-annual interest on their note which became due June 1, 1954, the same date upon which the semi-annual interest coupons attached to their bonds became also due and payable by the Insurance Company. As a result if there was a failure of consideration it became a mutual failure of consideration by both the Insurance Company and appellees. The record does not affirmatively disclose whether appellees Pierce et ux. and Zach-man et ux. did or did not pay to the Insurance Company the semi-annual interest payments on their notes due June 1, 1954 although these appellees alleged, and it does not seem to be disputed, that the Insurance Company did fail to pay the semi-annual interest coupons attached to their bonds due on the same date.

It is our opinion that each of the grounds alleged by appellees that there was no consideration for the notes or that the consideration for the notes failed, does not constitute a ground for summary judgment as a matter of law.

Appellees’ fourth ground that the note was given for bonds in violation of Art. XII, Sec. 6 of the Constitution of and the laws of the State of Texas and under Art. 1348, Vernon’s Civil Statutes, does not constitute a legal ground for summary judgment as a matter of law. Art. XII, Sec. 6, Constitution of Texas, Vernon’s Ann.St., provides that no corporation shall issue stock or bonds except for money paid, labor done, or property actually received and a fictitious increase of stock or indebtedness shall be void.

In Thompson v. First State Bank of Amarillo, 109 Tex. 419, 211 S.W. 977, 978, 979, it was held that under the above constitutional provision the giving of a note for stock is not a valid payment but that neither the stock issued nor the note given is void. As a result in a suit to enforce the note for the benefit of creditors the subscriber is estopped to assert the invalidity of the transaction. The basis for this ruling is in part as follows:

“Creditors dealing with a corporation have the right to assume that its capital has been or will be paid in accordance with law. It constitutes a warrant for the extension of credit. It, in effect, stands as a pledge for the security of the corporation’s debts. Upon the corporation’s insolvency, it becomes a trust fund for the protection of creditors. If it has not been paid up, they have the clear right to insist that it be paid up. The stockholder who has permitted himself to be held out as such, who has received and appropriated benefits from the corporate enterprise but has not paid for his stock, rests under the duty to pay for it. With the debts of the corporation unpaid, it is a fraud upon the innocent creditors, as well as a fraud upon the law, to release him from that duty.
* * * With the bank possessed of the power to issue the stock, creditors without fault would have the right to assume that it was issued in a lawful manner. They would not be chargeable with notice of the facts which made the manner of its issuance unlawful. With this true, the estoppel which equity creates in their favor cannot be defeated by the fact that the transaction was, as between the parties, invalid. In all such cases equity refuses to permit the stockholder in default to plead his own wrong as a means of defeating his just obligation. As a matter of good conscience he should not be heard to plead it. In such situations equity is concerned in the stockholder’s doing what he ought to do, rather than in his having done what he ought not to have done. It therefore holds him estopped, and properly so.”

In view of our holding that the rights and liabilities of appellees under their contracts for the purchase of the debenture bonds are analogous to the rights and liabilities of persons who subscribe for preferred stock in a corporation giving their promissory notes as a consideration therefor, we hold that appellees having permitted the Insurance Company to use their notes as a part of the capital assets of the company upon which the policyholders and other creditors had the right to rely, appel-lees are now estopped to assert the invalidity of the transactions as being violative of the constitutional prohibition. Thompson v. First State Bank of Amarillo, supra; Davis v. Burns, Tex.Civ.App., 173 S.W. 476, 480, error ref.; McWhirter v. First State Bank of Amarillo, Tex.Civ.App., 182 S.W. 682, 685, error ref.; Forman v. Irby, Tex.Civ.App., 115 S.W.2d 1229, 1231, error ref.

Appellees’ contention that the Insurance Company was insolvent at the time of the execution of the notes and was therefore doing business in violation of the laws of Texas prohibiting insolvent corporations to operate in Texas renders the bond purchase contract void or voidable as a matter of law is wholly without merit. Until the institution of the receivership proceedings the Insurance Company was engaged in business as a going concern with all the rights and privileges created by its charter. It was not until July 7, 1954 when the temporary receivership proceedings instituted on June 17, 1954 was made permanent under Court order that it could be conclusively presumed that the Insurance Company was insolvent. As a result, appellees’ contention that the Insurance Company was insolvent at the time the notes were executed does not constitute any legal ground or basis upon which summary judgment could be granted. Lyons-Thomas Hardware Co. v. Perry Stove Mfg. Co., 86 Tex. 143, 24 S.W. 16, 18, 22 L.R.A. 802; Jackson v. Bowie, Tex.Civ.App., 114 S.W.2d 342, 346, error dism. Appellees cite no authorities in support of their contention. Appel-lees’ fifth ground states no basis for summary judgment as a matter of law.

For their sixth ground appellees assert that they are entitled to set off the amount of the bonds which they contracted to purchase against the amount of the notes given by them for the purchase of the bonds, citing numerous cases holding that setoff is available as an equitable defense in suits brought on promissory notes, which cases are not pertinent to the issues here involved.

Appellees then cite the general rule of law that when a receiver takes a claim in favor of the estate which he administers, such claim is subject to all equities then existing between the parties and as against the demand by the receiver a debtor is entitled to set off a claim in his favor existing at the time when the receiver's title takes effect which the law would have allowed as a counterclaim against the insolvent had there been no receivership. The allowance of the counterclaim in such a case does not give the debtor a preference over creditors in whose favor no counterclaim exists since it is only the amount due by the debtor to the insolvent which constitutes an asset for the payment of its creditors and which passes to the receiver for such purpose, citing 38 Tex.Jur. Sec. 49, p. 76 and Cocke v. Wright, Tex.Civ.App., 299 S.W. 446.

While tire foregoing general statement of the law is correct, we do not think it is applicable in the instant case in view of the holding in Cocke v. Wright, Tex.Civ.App., 23 S.W.2d 499, aff., Tex.Com.App., 39 S.W.2d 590, wherein it was held in a factual situation somewhat similar to the instant case that an obligation on a note which constituted part of the assets of an insolvent corporation could not be offset or credited with the amount of a claim to be discharged out of the assets of the insolvent corporation in favor of the maker of the note. Appellees’ claim of setoff does not as a matter of law form any legal basis for the rendition of a summary judgment in their favor. Sec. 3(g), Art. 21.28, Texas-Insurance Code.

Since we have held that each of the first six grounds upon which all appellees rely to sustain the rendition of a summary judgment in their favor are untenable as a matter of law, there being no genuine issues of material fact involved, the sole remaining basis or ground for the rendition of the summary judgment is that alleged in the motion of appellees Dick et ux. that their note and deed of trust were executed as a result of fraud perpetrated by the agents,, employees, officers and directors of the Insurance Company, of which fraud the Court has judicial notice. As noted above, appel-lees Pierce et ux. and Zachman et ux. did not allege the ground of fraud as a basis for the summary judgment although it was affirmatively pleaded in their respective cross-actions against appellant. We therefore shall consider only the ground of fraud raised in the motion for summary judgment filed by appellees Dick et ux.

In their answer to the original motion for summary judgment filed by appellant, appellees Dick et ux. categorically admitted that their first amended original answer raised fact issues of misrepresentations, fraud, concealment and violation of the Securities Act of 1933, all of which were genuine issues of material fact which require trial. This pleading was never abandoned but instead was specifically adopted' in the cross-action of appellees and the ground of fraud and misrepresentation was raised in addition to the other grounds or bases in their motion for summary judgment.

We agree with the position taken by the appellees in their pleading that as to their pleas of fraud and misrepresentation, genuine issues of material fact were presented.

There is an additional reason why the motion for summary judgment filed by Dick et ux. could not be sustained on the ground that there were no genuine issues of material fact under the allegations of fraud alleged to have been perpetrated by the officers, directors, agents and employees of the Insurance Company, “of which fraud the court has judicial knowledge.”

Attached to the amended motion for summary judgment filed by appellees Dick et ux. are the affidavits of Garland F. Smith, their attorney, and Spencer R. Bowyer. It would serve no useful purpose and unduly prolong this already lengthy opinion to discuss in detail the contents of the Garland F. Smith affidavit in order to demonstrate that it does not comply with the provisions of Rule 166-A(c), Texas Rules of Civil Procedure. The affidavit is profuse with legal conclusions of the affiant as to matters which he asserts are within the judicial knowledge of the Court by referring to proceedings in Civil Action 927 in the United States District Court for the Southern District of Texas, Brownsville Division, the proceedings in Cause No. 97,864, the original receivership proceedings of General American Casualty Company, and in Cause No. 103,084, styled J. D. Wheeler, Receiver v. C. B. Erwin et al., both of which actions are pending in the same Trial Court having jurisdiction of the instant case.

While the affidavit refers to the various pleadings, sworn testimony and depositions in the original receivership proceedings as well as to the other two suits referred to, no specific reference is made to any pleadings, testimony, deposition, document, letter or statement nor are copies thereof attached to the affidavit. The failure to attach copies of the pleadings and documentary evidence in the various causes referred to in the Smith affidavit renders such affidavit a nullity under the ruling of the Supreme Court of Texas in Gardner v. Martin et al., Tex., 345 S.W.2d 274. The affidavit of Spencer R. Bowyer also is not in conformity with Rule 166-A(c), T.R.C.P. for the same reasons.

In his answers to appellees’ cross-actions, appellant specially pleaded estoppel, waiver and laches as defenses to the allegations of fraud and misrepresentation on the part of the officers, directors, employees and agents of the Insurance Company contained in the pleadings in the cross-actions of appellees, which are primarily questions of fact.

However the burden of proof is upon appellees to show not only every fact essential to establish fraud and misrepresentation on the part of the Insurance Company but also that the rights of the policyholders and other creditors of the Insurance Company had accrued prior to the time appellees permitted the notes secured by the deed of trust liens to be used by the Insurance Company as a part of its capital assets. This is an essential element of the defense raised by appellees Dick et ux. in the suit by appellant as the receiver representing the policyholders and creditors upon the note and deed of trust and it was incumbent upon appellees both to allege and prove it.

It is also an essential element of the causes of action alleged by all appellees in their cross-actions against appellant for the cancellation and rescission of the notes and deeds of trust on the ground of fraud and misrepresentation and it was incumbent upon them both to allege and prove it. In any event whether appellees were estopped to rescind their contracts of purchase on the grounds of fraud and misrepresentation constituted a genuine issue of material fact for the decision of the Trial Court upon the merits. Chapman v. Harris, Tex.Civ.App., 275 S.W. 75, 79, no writ history; 22 Tex.Jur.2d “Estoppel”, Sec. 21.

Appellant’s defense of estoppel should be considered by the Trial Court under the rules of law enunciated in Thompson v. First State Bank of Amarillo, supra; Davis v. Burns, supra; McWhirter v. First State Bank of Amarillo, supra, and Forman v. Irby, supra.

Appellant’s first, second and third points of error and the fifth ground of the fourth point of error are sustained and all of ap-pellees’ cross-points of error are overruled.

The judgment of the Trial Court granting the motions for summary judgment in favor of all appellees and against appellant being erroneous as a matter of law is reversed and this cause is remanded to the Trial Court for further proceedings in accord with this opinion.

Reversed and remanded with instructions.

On Appellees’ Motion for Rehearing

In appellees’ motion for rehearing our attention is directed to the statement in our original opinion that “The Insurance Company having been placed in the hands of the receiver on June 17, 1954, their rights and liabilities on their contracts became fixed on that date by Sec. 2(c), Art. 21.28, Texas Insurance Code,” is erroneous because Sec. 2(c), Art. 21.28 did not become effective until September, 1955. Appellees’ statement is correct.

The enactment by the Legislature of Sec. 2(c), Art. 21.28, Texas Insurance Code, V.A.T.S., in 1955 however did not change the law as it existed in Texas prior thereto. The rights and status of creditors of a corporation become fixed as of the •date of the appointment of a receiver even though it is not then known that the corporation is insolvent. McCormick v. Puritan Coal Mining Co. (U.S.C.A., Pa.) 28 F.2d 331, cert. den., 278 U.S. 651, 49 S.Ct. 176, 73 L.Ed. 562; Baylor University v. Chester Savings Bank, Tex.Civ.App., 82 S.W.2d 738, 744, error ref.; 19 C.J.S. Corporations § 1492 ; 75 C.J.S. Receivers § 114.

Since the rights and liabilities of appel-lees had become fixed on June 17, 1954 under the above rule of law, their assertion of the right of cancellation and recission as a ground for the rendition of the summary judgment is without legal basis.

Appellees’ motion for rehearing is overruled.

Motion overruled.

On Appellant’s Motion to Set Aside Judgment

PER CURIAM.

Appellees John L. Dick, D. H. Zachman and R. G. Pierce have filed a motion to set aside the opinion and judgment filed and rendered herein on the ground that Associate Justice Richards who wrote such opinion is disqualified or should recuse himself because (1) “he was of counsel in the case” and (2) “he advised and counseled with the State Board of Insurance of which appellant is a subordinate agency of the State, in matters directly affecting this litigation.”

The claim that Justice Richards was counsel in this cause is based on the erroneous assertion that Justice Richards was an Assistant Attorney General on June 17, 1954, when the General American Casualty Company was placed in receivership at the instance of the State acting through the Attorney General.

Justice Richards was not employed by the Attorney General of Texas from September 1, 1953 through December 31, 1956, inclusive.

Appellees, conceding that Justice Richards did not participate in this case as counsel contend that he is nonetheless disqualified because the Attorney General during the time Justice Richards was one of his employees gave advice to the “old Board of Insurance Commissioners” which resulted in deceitful and fraudulent practices by General American Casualty Company in which appellees became enmeshed.

Appellees do not state that Justice Richards gave any of this advice, only that he was an employee of the Attorney General when such advice was given. Justice Richards denies that he was a party to the giving of any such advice.

Justice Richards was not a first office Assistant of the Attorney General; hence Art. 4412, V.A.C.S. is not applicable. He was an employee of the Attorney General. An employee is not responsible for the acts of his employer, although an employer is responsible for the acts of his employee performed in the scope of his employment. Applying these fundamental principles it follows that an Assistant Attorney General is not of counsel in every case in which the Attorney General may be of counsel, but that the Attorney General is of counsel in every case in which an Assistant Attorney General, as such, is properly of counsel. See: Prince v. State, 158 Tex.Cr.R. 65, 252 S.W.2d 945, 25 Tex.Jur. 292, Judges, Sec. 48.

The only legal ground upon which disqualification is sought, that he was of counsel in this case, is untenable.

Appellees also seek to persuade Justice Richards not to sit in this case for the reason that his background of service with the Attorney General during the disturbing days of insurance company failures and frauds, and his participation in some phases of these controversies makes it inappropriate for him to take part in the decision of this case. This is a matter solely for his determination. Justice Richards declines to step down.

The motion is overruled.

Motion overruled.

RICHARDS, J., not sitting.

      . Since appellees’ notes were secured by deed of trust liens upon real estate, they constituted “property” within the meaning of the constitutional provision. General Bonding & Casualty Co. v. Moseley, 110 Tex. 529, 222 S.W. 961.

      . Art. V, See. 11, Texas Constitution, Vernon’s Ann.St.

      . See Ch. 62, 57 Leg., First Called Sess. p. 262, authorizing the Attorney General to employ such personnel as are neees-sary to carry out his legal responsibilities. These persons are also, of course, employees of the State.


source: Caselaw Access Project

author: STEWART, Chief Justice.

license: Public Domain

text:
    Sam JONES, Appellant, v. Lloyd HAMMONS, Appellee.
    Court of Appeals of Kentucky.
    May 1, 1962.
    Pleaz Wm. Mobley, Lester H. Burns, Jr., Manchester, for appellant.
    Neville Smith, Manchester, for appellee.
   STEWART, Chief Justice.

This is an appeal from an order dismissing the election contest brought by appellant, Sam Jones, the unsuccessful candidate for justice of the peace of District #5 of Knox County in the November, 1961, election, against appellee, Lloyd Ham-mons, the successful candidate.

The election was held on November 7, 1961, and the contest was filed on the following November 27th. Thereafter, on December 29th, appellant’s attorney mailed to the Knox circuit clerk a motion for an extension of time for the completion of appellant’s evidence in chief. This motion was received and filed on January 3, 1962. The supporting affidavits averred the extension was necessary for the reason that appellant’s attorney had been ill. On January 6th appellee filed a motion to dismiss the complaint.

On January 22, 1962, the trial court heard counsel for the parties and dismissed the complaint, finding, inter alia, the motion for an extension was not timely and that sufficient reason to justify such a request was not shown.

KRS 122.080(2), which sets out in detail the procedure to be followed in election contest suits, provides, in part: “ * * * The evidence in chief for the contestant shall be completed within thirty days after service of summons ⅜ In this case the summons was served on November 28, 1961, and it is therefore apparent appellant failed to comply with the requirement of the statute.

Appellant contends the delay in making his motion was not so great that appellee’s case was hindered or prejudiced. He asserts there was substantial compliance upon his part with the terms and conditions of KRS 122.080(2). It should be pointed out the record discloses that the evidence has never been completed, although appellant claims it could have been done in five hours of oral testimony or within two days by deposition.

This Court has, in the past, sometimes applied the “substantial compliance” rule to the foregoing statutory provision. However, in Ward v. Story, Ky., 258 S.W. 2d 515, the decisions were reviewed and the opinion stated the view to be that statutes governing statutory limitations as to the time within which pleadings should be filed and proof taken in an election contest case should be strictly enforced. That case sets forth the most recent statement of this Court on the issue before us.

KRS 122.080(2) provides that the trial court may, in its discretion, grant a reasonable extension of time within which to complete the evidence. Nevertheless, since appellant failed to make a timely motion for an extension, that is, before the time originally prescribed expired, the trial court had no authority to grant the extension.

Wherefore, the judgment is affirmed.


text:
    Joe SCAMAHORNE, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 1, 1962.
    John S. Kelley, Bardstown, Hobson L. James, Elizabethtown, for appellant.
    John B. Breckinridge, Atty. Gen., John B. Browning, Asst. Atty. Gen., Frankfort, for appellee.
   STEWART, Chief Justice.

Appellant, Joe Scamahorne, was convicted in the Nelson Circuit Court of the offense of carrying concealed a deadly weapon. See KRS 435.230(1). He was sentenced to two years in the penitentiary.

The judgment must be reversed because another crime of which appellant was accused was injected into the trial. The pertinent facts in this connection reveal that appellant was apprehended at B alltown in Nelson County under a warrant which issued from Barren County, the arrest having been made by two detectives of the Kentucky State Police. It developed that appellant then had upon his person a .38 caliber pistol, the possession of which he disclosed to the officer, and which circumstance thereafter resulted in his indictment, trial and conviction in Nelson County of the charge now before us.

The sole issue in the instant case was whether the weapon was concealed. Appellant raised no question as to the validity of the warrant which issued from Barren County and the legality of the arrest thereunder in Nelson County. Notwithstanding this fact, both detectives were allowed to state, over the objection of counsel, when asked what the warrant of arrest was for, that the accusation contained therein was “bank burglary.”

Was this evidence incompetent and prejudicial? We believe it was.

The question of what the Barren County warrant was for was in no way pertinent to the particular offense which appellant was charged with having committed. Therefore, it was error to permit the Commonwealth to place in evidence an accusation of an infamous crime which was independent of, and unconnected with, the one for the commission of which appellant was on trial. See Turpin v. Commonwealth, Ky., 352 S.W.2d 66; Acres v. Commonwealth, Ky., 259 S.W.2d 38; Swanger v. Commonwealth, Ky., 255 S.W.2d 38; Peck v. Commonwealth, 286 Ky. 347, 150 S.W.2d 919; Howard v. Commonwealth, 110 Ky. 356, 61 S.W. 756.

In the interest of justice we conclude appellant should be given another trial free from damaging statements as to the perpetration of another totally unrelated crime he may have perpetrated in another county. Only the preliminary fact that appellant was taken in custody pursuant to a warrant needed to have been established and to go further, as was allowed here, was prejudicial.

Appellant also objects to the testimony of one of the patrolmen that “someone” had tried to chisel or file the serial number from the gun. The trial court allowed the jury to see the weapon and they were shown where the alteration was attempted. Appellant claims such evidence served only to cast suspicion and blame upon him, although no one ever alleged that he had attempted the changes made. The Commonwealth asserts this evidence was properly admitted for the purpose of identifying the pistol. But appellant counters with the statement that the pistol had been identified and introduced in evidence without objection, and therefore the testimony was erroneously permitted and was prejudicial.

It is our view the sequence of events we have detailed should not have been brought out, as it served no good purpose and for the reason, moreover, that it could have had a harmful bearing upon appellant. The jury might have reasoned that appellant stole the weapon and had sought to remove the identifying marks on it. If the evidence be the same at another trial this testimony should be excluded.

Wherefore, the judgment is reversed and remanded for further proceedings consistent with this opinion.


author: CULLEN, Commissioner.

text:
    Willie LEWIS, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 1, 1962.

      Denver Adams, Hyden, for appellant.
    John B. Breckinridge, Atty. Gen., John B. Browning, Asst. Atty. Gen., Frankfort, for appellee.
   CULLEN, Commissioner.

Willie Lewis appeals from a judgment imposing a two-year penitentiary sentence upon a conviction of willfully and maliciously shooting at or into a dwelling house, KRS 435.170(4).

The testimony of the prosecuting witness was that Willie fired a shotgun blast that hit her house near the front door, after he had threatened to kill her if she would not admit him to the house and had broken a window with the barrel of the shotgun. This evidence was sufficient to sustain the conviction.

In the selection of the jury it became necessary to summon additional jurors. Willie maintains that the court erred in directing the sheriff to do the summoning, over an objection based on the fact that the sheriff had been called a witness for the prosecution. The sheriff’s testimony was of a routine nature, relating to identification of the defendant’s shotgun as an exhibit and an examination of the shot marks in the wall of the prosecuting witness’ house. He gave no indication of prejudice or hostility toward the defendant. Under these circumstances the court did not err in directing the sheriff to perform the duty of summoning the jurors. Perciful v. Commonwealth, 212 Ky. 673, 279 S.W. 1062.

Willie’s testimony was that he and a companion were walking by the prosecuting witness’ house; her dog attacked him; he struck the dog with a stick and the prosecuting witness fired several pistol shots at him; he did not have a gun and did not shoot at the house. This evidence did not furnish any basis for an instruction on simple assault, which Willie contends should have been given. An instruction on Willie’s right to defend himself against the dog, which he also contends should have been given, would have been wholly irrelevant.

Willie complains of the failure of the court to sustain objections to two items of testimony and to give an admonition concerning a third item. On the two objected items the court did not rule on the objection and Willie did not insist on a ruling. On the third item he did not ask for an admonition. Accordingly he has no basis for appellate review. Hicks v. Commonwealth, 291 Ky. 481, 165 S.W.2d 1; Hensley v. Commonwealth, 264 Ky. 718, 95 S.W.2d 564. In any event the evidence complained of was not of a vital character.

The judgment is affirmed.


author: PER CURIAM.

text:
    ILLINOIS CENTRAL RAILROAD COMPANY and Joseph Ryan, Appellants, v. Warner Lee WHOBREY, Appellee.
    Court of Appeals of Kentucky.
    May 4, 1962.
    Lloyd Cardwell, James W. Stites, Stites, Wood, Helm & Peabody, Louisville, for appellants.
    William M. Harvin, Louisville, for ap-pellee.
   PER CURIAM.

This is a motion for an appeal filed October 31, 1958, from a judgment of the Jefferson Circuit Court in favor of Warner Lee Whobrey, Administrator, against the Illinois Central Railroad Company and Joseph Ryan for $465.00.

We find the judgment to be correct for the reasons given in Illinois Central Railroad Co. et al. v. Howell Arms, Adm’r etc., Ky., - S.W.2d -, and consolidated cases, decided this date.

Wherefore, the motion for an appeal is overruled and the judgment stands affirmed. Chief Justice STEWART and Judges BIRD and MONTGOMERY dissent.


author: MONTGOMERY, Judge.

text:
    ROJO, INC., et al., Appellants, v. Evelyn DRIFMEYER, Appellee.
    Court of Appeals of Kentucky.
    May 4, 1962.

      Julian W. Knippenberg, Boehl, Stopher, Graves & Deindoerfer, Lexington, for appellants.
    Wheeler Boone, Lexington, for appellee.-
   MONTGOMERY, Judge.

Evelyn Drifmeyer sued to recover for alleged injuries sustained when 'she fell in the entranceway to the Drake Hotel Bar in Lexington owned by Rojo, Inc., and, operated by Drabar, Inc. The jury awarded' her $8,936.44 for pain, suffering, permanent disability,' arid medical expense. On appeal it is urgéd that (1) The evidence is insufficient; (2) Evelyn was contrib.u-. torily negligent as a matter of law; and' (3) the jury was erroneously instructed as to permanent damages from which an ex-' cessive verdict resulted.

Evelyn and her husband went for a stroll' on the evening of September 24, 1958. Some-two'or three hours later she fell as she was entering the Drake Hotel Bar, referred to as Drabar. She assigned as the cause of her fall a deposit of vomit covering an area two feet square in front of the'doorway and on the entranceway.

She described the mishap as follows:

“ * * * I went on across the street and started into the Drabar. I got to the door and took one step and started to raise the other'foot to go on in and right then I did a split and fell right there’ in the door. When -I got up I was'all wet-with .something and my leg and my arm hurt, and my hip was hurting, and my clothes were a mess where I fell into this stuff.”

She said that although she had looked down when she stepped onto1 the entrance-way she could not see the slime because the lights in the entranceway were out, little light came through the opened door from the dimly lit interior, and the light from the street light across the street was shaded by an awning over the entranceway.

The entranceway was an alcove about three or fou-r feet wide extending sixteen feet across the front of the Drabar. The surface was described as a “marble-like substance * * * real slick.” Its level was about one and one-half inches above the sidewalk.

After falling,, appellee was assisted into the Drabar. Appellants’ manager was called. When advised as to what had happened, according to appellee, he called an employee and said, “I told you half an hour ago to clean that stuff' up.”

Appellee urges that appellants are liable under a double-barrel theory. It is insisted that appellants -failed to use ordinary care in the illumination of their entranceway and that they knew or should have known of the deposit.

Appellants contend that appellee’s evidence was insufficient on which to submit the case to the jury. The court instructed the jury that it was the duty of the appellants, as owner and operator of the bar, to keep the premises in a reasonably safe condition and to usé ordinary care to provide appellee, as a guest thereof, with a properly lighted entranceway, free of vomit, and that if they failed to do either of these • things within a reasonable time after they knew, or should have known, of such failure, and if such failure was the direct and proximate cause of appellee’s injuries, then it should find for the appellee, as it did.It is not contended that the rule stated in the instruction is incorrect."

Appellee was entering appellants’ place of business..ostensibly for a purpose directly connected with their business and was an invitee. Kentucky & West Virginia Power Co. v. Stacy, 291 Ky. 325, 164 S.W. 2d 537, 170 A.L.R. 1; Scuddy Coal Company v. Couch, Ky., 274 S.W.2d 388. The owner or occupant of the premises owes a duty to an invitee to use ordinary care to have the premises in a reasonably safe condition. Winebarger v. Fee, 305 Ky. 814, 205 S.W.2d 1010; Standard Oil Company v. Hagan, 309 Ky. 767, 218 S.W.2d 969. This rule applies to entranceways. Bennett v. Railroad Company, 102 U.S. 577, 26 L. Ed. 235; Great Atlantic & Pacific Tea Company v. McLravy, 6 CCA, 71 F.2d 396 (outside vestibule); Belzer v. Sears, Roebuck & Co., Mo.App., 76 S.W.2d 701 (entrance steps). When an unsafe condition of the premises is caused by a third person, the plaintiff must show that the defendant property owner knew, or with reasonable care could have known, of the unsafe condition in time to have prevented the mishap. Louisville & N. R. Co. v. O’Brien, 163 Ky. 538, 174 S.W. 31; Kroger Grocery & Baking Company v. Spillman, 279 Ky. 366, 130 S.W.2d 786; Bosler v. Steiden Stores, 297 Ky. 17, 178 S.W.2d 839; Lane v. Cardwell, Ky., 306 S.W.2d 290, 61 A.L.R.2d 202. These cases fully sustain the correctness of the instruction given.

Appellants’ argument concerning the insufficiency of the evidence does not point out any single fact which appellee failed to prove in order to establish a casé under the rule stated. Appellants’ attack is directed at the quality of the proof rather than to any failure of it. It is summed up in this statement from their brief, to-wit: “It is incredible to suppose or imagine that vomit would be left completely blocking the outside entrance to an operating business for a half hour’s time!” However incredible it might seem to appellants or their counsel, the situation described does not seem too incredible, nor apparently did it seem so to the jury or the trial judge. The evidence was sufficient to take the case to the jury.

As to the argument that the appellee was contributorily negligent, the testimony for the appellants was in conflict with the testimony given in behalf of appellee. In substance, the proof of appellants was to the effect that the entranceway was well lighted, and all knowledge of the deposit was denied. . Their testimony was also to the effect that appellee was so drunk that she could not have seen a deposit and thus was contributorily negligent.

The evidence was conflicting on the issue of contributory negligence, and it was submitted to the jury under a proper instruction. In such case, this Court will not usurp the prerogative of the jury to believe a witness or set of witnesses, as opposed to another set of witnesses, and will not disturb the jury’s verdict. Stewart v. Sizemore, Ky., 306 S.W.2d 821; Fields v. Baker, Ky., 329 S.W.2d 376.

The final contention made is that the jury should not have been instructed on permanent injury. Dr. Harvey Chenault, physician and surgeon, whose qualifications were admitted, testified that he performed an operation on appellee to correct a ruptured intervertebral disc at the lumbo-sacral area on the left side. In response to a question as to the percentage of permanent disability, he said, “I think that ten to fifteen per cent disability to the body as a whole is a reasonable one.” Appellants attack this statement as a guess and insist that it is not positive and satisfactory evidence and that it suggests only a possibility or probability of permanent injury.

First, the statement “I think” is tantamount to saying “in my opinion.” There is no method of determining the exact degree of such injury, and the opinion of a qualified physician and surgeon is proper evidence thereof. Just prior to the statement as to percentage of disability, the witness had testified that appellee had a permanent disability as a result of her injury. H. & S. Theatres Co. v. Hampton, 300 Ky. 677, 190 S.W.Zd 39, is not in point, since the doctor there gave no positive statement. There is no merit in appellants’ contention. It should be noted that appellants do not argue that the damages are excessive, but content themselves with arguing that the giving of an instruction on oermanent injury was unwarranted.

Judgment affirmed.


author: CLAY, Commissioner.

text:
    Ruth BROWN, Appellant, v. Betty CUNNINGHAM et al., Appellees.
    Court of Appeals of Kentucky.
    May 1, 1962.
    Edwin Cohen, Louisville, for appellant.
    William Lehnig, Walter R. King, Carl K. Helman, Louisville, for appellees.
   CLAY, Commissioner.

Plaintiff appellant choked on something while eating a meal at a restaurant. In a suit for damages against the owner and a distributor of one of the items on the menu, the circuit judge granted summary judgment for the defendants.

One of the foods being consumed was a fish filet. The theory of appellant’s case is that this filet, supposedly boneless, contained a fish bone and was therefore not reasonably fit for human consumption. The substance of what appellant could prove on a trial was disclosed by pretrial depositions.

Appellant was unable to state what caused her to choke. She frankly admitted it could have been one of the foods other than the filet. She did not testify that a fish bone or a foreign substance in any of the food caused her distress.

She was examined at a hospital, which included x-ray observation. After a thorough and complete examination, the doctor could find no substance in her throat. He stated: “I assume that if there was anything down there the most likely thing would be a fish bone.” (Our emphasis) However, he testified there was no evidence of a fish bone and that any one of a number of things could have been caught in her throat.

It is unnecessary for us to consider the interesting question of whether or not, had appellant been able to prove that she choked on a fish bone while eating fish, the restaurant owner could be held liable for damages. See Bryer v. Rath Packing. Co., 221 Md. 105, 156 A.2d 442, 77 A.L.R.2d 1. Her case breaks down before we reach that question.

Appellant could offer no proof of substance that the cause of her choking was either a fish bone or a foreign substance. Her testimony and that of the doctor constituted no more than pure speculation concerning the cause of her discomfort. The mere possibility of a tortious injury was not enough to warrant a trial. See Rutherford v. Modern Bakery, Ky., 310 S.W.2d 274.

The judgment is affirmed.


author: STANLEY, Commissioner.

text:
    Nadine BRUMMITT, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 1, 1962.

      J. C. Helton, Grant F. Knuckles, Pine-ville, for appellant.
    John B. Breckinridge, Atty. Gen., Joe Nagle, Asst. Atty. Gen., Frankfort, for appellee.
   STANLEY, Commissioner.

Appellant, Nadine Brummitt, was indicted for deserting her three children under conditions defined in KRS 435.240. The trial court directed an acquittal in relation to two of the children and submitted the case to the jury as to the defendant’s son, Jerry Wayne Brummitt. She was found guilty and her punishment fixed at imprisonment in the penitentiary for one year.

The statute, KRS 435.240(1), reads:

“The parent of any child residing in this state who leaves, deserts or abandons a child under the age of sixteen years, leaving the child in destitute or indigent circumstances and without making proper provisions for the board, clothing, education and prop- ' er care of the child in a manner suitable to the condition and station in life of the parent and the child * * * shall be confined in the penitentiary for not less than one nor more than five years.”

The appellant and Rufus Brummitt were married September 30, 1950. She was then about sixteen years old and he about forty-eight. The child, Jerry, was born about four months afterward. He was the son of a former husband, Jess Forrester. The two other children, girls, were born of the union of Nadine and Rufus. Jerry was kept and supported by Brummitt along with his own two children. At the time the defendant left home, as will shortly be described, Jerry was eight or nine years old, and the youngest child was about two.

This appears to be our first case of conviction of a mother. But the statute makes no distinction between a father and mother. Unusual also is the question of the relation of a stepfather with respect to the exoneration of criminal responsibility of a mother under the circumstances.

The statute was designed to protect children of tender years from the violation of parental legal obligations and, in part, to punish parents who refuse to discharge their natural duties. 39 Am.Jur., Parent and Child, §§ 103, 112; Ragsdale v. Commonwealth, 195 Ky. 750, 243 S.W. 1056; Brock v. Commonwealth, 206 Ky. 621, 268 S.W. 315; Commonwealth v. Kirk, 212 Ky. 646, 279 S.W. 1091, 44 A.L.R. 816. The interpretation of the statute is that although a child was abandoned by a father, he is not liable if the child or his mother had independent and sufficient means of support, but that there is liability and guilt even though the child is being provided for or is receiving support from sources other than a parent. West v. Commonwealth, 194 Ky. 536, 240 S.W. 52; Webb v. Commonwealth, 237 Ky. 141, 35 S.W.2d 14; Black v. Commonwealth, 259 Ky. 169, 82 S.W.2d 321; Gee v. Commonwealth, 263 Ky. 808, 94 S.W.2d 17; Cox v. Commonwealth, 280 Ky. 94, 132 S.W.2d 739, 131 A.L.R. 478; Hodges v. Commonwealth, Ky., 269 S.W.2d 280. ■

The trial court ruled that as the two girls had been taken care of by their father, the defendant was not guilty of deserting them, hut that the stepfather should not be regarded the same as a natural father. The appellant maintains this was error and that she was entitled to acquittance of the charge of deserting her son, Jerry. So we have the question as to the category of a stepfather in our construction of the statute.

We have held that desertion by an adoptive father is within the terms of the statute as the law imposes upon him the responsibilities of a natural father. Commonwealth v. Kirk, 212 Ky. 646, 279 S.W. 1091, 44 A.L.R. 816. The word “parent” commonly means a father or mother by blood, and it is generally recognized that a stepfather, as such, is under no legal obligation to support the child of his wife by a former husband. But if a stepfather voluntarily takes her child into his family and as a member of his household, he places himself in loco parentis and assumes an obligation to maintain and support the child if he has no income of his own. The relationship is substantially the same as of a parent and child. 39 Am.Jur., Parent and Child, §§ 61, 62; 67 C.J.S. Parent and Child §§ 79, 80; Burba v. Richardson, 14 Ky. Law Rep. 233; Dixon v. Hosick, 101 Ky. 231, 41 S.W. 282, 19 Ky. Law Rep. 387; Cashen v. Riney, 239 Ky. 779, 40 S.W.2d 339; Rudd v. Fineberg’s Trustee, 277 Ky. 505, 126 S.W.2d 1102. We are not concerned in this case expressly or definitely with the absolute civil duty of a stepfather or the reciprocal right of a stepchild to his support. We are only concerned with the question of whether a deserting mother could reasonably expect that her child’s existing care and support would be continued and not-be cast upon others who might care for the child as a matter of morality or charity. Cf. Lincks v. Commonwealth, 226 Ky. 370, 10 S.W.2d 1112. Here, the stepfather had given the baby his name of Brummitt arid had received and accepted the child into his home and maintained him in the same way he did the other children. He completely assumed a relation in loco parentis to the boy, and, so far as concerns this case, should be regarded as the boy’s own father.

We look to the facts.

Rufus Brummitt worked in the mines at Molus as a coal loader. He testified that on a Saturday in September, 1959, his wife took his pay check to buy groceries. When he next heard from her, two or three months afterward, she was in Chicago. He kept the three children at home, doing the best he could for them. He had 75 pounds or “three stands” of lard, four 25-pound sacks of beans and “plenty of canned stuff.” The mother had made no arrangements for anybody to feed or care for the children. He laid off from work for two weeks to look after them. About two months after the mother abandoned her family, Jerry was taken by his grandmother (his mother’s mother), and the two younger children were taken by Brummitt’s sister. She had been caring for them up to the time of their mother’s trial. There was corroborative evidence.

While the question of submission of the case to the jury depends upon the Commonwealth’s evidence, it is fair to the defendant to give a résumé of her story. She had asked Rufus for a divorce and custody of the children, and he replied that he would “see me dead first.” She then told him she was going to leave. She wrote her mother, who lived in Harlan, that she was going to Chicago to get a job and asked her to take care of the children and she would send her $15 or $20 a week. Her mother testified that she went for the children, but Rufus would not let her have them. However, three days later he brought them to her home, but it does not appear that they stayed there. Nadine had sent money to her mother for Jerry’s care.

It was at the close of the Commonwealth’s evidence that the trial court dismissed the charge as to the two little girls upon the ground that they had not been left “in destitute or indigent circumstances,” as the statute has been construed, for they were left with their father, who was able to provide financial support.

We are of opinion, as above suggested, that the court’s only reason for submitting the case as to Jerry is erroneous, namely, that he was not left with a parent. The question arises whether the Commonwealth’s evidence established the defendant’s criminal responsibility notwithstanding. The same question would apply in regard to the two younger children, but as the defendant was acquitted on the charge of their desertion, it cannot be considered.

Our previous cases have all related to and emphasized the element of destitution of a deserted child as being only a financial condition. Little has been said regarding the other element of the crime. That cannot be ignored. Having in mind the objectives of the statute, we conclude that the term “in destitute or indigent circumstances” is not restricted to money matters.

The word “destitute” certainly refers to being in need of money, as docs indigent (meaning poverty), but the word also has the general meaning of “bereft or not in possession of something necessary or desirable; deficient; lacking; devoid; not possessing the necessities of life.” Webster’s International Dictionary. So the statute comprehends more than merely destitute of financial resources. It couples with the word the condition, “without making proper provisions for the board, clothing, education and proper care of the child.” Could it be said that if a mother deserted or left alone a baby who might have a fortune of its own that she should go acquit? Here we have an eight-year-old boy left with his stepfather, who was a mine laborer and dependent wholly upon his daily wages for a living. As the Assistant Attorney General suggests in his brief, the boy could not eat lard or the beans out of the sack. He could not prepare his own meals or look after his clothing. He needed a home with the natural and emotional care of his mother. His health and general welfare required a mother’s care. Training is a feature regarded in child custody cases. Without these things the boy was not being properly cared for, which is the contemplation of the statute. Gee v. Commonwealth, 263 Ky. 808, 94 S.W.2d 17. We are of opinion that the evidence authorized the submission of the question of the defendant’s guilt to the jury.

However, we are constrained to reverse the judgment because of the misconduct on the part of the Commonwealth’s Attorney in his opening statement of the case to the jury. The court overruled defendant’s objections to the following statements :

“She couldn’t be found until she and Hedgel moved back into Bell County. She wasn’t divorced. Mr. Brummitt was served with notice of divorce suit in October of this year, and a man of the name of ‘Honey Bell’ Saylor went to Bell County and found her and Hedgel Saylor living together in July.”
“She has been evading process of the law since March of the year before, and that is the reason this case hasn’t come up for trial until now. She hasn’t been in the State of Kentucky and has been dodging process and was only apprehended in July.”
“Things will come out in this evidence — I’m going to show she left her own child, and Mr. Brummitt’s. I will prove by him, even when she was home, he did the cooking and even washed and cooked for the children and even for her. If you find from this evidence the facts are what I have told you, she ran off and left her child- — we don’t care if you base it entirely on the one child, I think you ought to hand her a pretty stiff sentence. I think the evidence calls for that kind of verdict.”

It is readily apparent that these statements were unwarranted and highly prejudicial. Poison was added to the statement that the defendant was found living with another man in Bell County when that man’s wife was called to the stand, and in answer to the question whether she knew Nadine Brummitt said, “I just knew her after she took my husband.” The court overruled the defendant’s motion to discharge the jury because of this statement.

As written in Lickliter v. Commonwealth, 249 Ky. 95, 60 S.W.2d 355, “The only legitimate purpose of an opening statement is so to explain to the jury the issue they are to try that they may understand the bearing of the evidence to be introduced. There is no occasion and no excuse for attempting to influence the jury in advance by improper statements as to evidence which counsel knows he cannot prove or will not be permitted to introduce.” We reversed the judgment of conviction because the “poison of prejudice with which the minds of the jury had been innoculated in the beginning of the trial could not be and was not altogether removed” by the court’s admonition at the end of the trial that the jury should not consider the statement. In the present case there was no admonition. See also Steele v. Commonwealth, 252 Ky. 730, 68 S.W.2d 6, 7; Turner v. Commonwealth, Ky., 240 S.W.2d 80.

The judgment is

Reversed.


text:
    Richard SIMPSON, Respondent, v. TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, a Corporation, Appellant.
    No. 48687.
    Supreme Court of Missouri, Division No. 2.
    May 14, 1962.
    Robert C. Ely, St. Louis, for appellant.
    Eugene W. Wines, St. Louis, William L. Mason, Jr., St. Louis, for respondent.
   PER CURIAM.

Respondent claimed $75,000 as damages for alleged personal injuries which he averred he received when an automobile in which he claimed he was a passenger was struck by appellant’s unattended flatcar. We shall hereinafter refer to the parties as they were designated in the trial court. After the jury found for defendant, plaintiff was granted a new trial on the grounds that the trial court erroneously admitted and refused to strike the testimony of defendant’s witness Carpenter. The question on this appeal is whether the trial court erred in admitting that testimony.

It was defendant’s trial theory that plaintiff and the three other persons who allegedly were in the automobile at the time it was struck had staged a fake accident; that the automobile in question was stopped on a railroad track and was struck at a time when no one was in it; that plaintiff and his companions or others with their knowledge caused and permitted defendant’s heavily loaded flatcar to leave the place on an industrial siding where it had been spotted and to roll downgrade into the side of the automobile; and that thereafter plaintiff and two of his companions reentered the automobile (the driver claimed to have been thrown from the automobile and he remained on the ground) and were there when the police arrived.

There was evidence, considered favorably from the standpoint of defendant, justifying this statement. In the afternoon of July 15, 1959, defendant spotted a loaded flatcar on a spur track which served an industrial plant located a short distance south of Penrose Street in St. Louis. That track ran from the plant downgrade north across Penrose. Members of the train crew spotted the flatcar about 130 feet south of Penrose and placed a large wooden block and a railroad spike under the wheels of the car and placed a derail on top of one of the rails at a point about 10 or 15 feet north of the flatcar’s north end. A derail is a heavy metal safety device which automatically derails and thereby stops a railroad car when the flange of one of its wheels runs against the derail.

During the evening of July 15 plaintiff, who at the time was an off-duty switch-man employed by another railroad, went to Floyd Allen’s tavern on North Fourteenth. About nine o’clock plaintiff and Allen went to Clemens’ place located at Penrose and Grove. There they met and talked with Clemens and one Jett and drank beer. About midnight those four went to a restaurant for awhile and departed in Clemens’ car intending to return to where Allen’s automobile was parked. Clemens drove his automobile east on Penrose. Defendant’s unattended flatcar, traveling about eight miles per hour and weighing as loaded more than 135,000 pounds, struck the automobile’s right side and shoved it north-wardly down the track for some 67 feet where the automobile struck a bumping post (which was at the end of an adjoining stub track) and came to rest west of the track. (The flatcar was “picked up” by a subsequently pursuing engine miles farther on.) No authorized person caused the flatcar to move from its stationary position on the siding or removed the derail. The automobile was stationary on the railroad track when struck, contrary to the testimony of plaintiff and of two of the other occupants of the automobile (the fourth did not testify) to the effect that the automobile was traveling from 15 to 25 m. p. h. when struck.

Plaintiff’s evidence was that the force of the collision caused the left front door to open and that the driver, Clemens, was thrown out and that plaintiff and the other ■ two remained in the automobile during the time it was pushed northwardly and until a police officer arrived some five to ten minutes later.

The police department received a call at 2:01 a. m. on July 16 advising it of the collision. The caller refused to identify himself as often happens when accidents are reported by telephone. The first police officer to arrive reached the accident scene at 2:05 a. m. He found Clemens seated on the north sidewalk of Penrose just west of the track in question. He found the automobile where it had stopped west of the track with its left front door open. No one was in the driver’s seat, one was seated in the 'right front seat, and plaintiff and another were in the back seat. The officer saw no other person at the scene when he arrived. None of the four men, who according to plaintiff’s evidence were in the automobile at the time it was struck, had the appearance of having been in an accident in that none had any dirt or dust on his clothing, no one’s hair was mussed, none bore external marks of injury. Clemens, who allegedly was thrown out, presumably onto the track in front of the moving vehicles, had no visible cuts or scratches, nor was he apparently bleeding (contrary to plaintiff’s witness Allen who testified that he saw bruises, scratches and cuts on Clemens and saw blood running from his nose and mouth). There was medical testimony that it was unlikely that all four occupants of the automobile struck by the flatcar in the manner described would have escaped without a visible scratch.

Plaintiff and Allen testified that they knew that Clemens had been thrown out but they remained seated with the other occupant in the automobile for at least four or five minutes and made no attempt to help or assist or inquire about their companion although they were conscious at all times and although when the police officer arrived they left the automobile under their own power.

The area surrounding the accident point was exclusively an industrial district.

. Over plaintiff’s objection, defendant’s witness, Ernest Carpenter, testified that he was a night watchman at a carton company located on the north side of Penrose some 300 to 400 feet east of the spur track; that about two o’clock in the morning of July 16, 1959, he heard a loud crash and a screeching noise; that he went from the office into the factory and checked it; that he then walked to the south door which opened onto a parking lot which abutted the north side of Penrose; that he saw three men walking fast in the middle of the street going west; that he observed them turn right and go north onto the railroad track in question and out of his view; that as the men passed he heard one of them say, “Hurry, hurry.” Another said, “What’s going on out there ? ” Another, “Gd-, it is all your fault,” and then one of them said, “How in the hell did I know what that * * About five minutes after they had passed, Carpenter heard the sirens of an approaching police car. He thought probably it was three or four minutes from the time he heard the crash until he saw the men walk by the factory. It was a fair inference from his testimony that the noise of the crash which he said came from outside the factory was the noise made when the flatcar struck the automobile.

As heretofore noted, defendant’s theory was that the accident was staged and faked and that no one was in the automobile when it was struck. Defendant submitted an instruction authorizing a verdict for it if the jury found that the automobile was placed at the crossing, that the flatcar was then permitted to roll free, and that plaintiff was not in the automobile when it was struck and carried down the track. There is no contention that defendant’s evidence was not sufficient to support that submission. As noted, plaintiff’s contention is that the trial court erred in admitting and refusing to strike the above testimony of witness Carpenter.

Defendant contends the trial court did not err in admitting that testimony because it was a relevant and material circumstance for the jury’s consideration in determining whether the “accident” was staged or faked. Plaintiff contends that. the trial court erred because the testimony had no probative value whatever in that none of the three men in question were identified as one of the four men involved in the accident. It is apparent that the sole question for decision is whether the facts of the presence, actions, and statements of the three men were circumstantially relevant and material to the issue submitted by defendant. We shall assume, agreeably to plaintiff’s theory, that unless Carpenter’s testimony and the reasonable inferences therefrom, considered in the light of and together with other evidence and the permissible inferences therefrom,' justified an inference that the three men whom Carpenter saw and heard were some of the men allegedly in the automobile at the time it was struck, his testimony had no probative value and was erroneously admitted; i. e., that Carpenter’s testimony could be relevant and material only on the issue of identification.

To determine whether there was evidence sufficient to permit a jury reasonably to find that the three men were some of the four who claimed to have -been in the automobile at the time it was struck, we take into consideration and account the fact that there was evidence which tended to prove these facts and justified these inferences : that the witness Carpenter sáw and heard the three men within a very few minutes after the collision of the flatcar and the automobile; that the time when he saw the men was about two in the morning and that the neighborhood was exclusively industrial; that the three men were walking fast in the street which, together with their statements, indicated that they were excited about something; that they turned off a paved street onto a spur railway track and proceeded in the direction of the place where the automobile had come to rest; that if the three men who turned off a paved street and traveled northwardly along the railroad track were not involved in the accident, they must have seen Clemens, the driver of the damaged automobile, as he lay or sat near the west rail of the track at the north curb of Penrose and if they proceeded northwardly along the track they would have come upon the battered automobile which, according to plaintiff, was then occupied by three persons; that it was unlikely that three strangers to the occurrence would have passed by an injured man who was at the very place they turned north without taking notice of him and without remaining with him until assistance arrived or without inquiring or investigating and discovering some of the circumstances which would lead them to the three men in the automobile; that neither the plaintiff nor two of the other occupants of the automobile who testified made any statement at the trial indicating that they saw three men turn north at or travel north on the railroad track during the time the driver was sitting or lying at the north curb of Penrose or during the four to seven minutes that the plaintiff and two of the others remained in the automobile; that the first police officer who arrived at the accident scene within a very few minutes after the men turned onto the track saw no one other than the four “accident men” in the area.

The foregoing facts and circumstances and reasonable inferences noted should now be viewed in connection with and in the light of these further facts which the evidence considered favorably from the standpoint of defendant tended to prove and which justified these further inferences: that the automobile in which the men claimed they were at the time of the collision was in fact stationary across the railroad track when struck, which fact was contrary to the sworn testimony of plaintiff and two of his companions; that a reasonable inference therefrom was that the four were not in the car if the car was in fact stationary and not, as plaintiff’s evidence showed, suddenly struck as it was proceeding at 10 to 25 m. p. h. across the track; that none of the four appeared to have been injured in that they bore no external signs of injury and that it was unlikely that four could have experienced such a collision (the driver having been thrown out of the automobile) without external evidences of injury; that the plaintiff and two of his companions remained in the automobile for five to ten minutes until a police officer arrived, even though plaintiff and his companions then were able to leave the automobile under their own power and even though they knew that their companion Clemens had been thrown out of the car apparently onto the track in front of an automobile being pushed sideways northwardly by a heavily loaded flatcar and that it was likely that he had been seriously injured thereby; and the reasonable inference therefrom was that it was unnatural and unlikely that plaintiff and the other two would fail to go to the assistance or to make inquiry concerning the condition of their companion Clemens; and, finally, that someone other than an authorized agent of the railroad removed a wedge and a railroad spike holding the loaded flatcar in place on the side track and removed a derail, which acts permitted and caused the flatcar to roll downgrade northwardly at the very time the automobile occupied a position across the rails of the track.

We are of the opinion that when the testimony of the witness Carpenter as to the presence, actions, and words of the three men is considered in the light of the evidence and the permissible inferences we have detailed above, his testimony was circumstantially relevant and material because it was sufficient to permit a reasonable inference by a jury that the three men were three of the four allegedly in the automobile at the time it was struck. The words spoken by the three were not offered for the purpose of proving the truth of those statements; the jury reasonably could have found that the statements considered as a whole and uttered under the conditions noted, tended to show that the men were excited about something and, if so, the fact that those statements were made constituted a relevant circumstance to be considered, along with all the others, on the identity issue. It is our view, therefore, that Carpenter’s testimony did have some probative value and that the trial court did not err in admitting that evidence.

We have not been cited to, nor have we found, a case similar to the present one. What was said in Superior Ice & Coal Co. v. Belger Cartage Service, Inc., Mo., 337 S.W.2d 897, 904, 905, is in some respects apropos. The issue in that case was whether a fire in an abandoned building belonging to plaintiff had been caused by the acts or omissions of employees of defendant who were engaged in removing equipment from the building and, in so doing, were using cutting torches. Defendant adduced evidence tending to show that its employees were not negligent in the manner in which they had removed equipment and the court admitted other evidence to the effect that the fire could have resulted from the acts of trespassers, i. e., from the actions of so-called “gandies” who were in the habit of drinking wine and whiskey in the premises and building fires in the main building and in a nearby shed. This court there said, as to the admissibility of such evidence : “To be admissible it was sufficient to show that it was not too remote and was logically relevant to the issue. It was not necessary for the evidence to be of sufficient substantiality that it might be described as ‘submissible.’ We have heretofore said that ‘the admissibility of circumstantial evidence does not depend upon its sufficiency as standing alone to take the case to the jury. Admissibility and sufficiency are separate and distinct.’ Look v. French, 346 Mo. 972, 144 S.W.2d 128, 131. * * * Since there was evidence that they were in the building every day for three weeks prior to the fire it would certainly be a reasonable inference from that proof that they were present on the day the building burned. We also think that evidence tending to show that these ‘gandies’ drank wine and whiskey on the premises and built fires in the main building and in the nearby shed was logically relevant on the issue as to whether the fire was caused by the conduct of those trespassers.”

The trial court may have exercised its discretion in admitting the testimony in question but, having admitted it, whether it was error to have done so is here a question of law. As we have held, the trial court did not err in admitting this evidence and consequently could not correctly grant plaintiff a new trial on the ground that it did err.

The order granting plaintiff a new trial is set aside and the case is remanded with directions to reinstate defendant’s verdict.