author: BATEMAN, Justice.

text:
    Earl E. LUBY et al., Appellants, v. The CITY OF DALLAS, Appellee.
    No. 16577.
    Court of Civil Appeals of Texas. Dallas.
    Sept. 24, 1965.
    Rehearing Denied Nov. 19, 1965.

      William S. Campbell, Dallas, for appellants.
    N. Alex Bickley, City Atty., and Kenneth C. Dippel, Asst. City Atty., Dallas, for ap-pellee.
   BATEMAN, Justice.

The City of Dallas, having previously purchased the fee simple title t0‘ certain real property needed in connection with the improvement of Griffin Street in downtown Dallas, took by these condemnation proceedings the leasehold interest of appellants in the property. Appellants occupied the property under a lease which would by its terms expire approximately 33 months after the date of taking, paying $700 per month rent. The special commissioners awarded appellants $40,000, which was paid into court by the City and then withdrawn by appellants, pursuant to Vernon’s Ann.Civ. St., Art. 3268, prior to the trial in the county court. Both sides appealed from the award by filing objections thereto. The jury found the value of the leasehold to be $23,100; whereupon the court awarded the City of Dallas the leasehold interest in the land and judgment against appellants for $16,900, the difference between the $40,000 received by them and the $23,100 verdict. We affirm. The appellants’ 36 points of error are so interwoven that we shall discuss the contentions raised by them rather than each of the points of error separately.

A great many of the points challenge the regularity of the condemnation proceedings occurring prior to the withdrawal of the $40,000 by the appellants. Several of them attack the Statement in Condemnation filed by the City because of the insufficiency of the description of the land being condemned, the failure of the City to state properly the names of the known owners of interests therein or the purpose for which the land will be used, concerning which there was a discrepancy between the Statement and the resolutions of the City Council; the failure to include in the proceedings certain necessary parties; and the failure of the Statement to contain all the information required by Art. 3264, § 1, V.A. C.S.

The appellants, by their withdrawal of the $40,000 paid into the registry of the court by the City, must be held as a matter of law to have impliedly consented to the taking of their property. Only the question of adequate compensation remained to be determined. This has been the rule uniformly announced by our courts since City of San Antonio v. Grandjean (1897), 91 Tex. 430, 41 S.W. 477, 44 S.W. 476; the latest expression of our Supreme Court on the subject being in State of Texas v. Jackson, Tex.1965, 388 S.W.2d 924. In a footnote to that opinion is cited the opinion of this court in Crockett v. Housing Authority of City of Dallas, Tex.Civ.App., 274 S.W.2d 187, no wr. hist.

The foregoing rule is binding on appellants notwithstanding the fact that they sought to condition their withdrawal of the $40,000 by a recitation that the withdrawal was without prejudice to certain objections and exceptions. Having withdrawn the money deposited, appellants are precluded from contesting the legality of the proceedings establishing the City’s right to take the property.

Appellants attack in various ways the legality of the condemnation proceedings and seek a reversal of the judgment because the City purchased from the fee owner, and took from appellants, more land than was necessary for the declared purpose of extending Griffin Street and sold the unneeded surplus to a private corporation. We see no merit in these points. In the first place, the appellants must be held to have waived any irregularity in this respect by their withdrawal of the $40,000. City of San Antonio v. Grandjean, supra, and State of Texas v. Jackson, supra. Morover, in the second place, an examination of the facts and the applicable authorities will demonstrate that there was nothing illegal or wrongful in the transactions in question.

Appellants say that the court erred in even trying the case and submitting it to the jury because of this variance between the resolutions of the City Council, which authorized the appropriation of appellants’ leasehold estate for the purpose of “extending” Griffin Street, and the Statement in Condemnation, which states that such estate is to be condemned for the purposes of “the widening and improvement of public streets and more particularly the extension of Griffin Street.” Appellants concede that the statutes and appellee’s charter authorize the appropriation of privately owned property “in order to open, widen, narrow, straighten or extend any public street, avenue or alley within the City limits,” but argue that when the City Council (the governing body of the City) declared a public necessity for the mere “extension” of Griffin Street that meant continuing the existing street in a straight line and with the same width, and that there existed no authority, and no declaration by the Council of a public necessity, for the taking of appellants’ property for the purpose of widening or changing the course of that street. We see no merit in this contention. The appellants were adequately informed by the Statement in Condemnation that the City was seeking to take all of their leasehold interest in the entire tract for the purpose of extending, improving and widening Griffin Street. Appellants appeared at the commissioners’ hearing, objected to the award made by them, not on the grounds here under discussion, but on other matters touching only upon the value of the leasehold; withdrew the deposit of the award and sought to obtain a larger award by the jury. They' amended their objections and exceptions to the award twice, and in the last amendment, which was filed March 16, 1964, and which must be held to have supplanted the previous objections and exceptions under Rule 65, Vernon’s Texas R.C.P., the only objection made was that the award of the commissioners was inadequate. We therefore hold that appellants waived their right, if any they had, to complain of this matter of variance by not pleading it.

It is true that when the City filed its motion for a partial summary judgment under Rule 166-A, T.R.C.P., wherein it sought adjudication of its power, right and authority to condemn appellants’ property and to limit the controversy to the proper amount to be paid to appellants, the latter, in a “Controverting Affidavit” hinted broadly at the matter by suggesting that there were material fact issues on the question of whether the City had properly exercised its power to condemn. The transcript also contains a motion by appellants to dismiss the City’s appeal from the commissioners’ award, in which the question was squarely raised, but there is nothing in the transcript to show that this motion was called to the attention of the court. Therefore, it is our holding, based upon our examination of the record as a whole, that (1) the point was never actually presented to the trial court for a ruling and cannot now be raised for the first time on appeal, and (2) the point is, under all the circumstances of this case, without substance.

We think the trial court was correct in granting the partial summary judgment. The “Controverting Affidavit” of appellants’ attorney, mentioned above, raises no actual fact issues. Its eight pages are devoted primarily to complaint that the City, in purchasing the fee without notice to appellants, probably adversely affected the market value of appellants’ leasehold, and that the City, when it offered appellants $100 for their leasehold, did not negotiate with them in good faith. These were not controverted issues of fact; the facts were undisputed, and the legal consequences thereof were not raised by the pleadings.

The tract was owned by one Kain and had a frontage of about 50 feet on Main Street. It was about 100 feet deep and contained about 5,000 square feet. The brick building on it, which was leased to appellants, and in which they operated a cafeteria, contained about 3,550 square feet on the ground floor. The west wall of this building was a common wall with the adjoining building. After using the part actually needed for the extension, widening and improvement of Griffin Street, only a small triangle containing about 1,560 square feet remained, which would be wholly unsuitable for the operation of a cafeteria. Moreover, the destruction of the building occupied by appellants would remove some of the support of the common wall and would necessitate certain repairs thereto. After razing the building and setting aside sufficient land for the extension and widening of the street, it used the surplus long enough to repair and strengthen the common wall, and then sold such surplus.

It is well settled that a city may under these circumstances condemn the quantity of land which its governing body in good faith decides should be condemned for a certain purpose, and that in the absence of some constitutional or statutory limitation “the discretion of the condemnor is absolute as to what land it may condemn for its purposes, and the courts will not review its discretion in this respect, except where it is made to appear the condemnor has acted in bad faith, or has acted arbitrarily, capriciously, or fraudulently, in selecting the particular land for its purpose.” Texas Electric Service v. Lineberry, Tex.Civ.App., 327 S.W.2d 657, 664, wr. dism. See also Housing Authority of City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 130 A.L.R. 1053, holding that “a determination by the condemner of the necessity for acquiring certain property is conclusive in the absence of fraud.” The right of eminent domain exercised here is one delegated to the city by the legislature, and its exercise is a legislative, not a judicial, function. “Those questions rest wholly within the legislative discretion.” West v. Whitehead, Tex.Civ.App., 238 S.W. 976, 978, wr. ref. This record contains nothing to indicate fraud or caprice in the decision to condemn the entire property, and we therefore feel that we have no right to review the decision.

Moreover, the right of the City to sell the unneeded surplus of land acquired is expressly granted by Art. 1203, V.A.C.S.

By their Point No. 13 appellants complain of error in overruling certain special exceptions contained in their “First Supplemental Pleading and Exceptions to the Pleadings of the Petitioner, City of Dallas,” found on pages 78-81 of the transcript. However, we find no order of the court overruling these exceptions, and for that reason the point cannot be considered.

Appellants contend that the Dallas, Texas Corporation, to which the City sold the small triangular strip of land not actually included in the widened and extended Griffin Street, was a necessary party to this suit. We are not favored with any authority or argument in support of this contention, and we have been unable to find any such authority. We know of no purpose that would have been served by making this company a party, and fail to see any harm resulting to appellants by the failure to do so. Hence, this contention is overruled.

It is also contended by appellants that, the City having acquired by purchase the fee simple title to the realty, the City was a necessary party. We do not agree. The fee simple title and the leasehold were two separate estates, each constituting real property. It was necessary for the City to to acquire both estates to accomplish its purpose of improving the street. Having acquired Kain’s fee simple title by private negotiation and deed, and even though it became the lessor by assignment of the lease, no purpose would have been served by making the City a party defendant. As appellants were not injured by the failure to do so, they will not be heard to complain thereof. Halbert v. Upper Neches River Municipal Water Authority, Tex.Civ.App., 367 S.W.2d 879, wr. ref. n. r. e.; Sinclair Pipe Line Co. v. Peters, Tex.Civ.App., 323 S.W.2d 651, 655, no wr. hist.; National Association of Audubon Societies v. Arroyo Colorado Nav. Dist., Tex.Civ.App., 110 S.W.2d 150, no wr. hist. This contention is overruled.

Appellants’ Point of Error No. 15 complains of the exclusion of the testimony of their witness, Robert Beer, “as to the market value of the cafeteria business leasehold property of Luby’s Cafeteria No. 2, under the sole and exclusive use and occupancy as a cafeteria by lessee-defendants.” Point 24 complains of the exclusion of a map used by Beer to show the location, nature, etc. of the property in question, and Point 29 says the court erred in instructing the jury not to consider Beer’s testimony of a market value of $84,400. Points Nos. 25 and 28 assert error in excluding certain schedules showing operational records of appellants’ cafeteria and in instructing appellants, their witnesses and attorney, not to mention, allude to or proffer evidence of sales, income or revenue of said business. Point 32 asserts error in the overruling of appellants’ objections and exceptions to instructions given the jury in the charge. These points are not supported by authorities or argument, and may be considered as abandoned. Rule 418, T.R.C.P.; Young v. Texas & Pacific Ry. Co., Tex.Civ.App., 347 S.W.2d 345, 349, no wr. hist.; Fulton v. Abramson, Tex.Civ.App., 369 S.W.2d 815, 817, no wr. hist. Even if we were to consider these points, however, we would have to overrule them.

We see no merit in appellants’ Points 15, 24, 25, 28 and 29. The witness Beer stated that his estimate of the value of the leasehold was not based on an “empty bare walled building,” but on a “cafeteria successfully operating up until the day it was closed,” and that he took into consideration all that was shown by certain photographs of the interior of the cafeteria while in operation, including the people standing in line, the .tables, chairs, pots, pans,, stoves and all other restaurant facilities shown. It is obvious that the witness based his opinion on an incorrect measure of damages. It is well settled in Texas that when the entire leasehold is taken the measure of damages is the value of the use and occupancy of the leasehold for the remainder of the tenant’s term, plus the value of the right to renew if such right exists, less the agreed rent which the tenant would pay for the use and occupancy, such values to be determined by the usual “willing seller-buyer rule.” State v. Parkey, Tex.Civ.App., 295 S.W.2d 457, 460, wr. ref. n. r. e.; Art. 3265, V.A.C.S.

It is also well settled that in determining such value no consideration should be given to the value of the business of the tenant, or the trade-name thereof, or the profits or losses thereof, or the tenant’s personal property on the premises, or the expense of moving such personal property. These things are held to be immaterial and inadmissible as shedding no light on the value of the real property being condemned. As we said in Herndon v. Housing Authority of City of Dallas, Tex.Civ.App., 261 S.W.2d 221, 223, wr. ref.: “ * * * it is only the real estate which is being taken, not the business. The owner may keep his business and continue to operate it at a different location.” See also Reeves v. City of Dallas, Tex.Civ.App., 195 S.W.2d 575, 581, wr. ref. n. r. e.; State v. Vaughan, Tex.Civ.App., 319 S.W.2d 349, 355, no wr. hist.

The objections and exceptions to the court’s charge merely reiterate many of the contentions raised in the other points of error on appeal. We find no fault with the form or substance of the special issue submitted or the explanatory instructions accompanying same.

By their Points Nos. 16 through 23 the appellants complain of the exclusion of photographs of the property after completion of the widening and extension of Griffin Street, the deed conveying the fee title to appellee, the deed by which appellee sold the unneeded surplus of the land in question, the resolutions of the City Council authorizing the condemnation proceedings, the assignment of the lease by Kain to ap-pellee, the cancelled checks by which appellants paid rent to appellee thereafter, a letter from appellee to appellants concerning the payment of rents, and the Statement in Condemnation. Points 26 and 27 assert error of the trial court in sustaining motions in limine to suppress evidence of the facts in connection with the acquisition by appellee of the fee simple title to the property in question as well as evidence of payment by appellants of rentals to appellee. We have carefully examined all of these points and the authorities and arguments made thereunder and find no merit in any of them. The excluded evidence would have been of no value or assistance to the jury in determining the only issue left remaining in the case, viz., the value of the leasehold taken; hence, there was no error in refusing to admit it. Accordingly, these ten points are overruled.

By their Points 30 and 31 the appellants charge jury misconduct in that the jury arrived at the verdict of $23,100 by multiplying the monthly rental of $700 by 33, the number of months remaining of the lease, producing a total of $23,100, then multiplying that figure by 2, then dividing the product of $46,200 by 2, leaving $23,100 as the value of the leasehold. It appears clearly from the testimony of the jurors, taken at the hearing of appellants’ amended motion for new trial, that they discussed and considered the testimony of the value-witnesses produced by both sides, which ranged from a low of $9,700 to a high of $26,400; also that the jurors did not agree in advance to follow any particular method or formula or to be bound by the result thereof. Two of the jurors suggested returning the figure of $9,700 as the verdict, but the foreman stated that he would not agree to any figure lower than $23,100, which he, not the jury, arrived at by the computation which appellants say constituted misconduct.

This method of reaching a verdict does not constitute such misconduct as would require a reversal unless all the jurors agreed in advance to be bound by the figure thus reached. This is the rule which governs in the case of so-called quotient verdicts, Morgan v. State, Tex.Civ.App., 343 S.W.2d 738, wr. ref. n. r. e., and it is also applicable here.

It is also well settled that jurors are not allowed to preserve or destroy their verdicts by testifying to the mental processes by which they reached the same. This rule was in effect both before and after promulgation of Rule 327, T.R.C.P., which relates to jury misconduct as a ground for new trial. Sproles Motor Freight Lines v. Long, 140 Tex. 494, 168 S.W.2d 642; Barrington v. Duncan, 140 Tex. 510, 169 S.W. 2d 462.

We have considered this matter of misconduct “from the evidence both on the hearing of the motion [for new trial] and the trial of the case and from the record as a whole” and cannot say that it appears therefrom that “injury probably resulted to the complaining party.” Rule 327, T.R. C.P. Nor can we say that the error, if any, “amounted to such a denial of the rights of the appellant(s) as was reasonably calculated to cause and probably did cause the rendition of an improper judgment * * *.” Rule 434, T.R.C.P.

Nor are we persuaded that error actually occurred. While the formula evolved by the jury foreman may at first appear to be awkward and unnecessarily complicated, it was not illogical because the simple effect of it was to say that appellants were deprived for 33 months of a location worth $1,400 per month, or a total of $46,200, for which they were obligated to pay only $700 per month, or a total of $23,100; and that their damages or loss was equivalent to the difference of $23,100. This amount was within the range of values testified to by the expert witnesses, and therefore cannot be said to be without support in the evidence. Accordingly, we overrule Points 30 and 31.

By their Points of Error Nos. 33 through 36 appellants assert in various ways that they should have a new trial because of newly discovered evidence in the form of a contract between the City of Dallas and the owner of property adjacent on both sides to the projected Griffin Street. This contract was offered in evidence at the hearing of appellants’ amended motion for new trial, but was excluded. We cannot overturn the trial court’s exclusion of this evidence unless we can say that that court has exceeded its discretionary powers. Strata Drilling Co. v. St. John, Tex.Civ.App., 272 S.W.2d 753, no wr. hist. We see no evidence in the record to indicate such abuse of discretion.

Moreover, it was essential that the portion of the motion for new trial dealing with the newly discovered evidence be supported by affidavit, Moores v. Wills, 69 Tex. 109, 5 S.W. 675; Marrast v. Smith, Tex.Civ.App., 53 S.W. 707, no wr. hist., and such affidavit must show, not only the attorney’s want of information concerning the evidence in question, but also that the litigant himself was without the information. Russell v. Oliver, 78 Tex. 11, 14 S.W. 264. It is also necessary for a party seeking a new trial on this ground to allege and prove that knowledge of the evidence was acquired after the trial and that the failure to discover and obtain the evidence in time for it to be used at the trial was not due to want of diligence, that the evidence is material and not merely cumulative and that it would probably change the result upon another trial. Krider v. Hempftling, Tex.Civ.App., 137 S.W.2d 83, no wr. hist.; Adams v. Halff, Tex.Civ.App., 24 S.W. 334, no wr. hist.; Parlin & Orendorff Implement Co. v. Chadwick, Tex.Civ.App., 4 S.W.2d 133; Essex v. La Boue, Tex.Civ.App., 223 S.W.2d 35, wr. dism.; Kerrville Bus Co. v. Williams, Tex.Civ.App., 206 S.W.2d 262, wr. ref. n. r. e.; Carnes v. Kay, Tex.Civ.App., 210 S.W.2d 882, no wr. hist.

In the light of these rules, no reversible error is shown. The amended motion for new trial was not supported by affidavit. The testimony offered at the hearing of the motion showed at most some difficulty in locating the City’s file in which the contract was contained; it fell far short of demonstrating concealment thereof by the City.

Appellants had the burden of showing that they did not know of the existence of this evidence prior to the trial, and that their failure to know about it and to produce it at the trial was not due to a lack of diligence on their part. The trial court did not abuse its discretion in holding that the evidence was insufficient to discharge that burden.

Moreover, we have read and carefully studied the contract in question and considered the arguments made to show the materiality thereof, and without unduly lengthening this opinion by reciting the details thereof we affirm the trial court’s implied finding that if a new trial were granted and the contract admitted in evidence the result would probably not be different from the one reached, at the trial.

As no reversible error appears in the record, the judgment appealed from is

Affirmed.


source: Caselaw Access Project

author: TIREY, Justice.

license: Public Domain

text:
    GLENS FALLS INSURANCE COMPANY, Appellant, v. Goldie Mae YARBROUGH et vir, Appellees.
    No. 4417.
    Court of Civil Appeals of Texas. Waco.
    Oct. 7, 1965.
    Rehearing Denied Nov. 18, 1965.

      Ñaman, Howell, Smith & Chase, Louis Muldrow, Waco, for appellant.
    McLaughlin, Clark, Fisher, Gorin & McDonald, George Clark, Waco, for appellees.
   TIREY, Justice.

This is a compensation case and is the second appeal. See 369 S.W.2d 640. Perhaps we should say that in the first appeal Mrs. Yarbrough, joined by her husband, prevailed in a suit to set aside a compromise settlement agreement wherein she alone had signed the purported agreement dated March 31, 1961. The trial court found that since plaintiffs had cashed and received the $300.00 paid to Mrs. Yarbrough and had used the funds, and she and her husband being unable to return same, and since they offered to do equity, that the sum of $300.-00 paid by the insurance company to Mrs. Yarbrough be credited against the recovery of any amount because of the injuries suffered by her. The judgment of the lower court was affirmed by this court on the ground that the husband had not joined in the execution of the settlement agreement, but did not pass upon any other question.

Judgment was rendered in the case at bar on the verdict of the jury, which was favorable to plaintiffs for total and permanent disability on a wage rate of $20.01 per week for a period of 401 weeks. The defendant has appealed. We reverse and remand the judgment of the lower court for reasons hereinafter set forth.

The judgment is assailed on 33 points. Point 1 is:

“The trial court erred in admitting into evidence testimony regarding the execution of a compromise and settlement agreement by the appellee, Mrs. Yarbrough, her suit to set that settlement agreement aside, the allegations of fraud with reference to that suit, the trial of the prior suit and the setting aside of the settlement agreement and in overruling appellant’s objections to such evidence for the reasons stated in appellant’s objections, which were and are: * * *

The appellant set these objections out in detail.

Appellant has grouped points 1 through 26 under one statement and argument and, with reference thereto, it says:

“The above points are grouped and consolidated under a single statement and argument, because of the basic similarity of the points. They deal essentially with the one question of admissibility of certain evidence, and error committed in the presentation of that evidence.
“As previously indicated, this is a compensation case, where the appellee complained of two accidental injuries sustained in the course of her employment. The occurrence of one of the injuries was contested, and the extent and degree of incapacity were contested.”

Pertinent to Point 1 Mrs. Yarbrough testified on direct-examination in part as follows :

“Q. Had you talked to Mr. Parker Naylor, the insurance adjuster about getting compensation?
A. Oh, I sure did; but I hadn’t received it.
Q. You had not gotten it?
A. If I had got some, I wouldn’t be up here today.
* * * * >{« *
Q. All right. Was it your intention at that time and your hope that you could go back to Haven Manor?
A. Well, sure, I wanted to go back to Haven Manor. I’d like to be there today.
Q. Were you getting any compensation at that time?
A. No, sir, I have never received no compensation.
* ‡ * íjí *
Q. Now, from that date, the last time you talked with Mr. Parker Naylor, down to this time, Mrs. Yarbrough, have you received any compensation from this insurance company?
A. No, sir, I haven’t received one dime from them; if I had, I wouldn’t have been up here today, * * *
******
Q. Have you received any compensation from them by the week ?
A. No, sir, I sure haven’t; I haven’t received anything.
* * * * * #
Q. Did they send you any checks while you were in the hospital?
A. No, sir.
Q. Did they send you any checks while you were laid up at home after you got out of the hospital ?
A. No, sir, they haven’t sent me any checks.”

On cross-examination appellant’s counsel developed in question and answer form:

“Q. * * *. Now did I understand you to say Mrs. Yarbrough that you had never gotten a dime from this insurance company?
A. Well, I have never received any compensation by the week or by the month from this company.
Q. Well, but you’re not telling the jury that you have never received a dime from them, are you?
A. Well, I’m just saying that I have never received any compensation insurance, that’s what I’m telling the jury.
Q. Never received any money from this insurance company?
A. I received some money, but it wasn’t compensation insurance, as far as I know it wasn’t.
Q. Well, they did pay you some money ?
A. Yes, they paid me some to pay the doctors and the hospital bill with.
Q. Well, now, didn’t they pay the doctor? Didn’t they pay Dr. Oliver?
A. They sent the checks to me.
Q. All right. But those checks were for Dr. Oliver and for drugs and for Haven Manor, Weren’t they?
A. Yes, sir, they sure were.
Q. And those were paid by the insurance company ? Is that right ?
A. Well, I suppose, because I turned them over to Q. Z. Valentine and he sent them back.
Q. All right. Now separate and apart from that, you’re not telling the jury are you that you and your husband didn’t receive any money?
A. Well, they sent me — give me that $300.00.
Q. That’s right. And when was that?
A. Well, let’s see; that — in other words before Mr. Parker Naylor told me the company was through with me.
Q. That’s right. But it was after he had talked to you and you had talked to him back in April, March, April or May, somewhere back there in 1961, wasn’t it?
A. It was in May because I had to go back to Dr. Oliver and Mr. Naylor had told me that—
Q. Well, I’m aware of the conversation there, but you — I did want to clarify that you are not testifying to the jury that they have never paid you a penny?
A. No, but they haven’t never given me any compensation by the week like I understood I was supposed to receive.
Q. All right. You didn’t get it by the week, but you did get on that occasion $300.00 ?
A. I received $300.00 at one time, yes.”

When appellant had completed cross-examination, the appellees, over the objection and exceptions of appellant, were permitted to go into great detail with reference to the compromise and settlement agreement executed by Mrs. Yarbrough, together with the filing of the prior suit, and the court permitted the appellees to make full development of all the transactions relating to the settlement agreement and the trial of the cause and the result thereof in the trial court and in the appellate court. So, the first question that we must pass upon is: Did appellant, by its cross-examination of Mrs. Yarbrough heretofore detailed, open up the settlement agreement and the resulting trial thereon? We think the answer is “No.” Mrs. Yarbrough, in her direct-examination, had testified that she talked to Mr. Parker Naylor, the insurance adjuster, about compensation and she said; “ * * * j[ haven’t received one dime from them; if I had, I wouldn’t have been up here today, * * * It is clear that counsel for appellees had proven by Mrs. Yarbrough that she had not received any sums from the insurance company. The cross-examination, as we understand it, is in rebuttal to the direct testimony of Mrs. Yarbrough that she had received nothing from the insurance carrier when in truth and in fact she had received the sum of $300.00 from the carrier and there is no reference whatsoever that it was received in settlement. Our view is that the appellees did not have a right to go into the transaction with reference to the settlement agreement and the trial of the cause to set the settlement agreement aside. None of such matters were relevant or material to the ultimate issue of injuries and extent of disability sustained by Mrs. Yarbrough, and we think all of this testimony was highly prejudicial and no doubt caused the jury to render an improper verdict on the main issue as to the extent of Mrs. Yarbrough’s disability. We think the extent of the disability sustained by her injuries is a very close one under all the facts and circumstances surrounding this record.

In 56 Tex.Jur.2d Trial, p. 615, Sec. 272, we find this general rule:

“Parties to an action are entitled to have the issues determined without reference to results of previous proceedings. Counsel may not thereafter inform the jury of findings of previous juries in the case, or of the determination reached in a criminal prosecution arising out of the transaction to be determined by the jury.”

See also Myers v. Thomas, 143 Tex. 502, 186 S.W.2d 811; Houston Chronicle Pub. Co. v. McDavid, Tex.Civ.App., 173 S.W. 467; Associated Employers Lloyds v. Landin, Tex.Civ.App., 205 S.W.2d 662, n. r. e.; Looney v. Traders & General Ins. Co., Tex.Civ.App., 231 S.W.2d 735, n. r. e. See Texas Law of Evidence, McCormick and Ray, Cross-Examination of a Party, Ch. 8, Sec. 277, p. 367; see also 2d Ed. Vol. 1, Sec. 591, p. 461, and Sec. 600, pages 467-468; In Evansich v. Gulf, C. & S. F. RR. Co., 61 Tex. 24-28, we find this statement:

“As all issues of fact must be determined by the testimony of witnesses, it would seem that any fact which bears upon the credit of a witness would be a relevant fact, * *

We have examined most carefully each of the authorities cited by appellees in which they contend that such authorities sustain their right to open up and re-try the settlement agreement, and we are of the view that they are not applicable to this particular situation. It is our view that the parties in the present case had the right to have the case tried on its merits without the prejudice that results from the revelation of what a previous jury and judge have done in a former trial. All the facts and circumstances, save and except for prejudice, relating to the settlement agreement, as well as the suit to set it aside, and result of the trial could have no bearing on the ultimate issues in this cáse, which were the injuries sustained, the disability and the extent of disability.

The appellees further contend that appellant waived its objections to the improperly admitted testimony by allowing similar testimony to be admitted, without objection. We are not in accord with this view. Appellees grounded this proposition on the basis that while Mrs. Buschacher was on the witness stand, counsel for appellee propounded her the following question:

“Q. And you do know that this very claims adjuster, Mr. Parker Nay-lor, who took this statement, is the same man who took the papers in settlement of this claim and paid this lady three hundred dollars, which settlement was set aside in this court because of fraud practied by this very person on Mrs. Yarbrough, do you know that?
A. I don’t know anything about the settlement.”

It is true 'that counsel’s questions to the witness are in the form of positive statements but the witness replied that she knew nothing about the settlement. Ap-pellees have cited no authorities to support the proposition that the mere asking of a question, when the witness disclaims any knowledge, can constitute similar evidence and effect a waiver. We have found none and overrule this contention.

Appellant’s points 27 through 33 inclusive are grouped under one statement and one argument and they deal with the question of assigned error committed by appellees’ attorney in the- opening argument to the jury. The argument is preserved by Bill of Exception No. 1, and we quote the pertinent parts: Appellees’ counsel, in his opening argument, among other things, said:

“I don’t blame Mr. Muldrow for objecting, ladies and gentlemen of the jury; he has a right to object; I’m not criticising him at all. I can understand how he might feel a little hot on the seat of his pants in this case. Because it has been an outrage. It has been a conspiracy, if you please, between the Glens Falls Insurance Company, their adjusters, and their lawyers, to beat this woman out of the compensation which, under the law, she was entitled to.
“Mr. Muldrow: Excuse me, now, counsel, I’ll object to that, Your Honor, because that is outside the record; it has not been shown; it’s highly inflammatory and prejudicial, and we object to the argument on that grounds.
“Mr. Fisher: If the Court please, I don’t believe it’s out of the record; I believe it’s in there big as life.
“The Court: I’ll sustain the objection. The jury will disregard it.
“Mr. Muldrow: Now, we move the Court to instruct the jury that they are to disregard it.
“The Court: I have so instructed.
“Mr. Muldrow: We believe that the effects of that argument are so prejudicial that it cannot be cured by instruction and we move the Court to declare a mistrial.
“The Court: The Court overrules the motion for mistrial, and instructs counsel to proceed with the argument.”

We think we should say at the outset, that there is no evidence that Mr. Muldrow or any member of his firm, or any other attorney, had anything whatsoever to do with the compromise settlement agreement. The argument was not provoked by appellant. The evidence does show that the Glens Falls Insurance Company was the carrier, and when Mrs. Yarbrough made her claim it was referred to Kizer Claims Service, and the record shows that Mr. Naylor, an employee of Kizer Claims, handled all the matters with reference thereto with Mrs. Yarbrough.

The Court qualified the bill of exception, and we quote the pertinent parts of this qualification:

“The Court further finds and certifies that the objection by defendant’s counsel set out at the top of page 9 of the transcript of argument above that ‘Excuse me, now, counsel, I’ll object to that, Your Honor, because that is outside the record; it has not been shown; it’s highly inflammatory and prejudicial, and we object to the argument on that grounds.’ was directed only to the argument by plaintiffs’ counsel: ‘It has been a conspiracy, if you please, between the Glens Falls Insurance Company, their adjusters, and their lawyers, to beat this woman out of the compensation, which, under the law, she was entitled to.’ and none other. The Court at once sustained the objection made by defendant’s counsel when made and the jury was instructed to disregard such argument and the defendant’s motion to declare a mistrial was directed only to such argument and none other and was by the Court overruled.”

The Court, in its order overruling defendant’s motion for new trial, made the following finding:

“It further appears to the Court that the defendant has neither shown nor attempted to show that any of the matters complained of by the defendant in its amended motion for new trial caused or affected any of the answers made by the jury in its verdict and the Court finds that none of the matters complained of by the defendant in its amended motion for new trial separately or collectively influenced the jury to make any answer or finding it would not otherwise have made.”

We have considered most carefully this entire record as a whole and the qualifications made by the Trial Court on Appellant’s Bill of Exception No. 1, as well as the Court’s findings in its order overruling Appellant’s Motion for New Trial, and we are of the view that the argument of appellees’ counsel could not be cured and was not cured by the instructions of the trial court. We are not in accord with appellees’ view that the trial court’s conclusions that no harm resulted from the complained of jury arguments set out are binding in law on this court. The trial court’s statements and its qualifications with reference to probable harm are conclusions of law and cannot preclude this court from passing on such. We think the rule is that where the arguments are set out in their entirety in the Bill the harmful effects of such, as well as interpretation of what counsel meant by the argument, are for the appellate court. Texas Employers’ Ins. Ass’n. v. Drayton, Tex.Civ.App., 173 S.W.2d 782; Baker v. Vidal, Tex.Civ.App., 363 S.W.2d 158.

As we-have previously stated, there was no evidence to show that appellant’s attorney participated in any manner whatsoever with the compromise settlement agreement referred to and the charge that he participated in a conspiracy with the adjusters and the Glens Falls Insurance Company to beat this woman out of what was justly due her was outside the record, and is so highly prejudicial that it requires us to reverse and remand this cause.

The argument of counsel did not legitimately belong to any issue in the case; it was not based upon any evidence adduced, and it was calculated to inflame the passions and excite the prejudice of the jury; that it did so influence and excite them may well be presumed from the fact that under the record the jury gave Mrs. Yar-brough total and permanent disability. We think the extent of Mrs. Yarbrough’s disability under the record was a very close ultimate issue.

The last expressions of our Supreme Court on arguments that are similar in nature to this are found in Howsley & Jacobs v. Kendall, 376 S.W.2d 562. We think the pronouncements made by our Supreme Court in that case are applicable and controlling here and we think the cases cited under paragraphs 3 and 4 of that opinion are applicable to the factual situation here before us. See also, Texas Employers’ Ins. Ass’n v. Jones, Tex.Civ.App., 361 S.W.2d 725, n. r. e.; Texas Employers’ Ins. Ass’n v. Butler, Tex.Civ.App., 287 S.W.2d 198, n. r. e.

Reversed and remanded.


author: PHILLIPS, Justice.

text:
    The MANHATTAN LIFE INSURANCE COMPANY, Appellant, v. Elizabeth B. HARKRIDER, Appellee.
    No. 11322.
    Court of Civil Appeals of Texas. Austin.
    Nov. 3, 1965.
    Rehearing Denied Dec. 1, 1965.
    Coleman Gay, Austin, for appellant.
    Gaynor Kendall, Austin, for appellee.
   PHILLIPS, Justice.

Elizabeth B. Harkrider, plaintiff-appellee, brought this suit against Manhattan Life Insurance Company, defendant-appellant, to collect the $10,000 face amount of a policy of life insurance which defendant sold to her late husband, Rupert R. Hark-rider (hereinafter called the insured) on his life, with plaintiff as beneficiary; and, the defendant having refused to pay the claim for more than thirty days after demand and proof of loss, to recover also interest on the amount due, together with the statutory penalty, attorneys’ fees and costs of suit.

The insurance company sought to avoid the policy on the ground that the insured had knowingly made material misrepresentations in the application for insurance, and that such misrepresentations were “made willfully and with the fraudulent intention of deceiving defendant and inducing it to issue the policy * * * ” Specifically, it was contended by the defendant that the insured had made false and fraudulent answers to question number 6 and to question 7(k) in the application for insurance. These questions and the answers of the insured thereto, were as follows:

“6. Have you had any Yes or No health examinations or check-ups in the past five years? (If so, state symptoms which prompted the examination, give physician’s diagnosis and recommendations, also name and address.) No
7. Within the last 10 years, have you had or been told you had or been treated for: * * *
(f) High blood pressure ? When ? What drugs and dosage were used? * * * Yes
(k) Any other disorer, injury or impairment? No”

In the column adjacent to question 7(f), the insured gave 1961 as the date of the high blood pressure, and “serpasil .25 mgm t.e.d.” as the medication prescribed.

Trial was to a jury on special issues, in response to which the jury made the following findings regarding question 6 in the insurance application:

(a) That “at the time he signed his application for insurance Rupert R. Harkrider knew that his answer to Question No. 6 was false;”
(b) That Rupert R. Harkrider did not make “his answer to question 6 * * * with the intent to deceive and mislead the defendant into issuing said policy of insurance.”
(c) That Rupert R. Harkrider did not answer Question No. 6 “for the purpose of wrongfully inducing The Manhattan Life Insurance Company to issue the policy”; (the Court at defendant’s request having defined the term “wrongfully inducing” as meaning “the concealment or misstatement of facts as an inducement to issue a policy of insurance, which policy would not have been issued if such facts had not been concealed or misstated.” and
(d) That the answer to Question No. 6 was not “material to the risk.”

Regarding insured’s answer to Question 7(k) of the application, the jury found:

(a) That at the time he signed the application, Rupert R. Harkrider did not know that his answer to Question 7(k) was false;
(b) That he did not make his answer to the question “with the intent to deceive and mislead the defendant into issuing said policy of insurance ;”
(c) That he did not answer Question 7(k) “for the purpose of wrongfully inducing The Manhattan Life Insurance Company to issue the policy ;” and
(d) That the answer to question No. 7(k) was not “material to the risk.”

The jury also found that the defendant had relied on insured’s answers.

On the basis of the jury’s verdict, the District Court entered judgment for plaintiff, overruling defendant’s motion for judgment non obstante. The defendant has appealed to this Court, and has filed a brief containing twenty points of error, of which seven (Appellant’s Points 2-8) attack the jury’s findings on the ground that there is “no evidence” to support the answers to Special Issues 2, 3, S, 11,12, 13 and in consequence that the Court erred in overruling defendant’s motion for judgment non obstante (Point I); and seven more points of error assert that the answers of the jury to those same issues are so greatly against the preponderance of the evidence as to be clearly wrong (appellant’s Points 14-20).

Finally, defendant-appellant argues that the trial court should not have submitted Special Issues 2, 3, 12 and 13 in the form submitted but that in lieu of those issues the Court should have given defendant’s Requested Special Issues 1 and 2 (Appellant’s Points of Error 9-13).

We overrule these points and affirm the judgment of the trial court.

The insured, Rupert R. Harkrider, was S3 years of age in the spring of 1962. He was a graduate of the University of Texas Law School and had been a lawyer in Abilene and Beaumont before moving to Austin nine years previously. He had not practiced law in Austin, but was in the cattle business, had some stocks, owned rent property, and was taking care of his own properties and business.

After the Harkriders came to Austin, they became close friends of Dr. A. H. Neighbors, Jr., and his family, who lived in the same block; they visited socially; their children stayed at one another’s houses ; and this relationship had existed for upwards of seven years. Dr. Neighbors became the family physician of the Harkrid-ers, and had seen Mr. Harkrider on three or four occasions professionally. Dr. Neighbors testified that he first saw Harkrider professionally in December of 1960, and at that time

“He wanted me to check his blood pressure and see how he was doing, and he had some high blood pressure, and I put him on some medicine and told him that I needed to check him again.”

The blood pressure condition was what Dr. Neighbors classed as “borderline” in the sense of being barely above normal readings, but he prescribed Serpasil for the condition.

Mr. Harkrider was only 5 feet 4-$4 inches tall, but then weighed 168 pounds. About December 1961, at Dr. Neighbors’ suggestion, he went on a diet to lose weight, and continued the diet until May 30, 1962. The doctor had told him if he would lose some weight, it would add ten years to his life.

The blood pressure condition was the only medical problem for which he consulted Dr. Neighbors.

The above was the status in April 1962, with Mr. Harkrider still on the diet and still taking Serpasil for the blood pressure condition when the matter of insurance came into the picture. The evidence reveals that Mr. Harkrider already owned some life insurance and in prior years he had been declined a policy by one company and was offered (but declined) a rated-up policy by another, both on account of high blood pressure. But he did not originate the negotiations which ripened into the policy in suit. Instead, Mr. Nolan, agent for Southwestern Life, testified that in April 1962, Southwestern made a special offer to encourage its agents to call on its present policyholders, by proposing to write up to $5,000 additional insurance for any such policyholder, without requiring a medical examination, but simply on a medical history to be obtained from the policyholder by the agent. Mr. Nolan testified he “had been talking to Mr. Harkrider for several years about some additional insurance, and when this offer came out, I suggested to him that it might be a good thing for him to take advantage of it.” Harkrider waited until the last day the offer was open before he decided to make application to Southwestern for the additional $5,000 policy. Mr. Nolan was sure that Harkrider revealed to Southwestern “that he had been going to Dr. Neighbors for a history of hypertension” because Nolan received and had in his files copies of the correspondence between Southwestern and Dr. Neighbors where they asked the doctor for Harkrider’s medical history. “The result (of this application) was that due to his history of elevated blood pressure, the Company (Southwestern) preferred to decline the application” and so notified Harkrider and the agent under date of May 25, 1962.

Mr. Nolan testified that upon receipt of notice that Southwestern had declined the policy, he got in touch with Mr. Daniels, the general agent at San Antonio for the defendant Manhattan Life Insurance Company, because it was known as one specializing in substandard risk or extra-premium business; he told Daniels about Harkrider’s situation, and asked if Manhattan would consider writing the policy, and at what rate. Mr. Daniels told him to get “a preliminary application form filled out” along with a permission letter authorizing Manhattan to write Harkrider’s doctor. This Nolan did, and mailed the two instruments to Mr. Daniels on May 28, 1962.

Next in chronological sequence is the fact that on May 30, 1962, Mr. Harkrider went to Dr. F. M. Pearce, Jr. and had a physical examination, the denial of which in answer to Question 6 is the basis of the claim by defendant of fraudulent misrepresentation on the part of insured. The testimony of two witnesses, Mrs. Harkrider and Dr. Pearce, related (in part) to this event.

Mrs. Harkrider testified that on May 30, 1962, she and her husband went to Dr. Pearce to get a physical check-up. Asked by defendant whether they regularly got a check-up, she testified “We tried to, but you don’t always do it.” At any event, it had been quite some time since either had been for a general physical, and she wanted them both to go for a physical examination. She could not recall that there was anything about her own physical condition which caused her to decide to go for a check-up. She could not recall that either had not been feeling well. But they had teen-aged children, and with these responsibilities she wanted to be sure they were in good health. The reason Mr. Harkrider went was that she asked him to go. As to whether there was anything about his condition which prompted her to ask him to go, she testified that he had had high blood pressure and she was concerned about that; she thought he was not up to par; he had been on the diet at the doctor’s suggestion and had lost a good bit of weight; he had not complained of being sick, but “I don’t think he was as strong as he would like to be, and that I attributed to his loss of weight.” The only complaint he had ever mentioned was that his left arm seemed to be weak, and she had chided him about it that it made no difference anyway.

Dr. Pearce testified that Mr. Harkrider came to him on May 30, 1962 “primarily for a physical check-up and for examination in regard to his blood pressure” and “He did not specifically complain of any other illness.” “He came primarily for just a general check-up,” but “He wanted advice as to his blood pressure, whether he needed medication for blood pressure. He also mentioned that he would like to have some advice as to — as regards what type of exercise he should take, just a general question for a man his age. He stated that he had been nervous for a number of years, and wanted advice in regard to his nerves. He said * * * that on an insurance examination which another doctor had given him, that his blood pressure had been found to be elevated, and he had been given some Serpasil. That is a medication for blood pressure.” “He had also previously been told to lose weight by his previous physician, * * * and he stated that he had been on a very strenuous diet for the same. He stated his previous weight was 168 pounds, and that he had been on this diet, lost down to 138 pounds, and that he had stabilized at that particular weight, but he had noticed as he has lost the weight he had become weak, and he felt somewhat short of breath and had a slight cough. He had developed a postnasal drip, and he wondered if he had lost too much weight. Next, I mentioned again that he stated he was quite nervous, but that he slept good, and that he had a fairly good appetite. He had no chest pain. At times, his legs and fingers felt stiff. Occasionally he had a few cramps in the feet. He stated he thought his heart was good.”

Dr. Pearce testified that he interrogated Harkrider at length inquiring about the different systems of the body, and that Harkride responded as follows:

“He stated that his health previously had been excellent. He denied any other serious diseases or injuries aside from the fact that he had broken his left arm as a child, and as a result this arm was slightly smaller. And he had had no operations. He stated that he had had malaria in the service, but apparently this was cured without any difficulty. He stated that he thought he smoked too much, and he stated that he only drank coffee in the mornings. He thought maybe he drank a little too much.”

Thereupon, on May 30th Dr. Pearce made an exhaustive physical examination of Mr. Harkrider, including chest X-ray, urinalysis, blood chemistry, etc., all of which were normal, with the following exceptions. He found the blood pressure readings on that examination (132/110 in left arm, 130/106 in right arm) “as indicative of a slight elevation in blood pressure.” He found a slight elevation in the blood count, and the X-ray revealed what “looked like an old scar * * * probably sixty per cent of people in that age group (have) had a very mild case of tuberculosis at some time in their life.” [A subsequent X-ray confirmed the scar to be “an old process that has nothing to do with his present state of health”]. Dr. Pearce also noticed during the examination “that there were quite a few fascicu-lations of muscle groups. These are little shimmering muscle groups that you have to look close to see, and at the time I inquired of Mr. Harkrider if he had ever noticed these, and he had not himself noticed them * * *.” And Dr. Pearce noted that Mr. Harkrider did appear nervous and hyperactive.

Dr. Pearce testified that Harkrider returned the following day (May 31) for a report on the examination. Asked to relate what he told Harkrider, Dr. Pearce testified : Harkrider was told about the old scar shown in the X-ray, and that they would later want to reinvestigate it to be sure; he was told that “his blood count was a little above normal.” Dr. Pearce first said “I told him I might need to check the thyroid again in the future,” but he later testified that his notes on the point were not clear, and he may not have mentioned rechecking the thyroid. Continuing, Dr. Pearce testified :

“I told him that I was not able to diagnose any definite organic disease. I did say that his diastolic blood pressure was running a little above normal, but this is the kind of thing I would have to take the blood pressure on a number of times in the future before I would make any opinion on whether he actually needed treatment for same or not.”

To the inquiry whether the above was all Harkrider was told about his condition as revealed by the physical examination, Dr. Pearce testified:

“I think that’s — I told him he appeared to be nervous. He appeared to be rundown. He had probably lost too much weight, and if he had drunk excessively, this might have been a factor in making him feel weak. That pretty well covers what I mentioned to him on the first examination.”

Continuing with what Harkrider was told (as distinguished from what he was not told), Dr. Pearce was asked to relate what advices and prescriptions he gave to Hark-rider on that date (May 31), and he testified that he told Harkrider:

“ * * * that I would advise him to cut down on his cigarettes, and told him to try to stay under a pack a day, and later on I made a note that we should probably try to have him quit smoking. I wanted him to cut down on the alcohol intake by at least a half, and then later on he should cut down on that, even, as his nerves felt better.”

Dr. Pearce gave Harkrider some Chol-edyl, “a kind of test drug I was using myself” which might help relieve the sensation of shortness of breath; he was advised to continue to take the Serpasil which had been prescribed by Dr. Neighbors, “and he was given Librium, which is a tranquilizer * * * to be taken for nervous tension, and I finally advised him to eat better, to eat and put on some weight.”

In sum, on the first visit he did not tell Harkrider, “You are in good health,” but neither did he tell him “You are in bad health;” instead:

“I told him the things you might tell anybody, cut down on the drinking, cut down on the smoking.”

And he told Harkrider to stop the diet: “If he had lost that much weight in a short period of time, it could make him weak, make him feel bad. If he had been used to 168 pounds, and suddenly went down to 138, it could make him feel a little off-key.”

What Dr. Pearce did not tell Harkrider is also significant. As previously related, Dr. Pearce noticed fasciculations or shim-merings in certain muscle groups, and he inquired of Harkrider whether he had ever noticed them. Harkrider had not, “and he inquired of the significance of these” muscle tremors, but Dr. Pearce did not tell him they had or might have any significance, because “the fasciculation or jumping of the muscles is seen in amyotrophic lateral sclerosis,” and “it is seen in quite a few different diseases, and it could be seen in normal people, too.” So, despite Harkrider’s inquiry, Dr. Pearce did not tell Harkrider that the fasciculations had or might have any possible significance: “as I have mentioned earlier, he was a high-strung type fellow, and a patient like that, if you just unload all of the possibilities in the world, why it is really hard on them.”

So, the only illness discussed on May 30-31 was high blood pressure; and Dr. Pearce told Harkrider to follow the advices above related, and to come back some time later.

As a continuation of the discussions between the witness Mr. Nolan (an Austin insurance man) and Mr. Joe Daniels (Manhattan’s general agent in San Antonio), Mr. Daniels on or about June 6, 1962 proposed to Nolan a policy for Harkrider for “'which they would charge an extra premium because of his history of elevated blood pressure.” After some further discussions between Nolan and Daniels, “we then had Mr. Harkrider examined.”

The physician to whom Harkrider was sent for the June 16th insurance medical examination was Dr. A. H. Neighbors, Jr., his friend and neighbor, the same doctor who had originally diagnosed Harkrider’s high blood pressure condition, and had prescribed the medication for it, and had suggested the diet, as above related. Dr. Neighbors propounded to Harkrider the questions in the Manhattan Company’s application, including the question as to whether the insured had had any health check-ups in the past five years, and whether he had had, or been treated for listed diseases or any not listed; and he wrote down the answers given by the applicant.

On the basis of the medical examination made by him on June 16th, Dr. Neighbors testified that he considered Harkrider to be insurable; indeed, “I thought Mr. Harkrider was in better physical condition than I had ever seen him.”

The application was dated June 16, 1962, was signed by Harkrider, the report of the medical examination signed by Dr. Neighbors, and on June 18th, Mr. Nolan mailed the application to Manhattan in San Antonio. The application did not have the amount of insurance applied for filled in, nor the rate filled in, because Manhattan had not yet informed Nolan how much insurance it would write on Harkrider, nor the rate.

Mrs. Harkrider testified that after the May 30th physical, her husband tried to follow Dr. Pearce’s instructions: he quit the diet, and started to eat more and gain a little weight; he had been on the swimming team while in school, and he took up swimming again for exercise; he tried to cut down on his smoking, and otherwise “tried to follow the doctor’s directions.”

On June 19th, Harkrider reported back to Dr. Pearce. On that second visit, Dr. Pearce took Harkrider’s blood pressure, and found it normal; he tested Harkrider for reflexes, and found “no pathological reflexes” or abnormal reflexes, and he further tested him neurologically “checking how well he could stick his finger to his nose, whether his coordination was good, and it seemed to be all right.” Dr. Pearce made himself a note that the fasciculations were less; but that Harkrider held his head forward, and that his shoulder strap muscles looked atrophic. So he recorded, in this note to himself, to investigate later whether “this could be an atypical amyo-trophic lateral sclerosis,” but again he did not tell Harkrider anything at all about these suspicions. Instead, the blood pressure being normal, he told Harkrider to “stop the blood pressure medicine” (Serpasil). Harkrider had theretofore taken the several Choledyl tablets Dr. Pearce gave him on the first visit, and Dr. Pearce did not suggest taking them any more. He also told Harkrider “to keep his Librium (for nervousness) the same, and further cut his smoking and further cut his drinking, which he said he had done, and I told him to call me in two weeks.”

Dr. Pearce did not see or hear from Harkrider again until August 27th. But he testified that at no time prior to September 25, 1962, did he diagnose any illness in Harkrider, except the blood pressure condition. And except for mentioning that the lung scar should be rechecked, and that he would later take another blood count, Dr. Pearce also testified that prior to September 25th he had not told Harkrider anything which would have indicated to Harkrider any suspected illness, other than high blood pressure.

During the first week in July 1962, Manhattan mailed to Mr. Nolan a policy for $10,000 on Harkrider’s life, rated up so as to charge $885.00 per year premium for five years, and $535.80 thereafter. This was accompanied “with a little form” Hark-rider was to sign: this was the “Amendment to Application” in which no blanks are filled in, but signed by Harkrider under date of July 3, 1962, immediately following policy form proper. It contained no inquiries about Harkrider’s health. On July 9, Harkrider brought Mr. Nolan a check for the first year’s premium, and Nolan delivered the policy to Harkrider.

Harkrider died of amyotrophic lateral sclerosis on December 19, 1962. This disease was definitely diagnosed by Dr. Pearce on September 25, 1962.

I.

In order to void a policy of life insurance in this State there are five elements that must be established. These are: the making of the representation, the falsity thereof, reliance thereon by the insurer, the intent to deceive on the part of the insured in making same and the misrepresentation must be material. These elements are stated in General American Life Insurance Company v. Martinez. Tex.Civ.App., 149 S.W.2d 637, error dismissed, judgment correct. In Martinez the Court further states: “Without the concurrence of each and every one of the factual elements above set forth, a misrepresentation does not constitute a cause of action for the cancellation of the policy, and it is not a valid defense to liability.” The Court also stated that: “An immaterial misrepresentation, even though fraudulently made, that is, with knowledge of its falsity and with intent to deceive, does not defeat recovery on the policy. Likewise, a material misrepresentation does not defeat recovery if innocently made; that is, without intent to deceive.” American Central Life Insurance Company v. Alexander, Tex.Com.App., 56 S.W.2d 864.

In affirming the judgment of the trial court we hold that the defendant (appellant) has not established two of the above-mentioned elements, that is, the elements of materiality and that of intent to deceive on the part of the insured in making the misrepresentations complained of. We also hold that there was sufficient evidence for the jury to have found said elements wanting. We further hold that the lack of either element is fatal to appellant’s defense to the policy.

II.

Article 21.16 of the Texas Insurance Code, V.A.T.S. is as follows:

“Any provision in any * * * policy of insurance * * * which provides that the answers or statements made in the application * * *, if untrue or false, shall render the contract or policy void or voidable, shall be of no effect, and shall not constitute any defense to any suit brought upon such contract, unless it be shown upon the trial thereof that the matter or thing misrepresented was material to the risk or actually contributed to the contingency or event on which said policy became due and payable, and whether it was material and so contributed in any case shall be a question of fact to be determined by the court or jury trying such case.”

Plaintiff (appellee) made out a prima facie case by proving up a valid life insurance policy held by the deceased. She ^proved that she was the beneficiary and after presenting evidence as to attorney’s fees, rested. The burden of invalidating the policy was upon the defendant (appellant). The defendant failed to do so.

Appellant complains here of the error of the trial court in holding that there was any evidence to support the jury’s finding that the false statement made by insured that he had not had a physical examination within the past five years was not material to the risk. After reviewing the entire record in this case we have concluded that there are several inferences that the jury could have drawn from the testimony presented at trial, either one of which is evidence and sufficient evidence to support their finding in this regard.

It must be borne in mind that when the deceased insured made the misrepresentation complained of he had been examined by two physicians, neither of whom had found anything wrong with him other than the high blood pressure which was disclosed at all times to all concerned. Thus had the undisclosed examination by Dr. Pearce come to defendant’s attention before the issuance of the policy, there is reason to believe that the policy would have been issued anyway. On the day that the form in question was filled out Dr. Neighbors had examined the deceased and pronounced him in excellent health. Dr. Pearce testified that he had not diagnosed the disease in the deceased insured until September 25, 1962 and he was unwilling to testify at the trial that the deceased had the disease when he examined him on May 30, 1962. So the inferences arising with respect to what deceased’s doctors might have informed the company of had they been contacted are (a) nothing other than high blood pressure or (b) even though one suspected the disease in question he would not have had enough medical evidence at that time to have mentioned it to the company.

The defendant offered a senior life underwriter of their company as a witness who testified what he would have done had the deceased answered the inquiry about prior examinations truthfully. This testimony was to the effect that he would have contacted Dr. Pearce and that under no conditions would the company have insured a person with amyotrophic lateral sclerosis. But this witness was never asked what he would have done had the deceased insured answered the question truthfully, then had gone on to explain that all that Dr. Pearce had found wrong with him was the high blood pressure. The jury had a right to infer that, had this been done, the company would have approved the policy without having contacted Dr. Pearce, or they could have disregarded the testimony of this interested witness altogether. See this Court’s opinion in Bankers Standard Life Insurance Company v. Atwood, Tex.Civ.App., 205 S.W.2d 74.

Likewise we overrule appellant’s point of error complaining of the court’s holding that there was any evidence to support the jury’s finding that the insured’s statement in his application that he was not under treatment for any disorder or impairment except high blood pressure was not material to the risk. At the time that the deceased insured filled out the questionnaire in question he had never been told that he had anything other than high blood pressure. Dr. Pearce testified that the medicines he has prescribed were not for amyotrophic lateral sclerosis. There is ample evidence to uphold the finding of the jury in this respect and also to their finding that the deceased had not answered this portion of the questionnaire untruthfully. The deceased could well have believed the medicines prescribed by Dr. Pearce were for the high blood pressure.

We overrule appellant’s “no evidence” and “insufficient evidence” points regarding the jury’s findings as to the materiality of the answers in question.

III.

Appellant assigns error to the court in holding that there was any evidence to support the jury’s findings that the deceased applicant’s denial that he had had a recent physical examination was not made with an intent to deceive and mislead appellant. Also appellant assigns error to the holding . of the court in holding that there was any evidence to support the jury’s findings that applicant’s misrepresentation as to medical treatment he was then receiving was not made with intent to deceive and mislead appellant. We overrule both of these points and also the same points relating to the insufficiency of the evidence.

As stated earlier in this opinion, the jury found that the deceased insured did not give an erroneous answer to Question 6 of the insurance application, either with the intent to deceive and mislead the company into issuing the policy or for the purpose of wrongfully inducing the company to issue the policy. It likewise found that he did not know his answer to Question 7(k) was false and that he did not make his answer thereto with the intent to deceive and mislead the company into issuing the policy, or for the purpose of wrongfully inducing the company to issue the policy. Questions of intent such as these are fact questions for the jury, Great Southern Life Insurance Co. v. Doyle, 136 Tex. 377, 151 S.W.2d 197.

Doyle also holds that before the defense of misrepresentations of material facts may be maintained, it is necessary, not only to prove that the representations were false, but also that they were made with intent to deceive or defraud.

Appellant maintains that Doyle is no longer the law in this respect and had been superseded by the opinion of the Supreme Court in Allen v. American National Insurance Company, 380 S.W.2d 604. That under Allen it is sufficient for a misrepresentation such as that at bar to have been made for the purpose of inducing the company to issue the policy. We cannot agree with appellant here. Allen cites Doyle with approval and other cases with similar holdings on this point.

It should be noted at the outset that the ultimate question of whether the deceased insured intended, in answering the application, to deceive or defraud the insurance company is an issue which could not be proved or disproved by direct evidence. All of the evidence bearing on this critical issue is necessarily circumstantial and the jury was called upon to draw a conclusion as to intent from the circumstances in which the answer was made.

The applicable rules in this regard have been stated by the Supreme Court in Lynch v. Ricketts, 158 Tex. 487, 314 S.W.2d 273 and in Cavanaugh v. Davis, 149 Tex. 573, 235 S.W.2d 972. In the former, the Court said: “The jury is thus not only the judge of the facts and circumstances proven but may also draw reasonable inferences and deductions from the evidence adduced before it. Its findings may not be disregarded under the provisions of Rule 301, therefore, if the record discloses any evidence of probative value which, with inferences that may be properly drawn therefrom, will reasonably support the same.”

In Cavanaugh, above, the Court said: “While proof of an ultimate fact by other relevant facts and circumstances may sometimes be so conclusive even in the absence of direct evidence as to compel a finding of its existence as a matter of law, [citing cases] this will be true only where reasonable minds might not differ as to the inference to be drawn.”

In viewing only the points most favorable to the verdict with respect to defendant appellant’s “no evidence points” and in weighing all of the evidence to find whether the verdict is so against the overwhelming weight and preponderance of the evidence as to be clearly wrong with respect to defendant’s points on the insufficiency we overrule it in both instances.

There is ample room for reasonable minds to differ as to why deceased made an untruthful answer to the answer to Question 6 from the inferences that might logically be drawn from the evidence. The cases cited by defendant are not pertinent to that at bar as these cases contain false statements by insured who know that they have a serious disease and willfully conceal the disease from the company. Here the only logical inference to be drawn is that they did it with the intention to deceive the company. This was not necessarily the case with the deceased. In the first place the deceased had not sought the insurance, it had sought him. He had rejected, in the past, a rated policy that had been offered him by another company. On his visit to Dr. Pearce he was not told that he was in bad health and was told only of the high blood pressure, something that was known to all concerned. The evidence does not present any logical reason why deceased should be concerned about the report Dr. Pearce might make to the defendant company. Certainly reasonable minds can well differ as to why deceased made the untruthful answer. Whether he was embarrassed at telling his family doctor that he had been to see another doctor or for whatever other reason that only the deceased would know, the jury had a right to draw logical inferences from the facts that brought about the act in question.

Likewise we overrule appellant’s assignment of error to the judgment of the court that the deceased did not know that his answer to Question 7(k) was false and that he did not make his answer thereto with an intent to deceive and mislead the company into issuing the policy, or for the purpose of wrongfully inducing the company to issue the policy. Our reasons for rejecting appellant’s same point, earlier in this opinion, with respect to materiality will suffice here.

IV.

We overrule appellant’s points of error wherein he complains of the judgment of the trial court in holding that there was any evidence or sufficient evidence to support the jury’s finding that deceased had had a recent physical examination and deceased’s statement as to medical treatment he was then receiving were not made for the purpose of wrongfully inducing appellant to issue the policy. The evidence and the discussion of the inferences thereto discussed earlier in this opinion apply here.

Appellant also assigns error to the use of the word “wrongfully” in the special issue submitted by the court. We overrule this objection as the submission of this issue was just another form of submission of the ultimate issue of intent to deceive the insurer which was incumbent on defendant-appellant to establish under the rule announced in Doyle, above.

V.

We overrule appellant’s assignments of error to the issues submitted by the court requiring an intent to deceive and to the inclusion by the court of the word “wrongfully” in certain special issues. It is appellant’s contention that Allen, discussed above, requires that the issues submitted in a case such as this should inquire as to whether the acts of the insured were “for the purpose of inducing * * * Life Insurance Company to issue the policy in question.” That Allen overruled Doyle which required an intent to deceive. Our reasons for overruling appellant here are the same as the reasons given above in our discussion of Allen and Doyle. We add, in this respect, that while appellant’s requested issue framed in the manner allegedly required by Allen may have been a correct presentation of the issue in question, it is not the only manner of submitting the question and that a correct submission was presented the jury by the trial court.

We overrule appellant’s assignments of error and affirm the judgment of the trial court.

ARCHER, C. J., not participating.

      . The parties will hereafter be referred to according to their designations in the trial court.

      .“2nd Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that insured’s admittedly false statement that he had not had a physical examination within the preceding 5 years was not ‘material to the risk.’
      3rd Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that the insured’s statement in his application that he was not under treatment for any disorder or impairment except high blood pressure was not ‘material to the risk.’
      4th Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that applicant’s denial that he had had a recent physical examination was not made with intent to deceive and mislead appellant.
      5th Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that applicant’s misrepresentation as to medical treatment he was then receiving was not made with intent to deceive and mislead appellant.
      6th Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that applicant’s denial that he had had a recent physical examination was not made for the purpose of wrongfully inducing appellant to issue the policy.
      7th Point of Error: The error of the court in holding that there was any evidence to support the jury’s findings that applicant’s misrepresentation as to medical treatment he was then receiving was not made for the purpose of wrongfully inducing appellant to issue the policy. 8th Point of Error: The error of the court in holding that there was any evidence to support the jury’s finding that Mr. Harkrider did not know that his answer to Question No. 7(k) was false.”

      . “1st Point of Error: The error of the court in overruling defendant’s motion for judgment notwithstanding the verdict.”

      . “14th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 5 was not so greatly against the preponderance of the evidence as to be clearly wrong.
      15th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 2 was not so greatly against the preponderance of the .evidence as to be clearly wrong.
      16th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 3 was no so greatly against the preponderance of the evidence as to be clearly wrong.
      17th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 3 was not so greatly against the preponderance of the evidence as to be clearly wrong.
      18th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 12 was not so greatly against the preponderance of the evidence as to be clearly wrong.
      19th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 13 was not so greatly against the preponderance of the evidence as to be clearly wrong.
      20th Point of Error: The error of the court in holding that the jury’s answer to Special Issue No. 15 was not so greatly against the preponderance of the evidence as to be clearly wrong.”

      . “9th Point of Error: The error of the court in overruling defendant’s objection to Special Issue No. 2 as requiring it to show an intent to deceive and mislead insurer by making the false statements, even though the law requires only that the statement be made with the intent that it induce the issuance of policy.
      10th Point of Error: The error of the court in refusing to submit Defendant’s Requested Special Issue No. 1, inquiring whether Mr. Harkrider denied that he had recently had a physical examination for the purpose of inducing appellant to issue the policy.
      11th Point of Error: The error of the court in overruling defendant’s objection to Special Issue No. 12 as requiring it to show an intent to deceive and mislead insurer by making the false statements, even though the law requires only that the statement be made with the intent that it induce the issuance of policy.
      12th Point of Error: The error of the court in refusing to submit Defendant’s Requested Special Issue No. 2, inquiring whether Mr. Harkrider answered ‘No’ to Question No. 7(k) of the application for the purpose of inducing appellant to issue the policy.
      13th Point of Error: The error of the court in overruling defendant’s objection to Special Issue No. 3 because of the use of the word ‘wrongfully’ therein.”

      . In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660.

      . American National Ins. Co. v. Stevens, Tex.Civ.App., 262 S.W. 833; John Hancock Mutual Life Ins. Co. v. Esparza, Tex.Civ.App., 286 S.W.2d 695; Atlanta Mutual Ins. Ass’n v. Heard, Tex.Civ.App., 40 S.W.2d 927; Forrester v. Southland Life Ins. Co., Tex.Civ.App., 43 S.W.2d 127; Stipcich v. Metropolitan Life Insurance Co., 277 U.S. 311, 318, 48 S.Ct. 512, 72 L.Ed. 895.


author: WERLEIN, Justice.

text:
    CENTRAL NATIONAL BANK OF HOUSTON, Appellant, v. Joe R. MARTIN, d/b/a Martin Mortgage Company, Appellee.
    No. 14671.
    Court of Civil Appeals of Texas. Houston.
    Nov. 4, 1965.
    Rehearing Denied Dec. 2, 1965.

      Dow, Dow, Cogburn & Dow, Abraham P. Friedman, Houston, for appellant.
    Herman W. Mead, Houston, for appel-lee.
   WERLEIN, Justice.

This suit was brought by appellant, Central National Bank of Houston, against ap-pellee, Joe R. Martin, d/b/a Martin Mortgage Company, to recover the sum of $350.-00, being the amount paid to appellee in the form of a cashier’s check which appellant issued to him upon presentation at the bank of a $350.00 check drawn by one Charles C. Walker on his account in said bank, and made payable to appellee, who endorsed it in blank. Appellee by cross-action asked for judgment over and against Walker in the event appellant recovered against him. When appellant rested, the court granted appellee’s motion for judgment and dismissed appellee’s cross-action against Walker. The trial was non-jury.

The check of Walker was dated March 20, 1964, and was delivered to appellee about 10 o’clock in the morning on such date. On the same day at about 1:05 p. m., Walker called at the bank and in writing stopped payment on the check, using the bank’s stop-payment form which provides, among other things:

“The undersigned agrees to hold the Bank harmless for said amount, as well as for all expenses and costs incurred by this Bank through refusing payment of above check and further agrees to hold the Bank free of all liability should payment be made contrary to this request, if such payment is made through inadvertence, accident or oversight.”

On March 23, 1964, Martin took the check to appellant Bank and got a cashier’s check therefor, which he deposited to his account in the First State Bank of Bel-laire. Thereafter appellant’s assistant cashier, Mr. James White, contacted Martin and informed him that the check had been paid over a stop-payment order and in effect requested the return of the money, which request was refused.

The trial court was not requested to file findings of fact and conclusions of law, and did not do so. Hence, we are unable to determine exactly upon what basis the trial court rendered judgment in favor of appellee when appellant concluded its evidence. The court recites in its judgment that at the conclusion of the evidence adduced by the plaintiff, the defendant moved for an instructed verdict and the court, after hearing the evidence and argument of counsel, did so grant said motion of the defendant, Joe R. Martin. The motion of appellee, entitled “Defendant’s Motion for Instructed Verdict” states, among other things, that appellant offered no proof that it had been damaged in any way; that no proof was offered that appellant did or did not charge the account of Mr. Walker for the amount of the check in question; and that the only documentary evidence offered by appellant in support of its position was the stop-payment order which contained a “hold harmless clause in behalf of the bank and requires the depositor to indemnify them, no matter how the check is made, if the check is paid over the stop-payment order.” It seems likely, therefore, that the court entered judgment in favor of appellee based upon its conclusion that appellant had shown no damage because it could charge the account of Mr. Walker with the amount of the check in question, in view of the provision in the stop-payment order hereinabove set out.

Article 342-712 of the Texas Banking Code of 1943 provides, among other things, that:

“The person primarily obligated to pay an item may at any time prior to presentment thereof for payment instruct the bank by or through which the same is payable not to pay such item, and shall each sixty (60) days thereafter renew such instructions. No bank shall be legally obligated to regard such instructions or renewals unless the same are in writing, dated, signed, and describe the item with certainty. After receipt of stop payment instructions in the form above provided prior to presentment for payment of the item, a bank shall exercise reasonable diligence not to pay the same, and if it thereafter negligently pays the item it shall be liable for the damages sustained in a sum not exceeding the amount of such item. * * *”

Appellant’s assistant cashier, Mr. White, testified that the cashier’s check was issued in error because someone had overlooked the flag on the sheet “where they called in to verify the check.” Appellant pleaded the stop-payment order and alleged that “notwithstanding the foregoing, Plaintiff’s employees erroneous— issued Plaintiff’s cashier’s check in exchange for the check of Charles C. Walker. * * * ” Appellant neither pleaded any exculpatory ground or reason for its carelessness, nor did it undertake to excuse its conduct at the trial. It is our view that under the undisputed facts and as a matter of law, appellant negligently paid the check in question, and became liable to the drawer of the check, Mr. Walker, for the amount thereof unless the provision in the stop-payment order, hereinabove set out, releases appellant from its liability to Walker and gives it the right to charge his account with the amount of the check.

In 9 C.J.S. Banks and Banking § 344, p. 695, appears the following summary of the law relating to this subject.

“According to some authorities the common-law liability of the bank for paying a check or order in disregard of the drawer’s countermand, infra § 353, may be limited by contract. Under this view a stipulation releasing the bank from liability for paying as a result of inadvertence or accident, in spite of the stop payment order, constitutes a valid contract, which is not void as against public policy. The consideration for such a stipulation is held to spring from the mercantile relation of the parties and the reciprocal rights and obligations which the law attaches to that relation, and it was held to be immaterial, in the absence of fraud, that the drawer did not read such a stipulation where it was printed on a card which he signed at the time he ordered payment stopped.

“On the other hand, it has been held by other authorities that a stipulation purporting to release the bank from liability for any negligence in the observance of the stop payment order is without consideration and void as against public policy.”

In Reinhardt v. Passaic-Clifton Nat. Bank & Trust Co., Appellate Div.1951, 16 N.J.Super. 430, 84 A.2d 741, the court said:

“The validity of such release clauses has been the subject of conflicting judicial opinions. Thus they were held to be effective in Gaita v. Windsor Bank, 251 N.Y. 152, 167 N.E. 203 (1929); Tremont Trust Co. v. Burack, 235 Mass. 398, 126 N.E. 782, 9 A.L.R. 1067 (1920); and Hodnick v. Fidelity Trust Co., 96 Ind.App. 342, 183 N.E. 488 (1932); and were held to be ineffective in Calamita v. Tradesmens Nat. Bank, 135 Conn. 326, 64 A.2d 46 (1949); Speroff v. First-Central Trust Co., 149 Ohio St. 415, 79 N.E.2d 119, 1 A.L.R.2d 1150 (1948) and Hiroshima v. Bank of Italy, 78 Cal.App. 362, 248 P. 947 (1926). See also 1 A.L.R. 2d 1155 (1948); 34 Va.L.Rev. 834 (1948); 62 Harv.L.Rev. 1224 (1949).”

After a careful study of the authorities, we are of the opinion that the cases holding that such release clauses are without consideration are supported by the better reasoning. In Calamita v. Trades-mens Nat. Bank, supra, as in the instant case, the bank furnished the stop-payment form to the drawer of the check for his signature, and, as in that case, the document in this case begins with an unqualified request to the bank to stop payment on the check. The last paragraph of the stop-payment form contains the provision relative to payment made through inadvertence, accident or oversight. Under Article 342-712 of the Texas Banking Code, appellant when requested by Mr. Walker was obligated to place a stop-payment order upon the check in question which had not at that time been presented for payment. It could not have refused to do so even though Walker refused to sign the particular stop-payment order which contained said provision, but instead merely instructed the bank by a written instrument or letter dated and signed and describing the item with certainty, to stop payment thereon. Since appellant, in stopping payment on the check, did what it was legally obligated to do, there was no consideration for the release by Mr. Walker of appellant in the event that it paid the check in violation of the stop-payment order, because of its oversight, accident or inadvertence.

In our opinion, therefore, it cannot be said that appellant had no cause of action against appellee because of the fact that it could charge the account of Walker with any loss sustained by it as a result of paying the check in question over the stop-payment instructions. The case was not fully developed with respect to appellant’s right, if any, to recover against appellee. The only testimony in regard to consideration for the check as between appellee and Mr. Walker was the latter’s testimony that he gave the check to Martin based upon some agreement with Mr. Martin to perform some service for him (Walker), and that Martin did not do it. In view of the court’s granting Martin’s motion for judgment at the conclusion of appellant’s evidence, it was not necessary for Mr. Martin to take the stand in his own behalf and he did not do so. We express no opinion with respect to the controversy which may arise between Martin and Walker upon another trial. Insofar as the relations between appellant and Martin are concerned, the evidence shows that as a result of appellant’s failure to observe the stop-payment order, Martin received from appellant funds that he should not have received.

Appellant pleaded and now contends that it is entitled to recover from Martin the money it paid him, because the same was paid under a mistake of fact, and if appellant does not recover appellee will be unjustly enriched. The law is well settled that money paid under a mistake of fact caused by carelessness, negligence or forgetfulness may be recovered. See 44 Tex. Jur.2d § 77, p. 750, and also p. 752, where it is said: “The reason for the rule is that the payee ought not to retain what in conscience does not belong to him as against the person to whom in conscience it does belong.” So far as the record shows, the trial court did not pass upon the question as to whether or not Mr. Martin was unjustly enriched, or whether the negligence of appellant, in overlooking the stop-payment order and paying him the amount of the check, caused Martin to alter or change his position in a way that he would be damaged if required to return the money. As to what constitutes change of position by payee so as to preclude recovery of payment made under mistake, see Annotation in 40 A.L.R.2d p. 997. See also Clark v. Bradley, Tex Civ.App., 270 S.W. 1050.

It is our view that the duty was upon appellee to plead and prove his injury, if any, arising from appellant’s negligence, since this is a matter peculiarly within his knowledge. Rule 94, Texas Rules of Civil Procedure; Capital National Bank in Austin v. Wootton, Tex.Civ.App., 369 S.W.2d 475; writ dism., and authorities cited. In that case the court said:

“The conclusion of the Trial Court that appellee was not shown to have been unjustly enriched by having received the proceeds of check 7215 is refuted by the record insofar as such payment to him by the bank is concerned. He has the bank’s money, and he has no right to the bank’s money. This is enrichment; it is also unjust.” See also First-Wichita National Bank v. Steed, Tex.Civ.App., 374 S.W.2d 932, no writ.

We are of the opinion that the trial court erred in rendering judgment against appellant at the conclusion of its evidence. The judgment of the trial court is reversed and the cause remanded for a new trial in order that, upon proof by appellant that it paid Martin the $350.00, and upon proof of Martin’s unjust enrichment, he may be given an opportunity to plead and prove his damages, if any, as a result of appellant’s negligence, and to prosecute his claim, if any, over against Walker because of the stop-payment order.

Reversed and remanded.