author: WILLIAMS, Justice.

text:
    GOLDEN STATE MUTUAL LIFE INSURANCE COMPANY, Appellant, v. Almeda WHITE et al., Appellees.
    No. 16295.
    Court of Civil Appeals of Texas. Dallas.
    Jan. 10, 1964.
    Rehearing Denied Feb. 7,1964.

      W. J. Durham and E. Brice Cunningham, Dallas, for appellant.
    R. L. McSpedden and Waller M. Collie, Jr., Dallas, for appellees.
   WILLIAMS, Justice.

Golden State Mutual Life Insurance Company (hereinafter called Company) brought this action against Almeda White and her husband, Marvin White, and Leon D. Dorsey, doing business as Dorsey Funeral Home, to cancel a policy of life insurance issued by the Company and naming E. (Ezella) Malone as insured, and seeking to permit plaintiff to deposit in the registry of the court the full amount of premiums paid on said policy, together with six percent interest thereon. As grounds for cancellation of the policy it was alleged that Almeda White, being the daughter of Ezella Malone, made application for the policy involved and that in so doing she gave false answers therein concerning the health of her mother ; that the answers were untrue and made for the purpose of having the insurance company rely thereon in the issuance of the policy of insurance. Dorsey was shown to have been the assignee of a portion of the proceeds of the policy. The defendants answered, denying the allegations upon which cancellation was sought by plaintiff and, by cross-action, alleged that Ezella Malone was dead and that Almeda White, the beneficiary, was entitled to recover the proceeds of the policy, including double indemnity benefits, plus attorneys’ fees and interest. The plaintiff, by amended answer to the cross-action expressly denied that Ezella Malone died as a result of an injury independently of all other causes and solely through external, violent and accidental means within the meaning of the terms of the policy.

At the conclusion of a jury trial the case was submitted upon numerous special issues and, in response thereto, the jury found (1) that the application for the insurance policy in question (signed by Almeda White) did not contain any false statement as to the prior epilepsy of Ezella 'Malone at the time such application was presented to the insurance company; (6) that the application did not contain a false statement as to the prior high blood pressure of the deceased; (11) that the application in question did not contain a false statement concerning a prior hypertensive cardio-vascular disease of the deceased; (16) that the application for insurance did contain a false statement as to prior treatment by a physician of the deceased and (17) that such false statement was to a material fact but (18) such false statement was not made by Almeda White with intent to induce the insurance company to issue said policy; (21) that the application did contain a false statement as to the prior treatment and confinement in a hospital of the said Ezella Malone and (22) such false statement was to a material fact hut (23) such false statement was not made by Almeda White with intent to induce the insurance company to issue the policy; (26) that Almeda White, in the application for insurance in question, represented that Ezella Malone was in good health at the time the application was made but (27) such false representation was not as to a material fact at the time it was made. Based upon this verdict of the jury judgment was rendered in favor of defendants for the full amount of the insurance policy, together with double indemnity benefits, plus attorneys’ fees and interest. From this judgment the Company appeals, assigning twenty-five points of error.

By its first point appellant complains of the action of the trial court in rendering judgment against it because “there was not sufficient legal evidence in the record to support said judgment”. This point is too general for our consideration. Phillips v. Le Gallez, Tex.Civ.App., 329 S.W.2d 922; Muncy v. General Motors Corporation, Tex.Civ.App., 357 S.W.2d 430.

By its second point appellant contends that there is no basis for the judgment because “there was not sufficient pleadings filed on the part of the appellees to support such judgment under the terms of the policy upon which said suit was predicated”. This point, likewise, is too general and vague to meet the requirements of the briefing rules. Consolidated Forwarding Co. v. Union Truck Depot, Inc., Tex.Civ.App., 356 S.W.2d 693. Even so, we have examined the pleadings and believe that they are amply sufficient. Admittedly appellees did not plead in great detail concerning the double indemnity provisions of the policy. Appel-lees pled “and that death resulting from such cause resulted in the applicability of the double indemnity provision of the policy of insurance”. While this allegation is general it does refer to the provisions of the policy and in the absence of a special exception directed thereto we are of the opinion that such general allegation was sufficient to give notice to appellant that appel-lees were pleading to recover the double indemnity benefits under the express terms of the policy issued by appellant. We therefore overrule appellant’s second point of error.

By its third point of error appellant says that the court erred in submitting Special Issue No. 1 and resting the judgment upon the answer thereto for the reason that the answer of the jury to such issue is without any legal evidence to support the same and is without any pleadings to support the same. This point is obviously multifarious and therefore in violation of the briefing rules. Rule 418 Texas Rules of Civil Procedure; Texas Mexican Ry. Co. v. Bell, Tex.Civ.App., 110 S.W.2d 199. It should be observed that Special Issue No. 1, inquiring as to a false statement made by appellee Almeda White in the application for insurance, was appellant’s own issue. Appellant had pleaded such alleged false statement as a basis for cancellation of the policy. The burden of proof is upon appellant to secure a finding on this issue. Therefore, appellant is taking a peculiar position to complain here that its own pleadings were inadequate. As to the sufficiency of the evidence to support the jury’s answer to such issue we have carefully examined the statement of facts and find that there is evidence to support said negative answer given by the jury. Accordingly, appellant’s third point is overruled.

By its fourth, fifth, sixth, seventh and eighth points of error appellant complains of the action of the trial court in submitting Special Issues Nos. 6, 11, 18, 23 and 27 to the jury and basing judgment thereon for the reason that there is no legal evidence or proper pleading to support the submission of said issues to the jury and the answer of the jury to each of said issues is without any legal evidence to support same. All of these points must be overruled. In the first place the points are multifarious and do not comply with the briefing rules. Secondly, appellant made no objection to the submission of either of said issues as required by Rule 274, T.R.C.P., and therefore any objection is now waived. Moreover, each of said issues is appellant’s own issue and it is in no position to complain of lack of pleadings or evidence to justify the submission of said issues to the jury. Finally, as to that part of these points constituting “no evidence” points we have examined the answer of the jury to each of said issues in the light of the rule announced in In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, and find some evidence in the record to support the answers of the jury to each of said issues.

Appellant’s Points 9, 12 and 13 present the contention that there is no evidence in this record to demonstrate the creation of a valid contract of insurance between the insurance company and the insured, Ezella Malone. Appellant contends that in the absence of any testimony demonstrating the meeting of the minds of the contracting parties that the trial court should have instructed a verdict in its favor or, in the alternative, should not have rendered a judgment against it under the undisputed record.

We cannot agree with appellant’s contentions for several reasons. First, there are no pleadings on behalf of appellant insurance company supporting this theory of cancellation. In its suit to cancel the insurance policy, which it admittedly issued covering the life of Ezella Malone and naming the appellee Almeda White as beneficiary, appellant urges only one ground for such cancellation, namely, false representations on the part of appellee concerning the insured’s health. Appellant does not allege lack of mutuality as grounds of cancellation. Moreover, even assuming pleadings sufficient to raise the question, we would be required to overrule these points for the reason that the facts are not undisputed, as contended by appellant. The record reveals that appellant’s insurance agent, Tiger Brown, approached appellee Almeda White and urged her to take out a policy of insurance on the life of her mother; that he prepared the application for said policy at a time when he knew that the insured was not present; that he took the application from the appellee after personally filling out the answers to the questions concerning insured’s health; that he collected premiums from the appellee; that he knew the appellee signed the application; that he instructed appellee to sign the application; that appellee paid all of the premiums on the policy and that the appel-lee received the policy from the insurance company. Appellee Almeda White testified that she had been planning on taking out a policy of insurance on her mother and her brother but that she did not have the money at the present time. She said that the agent told her that he would go ahead and write the policies for her and that she could make the premium payments later. We find some evidence in this record to the effect that ap-pellee Almeda White intended, especially after urging by appellant’s agent, to take out the policy of insurance in question on the life of her mother and that in doing so she was not acting for her mother or as her agent. Our Supreme Court, in the early case of Cheeves v. Anders, 87 Tex. 287, 28 S.W. 274, held that it is perfectly legal for one who is interested in the life of another to become the owner of insurance upon the life of such other person and that such policy may be taken out in the first instance by the • interested party, with or without the consent of the insured. Absent fraud, there is nothing illegal about a daughter taking out a policy of insurance covering the life of her mother and paying the premium thereon and becoming the beneficiary therein.

Appellant’s Points 9, 12 and 13, as “no evidence” points, must’be overruled also because there is some evidence in this record to contradict appellant’s position, and since appellant made no request of the court to submit any issue of fact to the jury concerning this'phase of the case, such contention is waived.

By its Points 10 and 11 appellant assails the judgment of the trial court awarding recovery of double indemnity benefits, contending that appellees wholly failed to meet their burden of proving that the deceased died as a result of bodily injury and independent of all other causes as provided by the insurance policy. We agree with appellant that these points should be sustained.

Appellees alleged that they were entitled to double indemnity benefits under the terms of the policy of insurance in question. The policy provided that the company would pay double indemnity benefits upon “receipt of due proof of the death of the insured as a direct result of bodily injury and independent of all other causes, effected solely through external, violent and accidental means * * * ”, (Emphasis supplied.) The hospital records demonstrate that Ezel-la Malone was admitted on June 28, 1961 at which time her condition was diagnosed as “third degree burns, hypertension and epilepsy”. There is evidence that the deceased was suffering from severe burns and the death certificate (which will be discussed more fully in connection with succeeding points) reveals that her death was caused by “burns, third degree — over fifty percent”. There was also some evidence in the record indicating that the deceased had fallen against a heater causing her clothes to become ignited. Appellant did not resist the idea of accidental death but contended that the accident was caused and brought about by an epileptic seizure which contributed to cause the death of the insured. There is ample evidence in the record to demonstrate that the deceased had been suffering from epilepsy over a period of time prior to her death.

The law is clear that when ap-pellees pleaded that the deceased died under conditions which brought into play the accidental double indemnity benefits of the policy itself, and when the appellant pleaded the exceptions in the policy, the burden rested upon appellees to prove the death of the insured did not come within the exceptions from liability stated in the policy. Sublett v. American Nat. Ins. Co., Tex.Civ.App., 230 S.W.2d 601. While we think that the pleadings of appellees are sufficient we think that the proof offered in support thereof is wholly inadequate to meet the burden imposed upon them. There is no testimony in this record that Ezella Malone died as the direct result of bodily injury and independent of all other causes, effected solely through external, violent and accidental means. These matters can never be presumed. It is a fact that must be proven by competent evidence. Pan-American Life Ins. Co. v. American Industrial Investment Co., Tex.Civ.App., 207 S.W.2d 173, err. ref. n. r. e It is also well settled that death caused by an accident is not legally the same as death caused by accidental means. Death may be accidental but not due to accidental means. This is clearly demonstrated by our Supreme Court in the case of Bryant v. Continental Casualty Co., 107 Tex. 582, 182 S.W. 673, L.R.A.1916E, 945. Since ap-pellees proved only that the deceased died as a result of an accident but did not go further and negative the requirements of the policy, we think that the court erred in rendering judgment for double indemnity benefits.

By its Points 14 and 15 appellant complains of the action of the trial court in sustaining appellees’ alleged objection to a portion of appellant’s Exhibit No. 1, being the death certificate introduced by appellant as a part of the proof submitted by the appellees of the death of Ezella Malone and in support of their claim. We think these points are well taken and should be sustained.

The record in connection with Exhibit 1 is rather confused but, after careful study, reveals that at the beginning of the trial appellant offered in evidence the Exhibit 1, being a purported certified copy of death certificate of Ezella Malone. Thereupon appellees made no objection to the authenticity of this instrument but advised the court that they would object to those parts of the death certificate which were not recitations of fact. The court reserved ruling upon specific objections until such time as the instrument would be read to the jury. Later on during the trial the question of the admissibility of this instrument was again presented and the appellees stated that they would object to the consideration by the jury of one statement contained in the exhibit being: “Epileptic who had seizure and fell against heater and clothes caught on fire”. The objection was very general and indefinite. After considerable discussion the trial court stated that he would sustain the objection to this statement. Thereupon counsel for appellees admitted that the death certificate was the same one that was submitted by appellees to appellant as a part of proof of loss and claim for benefits under the policy. At this time appellant then re-offered Exhibit 1 as a part of the proof offered by appellees to appellant requesting payment on the policy. The court again sustained objection of ap-pellees to that part of the instrument recited above and allowed the entire instrument to go to the jury with the exception of the one quoted portion. We think that since the certificate was offered by appellant for the limited purpose of showing that appel-lees had submitted the certificate to appellant for the purpose of making claim under the policy that same should have been admitted for that purpose only.

By appellant’s Points 17 through 22, inclusive, appellant contends that the court erred in rendering judgment for ap-pellees upon the jury verdict for the reason that the answers of the jury are sufficient to support a judgment for appellant. The gravamen of these points is that since the jury found that certain representations were made to obtain the insurance, and such representations were false and with reference to a material fact, it was not encum-bent upon appellant to proceed further to secure finding of the jury that such false representations were intentionally made for the purpose of deceiving the insurance company and inducing it to issue the policy. We cannot agree with appellant on these points. The law seems to be settled that where an insurance company seeks to cancel a policy of insurance because of alleged misrepresentations in the application the insurance company must plead and prove not only that the answers were false but that the party making such false answers made them willfully and with the intention of inducing the insurance company to issue the policy. The question was settled by our Supreme Court in Clark v. National Life & Accident Ins. Co., 145 Tex. 575, 200 S.W.2d 820, in ruling upon the identical point. There the court said:

“It is also well settled in this State that to avoid a policy of insurance because of misrepresentations, the burden is on the insurer to plead and prove, not only that the answers made by the insured were false or untrue, but that the insured knew, or should have known, that they were untrue, and that he made them willfully and with the intention of inducing the insurer to issue him a policy.”

This same rule has been recently reiterated in Occidental Life Ins. Co. of California v. King, Tex.Civ.App., 365 S.W.2d 815, err. ref. n. r. e. See also Golden State Mutual Life Ins. Co. v. Pruitt, Tex.Civ.App., 357 S.W.2d 812; Roosth v. Lincoln National Life Ins. Co., 5 Cir., 269 F.2d 171; Great Southern Life Ins. Co. v. Doyle, 136 Tex. 377, 151 S.W.2d 197; Universal Life & Accident Ins. Co. v. Murphy, Tex.Civ.App., 368 S.W.2d 878; and Jefferson Life Ins. Co. v. Kuehler, Tex.Civ.App., 298 S.W.2d 619.

Appellant relies upon the case of Inter-Ocean Ins. Co. v. Ross, Tex.Civ.App., 315 S.W.2d 71, no wr. hist. While this case contains wording which might be construed in support of appellant’s contention we believe that the decision in this case is governed by the opinion of our Supreme Court in Clark v. National Life & Accident Ins. Co., supra.

We have carefully considered the remainder of appellant’s points and finding the same to be entirely without merit, they are overruled.

In view of what we have said in connection with appellant’s Points 10 and 11 above as well as Points 14 and 15, and in the interest of justice, we believe that the judgment of the trial court should be reversed and remanded for another trial.

Reversed and remanded.


source: Caselaw Access Project

author: HUGHES, Justice.

license: Public Domain

text:
    Katherine Abbey CHRISTIE et al., Appellants, v. Morris W. BREWER, Appellee.
    No. 11139.
    Court of Civil Appeals of Texas. Austin.
    Jan. 22, 1964.
    Rehearing Denied Feb. 12,1964.

      Baker, Botts, Shepherd & Coates, Robert A. Hall, Houston, for appellants.
    Ellis F. Morris, Houston, for appellee.
   HUGHES, Justice.

This suit is brought to rescind purchases of stock in Ambrosia Minerals, Inc., by Morris W. Brewer from B. V. Christie and Co., made during the period April 12, 1957 through February 21, 1958, and to recover the purchase price paid therefor and 6% interest thereon from the purchase dates, less certain dividend receipts.

The persons sued were Katherine Abbey Christie, a feme sole, who was sued individually and as Independent Executrix of the Estate of Byron V. Christie, deceased, Mrs. E. A. Millar, a feme sole, and Calvin L. Allen.

B. V. Christie and Company was at the time of the transactions involved in this suit a proprietorship, owned by B. V. Christie and wife Katherine Abbey Christie. Upon the death of Mr. Christie all interest in B. V. Christie and Company became vested in Mrs. Christie, subject to the administration of his estate.

Mrs. E. A. Millar, a sister of Mrs. Christie, held an executive position with B. V. Christie and Company during the period in which the presently involved transactions occurred.

Calvin L. Allen was a salesman for B. V. Christie-and Company when the purchases complained of were made.

Liability of Mrs. Christie is sought solely on the ground that she is the owner of the assets of B. V. Christie and Company.

The liability of Mr. Allen and Mrs. Mil-lar was sought to be predicated upon their alleged violation of the Texas Securities Act and the Federal -Securities Act of 1933.

Trial was to a jury. Based upon the jury verdict, judgment was rendered for ap-pellee for the sum of $20,139.08, plus interest as sued for, against the persons sued, jointly and severally. These persons, appellants here, seek reversal and rendition of judgment in their behalf or, in the alternative, that the cause be reversed and remapd-ed for a new trial.

Appellants seek rendition of ■ judgment in their favor because of. their contention that appellee did not make a tender of stock in compliance with;Art, 581-33, Vernon’s Ann.Civ.St., which provides, in part:

“Every sale or contract of sale of any security made in violation of any provision of this Act shall be voidable at the election of the1 purchaser, who shall be entitled to recover from the seller in ah action at law, upon tender -to’ 'the seller of the-security sold, in-, proper .form'for transfer, togéther with the amount of all dividends, interest, and other income and distributions received by the purchaser from or upon such- security, the full amount paid by. such purchaser for such security, with interest from the date of purchase; * * . * and provided further, that no purchaser shall bring any. vaction under this Act against the seller unless (1) at least fifteen (15) days before filing suit, he shall have made a written demand on the seller for a refund of the full amount' paid' by the purchaser for the security, with interest from the date of purchase, less the amount of any income from such secur- . ity that may have been received by the purchaser, and he shall have tendered to the seller the securities sold in proper form for transfer, and (2) the seller shall not have made such refund and accepted such tender within the said • fifteen (15) days.”

In making demand- upon appellants for a refund of the amount paid for the 13,000 shares of Ambrosia stock purchased from B. V. Christie and Company, appellee erroneously stated that the amount paid for them was $24,279. Appellee concedes that the correct amount should have been $22,-325.97.

The statute, supra, does not require that the- demand for refund state the amount paid for the- stock. Appellee in making demand did more, albeit inaccurately, than was required of him. We do not believe that he thereby forfeited his rights under the Securities Act. The excessive demand caused no harm. It was a matter concerning which the truth was peculiarly known to appellants, as well as to appellee, hence the error was equally palpable to them, and they were not misled.- In Athans v. Jones, 277 S.W.2d 192, Fort Worth Civil Appeals, no writ history, it is stated, “We think the true rule is that an exorbitant demand does not excuse a tender of the amount actually due.”

Appellants have waited for more than three years before complaining'that the demand was excessive. They do not now say nor have they ever indicated that they would have made refund had the proper amount been demanded.

We hold that this point is without legal or equitable support, and it is overruled.

Appellants have several other-points upon which they rely for a reversal and remand of this case. We have concluded that the first three points which relate to-the failure of the Court to quash "the jury panel or grant a mistrial because of remarks made by counsel for appellee to such jury panel on th-eir.voir dire examination should be sustained. . Accordingly, we will, discuss such points and only such other points as may arise upon re-trial.

Prior to the voir dire examination of the jury panel appellants made and presented a motion in limine requesting that the Court instruct counsel for appellee not to mention to such panel, either directly or indirectly, that defendant (appellant) Calvin L. Allen was at that time under indictment by the United States of America or the fact that the defendant (appellant) Mrs. E. A. Millar had been named in an indictment as a co-conspirator with Calvin L. Allen. This motion was overruled, after which counsel for appellee stated to the jury panel:

“Now, we think the evidence will show in this case that one of the parties who is a defendant is under indictment by the Federal Grand Jury for matters arising out of these same transactions, and that another one of the defendants is named in the Federal indictment as a co-conspirator in connection'with matters arising out of this lawsuit.”

Appellants objected to these remarks when made. They also filed a motion to strike the jury panel and, in the alternative, for a mistrial based on the improper and inflammatory remarks of counsel for appel-lee. This motion was overruled. On the following day the Trial Judge announced that he was changing his previous order on appellants’ motion in limine and was sustaining their request for the instructions mentioned above. Upon this occurrence, counsel for appellants again moved for a mistrial, stating:

“In light of the ruling of the Court sustaining my first two paragraphs in the motion in limine, the defendants again would like to move for a mistrial in this case on the ground that plaintiff’s remarks to the jury during the voir dire examination to the effect that one or more of these defendants were under indictment would be so prejudicial as to make it impossible for these defendants to receive a fair jury trial from the jury selected from that jury panel, especially in the light that this matter would be just sort of suspended in the air now and they will be wondering which of the defendants were indicted and on that ground we move for a mistrial.”

This motion was overruled. The trial was conducted before a jury selected from the panel which heard the remarks of ap-pellee’s counsel.

The pendency of this indictment was not admissible evidence. Quesada v. Graham Ice Cream Co., 207 S.W.2d 120, Austin Civil Appeals, no writ history, cited with approval by the Supreme Court in Condra Funeral Home v. Rollin, 158 Tex. 478, 314 S.W.2d 277.

Appellee contends that this error is harmless under Rule 434 Texas Rules Civ.Proc., which provides, in part, that no case shall be reversed on appeal unless “ * * * the error complained of amounted to such a denial of the rights of the appellant as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case * *

In Peek v. Parker, 210 S.W.2d 619, Fort Worth Civil Appeals, no writ history, the defendant was asked, “By the way, I believe you are under felony indictment in this court? A. Yes.” The Trial Court instructed the jury not to consider the question and answer, but he refused to grant a mistrial motion. In holding this reversible error the Court of Civil Appeals stated:

“We have found no decision declaring it to be harmless error to undertake to impeach a witness by showing an indictment against him. The verdict in the present case is reasonable as to amount, and there is ample evidence to support the findings relating to liability. But it must also be said that the evidence would have supported contrary findings, both as to liability and as to damages. Evidence that a person is under a felony indictment is from its nature calculated to be damaging. We do not believe that the error was harmless, nor do we believe that an instruction from the court would have removed the harm. Throughout their consideration of the case the jury could not have forgotten that the defendant had been indicted as a felon, and it is reasonably probable that they considered such fact in arriving at their verdict. To hold otherwise, we believe, would set a precedent that would invite commission of the same error in similar situations.”

We have read the long statement of facts. The evidence is as conflicting as it is possible for evidence to be. If under these circumstances the error committed be held benign then in every such case hereafter tried evidence of indictments could be freely used with impunity. We do not know what a jury will do upon re-trial. There is ample evidence to- support a verdict either way. We do know that appellants did not receive a fair trial and that they were irretrievably harmed by the cloud cast over them.

In Pittman v. Baladez, 158 Tex. 372, 312 S.W.2d 210, the Court in discussing Rule 434 stated:

“This brings us to a consideration of the question of whether the improper • evidence probably influenced the verdict unfavorably to petitioner. This question is to be determined as a matter of our judgment in the light of the record as a whole. Pittman, in order to discharge his burden of establishing the inadmissible evidence was prejudicial, was not required to prove or demonstrate that but for the erroneous action of the trial court in admitting the testimony, a different judgment would necessarily have resulted. * * * It was only necessary that he establish that the evidence was reasonably calculated to and probably did cause the rendition of an improper judgment. * * *
“Since the question of which vehicle crossed the center stripe was a vital issue in the case, and since the admissible evidence introduced by both parties was so evenly balanced, we conclude that the introduction of the incompetent evidence given by Spivey, in the light of the record as a whole, amounted to such a denial of the rights of the petitioner as was calculated to cause and probably did cause the rendition of an improper judgment in the case.”

We have a similar situation here and we hold that the error reflected was not harmless under Rule 434.

Point four asserts error in the conditional submission of Issue .32. The two involved issues are:

“Special Issue No. 31
“When do you find from a preponderance of the evidence that Morris W. Brewer discovered that the Ambrosia Minerals, Inc. stock was not registered under the Securities Act of the State of Texas?
“Answer: By stating the month and year.
“A. May 1959.
“If you have answered Special Issue No. 31 by date prior to July 16, 1957, then answer:
“Special Issue No. 32
“Do you find from a preponderance of the evidence that Morris W. Brewer by the exercise of ordinary care should have discovered prior to July 16, 1957 that Ambrosia Minerals, Inc. stock was not registered under the Securities Act of the State of Texas?
“Answer: We do’ or We Do Not.' "

Issue 31 was answered: “May 1959.” Issue 32 was not answered. From April 12, 1957 until August 22, 1957 the statutes which governed the transactions in question were those found in The Securities Act, General and Special Laws of the State of Texas, 54th Legislature, Regular Session, 1955 and which statutes were also set out in Article 579-1 through Article 579-42 of The Securities Act, Vernon’s Texas Civil Statutes. On August 23, 1957, Articles 581-1 to 581-39 of The Securities Act, Vernon’s Texas Civil Statutes, became effective and repealed the statutes cited in the preceding sentence. Article 581-33 of The Securities Act, Vernon’s Texas Civil Statutes under which the appellee brought this action provides that

“ * * * any action by a purchaser to enforce any right or liability based upon any sale made in violation of any provision of this Chapter or any Acts predecessor thereto or amendatory thereof or upon any misrepresentation made in connection with such sale, shall be commenced within two (2) years after the purchaser thereof has knowledge that such sale was made in violation of any provision of this Chapter, or Acts predecessor thereto or amenda-tory thereof, or upon a misrepresentation, or within two (2) years after such purchaser, by the exercise of ordinary care, should have discovered that such sale was made in violation of this Act or Acts predecessor thereto or amendatory thereof, or upon a misrepresentation, and not thereafter; *

This same two-year limitation was contained in § 34 of The Securities Act, General and Special Laws of the State of Texas, 54th Legislature, Regular Session, 1955, and Article 579-34 of The Securities Act, Vernon’s Texas Civil Statutes.

Appellants pled that appellee’s cause of action was barred by the two-year limitations referred to above.

This suit was filed July 16, 1959.

Appellants concede that Issue 31 was properly submitted. The answer “May 1959” obviated the defense of limitation based on actual knowledge. It had no bearing, however, on the defense of limitation based on knowledge which appellee should have gained by the exercise of ordinary care as provided in Art. 581-33, supra. Special Issue 32 was properly framed and should have been unconditionally submitted if the evidence raised the issue. As to this appellants state the evidence was sufficient and appellee enters a denial. We will not attempt to resolve this dispute by a review of the entire statement of facts. Apparently the Trial Court thought the evidence ample. If upon re-trial he reaches the same conclusion, then the issue should be unconditionally submitted.

Points eight and nine are jointly briefed, they complain of the failure of the Court to admit evidence to the effect that appellant Allen had received instructions from his employer, B. V. Christie and Company, not to solicit sales in Ambrosia Minerals Inc. stock, and in the failure of the Court to submit an issue to the jury inquiring if Allen in making stock sales to appellee was acting within the scope of his employment.

These points are overruled. The evidence is conclusive, in our opinion, that Allen possessed apparent or ostensible authority to solicit appellee for the purchase of stock. He was an employed salesman of B. V. Christie and Company. A salesman without authority to solicit is 'of a very peculiar breed. Only by charging appellee with knowledge that the Ambrosia stock was unregistered and that this fact made it illegal for Allen to solicit its sales could the question of Allen’s authority arise under this record. The jury negatived knowledge by appellee that the stock was unregistered when purchased by him. See as to apparent authority, 2 Tex.Jur.2d Agency, Secs. 43-56. Also see Baker Hotel of Dallas v. Rogers, 157 S.W.2d 940, writ ref., w. o. m., Dallas Civil Appeals.

Points eleven and twelve are briefed jointly. They relate to the failure of the Trial Court to admit evidence to the effect that appellee had admitted that he had left the employment of Bache and Company not as he had testified for “health reasons,” but because he had fraudulently taken large sums of money belonging to his employer and to customers of his employer.

Appellants cite no authorities to sustain the admissibility of this evidence. They merely say that it would impeach ap-pellee’s testimony that he quit Bache and Company for reasons of health. These points are overruled. A witness may not he impeached as to statements made by him pertaining to collateral matters. The reason that appellee left the employment of Bache and Company is not an issue in this case. Also, the credibility of a witness may not be attacked by proving particular acts of misconduct. See Texas Law of Evidence, McCormick and Ray, 2d Ed. Secs. 690 and 655.

Point thirteen is that the Court erred in submitting Issue One to the jury over appellants’ objections. The issue and objections to it are:

“Do you find from a preponderance of the evidence that B. V. Christie & Co., its agents, servants or employees, issued, distributed or published within this State any circular, advertisement, phamphlet, prospectus, program or other matter as to Ambrosia Minerals, Inc. on or about April 12, 1957?
“Answer 'We do’ or ‘We do not.’
“The defendants objected to the submission of Special Issue No. 1 on the grounds that there was no evidence to raise the issue, the evidence was insufficient to raise the issue, an affirmative finding on the issue would have been against the great weight and overwhelming preponderance of the evidence, said issue constituted a general submission in that it did not specify which agent, servant or employee was inquired about, and further because ‘said issue is multifarious and duplicitous because it inquires about more than one act, namely whether said employees issued or distributed or'published any circular or advertisement, or pamphlet or prospectus and also inquires as to other matter. The issue is further multifarious and duplicitous in that by virtue of the definition of “agent” as contained in the charge, it implied that the agents, servants or employees of B. V. Christie & Company were within the course and scope of their employment while it was contradicted under the evidence as to whether defendant Allen was in the course and scope of his employment. The defendants also objected to Special Issue No. 1 on the grounds that ‘There is no pleading to support the submission of the question as to whether “other matter” were distributed by B. V. Christie & Company, its agents, servants or employee.’ ”
The jury answered, “We do.”

Appellants do not discuss the lack of evidence objection, and neither do we.

It is our opinion that the issue is not subject to the objections made except that the alternative of “other matter” should be omitted. This issue is in the statutory language found in the 1955 and 1957 Securities Act. These sections make it unlawful to advertise as to any security except in the manner therein prescribed. The “other matter” alternative was, no doubt, inserted to prevent a construction that the named means of advertising were exclusive. The “other matter” alternative should, if relied upon, be identified by pleading and evidence, and if so, similarly identified in any issue relating to it.

The prohibition of the statute is against unlawful advertising of securities. This is the ultimate issue to be determined. We believe that the various ways in which advertising may be made, as set out in the statute, may, if supported by pleading and evidence, be grouped and alternatively submitted as was done here by the Trial Court. We consider this manner of submission to be within the rule stated by Mr. Gus M. Hodges in his work on Special Issues, p. 115, that if “two questions are each evidentiary, so that together, or alternatively, they make up a single and controlling issue, a single issue defining them is not multifarious.”

The objection that the agents of the company were not named in the issue is overruled. The agents were readily identified in the record. Many issues are submitted which refer to the parties without naming them. It would do no harm to name the individuals, but we see no harm done in failing to name them. Names themselves are unimportant, except for identification.

We do not agree that this issue assumes that the agents referred to were acting within the scope of their employment. It does not so state, nor does it state any fact from which such assumption could be inferred.

Point fourteen is that the Court erred in Issue Two over the objections of appellants. The issue, answer and objections are:

“Do you find from a preponderance of the evidence that B. V. Christie & Co., through its employees Calvin L. Allen and Estelle A. Millar made sales of Ambrosia Minerals stock to Morris W. Brewer between April 12, 1957 and February 21, 1958, inclusive ?
“Answer ‘We do’ or ‘We do not.’
“In connection with the foregoing issue, you are instructed that the term ‘sales’ means any act by which a sale is made and the term ‘sale’ or ‘offer for sale’ shall include a subscription, an option for sale, a solicitation of sale, a solicitation of an offer to buy and attempt to sell or an offer to sell directly or by an agent or salesman or by circular, letter or advertisement or otherwise, including the deposit in a United States post office or mail box or in any manner in the United States mail within this State of a letter, circular or other advertising matter.
“Answer: ‘We do.’
“The defendants objected to this submission of Special Issue No. 2 as follows: After having objected to the issue on the grounds of no evidence, insufficient evidence, and an affirmative finding would have been against the great weight and overwhelming preponderance of the evidence:
“(d) Said issue is duplicitous in that it asks a question concerning course and scope of employment of Allen and Millar, and implies that said defendants were within the course and scope of their employment, and is further duplicitous and multifarious in that an affirmative finding would find both that sales were made and were made within the course and scope of the employment of Allen and Millar.
“(e) The defendants object to the definition of ‘sales’ as given in connection with special issue No. 2 because it constitutes a general charge and is also a question of law.
“(f) The defendants further object to said special issue in that it is duplicitous and multifarious in light of the definition given of ‘sales’ which inquires as to subscriptions, options for sale, solicitations of sale, solicitations of offers to buy and attempts to sell, and further it inquires whether such acts were accompanied by circular, letter or advertisement or otherwise.
“(g) Special Issue No. 2 is also too general in that it inquires as to acts within a period of time commencing April 12, 1957, and terminating February 21, 1958 and does not specify the dates that are within that period of time that are in issue in connection with the various sales, because there is evidence in this record from which the jury could find that sales as defined in special issue No. 2 were made at certain times within the period of time inquired about, but not at certain other times in said period of time.”

These objections are overruled. The state of the evidence respecting this is not discussed by appellants, and neither do we.

Some of the objections made come within the scope of our discussion under point thirteen, and will not be repeated.

The definition of the word “sales” is taken literally from the Securities Act of 1955 and 1957. (Sec. 2(e) of the 1955 Act and Sec. 4E of the 1957 Act). It is not, therefore, erroneous.

The sales involved were admitted in the pleadings of appellants. They denied that they were made in violation of law. Under this issue appellee was obligated to establish that such admitted sales were made by Mrs. Millar and Mr. Allen in order to fix their liability under the Act. Without a full discussion of the evidence we cannot determine the validity of this issue. If the evidence would support different findings as to different sales as to either Mrs. Millar or Mr. Allen the issue should be split accordingly. As briefed, we cannot answer this problem satisfactorily. If on the other hand the evidence applies equally to all sales and to both Mrs. Millar and Mr. Allen, we would find no fault with the method of submission.

Point fifteen is that Issues One and Two as answered do not form a sufficient basis for appellants’ liability under the Act. The contention here is that the answers to such issues are meaningless in view of the objections made to them and discussed by us under the two preceding points. Such discussion serves as our opinion here; accordingly, this point is to be considered overruled in conformity, however, with our expressions under such points.

Point sixteen is that the Trial Court erred in permitting testimony from strangers to this suit that Mr. Allen had solicited them to purchase Ambrosia stock through B. V. Christie and Company. We quote the testimony of Mr. Allen:

“Question: You didn’t ask anybody from 1957 to 1959 to buy a single share of Ambrosia Minerals stock?
"Answer: That’s right. I didn’t ask anybody to buy a share of that stock.
“Question: You did not from 1957 to 1959 solicit any offers to buy the stock ?
“Answer: Right.
“Question: You didn’t sell, or offer to sell for delivery or solicit orders for any of the shares of stock in Ambrosia Minerals ?
“Answer: That’s right.
“Question: During that period of time?
“Answer: That’s right.”

Appellee introduced this testimony from Mr. Allen and then he sought to impeach it by the testimony of other witnesses. If the solicitation by Mr. Allen of these witnesses was not admissible as original evidence then under the rule as suggested in Texas Law of Evidence, McCormick and Ray, 2nd Ed., Sec. 684, this testimony should be excluded on the ground that no impeachment may be made as to collateral matters.

In Richmond v. Hog Creek Oil Co., Tex.Civ.App., 229 S.W. 563, writ dism., Tex.Com.App., 239 S.W. 904, the question at issue was whether a deed of a married woman had been properly acknowledged before a notary who testified that he had complied with the statutes in taking the acknowledgment. On cross-examination the notary denied that he had failed to comply with the statutes in taking acknowledgments of other married women whereupon evidence was offered that he had so failed. This evidence was excluded and the Court in sustaining this ruling stated:

“ * * * it seems evident that to permit an investigation of the manner in which McEntire took the acknowledgments of the ladies named would be to enter upon a determination of a multiplied number of issues without any direct relevancy in the present suit. As we understand the rule, this cannot he done. The issue in the present suit was whether McEntire complied with our statutes in taking the acknowledgment of Mrs. Richmond, and the fact that on one or more other occasions he failed to properly take the acknowledgments of other married women was immaterial, and, being immaterial, he could not be contradicted in respect thereto.”

We would follow this case and McCormick and Ray and exclude this testimony unless it is admissible for some other reason. The only legitimate purpose for admitting this evidence, which occurs to us, is on the issue of the scope of authority of the agents Allen and Mrs. Millar. On this question see Vol. 2 Tex.Jur.2d Agency, Sec. 2. It should be particularly noted that “the admissibility of evidence of other similar transactions (to show the agent’s authority) is dependent not merely on what the agent himself has done in such other transactions, but also on the principal’s recognition of the agent’s right to do such other acts.”

The parties do not analyze the evidence applicable to the rules stated, and we will not do so; besides, the evidence may not be the same on re-trial.

Point seventeen is that the Trial Court erred in refusing to submit special requested issues one through twenty-three. The first seven issues inquired if Mrs. Mil-lar had solicited the stock sales made to ap-pellee. Submission of- these issues' was properly refused under the decision of Brown v. Cole, 155 Tex. 624, 29.1 S.W.2d 704, 59 A.L.R.2d 1011, which holds that “the seller may be any link in the chain of the selling process” or in the words of the Act he is one who performs “any act by which a sale is made.” Mrs. Millar as executive officer of the Christie Company and agent for it confirmed the sales to ap-pellee. This was certainly a link in the selling process. Accordingly, it was immaterial that Mrs. Millar did not solicit the sale. Mrs. Millar participated in a sale that was solicited.

The remaining issues requested by appellants relate to their asserted liability under the Federal Act, supra footnote 2. Ap-pellee does not brief this point and appears to- have abandoned his suit insofar as it is based upon the Federal Act. If we are incorrect in this, then we suggest that upon re-trial the issues requested by appellants as to this feature of the case be submitted to the jury if warranted by the evidence.

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

Reversed and remanded.

      . - Art. .581 -V.A.C.S. Some- of the stock sales’ were, made, when ,the predecessor -of this Act was in effect. 'See Acts 1955, 54th Leg., p. 322, Ch. 67.

      . Title 15, Secs. 77a-77aa, U.S.C.A.,

      , Sec. 22, Ch. 269, Acts 55th Leg.Reg. Sess.1957.
      Sec. 23, Cfi. 67, Acts 54tli Leg.Reg.Sess. 1955.


author: MASSEY, Chief Justice.

text:
    C. D. BROWN et ux., Appellants, v. Mike NELMS, Appellee.
    No. 16516.
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 24, 1964.

      Woodruff, Hill, Bader & Kendall, and David M. Kendall, Jr., Dallas, for appellants.
    Lancaster Smith, Dallas, for appellee.
   MASSEY, Chief Justice.

The appeal is from an order sustaining a plea of privilege. Suit was brought because of negligence alleged to have amounted to proximate cause of an automobile collision, and of the injuries and property damage resulting therefrom to plaintiffs, C. D. Brown et ux. The collision occurred in Montague County, Texas. Defendant Mike Nelms filed the plea of privilege to transfer the suit to Dallas County. The plaintiffs countered with controverting affidavit executed by their attorney, by which they sought to maintain venue in Montague County under Subdivision 9a, “Negligence” of Vernon’s Ann.Tex.St. Art. 1995, “Venue, general rule”.

We have concluded that the order sustaining the plea of privilege should be reversed.

At the venue hearing evidence was elicited from the defendant Mike Nelms, as well as from C. D. Brown, plaintiff. While their account of the collision differs in minor particulars, we have concluded that in any event the aggregate of all the evidence is of such character that to find that the defendant was not guilty of negligence proximately resulting in the Montague County collision, and in the injuries and damages of the plaintiffs, would be against the greater weight and preponderance of the whole of the evidence. Of this, more anon.

The matter of a theoretical finding by the trial court that the plaintiffs had not established their cause of action by a preponderance of the evidence in satisfaction of requirements under Subdivision 9a is not the only matter we are required to examine in the instant appeal. There were no findings of fact or conclusions of law. Therefore the burden of the plaintiffs on their appeal is to negative every hypothesis which might have served as a premise for the court’s order sustaining the defendant’s plea of privilege.

One theory, or theories, to be considered to have perhaps been that upon which the court entered its order would be that since the plaintiffs had at an earlier time filed the same suit in Dallas County against the ■same defendant, in which they had taken a voluntary nonsuit prior to the time it was filed in Montague County, the later filed suit was barred; — that plaintiffs were es-topped from filing another suit in any county other than that in which they filed their original suit; — that right to maintain venue in any other county was forfeited; — and/or that the plaintiff's were required, before they could file the suit in Montague County, to seek reinstatement of the suit previously filed and voluntarily nonsuited.

None of such, individually or collectively, would serve as a proper premise upon which an order sustaining defendant’s plea of privilege might be based. Where a suit is terminated voluntarily the defendant is discharged and litigation is ended. Thereafter any prosecution of the same suit must be by commencing an action de novo (excepting upon a successful motion by the plaintiff to obtain an order vacating the previous proceedings and a reinstatement of the cause to a status no different from that which would have obtained had it never been dismissed or nonsuited), and the suit as brought de novo may be instituted in any court of competent jurisdiction. This court so held in Wiley v. Joiner, Tex.Civ.App., 1949, 223 S.W.2d 539. See 20 Tex.Jur.2d, p. 224 et seq., “Dismissal, Etc.”, IV, “Effect of Termination”, § 40, “In general”, and § 42, “As bar to subsequent suit”. It is to be noticed that no plea of privilege was- ever filed in the Dallas County suit.

Another theory tp be considered to have perhaps been that upon which the court entered the order complained of would be that the affidavit to the plaintiffs’ controverting plea to the defendant’s plea of privilege was insufficient.

The plaintiffs did not, themselves, sign and verify the controverting affidavit. Their attorney did sign and verify it. The plaintiffs’ original petition setting forth their cause of action against the defendant (admittedly adequate and sufficient to state a cause of action predicated upon the defendant’s negligence) was adopted by the controverting affidavit as though it was made a part thereof. A copy was attached as an exhibit. It was additionally averred that the “allegations” of such petition were true and correct. The verification of the controverting affidavit reads as follows: “Before me, the undersigned authority, on this day personally appeared Robert P. Woodruff, known to me to be the person whose name is subscribed below and by me being first duly sworn, upon oath stated that he is the attorney for the Plaintiffs, C. D. Brown and Lorain Brown, in the above entitled and numbered cause, and that to his knowledge the allegations, denials and facts set out in the controverting plea are true and correct.”

It is observed that the defendant’s attorney argued before the trial court that the controverting affidavit, on its face, discloses that the attorney’s oath was based upon hearsay. With this we do not agree. Of course the hypothesis is somewhat ridiculous, but so far as the allegations of the controverting affidavit (and of the adopted original plaintiffs’ petition) are concerned, it would not be beyond the realm of possibility to assume that attorney Woodruff was in the automobile with the plaintiffs at the time the collision occurred, that he was a licensed physician as well as an attorney and that he attended their injuries, and that he was learned in the matter of monetary damages incident to automobile collision damage and was prepared to give sworn evidence as to their loss in respect to their automobile. Further, it might be assumed that attorney Woodruff interviewed the defendant in person, took a statement from him or officiated when his deposition was taken.

Of this we believe the defendant’s attorney to have been conscious, for at the plea of privilege hearing he put attorney Wood-ruff on the stand and proceeded to elicit testimony from him which established that he did, in fact, make the affidavit upon information obtained as result of investigating the collision and talking to witnesses. It is of interest to note that no question was asked of him about what he learned from the lips of the defendant, or even whether he had interviewed him.

But we believe that it would be immaterial of consideration by the court whether established by testimony or stipulation of counsel that the affidavit was based wholly on “hearsay”, for in the test to be made of the sufficiency of the affidavit a court should not consider such. What is proper to consider is the affidavit and oath, exclusively in and of themselves.

Whether the individual who has made the affidavit might, by reason thereof, be subject to charge and conviction for perjury is a matter which is to be left for attention in a criminal proceeding, of no concern to the trial judge when he sits for purposes of hearing a plea of privilege. It would not be proper to impeach the controverting affidavit of him who was the affiant, even by his own testimony. If such should constitute testimony admitted on the hearing it should not be given consideration. McDonald, Texas Civil Practice, p. 450 (as supplemented) “Venue”, § 4.49 “(Reply to Plea of Privilege) — -(III) Contents”.

There is no question but that if the controverting affidavit had been executed by the plaintiffs themselves it would have been sufficient. Being proper for them to have made the affidavit, it could be made by their agent or attorney. Texas Rules of Civil Procedure, rule 14, “Affidavit by Agent”. This court has in recent years had occasion to pass on the question. See Nunneley v. Weiler, Tex.Civ.App., 1951, 244 S.W.2d 707, to the opinion in which we adhere.

We revert to the matter of the nature of the collision and proof thereof. It is clear from the record that there is no doubt but that the collision occurred in Montague County and that the plaintiffs did sustain injuries and property damages as proximate result thereof.

The true question relates to the matter of the defendant’s negligence, and to the matter of whether such negligence, if established, amounted to a proximate cause. As we see it in this case the trial court must be treated as having “refused to find negligence”, and, dependent first upon •our manifest opinion that he erred in such refusal, be further treated as having “refused to find that such negligence amounted to a proximate cause of the collision”. The burden was cast on the plaintiffs to plead, prove, and obtain affirmative fact findings that the defendant was guilty of negligence which amounted to a proximate cause of the collision and their resulting injuries and damages under the subdivision of the general venue statute selected by them as the legal premise for their right to maintain their suit in the county in which it was filed. Clark, Venue in Civil Actions, Ch. 9A, “Negligence”, Par. 5, “Proof Necessary to Sustain Venue”.

The collision occurred about four miles east of Bowie, Texas, on U. S. Highway No. 287, on November 2, 1962, at approximately 5:00 P.M., at a time when the weather was cool and dry. Whether the pavement was wet or dry, or whether it had any character of foreign substance on it of the nature of dirt or pebbles is not shown. It was a paved or “black-topped” highway approximately twenty-two (22) feet in width, with graveled shoulders to either side of the pavement. The defendant was driving his automobile in a westerly direction along with other traffic headed in the same direction. The plaintiffs were driving in an easterly direction and meeting up with the automobile driven by the defendant. Shortly before the time of the collision the defendant had passed another automobile headed in the same direction he was driving. He was proceeding at about fifty-five (55) miles per hour, and was approaching the next automobile ahead of him going the same direction, west, when he suddenly realized that he was approaching it more rapidly than he had anticipated. This other automobile was traveling at approximately forty (40) miles per hour. The defendant applied his brakes slightly, only to discover that he was still approaching the other automobile too rapidly to suit him, so he applied his brakes more forcefully. When he did this the rear end of his automobile jerked to the left, and in order to counter this motion he cut his front wheels to the left so that his automobile was driven over onto the south and left-hand, to him, side of the pavement. Simultaneously the automobile of the plaintiffs was in the act of passing that of the defendant. The result was that the front of the defendant’s automobile struck the side of that of the plaintiffs’.

There was no evidence of anything other than the speed of the defendant’s automobile, and/or the application of its brakes, which caused it to be driven onto the south side of the highway, — or be so out of control that in regaining control of it the defendant drove onto the south side of the highway, and into the automobile of the plaintiffs. The evidence did not raise the issue of unavoidable accident, and therefore it could not have been or should not have been considered to have played a part in the collision. The introduction of evidence which might amount to “excuse” for the automobile having been driven onto or allowed to be on the south side of the center of the highway would be the defendant’s burden. No evidence upon the matter of excuse was introduced. The issue was not raised and is not a matter for our consideration. Therefore we are of the opinion that it could not have been or should not have been considered to have played any part in the collision for purposes of the plea of privilege hearing.

We have concluded that it was undisputed that the defendant drove his automobile onto the left-hand, to him, side of the highway. That being true the defendant was guilty of negligence per se for such an act is in violation of V.A.T.S., Art. 6701d, “Uniform Act Regulating Traffic on Highways”, Art. VI, “Driving on Right Side of Roadway; * * * ”, § 52, “Drive on right side of roadway; exceptions”. The defendant’s negligence was established as a matter of law.

That the negligence was a proximate cause of the collision which occurred may not he considered to have been established as a matter of law. For purposes of our review (there having been no findings of fact or conclusions of law), we must consider that the trial court found that the negligence was not a proximate cause when tested by a preponderance of the evidence, or that he refused to make such a finding. To make or refuse to make the finding was the exclusive province of the “finder of fact”. We do not believe that this court has the authority to make a contrary affirmative fact finding, but it is our duty to reverse the trial court’s judgment and remand the cause if we reach the conclusion that failure or refusal of the court in that respect was against the great weight and preponderance of the evidence. We have reached this conclusion.

Judgment is reversed and the cause remanded.


author: LANGDON, Justice.

text:
    James L. MASON, Jr., Appellant, v. MID-CONTINENT SUPPLY COMPANY, Appellee.
    No. 16474.
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 17, 1964.
    Rehearing Denied Feb. 14,1964.

      Harrison, McKnight & Dean, and Bill M. McKnight, Dallas, for appellant.
    Cantey, Hanger, Gooch, Cravens & Scarborough, and Sloan B. Blair, Fort Worth, for appellee.
   LANGDON, Justice.

This is a summary judgment case. The appellee Mid-Continent Supply Company sued appellant James L. Mason, Jr., to recover an unpaid balance of $98,000.00 alleged to be past due and owing on a series of 36 promissory notes which originally totalled the sum of $108,000.00, and for foreclosure of its chattel mortgage lien on two drilling rigs which secured the payment of such notes. Appellee’s ownership of the notes and chattel mortgage, the execution thereof by appellant, and the balance due according to the face thereof, are all matters which were uncontroverted in the pleadings and appellee was prima facie entitled to judgment unless material fact issues were raised in appellant’s pleadings as to any valid defenses. Appellee’s motion for summary judgment was granted. Appellant contends the trial court erred because the state of the record on November 1, 1962, clearly showed that genuine issues of fact existed. His second and third points are based on the court’s refusal to consider supplemental affidavits filed late and in refusing to consider appellant’s first amended original answer filed after the hearing on the motion for summary judgment. We affirm.

A chronological history of events leading up to the suit will more clearly define the issues.

Appellant, a graduate geologist who had been in the oil business for years with experience in drilling, decided to go into the drilling business with Mr. Julian Howell. After looking at several rigs and having no particular type rig in mind he came in contact with a representative of the appellee who showed him rigs available for sale. Appellant decided to buy two rigs. He came to appellee’s office in Fort Worth to sign necessary papers covering his purchase. A letter agreement was prepared reciting that appellant agreed to purchase both rigs for $90,000.00. He was to pay $9,000.00 down. The balance of $81,000.00 was scheduled into 32 notes, each in the sum of $2,500.00 and one in the sum of $1,000.00. The agreement provides that the rigs were sold on an “as is, where is” basis, with no warranty either express or implied as to the operation or condition of the rigs. The agreement further recited that, “It is agreed there are no representations, agreements or conditions other than specifically stated herein.” Appellant signed the agreement at about the time he took possession of the rigs. Appellant accepted, agreed to and signed the agreement on August 28, 1961. He made no suggestions as to any additions, deletions or revisions thereto although the agreement provides that the instrument might be changed by agreement of the parties to it. Further the record reflects that Julian Howell made an independent examination of the rigs before appellant took possession of them or signed the letter agreement and certainly long before the notes were signed. The notes are dated September 1, 1961. They were actually signed, “quite some time later,” according to appellant. It is uncontroverted that they were actually signed on October 24, 1961,-the date of the acknowledgment on the chattel mortgage.

In considering the issues involved in this case it is important to keep in mind that it is not based upon the letter agreement but is a suit to collect the unpaid balance due and payable on the notes and foreclosure of the chattel mortgage lien. Thus the alleged fraud and misrepresentation concerning the condition of the rigs and the amount of money required to put them in good operative condition which appellant claims to have relied upon in signing the agreement would not effect the validity of the notes or the mortgage lien. They were signed at a later date and at a time when appellant according to his own admissions-was fully aware of the facts and circumstances he alleges as fraud and misrepresentation inducing him to sign the letter agreement. Associated Employers Lloyds v. Howard, Sup.Ct., 156 Tex. 277, 294 S.W.2d 706 and authorities cited therein.

There is no valid or controlling evidence or pleadings concerning any fraud inducing the appellant to sign the notes and the mortgage lien. The instruments were clear, plain and unambiguous. The notes were complete and regular upon their face and unconditional. By signing them he became liable for the payment thereof and in effect confirmed the letter agreement clearly indicating that he placed no reliance upon the alleged fraud and misrepresentations which he claimed to have relied upon in executing such agreement. There is no valid evidence indicating that appellant relied upon anything that any of appellee’s representatives may have told him when he signed the notes and mortgage lien in October, 1961.

The appellant in substance contends that it was represented to him that $1,500.00' would be the maximum expenditure necessary to correct any defects in the rigs. Ini the face of this contention he signed notes-totaling $108,000.00, some $27,000.00 more than the $81,000.00 representing the balance of the purchase price. The explanation for this contradiction is explained by appellant’s own deposition. “Thus it appears affirmatively that his claim stated on paper became completely disintegrated when exposed to the light of his own deposition.” Bennett v. Flanigon, 7 Cir., 220 F.2d 799. In his deposition he stated that the additional $27,000.00 was for normal costs of repairs on the two rigs which were unknowns and that when he signed the notes he knew that the $1,500.00 figure was not right and that the cost of repairs would be at least $27,000.00. He stated that at the time he signed the notes he was not relying on any $1,500.00 representation as to what it would take to put the rigs in operating condition. He added, “It was obvious at that point that it would cost more. That is true.”; and “I don’t know what I was relying on at that point.”

It is fundamental that before fraud can be set up, either as the basis of a claim or defense, it must appear that the claimed representations were relied upon.

As stated in 25 Tex.Jur.2d, Fraud and Deceit, § 27, p. 651, et seq.: “It is a general rule that where false and fraudulent representations are made concerning the subject matter of a contract, but the person to whom they are made, before closing the contract or before the time for payment arrives, inspects and examines the subject of the contract or conducts an investigation into the matter sufficient to inform him of the truth, it is presumed that he places his reliance on the information acquired by the investigation and on his own judgment based on the facts, rather than on the representations.” Here it is conclusively established by appellant’s own admissions that by the time he signed the notes his operator, Mr. Howell, had thoroughly inspected the rigs and that he (appellant) had already run up a $27,000.00 bill for repairs. The same text continues as follows at page 653: “Inasmuch as a representation that is known to be false cannot deceive, redress will not be awarded to a person who had knowledge of the falsity of the representations when he entered into the transaction. It is imperative that the party claiming to have been defrauded believed the false representations when he acted. * * * Similarly, there can be no legal defense based on fraud if the facts concerning the fraud become fully known before the contract is executed. A person is precluded from recovery on account' of his knowledge of the fraud only where the contract was wholly executory at the time of discovery, or, in other words, where he did not change his position for the worse.”

In the case at bar, appellant has expressly admitted that he was no longer relying upon the alleged misrepresentations at the time he signed the notes sued upon, and that he then had as much knowledge as did appellee about what it was going to cost to put the rigs in the condition desired. Such admissions are binding upon him. He cannot avoid summary judgment by broad conclusions of law set forth in his pleadings and affidavits.

The appellant admittedly owed certain money to appellee on open account in addition to the sum owed on the notes. He contends by pleading and affidavit that a representative of appellee fraudulently represented to him, (1) that appellee would not accept payments upon the notes unless he also made payment upon the open account to be credited as appellee might see fit and that said representative refused a tender of a $12,000.00 payment on the notes and that because of such refusal was estopped to accelerate its notes; (2) that appellee’s agent told him that if he would apply the $12,000.00 payment to the open account he need not worry about the notes. That further action on the notes would be suspended and (3) that in reliance upon this he changed his position to his detriment by allowing the $12,000.00 payment to be applied to the open account.

Once again in exposing appellant’s claims to the light of his deposition they disintegrate. In his deposition the appellant in testimony covering some six pages admits that he not only knew but that he agreed when he tendered the $12,000.00 that it would be applied to the open account, subject to later determination as to which portion of the account it would be applied. At another point in his deposition the appellant admitted that appellee’s agent never told him that he would not have to pay the notes.

In our opinion the statement that he would not have to worry about the notes, even if true, would not constitute a defense because there is no contention that appellant did not owe the money on open account and the appellee would have the right to insist that such account be kept current before accepting prepayments on the notes.

We next consider the appellant’s points based on the court’s refusal to consider the supplemental affidavits and appellant’s first amended original answer filed after the hearing on the motion for summary judgment. Recitations contained in the trial court’s judgment which are unchallenged reflect a continued effort on the part of appellant to change the record as it existed on November 1, 1962, when the motion was heard.

The judgment reflects that the appellee’s motion for summary judgment was filed September 17, 1962, and on the same date set for hearing October 2, 1962. All notice required by Rule 166-A was given. Hearing on the motion was twice postponed at appellant’s request although appellant had filed his verified answer supported by his own affidavit on October 1, 1962.

On October 19, 1962, the hearing was held by agreement of the parties. At that time appellant announced ready subject to his request to obtain affidavits of persons he had been unable to procure because of geographic impediments and difficulty in tracing such persons. The trial court granted additional time through November 1, to obtain these affidavits. Obviously it was not the purpose of the court to permit additional affidavits by the appellant and his employee although there is nothing in the record to indicate that the court would not have considered them had they been filed on November 1, 1962, within the time prescribed by the court. The affidavit of a distant witness who resided in Illinois filed on November 1, 1962, was considered by the court whereas the affidavits of appellant and his employee filed on November 2, 1962, were not. The appellee’s motion to strike the affidavits, which was sustained by the court, was based on the contentions that same were filed too late and were not from distant witnesses who were difficult to locate and hence not within the scope of the court’s order extending the time to November 1, 1962.

In Surkin v. Charteris (Fifth Circuit), 197 F.2d 77, the Federal Court, construing Rule 56 F.R.Civ.P., held: “Nor do we agree with the appellant’s contention that the trial court abused its discretion in denying their motion for leave to serve opposing affidavits two days after oral argument on the motion was heard. Rule 56 provides that the motion shall be served at least 10 days before the time fixed for the hearing and that the opposing party, prior to the day of hearing, may serve opposing affidavits. Here, the motion for summary judgment was filed on December 20, 1950, and on December 22nd the plaintiffs were notified that a hearing on the motion would be had on January 16, 1951. Thus it is obvious that the plaintiffs had far more than the requisite notice.”

•While the Surkin case, supra, is not binding upon this Court, it is certainly persuasive, particularly since Rule 166-A was patterned from, and is almost identical with, Federal Rule 56. The record in a case must close at some stage in the proceeding. The trial court, absent an abuse of discretion, may determine when the record will close. The action' of the trial court in this case was not unreasonable.

The case of St. John v. Fitzgerald (Tex.Civ.App., Eastland), 281 S.W.2d 201, relied upon by the appellant is readily distinguishable. There the affidavit conflicted with the deposition testimony. The court simply held that the party resisting the motion for summary judgment had the right to explain or to contradict by affidavit his deposition testimony. In that case the affidavit set forth facts which would have been admissible at a trial. Here the contentions in appellant’s first affidavit does not indicate that appellant was relying upon any representations at the time he signed the notes, and that the statements contained in his supplemental affidavit and pleading would not have been competent or admissible to impeach the notes he signed. It is fundamental that, to be effective, affidavits in a summary judgment proceeding must “set forth such facts as would be admissible in evidence * * Rule 166-A(e)

On December 8, 1962, while the trial court had the motion for summary judgment under advisement the appellant filed his first amended answer. While it was not considered by the trial court it was not stricken. It was timely filed for consideration in a trial on the merits but not in time to be considered in connection with the motion for summary judgment, heard by the court two months earlier.

Rule 166-A, expressly provides that opposing affidavits be filed prior to the date of the hearing. The rule contains ample provisions for the protection of the litigants where it appears to the trial court that some modification of the literal requirements of the rule is required in the interest of justice. The Rule provides in subpara-graph (e) that “The court may permit affidavits to be supplemented or opposed by depositions or by further affidavits.” In subparagraph (f) the Rule authorizes the court to permit affidavits for depositions ¡to be obtained after the hearing, and to.make such other order as is just. Clearly, the Rule contemplates that the trial court will have broad discretion in setting reasonable deadlines in summary judgment proceedings, as in other matters pending before it. In our opinion the trial, court was within his discretion in setting and adhering to the November 1, 1962 deadline, particularly in view of the fact that appellee’s motion for summary judgment had been filed September 17 and had been twice postponed at appellant’s request. Further the appellant has not shown good cause why his own affidavit and that of his employee could not have been timely filed. On February 18, 1962, after judgment had been rendered, and after appellee’s objections to the affidavits and the court’s order sustaining same had been filed, the appellant filed his amended motion for new trial to which he attached an affidavit stating that the late filing of the supplemental affidavits was because he was outside Texas from October 19 to 29, 1962. It is our opinion that: (1) the purported showing of good cause itself came too late, after judgment; (2) appellant still has not explained why his own affidavit could not have been filed prior to October 19, 1962, which was over a month after the time appellee’s motion was filed; (3) the trial court’s order extending the time to November 1 related only to the affidavits of distant witnesses and did not encompass an affidavit by appellant or his employees; and (4) failure to have timely filed such affidavits suggests a lack of diligence to comply with the court’s order extending hearing to November 1, 1962.

In Rountree v. Bridwell, Tex.Civ.App., 269 S.W.2d 824, writ ref., n. r. e., the San Antonio Court in an opinion by Judge Nor-vell held: “The trial judge did not abuse his discretion in refusing to consider the affidavits tendered as exhibits to plaintiffs’ motion for new trial. These affidavits should have been filed prior to the hearing upon the motion for summary judgment. Further, it does not appear that a consideration of such affidavits would affect the disposition of the case.”

The above case is particularly applicable here as the supplemental affidavit of the appellant was cumulative of'matter considered by the court and the employee’s affidavit was to the effect that he was familiar with what appellant-had said and same was true. Neither affidavit would therefore have affected the trial court’s disposition of the case.

In Jones v. Hubbard, Tex.Civ.App., 302 S.W.2d 493, writ ref., n. r. e., the court held that it was within the trial court’s discretion to refuse to consider affidavits and material filed after hearing of summary judgment. To the same effect see Oaxaca v. Lowman, Tex.Civ.App., 297 S.W.2d 729, writ ref., n. r. e., citing Rule 166-A, Texas Rules of Civil Procedure; Haley v. Nickels, Tex.Civ.App., 235 S.W.2d 683; Fowler v. Texas Employers’ Ins. Ass’n., Tex.Civ.App., 237 S.W.2d 373, in which case writ of error was refused outright.

In Dipp v. Rio Grande Produce, Inc., Tex.Civ.App., 330 S.W.2d 700, writ ref., n. r. e., the court, noting that evidence tendered as part of an amended motion for new trial came too late, held as follows: “In any event, this is a summary judgment matter and, as such, the trial court is charged with the duty of considering only the record as it appears before the court at the time of the hearing of the motion for summary judgment (citing Rule 166-A and cases).”

The foregoing cases stand for the proposition that the trial court has the right to affix reasonable time limits on the filing of affidavits, and to insist upon compliance therewith, and with the other provisions of Rule 166-A. The trial court should be able to take a matter under advisement without having the record as it existed at the time of the hearing shift and change from day to day.

Additionally, it would appear unfair to the moving party who has exercised diligence in conforming with all provisions of the rule to permit the opposing party to change the record.

The summary judgment procedure could be completely frustrated if a party, after the hearing on the motion, having been confronted with the fact that by his own deposition he completely destroyed his position, were to be permitted to prevent summary judgment by the simple expedient of filing an affidavit.

At the hearing on November 1, 1962, the appellant was confronted with his own admissions. Seeking to extricate himself from his untenable position he filed his amended answer on December 8, 1962, in which he alleged that he had been told by appellee that if he would sign the notes he would not have to pay them to the extent that the notes represented cost of repairs.

The supplemental affidavits and the appellant’s first amended answer set forth nothing more than a claimed promise on the part of appellee to do something in the future, i. e., bear the expense of repairs to the rigs, and such allegations and statements on their face do not amount to fraud and even though considered by the court would not have raised a fact issue.

As stated in 25 Tex.Jur.2d, Fraud and Deceit, § 44, p. 682: “It is frequently declared to be the general rule of this state that the failure to discharge a promise of something to be done in the future is not fraud, and that, to be actionable, a false representation must be of a past or existing fact, rather than a promise, even though the promise is, without any excuse, subsequently broken. It has been said that this is true even if the promise is made to induce the other person to enter into the contract, inasmuch as otherwise every breach of contract would amount to fraud. It should be noted, however, that a statute now includes within the definition of fraud connected with real estate and certain security transactions, a false promise made as a material inducement and but for which the other party would not have entered the transaction.”

While a promise made with a preconceived intention not to perform may amount to fraud, no such statement is made by appellant in his supplemental affidavit. Moreover, his deposition testimony abundantly shows that he knew that he would have to bear the expense of putting the rigs in order at the time he signed the notes.

Under the authorities the assertions made in the supplemental affidavit would not be admissible in evidence. In Jones v. Hubbard, 302 S.W.2d 493, writ ref., n. r. e., the court, affirming a summary judgment in favor of plaintiff on a note, held as follows : “Defendants assert that the note was executed because of a representation by plaintiff that he would not hold defendants personally liable thereon, and that he wanted the note to show a loss on his income tax return. Rule 166-A Texas Rules of Civil Procedure provides that the affidavits ‘shall set forth such facts as would be admissible in evidence.’ Defendants’ assertions as to the alleged misrepresentations of plaintiff would not be admissible in evidence under the parol evidence rule, and therefore have no weight in summary judgment practice. A promissory note cannot be contradicted by parol representations of the payee that the maker would not be held liable thereon. 6 Tex.Jur. 956; Dean v. Allied Oil Co., Tex.Civ.App., 261 S.W.2d 900, Er.Dis.; Bowden v. Partners’ Finance, Tex.Civ.App., 278 S.W.2d 866.” And in the same case, the court observed as follows: “The cases are numerous where summary judgments have been upheld where the issues were issues which are usually questions of fact but where the admissible evidence establishes the issues as matters of law. See: Edwards v. Williams, Tex.Civ.App., 291 S.W.2d 783; Westfall v. Lorenzo Gin Co., Tex.Civ.App., 287 S.W.2d 551; Oaxaca v. Lowman, Tex.Civ.App., 297 S.W.2d 729.”

In the recent case of Steve Lynn Motor Company, Inc. v. Pavelka (Tex.Civ.App.), 371 S.W.2d 928, after saying it was immaterial whether the plaintiff was a holder in due course of the notes sued upon, proceeded to hold as follows: “The plea that the payee would not sue or press for collection is tantamount to the allegation of an agreement that the maker would not be required to pay the notes or would not be liable thereon. Even if attempted to be raised as a defense without exception, parol evidence thereof was without probative force and is to be disregarded. (Citing authorities). ‘An agreement not to enforce or sue upon the instrument at all must be equally ineffective.’ IX Wigmore, Evidence (3rd ed.) Sec. 2444, p. 144.” The foregoing language emphasizes the distinction between a suit on promissory notes and one upon a sales contract. The appellant will not be permitted to repudiate or impeach his own notes by parol evidence. The above case and the authorities therein cited also dispose of appellant’s contentions that a representative of appellee told him he need not worry about the notes, or that he would not be pressed for the payment thereof. Such evidence would have been inadmissible on a trial of the case and, accordingly, cannot be considered as competent evidence to defeat appellee’s right to summary judgment.

All points of error are accordingly overruled and the judgment of the trial court is affirmed.

Affirmed.


author: RENFRO, Justice.

text:
    S. P. BARKER, d/b/a Barker Construction Company, Appellant, v. MALACORD AND SON GLASS COMPANY, Appellee.
    No. 16498.
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 24, 1964.

      Nelson, Montgomery & Robertson, and Otis E. Nelson, Wichita Falls, for appellant.
    Irvin J. Vogel, and Joe E. Shaddock, Wichita Falls, for appellee.
   RENFRO, Justice.

This is a venue case.

The plaintiff, Malacord and Son Glass Company, a partnership, sued Barker Construction Company, Continental Casualty Company and the Electra Independent School District, Plaintiff alleged it furnished labor and materials to Barker Construction Company, • who used said labor and materials in the construction of an elementary school in Electra, Texas, constructed under contract between Barker, as prime contractor, and the Electra Independent School District, and that Continental Casualty executed a payment bond in accordance with law indemnifying Barker for the protection of all claimants supplying labor and materials to the said Barker as prime contractor; that plaintiff furnished labor and materials itemized in Group 1 and Group 2 set out in the petition. Plaintiff alleged that $6,390.00 was furnished under Group 1 and $593.42 was supplied under Group 2; after offsets plaintiff was entitled to a balance of $6,983.42.

Electra is situated in Wichita County.

Defendant Barker, who does business under the name of Barker Construction Company, filed a plea of privilege to have the case as to him transferred to Hardeman County, the county of his residence.

By controverting affidavit plaintiff claimed venue in Wichita County under Art. 5160, Vernon’s Ann.Civ.St., and subdivisions 4, 5, 23 and 29a of Article 1995, V.A.C.S.

The other defendants filed general denials.

Defendant Barker’s plea of privilege was overruled.

By separate points of error Barker contends that plaintiff failed to prove venue in Wichita County under any of the above statutory provisions.

Plaintiff concedes he did not prove venue under Article 5160, but contends he did prove sufficient facts to retain venue in Wichita County under one or all of the subdivisions of Art. 1995 set out in his controverting affidavit.

The charges set out in Group 1 of plaintiff’s petition were incurred under a written contract between plaintiff and Barker. Said contract did not provide for payment in Wichita County. The materials set out in Group 2 were furnished Barker for work done in addition to and apart from the prime contract and were requested by Barker. The last invoice for materials for $298.00 under Group 2 was signed by H. E. Martin, superintendent on the job for Barker, and provided for payment in Wichita County.

As to subdivision 5, Barker contends Martin had no authority to bind Barker to pay the account in Wichita County, and that there was no consideration for the execution of the agreement by Martin after the materials were furnished.

Plaintiff testified Barker ordered the extra work represented by the invoice; Martin signed it as work done “for an extra”; Martin was in full charge of the construction project; all complaints were taken to Martin; Martin lined up the work for the glaziers; he told what he wanted installed first, second, third, etc.; he told plaintiff when to do his work; plaintiff’s work started in April or May, 1962, and was completed in September; Martin was on the job all the time and received all complaints and gave all orders; Barker said to plaintiff, regarding the labor and materials set out in the invoice, “do it as fast as we could” because he was on a time element; Barker did not pay for the “extra”; all “this work and materials” were done in Wichita County. Plaintiff’s work was accepted and the school building is in use; the work represented by the invoice was done August 6 through 10, and the invoice was signed by Martin on the 10th after the work was completed; Martin was superintendent for Barker on the school building job.

Neither Barker nor Martin testified.

Subdivision 5 provides in substance that when a person has contracted in writing to perform an obligation in a named county, suit upon such obligation may be brought against such person in such county.

Where a principal has, by his voluntary act, placed an agent in such situation that a person of ordinary prudence, conversant with business usages, is justified in presuming the agent has authority to perform the particular act, and so deals with the agent, the principal is estopped as against the third person from denying the agents’ authority. Federal Supply Co. v. Wichita Sales & Supply Co., Tex.Civ.App., 232 S.W. 879.

In our opinion Barker clothed Martin with the indicia of authority which would lead a prudent person to believe that he had actual authority to bind Barker to pay for the extras in Wichita County. The evidence is sufficient to support the court’s implied finding that Martin was the duly authorized agent for Barker and acting within the scope of his actual and apparent authority in contracting with plaintiff to pay for the extras in Wichita County. Pursuant to such authority, he signed the invoice in question. Under the record his action in signing the invoice providing for payment in Wichita County was binding on Barker.

We overrule defendants’ contention that there was no consideration for the execution of the invoice. This court, speaking through its then Chief Justice Conner, in Brison v. Continental Oil Co., Tex.Civ.App., 48 S.W.2d 442, error refused, said: “The invoices warrant the Conclusion that a credit for payment of 30 days was extended; and it is not suggested that payments were made at the time of delivery. Under the circumstances, therefore, sales evidenced by the invoices under consideration were not complete until the invoices were signed, the order, the delivery, and signature on the invoices constituting the completed transaction. The delivery of the oil and gasoline as ordered certainly constituted a consideration for a promise on appellants’ part to pay therefor. And we find it said in Texas Jurisprudence, vol. 10, § 68, that: * * A written contract shown to have been voluntarily signed by the party sought tó be charged will be presumed to be supported by a sufficient consideration until the contrary appears.’ ”

The evidence shows that Barker ordered the labor and material shown on the invoice signed by Martin and that plaintiff performed his part of the agreement. The invoice shows, “Terms: 1% 10 days-30 days % * ‡ »

The performance by plaintiff of his obligation constituted a consideration for a promise on Barker’s part to pay therefor.

Since we are satisfied the trial court was correct in holding venue in Wichita County by virtue of Sub. 5, we forego decision as to whether venue could have been maintained in Wichita County under any of the other pleaded subdivisions.

Affirmed.