author: TALBOT, J.

text:
    ORDER OF UNITED COMMERCIAL TRAVELERS v. SIMPSON.
    (No. 7254.)

    (Court of Civil Appeals of Texas. Dallas.
    May 1, 1915.
    Rehearing Denied June 5, 1915.)
    1. Insueance @=>665 — Accident Insurance —Actions—Evidence.
    In an action on an accident policy, evidence held to warrant a finding that deceased met his death through an accident contemplated by the terms of the policy.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. §§ 1555, 1707-1728; Dec. Dig. @=> 665.]
    2. Insurance @=>668 — Accident Policy-Actions — Question eor Jury.
    In an action on an accident policy, the question of the cause of death is for the jury, where no one witnessed it.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. §§ 1556, 1732-1770; Dec. Dig. @=> 668.]
    3. Insurance @=>297 — Accident Insurance —Representations.
    A statement by insured as to his habits with reference to intoxicants must be construed as to his habits at the time of the application, not before or after.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. § 676; Dec. Dig. @=>297.]
    4. Insurance @=>665 — Accident Insurance —Actions—Evidence.
    In a suit on an accident policy, evidence held to warrant a finding that insured’s statement that he did not use intoxicating liquors was not a misrepresentation.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. §§ 1555, 1707-1728; Dec. Dig. @=> 665.]
    5. Insurance @=>390 — Accident Insurance —Defenses.
    Under the direct provisions of Vernon’s Sayles’ Ann. Civ. St. 1914, art. 4948, an insurance company cannot defend on the ground of misrepresentations, where it did not, within 90 days after discovering the falsity of the representations, give notice to plaintiff.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. §§ 1037, 1038; Dec. Dig. @=>390.]
    Appeal from District Court, Dallas County; E. B. Muse, Judge.
    Action by Bessie Simpson against the Order of United Commercial Travelers. Prom judgment for plaintiff, defendant appeals.
    Affirmed.

      Harry L. Doud, of Columbus, Ohio, and Seay & Seay and Smith, Robertson & Robertson, all of Dallas, for appellant. John L. Young and Thompson, Knight, Baker & Harris, all of Dallas, for appellee.

       Writ oí error pending in Supreme Court.

   TALBOT, J.

The appellee, Mrs. Bessie Simpson, brought this suit as the beneficiary in an accident policy issued by the appellant to her deceased husband, John H. Simpson, to recover the sum of $5,000, the face value of said policy, together with statutory penalty of 12 per cent, legal interest, and attorney’s fees. The pleadings setting forth the appellee’s alleged cause of action and the appellant’s defenses are full, and their sufficiency not questioned on this appeal. The case was submitted to a jury on special issues, and upon their findings the court rendered judgment in favor of the plaintiff for the sum of $6,583, the principal and interest of the policy, and in favor of the appellant on the claim for penalty and attorney’s fees. From the judgment so rendered in favor of the appellee, the appellant prosecutes this appeal.

The appellant, under the contract sued on, was liable only in the event the insured, “through external, violent and accidental means,” received an injury, “which alone and independent of all other causes” occasioned his “death immediately or within six months from the happening thereof,” and the central question presented for our determination by appellant’s assignments of error is whether the facts and circumstances in evidence, no one having witnessed his death, were sufficient to take the case to the jury and justify their findings, and the judgment based thereon, to the effect that the death of the deceased, John H. Simpson, was the result solely of an accident as contemplated by the terms of the policy. The theory of the ap-pellee is “that the deceased slipped and fell, dislocating his neck and rupturing a blood vessel in some part of his head, causing him to bleed from a pint to a quart of blood, thereby producing his death,” whilst that of appellant is “that the deceased came to his death from heart failure brought about by alcoholic poison,” and, further, “that the evidence is sufficient to show how the deceased came to his death, and that it is but a conjecture, a guess, a supposition unsupported by evidence, to say that he slipped and fell and received injuries resulting in his death.-”

The evidence upon which a decision of the question turns is conflicting in some material particulars, but sufficient to warrant the following conclusions, of fact: The deceased, for several days prior to his death, had been staying at the St. George Hotel in the city of Dallas. In connection with the room he occupied there was a bath and toilet room. This bath and toilet room was about three feet wide and about four or five feet long, and in it was located a commode and shower bath. The back of the commode was practically against, or very near, the rear wall of the room; its right side was a little distance from one of the side walls; its front was about three feet, or probably a little more, from the front wall, and the shower bath was to the left of the commode, and between the commode and the other side wall of the room. Above the commode and attached to the side wall of the room was a toilet paper rack. The floor of the room was composed of what is called terazza, a substance smoother and slicker than tile. The deceased was in the bathroom at the time of his death, and had just prior thereto been using the commode. The shower bath in the room at the time was defective, and water leaking or thrown therefrom caused the floor to be wet and very slick. The deceased sometimes drank intoxicating liquors to excess, and had on more than one occasion been treated at sanatoriums for acute alcoholism. He had been at the St. George Hotel in Dallas 10 or 12 days immediately preceding his death, and for several days during this time he was under the care of a physician and nurse, sobering up from a drunk. While being so cared for his nurse became alarmed at the weak condition of his pulse and telephoned to the physician treating him his condition, and asked him what he should do. The physician advised the giving of heart stimulants, which was done, and the practically normal action of the heart and pulse was thereby restored. On the eighth day of the treatment of the deceased the attending physician discharged him as being sober and well, and for four days immediately preceding his death the deceased had been sober. The deceased was about 5 feet and 8 inches tall and weighed about 140 pounds. On the morning of the 12th day of December, 1912, the body of the deceased was found in the bath and toilet room. He had evidently died some time during the previous night. He was in his underclothes and barefooted. He was lying on his face and head, with the palm of one hand upon the floor, as it would probably have been had he attempted to catch himself to prevent falling. His body was in an arched or oval position. His head was against the front wall of the bathroom and in the corner formed by that wall and the wall on the right side. One foot was back against the rear wall between the commode and the wall of the room, as it probably would have been had he. slipped and fallen in attempting to rise from the commode. His other foot was against the bottom of the front of the commode, but no other part of his body touched it. His face was bruised and mashed, and he had bled through his nose from a pint to a quart of blood. The bleeding indicated that his heart was beating after his fall, and the heart of a man dying from a dislocated neck would probably beat about one minute after receiving such an injury. The deceased’s neck was broken at the point where the atlas and axis join. Snell a break or dislocation eonld be produced only by a “sudden bard fall.” If tbe deceased bad died of heart failure, be would probably have sank gradually down, and would not, in all probability, have attempted to catch himself with his hands. There would not, in all probability, be sufficient violence from a fall occasioned by heart failure to have produced and brought about the dislocation of the deceased’s neck. An autopsy, performed on the body of the deceased five or six months after his death and burial by several physicians, revealed, according to their testimony, “some diseased elements” in the heart, lungs, and brain, which, in their opinion, was the result of alcoholic poison and caused his death. There was other substantial testimony, however, which justifies the conclusion that the condition of the deceased’s heart, lungs, and brain, as disclosed by the autopsy, could have been produced by a violent fall which dislocated his neck and caused him to bleed from a pint to a quart of blood; that the condition found in the lungs of the deceased was just such a condition as might be expected to be found in the case of a man who had died as a result of a dislocated neck; that disease of the arterial system usually accompanies death from heart trouble, and that the arterial system of the deceased was not diseased; that there were no adhesions between the heart and the membranes around the pericardium, and that this indicated there was nothing wrong with that part of the heart.

The jury found, in response to issues submitted to them, that the death of the deceased was not due to heart failure produced by disease, nor to a diseased condition surrounding the heart; that on or about the 12th day of December, 1912, the deceased suffered a bodily injury which left visible marks of said injury upon his body; that he accidentally slipped and fell and dislocated his neck, and that his death was caused by such fall, and the injuries sustained thereby, independently of all other causes. These findings of the jury are to the effect that John H. Simpson’s death was the result of bodily injuries received through external, violent, and accidental means,' which, independently of all other causes, occasioned his death, and if they find support in the evidence the liability of the appellant, under the terms of its policy, is thereby established and the judgment rendered in favor of the appellee should not be disturbed, unless a reversal is made necessary on some ground urged other than the insufficiency of the evidence. For it is the well-settled rule of practice in this state, and in many other jurisdictions for that matter, that when the evidence is sufficient to authorize the submission of a given issue to the jury, their determination of it is binding upon the appellate court. The fact that the appellate court, sitting as a jury, might, upon the same evidence, reach a conclusion different from that reached by the jury does not change the rule. That the evidence bearing upon the issue here.in question was of the character just referred to can hardly be denied. No one witnessed the death of the deceased, but its cause was a question of fact to be determined from all the relevant facts and circumstances disclosed by the evidence, and these facts and- circumstances were clearly sufficient to show, and justify the jury’s conclusion, that he died as the result of an accidental fall which produced a dislocation of his neck. United Commercial Travelers v. Roth, 159 S. W. 176; Larkin v. Interstate Casualty Co., 43 App. Div. 365, 60 N. Y. Supp. 205; Maryland Casualty Co. v. Burns, 149 Ky. 550, 149 S. W. 867; Preferred Accident Ins. Co. v. Barker, 93 Fed. 159, 35 C. C. A. 250. As well said in the last case cited:

“In this case, as in many others, where the body of insured is found, and no one has witnessed the death, the circumstances and surroundings are the only evidence that can be produced to determine the cause. * * * Such facts must be submitted to the jury for their consideration, and their finding thereon is final.”

Touching the issue of whether or not the deceased’s neck was broken, two physicians and surgeons, sent, it seems, by the local secretary of the appellant to view the body, testified that they could take the head and place it against the back between the scapulae ; that they could lay the ear on the apex of either shoulder; that the head when raised from its resting place and released would fall loosely about; that they examined the vertebrae as far down as the shoulder; that there was a separation of the vertebrae or bones at the point where the atlas and axis join; that they could lay two of their fingers in the opening created by the separation of the atlas and axis; and that a dislocation there was easily detected. To the same effect on this issue is the testimony of the justice of the peace, who held a coroner’s inquest over the body of the deceased, and two of the undertaker’s assistants, who embalmed and prepared the body for burial. In conflict with this testimony is the testimony of the physicians who performed the autopsy five or six months after the death of the deceased. Their testimony is to the effect that in the post mortem examination made by them no dislocation of the deceased’s neck was found, and that in their opinion his neck had not been broken. As tending to show that these physicians were mistaken in their conclusion that the neck of the deceased had not been dislocated, appel-lee introduced the testimony of the undertaker’s assistants, who handled and prepared the deceased’s body for burial, to the effect—

“that before embalming a body they always attempted to reduce and correct any dislocation or abnormality, and that they did in this instance reduce the dislocation and place the vertebrae of the deceased’s neck in their proper alignment before embalming it; that the em-’ balming fluid used had the effect of hardening the parts and holding them in any relation in which they were placed prior to the process of embalming.”

There was also testimony in this connection by the physician sent by the secretary of the appellant to examine the body of the deceased, to the effect that he found the neck in alignment; that he easily and readily took it out of alignment and determined the injury, and thereafter placed it back, as nearly as possible, in perfect alignment. It is further very plausibly claimed by the appellee that the testimony of the. physicians who performed the autopsy could reasonably be discarded by the jury as unsatisfactory, because of their varying statements in relation to the same matters about which they were interrogated. Indeed, it is pointed out by her counsel that one of them testified that neither he nor any other physician could determine what caused the heart to fail, what was back of its failure; that if it were assumed as a fact that the man had suffered a dislocated neck, that would be sufficient to have produced the failure of the heart. Another of the expert physicians testified with equal confidence that the deceased died of heart failure, and that he knew and could tell from an examination of the heart alone that the heart failure was the initial, sole, and only cause of his death. Another introduced by the appellant testified- that he did not know and could not tell that the man died of heart failure, and did not know that he so died, while another, to wit, Dr. Black, testified that after the autopsy was complete he did not know and could not tell what caused his death, his testimony in exact language being as follows: “1 do not know why he died, or how he died, or what caused his death.” One of the expert physicians testified that there was a tearing of the brain tissue and its lining; that this indicated and conclusively established as true that the party had been addicted to the excessive use of alcoholic liquors for many years; that it could not come from any other cause or condition; another testified with equal confidence that the condition was normal; another testified that it indicated no appreciable deviation from normal; while still another testified that such condition could have .been produced by violent trauma. Dr. Terrell, one of the expert physicians of appellant, testified, among other things, that:

“A man dying of heart trouble, we do find, as a rule, gross disease of the arterial system. We did not find such disease in this case. ® * * Probably half of the men of 42 who have lived an active life would show something abnormal in the heart. That there was nothing about the heart from which he could tell whether the fall preceded the failure of the heart or not. * * * If I assume as a fact that the deceased had fallen on the hard floor, receiving a dislocation of the neck, a hemorrhage of a pint of blood would be sufficient to cause death. That would be a very natural explanation of it if he had a dislocation of the neck. * * * 'There were no adhesions between the heart and the membranes around the pericardium which indicated that there was nothing wrong with that part of the heart; that the heart was not diseased to that extent. * * * The conditions found at the autopsy indicated that the heart did not stop all at once. * * * The conditions of the lungs showed that the heart did not collapse all at once; that it continued to beat probably as much as a minute. * * * In an ordinary accident which kills a man instantly the heart continues for probably a minute and just goes on and produces that condition found in the lungs of. the deceased. * * * When a man dies from a dislocated neck we would expect to find just the condition that he found there in the lungs of deceased. * * * If the deceased had died of heart failure he would just sink down, just gradually sink down. * * * It is doubtful whether he would endeavor to protect himself. * * * I would not expect an ordinary gradual sinking down to produce a dislocation, but would expect the fall to be hard and sudden.”

On the other hand, the appellant’s chief surgeon, Dr. Taylor, testified, among other things, that it would be impossible for a man to fall from a commode from heart failure and produce a dislocation of the neck; that it would be impossible to produce it from a fall of two or three feet; that there would not be sufficient force back of the fall if the fall was for two or three feet; that it would require extreme violence to produce the result. So that, looking to all the evidence given at the trial, and considering the inferences that the jury could legitimately and reasonably draw therefrom, we hold that it is sufficient to support the verdict rendered and the judgment based thereon. Although circumstantial, it did not, in our opin'ion, leave the determination of the issue as to the manner and cause of the deceased’s death to mere speculation and conjecture. Nor was the jury forced, by the character of evidence introduced, to base presumption upon presumption in order to reach the conclusion that the circumstances surrounding the death of the deceased were consistent with and sufficient to establish the theory of the appellee that he died as a result of an accidental fall, which produced a dislocation of his neck.

In his application for membership in appellant’s association the deceased, John H. Simpson, was asked the following question: “To what extent, if at all, do you use alcoholic liquors, morphine, cocaine, chloral or other narcotics?” To which he answered, “No,” and the appellant contends that the trial court erred in refusing its special charge, directing the jury to return a verdict in its favor because the uncontroverted evidence shows that on numerous occasions prior to and subsequent to the making of said answer, the deceased, Simpson, had been intoxicated to an extent that endangered his life. The proposition urged is that in an—

“action, where a policy of insurance is based upon the written application and the answers to the question in the application are warranted to be true, and if a question is answered falsely and the matter inquired about is shown to be material to the risk and actually contributed to the contingency upon which the policy became liable, there is no liability upon the part of the defendant to pay a policy issued under such conditions, and a verdict and judgment rendered in favor of the plaintiff under such conditions are contrary to the law and the evidence, and should be set aside.”

We do not think this proposition should he sustained. In their findings upon special issues submitted to them the jury answered: (1) That the deceased made no false statement or misrepresentation in his application for membership in appellant’s order in regard to the extent of his use of alcoholic liquors; (2) that a misrepresentation by the said Simpson, if any, was not material to the risk, and did not contribute thereto; and (3) that appellant did not notify appellee of such defense within 90 days after its discovery. These findings of the jury, especially the first and third, were warranted by the evidence, and either was sufficient to defeat the defense to which it related. We agree with the view expressed by appellee that the question and answer referred to must be construed as having reference to the habit and custom of the deceased, Simpson, at the time he signed the application for membership in appellant’s association, in regard to his use of intoxicating liquors. National Fraternity v. Karnes, 24 Tex. Civ. App. 607, 60 S. W. 576; Northwestern Mutual Life Ins. Co. v. Bank, 122 U. S. 501, 7 Sup. Ct. 1221, 30 L. Ed. 1100; Columbia Life Ins. Co. v. Tousey, 152 Ky. 447, 153 S. W. 769; Insurance Co. v. Foley, 105 U. S. 350, 26 L. Ed. 1055. So construed, there was no misrepresentation of the extent of his use of intoxicating liquors. The proof showed that in the spring preceding the application in December, 1911, the deceased was in á drunken spree upon two occasions, and that upon one occasion in the year 1909 or 1910, he was under the influence of intoxicating liquors. The wife of the deceased testified very clearly and positively to the effect that from the spring of 1911 until the spring of 1912 he never drank, and that she never had a physician with him on that account during such period; that she had Dr. Grigs-by with him upon one occasion in the spring of 1912, and Dr. Swain upon one occasion in the spring of 1912; that Dr. Grigsby attended the deceased upon one other occasion, but that he attended him for biliousness, and not for drink; that she had Dr. Clay with him twice in the fall of 1912, and that she called a physician' every time he began to drink, in order to stop his drinking. This testimony, in the main, was corroborated by a number of other witnesses, who were intimate friends and associates of the deceased, all of them testifying that they were with him upon frequent occasions; that they never knew of his drinking; that they never saw or heard of his being under the influence of liquor; some of them testifying that he had, upon occasion, declined to drink with them, stating that he did not drink. Dr. Clay testified in this connection as follows:

“His history was that he occasionally drank. He told me that he did not really care for the taste of liquor, but that he had insomnia, and he got to where he could not sleep. He knew that whisky would make him sleep, and that nothing else seemed to, and that he would start to taking a drink to get rest, and the first thing he knew he would be cjrunk.”

From this testimony the jury was authorized to find, as they did, that the deceased made no misrepresentation of fact in the answer under consideration.

Again, article 4948 of Vernon’s Civil Statutes provides that in—

“all suits brought upon insurance contracts or policies hereafter issued or contracted for in this state, no defense based upon misrepresentations made in the applications for, or in obtaining or securing the said contract, shall be valid, unless the defendant shall show on the trial that, within a reasonable time after discovering the falsity of the misrepresentations so made, it gave notice to the assured, if living, or,_ if dead, to the owners or beneficiaries of said contract, that it refused to be bound by the contract or policy; provided, that ninety days shall be a reasonable time.”

Failure to give the notice within the time here prescribed absolutely bars the insurance company from defending an action on the policy because of alleged misrepresentations (National Life Ass’n v. Hagelstein, 156 S. W. 353); and, the jury having found, upon evidence warranting it, that appellant had failed to give such notice, it could not successfully defend this action on the ground that the deceased had misrepresented in his application for membership in its order the extent to which he used intoxicating liquors.

Believing the assignments disclose no reversible error, the judgment of the court below is affirmed.
      @=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: JENKINS, J.

license: Public Domain

text:
    HAMILTON v. FIREMAN’S FUND INS. CO.
    (No. 5474.)

    (Court of Civil Appeals of Texas. Austin.
    May 19, 1915.)
    1. Appeal and Error <@=51062 — Review — Harmless Error.
    The submission of a question which was answered in such a manner as to accord with defendant’s contention as to the facts is not prejudicial.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4212 — 4218; Dec. Dig. <@=> 1062.]
    2. Trial <@=>192 — Instructions — Abstract Instructions.
    The charge may assume undisputed facts. [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 432-434; Dec. Dig. <@=>192.]
    3. Insurance <@=>328 — Ownership oe Property — Sale—What Constitute.
    The seller of an automobile sold it, reserving title to secure the unpaid purchase money. He also retained an insurance policy for further security. Thereafter the buyer mortgaged land to the seller, receiving a few hundred dollars in money and his note for the price of the automobile. Held that, in view of Rev. St. art. 5654, declaring that all reservations of title to chattels ,to secure the purchase money shall be held chattel mortgages, there was an absolute sale with reservation of a chattel mortgage, and hence the policy on the. machine was avoided, as it declared that a change in title should invalidate it.
    [Ed. Note. — For other eases, see Insurance, Cent. Dig. §§ 794-822, 825; Dec. Dig. &wkey;328.]
    4. Insurance &wkey;>282 — Fere Policies — Investigation.
    Where a policy holder stated absolutely that he owned the automobile destroyed, the insurer is not bound to make further inquiries to ascertain whether the statement is true.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 601-635; Dec. Dig. &wkey;282.]
    5. Insubance <©=»392 — Fire Policies — Waiver oe Breach oe Condition.
    Where the agent of the insurer knew that the insured sold his automobile, but reserved the policy as security, the company’s failure to cancel the policy and return the unearned premium waived a condition that a change in title should avoid it.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1041-1056, 1058-1070; Dec. Dig. &wkey;?392.]
    6. Appeal and Error <&wkey;93W-REViEw — Prb- • SUMPTIONS.
    Where defendant did not request the submission of an issue to the jury, it must, in support of the judgment, be presumed that the trial court decided such issue in favor of plaintiff, for whom it rendered judgment.-
    [Ed. Note. — For other cases, see’Appeal and Error, Cent. Dig. §§ 3777-3782; Dec. Dig. &wkey; 934.]
    Appeal from District Court, Falls County; Richard. I. Munroe, Judge.
    Action by the Fireman’s Fund Insurance Company against J. W. Hamilton. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    Spivey, Bartlett & Carter, of Marlin, for appellant. Locke & Locke, of Dallas, for ap-pellee.

       Writ oi error pending in Supreme Court.

   Findings of Fact.

JENKINS, J.

This suit was brought by appellee to recover of appellant $1,000, and interest, alleged to have been collected by means of fraudulent misrepresentations of loss under a policy of insurance on an automobile. On April 28, 19.12, appellee issued to appellant a policy on his automobile for $1,-000 from said date to April 28, 1913. The policy contained, among other things, a stipulation that it should be void in case of transfer or termination of sole ownership by the insured or any change of the nature of the insurable interest of the insured in the property by sale or otherwise, and also in case the car should be used in carrying passengers for compensation. In June, 1912, Rex Mitchell was negotiating through Ward & Phillips, of Rosebud, Tex., for a loan of $2,000 on a tract of land owned by him. About July 4th he made known the fact to appellant that he expected to obtain said loan, and offered ap-. .pellant $1,400 for his car, which he expected to pay out of said loan. Appellant sold Mitchell the car for that amount, taking his note therefor, with the understanding that the title to the car was to remain in appellant until the note was paid. On the bottom of the note was indorsed that a mortgage was retained on the car to secure the same. Appellant also stated to Mitchell that he would retain the insurance policy until the car was paid for. The car was turned over to Mitchell at this time, and he remained íd possession thereof until it was destroyed by Are, which occurred August 14, 1912. About the 5th of August appellant ascertained from Ward that Mitchell had been unable to obtain the loan. Appellant then agreed to loan Mitchell $2,000 on his land and take his note for that amount and deed of trust on the land to secure the same. He paid Mitchell $600 in cash, and Mitchell returned to appellant the $1,400 note, which was destroyed, Mitchell retaining the car. Shortly after this Ward purchased the land from Mitchell agreeing to pay him $1,000 in .cash, sell him an automobile, and assume the $2,000 mortgage to appellant. The automobile was delivered by Ward, and $S00 of the cash payment was made, $200 being reserved until title was shown to be satisfactory. The title was subsequently accepted by Ward, and the additional cash payment was made. Mitchell used the car while he was in possession of the same for purposes of hire. On August 23d A. L. Canfield, the adjuster of appellee, came to Rosebud, where appellant lived, and informed him that he was there for the purpose of adjusting the loss. Appellant told Canfield that the remains of the car were at Cameron, and in explanation thereof stated that at the time it was destroyed it was being driven by Rex Mitchell. They went to Cameron, viewed the remains of the car, and Canfield agreed that it was a total loss. They then returned to Rosebud, and proof of loss was made out, which was signed and sworn to by Hamilton, which stated that the car was destroyed by fire on August 14, 1912; that at the time of its destruction it was being driven by Rex Mitchell, who was engaged in carrying a party out for a ride from Cameron to Rockdale; that the automobile at the^ time of the loss belonged to J. W. Hamilton, and no other person or persons had any interest therein, and that no other person had had any interest therein or mortgage thereon during the currency of the policy. A draft for $1,000 was sent by the company to appellant, who deposited the same with Booth, cashier of the bank, as trustee, the proceeds to be paid to Mitchell when Ward became satisfied with Mitchell’s title. Nine hundred dollars of the proceeds were subsequently paid to Mitchell’s mother on his order; $100 being retained by appellant for his services in collecting the insurance.

The case was tried before a jury on special issues, and tlie court submitted the following questions:

“(1) Did A. L. Canfield at the time of the adjustment of defendant’s claim on August 23, 1912, know that the defendant before the fire had sold the car to Rex Mitchell, and that at the time of the fire the defendant had no interest therein? To which the jury answered, ‘No.’
“(2) If you have answered the preceding question in the negative, then you will. answer the question: Was any information given by the defendant to A. L. Canfield at the time of the adjustment of defendant’s claim on August 23, 1912, which a fire insurance adjuster, in the exercise of ordinary care, would have followed up by inquiries of other persons than the defendant, for the purpose of ascertaining whether the defendant had sold the car to Rex Mitchell prior to the fire, and which, if followed up, reasonably would have resulted in knowledge by such adjuster that the defendant had sold the car to Rex Mitchell prior to the fire?”

The jury, after answering the first question in the negative, stated to the court that they were unable to agree upon an answer to the second question. Thereupon the court withdrew the second question from the jury, received their verdict, and entered judgment thereon that appellee recover of the appellant the $1,000 paid on the loss, with legal interest thereon.

Opinion.

Under proper assignments of error appellant submits the proposition that it was error to submit said question to the jury, for the reason that appellant did not contend that the adjuster knew that the car had been sold to Mitchell, and that appellant had no interest therein; his contention being that the car had not been sold, and therefore the adjuster could not have known that it had been. The answer of the jury sustains appellant’s contention as to the fact that Canfield did not know of the sale, and therefore furnishes no ground for complaint. Appellant also complains of said question for the reason that it assumes as a fact that the car had been sold to Mitchell, and is therefore a charge upon the weight of the evidence. There was no error in this assumption, for the reason that the undisputed facts show that appellant had sold the car to Mitchell. The first transaction, as set out in the findings of fact, constituted a sale with a chattel mortgage to secure the purchase money. Our statute provides:

“All reservation of the title to the property in chattels, as security for the purchase money thereof, shall be held to be chattel mortgages.” R. S. art. 5654.

The second: transaction, as above set out, constituted a surrender of the chattel mortgage, and was a completed sale. At the time of the first transaction appellant stated to Mitchell that he would not turn over to him the insurance policy, but would retain the same as additional security for the payment of the $1,400 .note. At the time of the second transaction appellant stated to Mitchell that he would still retain the insurance policy as additional security for the loan which he had made him; and after the land was sold to Ward appellant stated that he would continue to hold the insurance policy as security to his mortgage on the land until the deal between Mitchell and Ward was finally closed. These agreements did not prevent the transaction from being a sale of the automobile. Appellant was simply mistaken in supposing that he could collect the policy in case of loss. Under the terms of the policy the sale to Mitchell rendered the same void.

The court did not err in withdrawing the second question from the jury. The appellant having made a positive statement under oath that he was the sole owner of the automobile at the time of its destruction, the appellee was not required to make further inquiry. Griffeth v. Hanks, 46 Tex. 219; Labbe v. Corbett, 69 Tex. 509, 6 S. W. 808; Mortgage Co. v. Pace, 23 Tex. Civ. App. 222, 56 S. W. 384-385; Railway Co. v. Harris, 65 S. W. 887-888; Hall v. Bank, 36 Tex. Civ. App. 317, 81 S. W. 766, 767; Hammel v. Benton, 162 S. W. 38. It is immaterial that appel lant believed the statements made by him to be true. Benton v. Kuykendall, 160 S. W. 441; Buchanan v. Burnett, 102 Tex. 492, 119 S. W. 1142. Such mistake on the part of appellant did not arise from any mistake of fact, but could have arisen only from his mistake as to the law in such case.

Appellant argues that appellee waived its right to object to the sale of the automobile, for the reason that J. D. Rea, the local agent of appellee, knew of such sale. Had this been true, and had appellee, after acquiring such knowledge, failed to cancel the policy and return the unearned portion of the premium, it would have constituted a waiver of the clause of forfeiture with reference to sale. Insurance Co. v. Jackson, 160 Ky. 228, 169 S. W. 696; Assurance Co. v. Francisco, 123 S. W. 1147. But the evidence does not show that Rea had knowledge of such sale. Hamilton informed Rea that he had conditionally sold the automobile to Mitchell, but that he had not sold it. Rea told him that if he closed the deal it would be necessary to transfer the policy to Mitchell, and that if the transaction was closed to let him know and he would secure such transfer. Rea had no further information with reference to the subject.

But, aside from this, the issue as to Rea’s knowledge of the transaction was not submitted to the jury, and appellant did not request that such issue be submitted, and has assigned no error upon the failure to submit this issue. It was the duty of the court to pass upon all issues not submitted to the jury, and the presumption is that he did so, and that his findings thereon support the judgment. The evidence is sufficient to sustain .a finding that Rea had no knowledge of the sale. Article 1985, R. S.; Railway Co. v. Botts, 22 Tex. Civ. App. 609, 55 S. W. 514; Moore v. Pierson, 93 S. W. 1008; Edelstein. v. Brown, 95 S. W. 1129.

Tie court should iiave directed a verdict in favor of appellee, because: (1) The undisputed evidence showed that appellant had made an absolute sale of the automobile to Rex Mitchell; (2) in any event, it is certain that Mitchell had an interest in the automobile, and that appellant was not the sole and unconditional owner thereof at the time of its destruction; (3) that the automobile was used for hire. None of these facts were known to the company or its agent at the time the loss was adjusted and paid.

Eor the reasons stated, the judgment of the trial court is affirmed.

Affirmed.
      ^z»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      &wkey;ffor other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    TAYLOR FEED PEN CO. (RIPLEY, Intervener) v. TAYLOR NAT. BANK.

    (No. 5468.)
    (Court of Civil Appeals of Texas. Austin.
    April 7, 1915.
    Rehearing Denied May 19, 1915.)
    1. CORPORATIONS <&wkey;476 — Powers—Securing Debt oe Another.
    A note and deed of trust, executed by a corporation to. secure the debt of another corporation, were illegal when executed in violation of Rev. St. art. 1164, prohibiting a corporation from using its funds for purposes other than that for which it was incorporated.
    [Ed. Note. — Eor other cases, see Corporations, Cent. Dig. §§ 1856, 1864; Dec. Dig. &wkey;476J
    2. Corporations <&wkey;476 — Trust Deed — Consideration.
    A note and deed of trust, executed by a corporation to secure a debt of another corporation, were invalid for want of consideration, where the maker received no benefit from the transaction, though they were executed pursuant to an agreement made by. the organizer of the former corporation before its formation, and though the resolution, authorizing the execution of the deed of trust, recited that the consideration of same was the cancellation of a prior deed of trust, where such prior deed had in fact been released several years before.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1856, 1864; Dec. Dig. <&wkey;>476.]
    3. Corporations <&^14 — Formation — Illegal Purpose — Deed oe Trust — Securing Debt oe Another.
    Where a corporation, which executes a deed of trust to secure the debt of another corporation, has, with the knowledge of the bank to which the deed of trust is given, been organized for this purpose, its organization is for an illegal purpose which invalidates the deed of trust.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 16-22; Dec. Dig. <&wkey;>14.]
    4. Corporations &wkey;>487 — Ultra Vires Act-Execution oe Deed oe Trust — Ratification.
    Where the execution of a deed of trust by a corporation to secure the debt of another corporation was ultra vires, it was incapable of ratification.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1893-1898; Dec. Dig. <fc>487.]
    5. Homestead <&wkey;29> — What Constitutes— Intention.
    That the husband and wife had frequently gone over the land in controversy, looking for a building site, and had tentatively selected several sites thereon, did not give the land a homestead character, where they had done nothing to dedicate it, or any part thereof, to homestead purposes, a mere intention to occupy laud at some future time as a homestead, unaccompanied by any act evidencing such intention, being insufficient, though actual residence is not always necessary.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. § 37; Dec. Dig. <®==>29.j
    Appeal from District Court, Williamson County; C. A. Wilcox, Judge.
    Action by the Taylor Feed Pen Company against the Taylor National Bank, wherein Mrs. Willie' Ripley intervened. From judgment for defendant, plaintiff appeals.
    Affirmed in part and reversed in part and rendered.
    White, Cartledge & Graves, of Austin, for appellant. H. C. Mantor, of Taylor, and Batts & Brooks, of Austin, for appellee.

       Writ of error pending in Supreme Court.

   Findings of Fact.

JENKINS, J.

The appellant executed to appellee its note for $6,500, and a deed of trust on 5842/100 acres of land to secure the same. It brought this suit to cancel said note and deed of trust and to remove cloud from its title to said land. In 1910, the Taylor Cotton Oil Works was indebted to ap-pellee in a sum considerably in excess of the amount that appellee was permitted, under the national bank, laws, to loan to any one customer. Appellee had a mortgage upon the property of the Oil Works to secure all of its indebtedness, and considered the same safe, but desired to reduce said indebtedness to $25,000, in order to comply with the national bank laws. F. E. Ripley was the president and general manager of the Oil Works, company, and a stockholder therein. Ripley was security upon the notes of the Oil Works Company to the bank, amounting to $25,000, but was not security upon the open account due by the Oil Works Company to the bank. Ripley at that time was the owner of the land involved herein, and the president of the bank suggested that Ripley sell said land and use the proceeds in paying the open account of the Oil Works Company. Ripley replied that he did not wish to sell the land, for the reason that it was his homestead, that he intended to build upon it and make his home thereon, but that he was willing to mortgage the same to the bank. The bank declined to take a mortgage on account of Ripley’s claiming the land as his homestead. In further discussing the matter it was agreed .between Ripley and the president of the bank that Ripley would incorporate the Taylor Feed Pen Company, for $9,000, and deed said land to the corporation, taking its stock in payment therefor, and that the corporation would execute its note to the bank for $6,500, securing the same by deed of trust on the land, and that the proceeds of the note should be used in paying the open account of the Oil Works Company to the bank. This was done, and it is to cancel this note and deed of trust that this suit is brought. An entry was made on the books of the Oil Works Company, showing its indebtedness to the Feed Pen Company in the sum of $6,500. The Oil Works Company subsequently became bankrupt, and Ripley, in behalf of appellant, proved up this account against it, and received a pro rata of the funds of the Oil Works Company. The case was tried before the court without a jury, and findings of fact and conclusions of law were filed herein. Without stating such findings and conclusions in detail, it is sufficient to say that the court found that the note and deed of trust executed by appellant formed a part of the consideration for which the land was conveyed by Ripley and wife to the Feed Pen Company, and that said note and deed of trust were binding upon appellant. Further facts applicable to the points decided will be stated in the opinion.

Opinion.

We do not deem it necessary to discuss seriatum all of the assignments of error herein. After a careful examination of the record, aided by the well-prepared briefs of counsel on either side, we have arrived at the conclusion that this case ought to be reversed and rendered in favor of appellant.

The note and deed of trust of appellant were executed without consideration. The Oil Works Company was indebted to the bank on open account as well as on note. Ripley was not liable on the open account; he did not owe the Oil Works Company anything. On the contrary, the Oil Works Company was largely indebted to him. The Feed Pen Company did not owe the Oil Works Company, and did not owe the bank. The transaction was simply one of a corporation undertaking to secure the debt of another corporation, and, in doing so, to use its funds for a purpose other and different from that for which it was incorporated. This it could not legally do. Article 1164, Rev. Stat.; Transportation Co. v. Pullman Co., 189 U. S. 25, 11 Sup. Ct. 478, 35 L. Ed. 55; Deaton Grocery Co. v. Harvester Co., 47 Tex. Civ. App. 267, 105 S. W. 556; Railway Co. v. Worthington, 88 Tex. 562, 30 S. W. 1055, 53 Am. St. Rep. 778; Bank v. Oil Co., 40 S. W. 330; Lumber Co. v. Pierson, 139 S. W. 618.

It is contended by appellee, and was so found by the court, that the promise to execute the note and deed of trust on behalf of the Feed Pen Company, and the advancement of the money to the Feed Pen Company, was a sufficient consideration to sustain the note and deed of trust. The agreement to execute these instruments was made by Ripley before the corporation was formed, and was not binding upon the corporation. It was an agreement that the corporation would do that which it had no lawful right' to do. If, as contended by appellant, the real purpose in forming the Feed Pen corporation was to-execute a deed of trust on this land to secure this indebtedness, then such corporation was formed for an illegal purpose, and was-so formed with the knowledge, consent, and advice of appellee. Ripley and wife did not receive anything for the land except the stock of the Feed Pen corporation, and there was no agreement that they should receive-any other consideration. The land did not exceed in value the amount of its capital stock, to wit, $9,000. Ripley gave too two shares of stock, one each to Wills and Martin, who were named as directors in the charter. There was never any formal meeting of the-directors of the Feed Pen Company. At the time the deed of trust was executed the attorney for the bank wrote a resolution authorizing the board of directors of the Feed Pen Company to execute this deed of trust,, and the same was signed by Ripley and Wills. This resolution, however, stated that the consideration for the execution of the deed of trust was the cancellation of a prior deed of trust held by the appellee on this land to secure an indebtedness of $10,000, and such is the consideration recited in the deed of trust. At the time of the execution of this deed of trust the bank, its attorney, and Ripley supposed that this prior deed of trust had never been released; but, as a matter of fact, it had been released by the bank some seven years before. Wills knew nothing of the agreement to execute this deed of trust for money to be used in payment of the indebtedness to the Oil Works Company, or for any other purpose than that recited in the deed of trust. Martin was out of the state and had no connection with the transaction and no knowledge of it.

As is seen from the above statement, the appellant received no benefit from the transaction. The money was never withdrawn from the bank, but simply credited on the books to appellant, and then charged off and credited to the Oil Works Company. If this transaction was ultra vires (and we hold it so to have been), it was incapable of ratification, as will appear from the authorities above cited. In fact, there has been no attempt on the part of the directors of appellant to ratify this transaction.

Mrs. Willie Ripley intervened, claiming the land in question as her homestead, and alleging that her husband had refused to join her in this intervention. The evidence shows that F. E. Ripley, husband of inter-vener, purchased 320 acres of land, of which the land in question is a part; that at the* time of the purchase, January, 1901, Ripley intended to establish his homestead on a portion of this tract. In 1905, he sold all. of said tract except the 58*t2/ioo acres in controversy in this case, and thereafter intended, to build a home upon this land, whenever he should be able to build such a home as he wished to, and the intervener joined in. such purpose. She and her husband had fre- - quently gone oyer the land looking for a building site, and bad tentatively selected several sites thereon; but otherwise they had done nothing to dedicate this land, or any part thereof, to homestead purposes. While actual residence is not necessary, under all circumstances, to fix the homestead character upon land, yet a mere intention to occupy land at some time in the future as a homestead, unaccompanied by any act evidencing such intention, is not sufficient to give such land a homestead character. Wiseman v. Watters, 142 S. W. 134; Cameron v. Gebhard, 85 Tex. 610, 22 S. W. 1033, 34 Am. St. Rep. 832; Town Co. v. Griggs, 93 Tex. 456, 56 S. W. 49; McDowell v. Northcross, 162 S. W. 16; Parker v. Cook, 57 Tex. Civ. App. 234, 122 S. W. 422; Parson v. McKinney, 133 S. W. 1085.

For the reasons stated, the judgment of the trial court, as between intervener and appel-lee, is affirmed in so far as it denies the in-tervener homestead rights in the land, and reversed in so far as it decrees foreclosure of mortgage lien against her; and the judgment as between appellant and appellee is reversed and here rendered for appellant.

Affirmed in part and in part reversed and rendered.
      ^^>Eor other cases see same topic and KEY-NUMBER in ali Key-Numbered Digests and Indexes


text:
    KRENZ et al. v. STROHMEIR et al.

    (No. 5427.)
    (Court of Civil Appeals of Texas. Austin.
    Feb. 3, 1915.
    On Motion for Rehearing, April 14, 1915. On Motion for Rehearing by Appellants, May 26, 1915.)
    1. Tbusts @=>103 — Constructive Trust — Community Property.
    Where a husband, with intent to defraud his wife of her community interest, takes in the name of a son deeds of property bought with community funds, no consideration passing from the son, the deeds while conveying the legal title to the son, conveyed the equitable title to the community estate, and the son is a trustee in invitum, holding the legal title for the benefit of the equitable beneficiaries.
    [Ed. Note. — For other cases, see Trusts, Cent. Dig. § 154; Dec. Dig; @=>103.J
    2. Husband and Wife @==>267 — Community Property — Fraud on Wife.
    While, during coverture the husband is vested with management and control of the community estate, his voluntary disposition thereof to defraud his wife of her interest therein is void as against her and those claiming under her.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. §§ 896, 929-938; Dec. Dig. @=>267.]
    3. Evidence @=>230 — Declarations — Title to Property.
    Declarations of deceased, made after taking in the name of a son deeds to property bought with the community funds of deceased and his wife, and in the absence of Ms son, are in a suit between such son and children of the wife by a former marriage for partition of the community estate, admissible against the son, being, when made, against deceased’s interest, and therefore admissible against one claiming under him, and also because against the son’s interest.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 835-851; Dec. Dig. @=>230.]
    On Motion for Rehearing.
    4. Appeal and Error @=>1062 — Harmless Error — Submission of Issues.
    That among the special issues, on which a case was submitted to the jury, was an immaterial one not raised by the pleading, is harmless, the jury’s special findings on the material issues supporting the judgment.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4212-4218; Dec. Dig. @=> 1062.]
    5. Trial @=>365 — Special Findings — Reconciliation.
    It is the duty of the court, if it can reasonably be done, to reconcile the special findings of the jury.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 871-874; Dec. Dig. @=>365.] ./
    On Motion for Rehearing by Appellants.
    6. Husband and Wife @=>274^Community Property — Accounting by Heir.
    Where one for purpose of defrauding his wife takes in the name of his son a deed of property bought by him with community funds, the son to be entitled to participate in partition of the remainder of community estate must account for the present value of the whole of the land, and not merely of half of it.
    [Ed. Note. — For other cases, see Husband and Wife, Cent. Dig. §§ 1026-1031; Dec. Dig. @=> 274.]
    Appeal from District’ Court, McLennan County; Tom L. McCullough, Judge.
    Suit by Albert Krenz and another against Henry Strohmeir and others. Judgment for defendants, and plaintiffs appeal.
    Affirmed.
    Sleeper,- Boynton & Kendall, of Waco, for appellants. E. W. Hander, of Waco, and Lucius Williamson and Nat Llewellyn, both of Marlin, for appellees.

       Writ oí error pending in Supreme Court.

   Findings of Fact.

JENKINS, J.

Chris Krenz and Charlotte Krenz were married in 1874. Prior to such marriage Charlotte was a widow with three children, who survived her and are appellees herein. There were born to said marriage two children, Albert and Lena, now the wife of Earnest Leuschner, who are appellants herein. Both Chris Krenz and Charlotte Krenz died intestate, the former October 31, 1912, and the latter -December 22, 1912.

During the lifetime of Chris Krenz he purchased, besides his home tract, certain lands, taking title thereto in the name of Albert Krenz, and made certain gifts or advancements of personal property to his children Albert and Lena. At the death of said Chris and Charlotte there was certain real and personal property in their possession, purchased with community funds. Appellants brought suit for the partition of this property, of which they claimed one-half as the heirs of their father, the said Chris Krenz, and two-fifths as the heirs of their mother, the said Charlotte Krenz.

The appellees replied that during the lifetime of said Chris Krenz he purchased and paid for, out of the community funds of the estate of Chris and Charlotte Krenz, various tracts of land, describing same, taking deeds thereto in the name of Albert, among which were four tracts, known respectively as the 49-acre Ponder, the 37%-acre Bird, the 10-acre Gameson, and the 100-acre Gameson tract, and had given to said Albert and Lena certain personal property, describing the same, and alleging the value thereof, and that the same was done without the knowledge or consent of the said Charlotte Krenz, with the intent to defraud her and her children, the appellees herein, of her portion of said community estate, and that Albert Krenz was a party to the scheme concocted and devised by Chris Krenz 'for said fraudulent purpose.

The ease was submitted on special issues, to which the jury returned findings as follows-.

“(5) As to the Ponder tract, was the money used in paying for the same in whole or in part the community funds of Chris and Charlotte Krenz, or was it paid for with the funds of Albert Krenz in whole or in part?”
To which the jury answered: “Community funds.”
“(6) If you find it was paid for in part with community funds and in part with funds of Albert Krenz, then you will find how much was paid with such community funds, and how much was paid with funds of Albert Krenz?”
To which the jury answered: “All community funds.”
“(7) If you find that the money paid for the Ponder tract was community funds in whole or in part, then you will find whether and answer whether the same was an advancement to Albert Krenz or an absolute gift to him.”
To which the jury answered: “Advancement.”
“(8) Was the conveyance of the Ponder tract to Albert Krenz and the payment of the community funds, if any, therefor by Chris Krenz done to defraud Charlotte Krenz out of her interest in said land, or said community fund?”
To which the jury answered: “Yes.”
“(9) If you answer the last foregoing or eighth question in the affirmative, then say whether Albert Krenz was a party to or had knowledge of such fraud?”
To which the jury answered: “Yes.”

Similar questions were propounded and similar answers given as to the Bird and the two Gameson tracts. The evidence sustains the answers, except as to the “Advancements.”

The court rendered judgment that said four tracts of land, and the two tracts composing the homestead and the personal property described in appellants’ petition, were the property of the community estate of Chris and Charlotte Krenz, deceased, and • appointed commissioners to partition thé same allotting seven-twentieths to each of the two appellants Albert and Lena, and two-twentieths to each of the three appellees, the children of Charlotte Krenz by her first marriage.

As shown by the evidence and found by the court the value of the four tracts of land in the name of Albert is $19,700; the value of the two tracts in the name of Chris Krenz (the homestead) is $17,200; advancements of personal property to Albert and Lena, $6,500; personal property belonging to the community estate $6,300. The court found, and the evidence sustains the finding, that Chris and Charlotte Krenz deeded to Albert, as a gift to him 58% acres, the value of the same not found by the court.

Opinion.

If the findings of the jury that the deeds to the Ponder, Bird, and two Gameson tracts of land were taken in the name of Albert Krenz, with the intent upon his part and upon the part of Chris Krenz to defraud Charlotte Krenz of her community interest therein is sustained by legal evidence, the justice of this case has been reached by the judgment of the trial court herein. If such was the case, while the deeds conveyed the legal title to Albert, they conveyed the equitable title to the community estate of Chris and Charlotte Krenz, and the law forces upon Albert the position of trustee in invitum. In such case, he holds the legal title for the benefit of the equitable beneficiaries. Hendrix v. Nunn, 46 Tex. 147; Satterthwaite v. Loomis, 81 Tex. 70, 16 S. W. 616; Neil v. Yager, 22 Tex. Civ. App. 628, 55 S. W. 420; Hagerty v. Harwell, 16 Tex. 665; Moore v. Moore, 73 Tex. 389, 11 S. W. 398; Gillean v. Witherspoon, 121 S. W. 913. The district court trying this case had the power to enforce such trust. Fisher v. Wood, 65 Tex. 204.

During coverture the husband is invested by the laws of this state with the management and control of the community estate, and in bona fide transactions, his management thereof is'absolute and exclusive. But he cannot make a voluntary disposition of such property for the purpose of defrauding the wife of her interest therein, and any such attempted disposition is void as against the wife and those claiming under her. Watson v. Harris, 130 S. W. 237; Stramler v. Coe, 15 Tex. 216; Smitheal v. Smith, 10 Tex. Civ. App. 446, 31 S. W. 424; Smith v. Smith, 12 Cal. 216, 73 Am. Dec. 533. In the latter case the Supreme Court of California, in construing a statute similar to ours said:

“But we think it clear that the law, notwithstanding its broad terms, will not support a voluntary disposition of the common property or any portion of it, with the view of defeating any claim of the wife.”

It was held by Chancellor Kent, in Swaine v. Perine, 5 Johns. Ch. 482, 9 Am. Dec. 321, that conveyances of a husband’s separate property on the eve of marriage, for the purpose of depriving the intended wife of her common-law right of dower were fraudulent as against her claim. Neither upon authority nor reason do the fraudulent acts of the husband against the property of the wife stand upon any different footing than such acts between other parties.

That the Ponder, Bird, and Gameson tracts of land were purchased with the community funds of Chris and Charlotte Krenz, and deeded to Albert Krenz at the instance of Chris Krenz Is shown by testimony aliunde the declarations of Chris Krenz. The circumstances raise -a strong suspicion that Chris Krenz intended by these transactions that his children should have the greater part of the community estate to the exclusion of his wife’s children by her first marriage from their legitimate share. After having acquired and paid for the home place, 200 acres, he bought the Ponder tract and took the deed in the name of Albert, who was then only 17 years of age. He continued this course during his lifetime, buying other lands besides those involved in this suit, and selling the same at a profit. His hank account was kept in Albert’s name. He made advancements of personal property to Albert, and, joined by his wife, he deeded him 58 % acres of land for a recited money consideration, which in fact was not paid.

But the finding of the jury that Chris Krenz had the four tracts of land involved in this suit conveyed to Albert for the purpose of defrauding Charlotte Krenz rests principally upon the statements made by Chris Krenz in reference to those transactions; and, to our minds,-the most serious question involved in this appeal is: Were such declarations legal evidence against appellants ? They were made to his neighbors and friends after the deeds were executed and in the absence of Albert. They were objected to by appellants as hearsay.

The general rule that hearsay is not admissible as evidence has been settled for about 200 years, but that there are exceptions to the rule is as old as the rule itself. One of these exceptions is that the declarations of a party against his interest may he given against him, or those claiming under him. We believe this rule is applicable to the facts of this case. To illustrate: Suppose Mrs. Krenz had died leaving surviving her her husband Chris Krenz, her children Albert and Lena and her children by her first marriage, the appellees herein. If Chris Krenz had demanded one-half of the homestead tract and the personal property involved herein, these appellees could have said: You must bring the four tracts deeded to Albert into the partition ; they also belong to the community estate. He would have replied, Not so; it is true that they were purchased with communi-nity funds, but they were deeded to Albert as a. gift to him, or as an advancement, and in either case do not belong to the community estate. The reply would have been: But those deeds were made without the knowledge or consent of our mother and in pursuance of a scheme to defraud her of her community interest therein. If he had demanded proof of this charge, they could have replied: Your own declarations. In a suit between them and Chris Krenz they could have put in evidence his declarations that were proven in this case. He being dead, why cannot they be put in evidence against those who are claiming under him? They were against his interest when made, in that their effect was to reduce the value of Ms interest in the recognized community estate. And as he had the right to give one-half of the community estate to Albert and as the property deeded to Albert exceeded the value of the land remaining, such declarations would have proved that he had but little interest in the property on hand at the time of the death' of his wife. The test of the admissibility of such declarations is: Were they against Ms interest at the time they were made? Clearly they were, and we think that the trial court did not err in admitting them.

We think that the declarations of Chris Krenz,were admissible for the further reason that they were against the interest of his children. We know of no decision which rests an exception to the rule against the admissibility of hearsay evidence on this ground, but we think that such exception is supported in principle by all decisions enforcing the rule or declaring exceptions thereto.

The purpose of all testimony is the ascertainment of the truth as to the matter in controversy. Not all testimony given in court is true, but such testimony is more likely to be true than statements made out of court, for the reason that it is given under oath which seeks to bind the conscience of the witness, and for the reason that the opposite party may be able, by cross-examination, to show by the witness that his statements are false or improbable, or made without sufficient information, and amount to no more than opinions, or that he is strongly biased in favor of the party in whose behalf he is testifying. If the testimony of the witness is false, a cross-examination will probably circumstantially discredit him, and enable the jury to properly weigh such testimony. For these reasons it is desirable that all statements offered in evidence should be made in open court. But if the statements offered to be proven were made by one who is dead or beyond the jurisdiction of the court, they must either be received without such safeguards, or the benefit of them must be lost to' the party in whose favor they were made. The exceptions to the rule are based upon necessity, and upon the supposition that the circumstances under which they were made afford a sufficient probability of their truth to admit their being received and considered by the jury for what they may deem them to be worth. That these are the principles upon which rest the exceptions to the nonadmissi-bility of hearsay evidence will appear by reference to some of such exceptions. Among them may be mentioned declarations as to family pedigree; declarations against interest ; dying declarations; res gestae; subscribing witnesses; official certificates; public records, etc. In each of these cases the testimony is admissible for the reason that a knowledge of human nature indicates, and experience has proven, that the circumstances under which such declarations were made are sufficient guaranties of their truthfulness to admit them in evidence, rather than to deprive parties of their benefit. Usually the necessity for admitting such declarations rests upon the fact that the party making them is dead; hut in some instances, as in case of public records, it rests upon public convenience.

The law as to the admissibility of any particular hearsay evidence rests, not upon the fact that some court at some time has declared such evidence admissible, but upon whether the statement offered comes within the principle upon which hearsay evidence is admissible, viz.: Necessity and circumstantial guaranty of its trustworthiness. In the instant case the necessity exists for the reason that Chris Krenz is dead. Were such declarations res gestee, they would be admissible under all the decisions, for the reason that men do not usually speak falsely, except by design, and being spoken at the time of the transaction, and before there was time to reflect upon the probable consequence of the statements, they are presumably true. If it were admitted by appellants that such declarations were made by Chris Krenz at a time when they were against his interest, they would not deny that such statements were admissible. Why? Because an unbroken line of decisions have so declared. But why have they so declared? Because men do not make statements against their own interest, unless they believe them to he true. Is it any more probable that a father who has great affection for his son and solicitude for his welfare will deliberately make statements against the interest of such son,'if they are not true, than that he would make such statements against his own interest? We think not. If the case comes clearly within the reason of a rule, it comes within the rule, though no previous occasion may have demanded its application by any court. Chris Krenz knew his own purpose in having the deeds made to Albert; no cross-examination could have thrown doubt upon that proposition. His declarations as to such purpose were deliberately and repeatedly made in conversations with his neighbors, one of whom came across the waters with him from the fatherland, when Chris was a youth. He declared that his wife was ignorant of what he had done and was doing, and two of the conversations testified to were in her presence, and indicated her ignorance as to such transactions. He said that he was able to keep her in ignorance, because she could neither read nor write, and no testimony was offered to the contrary. In addition to taking deeds in Albert’s name, advancements of money and personal property to him show the father’s affection for him and his solicitude for his son’s welfare. Such affection and solicitude continued to the time of the death of the father. There was not only no inducement for his making the statements if they were false, but the strongest of reasons for his not making them unless they were true. For these reasons we hold that the court did not err in admitting in evidence the declarations of Chris Krenz as to his purpose in having deeds taken in Albert’s name.

Finding no error of record, all of appellants’ assignments of error are overruled without discussing the same seriatum, and the judgment of the trial court is affirmed.

Affirmed.

On Motion for Rehearing.

We were in error in saying that the value of the four tracts of land, and that Albert Krenz was a party to his father’s scheme to defraud Mrs. Krenz was alleged in appel-lees’ answer. But these errors are immaterial, in that they did not influence our decision. If a scheme to defraud his wife out of her interest in the community estate was concocted by Chris Krenz, in pursuance of which he caused the land to be deeded to Albert, and Albert paid no consideration therefor, it would not matter that he did not know of such fraudulent intent.

Appellants assigned error in submitting this issue, for the reason that it was not pleaded. Where a general charge is given it is error to submit an issue not raised by the pleadings, upon which the jury might have based their verdict, for the reason that it cannot be known that they did not do so. But where a case is submitted on special issues, it does not' matter that an issue is submitted which is not raised by the pleadings, as the court will base its judgment on the findings of the jury on the material issues. The court might have submitted to the jury the issue as to whether or not George Washington cut the cherry tree, and they might have found that he did not, but this would not have been a ground for setting aside the judgment if it followed the verdict as to the material issues raised by the pleadings. This is one of the many reasons why cases should be submitted on special issues.

As to alleging the value of the land, if such land was deeded to Albert by way of advancement, with the knowledge and consent of his mother, and it had been brought into hotchpotch, it would have been necessary to ascertain its value, in order to determine whether or not he was entitled to any additional portion of the community estate, and if so, how much. But if the finding of the jury that this property was deeded to Albert for the purpose of defrauding Mrs. Krenz out of her community interest therein was correct, such lands were community property, and in partition of the same their value would be determined by the commissioners, without regard to the finding by the jury as to such value.

On March 10, 1915, we granted appellants’ motion, for rehearing herein on the ground, bf a conflict in tile findings of the Jury on the issues of fraud and of advancements. Upon further consideration, we have concluded that there is no conflict in such findings in the sense that the jury meant them, viz.: That the deeds were executed to Albert without the knowledge or consent of Oharlotte Krenz, and with the intent to defraud her of her community interest in the lands, but that as to Ohris Krenz, he intended them as an advancement and not as a gift to Albert. The jury made a finding that Ohris Krenz intended that certain property received by the daughter Lena should be an advancement to her, and had the questions as to Albert been framed as in the case of Lena, we doubt not that the finding would have been equally as specific. Looking to all of the questions, it is apparent that the court meant the issue of gift or advancements to Albert to apply to the intention of Chris Krenz only, and that the jury so understood. It is the duty of the court to reconcile the answers of the jury, if it can reasonably be done. Jordan v. Morgan, 15 S. W. 599. Chris Krenz being the owner of a half interest in the lands, had the right to have them transferred to Albert to the extent of his interest therein, and if there is a sufficient amount of the community estate remaining, Albert’s title to the four tracts of land will not be disturbed, but in the partition they will be charged up to him at their present value, as determined by the court on the report of the commissioners of partition.

The motion of appellees for a rehearing is granted, the judgment of the trial court is affirmed, with instructions to proceed with the partition of the community estate of Chris and Charlotte Krenz in accordance with the judgment of said court and our opinion herein.

Motion granted and judgment affirmed.

On Motion for Rehearing by Appellants.

Appellants insist that the rule that hearsay declarations against interest are admissible in evidence is not applicable to this case, and in support of such contention cite Ryle v. Davidson, 102 Tex. page 234, 115 S. W. 30. In that case Mr. Justice Williams, speaking for the court, said:

“The rule of evidence relied on (that hearsay against interest is admissible) is well sustained by the authorities, but no instance of such application of it as is here contended for has been cited or found by us.”

In that case the owner of a tract of land had executed two conveyances to it, one in 1835, and one in '1846. The prior deed was not recorded until 1847. The issue was whether the grantee in the last deed was a purchaser for value, and the question certified was whether the recital in said deed of a cash consideration of $500 was admissible to prove such payment. It was held that it was not. The purchaser under a prior unrecorded deed obtains title to the land subsequently conveyed, but, by force of the registration statute he is estopped from asserting the same against a subsequent purchaser for value without notice. The grantor having parted with his title, the recital of the payment of the purchase money is, as to those not parties or privies to such deed, purely hearsay, and is within the ban of the general rule excluding such testimony.

In the instant case, however, Ohris Krenz had not, from the standpoint of equity, parted with title when he made the declarations given in evidence. While the husband is the active manager of the community estate, and, in the absence of fraud, may dispose of the same as he sees fit, he is in fact but the trustee for such estate and cannot dispose of it in fraud of the rights of his wife, the co-owner thereof. In this case the community funds are clearly traced into the four tracts of land in controversy. This constitutes them community property. The deeds are in the name of Albert, but he paid no consideration therefor, and consequently can urge no defense against the claims of Ohar-lotte Krenz, or of her heirs, that could not have been successfully urged by Ohris Krenz. The declarations proven were against his interest in that the effect of them was to diminish his interest in the unsold portion of the community estate to the value of said four tracts of land.

Appellants insist that inasmuch as Ohris Krenz was the owner of one-half of the community estate, the deeds to Albert conveyed title to one-half of the lands, and therefore, as to such half Albert should be charged, if at all, only the value of such half at the time of the conveyance, and not such value at the time of the trial. Our view is that the deeds to Albert conveyed no equitable title to any portion of the land as against Mrs. Krenz, but that the same became and remained community property, and that before Albert will be allowed to participate in the partition of the remainder of the community estate, he must account for the present value of the four tracts of land of which he becomes the equitable as well as the legal owner by virtue of the partition of said estate.

Eor the reasons stated in our former opinions herein, as well as those stated in this opinion, appellants’ motion for a rehearing is overruled.

Motion overruled.
      @^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: RASBURY, J.

text:
    O’NEIL v. GIBSON.
    (No. 7351.)
    (Court of Civil Appeals of Texas. Dallas.
    May 22, 1915.)
    1. Bills and Notes <&wkey;451 — Defense—Set-Off.
    In a client’s action on a note executed by Ms attorney, defendant’s contention that the note was executed that it might be used by the client to obtain money with which to pay defendant an attorney’s fee was not objectionable as presenting matter not available as a legal defense or set-off to the note.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1342, 1343, 1365, 1366; Dec. Dig. &wkey;>451.]
    2. Contracts <&wkey;350 — Mutuality—Proof.
    That one party to a contract testified to by the other party, testified that the contract was not made, did not conclusively show that the contract was lacking in mutuality.
    [Ed. Note. — For other cases, see Contracts, Cent. Dig. §§ 1819-1823; Dec. Dig. &wkey;350.]
    3. Limitation of Actions <&wkey;25 — Application of Statute — Defense to Note — Accommodation Maker.
    Where, in an action on a note executed by plaintiff’s attorney, defendant claimed that the note was given that it might be used by plaintiff to secure money to pay an attorney’s fee owing to defendant, he was an accommodation maker and the two-year statute of limitation, barring his right of action for the fee, was inapplicable to the issue thus presented.
    [Ed. Note. — For other cases, see -Limitation of Actions, Cent. Dig. §§ 113, 118-131; Dec. Dig. <&wkey;25.]
    4. Appeal and Error &wkey;ol001 — Judgment-Evidence.
    A judgment based on findings of fact reasonably supported by evidence, will be affirmed on appeal.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3922, 3928-3934; Dec. Dig. &wkey;1001.]
    Appeal from Navarro County Court; K. R. Owen, Judge.
    Action by Ed C. O’Neil against El J. Gibson. From judgment for defendant, plaintiff appeals.
    Affirmed.
    Jack & Jack, of Corsicana, for appellant. Callicutt & Johnson, of Corsicana, for appel-lee.
   RASBURY, J.

Appellant sued appellee in the justice court of precinct No. 1 of Navarro county, August 2,1913, on appellee’s promissory note dated November 28, 1910, and due 20 days thereafter. Appellee defaulted in the justice court, but, within the time provided by law removed the case to the county court, where trial was had de novo before the county judge, resulting in judgment on the merits of the case for appellee. No question arises on appeal as to the sufficiency of the pleading of either party, but all questions arise upon the sufficiency of the evidence to support the judgment of the court, and for that reason we will omit a statement of the pleading, since the defense of appellee and appellant’s answer thereto appear from the evidence and the issues raised thereon in this court.

Appellant testified concerning the execution and delivery of the note, which was put in issue, in substance, that on November 28, 1910, appellee, who was his attorney and special friend, called at his place of business in Corsicana and borrowed $150, executing the note sued on as evidence of the loan. Appellant held the note until October 9, 1911, when he sent it through a local bank to Dallas, where appellee had in the meanwhile removed, for collection, sending it again foi collection October 13, 1911, payment in both instances being refused. After the note had been due about a year, appellant saw ap-pellee and reminded Mm the note was unpaid, at which time appellee promised to pay the same as soon as he could close a trade for the sale of a house then pending, and that until the trial of the case in the county court appellee made no claim that he did not owe the money represented by the note.

Appellee on the contrary testified that at the time the note was executed appellant was indebted to the firm of Gibson & Calloway $350, balance on fees for legal services rendered appellant during the year 1909 in defending him before the courts in approximately 17 cases charging him with violation of the local option laws, and that on that date appellee visited appellant, and after calling his attention to the unpaid balance and reminding appellant that he had subsequently rendered him other valuable professional services for which he had not been remunerated, insisted that appellant make him a substantial payment. Further talk was indulged in, but it was then and there agreed that appellee should execute the note sued on, which was to be indorsed and negotiated by appellant and the money so secured turned over to appellee, with the further agreement that when the note matured appellant should pay it, the purpose being to raise money to pay upon appellant’s debt to appellee. The note was executed and indorsed, and appellant did secure the money and pay it over to appellee on the fees due, with the agreement that the debt was appellant’s and would be paid by him when it matured. From the maturity of the note on December 20, 1910, to January 14, 1911, ap-pellee saw appellant daily and nothing was said by appellant relating to the note. During 1911 and 1912 appellee saw appellant frequently, but the note was not mentioned. Appellant did not at any time claim appellee owed Mm the money, until the year 1913, when appellant became offended at appellee because appellee accepted employment from appellant’s wife in a suit for divorce growing out of domestic differences, when appellant demanded payment of the note, which appel-lee refused. L. R. Calloway corroborated ap-pellee’s testimony concerning the employment of Gibson & Calloway, and that there was due the firm $350 at the timé the note sued on was executed, which had been assigned to Gibson.

Appellant in rebuttal specifically denied the statements of appellee that the $150 was to be paid on attorney’s fees, but declared that the note represented nothing more nor less than a loan.

Thus it is seen that appellant and appellee are hopelessly in conflict concerning the real consideration for the execution of the note. It is also equally clear that it was the function of the trial judge to reconcile the conflict in the evidence of the parties or adopt as true the facts testified to by one or the other of the litigants. The trial court acted in that respect, and it is useless for us to argue that we cannot disturb such action. It only remains therefore to ascertain if the trial court has in any respect erred in applying the rules of law to the facts so found.

It is first contended, in effect, that even though the court adopted appellee’s evidence as the truth of the transaction, judgment should nevertheless have been for appellee, because the contract between appellee and appellant as testified to by appellee was not available as a legal defense or set-off to the note. The contention misconceives the issue made by the pleading, as well as the purpose of the evidence. The claim made by appellee was that the note represented the debt of appellant and the evidence, if true, establishes nothing less than that. Hence, no issue of payment or set-off arises. The trial judge having found the facts as related and the issue being solely one of fact, and being supported by the evidence, the question of defense or set-off is eliminated, because, as stated, the debt was not the debt of appellee.

Nor can it be said as urged by appellant that the contract testified to by appellee was not mutual solely because appellant testified that no such agreement was in fact made. In disposing of the conflict in the evidence of the parties the court necessarily discarded the evidence of one of them, as it was his duty to do, and when he did so there was of course entire mutuality in the contract proven.

Neither does the question of limitation enter the case as is also urged by appellant. Appellee was not setting off against the note the fees owed him by appellant, and which were barred by the two-year statute of limitation. According to the agreement testified to by appellee and adopted by the court, the note was made in order to enable appellant to make a payment on his debt to appellee. In short, by the finding of the judge appellee’s legal status was that of accommodation maker. Accordingly limitation was not an issue.

As stated in the beginning the case presents issues of fact solely. Such issues are for the determination of the trial court, and when the trial court has determined them the only duty of this court on appeal is to examine the evidence to ascertain if it supports the conclusions of the trial court. It is obvious from the statement already made of the evidence that it does support such conclusions. Accordingly the judgment is affirmed.

Affirmed.
      @=»For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes