text:
    CAMDEN FIRE INS. ASS’N v. WANDELL.
    (No. 7374.)
    (Court of Civil Appeals of Texas. Galveston.
    April 17, 1917.)
    1. Insurance <&wkey;378(2) — Consummation or Contract — “Insurance Agent.”
    A former agent of an insurance company to whom application for renewal of a policy is made, who turns application over to an agent for another company and collects the premium, is in law the agent for such company under Yer-non’s Sayles’ Ann. Civ. St. 1914, § 4961, providing that any person who takes or transmits other than for himself any application for insurance or any policy of insurance to or from an insurance company, or shall collect or transmit any premium or do any act in the making or consummating of any contract of insurance other than for himself, shall be held to be the agent for the company for which the act is done.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 971, 973, 974, 977-997.
    For other definitions, see' Words and Phrases, First and Second Series, Insurance Agent.]
    2. Insurance <&wkey;379(2) — Action on Policy— Defenses — Estoppel.
    Where the agent of an insurance company knew the facts in regard to a policy and caused it to be written with an erroneous ownership clause, the company was estopped from setting up such clause as a defense in an action on the policy.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1006.]
    3. Insurance <&wkey;373(l) — Reformation of Policy — Estoppel.
    In a suit to reform an insurance policy erroneously stating the name of the owner of the property insured, defendant company was es-topped to deny the validity of the policy when its agent, with knowledge of the true ownership, issued the policy in the name of the estate of a former owner and collected the premium therefor.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 947.]
    4. Insurance <&wkey;665(2) — Action on Policy-Evidence.
    In an action on an insurance policy wherein the name of the owner of the property insured was erroneously given, evidence held to support a finding that the contract of insurance was in fact entered into between plaintiff and defendant company.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1709.]
    5. Insurance <&wkey;624(l) — Action on Policy-Parties Plaintiff.
    In an action on an insurance policy, wherein the defendant alleges that the policy is payable in case of loss to a mortgagee, a judgment for plaintiff was not erroneous, since the assured under the policy may maintain an action thereon in its own name, although the policy be payable to another.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1557, 1558, 1562, 1563, 1567.]
    6. Insurance &wkey;3646(l) — Action on Policy— Burden of Proof.
    In an action on an insurance policy, wherein defendant alleged that losses were payable to the mortgagee, the burden was upon it to show that plaintiff did not have an interest sufficient to support the action.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1555, 1645-1649.]
    7.Insurance <§=3640(1) — Action on Policy— Pleading.
    In an action on an insurance policy, wherein defendant company claimed a reduction of the amount of loss because of a coinsurance clause, defendant was not entitled to such reduction where it did not plead the clause nor prove facts showing it was entitled to the reduction.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1609.]
    Appeal from Galveston County Court; George E. Mann, Judge.
    Action by A. H. Wandell against the Camden Fire Insurance Association. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    . Geo. G. Clough, of Galveston, for appellant. Williams & Neethe, of Galveston, for appellee.
   LANE, J.

This suit was instituted by plaintiff, A. H. Wandell, against defendant, Camden Fire Insurance Association, to recover the sum of $345 under the terms of a policy of storm insurance issued by the' defendant company.

Plaintiff, in substance, alleges that on the 11th day of April, 1914, for a consideration of 88 paid by him to defendant, the defendant agreed and bound itself to insure plaintiff’s certain building against damage by storm, etc., to the amount of $1,000; that in reducing said agreement to writing defendant, by mistake, erroneously inserted therein the name “Estate of F. C. Williar, Deed.,” instead of the name of plaintiff, and that such mistake was not discovered by plaintiff at the time such written contract was delivered to him by defendant; that said contract is evidenced by defendant’s policy No. 15594, and the contract is truly expressed therein, with the exception of the aforesaid mistake, made by the person who reduced the same to writing; that plaintiff relied upon defendant to have the contract properly reduced to writing- and was free from fault or negligence in failing to discover such mistake. I-Ie alleges that the building insured was damaged by storm in the sum of $345 while said policy was in force and effect, that plaintiff has demanded of defendant payment of such loss or damage, and that defendant has refused to make such payment, and denies that it is liable to plaintiff in any sum whatever, all to plaintiff’s damage in the sum of $345. His prayer is that said contract be so reformed as to make it evidence the true contract and agreement between plaintiff and defendant, and that plaintiff recover from defendant the amount of his damages.

By answer defendant denied all the allegations of plaintiff’s petition.

There was evidence sufficient to show the issuance and delivery of the policy as alleged by plaintiff, and that the building insured sustained damage in the amount found by the trial court; that at the time said contract for insurance was entered into between plaintiff and defendant plaintiff was the owner of the building insured, and that he had been the owner of said building for a long time prior to the making of said contract and had lived therein for more than onei year prior to making said) contract; that plaintiff owed about $1,400 of the purchase money on the premises on which said building was situated, which was held by the Real Estate Loan Company; that at the time he purchased the property there was a storm policy on it, which was made payable to said loan company “in so far as their interest appeared,” and which was in possession of said loan company; that plaintiff was notified that said policy had expired, and asked for a renewal of the same. 1-Ie learned that one E. E. Rice was the insurance agent who issued said policy, and he called on Rice for a new policy; that Rice mentioned the fact that the property belonged to F. C. Williar when the last policy was issued, and plaintiff told him that he had bought the property and wanted the new policy in his name; that plaintiff told Rice the old policy was in the possession of said loan company, and that when he got the new policy he should deliver the same' to said loan company; that the new policy, the one involved in this suit, was issued in the name of “Estate of F. C. Williar, Deed.,” instead of the name of plaintiff, and was made payable to the loan company, in so far as its interest appears, and was delivered by Rice to said loan company as he was directed to do by plaintiff; that plaintiff was notified by the loan company that it had received the policy, and plaintiff gave his check for $8, the amount of the premium, to Rice, who collected the same and paid it over to the defendant company, and it paid Rice a commission for procuring the same; that plaintiff never saw the policy until after the storm which damaged his building.

E. E. Rice testified that he was not the agent of the defendant company at the time he applied for the renewal policy on the property in question, nor when the policy was issued, that he was an agent for the Phoenix Insurance Company of Brooklyn, and wrote storm insurance, but that his company had ceased to write storm insurance in Galveston at that time, and that he had to place said renewal policy with another company, and that he placed the same with Seinsheimer & Co., agents of the defendant company, who, in behalf of their company, issued said renewal policy in the name of “Estate of P. C. Williar, Deed.”; that he handled the matter as a broker and received a commission for his services; that he knew the loan company held a mortgage on the property insured and that the policy was made payable to it when it was handed to him; that he thought that Mr. Lovenberg instructed him to have the policy renewed, but that he was not certain, but he knew that he received the cheek of plaintiff for the premium, and that he cashed the same, but had no recollection of plaintiff instructing him to renew the policy, but he might have done so.

There was other testimony, but we think that above stated is sufficient to clearly present the issues involved in this appeal.

The trial court, to whom the case was submitted without a jury, rendered judgment for the plaintiff for the sum of $335. From this judgment defendant has appealed.

By appellant’s first and second assignments he insists:

First. That “the court erred in rendering judgment for the plaintiff and in not rendering judgment for the defendant, because the undisputed proof and the admissions of the plaintiff show that the policy sued on was not issued to the plaintiff, but was issued to the estate of F. 0. Williar, and that the same was not transferred to plaintiff.”
Second. That “the court erred in rendering judgment for the plaintiff and in not rendering judgment for the defendant, because the undisputed proof shows that the mistake, if any, in the issuance of the policy was the mistake of the plaintiff, and not the mistake of the defendant, and that the defendant had no knowledge whatever of such mistake and was not a party thereto.”

E. E. Rice was agent for defendant company in procuring the renewal policy. Article 4961, Vernon's Sayles’ Civil Statutes; Virginia Fire & Marine Ins. Co. v. Cummings, 78 S. W. 716; R. C. L. vol. 14, p. 875, § 48; St. Paul Fire & Marine Ins. Co. v. Sharer, 76 Iowa, 282, 41 N. W. 19; Lingenfelter v. Phoenix Ins. Co., 19 Mo. App. 252.

Defendant’s agent knew the facts relative to the ownership of the property insured, or at least there was evidence sufficient to support a finding that he did, and, so knowing, accepted the premium and caused the policy toi be written containing the clause of ownership, and cannot now set up the fact that the ownership is erroneously stated in the policy to defeat the collection of the insurance. The knowledge of the agent so acting for the company is the knowledge of the company itself, and it is estopped from setting up the clause in which the ownership is erroneously stated as a defense. Fire Ins. Co. v. Laning, 31 S. W. 681, at page 683, and authorities therein cited; Burson v. Fire Association, 136 Pa. 267, 20 Atl. 401, 20 Am. St. Rep. 919; Phœnix Ins. Co. v. Tucker, 92 Ill. 64, 34 Am. Rep. 106; Crescent Ins. Co. v. Camp, 71 Tex. 503, 9 S. W. 473.

The court did not err in reforming the policy so as to make it evidence the true contract made between plaintiff and defendant, through its agent, and in rendering judgment for plaintiff. The company is estopped to deny the validity of the policy on the grounds that the ownership was not as therein stated, when its agent, with knowledge that the property belonged to plaintiff, issued the policy in the name of the estate of one who formerly owned the same, and took the premium. Insurance Co. v. Cummings, 78 S. W. 378; Ætna Ins. Co. v. Brannon, 99 Tex. 391, 89 S. W. 1057; Delaware Ins. Co. v. Hill, 127 S. W. 283; Joyce on Ins. § 3510.

We cannot better state our conclusions than they are stated in the able argument in appellee’s brief, which we here adopt as our own, on the matters presented by appellant’s first and second assignments.

That the evidence detailed in the foregoing statement is sufficient to support a finding that the contract of insurance evidenced by the policy sued upon was in fact entered into by appellant with appellee is apparent. Should the testimony of Rice to the effect that he had no recollection of having agreed to procure the policy for the appellee, and in his name, be treated as contradictory of appellee’s positive testimony that such an agreement was made between them, nevertheless appellee’s testimony is clearly sufficient to establish such agreement, and, the trial court having found in his favor, this court will under the familiar and well-established rule refuse to disturb such finding. That would be true even if the testimony of Rice raised a direct conflict with that of appellee, but we think it clear no such conflict exists. When properly analyzed, Rice’s testimony amounts to nothing more than if such an agreement was made with appellee he did not recollect it. He would not directly deny that it was made.

It then being true that appellee in fact applied for the policy, and it was agreed that it should be issued to him in his name, it necessarily follows that the name inserted in the policy was placed there through mistake of the parties. That such mistake was mutual, we think, is unquestionable. For certainly appellee in accepting and paying for a policy for which he had applied on his own property did so under the mistaken belief that he was receiving the policy which it had been agreed should be furnished him. And if his testimony is true, and it must be so accepted by this court, the policy which was issued did not express or evidence the contract or agreement which Rice intended that it should; for Rice had expressly agreed and understood that the policy should be issued to appellee in his name. While both Hulse and Rice in testifying expressed their conclusions that in procuring the policy the latter was not an agent of appellant, it is clearly established by the authorities which we have cited that he was in legal contemplation the agent of appellant, and that appellant is bound by his acts. Besides, it is undisputed that Seinsheimer & Co., who prepared the policy, were authorized agents of appellant, and it nowhere appears in evidence that they did not know that appellee had applied for the policy, and that they did not in fact intend to issue it in his name. Rice testified that he furnished them with a written memorandum giving the name and description of the property. That memorandum was not produced, and Hulse, the employé of Seinsheimer who prepared the policy, did not testify what it contained, and neither he nor Rice testified as to what name was given when the policy was ordered from Seinsheimer & Co., nor that appellee’s name was not given to them, nor that they did not understand that the policy was to be written for him. They gave no explanation whatever as to why the name “Estate of F. C. Williar” was inserted in the policy, and it is not unfair to presume that if it had not been put there by mistake they would have been in a position to and would have brought evidence to show that no mistake was made on their part.

If, then, by reason of such mistake the policy did not evidence the true contract which was made, it would be harsh indeed to allow the appellant to receive the premium on it from appellee, and then refuse to carry out its obligations under it because it through mistake had inserted the wrong name. That appellee was under the evidence in this case entitled to have such a mistake corrected is established by the authorities above cited.

The first and second assignments are overruled.

By the third and fourth assignments it is insisted that the trial court erred in rendering judgment for the plaintiff because under the terms of the policy sued on the loss, if any, is payable to the loan company “as its interest may appear,” it appearing that the property insured is mortgaged to said loan company, and therefore it is the owner of the claim sued on, and is not made a party to this suit.

These contentions are without merit and are overruled. Appellee, being the assured under the policy, has the right to maintain an action thereon in his own name, although the policy contains a clause providing for payment of loss, if any, to Real Estate Loan Company as its interest may appear.

The statement in appellant’s brief to the effect that “the plaintiff’s policy offered in evidence shows a transfer by him to the Real Estate Loan Company as its interest may appear” is not correct. No transfer or assignment of the policy.or any part of its proceeds by appellee to the Real Estate Loan Company was shown. The policy, however, contains as one of its original provisions a clause as follows: “Loss payable to Real Estate Loan Company as interest may appear.”

Appellee testified that when he bought the house the loan company held the purchase notes for the property; that he was at the time of the trial indebted to the loan company, the exact amount of such indebtedness he did not know, hut it was something like $500.

Appellant did not by plea in abatement or otherwise plead nonjoinder of the loan company nor ask that it be made a party. Branigan v. Jefferson Mutual Fire Ins. Co., 102 Mo. App. 70, 76 S. W. 643.

In order to defeat a recovery on the part of appellee, the burden was on appellant to show the existence of an interest in the Savings & Loan Company, and the extent of that interest and that burden was not discharged by merely showing that appellee was indebted to that company. Andrews v. Insurance Co., 92 Tex. 587, 50 S. W. 572; Huey & Philp v. Ewell, Admr., 22 Tex. Civ. App. 638, 55 S. W. 606.

In the case of German Ins. Co. v. Gibbs, 35 S. W. 679, cited by appellant, the assignment involved passed all rights and title, both legal and equitable, out of the assured and into the assignee. It plainly appears that no interest in the policy or its proceeds remained in the assured.

The case here presented is not parallel to that case. The clause in the policy sued upon created a contingent interest in the loan company, which from the face of the policy was dodbtful both as to its existence and its extent, if it in fact existed, and the burden was on the appellant to prove such an interest and the extent of same in order for it to attempt on such grounds to defeat appellee’s right of recovery, and it failed to discharge such burden. In order to show an interest in the proceeds in the loan company it was necessary to show not only a valid and subsisting indebtedness to it from appellee, but also that the loan company was entitled to the proceeds of the policy to be applied on that indebtedness. It nowhere appears in the evidence that appellee had not had the damages to the house repaired, so as to put it back in its original condition, and it cannot therefore be said that the right of the loan company to the proceeds of the policy is established by the evidence; for, if such repairs had been made, it had no interest in the insurance money. Huey & Philp v. Ewell, Adm’r, supra.

By the fifth assignment it is insisted that:

“The court erred in rendering judgment under any circumstances against the plaintiff for $335, because of the existence of the coinsurance clause in said policy, to wit, ‘It is a part of the consideration for this policy, and the basis upon which the rate of premium is fixed, that the assured shall maintain tornado insurance on each item of property insured by this policy, of not less than o0 per cent, of the actual cash value thereof, and that, failing to do so, the assured shall be an insurer to the extent of such deficit and bear such proportionate part of loss on each item,’ the undisputed evidence being that at the time said policy of insurance was taken out, and at the date of the alleged loss, the house covered by said policy was of the reasonable value of $2,500, and hence a judgment for the entire loss against the defendant and ignoring said coinsurance clause is error.”

This assignment is overruled. Appellant, having failed to plead the clause of the policy set out in the assignment as a defense, and failed to prove facts sufficient to show that it was entitled to a reduction of the amount of loss suffered by appellee because of the coinsurance clause, has not shown itself to be entitled to any such reduction.

We find no error committed by the trial court in the trial of this cause, and therefore the judgment rendered by said court is affirmed.

Affirmed.
      cg=>For otter oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: LANE, J.

license: Public Domain

text:
    McLAIN v. GALVESTON, H. & H. R. CO.
    (No. 7379.)
    (Court of Civil Appeals of Texas. Galveston.
    April 12, 1917.)
    1. Railroads &wkey;^357 — Injuries to Person on Track — Invitees.
    Where a railroad habitually placed cars upon a commercial track to be there moved by warehouse employés to warehouses for unloading, such an employé engaged in moving cars was not a trespasser or licensee upon the track, but an invitee, as to whom it owed ordinary care to keep its track in safe condition.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. § 1235.]
    2. Railroads &wkey;>282(9) — Maintenance of Track — Question for Jury.
    Where a railroad owned and maintained a commercial track on which it would set loaded cars for unloading, knowing that warehouse em-ployés would move the cars along the track for unloading, the question whether it was negligent in permitting to remain on such track a sliver from one of the rails, which was badly worn from use, was for the jury, in an action by such a warehouse employé for personal injuries from such sliver.
    [Eid. Note. — For other cases, see Railroads, Cent. Dig. § 91S.]
    3. Railroads <&wkey;282(9) — Injuries to Persons on Track — Questions for Jury.
    Where a warehouse employé was caught on a sliver on a rail while helping to move cars on a commercial track for unloading at a warehouse, the question whether the railroad’s negligence in leaving such sliver on the rail was the proximate cause of the injury was for the jury.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. § 918.]
    4. Railroads &wkey;>2&2(9) — Accident to Person on Track — Question for Jury.
    In such action contributory negligence held for the jury.
    [Ed. Note. — For other cases, see Railroads, Gent. Dig. § 918.]
    Appeal from District Court, Galveston County; Clay S. Briggs, Judge.
    Action by Calvin McLain against the Galveston, Houston & Henderson Railroad Company. Judgment for defendant, and plaintiff appeals.
    Reversed and remanded.
    F. Spencer Stubbs and James B. & Charles J. Stubbs, all of Galveston, for appellant. McMeans, Garrison & Pollard, of Houston, for appellee.
   LANE, J.

This suit was brought by Calvin McLain against the Galveston, Houston & Henderson Railroad Company to recover damages for personal injuries alleged to have been caused by the negligence of said company.

Plaintiff alleges, in substance, that said company owned and operated a railroad tract in the city of Galveston, Tex.; that it had placed cars thereon to be loaded and unloaded at the warehouse of Stolz & Peterson ; that said cars so placed upon said track were to be moved to and from the conveyor and loading doors of said warehouse by the employés of Stolz & Peterson as it became necessary to load and unload them at said doors; that the usual and customary method of moving said cars was for the employes of Stolz & Peterson to distribute themselves along the sides and rear ends of the cars to be moved and push them along the track; that it was well known to defendant that this method was resorted to by the employés of Stolz & Peterson; that while plaintiff, under the orders of Stolz & Peterson, was assisting others in pushing one of defendant’s cars along defendant’s track so as to move it from in front of the warehouse of Stolz & Peterson, a splinter or sliver from a rail of defendant’s track pierced his shoe and pants leg and threw him to the ground, and before he could extricate himself and get up another car which was moving slowly along said track behind him ran over and crushed his foot and leg, thereby permanently injuring him; that plaintiff’s injury was sustained at a point where defendant’s track was out of repair, the rails thereof being broken and splintered; that said defects in said track were known to defendant; and that said defective condition of said track was the proximate cause of plaintiff’s injury.

Defendant answered by general denial, and specially pleaded that plaintiff at the time he was injured was an employe of and performing services for Stolz & Peterson, and not for defendant; that plaintiff was injured by the negligence of his fellow servants in moving the car which crushed plaintiff’s leg and foot, and not by reason of any negligence of defendant; and that plaintiff assumed the risk incident to the work in which he was engaged.

After the evidence was closed the trial judge instructed the jury to return a verdict for the defendant, which was accordingly done.

By appellant’s first and second assignments he insists: First, that the court erred in instructing a verdict for defendant, because the evidence raised an issue as to negligence on the part of defendant for which it was liable ; and, second, that the evidence was not sufficient to authorize the trial judge to find that plaintiff was guilty of contributory negligence as a matter of law.

It is shown by the evidence that defendant owned and maintained a side track or commercial track in the city of Galveston leading from its main line track along and adjacent to the warehouses of shippers, among whom was Stolz & Peterson; that in delivering carload shipments of freight to Stolz & Peterson the defendant set the loaded cars in on the side track near the warehouse of-Stolz & Peterson for unloading; and that the employés of said firm, by means of a device adopted by Stolz & Peterson for moving and spotting said cars for loading and unloading purposes, in the way of a cable operated by steam power, would pull the cars to the place for loading or unloading. On the day and at the time of the accident which resulted in the injury of appellant an empty car which was standing in front of the warehouse door had to be moved in order1 that a loaded car could be properly placed at -said door for unloading, and this was accomplished in the manner usually pursued by said em-ployés, as follows: The loaded car was pulled by means of the cable down towards and against the empty car, striking it with such force as to start it to moving, and thereupon the appellant and other employés of Stolz & Peterson kept the empty car moving by pushing it. As soon as the impact started the empty car to moving, said employés began pushing on the same, some at its sides, and others, including appellant, at the rear end between the rails of the track, and just in front of the loaded car, which continued its movement by reason of the momentum given it. After the empty car had been moved but a short distance, a sliver from one of the rails of the track, which was badly worn from use, caught the appellant’s “pants” or shoe, or both, and he was thereby held until the loaded car ran upon him crushing his leg so as to require its amputation below the knee.

It is further shown that this method of moving empty cars by said employés had been in vogue for a long time, and that in so moving said car they were pursuing the ordinary method adopted by Stolz & Peterson and their employés, and that defendant knew that such method, or some like method, was pursued. It is further shown that the sliver which held appellant had been there for some time, and appellant knew it was there, and had so known for some time before the accident.

From these facts above stated we conclude that, when appellee placed cars loaded with freight for Stolz & Peterson on its said side track, it knew that said cars were to be moved over its side track by the employés of Stolz & Peterson for the purpose of unloading same, and that it was. contemplated that they would be so moved, by appellee for such purpose, practically as the car which injured appellant was moved, that appellant when injured was not a trespasser or licensee upon appellee’s track, but that he was an invitee, and was at said time engaged in performing such services upon said track as was contemplated by appellee (Cowans v. Railway Co., 40 Tex. Civ. App. 539, 89 S. W. 1116; Railway Co. v. Pennell, 2 Tex. Civ. App. 127, 21 S. W. 275), and that under such circumstances it was the duty pi appellee to use ordinary care to keep its track in such condition as not to cause injury to those who •were invited by it to enter upon its premises for the purpose of unloading freight which it had placed thereon to be unloaded for Stolz & Peterson. We think the questions as to .whether appellee was negligent in permitting the sliver which caught and held appellant to remain on its track where appellant was invited to perform his labors, and whether or not such negligence, if any, was the proximate cause of appellant’s injury, were questions which should have been submitted to the jury, and that the court erred in not so submitting them.

We also think the court erred in not submitting to the jury the question as to whether appellant was guilty of contributory negligence. We do not think that the evidence was such as would warrant the court to instruct the jury that appellant was guilty of contributory negligence as a matter of law.

For the reasons pointed out, we think the first and second assignments should be sustained, and that the judgment of the trial court should be reversed, and tile cause remanded for another trial; and it has been so ordered.

Reversed and remanded.
      (g^pFor other cases see same topic and KEY-NUMBER, in all Key-Numbered Digests and Indexes


author: GRAVES, J.

text:
    FUERSTENECK v. CLARK et al.
    (No. 7390.)
    (Court of Civil Appeals of Texas. Galveston.
    April 19, 1917.
    Rehearing Denied May 17, 1917.)
    1. Vendor and Purchaser <&wkey;17 — Contract to Purchase — Acceptance.
    Where an offer to purchase land embodied in an earnest receipt was unqualified, except that it was subject to approval of the owner, the tender of performance by the owner was an acceptance and completion of the contract.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. § 21.]
    2. Vendor and Purchaser <&wkey;143 — Furnishing Abstract — Waiver.
    A written request by purchaser, under an earnest money contract, that the “deal be delayed for our convenience for 30 days,” amounted to a waiver of an alleged failure to furnish an abstract and the admission of readiness of the vendor to then perform the contract.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 267-270, 311.]
    3. Vendor and Purchaser <&wkey;140 — Perfecting Title.
    An earnest receipt requirement as to title was met and substantially conformed to by examination of a title by a title guaranty company upon which it found the title good and agreed to issue a guaranty certificate on the title.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 262-264.]
    4. Specific Performance <&wkey;32(3) — Contracts — Mutuality.
    Although in an earnest money contract to purchase land there are no specific terms binding the purchaser to take the land, that will be implied.
    [Ed. Note. — For other cases, see Specific Performance, Cent. Dig. §§ 9N98.]
    5. Specific Performance &wkey;>ik-CoNTRACTS— Mutuality.
    In an earnest money contract to purchase land, a provision for the forfeiture of the earnest money in case the purchaser fails to comply does not furnish the full measure of the vendor’s damages in that contingency, but the vendor may still enforce specific performance.
    [Ed. Note. — For other cases, see Specific Performance, Cent. Dig. § 4.]
    6. Frauds, Statute of <&wkey;139(5) — Acceptance of Contract.
    Since one may accept the obligations of an otherwise binding contract by acts as well as deed, the statute of frauds did not stand in the way of the enforcement by specific performance of an earnest money contract for the purchase of land dependent on the owner’s acceptance, where the owner executed and tendered a deed, since this was both an act and such a writing as proved the contract, imposed a real obligation upon the owner, and constituted a complete acceptance by the owner of the agreement of the purchasers to buy.
    [Ed. Note. — For other eases, see Frauds, Statute of, Cent. Dig. § 340.]
    Appeal from District Court, Galveston County; Clay S. Briggs, Judge.
    Suit by Matilda Von Entress Fuersteneck against I. N. Clark and another. From judgment for -defendants, plaintiff appeals.
    Reversed and remanded, with instructions.
    Stewarts, of Galveston, for appellant. W. E. Price, of Galveston, for appellees.
   GRAVES, J.

Appellant brought this suit, alleging that she was the owner and seller therein meant, to compel appellee, the alleged purchaser, to specifically perform the following contract:

“Earnest Receipt.
“$500.00. Galveston, Tex., June 18, 1915.
“There has this day been deposited with V. E. Austin by the purchaser hereunder the sum of five hundred ($500.00) dollars as earnest money to bind sale to such purchasers of lot No. nine (9) in block No. six hundred and eighty-one (681) and all the improvements thereon situate, * * * in the city and county of Galveston, state of Texas, at a total price of nine (9) thousand and no/100 dollars of which amount, upon, delivery of deed, three (3) thousand, no/100 dollars is to be paid in cash, less the sum above recited earnest money, which is to be allowed and credited as part of said cash consideration; balance payable on or before one (1), two (2) and three (3) years after day of deed, bearing interest at the rate of seven (7) per cent, per annum.
“This earnest contract is subject to approval of owner.
“Abstract of title to said property to be furnished by seller up to and including this day.
“General warranty deed and other documents necessary to make title good at expense of seller. All taxes due up to and' including this day to be paid by seller. All taxes after this day to be paid by purchaser. Notes, deed of trust and title guaranty to be paid by buyer. Said title being good and marketable, the purchaser within - days from date of delivery of abstract showing good title shall comply with the here-inbefore mentioned terms of sale. If buyer fails to comply with the terms herein, this earnest money to be forfeited, one-half.to seller and one-half to agent. It is understood and agreed in case of defect of title which cannot be cured within a reasonable time this earnest money to be refunded to purchasers.
“This earnest money is evidenced by a check payable to V. E. Austin who will hold and dispose of same according to the terms of this contract of sale.
“V. Peterson,
“Agent for Seller.
“V. E. Austin,
“Agent for Seller.
“Clark & Hennessy Prod. Co.,
“By I. N. Clark, Purchaser.
“W. A. Hennessy.”

Appellant alleged, that V. Peterson and Y. E. Austin were her agents in making the contract, her readiness and ability to perform it tendered full performance upon her part, and charged the failure and refusal of appellees to perform • the same.

After plea in abatement and special exceptions setting up the alleged incapacity of appellant to contract, 'because of being an alien, etc., all of which the court overruled, appellees answered by general denial, charged that the contract did not comply with the statute of frauds (Revised Statutes, art. 3965), in that appellant’s name did- not appear therein, nor had she accepted same in writing, and further that she failed to furnish them an abstract of title within a reasonable time, showing good and marketable title, and that she had n'ot tendered the rents accruing from the time the sale was to be effective till the trial into court in abatement of the purchase price.

On trial before a jury, at the conclusion of appellant’s evidence, the court, over her objection, upon appellee’s motion peremptorily instructed a verdict for appellees, which was accordingly rendered, and judgment thereon entered in their favor and against appellant denying her the enforcement of said contract. From that judgment her appeal is now properly before this court.

Upon the execution of this earnest receipt a deed was prepared in strict conformity with the terms thereof and forwarded to Mrs. Fuersteneck, owner of the property in controversy. On August 25, 1915, the following letter was written to Mr. Austin, agent for Mrs. Fuersteneck:

“Galveston, Tex., Aug. 25, 1915.
“Mr. V. E. Austin, City — Dear Sir: Reference to the earnest money paid on Strand property, will state that if deeds not returned within next 15 days properly signed we will have to ask that you kindly refund us our earnest money of $500.00, as we think ample time has been had for closing this deal.
“Thanking you, we are,
“Yours truly, Clark & Hennessy,
“By I. N. Clark.”
“8-30-15
“This notice is waived, and we ask that this deal be delayed for our convenience for 30 days.
“Clark & Hennessy P. Co.,
“By I. N. Clark.”

After the receipt of the foregoing letter, dated August 25, 1915, Mr. Austin received back, properly executed, the deed sent to Mrs. Fuersteneck, and tendered it, together with tax receipts, deed of trust, notes, and offer of title guaranty to Clark & Hennessy, and it was at the time of this tender that the indorsement dated August 30, 1915, was' made upon the foregoing letter.

We think the contract was completed by the tender of performance by Mrs. Fuersteneck. The offer to purchase was unqualified, except that it was subject to approval of the owner. The acceptance by the owner, Mrs. Fuersteneck, removed the only contingency provided for in the contract which would excuse Clark & Hennessy from compliance therewith; provided she further met its requirements as to an abstract and as to title, and we conclude that she did.

The evidence is undisputed that there was never any objection made, either because of any failure to furnish an abstract or on account of any alleged defects in the title tendered. Indeed, the only objection made at any time to closing the deal being that of appellee Clark, in reply to appellant’s agent’s statement that the deed had come and she was ready to close, when he said: “Well, we are not; you have had so much time we have changed our minds.” No time within which abstract of title was to be furnished was fixed by the contract, and the undisputed evidence further shows that no abstract was ever requested for delivery to the purchasers, but that the Stewart Title Guaranty Company, who were to guarantee the title, were requested to examine the title; that they did so, using an abstract prepared and turned over to them for that purpose, found the title good under a written opinion thereon by its attorney, made a written report thereon, which was delivered to the agent making the sale; that this report was exhibited to appellee Clark, together with the company’s agreement to issue a guaranty certificate on the title; and that he made no objection thereto. This abstract and agreement to guarantee the title to the purchaser was also tendered with the deed and other necessary incidents to performance upon the seller’s part upon the trial.

Even if their indorsement by Clark & Hennessy on August 30, 1915, upon their prior letter of August 25, 1915, made, as it was, after appellant through her agent had tendered them her deed and all other necessary acts upon her part looking toward full performance of the contract of sale, including an offer of guaranty of the title, did not amount to a waiver of any alleged failure to furnish an abstract, and an admission of readiness to then perform the contract upon her part, which we are inclined to think it did, then the request of the Title Guaranty Company for examination of the title, and the above-stated consequent procedure taken thereon, met and substantially conformed to the agreement in the earnest receipt as to title.

We, accordingly, conclude that appellant was entitled to specific performance, and that the trial court erred in peremptorily instructing a verdict for appellees.

Although the contract here fails in specific terms to bind appellees to take the land, that will be implied. Griffin v. Bradford, 138 S. W. 1072. Nor did the provision - for the forfeiture and division of the $500 earnest money, in case the buyer failed to comply with its terms, furnish the full measure of appellant’s damage in that contingency, but she was still entitled to enforce specific performance. Heath v. Huffhines, 152 S. W. 176; Hemming v. Zimmerschitte, 4 Tex. 159; Williams v. Talbot, 16 Tex. 1; Vardeman v. Lawson, 17 Tex. 11; Bullion v. Campbell, 27 Tex. 653.

We do not think the statute of frauds stood in the way of the enforcement of this contract; one may accept the obligations of an otherwise binding contract by acts as well as deed, and the execution and tender of the deed in the case at bar was both such an act and such a writing as approved the contract, imposed a real obligation upon appellant, and constituted a complete acceptance by her of the agreement of appellees to buy her property. Lester v. Hutson, 167 S. W. 327; Daugherty v. Leewright, 174 S. W. 844; Black v. Hanz, 146 S. W. 309, 311; Tynan v. Dullnig, 25 S. W. 465; Johnston v. Trippe (C. C.) 33 Fed. 530; Bayne v. Wiggins, 139 U. S. 210, 11 Sup. Ct. 521, 35 L. Ed. 144.

The judgment will therefore be reversed, with instructions to the trial court to hear evidence and determine the rental value of the property and the amount of rents received by plaintiff since September 30, 1915, and to render judgment in favor of plaintiff in accordance with the prayer of her petition, and the terms of the contract of sale, giving the defendants credit for the rents that may have been received by plaintiff since said date, or should have been received by proper diligence, and if the property has not been rented but has been used by plaintiff since said date, or could have been rented by plaintiff by the exercise of ordinary diligence, to credit defendants with the reasonable value of such rents.

Reversed and remanded, with instructions.
      (S=»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: PLEASANTS, C. J.

text:
    RIMMER et al. v. BAY LUMBER CO.
    (No. 7289.)
    (Court of Civil Appeals of Texas. Galveston.
    April 20, 1917.
    Rehearing Denied May 10, 1917.)
    Estoppel <&wkey;118 — Estoppel by Conduct-Release oe Liability.
    In an action by a lumber company against an insolvent building contractor and the trustees of a school district for a balance due for materials for which the building was being erected, evidence held to show that plaintiff, by his action in refusing to present its account against the contractor when notified to do so by the trustees, stating that it looked to the contractor alone for payment, was estopped from claiming that the trustees were liable for the balance due.
    [Ed. Note. — For other cases, see Estoppel, Cent. Dig. §§ 306, 308.]
    Appeal from Brazoria County Court; A. R. Rucks, Judge.
    Action by the Bay Lumber Company against Emmet Rimmer and others. Judgment for plaintiff, and defendants appeal.
    Reversed and rendered.
    Wilson & Follett, of Angleton, for appellants. A. E. Masterson and C. D. Jessup, both of Angleton, for appellee.
   PLEASANTS, C. J.

This suit was brought by the appellee, Bay Lumber Company, against R. D. Sterling, building contractor, and the school trustees of Sweeny independent school district (including the legal representatives of one of said trustees) for a balance of $738.45 due by said Sterling in ap-pellee, Bay Lumber Company, for material going into the construction of a school building for said district. The Bay Lumber Company seeks to hold the said school trustees liable for said debt upon the ground that in entering into contract with Sterling they neglected to take or require of said contractor a bond conditioned so as to protect a mate-rialman who furnished material for same. It also pleaded insolvency of the contractor, R. D. Sterling.- The trustees pleaded and urged general demurrer, and special exceptions because the suit was not brought to the first term of court after the indebtedness became due, nor to the second term showing cause why it was not brought to the first term; also special exception pleading misjoinder of parties defendant, and also misjoinder .of causes of action, as a suit for debt against R. D. Sterling, and a suit in tort against the other defendants, said trustees. They also pleaded in defense general denial, and specially that the Bay Lumber Company had waived all claim, if any .it had, against said trustees, both by word and action, and that they relied and acted upon said waiver and depended thereon in making settlement with said contractor. They specially set up that they gave notice to the Bay Lumber Company by notifying its manager, O. N. Joyner, at Sweeny, through their architect, John Mc-Lelland, and again through one of their number, E. R. Clark, that if the Bay Lumber Company had any unpaid bills for material going into the construction of said school building, it should present the same to the school trustees, and that in both instances said manager, Joyner, expressly stated in substance that he was relying'on Mr. Sterling exclusively for the payment of his bills. They pleaded further, that they notified said manager, Joyner, of the time and place they contemplated meeting to receive said building and make final payment tberefor, and invited any unpaid bills tbe Bay Lumber Company might have, to tbe end that they might protect the same, which said Bay Lumber Company, through its manager Joyner, expressly declined by both word and action. Said trustees specially pleaded these matters as estoppel, and also as contributory negligence. Said trustees also pleaded and urged as a defense that the contractor, R. D. Sterling, received and deposited the money, in payment for work and material in the construction of said building, in the First National Bank of Bay City, Tex., and that he had a bank account with said bank, all of which was known to the Bay Lumber Company, through its manager, Joyner, and that it remained on deposit in said bank in sufficient amount to have paid the indebtedness involved herein for sufficient time to have been reached by proper legal proceedings, and that no effort was made by said Bay Lumber Company to reach the same by appropriate legal proceedings, and that thereafter said money was withdrawn and said Sterling became wholly insolvent. The case was tried before the court without a jury, and judgment was rendered in favor of Bay Lumber Company against said R. D. Sterling for $S17.73 and against the school trustees, these appellants, for $285.05 thereof. All the parties to the judgment (except one Riley, against whom no judgment was rendered), excepted to the judgment, and in open court gave notice of appeal.

The evidence upon the issue of waiver and estoppel raised by defendants’ answer is as follows, and is uncontradicted: It is agreed that John MeLelland was supervising architect in the construction of the building in question. Said witness John MeLelland testified by deposition that he was supervising architect, under Latón & Smith, in the erection of said building, and—

“that in way of protecting the Bay Lumber Company in any unpaid bill or bills it might have against said Sterling' for material going into the construction of said building, at one time, in the 'latter part of November, or the beginning of December, 1913, he intimated to Joyner that if he had any doubts about Mr. Sterling’s ability to pay his bills, he should send the same to the trustees before he issued the certificate to pay the $700 hereinabove mentioned; that he gave notice to Joyner, plaintiff’s manager, pertaining to any unpaid bills or accounts it might have against said Sterling for material going into the construction of said building, as just stated; that he told Joyner that if he had any doubts at all about Mr. Sterling, he should send in his bill to the-school trustees; that he did nothing more with reference to the account of the Bay Lumber Company than speak to Joyner about it, as above stated ; when he so spoke to Joyner, Joyner replied, in substance, that he had the utmost confidence in Mr. Sterling, and was not worrying about his bill.”

E. R. Clark, one of the defendant trustees, testified that on January 20, 1914, before the board of trustees made final settlement with the contractor, Sterling, he called upon Joyner, the general manager of appellee company, and told him that the trustees contemplated receiving the school building from the contractor one week from said date, and that if the Bay Lumber Company had any unpaid bills for material going into the construction of said building he (Joyner) should present the same to the school trustees before sai’d meeting, or bring them to said meeting and present them to said trustees, in order that plaintiff might be protected in the payment thereof, and that in response thereto said Joyner told him (Clark) that Mr. Sterling owed a balance, but that was a personal matter between him and Mr. Sterling, and that he (Sterling) had been paying his bills promptly, and that he (Joyner) would hate like the devil to butt into that school trustees’ meeting and offend Mr. Sterling.

The trial court held that plaintiff was guilty of “contributory negligence” in failing to present its bill to the defendant trustees at the meeting when the final settlement was made with the contractor after being notified by defendant Clark of the date of the meeting and requested to then present any account he might have against the contractor, and that by reason of such contributory negligence plaintiff was entitled to recover from defendant only that portion of its account in excess of the amount paid the contractor in said final settlement.

We think appellee by its refusal to present its account against the contractor when notified so to do by defendants’ architect an’d the defendant Clark, and by its statements to each of said parties above set out, which was, in substance, that it did not look to defendants to protect it in the payment of its account, but relied solely upon its confidence in Sterling, should be held estopped from now claiming that defendants are liable to it for any portion of said account. If defendant had presented its account when notified by MeLelland in Novembei-, 1913, the $700 then due the contractor would have been paid thereon, and if it had been present when the final settlement was made with the contractor and presented its claim for the balance due it, all of its account would have been paid out of the funds in the hands of the trustees due the contractor.

We do not find it necessary to decide whether in any event the trustees of the school district should be held personally liable to appellee because of their failure to require the contractor to execute a bond for the protection of those who might furnish material or labor in the construction of said building. There is high authority in support of appellee’s contention that in such case the trustees should be held liable to the ma-terialman. Michaels v. McRoy, 148 Mich. 577, 112 N. W. 129; Michaels v. McRoy, 158 Mich. 605, 123 N. W. 37.

Conceding such liability to exist, it would, we think, be inequitable and unfair upon the facts of this case to hold appellants liable to appellee. In ignorance of any legal liability to appellee they made every reasonable effort to protect it by requesting it to present its account, if any it hhd, against the contractor in order that they might pay same out of money they had which was due the contractor. When appellee declined to present its account, and informed the trustees that it would rely upon the contractor to pay the account, the trustees had every reason to believe that they were relieved from all obligations of any kind to appellee; and, having thus been induced by appellee’s words and acts to place themselves in a position in which, if appellee now asserts its claim, the loss will fall upon them, appellee should be held estopped from asserting such claim. This conclusion requires that the judgment of the court below be reversed and judgment here rendered in favor of appellants that plaintiff take nothing against them; and it has been so ordered.

Reversed and rendered.
      <£z^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    TEXAS FIDELITY & BONDING CO. v. ROSENBERG INDEPENDENT SCHOOL DIST. et al.
    (No. 7378.)
    (Court of Civil Appeals of Texas. Galveston.
    April 25, 1917.
    Rehearing Denied May 17, 1917.)
    1. Schools and School Disteicts &wkey;>81(2) —Building s — Contractor’s Surety — Liability.
    In action on the bond of a contractor for a school building, payments made in good faith by the school district on the architect’s certificates, as required by the contract, are conclusive. '
    LEd. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196.]
    2. Schools and School 'Disteicts <&wkey;81(2) —.Buildings — Contracts — Surety’s Liability-Construction of Contract.
    The rule that the parties’ intent is the dominant test in construing a contract applies to the surety’s bond of a contractor for school buildings.
    [Ed. Note.' — For other cases, see Schools and School Districts, Cent. Dig'. §§ 195, 196.]
    3. Schools and School Districts <&wkey;81(2) —Buildings — Contracts — Surety’s Liability — Construction of Contract.
    A school building contractor’s bond broadly binding the surety to carry out the contract’s design, true spirit, etc., within the time mentioned, will not be strictly construed in the surety’s favor.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196.]
    4. Schools and School Districts <&wkey;81(2) — Buildings — Contracts — Discharge of Surety.
    A school building contractor’s default made inoperative the contract provisions providing for payment upon the architect’s certificates, the retention of certain amounts for paying mate-rialmen’s claims, and requiring the contractor be given written notice of default before the owner supplied materials, etc., so far as the liability of the contractor’s surety is concerned, especially where the surety’s bond was for the express benefit of materialmen.
    [Ed. Note. — For other cases, see Schools and School Districts, Gent. Dig. §§ 195, 196.]
    5. Schools and School Districts &wkey;>81(2) — Building Contracts — Liability of Surety.
    Under a building contract providing that the contractor should forfeit a certain amount daily for delay in completing the work, the surety is liable for such sum, especially where the entire delay resulted from the contractor’s fault before he abandoned the work.
    [Ed. Note. — For other cases, see Schools and School Districts, Cent. Dig. §§ 195, 196.]
    Appeal from District Court, Fort Bend County; Sam’l J. Styles, Judge.
    Action, by the Rosenberg Independent School District against the Texas Fidelity & Bonding Company and others, in which H. W. Greenway intervened. From adverse judgments, the namied defendant appeals.
    Affirmed.
    Cooper & Merrill, of Houston, for appellant. F. X. Joerger, of Rosenberg, and Huggins & Kayser and Bryan & Bryan, all of Houston, for appellees.
   GRAVES, J.

Appellees, as trustees of Rosenberg independent school district, sued appellant bonding company, making the contractors, Shapley & Son, and their trustee in bankruptcy, parties, seeking to recover from the bonding company, as surety on the contract bond of the contractors, certain damages alleged to have accrued to the school district by reason of their failure to perform the conditions of a contract, by which they undertook to construct for the school district a certain school building at the town of Rosenberg. The contract alleged was in writing, and stipulated for the completion of the school building by October 1, 1913, and provided for a penalty of $10 per day for each and every day thereafter required to complete the same. The school district alleged that the contractors continued the work on the building until January 6, 1914, at which time, being unable to continue for lack of means, and having become insolvent, they abandoned the work, without any fault on the part of the school district, and delivered possession of the incompleted building to it; that the district took charge of the building on. that date, for the purpose of completing the same according to the contract, but that it was not in fact completed until June 1, 1914, 240 days after the date fixed by the contract, and sought to recover from the bonding company, as such surety, the sum of $10 per day on account of the delay. The school district also sought to recover reasonable attorney’s fee, alleged to be the sum of $240, and the further sum of $416.40 on account of insurance premiums claimed to have been paid for the contractors; also, other items of expense charged to have been incurred by the district in making certain repairs and alterations to the building as constructed. H. W. Greenway intervened, and likewise sought to recover from the bonding company a balance of $978, alleged to be due him from Shapley & Son on subcontract for certain plumbing work done by the inter-vener for the contractors on the building. The liability of the bonding company as to this intervention is based upon several clauses of the bond, which provide that the same is intended for the benefit' of persons who may furnish labor and material on the contract, and may be sued upon by them, as is hereinafter referred to. A trial of the cause without a jury resulted in a judgment in favor of the school district against the bonding company for the sum of $2,594.36, and in favor of the intervener against the bonding company, for $978, both with interest, and'in favor of Shapley & Son on their plea of discharge in bankruptcy. Such further statement of the case as is deemed necessary will be made in what follows. The bonding company’s appeal from this judgment was duly perfected and is now properly before this court for review.

A brief summary of the main provisions of both the contract and bond is the following:

(1) The bond was expressly made payable to, and for the use and, benefit of, both the school district and all persons who might furnish labor and material under the terms of the contract, and of the assigns of such payees, and might be sued upon by any one of these beneficiaries as if executed to them in proper person.

(2) It further provided that:

If the contractors “shall in all things stand to and abide by and well and truly keep and perform the covenants, conditions and agreements in the contract entered into by and between the said J. M. Shapley & Son and the said Rosenberg independent school district, being date May 1, 1913, for the construction of the school building, and the performance of the work on lots in Rosenberg, Tex., as mentioned in the foregoing contract, and shall duly and promptly pay and discharge all indebtedness or liability that may be incurred by the said J. M. Shapley & Son and in carrying out said contract, and completing the same free from any mechanic’s lien, and shall truly keep and perform the covenants, conditions and agreements as stipulated and mentioned and provided in the within and foregoing contract, and which are to be kept and performed at the time and in the manner and form therein specified, as well as all costs including attorney’s fees, in enforcing the payment and collection of any and all indebtedness incurred by the said J. M. Shapley & Son and in carrying out the terms of said contract, and when so carried out then the above obligation to become null and void, otherwise to remain in full force and effect.”

The contract recited that the bond was attached to and made a part of if, and further pirovided:

“ * * * In consideration of the first party’s completely and faithfully executing the aforesaid work, and furnishing all the materials therefor, so as fully to carry out this contract, and the design, according to its true spirit, meaning and intent by and at the time mentioned, and to- the full and complete satisfaction of the said M. L. Waller, architect, and his superintendent, does hereby agree to pay, * * * on certificates of the superintendent from time to time as the work progresses, to wit: Eighty per cent. (80%) of the estimated value of the same, subject to conditions and reductions as hereinafter provided, estimates to be made by the architect or the superintendent. * * * Twenty per cent, of the contract price shall be held by the second party as security for the faithful completion of the work and building, and may be applied under the direction of the architect in the liquidation of any damages under this contract. * * * Ten per cent, of this contract price shall be retained by the second party for thirty days, as required by law for the protection of labor. * * *
“If the contractors shall at any time refuse or neglect to furnish the proper material or workmen, or otherwise fail and refuse to comply with the plans and specifications, such failure being certified to by the architect, then second party shall be at liberty (after three days’ written notice to the contractors) to provide the proper material and workmen, and deduct the cost from the money then due, or to become due, the contractors, or for sufficient reasons to terminate the employment of the contractors and take charge of the premises and all material thereon, and complete the building according to plans and specifications, charging the expense to the contractors.”

The following may be culled as the most directly material facts established by the evidence: That the contractors did abandon the work on January 6, 1914. That on that date the' school district, having then on hand an unexpended balance of the contract price of $5,245, took possession of the building and completed it on April 1st thereafter, instead of June 1st, making 180 days’ delay, not 240, as was alleged. That the district had previously paid for the contractors on insurance only $102.40, instead of the amount alleged, And that, after the abandonment by the contractors, it then paid without architect’s certificates direct to the holders of the indebtedness out of this $5,245 balance the following items: $530.79 for labor, and separate amounts of $1,764.51 and $1,200 for materials —all of .which either had been previously furnished to the contractors for the building, or had been contracted for by them, and were finally used in its construction. In paying them the school district took an assignment from the holders of these $530.79 and $1,764.-51 accounts, and paid a draft with bill of lading attached for the $1,200 item; also, the aggregate sum of $2,057.75 for repairs and necessary expenses in completing the building. The total contract price was $22,-645, and the total amount paid the contractors before they abandoned the work, all of which was paid under architect’s certificates, was $17,400, leaving above-stated balance of $5,245. That no money was paid out before the school district took possession without architect’s certificates, and none after that time with them.

While there was and is some dispute as to whether or not the $17,400 paid out by the school district prior to taking charge of the work exceeded the 80 per cent, of the labor and material, as called for in the contract, depending to some extent upon Row the contract should be construed in tRose respects, we do not regard that question as important, because the proof was undisputed that the district did not know it, if there was any excessive estimate by the architect, and acted honestly, fairly, and in good faith in making the payments: such payments, made under these circumstances, were conclusive, since there were neither allegations nor proof of fraud. Kilgore v. Baptist Society, 89 Tex. 465-469, 35 S. W. 145; McKenzie v. Barrett, 43 Tex. Civ. App. 451, 98 S. W. 229.

Through several assignments, appellant attacks the judgment claiming that the agreements to retain 20 per cent, and 10 per cent., respectively, of the contract price, to make payments only upon architect’s certificates, to give three days’ written notice to the contractors, were each and all breached by the school district in making the payments above detailed, and in taking possession of and completing the building, under the circumstances shown, and that such breach of the several different conditions of the contract operated to release it from all liability on the bond. It insists that each of these acts was a material alteration or 'deviation from the contract to secure the performance of the exact and precise terms of which alone it was liable as surety, that each was done without its consent, and that it was thereby absolved from any and all responsibility.

In urging this contention and applying it progressively to ‘ every act of the district subsequent to the abandonment of the work by the contractors, the bonding company argues that, in determining its rights and liability and in construing the contract, as between it and the school district, the doctrine of strietissimi juris should be applied in its favor. In support of these several positions and of their application to the case at bar, the following authorities are cite’d: Bullard v. Norton, 182 S. W. 668; Ryan v. Morton, 65 Tex. 258; McKnight v. Lang Mfg. Co., 155 S. W. 977; Bank v. Fidelity & Deposit Co., 145 Ala. 335, 40 South. 415, 5 L. R. A. (N. S.) 418, 117 Am. St. Rep. 45, 8 Ann. Cas. 241; Gen. Bonding & Casualty Ins. Co. v. Lumber Co., 176 S. W. 651; Morgan v. Salmon, 18 N. M. 72, 135 Pac. 553, 54 L. R. A. (N. S.) 407; Lonergan v. San Antonio Trust Co., 101 Tex. 63, 104 S. W. 1061, 106 S. W. 876, 22 L. R. A. (N. S.) 364, 129 Am. St. Rep. 803; Ry. Co. v. Henry & Dilley, 65 Tex. 685; Williams v. Ry. Co., 57 Or. 251, 110 Pac. 490, 111 Pac. 17, Ann. Cas. 1913A, 177; Drhew v. Altoona, 121 Pa. 401, 15 Atl. 636; Blackburn v. Morel, 13 Ga. App. 516, 79 S. E. 492; Reissaus v. Whites, 128 Mo. App. 135, 106 S. W. 603; Lumber Co. v. Parker, 159 Ind. 571, 65 N. E. 747; Dunlap v. Eden, 15 Ind. App. 575, 44 N. E. 560; Young v. Young, 21 Ind. App. 509, 52 N. E. 776; Brennan v. Clark, 29 Neb. 385, 45 N. W. 472; McClellan v. McLemore, 70 S. W. 224; Valente v. Weinberg, 80 Conn. 134, 67 Atl. 369, 13 L. R. A. (N. S.) 448; Wilson v. Borden, 68 N. J. Law, 627, 54 Atl. 815; Sullivan v. Moffatt, 70 N. J. Law, 4, 56 Atl. 304; Elliott, Contracts, §§ 3681, 3682; 6 Cyc. 28, 74; Texas Fidelity & Bonding Co. v. Brown, 179 S. W. 1125; Fidelity & Deposit Co. of Md. v. Agnew, 152 Fed. 955, 82 C. C. A. 103; O’Neill v. Title Guaranty Co., 191 Fed. 570, 113 C. C. A. 211; Lucas Co. v. Roberts, 49 Iowa, 159; Gen. Bonding & Casualty Co. v. McCurdy, 183 S. W. 796; Murrell v. Scott, 51 Tex. 520; Durrell v. Farwell, 88 Tex. 98, 31 S. W. 185; Erath v. Allen & Son, 55 Mo. App. 107; Townsend v. Cleveland Fireproofing Co., 18 Ind. App. 568, 47 N. E. 707; McClellan v. McLemore, 70 S. W. 224.

But we are unable to agree with appellant that the principles applied in those eases rule the facts here developed.

In the first place, those cases cited on that particular phase of the case presuppose the termination of the contract by the owner, which similar result is assumed by appellant to have existed here, whereas we have found that the contractors themselves abandoned this work, thereby leaving the school district no alternative than to take charge of, complete it, and charge the expense to the contractors ; that is, the termination of the contract in this manner gave rise to a new status in the relations between the parties.

In the next place, we think that the intention of the parties themselves in making it is still the dominating consideration in the construction of a particular contract, and that this rule applies with equal force to a surety bond, such as is here involved, as to other forms of contract. This rule of construction, when applied to bonds, is succinctly stated in Ruling Case Law, vol. 4, “Bonds,” c. 4, par. 17, p. 56:

“In construing an instrument under seal, although the courts generally adhere closely to the letter, yet the rule which prevails over all others is that a court may put itself in the place of the contracting parties; may consider, in view of all the facts and circumstances surrounding them at the time of the execution of the instrument, what they intended by the terms of their contract; and when their intention is manifest it must control in the interpretation of the instrument, regardless of inapt expressions, or mere technical rules of construction. Westervelt v. Mohrenstecher, 76 Fed. 118, 40 U. S. App. 221, 22 C. C. A. 93, 34 L. R. A. 477; Planters’ & Merchants’ Bank of Huntsville v. Hill, 1 Stew. (Ala.) 201, 18 Am. Dec. 39; First Nat. Bank of Baltimore v. Gerke, 68 Md. 449, 13 Atl. 358, 6 Am. St. Rep. 453, and note; 60 Am. St. Rep. 419, note.”

Testing the bond here by this rule, we find it unnecessary to determine the question raised as to whether or not the bonding company is liable as an insurer, because its very liberal terms, as we think, forbid the application to it of the rule of construction embodied in the maxim strietissimi juris. From the broadly binding character of the terms of this contract and bond, it seems manifest that the parties themselves in making them did not intend to narrow and restrict the obligation the surety was taking. On the contrary, they went só far as to bind the bonding company to see to it that the contractors should “faithfully and fully carry out the design, true spirit, meaning and intent” of the contract “by and at the time mentioned.” How could the design and true spirit of such a contract be faithfully and fully carried out without payment of the Just debts for labor and material in good faith actually expended upon and used in the construction of the school building that furnished its subject-matter?

Moreover, as is indicated above, we think the bonding company became, by the precise terms of its obligation, responsible to the school district for the consequences of the abandonment of the incompleted building; and that such termination of the connection of the contractors with the work made impracticable and inoperative the clauses requiring architect’s certificates, three days’ notice, and retention of 20 per cent, and 10 per cent., respectively, and left the school district in the position of a trustee toward all those who had furnished labor and material for use in the building, and as such, not only with the right, but also under the duty to pay them out of the funds thus unwillingly . upon its part left in its hands. And this view io fortified by the further consideration that all those who had thus furnished labor and material, among whom was the intervener, were expressly made beneficiaries in and privies to the contract and bond, and hence were the legal recipients, in accordance with (the terms <of those instruments, of the amounts so paid them by the school district. Spann v. Cochran, 63 Tex. 240; Hill v. Hoeldtke, 104 Tex. 594, 142 S. W. 871, 40 L. R. A. (N. S.) 672; Bank v. Ry. Co., 95 Tex. 176-184, 66 S. W. 203; Nelson Co. v. Stephenson, 168 S. W. 61; U. S. F. & G. Co. v. Thomas, 156 S. W. 573; Insurance Co. v. Waples Lumber Co., 176 S. W. 651; U. S. F. & G. Co. v. United States, 191 U. S. 416-423, 24 Sup. Ct. 142, 48 L. Ed. 242; Equitable Ins. Co. v. U. S., to use of McMillan, 234 U. S. 448, 34 Sup. Ct. 803, 58 L. Ed. 1394; U. S., to use of Foundry Co. v. National Surety Co., 92 Fed. 549, 34 C. C. A. 526; St. Louis v. Von Phul, 133 Mo. 561, 34 S. W. 843, 54 Am. St Rep. 695; School District v. Livers, 147 Mo. 580, 49 S. W. 507; Lumber Co. v. De Longe, 157 Wis. 390, 147 N. W. 334, and citing other Wisconsin cases; Getchell Co. v. Peterson, 124 Iowa, 599, 100 N. W. 550-552; Baker v. Bryan, 64 Iowa, 561, 21 N. W. 83-85; Doll v. Crume, 41 Neb. 655, 59 N. W. 806; Kaufman v. Cooper, 46 Neb. 644, 65 N. W. 796; Graves v. Merrill, 67 Minn. 463, 70 N. W. 562; Johnston v. Charles, etc., Co., 123 Wis. 130, 101 N. W. 395, 68 L. R. A. 934, 107 Am. St. Rep. 995; Tweedale v. Tweedale, 116 Wis. 517, 93 N. W. 440, 61 L. R. A. 509, 96 Am. St. Rep. 1003; Fanning v. Murphy, 126 Wis. 538, 105 N. W. 1056, 4 L. R. A. (N. S) 666 ; Bell v. Kirkland, 102 Minn. 213, 113 N. W. 271, 13 L. R. A. (N. S.) 793, and note; Knight v. Jillson Co., 172 Ind. 97, 87 N. E. 976, 27 L. R. A. (N. S.) 573, and note.

These cases seem to firmly establish the principle that a contract between two persons will inure to the benefit of a third in privity with it, and that he is fully protected thereby. It follows from these views that the various acts done and payments made by the school district subsequent to its enforced taking over of the abandoned and incompleted work did not, in our opinion, constitute material alterations an'd deviations from the precise terms of the contract and thereby release the bonding company, but were the legitimate consequences reasonably in contemplation of all parties in making it, and were not out of harmony with its properly construed terms.

Nor do we think there was error in allowing the school district to recover the agreed upon damages for the proven time of the delay in completing the work. Here, again, the terms of the contract constitute the best criterion of what was meant in that respect. Its provision was:

“Should the contractors fail to finish the work within the agreed time, they are to allow or pay the school district, by way of liquidated damages, $10.00 per day for every day thereafter the building should remain incomplete, and they are to receive $10.00 per day for every day the building is completed before the agreed time.”

The undisputed proof showed that the entire delay recovered for resulted solely from the fault of the contractors before their abandonment, and that no delay occurred after the school district took charge. It cannot be said that the allowance of this recovery was not in consonance with even the precise terms of the contract. It will be seen that the obligation to pay the $10 per day was absolute and unconditional, contingent alone upon failure to meet the time limit, and compensated for upon the contractor’s side by providing a bonus in like amount to them, in case of completion before the time fixed.

From the conclusions reached, it follows that all of appellant’s assignments must be overruled, and the Judgment in all things affirmed, and it is so ordered.

Affirmed.
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