author: RICE, J.

text:
    WESTERN UNION TELEGRAPH CO. v. PETER & NEYLON.
    (Court of Civil Appeals of Texas. Austin.
    Nov. 5, 1913.
    Rehearing Denied Nov. 26, 1913.)
    1. Factors (§ 53) — Custom.
    A purchaser through a factor is chargeable with knowledge of the custom of factors to follow the instructions of their customers, and is bound thereby.
    [Ed. Note. — For other cases, see Factors, Cent. Dig. § 85; Dee. Dig. § 53.]
    2. Telegraphs and Telephones (§ 53 — Error in Transmission — Proximate Cause.
    Where plaintiff’s telegram, instructing his broker to sell cotton was changed in transmission so as to make it an order to buy cotton, and was executed as such, plaintiff who, on notice of the purchase, did not repudiate the purchase, but, relying upon the broker’s judgment and thinking it had been purchased for his benefit, held it and sold it at a loss, the failure to promptly repudiate the contract was the proximate cause of the loss, so that plaintiff could not recover.
    [Ed. Note. — For other cases, see Telegraphs and Telephones, Cent. Dig. § 33; Dec. Dig. § 53.]
    3. Telegraphs and Telephones (§ 52) — Erroneous Transmission op Telegram — Duty to Reduce Damages.
    In such case the customer, if he believed that his broker had disregarded his instructions, was bound at once to disaffirm; and, where he failed to do so in order to avoid or reduce loss, he could not recover for the loss resulting from the purchase.
    [Ed. Note. — For other cases, see Telegraphs and Telephones, Cent. Dig. § 36; Dec. Dig. § 52.]
    Appeal from Fayette County Court; Geo. Willrieh, Judge.
    Action by Peter & Neylon against the Western Union Telegraph Company. Judgment for plaintiff, and defendant appeals.
    Reversed and rendered.
    Webb & Goeth, of San Antonio, and C. D. Kranse, of La Grange, for appellant. John T. Duncan, of La Grange, for appellee.

      For otter cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   RICE, J.

This suit was brought by ap-pellees against appellant to recover damages occasioned by its failure to correctly transmit a telegram sent by them to their brokers at New Orleans, La., instructing them to sell certain cotton futures for their account. Ap-pellees, who are residents of Winchester, Tex., on July 26, 1911, believing that the cotton quotations for. January, 1912, delivery were too high, and acting upon information received from their brokers, concluded to sell 200 bales for January delivery, and about 1 o’clock of that day forwarded a telegram over appellant’s line to their brokers, H. & B. Beer, of New Orleans, instructing them to sell for their account 200 bales of cotton, January, 1912, delivery. This telegram, though promptly sent, was in fact changed in transmission so as to read “buy 200 hales cotton January delivery.” Upon receipt of this telegram, the said Beer & Co. immediately purchased for the account of appel-lees, their principals, 200 bales of cotton January, 1912, delivery, paying therefor the sum of 11½ cents per pound; and upon the same day wired appellees what they had done, which telegram was promptly delivered to and received by appellees about 4 o’clock on said day. Believing that their agents had disregarded their instructions, they did not, however, at that time repudiate this purchase, nor seek to protect themselves against loss, because, having implicit confidence in the good judgment and integrity of their brokers, they felt that they were acting for their best interests in making .such purchase. But they were not apprised of the mistake in the message until the 28th of July; whereupon they wired their agents disaffirming said purchase, and instructing them to sell 200 bales of cotton, January delivery, for their account, which last instructions were promptly carried out, and that amount of cotton sold for 11.20 cents per pound, of which they were advised, and by which transaction they claim to have lost $300 on account of the negligence of appellant, and have brought this action to recover the same, together with $30, commissions paid for making such sale. Appellant defended: First, on the ground that the message was not repeated, in accordance with a provision requiring this to be done in order to hold it liable for more than the cost of the message, in the event of default, miscarriage, or delay in delivery; and, second, set up in bar of appellees’ right to recover the fact of their failure to promptly repudiate said purchase upon receipt of the first telegram, and took no action to protect themselves nor minimize their damages, but relied upon the good judgment of their agents, who they believed had made the purchase for their best interests, with full knowledge of the market conditions, whereby appellees were guilty of contributory negligence, and were estopped. A trial before the court resulted in a judgment in favor of appellees for the sum of $300, from which this appeal is taken.

Without passing upon the merits of appellant’s first contention, we sustain its second assignment, which asserts that the court erred in failing to render judgment in its behalf because plaintiffs took no steps to protect themselves against loss when first apprised of the purchase of the cotton for their account, but relied upon the belief that such purchase would result in their benefit. It appears that if appellees, when first apprised of this purchase, had repudiated it, no loss would have resulted. Mr. Beer, one of their brokers, testified that during a business experience of 30 years, he had always followed the instructions of his customers, and it is a matter of common knowledge that brokers usually do so. A purchaser is charged with knowledge of the custom of factors, and is bound thereby. Harbert v. Neill Bros. & Co., 49 Tex. 143. We do not believe that it could be presumed, in the absence of proof to the contrary, that the brokers had disregarded their instructions in this instance, but rather the presumption would lie that some mistake had been made in the transmission of the message, which they could have ascertained and rectified by prompt telegraphic inquiry; for which reason we think that appellees, at the time they received information that their agents had purchased, instead of sold, this cotton, were not justified in believing that their agents had disobeyed instructions.

But, be this as it may, it appears from their own testimony that they did not repudiate the purchase, and took no steps to protect themselves against loss on account thereof, because, irrespective of whether they believed their agents had disobeyed them, they felt secure in the belief that the former were acting for their best interests, and bought the cotton for their account, instead of selling, as directed, from which we must infer that they expected a profit rather than a loss from this transaction, thereby taking chances ppon the judgment of their brokers, rather than depending upon their own. Notwithstanding the appellant in the present case was negligent on account of its mistake in transmitting the message, yet we think that if plaintiffs knew of such fact, or were charged with notice thereof, and could have prevented the loss by resort to available means within their power, and failed to do so, and such failure proximately contributed to such loss, they would be guilty of contributory negligence, and could not recover. See section 326, Jones on Telegraph & Telephone Companies; S. W. Telegraph & Telephone Co. v. Gotcher, 93 Tex. 117, 53 S. W. 686. See, also, Telegraph Co. v. Jeanes, 88 Tex. 230, 31 S. W. 186, where it is said that one who is threatened with danger by reason of the negligent conduct of another should exercise reasonable prudence to avert the injury. See, also, Beach on Con. Neg. § 33; Jones on Tel. & Tel. Cos. § 322. We, therefore, think that the loss in this instance must be attributable, either to appellees’ own negligence, or to their absolute reliance upon the discretion and judgment of their agents, and that the failure to correctly transmit the telegram was not the proximate cause of their loss. Their silence and inaction may be regarded, we believe under'all the circumstances in evidence, as an acceptance and ratification of this purchase by their agents.

In 19 Cyc. 142 (20) it is said: “If a factor buys the goods of his principal, the latter may elect whether he may ratify or repudiate the sale. A principal may ratify the factor’s disobedience of instructions, or his other wrongful act, either by actual approval, or by failure to disapprove within a reasonable time after notice.” If appellees believed that their agents had disregarded their instructions, then it became their duty at once to disaffirm; and a failure to do so, under the facts of this case, must be regarded, we think, as an acceptance of the purchase, and would prevent recovery. Besides this, the company would only be liable for such damages as were the proximate result of the negligence alleged. If the damages were due to some other independent or intervening cause, then the appellant is not liable. 37 Cyc. 1754.

In 3 Sedgwick on Damages, § 897, it is said that the rule of proximate cause is often of great assistance in defining the liability of telegraph companies. To ascertain whether any damages can at all be recovered — i. e., whether an action will lie — the preliminary question must always be asked whether the loss complained of arises from the act or omission of the telegraph company, or some intervening agency or cause. Thus where B. sends a dispatch to plaintiff asking for $500, which the company by mistake changed to $5,000, and B. on obtaining the latter sum embezzled it and absconded, it was held by the New York Court of Appeals that the loss was the result, not of the error in the transmission of the dispatch, but of B’s own independent act. See Lowry v. Western Union Telegraph Co., 60 N. Y. 198, 19 Am. Rep. 154; 2 Parsons on Contracts, 250, 257.

Notwithstanding the mistake in the transmission of the telegram, we think in the present case that their own conduct was the proximate cause of plaintiffs’ loss, for which reason also they should not recover.

It, therefore, becomes our duty to reverse the judgment of the court below, and here render judgment in behalf of appellant, which is accordingly done.

Reversed and rendered.


source: Caselaw Access Project

author: BICE, J.

license: Public Domain

text:
    T. B. ALLEN & CO. v. SHOOK.
    (Court of Civil Appeals of Texas. Austin.
    Oct. 29, 1913.
    Rehearing Denied Nov. 26, 1913.)
    1. Master and Servant (§ 270) — Injuries— Admission of Evidence — Knowledge of Defects.
    In an action for injuries while working in a stavemill by a knot in a stave being knocked' out and striking plaintiff’s eye because of the alleged unsteady condition of the machine, evidence that the manager of the mill had stated that the machinery had been in a burned mill, and on that account the wheel at which plaintiff worked was warped, and that he had also been struck with a knot from the machine, was admissible to show that defendant had knowledge of the machinery’s defective condition.
    [Ed. Note. — Eor other cases, see Master and Servant, Cent. Dig. §§ 913-927, 932; Dec. Dig. § 270.]
    .2. Master and Servant (§ 264) — Injuries— Actions — Issues.
    Under allegations of the complaint, in an action for damages for injuries by a knot in a stave being knocked out and hitting plaintiff in the eye, that the wheel containing the knives was unsteady, and because of such defect the knives failed to cut the knot, but tore it out, and that the disc in which the blades were fastened was defective from being in a fire, evidence was admissible that the wheel was warped; plaintiff not being confined to proof of specific allegations where the general allegations and specific allegations refer to distinct acts of negligence, or where the proof offered is merely explanatory or descriptive of the act alleged.
    [Ed. Note. — For other eases, see Master and Servant, Cent. Dig. §§ 861-876; Dee. Dig. § 264.]
    3. Appeal and Error (§ 1170) — Harmless Error — Admission op Evidence.
    Any error, in an action for injuries by a knot in a stave being knocked against plaintiff’s eye while he was planing it by the alleged unsteady condition of the machine, in admitting evidence that the machine was warped, on the ground that the petition did not sufficiently allege such defects, was not reversible, under Court of Civil Appeals rules No. 62a (149 S. W. x), not being such as would change fee result.
    [Ed. Note. — For other cases, see Appeal and Error, Cent Dig. §§ 4032, 4066, 4075, 4098, 4101, 4454, 4540-4545; Dee. Dig. § 1170.]
    4. Witnesses (§ 414) — Impeachment — Corroboration of Witness.
    In a prosecution for injuries by a knot in a stave being knocked out and striking plaintiff because of the alleged unsteady condition of the machine, a witness who testified as to its defective condition was asked on cross-examination if he had not stated in writing directly after the injury that the machine was in good condition, and answered that such purported statement was incorporated in the written statement at the suggestion of defendant’s manager, but that he did not really make the statement. Seld, that plaintiff could testify that he was present when the statement was made, and that such witness did not make the statement referred to.
    [Ed. Note. — For other cases, see Witnesses, Cent. Dig. §§ 1287, 1288; Dec. Dig. § 414.]
    5. Appeal and Error (§ 1048) — Harmless Error — Admission of Evidence.
    An injured employé was asked by his counsel if he knew who wrote the statement made by a witness for plaintiff immediately after the injury purporting to state that th.é machine at which plaintiff was working when injured was in good condition, and plaintiff answered, “They, told me it was the insurance lawyer.;-” to wliich answer defendant objected on tjte ground that it showed that an insurance eojh-pany was connected with the transaction, when plaintiff’s attorney asked that the answer be stricken, and that the jury be instructed not to consider it, which was done by the court. Seld that, since it did not appear whom the insurance lawyer represented, and in view of the action of the court, it could not be said that defendant was prejudiced by the answer.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4140-4145, 4151, 4158-4160; Dee. Dig. § 1048.]
    6. Trial (§ 260) — Instructions—Bequest.
    A special charge which was covered by the general and special charges given was properly refused.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 651-659; Dec. Dig. § 260.]
    7. Trial (§ 253) — Injuries—Instructions— Applicability to Evidence — Assumed Bisk.
    An instruction, in an action for injuries to an employé 18 years of age from an alleged defective machine, that, if plaintiff knew of the defective condition and of the incidental dangers, or would necessarily have known thereof in the course of his employment, he assumed the risk of such defects was properly refused for ignoring plaintiff’s age, want of discretion, and defendant’s failure to warn him.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 613-623; Dec. Dig. § 253.]
    8. Master and Servant (§ 235) — Servant’s Duty — Inspection of Machinery.
    It is not the duty of a servant to inspect machinery for defects; the master being required to furnish reasonably safe machinery.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §§ 710-722; Dec. Dig. § 235.]
    9. Master and Servant (§ 295) — Injuries-Jury Question — Assumed Bisk.
    In an action for damages for injuries while working in a stavemill by a knot being jerked out and thrown against plaintiff's eye because of the unsteady condition of the machine, etc., whether, in view of his want of discretion, and of the failure to warn him of the danger, plaintiff assumed fee risk therefrom held an issue under the evidence.
    [Ed. Note.- — For other cases, see Master and Servant, Cent. Dig. §§ 1168-1179; Dee. Dig. § 295.]
    Appeal from District Court, Liberty County; L. B. Hightower, Judge.
    Action by Dick Shook against T. B. Allen & Co. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    Crook, Lord, Lawhon & Ney, of Beaumont, for appellant. J. A. Camp and E. B. Pickett, Jr., both of Liberty, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Kéy-No. Series & Rep’r Indexes

   BICE, J.

Appellee brought this action against appellant to recover damages for the loss of his left eye, which was injured while at work at the mill of appellant, a corporation engaged in the manufacture of staves, by reason of the negligence of appellant in using a defective lister wheel in the stavfe-mill, alleging that said wheel was defective in that the shaft which supported it was bent and sprung, so that the wheel became unsteady and would shake and wobble as it worked, while, if it had been properly placed and constructed, it would have run smoothly, and that by reason of this defect the knives or blades thereof failed to cut a knot or some hard particle embedded in the wood, and instead of cutting the same the knot was torn from the stave, and thrown into the air, striking plaintiff in the eye. He further alleged that the disc, into which the blades that cut the staves were fastened, was worn and defective from long use, and from having been through a fire, and that all of the machinery connected therewith was not in proper condition to perform the work; that the plaintiff was a minor, 19 years of age, and was not warned by appellant of the defects in said machinery, nor did he know of such defects; and that he was without judgment and discretion to appreciate the risks or dangers to which he was exposed.

It seems from the evidence that appellee was engaged at the time of the accident in “tailing the bucker,” by which is'meant that he was handing the staves as they came from the “bucker,” a device through which they passed before going to the lister wheel, in order to reduce them to proper and uniform size, and placing them on the lister table, preparatory to being dressed by the lister wheel, and while so engaged a knot flew from one of the staves, striking him in the eye, resulting in the injury complained of.

The first assignment is predicated upon the refusal of the court to instruct a verdict in behalf of appellant on the ground that the proof wholly failed to show that appellee’s injury was the proximate result of the negligence alleged, but, on the contrary, would have happened irrespective thereof; and the second, that, since the evidence showed that plaintiff had assumed the risk it was the duty of the court to have instructed a verdict in its favor. We differ with appellant in this contention. Both were questions of fact for the consideration of the jury, and, as such, the issues arising thereon were properly submitted to them by the court.

There was no error in permitting the appellee to show by himself and his witness Taylor that Cook, the manager of the mill, had stated that the machinery in question had been in a mill that had burned down, and that on account thereof the wheel was warped. Nor was there any error in permitting the witness Taylor to state what Cook had said about his having been struck with a knot or splinter that was thrown from said machine, for which reason we overrule the third and fifth assignments. Appellant was a coporation, and Cook was its manager. This evidence had a tendency, not only to show the condition of the machinery, but likewise brought home to it a knowledge of its defective condition, and was therefore properly admitted. M., K. & T. Ry. Co. v. Russell, 40 Tex. Civ. App. 114, 88 S. W. 380; Consumers’ Cotton Oil Co. v. Jonte, 36 Tex. Civ. App. 18, 80 S. W. 849; M. P. Ry. Co. v. Johnson, 72 Tex. 95, 10 S. W. 325; Standefer v. Aultman, 34 Tex. Civ. App. 160, 78 S. W. 552; Missouri, etc., Co. v. Ramsey, 128 S. W. 1184.

The appellant pleaded a general denial, and specially that the wheel in question is a device made and designed for the purpose of planing and smoothing the edges of the staves, and removing therefrom any knots or other hard particles of wood, having sharp knives or blades fixed in the surface of the disc thereof, so that the staves to be dressed may be brought into contact with such blades or knives, which revolve rapidly when in operation, so that when they revolve they strike the stave, which is brought in contact therewith, thereby removing any knots or other particles of wood, making the edges thereof smooth, and which is the only purpose of its use; that in the operation of same small knots or particles of wood may be, and necessarily will be, sometimes thrown from the stave being dressed, and from the blades or knives as same are cut and removed by the application of the blades in their revolutions, and that such occurrence would be one naturally incident to the operation of said machine in the performance of its work; that the plaintiff was acquainted with the character, use, and purpose of said machine and the parts thereof, and was experienced in the use thereof, knowing the effects that might be expected in the operation of the same, and that knots and particles of wood might be thrown from the staves while being dressed; and that, if a knot or particle was so thrown as alleged by plaintiff, it was the result of a risk ordinarily incident to the operation of the machine about which the plaintiff worked and the business and employment in which he was engaged; and that' he thereby assumed such risk. And further alleged that, if there were any defects in the machinery, as complained of, he was also cognizant thereof, and assumed the risks incident thereto. The trial resulted in a judgment in favor of the plaintiff, from which the defendant has appealed.

The court did not err in permitting the witness Richardson to testify that the lister wheel was warped, the objection being that there was no allegation in the pleading authorizing this testimony, for the reason that the plaintiff will not be confined to specific allegations, when it appears from the pleadings that the general averments and the specific allegations referred to separate and distinct acts of negligence, nor when the matter is merely explanatory or descriptive of the particular matter alleged. Railway v. Brinker, 68 Tex. 500, 3 S. W. 99; Lantry-Sharpe Contracting Co. v. McCracken, 53 Tex. Civ. App. 627, 117 S. W. 458, and cases there cited. Even if it be conceded that this was technical error, yet it would not be such, in our judgment, as would change the result upon another trial, for which reason the assignment presenting this question is overruled. See rule 62a (149 S. W. x) for the government of this court.

Richardson, a witness for plaintiff, having testified on the trial as to the defective condition of the lister wheel at the time the accident occurred, on cross-examination was asked by counsel for appellant if he had not made a written statement directly after the occurrence in which he had stated that the wheel was in good condition, but answered that, while this statement was incorporated in the written statement referred to, yet he did not make said statement, but that the same was incorporated therein at the suggestion of Mr. Cook, the manager. The sixth assignment urges that the court erred in permitting the plaintiff as a witness to testify, over objection, that he was present at the time the statement was made, and to corroborate Richardson in this regard. We do not think there was any error in the admission of this testimony. This was an effort on the part of appellant to attack or impeach the testimony of Richardson. Appellee had the right to show, not only by Richardson, but by anybody else who was cognizant of the fact, that Richardson did not make the particular statement referred to. We therefore overrule this assignment. Smith v. Traders’ Nat. Bank, 82 Tex. 368, 17 S. W. 779 ; 40 Cyc. 2754 C.

While plaintiff was on the stand he was asked by his counsel if he knew who wrote the statement made by Richardson, referred to in the preceding assignment. Answering, he said, “They told me it was the insurance lawyer.” This was objected to by counsel for appellant on the ground that it was irrelevant to any issue in the case, and calculated to prejudice the minds of the jury against the defendant, for the reason that it disclosed that the insurance company had some connection or interest in the matter involved in the action. Whereupon pla&n-tiff’s attorney asked that it be stricken out, and stated that he did not ask for the answer given, and that he did not insist on the answer, and did not have that purpose in view, or any similar purpose, when he asked the question; that he merely asked for the man’s name, and now asked the court to strike it out of the record, and instruct the jury not to consider it, which was done by the court. Plaintiff’s attorney then asked this question: “Simply state, if you know, the name of the man who wrote down Ed Richardson’s statement.” The bill does not show any further answer by the witness, and no further action was taken by the court with reference to the matter. This is made the basis of the seventh assignment, and the cases of Lone Star Brewing Co. v. Voith, 84 S. W. 1100, Harry Bros. v. Brady, 86 S. W. 616, and Beaumont Traction Co. v. Dilworth, 94 S. W. 352, are relied upon to sustain the contention. These and other cases were reviewed by ns in Levinski v. Cooper, 142 S. W. 959; but we do not regard the question here presented as coming within the doctrine therein announced, for the reason that it does not appear in this case that the appellant was in any way injured, or could have been in any way prejudiced, by what took place as shown in the bill. In the first place, the question asked was not objectionable, and, second, the answer was not responsive to the question. It does not appear whom this insurance lawyer represented. ’ For aught we know, he may have represented a life, fire, or- other such insurance company. At any rate, it is not shown or suggested that he represented an indemnity insurance company, who would hold the appellant harmless against the result of this prosecution. In each of the cases referred to, sufficient was done and said to impress the jury with the idea that the particular defendant in those cases had indemnity insurance, and would not have to bear the loss. This case is therefore clearly distinguishable from each of them, for which reason we overrule this assignment.

Appellant requested and the court refused to give the following special charge: “While the employé or servant does not assume any risk or danger caused by the negligence of his employer or master, unless he knows of such negligence, and understands the dangers thereof, the employé or servant does not assume the risks and dangers which are incident to the work in which he is engaged, as the same is ordinarily conducted, a,nd he cannot recover damages for injuries occasioned thereby. Now, if you believe from the evidence that, in the ordinary and usual course of dressing staves with the machine in question, knots or other hard particles of wood might be expected to and would sometimes fly off from the same, and that plaintiff knew that and the dangers thereof, and you further believe that, while said machine was being operated in the usual and ordinary manner, and while said machine was in its usual and ordinary condition, a knot or other hard particle of wood flew off, and struck the plaintiff, and injured him, then the plaintiff cannot recover damages against the defendant, because the plaintiff under his employment assumed the risk of such an occurrence and injury”— and its refusal is assigned as error. This charge, in our judgment, was properly refused, because it was incorporated in the general and special charges given by the court. H. & T. C. Ry. Co. v. Cluck, 99 Tex. 130, 87 S. W. 817; I. & G. N. R. R. Co. v. Tisdale, 39 Tex. Civ. App. 372, 87 S. W. 1063; 38 Cyc. 1711 E.

It is urged that the court erred in refusing to give to the jury defendant’s special charge No. 8, which is as follows: “If you believe from the evidence that the machinery was defective as alleged by plaintiff, and that the lister wheel ran unsteadily and wobbled, and that on account of such defective condition and operation a knot or hard particle of wood was caused to fly off and strike the plaintiff, hut you further find and believe from the evidence that the plaintiff knew of such defective condition and- operation of the machinery, and of the dangers incident thereto, or would necessarily have known thereof in the course of his employment, then the plaintiff assumed the risks of such defects and dangers, and cannot recover damages against the defendant, and your verdict must be for the defendant.” For the reason that this charge ignores and excludes the issue of plaintiff’s minority, want of discretion, and appellant’s failure to warn him of the danger, which feature was fully covered in the general charge of the court, we think it was properly refused, for the facts show that appellee, at the time of the injury, was a youth, some 18 years of age, without any previous experience in operating machinery of this character. He testified that he was employed as a roustabout, and, while he had occasionally worked at the “bucker,” the lister wheel, and a few times had run the engine, yet he stated that he did not know that there was any danger in the operation of such machinery, and that he had not been warned by the manager or any one else of any danger.

It is not the duty of the servant to inspect machinery for defects, but that of the master to furnish reasonably safe machinery, tools, and appliances to his employes with which to perform their work. The court in its main charge expressly told the jury that, if they should believe from the evidence that the plaintiff knew, or in the course of his employment should have learned, of the dangers (if any) to which he was exposed in performing the service at which he was working when injured, and appreciated the risk of these dangers, then he assumed the risk, and could not recover. But they were further told that, if they should believe from the evidence that he was a minor of immature judgment, and without mature consideration, and was not warned by the defendant of the dangers attendant upon the work he was doing, and, further, that by reason of such immaturity of judgment, and lack of discretion, and want of information as to the risks attaching to the dangers about the employment he was engaged in, and was without sufficient discretion to understand and appreciate the extent of the hazard to which he was subjected, then he did not assume the risk and dangers incident to the work, and in such event a recovery by him could not be prevented because of any assumed risk. See T. & P. Ry. Co. v. Brick, 83 Tex. 598, 20 S. W. 511; Henry et al. v. McCown, 140 S. W. 1170.

"Without going into detail, suffice it to say we think the facts in evidence were sufficient to demand of the court the submission of that feature of the charge complained of under the tenth assignment, which has already been adverted to and outlined, and we therefore overrule said assignment, which insists that the evidence did not raise the issue as to the minority of the plaintiff, his want of discretion, and lack of warning.

Finding no error in the proceedings of the trial court, its judgment is affirmed.


author: RAINEY, C. J.

text:
    MARTIN et al. v. REID.
    (Court of Civil Appeals of Texas. Dallas.
    Nov. 8, 1913.
    Rehearing Denied Nov. 29, 1913.)
    1. Appeal and Error (§ 547) — Presumptions —Findings.
    A finding of the court, in an action of trespass to try title, that a deed relied upon by defendant was a forgery was conclusive on error as against an objection that it was based on hearsay evidence, where there was no statement of facts in the record.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2427, 2429-2432; Dec. Dig. § 547.] .
    2. Evidence (§ 178) — Secondary Evidence— Admissibility.
    In an action of trespass to try title, secondary evidence of a suit in federal court in which the title of the land in controversy was settled and to which the person, since deceased, under whom defendant claimed was a party, was properly admitted to show that the decedent was a party thereto and lost and disclaimed any in.terest in the land, where it appeared that the records of such suit had been burned.
    [Ed. Note. — For other eases, see Evidence, Cent. Dig. §§ 580-594; Dec. Dig. § 178.]
    3. Appeal and Error (§ 1054) — Harmless Error — Admission op Evidence — Trial by Court.
    Error, if any, in admitting on plaintiff’s behalf evidence of a suit partitioning the land in controversy, to which suit defendants’ predecessor, since deceased, was not a party, was harmless, in an action of trespass to try title, tried by the court, where the court stated that such evidence was not considered in any way binding on defendants or decedent, but was only considered so far as it tended to prove the fact that there was a former litigation.
    [Ed. Note. — For other cases, see Appeal and Erroi’, Cent. Dig. §§ 4185, 4186; Dec. Dig. § 1054.]
    Error from District Court, Henderson County; B. H. Gardner, Judge.
    Action by W. Reid against W. B. Martin and others. Judgment for plaintiff, and defendants bring error.
    Affirmed.
    Morrow & Morrow, of Hillsboro, for plaintiffs in error. Richardson, "Watkins & Richardson, of Athens, for defendant in error.

      JFor other oases see same topic and section NUMBER in Deo. Dig. & Am. Dig. ICey-No. Series & Rep’r Indexes

   RAINEY, C. J.

This is a writ of error from a judgment of the district court of Henderson county, wherein defendant in error in an action of trespass to try title recovered from plaintiffs in error a certain tract of land out of the Oaro league in Henderson county, Tex.

The cause was submitted to the court without a jury, and the judge found the following conclusions of fact, to wit:

“I find that the plaintiff in the case has shown a regular chain of title from the sovereignty of the soil to himself, which is as follows: Patent from the state of Texas to Louis A. Gunst, assignee of Thomas Caro, of date February 2, 1847. To the Thomas Caro league, Louis A. Gunst by will to .Rebecca Meyer, wife of Asher T. Meyer, probated in the surrogate court of the city of New York on February 10, 1873, conveying the entire Caro league. Deed by L. J. Phillips and Seigmund Meyer, executors of the will of Louis A. Gunst, to Rebecca Meyer of the date October 15, 1874. League agreement of Asher T. Meyer and wife, Rebecca, to convey to Orlando Dorsey 4°/ioo of the Caro league, for its recovery of date February 18, 1876. Judgment of the district Court of Henderson county, Tex., directing a partition of the land between the executors of Orlando Dorsey and Asher T. Meyer and wife, Rebecca Meyer, and others giving to Asher T. Meyer and wife the portion of the league in controversy of date April 14, 1882. Deed from Asher T. Meyer and Rebecca Meyer to T. N. Jones, of date October 15, 1902, conveying the land sued for. Deed from T. N. Jones to C. H. Alexander to the land in controversy of date June 17, 1907. C. H. Alexander and wife to the plaintiff, W. Reid, by deed of date June 10, 1908, the same land described in plaintiff’s petition.
“Second. I also find that Mrs. Rebecca Meyer was the wife of Asher T. Meyer, and that she was the only child of Louis A. Gunst, and that her mother is also dead.
“Third. I find that defendants introduced in evidence the record of deed of date August 15, 1871, purporting to be a conveyance by Louis A. Gunst to Wm. H. Martin of the entire Thomas Caro league in Henderson county, Tex. There has been filed in the cause an affidavit of forgery attacking said deed in the usual statutory form. The deed recites a consideration of $500 cash paid, and is recorded in Book Q, Deed Records of Henderson county, on December 1, 1871. I find that the acknowledgment of the deed as certified to by the officer taking the same recites that ‘on this day personally appeared Louis A. Gunst, a man made known to me.’
“Fourth. I find that the defendants herein are the surviving wife, sons, and daughters of Wm. H. Martin, and that they claim through him and under the deed set out in No.-of the conclusions above.
“Fifth. I find from the testimony of Chas. A. Gunst, John S. Jones, and M. E. Richardson that Maj. W. H. Martin, on or about the year 1876 and afterwards, stated in conversation with them that he had been sued in the federal court at Tyler by Asher T. Meyer and wife, along with other defendants who were claiming said Caro league of land, and that he also stated to them that he permitted judgment to be taken against him, and that he did not set up any further claim to the Thomas Caro league, and I also find from the evidence of John S. Jonés, who was a nephew of the said W. H. Martin, that said W. H. Martin consulted with him in regard to said suit pending in the federal court at Tyler, and that he prepared and delivered to Maj. Martin a disclaimer to the land in controversy to be filed in said suit.
“Sixth. I also find that he, W. H. Martin, on or about the said date and afterwards, stated to M. E. Richardson and to Chas. A. Gunst that he had satisfied himself that the deed from Louis A. Gunst to himself was fraudulent, and that he did not claim further under it. That it was procured by one Snively, and .that he never saw the party purporting to be Louis A. Gunst, and knew nothing of him, and for that reason permitted judgment to be taken against him.
“Seventh. I find on the office docket of Herndon and Robertson at Tyler, and written in the handwriting of Col. Wm. S. Herndon, the following entry: ‘No. 1987. Rebecca Meyer and husband v. Samuel T. Price, James A. Mitcham et al. — Retained by the defendant James A. Mitcham, of Rice, Navarro county, Texas, June, 1876, conditional fee of one-half of land recovered, suit pending in the circuit court of the United States. Case decreed by agreement. Plaintiff takes judgment and pays all costs of suit. November, 1877. Write for $50.00. November 23, ’77.’
“Eighth. The plaintiff also introduced in evidence the original statement of facts filed on May 2, 1881, in the case of J. C. Schwing, Administrator of Orlando Dorsey, v. A. T. Meyer et al., for the partition of the Thomas Caro league, which said judgment of partition has been previously mentioned herein, which statement of facts shows that A. T. Meyer and wife brought suit in the federal court of the United States at Tyler, Tex., on or about the year 1876, against various parties, for the possession of the Caro league, and the judgment was rendered for the plaintiff A. T. Meyer and wife against the parties claiming said land, and that the judgment has been since burned.
“I find that W. H. Martin was not a party to the suit for partition in Henderson county, and would be in no way bound by said suit, or anything connected therewith, and that this statement of facts is not admitted nor considered in any way binding on the defendants herein, or W. H. Martin, but was only considered by the court in so far as it might tend to prove that there was some litigation, between the said Meyer and wife and W. H. Martin, on or about said date, in the federal court at Tyler, but for no other purpose.
“Ninth. I also find that the tax records of Henderson county, Tex., show that the taxes were paid on the lands in controversy, from the year 1880 up to this date, and do not go back of the year 1880, and X find that Asher T. Meyer and wife, Rebecca Meyer, paid the taxes on said land from the year 1880 until the date of sale by Rebecca Meyer and husband to T. N. Jones, and that the taxes later have been paid by T. N. Jones, O. H. Alexander, and the plaintiff herein for the years that the records show it to have been owned by them. X further find that W. H. Martin did not pay any taxes on the said property up to the time of his death in A. D. -, and that the defendants herein have never paid any taxes on said property.
“Tenth. I further find that certain parties who were occupying and claiming a portion of the Thomas Oaro league, to wit, Price, Mayfield, Mrs. Ball, up to the time on which Asher T. Meyer and wife, Rebecca Meyer, are alleged to have sued them in the federal court at Tyler, subsequently purchased the same lands upon which they were living from Asher T. Meyer and wife, and continued to reside upon the same, and have since disposed of them.
“Eleventh. I find that the entire records of the United States federal court, both District and Circuit Court, at Tyler, Tex., were destroyed by fire during the latter part of the year 1877.
“Twelfth. Prom the foregoing facts relative to the matter of the suit between Asher T. Meyer and wife, Rebecca Meyer, and Maj. W. H. Martin and others, I conclude from all the facts and the circumstances of the case that the preponderance of the evidence establishes that suit was brought by the said Asher T. Meyer and wife in the United States Circuit Court for the Eastern District of Texas, at Tyler, Tex., for the Thomas Caro league in about the year 1876, against W. H. Martin and other defendants, and that the said land was recovered by the plaintiffs, and that a judgment was had against said W. H. Martin for the said Thomas Caro league, and that the papers of the said case, together with all of the records, were subsequently burned and destroyed.
“Thirteenth. On the matter of the issue of whether or not the purported deed from Louis A. Gunst, made August 15, 1871, was genuine or a forgery, I find that the preponderance of evidence shows that Louis A. Gunst was not in the state of Texas during the year of 1871, at the time the deed shows the same to have been acknowledged before a notary public in Bexar county, Tex. I also find that Louis A. Gunst was never a resident of the state of California. I also find that Maj. W. H. Martin stated to various parties, on or about the year 1876 to 1880, that he had examined into the authenticity oí the said deed, and that he was satisfied from his examination at the time that the deed was not genuine, and that he did not know himself that Louis A. Gunst made the deed, and had never seen Louis A. Gunst; and I further find that he disclaimed all ownership or title to the lands under said deed, and never did set up any claim to it or have it in his possession up to the date of his death. I also find that the record of the officer taking the acknowledgment to the purported deed did not recite that he knew the party to be Louis A. Gunst, and did not set out that it was Louis A. Gunst, but that the party appearing before him was made known to be Louis A. Gunst. I further find that said land and premises have not, since prior to the year 1880 and up to the time of bringing this suit, been adversely claimed, or held under or by virtue of the said deed so made to Maj. W. H. Martin. And I further find that there is no fact tending to prove the execution of the said deed by Louis A. Gunst save and except such proof as may be afforded by the fact that it was recorded in 1871, and I conclude that the preponderance of the evidence in this case shows that the deed was not genuine, but was in fact a forgery.”

The conclusions of law as found by the court are attacked in some particulars as not warranting the findings of fact. There is no statement of facts in the record, and there is no such finding of the court as to the facts as to show that the judgment rendered is contrary to law.

The facts as found by the court showed that the defendant in error, W. Reid, proved a regular chain of title in himself from the sovereignty of the soil. The plaintiffs in error claim title through a deed from one Louis A. Gunst, a common source, but as to this deed the court found it to be a forgery. This deed purported to have been made in San Antonio by one Louis A. Gunst, and which showed that Gunst was a resident of California. The court found that the Louis A. Gunst through whom W. Reid claims title resided in the state of New Jersey; that he never lived in California, nor was he ever in Texas. There was other evidence tending to show that the Gunst deed to plaintiff in error was a forgery. As to this phase of the case there is no attack on the findings of the court, "except that the finding as to forgery is based on hearsay evidence. To this we do not concur. There being no statement of facts, the finding of the court on this point will be conclusive. The attack is leveled mainly at the rulings of the court in the admission of certain evidence on another branch of the case, as hereinafter shown.

The defendant in error, not being content in showing title in himself from the sovereignty of the soil and the forgery of the deed from Gunst to W. H. Martin, undertook to show that the matter of title to the land had been settled in a suit in the federal court at Tyler, Tex., in which W. H. Martin, under whom plaintiff in error claims, was a party thereto. The records of said suit were burned in 1876, and it was necessary to resort to secondary evidence to establish such fact. We think the contention of plaintiff in error as to error in the admission of testimony is not well founded. The evidence was legitimate and sufficient to establish such a suit; that Martin was a party thereto and lost, and from that day until the day of his death disclaimed any interest in the land.

Defendant in error also introduced evidence relative to a suit in Henderson county partitioning the land among several claimants, to which suit W. H. Martin was not a party. The statement of facts in that case was admitted, but the trial court says “that this statement of facts is not admitted, nor considered in any way binding (on) the defendants herein, or W. Eh Martin, but was only considered by the court in so far as it might tend to prove that there was some litigation between the said Meyer and wife and W. H. Martin, on or about said date, in the federal court at Tyler, but for no other purpose.” Conceding the admission of this evidence was error, the court did not consider it for the purpose of showing title, and its admission was harmless, as the case was tried without a jury.

The judgment is affirmed.


author: HIGGINS, J.

text:
    CAPPS v. JOHNSON.
    (Court of Civil Appeals of Texas. El Paso.
    Oct. 23, 1913.
    On Rehearing, Nov. 13, 1913.
    Rehearing Denied Dec. 4, 1913.)
    Contracts (§ 231) — Construction—Dbiix-ING C&NTRACT.
    Plaintiff agreed to bore a well for defendant, who was to pay $2 a foot for the first 100 feet, $2.50 for the next 100 feet, and $3 for the third 100 feet, and it was agreed that, if the water was not sufficient to justify pumping for irrigation, then defendant should only pay the sum of $1 a foot, and defendant agreed to promptly test the well with a pump to determine whether it would furnish sufficient water for irrigation. Held,, that defendant was bound to pay the maximum amounts provided, unless the test which he agreed to make showed that the well did not furnish sufficient water to justify pumping for irrigation, and to escape liability for such larger amounts, defendant was bound to show by pumping the well that it did not furnish sufficient water for that purpose.
    [Ed. Note. — For other cases, see Contracts, Cent. Dig. §§ 1046, 1047, 1051, 1052; Dec. Dig. § 231.

    Appeal from Reeves County Court; Ben Palmer, Special Judge.
    Action by B. F. Capps against F. W. Johnson. From a judgment for defendant, plaintiff appeals.
    Reversed and remanded for new trial.
    Hefner & Cooke, of Pecos, for appellant. J. A. Buck, of Pecos, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HIGGINS, J.

Appellant sued to recover the sum of $450, alleged balance due for boring a well, alleging that he had entered into a contract with appellee to bore a well, for which he was to pay the sum of $2 per focjt for the first 100 feet, $2.50 per foot for the second 100 feet, and $3 per foot for the third 100 feet; that it was agreed that, if the water in the well was insufficient to support a'pump, and to justify the pumping of same for irrigation purposes, then, and in such event, appellee was only to pay the sum of $1 per foot; that appellee agreed to promptly and properly make a test of said well with a pump for the purpose of determining whether or not it furnished sufficient water for irrigation purposes; that the well was drilled to a depth of 300 feet, and delivered to appellee, who paid the sum of $1 per foot, amounting in the aggregate to the sum of $300, and agreed to have the well tested with a pump as above specified. It was further averred that the well was a good and sufficient one to support a pump and justified the pumping of same for irrigation purposes; but that the defendant had failed and refused to test the well, and to pay the balance due of $450.

The issue involved is whether or not the well furnished a sufficient supply of water for irrigation purposes, in which event ap-pellee would have been liable for the total sum of $750, or, Was there an insufficient supply of water for that purpose? in which event he would be liable only for the sum of $300, which he had paid.

The court, in its charge to the jury, submitted the issue noted as to the sufficiency of the water supply, resulting in a finding adverse to appellant, and he here complains of the charge of the court requiring him to show by a preponderance of the evidence that the well was a good and sufficient one, and afforded water sufficient for irrigation purposes, in view of the fact that he had alleged and proven that the contract between the parties provided that appellee should make a test of the well, which he had refused to do. The vital and controlling issue in the case was the sufficiency of the well in the particular noted, and, unless it was so sufficient, appellee would not be liable, and the court properly refused to submit an issue of liability, based upon the failure to make a test. The duty of testing the well was secondary, and the failure to make the test would not have rendered appellee liable in the event the well, as a matter of fact, was insufficient to support a pump and furnish water for irrigation purposes. This disposes of the first three assignments of error.

The charge is not subject to the criticism made in the fourth assignment. It correctly assumes that the burden of proof was upon appellant to prove that the well was sufficient in the particulars noted. The vice in all of the assignments of error herein consist in the assumption that liability upon ap-pellee’s part may be predicated upon his failure to test the well, rather than its sufficiency to support a pump and supply water for irrigation purposes.

Finding no error, the judgment of the lower court is affirmed.

On Rehearing.

Upon consideration of the motion for rehearing, we have reached the conclusion that we erred in our interpretation of the contract alleged by appellant. Properly construed, the petition alleges an absolute promise and obligation upon the part of appellee to pay $2 per foot for the first 100 feet, $2.50 per foot for the second 100 feet, and $3 per foot for the third 100 feet, or fraction thereof. It imposes an absolute obligation upon the part of appellee to pay the sum specified, unless the test which appellee agreed to make should disclose that the well did not furnish sufficient water to support a pump, and justify pumping of same for irrigation purposes. The burden was therefore upon the appellee to show that the well did not furnish sufficient water.

The allegations in, the pleading are supported by evidence, and the charge of the court is erroneous, in that it does not predicate the right of recovery by appellant upon the case made by his pleading and proof. The rehearing is therefore granted, and the cause reversed and remanded for new trial.


author: HALL, J.

text:
    CHICAGO, R. I. & G. RY. CO. v. O’DELL.
    (Court of Civil Appeals of Texas. Amarillo.
    Nov. 15, 1913.)
    1. Railroads (§ 443) — Killing Animals — Evidence — Negligence.
    Plaintiff’s mule followed a horse across defendant’s railroad track at night, and was struck by the side of defendant’s engine. The engineer and fireman were keeping a lookout; but the mule at no time came within the range of the engine headlight, and was not seen until just before he was struck, prior to which there was no time to stop the engine, or give any signal which could have prevented the accident. Held insufficient to show actionable negligence on the part of the railroad company.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. §§ 1608-1620; Dec. Dig. § 443.]
    2. Railroads (§ 441) — Killing Animals— Burden or Prooe.
    In an action against a railroad company for. killing plaintiff’s mule, the burden is on plaintiff, not only to establish negligence, but to show that such negligence was the proximate cause of the accident.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. §§ 1575-1595; Dec. Dig. § 441.]
    Appeal from Gray County Court; Siler Faulkner, Judge.
    Action by Fred O’Dell against the Chicago, Rock Island & Gulf Railway Company. Judgment for plaintiff, and defendant appeals.
    Reversed and rendered.
    N. H. Lassiter, of Ft. Worth, and Gustavus & Jackson, of Amarillo, for appellant. A. S. Rollins, of Amarillo, and S. E. Boyett, of McLean, for appellee.

      For other cases see same topic and section NUMBER in Deo. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HALL, J.

This is a damage suit for the killing of appellee’s mule at a public crossing near McLean, Tex., originating in the justice court of Gray county, and, from a judgment for appellee, the case was appealed to the county court, where,-upon a trial de novo, judgment was again rendered in favor of ap-pellee for the sum of $150. Numerous errors have been assigned by appellant in this court, which it will not be necessary for us to consider further than the assignment numbered 4. Under this assignment it is insisted that the evidence is insufficient to support the verdict and judgment. The testimony of the engineer, corroborated by the fireman, is that on the night of October 14, 1912, the mule in question ran into the engine, and was killed. They further testified that a horse ran across the track just in front of the engine, barely escaping, and that the mule was following the horse; that the animals came out of the dark and onto the track; and the animal which was killed was not on the track until it struck the engine between the pilot beam and the cylinder. The engineer testified that he made an examination of the engine, and found the hair of the animal on the front head of the cylindér and behind the pilot beam, and, from the location of the hair, it was impossible for the front part of the engine to have struck the animal; that neither the engineer nor fireman from their positions in the cab of the engine could see the animal until just about the time it struck the engine; that prior to that time it was not on the track, nor within range of the engine headlight. They both testified they were keeping a lookout down the track; were running at about 20 miles an hour, and that the night was dark; that the animal was struck on a curve, but that they had full view of the crossing; that the whistle was sounded at the whistling post upon approaching the crossing; and that the animal seemed to be coming toward the engine at about right angles to the track. The fireman testified that the animal was struck by his side of the engine, and was not more than 6 or 8 feet from the track when he first saw it, and was running, and that there was not time to make any effort to stop the engine after he first saw it. This testimony is un-contra verted.

Appellee alleged that the crossing over the track at the point where the mule was killed was improperly and unskillfully constructed, and that it was constructed in such a manner that an animal coming upon the track from either direction could not leave it without passing over the line of road, or jumping from the embankment into a deep ditch. No evidence was introduced by appellee to sustain this allegation; but, on the contrary, the section foreman testified as follows: “The general coursé of the road is east and west. At the place where the road crosses the railroad track the track is on a curve, and is •one of the sharpest curves on the line, about 4 degrees. Just west of the crossing the track is on the east side of the public road, and from the crossing extending east is on the north side of the public road, and the public road going from McLean west makes a turn to the right in order to cross the track square instead of angling, and then turns to the left, continuing the course west.” He further testifies: “The track at this place is on a 5-foot fill, and the approach to the track on either side is graded up by a gentle slope, and the slope is about 60 feet on each side, and the public roadway is about 18 feet wide. The embankment for the roadway slopes down from the edge to the level ground. I constructed this road crossing, and it is built in the usual and ordinary manner, and was in good condition, and easily crossed by wagons, vehicles, or animals.” He further testified: “There are some holes or barrow pits along the railroad track; but these barrow pits do not interfere with crossing the track in any manner. The grade for the public road, where it crosses the track, is across these barrow pits, and they are back from the track 25 or 30 feet. The place where the animal approached the railroad track was on the grade, and there was no necessity for the animal getting into a hole or a ditch of •any kind, and, if it had not been struck, it would have gotten right on across the track on this grade on fairly level and smooth ground.”

It appears from this evidence that the accident did not occur by reason of any defect in the construction of the crossing, and that the engineer and fireman were performing their duties under the law in keeping such lookout as was required of them; that the mule, in an effort to cross the track, and keep up with the horse, which crossed immediately ahead of it, ran into the engine, resulting in its death. Under this evidence it is clear that the employes had no time to stop the engine or signal in any way which could have prevented the accident. As we understand the law, the railroad company is not responsible for the damages under such circumstances. S. K. Ry. Co. v. Graham, 155 S. W. 653; T. & P. Ry. Co. v. Bailey, 150 S. W. 962; St. L. S. W. Ry. Co. v. Conley, 142 S. W. 36; H. E. & W. T. Ry. Co. v. Foster, 142 S. W. 846; I. & G. N. Ry. Co. v. Mattews Bros., 158 S. W. 1048; M., K. & T. Ry. Co. v. Baker, 99 Tex. 452, 90 S. W. 869.

The burden was upon appellee, not only to show negligence on the part of appellant, but that such negligence, if any, was the proximate cause of the injury. “This fact of causal connection between an alleged act or omission and an injury can no more be presumed than can the act or omission itself.” T. & P. Ry. Co. v. Shoemaker, 98 Tex. 456, 84 S. W. 1052.

The ease seems to have been fully developed, and, so far as the record shows, no eyewitnesses to the accident, other than the engineer and fireman, have been found.

Because the evidence is insufficient to authorize a recovery, the judgment is reversed and here rendered for the appellant.


author: MOURSUND, J.

text:
    CENTRAL BANK & TRUST CO. OF HOUSTON v. HILL et al.
    (Court of Civil Appeals of Texas. San Antonio.
    Nov. 5, 1913.
    Rehearing Denied Nov. 26, 1913.)
    1. Principal and’Surety (§ 125) —Existence oe Relation.
    One who indorsed his name on the back of a note before delivery intending to become a surety thereon, as the payee knew, was a surety within Rev. Civ. St. 1911, arts. 6329, 6330, entitling a surety to require the creditor to sue on a contract for payment of money when the right of action accrues, and discharging the surety if suit be not brought to the first or second term of court thereafter.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 312-328; Dec. Dig. § 125.]
    2. Bills and Notes (§ 422) — Principal and Surety (§ 123*) — Waiver oe Protest.
    A provision of a note that each surety and indorser waives notice, protest, and presentation for payment fixed the liability of a surety or indorser upon nonpayment without protest as effectually as a protest would have done.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1196-1208; Dec. Dig. § 422 ; Principal and Surety, Cent. Dig. §§ 304-311; Dec. Dig. § 123.]
    3. Principal and Surety (§ 126) — Notice oe Default — Rights oe Surety — Waiver.
    A provision in a note that each surety or indorser waived notice, protest, and presentation for payment would not deprive a surety of his right to compel the payee to bring suit upon the note when due, by notice under Rev. Civ. St. 1911, art. 6329, requiring him to sue within the time specified by article 6330.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 329-351; Dee. Dig. § 126.]
    4. Appeal and Error (§ 1010) — Findings oe Court — Conclusiveness.
    Where the case was left to the trial judge under an agreement that he should instruct a' verdict, the appellate court must find the facts to uphold the judgment, if there is any evidence to support such a finding, even though it might itself have decided the facts otherwise.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3979-3982, 4024; Dec. Dig. § 1010.]
    5. Principal and Surety (§ 126) — Discharge oe Surety — Failure to Bring Suit.
    If the principal obligor is actually or notoriously insolvent, it is not necessary to bring suit to the first or second term of court after notice by a surety requiring suit to be brought, given pursuant to Rev. Civ. St. 1911, arts. 6329 and 6330, in order to fix the liability of an indorser; nor is it necessary to fix liability by protest.
    [Ed. Note. — Eor other cases, see Principal and Surety, Cent. Dig. §§ 329-351; Dec. Dig. § 126.]
    6. Principal and Surety (§ 126) — Discharge op Surety — Request to Bring Suit — Failure to Make Request — Insolvency op Principal.
    Rev. Civ. St. 1911, art. 6336, provides that no surety shall be sued unless joined with his principal or judgment is previously rendered against the principal, except as provided by article 1843, 'which permits the surety to be sued without suit against the maker or principal obligor when a nonresident. Article 6329 provides that when the right of action has accrued a surety may require by written notice the creditor or obligee to forthwith sue upon the contract, and article 6330 provides that, if the creditor fail to sue at the first or second subsequent terms of court, the surety giving such notice shall be discharged from liability. Held that, even though the maker was insolvent, a surety on a note, who gave notice under article 6329, was discharged unless suit was brought by the payee against all parties as to whom the relation of suretyship existed, unless suit was excused under article 1843.
    [Ed. Note. — Eor other cases, see Principal and Surety, Gent. Dig. §§ 329-351; Dec. Dig. § 126.]
    7. Principal and Surety (§ 104) — Discharge oe Surety — Extension otp Time oe Payment.
    An extension of time of payment of a note granted by the payee to its president, who was not himself a party, but who was alleged to be a comaker, was not binding upon the surety and principal so as ta discharge the surety, since either the surety or principal could have paid the note notwithstanding such agreement.
    [Ed. Note. — Eor other cases, see Principal and Surety, Cent. Dig. §§ 186-190, 193-195, 197-199, 200; Dee. Dig. § 104.]
    8. Evidence (§ 215) — Actions — Admission op Evidence.
    In an action on a note, a letter from the president of the payee to one claiming to be a surety was admissible to show the payee’s knowledge, through such president, that the surety was a mere surety and not a principal.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 754-759; Dec. Dig. § 215.]
    Error from District Court, Harris County; Norman G. Kittrell, Judge.
    Action by the Central Bank & Trust Company of Houston, Tex., against J. H. Hill and A. E. Masterson. judgment for defendant last named, and plaintiff brings error.
    Affirmed.
    C. R. Wharton and T. H. Botts, both of Houston, for plaintiff in error. Presley K. Ewing and A. R. Masterson, both of Houston, and Masterson & Rucks, of Angleton, for defendant in error.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

      For other eases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   MOURSUND, J.

Plaintiff in error sued J. H. Hill and A. E. Masterson as makers of a promissory note for $6,000, dated December 23, 1909, due 90 days after date, payable to the order of plaintiff in error. It was alleged that Masterson, before the delivery of the note, indorsed his name across the back thereof, obligating and binding himself to pay the note according to its terms ' and effect, and that the note was the joint and several obligation of both defendants.

Hill answered formally, and Masterson answered, in substance: That after Hill had executed the note sued on to the order of plaintiff, which he did at the special instance and request of Pye, its president, then actively engaged as such in representing it, defendant, being thereunto requested, indorsed said note without any consideration whatever, and as an accommodation party only for the purpose of accommodating by loan of his credit, such note to be provided for and paid at its maturity independent of him, and he was in fact merely surety for its payment, as agreed between him and the principals thereof, of all which plaintiff had due notice before said note was delivered or accepted by it, and afterwards, and consented thereto. That when plaintiff’s right of action on the note accrued, Masterson re-, quired it by notice in writing forthwith to institute suit upon said note, but plaintiff, though not under legal disability, failed to bring suit thereon to the first term of court thereafter, or even to the second. That by the terms of the note Hill was the maker thereof as to Masterson, but Pye, though not a party to the note, was also a principal as to Masterson, whom plaintiff knew to be a surety only as to both of said parties; yet notwithstanding such knowledge, after the note matured, plaintiff agreed with Pye, without Masterson’s consent, to grant, and did grant, a definite extension of 30 days for its payment under Pye’s assurance that he would pay the same in that time, or such a matter, which extension was for a valuable consideration, plaintiff securing an interest-bearing investment for that length of time, and Pye obtaining forbearance for such time. That by reason of such fact Masterson was discharged.

By supplemental petition plaintiff demurred to Masterson’s answer and pleaded: that Masterson was a joint maker of the note; that the note contained the following recital: “Each maker, surety and indorser hereon hereby waives grace, notice, protest and presentation for payment.” That if Pye had notice of the matters alleged in Masterson’s answer, his interest was adverse to that of the bank, and notice to him was not notice to the bank, nor did his acts bind the bank, and the matters pleaded as having been said and done by him were not such as he could lawfully do as president or representative of the bank, but were done to further his own interests and against the interest of the bank. That the effort to show that Pye was an undisclosed principal or maker of the note was an attempt to vary the terms of the note.

After the evidence was concluded, the following agreement was made in open court between the attorneys: “The attorneys for the plaintiff, the Central Bank & Trust Company of Houston, Tex., and the attorneys for the defendant A. E. Masterson, in open court agree that, upon the evidencé adduced, the court should give a peremptory instruction on the issues between plaintiff and such defendant; the attorneys for the former claiming that the peremptory instruction should be in its favor, and the attorneys for the latter claiming that the peremptory instruction should be in his favor.” The court instructed a verdict against Hill, and under said agreement instructed a verdict for Mas-terson in the following language: “The court is of opinion as it views the evidence that the law is for the defendant A. E. Master-son ; therefore, you, the jury, are instructed to return a verdict in his favor.” A verdict being returned in accordance with the instructions, judgment was entered thereon, from which the plaintiff appealed.

The first contention made by appellant is that the waiver contained in the note and hereinbefore set out included a waiver to have suit filed at the first or second term of court after the maturity of the note, and therefore Masterson was not released by plaintiff’s failure to bring suit when requested so to do.

Article 579 of the Eevised Statutes of 1911 reads as follows: “The holder of any bill of exchange or promissory note, assignable or negotiable by law, may secure and fix the liability of any drawer or indorser of such bill of exchange, and every indorser of such promissory note, without protest or notice, by instituting suit against the acceptor of such bill of exchange, or against the maker of such promissory note, before the first term of the district or county court to which suit can be brought, after the right of action shall accrue; or by instituting suit before the second term of said court, after the right of action shall accrue, and showing good cause why suit was not instituted before the first term next after the right of action accrued.”

From the title “Principal and Surety” we copy the following articles:

“Art. 6329. Any person bound as surety upon any contract for the payment of money or the performance of any act, when the right of action has accrued, may require, by notice in writing, the creditor or obligee forthwith to institute suit upon such contract.
“Art. 6330. If the creditor or obligee, not heing under legal disability, shall fail to bring his suit to the first term of court thereafter, or to the second term, showing good cause why he did not bring, it to the first term and prosecute the same to judgment and execution, the surety giving such notice shall be discharged from all liability thereon.”
“Art. 6337. The remedy provided for sureties by this title extends to indorsers, guarantors, drawers of bills which have been accepted, and every other suretyship, whether created by express contract, or by the operation of law.”

Masterson indorsed his name across the back of the note, intending to assume the obligation of surety, of which fact plaintiff bank had notice through its president. Mas-terson was therefore a surety within the meaning of the articles above copied. Williams v. Ogg & Keith Lumber Co., 42 Tex. Civ. App. 562, 94 S. W. 420. He made written request for suit to be brought as provided by article 6329. It is, however, contended that by reason of the waiver contained in the note he waived the bringing of suit, and cannot complain because suit was not brought at the first or second term of court; and in fact not until over a year after the maturity of the note.

The waiver in question does not authorize any extension of the note, but merely provides that grace, protest, notice, and presentation for payment is waived. Such a waiver fixes the liability of a surety or in-dorser as fully as the act of protest would have done. Leeds v. Hamilton, 35 S. W. 78; Bank v. Bonner, 27 S. W. 698.

If the holder neglects to protest negotiable paper, he may still fix the liability of the parties by bringing suit under article 579. This article and article 590, which provides for fixing liability by protest and notice according to the law merchant, were originally enacted by act of March 20, 1848 (Gammel’s Laws, vol. 3, p. 187). The caption shows it to be an act purporting merely to prescribe the mode of establishing and fixing the liabilities of drawers and indorsers of bills of exchange and promissory notes. On February 5, 1858 (Laws 1858, c. 92), an act was approved which embraced most of the provisions now contained in the title relating to principal and surety, but the fourteenth section thereof read as follows: “Any person bound as surety upon any contract for the payment money, or the performance of any act otherwise than by a bill of exchange or promissory note assignable or negotiable by law, when the right of action has accrued, may require, by notice in writing, the creditor or obligee forthwith to institute a suit upon the contract.” Said section differed from article 6329 in that it contained the words “otherwise than by a bill of exchange or promissory note assignable or negotiable by law.” It cannot be doubted that this act was passed for the purpose of giving a right to parties secondarily liable on contracts, and that it has no connection with the statutes which give the holder the right to fix liability either by suit or by protest. If liability is fixed by suit, there is no necessity for invoking the statute by which suit can be required; but, if liability be fixed by protest, it may be advisable for the surety to require suit to be brought. The statute was designed for the purpose of giving the surety a right he did not have at common law, namely, to require suit to be brought at once by the bolder of the note, and thus protect himself in the event bis liability was fixed by protest instead of by suit. By executing the waiver contained in the note, Masterson placed himself in the same attitude as be would have been bad the note been protested, and did not deprive himself of any rights be would have bad if it bad been protested. TBe waiver dispenses with certain steps by which liability may be fixed, and places Masterson in no worse attitude than if be bad signed a note without such clause and the steps bad been duly taken. We therefore conclude that Mas-terson was not deprived by said waiver of any rights be bad under articles 6329 and 6330.

It is, however, contended that Hill was insolvent when the note became due and remained insolvent up to the time of the trial, and therefore it was unnecessary for appellant to bring suit; pursuant to Masterson’s request.

The evidence is conflicting as to whether Hill was solvent when the note matured, and, as the case was left to the judge under the agreement that be should instruct a verdict, we are required to find the facts to uphold his judgment where there is any evidence to justify such course, even though as an original proposition we would have decided otherwise, and we accordingly find that Hill was solvent at the time the note matured and Masterson made his request for suit to be brought. But had Hill been insolvent, we do not agree with appellant in their conclusion of law that such fact would excuse the failure to file suit pursuant to request.

True, it is well established that, when the principal obligor is actually notoriously insolvent, it is not necessary to bring suit to the first or second term to fix the liability of an indorser, and it is also held that, as it is not necessary to bring suit, it is also not necessary to fix liability by protest. Insall v. Robson, 16 Tex. 130; Burrow v. Zapp, 69 Tex. 476, 6 S. W. 783; Norton v. Wochler, 31 Tex. Civ. App. 525, 72 S. W. 1025; Bank v. De Morse, 26 S. W. 419; Smith v. Lumber Co., 47 S. W. 386. In the case of Insall v. Robson, 16 Tex. 130, Judge Wheeler based his holding upon section 6 of the Act of January 25, 1840 (Laws 1839-40, p. 146), which section provided that the assignor and indorser could be sued without the necessity of previously suing the drawer, maker, or obli-gor, when he may reside beyond the limits of the republic, or in such part of same that he cannot be reached by the ordinary process of the law or when he may be notoriously insolvent In view of the provision it was held that, if the principal obligor need not be sued at all, it was unnecessary to sue him to the first or second term of court.

Later cases base their holdings upon articles 1843 and 1897 (Statutes of 1911). It will be noticed that the suit which is required to be brought to fix liability under article 579 must be against the acceptor of the bill of exchange or maker of a promissory note, and, as article 1843 provides that in certain cases the principal obligor need not be sued at all, the courts have held that such article has the effect of ingrafting an exception upon article 579 to the effect that, when one of the contingencies mentioned in article 1843 arises, the liability of the parties to the holder becomes absolute.

Article 6336 provides: “No surety shall be sued, unless his principal is joined with him,, or unless a judgment has been previously-rendered against the principal, except in the cases provided for in article 1843.” The word “surety” is defined in article 6337, hereinbefore copied. Article 6336 was not a part of the act of February 5, 1858, but was subsequently enacted, doubtless for the purpose of removing any question whether it was necessary to sue the principal obligor in all cases when request was made as provided by article 6329. We therefore conclude that, even when request is made, it is not necessary that the principal obligor be sued if he comes within the exceptions enumerated in article 1843. But it evidently was not intended by article 6336 to provide that no suit on the contract need be brought if request be made under article 6329. Had such been the intention of the Legislature, it could have been expressed clearly in very few words. It merely provided in view of article 6329, which required suit on the contract to be brought, if request be made, that even in complying with such request it was unnecessary to sue the principal obligor if he came within the exceptions pointed out in article 1843. It did not provide any exceptions to the rule requiring suit to be brought on the contract, but recognized the applicability of a rule of law then existing which created exceptions under which the principal obligor need not be made a party to the suit upon the contract. We have no authority to add to or take from the statute, and therefore hold that, when request is made under article 6329, suit must be brought upon the contract within the time stated in article 6330, or else the surety making the,request is discharged of liability to the holder. Such suit must be against all parties to whom the person making request stands in the attitude of surety under the statute, unless suit against them be excused under article 1843. Thus the issues which must be decided when the principal is not sued will be determined at a time when the surety can readily procure evidence on the question of the principal’s solvency. In this case no suit was brought until over a year after the note matured and request was made, and therefore Masterson was discharged.

The judgment must therefore be affirmed, regardless of the other assignments of error,. as none of them have any bearing upon tbe issue above disposed of.

We are of tbe opinion that tbe judgment of tbe court cannot be sustained upon tbe additional ground that an extension was granted Pye, who was not a party to tbe note. Such extension was not binding upon Masterson and Hill, either of whom bad tbe right to pay oil tbe note notwithstanding tbe agreement with Pye. Benson v. Phipps, 87 Tex. 578, 29 S. W. 1061, 47 Am. St. Rep. 128; Red River Bank v. Bray (Sup.) 148 S. W. 291; Houston v. Braden, 37 S. W. 467.

Tbe remaining assignments relate to questions of pleading and evidence on tbe issue of extension of tbe note, but there is no merit in tbe fourth and fifth, and tbe sixth will not be considered. Tbe third paragraph of tbe petition contains no allegation that Masterson indorsed tbe note for the benefit of Pye, but- merely that Pye requested him to indorse it for Hill, and thereby tbe plaintiff bad notice that Masterson was a mere surety. Tbe letter from Pye to Mas-terson was admissible to show the knowledge of plaintiff, through Pye, of tbe fact that Masterson was a mere surety. The sixth assignment relates to a paragraph of the pleading not copied in the assignment or statement, and not susceptible of being identified by the number of the paragraph, because paragraph 5 as copied in the transcript relates to other matters, nor can it be identified by the quoted words contained therein which we do not find anywhere in the answer.

The judgment is affirmed.


text:
    COWBOY STATE BANK & TRUST CO. v. GUINN et al.
    (Court of Civil Appeals of Texas. Amarillo.
    Nov. 15, 1913.)
    1. Corporations (§ 121) — Transfer of Stock — Actions—Allegations of Answer —Parties to Contract.
    The answer in an action on a note, defended on the ground that the note was given for bank stock which was sold under false representations that the purchaser would at once become a stockholder and that the stock would pay certain dividends, etc., alleging that the seher, who was plaintiff’s president, “represented to J. O. G., defendant herein, who was to become a stockholder, that by securing his note with the signature of J. A. G. herein he could become a stockholder in the bank without paying cash for the stock as required by law,” sufficiently alleged, in the absence of a special exception, that the stock was purchased by J. O. G. alone.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 504, 505; Dec. Dig. § 121.]
    2. Corporations (§ 116) — Failure of Consideration.
    If stock was sold transferable to the purchaser only upon payment of his note, the refusal to deliver the stock would not constitute a failure of consideration of the note unless the seller had received payment of the note.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 493, 494, 496; Dee. Dig. § 116.]
    3. Bills and Notes (§ 494) — Actions—Burden of Proof —Affirmative Defenses — Fraud.
    In an action upon a note defended on the ground that it was given for bank stock purchased under false representations, the. burden was upon defendant to show the falsity of the alleged representations.
    [Ed. Note. — For other cases, see Bills and Notes, Dec. Dig. § 494.]
    4. Banks and Banking (§ 114) — Acts of Officers — Liability of Corporation.
    The rule that a corporation, by accepting the benefit of the acts of its agent, also adopts the means by which he procures such benefit, though it had no knowledge thereof, would not apply to make a bank liable for false representations by its president in selling certain stock if the stock was then owned by him individually and not held by him for the bank.
    [Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 277-280; Dec. Dig. § 114.]
    Appeal from District Court, Fisher County; John B. Thomas, Judge.
    Action by the Cowboy State Bank & Trust Company against J. O. and J. A. Guinn. From a judgment for defendants, plaintiff appeals.
    Reversed and remanded.
    Harry Tom King, of Abilene, John W. Woods, of Rotan, and W. Boyce, of Amarillo, for appellant. Higgins & Hamilton, of Snyder, and L. H. McCrea, of Roby, for appel-lees.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   HALL, J.

This is a suit instituted by appellant against appellees in the district court, of Fisher county, upon a promissory note, payable to appellant, dated December 17, 1911, payable March 17, 1912, bearing interest at the rate of 10 per cent, per annum-from maturity, with the usual stipulation for-10 per cent, attorneys’ fees. The appellees-answered by general and special demurrers, general denial, and pleaded failure of consideration. They further allege that Arlon. B. Davis, the president of appellant corporation, fraudulently represented to them that the capital stock of appellant bank had been paying and would continue to pay semiannual dividends of 12 per cent, or 24 per cent, per .annum, and that said bank, whose stock the defendants were purchasing and for which the note sued upon was given, would loan defendants $2,000 with which to pay for 20 shares, and that said loan would be made at the rate of 10 per cent per annum and would be renewed from time to time, as long as defendants wanted it, without further security, and that, if no dividends were withdrawn by defendants as they accrued, the dividends on the stock would pay for the-stock in four years and five months without further cost to defendants. That relying-upon such representations they executed the original note on about the 17th day of August, 1910, of which the note sued upon is a renewal. It is further alleged that the said Davis represented to appellees that, at the moment they executed and delivered the first note, they would become stockholders in the bank, and their names would be entered on the register of the bank and be preserved in the vault for safe-keeping, and that it would not be necessary to issue stock as defendants would be stockholders by reason of their names being on the register. Appellees allege that they were not acquainted with business transactions in connection with corporations or any other business than farming and did not know that it was necessary that they have stock certificates as evidence of their purchase and did not know that they would receive no consideration whatever for the note they executed. They further allege that they had never received any certificates of stock and that on or about the 17th day of February, 1911, they executed a renewal note for the original note and interest in advance for six months and demanded their 12 per cent, dividend on the stock (as represented by plaintiff’s agent would be due them), with which to pay interest on said notes, but were told by said Davis that the bank would declare a dividend a little later on, and that defendants would be notified thereof, but that no dividends were declared in favor of defendants and that they have never been stockholders. It is alleged that the officers of the bank had actual and constructive knowledge of the fact that said false' and fraudulent representations were made by the said Davis and also that no consideration was ever paid to defendants or either of them for the execution of the note herein sued upon, nor any of the renewals thereof, and had notice that they were given for stock which was never received by defendants, and that no consideration was ever paid or promised to be paid plaintiff herein by said Davis to defendants, other than the promise of stock, and that plaintiff bank is not a bona fide purchaser for value of said note; that all the notes executed by defendant were directly to the bank and not to Davis, and that the bank made the renewals thereof until defendants demanded their stock, and that the bank could not deliver the stock to the defendants, and that the said Davis neither for himself nor for the bank could deliver such stock. Plaintiff, by supplemental petition, filed general and special demurrers to the answer, denied generally and specially all matters pleaded by the defendants except as to the execution of the original note and the renewal thereof and except as to facts admitted in the supplemental pleading. The supplemental petition alleged that the plaintiff was the holder for value of the note sued on without notice of any of the defensive matter pleaded by defendants; that if Davis made any fraudulent representations as alleged, or entered into any such agreement as is set out by defendants, Davis was acting for himself in such matters and not for plaintiffs, and that he had no authority to act for plaintiffs in the sale of the stock, for at that time plaintiff had no capital stock for sale. There was a peremptory instruction in favor of appellees.

Appellant insists, under its first assignment of error, that the court erred in instructing a verdict for appellees and should have instructed one for appellant for the reason that the appellees in their pleadings allege that they and each of them entered into a contract with the bank for the purchase of the stock when the undisputed evidence disclosed that the consideration of the original note and its renewals was the purchase price of certain stock bought by only one of the defendants, J. O. Guinn. This assignment must be overruled.

Appellee’s answer does not raise the issue by allegations as clear and certain as it might have done, but the answer was not specially excepted to upon that ground. They do allege that Davis “represented to J. O. Guinn, defendant herein, who was to become a stockholder, that, by securing his note with the signature of J. A. Guinn, herein he could become a stockholder in the bank without paying cash for the stock as required by law.” The answer was framed with the evident purpose of alleging contracts under the terms of which J. O. Guinn individually, as well as J. O. Guinn, joined by his brother, J. A. Guinn, became the purchasers of the stock and was drawn for the purpose of admitting proof of either state of facts. The pleader further alleges facts upon which a contract for the sale of stock owned either by Davis or by the bank might be proven. A perusal of the testimony of Davis and of appellees shows that the jury might have found a sale to either J. O. Guinn or to ap-pellees jointly. Since the case must be reversed and remanded for another trial, it is not proper for us to further discuss the effect of the evidence introduced and bearing upon this issue. We shall not attempt to discuss the assignments in the order in which they are presented in the briefs. We are not informed by the record upon what theory of the case the court instructed the jury to return a verdict for appellees. It is true that appellees had never received any certificates of stock in consideration for their note, but in this connection we call attention to the letter of August 25, 1910, written by Davis to J. O. Guinn, and witnessed by W. L. Foy and J. A. Guinn, which is as follows: “This is to certify that I have sold you 20 shares of my stock in the Cowboy State Bank & Trust Company, transferable to you or your order upon the payment of your note of August 17th, for $2,352, to said bank, and maturing February 17, 1911, or any renewal or substitution thereof.”

If this letter expresses the agreement of the parties and is not to be modified by the contemporaneous parol understanding contended for by appellees, to tbe effect that they should at once become stockholders and be entitled to the dividends due upon the stock, if any such agreement was made, then the refusal to deliver the stock did not constitute a failure of consideration for the note until the bank had received the amount thereof, and this is an issue which should have been submitted to the jury. If the court instructed the jury upon the theory that the note given for the stock was in violation of article 12, § 7, of the state Constitution, there was error in such instruction because, if, as contended by Davis, the stock belonged to him instead of to the bank, the note was not void. Appellees contend that because the note was given to the bank, and by reason of other evidence appearing in the record, which we shall not discuss, the note was absolutely void, and cite McCarthy v. Texas Loan & Guaranty Co., 142 S. W. 96, and Mason v. First National Bank of Paint Rock, 156 S. W. 366. It appears from the record that the ownership of stock, whether in Davis or in the bank, was a sharply contested issue, and the evidence bearing upon it was sufficient to require the court to submit it to the jury.

If the court gave the peremptory instruction upon the theory that the fraudulent representations alleged to have been made by Davis, to the effect that the stock had been accumulating profits, and that dividends had theretofore been declared thereon to the-extent of 24 per cent, per annum, and that appellees would become stockholders immediately, and that such dividends would be applied ta the payment of their stock, the court was not warranted in giving such instruction because the burden rested upon ap-pellees to show the falsity of the alleged representations made by Davis, and we find, no evidence in the record tending to prove that the stock had not been earning 24 per cent, per annum. Appellant contends that it was not a party to the contract between Davis and the appellees for the sale of the stock and was in fact an innocent purchaser for value of the note sued upon or of the one of which it is a renewal. It is undisputed that Davis was the president of the bank; that Foy was the cashier of the bank at the time the contract was entered into' and was present when the contract was made. It is further shown that immediately upon the execution of the note Davis delivered the same to Foy, with instructions to credit his (Davis’) account with $2,000 and make the proper entry on the note account of the bank. It further appears that Foy was made the custodian of the 20 shares of stock which appellees -were afterwards to acquire, and Davis himself testified that he had discussed the transaction both before and after the execution of the contract with Foy and the directors.

In First National Bank of Mason v. Ledbetter, 34 S. W. 1042, it is said: “The cashier of a national bank is the executive officer of the bank, and his acts, done in the ordinary course of business, bind the bank, and notice to him is notice to the bank.”

In American National Bank v. Cruger, 91 Tex. 446, 44 S. W. 278, Denman, Justice, says: “The legal proposition relied upon is stated in Paley’s Prin. & Ag. 324, thus: ‘Contracts made for the benefit of another but with his privity or direction may be rejected or affirmed, at his election. But by making the election to affirm it he adopts the agency altogether, as well that which is detrimental as that which is for his benefit. But, in seeking to enforce contracts entered into by agents, the principal is subject to have them impeached by any conduct of his agent which would have had that effect if proceeding from himself. Every species of fraud, misrepresentation, or concealment therefor, in the agent, affects the principal’s right to recover.’ Under the principle here announced, if Hunter and Miss Lottie Cruger, without authority for the bank, undertook in its behalf to secure the shortage by procuring the note of P. B. Cruger and Miss Fannie Cruger, the acceptance pi the note by the bank with the knowledge that they had thus assumed to act for it would be a ratification or adoption of every assumed agency, and the bank would be chargeable with the fraudulent representations made by them to Miss Fannie Cruger to the same extent as if they had been in fact its agents at the time of making such representations. This is upon the plain proposition that the subsequent ratification or adoption would relate back so as to make them agénts to the same extent as if they had been previously appointed.” Judge Denman, after discussing the facts, uses this further language: “Thompson, in his Commentaries on Corporations (sect. 6324), after quoting with approval the above language from Paley on Principal and Agent, recognized the distinction we have above made in the following language: ‘It is submitted, however, that this principle, properly understood, is not that a person or corporation cannot retain an advantage secured by the -fraud of * * * its agent; that is, by the fraud of one who has acted for it with whom it is in privity, or whose unauthorized acts, done for its benefit, it has adopted. There must be a relation of agency, arising either out of antecedent authorization or subsequent adoption, or at least a privity between the wrongdoer and the person or corporation receiving the benefit. Such a privity may arise by relation or by an adoption by the corporation of the act of the person who has thus acted for it, provided the corporation have knowledge of the means by which he secured the contract, where the person so acting for it was, when he so acted, a stranger to it. But if the person so acting was, when he so acted, the agent of the corporation, the corporation, by accepting the benefit of his act, adopts also the means by which lie procured it, although it may have had no knowledge as to what these means were.” Allen v. Garrison, 92 Tex. 122, 50 S. W. 335; City National Bank v. Martin, 70 Tex. 643, 8 S. W. 507, 8 Am. St. Rep. 632.

This' rule, however does not apply if the stock was owned by Davis and not by the bank, but the rule announced in the case of Reeves v. McCracken, 103 Tex. 416, 128 S. W. 895, would control, since it was not shown that Poy was a party to the alleged misrepresentations of Davis. If, however, as intimated in Davis’ letter of February 24, 1912, the stock was only held in his name for prudential reasons, and the jury should so conclude, then the principles announced in Bank v. Cruger, supra, should govern in the disposition of the case.

The judgment is reversed, and the cause remanded.