author: DUNKLIN, J.

text:
    TEXAS & P. RY. CO. v. MISSOURI IRON & METAL CO.
    (No. 8197.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    May 22, 1915.)
    1.Tkial <@=207 — Instruction—Necessity.
    in an action by a shipper of goods against -a railway for misdelivery to C., alleged by defendant to have been the consignee’s partner, where the consignee was the road’s only witness to show the partnership, while several witnesses testified to denials by the consignee -of the existence of the partnership, in view of the fact that plaintiff offered no direct evidence to show that C. was not in fact a partner, .and of such consignee’s testimony that he was a partner, rendering the witness liable for the goods, the court should have instructed that the plaintiff’s evidence as to the nonexistence of the partnership could be considered only as affecting the credibility of the consignee’s testimony, although the jury understood, in a general way, that the testimony was offered only for impeachment from a written agreement to that effect entered into between counsel at the time of its admission.
    (Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 498, 499, 501; Dec. Dig. <@=207.]
    2. Trial <@=i 253 — Instruction Excluding Testimony.
    In an action against a carrier of goods for misdelivery, a requested instruction that evidence of the shipper’s witnesses to denials by the consignee of the existence of a partnership between the consignee and him who received the delivery could not be considered “for the purpose of deciding whether or not the one receiving delivery was a partner of the consignee doing business under the firm name of D. Company” was not improper, as totally excluding consideration of such testimony, as the jury could only have understood it as an explanation of previous language jn the instruction that they should consider the testimony solely for purposes of impeachment ,of the consignee testifying to the partnership.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 613-623; Dec. Dig. <@=5253.]
    3. Partnership <@=218 — Carriage of Goods —Misdelivery—Question for Jury.
    In an action against a carrier for misde-livery, the question whether the person to whom delivery was made was a partner of the consignee held for the jury, under the evidence.
    [Ed. Note. — For other cases, see Partnership, Cent. Dig. §§ 49, 426-428; Dec. Dig. <@=218.]
    Appeal from Tarrant County Court; Chas. T. Prewitt, Judge.
    Action by the Missouri Iron & Metal Company against the Texas & Pacific Railway Company. Judgment for plaintiff, and defendant appeals.
    Reversed, and cause remanded.
    Thompson & Barwise and Geo. Thompson, Jr., all of Ft. Worth, for appellant. Slay & Simon, of Ft. Worth, for appellee.
   DUNKLIN, J.

The Texas & Pacific Railway Company has appealed from a judgment against it in favor of the Missouri Iron & Metal Company for the value of 17 bundles of old automobile tires shipped from Ft. Worth by plaintiff Missouri Iron & Metal Company to Dallas over the Texas & Pacific Railway, and consigned to the Double Strength Relining Company upon an open bill of lading. The property was transported to Dallas and there delivered by the railway company to one R. H. Capperton, who receipted for the same, signing his name as “R. H. Capperton, Manager.”

The evidence shows without controversy that S. J. Murray was engaged in the business, under the name of consignee, of manufacturing reiiners out of old automobile tires. He testified upon the trial that the Double Strength Relining Company, the consignee named in the bill of lading, was a partnership composed of himself and R. H. Capper-ton. The evidence further shows that, after Capperton received the shipment, he left the county without accounting to Murray or any one else therefor; that soon after Murray published in a newspaper printed in Dallas a notice that the partnership theretofore existing between him and Capperton and doing business under the firm name of Double Strength Relining Company was dissolved.

The principal defense urged by the railway company consisted of allegations of such partnership between Murray and Cap-perton and of the fact that the delivery of the property to Capperton, as one of the' members of that firm, was a lawful delivery to the consignee designated by the plaintiff when the goods were shipped from Et Worth. The plaintiff introduced several witnesses who testified to statements made by Murray after Capperton had received the shipment and left, the county, in effect, that Capperton was not interested in the business as a partner; that he was merely a solicitor for the concern; and that he had no authority from the consignee to receive the shipment.

An assignment of error is addressed to the refusal of a special instruction requested by the defendant that the testimony last referred to could not be considered for any purpose, except as affecting the credibility of the witness Murray. There appears in the record a written agreement between counsel for both parties that, at the time the testimony referred to in the instruction was introduced in evidence, “it was admitted by the court for the sole purpose of impeachment and affecting the credibility of the witness S. J. Murray.” Appellee insists that, in view of this showing, the error, if any, in refusing the requested instruction, would not be cause for reversal, since, under the circumstances mentioned, it is not probable that the jury considered it for any purpose, except that for which it was admitted.

The issue of whether or not Capperton was a partner with Murray in the business was a vital one. Murray was the only witness offered by the defendant to establish such partnership, while several witnesses were introduced by the plaintiff who testified as indicated already. Even though it should be presumed that the jury understood in a general way the purpose for which the testimony was admitted,, yet in view of the fact that plaintiff offered no direct evidence to show Capperton was not in fact a partner with Murray, and Murray’s testimony that Capperton was a partner, thus admitting his liability to the plaintiff for the value of the property, we are of the opinion that the court erred in refusing the requested instruction.

We are also of the opinion that the further language contained in the requested instruction that such testimony could not be considered “for the purpose of deciding whether or not R. H. Capperton was a partner of S. J. Murray, doing business under the firm name of Double Strength Relining Company,” is not subject to the criticism suggested by the appellee that it, in effect, would exclude the consideration of such testimony altogether. We believe that the language just quoted could not have been understood by the jury in any other sense than as an explanation of previous language used in the instruction, to the effect that such testimony could be considered solely for the purpose of affecting the credibility of the witness S. J. Murray.

As it was shown without controversy that Capperton received and converted the shipment, as the defendant based its claim upon Capperton’s authority from the consignee to receive the shipment solely upon an allegation that he was a member of the partnership firm doing business under the name of the consignee, as the only evidence offered by the appellant to support the allegation of such partnership was the testimony of Murray, and as the testimony of several of the witnesses introduced by the plaintiff tended strongly to discredit Murray as a witness, we overrule appellant’s further assignment addressed to the refusal by the court of a requested peremptory instruction in favor of the defendant.

For the error indicated, the judgment is reversed, and the cause remanded.
      <@=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes -


source: Caselaw Access Project

author: CONNER, C. J.

license: Public Domain

text:
    WOOTEN et al. v. DERMOTT TOWN-SITE CO. et al.
    (No. 8203.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    May 22, 1915.)
    1. Corporations <@=>435—Powers—Holding. Real Estate.
    Absent prohibition in statute or charter, a corporation can take and hold land, except as restricted by the objects of its creation and the limitations of its charter.
    [Ed. Note.—For other cases, see Corporations,. Cent.- Dig. §§ 1763-1771; Dec. Dig. <©=>435.J
    2. Specific Performance <@=>116%—Demur-rer—Matters not Appearing on Face of Pleading.
    Even if a railroad company cannot take a donation of land to hold for purely speculative purposes, its petition for specific performance of a contract for conveyance of land is not demurrable on that account, it not affirmatively showing that the land was not intended by it for the purpose of a town site or water reservoir or other use within the express grant of power made by Rev. St. 1911, arts. 5439-5441, 6537-6539.
    [Ed. Note.—For other cases, see Specific Performance, Cent. Dig. § 376; Dec. Dig. <§=>■ 116%.]
    3. Specific Performance <§=>6—Party Entitled.
    Specific performance of a contract, if available at all, is available alike to either party under the same circumstances; that is, to the one who has performed his part of it, the other-refusing to do so.
    [Ed. Note.—For other cases, see Specific Performance, Cent. Dig. §§ 9-11; Dec. Dig. <@=>6.]'
    4. Pleading <©=»214 — Demurrer — Admissions.
    On demurrer to a petition for specific performance, its allegation that plaintiff has fully-performed its part of it is to be taken as true.
    [Ed. Note.—For other cases, see Pleading, Cent. Dig. §§ 525-534; Dec. Dig. <SS=214.]

      5. CobpoRations @=>387 — Holding Land — Questioning Powers.
    Capacity of a corporation to take and hold land can be questioned only by the state, and so not by the individual defendant in an action by a corporation for specific performance of a contract to convey land to it.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1548-1553; Dec. Dig. @=3387.]
    6. Specific Performance @=3114^Contract —Certainty of Description.
    The description of the land in a contract sought to be specifically enforced is sufficient, where from it the tract ,ean be identified.
    [Ed. Note. — For other cases, see Specific Performance, Cent. Dig. §§ 356-370, 372; Dec. Dig. @=>114.]
    7. Specific Performance @=>116% — General Demurrer — Objections Reached.
    The petition for specific performance of a contract for conveyance of two tracts is not subject to general demurrer, because the description of one only of the tracts is insufficient.
    [Ed. Note. — For other cases, see Specific Performance, Cent. Dig. § 376; Dec. Dig. @=> 116%.]
    Appeal from District Court, Mitchell County; W. W. Beall, Judge.
    Action, by H. O. Wooten and another against the Dermott Town-Site Company and others. Judgment for defendants, and plaintiffs appeal.
    Reversed and remanded.
    Younge & Younge, and Roy all G. Smith, of Colorado, Tex., for appellants. Shepherd & Sandusky, of Colorado, Tex., and M. Carter, of Colorado, Tex., for appellees.
   CONNER, C. J.

H. O. Wooten and the Roscoe, Snyder & Pacific Railway Company sued L. E. Lassiter and R. H. Looney, doing business under the firm name of Dermott Town-Site Company, for the specific performance of a contract for the conveyance of land, and in the alternative for a judgment upon the bond given by the Dermott Town-Site Company in the sum of $2,000 to secure the performance of the contract. The defendants, among other pleas, urged a general demurrer to the plaintiffs’ petition, which, aft-ter a hearing, was sustained by the court, and, plaintiffs having declined to amend, the suit was dismissed. From the judgment of dismissal the plaintiffs have appealed, and assign error to the action of the court in sustaining the general demurrer.

The contract declared upon was attached as an exhibit to the plaintiffs’ petition, and provided, in substance, that the Dermott Town-Site Company would “donate” to the railway company “a strip of land along the right of way of said Roscoe, Snyder & Pacific Railway Company 2,000 feet long and sufficient in width to make 300' feet wide, including the present Roscoe, Snyder & Pacific Railway right of way 100 feet wide, said strip of land to be taken from each side of said road as the party of the first part may elect.” The contract further provided that the town-site company would “convey to H. O. Wooten 150 acres of land lying along the south side of the right of way of the Roscoe, Snyder & Pacific Railway above described and its east line extending along the east side of said section 808, which .is in block 97, Houston & Texas Central Railway Company survey to the south line of same, and said tract of land shall extend sufficiently far westward along the south line of said section and the south line of the above-said right of way to a sufficient distance to include 150 acres, the west line of said tract being parallel with the east line of said section.” It was alleged that the agreed conveyance to H. O. Wooten was for the benefit and use of the railway company, and that the section of land intended to be designated was section 399, instead of section 398, as mistakenly entered. The contract recited that the town-site company held the section of which the above-described 150 acres was a part subject to a lien in favor of one John W. Mooar for purchase money, and it was provided that to secure the performance of the agreement to convey to the said H. O. Wooten said 150 acres of land the town-site company would execute a bond in the sum of $2,000. In consideration of all which the railway company agreed to construct sidings and such switches as should he necessary to transact its business for the accommodation of the traffic of the town site and adjacent country, and to erect and construct suitable stock pens and a depot building at a point on the line of said railway adjacent to the town site of Dermott, and at a point to be mutually agreed upon by the parties. The bond provided for in the contract was executed by the town-site company simultaneously with the execution of the contract. The bond was made payable to H. O. Wooten in the sum of $2,000 conditioned upon the discharge of the said lien in favor of Mooar within a period of two years from the date of the bond. It was alleged that the railway company had performed its part of the contract by locating its switches, stock pens, and depot at the designated point adjacent to the Dermott town site, and the plaintiffs prayed for a correction of the contract and for a specific performance.

It was further alleged, with a view of obtaining alternative relief, that in fact at the time of the making of the contract the Der-mott Town-site Company did not own the land it had so contracted to convey to the plaintiffs, hut that, ou the contrary, the title was in said John W. Mooar, who had contracted to sell the section of land named, together with several other sections, to the town-site company, and, pursuant to the terms of the contract between those parties, the said John W. Mooar had deposited a deed in escrow, but that, the town-site company having failed to perform the conditions of the sale, the deed was never delivered, but, on the contrary, was withdrawn by the said John W. Mooar, and the contract under which the town-site company claimed entirely canceled. Wherefore it was alleged that the town-site company now was wholly unable to perform the contract to convey the lands to the plaintiffs, and the prayer was that, should the facts be so found, the plaintiffs have judgment upon the bond against the defendants for their damages. There were numerous other allegations, but we think such as are material to a disposition of the appeal have been substantially above stated.

The contention below and before this court in aid of the demurrer is that the contract in question manifests a purpose to convey to H. O. Wooten for the use and benefit of the railway company land for purely speculative purposes, and that under the laws of Texas a railway company may not lawfully hold or receive donations of real estate “unless the same is to aid in the construction and use of its railway, or else for the purpose of collecting some debt due such company,” citing in aid of the contention so stated the following authorities: Article 6537, 6538, Vernon’s Sayles’ Civil Stat.; Case v. Kelly, 133 U. S. 21, 10 Sup. Ct. 216, 33 L. Ed. 513; House of Mercy of N. Y. v. Davidson, 90 Tex. 529, 39 S. W. 924; Scott v. Bank, 66 S. W. 485.

Assuming, as we should perhaps do (Edwards Co. v. Jennings, 89 Tex. 618, 35 S. W. 1053), that if the contract is invalid, as appellees insist, there can be no recovery upon the bond, we will proceed to a determination of the proposition presented in the above contention, which it is conceded embodies the controlling question in the case.

We wish to observe, first, that in the case of Case v. Kelly, cited by appellee, the decree of the United States Supreme Court declaring a donation to a railway company invalid was predicated upon statutes of Wisconsin prohibiting such donations. And in the case of House of Mercy v. Davidson, supra, by the Supreme Court of this state, a donation to the appellant in that case, which was a corporation, was declared invalid upon the ground that the charter of the corporation prohibited its taking and -holding property beyond a certain value, and that at the time of the donation there under consideration the corporation already owned property of the prescribed value. What was said by Mr. Justice Key of the Austin Court of Appeals relating to the subject under consideration in the case of Scott v. Bank, 66 S. W. 485, was based upon limitations of the statutes relating to the powers of private corporations generally,. and not to those which, as we think, must govern in the case before us. What, then, must be said of the contemplated donation under consideration? Does it affirmatively appear from the face of the plaintiffs’ petition that, as agreed upon, it was invalid? Says Mr. Elliott in volume 1, § 545, of his work on Contracts:

“As a general rule, corporations have the capacity and the implied power to take and hold real property the same as individuals, except only so far as they may be restricted by the objects of their creation and the limitations of their charter” — citing numerous cases, including the case of Russell v. T. & P. Ry. Co., 68 Tex. 646, 5 S. W. 686.

The plaintiffs alleged in their petition that the Roscoe, Snyder & Pacific Railway Company was a railroad corporation duly chartered under the laws of the state of Texas. Its powers and limitations, therefore, are controlled by title 115 of our Revised Statutes, relating to the incorporation of railroad companies, and not by title 25, relating to private corporations generally. Article 6537 of chapter 9, tit. 115, Revised Statutes 1911, provides that:

“Any railroad company shall have the right to purchase, hold and use all such real estate and other property as may be necessary for the construction and use of its railway and the stations and other accommodations necessary to accomplish the objects of its incorporation, and to convey the same when no longer required for the use of such railway.”

.Article 6538 of the same chapter reads:

“Such corporations shall have the right to take, hold and use such voluntary grants of real estate and other property as shall be made to it in aid of the construction and use of its railway, and to convey the same when no longer required for the uses of such railway, 'in any manner not incompatible with the terms of the original grant.”

The next .article (6539) so far as pertinent, provides that:

“All lands purchased by or donated to a railroad corporation, except such as are used for depot purposes, reservations for the establishment of machine shops, turnouts and switches, shall be alienated and disposed of by said company in the same manner and time as is required when lands have been received from the-state.”

In articles 5439 to 5441, inclusive, of chapter 9, tit. 79, relating to public lands, it is-provided, in effect, that any railroad company owning, operating, or constructing a line of railways in this state, who may desire to purchase any portion of the public free school, university, or asylum lands, may do so under the regulation in the article prescribed for the location and establishment thereon “of town sites, depots, stations, yards, divisional terminals, shops, roundhouses, or water stations.” It is provided in the articles referred to that all lands required for-town-site purposes shall be in good faith placed upon the market for sale, and the title-alienated within the term of ten years, and that land desired for a water station or reservoir for the impounding of rainwater for the-use and operation of said railway must be within three miles of the line of road, and at least eight'miles distant from any other tract sold to the same railway company for the-same purpose.

We find no express -inhibition in any of our statutes against the donation of lands to • a railway company, and no statutes from which such inhibition may be implied, unless it be the statutes cited and quoted. As we-have seen, express power has been given to railroad companies of this state to purchase- and to bold all such, real estate as may be necessary for the construction and use of the railway and the stations and other accommodations necessary to accomplish the objects of its incorporation, and to receive such voluntary grants of real estate as shall be made to such railroad corporations in aid of the construction and use of the railway. Possibly the terms “in aid of the construction and use of its railway,” as used in article 6538, above, should not receive a construction so broad as to axrthorize a donation of lands to be held by railway companies for purely speculative purposes, subject only to the requirement relating to alienation. But nothing in the public history of land grants to railways in this state would seem to prohibit such a construction as a matter of public policy, for it is a part of the general history of Texas that large quantities of land have been granted to the Texas & Pacific Railway Company and other railway companies to aid in the construction of their lines of railway that were not necessary for depot, sidings, water stations, or other purpose of actual construction, and that these lands have been long held not subject even to the requirement of alienation within specified periods. The aid in contemplation thus received must have been such aid as was received by the sale of such lands and the application of the proceeds in furtherance of the company’s purposes. But, however this may be, there is nothing on the face of the plaintiffs’ petition which affirmatively shows that the land which the Dermott Town-Site Company agreed to convey was not intended by the railway company for the purpose of a town site or water reservoir, or for some other use falling within the express grants of power given in the statutes already quoted. In this connection it may be useful to note that in the case of Wooters v. I. & G. N. R. R. Co., 54 Tex. 294, a voluntary subscription contract to pay $1,000 to secure the location of a depot was enforced against the subscribers. In the case of Texas & St. L. R. R. Co. v. Robards, 60 Tex. 545, 48 Am. Rep. 268, a contract to erect and perpetually maintain both passenger and freight depots at a designated place was upheld against the railway company, which pleaded, among other things, that the agreement as to the company was ultra vires. So also as of like effect are the cases of M., K. & T. Ry. Co. of Texas v. Doss (by this court) 36 S. W. 497; C., T. & M. C. R. R Co. v. Titterington, 84 Tex. 218, 19 S. W. 472, 31 Am. St. Rep. 39; Herzog v. A., T. & S. F. Ry. Co., 153 Cal. 496, 95 Pac. 898, 17 L. R. A. (N. S.) 428. In none of these decisions is it suggested that such contracts are violative of any statute or against public policy, but all proceed upon the theory that, in the absence of prohibitory statutes or charters, such contracts are lawful. The ease last cited, which was by the Supreme Court of California, was an action for the specific performance of a contract on the part of'a railway company to establish a station and trains at a given place, and, while the action of the trial court in sustaining a demurrer to the petition was approved because of defects pointed out, the general right to a specific performance of the contract was clearly recognized.

If the remedy of specific performance is available at all, it is available alike to either party to the contract under the same circumstances, that is, in favor of either party who has, as here alleged, performed his part of the contract, and the other party refuses to do so. As stated, it is here alleged that appellant has fully performed its part of the contract, and on demurrer this allegation must be accepted as true. Under like circumstances in this respect it was held in Railway v. Robards, supra, that the railway company could not avoid compliance with the contract on the ground that it was invalid for want of joinder of the wife. So in Ray v. Foster, 53 S. W. 54, by the Court of Civil Appeals for the Third Judicial District, it was said, inter alia:

“It is well settled in this state that the capacity of corporations to take title to real estate can only be raised and questioned by the state” — citing Schwab Clothing Co. v. Claunch, 29 S. W. 923, by this court.

In this respect and for the purposes of the present determination, it can make no material difference, as it seems to us, that in the cases last mentioned the title to the lands in controversy had already vested in the corporation by formal conveyance, for, as alleged, appellees have induced full performance of the contract on the part of appellant company at considerable cost, and thus secured what was doubtless considered by them as of large advantage and of great pecuniary benefit in the development and disposition of the town-site property, and upon the plainest principles of justice it would seem that an anxious ear should not be extended toward appellee’s plea of a want of capacity on the part of the railway company to take and to hold the promised consideration.

Appellees further insist that the contract under consideration is not enforceable for want of a sufficient description of the lands to be conveyed. While, as presented in the present record, the objection is apparently well taken as to the strip 2,000 feet long on either side of the right of way, yet, reading the contract and bond together, the description of the 150 acres of land to be conveyed to H. O. Wooten is sufficient, as was, in effect, admitted on the submission of this cause, for it seems fairly plain that, reading the description of this tract of land as given in the bond and contract, enough is stated to identify the particular tract intended to be conveyed, and this is all that is required according to that legal maxim, “Id certum est quod certum reddi potest.” The objection here noted not being good as a whole, the general demurrer should not have been sustained.

It follows from what we have said that the judgment of the court must be reversed, and the cause remanded.

       <§=>For other cases see same topic and KEY-NUMBER in all Key-Numoered Digests and Indexes

      ®^>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    BANKERS’ TRUST CO. v. FRANKS et alt.

    (No. 8102.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    March 13, 1915.
    Rehearing Denied June 19, 1915.)
    1. Appeal and Error <&=>1026 — Review — Harmless Error.
    An assignment of error attacking the sufficiency of the evidence with respect to issues not submitted to the jury will be overruled.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4029, 4030; Dec. Dig. <S=s> 1026.]
    2. Mortgages <§=^78 — Defenses—MisrepreSENTATIONS.
    F. subscribed for stock in an insurance company and executed his notes therefor; S. being the promoter. S. also represented a trust company in negotiations with F. and his wife, which culminated in the execution of notes secured by a deed of trust, and in such negotiations falsely represented that the notes for the life insurance stock were due and unpaid; that the company was demanding payment; that S. had paid or would cause them to be paid; and that, in exchange for the life insurance stock, he would transfer to F. stock in the trust company and would attach it to the notes given the trust company. Held, that it was a defense to such notes in the hands of thei trust company that they were procured by S. by such misrepresentations, though the trust company was not interested in the transaction between F. and S. as the promoter of the life insurance company with respect to which the misrepresentations related.
    [Ed. Note. — For other cases, see Mortgages, Cent. Dig. §§ 177-181; Dec. Dig. <S=>78.]
    3. Appeal and Error <§=o263 — Reservation of Grounds of Review — Exceptions.
    Where no exception was taken at the trial to an instruction or to the court’s ruling in permitting defendant to assert a defense claimed to be inconsistent with his statutory admission made for the purpose of obtaining the right to open and close, such rulings could not be complained of on appeal.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. .§§ 1516-1523, 1525-1532; Dec. Dig. <©=>2(53.]
    Appeal from District Court, Tarrant County; R. H. Buck, Judge.
    Suit by the Bankers’ Trust Company against T. R. Franks and others. From a judgment for plaintiff for insufficient relief, it appeals.
    Affirmed.
    McLean, Scott, McLean & Bradley and Goree & Turner, all of Ft. Worth, for appellant. Clendenen & Simmons, of Ft. Worth, for appellees.

       Writ of error pending in Supreme Court.

   DUNKLIN, J.

The Bankers’ Trust Company instituted this suit against T. R. Franks and wife upon promissory notes aggregating the principal sum of $11,000 and to foreclose a mortgage lien given to secure the same 'upon certain land in Hall county. In their answer the defendants admitted the execution of the instruments and an indebtedness thereon to plaintiff in the sum of $3,000, but alleged that there was no consideration for $8,000 of the principals of said notes. This plea of failure of consideration was predicated upon allegations that the execution and delivery of the notes by them to the plaintiff were procured by fraudulent misrepresentations made to them by plaintiff, acting through its agents. From a judgment in favor of plaintiff for the sum of $3,000, with interest thereon from the date of the note, and for 10 per cent, attorneys’ fees, less a credit in the sum of $352, and for foreclosure of a mortgage lien 'upon the land described in the deed of trust, plaintiff has appealed.

At the inception of the trial defendant made the statutory admission of the plaintiff’s right to recover, as prayed for in its petition, except in so far as said recovery may be defeated by affirmative matters alleged and proved by the defendants, and was granted the right to open and conclude the case in the introduction of evidence and in argument upon the facts.

In their answer defendants presented several issues of fraudulent misrepresentations and ácts on the part of plaintiff’s agents which induced defendants to execute the instruments upon which the suit was founded, but only one of those issues was submitted in the court’s charge as a basis for the defense against the collection of $8,000 of the principals of said notes and interest accruing thereon. The proof showed that, prior to the execution of the note sued on, the defendant Franks had subscribed for 250 shares of capital stock of the American Home Life Insurance Company, and had executed his notes therefor in the sum of $7,500. R. T. Stuart was the promoter of said insurance company and secured that contract from Franks. He also represented the Bankers’ Trust Company in the negotiations with Franks and wife, which culminated in the execution of the notes and deed of trust upon which this suit was instituted. Defendants alleged that Stuart induced them to execute the notes and deed of trust in controversy in this suit by falsely representing to them that the notes which Franks had executed for the stock in the life insurance company were due and unpaid, and that the American Home Life Insurance Company was demanding payment thereof, principal and interest, and that said Stuart had paid, or. would cause to be paid, to the company, the amount of said notes, and in exchange for the life insurance company’s stock he (Stuart) would transfer to Franks stock of the par value of $4,400 in the Bankers’ Trust Company and would attach said stock to the notes sued on herein. The trial court charged the jury if those allegations of misrepresentation were sustained by the evidence, and that defendants were induced thereby to execute the notes, then the defense alleged should be sustained. The evidence was ample to sustain that'plea of fraud. The evidence shows that the stock in the life insurance company was never received by Franks, but, on the contrary, that it was marked on the books of the company canceled; that the notes given by Franks for such stock were made payable to Stuart and were never owned by the life insurance company ; and that $8,000 of the consideration for the notes in controversy in this suit was never received by Franks and wife, but was appropriated by Stuart upon a claim by him of the right to apply the same upon the notes given for the stock in the life insurance company, such appropriation by Stuart being made without the consent of Franks and wife. According to the pleadings of Franks in this case, the notes executed by him for stock in the life insurance company were likewise without consideration, and there was evidence tending to support that plea, even though the same was not submitted as an issue.

Error is assigned to the action of the court in submitting the issue of fraud shown in the charge and referred to above upon the ground that it was not raised by the pleadings. Without setting out the pleadings, we think it is sufficient to say that an examination of defendants’ answer shows clearly that there is no merit in this assignment, which is accordingly overruled.

By another assignment and numerous propositions submitted thereunder, complaint is made that the judgment was erroneous because of a failure of the defendants to establish other allegations of fraud and deceit practiced upon the defendants by the alleged agents of the plaintiff inducing the defendants to execute the notes in suit. As none of those issues of fraud were submitted to the jury, the assignment is overruled.

It is contended further that the alleged misrepresentations by Stuart relative to the American Home Life Insurance Company’s stock concerned matters in which the plaintiff was not interested and were therefore not binding upon the plaintiff. Whether or not the plaintiff was interested in the previous transaction between Franks and Stuart as the promoter of the life insurance company could make no difference. If a fraud was practiced upon the defendants by means of which the notes were executed, clearly it would be no excuse for the fraud to say that plaintiff was not interested in the transaction to which the misrepresentations related. If the misrepresentations were material, and by means of them plaintiff procured the execution and delivery of the notes and deed of trust, then the defense submitted was sustained, regardless of the particular nature of the misrepresentations.

Another assignment of error reads:

“Defendants having made the statutory admission of plaintiff’s right to recover, it was error to permit them to defend upon the ground that the notes sued on were wholly without consideration, or that the consideration was illegal.and void or to render judgment against plaintiff based on such defenses.”

The ruling of the court in permitting the defense here complained of was not excepted to upon the trial, and hence appellant is committed to an approval of such ruling. Cleburne St. Ry. Co. v. Barnes, 168 S. W. 991. And, besides, we do not understand that the statutory admission of plaintiff’s right to recover, except in so far as a valid defense might be established against the granting of such relief, would deprive the defendants of the right to the defense that was submitted in the court’s charge.

By another assignment complaint is made of the action of the trial court in charging the jury to allow a credit of $352 on the $3,-000 indebtedness admitted by the defendants. As no exception was presented upon the trial to this instruction, appellant must be held to have approved it, and is therefore in no position to complain here.

The judgment is affirmed.
      <g^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BUCK, J.

text:
    GREAT EASTERN CASUALTY CO. v. THOMAS.
    (No. 8184.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    May 8, 1915.
    Rehearing Denied June 5, 1915.)
    1. Insurance <&wkey;138—Acceptance or Policy-Effect.
    In.the absence of fraud or mistake, an applicant for insurance, who accepts or retains a policy delivered to him, is bound by its terms, whether he reads it or not, if nothing prevents him from doing so, since he is conclusively presumed to have knowledge of the contents.
    [Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 246-249; Dec. Dig. <&wkey;138.]
    2. Insurance <&wkey;143—Reformation of Policy-Fraud and Mistake.
    An insurance policy will not be reformed to accord with an alleged actual intent of the parties, unless there was mutual mistake of the parties as to its terms, or mistake on one side, coupled with fraud on the other.
    [Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 265-272; Dec. Dig. &wkey;143.]
    3. Evidence <&wkey;441—Parol Evidence Affecting Writings — Previous Negotiations Reduced to Writing.
    Parol negotiations and an agreement for insurance preceding execution of the policy could not be shown to vary or contradict its terms, since it would be conclusively presumed that all the previous parol negotiations leading up to the issuance of the policy were included in the written instrument.
    [Ed. Note.—For other cases, see Evidence, Cent. Dig. §§ 1719, 1723-1763, 1765-1845, 2030-2047; Dec. Dig. &wkey;441.]
    Appeal from District Court, Palo Pinto County; W. J. Oxford, Judge.
    Action by Frank E. Thomas against the Great Eastern Casualty Company. Judgment for plaintiff, and defendant appeals.
    Reversed.
    J. T. Ranspot, of Palo Pinto, and Sleeper, Boynton & Kendall, of Waco, for appellant. W. H. Penix, of Mineral Wells, for appellee.
   BUCK, J.

This suit was brought by ap-pellee against the appellant to recover $1,250, and statutory penalty and attorney’s fees, claimed to be owing on an alleged contract of indemnity for accidental loss of a foot by plaintiff.

Plaintiff alleged that on or about the 3d day of May, 1913, one R. L. Mastin, agent of defendant, induced him to apply to defendant for an accident policy, and represented that the policy would cover all kinds of accidents, including the loss of a foot, for which defendant would pay plaintiff $1,250, and, relying on said representations, plaintiff paid said Mastin for defendant $10, represented by him to be the premium necessary to obtain said policy from defendant embodying the terms aforesaid, and later plaintiff received policy No. C-73664, issued by defendant and countersigned by said Mastin and dated May 3, 1913. Plaintiff further alleged that he was not versed in law, nor in the interpretation of accident insurance policies, and that he relied wholly upon the statement and representations of said Mastin, and that when he received the policy he did not examine its contents, but, relying on the statement and representations aforesaid, and believing them to be true, he placed the policy among his papers, and did not read the same, nor have its contents examined, until after the accident hereinafter mentioned. He further alleged that during the following September, and while said policy was in full force and while plaintiff was engaged in shipping cattle on a stock train at Weatherford, Tex., his foot was caught between the drawheads of two box cars, and so crushed and mashed that it was necessary to have the same amputated, and that thereupon defendant became liable and bound to pay plaintiff the said $1,250, according to the alleged contract between plaintiff and the defendant company, through its agent, Mastin. He further alleged that the policy, which was in fact issued by the defendant company, was entirely different in terms, indemnity, and conditions from that agreed upon by plaintiff and the said defendant, through its agent, and that the said policy so delivered was not the policy purchased and paid for by plaintiff, but was restrictive in its terms, and did not include liability for the loss of a foot under the circumstances of the accident alleged, and plaintiff prayed that if it should be held necessary, in order for him to recover, that the policy issued to him by defendant should be reformed so as to comply with the agreement and contract made with the defendant through its agent, the policy so reformed should be made to cover and provide for an indemnity in the sum of $1,250 for the loss of a foot. He further alleged due notice and proof of injury and demand made on defendant and refusal by it to pay the amount claimed, and sued for $1,250, together with the statutory penalty of 12 per cent, and attorney’s fees in the sum of $150. The plaintiff further pleaded that the defendant company was estopped from denying its liability by virtue of said contract between plaintiff and said company through its said agent, because of the happening of the accident by which he lost his foot, and that in reliance upon the representations and statements alleged to have been made by said agent, and in reliance on the issuance by defendant company of the policy claimed to have been purchased, plaintiff was prevented from securing a policy which would have, in every respect, indemnified him against the loss of a foot.

The defendant answered by general demurrer and special exceptions and by specially denying those allegations in plaintiff’s petition which set out a contract of indemnity on the part of the defendant, through its agent, different from that shown in policy No. 0-73664, issued by defendant, and specially pleaded that by accepting and retaining said policy so issued, plaintiff was estop-ped to deny or to complain of any of the provisions of the same, and that he had been in possession of said policy for four months prior to the happening of the injury complained of, and was now estopped from saying that said policy did not embody and contain all the contracts' and agreements between himself and the agent. Defendant further answered that the application for said policy was in writing and signed by plaintiff, and that the policy issued was the identical policy contracted for by plaintiff, and contained all the stipulations and agreements between plaintiff and defendant; that plaintiff was not prevented from examining the same by any act of the defendant, and that it was his duty to so examine said policy and to ask a rescission of the same if not in compliance with his contract. Defendant further denied that it had ever received any notice in writing from plaintiff, his agent or attorney, that plaintiff was claiming any damages or indemnity against it by reason of any verbal contract entered into between plaintiff and R. L. Mastin, and specially denied any liability for the 12 per cent, penalty, or the attorney’s fees.

The cause was tried before the court without the aid of a jury, and judgment rendered for plaintiff in the sum of $1,250 damages, and,, in addition thereto, $150 statutory penalty, and also $150 as attorney’s fees, from which judgment an appeal was prosecuted.

The court filed his findings of fact and conclusions of law as follows:

“Conclusions of Fact.
“(1) I find that on or about the 3d day of May, 1913, R. D. Mastin was the agent of the defendant, Great Eastern Casualty Company, with authority to countersign policies and to appoint agents, and also had authority to make contracts for the defendant, and also had authority to collect premiums for the defendant.
“(2) I find that the defendant and the plaintiff entered into a contract by and through defendant’s agent, R. L. Mastín, by which the defendant undertook to insure the plaintiff against loss from accident caused in any way, and especially the kind of accident and manner of its happening as sued on by the plaintiff.
“(3) I find that the plaintiff paid a premium to the defendant for a policy of accident insurance to begin about the 3d day of May, 1013, and to run for one year, which accident policy was to cover any and all kinds of accident to the plaintiff, and especially the one sued for, and in manner in which same happened.
“(4) I further find that said defendant agreed to pay this plaintiff for the loss of a foot at the ankle the sum of <?1,250.
“(5) I find that the defendant admits that the plaintiff lost a foot at the ankle on or about the 23d day of September, '1913, at Weather-ford in Parker county, Tex., from an accident caused by the sudden backing of a freight train without warning while plaintiff was crossing same between two box cars, which sudden backing of the train caused plaintiff’s foot to slip and catch between the drawhead and some other part of the box car, which crushed plaintiff's foot until it was off at the ankle.
“(6) I further find that the defendant, as a matter of fact, does issue a policy that will cover all kinds of accidents, and especially the one sued on herein, and was issuing such policy at time of the contract for policy by plaintiff with defendant.
“(7) I further find that it was admitted 'by the counsel for defendant, upon the trial of the cause, that it did issue at the time policies that would cover any and all kinds and manner of accidents, and especially the one alleged in plaintiff’s petition, but that such policy sold for a premium of $60 per annum.
“(8) I find that the policy issued by the defendant was not the policy contracted for by the plaintiff, and was not the policy agreed to be issued to him by the defendant, at the time.
“(9) I find that the policy contracted for by the plaintiff was not issued to him by the defendant, but that the defendant did issue such policies.
“(10) I find that the plaintiff received the policy about the 1st day of June, 1913, and placed the same away without- reading the same.
“(11) I find that the policy' was paid for by the plaintiff at the time his application therefor was taken, upon the agreement that same would cover all kinds of accident that might happen to him during tbe life of said policy, but that said policy, when issued, did not cover the agreement between the plaintiff and the defendant at the time he paid for same.
“(12) I find that plaintiff relied wholly upon the statements of the defendant through its agent Mastín as to what said policy would contain' as to stipulations and as to its contents, and as to what' it would cover in the way of accidents and in the manner of the happening of accidents.
“(13) I find that plaintiff contracted for, and defendant agreed to give him, a policy that would cover any and all kinds of accident, and especially the one alleged, whatever the manner of their happening, and in the manner alleged in plaintiff’s petition.
“(14) I find that plaintiff did not waive his right by placing said policy away and failing to read same before the accident to him on or about the 23d day of September, 1913.
“(15) I find that plaintiff never read said policy until after the accident which happened to him on or about the 23d day of September, 1913, and that he never knew its contents until after said accident, but relied wholly upon the contract and agreements as to the contents of said policy entered into with the defendant on or about the 1st day of May, 1913.
“(16) I find that plaintiff, soon after the accident, notified the defendant of the happening of the accident, and demanded payment of damages in the sum of $1,250 soon thereafter, and I find that the defendant refused to pay same within 30 days after demand therefor, and within 30 days before the filing of this suit, and that it is due the plaintiff 12 per cent, damages,. as provided by the statutes.
“(17) I find that plaintiff has agreed to pay Ms attorney the sum of $150, which I find to be a reasonable attorney’s fee for the prosecution and collection of the loss alleged in plaintiff’s petition.
“Conclusions of Law.
“1. I conclude as a matter of law that the contract between the plaintiff and defendant was a binding one, and the defendant, having accepted'plaintiff’s money, became liable under said contract to pay plaintiff the sum of $1,250 for the loss of a foot at the ankle.
“2. I further conclude as a matter of law that plaintiff did not waive his right by virtue of placing said policy away without having read same until after the accident.
“3. I conclude that the defendant is due the plaintiff 12 per cent, damages provided by article 4746, McEachin’s Rev. St. 1911.
“4. I conclude as a matter of law that under said statute defendant should pay the plaintiff the sum of $150 as a reasonable attorney’s fees for the prosecution and collection of the loss sued on herein.
“5. I conclude as a matter of law that the contract of insurance that was issued to the plaintiff by the defendant of date about May 3, 1913, should be reformed so as to include the contract entered into by and between the defendant about the date for which plaintiff paid to defendant the premium, for which defendant agreed to issue a policy covering any and all kinds of accidents, without limiting their mannér of happening.
“6. I further conclude as a matter of law under the evidence that plaintiff should recover of the defendant the sum of $1,250 for the loss of a foot, which happened accidentally, and in addition 12 per cent, damages thereon in the sum of $150, and also in addition thereto the sum of $150, as reasonable attorney’s fees.”

No assignments of error were filed in the lower court and the appellant relies as to the sufficiency of its specifications upon the claim that fundamental error is presented.

Defendant alleged in its answer to the allegations of the plaintiff that the policy delivered to him by defendant did not contain the terms of the contract between himself and defendant, and to the allegation of mutual mistake that the facts were that the plaintiff applied to defendant’s agent for a limited accident insurance policy; that said application was in writing, and signed by plaintiff, and that the policy delivered to plaintiff, to wit, No. 0-73664, contained all the stipulations and agreements between plaintiff and defendant. While plaintiff in his first supplemental petition specially denied that plaintiff applied for a limited insurance policy, to wit, policy No. 0-73664, and that said policy was the identical policy contracted for by plaintiff, yet he did not deny that plaintiff did sign the application for such limited insurance policy, but alleged that he was unfamiliar with accident insurance policies, and knew nothing about the kind of policy lie was applying for, except as stated T>y tlie agent of tlie defendant, R. L. Mastín, and thought that he was applying for a policy covering all kinds of accidents and including the accident alleged in his petition. From this state of the pleadings, we presume it is conceded by plaintiff that the application signed by him was in fact for policy No. C — 73664. By reference to the statement of facts, if it be permitted under this state of the record, we find that defendant introduced in evidence the application of plaintiff im-policy No. 0-73664, and the plaintiff introduced the policy itself.

Ordinarily, where a policy is delivered to the insured, and he accepts or retains the same, he is bound by its terms whether he reads it or not, if there are no facts shown which prevented him from doing so. Morrison v. Insurance Co., 69 Tex. 353, 6 S. W. 605, 5 Am. St. Rep. 63; Goddard v. Insurance Co., 67 Tex. 71, 1 S. W. 906, 60 Am. Rep. 1; Insurance Co. v. Gober, 50 Ga. 404; Cleaver v. Insurance Co., 71 Mich. 414, 39 N. W. 571, 15 Am. St. Rep. 275; Bonneville v. Assurance Co., 68 Wis. 298, 32 N. W. 34; Quinlan v. Insurance Co., 133 N. Y. 356, 31 N. E. 31, 28 Am. St. Rep. 645; Insurance Co. v. Swank, 102 Pa. 17; Insurance Co. v. Holcomb, 89 Tex. 404, 34 S. W. 915. In the last-cited cases our Supreme Court uses the following language;

“The fact that the plaintiff did not know the contents of the policy will not relieve him from the binding force of the warranty contained in it. He could have read it if he had desired to do so.”

In the absence of allegations of fraud or mistake, plaintiff, having accepted the policy, will be conclusively presumed to have had knowledge of its contents. Insurance Co. v. Holcomb, supra; Insurance Co. v. Post, 25 Tex. Civ. App. 428, 62 S. W. 140. It is true that plaintiff alleged mutual mistake, and alleged a representation on the part of the agent, Mastín, that he would have Issued by the company a policy of general liability, but the court in his findings of fact failed to find the existence of any mutual mistake or the existence of any fraud or fraudulent representations, so far as the same might affect the contents and terms of the application made and the policy issued, nor does the statement of facts disclose either mutual mistake or fraud, and therefore at least a majority of us think (the writer having some doubt upon the matter) that the judgment cannot be sustained on the ground of mutual mistake. It is said in 34 Cyc. 925, that abundant authority establishes the fact that insurance policies are subject to be reformed when grounds therefor have been plainly made out, and that in the same suit plaintiff may secure a reformation and a rcovery. See, also, N. Y. Ins. Co. v. Hagler, 169 S. W. 1064. But we understand the rule to be that to justify reformation of an insurance contract there must have been alleged and proven mutual mistake, or mistake on one side, coupled with fraud on the other. In Hartford Fire Ins. Co. v. Haas, 87 Ky. 531, 9 S. W. 720, 2 L. R. A. 64, it was held that the liability of an insurance company could not be relieved by the inserting of a provision in the policy for the benefit of the children of the insured, as well as the insured herself, merely because the insured believed she had, by the procuring of the contract of insurance, protected the interests of her children as well as her own. See, also, 19 Cyc. 651 et seep It is true that it has been held that when the agent of an insurance company to whom an applicant correctly stated matters concerning which information was desired by the company makes a mistake in reducing the application to writing, which is signed by the applicant with a warranty of its correctness, and the erroneous statement is made a part of the policy, the act of the agent will operate as an estoppel to prevent the company from making the warranty available as a defense. Insurance Co. v. Lewis, 48 Tex. 622. But the case under consideration does not present such a phase. The application signed by plaintiff was for a policy of the kind and character issued, and there- is nothing in the record, or in the findings of fact by the court, to indicate that the issuance of the policy No. C-73664, was due to mutual mistake, either of the plaintiff and the agent, or of plaintiff and the defendant company, or due to a mistake on the part of plaintiff and fraud on the part of the agent or of the company. The facts, as testified to by plaintiff, show that he made a verbal agreement, or parol contract, with the agent Mastín to have issued to him a policy covering accidental injury generally, but there is nothing to show that the insurance company had any knowledge of this alleged parol agreement between the plaintiff and the agent, or any information as to what kind of policy was desired or had been contracted for by plaintiff except as shown in said application. And where parol negotiations have been had which are understood shall be reduced to writing in order to constitute a contract between the parties, and later a written contract is executed and delivered, it would be conclusively presumed that all terms and provisions of the contract are included in the written instrument, and said written instrument could not be varied by reason of any parol agreement or negotiation had prior thereto. A parol agreement of insurance, if made prior to the execution of the policy, cannot be shown to vary or contradict its terms. Insurance Co. v. Post, supra; Keller v. Insurance Co., 27 Tex. Civ. App. 102, 65 S. W. 695; Insurance Co. v. Prather, 25 Tex. Civ. App. 446, 62 S. W. 89.

It further appears that the premium on the policy issued was $10 a year, while the premium on a policy for same amount, but covering general accidents, was $60 a year. If article 4954, Vernon’s Sayles’ Tex. Civ. Stat., which, prohibits, under penalty, insurance companies doing business in this state from making any discrimination or distinction in favor of individuals of the same class and equal expectation of life in the amount of or payment of premiums or rates charged, applies to accident insurance companies as well as to life insurance companies, a further question is presented as to whether or not the attempted enforcement by the courts of the alleged parol contract would not be against public policy. But we do not feel called upon to pass on this question, because the majority of the court are of the opinion that the judgment of the trial court should be reversed for the reasons given above.
      <&wkey;For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes