text:
    MILLER et al. v. MURPHY.
    (No. 8006.)
    (Court of Civil Appeals of Texas. Dallas.
    Nov. 30, 1918.)
    Evidence <&wkey;444(6) — Contingent Contracts —Parol Evidence — Bills and Notes.
    Where promissory note was delivered in payment of stock in an involved corporation with agreement that it should become binding upon the corporation's creditors accepting a compromise settlement, which was not done, the note was not enforceable, and the fact that it was contingent could be shown by parol.
    Error from Hunt County Court; A. J. Gates, Judge.
    Suit by J. N. Miller and another against O. A. Murphy. Judgment for defendant, and plaintiffs bring error.
    Affirmed.
    A. H. Mount, of Dallas, for plaintiffs in error.
    B. F. Crosby and Morris iB. Harrell, both of Greenville, and W. B. Hamilton, of Dallas, for defendant in error.
   RAINEY, C. J.

Suit in county court of Hunt county brought by plaintiffs in error to recover of defendant in error on a promis.sory note for $900, said note being as follows:

“$500.00. Greenville, Tex., June 15, 1911.
“One year after date, I promise to pay to J. N. Miller and J.- D. Miller, or order, the sum of five hundred dollars, for value received, with interest thereon from date at the rate of 10 per cent, per annum, payable at Greenville, Texas, together with 10 per cent, attorney’s fees on the principal and interest if placed in the hands of an attorney for collection or sued upon. [Signed] O. A, Murphy.”

Defendant in error answered by plea of failure of consideration, alleging:

“That the note sued on had been given _ by defendant to plaintiffs for five shares of capital stock in the Murphy-Miller Mercantile Company, a corporation, and alleged further that said corporation was insolvent and the stock worthless at the time of the execution and delivery of said note. The defendant further pleaded a contemporaneous parol agreement to the effect that if the corporation should after-wards prove to be insolvent that plaintiffs would cancel said note and never demand payment thereof; that the corporation did thereafter prove to be insolvent, and therefore the note sued upon never became a legal and binding obligation upon defendant.”

Plaintiffs excepted to that portion of defendant’s answer pleading a contemporaneous parol agreement, which exceptions were overruled. A trial resulted in a judgment for defendant in error, and plaintiffs in error appealed.

Plaintiffs, in error assign as error the court’s action in overruling exceptions to said answer and for admitting testimony as to contemporaneous parol agreement varying and contradicting the note.

O. A. Murphy testified:

“At the time the note sued upon was executed, there was a condition in regard to the delivery of the note. It was not delivered as a binding obligation, but the understanding I had with the plaintiff J. N. Miller was that the note should not become binding unless the Murphy-Miller Mercantile Company could .make. a settlement with its creditors and continue in business. J. N. Miller is my brother-in-law. He and his brother, J. D. Miller, owned $500 of the capital stock of the Murphy-Miller Mercantile Company, a corporation. The corporation had become involved and was heavily in debt, and the debts were maturing, and it did not have the money to pay its debts and was in a bad financial condition. I had discussed the affairs of the company with J. N. and J. D. Miller all along, and they knew its condition, and J. N. Miller came to Greenville and discussed the matter with me and stated that he did not want his name or the name of his brother, J. D. Miller, connected with a failure. They are, and were then, in the banking business at Royse City, and he said they did not want their names connected with the business if it should fail. * * * And he agreed if I would make a note payable to J. N. apd J. D. Miller for $500 that the note should not become a binding obligation unless I succeeded in settling with the creditors, which at that time I thought I could do, and it was agreed that I would make the note with the understanding if I could settle with the creditors and keep the business going and make a success of it that the note was to be good and I would pay it, but if the business failed, as it looked like it might, and I could not settle with the creditors, the note was to be destroyed and it would not be held against me.
“Upon this agreement I signed the note and attempted to settle with the creditors of the company, and we called a meeting of the creditors at the Oriental Hotel at Dallas, and my attorney, Mr. Hamilton, and myself met the creditors and tried to make a settlement but were unable to do so. The bank at Royse City in which the plaintiffs are stockholders, directors, and officers, was one of the creditors of the Murphy-Miller Mercantile Company, and I continued to discuss all the affairs of the Murphy-Miller Mercantile Company with the plaintiffs and kept them posted as to the negotiations with the creditors. They were notified of the meeting of the creditors at Dallas, and they told me to go ahead and do what I could with the other creditors, and whatever I did would be all right with them. They did not attend the creditors’ meeting, but I acted on what they said, and, when the creditors declined all of our offers and we were unable to make any agreement with them so as to continue the business, we made an agreement with the creditors at that meeting that if all the creditors of the Murphy-Miller Mercantile Company would agree to accept their pro rata part of the proceeds of the sale of the company’s property, in full settlement of their indebtedness, we would turn over all the property of the company to a trustee, to be selected by the creditors, without any legal proceedings. I had indorsed and become personally liable on bonds and notes of the corporation for a large portion of its indebtedness, and the creditors to whom I had become personally responsible were also represented at this meeting, and it was also agreed, as part of the same agreement, that I should 'turn over and convey to the trustee, so selected, all of my individual nonexempt property, and that it should be sold and the proceeds prorated among the creditors to whom I had become personally responsible, and the creditors elected Mr, W. M. McBride of Greenville, Tex., as trustee; and, in pursuance with the agreement, I conveyed all of my nonexempt property, including about 800 acres of land, to him, and all the corporation property was conveyed to him.
“After the trustee was elected, and before the conveyances were made, I told the plaintiffs what we had done, and they said it was all right. The bank of which the plaintiffs were officers was one of the creditors whose papers I had signed personally. If the creditors had not made this agreement, I would have taken the matter into bankruptcy, because I wanted a complete discharge from all my debts when I turned over all my property, and, if I had known that the plaintiffs were going to demand the payment on this note, I would not have made the agreement or turned over all my property, but would have taken the matter through the bankrupt court and procured a discharge. The plaintiffs never demanded the payment on this note, and I never had any intimation that they were going to fail to comply with their agreement, or that they claimed that it was a binding note, until some time in 1915, when I got a letter from J. D. Miller. I promptly answered the letter. I wrote the answer on the back of the letter and then copied it off and sent it to him. I have the original letter with my answer on the back of it before me. (Defendant here offered in evidence the answer on the back of the letter, but plaintiffs objected because it was not the best evidence and no notice had been served to produce the original, and the court sustained the objection.) The settlement with the creditors was made in the fall of 1911. All of the corporation property was taken and all of my nonexempt property was taken and did not pay the indebtedness in full, and I did not get anything back out of it.”

Defendant in error presents the following counter proposition, to wit:

“In a suit upon a promissory note by the original payee where the defendant pleads that the note was not delivered as a binding obligation or as a present contract, it is not error for the court to overrule exceptions to such defensive plea, and where the proof sustains the allegation it is not error for the court to submit the issue to the jury; and where the jury finds that the allegation is true and that the note was never delivered as a present contract, but that its delivery depended upon a contingency which never transpired, a judgment of the court based thereon should not be disturbed.”

We concur in the proposition of defendant in error as just stated. When a promissory note or written contract is delivered to become binding'depending on a contingency, it is not enforceable until the contingency happens and such facts can be shown by parol to defeat the action.

The rule governing under such conditions is stated by Corpus Juris and other authorities:

“The delivery may be a conditional one to take effect only on the happening of a future contingency, and the agreement in regard thereto need not be in writing. Such a delivery may constitute an escrow, although there is considerable conflict in the decisions as to whether a note complete on its face and intended to take effect eventually as a note can be an escrow when deposited directly with the payee or his agent instead of a third person. But this is now settled, in states where the Negotiable Instruments. Law is in force, by the provision that ‘the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument,’ as between immediate parties or one not a holder in due course.” Corpus Juris, vol. 8, pp. 205, 206; Meeks v. Holmes, 154 S. W. 865; Nelson v. Boggs, 177 S. W. 1005; Bank v. McAnulty, 31 S. W. 1091; Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816, 38 L. Ed. 698; Farrar v. Holt, 178 S. W. 618; Rahe v. Yett, 164 S. W. 30; Loving v. Dixon, 56 Tex. 75.

The defendant in error having testified to said contingency and being believed by the jury, we conclude that the evidence supports the verdict, and the judgment is affirmed.
      <@3^Por other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: CHILTON, Special Judge.

license: Public Domain

text:
    SOVEREIGN CAMP, WOODMEN OF THE WORLD, v. PUTNAM.
    (No. 289.)
    (Court of Civil Appeals of Texas. Beaumont.
    July 13, 1918.
    On Motion for Rehearing, Doe. 11, 1918.)
    1. Insurance &wkey;>755(3) — Fraternal Benefit Insurance — Increase in Assessments by Entering Prohibited Occupation — Failure to Demand — Estoppel.
    Whero collector of fraternal order’s local organization failed to demand higher assessments from member, who had notoriously entered occupation of retail liquor dealer, requiring, under by-laws, payment of higher assessments, his acts having misled member, order will not be permitted to take advantage of default by insisting on forfeiture after death.
    2. Insurance <&wkey;755(l) — Fraternal Benefit Insurance — Waiver op By-Laws by Local Clerk or Organization — Statute.
    In view of Rev. St. 1911, art. 4847, fraternal order may by by-law curtail and circumscribe right of local clerk or local organization of order to waive provisions of by-laws.
    3. Estoppel <&wkey;52 — Distinction prom “Waiver.”
    Though “waiver” and “estoppel” are often used indifferently, there is a distinction, in that waiver presupposes full knowledge of a right existing, and intentional surrender or relinquishment, not true of estoppel, which arises where, by fault of one, another has been induced to change his position for the worse.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Estop-pel; Waiver.]
    4. Insurance <&wkey;753(l) — Fraternal Benefit Insurance — Estoppel — Application op Principle to Order.
    Fraternal insurance association, acting through officers and local agents, is as much subject to operation of principle of estoppel, despite by-laws prohibiting any local clerk or organization from waiving provisions, as any other association, or as an individual.
    5. Insurance <&wkey;821 — Mutual Benefit Insurance — Judgment — Deduction of Assessments Due.
    In suit by widow of member of fraternal order, trial court, having held order estopped, by collection of assessments through local agent, to declare forfeiture on account of failure to pay higher assessments due after change in occupation, properly deducted, from amount due under certificate, amount of additional assessments member should have paid.
    Appeal from District Court, Jefferson County; W. H. Davidson, Judge.
    Action by Mrs. Pauline Putnam against the Sovereign Camp, Woodmen of the World. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    Smith & Crawford and John Hancock, all of Beaumont, for appellant.
    Lipscomb, Gordon & Lipscomb, of Beaumont, for appellee.
   CHILTON, Special Judge.

In the year 1899 O. W. Putnam became a member of Curley Pine Camp, Woodmen of the World, at Beaumont, Tex., and on May 15th of that year, there was issued to him by the Sovereign Camp, Woodmen of the World, incorporated and having its principal office at Omaha,.state of Nebraska, a beneficiary certificate, by the terms of which the said Putnam, as a member of the fraternity, was entitled to participate in the beneficiary fund to the amount of $3,000, together with the additional sum of $100 for the placing of a monument at his grave, all of which was payable upon his death to the beneficiary named in the .certificate, his wife, Mrs. Pauline Putnam. O. W. Putnam died in the month of June, 1916; his death being caused by typhoid fever. After the death of O. W. Putnam, payment of amount called for by the certificate was demanded of the Sovereign Camp, and was refused for the reason hereafter stated, whereupon this suit was instituted by Mrs. Pauline Putnam, the appel-lee herein.

In defense, it is asserted and claimed that the beneficiary certificate issued to said O. W. Putnam was null and void at the time of his death, and had been for some years prior thereto, and liability thereon by said Sovereign Camp is denied, because Putnam had not, for some nine years prior to his death, paid the proper amount of assessments and dues as required by the by-laws of the fraternity. It is shown that under the by-laws, when a member enters into any one of certain occupations, called “prohibited occupations,” he is required to notify the clerk of the local camp of the fact, and that thereupon the assessment of such member shall be increased and shall be paid, and, upon failure of such member to pay the increased assessment after entry into one of the so-called prohibited occupations, liis beneficiary certificate becomes forfeited. The saloon business, or retail liquor business, is one of these occupations, requiring the giving of notice and the payment of an increased assessment. The exact language of these provisions of the by-laws will be noticed and referred to more fully further on in this opinion.

At the time of his admission as a member and the issuance of the beneficiary certificate, Putnam was a railroad clerk or cashier at Beaumont. In 1907, he entered the retail liquor business, at that time becoming proprietor of what was known as the Manhattan Bar, located on Pearl street, in the city of Beaumont, and remained in said business up to the time of his death. His entry into and continuance in the business was open' and notorious, and was well known to the clerk of the local camp and the members thereof generally; his place of business being only a short distance from the lodge rooms of the local camp. The clerk of the local camp, in the performance of his duty as collector for the Sovereign Camp and local camp, from time to time and in the usual way, called at the saloon of Putnam and collected from him the ordinary or customary dues and assessments, or in his absence collected such dues and assessments from Putnam’s employes, wlio had instructions to pay tlie same upon demand. No additional payments or increased assessments were demanded of Putnam by reason of his being in the saloon business, nor were any such ever -paid by him. This was the only life insurance which Putnam carried, and he seemed to value it highly, and all the circumstances indicate that he was at all times ready, able, and willing to comply with all requirements and demands necessary to preserve the rights of himself and his beneficiary, and keep the insurance in force and effect. From the time he originally became a member, until his death, the records and minutes of the order show him as a member in good standing of the local lodge, Curley Pine Camp, and that his certificate was in full force and effect and in good standing with the Sovereign Camp. It was affirmatively shown that none of the Sovereign Camp officers ever had any actual knowledge of Putnam’s entry into the saloon business, or that he was engaged in that business, except this has no application to former Council Commander J. C. Root, who had been dead for about three years prior to the trial, and as to knowledge of these facts on his part no proof was made. It is not shown that the local camp clerk ever notified the Sovereign Camp, or any of its officers, of Putnam’s occupation, until after his death. No particular circumstance, that we can see, is offered which would tend to show that the deceased Commander Root had any actual knowledge about Putnam’s occupation, and, considering all the circumstances, we think it can be more fairly assumed that he, like the other officers, did not have such knowledge, than otherwise, and so we will treat the matter with that view.

By the terms of the certificate, the by-laws of the order in effect at the time of its issuance, and those regularly adopted thereafter, are made a part of the contract for the insurance. The right of the plaintiff in this case to recover, and the liability of the defendant, must depend upon the proper interpretation of such by-laws, and the effect and operation to be given to the acts and conduct of the parties when eonsidered in connection with the by-laws. Roth v. Travelers’ Protective Ass’n, 102 Tex. 241, 115 S. W. 31, 132 Am. St. Rep. 871, 20 Ann. Cas. 97; 29 Cyc. p. 66.

We herewith quote three sections of the by-laws, which were in effect at the time of the admission of the member Putnam into the association:

Section 42 (Laws of 1897): “Persons engaged in the following classes of business or employment shall not be admitted; employes in ammunition factories, glass blowers, balloonists, plow grinders, brass workers, saloon keepers, bartenders, and those engaged in the retailing of intoxicating liquors as a beverage; also persons employed in making, compounding, distilling, rectifying, or brewing of malt, spirituous, vinous, or intoxicating liquors.”
Section 65 (Laws of 1897): “Change of occupation by any member to a prohibited one. shall not invalidate his certificate, but his rate of assessment shall be increased thereafter by adding 20 cents to such assessment upon each $1,000 or less named in his certificate while he is so engaged.”
Section 65; third paragraph (Laws of 1897): “The nonpayment of the additional 20 cents, or the increased rate referred to, shall work a suspension of the member the same- as if the original amount were not paid and upon the same conditions, and during such suspension his certificate shall be void and no benefits shall be payable until he shall reinstate himself in the same manner as if the original assessment had been unpaid and he was suspended therefor.”

The amount of the additional assessment by reason of the entry of a member into one of the prohibited employments, as specified in section 42 of the by-laws as above quoted, was afterwards increased from 20 cents, as provided in section 65 above, to 50 cents for each $1,000 of insurance called for by the certificate, and also a number of additional prohibited employments were added to those mentioned. It appears that the only other material change of the above by-laws during the membership of Putnam was by an amendment in 1907 to section 65 above, by the terms of which a member, changing his occupation to one of the hazardous or so-called prohibited occupations, was required to give notice to the clerk of his camp of such change within 30 days thereafter.

One of the by-laws of the order with reference to the payment of assessments and dues is as follows:

Section 109: “Every member of this order, unless otherwise notified by the clerk . of liis camp in the manner herein provided, shall pay to the said clerk every month one assessment in the beneficiary fund, together with one monthly payment to the Sovereign Camp. or Beneficiary Head Camp, general fund dues and camp dues as levied, also any additional assessments for beneficiary fund or special general fund which may have been ordered by the Sovereign Camp or Beneficiary Head Camp, as the case may be; and if he fails to pay either on or before the first day of the month following, he shall stand suspended and during such suspension his beneficiary certificate shall be void.”

Another of tbe by-laws, which is rather long, and. we will not quote in full, .provides, among other duties of the clerk of the camp, that he shall have charge of the records, attend to correspondence and accounts, keep minutes of all proceedings of every meeting of the camp, and notify the camp of all members becoming in arrears. He is mad? the recipient of all moneys due, and required to issue receipts therefor, and to make all reports and mail and deliver all notices required of him by the Sovereign Camp or Head Camp officers, and to remit all assessments and general fund dues to .the Sovereign Camp, and for the faithful performance of these duties, a bond is required of the camp clerk.

There can be no question that the clerk of the local camp is the duly authorized agent of the Sovereign Camp for the collection of any and all dues and assessments chargeable to any member. Upon the receipt of notice by the clerk of the local camp at Beaumont of the change of occupation on the part of Putnam, it was the duty of such clerk to add to the assessments to be paid by said Putnam the additional amount as required by the by-laws, and to collect the amount along with the ordinary and regular assessments and any special assessments made by the Sovereign officers or Camp and local camp.

These dues and assessments are subject to changes from time to time in amount, and it could hardly be expected as a practical proposition that each and every member of an order such as this, having, it seems, some 800,000 members, should carefully keep track at all times of the exact amount due, and stand the hazard of a forfeiture of his certificate in case he fails to pay the exact amount, when such failure is not attributable to any intention on the part of the member to evade the payment of any proper amount due, but to the fact that the authorized collector of the Sovereign Camp and local camp failed to request and demand the correct amount. In this case, the collector of the dues and assessments “for the Sovereign Camp having demanded and received of Putnam a certain amount, which it was understood represented the full amount due, and having by his acts in that connection misled the member, Putnam, the Sovereign Camp is not in a position to, and will not be permitted to, take advantage of the default by afterwards insisting upon a forfeiture. Sov. Camp, W. O. W., v. Fraley, 94 Tex. 200, 59 S. W. 879, 882, 51 L. R. A. 898; McCorkle v. Tex. Benevolent Ass’n, 71 Tex. 149, 8 S. W. 516; Simmons v. Modern Woodmen, 185 Mo. App. 483, 172 S. W. 492, 495.

The defendant in this case in its.answer specially pleads:

“That said O. W. Putnam failed and refused to notify the clerk of his camp, Curley Pine Camp, No. 23, Woodmen of the World, Beaumont, Texas,'that he had become a saloon keeper and engaged in the retailing of intoxicating liquors as ¿ beverage, and failed and refused thereafter, while so engaged, to pay to said clerk an additional sum of 50 cents, or any other sum, in addition to the ordinary and regular dues and assessments payable by one of Putnam’s age and year of admission to the order.”

We think in this allegation the defendant strikes at the very gist of this whole matter, and that it was necessary to substantiate these allegations in order to defeat plaintiff’s right to recover, and this the defendant failed to do.

But, presenting the matter in another view, it is pleaded by defendant and earnestly urged before this court that the clerk of the local camp is without the power or authority to waive any of the provisions of the bylaws of the order, ánd that the right of the Sovereign Camp to insist upon the forfeiture cannot be cut off by the actions of the' local clerk, which in effect amount to a waiver of the terms of the insurance certificate and the by-laws. In this connection our attention is called to the following by-laws:

Section 67: “No officer, employé, or agent of the Sovereign Camp, Beneficiary Head Camp, or of any camp has the power, right, or authority to waive any of the conditions upon which beneficiary certificates are issued, or to change, vary, or waive any of the provisions of this constitution and laws. Each and every beneficiary certificate is issued only upon the conditions stated in and subject to this constitution and laws.”
Section 92: “The clerk of the camp shall not, by acts, representations, waivers, or by vote of his camp, have any power or authority not delegated to him or to the camp by the constitution and laws of the order to bind the Sovereign Camp or his camp.”

The first by-law just mentioned is quite broad and sweeping in its restrictions, and it occurs to us there might be some question as to its effectiveness, when applied to the chief officers of the order having general authority to conduct and direct its business; but, however this may be, there can be no doubt as to its validity and effectiveness in so far as it curtails and circumscribes the right of a local clerk or local camp to waive provisions of the by-laws of the order. This right is expressly recognized in the provisions of the Texas laws relating to the incorporation within this state of fraternal beneficiary societies and the admission of such societies incorporated elsewhere into the state for the transaction of business. Rev. Stat. 1911, art. 4847.

We have noticed a number of cases, containing by-laws about as positive as the above, prohibiting the waiver of provisions and requirements by local officers, wherein the courts seem to have held that nevertheless such officers may waive certain material provisions and requirements of the insurance certificate and the constitution and bylaws of the society; but we doubt the soundness of. these decisions and think they go too far along that line. We hardly think that a local officer of such a society, in the face of such restrictions, can be permitted to waive provisions of the insurance contract and the constitution and by-laws of the society, referring now to the term “waiver” in its true sense.

The terms “waiver” and “estoppel” are often used indifferently in the same sense, as if they were interchangeable terms; but there is a distinction which it is often important to keep in mind. Waiver presupposes a full knowledge of a right existing and an intentional surrender or relinquishment of that right. 29 Am. & Eng. Enc. Law, pp. 1091-1093. It contemplates something done designedly or knowingly, which modifies or changes existing rights, or varies or changes the terms and provisions of a contract; but not so with estoppel.

“Waiver is the voluntary surrender of a right; estoppel is the inhibition to assert it from the mischief that has followed. Waiver involves both knowledge and intention; an es-toppel may arise where there is no intent to mislead. * * * Waiver’ involves. the acts and conduct of only one of the parties; estop-pel involves the conduct of both. A waiver does not necessarily imply that one has been misled to his prejudice, or into an altered position; an estoppel always involves this element. * * * Estoppel arises where, by the fault of one party, another has been induced, ignorantly or innocently, to change his position for the worse in such manner that it would operate as a virtual fraud upon him to allow the party by .whom he has been misled to assert the right in controversy.” 40 Oye. pp. 256, 257.

The principle of estoppel in equity stands upon the very foundations of right and fair dealing. It considers and weighs the conduct of men in their dealings with each other, and gives that effect and- meaning to their actions which common sense and just-ice dictate. A fraternal insurance association, such as appellant, is as much subject to the operation of its principles as any other association of persons or as an individual.

The receiving of notice of Putnam’s change of occupation and the collection of additional assessments resulting thereby were among the powers vested in the local camp clerk under the by-laws, and the Sovereign Camp cannot evade responsibility for, or escape the consequence of, acts done by him which are necessarily and inseparably connected with the performance of the duties devolving upon him. The local clerk had notice of all facts relating to, affecting, and controlling the amounts payable by Putnam, and demanded and accepted certain sums as being sufficient, and Putnam relied upon this as being correct, and the Sovereign Camp is estopped from claiming a forfeiture for insufficient payments. Grand Lodge, K. of P., v. Jones, 100 Miss. 467, 56 South. 458; Simmons v. Modern Woodmen, 185 Mo. App. 483, 172 S. W. 402, 495; Trotter v. Grand Lodge, 132 Iowa, 513, 109 N. W. 1099, 7 L. R. A. (N. S.) 569, 11 Ann. Cas. 533, and notes; Illinois Bankers’ Life Ass’n v. Dodson (Tex. Civ. App.) 189 S. W. 992-995; Peterson v. Grand Lodge, 36 S. D. 539, 156 N. W. 70, L. R. A. 1916F, 751, and notes.

It is rather remarkable "that matters should drift along as shown in this case for such a number of years. Both Putnam and the clerk of the local camp were acting in absolute good faith; each thinking and believing at all times that the full amount necessary and required was being paid and collected. There is not the slightest intimation of any intentional wrong on the part of either, or any purpose to evade the payment of any proper amount' due, or on the part of the clerk not to collect all amounts due. The provisions of these by-laws with reference to the increase of assessments refer to quite a number of occupations of a very general character, and it would seem that they would be of frequent application, and often called to the attention of the members of the order, and especially to the attention of the clerk, who is charged with the duty of collecting the increased assessments; but evidently in this instance these requirements in their application to Putnam were entirely overlooked. If any collusion had been shown between the clerk and Putnam, by which it was understood that Putnam was to be relieved of any amount of dues or assessments properly chargeable to him, or had there been an understanding between them by which the clerk undertook to waive the requirements of the by-laws, or even if it were shown that Putnam knew as a matter of fact that he was not paying the amount of dues and assessments required by the terms of the bylaws, then we would have a different case before us.

The trial judge, before whom this case was tried without a jury, in the judgment rendered deducted from the amount sued for, and shown to be due under the terms of the beneficiary certificate, the total amount of the additional assessments which O. W. Putnam should have paid while engaged in the saloon business, and we believe this to be a lawful and fair disposition of the rights of 'the parties.

It follows, from what we have said above, that we are of the opinion that the judgment of the trial court should be affirmed; and it is ordered accordingly.

On Motion for Additional Findings of Fact.

Appellee has filed a motion herein asking the court to make some additional findings of fact. We cannot adopt the findings as proposed and set forth in the motion, as the same contain statements and inferences which we do not believe to be altogether warranted. With reference to the points mentioned in the motion we make, from the record, the following findings:

No specific demand was ever made by Mrs. Pauline Putnam for the return and payment to her by the Sovereign Camp of the assessments collected from O. W. Putnam during the time he was engaged in the saloon business. After the death of O. W. Putnam, and prior to the institution of this suit, the attorneys representing the Sovereign Camp offered to pay Mrs. Putnam $573.90; but the offer was accompanied by the condition that said amount should be accepted in full satisfaction of any claim of Mrs. Putnam against the Sovereign Camp, and the offer was refused. As to whether or not this amount represented as much as the total of these assessments as calculated at the time, or something more than the total of these assessments, is not clear; but it is not made to appear that objection was then made to the offer as not representing the true amount of the assessments collected, and held by the Sovereign Camp. In its answer to this suit the Sovereign Camp tendered to plaintiff the amount of the assessments collected from Putnam after his entry into the saloon business, and the tender was refused, without any objection being made at tbe time as to tbe form or tbe amount of tbe tender.

Tbe by-laws with reference to forfeiture of a beneficiary certificate provide that upon failure of a member to pay assessments when due, he is thereby suspended, and his certificate becomes forfeited, and null and void, and no affirmative action on the part of any of the agents or officers of the association, such as giving notice of suspension and forfeiture, or anything of that kind, is required in order to bring about the suspension and complete the forfeiture. Tbe beneficiary certificate, issued to and held by Putnam, provided for the forfeiture thereof in the above manner. Upon failure of a member to pay the increased or added amount by reason of engaging in one of the so-called prohibited occupations as set forth in the by-laws, such member is, under the terms of the by-laws, suspended, and his certificate forfeited in like manner as if he failed to pay the regular and ordinary assessments, as above mentioned.

The by-law with reference to tbe reinstatement of a suspended member is as follows:

Section 115 (By-Laws 1897): “Should a suspended member personally appear and apply for reinstatement within three months from the date of his suspension and pay all arrearages, if in good health, he shall be restored to membership, and his beneficiary certificate again become valid, as soon as said payment shall have been received and recorded by the clerk of his camp.”

Another of the by-laws is in words as follows :

Section 68 (By-Laws 1915): “When a beneficiary certificate has been in force for five consecutive years immediately preceding the death, while in good standing, of the member holding the same, the payment thereof shall not be contested on any ground other than that his death was intentionally caused by the beneficiary or beneficiaries, or by the hands of justice, or from the direct result of drinking intoxicating liquors, or from the use of opiates, cocaine, chloral, or other narcotic or poison, or shall die while engaged in war, except in defense of the United States of America.”

The complete text of the constitution and by-1'áws in printed form make up a book of about 75 pages, with about 278 words to the page.

On Motion for Rehearing.

In their argument on rehearing counsel for • appellant have cited and quoted from a number of opinions by other Courts of Civil Appeals of this state, particularly the following: Sovereign Camp, Woodmen of the World, v. Rothschild, 15 Tex. Civ. App. 463, 40 S. W. 557; United Moderns v. Pike, 76 S. W. 776; Bennett v. Sovereign Camp, Woodmen of the World, 168 S. W. 1027; Grayson v. Grand Temple, 171 S. W. 489. And it is contended, in effect, that our decision in this case is in conflict with the principles approved in these eases. We have examined and considered thoroughly all of the above cases, and we think it suflicient to say that all of them are cases in which the member of • the order or association, which it was sought to hold liable, had merely failed to pay the regular monthly assessments and dues, and the certificate of the member had been forfeited for that reason, and no facts were presented and established which were sufficient to excuse the default, or to warrant the courts in relieving against the forfeiture incurred.

The first case above mentioned, Sovereign Camp, Woodmen of the World, v. Rothschild, is quoted at some length, and evidently much relied upon, by counsel for appellant. We think that it may be taken as illustrative in a general way of the nature of the other cases cited and quoted. The essential facts of that case, very briefly stated, were these: Rothschild, the member, was delinquent in the payment of his dues for two months, May and June, and under the terms of the by-laws of the association his certificate of insurance had become forfeited, and could be reinstated only by the payment of all delinquent dues. Some time in July following, and the day previous to his death,, the member, Rothschild, paid to the camp clerk $2 for one of the months for which he owed. May, but still left unpaid and delinquent the dues for the month of June, which he said he would pay in a few days. The camp clerk accepted the payment of the May dues without comment. It was contended that the camp clerk, by accepting the dues for May, and remaining silent when the member,' Rothschild, promised to pay in the future : the dues for June, had thereby led the member, Rothschild, to believe that his beneficiary certificate was still in force and effect. The circumstances showed that the member understood his situation and rights in the matter, and he was not in any way misled by the action of the camp clerk. Truly, as said by Judge Einley in holding the association not liable on the certificate, '“there is no ground upon which the claim of estoppel can rest.”

In this ease now before .us, the camp clerk was the person to give notice to, upon Putnam’s change of occupation. For receiving such notice the camp clerk was the plenary agent of the association. Upon being advised of that fact, it was no doubt his duty to. notify his superior officers that Putnam had éntered the saloon business, just as he-should give such notice when a member became a locomotive fireman, a plow grinder, a grindstone turner, a brass worker, or took up any one of the other occupations calling for an increase in the amount of dues payable. The local clerk was the proper person to demand of Putnam and receive the amount of dues payable, and for nine years demands and receives from Putnam certain amounts-as being all that was due. When it is too late to remedy matters, after the death of Putnam, the oversight or omission of duty of the camp clerk or' clerks is quickly found out, the mutual mistake of the parties running through the years is uncovered, and then it is claimed that the position and rights of the association, under the strict letter of the by-laws, are not and cannot be in any way affected, and the onerous burden of forfeiture is to be cast upon the member, who is in truth the less at fault. To approve of such a result would be equivalent to holding that an association like this is exempt from any of the consequences ordinarily arising from the acts of an agent and authorized representative, such as would be recognized and given effect in all other relationships of life, and such a proposition we cannot assent to. See Supreme Lodge, Knights of Pythias, v. Withers, 177 U. S. 260, 267, 20 Sup. Ct. 611, 44 L. Ed. 762, 765.

Counsel for appellant have discussed at some length the general principles on which these fraternal benefit societies, such as appellant, are organized and operate, and seek to found some distinction along that line. We believe we fully understand and appreciate the theory of mutuality of obligation underlying the organization and existence of these societies, with the constitution and by-laws as the bound of union and the measure of each individual member’s obligation to all other members, and of their obligation to him. But after all is said, and looking a.t the laws and rules of this society now before us, the matter resolves itself again simply to this: The camp clerk has been constituted, by all members, we will say, as the person to perform certain special functions within the society. He is to receive notice of changes of occupations; he is to receive and collect dues and assessments; it is the clerk’s particular business to look after these things. The responsibility must rest somewhere, and it has been placed in the camp clerk. It is then only natural and proper that the individual members will rely to a large extent, if not entirely, on the camp clerk in that connection, and surely the society as a whole should bear the responsibility for the acts of the clerk which are exactly in line with his duty. The clerk cannot vary, change, or modify the contract between the member and the society, or excuse its performance by waiving any of the conditions or provisions thereof, it is true; and in this ease the clerk and the member were not undertaking to do this, but, on the contrary, were making an honest effort to comply with its every term. The society must be held to he concluded from long aft-erwards bringing up the question as to the acts of the clerk, in so far as the manner of performing those acts are involved, or the correctness and accuracy of his acts are concerned, and should not be permitted to take advantage of his mere mistakes and omissions.

The motion for rehearing is overruled.
      <&wkey;Eor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BROOKE, J.

text:
    COZIER et ux. v. ANDREWS et al.
    (No. 401.)
    (Court of Civil Appeals of Texas. Beaumont.
    Nov. 28, 1918.)
    1. Limitation of Actions <&wkey;127(14) — Statute of Limitations — New Cause of Action FOB PERSONAL INJURIES.
    Where husband and wife, suing railroad and receiver for injuries to wife, originally alleged actual damages of $140; and exemplary damages of $300, amended petition, after court struck claim for exemplary damages, claiming $290 as actual damages, filed more than two years after cause of action accrued, set up new cause of action for actual damages in excess of $140, barred by two years’ statute of limitations.
    2. Appeal and Error <&wkey;1061(2) — Disposition — Reversal of Dismissal Substantially Required.
    On appeal from decree of dismissal, final in its nature, no reversal would be proper if dismissal was required in view of existing state of pleadings when order was entered, though there must have been error in sustaining particular exception to petition complained of by plaintiff.
    3. Receivers <&wkey;>146 — Judgment Against-Pleading.
    In suit for injuries against railroad and receiver, it being alleged that properties of road had been restored to it (not that receiver was ever discharged), but with assumed liability for all debts and damages during receivership, or that its revenues were expended by receiver in betterments, receiver himself should not be l)eld liable in absence of showing of details of dé-cree discharging him.
    4. Limitation of Actions <&wkey;127(14) — Statute of Limitations — New Cause of Action — Amendment to Make Railroad as Well as Receiver Defendant.
    Where suit for injuries was brought against railroad's receiver alone, but amended cause of action was based on joint negligence of receiver and. railroad, such cause of action, so far as against railroad, was distinct from previous cause of action, and barred by two years’ statute of limitations.
    5. Limitation of Actions <&wkey;127(14) — Statute of Limitations — Action Against Receiver and Railroad — Amendment.
    If plaintiffs were correct in contention that reference to pain and suffering, in original petition against receiver of railroad alone, controlled designation of damages as exemplary, fact would merely have allowed them to amend on same cause of action, and would not allow recovery, notwithstanding railroad’s plea of limitations, on different cause of action, for greater amount of actual damages, and against both receiver and railroad.
    6. Limitation of Actions <&wkey;127(11) — Statute of Limitations — Pleading New Promise or Acknowledgment by Amendment.
    Where a new promise or acknowledgment is pleaded by amendment to take a claim out of the statute, limitations will run against such new promise until the filing of the amendment.
    Appeal from Jefferson County Court, D. P. Wheat, Judge.
    Suit by Thomas Cozier and wife against Prank Andrews, receiver, and another. From judgment of dismissal, plaintiffs appeal.
    Affirmed.
    W. W. Cruse and W. R. Blain, both of Beaumont, for appellants.

      Andrews, Streetman, Burns & Logue, of Houston, for appellees.
   BROOKE, J.

This is a suit for damages for personal injuries received by Mamie Oozier, wife of Thomas Cozier, on or about November 14, 1913, brought against Frank Andrews, receiver of the Beaumont, Sour Lake & Western Railway Company for $140 actual damages, and alleging that by reason of the negligence of the defendant, its officers, agents, and servants, and the great pain and mental anguish they have been damaged in the further sum of $300 as exemplary damages, etc. The original petition was filed April 24, 1915, and plaintiffs’ third amended original petition was filed December 17, 1917, wherein it was averred that the receivership of the said Frank Andrews had been dismissed, and that the property had been turned back to the Beaumont, Sour Lake & Western Railway Company, and judgment was asked against said railway company. Said cause was heard by the court on December 17, 1917, on general demurrer and special exceptions of the defendant Beaumont, Sour Lake & Western Railway Company to the plaintiffs’ third amended original petition, and the court overruled the general demurrer and sustained all of the special exceptions of defendant to said petition, and the cause was dismissed. On the 19th day of December, 1917, plaintiffs filed a motion to set aside the said judgment and grant them a new trial. The motion was by the court, on the 28th of December, 1917, overruled, and plaintiffs in open court duly excepted, and gave notice of appeal, and have perfected their appeal to this court.

In appellants’ first assignment of error the action of the court is challenged, as follows:

“The court erred in. sustaining defendant’s special exception, contained in paragraph 2 of its second amended original answer, because it is not true, as alleged in said special exception, that plaintiffs’ cause of action for actual damages in excess of the sum of $140, as alleged in ¡the fifth paragraph of plaintiffs’ original petition herein, is barred by the two years’ statute of limitation, for the reason that plaintiffs’ original petition, having stated facts which constitute in law a good cause of action against the defendant, and the elements of actual damages only and upon which a recovery for actual damages only could have been had, the averment of the pleader that the damages sustained by her and claimed for her physical pain and mental anguish were exemplary, and) the prayer for recovery as such does not change the legal effect of the facts stated in said original petition as to her cause of action, and plaintiffs’ third amended original petition stating substantially the same facts as a basis for recovery, and with the averment that such pain and anguish suffered by her were actual damages, did not set up a new cause of action.”

The second assignment of error will be considered in connection wth the first assignment, and is as follows:

“The court erred in sustaining the special exception contained in the fourth paragraph of the defendant’s second amended original answer to said third amended original petition, and in holding that this court was without jurisdiction in this cause, for the reason that it appears from the plaintiffs’ original petition and from the facts alleged therein, as a basis for recovery, that the averments of the pleader to the effect that the plaintiffs had suffered actual damages in the sum of $140 and exemplary damages in the sum of $300 was merely a mistake of the pleader and would not alter the legal effect of - the facts pleaded, which showed that the damages suffered and claimed and for which recovery was sought were actual damages, and, although said third amended original petition was filed more than two years after plaintiffs’ cause of action accrued, yet the same did not set up a new cause of action, nor was the court without jurisdiction to try this suit, as the same was alleged and pleaded in plaintiffs’ original petition, or as alleged and pleaded in plaintiffs’ third amended original petition.”

It is urged by appellants that, plaintiffs’ original petition having stated a cause of action, the third amended original petition is only an enlargement of same, and does not set up a new cause of action; and that actual damages sought in paragraph 5 of the original petition are not limited to $140, and the pleading shows that there was mental anguish and pain suffered; and' that the claim of actual damages changed from $140 in the original petition to $290 in the third amended petition does not set up a new or different cause of action under the facts as alleged; and that where an original petition claimed $300 as exemplary damages, charged to consist of negligence of the defendant, its officers, agents, and servants, and the great pain and mental anguish suffered, an amended petition dividing said sum of $300 claimed as exemplary damages, adding $150 of the same to actual damages for mental anguish and pain, and $150 thereof for exemplary damages, does not introduce a new cause of action.

On the contrary, it is urged that the action of the court in sustaining the exceptions of defendant to plaintiffs’ third amended original petition, as contained in paragraph 2 of defendant’s second amended original answer, was in all things justified, because, in view of the rule of construction of pleadings that the same must be construed strictly against the pleader in cases of special exceptions, it appears that plaintiffs’ cause of action, in so far as she ever had any cause of action for actual damages, in excess of the sum of $140, was barred by the two years’ statute of limitation, this being shown by reference to plaintiffs’ petition in tire case; and that this judgment being an appeal from a decree of dismissal, final in its nature, no reversal will be proper if the dismissal was required, in view of the existing state of the pleadings at the time the order was entered, notwithstanding the fact that there must have been error in sustaining the particular exception complained of in appellants’ first assignment; and, since it appears upon inspection of plaintiffs’ petition that it does not state a cause of action against either of the parties defendant, the court’s action will necessarily be upheld in dismissing the suit, when plaintiffs refused to amend.

The original petition devotes the fourth paragraph to the averments of actual damages in detail. The fifth paragraph constitutes a résumé of the damages claimed, which includes $140 for actual damages, and $300 claimed as exemplary damages. The court decided that there were no allegations in the petition sufficient to support a recovery of exemplary damages, and pursuant to such holding was under the necessity of striking from the pleadings that portion of the claim for damages. The amended pleading seeking to meet this situation endeavored to split the $300 originally referred to as exemplary damages, and take on one-half of it to the previously mentioned $140 actual damages, in order to bring the amount up to $290, and within the jurisdiction of the county court. The court, in sustaining the exceptions complained of in appellants’ first assignment of error, held, in substance and effect, that the cause of action for actual damages in excess of $140 was barred by limitation. To determine that this was the case, the court necessarily referred to the original petition already mentioned. Such reference revealed the fact that the $300 item, now sought to be split by appellant, included the claimed exemplary damages. If any part of it was intended to apply to exemplary damages, and not to pain and suffering, such part so applied could not be availed of subsequently as a claim that an additional amount could be recovered, notwithstanding the bar of limitation under the claim of actual damages. There was no basis in the first petition to determine what amount of the $300 would go to compensate for pain and mental anguish, even assuming that we allow plaintiffs this construction, and the court was required, in response to the exceptions, to hold that there was no previous effective suit for actual damages in excess of the amount of $140, and, so holding, the court was under the necessity of later dismissing the action, plaintiffs failing to amend.

This judgment, therefore, being an appeal from a decree of dismissal final in its nature, no reversal would be proper if the dismissal was required in view of the existing state of the pleadings at the time the order was entered, notwithstanding the fact that there must have been error in sustaining the particular exception complained of in» appellants’ first assignment; and, it appearing from an inspection of plaintiffs’ petition that it does not state a cause of action against either of the parties defendant, the court’s action should be upheld, in our opinion, in dismissing the suit,' when plaintiffs refused to amend.

As to the receiver, it is alleged that the properties were restored to the railway corporation; but it is not alleged that the receiver was ever discharged. As to the corporation it is alleged that its properties Were returned to it “with assumed liability # for all debts and damages accruing during the pendency of such receivership,” or that the revenues of the company, during the receivership, were expended by the receiver in bet-terments of the property. Clearly, the receiver should not be held liable under these allegations, since the properties had passed from his hands, and there being no showing whatever as to the details of the decree, under which the receivership was terminated, in our opinion, no court would, on such pleading, enter a judgment against the .receiver. It then becomes a question whether or not a cause of action is stated as against the railway company. It is alleged that on or about November 14, 1913, and for many months prior to and since said date, defendants “did and has operated a line of railroad extending from Beaumont, in Jefferson county, Tex., to Houston, in Harris county, Tea, known as the Beaumont, Sour Bake & Western Railroad, and on the day and date aforesaid, operated a motor ear over its said line of railroad for the conveyance of passengers.” The next paragraph alleges that Mamie Cozier did on November 14, 1913. purchase a ticket from Beaumont to Houston, Tex., over the route of the Beaumont, Sour Lake & Western Railroad, and became a passenger between said two points on said railroad, and that “because of and on account of the negligence of the defendants, its agents, servants, and employes, * * * ” plaintiff sustained certain damages alleged in detail.

Paragraph 4 of the petition alleges plaintiffs’ theory for exemplary damages, being in part that “Mamie Cozier is a negro, and the defendants knowing the same,” etc. Thus, it is seen that as against the Beaumont, Sour Bake & Western Railroad Company the cause of action is predicated upon an operation directly of the properties and of a direct breach of duty toward Mamie Cozier, and is not predicated upon any theory that the railway company would be liable for the receiver’s breach of duty. In paragraph 5 of plaintiffs’ petition this language is used:

“Because of the willful negligence of its officers, agents, and servants as aforesaid, she has been damaged in the further sum of $150.”

This was intended, clearly, to refer to the officers, agents, and servants of the railway corporation; the theory evidently being that the principal would necessarily have to respond in damages on account of a breach of duty by its agent. Now, the original petition shows that the railway company was not then a party to the suit, and the original suit was predicated upon the negligence of the receiver, its officers, agents, and servants. This consideration supports the action of the court in holding that limitation had barred the claim for actual damages set up in the amended pleading in excess of $140. The reason for this is that the original cause of action being based upon the negligence of the receiver, his servants and agents, the amended cause of action iá based upon joint negligence of the receiver and the railway company, their servants and agents, and in so far as being a cause of action against the railway corporation, it is distinct and different from the previous cause of action, because theretofore no cause of action had been asserted against the receiver or the railway ■corporation in any sense based upon negligence of such railway corporation, its servants and agents, either in whole or in jjart.

Upon a careful examination of the pleading, we are of the opinion that these assignments must be overruled.

Since the petition upon which the plaintiffs elected to stand attempts to allege a cause of action based upon a breach of duty joiüt in its nature, and in so far as it alleges any cause of action against the railway corporation, it is based upon a breach of duty in which the agents and servants of said fail-way corporation were supposed to have participated, and since there does not appear in the petition any averments upon which liability of the railway company for any breach of duty of the receiver, his agents and serv-vants, could be predicated as against the railway corporation, the trial court was correct in holding that the two years’ statute of limitation had barred the claim for actual damages in excess of $140, since as a matter of law the entire action was barred as regards the corporation, even though under proper allegations a cause of action not subject to the bar could have been stated.

Assuming that appellant is correct in the contentions that reference to pain and suffering in the petition would control the designation of the damages as exemplary damages, this conclusion would merely have allowed an amendment upon the same cause of action asserted originally against the receiver. It would not allow a recovery notwithstanding the plea of limitations upon a different cause of action. Testing whether or not the amended pleading sets up a new cause of action, it appears from the pleadings that the receiver alone was concerned in the first action; but in the second the corporation is brought in as an active party, supposed to have been operating its properties, either jointly with the receiver, or through its own servants and agents, independently of the receiver. The negligence referred to in the amended pleading is negligence of the corporation. This conclusion is unavoidable in view of the use of the word “its.” Furthermore, the amended pleading does not allege the appointment or qualification of a receiver. It does not allege a contract with the .receiver whereby Mamie Cozier was to be carried from Beaumont to Houston, but does allege that she bought a ticket, and leaves the implication open that if she contracted with anybody for this transportation it ■ was with both of the defendants, or with the railway corporation, and it is necessarily conclusive that this is not the same cause of action originally sued on. Western Union Tel. Co. v. Arnold, 97 Tex. 365, 77 S. W. 249, 79 S. W. 8. That plaintiffs’ amended petition sets up a new cause of action so that the railway corporation is clearly entitled to the plea of limitations, see Connoly v. Hammond, 58 Tex. 11; Beal v. Alexander, 6 Tex. 531 ; Woods v. Huffman, 64 Tex. 98; Morales v. Fisk, 66 Tex. 189, 18 S. W. 495; Tribby v. Wokee, 74 Tex. 142, 11 S. W. 1089; Ry. Co. v. Buckalew, 34 S. W. 165; Bigham v. Talbot, 63 Tex. 271. See, also, Ry. Co. v. Scott, 75 Tex. 84, 12 S. W. 995; Lynch v. Ortleib & Co., 87 Tex. 590, 30 S. W. 545; Phœnix Lbr. Co. v. Houston Water Co., 94 Tex. 456, 61 S. W. 707.

Where a new promise or acknowledgment is pleaded by amendment for the purpose of taking a claim out of the statute, limitations will run against such new promise until the filing of an amendment. Erskine v. Wilson, 20 Tex. 77.

In our judgment, from an examination of the record, there was no error in the action of the lower court, and it is therefore in all things affirmed.
      ig^jFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: WALTHALL, J.

text:
    WILLYS-OVERLAND CO. OF CALIFORNIA et al. v. CHAPMAN et al.
    (No. 878.)
    (Court of Civil Appeals of Texas. El Paso.
    Nov. 7, 1918.
    On Rehearing, Dec. 12, 1918.)
    1. Sales <&wkey;451 — Necessity for Registration — Wiiat Law Governs.
    A conditional sale of an automobile in California, where it is not necessary to register the instrument, upon removal of the automobile to Texas by the purchaser, will be considered a chattel mortgage under Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 5654, 5655, and unless registered in Texas will be void as against bona fide purchaser.
    2. Replevin &wkey;103(2) — Pleading — Prayer eor Relief.
    In an action of replevin, where defendant’s prayer for relief was that plaintiffs take nothing by their suit, a judgment that defendant have and recover of plaintiffs the property in question was not supported by the pleadings.
    3. Appeal and Error &wkey;>1073(l) — Harmless Error — Judgment.
    Where, in replevin suit, defendant’s prayer was that plaintiff take nothing by his suit, the rendering of a judgment that defendant have and recover of plaintiff the property in question, although improper, was not reversible error.#
    4. Replevin &wkey;>75 — Damages.
    In replevin for possession of automobile, or for its value, and rent, plaintiff was not entitled to rent, where the judgment was for the value of the automobile, but was entitled to 6 per cent, on such sum from the date of taking.
    On Rehearing.
    5. Sales <&wkey;456 — Conditional Sales — Lease —Wiiat are “Chattel Mortgages.”
    An instrument in the form of a lease contract of an automobile is a “chattel mortgage,” within Vernon’s Sayles’ Ann. Oiv. St. 1914, arts. 5654, 5655. where a sale of the automobile was in contemplation and the lease contract was taken to secure payment.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Chattel Mortgages.]
    6. Words ahd Phrases — “Public Policy.”
    The “public policy” of a state is manifested by public acts, legislative and judicial.
    [Ed. Note. — iFor other' definitions, see Words and Phrases, First and Second Series, Public Policy.]
    7. Sales (&wkey;452 — Full Faith and Credit-Chattel Mortgage.
    Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 5654, 5655, making void, as to bona fide purchasers, instruments made to secure purchase price of personal property when not registered although executed in another state where they were not required to be registered, do not deny citizens of such other state any rights, in that they fail to give full faith and credit to the public acts of the other state.
    8. Courts <&wkey;247(7) — Certifying Questions —Conflicting Decisions.
    In determining what constitutes a conflict in opinions of appellate courts such as would warrant a certification of the question, the cases must be of such a nature that one would operate to overrule the other in case they were both rendered in the same court.
    Appeal from El Paso County Court, at Daw;- W. P. Brady, Judge.
    Suit by the Willys-Overland Company of California and another against William Chapman and others. From a judgment favoring part of the defendants, plaintiff appeals.
    Affirmed.
    McKenzie & Loomis and Chas. R. Loomis, all of El Paso, for appellant.
    Turner & Jones and W. O. Hamilton, all of El Paso, for appellees.
   WALTHALL, J.

This suit was brought by appellants, Willys-Overland Company of California and Automobile Insurance Company, against William Chapman, Mrs. W. E. Chapman, and W. S. Wiley, to recover the title and possession of an automobile, or, in the alternative, for its value and rent. The following áre substantially the facts in the case :

The Willys-Overland Company of California, a corporation, its place of business, San Francisco, owned the automobile in controversy. On the 3d day of July, 1916, said corporation, in the city of San Francisco, entered into a lease contract with Mrs. W. E. Chapman, then residing in San Francisco, the contract providing that the corporation leases to Mrs. Chapman, and Mrs. Chapman leases and hires from the corporation, the automobile; that Mrs. Chapman agrees to pay the corporation “for the rental hire and use” of the automobile the sum of $595 as follows: $200 cash, $40 on the 3d day of each following month for nine months, and $35 on the 3d day of the tenth month, with 6 per cent, interest then payable on the deferred rent payments. The lease terminated on the 3d day of May, 1917. Mrs. Chapman agreed not to dispose of the automobile, or take or allow it to be taken out of the state — the corporation retained the title. Mrs. Chapman by its terms took immediate possession, and was to retain possession so long as she complied with the terms of the contract. In the event Mrs. Chapman should fail to comply with the terms in any respect, the corporation, under the provision of the instrument, could take possession of the automobile, and all payments made to be applied as compensation for depreciation in value, for use and rental and as liquidated damages; Mrs. Chapman waiving all right to the money paid and the option to purchase. At the expiration of the lease term, the automobile should be returned to the corporation. In the event Mrs. Chapman had complied with the terms and conditions of the agreement, she should then have the right to purchase the automobile for the sum of $5, when the transfer and sale to her would take place. In the event of suit, Mrs. Chapman agreed to pay costs and attorney’s fees. The lease contract contained other features not necessary to state. Before suit filed, the Willys-Overland Company of California made an assignment of the lease agreement to the Automobile Insurance Company. About September 3, 1917, Mrs. Chapman and her husband, William Chapman, without the knowledge or consent of appellants or either of them, and with intent to convert the automobile to their own use, removed said automobile from San Francisco, Cal., to El Paso, Tex., and failed to further comply with the terms of the lease agreement, and in February, 1917, and without the knowledge or consent of appellants or either of them, sold and delivered at El Paso, Tex., said automobile to the Cadillac Sales Company. The Cadillac Sales Company thereafter sold and delivered said automobile to W. S. Wiley. Appellants used due diligence to locate and recover said automobile. The lease contract was not recorded nor required to be recorded in California, nor was it recorded'in Texas. Neither the Cadillac Sales Company nor Wiley had actual or constructive notice of the lease contract, and as to each of them the sales were for value received. Under the laws of the state of California, a married woman may contract the same as if she were a feme sole. The laws of California do not require the registration for any purpose of contracts for conditional sales of personal property, and said contract is good and enforceable in California under the laws of that- state. On locating the automobile in this state, appellants used due diligence in making demand for its possession, and, on refusal to deliver same, appellants employed an attorney and sequestrated the automobile. W. S. Wiley retained possession by giving replevin. bond with A. B. Ryan and Robert Homan as sureties. No rent for the use of the automobile, other than the $240 as agreed in the lease contract, has ever been paid to appellants or either of them. The value of the rent for the use of the automobile is $5 per day if rented by the day, or $25 per week if rented by the week.

The facts pleaded by appellants' and appel-lees were along the lines stated above, appellants praying for the title and possession of the automobile and, in the alternative, for its value, and for its rental value from date of conversion to date of judgment, and for costs including attorney’s fees. In addition to general demurrer, special exceptions, and general denial, appellee Wiley pleaded that he was a bona fide purchaser for value without notice; that the lease contract was a chattel mortgage and was not recorded in El Paso county, Tex.; and prayed that appellants take nothing by their suit. The trial before the court without a jury resulted in a judgment denying appellants the relief prayed for as against William Chapman and 'W. T. Wiley and the sureties on Wiley’s re-plevin bond; judgment for appellants against Mrs. Chapman for $500 with interest, and attorney’s fees; judgment in favor of William Chapman against appellants for the title and possession of the automobile and in favor of Wiley and sureties on the replevin bond for title and possession of the automobile, and in favor of William Chapman, Wiley, and sureties, against surety on appellant’s sequestration bond for all costs.

Opinion.

Appellants under four assignments of error, and several propositions under each, complain of the judgment rendered. We think we need not discuss in detail all of the questions presented. Were appellants, under the facts stated, entitled to judgment for the title and possession of the automobile as against Wiley? The contention of appellee Wiley is that, having purchased the automobile in El Paso county, Tex., from the Cadillac Sales Company, for value and without notice, actual or constructive (having no actual notice and the instrument under which appellants claim never having been recorded in El Paso county, Tex., or elsewhere in Texas), appellants should not recover against him; that while in California the lease contract is a conditional sale, and the laws of that state do not require its registration to give it effect as to innocent purchasers for value without notice; in Texas it is a chattel mortgage, and the statutes of this state and the decisions of the courts declaratory of the public policy of this state fix the status of such contracts and make them void as to third persons unless recorded; and that the Texas rule requiring registration applies alike to all such instruments, though executed and to be performed in California and effective there, to have effect here must be recorded here, for the reason that the instrument executed and to be performed in California has no extraterritorial effect. A great many cases, and some of the text-books we have examined, sustain appellant’s contention, especially the case of Adams v. Fellers, a South Carolina ease, reported in (88 S. C. 212, 70 S. E. 722) 35 L. R. A. (N. S.) 385, and the cases in the supplementary note reporting that case. We need not review that case nor the cases referred to in the note, as we think the Texas courts have adopted the opposite rule, holding that under circumstances, similar to those of this case, a purchaser for value without notice, of property brought into this state, obtained a good title. Our Supreme Court, in Crosby v. Huston, 1 Tex. 235, held that the rule that the nature, validity, obligation, and interpretation of contracts should be determined by the lex loci contrac-tus, is not to be extended to the defeat, over our laws, of rights which occurred under them after the property was found within their jurisdiction. The principle of the rule as above stated, we think, is clearly announced in Crosby v. Huston, supra, and applied in the following cases: Sanger v. Jesse French Piano & Organ Co., 21 Tex. Civ. App. 523, 52 S. W. 621; Best v. Farmers’ & Merchants’ Bank, 141 S. W. 334; Farmer v. Evans, 192 S. W. 342 — under facts very similar to this case. Under facts somewhat dissimilar to this case, the same principle is announced in Weider v. Maddox, 66 Tex. 377, 1 S. W. 168, 59 Am. Rep. 617, and Fowler v. Bell, 90 Tex. 150, 37 S. W. 1058, 39 L. R. A. 254, 59 Am. St. Rep. 788. While it is true that as a general rule a contract valid where made is valid everywhere and will be enforced everywhere, there is an exception to the rule as firmly fixed as the rule itself, to the effect that comity is not permitted to operate within a state to the prejudice of its government, in opposition to its settled policy or the interests of its citizens. The Legislature made no exception in favor of foreign conditional contracts or chattel mortgages executed and effective in other states, where the property embraced in such instrument is subsequently brought into this state and here sold, in enacting articles 5654 and 5655, Vernon’s Say les’ Civil Statutes.

By the third assignment, appellants complain of the judgment awarding title and possession, of the automobile to appellees on the ground that appellees’ pleading and prayer for relief is not sufficient to justify such judgment. Under the statute, the prayer for relief is an essential part of the petition. Burks v. Burks, 141 S. W. 337. The relief prayed for by appellee Wiley, other than in his cross-action, was that appellants take nothing by their suit. This was the proper prayer, and the judgment should have been that appellants take nothing by their suit. The judgment rendered is that Wiley and his sureties on the replevin bond, naming them, do. have and recover of and from appellants and its sureties the automobile in question. The judgment rendered, while not in proper form, is to the same effect as the judgment that should have been entered. We think the error is not reversible. 'As said by the court in McKee v. West, 55 Tex. Civ. App. 460, 118 S. W. 1135, in a trespass to try title case, under a plea of not guilty, and where the appropriate judgment for defendant is that plaintiff take nothing by this suit, a further adjudication of title and right of possession would comprehend no more than that involved in an adjudication that plaintiff1 take nothing. See, also, French v. Olive, 67 Tex. 403, 3 S. W. 568. The assignment is overruled. The judgment will be reformed so as to read that appellants take nothing by their suit. To that extent only the assignment is sustained.

By the fourth assignment, appellants complain of the judgment rendered in their favor against Mrs. Chapman. It is claimed that plaintiffs’ measure of damages for rent of the automobile should have been the market rental value, instead of 6 per cent, interest on the value of the automobile, as allowed by the court. Plaintiffs prayed for judgment against her for the market value of the automobile and rental value from September 3, 1916, to date of judgment, December 4, 1917. The court rendered judgment against Mrs. Chapman for $500, the value of the automobile, and six per cent, interest on said $500 from October 1, 1916, to the date of the judgment. Had plaintiffs recovered the automobile from Mrs. Chapman, the measure of their damages for rent would have been the market value during the time of its detention. But having recovered of Mrs. Chapman the value of the automobile rather than the automobile, the measure of the damages would be the 6 per cent, interest on the value recovered to the date of the judgment. The assignment is overruled.

Under the above-cited authorities of our courts, we hold that the court was not in error in rendering judgment in favor of appel-lee.

Judgment affirmed.

On Rehearing.

Appellants, in their motion for a rehearing, strongly urge that this court is in error in affirming the judgment of the trial court, and submit three grounds of error. They also insist that we review Blythe v. Crump Bros., 28 Tex. Civ. App. 327, 66 S. W. 885, and Sealing v. First National Bank, 39 Tex. Civ. App. 154, 87 S. W. 716, used in their brief, but to which we made no reference in disposing of the case. In view of the fact that, as we are advised, another case is pending in this court involving the identical question disposed of in this case, we have concluded to more fully express our views upon some features of the case. It is insisted that, under the facts found and stated in the opinion, Mrs. Chapman had no title to the automobile and was unlawfully in possession of same, and that therefore Wiley acquired no title. The insistence is that Mrs. Chapman was the bailee of the automobile merely; that having failed to comply with the terms of the contract under which she was in possession, in several particulars, she forfeited whatever rights she had under the termsi of the contract, and was in fact amenable to a criminal prosecution under article 1348, Vernon’s Criminal Statutes, for having fraudulently converted the automobile to her own use, she having possession thereof under a contract of hiring. The terms of the contract under which Mrs. Chapman was put in possession of the property is set out in the opinion. It is referred to by appellants as a lease contract and is so designated by the contract itself. But while it is in form of bailment for hire, it provides for and had in view by its terms a sale of the automobile upon the conditions stated. Some confusion is found in the earlier reports in efforts to distinguish between the different forms of contract under which parties undertook to secure the unpaid balance of the purchase price where a sale of a chattel was in contemplation by taking some kind of security on the thing sold. In some instances, the instruments were held not to be within the registration laws, owing to the interpretations to be placed upon the contract, thus confusing the question of its registration to the injury of third persons, and thus favoring secret reservations of title, and conducive to fraud and collusion. Knittel v. Cushing, 57 Tex. 354, 44 Am. Rep. 598; Dunn v. Elser, 2 Willson, Civ. Cas. Ct. App. § 720, and cases there referred to. We need not go into a discussion of those cases, but refer to them solely for the purpose of enabling us to more fully appreciate and apply the purpose and need of the two registration articles of the statute as amended, referred to in the opinion.

The state’s public policy is thus manifested in the two articles of the statute. Article 5654 declares that all reservations of the title to or property in chattels as security for the purchase money thereof shall be held to be chattel mortgages and, when possession is delivered to the vendee, is void as to creditors and bona fide purchasers, unless such reservations be in writing and registered as required of chattel mortgages, and the only exception made in the article is that it shall not be construed to contravene the landlord and tenant act. Registration is essential to give the instrument effect as to creditors and bona fide purchasers where possession is given by the owner to the purchaser. Brothers v. Mundell, 60 Tex. 246; Keller v. Smalley, 63 Tex. 519; Bowen et al. v. Lansing Wagon Works, 91 Tex. 385, 43 S. W. 872; Eason v. De Long, 38 Tex. Civ. App. 531, 86 S. W. 347, and cases cited. It is insisted, however, that the registration of the instrument required by the above article has no application to the contract in this case for the reason that Mrs. Chapman, having no title could convey none. That, probably, is a correct statement of the law as formerly stated in some of the opinions. We think the confusion in some of the earlier decisions referred to above is removed by the enactment of the above article 5654. See Judge Willson’s note at end of Dunn v. Elser, supra. Since the enactment of the above article of the statute, the uniform holding of our courts is that all reservations of title to property in chattels are chattel mortgages, and, when, possession is delivered to the vendee, the reservation of title, unless registered, is void as to bona fide purchasers, such as we- find Wiley to be. If such is not the effect of the statute, it has but little, if any, application. The contract certainly by its terms contains a reservation of title. It provides for a sale of the automobile; possession was delivered to the vendee; Wiley purchased without notice of the reservation, or any of the conditions in the contract. It is immaterial as to the form of the contract. The equity of Wiley in making the purchase is made by the statute a legal right and grows out of the fact that he has parted with a valuable consideration for the thing-purchased without notice of the reserved title or other provisions in the instrument. Appellants insist, under this ground of error, that it is not contrary to the public' policy Of this state to award them the relief prayed for, and refer to the article of the Penal Code (supra) under which, it is claimed, Mrs. Chapman could be prosecuted for a crime in disposing of the automobile. If such be true, and wo are not dealing with that branch of the case, it would follow that article 5654, supra, would have no application if Mrs. Chapman, by disposing of the automobile, would be guilty of the crime indicated in the article of the Penal Code referred to. But public policy has been designated by Mr. Justice Burroughs as “an unruly horse pursuing us, and, when you once get astride of it, you never know where -it will carry you.” We think, however, the public policy of the state as between appellants and Wiley is fixed by the articles of the Civil Code, supra. Public policy is manifested by public acts, legislative and judicial. Giant Powder Co. v. Ry. Co. (C. C.) 42 Fed. 470, 8 L. R. A. 700; Picket Pub. Co. v. Commissioners, 36 Mont. 188, 92 Pac. 524, 13 L. R. A. (N. S.) 1115, 122 Am. St. Rep. 352, 12 Ann. Cas. 986.

The sustaining of the judgment of the-court as to Wiley is not, in our judgment, denying to appellants any right they had under the law of the state of California, in that we fail to give full faith and credit to the public acts of that state, as claimed in appellants’ second ground of error.

We are requested to discuss Blythe v. Crump and Scaling v. Bank, supra. Whether the cases are in conflict or not in conflict, we think we need not discuss them. If in conflict, we do not follow them. The cases speak for themselves. Our opinion in this case would not in the least settle a conflict between our holding and the holding in those cases. But for the statement of the Seventh Court of Civil Appeals in Farmer v. Evans, 192 S. W. 343, and referred to in our opinion, we would not think Blythe v. Crump in conflict, under the facts of that case, as tested by the rule laid down by the Supreme Court in San Mutual Insurance Co. v. Roberts, 90 Tex. 78, 37 S. W. 311, in determining what constitutes a conflict. Under that rule, to be in conflict, the rule announced in the Blythe-Crump Case and the case at bar “must be based practically upon the same state of facts and announce antagonistic conclusions,” or of such a natux-e that one would operate to overrule the other in case they were both rendered in the same court. In the first place, we note that the Blythe-Crump Case and Sanger v. Jesse French P. & O. Co., 21 Tex. Civ. App. 523, 52 S. W. 621,'referred to in our opinion, were decided by the same court. Judge Templeton, in writing the opinion of the court in the Blythe-Crump Case, does not refer to their former opinion in the Sanger v. Jesse French P. & O. Co. Case. We must infer that the court did not consider the two opinions in conflict. In the Blythe-Crump Case, the main and controlling issue was the question of priorities of the two mortgages which was not determined by the judgment rendered, and which the court held necessary to a proper disposition of the case. In deciding the Blythe-Crump Case, the court did not refer to the Oxosby v. Huston Case, nor to articles 5654 and 5655 of the statute, but while not referring to any decision of our own courts, following in part the rule laid down by some of our own courts prior to the enactment of the articles of our statute above referred to, but made no reference to any of them. It still is not clear to us that the court intended to announce a rule in that case different to that announced in the Sanger v. Jesse French P. & O. Co. Case, as it is stated:

“When Crump Bros, took their mortgage, they had no notice of Shuptrine’s lien; and, in so far as they were incumbrancers for value before they received such notice, their mortgage was superior to his.”

And-the court says, the case not having been tried on the issue of superiority of liens, the court could not determine from the record whether Crump Bros.’ lien was superior to Shuptrine’s. However that may be, we are of the opinion that the statute of - this state, in the articles referred to, control the issue as to the superiority of the respective titles as between appellants and Wiley. Much of what we have said applies to Scaling v. First National Bank. We need not review tlie case at length, hut refer to the case for the facts. The court nowhere undertakes to apply the articles of the statute referred to above to the facts of that case.

We are asked to certify the question considered upon the ground that our decision is in conflict with Blythe v. Crump and Scaling v. Bank, supra. We do not think there is such a conflict under the rule announced in Insurance Co. v. Roberts, supra, as to require this court to certify. After a very careful consideration, we believe the conclusion reached by this court is correct, and, in view of the congested condition of the docket of the Supreme Court, we are not disposed to further incumber that docket by certifying questions unless we are clearly of the opinion that we should do so. In this case, we think no such question is presented.

For the reasons indicated, the motions for rehearing and to certify are both overruled.
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