author: CONDET, C. J.

text:
    NACOGDOCHES COMPRESS CO. v. HAYTER.
    (No. 126.)
    (Court of Civil Appeals of Texas. Beaumont.
    June 1, 1916.
    Rehearing Denied Oct. 12, 1916.)
    1. Justices of the Peace <&wkey;174(22) — Appeal — -FuktheR Pleadings.
    Where, in an action originating in a justice court, the pleading's were oral, the parties could orally replead in the county court, and the pleadings need not be as full and specific as is required when a case originates in the county court.
    [Ed. Note. — For other cases, see Justices of the Peace, Cent. Dig. § 688; Dec. Dig. i&wkey;> 174(22).]
    2. Appeal and Error <&wkey;662(3) — Scope — Conclusiveness of Record.
    A bill of exceptions accepted by the appealing party binds him, and statements therein as to the status of the pleadings must be taken as true.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 2852; Dec. Dig. i&wkey;>662(3).]
    3. Factors <®=s66 — Actions—Right to Maintain.
    A cotton factor who engaged in repeated transactions with the defendant in behalf of his principal could maintain action in his own name for a conversion of the principal’s cotton stored with defendant by such factor.
    [Ed. Note. — For other cases, see Factors, Cent. Dig. §§ 96-103; Dec. Dig. &wkey;>66.]
    Appeal from Nacogdoches County Court; J. F. Perriette, Judge.
    Action by S. B. Hayter against the Nacog-doches Compress Company. From a judgment of the county court affirming judgment of the justice court for plaintiff, defendant appeals.
    Affirmed.
    Harris & Harris, of Nacogdoches, for appellant. Blount & Strong, of Nacogdoches, for appellee.
   CONDET, C. J.

This suit was instituted in the justice court, precinct No. 1, Nacog-doches, Tex., by appellee against appellant, the appellee filing with the justice the following statement of his demand:

“Nacogdoches Compress Company, in account with S. B. Hayter. Total value óf 3 bales of lint cotton deposited with said Nacogdoches Compress Company during the fall of 1912 for the account of S. B. Hayter, and which said 3 bales of cotton,' though demanded of said compress company, have not been delivered to said Hayter.
Value . $180 00
Interest for one year. 10' 80
Total. $190 80”

Citation was issued, and appellant appeared and answered, and upon trial of the cause judgment was rendered in favor of the plaintiff therein. An appeal was '' taken to the county court, and there the cause tried by the court de novo, before a jury, and the same verdict and judgment rendered. From this judgment an appeal has been taken to this court.

The undisputed evidence in the record shows that the plaintiff, who lived in Nacog-doches county, had shipped to him from Huntington, Tex., by R. P. McKewn, about 200 bales of cotton, for the season of 1912; that in the month of December 92 bales of said cotton were delivered to the appellant, he receiving' receipts therefor; that all of said cotton was shipped by the said Mc-Kewn to the appellee in his own name, and was stored by the appellee with the defendant compress company, and that the compress company redelivered, upon surrender of the receipts held by appellee, all of said cotton except the 3 bales in controversy. The appellee was acting for McKewn in the handling and sale of said property, and accounted for all of the proceeds in a settlement theretofore had between them. The evidence of the appellant shows that the appellee made demand on it for the 3 bales of cotton, and that when such demand was made, investigation revealed the fact that the 3 bales of cotton in controversy were shipped out on the order of another buyer of Nacogdoches, through a guaranty made by the buyer that he would thereafter procure and surrender the warehouse ticket therefor. The 3 bales of cotton in dispute were never at any time delivered to the appellee, or, so far as the record shows, to McKewn.

The only question raised under appellant’s several assignments of error is that no authority is shown by the appellee to recover any judgment in this cause, inasmuch as the evidence shows that appellee was not the owner of the cotton sued for, nor the owner ■of the cause of action, but that McKewn, another and different person, was the owner of the same, and that neither the pleadings nor the proof show that any trust or agency existed between the plaintiff (appellee) and the said McKewn.

Where in an action originating in a justice court the pleadings are oral, as they were in this case, the parties may orally re-plead in the county court, and the pleadings need not be as full and specific as is required when a case originates in the county court. Loomis v. Broaddus, 134 S. W. 743.

We have no way of telling what the oral pleadings were in the justice court or in the county court, as the record is silent on that subject. However, in approving one of the hills of exception, the trial judge, in his qualification of said bill, states that the pleadings, in his opinion, were sufficient to authorize a recovery by the appellee as the agent in possession of the property. This bill is accepted by the appellant, and it is therefore bound and committed thereby, and the statement of the court as to the status of the pleadings must be taken as true. Railway Co. v. Settle, 104 Tex. 142, 135 S. W. 116; Cyphers v. State, 67 Tex. Cr. R. 504, 150 S. W. 187.

There is no merit in the contention that the proof failed to show that any trust or agency existed between the appellee and Mc-Kewn, the real owner of the cotton. The evidence is undisputed that the appellee was a cotton factor, handling and selling the cotton of McKewn. The cotton, some 200 bales in number, was shipped by McKewn to appellee, a large portion of which, if not all, was stored by appellee with the appellant. A receipt for said cotton was issued by the appellant, and given to appellee. Thereafter appellee sold at different times all of said cotton except the 3 bales involved in this suit. In these transactions he demanded and received the cotton of his principal, and his authority was recognized by the appellant so to do. There is no denial of the claim that the appellant has failed to account for the 3 bales of cotton in dispute. (Under the facts and circumstances of this case, there being a conversion of the property, appellee was authorized to maintain in his own name this action against the appellant. Kendall v. Calder, 2 Posey Unrep. Cas. 732.

Finding no error in the action of the trial court, this cause is affirmed; and it is so ordered.
      <te>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: HENDRICKS, J.

license: Public Domain

text:
    CALDWELL NAT. BANK v. REEP et al.

    (No. 913.)
    (Court of Civil Appeals of Texas. Amarillo.
    June 28, 1916.
    Rehearing Denied Oct. 4, 1916.)
    1.Alteration of Instruments <&wkey;6 — Note— Material Alteration — Stipulation.
    Where a note stipulated that the drawers, indorsers, sureties, etc., waived presentment for payment, protest, and notice of protest, notice of nonpayment, and agreed that the time of payment might be extended without notice to them, or without their consent, and without affecting their liability, and the bank which held the note, innocently and pursuant to an agreement with a signatory thereto, canceled the due date and inserted a later date, the alteration destroyed the note as an obligation, despite the stipulation, which meant that those secondarily liable waived the matters mentioned, and that, if the note was extended as to the principal, the liability of the secondary parties would not be affected.
    [Ed. Note. — For other cases, see Alteration of Instruments, Cent. Dig. §§ 30-33; Dec. Dig. <S&wkey;6.]
    2. Alteration of Instruments <&wkey;23 — Note —Recovery on Original Consideration.
    While a material, though innocent, alterasion of a note, destroys it as_an obligation, and as a premise for recovery, under appropriate conditions recovery may be had on the original consideration.
    [Ed. Note. — For other cases, see Alteration of Instruments, Cent. Dig. «§ 192-207; Dec. Dig. <®=^23.]
    3. Bills and Notes <&wkey;540 — Action—Pleading — Judgment on Renewed Note.
    In a bank’s action on a note, where the original petition, after setting out in usual form the execution and delivery of the note, and after alleging delivery of collateral as security, averred that to secure a note for another amount, which was renewed by the execution of the note in suit, a defendant made to a trustee his deed of trust to secure the payment of the other note, the lien existing for its amount and interest being incorporated in the -note in suit, the matter describing the other note was incorporated in the petition merely as matter of description and inducement, and the trial court properly refused to render judgment on the other note.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1918-1934; Dec. Dig. i&wkey;> 540.]
    4. Bills and Notes &wkey;>540 — Action—Pleading — Judgment on Renewed Notes.
    In a bank’s action on a note, where the first paragraph of the supplemental petition simply reiterated that two original notes were merged into that in suit, declaring that all the notes contained a stipulation as to an agreement for an extension of time, the second paragraph averred that the bank was the owner and holder of all the notes, and had acquired them for valuable consideration, etc., there being no liability on the note in suit, the court properly refused to render judgment on the original notes; the supplemental petition evidencing no intention of recovery or desire for judgment on them.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1918-1934; Dec. Dig. t&wkey;> 540.]
    5. Bills and Notes <&wkey;540 — Action—Pleading — Declaration for Judgment.
    In a bank’s suit on a note given to renew two others, where plaintiff averred in the second paragraph of its supplemental petition that it was the owner and holder of all the notes, without any notice of an agreement between defendants, the defense having been pleaded, by a defendant, of an agreement with his codefendant, there was no declaration of liability upon the original notes for judgment.
    - [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1918-1934; Dec. Dig. &wkey;> 540.]
    Appeal from District Court, Fisher County; John B. Thomas, Judge.
    Action by the Caldwell National Bank against M. D. Reep and others. From a judgment for the named defendant, plaintiff appeals.
    Judgment affirmed.
    A. H. Kirby, of Ft. Worth, L. H. McCrea, of Roby, and Theodore Mack, of Ft. Worth, for appellant. 'John W. Woods, of Rotan, and Harry Tom King, of Abilene, for appel-lees.

      Application for writ of error pending in Supreme Court.

   HENDRICKS, J.

September 4, 1911, M. D. Reep, the appellee herein, executed two notes, dated September 4, 1911, each matur-jug six months from date, in favor of the Cowboy State Bank & Trust Company; one of said notes being for the principal sum of $1,297.44, and the other for the sum of $1,272. The note for $1,297.44 was secured by a deed of trust on section No. 138, in block No. 2, Houston & Texas Central Railroad Company survey, save and except a 200-acre homestead in the southwest corner of said section, said land situated in Scurry county. Before the maturity of these notes the Caldwell National Bank, the appellant herein, became the legal owner and holder of the same, by transfer and delivery. On February 3, 1912, M. D. Reep executed a note for $2,697.91, on its face payable to the order of the Cowboy State • Bank & Trust Company, and due, according to the recitation in the note, on March' 3, 1912. This note was signed by one Sim Lewis, who bore the attitude to Reep of a principal upon said note, on account of some contract entered into between Lewis and Reep, and Reep’s obligation to Lewis on the note was that of surety, ihis note, though formally made to the Cowboy State Bank & Trust Company, as payee, was in reality executed for the benefit of the Caldwell National Bank, for the purpose of merging and extending the time of the indebtedness evidenced by the two first notes mentioned. The Cowboy State Bank & Trust Company immediately forwarded this note to the Caldwell National Bank, the appellant herein, and upon which, in so far as the obligation of Reep is concerned, he still bore to said bank the attitude of a principal, as upon the two first notes, with the contractual relation of Lewis as that of surety to that bank.

The Caldwell National Bank sued Lewis and Reep on this note for $2,697.91, and judgment by default was rendered against Lewis. Reep, among other things, pleaded a material alteration of the particular note, and at the trial it was established that said alteration was evidenced by the following facts: This note, as stated on its face, had a due date of March 3, 1912. At or before its maturity, Lewis entered into an agreement with the officers of the Caldwell National Bank that, in consideration of placing additional security by him as collateral to said note, and the payment of interest on the same to October 3, 1912, said note would be extended to the latter date. It was also a part of this agreement that Lewis was to pay the interest on June 18th on the note for the extension. He delivered the security as per agreement, and the bank drew on him, in compliance with the -agreement as to the date, June 18th, the interest was to be paid, and said draft was promptly paid, which consummated the contract of extension to October 3d. One of the officers of the bank, conducting the particular transaction, made a mark of cancellation through the date' “March 3d,” and inserted just above the alteration “June 18,” making the note read, according to the alteration, June 18, 1912, as the due date of the same. This note, following the obligation to pay principal, interest, and attorney’s fees, contains this stipulation:

“The drawers, indorsers, sureties, and guarantors severally waive presentment for payment, protest and notice of protest, notice of nonpayment, and agree that the time of payment may be extended without notice to them, or without their consent, and without affecting their liability.”

The argument is made: That, upon this stipulation, when the bank substituted June 18, 1912, as the time of the payment of said note, upon the agreement with Lewis for the extension, the legal effect of the instrument was not changed; hence the alteration was immaterial. That, when it was agreed with Lewis that for a consideration the note should be extended, the change of the date in the face of the note is no more than writing on the back of the same an extension of the time of payment.

It was attempted to be shown that, on account of a letter written by Reep to the Caldwell National Bank, at a time when the negotiations between the bank and Lewis were pending for the extension, Reep agreed to said extension. The record does not bear out this contention. Reep agreed to an extension of the note to some period of time in November — not to October 3, 1912.

We do not think the stipulation above quoted, in regard to the waiver of the presentment for payment, protest, and notice of nonpayment, and extension of time without affecting liability, would affect the particular question. Evidently the stipulation means that, those who are secondarily liable on the note waived the matters mentioned as to presentment, protest, and notice of nonpayment, and that, if said note was extended as to the principal of same, the liability of said parties would not be affected. The word “drawers” is evidently not inserted to mean the makers, as principals, upon said note. The due date in the face of the note is a material portion of same, for many conceivable reasons unnecessary to mention. “* * * A change of such time [the due date] is obviously of the same nature as a change in the date — identical in principle and effect; and whether such change delays, accelerates, or preserves in legal effect, the time specified or implied for payment, it constitutes a material alteration.” 2 Daniel on Neg. Insts. (6th Ed.) § 1377. The time of payment of this note as to Reep, the maker, was not extended when Lewis put up additional collateral and anticipated the interest by payment. Hence the due date as to him remains the same; the extension only to Lewis, whom the trial court found bore the attitude of surety to the' bank. Even if Lewis had the right, under the stipulation quoted, to extend the time of payment as to Reep, the principal, we seriously question that the alteration should be considered an immaterial one, notwithstanding in a sense it might be urged that, when the agreement for extension was made, the due date in the face of the note in law became immaterial. Whether extended or not, however, the first due date in a note may, as to many matters, under some conditions, become quite material. The preservation of the identity of the instrument, and preventing the substitution of another instrument, without the privity of the party concerned, is also a reason actuating the law in declaring the note void. Greenleaf on Evidence, § 565. To destroy the due date in a note, and make an extension speak such date, and disguise it as an extension, destroys the paper as to its successive changes and different contracts.

We think it is inferable, and the trial court had the right to find, that the alteration made by the officer of the bank was not made willfully, but for the purpose of conforming to what he conceived to be the agreement with Lewis for the extension. The contention of the officer of the bank, who. testified at the trial, was that Lewis was unable to pay the interest when the note matured March 3, 1912, but in consideration of the extension promised to pay it January 18th', and, if the money were not paid January 18th, the extension to October 3, 1912, would not have been granted; in other words, his testimony is susceptible of the construction that the payment of the interest June 18th ■was a precedent condition to the extension, hence he changed the maturity date of the note in conformity with what he conceived to be an agreement for a first extension. However, as stated, we think the due date is material.

The innocent intention of the bank in materially altering the note, though destroying it as an obligation, and as a premise for recovery, under appropriate conditions, however, the party could recover upon the original consideration. Otto v. Halff, 89 Tex. 384, 34 S. W. 910, 59 Am. St. Rep. 56.

It is assigned that the trial court should have rendered judgment on the original notes first mentioned, the one for the principal sum of $1,297.44, and the other for $1,272, executed by Reep and merged into the $2,600 note signed by Reep and Lewis, which was altered by the bank. The original petition of the Caldwell National Bank, after setting out in the usual form the execution and delivery of the note for $2,697.91, payable to the Cowboy State Bank & Trust Company, and after alleging the - delivery of certain collateral, as security for -the payment of said note, averred:

“That to secure a note for $1,297.44, dated September 4, 1911, due on or before six months after date, with interest at the rate of 10 per cent, per annum, executed by M. D. Reep, payable to the order of the Cowboy State Bank & Trust Company, which said note of $1,297.44 was renewed by the execution of said note for $2,697.91, said defendant M. D. Reep made, executed, and delivered to John W. Woods, as trustee, his certain deed of trust * * * by the execution and delivery of which a deed of trust was given on said land, to secure the payment of said note for $1,297.44, and said lien existing for said amount and interest is incorporated in said note for $2,697.91.”

It is quite evident that the pleader, in describing the note for $1,297.44, does so as a matter of description and inducement, for the purpose of showing that it was secured by the deed of trust upon the real estate, and that the same was merged into the larger note ($2,697.91) actually sued upon. There is no averment in the original petition upon any obligatory feature in the note for the purpose of evidencing an intention of recovery, or of a desire for judgment; said allegation presenting evidentiary facts in order to show that such note, with its security, had been extended into the larger one, and afforded a basis for a recovery upon the mortgage, with a foreclosure of same to that extent upon said larger note.

The supplemental petition does not assist the pleader. For the purpose of ascertaining its meaning, we note that Reep, the defendant, had answered in the fifth paragraph that the extension of the $2,600 note, without his consent, had released him, and, further, the execution of said note was in satisfaction of the two previous notes. The further idea is carried into the eighth paragraph of his answer, in pleading that he was released from the larger note when the same was executed, for the reason that, when delivered to the Cowboy Bank, said bank, as the agent of the Caldwell Bank, understood that as between him and Lewis he was released from the former notes, and said Cowboy Bank knew of the changed relationship he bore to the original indebtedness, as a principal to that of surety, on account of his contract with Lewis, and 'that said extension also released him from the note sued upon. The first paragraph of the supplemental petition is simply a reiteration that the two smaller notes were merged into the larger note, with the further declaration that all of the notes contained the stipulation (herein-before quoted) as to the agreement for extension ; the second paragraph averring that it was the owner and holder of all the notes, and had acquired the same for a valuable consideration, without notice of any agreement between Lewis and Réep. The agency of the Cowboy Bank is denied in the supplemental petition, and the trial court found that said bank was the agent of Reep and Lewis only.

When the plaintiff averred, in the second paragraph in the supplemental petition, that he was the owner and holder of all the notes, without any notice of the agreement between Reep and Lewis — meaning the agreement pleaded by the defendant Reep as to his contractual status with Lewis — clearly it is not a declaration of liability upon the notes for judgment. It is a reply to the defense pleaded by Reep, which is accentuated by thereafter denying in the replication the alleged agency by the Cowboy Bank of Reep. ,

We think the whole of plaintiff’s supplemental petition is one of challenge, in reality, to the averments in the answer, without evincing an issue presented to the trial court on the two smaller notes for judgment. The pleading is not alternative in its nature; that is, if denied relief on account of the material alteration of the $2,600 note, plaintiff solicits a judgment on the original consideration, evidenced by the smaller notes. In the original petition it is clear that the mortgage, alleged as having been given as security for the $1,297 note, is not presented for the purpose of foreclosure upon the establishment of that note as a debt in judgment; merely a ' pleading, as stated, exhibiting that said $1,297 note is merged, as a part of the consideration, into the larger note, to show that said security is extended as collateral to said larger note. The supplemental petition does not pretend to present for judgment the foreclosure of the mortgage in satisfaction of any debt; hence, if the original petition does not present the deed of trust for the purpose of foreclosing it as security to the $1,297 note, the failure to present the mortgage and ask for a foreclosure in the supplemental petition evidences an intention not to recover in an action of debt on any part of the original consideration in the supplemental petition.

One of the smaller notes is not even mentioned in the original petition; in the supplemental petition the amount of same, except by calculation, is not averred; neither is the rate of interest mentioned. The closing paragraph of the supplemental petition asserts that “said notes” have been placed in the hands of an attorney for collection, “and the fees therein stipulated the plaintiff has agreed to pay their attorneys * * * in representing them in this cause.” It is not averred in any pleading that the fees stipulated in the smaller notes would accrue to anybody for any purpose, or upon what condition said fees could be earned by any person.

We think the trial court was correct, upon the condition of the pleadings, in not rendering judgment upon the original consideration, and his judgment is in all things affirmed.
      fe^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HARPER, C. J.

text:
    EUREKA ICE CO. v. BUCKLOO.

    (No. 597.)
    (Court of Civil Appeals of Texas. El Paso.
    June 17, 1916.
    Rehearing Denied Oct. 5, 1916.)
    1. Damages <&wkey;20S(4) — Action fob Injury— Issues — Loss of Earnings.
    In a servant’s action for personal injury, where there was evidence that he was earning $14 per week when injured, and that for some time thereafter he was unable to perform any work, there was no error in submitting an issue as to the reasonable value of the time lost on account of his injury.
    [Ed. Note. — For other cases, see Damages, Cent. Dig. §§ 533, 534; Dec. Dig. &wkey;208(4).]
    2. Trial <&wkey;351(5) — Special Issues — Mattes Covebed by General Charge.
    In a servant’s action for injury, there was no error in refusing to submit defendant’s special issue as to whether the risk of slipping in oil or grease on the engine room floor was a risk ordinarily incident to plaintiff’s employment as a stationary engine fireman, where the issue was sufficiently submitted by the special issue of the general charge as to whether the risk of plaintiff’s foot slipping at the time and place of the injury was a risk assumed by him.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 834; Dec. Dig. &wkey;>351(5).]
    3. Trial <&wkey;232(2) — Special Instruction— General Verdict.
    In a servant’s action for injury, submitted on special issues, a special charge calling for a general verdict was properly refused.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 524; Dec. Dig. <&wkey;232(2).]
    4. Master and Servant <&wkey;278(3) — Action for Injury — Sufficiency of Evidence — Negligence.
    In a suit for damages for personal injury to a stationary engine fireman who slipped in a puddle of oil and fell against the driving rod of an engine, evidence held to sustain a finding that defendant was negligent in allowing the puddle to be and remain upon the floor.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. § 958; Dec. Dig. <&wkey;> 278(3).]
    5. Master and Servant <&wkey;278(8) — Sufficiency of Evidence — Safe Place to Work — Lights.
    In such action preponderance of evidence held not against the finding that the building near the engine was not properly and sufficiently lighted.
    [Ed. Note. — For other eases, see Master and Servant, Cent. Dig. § 958; Dec. Dig. <&wkey;> 278(8).] ■
    6. Appeal and Error <&wkey;1003 — Review-Preponderance of Evidence.
    A mere preponderance of evidence against a finding will not, under the rules, authorize a reversal; but, where the statement of facts shows that the preponderance and weight of the evidence are such as to indicate that the jury have not been governed thereby in arriving at a verdict, appellate courts have the authority to reverse for new trial.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3938-3943; Dec. Dig. <S&wkey; 1003.]
    Appeal from District Court, Harris County; John A. Read, Judge.
    Action by Oscar Buckloo against the Eureka Ice Company. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    Hunt, Myer & Teagle and Moody & Boyles, all of Houston, for appellant. L. E. Blank-enbecker, John Lovejoy, and Presley K. Ewing, all of Houston, for appellee.

      Application for writ oí error pending in Supreme Court.

   HARPER, C. J.

This suit was brought by appellee to recover damages of appellant for personal injuries. He alleged that at the time of his injury he was in the employ of the defendant as a stationary engine fireman at its plant, where the defendant was engaged in the manufacture and distribution of ice; that at or about 9 o’clock at night, while he was engaged in his duties, it became necessary for him to leave the fire-room, where his main duties were performed, to go to the storage tank of defendant, located about 100 feet from said fireroom, to get a drink of water; that in doing so he went along the regular passageway leading from said fireroom to said storage tank, and that in doing so it was necessary for him to pass by the driving shaft of the engine, which was located by the side of said passageway; that the plaintiff, after getting the water, began to return toward said fire-room along said above-described course, which was the regular and proper course by which to return, and began to follow the direct path or course to said fireroom, when his foot, after he had gone a short distance, came in contact with a puddle of grease in said passageway, which caused his said foot to slip from under him,- causing him to lose his equilibrium and fall down, into, and against said driving rod, which was revolving very rapidly and with great force, so that his shoulders and head and the upper part of his body came in contact with said driving shaft, with the result that he was seriously and permanently injured; that said injuries and the fall causing the same were proximately caused by the negligence of the defendant, its vice principals and agents, in this, in negligently failing to furnish plaintiff a reasonably safe place to work, in that the defendant, its vice principals and agents, had negligently allowed and permitted a large puddle of grease or oil to be and remain in said passageway, and also allowed and permitted said passageway to be and remain greasy and oily about and near to said revolving shaft, by permitting particles or bumps of grease or oil to be near said shaft. And the plaintiff alleges that the defendant, its vice principals and agents, were negligent in allowing the same to be and remain in said passageway, and in thus allowing the same to be there, negligently failed for the defendant in its nondelegable duty to furnish the plaintiff a reasonably safe place in which to work and perform his duties, and negligently exposed him to an unusual and extraordinary hazard; that the defendant, its vice principals and agents, were further negligent in that they failed to have said passageway properly lighted, and to have and maintain the lights in working condition and proper order, the light along said way being too dim to enable plaintiff to see and distinguish such dangerous objects as said grease, which was imminently liable to cause him to fall into said revolving machinery; that the plaintiff was thereby negligently exposed to an extraordinary danger and hazard by the defendant, the presence of which he did not know, but which the defendant and its vice principals and agents did know of, or would and should have known of by the exercise of ordinary care in time to have remedied the same, but negligently took no steps to remedy the same or to discover the same, and negligently failed to warn the plaintiff thereof, the defendant thus failing in its nondelegable duty to furnish the plaintiff a safe place in which to perform his duties, and negligently exposing him to extraordinary hazards and dangers which he did not assume; that each and all of said acts were negligence and each and all proximately caused and contributed to the plaintiff’s fall and the injuries consequent therefrom.

Defendant answered by special denials as to the existence of the puddle of grease and other grounds of negligence, denied that the injuries were permanent, and pleaded contributory negligence and assumed risk.

The cause was submitted by special issues, which issues and the answers thereto are as follows, to wit:

“(1) Was the plaintiff injured on or about the date alleged in his petition by falling into or against the driving rod or shaft of defendant’s engine? Answer: Yes.
“(2) Had the plaintiff and other employés been customarily going to the storage tank of defendant for drinking water? Answer: Yes.
“(8) If you answer the next preceding issue in the affirmative, then answer the following: Was such done with the knowledge and consent of defendant? Answer: Yes.
“(4) Was plaintiff, at the time of his injury, returning from a trip to the defendant’s storage tank for water? Answer: Yes.
“(5) Was there, or not, at the time of the alleged injury, a large puddle of grease or oil in the passageway between the defendant’s fire-room and the storage tank near the driving rod or shaft of the engine which plaintiff is alleged to have fallen against? Answer: Yes.
“(6) If you have answered the last two preceding issues in the affirmative, • and only in that event, you will then answer the following question: While the plaintiff was returning from the water tank, did his foot come in contact with said puddle of grease or oil? Answer : Yes.
“(7) In the event you have answered the next preceding issue in the affirmative, then you will answer the following question: Was or was not the plaintiff thereby caused to fall into and against the driving rod or shaft of the engine? Answer: Yes.
“(8) In the event you have answered the sixth, seventh, and eighth issues in the affirmative, and only in such event, then you will answer the following: Was the defendant guilty of negligence in allowing said puddle of grease or oil to be and remain there? Answer: Yes.
“(9) If you have answered the next preceding issue in the affirmative, then you will answer the following question: Was such negligence a proximate cause of the injury ? Answer: Ygg
“(Í0) Did the defendant have the said building by and near to the driving shaft of the engine properly and sufficiently lighted? Answer: No.
“(11) If you find there was improper and insufficient lighting, was it due to negligence on the part of defendant? Answer: Yes. .
“(12) If you find there was such defective and insufficient lighting, then was the same a proximate cause of plaintiff’s injuries, if any? Answer: Yes.
“(13) Was plaintiff negligent in causing or contributing to cause his injuries in working at the ice .plant while under the influence of any drug or medicine which rendered him temporarily incapable of. protecting himself against moving machinery? Answer: No.
“(13Í4) Was plaintiff guilty of negligence in causing or contributing to cause his injury in being where he was at the time and place he was injured? Answer: No.
“(14) The employer owes a duty to the.employs to exercise ordinary care to provide a reasonably safe place for the performance of the employé’s duty. An employs is held in law to assume the risks arising from such dangers as are ordinarily incident to his employment; but he does not assume risks from dangers arising from negligence of the employer, unless he knows thereof, or in the performance of the duties of his employment must necessarily know thereof. Risks from dangers due to negligence of the employer which are known to the employs, or in the performance of his duties must necessarily be known to the employs, are assumed by him. Bearing the foregoing instructions in mind, you will answer the following: Was the risk of plaintiff’s foot slipping at the time and place of its occurrence (if it occurred) one of the risks assumed by plaintiff? Answer: No.
“(15) What sum of money will fairly and adequately compensate the plaintiff for the injuries, if any, which he has alleged and proved to have suffered on the occasion in question? Answer by stating the amount. In answering this question, you will take into consideration as elements of damage, if proved: (1) Mental anguish and physical suffering to plaintiff on account of such injuries, if any, including such as he will, in reasonable probability, suffer therefrom in the future, if any; and (2) the reasonable value of his time already lost on account of such injuries, if any; and (3) the reasonable value of necessary medical attention on account of such injuries, if any; and (4) the reasonable value, if paid now, of his diminished capacity to labor and earn money in the futux-e on account of such injuries, if any? Answer: $7,500.
“(16) Was plaintiff’s injury due to his carelessly and negligently permitting his clothing to come in contact with the revolving wheel or piston rod or other portion of the machinery? Answer: No.'
“(17) If you find that, as alleged by the plaintiff, there was oil or grease on the floor of the engine room when and where plaintiff was injured, and you further find that the fact that such oil or grease was there was negligence, then in that event you will answer the following: Was the presence of the oil or grease on the floor due to the negligence on the part of the employs, Gohr, or the employs, Cannon? In answer to this question you will write the name of the SmployS whom you so find to be negligent; and if you find both of them to have been negligent, then so state; and if you find neither of them to have been negligent, then so state. Answer: Cannon and Gohr.”

Upon the foregoing answers the court rendered judgment for plaintiff for $7,500, from which this appeal is prosecuted.

The first assignment is that the court erred in submitting to the jury subdivision No. 2 of special issue No. 15, because there was no evidence before the jury upon which they could fairly and reasonably find the amount of damages plaintiff had sustained, if any, on that account. There is evidence that plaintiff was earning $14 per week at the time he was injured, and there is evidence that for some time after the accident and injury he was unable to perform any labor, and, we think, sufficient upon which to base a finding for the value of the time lost.

The second is that the court erred in refusing to submit special issue requested by defendant which reads:

“Was such risk of slipping in oil or grease on the engine room floor such a risk as was ordinarily incident to the employment in which plaintiff was then engaged? Answer Wes’ or ‘No,’ as you may find the facts to be.”

The court did not err in refusing this special charge because the issue is sufficiently submitted by special issue No. 14 of the general charge, quoted above.

The third is that the court erred in refusing to give the following special charge:

“Unless you believe from a preponderance of the evidence that the plaintiff slipped in oil or grease and fell, and that the accident resulted therefrom, as alleged by him, you should not consider any other issue submitted to you, but return a verdict for the defendant.”

It will be noted that this is a special charge calling for a general verdict. As such, it was not error fo refuse to give it. I. & G. N. Ry. Co. v. Reek, 179 S. W. 699.

The ¿fourth, fifth, and sixth assignments charge that the findings of the jury that there was a puddle of grease in the passageway by which he was caused to fall into and against the driving rod of the engine is not supported by the preponderance of the evidence. We have carefully read the entire statement of facts, and from this reading are of the opinion that there is sufficient evidence to sustain the allegation of plaintiff that he slipped in a puddle of oil.

The seventh is that the finding by the jury that the defendant was guilty of negligence in allowing the puddle of grease or oil to be and remain upon the floor is unsupported by the evidence. The proposition is that unless the defendant knew of the existence of the defect, or could have known of it by the exercise of ordinary care on its part, there can be no recovery. The statement of facts shows only two ways by which the oil could have gotten onto the floor by any act of defendant’s agents and employes—one that the oiler spilled it there. The evidence shows that this occurred at times, and that it was the duty of certain employés to clean it up when it happened, and the same rule applied if the pit underneath the engine got so full that is slopped out over the sides. There is evidence that upon this particular night the passageway by the engine was poorly lighted, and that the man whose duty it was to oil the engine and the man whose duty it was to see that the oil was kept cleaned up were not at their posts of duty for some time—one witness said for 40 minutes. No witness testified affirmatively that there was no oil there at the time plaintiff claimed he slipped xn the oil. Several testified that after the accident there was oil all around the place. So, with the affirmative testimony of the plaintiff that he slipped in the oil, together with the testimony that neither of the two persons whose duty it was to keep tlie premises clean of oil were attending to their duties upon this night, but were drinking, etc., we think this sufficient to support the finding of the jury in the respect complained of.

The eighth is that the preponderance, of the evidence is against the finding of the jury that the building near the engine and driving shaft was not properly and sufficiently lighted. Two witnesses testified that the lights were dim. Whitehead testified that after the accident he had to call for another lamp so he could see how to clean up the oil, etc. There were only four persons there. Two testify that the lights were dim and two that they were all right. The two who testify to their being all right were charged with the duty of keeping them so, and three witnesses testify that these two men were not about the work that night for some time before the accident, but were on the outside of the building, drinking beer.

A mere preponderance of the evidence would not, under the rules, authorize a reversal of this cause, but, where the statement of facts shows that the preponderance and the weight of the evidence is such as to indicate that the jury have not been governed thereby in arriving at a verdict, appellate courts have authority and do reverse causes for new trials, but we see no such condition indicated by this record. In fact, in case of each . material issue, witnesses testify affirmatively both ways, and it seems that this is a case peculiarly within the province of the jury to determine the credibility of the witnesses and the weight fo be given to their testimony, and, since the jury have resolved it in favor of the plaintiff, we cannot disturb their verdict.

The other assignments from 9 to 14, inclusive, attack the findings of the jury in the same way; that is, that such findings “are without evidence to support them” or such findings are against the weight or the preponderance of the evidence, etc. We fail to see how it could serve any good purpose for this court to go through the statement of facts and call out and quote the testimony of the witnesses, and the circumstances which support these findings; so, applying the observations next above to the other assignments, we overrate them without further comment. ft l c ,*v

Affirmed.
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text:
    PRUDENTIAL LIFE INS. CO. OF TEXAS v. PEARSON.
    (No. 1018.)

    (Court of Civil Appeals of Texas. Amarillo.
    June 28, 1916.
    Rehearing Denied Oct. 4, 1916.)
    1.Corporations <&wkey;99(2) — Capital Stock-How Paid — “Monet Paid” — “Property Actually Received.”
    A note, even if secured by trust deed, is neither money paid nor property actually re- ' ceived within Const, art. 12, § 6, providing that no corporation shall issue stock except for money paid, labor done, or property actually received, and .a corporation cannot accept a naked note for stock.
    [Ed. Note. — For other eases, see Corporations, Cent. Dig. § 445; Dec. Dig. <&wkey;99(2).
    For other definitions, see Words and Phrases, First and Second Series, Actually Receive; Second Series, Money Paid.]
    2. Contracts <&wkey;137(l) — Consideration-Partial Illegality — Effect.
    If any part of consideration in a contract is illegal and not severable, the whole consideration is void, whether the illegality arises from statute or common law.
    [Ed. Note. — For other cases, see Contracts, .Cent. Dig. §§ 701, 706-712; Dec. Dig. &wkey; 137.(1).]
    3. Insurance <&wkey;33 — Stock—Consideration —Partial Illegality.
    Although Rev. St. art. 4711, provides that the capital stock of insurance companies may oonsist of valid first mortgages on realty, an insurance company cannot, in view of Const, art. 12, § 6, issue stock for note and trust deed, though it could invest in such security after the stock was paid.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 38; Dec. Dig. &wkey;>33.]
    4. Corporations, <&wkey;106 — Charter—Forfeiture — Who May Sue — Parties in Pari De- . LICTO.
    A corporation is particularly charged with knowledge of its powers, in view of Vernon’s Sayies’ Ann. Civ. St. 1914, 'arts. 1146, 1147, as to forfeiture of charter for illegal issuance of stock, and therefore cannot defeat a subscriber’s action to cancel a note and trust deed given for stock, which it was illegal for the corporation to accept, on the ground that the plaintiff was in pari delicto with it.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 456-458; Dec. Dig. &wkey;106.]
    5. Corporations <&wkey;>99(l) — Capital Stock-How Paid — “Loan.”
    Corporation, empowered to issue stock only for money, labor, or property received, having illegally accepted note and trust deed for stock, cannot defeat the maker’s suit for cancellation on the ground that the transaction was a loan.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. § 444; Dec. Dig. <&wkey;99(l).
    For other definitions, see Words and Phrases, First and Second Series, Loan.]
    6. Corporations <&wkey;99(l) — Capital Stock-How Paid — “Innocent Purchaser.”
    Neither is the company an innocent purchaser.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. § 444; Dec. Dig. @=^99(1).
    For other definitions, see Words and Phrases, -First and Second Series, Innocent Purchaser.)
    '.<■ Error from District Court, Hale County; R. C. Joiner, Judge.
    Suit by H. S. Pearson against the Prudential Life Insurance Company of Texas. Decree for plaintiff, and defendant brings error.
    Affirmed.
    Jas. A. King, of Floresville, and Mathes & Williams, of Plainview, for plaintiff in error. Madden, Trulove, Ryburn & Pipkin, of Amarillo, and O. D. Russell and L. R. Pearson, both of Plainview, for defendant in error.

      Application for writ of error pending in Supreme Court.

   HENDRICKS, J.

This suit was brought by H. S. Pearson, in the district court of Hale county, Tex., to rescind a subscription eon-tract to 16 shares of stock of the Prücfeñtial Dife Insurance Company of Texas, and to cancel a note for $3,200, representing the purchase price of said stock, and an accompanying deed in trust on 610 acres of land, executed to secure said note. The plaintiff, Pearson, alleged elements of fraud, consisting of certain representations relied upon by him in executing the subscription contract, note and mortgage. The court, on the theory, evidently, of the invalidity of the note and deed in trust as being in violation of the Constitution having been given in consideration for the issuance and delivery of the stock, peremptorily instructed a verdict in favor of the plaintiff for cancellation. In this cause the stock was actually issued and delivered, and the note and deed in trust were actually executed, one for the other.

“No corporation shall issue stock or bonds, except for money paid, labor done or property actually received, and all fictitious increase of stock or indebtedness, shall be void.” Article 12, § 6, State Constitution.

It is argued that the note and deed in trust given for the stock constituted “property” within the meaning of the constitutional provision. On this question, that the note and deed in trust constituted property within the meaning of the constitutional provision, the following Texas authorities are cited for the purpose of enforcing the point: Cole v. Adams, 92 Tex. 171, 46 S. W. 790; O’Bear-Nester Glass Co. v. Antiexplo Co., 101 Tex. 432, 108 S. W. 967, 109 S. W. 931, 16 L. R. A. (N. S.) 520, 130 Am. St. Rep. 865; Aggs v. Shackelford Co., 85 Tex. 145, 19 S. W. 1085; Ft. Worth Imp. Dist. No. 1 v. City of Ft. Worth, 106 Tex. 148, 158 S. W. 164, 48 D. R. A. (N. S.) 994.

The Supreme Court, in the case of Cole v. Adams, 92 Tex. 171, 46 S. W. 790, 'supra, held that an option contract and a construction contract constituted such property when transferred to the corporation for stock as not to be inhibited by the provision of the Constitution and could be lawfully accepted by the corporation in exchange for its stock.

The case of Aggs v. Shackelford County, 85 Tex. 145, 19 S. W. 1085, supra, holds that a mortgage is property within the.meaning of the article of the Constitution which provides that no person’s property shall be taken, damaged, or destroyed, for, or applied to public use, without adequate compensation. The case of Ft. Worth Imp. Dist. No. 1 v. City of Ft. Worth, 106 Tex. 148, 158 S. W. 164, 48 D. R. A. (N. S.) 994, reiterates the doctrine. The case of O’Bear-Nester Glass Co. v. Antiexplo Co., 101 Tex. 431, 108 S. W. 967, 109 S. W. 931, 16 L. R. A. (N. S.) 520, 130 Am. St. Rep. 865, though it held that an unpatentable secret formula was not the character of property which could be transferred for stock, is cited as disclosing the purpose of the convention in enacting the constitutional provision in question and that the particular note and mortgage constitutes such property, the transfer of which fdr stock is consistent with the spirit and purpose of the enactment.

/' No one can question the general principle (that a note, and deed in trüsfj~constitute ^property; however, as applied to this record, is it the species of property for which a corporation could issue its stock, and not excluded by the nomenclature of the Constitution? The issuance of the stock must be for “money paid,” “labor done,” or property “actually received.” We are remitted to our own courts as to the solution of the question.

If you shear the mortgage from the transaction, the issuance of stock for the note is prohibited; the note is neither “money paid” nor property “actually received” within the constitutional provision. McCarthy v. Texas Loan & Guaranty Co., 142 S. W. 97; Mason v. First National Bank of Paint Rock, 156 S. W. 366; San Antonio Irrigation Co. v. Deutschmann, 102 Tex. 201, 105 S. W. 486, 114 S. W. 1174.

The case of McCarthy v. Texas Loan & Guaranty Co., supra, though comparatively recent, is so forcibly argued, and aptly presented, by Justice Higgins of the El Paso .court on that side of the question as to become a leading case on the particular subject. Two questions were decided: i. e., whether a promissory note would be “money paid,” or, if not, was it “property actually received,” when contracted to be executed in consideration of the future issuance of stock? These were the sole questions involved, which, with the fiat of approval by the Supreme Court in denying the writ of error, forecloses further argument as to whether a note could be used for the purpose indicated. McCarthy agreed to take 25,000 shares of stock for $312,500, the greater part of which was to be paid by the execution of promissory notes, “to be indorsed by a solvent indorser,” the balance cash. There was a $37,500 note, payable to the order of one Routt, an agent of the Guaranty Company, in selling the stock, and which represented the commission due Routt for making the sale. The action was one of specific performance to require the corporation to deliver the stock according to agreement, “and the notes and cash were tendered appellee and demand made that the stock be issued and attached to the note (as collateral security) in accordance with the contract.” Justice Higgins said, in regard to the issuance of stock for money paid:

‘The fact that the notes to be given by McCarthy were to be indorsed * * * and secured by a pledge of the stock, does not in any wise affect the question. If it is permissible to accept notes at all, unsecured, as well as secured, notes could be accepted.”

With reference to the position that such notes would ( constitute “property actually received,” it was said:

“It is true a promissory note is ‘property’ in one sense of the word, as, for instance, when it is in the hands of a third person. It has frequently been so held; but, as between the original parties to the same, it is but a mere evidence of indebtedness, and it would be a strained and unnatural interpretation of the Constitution to hold that it was there used in the sense contended for by appellants. To so hold would be to say that in one breath the organic law expressly refused to accept it as ‘money paid,’ and in the next breath permitted it under the guise of property, thus convicting the framers of the Constitution of a palpable inconsistency.”

If the notes, in that case secured by a “solvent indorser,” had been the character of property responsive to the constitutional provision, it is clear the court would have required the corporation to issue the stock, because the contract was not, nor probably could have been, questioned otherwise; which opinion, with the approval of the Supreme Court, as persuasive pf this question, if it applies, requires us to follow it.

Plaintiff in error, however, argues that, because in this case a deed in trust on property double in value the amount of the debt, with a note, was also given, for the stock, that fact adds strength to the contention that both note and mortgage constitute such property.

It is unnecessary to review the! historical ■conception and development in equity which changed a mortgage as a conveyance and transfer of title to property to that of a mere security for the debt. A mortgage, apparently easy to define, is one of the most puzzling concepts in the law to express. Lord Denham said:

“It is very dangerous to attempt to define the precise relation in which mortgagor and mortgagee stand to each other in any terms than those -very words” — i. e., mortgagor and mortgagee. Jones on Mortgages, vol. 1, § 16.

As an incident to the debt, following it as the shadow follows the substance, we at least know that no title passes to anything. Of course there is a right constituting an interest in land to the extent that it is subject to- our registration statute. Moran v. Wheeler, 87 Tex. 179, 27 S. W. 54. Rut to say that the nature of the right or interest in the land disassociated from title constitute a transfer of anything, as that it could be characterized, when stock is given in exchange for the same, as “property actually received,’’ would require more explanation and analysis than we are able to give. The land is the fund to be subjected to the debt and the right exists to impound it1 for that purpose, as an incident to the debt. If the note, as held in the McCarthy Case, supra, is neither “money paid” nor property “actually received,” would a note with its incident, the mortgage, constitute “property actually received?” The term “property actually received,” as a consideration for the issuance of stock, would suggest the idea of a passing of title to property, legal or equitable, and whether the property was real or personal, tangible or intangible, according to the reasoning of the particular opinion, though probably not necessary for us to decide. If a note, with a solvent in-dorser, which is a mere evidence of a right of indebtedness, would not constitute “property actually received,” then a note, with a mortgage as security, would fall within the same category. The case of Cole v. Adams, 92 Tex. 171, 46 S. W. 790, holding that an option contract and a construction contract, and, by inference any other chose in action, when transferred and delivered in consideration of the issuance of stock, present a different question, upon analysis, than the one we have in this record. The title to the property, though a chose in action, passed. In this case a right passed, which may of course, be termed property, but not property “actually received,” when you construe the Constitution as a whole.< The note itself is prohibited as “money paid”; the mortgage follows the note. Justice Higgins remarked in the McCarthy -Case, supra, that, to hold in one breath that the Constitution condemns the note as “money paid,” and, in the next breath, is good as property “actually received,” would convict the framers of the Constitution of an irreconcilable inconsistency. If the debt, necessary to exist in order to have a mortgage (regarding the latter as merely incident to the debt), is neither “money paid” nor property “actually received,” it would seem to follow logically that the mortgage must fall with the note.

Again, if any part of the consideration in a contract is illegal, if not severable, the whole consideration is void. It matters not whether it is illegal because it consists in some act prohibited by statute or condemned by the common law. Seeligson v. Lewis & Williams, 65 Tex. 217, 57 Am. Rep. 593; Wegner Bros. v. Biering & Co., 65 Tex. 507; Edwards County v. Jennings, 89 Tex. 618, 53 S. W. 1053.

As to plaintiff in error’s second proposition, on a different phase of the same question, it is argued that the constitutional provision will not be construed to forbid the acceptance of securities in which it must immediately reinvest its funds, and the following statute is quoted: .Article 4711 of the Revised Statutes, applicable to insurance companies, provides:

“The capital stock of a company shall consist — first, m lawful money of the United States; or, second,. in the bonds of this state or any county or incorporated town or city thereof, or the stock of any national bank; or, third, in first mortgages upon unincumbered real estate in this state, the title to which is valid, and 1he market value of which is double 'the amount loaned thereon, exclusive of buildings, unless such buildings are insured in some responsible' company and the policy or policies transferred to the company taking such mortgage.”

Evidently the third subdivision, with which we are. only concerned, in regard to the capital stock of insurance companies consisting of first mortgages upon unincumbered real estate, means mortgages where either the company has loaned a part of its capital stock, producing the mortgage, or invested a part of its capital stock inj the purchase of such mortgages from others, where the market value of the land is double the amount “loaned thereon.” We do not understand that, in reality, plaintiff in error contends that a proper construction of the statute would be that it in terms gives the right to receive mortgages executed by a subscriber in consideration for the stock; but that, the corporation having the right to loan its capital stock, evidenced by such mortgage, or invest it in purchasing mortgages from others, this right of transmutation of the capital stock, or acquisition of mortgages with such funds, inherently carries the right in the first instance to exchange the stock to the subscriber for his note and mortgage on his property; that equity looks to the substance and not to the form of the transaction.

The trouble with this argument is, if we start with the premise, if correct, that the execution and delivery of a note and mortgage is_neither “money paid” nor “property actually received” by a corporation, in consideration for the issuance and delivery of its stock, the other conclusion derivable from the right of the transformation of property, would not follow. Suppose the Legislature had added another class of property, and had prescribed.that the capital stock of an incorporation may also consist of promissory notes with “solvent indorsers”: Could courts say that, having the right to buy notes, with solvent indorsers with its capital stock, that such a corporation would also have the convertible right, in the first instance, to take the notes in consideration for the issuance of the stock? Clearly not. Other insurance statutes cited by plaintiff in error are not necessary to discuss.

It is assigned that the defendant in error could not maintain this action in a court of equity, for the purpose of canceling the instruments in question, for the reason that, if the contract is illegal, the parties thereto are in pari delicto.

We take it that, if the Constitution actually condemns the issuance of stock for the character of instruments in question, it is a benefit to the insurance company and the stockholders and policy holders in said corporation to have the law manifest its decree as expeditiously as possible. The Supreme Court of Massachusetts, in the case of American Tube Works v. Boston Machinery Co., 139 Mass. 11, 29 N. E. 65, said:

/ “ * * * Where one has been held to be ¡Seemed a stockholder by estoppel, there has been a lsgal..sreation of the capital stock. * * * But where the issue of the shares is illegal, where no sufficient steps have been taken Tff tug' thorize the creation of the capital stock, where a person has acted and been treated as a stockholder in respect to shares which the company had no power to issue, and where the shares cannot legally exist, the person taking them can- .■ not, by estoppel or otherwise, become a member' in respect to them.”

By virtue of article 1146, Vernon’s Sayles’ Revised Civil Statutes, vol. 1, any corporation which violates the provisions of that article in issuing stock, except for “money paid, labor done or property actually received,” may be subject to a forfeiture of its charter by appropriate proceeding. Article 1147 makes it the duty of the Attorney General of the state, in certain proceedings, to also cancel any stock issued in violation of law. Pomeroy, Equity Jurisprudence, vol. 2, § 941, says:

“Even where the contracting parties are in pari delicto, the courts may interfere from motives of public policy. Whenever public policy is considered as advanced by allowing either party to sue for relief against the transaction, then relief is given to him. In pursuance of this principle, and in compliance with the demands of a higher public policy, equity may aid a party equally guilty with his opponent, not only by canceling and ordering a surrender of an execu-tory agreement but even by setting aside an executed contract, conveyance, or transfer, and decreeing the recovery back of money paid or property delivered in performance of the agreement.”

Marriage, brokerage contracts, and usurious agreements are examples. Of course usury contracts have a presumed element of duress which does not strictly enter into ’ this contract; but the policy of permitting an action of this character, which in its result, carries with it an enforcement of the Constitution, and presumably a sound public policy, is to be approved rather than reprobated.

Policy holders, and stockholders of valid stock, are affected by the fact that there is void stock outstanding in a corporation, in which they are indirectly interested, - and, viewing the securities in the hands of the insurance company as absolutely void, the quicker the void stock is off the books and other stock equivalent thereto is validly sold, the quicker the company would have an enhancement of its assets in compliance with law.

In this case we assume that neither party, as a question of scienter, really intended to violate the provision of the Constitution; it must be remembered that the Constitution prohibits the corporation from issuing the stock, in mandatory terms. It should know the law’s commands. If by comparison of duty according to the law’s mandates, between these litigants, you could raise an equity in favor of one against the other, and make one more culpable than the other, the company should know better than the subscriber.

The defendant in error has an outstanding five-year note and his land fastened with an apparent lien — a cloud upon his title— which, if the principle of abatement invoked by plaintiff in error was adopted, he would Rave to await the belated maturity of the note and an action, at law by the insurance company, upon the samé, before he could obtain relief, by resistance, in that proceeding. Beer v. Landman, 88 Tex. 457, 31 S. W. 805, which, upon close reading, is not an authority for plaintiff in error, as applied to this record. See Pomeroy, vol. 2, § 939.

The action to cancel the note and deed of trust is not brought to ' enforce an illegal contract or any right arising out of it. The defendant in error seeks to annul instruments which plaintiff in error holds, clouding the title of land, for which there was no consideration and which the Constitution prohibits the company from receiving. Where the contracts or transactions are prohibited by statute for the sake of protecting one set of men from another set of men, the one from their situation and condition being liable to be oppressed or imposed upon by the other, there the parties are not in pari delicto. In furtherance of the policy of the statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract. American Ins. Co. v. Bertram, 163 Ind. 51, 70 N. E. 258, 64 L. R. A. 935. This is an interesting ease, where a policy of insurance was written in violation of a statute prescribing a penalty for securing such a policy. In furtherance of the policy of the law, an innocent party induced to make such contract may bring his action to defeat the contract.

In this case the Constitution in terms is not against the making of the note, or the mortgage by Pearson, but it is against the insurance company issuing such stock. It is the stock which is void by virtue of the law, hence when it so issued there was no consideration for the notes and deed in trust. We think in furtherance of the policy of the law suits of this kind will be entertained.

The ease of General Bonding & Casualty Company v. Mosely, 174 S. W. 1034, is, in some respects on the facts, similar to this case; and the enunciation of the principle as applied to the questions involved herein is the same. A writ of error was granted by the Supreme Court in that cause (183 S. W. xvi), however, upon an element that does not enter into this case. The Organization Company, in that case, according to the pleading, and some offered testimony which was rejected by the trial court, at the time of the incorporation of the Casualty Company, paid the amount of Mosely.’s subscription to the corporation at the time the charter was granted; the money so paid was with the understanding that in the event Mosely executed his note and deed in trust for the stock, it was to be returned, and this court treated it as a voluntary payment with which Mosely had no contractual connection, and, that as a last analysis the stock was issued for the note and deed in trust. The. Supreme Court, in granting the writ, used this language:

“We are of opinion that the Casualty Company was entitled to establish' that the stock subscription was .fully paid by others for Mosely before the stock was issued. If it was so paid it satisfied the subscription as between the company and Mosely, and the company was entitled to recover upon the note given, in our opinion, unless it is subject to cancellation for fraud.’’

We make this explanation in view of the similarity of the cases.

It is argued that the transaction in this record constituted a loan; and it is further contended that the insurance company is also an innocent purchaser. Without discussion, these contentions are overruled.

The judgment of the trial court is affirmed.
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