author: FDY, C. J.

text:
    DAUGHERTY et al. v. WILES et al.
    (Court of Civil Appeals of Texas. San Antonio.
    April 2, 1913.
    Rehearing Denied May 14, 1913.)
    1. Appeal and Error (§ 742) — Questions Review able — Assignments oe Error.
    An assignment of error, not followed by a statement tending to sustain or throw any light on the contentions of appellant, will 'be overruled.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3000; Dec. Dig. § 742;]
    2. Pledges (§ 30) — Obligation op Pledgee —Collection op Notes Pledged.
    A pledgee must collect at maturity notes deposited with him as collateral, whether the debt of the pledgor is then due or not.
    [Eid. Note. — For other cases, see Pledges, Cent. Dig. §§ 75-85; Dec. Dig. § 30.]
    3. Pledges (§ 30) — Enforcement op Pledged Notes — Defenses—Extension op Time op Pledgor’s Debt.
    An agreement extending the time of payment of the debt of the pledgor does not affect the liability of makers of notes pledged by him.
    [Ed. Note. — For other cases, see Pledges. Cent. Dig. §§ 75-85; Dec. Dig. § 30.]
    4. Evidence (§ 423) — Parol Evidence — Bills and Notes — Relation op Parties to the Contract.
    Parol evidence is admissible to show .that one signing a note, followed by the word “surety,” is a principal and not a surety.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 1957-1965; Dec. Dig. § 423.]
    5. Appeal and Error (§ 1062) — Harmless Error — Erroneous Instructions.
    The erroneous submission to the jury of an ■issue not raised by the pleadings is not prejudicial to the defeated party where the determination of the jury did not injure him.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4212-4218; Dec. Dig. § 1062.]

      6. Appeal and Error (§ 750) — Assignments oe Error— S deficiency.
    The objection that an answer in the verdict is obscure may not he reached by assignment complaining of the instructions.
    [Ed. Note. — Eor other cases, see Appeal and Error, Cent. Dig. §§ 3074-3083; Dec. Dig. § 750.]
    7. Pledges (§ 58) — Action to Enforce Pledged Note — Judgment.
    The seller of property, to whom the purchasers had given their notes for the price, secured by a pledge of notes given to them by buyers from them, sued on all the notes, asking, as did also the pledgors, that the rights of all parties be adjusted. Judgment was rendered against all the defendants, execution to be levied first against the makers of the collateral notes; any balance unsatisfied to be collected from the pledgors. Meld,, that the makers of the collateral notes had no ground of complaint.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 186-194; Dec. Dig. § 58.]
    8. Appeal and Error (§ 742) — Assignments of Error.
    An assignment of error, not followed by statements, will not he considered, and mere references to other assignments or to the record for statements are insufficient.
    [Ed. Note. — For other eases, see Appeal and Error, Cent. Dig. § 3000; Dec. Dig. § 742.]
    Appeal from District Court, Bexar County.
    Actions by J. H. Wiles against L. H. Bradford and others. From a judgment for plaintiff against all of defendants, execution first to issue against B. M. Daugherty and J. B. Hancock, they appeal.
    Affirmed.
    O. M. Fitzhugh and Swearingen & Tayloe, all of San Antonio, for appellants. Wm. L. Schlesinger and Frank H. Booth, both of iSan Antonio, for appellees.

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

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

   FDY, C. J.

J. H. Wiles sued D. H. Bradford and Patrick Henry on their two promissory notes, one for $675 and the other for $600, and in a separate suit sought a recovery on two notes for the same sums executed by B. M. Daugherty and J. B. Hancock, which, it was alleged, were placed with said Wiles by (Bradford and Henry as collateral to secure their notes. The two suits were consolidated. Appellants, Daugherty and Hancock, sought to avoid liability on the ground of failure of consideration, resulting from misrepresentations of Bradford and Henry, who were members of a firm with Wiles, and who were acting as agents of said Wiles in the sale of the interest of said Wiles in the San Antonio Furniture Company to appellants, for which interest the notes sued on were given.

The cause was submitted to the jury on special issues, and on the responses to the questions returned by the jury judgment was rendered in favor of Wiles as against all of the defendants for the amount sued for; execution first to issue against appellants, and then for any balance that might remain against Bradford and Henry.

The evidence totally fails to show that Bradford was acting as the agent of Wiles in the sale of the latter’s interest in the furniture company. The testimony showed that Bradford wished to have Wiles, who resided in another state, out of the partnership in order that he might have an active partner who would assist in pushing the business. He was not representing Wiles in the sale to appellants of Wiles’ interest in the partnership. There was a positive denial upon the part of Wiles and Bradford of the latter’s agency, and the evidence depended upon was of too shadowy and insubstantial a nature to call for a submission to a jury. This conclusion disposes of the first, second, third, and fourth assignments of error.

The fifth, sixth, seventh, and eighth assignments of error are not followed by statements that tend to sustain or throw light upon the contentions of -appellants, and they are overruled.

The claim is made by Hancock, through the ninth assignment of error, that an extension of the Bradford and Henry notes was made by Wiles, which had the effect of releasing him on the notes given by Daugherty as principal and Hancock as surety to Bradford and Henry, and which were indorsed to Wiles as collateral security. How an extension of the notes of Bradford and Henry could affect the liability of a surety on other and different notes is not attempted to be shown. The principal of Hancock in this case was Daugherty, and it is not pretended that any extension was given him, or that his notes were in any manner affected by the extension granted to Bradford and Henry. No extension was granted to Daugherty, and, when his notes were deposited as collateral security, it was the duty of the pledgee, when they became due, to collect them. It was immaterial whether the debt of the pledgor was due or not at the time the collaterals became due; the pledgee was under obligation to collect the collaterals. The agreement as to extension of pledgor’s notes had no effect whatever on the notes deposited with and transferred as collateral security to the pledgee. Daniel, Neg. Instr. §§ 825a-826.

A surety is not released by a failure to sue at the first or second term unless he has given notice, in writing, to the creditor forthwith to institute suit upon the promissory note on which he is surety. Rev. Stats. 1911, arts. 6329-6330. This has been the law in Texas since 1858. It is not pretended that any such notice was given in this case.

The consideration in the notes given by Bradford and Henry to Wiles was not the same as in the notes given to the former by appellants. They may have been given for the same goods, but the consideration was one moving between different parties and could not be denominated the same consideration. As stating a proposition that sustains the contention of appellants that the extension of the notes of Bradford and Henry released Hancock on a note, the principal on which was 'Daugherty, Jones on Pledges and Collateral Securities, § 518b, is cited. The only authority cited by the text-writer that in the least sustains his proposition is the case of Slagle v. Pow, 41 Ohio St. 603, which is on an entirely different state. of facts from those in this case. In that case Barnes and wife gave a note for $1,500 to Slagle, and afterwards as a consideration for an extension executed afnother note for $1,000 with Pow and Hawkins as sureties, payable to Slagle, which was given to the payee as collateral security. When the period of extension of the original note expired and it became due, Slagle, the payee, again extended its payment for a definite time, for a consideration, and it was .held that such extension released the sureties on the note for $1,000. The court placed its judgment on the ground that the makers of the two notes were the same; there being no consideration for the second note, except the existence of the first note and the extension of its time of payment. In other words, the consideration of both notes was the same. The court said: “The makers of the note for $1,500 were liable also on the contract which was held as collateral to it. The collateral contract did not rest on a distinct consideration, but the consideration of the principal note and of the collateral were the same. In the ordinary case of holding one note or contract as collateral to another, each note or contract rests upon a distinct consideration. The extension of time on a principal note or contract, which would release sureties upon it, would not affect a note or contract belonging to the principal debtor upon a distinct and different consideration held as collateral to it. * * * The right of action on the collateral is in no way dependent upon the principal debt, except that the principal must remain unpaid to give the right to enforce the collateral. The consideration to Barnes for the principal and the collateral being the same, and Pow and Hawkins being sureties only, their relation to the principal debt was the same as if they •had been sureties on the original note, limited only by the amount for which they undertook.” In the note or contract in that ease signed by the sureties, it was recited that it was given as collateral security for the first note.

In this case Wiles sold his interest in the furniture company to Bradford and Henry, who gave their note for the purchase money, and then Bradford and Henry sold to appellants and took their note. The notes evidenced two transactions, between different parties, for different considerations. The property may have been the same, but the transactions were essentially different

Independent of all these matters, the testimony shows that Hancock was a principal on the notes given by him and Daugherty to Bradford and Henry. He testified that he bought an interest in the furniture company, and clearly shows by his own testimony that he was a principal and not a surety. The only testimony depended on by Hancock to show he was a surety is that after his name he wrote the word “surety.” That, however, is not conclusive, and parol evidence may be introduced to show that a person so signing was a principal. Brandt, Sure. & Guar. § 31. The facts pleaded in the answer of appellants make each of them a principal.' Appellants do not point out in their brief any evidence tending to show Hancock was a surety, except that the word “surety” followed his name on the notes. The article of the statute and the case of Buster v. Woody, 146 S. W. 689, cited by appellants, have no applicability to this case. That article and case are in regard to iiidorsers of commercial paper, and have no reference to sureties.

The seventh assignment of error Is overruled; the issue as to whether the sale was to Bradford and Henry or to Daugherty and Hancock was not raised in the pleadings of appellants; and the submission of such issue, whether erroneously submitted or not, could not have injured appellants. The answer of the jury indicates what the jury intended to find.. If the answer is obscure, it would not be reached by assignment complaining of the charge. The charge could have- been answered clearly and intelligently. If the court, and not the jury, should have determined whether Wiles was the legal holder of the notes signed by Daugherty and Hancock, how did that injure appellants? The day for considering merely legal abstractions is happily, passed.

In the prayer of Wiles, as well as that of Henry, the court was asked to adjust all the rights and equities between (Bradford and Henry on the one part and J. B. Hancock and B. M. Daugherty on the other part. Appellants have no cause of complaint, because the court found them liable on their notes, and a payment by Bradford and Henry of their notes would not relieve appellants of their indebtedness or satisfy the judgment against them. After such payment of their notes by Bradford and Henry, the judgment against appellants would inure to the benefit of the original payees.

Assignments of error 11 to 27, inclusive, are not followed by statements and will not be considered. References to other assignments or to the record for statements are not sufficient. Griffin v. State, 147 S. W. 328.

The judgment is affirmed.


source: Caselaw Access Project

author: MOURSUND, J.

license: Public Domain

text:
    CONNOR v. UVALDE NAT. BANK et al.
    (Court of Civil Appeals of Texas. San Antonio.
    May 7, 1913.
    On Motion for Rehearing, May 21, 1913.)
    1. Bills and Notes (§ 475) — Plea —Non ' Est Factum.
    A plea of non est factum in an action on a note denies the execution of the note by himself or by any person authorized to sign or execute the same for him.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1514-1518, 1556; Dec. Dig. § 475.]
    2. Principal and Agent (§ 119) — Signature oe Note — Authority — Burden oe Prooe.
    In an action on a note alleged to have been signed by one under authority froin defendant, in which defendant ¡pleads non est factum, the burden is on plaintiff to show the authority of the person to sign the particular note sued on, , as well as the fact of signing.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 391-401; Dec. Dig. .§ 119.]
    3. Principal and Agent (§. 119) — Authority— Duty to Ascertain.
    Persons dealing with an assumed agent, whether general or special, are bound at their peril to ascertain not only the fact of the agency but the extent of his authority, and in case either is controverted the burden of proof is upon them to establish it.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 391-401; Dec. Dig. § 119.] ^
    4. Principal and Agent (§ 109) — Authority to Sign Note — Construction.
    Authority to sign a person’s name to a note as surety does not confer authority to sign his name to a joint, and several note as principal, nor does authority to execute a note for a certain amount confer authority to execute one for a larger amount.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 318-322, 360, 361, 365; Dec. Dig. § 109.]
    5. Principal and Agent (§ 123) — Authority to Sign Note — Sueeiciency oe Evidence.
    In an action on a note alleged to have been signéd by an agent under authority from de- • fendant, the evidence held insufficient to show that the agent had authority to sign his principal’s name as principal in the note.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 420-429;. Dec. Dig. § 123.]
    '6. Principal and Agent (§ 109) — Authority tó Antedate Note.
    ,. Authority to an agent to sign a note in renewal of a note, to which the principal was a party, carries with it, in absence of evidence of a contrary intent, authority to antedate the renewal note so that it would bear date when the other became due.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 318-322, 360, 361, 365; Dec, Dig. § 109.]
    On- Rehearing.
    7.Principal and Agent (§ 137) — Authority — Estoppel.
    A person bound to ascertain what authority an agent possesses, after accepting an unauthorized contract-,' cannot be heard to say that the agent was authorized to make another contract, and that he is only asserting such rights as he could have asserted had the other contract been made, and therefore no harm has been done by the agent exceeding his authority.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 492-494; Dec. Dig. § 137.]
    8. Principal and Agent (§ 109) — Authority — Signing Note — Deeense.
    Where an agent exceeds the authority given him to sign his principal’s name to a note as Surety by signing it as principal, it is no defense that no harm resulted to the principal from such excess of authority.
    [Ed. Note. — For other cases, see Principal and Agent, Cent. Dig. §§ 318-322, 360, 361, 365; Dec. Dig. § 109.]
    9. Evidence (§ 265) — Admissions—Conclusiveness — Weight.
    In an action on a note, in which it was shown that an agent signed his principal’s name as principal in the note, while authorized only, to sign as surety, that the principal testified on direct examination that he authorized the agent only to sign as surety, while on cross-examination he contradicted himself and said that there’ was no limitation on the authority, was not a conclusive admission which would overcome the testimony of the agent that he was authorized to sign only as surety, and the weight of the testimony is for the jury.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 1029-1050; Dee. Dig. § 265.]
    Appeal from Uvalde County Court; J. F. Robinson, Judge.
    Action by the Uvalde National Bank against M. Connor and others. From a judgment entered on a verdict directed for plaintiff, defendants appeal.
    Reversed and remanded.
    Jno. W. Hill, of Uvalde, and T. H. Ridge-way, of San Antonio, for appellants. W. D. Love, L. Old, and L. E. Lanier, all of Uvalde, for appellee.

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

   MOURSUND, J.

The Uvalde National Bank sued F. E. Seawell, M. Connor, and J. J. H. Patterson upon a promissory note for $815, alleging that the note was a joint and several obligation, and that Connor’s name was signed thereto by Seawell, who was duly authorized to sign said Connor’s name thereto. Connor filed a plea of non est factum, a general demurrer, and general denial. Patterson admitted the execution of the note and prayed for judgment over against Seawell for any amount he might have to pay, and also for contribution over against Connor. Connor also filed a plea for judgment against Patterson for half of any amount that Connor might have to pay in the event it was decided that he was a surety upon the note. Upon the trial, the court instructed a verdict in favor of plaintiff against all the defendants for the full amount of the note, with interest and attorney’s fees, and for defendants Connor and Patterson over against Seawell, and for each of said two defendants against the other for judgments of contribution. Upon the return of the verdict according to the instruction given by the court, judgment was entered accordingly, 'from which Connor appealed.

Summary of Evidence.

Defendant Seawell testified as follows: “My name is P. E. Seawell. I am one of the defendants in this case. I reside in San Antonio, Tes. I resided in Uvalde before moving to San Antonio. I am acquainted with the defendant M. Connor. Have known him several years. I have seen the note sued upon in this case before [the note then being exhibited to him]. I signed my name and the name of M. Connor to this note. I had authority from Mr. Connor to sign his name to it. He gave me authority to sign his name to it.” On cross-examination he testified: “Mr. Connor was on another note of mine at the Uvalde National Bank and this note became due and I went out to Mr. Con-nor’s farm and asked him if he would renew the note with me and he said he would. This was some time during the latter part of April or during the month of May, 1911. Mr. Connor was at that time down in his hayfield making hay. The amount of the note was never mentioned nor discussed, as it was a renewal note. Nothing was ever said about the principal, interest, nor attorney’s fees of the note; that was never discussed nor mentioned. I came on back to town and went to the bank and had the note made out, and then signed my name to it and signed Mr. Connor’s name to it. Mr. Connor never saw the note before it was executed. I did not take it with me out to Mr. Connor’s farm when I went. The note was not made out until after I came back to town. I was the principal in the old note and am also the principal in the new note. I owe the debt. Mr. Connor did not get anything on the note. I got the money from the bank. Mr. Connor was only surety on the old note, and I just asked him if he would be surety on the new note, and he said he would. I was only to sign his name to the note as surety. I was to be principal in the new note and he was to be a surety. I only had authority from Mr. Connor to sign his name as surety to the note. I did not have authority from him to sign his name as principal to the new note. I am positive of this. There was no one present at the time I talked to Mr. Connor down in the hayfield, except Mr. Connor and myself. No one heard the conversation, except Mr. Connor and I. I am sure it was some time in April or May, 1911, when I went out to Mr. Connor’s farm. He was working in the hayfield. I am sure about that The note was dated back to March 15, 1911, so it would take effect on the date the old note became due. The interest of the old note was not paid; it was added into the face of the new note. I did not pay the interest on either the old or the new note.” The promissory note sued upon was, for $815, dated March 15, 1911, due, 90 days after date, bearing 10'per cent, interest from maturity, and providing for 10 per cent, attorney’s fees if placed in the hands of attorneys for collection after maturity. It was payable to plaintiff’s order, was a joint .and several note, with the names F. E. Sea-well, J. J. H. Patterson, and M. Connor, per Seawell, signed thereto. The note was placed in the hands of attorneys for collection after maturity upon an agreement to pay' them the 10 per cent, attorney’s fees provided for in the note as their fee for collecting the note.

Defendant Connor testified on direct examination as follows: “My name is M. Con-nor. I am one of the defendants in this cause. I live about 11 miles east of Uvalde. I am a farmer and stock raiser. I know F. E. Seawell. I have known him several years. I was surety on a note for Mr. Sea-well at the bank, and he came out to my place some time in the summer, of 1911 and asked me if I was willing to go on the note again. I asked him if he had kept the interest paid up and he said he had. I told him that I would go on the note again. I was making hay at the time. He did not have the note with him.” The note sued upon was then handed to the witness and he said: “I never saw this noté until after it was sued upon. I did not authorize Mr. Seawell to sign my name to this note. I authorized him to sign my name to a note, but not this note. I authorized him to sign my name to a $200 note.” On cross-examination he said: “Yes, it is a fact that I gave Mr. Seawell authority to sign my name to a note,' and when he came down there in the field there was nothing said about the amount, terms, interest, or condition; just authorized him to sign my name to a note, and that was all there was to it.”

Conclusions of Law.

By plea of non est factum Connor denied that he executed tlje note described in the petition, and also denied that it was executed by any person authorized- by- him to sign or execute the same for him. Thereupon the burden rested upon plaintiff of showing the authority of Seawell to sign Connor’s name to the particular note sued upon, as well as the fact that he did actually sign such- name thereto. Brashear v. Martin, 25 Tex. 202; Neil v. Schackelford, 45 Tex. 131; City of Tyler v. Adams; 62 S. W. 119; Clymer v. Terry, 50 Tex. Civ. App. 300, 109 S. W. 1130. As was said by. Judge Neill in the case of Baker v. Machinery Co., 84 S. W. 662: “Persons dealing with an assumed agent, whether the assumed agent be-a general or a special one, are bound, at their peril, to ascertain not only the fact of the agency, but the extent of his authority; and, in case either is controverted, the burden of proof is upon them to establish it.” See, also, Mechem on Agency, §§ 706, 707; Buzard v. Jolly (Sup.) 6 S. W. 422; Sackville v. Storey, 149 S. W. 241; Machinery Co. v. Peter & Sherrill, 84 Tex. 627, 19 S. W. 860. In this case it was the duty of plaintiff to ascertain, at its peril, whether Seawell had authority to sign Connor’s name to the note it accepted, and, when it sued upon such note and the authority of Seawell to execute the note for Connor was denied under oath, the burden rested upon plaintiff of showing such authority, and it could not meet such burden by proof of authority to execute a note different from the one sued upon.

Authority to sign a person’s name to a note as surety does not confer authority to sign his name to a joint and several note as principal, nor does authority to execute á note for a certain amount confer authority to execute one for a larger amount. Cyc. vol. 31, pp. 1342, 1385, 1386. ‘ Applying these principles to the evidence introduced in this case, we find such evidence insufficient to justify the court in instructing a verdict for plaintiff. Seawell testified positively that his only .-authority was to sign Connor’s name as a surety and not as a' principal obligor. Connor, upon cross-examination, went a long way toward justifying the instruction of the court against him, but it cannot be said that he even contradicted Seawell’s statement as to the capacity in which his name should appear upon the note.

It is also contended that plaintiff failed to make a case because the note was antedated. It appears that, while both parties refer to the fact that the note to be given by Seawell was to be a renewal note, the note to be renewed was not introduced' in evidence, nor any portion of the description of same testified to other than the date when it became due. The note sued upon was dated as of the date of the maturity of the other note. Connor was a party to the other note and chargeable with knowledge of the time when it matured. Under these circumstances, in the absence of evidence showing-a-contrary intent, we think authority to sign a note in renewal of the former note would carry with - it authority to antedate the note so', it would bear the date when the other note became due. In' some cases antedating an instrument plainly constitutes a violation of the obvious intent of the principal and exceeds the authority conferred, but the facts of this case, as shown by the evidence introduced, do not make out such a case. Appellees cite the following cases in support of the action of the trial court, viz.: Jones v. Primm, 6 Tex. 170; Whittle v. Bank, 7 Tex. Civ. App. 616, 26 S. W. 1011; Riley v. Reifert, 32 S. W. 185; Garner v. McGowen, 27 Tex. 490; Harfst v. Bank, 56 Tex. Civ. App. 31, 119 S. W. 694; Garlitz v. Bank, 152 S. W. 1151. In each of these cases the maker’s name was signed by him or by his authority, and the questions arose upon unauthorized filling in of blanks or fraud used in procuring him to sign the instrument. There, was some act in each ease on the part of the maker upon which persons dealing with reference to the instrument could rely for their protection in taking the instrument for what it purported to be.

It becomes our duty to reverse this case because the court was not authorized to instruct a verdict for plaintiff upon the evidence introduced. As it is apparent that the case has not been fully developed, it will be remanded for another trial.

Reversed and remanded.

On Motion for Rehearing.

Appellee bank questions the correctness of our conclusion that authority to sign a person’s name as surety does not confer authority to sign a joint and several note as principal, and that authority to execute a note for a certain amount confers no authority to execute one for a larger amount. As additional authorities on this proposition, we cite Mechem on Agency, § 393, and Randolph on Commercial Paper, §§ 359, 360.

It is also contended that, even though Connor conferred authority only to execute the note as surety, such authority is not abused by signing his name as a joint and several obligor, because, if it be known to the payee that he is in fact a surety, then he would have the same rights with respect to the payee as if the word “surety” was written after his name. When Seawell testified positively that he “only had authority from M. Connor to sign his name as surety to the note,” we can only construe such language as meaning that the note on its face should disclose the fact that Connor was surety. If any other meaning was intended, it cannot be supplied by us. We think an examination of the authorities, showing the strict construction placed upon .authority such as was sought to be exerciséd in this case, makes it clear that a person authorizing a contract showing on its face that he is a surety has not authorized one under which he would be bound to notify the payee of his real relation as surety or ■prove that the payee had knowledge théreof,' and which would bind him as a principal ■ obligor as to an innocent purchaser for value. Nor can the person chargeable with .the duty'of ascertaining what authority the agent possesses, after accepting an unauthorized contract, be heard to say that the agent was authorized to make another contract and that he is only asserting such rights as he could have asserted had the other contract been made, and therefore ño harm has been done by the agent exceeding his authority. If the agent exceeds his authority,- his contract is not binding unless ratified; and, there being no binding contract, no recovery can be had.

The proposition that no actual harm was suffered by Connor has no weight. It could' as well be sáid that, when an agent signs a $1,000 note when only authorized to sign a $500 note, the principal could be held responsible if sued only for $500, because he would then have suffered no injury by reason of the excess of authority on the part of his agent. Courts cannot, if a contract unauthorized by the principal is made by the agent, substitute for the same the contract which he was authorized to make.

Appellee Patterson contends that the testimony of Connor on cross-examination constitutes an admission that nothing was said about the capacity in which the note should bind him, and that such admission is to be taken as conclusive evidence overcoming the positive testimony of Seawell. In support of this theory counsel cite Payne v. Railway Co. (Mo.) 30 S. W. 149, and Peary v. St Ry. Co., 162 Mo. 75, 62 S. W. 460. The question arising in these cases was one involving the right of the court to instruct as to the conclusiveness of the testimony of parties against their interest. Later Missouri cases do not bear out the broad doctrine announced in the two cases cited. See Montgomery v. Railway Co., 181 Mo. 477, 79 S. W. 934; Conner v. Railway Co., 181 Mo. 397, 81 S. W. 151; Sheperd v. Transit Co., 189 Mo. 362, 87 S. W. 1010; Jennings v. Swift & Co., 130 Mo. App. 391, 110 S. W. 21. In the case of Conner v. Railway the court said: “If it is a mere construction of phrases or expressions used by the witness in detailing his testimony as to whether the statements are favorable or unfavorable to his side of the case, then there is no necessity, nor is it error, to refuse an instruction embodying the principle in the one before us. It is simply the province of the jury, guided by the general .instruction as to the credibility of witnesses and the weight to be attached to their testimony, to determine the credit of such witness and the force and effect of his testimony. If a plaintiff or defendant testifying in a cause make statements which may be construed unfavorably to them, it is the province of the jury to consider them; but, unless such statement amounts to an admission of a fact material to the issue, it is not the province of the court to assume that unfavorable statements have been made and instruct the jury on that subject.” It is not necessary in this case to hold whether an express admission of a party to the suit is conclusive against him in spite of contradictions thereof ■ by other witnesses. In this case Connor gave positive testimony on direct examination, and when cross-examined gave testimony inconsistent with that first given and did not explain or correct his testimony first given. The statement on cross-examination appears to have been in answer to a leading question, and it is not an express admission either that his former testimony was false or that nothing was said about the capacity in which he was to be bound by Seawell’s act. Under such circumstances, it is the province of the jury to determine what was meant by the party and to weigh his testimony.

It is probable that, if each of the persons testifying had been required to repeat as nearly as he could the conversation occurring between them instead of stating his conclusions, some of the questions arising upon this appeal would not have arisen.

We adhere to our former opinion that the court was not justified in instructing a verdict, and overrule the motions for rehearing.


author: SPEER, J.

text:
    NATIONAL UNION FIRE INS. CO. v. WALKER.

    (Court of Civil Appeals of Texas. Ft. Worth.
    Dec. 14, 1912.
    Rehearing Denied March 8, 1913.)
    1. Insurance (§ 335) — ’Warranties—Iron-Safe Clause/
    Where a fire policy required the insured to take a complete itemized inventory of stock on hand at least once each year, and provided that, unless such inventory had been taken within 12 months prior to the date of the policy, one should be taken within 30 days after issuance, and further required the insured to keep a set of books setting forth all purchases and sales either in a fireproof safe or in some secure place not exposed to fire which would destroy the building, the failure of insured to take an inventory within 30 days after issuance of the policy, none having been taken within 12 months previous, will bar recovery despite the rule that in construing insurance contracts that interpretation most favorable to the insured will be adopted, and even though the insured kept a set of books from which might be ascertained the amount of stock on hand at any given time.
    [Ed. Note. — Eor other cases, see Insurance, Cent. Dig. §§ 852, 853; Dec. Dig. § 335.]
    2. Courts (§ 91) — Rules of Decision — Decision of Supreme Court.
    A decision of the Supreme Court is binding upon and must be followed by the Court of Civil Appeals. ■
    [Ed. Note. — For other cases, see Courts, Cent. Dig. §§ 313, 325, 326; Dec. Dig. § 91.]
    Error to District Court, Tarrant County; W. T. Simmons, Judge.
    Action by J. L. Walker against the National Union Fire Insurance Company. There was a judgment for plaintiff, and defendant brings error.
    Reversed and rendered.
    Wm. Thompson, of Dallas, and Sidney L. Samuels, of Ft. Worth, for plaintiff in error. Capps, Cantey, Hanger & Short and David B. Trammell, all of Ft. Worth, for defendant in error.

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

       Writ of error granted May 28, 1913.

   SPEER, J.

J. L. Walker brought this suit in the district court of Tarrant county to recover from the National Union Fire Insurance Company for loss by fire to a stock of grain, bran, sacks, etc., under a policy of insurance in the sum of $3,000. There was a jury trial resulting in a verdict for plaintiff in tlie sum of $1,800, and from a judgment based thereon the defendant has prosecuted this writ of error.

A question which, we consider to be decisive of the appeal is presented in plaintiff in error’s first assignment, to the effect that the trial court erred in refusing its special request for á peremptory instruction in its favor. The contention is based upon an alleged violation of the following warranty contained in the policy of insurance: “Iron-Safe Clause. The following covenant and warranty is hereby made a part of this policy: (1) The assured will take a complete itemized inventory of stock on hand at least once in each calendar year, and unless such inventory has been taken within twelve calendar months prior to the date of this policy, one shall be taken in detail within thirty days after issuance of this policy or this policy shall be null and void from such date.”

The policy was issued on October 21, 1907, and the fire occurred October 3, 1908. The assured began business in the building covered by the policy September 20, 1907, and it is undisputed that no inventory had been taken within 12 calendar months prior to the date of the policy. It is also undisputed that no inventory of stock on hand was taken within 30 days after the issuance of the policy, but an inventory, was taken on May 18, 1908, showing the amount of bran, oats, and sacks on hand, but affixing' no values thereto. The iron-safe clause referred to also- contained the following: “(2) The assured will keep a set of books which shall clearly and plainly present a complete record of business transacted including all purchases and sales and shipments, both for cash and credit, from date of inventory as provided for'in the first section of this clause, and also from date of last preceding inventory, if such has been taken, and during the continuance of this policy. (3) The assured will keep such books and inventory and also the last preceding inventory, if such has been taken, securely locked in a fireproof safe at night and at'- all times when the building mentioned in. this policy is not actually opened for business, or failing in this, the assured will keep such books and inventories in some secure place not exposed to a fire which would destroy the aforesaid building and unless such books and inventories are produced and delivered to this company for examination after loss or damage by fire to personal property insured hereunder, this policy shall be null and void and no suit or action shall be maintained herein. It is further agreed .that the receipt of such books and inventories for the examination of the same shall not be an admission of any liability under the policy nor a waiver of any defense to same.”

The plaintiff’s testimony tended to show that such books were kept and the accounts maintained in such a way that from .these, together with the invoices of purchases, it was possible to determine on any day the amount of goods on hand. In short, the evidence is such as to justify a verdict, to the effect that parts 2 and 3 of the iron-safe clause had been fully complied with, and the insistence is urged upon us that there has been a substantial compliance with part 1 first quoted as to justify a recovery herein. It is quite well settled that in construing insurance contracts that interpretation most favorable.to the assured will be adopted. It is therefore held that a substantial compliance' with the requirements of such a contract is sufficient. Insurance Co. v. Kemendo, 94 Tex. 367, 61 S. W. 1102. But as we view the present case there is not even a substantial compliance with section 1 of the iron-safe clause, inasmuch as no inventory whatever was taken within 30 days of the issuance of the policy and none.' had been taken within the 12 calendar months prior thereto. Whatever hardships may result, we are not at liberty to make any contracts for the parties, but at most can only adopt a liberal rule of interpretation in favor of the insured for the purpose of avoiding a forfeiture. The most liberal compliance with other sections of the clause cannot possibly be held to be a substantial compliance with the first section, but, on the-other hand, is no compliance at all.

The question here involved appears to have-been definitely settled in Orient Ins. Co. v. Dorroh-Kelly Merc. Co., 126 S. W. 616, and Id., 135 S. W. 1165, wherein our Supreme,Court, through the Chief Justice, uses this-language: “It is not for this court to vary the terms of the contract into which the parties entered, nor to speculate as to what, might or might not have been the consequences if the contract had been differently-expressed. Parties make their own contracts, and it is not within the province of this court to vary the terms in order to protect them from the consequences of their-own oversights and failures in nonobservance of obligations assumed. It being true-that no inventory complying with the requirements of the policy had been taken within a year prior to its issuance, and the-insured having failed to take an inventory in compliance with those terms within 30 days from the time the policy was issued, the law is that the terms of the contracts, must prevail, and the policy was forfeited.”

The. parties have seen fit to contract not. only for the keeping of books by the insured, but for an inventory as well, and that, such books and inventory shall be produced, and delivered to the company for examination after loss or damage by fire. In keeping the books the insured has done no more-than his contract required him to do. By language equally binding in its terms helms undertaken to furnish an inventory which he had admittedly failed to do, unless the keeping of the books in accordance with. section 2 of tlie iron-safe clause lias tlie effect of .an inventory by supplying tbe information to be bad by this means. As indicated by the terms of the contract, the parties have treated the inventory and books as different things and by stipulating for the production of both have indicated as clearly as words can that a compliance with one requirement would not take the place of a compliance with the other.

The case of St. Landry Wholesale Merc. Co. v. New Hampshire Fire Ins. Co., 114 La. 146, 38 South. 87, 3 Ann. Cas. 821, is very much in point and holds void a policy containing a similar clause where the assured failed to take an inventory but did produce a properly kept set of books from which an inventory approximately correct could have been made. In Cont. Ins. Co. v. Cummings, 78 S. W. 378, the stipulation for the preservation of the “next preceding inventory,” was not complied with, but a subsequent inventory was made, and proper books were kept from which the trial court and the Court of Civil Appeals found that it could be ascertained with reasonable accuracy what the contents of the lost inventory were. The Supreme Court, however (98 Tex. 115, 81 S. W. 705), apparently upon the reasoning that the subsequent inventories and books were also stipulated for in the policy, held that such failure to preserve and present the “last preceding inventory” was fatal to a recovery.

Whatever might be the views of this court if the question of the propriety of applying so strict a rule were an open one, there is no other course for us to pursue but to follow the holding of our Supreme Court, which necessarily results in a reversal and rendition of the judgment in the present case.

The judgment of the district court is therefore reversed, and judgment here rendered in favor of the plaintiff in error.


author: RASBURY, J.

text:
    ERWIN et al. v. E. I. DU PONT DE NEMOURS POWDER CO. et al.
    (Court of Civil Appeals of Texas. Dallas.
    April 19, 1913.
    Rehearing Denied May 17, 1913.)
    1. Principal and Stjeety (§ 169) — Exhaustion op Other Secueities.
    The undertaking of a surety of a note is independent and additional to any security furnished by the maker, and a holder of the note may sue on the unqualified promise of the surety without reference to any collateral security available from other sources.
    [Ed. Note. — Eor other cases, see Principal and Surety, Cent, Dig. §§ 474-489; Dec. Dig. § 169.]
    2. Principal and Sueety (§ 169) — Exhaustion op Other Security.
    An indorsee of a note'before maturity for value and without notice need not foreclose a materialman’s lien 'sought to be fixed by the 'payee, but may at once sue the sureties, especially where the value of the lien is uncertain.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 474-489; Dec. Dig. § 169.]
    3. Appeal and Eeeob (§ 1073) — Harmless Error — Error Not Affecting Rights of Parties.
    Where, in an action by an indorsee of a note against the maker and sureties and in-dorser, the judgment subrogated the sureties to any rights under a materialman’s lien asserted by the payee and indorser, the question whether the pleading and proof authorized the subro-gation was, as between the sureties, immaterial, because it did not lessen any equitable rights the sureties had to proceed against their principal for whatever part of the judgment they might be compelled to pay.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4240-4247; Dec. Dig. § 1073.]
    4. Bills and Notes (§ 245) — Evidence (§ 423) — Parties—Surety—Parol Evidence. .
    One who signs his name on the back of a note, unaccompanied by any words expressing the nature of his undertaking, is as to an in-dorsee before maturity for value, and without notice, a surety, and parol evidence of any lesser obligation is inadmissible.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 558, 559; Dec. Dig. § 245; Evidence, Cent. Dig. §§ 1957-1965; Dec. Dig. § 423.]
    5. Evidence (§ 423) — Parol Evidence — Obligation op Signers op Note.
    Parol evidence is admissible, as between the signers of a note,. to show the real character of the obligation intended to be assumed by one signing his name on the back of the note unaccompanied by any words expressing the nature of his undertaking.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 1957t-1965 ; Dec. Dig. § 423.]
    6. Bills and Notes (§121) — Obligation op Parties — Principal, and Surety.
    Where a surety signed a note as maker under an agreement that he should be bound only on condition that a third person signed the note with him, and the third person signed his name on the back of the note without any words expressing the character of his undertaking, and the two made no contract between themselves, they were sureties, and must in equity contribute equally as sureties to the payment of the note.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 255, 256; Dec. Dig. § 121.]
    7. Commerce (§ 40) — Foreign Corporations —Doing Business in State.
    A foreign corporation employing traveling agents in the state to solicit orders for merchandise, and shipping into the state merchandise to fill the orders, is engaged in interstate commerce, and 'is not within Rev. Civ. St. 1911, arts. 1314, 1318, requiring foreign corporations to obtain a permit to transact business in the state.
    [Ed. Note. — For other cases, see Commerce, Cent. Dig. §§ 29, 30; Dec. Dig. § 40.]
    8. Corporations (§ 642) — Foreign Corporations — Doing Business in State — Interstate Commerce.
    A foreign corporation engaged in the manufacture of powder sold powder to a resident, under a contract assigning to the resident trade territory and fixing the price. The corporation shipped, direct from its powder mills, powder to a construction company in Texas. A small part of the powder used by the construction company was shipped from a point in the state. The corporation collected the money from the resident, and never presented any bill to the construction company. Thereafter the resident obtained a note from the construction company for the price and transferred it to the corporation. Helé, that the corporation was not engaged in business in the state within Rev. Oiv. St. 1911, arts. 1314, 1318, requiring a foreign corporation to obtain a permit to transact business in the state.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 2520-2527; Dee. Dig. § 642.]
    Appeal from District Court, Dallas County; J. C. Roberts, Judge.
    Action by E. I. Du Pont De Nemours Powder Company and others against T. R. Erwin and others. From a judgment for plaintiff and establishing the rights of defendants as between themselves, some of the defendants appeal.
    Reformed and affirmed.
    Alexander, Power & Ridgway, of Ft. Worth, and Stennis & Wilson, of Weatherford, for appellants. A. B. Flanary, of Dallas, for ap-pellees.

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

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

   RASBURY, J.

The appellee Du Pont De Nemours Powder Company, a foreign corporation, sued Mitchell-Pigg Construction Company, W. J. Sparks, J. W. Pigg, H. F. Mitchell, M. D. Plumlee, W. H. Vardeman, A. S. Chapman, J. W. Braselton, and T. R. Erwin, as makers, and Will R. Allen, as indorser, of a negotiable promissory note in the sum of $5,904.05, payable to said Will R. Allen.

Appellee powder company, in the pleading upon which it went to trial, alleged that it acquired the note sued upon from Will R. Allen, the payee, before maturity for value, and without notice of any of the defenses subsequently set up by the makers, etc. Ap-pellee Allen, the payee in the note, adopted the pleading of the powder company and admitted his liability as indorser on the note, but denied any liability until all remedies had been exhausted against his several codefend-ants, and, further, that he received and accepted said note for value paid, without knowledge of the defenses alleged by his co-defendants.

The appellant Erwin pleaded, in substance, that the note was given in payment of an account standing in the name of Allen against Mitchell-Pigg Construction Company for powder and other explosives, but which were in fact sold to said Mitchell-Pigg Construction Company by appellee powder ‘company, through said Allen as its agent, and which had been used in the construction of the roadbed of the Chicago, Weatherford & Brazos Valley Railway Company, and that said Allen had established against the roadbed of said railway the statutory materialman’s lien in order to'secure the payment of the account covered by said note, the property against which said lien was established being of the value of $50,000, and then in the possession of G. A. Holland, appointed receiver of the property of both railway company and said construction company, by the district court of Parker county, and néither of which companies had been made parties to the suit upon the note. Upon the foregoing allegations it was asserted and prayed that the case be abated until appellee had first exhausted its remedy under said materialman’s lien.

Erwin next pleaded that appellee powder company is a foreign corporation, without a permit from the state of Texas to transact its business here, and since the note was in payment of certain business transacted in Texas, appellee was not entitled to maintain the suit, etc.

Erwin then pleaded to the merits that he signed the note merely as surety for said construction company, and upon the express condition that J. W. Braselton would also sign same as a maker, which condition was known to said Allen and the powder company, through their agent and representative, A. B. Flanary, Esq., who also knew that said note was being taken for the use and benefit of said powder company, and that he did not know until after the acceptance and delivery of said note that said Braselton had limited his liability thereon by indorsing same only, and that he would not have signed same had he known that said Brasel-ton intended to so limit his liability, and because of which he was released from liability thereon. Erwin also alleged that the transfer of the note from Allen to the powder company was a sham, for the reason that, in selling said material to the construction company and in taking said note in his name covering such account, said Allen was acting for and on behalf of the powder company and as its agent.

Appellants Sparks, Pigg, Mitchell, Plumlee, Vardeman, and Chapman, as touching the issues raised in their brief, pleaded surety-ship against the construction company, and that appellee was in law compelled to exhaust its remedy under the materialman’s lien as pleaded by the appellant Erwin, etc., and in which latter plea the construction company joined.

Appellee Braselton pleaded in abatement of the suit as set out in the plea of appellant Erwin; also that he signed his name across the back of the note on the express condition that he should be liable only as an accommodation indorser, and at no time agreed to become a surety for the payment thereof, and that all other parties thereto knew that he agreed to be bound only as indorser. He prayed judgment against all parties accordingly, except the powder company and Allen, the payee, in the note.

Upon trial before jury the court peremptorily instructed the jury to, and they did, return a verdict for the powder company against all the makers and the indorsers for the amount of the principal of the note, interest, attorney’s fees and' protest fees, amounting to the gross sum of $7,086.71; for Allen, the indorser, against all the other defendants for a similar amount; for Brasel-ton against all the defendants, except Allen, the indorser, for a similar amount; for 'all the defendants, except Allen and Braselton, against the construction company for a similar amo'unt; and finding that all defendants should, to the extent of any payments they might make on the judgment, be subro-gated to any lien established against the property of the construction company by Allen. Upon the directed verdict the judgment was entered accordingly, and from which all the parties, except Allen, the indorser, and Braselton, have appealed.

The following facts, and the essential ones, in substance, are undisputed: ■ Will R. Allen, at the time and prior to the execution of the note sued on, was a merchant in the city of Dallas, engaged in the sale of powder and explosives, and was agent for the sale of the powder and explosives of appellee powder company, as well as agent for the sale of similar articles for another concern. All powder, etc., bought by him. from the powder company was bought outright, and all owned by him and the agency “in a general merchantable sense,” as he puts it, was that he bought and sold or carried in stock the powder company’s powder, etc. No sales were made by him on commission. When he received an order from a customer for powder he exercised his judgment as to which concern’s powder he would deliver. Under a contract with the powder company all powder bought by him from, it was required to be 'stored in magazines erected by what he understood to be a subsidiary realty corporation of the appellee powder company, and for the use of which Allen paid no rental. Prior to the execution of the note Allen sold certain powder and explosives to the construction company, used by it in constructing the roadbed of the Chicago, Weatherford & Brazos Valley Railway Company. The bill for the powder, etc., being several months overdue and Allen being unable to collect it, he placed same with his attorney, A. B. Planary, Esq., for collection and adjustment. Mr. Planary finally secured the note sued on and delivered same to Allen, signed by all the parties as makers, except Braselton, who signed the same across the back without indicating the capacity in which he signed. Allen failing to negotiate the note in Dallas, or where the makers were known, went to Wilmington, Del., where the said powder company is domiciled, and by indorsing same, got that concern to accept same as a credit on his account. The credit allowed on his account for the. note did not go specifically in payment of the debt of the construction company; that debt having been prior to that time paid by Allen. The note was signed by all parties at Weatherford, Tex., and there delivered to Planary, the attorney for Allen. All the makers had signed the note, except Erwin, when it was presented to Braselton in the forenoon of the day of its execution. When first presented to him he positively declined to sign it. After some discussion with those interested, he told them, he would consider it. further. Those in charge of the matter then went to Erwin seeking his signature on the note, whom, it seems, they had been negotiating with before, and he finally signed the note upon the express condition that Braselton would also sign and upon the agreement of the parties that he would do so. The note was again presented to Braselton, who examined it and said it was a good note, and that he would “indorse” it, which he did. There 'was much testimony, of course, developed in detail on the trial, but what we have outlined are the substantial facts, briefly told, upon which the rights and liabilities of the parties depend. It is proper to say, if that fact is important, that no representations were made by Planary to any of the parties that induced them to sign the note, or which would affect their liability. Nor did he in any respect represent the powder company, but was solely representing Will R. Allen. Another fact necessary to state in passing upon one of the issues presented by this appeal is that about three days prior to the execution of the note sued on Will R. Allen prepared and filed, in the office of the county clerk of Parker county, an affidavit under the statute claiming a lien on the property of the Chicago, Weather-ford & Brazos Valley Railway Company, for the cost of the powder, etc., furnished to the construction company, and which was used in the construction of the railroad company’s roadbed, etc. Also, it was shown that G. A. Holland had been appointed by the district court of Parker county, and qualified as receiver of both the construction company and the Chicago, Weatherford & Brazos Valley Railway Company, and was in possession of and administering the assets of both, at the time this suit was filed.

It is impracticable, and would extend this, opinion too much, to discuss the assignments of all the parties separately, and for that reason we will notice the issues without reference to the. assignments.

The first, issue presented here, and which was urged by all- the makers of-the note in the court below against the powder company, save Allen, is that the powder company was in law bound to first exhaust any security it had by virtue of the material-man’s lien asserted by Allen against the roadbed of the Chicago, Weatherford & Brazos Valley Railway Company. On this issue an accepted authority says that in the absence of an express agreement to do so: “The rule is that a surety is not released by delay on the part of the creditor in enforcing collateral security for the debt; and the creditor or obligee is not required, nor can he be compelled to resort to such security, or to any other means in his power to enforce the payment of the claim, even though, the principal becomes insolvent or the security eventually is lost.” 32 Cyc. 97. The same authority also holds that a court of equity may “for good cause shown,” and in order to protect the surety, require the creditor or obligee to proceed against the principal or his property, or against any security held by the creditor or obligee before resorting to any “security” furnished by the surety, but is not required to resort to useless proceedings, nor follow securities valueless by reason of prior liens. 39 Cyc. 234. The rule announced by Cyc. is settled law in this state. The measure of damages against the surety is the debt which he agrees to pay, and his liability to the holder of the- note' is not to be lessened, or his obligation to pay delayed, by the pursuit of other security furnished by the maker. The undertaking of the surety is independent and additional to any security furnished by the maker, and as a corollary the holder of the note may demand and sue upon the unqualified promise of the surety without reference to any collateral security available from other sources. Levy v. Wagner, 29 Tex. Civ. App. 98, 69 S. W. 112; Williams Bros. v. Rosenbaum, 79 S. W. 594.

Further, on the trial of the case, it was not the duty of the holder of the note to take any steps that might have been taken to establish and foreclose the materialman’s lien sought to be fixed by Allen against the Chicago, Weatherford & Brazos Valley Railway Company. The benefit to be secured by such a lien upon the roadbed of the railway company was dependent upon the validity of the lien; whether it had been fixed in point of time; whether the notice required by statute had been given by Allen, who was in effect a subcontractor, since he did not furnish the material to the railway company, but to the construction company, the contractors building the same; whether the security, if followed, was valueless and as a consequence its pursuit useless. The utilization of this security was further removed from the reach of the powder company by the appointment of a receiver for both the construction' company and the Chicago, Weatherford & Brazos Valley Railway Company, and the ramifications of any attempt to utilize it further complicated and delayed. Under the facts recited, coupled with the duty of the sureties to protect themselves in any security inuring to their principal, to have abated the suit brought by the powder company, the purchaser for value and before maturity of the note, would have resulted in destroying the obligation assumed by the sureties when they signed the same, and upon which the powder company relied when it purchased the note from Will R. Allen, the original payee, and subsequent indorser of same. Hence we conclude the court below did not err in overruling the plea' in abatement of the appellants.

It may also be ■ said that the judgment of the court below protects the sureties as directed by statute, and subrogates them to any rights under the materialman’s lien asserted by Allen. Whether the pleading and proof authorized such subrogation is immaterial, since it at least in no respect destroyed or lessened any equitable rights the sureties have to proceed against their principal for whatever portion of the debt they may be compelled to pay.

The next issue-raised in the court below and properly presented here is the refusal of the court below to submit to the jury whether or not Erwin signed the note on the express agreement that Braselton would sign the same, and that he and Braselton should be bound alike thereon, and whether or not Braselton signed the note as an indorser merely. As against the powder company we think there was no error in refusing to submit such issues, since evidence shows, as a matter of fact, that the powder company came into possession and ownership of the note before maturity for value paid, and without notice of any rights or equities of those whose names are signed thereto other than such notice as was imported by the note itself. All the parties, including appellant Erwin, signed as makers, except appellee Braselton, who signed his name across the back of the note. Such indorsement across the back of a note by one not the payee in the note is held by the courts of a majority of the states to constitute the indorser a joint maker or surety, and his liability unlike that of an indorser or guarantor, when the signature is unaccompanied by words expressing the nature of his undertaking. Barton et al. v. American National Bank, 8 Tex. Civ. App. 223, 29 S. W. 210; Latham v. Flour Mills, 68 Tex. 127, 3 S. W. 462; Cadwallader v. Hirshfeld, 62 N. J. Law, 747, 42 Atl. 1075, 72 Am. St. Rep. 671, and note.

The cases cited also hold that parol evidence is admissible as between the-' signers of the note to show the real character of the obligation intended to be assumed by such indorser. See, also, Behrns v. Rogers, 40 S. W. 419; Rice v. Farmers’, etc., Bank, 42 S. W. 1023. And in the instant case the court did permit Braselton, as against his comakers, only to show the real contract between them. As to the powder company he was by law a surety. So as between Erwin, who signed as a principal, and the powder company no evidence was admissible to show any lesser obligation than the note, imported, since the latter, by the evidence was shown to have bought the note before maturity for value, and without notice of any agreement between the parties to the note which would affect Erwin’s liability.

But under appropriate assignment of error Erwin asserts the proposition that, having signed the note on the express agreement that Braselton would also sign the note, and Braselton having signed the note at its inception across the back thereof without words expressing the character of his undertaking, he was in law a surety in like manner as Erwin, and parol testimony was inadmissible to show a different undertaking, and upon which to base a judgment 'against Erwin in favor of Braselton. With reference to such proposition, the evidence is undisputed that all parties to the note were in fact sureties for the construction company, since the debt was not the individual debt of any of them. The evidence is also undisputed that all the makers of the note were principals as to Braselton, except Erwin, under the agreement that he should be a surety only as to them, and also that he had no knowledge of the condition upon which Erwin signed. As to Erwin it is undisputed that he agreed to be bound only on condition that Braselton signed the note with him, and the legal inference from such condition is not that he should be bound to Braselton as principal, but that both should be equally bound. To hold otherwise would be to destroy the very condition he imposed and render it meaningless. It is also undisputed that Erwin had no notice, nor was a party to the agreement between Braselton and the other parties to the suit. Thus it will be seen the question arises, Was the •evidence and the manner of signing the note such as in law to constitute Erwin a principal as to his cosurety, Braselton, and exempt Braselton from the general rule of equal contribution between sureties? “The principle on which one surety is regarded as liable as a principal to another surety is ■that a state of facts is shown to the court from which it appears positively, or by fair and reasonable inference, that stich surety intended to stand in the character of principal as to subsequent signers.” Dulling et al. v. Weekes et al., 40 S. W. 178. Applied to the undisputed facts in this case the judgment of the court below is not sustained by the rule announced in the case cited. While it may be correct to say that the statements made by Braselton to those who induced him to sign the note made him secondarily liable as to them (but which is not necessary for us to decide), and while it may also be said that he was unaware of the agreement made with Erwin that Erwin should only be bound as Braselton was bound, it is also true that as Braselton’s signature appears upon the note he, as relates to Erwin, is a surety in the same manner and by the same process of reasoning that he is a surety as to appellee, powder company, since his indorsement of the note is unaccompanied by words of limitation, and since his agreement with those who secured him to sign the note is of no greater binding force than is the agreement made by appellant Erwin with those who secured him to sign the same note, and that as a consequence parol testimony was admissible against Braselton to show how Erwin intended to be bound upon the note. .The rule is well settled that as between themselves the signers may always show the real character of their undertaking, and the contract of appellant Erwin could not be changed by any subsequent agreement between the other signers. Erwin and Bras-elton made no contract between themselves. On the contrary, their agreements were with the other sureties, and neither participated in, nor was bound by, the same. The result of their contracts in law was that as to them the other sureties became principals, and they in turn became equally bound and should in equity contribute equally as sureties to the payment of the note; and, that being true, we think the court erred in directing a verdict for Braselton against Erwin.

The next issue raised by assignments of error in various ways is that the sale of the powder and explosives, in payment of which the note sued upon was given, was in fact a sale by the appellee powder company, and not a sale by Allen as a local merchant, and that the manner of selling the same in ■law constituted the transaction of intrastate business, and the powder company being without a permit to transact business in the state of Texas, as provided by articles 1314, 1318, Rev. Stats. 1911, and 745, 746, Rev. Stats. 1895, it was as a consequence not entitled to maintain the suit upon the note.

Aside from what we have said in stating the facts in this case, the evidence develops without dispute that appellee powder company is a foreign corporation, with headquarters at Wilmington, Del., without a' permit from the state of Texas to transact or solicit business or establish a general or special office within its boundaries. The greater part of the powder, etc., was shipped to the construction company direct from the powder company’s wills, although a small portion was shipped from Dallas. Allen bought his powder from the powder company under a contract existing between them, which by its terms assigned to Allen certain trade territory, fixed the price he was to pay for the powder, including terms and discount, provided for drayage allowances in certain cases, declared the contract should be forfeited if Allen sold to his customers for less than the prices fixed by the powder.company, provided that Allen should pay current prices for all supplies not mentioned in the contract, arranged for advance of prices in case of advance of freight rates or cost of packing, and provided for storage facilities to be furnished by the powder company. All the powder delivered to the construction company was bought by Allen under the terms of the foregoing contract, and was paid for by him before he received the note sued on in this case. The noté was sold to the powder company as stated in the beginning of this opinion. The powder company also sent its representatives through the territory allotted to Allen, soliciting business without reference to the contract, which seems to have been its prerogative. Allen wrote the construction company that one of these representatives, one Magill, would, at Allen’s request, call upon the construction company, and asked them to sign certain contracts for the purchase of some or all of the powder delivered previously by Allen to the construction company, and whicjh had been signed by appellee powder company before delivery. Magill secured the contracts. The contracts were signed by the powder company and the construction company, and recite that the powder company sells, and the construction company purchases, the explosives, etc., therein described, at the prices and upon the terms therein fixed, and that all supplies purchased thereunder shall be invoiced to the construction company through Will R. Allen, Dallas, Tex. The powder company did not present bill for, or demand payment of, the powder shipped under said contract from the construction company, but did collect same from Will R. Allen.

The foregoing are the facts surrounding the manner and method of the sale and delivery of the powder. The statute has been long since upheld and repeatedly sustained, and hence it becomes our single duty to determine whether the powder company was “transacting” its business in Texas, since it is not contended that it had either general or special office in the state, and since any participation in the sale by Magill, the admitted and accredited traveling agent of the powder company, will not constitute the same intrastate dealing, for the reason that the powder company, without securing a permit to do so, may send its agents into this state for the purpose of soliciting orders for merchandise to be shipped into this state from the state of its domicile. Miller v. Goodman, 91 Tex. 41, 40 S. W. 718; Barnhard Bros. & Spindler v. Morrison, 87 S. W. 378, et seq. Thus the only question remaining is, Was Allen the agent of the powder company, and was the storing of the powder, etc., in the magazine by Allen the act of the powder company? Allen says all powder shipped to him and by him stored, as well as all shipped direct to his customers, was purchased outright and paid for accordingly, including the powder shipped to the construction company, and his statement in that connection is not disputed, circumstantially or otherwise. The two contracts offered in evidence, the one on trial and the other on motion for new trial, do not in our opinion contribute anything towards establishing his agency.

A careful consideration of both shows, in our opinion, no intention to ship goods into Texas and store them and sell them from the magazines as the trade may require. On the contrary, said contracts seem to have been prepared solely for the purpose of holding Allen, as well as Allen’s customers, to certain fixed rules, terms, and prices demanded by the powder company, and which no doubt tended largely to the increase and profit of their business, and which it is fair to assume were conditions precedent to the purchase of their product by either Allen or the construction company. And in discussing whether Allen was the agent of the ap-pellee powder company, we do not mean to be understood as holding that the Sale by a resident agent of the merchandise or product of a corporation created under the laws of another state, and the shipment of the same into this state, would be an act of intrastate commerce. Such an act would be interstate commerce. Miller v. Goodman, supra. We have discussed the question of his agency for the reason that only upon the theory that he was the powder company’s agent, and that as agent he had stored the merchandise in the magazines and then sold same, could the issue of intrastate commerce, under the proven facts, enter into the casa

In accordance with the views we have expressed in this opinion we find no error in the judgment of the court below, except that part thereof which finds that appellee Bras-elton is entitled to a judgment against the appellant Erwin. That judgment is set aside and held for naught, and it is here ordered that the judgment of the court below be reformed so as to provide that Braselton and Erwin shall jointly and severally recover judgment against the other makers of said note for any sum of money paid by them on said judgment, and that as between themselves each shall be proportionately liable to the powder company and Allen, as provided by statute regulating the rights of sureties.

Reformed and affirmed.


author: HENDRICKS, J.

text:
    BERGMAN PRODUCE CO. v. BROWN.
    (Court of Civil Appeals of Texas. Amarillo.
    April 12, 1913.
    Rehearing Denied May 17, 1913.)
    1. Evidence (§ 448) — Parol Evidence to Vast Whiting — Check.
    Where defendant wrote on his check, “Given in full payment of account for the months of June and July,” it became an unambiguous contract which could not be contradicted by showing that it was a full settlement of the balance upon the account for previous months.
    [Ed. Note. — Eor other cases, see Evidence, Cent. Dig. §§ 2066-2082, 2084; Dec. Dig. § 448.]
    2. Accobd and Satisfaction (§ 26) — Com-pbomise and Settlement (§ 23) — Evidence — Burden of Pkoof.
    In order that the payment of less than the entire sum due shall become- an accord and satisfaction of the greater liquidated sum, the party claiming the accord and satisfaction must sustain the 'burden of exhibiting a bona fide controversy or dispute.
    [Ed. Note. — For other cases, see Accord and Satisfaction, Cent. Dig. §§ 162-165; Dec. Dig. § 26 ; Compromise and Settlement, Cent. Dig. §§ 91-94; Dec.. Dig. § 23.]

      3. Accord AND Satisfaction (§ 8) — COMPROMISE AND SETTLEMENT (§ 6) — PART PAYMENT — Consideration — Dispute as to amount Due.
    Where a certain sum is due from one person to another, a release of the entire sum, upon payment of a part, is without consideration, and the creditor may still sue and recover the balance ; but, if there be a bona fide dispute as to the amount due, such dispute may be the subject of a compromise so that payment -of a part will be a satisfaction of the entire claim.
    [Ed. Note. — For other cases, see Accord and Satisfaction, Cent. Dig. §§ 60-65, 84, 87; Dec, Dig. § 8; Compromise and Settlement, Cent. Dig. §§ 35-50; Dec. Dig. § 6.]
    4. Accord and Satisfaction (§ 10) — Compromise and Settlement (§ 6) — Part Payment of Undisputed Claim — Effect.
    A dispute with the creditor’s agent that a less sum is due than the agent demands, and the sending of a check to the creditor without any imputation of notice of such a dispute, is not a sufficient dispute to support a satisfaction, but amounts merely to the tender of a less sum for a greater debt which, even though accompanied with a statement that it is in full and accepted by the creditor, operates only as a part payment and does not prevent the creditor from enforcing the balance of the debt.
    [Ed. Note. — For other cases, see Accord and Satisfaction, Cent. Dig. §§ 67-74; Dec. Dig. § 10 ; Compromise and Settlement, Cent. Dig. §§ 35-50; Dec. Dig. § 6.]
    5. Accord and Satisfaction (§ 12) — Check Conditioned on Account as Payment in Full.
    The creditor’s acceptance of a check for a certain amount containing the debtor’s indorsement, “Given in full payment of account for the months of June and July,” operated as a settlement of the June and July accounts, but, although the amounts and items of goods sold during those two months were certain and the amounts of credits during that time was also certain, the court cannot, on mere conjecture, apply credits coincidently showing in those months upon account for such months, separate from the account for previous months.
    [Ed. Note. — For other cases, see Accord and Satisfaction, Cent. Dig. §§ 92, 93, 96; Dec. Dig. § 12.]
    6. Trial (§ 286) — Instructions—“Bound to Understand.”
    “Bound to understand,” used in an instruction to the effect that the party to whom a check was offered in settlement of a larger amount was bound to understand from the tender that it was offered on condition of settlement, may mean an express scienter of the facts, aside from the implication of knowledge which, under certain circumstances, could be imputed whether he understood or not.
    [Ed. Note. — For other cases, see Trial, Cent, Dig. §§ 700, 701; Dec. Dig. § 286.]
    Appeal from Cottle County Court; W. E. Prescott, Judge.
    Action by the Bergman Produce Company against R. C. Brown. Judgment for defendant, and plaintiff appeals.
    Reversed and remanded.
    See, also, 141 S. W. 153.
    Fires & Diggs, of Childress, D. E. Magee and W. H. Ratliff, both of Quanah, and Jas. M. Whatley, of Paducah, for appellant. R. D. Browne, of Paducah, for appellee.

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

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

   HENDRICKS, J.

This is a suit by che appellant, Bergman Produce Company, against the appellee, R. C. Brown, upon a verified account, claiming a balance of $396.-34. The appellee admitted the account, except in so far as it might be defeated in whole or in part by the facts of his answer, which was based upon a purported settlement, claiming that the following checks constituted an accord and satisfaction of the balance claimed by the appellee, except the sum of $15.85, for the month - of August, which he' tendered into court:

“Brown & Jahn Kandy Kitchen. Padu-cah, Texas, June 3rd, 1910. Pay to the order of the Bergman Produce Co. $198.20, one hundred ninety eight and 20/100 dollars. To the First State Bank,- Paducah, Texas. In full payment of account to June 1st, 1910. R. C. Brown.”

“Brown & Jahn Kandy Kitchen. Paducah, Texas, August 2nd, 1910. Pay to the order of Bergman Produce Co. $'441.90, four hundred forty one and 90/00 dollars. To the First State Bank, Paducah, Texas. Given in full payment of account for the months of June and July. R. C. Brown.”

The verified account in this case exhibits itemized sales and amounts due therefor from and including February 28, 1910, to August 3d, inclusive, of the same year, amounting in the aggregate to the sum of $1,741.87, with running credits amounting to the sum of $1,345.53, leaving the balance sued for. It is not contended in this case that appellee is not legally liable for the goods purchased; if the purported settlements were not made, or the plea of accord and satisfaction was not sufficiently proven, the confession of the appellant’s cause of action, except in so far as it may be avoided by the special plea, precludes inquiry into the sufficiency of said account. The theory of the appellee is that the payment of $198.20 to appellant, with the inscription on the check, on account of a dispute having arisen, to the effect that he owed a less amount, the appellant contending for a greater amount, the check for said sum constituted a settlement in full of the dealings between them to June 1, 1910.

It seems also to be implied from the evidence that appellee contends that, as to the check for $441.90, it was not only a full settlement of the account for June and July between appellant and appellee, but also settled any prior balance contended for by appellant upon the account for previous months, even if the former check did not have that effect. We are not quite clear from the record in this cause that the appellee is contending for such a retroactive effect of the latter check for $441.90; but, if so, the testimony would contradict the check, which on the face of it is declared to be a full payment of the account for June and July, and the June and July accounts, in so far as the amounts are concerned, are distinct from the accounts of the previous months. If this check were In full for June and July, tlie check could not operate as a settlement of the balance upon the account for the previous months, for if such balance were a just balance upon the account for those months, before the check was executed, when appellee wrote upon the check, “In full of accounts for the months of June and July,” and the same was accepted by appellant, it then became an unambiguous contract, which, in the condition of the pleading in this cause, could not be contradicted by the statement that it was a full settlement for the balance on the accounts for February, March, April, and May, and appellee could not add to the unambiguous written contract to the extent indicated.

Hence the principal controversy here must revert to the check of $198.20 in settlement of prior demands, and the burden was upon appellee to exhibit a bona fide controversy or dispute when a claim is based upon a liquidated demand, in order that the payment of less than the entire sum due will become an accord and satisfaction of the greater liquidated amount.

Under the authorities, it is resolved upon the question of a new consideration to support the accord and satisfaction, otherwise the debtor has done no more than he is legally bound to do. The doctrine is so well settled in this state it is useless to discuss the eases, and the Supreme Court of the United States, in the case of Fire Insurance Association v. Wickham, 141 U. S. 577, 12 Sup. Ct. 87, 35 L. Ed. 866, expresses the doctrine as aptly as we are able to find in any of the reported eases: “The rule is well established that where the facts show clearly a certain sum to be due from one person to another, a release of the entire sum upon payment of a part is without consideration, and the creditor may still sue and recover the residue. If there be a bona fide dispute as to the amount due, such dispute may be the subject of a compromise and payment of a certain sum as a satisfaction of the entire claim; but where the larger sum is admitted to be due, or the circumstances of the case show that there was no good reason to doubt that it was due, the release of the whole, upon payment of part, will not be considered as a compromise, but will be treated as without consideration and void.” Of course the doctrine applicable to the settlement of a liquidated demand is contradistinguished where the amount is un-liquidated and uncertain, and the above rule does not apply. Also see the case of Franklin Insurance Co. v. Villeneuve, 25 Tex. Civ. App. 356, 60 S. W. 1016, for a full discussion by Chief Justice James of the Fourth District.

The testimony in this case conclusively shows that when «appellee and Hook, the appellant’s agent, had the dispute in regard to the amount of $198.20, contended for by the former as the amount then due, Hook protested and refused to accept such a settlement (accepting appellee’s statement of the transaction); and on cross-examination he said, “It was about two weeks after I had the first dispute with Mr. Hook, and we could not agree on the amount I owed Bergman Produce Company, that I sent the cheek to them at Ft. Worth, Tex.”—this check for $198.20, dated June 3, 1910. If he owed $198.20, according to his contention about two weeks before he executed the check and sent it, this itemized account exhibits a considerable amount sold by the appellant to the appellee the latter part of June, which could not have been taken into consideration by the latter when he wrote the check. The evidence also conclusively shows that Hook, the appellant’s agent, lived in and traveled out of the town of Quan-ah, where the appellant had a branch house, and from which place the goods were shipped; appellant’s principal place of business being at Ft. Worth, Tex., to which latter place Brown sent the check. •

If a greater liquidated demand is to be reduced by payment of a less sum, a dispute with one agent that a less sum is the proper amount due, and then sending a check to headquarters, without any imputation of notice of such a dispute to the corporation or to the other agent receiving the check, the consideration to support the settlement is lacking, for the reason that the burden is upon appellee to prove accord and satisfaction, and the consideration for it in this case is based upon an alleged bona fide dispute; but a mere dispute with one agent and sending the money to another is not sufficient, and the appellee is met with the plain principle merely of tendering a less sum for a greater debt; and, as the Supreme Court of Kentucky expressed it: “The payment or tender of a sum, less than the amount of the debt, even though accompanied with a statement that it is in full, though accepted hy the creditor, does not operate to defeat him [the creditor] from collecting the balance of the debt, for the reason that there is no consideration for the surrender of the unpaid portion.” Cunningham v. Construction Co., 134 Ky. 198, 119 S. W. 765, and quoted in Sanders v. Standard Wheel Co., 151 Ky. 257, 151 S. W. 675 (the latter a well-reasoned and illustrative case of the lack of meeting of minds upon a disputed account). There was not sufficient evidence in this case to support accord and satisfaction based upon the check of $198.20, in full of accounts to June 1, 1910, the amounts, credits, and the items of the account to that date having been conclusively proven, and the check tendered in full of said account not having been shown to have been based upon a dispute which the Bergman Produce Company or the agent receiving the check were cognizant of; hence the acceptance of the same and the condition of this record could only be considered as a part payment and not a payment in full. We are unable to reverse and render this cause on account of the matter of application of credits.

Although the acceptance of the check of $441.92 settled the June and July accounts, whatever that may be, however, we are unable to deduce from the record upon just what this settlement was based. The amounts and items of goods sold during those two months are certain; the amount of the credits during that same period are also certain, gathered from the account; but we are unable to say these credits were allowed appellee referable to this particular settlement. Hook testified in regard to this check and the séttlement of the accounts for those two months that he “gave him (appel-lee) credit for some little stuff and it brought it down to about that amount” (meaning the amount of the check); but we are unable to tell just what “stuff” it was or the estimated price or value of same. It would be mere conjecture to say that it consisted of the credits shown in June and July in the matter of the running accounts; "and we are unable to arbitrarily apply credits which coincidently show in that month upon the account for that month, segregated from the account for previous months. Despite the invitation in appellant’s brief to credit appellant with 10 per cent, discount to June 1, 1910, and prayer for rendition of the cause, we reverse and remand upon the facts, and the assignments are sufficient for that purpose. The expressions in the special charges that the checks must be tendered upon the “express condition,” etc., or that the “party to whom it is offered is bound to understand” from the tender that it was offered on condition of settlement, may not be applicable to the facts of another trial.

Facts might exist where a creditor should imply that the tender was made as a settlement based upon a bona fide controversy over the amount owing, without an “express condition” annexed to it; or a tender of. an amount under the same conditions may be such as that a creditor should understand the purpose of the same; but if the party to whom it is offered “is bound to understand” from the' offer that he accepts it in satisfaction of the whole amount, it might be susceptible of the construction that if he could have understood it, but did not understand it, he would be excused from the settlement. “Bound to understand” may mean an express scienter of the facts, aside from the implication of knowledge which under certain circumstances could be imputed whether he understood or not.

The main charge of the court is more affirmative for the defense than for the plaintiff; and the conclusiveness of the verified account as a liquidated demand, the balance of which the jury are to find against defendant unless they find it defeated by accord and satisfaction, setting out the elements of the latter, 'would, we believe, have been a more appropriate direction to the jury, of course casting the burden of proof upon the defendant. The court did this, however, more negatively for the plaintiff and affirmatively for the defendant than is usual; but, aside from this, the charge, we think, is sufficient as against the special charges submitted and is sufficiently expressed if the facts had only been sufficient to submit the issue to the jury, which was not the case.

Reversed and remanded.