author: CARL, J.

text:
    CHAPA v. ABERNETHY.
    (No. 5439.)

    (Court of Civil Appeals of Texas. San Antonio.
    March 17, 1915.
    Rehearing Denied April 14, 1915.)
    1.Libel and Slander @=21 — Application op Words to Plaintiff — Name.
    A newspaper article, which charged that those who arrested one accused of murder lynched him and deserved to be executed, was a libel against one who was known in the community to be a member of the posse that attempted to make the arrest, and who himself killed the accused, though no name was mentioned.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. § 103; Dec. Dig. @=21.]
    2. Libel and Slander @=105 — Admissibility of Evidence — Application to Plaintiff.
    Plaintiff, in a libel suit, may call as witnesses those acquainted with the circumstances to state that, on reading the libel, they concluded that it was aimed at plaintiff.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. §§ 282, 283, 292-294; Dec. Dig. @=>105.]
    3. Libel and Slander @=>100 — Evidence-Libelous Article.
    Where a libelous article was made a part of a petition which was sworn to by plaintiff and not denied by defendant, it was not necessary to introduce the article in evidence.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. §§ 246-256, 258-272, 291, 322, 323; Dec. Dig. @=100.]
    4. Libel and Slander @=7 — Libel Per Se —Charge -op Murder.
    An article wrongfully charging the commission of a capital crime is libelous per se.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. §§ 17-78; Dec. Dig. @=7.]
    5. Libel and Slander @=123 — Necessity op Pro op — Damage.
    Where an article is in evidence and is libelous per se, the court cannot direct a verdict for defendant for failure to prove damage, since the law presumes general damage from the publication of a libel.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. §§ 356-364; Dec. Dig. @= 123.]
    6. Libel and Slander @=121 — Damage—Excessive Damages.
    In an action for the publication of a libel in a newspaper of limited circulation, where the only witness for plaintiff who testified to having read the article stated that it did not injure the standing or reputation of plaintiff, a verdict for $3,250 was excessive and should be reduced to $1,500, notwithstanding a sworn allegation of damage in the petition.
    [Ed. Note. — For other cases, see Libel and Slander, Cent. Dig. §§ 353, 354; Dec. Dig. @= 121.]
    Appeal from District Court, Atascosa County; F. G. Chambliss, Judge.
    Action for libel by W. M. Abernethy against F. A. Chapa. Judgment for plaintiff, and defendant appeals.
    Affirmed on condition that
    plaintiff file a remittitur of part of the judgment; otherwise reversed and remanded.
    Chambers, Watson & Reyes, of San Antonio, for appellant. W. W. Walling, Ed. Haltom, and C. C. Clamp, all of San Antonio, for appellee.

       Writ of error pending in Supreme Court.

   CARL, J.

Appellee sued appellant to re-

cover damages by reason of the publication and circulation of a certain article by appellant in a newspaper owned by him and printed in the Spanish language. The paper is called “El Emparcial de Texas,” and was circulated in Bexar, Atascosa, and other counties, one copy of which, the evidence shows was sent to Jam'es A. Walton, of Atascosa county, through the United States mail, and Walton read the article, thought it referred to appellee, and handed the paper to him. The article complained of, as translated, is as follows:

“The Assassination of Trevino.
“A Deserving Attitude of the Mexicans of Jourdanton.
“On the 12th instant at 5:30 p. m. Elogio Trevino killed Sheriff Madlock, who urged Trevino to deliver to him a weapon he carried with him. There was a discussion between both, and as a consequence of this Trevino fired four shots at the officer, causing death. The killer fled, being chased by' an army of savages, who, after having him in their power, killed him in a most cowardly manner, they applied the lynch law to him.
“The Mexicans of that place, indignant at the savage crime, at once began to. investigate the matter and named Lawyer Geo. M. Martin, whose uprightness is widely known to all the inhabitants of the county, as their representative.
“Mr. Marciano Ramirez, who is one of those who has shown the most activity in this case, delivered to lawyer Martin $500.00 for his fee to prosecute the criminals, among whom are found some very well-known persons of Jour-danton.
“On Monday, Mr. Ramirez, Lawyer Martin and D. Pablo Solis were in the city and held a long conference with our director at the offices of ‘Emparcial de Texas,’ in regard to this scandalous matter. They agreed to proceed thereupon against the guilty ones and to demonstrate that the shots which caused the death of Trevino were fired at such close range as to burn his clothes. His corpse will be exhumed next Saturday. For this purpose, Dr. E. Elmendorf and a competent embalmer will leave this city.
“It is dreadful the .number of crimes of this nature which have been committed in Texas, and we do not know why, up to now, justice has been mocked so many times when a similar crime has been committed.
“Radicalism is necessary on some occasions and while after a lynching the authors have not been executed the infamous drama will continue, being represented among imbecile drunkenness and among the frenzied outcries of the red Hottentots, a disgrace to this nation and to this century.”

The petition alleges that by “Sheriff Mad-lock” was meant Deputy Sheriff Matlock, and by “Elogio Trevino” was meant Eugenio Trevino ; that by the expression: “Trevino fired four shots at the officer, causing death. The killer fled, chased by an army of savages”— defendant meant and intended to mean that said Trevino had fled after killing said Mat-lock, and that he was pursued by an army of savages, and that plaintiff was a savage, as well as were the other members of the posse; that by the expression, “After having him in their power, killed him in a most cowardly manner, they applied the lynch law to him,” was meant, and the defendant intended it to mean and to be understood by those who read the article, that the posse, of which plaintiff was one, had taken Trevino into their possession and power; that, instead of protecting him and delivering him over to lawful authority, they murdered him in a most cowardly manner by lynching the said Trevino, or by executing him without a trial by legal authority, and that thereby the plaintiff and the other members of the posse were guilty of murder; that by the’expression, “Mr. Marciano Ramirez, who is one of those who has shown the most activity in this case, delivered to lawyer Martin $500.00 for his fee to prosecute the criminals [meaning plaintiff and the others composing said posse]” and by the expression, “Among whom are found some very well-known persons of Jourdanton,” was meant, and it was intended to mean, that plaintiff and the members of the posse were well-known persons of Jourdanton, so there would be no doubt in the minds of the readers that plaintiff and the other members of the posse were the criminals referred to. And it is alleged that said article meant, and was intended to mean, that plaintiff and other members of the posse were criminals because of the alleged fact that they had murdered Trevino while a prisoner in their power and should be put to death for such crime; that plaintiff and said posse were engaged in lynching, and, unless they were put to death, other lynchings would follow.

The plaintiff also alleged that he witnessed the killing of Deputy Sheriff Matlock by said Trevino, and that he and other citizens formed a posse and pursued Trevino for the purpose of arresting him, and, when they came upon him, said Trevino rose from behind a cord of wood and said in Spanish, but which in English meant: “I have two pistols. Beware, I will kill you” — and thereupon fired at plaintiff, who, in self-defense, returned the fire and killed Trevino, while attempting a lawful arrest of the deceased.

The good standing and high character of plaintiff was pleaded, and also the falsity of the article.

The cause was submitted to a jury-on special issues as follows:

Question No. 1: “Is plaintiff, W. M. Aber-nethy, a party referred to in the alleged libelous article?” to which the jury answered, “Tes.”
Question No. 2: “Was the article a privileged one?” to which the jury answered, “No.”
Question No. 3: “What sum in money will be a reasonable compensation to the plaintiff for the damages sustained by him, if any, in this case?” to which the jury replied, “$3,250.”

On the findings, the court entered judgment in favor of appellee for the sum found by the jury, and Chapa has appealed.

Because of the fact that no names of those who took part in the attempted arrest and killing of Trevino- are mentioned in the alleged libelous article, and because the same was printed in Spanish and only shown to have been read by James A. Walton, it is contended by appellant that no particular person was intended, and that a fair and reasonable deduction from the language used does not show by innuendo a reference to the appellee. And the whole case, as here presented, may be summed up as being a contention that a general demurrer should have been sustained, and that the verdict and judgment are contrary to the law and the evidence.

The article in question plainly does charge that those who took part in the attempted apprehension and resulting death of Trevino were guilty of lynching, a sometimes mode of execution without trial or warrant of law —in short, murder by mob. It says they should be tried and executed, which is the same thing as saying that they are criminals who deserve the severest penalty known to our law. That appellee was not named therein would make no difference, for if those conversant with the facts and circumstances of the death of Trevino would, by reading said article, know to whom it referred, would know that appellee was one of the posse, and the statements were not true, it was a libel in law. The rule was well stated by Justice Collard in Houston Printing Co. v. Moulden, 15 Tex. Civ. App. 574, 41 S. W. 381:

“It was not necessary, to make the article published libelous, that plaintiff should have been named, if he was pointed out by circumstances. * * * It is only necessary that the words refer to some person ascertainable from the words used.”

Also in the case of Express Pub. Co. v. Orsborn, 151 S. W. 575:

“It was not necessary that all the world should understand who the person defamed was. It is sufficient if those who know the plaintiff can discern that she was the person meant. Newell on Slander and Libel, p. 767.”

The plaintiff below pleaded and proved that he was a member of the posse that gave pursuit to Trevino, and, upon overtaking him, returned the fugitive’s fire and killed him in self-defense. Walton knew to whom the article referred as soon as he read it and took it to Abernethy, because he knew, as every one in that community must have known, that appellee was a member of the posse. So it will be seen that the article charged appellee with murder. It is not necessary at all for the words themselves to name the party charged; it being only necessary that the person be ascertainable from the language used.

And for that purpose:

“The rule of evidence is that the plaintiff, in a libel or slander suit, may call as witnesses Ms friends or those acquainted with the circumstances to state, on reading the libel, they at once concluded that it was aimed at the plaintiff.” Houston Printing Co. v. Moulden, 15 Tex. Civ. App. 574, 41 S. W. 381, citing 13 Am. & Eng. Ency. of Law, 393, and Schulze v. Jalonick, 14 Tex. Civ. App. 656, 38 S. W. 264.

To the same effect was the holding of this court, speaking through Mr. Justice Ely, in Express Pub. Co. v. Orsborn, 151 S. W. 575, in the language above quoted in this opinion.

It was not disputed that plaintiff was one of the posse that killed Trevino, nor that he in person did the killing. At the same time it is uncontradicted that he did it in self-defense. It is admitted that appellant owns “El Emparcial de Texas,” and that copies of the paper containing the article were circulated in Bexar and Atascosa counties, nol-is there any doubt that appellee was one of the parties referred to substantially as a murderer, savage, and “red Hottentot,” who should be tried and executed for a capital crime.

The article was not introduced in evidence, but was incorporated in the petition which was sworn to and not denied by appellant. It was agreed that the translation was correct, and this fact, coupled with the fact that this part of the petition was not denied, made it totally unnecessary to introduce the article in evidence.

The court did not err in charging the jury that the article was libelous per se, for an article which wrongfully charges a commission of a capital- crime is in itself libelous.

The court did not err in refusing to sustain the general demurrer, nor is the verdict contrary to the law and the evidence. The article was in evidence, and it was libelous per se.

“It is the duty of the jury, acting under the instructions of the court, to carefully consider the wholei of the defamatory words complained of and in evidence, and give such damages as in their opinion will fairly compensate the plaintiff for the injury done to his reputation.” Newell on Slander and Libel (2d Ed.) § 13, p. 847.

And the same author says (page 838, § 1) that:

“General damages are those which the law will presume to be the natural or probable consequence of the defamatory words; they arise by inference of law and need not be proved by evidence. Such damages may be recovered wherever the immediate tendency of the words is to impair the party’s reputation, although no actual pecuniary loss has in fact resulted.”

On account of failure to comply with the rules of briefing, we will not consider any of the other assignments, except the fourteenth, which complains that the verdict is excessive. The evidence shows that the article was in Spanish, and that copies were sent to somewhere between 30 and 50 subscribers in Atascosa county. The plaintiff did not testify, and the only witness who does testify that he read the article is James A. Walton. He says it did not injure the plaintiff in his estimation, nor did it subject him to public contempt, hatred, and disgrace, in so far as he knew, and that he stands as well in the community now as he did before said article appeared. In view of all the facts and circumstances in this case, and the positive testimony of Walton, that the article did not injure plaintiff, we think it inconceivable that plaintiff could have been injured to the extent of í¡?3,250 found by the jury, and we are not willing to permit a mere sworn pleading, although not denied as provided by law, to override direct testimony that it did not injure plaintiff, especially when this direct testimony comes from plaintiff’s own witness. We are forced to the conclusion that the size of the verdict must be the result of prejudice or passion.

If within 20 days appellee files in this court a remittitur of $1,750, the judgment will be affirmed for the sum of $1,500, otherwise the judgment will be reversed, and the cause remanded for trial.
      @=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: RAS BURT, J.

license: Public Domain

text:
    AMERICAN NAT. INS. CO. v. BURNSIDE.
    (No. 7326.)
    (Court of Civil Appeals of Texas. Dallas.
    March 27, 1915.)
    1. Insurance <§=>639 — Action on Policy-Pleading — Defenses.
    In an action on a policy of life insurance, it was not necessary that the petition affirmatively allege that the insured was in sound health when the policy was issued, as required by its conditions, as that, at most, constituted a defense.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1554, 1593, 1598; Dec. Dig. <§=> 639.]
    2. Insubance <§=>390 — Life Insubance Policy-Defenses — Notice.
    An insurer which did not within the 90 days allowed by Vernon’s Sayles’ St. 1914, art. 4948, give notice that it would not be bound by the contract, thereby lost any right to defend on the ground of misrepresentations made in the application for, or in obtaining, the policy.
    [Ed. Note. — For other eases, see 'Insurance, Cent. Dig. §§ 1037, 1038; Dec. Dig. <§=>390.]
    3. Pleading <§=>236 — Discbetion of Teial Couro^-Allowance of Amendment.
    There was no error in permitting plaintiff at the trial to state what he intended to include in a proposed trial amendment, to be afterwards reduced to writing, where it did not appear that the subsequent reducing of the amendment to writing resulted in harm to defendant; since such matters are within the discretion of the court.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 601, 605; Dec. Dig. <§=>236.]
    4. Pleading <§=>248 — Amendment — New Cause of Action.
    In an action on a life insurance policy, an amendment to the petition reducing the amount claimed in the original pleading, and relying upon an indorsement thereon by defendant pursuant to an agreement with the first beneficiary mailing plaintiff the beneficiary thereunder, did not set up a new cause of action.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 686, 687, 689-706, 708%, 709; Dee. Dig. <§=>248.]
    5. Appeal and Eebob <§=>699 — Exceptions— Ciiabge.
    Where the bill of exceptions does not enable the appellate court to say that the trial court was given an opportunity before reading his general charge to consider a requested charge, the court’s refusal thereof cannot be reviewed.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2928-2930; Dec. Dig. <§=> 699.]
    6. Insubance <§=>645 — Action on Policy-Evidence.
    In an action on a policy of life insurance, where the petition as against a demurrer showed a good cause of action without alleging that insured was in sound health when the policy was issued, as required by its conditions, evidence for defendant that insured was not in sound health when the policy was issued was properly excluded where defendant did not give notice within 90 days that it would not be bound by the contract.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1554, 1632-1644; Dec. Dig. <§=> 645.]
    7. Pleading <§=>250 — Amendment—Variance.
    In an action on a policy of life insurance, an amendment seeking a recovery in an amount $6 less than that sought by the original petition, resulting from defendant’s unauthorized retention of the policy until the trial, was not a fatal variance, but came within the maxim de minimis non curat lex.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 730-733; Dec. Dig. <§=>250.]
    8. Continuance <§=>30 — Ground—Surprise-Knowledge.
    There was no error in overruling defendant’s motion to continue an action on an insurance policy on the ground of surprise at the facts set out in a trial amendment, where they were at all times known to defendant.
    [Ed. Note. — For other cases, see Continuance, Cent. Dig. §§ 99-112; Dec. Dig. <§=>30.]
    9. Continuance <§=>30 — Ground—Surprise-Defenses.
    Facts set out in plaintiff’s trial amendment, not constituting a defense to the policy sued on, could not be made the basis for a continuance on the ground of surprise.
    [Ed. Note. — For other cases, see Continuance, Cent. Dig. §§ 99-112; Dec. Dig. <§=>30.]
    10. Insurance <§=>587 — Indorsement — Effect.
    Where an insurer agreed to and made an indorsement on the policy, naming the first beneficiary’s sister as the beneficiary, it was bound by it, even though the request to do so was not made on the form provided by it.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1469 ; Dee. Dig. <§=>587.]
    Error from Dallas County Court; W. F. Whitehurst, Judge.
    Action by J. C. Burnside against the American National Insurance Company. Judgment of justice court for plaintiff was affirmed on appeal to the county court, and defendant brings error.
    Affirmed.
    M. L. Robertson, of Dallas, for plaintiff in error. Joe Utay and C. T. Williamson, both of Dallas, for defendant in error.
   RAS BURT, J.

Tile evidence adduced at trial in this case establishes, without dispute, that on July 22, 1912, plaintiff in error insured the life of Pearl McMinn for the benefit of her husband, Forrest McMinn, in the sum of $192, one-half thereof to be paid if the insured died within six months after the issuance of the policy. Forrest McMinn, the beneficiary, died September 29, 1912. After his death, and about November 15, 1912, Pearl McMinn requested the agent of the plaintiff in error to indorse the policy so that her sister, Mrs. J. C. Burnside, the defendant in error, would be the beneficiary thereunder. Plaintiff in error’s agent declined to do so until all premiums were paid to January 6, 1910. The premiums were paid at once, whereupon the agent retained the policy, promising to make the change in the beneficiary and return same within two weeks. Thereafter, and on November 25, 1912, Pearl McMinn died. The policy was not returned by plaintiff in error, but retained until trial, when it was offered in testimony, and is a part of the statement of facts. There is an indorsement on the policy making the defendant in error the beneficiary. The in-dorsement, however, is dated November 25, 1912, the day Pearl MeMi-nn died, and is signed by the secretary of the plaintiff in error. Suit on the policy was commenced March 7, 1913, in justice court, Dallas county, where judgment was for defendant in error. There was an appeal to the county court of Dallas county at law and jury trial, resulting .in verdict and judgment for defendant in error, from which this appeal is prosecuted.

We affirm the case upon the errors assigned for the following reasons:

1. Because there was no error in overruling plaintiff in error’s general demurrer and special exception to defendant in error’s petition on the ground that the petition showed no cause of action because it failed to allege “that the insured was in sound health at the time the policy was issued as required by the conditions” of the policy. If the insured was not in sound health when the policy was issued, such fact, at most, constituted a valid defense, and not an affirmative matter necessary to be alleged by defendant in error in order to disclose a cause of action.

Further, it does not appear that plaintiff in error, within the 90 days required by law in such cases, gave notice that it would not be bound by the contract. Hence that defense, if it existed, was lost. Article 4948, Vernon’s Sayles’ Stats. 1914; National Life Ass’n v. Hagelstein, 156 S. W. 353.

2. Because there was no error on the part of the trial court in permitting the defendant in error at trial to state what he intended to include in a proposed trial amendment, the same to be afterwards reduced to writing, since such matters are within the discretion of the court, and it is not made to appear that reducing same to writing subsequently resulted in harm to plaintiff in error. Nor is harm shown to have resulted from the facts alleged in said amendment and proven upon trial; since the effect was not to set up a new cause of action, as claimed by plaintiff in error, but: First, to reduce the amount claimed upon the policy in the original cause of action pleaded in the justice court; and, second, to rely upon an indorsement made upon the policy by plaintiff in error in pursuance of its agreement with Pearl McMinn. The cause of action remained the same under the policy.

3. Because we cannot consider the error assigned upon the refusal of the court to give a certain requested charge, since said charge is not presented here by bill of exceptions in accordance with the amended practice act, and we are, hence, unable to say that the trial court was given an opportunity before reading his general charge to the jury to consider such special charge, and until such facts are made so to appear the court’s action in that respect cannot be reviewed, as has been held by practically all the Courts of Civil Appeals.

4. Because the court did not err in excluding the testimony of the witness Dr. Bourland, tendered for the purpose of showing that the insured was not in sound health at the time of the issuance of the policy of insurance, for the reasons stated in the first section hereof.

5. Because the introduction of the policy sued on did not constitute error on the ground of variance, or because it set up new cause 'of action.’ The variance between the amount sued for originally and that sought by the amended petition was $6. This error was in favor of plaintiff in error, and was the result of the unauthorized retention of the policy by plaintiff in error until trial. Further, the variance comes well within the maxim, “De minimis non curat lex.” Pleading the indorsement on the policy made after the policy went into the possession of plaintiff in error does not set up a new cause of action as we have said at another place to which may be added the further suggestion that the' amendment was in relation to that which evidenced the right to maintain the cause of action, rather than in relation to the right itself.

6. Because the court did not err in overruling plaintiff in error’s motion to continue the case on the ground of surprise at the facts set out in the trial amendment, since such facts were at’ all times known to plaintiff in error.

Further, such facts do not in law constitute a defense to the policy, and for that reason could not be made the basis for continuance on the ground of surprise.

Plaintiff in error agreed to make the indorsement on the policy that it did make, and, having made it, was bound by it, even though the request to do so was not made upon forms provided by it.

The judgment is affirmed.

      i=>For otter eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: TALBOT, J.

text:
    AMERICAN NAT. LIFE INS. CO. v. ROWELL.
    (No. 7334.)
    (Court of Civil Appeals of Texas. Dallas.
    March 27, 1915.)
    1. Insurance <@=>639 — Action on Policy — Pleading — Defenses.
    In an action on a life insurance policy providing that the insurer should not be liable unless at date of issuance the insured was in sound health, it was not necessary that the petition allege that insured was in sound Health; that being a matter of defense under the terms of the policy.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1554, 1593, 1598; Dec. Dig. <@=> 639.]
    2. Insurance <@=>645 — Action on Life Policy-Issues and Evidence — Health of Insured.
    In an action on a life insurance policy, allegations that insured was not in sound health when the policy issued, as known to plaintiff and to the insured, which representations were untrue, without directly alleging that insured falsely represented that she was in sound health, did not sufficiently plead the defense to justify the admission of evidence to establish it.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1554, 1632-1644; Dec. Dig. @= 645.]
    3. Insurance <$=>390 — Lute Insurance — Defenses — Notice to Insured — Statutes.
    An insurer who did not allege and prove notice within 90 days to either the insured or the beneficiary that it refused to be further bound by the contract on the ground of misrepresentations as to the insured’s health at the issuance of the policy, as allowed by Vernon’s Sayles’ Ann. Civ. St. 1914, art. 4948, could not defend an action on the policy because of the alleged misrepresentation or any covenant of warranty.
    [Ed. Note. — For other eases, see Insurance, Cent. Dig. §§ 1037, 1038; Dee. Dig. @=390.]
    4. Appeal and Error <g^263 — Review—Exception.
    Where the refusal of a special charge was not excepted to and the point reserved by bill of exceptions incorporated into the record, the refusal of the charge will be considered as approved.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1516-1523, 1525-1532; Dec. Dig. @=263.]
    5. Insurance @=536 — Action on Poi.icy — Recovery — Proof of Death.
    Under a life insurance policy making it a condition precedent to a recovery thereon that proofs of death be furnished as required by the policy, a failure to furnish such proofs, without a claim of waiver of the provisions or excuse shown, defeats a recovery:
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1323; Dee. Dig. @=536.]
    6. Insurance @=63-1- — Action on Policy — Waiver of Proofs of Death.
    A waiver of the proofs of death required by the policy, if relied on by the insured in an action thereon, must be alleged.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1593,1596, 1598,1603-1606, 1608; Dec. Dig. @=634.]
    7. Appeal and Error @=301 — Motion for New Trial — Contents—Exception to Petition.
    Rule 24 for Courts of Civil Appeals (142 S. W. xii), providing that the assignment of error shall distinctly specify the grounds of error relied on, and that a ground of error not distinctly set forth in the motion for a new trial shall be considered as waived, unless fundamental error, must be construed to harmonize with Rev. St. 1911, art. 2061, providing that rulings on instructions shal be regarded as excepted to in all cases, and article 2062, declaring that, where the ruling or other action appears otherwise of record, no bill of exceptions shall be necessary to reserve an exception thereto, does not require that an exception to the sufficiency of the petition shall be made a ground of the motion for new trial in the court below.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1743, 1753-1755; Dec. Dig. @=301.]
    8. Appeal and Error @=257, 544r — Review— Ruling on Application for Continuance.
    The overruling of an application for a continuance cannot be reviewed where it is not excepted to and the point preserved by a bill of exceptions.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1494^-1497, 2412-2415, 2417-2420, 2422-2426, 2428, 2478, 2479; Dec. Dig. @=257, 544.]
    9.Appeal and Error @=732 — Assignments of Error — Sufficiency.
    An assignment complaining that the trial court erred in overruling a motion for a new trial because the verdict and judgment were contrary to, and unsupported • by, the evidence, is too general and indefinite for consideration.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3022-3024; Dee. Dig. @= 732.]
    Appeal from Dallas County Court; W. F. Whitehurst, Judge.
    Action by John F. Rowell against the American National Life Insurance Company. Judgment for plaintiff, and defendant appeals.
    Reversed and remanded.
    M. L. Robertson, of Dallas, for appellant. Joe Utay and C. T. Williamson, both of Dallas, for appellee.
   TALBOT, J.

Appellee, John F. Rowell, as plaintiff below, instituted this suit on the 3d day of March, 1913, in the justice court, precinct No. 1, Dallas county, Tex., against the appellant, American National Insurance Company, to recover upon a-policy of insurance issued by appellant on the 22d day of July, 1912, for and in consideration of the payment of the premium of 10 cents, and the further sum of 10 c.ents to be paid weekly through her natural life, the said policy insuring the life of Gertrude Rowell, the wife of appellee, for the sum of $192, payable to appellee upon the death of his wife, with the provision in said policy that in case insured died within six months from the date thereof that in that event one-half of the aforesaid amount should be paid. Appellee alleged that his wife died on or about the 20th day of November, 1912, and that up to the time of her death all premiums accrued and due upon said policy were paid, and all conditions and provisions thereof were complied with ; that a reasonable time after the death of the insured the defendant was given notice of the death of the insured, and plaintiff duly demanded from the defendant the amount contracted for in said policy of insurance, which defendant refused to pay. Plaintiff prayed judgment for the sum of $96 (one-half the face of said policy), interest, 12 per cent, damages on the amount of the loss, attorney’s fees in the sum of $25, and for costs of suit. The defendant answered by general and special demurrers to plaintiff’s petition, a general denial, and specially that, as a condition precedent to a recovery thereon, the policy provided that no obligation is assumed by the insurance company prior to the date thereof, nor unless on said date the insured is alive and in sound health; that the insured was not in sound health at said date, and died within four months thereafter of consumption. Defendant further alleged that the premiums due on the policy were not paid according to the terms of the policy, and that it had lapsed before the death of the insured. From a judgment in favor of the plaintiff in the justice court for $132.52, the amount sued for, defendant appealed to the county court at law of Dallas county, where judgment was again rendered in favor of the plaintiff for said amount, and the defendant perfected an appeal to this court.

There was no error in the court’s action in overruling defendant’s general and special demurrers to plaintiff’s petition upon the ground that said petition showed no cause of action because it was not alleged that the insured was in sound health at the time the policy of insurance sued on was issued, or in refusing to permit the introduction of testimony to the effect that the insured at that time was not in sound health, or in refusing to give the special charge requested by defendant, to the effect that if the jury believed from the evidence that the insured was not in sound health at the time the policy was issued to find for the defendant. The plaintiff’s petition was not obnoxious to either a general or special demurrer because it did not allege that the insured was in sound health at the date of the issuance of the policy. If she was not in sound health at that time, such fact was a matter of defense to be pleaded by the defendant.

The answer of the defendant averred that the insured was not in sound health when the policy was issued, but the defense was not sufficiently pleaded to justify the admission of testimony to establish it. Without directly alleging that the insured falsely represented that she was in sound health at the time the policy was issued, it is alleged “that insured was not in sound health at said date and known by plaintiff and insured not to be so, which representations were untrue, and insured died within four months after said date of consumption, which disease she had at said date, and the defendant is ready to verify, but it was not alleged that the defendant had given notice to either the insured or the beneficiary that it refused to be further bound by the contract.

Article 4948 of Vernon’s Civil Statutes provides that in all suits brought upon insurance contracts no defense based upon misrepresentations made in application for, or in obtaining or securing, the said contract, shall be valid, unless the defendant shall show on the trial that, within a reasonable time after discovering the falsity of the misrepresentations so made, it gave notice to the assured, if living, or, if dead, to the owners or beneficiaries of said contract, that it refused to be bound by the contract or policy; it being further provided that 90 days shall be a reasonable time. The failure to give the notice here prescribed absolutely bars the insurance company from defending an action on the policy because of alleged misrepresentations. National Life Ass’n v. Hagelstein, 156 S. W. 353. The statute referred to applies to covenants of warranty as well as to statements in the application not ] made warranties by the contract. Mecca Fire Ins. Co. v. Stricker, 136 S. W. 599. The provision in the policy was not a condition precedent to a recovery thereon, but, as said, was a defensive matter to be pleaded by the defendant, and that the purpose of its pleading on the subject was to charge that the insured was falsely represented to be in good health at the time the policy sued on was issued is clearly apparent.

So far as the refusal of the special charge relating to the matter, and appellant’s complaint thereof, is concerned, it is sufficient to say that the court’s action in this respect was not excepted to and the point preserved by a bill of exception. No such bill of exception having been taken and incorporated in the record sent to this court, the refusal of the charge will be considered as having been approved. So well is this rule of practice now established that it is unnecessary to cite authorities in support of it, but in the condition of the pleadings and evidence there was, of course, no error in refusing the charge.

The third assignment of error complains of the court’s action in overruling the defendant’s special exception challenging the sufficiency of the plaintiff’s petition on the ground that it does not allege that proof of the death of the insured was made to the insurance company as required by the provision of the policy. This assignment is well taken, and requires a reversal of the case.

It is well settled that, where a life insurance policy makes it a condition precedent to a recovery thereon that proofs of death-be furnished in accordance with the provisions of the policy, and there is a failure to furnish such proofs, and no waiver of the provision is claimed, nor excuse shown, there can be no recovery on the policy. Life Ins. Co. v. Wagner, 50 Tex. Civ. App. 233, 109 S. W. 1120; Niagara Ins. Co. v. Lee, 73 Tex. 641, 11 S. W. 1024; American Nat. Ins. Co. v. Gallimore, 166 S. W. 17. Proof of the death of the insured in the present case is made, by the provisions of the policy, a condition precedent to a recovery thereon, and, plaintiff’s petition failing to allege that such proof had been made as required, and failing to allege either a waiver thereof, or an excuse for not furnishing the proof, it was obnoxious to defendant’s special demurrer, and the same should have been sustained.

That a waiver must be alleged if relied on is affirmed by the following cases: East Texas Fire Ins. Co. v. Brown, 82 Tex. 631, 18 S. W. 713; St. Paul Fire & Marine Ins. Co. v. Hodge, 30 Tex. Civ. App. 257, 70 S. W. 574, 71 S. W. 386; Hollifield v. Landrum, 31 Tex. Civ. App. 187, 71 S. W. 979.

Appellee does not attempt to reply to the assignment of error raising the question just discussed, but objects to its consideration for the reason that the error therein-complained of was not made a ground of appellant’s motion for a new trial in tlie court below, and cites in support of his objection rule 24 (142 S. W. xii) promulgated by the Supreme Court for the government of the Courts of Civil Appeals, and rule 101a (159 S. W. xi) for the district and county courts. In view of the decision of the Supreme Court in the case of Railway Co. v. Beasley, 155 S. W. 187, the objection must be overruled. In that case the Supreme Court said that rule 24 must be construed so as to harmonize with articles 2061 and 2062 of the Revised Statute, the latter of which declares that, “where the ruling or other action of the court appears otherwise of record, no bill of exceptions shall be necessary to reserve on exception thereto,” and with a former decision of that court; that, so interpreted, rule 24 does not require that the giving or refusing of charges to the jury shall be included in the motion for a new trial filed in the lower court. In Clark & Loftus v. Pearce, 80 Tex. 146, 15 S. W. 787, it was held that, in order to have the insufficiency of the evidence to support the verdict of a jury revised on appeal, it was necessary to make the matter a ground for action in a motion for new trial in the lower court, 'but that, “in regard to the rulings of the court upon exceptions to the pleadings, the admission of evidence, and in the giving or refusal of instructions a different rule prevails”; that, the court “having once acted, it is not to be presumed that the judge will change his ruling ; and hence, in order to appeal from such action, it is not necessary that it be made ground for a new trial.” See, also, Western Union Telegraph Co. v. Mitchell, 89 Tex. 441, 35 S. W. 4. The action of the court in overruling the demurrer in question and appellant’s exception to such ruling appears from the judgment entered and made a part of the record, and it follows from the Supreme Court’s holding in the cases referred to that it was not essential to appellant’s right of appeal therefrom to make such action or ruling a ground for a new trial in the county court; for the same reason exists for holding that it was not necessary to make such action or ruling a ground for a new trial in the lower court as that given by the Supreme Court for declaring that it was not necessary to do so where the ruling complained of was the giving or refusing of charges. Cooper Grocery Co. v. Blume, 156 S. W. 1157.

By the provisions of the practice act of the Thirty-Third Legislature (Laws 1913, p. 113), it is now necessary to except to the giving or refusing of charges, and the appellate court, in case of an appeal, must be advised of the ruling of the trial court in reference thereto and of the objections and exceptions thereto of the complaining party in order to have the ruling reviewed. No such change, however, has been made in the statute construed in the cases of the Supreme Court referred to in reference to the action of the court which appears “otherwise of record,” such as the sustaining or overruling of demurrers.

The tenth and eleventh assignments of error have been disposed of by what has been said in relation to appellant’s contention that the trial court erred in overruling its general and special demurrers to appellee’s petition because the petition did not allege that the insured was in sound health at the time the policy of insurance sued on was issued, and the ninth and twelfth will be overruled because we believe the court’s action in permitting appellee to introduce in evidence the receipt for $1 as evidence of payment of premiums on the policy, which is complained of in said assignments, was justified by the date of the receipt and other testimony in tlie case.

The other assignments of error in relation to questions not discussed, in the attitude presented, cannot be considered.

The record does not show that the action of. the court in overruling appellant’s application for a continuance, made the basis of the fifth assignment, was excepted to, and the point preserved by a bill of exceptions. Without such a bill the ruling cannot be reviewed.

The thirteenth assignment, complaining that the trial court erred in overruling the appellant’s motion for a new trial, because the verdict and judgment are contrary to, and unsupported by, the evidence, is too general and indefinite for consideration, and will be ignored.

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

      ©=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HIGGINS, J.

text:
    BOHN et al. v. BURTON-LINGO CO.
    (No. 419.)
    (Court of Civil Appeals of Texas. El Paso.
    April 1, 1915.)
    1. Appeal and Error &wkey;>501 — Record—Exceptions — Necessity op Showing — Instructions.
    Assignments of error, complaining of the giving of a peremptory instruction for plaintiff and the refusal of instructions requested by defendants, will be overruled, where it does not affirmatively appear that exception has been taken, as required by Acts 33d Leg. c. 59.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2300-2305; Dee. Dig. <&wkey;> 501.]
    2. Corporations &wkey;>269 — Unpaid Stock Subscriptions — Action by Creditor — Evidence.
    In an action by a judgment creditor of a corporation to recover unpaid stock subscriptions, evidence was admissible to show that defendants were induced to subscribe for the stock by fraudulent representations that certain persons in whom they had confidence had subscribed for stock, and that on discovering the fraud they had repudiated their subscriptions, with the consent of tie corporation, prior to the time credit was extended to it by plaintiff.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 887, 888, 980, 1149-1159, 2277; Dec. Dig. <&wkey;>269.]
    3. CORPORATIONS <&wkey;80 — Stock Subscriptions — Rescission por Fraud — Procedure.
    Stock subscriptions procured by fraudulent representations may be rescinded by the subscriber by notifying the corporate authorities, without taking legal proceedings.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 244, 240-264, 1407, 1407V2; Dec. Dig. &wkey;80-.]
    4. Corporations &wkey;>80 — Subscription Contracts — Grounds por Rescission — False Representations.
    A promotor’s false representations that certain persons in whom the subscribers had confidence had subscribed for corporate stock, when relied on by the subscribers, constituted such fraud as authorized them to rescind their subscription contracts.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 244, 246-264, 1407, 1407% ; Dec. Dig. <&wkey;80.]
    5. Corporations <&wkey;243 — Stock Subscriptions — Repudiation—Liability to Creditors.
    A person induced by fraud to become á subscriber to the capital stock of a corporation is relieved from liability to the corporation’s creditors, where he repudiates his subí 'option promptly and before the rights of the creditors intervene.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 943, 944, 946-950, 952-959, 974, 975, 979; Dec. Dig. <&wkey;>243.]
    6. Corporations <&wkey;83 — Stock Subscription-Cancellation por Fraud — Consent.
    The rule that a stock subscription contract cannot be canceled except with the consent of all stockholders does not apply to a contract procured by fraudulent representations of the pro-motor of the corporation; the right to cancel in such case not being dependent on consent.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 328-336; Dec. Dig. &wkey;83.]
    7. Alteration oe Instruments &wkey;JÍ8 — Stock Subscription — Release op Subscribers.
    The alteration of the terms of a stock subscription contract, without consent of, the subscribers, by changing the number of shares and the amount of capital stock subscribed for, being an alteration importing fraud or improper design, releases the subscribers from liability under the contract.
    [Ed. Note. — For other cases, see Alteration of Instruments, Cent. Dig. §§ 140-145; Dec. Dig. <&wkey;18.]
    8. Alteration op Instruments <&wkey;>23 — Recovery op Original Instrument — Fraudulent Intent.
    The rule that where the instrument has been altered recovery may be had on the original instrument applies only where the alteration has been without fraudulent intent.
    [Ed. Note. — For other cases, see Alteration of Instruments, Cent. Dig. §§ 1924207; Dec. Dig. <&wkey;>23.]
    9. Corporations <&wkey;84 — Stock Subscription —Release op Subscribers — Departure prom Contract.
    The incorporation of a company with a capital stock of 810,000, instead of $15,000, as represented to subscribers, releases subscribers who have not consented thereto, acquiesced therein, or otherwise lost their right to object to such 'departure from the terms of the subscription contract.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 296-327; Dec. Dig. <S¿>84.]
    10. Corporations <&wkey;269 — Stock Subscriptions — Release op Subscribers — Change op Corporate Name — Burden op Proop.
    Where, in a creditor’s action to recover on stock subscriptions, defendants claimed to have been released because the company was incorporated as the “Co-operative Furniture & Coffin Manufacturing Company,” instead of as “The Cooperative Furniture Manufacturing Company,” as stated in the subscription contract, the burden was on defendants to prove that such change in the corporate name was a material alteration.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 887, 888, 9SO, 1149-1159, 2277; Dec. Dig. &wkey;>269.]
    Appeal from District Court, El Paso County; Dan M. Jackson, Judge.
    Action by the Burton-Lingo Company against Philip Bohn and. others. From judgment for plaintiff, defendants appeal.
    Reversed and remanded.
    Goldstein & Miller and Jones, Jones & Hardie, all of El Paso, for appellants. J. F. Woodson, of El Paso, for appellee.
   HIGGINS, J.

Burton-Lingo Company recovered a judgment in the sum of $620.15 against the Co-operative Furniture & Coffin Manufacturing Company, a corporation. Execution thereon was issued and returned “nulla bona.” The plaintiff in judgment thereupon filed a motion, setting up the facts indicated and averring, further: That B. F. Young, Philip Bohn, and O. A. Landa had subscribed to the capital stock of defendant in judgment as follows: Young, $1,000, and had only paid $100 upon the amount of his subscription; Bohn, $600, and had paid $150; Landa, $400, and had paid $100. That Young owed a balance of $900 upon his subscription, Bohn a balance of $450, and Landa, $300. An order was asked directing execution to issue against said stockholders to an extent equal to the amount of the stock unpaid by them, not exceeding the amount of the judgment, as provided by article 1198, R. S. A hearing was had before a jury, and peremptory instruction given, in accordance wherewith verdict was returned and judgment rendered in appellee’s favor, finding that Young had subscribed for 9 shares which had not been paid for, Bohn 5 shares, and Landa 1% shares, and directing that executions be issued against Young to extent of $900, against Bohn to extent of $500, and Landa for $150, so as to satisfy the amount of appellee’s judgment and no more. The parties last mentioned appeal from this order.

Various assignments complain of the peremptory instruction in favor of appellee and of the refusal of instructions requested by appellants. They are overruled for the reason that no exception appears to have been taken, as required by chapter 59, Acts 33d Leg. In order to avail one of tire right to complain of errors relating to such matters, the record must affirmatively show that the provisions of the act mentioned have been observed. And it has been held by this and other courts that the act is applicable to peremptory instructions given or refused. Needham v. Cooney, 173 S. W. 979, by this court, and Railway Co. v. Wheat, 173 S. W. 974, by Rt. Worth'court, both recently decided and not yet officially reported; Railway Co. v. Feldman, 170 S. W. 133; Case v. Folsom, 170 S. W. 1066.

The Co-operative Furniture & Coffin Manufacturing Company was chartered November 21, 1912. The items of the company’s indebtedness to appellee accrued upon various dates, beginning December 3, 1912, and- ending June 2, 1913.

Upon trial, Young offered to testify, in substance, that he was induced to subscribe for the shares of stock in the Co-operative Furniture & Coffin Manufacturing Company by representations made to him by one D. C. Huntington to the effect that J. A. Mahoney and W. S. Cox had subscribed for, or agreed to subscribe for, $500, or $1,000 each of the stock in said proposed corporation; that he was acquainted- with said Mahoney and Cox, and knew them to be successful merchants of large means, and, ignorant of the falsity of said representations and believing same to be true, and relying thereon, and induced thereby, he agreed to subscribe for $1,000 of the capital stock of said company; that very shortly after said company was incorporated he discovered that said representations were false, and that said Mahoney and Cox had never subscribed for, or agreed to subscribe for, a'ny of the stock of said corporation, and immediately upon learning said fact, he repudiated his agreement to take said shares of stock in said company and refused and declined to be bound by his subscription agreement, and having theretofore paid $100 on said subscription agreement, the Co-operative Furniture & Coffin Manufacturing Company recognized his right to repudiate • said subscription agreement, consented thereto, and issued to him one share of stock in said company to cover the $100 previously paid by him on his said subscription, which was a complete settlement between him and said corporation as to his subscription agreement; that his repudiation of his liability on his subscription agreement was made prior to the time appellee extended credit to the corporation, and at the time such credit was extended, the repudiation had been made and by the company accepted and certificate issued for the one share, covering the $100 which he had paid. Bohn and Landa offered to testify to the same effect with reference to rescission of their subscriptions. All of this testimony upon objection was excluded, and the action of the court in this respect is assigned as error.

The principle of law that fraud vitiates a contract applies to subscription contracts, and they are voidable at the option of the defrauded person. Subscriptions induced by fraudulent representations may be avoided by the subscriber, and there are a number of different remedies open to him, one being that, upon discovery of the fraud, he may rescind the subscription by notification to the corporate authorities without taking legal proceedings. 1 Cook on Corporations (0th Ed.) §§ 151, 152; 1 Thompson on Corporations (2d Ed.) §§ 706, 734, 739.

The false representations made by the promoter, Huntington, relative to subscriptions to the capital stock of the proposed corporation by Mahoney and Cox, relied upon by the parties, was a fraud upon them, and furnished sufficient justification for rescission of the subscription contracts. Ins. Co. v. Milligan, 154 Ky. 216, 157 S. W. 37; Coles v. Kennedy, 81 Iowa, 360, 46 N. W. 1088, 25 Am. St. Rep. 503; Johns v. Coffee, 74 Wash. 189, 133 Pac. 4. And the rescission having been promptly made and prior to the extension of credit by appellee, it must be held that the parties were relieved of any liability for payment of appellee’s claim. 10 Cyc. 423, 439-443; 1 Thompson on Corporations (2d Ed.) §§ 734, 739. In other words, the rule may be safely stated that one induced by fraud to become a subscriber to the capital stock of a corporation is relieved of liability to the creditors of the latter if he repudiates his subscription promptly and before the rights of creditors have intervened. 10 Cyc. 423, 439-443; 1 Thompson on Corporations (2d Ed.) §§ 734, 739; 1 Cook on Corporations (6th Ed.) §§ 151, 152, 167, 168, 171.

Under the rule indicated, the testimony would have presented a defense, and the court erred in excluding same.

Appellee urges that the rights of stockholders who have been induced to purchase stock by the fraudulent representations of the corporation, or its agents, are subordinate to the rights of those who, without any knowledge of ■ such fraud, have subsequently become creditors of the corporation. Burleson v. Davis, 141 S. W. 559, and cases cited. This well-settled principle of law applies when rescission is attempted after the rights of creditors have intervened, but is in no wise applicable to a case where rescission, based on fraud or other sufficient ground, is made and consummated prior to intervention of the rights of creditors.

Neither is there any merit in the contention that appellants’ subscription obligations could not be terminated except by unanimous consent of all the stockholders. There is a broad distinction between the rescission of a subscription contract induced by fraud and cancellation by mutual consent of the parties. In the former case the right is an absolute one, in no wise dependent upon the consent of any one. In the latter instance, it is true, at least so far as the stockholders are concerned, that the subscription contract cannot be canceled except by their unanimous consent. 1 Cook on Corporations (6th Ed.) §§ 167, 168, 169. The rights of the parties in the two cases obviously rest upon very different grounds. A discussion of the distinction would be a matter of supererogation.

In view of another trial and necessary recurrence of the questions arising upon the court’s action in peremptorily instructing in favor of appellee, it is advisable that we indicate our views upon the propriety of such action under the facts disclosed by the record.

It appears that the parties agreed in writing to take certain shares of the capital stock of a proposed corporation to be named “The Co-operative Furniture Manufacturing Company,” the capital stock of which was to be $15,000, divided into 150 shares, each of the par value of $100. Young subscribed for 10 shares of the value of $1,000, Bohn for 714 shares of the value of $750, Banda for 2% shares of the value of $250. Without the consent of the parties, the terms of the subscription contract were altered in the following particulars: Bohn’s subscription was changed to six shares of the value of $600, Landa’s to five shares of the value of $500, the name to “Co-operative Furniture & Coffin Mi’g. Company.” The articles of incorporation, as finally drawn and filed, provided for a capital stock of $10,000, and its corporate name was stated to be “Co-operative Furniture & Coffin Manufacturing Company.” A willful and material alteration of a written instrument made by one of the parties to it, after execution, and without the authority or consent of the other, avoids the instrument and defeats any rights the guilty party would otherwise have under it. Baldwin v. Haskell Bank, 104 Tex. 122, 133 S. W. 864, 134 S. W. 1178; Matson v. Jarvis, 133 S. W. 941; Kalteyer v. Mitchell, 110 S. W. 466; Texas, etc., v. Smith, 14 S. W. 1074; 1 Am. & Eng. Ency. Law (1st Ed.) 502 ; 2 Cyc. 177-182. The foundation of the doctrine is the ground of public policy that no man will be permitted to take the chance of committing a fraud without running any risk of loss by the event when it is detected. 2 Cyc. 179. An alteration of the nature indicated imports fraud or improper design, being a conclusion of law deduced from the fact that the change is willfully made. 2 Cyc. 146. Applying these rules, it follows that the alterations with respect to the number of shares and amount of capital stock which Bohn and Lauda subscribed for operated to release them from their subscription agreement.

But it is urged that such alteration will not defeat a recovery upon the theory that it is an admitted fact that there was a subscription made, and to that extent a recovery should be allowed as upon an original oral agreement, disregarding the written contract. In support of this contention, we are referred to Otto v. Halffi, 89 Tex. 384, 34 S. W. 910, 59 Am. St. Rep. 56. In that case, notes were given to cover antecedent indebtedness. An alteration with respect to interest was made without fraudulent design, and intending to make it conform to the true agreement. The court held that the alterations avoided the notes, but that recovery might be had based upon the original agreement to pay. To the same effect are Baldwin v. Bank, supra, Casey- Swasey Co. v. Anderson, 37 Tex. Cr. App. 223, 83 S. W. 840. These cases rest upon the rule, followed by the courts of a number of states, that when a written instrument has been altered without any fraudulent intent, the payee may recover upon the original consideration. 1 Am. & Eng. Ency. Law (1st Ed.) 520, 2 Cyc. 183. We doubt whether it should, or has ever been applied, to instruments other than those given to evidence a then existing valid obligation or indebtedness, arising entirely independent of the altered instrument, but if it be conceded that it would apply to a contract such as is here considered, and that the obligation to subscribe arose independent of the written instrument, still this case does not fall within its scope, because it is not shown that the alteration was made without fraudulent design. The rule invoked by ap-pellee is, in all instances, confined to cases in which the alteration is made without fraud in fact. 2 Cyc. 185. This is plainly indicát-ed by the Texas cases. And the burden rested upon appellee of showing that the alteration was made under circumstances which did not bar recovery. Matson v. Jervis, supra.

The incorporation of the company with a capital stock of $10,000, instead of $15,000 was also a departure from the terms of the subscription contract in a material respect, and would operate to release the subscribers, unless they consented thereto, acquiesced therein, or otherwise lost their right to question the effect of such departure.

As to the change in the corporate name, it does not occur to us that this was a material alteration. If facts existed which make it material, it would be incumbent upon appellants to plead and prove same.

Reversed and remanded.
      ignmFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      (gssPor other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BROWN, C. J.

text:
    ARMSTRONG v. HIX et al.
    (No. 2405.)
    (Supreme Court of Texas.
    April 14, 1915.)
    1. Judgment <®^256 — Conformity to Verdict — Erroneous Verdict.
    Under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1994, providing that the judgment must conform to the pleading, the nature of the case proved, and the verdict, the court cannot disregard the verdict and render a judgment contrary thereto, even if it is not sustained by the evidence so that the court could sot it aside.
    [Ed. Note. — For other cases, see Judgment, Cent. Dig. §§ 652, 653; Dec. Dig. @=3256.]
    2. Vendor and Purchaser <®^>239 — Resulting Trust — Bona Fide Purchaser.
    Where a widow purchased land with funds which had been community property, but took title in her own name, a purchaser for value from her who had no knowledge of the resulting trust in favor of her children acquires the property free from such trust.
    [Ed. Note. — For other cases, see Vendor and Purchaser, Cent. Dig. §§ 583-600; Dee. Dig. <@=>239.]
    Error to Court of Civil Appeals of Third Supreme Judicial District.
    Action by William Hix and others against J. W. Armstrong. A judgment in favor of the plaintiff William Hix, against the defendant J. W. Armstrong, was affirmed on error by both plaintiffs and defendants by the Court of Civil Appeals, and the defendant Armstrong brings error.
    Judgments of the Court of Civil Appeals and of the district court reversed, and cause remanded.
    O. T. Plummer and S. C. Padelford, both of Cleburne, for plaintiff in error. Finis Johnson and W. B. Harrell, both of Cleburne, for defendants in error.
   BROWN, C. J.

From the opinion of the

Court of Civil Appeals we make the following extract:

“William, Ernest, and John S. Hicks brought this suit against J. W. Armstrong, defendant in error herein, to recover a one-half undivided interest in 129 acres of land, for rents thereon, and for partition of their interest therein; and against the Mortgage & Trust Company of Pennsylvania to cancel a deed of trust alleged to have been given by Armstrong thereon to it, so far as the same affected plaintiffs’ interest therein, alleging ouster by defendant in error, who claimed title through Mary F. Duncan, but alleging that she could not confer title on him, except as to one-half thereof, because only one-half of the purchase price paid therefor belonged to her, and the other one-half belonged to them; and, notwithstanding the fact that the deed was taken in her name, yet by reason of the fact that their money paid for one-half of said land, a resulting trust arose therefrom in their favor for said one-half interest. Defendant Armstrong answered: First, by plea of not guilty; second, by three years limitation; third, two years’ limitation against rent; fourth, improvements on said land in good faith; and, fifth, that he was an innocent purchaser for value without notice. The Mortgage & Trust Company answered that it acquired the notes and mortgage in good faith, and prayed for judgment declaring that it have a superior lien on said land as against all the parties to said suit. * * *
There was a jury trial, resulting in a verdict and judgment in behalf of John S. Hicks against defendant Armstrong for 10 acres of the land and $55 as rents thereon, but in favor of defendant Armstrong as against the other two plaintiffs; and likewise judgment in behalf of the mortgage company establishing its lien as superior to the interest of the others in said land, providing, however, that if said tract of land was ever sold to satisfy said lien the part so owned by Armstrong should first be sold and exhausted before subjecting that of John S. Hicks thereto. For a fuller and more comprehensive statement of the issues, as well as the evidence submitted in support thereof, see Hix v. Armstrong, 101 Tex. 271, 106 S. W. 317, and Hix v. Armstrong (Civ. App.) 108 S. W. 797.
“The plaintiffs, as well as the defendant Armstrong, have each sued out writs of error from the above judgment, and, while presenting many reasons urging that the judgment should be reversed, we think it necessary only to consider those that must, in our judgment, have controlling effect in the disposition of this appeal.
“The first error assigned by plaintiffs in error was the refusal on the part of the court to direct a verdict in their behalf for their proportionate share of the land and the rental value thereof, asserting by their first proposition thereunder that since the evidence established that Mary F. Duncan was the guardian of plaintiffs, and as such received in her possession the property of plaintiffs with which she acquired the land in controversy, she held the title to said land as trustee for the plaintiffs, and her subsequent sale of the same to Armstrong, who bought with notice of plaintiffs’ title thereto, entitled them to recover, and the court should have so charged the jury. The evidence showed that Mary F. Duncan, under whom defendant in error Armstrong claimed the land, paid for one-half thereof with money belonging to plaintiffs, taking title in her own name. This being true, she could only convey to Armstrong a one-half interest in said land. A resulting trust arising, by reason of the above facts, in behalf of plaintiffs, she must be held to be a mere trustee for their benefit as to the other half of said land, and therefore said sale by her to Armstrong did not divest title out of plaintiffs to their half thereof. See Hix v. Armstrong, 106 and 108 S. W., supra; also, Blankenship v. Douglas, 26 Tex. 225 [82 Am. Dec. 60S]; Brown v. Marwitz, 10 Tex. Civ. App. 458, 32 S. W. 78; Smythe v. Lumpkin, 62 Tex. 242; McCoy v. Crawford, 9 Tex. 354. While this contention on the part of plaintiffs is correct on this feature of the case, still, since the evidence required a submission of the issue of limitation pleaded by defendant, it would have been error to have given it. Besides, the plea of innocent purchaser could not be raised under the facts in evidence, and therefore the action of the court is immaterial, for which reason we overrule this assignment.
“It is unnecessary to. consider the remaining assignments of plaintiffs in error, as they, in effect, complain of rulings of the court in refusing charges and admitting evidence relative to the issue of Armstrong’s being an innocent purchaser-. This issue, as we conceive, was not in the case, and it was immaterial what may have been the ruling of the court in regard thereto; for which reason they are all overruled.
“Both plaintiffs in error and defendant in error have filed cross-assignments, the consideration of which, however, we deem unnecessary, since the matters covered by them have been, we think, heretofore disposed of; but, even if they have not been, these assignments cannot be considered, since a special verdict was rendered upon special issues submitted by the court, and said cross-assignments failed to show that any motion was made to set aside the findings of the jury in the respects complained of in the lower court, said respective cross-assignments therefore are each and all overruled. See Smith v. Hessey [Civ. AppJ 134 S. W. 256.”

The Court of Civil Appeals entered judgment affirming the judgment of the district court, in thé following language:

“ ‘Believing that the justice of the case has been reached and no reversible error shown, the judgment of the trial court is affirmed.’ ”

Article 1994 of Yernon’s Say les’ Texas Civil Statutes reads as follows:

“The judgment of the court shall conform to the pleadings, the nature of the case proved and the verdict, if any, and shall be so framed as to give the party all the relief to which he may be entitled either in law or equity.”

That statute requires the court to frame its judgment so as to give to the parties who are successful the relief which they may be entitled to under the law or by equity in accordance with the verdict rendered by the jury.

The trial court has the right to set aside a judgment because it is contrary to the evidence or for the want of evidence to support it, but it cannot disregard the verdict of the jury and enter a judgment which is contrary thereto. Houston & Texas Central Railroad Company et al. v. Martin Strycharski, 92 Tex. 1, 37 S. W. 415. In the case cited the article above quoted is copied in the opinion of- the court and the following comment made in explanation thereof:

“It is made the duty of the court to enter its judgment in conformity with the verdict, whether it be correct or not, and whether the error in the verdict, if there be any, arose from erroneous instructions or rulings by the court or from a misinterpretation of the evidence by the jury. Claiborne v. Tanner, 18 Tex. 68; Lloyd v. Brinck, 35 Tex. 1; Clark v. Pearce, 80 Tex. 146 [15 S. W. 787]. The act of the judge in entering judgment upon the verdict is mex-ely ministerial, and he cannot disregard the verdict if it is responsive to the issues submitted and in proper form. It follows that the district court did not commit error in overruling the plaintiff’s motion to enter judgment in disregard of the verdict of the jury, and the judgment of the Court of Civil Appeals cannot therefore be sustained upon the ground that the district court should have entered like judgment upon the verdict.” Claiborne et al. v. Susan C. Tanner’s Heirs, 18 Tex. 68; Clark & Loftus v. Mary T. Pearce, 80 Tex. 151, 15 S. W. 787.

The judgment entered by the court in this case was in utter disregard of the verdict of the jury which found in favor of the plaintiffs below, and therefore no matter that the evidence may have been such that the court would have made a decision contrary to that to which the jury arrived, even though the evidence be insufficient to sustain the verdict, still the judgment must follow the verdict as it is rendered by the jury, leaving the court power to set it aside because of error either in disregarding the law as given to them or in misconstruction or disregard of the evidence in the case.

The evidence in this ease is sufficient to show that the defendants in error, Hix et al., were the children-of Mrs. Elzie Hix and her husband, who had been dead for a number of years before this transaction occurred. The land in controversy was purchased • by Mrs. Hix with the proceeds of property which was community property between her and her deceased husband. Therefore the land in controversy, although in the name of Mrs. Hix, belonged to her and her children; that is, she had the legal title to the land, the children having the equitable title to one-half of it. There was nothing in connection with the instrument itself, nor any fact known to Armstrong, which would put him upon notice that she held the land for herself and in trust for her children. The recorded deed and the only title that existed of which Armstrong had any notice or could have obtained any information showed that she was the legal owner of the land that she was selling to him. Armstrong claimed, and there is no evidence to the contrary, that without any notice of the equitable right of the children in the land he purchased from the mother, Mrs. Hix, in good faith and paid her a valuable consideration therefor. The effect of such conveyance was to place in Armstrong full title to, the land free from the secret and undisclosed equity of Mrs. Hix’s children. Rousel v. Stanger, 73 Tex. 670, 11 S. W. 906.

The cases cited from our state are so full and complete upon this subject that we deem it unnecessary to comment upon them, but we call attention to the case of Pouneey v. May, 76 Tex. 565, 13 S. W. 383, which is so nearly analogous to this as to be directly in point. In that ease the husband had bought the land in the lifetime of the wife and took a deed in his own name, which was not recorded. The wife died, and after her death, the deed having been destroyed, the husband secured another deed in his name, without disclosing the fact that the children had any interest whatever in the property. The deed was duly recorded, and subsequently the husband conveyed the land to an innocent purchaser for value, who had no knowledge of the former deed or of the claim of the children through the interest of the deceased wife. This court held that the purchaser from the husband under such conditions took the title free from the equity of the heirs of the deceased wife. The similarity of the two cases and the applicability of the last case cited to the one under consideration is so apparent as to render any comment unnecessary.

We have thought it proper in reversing and remanding this case to guard against a repetition of the error which was committed in the court below and announce here clearly and distinctly that under such conditions the secret equity will not prevail against an innocent purchaser, for value, of the legal title.

The judgments of the Court of Civil Appeals and the district court are reversed, and the cause is remanded.
      <@^»For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: PHILLIPS, J.

text:
    CITY OF PARIS v. BRAY et ux.
    (No. 2399.)
    (Supreme Court of Texas.
    April 14, 1915.)
    1. Pleading- <§=>312 — Exhibits — Variance Between Pleading and Attached Exhibit.
    Under district court rule 19 (142 S. W. xviii); providing that written instruments, constituting in whole or in part the cause of action sued on, may be made a part of the pleading by copies thereof being attached and referred to as such, but that no other instrument in writing, which is not sued on as a cause of action or set up in defense, but is designed to be used only as evidence, shall be made an exhibit, and that, when it shall be so attempted by attaching such instrument and referring to it as such, the court will cause the instrument to be detached from the pleading, though, under a city charter and a general improvement ordinance requiring notice to be given property owners before the making of assessments for street improvements, an assessment was invalid unless notice was given, the published notice to property owners was not the foundation of the cause of action in a suit to recover the amount of the assessment, and, though a copy thereof was attached to the petition, it could not affect the sufficiency of the petition; and hence, where the petition alleged that notice was duly given, it was not demur-rable, though the purported copy of the notice showed that defendant’s name was not included in the property owners to whom the notice was addressed, but that the name of plaintiff’s husband was so included.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. §§ 943, 946, 948; Dec. Dig. <§=>312.]
    2. Municipal Corporations <§=>366 — Street Improvements — Advertising jtor Bids — Completion oe Contract by City.
    Under a city charter and a general improvement ordinance requiring contracts for street improvements to be made only after public advertisement for competitive bids, where a contract so made after due advertisement was abandoned by the contractor before the completion of the work, the city could take over the work and complete it, as authorized by the contract, without again advertising for bids; the assessment against abutting owners having been based on the contractor’s bid, and not having been affected by the city’s completion of the work, [Ed. Note. — For other cases, see , Municipal Corporations, Cent. Dig. § 899; Dec. Dig. <§=> 366.]
    Error to Court of Civil Appeals of Sixth Supreme Judicial District.
    Suit by the City of Paris against E. F. Bray and wife. Judgment for defendants on demurrer was affirmed by the Court of Civil Appeals for the Sixth District (142 S. W. 927), and plaintiff brings error.
    Reversed and remanded.
    Wright & Patrick, of Paris, for plaintiff in error. Burdett & Connor, of Paris, for defendants in error.
   PHILLIPS, J.

The suit was instituted by the city of Paris to recover the amount of a paving assessment, together with reasonable attorneys’ fees, for paving done in front of property of E. C. Bray (E. F. Bray being her husband), situated on a certain street in the city, and for foreclosure of a lien against the property. A special demurrer to the city’s petition was sustained in the trial court, and the case dismissed. On the city’s appeal the honorable Court of Civil Appeals for the Sixth District held that the trial court erroneously sustained the special demurrer, but affirmed the judgment upon what it considered a fundamental error disclosed upon the city’s petition.

As essential to the validity of such an assessment, the special charter of the city provides that any person interested in any property claimed to be subject to the assessment shall be entitled to a full and fair hearing before the city council on all matters affecting the property or any claim of personal liability, and the council is required to make rules, providing an opportunity for such a hearing before the assessment is levied or finally determined upon; notice of the hearing to be given personally or by publication in a daily newspaper of general circulation in the city for not less than ten successive days. Under the charter there is in force in the city a general improvement ordinance upon the subject of the paving of the city streets. It provides that, when such an improvement is contemplated, a - resolution shall first be passed by the council, designating the street or portion thereof to be' paved, the general character of the pavement, and directing the city engineer to submit a report at its next meeting of its estimated cost, accompanied by plans and specifications, with a list of the property owners whose property on the street will be affected and the estimated cost of the improvement in front of each piece of abutting property, etc. If, upon the amendment or adoption of this report, the council shall decide to make the improvement, it shall instruct the city secretary to cause a notice to be published in the official paper of the city for ten days, reciting the passage of the resolution, the general nature of the improvement, its total estimated cost, the name of each owner of property abutting on the street, referring to the plans and specifications on file for the ascertainment of the dimensions of his property and the estimated cost to him, which shall be one-third of the cost of the improvement in front of his property, the estimated total cost to the city, and the date and time for property owners to present their objections to the improvement, etc.

The petition of the city alleged the adoption by the council on January 14, 1907, of such a resolution as is provided for by the general improvement ordinance, with respect to the paving of a portion of a street in the city upon which the property of Mrs. Bray abutted, the later submission of the engineer’s report, and its subsequent adoption, and the direction given by the council to the secretary to give notice of its action to the property owners and the date appointed for a hearing before the council on their behalf, by publication for ten successive days in the Paris Horning News. It alleged that the publication of such notice was duly made, and that it notified all property owners that the hearing provided for would be had on March 25, 1907, and likewise recited that Mrs. Bray and her husband were property owners on the street proposed to be paved. It declared that a copy of the notice was attached to the petition marked Exhibit D. In the purported copy attached, the name of Mrs. Bray did not appear in the list of property owners given, though the name of E. P. Bray was recited. The honorable Court of Civil Appeals held that it accordingly affirmatively appeared from the petition that Mrs. Bray had no notice of the assessment, which would render it void as to her.

In respect to the averment of notice given by the city to Mrs. Bray of the proposed assessment, the petition itself was sufficient on general demurrer. Having alleged, in substance, that due notice, to all property owners affected, of the action of the city council in relation to the proposed improvement and assessment, was given by a publication for a stated period in a designated newspaper, reciting such action, and that Mrs. Bray was one of such property owners, the effect of the petition was that notice of the proposed assessment was duly given her through that medium. The purported copy of the published notice was in a sense inconsistent with the allegation in that Mrs. Bray’s name was omitted from the list of those stated in the notice as constituting the owners of property abutting on the street.

Only such written instruments may properly be made a part of a pleading by reference and attaching the originals or copies as constitute, in whole or in part, the cause of action sued on, or the matter pleaded in defense. Those attached but designed to be used only as evidence in support of some allegations the court will, upon its own motion, detach from the pleading and adjudge as constituting no part of it. Rule 19 (142 S. W. xviii) for district courts. An assessment of this nature is invalid, unless the owner of the property affected by it is given notice and an opportunity to be heard before it is imposed against him. But the notice is not a written instrument forming in any part the basis of the cause of action for the enforcement of the assessment. The cause of action in such a case is constituted by the debt and lien. It is not one founded in whole or in part upon any written instrument, but has its origin in the provisions of law governing the levy of the assessment, and proceeds from their due execution and observance by the city authorities. The notice here was one of the requirements of the law, but any document used for that purpose was no more a written instrument constituting a foundation for the cause of action than were the charter provisions and ordinances of the city relating to such assessments, and which embodied that requirement as a part of the procedure essential to a valid levy. The exhibit was therefore an unauthorized one, and, under the established rule,, could not be considered in testing the sufficiency of the pleading.

We think the holding of the Court of Civil Appeals upon the other question discussed in its opinion was correct. The charter of the city provides that no contract for street improvements of this nature shall be made, except after public advertisement for competitive bids for the work. And by the general improvement ordinance it is required that the council, if after consideration of the objections of property owners of the opinion that the improvement should be made, shall direct the mayor to advertise for competitive bids for its construction in accordance with the plans and specifications of the engineer. The petition alleged that a hearing of the objections urged by property owners was had, and that they were overruled; that thereupon the mayor and secretary were by resolution authorized to advertise for bids for the work, which was done; that bids were received, and that of a certain firm of contractors was declared by the council to be the lowest and best bid; that a special ordinance providing the particular improvement and levying against the abutting property owners their proportionate assessments was then duly passed; that thereafter the contract with the contractors was authorized and executed; that they performed a part of the work, but failed to continue it, and, upon the repudiation of their bond by their surety, the city made full settlement with them for the work performed, and, under the terms of the contract, took over the work and completed it in accordance with the contract.

The substance of the exception urged by the defendants and sustained by the trial court was that the effect of the city’s action in completing the improvement, after the contractors failed to prosecute it, without a readvertisement for further bids for the unfinished construction and the letting of another contract, was to vitiate the assessment. It appears from the petition that the assessment was made upon the basis of cost fixed by what the council deemed the lowest and best bid for the work and the contract entered into by the city on the award under that bid; the entire cost of the work to the abutting property owners being in no way affected by the city’s action in finishing the improvement after the failure of the contractors to perform their contract. The property owners acquired the full benefit of competitive bids in the determination of the amount of the assessment made against them. The requirement of the general ordinance in that respect was therefore fully met, and it was not necessary for the city to readvertise for further bids and let another contract upon' the default of the contractors. That might have entailed a complete readjustment of the entire plan for the improvement, including alteration of the assessment and other consequences of like nature clearly not within the contemplation of either the charter or the ordinance, because manifestly not provided against. The provision in the general ordinance with reference to inviting bids and the contract for the improvement applies, in our opinion, only to the original contract for the construction, and does not necessitate a second advertisement for bids and another contract, where, in the progress of the work, there develops such a condition as the petition here reveals. In re John G. Leeds, 53 N. Y. 400; City of Milbank v. Western Surety Co., 21 S. D. 261, 111 N. W. 561.

The judgments of the district court and the Court of Civil Appeals are reversed, and the cause remanded.
      <&=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes