text:
    CITY OF FT. WORTH, for Use of ROACH-MANIGAN PAVING CO., v. ROSEN.
    (No. 8722.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Feb. 16, 1918.
    On Motion for Rehearing, March 23, 1918.)
    1. Appeal and Eeeob &wkey;?837(l) — Continú-anos <&wkey;47 — Mattebs Reviewable — Affidavits.
    Affidavit used in answer to a motion to postpone a hearing may be considered by the trial court, and the appellate court may look to the supporting affidavits to determine whether the trial court erred in overruling the motion.
    2. Appeal and Ebbob &wkey;>931(4) — Findings of Fact — Peesumptions.
    In overruling a plaintiff’s motion to withdraw announcement of ready for trial, the court must be presumed to have found in favor of defendant’s contention as contained in his affidavit in answer thereto.
    3. Limitation of Actions <&wkey;51(2) — Default in Installment — Acceual of Action.
    Where paving certificate payable in installments, and city charter, provide that all installments shall become due on default of one installment, where one installment is in default, but is paid, limitations start to run as to the others from the default.
    4. Limitation of Actions &wkey;>180(2), 183(1)— Pleading.
    No special form is prescribed for a plea of limitations, and such defense may be made by plea, or, in case the petition on its face discloses the accrual of the statutory period, by special exception.
    5. Limitation of Actions &wkey;>185 — Pleading —Sufficiency.
    A plea that plaintiff’s cause of action, if any, having accrued more than two years before suit, and defendant pleads the two-year statute of limitations, was good as against a general demurrer, and sufficient basis for evidence of failure on defendant’s part to pay an installment until it was in default, on a paving certificate which became wholly due on default in payment of one installment.
    6. Continuance <&wkey;29 — Suepbise.
    A litigant must be prepared to prove such issues of fact as he might reasonably foresee from the nature of the case, and is not entitled to withdraw announcement of ready for trial on the ground of surprise as to such matters, in the absence of any misleading acknowledgment or declaration of the adverse party.
    7. Continuance <&wkey;29 — Geounds—Suepbise.
    ■ One suing on a paving certificate is held chargeable with notice of a stipulation in such certificate, and the city charter, that such certificate became wholly due on default on one installment, and cannot claim surprise, where defendant introduces evidence under a general plea of limitations to show that an installment was paid after due date.
    8. Limitation of Actions <S=^13 — Estoppel to Plead.
    Parties by their acts, not evidenced by any writing, may estop themselves from setting up the statute of limitations.
    9. Appeal and Ebboe <&wkey;966(2) — Overruling Motion fob Continuance — Abuse of Discbetion.
    Where the affidavits of the very witnesses relied on by a party to show that defendant was estopped to' set up the statutes of limitations were before the court in entering judgment, it will not be said, as a matter of law, that the court abused its discretion in overruling a motion for continuance, especially in a court case.
    On 'Motion for Rehearing.
    10. Municipal Corporations t&wkey;519(l) — Liens — Statutes.
    Vernon’s Sayles’ Ann. Civ. St. 1914, art. 5695 (Acts 33d Leg. [1st called Sess.] c. 27, § 1), relating to renewal and extension of liens, in view of Const, art. 3, § 35, does not apply to a paving certificate and also because in referring to “either of the foregoing articles,” strictly speaking, the two preceding articles only were meant.
    11. Appeal and Error <&wkey;671(2) — Matters Review able — Record.
    Although record does not contain original petitions in consolidated actions, where transcript contains agreement that only the amended petitions and answers shall be included, and plaintiff's motion to withdraw its announcement of ready for trial stated “suit was instituted February 19, 1915,” it cannot be said there was not sufficient showing of the time of commencement of the action to warrant the appellate court in holding the action barred by limitations.
    Appeal from District Court, Tarrant County ; Ben M. Terrell, Judge.
    Action by the City of Ft. Worth, for the use of the Roach-Manigan Paving Company, against Sam Rosen. Judgment for defendant, and plaintiff appeals.
    Affirmed.
    Chas. Kassel, of Ft. Worth, for appellant. Flournoy, Smith & Storer, of Ft. Worth, for appellee.
   BUCK, J.

This is an appeal from a judgment of the district court sustaining a plea of limitation to the cause of action set forth in plaintiff’s petition. City of Ft. Worth, for the use of Roach-Manigan Paving Company, sued Sam Rosen on two paving certificates issued by the city of Ft. Worth on November 26, 1912, and carrying a lien against certain real estate described in said certificates. It appeared from the petition that the amount assessed was payable in three equal installments, the first due in thirty days after date of the certificates, the second in one year, and the third in two years after date, and that each certificate contained a provision that failure to pay any installment when due should mature all deferred payments, and it appeared from the petition that the first installment had been paid. Defendant, among other defenses, set up a formal plea of the two-year statute of limitation. The cause was tried before the court without the aid of a jury, and judgment was rendered for the defendant on his plea of limitation. The cause was tried on October 3, 1916, but judgment was not rendered until November 29, 1916. The judgment recites as follows:

“Thereupon the respective parties read their pleadings and offered their evidence, and it was the judgment of the court, after due consideration, that the defendant was entitled to a judgment in his favor on the plea of the statute of limitation filed by him, whereupon plaintiff’s counsel requested time for the preparation of a brief upon the law questions involved in said matter, and such time was accordingly granted, and decision was held pending the submission and consideration of such brief. Be it remembered that thereafter, on the 20th day of November, 1916, the plaintiff in said causes filed his certain motion to withdraw his announcement of ready for trial and to postpone the hearing of said case upon various grounds fully set forth in said motion, accompanied by the affidavit of J. W. Morris and Charles Kassel, and on the same date the plaintiff filed its certain motion for leave to file nunc pro tunc its supplemental petition in reply to the pleadings of defendant upon various grounds more fully set forth in said motion, and tendered in connection with said motion, and attached as an exhibit thereto the supplemental petition in question, and at the same time submitted to the court its brief referred to in earlier paragraph of this judgment. Thereupon, on this the 29th day of November, 1916, the said respective motions came on for hearing as preliminary to a final decision by the court of this cause, and thereupon plaintiff and defendant appeared by their respective attorneys, and the plaintiff tendered to the court in connection with its motion to withdraw its announcement of ready for trial and to postpone the hearing of the case the additional affidavits of R. E. Brown and Charles Kassel, filed on the 27th day of November, 1916. Thereupon, after a full consideration .of said respective motions, it is the judgment of the court that both of said motions should be overruled, and the same is accordingly done, to which action of the court the plaintiff excepted in open court, and tendered his respective bills of exception. Thereupon the court heard further argument with regard to the decision of the case upon its merits, and, after being fully advised, is of the opinion that the plaintiff would be entitled to recover as prayed for but for defendant’s plea of limitation as made in his first amended original answer, which plea is sufficient and well founded in law and in fact; and it is therefore ordered, adjudged, and decreed that said plea of limitation be sustained, and that the defendant go hence without day in each of said causes, and recover of plaintiff therein all costs in this behalf by him expended, to which judgment of the court the plaintiff in open court excepted and gave notice of appeal.”

From this judgment, the plaintiff has appealed.

The evidence showed that the first installment, due December 26, 1912, was paid by check of appellee, dated March 1, 1913, but that the cheek was actually delivered to the agent of Roach-Manigan Paving Company prior thereto, and passed through the Clearing House at Ft. Worth on February 15, 1913. There seems to be no evidence in the statement or facts as to when' this check was delivered or issued. There is an affidavit of’ Sam Rosen, filed in support of defendant’s answer to plaintiff’s motion to withdraw announcement of ready and postpone the trial of the case which motion was filed November 20, 1916, and in this affidavit Rosen stated that the check was given by him on February 12, 1913, and was postdated to March 1st thereafter, and that he (Rosen) requested, and the agent of the paving company agreed, that said check should not be presented for payment before its due date, but that the paving company failed to carry out the agreement, and that said check was paid through the Clearing House on February 15, 1913. It will be noted that whether the payment be held to have been made either on February 12th, when the affidavit of Rosen states the check was issued, or on February 15th, when it passed through the Clearing House, or on March 1st, the date of the check, that such payment was made after maturity of the first certificate. But appellant argues that neither the trial court nor this court can look to the affidavit of Rosen, in the connection in which it was used, as evidence of the date when the check was in fact issued and delivered, and tli'at therefore, the record being silent as to the date of delivery, the presumption obtains that payment was made at the maturity of the first installment, and that there was no default shown in the payment of the first installment. We are of the opinion that this contention is more ingenious than sound. The affidavit of Rosen, in which the statements with reference to the date of the issuance of the check were contained, was attached to and used in support of the controverting answer of defendant to plaintiff’s motion to withdraw its announcement of ready, and to postpone the hearing. In this proceeding the trial court had the right to consider the affidavits pro and con. Therefore, in' determining whether the trial court erred in overruling plaintiff’s motion, this court may properly look to th'e supporting affidavits used by each party. One of the material questions of fact to be passed upon by the trial court in the determination of this motion was, Was the payment of the first certificate made after maturity, so as to constitute a default? Hence the date of the issuance of this check became an important issue. In overruling plaintiff’s motion the court must be presumed to have found in favor of defendant’s contention as contained in his affidavit.

While there are some 21 assignments in appellant’s brief, yet we believe the material questions involved may be limited to 3 to wit: (1) Is the provision contained in th'e charter of the city, and also in the certificates sued on, to the effect that a failure to pay any installment when due shall mature all installments unpaid, binding alike on the creditor, or holder of the certificate, and the debtor? Or is this stipulation one entirely for the benefit of the creditor, and one that may by him be waived without reference to the consent or concurrence of the debtor? (2) Was defendant’s plea of limitation sufficiently full, in th'e absence of a special exception, to warrant evidence of a default in the first payment, and the consequent acceleration of the period of limitation as to the deferred payments to establish said plea? (3) Did the trial court err in overruling plaintiff’s motion to withdraw announcement of ready and to postpone the hearing of the cause?

The -first question suggested is one about which there has been some' contrariety of opinion and conflict of authority. In An-gelí on Limitations (6th Ed.) p. 103, § 111, it is said:

“But where a sum is payable by installments, and there is a stipulation that, upon default, all shall become due, the statute runs as to the whole demand from the time of default made”— citing the leading English case of Hemp v. Garland, 3 G. Dav. 402, 4 Q. B. 519.

In 1 Wood on Lim. (2d Ed.) p. 360, § 126, the author states the rule to be as laid down in Hemp v. Garland, supra, but rather protests against the soundness thereof. The text says:

“It might be argued, however, that this [the holding in Hemp v. Garland] is at variance with the well-known rule that no one is obliged to take advantage of a forfeiture, a point which does not appear to have been noticed in. the argument, and which is entitled to considerable weight in such cases. It would seem, upon a fair application of the last-named rule, that the debtor by his default put himself in a position where his creditor might, if he elected to do so, take the whole debt as due; but it seems somewhat unreasonable to say that he thereby compels the creditor to treat the whole debt as due, so that the statute is, even against the creditor’s will, put in motion to defeat his claim. The doctrine of the ease referred to would also seem to favor forfeitures, whereas, it is usually held that they are odious in law” — citing Banning on Lim. 26.

In Gilsonite Const. Co. v. Coal Co., 205 Mo. 49, 103 S. W. 93, the Supreme Court of'Missouri, in a case involving a paving certificate, decided, that the period of limitation as to subsequent installments was not shortened, against the creditor’s will, by reason of the default in an earlier installment. But the holding in this case, while broad in terms, is somewhat restricted as an authority by reason of the fact that th'e Kansas City charter, there under consideration, contained provisions not found in the Ft. Worth charter. See, also, Burnes v. Ballinger, 76 Mo. App. 58. But our own Supreme Court on certified question in San Antonio Real Estate B. & L. Ass’n v. Stewart, 94 Tex. 441, 61 S. W. 386, 86 Am. St. Rep. 864, after discussing the question fully, and citing authorities supporting both views, has adopted the rule of construction laid down in Hemp v. Garland. Hence, irrespective of what our opinion might be as to the law were the question an open one, we are bound by the announcement of the law as there presented. Therefore we must answer the first question hereinabove mooted in the affirmative; i. e., that the stipulation in the certificate and charter mentioned is binding upon the creditor, without the privilege to Mm of an election.

We will next consider the question of the sufficiency of defendant’s plea of limitation to authorize the proof of a default in the first installment (though subsequently paid), and whether the judgment sustaining such plea on such proof- was authorized. No question was raised below or urged here that the two-year statute of limitation applies to a cause of action predicated, as here; on a certificate issued by a municipal corporation for paving, where -no contractual obligation is alleged on the part of the defendant to pay the amount specified in the certificate. The authorities hold that said statute does apply. O’Connor v. Koch et al., 9 Tex. Civ. App. 586, 29 S. W. 400; Glover v. Storrie, 18 Tex. Civ. App. 6, 43 S. W. 1035; Tex. Bith. Co. v. Henry, 197 S. W. 221. The plea in- the instant ease is as follows:

“Defendant further alleges that plaintiff’s debt, if any they have, against this defendant for said alleged paving of Twenty-First street is barred by the two-year statutes of limitation, plaintiff’s said cause of action, if any they have or had, having accrued more than two years before this suit was filed, and defendant pleads the two-year statute of limitation in bar of any recovery therein.”

No exception was leveled at the form of this plea; nor was any objection made to the admission of the evidence as to the time of payment of the first installment. In fact appellant’s counsel frankly admits in his brief that he did not anticipate, until the argument to that effect had been made by counsel for appellee, that the contention would be made that the payment of the first installment after maturity established a default and put into operation the statute of limitation. No request was made at the time to delay the hearing, on the ground of surprise. The first time such request was formally made was some six or seven weeks thereafter, to wit, November 20, 1916, when plaintiff’s motion for leave to withdraw announcement of ready and to postpone the hearing was filed. It is true that in appellant’s bill of exception No. 1 it is stated:

“That on the 3d day of October, 1916, the above cause [there being originally two suits which, were consolidated] came on for hearing, a jury having been waived and all matters of fact and of law having been agreed by the parties to be submitted to the decision of the court, and thereupon came the plaintiff and defendant by their respective attorneys and announced ready for trial and the pleadings were read and the evidence submitted. At the conclusion of the evidence counsel for plaintiff stated to the court that he did not know that the defendant expected to contend to the first installment of the assessment sued upon had been paid after its maturity, and that by reason thereof the entire assessment became due so as to require suit thereon within two years after the maturity of the first installment, but stated that, notwithstanding this, and under the evidence actually developed, he believed the plaintiff entitled to a judgment, and asked for time in which to prepare and file a brief for the consideration of the court showing that limitation did not apply, which leave was granted. Some two or three days thereafter counsel for plaintiff stated to the court that after the trial of the case he had discovered upon the certificates of special assessment' an indorsement extending the maturity of which he had not been aware at the time of the trial, and with regard to which it would be necessary to make investigation, and that he might find it necessary to file a motion for leave to withdraw his announcement of ready for trial in the cases and ask for a postponement of the hearing thereof, but that even in this event he would present none the less on the main case.”

But no action of the court is here shown to have been invoked, and no actual request for withdrawal of announcement of ready and to postpone, on the ground of surprise, was made. The only request was that time be allowed plaintiff’s counsel to prepare a brief of authorities. Indeed, the claim of surprise and the request for postponement seem to have been urged only after the diligent efforts of able counsel for appellant failed to find legal authority, satisfactory even to himself, to present to trial court, to sustain the contention that under the facts in evidence judgment should be rendered for the plaintiff. No special form is prescribed under the law for a plea of limitation. Such a defense may be made by plea, or, in case the petition on its face discloses the accrual of the statutory period, by special exception. Hopkins v. Wright, 17 Tex. 30, 35; Hudson v. Wheeler, 34 Tex. 356; Alston v. Richardson, 51 Tex. 1. See form of j)lea suggested in Sayles’ Texas Pleading with Forms (1893) § 263a, p. 358.

We are of the opinion that, as against a general demurrer only, the plea filed by defendant below was sufficient as a basis for limitation, and that such evidence of the failure on defendant’s part to pay the first installment at maturity was admissible as tending to establish such plea and defense. Evans v. Jackson, 41 Tex. Civ. App. 277, 92 S. W. 47. We have examined the cases of Oswald v. Giles, 178 S. W. 677, Glasscock v. Hamilton, 62 Tex. 143, Cunningham v. Frandtzen, 26 Tex. 35, and other cases cited by appellant; but we are of the opinion that the conclusion reached by us upon this issue is not by conflict with the holding in these cases.

Was plaintiff entitled, as a matter of law, at the time his motion was filed, and on the ground of surprise, to withdraw his announcement of ready and have the cause postponed? A litigant must be prepared to prove such issues of fact as he might reasonably foresee from the nature of the case, and, in such cases, cannot withdraw his announcement and obtain a continuance, except where the issue which arises is one not of a nature to have been foreseen. Ins. Co. v. Coalson, 22 Tex. Civ. App. 64, 54 S. W. 388, affirmed 93 Tex. 644, no opinion. One having full means of knowing what testimony will be used against him, who goes , to trial without taking measures to ascertain it, is not entitled to a continuance on the ground of surprise, in the absence of any misleading acknowledgment or declaration of the adverse party. Burrow v. Brown, 59 Tex. 457. Plaintiff below must be held chargeable with notice of the stipulation in his certificate, which constituted the basis of his cause of action and the provision in the charter, under the authority of which paving had been done. It was not claimed, below nor is it hero, that either defendant or his counsel made any positive statement or committed any affirmative act tending to cause plaintiff or its counsel to be led into tbe belief tbat the defendant would not take advantage of any defensive proof, which' might be made -under this plea of limitation. In the' affidavit of Charles Kassel, counsel for appellant, in support of its motion, the following language is used:

“Mr. Storer [counsel for defendant below] then told me that they also claimed the suit was barred by limitation, and I asked how he arrived at that, in view of the fact that I was only suing on the second and third installments, and suit was brought within two years from the time the second installment became due; and he said I had all the papérs, and that he didn’t know when the suit was filed, but that if I would investigate I would probably find that I was out of court on limitation. I looked upon,the clerk’s file docket later, and saw that I had brought my suit within two years from the time the. second installment was due, and dismissed the idea of limitation applying to the case from my mind. I did not know until the defendant testified that he claimed to have made his first payment after it was due. * * * I did not know or have the slightest information until the testimony of defendant came out on the stand that it would be claimed by him that the payment in question was made after it became due, and that by reason thereof the entire assessment fell due, and I did not plead surprise when this came out and ask leave to withdraw my announcement of ready, because I did not know what good could be accomplished by such a course as the old Roach-Manigan Company was dispersed, its employés scattered, its records gone, and all I had available was the information I could secure from W. C. Pope. After the matter was taken under advisement by the court, it occurred to me that defendant might have been absent from the state during the period for a sufficient length of time to destroy the plea of limitation, if it was otherwise good.”

There was attached also to plaintiff’s motion the affidavit of R. E. Brown,- which was, in brief, to the effect that during 1912, he was in the employ of the paving company and performing the duties of assistant bookkeeper and cashier and assisting in the collections; that he talked with appellee more than once over the phone after the payment of the first installment, and that the latter told him he wanted to see his attorneys first, and that the paving company delayed putting the matter into the hands of its attorneys for suit in order that the defendant might see'his attorneys; that later defendant ■ came into the paving company’s office and told affiant to go ahead and sue. Counsel for appellee filed his affidavit in connection with appellant’s motion to withdraw announcement of ready, and also the affidavit of appellee and his bookkeeper S. Kaufman, and the affidavit of defendant states that no one Representing the plaintiff came to him after he paid the first installment and requested him to make payment of balance due; that he never stated to any one that he wanted to consult his attorneys in regard to the matter, and, in fact, did not consult attorneys until after the suit was filed. In the affidavit of J. Walter Morris attached to plain-* tiff’s motion, affiant states that he was in the employ of the paving company, and that he talked with. Mr. Rosen several times; he did not remember whether the first conversation was before or after the first installment was due; that Mr. Rosen complained that the paving had damaged his property instead of helping it, and that some one had sent him a deed to a strip of land abutting on the street where the paving had been done, and that he had placed it on the record without thinking that this would make him liable for the paving: that the Belt Railway Company had (moved its tracks from the middle of the street in front of his property, and thereby caused an undue pro rata of the paving to he assessed against him and his property; that the defendant asked him not to bring any suit until he could consult with his attorneys and have them investigate, etc.; that finally Rosen gave a definite date when he would give an answer on the subject; that on that date^he (Rosen) told Morris that his attorneys had passed on the matter for him, and advised him not to pay, and accordingly the paving company was at liberty to bring the suit any time it saw fit; that soon thereafter the suit was placed in the hands of the company’s attorney.

It would appear from the record that the most that can be said is that the affidavits supporting the motion to withdraw were in the direction of establishing an estoppel against the defendant to plead the statute of limitation. That parties by their acts, not evidenced by any writing, may estop themselves from setting up the bar of the statutes is well established under the authorities. B.. & L. Asso. v. Stewart, 27 Tex. Civ. App. 299, 65 S. W. 665, writ of error denied. 17 R. C. L. § 240, p. 881 et seq., but the affidavits of the very witnesses relied on by the plaintiff below to establish the fact showing an estoppel were considered by the trial court in entering judgment, and we do not feel justified in holding as a matter of law that the trial court abused his discretion in overruling the motion to withdraw and postpone or the motion for leave to file an amended petition setting up the plea of estoppel, etc.. This conclusion on our part is fortified by the fact that these-questions of fact raised by the motion and an.swer and the affidavits attached to the respective pleadings were considered and determined by the tribunal to which the plaintiff and defendant elected to submit matters of fact as well as of law, a jury not having been requested at any stage of the proceedings.

We believe what we have said hereinabove sufficiently disposes of all of the assignments, without taking them up and discussing them seriatim. Hence all assignments are overruled, and the judgment of the trial court is in all things affirmed.

Affirmed.

CONNER, C. X, not sitting.

On Motion for Rehearing.

BUCK, J.

We are of the opinion that article 5695, Vernon’s Sayles’ Tex. Civ. Stats, as amended by the 33d Leg. 1913, First Called Sess. p. 39, does not affect the question of limitation involved in this suit. In the first place, the caption of the amended article precludes' the idea that such was the purpose of the Legislature. Said caption reads as follows:

“An act to amend article 5695, Revised Civil Statutes of Texas, 1911, as amended by chapter 123, Acts of the Thirty-Third Legislature, relating to the renewal and extension of liens that are secured by. deeds of trust, mortgages or original vendor’s lien on real estate, and providing that said article shall hereafter read as follows, and declaring an emergency.”

Three classes of liens are mentioned, to wit, deeds of trust liens, mortgage liens, and vendors’ liens. Certainly the character of lien here sought to be fixed cannot be held to come within any one of these classes. It is a statutory lien and in the nature of a tax lien, for the municipality’s power of assessment is based upon the theory of benefits conferred upon the property assessed. 1 Page & Jones on Taxation by Assessment, p. 16; 37 Cyc. 712, 713.. Since no purpose is expressed in the caption of the above bill to extend liens other than those mentioned, a construction of the act which would seek to have it include liens other than those mentioned would be violative of article 3, § 35, of the state Constitution. In the second place, article 5695, before amendment and since, refers to the debts mentioned “in ei-tlier (emphasis ours) of the foregoing articles,” etc. Strictly speaking, “either” refers to one of two things mentioned. Standard Diet. The two foregoing articles, to wit, articles 5693 and 5691, refer to and treat of deeds of trust or mortgage liens and vendors’ liens. Therefore it may be reasonably said that the intention of the Legislature was to include in the purport and operation of the amended article only the classes of liens mentioned in articles 5693 and 5694. It further appears that said two last mentioned articles refer to causes of action against which the four-year statute of limitation is a bar. Not the two years statute. It has been held as to an assessment lien like this that the two-year statute applies. O’Connor v. Koch, 9 Tex. Civ. App. 586, 29 S. W. 400; Glover v. Storrie, 43 S. W. 1035; Beaumont v. Russell, 51 Tex. Civ. App. 351, 112 S. W. 950; Tex. Bith. Co. v. Henry, 197 S. W. 221. Hence we are of the opinion that article 5695, as amended by the Thirty-Third Legislature will not operate to extend the lien in this case. Nothing said in Denman v. Savings Association (No. 8744) 200 S. W. 1109, recently decided by this court, not yet officially published, was intended to express any views in conflict with the conclusion set forth hereinabove.

It is further'claimed that we erred in holding that appellant’s cause of action was barred, because' the record does not include the original petitions filed in the two suits which were later consolidated, and that there is no evidence as to when these suits were filed. The transcript contains an agreement that only the amended petitions and answers shall be included. In plaintiff’s motion to withdraw its announcement of ready and postpone the hearing it is stated that “suit was instituted February 19, 1915.” The certificates were dated November 26, 1912. One installment was due 30 days thereafter, which was the installment claimed to have been paid in February, after maturity, and the default in which payment upon maturity set in motion limitation.

It is insisted that the certificate here declared on contains stipulations, and the charter of Ft. Worth contains provisions inconsistent with the conclusion that it was intended that upon nonpayment at maturity of any installment the entire debt should become due. We considered these provisions and stipulations on original hearing, and concluded that in the face of the positive stipulation in the certificate contained, based on the charter provision to the same effect, we were not authorized in concluding that such stipulation did not require the maturity of all unpaid installments upon default in payment of any one. We were further of the opinion that, merely because the decision in Building & Loan Ass’n v. Stewart, 94 Tex. 441, 61 S. W. 386, 86 Am. St. Rep. 864, cited in our opinion, was predicated upon a stipulation in a contract prepared by the party which sought to evade the running of the statute did not justify us in distinguishing this case from that.

Appellant’s counsel calls our attention to language contained in our original opinion which he feels may, unintentionally on our part, be construed by some as an implied criticism of counsel for one or both parties. In using the language there was, of. course, no such intention, for every member of this court has the.utmost confidence in the personal honor and professional integrity of counsel for both parties. But for fear that the expression used may convey an unintended suggestion, we will have withdrawn from the published opinion the language to which our attention is called. We have carefully considered appellant’s somewhat lengthy motion, and the able insistent argument thereon, yet we do not find ourselves able to disturb the judgment rendered. The motion for rehearing is overruled.

Motion overruled.
      É=aEor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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source: Caselaw Access Project

author: BUCK, J.

license: Public Domain

text:
    CHICAGO, R. I. & G. RY. CO. v. TAYLOR.
    (No. 8790.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    March 9, 1918.
    Rehearing Denied April 30, 1918.)
    1. Witnesses <i&wkey;240(4) — Leading Questions.
    A question, “Did you * * * sign this document * * * upon the representations made by D.?” and a question, “Now Mrs. T. state to the jury whether or not at the time you * * * signed this agreement or voucher, you relied upon the representations and statements made by the claim agent, and the representations made by Dr. E. with reference to tho injuries,” were leading and suggestive.
    2. Appeal and Error <&wkey;1048(3) — Prejudicial Error — Leading Questions.
    Where defendant’s doctor told plaintiff her injuries were slight and advised her to settle, and defendant’s claim agent advised her to settle because her injuries were slight, admission of answers to such leading questions, could not be held to be harmless, where there was no other testimony tending to show the same facts.
    3. Release <&wkey;17(2) — Damages to Person— Representations by Physician.
    Advice of a physician of a railroad to settle, or his false representations as to extent of injuries, are not grounds for setting aside a release, where the physician had nothing to do with obtaining releases and the claim agent had no knowledge of the false representations and advice, or did not knowingly take advantage of the injured person’s confidence in the physician.
    4. Trial <&wkey;260(2) — Instructions — Requests. •
    Where all the issues and principles of law are contained in the general charge, it was proper to refuse requested instructions.
    Appeal from District Court, Wise County; E. O. McKinsey, Judge.
    Action by Mrs. E. J. Taylor against the Chicago, Rock Island & Gulf Railway Company. Judgment for plaintiff, and defendant appeals.
    Reversed and remanded.
    McMurray & Gettys, of Decatur, and Las-siter & Harrison, of Et. Worth, for appellant. Taylor, Allen & Taylor, of Henrietta, and Ratliff & Spencer, of Decatur, for appellee.
   BUCK, J.

The appellee sued the appellant for personal injuries alleged to have been received by her while attempting, to board appellant’s train at the town of Saginaw on March 2, 1916. She alleged that she and her grown son had purchased tickets over appellant’s line of railway from Saginaw to Bridgeport; that she was 76 years old and was weak and feeble in body at said time, which said fact was well known to employes of appellant operating said train, and especially to the conductor and brakeman; that her son was carrying two suit cases and other baggage, and could not assist plaintiff in getting on said train, and that he asked the conductor and brakeman, who were assisting the plaintiff in getting up the steps and onto the platform, not to start said train for a few minutes until the plaintiff could walk into the coach and be seated, as she was very feeble; . that in spite of said request, defendant’s agents started said train before plaintiff was seated, and started it with a jerk, causing plaintiff to be thrown against the end of a seat in said coach and onto the floor, and caused her to be injured in her shoulder, arm, side, neck, and otherwise. In addition to defendant’s plea of general denial, it specially pleaded settlement, and that in consideration of the sum of $50 plaintiff had executed a release to defendant of all claims and liabilities by reason of said injuries. By supplemental petition, plaintiff alleged, in general terms, that the settlement made and release executed was void for the reason that same was procured and obtained by defendant through its agents and employes by false and fraudulent representations, and -further pleads as follows:

“That Dr. P. O. Funk, who is now and was at the time of said injuries and at the time of said purported settlement a local physician of the defendant company at Bridgeport, Tex., waited upon and treated the plaintiff for the injuries set forth in her original petition herein, and the said Dr. Eunk falsely and fraudulently represented and stated to the plaintiff that her injuries were not serious, and that the same were slight and temporary, and that she was suffering from other ailments than said injuries, and advised and stated to the plaintiff that she had better settle with the defendant for whatever sum she could get, and the defendant’s claim agent, who procured said settlement with the plaintiff, falsely and fraudulently repeated said statements of the said Dr. Eunk, and urged that as a reason why the plaintiff should accept the sum of $25 for the injuries which she had received, and stated that lie. would pay no more than that, and the plaintiff relied upon and believed the said representations of the said Dr. Funk, and at the said time had confidence in the said Dr. Funk, and, so relying and believing' his said' statements as above set forth, she was thereby induced to make said settlement, and that the same is therefore void and invalid.”

The cause was submitted to a jury under a general charge, and resulted in a verdict in favor of plaintiff in the sum of $1,500, upon which was credited the $50 paid under the alleged settlement. From this judgment the defendant has appealed.

Appellant’s brief contains nine assignments of error, the first two directed to' the overruling of the objections made by appellant to certain questions propounded to plaintiff while a witness in the case, which were claimed to be leading and suggestive. Assignments 3, 4, 5, and 6 complain of the refusal to give the requested special charges; the seventh and eighth complain that the verdict and judgment was not supported by the evidence, and the ninth urges that, in any event, the amount of the verdict is grossly excessive and not supported by the evidence.

While plaintiff was testifying as a witness, her counsel asked her the question:

“Did you finally agree and finally sign this document, the voucher, upon the representations made by Mr. Davidson, the claim agent, as to what Dr. Funk had said?”

Again counsel asked her:

“Now, Mrs. Taylor, state to the jury whether or not at the time you accepted this $25, and at the time you signed this agreement or voucher, you relied upon the representations and statements made by the claim agent, and the representations made by Dr. Funk, with reference to the injuries.”

To both of these questions ■ appellant objected on the ground that they were leading and suggestive, and, the witness having answered in the affirmative as to each, appellant excepted. We think there can be no question about the questions being leading and suggestive, and that the court erred in overruling the objections.

The appellee urges that, even if there was error in the ruling of the court, such error is harmless, and does not require reversal, because the witness had theretofore testified at length with reference to the settlement between her and Mr. Davidson acting for appellant, and with reference to the reasons and representations which induced her to accept the settlement offered and to execute the release; that at most the answer of the witness to the two questions objected to constitute but a repetition of what she had already testified, and that no objection was made on that ground. In G., C. & S. F. Ry. Co. v. Huyett, 99 Tex. 630, 92 S. W. 454, 5 L. R. A. (N. S.) 669, the Supreme Court held that evidence that the physician in the employ of plaintiff’s master made misrepresentations to plaintiff, who had been injured through the negligence of defendant, as to his condition, and that on an occasion not shown to have had any connection with the settlement made by plaintiff the physician, when asked by plaintiff as to the propriety of his making a settlement replied that a reasonable settlement would be better than a prolonged lawsuit, did not warrant a finding that the physician was employed to make the representations, or that the master or the agent who made the settlement knew of the representations, as against uncontradicted testimony to the contrary; and that an employé may not have his settlement with his employer for personal injuries set aside for misrepresentations as to his condition of health by a physician in the master’s employ, the physician having no authority in relation to the settlement or to make the representations, the representations not having been made in the transaction in which the settlement was made, and the master or the agent who made the settlement having no knowledge of the representations. There the court said:

“According to this, if the representations relied on had been made by tho agent who effected the settlement, but in a different transaction, it could not affect the rights of the principal under the contract. For a stronger reason is this true of a representation made, not only in a different transaction, but by another agent, having no authority in relation to or connection with the settlement. His statements have only the relation to the contract of settlement that those of a stranger would have, for the reason that in making them he did not represent the defendant with respect to the settlement. Thompson on Corp. § 6324; Bank v. Cruger, 91 Tex. 451, 452, 44 S. W. 278. The mere fact, therefore, that he was the agent of defendant for some purposes does not make his representation available as a reason for avoiding a contract which he did not make.”

In this opinion it is further said:

“It is also true that, if it were shown that defendant or its claim agent used tho physician as an instrument to deceive plaintiff as to his condition, in order that an advantageous settlement might be made, or that tho claim agent and the physician acted together in so procuring the release, the contract would he affected by the physician’s representations as fully as if he had been the only agent employed in the transaction (I. & G. N. Ry. Co. v. Shuford, 36 Tex. Civ. App. 251, 81 S. W. 1180); and it may be that, if the claim agent in effecting the settlement knew and took advantage of the state of plaintiff’s mind, caused by deception practiced by the doctor, the result would be the same.”

The evidence in the instant case shows that Dr. Funk, according to the plaintiff’s testimony, prior to the time of the purported settlement between the railway company and plaintiff, made statements to plaintiff, with reference to her condition, to the effect that her injuries were slight, and that she would soon recover therefrom, and that most of her trouble was from causes other than her fall while a passenger on defendant’s train. These statements which the plaintiff claimed Dr. Funk made to her were in effect even stronger as to the slightness of her injuries than the statement that the plaintiff claimed the claim agent imputed to Dr. Funk. It is not shown in the evidence, and we do not think it is seriously claimed by appellee, that Dr. Funk had anything to do with the settlement or adjustment of claims against the appellant company. He was employed as the local physician or surgeon at Bridgeport, and, it seems, was engaged in the general practice there. He had been called in, at the instance of Mrs. Taylor herself, to treat her, after her arrival at Bridgeport and after she had been taken to the house of her daughter, Mrs. W. W. Shelton. He yisited her some three times, and then, several days having elapsed, Mrs. Taylor sent for him again. He made some eight visits altogether. Mr. Davidson testified that he did not see Dr. Funk between the date of Mrs. Taylor’s injury and the date of settlement. Dr. Funk testified to the same effect. Davidson also testified that it was Dr. Funk’s practice to make a report to the appellant’s claim department of injury eases which he treated, and he (Davidson) had doubtless seen such report with reference to Mrs. Taylor’s case before the settlement was made. The plaintiff’s counsel evidently recognized that it was necessary, in order to sustain a recovery and to set aside the settlement, to show that at the very time of the settlement the representations as to what Dr. Funk had said were made to plaintiff, and that she was induced thereby to make the settlement, and that such representations were false. The fact that the representations had been made by Dr. Funk would not have been sufficient to set aside the settlement, because they were made at a time and under circumstances not connected with the making of the settlement, and were not made by one having authority, apparent or actual, from the appellant to compromise the claim. But if these representations or statements of Dr. Funk that were claimed to have been made to plaintiff while treating her as her physician were used afterwards by the claim agent, knowing that plaintiff had confidence in the judgment and honesty of the physician, in order to induce her to make a settlement, and such statements and representations were false, and were fraudulently used by the agent for the purpose of inducing a settlement, and plaintiff at that time relied on such statements, under the doctrine announced in the Huyett Case, supra, and in the same case in 49 Tex. Civ. App. 395, 108 S. W. 502, where on the second appeal the judgment of the trial court for plaintiff was affirmed, such facts and conditions might justify a setting aside of the settlement on the ground of fraud. We are of the opinion that the record fails to disclose that up to the time of the asking and answering of these leading questions, Mrs. Taylor’s testimony had evidenced a state of facts bringing the case within a rule announced in the two Huyett Oases. We think the objectionable questions were evidently propounded with the view of eliciting the testimony necessary. Hence we are not able to say that reversible error is not shown under these two assignments, and hold that it is.

At the time of the settlement, Mrs. Taylor was staying with her daughter, Mrs. W. W. Shelton, in the town of Bridgeport, to whose home she had been carried upon her arrival from Saginaw. There is no question about Mrs. Taylor’s execution of the release, and there is no claim made in the petition that at the time of the settlement Mrs. Taylor was not of sound mind, or that she was mentally incompetent to contract or execute the release. Only four persons besides Mrs. Taylor were present at the time of the settlement, to wit, Mrs. Mollie Shelton, daughter of plaintiff, and her husband, W. W. Shelton, . their daughter, Miss Audrey Shelton, and the claim agent, W. H. Davidson. All of these denied that any effort was made by Mr. Davidson, or any one else, to induce the plaintiff to accept the settlement offered and to execute the release. The testimony was to the effect that Mr. Davidson told her that he was not authorized to offer more than $50; that she asked him if he would not pay her $75, and further asked him if he would not pay the drug bill incurred, but that he replied that $50 was all he was authorized to pay, that she could accept it or not, as she saw fit; that Mr. Shelton read the release over to her and explained it to her; that Mrs. Taylor signed the same by touching the pen, and Mr. Davidson gave her a cheek; that $25 of the amount was given Mrs. Shelton, to remunerate her for the care and nursing of Mrs. Taylor during the several weeks she was confined at her house, and $25 given Mrs. Taylor, who put the money in her, purse and took it away with her when she left, some four days later. It may be stated that Dr. Funk denied any effort on his part to induce Mrs. Taylor to make a settlement, except that he told her, when she asked him for his opinion, that he thought it was better to settle a case of this kind rather than to have a prolonged lawsuit. He further testified that he told Mrs. Taylor that he considered her injuries slight, and he stated on the trial that he was of the same opinion at that time. While some of us question the sufficiency of the evidence to sustain the judgment canceling and setting aside the release and settlement, yet the writer is of the opinion that, while the evidence supporting the judgment as to this feature is not so cogent as it might be, and consists largely of the testimony of Mrs. Taylor herself, yet that this court is not justified in reversing the judgment and here rendering judgment for appellants on the ground that appellee failed to sustain her allegations of fraudulent settlement by the necessary quantum of proof. While the burden of proof was on appellee to establish the fraud, and while the other witnesses who were present at the time of the settlement contradicted the appellee as to what occurred at the time of settlement with reference to the alleged statements of the claim agent, yet in the opinion of the writer the jury were authorized to believe the plaintiff, and apparently did so.

Bince the judgment must be reversed for errors heretofore mentioned, the court deems it unnecessary to pass upon the sufficiency of the evidence in the respect mentioned.

While there is some question in our minds as to the claimed excessiveness of the verdict and judgment, it will not be necessary, in view of another trial, for us to pass upon the ninth assignment raising that issue.

We are of the opinion that the other assignments should be overruled, on the ground that, so far as they are applicable, the issues and principles of law contained therein were presented in the main charge.

The judgment is reversed and the cause-remanded.

Reversed and remanded.
      <&wkey;>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: LANE, J.

text:
    WESTERN INDEMNITY CO. v. WALKER-SMITH CO.
    (No. 7556.)
    (Court of Civil Appeals of Texas. Galveston.
    March 20, 1918.
    Appellant’s Motion for Rehearing Denied April 4, 1918.
    Appellee’s Motion for Rehearing Denied April 11, 1918.)
    1. Insurance t&wkey;513 — Indemnity Insurance —Actions Against Insurer.
    Where indemnity company refused to defend a suit as specifically agreed in a separate paragraph of the policy, and insured had to employ attorneys and others to defend, insured could recover obligations so incurred, although not yet paid, regardless of a no-action clause in the policy, providing that no action should lie against the insurer except to recover money actually expended, etc., because assured could not have supposed that the insurer would breach its contract at the outset.
    2. Insubance <&wkey;513 — Indemnity Policies —Breach by Insurer — Damages.
    Where insured in indemnity policy had to defend a suit because of failure of the insurer to do so it could not recover railroad fare and hotel bills expended by an investigator, where competent investigators could have been employed at the .place where the investigation took place.
    Appeal from Galveston County Court; Geo. E. Mann, Judge.
    Suit by the Walker-Smith Company against the Western Indemnity Company. Judgment for plaintiff, and defendant appeals.
    Reformed and affirmed.
    Andrews, Streetman, Burns & Logue, of Houston, for appellant. C. G. Dibrell and McDonald & Wayman, all of Galveston, for appellee.
   LANE, J.

This suit was instituted by ap-pellee, Walker-Sinith Company, a corporation, against appellant, also a corporation, which is hereinafter for convenience called the Indemnity Company, to recover the sum of ?453.85 alleged to be due it under the terms of a policy of indemnity or insurance issued and delivered by said Indemnity Company to appellee.

In its petition appellee, among other things, alleges that on the 29th day of December, 1915, it was the owner of one certain automobile truck, and that on said date the Indemnity Company issued and delivered to it a certain policy of insurance, whereby the Indemnity Company insured appellee against loss and liability which might occur to ap-pellee by reason of its ownership, maintenance, or use of said automobile truck, which said policy, among other things, provided as follows:

“1. To indemnify the assured named and described in item No. 1 of the Schedule of Statements forming part hereof, against loss by reason of the liability imposed by law upon the assured for damages on account of bodily injuries, including death resulting therefrom, accidentally suffered or alleged to have been suffered while this policy is in force by any person or persons by reason of the ownership, maintenance or use of any of the automobiles enumerated and described in item No. 5, and while being used for the purpose set forth in item No. 6 of the said Schedule of Statements within the limits of the United States of America or Canada.
“2. To defend in the name and on behalf of the assured any suits, even if groundless, brought against the assured to recover damages on account of such happenings, as are provided for by the terms of the preceding paragraph.
“3. To pay, irrespective of the limits of liability expressed in condition N hereof, all costs taxed the assured in - any legal proceeding defended by the company, all interest accruing after entry of judgment upon such part thereof as shall not be in excess of said liability and the expense incurred by the assured for such immediate medical or surgical relief as is imperative at the time of the accident, together with all the expense incurred by the company growing out of the investigation of such an accident, .the adjustment of any claim or the defense of any suit resulting therefrom.”

It further alleges that while said policy was in full force and effect, to wit, July 2, 1916, and while being driven by one of plaintiff’s employés in the city of Houston, Harris county, Tex., said truck ran into and struck one O. W. Schroeder and one O. E. Henry; that as a result of said accident the said O. W. Schroeder and 0. B. Henry, both and each, suffered personal injuries; that 'on the 14th day of- August, 1916, O. W. Schroeder filed his suit1 in the district court of Harris county, Tex., Eifty-Eifth judicial district, numbered on the docket of said court 70637, alleging various injuries as the result of said accident, and claiming damages against plaintiff .in the sum of $10,000; that on the 15th day of August, 1916, G. E. Henry filed suit against plaintiff in the Eifty-Fifth judicial district court of Texas, Harris county, numbered on the docket of said court 70646, claiming that he suffered, as a result of said accident, permanent personal injuries and claimed damages against plaintiff in the sum of $10,000; that within a few days thereafter citations in said suits were served on plaintiff and its agents, and it forthwith transmitted them to defendant, Western Indemnity Company, who was requested by plaintiff to defend said suits, as it was bound to do under the terms of its policy; that defendant disregarded .its obligation undertaken in said policy, and repeatedly failed and refused to defend said suits; that by reason and on account of said refusal it became necessary for plaintiff to employ attorneys and other agents to fully investigate said accident, prepare its answers in said suits, and defend the same; that it employed the legal firm of McDonald & Way-man, attorneys at Galveston, Tex., to represent it in the defense of said suits, and has promised and become liable to pay to said attorneys reasonable compensation for the services rendered therein, which it alleges is the sum of $400; that in addition to said liability it has had to pay the sum of $14 for taking the oral deposition of one of the plaintiffs in said suits, and has paid and obligated itself to pay to other agents in investigating the facts of said case, taking •the statements of witnesses and investigating the facts surrounding said accident, the sum of $53.S5. ■

Plaintiff further avers that after it had incurred said liabilities, defendant, Western Indemnity Company, on or about September 2, 191-6, agreed to assume liability in said cases and after that date to undertake the defense or settlement of such cases.

Plaintiff further avers that defendant, though often requested, has failed and refused to pay to plaintiff the obligations incurred by it in the defense of said suits, as', it was bound to do, and it therefore prays that upon final hearing hereof it have judgment in the sum of $500, with interest thereon, costs of suit, and general relief.

The Indemnity Company filed its general demurrer to the allegations of appellee’s petition, and avers that the same alleges no cause of action against said company, and for further answer it says:

“For further answer, if required, defendant denies all and singular the allegations in plaintiffs said petition contained, and says that the same are not true in whole or in part, and, demand-, ing strict proof of every material allegation in said petition contained, puts itself upon the country.”

The record shows no disposition of appellant’s demurrer, nor is there any reference thereto in appellant’s brief. We shall therefore assume that it was abandoned, and make no further mention of the same in this opinion.

The cause was tried before the court without a jury, and judgment was rendered for appellee, Walker-'Smith Company, against the Indemnity Company for $318.35. From this judgment the Indemnity Company has appealed.

The trial court filed its findings of'fact, and therein finds that the policy of insurance was issued and was in force and effect on the 2d day of July, 1916, which was the time of the collision that caused the injury to Schroeder and Henry, as alleged by appellee; that thereafter both of said injured parties sued appel-lee in the district court of Harris county as alleged by appellee; that when citations in said suits were served on plaintiff herein, it transmitted same to defendant Indemnity Company, and requested it to defend said suits, as plaintiff claimed it was obliged to do under-said policy; that defendant refused to defend said suits, claiming that the policy did not cover the existing situation, as the truck was not being used for delivery purposes at the time of the collision; that it thereupon became necessary for plaintiff to provide for its own defense in said suits filed by Sehroe-der and Henry, and to that end it employed McDonald & Wayman, a firm of attorneys at law residing in Galveston, Tex., to take charge of and conduct such defense. It also sent one E. B. Henley from Brownwood, Brown county, Tex., to Houston, Harris county, Tex., to investigate said collision, take statements of witnesses, and make report thereon to said attorneys to enable them to defend said suits; that Henley, after completing and reporting his investigation, sent plaintiff a bill for $53.85.. None of the witnesses who testified on the trial knew whether plaintiff had paid said- bill, but plaintiff’s Houston manager testified that, if same had not been, it would be paid by plaintiff. There was no testimony showing whether the ex-, penses detailed in Henley’s bill had actually been incurred, or the money spent therefor, or that such expenditures, if any, were reasonable and proper, except Mr. Wayman’s un-contradicted statement that h'e met I-Ienley in Houston while working on the cases, and knew that Henley was in Houston for at least two' days to investigate the collision, lie stated: That Henley had a room with bath at the best hotel in Houston when he met him there. That the principal or home office of Walker-Smith Company, plaintiff, is at Brownwood, Brown county, Tex., where E. B. I-Ienley resides. That competent investigators, resident in Houston, could have been employed there for at least $10 or $15 a day, if an effort had been made to employ them, and thus hotel bills and railroad and Pullman fares could have been eliminated. This, however, was not done, and Henley was engaged in good faith to do the work. That McDonald & Wayman prepared and filed answers in the suits above mentioned; made some investigation into the facts through Mr. Wayman, who went to Houston for that purpose; investigated questions of law involved or likely to arise in the cases; took the oral deposition of the plaintiff in one of said suits at an actual and reasonable expense of $14.40, which was paid by plaintiff herein; conferred with counsel representing plaintiffs in said suits relative to settlement, and generally conducted the defense of said suits up to September 2, 1916, when defendant herein agreed to defend said suits, both of which it shortly thereafter settled for $300.- That the undisputed evidence shows that a reasonable fee for the services rendered by McDonald & Wayman in the preparation and conduct of the defense of said cases up to September 2, 1916, no definite fee having been fixed between them and plaintiff, is the sum of $125 in each of said cases, or a total of $250. Plaintiff, while obligated to pay said sum of said attorneys, has not yet done so.

By the first assignment it is insisted that the trial court erred in rendering judgment against appellant for any part of the attorney’s fee promised by appellee to McDonald & Wayman, because: First, the contract under which the suit was brought being one for indemnity against loss only, no recovery thereunder can be had until a loss is actually sustained, and that as the undisputed evidence shows that appellee had not actually paid such attorney’s fees, or any part thereof, at the time of the filing of the suit, or at the time of tlie trial of tliis cause, it was error' for the court to render judgment against appellant for any part of such fees; second, “if the contract sued on be not one of indemnity, then the plaintiff’s cause of action must be for breach of a contract to defend, and for such breach the plaintiff can recover only such loss as it actually sustained by reason of such breach, and, not having paid the attorneys’ fees, it has not sustained the damage complained of, and hence the court erred in allowing recovery for such fees.”

The contention of appellant in support of its assignment is based upon the no-action clause of the policy, which is as follows:

“No action shall lie against the company to recover under any of the agreements herein contained, unless brought by the assured personally to recover money actually expended by him in satisfaction of claim or liability by due process of law, resulting from injuries actually caused by reason of the ownership, maintenance and use of said automobiles. * * * ”

It ignores section 2 of the policy herein-before set out, by which said Indemnity Company directly and unqualifiedly contracted and agreed “to defend in the name, and on behalf of the assured any suits, even if groundless, brought against the assured to recover damages on account of such happenings as are provided for by the terms of the preceding paragraph,” the preceding paragraph being section 1 by which the Indemnity Company agreed to indemnify appellee against loss by reason of liability on account of bodily injuries, including death resulting therefrom, accidentally suffered, or alleged to have been suffered, while such policy was in force by any person by reason of the ownership and use of appellee’s automobile truck. That the suits of Schroeder and Henry against Walker-Smith Company were such suits as appellant, by its contract or policy, had agreed to defend. That it refused to defend said suits after being notified or requested to do so by appellee, and that by reason of such refusal it became necessary for appellee for its own protection to employ attorneys to file answers in said suits and make such investigations and preparation as was necessary and proper for the trial, is unquestioned. It is also unquestioned that appellee did employ McDonald & Wayman to defend said suits and that it did obligate itself to pay said attorneys a reasonable fee for these services.

As already shown, appellant had, by the second clause of the contract or policy, unqualifiedly obligated and bound itself to defend the suits brought by Schroeder and Henry against appellee, and that appellant had failed and refused to defend said suits, as it had obligated itself to do. This being true, it was incumbent upon appellee, Walker-Smith Company, to incur the attorney’s fees for which it sued and recovered in this cause. Since appellee’s suit against appellant was not one to recover money actually expended by it in satisfaction of a claim which resulted fron^ injuries caused by reason of the ownership and use of said automobile truck, but was a suit only to recover from appellant the amount of attorney’s fees which it had necessarily incurred, because appellant had breached its contract, and for which appellee was liable, appellee was clearly entitled to recover, and it was not necessary that the fees sued for should be actually paid to enable it to recover; but when it established that it was obligated to pay said fees, and that the same was reasonable, the liability of appellant to repay the expenses necessarily incurred by appellee, because of the breach of the contract by appellant had arisen, and appellee’s eause of action had accrued. Lowe v. Fidelity & Casualty Co., 170 N. C. 445, 87 S. E. 250; South Knoxville Brick Co. v. Surety Co., 126 Tenn. 402, 150 S. W. 92, Ann. Cas. 1913E, 107; Royal Indemnity Co. v. Schwartz, 172 S. W. 581.

The so-called no-action clause of the policy relied upon by appellant as a defense to appellee’s cause of action has no application to the issues involved in this cause. The contention of appellant reduced to its final analysis is that it was the intention of the contracting parties, at the time of making the contract, to contract that in the event appellant should breach its obligation to defend the suits, such as those filed by Schroeder and Henry, and in the event appellee was compelled to employ attorneys to make such defense, it should compel the attorneys so employed to sue it, to recover judgment for their fees in a court of last resort, and that after said judgment had become final and ap-pellee had paid said judgment, and only then, and not until then, -would appellant be liable for attorney’s fees incurred by appellee by reason of appellant’s refusal and failure to defend said suits. In other words, appellee must prosecute, or cause to be prosecuted, a suit ’ against itself to final judgment in a court of last resort, and then pay such judgment before it could sue appellant for damages it had suffered by reason of appellant’s breach of its agreement to defend against the suits of Schroeder and Henry. Such contention is wholly untenable, and cannot be sustained. In the ease of South Knoxville Brick Co. v. Surety Co., above cited, where practically the same issues as involved in the present case were being discussed, the Supreme Court of Tennessee said:

“Assured could not have supposed that the company would breach its contract in the outset, and occasion loss by refusing to assume responsibility for a suit based upon a claim covered by the policy. The company could not have intended, as a consequence of its own default, to make this default the occasion for the imposition of a new condition upon assured. The parties were not contracting with reference to an initial breach by either, and this condition evidently refers to losses under suits defended, as provided in the policy, by the company, and not to losses under suits for which the company repudiated its liability. This is the construction placed upon an identical condition in a similar policy by the Supreme Court of the United States, and its reasoning is so apt and conclusive we adopt it here as a satisfactory disposition of the contention here made.”

In a similar case, Royal Indemnity Co. v. Schwartz, 172 S. W. 581, the court said:

“The company having refused to defend, as it had obligated itself to do, it was incumbent upon Schwartz to conduct his own defense. Since the question of Schwartz’s liability for the death of the child is not now in question, because he is not suing for the amount paid as damages, but only for attorney’s fees for which he is liable, he is clearly entitled to recover, and it was not necessary that the fee be paid to enable him to recover, but when he establishd that he was obligated to pay, and that the fee is reasonable, the liability contemplated by the policy had arisen, and his cause of action accrued.”

The first assignment is overruled.

By the second assignment' appellant insists that the trial court erred in rendering judgment against appellant for the expense account of E. B. Henley of $53.35 for making an investigation of the facts relative to the alleged injuries of Schroeder and Henry, for the reason that there was no proof that the sums shown on said bill, or any oí them, were expended by Henley, or that the same, if expended, were reasonable and proper charges, or that Walker-Smith Company had paid or intended to pay said bill. No statement of facts accompanies the record. We must therefore look to the fact findings of the court to enable us to pass on the complaints presented by the assignments. The trial court found the following facts: That Walker-Smith Company sent one E. B. Henley from Brownwood, Brown county, Tex., to Houston, Tex., to investigate the accident which resulted in the injuries of Schroeder and Henry; to take statements of witnesses and make report thereon to its attorneys, McDonald & Wayman, to enable them to present its defense to the suits of the alleged injured parties; that, after completing and reporting his investigation, Henley sent Walker-Smith Company an itemized bill for $53.85, as follows:

Railroad fare Browmvood to Houston and return .. $17.50
Sleeper ’. 5.00
Transfer . 1.00
Hotel . 15.00
Auto hire, stenographers, and other expenses looking up witnesses and depositions . 16.35
$53.85

The court further found that Walker-Smith Company obligated and bound itself to pay said bill. The court further found that the uncontradicted evidence showed that Henley was in Houston for at least two days to make said investigation, and that while there he had a room, with' bath, at the best hotel in Houston. The court further found as follows:

“Competent investigators, resident in Houston, could have been employed there for at least $10 or $15 a day, if an effort had been made to employ them, and thus hotel bills and railroad and Pullman fares could have been eliminated. This, however was not done, and Henley was engaged in good faith to do the work.”

Prom these findings we conclude that there was evidence sufficient to show that Henley, after being employed to make such investigation, did so and was engag'ed in doing so for at least two days, and that a reasonable charge for such service was $30, even had he not incurred the railroad fare of $17.50, the Pullman fare of $5, and the additional expense of $1.35, which the court finds was not shown by the evidence to have been necessarily and reasonably incurred in making said investigation.

Having reached this conclusion, we further conclude that, as the judgment rendered against appellant included the sum of $23.35, which was not showp to have been necessarily and reasonably incurred in making said investigation, we reform said judgment of $318.25 rendered by the court in favor of appellee against appellant by deducting therefrom said sum of $23.35, leaving a balance of $294.90 and as thus reformed, said judgment is affirmed.

Reformed and affirmed.
      <Sx=>For other oases see same tonic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: PHEASANTS, C. J.

text:
    PYE v. ROBINSON.
    (No. 7461.)
    (Court of Civil Appeals of Texas. Galveston.
    March 3, 1918.)
    Judgment- <&wkey;143(9) — Setting Aside Default— Gkotjnds fob.
    Where a defendant had filed an answer on a former trial, and Ms codefendant promised to have his attorney represent him op the trial in question, but failed to do so, and default was entered, and there was only one issue which the jury decided in favor of such codefendant, the court erred in not setting aside a default judgment.
    Appeal from District Court, Ft. Bend County; Samuel J. Styles, Judge.
    Action by T. B. Robinson against A. Pye and others. Judgment for plaintiff as against the named defendant, and he appeals.
    Reversed and rendered.
    Sam, Bradley & Fogle, of Houston, for appellant. D. R. Peareson, of Richmond, for appellee.
   PHEASANTS, C. J.

This appeal is from a judgment of the district court of Ft. Bend county establishing and foreclosing a lien in favor of appellee upon two mules owned by appellant. The suit was brought by appellee against A. Arsenaux, J. S. Bowser, and appellant to recover upon a note for $1,200 executed in favor of appellee by said Arsenaux and alleged to have been secured by a mortgage upon twelve mules described in the petition. J. S. Bowser was made a party defendant upon allegations charging that he had taken and sold three of said mules and converted the proceeds to his own use, and judgment was sought against him for the sum of $675, the alleged value of the three mules. 'The petition further alleged that appellant was in possession of two of the twelve mules covered by the mortgage, and judgment was asked against him foreclosing the alleged mortgage lien upon the two mules.

Appellant filed his original answer on March 28, 1916. In addition to a general demurrer and general denial this answer avers in substance:

“That said purported mortgage on its face provides that said Robinson promised and agreed to extend and have' extended the time of payment of said note described in said mortgage, and contained the addition that unless such extension be procured, and granted, and the time of payment of said note, which was then in the hands of another party as collateral, extended, said mortgage shall become and be null and void and without effect, and that such extension must be procured within 60 days from the date of said mortgage; that such extension was not so procured within such time,_ nor at any other time, and because of such failure to so procure such extension, and failure of consideration of such mortgage, the said mortgage is null and void, and that plaintiff has no lien of any kind or character upon any of the property therein described.”

And by cross-action against plaintiff, T. B. Robinson, defendant A. Pye alleged that on the 19th day of February, 1916, he was the owner of and in possession of two mules, and that plaintiff wrongfully took both of said mules ifrom the possession of defendant, and deprived defendant of the use thereof, to his damage in the sum of $150; that defendant was the owner of both of said mules, and that plaintiff, T. B. Robinson, • has no right, title, or interest in them, or either of them, and wrongfully asserted an interest‘in said mules, or claim thereof, and prayed for judgment for his said damage and for title and possession of said two mules.

The defendant J. S. Bowser filed answer April 22, 1916, in which he pleaded general demurrer and general denial to plaintiff’s petition, and denied that he had ever converted to his use any of the mules described in plaintiff’s petition, and also pleaded that the consideration for such mortgage was to have been the extension of time of payment of said note, and that said Robinson had failed to procure such extension, and because of such failure that said mortgage became null and void, and was not a lien upon any of the property therein described.

Defendant A. Arsenaux, of Yazoo county, Miss., failed to file answer to said cause, and plaintiff demanded and obtained' judgment by default against said defendant.-

The cause was tried on the 2d day of May, 1916. Charge No. 1 requested by defendant A. Pye was refused, and judgment was rendered on special issues that were submitted to the jury on May 2, 1916, in favor of plaintiff, T. B. Robinson, against defendant A. Arsenaux in the sum of $1,585.09, with interest, in favor of T. B. Robinson, plaintiff, against defendant J. S. Bowser for the sum of $150, and in favor of plaintiff, Robinson, against defendant A. Pye and all other parties defendant, establishing and. foreclosing a mortgage lien on all of the mules described in said mortgage. B.y order granted May 6, 1916, plaintiff’s motion for a new trial was granted and said judgment set aside.

On October 17, 1916, plaintiff filed his second amended original petition and second supplemental petition, and on same day defendant A. Arsenaux filed his original answer, whereby he alleged that he did in fact execute said mortgage, but that the real consideration therefor was the extension of said note to be obtained within a period of 60 days, and to be extended for a period of 12 months; that su'ch extension was to be obtained within 60 days from the date of the execution of the mortgage; that at the end of 60 days plaintiff had wholly failed and refused to execute said extension, and notified said defendant Arsenaux that he would not extend the payment of said note; and that because of such failure to extend the time of payment of said note within such time said mortgage was null and void, and was not a lien upon the property therein described.

On October 17, 1916, by order duly entered, an interlocutory judgment by default was granted and entered against defendant A. Pye. On October 18, 1916, said cause was tried, and submitted to the jury on special issdes. Question No. 1 was:

“Were the terms of the mortgage executed by A. Arsenaux to T. B. Robinson, and sought to be in this case foreclosed, complied with by Robinson in this: Did Robinson within 60 days after the execution of the mortgage extend and procure an extension of the time of payment of the debt frojn the time of the execution of the mortgage until October 15, 1915?”

To which question the jury answered: “No.”

On October 30, 1916, defendant A. Pye filed a motion to vacate interlocutory judgment by default theretofore entered against him in said cause, and on November 3, 1916, he filed his first amended motion to vacate said default judgment. By order entered November 8, 1916, the motion of defendant A. Pye to have said interlocutory judgment vacated was refused, and on the same day judgment was rendered and entered in favor of plaintiff Robinson, against defendant Arsenaux on said note for the sum of $1,653.43, and on said verdict of the jury that plaintiff take nothing against defendant J. S. Bowser and he go hence without day and against A. Pye, making final interlocutory judgment, and establishing and foreclosing the mortgage lien on the two mules purchased by Pye from Arsenaux and taken from the possession of Pye by plaintiff.

The record shows that appellant was not represented by an attorney upon the trial when the interlocutory judgment by default was rendered against him, and his answer was not then called to the attention of the court. On the former trial he was represented by an attorney, his answer was duly presented, and his attorney requested special charges be given the jury. Appellant’s attorney was not present on the second trial because the defendant Arsenaux bad informed him that lie would have his (Arsenaux’s) attorney represent appellant. Neither appellant nor his attorney knew that appellant was not represented on the second trial until a few days before the motion to set aside the judgment by default was filed. The record does not disclose why Arsenaux failed to keep his agreement to have appellant represented on the trial. The motion to set aside the interlocutory judgment by default was filed and presented before any final judgment was rendered in the case. This motion did not ask that defendant be given a hearing on his cross-action for damages, and that portion of defendant’s answer was abandoned.

We think upon the showing made by appellant the trial court should have set aside the interlocutory judgment by default. While the answer of appellant was not called to the attention of the court on the second trial before the judgment by default was rendered, it had been filed and presented upon the former' trial, and was on file when the default judgment was rendered. It may be assumed, though^ the court does not so state, that the fact that the answer had been presented on the former trial was not in the mind of the court when the judgment by default was rendered, and if the failure of appellant to have his answer presented could have had any possible effect upon the jury in reaching their conclusion upon the fact issue submitted upon the answers of the defendants Bowser and Arsenaux, which was the identical issue presented by appellant’s answer, or the granting of the motion had required another trial of the issue between appellee and appellant, the court could have properly refused to set aside the default judgment. But we are of opinion that the motion to set aside the default judgment having been filed before the final judgment was rendered, and the only fact issue in the case having been presented to the jury and decided in appellant’s favor, he was entitled to the benefit of the finding of the jury, notwithstanding his answer was not rqad or called to the attention of the court. It was on file, had been presented to the court on a former trial, made the same defense, and raised the identical issue of fact .presented by the answer of the defendants Bowser and Arsenaux. The mortgage which appellee sought to foreclose contains the following recitals:

“Know all men by these presents: That I, A. Arsenaux, a resident citizen of Ft. Bend county, Tex., in consideration of the sum of $1 and other consideration to me in hand paid by Em. R. Robinson and the promise and agreement on the part of said Robinson to extend and have extended the time'of payment of the note hereinafter described to October 15, 1915, with the condition that unless such extension is r procured and granted in the time of payment of said nóte, which is now in the hands of another' party as collateral, that this mortgage shall not be effective, and if said extension is not procured and granted by the said Robinson and by the party who has the right to collect said note then, this mortgage shall become and be invalid and without effect, and said extension rhust be procured within 60 days from this date.”

The jury having found that the extension was not secured as required by the mortgage, it became of no force or effect. In these circumstances it would manifestly be unjust to permit appellee to take appellant’s mules by subjecting them to a mortgage which by its very terms upon the fact findings of the jury has become void and unenforceable. It cannot be said that appellant was without any excuse for his failure to have his answer presented by the court on the tidal at which the default judgment was rendered. As before stated, we think under all the circumstances of this case the motion to set aside should have been granted, and appellant, having abandoned his counterclaim judgment should have been rendered in his favor on the finding of the jury. It follows from these conclusions that the judgment of the trial court should be reversed and judgment here rendered that ap-pellee take nothing by his suit against appellant; and it has been so ordered.

Reversed and rendered.
      <5=»For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: PLEASANTS, C. J.

text:
    SAM v. LUDTKE.
    (No. 7574.)
    (Court of Civil Appeals of Texas. Galveston.
    April 25, 1918.)
    1. Limitation op Actions <&wkey;>66(12) — Accrual op Right — Demand.
    Where one deposits a sum of money with an individual for safe-keeping with the understanding that it is to be returned at any time, and that the individual is to pay interest, no demand' is necessary to start the running of the statute of limitations.
    2. Limitation op Actions &wkey;>102(2) — Trust Relation — Evidence.
    A deposit of money with an individual for safe-keeping, with the understanding that he is to pay interest and return deposit on demand, does not create such trust relation as will prevent the running of the statute of limitations.
    3. Limitation op Actions <&wkey;66(9) — Accrual op Righi> — Bank Deposits.
    The rule that limitation runs against a demand obligation from its date does not apply to bank deposits.
    Appeal from Harris County Court; 'W. E. Monteith, Judge.
    Action for debt by Peter Ludtke against Mrs. Idah Sam, executrix of the estate of' Joe M. Sam, deceased. Judgment -or plaintiff, and defendant appeals.
    Reversed and rendered.
    Sam, Bradley & Fogle, of Houston, for-appellant. Atkinson, Graham & Atkinson,, of Houston, for appellee.
   PLEASANTS, C. J.

The following sufficient statement of the nature and result of this suit is copied from the brief of plaintiff in error:

This was an action for debt brought by defendant in error December 9, 1916, against Mrs. Idah Sam, executrix of the estate • of Joe M. Sam, deceased, the suit being based upon the following instrument: “November 6, 1899. Received of Peter Ludtke $300.00 for safe-keeping. Joe M. Sam.” Plaintiff alleged that he “left said $300 with Joe M. Sam for safe-keeping, with the understanding that he was to have it any time he asked for it, and with the understanding that Joe M. Sam was to pay. six per cent, for the use thereof; that plaintiff did not need said money before the death of said Joe M. Sam, and therefore made no demand therefor; that the estate of said Joe M. Sam, deceased, is now indebted to said Peter Ludtke in the sum of $300, together with six per cent.. interest from date.” The prayer was for a judgment for said debt, with interest and costs and general relief. An answer was filed by Mrs. Idah Sám as independent executrix of the estate of Joe M. Sam, deceased, consisting of a general demurrer, a general denial, a plea of payment, of estoppel upon the ground of gross laches and the statute of limitation of four years. Upon hearing before the court without a jury, judgment was rendered on February 3, 1917, in favor of plaintiff, Peter Ludtke, against “Mrs. Idah Sam” for the sum of $300, with interest from the date of the judgment at the rate of 6 per cent, and all costs of court.

The allegations of plaintiff’s petition and the undisputed evidence show that plaintiff’s cause of action was barred by the statute of limitation of four years, and, defendant having properly pleaded the statute in bar of plaintiff’s right to recover, judgment should have been in her favor. As before shown, the petition alleges that when the .$300 was turned over to Sam by plaintiff and the instrument sued on executed, Sam agreed to pay plaintiff interest on the money at the rate of 6 per cent, per annum. Plaintiff testified that this was the agreement, and there was no testimony to the contrary. Joe M. Sam died on February 14, 1915, and plaintiff in error is the independent executrix of his will. The trial judge found the facts in accordance with the undisputed evidence, but held that because no demand was made by Ludtke for the payment of the money, the statute of limitation did not begin to run prior to the death of Sam. It is well séttled by the authorities that an obligation or 'promise to pay money ,on demand is payable immediately, and no demand is necessary to start the running of the statute of limitation. In the case of Cook v. Cook, 19 Tex. 436, which was a suit aganst an administrator to recover money loaned by the plaintiff to the decedent to be paid back on demand, the administrator of the decedent testified that he had heard the decedent say that he owed the money, and that the agreement was that it should be paid to the plaintiff whenever he should demand it; that he, the administrator, rejected the account because he believed it was barred by limitation. The trial court ruled that the statute did not commence to run until demand made for the money loaned. There was- a verdict and judgment for the plaintiff against the administrator. The Supreme Court, speaking through Justice Hemp-hill, said:

“The only question is, whether there was error in the proposition that the statute did not commence to run against the claim, until there was demand for the restoration of the money, and it appears very clear, upon the authorities, that this was erroneous; that an account or note payable on demand is payable immediately; that there need be no special demand, and that the statute of limitations commences to run from the date of the note or account (citing cases). A receipt for a sum of money for which the person receiving it undertook to return it with interest ‘when called on’ so to do created a cause of action from its date, and against it the statute runs from that time” (citing Berry v. Griffith, 1 Har. & G. 440).

Quoting further: ■

“The agreement in this case, as it appears from the evidence; was that the money should be paid the plaintiff when he demanded it. In other words, it was a loan of money payable on request, and the debt which constitutes the cause of action arose instantly on the loan;' consequently the statute commenced to run immediately, and the demand, as alleged, and even, as proven, was clearly excluded by the bar of the statute.”

In the case of Henry v. Roe, 83 Tex. 446, 18 S. W. 806, the suit was upon a demand note, and in holding that limitation began to run from the date of the note the court said:

“No demand was necessary before the institution of suit, nor was it necessary to allege demand. The note, being payable on demand; was actionable at once, and the statute of limitations began to run from its date; in other words, the note was due and payable immediately, without demand, and without averment of the fact” (citing a number of cases).

In Swift v. Trotti, 52 Tex. 498, which was a suit on account, for money maned, payable on demand me court held that no time elapsed before the running of the statute of limitation except such time as the statute was suspended by law.

Other cases in point are Eborn v. Zimpelman, 47 Tex. 563, 26 Am. Rep. 315; Pollard v. Allen, 171 S. W. 538.

It is stated in Cyc. vol. 7, pip. 847, 848, that v^hile some courts hold that a demand is necessary to start the running of the statute of limitation against a demand obligation, or at least that the payee must have a reasonable time to make demand before the statute becomes operative, most of the courts have held that paper payable on demand is due immediately, and the statute of limitation 'begins to run from the date of the paper.

We think it clear that upon che allegations of the petition and the undisputed evidence no such trust relation was shown as would prevent the running of the statute of limitation. Tinnen v. Mebane, 10 Tex. 246, 60 Am. Dec. 205; Pollard v. Allen, 171 S. W. 530; Richardson v. Whitaker (Ky.) 45 S. W. 774.

For obvious reasons, the general rule that limitation runs against a demand obligation from its date does not apply to bank deposits.

In 3 Ruling Case Raw, 375, the author notes the “distinction between doing a banking business and performance of isolated acts of which the business consists.” The distinction is more fully set out on page 569:

“The statement frequently made that the relation between depositor and banker is merely that of debtor and creditor does not mean that a bank, like a common debtor, must look up its creditor and pay him whenever and wherever found. To the contrary, it pays only over its own counter. The deposit not being due till demand is made, it is the demand and refusal to pay that sets the statute running.”

There is the same distinction between banks and individuals as to certificates of deposit. 3 Ruling Case Law, 582.

The facts in this case being undisputed, and the law applicable thereto requiring a judgment in favor of plaintiff in error, the judgment of the court below is reversed, and judgment here rendered in favor of plaintiff in error.

Reversed and rendered.

       @s=>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes