author: CARL, J.

text:
    MANLEY v. NOBLITT et al.
    (No. 5523.)

    (Court of Civil Appeals of Texas. San Antonio.
    Nov. 17, 1915.
    Rehearing Denied Dec. 22, 1915.)
    1. Deeds @=>94 — Merger oe Previous Agreements.
    Where the seller of land executed a deed to the buyer, not naming such buyer’s partner, and the buyer alone executed notes covering the purchase price, his partner was not liable on such notes, since the rule that all prior verbal stipulations are merged in the final and formal contract executed by the parties applies to a deed based upon a contract to convey, which must alone be looked to to determine the rights of the parties.
    [Ed. Note. — Por other cases, see Deeds, Cent. Dig. § 266; Dec. Dig. @=>94,]
    2. Evidence @=>418 — Parol Evidence Affecting Writings — “Deed.”
    A deed is a contract under seal, and parol evidence to prove that the grantee’s partner, not named therein, was interested, was inadmissible to show such partner’s liability on notes given for the price by the grantee, and thus to vary the deed.
    [Ed. Note. — Por other cases, see Evidence, Cent. Dig. §§ 1722, 1906-1911; Dec. Dig. ®=> 418.
    Por other definitions, see Words and Phrases, First and Second Series, Deed.]
    3. Evidence @=>418 — Parol Evidence — Parties — Deeds—Purchase by Partnership— Liability of Member.
    Where a partner purchased land, taking a deed naming himself alone as grantee and executing notes for the price signed by himself alone, under circumstances entitling his partner to assert a resulting trust in the land, such beneficiary partner was not liable to the holder of the notes, since the deed of conveyance, a sealed instrument, could not be varied by parol to show that the conveyance was to another as well as the named grantee.
    [Ed. Note. — Por other cases, see Evidence, Cent. Dig. §§ 1722, 1906-1911; Dec. Dig. @=> 418.]
    Appeal from District Court, Webb County; J. P. Mullally, Judge.
    Action by C. E. Manley against W. T. Nob-litt and D. A. Cook. Judgment for defendant Cook, and plaintiff appeals.
    Affirmed.
    C. C. Thomas, of Cotulla, and T. C. Mann, of Laredo, for appellant. J. Q. Makaffey, of Texarkana, for appellees.

      Writ ol error pending in Supreme Court.

   CARL, J.

Appellant, C. E. Manley, sued W. T. Noblitt and D. A. Cook on two notes, each for $5,125, which were given by Noblitt to John M. McDaniel on July 1,1913, in part payment for 5,225 acres of land out of the Manuel Garcia grant in Webb county, the vendor’s lien having been reserved in the deed and acknowledged in the notes to secure their payment. Appellant acquired the two notes in controversy by the following transfer, written on the back of each:

“Por value received I hereby sell, transfer and assign to.the within note together with the vendor’s lien on the property securing same, and as indorser I guarantee the payment of the within note at maturity, or on demand after maturity at any time, waiving demand, protest or notice of nonpayment thereof.
“[Signed] J. M. McDaniel.”

These were notes Nos. 3 and 4 in a series of four notes given; but it was alleged that notes Nos. 1 and 2 were superior to these two.

In the third amended original petition, upon which the case went to trial, it was alleged that Cook and Noblitt were partners, and that when the land was purchased it was for the partnership composed of Noblitt and Cook, although the deed was made to Nob-litt and the notes were executed by him alone; that the deed was intended to convey the property to Cook and Noblitt, and the notes were intended to be partnership notes, it being so understood at the time by the grantor, McDaniel, and by Cook and Noblitt ; that the partnership agreement between Cook and Noblitt was entered into about June 23, 1913, and that it was in carrying out this partnership agreement that Noblitt took the deed in his name and executed the notes. The petition further alleges that the facts alleged with reference to the partnership interest in the land and in the liability for the notes were communicated to Manley before he purchased the notes sued upon, and he believed such representations and relied upon the same in so purchasing the two notes.

Appellee Cook denied all the material allegations whereby it was sought to charge or hold him as liable for the payment of the notes, and especially denied that he and Nob-litt were partners in the purchase of the land. Noblitt made no defense, but at the conclusion of appellant’s testimony, the court, upon motion of Cook, peremptorily instructed the jury that no partnership was shown, and to return a verdict in favor of Cook, which was done. The plaintiff below has appealed; and the proceeding in the trial court makes it necessary to bring in review tbe character of case made by appellant.

That Cook was interested in tbe purchase of tbe land, tbe evidence leaves small room for doubt; but there is no evidence to show a partnership between Cook and Noblitt. Tbe most that is shown is that in buying the property Noblitt bought it for Cook either in whole or in part. There is no issue of undisclosed principal in this case; for, even taking the strongest position in favor of the vendor of the land, he knew that Cook was one of two things, i. e., the partner of Noblitt or his principal. All antecedent transactions, verbal negotiations, and executory contracts became merged in the final written contract evidenced by the deed and notes. Luckenbach et al. v. Thomas et al., 166 S. W. 99; Devlin on Deeds, p. 1570, § 850a;

“The rule applicable to all contracts, that prior stipulations are merged in the final and formal contract executed by the parties, applies, of course, to a deed based upon a contract to convey. When a deed is delivered and accepted as performance of a contract to convey, the contract is merged in the deed. Though the terms of the deed may vary from those contained in the contract, still the deed must be looked to alone to determine the rights of the parties.”

This suit is to enforce that final written contract, and it is thereby sought to hind a party not mentioned therein. It is a contract under seal, and parol testimony would not be admissible to vary the terms of the same. That contract, as plainly expressed, was that Daniel sold the land to Noblitt, and Noblitt, and no one else, executed the notes. As we construe the pleadings, the only theory upon which Cook is sought to be held is that he and Nobllitt were partners, but the evidence wholly fails to show such a partnership. There is nothing whatsoever to show that the name of Noblitt was signed to the notes as a firm name, or that the name of Noblitt, the grantee in the deed, was used in the same sense. And since the evidence did not raise the issue of a partnership, the court did not err in directing a verdict for appellee Cook, even were it admitted that parol evidence could be introduced for that purpose.

If it be conceded that the pleadings raise the issue that Cook is liable because the purchase was made, in whole or in part, for his benefit, under circumstances entitling him to assert a resulting trust in the land, we do not believe that the law would permit a recovery against him upon such a showing.

In the case of Heffron v. Pollard, 73 Tex. 99, 11 S. W. 166, 15 Am. St. Rep. 764, Heffron had made a contract with Hendricks and others for his own benefit, but signed it in the name of “John W. Pry, per Heffron.” Judge Gaines, speaking for the court, said:

“As to the legal effect of this contract upon its face there can be no doubt. It discloses the names and relation of ail the parties connected with it. It binds Pry, the principal, and does not bind Heffron, the agent. If it had said in express terms that Pry was bound by the contract and Heffron not, the meaning in the light of the law would not have been more unmistakable. Can Heffron be held liable upon this written agreement? Is it permissible in order to bind him to show by parol testimony an intention exactly contrary to that expressed on the face of the writing, namely, that Heffron was bound by it and that Pry was not bound? In our opinion this cannot be done without violating' a cardinal rule of evidence. It is very different from the case of an undisclosed principal. The law makes him responsible for the act of his agent. The act of the agent made for his benefit and within the scope of the authority conferred by him is his act. In such a case parol evidence may be resorted to to show that by reason of a fact existing at the time the contract is made, not known toi one of the parties, there is a third party for whose benefit it is made who is bound by it. The relation of principal and agent being unknown to one of the contracting parties he could not make an election at that time, and it is not to be presumed that he intended to look alone to the agent should it subsequently appear that the contract was made for the benefit of another who has given authority for its execution.. The undisclosed principal may sue on a contract made for him in the name of his agent, and for a similar reason he is held liable to be sued. But we apprehend that if a contract in writing should expressly declare that if it should subsequently be disclosed that a party signing had a principal such principal should not be bound, no evidence would be admitted to show a liability contrary to such express terms. But there is another point of view from which this case must be considered. The effort in the court below was to show that the defendant assumed the name of Fry in order to make the contract for his own benefit. We understand the law to be that when a party for the purpose of transacting business adopts an assumed name, whether it be fictitious or the name of another, he is bound by a contract made in that name. * * * In the present case also the name is not a fictitious one. It is the name of a real person. But the contract purports to bind him alone, and upon its face is inconsistent with the idea that the defendant in signing it may have intended to use it for his own business name. His signature as agent clearly negatives the conclusion that any such construction was intended to be put upon it. The intention of the parties to a written contract must be derived from the writing itself when its meaning is clear. Can it be said that the admission of parol evidence to show that the contract before us was made for the benefit of defendant and was intended to hind him does not violate this rule? We think not. The contract clearly shows the relation of all the parties to it, who was to be bound and who was not to be bound, and its legal effect cannot be varied by such evidence.”

Then in Sanger v. Warren, 91 Tex. 478, 44 S. W. 477, 66 Am. St. Rep. 913, it was held, in an opinion by Judge Denman, that Sanger and others, who had bought land in the name of one Luther Rees, who assumed the purchase-money notes against the land, could not be held liable on Rees’ contract of assumption, although Sanger and others furnished the money to buy the land, took and held an acknowledgment of his trusteeship from Rees, and received the proceeds when Rees sold the land. The deed of conveyance was a sealed instrument, and the terms thereof plainly expressed in it could not be varied by parol evidence. See, also, Burnett v. Atterberry, 105 Tex. 119, 145 S. W. 585.

It could not make any difference what preliminary negotiations Daniel had with Gook, because all those matters were merged into the final contract as expressed by the deed and notes, and'when that was consummated Daniel made it in the name of Noblitt and agreed that in so far as liability on the notes was concerned, he would look to Noblitt and not to Cook. He had the opportunity then to say whether he would look to Noblitt alone or insist on Cook’s name going into the deed and on the notes. Cook demurred, and Daniel acquiesced in his refusal to become liable. The matter was closed by a sealed instrument, and now it appears from the above authorities that Daniel’s and his assignee’s (Manley’s) lips are sealed against varying the terms of that instrument by going behind it to show Cook’s responsibility on the notes.

The judgment of the trial court is affirmed.
      other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: CONNER, C. J.

license: Public Domain

text:
    COMMONWEALTH BONDING & CASUALTY INS. CO. v. HARPER et al.
    (No. 8267.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Nov. 13, 1915.)
    1. Witnesses <&wkey;255 — Examination—Use oe Documents.
    In an action to recover from a commission merchant and his surety the proceeds of a carload of cattle, the surety cannot complain that the commission merchant, who was examined as a witness, was allowed to refresh his memory as to the number* of cattle shipped and sold and the net sum due the shipper, hy examination of an account of sales prepared by his bookkeeper, where the witness testified that, having examined the account, he was able to testify from his recollection.
    [Ed. Note. — For other cases, see Witnesses, Cent. Dig. §§ 874-890; Dec. Dig. &wkey;255.]
    2. Pbincipal and Subety &wkey;>160 — -Evidence —Admissibility.
    In an action against a commission merchant and his surety for the proceeds of a shipment of cattle, the account of sales and the check mailed to the shipper, which are admissible as original evidence against the merchant, can be received to establish as prima facie proof against the surety.
    [Ed. Note. — For other cases, see Principal and Surety, Cent. Dig. §§ 486-^438; Dec. Dig. <®=»160j
    3. Stipulations <&wkey;18 — EmrECT on Stipulations.
    Where it was agreed between the parties that appellant’s hdnd should be considered as proved, recovery cannot be defeated because the statement of facts showed plaintiff merely “offered” the bond in evidence.
    [Ed. Note. — For other cases, see Stipulations, Cent. Dig. §§ 41-54; Dec. Dig. <&wkey;18J
    4. Tbial- <&wkey;141 — Dieected Yebdict — Right to.
    Where the evidence was uncontradicted and defendant’s liability was clearly established, it was proper to direct a verdict for plaintiff.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. § 336; Dec. Dig. <&wkey;141.]
    Buck, X, dissenting.
    Appeal from District Court, Tarrant County ;. R. B. Young, Judge.
    Action by Dave Harper against F. P. Carson, trading as the Comet Commission Company, and the Commonwealth Bonding & Casualty Insurance Company. There was a judgment for plaintiff, and the last-named defendant appeals.
    Affirmed.
    F. H. Haddix, of Los Angeles, Cal., and F. M.. Brantly, of Ft. Worth, for appellant. M. B. Simpson, of Ft. Worth, for appellee.
   CONNER, C. J.

This suit was instituted by Dave Harper against F. P. Carson, trading under the name of the Comet Commission Company, and the Commonwealth Bonding & Casualty Insurance Company, for the sum of $1,277.52, the alleged proceeds of a carload of cattle, charged to have been shipped by said Harper to said Commission Company at Ft. Worth, on or about 'March 10, 1914. It was alleged that the cattle had been sold by said commission company for the net sum of $1,277.52, and that no remittance or payment had ever been made to the plaintiff. The plaintiff further alleged that, prior to the sale mentioned, the Comet Commission Company, as principal, and the Commonwealth Bonding & Casualty Insurance Company, as surety, entered into an obligation in the sum of $10,-000, conditioned that the Comet Commission Company would—

“faithfully and truly perform all agreements entered into with consignors with respect to receiving, handling, selling and making remittances and payments for consignments made to said Comet Commission Company.”

The plaintiff, therefore, sought by reason-of the facts a recovery against the Comet. Commission Company and the Commonwealth Bonding & Casualty Insurance Company. The trial before a jury resulted in a judgment against both defendants as prayed for, and the Commonwealth Bonding & Casualty Insurance Company prosecutes this writ of error.

Error is first assigned to the action, of the court in permitting defendant Frank Carson, owner of the Comet Commission Company, to refer to and examine an “account sales,” which he testified had been made by his bookkeeper, purporting to state the number of the cattle shipped and sold, the amount of the expense and commission, and the net sum due the shipper, said net sum being the amount for which the plaintiff had sued. Plaintiff in error objected to this testimony on the ground that as to it the testimony was hearsay. While the witness testified that independent of the account sales, he was not able to state the number, weights, and values of the cattle exactly, yet the hill of exception, when considered as a whole, we think sufficiently shows that as against the plaintiff in error the witness was only permitted to use the account sales for the purpose of refreshing his memory. And he testified after having examined the paper, that his mind had been refreshed as to the amount involved in the transaction, and that, from an examination of the account sales and of the check issued by bis company payable to the plaintiff, the amount due the plaintiff was $1,277.52, which had never been paid. The evidence shows that after the sale of the cattle the account sales were made out and mailed with a check payable to the plaintiff Harper for the sum sued for, which account and check were received by Harper, and both of which, of course, were admissible as original evidence against the defendant Carson. Numerous authorities might be cited to the effect that such evidence was likewise at least prima facie proof against the surety. See Brandt on Suretyship and Guaranty, §§ 624-626. Thus, in the case of Placer County v. Dickerson et al., 45 Cal. 12, the Supreme Court of California held that the receipt of a county treasurer given to a tax collector for public money was prima facie evidence against the sureties on the treasurer’s bond. To the same effect is the case of People v. Huson, 78 Cal. 154, 20 Pac. 369. See, also, Lasater v. Purcell Mill & Elevator Co., 22 Tex. Civ. App. 33, 54 S. W. 425.

However, we need not rest our conclusion upon this theory, for, as stated, it seems quite clear, from an examination of the bill of exceptions, that as against the plaintiff m error the only use made of the account sales rendered by the Comet Commission Company was for the purpose of refreshing the mind of the witness, who, upon his oath, thereafter stated the amount due, and no other evidence in the record even tends to refute the plaintiff’s allegations that the cattle were shipped and sold as alleged, or that the proceeds thereof were of a less amount than as stated by the witness. We, therefore, think the assignment should be overruled, as also the second assignment, objecting to the introduction of the unpaid check, which had been issued by the commission company as above stated. The check but evidenced what was otherwise established, and its introduction at most was harmless.

Upon the conclusion of the testimony offered by the plaintiff the court peremptorily instructed the jury to render a verdict for the plaintiff for $1,277.52, and this instruction is assailed on a number of grounds. It is insisted that the bond of plaintiff in error declared upon was not proved, but the record affords no substantial basis for any such contention. We find the bond set out in the statement of facts, and, as appears by the agreement of the parties, was, among other things, “proved.” The recitation, therefore, in the statement of facts that the plaintiff “offered” it in evidence affords no basis for the contention that it was; not proven. Nor do we find any substantial basis for the contention that the legal evidence offered was such as to require the submission of the case to the jury. If it be assumed that the evidence of Oarson as to the amount of his indebtedness to the plaintiff was, as we have held, properly admitted, every other fact necessary to the plaintiff’s recovery was undoubtedly shown by undisputed testimony. There is no contention, in either pleading or proof, that there was any collusion between the plaintiff Harper and Oarson, to whom Harper’s cattle were shipped. The cattle were undoubtedly shipped as alleged, and sold as alleged, and, as we think, it is undisputed that they brought the net price proven, It -is further undisputed that the plaintiff gave the indemnity bond declared upon, and there is no dispute as to its execution, nor as to its terms, nor is there a contention that the terms fail to bind the plaintiff in error to make good the failure of Oarson to pay the price for which he sold the plaintiff’s cattle. So that, as before stated, we see nothing left for a jury to determine. It if true the jury are the judges of the credibility of the witnesses, as well as of the weight to be given to their testimony, but, in the absence of proof of circumstance of some kind to cast suspicion upon the witnesses or transaction, it cannot be said that the jury would be authorized to disregard the testimony.

We conclude that there is no error as assigned, and that the judgment must be affirmed.

BUCK, J., dissenting.
      <&wkey;For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: BUCK, J.

text:
    DENMAN v. JAMES et al.
    (No. 8245.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Oct. 23, 1915.
    Rehearing Denied Nov. 27, 1915.)
    1. Sales &wkey;>52 — Rescission—Right to — Evidence.
    In an action to enforce a chattel mortgage on a stock of drugs, the last purchaser of the stock sought rescission on the ground that his seller had represented that there were no liens, when in fact the mortgage was existent and the owner of the premises in which the drugs wore housed had a landlord’s lien. Held, that a written instrument acknowledged before a notary public, in which the landlord declared he did not make any claim for rent for part of the period for which it was claimed he asserted a lien, tendered to the last purchaser, is inadmissible to show that such purchaser was not entitled to rescind, particularly where the landlord had intervened and was asserting his claim for rent, and the instrument was not tendered until after the purchaser had elected to rescind.
    [Ed. Note. — F'or other cases, see Sales, Cent. Dig. §§ 118-144, 1045; Dee. Dig. <@=o52.]
    2. Appeal and Error &wkey;3l050 — Review— Habmless Error.
    In such case the admission of such evidenct-was prejudicial.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1068, 1069, 4157, 4160; Dec. Dig. &wkey;1050.]
    3. Appeal and Error <&wkey;1177 — Determination-Remand.
    In a suit to enforce a chattel mortgage on a stock of goods which had passed through several hands, where it did not appear from the general verdict against the last purchaser in favor of his immediate sellers whether the jury found against him on his plea of misrepresentations and fraud, or whether they found a ratification after his discovery of liens, the judgment, which was erroneous, should be reversed and remanded, instead of merely reversed.
    [Ed. Note. — For other eases, see Appeal and Error, Cent. Dig. §§ 4597-4604, 4606-4610; Dec. Dig. <@=>1177.]
    4.Evidence <@=370 — Admissibility—Chattel Mortgage — Defect ox Record.
    A recorded chattel mortgage, having been declared on in the petition, need not be filed with the papers in court as a predicate for its admission; the statute having no application.
    [Ed. Note. — For other cases, see Evidence, Dent. Dig. §§ 1538, 1559, 1560, 1562-1578, 1592; Dec. Dig. <@=370.]
    5.Evidence <@=370> — Documentary Evidence-Admissibility.
    Under Rev. St. art. 3700, a recorded chattel mortgage is admissible in evidence without proof of execution by parol; the record taking the place of proof of execution, which was necessary at common law.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 1538, 1559, 1560, 1562-1578, 1592; Dec. Dig. <@=370.]
    6. Evidence <@=179 — Parol Evidence — Admissibility.
    Where the bill of sale, the terms of which were in controversy, was in possession of appellant’s counsel, and it was not produced pursuant to notice, parol evidence of its terms is admissible.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 595-599; Dec. Dig. <@=179.]
    7. Chattel Mortgages <@=226 — Validity as Between Parties.
    Notwithstanding Vernon’s Sayles’ Ann. Civ. St. 1914, art. 3970, declaring mortgages of stocks of goods, wares, and merchandise exposed to sale to be fraudulent and void, a purchaser of the whole of a stock of goods, who assumed the seller’s debt, cannot question the legality of the mortgage.
    [Ed. Note. — For other cases, see Chattel Mortgages, Cent. Dig. § 471; Dec. Dig. <@=226.]
    Appeal from Taylor County Court, E. M. Oversliiner, Judge.
    Action by Henry James against C. P. Stevens and others, in which D. E. Adrian and another intervened. From a judgment for plaintiff against all defendants, for the in-terveners, and for defendant Dudley over against defendant Denman, said Denman, whose cross-action had been denied, appeals.
    Affirmed as to all defendants except Denman, and reversed and remanded as to him.
    Ben D. Cox, of Abilene, for appellant. Sayles, Sayles & Sayles, of Abilene, for ap-pellees.
   BUCK, J.

This suit was filed in the county court of Taylor county by Henry James against C. P. Stevens, C. P. Beene, C. W. Dudley, and D. C. Denman, alleging that he had sold a stock of drugs and fixtures, at Trent, Tex., to defendant Stevens, who had executed in favor of plaintiu. six notes, aggregating $500, and a chattel mortgage to secure the same on said stock of goods and fixtures; that said mortgage was duly filed for record in the office of the county clerk of Taylor county, prior to any conveyance by Stevens of said goods and fixtures. It was further alleged that said Beene had purchased said goods and fixtures from Stevens, and Dudley from Beene, and Denman from Dudley, each assuming, verbally and in writing, the payment of said notes and the satisfaction of said mortgage lien retained; that plaintiff was the legal owner of said notes and lien, and the indebtedness was due and unpaid. Plaintiff prayed for a personal judgment against each of the defendants, jointly and severally, and for a foreclosure of the mortgage lien, and for writ of possession.

Defendant D. C. D'enman answered, demanding strict proof as to Mm of plaintiff’s allegation of the assumption of the notes and lien, pleading the statute • of frauds as to said notes and lien, and further that his immediate grantor, C. W. Dudley, at the time of the negotiations between them leading up to the trade, had fraudulently represented to Mm that, except as to the notes held by James, there was no lien or incumbrance against the goods and fixtures, but that, having learned upon investigation of the landlord’s lien held by L. E Adrian, and having called said Dudley’s attention to the matter, upon the latter’s failure to pay off or satisfy the same, he (Denman) had rescinded the trade between him and Dudley and tendered back to Dudley the bill of sale covering tbe goods and fixtures, and that therefore he was not bound by any assumption alleged to have been made by him.

Dudley answered, and by way of cross-action prayed for judgment over against Den-man for any amount that might be adjudged against Mm. Dudley admitted that Denman had offered back to him the bill of sale covering the goods and fixtures in question, which bill of sale he alleged he had declined to accept, but denied that Denman had made any tender to him of the mortgaged property conveyed thereby, or any proceeds of said property, and he further pleaded that, even though it should be held that Denman had tendered to him the property in question and the bill of sale thereto, he denied that there had been any fraudulent representations with reference to the matters alleged in Denman’s, answer, and he further alleged, after Denman had full knowledge of the existence of the landlord’s lien, that said Den-man continued in possession of the property traded to him, and exposed and offered the merchandise for sale, and in fact did sell some of said merchandise, thereby ratifying and affirming the trade between said Den-man and Dudley, and waiving any right of damage arising therefrom.

D. E. Adrian, the owner of the premises in which the goods and fixtures were located, filed his plea of intervention, alleging a landlord’s lien to secure the payment of $97 alleged to be due for rent and asked for a foreclosure.

J. L. Stephenson also intervened, alleging that he was the clerk and employe in said store, and worked therein some 2% months, and that for said services the defendants agreed to pay him the sum of $95, which amount was due and unpaid, and he prayed for judgment, and for a foreclosure of his laborer’s lien.

Defendants Beene and Stevens failed to answer, and judgment was rendered against them by default.

The cause was tried before a jury, upon a general charge, the court, in brief, instructing the jury to find against all of the defendants, unless they found that Dudley had made false representations to Denman as to the value of the goods, 'Denman having pleaded that Dudley had grossly misrepresented the value of the goods, or as to their being free from liens and incumbrances other than the lien sued on, and that said representations were material to the trade between Dudley and Denman, etc., in which event they should find for Denman, unless they should further find that, after Denman had discovered the alleged fraud, he had exercised ownership and control over said stock of goods and fixtures, and traded and dealt with them as his own in a manner inconsistent with his intention to rescind the trade, or that he did not make his intention to rescind known to Dudley within a reasonable time, in which event the jury were instructed to find for the plaintiff.

The jury returned the following verdict:

“We, the jury, find for the plaintiff against all of the defendants.”

Upon this verdict the court rendered judgment in favor of plaintiff — first, against 0. P. Stevens and 0. P. Beene by default; second, also against O. W. Dudley and L. O. Denman, the four jointly and severally, in the sum of $603.90, with interest and costs of suit; third, in favor, of intervener D. E. Adrian for $96.55, and in favor of John L. Stephenson in the sum of $95, against all of the defendants; fourth, in favor of Dudley against Denman for any sums of money which he might be required to pay out under this judgment; and, fifth, against L. O. Den-man on his cross-action and affirmative pleading. Denman alone appeals.

In his second assignment appellant urges error to the action of the court in admitting, over objection, a certain written instrument executed by L. E. Adrian, and duly acknowledged by him before a notary public and dated September 3, 1914, in which instrument said Adrian declared that he did not claim at the date of said instrument, and had never claimed, any lien on said stock for the rents for February and March, 1914, but that he looked personally and solely to Henry James and Dr. J. H. Wamiek for the rent for said two months. This writing was admitted by the court in connection with the testimony of C. W. Dudley to the effect that upon complaint by Denman of the existence of the landlord’s lien held by Adrian and the statement by Denman that unless the matter of the rents claimed by Adrian was cleared up within a week from the time of the conversation with regard thereto between Dudley and Denman, which took place some time in July, 1914, he (Dudley) had secured this waiver from Adrian and had tendered it to Denman, but that Denman had said that it was too late, that he had already rescinded the trade. Appellant objected to the introduction of this instrument in evidence, as shown by his bill of exception No. 2:

“For the reason that same is an ex parte affidavit and statement of intervener L. E. Adrian, and this defendant had no opportunity to cross-examine said Adrian on the matters contained therein ; and said defendant objected to the introduction of said instrument in evidence for the further reason that same had not been filed among the papers in the case and this defendant had no notice thereof, and same is not in the form of a deposition; and defendant objected for the further reason that the said instrument was not the best evidence of matters contained therein, but that the witness Adrian himself should have been required to appear in person on the witness stand, it being shown that he was a resident of Taylor County, or else testify by deposition; and the defendant further objected to the introduction of said instrument in evidence for the reason that the same is immaterial and irrelevant, and throws no light upon the question in issue in this case, and for the further reason that same is contradictory of the pleadings filed by said intervener Adrian, wherein he claims a landlord’s lien on the mortgaged property involved in this suit by reason of his owning the building in which same was contained; and the defendant further objected to the introduction of said instrument in evidence for the reason that same was not executed by intervener Adrian until September 3, 1914, and it was never tendered to this defendant until the 9th day of September, 1914, after he had rescinded his trade with defendant Dudley in July, 1914, and was therefore not binding upon defendant Denman for any purpose.”

In a letter from Adrian to Denman, dated July 30, 1914, Adrian claimed as against Denman a balance of $66.77 for rent covering a period from October 1, 1913, to August 1, 1914, and stated that the balance due was made up of rent since May 26, 1914 (the date Beene sold out), and “back rent when Beene took charge.” Thus it will be seen that the rent for the months of February and March, 1914, the waiver of which, so far as Denman and other defendants were concerned, is contained -in the written instrument to the introduction of which the objection was made, was included in the statement furnished by Adrian to Denman. The existence of the debt to Adrian and the subsequent landlord’s lien was one of the grounds urged by defendant Denman in his pleadings as a basis for the right of rescission of his part of the trade between him and Dudley, and was the particular cause assigned by him as a basis for such rescission in his conversation with Dudley occurring in July. If Den-man had a. right of rescission by reason of the alleged false representations made by Dudley to Mm, and Ms pleadings and evidence would have authorized the jury so to lind, and he had exercised that right in July, 1014, the subsequent tender by Dudley in the following September of this partial release or waiver of rents claimed by Adrian to he due would not have affected the rescission theretofore made by Denman. Adrian, as intervener, was a party plaintiff to this suit so far as Denman and the other defendants were concerned, and was seeking a judgment against Denman and other parties defendant, and we know of no rule of evidence that would make his written statement or affidavit admissible for the purpose of establishing his claim, or the claim of defendant Dudley over against appellant, or of affecting Denman’s right of rescission, which,, if exercised at all, had been exercised some two months prior to the execution of this instrument offered in evidence.

We believe the court erred in admitting this instrument in evidence, and we are not prepared to say that such admission did not influence the jury in their verdict. For this error the judgment of the trial court must he reversed, in so far as the judgment against appellant is concerned.

There is some question in our minds as to what should he the further disposition of this case, inasmuch as there seems to he practically no denial of the claim made by appellant that the defendant Dudley represented to him that there was no incumbrance or lien except the mortgage lien to secure plaintiff’s debt; but inasmuch as there are some statements in Dudley’s testimony which may be construed as a denial of appellant’s claim that he (appellant) never exercised any right of ownership or control over the goods and fixtures involved subsequent to the time in July, when it is claimed that he rescinded the contract, we have concluded that perhaps we would not be justified in here rendering judgment in favor of appellant. From the general verdict, we are unable to determine whether the jury found against Denman’s plea of misrepresentation and fraud, or whether they found, even though fraud had been perpetrated by Dudley, that after appellant had full knowledge thereof he affirmed the' trade theretofore made by assuming the right of control and ownership and disposition. Denman testified that he did take a man up to Trent to look at the stock, but that it was done at the request of Dudley and the goods to he sold on Dudley’s account. On the other hand, Dudley states that at no time after the trade did he exercise any right of control or ownership over the property involved. Thus, as to this matter, there seems to be a controversy.

In view of another trial, it may be well to state that as against the objections urged we do not believe the court erred in admitting in evidence, without notice to the defendant, the original chattel mortgage executed by O. P. Stevens to Henry James, which mortgage was brought into court by the clerk having custody of the chattel mortgage record. The mortgage being declared upon in plaintiff’s pleading, notice by filing with the papers in the court was not required as a predicate for its admission. Where the execution and delivery of a mortgage is proved, the original mortgage is admissible in evidence, though it was not filed before the trial and no notice was given, as required by the statute governing the use of instruments in evidence without proof of execution. Clayton v. Ingram, 107 S. W. 880.

While, in the instant case, the execution of the chattel mortgage was not proven by parol, yet it is held in Hancock v. Tram Lbr. Co., 65 Tex. 225, that:

“The purpose of the provision of the statute first quoted (R. S. art. 2257, now incorporated in article 3700, R. S.) however, is not to give notice, but to establish a rule of evidence. Under that statute, .if an instrument required or permitted by law to be recorded is acknowledged or proved for record and recorded as the law requires, upon compliance with the other provisions of the law, the original stands as though its execution was proved as at common law, unless an affidavit of forgery be filed.”

See, also, Morris v. Moon, 120 S. W. 1063.

Nor do we think that the court erred, as claimed in appellant’s third assignment, in permitting the witness Dudley to testify over objection of appellant that the latter had assumed the payment of the notes and mortgage declared upon, inasmuch as the evidence tends strongly to show that the bill of sale alleged to contain the assumption was in possession of appellant’s attorney at the time of the introduction of said testimony, and oral notice had been given appellant to produce said bill of sale, and Dudley had declared on the written assumption alleged to be therein contained. Lumber Co. v. Telegraph Co., 58 Tex. 394; Hamilton v. Rice, 15 Tex. 385.

It is further urged in the fourth assignment that the court erred in foreclosing a mortgage lien upon the property described in plaintiff’s petition, for the reason that the mortgage as pleaded and the instrument offered in evidence by plaintiff purported to cover a stock of drugs and merchandise which was exposed and offered for sale to the public, and which, under article 3970, Vernon’s Sayles’ Texas Civil Statutes, is fraudulent and void. The ease of Continental State Bank of Beckville v. Trabue, 150 S. W. 209, decided by the Court of Appeals for the Sixth District, holds that this article is not applicable! to a purchaser of the dealer’s whole stock in trade, where the purchaser assumes payment of a debt which is a charge on the dealer’s property, which holding was; in effect, affirmed by the Supreme Court by denial of writ of error. 154 S. W. xix.

As to other questions raised in appellant’s brief, we do not believe they will probably arise in a subsequent trial, and therefore do not deem that any good purpose could be subserved by a discussion thereof herein.

It is therefore the judgment of this court that the judgment- of the trial court be affirmed as to all other defendants except Denman, and that'the judgment as to Den-man be reversed, and the cause remanded; and it is so ordered.
      <@^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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


text:
    WARDLOW v. ANDREWS et al.
    (No. 5547.)
    (Court of Civil Appeals of Texas. San Antonio.
    Dec. 1, 1915.
    Rehearing Denied Dec. 22, 1915.)
    1. Carriers <@=>30— Interstate Shipments— Rate Approved by Interstate Commeece Commission — Notice.
    A freight rate approved by the Interstate Commerce Commission- becomes effective immediately, though the carrier does not post the tariff in its local station.
    [Ed. Note. — Por other cases, see Carriers, Cent. Dig. § 81; Dec. Dig. <@=>30-. ]
    2. Carriers <@=>30 — Interstate Shipments— Wrong Quotation oe Rates — Right of Action.
    A wrong quotation by a carrier’s agent of lower rates for interstate shipments than that fixed by the Interstate Commerce Commission gives no right of action against the carrier to the shipper injured thereby.
    [Ed. Note. — For other cases, see Carriers, Cent. Dig. § 81; Dec. Dig. <@=>30.]
    3. Appeal and Error <@==>1071 — Statement of Pacts — Findings of Pact and Law.
    An approved statement of facts, showing no material conflict in the evidence, takes the place of, and dispenses with the necessity of- the filing of, findings of fact and law by the court, though request has been made for such findings.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4234-4239; Dec. Dig. <@=>1071.]
    4. Appeal and Error <@=>72-4 — Assignment of Error — Sufficiency.
    An assignment of error, stating that “the judgment * * * is contrary to the law * * * and the evidence, * v * ” being too general, will not be considered.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2997-3001, 3022; Dec. Dig. <@=>724.]
    Appeal from Hidalgo County Court; W. H. Gossage, Judge.
    Action by Frank Andrews and others, receivers, against W. D. Wardlow. From judgment for plaintiffs, defendant appeals.
    Affirmed.
    Frank C. Pierce and Webster & Green, all of Brownsville, for appellant. Claude Pollard, of Kingsville, and Osear C. Dancy and Graham, Jones, West & George, all of Brownsville, for appellees.
   CARL, J.

The St. Louis, Brownsville & Mexico Railway Company, through its receiver, Frank Andrews, the St. Louis & San Francisco Railway Company, through its receivers, Thos. H. West, W. C. Nixon, and W. P. Riddle,- and the Houston & Texas Central Railway Company, appellees, sued appellant, W. D. Wardlow, and recovered a judgment for the difference between the rate quoted to and paid by appellant on a shipment of lumber from Woodville, Okl., to Llano Grande, Tex., and the rate alleged to have been promulgated by the Interstate Commerce Commission which was claimed to be in force at that time. Appellant paid the freight 'as called for in his contract of shipment, amounting to about $256.72, and the additional amount sued for was $214.62.

The petition alleges that in the contracts of shipment, which are set out as Exhibits A and B, defendant and appellees agreed to substantially the following:

“The said St. Louis & San Francisco Railway Company agreed to transport from Ray-wood or Woodville, Okl., for defendant two certain carloads of ash lumber and to safely transport the same from said station of Ray-wood or Woodville, Okl., over its own lines and the lines of connecting carriers to the station of Llano Grande, Tex., on the line of the St. Louis, Brownsville & Mexico Railway Company in Hidalgo county., Tex., subject to the various stipulations in said contract set out, and the said Wardlow on Ms part in writing agreed to pay the legal freight charges on same as designated and set out by the Interstate Commerce Commission.”

Also:

“That by the terms of said contracts, as evidenced by said freight contracts hereto attached and prayed to be considered as part hereof, said defendant became bound and liable, and promised to pay to plaintiff the legal amount of freight due for transporting said property from Raywood or Woodville, Old., to Llano Grande, Tex., as stipulated under freight rates made by the Interstate Commerce Commission, but that said defendant has only paid thereon the sum of $265.72, as above set out, and there still remains due and unpaid upon said contracts the sum of $214.62, and defendant, though often requested, has failed and refused, and still fails and refuses, to pay said balance due, or any part thereof, to plaintiff’s damage in the sum of $275.”

The defendant answered by general demurrer, admitted the shipment of lumber, but denied that he agreed or was bound to pay the rates fixed and published by the Interstate Commerce Commission, and denied that the copies of the written contract are true copies. He also alleged that he requested J. L. Dodson, the railway agent at Woodville, to quote him rates on this class of freight; that this agent communicated with the general freight offices of the St. Louis & San Francisco Railway and its receiver, and was informed that the rate was 26 cents per hundred pounds, and that he relied on that rate, shipped the lumber, and paid the freight so due under said quotation.

. As narrowed down, the issue was whether defendant was protected by the payment of the 26 cents per hundred pounds, or would be compelled to pay at the rate of 47 cents per hundred pounds, the interstate commerce rate. The trial court gave the railways judgment for the amount for which the suit was brought.

Appellant’s first assignment of error and proposition thereunder are based upon the idea that after the approval, adoption, and promulgation of the rate by the Interstate Commerce Commission it is necessary for the railway thereby affected to taire some action before that rate becomes effective. There is no doubt that the rate contended for by appellees had been approved and filed by the Commerce Commission. And it may be said to be settled law that a wrong quotation of lower rates than that fixed by the Interstate Commission by an agent, applicable to interstate shipments, such as this was, gives no right of action to the shipper who may have sustained injury by reason of such wrong quotation. G., C. & S. F. Ry. Co. v. Hefley, 158 U. S. 98, 15 Sup. Ct. 802, 39 L. Ed. 910; Railway Co. v. Mugg, 202 U. S. 242, 26 Sup. Ct. 628, 50 L. Ed. 1011; Wichita Falls & W. Ry. Co. v. Asher, 171 S. W. 1116; T. & P. Ry. Co. v. Cisco Oil Mill, 204 U. S. 451, 27 Sup. Ct. 358, 51 L. Ed. 562.

And it appears that it is not necessary that the tariff be posted in the carrier’s local station, in order that the rate promulgated may become effective. Ill. Cent. Ry. Co. v. Henderson Elevator Co., 226 U. S. 441, 33 Sup. Ct. 176, 57 L. Ed. 290; K. C. Southern Ry. Co. v. Albers Commission Co., 223 U. S. 573, 32 Sup. Ct 316, 56 L. Ed. 556; Ruling Case Law, vol. 4, § 75.

As we construe the law to be, from the above cases and others, when a rate is approved by the Interstate Commerce Commission it then becomes operative upon the railway whether it performs its duty or not. The following is taken from a footnote to the Illinois Central Railway Case, supra:

“While shippers rely largely upon the rates quoted by freight agents and billing clerks, the law charges- them with knowledge of the lawful rates. And they will not be heard before this Commission to claim the benefit of a lower than the lawful rate on the ground that some railroad clerk has made a mistake in quoting a lower rate for a particular shipment. To permit shippers to impute negligence to carriers in quoting rates, and on that ground to enjoy the rate quoted, instead of paying the lawfully published rate, would open a broad and ample way for the payment of rebates, and for other unlawful practices, and might, in its practical results, work a repeal of the essential feature of this legislation.”

Appellant filed a request that the trial court (this case having been tried before the court without a jury) file conclusions of fact and law; but there is an approved statement of facts in the record. The facts in this case are practically undisputed, and there is no conflict. And where the statement of facts filed shows no material conflict in the evidence, such statement takes the place of findings of fact and law filed by the court, and such failure to file such findings is not reversible error. Peers v. Williams, 174 S. W. 864; Jacobs v. Nussbaum, 133 S. W. 484; Sutherland v. Kirkland, 134 S. W. 851.

There is an assignment which says:

“The judgment of the court entered herein is contrary to the law applicable to this cause and the evidence adduced upon the trial thereof.”

Our courts have uniformly held, of late, that such an assignment is too general, and will not be considered.

We find nothing that requires a reversal, and the judgment is accordingly affirmed.
      <@=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: DUNKLIN, J.

text:
    NEBLETT v. COOPER GROCERY CO.
    (No. 8260.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Nov. 6, 1915.
    Rehearing Denied Dec. 4, 1915.)
    1. Appeal and Error @=>1036 — Harmless Error — Misjoinder of Causes of Action.
    Where a grocery company sued the executrix of a guarantor of its bankrupt debtor, the joinder of the bankrupt, though improper, was not prejudicial to the executrix, where there was a judgment in favor of the debtor on account of his discharge in the bankruptcy proceedings.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4069-4074; Dec. Dig. @=> 1036.]
    2. Appeal and Error @=3880 — Error Affecting Coparty.
    In an action against a bankrupt on the unsatisfied portion of plaintiff’s claim, and also against the guarantor of the debt, any error in overruling the bankrupt’s demurrer to the suit against him was harmless to the guarantor, more especially where judgment was finally rendered in favor of the bankrupt.'
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3584-3590; Dee. Dig. @=> 880.]
    3. Witnesses @=140 — Competency — Legatee of Decedent — Statute.
    Under Rev. St. 1911, art. 3690, providing that in actions by or against executors neither party shall be allowed to testify against the others as to any transaction with or statements by the testator, unless called to testify by the opposite party, and that the provisions of the article shall include all actions by or against the heirs or legal representatives of a decedent arising out of any transactions with him, where the creditor of a'bankrupt, who was a beneficiary under the will of the deceased guarantor of his indebtedness, sued such bankrupt to recover the unpaid portion of its claim, joining the estate of the guarantor, the bankrupt, introduced as a witness by the executrix, was not a competent witness, since, as a beneficiary under his guarantor’s will, he is a party in interest to the suit against the executrix, who was defending for his benefit and all others interested in the estate.
    [Ed. Note. — For other cases, see Witnesses, Cent. Dig. §§ 598-618; Dec. Dig. @=>140.]
    4. Guaranty @=>56 — Discharge of Guarantor-Extension of Time — Waiver of Defense-Validity.
    Where a contract of guaranty expressly waived the defense that an extension of time for the payment of the indebtedness should discharge the guarantor, a transaction between the debtor and the creditor, unconsented to by the guarantor, extending time for the payment of the indebtedness, did not discharge the guarantor.
    [Ed. Note. — Eor other cases, see Guaranty, Cent. Dig. § 67; Dec. Dig. <§=56.]
    5. Evidence <@=>419 — Parol Evidence Affecting Writing.
    In an action by a guaranteed creditor against the debtor and the guarantor’s executrix, parol testimony was admissible to prove that, when collateral was delivered by the debt- or to the creditor, it was agreed between them that the creditor should discharge the guarantor, since the consideration for a written instrument may be proved by parol evidence when it does not tend to vary the terms of the writing.
    [Ed. Note. — Eor other cases, see Evidence, Cent. Dig. §§ 1912-1928; Dec. Dig. <§=419.]
    6. Bankruptcy <@=433 — Liability op Guarantor-Equities.
    A grocer, indebted to a wholesale dealer, previous to his bankruptcy had hypothecated to the dealer certain accounts to be held as collateral. By agreement between the wholesaler and the trustee in bankruptcy the value of the collateral was fixed at $455.62, the wholesaler’s claim in bankruptcy credited with that amount, and the collateral turned over to it. The bankrupt’s indebtedness had been guaranteed, and thereafter the wholesaler sued the executrix of the guarantor to recover the balance of its claim. The executrix sought to show that the wholesaler had collected upon the collateral in its hands over $1,009, and had on hand other uncollected collateral worth 15 cents on the dollar. The wholesaler objected that it had purchased the collateral from the trustee in bankruptcy at an agreed valuation, and that by the purchase it had become the owner, so that whether it had realized on it since the purchase was immaterial. 1.laid that, although by the provisions of the bankrupt act the transfer of collateral to a creditor holding it at an agreed' valuation between the trustee and the creditor is authorized and becomes binding upon approval, the guarantor’s estate was to be given the benefit of the equities in its favor, and the wholesaler’s recovery reduced by what it had collected on the collateral, since it was not within the contemplation of the parties to the guaranty that the wholesaler should realize a profit over and above satisfaction for any loss by reason of the debtor’s failure to pay.
    TEd. Note. — Eor other cases, see Bankruptcy, Cent. Dig. §§ 808-823; Dee. Dig. <@=433.]
    Appeal from District Court, Erath County; W. J. Oxford, Judge.
    Action by the Cooper Grocery Company against Mrs. E. A. Neblett, executrix. Judgment for plaintiff against the named defendant, and she appeals.
    Reversed, and cause remanded for new trial between plaintiff and appellant alone.
    Chandler & Pannill, of Stephenville, for appellant. A. P. Young, of Stephenville, and Davis & Cocke, of Waco, for appellee.
   DUNKLIN, J.

The affairs of Frank Neb-lett, a retail grocery dealer, were duly administered by the federal court in bankruptcy proceedings. One of the claims against the bankrupt adjudicated in that suit consisted of an account and four promissory notes executed by Frank Neblett in favor of the Cooper Grocery Company, a wholesale dealer, for groceries sold to Neb-lett, who for the purpose of securing the same had hypothecated to the seller certain accounts to be held as collateral. By agreement between the Cooper Grocery Company and the trustee in bankruptcy, which was duly approved by the court, the value of that collateral was fixed at $455.62, the ■claim credited with that amount, and the collateral turned over to the claimant. The balance due on the claim after deducting that credit was $2,459.44, and the claim was duly approved by the court for that sum.

On July 19, 1910, and subsequent to a sale of a part of the goods, J. W. Neblett executed and delivered to the Cooper Grocery Company his guaranty in writing, reading:

“In consideration of the sale of any kind of merchandise by the Cooper Grocery Company to Frank Neblett, I, we, or either of us hereby guarantee to them and their assigns, unconditionally, the payment of any indebtedness of said Frank Neblett now existing from the said Frank Neblett to the said the Cooper Grocery Company, now residing and doing business in the city of Waco, county of McLennan, state of Texas, not exceeding the sum of one thousand no/100 dollars, and any indebtedness created on this day or hereafter, until notice in writing, and I, we, or either of us consent to any extension of payment made, or hereafter made, and waiv.e notice thereof, and waive the necessity of protest, notice, and suit in all cases between said parties, and consent that the form of said indebtedness may be changed from account to note, bill, or other commercial paper; and I, we, or either of us agree to pay interest at the rate of 10 per cent, per annum from date agreed upon by said purchasers, and 10 percent. attorney’s fee if said debt is placed in the hands of an attorney for collection; and I, we or either of us further guarantee that said indebtedness shall be paid in Stephenville, Erath county, Tex., and we waive the right to be sued elsewhere.”

The present suit was instituted by the Cooper Grocery Company against Frank Neb-lett and J. W. Neblett to recover the unpaid balance of $2,459.44 on the claim which had been filed and adjudicated in bankruptcy.

During the pendency of the suit J. W. Neblett died, leaving a last will and testament, which later was duly probated. Mrs. E-. A. Neblett, the independent executrix of the will, was made a party defendant in the present suit, and upon trial judgment was rendered in favor of plaintiff against her as such executrix for the full amount of said claim, from which judgment she has prosecuted this appeal. Judgment was also rendered in favor of Frank Neblett because of his discharge in bankruptcy, and from that judgment no appeal was taken, nor has the Cooper Grocery Company in any manner challenged the correctness of it.

In plaintiff’s pleadings it was alleged that Frank Neblett had obtained credit for the goods sold to him by the Cooper Grocery Company by reason of certain fraudulent misrepresentations, and that by reason of the fraud so practiced the debt was not discharged by the decree in bankruptcy.

By plea in abatement in tbe nature of an exception Mrs. Neblett presented tbe ques-lion of a misjoinder of causes of action and of parties defendant, on tbe ground that tbe suit against Frank Neblett was for a tort, while that against her was upon a contract, and Frank. Neblett urged a general demurrer to tbe demand against him on tbe ground that only constructive fraud, and not actual fraud, in tbe purchase of tbe goods had been alleged. Both those exceptions were overruled, and tbe correctness of those rulings has been challenged by Mrs. Neblett by two different assignments of error.

Under our liberal system of procedure, it may be gravely doubted that there was an improper joinder of causes of action or of parties. At all events, it does not appear that appellant was in any manner jjrejudiced by reason of such joinder. Western Nat. Bank v. T. C. U., 176 S. W. 1194, and authorities there cited. Likewise we fail to perceive how the error, if any, in overruling Frank Neblett’s demurrer to the suit against him, resulted in harm to appellant, especially in view of the fac-t that judgment was finally rendered in favor of Frank Neblett.

For the reasons stated, the two assignments last mentioned are overruled.

One of the defenses urged in the answer of Mrs. Neblett to plaintiff’s suit consisted in allegations, in effect, that the execution of J. W. Neblott’s written contract of guaranty was procured by plaintiff’s agent, H. W. Carver, who falsely and fraudulently represented to said J. W. Neblett that by the terms of that instrument J. W. Ncblett’s liability was limited to $1,000, that J. W. Neblett did not read the instrument, was ignorant of its contents, and was induced to execute the same by reason of said fraudulent misrepresentations by Carver, and that by reason thereof the contract was void.

Frank Neblett was introduced as a witness by the executrix, and testified, in effect, to the facts so pleaded, but his testimony was afterwards excluded on motion of plaintiff, because it tended to prove a transaction with the deceased, J. W. Neblett, and its admission would be in violation of article 3690 of Revised Statutes of 1911.

Even though it should be held, as insisted by appellant, that the joinder of Frank Neblett as a party defendant did not of itself have the legal effect to make him a party to the controversy between plaintiff and the executrix, nevertheless he was a beneficiary under the will of J. W. Neblett, and hence a party in interest to the suit against the executrix, who was defending for his benefit, as well as for all others interested in the estate. Such being his legal status in that controversy, and not having been called by plaintiff to testify upon the issue last mentioned, the court did not err in excluding his testimony. Simpson v. Brotherton, 62 Tex. 170; Gilder v. Brenham, 67 Tex. 345, 3 S. W. 309.

The notes sued on by the plaintiff were executed by Frank Neblett nearly one year after the contract of guaranty had been executed and delivered. In her answer the executrix alleged, in substance, that by reason of that transaction the debtor was granted an extension of time for the payment of the indebtedness, which agreement of extension was without the consent of the guarantor, who was thereby discharged from the guaranty. This defense was destroyed by the provision in the contract of guaranty expressly waiving it as shown above.

Another defense pleaded by the executrix was that at the time the collateral was delivered by Frank Neblett to the Cooper Grocery Company, which was before the commencement of the bankruptcy proceedings, it was agreed by and between said Neblett and the Cooper Grocery Company that, in consideration of such .transfer, the Cooper Grocery Company would discharge J. W. Neblett from any liability upon his contract of guaranty.

Upon the trial the executrix offered the testimony of Frank Neblett to prove that agreement, which, according to the witness, was made by and between him and H. W. Carver, agent for and acting in behalf of the Cooper Grocery Company. This testimony was excluded by the court on objection made by plaintiff upon the ground that the effect of the testimony would be to vary by parol evidence the terms of such transfer, which was in writing. That ruling was erroneous, as the rule invoked has no application to proof of the consideration for which a written instrument is executed, where the consideration sought to be proved does not tend to vary the terms of the written instrument. Taylor v. Merrill, 64 Tex. 494; McLean & Curry v. Ellis, 79 Tex. 398, 15 S. W. 394; Tipton v. Tipton, 47 Tex. Civ. App. 619, 105 S. W. 830, and authorities there cited.

It was further alleged by the executrix in her answer that the Cooper Grocery Company had collected and realized from the collateral transferred to it by Frank Neblett the sum of $1,600, which the executrix, at all events, was entitled to have credited upon the indebtedness of Frank Neblett to that company. In support of that defense the executrix proposed to prove by H. W. Carver that the Cooper Grocery Company had actually collected upon said collateral the sum of $l,027.72v and had on hand other collateral uncollected in the sum of $1,011.75, which was worth 15 to 20 cents of its face value. The plaintiff objected to the testimony on the ground that it had purchased the notes and accounts from the trustee in bankruptcy at an agreed valuation of $455.-79, which amount had been credited on the debt of Frank Neblett, that by such purchase plaintiff had become the owner of the collateral, and it is therefore irrelevant and immaterial what amount plaintiff had realized upon said collateral after such purchase. The objection was sustained, and we are of opinion that there was error in that ruling.

It is true, as contended by appellees, that by the provisions of the bankrupt act a transfer of collateral to a creditor holding the same at an agreed valuation between the trustee and creditor is authorized, and becomes binding upon approval by the court; but that provision is not of controlling effect upon the question under consideration.

According to old English decisions which have been followed to some extent by American courts, a collateral undertaking to pay the debt or answer for the default of another was strictly enforced, even though in some instances it appeared that the obligee, after satisfaction of that demand, might have another satisfaction from the principal obligor also. But those suits were actions at law in countries where the jurisdiction to determine suits at law and suits in equity were lodged in separate courts. And the decisions seem to proceed upon the theory that the obligor should be held strictly to his contract without regard to equities in his favor which could be invoked in a court of equity only. But those decisions have been overruled by more recent ones, especially in jurisdictions where as in this state the blended system of law and equity practice prevails. According to the latter decisions, in a suit upon a collateral obligation, the obligor will be given the benefit of equities arising in his favor. See 2 Sedgwick on Damages, §§ 784 to 795; Elliott on Contracts, § 2126; Ann. Cas. 1913D, 1152, note. The contract of J. W. Neblett in the present suit was one of guaranty that Frank Neblett would pay the debts mentioned in the instrument, and, in the absence of any equities, the measure of recovery on such a contract would, of course, be the amount due on the debt of the principal obligor. But J. W. Neblett was an accommodation guarantor only, and it clearly appears that it was not within the contemplation of the parties to the guaranty contract that the Cooper Grocery Company should realize a profit therefrom over and above satisfaction for the losses that it might sustain as a result of Frank Neblett’s failure to pay his debt. The contract of J. W. Neblett, essentially, was to answer for any loss which the Cooper Grocery Company might sustain as a result of Frank Neblett’s failure to pay for the goods he had purchased, even though the proof necessary to establish the amount of such damages might be of a different character from that required to show the amount of recovery for breach of what is, strictly speaking, a contract for indemnity. To allow the Cooper Grocery Company to collect the full amount of the debt guaranteed, and also to keep the proceeds realized by it from the collateral in excess of the amount of credit allowed therefor would be to sanction a double satisfaction of his claim to the extent of such excess, which would clearly be inequitable and contrary to the purpose and spirit of the guaranty, and for that reason the assignment of error now under discussion is sustained.

For the errors indicated, the judgment is reversed, and the cause remanded for another trial between plaintiff and executrix only, the judgment against Frank Neblett being undisturbed.
      '@=»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and-Indexes

      <S=>For other eases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: TALBOT, J.

text:
    SOUTHWESTERN SURETY INS. CO. v. STEIN DOUBLE CUSHION TIRE CO. et al.
    (No. 7448.)

    (Court of Civil Appeals of Texas. Dallas.
    Dec. 11, 1915.
    Rehearing Denied Dec. 24, 1915.)
    1. Appeal AND Error <&wkey;1097 — Scope of Review-Prior Appeal — Efeect.
    _ Although on a prior appeal a question was decided on review of the court’s action in sustaining demurrers to the petition, the decision will not be disturbed on appeal from a judgment on trial of the issues, where the evidence did not differ materially from the allegations of the petition.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4358-4368, 4427; Dec. Dig. &wkey;1097.]
    2. Insurance &wkey;>686:~Reinsurance — Operation op Contract.
    A reinsurer under a strict reinsurance contract is not liable directly to the insured, who cannot maintain his action against the reinsurer, ignoring the insurer.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1823; Dec. Dig. &wkey;686.]
    3. Insurance «&wkey;684^“REiNSUBANCE” — Extent oe Liability.
    A contract of reinsurance is one by which an insurer agrees to protect the. first insurer from the risk he has already assumed, or a part of it, and which creates no privity between the reinsurer and the insured, although it is competent for the reinsurer by the contract to assume direct liability to the insured.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. § 1817; Dec. Dig. &wkey;684.]
    4. Insurance <&wkey;679 — Reinsurance — Contract — Construction—Parol Evidence.
    A contract of one insurance company to indemnify another against loss upon certain bonds executed by it upon stipulated conditions as to calculation of premiums to be paid it by the first insurer, expressly providing that “said company undertakes to reinsure from” a certain date, is by its express terms a contract of reinsurance, creating no privity between the re-insurer and the insured.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1811, 1812,1818, 1819; Dec. Dig. &wkey;679.]
    5. Evidence <&wkey;448 — Parol Evidence — Reinsurance Contract.
    A contract of reinsurance being unambiguous, parol evidence to show an intention to contract for the benefit of insured, was inadmissible.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 2066-2082, 2084; Dec. Dig. <&wkey; 448.]

      Appeal from District Court, Dallas County; E. B. Muse, Judge.
    Action by the Stein Double Cushion Tire Company, as assignor, for the use and benefit of the Mohawk Rubber Company, and the said Mohawk Rubber Company in its own behalf, against the William T. Fulton Company and the Southwestern Surety Insurance Company. From a judgment against defendants and in favor of the defendant Insurance Company against its codefendant, and orders overruling a motion for new trial, the defendant Insurance Company appeals.
    Reversed and judgment for appellant rendered.
    See, also, 159 S. W. 1013.
    John T. Suggs, of Denison, and 6. D. Hunt, of Dallas, for appellant. Davis, Johnson & Golden, of Dallas, for appellees.

      writ of error pending in Supreme Court.

   TALBOT, J.

The appellee Stein Double Cushion Tire Company, hereinafter referred to as the Stein Company, as assignor, for the use and benefit of the Mohawk Rubber Company, assignee, and the said Mohawk Rubber Company in its own behalf, brought this suit against the Wm. T. Fulton Company, hereinafter referred, to as the Fulton Company, and the appellant, Southwestern Surety Insurance Company, hereinafter called Surety Company. The plaintiffs alleged, in substance, that the defendant Fulton Company purchased certain goods from the plaintiff Stein Company, in accordance with a consignment or commission contract entered into between the said Fulton Company and the Stein Company, but that there was a default in the payment of the purchase price of same. It was further alleged that, to insure the faithful performance of said consignment contract, a surety bond in favor of the Stein Company was executed by the Fulton Company, as principal, and the Texas Surety & Insurance Company, as surety, and that thereafterwards the surety bond was reinsured by the defendant Surety Company, and that thereby the Surety Company became liable to the Stein Company for the purchase price of said goods. The Texas Surety & Insurance Company was not made a party to the suit. The defendant Fulton Company in its answer, in addition to a general denial, pleaded that the alleged consignment contract sued on by plaintiffs was in violation of the antitrust laws of the state of Texas, and void, and by plea in reconvention asked for damages against the Stein Company for an alleged failure on its part to supply the Fulton Company with such goods as the latter needed in the business, and the consequent injury thereto. The defendant Surety Company in its answer, in addition to a general denial, specially denied that it had become bound or liable to plaintiffs on account of the said reinsurance contract, or that there was any privity between it and plaintiffs. It admitted the execution of a reinsurance contract in favor of the Texas Surety & Insurance Company, but denied that under the terms of said contract it was liable to any one other than the said Texas Surety & Insurance Company. It further pleaded, in like manner as its code-fendant, Fulton Company, that the alleged consignment contract was void, as being in violation of the anti-trust laws of the state of Texas, and, further, that all contracts collateral thereto were also void. It further pleaded that the plaintiff Stein Company was a foreign corporation, doing business in Texas without a permit, and that the plaintiff Mohawk Company derived its rights, according to plaintiffs’ pleadings, from the said Stein Company, and for that reason the plaintiffs should not be permitted to maintain their suit. By' a special plea over the Surety Company asked, in the event plaintiffs should recover in any amount against it, that it have judgment against its code-fendant, Fulton Company, for a like amount, with its costs and attorney’s fees. A trial was had, and the case submitted to a jury upon special issues. Upon the jury’s findings a judgment was rendered in favor or the plaintiff Mohawk Rubber Company against both defendants, for the sum of $3,202.64, with a judgment over in favor of the defendant Surety Company against its codefendant, Fulton Company, together with an attorney’s fee of $470, upon payment of the judgment against it, and in favor of both defendants as against the plaintiff Stein Company. Motions for new trial were filed by both defendants. These motions were overruled by the trial court, and the appellant, Surety Company, alone perfected an appeal.

The case is before this court for the second time. Stein Double Cushion Tire Co. v. Wm. T. Fulton Co. et al., 159 S. W. 1013. The suit was originally instituted by the Stein Company, a private corporation of the state of Ohio, with its principal office and place of business in the city of Akron in said state, to recover the sum of $2,202.-64, alleged to be due on account for goods sold or delivered to the defendant Fulton Company under the written contract above referred to, and entered into between said parties on the 1st day of August, A. D. 1910. This contract is set out in the opinion of the court published in 159 Southwestern Reporter, page 1013, and need not, we think, be repeated in this opinion. The defendant Fulton Company, in consideration that the Stein Company should sell to it the goods agreed to be sold or delivered under the terms of the said written contract, executed and delivered to said company, in accordance with the terms of said contract, a bond in the sum of $5,000 with the Texas Surety & Insurance Company, a corporation of the state of Texas, as surety, conditioned that the said Fulton Company should do and perform all things required of it by said contract, and should, in all things, faithfully and honestly comply with and fulfill all the terms and conditions of said contract. This bond was executed for a period of 12 months, from the 15th day of December, A. D. 1910, to the 15th day of December, 1911, and provided that on the latter date all liability under it should cease and terminate. On March 7, 1911, the appellant, Surety Company, and the said Texas Surety & Insurance Company, entered into a reinsurance contract, whereby the appellant, Surety Company, reinsured the Texas Surety & Insurance Company against any loss or losses “in those certain lines of surety bonds known in the office of the said the Texas Surety & Insurance Company, as consignee bonds, freight bonds, liquor bonds, malt .license bonds, fidelity bonds, and miscellaneous bonds aggregating $2,278,306.44. Among the bonds so reinsur-ed is the bond executed by the Fulton Company, with the said the Texas Surety & Insurance Company as surety, to secure the faithful performance by the said Fulton Company of the said contract entered into between it and the Stein Company, August 1, 1910. The reinsurance was upon the following terms and conditions, namely:

“The unexpired term of each of said bonds shall be calculated as a fractional part of the year and at the rate of so much per annum in each case respectively as set opposite the number and name of each in the extreme right-hand column, said extreme right-hand column being headed ‘Premium,’ as will appear in said attached exhibit, and the consideration to be paid by said Southwestern Surety Insurance Company shall be the amount of any unearned premium calculated upon the terms so set out, less a commission to the said the Texas Surety & Insurance Company of thirty-five (35%) per cent, of said amount. Said Southwestern Surety Insurance Company hereby undertakes to re-insure from said date of February 25th, 1911, and a statement of the amount due in each case shall be calculated by said Southwestern Surety Insurance Company as above provided and charged to said the Texas Surety and Insurance Company, and shall be by the said the Texas Surety and Insurance Company remitted from its office in San Antonio, Texas, not later than March 20, 1911. If required by the Texas Surety & Insurance Company the said Southwestern Surety Insurance Company shall furnish its original bond in any case or cases for substitution in place of said bond of the Texas Surety & Insurance Company now outstanding and hereby reinsured, and if required by the Texas Surety & Insurance Company the said Southwestern Surety Insurance Company shall reimburse the Texas Surety & Insurance Company the amount of the unearned premium on any of the above bonds, less the thirty-five (35%) per cent, commission allowed the Texas Surety & Insurance Company and figured on the .unearned premium returned.”

The contract entered into between the Stein Company and the Fulton Company, under which the items of merchandise constituting the account sued on were sold and delivered, was attached to and made a part of the plaintiff’s original petition, and upon the first trial in the district court a general demurrer and special exceptions urged by the defendants were sustained on the ground that said contract was in violation of the anti-trust laws of this state. This ruling of the district court was by this court' reversed, and the cause remanded. Stein Double Cushion Tire Co. v. Wm. T. Fulton Co. et al., supra. Before the trial was ha'd which resulted in the judgment from which the present appeal is prosecuted the Stein Company sold, transferred, and assigned all of its claims, rights, and demands, including the claim involved in this controversy, to • the said Mohawk Rubber Company, a private corporation of the state of Ohio, and by an amended petition sought to prosecute the suit for the use and benefit of the said Mohawk Rubber 'Company, and in addition thereto said company, by sáid amended petition, was made a party plaintiff to the suit.

Assignments1 of error, to the effect that the trial court erred in overruling defendant’s special exception to the plaintiff’s petition because it appeared from the allegations of said petition that the plaintiff Stein Company, through whom the plaintiff Mohawk Rubber Company claims, was a foreign corporation and had not secured a permit to do business in this state, and erred in entering judgment against appellant, because the contract between the Stein 'Company and the Fulton Company was in contravention of the anti-trust laws of this state, will be overruled. For the reasons set forth in our opinion on the former appeal of this case we held the contract in question should be construed to be one of consignment and not one of sale; that the delivery of the goods, for the value of which this suit is brought, under said contract, constituted an interstate commerce transaction, and hence our antitrust laws and laws requiring a foreign corporation to obtain a permit to do business in this state had no application. The question, it is true, arose on the former appeal upon the trial court’s action in sustaining demurrers to the plaintiff’s petition, but we do not believe the facts in evidence on the trial, resulting in the judgment now appealed from, are materially different from those alleged in that petition.

The main question now presented is whether the appellees can maintain this action by virtue of the reinsurance contract entered into between the Texas Surety & Insurance Company and the appellant, Southwestern Surety Insurance Company. The decision of this question involves and depends upon a determination of the further question whether the reinsurance contract is strictly one of reinsurance, or one in which the appellant assumed the liabilities of the Texas Surety & Insurance Company. If the reinsurance agreement was strictly a reinsurance contract, then the appellees have no cause of action against the appellant by reason thereof, but if said agreement was more than a mere contract of reinsurance and the appellant thereby assumed the liabilities of the reinsured, the Texas Surety & Insurance Company, then the right of appellees to institute and maintain this suit cannot, under the weight of authority, be questioned.

We find that the term “reinsurance” has a well-defined meaning. It is a contract of indemnity to the reinsured, and is— “insurance by the first insurer of the whole or some part of the interest in the risk created by his contract of insurance.”

It is otherwise defined as:

“The contract that one insurer makes with another to protect the first from the risk he has already assumed.” Ruohs v. Traders’ Fire Ins. Co., 111 Tenn. 405, 78 S. W. 85, 102 Am. St. Rep. 790.

In Appeal of Goodrich, 109 Pa. 529, 2 Atl. 211, it is said:

“Reinsurance is properly applied to an insurance effected by one underwriter with another, the latter wholly or partially indemnifying the former against the risks which he has assumed; that is to say, after an insurance has been effected, the,insurer may have the subject of insurance reinsured to him by some other. There is, in such case, however, no privity between the original insured and the reinsurer, the latter is in no respect liable to the former, as a surety or otherwise; the contract of insurance and of reinsurance being totally distinct and disconnected. * * * Even if the insurer fail, or become insolvent, so that his insured receives only, a dividend, however small, the reinsurer can gain nothing by this, but must pay the amount of the loss to the first insurer.”

This language is quoted with, approval in David Bradley & Co. v. Brown, 78 Neb. 836, 112 N. W. 331, and accompanied with the following remarks:

“Where an insurance company has written a policy and afterwards causes itself to be rein-sured, and after the loss of the property insured such company becomes insolvent, the person originally insured has no equitable lien upon the sum of money due on the part of the rein-surer, but the fund belongs to all the creditors of the insolvent company ratably. * * * There is no privity between the insured and the rein-surer, and any sum recoverable by the insurer from the reinsurer is an asset of his estate, liable to the claims of his general creditors, and not subject to any specific lien or charge in favor of the insured.”

So the general rule that the liability of the reinsurer is solely to the reinsured, and the party originally insured has no right of action against the reinsurer upon the contract of reinsurance is well established. But while such is the general rule, it is clearly— “competent for the reinsurer to make the reinsurance contract inure directly to the benefit of the party originally insured, and, in jurisdictions where a third person is allowed to maintain an action on a contract made for his benefit, he may, in such a ease, recover directly from the reinsurer.”

This is well illustrated by the cases of Shoaf v. Palatine Ins. Co., 127 N. C. 308, 37 S. E. 451, 80 Am. St. Rep. 804; Johannes v. Phenix Ins. Co., 66 Wis. 50, 27 N. W. 414, 57 Am. Rep. 249, cited by appellees, and others. In Shoaf’s Case the reinsuring company agreed to assume all liabilities under any outstanding policies of the reinsured then existing, and on any policy that might be ' written thereafter by the reinsured, for the benefit of and under the direction of the re-insuring company, and the reinsuring company assumed all expenses and taxes connected therewith, and all of said risks and policies were reinsured by the Palatine Insurance Company, the reinsurer. The Supreme Court of North Carolina held that this contract inured to the benefit of policy holders, and that they could maintain suits upon it against the reinsurer. In Johannes v. Phenix Ins. Co., the contention was that the contract between the two companies was confined strictly to them, and that the plaintiff, under his policy, had no privity in the contract, and could not maintain an action thereon against the reinsuring company; in other words, that the contract was strictly • one of reinsurance, and not made for the benefit of policy holders. But the court held that the contract was something more than a reinsurance and, after stating the terms of the contract, said:

“It seems to us that by the terms of the contract, as alleged, the Phenix, in effect, thereby assumed the risks covered by each policy, and" agreed to pay any loss arising under each policy.”

And for this reason the court held the policy holder could maintain the suit.

The case of Spann v. Cochran, 63 Tex. 240, is not in point, and the cases just discussed are the principal ones relied upon by the appellees to show their right to maintain this action against the appellant, but we are of: the opinion the facts of those cases are so materially different from the facts in the present case they cannot be regarded as authority for such right. The contract of reinsurance here involved is unambiguous, and appellant, by its terms, did not agree to assume the bond obligation of the Texas Surety & Insurance Company to the appellee Stein Company. The contract by its terms is clearly one of ordinary reinsurance for the-sole benefit of the Texas Surety & Insurance Company, and, being unambiguous, parol evidence to show that the intention was to contract for the benefit of the appellees was inadmissible. Am. & Eng. Enc. of Law, p. 254. There appears, however, to have been some evidence introduced with a view of showing such intention, but it was not of sufficient probative force, even if admissible, to warrant a finding that such was the intention of the parties. The reinsurance contract, as shown in our statement, reinsured the Texas-Surety & Insurance Company against any loss or losses, in certain lines of surety bonds named in said .contract, among them being the bond executed by the Fulton Company with the Texas Surety & Insurance Company as surety to secure the faithful performance, on the part of the Fulton Company, of the contract entered into between. it and the Stein Company August 1, 1910. The reinsurance was upon the following terms and conditions, to wit:

“The unexpired term of each of said bonds shall be calculated as a fractional part of the year and at the rate of so-much per annum in each case respectively as set opposite the number and name of each in the extreme right-hand column, said extreme right-hand column being headed ‘Premium,’ as will appear in said attached exhibit, and the consideration to be paid by said Southwestern Surety Insurance Company shall be the amount of any unearned premium calculated upon the terms so set out, less a commission to the said the Texas Surety Insurance Company of thirty-five (35%) per cent, of said amount. Said Southwestern Surety Insurance Company hereby undertakes to re-insure from said date of February 25, 1911, and a statement of the amount due in each case shall be calculated by said Southwestern Surety Insurance Company as above provided and charged to said the Texas Surety & Insurance Company, and shall be by the said the Texas Surety & Insurance Company, remitted from its office in San Antonio, Texas, not later than March 20, 1911.”

This contract, by its express terms, is one of reinsurance strictly, whereby the appellant merely agreed to reinsure the Texas Surety & Insurance Company, against any loss occurring after the date therein named upon bonds then in existence upon which the Texas Surety & Insurance Company was bound as surety, and is subject, it occurs to us, to no other interpretation. The appellant neither expressly nor impliedly assumed, in the event of loss, the payment of the bonds mentioned in the contract to the obligee therein. It is true the contract stipulates that if required by the Texas Surety & Insurance Company the appellant, Surety Company, would “furnish its original bond in any case or cases for substitution in place of said bond of the Texas Surety & Insurance Company now outstanding and hereby reinsur-ed,” etc., but it does not appear that appellant was ever called upon to, or did, perform this part of the contract. The case is, in important respects similar to the case of Vial v. Norwich Union Fire Ins. Society, 257 Ill. 355, 100 N. E. 929, 44 L. R. A. (N. S.) 317, Ann. Cas. 1914A, 1141, in which the cases of Shoaf v. Palatine Ins. Co. and Johannes v. Phenix Ins. Co., supra, and other cases, are reviewed and distinguished, and in which the contract therein involved was held to be strictly of reinsurance for the sole benefit of the indemnity company. Likewise, in the instant case we hold that the contract here in question was one of ordinary reinsurance for the sole benefit of the said Texas Surety & Insurance Company; that it created no privity whatever .between the appellant and appellee Stein Company, and hence neither that company nor the Mohawk Rubber Company has any right of action by reason thereof against the appellant.

The views expressed render it unnecessary to consider the assignments of error not mentioned. Some of them involve the same legal propositions already discussed, and the other questions raised become immaterial in view of the above holding.

The judgment of the court below against appellant is reversed, and judgment here rendered in its favor.

Reversed and rendered.
      <@=^>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: RAINEY, O. J.

text:
    HORTON v. LEE.
    (No. 7446.)
    (Court of Civil Appeals of Texas. Dallas.
    Nov. 27, 1915.
    Rehearing denied Dec. 24, 1915.)
    1. Courts <&wkey;169 — Jurisdiction—Amount in Controversy.
    The county court has jurisdiction of an action upon a note for $190, which provided for attorney’s fees of 10 per cent, in case of suit, the total sued for being therefore in excess of $200.
    [Ed. Note. — For other cases, see Courts, Cent. Dig. §§ 413-425, 428-436, 443, 456, 458, 465; Dec. Dig. <&wkey;>169.]
    2. Landlord and Tenant <&wkey;209 — Lien for Rent — Conversion op Crop by Subtenant.
    A subtenant who converts the crop is liable to the original landlord for the value thereof to the extent of the rent due him though such subtenant has paid the rent owing to his immediate landlord.-
    [Ed..Note. — For other cases, see.Landlord.and Tenant, Cent. Dig. §§ 832-834; Dec. Dig. &wkey;> 209.J
    3. Action &wkey;>50 — Joinder op Causes op Action.
    Where a tenant gives a note for rent, and subsequently subleases the land, and the subtenant converts the crop, it is proper to join him in a suit to recover on the note and to foreclose the landlord’s lien and to recover from the subtenant the value of the crop converted.
    [Ed. Note. — For other cases, see Action, Cent. Dig. §§ 511-547; Dec. Dig. &wkey;50.]
    4. Landlord and Tenant <&wkey;209 — Subtenants — Conversion op Crops — Consent to Sublease t
    A subtenant is liable to the original landlord for the value of crops converted to the extent of the rent due such landlord, though such landlord consented to the sublease.
    [Ed. Note. — For other cases, see Landlord and Tenant, Cent. Dig. §§ 832-834; Dec. Dig. &wkey;> 209.]
    5. Landlord and Tenant &wkey;>254 — Landlord’s Lien — Time—Waiver.
    Under Rev. St. 1911, art. 5477, giving the landlord a lien for rent due on crops removed from the premises for one month after such removal, failure to foreclose the lien within one month waived it, so that it was error for the court thereafter to foreclose it.
    [Ed. Note. — For other cases, see Landlord and Tenant, Cent. Dig. §§ 986, 1034-1044; Dec. Dig. <s&wkey;254.]
    Appeal from Rockwall County Court; J. W. Reese, Judge.
    Action for rent and foreclosure of landlord’s lien by Mrs. J. A. Lee against H. Horton. From a judgment for the amount of the rent and of foreclosure of the landlord’s lien, defendant appeals.
    Reversed as to the foreclosure, and judgment for defendant thereon rendered.
    H. M. Wade, of Rockwall, for appellant. A. H. Mount, of Dallas, for appellee.
   RAINEY, O. J.

On September 27, 1912, J. A. Lee leased certain agricultural land to J. B. Sears for three years, to wit, 1913, 1914, 1915, Sears agreeing to pay $190 for each year and for which he executed his three promissory notes for $190 each. The first note for the 1913 rent was paid. J. A. Lee then died, leaving surviving him his widow, appellee. J. B. Sears sublet to H. Horton the land for 1914 and 1915. Mrs. Lee now sues to recover on the rent note for 1914, making J. B. Sears the maker and H. Horton subtenant, who she claims is liable for wrongfully removing the products from the rented premises, and asks a foreclosure of the landlord’s lien on five bales of cotton. Horton answered that Sears sublet said land to him without objection of Lee, and plaintiff is estopped from questioning the legality of same; that he has paid Sears the rent for 1914 and 1915, by giving his notes which have been transferred to innocent holders, etc.; that if liable at all, he is liable on account and not on said note, as he did not sign it, nor assume it; that said cotton has been removed from said rented premises for more than 30 days before the distress warrant was levied, and the landlord’s lien is lost.

1. Horton suggests a misjoinder of parties as to him, and that the court had no jurisdiction as to the amount due for rent, the amount due being less than $200. The note sued on was for $190, with 10 per cent, attorneys’ fees, if sued on, which makes the amount more than $200, and is within the jurisdiction of the county court. The note was for rent of land secured by the crops raised on the land for 1914. Horton converted the cotton and made himself liable for the rent due for 1914, to the extent of the value of the cotton raised, if necessary, to pay amount of rent due, and was therefore liable with Sears for the same, which equaled the amount due on the note, and it was proper to join him in the same suit.

2. Horton complains of the court for sustaining objections to his proving that Lee, deceased, consented to Sears subletting to him the land. We see no harm that could have resulted if it be conceded that such ruling was error, as his condition would have been the same, he being a subtenant, and as such he legally knew of the landlord’s rights by reason of the lease to Sears. As said in Forrest v. Durnell, 86 Tex. 647, 26 S. W. 481:

“Under such circumstances, whatever contract an assignee or undertenant may make with the original lessee, he must be understood impliedly to assume towards the lessor the relation of tenant, and to consent that the lien given by statute shall exist. * * * If the landlord consents expressly or impliedly to the occupation of his land by an assignor ox undertenant, the relation of landlord and tenant necessarily exists between him and such person; for under the statute such holdings are illegal without such consent.”

It seems from the foregoing that Horton made himself a tenant, and, having converted to his own use the cotton raised on the rented premises, he became liable for the rent.

3. A landlord has a lien on all products raised on the rented premises, which lien exists until it has been removed from the rented premises for one month. There had been no effort made to foreclose the lien on the cotton for the period of one month after it had been removed from the premises; therefore the lien was lost, and it was error to render judgment foreclosing a lien. R. S. 1911, art. 5477; Childress v. Harmon, 176 S. W. 154.

The case of Gaw v. Bingham, 107 S. W. 931, relied on by appellee in support of this judgment, is based upon a state of facts different from those in this case. There the cotton had been removed for over one month, but it had been stored on the premises of the landlord, and it was practically in his possession.

The judgment of foreclosure of lien is reversed and rendered, and it is affirmed in all other respects.
      <&wkey;>For other eases see same topic and KEY-NUMBER in ail Key-Numbered Digests and Indexes