author: HARPER, C. J.

text:
    TOYAH VALLEY IRR. CO. v. WINSTON.
    (No. 383.)
    (Court of Civil Appeals of Texas. El Paso.
    Feb. 25, 1915.
    Rehearing Denied March 18, 1915.)
    1. Waters and Water Courses <§=>254 — Irrigation — Injunction—Burden oe Proof.
    In an action to enjoin an irrigation company from refusing to contract to furnish water to his lands for a reasonable compensation, the burden is upon plaintiff to establish, not only that his lands are riparian to the stream, but that there is water in the stream to which he is lawfully entitled, an'd to establish that his lands have a priority of claim for water over other lands to which the company has contracted to deliver water.
    [Ed. Note. — For other cases, see Waters and Water Courses, Cent. Dig. § 311; Dec. Dig. <§=>254.]
    2. Judg-xient <§=>251 — Requisites — Support in Pleading.
    In an injunction against an irrigation company, where plaintiff did not contend that he had a contract with the company to deliver water, but contended that the company had made 50-year contracts with others at a certain rate per acre, the pleadings did not sustain a mandatory injunction requiring defendant to furnish water at a given rate for 50 years.
    '[Ed. Note. — For other cases, see Judgment, Cent. Dig. § 437; Dec. Dig. <§=>251.]
    3. Waters and Water Courses <&wkey;257 — Irrigation Company — Contracts—Statutes.
    Rev. St. 1911, art. 4991, declaring the waters of streams to be the property of the state, which may be acquired by appropriation for the uses provided therein; article 4994, declaring irrigation to be such a use ;• article 5002, authorizing the formation of irrigation companies; article 5002a, Vernon’s Say les’ Ann. Civ. St. 1914, authorizing such companies to make contracts for water with those entitled to receive it; article 5002b, naming the persons entitled to use water; and article 5002c, prohibiting discrimination against users and providing that if the company and a person possessing land contiguous to its canals fail to agree upon the price for a permanent water right, or for the use or rental of water to irrigate land, the corporation, if having sufficient water, shall furnish the necessary water to such owner at a reasonable price — are intended to protect owners riparian to such streams in their absolute right to water at a reasonable price, and no one should pay more or less, even though by contract, unless the local conditions might make it more expensive to deliver water, and if the company’s contract prices result in discrimination to others entitled to water the court, at their suit, would require that they be furnished water at a reasonable price.
    [Ed. Note. — For other cases, see Waters and Water Courses, Gent. Dig. § 312; Dec. Dig. <§=>257.]
    4. Waters and Water Courses <§=>257 — Injunction — Damages.
    In injunction to compel an irrigation company to furnish water for plaintiff’s land, where the jury determined that $1.50 per acre was a reasonable price for the year in question, and their verdict was supported by the evidence, the judgment would be upheld, though it would not be construed as a holding that that price would be a reasonable charge 'for another year.
    [ICd. Note. — For other cases, see Waters and Water Courses, Cent. Dig. § 312; Dec. Dig. <§=>257.]
    Appeal from- District Court, Reeves 'County; g. J. Isaacks, Judge.
    Action for injunction by W. E. Winston against the Toyah Valley Irrigation Company. Judgment for plaintiff, and defendant appeals.
    Affirmed in part, and reversed in part.
    Ross & Hubbard, of Pecos, and 'Capps, Can-tey, Hanger & Short and Ocie Speer, all of Ft. Worth, for appellant. W. A. Hudson and E. C. Canon, both of Pecos, for appellee.
   HARPER, C. J.

This suit was instituted by W. E. Winston against the Toyah Valley Irrigation Company, alleging that the defendant was a corporation organized under the laws of Texas as an irrigation company for the purpose of constructing, maintaining, and operating canals, ditches, flumes, etc., and of supplying water as a common carrier thereof to all persons entitled to the same for irrigation, and that as such common carrier it was engaged in transporting and furnishing the waters of Toyah creek to all the riparian lands entitled to water from said stream.

That plaintiff was the owner of certain lands riparian to said Toyah creek, and as such owner was entitled to be supplied by the defendant with water from said Toyah creek for the purpose of irrigation. That the defendant company from its organization up to the time of filing this suit, which was October 25,1911, had entered into contracts with various owners of land riparian to Toyah creek, whereby it agreed and bound itself to deliver to such owners 65,340 cubic feet of water per acre per annum for irrigation purposes for the sum of $1.50 per acre per annum. Plaintiff alleges that although his lands are riparian to Toyah creek and, as such, entitled to water for irrigation purposes - from the defendant, and although he has at all times tendered and offered to pay to defendant the sum of $1.50 per acre per annum, for the usual quantity of water, yet the defendant on and after January 1, 1911, has negligently and willfully and persistently refused to carry and deliver to him, or any. of his said lands, any of the water of said creek, except at such times as suited the convenience of defendant. That by reason of defendant’s failure to furnish him water during the year 1911, he lost the profits on a crop of alfalfa and milo maize for want of sufficient water, to his damage $1,780. Plaintiff alleged a willingness to pay defendant the sum of $1.50 per acre per annum, until April 1, 1957, the time for which he alleged defendant had entered into contract to supply to other riparian owners, and prayed for such judgment for his damages for loss of crops, and that his lands be adjudged riparian to Toyah creek and entitled to receive their, appropriate part of Toyah creek for irrigation and domestic purposes, and that defendant company, its successors and assigns, be compelled, by writ of mandatory injunction, to transport and deliver to his said lands the water to which they are entitled, on the same terms, conditions and prices as charged by said company to other persons similarly situated.

The defendant answered first by plea in abatement for want of necessary parties defendant, by general and special exception to plaintiff’s original petition, by general denial, and especially that prior to the year 1911, defendant found it was unable to deliver water through its system of canals to the land claiming the right of water from Toyah creek for the sum of $1.50 per acre per annum, and that to continue to do so would result in great loss to defendant for the reason that said sum' did not constitute an adequate and reasonable charge. That $1.50 per acre per an-num does not furnish defendant company a sufficient revenue from which to defray its operating expenses, fixed charges, and reasonable compensation for the money invested in its said system of canals. That it, therefore, had from and after January 1, 1911, fixed a reasonable sum of $2.50 per acre per annum for furnishing water to customers who thereafter were entitled to and demanded the same. That though the plaintiff was advised of defendant’s said action, he at all times refused to enter into contract with it to pay the said reasonable sum of $2.50 per acre per annum, or to pay the same, but at all times refused to pay the defendant for its services more than the sum of $1.50 per acre per annum. Defendant further answered that it had no means of knowing whether or not the plaintiff’s lands were really riparian to Toyah creek, and that plaintiff, although requested so to do, had at all times refused to furnish the evidence of such fact

The plaintiff interposed an exception to the defendant’s plea in abatement, and on final trial the same was sustained and said ' plea was stricken out. The cause was thereupon submitted to a jury, which returned a verdict on special issue in favor of plaintiff, upon which the court entered judgment for plaintiff in the sum of $169 for damages for loss of crops, and further ordered that a mandatory injunction do issue, commanding the defendant to furnish water to the lands of plaintiff for the sum of $1.50 per acre per annum from and after the date of said judgment to April 1, 1957.

The first assignment is that the trial court erred in striking out, upon motion, the defendant’s plea in abatement which charged that there were other necessary parties without which the issues in the cause cannot finally be determined. The allegations of fact relied on to support the plea are that a number of owners of land, some of which land is riparian and some not, claim to have the right by adverse user or prescription, to all the waters of Toyah creek, naming them. That defendant had, prior to the time plaintiff applied for water, executed contracts to convey water to various lands other than those claiming the water by prescription. That it is necessary to judicially determine whether the said lands are entitled to all the waters of the said creek, in order to determine whether in fact this plaintiff is entitled to any water. That in order to determine this, the parties so named are necessary and indispensable.

The burden is upon the plaintiff to establish not only that his lands are riparian to the stream, but also that there was water in the stream to which he is lawfully entitled, for if all the waters have been contracted to other parties, or lawfully appropriated by prescriptive right, or. otherwise, prior to the time plaintiff made application to the company, then, clearly, he is not entitled to a decree in his favor for water unless he can establish that his lands have a priority of claim for water over some other lands to which the defendant has contracted to deliver water, and the proof of either or all of these facts can be made without such claimants being made parties to this action. No reason occurs to us why the plaintiff could not establish that the waters to which others were, legally entitled by prescription and by prior contract did not constitute the whole or such portion of the waters as to preclude him from receiving the amount demanded or a portion of it, without making additional parties, but this question is settled by the agreement between the parties, viz.:

“It is agreed between the _ plaintiff and defendant that the lands described in plaintiff’s petition is * * * riparian to Toyah creek, and is entitled to its proportionate share, of the water flowing therein, and that if plaintiff had had a contract to receive water for the year 1911, he would have received as much as 18 inches of water during said year.”

The second assignment asserts that the plaintiff’s petition states no cause of action, therefore the court erred in overruling general demurrer. The answer to this is that the allegations in the pleadings are sufficient, as quoted in the original statement in this opinion, as to that portion of the judgment which by this opinion is held to be valid.

The third assignment charges that the court erred in overruling defendant’s motion for instruction for defendant. This motion was properly overruled, as is disclosed by this opinion, as to the issues required to he submitted under the pleading and proof.

The fourth is that the findings of the jury upon special issues submitted are contradictory of and opposed to the undisputed testimony. The two questions submitted and the answers thereto are as follows:

No. 1. Is $1.50 per acre per annum a reasonable amount for the- defendant company to charge to carry water to plaintiff’s land?

No. 2. What would have been the difference between the reasonable cost of preparing plaintiff’s land, planting, cultivating, watering, harvesting, and marketing his crops and the reasonable market value of the crops he would have raised during the year 1911, had he been furnished by the company with 18 inches of water?

The verdict is: No. 1 is answered in the affirmative. No. 2: “We find the difference to be $160, in favor of plaintiff.” The evidence is conflicting, but there is sufficient in favor of plaintiff’s contentions to support the verdict upon these issues.

The fifth is that the decree of the court entered herein is unwarranted by the law and the facts. The judgment entered upon the questions and answers just quoted as applicable to this assignment reads:

* * * It is therefore ordered, adjudged, and decreed * * * that W. E. Winston do have and recover from the defendant * * * the sum of $160 and costs. ⅜ * *
“It is further ordered that * * * a mandatory injunction issue, and the same is hereby issued, commanding the defendant * * ⅜ to furnish water to the lands described * * * at and for the sum of $1.50 per acre per annum * * * from this date to April 1, 1957.
“It is further ordered, adjudged, and decreed by the court that said water shall be furnished in the same amount and in the same manner as same is now furnished to other persons holding water right contracts from said defendant.”

Among other reasons given, are:

“That it deprives the defendant of the right to contract with the plaintiff in the future. * * * It obligates the defendant, without in any way enjoining any duty upon plaintiff to take and pay for same. * * * That the decree compels defendant to deliver water at a price which is discriminatory against the public generally.”

By article 4991, Revised Civil Statutes 1911, the waters of such streams are declared to be the property of the state, and the right to the use thereof may be acquired by appropriation in the manner and for the uses and purposes provided in the act. Article 4994 provides that irrigation is one of the purposes. Article 5002 authorizes the formation of corporations such as defendant. Article 5002a authorizes such companies to make contracts for water with those who are entitled to receive it. Article 5002b names the persons who are entitled to use water. Article 5002c provides that there shall be no discrimination against users, and said last article further provides that if the corporation controlling such water and the person who holds a possessory right to land adjoining or contiguous to such canal fail to agree upon a price for a permanent water right, or for the use or rental of the necessary water to irrigate such land, such corporation shall, nevertheless, if it had control of water not contracted to others, furnish the necessary water to such person to irrigate his lands at such prices as shall be reasonable and just, and without discrimination.

The counter proposition of appellee is that where a judgment conforms to the pleadings and the evidence and is definite and certain in its terms, it is sufficient. It is fundamental that a judgment must be supported by the pleadings. Dunlap v. Southerlin, 63 Tex. 38; Flores v. Smith, 66 Tex. 115, 18 S. W. 224. It will be noted that plaintiff does not contend that he had a contract with the defendant to deliver water, either in his pleadings or evidence, but so far as his pleadings reveal his contentions, his right to have the court decree a 50-year contract for water at $1.50 per acre is based entirely upon the allegation that it had made similar contracts with others, and it is sufficient to say that a decree for a mandatory injunction requiring. defendant to furnish water at a given price for 50 years cannot be sustained upon such pleadings.

The courts cannot by decree require a party to do that which he has not contracted to do, nor the law requires him to do. The statutes quoted above require irrigation companies such as defendant to deliver water to those persons who are entitled to it, and that contracts may be made in such cases, but there is no law that contracts shall be made. It is provided that contracts may be made, provided the parties can agree upon a reasonable price, and in the absence of a contract by agreement as to price between the parties, then the company is nevertheless to furnish water to such persons at a reasonable rate. The purpose of these statutes evidently is to protect all persons who own lands riparian to such streams in their absolute right to water as well as that they may all have it at a reasonable price, and that no one should pay more or less than another, even though by contract, unless the local conditions, such as the location of the land to be watered, made it more or less expensive to put the water on it. It would seem that time and circumstance might change conditions to such an extent that the price for delivery of water would be increased or decreased.

So, even in the case of contracts, if the price fixed, in time, resulted in discrimination as to other parties entitled to water, that is, if the company by mistake contracted with certain persons at such a price as that it resulted in others being compelled to pay exorbitant rates in order to obtain water, while the courts might not relieve the parties to such contracts, they undoubtedly would at the suit of the others right the matter so that all might be furnished water at a reasonable price.

The jury having determined that $1.50 per acre was a reasonable price for the year in question, and their verdict being supported by evidence, ■ the judgment for damages must be upheld. But this is" not to be construed to be a holding that such is or would be a reasonable charge for another year, but each year, the price per acre, in the absence of contracts, must be controlled by the conditions and circumstances attendant upon delivery.

The judgment of the trial court for $160 is affirmed and here reversed and rendered as to that portion which declares that said water shall be furnished in the same amount and in the same manner as same is now furnished to other persons, etc. And the injunction is dissolved.

Affirmed in part and reversed and rendered in part.
      <&wkey;For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: MOURSUND, J.

license: Public Domain

text:
    O'CONNOR et al. v. THETFORD.
    (No. 5420.)

    (Court of Civil Appeals of Texas. San Antonio.
    Feb. 17, 1915.
    Rehearing Denied March 17, 1915.)
    1. Deeds ®=s>151 — Illegal Condition Subsequent — Effect.
    A conveyance of a fee-simple estate subject to an illegal condition subsequent conveys an absolute fee-simple estate free of the condition.
    [Ed. Note. — For other cases, see Deeds, Cent. Dig. § 481; Dec. Dig. <®=»151.]
    2. Deeds <®=»149 — Conditions Subsequent-Restraint of Alienation.
    Where a deed provided that grantee should hold a fee-simple estate in the land subject to the condition subsequent that title should revest in the grantor or his heirs in case of any attempted alienation during the lifetime of the grantee, such condition was void.
    [Ed. Note. — For other cases, see Deeds, Cent. Dig. §§ 451, 479; Dee. Dig. <8=»149J
    Appeal from District Court, Frio County; J. F. Mullally, Judge.
    Action by John D. Thetford against Mary Ellen O’Connor and others. Judgment for plaintiff, and defendants appeal.
    Affirmed.
    Jas. McDonald and C. F. & C. C. Carsner, all of Victoria, for appellants. Swearingen & Ward, Jno. H. Bickett, Jr., McFarland & Bewriglit, and William H. Kennon, all of San Antonio, for appellee.

       Writ of error pending in Supreme Court.

   MOURSUND, J.

Appellee sued appellants, as heirs1 at law of Thos. M. O’Connor, to remove cloud from the title to about 1,500 acres of land in Frio county. The suit involves the construction of a deed, which, omitting the description of the land, reads as follows:

“State of Texas, County of Victoria.
“Know all men by these presents, that I, Thomas M. O’Connor, of the county of Victoria, in the state of Texas, in consideration of the sum of one dollar to me in hand paid, and the regard and esteem I entertain toward the grantees hereinafter named, have given, granted, sold and conveyed, and by these presents do grant, give, sell and convey unto John D. Thet-ford, of Frio county, Texas, the following described body of land, situated in Frio county, Texas, and thus by metes and bounds described: [Description omitted.] To have and to hold all and singular the above described tract of land unto him, John D. Thetford, Ms heirs and their assigns forever, subject however to the full effect of the condition subsequent hereinafter set out. As a controlling condition of this conveyance, it is now further declared to be the intention and purpose of the grantor by the present conveyance, which conveyance is now expressly declared to be a deed of gift, to prevent the alienation, either voluntary or involuntary by said grantee named of all or any portion of the premises hereby conveyed and for the purpose of carrying out said intention, and also in the exercise of the right of the grantor to impose a condition arbitrary or otherwise, upon a deed of gift, it is now expressly declared that this entire deed and all estate passed’ thereby is expressly subject to the following condition subsequent, to say: That any alienation, voluntary or otherwise or any attempt at alienation, of all or any portion of said premises on the part of said grantee herein named, shall have the force and effect to at once terminate all estate passed to said grantee under this conveyance and shall cause all estate hereby conveyed to immediately revest in the grantor, Thomas M. O’Connor, if living, or if dead, in his heirs and legal representatives. It is further provided that the expression, attempt at alienation, as used above, shall cover and include any species of attempted alienation including attempted conveyance, mortgage or pledge, and everything short of a mere verbal and futile effort to convey the interest of said attempting alienator.
“Witness my hand at Victoria, Texas, this 22d day of February, 1907. .
“T. M. O’Connor.”

This deed was duly acknowledged on February 23, 1907, and filed for record March 11, 1907.

Appellee contended 'that the provisions in said deed imposing upon him a restraint upon alienation and providing for a forfeiture of the estate granted, and a reversion of said estate to the grantor, his heirs, or legal representatives, were null and void, for tlie following reasons:

“(a) Said deed by its granting clause and by the habendum clause, conveys a full fee-simple title to plaintiff, and the subsequent conditions in said deed in restraint of the alienation of said land and in forfeiture of the estate conveyed are in direct conflict with the granting and habendum clause of same, and are repugnant to the fee granted and intended to be granted.
“(b) That said conditions in said deed, are not only contrary to the Constitution of the state of Texas, but are contrary to public policy and the laws of this state, in unduly tying up and restraining the alienation of land.
“(c) That said conditions in restraint of alienation of said land, if valid, is a covenant which runs with the land and would be binding, not only upon the appellee, but upon his heirs for-evei% so that said land would descend from one generation to another, thus creating a perpetuity, and entailment which violates the Constitution and the laws of this state.”

The ease was tried before the court without a jury, and judgment rendered for plaintiff declaring the covenant in the deed in restraint of alienation to be null and void, and canceling and removing the cloud cast thereby upon plaintiff’s title to the land therein conveyed.

The question upon this appeal is whether that provision in the deed is void which states that upon the alienation or attempted alienation of the land during the lifetime of Thetford the title shall revert to the grantor or his heirs. The deed is plainly drawn, and it is clear that it was not the intention of the grantor to restrain the alienation of the land by Thetford’s heirs, but that it was his intention to have Thetford keep it all his life or it would revert to the grantor or his heirs. It was not his intention to give a less estate than a fee simple, and the language preceding the condition, when considered alone, carries the fee-simple title, but he attached a condition subsequent by means of which he sought to accomplish the purpose of keeping Thetford,from disposing of the land and the Thetford’s creditors from acquiring the same or the proceeds thereof. If the condition is void the deed conveys to Thetford an absolute fee-simple estate. Seay v. Cockrell, 102 Tex. 286, 115 S. W. 1160; Diamond v. Rotan, 121 S. W. 108; White v. Dedmon, 57 S. W. 871; Sprinkle v. Leslie, 36 Tex. Civ. App. 356, 81 S. W. 1018.

The tying up of property was regarded by the common law as an evil, and in order to prevent it two doctrines were established, one that all interests should be alienable, the other that all interests must arise within certain limits, the latter being known as the rule against perpetuities. In this ease we are concerned only with the first doctrine, and the extent to which it exists in this state under the common law which has furnished our rules for construing deeds since its adoption in 1840. It is well settled that a general restraint upon the power of alienation when incorporated in a deed or will otherwise conveying a fee-simple title is void, but authorities differ in construing restraints on alienation for a limited time. One line of authority is to the effect that a restraint upon the alienation of a fee-simple title for a limited period, however brief, is inconsistent with and repugnant to the nature of such an estate, because one of the most important characteristics thereof is the power of alienation. The other class of cases holds a restraint upon the alienation even of a fee-simple title, if for a reasonable time, to be a valid restriction. The cases on this subject have been annotated under the case of Latimer v. Waddell, 119 N. C. 370, 26 S. E. 122, 3 L. R. A. (N. S.) 668. The first rule is the more logical and presents no difficulties such as will be encountered in determining what is a reasonable time. We find that in the cases of Laval v. Staffel, 64 Tex. 372, and Bouldin v. Miller, 87 Tex. 359, 28 S. W. 940, this question was left an open one. In the case of Seay v. Cockrell, 102 Tex. 2S6, 115 S. W. 1160, the court held that a provision in a will to the effect that devisees could not sell during their lifetime the half interest in a building willed to them was void. The court said:

“If the will conveys a fee-simple estate the provision that the devisees shall not sell is clearly void. * * * If it convey a life estate we think the clause restraining its alienation equally void.”

No statement is made whether such conclusion was arrived at on account of adherence to the line of cases first above referred to, or whether it was held as a matter of law under the second line of cases that a, restraint for the lifetime of the grantee was unreasonable.

Some courts which approved the rule that provisions in restraint of alienation for even a limited time are void have upheld provisions which are accompanied by an express statement that the estate will revert to the grantor or pass to others, and have held void provisions which are not accompanied by such a statement. These cases are collated on pages 676 and 677 of vol. 3 L. R. A. (N. S.).

This supposed distinction does not appear to rest upon any sound basis, as is shown by Mr. Justice Hodges in the opinion in the case of Diamond v. Rotan, 124 S. W. 198. In that case a deed was construed ■which had a provision of alienation similar to the one in this case. In fact the clauses are so alike that the same rule of construction must necessarily be applied to both. The court held the condition void which provided for the passing of the title if alienation took place during the lifetime of the grantee. Another ground for sustaining the decision was mentioned, but it was expressly stated that the court did not rest its decision thereon. The Supreme Court denied a writ of error, and a careful examination of the opinion leads us to believe that in so doing it upheld the decision upon the ground on which it was rested by the Court of Civil Appeals. We regard said case and the eases of Seay v. Cockrell and Sprinkle v. Leslie, 36 Tex. Civ. App. 366, 81 S. W. 1018, as settling the question arising in this ease in favor of the correctness of the judgment of the trial court. It occurs to us that no matter which line of cases on the subject of restraints of alienation for a limited period may be adopted by our Supreme Court, the provision in the deed herein considered would be held void. 'If any plausible reasons can be given for contending that a provision restraining the alienation of a fee-simple estate for a few years is not repugnant to the estate granted, such reasons would not be applicable when urged in defense of a provision which prevents the grantee from ever exercising the right of alienation. He would certainly be a poor owner who was required to hold property all his life without the power to sell it. If the reasonableness of the time during which alienation is prohibited be the determining factor, surely the lifetime of the grantee cannot be held to constitute a reasonable time during which he can be deprived of one of the most important characteristics of ownership.

The judgment is affirmed.
      (g^sPor other oases see same topic and' KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    O’CONNOR et al. v. THETFORD.
    (No. 5421.)
    (Court of Civil Appeals of Texas. San Antonio.
    Feb. 17, 1915.
    Rehearing Denied March 17, 1916.)
    Appeal from District Court, Frio County; J. F. Mullally, Judge.
    Action by Robert W. Thetford against Mrs. Mary Ellen O’Connor and others. Judgment for plaintiff, and defendants appeal.
    Affirmed.
    Jas. McDonald and C. F. & C. C. Carsner, all of Victoria, for appellants.
    Swearingen & Ward, Jno. H. Bickett, Jr., McFarland & Lew-right, and William H. Kennon, all of San Antonio, for appellee.
   MOURSUND, J.

This is a companion case to No. 5420, styled v. John D. Thetford, 174 S. W. 680, this day decided by us. A deed similar in every respect to the one therein construed, except that it conveys diffei’ent land, is held by Robert W. Thet-ford, and the trial in the district court was had upon pleadings similar to those in said case No. 5420. The rulings and judgment were the same as those in the other case, and the same questions arise upon this appeal. The judgment is affirmed for the reasons stated in our opinion in said case No. 5420.


author: HALL, J. HALL, J. . HALL, J.

text:
    JONES v. ABERNATHY.
    (No. 673.)

    (Court of Civil Appeals of Texas. Amarillo.
    Nov. 21, 1914.
    On Motion for Rehearing, Jan. 6, 1915.
    On Further Motion for Rehearing, Jan. 23, 1915.)
    1. Railboads <&wkey; 148 — Debts — Consent of Railroad Commission.
    Vernon’s Sayles’ Ann. Civ. St. 1914, art. 6717, vests in the state government the. authority of issuing bonds and other evidences of debt and the execution of all liens and mortgages by railroad corporations, etc., and article 6727 declares that every evidence of debt operating as a lien on the property of a railroad company which shall be made, issued, or sold without a compliance with the chapter shall be void. Held that, where a railroad company executed a note which was transferred to defendant, for which was pledged as collateral notes executed to the railroad company for unpaid stock installments without the consent of the Railroad Commission, the original note was void, and the holder could not thereafter enforce the pledge.
    [Ed. Note. — For other cases, see Railroads, Cent. Dig. § 460; Dee. Dig. <&wkey;>148.]
    2. Bills and Notes <&wkey;375 — Invalidity— Bona Fide Pubchasbe.
    A negotiable instrument issued in contravention of a statute expressly declaring it void is subject to all defenses in the hands of one who otherwise would be a bona fide holder for value.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 971-981; Dec. Dig. i&wkey; 375.]
    3. Pledges &wkey;>7 — Invalidity of Principal Obligation.
    Invalidity of a principal debt destroys the claim of the creditor on collateral securities held for its payment. «
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. § 18; Dec. Dig. &wkey;>7.]
    On Further Motion for Rehearing.
    4. Cancellation of Instruments &wkey;>35 — Railroad Obligations — Cancellation — Parties — Trustees.
    Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 6630, 6631, provide that the directors and managers of a sold-out railroad company, by whatever name they may be known in law, shall be the trustees of the creditors and ¡Stockholders of the company, and may be sued as such, and that no suit pending against the company at the time of the sale shall abate, but same shall be continued in name of the trustees of the sold-out company. Held that, where plaintiffs sued to cancel a stock subscription note, and, pending the suit, the railroad’s roadbed, track, franchises, and charter were sold, and a receiver discharged, it was plaintiff’s duty to have the railroad company’s managers and directors made parties to the suit, and, not having done so, a judgment canceling the note was a nullity so far as it affected the rights of the trustees to recover thereon.
    [Ed. Note. — For other cases, see Cancellation of Instruments, Cent. Dig. §§ 55-64; Dee. Dig. <&wkey;>35.]
    Appeal from District Court, Roberts County; F. P. Greever, Judge.
    Action by D. A. Abernathy against Charles R. Jones to cancel a note and deed of trust. Decree for plaintiff, and defendant appeals.
    Reformed and affirmed.
    Moore & Powell, of Dalhart, and Ltimpkin & Harrington, of Amarillo, for appellant. Crudgington & Works, of Amarillo, for ap-pellee.

       writ of error pending in Supreme Court.

   HALL, J.

Appellee, Abernathy, subscribed to 15 shares of the capital stock of the Enid, Ochiltree & Western Railroad Company, executing his note for $1,532.10, secured by a deed of trust upon certain lands described in his petition. This note was transferred and delivered to the appellant, Charles R. Jones, before maturity thereof, as collateral security for the payment of the $28,000 note purchased by the said Jones of one F. R. Dennis; the said note for $28,000 being the obligation of the said railroad company, dated September 1, 1910. Appellee brought this suit to caucel Ms note and the deed of trust, alleging misrepresentation and fraud on the part of said railroad company in the procurement of said note from plaintiff and failure of consideration. Appellee also alleged that the appellant, Jones, was cognizant of the misrepresentation of the said railroad company at the time he acquired the same; that he was a party to the conspiracy of said railroad company and its agents to procure the execution of the note and deed of trust; that there was a failure of consideration in this; that the note was given with the understanding and agreement that plaintiff should have 15 shares of stock; that the railroad company would build and operate a line of road from Dalhart, Tex., to some point on the Santa FS Railway east of Ochiltree in Ochiltree county near plaintiff’s land in said county, and that the building of said railroad would greatly enhance the- value of plaintiff’s property and benefit plaintiff thereby; that said railroad was not built, and no stock in said corporation was issued to plaintiff. It is further alleged that plaintiff would not have executed his said note in negotiable form but for the. representations on the part of the said railroad company that nearly all of the stock in said corporation had been subscribed, and that stock notes enough had been secured with which to get money to build the road; that they had the money located, and knew where they could get sufficient to build said railroad, and that they were then closing up the few remaining subscriptions, and that those who did not renew and secure their subscriptions would be sued within a few days. Plaintiff alleges further, upon information and belief, that the promoter of said railroad project never had any sufficient financial arrangements at any time for the successful promotion, construction, and operation of said railroad; that, by reason of the sale of the securities, which were placed in the hands of the defendant, Jones, at the time the note in question was turned over to him as security for the $28,-000 note above referred to, and the purchase thereof by the said Jones, amounting to a sum far in excess of the $28,000 above referred to, the said Jones had collected more than the said sum of $28,000 from the collateral which he took to secure the payment of said $28,000 note; that, by reason of said Jones taking said $28,000 note at a discount of $3,000, said transaction was usurious; that the transaction was in violation of the statutes.

Appellant, Jones, answered by general and special demurrers, general and special denial, pleas of estoppel, and by cross-action, seeking judgment upon the $1,532.10, and praying for foreclosure of the deed of trust given by appellee to the railroad company, alleging that said note was indorsed and transferred to him prior to its maturity; that he took the same in good faith without any notice of any defense which plaintiff had or may have had thereto, paying a valuable consideration therefor in due course of trade, and praying for judgment for his dent and foreclosure.

The jury returned a verdict in favor of the plaintiff and against the appellant, Jones, as to the cancellation of the note and deed of trust, and against the defendant, Jones, on his cross-action. Judgment was rendered accordingly.

Appellant requested a peremptory instruction and several special charges, but, by reason of the view we take of the case, it will not be necessary for us to consider the assignments in detail.

The note for $1,532.10 upon which appellant sought to recover by his cross-action was held by him as collateral security to the above-mentioned note for $28,000, which is as follows:

“$28,000. Dalhart, Texas, Sept. 1, 1910.
“One year after date Enid, Ochiltree & Western Railway Company promises to pay to the order of F. R. Dennis, at the First National Bank of Dalhart, Texas, twenty-eight thousand dollars, for value received, with interest at the rate of 10 per cent, per annum from date. Hav? ing deposited with said F. R. Dennis as collateral security for the payments hereof the following notes: [Here follows a list of notes for various amounts, signed by the subscribers to stock, among them appears the $1,532.10 note in controversy] — which said company hereby gives said F. R. Dennis or the legal holder of said notes, authority to collect any or all of said notes, as they mature, holding the money for the said notes collected until the maturity of this note, and also to sell all or any part thereof on the maturity of this note or any time thereafter or before in the event of said securities depreciating in value, at public or private sale, at their discretion, without advertising the same, or giving said company any notice, and to apply so much of the proceeds thereof to the payment of this note as may be necessary to pay the same, with all interest due thereon, and also to the payment of all expenses attending the sale of said collateral security, and in case the proceeds of the sale of the said notes shall not cover the principal, interest, and expenses, said company promises to pay the deficiency forthwith after such sale.
“Enid, Ochiltree & Western Railroad Co.
“By A. E. Weist, Jr., Vice President.
“W. T. Wheatley, Asst. Treas.
“Attest: W. W. Flenniken, Asst. See’y.”
The note bears the following indorsement: “Without recourse. F. R. Dennis.”

There is shown in the record the following stipulation signed by the attorneys, omitting the formal parts:

“In the above cause it is agreed * * * that said railroad company was a Texas corporation, andtthat said railroad company did not procure the consent of the Railroad Commission of the state of Texas to the execution and issuance by said railroad company of note for $28,000, dated September 1, 1910, due one year after its date, payable to F. R. Dennis, signed by said railroad company; neither did said railroad company procure the consent of said Railroad Commission to the execution or issuance by said railroad company of security or liens upon its property to secure the payment of said note.”

Vernon's Sayles’ Civil Statutes, art. 6717, provides:

“Among other things, the power and authority of issuing or executing bonds, or other evidences of debt, and all kinds of stock and shares thereof, and the execution of all liens and mortgages by_ railroad corporations in this state are special privileges and franchises, the right of supervision, regulation, restriction, and control of which has always been, is now, and shall continue to he vested in the state government, to be exercised according to the provisions of this and other laws.”

Article 6727, Id., is:

“Every certificate * * * and every bond and other evidence of debt operating as a lien upon the property of such railroad company, which shall be made, issued or sold without a compliance with this chapter, shall be void.”

Articles 6724 and 6725 prescribe the formalities under which evidences of debt by railroad companies shall be issued, requiring that they shall be presented to the Railroad Commission with a sworn statement in writing, signed by the president, showing the amount of stock, outstanding bonds, etc.; providing that no evidence of indebtedness shall issue without the approval of the Railroad Commission and their registration by the secretary of state.

It is clear that the note copied above, by its provisions (and by reason of the fact that appellee’s note, together with other collateral paper, was delivered to appellant, together with the $28,000 note), creates in favor of the holder a pledgee’s lien upon all of said collateral. The $28,000 note, not having been issued in compliance with the requirements of the above-cited statutes, is, by the express provisions of article 6727, void ab initio.

The doctrine that a negotiable instrument, issued in contravention of a statute, expressly declaring it to be void, is subject to all defenses in the hands of one who otherwise would be a bona fide holder for value, is sustained by the great weight of authority. Gilder v. Hearne, 79 Tex. 120, 14 S. W. 1031; Campbell v. Jones, 2 Tex. Civ. App. 263, 21 S. W. 723; State Bank of Chicago v. Holland, 103 Tex. 266, 126 S. W. 564; 3 Ruling Case Law, p. 1017, § 225, and the authorities there cited.

The original note being absolutely void, appellant, as the holder of the collateral notes, was not entitled to recover against the several makers thereof. Colebrook on Collateral Securities, pp. 172-174, 177.

The invalidity of the principal debt destroys the claim of the lender upon the collateral securities held for its payment. Albert v. Savings Bank of Baltimore, 2. Md. 159; Brewster v. Sime, 42 Cal. 139; Thompson v. Toland, 48 Cal. 99; Gass v. Hampton, 16 Nev. 185; Winter v. Belmont Mining Co., 53 Cal. 428.

We conclude, therefore, that appellant was not entitled to recover. That portion of the judgment appealed from which decreed the cancellation of the note for $1,532.10, and the deed of trust, must be set aside because of a want of nqeessary parties. We express no opinion upon the questions of fraud and failure of consideration.

The judgment is in all other respects affirmed.

Reformed and affirmed.

HENDRICKS, J., not sitting.

On Motion for Rehearing.

HALL, J. .

In appellee’s motion for rehearing our attention is called to the fact that in the original opinion we failed to note and to find as a fact that the $28,000 note, in addition to being secured by a pledgee’s lien upon the collaterals, was secured also by trust deeds upon 800 acres of land lying in Hartley and Hansford counties, and belonging to the railway company. Our findings of fact are therefore amended to that extent.

HENDRICKS, J., not sitting.

On Further Motion for Rehearing.

HALL, J.

After a careful review of the record in this case, we have concluded that we were in error in not reversing and remanding the judgment in so far as it decrees a cancellation of the note for $1,532.10, and the deed of trust. Articles 6630 and 6631, Vernon’s Sayles’ Civil Statutes, provide that the directors and managers of a sold-out railroad company, by whatever name they may be known in law, shall be the, trustees of the creditors and stockholders of the company, and may be sued as such, and that no suit pending against the company at the time of the sale shall abate, but same shall be continued in the name of the trustees of the sold-out company. This suit was filed in March, 1912. The roadbed, track, franchise, and charter rights were sold in June, 1912; the receiver discharged in October, 1912; and the judgment was rendered against the railroad company in 1914, without the trustees, as provided in the two articles cited, being made parties to the suit. Upon the sale oE the roadbed, etc., it was not only the privilege, but the duty, of appel-lee to have the managers and directors of the company made parties to the suit. Having failed to do so, the judgment is a nullity in so far as it affects the rights of the trus-tées to recover upon the note given for stock.

Under the provisions of rule 62A (149 S. W. x) for the Courts of Civil Appeals, we therefore affirm the judgment of the trial court in so far as it denies appellant the right to recover upon the note, and the jhdgment is in all things else reversed and remanded. Life Association of America v. Goode, 71 Tex. 90, 8 S. W. 639; Sulphur Springs, etc., Ry. Co. v. St. Louis, etc., Ry. Co., 2 Tex. Civ. App. 650, 22 S. W. 109; Clayton v. Preston, 54 Tex. 418; Blum v. Goldman, 66 Tex. 621, 1 S. W. 899; Kelly v. Rochelle (Civ. App.) 93 S. W. 164; Wilkinson v. Vordermark, 32 Ind. App. 633, 70 N. E. 538; Linn v. Taylor, 42 Ala. 303.

Affirmed in part and reversed and remanded in part.

HENDRICKS, J., not sitting.
      <S&wkey;For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HALL, J. HALL, J.

text:
    JONES v. NIX.
    (No. 702.)
    (Court of Civil Appeals of Texas. Amarillo.
    Jan. 2, 1915.
    On Motion for Rehearing, Feb. 6, 1915.
    Second Motion for Rehearing Denied March 6, 1915.)

      1. CANCELLATION OF INSTRUMENTS &wkey;>35 — RELIEF Awaebed — Necessity oe Parties.
    Where, in a suit on a note secured by a deed of trust, recovery is denied because held as collateral security for a void railroad note, and it was shown that a receiver of the railroad was discharged, and the assets ordered paid to the directors and president as trustees, cancellation of the note and deed of trust cannot be had in absence of the trustees as parties, under Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 6630, 6631, if the property had vested in them or the receiver if he still had control.
    [Ed. Note. — For other eases, see Cancellation of Instruments, Cent. Dig. §§ 55-64; Dec. Dig. &wkey;>35.]
    2. Aepeal and Error <&wkey;722 — Assignment oe Error — Multieariousness.
    A multifarious assignment of error cannot be considered.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 2990-2996; Dec. Dig. <&wkey;> 722.]
    3. Trial <&wkey;252 — Instructions—Applicability oe Evídence.
    A requested charge not applicable to the facts is properly refused.
    [Ed. Note. — For other eases, see Trial, Cent. Dig. §§ 505, 696-612; Dec. Dig. &wkey;252J
    4. Depositions <&wkey;83 — Interest oe Oeeiceb —Attorney.
    That an officer taking depositions had represented deponents as attorney in other suits is not ground for quashing them.
    [Ed. Note. — For other cases, see Depositions, Cent. Dig. §§ 219-226; Dec. Dig. t&wkey;83.]
    5. Evidence &wkey;>501 — Opinion Evidence — Sanity — Statement oe Facts.
    A nonprofessional witness cannot give his opinion as to sanity unless he states the facts on which the opinion is based.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. §§ 2292-2305; Dec. Dig. &wkey;501J
    Appeal from District Court, Dallam County; D. B. Hill, Judge.
    Action by Charles R. Jones against I. C. Nix. From a judgment entered on an instructed verdict for defendant, plaintiff appeals.
    Affirmed in part and reversed and remanded in part.
    Moore & Powell, of Dalhart, and Del W. Harrington, of Amarillo, for appellant. Crudgington & Works, of Amarillo, for ap-pellee.
   HALL, J.

Inspection of the record shows that the same questions are involved here as were considered and decided in the case of Charles R. Jones v. D. A. Abernathy, 174 S. W. 6S2, in which an opinion was handed down November 21, 1914. ■ Here the suit was by Jones against Nix upon one of the collateral notes mentioned in the Abernathy Case. The court peremptorily instructed the jury to return a verdict for the defendant. Judgment was entered accordingly.

We have reviewed the authorities cited in the briefs of the parties. Having heretofore held in the Abernathy Case that, by reason of the provisions of the stock and bond law (Vernon’s Sayles’ Civil Statutes, arts. 6717 to 6732), the original note for $28,000 was absolutely void, and that appellant, as the holder of the collateral notes, was not entitled to recover against the several makers thereof, because the invalidity of the principal debt bars all right of the holder thereof to collect the collaterals in his hands, the judgment is affirmed.

HENDRICKS, J., not sitting.

On Motion for Rehearing.

HALL, J.

The final judgment in this case denies appellant, Jones, the right to recover upon the note and foreclose the deed of trust, on the one hand, and cancels the note and deed of trust as a cloud upon defendant’s title to the land, on the other. A reconsideration of the record forces us to the conclusion that the judgment, in so far as it denies Jones the right to recover, should be affirmed, and that portion which decrees the cancellation of the note and deed of trust must be reversed and remanded for the want of necessary parties. It does not appear from this record that the railroad had been sold, but, by the order of the district court discharging the receiver, he is directed to deliver to the directors and president of the road, as trustees, all the property remaining in his hands undisposed of at the date of the order. If the road was still in the hands of the receiver at the date of the final judgment, he should have been made a party to the suit, and, if the property had vested in the manager and directors of the railway corporation, then by the provisions of Vernon’s Sayles’ Civil Statutes, arts. 6630, 6631, they, as trustees, were necessary parties defendant before the court could adjudicate the validity of the note and deed of trust. Having arrived at this conclusion, it is necessary for us to dispose of appellant’s remaining assignments of error.

It appears from the record that the $28,-000 note held by appellant was secured by the collateral note in issue here, and also by a deed of trust upon appellee’s land. For the reasons stated in our original opinion, and more fully set out in our opinion in the case of Jones v. Abernathy, 174 S. W. 682, we overrule appellant’s first four assignments of error.

The fifth assignment is multifarious, and too general to entitle it to consideration.

Appellant 'requested a special ctiarge upon the issue of waiver by appellee in renewing the note, which was refused. We think the charge does not state the law applicable to the facts. The court did not. err in refusing to quash the depositions of Wal-stadt, Blodgett, Abernathy, and Cooper. It was shown that Correll, the officer who executed the commission, had never acted as attorney for appellee in this case, thóugh he had represented him in other suits. M., K. & T. Ry. Co. v. Byas, 9 Tex. Civ. App. 572, 29 S. W. 1122.

Appellant urges the proposition that a nonprofessional witness cannot give or state his opinion as to the sanity of a party unless the same is accompanied with a statement of facts upon which the opinion is based. While this is true, we find from an examination of , the statement of facts that the rule has been complied with, and the court did not err in overruling appellant’s objections.

Eor the reasons above stated, the judgment is affirmed in part and reversed and remanded in part.

HENDRICKS, J., not sitting.
      <§=^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    COLLIER et al. v. HARBOUR et al.
    (No. 405.)
    (Court of Civil Appeals of Texas. El Paso.
    March 4, 1915.)
    Appeal and Error <©=1068 — Harmless Error — -Instructions—Cure by Verdict.
    Error in refusing an instruction requested by plaintiff is harmless, where the jury found that the defendants had not committed the acts upon which the request was predicated.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4225-4228, 4230; Dec. Dig. <©=51068.]
    Appeal from District Court, Reeves County; S. J. Isaacks, Judge.
    Action by H. T. Collier and others against J. F. Harbour and others. Judgment for defendants, and plaintiffs appeal.
    Affirmed.
    W. A. Hudson and E. C. Canon, both of Pecos, for appellants. Hefner & Cooke and Ross & Hubbard, all of Pecos, for appellees.
   HARPER, C. J.

Appellants brought this suit against appellees for an injunction restraining appellees from diverting the water of Toyah creek for irrigation, which they allege they were entitled to have flow down to lands owned by them below, that cattle which were kept thereon might have it for drinking, prayed for damages on account of loss of cattle, extra expense in caring for them, etc., and for a perpetual injunction. Defendants answered by general denial and pleaded specially that the waters taken had been appropriated for more than 10 years; that plaintiff’s cattle received an ample supply of water from springs located upon certain sections owned by them; that the loss of thevwater as to certain of plaintiff’s lands complained of was the result of appellant’s own acts in constructing a dam, which prevented it from flowing down; that plaintiffs had suffered no damages. The trial was by jury; cause submitted upon special issues. The answers were adverse to plaintiffs, and judgment was entered for defendants, from which this appeal is taken.

The first and fourth, fifth, sixth, seventh, eighth, and ninth assignments complain that the verdict of the jury is contrary to the evidence, and that the answers of the jury to certain named special issues are unsupported by the evidence. The jury found that the defendants did not divert all- of the waters of the creek, and that plaintiff’s cattle did not die or suffer for want of _water on account of the acts of the defendants, and that certain acts of the plaintiff materially contributed to the shortage of water for his cattle. The effect of the findings of the jury was a verdict against the plaintiffs and in favor of the defendants upon all the matters complained of in the petition, and such verdict is amply supported by the evidence in the record.

The second and third assignments complain of the refusal to give special charges to the effect that the use of water for stock purposes is a natural use and paramount to that of irrigation. It is unnecessary to pass upon this question of law, for the reason that the jury have found that the plaintiffs have not been deprived, by the acts of the defendants, of a- sufficient amount of pure water for their stock.

The cause is therefore affirmed.
      <¡&wkey;For other cases see same topic and KEY-NUMBER in ail Key-Numbered Digests and Indexes


author: LEVY, J.

text:
    GREAT EASTERN CASUALTY CO. v. SMITH.
    (No. 1433.)
    (Court of Civil Appeals of Texas. Texarkana.
    March 4, 1915.)
    1. Insueancb <&wkey;291 — Application — Construction.
    In determining the question of falsity, the questions and answers in the application for insurance ought to be construed liberally in favor of the insured.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 681-699, 694-696; Dec. Dig. &wkey; 291.]
    2. Insurance c&wkey;291 — -'Warranty—Health-
    Breach— “Whole” — “Sound” — “Condition.”
    A warranty in an insurance application that applicant was in whole and sound condition, mentally and physically, is not breached by failure to state that he had a leg amputated at the knee, since “whole” means hale, hearty, strong, sound, and also entire, complete, and “sound” means hearty, not diseased, and also whole, unimpaired, and “condition” means state or situation as regards internal or external circumstance or plight, and that construction most favorable to assured will be taken.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 681-690, 694-696; Dec. Dig. <S=> 291.
    For other definitions, see Words and Phrases, First and Second Series, Condition; Sound.]
    Appeal from Harrison County. Court; Geo. L. Huffman, Judge.'
    Action by Louis Smith against the Great Eastern Casualty Company. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    The action is by appellee on a policy of Insurance, providing, as sued for, weekly indemnity for loss of time through disablement resulting while traveling as a passenger within any common carrier’s conveyance. After the issuance and delivery of the policy the insured sustained bodily injuries while traveling as a passenger on a railway passenger train, and was wholly disabled from attending to any kind of business for more than 10 weeks continuously. Appellee sues for the 10 weeks’ loss of time at the stipulated amount of $25 per week, and for the statutory damages and attorney’s fees for failure to pay the claim within 30 days after the demand therefor. Appellant pleaded, in avoidance of the policy, that a false statement as to his physical condition was made by the insured in applying for the policy. The appellee replied that the appellant was estopped by the knowledge of its soliciting agent from asserting any forfeiture in respect to the answer if it were false. The court gave a peremptory instruction in favor of appellee, and refused to give one in favor of appellant, to each of which appellant seasonably excepted and assigns error. The facts are agreed to, and are admitted to be undisputed. The local agent of appellant solicited insurance from appellee, and the application blank was filled in by the agent, and appellee signed it. The application reads as follows:
    “I hereby apply for limited accident and sickness insurance in the Great Eastern Casualty Company to be based upon the following statement of facts which I warrant to be true and complete and binding upon me:
    “Policy No. C-153889. Form S-54. Key tag No. 56289. Date, 8/19/1913. (Policy in force one year from date.) Name, Louis Smith. Age, 39 years. Street and number, --■. City and state, Marshall, Texas. Beneficiary, Sarah Smith. Relationship, wife. Address, Marshall, Texas.
    “I have never had fits, diabetes, kidney disease, syphilis or any sickness or disorder of the brain, spine or nervous system, am in whole and sound condition mentally and physically, and have no other insurance in this company, except as herein stated.”
    At some previous time one of appellee’s legs had been amputated near the knee, and the agent knew of the fact that appellee was one-legged. The appellee says he asked the agent, when his application was solicited, if his being one-legged would affect the insurance, and was told it would not. The agent denies making the statement. After appel-lee signed the application the agent collected the premium, which was for a year, and forwarded the application to the home office of the company, which was there approved and the policy issued and mailed to the agent, who delivered it to appellee. The agent had authority to solicit the insurance and collect the premium, but had no authority to issue policies or to waive or change any provision of the policy. The policy recites that it is issued in consideration of and subject to the agreements and statements in the application, which are' made a part of the contract, and stipulates for forfeiture of policy for untruthfulness of warranties. There is agreement as to amount of attorney’s fees that would be reasonable, and that being one-legged may be regarded as being material to the risk of insurance.
    Beard & Davidson, of Marshall, for appellant. Bibb & Scott, of Marshall, for appel-lee.
   LEVY, J.

(after stating the facts as above).

In his application for the insurance the appellee answers:

“I have never bad fits, diabetes, kidney disease, syphilis or any sickness or disorder of the brain, spine or nervous system, am in whole and sound condition mentally and physically.”

The company defends upon the ground that there had been a breach of the warranties contained in the application and policy, in that by this answer the insured had represented himself as being “in whole and sound condition mentally and physically,” when in truth before and at the time of the application he was one-legged. The only proof or contention with respect to the state of health or "condition of the insured rests upon the bare fact that the insured at some previous time had a leg amputated at the knee, and as a consequence was “one-legged.” It Is concluded tliat the court did not err in directing a verdict for appellee. It is believed that from the fair interpretation and intendment of the language of the questions and answers, construed together, there is not shown the evident untruth or falsity, so as to avoid the policy, of the answers in the application. It is stated as a fair rule that in determining the question of falsity the questions and answers of the application ought to be construed liberally in favor of the insured. The language “in whole and sound condition mentally and physically” is capable of different meanings. The word “whole” is defined: “(1) Hale, hearty, strong, sound, well;” and “(4) entire, complete, without omission, reduction or diminution.” Century Dictionary and Cyclopedia, vol. X; Webster; Standard. The word “sound” is defined: “(1) Hearty, not diseased;” and “(2) whole, uninjured, unmutilated.” Id. The word “condition” is indefinite of application, and means “state or situation, as regards internal or external circumstances or plight.” Id. Therefore in one meaning the language could refer to a well and not diseased ■ state of mind and body apart from the bare fact of having one leg off, while in another meaning the language could refer and extend as well to health as to a whole body. As the answers run in the application there is ample room for the insured to have naturally understood that he was asked concerning diseases and ailments affecting his general soundness of health, and not specifically to the loss of a limb. And as he could reasonably and fairly have so construed the language, it is not thought that falsity of answer in avoidance of the policy could properly be predicated on the omission to specifically state the fact of the loss of a limb. This ruling is decisive of the appeal.
      other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HIGGINS, J.

text:
    JAMES et al. v. GODSON.
    (No. 399.)

    (Court of Civil Appeals of Texas. El Paso.
    Feb. 25, 1915.)
    1. Appeal and Error <&wkey;263 — Exceptions— Refusal oe Special Insteuction.
    Assignments of error to the general charge, complaining of the refusal of a special instruction, will be overruled where it does not appear that exceptions were taken as required by Acts 33d Leg. c. 59.
    [Ed. Note. — Eor other cases, see Appeal and Error, Cent. Dig. ⅜ 1516-1523, 1525-1532; Dec. Dig. &wkey;j263J
    2. Husband and Wife <&wkey;281 — Separation Agreement — Recovery of Damages.
    Where plaintiff and defendant, formerly husband and wife, entered into a separation agreement, confirmed by the court, whereby defendant agreed to convey certain property to plaintiff,, and wherein it was provided that each party should have the custody of their children one-half the time, and where plaintiff subsequently breached the agreement by removing the children from the state, she could not thereafter recover damages from defendant for breach of his agreement by conveying the wrong land to her.
    [Ed. Note. — Eor other cases, see Husband and Wife, Cent. Dig. § 573; Dec. Dig. &wkey;>281.]
    Error^from District Court, Culberson. County; Dan M. Jackson, Judge.
    Action by Mrs. Myrtle B. James and husband against G. A. Golson. Judgment for defendant, and plaintiffs bring error.
    Affirmed.
    See, also, 165 S. W. 896.
    Hudspeth, Dale & McDonald, of El Paso, for plaintiffs in error. Joe Irby, of Van Horn, and It. M. Reed, of El Paso, for defendant in error.

       Rehearing denied March 18, 1915.

   HIGGINS, J.

Myrtle B. James sued Gol-son, to recover damages alleged to have arisen and to have been sustained through the conveyance by Golson to Mrs. James of 5.83 acres of land out of the northwesterly corner of a certain section of public free school land. Golson and Mrs. James had been husband and wife, and some years previously had separated and had entered into a separation contract, whereby Golson agreed to convey to her certain property, a portion thereof being the above-mentioned 5.83-acrp tract, and in said contract it was agreed that the mother should have custody of the children for one half of the time and the father the other half. Subsequently, the property was conveyed by Golson to the plaintiff in accordance with the terms of the separation contract and the parties were subsequently divorced by decree of court. The court’s decree provided that each of the parties should have the custody of the children for 12 months at a time. The decree does not appear to have made any disposition of the property rights of the parties. Thereafter Mrs. James removed the children from the state and breached the contract relative to their custody, denying Golson the right to the custody of the children, and, they being beyond the jurisdiction of the court, he was unable to secure them. The agreement upon the part of Mrs. James that Golson might have the custody of the children one-half of the time was a material part of the consideration, inducing the agreement to convey said property to her and the subsequent conveyance thereof. Mrs. James, in her petition, alleged: That on said tract of land were located valuable wells, together with windmills, etc., together with an earthen-tank containing water supplied from said wells. That she became the owner of said property by virtue of a separation deed dated May 25, 1910, executed by defendant in error and delivered to her, whereby it was intended that she should be conveyed a tract of land connected with other lands belonging to her, on which said wells, windmills, and tanks were situated; that by mutual mistake the field notes contained in said deed did not correctly describe the property intended to be conveyed, and thereafter by resurvey said field notes were shown to be incorrect and incomplete, and after such resurvey defendant in error sold said premises, together with improvements thereon to one Arledge, who was a purchaser in good faith for value without notice of said plaintiff’s claim to said tract of land, as well as the wells, windmills, tanks, etc., situated thereon. It is further pleaded that the plaintiffs were damaged, especially for the reason the lands adjacent to said land are without water, and that the deed from defendant in error, conveying same to Mrs. James, was received by her on condition that she should also have said wells, tanks, etc., and alleging a further damage in the loss of said wells and other property described. In addition to a general denial, Golson answered, pleading the contract entered into by and between Mrs. James and himself, known as the separation .agreement made at or about the time they separated as husband and wife and prior to the time they had been divorced, and alleged that same was a continuous contract, the performance of which would extend over a number of years, and set up that portion of the contract which provided that Mrs. James and himself should each have control and custody of the children one-half of the time, and that this portion of the contract had been breached by her, and by reason thereof she was barred from the recovery of any damages arising out of the conveyance by him to Arledge of said land, upon which the wells, tanks, etc., were situated. The court instructed the jury:

“If you find that the plaintiff Mrs. Myrtle B. James, and defendant, on or about the 27th day of February, 1909, entei’ed into a separation agreement whereby the custody of their said children was to be governed and controlled, and if you further find that on the 14th day of December, 1912, the date of the sale of said tract of land to G. W. Arledge, said agreement as to the custody and care of said children was still in force and effect, and if you find that said plaintiff, Mrs. Myrtle B. James, had breached said agreement prior to the execution of said deed, then you will find for the defendant.”

Verdict was returned and judgment rendered in favor of Golson.

Certain assignments complain of the general charge of the court and the refusal of a special instruction. The record fails to disclose that exceptions were taken, as is required by chapter 59, Acts 33d Leg., for which reason these assignments are overruled.

The fifth assignment reads:

“Because the verdict of the jury is contrary
to the law and evidence in this: That all the evidence showed that the intention of the contracting parties was that plaintiff Mrs. Myrtle B. James should have received, by that certain deed conveying 5.83 acres of land, the wells and other improvements, situated near the northwest comer of section 43, block 53, public school land, Culberson county, Tex., and that, such being the intention of the parties, she acquired a good title thereto as between Herself and the defendant, and that when he sold said tract of land, together with said improvements, to G. W. Arledge, he deprived her of the value of said property, and she was entitled to such damages as the evidence showed she sustained by virtue of the loss of said property, and the original separation agreement entered into by and between said parties on February 27, 1909, not being a continuing agreement as respects the care and custody of their said children, same having been abrogated and replaced by a decree of the district court of Reeves county, Tex., and said deed having been executed for and upon other and different considerations, the plaintiffs were entitled to some damages, and the failure on the part of the jury to return a verdict in their favor is not supported by the great weight of the evidence, and is contrary to the evidence, and all the evidence, in the case.”

It will be seen from the facts recited that the separation agreement was not abrogated by the court’s decree, but upon the contrary, it was recognized and confirmed. It expressly recognized the right of each of the parties to the custody of the children. The defendant’s right to partial control and custody of the children was a material part, if not the whole consideration for the lands conveyed. That it was a continuing right in Golson, and a continuing obligation upon Mrs. James’ part to observe it, there can be no doubt. The agreement, confirmed by the court, meant that the parties were to have alternate possession of the children for periods of 12 months, until they became of age. Plaintiff, having breached the agreement by removing the children from the state, where the court’s decree could not be enforced, thereby precluded herself from recovering damages for the loss of the particular 5.83 acres containing the improvements. A verdict might properly have been instructed for defendant.

Affirmed.

       other oases see same topic and. KEY-NUMBBR in all Key-Numbered Digests and Indexes


text:
    GENERAL BONDING & CASUALTY INS. CO. v. TRABUE et al.
    (No. 1405.)
    (Court of Civil Appeals of Texas. Texarkana.
    March 3, 1915.
    Rehearing Denied March 18, 1915.)
    1. Homestead &wkey;>71 — Excessive Claim -- “Lot.”
    The word “lot” or “lots,” as used in Const, art. 16, § 51 (Rev. St. 1911, art. 3786), providing that an urban homestead shall consist of a lot or lots not to exceed in value $5,000 at the time of their designation as a homestead, is used in the broad sense to mean an area or piece of ground, and not an artificial subdivision, according to the survey and plot of the city, town, or village; and hence the appropriation of two lots beyond the limit of value is good for the fractional part of the second lot required to make up the value, and the excess only is liable to creditors.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. § 104; Dec. Dig. &wkey;71.
    For other definitions, see Words and Phrases, First and Second Series, Lot.]
    2. Homestead <&wkey;121 — Excessive Claim — Bneobcement of Lien — Method of Sale.
    Where an urban homestead claimed on two lots is excessive as to part of the second lot, the excess may be sold under a trust deed by selling an undivided interest, and the purchaser becomes a tenant in common with the homestead owner, subject to a partition between them.
    [Ed. Note. — Eor other cases, see Homestead, Dec. Dig. «&wkey;121.]
    Error from District Court, Panola County; W. C. Burford, Judge.
    Action by the General Bonding & Casualty Insurance Company against Ru E. Trabue and another. From a judgment rendered, both parties bring error.
    Affirmed.
    The suit is by the insurance company against R. E. Trabue and wife upon their principal promissory note in the sum of $7,-000 and two interest notes secured by a deed of trust upon the east 70 feet of the north half of lot 19 and the south half of lot 18, in the town of Carthage. The prayer was for judgment for the debt, interest, and attorney’s fees, and foreclosure of the lien on the property described in the deed of trust. The defendants by answer claimed the property covered by the deed of trust to be exempt as homestead, and interposed a discharge in bankruptcy as a bar to a'personal judgment on the note and coupons sued upon. The jury answered that all the premises claimed as a homestead had a naked ground value of $5,775 at the time of its designation as a homestead. The court found the excess of value above $5,000 to be 14.76 per cent, of the total value, and so rendered judgment that, to the extent of an undivided interest of 14.76 per cent., the property described in the petition was subject to the lien created by the deed of trust, and decreed foreclosure of such lien. It was also adjudged that R. E. Trabue was free from personal liability upon the indebtedness sued upon, by virtue of the discharge in bankruptcy. The plaintiff and the defendants both gave notice of appeal, and assign error to have revision and correction of the judgment.
    In 1911 R. E. Trabue was, and had been for several years, engaged in the general mercantile business in Carthage, a town of a population of about 2,500. Mr. Trabue js a married man, with a family. In 1902 Mr. Trabue and wife designated as their residence homestead property owned by them in the town of Carthage and comprising a lot of about 1.15 acres, upon which their residence was erected, and another lot of 9 acres used by them for pasture purposes in connection with their home. From 1902 continuously until the execution of the deed of trust in suit they occupied these premises, situated in the town of Carthage, as their residence homestead. This residence property lay in the northern part of the town, and about 300 yards from the courthouse square or principal business center of the town. On July 2, 1904, R. E. Trabue acquired as separate property, and designated as his business homestead,- and occupied it as a place of business, property known as the east 70 feet of the south half of lot 19, in the town of Carthage. On July 19, 1904, R. E. Trabue acquired as community property, and a few months later designated as a part of the business homestead, property in Carthage known as the east 70 feet of the north half of lot 19 and all of the south half of lot 18. The east 70 feet of the north half of lot 19 adjoins on the north the east 70 feet of the south half of the same lot, and the south half of lot 18 adjoins on the north the east 70 feet of the north half of lot 19. After acquiring, on July 19, 1904, the east 70 feet of the north half of lot 19 and all of the south half of lot 18, R. E. Trabue erected upon the two half lots and the east 70 feet of the south half of lot 19 a two-story brick building occupying all of the three half lots, and still standing thereon. After the completion of the building, near the end of the year 1904, R. E. Trabue occupied the same as a place for the exercise of his mercantile business, and designated the same as a part of his business homestead. Until then the south half of lot 18 and the east 70 feet of the north half of lot 19 had not been so occupied. On January 14, 1911, R. E. Trabue made application to the plaintiff in error for a loan of $8,000, offering as security the south half of lot 18 and the east 70 feet of the north half of lot 19. The application was signed and sworn to, and represented that the property covered by the buildings was not then occupied as homestead and was not intended so to be. The questions and answers in respect to the application for loan are in evidence, without dispute, and are made a part of the findings here, and can be taken as a part of the findings without necessity of copying them into this statement. It appears that the plaintiff in error knew, at the time of the loan and taking the deed of trust, that defendant in error was occupying the property for the purposes of his mercantile business. All the evidence being undisputed, except the question of the value of the lots, only the question of value was submitted to the jury in the form of a special issue. The jury made the finding that, at the time R. E. Trabue began to use the south half of lot 18 and the east 70 feet of the nprth half of lot 19 as his place of business, the market value of the lots claimed to be exempt as homestead, exclusive of improvements, was as follows:
    South half of lot 18.$1,750 00
    East 70 feet of north half of lot 19.. 1,500 00
    East 70 feet of south half of lot 19... 2,000 00
    Residence lot. 300 00
    Pasture lot. 225 00
    ' The findings as to value are not challenged in the appeal. The court, in his conclusions of fact concerning the building, found:
    “Said two-story brick building consists of its four walls, two floors, and roof, without any partitions dividing it into rooms on either the first floor or the second floor. Its construction is such as to render it capable of physical division by the erection of partition walls at any placo or places.”
    Locke & Locke and Camp & Camp, all of Dallas, and Brooke & Woolworth, of Cartilage, for plaintiff in error. Lasseter & Me-Ilwaine and N. A. Gentry, all of Tyler, and H. N. Nelson, of Carthage, for defendants in error.
   LEVY, J.

(after stating the facts as above).

It appears that the addition to the homestead uses of the north half of lot 19 and the south half of lot 18 made the homestead claimed of the naked ground value of $5,775 when designated, which amount exceeds the value allowable as exempt to the sum of $775. It is insisted by plaintiff in error, under pertinent assignment of error, that the south half of lot 18, which would create an excess, did not constitute a part of the exemption and was subject in its entirety to the lien of the deed of trust. The admirably prepared argument of plaintiff in error is predicated upon the contention that the words “lot or lots,” as used in the constitutional provision, intended to confine the premises that should be appropriated and occupied as a homestead to the plotted lots according to the survey and plot of the particular city, town, or village, and that the words should be given such interpretation because of the lack of legislative regulation providing any means for designation of an urban homestead out of premises having a worth exceeding the constitutional valuation. The question presented must depend for solution upon the construction of the words “lot or lots.” An urban homestead, as defined by the Constitution, “shall consist * * * of a lot or lots, not to exceed in value $5,000.00 at the time of their designation as the homestead, without reference to the value of any improvements thereon.” Article 16, § 51; R. S. art. 3786. In construing the word “lot,” as used in laws allowing a lot as urban homestead, courts of some states have given it the meaning of an artificial subdivision for the purpose, according to the survey and plot of the city, town, or village, while other courts have held it to comprehend simply an area or piece of ground, though containing less than a plotted lot. By taking the word “lot” in its broad and popular sense, there is room afforded in such meaning to permit the appropriation to homestead uses of any fractional part as may be subdivided and bounded by the conveyance of the owner out of a plotted lot. As, for instance, the half, third, or fourth part of an entire lot may be appropriated and occupied for homestead purposes and be exempt. And such interpretation would not operate to deprive any owner of only a fractional part of a single plotted lot from the benefit of the homestead exemption. But by taking the word “lot” as meaning and referring to a technical subdivision for the purpose according to the survey and plot of the city, town, or village, there is afforded no room to permit the appropriation to homestead uses of any fractional portion of the plotted lot. And such interpretation would operate to deprive the owner of only a fractional portion of a plotted lot from the benefit of any urban homestead exemption, since his attempted designation would be of an area of ground less than “a lot,” according to the plot of such city, town, or village. Holding in view the purposes of the exemption law, and to fully and generally accomplish its purposes, it is concluded that the words “lot or lots” must be taken and construed in the broad sense, as commonly used, of describing simply a piece of ground, without regard to size, entirely located within the confines or plan of the city, town, or village. This construction of the words, as within the letter and spirit of the article, would not, it is thought, cast doubt upon the right of the owner of only a part of a plotted lot, less than the entire lot, coming under the benefit of the exemption. The Supreme Court in Taylor v. Boulware, 17 Tex. 74, 67 Am. Dec. 642, in reviewing the constitutional provision exempting “any town or city lots in value not exceeding two thousand dollars,” declared the provision “entitled,” to accomplish its purpose, “to liberal construction.” And that rule has been generally applied in the numerous cases involving the homestead laws of this state. Holding, as we do, that the words “lot or lots” should be given the broader meaning, it would follow that the fact that a homestead excessive in value has been set apart does not prevent the property designated from having the status of a homestead to the extent of the limit of value. It has been so decided in effect. Hargadine v. Whitfield, 71 Tex. 482, 9 S. W. 475. And the precise contention of plaintiff in error that the south half of lot 18 did not at all become a part of the homestead must, it is concluded, be overruled. So much of the two added lots in evidence became a part of the homestead when designated as would in-value fill the measure of $5,000, and was exempt, while the worth of such property above the limit of $5,000 is subjected to the lien executed by the owner. This excess, as found by the jury, was by the court applied to the property covered by the deed of trust, and foreclosure and order of sale were decreed of an undivided interest to the extent of the excess value, fixing the percentage thereof.

Defendant in error by cross-assignment complains of the decree foreclosing an undivided interest to the extent of the excess as being null and void upon the ground that it is in effect foreclosing on part of the homestead itself. As the excess, which is all that is ordered sold, is not exempt as a part of the homestead, it may be subjected to the lien. And the excess being a subject-matter of sale and disposition, the right of the creditor to have sale of the same is not abridged, it is believed, by the fact that such excess or residue may be an undivided parcel of the property. The purchaser under such sale acquires no right or interest in the exempt portion of the property. The purchaser becomes a tenant in common to the extent of his interest with the owner of the homestead property, and this situation results from the designation of an excessive homestead. The purchaser and the owner of the homestead property have a means of partitioning the property in proper equitable proceedings according to the facts and equities of the particular case.

Affirmed.
      <£=oFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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