text:
    RAY et al. v. W. W. KIMBALL CO.
    (No. 8928.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Nov. 16, 1918.)
    1. Pleading <&wkey;214(8) — Demubeeb — Admission.
    Admission by demurrer is only for purpose of passing upon sufficiency vel non of pleading, and is not an admission of truth of facts upon the merits.
    2. Pleading <&wkey;221 — Overruling oe Demurrer — PBOOE.
    After a general demurrer has been overruled, the pleader, to prevail, must establish by competent evidence the facte pleaded on a trial of the issues made.
    3. Pleading &wkey;>104(2) — Plea oe Peivilege —OPERATION AND JÍEEECT.
    In suit on notes alleged to have been executed! by a defendant authorized to hind the other defendants, to pay notes in Tarrant county, the county of the venue, a sworn plea of privilege under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 1903, as amended by Acts 35th Leg. c. 176 (Vernon's Ann. Civ. St. Supp. 1918, art. 1903), was tantamount to a sworn denial of such alleged authority of maker to act for other defendants.

      4. Venue <&wkey;72 — -Plea of Privilege — Burden of Proof.
    In action on notes executed by one alleged to have authority to bind defendants to payment in Tarrant county, where there was a sworn plea of privilege under Vernon’s Sayles’ Ann. Oiv. St. 1914, art. 1903, as amended by Acts 35th Leg. e. 176 (Vernon’s Ann. Civ. St. Supp. 1918, art. 1903), and issue joined) as to such authority, plaintiff was bound to sustain his claim that defendants had bound themselves to pay notes in county of venue, and without any evidence thereof court was required to sustain plea.
    5. Venue <&wkey;77 — Plea of Privilege by Part of Defendants — Waiver by Other Defendants.
    In suit on notes secured by chattel mortgage, wherein appellants prayed that- cause be removed to E. county, that prayer would be taken as waiver by the defendants residing in O. county that cause should be removed, to that county, as alleged in their plea of privilege.
    Appeal from Tarrant County Court; I. T. Valentine, Judge.
    Suit by the W. W. Kimball Company against R. L. Ray and others. Pleas of privilege overruled, and certain defendants appeal.
    Reversed, and cause remanded, with instructions to transfer the cause to the county court of Eastland county.
    Scott & Brelsford, of Eastland, for appellants.
    Wiley A. Bell, of Dallas, for appellee.
   BUCK, J.

W. W. Kimball Company filed suit against John W. Hawkins, the Scranton Academy, and R. L. Ray, W. E. Bradshaw, W. T. Rutherford, Mace Sprawls, Joseph Ray, and J. P. Leveridge, on a series of notes signed by Hawkins, in part payment for a piano sold by Heyer-Mills Piano Company; notes being payable in Tarrant county.

It was alleged that, the notes, and the accompanying chattel mortgage to secure said notes, were executed by Hawkins; acting for himself and the Scranton Academy, and that he was authorized to execute the instruments by the other defendants, and that said other defendants ratified and adopted said contract, and that after its purchase the piano had been continuously used by said Scranton Academy, unincorporated, and that the six-named defendants, above mentioned, constituted the executive and managing board of the Academy, and they had the use and benefit of said piano. Plaintiff further alleged it was a purchaser of said notes for value, before maturity, etc.

Sprawls and Joseph Ray filed their sworn plea of privilege to be sued in Callahan county, the county of their residence, and R. L. Ray, Bradshaw, Leveridge, and Rutherford filed their sworn plea of privilege to be sued in Eastland county. In both pleas of privilege it was.alleged:

“That none of the exceptions to exclusive venue in the county of one’s residence mentioned in article 1830 or article 2308 of the Revised Statutes exist in said cause.”

Plaintiff filed a sworn controverting plea, setting up substantially the facts relied on in the original petition to bind the six defendants and to fix the venue in Tarrant county. Defendants, except J. P. Leveridge, who was alleged to be deceased, and who was subsequently dismissed from the suit, and John W, Hawkins, who failed to answer, filed an answer containing a general demurrer, general denial, and a special denial that they authorized Hawkins to execute the notes and mortgage for them, or that they had exercised any right of ownership over the piano or that they had in any way ratified and adopted the contract made by Hawkins. This plea was not verified. Upon these pleadings, and upon the introduction of the notes and mortgage, the court entered an order and judgment overruling the pleas of privilege. The five defendants, omitting Leveridge, filing said pleas, have appealed.

The court filed findings of fact and conclusions of law. In the “Conclusions of Law” it is said:

“A. On the Demurrer.
“Plaintiff alleges that the defendants suing out their pleas of privilege authorized and directed John Hawkins to execute the instruments for and on their behalf. The allegations of the petition being taken as proven on demurrer, the defendants became parties to the written instruments sued upon, and became bound! thereby as fully as if they had signed them themselves. What one does by another he does by himself. The notes and chattel mortgage are each to be taken as an entirety, and the promise to pay at Ft. Worth is an integral part of the contract, and of the. same obligation as the promise to pay the principal, interest, and attorney’s fees.
“Article 1830 provides that no person who is an inhabitant of this state shall be sued out of the county in which he has his domicile, except in the following cases: ‘(5) Where a person has contracted in writing to perform an obligation in any particular county in which case suit may be brought either in such county, or in the county where the defendant has his domicile.’ This is taken to mean that the obligation promising payment in a particular county must, for the purpose of venue, be reduced; to writing. The term ‘obligation’ is broader than ‘note.’ The allegations of plaintiff’s controverting plea, and also of plaintiff’s petition, show a contract in writing promising payment at Ft. Worth, Tex., and that the contract is the contract of the defendants as undisclosed principals.

“B. On Trial of the Issue.

“John W. Hawkins having failed to deny any of the allegations of plaintiff’s plea, the exeeution by Mm of tbe notes is taken as admitted, and the delivery thereof is presumed. The defendants who filed their pleas of privilege, having failed to deny under oath the allegations of the plaintiff that they authorized and directed said John W. Hawkins to execute the notes for and on their behalf, such authority is taken as admitted by virtue of article 3710 of the Revised Civil Statutes, and this, too, although their names do not appear upon the instrument. The instruments offered in evidence, promised in writing payment at Ft. Worth, Tex., and, under the circumstances, the defendants are held to have contracted in writing to pay the notes in Tarrant county.
“No issue having been tendered impeaching the assignment of the notes, or their delivery, the first is taken as admitted, and the latter is presumed.
“The above and foregoing are the facts I found on the trial of the cause, and the conclusions of law I reached from them.”

While the legal effect of a general demurrer is an admission that the facts stated are true, yet such admission is only for the purpose of passing upon the sufficiency vel non of the pleading against which the demurrer is directed, and may not be construed as an admission of the truth of the facts upon the merits. The demurrer to the pleading says, in effect:

“Even though the facts pleaded are true, your petition states no cause of action, or defense.”

After the demurrer has been overruled, it still is incumbent upon the pleader, in order to prevail, to establish by competent evidence the facts pleaded. Therefore it follows that defendants in the instant case did not by interposing the demurrer obviate the necessity of plaintiff to prove the facts alleged on a trial of the issues made, nor would the burden of proof be discharged by merely introducing the notes and mortgage. Further proof of the claimed authority in Hawkins to bind the other defendants was necessary, not only to establish plaintiff’s right to recover against them, but to establish venue of the suit in Tarrant county. No proof was offered, so far as the record discloses, of such authority on Hawkins’ part, or that the appellant thereafter ratified or adopted the contract made by Hawkins.

Article 1903, V. S. Civ. Stats., as amended by the Acts of the 35th Deg. (Reg. Sess.) p. 388 (Vernon’s Ann. Civ. St. Supp. 1918, art. 1903), provides what shall be sufficient to constitute a plea of privilege, and that “such plea of privilege when filed shall be prima facie proof of the defendant’s right to change of venue.” This plea must be sworn to and must contain an allegation that none of the exceptions to exclusive venue in the county of defendant’s residence exist. The pleas in the instant case contained such allegation. This was tantamount to a sworn denial of plaintiff’s allegations of authority conferred by defendants upon Hawkins to act for them, etc. The sworn controverting plea of plaintiff merely joined the issue as tó the alleged authority of Hawkins. It was necessary for proof in support of the affirmative of this issue to be introduced to sustain plaintiff’s claim that the defendants had bound themselves to pay the note in Tarrant county. The statute above noted makes the sworn plea of the defendants prima facie proof of the right to a change of venue, but does not make the controverting affidavit of plaintiff proof of anything. The issue having been joined by the sworn pleas of defendants and plaintiff, the duty of the court to hear such issue is invoked. If no evidence is introduced to show that the facts alleged in the controverting plea are true, then the court is required to sustain the plea of privilege. In the instant case, no evidence, other than the notes and mortgage, was introduced. They, .on their face, did not purport to have been executed by defendants. Some proof aliunde the instruments themselves was necessary. None was offered. Hence, we conclude that the court erred in overruling the pleas of privilege. We do not think article 3710, V. S. Civ. Stats., would authorize the court’s action in overruling the pleas of privilege, since we construe defendants’ pleas of privilege as constituting a sworn denial of the authority of Hawkins to bind them.

As the appellants pray that the cause be removed to Eastland county, we take such prayer as a waiver on the part of the defendants residing in Callahan county that the cause should be removed to Callahan county.

The. judgment will be reversed, and the cause remanded, with instructions to transfer the cause to the county court of Eastland county.
      <i&wkey;For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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source: Caselaw Access Project

author: CONNER, O. J.

license: Public Domain

text:
    DRINKARD v. JENKINS et ux.
    (No. 8918.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Nov. 9, 1918.
    Rehearing Denied Dec. 21, 1918.)
    1. Judgment &wkey;>342(l) — Vacation — Time for Proceedings.
    A judgment rendered by a court of competent jurisdiction and regular on its face cannot be set aside after the adjournment of the term at which it was rendered.
    2. Judgment <&wkey;460(6) —Vacation—Pleading and Proof.
    In equitable suits to reopen judgments for new trial, the complaining party must allege and show, not only a just defense, but that he was prevented from making it by some fraud, accident, or mistake, unmixed with negligence on his part.

      3. Judgment <&wkey;151 — 'Vacation—Sufficiency of. Motion.
    A motion to vacate a judgment regular on its face, supported by evidence, entered on default after appearance, made on tbe ground that defendant bad no notice of tbe date of trial and that such date bad not been set nor posted, was insufficient, where it did not show defects, that the case was irregularly tried, nor that counsel bad been misled.
    4. Judgment <S=>145(4) — Vacation of Default — Grounds—Sufficiency.
    On motion to vacate default judgment against indorser on note, a defense that the maker and another indorser had not been joined as defendants was insufficient, where it appeared that such parties were, at the time of the suit and continuously since, wholly insolvent.
    5. Bills and Notes <&wkey;>129(2) — Maturity-Default on Installments — Necessity of Declaration of Default.
    A note payable in installments, and providing that on default of any installment the entire debt may be declared due, does not become 'due by the nonpayment of an installment, in the absence of a declaration to that effect by the holder.
    Appeal from District Court, Tarrant County ; Bruce Young, Judge.
    Action by J. H. Drinkard against J. J. Jenkins and wife. Judgment for plaintiff. From a judgment on a new trial for plaintiff for only part of the relief asked, and setting aside a sale under the original judgment, plaintiff appeals.
    Reversed, and proceedings under the new trial abated.
    Dedmon, Potter & Pinney, and Ocie Speer, all of Ft. Worth, for appellant
    W. A. Tarver, of Corsicana, and W. S. Essex, Isaacs, Agerton & Isaacs, and 'A. W. Christian, all of Ft. Worth, for appellees.
   CONNER, O. J.

J. H. Drinkard instituted this suit on October 15, 1915, against J. J. Jenkins and Essie E. Jenkins to recover on two certain promissory notes' — one for the sum of $511.20, executed by J. F. Eastus, payable to the order of J. J. Jenkins, in installments. This note was given as part of the purchase money of lot 7, block 79, of the Glen wood addition to the city of Ft. Worth, and secured by a vendor’s lien. It was alleged that said note had been indorsed by J. J. Jenkins, and made payable to the order of one A. (M. Hudson, who thereafter, before maturity, indorsed and transferred the same jn blank to the plaintiff.

• The second note declared on was executed ■ January 25, 1913, by defendants, J. J. Jenkins and Essie Jenkins, for the sum of $600, payable to the order of the Mutual Home Association, of Ft. Worth, Tex. This note likewise was payable in installments and secured by a deed of trust upon said lot 7, block 79. It was alleged that the Mutual Home Association had, in due course of business, assigned the note to plaintiff. Certain credits on each of these notes were admitted, and the usual allegations of ownership, nonpayment, etc., were made.

The defendants answered by a plea in abatement, suggesting the nonjoinder of A. M. Hudson as a necessary defendant, and denying generally the allegations in plaintiff’s petition.

Subsequently, on April 28, 1916, a judgment was rendered in favor of the plaintiff in accordance with the prayer of his petition. The judgment recites that the defendants had been duly cited, and had answered, but that “they came not, but wholly made default,” etc., and damages were assessed in the sum of $1,331.09 against J. J. Jenkins in person, with foreclosure of the several liens mentioned on the lot.

The next step in the proceedings, as shown by the record, occurred on August 18, 1916, when J. J. Jenkins and Essie Jenkins filed, in the cause in which the judgment had been rendered, what was styled their “original motion for a new trial.” This was thereafter, on October 8, 1916, amended. It is undisputed that both the original motion and the amended motion for a new trial was filed several terms after the rendition of the original judgment, and we here quote as much of the amended motion as attempts to set up an excuse for not having originally appeared and defended the action:

“Now come the defendants, J. J. Jenkins and wife, Essie Jenkins, and leave of the court having first been obtained, file this their first original amended, motion for rehearing in the above numbered and entitled cause, and pray the court to- set aside the judgment heretofore in this cause on, to wit, 28th day of April, A. D. 1916, and grant them a new trial for the following reasons, to wit:
“(1) Because the judgment in the case is contrary to law and not authorized by any of the pleadings filed in said cause.
“(2) Because the judgment is contrary to the evidence.
“(3) Because the judgment is a default judgment, and said judgment shows on its face that the defendants had filed in the court at the time said judgment was entered, and no default judgment could be legally rendered under the circumstances against these defendants, or either of them.
“(4) Because said case was never set down for trial by this court, and no notice of the same was ever given to this defendant or either of them.
“(5) That said case was not shown in the setting of cases of this court, nqr posted in the clerk’s office, and defendants had no notice of the time plaintiff would ask for judgment.
“(6) That the setting of the court shows that said case was not set for the 28th day of April, 1916, nor for any other date. In this connection these defendants would further show that, through their attorneys, W. S. Essex, of Ft. Worth, and W. A. Tarver, of Corsicana, Tex., the defendants used due diligence and unusual care to find out when said case was set for trial.
“(I) That the said W. S. Essex, knowing that said case was on the nonjury docket, watched the setting of nonjury cases closely from the time said suit was filed on, to wit, 15th day of October, A. D. 1915, until present time, in order that he might know that said case was set for hearing, and in order that he and his co-counsel might appear and present defendants’ defense to said suit.
“(S) That said case was never set down for trial by this court, nor posted by the clerk in the setting of nonjury docket, and defendants’ counsel and each of them were ignorant of the fact that judgment in said case had been rendered until the same was discovered by them on, to wit, 17th day of August, 1916.”

• It was further alleged, on the merits that .the judgment should be set aside, for the reason that) J. J. Jenkins was not personally liable on the $511.20 note indorsed by him, and that several installments of interest on the same were due and unpaid at the time of the institution of the suit, and that the suit on said note had not been brought at the first term of the district court, when said note became due, nor had demand and protest for nonpayment been made, and that therefore he was released from liability as an indorser under the statutes.

It was also further complained that the said A. M. Hudson and J. F. Eastus had not been made parties defendant in the original suit and the places of residence of these parties were given. A number of other allegations are made that we deem it unnecessary to especially notice. It is sufficient to say at this time that a trial upon the motion was had on December 15, 1916, at which time the motion was granted and the previous judgment set aside. A trial thereupon proceeded, Which resulted in a judgment in favor of the plaintiff, Drinkard, on both of the notes before mentioned in substantially the same amount as before, but no personal judgment was rendered against J. J. Jenkins on the $511.20 note. The judgment further set aside a sale of the property that had been made under the original judgment and deed of trust, and an adjustment made of the rents that had been collected by thei plaintiff, Drinkard, and other orders made, not necessary to notice.

From the judgment last rendered the plaintiff,' Drinkard, has appealed, and now urges in various forms that the court erred in granting the new trial referred to, and in setting aside the original judgment and the proceedings had thereunder.

We are of the opinion that appellant’s complaints in these particulars must be sustained. As stated, it is conceded, or at least it is undisputed, that the motion for a new trial was not filed at the term of court during which the original judgment in. appellant’s favor was entered. It is well settled in this state that a judgment rendered by a court of competent jurisdiction and regular on its face cannot be set aside on a motion for a new trial after the adjournment of the term at which the judgment was rendered. See Overton v. Leon & H. Blum, 50 Tex. 417; Eddleman v. McGlathery, 74 Tex. 280, 11 S. W. 1100. So that, considered merely as motions for a new trial, appellees’ motions were Wholly insufficient to authorize a setting aside of the original judgment. Nevertheless, it is held in this state that where a party has been prevented by fraud, accident, or mistake from prosecuting his suit or making his defense, and an opportunity has not been afforded him during the term, he may bring an equitable action after its close to reopen the litigation and dispose of the case upon its merits, hut such actions are not specially favored in the law. In all such cases the complaining party must distinctly allege and show, not only that he has a just defense to the action, but also that he was prevented from presenting such defense at the proper time by some fraud, accident, or mistake unmixed with negligence on his part. See Henderson v. Moss, 82 Tex. 69, 18 S. W. 555; Stratton v. Johnston, 36 Tex. 90; Harn et al. v. Phelps et al., 65 Tex. 592; Plummer v. Power et al., 29 Tex. 7; Kruegel v. Cobb et al., 58 Tex. Civ. App. 449, 124 S. W. 723.

Tested by1 the ruling of these cases, we think appellees’ motions for a new trial were wholly insufficient, even though we construe these pleadings as in effect a new suit upon equitable grounds. The motion fails to point out any defects in the judgment on its face; in fact, as shown in the record, it appears regular upon its face. Nor can it be said that the judgment was contrary to the evidence ; the judgment on its face recited that the court heard the evidence, and nothing in the record before us shows what evidence was produced on the original hearing. The judgment was more than an ordinary default judgment; the defendants had answered, but “said nothing,” which in effect was a confession that they had nothing to say and a waiver of any technical error, if there had been any. The motion fails to allege that the case was taken up out of its order, tried contrary to any agreement of plaintiff or his counsel, or that in any way plaintiff and his counsel had misled said defendant as to when the case would be called. Nor is it alleged that by any rule of law or court it was necessary to give the defendant further notice than the citation afforded as to when the case would be called for trial. The law directs that cases are to be tried in their order (R. S. 1911, art. 1943), and nothing in the motion for a new trial indicates that this was not done; nor does the motion allege that by any rule of the court it was customary for a case to’ be set for any particular time and posted in the clerk’s office. So that we think their effort to allege excuses for not having appeared before the court and presented their defenses, if any, is wholly insufficient. As illustrating this, see the following cases: First Nat. Bank of Ft. Worth v. Henwood, 183 S. W. 5; Robbie v. Upson, 153 S. W. 406; Ames Iron Works et al. v. Chinn, 20 Tex. Civ. App. 382, 49 S. W. 665; Woolley et al. v. Sullivan et al., 43 S. W. 919; Wilson v. Woodward et al., 54 S. W. 385; Adams v. First Nat. Bank et al., 52 S. W. 642.

Moreover, as will be seen from the authorities hereinbefore cited, in order to obtain a new trial upon equitable ground, the party so seeking must not only show that his failure to present his defense at the term of the court at which the judgment was rendered was not due to any negligence on his part, and was due to some fraud, accident, or mistake, or acts of the adverse party, but he must also show that, had he been permitted to do so, he could and would have presented defense, presenting good ground to suppose that a different result would be attained by a new trial.

In the ease before us ¿n examination of the original answer, as well as also of the amended motion for a new trial, discloses that substantially the only material defense asserted was that Eastus, as maker, and Hudson, as indorser, had not been made parties defendant, and that the defendant J. J. Jenkins was not. liable personally on the $511.20 note indorsed by him, for the reason that more than one term of court had elapsed after the maturity of the note before the suit had been instituted, without waiver of demand and protest. The record discloses that there is no substantial merit in either of these asserted defenses. The record discloses, both by allegation and uncontradicted proof on the part of plaintiff, that Eastus and Hudson were wholly insolvent, not only at the time of the ■ suit, but continuously since that time. This fact destroys whatever of merit there might otherwise be in the defense just noted. See Insall v. Robson, 16 Tex. 130; Burrows v. Zapp, 69 Tex. 474, 6 S. W. 784; Hanrick v. Alexander, 51 Tex. 501; Daniel v. Brewton, 136 S. W. 815; First Nat. Bank v. De Morse, 26 S. W. 417; Norton v. Wochler, 31 Tex. Civ. App. 522, 72 S. W. 1025; Costin v. Burton-Lingo Co., 57 Tex. Civ. App. 634, 123 S. W. 177.

As to their other defense the record shows that appellees are wholly mistaken in their assumption that the plaintiff failed to institute his suit at the first term of court after the maturity of the $511.20 note. It appears from the allegations of the plaintiff’s original petition, and from the averments of ap-pellee’s answer, and also from the undisputed facts, that this note was payable in installments, several of which were past due, but the greater majority of which had not matured by the terms of the note, save that the note contained a provision giving an option to the owner or holder to declare the entire note and all unpaid installments due upon failure to pay any matured installment. The entire note, therefore, did not ipso facto become due on default of a payment of a few of the installments. The plaintiff had the option to declare the note due for such default, but he was not obliged to do so; it required affirmative action upon the part of the holder to effectuate this result, and there is nothing in the record to indicate that appellant, as plaintiff, exercised the option given in the note prior to thb time of the original institution of his suit.

Appellee’s contention, therefore, that he was relieved from liability as an indorser because of the fact that the suit had not been filed at the first term of court, or at the second term of court, after the maturity of the note, with good excuse for not having filed the suit at the first term, falls to the ground. See Derrick v. Smith, 148 S. W. 1173; Sheffield v. Bank, 2 Ga. App. 221, 58 S. E. 386; 3 R. C. L. title “Bills and Notes,” § 96 et seq.; 8 Corpus Juris, title “Bills and Notes,” § 611 et seq.

We conclude, on the whole case, that the judgment appealed from must be reversed, and the present proceeding abated, thus leaving in full force the plaintiff’s original judgment, with all proceedings thereunder.
      cifesFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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author: DUNKLIN, J.

text:
    DILTZ et al. v. DODSON et al.
    (No. 8931.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Nov. 30, 1918.)
    1. Appeal and Error <&wkey;934(l) — Findings op Fact — Presumption.
    Whore trial was had by the court without a jury, and no findings of fact were filed by the trial judge, every reasonable presumption must be indulged in support of the judgment rendered.
    2. Fraudulent Conveyances &wkey;>222 —Necessity por Recording — “Creditor.”
    A creditor who has fixed a lien upon land by the levy of attachment or other judicial process or by the filing of abstract of judgment in the djeed records, is a “creditor” within Vernon’s Sayles’ Ann. Civ. St. 1914, art. 6824, making unrecorded deeds of conveyance void as to creditors.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Creditor.]

      S. Fraudulent Conveyances <&wkey;283 — Creditors — Burden op Proop.
    In a controversy between a bolder of a prior unrecorded deed and a “creditor” under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 6824, the holder of the unrecorded deed has the burden of showing that the creditor had notice at the time his lien attached or prior thereto.
    4. Judgment <&wkey;788(l) — Lien — Necessity por Recording Deed.
    The common-law rule that a judgment lien attaches only to such estate in land as is owned by judgment debtor at the time the abstract of judgment was filed, notwithstanding a prior unrecorded deed, has been abrogated by Vernon’s Sayles’ Ann. Civ. St. 1914, art. 6824.
    5. Trusts «=372(1) — Following Trust Property — Burden op Proop.
    The burden is upon the party claiming a resulting trust in land to trace the funds claimed as his own into the property purchased.
    6. Evidence <&wkey;113(8) — Cost — Value op Land.
    In an action wherein it was claimed that a transfer of land from husband to wife was fraudulent, testimony that land convoyed had cost Sgll an acre when bought 15 years prior to the transfer was insufficient to show the value of land under a claim that the land was transferred in' payment of a debt to the wife.
    7. Fraudulent Conveyances <&wkey;118(2)— Preperring Wipe.
    A husband may prefer his wife to another creditor in the payment of a debt which he owes her, provided the transaction is free from fraud, and no more property is conveyed than is reasonably necessary at its fair market value to settle the debt.
    8. Fraudulent Conveyances <&wkey;298(3)— Preperring Wipe.
    Evidence held to warrant a finding that a transfer of land from husband to wife was made for the purpose of defrauding creditors.
    Appeal from District Court, Taylor. County; Joe Burkitt, Judge.
    Suit by Nannie R. Diltz and another against J. T. Dodson and another. Judgment for defendants, and plaintiffs appeal.
    Affirmed.
    W. H. Graham, of Dallas, for appellants. Scarborough & Davidson, of Abilene, for appellees.
   DUNKLIN, J.

Mrs. Nannie R. Diltz, joined pro forma by her husband, W. L. Diltz, instituted this suit to restrain, by writ of injunction, the sale under execution of 320 acres of land which she claimed as her separate property, and which had been levied on to satisfy a judgment rendered against her husband, W. L. Diltz, in favor of R. W. Rogers, who, together with the sheriff levying the execution, were made parties defendant to the suit. From a judgment denying plaintiff the relief prayed for, she has prosecuted this appeal.

, The judgment upon which the execution was issued was rendered by the county court of Taylor county May 2, 1916, and an abstract of the same was duly filed for record in the record of deeds of that county on May 6, 1916; all statutory requirements necessary to make the record of such abstract of judgment a lien upon any real estate owned by W. L. Diltz, which was subject to execution being complied with. The cause of action asserted in that suit was a judgment which R. W. Rogers had theretofore recovered against W. L. Diltz in the county court of Carter county, Okl., on November 16, 1915. The judgment rendered in county court of Carter county, Okl., contains the following recitals which show the amount of judgment and the indebtedness of W. L. Diltz to R. W. Rogers upon which the judgment was based:

“It is being fully shown to the court that this suit is based upon the consideration of $422.50 paid by the plaintiff to the defendant for four head of mules, which the defendant claimed and represented to the plaintiff were free and clear and discharged of all’ liens and incum-brances, and that he had a perfect right to sell the same, when in truth and in fact the said four mules were then mortgaged and incumbered to the amount and extent of $422.50, and that the plaintiff was compelled to pay said amount on said mules, in addition to what he had already paid to the defendant for the same, and that the defendant’s title to said mules had wholly failed, and, being fully advised in the premises, the court doth find for the plaintiff, in the sum of $422.50, together with 6 per cent, interest thereon, from the 7th day of January, 1913, aggregating at this time $494.30, and that said amount shall draw interest from this date until paid at the rate of 6 per cent, per an-num.”

The judgment rendered by the county court of Taylor county was for the sum of $514.10, which was the aggregate of the principal and the accumulated interest of the former judgment.

On April 1, 1916, 1 month and 1 day prior to the date of the judgment rendered by the county court of Taylor county, Tex., and approximately 4½ months after the date of the judgment rendered by the county court of Carter county, Okl., W. L. Diltz executed to his son W. L. Diltz, Jr., a deed of conveyance, purporting to convey the 320 acres of land in controversy in this suit, also another tract of 240 acres of land, also two town lots in the town of Merkel. The consideration recited in that conveyance was “one dollar cash paid by W. L. Diltz, Junior, and the assumption of all indebtedness.” On the same day W. L. Diltz, Jr., received the deed of conveyance he executed a similar conveyance to his mother, Mrs. Nannie R. Diltz, which purported to convey to her the same property, the consideration recited in that instrument being “one dollar paid by Nannie R. Diltz and the assumption of all indebtedness.” All the property described in those conveyances was situated in Taylor county, Tex.

In the petition filed by plaintiff in this suit Mrs. Diltz claimed title to the 320 acres of land, in controversy as her separate property through the deed last mentioned; and, in addition to her prayer for a writ of injunction to restrain the sale of the property to satisfy the judgment, she also sought a decree removing the cloud from her title, cast thereon by the record of said abstract of judgment.

In their answer the defendants, after a general denial of all the allegations contained in plaintiff’s petition, pleaded specially that the conveyance from Wl L. Diltz, Sr., to his son, W. L. Diltz, Jr., and the conveyance from the son to his mother were executed for the purpose of defrauding the creditors of W. L. Diltz, Sr., and especially for the fraudulent purpose of avoiding payment of the debt he owed to the defendant Rogers, evidenced by the two judgments above mentioned, and that suoh conveyances were therefore null and void, leaving the title to the property in controversy still in W. D. Diltz, Sr., and subject to the payment of the judgment now held by Rogers.

The deed from the judgment debtor, W. L. Diltz, to his son and the deed from his son to Mrs. Nannie R. Diltz were both filed for record in the deed records of Taylor county on July 8, 1916, 2 months and 2 days after the abstract of judgment had been duly filed and recorded in the deed records of that county.

The trial was by the court without a jury, and as no findings of facts were filed by the trial judge, every reasonable presumption must be indulged in support of the judgment rendered.

By article 6824, 4 Vernon’s Sayles’ Texas Civil Statutes, it is provided that an unrecorded deed of conveyance to land “shall be void as to all creditors and subsequent purchasers * * * without notice.” And it is well established by a long line of decisions in this state that a creditor, who has fixed a lien upon land by the levy of a writ of attachment or other judicial process or by the filing of an abstract of judgment in the deed records is a creditor within the meaning of the article of the statute just referred to. McKaney v. Thorp, 61 Tex. 648, and decisions there cited.

It is also well settled that in a controversy between the holder of a prior unrecorded deed and such a creditor the holder of the unrecorded deed has the burden of showing, by proof, notice of his deed to such creditor at the time the latter’s lien attaches, or such notice prior thereto. Turner v. Cochran, 94 Tex. 480, 61 S. W. 923. There was no proof whatever offered by the plaintiff to show such notice to Rogers at the time the abstract of judgment was filed, or at the time the execution was levied upon the land. As noted already, Mrs. Diltz in her petition specially pleaded that she acquired title to the property in controversy through the deed from her son to her, mentioned above. That deed contains no recitals to show that the title therein attempted to be conveyed was for the separate use and benefit of Mrs. Diltz; in other words, it contained no recitals which would have the legal effect to make the property therein attempted to be conveyed the separate property of the grantee. Her husband testified upon the trial, in effect, that his conveyance to his son and the conveyance by the son to his mother was in pursuance of his purpose and intention thereby to vest title in his wife as her separate estate. If the deed under such circumstances did have the effect to vest legal title in the wife as her separate estate, then it would be held void under the statute because it was unrecorded when the judgment lien attached, and because of the absence of proof that at the time Rogers fixed his lien, or before that date, he had notice of such unrecorded deed.

Appellant insists that the judgment lien in favor of Rogers attached to such estate only in the land in controversy as was owned by W. D. Diltz, Sr., at the time the abstract of judgment wasi filed, notwithstanding the deed, under which his wife claimed, was unrecorded. Such is the common-law rule. But that rule has been abrogated by our registration statute, as is well settled by a long line of decisions of our Supreme Court, notably, Blankenship v. Douglas, 26 Tex. 226, 82 Am. Dec. 608; Grace v. Wade, 45 Tex. 522, and many other decisions which might be cited.

According to the testimony of W. L. Diltz, plaintiff’s husband, the couple were married in 1880, at which time Mi’s. Diltz owned 40 acres of land in Bosque county as her separate estate. Later the husband purchased 40 acres in the same county as his separate estate. The two tracts were kept until the year 1906 when they, together with 80 acres additional in the same county, were sold. During the year 1901 the couple moved to Taylor county, where they have resided ever since. The 320-acre tract of land in controversy was purchased in 1901 by W. L. Diltz, Sr., who took title thereto in his own name. The purchase price for the tract was a fraction over $11 per acre, one-third of which was paid cash, and purchase-money notes were given for the balance, due in one, two, and three years, the last of which matured in 1904, which was approximately two years prior to the sale of the 40 acres owned by Mrs. Diltz in Bosque county. He further testified as follows with reference to those notes:

“My recollection is that I paid them at maturity. When I sold out down yonder, this 160 acres in 1906, I put it up over against the debt on that 320 acres. I guess you would call it that. I do not think that before I had sold the 160 aeres I had finished paying off these notes against this property out here. My recollection is that we paid two of those notes out of that. That would he about $1,400. The notes were made in 1901, and would be due in 1902 and 1903. This land (160 acres in Bosque county) was sold in 1906. I do not think that the money I got out of the 160 acres was applied on the 260-aere tract (evidently referring to the 260-aere tract deeded by the witness to his son and¡ by the son to Mrs. Diltz). I worked for the money with which I made the payment on the 260-acre tract which I bought in 1906. I would not be positive — I could not be — that I paid those notes on that 320 acres of land at maturity. My recollection is that I paid them out of that land. I do not know that it is true that I paid those notes, like I said awhile ago, at maturity. I think I paid them out of the land. I do not know when I sold the land. It is my best recollection that I paidj as many as two of those notes out of the land. I conveyed to my wife this 260-acre tract of land. The conveyance to my son was merely a means of getting the title into my wife. My wife was demanding a settlement of me. With regard to whether or not she was demanding one-half interest in the community estate, that was her individual property. She claimed that as her separate property. She felt like the 260 acres and the 320 acres would satisfy her as her interest in the community property, as her separate estate, if that is the way you want to put it. That seemed to be the proposition.”

He further testified, in substance, that at the time of the conveyance to his wife he owed debts aggregating approximately about $10,000; that on April 1, 1916, when the deeds mentioned above were executed, he also conveyed by deeds three other tracts, consisting of 171 acres in Jones county, worth $30 per acre, against which there was an indebtedness of $1,760, a tract of 335 acres in Fisher county, worth $25 per acre, against which there was an incumbrance of $1,880 and another tract of 640 acres m Gaines county, worth $6 per acre, against which there- was an incumbrance in favor of the state of about $960, and still another tract in Jones county of about 80 acres, worth $25 per acre, against which there was an in-cumbrance of $600. He also owned about 20 head of cattle, 12 head of horses and mules worth about $1,000. All of the property just mentioned, real and personal, was transferred by W. L. Diltz, Sr., to his children on April 1, 1916, the same day that he executed the deed to his son for the use and benefit of his wife. According to his testimony the conveyances, last mentioned, to his children were by way of a division of his property among them. After such conveyances were made he owned a homestead which was occupied by himself and wife, worth about $3,000, but he owned no other property whatever with which to I pay any of his debts. W. L. Diltz, Sr., was the only witness who testified at the trial of the case; his testimony and the documentary evidence being the only evidence shown in the statement of facts. He gave illness of his wife as the reason why she was not present to testify upon the trial, but there is no suggestion in the record of any effort made to postpone the trial in order to procure her testimony.

Appellant insists that the testimony of W. L. Diltz showed that the purchase money realized from the sale of Mrs. Diltz’s 40 acres in Bosque county which she owned at the time of her marriage was used in the purchase of the 320 acres in controversy, and that therefore she owned the equitable title to the property before it was conveyed to her by her husband through her son on April 1, 1916, and that, as such equitable interest in the property was not subject to registration, our registration statute would not control, but that the common-law rule, which would limit the judgment lien of Rogers to such interest only as W. L. Diltz owned in the property at the time the lien attached, would govern.

This theory of right to a recovery by Mrs. Diltz is advanced for the first time in her Driefs, filed in this court. She alleged that “she acquired the title to said property from her son, W. L. Diltz, Jr., by a deed of date April 1, T916, filed for record July 8, 1916, and recorded in Book 88, page 446, of the Deed Records of Taylor County, Tex., and that said W. L. Diltz, Sr., has no right, title, or interest in said property.” The petition contains no allegation that Mrs. Diltz acquired title to the property prior to the date of that deed, nor in any other manner than through that conveyance.

It has been frequently decided that as resulting trusts cannot be recorded, in a controversy between the beneficiary of such a trust and a subsequent creditor of the one who holds the title for the benefit of the cestui que trust, the registration statutes áre not applicable. See Parker v. Coop, 60 Tex. Ill, and decisions there cited.

It may be doubted that plaintiff’s petition would, in any event, warrant the relief prayed for upon that theory; and even though it should be held sufficient to present that issue it is clear, at all events, that she did not establish title to the entire interest in the 320 acres, since, according to the uncontra-dieted testimony of her husband, the cash payment of one-third of the purchase price of the land was from community funds.

It is a familiar rule, further, that in order to establish such a resulting trust, it is incumbent upon the party claiming it to trace the funds claimed as his own into the property purchased. The burden was upon Mrs. Diltz to make such proof in this case, and that she has failed to do so with any reasonable certainty we think is clear from tlie testimony of W. L. Diltz himself, set out above.

Another theory advanced by appellant in her brief, but not suggested in her pleadings is that the 320-acre tract, the 260-acre tract, and the two town lots which were conveyed to her by her son were really conveyed in payment of an indebtedness to her arising from the use by her husband of the proceeds of the sale of her 40-acre tract in Bosque county, which, according to the testimony of her husband, amounted to approximately $1,200. We recognize the rule announced in numerous decisions of our state that a husband may prefer his wife to another creditor in the payment of a debt which he owes to her, provided the transaction be free from fraud, and no more property is conveyed than is reasonably necessary, at its fair market value, to settle the debt. Owens v. Clark, 78 Tex. 547, 15 S. W. 101.

But there was no proof whatever of the value of the property in controversy at the date of the deed to Mrs. Diltz from her son. Testimony of her husband that it cost a fraction over $11 per acre when he bought it 15 years prior to that date, cited by appellant, falls far short of such proof. Nor was there any testimony to show just what indebtedness, if any, Mrs. Diltz agreed to assume as a part consideration for the conveyance to her from her son.

Furthermore, the testimony of W. L. Diltz, taken as a whole, was so contradictory on the vital issues that, when considered in the light of the surrounding circumstances, including the fact that he attempted to dispose of all his property at the same time by transferring it to the different members of his family, leaving indebtedness aggregating about $10,000 with no property whatever reserved to pay the same, Hie trial court was fully warranted in concluding that the conveyance to Mrs. Diltz through the medium of her son was not a bona fide transaction, but was a mere subterfuge, resorted to by Diltz, and knowingly participated in by his wife, for the purpose of defrauding his creditors, especially appellee Rogers.

For the reasons indicated, all the assignments are overruled, and the judgment is affirmed.
      ©=»Por otter oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      dfcoFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes ,


author: BOXCE, J.

text:
    ST. PAUL FIRE & MARINE INS. CO. v. PIPKIN.
    (No. 1439.)
    (Court of Civil Appeals of Texas. Amarillo.
    Dec. 18, 1918.)
    1.Insueancb <&wkey;>500 — Payment of Policy— Agreed Valuation.
    The parties to an insurance contract may agree upon the value of the property insured and the specific amount to be paid for its loss or damage, and, in the absence of fraud, such agreed valuations are conclusive.
    2. Insurance <&wkey;579 — Actions on Policy-Settlement — Validity.
    Where an insured under a hail policy signed a proof claim submitted by the adjustor specifying the amount of damages, but subsequently claimed larger damages in writing, the proof of claim was not conclusive on insured as a settlement; since it was a mere offer which had not been accepted by the insurer prior to withdrawal.
    3. Insurance &wkey;>668(14) — Actions on Policy — Settlement—Questions oe Fact.
    In an action on a hail insurance policy, where defendant set up a settlement agreement,a peremptory instruction for defendant was properly refused, where there was sufficient evidence to make an issue as to whether insured had a right to set such settlement aside for mistake as to his rights.
    4. Insurance <&wkey;539(l) — Notice and ■ Proof oe Loss — Statutes.
    Vernon’s Sayles’ Ann. Civ. St. 1914, art. 5714, requiring stipulations as to notice of claims for damages to be reasonable, invalidating a stipulation for notice of less than 99 days, and providing that notice shall be presumed to be given, unless want thereof be expressly pleaded under oath applies to notice and proofs of loss under a hail insurance policy.
    5. Insurance &wkey;>561 — Proof of Loss-Waiver.
    An insurer under a hail insurance policy, who, after having received an unsworn claim for damages, sent an adjuster who viewed the damage, admitted liability, presented a form of proof, filling in only the percentage of loss, and subsequently tendered a settlement after the time limited for filing a formal proof of loss, thereby waived the formal proof, notwithstanding a provision in the policy that no denial of liability or other act by the company should be deemed to waive such proof.
    6. Insurance <&wkey;282(2) — Application—Misrepresentations — Interest of Insured.
    An application for hail insurance, requesting insurance “on all interest in”, a specified number of acres of which applicant was tenant, was not an assertion that applicant owned all the interest in the insured property, but that he desired to insure all his interest, and hence was not a misrepresentation avoiding the policy.
    7. Insurance &wkey;>115(4) — Hail Insurance— Insurable Interest.
    A tenant farming land under agreement with the owner to do the work, the owner to furnish the money, that whatever was made over living expenses was to be paid on a debt owing by the owner for half of the land, and; that half of the land when so paid was to belong to the tenant had an insurable interest in the grain growing thereon.
    8. Insurance &wkey;»390 — Hail Insurance — Actions on Policy — Notice of Discovery of Misrepresentations.
    Vernon’s Sayles’ Ann. Oiv. St. 1914, art. 4948, providing that misrepresentations in applications for insurance will constitute no do-£ense, unless the insurer shall show that. he gave notice within 90 days after discovering the falsity of the misrepresentations, applies to hail insurance.
    9. Teial <&wkey;261 — Instructions—Refusal of Instructions Requested as a Whole.
    Where .instructions are requested as a whole, some of which are inconsistent with each other and others obviously improper, the court need not separate the good from the bad and is justified in refusing them all.
    10. Insurance <&wkey;668(14) — Action on Policy-Question of Pact.
    In an action on a hail insurance policy, if the insured signed compromise because he misapprehended the provisions of the policy and his rights thereunder, whether such mistake was the result of his own negligence was a question of fact.
    11. Insurance <&wkey;579 — Construction of Policy by Insured — Negligence of Insured.
    Where a mistake as to insured’s right under a hail insurance policy inducing him to sign a compromise is mutual or induced by fraud, equity will not ordinarily refuse relief on the ground of negligence on plaintiff’s part.
    12. Insurance <©=163(½) — 'Hail Insurance —Construction of Policy — “Growing Grain.”
    That a hail insurance policy insured “growing” grain did not prevent recovery, where the grain when destroyed by hail was ripe, in view of other provisions in the policy insuring the grain up to a certain d,ate and exempting the insurer from liability after the grain was cut.
    [Ed. Note. — Por other definitions, see Words and Phrases, Second Series, Growing Grain.]
    Appeal from District Court, Ochiltree County; W. R. Ewing, Judge.
    Action by Knox Pipkin against the St. Paul Eire & Marine Insurance Company. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    E. C. Gray, of Higgins, and Lattimore, Bouldin & Lattimore, of Ft. Worth, for appellant. í
    R. T. Correll, of Ochiltree, Coffee & Holmes, of Miami, and Hendricks & Mood, of Amarillo, for appellee.
   BOXCE, J.

Suit was brought by appel-lee, Kn'ox Pipkin, against appellant insurance company on a policy insuring certain oat and wheat crops against damage from hail. Said policy sued upon insured “Knox Pipkin against loss or damage to the following described growing crops from hail, between the 19th day of May, 1917, m., and the 15th day of September, 1917, at m., * * * on all interest in one hundred acres winter wheat, on section 54, block R, not to exceed $10.00 per acre, on all interest in seventy-six acres oats on section 54, block R, not to exceed $10.00 per acre, etc.” Said policy provided. that it was subject to the conditions printed oh the following page thereof, one of such conditions being the following:

“That in case of total destruction of the crops herein specified by hail, the amount insured per acre shall be paid by the company and that in case of a partial damage the company will pay the same percentage of the amount insured per acre as the grain destroyed bears to the crop had no damage by hail occurred — thus if one half of the crop insured is destroyed the company will pay one half of the amount of insurance per acre, etc.”

Plaintiff alleged that during the term of the policy the oat crop was totally destroyed by hail and the wheat crop suffered a damage of 90 per cent. He sued for and recovered $10 per acre, or $760, oh account of total destruction of the oats, and $9 per acre or $900 damages to the wheat. The provisions in the policy referred to were treated as fixing the value of the property, and no allegations or proof were made as to the actual value of the grain.

Appellant’s first assignment is based on the proposition that the policy was only a contract of indemnity, that the plaintiff could therefore only recover the actual loss sustained, and that he should be required to show the actual value of the grain destroyed. The parties to an insurance contract may agree upon the value of the property insured and the specific amount 'to be paid for its loss or damage from the cause insured against, and in the absence of fraud such agreed valuations are conclusive. R. O. L. vol. 14, p. 1305, § 479; Cyc. vol. 19, p. 836; Borden v. Hingham Fire Ins. Co., 18 Pick. (Mass.) 523, 29 Am. Dec. 614; Buffalo Elevating Co. v. Prussian National Insurance Co., 64 App. Div. 182, 71 N. Y. Supp. 922, quoting from Wood on Insurance, § 43. The policy sued on, as we construe it, attempts to fix by agreement the value of the grain crop per acre, and provides for payment for loss and damage on the basis of such value. There does not appear to us to be any repugnancy between the terms of the two clauses of the contract which we have quoted. Construed together, they seem to be entirely consistent and clearly express the meaning indicated above.

Under the second assignment appellant complains that the court refused to give a peremptory instruction in its favor on the ground that a binding agreement for compromise of plaintiff’s claim had been made. The appellant pleaded that after the damage occurred on, to wit, “July 19,1917, plaintiff contracted in writing with defendant for a compromise and settlement of plaintiff’s alleged claim against defendant, which is the subject of this suit, whereby plaintiff agreed to accept of defendant $794.00 in full and complete settlement of this alleged claim against defendant and pursuant to said contract defendant tendered to plaintiff said sum, and said contract and tender is still in full force and effect.” To this answer the appellee replied that the compromise agreement was entered into on the mistaken belief that he was only entitled, under the terms of the policy, to recover the actual value of the crop; that this belief was induced by false representations to that effect, relied upon by him, made by the adjuster of the company at a time when the policy was not accessible for inspection.

The evidence shows that some time after the damage from hail the adjuster of the appellant came to see appellee in reference to adjusting the damage. Appellee testifies that the adjuster agreed with him that the oats were a total loss, but that said adjuster represented that the policy provided only for payment of the actual loss, and that he (the adjuster) estimated such loss, based upon the actual value of the wheat and oats destroyed; to be $4 per acre, and that this was all that could be paid under the terms of the policy. It also appears from the evidence that this conversation occurred out in the field; that the appellee did not have the policy at the time and had not read it carefully and believed the statements made to him by the adjuster. The adjuster claimed to be in a hurry, and, after the conversation just detailed, appellee signed an instrument, which appears to be in the nature of a claim or proof of loss, and in which the total amount of the claim was stated to be $704, based on 40 per cent, damage on 100 acres of wheat and 76 acres of oats. This instrument was not read over by appellee, and only the statement of the per cent, of damage was filled in; the agent stating that he would fill in the other blanks later. As stated above, the instrument appears to be simply a claim which states the issuance of the policy, description of the grain insured, the occurrence of the hailstorm, and amount of damage and claim on account thereof. Following the signature of the plaintiff, it contained this statement, signed by the adjuster:

“After a careful examination of the property damaged by hail, so far as necessary to determine the true and actual loss, I hereby certify that the above claim is just and true, according .to the best of my knowledge and judgment and no more than the insured is entitled to receive.”

This claim was dated July 19th, and thereafter, on August 15th, the appellant tendered to the appellee draft for $704, which appel-lee refused to accept. Appellee testified that within a few days after he signed this claim he read his policy, concluded that he was entitled to settlement on the basis of the valuation of $10 per acre for the grain and •.that he would not accept $704, and so notified the company by letter in about two weeks after the conversation with the adjuster.

We think, under these facts, that there are at least two reasons why a peremptory instruction in favor of the appellant, based on the ground that there was a binding written agreement for settlement made as pleaded, would not have been proper:

First, because the evidence does not conclusively show that any such agreement was made; the alleged written agreement referred to was not in terms any agreement at all. At most, it could only be impliedly a proposal or offer to accept the sum stated in settlement of the amount for which the claim was made. It is elemental that, in order to constitute a binding agreement or contract, there must have been an acceptance by the other party, the insurance company here, so that it too became bound. No acceptance of this offer, if it be one, is conclusively shown prior to the tender to the appellee of the draft for $704. The evidence was sufficient to have justified the conclusion that the offer of appellee was withdrawn by a letter to the company, some time prior to the tender of the draft. If the offer was withdrawn prior to its acceptance, then, of course there was no agreement for settlement.

Second, because the evidence is sufficient to make an issue as to whether the appellee had the right to have such settlement agreement, if one was made, set aside on account of the mistake as to his rights under which it was made. Insurance Co. v. Findley, 29 Tex. Civ. App. 494, 68 S. W. 695; Moreland v. Atchison, 19 Tex. 308; Ramey v. Allison, 64 Tex. 703; Altgelt v. Gerbic, 149 S. W. 236; Smith v. Jones, 192 S. W. 798; West v. West, 9 Tex. Civ. App. 475, 29 S. W. 244; Lott v. Kaiser, 61 Tex. 665; Hudson v. Glens Falls Ins. Co., 218 N. Y. 133, 112 N. E. 728, L. R. A. 1917A, 482; Pomeroy, Equity Jurisprudence, §§ 849, 850. This mistake, according to appellee’s testimony, was not one purely of law, but both law and fact; that is, as to the terms of the contract itself as well as the construction thereof. This mistake was induced by the representations of the appellant’s agent, who had, or might be presumed to have, superior knowledge as to such matters. Failure of the appellee to consult the policy to refute the statements so made might, under the circumstances, be justified. Under the rules as announced by the authorities referred to particularly as stated by Pomeroy, whose statement is often quoted by the authorities, including some of those cited by us, we think the facts sufficient to make an issue for submission to the jury. .

Appellant, by the third assignment, asserts that it was entitled to a peremptory instruction because the evidence shows that no proof of loss was made as required by the insurance policy. This provision was as follows:

“The assured shall, within sixty days after the loss, unless such time is extended by the secretary of this company, make proof of loss under oath, stating the date and number of his policy, a description of the land upon which the grain was damaged by hail; date of loss or damage, the percentage of damage done to grain on each piece of land; a failure by the assured to give notice or make proof of the loss within the time herein specified shall cause a forfeiture of any claim under this policy. No denial of liability or other act on the part of the company shall be deemed to waive or dispense with the furnishing of such proof.”

No such, formal proof as here provided. appears to have been made, the only proof made being contained in the unsworn statement made in the notice given within 48 hours after the hail and statement made in the claim and letter in reference thereto already referred to. It has been held in a number of cases that article 5714 is applicable to notice and proofs of the character provided for in this policy. Ætna Life Insurance Co. v. Griffin, 58 Tex. Civ. App. 198, 123 S. W. 432; Maryland Casualty Co. v. Hudgins, 72 S. W. 1047; Texas State Insurance Co. v. Herndon, 184 S. W. 283; Royal Casualty Co. v. Nelson, 153 S. W. 674; Insurance Co. v. Hare, 180 S. W. 282; Insurance Co. v. Mountcastle, 200 S. W. 862; Western Indemnity Co. v. F. & A. M. 198 S. W. 1092; Floyd v. Illinois Bankers’ Association, 192 S. W. 607; North American Accident Insurance Co. v. Miller, 193 S. W. 757. The two cases last cited were decided by this court. Whatever doubt may have been entertained as to this question as an original proposition, we do not consider it now an open question in this court and need not discuss it further. Under the provisions of this article, this clause of the contract would be void.

We also think that there was an issue of fact as to whether appellant had waived the filing of the formal proof, which would have made it improper to instruct peremptorily on this ground. The appellee pleaded that the filing of these proofs was waived by the defendant. The acts of waiver, viewed most favorably to appellee, as we must view them in passing on this assignment, are: That the company received written notice, signed by appellee, which contained every statement of fact necessary to be contained in the proof required by the policy, exeept that the date of the policy was omitted, though its number was given, and the statement was not sworn to. Without waiting for more formal proof, the company sent its adjuster to view the damaged crops, who examined them fully, admitted liability, and himself presented to the appellee a form of proof, filling in only the per cent, of loss under the circumstances already detailed, evidently waiving any requirement that it be sworn to. Thereafter, within the 60 days, the company was notified in writing that the appellee claimed the amount stated in the original notice. No objection was made to the form of proof, but the company, after receipt of this letter, tendered the $704 in settlement of the policy, and, after the 60 days, tenders and is still tendering in this court such amount.

These acts, unless their effect is to be conclusively controlled by that provision of the policy which says that “no denial of liability or other act on the part of the company, shall be deemed to waive or dispense with the furnishing of such proof,” are unquestionably sufficient to constitute a waiver. Insurance Co. v. Meyer, 9 Tex. Civ. App. 7, 29 S. W. 95; Michie’s Digest, vol. 10, pp. 677-683; Equitable Life Insurance Co. v. Ellis, 105 Tex. 526, 147 S. W. 1156, 152 S. W. 627, 628; Georgia Home Insurance Co. v. Morarity, 37 S. W. 632; Providence Insurance Co. v. Wolf, 168 Ind. 690, 80 N. E. 29, 120 Am. St. Rep. 395; R. C. L. vol. 14, p. 1349; 2 May on Insurance, 469 (c). As to the effect of such a provision last above quoted, May, in his work on Insurance, says:

“A clause to the effect that no act of the company, except an express written declaration, shall waive the requirements in regard to proofs, will not prevent the company from estopping itself by act in pais.” Section 473a.

This statement is only the application to the insurance contract of a general principle recognized in the law of contracts that parties may not, by contract, limit their freedom of contract or right, by conduct or agreement sufficient for that purpose, to change or-modify the rights and liabilities growing out of the contract containing the attempted limitation. C. J. vol. 13, p. 594, § 611, and authorities cited; Bartlett v. Stanchfield, 148 Mass. 394, 19 N. E. 549, 2 L. R. A. 625. This principle is well stated by Justice Holmes of the Massachusetts Supreme Court, in the case last above cited, as follows:

“Attempts of parties to tie up by contract their freedom of dealing with each other are futile. The-contract is a fact to be taken into account in interpreting the subsequent conduct of plaintiff and defendant, no doubt. But it cannot be assumed, as a matter of law, that the contract governed all that was done until it was renounced in so many words, because the parties had a right to renounce it in any way and by any mode of expression they saw fit. They could substitute a new oral contract by conduct and intimation, as well as by express words.”

Under the circumstances we have detailed, we think the question of waiver, notwithstanding the provision referred to, was still one of fact for submission to the jury.

The fourth assignment is multifarious, but we will consider it as suggesting fundamental error in so far as it complains of the refusal to instruct a verdict for the defendant on the alleged ground that any right of recovery was defeated by an alleged misrep-reservation in the application for insurance. The proposition under this assignment is as follows:

“A statement in an application for insurance, ■wliicli is a part of the contract, that one owned all interest in the insured' property when in fact he does not own all interest, is a material misrepresentation and the policy void.”

Reference to ‘the application fails to sustain the statement that the representation referred to was that appellee owned the entire interest in the grain. This statement, in so far as it is material here, is as follows:

“I, Knox Pipkin, * * * hereby make application to the St. Paul Eire & Marine Insurance Company, for insurance upon growing grain, against damage by hail only, for the season of 1917, * * * on the following described property: State exact interest in crops, all, one-third, or one-half.
“On all interest in one hundred acres of wheat on Sec. 54, Block R. * * * On all interest in seventy-six acres of oats, etc. * * * I hereby declare that I am the tenant of the above described land containing 640 acres, with growing crops named thereon.”

We construe this statement to be, not an assertion that the applicant owns all the interest in the insured property, but that he is desirous of insuring all interest. Appellee testified that he was farming the land under an agreement with his father-in-law, the owner, to this effect: That appellee was to do the work; the father-in-law was to furnish the money that was needed to run the farm, and that whatever appellee made out of the farm over living expense was to be paid “to Walsted on what King (the father-in-law) owed himi for half of the land.” When this debt was paid out in this way, appellee was to have half the land. Appellee is thus shown to have an insurable interest in the grain if it be conceded that he would not be held to absolutely own the entire interest, which we do not decide. Merchants’ Insurance Co. v. Scott, 1 Posey, Unrep. Cas. 534, 538; Merchants’ Insurance Co. v. Dwyer, 1 Posey, Unrep. Cas. 441-445; Continental Fire Insurance Co. v. Wingfield, 32 Tex. Civ. App. 194, 73 S. W. 847; R. C. L., vol. 14, p. 910. We are also of the opinion that if it be conceded that the statement is a representation as to the ownership, and that' such misrepresentation is material, appellant has not shown itself to be in position to urge the defense. Vernon’s Sayles’ R. C. S. art. 4948. However, the question of materiality would be a question of fact. R. O. S. 4947. We see no reason to doubt that these provisions apply to this character of insurance. They are now a part of a chapter devoted to the subject of insurance and entitled “General Provisions.” They were originally adopted as part of chapter 15, R. C. & 1895; and evidently intended to be general in their, application to the subject of insurance. Acts 1903, p. 94. We therefore overrule the fourth assignment of error, and also the seventh assignment, for the same reasons.

The instructions and issues requested, made the basis of the fifth, eighth, ninth, and tenth assignments, were included with several other instructions in one instrument, styled “Defendant’s Request for Special Issues,” and thus appear to have been requested and refused as a whole. Some of these instructions are inconsistent with each other, and some of them obviously improper. The court was not required to separate the good from the bad, and was justified in refusing the instructions so requested as a whole. This reason alone, we think, would be sufficient for overruling said assignments, except possibly the tenth. It may be that, where an issue is made by the pleading and evidence and the court has failed entirely to charge on it, such defective request would be sufficient to call the court’s attention to the matter and require him to submit a proper charge. We have, however, considered these assignments and are of the opinion that they should be overruled for the following additional reasons:

The request referred to in the fifth assignment was properly refused because, under the circumstances, the question as to whether appellee’s mistake as to the provisions of the policy and his rights thereunder was the result of his own negligence would be, in any event, a question of fact, and the charge peremptorily informs the jury that, if appellant’s failure to read and know the provisions of his policy was the cause of his signing the compromise, then the jury should find that said contract was not entered into under a mistake of mutual fact. Besides, where the mistake is mutual or induced in one by the fraud of the o1;her, equity will not ordinarily refuse relief on the ground of negligence on the part of the plaintiff. San Antonio National Bank v. McLane, 96 Tex. 48, 70 S. W. 202; Kelley v. Ward, 94 Tex. 289, 60 S. W. 311; Littlefield v. Clayton Bros., 194 S. W. 197, section 4 of opinion.

There was no error in the refusal to submit the issue referred to in the ninth assignment. Mistake as to the contents of this instrument, the claim signed by appellee, was not a material issue in the case. Relief was granted on the theory that this instrument was not binding, not because of a mistake as to its contents, but because it was signed under a mistake as to appellee’s rights.

The charge referred to in the ninth assignment was properly refused. If the insurance company’s agent represented that the policy provided only for payment upon basis of the actual value of the grain, such representation was either innocently and mistakenly made or was fraudulent. The right's of the plaintiff would be the same in either event, though the presumption would be that the false representations were innocently made. Besides, the issue submitted was simple and could be sufficiently understood without this instruction if it was really proper under the circumstances.

The tenth assignment complains of the .refusal of the court to submit an issue as to whether plaintiff’s crop was “growing” grain at the time of the hail. There was evidence that would warrant the conclusion that the wheat was matured and ready for harvesting. Plaintiff testified that he intended to begin cutting it on the next day after the hail. It seems to be appellant’s contention that the policy covered only loss or damage while the crop was in the actual state of growth through the assimilative processes of plant life. We do not think it was the intention of the policy to limit its duration to any such uncertain period of time. While the policy described the property insured as growing crops, this provision being quoted in our preliminary statement, that description only applied necessarily to the condition of the property at the time the policy was written. The following additional provisions of the policy indicate the'real intention of the parties as to the time of its termination: The insurance was between the 19th day of May, 1917, at noon, and the 15th day of September, 1917, at noon, “and in no event shall the company be liable after the grain is cut ⅜ ⅜ * in case any of the’ crops insured shall be so injured by drouth, frost or being overripe, or from any other cause, so that such portion will not result in a profit over and above the actual cost of cutting, harvesting and marketing, then the company shall not be liable for any damage which may occur from hail.” The construction urged by appellant would defeat in a measure the purpose of the insurance, for there would be a period of. time, just prior to harvesting, when protection from hail might be most necessary, when the rights of the parties under the policy would he very uncertain. We think it was evidently the intention to insure the grain until it was cut, or had reached such a stage of overriponess as that it was not worth the expense of harvesting.

The proper predicate for admission of the oral testimony as to the contents of the written instrument, which was excluded, and is referred to in the sixth assignment, was not laid. Por the reasons given in our discussion of the fourth assignment, this testimony would also have been immaterial.

The eleventh assignment is unintelligible. We find no such paragraph in the motion for new trial, and special issue No. 3, referred to in the assignment, does not have to do with the issue of waiver at all, as the assignment seems to assume. Our holding on the question of waiver already announced would result, in any event, in overruling this assignment.

What we have said in the discussion of other assignments is sufficient, also, to dispose of the twelfth and thirteenth assignments, which we overrule. ,

We have found no reversible error assigned, and the judgment is affirmed.
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author: BUCK, J.

text:
    JAMISON GIN CO. et al. v. MEASELS.
    (No. 8944.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    Dec. 14, 1918.)
    1. Tbiai, <&wkey;352(4) — Special Issues — Submission.
    A special issue, simply whether defendants were guilty of negligence, should not he submitted over timely exception to it as not confined to negligence pleaded as well as shown by evidence.
    2. Trial &wkey;>105(2) — Instructions—Confining Jury to Negligence Pleaded.
    Though evidence of negligence not pleaded is admitted without objection, defendant’s requested instruction that it be disregarded, and that damages cannot be found by reason of such negligence, should be given.
    Appeal from District Court, Wichita County; Edgar Scurry, Judge.
    Action by J. L. Measeis against the Jami-son Gin Company and another. Judgment for plaintiff, and defendants appeal.
    Reversed and remanded.
    Carrigan, Montgomery & Britain, of Wichita Palls, for appellants.
    B. D. Sartin and E. W. Napier, both of Wichita Falls, for appellee.
   BUCK, J.

J. L. Measeis filed suit against J. B. Jamison and the Wichita Cotton Oil Company as joint owners of a cotton gin situated in Wichita Palls, Tex., to recover damages on account of the alleged improper and negligent operation of the gin, which negligence it was claimed had damaged plaintiff in the use of his property for residential purposes and also had injured plaintiff’s health. It was alleged that defendants had permitted quantities of hulls, lint, trash, and waste to accumulate on their premises until it had rotted and was dangerous to the health of the community; that they also had permitted dust, lint, and waste matter to be discharged in the air by such gin, and that same was carried by the wind onto plaintiff’s premises, and settled in his well and upon his premises, and in his residence and upon his furniture therein, and deprived plaintiff of the enjoyment of his home, and injured his health. It was further alleged that defendants had permitted stagnant water to accumulate on their premises and in the alley near plaintiff’s house, and that this caused the hulls and waste matter to rot and breed mosquitoes, and that the water seeped into his well and ruined it; that the gin was operated at night, and made loud noises and greatly annoyed plaintiff, and that all the acts of defendants hereinbefore mentioned were in violation of a city ordinance of the city of Wichita Falls.

The defendants answered by exceptions, general and special, and by general denial, and specially pleaded that the plaintiff had recovered a judgment against the defendant Wichita Cotton Oil Company, for $100, and that said judgment provided that the same covered all damages to its date, February 10, 1913, and covered all damages by reason of erection of the gin, but did not bar plaintiff from the recovery of damages for negligence or improper operation in the future.

The cause was submitted to a jury upon special issues, which, with the answers thereto, are hereinafter set out:

“Special Issue No. 1. Were the defendants in the years 1913 and 1914 guilty of negligence, as that term has been defined in this charge? Answer: Yes.
“Special Issue No. 2. If you have found in answer to issue No. 1 that the defendants negligently operated the gin, and that the plaintiff was damaged, then you will find such sum as you believe from the evidence will reasonably compensate the plaintiff for such damage, if any, and in estimating his damages, if any, you will take into consideration the annoyance and inconvenience, if any, suffered by the plaintiff, in the use and enjoyment of his residence, which was caused by the lint being deposited upon his residence and premises, if any, the inconvenience and noise, if any, and the obnoxious odors, if any, the injury to his health, if any, which was caused by the negligent operation of said gin, if any, if you have found that the same was negligently operated. Answer by stating the amount. Answer: $500.00.”

Appellant urges error in the form in which special issue No. 1 was submitted to the jury, contending that said issue as submitted did not confine the jury, in finding negligence, to the manner of the operation of the gin or to anything done in connection with the gin, or to the elements of negligence with reference to the operation of the gin alleged in plaintiff’s petition; that as the issue was submitted, the jury were authorized to find negligence in respects not sustained by the pleadings. Defendants seasonably filed their exceptions to the form in which the issue was submitted, but did not submit a charge in which the issue of negligence was submitted with the limitations which the appellants here claim should have been made. Yet said objections did call the attention of the trial court to the very defect here urged, to wit, that in the submission to the jury of the question of negligence vel non on the part of defendant, the jury were not confined to negligence in the manner of operating the gin, or to anything connected with the gin, but that, in effect, it permitted the jury to find negligence in respects not pleaded; ¿hat it was the duty of the court to submit the specific act or acts of negligence raised by the pleadings as further limited by the evidence, and none other. We think the criticism is well taken, and that the charge in the form given, over objections, constitutes error. In K. C., M. & O. Ry. Co. v. Cole, 183 S. W. 138, writ denied, it is said:

“The second and third assignments allege error in the submission of the issue, and' the overruling of defendant’s objection thereto, ‘Was the defendant railway company guilty of negligence in colliding with plaintiff’s automobile?’ to which issue the jury answered, ‘Yes.’ It is urged that, plaintiff having pleaded the specific acts of negligence relied upon by him for his recovery, it was reversible error for the trial court to instruct the jury upon the issue of negligence without confining the finding to the specific acts alleged. We think the issue as given is subject to the criticism made. Undoubtedly it is proper for the court, in the submission of the question of negligence to the jury, to limit its application to the allegations of plaintiff’s petition, as further circumscribed by the evidence, and not to allow the jury to speculate or surmise as to grounds of negligence not pleaded.”

In Railway Co. v. Harvey, 27 S. W. 423, the court said:

“The other portion of the charge, which directed the jury to find for the plaintiff if the defendant was guilty of negligence in any respect which contributed to plaintiff’s injury, was too broad. It gave the jury too much latitude, and left them to determine from the evidence what was negligence, when the right of plaintiff to recover should have been confined to the acts of negligence, if any, alleged by plaintiff in his petition to have caused the injury.”

In the seventh assignment error is alleged because of the failure of the court to give defendants’ requested charge as follows:

“You are instructed that you cannot find any damages by reason of the manner in which the closet or privy was used or maintained on defendants’ premises, and you will disregard all evidence as to this matter.”

Plaintiff’s petition fails to allege that there was negligence in the manner in which the closet or privy was used or maintained on the premises of defendants. The plaintiff testified as to the privy as follows:

“All of that period»there was a toilet there on that lot. The toilet was in pretty bad condition —a long time it was not cleaned out at all — and no roof on it, and if it rained, it rained in there. There was a ditch dug there. I do not know whether it was ever cleaned out or not. The toilet was located right between my well and the cotton seed house, and about 76 feet from my well and kitchen. I was in the toilet once or twice, and it was at least half full of filth; once or twice I was out there, and it was up to the top of the seat. I think it remained that way the whole of the season. I never noticed any odors from the toilet on my place. When you are continually staying at a place you get more or less used to it, and do not notice it so much. I had what Dr. Hughes pronounced a spell of typhoid fever. I was taken down September 17, 1914. I was down for 40 days with typhoid fever.”

Though this evidence was admitted without objection, we think that, as there were no pleadings to sustain it, the jury should have been instructed, upon request of defendants, to not consider the evidence as to the unsanitary condition of the toilet as any proof •of negligence, and that the refusal of the court to give the instruction requested constituted reversible error. It has been held (San Antonio Traction Co. v. Yost, 39 Tex. Civ. App. 551, 88 S. W. 428) that where an instruction authorizes a finding for plaintiff on an issue not made by the pleading, the error, though not assigned, is so fundamental as to require the court to act on it. In Denison v. League, 16 Tex. 408, our Supreme Court says:

“There is no rule that has been so stringently enforced in this court as the rule that the allega-ta must be broad enough to let in the proof, and that no evidence, not supported by the al-legata, can sustain a verdict.”

See Loving v. Dixon, 56 Tex. 75. In G., H. & S. A. Ry. Co. v. Scott, 18 Tex. Civ. App. 321, 44 S. W. 591, Justice Ely of the San Antonio Court of Civil Appeals says:

“Having arrived at the conclusion that the testimony as to the injuries resulting from the enema was illegal and improper, the question is presented by appellee that, the evidence having been permitted to go to the jury without objection, the motion to exclude was properly overruled, and the court should have presented the issue raised by the testimony to the jury. It is the proper practice, when illegal testimony is offered, to object at the time, and, in ■case it is admitted, to reserve a bill of exceptions ; but this rule does not preclude the party complaining from making a motion to exclude the testimony after the evidence has closed, and, clearly, when the testimony is in connection with an issue not raised by the pleading, and so manifestly unjust to the party complaining as the testimony as to the enema was to appellant, the court should not only have ex■cluded the evidence, but should have instructed the jury to disregard it. It was error to submit an issue raised by the evidence but not raised by the pleading, even though the evidence raising the foreign issue was introduced without objection. ‘Facts not alleged, though proved, cannot constitute the basis of an adjudication.’ Hall v. Jackson, 3 Tex. 311; Paul v. Perez, 7 Tex. 338; McKinney v. Fort, 10 Tex. 234; Denison v. League, 16 Tex. 408; Middlebrook Bros. v. Zapp, 73 Tex. 29, 10 S. W. 732; Cooper v. Loughlin, 75 Tex. 524, 13 S. W. 37.”

We think reversible error is shown by the seventh assignment, and that the injurious effect of the court’s refusal to give the tendered charge is emphasized by his failure to submit issue No. 1, with reference to defendants’ alleged negligence, without limiting the issues of negligence to those pleaded in plaintiff’s petition.

For the errors noted the judgment of the trial court is reversed, and the causé remanded.
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