author: HENDRICKS, J.

text:
    PIPKIN et al. v. BANK OF MIAMI et al.

    (No. 868.)
    (Court of Civil Appeals of Texas. Amarillo.
    Oct. 16, 1915.
    On Motion for Rehearing, Nov. 13, 1915.)
    Eeauds, Statute of &wkey;>119 — Obal Agbee- ■ ment foe Substitute Secueity — Paetial Peefoemance. '
    Plaintiff’s husband while in debt to defendant bank, which was the mortgagee of certain land owned by the husband, entered into a trade with a third person for the exchange of the mortgaged lands for others. In order that this exchange might be consummated, the bank released its mortgage on an oral agreement that the mortgagor, when he had acquired title to the other property, would execute a deed of trust thereon as. substitute security. The exchange was made, but before the execution of the deed of trust the purchaser and his wife moved onto the property acquired and used it as a homestead. The bank attempted to sell the property under the subsequently executed trust deed, and plaintiff sought to enjoin the sale on the ground that the agreement for the substitution of security was within the statute of frauds. Held, that the fastening of the homestead character upon the land, acquired after the promise made to execute the trust deed, with a partial performance on the part of the defendant in releasing its vendor’s lien with its consequences, created an equity in favor of defendant which would remove the case from the operation of the statute, since to apply the statute would effectuate fraud rather than prevent it.
    ■ [Ed. Note. — Por other cases, see Frauds, Statute of, Cent. Dig. §§ 113, 266, 267, 270; Dec. Dig. &wkey;sll9.]
    Appeal from District Court, Gray County; Prank Willis, Judge.
    Suit by Mrs. Belle Pipkin and others against the Bank of Miami and others, for an injunction. Judgment for defendants, and, plaintiffs appeal.
    Affirmed and rehearing refused.
    Kimbrough, Underwood & Jackson, of Amarillo, for appellants. J. A. I-Iolmes, of Miami, and Baker & Willis, of Canadian, for appellees.

      Writ of error pending in Supreme Court.

   HENDRICKS, J.

In 1909, S. M. Pipkin, the husbánd of Mrs. Belle Pipkin, was in debt to the bank of Miami. The bank was mortgagee of certain sections of land in Roberts county, owned by the said Pipkin, and Pipkin and one Lard entered into a trade, by the terms of which Lard was to pay certain cash for the Roberts county real estate mortgaged to the bank, and, in addition, was to exchange certain residence lots in the town of Pampa, Gray county, Tex., dependent, of course, upon the release by the bank of the Roberts county land. Por the purpose of consummating this trade, and to clear the title to the Roberts county land, the bank released its mortgage upon said Roberts county land, contending that said release was made in consideration that Pipkin, when he acquired the title from Lard to the residence lots in Pampa, would execute a deed of trust upon said property in substitution, in part, for the previous security for the benefit of the bank. Before the execution of the deed of trust upon the Pampa lots Pipkin and his wife moved onto the Pampa property, using the same as their homestead, Pipkin thereafter executing a deed of trust upon said lots as security for the balance of the debt he owed the bank.

This suit is an application for a temporary writ of injunction to restrain the sale of the residence lots in Pampa, on the ground that the same constitutes the homestead, and, in addition to a denial of any previous oral agreement with reference to the substituted mortgage on said property, Mrs. Pipkin further asserts that said agreement, if made, is prohibited by the statute of frauds, citing, to sustain the latter position, the following cases: Castro v. Illies, 13 Tex. 229 ; Boehl v. Wadgymar, 54 Tex. 589; Johnson v. Portwood, 89 Tex. 235, 34 S. W. 596; Poarch v. Duncan, 41 Tex. Civ. App. 275, 91 S. W. 1110. Without a detailed analysis of the cases cited, wé think the same are not pertinent to the condition of case presented in this record. Evidently the district judge, in refusing the temporary injunction, resolved the testimony in favor of the bank’s witnesses, establishing the oral agreement to give the mortgage in consideration of the release by the bank upon the Roberts county property. It is to be noted that when this oral agreement was made, Pipkin had no real interest in, or title to, the residence lots in Pampa, as the contract with Lard was necessarily made subject to the acceptance of the bank and the latter’s release of its lien, upon the Roberts county property, without which the deal could not have been made. Though it is held that oral mortgages come within the purview of our statute of frauds, however, beginning with the leading case of James v. Fulcrod, 5 Tex. 517, 55 Am. Dec. 743, it is held that there is an important difference between ours and the English statute, the court saying, in that case:

“All agreements within its scope should be brought under its operation; but to go further would lie to assume legislative functions.”

Neither does our statute require express declarations of 'trusts to be in writing, as prescribed in the -English statute. ■ Same ease,supra. On account of the omission in our statute of frauds of the language, “any interest in or concerning land,” found in the English statute (which statute is adopted by many other states without change), there is a marked difference in the application of our statute and the application in other states of the English statute, when considering oral contracts. We have contracts affecting interests in or concerning lands in Texas, enforceable though resting in parol, but inhibited where the statute is as broad as the omitted language. James v. Fulcrod supra; Long v. Gray, 13 Tex. Civ. App. 172, 35 S. W. 35; Miller v. Thatcher, 9 Tex. 483, 60 Am. Dec. 172; Houser v. Jordan, 26 Tex. Civ. App. 39S, 63 S. W. 1050; Bailey v. Harris, 19 Tex. 110. We know that an agreement in parol to locate a land certificate for a part of the land is not in the statute; the future acquisition of the title and interest which does not exist at the time the agreement was made inures to the benefit of the party contracting for the location. Watkins v. Gilkerson, 10 Tex. 340; Ikard v. Thompson, 81 Tex. 290, 16 S. W. 1019; Gibbons v. Bell, 45 Tex. 423. We also know that where two persons orally contract to purchase a piece of land, one of the parties to take the title in his own name, the other may enforce the contract, though verbal. Gardner v. Randell, 70 Tex. 453, 7 S. W. 781; Reed v. Howard, 71 Tex. 205, 9 S. W. 109; Masterson v. Little, 75 Tex. 697, 13 S. W. 154. The statute does not apply where a party who borrowed money to pay for the land permitted the creditor to take the title in his own. name and the borrower tendered the money and sues for the land. Long v. Gray, 13 Tex. Civ. App. 172, 35 S. W. 35. Associate Justice Gaines said, in the casé of Sprague v. Haines, 68 Tex. 217, 4 S. W. 371, that the words, “any contract for the sale of real estate,” as used in the statute—

“include every agreement by which one promises to alienate an existing interest in land upon a consideration, either good or valuable.”

The case of Anderson v. Powers, 59 Tex. 213, was under consideration by Justice Gaines, and overruled. He held that the court had misapplied the authorities to the real status of case in the Anderson-Powers record, saying that:

“In none of the cases cited did the parties who subsequently acquired the legal title by patent from the state have any interest in the land at the time of the contract.”

In the instant case, Pipkin, not having any real interest in the land at the time the oral agreement was made with the bank for the substitute deed of trust, and said agreement being made to operate upon land to be acquired in the future, we think the. case comes within the principle of the authorities cited, and numerous Others which could be cited. It is clear, under our authorities, that if Martin had agreed with Pipkin for a release of the Roberts county land, in consideration that Pipkin, when he received the deed and title from Lard to the Pampa lots, would then convey the land to the bank in sitisfaction of the balance of the debt, such an agreement would be enforceable, though verbal. Hence, when Pipkin orally agreed to execute a mortgage upon land to be acquired in the future, for the purpose of securing the balance of the debt, what difference can there .be in the cases and the application of the principle? It is clear that if the mortgage, as to future acquired real estate, attaches a trust to the land for the benefit of the bank, the subsequent designation and vesting of the homestead interest is subordinate. McCarty v. Breckenridge, 1 Tex. Civ. App. 180, 20 S. W. 997 (writ of error denied).

The order of the district judge, refusing the preliminary injunction is affirmed.

On Motion for Rehearing.

The reasons for the affirmance of this cause, given in the original opinion, upon reconsideration, are not satisfactory, and are, to some extent, subject to the criticisms in appellants’ argument on the motion. A portion of this criticism is due to a lack of perspicuity on our part, referring especially to appellants’ argument that a mortgage is not a trust. We said:

■ “It is clear that if the mortgage, as to future acquired real estate, attaches a trust to the land for the benefit of the bank, the subsequent designation of the homestead is subordinate.”

And appellant makes an extended argument that a mortgage is not a trust. We, of course, meant that if the contract for the mortgage as to future acquired real estate attached a trust to the land for the benefit of the bank, the supervening designation of the homestead would be subordinate to the bank’s interest.

We admit, since equity has developed the subject, that a mortgagee’s interest is hard to define, and very few law-writers have attempted its'definition. Lord Denman said:

“It is very dangerous to attempt to define the precise relation in which mortgagor and mortgagee stand to each other in any other terms than those very words”

—that is mortgagor and mortgagee. Jones on Mortgages, vol. 1, § 16. A mortgage, we all know, was originally a conveyance of land, subject to defeasance, under which, if not complied with, the mortgagee acquired the whole estate, including the title; but under the conception and development of equity the land is merely impounded or charged in a contractual sense as a fund as security, and this development, which, in working out the relations and rights between mortgagor and mortgagee of third parties, has developed seeming incongruities, probably is not yet ended. In this state the only view by which the statute operates upon a mortgage, or a contract to give one, when affecting lands, is to view it as a conveyance of lands. The assignment of one, as to innocent third parties, is covered by our registration statutes, but the assignment of the debt, as between the parties, has always carried the mortgage. Outside this state, where the distinctions have been maintained, a mortgage goes to the personal representative as personal property, and not to the heir as real estate, the law of the place where the land is situated controls its construction, as to the rights of the parties in the land, and an after-acquired title inures to the benefit of the mortgagee. In some states the mortgagee can predicate ejectment against the mortgagor, but in this state it is unavailing unless the mortgagor has placed the mortgagee in possession under the mortgage. The different conceptions of a mortgage under the law, as affecting real estate, and in equity, treating the land merely as an auxiliary for the payment of the debt, could be extended unnecessarily, viewing the numerous incidents as cited by the courts in the development of the rights of the mortgagor, the mortgagee, and third persons. But we are convinced that this right inuring to a mortgagee, whether you would regard it as some estate in the land, or a mere right to a beneficial use of it upon condition broken, as a fund to pay the mortgagor’s obligation, is nevertheless the subject of a trust, which we presume, under appropriate conditions, appellants would not deny.

“The rule is perfectly well settled that a- party may, by express agreement, create a charge or claim in the nature of a hen on real estate of which he is the owner, or possessor, and that equity will establish and enforce such charge or claim, not only against the party who stipulated to give it, but also against third persons, who are either volunteers or who take the estate on which the lien is agreed to be given, with notice of the stipulation. Such an agreement raises a trust which binds the estate to which it relates. * * * ” Pinch v. Anthony et al., 8 Allen (Mass.) 539, citing several old English authorities, inaccessible to us. Wash-burn on Real Property, vol. 2, c. 16 (Mortgages) § 7, and cases cited, to which we add the case of Bridgeport Electric & Ice Co. v. Meader, 72 Fed. 119, 18 C. C. A. 451.

We also assume that in considering a contract to execute a mortgage, if in writing, where the remedy sought is for the specific performance of the same, or a mere establishment of the lien, equity, in either event, recognizes the trust feature in connection with the contract. The fact that a contract, obligating one to execute a mortgage, is not in writing would not lessen the trust if from the nature of the transaction a trust existed, though the language of the statute of conveyance is rather stringent. This statute, and the other now designated as the statute of frauds, is, after all, a regulation of a' rule of evidence affording a successful means of resistance to the claim of estate. Bringhurst v. Texas Co., 39 Tex. Civ. App. 500, 87 S. W. 896, and authorities cited.

It is familiar that a part performance by one, and the refusal of performance by another, with additional circumstances inherent in the transaction operating as a serious injury to the party partially performing as to constitute a fraud, creates an eguity in favor of the losing party, and the statute does not apply, on the theory that the statute is to prevent, not to advance, fraud. A rather notable case in this state — and one cited by appellant, to sustain the position that an equitable mortgage cannot be created by an oral agreement — is Johnson v. Portwood, 89 Tex. 248, 34 S. W. 596, 787. The facts are somewhat complicated, but, stripping it of details unnecessary here, and reproducing the essentials for the purpose of exhibiting the analogy, it presents the following condition: Land was sold and vendor lien notes were executed. The vendee and the vendors made an independent agreement that if the former would pay a certain sum cash and another sum certain at a future time, and would reconvey one-third of the land to the vendors, the latter would release the lien and cancel all the notes on the remaining two-thirds of the land to the vendee. A third party, Long, furnished the first cash payment to the vendee, which was paid to the vendors, and, as pleaded by him, with an understanding with the vendee that when the contract was completed that the latter was to secure the advancement of this money with the released land as security, and that it was so understood by the vendors. An exception to the vendee’s pleading, setting up an oral agreement, was sustained. We infer that the mere breach of the contract by the vendors, with a part payment upon the same by the vendees, was insufficient to take the case out of the statute; but as to the intervener Long, who advanced the money, the case was different. He could not claim under the contract Johnson, the vendee, had with his vendors for the release of the land, but he could claim under his own oral contract, and Justice Gaines said:

“It is settled law in this court that, in case of oral contracts for the sale of land, the payment of the purchase money alone is not such part performance as will take the case out of the statute. The ground upon which a specific performance is enforced in such cases when there has been a part performance is that the refusal of the defendant to perform would operate a fraud upon the plaintiff. When there has been nothing more done than the payment of the purchase money, the courts say that the vendee has a remedy by suit to recover it back. But in this case, unless the intervener be allowed his lien, he is without remedy for the recovery of his money. It was lent to the defendant, who is alleged to be insolvent. It has been paid to the plaintiffs upon a debt of defendant that was due, and they cannot be compelled to pay it back. It would be a fraud for them not to carry out their contract, at least in so far as it is necessary for the intervener’s protection.”

Justice Gaines said that the intervener would be subrogated to the lien of the plaintiffs as to the two-thirds interest in the land they agreed to release to the vendee Johnson.' Apparently this might weaken the decision npon the equitable question with reference to the statute of frauds. However, Hong advanced the money to Johnson for its payment to the vendors upon an independent agreement for the conveyance of land. This money was not paid under the original obligation of the vendee Johnson to pay his own debt, in which latter event, of course, subrogation always applies under any kind of a contract. The question might be asked how subrogation could apply if Johnson’s contract was unenforceable. We assume that the Supreme Court merely meant that Long’s contract with the vendees for the conveyance of the two-thirds interest to Johnson, was enforceable only in so far as to preserve Long’s rights, under his own contract, which the vendors breached; and, being confronted with the anomalous condition of not being able to compel a conveyance of the land to Johnson, on account of the unenforceability of the contract with him, it raised the doctrine of subrogation for Long’s benefit.

The real gist of the opinion is that it was an enforceable contract with Long on account of the partial performance and the raising of the equity. The line is often tenuous between a case of a mere violation of agreement with injury to the other party, and a case of a violation with such injury as constitutes a fraud and creates the equity. Lord Chancellor Selborne said, in the case of Maddison v. Alderson, 8 App. Cas. 478, before the House of Lords, in which Brown says the matter received very thorough consideration:

“That it is not arbitrary or unreasonable to hold that when the statute says that no action is to be brought to charge any person upon a contract concerning land, it has in view the simple case in which he is charged upon the contract only, and not that in which there are equities resulting from res gesti® subsequent to and arising out of the contract. S'O long as the connection of those res gestas with the alleged contract does not depend upon mere parol testimony, but is reasonable to be inferred from the res gestse themselves, justice seems to require some limitation of the scope of the statute. * * * ” Browne, on the Statute of Frauds, § 455a.

The case of Dean v. Anderson, 34 N. J. Eq. 496, by the New Jersey Court of Chancery, is rather an applicable and instructive case upon this subject. Dean agreed to sell and convey to Anderson a certain estate, for the sum of £1,500, £375 at a certain date, and the balance of the purchase money to be secured by mortgage. Anderson, after having paid a part only of the £375, exchanged his interest in the Dean property to one Jackson, for other real estate. It was afterwards agreed between all parties that Dean should convey direct to Jackson, and that Jackson should convey to Anderson, and that Anderson should execute a bond with a mortgage on the Jackson property to Dean, which he refused to do. The Maryland court of chancery said:

“Where an agreement has been executed or in part performed by complainant, and the acts done place him in a situation which is a fraud upon him, unless the agreement is executed, equity will not permit the defendant from executing his part of the agreement by pleading that it was not in writing. * * * The court will interpose and grant relief,, notwithstanding the statute, when the complaint shows a performance on his side, by which he would suffer an injury, amounting to fraud, by the refusal to execute the agreement on the part of the defendant” (citing numerous English authorities).

The chancellor further said:

“I cannot well imagine a stronger case for relief, on the ground of part performance than the present. The agreement having been made, Dean, in pursuance thereof, conveyed his estate * * * to Jackson, and Jackson * * * conveyed the ferry property to Anderson, after which Anderson, in fraud of his agreement, refused to execute the mortgage, and held the property which he had thus obtained. This refusal was, in my opinion, a gross and palpable fraud on Dean, and the case comes clearly and fully within the principle upon which the court relieves in cases of part performance. The complainant, relying on the agreement, parted with his estate * * * [to Jackson] and waived the security by mortgage which he was to have had on that property [in the original trade with Anderson]. He has therefore done an act in execution of the agreement by which he is greatly prejudiced, and is entitled to say that the nonexecution of the agreement by Anderson is a fraud on him. This case is strongly analogous to the one in the books, where there was a parol agreement for a mortgage, and a deed was to be executed and a defeasance, and, after executing the deed, the grantor refused to execute the defeasance, and, on a bill filed, relied on the statute of frauds, which was held to be no bar. 1 Eq. Cas. Ab., 20 Par. 5; S. C. Prec. in Cha. 526. This was a decree of Lord Nottingham, and is said to have been the first case, after the statute, in which relief was granted upon the ground of part performance.” Dean v. Anderson, 34 N. J. Eq. 496.

The case of Plumer & Crary v. Reed, 2 Wright (38 Pa.) 46, will afford some analogy to the case here: One of the parties held an agreement for 116 acres of land, upon which he had only paid the sum of $5, and his contract was liable to forfeiture. He surrendered his title to others, who brought in the whole title under a parol contract that 10 acres of the land should be conveyed to him as soon as the outstanding title was acquired. Also see Beegle v. Wentz, 55 Pa. St. 374, 93 Am. Dec. 762.

The ease of King v. Williams, 66 Ark. 333, 50 S. W. 695, by the Supreme Court of Arkansas, was one to compel the performance of an oral contract to execute a mortgage in consideration of a release by the mortgagee upon other land. After the release was made the mortgagor sold the land, refused to execute the mortgage upon the other property, and moved upon such other property, occupying the same as a homestead. The court said the mortgagee was remediless if the mortgagor failed to execute.

The old English case referred to by the Maryland court, in the Dean-Anderson Case, supra, as having been decided by Lord Nottingham, where the mortgagor refused to execute the defeasance, is one we have often observed, in our investigation, cited in matters of specific performance. It is to be noted that this decision was made at a time before the doctrine had developed in England in equity that a formal deed on' its face being a conveyance of property, could be proven as a mortgage.

The record shows that the appellant Pip-kin, at the time he traded with Lard, had a homestead in Roberts county upon land different from' the two sections upon which the bank had the lien; that he thereafter also sold his Roberts county homestead and moved to Pampa, occupying the latter property as a homestead as soon as he could get possession. The testimony of the cashier of the bank is that he requested Pipkin, over the telephone, to execute the lien in accordance with his promise; that when the deed of trust was executed by Pipkin the bank had no knowledge that the homestead character had attached to the Pampa lots. The record also indicates that for the balance of the debt owing to the bank by Pipkin, the latter is remediless; and it is our conclusion that the fastening of the homestead character upon the Pampa lots, after the promise made to execute the mortgage, with a partial performance upon the part of the bank of this oral contract in releasing the vendors’ lien, with the consequences to the bank, creates the equity in favor of the bank; and to use the statute of frauds in a case of this character is to use it as an instrument advancing instead of preventing fraud.

With reference to the ground upon which the original opinion was based, and the analogies attempted to be drawn from other cases cited in said opinion, upon additional consideration, we withdraw as the basis of the decision. -It is inferable, however, from Lard’s testimony that he understood, in consideration of the cancellation of the lien upon the property which he was to receive in the trade, Pipkin was to execute the mortgage on the Pampa property, to be conveyed by him in exchange; hence all parties understood the conditions of this trade. The Pampa property, which Pipkin agreed to give the lien upon, was produced in a sense by the cancellation of the mortgage lien upon the Roberts county property,’ which thereby, on account of it being unincumber-ed, gave it a value in the trade which it could not have possessed without the bank’s relinquishment. While technically it may be said that Pipkin did not hold the mere title to the land in trust for the bank, still the bank in a sense agreed to exchange its lien for another lien upon the Pampa property, partially produced by the cancellation of the former lien. We are not sure that these two rights are not reciprocal, nor that the right to the lien on the Pampa property is not the representative of the former, and which latter is a right in the land, as security, produced by the relinquishment of a similar right in other land for the same purpose, and that a trust growing out of the contract, under such conditions, could not be evolved for the purpose of effectuating this right. We prefer, however, to rest the affirmance of the case upon the ground adduced in this opinion.

The motion for rehearing is overruled.
      ©u»For other cases see same topic and KEY-NUMBDR. in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: DUNKLIN, J.

license: Public Domain

text:
    McGOUGH v. FINLEY.
    (No. 8217.)

    (Court of Civil Appeals of Texas. Ft. Worth.
    June 19, 1915.
    Rehearing Denied Oct. 16, 1915.)
    1. Homestead ¡&wkey;117 — Conveyance — Consent of Wife — Statute.
    Under Rev. St. 1911, art. 1115, providing that the homestead of the family shall not be sold and conveyed by the owner, if a married man, without the consent of his wife, where two lots were the business homestead of one of the incorporators of a corporation, he agreeing to transfer them to the company in return for a portion of its stock, which was issued to him, neither the application for the charter nor the affidavit thereto being executed by the incorpo-rator’s wife, title to such lots did not pass from the incorporator to the company.
    [Ed. Note. — For other cases, see Homestead, Cent. Dig. §§ 191-202; Dec. Dig. &wkey;117.]
    2. Frauds, Statute of <&wkey;69 — Conveyance of Land — Necessity for Writing.
    Under Rev. St. 1911, art. 1103, providing that no estate in land shall be conveyed unless the conveyance be declared by instrument in writing, where an incorporator orally agreed to transfer two lots to the company in return for a portion of its stock, which was issued to him, the lots not being designated either on the company’s charter or the affidavit thereto, title to such lots did not pass from the incorporator to the company.
    [Ed. Note. — For other cases, see Frauds, Statute of, Cent. Dig. §§ S3, 111; Dee. Dig. &wkey;69J
    3. Fraudulent Conveyances &wkey;295 — Character as Such — Sufficiency of Evidence.
    In trespass to try title, evidence held sufficient to justify jury’s finding that the conveyance of the premises to defendant was fraudulent as to the grantor’s creditors.
    [Ed. Note. — For other cases, see Fraudulent Conveyances’ Cent. Dig. §§ 867-875; Dec. Dig.
    Appeal from District Court, Stonewall County; John R; Thomas, Judge.
    Suit by George P. Finley against J. M. McGough. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    C. P. Chastain, of Hamlin, and Jas. P.. Kinnard and H. G. McConnell, both of Has-kell, for appellant. W. R. Sawyer, J. M. Carter, of Aspermont, and Chapman & Coom-'bes, of Anson, for appellee.

      Application for ■writ of error pending in Supreme Court.

   DUNKLIN, J.

Geo. P. Finley instituted this suit in the form of trespass to try title against J. M. McGough, J. W. McGough, A. F. McGough, and Sam Rash, to recover a section of 640 acres of land situated in Stonewall county. All the defendants except J. M. McGough filed disclaimers, and from a judgment in favor of tlie plaintiff for the land, that defendant has appealed.

Plaintiff and J. M. McGough each claimed title through J. W. McGough as the common source; the plaintiff claiming under an execution sale against J. W. McGough, and J. M. McGough claiming title under a deed of conveyance from J. W. McGough antedating the execution sale. The sale to plaintiff was under and by virtue of an execution levied upon the property under a judgment in favor of August A. Busch & Co., dated June 23,

1909, rendered by the district court of Tar-rant county, Tex., against J. W. McGough and others for the sum of $575.91, with 6 per cent, interest and costs of suit. That sale was made February 4, 1913, the execution having been levied upon the property December 27, 1912. The deed from J. W. McGough to J. M. McGough, under which J. M. Mc-Gough claimed title, was dated December 2,

1910, and duly recorded in the deed records of Stonewall county on December 5, 1910. The consideration recited in that deed was as follows:

“One thousand ($1,000.00) dollars, paid by J. M. McGough, receipt whereof is hereby acknowledged and fully confessed.”

The conveyance to J. M. McGough by J. W. McGough was attacked by the plaintiff upon the ground that it was made for the purpose of defrauding the creditors of J. W. Mc-Gough, and therefore void, and that was the principal issue upon the trial. On January 22, 1910, J. W. McGough, J. M. McGough, A. F. McGough, and J. W. Beese applied for and obtained a charter for a private corporation under the name of the Hamlin Transfer Company. The business for which the corporation was formed was the establishment and maintenance of a line of stages, and its place of business was in Hamlin, Jones county, Tex. J. M. McGough and A. F. Mc-Gough were sons of J. W'. McGough, and J. W. Reese his son-in-law, all of whom resided in Hamlin. The directors named in the charter were J. W. McGough, J. W. Reese, and J. M. McGough, and J. W. McGough was thereafter made president of the company. The charter of the corporation contains the following:

“The amount of capital stock is ten thousand ($10,000) dollars, divided into one hundred (100) shares of one hundred ($100.00) dollars each, all of which capital has been subscribed and 100 .per cent, paid in, as per affidavit attached hereto.”

The affidavit of J. "W. McGough, J. M. Mc-Gough, A. F. McGough, and J. W. Reese, attached to the charter, contained the statement that the parties had subscribed for stock in the following amounts, to-wit:

J. W. McGough. $5,900
J. W. Reese. 1,700
J. M. McGough . 1,700
A. F. McGough . 1,600

—and that all of said stock had been fully paid in property; the subscription of J. W. McGough for $5,000 being paid with lots 9 and 10, block 55, in the town of Hamlin, with barns, stall, sheds, and carriage houses, all-valued at $5,000; that the subscription of J. M. McGough was paid by lot S, block 55, in the town of Hamlin, valued at $1,700; and the subscriptions of J. W. Reese and A. F. McGough were paid with eight head of horses, valued at $1,200, and three transfer busses and one transfer wagon and harness, all valued at $2,100. At the time the parties applied for the charter of the Hamlin Transfer Company they were jointly engaged as partners in the transfer -business in the town of Hamlin, and after the incorporation continued in the same business in the corporate name. The evidence shows that J. W. McGough was at that time a married man, the head of a family, residing in the town of Hamlin, and that lots 4 and 5 in the town of Hamlin constituted his business homestead; and according to the testimony of J. W. McGough those lots were the lots which J. W. McGough intended to convey to the corporation, instead of lots 9 and 10 in block 55, as described in the affidavit attached to the charter. Those lots and lot 8 in the same block, which according to the affidavit attached to the charter was conveyed to the corporation in payment of J. M. MeGough’s stock, were used by the incor-porators in connection with the transfer business at the time they decided to incorporate the business. The horses, vehicles, and harness, referred to in the affidavit as transferred to the corporation in payment of the stock subscribed by J. W. Reese and A. F. McGough, had likewise been in use in the same business previously transacted by the partnership firm. After the incorporation, the Hamlin Transfer Company used the three lots and the other property mentioned in the affidavit in conducting its business. The only instrument of writing signed by J. W. Mc-Gough relating to or evidencing the supposed rights of the corporation in and to lots 9 and 10 was the application for the charter and the affidavit attached thereto. J. W. Mc-Gough testified that after the incorporation he worked for the company on a salary as its president, and was not engaged in any transfer or livery business upon his own individual account, and never intended to so engage in business after the incorporation of said company. The evidence further shows that J. W. McGough never at any time executed any deed of conveyance to the corporation transferring said lots 4 and 5, but, on the contrary, on December 2, 1910, the same day he conveyed the land in controversy to J. M. McGough, by warranty deed he conveyed those lots to his son, J. M. McGough, in which a consideration of $1,000 was acknowledged; the deed being filed for record in Jones county on December 3, 1910, after being duly acknowledged. Those two deeds, if effective, operated to strip J. W. McGough of all his property subject to execution, except the stock he held in the Hamlin Transfer Company. On August 16, 1909, an abstract of the judgment in favor of August A. Busch & Co. against J. W. McGough mentioned above was duly filed for record in the office of the county clerk of Jones county.

On September 30, 1912, J. M. McGough filed in the district court of Jones county a petition for the issuance of a writ of injunction to restrain the sheriff and constable of that county from selling lots 4 and 5 under execution, which, according to the allegations in the petition, had been duly issued on the judgment in favor of Busch & Oo. against J. W. McGough and had been levied upon said lots 4 and 5. In that petition plaintiff further alleged that on the 2d day of December, 1910, the date of the deed from J. W. Mc-Gough to J. M. McGough, the said J. W. Mc-Gough was seised and possessed of said lots in fee-simple title; that at that time J. W. McGough resided in Hamlin, was the head of a family, and owned and claimed said lots as his business homestead; that he was then engaged in the livery business for hire as a means of livelihood, and controlled and managed the same; that said lots 4 and 5 were then exempt to him as a business homestead under the Constitution and laws of the state of Texas. The petition further alleged the filing of other abstracts of said judgment in Jones county, all of which cast a cloud upon the title of J. M. McGough, who had purchased the property on December 2, 1910, from J. W. McGough for the purpose of sale and exchange, paying a valuable consideration therefor. The petition was signed and sworn to by J. M. McGough; the affidavit signed by him containing the statement that the matters set forth in the petition were true. There was issued to J. W. McGough $5,000 worth of the stock in the Hamlin Transfer Company, but he has never paid any consideration therefor, unless the company acquired title to lots 4 and 5 in the town of Hamlin under and by virtue of the statements contained in the charter, and in the affidavit attached thereto, all over the signature of J. W. McGough.

The trial was before a jury, to whom was submitted special issues. The findings of the jury were as follows:

(1) Just prior to the execution of the two deeds from J. W. McGough to J. M. McGough of date December 2, 1910, one conveying the survey of land in controversy in this suit, and the other conveying lots 4 and 5 in the town of Hamlin, J. W. McGough was indebted to J. M. McGough in the sum of $800.
(2) On December 2, 1910, the reasonable cash market value of said lots 4 and 5 was $2;000.
(3) On December 2, 1910, when J. W. Mc-Gough executed to J. M. McGough the deed to the section of land of 640 acres in controversy, the reasonable cash market value of that property was $20 per acre.

The remaining issues submitted to the jury, together with the findings thereon, are as follows:

“Fourth Issue. On December 2, 1910, what was the indebtedness of J. W. McGough? In this connection you are instructed that in the amount you may find in answering this question you will not include the claim of J. M. McGough against J. W. McGough. And you are instructed, further, that if you find from the evidence that in incorporating the Hamlin Transfer Company it was understood that J. W. McGough was to put in said transfer company the title to said lots 4 and 5 at a valuation of $5,000, and that by reason thereof J. W. McGough was to receive $5,000 woi’th of stock of the said Hamlin Transfer Company, then the court charges you as a matter of law that title to said lots did not reach the Hamlin Transfer Company, and thereby, if such were the facts, J. W. McGough on said date would be indebted to the Hamlin Transfer Company in the sum of $5,000 unpaid subscription on his stock in said transfer company, and if the facts so be, in finding the amount of the indebtedness of J. W. McGough, you will include herein the said sum of $5,000.
“Answer. Six thousand five hundred nine and oiL/ioo dollars.
“Fifth Issue. On December 2, 1910, what was the reasonable cash market value of the property belonging to the Hamlin Transfer Company? In this connection you are instructed that said lots Nos. 4 and 5 were not the property of the Hamlin Transfer Company, and in determining this question you will not include the value of said lots Nos. 4 and 5. But you are further instructed that lot No. 6 referred to in the evidence was the property of the Hamlin Transfer Company, and in answering this you will include the value of said lot No. 6.
“Answer. Three thousand dollars.
“Sixth Issue. Our statute, in effect, provides that every gift, or conveyance, of property given or made with intent to delay, hinder, or defraud creditors shall be void. In this connection I charge you that the judgment in favor of August A. Busch & Co. was a valid claim and judgment against J. W. McGough, and that the transfer by J. W. McGough of the property belonging to him and subject to execution would delay and hinder said Busch & Co. in the collection of their said judgment, yet such conveyance would not be fraudulent unless in making such conveyance said J. W. McGough did so with intent to delay, hinder, or defraud his creditor or creditors, nor can you find such conveyance fraudulent unless you find from the evidence the existence of the following conditions, to wit: That in conveying said section of land in Stonewall county to J. M. McGough, J. W. McGough did so with intent to delay, hinder, or defraud his creditors, or to defraud said Busch & Co., and that J. M. McGough at the time of the conveyance of said section to him by the said J. W. McGough, had notice of such intent on the part of J. W. McGough, if such was his intent, or that J. M. McGough had knowledge of the facts and circumstances such as would have put an ordinarily prudent man upon inquiry, which, by the use of proper diligence on his part would have led to the knowledge of such intention on the part of J. W. McGough, if such was his intention. Now, bearing in mind the above essential conditions, you will answer by yes or no, as you may find from the evidence, the sixth special issue following: Was the conveyance of the section of land in Stonewall county by J. W. McGough to J. M. McGough a fraudulent conveyance?
“Answer. Yes.
“Seventh Issue. What was the consideration of the deed from J. W. McGough to J. M. Mc-Gough, conveying said lots 4 and 5?
“Answer. Four hundred dollars.
“Eighth Issue. What was the consideration for the deed made by J. W. McGough to J. M. McGough, conveying the section of land in Stonewall county?
“Answ’er. Four hundred dollars.
“Ninth Issue. Did J. M. McGough pay J. W. McGough a full valuable consideration for the conveyance of the Stonewall county land, and after that conveyance was there left in the hands of the said J. W. McGough a sufficient amount of property subject to execution to satisfy his debts ?
“Answer. No.”

By different assignments of error the contention is made that the court erred in peremptorily instructing the jury that the title to lots 4 and 5 never passed from J. W. McGough to the Hamlin Transfer Company, and that McGough was still indebted to that company in the amount of his subscription for stock. The contention is based upon the proposition that title to lots 4 and 5 necessarily passed by reason of the fact that J. W. McGough, at the time of the incorporation of the Hamlin Transfer Company, intended no longer to occupy lots 4 and 5 as the pláce for continuing the livery business for his individual benefit, or for the beneffl of the partnership firm of J. W. McGough i& Sons; that he contracted to convey the property to the corporation, and after its incorporation he accepted stock from the corporation in the sum of $5,000; that the corporation thereafter took charge of the said lots, occupying and using the same in its business, with said J. W. McGough acting as its president. Appellant insists that, at all events, the issue whether or not title passed to the Hamlin Transfer Company should have been submitted to the jury as a controverted issue, and should not have been determined by the court, as was done.

The evidence does not show, neither is it contended by appellant, that any improvements were ever placed upon the property by the Hamlin Transfer Company. It is also undisputed that lots 4 and 5, at the time of the incorporation of the Hamlin Transfer Company, were the business homestead of J. W. McGough, and that neither the application for the charter, nor the affidavit attached thereto, was executed by his wife, nor were said lots designated either in the charter or in the affidavit attached thereto. Under such circumstances we fail to understand how it can be said that title to lots 4 and 5 passed from J. W. McGough to the Hamlin Transfer Company, especially in view of the fact that several months after the stock in the Hamlin Transfer Company was isued to J. W. McGough he conveyed lots 4 and 5 to J. M. McGough, appellant herein, who afterwards sought to enjoin the sale thereof upon a petition, verified by him, alleging facts squarely contrary to the contention now made by him in the present suit, as noted above, and we are of the opinion that the trial court did not err in instructing the jury that title to those lots never passed to the Hamlin Transfer Company. Revised Statutes 1911, arts. 1103, 1115; Altgelt v. Escalera, 51 Tex. Civ. App. 108, 110 S. W. 989, and authorities there cited; 16 Cyc. 685.

By another assignment appellant insists that there was no evidence to justify the finding by the jury, in answer to the sixth special issue, in effect, that the conveyance of the land in controversy by J. W. McGough to J. M. McGough was fraudulent. Appellant insists that the evidence shows without controversy that at the time of the execution of that conveyánce neither J. W. McGough nor J. M. McGough had any notice of the judgment in favor of August A. Busch & Co., nor of any other indebtedness then owing by J. W. McGough to any one, aside from his indebtedness to J. M. McGough, to satisfy which the deeds to the land in controversy and to lots 4 and 5 in the town of Hamlin were executed.

While the testimony of appellant and J. W. McGough was, in effect, that they knew nothing of any indebtedness then owing by J. W. McGough to any one, except his indebtedness to his son, J. M. McGough, yet the jury were not bound to accept such testimony as true. Notwithstanding such statements by those two witnesses, there were circumstances tending strongly to rebut it. We shall not undertake to refer to all of such circumstances, but will mention some of them. According to the undisputed evidence J. W. McGough, for a pre-existing debt of $800, owing to his son, J. M. McGough, conveyed property of the value of $14,800, thus stripping himself of all property subject to execution, except the $5,000 worth of stock held by him in the Hamlin Transfer Company, for which he had never paid that company any consideration. The evidence further shows that J. M. McGough, who is a single man, had lived with his father in the town of Hamlin for several years, and had been associated with him in business. An abstract of judgment in favor of August A. Busch & Co. was duly filed for record in Jones county, where J. M. and J. W. Mc-Gough resided. J. M. McGough testified, in part, as follows:

“As to the children that J. W. McGough had on the 2d day of December, 1910, will say that he had five children, all married at thát time, except me. * * * As to all the conversations that I have had with J. W. McGough concerning the deeds that he made to me on December 2, 1910, since that time, and as to what has been said about property, etc., will say that I could not say what all has been said between J. W. McGough and myself since that time, as we are together most of the time and talk about everything nearly that either one of us is interested in.”

But he further stated in that connection as follows:

“I was figuring on leaving home at the time, and my father did not have the money to settle with me, and he and my mother wanted me to stay with them and told me that they would square up with me, and would give me the land and the lots, if I would stay with them, and help take care of them, and not leave home.”

Plaintiff also introduced testimony showing the contents of a letter written by J. W. McGough to the tax assessor of Stonewall county, in which the land in controversy was situated, in effect, requesting the assessor to put the land in controversy on the tax rolls for assessment for the year 1912. Appellant, J. M. MeGough, testified that he had never rendered the land for taxes. J. W. Me-Gough admitted on the stand that he was served with citation in the suit of Busch & Co., although he further testified that after receiving that citation he talked with G. W. Bills, the principal debtor defendant in that suit, who afterwards informed him that the suit had been settled, and that there never would be any judgment rendered against him, and that he did not know anything to the contrary until he saw Mr. Sawyer (attorney for Busch & Co.) in Hamlin in 1911. In addition to those circumstances, there was the further fact that J. M. MeGough, with full knowledge that J. W. MeGough never contemplated paying anything for his $5,000 worth of stock in the Hamlin Transfer Company, except said lots 4 and 5, took a deed of conveyance to that property after the issuance of the stock, and asserted title under that deed adversely to the company. Ullman v. Crenshaw (Sup.) 16 S. W. 1012; Brasher v. Jamison, 75 Tex. 139, 12 S. W. 809.

The judgment is affirmed.
      <©c^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HIGGINS, J.

text:
    NAVARRO v. LAMANA.
    (No. 475.)
    (Court of Civil Appeals of Texas. El Paso.
    Oct. 21, 1915.
    Rehearing Denied Nov. 18, 1915.)
    1. PARTNERSHIP <&wkey;336 — ACCOUNTING- — Commingled Funds — Burden op Proof.
    Where the partnership books were shown to have been incorrectly kept, and in such manner that it was impossible to determine the proportion in which partnership and personal funds had been commingled by defendant partner, sued for an accounting by plaintiff partner, it became incumbent upon defendant definitely to show the amount of the credit to which he was entitled as represented by personal funds.
    [Ed. Note. — For other cases, see Partnership, Cent. Dig. § 797; Dec. Dig. &wkey;336.]
    2. Evidence &wkey;>589--DiSREGAED of Party’s Testimony.
    In an action between partners for an accounting, the court could refuse credence to defendant’s statement, totally uncorroborated, that he made a disbursement.
    [Ed. Note. — For other cases, see Evidence, Cent. Dig. § 2438; Dec. Dig. &wkey;>589.]
    3. Partnership <&wkey;346 — Partnership Accounting — Costs—Statute.
    Under Rev. St. 1911, art. 2035, providing that the successful party to a suit shall recover of his .adversary all costs, and article 2048, providing that the court may for good cause to be stated on the record adjudge the costs otherwise than as provided in preceding articles, where a partner, defendant in his partner’s suit for an accounting, had kept the books of the firm, either fraudulently or negligently, in such manner that the appointment of an auditor was necessary to assist the court in ascertaining the amount of personal funds defendant had commingled with partnership funds, the court properly exercised its discretion in taxing all costs against him.
    [Ed. Note. — For other cases, see Partnership, Cent. Dig. § 820; Dec. Dig. <&wkey;>346J
    Appeal fro-m District Court, Harris County ; Wm. Masterson, Judge.
    Action by M. Lamana against Joe Navarro. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    Cole & Cole and A. B. Wilson, all of Houston, for appellant. Atkinson, Graham & Atkinson, of Houston, for appellee.
   HIGGINS, J.

Navarro and Lamana were partners doing business under the firm name of Star Bottling Works, in which business appellant owned five-eighths interest, and appellee three-eighths interest. Appellee instituted this suit, seeking a dissolution of the partnership and accounting. An auditor was appointed, who made his report to the court. Exceptions to portions thereof were filed by appellant. .Pending a hearing on the exceptions, the parties settled by agreement all their partnership affairs as to the assets and physical properties of the business, leaving only for settlement the matter of the cash balance for division between the partners, a few items of which only were in dispute, as raised by appellant’s exceptions to the auditor’s report.

The exceptions were passed upon by the court and judgment rendered in sum of $504.-33 against Navarro and in favor of Lamana. In arriving at judgment the court found that appellant owed the partnership firm $779.90, of which he was due the appellee three-eighths as his part, or the sum of $292.44; and, it appearing that appellee had already paid $211.S0 as his three-eighths of the fee of the auditor, in the sum of $565, the court also rendered judgment against appellant requiring him to repay appellee the amount so expended by appellee, appellant and appellee having previously paid the auditor under an agreement that it would not prejudice either’s rights as to the proper taxation of the costs thereof when it; came on for hearing.

Navarro was the managing partner, drew all checks, had charge of the cash and bank account, and kept the books of the company, with the assistance' of a bookkeeper. According to the auditor’s report, there was a difference between the books of the company and the company’s bank account of $613.62, the bank account showing that much over and above what the books of the company showed the cash should have been, and there was an additional discrepancy between the receipts of the company as shown by its books and the bank deposits of $772.29, that amount appearing to have been placed in the bank over and above the receipts as shown by the partnership books. The auditor charged Navarro up with these two items, but of the first item $291.59 thereof was satisfactorily accounted for by Navarro, and the court allowed him credit therefor. It was also shown to the satisfaction of the court that the balance of the item mentioned and all -of tlie $772.29 consisted of an overage in the bank deposits; that is, the bank deposits exceeded by these amounts the actual receipts of the business of the partnership. This overage in bank deposits, it was found by the lower court, arose in this manner: Navarro used the bank account of the partnership for his personal business transactions and for the partnership. He mingled his personal and the partnership monies in the partnership bank account. In so doing he relied upon the company’s books to show how much belonged to the partnership and how much belonged to him personally. He was a man -of considerable means, aside from his partnership interest. Part of the discrepancies indicated probably occured by the practice of Navarro drawing the company’s checks payable to cash with which he would pay his employes, and, when the check was surrendered by the bank, he would frequently destroy it, being under the erroneous impression that it would not affect the company’s accounts, as he had already charged it to pay roll expense. This practice would show a disbursement by a debit against Navarro for the same amount represented by the check drawn on the bank. By this means the books of the company would show a double disbursement, when, in fact, only one had been made. The overage in the bank account was further augmented by the defendant’s practice of crediting himself with $12 weekly, according to partnership agreement, and frequently failing to withdraw it from the bank. He proceeded upon the theory that, upon settlement of the company’s affairs, he would be responsible for everything its books showed had been received, and the balance left in the bank would be his property. The auditor charged him with all unidentified debits of the company; that is, he was charged with all money that went into and was withdrawn from the bank, whether or not there was anything to show that it was partnership funds, or was spent for its account. There was also on hand in the partnership cash drawer at the time the auditor took charge of the books the sum of $130.75.

The court found that the items of $613.62 and $772.29 were overages in the partnership’s bank account created in the manner indicated, and allowed defendant credit therefor. It was further found that the item of $130.75 was not an overage, as were the other two items, and defendant was charged therewith. Complaint is here made of the refusal to allow credit for this item.

It is asserted that in a suit between partners for accounting the account books, to which both partners have access, are prima facie evidence of the true account between the partners, and that in such accounting the result shown by the books must control, unless it is clearly shown that such books are incorrect. With this proposition as a premise, it is then insisted that, since it' was not shown that the cash item in question was received in payment for sales not reflected by the books, defendant should not be charged therewith, since to do so would be to hold him liable for all cash on hand, as well as all receipts on hand as shown by the books; that, if he is to be charged with all “shorts” in the way of unidentified debits of the business, he should be credited with all “overs” in the way of unidentified credits. And it is argued that the item of cash in the drawer occupied precisely the same status as the funds in the bank, and that, if the court allowed credit for the bank overage deposits, in like manner credit should be allowed for the overage in the cash drawer. To all this it may be replied, in the first place, that the books are shown to have been incorrectly kept, and in such a manner that it was impossible to determine therefrom the proportion in which partnership and personal funds had been commingled by Navarro. In such case it became incumbent upon him to definitely show the amount of credit to which he was entitled, as represented by personal funds. This he failed to do, and the court might properly have refused to allow him credit for any part of the overages, except above mentioned $291.59, which it was shown consisted of four checks drawn, but which had not been cashed by payees upon the audit date. He has no just ground of complaint because the court did not extend its indulgence to cover the item in the cash drawer as well as the bank deposit overages.

'Error is also assigned to the refusal to allow a credit of $75 claimed by defendant to have been paid to certain parties as a bonus to construct a soda water stand in the city park. The court found that no such sum was paid, and, if it was paid, it was an improper expenditure of partnership funds. In the condition of the record, the finding that such sum was not paid cannot be set aside. The auditor’s report merely shows that it was a disbursement reported as made. Credit therefor was not allowed, for the assigned reason that there was no authority to make the disbursement. It is true Navarro testified he made the disbursement, but this testimony was not corroborated in any way, and, he being the defendant in the action, the court was authorized in refusing credence to his statement that he had made the disbursement. Thomas v. Saunders, 159 S. W. 769; Gonzales v. Adoue, 56 S. W. 543; Turner v. Groge, 24 Tex. Civ. App. 554, 59 S. W. 585; Insurance Co. v. Villeneuve, 29 Tex. Civ. App. 128, 68 S. W. 203; Railway Co. v. Lucas, 148 S. W. 1149.

We are further of opinion that the trial court properly taxed the auditor’s fee and all other costs against Navarro, and the assignment complaining of this phase of the case is overruled. Navarro fraudulently or negligently kept the books of the company in such a manner that the appointment of an auditor became necessary in order to assist the court in .ascertaining the amount of personal funds he had mingled with partnership funds and in arriving at an intelligent accounting between the parties. His improper conduct occasioned the litigation and the necessity for appointment of auditor, and the court did not improperly exercise its discretion in taxing all costs against him. Upon the contrary, we think it most properly exercised articles 2035 and 2048, R. S.; 30 Oye. 749.

Affirmed.
      <©=5>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: DUNKDIN, J.

text:
    KINCHEN v. AUSTIN et al.
    (No. 8235.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    July 3, 1915.)
    Contracts <&wkey;94 — Assignment — Rescission —Fraud.
    Defendant by assignment acquired a contract for the sale of land for $3,500 payable in installments, which further provided that when one-fourth of such amount should be paid the vendor would execute a warranty deed to the premises, conveying them deal- of all liens and incumbrances. Defendant sold such contract to plaintiff, informing' him that the last provision in the contract would control and that upon payment of one-fourth of the sum mentioned the vendor would convey the land clear of all liens and incumbrances. He, however, did not tell plaintiff that there were any other conditions or understandings except what was in the written contract, and though he was an attorney he did not, in giving his opinion as to the effect of the contract, act or pretend to act as plaintiff’s attorney, but did advise him to consult other attorneys, which plaintiff did. Held, that plaintiff was not entitled to rescind his contract with defendant, as defendant’s statement was but the expression of'an opinion on a question of law, and moreover plaintiff did not rely on such opinion.
    [Ed. Note. — For other cases, see Contracts, Cent. Dig. §§ 420-430, 1160, 1164, 1165; Dec. Dig. &wkey;>94.]
    Appeal from District Court, Tarrant County; J. W. S wayne, Judge.
    Action by S. E. Austin against C. R. Hin-chen and J. R, Blakney. Judgment for plaintiff, against defendant Hinchen'and he appeals.
    Reversed and rendered.
    Poulter & Johnson, of Ft. Worth, for appellant. Mays & Mays and Lattimore, Cummings, Doyle & Bouldin, all of Ft. Worth, for appellees.
   DUNKDIN, J.

J. R. Blakney and L. R. Whitley executed a contract in writing by me terms of which the former agreed to sell, and the latter agreed to buy, a certain lot in the city of Ft. Worth. Whitley assigned his interest in the contract to A. G. Baldwin, who in turn assigned his interest in it to C. R. Hinchen, and Hinchen assigned all his interest in the contract to S. E'. Austin.

The original contract, together with said assignments, is as follows:

“The State of Texas, County of Tarrant.

“Know all men by these presents;
“That I, J. R. Blakney, have this day bargained sold and conveyed to L. R. Whitley the following lot or parcel of land, to wit; Lot 31, m block 5, Goldsmith’s subdivision of the W. P. Patillo’s addition to Ft. Worth, Tarrant county, Texas.
“The said Whitley agrees to pay for said lot and premises the sum of $3,250.00 with interest thereon at the rate of 8 per cent, per annum from date until paid, said payment to be made upon the following terms: The said Whitley agrees to pay to the said Blakney the sum of $20.00 per month, said payment to be made on the first of each month, beginning with the first day of October, 1913.
“The said Blakney agrees with the said Whitley that whenever there shall be paid as much as one-fourth of the principal, to wit, $3,250.00, that he will then and there, at the request of the said Whitley, execute a general warranty deed to said premises conveying the same to the said Whitley or to whomsoever he should direct, clear of all liens and incumbrances.
“Should the said Whitley fail to make his monthly payments, as above agreed, he agrees to deliver up said premises, and this contract shall become void.
“October 1, 1913.
“[Signed! John R. Blakney.
“L. H. Whitley.”
(On back indorsed as follows:)
“I hereby assign and convey to A. G. Baldwin all my right, title and interest in and to the foregoing contract. I am to remain in possession of the premises until March 1st, 1914, payments to be made to J. R. Sandige at the Westbrook Hotel, Ft. Worth, Texas.
“L. H. Whitley.
“State of Texas, County of Tarrant.
“Before me, C. B. Ambrose, a notary public in and for Tan-ant county, Texas, on this day personally appeared L. II. Whitley, known to me to be the person whose name is subscribed to the foregoing instrument and assignment thereof and acknowledged to me that he executed the same for the purpose and consideration therein expressed.
“Given under my hand and seal of office this 5th day of February, A. D. 1914. [L. SJ C. B. Ambrose, Notary Public, Tarrant County, Texas.
“For and in consideration of the sum of $1,-000.00. I hereby assign, transfer and convey all my right, title and interest in and to the within and foregoing contract and the property therein described unto C. R. Hinchen. Witness my hand at Ft. Worth, Texas, this 17th day of February, 1914. A. G. Baldwin. Witnesses: R. N. Dean.
“For and in consideration of $1,050.00 I hereby assign, transfer and convey to S. E. Austin, all my right, title and interest in and to the within and foregoing contract and the property therein described. Witness my hand at Ft. Worth, Texas, this the 15th day of May, 1914. C. R. Hinchen. Witness: W. E. Niel.”

S. E. Austin instituted this suit against C. R. Hinchen and J. R. Blakney, alleging that under and by virtue of said contract Blakney contracted and became obligated to execute to plaintiff a warranty deed to the property described, free of all liens and in-cumbrances whenever as much as one-fourth of the purchase price of $3,250, or $812.50, had been paid to him, Blakney; that $240.50 had been paid to Blakney on said contract, leaving a balance of $572 of said $812.50, which balance, less the sum of $300, the amount of delinquent taxes due on the property, plaintiff had tendered to Blakney in connection with a demand for a deed from Blakney to said property free of all liens or incumbrances thereon, and that said tender and demand had been refused. In his pleadings, plaintiff made the same tender upon the same conditions, and prayed for judgment against Blakney for title to the property free of any lien for the balance of the purchase price which Whitley agreed to pay for the property. Plaintiff further alleged that, in consideration for the assignment of the contract to him, he paid to Kinchen the sum of $250, and conveyed to him another lot in Ft. Worth, known as lot 16, in block 83, on Lincoln avenue. According to further allegations in his petition, plaintiff was induced to make such purchase by certain false and fraudulent representations made to him by Kinchen which were pleaded as follows:

“That as soon as said plaintiff herein shall have paid under said contract the sum of one-fourth (%) of the said thirty-two hundred and fifty (¡¡>3,250.00) dollars, that the said J. R. Blakney would make, execute and deliver to this plaintiff a general warranty deed to said property free of any and all liens and incum-brances and that all this plaintiff would have to pay for said property would be the said sum of eight hundred twelve and 50/100 ($812.50) dollars to the owner of said contract, to wit, J. R. Blakney, and that said sum of two hundred and fifty ($250.00) dollars so paid by. him together with the sum of eight hundred twelve and 50/100 ($812.50) dollars to be paid to the other party to said contract was all that said plaintiff herein would have to pay for said property.”

Plaintiff’s prayer for judgment was as follows:

“That he have judgment against all of the defendants forever quieting his title to the property in controversy upon payment of the said one-fourth of the $3,200.00 to the said J. R. Blakney; or in case the court should hold that such was not the meaning of the contract between the parties originally, to wit, L. H. Whitley and J. R. Blakney, and that there was fraud, accident or mistake in the statement of the matter to this plaintiff, by the defendant O. R. Kinchen as above alleged, then he prays that the deed made by him to the lot 16 in block 83, of North Ft. Worth, Tarrant county, Texas, situated on Lincoln avenue, be canceled, set aside and for naught held, and that the legal and equitable title to same be declared to be in this plaintiff, and all cloud upon plaintiff’s title by reason thereof be removed, that he have judgment against all of said defendants for the sum of money so paid to the said Kinchen. * * * ”

In the same connection plaintiff tendered back to Kinchen the contract in suit and further offered to do such equity as the court might require as a predicate for the relief sought.

A trial of the case resulted in a judgment in favor of plaintiff Austin against Kinchen for a rescission of the trade between them, but denying plaintiff any recovery against defendant Blakney; and Kinchen has appealed.

Defendant Kinchen requested a peremptory instruction in his favor which was refused. He then requested the submission of 16 special issues, which were by the court given. The court also submitted to the jury 18 special issues and a general charge all requested by plaintiff, the general charge following the special issues, and reading:

“In addition to the above findings, will you please, find a general verdict for either the plaintiff, or defendant. If your verdict is for the plaintiff, the form of your verdict will be, ‘We,, the jury, find for the plaintiff.’ If youi verdict be for the defendant, the form of your verdict will be, ‘We, the jury, find for the defendant.’ ”

.The jury made findings' on the entire 34 special issues, and also found a general verdict in favor of plaintiff. The record fails to indicate whether the judgment was predicated upon the general verdict, or upon the findings upon special issues. It is likely, however, that it was based upon the special findings, since from a general verdict in favor of plaintiff it could not be determined whether the jury sustained the first count in plaintiff’s petition against Blakney for the recovery of the land free of incumbrance upon payment to him of $572, or the second count against Kinchen alone for a rescission of the trade with him. Nor has appellant presented any assignment to the general instruction which gave the jury no legal guide for a determination of the respective rights of the parties but made the jury the exclusive judges of the law, as well as of the facts1.

But appellant has assigned error to the action of the court in refusing his request for a peremptory instruction in his favor. We seriously question the sufficiency of the petition to support the judgment for rescission, a question raised by another assignment presented by appellant; but a determination of that question is unnecessary in view of the fact that the testimony of plaintiff himself upon that issue negatives any right to that relief. Plaintiff testified as follows, and no other testimony was introduced having a contrary meaning:

“Mr. Kinchen told me that when as much as one-fourth of the principal sum was paid Blak-ney would execute a general warranty deed to said premises and convey the 'same to Whitley, or to whom he should direct, clear of all liens and incumbrances, and that the bottom clause would control the top,.and there was no doubt the deed would have to be made according to that clause. Said he would defend it, being a lawyer, and get the deed for me, when I completed that one-fourth of the payments.”

He further testified that before making the trade with Kinchen he first inspected the property in controversy, and then went to Kinehen’s office and had a talk with him, and in that conversation Kinchen—

“told me that he had no deed to the property, but that he had this contract and could get a deed on it. Q. He did tell you he did not have any deed to this property? A. He certainly did. He said he had this contract and showed it to me. I knew the contract was made to Whitley by Blakney. I took the contract and read it. I knew from the contract that when Blakney sold the property to Mr. Whitley the contract called for $3,250. I knew the contract read for $3,250, and I knew there had only been a few payments on the contract, it was plain to see from the back of it. * * * of course I intended to buy the contract from Mr. Kinchen when I took it. Mr. Kinchen did not tell me that there was anything else pertaining to the contract except .just what was written in.it. "He did not say there were any other conditions or understandings between Mr. ■ Blakney and Mr. Whitley, except what was written in the contract, but in his opinion the bottom clause would control' the top, but said he was in tlie dark on it, that it was not real clear, but he believed it. He said it was a written contract between the two men. He did not tell me anything outside of the contract. He did- not try to withhold the contract from me, but he read it to me and then gave it to me and told me to take it 'to my own. lawyer and let them read it; that he was in-the dark and he could not say; it was a little bit mixed up and might mean one thing and might mean another. But he told me positively that he could get me a deed when I paid one-fourth, and independent of that I did take it to other lawyers. He did not go with me, nor suggest what lawyer for me to go to. He told me to go to some lawyer of my own choice, and I went to two different firms. * * * Mr. Kinchen went with me to see my property, and he said he would turn over the contract for my place and $100, and he told me to take the contract to some lawyer of my own choice and have it passed on, ,and not take his word for it, and insisted that I take it to some other lawyer and have it construed, and I went to see Charles Mays first, of the firm of Mays •& Mays. They are lawyers, and after that X went to see Judge McLain, of the firm of McLain, Scott, McLain & Bradley, and Judge McLain looked the contract o.v.er and said no one could lose except Mr. Blakney, the one who first sold the property. He made that statement to Walter Scott and then gave me his opinion that way. * * * I talked with Charley Mays and had him to go with me. down to see Mr. Kinchen before we closed the deal. Q. What was your purpose in seeing Mr. Mays before you closed the deal? A. As to the value of this-contract? Q. You went to get his opinion on the contract, didn’t you? A. I certainly did. Q. You were taking his opinion upon the very matters Mr. Kinchen had talked to you about? A. I don’t remember all of it; I put it up to him — just submitted the contract to him for his examination. Q. Mr. Austin, why did you go to- other lawyers? A. Because I wanted a lawyer’s opinion on that contract. Q. Well, Mr. Kinchen was a lawyer, wasn’t he? A. Yes, but I wanted some other lawyer’s opinion besides Mr. Kinchen’s. Q'., And with that in view you went to see Mays & Mays, and Judge McLain, ,and they gave you their opinion, and then you closed the deal, didn’t you ? A. Charley Mays gave me an opinion, I don’t know how, but he just looked at it; I don’t think'he understood it. Q. And it was after that you closed the deal, wasn’t it? A. The same day ; yes, sir.”

Thus it clearly appears that the statement made by Kinchen, in effect, that Blak-ney could be compelled to execute to plaintiff a deed to the property whenever as much as one-fourth of the purchase price which Whitley had agreed to pay had been paid, was not a statement of fact, but the expression of opinion on a question of law, and was so understood by Austin. Furthermore, it is clear from the . testimony quoted that, at all events, plaintiff did not rely upon Kinchen’s opinion on that question alone, but consulted other attorneys in compliance with the suggestion of Kinchen-so to do; and that after attorneys of his own selection inferential!y, at least, had expressed the same opinion given by Kinchen relative to the proper legal construction of the contract between Blak-ney and Whitley, plaintiff made the trad» with Kinchen. The facts show that plaintiff and Kinchen were dealing at arm’s length; that Kinchen concealed nothing from Austin; and that, in giving his opinion relative to the legal effect of the written contract between Blakney and Whitley, Kinchen was not acting, nor pretending to act, as attorney for Austin. 1 Under those facts, it is clear that plaintiff showed no right to rescind the contract with Kinchen, and the court erred in refusing Kinchen’s request for an instructed verdict in his favor. Hawkins v. Wells, 17 Tex. Civ. App. 360, 43 S. W. 816, and aúthorities there cited.

Accordingly, the judgment in favor of plaintiff against Kinchen is reversed, and judgment is here rendered that plaintiff taire nothing of defendant Kinchen. The judgment denying plaintiff any relief against Blakney is undisturbed.
      @=»For ether cases see same topic and KEY-NUMBEB. in all Key-Numbered Digests and Indexes


text:
    FIRE ASS’N OF PHILADELPHIA v. RICHARDS et al.
    (No. 8224.)
    (Court of Civil Appeals of Texas. Ft. Worth.
    June 26, 1915.)
    1. Insurance <&wkey;533 — Fire Insurance — Accrual of Liability.
    Under Vernon’s Sayles’. Ann. Civ. St. 1914, art! 4874, providing that a fire insurance policy, in case of a total loss of the property insured, shall be considered a. liquidated demand against the company for the full amount thereof, such a liability accrues immediately after the occurrence of the fire, regardless of stipulations in the policy for notice and proof of loss.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1320; Dec. Dig. &wkey;533.]
    2. Insurance <&wkey;539 — Fire Insurance — Limitations as to Notice of Loss.
    Stipulations in a fire insurance policy that proof of loss must be furnished to the company within 90 days after the fire were void under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 5714, providing that no stipulation in any contract requiring notice to be given for any claim for damages shall be valid unless reasonable, and any such stipulation fixing the time within which such notice shall be given at a less period than 90 days shall be void.
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1328-1336; Dec. Dig. &wkey;539J
    3. Insurance <&wkey;622 — Action, on Policy — Limitations.
    A provision in a fire insurance policy that suit thereon should not be sustained unless commenced before the expiration of two years from the accrual of the cause of action ,was void under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 5713, providing that no agreement limiting the time to sue to a shorter period than 2 years shall be .valid. .
    [Ed. Note. — For other cases, see Insurance, Cent. Dig. §§ 1540, 1544r-1550; Dec. Dig. &wkey;> 622.]
    4. Insurance <&wkey;665 —Action on Policy — Settlement^
    In an action on a fire policy, wherein it was .contended that a settlement was obtained by duress, evidence held sufficient to sustain tbe plea thereof.
    [Ed. Note. — Por other cases, see Insurance, Cent. Dig. §§ 1555, 1707-1728; Dec. Dig. <&wkey;> 665.)
    5. Trual <&wkey;296 — Action on Fxee Policy-Instruction — Cube.
    In an action on a fire insurance policy, wherein a contract of settlement was imposed as defense, an instruction ignoring such defense was erroneous, notwithstanding that other instructions recognizing the contract of settlement were also given, since it was impossible to determine which of the conflicting instructions were followed by the jury.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 705-713, 715, 716, 718; Dec. Dig. &wkey; 296.)
    Appeal from Stonewall County Court; B. S. Tillotson, Judge.
    Action by L. F. Richards and others against the Fire Association of Philadelphia. Judgment for plaintiffs, and defendant appeals.
    Reversed and remanded.
    Crane & Crane, of Dallas, for appellant. Ernest Herring and J. M. Carter, both of As-permont, for appellees.
   DUNKLIN, J.

The Fire Association of Philadelphia issued an insurance policy upon a house owned by L. F. Richards and wife, insuring the samé against loss or damage by fire for a term of one year, beginning November 10, 1911, and ending November 10, 1912. The premium paid by L. F. Richards was $3.87, and the amount of insurance was $300. The policy also contained a provision that any loss or damage sustained and proven to be due under the policy should be payable to R. B. Spencer & Co. as their interest might appear, subject to the terms and conditions of the policy. The house insured was a one-story frame building occupied by L. F. Richards and wife as a dwelling and situated in the town of Aspermont, Tex. The house was wholly destroyed by fire on November 28, 1911. On December 20, 1911, Sam Buck-lew, adjuster for the insurance company, reached an agreement with L.- F. Richards for the settlement of the claim theretofore made by him for the loss of the house, and also for the loss of its contents, which were covered by another insurance policy for the sum of $250, not litigated in this suit. By the terms of that agreement the adjuster, as the agent and representative of the insurance company, agreed to pay Richards, who agreed to accept, the sum of $50 in full satisfaction of said policies. In pursuance of that agreement Bucklew executed and delivered to Richards a draft, drawn upon Trezevent & Cochran, general agents of the insurance company at Dallas, for the sum of $50, payable to the order of L. F. Richards and R. B. Spencer & Co.; the draft containing the following stipulation:

“It is agreed that the indorsement and collection of this draft by the payee or payees shall constitute a receipt in full for all sums due by reason of said loss under said policy, and by said payment the policies are canceled in fuU for the above amount, leaving no insurance thereunder whatever. Assured did this day surrender the above numbered policies to the insurance company. Assured further agrees that this draft shall be turned over, to R. B. Spencer & Co.”

At the same time L. F. Richards executed and delivered to Bucklew a receipt acknowledging the payment to him of said $50 by the Fire Association and containing substantially the same stipulation above quoted from the draft. It seem§ that the draft was never collected by the payees. This suit was instituted to recover the amount stipulated in the policy; the plaintiffs in the case being L. F. Richards and wife, Mrs. M. A. Richards, and R. B. Spencer, H. S. Abott, and J. B. Lipscomb, composing the partnership firm of R..B. Spencer & Co., and the defendant being the Fire Association named.

In the petition the execution and delivery of the policy and the total destruction of the house by fire were alleged. It was further alleged that at the time of the issuance of the policy, and at the time of the fire, the house was the homestead of L. F. Richards and wife, who were indebted to the firm of R. B. Spencer & Co. in the sum of $120, evidenced by their eight certain promissory notes in the sum of $15 each, all dated December 1, 1909, which were given for material used in building said house, which said notes were secured by a furnisher’s lien upon the house,' fixed in accordance with the statutory provisions relating thereto. It was further alleged that Bucklew, defendant’s adjuster, without the knowledge or consent of R. B. Spencer & Co., and by threats made to L. F. Richards to procure the indictment and conviction of his wife, Mrs. M. A. Richards, for burning the house, procured the contract of settlement from Richards referred to above. It was alleged that L. F. Richards did not willingly and freely enter into said contract of settlement, but that he was intimidated and coerced into agreeing to such settlement by the threats so made by Bucklew to prosecute and convict Mrs. M. A. Richards for burning said house, and that by reason of those facts the contract of settlement was invalid and of no force or effect. It was further alleged that plaintiffs had refused to accept the said draft in satisfaction of the said policy. It was further alleged that; as the house was totally destroyed, the policy became a liquidated demand against the defendant for its full amount; that notice of the loss was duly given by the plaintiff to the defendant, together with proper proof thereof;

In its answer the defendant denied that the settlement with L. F. Richards was procured by fraud, duress, or threats of any character, and alleged that the same was made willingly and freely on the part of L. F. Richards. Defendant further alleged that Mrs. M. A. Richards was equally interested with her husband, L. P. Richards, in the property insured, which was community property of the two, and likewise equally interested in said policy as a cobeneficiary with her husband therein; that the fire which destroyed the building was due to the act or procurement of Mrs. M. A. Richards, who set fire thereto, or caused the same to be destroyed by fire, for the purpose of collecting the insurance upon the property, and hence the defendant was not liable thereon. It was further alleged that, while the policy contained provisions requiring plaintiffs to furnish to the defendant within 90 days after the fire proof of said loss, and that the policy would not be due and payable until 60 days after the furnishing of said proof of loss, that said provisions relative to the due date of payment are null and void by virtue of the statutes of Texas and the decisions thereunder, to the effect that, in the event of the total destruction of a building by fire, the policy of fire insurance thereon shall be considered a liquidated demand upon which suit may be instituted immediately after the fire. A further stipulation contained in the policy was also specially pleaded, reading:

“No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within 2 years next after the fire.”

Defendant alleged that the suit had been instituted more than 2 years after the fire, and pleaded the stipulation last mentioned as a bar to any recovery. A trial before a jury resulted in a verdict and judgment in favor of plaintiffs for the sum of $300, with interest from date of suit, from which judgment the defendant has prosecuted this appeal.

As noted already, the fire which destroyed the house occurred on November 28, 1911. This suit was instituted December 29, 1913, more than 2 years after the date of the fire, and by different assignments of error appellant insists that the provision in the policy last quoted, to the effect that no suit or action on the policy for the recovery of any claim shall be sustainable in any court of law or equity, not commenced within 2 years next after the fire, was a complete bar to any recovery, and that the court erred in refusing a peremptory instruction in its favor as requested; also in refusing to sustain defendant’s special exceptions to the petition, which exceptions presented the same defense, and in submitting any instruction to the jury which would permit a verdict in plaintiff’s favor upon any theory.

Article 4874, 3 Vernon’s Sayles’ Tex. Oiv. Stat., reads:

“A fire insurance policy, in case of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy: Provided, that the provisions of this article shall not apply to personal property.”

Article 5713 of the Statutes reads:

“It shall be unlawful for any person, firm, corporation, association or combination of whatsoever kind to enter into any stipulation, contract, or agreement, by reason whereof the time in which to sue thereon is limited to a shorter period than two years. And no stipulation, contract, or agreement for any such shorter limitation in which to sue shall ever be valid in this state.”

Article 5714 reads, in part, as follows:

. “No stipulation in any contract requiring notice to be given of any claim for damages as a condition precedent to the right to sue thereon shall ever be valid, unless such stipulation is reasonable ; and any such stipulation fixing the time within which such notice shall be given at a less period than 90 days shall be void. $ * * »>

In the case of Taber v. Western Union Tel. Co., 104 Tex. 272, 137 S. W. 106, 34 L. R. A. (N. S.) 185, the Telegraph Company, which was sued for damages for negligent delay in the transmission and delivery of a message, pleaded in bar of the action the failure of the sender of the message to comply with the following stipulation contained in the contract:

“All messages taken by this company are subject to the following terms: The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within 90 days after the message is filed with the company for transmission.”

In that case our Supreme Court, referring to article 5714 of the Statutes, said:

“The statute is plain in its terms that ‘any such stipulation fixing the time within which such notice shall be given at a less period than 90 days shall be void.’ The provision in the contract requiring that notice shall be given within 90 days after the filing of the message we construe to mean that such notice shall be given before the expiration of 90 days after the filing of the message, and hence is void. The statute gives a claimant 90 full days as the shortest time to which he may be prescribed by contract in presenting his claim for damages, and any abridgment of that right annuls the contract. The New York Court of Appeals, in Merchants’ & Traders’ Bank v. Mayor, 97 N. Y. 361, in construing a city ordinance which provides for notice to be given ‘at any time within 10 days after the completion’ of certain work, held such ordinance to mean that notice must be given before the expiration of 10 days after the completion of the work. It is our opinion that, even if the stipulation was not repugnant to the provisions of the statute by requiring the notice to be given ‘within 90 days,’ the same is nevertheless void by virtue of the provision arbitrarily fixing the period from which the 90 days shall be computed at the time of filing the message, as contradistinguished from the time the cause of action arose as provided for in the statute as we construe its meaning.”

T. & P. Ry. Co. v. Langbehn, 150 S. W. 1188, Smith v. I. & G. N. Ry., 138 S. W. 1074, and St. L. & S. W. Ry. v. Brass, 133 S. W. 1075, are to the same effect.

In Continental Insurance Co. v. Chase, 33 S. W. 602, it was held that under the article of the statute now numbered 4874, providing that a fire insurance policy upon property other than personal property shall be considered a liquidated demand whenever the property is wholly destroyed by fire, no effect could be given to a provision in a policy requiring the insured to furnish to the company proof of such loss within 60 days after fire, and further stipulating that no suit should be instituted upon the policy until such proof had been so furnished. In that connection the court said:

“If the amount due is fixed and settled, we cannot see how it can be open for adjustment, proof, or anything else but payment. The holder of the policy in such cases has nothing to do but to present his policy for payment, as he would a promissoi’y note. It is due when the loss occurs, regardless of the stipulations in the contract to the effect that it shall be due so many days after proof of loss, for this statute has done away with proof of loss for any purpose whatever.”

To the same effect are the following decisions: Georgia Home Ins. Co. v. Leaverton, 33 S. W. 579; Hamburg-Bremen Ins. Co. v. Ruddell, 37 Tex. Civ. App. 30, 82 S. W. 826; Fire Association of Philadelphia v. Strayhorn, 165 S. W. 901.

Under those authorities we hold that if appellant was liable upon the policy in suit the amount of that liability was due immediately after the fire occurred, and that the stipulation contained in the policy for notice and proof of loss to be made as a prerequisite to the right to sue upon the policy was void, as alleged by appellant in its answer. In Tex. & Pac. Ry. Co. v. Langbehn, 158 S. W. 244, a stipulation in the bill of lading for goods shipped, and for the loss of which the suit was instituted, was invoked by the railway company as a bar to the action. That stipulation read: -

“In no event shall any suit be sustained, unless the same shall be commenced before the expiration of 2 years from the date the cause of action accrued.”

Article 5713 of the Statutes quoted above 'was invoked in reply to that contention. In that case' the Court of Appeals at Galveston held that the stipulation in the bill of lading was in violation of that statute, and therefore invalid. The conclusion so reached was predicated upon the decision of our Supreme Court in Taber v. Western Union, supra. In other words, it was held that if a provision in a contract requiring notice of damages to be given within 90 days was in violation of article 5714, as decided in the Taber Case, then the provision in the bill of lading, requiring suit to be instituted before the expiration of 2 years from the date the cause of action accrued, fixed a period of limitation for the institution of the suit shorter than 2 years and was therefore in violation of article 5713 of the statute. In that case the. majority of the court criticized the decision in the Taber Case, but felt constrained to follow it, and to hold that the principle was decisive of the question then determined.

The provision in the policy is substantially the same as the one noted in the bill of lading in the Langbehn Case last referred to. Article 5713 is one of the articles of title 87 upon the subject of limitation of actions, embracing all our statutes of limitation, all of which statutes require suits upon different causes of action to be instituted “within” 1, 2, 3, 4, 5, and 10 “years,” respectively. And while we have concluded to follow the opinion of the Court of Appeals for the First District in the Langbehn Case, for the reasons therein stated, yet, if the question were one of first impression, the majority at least would be inclined to hold that article 5713 should be construed as prohibiting a stipulation in 'any contract fixing a period of limitation for suit thereon to a period shorter than is fixed by the statute of'limitation of 2 years, rather than as adding 1 day to that period.

The jury were instructed, in effect, that the contract of settlement was valid and binding upon the plaintiffs, unless the same was obtained through duress, as pleaded by them.

Appellant earnestly insists that the evidence was insufficient to sustain the plea that the contract of settlement was procured through duress exerted upon Richards. Testimony at length is cited strongly tending to negative the truth of such finding by the jury. According to Bucklew’s testimony, which was corroborated by other evidence, Bucklew procured the affidavits from several of the - citizens residing at Aspermont relative to the origin of the fire. In a conversation with L. F. Richards, just before the settlement was agreed to, he submitted those affidavits to Richards, and at the time stated to him in substance that he believed Mrs. Richards set fire to the house, and that that belief was based upon the information contained in the affidavits. Bucklew further testified, in effect, that Richards took the affidavits with him and repaired to the office of his attorney for advice relative to the proposition already made by Bucklew to pay the sum of $50 in full settlement of the two policies of insurance, one being upon the contents of the house, and the other being the policy in controversy in this suit upon the building; that, after consulting with his attorney, Richards freely and voluntarily agreed to the settlement; and that Bucklew at no time made any of the threats charged in plaintiffs’ petition. But opposed to that testimony was the testimony of Richards himself, substantially that such threats were made by Bucklew, and that he was thereby coerced and intimidated to accept the proposition of settlement made by Bucklew. 1-Ie further testified that after Bucklew submitted the proposition, and made the threats to send his wife to the penitentiary unless the proposition was accepted, fie (Richards) did go out to consult his lawyer, who returned with him to Bucklew; that the attorney then requested of Bucklew to show him the affidavits upon which he based his opinion that Mrs. Richards had burned the house, but that this request was declined by Bucklew; that thereupon the attorney declined to advise Richards whether or not to accept the proposition, by reason of his ignorance of the information upon which Bucklew’s charge was based. Other evidence was introduced tending in some respects to corroborate the testimony of Richards. In view of such evidence on the part of plaintiffs, the assignment now under discussion must be overruled.

Error has been assigned to the following instruction given by the court to the jury:

.“If you believe from the evidence that defendant, after the destruction of said house above described, with knowledge thereof, denied its liability to plaintiffs and refused to pay plaintiffs the amount of said insurance, you will find in favor of plaintiffs, unless you further believe that said house was destroyed by the act or procurement of plaintiff Mrs. M. A. Richards, in which event you will find for the defendant.”

The criticism of this instruction is that it ignores other issues under which the jury would be justified in finding for the defendant. The instruction clearly ignores and excludes any defense to the suit by reason of the contract of settlement. In effect, it is a peremptory instruction that the contract of settlement was Invalid and of no binding force or effect.

Appellee insists that the error, if any, in the instruction, was harmless, in view of the fact that in other portions of the charge the jury were instructed, in effect, that the contract of settlement would preclude a recovery unless the plea of the plaintiffs that the same was executed under duress was sustained, and that the burden was upon plaintiffs to sustain that plea. It is impossible to determine which of these conflicting instructions were followed by the jury, and in the absence of any showing that the error in the instruction quoted did not influence the jury to the defendant’s prejudice, the assignment of error now under discussion must be sustained. Burgher v. Floore (Sup.) 174 S. W. 819; Railway Co. v. Sage, 98 Tex. 438, 84 S. W. 814.

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

      «gxsoFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes