text:
    PARLIN & ORENDORFF IMPLEMENT CO. v. FREY.
    (No. 1891.)
    (Court of Civil Appeals of Texas. Texarkana.
    Feb. 6, 1918.
    Rehearing Denied Feb. 14, 1918.)
    1. Removal of Causes &wkey;>74 — Action on Notes and Guaranty — Interest and Attorney’s Fees.
    Where the payee sued on notes and against the guarantor for the interest and attorney’s fees accrued and not paid prior to the due date of the notes, the amount in controversy was the amount of the interest and attorney’s fees, and not the amount of the notes, though the guarantor denied its liability and the judgment might be pleaded as res judicata in any future action .against the guarantor.

      2. Judgment &wkey;>S86(l) — Conclustveness — Res Judicata.
    The distinction between a judgment operating as estoppel to further litigation of a particular question of fact and one which is a complete bar to a second suit is that the former may be invoked when there is an identity of parties and issues, and the latter only when there is •also identity of subject-matter.
    3. Removal of Causes <&wkey;>4S — Right to Remove-Separable “Controversy.”
    To entitle a nonresident defendant to removal of the cause to the federal court under U. S. Comp. St. 1916, § 1010, the controversy as to him must be separable from that against resident codefendants, the word “controversy” meaning matter in dispute, in passing on which the court must look to the cause of action as set out in the petition.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Controversy.]
    4. Removal of Causes <&wkey;49(2) — Right to Remove — Separable Controversy.
    To justify a separation of the defendants joined in a suit, it is not enough that they may be, at the election of the plaintiff, proceeded against either jointly or separately, but there must be more than one cause of action.
    5. Removal of Causes &wkey;>49(2) — Right to Remove — Separable Controversy.
    In view of Rev. St. 1911, art. 587, as to suing indorsers jointly with the principal obli-gors, and article 1842, providing that no judgment shall be rendered against a surety unless a judgment has been previously or is at the same time rendered against the principal, an action by the payee of a note against the maker, and a guarantor by separate instrument, for interest in default and for attorney’s- fees, brought before the due date of the note, is not separable so as to entitle nonresident guarantor to removal of the cause.
    6. Corporations &wkey;>338(2) — Contracts — Ultra Yires Acts — Estoppel.
    A corporation which guaranteed a note and received a benefit therefrom could not set up the ultra vires character of its guaranty as a defense to an action for delinquent interest and attorney’s fees on the note.
    7. Corporations <&wkey;3S9 — Contracts—Ultra Vires Acts — Estoppel.
    Evidence held to show that the corporation which guaranteed a. note received a benefit thereunder so as to estop it to assert the ultra vires character of the transaction.
    Appeal from District Court, Lamar County; A. P. Dohoney, Judge.
    Action by Mrs. Leona Frey against the Parlin & Orendorff Implement Company and others. Judgment for plaintiff, and defendant named appeals.
    Affirmed.
    Etheridge, McCormick & Bromberg, of Dallas, for appellant. A. P. Park and Moore & Hardison, all of Paris, for appellee.
   HODGES, J.

The appellee in this suit seeks a judgment against W. A. McCullough as the maker, and the Parlin & Orendorff Im-,— plement Company as the guarantor, of two promissory notes for $2,500 each. Both notes^were dated June 6, 1912; one was due January 1, 1919, and the other one year later. Each bore interest at the rate of 8 per cent, per annum, which' was payable annually on January 1st. Both notes contained stipulations for the payment of attorney’s fees in the event they were placed in the hands of an attorney for collection or suit was instituted thereon. Attached to the notes was the written guaranty of the Parlin & Orendorff Implement Company. The plaintiff’s amended original petition, on which the case was tried, contained the usual averments in suits on promissory notes, copies of which w'ere attached as exhibits and made a part of the petition. It was also alleged that the written guaranty of the Parlin & Orendorff implement Company was executed and delivered contemporaneously with the notes, and was -based upon the same consideration, and that interest amounting to $1,200, was due and unpaid; that although the principal of the notes had not matured, the appellant, ^ Parlin & Orendorff Implement Company, had denied its liability thereon as a guarantor. The plaintiff asked for judgment against McCullough and the Parlin & Orendorff Implement Company for the amount of the notes, principal, interest, and attorney’s fees, and, in the alternative, for the amount of interest due and the attorney’s fees thereon. The petition also alleged that the appellant was a foreign corporation, with its general office in Dallas, Tex. On the day the defendants were required to answer, the appellant, Parlin & Orendorff Implement Company, presented its petition -and bond for a removal of. the case against it to the United States District Court. The trial judge, being oi opii>" ion that no separable controversy was shown,-refused the application. The appellant thereafter filed its answer, which included a general denial, and specially pleaded that the guaranty relied on was an ultra vires contract. ' In a trial before the court without a jury judgment was rendered in favor of the appellee for the accrued interest and attorney’s fees, aggregating the sum of $1,428.41. The Parlin & Orendorff Implement Company alone.,has appealed.

The several assignments of error appearing in the appellant’s brief present two questions: (1) Was the appellant entitled to have the suit against it removed to the federal court? (2) Was the written guaranty sued on an ultra vires contract? Tlie right of removal is resisted upon two grounds: (1) Because the amount involved is less than $3,000, and not within the jurisdiction of the federal court: and (2) because the grounds upon which it was sought to hold the appellant liable did not present a separable controversy. Both the pleadings and the evidence show that while the notes and contract of guaranty were separate instruments, they were executed and delivered at the same time. It was also shown by the evidence that the execution and delivery of appellant’s written guaranty was a condition upon which the notes were to be accepted by the appellee.

If the amount involved in this suit includes only the interest then due upon the notes and the attorney’s fees, which aggregate loss than $3,000, that settles the question of removal. But the appellant contends that the notes themselves are involved, and that a judgment- rendered in this suit settles the issue of appellant’s liability as a guarantor for the whole amount which can be pleaded as res ad judicata in any future action thereon. It is true the appellee alleged in her petition that the appellant was denying its liability for any part of the indebtedness evidenced by the notes, and asked for a judgment for the full amount of the principal sum, together with interest and attorney’s fees; but she failed to allege any facts legally sufficient to authorize a recovery. It appeared from the face of her petition that neither of the notes was due, and that she was entitled to recover only the interest which had then matured, together with attorney’s fees thereon. The fact that the appellant denied its liability was not sufficient to authorize the rendition of a premature judgment. N. Y. Life Ins. Co. v. English, 96 Tex. 268, 72 S. W. 58. In suits of this character, the amount in controversy is the sum for which judgment may be rendered, and that is to be determined by the substantial averments of the petition, not by the prayer for relief. Wells Fargo Express Co. v. Crittenden, 189 S. W. 296; W. U. Tel. Co. v. Arnold, 97 Tex. 365, 77 S. W. 249, 79 S. W. 8; Ainsa v. Moses, 100 S. W. 791. In this case the accrued interest and attorney’s fees furnished the limit of the relief to which the appellee was entitled, under her pleadings and a favorable state of the evidence. Had this aggregate been less than $500, the district court could not have entertained jurisdiction. Each installment of interest as it matured gave rise to a distinct cause of action, and a suit therefor might have been instituted in any court having jurisdiction of the amount then payable. N. Y. Life Ins. Co. v. English, supra; First National Bank v. Lyon-Gray Lumber Co., 194 S. W. 1152; Continental Casualty Co. v. Morris, 46 Tex. Civ. App. 394, 102 S. W. 773; Weiler et al. v. Henarie, 15 Or. 28, 13 Pac. 614.

We may concede that the appellant’s liability as a guarantor for the principal of the two notes will be concluded by the judgment rendered in this case; but that does not necessarily imply that the principal of the notes constitutes the subject-matter of this suit. When by the terms of a contract the right to prosecute successive causes of action is given, it may often happen that in the determination of the first controversy defenses are presented and passed upon which apply with equal force to the' contract in its entirety or to any one of the actions thereafter accruing; as, for instance, where the execution of the contract itself is denied, or, as in this case, where the corporate authority to enter into the particular contract is pleaded. In such cases the questions actually raised and decided in the first suit cannot be litigated a second time in any subsequent action based upon the same contract. ThompKins v. Hooker et al., 200 S. W. 193, recently decided by this court; Cromwell v. Sac County, 94 U. S. 356, 24 L. Ed. 195; Lbr. Co. v. Buchtel, 101 U. S. 638, 25 L. Ed. 1073. That result, however, would follow in any suit where the parties are the same, even though the subject-matter be different; hence the mere fact that this judgment would be res adjudicata as to some of the issues of fact affecting the appellant’s liability in future- controversies growing out of this contract does not furnish the true criterion for determining what is the subject-matter now involved. There is a recognized distinction between a judgment which operates merely as an es-toppel to the further litigation of a particular question of fact, and one which is a complete bar to a second suit. As will be seen in the cases above referred to, the former may be invoked when there is an identity of parties and issues, while to make the latter available there must also be identity of subject-matter. The defenses presented in this suit are primarily designed to defeat this particular action for accrued interest, and no other. The legal effect of the adjudication here made upon a future action for the principal debt is the incidental result of this proceeding. The judgment here rendered would not bar a suit upon the notes for their principal or any future installment of interest. To. enforce the collection of these, other suits must be brought at the proper time. The scope of such incidental consequences may be considerably enlarged by the character of the defendant’s pleadings. The answer may be so framed as to require an adjudication of all the possible defenses that may be urged .in any future controversy growing out of the same contract. It may even go further and seek affirmative relief in the cancellation of the entire contract. The legal effect of an adverse judgment would logically be as broad as the issues of fact decided; but the jurisdiction of the federal court must be ascertained. from the pleadings of the plaintiff, not from the issues injected by the answer of the defendant. In this case the trial court rendered a judgment in favor of the plaintiff for all the relief warranted by her pleadings. This, being less-than $3,000, was not within the jurisdiction of the federal court, and for that reason alone the court was justified in refusing the application for a removal.

But the writer is of the opinion that this refusal was justified upon the further .ground that the case as presented in the appellee’s amended original petition did not disclose a separable controversy. The provisions of the federal statute relating to that subject are to be found in section 28 of the Judicial Code (Act Cong. March 3, 1911, c. 231, 36 Stat. 1087) and section 1010 of the United States Compiled Statutes for 1916, Annotated. The language of that provision is:

“When in any suit mentioned in this section there shall be a controversy which is wholly between citizens of different states, and which ■can be fully determined between them, then either one or more of the defendants actually interested in such controversy may remove said suit into the District Court of the United States for the proper district.”

It has been repeatedly held that where a nonresident defendant is joined in the same suit with one or more defendants who reside in the state where the suit is brought the controversy, in so far as it affects the nonresident, must be separable, in order to clothe the latter with the right of removal to a federal court. The question here presented is, Does the cause of action set out in the plaintiff’s petition disclose a separable controversy? The word “controversy” as here used evidently means the matter in dispute. If this is a compound of several distinct elements or causes of action which may be divided in the separation of parties so that each controversy may be fully determined without the joinder of other defendants, then it is separable. In passing upon that question courts must look to the cause of action as set out in the plaintiff’s petition. Ala. & G. S. Ry. Co. v. Thompson, 200 U. S. 206, 26 Sup. Ct. 161, 50 L. Ed. 441, 4 Ann. Cas. 1147; Cincinnati, etc., Ry. Co. v. Bohon, 200 U. S. 221, 26 Sup. Ct. 166, 50 L. Ed. 448, 4 Ann. Cas. 1152. The cases referred to were suits for personal injuries against nonresident railway corporations, in which were joined as parties defendant the employés whose negligence caused the damages. In each instance the right of removal was denied upon the ground that the controversy was not separable. In the first-case Justice Day quotes approvingly the following from an earlier decision of the court:

“It is well settled that an action of tort, which might have been brought against many persons, or against any one or more of them, and which is brought in a state court against all jointly, contains no separate controversy which will authorize its removal by some of the defendants into the Circuit Court of the United States, even if they file separate answers and set up different defenses from the other defendants, and allege that they are not jointly liable with them, and that their own controversy with the plaintiff is a separate one; for, as this court has often said', ‘a defendant has no right to say that an action should be several which the plaintiff seeks to make joint.’ A separate defense may defeat a joint recovery, but it cannot deprive a plaintiff of his right to prosecute his suit to final decision in his own way. The cause of action is the subject-matter of the con-£-troversy, and that is, for all the purposes of the suit, whatever the plaintiff declares it to be in his pleadings.”

In a subsequent portion of the opinion the following language is used:

“It is urged with much earnestness by the learned counsel for the company that this view works a surrender of the right of determination of federal rights in the federal courts, and deprives nonresident citizens of their rights to appeal to those tribunals. The decision of a state court that such actions as the present might be joint at common law would have no controlling effect in the federal courts in determining the questions in causes properly before them. And the question here is, not what is the rule of the federal courts in similar cases, but is, what controversy has Congress made removable in the act .under consideration? Congress has not said, whatever it might do, that controversies between citizens of different states shall be removable wherein it is sought, contrary to the law as administered in the federal courts, to hold a citizen of another state to joint liability and tort with a citizen of the state where the action is brought. The fact that the state court may take a different view from the courts of the United States of the common law as to the character of such actions, and the right to prosecute them in form joint as well as several, affords no ground of removal. The federal courts in some states hold a different rule as to the doctrine of fellow servants from that administered in the state courts, and in other ways administer the common law according to their own views. It has not been suggested that a right of removal should arise from such differences. No more has Congress given the right where the state permits an action to be prosecuted jointly which would be held to be several only in the courts of the United States. * * * The test of such controversy, as this court has frequently said, is the cause of action stated in the complaint. That is joint in character, and there is no attack upon the good faith of the action.”

The second case cited above originated in Kentucky and involved the application and construction of a Kentucky statute and a portion of the Kentucky Constitution. The laws of Kentucky gave to the injured party a joint and several cause of action for injuries resulting in death against the servant whose negligence caused the injury and the employing corporation. After quoting from the statute and Constitution of Kentucky and from decisions rendered by its highest court construing those provisions, Justice Day said:

“A state has an unquestionable right by its Constitution and laws to regulate actions for negligence; and where it has provided that the plaintiff in such cases may proceed jointly or severally against those liable for the injury, and the plaintiff in due course of law and in good faith has filed a petition electing to sue for a joint recovery given by the laws of the state, we know of nothing in the federal removal stat-' ute which will convert such action into a separable controversy for the purpose of removal, because of the presence .of a nonresident defendant therein properly joined in the action under the Constitution and laws of the state wherein it is conducting its operations and is duly served with process.”

It is true that in both of the above cases the suits were founded upon torts; but the ruling principle governing the rj.ght. of removal is not different from that which should be applied in suits founded upon contract. To justify a separation of the defendants joined in a suit it is not enough that they may be at the election of the plaintiff proceeded against either jointly or separately, but there must be more than one cause of action. Geer v. Mathieson, 190 U. S. 428, 23 Sup. Ct. 807, 47 L. Ed. 1122. Under the laws of Kentucky the defendants in the Bohon Case, cited above, might have been sued either jointly or separately. The plaintiff, haying elected to join them in one action, could not be compelled to separate them in order that the nonresident might have its trial in the federal court.

\ But it may be said that the liability of all the parties responsible for a tort is joint in its inception, and for that reason alone the cause of action is inseparable. That fact is unimportant unless the incipient conditions out of which the liability arises materially I affects the method of enforcing the remedy. / £i by the local laws all the parties responsi;^-ble-for a debt may be jointly sued in one action, regardless of when or how their respec-r tive liabilities originated, it is difficult to per- : ceive any well-founded reason for the distinction. The removal statute is one which ap- \ plies only to the remedy, and has no concern with the manner or form by which different defendants become bound for the same debt, \ except in so far as that manner or form affects the remedy. If the subject-matter of the suit is the same as to all the defendants \t — as here, where 'only one debt is involved f —the cause of action must be one and the same.' The plaintiff does not secure that ... full relief to which she is entitled until she " secures a judgment against all the parties bound for the payment of her debt. This case is materially different from one in which are y joined defendants whose obligations do not overlap or touch. At commn law the time and manner in which parties become obli- ' • gated for the payment of commercial paper was important in determining the remedy, that is, whether it was joint or several; and '! if joint, to what extent the parties defendant might be collectively proceeded against. Kildare Lbr. Co. v. Atlanta Nat. Bank, 91 Tex. 95, 41 S. W. 64. But our statute has abolished many of those rules, and it is now - permissible to unite as parties defendant many who could not have been joined at common law. Article 587 of the Revised Civil Statutes is as follows:

“Assignors, indorsers and other parties not primarily liable upon any of the instruments named in this title, may be jointly sued with their principal obligors, or may be sued alone in the eases provided for in articles 1842 and 1843.”

Here we have an express permission to join sureties and guarantors in suits against the principal obligor on promissory notes. Article 1842 provides:

“The acceptor of any bill of exchange, or any other principal obligor in any contract, may be sued either alone or jointly with any other party who may be liable thereon; but no judgment shall be rendered against such other party not primarily liable on such bill or other contract, unless judgment shall have been previously, or shall be at the same time, rendered against such acceptor or other principal obligor, except where the plaintiff may discontinue his suit against si^ch principal obligor as hereinafter provided.’^ b

Article 1843 provides, in substance, that the assignor, indorser, guarantor or surety upon a note or contract may. be sued alone without the necessity of previously suing the principal obligor when, the latter resides beyond the limits of the state or in such part that he cannot be reached by the ordinary process of law, or when his residence is unknown, or when he is dead or is actually or notoriously insolvent.

If this state has the right to enact those laws and thus regulate actions on commercial paper originating within its limits — to prescribe the form of the remedy — as is held in the Bohon Case, then the appellee in this suit has exercised her lawful privilege. If after having done this she may be compelled to submit to a severance by a removal to the federal court at the instance of the appellant, the local law is to that extent annulled. It is clear, I think, from the language used in the cases cited, that no such assumption of authority was intended by Congress in the enactment of the removal statute.

/In this case there is but one cause of ac-iipju stated in the appellee’s petition; the interest and attorney’s fees now due upon the notes. This constitutes one debt, and can be satisfied by one payment made by either of the parties responsible therefor. While those parties obligated themselves by the execution of separate instruments — one _a_s the principal and the other as a guarantor^-all originated at the same time and were based upon the same consideration ;■ that is, the sale to McCullough of the stock owned by the appellee. It was also alleged and proved upon the trial that the execution of the guaranty by the appellant was a condition upon which McCullough’s notes were accepted. Under such circumstances the appellant’s contract is as much a part of the notes as if its guaranty had been indorsed upon them. The appellee had the right to pypr ceed against either of those parties by separate suits or to join them in one action! If the appellant has the right of removál, then the appellee may be compelled to divide her cause of action and bring two suits instead of one for the collection of the same debt. In the opinion of the writer the refusal of the application for removal is sustained by the following authorities in addition to those previously cited: Torrence v. Shedd, 144 U. S. 527, 12 Sup. Ct. 726, 36 L. Ed. 528; Pirie v. Tvedt, 115 U. S. 41, 5 Sup. Ct. 1034, 1161, 29 L. Ed. 331; German Merc. Co. v. Gas Service Corp. (D. C.) 228 Fed. 827; Moore v. Los Angeles (C. C.) 89 Fed. 73.

As a defense to this suit against it the appellant answered that it was a private corporation organized under the laws of the state of Illinois for the purpose of manufacturing and dealing in agricultural imple•ments and vehicles, etc., and that it had no corporate authority to guarantee the commercial paper of third partieiT~The reply to that plea of ultra vires is that the appellant received a benefit; that the ultimate purpose of the guaranty was to secure that benefit, and was therefore executed in furtherance of the appellant’s legitimate business. In support of its contention that the contract was ultra vires counsel for appellant refer to numerous authorities, among which is Deaton Grocery Co. v. International Harvester Co., 47 Tex. Civ. App. 267, 105 S. W. 556. Justice Key, who rendered the opinion in that case, cites numerous authorities, and quotes at length from North Side R. R. Co. v. Worthingon, 88 Tex. 562, 30 S. W. 1055, 53 Am. St. Rep. 778, the leading authority in this state upon the principle invoked by the appellant. In that case it is held, as in the case decided by Judge Key, that in order to bind a private corporation as a surety or guarantor for a third party upon the ground that it has received a benefit from the transaction, it must appear that the benefit was immediate and direct, and not indirect. But a statement of the rule in those general terms does not solve the principal difficulties usually presented in this character of cases. It is'frequently more troublesome to apply the rule then to find out what it is.

We think the facts justify the conclusion reached by the trial court that the appellant did receive a direct benefit as the consideration for its guaranty. The testimony showed that O. C. Frey, the husband of the appellee, and from whom she acquired the stock sold to McCullough, died in 1912. At the time of his death he was engaged in conducting a hardware and implement business under the name of O. C. Frey Hardware Company, in Paris, Tex. He had been engaged in that business for a number of years. The O. O. Frey Hardware Company was a private corporation, in which O. C. Frey owned practically all of the stock. Long prior to his death he had been doing business with the appellant, Parlin & Orendorff Implement Company, the annual amount of which was estimated at from $75,-000 to $100,000. It was the custom of the O. O. Frey Hardware Company to take goods from the appellant on consignment in connection with its purchases from the appellant and other sources. The consigned goods were usually settled for by the indorsement and transfer by the O. C. Frey Hardware Company to the appellant of notes taken from customers in the retail trade. At the time of the death of O. C. Frey the O. C. Frey Hardware Company had on hand goods of the appellant held on consignment to the amount of about $40,000. It owed the appellant a large amount of money; in fact, the testimony shows that the appellant was by far its largest creditor. The stock held by O. C. Frey in the O. C. Frey Hardware Company passed upon his death to the appellee, his widow. She, through an agent, began to look for some one to purchase her stock, and who would carry on the business. The appellant also took considerable interest in finding a purchaser. The names of two men were mentioned, McCullough, one of the defendants in this suit, and another party by the name of Roe. The appellee through her agent w(as about to conclude a trade with Roe for the sale of her stock in consideration of $30,000. According to the testimony of this agent, the manager of the appellant company interfered and prevented the trade. The appellant’s manager insisted that the stock should be sold to McCullough; and promised that in the event it was the appellant would guarantee a part of the purchase price. It appears from the evidence that McCullough had been doing business at another point in Texas, and had been receiving goods on consignment from the appellant, disposing of them in a manner similar to the business conducted by the O. C. Frey Hardware Company at Paris. Mrs. Frey did not feel at liberty to disregard the wishes of the appellant in selecting the purchaser of her stock, for the reason that the appellant was a large creditor, and probably for the further reason that it had considerable goods in the hands of the O. C. Frey Hardware Company on consignment and would be interested in the further conduct of that business. It was finally agreed that if the appellant would guarantee the two notes described in .the appellee’s petition, the sale to McCullough would be made. The notes and the guaranty were executed and delivered at the same time and as parts of the same transaction. By installing McCullough as the owner and manager of the O. C. Frey Hardware Company appellant secured not only a customer, but an agent who would continue to receive and handle its goods on consignment. The state of the evidence was such that the court might have concluded that McCullough and the appellant had an understanding by which the O. C. Frey Hardware Company would, under the new management, continue the same relations and course of dealing formerly pursued. The evidence shows that the appellant took great interest in the conduct of the business of the O. C. Frey Hardware Company after the purchase of the stock by McCullough. It is undisputed that the appellant had its principal office at Dallas; that the by-laws of the O. C. Frey Hardware Company were prepared by its attorney; that in advance of a stockholders’ meeting minutes of all that was done were prepared in the office of that attorney; and that the meeting of the stockholders in Paris was merely formal and only a ratification of what liad previously been determined upon. It is further shown that during the time McCullough had control an agent of the appellant had free access to the books of his company, audited them, and made reports to the appellant. Under this state of the evidence the court had a right to conclude that in the execution of this contract of guaranty the appellant was furthering its own interest and received a direct benefit.

Appellee refers to numerous authorities to sustain this judgment, one of which is Munoz v. Brassel, 108 S. W. 417, in which a writ of error was refused by the Supreme Court.

The judgment of the district court will be affirmed.
      <§=For other cases see same topic and KEY-NUMBER in ail Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: HODGES, J.

license: Public Domain

text:
    SOUTHERN SURETY CO. v. OWENS BROS. et al.
    (No. 1890.)
    (Court of Civil Appeals of Texas. Texarkana.
    Jan. 21, 1918.
    Rehearing Denied Jan. 31, 1918.)
    Highways <&wkey;113(5) — Highway Construction — Action by Contractor on Subcontractor’s Bond.
    Though the petition of O., contractor for highway construction, in action bn bond of F., subcontractor, was insufficient to authorize judgment for the debts for labor and material which F. had failed to pay, it merely alleging- their nonpayment and refusal of F. to pay, the liability of O. to the creditors of F. being under the contracts and bonds that of surety, the bond of F. being merely to indemnify O. against any loss or damage from failure of F. to perform his engagements or. to pay off the labor and material claims for which O. might be held liable under his contract and 'bond with the road officers, and no. cause of action arising in his favor till he had paid in whole or part some of those claims, yet both bonds being statutory obligations and inuring to the benefit of the creditors of F. under Vernon’s Sayles’ Ann. Civ. St. 1914, art. 6394f et seq., and such creditors by their answers or cross-actions seeking judgment against O. on his bond, which they were granted, the pleadings as a whole were sufficient to support the judgment for O. against F.’s surety for what O. might be called on to pay of the balance due on the debts of F. for which O. was liable on his bond.
    Appeal from District Court, Fannin County; Ben. H. Denton, Judge.
    Action by Owens Bros, and others against the ¡Southern Surety Company and others. From a judgment for plaintiffs, the named defendant appeals.
    Affirmed.
    John T. Suggs, of Denison, for appellant. Cunningham & McMahon, of Bonham, for appellees.
   HODGES, J.

On December 28, 1914, Owens Bros. Construction Company, a partnership, entered into a written contract with the board of permanent road commissioners for road district No. 3 of Fannin county, by the terms of which Owens Bros. Construction Company agreed, for a stipulated consideration, to furnish the labor and material, and construct according to specifications certain public highways. This contract provided that Owens Bros. Construction Company should furnish a bond conditioned for the faithful performance of their contract and as an indemnity to any and all persons furnishing labor or material to them or any subcontractor in respect to such construction. The required bond was duly executed and delivered. In March, 1915, this company, by a subcontract, let a portion of their work to W. W. Fuller. Fuller’s contract provided that for an agreed consideration he was to furnish all labor and material and construct a designated part of the highway undertaken by Owens Bros. Construction Company. Among other provisions that contract contained the following:

“Said contract being a part of Owens Bros. Construction Company contract with the present board of road commissioners, road district No. 3, Fannin county, Tex.”

In accordance with the terms of his contract Fuller executed a bond in the sum of $5,000 with the Southwestern Surety Insurance Company as his surety. Some time later the Southern Surety Company, the áp-pellant in this suit, was substituted for the . iSlouthwestepni Surety Insurance Company, and assumed all of the obligations of the bond. Fuller completed the work undertaken by him, but failed to pay the claims of certain parties who had furnished him labor and material. In November, 1915, Owens Bros. Construction Company filed this suit against Fuller and the surety company, also as parties defendant the following holders of unpaid claims against Fuller: The Texas Portland Cement Cbmpany, Clem Gravel Company, F. M. German & Son, Robinson & Son, Robinson & Marshall, and the Steger Dumber Company. It was alleged, in substance, that the plaintiffs at the time of making the contract with Fuller as thereinafter alleged were under a contract with road district No. 3 to construct and complete all the work covered by their contract with Fuller, ¡and to pay for all material furnished and labor done for them and for their subcontractors. The execution of the contract with Fuller was alleged, and its essential provisions set out. It was also averred that in the prosecution of his work Fuller became indebted to the following persons in the sums mentioned for labor performed and material furnished.

It was further alleged that plaintiffs retained, as provided for in their contract with Fuller, the sum of $822.97 due upon estimates made during the progress of the work, and $60 secured from other sources; that after taking into consideration the money in their hands belonging to Fuller there was a balance still due upon the claims above mentioned, and that payment had been demanded of Fuller and refused. It was averred that the plaintiffs were responsible for that amount by virtue of their contract made with road district No. 3. The petition concluded with a prayer asking that the amount of the claims against Fuller be ascertained and fixed, and that plaintiffs have judgment against him and his surety, and for genera] relief.

Each of the above-named parties filed answers, in which they adopted portions of the petition of Owens Bros. Construction Company and set out their own claims, asking judgment for the respective amounts, against Owens Bros. Construction Company and Fuller. An answer was filed by Fuller, but is immaterial, since no appeal has been prosecuted by him. The Surety Company, the appellant herein, answered by general and special exceptions and a general denial. After overruling exceptions the court rendered a judgment in favor of each of the claimants against Owens Bros. Construction Company and the members composing the partnership and Fuller for the amount found to be due for labor and material furnished. In one of the claims the court eliminated items which the evidence showed did not constitute either labor or material as contemplated by the statute and the bond executed by Owens Bros. Construction Company. He also directed in his judgment that the Owens Bros. Construction Company pay over the amount held in their hands belonging to Fuller upon the above claims, to be prorated according to the amount of each, and directing a recovery in favor of Owens Bros. Construction Company against the appellant for any sum they should pay on the balance that remained after deducting those payments. The Surety Company alone has appealed. Appellant’s first contention is that the plaintiff’s petition did not disclose a cause of action in their favor. It is urged that the terms of the bond made by Fuller did not authorize a suit by Owens Bros. Construction Company in behalf of Fuller’s creditors, and that there were no averments that Owens Bros. Construction Company had paid any of those claims.

Under the terms of the contracts and bonds pleaded the liability of Owens Bros. Construction Company to the creditors of Fuller was, as between the parties, that of a surety. The bond sued on was to indemnify Owens Bros. Construction Company against any loss on damage resulting from the failure of Fuller to perform his engagements or to pay off the labor and material claims for which Owens Bros. Construction Company might be held liable under their contract with the board. No cause of action arose in favor of Owens Bros. Construction Company on Fuller’s bond until they had paid in whole or in part some of those claims. Both bonds were statutory obligations, and inured to the benefit of the creditors of Fuller. Vernon’s Sayles’ Statutes, art. 6394f et teeq. While the averments of the plaintiffs’ petition were probably insufficient to authorize a judgment in their favor for the debts which Fuller had failed to pay, other facts were stated which, taken in connection with the answers or cross-actions 'filed by the different claimants, were sufficient to form the basis of the relief which the court granted. In fact, it might .be said that those claimants stood in the attitude of interveners, in which they sufficiently pleaded the indebtedness claimed and for which they secured judgment. Each might be treated as a plaintiff as to that judgment. While the court formally overruled (the demurrers to the petition • of the Owens Bros. Construction Company, he in effect disregarded in the judgment rendered that portion of the petition which was objectionable. The judgment directed that Owens Bros. Construction Company prorate the fund in their hands belonging to Fuller, and have judgment only for what they might be called upon to pay of the balance due upon the debts of Fuller for which they were liable upon their bond. Considered in their entirety, we think the pleadings were sufficient to support the judgment of the court.

There were complaints of the action of the court in allowing the claims in favor of the claimants heretofore mentioned, but the assignments present objections we think are untenable, and they are overruled.

The judgment will be affirmed.
      <gn^>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


text:
    TEXAS & P. RY. CO. v. WILLIAMS.
    (No. 1783.)
    (Court of Civil Appeals of Texas. Texarkana.
    Jan. 17, 1918.
    Rehearing Denied Jan. 31, 1918.)
    1. Commerce &wkey;»27(8) — Railroads—Injuries to Servants.
    A fireman on an interstate train, assisting other employés. in repairing a waterspout at a tank where his engine must then take water, was within his duties, and an injury while so engaged comes under the federal Liability Act (Act Cong. April 22, 1908, c. 149, 35 Stat. 65 [U. S. Comp. St. 1916, §§ 8657-8665]).
    2. Appeal and Error &wkey;>1068(l) — Harmless Error — Instructions.
    An instruction on comparative negligence, if error, was harmless, where the jury found the injury to a fireman was due solely to the railroad company’s negligence and the evidence was insufficient to show contributory negligence.
    3. Trial <&wkey;56 — Reception oe Evidence-Cumulative.
    Where the issue was whether the depression in the servant’s skull was due to a traumatic injury and indicated a fracture, refusal Of defendant’s offer to produce two men whose heads had similar depressions not due to injury, to corroborate undented testimony of Ms witness, was not error.
    4. Evidence c&wkey;l32 — Materiality—Similar Pacts.
    A prenatal congenital malformation of the skull of one person is not evidence that an abnormal condition somewhat similar in the skull of another is not due to postnatal injury.
    5. Appeal and Error <&wkey;970(2) — Review— Exclusion op Evidence — Discretion.
    The relevancy of testimony as to cranial depressions being the result of injury, ag determined by the trial judge, will be.disturbed only where it appears that complaining party was deprived of substantial benefit by exclusion of proper testimony.
    6. Master and Servant <&wkey;107(l) — Injuries to Servant — Defective Appliances.
    The selection by a railroad pumpman of a rope insufficient for hoisting timbers to repair a waterspout, which rope broke, causing injury to a fireman, was negligence of the company.
    7. Appeal and Error <&wkey;>1064(l) — Harmless Error — Instructions — Withdrawn Evidence.
    A charge on evidence of negligence of master’s other servants in handling timbers, resulting in plaintiff’s injury, followed by.statement that since writing the charge, plaintiff and defendant had agreed that plaintiff was not so injured, if error, was harmless.
    8. Damages <&wkey;132(3) — Excessive Verdict-Injury to Head and Paralysis op Foot.
    Whore a servant had his skull fractured, resulting in partial paralysis of one foot, a verdict for 812,000, while liberal, is not, as a matter of law, excessive.
    Appeal from District Court, Harrison County; H. T. Dyttleton, Judge.
    Suit by W. W. Williams against the Texas & Pacific Railway Company. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    P. H. Prendergast, of Marshall, for appellant. S. P. Jones, of Marshall, and T. P. Harte, of Douglas, Ariz., for appellee.
   HODGES, J.

This appeal is from a judgment in favor of the appellee for the sum of ?12,000 as damages for personal injuries. The facts show* that the appellant was operating a line of railroad running from a point in Louisiana into this state, and that the ap-pellee was employed as a fireman on one of its freight trains. He was injured under substantially the following conditions: On December 10, 1914, the train with which the appellee was connected arrived at a small station in Louisiana called New Roads. It was necessary for the engine to take water at that point, and an elevated tank had been placed there by the railroad company for the purpose of supplying its trains with water. On this occasion the spout, or the appliance by which water was conveyed from the tank into the tender of the engine, had been knocked down, and it was necessary to replace it before the tender could be filled. Upon the arrival of the train the appellee and the engineer found Higginbotham, the pumper, and three other men engaged in making the necessary repairs. They were endeavoring, by means of a rope and pulley, to elevate the waterspout into its place. According to the testimony of the appellee he was requested by Higginbotham, and also by the engineer of the locomotive, to assist in the operation; that while Higginbotham and his assistants were holding the waterspout in position by means of the rope the appellee endeavored, under Higginbotham’s directions, to push it in place. The timbers slipped off of the gooseneck on which they were resting; the rope with which they were suspended broke, causing the spout to fall and strike the ap-pellee on the back of the head, producing the injuries of which he complains in this suit. He claims that his skull was fractured, and that he ultimately suffered partial paralysis in one of his feet.

In determining the rights of the appellee the trial court applied the doctrine of comparative negligence as authorized by the federal Employers’ Liability Act, and gave a charge permitting a recovery by the appellee even if it were found that he was guilty of contributory negligence. That portion of the charge applying the federal statute forms the basis of a ground of assignments of error.

It is conceded that the train with which the appellee was connected was at the time of the injury engaged in interstate commerce; that it was hauling a train of cars from the state of Louisiana into the state of Texas. But it is contended that his employment was that of a fireman; that when he undertook to assist in repairing the water tank he abandoned Ms authorized employment and voluntarily entered upon another branch of service of the appellant which had no connection with interstate commerce and also was beyond the scope of his employment. Under the laws of Louisiana contributory negligence was a complete defense in suits of this character, and it is insisted that the rights of the plaintiff were governed by those laws. The important inquiry is, Was the appellee, when injured, performing duties within the scope of his employment? If he was, then it follows that he was still engaged in interstate commerce. It is true that under the evidence the appellee had been engaged by the appellant to perform only the duties of a fireman. But does it follow that under all circumstances a fireman is not expected to do something more than merely supply his engine with water and fuel? Emergencies might arise when as a member of a train crew he would be expected to perform a service not literally within the terms of a fireman’s contract. For instance, a crew whose duty it is to operate a train is not employed to remove obstructions from the track; but a group of trainmen, upon discovering a small obstruction easily removed, would be expected to perform that service as an incident to the continued operation of their train. On the other hand, should the track become obstructed by a considerable slide of earth from an adjacent embankment requiring days to remove, a train crew would not be expected to undertake that service. Between those extremes there must be found many varying conditions in which the question of duty should be determined as an issue of fact. In this instance the evidence shows that it was a part of the fireman’s duty to supply the engine with water, and that it was necessary to take water at that particular place in order that the train might proceed on its journey. Had the fireman, upon reaching the water tank, found some slight derangement about the waterspout which it was necessary to repair and which he could easily have adjusted, it would reasonably be regarded as his duty to make the required adjustments. The extent to which he would be expected to go in such instances must depend upon the facts of each particular case. At the time of the injury appellee was assisting in doing something necessary for the further operation of the train, and which required no extended delay. The jury had a right to conclude that he was performing a service incidental to his principal employment.

In the trial below the court required the jury to find, before returning a verdict for the appellee, that he was acting within the scope of his employment at the time he was injured. But even if this view of the situation be questionable, no harm resulted to the appellant from the giving of that portion of the charge complained of. The court, among other things, instructed the jury as to the form of its verdict should it find that the injury sustained was due solely to the negligence of the appellant, and also as to the form should it find that the injury was partly due to the contributory negligence of the appellee. The form adopted by the jury was that which it was directed to apply in the event it found that the injury was due solely to the negligence of the appellant. This, in effect, was an acquittal of the ap-pellee of any contributory negligence. Moreover, we are strongly of the opinion that the evidence was insufficient to show contributory negligence on the part of the appellee. He was, at the time injured, standing on his engine and endeavoring with an iron bar to push the waterspout into its proper place, and, according to his testimony, was acting under the direction of Higginbotham, whose duty it was to direct the work. There is nothing in the evidence to indicate that the position he assumed was unusually perilous or that prudence required him to occupy a different position.

On the trial below the appellee testified' that he received a severe blow on the back of his head which fractured his skull. His head was exhibited to the jury, showing a marked depression in the skull at the point where he located the injury. In connection with this he offered the testimony of experts, who stated that the skull had been fractured. To rebut that evidence the appellant produced testimony of an expert who had examined the appellee, and who stated that the skull was not fractured. This expert also testified that the depression upon the appellee’s skull was one sometimes found in the heads of normal people. As tending to corroborate that statement the appellant offered in evidence the X-ray pictures of two men whose heads showed similar depressions. It also offered to exhibit the heads of these two men to the jury. This proffered evidence was, on the objection of the appellee, excluded. The bill of exception reserved recites that Dr. Moore, the appellant’s expert, testified that he had taken some X-ray pictures of the heads of two persons in normal health living in Marshall who had received no injury to the head — one named S. Wainwright, and the other B. Wainwright— and that these X-ray pictures of the Wainwrights showed a depression on the back of the head of one of them as deep or deeper than the depression in Williams’ head, and that the other one showed a depression similar to the depression in Williams’ head. Counsel for the appellant explained that he offered the pictures as an X-ray of the head of the man who had no fracture of the skull, but which would show a depression similar to the depression in Williams’ head. The only effect this testimony could have would be to corroborate the statement of Dr. Moore, appellant’s expert, that the Wainwright brothers had the depressions described, and that was an immaterial issue. The appellant received the full benefit of the statement by Dr. Moore that such a depression could exist from other than traumatic causes, and the exhibitions tendered could not have strengthened the latter’s statement. The issue before the court was, not whether the Wainwrights had depressions in their skulls, but whether that in the appellee’s skull was due to a traumatic injury and indicated a fracture. It is not insisted that such cranial depressions are normal formations generally, but it is rather to be inferred that they are uncommon and exceptional. A congenital malformation in the skull of one person is no evidence that an abnormal condition somewhat similar in the skull of another is not due to some postnatal cause. The very fact that such a condition is unusual indicates that it is an abnormal one. The relevancy of such testimony must be determined by the trial judge, and his rulings will not be disturbed except where it is made to appear that the complaining party has been deprived of a substantial benefit in the exclusion of the proffered testimony. M. & E. T. Ry. Co. v. Killingsworth, 162 S. W. 1181; 11 Ency. of Evidence, pp. 770— 772. Whether or not the exhibits tendered were due to natural conditions depended upon the testimony of Dr. Moore, whose statements might have been disputed, thus introducing a collateral issue. If the appellant had been accorded' the right to offer in evidence the heads of the Wainwright brothers, the appellee could have claimed the right to offer in rebuttal other heads which had no such formations, and might even have offered testimony tending to show that the depressions found in the Wainwrights were not normal conditions, but the result of some violent injuries. This would have resulted in the introduction of a collateral issue calculated to prolong the trial and confuse the jury.

The negligence relied on in this instance as ground of recovery was the selection by Higginbotham of an insufficient rope for hoisting the timbers into place. The evidence shows that when Higginbotham arrived at the water tank for the purpose of making the needed repairs he secured the assistance of three Frenchmen at work near by, and from them procured the rope which they had been using in their work. The insufficiency of the rope was disclosed by the fact that it broke under a weight which Higgin-botham might have anticipated would be put upon it. There was also testimony by other witnesses that the rope was too weak to stand the strain to which it was subjected. The court submitted to the jury the question of negligence on the part of Higginbotham in the selection of the rope. He also directed the jury that, in the event they found that at the time he was injured the appellee was not acting within the scope of his employment, to find a verdict in favor of the appellant.

There was some testimony tending to show that the appellee was, prior to the injury, afflicted with another disease, and that this disease was responsible for a part of the injuries of which he complains. We have examined the charge of the court, and think the rights of appellant were properly safeguarded in the instructions given, that the objections to that portion of the main charge are untenable, and further that the special charges upon that issue were properly refused.

It appears from the testimony of the engineer, Deprato, that the appellee was injured, not by reason of the rope breaking, but while he was opening the water valve, and by conduct which might be construed as negligence, on the part of the other employfis in "handling the timbers they were endeavoring to put in place. This testimony was at variance with that of all .the other witnesses. Those facts were pleaded, however, and in a portion of the court’s charge that ground of negligence was submitted as a basis of recovery. Appellant complains that the evidence did not warrant the submission of that issue to the jury. The closing paragraph of the court’s general charge was given apparently for the purpose of withdrawing that issue from the consideration of the jury. The court used this language:

“Since writing the charge it has been agreed by plaintiff and defendant that the plaintiff was not injured while opening the water valve, as testified to by Engineer Deprato.”

In view of the record in this case, we think the error, if any, was harmless, because it is exceedingly improbable that the verdict of the jury was founded upon that issue.

Complaint is also made that the damages allowed were excessive. That objection we think is not supported by the evidence. While the allowance was.liberal, we cannot say, as a matter of law, that it was more than the appellee was, under the circumstances, entitled to recover.

The judgment of the district court will therefore be affirmed.
      @r=>For oilier oases see same topic'and KEY-NUMBER in all Key-Numbered Digests and Indexes

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


author: AVILLSON, C. J.

text:
    MISSOURI, K. & T. RY. CO. OF TEXAS v. HAVEN.
    (No. 1693.)
    (Court of Civil Appeals of Texas. Texarkana.
    March 13, 1917.
    On Motion for Rehearing, March 29, 1917.)
    1. Release <&wkey;57(2) — Representations oe Agent—Evidence.
    In action by plaintiff section foreman for injuries, evidence on issue of validity of release held to authorize finding that physicians, who treated plaintiff, were agents and employes of defendant raihoad, authorized to advise plaintiff as to the probability of his recovery from injuries.
    2. Release &wkey;>57(2)—Misrepresentations— Evidence.
    In action by plaintiff section foreman for injuries, evidence held to authorize finding that representations that plaintiff was well, made by defendant railroad’s physicians, were intended to influence plaintiff’s action in making-settlement with defendant’s claim agent and signing a release.
    3. Release <@=»17(2)—Setting Aside—Right.
    If the statements of defendant railroad’s physicians, who treated plaintiff, were false, and made to induce plaintiff to settle his claim, that the statements were innocently made would not deprive plaintiff of the right to have the release set aside.
    4. Release &wkey;>17(2)—Misrepresentation— “Statements oe Fact.”
    Statement of defendant railroad’s physicians, who treated plaintiff, that he “was all right and was well,” were “statements of fact,” upon which plaintiff foreman had the right to rely in settling his claim and signing a release.
    [Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Statement of Fact.].
    5. Release <&wkey;17(2)—Misrepresentations— Matters Known by Both Parties.
    The condition of plaintiff foreman’s leg was not a matter equally open to Mm and defendant railroad’s physicians, who had treated plaintiff for two months and made statements as to plaintiff’s condition, resulting in signing by plaintiff of release.
    6. Damages &wkey;132(9)—Personal Injuries— Excessive Damage.
    A judgment for $9,877.35, in addition to $110 previously paid, for injuries which will probably necessitate amputation of injured leg, will not be disturbed on the ground that it is excessive, where there is nothing to indicate that the jury was influenced by anything but the testimony.

      Appeal from District Court, Hopkins' County.
    Suit by J. M. Haven against the Missouri, Kansas & Texas Railway Company. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    January 27, 1914, appellee, one of appellant’s section foremen, under the supervision of its roadmaster, assisted other employes of appellant in unloading ties along its track from cars moving thereon. As a result of negligence on the part of certain of said other employes in throwing a tie from a car, the tie struck appellee’s right leg below the knee, bruising and injuring it. A few days thereafterwards appellee, at the instance of appellant’s local surgeon, who first treated appellee for the injury, went to a hospital in Dallas conducted by “the Missouri, Kansas & Texas Railway Company of Texas Employees’ Hospital Association,” a corporation under the laws of this state, where he remained and was treated by Drs. Webb and Lott, the surgeons in charge, until March 28, 1914. On that day, in consideration of $110 paid to him by appellant, appellee, by an instrument in writing executed by him, released appellant of all claim he had against it for damages on account of the injury so suffered by him. Notwithstanding, he thereafter-wards commenced and prosecuted this suit, by which he sought and recovered of appellant judgment for $9,877.85 as the damages, in addition to the $110 paid to him as stated, he was entitled to on account of said injury.
    The main controversy on the trial was as to whether the release executed by appellee was binding on him or not. He contended it was not, because, he asserted, he was induced to execute it by his reliance upon representations, which he alleged were false, made to him by Drs. Webb and Lott, who, he alleged, acted for appellant in making same, as to extent of the injury to his leg. Appellant, on the other hand, contended that the settlement made by it with appellee, evidenced by the release, was a fair one, freely made by him, with a knowledge of all the facts known to it; that the representations made to him by Drs. Webb and Lott were not false and fraudulent, but were true and honest expressions of .their opinions; and, further, that it was not bound by such representations, because said Drs. AVebb and Lott were not its agents, and in making the representations did not act for it.
    The representations in question were made to appellee after Drs. AVebb and Lott had treated him about two months, and just before he executed the release, and were that the injury to his leg was only temporary; that, while it was still slightly swollen, his leg “was all right and was well”; that appel-lee could safely go back to his work as a section foreman in a few days; and that the swelling in- his leg would disappear “as quick as he got out and went to work.” It appeared from the testimony that, instead of passing away, as the doctors said it would, the swelling in appellee’s leg increased; that his leg gradually grew worse, and at the time of the trial was in a condition which probably would necessitate its amputation to save his life.
    On the issue as to whether the release was binding on appellee or not, the court instructed the jury as follows:
    “If you believe from the evidence that Dr AVebb, or Dr. Lott, or both, were agents of defendant, and authorized to bind defendant in regard to representations as to the condition of plaintiff’s leg, and you believe that Dr. AVebb or Dr. Lott represented to plaintiff that his leg was all right and was well, and that as soon as he got out and went to work the swelling therein would leave it, and that all plaintiff needed was some exercise, and if you further believe that such statements, if any, were false, and made for the purpose of inducing plaintiff to make a settlement and to execute a release, and if you further believe that plaintiff believed such representations, if any, to be true, and relied on the same, and if you believe that as the result of such statements, if any, plaintiff was induced to settle said claim and execute a release, and if you further believe the sum paid plaintiff was less than reasonable eompensatiori for his injuries, if any, then such settlement andi release is not binding on the plaintiff.”
    Chas. C. Huff, of Dallas, and Dinsmore, McMahon & Dinsmore, of Greenville, for appellant. Evans & Shields, of Greenville, and 0. E. Sheppard, of Sulphur Springs, for ap-pellee.
   AVILLSON, C. J.

(after stating the facts as above). In support of its contention that the release executed by appellee was binding' on him, and that the court therefor should have instructed a verdict in its favor, appel lant refers (1) to undisputed testimony in thf record showing that the hospital association mentioned in the statement above was incor porated under the laws of this state as a benevolent or charitable society without capital stock, that the funds necessary to pay the expenses of the association were obtained by assessments against its members; and that Drs. AVebb and Lott were employes of the association, and (2) to testimony of witnesses to the effect that Drs. Webb and Lott had no interest in nor anything to do with the settlement made with appellee nor with any settlements made by appellant with its employes, that any statements made by them to appellee were nothing more than honest expressions of their opinions as to- appellee’s physical condition at the time they were made, and were not made to induce appellee to act as he did, and that appellant’s claim agent in making the settlement was not influenced by any statement made by said doctors as to appellee’s condition.

It might be conceded that if the testimony specified was all there was in the record appellant’s contention should be sustained. But there was other testimony before the court which, as we view it, authorized (1) a finding tliat Drs. Webb and Lott, at the time they made the statements to appellee, were, as the surgeons in charge of said hospital, appellant’s agents and employés, and in making the statements acted within the scope of their authority as such, and (2) a finding that the representations were intended to influence appellee’s action in the matter of making a settlement with appellant.

While the hospital association was a corporation as stated, it appeared from testimony that it was controlled by a board of trustees consisting of seven members, a majority of whom, by the laws of the association, consisted at all times of “the persons who, for the time being,” occupied toward appellant the relationship, respectively, of assistant to its president, its general manager, general attorney, and general superintendent. So it appeared that power to control the association was in appellant’s general officers as such, and hence in appellant, for it had power of control over its general officers.

It further appeared from testimony that appellant had issued to Drs. Webb and Lott, as such surgeons, and that they had accepted and used, passes entitling them to free transportation over appellant’s line of railway. As appellant, it seems, lawfully could not have issued such passes, and Drs. Webb and Lott lawfully could not have accepted and used same, unless as such surgeons they were employés of appellant (articles 1532, 1533, 1534, Vernon’s Penal Code), it would seem that the fact that as such surgeons they had and used such passes would have authorized a finding that the relationship of employer and employés existed between them and appellant.

And there was other testimony tending to show that such relationship existed. As a part of their duties as such surgeons, as they seem to have construed same, said doctors made reports to appellant’s claim agent for his use in making settlements with injured em-ployés, showing the condition of such em-ployés with reference to their injuries. And on the occasion when appellee executed the release in question it appeared that Dr. Lott accompanied him to the office of appellant’s claim agent, to whom he introduced appellee, and to whom he made statement as to appel-lee’s then condition. It further appeared that it was in compliance with 'Dr. Lott’s direction to one of appellant’s employés in its general offices at Dallas that said employé issued to appellee a pass entitling him to free transportation from Dallas to his home in Hopkins county.

The testimony so far referred to, we think, was amply sufficient to authorize a finding that Drs. Webb and Lott, as chief and assistant surgeon, respectively, in charge of said hospital, were agents and' employés of appellant. If they were, then it was within the scope of their employment as such surgeons, not only to treat but to advise appellee concerning the nature and duration of his injuries and the probability of his recovery therefrom. Railway Co. v. Huyett, 99 Tex. 630, 92 S. W. 454, 5 L. R. A. (N. S.) 669.

The testimony tending to show that the representations made to appellee were intended to influence his action in the matter of the settlement he made with appellant’s claim agent, was, we think, as has been before stated, sufficient to support a finding that they were so intended. We do not mean by that to say that the testimony was sufficient to show that the surgeons at the time they made the statements knew same to be untrue, but that same were made with knowledge on their part at the time that appellee contemplated leaving the hospital, and, before leaving, taking up with appellant’s claim agent the matter of a settlement of his claim against appellant for damages on account of the injury he had suffered, and that saiii surgeons expected appellee would be influenced by what they said as to his condition in making the settlement. If there is any testimony at all in the record indicating that the surgeons may not, in making the statement they did to appellee that he “was all right and was well,” and that the swelling in his leg would disappear when he got out and took up his work as section foreman, have dealt fairly with him, it consists of the testimony of Dr. Lott indicating that he knew, at the time he made the statement to appellee, that he was suffering from varicose veins (which, appellee testified, was due to the injury), and that it would be “bad treatment” for a person suffering such veins to stay on his feet and do the work of a section foreman. With reference to this testimony of Dr. Lott, it is fair to say, however, that he further testified that while appellee was in the hospital, he told him (appellee denying it) that he had suffered a long time from such veins. But the rule seems to be that if the statement were false, and were made to appellee to induce him to settle his claim, the fact that they were innocently made by the surgeons would not deprive appellee of a right to have the release set aside. Railway Co. v. Neill, 159 S. W. 1180; Railway Co. v. Reno, 146 S. W. 207; Railway Co. v. Maples, 162 S. W. 426. In the Reno Case the court said:

“Notwithstanding appellant’s agent may have believed the representations t.o be true which he made to plaintiff to induce him to execute the release, yet, if the same were false, plaintiff was entitled to relief against them, notwithstanding the fact that defendant’s agent may have innocently made the statements. It is immaterial that the agent may have made the statements under the honest belief that they were true, whereas, in fact, they were not.”-

It appeared from the testimony of appellee as a witness in his own behalf that, immediately after Drs. Webb and Lott advised him that his leg was “all right and was well,” he told Dr. Lott he was going to leave the hospital and go home; that Dr. Lott then asked him if he was acquainted with the claim agent, and, when he replied in the negative, asked him if he “wanted to settle,’’ and on his reply, “Yes, we have that to do before we go to work, and I had just as well settle with him here as after I get home,” said, “I will go up there with you and introduce you to the claim agent.” Appellee testified that he and the doctor then—

“got on the elevator and went to the claim agent’s rooms, and he introduced me to the claim agent, and he told him about my leg, the condition it had been in, and how long I had been in the hospital, and he went on down. Dr. Lott told the claim agent there that my leg was well and that I was ready to settle and go to work. He turned and walked out after he told the claim agent my leg was well and that I had come up to settle and was ready to go to work.”

It is insisted, however, that the statements attributed to Drs. Webb and Lott were merely expressions of their opinions as medical men, and not statements of fact which appellee had a right to rely upon. We think the statement that appellee’s leg “was all right and was well” ought not to be construed as the opinion merely of the surgeons. The test by which to determine whether a representation is a mere expression of an opinion or a substantive fact is stated by Mr. Black (1 Rescission and Cancellation, § 77), quoting from Addison on Torts, to be:

“If the representation is as to a matter not equally open to both parties, it may be said to be a statement of a fact as such; but if it is as to a matter that rests merely in the judgment of the person making it, and the means of deriving information upon which a fair judgment can be predicated are equally open to both parties, and there is no artifice or fraud used to prevent the person to be affected thereby from making an examination and forming a judgment in reference to the matter for himself, the representation is a mere expression of an opinion.”

It seems to us it cannot fairly be said that the real condition of appellee’s leg was a matter equally open to him and the trained experts who had treated it for two months, nor that “the means of deriving information upon which a fair judgment” as to its condition could be predicated were equally open to him and them.

We do not think the conclusion reached is opposed by rulings made in Railway Co. v. McCarty, 94 Tex. 29S, 60 S. W. 429, 53 L. R. A. 507, 86 Am. St. Rep. 854, Quebe v. Railway Co., 98 Tex. 6, 81 S. W. 20, 66 L. R. A. 734, 4 Ann. Cas. 545, Railway Co. v. Huyett, 99 Tex. 630, 92 S. W. 454, 5 L. R. A. (N. S.) 669, Railway Co. v. Kramer, 141 S. W. 122, Railway Co. v. Polka, 57 Tex. Civ. App. 626, 124 S. W. 226, and Railway Co. v. Williams, 44 Tex. Civ. App. 168, 99 S. W. 141, cited by appellant, when the nature and the facts of those cases are kept in mind.

The question in the McCarty Case was as to whether the plaintiff was entitled to have the release he had executed set aside on the ground alone that it was executed as the result of a mutual mistake on his part and on the part of the railway company. Such a question is not presented by the record before us.

In the Polka Case it appeared that the physician who made the representation to the plaintiff was not an employé of the railway company, and that the rights of the parties, as in the McCarty Case, turned upon a question as to whether the plaintiff could avoid the release on the ground of mutual mistake as to the extent of his injury.

In the Williams Case the plaintiff sought to avoid the release he had executed on the ground that he was misled as to the nature and legal effect of the instrument by representations made to him by the agent of the railway company. The plaintiff in that case did not contend that he was entitled to have the release he had executed set aside, if it evidenced the real agreement between him and said agent.

In the Quebe Case the plaintiff, when struck on his breast and throat by a piece of timber, fell; his head striking the ground with force. Believing that the only injury he thereby suffered was that to his breast and throat, and that that, as the railway company’s surgeon advised him, was trifling, he reported to. the company for re-employment and executed the release in question. Neither the plaintiff nor the railway company’s agents, at the time the release was executed, suspected that the plaintiff had suffered or might suffer any injury, except such as the blow on his breast and throat had produced. Afterwards he became blind as the result, he alleged, of injury to his head, caused by its striking the ground when he fell. The only question in the appeal was whether the release, as executed, should have been construed as covering the injury to the plaintiff’s head, which caused the blindness. The court held that the answer to the question depended upon the intention of the parties, and that the recitals in the release showed conclusively that it was their intention that it should apply to that injury, as well as to the injury to the plaintiff’s breast and throat. In the course of the opinion the court remarked that:

“Upon the subject of fraud there was nothing to submit, had there been a request for a submission of that question. The statement made by the surgeon as to the character of plaintiff’s injuries was only his medical opinion, which accorded with all that was known or believed, and was made with no purpose, so far as appears, to procure a release or other advantage.”

The applicability of the case as authority in the one before us lies entirely in the statement in the opinion that the representation by the surgeon to Quebe that the injury to his breast and throat were trifling was only the surgeon’s medical opinion. We do not concede that a statement by a surgeon, to a person he has treated for an injury to his leg, that his leg “was all right and was well,” was as much the expression of an opinion as the statement by a surgeon that an injury suffered by a person to bis breast and throat was “trifling”; -but, if we did, to our minds there would still be an important distinction between the statement made by Dr. Lott to appellee and the statement made to Quebe by the railway company’s surgeon, in this: That the statement made to appellee, however innocently it may have been made, was untrue in fact as a statement of the condition of his leg, to which it applied, while the statement by the surgeon to Quebe was true in fact as a statement of the condition of his breast and throat, to which it applied.

In the Huyett Case the plaintiff’s leg was broken and his wrist dislocated as the result of his having been knocked off a bridge. On the next day after he had offered to accept, and the railway company's agent had refused to give him ¡£2,000 in satisfaction of his claim for damages, Dr. Scott, the company’s surgeon, said to him:

“Iluyett, you are not damaged; you will soon be as good a man as ever; you will soon be able to go to work.”

Relying on the statement, the plaintiff aft-erwards executed a release to the company in consideration of $250 it paid to him. The statement of Dr. Scott to the plaintiff was made at a different time and on a different occasion from the time and occasion when the plaintiff executed the release, and there was no evidence showing that Dr. Scbtt knew the plaintiff had discussed the matter of a settlement with the claim agent, or that the latter knew that Dr. Scott had made the statement in question to the plaintiff, or that they in any way acted together or for the purpose of procuring a release from the plaintiff. The Supreme'Court reversed the judgment of the Court of Civil Apireáis, affirming a judgment of the trial court in the plaintiff’s favor, on the ground alone that it did not appear that the representation relied on to avoid the release was “made in the transaction in which the contract of settlement was made, nor by the agent authorized to represent the defendant therein, but, so far as the evidence indicates, it was disconnected from that contract, and made by one [the surgeon] whose duties, as agent, had no relation to such matters,” citing Story on Agency, § 135, and other authorities. If the conclusion reached by us that the testimony in this case was sufficient to support a finding that Drs. Webb and Lott, in their capacities as surgeoiis, were agents and employes of appellant, is correct, then it must he apparent that the ruling by the Supreme Court in the Huyett Case, just referred to, has no application here.

In the Kramer Case the plaintiff, it seems, had suffered an injury to his pelvis, and surgeons employed hy the railway company had represented to him that he was not permanently injured and would be able to return to his work within a month or six weeks. The plaintiff afterwards suffered from epilepsy, due, it was determined, to the injury he received. The following excerpt from their opinion shows the grounds upon which the Court of Civil Appeals acted in reversing a judgment in favor of the plaintiff and rendering judgment in favor of the railway company:

“In view of the fact that there is no testimony in this ease indicating that the physicians or the claim agent knew or had reason to know that in truth Kramer was not as well a man as they represented him to be, and especially in view of the fact that he had no symptoms at that time indicating epilepsy, and that he made no contention below, and apparently makes none here, that the representations of the physicians and the action of the claim agent thereon were not all in good faith, and especially in view of the fact that the physicians testified that their representations were their honest medical opinions, we are of opinion that the court below erred in submitting the issue of the validity of the release to the jury. If there had been any evidence of fraud, bad faith, or known concealment on the part of the claim agent or the physicians, it may be that the issue would properly liavo been submitted, by the mere fact that the physicians, with the light which they had, expressed their medical opinions to plaintiff that he was practically well, with no showing that they knew these statements to be false, without any testimony indicating that they made them for the purpose of bringing about the release, would not, we believe, suffice to avoid a voluntary settlement entered into by the plaintiff at a time when his knowledge of his symptoms was greater than any one else’s — when he might, if he had seen fit, have taken the opinions of other physicians.”

Tlie difference between the facts of that case as found by the Court of Civil Appeals, and the facts of this one as found by us, is that in this one the statement of the physicians was more than the mere expression of their opinions, and, moreover, was made, as the jury might have found, to induce appellee to execute the release he sought to avoid.

It is insisted that the judgment is for an amount in excess of the sum appellee was entitled to recover. When testimony as to the known consequences and as to the probable consequences to him of the injury is considered, we do not think we should disturb the judgment on that ground. There is nothing in the record indicating that the jury was influenced in determining the amount they should award appellee by anything except the testimony. “The law,” said the court in Railway Co. v. Gibson, 38 S. W. 480, “commits the extent and probable duration of an injury, in cases where those matters cannot be arrived at with some degree of precision, to the sound judgment of the jury. The power of revision in reference to the amount of the verdict is exercised only where a manifest wrong has been done.”

The assignments not disposed of in effect by what has been said also do notj we think, present a reason why the judgment should be reversed. Therefore it is affirmed.

On Motion for Rehearing.

It is insisted that the statement in the opinion that it appeared from the testimony that appellant had issued to both Dr. Webb and Dr. Lott, as surgeons in charge of thO' hospital where appellee was treated for the injury he sustained, and that they had accepted and used, passes entitling them to free transportation over appellant’s line of railway, is erroneous. It is, so far as it applies to Dr. Webb. On a re:examination of the i-ecord we fail to find testimony showing he had accepted and used such a pass. That the statement is erroneous as to Dr. Webb is immaterial, however, from a legal standpoint, in view of the fact that the representations made by him to appellee were also made by Dr. Lott, who had accepted and used such a pass. The motion does not, we think, present a reason why the judgment rendered by this court should be set aside. Therefore the motion is overruled.
      <g^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes