author: KEY, C. J.

text:
    WESTCHESTER FIRE INS. CO. et al. v. GOODMAN.
    (No. 5839.)
    (Court of Civil Appeals of Texas. Austin.
    April 10, 1918.)
    1. Tbial <&wkey;253(5) — Matters in Issue — Instruction.
    In action on fire policies, where pleadings and evidence raised issues whether adjuster’s agreement covered only property inventoried or all property insured, court properly refused insurer’s charge that, if jury found for plaintiff, they should fix amount of his recovery in accordance with adjuster’s agreement.
    2. Appeal and Error <&wkey;931(4) — PResumptions Favoring Trial Court — Finding — Statute.
    Where no charges were requested by defendants as to either of issues referred to in counter propositions submitted by plaintiff in reply to assignment of error, if finding for plaintiff on either or all of such issues was necessary to sustain judgment, under Vernon’s Say les’ Ann. Civ. St. 1914, art. 1985, it will be presumed trial court made such finding.
    Error from District Court, McLennan County; Tom L. McCullough, Judge.
    Suits by Max Goodman against the West-chester Fire Insurance Company and the Western Assurance Company, consolidated for trial. To review judgment for plaintiff, defendants bring error.
    Affirmed.
    Thompson, Knight, Baker & Harris and Will C. Thompson, all of Dallas, for plaintiffs in error. E. B. Baker and W. L. Eason, both of Waco, for defendant in error.
   KEY, C. J.

The following statement of the nature and result of this suit is copied from the brief of plaintiffs in error:

“These suits were begun in McLennan county, Tex., and, under an agreement to consolidate, the suits against the Westchester Fire Insurance Company and the Western Assurance Company were consolidated for the purpose of trial and appeal. And the other suits brought by Max Goodman by agreement are to abide the result of the consolidated case under the terms of such agreement.
“By his amended petition, the plaintiff, Max Goodman, alleged the same facts against the Westchester Fire Insurance Company and against the Western Assurance Company; and for the purpose of this statement only one of such petitions will be placed in the record.
“Plaintiff alleged: That on February 2, 1915, he was the owner of certain personal property-in McLennan county, Tex., situated in Waco, at No. 215 on the south side of the square, which building was described in the policy sued on, the personal property being described as a stock of wines, liquors, 'beer, mineral waters, bottles, cartons, labels, wrappers, caps, material for manufacturing cartons, cigars, tobacco, and other merchandise not more hazardous usual to saloons. That on such case the defendant issued its policy of insurance in consideration of a premium, it insured the plaintiff in the Western suit in the sum of $1,000 and in the West-chester suit in the sum of $2,000 upon the personal property therein described from February 2, 1915, to February 2, 1916. That on May 18, 1915, while the policy was in force, a fire occurred, and the fire department of Waco attempted to extinguish it by the means of water, and as a result a part of the personal, property was totally destroyed by fire and water, and the remainder was damaged by fire and water, and the plaintiff’s loss was the direct and proximate result of the fire. That the actual cash value of all of the insured property immediately preceding the fire was $10,422.55, and the actual cash value of the insured property immediately after the fire was $2,334.12; so that plaintiff sustained an actual loss of $8,108.53. That the actual cash value of that part of the insured property totally destroyed beyond identification was $3,822.97. That the total amount of damage and loss on that part of the personal property damaged but not actually destroyed beyond identification was $4,285.56. That actual loss sustained by the plaintiff is $8,108.53.
“At the time of thé issuance of the policy and at the time of the fire, the personal property was the property of the plaintiff. That they duly performed all the conditions of the policy and made proof of loss on July 2, 1915, more than 60 days before the suit, and gave notice and proof of the fire to the defendant in compliance with the terms of the policy and demanded the amount due.
“On September 1, 1915, defendant denied liability. That by reason of the premises the defendant is justly indebted and bound and obligated to the plaintiff in the sum of the policy •with interest from September 1, 1915, at the rate of 6 per cent, per annum. That the defendant has wholly failed and refused to pay, whereupon plaintiff prays for a judgment.
“Each company filed an identical answer in response to the petition filed against it, such answer being substantially as follows: After a general demurrer and some special exceptions and a general denial, the defendant alleged that, if the defendant held its policy, it provided, in substance, that the company should not be liable beyond the actual cash value of the property at the time of loss or damage less the proper deductions for depreciations however caused, and in no event to exceed what it would then cost the insured to repair or replace the property with material of the like kind and quality. That, subsequent to the fire, an adjuster acting for it and the plaintiff in the suit made an ascertainment and estimate of the property lost and damaged and destroyed by fire and reduced the agreement to writing as follows:
“ ‘Adjuster’s Agreement.
“ ‘It is hereby mutually agreed between the insurance companies whose names are signed to this agreement by W. C. Miller, adjuster, and the Max Goodman Liquor Company of Waco, Tex., that on and immediately preceding the fire which occurred on the ISth day of May, 1915, by which the property described in the policies as follows: No. 106478, issued by the Commercial Union Assurance Company: No. 8910878, by the Royal Exchange Assurance Company; No. 108111, 'by the Western Assurance Company ; policy No. 152857_, by the Westchester Eire Insurance Company issued at their Waco, Tex., agency to the Max Goodman Liquor Company, Waco, Tex. — is alleged to have been destroyed and damaged.
“ ‘The sound value of the property at the time mentioned was $6,977.74. The total amount of such damage to said property above set out is, after a full examination, agreed upon and determined by compromise at the sum of $2,791.09, and said sum as agreed is binding and conclusive upon said parties as the value of the property and the amount of loss and damage, but shall not be construed as an admission of liability on the part of said insurance companies, and does not in any respect waive proof of loss or any other condition of said policies. The fire insurance on said property is $8,000 as per schedule below.
“ ‘In testimony whereof the parties have hereunto set their hands this the 3d day of June, 1915. This agreement executed in triplicate. W. C. Miller, Adjuster for Commercial Union Assurance Co. of England, Royal Exchange Ins. Co. of England, Western Assurance Co. of Canada, and Westchester Eire Insurance Co. of New1 York. Max Goodman Liquor Co., by Max Goodman, Sole Owner.’
“Schedule of Insurance.
Policy No. 106478, Commercial
Union . $2,500 00
Policy No. 3910878, Royal Exchange . 2,500 00
Policy No. 108111, Western Assurance . 1,000 00
Policy No. 152967, Westchester.. 2,000 00
Total ....$8,000 00
“That the policy also provided that the company should not be liable for a greater sum than the proportion that the amount named in said policy should bear to the total insurance; and defendant alleged that there was outstanding at the time of the fire a total insurance of $8,000, as set out in the agreement just above, and the amount named in this policy is as set out in such agreement. By virtue of the facts set out and the provision of the policy quoted, that in the ev.ent it has any liability the same shall be no more than that proportion of $2,-791.09 that the amount of its policy bears to the amount of $8,000 total insurance.
“It says further on or about June 3, 1915, the plaintiff agreed in writing with it that the total amount of his damage in the fire complained of was and is the sum of $2,791.09, and that such agreement is 'binding and conclusive on the plaintiff, as to the value; and that, under the terms of the policy sued on, defendant, if it has any liability, can have no greater liability than that proportion of said sum that the amount of its policy bears to the $8,000 total insurance described in the policy sued on. And defendant •prays that, if any liability be found against it, said liability be restricted to such sum.
“Plaintiff filed an identical supplemental petition in each suit, which said supplemental petition provided in substance as follows:
“After a general demurrer and special exceptions, he says that the adjuster’s agreement was made under the following circumstances: That an adjuster visited the premises after the fire and made an investigation of the loss, and made an inventory of the damaged property that could be identified, but did not cover the property totally destroyed, and showing the value of the damaged property before the fire to be $6,-977.74, which figures were submitted to the plaintiff. The plaintiff demanded that he receive a settlement for the property totally destroyed as well as for that partially destroyed, but the adjuster denied liability for any claim made by the plaintiff for merchandise totally destroyed and refused a settlement therefor, but offered to make a compromise with the plaintiff for merchandise that was capable of being inventoried and which had been inventoried, and plaintiff and adjuster orally agreed to a settlement relative to the amount due on merchandise capable of being inventoried and which had been inventoried, and it was left an open question as to the amount of personal property totally destroyed.
“The adjuster stated to the plaintiff that he could sue for the amount of property totally destroyed.
“Therefore the plaintiff and the adjuster agreed that the sound value of the property capable of being inventoried immediately preceding the fire was $6,977.74, and also agreed that the damage to such property capable of identification was $2,791.09. That the adjuster, representing all of the companies, which included the defendant, agreed to pay the plaintiff such sum immediately for the damage to the property capable of being identified and inventoried, and the plaintiff agreed to accept such sum in full settlement of this item; but no agreement was made as to the property totally destroyed and this was left an open question for litigation.
“After the oral agreement as aforesaid was made, the adjuster suggested that he desired a memorandum signed by the plaintiff showing the figures agreed upon, which memorandum the plaintiff was willing to sign. The adjuster wrote up the adjuster’s agreement set up in the plaintiff’s answer, intending to cover the oral agreement as made, and representing that the written instrument did cover the agreement as made, and plaintiff so understood it. That if the adjuster’s agreement does not carry with it the true understanding of the parties, as above set out, the plaintiff says that the parties made a mutual mistake in using the language contained in the agreement, that they both intended that it should express the oral agreement as above set out, and therefore the mutual mistake should be corrected and the instrument reformed to meet the agreement of the parties.
“That in the agreement it is provided that the sound value of the property at the time mentioned was $6,977.74. That the expression ‘the property,’ as used, was intended to mean, and did mean, the property which could be inventoried and was inventoried and capable of identification. It does not mean the entire property covered by the policy. If the technical expression included all the property, then the plaintiff says that the parties made a mutual mistake in using the language used and in failing to use language ■ embodying the true agreement, and that the mutual mistake should be corrected in the instrument.
“If such clause does not carry the meaning expressed in the oral agreement, the instrument is ambiguous, because the expression ‘the property’ could mean the property inventoried or could mean the property insured; and therefore the same is subject to parol explanation. That the clause was intended to carry the meaning expressed in the oral agreement, and the parties intended that it should cover the oral agreement and so understood it, and understood that the expression ‘the property’ had reference only to’property inventoried and was capable of identification.
“If the adjuster for the insurance company did not make a mistake, then he was guilty of fraud, in undertaking to make the written instrument differ from the oral agreement. That he intentionally and with intention to deceive plaintiff wrote the instrument aforesaid, which would not have been executed by the plaintiff had he not understood that the same was a true representation of the oral agreement. The adjuster represented that the instrument as written covered the oral agreement, and therefore plaintiff was induced to sign by the fraud of the defendant, and so the agreement is of no force.
“Plaintiff alleged that the same was void, -because at the time it was made, and immediately prior to it, the adjuster informed the plaintiff that, unless he signed the same, he would be charged with arson and burning the uroperty; but that, if he would make the agreement, the adjuster agreed and obligated himself and the defendant not to make a complaint of arson against the defendant and not to prosecute him, and that he informed the plaintiff that unless he did agree that he would have the plaintiff locked in jail, would close plaintiff’s place of business, and leave town and remain away six months, during which time he would have plaintiff’s business closed up; but, if the plaintiff would make the agreement, he would not have the •plaintiff put in jail and would not close the plaintiff’s business; and the plaintiff did then and there'sign the agreement with the defendant for the consideration aforesaid, which was illegal, and the agreement was contrary to public policy and is unenforceable and null and void.
“The agreement is not binding upon the plaintiff, because the adjuster agreed with the plaintiff that, if he would execute the agreement, the adjuster would immediately return to Dallas and would send to the plaintiff draft in payment of the amount specified in the agreement that one of the inducing considerations which caused the plaintiff to execute the agreement was that he should receive the draft, equivalent to cash, immediately after executing it. That the adjuster and the defendant wholly failed and refused to carry out this agreement and did not send such draft to the plaintiff, and has not sent su„ch draft to the plaintiff, and that draft has never been issued or delivered to the plaintiff; so that the defendant breached and failed to carry out its agreement with the plaintiff, and the agreement is not binding.
“Plaintiff further alleged that the agreement is without further consideration, in that, no benefit accrued to the plaintiff and no injury or detriment was suffered by the defendant. Same was nothing more than an admission by the parties of the amount of plaintiff’s loss. The defendant did not agree to pay plaintiff any sum, and did not agree to waive! proof of loss or any condition of the policy, and did not even bind itself to recognize the validity of the policy, but retained the right under the agreement to contest the validity of the policy and to refuse to pay plaintiff anything; so that the agreement is wholly without consideration.
“There is no mutuality in the agreement. Defendant did not bind itself to do anything, and merely attempted to bind the plaintiff to accept a sum of money therein specified, and did not obligate itself to pay any sum. Therefore the agreement is without mutuality and cannot be enforced.
“The agreement is not a contract and does not possess the essential elements of a contract, because it does not obligate the defendant to do or refrain from doing_ anything, and wholly fails to create any obligation whatever on the part of either plaintiff or the defendant; and therefore the same is not a contract and not binding, and is but an admission of the parties to the contract as to the amount of plaintiff’s loss, and cannot be enforced as an agreement-or contract.
“That if the adjuster’s agreement is construed to mean that the total loss of plaintiff by fire was $2,791.09, that the consideration for the agreement is lacking, in that, the plaintiff’s loss, as shown by the petition, was $8,108.53, and the figures first mentioned would be wholly ■insufficient to compensate him for his loss. That, if the instrument be construed as aforesaid, the parties made a mutual mistake with reference to the figures, and did not have all the data before them and were not acquainted with all the facts. Had they been acquainted with all the facts, the agreement would not have been made. If the above parties were laboring under misapprehension, the instrument is of no force, because it was induced by mutual mistake. That, if the allegations made are not true, then the plaintiff saysl in the alternative that the adjuster understood that the adjustment agreement referred to the entire insured property and the plaintiff understood that the agreement referred to property caused to be inventoried by the adjuster, so that the minds of the parties' did not met, and there is no contract.
“That the adjuster’s agreement is not binding on the plaintiff because it has been breached and repudiated by the defendant shown- by its pleading on file which is now; denying liability and repudiating it.
“Each insurance company filed a supplemental answer identical in substance, providing as follows:
“After a general demurrer and general denial, defendant alleged that the plaintiff is estopped, to claim or assert the adjuster’s agreement because it is not binding; that he is estopped to make such pleading because, among other reasons, the policy provides the assured should give notice of loss and, after a loss, should forthwith separate the damaged and undamaged personal property, make an inventory of it and furnish proof of loss.
“That, in the event of a disagreement as to the amount of loss, the same should be fixed by appraisers, the assured and the company each selecting one and the two so chosen selecting an umpire, and the award of any two to be binding, the finding to be made by them of the sound loss and damage.
“Defendants said that the rights reserved, under the policy are each and all valuable rights. That after the fire plaintiff by his conduct and statement led the defendant .to. believe, and it did believe, that there was an agreement between them as to the sound value of the property described in the policy, and as to the loss and damage occasioned by the fire. That any reasonable person would have so believed from the acts, conduct, and statements of the plaintiff. That acting thereon the defendant permitted the plaintiff to carry out and dispose of the property damaged in the fire, and did not insist that the plaintiff separate same and put it in the best possible order and inventory' it, either for future reference or to be appraised. It did not demand of the plaintiff an appraisal of such loss, for the reason that it believed the agreement solved the question of value involved, whereas, if it had been advised by the plaintiff of any such claim as he now makes, it would have insisted upon an appraisal. It would have disagreed with plaintiff as to the matter of his loss as the sum of $2,791.0© represents' all the loss and damage sustained by the plaintiff, and would have demanded an appraisal and would have insisted the property be kept together that an appraisal might be had. It would have had the amount of loss and damage fixed under the alternative provision of the policy sued on different from that actually employed, by appraisal.
“But the plaintiff prevented the defendant from doing this and is now estopped to escape the binding force and effect of the adjuster’s agreement already pleaded.
“The defendant says further that the agreement was signed by the plaintiff after conferring with his counsel, and that the language therein set out is plain and unambiguous. That the defendant then knew, and now knows, that the agreement contained and covered all of the property whether destroyed or damaged and is estopped by the effect thereof.
“The court submitted to the jury one issue as to whether or not the plaintiff caused or procured the fire, to which the jury answered, ‘No.’
“The other issue submitted by the court to the jury was as to what amount of loss and damage the plaintiff sustained to the policy sued upon for tho fire of May 18, 1915. To this issue the jury answered, ‘$6,427.50.’
“The court rendered judgment in favor of the plaintiff and against the defendant Western Assurance Company in the sum of $853.23, with interest from September 14, 1916, and in favor of the plaintiff and against the defendant West-chester Eire Insurance Company in the sum of $1,706.46, with interest at 6 per cent, from September 14, 1916.
“The defendants each in due time made a motion for a new trial, which motion for new trial was by the court overruled, and the defendants excepted and gave notice of appeal, and was allowed 60 days within which to prepare and file its bills of exception and statements of fact.
“Plaintiff also filed a motion for new trial which was overruled, and the plaintiff excepted. Thirty days’ additional time was granted within which to prepare and file statements of fact and bills of exception.
“Max Goodman waived the filing of briefs in the trial court and agreed that they might be filed in the Court of Civil Appeals on or before February 1, 1917.
“The Westchester Eire Insurance Company duly made its application for writ of error, as did the Western Assurance Company. The Westchester Company duly filed its bond, as did the Western Assurance Company.
“Max Goodman in each of the causes and in the consolidated cause waived the issuance of citation in error and entered his appearance in the Court of Civil Appeals for the Third Supreme Judicial District of Texas at Austin.
“The plaintiffs in error come to this court complaining of the errors committed in the trial court- as evidenced by the following assignments of error.”

Opinion.

The first, assignment of error complains of the action of the trial court in refusing a requested charge by which the jury would have been instructed that, if they found for the plaintiff, to fix the amount of his recovery against the Westchester Insurance Company at $697.78, and against the Western Assurance Company at $348.89. The contention is that, inasmuch as appellee signed the written instrument wherein it was agreed that the sound value of the property immediately before the fire was $6,977.74, and the loss and damage by the fire thereto was $2,791.09, and that the total insurance was $8,000, and as each policy provided that the company should be liable for only its proportion of the loss, the trial court should have given the instruction referred to.

Counsel for Max Goodman have submitted 15 counter propositions, in each of which it is asserted that the requested charge was properly refused for reasons stated in such counter proposition. Asi to some of these counter propositions, we are unable to concur with counsel who assert them. But, with the modification hereafter stated, we do concur as to others, which are expressed as follows in the brief filed for the defendant in error:

“Eighth Counter Proposition.
“(1) Abstract Proposition. — When one contract is agreed upon by parol and a different contract is expressed in writing, the latter is not binding as a matter of law because of mutual mistake.
“(2) AppUed Proposition. — The first assignment should be overruled, because plaintiff’s pleadings and evidence show that the parties to the adjuster’s agreement made an oral agreement to the effect that a compromise settlement would be made on all property which was inventoried, or capable of identification after the fire, and'that no settlement would be made on the property which was totally destroyed, and the latter would be left an open question for future litigation; and after entering into that oral agreement, the adjuster attempted to reduce same to writing, and the adjuster’s agreement was the1 result. The adjuster’s agreement does not purport to be a compromise settlement, but is merely a mutual declaration as to the amount of loss and damage, and -it does not limit the amount of loss and damage to the property which was inventoried, or capable of identification after the fire. Hence, if the loss and damage, as expressed in the adjuster’s agreement, covers all of the insured property, both that which was inventoried or capable of identification after the fire, and that which was totally destroyed, or if the adjuster’s agreement is not a contract of settlement, then, in either event, the same does not express the oral contract, as shown by plaintiff’s pleadings and evidence, and the trial court correctly refused' the special charge because the issue of mutual mistake was an issue of fact for the jury.
“Ninth Counter Proposition.
“The first assignment should be overruled because plaintiff’s pleadings and evidence show that the adjuster’s agreement is ambiguous, because the expression, ‘the property,’ could mean the property which was ‘inventoried,’ or it could mean the property which was- ‘insured,’ and therefore the same was subject to parol explanation. Hence, the meaning of the adjuster’s agreement was a question of fact for the jury and not a question of law for the court.
“Tenth Counter Proposition.
“The first assignment should be overruled because plaintiff’s pleadings and evidence show that the adjuster’s agreement was entered into by reason of plaintiff’s mistake, and the adjuster’s fraud,' in that, the plaintiff believed that the parol agreement was covered truthfully by the adjuster’s agreement, and the adjuster knew that such was not the case and intentionally deceived plaintiff. Hence, the validity of the adjuster’s agreement was a question of fact for the jury and not a question of law for the court.
“Eleventh Counter Proposition.
“The first assignment should be overruled, because plaintiff’s pleadings and evidence show that the adjuster’s agreement is not a binding obligation 'because the minds of the parties did not meet, in that, the plaintiff understood that he was making a settlement and that the settlement related only to the inventoried property, and the adjuster understood that it was not a settlement and that the instrument related to the entire insured property.
“Twelfth Counter Proposition.
“The first assignment should be overruled, because plaintiff’s pleadings and evidence show that the adjuster’s agreement is illegal and contrary to public policy, because the adjuster agreed with plaintiff that, if he would execute the adjuster’s agreement, the adjuster and the insurance companies would not prosecute him for arson, and, if he failed to execute it, he would be prosecuted for arson, and the same was so executed.”

Our modified approval of the foregoing propositions may be stated thus: The pleadings and evidence raised all of the issues referred to in the foregoing counter propositions, and for that reason it would have been error for the trial court to have given the requested instruction. No charges were requested as to either of the issues referred to in these counter propositions; and therefore, if a finding in favor of Goodman upon either or all of them was necessary to sustain the judgment, it will be presumed that the trial court made such finding. Article 1085, Vernon’s Sayles’ 'Statutes.

'Some other questions are presented in the brief of the plaintiffs in error which, after due consideration, are decided against them.

No reversible error has been pointed out, and the judgment is affirmed.

Affirmed.
      @m>For other eases see sanie topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: LANE, J.

license: Public Domain

text:
    AMERICAN LOAN & MORTGAGE CO. et al. v. AMERICAN NAT. BANK OF HOUSTON.
    (No. 7274.)
    (Court of Civil Appeals of Texas. Galveston.
    April 10, 1917.
    On Motion for Rehearing, June 27, 1918.)
    1. Contracts <S=3l64 — Construction and Operation.
    A corporation took a transfer of property from its president, in consideration of the payment of his debts. The same clay in pursuance of a resolution it entered into a tripartite agreement with the debtor and an agent, transferring such property with other property to the agent in consideration of the payment of the corporation obligations together with those assumed. Held, that the transactions are to be construed as one contract.
    2. Contracts <S=»187(3) — Enforcement by Third Parties — Equities — Failure of Consideration.
    Under an agreement to turn over stock in consideration that the transferee will pay the debts of the transferor, including a note guaranteed by him, upon a failure of delivex*y of part of the stock the rights of the owner of the note, as beneficiary, are subject to the equities of the original parties.
    3. Contracts <§cs>187(3) — Construction — Prorate Distribution of Money.
    Where one agrees to pay the debts of another, from a specified fund as they become due and are presented, in consideration of the transfer of property, he is not bound to distribute the fund pro rata among the creditors, and upon the failure of the debtor to transfer part of the property after the debts have been partially paid in full at his presentation, the transferee can withhold any part of the fund less than the value of the property not transferred, and is not liable to an unpaid creditor for the proportionate amount which his debt bears to those paid.
    4. Contracts <S=»175(2) — Performance—Evidence.
    Where property is transferred in consideration that debts will be paid from a certain fund as they mature and are presented, and upon a partial failure to transfer the property a sum less than the value of the property not transferred is withheld, in an action by a creditor against the transferee and its agent, testimony of the agent that the money already paid was disbursed at the direction of the debtor and the transferee is admissible on the issue as to the meaning of the contract.
    Appeal from District Court, Harris County; Chas. E. Ashe, Judge.
    Suit by the American National Bank of Houston against the American Loan i& Mortgage Company and Arch MacDonald. From judgment for plaintiff, defendants appeal.
    Reversed and rendered.
    Moody & Boyles, of Houston, for appellants. Presley K. Ewing, of Houston, for appellee.
   LANE, J.

This suit was brought by the plaintiff, American National Bank of Houston, hereinafter called “bank,” against the American Loan & Mortgage Company, hereinafter called “mortgage company,” and Arch MacDonald, to recover upon one certain promissory note executed by one George W. Riddle on the 1st day of February, 1910, payable to said bank six months after its date, it being alleged in plaintiff’s petition that said mortgage company, in writing, and for a valuable consideration, assumed and agreed to pay said note to plaintiff, together with interest and attorney’s fees; that on the 27th day of July, 1910, the defendant Arch MacDonald, of the one part, and W. E. Richards and' the defendant mortgage company, of the other part, entered into a valid and binding contract and agreement in writing, whereby he, said Arch MacDon-aid, for a valuable consideration, promised and agreed for tbe benefit of plaintiff to furnish the money therefor and therewith to pay the said note, according to its ténor and effect, whereby he became liable and bound to pay plaintiff the sums of money in said promissory note mentioned, including interest and attorney’s fees therein provided for, according to the tenor and effect thereof; that plaintiff is the leglal holder and owner of said note, which is long since due and unpaid in whole or part, and has been placed, since default in its payment, in the hands of an attorney for collection, under agreement to pay the 10 per cent, stipulated in said note as attorney’s fees for collection of same, whereby said 10 per cent, has become due and payable; that by the aforesaid premises and agreements of the defendants they and each of them became and are primarily liable, as between them and said Riddle, to pay said note, according to its tenor and effect, therefore plaintiff has elected to omit him as a defendant, he being a nonresident of this county and only secondarily liable.

After excepting generally and specially to plaintiff’s petition, defendants mortgage company and Arch MacDonald each answered denying that they or either of them at any time assumed or promised to pay or otherwise became bound to pay the note sued on, and further specially pleaded that if it should be held and determined that either of them did assume and agree to pay to plaintiff, or its order, the said note, together with interest and attorney’s fees, as alleged in plaintiff’s petition (which, however, is not admitted, but expressly .denied), they allege that the consideration for such agreement, if there was any such agreement, has practically failed, in that as a part of the consideration therefor one W. E. Richards, through whom the agreement is alleged to have been made, was to convey to the defendant mortgage company 1,100 shares of stock in the American National Bank of Houston as part consideration for said agreement; whereas the said Richards conveyed to said defendant only 850 shares of said stock, which said stock was of the par value of $100 per share. Wherefore these defendants say that by reason of the failure of said Richards to so convey the other 250 shares of said stock, which were to be conveyed to said mortgage company by said Richards, the consideration, for said alleged agreement has practically and materially failed, and that defendants are not therefore bound by said alleged agreement. Defendants also pleaded the two-year statute of limitation in bar of plaintiff’s cause of action.

By supplemental petition plaintiff pleaded as follows:

“Further pleading herein, said -plaintiff says that, at the time of the alleged transactions with respect to the note counted on, of, to wit, July 27, 1910, said American Loan & Mortgage Company was practically a holding corporation for said W. E. Richards, into which he had previously put some of his assets, including securities and lands, taking and owning practically all of its stock therefor; that at the time of said transactions it held property and securities of great value, but was under pressing necessity for cash Money, which the defendant Arch MacDonald by written contract ’between him, said W. E. Richards, and defendant, said American Loan & Mortgage Company, bearing date July 27, 1(310, then and there agreed to procure, furnish and loan to it, to wit, $125,000, to secure which it was agreed that said MacDonald should-have and there was conveyed to him, certain securities and land, out of which he was to reimburse himself expenses in and about obtaining said money so to be loaned by him, and also the amount of said loan, principal and interest, to be evidenced to him by notes of such company, and one-half of the 'balance realized from such assets he was to have for himself, for his services in that behalf, and in addition he was to be given a proxy to vote the stock of said W. E. Richards in said holding company, thereby giving him full.management and control, with a directory of his own selection, which proxy was duly granted; that as part of said contract and transaction said W. E. Richards transferred and turned over to said holding company other and further assets belonging to him, including the alleged stock in the plaintiff bank, which it cannot more definitely or with greater certainty here describe, but which are shown by the books of said holding company, in the control and custody of the defendants, and therefore such matters are within their peculiar knowledge; that as part of said contract and transaction said holding company agreed to become liable upon, assume and pay certain notes upon which he, said W. E. Richards, was liable, including the alleged note herein, and others, which were owing by said W. E. Richards, consisting of one for $15,000, Fourth National Bank, New York, and one for $23,000, note of Valley Route Townsite & Loan Company, held by plaintiff, and one for $2,500, Citizens’ State Bank of Bastrop, g.nd one for $3,500, note of Gary Haynes; that the reasonable and market value of said assets and property so transferred and turned over to said holding company under said contract and transaction of June 27, 1910, were equal to or exceeded in reasonable and market value all the obligations and debts, including the note herein counted on, owing by said W. E. Richards, which were assumed by said holding company, so that said holding company was thereby paid -by said Richards the sum of the full amount of said notes and obligations, so assumed to bo paid by it, said holding company including the alleged note herein counted on, and the averments in said amended answers of want or failure of consideration are without any support and untrue; that all the assets and property which he, said W. E. Richards, agreed to pay or turn over to it, said holding company, in consideration of its assumption, were paid and turned over by him to it, and by it received in due course, and instead of the defendants having failed to pay the alleged note, as- agreed to do, on account of any failure or want of consideration, the facts are that the defendant Arch MacDonald a few days after said transactions of July 27, 1910, was duly appointed liquidating agent of this plaintiff, and while acting in that capacity for it and its trustee in that behalf he had and held in his custody, control and power, and subject to his duty and call, the said money which he had agreed to procure, furnish and loan to said holding company, and with which he had agreed to pay the alleged note to this plaintiff; but nevertheless, disregarding his duty to plaintiff in that behalf, he diverted said fund to other purposes and failed to make such payment to plaintiff, either in whole or in part, though justly due to it; but if there was any failure of consideration as alleged, which plaintiff denies, such was applicable to the alleged note counted on herein only pro rata, and in the proportion which the amount of such note .bears to the total indebtedness assumed to be paid by said holding company, in consideration of the value therefor received by it from said Richards, as aforesaid.”

By supplemental answer defendants excepted to all allegations of plaintiff’s supplemental petition, except such as denied the failure of consideration pleaded by defend.ants, and except such as reads as follows:

“If there was any failure of consideration as alleged, which plaintiff denies, such was applicable to the alleged note counted on herein only pro rata and in the proportion which the amount of said note hears to the total indebtedness assumed to be paid 'by said holding company in consideration of the value therefor received by it from said Richards, as aforesaid”

—for the reason that the same are not in reply to anything pleaded by this defendant, and if proper to plead at all, the same should be pleaded in the plaintiff’s original petition, and are not proper to be pleaded in its supplemental petition.

The defendant bank by trial amendment alleged:

“That in the alleged agreements of July 27, 1910, whereby the defendants, and each of them, promised and agreed to pay the alleged note, the said note was by mistake described as for $5,500, instead of for lie alleged amount of $5,459, the said note not being before the parties at the time, and it being referred to by estimate of the amount, 'but the note thereby assumed was and is the identical note alleged in plaintiff’s petition herein, to which this is an amendment.”

That the nature of this case and the opinion to follow may be better understood, we here make the following statement:

On the 27th day of July, 1910, one W. E. Richards, at that time president of said mortgage company, being largely in debt and desiring to have such debts settled, agreed to sell and deliver to said mortgage company 1,100 shares of the stock of the American National Bank of Houston, Tex., and 525 shares of the stock of the Valley Route Townsite & Loan Company belonging to him, and all lands and interest in lands owned by him situated in the counties of Ereestone, San Patricio, Harris, and Leon in the state of Texas and in consideration' of such agreed sale and delivery of said properties to it by said Richards said mortgage company agreed to assume and pay the following debts due and owing by said Richards, to wit: $15,000, Fourth National Bank, New York. $23,000, American National Bank, Houston. '$13,500, American National Bank, Houston. $6,000‘, Texas Trust Company, Houston. $2,500, Bank of Bastrop. $5,500, note of George Riddle, being tire same sued upon in this case. $3,500, note of Gary Haynes. And as further consideration therefor said mortgage company agreed to cancel and surrender to Richards certain certain promissory notes executed by Richards in favor of said mortgage company, aggregating the sum of $89,556.61.

At the time said agreement between Richards and said mortgage company was entered into, to wit, July 27, 1910, and contemporaneously therewith, the board of directors ol the mortgage company passed and caused to be recorded in its minutes the following resolution:

“Be it resolved that W. E. Richards, the president of this company, be and he is hereby authorized and empowered to negotiate for and receive from Arch MacDonald, on behalf of this' company a loan of $125,000, the same to be evidenced by a series of promissory notes signed by this company and indorsed by it and also indorsed by the said W. E. Richards, individually. And the said W. E. Richards is further authorized to enter into a contract with the said MacDonald, assigning, transferring and delivering to the said MacDonald all such real and personal property, stocks, bonds, bilis receivable and accounts receivable as he may deem proper, save and except that certain promissory note for $101,970.53, dated June 15, 1910', executed at Houston, Texas, signed by Allison-Richey Gulf Coast Home Company by W. R. Allison, president, payable to the American Loan & Mortgage .Company * * * and all collateral held to secure said note, and save and except 500 shares of the capital stock of the American National Bank, of Houston, evidenced by certificates Nos. 315, 294, 4, 5, 244 and 245. Said contract shall authorize the said MacDonald to collect all of the aforesaid bills receivable and accounts receivable, either with or without suit, and to make such settlements, renewals, compromises, adjustments or deductions as may_, in his opinion, be advisable, and shall authorize him to sell, transfer and convey all of the other property conveyed to him under said contract. Said sales to be at private sale and for such prices and upon such terms as he may deem advisable, and that out of the proceeds arising from such collections he shall first deduct all expenses, outlays and bonuses paid or incurred by him, and that he shall next pay the full amount) of said series of notes amounting to $125,000, hereinafter mentioned, and all interest thereon. And that he shall then pay over and deliver to this company such proportion of the remainder of said proceeds and of the remainder of said property which may not have been disposed of as.may have been agreed upon between the said MacDonald and the said Richards, and shall retain the remainder of such proceeds and properties as part of his compensation for services rendered under said contract. Said contract shall provide further that in addition to the above, and as the remainder of his compensation for services thereunder, the said MacDonald shall be entitled to receive from this company such proportionate part as may have been agreed upon between him and said Richards, of all its assets (exclusive of the assets returned to it under its contract). Said contract shall further provide that the said 'sum of $125,-000, loaned by said MacDonald to this company shall be applied by him to the payment and discharge of such obligations and debts of this company or (either originally incurred by this company or assumed by it) as may be agreed upon between the said Richards and the said MacDonald.”

On the same day and contemporaneously with said agreement and passage of said resolution, W. E. Richards, the mortgage company, and Arch MacDonald entered into a tripartite contract in writing, the substance of which, material to the matters presented for our decision, is as follows:

“Whereas, the American Loan & Mortgage Company, a private corporation having its principal offices in the city of Houston, Texas, is indebted to various persons and corporations in considerable sums of money, and it will be necessary to convert into cash for the payment of said indebtedness a portion of its assets, and, whereas, in order that the same may be done without too great a sacrifice in values, it is desirous of securing the services and assistance of Arch MacDonald in the conduct and management of its affairs, and especially in making sales of its notes, stock and other securities, including real estate and generally to enlist the services of said MacDonald in its behalf. And, whereas, the said American Loan & Mortgage Company is indebted to the said Arch MacDonald in the sum of $125,000, evidenced by a series of notes bearing even date herewith, executed by the said American Loan. & Mortgage Company, payable to its order and by it indorsed in blank and also indorsed by W. E. Richards, which said notes bear interest from date at the rate of 8 per cent, per annum and provide for the usual attorney’s fees of 10 peí-cent. : Now, therefore, in order to assure and secure the payment of said notes according to their tenor and effect, the said American Loan & Mortgage Company, acting herein by its president, W. E. Richards, in pursuance of a resolution duly passed and adopted by its board of directors on the 27th day of July, 1910, have sold, assigned and transferred and by these presents do sell, assign, transfer and convey unto the said Arch MacDonald the following described property: [Here follows a long list of personal property.] And the said American Loan & Mortgage Company, in pursuance of said resolution, has also conveyed to the said Arch MacDonald by deed of conveyance duly executed, and delivered, certain real estate in the counties of Freestone, i^eon, San Patricio, and Harris, in the state of Texas. The said Arch MacDonald is hereby authorized and empowered to immediately proceed to collect all of the aforesaid bills receivable and accounts receivable, either- with or without suit, and to make such settlement, renewals, compromises, adjustments or deductions as may in his opinion be advisable. He is also authorized and empowered to immediately sell, transfer and convey all of the other property which has been conveyed to him by the said American Loan & Mortgage Company, as aforesaid, which sales shall be made by him at private sale and for such prices and upon such terms as he may deem advisable, and with the same effect as though he was the absolute owner thereof. Out of the proceeds arising from such collections and sales the said MacDonald shall first deduct any and all expenses and outlays which may have been incurred by him in and about said business, including any bonus or bonuses that he may have paid or incurred in order to enable him to secure the money which has this day been loaned by him to the American Loan & Mortgage Company, as aforesaid. Out of the said proceeds he shall next pay the full amount of said series of notes amounting to $125,000 hereinafter mentioned, and all interest thereon, whether the said notes shall have matured at said time or not. He shall then pay over and deliver to the said American Loan & Mortgage Company one-half of the remainder of said proceeds and one-half of the remainder of all of said property which may not have been disposed of hereunder, and the remaining one-half of said proceeds and one-half of said undisposed of property shall be the property of and belong to the said Arch MacDonald as part of his compensation for services rendered under this contract. In addition to the above and as the remainder of his compensation for services hereunder, the said MacDonald shall be entitled to receive from said American Loan & Mortgage Company one-half of all assets (exclusive of the assets returned to it nnder this contract) remaining to it after the payment of all indebtedness now existing against it. The said sum of $125,000 this day loaned by said MacDonald to said American Loan & Mortgage Company is to be applied by him to the payment and discharge of the following named obligations and debts of said American Loan & Mortgage Company, to wit, City National Bank of San Antonio, $7,000; City National Bank of Galveston, $5,000; Citizens’ State Bank of Bastrop, $2,500; St. Louis Union Trust Company, $10,-000; Guarantee State Bank of Lufkin, $2,500 ; First National Bank of Jasper, $8,500; Tyler County Bank, Woodville, $8,500; Gibbs National Bank of Huntsville, $10,000; Palacios State Bank, $5,000; First National Bank of Corsicana, $20,000. And the following obligations and debts originally owing by the said W. E. Richards and which have been assumed by the said American Loan & Mortgage Company, to wit: $15,000, Fourth National Bank, New York. $28,000, note of Valley Route Townsite & Loan Company, held by American National Bank of Houston. $2,500, Citizens’ State Bank of Bastrop. $5,500, note of Geo. W. Riddle, held by American National Bank of Houston. $8,500, note of Gary Haynes. All of such debts aggregating the sum of $118,500. * * * The said Arch MacDonald hereby binds and obligates himself to undertake to execute all the duties herein imposed upon him, and that he will endeavor to discharge same to the best of his knowledge, skill, and ability. This contract is executed in duplicate, and each of said duplicates shall be considered, held, and taken to be the original contract.”

It is alleged in plaintiff’s supplemental petition, and shown by the evidence, that as a part of said contract and transaction (which includes said agreement, resolution, and tripartite contract) said W. E. Richards transferred and agreed to turn over to said mortgage company certain assets belonging to him, including the 1,100 shares of stock of the American National Bank, and it was so understood by all the parties to said contract and transaction. It further appears that in consideration for said transfer and delivery of said property to it, said mortgage company agreed to pay the debts of Richards described in the contract or agreement. It is shown that in pursuance of said contract, agreements, and general understanding of all'the parties thereto, the mortgage company did transfer to Arch MacDonald the property described in said tripartite contract, and that MacDonald loaned to said mortgage company $125,000, which was placed in his hands as the agent of the mortgage company; that MacDonald agreed to pay with! said $125,000 the obligations described in said tripartite contract as they matured or were presented to him for payment; that MacDonald in an effort to perform his part of said contract 'Paid said obligations as they became due, and were sent to him by W. E. Richards, president of the mortgage company, until he had paid out $116,000 of said $125,000 loaned by him to said mortgage company; that after having made such payments, as it was contemplated by all the parties he should, he became informed that W. E. Richards had not transferred and delivered to the mortgage company 250 shares of the 1,100 shares of the capital stock of the American National Bank of Houston, of the value of $10,000, which he had contracted to do as a consideration for the payment of his debts, including the note sued upon and therefore in justice to said mortgage company and for its particular benefit lie, as its agent, refused to make further payments of the debts of Richards, especially the note sued upon.

There is neither allegation nor evidence to the effect that MacDonald converted any part of the $125,000 turned over to him to his own use, but, upon the contrary, plaintiff alleges that $9,000 thereof was diverted, and it seems to be conceded that saidi sum was used in payment of obligations due by the mortgage company. It is also shown that' W. E. Richards for valuable consideration promised to pay the Riddle noté sued on, and that thereafter the mortgage company and MacDonald promised to pay same for the consideration of the property to be delivered by Richards to the mortgage company.

The case was tried before a jury, which, in answer to special issues submitted by the court, made, among others, the following findings: First, The parties to the agreement of July 27, 1910, mutually intended to include the note sued on as one of the debts owing .by W. E. Richards which were to be paid. Second, W. E. Richards did convey to the American Loan & Mortgage Company 850 sharesi of the capital stock of American National Bank of Houston, instead of 1,100 shares, as he agreed to do. Third, The value of 250 shares of the capital stock of American National Bank of Houston on July 27, 1910, was $10,000.

Both parties requested the court in writing to render judgment in their respective favor upon the verdict of the jury. Whereupon the court refused the request of defendants and rendered judgment in favor of plaintiff for the sum of $7,313.95, said sum being arrived at by, abating the face amount of the alleged note in suit of, to wit, $5,459 in the sum of $791.15, leaving a balance of $4,667.85, on which interest was computed at 8 per cent, per annum from August 1, 1910, the maturity of said note, to November 20, 1915, the date of said verdict, making $6,649.05, and adding thereto 10 per cent, as attorney’s fee, to wit, $664.90, aggregating $7,313.95, which said abatement was such proportionate part of the failure of consideration of $10,000 as the face amount of said note bears to the indebtedness to be paid to third parties as owing by W. E. Richards, of $69,000 in the transaction between the parties of July 27, 1910. From this judgment defendants have appealed.

The appellants’ main contention for reversal and one which we think controls all the material issues presented, is, that the court erred in rendering judgment in favor of plaintiff, because the same is wholly unsupported by the verdict of the jury, or by any evidence whatever.

We think the instruments evidencing the several transactions between W. E. Richards, the mortgage company, and Arch MacDonald on the 27th day of July, 1910, hereinfore mentioned, should be taken together and construed as one instrument. From the face of these instruments and other circumstances shown (by the evidence we further conclude that it was the understanding and agreement of all of said parties that the properties sold by Richards to the mortgage company were to be delivered to said mortgage company as the consideration moving said mortgage company to make the promise to pay the debts owing by Richards mentioned in said agreement, and that only in the event such property was so delivered was MacDonald to loan the said $125,000 to pay and with which he promised to pay, among other debts owing by Richards, the note sued on.

We do not think any one has or can, upon any ground of reason, contend that W. E. Richards under the facts of this case could compel either the mortgage company or Arch MacDonald, its agent, to pay more money out for his account than they have paid, so long as he withholds from the mortgage company stock of the value of $10,000, which he agreed to turn over to said mortgage company as a part of the consideration for the promise on the part of said company to pay certain debts of his. We repeat, it would hardly be contended that Richards, after failing to turn over a part of the consideration of the value of $10,000, could successfully maintain an action to require the mortgage company to pay over to him the entire consideration agreed upon to be paid out for him, and as appellee in this case has surrendered no rights against Riddle, the maker of the note sued on, nor against Richards, who assumed the payment of the same, it occupies no better position than does Richards. One who seeks to take the benefits of a contract made by a third person is affected by unperformed conditions required by the contract to be performed by such third person (in this case Richards), and he is bound by the conditions and terms of the contract under which he seeks benefits. He stands in the shoes of such third party through whom he claims, and can have no higher rights under the contract than such person had. In Ruling Case Law, vol. 6, p. 886, § 273, the law is stated as follows:

“Necessarily the rights of a party for whose benefit a promise! is made must be measured by the terms of the agreement between the principal parties, and the right to recover from the promisor is not absolute in all cases. The beneficiary is in fact asserting a derivative right. Therefore, among other limitations, the party to be benefited takes subject to all inherent equities arising out of the contract, as affecting the principal parties.”

We quote from American & English Ency. of Law (2d Ed.) vol. 7, p. 109:

“The right of a third party to recover is subject to the equities between the original parties springing out of the contract between them. Thus where the promise is void as between the promisor and promisee for fraud, or want of failure of consideration, the third party is not entitled to maintain an action upon the promise.”

In the case of Dunning v. Leavitt, 85 N. Y. 30, 39 Am. Rep. 619, in which the consideration as between the parties to the contract had failed, but the suit was brought by the third person for whose benefit the promise had been made, the Court of Appeals of New York said:

“I know of no authority to support the proposition that a person not a party to the promise, but for whose benefit the promise is made, can maintain an action to enforce the promise, where the promise is void as between the prom-isor and the promisee for fraud, or want of consideration, or failure of consideration. It would be strange, I think, if such an adjudication should be found. The parties! suing upon the promise, in cases like Lawrence v. Fox [20 N. Y. 268], is in truth asserting a derivative right. * * * There is no justice in holding that an action on such promise is not subject to the equities between the original parties springing out of the transaction or contract between them.”

See, also, Heath v. Coreth, 11 Tex. Civ. App. 91, 32 S. W. 57; Malanaphy v. Mfg. Co., 125 Iowa, 719, 101 N. W. 640, 106 Am. St. Rep. 332; Green v. McDonald, 75 Vt. 93, 53 Atl. 332; Hargadine-McKittrick Dry Goods Co. v. Swofford, 65 Kan. 572, 70 Pac. 582; Trimble v. Strother, 25 Ohio St. 378; Crone v. Dexter, 68 Mo. App. 122.

The evidence being undisputed that the mortgage company through its agent, MacDonald, had paid out for the account of W. E. Richards all the money which it had agreed to pay for him, except 89,000, and that Richards had made default in turning over to said mortgage company stock of the value of $10,000, which he had agreed to turn over to it as a part of the consideration moving said company to make said contract, neither Richards nor the beneficiary bank can recover in this suit, unless the bank can recover under the contention of the bank that it should be permitted to share proportionately with the other parties whose debts were paid by MacDonald with $116,000 of the $125,000 which he had loaned the mortgage company, which question we will- now proceed to discuss.

The trial court held, and appellee here contends, that as there was a failure only of a part of the consideration passing from Richards to the mortgage company, said appellee bank should have been paid its proportionate part of the $125,000 paid out by MacDonald. This contention, in effect, is a plea for equitable relief, and therefore must stand or fall in the adjustment of equities of the parties involved in the controversy. It has been shown by the mutual understanding and/ agreement of all the parties that MacDonald was to pay the obligations which he was directed to pay as they became due and were presented for payment. He had a right to assume that Richards would turn over to the mortgage company the whole of the consideration promised it, for its promise to pay Richards’ debts, etc., and upon this assumption, and in view of the fact that the obligations were sent to him for payment by Richards as they became due, he not only had the right, but it became his duty, to pay said obligations as they became due and were presented to him for payment. Under the facts of this case MacDonald could not at the beginning have anticipated that there would arise a necessity or demand for a pro rata payment of the debts he promised to pay out of the $125,006. He made such payment as he did make just as it was understood by and between all the parties he would make them, and after he had paid out for the mortgage company $116,000 of the $125,000 in his hands, and not until then, did he discover the default of Richards in not delivering the 250 shares of stock, here-inbefore mentioned, of the value of $10,000. Under these facts it would be unreasonable and inequitable to require either MacDonald or the mortgage company to make further payment of Richards’ debts, either in full or pro rata. We have reached the conclusion that appellants’ contention should be sustained, and that the judgment of the trial court should be reversed, and judgment here rendered for appellants.

We think plaintiff’s original petition sufficiently alleges that Arch MacDonald promised to pay the note sued on out of the $125,-000 loaned by him to the mortgage company to authorize the admission of evidence tending to prove such allegation. We also think that the description of the note sued on in the original petition, together with the explanatory allegation in appellant’s trial amendment, is sufficient to authorize evidence tending to show that it was the note assumed by the mortgage company.

We also think the court erred in refusing to permit appellant MacDonald to testify that W. E. Richards, as president of the mortgage company, directed him to pay the indebtedness of said mortgage company, and that all the funds of said mortgage company in his hands were paid out by him in accordance with the directions -and suggestions and wishes of said mortgage company and said W. E. Richards. But as what we have heretofore- said sufficiently disposes of all the material issues presented, we pretermit any further discussion of these matters.

For the reasons above indicated, the judgment of the trial court is reversed, and judgment is here rendered for appellants.

Reversed and rendered.

On Motion for Rehearing.

In our original opinion heretofore filed, through inadvertence, we stated the date of the three transactions named as constituting the negotiations between the parties to this suit as July 27, 1910, when it should have been stated as June 27, 1910. We also referred to such, transactions as “three instruments,” and stated that the “three instruments were simultaneously made, and that they constituted but one general contract between all the parties,” while we should have said that the three transactions were simultaneously had, and that they constituted but one general act forming the basis for the contract thereafter executed by the parties.

Nothing is better settled in this state; than that the court will look through the means used to reach the purpose or purposes which contracting parties had in view in determining whether or not all transactions had between them at the same time, out of which a contract arose were, as a whole, but one general transaction, and that the contracts arising therefrom constitute but one general contract, affecting all the parties to the several transactions. If the circumstances clearly show, as we think they do in the instant case, that the several transactions constituted but one general transaction, they will be treated as parts of the one general transaction, and when taken and considered together, as concluding the general purpose or agreement of all of the parties. When this is done, we cannot escape the conclusion that by these three transactions or agreements it was understood and agreed between said parties that Richards was to, and that he did, transfer all his property named in the transactions to the mortgage company, and in turn the mortgage company was to, and it did, employ MacDonald as its liquidating agent to act under its orders through Richards in the payment of certain of its debts and those of Richards with the $125,000 loaned by MacDonald to the mortgage company under the aforesaid general agreement and understanding of all the parties.

Appellee has filed its motion for rehearing, and therein has complained of the errors mentioned in the first part of this opinion, as well as of our holding that the three transactions mentioned constituted but one general transaction. We have herein admitted . and corrected the two errors referred to, but see no reason to recede from our conclusion that the three transactions constituted but one general transaction culminating in one general contract between the parties. In said motion our attention is also called to the fact that in our original opinion we found that Arch MacDonald paid out $116,000 of the $125,000 loaned by him to the mortgage company before he was advised that the 250 shares of stock of the bank which Richards had agreed to transfer and deliver to the mortgage company had not in fact been delivered to said mortgage company. This finding was error. After a careful re-exami- , nation of the statement of facts we are unable to find any evidence showing when MacDonald first learned that said stock had not been delivered. It is not made to appear ; as to whether he was advised of such nondelivery before he paid out the entire $116,* 000, or at some time thereafter. But as we have 'already said in our original opinion, the right of the appellee bank to recover any part of the money paid out by MacDonald for the mortgage company is subject to the equities between Richards and the mortgage company, the original parties, springing out of the contract between them. Therefore, in view of the fact that Richards failed to deliver 250 shares of bank stock, of the value of $10,000, as a part of the consideration for the making of the contract between himself and the mortgage company, he could not rightfully demand that a debt due by him as indorser to the appellee bank be paid by either the mortgage company or MacDonald out of the money placed in the hands of MacDonald, since MacDonald had paid out $116,000 of the same before said debt became due and before the same was presented to him for payment. If any sum of money, a part of the said $125,-000, less than the value of the 250 shares of bank stock undelivered by Richards, remained in the hands of MacDonald after paying out $116,000 upon the debts designated in the contract between the parties, it was the property of the mortgage company, and neither Richards nor appellee bank could justly demand that any part of same be paid in satisfaction of the note held by said bank while Richards failed and refused to deliver to the mortgage company said 250 shares of bank stock. Since, then, Richards cannot demand a pro rata or further payment of MacDonald in part payment of the note held by the appellee bank, the bank, a third party, who holds a derivative right of. payment, cannot demand such payment.

The motion for rehearing is refused.
      <g^>For other cases see same topic and KEY-NUMBER, in all Key-Numbered Digests and Indexes


author: BOYCE, J.

text:
    ASKEW v. BRUNER.
    (No. 1370.)
    (Court of Civil Appeals of Texas. Amarillo.
    June 5, 1918.
    Rehearing Denied June 26, 1918.).
    1. Appeal and Error <3=1002 — Questions op Fact por the Juey.
    Where the evidence is in direct conflict, finding of the jury is conclusive on appeal.
    2. Mortgages <3=280(4) — Conveyance op Land — Assumption op Mortgage.
    Where grantee under a warranty deed assumed payment of “$721.60' due the N. Co., payable $12.24 monthly,” deed was not inconsistent' with a finding that grantee did not assume payment of interest on the $721.60'.
    3. Covenants <3=96(1) — Incumbrances — Breach.
    Any incumbrances which would compel payment of any amount in excess of exception stipulated in a warranty deed would be a breach to that extent of covenant against incumbrances.
    , 4. Covenants <3=39 — Covenants against In-cumbrances — NOTICE.
    ; In cases of breach of covenant in a warranty deed, notice of adverse claim or incumbrance covenanted against does not affect right of cove-nantee.

      5. Covenants &wkey;>119 — Evidence—-MaterialITY.
    In action treated as one for breach of covenant as to amount of incumbrances on land, a deed of trust and record thereof was not material evidence, where no issue of notice was submitted to the jury.
    6. Fraud <&wkey;52 — Evidence—Admissibility.
    In an action for deceit, circumstances tending to show that declarations were made after consummation of transaction merely went to the weight of, and did not affect admissibility of, evidence that such representations were made at time of closing the transaction.
    7. Appeal and Error <&wkey;882(9) — Invited Error-Evidence.
    A party cannot complain that improper evidence was elicited from his witness on cross-examination, where same evidence had been given on direct examination.
    Appeal from Potter County Court; T. W. McBride, Judge.
    Suit by T. M. Bruner against W. A. Askew. Judgment for plaintiff, and defendant appeals.
    Affirmed.
    Madden, Trulove, Ryburn & Pipkin and E. T. Miller, all of Amarillo, for appellant. Kimbrough, Underwood & Jackson, of Amarillo, for appellee.
   BOYCE, J.

T. M. Bruner bought of W. A. Askew a house and lot, assuming, in the deed of conveyance the payment of “$721.60, due the National Loan & Investment Company, payable $12.21 monthly.” Bruner claims that Askew represented that this amount was figured so as to include the principal and interest, and that upon payment of said amount in such installments the lien held on the property by the loan company would be released. Askew denies this, and claims that he stated the facts truly as to the amount and terms of payment thereof due the said loan company. As a matter of fact the $721.60 was the amount that would have been required tq pay off the indebtedness to the loan company if paid in cash at the date of the deed, but after payment of said sum in monthly installments a further payment of $299.28 was required to satisfy such indebtedness and secure a release of a deed of trust given by Askew to secure the payment thereof. Bruner brought this suit to recover, and did recover, in the court below the said sum of $299.28.

The evidence offered by plaintiff and defendant as to the representations made by Askew in reference to the indebtedness to the National Loan ■& Investment Company is in direct conflict, and the finding of the jury, in response to the special issues submitted, that Askew represented to Bruner that a payment of the sum of $721.60, in monthly installments of $12.24, would discharge the indebtedness to the National Loan & Investment Company, and that this was the amount which plaintiff assumed to pay, is conclusive in this court.

We are inclined to the opinion that the suit may be regarded as one for a breach of warranty against incumbrances. The deed was a general warranty deed, and of course covenanted against .incumbrances. R. S. art. 1112. Therefore the covenant applied to the lien held by the National Loan & Investment Company unless it was excepted. Tile only exception as provided by the terms of the deed is to be implied from the assumption of the payment of the indebtedness to the loan company by the language already quoted. This language does not refer to interest on the $721.60, and as “interest, unless otherwise expressed, is payable when the debt becomes due and cannot be collected before maturity of the debt” (Connor v. City of Paris, 87 Tex. 32, 27 S. W. 92; Henry v. Roe, 83 Tex. 446, 18 S. W. 808), the deed on its face is in accordance with the finding of the jury and the claim of the plaintiff; at least it is not inconsistent therewith. Any incumbrance which would compel the payment of any amount in excess of the exception stipulated for would be a breach to that extent of the covenant against incumbrances. Thomas v. Ellison, 302 Tex. 354, 116 S. W. 1141; 11 Cyc. 1118; Johnson v. Hollensworth, 48 Mich. 140, 11 N. W. 843; Corbett v. Wrenn, 25 Or. 305, 35 Pac. 658. In cases of breach of covenant notice of the adverse claim or incumbrance covenanted against does not affect the right of the covenantee. Parish v. White, 24 S. W. 574. So that we do not think that the question of notice to Bruner of the true amount of the incumbrance was material.

But, even if the suit is to be regarded as an action for deceit proper, where in order to recover for fraudulent representations it must be shown that the defrauded party was without knowledge of the true facts .and relied upon the representations made to the contrary, we do not consider the evidence as conclusively establishing that Bruner did not, under the circumstances, have the right to rely on the representations which the jury found were made to him by Askew in the negotiations for the sale of said property. The measure of damages would have been the same whether the action was for deceit or for breach of covenant. Thomas v. Ellison, 102 Tex. 354, 116 S. W. 1143. So, however the suit may be regarded, we do not think a peremptory instruction for defendant would have been proper, and overrule appellant’s assignment complaining of the refusal of the court to give such instruction.

The deed of trust, given by .Askew to the National Loan & Investment Company, and the record thereof, would not have been in any way material in the consideration of the only two issues submitted to the jury. No issue of notice was submitted, and if wei are correct in the conclusion that the action is properly one for breach of covenant, the issue of notice was itself immaterial. Since it was admitted that, after payment of the $721.60 in monthly installments, as referred to in the deed, Bruner was rightly compelled to pay the further sum of $299.28 to discharge said incumbrance, we find no error in the action of the court in refusing to admit in evidence the .said deed of trust and record thereof.

There is evidence to the effect that the representations made to Mrs. Bruner, the admission of which is complained of by the third assignment, were made at the time of the closing of the trade and not afterwards. The circumstances that tended to show that the conversation referred to was had after the sale was finally consummated merely affects the weight of this evidence and not its admissibility.

The objections to the evidence, admission of which was complained of by the fourth assignment, are well taken. However, the same testimony had been given by the witness on direct examination, and we do not think this erroneous ruling requires a reversal of the case.

Affirmed.

HUPP, O. J., not sitting, being absent in Austin, serving on committee of judges, passing on writs of error for Supreme Court.
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text:
    NEELEY v. LANE et al.
    (No. 1380.)
    (Court of Civil Appeals of Texas. Amarillo.
    June 19, 1918.)
    1. Covenants ©==>6 — Mutual Mistake.
    In action for breach of covenant against in-cumbrances, defendant is precluded from relief from the contract on the ground of mutual mistake, where he noticed the oversight or mistake at time he signed deed.
    2. Covenants <@==>39 — Warranty Against
    Incumbrances — Knowledge op Gbantee.
    That grantee in a warranty deed had knowledge of existence of incumbrances, not excepted in the deed, did not preclude him from relying on the covenant against incumbrances.
    Appeal from District Court, Cottle County; J. H. Milam, Judge.
    Action by the First State Bank of Decatur against John G. Lane, C. D. Neeley, and others, in which Neeley filed a cross-action against Joñn G. Lane and another. Prom an adverse judgment on his cross-action, Neeley appeals.
    Reversed and rendered.
    Bell & Bell, of Paducah, for appellant. J. M. Hawkins, of Paducah, for appellees.
   BOYCE, J.

This is the second appeal in this case, the former appeal being reported in 193 S. W. p. 399. The case presented is in effect a suit by appellant, Neeley, against ap-pellees, John G. and R. P. Lane, for breach of covenants against incumbrances. The Lanes contracted to sell, and in pursuance to the contract conveyed by warranty deed to Neel-ey certain real estate. By the terms of the contract and deed Neeley assumed to pay two notes, particularly described, one for $2,738.50, the other for $812.50. In addition to said two notes there was another note for $812.50, outstanding and secured by a lien against said land, which Neeley has been compelled, by judgment heretofore rendered in this cause, to pay in order to protect the land from foreclosure. By a cross-action in this case the said Neeley sought a recovery of such amount against said Lanes. Appellees defended on the ground that the real contract between the parties was to th’e effect that Neeley was to assume all the indebtedness against the land, including both $$12.50 notes, and that the provision of the contract and deed, which stipulated for the assumption of the payment of only one note, was the result of oversight and mistake of the parties and the person drawing said contracts and deed.

The evidence is conflicting as to the verbal representations and agreements as to the amount of indebtedness that was to be assumed by Neeley upon his purchase of the land. The writings embodying the agreement, to wit, the preliminary contract and the deed, are plain and unambiguous in their terms, and constitute the agreement between the parties unless it is made to appear that both parties were “mistaken as; to the effect of the writing and ignorant of its misstatement of the agreement.” Kelley v. Ward, 94 Tex. 289, 60 S. W. 311; Moore v. Studebaker Bros. Mfg. Co., 136 S. W. 571, pars. 3-6; Lott v. Kaiser, 61 Tex. 668. John G. Lane, who represented himself and R. F. Lane in the transaction, testified that both the contract and deed were read over to him, and he knew before he signed the contract and delivered the deed that such instruments mentioned only one note, though he knew there were two notes outstanding against the land. In this connection he said, “I didn’t call their attention to it at that time because I just supposed it was an oversight.” This evidence precludes any relief from the contract on Jke ground of mutual mistake. Authorities above cited.

It was immaterial whether Neeley knew, or in the exercise of ordinary care could have known, of the existence of the additional $812.50 note. The warranty covenanted against all incumbrances not assumed by Neeley, and his knowledge, or means ,of knowledge, of the existence thereof did not preclude him from relying on the covenant. Parish v. White, 24 S. W. 574; Askew v. Bruner, 205 S. W. 152, decided by this court June 5, 1918, not yet officially reported. When, therefore, Neeley was compelled to pay the judgment rendered on said note for $812.50 to satisfy a prior incumbrance against the land, and which was not excepted from the warranty, there was a breach of the covenant against incumbrances. R. S. art. 1112; Thomas v. Ellison, 102 Tex. 354, 116 S. W. 1141; Askew v. Bruner, supra; 11 Cyc. 1118; Johnson v. Hollensworth, 48 Mich. 140, 11 N. W. 843; Corbett v. Wrenn, 25 Or. 305, 35 Pac. 658. Since appellee’s evidence on the issue of mistake in th'e terms of the written contract, and which is the only defense offered to the right of recovery by Neeley; is insufficient to support such plea, it follows that th'e peremptory instruction for appellant should have been given.

It is dot necessary to consider other assignments.

The judgment of the lower court will be reversed, and judgment here rendered for appellant on his cross-petition.

HUFF, 'O. J., not sitting, being absent in Austin, serving on committee of judges.
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text:
    PANHANDLE & S. F. RY. CO. v. MATSLER.
    (No. 1373.)
    (Court of Civil Appeals of Texas. Amarillo.
    June 12, 1918.)
    1. Trial <&wkey;352(5) — Submission or Issues— Assumption as to Facts.
    In action for damages to live stock shipped under contract by which all were to be shipped in 13 ears at one time, the carrier having shipped 10 cars one day and 3 the next, submission of issue whether cattle in second shipment lost more than they would have lost if shipped in the first shipment did not erroneously assume that the failure to ship all of the cattle together was negligence, where other instructions submitted the issue of negligence and stated that the issue complained of should not be answered if the jury found there was no negligence.
    2. Trial &wkey;>350(3) — Live Stock — Damages in Shipment — Instructions.
    In shipper’s action for damages to live stock by delay in shipment, it was proper to submit issue as to the relative market value of the cattle on the day when they should have arrived and on the day on which they did arrive at the market, so that in the event of a finding of negligence there would be a basis upon which to determine damages.
    3. Appeal and Error &wkey;>733 — Assignments op Error— Suppioiency.
    In action for damages to stock in shipment by delay of day in shipping 3 cars and of one day in shipping each of 2 bad order cars, where no damages could be assessed for the extra delay because of bad order under the findings of the jury, and the judgment did not show that any damages were allowed for the delay for bad order, and the assignment of error did not show that the judgment was in excess of the damages properly assessable because 3 cars did not get into the first train, no error was shown.
    Appeal from District Court, Hale County; R. C. Joiner, Judge.
    Action by W. R. Matsler against the Panhandle & Santa Fé Railway Company. From a judgment for plaintiff in part, defendant appeals.
    Affirmed.
    Madden, Trulove, Ryburn & Pipkin, of Amarillo, Terry, Cavin & Mills, of Galveston, and L. R. Pearson, of Plainview, for appellant. Matbes & Williams, of Plainview, for appellee.
   BOYCE, J.

This suit was brought by W. R. Matsler against the appellant railway company, to recover damages for delay in furnishing cars for and in the subsequent transportation of a shipment of 13 cars of cattle from Tahoka to Kansas City. Under the rulings of the court and the findings of the jury recovery was denied, except for damages to 3 cars of the,cattle on account of not having been loaded out and shipped with the other 10 cars. Plaintiff had ordered cars for shipment of said cattle on November 3, 1916, but had been advised prior to that time and from time to time thereafter that the cars were not ready, until on November 14, 1916, he was notified by the railway company that the cars would be ready for shipment on November 17th. There is some dispute as to the time of day when the cattle were to be loaded, but plaintiff’s version of the understanding, supported by the finding of the jury, is that he was to have the cattle in the loading pens by 1:30 or 2 o’clock p. m. The railway company had its train and crew at Tahoka ready to begin loading at 11 a. m. Plaintiff did not get his cattle into the pens until about 4:30 p. m. By 10 o’clock p. m. 10 of the cars were loaded, and the train operatives refused to load the other 3 cars, and left with the 10 cars already loaded, for the reason that they did not think that the 3 cars could be loaded and the train get into a division where the operatives could be relieved without keeping said operatives of the train on duty for a longer period than 16 hours, in violation of law. The jury found, however, that the defendant, in the exercise of ordinary care, could have loaded and shipped out all the cattle on the one train without violating the 16-hour law. The 3 cars thus left were shipped out the next day. Two of the cars arrived at Kansas City one day later than the 10-car shipment, and 1 car, on account of bad order, was delayed still another day. The .only recovery allowed, however, under the findings of the jury, was for the one day’s delay, caused by the 3 cars not being shipped with the other 10 cars, since the jury found defendant not responsible for the extra delay on account of the bad order of 1 car in the 3-car shipment, and 1 car in the 10-car shipment.

The first four assignments complain of the submission of the issues as to whether the cattle shipped in the 3 cars referred to “lost more than they would have lost if they had been loaded and shipped out with the 10 cars,” and the other issues submitted in connection therewith for the purpose of eliciting conclusions of the jury as to the consequent damage. The objection urged by these assignments is that the issues submitted assume that the failure to ship the 3 cars with the 10 ears was negligence. We do not think this objection is tenable. The court first submitted separately the question as to whether there was negligence on the part of the defendant in the failure to ship the 3 cars with the 10 cars, and the jury were told that if this issue should be answered in the negative then the issues now complained of should not be answered. The issues themselves do not refer to the question of negligence, but simply call for the conclusion of the jury as to the result on the cattle of the failure to ship them with the 10 cars.- The submission of an issue of damages in a negligence ease necessarily calls for a conclusion by the jury as to the damaging effects of the acts which are claimed to be negligent, so that, in the event it should be found that the acts complained of were negligent, there would be a finding by the jury as to the amount of the damages; otherwise there would have to be separate trials of the issue of negligence and amount of damages. We do not think there was any error in the manner of the submission of these issues.

For the same reasons we also hold that there was no error in the submission of the issues complained of by the fifth and sixth assignments. These issues merely call for a conclusion as to the relative market value of plaintiff’s cattle at Kansas City on stated dates, so that in the event of a finding of negligence in respect to the issues submitting that question, there would be a basis upon which to determine the damages.

There was also a car which proved to be in bad order in the first shipment, and this car on this account was cut out after the shipment started, and was delayed for one day. The jury found, however, that there was no unreasonable delay in the transportation of the 2 bad-order cars, 1 being in the first shipment and 1 in the second shipment. The seventh assignment complains that the judgment is excessive because damages are allowed on account of the delay in the shipment of these 2 cars. Under the findings of the jury no damages could be assessed for this extra delay. However, damages might, under the verdict of the jury, be included for one day’s delay of the 3 cars, including the 1 bad-order car, caused by their not getting in the first train. The judgment does not show that any damages were allowed for the delay on account of bad order in the transportation of these 2 cars, nor does the assignment show that the judgment is in excess of the amount of damages that might be properly assessed on account of the 3 cars not getting in the first train. The seventh assignment is therefore overruled.

The request for a peremptory instruction was properly refused. The evidence was sufficient to require a submission to the jury of.the question of negligence in respect to the delay until the 18th in the shipment of the 3 cars, as well as to extra delay in the shipment of 1 car in the first shipment.

We find no reversible error, and the judgment is affirmed.

HUFF, O. J., not sitting, being absent in Austin, serving on committee of judges.
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