author: HARPER, C. J.

text:
    SOUTHERN GAS & GASOLINE ENGINE CO. et al. v. RICHOLSON et al.

    (No. 449.)
    (Court of Civil Appeals of Texas. El Paso.
    Dec. 10, 1915.
    Rehearing Denied Jan. 12, 1916.)
    1. Sales <@=>179 — Contracts—Construction.
    Where a contract for the sale and installation of machinery for irrigation declared that the agreement was subject to delays caused by fires, strikes, or other causes beyond the seller’s control, and that receipt of material constituted a waiver of any claim for damages on account of delay in delivery, such agreement did not make receipt of material a waiver of delay in installing the machinery after delivery.
    [Ed. Note. — Eor other cases, see Sales, Cent. Dig. §§ 456-468; Dec. Dig. <@=>179.]
    2. Sales <@=5422 — Damage from Delay — Submission of Issues.
    Where rice growers who purchased irrigating machinery from plaintiffs sought damages for delay in installing the machinery, claiming they were prevented from making a crop, but made no claim for damages from delayed delivery, the refusal of the court to submit that question was not erroneous, though the contract declared that ' receipt of the machinery should constitute a waiver of delay in delivery; the issue of damages from delay in installation being submitted.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. § 1204; Dec. Dig. <@=>422.]
    3. Appeal and Error <@=>262 — Review — Presentation of Grounds in Court Below.
    Tinder the statute of 1913, the erroneous submission of special issues cannot be reviewed on appeal, where no hill of exceptions was reserved below.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 1582-1589, 1593-1595; Dee. Dig. <@£=262.]
    4. Appeal and Error <@=>1066 — Review — Harmless Error.
    Where rice growers claimed damages for delay in installing irrigating machinery, and the evidence showed that the plant was never installed in accordance with the contract, a charge of delay in installation was harmless.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 4220; Dec. Dig. <@=>1066.]
    5. Trtal <@=>252 — Instructions—Applicability.
    Where machinery for irrigation was never installed in accordance with the contract, and the purchasers sought damages for injuries to their crops, a charge on the question of unreasonable delay in installation was unnecessary.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 505, 596-612; Dec. Dig. <@=>252.]
    6. Appeal and Error <@=>216 — Review — Presentation of Grounds in Court Below.
    Where damages were claimed for unreasonable delay in installing irrigating machinery and the seller desired the court to define the term “unreasonable delay,” it must, to predicate error on the failure, request a proper charge.
    [Ed. Note. — For other cases, see Appeal and Error, Dec. Dig. <@=>216; Trial, Cent. Dig. §§ 627-641.]
    7. Sales <@=>181 — Performance of Contract —Evidence.
    Where purchasers of irrigating machinery claimed that it was never properly installed and for that reason their crops failed, and the seller pleaded that tne plant was properly installed, but through the purchasers’ negligence it was not put in operation sucessfully. evidence of improper installation was admissible.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 473-491; Dec. Dig. <@=>181.]
    8. Sales <@=>285 — Warranty — Breach—Notice.
    Where a contract for the sale and installation of irrigating machinery required the purchaser, in case there should be any doubt that the material furnished was as warranted, to notify the seller in writing within 60 days from' the date of invoice, a letter written by the purchaser that there seemed to be something wrong with the whole outfit, as it would not start, but that he did not know what the defect was, was a sufficient compliance with the contract.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 806-808, 810; Dec. Dig. <@=>285.]
    9. Sales <@=>288 — Warranty — Breach — Waiver.
    While the execution of notes and mortgages by the purchaser of irrigating machinery after the installation of the plant might preclude the purchaser from denying the plant was as warranted, it is no defense to an action for damages arising on account of the failure of the machinery to furnish sufficient water to irrigate the purchaser’s crops.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 817-823; Dec. Dig. <@=>288.]
    10. Bills and Notes <@=>537 — Actions—Issues — Submission.
    Where the pleadings and evidence raise the question of failure of consideration for a note, such issue should be submitted to the jury.
    [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 1862-1893; Dec. Dig. <©=> 537.)
    11. Appeal and Error <@=>742 — Presentation of Grounds of Review — Propositions.
    Where appellants did not, by proposition or statement, indicate how the admission of immaterial or irrelevant evidence could have affected the jury, the receipt of such evidence must be considered as harmless.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3000; Dec. Dig. <@=>742.]
    12. Sales <@=>440 — Warranty—Breach—Evidence.
    Where a purchaser of machinery intended to be used to irrigate a rice crop sought recovery for crop failure on the ground that the machinery did not pump the amount of water as guaranteed, owing to the seller’s failure to properly install the machinery, thus preventing the raising of a crop, and the seller claimed that the crop failure was caused by the negligence and lack of knowledge of the one in charge of the crop, evidence that such person was a good farmer was admissible.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 1261-1276; Dec. Dig. <@=>440.]
    13. Sales <@=>442 — Warranty — Breach-Damages.
    ’ Where the seller of machinery to be used in irrigating a tract of rice land knew that another was to be associated with the purchaser, and the machinery did not furnish the amount of water for irrigating purposes, as guaranteed, such third person’s crop loss was part of the damages contemplated by breach of the contract.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 1284-1301; Dec. Dig. <@=>442.]
    14. Limitation of Actions <@=172 — Running of Statute — Persons Entitled to Urge Limitations.
    Defendant and another joined in cultivating rice, the crop to be irrigated by machinery purchased by defendant. The machinery, through defective" installation, failed to furnish water, and there was a crop failure. Held, that only defendant could raise the question whether liis associate could recover against him, and so, total crop loss being the damages in contemplation as result of breach of contract, the sellers of the irrigating machinery could not defeat the claim of defendant’s associate for his crop loss.
    [Ed. Note. — For other cases, see Limitation of Actions, Cent. .Dig. § 657; Dec. Dig. >@=172.]
    15. Sales @==>288 — Breach oe Warranty —■ Waiver — Estoppel—Payment.
    That a purchaser of irrigating machinery, with warranty, gave his notes to secure the purchase price, and the seller forebore to enforce collection, will not preclude the purchaser from recovering damages for loss of crops due to the failure of the machinery to properly irrigate the land.
    [Ed. Note. — For other cases, see Sales, Cent. Dig. §§ 817-823; Dec. Dig. <S=»288.]
    Appeal from District Court, Harris County ; A. R. Hamblen, Special Judge.
    Action by the Southern Gas & Gasoline Engine Company against J. J. Richolson and another, who cross-complained, in which the Foos Gas Engine Company intervened. From a judgment for defendants on their cross-complaint, plaintiff and intervener appeal.
    Affirmed.
    Bryan & Bryan and Andrews, Streetman, Burns & Logue, all of Houston, and Davis & Goggin, of El Paso, for appellants. Lane, Wolters & Storey, B. F. Louis, and Paul Kayser, all of Houston, and Townsend, Quin & Townsend, of Columbus, for appellees.

      Application tor writ of error pending in Supreme Court.

   HARPER, C. J.

This suit was filed August 30, 1911, by the Southern Gas & Gasoline Engine Company against J., J. Richolson, to recover on a note for $3,500, under the following allegations: That on August 14, 1910, said Richolson executed said note as part of the purchase money of certain machinery sold to him by the Foos Gas Engine Company, as evidenced by the written contract attached to plaintiff’s petition; prayed judgment for the amount of the note, interest, attorney’s fees, and for foreclosure of lien. By permission of the court, appellant Foos Gas Engine Company, December 22, 1911, intervened in the suit to recover on a note for $3,500, payable to Southern Gas & Gasoline Engine Company, and by said last-named company transferred to intervener, with lien therein provided for; prayed for judgment for the amount of the note, interest, and attorney’s fees and for foreclosure of the lien, etc. Defendants, Richolson and Bunge, answered by general denial, and specially pleaded that they entered into a contract on December 10, 1909, with the Foos Gas Engine Company, by which plaintiffs were to install certain rice irrigating machinery, consisting of engines and pumps, etc.; that the notes sued on were given as part of the consideration of said contract, said plant to be installed by plaintiffs upon defendants’ plantation in ample time to irrigate defendant’s crop of rice for the year 1910, and under a guaranty, as expressed in said contract, that said plant would furnish S,000 gallons of water per minute when installed, and defendants further allege that plaintiffs wholly failed to carry out said contract, in that the plant was not installed until the early part of July, 1910, and that it did not produce the amount of water guaranteed, and was therefore inadequate for the purposes for which it was intended; that, relying upon the said contract, defendants planted and cultivated 800 acres in rice for the year 1910; that because of the delay in the installation of the plant and the failure of the plant to produce the amount of water guaranteed, on account of defective machinery, etc., they lost in crops, $20,000, etc. Plaintiffs, by supplemental petition, in answer to the foregoing by defendants, alleged: That the contract provided that the machinery was to be shipped 90 days from approval, February 10, 1910, and was so shipped, and further set up, as matter of defense, the guaranties and reservations in the contract, among others as follows:

“Should there be any doubt in the mind of the purchaser that the material furnished is as represented herein, he must advise the Foos Gas Engine Company in writing within 60 days from date. of invoice, etc. No such complaint being received hereunder, or the continued use of such machinery after expiration of time mentioned shall constitute acceptance thereof.”

That the plant was in fact ready for operation in June, 1910, but by reason of the negligence of defendant Richolson was not operated until July, 1910. That it had the pumping capacity guaranteed. That defendant failed to notify plaintiff within 60 days after receipt of the machinery that it was not as represented. As provided in the contract, it constituted a binding acceptance and a waiver of all damages. The cause was submitted upon special issues to the jury, and upon the answers thereto judgment was rendered for appellees for $16,193.05, from which this appeal is perfected.

Findings of Fact.

In December, 1909, Richolson entered into negotiations with C. W. Marlin, the agent of the Foos Gas Engine Company, also manager of the Southern Gas & Gasoline Engine Company, with the view to the installation of an irrigation plant for the purpose of irrigating approximately 800 acres of rice land in time for the year 1910, which resulted in the execution of the contract copied below. Said ■contract was accepted by the Foos Company December 10, 1909. The portions of the contract material to this opinion are:

“AVe propose to furnish you:
“One Foos vertical two cylinder engine, which shall develop 125 brake horse power, when using the following fuel: Producer gas made from commercial lignite such as Hoyt, Calvert or Rockdale coal, to be shipped about ninety days from approval of order, speed of engine 225 R. P. M.
“We are to furnish an engineer to supervise the installation of the machinery furnished hereunder and instruct your operators. You are to build necessary foundations to our blueprints, place the machinery thereon, furnish all help and facilities required. You are to promptly remove all obstacles to the complete performance of our contract, or compensate for any loss or delay resulting therefrom (interlined), 30 days also superintend foundation.
“The plant, when in proper condition and correctly installed, adjusted and handled, is guaranteed to develop the power as rated at our factory, when using satisfactory fuel as herein specified. Upon written demand, within 60 days from date of invoice, we will make a regular Proney brake test after the plant is properly installed, the purchaser to furnish all facilities, material and assistance, and if the engine develops the power as above mentioned, under the conditions herein specified, he is to pay the entire expense thereof. We aim to obviate such difficulties by allowing an ample surplus of power above the rating in all cases.
“Should there be any doubt in the mind of the purchaser that the material furnished is as represented herein, he must advise the Foos Gas Engine Company, at Springfield, Ohio, in writing, within 60 days from date of invoice, stating specifically and fully wherein it fails to fulfill the specifications, whereupon we shall have 60 days within which to fulfill same. No such complaint being received hereunder, or the continued use of such machinery after expiration of time mentioned, shall constitute acceptance thereof.
“Guarantee. This plant is guaranteed to deliver 125 brake H. P. 24 hrs. on 6744 lbs. of commercial lignite coal such as Hoyt, Rockdale, etc., and to pump 8,000 gallons of water per minute when operating on a 40' lift. The engine will not use more than 1/1000 gallons of lubricating oil per H. P. hour.
“It is understood that this contract covers the complete agreement; that no agent has any authority to obligate us by any terms not herein expressed, and no modification shall be binding, unless in writing, and approved by our home office at Springfield, Ohio.
“This agreement is subject to delays caused by fires, strikes, accidents or other causes beyond our control, and no liability is assumed therefor. Receipt of material constitutes a waiver of any claim for damages on account of delay.
“Respectfully submitted,
“The Foos Gas Engine Go.
“By O. W. Marlin, Sales Agent.”

Pursuant to said contract, the machinery was shipped and arrived at Altair, May 15, 1910. The machinery was installed and began pumping water some time between the 5th and 16th of July, evidence conflicting upon this point. The evidence was conflicting on the question of whether or not the plant produced the guaranteed 8,000 gallons per minute. While there is nothing in the contract which specifically fixes a time limit for the installation of the plant, the undisputed evidence shows that it was understood between the parties that it should be installed in time to irrigate the 800 acres for the year 1910.

The case was submitted ou special issues, which issues and the answers thereto are as follows;

“Special Issue No. 1: When was the contract between the Foos Gas Engine Company and the defendant Richolson approved by the said company? Answer: January 3, 1910.
“Special Issue No. 2; Do you or not find from the evidence that there was any unreasonable delay on the part of the Foos Gas Engine Company in installing the machinery embraced in the contract between said company and J. J. Richolson? Answer: We find that there was.
“Special Issue No. 3: If you have answered that there was any unusual delay in the installation of the machinery embraced in the contract between the Foos Gas Engine Company and Richolson, then you will answer whether or n-ot such unusual delay occasioned damage, if any, to the rice crop of defendant. Answer: We find that it did.
“Special Issue No. 4: Under the guaranty embraced in the contract between the Foos Gas Engine Company and defendant Richolson, the said company guaranteed that the plant described in said contract would pump 8,000 gallons of water per minute, continuously during pumping season, save ordinary and reasonable delay, when operated on a 40-foot lift, and in this connection, you will answer whether or not the said plant would pump the amount of water as guaranteed. Answer: W,e find that it would not.
“Special Issue No. 5: It is provided in the contract between the Foos Gas Engine Company, and defendant Richolson that, should there be any doubt in1 the mind of the purchaser that the material furnished is as represented in said contract, he must advise the Foos Gas Engine Company at Springfield, Ohio, in writing within 60 days from date of invoice; in this connection, you will answer whether or not the said Richolson did advise the Foos Gas Engine Company at Springfield, Ohio, in writing, within 60 days from the date of the invoice that the material was not as represented in said contract. Answer; We find that he did.
“Special Issue No. 6: Do you or not find from the evidence that the pumping plant furnished by the Foos Gas Engine Company, under the contract with J. J. Richolson, had the capacity to furnish sufficient water to the defendants upon the 500 acres planted in rice, which together with the rainfall during the season of 1910, would properly irrigate said land for the purpose of raising a crop of rice thereon during that year? Answer: We find that it did not.
“Special Issue No. 7: How much rice was raised and marketed by the defendants, or either of them, from the 500 acres of land during the season of 1910? Answer: We find 1,850 sacks of rice.
“Special Issue No. 8: If you have found that sufficient water was not, and could not, be pumped from the machinery furnished under the contract between the Foos Gas Engine Company and defendant Richolson', which, together with the rainfall during the season of 1910, could and would not produce an average crop of rice upon the 500 acres of land planted in rice during-that year by the defendants, then you will answer what would have been1 añ average crop of sacks of rice per acre upon the said 500 acres in 1910 if sufficient water had been furnished by the pumping plant, together with the rainfall, to raise such crop. Answer: We find that 15 sacks would have been an average yield in 1910.
“Special Issue No. 9: Do you or not find from the evidence that the actual crop which was raised and marketed from the 500 acres of land, which yon have found was actually raised and marketed, was of an inferior grade to what such rice would have been had sufficient water been furnished by the said plant, and at the proper time, if you find that such was not done? Answer: We find that it was of inferior grade.
“Special Issue No. 10: You will find from the evidence what was the market value on the railroad cars at Altair, Tex., of the rice which was actually raised on the 500 acres, at the time when it could and should have been marketed, in the year 1910. Answer: We find that such market value was $2.25 per sack.
“Special Issue No. 11: You will find from the evidence what was the market value at Altair, Tex., of the kind and quality of rice that you may find could and would have been raised and marketed in the 500 acres planted in rice by defendants, in 1910, at the time when such rice could and would have been marketed, if you found that other and different grades of idee could and would have been raised, had sufficient water been furnished by the plant, and at the proper time. Answer: We find that such market value was $8.50 per sack.
“Special Issue No. 12: Do you or not find from the evidence that at the time the plaintiff, the Southern Gas & Gasoline Engine Company acquired the note sued on herein by it, it had knowledge or notice that the pumping plant, in part payment for which said note was given, was not capable of producing the quantity of water which it was guaranteed to produce, if you have found that it was not capable, and that it was not properly installed so as to be capable of pumping the amount of water it was guaranteed to pump, if you find it was not so installed? Answer: We find that the Southern Gas & Gasoline Engine Company did have.
“Special Issue No. 13: If answering to other special issues which have been submitted to you, you have found that the defendants, or either of them, could and would have raised and marketed from the 500 acres of land, during the season of 1910, more rice than they did actually raise and harvest, had said defendants, or either of them, received the quantity of water which said plant was guaranteed to produce, if you have found that it did not produce the amount guaranteed, and if such water had been provided without delay in the installation of said plant, if you have found there was delay in such installation, and if said plant had been properly installed, if you have found it was so installed, then you will find from the evidence what additional expenditures the defendants, or either of them, would necessarily have made in order to cultivate, harvest, and market such additional crop, if any. Answer: We find that defendants would necessarily have incurred the additional expense of $2,260.00. '
“Special Issue No. 14: Do you or not from the evidence find that a flow of 8,000 gallons of water per minute would be sufficient to properly irrigate 500 acres of rice land situated as defendant’s land is situated, and with the season which prevailed during the year 1910, at and in the vicinity of this land? Answer: We find that it would.
“Special Issue No. 15: Was the plant capable of delivering 8,000 gallons of water per minute when operating on 40-foot lift continuously during pumping same and outside reasonable delay? Answer: No.
“Special Issue No. 16: Did or did not the plant pump sufficient water to irrigate 500 acres of land^ if water had been properly cared for and distributed without being wasted? In this connection you are charged that, even though you believe that the plant did not pump as much as 8,000 gallons per minute, yet if it did pump sufficient water, when properly distributed and cared for, to irrigate the defendant’s 500 acres of rice, then plaintiff and inter-vener would not be liable to defendant for any damages to his crop of rice. Answer: We find it did not.
“Snecial Issue No. 17: Do you find from the evidence that at the time of the execution of notes by defendant there was or was not a settlement made? Answer: We find that it was.
“Special Issue No. 18: If you believe from the evidence that at the time of the execution of notes sued on, there was a settlement between the plaintiff and intervener and defendant, then state if such settlement did or did not embrace the damages to rice crop, if any you find. Answer:-We find it did not.
“Special Issue No. 19: If from the evidence you believe defendant’s rice crop was damaged, you will answer: What do you find from the evidence caused the damage to the defendant’s rice crop? Answer: We find the cause to be the plant not being able to pump sufficient water.
“Special Issue No. 20: If from the evidence you find defendant’s nee crop was damaged, then you will answer the following question: Was or was not such damage caused by defendant’s failure to have and prepare the canals and laterals necessary to properly irrigate said rice crops? Answer: We find it was not.
“Special Issue No. 21: If you find defendant’s rice crop was damaged, you will answer this question: Do you find from the evidence that such damage was caused by the neglect of defendant or his agents or employés or inexperience of defendant, his agents or em-ployés? _ Answer: We find it was not.
_ “Snecial Issue No. 22: If you believe from the evidence defendant’s rice crop was damaged, you will answer this question: Was or was not defendant’s damage caused 'by the machinery being defective or its failure to pump the required number of gallons of water? Answer: We find it was.”

Opinion.

By the first, second, and third assignments, appellants urge that, the contract between Richolson and the appellant engine company having provided that by the receipt of the material and machinery any damages on account of delay was waived, it was error for the court to permit witnesses to testify to facts tending to show unusual delay in the shipment and installation of the machinery, and consequently error to submit the question as was done in special issues. It will be noted that the only question submitted by issues 2 and 3 is: Was there any unreasonable delay in the installation of the machinery? And the court nowhere submits the question of delay in delivering the machinery upon the ground as an element of damages, and clearly the latter is the meaning of the clause of the contract invoked, viz.:

“This agreement is subject to delays caused by fires, strikes, accident or other causes beyond our control, and no liability is assumed therefor. Receipt of the material constitutes a waiver of any claim for damages on account of delay.”

The language means delay in receipt of the machinery, and not in its installation; neither could the words “constitute a waiver of any claim for damages” in the connection used mean waiver of damages for failure of the plant to pump the warranted number of gallons of water per minute, and for failure to install in time for the season of 1910. •

The bill of exceptions is simply directed to the evidence of delay in delivery of the machinery upon the ground, and there is nothing in the pleading or the evidence adduced which would indicate that the appellees claimed, or expected to recover, any damages for injuries suffered by the crop prior to the date the machinery was delivered, but, on the other hand, both clearly show that if the machinery had been installed within a reasonable time after actual delivery, and had met the guaranty as to the supply of water, there would have been no injury to the crop, and, it may be added, the charge of the court clearly confined the jury .to the questions, delay in installation and whether it produced the water guaranteed.

The fourth is that the court erred in refusing to submit the following requested special issue: “How much damage or loss to the rice crop occurred prior to July 5, 1910?” The proposition being:

“The appellees having specially pleaded that their crop of rice had suffered because of the delay resulting from not shipping the machinery in 90 days from the date of approval of order, viz., January 3, 1910, and the evidence having shown and the jury having found that the crop had been damaged by reason of the delay in getting the water on the rice, it was material and necessary for the jury to find how much the crop was damaged by the delay', for if the appellants are correct in their construction of the contract that no damage can be recovered for delay in delivery, then the court should have had the damages arising after receipt and installation of the machinery on July 5th separated from the damage occurring prior to that time, in order that it might have a proper basis upon which to render judgment.”

If we are cofrect in our interpretation of the pleadings and evidence above, that there is no attempt to recover damages for delay in delivery, but only for delay in installation and capacity of the plant, the court did not err in refusing the issues submitted because the machinery was delivered May 15th, and there may have been damages suffered between that time and its installation, July 5th, by reason of unreasonable delay in installation, and, if so, the jury could properly have found for such.

The fifth is that the court erred in submitting special issues 1, 2, and 3, with reference to delay in installing the plant. The record shows that no bill of exceptions was reserved to the action of the court in submitting these special issues. Therefore the error, if any, was waived under the statute, 1913, but the answer to the assignment upon its merits is that the appellant contracted to install the plant in time for the crop year of 1910, and the facts indubitably show that the plant was never installed in accordance with the contract; therefore a charge of delay in installation is harmless.

As to the sixth, it was immaterial that the court did not give a charge explaining the meaning of “unreasonable delay”: First. Because in fact in this case there is no question that the delay was unreasonable. In fact, the evidence is conclusive that the plant was never installed so as to produce the water in accordance with the contract. Therefore, a charge, defining the term, could not have assisted the jury in any respect. Second. The appellants should have prepared and requested a proper charge in order for it to be reversible error. This they did not do. Shumard v. Johnson, 66 Tex. 70, 17 S. W. 398.

The seventh and eighth complain of the admission of testimony, over objection, to the effect that the plant was improperly installed. Appellee pleaded improper installation, and appellant pleaded that the plant was properly installed, but because of the negligence of the defendant, appellee fticholson, the plant was not put in operation until the 5th of July, at which time the plant operated successfully. The evidence was therefore admissible upon the issue as made by the pleadings.

The ninth charges error in submitting special issues No. 5 because the letter introduced in evidence did not comply with the provision in the contract with reference to notice of defects. Among other things in the letter introduced it contains the following statements:

“There seems to be something wrong with the whole outfit, as it will not start. * * * In our contract, I see it is necessary for me to notify you of any defects in the machinery in 60 days after the invoice; this seems unfair as I did not receive the engine until the middle of May and now I don’t know what the trouble is. So how can I toll what the defect is? I do know it won’t work or pump.”

This is certainly a sufficient compliance with the contract. It would seem to be unnecessary to give any notice, since the company had its agent upon the ground in act of installing the plant.

The tenth complains of the refusal to submit the following special issue requested by appellants:

“Did the defendant Rieholson execute the two notes sued on and the chattel mortgages securing same as being a final settlement agreed upon between himself and C. W. Marlin and O. A. Leavans, representing the plaintiff and intervener, whereby the defendant, Rieholson, accepted the plant as being according to the contract.”

The question was sufficiently submitted under special issues 17 and 18 copied above. The fact that the notes and mortgages were executed after the plant was installed might be evidence in the nature of a confession that the plant was as represented and warranted, but in no sense could it be a defense to an action of damages arising on account of its failure to produce 8,000 gallons of water or to meet the guaranty in any other respect.

The eleventh reads:

“The court erred in not entering judgment for the plaintiff Southern Gas & Gasoline Engine Company for the sum of $1,817.22, admitted by the defendants to be due the plaintiff on its note sued on, and in paying off said note due the plaintiff Southern Gas & Gasoline Engine Company in damages caused by a breach of the contract between the intervener, Foos Gas Engine Company, and the defendant Rieholson, there being no proper plea of failure of consideration, and no legal evidence of such failure of consideration upon which the court could base a judgment for failure of consideration, and it being clear that the refusal to enter the judgment in' favor of the Southern Gas & Gasoline Engine Company was the result of deducting the amount of its note from the damages found by the jury to have resulted from the breach of the written contract, to which the plaintiff was not a party.”

The pleadings and evidence are sufficient to require the court to submit the question of failure of consideration; therefore it was not error to refuse to enter judgment for appellants.

Assignment 18 y2 raises the same question and is overruled for the same reason.

The twelfth assignment is as follows :

“The court erred in permitting the witness L. P. Bunge to testify, over the objection of the plaintiff Southern Gas & Gasoline Engine Company that Mr. Marlin stated, in 1911, that, ‘as long as you keep Mr. Cook there, you ain’t goiqg to get no water,’ which was wholly irrelevant and immaterial, and could only serve to prejudice the jury against plaintiff and intervener.”

The appellants have not, by proposition or statement, indicated how this statement would or might have influenced the jury in arriving at an improper verdict; and, in view of the finding that the engine would not pump the amount of water guaranteed after different men had tried to make it do so, if error, it certainly was harmless.

It was not error to permit witness to testify that the general reputation of defendant Bunge was good as a farmer, because he was in charge of the crop. The appellants charged in its petition that the failure to raise a crop was due to negligence and lack of knowledge of how to take care of the canals and to place the water on the rice, and thus it became a vital question whether the man in charge was in fact capable to, and did properly, care for the crop.

The fourteenth:

“The court erred in permitting the witnesses Richolson and Bunge to testify, over the objection of plaintiff and intervener, with reference to the facts concerning- the defendant Bunge’s one-half of said crop, and any damages thereto, because neither plaintiff nor intervener were in any manner bound or under any legal liability to the defendant Bunge by reason of the contract' entered into between the intervener and the defendant Richolson, and the defendant Bunge was without any right to recover on said contract, he not having been a party thereto, all of which is shown by plaintiff and intervener’s bill of exception.”

There is no pleading to support this defense. It clearly appearing that the item of damages to Bunge was contemplated, or should have been, by the warranty that the plant would furnish water for 800 acres of land, and the evidence clearly showing that the plant was to be installed in time for 1910 crop, and that the 300 acres for which Bunge claims loss was a part of the S00 acres to be and was - planted, it was not error to permit the witnesses to testify as they did. Southern Gas & Gasoline Engine Co. v. Peveto, 150 S. W. 279.

The fifteenth assignment raises the question of limitation of the claim of Bunge against Richolson; for that reason Bunge cannot recover; could only be raised by Richolson. Columbia, etc., v. Strawn, 93 Tex. 48, 53 S. W. 342. The other questions suggested in the assignment make it multifarious, but they are disposed of by what is said under the fourteenth.

The sixteenth charges that the court erred in refusing to submit the following special issue requested by the plaintiff:

“Did the intervener Foos Gas Engine Company forbear bringing suit and foreclosing its note falling due on November 15, 1910, because of the promises of the defendant Richolson to* pay the note, as evidenced by his letters to the intervener introduced in evidence?”

Submitted as a proposition. We fail to see how an affirmative answer to the question could affect the judgment of the court. That Richolson secured the payment of the purchase price did not estop him from recovering damages for the failure of the machinery to meet the written contract of guaranty.

The seventeenth is:

“The court erred in refusing to submit the fourth issue or question requested by plaintiff and intervener, reading as follows: ‘Did the defendant Richolson, by reason of his promises after November 15, 1910, to the plaintiff and in-tervener to pay his notes, get the benefit of the chance to sell his entire tract of land, together with the plant and the use of the plant, for the purpose of trying to raise a crop for the year 1911?’ ”

As held under the sixteenth assignment, we fail to see how the promise to pay, or even payment of, the purchase price of the pumping plant would estop the appellees from claiming damages for loss of crops by reason of the defect in the machinery and delay in its installation, and appellant has not, by proposition, pointed out how an es-toppel takes place. Such acts certainly cannot be such representations as would cause the appellants to act upon those to their detriment in a future suit for damages for loss of crops occasioned by defects and delay.

If we understand the eighteenth assignment, it is to the same effect, and is overruled for the same reasons.

The nineteenth urges that the verdict of the jury is contrary to the law and the evidence for the reasons asserted in the former assignments. Is overruled for the reasons assigned under the several assignments as discussed above.

Being no error in the record, the judgment is affirmed.
      <@=>For other cases see same topic and KEYrNUMBER in all Key-Numbered Digests and Indexes

      @u=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: JENKINS, J.

license: Public Domain

text:
    TAYLOR FEED PEN CO. et al. v. TAYLOR NAT. BANK.
    (No. 5468.)

    (Court of Civil Appeals of Texas. Austin.
    Oct. 20, 1915.
    Rehearing Denied Dec. 22, 1915.)
    1. Injunction @==>70 — Rights of Stockholders—Ultra Vires Acts.
    The stockholders of a corporation may restrain it from engaging in enterprises beyond the purposes or manner provided by its charter, since it is in fact only their business agent with a limited authority and has contracted with them to spend their money only as provided, in the charter.
    [Ed. Note — Por other cases, see Injunction, Cent. Dig. 136, 137; Dec. Dig. @=>70.)
    2. Corporations @=>388 — Public Corporations — Ultra Vires Acts — Estoppel.
    The doctrine of estoppel of a corporation to plead its ultra vires act as a defense in an action on an obligation incurred thereby does not apply to public corporations, since, where the public is interested, assent of the stockholders is of no avail in permitting corporate acts beyond the powers.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1567; Dee. Dig. @=>388.)
    3. Corporations @=>388 — Powers — Ultra Vires Acts — Rights op Stockholders.
    In an action between a corporation or its stockholders and third parties, the corporation is estopped to plead its ultra vires acts the same as if it were a natural person, where the public has no interest in the litigation, except that the doctrine of estoppel does not apply where the act is one which the corporation could not do under any circumstances.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1567; Dec.. Dig. @=>388.) .
    4. Corporations @=>370 — Powers op Corporations — Implied Powers.
    The powers of a corporation are not restricted to those expressly conferred by its charter, but include as necessary all those powers which are appropriate.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1511-1518; Dec. Dig. @=>370.)
    5. Corporations @=>460 — Powers op Corporation — Implied Powers — Borrowing Money.
    The implied powers of a private trading corporation include that of borrowing money and giving security therefor.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. § 1813; Dee. Dig. @=>460.)
    6. Corporations @=388 — Powers—Borrowing Money — Purpose.
    A corporation whose declared purpose was to buy, feed, and sell cattle, which borrowed money and executed a mortgage to secure it, and used the money for another purpose, acted within its power, though it acted wrongfully, so that it was estopped thereafter to deny liability in an action by the lender for its recovery.
    [Ed. Note. — For other'cases, see Corporations, Cent. Dig. §§ 1556-1567; Dec. Dig. @=>388.)
    7. Corporations @=388 — Corporate Debts— Liability op Stockholders.
    Where all the stockholders in a corporation assent to the borrowing of money for a wrongful purpose and to the execution of a mortgage to secure it, the corporation is liable as the aggregation of its stockholders.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1567; Dec. Dig. @=388.)
    8. Corporations @=388 — Corporate Debts— Assent of Stockholders — Evidence.
    Where one individual owned all but two shares of stock in a corporation, the other two shares being given by him with the intent that they should be retransferred to him, so that the purported stockholders had no interest in fact in the business, and where one of such stockholders and the principal owner consented to the giving of a mortgage to secure a loan and the other stockholders became such after the securing of the loan, the doctrine fixing liability of the corporation for the debt on assent of all its stockholders was applicable.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1569; Dec. Dig. @=388.)
    9. Corporations @=>388 — Ultra Vires — Es-toppel.
    A corporation which receives the consideration for a mortgage and retains it without offer to return it or which by retaining it destroys its value, receives a consideration for the mortgage, so that it is thereafter estopped to plead ultra vires.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1567; Dec. Dig. @=388.)
    10. Corporations @=388 — Powers—Actions —Estoppel.
    Where a corporation borrows money and gives its mortgage therefor, it cannot in order to defeat the mortgage thereafter allege that the mortgagee was in pari delicto with it, knowing that it acted wrongfully and without its express powers, where the contract was fully executed by the mortgagee, especially under the rule that the mortgagee knew that the mortgagor could bind itself if all of its stockholders assented.
    [Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 1556-1567; Dec. Dig. @=388.)
    11. Homestead @=31 — Residence — Necessity.
    While actual residence is not necessary to fix the homestead character upon land, the mere intention to occupy land in the future as a homestead, unaccompanied by affirmative acts evidencing the intention, is insufficient to create a homestead.
    [Ed. Note. — For other cases, see. Homestead, Cent. Dig. § 39; Dec. Dig. @=>31.)
    Appeal from District Court, Williamson County; C. A. Wilcox, Judge.
    On petition for rehearing.
    Rehearing granted, and judgment of trial court affirmed.
    Former opinion (177 S. W. 176) withdrawn.
    White, Cartledge & Graves, of Austin, and Wilcox & Graves, of Georgetown, for appellant. H. C. Mantor, of Taylor, and Batts & Brooks, of Austin, for appellee.

      Writ of error pending in Supreme Court.

   Findings of Fact.

JENKINS, J.

1. Appellant’s charter was died with the Secretary of State July 5, 1910. The declared purpose of said corporation was to buy, feed, and sell cattle. Its capital stock was stated to be 90 shares of $100 each, fully paid up.

2. The only consideration received by appellant for its capital stock was a deed to the land in controversy from F. E. Ripley and wife. The market- value of the land at the time was $9,000.

3. F. E. Ripley, by virtue of the execution of said deed, was entitled to all of the stock of said company; but, in order to comply with the statute requiring at least three stockholders to organize a corporation, he gave to E. B. Martin and J. B. Wills each one share of said stock, and they were named in the charter as directors.

4. There was never any part of said stock issued, never a meeting of the stockholders, no election of officers, and said corporation never transacted any business, except to execute the notes and mortgages hereinafter mentioned, and to collect from the assignee in bankruptcy of the Taylor Oil Works its pro rata portion of the debt assigned to it by appellee.

5. S. E. Ripley owned $15,000 of the stock of the Taylor Oil Works and was its general manager upon a salary of $300 per month. He was not personally liable on the indebtedness of the Oil Works for the debt for the payment of which the money was borrowed by appellant, but he was personally liable upon other debts owing by said oil works to the amount of about $45,000, and the oil works was indebted to him to the amount óf from $40,000 to $50,000. The $6,500 paid with the money borrowed by appellant was due appellee by the oil works on open account, but was amply secured by a mortgage on the property of the oil works. Appellee desired said debt paid, in order to reduce the amount owing by the oil works within the amount which it was permitted by the national bank law to loan to one person. Ripley was anxious to pay the $6,500 to appel-lee, but could not borrow the money except by mortgaging the land in controversy, which he offered to do; but, having stated to ap-pellee that it was his homestead, appellee declined to take a mortgage thereon. It was thereupon agreed between appellant and ap-pellee that Ripley would obtain a charter for a feed pen company, deed the land to the corporation for its capital stock, and that the corporation would borrow the money from appellee, execute a mortgage on said land to secure the same, and pay said money on the open account indebtedness of the oil works to appellee. This was done; that is to say, on July 26, 1910, appellant executed to appellee a note for $6,500, and a deed of trust on the land in controversy to secure the same. March 6, 1911, said note being unpaid, it executed a renewal note for said amount with the interest added, and executed another deed of trust on said land to secure the same.

6. In order to comply with the statute requiring at least three stockholders in order to obtain a charter, Ripley requested E. B. Martin and J. B. Wills to join him in the application for the charter, stating that they were each to be the owners of one share of stock of the par value of $100, but that the same would be paid for by him. They consented to this and were named in the charter together with Ripley, as directors.

7. Prior to the execution of said note and mortgage, Ripley and Martin signed what in terms was a written resolution of the board of directors of the Taylor Peed Pen Company authorizing the execution of the note and mortgage. Wills was temporarily absent at the time.

8. Upon the execution of the note and mortgage by appellant, appellee placed $6,-500 to the credit of appellant, which amount appellant immediately had transferred to the credit of the oil works, and the oil works was credited with that amount on its indebtedness to appellee. The oil works charged itself on its books with that amount in favor of appellant, and said charge was so carried on the books of the oil works up to the time it became bankrupt.

9. Subsequent to the execution of said note and mortgage, the oil works was adjudged a bankrupt; just when this occurred, the record does not show; and Ripley, for appellant, filed its claim for $6,500 and was paid its pro rata share of the estate of said bankrupt, which was $390. This money has never been tendered by appellant to appellee.

10. Appellant filed this suit to cancel its note and mortgage to appellee, alleging that said mortgage constituted a cloud upon its title. The original' petition is not in the record, and it does not appear when it was filed, further than that appellees’ original answer, which was filed November 5, 1912, alleges that the original petition was filed in 1912.

11. Appellee, in addition to a general demurrer, a general denial, and a plea of es-toppel, filed a cross-action to recover on the note and to foreclose the mortgage.

12. Mrs. Willie Ripley, wife of F. E. Ripley, intervened, and claimed the land in controversy as her homestead. Her husband refused to join her in such intervention.

13. The case was tried by the court without a jury, and judgment was rendered that the appellant and the intervener take nothing by their suits, and that appellee recover upon its cross-action.

14. As to the homestead claim of inter-vener, we find the following facts: In January, 1901, F. E. Ripley, the husband of the intervener, purchased 320 acres of land, of which the land in controversy is a part. He owned no homestead at the time and has not since acquired one. He intended at the time of the purchase to establish his home on some portion of this tract whenever he felt able to build such a house as he desired, and he had not abandoned that intention when the mortgage to appellee was executed. Subsequently, he sold all of said tract except the 58.42 acres in controversy. When he deeded this land to the appellant, he expected it to deed it back to him in consideration of the surrender of his stock, as soon as the note here in question was paid. The intervener and her husband had frequently gone over the land and had tentatively selected several places as suitable for a building site when they were able and ready to build, but otherwise they had done nothing to dedicate the land to homestead purposes. They have never resided on the land or any part thereof.

Opinion.

In our former opinion herein (177 S. W. 176) we held, in effect, that a mortgage executed by a corporation to secure the debt of another corporation in which it had no interest, which debt was not incurred for its benefit, and the payment of which did not inure to its benefit, was ultra vires. We have no doubt as to the correctness of this holding, where there are no qualifying or limiting facts which would estop the corporation; but, upon further consideration, we have concluded that we fell into error in applying this doctrine to the facts of this case, for which reason our former opinion is withdrawn, and this opinion is substituted in lieu thereof.

The doctrine of ultra vires was invented by the courts (Bell v. Kirkland, 102 Minn. 213, 113 N. W. 271, 13 L. R. A. [N. S.] 795, 120 Am. St. Rep. 621), and, in a proper case, we think that it is a salutary one. For instance, a public corporation whose only function is governmental, and that derives its revenues from taxation, ought not to be permitted to engage in enterprises beyond the scope of its authority; neither should a public service corporation be permitted by contract to deprive itself of the power to discharge the duties which by the charter that gave it existence it owes to the public. Again, it is held, and we think properly so, that a corporation cannot be compelled to perform a contract which it had no capacity to make under any circumstances. This for the reason that every one is charged with constructive notice of the provisions of charters, which are public documents, or granted under the provisions and limitations of general statutes, as is the case with municipal corporations in this state.

As to private corporations created for business purposes, the doctrine of ultra vires has been so limited by applying to them the doctrine of estoppel as to almost destroy it. This has arisen from necessity brought about by modern conditions, and in order to avoid injustice being done. The original common-law conception of a corporation was a body politic for municipal, ecclesiastical, or eleemosynary purposes; but it has been extended, especially in recent times, until it embraces practically every known form of business enterprise. Why should those artificial persons be permitted to repudiate their contracts to the detriment of third parties, where natural persons are not permitted to do so ? There is no want of mental capacity, as is the case with minors; but, on the contrary, they are usually managed with business sagacity.

As to public and quasi public corporations, the reason is as above stated; in suits by stockholders against the corporation, they are permitted to restrain the corporation from engaging in enterprises except for the purposes and in the manner provided by its charter, for the reason that the corporation is their business agent with limited authority, and has in effect contracted with them that it will not use their money, which was paid into its treasury for its stock, except as provided in the charter.

The foregoing observations are sustained by numerous authorities, some of which we cite in subsequent portions of this opinion.

The reasons why a corporation may be held not to be liable on an ultra vires contract is: (1) The interest of the public that a corporation shall not transcend the powers granted. (2) The interest of the stockholders that capital shall not be subjected to risks of enterprises not contemplated by its charter, and therefore not authorized by its stockholders in subscribing for the stock. (3) The obligations of every one entering into a contract with a corporation to take notice of the legal limits of its powers. McCormick v. Bank, 165 U. S. 538, 17 Sup. Ct. 433, 41 L. Ed. 821, 7 R. C. L. 673.

If the corporation is a public one, the doctrine of estoppel will not apply. Platter v. Board of Com’rs, 103 Ind. 360, 2 N. E. 544; 1 West. 246; Turnpike Co. v. Board of Com’rs, 72 Ind. 239. When the public is concerned to restrain a corporation within the limits of a power given to it by its charter, assent by the stockholders to the use of unauthorized power by the corporation will be of no avail. Kent v. Mining Co., 78 N. Y. 185; Sheldon Co. v. Eickemeyer Co., 90 N. Y. 607.

When the suit is between a corporation or its stockholders and third parties, the general rule is that the corporation may be es-topped the same as natural persons. 7 R. C. L. 593; 2 Story, Eq. Jur. § 1539; Merchants’ Bank v. State Bank, 77 U. S. (10 Wall.) 604, 19 L. Ed. 1008; Ditch Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300; Bell v. Kirkland, supra, 102 Minn. 213, 113 N. W. 271, 13 L. R. A. (N. S.) 796, 120 Am. St. Rep. 621; Railway Co. v. Flannigan, 113 Ind. 496, 14 N. E. 370, 3 Am. St. Rep. 674. This is not a suit by the state nor by stockholders to restrain the corporation from doing an unauthorized act, and the public has no interest in the result of this litigation.

The exception to the general rule that a corporation will not be estopped where the suit is between it or its stockholders and third parties is where the act is ultra vires in its strict sense; that is to say, not merely one which it ought not to have done for the reason that the same constituted an abuse of its power, but one which for lack of capacity it could not do under any circumstances, and therefore could not ratify. Transportation Co. v. Pullman Co., 139 U. S. 24, 11 Sup. Ct. 478, 35 L. Ed. 55; Bank v. Globe Works, 101 Mass. 57, 3 Am. Rep. 322; B. & L. Ass’n v. Bank, 181 Ill. 35, 54 N. E. 619, 64 L. R. A. 403, 72 Am. St. Rep. 245; Bell v. Kirkland, supra, 102 Minn. 213, 113 N. W. 271, 13 L. R. A. (N. S.) 796, 120 Am. St. Rep. 621. Where the contract is not ultra vires in the sense of a want of capacity, this exception does not apply. Bank v. Globe Works, supra.

The first question which presents itself is: Were the acts of appellant in borrowing the money from appellee, and in executing the note and the security therefor, beyond its corporate powers? ■ That is, was it without capacity to do said acts under any circumstances? The question must be answered in the negative.

A corporation is not restricted to the exercise of those powers expressly conferred upon it by its charter, but has certain well recognized, implied powers which are necessary to carry out the powers expressly granted. These implied powers are not restricted to those that are indispensably necessary, but comprise all that are necessary in the sense of being appropriate. 7 R. C. L. 528, 529; Grommes v. Sullivan, 81 Fed. 45, 26 C. C. A. 320, 43 L. R. A. 425; Railway Co. v. Howard, 74 U. S. (7 Wall.) 392, 19 L. Ed. 121.

Among the implied powers of a private trading corporation is that of borrowing money and giving security therefor. Boone v. Gas Co., 118 Ky. 588, 81 S. W. 928; Railway Co. v. Howard, supra; note to B. & L. Ass’n v. Bank, 11 L. R. A. 845, 846 ; 7 R. C. L. 593; Wright v. Hughes, 119 Ind. 328, 330, 21 N. E. 907, 12 Am. St. Rep. 412; State Board v. Railway Co., 47 Ind. 407, 17 Am. Rep. 702.

It cannot be doubted that had appellant borrowed money to be used in buying or feeding cattle, which was the declared purpose of its charter, and had executed a mortgage on its land to secure the same, the contract would have been enforceable. It did borrow the money. That it used it for a purpose other than that contemplated by its charter does not show that it did not have the power to borrow the money, but only that it used such power for a wrong purpose. If a corporation has the power to do a given act for a proper purpose, it is immaterial that it used it for an improper purpose. Bradley v. Ballard, 55 Ill. 413, 8 Am. Rep. 657. This is precisely the case where a corporation will be estopped, under a proper state of facts, to plead ultra vires. What are those facts as applicable to the instant case?

First. A corporation will he estopped to plead ultra vires to an act within the general scope of its powers where all of its stockholders assented to such act. Insurance Co. v. Barber, 67 Neb. 644, 93 N. W. 1024, 60 L. R. A. 927, 928, 108 Am. St. Rep. 716. The reason for this is that, although by fiction of law a corporation is an entity separate and apart from its stockholders, and as such has the legal title to the corporate property, “equity will not forget that the stockholders are the real and substantial beneficiaries of a recovery,” and, “if the stockholders have no standing in equity, * * * the corporation will not be permitted to recover.” Insurance Co. v. Barber, supra.

If all of the stockholders in the instant case had obtained the loan in their individual capacity, and had executed the mortgage upon their property to secure the same, of course, it would be enforceable against them. If they assented to such transaction prior thereto, in equity, they stand upon the same footing as if it was their individual transaction, and the corporation in such case will be treated simply as the aggregation of its stockholders. Morawetz on Private Corporations, vol. 1, § 1, in discussing corporations as separate entities, says:

“In most cases this is just as well as a convenient means of working out the rights of the real persons interested. However, it is essential to a clear understanding of many important branches of the law of corporations to bear in mind distinctly that the existence of a corporation independently of its shareholders is a fiction, and that the rights and duties of an incorporated association are in reality the rights and duties of the persons who compose it, and not of an imaginary being.”

See, also, the same author, section 227, and Donovan v. Purtell, 216 Ill. 629, 75 N. E. 334, 1 L. R. A. (N. S.) 176, and note to that case; Gas Co. v. West, 50 Iowa, 25; Martin v. Mfg. Co., 122 N. Y. 172, 25 N. E. 303 ; 7 R. C. L. 27.

We think that the doctrine that the previous assent of all of the stockholders will bind the corporation might well be applied to this case upon the theory that F. E. Ripley was the real owner of all of the stock of the feed pen corporation. He organized said corporation for no other purpose than to carry into effect the transaction here involved; he paid for all of the capital stock by transferring the land in question to the corporation. In order to comply with the statute, he nominally gave to Martin and Wills one share each; no stock was ever issued to them, nor intended to be so issued; the corporation never transacted any business named in its charter, and never intended to do so; it was the intention, upon the payment of the note involved herein, to recon-vey the land to Ripley, we think evidently without Ripley’s paying anything to Martin or Wills for their stock, which, together with the Ripley stock, would have been surrendered as a consideration for such reconveyance, in which event it was intended that said corporation should cease to exist. This tends strongly to show, to say the least of it, that the incorporation of appellant was but a method resorted to by Ripley to transact his own business. In reply to an inquiry in the bankruptcy proceedings as to the feed pen corporation, Ripley said, “That is me,” and we think this was true. Pott v. Schmucker, 84 Md. 535, 36 Atl. 592, 35 L. R. A. 392, 57 Am. St. Rep. 415; Swift v. Smith, 65 Md. 428, 5 Atl. 534, 57 Am. Rep. 336.

However, it is not necessary to rest this case on this assumption, and, as the trial court made no specific finding in reference thereto, we do not do so; but we think that the judgment of the trial court should be affirmed upon the assumption that all of the stockholders, including Martin and Wills, assented to the transaction here involved. The trial court so found, and, while there is no direct testimony to sustain such finding, we cannot say that there was no evidence upon which to base such finding. On the contrary, we think that such finding is a reasonable, if not the only reasonable, eonclnsion at which the court could have arrived from all of the circumstances in evidence. There can be no question as to the assent of Ripley and Martin, inasmuch as they signed a resolution authorizing the transaction, and we think it improbable that the purpose of the corporation to sign the note and mortgage was not explained to Wills, and that he did not assent thereto when he agreed to become a director therein for the accommodation of Ripley.

Second. We think the judgment of the trial court should be affirmed for the reason that appellant, having received a valuable consideration for the execution of the note and mortgage, and not having tendered back the same, is estopped to plead ultra vires. Railway Co. v. Gentry, 69 Tex. 632; B. & L. Ass’n v. Bank, supra; Hitchcock v. Galveston, 96 U. S. 341, 24 L. Ed. 662; McCormick v. Bank, supra; Lumber Co. v. Rice, 23 Ind. App. 586, 55 N. E. 868; Insurance Co. v. McClelland, 9 Colo. 18, 9 Pac. 771, 59 Am. Rep. 134; 7 R. C. L. 594; Railway Co. v. Doerkes, 103 Ind. 525, 3 N. E. 239; Railway Co. v. Flannigan, 113 Ind. 495, 14 N. E. 370, 3 Am. St. Rep. 674; Wright v. Hughes, supra; 7 R. C. L. 677.

In B. & L. Ass’n v. Bank, supra, the court said:

“We think the authorities are abundant to show that the corporation is estopped from alleging a want of power to borrow the money in question without offering to refund the money already advanced and used for” its benefit — and so think we in this case.

If it be said that it did not use the money for its own benefit, but for the benefit of ap-pellee, it may be answered that it received from appellee $6,500, no part of which it has repaid or offered to repay; it received from appellee the transfer of a debt on the oil works for that amount, which it has not re-conveyed nor offered to reconvey. What this debt was worth to appellant at the time it was assigned to it is not made to appear, but presumably it was worth its face value, as it is not made to appear that the oil works was then insolvent. But it does appear that this debt was then worth its par value to appel-lee, inasmuch as it had ample security therefor. If a party be permitted to repudiate a contract, he must do so in toto, by offering to put the other party in statu quo. This appellant has placed it beyond its power to do. By its delay in collecting this debt, or returning same to appellee, it has become comparatively worthless. In Zabriskie v. Railway Co., 64 U. S. (23 How.) 381, 16 L. Ed. 497, the court quoted with approval from the Supreme Court of Ohio, to the effect that corporations should be prompt and diligent in the exposure of illegality or abuse in the employment of their corporate powers, and will be denied relief where mischief has been done by their delay. See, also, Chapman v. Railway Co., 6 Ohio St. 137; Camden Co. v. Mays Co., 48 N. J. Law, 530, 7 Atl. 523.

“The plea of ultra vires should not, as a general rule, prevail, whether interposed for or against a corporation, when it would not advance justice, but, on the contrary, would accomplish a legal wrong.” Lumbering Co. v. Portland, 18 Or. 21, 22 Pac. 536, 6 L. R. A. 297; Railway Co. v. McCarthy, 96 U. S. 258, 24 L. Ed. 695; Bell v. Kirkland, supra; Raft Co. v. Roach, 97 N. Y. 381.

To allow the plea of ultra vires in the instant case would be, not only to deny to ap-pellee the right to collect the money that it loaned to appellant, but also to deprive it of the value of the debt on the oil works, which it assigned to appellant, and which has became almost worthless by appellant’s delay.

But, in addition to the fact that appellant has not tendered back to appellee the debt which was assigned to it, it has appropriated the proceeds of said debt to its own benefit. It filed its claim in bankruptcy against the oil works, collected the full amount paid on said debt, viz., $390, and did not tender that amount to appellee. It is true that Ripley testified that he was willing to pay this amount to whoever might be entitled to receive it, but no such tender was pleaded in this ease.

It may be suggested that appellee is in pari delicto with appellant, inasmuch as it knew that appellant intended to use the money borrowed for a purpose not contemplated by its charter, and that it received such money in payment of a debt owing to it by another corporation. This can make no difference in so far as appellant’s suit to cancel the note and mortgage is concerned. Appellant cannot make its own wrongful act a weapon of offense. Nor do we think that this constitutes a valid ground of objection against the action of the court in rendering judgment for appellee on its cross-action. The contract had been fully executed by appellee, and, the contract not being one beyond the power of appellant to make under any circumstances, it could not resist compliance on its part. But, aside from this, though it is true that appellee was charged, as matter of law, with knowledge of the provisions of appellant’s charter, it also knew, as a matter of law, that appellant could bind itself by the contract entered into, if all of its stockholders had previously assented thereto. We think that appellee was justified in presuming such assent, under all the circumstances of the case, if it did not have actual knowledge thereof.

We do not think the case of Deaton Grocery Co. v. Harvester Co., 47 Tex. Civ. App. 267, 105 S. W. 556, cited by appellant, contravenes the doctrine announced in this opinion. In that case it was not made to appear that Deaton, the general manager of the grocery company, had actual or implied authority to indorse the notes sued on, the same being an accommodation indorsement, nor that the board of directors had authorized such in-dorsement, nor that the stockholders had assented thereto, nor that the stockholders or the corporation had received any consideration therefor. In addition to this, it was not made to appear that the corporation did not have other creditors whose interests might have suffered by holding the grocery company liable. We believe that these facts differentiate that case from the instant case.

The trial court found that the sole consideration for the execution of the deed from Ripley and wife to appellant was the issuance of its capital stock to Ripley and its agreement to execute the note and mortgage in question, and concluded, as a matter of law, that appellant could not repudiate such contract while holding the land. While the evidence sustains such finding of fact, we think it immaterial for the reason that this is not a suit by the parties to such contract. Ripley, the beneficiary of said contract, is not seeking to enforce it; on the other hand, he is shown to be more than willing to have the appellant repudiate its said agreement.

We affirm the judgment of the trial court as to the intervener. While actual residence is not necessary under all circumstances to fix the homestead character upon land, a mere intention to occupy land some time in the future as a homestead, unaccompanied by any act clearly evidencing such intention, is not sufficient to attach to such land the homestead character. Wiseman v. Watters, 142 S. W. 134; Cameron v. Gebhard, 85 Tex. 610, 22 S. W. 1033, 34 Am. St. Rep. 832; Town Co. v. Griggs, 93 Tex. 456, 56 S. W. 49; McDowell v. Northcross, 162 S. W. 16; Parker v. Cook, 57 Tex. Civ. App. 234, 122 S. W. 422; Parson v. McKinney, 133 S. W. 1085.

By the word “appellant,” as used herein, is meant the Taylor Peed Pen Company. The intervener also appealed from the judgment of the trial court.

Por the reasons stated, we grant appellee’s motion for rehearing, set aside our former judgment herein, and in all things affirm the judgment of the trial court.

Rehearing granted, and judgment of the trial court affirmed.
      ifcoFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

      ^»Por other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HUFF, C. J.

text:
    BROWN v. CRUMPTON.
    (No. 875.)
    (Court of Civil Appeals of Texas. Amarillo.
    Dec. 11, 1915.
    Rehearing Denied Jan. 12, 1916.)
    Judgment <g=>721 — Conclusiveness — Mat-tbbs Concluded.
    Defendant and others contracted with plaintiff’s assignor to pay him $50,000 if he secured construction of a railroad through the county. Plaintiff’s assignor contracted with the railroad company whereby in consideration of $50,000 it undertook to build the railroad. Por the purpose of securing payment of the bonus a number of citizens who guaranteed payment to the railroad company organized a subcommittee, which took into their possession notes that had already been executed, holding them as trustees for the guaranty committee. These notes had already been given to secure payment to plaintiff’s assignor of the amount promised. The railroad was built, and, suit being brought by the railroad company against the guarantors, it was agreed that the company should return the contract in consideration of the guarantors procuring judgment in favor of the railroad company in a suit pending against it by plaintiff’s assignor. The notes held by the guaranty committee, among which was one executed by defendant, were then indorsed over to plaintiff and duly assigned. Held, that the judgment in favor of the guarantors was not an adjudication against defendant’s liability on his note.
    [Ed. Note. — Por other cases, see Judgment, Cent. Dig. §§ 1238, 1252; Dec. Dig. <®=>721.]
    Appeal from Dawson Oounty Court; George W. Poster, Judge.
    Action by C. E. Brown against J. S. Crump-ton. Prom a judgment for defendant, plaintiff appeals.
    Reversed and remanded.
    G. E. Doekhart, of Tahoka, and Ferguson & Puckett, of Lubbock, for appellant. J. S. Crumpton, of New Boston, for appellee.
   HUFF, C. J.

This suit was instituted by

Brown, as assignee on a note executed by Crumpton for $300 to T. J. O’Donnell, and transferred by O’Donnell down to Brown. The answer admits the execution of the note, and alleges that the consideration therefor was to aid the citizens: of Dawson county to raise $50,000 as an inducement to the Santa Fé Railroad Company to construct and operate a railroad into Lamesa; that 25 citizens, one of whom was Crumpton, executed a written guaranty for said amount; that the notes of the subscribers, of which the note sued on was one, were delivered to Mit Aiken, J. P. Barron, and R. E. Simpson, as trustees for collection and to compensate or secure the guarantors for such payment as might be requited in excess of their respective subscriptions, and appellee denied the authority of the trustees to transfer the notes to O’Donnell. It was also alleged that the Santa Pd had instituted a suit against the guarantors for the sum guaranteed by them, and that the suit was settled by a compromise judgment, it is alleged, the effect of which was to cancel the note sued on and all others. The judgment attached to the answer simply shows a suit by the railroad company against' the guarantors and that there was an agreement between the parties thereto to dismiss the same, which appears to have been done upon the consideration that the then condition of the people of Dawson county was such that it was not the desire of the railway company to force collection on the contract, and it was agreed to return the contract sued on to the guarantors, etc. The judgment also shows that T. J. O’Donnell had a suit then pending in the district court of Nolan county against the Pecos & North Texas Railway Company, and that the defendant guarantors had agreed to procure a judgment to be entered in said cause in Nolan county in favor of the railway company therein, and that the plaintiff, O’Donnell, therein should take nothing against the railway company.

The appellant herein, plaintiff below, replied by supplemental petition that during the year 1909 the citizens of Lamesa and Dawson counties entered into a contract with T. J. O’Donnell, in which they obligated themselves to pay O’Donnell $50,000 in the event he procured the construction of the road by the time specified therein, and that O’Donnell entered into a contract with the railway company for the consideration of $50,000 in which the road undertook to build the railway as agreed by him with the citizens, and for the purpose of securing said sum about 29 citizens guaranteed the payment of said sum and organized a subcommittee, composed of Mit Aiken, J. F. Barron, and R. E. Simpson, who were to take the notes in their possession which had already been executed and hold the same as trustees for the guaranty committee; and the plaintiff further denied that any contract was ever made except that the defendant was to pay the full amount of the note. It is substantially alleged that the railroad sued the guaranty committee in Dawson county, and O’Donnell sued the railroad in Nolan county; that the guaranty committee in the suit and by the judgment agreed to obtain a discharge of the railroad in the Nolan county suit from the claim of O’Donnell; that that case was dismissed upon an agreement that all the notes, together with the one sued on, should be delivered to O’Donnell by the subcommittee in consideration of the release of the guaranty committee on their contract, and the note sued on was so transferred. The judgment agreement in the Nolan county suit is not set up by the answer. The judgment set up in this case as res adjudicata is not an adjudication of appellee’s liability on the note sued on, but only the adjudication of the liability of the guarantors on the guaranty contract. Gaines v. Brown, 177 S. W. 220. The note had been executed to procure the road. The road, so far as the pleadings show, was constructed according to contract. The guarantors were no longer liable on the guaranty contract by reason of the judgments rendered in Dawson and Nolan counties, and hence the purpose of holding the notes in trust to secure the guarantors in their undertaking was no longer required, and they agreed, according to the allegations, to return the notes to O’Donnell, the payee therein, who thereby became the owner and holder thereof. The trial court in this case was not warranted in sustaining a general demurrer rendering judgment as upon confession as to the truth of the allegations alleged in the answer. The supplemental petition of appellant was in its nature a confession and avoidance, which, if true, gave appellant a right of recovery upon the note.

The case will be reversed and remanded.
      <gc=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and indexes


author: FLY, C. J.

text:
    SAN ANTONIO & A. P. RY. CO. et al. v. McCAMMON.
    (No. 5566.)
    (Court of Civil Appeals of Texas. San Antonio.
    Dec. 22, 1915.
    Rehearing Denied Jan. 10, 1916.)
    1. Judgment <@=>256 — Support by Verdict.
    In a suit against railroads and the receiver of one of them for damages to plaintiff’s lands from defendants’ failure to provide proper and necessary sluices and culverts in their roadbeds for the drainage of surface water between them, where the jury found against each of the railroads in the sum of $546, no mention being made of the receiver, judgment against the receiver was improper; the verdict being in his favor by reasonable implication.
    [Ed. Note. — For other eases, see Judgment, Cent. Dig. §§ 446-454; Dec. Dig. <@=>250. ]
    2. Trial <@=>333 — Veedict Partly against Weong Party.
    In an action against railroads and the receiver of one of them, where damages properly assessable against the receiver as having accrued to plaintiff for the wrongful acts of a road since the receivership were included in the verdict against the road, there was error in the verdict in the amount of damages that should have been rendered against the receiver.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 784, 786; Dec. Dig. <@=>333.]
    3. Appeal and Eeeoe <@=>1151 — Determina-tio'n os Cause — Ooeeection oe Veedict.
    Where separable damages were assessable against codefendants, but the verdict assessed the whole award against one, the appellate court cannot correct the error by calculating what the jury should have awarded against the defendant not mentioned in the verdict.
    [Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 4498-4506; Dec. Dig. <S=> 1151.]
    4. Watees and Watee Coueses <@=>126 — Injury to Adjoining Pbopebty — Drainage— Statutoey Requieements — Insteuction.
    In an action against railroads and the receiver of one of them for damages to plaintiff’s lands by defendants’ failure to provide necessary culverts for the drainage of surface water between their roadbeds, the only questions were whether defendants had failed to comply with their statutory duty as to the construction and maintenance of necessary culverts, and whether damages had resulted to plaintiff as the natural consequence of such failure, and such issues should have been submitted to the jury without any reference to the exercise of ordinary care by defendants, which was not in the case.
    [Ed. Note. — For other cases, see Waters and Water Courses, Cent. Dig. §§ 139, 141, 142; Dec. Dig. <@=>126.]
    Appeal from District Court, San Patricio County; F. G. Chambliss, Judge.
    Action by M. H. McCammon against the San Antonio & Aransas Pass Railway Company and others. Judgment for plaintiff, and defendants appeal.
    Reversed, and cause remanded.
    Claude Pollard, of Kingsville, and Kleberg & Stayton and David M. Picton, Jr., all of Corpus Christi, for appellants. J. C. Houts, of Sinton, and C. A Davies, of San Antonio, for appellee.
   FLY, C. J.

Appellee sued the San Antonio & Aransas Pass Railway Company, the St. Louis, Brownsville & Mexico Railway Company, and E’ranls Andrews, receiver for the railroad company last named, for damages in the sum of $3,453 alleged to have been inflicted upon him by a failure on the part of appellants to provide proper and necessary sluices and culverts in their roadbeds for the drainage of surface water that accumulated between the two roadbeds where they cross each other near Sinton, Tex. A writ of mandatory injunction was also sought to require the construction of necessary sluices and culverts. The damage alleged was to the crops of appellee in the years 1913 and 1914. The cause was submitted to the jury on special issues, and upon the answers of the jury a judgment was rendered against the first-named railway company for $546.30, and against the other railway company and the receiver for the same sum. The mandatory injunction was refused.

In the last question submitted to the jury they were required to state the amount found against each of the defendants, and the answer was a finding against each of the railway companies for the sum of $546; no mention being made of the receiver. The verdict was by reasonable implication in favor of the receiver, and judgment should not have been rendered against him. The verdict was plain, and capable of but one construction, and that was that the jury did not believe the receiver was liable for the damages. Railway v. James, 73 Tex. 12, 10 S. W. 744, 15 Am. St. Rep. 743; Kinkler v. Junica, 84 Tex. 116, 19 S. W. 359. The first assignment of error must be maintained.

If damages properly assessable against the receiver were included in the verdict against the railway company, whose estate he is administering, which is necessarily the case, then there was error in the verdict in the full sum of the amount of damages that should have been rendered against the receiver, if against any one. This error might be corrected by subtracting that amount from the $546.30 found against the railway company, if that sum were definitely known. We do not think the record discloses a sufficient basis for such adjustment. We cannot by the calculating as suggested arrive at what the jury should have rendered against the receiver. They evidently labored under the belief that the receiver should pay nothing, and we cannot create a new verdict for them. The receiver was appointed in September, 1913, and this court is unable to separate the amount of damages for March, 1913, from those occurring after the receiver was appointed. The second, third, and fourth assignments of error are sustained.

The fifth assignment of error is overruled. The effect of the charge of the court preceding the submission of special issues as to the failure of appellants to erect and maintain proper sluices or culverts amounted to a charge that the obligation to provide the necessary culverts or sluices was absolute, without reference to the exercise of ordinary care. The charge would, however, have been plainer and more directly to the point if the question of negligence had been pretermitted altogether and the issue had been clearly presented as to whether or not appellants had constructed the necessary culverts or sluices, as the natural lay of the land required, for the necessary drainage thereof. That issue with one as to whether appellee had been injured by such failure and another as to the damages sustained by appellee and their allotment among the defendants were all the issues arising in the case. All that was said about negligence did not enlighten the jury; for every unnecessary matter dragged into a case has a tendency to hinder and retard á jury, rather than assist them in arriving at a proper verdict.

As to whether appellants had or had not constructed the necessary culverts or sluices was purely a question of fact to be determined by the jury, and that question, independent of any finding as to negligence, should have been submitted to the jury. This was not done, but, on the other hand, the court submitted the question of negligence to the jury, and in that submission intimated to the jury that appellants had not provided the necessary culverts or sluices, and that the jury were to determine whether the failure to construct such culverts or sluices was negligence on the part of appellants. The only question was had appellants failed to comply with the provisions of article 6495 as to the construction and maintenance of necessary culverts or sluices in their roadbeds. The issue was submitted as follows :

"Were the defendants negligent in the construction of their roadbeds in not providing all necessary culverts or sluices as the natural lay of the land required to carry off the surface water as charged in plaintiff’s petition?”

The only question that should have been answered by the jury was assumed to exist by the trial court. It may be possible that the court did not intend to assume that the necessary construction had not been made, but that is the plain import of the language, and in no question is the issue as to necessary construction submitted. In cases submitted on general charges, this court, as well as the Supreme Court, has held that similar charges were not sufficient to require a reversal, but in all such instances the issues involved had been submitted for determination by the jury in other portions of the charge and on this ground the charges were sustained. Railway v. Lehmberg, 75 Tex. 61, 12 S. W. 838; Railway v. Waldo, 32 S. W. 783; Railway v. Stewart, 146 S. W. 598.

The seventh assignment of error is overruled, and the eighth has been disposed of by the disposition made of other assignments-

As hereinbefore stated, it was an issue, if the jury found that necessary culverts or sluices had not been constructed and main-, tained, as to whether appellee’s damages, if he sustained any, were the proximate result of that failure to construct and maintain such culverts or sluices, and it was proper to submit that issue, not as arising from any negligence found by the jury, but their finding that the law had been disregarded by appellants, and from which negligence arose as a matter of law. The matters as to the proper construction and maintenance of the culverts or sluices, and as to whether a failure to so construct and maintain the culverts or sluices was the cause of any damage that ap-pellees may have shown they suffered, should be submitted as clear-cut issues to the jury, independent of any issue as to negligence. Railway v. Gurley, 37 Tex. Civ. App. 283, 83 S. W. 843; Railway v. Suter, 118 S. W. 216. The jury were not to find negligence, but the facts upon which the law predicates negligence.

Every material point raised by the record and briefs has been considered and disposition thereof made, and it becomes unnecessary to consider the remaining assignments of error, which are mere reiterations of those herein considered.

The judgment is reversed, and the cause remanded.
      <S=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: RAINEY, C. J.

text:
    MISSOURI, K. & T. RY. CO. OF TEXAS v. MOONEY
    (No. 7434.)
    (Court of Civil Appeals of Texas. Dallas.
    Nov. 27, 1915.
    Rehearing Denied Jan. 8, 1916.)
    1. Master and Servant <©=>294 — Injury to Servant — Instructions—Evidence.
    In an action for injury to a section hand while clearing up a wreck from the alleged negligence of the sections foreman combined with the negligence of fellow servants, where it appeared that plaintiff had lifted an iron rail, that an experienced employé signaled that it be dropped, which signal plaintiff did not understand, and so held onto the rail and was injured, the evidence did not warrant a charge on the foreman’s negligence, nor on defendant’s duty to use ordinary care in selecting competent servants, and that if failure to use such care was the proximate cause of the injury, defendant was liable.
    [Ed. Note. — For other eases, see Master and Servant, Cent. Dig. §§ 1157, 1161-1167; Dec. Dig. <@=5294.]
    2. Master and Servant <@=?295 — Injury to Servani^-Instruction.
    On evidence that plaintiff was inexperienced in the work of section hands in removing wrecks, that he had asked instruction in the work, that moving crooked rails was more dangerous than moving straight rails, that this was the first work of the kind he had ever done, and that he had not been warned, an instruction, that he did not assume the risk of extrahazardous work unless he was warned and instructed therein by defendant, and after warning continued in the work, was proper.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §§ 1168-1179; Dec. Dig. <@=>295.]
    3. Master and Servant <@=52,94t — Action for Injury — Instructions — Negligence oe Foreman.
    In such action, where the evidence was that the foreman had not directed the rail to be dropped, hut that it was dropped on a signal improperly given by an employé, a charge as to defendant’s liability for the foreman’s negligence proximately causing the injury was not warranted by the evidence.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §§ 1157, 1161-1167; Dec. Dig. <@=5294.]
    4. Commerce <@=58 — Regulation—Employers Engaged in Interstate Commerce.
    Where a section hand was injured while removing a wreck to repair the track of his employer engaged in interstate commerce, the state fellow-servant statute had no application, but the case was governed by the federal Employers’ Liability Act April 22, 1908, c. 149, 35 Stat. 65 (U. S. Comp. St. 1913, §§ 8657-8665).
    [Ed. Note. — For other cases, see Commerce, Cent. Dig. § 5; Dec. Dig. <@=>8.]
    5. Trial <@=5296 — Instruction — Assumption oe Risk.
    In a section hand’s action for injury while removing a wreck, error in the main charge on the question of assumption of risk was not reversible, where a correct charge requested by defendant was given.
    [Ed. Note. — For other eases, see Trial, Cent. Dig. §§ 705-713, 715, 716, 718; Dec. Dig. <@=> 296.]
    Appeal from District Court, Wood County; Barney Briggs, Judge.
    Action by Rube Mooney against the Missouri, Kansas & Texas Railway Company of Texas. Judgment for plaintiff, and defendant appeals.
    Reversed and cause remanded.
    C. C. Huff, of Dallas, and Dinsmore, McMahon & Dinsmore, of Greenville, for appellant. M. D. Oarlock, of Winnsboro, for ap-pellee.
   RAINEY, C. J.

Appellee, an employé of appellant, while working as a section hand, was injured and sues to recover damages, alleging in substance that while at work cleaning up a wreck with other employes in moving a crooked rail he was injured by reason of the negligence of the section foreman concurring with the negligence of the other fellow servants in not giving the signals required by the rules prescribed by the appellant for doing such work. He also alleges that he was inexperienced in such work, of which he informed appellant’s foreman, and asked to be informed and warned as to the manner in which such work was to be done, and that appellant failed to warn him. That appellant did not use care in employing skilled and competent fellow workmen, in all of which appellant was negligent. Appellant answered, denying knowledge of appellee’s inexperience and of any promise to instruct him as to the manner the work was to be done; that the work being done was such as any man of ordinary intelligence would know, see, and understand how to perform with safety; that it was the usual kind and character which section laborers are called upon to perform; denied the want of care in selecting its employés and that any of them were negligent in the performance of the work; that appellee assumed the dangers and risks, which were not extrahazardous, and that the injury, if any, was contributed to by him. A trial resulted in a verdict and judgment for appellee for $500, and the railway company appeals.

Complaint is made of the ninth and thirteenth paragraphs of the court’s charge, which are as follows:

9. “It was the duty of the defendant company to use ordinary care in the selection of its em-ployés; and if you find they failed to use ordinary care in the selection of their employés, and the plaintiff was thereby injured, and such negligence, if any, was the proximate cause of plaintiff’s injury, if any, then the plaintiff would be entitled to recover.”
13.' “If you find from the evidence in this case defendant failed to use ordinary care in the selection of and in the employment of the plaintiff’s fellow servants, and if you further find that by reason thereof plaintiff was injured, and that such negligence on the part of the defendant company was the proximate cause of plaintiff’s injury, if any, then the _ plaintiff would be entitled to recover for said injury, unless -you further find the plaintiff knew his fellow servants were incompetent.”

The grounds of complaint urged are: First, that there was no evidence adduced which authorized the charge with reference to the use of ordinary care in the selection by defendant of its employés; and, second, that appellee’s injury did not result from the want of the use of such care in employing incompetent persons.

The evidence tends to show that appellee, while working with other employés, had lifted for removal an iron rail crooked somewhat, resembling the letter S; one of the employés signaled that it be dropped, which signal appellee not understanding he held onto the rail when dropped by the others, and was injured. The foreman was present but gave no signal, and his negligence did not concur in the signal being given, and no negligence in that respect can be charged to him. The evidence was not sufficient to warrant a charge on this issue; nor was it sufficient to warrant a charge that such injury arose from defendant’s failure to use ordinary care in selecting competent servants, for it is shown that the fellow servant who gave the order for the rail to be thrown was an experienced hand.

The jury was instructed by the tenth paragraph of the charge that:

“Plaintiff did not assume the risk of extra-hazardous work, if any, unless he was warned and instructed in said work by defendant company, and after so being warned continued to work at said hazardous work.”

The objection urged by appellant to the foregoing charge is:

“Because the same is upon the weight of the evidence, in this, that it assumes that the work in which the plaintiff was engaged at the time of the alleged accident was extrahazardous, and that it was the duty of the defendant to warn the plaintiff of the dangers, when all the evidence in this case shows, beyond controversy, that the work in which the plaintiff was engaged was the kind and character of work ordinarily done and performed by section laborers; that the work was being done in the usual way; that such work is ordinarily performed; and that, if there was any hazard or danger attendant upon the performance of such work, the same was open and obvious to view, was known to the plaintiff, or could have been known to the plaintiff by the exercise of ordinary care.”

The court in this paragraph merely stated a correct principle of law. In the succeeding paragraphs of his charge he applied it to the facts of the ease. If appel-lee was inexperienced in the work and asked that he be instructed in the work, that moving crooked rails was more dangerous than straight rails, that this was the first work of the kind he had ever done, and that he had not been warned, it was a question for the jury to determine under appropriate instructions, and the evidence whether or not he was warned and whether or not under the circumstances the danger was patent and obvious.

The fifteenth paragraph of the court’s charge instructs the jury as follows:

“Now if you believe from the evidence that the plaintiff, with other employés of the defendant company, was engaged in removing an iron or steel rail at the time he was injured, if any, and that one or more of defendant’s section foremen were present and directing the said work in the way and manner in which it should be done, and that in performing the said labor in the way and manner directed by said section foreman that plaintiff was injured, and that the negligence, if any, of said section foreman was the proximate cause of plaintiff’s injury, in the way and manner he directed the said work to be performed or the said rail to be removed, then the plaintiff would be entitled to recover, and you will so find.”

The criticism of this charge, in effect, is that there was no evidence showing that the appellant’s foreman was guilty of negligence in directing the work in the way and manner it was directed. We conclude the evidence shows that the injury was caused by an em-ployé in improperly giving the signal for throwing the rail, and there was evidence showing that the foreman had not directed this to be so done, and the court erred in giving this instruction.

The work being done by the appellee was repairing the track of appellant, which was engaged in interstate commerce; therefore the fellow servant statute of this state has no application to this case and does not control, but it is governed by the act of Congress of the United States known as the “Employers’ Liability Act.”

The court’s main charge on the question of assumed risk was not exactly correct, but is not reversible error; a correct charge requested by appellant having been given.

For the errors indicated, the judgment is reversed and the cause remanded.
      cgcioE'or other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes