author: MOURSUND, J. MOURSUND, J.

text:
    KING v. BOERNE STATE BANK et al.
    (Court of Civil Appeals of Texas. San Antonio.
    May 14, 1913.
    On Motion for Rehearing, June 28, 1913.)
    1. Pledges (§ 33) — Conversion op Pledge-Remedies op Pledgor.
    On conversion of property pledged by the pledgee, the pledgor may either sue for the property itself or for its proceeds, if sold, or he may maintain an action for damages for breach of the contract to keep the property safely and restore it on payment of the debt; but, if he sues only for damages for conversion, he is not entitled to judgment for the property itself.
    [Ed. Note. — Eor other cases, see Pledged, Cent. Dig. §§ 89, 92; Dec. Dig. § 33.]
    2. Pledges (§ 36) — Depenses—Return op Property — 'Tender.
    Where conversion of personal property has taken place, the owner is not required to accept a return thereof, if tendered, and hence such tender is no defense to a suit for damages for the conversion.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §§ 92-94; Dec. Dig. § 36.]
    3. Pledges (§ 36) — Conversion op Pledged Property — Action por Damages —Judgment.
    Since an owner of pledged property that has been converted by the pledgee is not required to accept a tender of a return thereof, but can recover the value of the property as damages, it was error in such an action to set aside the pledgee’s illegal sale of the property and direct that unless it was redeemed by payment of the debt it should be sold in satisfaction of a judgment therefor.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §,§ 92-94; Dec. Dig. § 36.]
    4. Pledges (§ 66) — Sale op Pledged Property-Duty op Pledgee.
    Though a pledgee of stock had contract power to sell it at private sale without notice to the pledgor, it was still bound to conduct the sale in good faith and so as to subserve not only its own rights but the interest of the pledgor.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §§ 162-183; Dec. Dig. § 66.]
    6. Pledges (§ 31) — Pledged Securities — Sale.
    A wrongful sale of pledged property by the pledgee so as to put it out of his power to redeliver on payment of the debt constitutes a conversion.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 86-88; Dec. Dig. § 31.]
    6.Pledges (§ 31) — Sale op Pledged Property-Estoppel.
    Where a pledgor elects to assert that the relation still exists notwithstanding an unlawful sale by the pledgee, the latter is estopped to say that it has ceased and that he is the owner of the ‘ property.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 86-88; Dec. Dig. § 31.]
    7. Pledges (§ 31) — Sale op Property — Conversion.
    When a sale of pledged property is authorized, but the purchase thereof by the pledgee in good faith is unauthorized, such purchase does not constitute a conversion; but if the purchase is a nullity it can confer no rights on the pledgee so as to exempt him from being charged with conversion if he thereafter exercises a dominion over the pledge inconsistent with his relation as pledgee and with the rights of the pledgor.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §| 86-88; Dec. Dig. § 31.]
    8. Pledges (§ 31) — Sale op Pledged Property-Purchase by Pledgee — Assertion op Ownership.
    Where a sale of pledged property is made to the pledgee in hostility to the rights of the pledgor and in bad faith, and the pledgee thereafter claims absolute ownership or the right to hold the property as security for other debts than those for which it was pledged, he may be charged with conversion at the election of the pledgor.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §§ 86-88; Dee. Dig. § 31.]
    9. Pledges (§ 31) — Conversion by Pledgee —Tender.
    Proof of tender by a pledgor of the amount due to the pledgee and of the latter’s refusal to accept the tender and return the collateral pledged evidences a conversion; but no tender is required where the pledgee asserts absolute ownership of the pledge in himself, or an intention to hold it as security for debts for which it was not. pledged.
    [Ed. Note.' — Eor other easés, see Pledges, Cent. Dig. §§ 86-88; Dec. Dig. § 31.]
    10. Pledges (§ 31) — Sale — Bad .Faith — Conversion.
    Where the president of a bank to which plaintiff had pledged stock as security for a loan led plaintiff to believe that he would be given a few days in which to pay the debt after it matured, but on the day of plaintiff’s conversation with the president, the latter, as president, sold the stock to himself, as an individual, without notice to plaintiff and for a grossly inadequate price, and later notified plaintiff that he could not redeem the stock except by paying other sums for which the stock had not been pledged, such facts warranted a finding of conversion on the part of the bank.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §,§ 86-88; Dec. Dig. § 31.]
    On Motion for Rehearing.
    11. Banks and Banking (§ 112) — Acts of Officers — Pledges—Wrongful Sale.
    Where the president of á bank, to which' certain stock had been pledged for a loan wrongfully sold it to himself, as an individual, for a grossly inadequate price without notice to the pledgor, and later made assertions of ownership of the stock inconsistent with the pledg- or’s rights, and the bank claimed that the holding of the stock by the president inured to its benefit, it thereby became chargeable with his inconsistent assertions of ownership as against the pledgor.
    [Ed. Note. — Eor other cases, see Banks and Banking, Cent. Dig. §§ 271, 272; Dec. Dig. § 112.]

      12. Pledges (§ 31) — Sale—Conversión.
    Where a bank wrongfully .sold certain pledged collaterals to its president for a grossly inadequate price, and he not 'only paid the bank the price agreed on at the sale, but also took an assignment of the debt for which the property was pledged, the validity of the transaction so far as the bank was concerned should be determined as though the sale had been made to a stranger.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §§ 86-88; Dec. Dig. § 31.]
    13. Pledges (§ 48) — Wrongful Sale — Remedies of Pledgor.
    Where a bank wrongfully sold certain pledged collaterals to its president for a grossly inadequate price and then assigned to him the debt for which the collaterals had been pledged, and he denied the pledgor’s right to redeem except on payment of certain debts for which the property had not been pledged, the pledgor was not limited to an action to redeem the pledge on the ground that the sale treated as having been made to a stranger was voidable only, but was entitled to sue for conversion.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 113-117; Dec. Dig. §, 48.]
    14. Pledges (§ 37)— Conversión — Redemption.
    Where a person buys pledged stock with knowledge only that the stock has been pledged, he can be made subject only to a suit to redeem with tender of the amount due, though the property has been wrongfully sold; but where the president of a bank, acting in his official capacity, sold stock pledged to the bank for a loan, to himself, as an individual, for an inadequate price, and then denied plaintiff’s right to the stock except on payment of debts for which the stock had not been pledged, such rule did not apply, but plaintiff was entitled to sue for conversion.
    [Ed. Note. — Eor other cases, see Pledges, Cent. Dig. §§ 95,' 96; Dec. Dig. § 37.]
    15. Pledges (§ 37) — Conversion—Action-Motive.
    Where plaintiff’s stock that had been pledged to a bank for a. loan Was wrongfully sold to the bank’s president, as an individual, for an inadequate price, and he refused to surrender the same except on payment of claims for which the stock had not been pledged, plaintiff’s motives in suing for conversion instead of to redeem were immaterial and did not preclude him from having the question of the value of the stock submitted to the jury in a determination of his damages, though defendants claimed that at the time the stock was' sold it was worthless.
    [Ed. Note. — For other cases, see Pledges, Cent. Dig. §§ 95, 96; Dec. Dig. § 37.]
    Appeal from District Court, Kendall County; R.-H. Burney, Judge.
    Action by D. W. King against the Boerne State Bank and another. Judgment for defendants, and plaintiff appeals.
    Reversed and remanded.
    Appellant, on March 14, 1912, sued appel-lees, the Boerne State Bank and its president, C. J. Doe, for damages, charging such defendants with the conversion of 8,009 shares of the capital stock of the Boerne Electric Power & Manufacturing Company of the par value of $8,000, which had been pledged by plaintiff to said bank as collateral security on his note for $1,000, dated December 29, 1911,: and due January 29, 1912.
    Plaintiff alleged that on February 24, 1912, he had a conversation with said G. J. Doe in which he assured Doe that he was endeavoring to raise the money to pay the note, and would be able to pay same within a few days, but if the bank had to have the money and insisted upon it he would take 2,000 shares of his pledged' stock and sell the same at a sacrifice of 50 cents on the dollar in order to pay the note immediately; that thereupon said Doe told plaintiff he hoped he would pay said note in a, few days, and by this statement and Doe’s conduct plaintiff was led to believe that it would be all right for him to let said note run for a few days, and would not have to sacrifice any of his stock, which was reasonably worth its par value; that, notwithstanding said agreement and conduct of the defendants, the bank wrongfully and maliciously, with intent to harass plaintiff and to oust him from said Boerne Electric Power & Manufacturing Company in which he was a director and one of the largest stockholders, fraudulently conspired with its president, C. J. Doe, and sold plaintiff’s $8,000 worth of shares of stock to said Doe for the grossly inadequate sum of $100; that such sale was made about February 26, 1912, privately, without any notice to plaintiff and without any advertisement or publicity whatever, knowing that said stock was worth $8,000; that after receiving notice of such sale plaintiff went to the bank and tendered the amount due on his note and demanded his note and stock, but the bank refused to accept the money and to turn over to plaintiff the stock. Plaintiff further alleged that said stock was reasonably worth $8,000 and prayed that he recover $8,000 with 6 peh cent, interest thereon from February 26, 1912, less whatever sum he may be found to owe the bank, and also prayed for recovery of $10,000 exemplary damages.
    Defendants answered with general demurrer, special exceptions, general denial, and plea in the nature of a cross-action alleging the execution of the $1,000 note by plaintiff-to the bank, the pledge of the stock, their authority to sell the stock upon default in the payment of the note, the failure of plaintiff to pay the same (and in this connection denied an agreement for forbearance set up in plaintiff’s petition), the sale and delivery on February 26, 1912, of the stock to O. J. Doe for $100; that thereafter on February 26, 1912, the bank, for a valuable consideration, assigned and transferred, without recourse, the said note to the said C. J. Doe; that Doe thereby became and still was the legal and equitable owner and holder of said note; that plaintiff has failed and refused to pay the same; that upon the sale of the stock as aforesaid the bank credited the note with $100 paid it by Doe for said stock; that the stock was of no greater value than $100; that defendants are willing and ready to return said stock to plaintiff upon payment of the note, interest, and attorney’s fees. Defendants prayed as follows: “Wherefore defendants pray that plaintiff take nothing by his said suit, and that defendant Loe be quieted in the title and possession of said shares of stock, and that he have judgment against plaintiff for the balance due on said note, or if for any reason they should be held not entitled to such relief, or the sale of said shares of stock should be held invalid, then defendants pray for judgment against plaintiff for the amount of said note, principal and interest, and attorney’s fees, and for the foreclosure of said lien on said shares of stock, and for decree directing the sale of said shares of stock and satisfaction of such judgment; and they also pray judgment for costs, and for general relief.”
    Plaintiff filed a supplemental petition containing exceptions to defendants’ answer.
    The jury was instructed to return the following verdict: “We, the jury, find for the defendants against the plaintiff as to his action for conversion and damages, and we further find that the sale of the pledged shares of stock, to wit, 8,000 shares of stock in the Boerne Electric Power & Manufacturing Company, was invalid, and we further find for the defendant G. J. Loe against plaintiff on his cross-action on said note for the amount thereof, principal and interest, to wit, $1,058.33, and for the foreclosure of his lien on said shares of stock.”
    Judgment was entered in accordance with the verdict, and plaintiff appealed.
    Summary of Evidence.
    December 29, 1911, King gave the Boerne State Bank his note for $1,000, due January 29, 1912. The debt evidenced by the note had existed since the spring of 1911, and the original note had been renewed several times. Eight thousand dollars of the stock of the Boerne Electric Power & Manufacturing Company, a company of which Loe was president, had been pledged by King as collateral to secure the debt. When the note was renewed on December 29, 1911, Loe notified King that no further renewals would be made, and the note would have to be paid at maturity. On January 18, 1912, the bank mailed King notice that his note would mature on January 29, 1912, which notice was received by King two or three days before the note matured. King testified he saw Loe at once and asked him if he would extend the note, that Loe said he could not, that the bank did not wish to renew it, and that he was to endeavor to pay as soon as possible. This conversation is denied by Loe. The note was not paid. King also testified that on February 24, 1912, he told Loe he was endeavoring to raise the money to pay the note and hoped to do so in a few days and if necessary would sell the stock for $2,000, that he was pretty sure he could sell it for 50 cents on the dollar, and Mr. Loe told him he had better not sacrifice it, not to sell it below par, as the company had several thousand dollars worth of treasury stock which they wished to sell, and the sale of which might be prejudiced by a sale of other stock at a low price. Loe denied that this conversation occurred. On February 26, 1912, the bank wrote King as follows: “Boerne, Texas, February 26, 1912. Mr. L. W. King, City— Dear Sir: We have sold the collateral attached to your one thousand dollar note which matured nearly a month ago consisting of 8,000 shares of the Boerne Electric Power and Manufacturing Company stock to C. J. Loe for $100.00 and have applied the same as a credit upon your note. Yours truly, C. J. Loe, President.” King also received a letter from Loe as follows: “Boerne, Texas, February 26, 1912. Mr. L. W. King- — Dear Sir: I have bought from the Boerne State Bank 8,000 shares of the Boeme Electric Power & Manufacturing Company’s stock issued in your name, for $100.00. I expect to make an effort to get the accounts of this company settled in some satisfactory manner within the next ten days, and if you will arrange to take care of the balance of your note to the bank of $900.00 and the money that I am spending in settling up accounts of the company within the next fifteen days, I will be glad to transfer the stock back to you. I will of course expect you to refund me what money I am out in this matter with interest from the date that I took it on. Yours very truly, O. J. Loe.”
    These letters were received by King either on February 26th or 27th. On March 9th King secured $1,200 from Gilleat to pay off his note to the bank. King saw Loe on February 10th at the bowling alley but did not mention the matter of taking up the note, giving as his reason for not mentioning the matter that it was Sunday and he did not talk business on Sunday. He said further, it there were any other reasons for his not mentioning the matter, they were personal reasons. Loe left for Asherton on February 10th, and King on February 11th, about 9:30 or 10 o’clock a. m., went to the bank knowing that Loe was not there, and tendered to Fred Loe and Mr. Fabra, assistant cashiers, the $1,200 and demanded his note and stock. Fred Loe produced the note, but was unable to find the stock, and King declined to pay the note unless the stock was delivered to him, Mr. Fabra told him that C. J. Loe was away and he would like to have time to communicate with him as all of King’s business transactions had been with O. J. Loe. King said he would give him one hour, but called twice during the day, and finally gave Fabra until the evening to hear from G. J. Loe, but Fabra reported he had been unable to speak to Loe over the telephone. After C. J. Loe returned to Boerne, he called on King and offered to surrender the stock if King would pay the note. King said he could not accept it, as the matter was out of his hands and in the hands of his lawyers, to whom he referred Loe. Loe says this offer was made on Wednesday, the 13th. King first testified it was either Tuesday or Wednesday, but being recalled later said he was mistaken, that Loe called on him on Thursday, March 14th, after suit had been filed.
    G. W. Oalrow, a brother-in-law of plaintiff, testified that about a week before the sale of the stock he had a conversation with O. J. Loe about the King transaction, and after the sale, about March 4th or 5th, he had another conversation with O. J. Loe concerning which the witness testified: “I asked if he was in the bank, and I went to the directors’ room to the best of my recollection and told him that I had procured the money to take up this note. If I state the exact conversation, I have got to bring in L. E. King, for the exact conversation brings him in. I said that I had procured the money to take up the two King notes, $1,000 notes, and I asked him: ‘Will you hold that stock providing those two notes are paid; will you hold that stock for a certain other note?’ It doesn’t make any difference what the other note was, and he said: ‘No, that is now my stock. I have been under some expense and expect to be under considerable more, and it just takes $4,500 to get this stock and note.’ And that was almost the sum total of the conversation. As to what I then did with reference to notifying Mr. King, I went out and told Mr. Gilleat, who was waiting for me, and both of us walked out and met Mr. King right at the lumber yard, and I told him the result of this conversation.” On cross-examination he said: “I told him that I had procured the money from A. G. Gilleat. I asked him whether he would hold the stock providing those two $1,000 notes were paid, whether he would return the stock or hold it as security against another note that was in there. That was another note that doesn’t enter into this case. It was a note that I was on as security with L. W. and L. E. King. The amount of that note was $3,000. 1-Ie told me that he would return the stock. Mr. Loe then said, ‘That is my stock.’ Those are his very words. T have been out some expense, and I expect shortly to be out considerable more, and it will just take $¡1,500 to get that stock.’ ” King gave the report made him by Oalrow as his reason for taking no further action after March 6th. O. J. Loe denied that he made any such statement to Oalrow.
    King made no inquiry to ascertain whether O. J. Loe had paid out anything on accounts of the Boerne Electric Power & Manufacturing Company. In fact, Loe had made no such payments at the time he offered to surrender the stock on payment of the note.
    O. J. Loe testified he made the sale of the stock to himself after banking hours on February 24, 1912, without offering the same to any one else; that he saw plaintiff at the meeting of the directors of the Boerne Electric Power & Manufacturing Company that afternoon, but did not remember whether he walked to the meeting with him; that he did not tell King nor any of the directors he was going to buy the stock; that the transfer to him was made without recourse and did not require any action from the board of directors of the bank; that the transaction of his taking over the stock and note was put down on the books of the bank on February 26th; that he took over the note and stock on account of a prior agreement on his part with the directors of the bank who were dissatisfied with the loan.
    Considerable evidence was introduced in regard to the value of the stock, which will not be stated, as it is immaterial upon the questions arising upon this appeal. The evidence failed to show any depreciation in the stock between date of sale of the plaintiff’s stock to C. J. Loe and the date of the trial.
    The note given by King contained a provision that upon default in its payment the bank had full power to sell, assign, and deliver the whole of said securities or any part thereof at public or private sale, at its option, or that of its president or cashier, without demand, advertisement, or notice of any kind, all of which were expressly waived, and that the bank itself might purchase at such sale; also, that upon indorsement or transfer of the note the collateral could be delivered to the transferee, and the bank would thereafter be relieved from any liability or responsibility in the matter. The note was indorsed on the back as follows: “Collateral sold, to C. J. Loe for $100.00 2/24/12, without recourse. Boerne State Bank, Boerne, Texas. C. J. Loe, Pr.”
    Two checks were introduced in evidence, both signed C. J. Loe, and dated February 24, 1912, both payable to the Boerne State Bank, one for $100, which recited that it was given for 8,000 shares Boerne Electric Power & Manufacturing Company stock, L. W. King note, and the other for $900, which recited that it was for loss on L. W. King note No. 3,416. Both checks were stamped: “Boerne State Bank. Paid Feb. 26, 1912, Boerne, Texas.”
    On March 19th, C. J. Loe wrote King as follows: “I have your note for $1,000.00 which was due Jan. 29th, and bears 10 per cent, interest from maturity until paid. Attached to this note is 8,000 shares of the B. E. P. & Mfg. Co. stock. Please advise me by return mail if you care to pay this note and interest and have your stock returned to you.”
    Defendants, upon the trial, tendered to plaintiffs $8,000 worth of stock issued in lieu of the $8,000 pledged by him, which had been canceled, together with a transfer thereof, on condition that he pay the note for $1,000 executed by him, which tender was declined.
    Houston, Boyle & Storey and Cunningham & Birkhead, all of San Antonio, for appellant. Templeton, Brooks, Napier & Ogden, of San Antonio, for appellees.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   MOURSUND, J.

(after stating the facts as above). The trial court, though of the opinion that the sale of plaintiff’s stock to C. J. Loe was invalid, concluded that plaintiff could ask nothing further than to be restored to the position the parties would have occupied had no such sale been made, and had suit been brought on the $1,000 note, with prayer for foreclosure of the lien upon the collateral. If this was a suit to recover' the stock itself, in view of the absence of evidence showing a depreciation in value of such stock, or evidence of damage because of its depreciation, it could be said that even though a conversion had taken place no injury was suffered; but in this case plaintiff sued to recover the value of the stock at the time of the alleged conversion, and if a conversion took place. And he is entitled to recover such value and cannot be required to accept the stock tendered back, then the inquiry whether the stock was worth more or less than at the time of the sale to Loe became immaterial.

It is well settled that upon conversion by the pledgee of the property pledged the pledgor may sue either for the property itself, or for its proceeds if sold, or may maintain an action for damages for breach of the contract to keep the property safely and restore it to the pledgor upon payment of the debt. 31 Cyc. p. 844; Hale on Bail-ments & Carriers, p. 160. Where plaintiff sued only for damages for conversion, he is not entitled to a judgment for the property itself. Harris v. Staples, 89 S. W. 801.

Again, when a conversion takes place, the person whose property has been taken is not required to take the property back if the wrongdoer tenders the same to him, and such a tender constitutes no defense to the suit for damages for the conversion of the property. Weaver v. Ashcroft, 50 Tex. 427; Crawford v. Thomason, 53 Tex. Civ. App. 567, 117 S. W. 184; Hofschulte v. Hardware Co., 50 S. W. 608; Bitterman v. Hearn, 32 S. W. 341; Baldwin v. Davidson & Co., 127 S. W. 562.

As the wrongdoer cannot require the person whose property he converted to his use to take back the property, the court is without authority to accomplish that end by a judgment setting aside the unauthorized sale and directing that, unless the property is redeemed by payment of the debt, the same shall be sold in satisfaction of such judgment. Such a judgment reinstates the plaintiff as owner of the property and deprives him of his legal right to recover the value thereof at the time of the conversion, which right is not affected by either an increase or decrease in its value subsequent to the conversion.

If in this case, viewing the evidence from the plaintiff’s standpoint, a case of conversion is made out, the issues should have been submitted- to the jury. The pledgee, though having the power by contract to sell the collateral at private sale without notice to the pledgor, cannot escape the duty resting upon him as a trustee to conduct the sale fairly and in good faith, and in such a way as to subserve not only the rights he has, but also the interest of the pledgor. Colebrook on Collateral Securities, p. 215; 31 Cyc. p. 877 (6); King v. D. Sullivan & Co., 92 S. W. 51; Uncle Sam’s Loan Office v. Emery, 49 Tex. Civ. App. 236, 107 S. W. 1157; Oriental Bank v. Western Bank & Trust Co., 143 S. W. 1176; Gillet v. Bank, 160 N. Y. 549, 55 N. E. 292; Bank v. Richardson, 156 Mo. 270, 56 S. W. 1117, 79 Am. St. Rep. 528.

It is well established that the wrongful sale of the pledged property by the pledgee, so as to put it out of his power to redeliver it on payment of the debt, constitutes a conversion, and it has also been frequently announced by text-book writers and courts that an unauthorized sale by the pledgee to. himself does not change the relations of the parties, and therefore does not constitute conversion. It appears clear that, when the pledgor elects to assert that the relation still exists, the pledgee cannot be heard to say that it has ceased, and the pledgor is entitled to redeem the pledge.

It is also clear that when a sale is authorized, but the purchase by the pledgee is unauthorized, and he purchases in good faith, making the highest bid, such purchase would not constitute a conversion. But if such purchase be a nullity it can confer no rights upon the pledgee exempting him from being charged with conversion if he thereafter exercises a dominion over the pledge inconsistent with his relations thereto as pledgee and with the pledgor’s rights. When the sale is made in hostility to the rights of the pledgor, that is, in bad faith, in disregard of the pledgee’s duties as trustee, and the pledgee purchases at such sale and makes a claim of absolute ownership of the pledge, or claims the right to hold it as security for other debts than those for which it was pledged, it appears that he can, at the election of the pledgor, be charged with conversion of the pledge. Payne v. Lindsley, 126 S. W. 331; Luckett v. Townsend, 3 Tex. 119, 49 Am. Dec. 723; Watts v. Johnson, 4 Tex. 317; Soell v. Hadden, 85 Tex. 188, 19 S. W. 1087; Oriental Bank v. Western Bank & Trust Co., 143 S. W. 1178.

Proof of tender by the pledgor of the amount due by him to the pledgee and of the latter’s refusal to accept such tender and return the collateral evidences a conversion. But a tender is’ not required where the pledgee asserts absolute ownership of the pledge in himself, or an intention to hold the same as security for the payment of debts for which it cannot under the contract of pledge be held as security. See the cases above cited and the following: Roberts v. Yarboro, 41 Tex. 453; Gillet v. Bank, 160 N. Y. 549, 55 N. E. 292; Uncle Sam’s Loan Office v. Emery, 49 Tex. Civ. App. 236, 107 S. W. 1156; Gaw v. Bingham, 107 S. W. 931; Memphis City Bank v. Smith, 110 Tenn. 337, 75 S. W. 1065; Hagan v. Bank, 182 Mo. 319, 81 S. W. 171; Dibert v. D’Arcy (Mo.) 154 S. W. 1116. Such a declaration is equivalent to a refusal to accept if tendered, and the pledgee cannot be heard to say that the pledgor should be deprived of any rights for taking him at his word. Where a wrongful sale of the pledge is made to a stranger, no tender need be made by the pledgor before filing suit. Mullen v. Quinlan & Co., 195 N. Y. 109, 87 N. E. 1078, 24 L. R. A. (N. S.) 511.

Applying the foregoing principles to this case, we will consider whether the evidence was sufficient to go to the jury on the issue of conversion of plaintiff’s stock. Viewing the evidence from the plaintiff’s standpoint, it shows that the bank made the sale upon the very day that plaintiff was permitted by the president of the bank to believe that he would be given a few days’ time in which to pay his debt; that the sale was made for a grossly inadequate price; that no notice was given plaintiff of the sale; that it was made by the president of the bank, in his official capacity, to himself individually, without making any effort to sell the same to any one else, though having on that very day come in contact with directors of the company whose stock constituted the pledge. We think the evidence was sufficient to authorize a finding that the sale was not made in good faith and with that regard for plaintiff’s interests which the law requires. The question next arising is whether the sale was made to the pledgee itself or to a stranger. Any sale of the stock as between the bank and its president, if unauthorized by the directors, is void (article 530, Revised Statutes of 1911), and, even if authority had been conferred to sell the same, the sale to himself for a grossly inadequate price could be set aside by the bank. But, whether the sale as between said parties was void or voidable, the fact remains that by the acts of its officer, for which it is responsible, dominion was exercised over plaintiff’s property inconsistent with his rights thereto, in that said president claimed to own the same individually and notified plaintiff that he could not repossess himself thereof, except upon payment of sums of money for which such stock was not pledged, which he described as “the money that I am spending in settling up accounts of the company within the next 15 days.” Appellees say that, in fact, at the time when the suit was brought, no such accounts had been paid by C. J. Loe, and therefore plaintiff was only called upon to pay what was due by him. We do not think that plaintiff was called upon to investigate the matter. No offer was made to let him have his stock if he paid the amount due by him before any of such accounts were paid off, and Loe having asserted that he was the owner of the property, and having announced his intention of holding the same for the payment of other debts, neither he nor the bank can be heard to assert that he did not claim to be the owner, and that, if plaintiff had upon receipt of the letter offered to pay the amount due by him, his stock would have been returned.

The record further discloses that the witness Galrow testified to a conversation had by him with Loe, in which the latter attached still other conditions to be performed before plaintiff could repossess himself of his stock. Then taking this testimony as true, which we must do for the purposes of this appeal, we find that at both times dominion was claimed over the stock inconsistent with plaintiff’s rights.

We are also of the opinion that the transaction should be construed as a sale to a stranger; but, if it can be said that the bank had any possession or control of the stock after the transfer to O. J. Loe, then justice demands that it should be answerable for the conditions imposed by him as a prerequisite to plaintiff’s repossessing himself of his stock. Plaintiff could have brought his suit without any tender, but on March 11, 1912, he went to the bank, during business hours, and made a tender to the assistant cashiers of the amount due on his note and demanded that his note and stock be delivered to him. Appellees say this tender was made in bad faith because plaintiff knew that G. J. Loe was out of town. Such a conclusion is not necessarily deduced from the evidence. While Loe testified that he transferred the note to himself for a check for $900, at the same time that he bought the stock for $100 and credited such amount on the note, yet in the letters written to plaintiff he was not informed of the transfer of the note to Loe, nor have we noticed any evidence that he received any such notice prior to the tender made by him. It also appears that such note was in the bank, and readily found by the assistant cashiers, but the stock was not accessible. One of the assistant cashiers testified that he told plaintiff, at the time of the tender, the note had been transferred to G. J. Loe. No assurance was given him that his tender would ever be accepted upon the conditions named by him, namely, the delivery to him of his note and stock.

If the refusal of this tender, under the circumstances, be said not to furnish any evidence of conversion, then the fact that it was made and not kept up should not alter the positions of the parties. It should cer-; tainly not be given the effect of releasing the defendants from the consequences of a conversion, if they were at that time chargeable therewith, nor of requiring plaintiff to forego his action for damages upon an offer thereafter made to restore to him his property upon payment by him of his note. He lost no rights by his refusal of the offer to restore to him his property upon payment of his debt, whether such offer was made before or after suit was filed. A person dealing with another’s property so as to render himself guilty of conversion cannot, when he decides he was wrong, or when he sees trouble brewing, restore the property unless the person wronged is willing to receive the same. The option, whether to demand and receive the property, or to demand its value at the time of the conversion, rests with the person wronged, and the wrongdoer is not permitted to decide what remedy shall be chosen by the person wronged.

We sustain the first four assignments, all of which complain of the action of the court in peremptorily instructing the Jury as to the verdict to be returned, also those complaining of the charge of the court and the judgment rendered.

An offer by a person guilty of conversion to return the property converted constitutes no defense to an action for damages for conversion, as has been hereinbefore fully shown, and the assertion of such an offer should not be permitted to be pleaded nor proved when only actual damages are sued for; but when exemplary damages are prayed for, as was done in this case, such evidence is admissible in mitigation of such damages, and the offer may be pleaded and proved. Bitterman v. Hearn, 32 S. W. 341. Assignments 5, 7, and 8 are overruled.

Assignment No. 6 is sustained.

The judgment is reversed, and the cause remanded.

TALIAFERRO, J., did not sit in this case.

On Motion for Rehearing.

MOURSUND, J.

Appellees, in their argument in support of their motion for rehearing, express the fear that we have been misled by the fact that they did not assign error to the trial judge’s instructing the jury that the sale of the stock was invalid, and say that such ruling was without their consent, but not objected to by them because the bank had, up to the time it parted with the title to the note and the pledge, been willing to deliver the same on payment of the note, and Loe had, after his purchase of the note and pledge, always been ready to deliver the stock upon payment of the note. We agree with appellees that the bank was willing up to the time it parted with the stock to deliver it to appellant upon payment by him of his note; but we cannot agree that Loe was always ready, after he acquired the stock and note, to let appellant have the stock upon the mere payment of the note. There is a letter written by him, as well as other evidence, from which a jury could well find that he exacted additional conditions Eo be performed by appellant in order for the latter to repossess himself of his stock. Ap-pellees contended in their brief that the wrongful sale of the pledge only constitutes conversion when the same is placed beyond the control of the pledgee, and that in this case the appellees did not place the stock out of their reach or control so that they could not redeliver it to appellant upon proper demand. In addition, it was contended that no sufficient tender had been made, and therefore there was ño conversion. These contentions both appear to have been predicated upon the theory that the sale of the stock was invalid, but that such sale should be lightly regarded, if not overlooked entirely, while great stress should be given to the fact that the defendants between them always had the stock, and it was within their joint power to produce it, and that King should have made a tender when Loe was present, and, failing to do so, he should not be heard to say that any conversion had taken place. We considered this theory, and found it without merit, but concluded that, if the holding of the stock by Loe inured to the benefit of the bank, then it appeared clear that the bank was chargeable with his assertions of ownership inconsistent with the rights of the pledgor.

Appellants now contend earnestly that the sale to Loe was not void, but merely voidable, and that the legal title to the pledge passed to Loe and the sale to him could not be set aside in a collateral proceeding, but a direct proceeding would have to be instituted for that purpose. They say: “Of course, the bank would probably be bound by the act of Mr. Loe, its president, in making the sale under the pledge if any wrong was committed thereby; but there is no contention in this ease, nor is there a scintilla of evidence to the effect, that Loe was purchasing the collateral for the bank or that the transfer of the note to Loe was not a bona fide transaction.”

Considering the matter from the standpoint so urged, the stock was put beyond the reach of the bank, and Loe was the only one in whose power it lay to restore the same to King. In other words, as was stated by us in our former opinion, the transaction, so far as the bank is concerned, should be viewed as if the sale had been made to a stranger.

Appellees contend that when the transaction is thus viewed it presents no cause of action in favor of King against either the bank or Loe for conversion, but merely an action to redeem the pledge. They cite a portion of section 748 of Jones on Pledges, which reads as follows: “An action of trover cannot be maintained by tbe pledgor to recover tbe value of stock wrongfully sold by tbe pledgee without a tender of tbe' debt' secured. Tbe wrongful sale of tbe pledge does not revest tbe immediate right of possession of tbe pledge in tbe pledgor, and therefore tbe latter cannot maintain tbe action either for tbe whole value of tbe shares or for nominal damages.” In tbe same section the following language occurs: “But in case tbe pledgee has put the securities beyond, bis reach by an illegal sale of them, it is said that tbe pledgor need not make a formal tender of tbe amount due, nor a demand for tbe securities, before bringing an action against tbe pledgee to redeem, or an action for tbe conversion of tbe securities.” Authorities are cited In support of both propositions. In section 571a of the same work tbe following language is found: “If a pledgee by an unauthorized sale puts it out of bis power to restore tbe property upon payment or tender of tbe debt secured, be is liable for its conversion without a demand and tender of performance by tbe pledgor. ‘The observation sometimes met with in tbe opinion of judges, and in text-books, that tbe pledgor is at liberty to treat an unauthorized sale of tbe pledged property as a conversion by tbe pledgee, must be taken to refer to such a sale as puts tbe property beyond tbe control of tbe pledgee. In cases of that kind tbe pledgor may charge tbe pledgee as for a conversion of tbe property without demand or tender of performance, though be is not bound to do so, tout may, by subsequent tender and demand, require tbe pledgee to account for tbe market value of tbe property at that time. And, of course, it is not the right of tbe pledgee to insist that bis wrongful sale constitutes a conversion, for that would enable him, if be were allowed to do. so, to take advantage of bis own wrong, and by bis own violation of tbe contract determine tbe time, and thus tbe measure of bis liability for its breach.’ ” The quoted portion is taken from tbe case of Glidden v. Bank, 53 Ohio St. 588, 42 N. E. 995, also reported in 43 L. R. A. 737 with valuable and thorough notes by tbe editor bearing upon tbe various questions arising in suits for conversion by reason of invalid sales by pledgees.

. Tbe same rule is announced by the editor of L. R. A. in vol. 6 (N. S.) p. 299, under tbe case of Austin v. Vanderbilt, 48 Or. 206, 85 Pac. 519, 120 Am. St. Rep. 800, 10 Ann. Cas. 1123, decided by tbe Oregon Supreme Court, in which tbe court said: “Tbe pledgee impliedly agrees faithfully to bold tbe pledge until tbe conditions have been performed upon tbe faith of which tbe eboses in action, goods, or personal chattels have been delivered to him. If, in violation of bis trust, be sells or disposes of tbe pledge, thereby putting it out of bis power to return tbe property, it would be useless to impose upon tbe pledgor tbe burden of tendering to tbe pledgee tbe payment of tbe debt, or tbe performance of tbe duty before be could maintain an action against tbe pledgee for tbe damages sustained by reason of tbe conversion, when it would be impossible for tbe latter to discharge tbe obligation which be bad undertaken. When a pledgee, by his overt act, violates tbe terms of bis agreement, so that it cannot be specifically enforced, he necessarily severs tbe fiduciary relations be assumed •towards the pledgor, whose remedy against him in this form of an action for tbe injury sustained, though treated as one for conversion, is in reality founded on tbe breach of tbe contract.”

To bold that a tender is necessary before any rights can toe asserted by tbe pledgor, after a sale by tbe pledgee, would mean that, if the pledgor was unable to pay tbe money or tender tbe same, be would be deprived of remedy, though tbe sale was made in gross violation of tbe duty which tbe law imposes upon tbe pledgee, namely, to exercise bis control of tbe pledge so as to subserve tbe interests of tbe pledgor as well as bis own. Tbe cases from our courts cited in our former opinion are in line with tbe authorities which do not require tbe useless formality of a tender when a conversion has already taken place and has been announced by tbe pledgee, or when it is beyond tbe power of tbe pledgee to restore tbe pledge.

Appellees do not question tbe correctness of tbe Texas cases which bold that a claim of absolute ownership by tbe pledgee-consti-tutes conversion, nor do they directly challenge tbe correctness of tbe decisions that a sale without authority to a stranger may be treated by tbe pledgor as a conversion and suit brought without tendering tbe amount due, but seek to make a distinction "between such cases and this on tbe ground that authority was given tbe bank to make a sale of King’s stock at private sale without notice. They contend that such a sale, even though wrongfully and fraudulently made, is merely a violation of tbe duty imposed by law to conduct tbe sale fairly and in good faith, and that tbe action is one for breach of contract, and tbe only remedy tbe setting aside of tbe sale upon payment of tbe debt

We cannot subscribe to such a doctrine. To so bold would mean that a bank could, under such a contract, when tbe debt is due, sell tbe collateral for a few dollars to its employes, without an effort to comply with its duty to seek to obtain a fair price, and thus appropriate tbe same to tbe use of third persons who would be entitled to bold tbe same until tbe pledgor paid off bis debt. Such a sale constitutes the exercise of dominion over tbe pledge inconsistent with tbe relations tbe pledgee justly sustains thereto, and tbe pledgor may treat tbe same as a conversion. In this case, if King’s testimony is true, he was, by Loe’s language and actions, lulled into a feeling of security on tbe very day that his stock was sold, and permitted to 'believe it would not be sold without giving him a few days’ time.

While appellees do not directly challenge the correctness of the decisions holding that an unauthorized sale to a stranger may be treated as a conversion and suit maintained without a tender, yet the cases and doctrine upon which they rely are those which are not in accord with said decisions, but announce the rule that before an action for trover can be brought the immediate right of possession must be vested in the pledgor by the payment or tender of the amount due by him. Appellees state the contention as follows: “Before it could be held that he (King) was entitled to maintain an action for conversion, it would have to be held that the bank, by reason of the sale, had destroyed the lien given to secure its debt and that neither it nor Loe had any lien on the property.” This technical rule relied upon by appellees would prevent the pledgee in all cases from suing for conversion unless he had paid fhe debt or tendered the amount thereof. When an unauthorized sale is made, the lien is not destroyed, nor is it destroyed by an assertion of ownership by the pledgee, or by his claim of right to hold it as security for other debts. It therefore appears to us that while appel-lees are seeking to distinguish this case from those where an unauthorized sale is made, or a claim of absolute ownership, the rule relied upon to do so would destroy the correctness of the holdings in those cases.

Where a person buys pledged stock and his knowledge extends only to the fact that the same is a pledge, nothing but a suit to redeem, with tender of amount due, could be brought against him. Cook on Stock & Stockholders & Corporation Law, § 472. Loe does not occupy such a position. He knew all the facts and circumstances, and if the sale to himself was wrongful he is guilty of conversion, and can be sued therefor without any tender of the amount due on the debt. His subsequent or separate purchase of the note given by King cannot entitle him to the rights he would have had if the note had been sold him and the stock merely accompanied the same as collateral.

The motives actuating appellant in suing for conversion instead of to redeem the stock are vigorously assailed by appellees ; it being charged that he is seeking to assert a claim for $8,000 for stock worthless at the time it was sold. If the stock was worthless, appellant has suffered no injury, and it should not be assumed that he will recover if such be the case, but he is entitled to have the issue tried, and, should it develop that his stock was deliberately and wrongfully sold for a grossly inadequate price without any effort to procure the real value, he is within his rights in choosing his remedy.

The motion is overruled.


source: Caselaw Access Project

author: TADBOT, J.

license: Public Domain

text:
    FRED A. JONES CO. v. DRAKE.
    (Court of Civil Appeals of Texas. Dallas.
    June 14, 1913.
    Rehearing Denied June 28, 1913.)
    1. Master and Servant (§ 258) — Injuries to Servant — Action—Pleading.
    In an action against a master for injuries received by a servant owing to an explosion of dynamite, the petition which averred that the master was guilty of negligence proximately causing plaintiff’s injury in permitting sticks of dynamite to be carried on his premises, capped and primed in an uncovered box which subjected the dynamite to various dangers which might have caused the explosion, and that the master by the exercise of ordinary care should have known that the use of the dynamite was dangerous, sufficiently states a cause of action, not> leaving the proximate cause of the accident open to mere guesswork and conjecture, even though showing that the explosion might have been caused from several sources, for the circumstances attending an injury may be sufficient to* establish the fact of negligence without any direct proof thereof; and it was the duty of the master, because of the hazardous nature of the explosive, to use increased watchfulness and greater caution in proportion to the hazard.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §§ 816-836; Dec.. Dig. §, 258.]
    2. Master and Servant (§§ 101,102) — Injuries to Servant — Duty oe Care.
    In using a dangerous agency, such as dynamite, a master is bound in the exercise of reasonable care to use greater watchfulness and caution in proportion to the danger.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §§ 135, 171, 174, 178-184, 192; Dec. Dig. §§ 101, 102.]
    3. Master and Servant (§ 276) — Injuries to Servant — Actions — Evidence — Sufficiency.
    In an action against a master for injuries received by a servant, evidence 'held sufficient to show that the negligence of the master in permitting dynamite to be carried around already capped and primed and in an open box was the proximate cause of the accident.
    [Ed. Note. — For other cases, see Master and Servant, Cent. Dig. §■§ 950-952, 954, 959, 970, 976; Dec. Dig. § 276.]
    4. Trial (§ 260) — Instructions — Refusal of Charges Given.
    Where a requested charge is covered by those already given its refusal is proper, for the giving would constitute undue repetition.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §,§ 651-659; Dec. Dig. § 260.]
    5. Trial (§ 252) — Instructions—Evidence.
    In an action against a master for injuries by an explosion of dynamite, where the evidence was sufficient to show that the injury was caused by the master’s negligence in permitting the explosive to be carried around already capped and primed in an open box, but did not disclose the exact reason for the explosion, the refusal of a special charge authorizing a verdict for the defendant if the jury could not determine what caused the explosion is proper.
    [Ed. Note. — For other cases, see Trial, Cent. Dig. §§ 505, 596-612; Dec. Dig. § 252.]
    6. Appeal and Error (§ 973) — Review — Discretion of Trial Court.
    The exclusion of testimony upon the motion of the defendant before the introduction of its evidence rests largely within the discretion of the trial court, and its action is not reviewable in the absence of a showing of an abuse of its discretion.
    [Ed. Note. — Eor other cases, see Appeal and Error, Cent. Dig. § 3846; Dec. Dig. § 973.]
    7. Appeal and Ebror (§ 1047) — Review — Harmless Error.
    The refusal of the court to strike testimony as to the authority of two of the master’s servants to hire and discharge others is harmless though erroneous, where the evidence conclusively showed that one of the servants was a vice principal and the court charged that the other was a fellow servant.
    [Ed. Note. — Eor other cases, see Appeal and Error, Cent. Dig. §§ 4132, 4133, 4146-4152; Dee. Dig. § 1047.]
    Appeal from District Court, Dallas County; J. C. Roberts, Judge.
    Action by Charlie Drake against the Fred A. Jones Company. From a judgment for plaintiff, defendant appeals.
    Affirmed.
    Seay & Seay, of Dallas, for appellant. Ben Savage, Geo. O. Wallace, and Carden, Starling, Carden & Hemphill, all of Dallas, for appellee.

      For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

      For other oases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

   TADBOT, J.

This is an action brought by appellee against appellant to recover damages sustained by him in consequence of personal injuries inflicted through the negligence of appellant’s servants. Plaintiff’s petition alleges, in substance, that on or about January 21,1911, the defendant, a private corporation, was engaged in constructing for the city of Dallas, Tex., a large water reservoir, known as “White Rock Reservoir,” and plaintiff, as an, employe of defendant, was assisting in doing the work. That the defendant, acting through its officers and representatives, was guilty of negligence in that it caused certain dynamite to be used in and about the premises where plaintiff was required to work, and recklessly and carelessly caused and permitted said dynamite to be handled and used by inexperienced and incompetent employés, who did not exercise that degree of care in respect thereto which a person of ordinary prudence would have exercised under the same circumstances to avoid an explosion and did not warn plaintiff of the danger of said dynamite exploding under such circumstances, by reason of which an explosion thereof occurred proximately resulting in serious and permanent injury to plaintiff. As to the manner of handling said dynamite and the circumstances surrounding and attending its explosion, it is alleged:

“That the defendant, through its vice principal, who was plaintiff’s foreman, had ordered one Jaredo to do or cause to be done certain work in connection with the removing of certain stumps the exact nature of such work not being known to plaintiff, but that plaintiff has been informed, believes, and charges the fact to be that the said work was to make certain excavations under the stumps, and to place small pieces of dynamite thereunder and discharge the same so as to loosen the earth from under said stumps, the said process being generally known as springing the stumps, so that after the springing of the stumps defendant could recharge the cavity created thereby with a larger quantity of dynamite, which, upon explosion, would remove and destroy the stumps. That said vice principal inserted or caused to be inserted, or knew that there had been inserted, or by the exercise of ordinary care should have known that there had been inserted in the said pieces of said dynamite dynamite caps and fuses, and placed or caused to be placed the said dynamite so capped and primed, together with a number of loose caps, in an uncovered box, and in this condition placed or chused to he placed the said uncovered box of said dynamite in the possession of and under the control of the said Jaredo, or allowed the said Jaredo to have and retain possession of an uncovered box containing loose caps and dynamite so primed, or by the exercise of ordinary care could have known that the said Jaredo, in the discharge of his duties to defendant, undertook to spring said stumps by use of said dynamite in the manner as above set out. That the vice principal of defendant ordered and directed plaintiff to assist the said Jaredo in “such work, and commanded and directed him to obey the orders and commands of the said Jaredo. * * * That in acting in obedience to the orders and instructions of the said Jaredo a hole had been bored under one of said stumps, and the said Jaredo had placed a small piece of dynamite thereunder and exploded the same, thereby springing such stump. That the said Jaredo thereupon ordered him, plaintiff, to remove the loose dirt from under said stump and enlarge the cavity so that a larger charge of dynamite could be placed thereunder, and said stump thereby removed when said dynamite was discharged. That thereafter the said Jaredo went to another stump some distance away and ordered and directed plaintiff to come to such other stump, that plaintiff, in obedience to said order and command of the said Jaredo, after completing said work at said first-mentioned stump, left such place of safety and started to the other stump where the said Jaredo had ordered him to come, and that just before plaintiff arrived at such stump the said dynamite in said box exploded and injured plaintiff.
“Plaintiff further alleges: That the said place of explosion was at or near the foot of White Rock Dam, and in a northwesterly direction therefrom, which said dam was then in the process of construction. That upon the top of said dam there was being run back and forth a steam roller or steam engine, from which sparks were blowing in the direction where the said Jaredo was at work at said stump, and where said explosion occurred. That the said dynamite was caused, to explode either on account of some jar or concussion, or from the explosion of a piece of dynamite placed by the said Jaredo under said stump for the purpose of springing it — the said box of dynamite being left in close proximity thereto — or from sparks from said engine or roller lighting in said box, or from some other cause. That plaintiff is unable to aver specifically which of said causes produced said explosion, but charges that the defendant was negligent whether said explosion occurred from either of said causes; and that the capping and priming of said dynamite, as above alleged, or in causing the same to be capped and primed, or in permitting the same to be capped and primed, or in failing to exercise ordinary care to prevent the premature capping and priming, or permitting said caps to be in the same box with said dynamite, or in placing or permitting said caps to be placed in the said box with said dynamite, and its placing or causing to be placed, or in permitting to be placed, or in failing to exercise ordinary care to prevent its being placed in said open box, and the said box placed in such close proximity to said engine and the said stump or permitting the said box containing said capped and primed dynamite from being jolted or jarred and prematurely discharged, or in failing to exercise ordinary care to prevent any or all of the conditions aforesaid leading to the premature discharge of the said dynamite as aforesaid and in failing to warn and caution plaintiff from approaching said place, and of being in said vicinity where said dynamite was so capped and primed and in such condition as to be liable to explode, was guilty of negligence. That the defendant was further guilty of negligence in that the said Jaredo, while doing his said work at said stump, left the said box containing said caps and dynamite capped and primed as aforesaid with the fuses therein upon the ground near his said work, and that the defendant and its said vice principal knew, or in the exercise of ordinary care should have known, that the said Jaredo would so leave said dynamite and the box and its said contents in such close proximity to his work, and that the defendant should have foreseen, or by the exercise of ordinary care could have foreseen, that the said Jaredo would place and leave said dynamite and box in such close proximity, and that the plaintiff, in obeying the orders of the said Jaredo, and in approaching said stump that he might discharge his duties to defendant, and in obedience to said orders, would come in dangerous proximity to said dynamite so placed and located, and that an explosion thereof would injure plaintiff, and in the exercise of ordinary care should have foreseen that the said dynamite under the circumstances would explode and injure plaintiff. That in obedience to said order of the said Jaredo plaintiff approached said place, and at such time, and in obeying said order, plaintiff did not know and appreciate the danger and risk incident of being in that vicinity, and did not know that the said Jaredo was keeping said box of dynamite in said immediate vicinity, and that plaintiff in approaching said stump was approaching a place of danger, or that he was in danger of being injured by the explosion of said dynamite in said box. That plaintiff was inexperienced and unskilled in the handling of dynamite, and the defendant knew, or by the exercise of ordinary care could have known, that he, plaintiff, was so unskilled and unlearned. That under the surrounding circumstances and conditions that the said dynamite would be exploded, and knew or should have known that plaintiff did not know that said dynamite was in such close proximity to said stump. That the defendant was guilty of negligence in failing to warn the plaintiff of the dangers incident to the approaching of said stump and of being in said vicinity, and of the danger of said dynamite exploding under the said conditions.”

Defendant answered by a general demurrer, a general denial, and pleas of contributory negligence and assumed risk. A trial before the court and a jury resulted in a verdict and judgment in favor of the plaintiff for $1,500, and the defendant appealed.

The first assignment of error complains of the court’s action in overruling defendant’s general demurrer to plaintiff’s petition. Several propositions are advanced under this assignment, the substance of which is that the plaintiff having alleged various and sundry acts of commission and omission that caused his injury, and then finally alleging, “or that in some other way the explosion was produced that caused the injury,” his petition showed upon its face that it is a mere matter of guesswork as to what did cause or what was the proximate cause of the injury, and places the proximate cause thereof in the field of conjecture; that such being the state of plaintiff’s pleading, no right of recovery was shown, and defendant’s general demurrer should have been sustained. The question is fraught with some difficulty, but we have reached the conclusion that the demurrer was properly overruled. Among the various causes alleged for the explosion of the dynamite, which were evidently made by the cautious pleader with the view of meeting every phase of the evidence, it is specifically charged that the master in this case was guilty of negligence proximately resulting in plaintiff’s injury in causing or permitting sticks of dynamite to be carried about on its premises capped and primed in an uncovered box containing a number of loose caps, which subjected the dynamite to exposures which may and do result in a premature explosion thereof. This alleged negligent manner of handling the dynamite may have been, it occurs to us, the direct or proximate cause of plaintiff’s injury, regardless of the unknown or indefinitely alleged particular thing that caused the explosion. If this view is correct, plaintiff’s petition stated a cause of action. In other words, we hold, as is contended by appellee, that a petition which specifically avers, as does plaintiff’s petition, the negligent manner of handling and caring for dynamite, and which charges that such negligence was the proximate cause of the injury complained of, does not leave the proximate cause open to mere guesswork and conjecture, even though such petition shows that the dynamite so negligently handled was exposed to several physical conditions, any one of which may have intervened so as to cause an explosion, and notwithstanding the petition expressly avers that such intervening cause is not known. Plaintiff’s petition contains the following allegations: “That the defendant, through its vice principal, placed in the possession of, and under the control of the said Jaredo a quantity of dynamite; that the said vice principal inserted or caused to be inserted, or knew that there had been inserted, or by the exercise of ordinary care could have known that there had been inserted in the several pieces of said dynamite, dynamite caps and fuses, and also knew or should have known by the exercise of ordinary care, which it failed to exercise, that loose caps were placed in the same box with said dynamite, and placed or caused to be placed the dynamite so capped and primed and said loose caps in an uncovered box, and in this condition placed or caused to be placed the said uncovered box of said dynamite in the possession of and under the control of the said Jaredo, or allowed the said Jaredo to have and retain liossession of an uncovered box containing loose caps and dynamite so primed.”

It has been well said that “while such a dangerous instrumentality as dynamite may be properly used without exposing the master to a charge of negligence, yet that fact does not by any means imply that he is discharged from the ordinary obligation to use reasonable care to protect his servants against injury therefrom.” Indeed, it is a familiar and fundamental rule that reasonable care demands “increased watchfulness and greater caution in proportion to the dangerous nature of the instrumentality employed.” It must be such care as is reasonably commensurate with a known danger and the seriousness of the consequences which are liable to follow its omission. The proposition that plaintiff’s petition in this case was sufficient to authorize a recovery without alleging with absolute certainty the particular agency that caused the dynamite to explode seems to be well supported by authority. In Brown v. West Riverside Coal Co., 143 Iowa, 662, 120 N. W. 732, 28 L. R. A. (N. S.) 1260, the negligence charged was' the storing of dynamite in a room provided by the master as a place of shelter, etc., for his workmen, and the court, in holding that I whether or not the master had exercised reasonable care for the protection of his employes from injuries by the explosion of the dynamite was a question for the jury solely, said: “If the defendant was negligent in depositing the powder and dynamite in a place where their accidental ignition would necessarily endanger the lives of its servants, such negligence would be the proximate cause of the resulting injury, notwithstanding the source of the spark which explodes them be purely accidental or wholly unknown. Tissue v. Baltimore & Ohio Ry. Co., 112 Pa. 91, 3 Atl. 667, 56 Am. Rep. 310.”

That blasting powder and other high-power explosives of modern invention are liable to accidental ignition, with destructive consequences, even where apparently reasonable care is exercised to prevent such occurrence, has been too frequently proven by recurring disasters to call for argument, and, if there be lack of reasonable care in storing them too near the servants’ place of work, such negligence is not purged by the exercise of care in other respects.” Tissue v. Railway Co., cited in the foregoing quotation, was an action to recover damages for the death of the husband and father of the plaintiffs, alleged to have been caused by the negligence of the defendant in storing a large quantity of dynamite so near the place where the deceased was employed as to kill him by the accidental explosion of it, and the court held that whether it was negligence on the part of the railway company to permit the dynamite to be stored in such a position that an accidental explosion of it might result in death or injury to its employes was a question of fact for the jury to determine. In the case of Anderson v. Smith et al., 104 Minn. 40, 115 N. W. 743, it appeared that the defendants left uncovered and unprotected a large quantity of dynamite in close proximity to a tent occupied by their" employes, and that while Anderson was in this tent eating his dinner the box of dynamite was discovered to be on fire, which caused "it to explode, causing Anderson to sustain thereby serious bodily injuries. The defendants contended on appeal that they were entitled upon the record to a judgment absolute in their favor because it disclosed no evidence to sustain the finding of the jury that the defendants were guilty of negligence, which was the proximate cause of the plaintiff’s injury. This contention, however, was not sustained; the Supreme Court of Minnesota saying: “The defendants left uncovered and unprotected a large quantity of dynamite, an extremely hazardous agency under ordinary conditions, in close proximity to the tents occupied by their employés. They were charged with a high degree of care, commensurate with the intrinsically dangerous character of dynamite, to guard against injuries to their employés by dynamite. The defendants were clearly guilty of negligence in leaving the dynamite where they did leave it.” In the subsequent case of Froberg v. Smith, 106 Minn. 72, 118 N. W. 57, growing out of the same accident, it was held that the leaving of the uncovered and unprotected dynamite near the tent was the proximate cause of the employe’s injury, notwithstanding the negligence of another employe may have intervened to bring fire in contact with the dynamite which caused it to explode.

In McCray et al. v. Railway Company, 89 Tex. 168, 34 S. W. 95, where the widow and children were suing to recover damages on account of the death of their husband and father, who was killed while in the employ of the railway company by the falling of a steel rail from one of the company’s ears, the issue of negligence being whether or not the company was negligent in loading the rails on the car, the Supreme Court of this state, among other things, say: “It is a general rule that, when a servant sues his master or employer for damages arising from injuries caused by the negligence of the latter, the plaintiff must prove the negligence of the defendant, and that proof of the' accident and injury alone will not be sufficient to authorize a recovery. However, it is well settled by authority that the circumstances attending the injury may be sufficient to establish the fact of negligence without any direct proof thereof. * * * It was the duty of the railroad company to place the cars in the hands of its em-ployés in a condition reasonably safe to be handled by them in the course of transportation. * * * The loading of the rails was done by it or its servants, and if the accident was such that it would not have probably occurred in the ordinary course of transportation if the car had been properly loaded, the circumstances attending the accident would furnish sufficient evidence to authorize a verdict for the plaintiffs if no explanation were given to the defendant If there be an explanation which would excuse the defendant, it has the means of making the proof and should do so, and the plaintiff should not be required to negative every circumstance which might possibly arise whereby the accident might have occurred.”

The authorities cited by appellant are not believed to be in point. They are applicable only in that class of cases in which unlike the case before us, there can be no connection between the negligent method employed by the master and the injury resulting therefrom to the servant. Here the petition alleges specifically: “The defendant, acting through its officers and representatives, caused certain dynamite to be used in and about said premises, and that the defendant, through its officers, representatives, and agents, and its foreman, negligently, recklessly, and carelessly caused, permitted, and allowed said dynamite to be handled, carried, and exposed; that an explosion occurred, and that, as a direct and proximate result of said negligence and explosion, the plaintiff was injured.” It is alleged at considerable length how this dynamite was intrusted to Jaredo to be carried about in an uncovered box, containing loose caps, the dynamite itself being capped, and the allegations show a negligent method of handling the dynamite used in the prosecution of appellant’s work, which might reasonably have been the proximate cause of appellee’s injuries, and distinguishes his case from those in which the doctrine of res ipsa loquitur, strictly speaking, was invoked and relied upon to sustain the charge of negligence; in other words, from those cases in which it was claimed that negligence could be assumed from the mere fact of the accident and the injury.

The next contention is that the court erred in not granting the defendant a new trial in the court below, because the verdict of the jury is contrary to the law and the evidence in that the cause of the accident resulting in plaintiff’s injury is left entirely open to conjecture and guesswork. In this contention we do not concur. The evidence is sufficient to warrant the conclusion that the defendant was guilty of negligence proximately resulting in plaintiff’s injuries in causing or permitting the dynamite to be capped and primed before actually necessary for use in the prosecution of its work, and thus handled and carried about its premises, and in close proximity to where plaintiff was engaged in a performance of the duties required of him, uncovered and unprotected, substantially as alleged in plaintiff’s petition. It shows with reasonable clearness and certainty, at least, that the plaintiff, a negro, had been in the employ of the defendant about a month and a half when injured; that he was employed simply as a laborer; that while dynamite had been, during his term of service, exploded by other employes of defendant around and near him, he had not handled or exploded any himself, and was ignorant of the manner in which it was being handled and cared for; that on the day of the injury, B. R. McConnell, defendant’s vice principal, who had charge of the work of dynamiting, and who controlled and directed plaintiff and his fellow workman, Jaredo, ordered Jaredo to take a small wooden box with three or more pounds of dynamite in it, four sticks of which were primed with fuses and caps, and go and do some blasting of stumps; that it was customary or usual for the dynamite, used by defendant in blasting, to be capped and primed in the quarry before going out to do the work, and to be carried around unprotected; that plaintiff, without being warned or notified that the dynamite had been capped and primed, or of the dangerous character of the work, was .directed by McConnell to go and assist Jaredo in blasting the stumps and to do whatever Jaredo instructed him to do; that, acting upon McConnell’s orders, plaintiff went to where Jaredo was at work, and that while assisting him, under his immediate directions, the box of dynamite, which had been set down upon the ground uncovered by Jaredo a short distance from where plaintiff was at work, exploded, mortally wounding Jaredo and seriously injuring plaintiff. The evidence further discloses with reasonable certainty, if not practically without dispute, that when dynamite is not primed there is no danger of it- exploding, except from an extraordinary shock, and there is no evidence of any such shock; that when it is not capped there is little or no danger of an explosion of it from fire; that there were loose caps in the box with the dynamite, and that they may explode from fire coming in contact with them, and that the explosion of loose caps may create sufficient fire or concussion to explode capped and primed dynamite; that a traction engine was being used by defendant at the time plaintiff was injured about 100 or 150 yards distant from the place when the accident occurred from which sparks of fire were being emitted and blown in the direction of where the box of dynamite was placed when it exploded. The evidence is also sufficient to warrant the conclusion that the dynamite could have been carried without any danger of an explosion if it had not been primed before or until it was actually ready to be used, and if the caps had not been kept in the same box with it; but that priming it before starting out with it, and carrying it in the box unprotected with loose caps was the proximate cause of the explosion, regardless of what unknown physical fact or agency produced the explosion; and that defendant, in the exercise of ordinary care, ought to have anticipated or foreseen the injury to the plaintiff, or some injury of a like character to some other person similarly situated, as a probable result of handling the unprotected capped and primed dynamite. We conclude that the evidence was clearly sufficient to warrant a finding by the jury that the conduct of the defendant, in causing or allowing unprotected capped and primed dynamite to be handled and placed in close proximity to where plaintiff was at work, was negligence, and that such negligence was the proximate cause of plaintiff’s injuries; in other words, we are of the opinion that the evidence discloses that the defendant’s negligence in the respects referred to created the conditions which caused the plaintiff’s injuries, and without which the accident would not have happened.

There was no error in refusing defendant’s special charge to the effect that the mere fact that the dynamite exploded raised no presumption of negligence on the part of the defendant. This instruction was clearly been improper.

Nor do we think the coprt erred in re-given in another special charge requested by defendant, and its repetition would have fusing to instruct the jury, as requested'by defendant, that if they were unable to determine from the evidence what caused the explosion to return a verdict for the defendant. This charge was evidently asked upon the theory that the method of handling the dynamite could not be the proximate cause of plaintiff’s injury, and that if the particular thing or agency that exploded the dynamite was left by the evidence a matter of conjecture or guesswork, plaintiff could not recover. As shown in the former part of this opinion we do not concur in this view of the law. The plaintiff pleads that the negligent method adopted and pursued by the defendant in handling the dynamite was the proximate cause of his injury, and we hold the evidence was sufficient to establish this charge. There was no proof from which the jury could fairly determine what physical fact or particular agency caused the explosion. The special charge under consideration would therefore have been confusing and misleading, and was properly refused. Indeed, the charge, in the state of the evidence, would have been practically equivalent to a peremptory instruction to the jury to return a verdict for the defendant. The court instructed the jury that it was the duty of the defendant to exercise ordinary care to so handle its dynamite that its employes would not be injured thereby, and that if the defendant failed, upon the occasion of plaintiff’s injury, to exercise such care, and such failure directly and proximately caused plaintiff to be injured to find for the plaintiff, but that if they did not find that the defendant failed to exercise such care, or if they found that the failure to exercise such care, if there was such failure, was not the proximate cause of plaintiff’s injury to return a verdict in favor of the defendant. These instructions properly applied the law to the facts, and leaves appellant without any just ground of complaint because of the refusal of its special charge.

The fifth assignment of error charges that the court erred in refusing to rule on the defendant’s motion to exclude the testimony of the witness Sam Johnson, relating to the question of the authority of McConnell and Jaredo, servants of the defendant, to employ and discharge men, before the defendant proceeded with its testimony. This, we regard as a matter largely within the sound discretion of the court and not reviewable on appeal, in the absence of a showing that this discretion was abused to the prejudice of the appellant.

But if it can be said that ordinarily such a motion should be acted upon at such time as was requested by defendant, still it appears that defendant has suffered no injury by the court’s refusal to do so in this instance, because the court afterwards instructed the jury that Jaredo was a fellow servant of the plaintiff, and defendant would not be liable for Ms failure to exercise ordinary care for plaintiff’s safety, and it bas shown conclusively that McConnell was defendant’s vice principal with authority to employ, direct, and discharge the plaintiff.

For the same reason the court’s action in admitting the testimony complained of in appellant’s seventh and eighth assignments of error became harmless and furnishes no ground for a reversal of the case.

We have carefully examined all of the assignments and believe none of them disclose reversible error. The verdict of the jury is supported by the evidence, and the judgment is affirmed.