author: WALKER, Chief Justice.

text:
    MUTUAL LIFE & LOAN ASS’N OF AMERICA v. HOUSTON.
    No. 2361.
    Court of Civil Appeals of Texas. Beaumont.
    April 5, 1933.
    Rehearing Denied April 19, 1933.
    Sullivan & Wilson, of Dallas, for appellant.
    Richey & Sheehy, of Waco, for appellee.
   WALKER, Chief Justice.

On the 3d of April, 1930, appellant, Mutual Life & Loan Association of America, chartered under the laws of Texas, with its home office at Dallas, Tex., issued to J. C. Houston, deceased, a certificate of insurance reading, in part, as follows:

“Business Men’s Special.
“No. 1041 Not to Exceed $2,500.00
“Age 60
“The Mutual Life & Loan Association of America chartered under the laws of Texas, Dallas, Texas,
“Agrees to pay not to exceed the sum of two thousand five hundred dollars at its main office in the 'City of Dallas, Dallas County, Texas, upon due notice and satisfactory proof of the death of Mr. J. C. Houston, insured member, during the continuance of this certificate, to Mr. S. Y. Houston (Brother) of the insured, if living, if not to the next of kin, as provided in the Constitution and By-Laws of the Association, all to be based upon the following conditions and provisions, tow it:
“1st. This certificate is issued in consideration of, and upon the basis of the statements contained in the application therefor, which is made a part hereof, and warranted to be true in every respect.
“2nd. The beneficiary shall accept as full settlement of any claim hereunder, Two Dollars Fifty Cents ($2.50) that shall be received by the Association from each member, who responds to the death assessment call, not to exceed Twenty-Five Hundred Dollars ($2,500-00).
“3rd. The member also agrees to pay upon the death of any fellow member the sum of Two Dollars Seventy-five cents ($2.75) as a death assessment, when due call is issued therefor by the Board of Directors.
“4th. The member herein named agrees to pay upon call for same the sum of Two Dollars Seventy-five cents ($2.75) as an emergency mortuary assessment, thirty days after date of issue of this certificate; and a like amount upon call of the Board of Directors any time within twelve months from date hereof; provided, that not more than two such emergency mortuary assessments shall be made in any calendar year.
"5th. The member herein named agrees to pay the sum of Pour Dollars ($4.00) as semi-annual dues, said payment to be made on the first day of November and first day of May in each and every year.
“6th. All assessments provided herein must be paid within Fifteen (15) days from date of call for same, and failure on the part of the member to pay any such assessments shall render this certificate null and void until duly reinstated as provided under the Constitution and By-Laws.
“It is mutually agreed and understood that the provisions on the reverse side hereof are a part of this contract as fully as if written over the signatures hereto affixed.
.“This policy shall not be binding upon the Association until signed by ■ the person in whose name it is written.
“I have read this certificate and I understand each and every condition and provision contained herein and I, of my accord, accept same and agree to be bound hereby and 1 warrant that I am in good health, this the -day of-, A. D. 192 — .”
“The application” referred to in the first paragraph of the certificate contained the following provision: “I hereby make application for membership in the Mutual Life and Loan Association subject to the provisions of the certificate.” .“The provisions on the reverse side hereof” referred to in the sixth paragraph, contained the following provisions: (a), “It shall be the duty of each member of this association to notify the secretary of any change in address”; (b) “no liability shall rest upon this association, nor upon any member, representative or director, for any representation,” etc.; (c) “all claims against the association shall be paid in the order in which they are filed”; (d) “the regular application, the medical examination, this certificate, the constitution and' by-laws now in force, or that may be hereafter enacted, and all rules and regulations of the association, shall be and constitute the entire contract.” The statement óf facts does not contain the by-laws and constitution of appellant. Mr. .1. O, Houston died in November, 1930, and proper proof of his death was made. The certificate was in good standing at the time of his death. Appellant conducted its insurance business in five groups, with a combined membership in all groups of about 1,000 at the time of the death of J. O. Houston. At receipt of proof of death of Mr. Houston, appellant levied an assessment upon its classification known as “Business Men’s Special,” and sent out 168 assessments, upon which it received $498. Of the numbers assessed 41 failed to respond. The “Business Men’s Special” classification was organized about March, 1930, and at the time of the death of J. O. Houston contained 168 members, and the assessment was made against each member. Appellant sent its check to the beneficiary for $500 in payment of the amount due under the certificate. The beneficiary, appellee herein, refused to accept the tender and instituted this suit for $2,500, the maximum coverage under the certificate, with .prayer for attorney’s fees and damages. The allegations of the petition were sufficient to state a cause of action for the relief prayed for. Appellant filed a plea of privilege, which was overruled, and no point is before us against that ruling. On the merits, appellant answered by general demurrer, general and special denials, and by the following special plea:
“And further answering herein, if same be necessary, this defendant says that it had and carried a policy as shown attached to plaintiff’s original petition, and that under the terms and conditions of said policy this defendant levied assessments on the members holding policies under the Business Men’s Special, and that it only received in reply thereto the sum of $498.00 which said sum they remitted by certified check for the Liberty National Bank of Waco, Texas, payable to the plaintiff, S. V. HoustQn, in the sum of $500.00. That the list of members so assessed responded only in the above stated instance, and that said sum was all the money collected from the members of this association on said policy; and that under Section Two (2) of the policy it reads as follows:
“ ‘The Beneficiary shall accept as full settlement of any claim hereunder, Two Dollars Fifty Cents ($2.50) that shall be received by the Association from each member who responds to the death assessment call, not to exceed Twenty-Five Hundred Dollars ($2500.-00).’
“That said sum represented all the money this defendant received on the death call assessment for the death of J. O. Houston, and has paid same, as herein shown, to the plaintiff, who was the beneficiary named therein.”

Upon trial to the court without a jury, judgment was rendered for appellee for $2,-500,12 per cent, damages, and $500 attorney’s fees. The appeal was to the San Antonio Court of Civil Appeals, transferred to this court by order of the Supreme Court.

The two points made by the appeal are: (1) The $500 tendered was the full amount due under the certificate; (2) appellant was not liable for attorney’s fees and damages.

A mutual insurance association, conducted upon the assessment plan, has the right to divide its membership into classes, and to limit the benefit of its certificates to the classification in which they are issued. Fort Worth Mutual Benevolent Ass’n v. Akin (Tex. Civ. App.) 9 S.W.(2d) 398; Fort Worth Mutual Benevolent Ass’n v. Guire (Tex. Civ. App.) 292 S. W. 910; Home Benefit Ass’n v. Griffin (Tex. Civ. App.) 10 S.W.(2d) 568; 6 Tex. Jur. 504. But where the membership is not classified, the association is liable, under its certificate, for the maximum amount of coverage provided therein, subject, however, to the right on the part of the association to plead and prove facts under the conditions of the policy which would reduce the amount of recovery below the maximum; and where the membership has been classified, the member must be advised by the provisions of his certificate, or otherwise, that he has been classified and that the amount of his certificate is limited to assessments against his classification. Unless he is given this information, all testimony by the insurance association as to the classification of its membership is immaterial, and the association remains liable as if no classification of its membership had been made. Fort Worth Mutual Benevolent Ass’n v. Haney (Tex. Civ. App.) 17 S.W.(2d) 104. Under the legal propositions just stated, the questions of fact are whether or not appellant had assigned J. C. Houston to a special classification and advised him of that fact. There is no suggestion in the record that he had any notice of an attempted classification except by the terms of his certificate. The certificate begins with the statement “Business Men’s Special.” There is no other reference 'to “Business Men’s Special” in the certificate itself or in the application upon which it was issued, or in the provisions on the reverse side of the certificate. All references are to the membership of the association as a whole. Thus, it is provided that all claims against the association shall be paid in the order in which they are filed. There is nothing to advise the insured that the claim under his certificate would be paid in the order in which it was filed against “Business Men’s Special” ; section 2 of the face of the certificate provides that it shall be paid by assessments of $2.50 against each member of the association, without any reference whatever to the classification “Business Men’s Special.” The most that can be said in favor of the contention of appellant is that the certificate of insurance was ambiguous. On that conclusion, the ambiguity must be resolved against appellant and in favor of the appellee. From this it follows that the trial court correctly rendered judgment for the $2,500.

Mutual insurance associations of the character of appellant are not liable for attorney’s fees and penalties. Pledger v. Business Men’s Accident Ass’n of Texas (Tex. Com. App.) 228 S. W. 110; International Travelers’ Association v. Branum, 109 Tex. 543, 212 S. W. 630; Stephenville Mutual Life Ins. Ass’n et al. v. Gant (Tex. Civ. App.) 7 S.W.(2d) 119; Covington v. Sextet Local Mutual (Tex. Civ. App.) 8 S.W.(2d) 679; Id. (Tex. Com. App.) 15 S.W.(2d) 614.

The order is that the judgment of the lower court be reformed by eliminating the attorr ney’s fees and damages, and, as reformed, in all things affirmed.

Reformed and affirmed.


source: Caselaw Access Project

author: CONNER, Chief Justice.

license: Public Domain

text:
    LADD v. UPHAM.
    No. 12800.
    Court of Civil Appeals of Texas. Fort Worth.
    March 11, 1933.
    Rehearing Denied April 8, 1933.

      Reynolds & Heare, of Shamrock, for appellant.
    H. B. Penix, of Wichita Falls, and W. H. Penix, of Mineral Wells, for appellee.
   CONNER, Chief Justice.

This suit was instituted by Paul Ladd in the district court of Wichita county against D. A. Upham to recover the sum of $19,432.81, together with interest and costs of suit.

Omitting jurisdictional and other allegations not necessary to mention, plaintiff alleged that he was the owner of a certain tract of land described in his petition, which, on November 5, 1929, was held and possessed by the defendant, Upham, under a certain oil and gas lease executed by the plaintiff and his wife; that said lease contained the following express conditions and obligations, to wit:

“The lessee shall pay lessor, as royalty, one-eighth of the proceeds from the sale of the gas, as such, for gas from wells where gas only is found, and where not sold shall pay Fifty ($50.00) Dollars per annum as royalty from each such well, and while such royalty is so paid, such well shall be held to be a producing well under paragraph numbered two hereof. The lessor to have gas free of charge from any gas well on the leased premises for stoves and inside lights in the principal dwelling . house on said land by making his own connections with the well, the use of said gas to be at the lessor’s sole risk and expense. The lessee shall pay to lessor for gas produced from any oil well and used by the lessee for the manufacture of gasoline, or any other product, as royalty one-eighth of the market value of such gas. If said gas is sold by the lessee, then as royalty one-eighth of the proceeds of the sale thereof.”

Plaintiff further alleged that from November 5, 1929, to May 1, 1931, the defendant had sold at points off the premises 323,859,600 cubic feet of gas for the sum of $161,929.80, of which amount defendant had paid only the sum of $809.69, thus leaving a balance of $19,432.81 justly due and payable to plaintiff under the terms of said lease, which, together with interest and costs as stated, plaintiff sought to recover.

Defendant answered by a general denial and a general demurrer and certain special exceptions. The court sustained the general demurrer and the special exceptions, and t]he plaintiff having declined to amend, the cause was dismissed. From the order of dismissal the plaintiff has appealed and assigns error to the court’s ruling.

Appellee concedes, as must be done under the rule which obtains in such cases, that the sufficiency of the special exceptions to the petition may be here passed as immaterial without discussion in view of the court’s ruling upon the general demurrer. See City of Dallas v. Shows (Tex. Com. App.) 212 S. W. 633; Karnes v. Barton (Tex. Civ. App.) 272 S. W. 317; Bigham Bros. v. Port Arthur Channel & Dock Co., 100 Tex. 192, 97 S. W. 686, 13 L. R. A. (N. S.) 656.

Appellee’s contention before us, however, which presumably was adopted by the trial court, is that by the provisions of the lease made by Ladd and wife, the petition “shows on its face that appellant is entitled to one-eighth of the sale price of the gas as measured into the pipe line of the appellee which connected with said well, and not the price or value that appellee obtained for said gas at some place off the premises and at McLean and Alanreed, to which it was transported by him,” and that hence the trial court properly sustained the general demurrer. To sustain this contention appellee cites the eases of Martin v. Amis (Tex. Com. App.) 288 S. W. 431; Rains v. Kentucky Oil Co., 200 Ky. 480, 255 S. W. 121; Scott v. Steinberger, 113 Kan. 67, 213 P. 646, 647; Thornton’s Law of Oil & Gas, vol. 1, p. 257.

We think the cases cited' are distinguishable from the one before us. The ease of Scott v. Steinberger appears to be the one most strongly relied on, but in that case the payment of royalties was: “Party of the second part [the lessee] shall deliver to the credit of party of the first part [lessor] free of cost in the pipe lines to which he may connect his wells one-eighth of all oil produced and saved on said premises, and shall pay the market price' for same in cash if party of the first part shall so desire, and shall pay to party of the first part one-eighth of all gas produced and marketed.”

It was held that the lessor was entitled to receive his share as measured into pipe lines which connected with the wells and not at some distant market that might be found at the end of the pipe line to which it was transported and sold.

In the Scott Case, under the terms of the lease one-eighth of the gas belonged to the lessor upon its arrival,at the top of the well and was to be delivered there to him, and the court considered under all of the terms that it would be inequitable for the lessor to demand free of cost the market price of the oil at a distant point to which the lessee had been at large expense in constructing pipe lines, etc.

In the case before us, as appears from a copy of the lease attached to the petition, the lessee was not bound to deliver any part of the gas to the lessor at the mouth of the well. To repeat, the terms of the lease are specifically that “the lessee shall pay lessor as royalty one-eighth of the proceeds from the sale of gas as such. * * * ” In view of these express terms we feel unwilling to say that the lessee would be compelled to deliver to the lessor at the mouth of the well any part of the gas produced. The lessee under the terms of the lease was given full power and control of the entire production and if in order to obtain a better price for the gas he chose to construct pipe lines or otherwise convey it to a point or points beyond the lease and thus receive greater profit, he could do so but could not escape the obligation in favor of the lessor imposed by the terms of the lease.

Mr. Thornton in his Law of Oil & Gas, vol. 1, § 251, refers to the general rule that a deed is construed most strongly against the grantor and in favor of the grantee, but says: “Such is not the case in an instance of an oil or gas lease.”

The author further says: “These contracts are looked upon somewhat in the same light as contracts of insurance. By long experience insurance companies have been enabled to draw a policy which is often difficult to determine just what their liability may be. They have their attorneys who have spent years in studying contracts of insurance and the decisions of the courts, until they have become thoroughly versed in all phases of such contracts. On the other hand, the insured is usually without advice when entering into a contract of insurance, and he is almost universally ignorant of the rules of law applicable to such obligations. To such an extent is this true that the courts have adopted a construction, in cases of doubt or obscurity, favorable to the insured. What is true of insurance contracts, may be said to be true of oil or gas leases (if not of mining leases). The lessor usually knows nothing of the law applicable to such instruments; while the operator is usually well informed. Years of experience have shown the operator how to draw a lease giving him many advantages, of which the lessor has not even thought. For this reason the courts have adopted a rule to the effect to construe an oil or gas lease most favorably to the lessor, where its terms can be so construed without doing violence to the language used.”

As before stated, attached to plaintiff’s petition was a copy of the lease under which the defendant was operating. Unlike leases of a familiar form, there was no reservation of title to gas produced from the well but full right and power of disposition thereto was vested in the lessee; nor was there a provision that any part of the gas was to be delivered to the lessor at the mouth of the well, the terms of the lessor’s compensation being expressly fixed as hereinbefore stated that “the lessee shall pay lessor, as royalty, one-eighth of the proceeds from the sale of gas, as such, for gas from wells where gas only is found, and where not sold shall pay Fifty ($50.00) dollars per annum as royalty from each such well. * * * ”

Webster thus defines the term “proceeds”: “The amount realized from the sale of property.”

In State ex rel. Ledwith v. Brian, 84 Neb. 30, 120 N. W. 916, 917, the term “proceeds” is thus defined: “The amount proceeding or accruing from some possession or transaction.”

In Dittemore v. Cable Milling Co., 16 Idaho, 298, 101 P. 593, 133 Am. St. Rep. 98, it is said that “ ‘proceeds’ is' synonymous with product, income, yield, receipts, returns, and, as used in relation to an execution sale, means all that was received from the sale.”

In Collier v. Munger, 75 Kan. 550, 89 P. 1011, by the Kansas Supreme Court, it is said, quoting from the headnote, that: “The language of an oil and gas contract will be given its ordinary and commonly understood meaning where no reason appears for doing otherwise.”

We conclude that the court erred, in sustaining the general demurrer. The judgment must be reversed and the cause remanded.


author: GRAVES, Justice.

text:
    ULLMAN, STERN & KRAUSSE, Inc., v. COLSON et ux.
    No. 9785.
    Court of Civil Appeals of Texas. Galveston.
    Feb. 9, 1933.
    Eehearing Denied March 30, 1933.
    On Eehearing April 13, 1933.

      Hal B. Stoneham and T. P. Buffington, both of Navasota, for appellant.
    M. L. Bennett, of Normangee, and Haynes Shannon, of Navasota, for appellees.
   GRAVES, Justice.

This coneededly correct statement is taken from'appellants’ brief:

“This suit was brought by B. N. Colson and wife, Rosa Colson, in trespass to try title against appellants for lots 3 and 4, block 35, Iola, Texas.
“Plaintiffs allege that on May 10, 1928, B. N. Coifeon and wife conveyed to Ullman, Stern & Krausse the property in controversy by deed; that the property was a business homestead ; and that the deed was intended as a security for debt.
“Plaintiffs further set up that there was a failure of consideration for the deed.
“There were further allegations in plaintiffs’ petition having reference to Mrs. Rosa Colson’s acknowledgment, but the court in its final submission to the jury limited the controversy to the two questions:
“First, was the deed given as a security for debt?
“Second, if not, was there a failure of consideration?
' “Plaintiffs’ prayer was for a cancellation of the deed; for judgment against this defendant; for any excess paid defendants, because of the transaction being ⅜ simulated one; for .judgment for an excess payment over, the sum of twenty-eight hundred and fifty ($2850.00) dollars, including the value of the building, the value of the vendor’s lien notes, and of the customers’ notes, for costs, and for general relief.
“The defendants answered by a general demurrer, by general denial, by a plea of not guilty, by a plea of res adjudicata as to the vendor’s lien notes held on lot 2, block 35, Tola, Texas, and by alleging the validity of the deed to lots 3 .and 4, block 35, Iola, Texas.
“When finally submitted, as before stated, only two special issues were answered, and in these answers the jury found that the deed was not intended to convey the title to the property, and that the deed was intended as a -security for debt.
“On these answers the court rendered judgment for the plaintiffs, canceling the deed, and for recovery of fifteen feet of lot 3 and fifteen feet of lot 4, in block 35, Iola, Texas.”

On the appeal to this court appellants first complain of the overruling of their general demurrers to certain different specified portions only of the appellees’ trial petition, but failed to show by a bill of exceptions, reference to the judgment, or otherwise, that the court overruled or acted upon either of them in any way; wherefore, nothing in respect to them is presented for review here, since in effect they only amounted to special exceptions, and no fundamental error arises on consideration of the whole pleading. 3 Tex. Jur. p. 153, and cited authorities.

Next, there are a number of complaints against the admission of the testimony of different witnesses, but no bills of exception setting out what the testimony was, or showing that the same was objected to at the time, appears in the record as to any of them; hence none of these can be considered. 3 Tex. Jur. p. 157, footnote 19.

The same condition also exists as to the presentment that there was error in permitting the attorneys for appellees to ask the witness J. T. Swanson certain questions as to what the two grocery firms were out in buying in the stock of goods, fixtures, vendor’s lien and customers’ notes in their transactions with Mr. Colson.

The attack upon the sufficiency of the evidence to sustain the jury’s answer that the deed in evidence was intended as a mortgage cannot be sustained; on a careful examination of the statement of facts, it is the finding of this court that the evidence was clearly sufficient to sustain the verdict returned, wherefore this court is without authority to set it aside.

Upon the whole, as presented here, we conclude that this record shows no error which would justify a reversal; hence the trial court’s judgment will be in all things affirmed.

Affirmed.

On Motion for Rehearing.

In its motion for rehearing appellant, after quoting certain testimony from the witnesses Earnest N. Colson and J. T. Swanson, and reciting its exception to the same, as shown by pages 9 and 102, 103 of the statement of facts, says: “The court evidently overlooked the fact that on pages 8⅛ 9, 102 and 103 of Statement of Facts, bills of exceptions were duly reserved, and that this testimony alone caused the trial court to submit to the jury Special Issue No. 2.”

On referring to this testimony, it will be found to have no bearing upon question No. 2, as shown by the Transcript, p. No. 23, to have been submitted to the jury, inquiring whether the instrument in suit was intended as security for debt; wherefore, in any event, it was harmless. But there was other relevant testimony amply justifying the submission of that issue. Further in this connection, the statement copied in our original opinion from appellant’s brief to the effect that the second question submitted by the court to the jury was whether there had been a failure of consideration for the debt is error, since the second special issue, as just above stated, was whether or not the instrument was intended as security for debt. The correction is accordingly made.

Unconvinced of error in our original disposition of the cause, the motion for rehearing has been overruled.

Overruled.


author: LATTIMORE, Justice.

text:
    ASKEY v. POWER et al.
    No. 12777.
    Court of Civil Appeals of Texas. Fort Worth.
    Feb. 18, 1933.
    Rehearing Denied March 25, 1933.
    See, also, 21 S.W.(2d) 326; 36 S.W.(2d) 446.
    John L. Poulter, of Fort Worth, for appellant.
    C. T. Gettys, of Decatur, for appellees.
   LATTIMORE, Justice.

D. L. Power died survived by a wife and several minor children and seized of a community estate of about 1,300 acres of land, all covered by one or more mortgages. Ap-pellee T. J. Power was appointed administrator. In December, 1926, the probate court of Wise county set aside a homestead of 200 acres which we designate “No. 1” out of said estate.

A portion of this land was due to be used for a lake being built by a water improvement district. Mr. Slay, a member of the board of directors of said district, made a contract with the widow in November, 1927, the exact day not proven, that she take another homestead which we name “No. 2,” selected for her by the judge of the probate court of Wise county, and, in the event she did so, and he could secure the transfer to him of the balance of the land in administration, including “No. 1,” such transferee would deed back to her 100 acres adjoining such “No. 2.”

On November 29, 1927, said probate judge entered an order reciting the same to be done “of his own motion,” and finding “No. 1” “practically valueless as a homestead,” and reciting that the order designating “No. 1” is set aside and that “No. 2” is set apart as a homestead for the widow and minor children of the deceased, and thereafter approved an application by the administrator to deed to Mr. Clyde Slay all of the land of said estate, except “No. 2,” in consideration that Slay assume the mortgage liens, two in number, and the delinquent taxes against same, and in January the administrator executed such deed. Ten days later Clyde Slay deeded to the widow the 100 acres of land, reciting $1 cash and a note for $200 payable to the widow’s attorney, which was admittedly for the sole purpose of paying her attorney fees in the administration of the estate.

Appellant appeared in the probate court and protested the designation of “No. 2” and the sale to Slay. No one has appealed from either order. The court in 1926 made an allowance of $1,000 for the widow’s maintenance which has not been paid.

Appellant, one of several general creditors, and having a judgment against the deceased husband, brings this suit to subject the 100 acres to the payment of his claim. On trial the court instructed a verdict against him.

Fortunately, we are not called upon to decide filie validity of the designation of “No. 2” as a homestead, for no one seeks to set aside the action of Slay in alienating the 100 acres; on the contrary, all parties to this suit uphold it, the one difference between them being that appellant claims the 100 acres is the purchase price of the balance of the estate and is there: fore subject to his debt. Appellee contends that it is the exchange price for the trade of less valuable No. 2 for the more valuable No. T.

This 100 acres involved descended to the heirs subject to the debts of the estate. In an effort to dispose of some of those debts, the administrator sold a part of the estate with the approval of the probate court, and such judgment regularly pronounced and un-appealed from is final and cannot be collaterally attacked. Giddings v. Steele, 28 Tex. 733, 91 Am. Dec. 336.

Appellant does not in so many words in his pleadings allege a fraud, but in his brief he contends that Slay and the administrator and the widow perpetrated a fraud upon the creditors, and that a constructive trust in behalf of the creditors upon the 100 acres arises. More properly on the pleadings, his trust, if claimed, is a resultant trust. However, it seems plain that the fraud, if any, was perpetrated upon all the creditors, and that the 100 acres would be subject in equal right to all the creditors, of whom there are others than appellant. No demand has been made on the administrator to sue for the land, nor on the probate judge to require the administrator to do so. Neither has there been an application for the appointment of an administrator de bonis non, though each of these remedies is provided by our law. Articles 3428, 3429, 3452, Rev. Civ. Statutes.

Appellant may contend that the facts showing that the county judge knew, at the time he ordered the sale, that Slay had promised the widow this 100 acres, make any such procedure futile, but the answer is that appellant may appeal from the adverse holding of the probate judge. Our holding is not to be confused with those cases ruled by Douglas v. First State Bank of El Dorado, 120 Tex. 631, 40 S.W.(2d) 801, where a decedent had made a deed in fraud of his creditors. Such property is no part of the estate. Wilson v. Demander, 71 Tex. 603, 9 S. W. 678, although the creditors have rights therein. To uphold this action would be to give license to every person interested in an estate who felt aggrieved at the discretion exercised by any sale therein to go into some other court and file suit.

It appears from the evidence that what actually occurred was that the widow agreed with Slay to trade her designated homestead “No. 1” for “No. 2,” plus the 100 acres, in the event the sale to him by the administrator was completed. The question of whether “No. 1” should be abandoned as a homestead rested entirely in the control of the widow, though the children’s title therein vested on the death of their father, subject to the payment of debts. The estate is insolvent. If the widow traded the 200 acres which thus vested free of debts for 300 acres elsewhere, however vulnerable the title acquired thereby may have been upon attack by a proper party, no creditor can complain. That this 300 acres was formerly a part of the estate is immaterial. If the act diverting it from the estate was an abuse of the power of the probate court, then appellant should have appealed. This he did not do. He here claims a fraud perpetrated by the administrator, a thing which he could not or would not support by a direct attack where that issue could be thoroughly investigated.

It is interesting to note that, should the 100 acres be returned to the administrator, he must sell it to pay the allowance of $1,000 for the support of thei family. The evidence shows it to be worth between $400 and $800. The only effect of such would be to take from the family the expense of administration thereon. While we are not able, in the face of the statutory declaration that only personal property may be delivered in lieu of the allowance, to say that this 100 acres should be left with the widow because of the unpaid allowance, yet it is interesting to note that our Supreme Court upheld the refusal to reopen an administration to pay a claim of $66, admonishing the parties that, because of the great difference in the cosit of the two proceedings, the creditor should sue the heirs. Turner v. Wallace, 99 Tex. 543, 92 S. W. 31.

We have examined all assignments, and the judgment is affirmed.


text:
    MASTERS v. ÆTNA INS. CO.
    No. 12757.
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 21, 1933.
    Rehearing Denied March 11, 1933.
    George M. Hopkins, of Denton, for appellant.
    Thompson, Knight, Baker & Harris and Pinkney Grissom, all of Dallas, for appellee.
   LATTIMORE, Justice.

Appellee issued its fire policy dated October 18, 1926, to one Beck, insuring in the amount of $1,000 for three years from October 1, 1926, and providing that either party might cancel out or reduce the amount of the insurance. Appellant purchased the property from Beck, the insurance policy was transferred to appellant and thereafter the appellee reduced its insurance policy to $600. The policy thus by its terms purported to terminate October 1, 1929. The property insured was about 12 miles from Lewisville where the local agent of appellee lived. On October 9, 1929, the agent wrote to appellant at San Antonio, his home, inclosing application for renewal of “your fire policy” and stating the amount of premium. Appellant was not at home but was in North Texas. Being in Lewisville, he heard that the agent wanted to see him, went to the agent’s office, found the agent not in, inquired of some one there what the agent wanted, but received no information thereon. Appellant went to Dallas where the agent’s letter of October 9th, forwarded, was delivered to him.

Passing through Lewisville on the night of October 26, 1929, he called the agent, who told him he wanted to see him about renewing his fire policy. Appellant asked what the premium was, and the agent did not have his rate book at home but promised to write appellant on October 28, 1929, at the address appellant gave him, which was some 12 miles from Lewisville, and state the amount of the premium. The agent did not write until the 30th of October, when he sent appellant a copy of his letter of the 9th and inclosed another application for insurance. This application stated that the insurance applied for in such application was in full force for 15 days unless otherwise terminated. The application was never filled out or signed. This letter appellant received on October 31, 1929, and en route to see the agent was informed that his property had been destroyed by fire.

The assured contends that the original contract of insurance was in force by virtue of a three-year premium which paid from October 18, 1926, to October 18, 1929, and extended insurance by virtue of the reduction of the face of the policy, without returning all the premium received for the balance thus canceled.

The defendant’s evidence shows, however, that the excess premium on reduction of the policy was returned to appellant. Aside from that the retention of that premium by appellee, unaccompanied by any facts showing any meeting of the minds on extended insurance, or any then reliance on same by insured, would not justify the law in writing a contract for the parties. In fact the record shows that after that reduction the appellant treated his policy as expiring on October 1, 1929.

This is not contra to Phœnix Assurance Co. v. Hunger, 92 Tex. 297, 49 S. W. 222. That case held the cancellation ineffective without return of the premium. On that authority, if the premium was not returned to appellant, the reduction was ineffective and the insured retained his $1,000 policy in full force. If it be conceded that the policy can be reformed as to be enforceable for three years insurance from October 18, 1926, it yet does not cover the fire on October 30, 1929.

The record of the dealings of the parties after October 1, 1929, shows nothing more than a desire on the part of the agent to write a renewal policy and an uncertainty on appellant’s'part as to whether he wanted it or not until he knew what the premium was.

We have examined all assignments of error and they are overruled. The judgment is affirmed.


author: LANE, Justice.

text:
    TEXAS NEWS CO. et al. v. LAKE et al.
    No. 9848.
    Court of Civil Appeals of Texas. Galveston.
    March 28, 1933.
    Rehearing Denied April 20, 1933.
    John F. Battaile, of Houston, for appellants.
    Hart & Stiglich and Geo. P. Prendergast, all of Galveston, for appellees.
   LANE, Justice.

This suit , was brought by Anna R. Lake, joined by her husband, C. W. Lake,, against Texas News Company and Home Indemnity Company of New York, to recover damages suffered by her by reason of alleged negligence of an agent of Texas News Company in . the operation of an automobile truck owned by said news company.

Plaintiffs alleged that the Texas News Company’s agent and servant in charge of .and driving a truck owned by such Nows Company, in the course of his employment carelessly and negligently drove said truck against an automobile owned by plaintiffs in which Mrs. Lake was sitting, and by reason thereof the plaintiffs’ automobile was completely demolished and Mrs. Lake seriously injured, causing her to suffer both mental and physical pain and agony, to her damage in the sum of $20,000; that by reason of the collision resulting in the injuries to Mrs. Lake and to plaintiffs’ automobile, plaintiffs “have been compelled to employ extra help, medical service and nurses, and expend a large amount for medicine, bandages, etc., and for these items, together with replacing and repairing damages to her clothing and their automobile,” plaintiffs have expended the sum of $400.

The Home Indemnity Company was made a party defendant by reason of the fact that it had issued to the Texas News Company a policy for the benefit of such company and all persons killed or injured by the company’s truck.

Texas News Company answered by general demurrer, general denial, and a special plea of contributory negligence.

The indemnity company answered by pleas in abatement and special exceptions, all of which were overruled by the court. It also denied generally the allegations of the plaintiffs’ petition.

The cause was tried before a jury, and at the close of the evidence defendants requested the court to instruct a verdict in their favor, which was refused.

The cause was then submitted to the jury upon special issues, in answer to which the jury found: That at the time of the collision in question Earl Belanger, agent of Texas News Company, was in the performance of an errand or duty of his employer; that at such time he was driving defendant’s truck at a greater rate of speed than 20 miles per hour;. that in driving the truck at such speed he was guilty of negligence; and that such negligence was a proximate cause of the collision and the injuries to the plaintiff.

There were other issues relative to negligence submitted, all of which were answered favorably to the plaintiffs.

The jury found that $1,000, if paid in cash, will,reasonably and fairly compensate plaintiffs for the injuries complained of. *

Upon the verdict of the jury judgment was rendered for the plaintiffs against the defendants, jointly and severally, for the sum of .$1,000, and from such judgment both defendants'.have appealed.

For reversal of the judgment appellants insist (1) that the court erred in overruling their request for an instructed verdict in their favor, in that the uncontradicted undisputed evidence shows that at the time of the collision in question Earl Belanger, servant of Texas News Company, was using the •truck in question on an errand purely his own; that the only evidence adduced shows that the driver of the truck, at the time of the collision, was on an errand purely his own; (2) that the finding of the jury, that at the time of the collision the truck was being driven by the servant in performance of an errand or duty of his employer, is so against the great weight and preponderance of the evidence as to he wholly wrong.

Upon such contentions appellants pray for a reversal of the judgment and for a rendition of judgment in their favor by this court, but in the event this prayer is not sustained, they pray for a reversal of the judgment and a remand of the cause.

We agree with appellants’ contention that the court erred in refusing their request for an instructed verdict in their favor.

It has been held that proof of the ownership of a truck or car causing an accident, and additional proof that at the time of the accident such truck or car was being operated by one who was in the employ of the owner, makes out a prima facie case against the owner, such holding being based on a presumption that at the time and place of the accident such truck or ear was being operated on behalf and for the master, the owner thereof. Studebaker Bros. Co. v. Kitts (Tex. Civ. App.) 152 S. W. 464, 467. In this case the plaintiffs’ right of recovery, if any, must depend alone upon the force of the legal presumption above mentioned, because there is no evidence showing that the mission of the operator of the truck in question at the time of the accident was one for the master, the owner of such truck.

“Such presumption does not rest on an inference of fact. The fact of ownership from which the presumption arises is not regarded as any evidence of the fact presumed, but the presumption is a mere rule of procedure, and is put to flight by an unequivocal showing on the part of the owner that the ear was not driven by him, nor by his servant acting within the scope of his employment. Bond v. St. Louis-San Francisco R. Co., 315 Mo. 987, 288 S. W. 777.” Murphy v. Tumbrink (Mo. App.) 25 S.W.(2d) 133. 134.

The undisputed testimony of all the witnesses relative to such question negatives such conclusion.

The plaintiff called as a witness the defendant’s truck driver, Earl Belanger,, who testified on plaintiff’s examination: That he was in the employ of the defendant company on the day of the accident; that his duties were to deliver magazines and collect bills; that the truck was delivered to him by the news company; that he had control of the truck while on duty; that his hours of work were from 8 in the morning until around 4:30 to 5 p. m.; that at the time of the accident he was operating the truck referred to, and that his wife was with him in the truck; that the car was kept in a garage in Galveston, which was rented for that purpose by his employer.

On cross-examination this witness testified: That the accident occurred on Saturday afternoon, November 1, 1930; that he got off from work on Saturdays at 12 o’clock, and on the day of the accident he had quit work and gone home, where he arrived about 12:30 noon, parking in front of his house; that when the accident occurred he and his wife and a little child five years old were driving around “going nowhere in particular,” but that they left home with the intention of going and getting groceries, going from their home on Sixth street to the Beach boulevard, and were traveling west on the boulevard when the accident occurred; that they were just driving out the boulevard before going to the grocery; that after the accident Mrs. Belanger drove the truck on home; that he had no authority to use the truck in his own business or for his own use and purposes; that he had orders not to use it except on company business.

On redirect examination he testified: That the rent on the garage where he kept the car was paid by the news company; that Mr. Rhinelander was the manager of the company at Houston; and that he works under him.

On recross-examination the driver testified: He had driven about 1 ⅛ to 2 miles when the accident occurred; that he was not going to deliver any magazines, but was going after their groceries, and nothing' else. That at the time of the accident he was not going any place for the news company..

Mrs. Belanger, the wife of the truck driver, called by defendants, testified substantially to the same effect, corroborating the driver in his testimony as to the errand upon which they were at the time of the accident. She testified: That Earl had come home from work for the day and “we were on our way for groceries and we took a ride on the way”; that the accident occurred about 4 o’clock Saturday afternoon; that Earl (the driver) came home about 12 o’clock noon and stayed at home until about 3:30. “We got in the truck and taken our ride and the accident happened at 4 o’clock.”

On cross-examination she testified: That Earl did not work on Saturday afternoons, not after 12 o’clock; that the little child was sitting 'on the right-hand side of the truck and she was in the middle.

Mr. Rhinelander, the manager of the Houston branch of the defendant company, called by defendants, testified as follows: That he was the manager at the time of the accident, his territory including Houston, Galveston, and Beaumont; that Earl Belanger worked for him and his duties were to deliver and pick up magazines and collect bills; that the truck he used was furnished by the Houston News Company; that the truck was to be used solely for the purpose of delivering and picking up magazines; that Belanger had no authority to use it for personal errands; that Belanger had orders not to use the truck for any other purpose except company business; that Belanger was on duty for the company from 8 a. m. to 5 p. m., with the exception of Saturdays, when his day’s work was over at 1 o’clock.

On cross-examination he testified: That the garage in which the truck was kept at Galveston was rented by the news company; that it was Mr. Belanger’s duty to put the truck in the garage each day at 5 o’clock and by 1 o’clock on Saturdays.

It is not disputed that the accident occurred on Saturday afternoon, around 4 to 4:30 p. m. It is likewise not disputed that the services of the truck driver to his master terminated at noon on Saturday^, and at 5 o’clock on week days. Nor is it disputed that he had driven about a mile and a half or two miles along the Beach boulevard, the main scenic drive in Galveston, when this accident occurred.

The foregoing testimony is substantially all of the testimony as to what the truck driver’s real errand was upon the occasion in question. There is no evidence as to any other purpose for the trip upon which he was engaged. Not only is this the testimony of the truck driver, but it is the testimony of his wife, who was with him at the time. The third party in the truck, on account of her age (five years old), was not called as a witness.

We think, under the undisputed facts shown in this case, the court erred in refusing appellants’ request for an instructed verdict in its behalf. Such refusal is contrary to the weight of - authority in this state and elsewhere. Van Cleave v. Walker (Tex. Civ. App.) 210 S. W. 767; Hill v. Staats (Tex. Civ. App.) 189 S. W. 85; Christensen v. Christiansen (Tex. Civ. App.) 155 S. W. 995, 997; Dominguez et al. v. Blaugrund (Tex. Civ. App.) 42 S.W.(2d) 489; Langford v. El Paso Baking Co. (Tex. Civ. App.) 1 S.W.(2d) 476.

In Hill v. Staats (Tex. Civ. App.) 187 S. W. 1039, 1042, it is said:

“Without citing further authorities, it is sufficient to say that we find that the trial court did not err in directing a verdict for defendant upon the facts shown. This conclusion is reached with the knowledge that the entire testimony' upon the question of the instructions given to the chauffeur came from the lips of defendant and his wife, who both may be said to be interested parties. The testimony of appellee and his wife was positive and unequivocal, nor is there any circumstance disclosed in the record tending to discredit or impeach such testimony.”

In Christensen v. Christiansen, supra, it is said: “We think in a case of this kind when the plaintiff, as was done in this case, proves that the defendant is the owner of the automobile, and the driver is employed by the defendant as driver of-his automobile, that a prima facie case is made against the defendant. If, however, it appears from the evidence that at the time in question the driver was using the automobile without authority of the owner, and was not in /-so using it discharging the duties of his employment, the owner is not liable for the negligence of the servant in operating the machine.”

Having reached the conclusions above expressed, it becomes our duty to reverse the judgment and to here render judgment for appellant, and it is accordingly so ordered.

Reversed and rendered.


text:
    KEETER v. DAVIS et al.
    No. 12773.
    Court of Civil Appeals of Texas. Fort Worth.
    March 4, 1933.
    Rehearing Denied April 15, 1933.
    Claude Spratling, of Port Worth, for appellant.
    Simpson & Brewster and Otis Rogers, all of Port Worth, for appellees.
   LATTIMORE, Justice.

Joy G. Keeter and E. B. Keeter purchased on deferred payments an automobile. The payments being in arrears the holder of the note repossessed the car by virtue of his mortgage, and found the same had been stripped of its wheels, tires, and all other removable and salable equipment. Suit to recover same was instituted with sequestration and the citations and writ were placed in the hands of Deputy Sheriff Malcolm Davis to be served upon Joy G. Keeter and E. B. Keeter who, though adults, lived with their father, the appellant.

Repeated efforts to serve these citations were unavailing for three months, the defendants having gone to California. Thereafter alias citations were issued and also placed with Davis for service. Davis went to the home of appellant. He was not acquainted with any of the Keeters. It was at night; the house was dark. He knocked; a man’s voice asked what he wanted. Davis replied, “To see Mr. Keeter.” The voice shouted several times, “Papa”; a man came to the door and asked what was wanted. Davis said: “I want to see Mr. Joy G. Keeter.” Appellant said, “That’s me,” and Davis replied that it must be appellant’s son that was sought as he had been informed the defendant was a young man. Thereupon appellant asked what he wanted. Davis showed him the citation, and appellant told him the defendant was not at home. Davis thereupon asked for E. B. Keeter, and a young man afterwards identified as E. B. Keeter stuck his head out of a door and said, “I don’t live here.” Davis thereupon asked permission to come in and serve E. B. and Joy G. Keeter, Jr., if they could be found there. Appellant replied that he (Davis) could not come in, that the suit would get his boys in trouble, and that he was not ever going to let them be served if he could prevent it. One word led to another un, til the appellant closed and locked the door in Davis’ face. Davis, the next morning, filed a complaint against “Joy G. Keeter, Sr.,” for interfering with service of civil process and procured a warrant for his arrest and that afternoon again went to appellant’s home and found him outside the house. Davis reminded appellant that he had not kept his word concerning E. B. and Joy, Jr., to “arrange” for them to be served, and arrested appellant and locked him in jail, whence he was released on a bail bond. Joy and E. B. Keeter appeared at the courthouse and agreed to accept service if the case against their father was dropped, and it was so arranged.

Appellant, whose real name was Julius G. Keeter, sues Davis and the sheriff and his bondsmen for false imprisonment, seeking both actual and exemplary damages, and on a trial the jury found for Davis and others, being, in substance, that appellant was unlawfully interfering with the service of civil process and that appellant’s conduct caused Davis to believe that appellant’s name was Joy G. Keeter, Sr., and that appellant suffered no damages. The above statement of facts is made from appellee’s case in view of the verdict.

The offense committed is classified as one against justice (title 8, art. 336, Penal Code) and apparently is not an offense against the public peace which would justify an arrest without a warrant if committed in the presence of an officer. Article 212, Code Or. Proe. Appellant having told the officer he was Joy G. Keeter, the arrest was not a basis for damages for false imprisonment for two reasons: There is no law which prevents a person from changing his name (although there are some limitations not involved in this case upon the name he may not assume). Thus if appellant assumed the name under which he was arrested he may not protest the result of such assumption; nor, if such was not his purpose, and it be that he spoke fraudulently, or even inadvertently, and the officer believed him and relied on his statement and acted thereon. This latter reason is stated in Hays v. Creary, 60 Tex. 445; Formwalt v. Hylton, 66 Tex. 288, 1 S. W. 376. We do not wish to be understood as holding that reliance is essential in every case, but the facts of this case do not require any further holding.

Appellant was the actual person whose arrest was intended and the very person whom the arresting officer knew to be the one who had committed the offense. This distinguishes from West v. Cabell, 153 U. S. 78, 14 S. Ct. 752, 38 L. Ed. 643. If, on a trial of this appellant for the offense, defendant had suggested that his true name was not that name given in the complaint, the trial judge should not dismiss him as being wrongfully arrested, but should order the complaint amended so as to declare his true name and proceed with the trial. C. C. P. art. 496. Appellant in this case suggests his true name, which, if he had done so in the criminal case, would not have proven him to have been falsely imprisoned, and desires the civil court to declare thereby the proceeding ipso facto a false imprisonment, thus giving the proceedings, valid in the criminal courts, invalidity in the civil courts.

Appellant introduced in evidence the citation sought to be served by appellee on the occasion of the latter’s visit to appellant’s home and here complains that appellee was allowed to produce the testimony of the plaintiff in that suit and his attorney as to what the facts were upon which the suit was brought. There was a sharp issue made before the jury as to whether appellant interfered with the appellee in serving the process, and this evidence was admitted by the trial court on the theory that same went to show why the appellant was so anxious to defeat the service of process, i. e., that service might get his boys “in trouble.” It is not necessary for us to pass on the propriety of that action. If error, it was harmless, being no more than a detail of that which the appellant himself had put in evidence in the citation.

We have examined all assignments of error, and they are overruled.


author: PELPHREY, Chief Justice.

text:
    MALONE v. BURDICK et al.
    No. 2809.
    Court of Civil Appeals of Texas. El Paso.
    March 30, 1933.
    Rehearing Denied April 20, 1933.
    J. A. Gillett, of El Paso, for appellant.
    Loomis & Kirkland, of El Paso, for appel-lees.
   PELPHREY, Chief Justice.

Appellees, as plaintiffs below, filed this suit against appellant seeking to recover the sum of $279.23, alleged to be due them for labor and material furnished by them in repairing a motor and pump and installing an electrically driven pumping plant on the lands of appellant.

In the first count in their petition, they alleged a parol lien granted to secure the value of the labor and material furnished, and in the second count alleged a contract in writing and a chattel mortgage lien on the pumping plant, foreclosure of which liens was prayed for.

Appellant in his answer questioned the jurisdiction of the court on the ground that ap-pellees’ petition showed the property to be attached to the realty and a part thereof and answering specially alleged that the property did not belong to him, the chattel mortgage therefore being void.

The cause was tried to the court, and upon the request of appellant the following findings of fact and conclusions of law were filed:

“I find that all parties hereto reside in El Paso County, Texas.
“I find that heretofore, to-wit: On or about the 21st day of June, 1931, the defendant engaged the plaintiff to repair and recondition ’a motor and pump and supply the labor and materials necessary to install an electrically driven irrigation pumping plant on the defendant’s farm about two miles south of Tor-nillo, Texas;
“I find that the plaintiff did supply the necessary materials and labor to repair the motor and pump supplied by the defendant and installed by the plaintiff on or about the 10th day of September, and delivered the same to the defendant herein;
“I find that the same was unsatisfactory, as the former irrigation plant had been;
“I find that the understanding between the parties hereto was that the same was to be paid for when completed, but that it was not and that thereafter, to-wit: On or about the 18th day of September, 1931, defendant executed to plaintiff a chattel mortgage securing the indebtedness mentioned in said chattel mortgage and that said chattel mortgage covered the irrigation pumping plant consisting of one 35 horsepower electric motor and one 12" centrifugal pump, and with belting and other accessories, fifty feet of 8" pipe and fittings and a hundred feet of 10" pipe and fittings located on the ranch of the defendant, above mentioned, hut that said mortgage in turn secured only the labor and parts necessary to the installation of said pumping plant;
“I also find that at the time said mortgage was executed, it was known to both the defendant and plaintiff herein that the one 35 horsepower electric motor and one 12" centrifugal pump was not the property of the defendant Malone, and that said mortgage was signed by said Malone with knowledge on the part of both plaintiff and defendant that he had no title to said property.
“I also find that at the time said mortgage was executed that said pumping plant had been installed in the manner as above set out.”
“Conclusions of Law.
“I conclude as a matter of law, that plaintiff is not entitled to recover for the $32.50 handling charge, and the $12.50 board hill paid to a restaurant at Tornillo, Texas, and that as between the parties, plaintiff is entitled to a recovery of his chattel mortgage upon the property, subject to and without prejudice .to the rights of the true owners thereof, they not being made a party to this suit.”

From a judgment against appellant for $234.23 and foreclosing a chattel mortgage lien on the electric motor and pump, he has appealed.

Opinion.

Appellant’s two assignments of error are:

“The trial court erred in overruling defendant’s plea of jurisdiction in reference to the foreclosure of a mortgage lien against the property involved in this suit for the reason that said property constituted fixtures attached to real estate in such a way as to become a part thereof and the use of which was essential to the proper enjoyment of said real estate.” And—
“The trial court erred in giving validity to the chattel mortgage claimed by plaintiffs in the case upon the electric motor and centrifugal pump embraced therein for the reason that the undisputed testimony and the court’s findings of fact show that at the date of execution of said mortgage by defendant, he did not own said pump and motor; and at the trial of the case, had not acquired any interest in either of them, and said niortgage was a nullity and it could not be enforced.”

In appellees’ petition we find it alleged that appellant employed them to repair and recondition a motor and pump supplied by him, and to furnish the materials and labor necessary to install an electrically driven irrigation pumping plant on appellant’s ranch; that they furnished the material and labor; that the pumping plant was accepted by appellant on or about the 10th day of September, 1931; that at tljat time appellant granted them a parol chattel mortgage and right to go upon his premises and remove the motor, pump, and certain pipe and fittings to enforce their lien; and that, thereafter, appellant executed to them a chattel mortgage in writing on the property.

We think, clearly, that it cannot be said from the above allegations that the property was located upon and attached to the real estate of appellant in such a way as to become a fixture.

In fact, the allegations as to the giving of a parol chattel mortgage, and the subsequent giving of a written one, indicated an intention on appellant’s part that the property eoverecl thereby should not become part of the realty.

'The first assignment must, therefore, be overruled.

In 19 Tex. Jur. p. 707, § 4, the true criterion for determining whether a chattel has become an immovable fixture consists ’in the united application of three tests, viz.:

“First: Has there been a real or construe-_ tive annexation of -the article in question to the realty?
“Second: Was there a fitness or adaptation of such article to the uses or purposes of the realty with which it is connected?
“Third: Was it the intention of the party making the annexation that the . chattel should become a permanent accession to the freehold?”

On page 708, § 5, we find the following:

“Of the above-mentioned tests for determining whether or not a chattel has become a fixture, pre-eminence is given to the one that concerns the intention to make the thing a permanent accession to the freehold; the other tests are of value chiefly as evidence of this intention. * * *
“As a general rule, intention is a question of fact for the jury.”

It appears from the findings of fact by the trial court that appellant was not the owner of the pump and motor at the time of the execution of the chattel mortgage and that appellees were aware of that fact.

It also appears from the uncontradicted evidence that appellant was not the owner at the time judgment was rendered.

This being true, then appellant has no ground for complaint by reason of the judgment of foreclosure. He not being the owner could suffer no injury from a foreclosure, especially where the judgment decreed the foreclosure to be subject to rights of the owners of the property. 3 Tex. Jur. p. 147, § 84.

The judgment is affirmed.


author: FLY, Chief Justice.

text:
    INTERNATIONAL-GREAT NORTHERN R. CO. v. GROFF.
    No. 9032.
    Court of Civil Appeals of Texas. San Antonio.
    March 22, 1933.
    Rehearing Denied April 19, 1933.
    Eskridge & Groce, Geo. S. Rice, Jr., and F. C. Davis,' all of San Antonio, and Andrews, Streetman, Logue & Mobley, of Houston, for appellant.
    Dwyer & Groce, of San Antonio, for appel-lee.
   FLY, Chief Justice.

This is a suit for damages arising' from a¡ fall over certain triple valves piled on a platform of appellant, while appellee was engaged in the service of appellant. It was alleged that it was negligent for appellant to place such valves on the platform and allow them to remain there at night without having the platform lighted.

The cause was submitted to a jury through special issues, and on the responses thereto judgment was rendered against appellant for $4,500.

The answer of appellant, after a formal general demurrer and general denial and a specific denial that appellee was injured as alleged through any negligence of appellant, and an allegation that such fall as appellee may have had caused none of the injuries alleged by the appellee, proceeded as follows:

“Defendant says that plaintiff shortly after the 6th day of February, 1930, reported back to the defendant for work and actually went to work and continued to perform the duties of his employment for several weeks. That then the plaintiff was induced, as hereinafter alleged, to feign or pretend injuries and thereafter was induced to lend his name to the prosecution of this lawsuit.
“In this connection, defendant alleges that F, P. McCloskey is a notorious promoter and fosterer of fictitious claims for damages and a stirrer up of unwarranted litigation. That the said McCloskey learned in some way that the plaintiff while in the employ of the defendant had a slight fall and that thereupon the said McCloskey proposed to the plaintiff that he, the said plaintiff, exaggerate his alleged injuries and pretend to be in serious condition, and represented to the plaintiff that he, the said McCloskey, could through his influence and counsel whom he would employ collect a large sum in damages. That the plaintiff permitted himself to be influenced by said representations and permitted himself to be induced thereby to become a party to misrepresentation and exaggeration. That the said plaintiff assigned to the said McCloskey a one-half interest in any cause of action he might have, and the said McClos-key has continuously since financed the plaintiff and this litigation; the allegedi cause of action being without basis in fact and the whole plan of the plaintiff and the said Mc-Closkey being for the purpose of attempting to extort from this defendant moneys to which they are not entitled.
“That the conduct of the said McCloskey is champertous, against public policy and violative of good morals and the plaintiff has made himself a party thereto by submitting-to the inducements of the said McCloskey, which caused the plaintiff to leave the employment of this defendant, where, except for such inducements, he would have remained and performed services incident thereto.
“That in connection with their plan to extort money from this defendant and to impose upon the court and jury, plaintiff and the said McCloskey, for the purpose of getting opinions and conclusions into the record by way of medical testimony indicating physical injury to the plaintiff, have suppressed certain known facts and submitted to supposed experts only half truths and thereby seek to elicit opinions and conclusions which could not be procured or which would be entirely refuted if all of the known facts in their possession were submitted to such experts, all of which is done in pursuance of a plan and scheme to deceive, mislead and impose upon a judicial proceeding. * * ■ * ”

Appellee’s exceptions to the answer were confined to the following sentences therein: “That F. P. McOloskey is a notorious promoter and fosterer of fictitious claims for damages and a stirrer up of unwarranted litigation.” And: “That the conduct of the said McOloskey is champertous against public policy and violative of good morals.”

The exceptions were sustained and the excerpts from the answer stricken out. No other exceptions were filed to the answer, but, after the jury had been impaneled and the petition had been read, and counsel for appellant began to read the parts of the answer which had not been assailed by exceptions, appellee objected to it orally, and it was stricken by the trial judge, leaving the general denial and the denial that appellee had been injured as alleged, which amounted to nothing more than a general denial. Although all the answer herein, copied was stricken by the court, appellant was allowed to prove the allegations in the answer, as such were not objected to by appellee, nor excluded by the court. The court, after admitting proof as to the allegations in the answer, neglected and refused to submit the defense raised by them to the jury.

The action of the court, in connection with the answer, as herein described, is made the subject of criticism in propositions 1, 2, and 3 copied into the brief. It is plainly charged in the answer that appellee had continued to work for appellant after a short lay-off, and that he and Frank McOloskey, who was engaged in the champertous business of inciting litigation in connection with personal injuries, which were feigned by those who had a slight basis for claiming slight injuries, and furnishing doctors and lawyers, had conspired to carry the designs into execution. The allegations of the answer were pertinent and appropriate, as tending to show that appellee had received little or no injury from his fall, and that he was feigning and malingering under the tutelage and leadership of an expert coach for such persons who consorted with him to wring undeserved dollars from corporations. The allegations of the answer were not conclusions, but the facts were pleaded showing fraud and collusion with McOloskey to exaggerate any injuries sustained, and to obtain a judgment for injuries not received, but'for those conceived by McOloskey and supported by evidence procured by him. If the court was right in striking the answer, then the evidence should not have been admitted, and, if it was admissible, the defense should have been presented to the jury. Appellant sought a presentation of the issue as to the conspiracy and a simulation of injuries not} received. It was error not to present the issue. Appellant claims that appellee was not injured by appellant, but that he was a conspirator and a malingerer. It was a valid defense,. sustained by at least some evidence, and it should have been considered by the jury in arriving at a verdict.

The complaint as to the action of the court in answering a question by the jury will not occur on another trial, and need not be considered.

If the appellant desired the question of knowledge of appellant of the presence of the valves and the absence of a light, it should have requested a charge bearing on that question. No such charge was asked.

For the error of the court in striking out the answer, and in permitting testimony on the issues raised by the stricken answer, and then refusing to present the defense made by the evidence, the judgment will be reversed.

In view of another trial, we call attention to the fact that the action of the court in denying the right of appellant to read his pleading to the jury deprived appellant of a fair trial, in that it proclaimed to the jury that the court thought no defense had been presented by the pleading.

The jury must have asked themselves the question, “Why. did the court allow appellant to prove the very matters pleaded in the stricken answer, and then refuse to allow us to pass on such testimony?” The jury must have been impressed with the idea that the judge considered that appellant had no defense to the claim of appellee, and it was a foregone conclusion that the decision must be in favor of appellee. We think appellant had the right to present its defenses, without any indication being given to the jury of the attitude of the court. We do not intend to intimate that the court had any intention to deprive appellant of a fair trial, but merely to state that the action of the court did deprive it of a trial on its pleadings.

The judgment is reversed, and the cause remanded.


text:
    MIKULIK v. SOUTHWESTERN SPECIALTY CO.
    No. 2337.
    Court of Civil Appeals of Texas. Beaumont.
    April 12, 1933.
    Rehearing Denied April 19, 1933.
    Bliss & Daffan, of San Antonio, for appellant.
    Church & Graves and Meritt Steger, all of San Antonio, for appellee.
   WALKER, Chief Justice.

This suit was filed in county court at Daw No. 2 of Bexar county on the 20th of November, 1930, by appellee, Southwestern Specialty Company, Inc., against appellant, J. B. Mikulik, upon an open account for $44.06 and a promissory note' executed by appellant to appellee for $935, dated the 20th day of August, 1929, payable in monthly installments of $40, beginning one month after date, with interest at 8 per cent, and the usual attorney’s .fee and acceleration clauses, with 10 per cent, interest per annum upon all past-due payments; immediately after the execution of the note appellant made a payment thereon of $150. - Appellee also made the following allegations as to the execution of a chattel mortgage to secure the payment of the'account and n'ote:

“That for the purpose of securing the above described note in the principal sum of $935.00 dated August 20th, 1929, the maker of the said note Edinburg Bakery, by W. B. Mikulik, made, executed and delivered to this plaintiff his one certain chattel mortgage to one Artofex one-barrel mixer and all parts and attachments; that said chattel mortgage is a valid lien against the said property in favor of this plaintiff.
“That said chattel mortgage provides that it is to secure any further indebtedness of the maker of the said chattel mortgage.
“That the said Artofex one-barrel mixer and all parts and attachments is of the present reasonable market value of $700.00.”

The prayer was for judgment for the amount of the open account, with interest at 10 per cent, per annum from January 1, 1930, for the principal amount of the note less the' payment of $150, with interest at the rate of 10 per cent, per annum from January 1, I960, and 10 per cent, additional as attorney’s fees and for foreclosure of the chattel mortgage lien. The chattel mortgage and sale contract pleaded by appellee was not made an exhibit to the petition, but was pleaded only as stated above. On April 27, 1931, appellant filed: his first amended original answer, consisting of general demurrer and general denial and cross-action, as follows: (1) An admission by appellant of the purchase of the Artofex mixer and the execution of the chattel mortgage, as pleaded by appellee. (2) One Watts was the authorized agent -of appellee in making the sale; appellant was not a baker by trade,. and knew nothing whatsoever about baking machinery; Watts represented to appellant that the Artofex mixer was a high-speed-machine, that he was familiar with the kind of machine appellant needed in his business, and that this type of machine would perform his work satisfactorily, and was just what he needed to carry on his business. (3) As-soon as the machinery was installed, appellant discovered that it would not do the work; “that said machine, instead of being ⅜ high speed mixer, was a low speed mixer, and that the same was not the kind of machine that he wanted; that the machine was incapable of performing the work required of it”; that it was of no use whatsoever to appellant, and it was necessary for him to set it aside and use the old machine in use by him before buying the new one, in order to carry on his business. (4) The old maehine-was a good low-speed mixer and did appellant’s ' work satisfactorily, but a low-speed mixer did not turn out the quality of bread necessary for appellant to compete with other bakeries; “that his only reason for purchasing said machine was because he thought the same was a high speed mixer and would turn out the quality of bread necessary to compete in the open market”; the new machine did not perform the work as well as the old low-speed mixer. (5) Appellant immediately notified appellee that the machine “would not do the work of his said bakery, as represented by the said Watts”; that it was of no use to him in the conduct of his business, and demanded that appellee take the machine back, cancel the note executed by him in payment' of the machine, and pay back to him the $150, which appellee refused to do. (6) Appellant further pleaded that “he relied on the said representations of the said Watts in purchasing said machine, he having had no knowledge whatsoever about baking machinery, and was induced solely by said representations of the said Watts to purchase said machine.” (7) Appellant admitted the justness of the account in the sum of $44.06, and pleaded a willingness that it be credited against the $150 paid on the mixer. The prayer was for rescission of the contract, the cancellation of the note, and the return of the $150, less the amount due on the account. On April 27,1931, appellee filed its first supplemental petition, consisting of general demurrer, general denial, and special plea as follows:

“That the Artofex Mixer delivered to the defendant herein was machine with high speed mixing results and that any statements made by Watts to the Defendant herein in an attempt to sell said machine were not binding upon the Plaintiff as said Watts did not have any authority whatsoever to bind the Plaintiff herein on any warranty for the work to be done by said above described machine.
“That if said Watts did make the statements alleged in Defendant’s pleading which is not herein admitted, then such statements made by Watts were merely statements of his personal opinion and not any statement of fact binding upon this Plaintiff.”

We quote as follows from appellant’s testimony:

“My name is J. B. Mikulik. I reside at Edinburg, Hidalgo County, Texas, and have been living there about three and a half years. I have a bakery business there and am manager and salesman, I am not a baker, though. During the week days we turn out about eight or nine hundred loaves of bread and on Saturdays about fifteen or sixteen hundred. Prior to August 20, 1929, I had a slow speed dough mixer.
“Q. What do you mean by a low speed mixer? A. Well, a high speed mixer makes a better texture of bread than a low speed mixer.
“At that time I desired a new mixer and I dealt with Mr. Watts, a salesman for The Southwestern Specialty Company, who said he had a good Artofex high speed mixer. At that time I was using a Century low speed mixer, and I bought an Artofex mixer which he said was a high speed mixer. My business needed a high speed machine, and I bought that machine upon his representations. that it was a high speed machine. As to whether I received that machine, I received a machine, but it was not a high speed mixer — I installed it.
“At that time I had been in the bakery business a little better than two years. As to the result of the bread that is turned out by the two machines, the high speed machine turns out a closer grain loaf than a low speed, and better texture — a better loaf of bread — closer grain. In the bakery business they genérally use high speed mixers because they turn out better bread. During the time I have been in the bakery business I have noticed the difference between the work of a high speed machine and a low speed machine. I have watched the action of the machines and the product turned out by high and low speed mixers, and have formed an opinion :from my examination of the product turned •out by the two different machines what the result is in each case, and have formed the opinion that the low speed machine don’t male as close a grain of bread as the high speed machine.
* . * * At the time I entered into this contract I would not have purchased that machine if I had known it was a low speed mixer — I would not have purchased it. I paid $150.00 cash money at the time I purchased it. I tried the machine for four days and I found out I couldn’t use it and I notified The Southwestern Specialty Company, at San Antonio, by letter, and in reply to that letter they said they would send Mr. Watts down to find out what was the matter with the mixer. Mr. Watts came down and he told me it wasn’t a high speed mixer and wouldn’t do the work, and he said that he was going to try to sell the machine for me and refund my money, or take it back or make a settlement, which he has not done so far. I am willing to let the plaintiff have the machine if they give me the $150.00 cash I paid them back.
“ * * * j stated that Mr. Watts came down there and told me that they would take the machine back and refund my money. Prior to and at the time I bought the machine I did not deal with anybody else in the plaintiff company with reference to the purchase of this machine besides Mr. Watts. He was the only one I dealt with, and when he said they would take the machine back, I thought they would.”

Mr. Watts testified for appellee as follows:

“My name is J. T. Watts. I am working for the Southwestern Specialty Company as a salesman, and in the latter part of July, 1929, I was working in the Valley. My territory included Edinburg, and I was in Edin-burg in July, 1929.
“I entered into a contract for an Artofex] machine with Mr. Mikulik — that was the only contract that was entered into at all when I sold him the machine.
“Prior to the time that I sold Mr. Mikulik this Artofex mixing machine, about seven days before he signed that contract, I left with him pamphlets and a catalogue and a lot of references from other large bakeries, and when I came back — worked back from Brownsville — he said he was ready to buy the machine and gave me a check and wanted to know how soon we could, get it there; I told him from two to three weeks, and he gave me a check after he signed thé contract there for $150.00 on the machine. I believe he asked me to wire for the machine. I told him I was going right on in to San Antonio and we could get better results by sending the order from there for the machine.
“As to whether or not I told Mr. Mikulik that the Ar.tofex was a high speed mixing machine, I told him he got the same results as a high speed mixer — that was what was written on the catalogue at the same time and he saw this catalogue, which I left yvith him, and it read on there that they got the same results as a high speed mixer.
“I think this pamplet that you now show me was in the same folder with these different letters and all on it, and other telegrams also, which is in the other book, that I showed to Mr. Mikulik.
“I told him that this machine would have the same results as a high speed mixer and would not heat the dough as a high speed mixer would because it did not require the ice that a high speed mixer would require because it had the arms and revolving bowl at the same time. Every high speed mixer requires a cooling system. They have water jackets and if they haven’t water jackets, then they have to put ice in them, depending on the size of the machine — from 70 to 80 pounds of ice is used with every two barrel dough. This Artofex machine does not have! any cooling system — it don’t require any, and I so advised Mr. Mikulik.
“I did not advise him that this was a high speed mixing machine — I said he got high speed results.
“ * * * At the time I sold this machine to Mr. Mikulik I knew that he wanted a high speed machine and that he had a low speed machine.
“ * * * Mr. Mikulik did not say anything about this machine not being a high speed mixer until two or three months after-wards. I don’t know when he quit using that machine — he saidi he didn’t use it but about a week — I don’t know whether he used it any time or not, I never saw the machine in operation. My company did not send me down there — -they knew that I * went down there every five or six weeks — they did not send me down there to confer with him with reference to his being dissatisfied with this machine, except Mr. Berman did tell me to go down there and see what I could do with the machine. I hadn’t at that time told Mr. Mikulik that I was going to give him his money back — I never did. I did not know that this was not a high speed machine, I absolutely thought it was a high speed machine.
“ * * * The difference in the mechanical operation, between a high speed and low speed is that a high speed machine gives more revolutions a minute than a low speed. I did not know that machine was not a high speed mixer — it was considered a high speed machine.
“ * * * I stated awhile ago that this machine had the results of high speed mixing machines, and it is a fact that regardless of what name you call it, if it has the results of a high speed machine, it absolutely has the results of a high speed mixing machine.
“ ⅞ * * j claim that this machine gives the same results as a high speed machine — ■ it is the same thing as a high speed machine. I can’t say that this machine that Mr. Miku-lik got performs high speed work — I never saw it used; I never took the trouble to see whether or not it performed the work — he didn’t have it hooked up and I couldn’t see it. I guess maybe it would take two, three or four hours to hook it up. . I didn’t make an effort to hook it up to see; I didn’t think it was necessary because he said his bakers wouldn’t work with it. It wasn’t over four months ago I went down there and he showed me the belt slipped and he had to put something on it. I never did hook it up to see whether it produced high speed bread after he said it did not. I cared about that because I was anxious to please my customers. I didn’t do it because he said he couldn’t keep a baker if he kept the machine. I don’t remember that he ever said anything to me before that about it not producing high speed bread — he might have said it, but I don’t remember it. I won’t say that he didn’t say that, he may have said it.”

Mr. W. M. Berman, appellee’s president and general manager, testified:

“With reference to the authority of Mr. Watts as salesman to bind the company on any warranties whatsoever, I will state that Mr. Watts works for me in the capacity of salesman. He has no authority to close any contracts. He has authority only to sell merchandise and represent it as represented, and all contracts and all orders are acceptable at the home office. If he takes a contract for the sale of merchandise it is submitted to the office for acceptance and if accepted, why, the merchandise is shipped.
“ * * * Q. You don’t know whether or not Mr. Watts represented that this was a high speed machine and you don’t know whether or not it w;as a high speed machine?
“A. I never saw the machine in my life.
“I never took the trouble to investigate to see whether it was doing the work, for the simple reason that we had entered suit against Mr. Mikulik for payment of his account. Í knew that he was not satisfied with it long before we entered suit. I never made an investigation to see what was wrong with it — I sent Mr. Watts to investigate it and I assume he did. Mr. Watts did not hook up the machine and try it out so far as I know.
“ * * * I do not know whether this machine gave satisfactory results — I don’t know a thing in the world about it, sir, and never took the trouble to investigate.
“The Artofex mixer gives high speed results; I think any machine that gives high speed results could be termed a high speed mixer.
“ * * * I have seen the Artofex machine in actual operation and its product a number of times, and they turn out the same results as a high speed machine.”

Appellee offered in evidence the chattel mortgage and sale contract, which contained the following special provisions, limiting the authority of its agent in making the sale: “We will not be responsible for any verbal agreement or any promise not in writing and embodied in this contract” and “deposit on orders submitted to Southwestern Specialty Company, Inc., for approval.” On conclusion of the evidence the jury was instructed to return its verdict in favor of appellee, which was done, and judgment entered thereon in favor of appellee for the relief prayed for. The appeal was by Mikulik to the San Antonio Court of Civil Appeals, transferred to this court by order of the Supreme Court.

Opinion.

The instructed verdict was error. The issue pleaded by appellant by his cross-action that the machine delivered to him was not the machine contracted for has support in the evidence. Under his pleading and proof, appellant wanted and needed in his trade a high-speed mixer; appellee’s agent was fully advised of these facts, and represented to appellant that the machine sold to him was a high-speed mixer, and was the .very machine he needed in his business; not being a practical baker, appellant relied upon this statement by the agent, and purchased the machine because of his faith and confidence in the representations made by the agent. Appellant pleaded that Watts, appel-lee’s agent who sold him the machine, had authority to make these representations. This allegation has support in the evidence. Thus Mr. Berman, appellee’s president and general manager, testified that Mr. Watts had authority from appellee to sell machinery “and represent it as represented.” Mr. Watts testified' that about a week before the sale was made he furnished appellant with a catalogue that represented the machine as giving the same results “as a high speed machine.” Mr. Berman testified further: “The Artofex mixer gives high speed results; I think any machine that gives high speed results could be termed a high speed machine.” Under appellant’s testimony, the issue was clearly raised that the machine delivered him did not give high-speed results, and that it was not a high-speed machine.

The testimony also raised the issue of fraud against appellee in making these representations. Notwithstanding the representations testified to by appellant, and the extent of Mr. Watts’ authority, as testified to both by Mr. Watts and Mr. Berman, and that the machine failed in every respect to comply with the special requirements upon which appellant made the purchase, yet neither Mr. Watts nor Mr. Berman made any effort whatever to examine the machine, to determine! the character of work it would do, or to give appellant any adjustment whatever on the defects developed by the machine.

Of course, if appellee contracted to sell, and appellant contracted to buy, a high-speed mixer, appellant was entitled to a high-speed mixer, and, if his testimony was true, was entitled to rescind the contract as against the machine that was actually delivered him. On the facts stated the issue was raised that appellant had the right to rescind the contract, return- the machine and recover back what he had paid. Riley v. Atmar (Tex. Civ. App.) 213 S. W. 682; Shepherd Laundries Co. v. Griffin (Tex. Civ. App.) 285 S. W. 683; George v. Birchfield (Tex. Civ. App.) 264 S. W. 632; Edward Thompson Co. v. Sawyers, 111 Tex. 374, 234 S. W. 873; J. B. Colt Co. v. Wheeler, 12 S.W.(2d) 1102, by this court, wherein the principal authorities cited by appellee are reviewed.

Appellee insists that the judgment of the lower court should be affirmed, first, because Watts was not authorized to make, the representations pleaded by appellant against him, and under the provisions of the sale contract quoted above appellant was advised of this special limitation upon Watts’ authority. From the quotations madé above, from the pleadings of appellee, it appears that these special provisions of the sale contract were not pleaded; that the issue made' by appellee’s supplemental petition was that “Watts did not have any authority whatsoever to bind the plaintiff herein on any warranty for the work to be done by said above described machine.” Under this pleading the issue was, as already stated by us, the extent of Watts’ actual authority, and, on the testimony both of Mr. Watts and Mr. Ber-man, the actual extent of his authority as to these representations was a question for the jury. Not only did appellant plead representations by Mr. Watts as to the character of work the machine would do, but also as to the nature of the machine, that is, that it was a high-speed mixer, and appellee’s supplemental petition did not put in issue the agent’s authority to make this representation except under the general denial. But on the issue of rescission, that is, whether or not appellant assented to buy the machine delivered, and whether or not appellee was advised of the character of machine appellant thought he was buying, appellant’s answer and cross-action were sufficient to afford a basis for the introduction of the testimony offered. See áuthorities cited above. Second, appellee insists that the judgment should be affirmed for the following additional reasons: (a) It was not shown that the machine was absolutely worthless; (b) nor that appellant suffered any pecuniary damage. There is no merit in these contentions. One who is entitled to avoid an entire written contract because/ it lacked his assent, as the issue was raised in favor of appellant in this ease, under his allegations and proof, can no longer be held bound by any of its stipulations or guaranties which induced its execution. This statement is taken from the opinion of Mr. Justice Greenwood, in Edward Thompson Co. v. Sawyers, supra. That appellant raised in his favor the issue of rescission clearly distinguishes this case from Wright v. Davenport, 44 Tex. 164, cited by ap-pellee in support of these two propositions.

For ’the reasons stated, the judgment of the lower court is reversed, and the cause remanded for a new trial.

Reversed and remanded.


author: DUNKLIN, Justice.

text:
    FIRST NAT. BANK OF BOWIE v. CHANDLER et al.
    No. 12801.
    Court of Civil Appeals of Texas. Fort Worth.
    March 11, 1933.
    Rehearing Denied April 8, 1933.
    Homer B. Latham, of Bowie, for appellant.
    Burch & Woodruff, of Decatur, T. R. Boone, of Wichita Falls, and J. M. Donald, of Bowie, for appellees.
   DUNKLIN, Justice.

The First National Bank of Bowie instituted this suit to recover on a promissory note executed by I. L. Chandler, Paul Donald, and F. O. Green, payable to the First State Bank of Bowie and assigned to the plaintiff. From a judgment denying a recovery, the plaintiff has prosecuted this appeal.

The defendants pleaded a failure of consideration by allegations that the First State Bank of Bowie, who was then the owner of a note in the sum of $4,600, executed by one Edward Stewart, was in financial straits, and was unable to collect the Stewart note, and the state banking examiner demanded that the Stewart note be charged off, and, in order to relieve that situation and to avoid a closing of the bank by reason of its financial embarrassment, and in order to satisfy the bank examiner, the defendants who were stockholders in the First State Bank executed the note in suit without any consideration passing to them therefor, and with the further agreement that the Stewart note would still be held by the First State Bank and) collected, if possible, and the proceeds applied to the payment of the note in suit.

In answer to a special issue, the jury returned a finding sustaining that defense, and that finding had ample support in the evidence.

In the case of Central National Bank of Waco v. Lawson, 27 S.W.(2d) 125, by the Commission of Appeals, the defense of failure of consideration of a note executed under substantially the same facts and circumstances as in this case was sustained for lack of consideration, and that decision is of controlling effect here. And that defense was available as against the plaintiff who acquired the note after its due date and for the purpose of liquidating the assets of the First State Bank of Bowie, which had become insolvent. Commercial State Bank v. Ellington (Tex. Com. App.) 24 S.W.(2d) 359.

Accordingly, the judgment of the trial court is affirmed without the necessity of discussing other assignments of error which become immaterial in view of the foregoing conclusions.

On Motion for Rehearing.

The clerical error in our original opinion in the statement that the defendants were stockholders in the First National Bank has been corrected so as to substitute the First State Bank of Bowie in place of First National Bank of Bowie.

The evidence shows that the Stewart note mentioned in the original opinion was never canceled or surrendered, but was retained among the assets of the First State Bank after the execution of the original note executed by the defendants and which is represented by the note in suit as a renewal thereof, and later was reduced to judgment against the Security State Bank of Fort Worth in a suit instituted thereon by the stockholders of the Bank of Shannon for its benefit, and thereafter was transferred and assigned to the First State Bank of Bowie; and dividends were paid thereon to the First State Bank of Bowie in liquidation proceedings against the Security State Bank of Fort Worth. Hence there was no reversible error in the refusal of the court to submit plaintiff’s requested issues, i. e., whether defendants were partners in the Shannon Bank on February 19, 1931, and whether the note which was lost bore the indorsement of the Shannon Bank at the time it was taken into the assets of the First State Bank of Bowie; on the theory that, if the Stewart note was indorsed by the Shannon Bank and the defendants were partners therein, the indorsement would import personal liability of the partners which was discharged by the acceptance of the defendants’ note, which the jury found was executed as an accommodation note only. Furthermore, there was no evi denee tending to show that there was any agreement between the bank examiner and the defendants that any liability of the defendants for the Stewart note growing out of their partnership relations with the bank at Shannon would be in any manner affected by the giving of their note, claimed by the defendants as an accommodation only.

In Missouri, K. & T. Ry. v. Smith, 98 Tex. 47, 81 S. W. 22, 25, 66 L. R. A. 741, 107 Am. St. Rep. 607, 4 Ann. Cas. 644, the following is quoted with approval from Fire Insurance Ass’n v. Wickham, 141 U. S. 579 [12 S. Ct. 84, 35 L. Ed. 860]: “Nothing is a consideration that is not regarded as such by both parties. To constitute a valid agreement, there must be a meeting of minds upon every feature and element of such agreement, of which the consideration is one.”

The decision of the Commission of Appeals in Shaw v. McShane, 50 S.W.(2d) 278, which is earnestly stressed by appellants as controlling this case in their favor, is clearly distinguishable from the facts of this case. In that case it appeared that the bank advanced money to take up a first lien on a farm on which it held a second lien. The loan was in fact made to the owner of the farm who executed his note for the sum so advanced, which was in excess of the amount which’the bank was permitted to lend him; and, in order to conceal the fact that the bank had exceeded the credit allowable to the landowner, the note in suit was executed and placed among the assets of the bank. It is manifest, therefore, that the additional sum so advanced and paid out by the bank to the landowner was a valuable consideration which supported the note in that suit.

If the First State Bank of Bowie had instituted this suit on the note in controversy, clearly the finding of the jury that it was executed as- an accommodation note only would have been a complete defense under the decision of Central National Bank of Waco v. Lawson, 27 S.W.(2d) 125, by the Commission of Appeals; and, as said in our original opinion, that defense was equally available against the plaintiff who acquired the note after its due date and for the purpose of liquidating the assets of the First State Bank of Bowie, which had become insolvent. See, also, Goodwin v. Abilene State Bank (Tex. Civ. App.) 20 S.W.(2d) 1090; Commercial State Bank v. Ellington (Tex. Com. App.) 24 S.W.(2d) 359.

The motion for rehearing is overruled.