author: O’QUINN, J.

text:
    FIRST TEXAS PRUDENTIAL INS. CO. v. MORELAND.
    No. 2223.
    Court of Civil Appeals of Texas. Beaumont.
    Dec. 22, 1932.
    Rehearing Denied Dec. 28, 1932.
    Orgain, Carroll & Bell and Ewell Strong, Jr., all of Beaumont, for appellant.
    Morris & Bennett, of Beaumont, for appel-lee.
   O’QUINN, J.

Appellee sued appellant claiming that appellant, by and through its agents, had made certain oral statements about and concerning him which in law amounted to slander of him, and that as a result of said alleged slander he had been actually damaged in the sum of $50,000, and that said slanderous statements were made under circumstances entitling him to recover exemplary damages in the sum of $25,000.

In substance, he alleged that appellant whs a Texas corporation with its principal office and place of business in Galveston, Galveston county, Tex., but that it had an office and agent in Beaumont, Jefferson county, Tex.; that November 18, 1929, he was employed by appellant and was required to and did execute bond payable to appellant in the sum of $100; that he then entered upon his duties as agent for appellant, selling and collecting insurance; that J. H. Pratt was in charge of the Beaumont office of appellant under whom appellee worked; that weekly reports of insurance sold and insurance collected was required to be made; that a dispute arose between Pratt and himself as to the correctness of reports made by appellee, Pratt contending that appellee checked in short, and appellee contending he was not short; that the matter not having been settled to his satisfaction, he, on December 21,1929, made his final report and quit work for appellant; that he wrote R. W. Rogers, who was manager for appellant at Galveston, Tex., and in charge of all appellant’s business in Texas, and requested him to come to Beaumont and settle the dispute between Pratt and himself; that Rogers did come to Beaumont, and that at their first meeting in Pratt’s office, in discussing the matter of appellee’s being short, Rogers, in Pratt’s presence, said to appellee: “Well, you know when we'make this audit, all we’ll have to do is to file a complaint against you for embezzlement” ; that he, appellee, demanded an audit of his account; that Rogers called X H. Treaster, appellant’s general auditor at Galveston, and Treaster came to Beaumont for the purpose of auditing ap-pellee’s account; that in discussing the method and beginning of the audit, while appellee and Treaster were in a car on the street in front of -what was known as the “shine parlor,” Treaster said to appellee: “Well, when I get through with my report, you know what will happen, the company has indicted one fellow for embezzlement already.”

Further allegations were made, among other things, (a) that about January 1, 1930, in appellant’s office in Beaumont, Treaster, in talking to O. J. Cowan about appellee, said: “He’s fired — we caught him stealing” ; (b) that about December 2,1929, appellee sold a policy of insurance to one Mrs. Ortez, who paid him the premium, and which he turned over to Pratt; that her policy was not delivered, but after appellee had quit the employment of appellant the policy was delivered to Mrs. Ortez with the explanation that the reason of the delay in delivering the policy was that ap-pellee had collected the premium and had not turned it'in; (c) that in the early part of January, 1930, an agent of appellant went to the home of appellee and attempted to sell insurance to his wife, Mrs. Moreland, his daughter, Mrs. B. J. George, and one Mrs. Barrett, and, when told that they did not care for insurance in the company, the agent replied: “The company is all right now, a bunch has been let out for their crookedness.” All of these allegations were duly and fully enlarged and made applicable by innuendoes.

Appellee further alleged: “That all cf the aforementioned acts, charges, accusations, and insinuations of defendant and its duly authorized .agents, constitute a course of action on the part of defendant and its duly authorized agents, and a studied design to slander plaintiff, ruin his reputation, destroy his standing in the community and among his fellowmen, and to prevent plaintiff from again entering any financial employment, and said acts, charges, and insinuations were made in an attempt to coerce and intimidate plaintiff into paying sums of money unjustly and illegally charged against him.”

Appellant answered by general demurrer, special exceptions, and a general denial. It further specially denied that it had at any time, directly or impliedly, authorized any of its agents to charge or to insinuate that ap-pellee had embezzled funds of appellant, and that, if any such accusations or insinuations wore made, the person making same was not acting within the scope of his employment or in the furtherance of appellant’s business; that, if such statements were made and in the event they were made within the scope of the agent’s employment and in the furtherance of appellant’s business, then they could not be made the basis of a suit in slander for damages, for in that the matter was privileged, and, if not privileged, then qualifiedly or conditionally privileged; denied that Rogers made the statement alleged, but that, if he did so, it was made in reference to a matter of and concerning appellant’s business wherein there was a dispute between appellant and appellee as to whether appellee had accounted for all the funds collected by him for appellant; that appellant was acting in good faith and without malice in an effort to adjust and clear up appellee’s account with appellant; that, if Rogers made the alleged statement, under all the facts and circumstances, it was privileged; that appellee demanded an audit of his account, and appellant’s auditor, Treaster, was called from Galveston to make the audit, which showed ap-pellee owed appellant the sum of $17.79; that appellee refused to pay said sum and appellant filed suit against appellee and his bondsmen in the justice court at Galveston, and judgment had for said sum; and that said judgment was res adjudicata of the fact of appellee’s owing appellant said sum. Appellant denied that, in its dealings with appellee, it or its agents were actuated by malice or bad faith, but only for the purpose of clearing up the dispute between appellee and appellant, and to collect the amount shown by the audit appellee owed appellant.

By supplemental petition, appellee replied to appellant’s answer by special exceptions, general denial of the matters set out in same, save as admitted, and specially that appellant and its agents, acting within the scope of their employment, had exceeded their privilege, if any they had, in taking and picking their opportunity and using the manner and words used in speaking of and referring to appellee, and that the truth, as attempted to be pleaded by appellant, was no defense; that the judgment recovered by appellant in the justice court at Galveston against appel-lee grew out of a dispute as to the amount of money appellee owed the appellant, if any, and was in no way connected with embezzlement; that there was no testimony at the trial that appellee had embezzled funds of appellant, and that the pleadings on their face showed that there was no charge of embezzlement against appellee; that the suit at Galveston against appellee and the suit here involved were wholly disconnected and the issues wholly different; that the judgment recovered by appellant at Galveston could not be pleaded in bar to appellee’s suit because said judgment had been enjoined by an order of the Fifty-Eighth district court of Jefferson county, Tex.

To this supplemental pleading by appellee, appellant replied by general demurrer, general denial, and specially that the action, if any, taken by the district judge of the Fifty-Eighth district court of Jefferson county, Tex., as to the Galveston county judgment, was wholly void; that said court was without jurisdiction of the matter involved; and that any act upon his part as to such judgment, being a purely collateral proceeding, could in no way affect said Galveston county judg ment.

The court sustained appellant’s special exception No. 3 relating to appellee’s allegation as to a matter alleged to have happened at the home of Mrs. Rigsby to the effect that said allegation stated no cause of action, but overruled all of appellant’s other exceptions. ,A11 of appellee’s special exceptions were overruled.

At the close of the evidence, appellant requested the court to instruct a verdict in its behalf, which was refused. The case was then tried to a jury upon special issues, upon the answers to which the court rendered judgment in favor of appellee in the sum of $5,-OOO, of which $1,000 was for actual damages and $4,000 for exemplary damages.

The jury found in favor of appellant on the issues as to.the matters alleged relative to O. J. Cowan and Mrs. Ortez. The other issues were answered favorably to appellee.

Appellee insists that we should not consider this appeal because, he says, the judgment from which the appeal was taken had become and was a final judgment prior to the appeal. This contention is based upon the assertion that no motion for a new trial was filed during the term of the court at which the judgment was rendered, and hence become final at the expiration of the term. The case was tried in the Sixtieth district court of Jefferson county. This court held two terms in the year — the first beginning the first Monday in January and ending the last Saturday in June, and the second beginning the first Monday in July and ending the last Saturday in December. The case was tried in June, 1931, and judgment entered June 17th. On June 25th appellant filed its formal motion for a new trial. The term of court ended July 5th. No order was entered extending the term of court for any purpose, nor during the term of court was any order made granting leave to file an amended motion for a new trial. On July 14,1931, appellant, by leave of the court, filed an amended motion for a new trial. The original motion was filed within ten days after the rendition of the judgment, and the amended motion within twenty days after the original motion was filed. Appellee filed motion to strike the amended motion for new trial, and said motion to strike and the amended motion for a new trial were both heard and overruled on August 12, 1931.

Jefferson county having two district courts with civil jurisdiction only, their procedure is governed by article 2092 of chapter 6 of title 42, Vernon’s Annotated Civil Statutes. Sections 28 and 29 of said article read:

“28. Motion for New Trial. — A motion for new trial filed during one term of court may be heard and acted on at the next term of court. If a case or other matter is on trial or in process of hearing when the term of court expires, such trial, hearing or other matter may be proceeded with at the next term of the court. No motion for new trial' or other motion or plea shall be considered as waived or over-ruled, because not acted on at the'term of court at which it was filed, but may be acted on at the succeeding term or at any time which the judge may fix or to which it may have been postponed or continued by agreement of the parties with leave of the court. All motions and amended motions for new trial shall be presented within thirty days after the original motion or amended motion is filed and shall be determined within not exceeding forty-five days after the original or amended motion is filed, unless by written agreement of the parties filed in the case, the decision of the motion is postponed to a later date.
“29. Time to File Motion for New Trial.— A motion for new- trial where required shall be filed within ten days after the judgment is rendered or other order complained of is entered, and may be amended by leave of the court at any time before it is acted on within twenty days after it is filed.”

It is seen that appellant’s motion for a new trial was not lost or waived because not acted on at the term of the court at which it was filed. It is further seen that the amended motion was filed and acted on within the time required by law. The court’s action in overruling appellee’s motion to strike was proper, and his action overruling the amended motion for a new trial was timely. Nevitt v. Wilson, 116 Tex. 29, 285 S. W. 1079, 48 A. L. R. 355.

Special issue No. 2 submitted to the jury required them to find whether appellant’s agent and general manager, Rogers, said to ap-pellee, in the presence of J. H. Pratt, in substance, “Well, you know when we make this audit all we will have to do is to file charges against you for embezzlement.”

Special issue No. 14 submitted to the jury required them to find what amount of money, if presently paid to appellee by appellant, would reasonably compensate him for actual damages, if any, sustained by him as a direct and proximate consequence of the acts and charges made by appellant, if any.

Special issue’ No. 15 submitted to the jury required them to find what amount of money, if any, should be paid appellee as exemplary damages.

Appellant presented to the court and requested that its special charge No. 2 be given to the jury, to wit: “Gentlemen of the Jury: You are instructed that in answering Special Issues Nos. 14 and 15 of the Court’s Charge, in assessing the damages if any, that you will allow the plaintiff no damages for any statement, if any, made by defendant’s agent Rogers to the effect that he said to plaintiff, ‘John (referring to John Pratt) tells me you are more than Twenty ($20.00) Dollars short’; as well as the further statement, if any, ‘Well, you know when we make this audit all we’ll have to do is to file complaint against you for embezzlement.’ ”

This requested charge was refused, and its refusal is assigned as error. In this connection it is insisted that, under the allegations of appellee’s petition and the evidence, if Rogers, the agent of appellant, did, in the presence of Pratt, another employee and agent of appellant, say “Well, you know when we make this audit, all we will have to do is to file charges against you for embezzlement,” same was privileged and would not entitle appellee to judgment for damages.

Briefly, the facts in relation to the matter complained show that in 1925 appellee was located in Beaumont and was working for the Southwestern Life Insurance Company of Dallas, Tex. In the latter part of that year he accepted the district agency for the General Security Sick & Accident Company, his district including Jefferson, Hardin, and Liberty counties. In 1929, he was running a cleaning and pressing outfit. In November of that year he sold out that business and became a special solicitor for appellant. He served in this capacity for two or three weeks, and then, as agent for appellant, went on what he called No. 1 debit on south side of Beaumont. He sold insurance and collected for the insurance sqld. He worked for appellant in this capacity until about the first of the year 1930. He would collect insurance on Monday, Tuesday, and Wednesday, and sell new insurance the latter part of the week. J. H. Pratt was agent for appellant and had charge of the Beaumont district. He employed appellee to work for appellant. Ap-pellee had a desk in the company’s office, which was generally left unlocked. The books were cheeked on Wednesday nights and the reports made on the following Saturday. The first week, beginning November 25th, ap-pellee worked with Pratt on his route or territory collecting, and when the report was made Saturday he was some $8 Short. He testified: “Yes, sir, the money was turned in every night, every dime, and when we collected the first week Pratt handled practically all of the money, of course, there were pickups I handled myself. ' I paid it to balance the account.”

He further testified: “I called Pratt’s attention to it; he said ‘you have called your book wrong’, he says ‘if you call your book wrong this week you will get it back next week’, and so the next week the same thing repeated again only not quite so heavy, about $4.00 and some cents. * * * I taken notice of them, it was a discrepancy on the two weeks’ sheets, the route book report does not reflect the condition of the account, but the two weeks’ sheet does reflect the condition, consequently I noticed there has been some collection entered in my book I had not called so I call Pratt’s attention to it. He said ‘it’s an error, I will correct it.’ I went out again and the same thing happened the week of the 9th.”

And again: “Yes, I collected the 9th, 10th, and' 11th. I left the book in the office and Saturday morning when I go to call the report he and the girl in there had made a new book and torn up the old book. His excuse was it was so old and dirty the accounts were hardly discernible. As I understood it, nobody was to handle it except the agent, or tear it up. I told them I was going to quit and wouldn’t accept it. Pratt says that ‘if there is any deficiency in it I will make it up.’ There was only about $3.00 and something deficiency so when I make out my two weeks’ sheet I discovered who those were. We had a family on Corley Street that should have been lapsed two or three weeks before I quit. They were four weeks in arrears, and they were still four weeks in arrears when I turned the book over. I never saw the people until I carried Treaster there. There had been four weeks entered in my book on that family.”

We will not here set out more of the testimony. A number of witnesses testified for each party. The statement of facts covers 151 pages, with 30 more pages of exhibits. We have set out the substance of sufficient of appellee’s testimony to give an idea of the origin and nature of the controversy. Additional facts will be stated in discussing the several questions.

The undisputed evidence shows Rogers was the general manager of appellant company with his office at Galveston, Tex. As such, it was his duty to look after, manage, and protect the interest of his company. Pratt was the agent in charge of the company’s business in the Beaumont district, and appellee worked for the company under Pratt. It was the duty of Pratt likewise to look after, promote, and protect the interest of appellant company. It is further undisputed that, while appellee was working for appellant, a dispute arose between Pratt and ap-pellee as to whether appellee was short in his account in money by him collected and which should have been turned over to Pratt. The dispute reached such state that appellee wrote Rogers and requested him to come to Beaumont to settle the dispute. Rogers, in response to such request, went to Beaumont and in the office of the company’s agent, Pratt, saw appellant, and there in the presence of Pratt the conversation took place. Rogers denied making the statement charged, but the jury found that he did so. All persons present were interested in the matter for which they had come together.. It being the duty of Rogers to protect the interest of his company and being present there for that purpose, and also at the request of appellee, the statement having been made in the discharge of his duty, was privileged, and appellant is not liable for damages in consequence thereof, unless the statement was made with malice or in bad faith. Simmons v. Dickson, 110 Tex. 230, 233, 213 S. W. 612, 218 S. W. 365; International & G. N. R. Co. v. Edmundson (Tex. Com. App.) 222 S. W. 181; Missouri Pac. Railway Co. v. Richmond, 73 Tex. 568, 11 S. W. 555, 4 L. R. A. 280, 15 Am. St. Rep. 794; Western Union Telegraph Co. v. Buchanan (Tex. Civ. App.) 248 S. W. 68.

But appellee insists that Rogers was actuated by malice in making the statement, and the jury so found. We have carefully searched and considered the record and we do not believe the issue of malice is raised by the evidence. The occasion being privileged, the presumption of good faith obtained. The burden was upon appellee to 'rebut this presunrption. Rogers did not seek appellee, but was present at appellee’s request. The meeting was in the office of appellant’s agent, Pratt, and only Rogers, Pratt, and appellee were present It is not contended that any one else was present, or that any one else heard the statement. The audit demanded of Rogers by appellee was granted, and, while the correctness of the result is disputed by appellee, it showed him short $17.70. Appel-lee was given the privilege of paying this off and ending the matter, but he refused. Suit was filed against him and his bondsmen for the debt and judgment had in favor of appellant. This judgment is conclusive of the fact that appellee owed that amount. We think that the record, beyond dispute, shows that appellant’s agents acted in good faith in the matter. At the very most that can be said, the evidence merely raised a surmise or suspicion of the existence of facts sought to be shown showing malice, and this falls far short, in legal contemplation, of being any evidence of malice. Joske v. Irvine, 91 Tex. 574, 44 S. W. 1059. The contention of appel-lee and the findings by the jury are without evidence to support them.

What we have said disposes of the matter as to what was alleged to have been said to appellee by J. H. Treaster, auditor for appellant, to wit: “Well, when I get through with my report, you know what will happen, the company has indicted one agent for embezzlement already.” Treaster was appellant’s auditor, and it was his-duty to check the records of appellant’s agents and safeguard its finances. Appellee demanded of Rogers that his books and account be audited. In compliance with this request, Treas-ter was called to Beaumont, and he and ap-pellee were beginning the audit when, as told by appellee, they went across the street from the company’s office to in front of the “shine parlor.” They were talking about the route book when, appellee testified, Treaster said: “I’m going to tell you one thing, the company has just indicted one man for embezzlement, and that’s what they are going to do for you,” whereupon appellee said he got out of the car and said to Treaster, “Get out of the car and we’ll settle it right now,” and Treas-ter laughed and said, “I don’t mean that, get on back in the car,” and appellee got back in the car and they went on to check the route. The language charged to Treaster was “Well, when I get through with my report you know what will happen, the company has indieVed one fellow for embezzlement already.” Appellee alleged that, at the time Treaster made the remark charged, people were passing on the sidewalk, near the car and within hearing distance of said remarks and did hear said remarks. There is no evidence that any person other than appellee heard any portion of the conversation. True, appellee testified, when asked, “Did you see any of them turn or look or did any of them turn or look,” that he never “paid so much attention to it.” “I had gotten out of the car. I’m sure they did. He certainly should have attracted somebody’s attention with plenty of them passing at that time.” He further testified that Treaster seemed to be angry and was talking very loud. This is absolutely all that was shown relative to any one hearing what Treaster said. It was only ap-pellee’s opinion as to whether any one heard the remark. It amounts to no evidence. Treaster being in the discharge of a duty he owed to his employer, the cheeking of the records and accounts of his employer’s agents and in protecting its finances, and also being present for the purpose of making said audit at the request of appellee, the remark,' if made, being made to appellee alone, it not appearing that any third person heard said remark, the occasion was privileged, and appellant is not liable in damages therefor, unless the statement was made with malice or in bad faith. See authorities cited supra.

It is insisted that, in making the statement, Treaster was actuated by malice. The jury so found, and also found that the remark was made in the presence and hearing of other people. We think that all the facts negative malice, even appellee’s testimony, that he “never paid so much attention to it,” and that when Treaster laughed and said “I don’t mean that, get back in the car,” and ap-pellee accepted the explanation of Treaster and did get back in the car, and they did work together in checking the route for several days, shows no malice and that appellee himself was not seriously impressed with the occurrence. Joske v. Irvine, 91 Tex. 574, 44 S. W. 1059. The contention and the finding by the jury are without support in the evidence.

Appellee cites us to the ease of Perry Bros. Variety Stores v. Layton, 119 Tex. 130, 25 S.W.(2d) 310, as controlling this case. There the slanderous statements were made in a general merchandise store open to the public, by the manager of the store, and in the presence and hearing of customers who were there on the implied invitation of the owner of the store, and who had no interest in the subject-matter of the statements. The slanderous statements were actually heard by the third parties—customers—while in the instant case the statement was out in the street and only those interested were present and heard the statement.

Special issue No. 11, submitted to the jury, reads: “Did defendant’s agent, Treaster, in referring to Mr. Moreland, state to Mrs. Moreland in words substantially as follows: ‘The company is all right now, I understand he and a bunch have been let out for their crookedness.’ ”

The jury answered, “Yes.” They further found that the statement was made with malice.

Appellee, in his petition, alleged “that during the early part of January, 1930, an agent of defendant went to the home of plaintiff, Moreland, and on the pretense of attempting to sell insurance to Mrs. Moreland, Mrs. B. J. George and Mrs., Barrett, and the agent when told they didn’t care for any insurance, said ‘the company is all right now, a bunch has been let out for their crookedness’, thereby charging and inferring that Moreland had been and was crooked and had been fired for crookedness, and that he could not be trusted.” Mrs. George was the daughter of appellee. Mrs. Barrett faded from the scene and it appears did not hear any of the conversation. Neither Mrs. Moreland nor her daughter, Mrs. Geor'ge, knew the party, and he did not tell them his name, They say he said, he was selling insurance for appellant. It was attempted to be shown that Treaster, appellant’s auditor, was the man, but neither Mrs. Moreland nor Mrs. George identified him as such. Mrs. Moreland, when asked if she could identify tlie man, said: “I don’t know whether I could or not,” and, when told to look around and see if the man was present, she. said “this man smoking the cigarette is very much the type of man he was.” The man to whom she referred was Treaster. Mrs. George testified that she did not know the man,, and that tbere- was, not anything outstanding about him- that would have made her notice particularly; that the only thing she noticed'was that he looked. through his eyebrows, you could not look straight into his face’. Treaster testified that he had never met Mrs. Moreland, had never been to her home, and had never seen her before the trial. We do not think there was sufficient identification of the alleged agent —the mere fact that he may have stated he was appellant’s agent does not prove agency, and there being no competent or probative evidence that Treaster was the man, no showing of agency appears.

Furthermore, if it had been shown that the. man was an agent of appellant, in order to liave made appellant liable for any libelous statement he may have made, it must have been shown that the statement was made in connection with and as a part of the work he was authorized to do as such agent of appellant. This was a question of fact. Appellant requested the court .to give its special charge No. 29, presenting such issue to the jury to be found, which the court refused. This is assigned as error. If there had been any conflict in the evidence as to this question, the refusal of • the requested charge would have been reversible error, Producers’ Refining Co. v. Frazier (Tex. Civ. App.) 283 S. W. 880, but we think the undisputed facts, as shown by the testimony of Mrs. Moreland and her daughter, Mrs. George, show that the remark, if made by an agent of appellant, was not made in connection with and a part of the work he was authorized to do by appellant. His work was to sell insurance, not to adjust controverted claims relating to insurance collected, or to pass upon the honesty of any other agent, past or present. If an agent selling insurance for appellant made the statement charged, it was without the scope of his authority to represent' appellant, entirely outside of the .duty he was to perform, and that being’so, no liability against appellant resulted. Schulze v. Jalonick, 18 Tex. Civ. App. 296, 44 S. W. 580, 586.

The jury awarded $4,000 exemplary damages to appellee. We have held that, under all the facts, actual damages were not recoverable. In the absence of actual damages, exemplary damages may not be recovered.

The jury, in answer to a special issue, found that appellant and its agents, in making the slanderous statements alleged, pursued a design to slander and coerce appellee, into paying the sum of $17.70, the amount appellant contended appellee owed it for collections not reported. The .charge submitting the issue was duly excepted to and its submission is assigned as error, and the jury’s finding in answer thereto is assailed as without support in the evidence.

We do not believe the evidence raised the issue. We think the record, as a whole, evidences good faith on the part of appellant in its claim of shortage in the account of appel-lee, £nd its efforts to collect same. The dispute arose between appellee and another of appellant’s representatives as to whether ap-pellee was short. At his request appellant’s manager came from Galveston to investigate and settle the matter. At his request appellant’s auditor from Galveston was brought to. audit the claim. The audit disclosed a balance due by appellee of $17.70. Appel-lee was requested to pay this amount, and upon his refusal to do so, suit was -filed and judgment had for the amount. We think the allegations and the jury’s finding are without Support in the record.

Other questions are raised, but under our holdings above they need not be discussed. Believing that no liability against appellant was shown, and the case having been fully developed in the trial court, the judgment is reversed and here rendered for appellant.

Reversed and rendered.


source: Caselaw Access Project

author: HALL, O. J.

license: Public Domain

text:
    CONTINENTAL SUPPLY CO. et al. v. FORREST E. GILMORE CO. OF TEXAS et al.
    No. 3832.
    Court of Civil Appeals of Texas. Amarillo.
    Nov. 16, 1932.
    Rehearing Denied Jan. 4, 1933.

      See, also, 48 S.W.(2d) 376.
    C. G. Dailey, of St. Louis, Mo., Randolph, Haver,' Shirk & Bridges, of Tulsa, Okl., and F. H. McGregor and Fischer & Fischer, all of Amarillo, for appellants.
    W. M. Lewright, of Pampa, for appellees.
   HALL, O. J.

The appellant the Continental Supply Company (hereinafter called the supply company) instituted this suit against the Forrest E. Gilmore Company (hereinafter called the Delaware company), the Forrest E. Gilmore Company of Texas (hereinafter called the Texas company), the Western Supply Company, Worthington Machinery Corporation of Oklahoma, Joseph Greenspon’s Son Iron & Steel Company, and two other companies which were subsequently dismissed from the suit, in which cause the Security Savings & Trust Company of Portland, Or. (hereinafter called the Security company), the Cooper-Bessemer Corporation, the American Tank & Equipment Corporation, and J. F. Pritchard, with leave of the court, intervened.

The plaintiff supply company allegedj in substance: That during 1926 the Delaware company was incorporated under the laws of the state of Delaware, and during the year 1927 the Texas company was incorporated under the laws of Texas. That, in forming the Texas company, the Delaware company, which owned certain property in Texas, transferred said property to the incorpora-tors of the Texas company, which in turn transferred it to the Delaware company in exchange for all of its capital stock, amounting to 50,000 shares of the par value of $1 per share, and, immediately after incorporating the Texas company, the incorporators .thereof transferred all of the capital stock of the Texas company to the Delaware company. That the Texas company was recognized and chartered as a corporation under the laws of Texas by the officers, directors, and stockholders of the Delaware company with the intent and purpose of thereby creating a conduit through which the Delaware company could transact its business in the state of Texas, and that the Texas company, since its creation, had been merely an instrumentality and adjunct through which the Delaware company had operated and carried on its 'business in Texas, in that the Texas company > never functioned as an entity; all of its stock being owned by the Delaware company and its directors and officers being the same persons who were directors and officers of the Delaware company, none of whom has ever resided in Texas. That whatever hooks and records the Texas company had were kept in the office of the Delaware company at Portland, Or., by the agents and officers of said Delaware company. That all property which was acquired in Texas was so acquired by the officers and agents of the Delaware company upon its credit and all debts incurred by the Texas company or in its name were incurred by the officers and agents of the Delaware company. That all debts created in the name of the Texas company which have been paid were- paid by the Delaware company and all moneys earned from the property standing in the name of the Texas company were collected and used by the officers and agents of the Delaware company. That, if the Texas company ever had a bank account, it was not created for its benefit and use, but existed merely for the purpose of clearing checks and drafts made payable to it through said account, and, immediately after said items were cleared, receipts therefrom were transferred to the account of the Delaware company and the Texas company never at any time issued any checks against said account for the payment of any debt created in its name. That all checks against said account were for the purpose of transferring the funds therefrom to the Delaware corporation. That, when the Texas corporation was organized by the stockholders, officers, and directors of the Delaware company with its entire capital assets being owned by the Delaware company, it was intended by such stockholders, officers and directors that the Texas company was not to operate and function as an entity, separate and distinct from the Delaware company, but that all property acquired in the name of the Texas company would be acquired by the officers, directors, and agents of the Delaware company upon its credit and paid for with its funds, and that such property would, in fact, be owned by the Delaware company, and, in accordance with'said intention, the officers and agents of the Delaware company thereafter erected a large casing-head gasoline refining plant near Pampa, Tex., at a cost of approximately $850,000, upon ten acres of land described in the petition, which is known as the property of the Texas company, but that said company as a separate entity had no money or credit to contribute to, the building of said property and in fact as a separate entity it contributed nothing, but said casing-head' gasoline refining plant was constructed by the Delaware company under the supervision of its officers and directors with labor for which it paid, and was equipped with machinery, materials, tools, and supplies purchased by the Delaware company for cash or upon its representation that it was the owner of said refining plant, and the Texas company had nothing to do with the construction of said plant and contributed nothing whatever, and has received none of the moneys earned by said plant, but, as alleged, all the earnings have been collected by the Delaware company and paid in to its account. That the Delaware company has at all times controlled and operated said plant, paying the operating expenses. That said Delaware company and Texas company are not now and have never been separate and distinct entities, but they are now and at all times have been a unity, at least in so far as the rights of creditors of either or both of them are concerned, and as to such creditors the property in Texas standing in the name of the Texas company is,' in fact, the property of the Delaware company, and is subject to the indebtedness incurred for the materials, equipment and supplies purchased from the plaintiff supply company and used in the construction of said plant.

Plaintiff further alleged: That between May 4, 1929, and 'June 4, 1930, at the request of Ohester A. Sheppard, the president of both the Delaware company and the Texas company, and at the request of R. M. Mc-Calley, the general manager of both companies, it sold and delivered to said companies at Pampa and Kingsmill, Tex., the various items of machinery, materials, tools, and supplies set out in the account marked “Exhibit A,” and made a part of the petition, for the total sum of $31,731.89, which machinery, etc., were used by the defendants in the construction of their refining plant upon the premises above described. That no part of the purchase price has been paid. That on August 19, 1930, plaintiff caused its mechanic’s and materialman’s lien statement to be filed with the county clerk of Gray county, Tex., as provided by the Constitution and laws of the state of Texas.

Plaintiff further alleged a sale to defendants jointly upon the agreement of Sheppard and McCalley that both corporations would make payment of the indebtedness, and further alleged that, relying upon said representations and agreements on the part of said defendants, the plaintiff agreed to deliver to botL companies said machinery, etc., upon the terms and conditions above stated.

Plaintiff alleged in the alternative that, should it be mistaken as to the unity of the defendants, the Delaware and Texas companies, and should the court hold that they were separate and distinct entities and that the refining plant was the property of the Texas company, nevertheless plaintiff was entitled to recover its debt for said materials, etc., so sold and used in the construction of said plant from both of said defendants, and was entitled to a lien and a foreclosure thereof upon said plant for the following reasons: That about April 20, 1929, R. M. McCalley, the general manager of both companies, and C. A. Sheppard, the president of both companies, represented to H. B. Gutelius, the president of plaintiff supply company, that they desired to expand and enlarge their plant, known as plant No. 3, located near Pampa, Tex., and being the property involved in this suit, and desired to make certain additions thereto, for which they would require certain machinery, material, pipe, etc., from time to time during the construction, and desired to purchase the same from plaintiff upon open account on long time, the purchase price for which was not to become due until after the expiration of one year from the date of the first delivery of materials to the property. That they represented to plaintiff and its president, Gutelius, that both the Delaware and Texas companies would be liable for and pay for such materials, etc., that might be furnished by plaintiff and that the Delaware company would guarantee full payment' of the same, as it owned and controlled the Texas company, to which latter company the materials, etc., were to be furnished. That they further represented that said two companies were in truth and in fact one and the same. That, as evidence of the agreement on the part of the Delaware company to guarantee the payment for materials to be furnished by plaintiff, it was agreed that said defendant would execute and deliver to plaintiff supply company from time to time notes evidencing the amount of the account. That said officers further represented to plaintiff that, if it would furnish such material, etc., upon the terms above mentioned, the Delaware and the Texas companies would from time to time make payment upon said account as they were able, and that for the purpose of convenience plaintiff was requested to carry the account in the name of the Delaware company and mail invoices to the office of the Forrest E. Gilmore Company at Tulsa, Okl. That, relying upon the representations and agreement upon the part of said defendants, the plaintiff agreed to sell and deliver, upon the terms above set forth, the materials, machinery, pipe, and supplies that might be required in the construction and completion of the refining plant, and did furnish the materials, etc., set out' in the attached account marked “Exhibit A” to the extent and of the value of $31,731.89.

Plaintiff further alleged that the Western Supply Company, Worthington Machinery Corporation, Joseph Greenspon’s Sons Iron & Steel Company, were asserting liens against the property that were subordinate and inferior to plaintiff’s lien, and prayed that they be made parties and for judgment against both the Delaware and Texas companies, establishing its debt and foreclosing its materi-alman’s and constitutional liens upon the property involved. .

The intervener Security company alleged that on March 28, 1930, the Texas company executed and delivered to intervener its note in the principal sum of $500,000, payable to the order of intervener on March 28, 1931, with interest at 7 per cent, per annum, and that said note was secured by a mortgage upon the refining plant, and that said Texas company had defaulted in the payment of said note for the amount of which intervener sought judgment against the Texas company for the full amount, principal, interest, and attorney’s fees, and for the establishment of its mortgage as a first and prior lien upon the property involved, and for the foreclosure of the same.

It appears from the record that plaintiff’s reply to the intervention of the security company is contained in its second amended original petition, the substance of which we have heretofore set out, and in which it replied that, whatever lien the Security company may have upon the property, it is subordinate and inferior to plaintiff’s lien, in that plaintiff’s lien had its inception and attached to said property on May 4, 1929, that being the date when it first delivered material, machinery, etc., that said Security company is not a bona fide holder and owner of said indebtedness, but was merely a trustee for the certificate holders referred to in the deed of trust, and that said certificate holders and beneficiaries under the mortgage had actual knowledge of the indebtedness due plaintiff for the materials, etc., or had such knowledge as was sufficient to put them upon inquiry as to plaintiff’s debt and lien.

Thereafter the Security company filed its second supplemental petition, admitting that it held the note and mortgage as trustee for the benefit of all persons entitled to the fund to be realized from the payment of the $500,-000 note upon which it sued or the sale price of the security which it held, and as such trustee was entitled to maintain its action in intervention for the use and benefit of all persons entitled to the fund, and attached to said pleading a list of the various persons who were alleged to be owners of the fund and holders of certificates of interest in said note. It denied knowledge of the fact of plaintiff’s indebtedness against the property in question.

The Cooper-Bessemer Corporation intervened, adopting in part the pleadings of the plaintiff supply company, alleging that it furnished materials, etc., used in the construction of the plant, an itemized statement of which was attached to its petition, of the value of $9,656.17; that it had filed its material-man’s lien on May 6.1931: and prayed for recovery against both the Delaware and Texas companies and for foreclosure of its material-man’s lien in the sum of $1,144.06, evidenced by two promissory notes.

Intervener Pritchard alleged that about January 15, 1930, he entered into a written contract with the Texas company, acting through its vice president and legal manager, R. M. McOalley, under the terms of which intervener agreed to dismantle and load on the cars and ship to defendants at Kingsmill, Tex., and there install, eight bay cooling-tower reflux condensers, water pumps, etc., which tower and condensers were at that time located upon the defendant’s plant No. 17 in the state of Oklahoma, for which services defendants agreed to pay him $5,693, and further agreed to pay him $771 for additional services not covered by the written contract. Pritchard also claimed a lien upon the plant.

The Delaware company filed no answer in the case.

The Texas company answered, denying that it was a mere instrumentality and adjunct of the Delaware company and alleged: That it was in truth and in fact a separate and distinct corporation from the Delaware company, and as such maintained its own board of directors and officers. That its acts and conduct were controlled and managed by its own officers who acted by authority of its own board of directors. It admitted: That it was indebted to the Delaware company in large sums of money and that the Delaware company received the revenues from the plant at Pampa, Tex. That the Delaware company’s superintendent managed and controlled the plant at Pampa. That it made a contract with the Delaware company whereby the latter agreed to construct the refining plant at Pampa, furnishing all materials and labor, at the cost and expense of the Delaware company. That, after said plant was completed the Delaware company was to receive the revenues thereof until it had been repaid the amount it had'expended upon said plant for the Texas company.

It further alleged: That the plaintiff and all other interveners and defendants had theretofore accepted notes from the Delaware company in settlement of their respective accounts, for whatever material they each had furnished toward the construction of the plant. That on September 25, 1930, plaintiff supply company and other creditors of the Delaware company executed a creditors’ agreement which expressly stipulated that they were creditors of the Delaware company, and that, by reason of having sold and billed said material to the Delaware company and having never billed the Texas company and having accepted notes of the Delaware company and signed said creditors’ agreement stipulating that they were creditors of the Delaware company, the plaintiff and said interveners and other creditors parties to said agreement are estopped thereby to assert that said two defendant corporations are ■one and the same and are estopped to claim any indebtedness against the Texas company or assert any lien upon its plant.

Plaintiff replied by general and special exceptions to said plea of estoppel and further answered: That, if it should be mistaken in its allegation of the unity of said two defendant companies, then it had been misled by the wrongful conduct of said companies and the misleading conditions under which they carried on their business. That they carried on their business with the intention of misleading plaintiff and others in dealing with them. That the two companies were practically identical in name. That the capital stock of the Texas company was owned by the Delaware company. That the majority of the respective boards of directors of each during the period in which the indebtedness was incurred was composed of the same persons. That the officers, managers, and books .of accounts of both corporations were the same, and in their general manner of carrying on their business they operated as one without discrimination. That the profits and benefits acquired by each were the profits and benefits of the other. That the debts of the Texas company were treated as the debts of the Delaware company, and vice versa. That the Delaware company published to the world that it was the owner of the refining plant in Texas, and represented that it was the owner of the revenues derived therefrom, and that for said defendants to contend that they are separate and distinct corporations constitutes constructive, if not actual, fraud as against the plaintiff, and that both of said defendants are estopped to deny their indebtedness to plaintiff and estopped to question plaintiff’s lien upon the property. Plaintiff further denied the acceptance of the notes of the Delaware company as payment of the debt sued on, and alleged that, in accepting said notes, the plaintiff did not waive the liability of the Texas company for said debt.

The Cooper-Bessemer Corporation, the American Tank & Equipment Corporation, and Pritchard adopted the plaintiff’s reply to the answer of the defendant.

Joseph Greenspon’s Son Iron & Steel Company, Worthington Machinery Corporation of Oklahoma, and Western Supply Company of Texas filed answers setting up amounts due them, respectively, alleging facts to show the existence of lien's in their favor, and prayed for judgment and foreclosure.

During the trial, the plaintiff filed a trial amendment praying for judgment against the Texas company in the sum of $13,719.17, that being the amount shown upon the trial to be unpaid on the purchase price óf the machinery, etc., furnished in the construction of the plant, and prayed for the foreclosure of its lien for said amount and for judgment in the further sum of $38,620.62, the balance due from the Delaware company for machinery ánd equipment furnished said company and used by it in the eonstruction of its gasoline plants in the state of Oklahoma.

After the trial had progressed about ten days, plaintiff filed another trial amendment in which it is alleged: That the Texas company had delivered the note for $500,000 secured by a mortgage to the Security company; it being contemplated that the $500,000 in money would be turned over to the Texas company as consideration for said note. That the Security company then attempted to and has diverted said security from the purpose for which it was given, that is, to secure the payment of $500,000 to the Security company, which company had agreed to lend to the Texas company, such diversion of such security being in this, to wit, that the Security company issued and delivered to C. A. Sheppard and E. L. Hall certificates of interest in whatever amount the Security company might collect from the defendant, the Texas company, upon said note and the security given to insure the payment of said note in exchange and in consideration of said above-named persons who were creditors of the Delaware company releasing and discharging their alleged debts against the Delaware company, and by reason of these facts there has been a diversion of the security from the purpose for which it was given, and therefore said above-named persons who now claim to hold said security in consideration of the release of their debts against the Gil-inore company are not entitled to enforce the same; neither is the same intervener Security company entitled to enforce said security for them.

The ease was submitted to the jury upon special issues. Based on the answers thereto, the court rendered judgment that plaintiff supply company and interveners Cooper-Bessemer Corporation, American Tank & Equipment Corporation, and Pritchard take nothing; that the intervener Security company recover its debt and have a foreclosure of its mortgage lien upon the plant; that the Western Supply Company and Worthington Machinery Corporation recover judgment for their respective claims and have foreclosure of their respective liens.

The Cooper-Bessemer Corporation, American Tank & Equipment Company, and J. F. Pritchard, together with plaintiff, have appealed.

The first special issue submitted by the court is as follows: “Do you find from a preponderance of the evidence that during the times mentioned in the pleadings in this case that the Forrest E. Gilmore Company, the Delaware corporation, and the Forrest E. Gilmore Company of Texas, the Texas corporation, constituted a unity as that word is hereinafter defined to you?”

Appellants’ first three propositions attack the action of the court in submitting this issue upon fiumerous grounds; one of them being that it presents a question of law and not an issue of fact.

In our opinion it does not present an issue of fact, but rather an issue of mixed law and fact, if not an issue purely of law. Whether it presents an issue of law or an issue of mixed law and fact, it constitutes reversible error.

For the purpose of showing that the court should hold that the Delaware corporation and the Texas corporation were not separate entities, plaintiff alleged a great many facts, in addition to the fact that the Delaware company owned all of the stock of the Texas company and that the officers and directors of the one were also officers and directors of the other. It is alleged: That the officers, directors, and stockholders of the Delaware company owned property in the state of Texas, and, with the intent and purpose of creating a conduit through which it could transact and carry on its business in the state, that it organized and created the Texas corporation as an instrumentality and an adjunct for the conduct of its business in this state, and that the Texas company was simply a tool of the Delaware company. That the Texas company never functioned as an entity. That none of its directors or officers ever resided in Texas. That whatever books and records the Texas corporation had were kept in the office of the Delaware company at Portland, Or., and by the agents and officers of the latter company. That all property which was acquired in the state of Texas was so acquired by the Delaware company and upon its credit, and all debts incurred by the Texas company or in its name were so incurred by the officers and agents of the Delaware company and all such debts that have been paid were paid by the Delaware company. That all moneys earned by the Texas company were collected by the officers and agents of the Delaware company and used by said last-named company. That, if the Texas company ever had a bank account, it was created, not for its benefit, but for the purpose of clearing checks and drafts made payable to it through said account, and immediately after said items were cleared receipts therefrom were transferred to the Delaware company. That the Texas company never at any time cheeked against said account for the payment of any debt created in its name. That all property acquired in the name of the Texas company was contracted for by the Delaware company and all payments were with the funds of said company. That the refining plant at Pampa was erected by the Delaware company under the supervision of its officers and directors and with labor paid for by the Delaware company, and with materials, etc., purchased by the Delaware company upon its credit and upon representation that it wag the owner of the refining plant being constructed.

The witness Sheppard, who was president of both companies, admitted the truth of several of the material facts alleged by plaintiff, while there was a conflict of evidence as to other facts.

By proper issues, the court should have submitted the controverted facts to the jury, and, upon consideration of their findings, together with the facts not controverted, the court should have determined the issue of unity or corporate entity, instead of submitting that issue to the jury.

The legal fiction of the separate entities of two corporations, the stock of which is owned by the same parties, should be disregarded when necessary for the prevention of fraud or to protect the legal rights of third parties. Upon ascertainment of all the facts, it is the prerogative of the court and not the jury to look through the forms to the substance of the relations existing between the corporations. Williams v. Freeport Sulphur Company (Tex. Civ. App.) 40 S.W.(2d) 817; Oriental Investment Co. v. Barclay, 25 Tex. Civ. App. 543, 64 S. W. 80; Buie v. Chicago, etc., Ry., 95 Tex. 51, 65 S. W. 27, 55 L. R. A. 861; Fowler v. Small (Tex. Civ. App.) 244 S. W. 1096, 1097; O’Neal v. Jones (Tex. Civ. App.) 34 S.W.(2d) 689; 14 C. J. 61, § 22; Id. 62, § 25; 10 Tex. Jur. 648, § 49.

Upon ascertainment of the facts, the courts will disregard the fiction of corporate entity where the fiction (1) is used as a means of perpetrating fraud; (2) where a corporation is organized and operated as a mere tool or business conduit of another corporation'; (3) where the corporate fiction is resorted to as a means of evading an existing legal obligation ; (4) where the corporate fiction is employed to achieve or perpetrate monopoly; (5) where the corporate ffction is used to circumvent a statute; and (6) where the corporate fiction is relied upon as a protection of crime or to justify wrong.

With reference to the first classification, there is testimony tending to show that the supply company was induced to sell its materials, machinery, etc., by the fraudulent representations of Sheppard as to the identify of the two corporations. There is also testimony tending to sustain the allegation under the second classification above that the Texas corporation was a mere tool of the Delaware company. As to the third classification, where the fiction is resorted to as a means of evading an existing legal obligation, there is testimony showing that Sheppard, Hall, and probably other directors of the Delaware company canceled the alleged indebtedness of said company to them, and, as consideration therefor, took over all that part of the secured $500,000 note which had not been sold by the Security company, thereby preferring themselves as creditors over the general creditors of both corporations. The general rule is that officers and directors of an insolvent corporation, who are its creditors, cannot manipulate the affairs and stock of their insolvent company so as to become its preferred creditors to the injury of general creditors. It is true that the appellant does not by specific allegation attack this transaction as a fraudulent conveyance, but the allegations of fraud with reference to this transaction, and also as to the fraudulent representations through which it is alleged that the supply company was induced to furnish the machinery, were sufficient as against a general demurrer. There is also evidence which tends to show that the corporate fiction is relied upon as a protection to justify the wrongs of their several officers and stockholders.

It is true that appellant did not request the trial judge to submit to the jury the controverted issues of facts tending to establish the unity of the two corporations, but, because of proper objections to special issue No. 1 which were overruled, it becomes the duty of this court to consider the assigned error.

With reference to the fifth proposition, we think the appellants’ pleadings and evidence raised the issue of estoppel, though the pleading was probably not sufficiently specific as against a general demurrer. The record shows that the appellants requested the court to submit the issue, which was overruled. This was error.

The depositions of numerous witnesses who are shown to have been purchasers of an interest in the $500,000 note and the holders of certificates showing the extent and terms of their respective purchases were introduced in evidence, over the objections of the appellant. This testimony was immaterial upon the issue of a want of necessary parties, but, since the appellants’ allegations denying the validity of the $500,000 note and mortgage and further denying the assignment of any interest therein raised the issue and invited the error, they cannot complain of the testimony.

Appellant insists that there has been a' defect of parties as interveners, because the Security company, the holder of the $500,000 note, brought suit to recover thereon and to foreclose the mortgage without malting the certificate holders parties. The question of defect of parties was not raised by sworn plea, nor do we think there would have been any merit in the plea if filed. The certificates issued by the Security company and accepted by the several certificate holders as an evidence of their interest in the note and fund, by their provisions, imposed the duty and responsibility upon the Security company to collect the note as it became due and to pay to the certificate holders semiannually their proportionate share thereof, and, in the event of default in the payment, the Security company was empowered and directed to enforce performance of the contract evidenced by the note and mortgage in any manner provided by law without obtaining any further consent from the certificate holders, and the Security company was empowered to so act at its discretion. The provisions of each certificate are tantamount to the grant of a power of attorney to the Security company to file this suit. Moreover, it is the general rule that a trustee holding the legal title of a chose in action is entitled to sue in his own name to recover the amount which may be due the equitable owners. Ormsby v. Ratcliff (Tex. Civ. App.) 22 S.W.(2d) 504; Aldridge v. Pardee, 24 Tex. Civ. App. 254, 60 S. W. 789; Texas W. Ry. Co. v. Gentry, 69 Tex. 625, 8 S. W. 9S; Schuster v. Crawford (Tex. Civ. App.) 199 S. W. 327; Richardson v. Beasley (Tex. Civ. App.) 50 S.W.(2d) 420; Bingham v. Graham (Tex. Civ. App.) 220 S. W. 105.

The finding of the jury to the effect that McCalley, the general manager of both companies, did not have authority to make the contract with Pritchard for the work done by him, is not supported by the evidence.

10 Tex. Jur. 981, states the law as follows: “The term ‘general manager’ of a corporation, according to the ordinary meaning of the term, indicates one who has general direction and control of the affairs of the corporation. ⅜ * * Attention is also called to the authority which the manager of any business has to appoint his principal in the ordinary course of the affairs which he has been employed to manage. * ⅜ * A general manager may do everything in the transaction of the business of the corporation that the corporation could itself do in its routine and daily business and where he acts as the sole representative within the state, of a foreign corporation, his powers are co-extensive with the powers of the corporation he represents.”

The record shows that, under his agree-' ment with McCalley, the general manager, Pritchard performed labor and incurred expenses of approximately $6,000, and that the result of his labors were satisfactory to and have been accepted by the defendants.

By its twelfth, thirteenth, and fourteenth propositions, the appellant insists that the court erred in permitting counsel for the defendants, the Delaware company and the Security company, to endeavor to impeach McCalley upon cross-examination and ,by proof of certain specific acts and conduct of said witness which were wholly irrelevant and immaterial and had no bearing whatever upon the issues involved.

We sustain this contention, because the record discloses that there has been an unwarranted violation of the rule that a witness cannot be impeached by requiring him to testify to discreditable acts on his part immaterial to the issues in the suit when such proof is elicited from other witnesses and even upon cross-examination of the witness himself. Boon v. Weathered, 23 Tex. 675; Gulf, C. & S. F. Ry. Co. v. Johnson, 83 Tex. 628, 19 S. W. 151.

When McCalley was upon the witness stand, the appellees’ counsel was permitted, over appellants’ objection, to ask the witness if Sheppard had not personally loaned the witness money to bring his family to Tulsa, and to prove that the witness was in St. Louis a number of times talking to Gutelius, the president of the supply company, after March, 1931. When asked what the witness was doing there, he answered: “That is my business.” The court required the witness to answer. The appellants objected, and ap-pellees’ counsel stated, in the presence of the jury, that it was a question for the jury whether the witness was conducting his private business in St. Louis, or “cooking up this lawsuit.” Over objections of appellants’ counsel, he asked this question: “Have you at any time, either before March 13, 1931, the time that your connection with the Forrest E. Gilmore Company of Delaware, or these companies, was severed, or since that time, personally or by letter, U. S. mail or through delivery by any other person, firm or corporation, delivered to or sent to or placed in the possession of the Continental Supply Company, Mr. Fischer, or any other of the parties to this suit, or the attorneys in this suit, any books, records, papers, telegrams, or communications of any kind or character, taken by you from the files or from the office of the Forrest E. Gilmore Co. of Delaware or the Forrest E. Gilmore Co. of Texas, or any other of the corporations involved herein?”

E. D. Ulrich, a witness called on behalf of the Texas company and the Security company, was asked by appellees’ counsel the follow question: “Prior to coming to Texas in 1930, had* you ever heard or had any one ever told you that McCalley had been authorized by any one connected with the Forrest E. Gilmore Company of Delaware to- take oil and gas leases in his own name, charging the expense of agents procuring the same through the Eorrest E. Gilmore Oo. of Delaware?”

The witness was allowed to testify from hearsay to a transaction between a Mr. Star and McOalley with reference to some personal leases which MeCalley claimed to own in Texas and that subsequently MeCalley refused to tell witness anything about his personal affairs, and said witness further testified that on or about March 13, 1931, he had a conference with Sheppard and MeCalley in the company’s office at Tulsa, and that wit: ness had discovered innumerable irregularities in McCalley’s management of the company which were not to the best interest of the company, and that witness went into the office and said to McOalley: “You are the most diabolical rat” (using some profane words) “that I have ever known and even a cur wouldn’t bite the hands that feeds it.” Ulrich was further permitted to detail what he had said in his abuse of MeCalley, calling him an embezzler and a crook, charging that he was grabbing anything he could get, informing him that the witness had intercepted his telephone conversations with Gutelius and found that he wds conniving with him, charging that McCalley’s action was that of a man who did not belong to decent people, and stating to MeCalley: “I will not stay another minute with this company or have-anything further to do with it if you are permitted to stay in management of this company and furthermore I don’t believe anything or any report that you ever sent to the Portland office from the first day you came into the office until the present time.”

The record shows that the witness was talking in a loud voice, and MeCalley tried to induce him to hush, and witness said: “Don’t ‘sh’ me at all. I will say what I have to say and furthermore I as a stockholder of the company, whether the other stockholders back me up or not, am going to find out about the taking of the money from this receiver and I personally will put out a warrant for you and you will go before a court and we will find out whether this sort of conduct will bo tolerated in the State of Oklahoma.” The witness was further permitted to testify that MeCalley had purchased a pipe line in Oklahoma from the Continental Supply Company which had never been approved by the directors of the Delaware company, and charged in that conversation MeCalley with receiving “cut backs” from the Continental Supply Company.

While it is permissible for a party upon cross-examination or otherwise to «show the interest and bias or prejudice of a witness and to impeach him by testimony as to his character and reputation for truth and veracity, it is uniformly held to be reversible error for the court- to admit evidence relating to specific acts and conduct for the purpose of impeachment. Burchill v. Hermsmeyer (Tex. Civ. App.) 230 S. W. 809; Harrington v. Claflin, 2S Tex. Civ. App. 100, 66 S. W. 898; Missouri, K. & T. Ry. Co. v. Adams, 42 Tex. Civ. App. 274, 114 S. W. 453; Dooley v. Boiders (Tex. Civ. App.) 128 S. W. 690.

The record contains more testimony of the character of that hereinbefore set out, which was clearly inadmissible, and, since appel-lees’ counsel states that MeCalley was the chief witness upon whose testimony the appellant was depending to establish its ease, the improper evidence admitted over ¡apt-pellants’ objection is clearly prejudicial and accounts for the failure of the jury to believe any part of McCalley’s testimony with reference to material issues made by the pleadings. This alone would require a reversal of the judgment.

The transcript in this case contains 475 pages. The statement of facts, together with original instruments and documents, including the official records and minutes of the two corporations, approximates-2,000 pages. There is a dearth of references to the record in briefs filed by both parties. We are not able to determine from this unwieldy mass of testimony the merits, if any, of the various creditors’ claims of their respective rights to foreclosure of the mechanic’s liens. Amongst the original instruments and documents set up, there are contracts in writing, surveys, plots, maps, and diagrams with reference to Greenspon’s Son Iron & Steel Company’s claim, several hundred pages of invoices attached to what purports to be contracts for materialmen’s liens, carbon copies of accounts, invoices, letters, abstracts, drawings, and blueprints of the plant at Pampa, letters and telegrams and carbon copies of others, signed by Sheppard and one or the other of the defendant companies,, which, for the most part, have no place in the files of this court.

Rule 72 for district and county courts provides that, when evidence is sufficient to establish a fact alleged by either party, the written instruments admitted as evidence relating thereto should not be copied in detail into the statement of facts, but that the facts thus established should be stated as facts proved in the case. The rule further provides that, if a note or other contract, mortgage, or deed of trust which is the basis of the action or the answer or cross-bill, it may be copied once in the statement of facts; and rule 73 provides that, where there is any reasonable doubt of the sufficiency of the evidence to constitute proof of any one fact under the preceding rule, then the written instrument or parts thereof may be inserted. Rule 75 provides that, where there is no dispute, with reference to the validity or the correctness of any written instrument adduced in evidence, it should be described and not copied, or else its legal effect as evidence stated as a fdct established; and rule 76 further provides that only so much of any such questioned instrument as may be necessary to present the question shall be copied in the statement of facts.

Compliance with these rules would have resulted in an elimination of at least one-third of the cumbersome record which has been filed in this court. :

Article 2239 (Rev. St.), as amended by the Acts of the 42d Legislature, First Called Session, c. 34 (Vernon’s Ann. Civ. St. art. 2239), provides that any original documentary evidence, sketches, maps, plots, or other matters introduced in evidence shall be transcribed by said stenographer into the said stenographer’s report or, if identified in the stenographer’s report, may by written direction of the judge be sent up in the original form if requested by either party to the suit, and may be returned to the trial court when the cause is disposed of by the appellate court. It was not intended by the Legislature in the enactment of this statute that the originals or carbon copies of letters, telegrams, .records, and minutes of corporations and other private documents, should be sent as part of the statement of facts to the appellate courts. Such evidence, or the relevant parts thereof, should be copied into the statement of facts in connection with the testimony of the witnesses who establish the genuineness of such written evidence. With reference to documentary evidence proper, the relevant parts thereof should be copied into the statement of facts, and this requirement is not abrogated by the fact that article 2239 provides that the original document may also accompany the statement of facts upon written order of the trial judge. If the genuineness of any documentary evidence is questioned, either by plea of non est fac-tum or alteration or other plea, it is proper for such documents, such as a deed, patent, note, will, mortgage, etc., to be sent to the appellate court with the record for the inspection of that court.

Some of appellants’ assignments are duplicitous and multifarious, but we have considered them, and, with the exception of those hereinabove considered, they are overruled.

So much of the judgment as is in favor of the Western Supply Company and the Worth-ington Machinery Corporation is affirmed. For the reasons stated, the judgment is reversed as to all other parties, and the cause as to them is remanded.

Affirmed in part, and reversed and remanded in part.


author: FLY, O. J.

text:
    BANCO DE MEXICO, SUCURSAL EN NUEVO LAREDO, TAMAULIPAS, MEXICO, v. DA CAMARA.
    No. 8921.
    Court of Civil Appeals of Texas. San Antonio.
    Nov. 30, 1932.
    Rehearing Denied Jan. 4, 1933.
    Gibson & Blackshear, of Laredo, for appellant.
    Phelps & Phelps, of Laredo, for appellee.
   FLY, O. J.

Appellee instituted this suit against appellant, a corporation domiciled in Nuevo Laredo, state of Tamaulipas, republic of Mexico, in a district court of Webb county, Tex., to recover the value of an automobile, sold by appellee to Frederico Pacheco, who lived in Webb county, and who, in violation of a mortgage given on the car, had removed it from Texas to Mexico. It was alleged in tlie petition: “Plaintiff further alleges that while defendant is without the jurisdiction of the court that it has money and funds within the jurisdiction of the Court and against the holder of said money and funds, plaintiff is suing out a writ of garnishment and impounding the same, that out of such funds the amount awarded plaintiff by the judgment of this Court may be made.”

There are no objections urged to the findings of fact of the trial judge, and they will be adopted by this court, except as may be modified or changed herein.

“J. B. Da Oataara, a dealer in automobiles residing and haying his place of business in Laredo, Webb county, Tex., on the 7th day of August, 1930, sold and delivered to Erederico Pacheco, one certain Dodge truck and trailer at a total sales price of $1,125, $250 cash and eleven notes for $50 each and one for $325; notes due monthly with interest at 10 per cent, from August 7, 1930, until paid. At the time of the conversion hereinafter mentioned, six of the $50 notes had been paid, and there remained unpaid five $50 notes and the note for $325, or a total sum of $575 unpaid. Pacheco executed and delivered to Da Camara a chattel mortgage on the truck and trailer to secure the deferred payments, and which chattel mortgage was forthwith registered with the county clerk of Webb county, Tex.

“Pacheco took this truck and trailer to Nuevo Laredo across the Rio Grande from Laredo, Tex. He paid the import duties at the Mexican customs and there filed an invoice given him by Da Camara, which set forth the terms of payment and showed the installments due on the purchase price.

“On the 16th day of February, 1931, Pacheco executed a bill of sale covering this truck and trailer with other ears to the defendant bank, which is a Mexican corporation; Pacheco being at that time indebted to the defendant ‘for past advances in the sum of 25,-000 pesos. I find no delivery of the truck and trailer was made by Pacheco to the defendant, that there was no consideration paid him, but that an agreement existed whereby Pacheco would have some four months to pay his debt; delivery being contemplated in the event he failed to pay the same. Pacheco was then insolvent.

“On March 3, 1931, the defendant, acting through its manager, without any process of Mexican law, sent officers to seize this truck and trailer with others belonging to Pacheco, and forcibly, and without his consent, seized the same and took possession thereof.

“On March 7, 1931, the plaintiff, having been apprised of the seizure of the truck and trailer, notified the defendant and its manager that he held a chattel mortgage lien against said truck and trailer and demanded that defendant surrender same to him that he might subject it to sale under the terms of the chattel mortgage, and so collect his' indebtedness against Pacheco. The manager for the defendant, with full knowledge of the facts, refused plaintiff’s demands, and on March 17, 1931, credited Pacheco’s account on the books of the hank with the sum of 19,000 pesos, the amount named in the bills of sale for the several trucks.

“This suit was filed on March 7, 1931, and on that date, a writ of garnishment was served on the Laredo National Bank and the defendant afterwards by answer submitted its person to the jurisdiction of the court.

“The value of the truck and trailer at the time and place of conversion was $750 and plaintiff’s debt or interest in the truck and trailer on the 7th day of March, 1931, the date of conversion, was $608.

“Previous to the 3d day of March, 1931, the date defendant seized the truck and trailer, it was informed of the debt due the plaintiff by Pacheco.

“No law of Tamaulipas, Mexico, on the subject of ‘Conversion’ was either alleged or offered in evidence.”

This suit is based upon the fact that appellant took possession of and appropriated to its own use property on which appellee had a chattel'mortgage, of which appellant had actual knowledge at the time it seized and appropriated the property. Under the laws of Texas, the appropriation of the property was unlawful and constituted conversion, but those acts were not done in Texas, and consequently constituted no cause of action in Texas, unless they constituted a cause of action, under the laws of Mexico. Liens on personal property are not recognized in Mexico, and neither is the delivery of personal property essential or necessary to a sale of such property. It was shown that under the laws of Mexico no such action as that of conversión is recognized, such action finding no place or support in the civil law. The truck was sold by Pacheco to the Banco de Mexico in Nuevo Laredo, and was taken possession of and appropriated by the bank in Mexico.

As shown in this and other cases that involve the laws of Mexico, great difficulty is experienced in arriving at what the laws are on any given subject, and that difficulty is often heightened and increased by efforts to obtain an explanation of the laws from those who might reasonably be supposed to be acquainted with the laws. According to the Mexican attorney who testified as to Mexican laws, they are so dissimilar to Texas laws as to be incapable of enforcement in the courts of this state. Mexican Nat. Ry. Co. v. Jackson, 89 Tex. 107, 33 S. W. 857, 860, 31 L. R. A. 276, 59 Am. St. Rep. 28. We quote from the Supreme Court in that case:

“The decisions of this court (well sustained by high authority) establish the doctrine that the courts of this state will not undertake to adjudicate rights which originated in another state or country, under statutes materially different from the law of this state in relation to the same subject. [St. Louis, I. M. & S.] Railway Co. v. McCormick, 71 Tex. 660, 9 S. W. 540 [1 L. R. A. 804]; [Texas & P.] Railway Co. v. Richards, 68 Tex. 375, 4 S. W. 627.
“Many difficulties would present themselves, in an attempt to determine the meaning of the Mexican law, and to- apply it in giving redress to the parties claiming rights under it. We understand the Mexican courts are not governed by precedent, and we have no access to reports of adjudicated cases of those courts, from which we could ascertain their interpretation of these laws. The language of some of the articles quoted is ambiguous, and we find great difficulty in determining what would be a proper interpretation of the law. We might or might not give the same effect to the language that is given to it in the courts of Mexico. There could be no reasonable certainty that the parties’ rights would be adjusted here as they would be if the case were tried in the courts of that country, which is their right; for it is well settled that, if one state undertakes to enforce a law of another state, the interpretation of that law as fixed by the courts of the other state is to be followed. This difficulty of itself furnishes a sufficient reason for the courts of this state to decline to assume jurisdiction of this class of cases.”

Appellant did not invade, impair, or destroy any rights of appellee in the truck in Texas, but all acts took place in Mexico, and, of course, such trespasses and invasion of rights must be measured by the laws of the country in which they occurred. The bill of sale to the property was made in Mexico; the property was seized and appropriated in Mexico. There is no such action as that of conversion in Mexico, and it follows that appellant cannot be dragged by an attachment of its property into a foreign country and have its rights adjudicated by foreign laws. Of course, the courts of Mexico were and are open to appellee to prosecute any rights he may have under the laws of Mexico. Appellant has not violated in Texas any rights of appellee in the personal property, and ap-pellee could not assert such rights in Mexico as are secured to him by a law unknown to Mexico and unenforceable there. The laws of Mexico, as proved, give an adequate remedy to appellee for any wrongs sustained by him in that country, and appellant has the right to be heard in the courts of its country.

The laws of Mexico do not create or recognize the right of liens by mortgage or otherwise on personal property, and, when appel-lee’s property was carried into Mexico, no lien could be asserted against an inhabitant of that country. It was totally inoperative in Mexico, and appellant did not appropriate property on which appellee had any claim in Mexico. We quote from the case of Greene v. Bentley (C. C. A.) 114 F. 112, 114:

“The appellant contends in his first assignment of error that a valid lien in his favor 'having been fixed on the mules in Cass county, Tex., the lien could not be devested or destroyed by Smith’s removing the mules into Louisiana. As against Smith, this proposition is probably correct; but as against Bentley & CSo., who acquired the mules in Louisiana in good faith and without notice, and under the circumstances shown by the evidence, it is not necessarily correct. Chattel mortgages are unknown to the laws of Louisiana, and cannot be enforced in that state. Delop v. Windsor, 26 La. Ann. 185. It would seem, therefore, ttat when the mules in controversy were moved into Louisiana, with or without the consent of the appellant, they became subject to the laws of that state, and the lien of the Texas mortgage lapsed, or at least remained in abeyance, as long as the mules remained in Louisiana. It follows that the mules in Louisiana were subjected to seizure and sale under execution against Smith, the owner, the same as if no mortgage had ever been granted.”

There is no merit in the claim that appellant lost any rights under Mexican law by appearing and endeavoring to prevent the unlawful appropriation of the property by the inhabitant of a foreign country. Appellant appeared only to claim that its property was not subject to seizure under process from a Texas tribunal.

The case of Mendiola v. Gonzales (Tex. Civ. App.) 185 S. W. 389, is relied upon by appellee, but that opinion clearly distinguishes itself from this ease, and is not authority in favor of appellee. No laws of Mexico were proved in that case.

The judgment is reversed, and the cause dismissed from this and the district court for want of jurisdiction.