author: GRATES, J.

text:
    R. L. HEFLIN, Inc., et al. v. TEXAS OCEANIC S. S. CO. et al.
    No. 9673.
    Court of Civil Appeals of Texas. Galveston.
    March 17, 1932.
    Rehearing Denied Sept. 29, 1932.
    Second Rehearing Denied Oct. 13, 1932.
    Williams, Neethe & Williams and McDonald & Wayman, all of Galveston, for appellants.
    Levy & Levy, of Galveston (M. L. Cook, of Galveston, of counsel), for appellees.
   GRATES, J.

This sufficient and correct general statement, changed in some immaterial details, is taken from appellants’ .brief:

“This is a suit by R. L. Heflin, Inc., and New Orleans Export Company, Ltd., against Texas Oceanic Steamship Company and T. R. Hancock, for damages for breach of contract. The trial court sustained general demurrers, and plaintiffs having refused to amend, dismissed the suit. The plaintiffs have appealed.
“The petition sets forth that plaintiffs were engaged at Galveston, Texas, in exporting cottonseed meal, cake, and oil, to the British Isles and Europe, and that defendants were severally managing owners, operators, and charterers, of steamships operating regularly and frequently from Galveston to the ports of those countries. In July, 1929, plaintiffs informed defendant Hancock, President of defendant, Texas Oceanic Steamship Company, that plaintiffs had an offer from parties in Liverpool to purchase 1500 tons of cottonseed meal for Leith and Aberdeen, Scotland, who demanded as one of the conditions of purchase, that no other meal would be shipped to those ports on .the same steamer or steamers that might be selected for the transportation, this being what is commonly known in shipping circles as the ‘sole discharge clause.’ Defendant Hancock, after being so informed, agreed to transport the meal on'that condition on a United States Shipping Board, or other 100 A-l steamer or steamers^ to sail not later than October, or the first half of November, 1929. Plaintiffs acted on this agreement, and incorporated the ‘sole discharge clause’ in their contract of sale with the Liverpool buyers. When written confirmations of the verbal agreement signed by Texas Oceanic Company were submitted to plaintiffs for approval and acceptance, they did not contain the ‘sole discharge clause.’ This clause was left out of the confirmations at the special instance and request of defendant Hancock, but with the understanding that it was to be a part of the engagement. With this verbal understanding, plaintiffs approved and accepted the confirmations. Defendants furnished the ‘SS Steadfast’ to transport the meal, but violated the ‘sole discharge’ provision of the agreement, in that the ‘Steadfast’ was permitted to take 200 tons of cottonseed meal of another shipper aboard and to transport the same thereon, along with that of plaintiffs, to Aberdeen. When the meal arrived at Aberdeen, the buyers refused to accept it, because of the violation of the ‘sole discharge’ clause. Due to a severe decline in the market, the meal was resold at a loss of some $4,000.00 to plaintiffs, which they sought to recover against the defendants, either or both. Judgment was prayed for against defendant Hancock individually, if he was not authorized to fenter into the agreement in behalf of Texas Oceanic Steamship Company, or failed to bind that company on that part of the verbal agreement that was left out of ¡the confirmations.”

Under the appeal it is urged that the court erred in sustaining the general demurrers, because the plaintiffs stated a good cause of action for damages in properly declaring upon the breach by defendants of a legal and binding contract.

The appellees seek to sustain the judgment on two grounds: (1) The contract was in violation of “(a) title 46, c. 23, § S12, USOA, (b) title 46, c. 23, § 815, USOA, (c) title 18, c. 4, § 88, USOA, and (d) title 15, c. 1, § 1, USOA, each and respectively, as well as the common law and public policy”; (2) “such written contract or contracts (the confirmations as pleaded and the ¡bill or bills of lading as mentioned), complete in and of themselves, cannot be varied by showing that prior or contemporaneous agreements were made and which were not reduced to writing, but, in accordance with the understanding of the parties thereto, were to remain in full force and effect. Elliott on Contracts, vol. 2, page 927.”

As concerns the latter of these defensive presentments, it cites a recognized rule of evidence, applicable in the absence of fraud, accident, or -mistake (R. S. ant. 3687, rule 20, subd. 19, and cited authorities of.Y. S. T. C. S. of 1914, vol. 3, p. 2574), but it may not be raised on general demurrer (Townes’ Texas Pleading [2d Ed.] bottom page 530 and top of 531, and appended cases).

Upon the former, we agree with appellants that the contract declared upon should not be held to be illegal, and, deeming the reasons for that holding to be well stated in their brief, adopt this much of it as expressive of our own conclusions on the subject:.,.

“We do not believe the federal Anti-Trust Law' has application, and for that reason we shall not discuss that statute. Section 812 of the Shipping Act seems to us to be the only one that can possibly have application. The material part of this section follows: ,
“ ‘No common carrier by water shall, directly or indirectly, in respect to the transportation by water of passengers or property between a port of a State, Territory, District, or possession of the United States, and any other such port, or a port of a foreign country. * * *
“ ‘Fourth. Make any unfair or unjustly discriminatory contract with any shipper based on the volume of freight offered, or unfairly treat or unjustly discriminate against any shipper in the matter of: (a) cargo space accommodations or other facilities, due regard being had for the proper loading of the vessel and the available tonnage; (b)’ the loáding and landing of freight in proper conditions ; or (e) the adjustment and settlement of claims.
“ ‘Any carrier who violates any provision of this seotion shall be guilty of a misdemean- or punishable by a fine of not more than $25,-000 for each offense.’
“The material part of section 815 follows:
“ ‘It shall be unlawful for any common carrier by water, or other person subject to this chapter, either alone or in conjunction with any other person, directly or indirectly. * # *
“ ‘First, to make or give any undue or unreasonable preference or advantage to any particular person, locality, or description of trafile, ⅛ any respect whatsoever, or to subject any particular person, locality, or description of traffic, to any undue or unreasonable prejudice, or disadvantage, in any respect whatsoever.’
“Defendants were not bound by the contract to refuse to transport the meal of any other shipper or in any way to interfere with meal that other shippers might desire to have transported to Leith and Aberdeen. The parties merely agreed that, from the many steamers sailing regularly and frequently from Galveston, defendants would select one or more that did not have as cargo cotton-seed meal for either of these minor ports in Scotland. The meal in question did not have to be transported on one of the ships defendants operated, owned, or chartered. They had the right to select any United States Shipping Board or other 100 A-l ship. This was not an engagement for space on any particular vessel or for any particular sailing, but, on the other hand, allowed defendants a wide range as to time of sailing and the selection of a vessel to transport the meal. Surely, the contract could have been legally carried out, if defendants had gone to the trouble and expense of finding a vessel, or arranging for one, that did not have cottón-seed meal as a part of its cargo for Leith or Aberdeen. It should be presumed that they could have done so unless it clearly appears otherwise.
“It is not against the law for parties who own, operate, or charter ships to arrange cargoes so that one ship will carry one kind of cargo, and another will carry a different cargo. In fact, the statute in question recognized this, when it provided that, in determining whether shippers had ¡been unfairly treated or unjustly discriminated against, due regard should be had for the proper loading of the vessel. Defendants under the contract had from July until November in which to make the necessary arrangements for transporting this meal on a ship that did not have as its cargo the same commodity for Leith and Aberdeen. It should be presumed that they would during this interval of time so arrange -their cargoes as to lawfully comply with the shipping engagement with plaintiffs.
“The agreement in question was a special contract of affreightment. It was not a contract with a common carrier under published tariffs, such as is condemned by this statute. Such a contract as the latter would have to be made, and was made, when the vessel was designated, and the meal tendered for shipment. Then a bill - of lading in the usual form was issued. Plaintiffs did not contract with defendants as a common carrier, -but entered into a special agreement of affreightment, which contemplated that another contract would later be entered into with some steamship or steamship line as a common carrier when the meal was taken aboard ship. The distinction that we here suggest is controlling, and was recognized by the United States Circuit Court of Appeals in Copper River Packing Co. v. Alaska S. S. Co., 22 F.(2d) 12, where the court, in construing the statute in question, held that a contract by which a steamship company agreed to transport certain property and to furnish sufficient vessels to handle shipments with reasonable promptness, was not unfair or discriminatory against any shipper, and did not give any undue or unreasonable preference or advantage ¡to the shipper with whom the special contract was made. The mere fact that the steamship company might give an undue preference to the shipper with whom the contract was made, to the disadvantage of another shipper, was held not enough to invalidate the agreement. So, in the case at bar, the mere fact that defendants might have discriminated against some other shipper should not be held to invalidate the contract. They certainly did not have to discriminate against any other shipper.
“Special contracts, comparable, it seems to us, to the one involved in the case at bar, were held valid in Hood Rubber Co. v. Rutland Transit Co. (C. C.) 161 F. 790, and The lie de Sumatra (D. C.) 286 F. 437. It was held in the Hood Rubber Company Case •that the owner of a line of lake steamers could make a special contract with shippers not to place more than $100,000 worth of goods on any one of the vessels at one time. This was held to be a valid contract, and to have been violated by the placing aboard of merchandise valued at some $350,000. In The He de Sumatra, the count upheld a special contract covering an early shipment of onions, where the contract provided that the ship should carry no other onions, and fixed the number and order of ports at which she should call. In this latter case, however, the court did not diseuss the question of illegality, as it was not raised. The court, however, did hold that such a special contract was not contradictory of a bill of lading.

“It is a well-established rule that, on general demurrer, unless the facts alleged clearly show that a contract was unlawful, it will be presumed that it did not violate the law. 10 Texas Jur. § 296. The contract on its face is not in violation of the statute, because it does not bind defendants to unfairly treat or unjustly discriminate against any shipper. All that can be said is that the performance of the. contract might possibly result in some shipper being denied the privilege of having his meal transported on the vessel selected to carry plaintiffs’ meal. The contract should not be held invalid because it is possible to conceive of conditions whereby it might be illegal.”

It follows that the .judgment so entered below should be reversed, and the cause remanded for another trial. It will be so ordered.

Reversed and remanded..

■ On Appellees’ ■ Motion for Rehearing.

The parties to this cause have favored the court with very able oral and written arguments, the appellants in support of its original judgment, the appellees contending that it was in error upon both supporting grounds as enunciated in the court’s opinion.

Upon a mature reconsideration in ¡the light of the help thus accorded, we are constrained to adhere to the- determination before made, and, in doing so, -to reiterate without change or addendum the holding that the contract as declared upon was not illegal. We desire, however, to modify the opinion in 'so far as it held that appellees’ insistence that appellants’ declaration on the prior verbal agreement that no other meal for those ports would be transported on the same steamer varied the subsequent written contract could not be raised on general demurrer. The opinion contained this paragraph in reference to that feature:

“As concerns the latter of these defensive presentments, it cites a recognized rule of evidence, applicable in the absence of fraud, accident, or mistake (R. S. art. 3687, rule 20, •subd. 19, and cited authorities of V. S. T. O. S. of 1914, vol. 3, p. 2574), but it may ■not be raised. on general demurrer (Townes’ Texas Pleading [2d Ed.] bottom page 530 and top of 531, and appended cases).”

That pronouncement, if not actually unsound, is at least very doubtful, and is now withdrawn.

It seems clear to us, however, that the general demurrer was not good to the pleading as thus drawn, and that it was entirely competent to declare upon the two undertakings in the same cause of action; the averment of the understanding -that the 1,500 tons specified would be the only meal on the vessel furnished, termed the “sole discharge clause,” being taken as true, presented in legal effect a collateral, or separate, parol agreement, i that was further alleged to have been not only the controlling inducement for the acceptance of the written confirmation set out, but also to have been omitted from it at the special instance and request of the appellees. It was therefore plainly an independent undertaking, not a part of the writing, nor contradictory of its terms, but entered into as an inducement to the making of it. This, under well-settled authority, was subject to proof and enforcement as such, although not referred to in nor made a pant of the writing.

■ The following authorities, it is thought, fully support this conclusion: 17 Texas Jurisprudence, “Evidence,” Civil Cases, pars. 358, 370, and 371; New York Rife Insurance Company v. Thomas, 47 Tex. Civ. App. 149, 104 S. W. 1074; Callaway v. Albin, 114 Tex. 5, 261 S. W. 372; Loveless v. Johnson (Tex. Civ. App.) 274 S. W. 658; Lee v. First National Bank (Tex. Civ. App.) 254 S. W. 394; Downey v. Hatter (Tex. Civ. App.) 48 S. W. 52; Blair v. Slosson, 27 Tex. Civ. App. 403, 66 S. W. 112.

The motion, has 'been overruled.

Overruled.


source: Caselaw Access Project

author: GRAVES, J.

license: Public Domain

text:
    DONALDSON v. NATIONAL LIFE & ACCIDENT INS. CO.
    No. 9763.
    Court of Civil Appeals of Texas. Galveston.
    July 14, 1932.
    Rehearing Denied Sept. 29, 1932.
    Strickland & Johnson, Earle M. Manint, and Jno. T. Garrison, all of Houston, for appellant.
    John F. Battaile and James F. Lawler, both of Houston, for appellee.
   GRAVES, J.

In a general judgment of the trial court, sitting without a jury, no findings of fact or law having been either requested or filed, the appellant as the designated beneficiary of Raymond Williams, deceased, was denied any recovery against the appellee on a $2,000 accident policy it had issued on his life, dated February 26, 1930, the first $1 premium-thereon having become due on April 1, 1930, the assured having suffered accidental death by drowning at Orange, Tex., about 11:30 a. m. on April 12,1980.

From such adverse determination below the .beneficiary regularly prosecutes her appeal to this court, contending that the appel-lee through its authorized representatives, especially its soliciting and collection agent, Mr. Fugett, had waived the failure to pay ithe first premium referred to on its due date of April 1, 1930, and had extended the time for such payment to the 12th day of April, 1930, when it was made, received, and accepted, with the consequent effect of keeping the policy in force until after the death of the assured, thereby casting liability for the amount of the policy upon it; that, in any event, the acceptance by the insurance company of the payment of such premium on the 12th day of April, which it was claimed had occurred between 9 and 10 o’clock of that day and'prior to the death of the insured, together with the alleged habitual custom and practice of- the company in permitting and accepting the payment of such premiums on the policies after their due dates, ’ constituted a waiver of .the requirement that this premium be paid upon its due date, and estopped the appellee from claiming that a forfeiture of the policy had occurred at .the time of the insured’s death.

The pertinent provisions of the policy were as follows:

“Policy. Provisions.
“The National Life & Accident Insurance Company, Nashville, Tennessee, hereinafter called the Company, hereby insured Raymond Williams, hereinafter called the Insured, as herein limited and provided, against loss of life * * * which results solely and without other contributing causes from accidental injury. ‘Accidental injury’ as used in this policy means bodily injury suffered while this policy is in force. * * *
“The initial death indemnity provided by this policy is Two Thousand Dollars.
“Losses Covered.
“Sec. A. For loss, of life.. The death indemnity.
“General Provisions.
“(a) The consideration for the issuance of this policy is the payment of a premium of $1.00, covering the first insurable period. ** * *
“(b) The first insurable period hereunder begins at 12 o’clock noon of the date this policy is issued and countersigned (said date being February 26, 1930) and ends at 12 o’clock noon of the 1st day of April, 1930, standard time of the place where the insured resides.
“(c) This policy may be renewed at the option of the Company for periods of one calendar month or any number of calendar months not exceeding twelve, by paying in advance a renewal premium at the rate of $1.00 per calendar month for the renewal period. • * * *
“(f) Any failure to comply with the provisions of this policy shall render invalid any claim her.eunder.
“Standard Provisions.
“2. * * * No agent has authority to change this policy or waive any of its provisions. No change in this policy shall be valid unless approved by an executive officer of the Company and such approval be endorsed hereon.
“3. If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Company or by one of its duly authorized agents shall reinstate the policy, but only to cover accidental injury thereafter sustained.”

These contentions cannot be upheld; by" the explicit terms of .the contract between the parties in the last-quoted paragraph 3 of the policy, as concretely applied here, it was agreed that the acceptance of this overdue premium on April 12th revived or reinstated the policy “only to cover accidental injury thereafter sustained,” whereas the conclusive presumption on this appeal is that the drowning of Williams had occurred before the payment had been made or accepted on ithat same day; this for the reason that both the pleadings and evidence raised that as a fact issue — the appellee having so specifically alleged, with sufficient support to have justified such a finding — hence, in deference to the judgment in its favor, this court must assume that it was so determined below.

If the premium had been paid and accepted by the company before Williams’ accidental death, its liability — because of the latitude it allowed its agents in receiving overdue payments — would -seem to have become fixed, but, that not having occurred, it is clear that the policy, by its own terms, lapsed as of April 1st, and could have been reinstated by the belated payment made on April 12th, provided he was still alive, and then “only to cover accidental injury thereafter sustained.” We can read no other meaning into the contract, and that the parties to it had the right to so stipulate the beginning, ending, and. conditions attending the risk they were dealing with, goes without saying. 32 C. J. 1164, § 277; 1 C. J. 409, § 21; Matthews v. Continental Casualty Co., 78 Ark. 81, 93 S. W. 55; Raynor v. Nat. Casualty Co., 125 Misc. 174, 210 N. Y. S, 586; Balch v. Fed. Life Ins. Co., 116 Kan. 560, 227 P. 326; Equitable Life Assur. Soc. v. Ellis (Tex. Civ. App.) 137 S. W. 184, 105 Tex. 526, 147 S. W. 1152; Hatton v. Mut. Health & Acc. Ass’n (Tex. Civ. App.) 10 S, W.(2d) 239; Duncan v. United Mutual Fire Ins. Co., 113 Tex. 305, 254 S. W. 1101.

The agent of the insurance company, whose acts in this instance in- deferring it until that date and then collecting the 12-day past-due premium on April 12th are relied upon as having kept the policy in force, 'by the uncontroverted evidence, only had authority from it to solicit applications, forward’ and deliver policies, and collect premiums not to either make contracts for or waive any of the stipulated provisions in the applications of policies themselves on behalf of the company; wherefore, not only did such acts on his part not have the effect of overriding the copied provision in the policy sued on that no agent had any. authority to change or waive any of its provisions, but the appellant herself was, by virtue of these recitations, charged with notice of the limitations thereby imposed upon him. Revised Statutes,, art. 6063; Southern Surety Co. v. Benton (Tex. Com. App.) 280 S. W. 551; Columbian National Fire Ins. Co. v. Dixie Co-op. (Tex. Civ. App.) 261 S. W. 174.

While, as above stated, it must thus be considered that the payment on April 12th was made after Williams’ death earlier on that day, there is no evidence that either the appellee, or its agent receiving it, then knew that he was dead, and the appellant herself testified that she had not been advised of the happening until- the following day, April 13th.

In the circumstances as a whole, -this view .of the cause — as expressed in their brief by the able counsel for the appellee — is quoted with approval: “The insured met an accidental death during a period in which his policy of insurance was inoperative and ineffective. Whether the payment of the premium by the beneficiary on April 12th, after insured’s death, was with knowledge óf his death at the time, is immaterial. The policy contract was plain and unambiguous. It was a policy from month to month. By its terms failure to pay a premium of renewal on the first of the month suspended the contract entirely. It could be renewed at any time by paying the monthly premium, but only to cover accidents subsequently arising. That is the plain context of the agreement. It was renewed on April 12th, but the subject-matter of the risk was already dead. The mere statement of the agent, after two unsuccessful attempts to collect ithis premium (on April 1st and April 8th), .that he would •possibly be around the latter part of the week of April 7th did not constitute an agreement extending the insurance until that date, and the trial court so found. Such statement did not evidence a waiver of the provisions of the policy excluding protection Under it during a period of default, nor does it estop the Company from standing on the terms of its agreement. The limitation upon the agent’s authority was clearly set forth -in the contract and the receipt-book •offered in evidence. Under the authorities cited, the appellant was charged with knowledge • of their, existence and the limitations there expressed.”

Neither is there merit in the final claim, we think, that the appellee was es-topped from asserting any breach of warranty under the policy by reason of the statement of its agent, Mr. Henry, to her .that, if she would get the inquest proceedings on Williams’ death, he would pay her claim under the policy, which she testified she had done; in the first plaee, there was no declaration of a cause of action upon such a claim of estoppel in the pleadings, and, if there had been, the evidence to support it was lacking, in that here, too, the appellant was charged with notice on the face of the contract that the agent had no such authority.

Pursuant to the views expressed, the trial court’s judgment will be affirmed.

Affirmed.


text:
    BUSBY et al. v. SMITH et al.
    No. 4199.
    Court of Civil Appeals of Texas. Texarkana.
    July 12, 1932.
    Rehearing Denied Sept. 8, 1932.

      Carrigan, King & Surles, of Longview, for appellants.
    Ernest Goens and R. E. Allday, both of Tyler, for appellees.
   LEVY, J. (after stating the ciase as above).

There is presented for decision the effect on the title or interest in the property of the delivery in the particular circumstances of the case to the appellant R. H. Busby of the mineral deed from W. F. Smith and wife. • The point may not be considered as involving an unauthorized delivery of the deed by an escrow holder but the passing of the instrument to the vendee by the agent of the vendors without authority or by wrongful procurement. The agreement of the.parties was, as found by the trial court, in express terms to place the mineral deed upon its execution by W. F. Smith and wife to R. H. Busby in the Everett Bank at Gladewater with the future delivery and the payment of the purchase price to depend upon the acceptance or rejection by R. H. Busby of the title to the property within ten days after he had been furnished with the abstract of title. The object of the parties to create an escrow was never in fact accomplished for there was no delivery of the mineral deed ever made to the depositary bank. It was essential to an escrow that there be a delivery of the deed to the named depositary, and there can be no escrow without the delivery. 17 Tex. Jur. p. 94; 10 R. C. L. § 7, p. 625 ; 21 O. J. p. 870. The delivery was actually made, as appears, direct to the purchaser himself by the deputy district clerk on the same day that the deed was especially placed in his hands for the purpose of delivery to the depositary bank. Plainly enough, when th'e deputy district clerk received the mineral deed with the instruction from the vendor to place it with the Everett Bank in escrow, and the mineral deed was left with him for that purpose, there was no intention that this should constitute a delivery to him. It is the long-recognized rule that there must be delivery, to become effective as between the parties to the instrument, and this does not happen when such is not the intention of either party. The passing, then, of the instrument by the agent of the vendors, as the deputy district clerk must be regarded, to the vendee without authority or by wrongful procurement, such delivery in legal effect would not be that complete delivery of the mineral deed sufficient as between the parties to pass title or interest to the oil estate. Í Devlin on Real Estate (3d Ed.) § 260; 18 O. J. §§ 94-104, p. 196; 8 R. O. L. § 45, p. 973; 14 Tex. Jur. § 59, p. 821. And an ineffectual delivery is made manifest by the further fact that the purchaser had knowledge, as must be inferred from the supplemental terms of agreement made, that the delivery to the deputy district clerk was not with the assent of the vendors that the mineral deed should presently become operative and effectual. As between the purchaser and the vendors, there is no trouble in determining, in the circumstances stated, that there was not a delivery by consent or intention of the parties at the time of the passing of the instrument. But, while delivery is essential to render the deed effectual in law, it is in fact the performance of the conditions that imparts validity, and for this reason the title may be regarded as vesting in the purchaser whenever this has been done. In order, then, for the purchaser to predicate the right to have the unauthorized delivery of the mineral deed declared sufficient to pass title or interest to him to the estate in the oil, it must, under conceded rules of law, appear that there was either ratification by the vendors of the unauthorized act of the agent or the subsequent timely performance of all the requirements imposed in the agreement for a sale.

Looking to the agreement, it appears, first, that the vendors were to furnish or exhibit an abstract of their title. In the agreement was no express stipulation relative to the character of title to be conveyed in case of sale, ■but this situation could occasion no controversy because an agreement to furnish or make a marketable or “good” title would be implied. In the absence of any stipulation to the contrary, a marketable or good title is presumed to be given. 3 Devlin on Real Estate (3d Ed.) § 1490; 27 R. 0. L. p. 368; 57 A. L. R. 1268. And, moreover, the vendor here testified,that he intended to furnish or make “a good title” in case of sale. It seemingly appears, too, that a good and sufficient abstract was furnished, as the abstract as exhibited included all the instruments of conveyance, together with the statement of the lien to which the land was subject, and no objections were made to the abstract as not being full and explicit. The attorneys for the purchaser pronounced the title as exhibited to be a valid title and charged only with the outstanding unsatisfied mortgage of the insurance company. Upon the disclosure made to the purchaser of the title and the defect, his duty arose, in order to relieve him of the effect of default, to give notice of his intention to buy or refuse to buy the estate, to enable the vendor to cure the defect by the date set for closing the transaction. The agreement for a sale indicates that, under the exigencies of the occasion, which was the sale of an oil estate, time for the completion and closing of the transaction was the essence of the agreement. By the terms of the agreement, as found by the court, the purchaser in effect was allowed “ten days from the receipt of the abstract of title,” not only as sufficient time to examine the character of the title he was purchasing, but as the limit of time to either “accept or reject the title to the property.” The intention of the parties, as a matter of fair construction, was apparently to give to the purchaser the right or privilege to purchase or refuse to purchase at his election after examining and being informed of the character of title. The desire of the purchaser to accept the title and to close the transaction was necessary to be given to the grantor within the fixed time of “ten days.” If the purchaser had done so, then the duty would have devolved upon the vendor to have cured the defect so as to be able to tender a good or merchantable title. The privilege to give notice of the desire to refuse or to accept and close the transaction within “ten days” did not itself constitute an executory contract for the sale of the oil estate; this latter only arose after the election had been duly exercised.

In this case doubt in point of fact arises as to whether or not the purchaser may be said to have made timely objection to the mortgage lien and acceptance of the title because the evidence in that respect is conflicting. The purchaser testified, and the vendor denied the statement, that he promptly and timely within ten days after the opinion of his attorneys requested the vendor to have the mortgage lien released so as to cure the defect and make good the title. There is no affirmative finding by the court, but there is necessarily implied from the decree the finding that the purchaser made no timely demand for the release of the lien or acceptance or for performance of the agreement for a sale. The opinion of the attorneys was promptly and fully given to the .purchaser the next day after the delivery of the abstract. The tender of payment was made by the purchaser on March 25, 1931. At that date the time was overrun, and it was too late. It is believed that it may not be said in the special circumstances that the purchaser timely availed himself of the' privilege to complete the purchase of the oil estate, and to invoke performance of the agreement for a sale. The default within the specific time fixed for performance gave the right to the vendor to forfeit the agreement for a sale. It is believed express ratification or ratification by estoppel in pais cannot be predicated in the circumstances. It was not so conclusively shown as to warrant disturbing the finding of the trial court in that respect as must he deemed he made in the light of the decree. By affirmative finding of fact by the court, the vendors actually and seasonably renounced or forfeited the agreement for sale because of the default of the purchaser. He attempted to file for record on March 7, 1931, a verified declaration of his renouncement for sale, as a means of public notice in fact of his intention and act. In the situation shown it is believed Mr. Busby may not predicate the right to title or interest in the estate or to performance of an executory contract for sale. And, because Mr. Busby acquired no title, he could pass no absolute title or interest to his respective subvendees.

As respects the subvendees of It. H. Busby, the vital question is, and their rights would depend entirely upon, whether or not they may invoke the protection given by the equitable doctrine of bona fide purchase. The court determined, as a matter of law, that the subvendees “can not be innocent purchasers of (under) their mineral deeds.” By the third and eighth assignments of errors, the appellants bring in review that conclusion claiming that, as the mineral deed had been delivered over to Mr. Busby by the deputy clerk, the agent of both Mr. and Mrs. Smith, the subvendees were entitled to be protected as innocent purchasers. It is urged that the case of Tyler Building & Loan Association v. Beard & Scales, 106 Tex. 554,171 S. W. 1122, 1200, was applicable, and the court should have rendered judgment for them. The ap-pellees claim- to the contrary, and further urge, first, that the appellants cannot invoke the doctrine because they have not pleaded estoppel, and, next, that the ruling in the case especially of Cardwell v. Shifflet (Tex. Com. App.) 294 S. W. 519, has application and controls the situation, and the court correctly so concluded and rendered judgment in their favor.

The subvendees affirmatively pleaded that they purchased an interest in the oil estate from R. H. Busby in good faith and for a valuable consideration and upon the apparently valid title of a mineral deed executed to him by W. F. Smith and wife and without any notice of fact or circumstance rendering such deed invalid. In such allegations there is sufficiency of pleading of all the factual elements constituting bona fide purchase, having the effect of an estoppel, and, it is concluded, available in this case as an affirmative plea of estoppel. 49 O. J. § 85, p. 87. The doctrine of bona fide purchase is upon the principle that, when the original legal owner has done or omitted something by which it was made possible that his property should come into the hands of a bona fide holder by an apparently valid title, it is just to regard him as estopped from asserting his ownership, and thus to protect the subsequent purchaser. 2 Pomeroy, Eq. Jur. (4th Ed.) § 736, p. 1500. The case of McMahan & Co. v. State Nat. Bank (Tex. Civ. App.) 160 S.W. 403, is not understood to have decided that a plea of bona fide purchase, as full as here set out, would not be sufficient as a plea of estoppel. In that case J. O. Liddell, Jr., obtained the bills of lading -and compress receipts by wrongful procurement from the bank and sold the cotton to McMahan & Co. McMahan & Co. set up that they bought the cotton in good faith and paid full value therefor and without knowledge of the wrongful procurement of the bills of lading and compress receipts. McMahan & Co., though, did not go further and allege any negligence of the bank in trusting the bills of lading and compress receipts .to the custody of J. C. Liddell, Jr., as an answer to the plea of the bank claiming that J. C. Liddell, Jr., was the tortious possessor of the cotton and not their agent. In such situation the court held that the appellants invoked the 'plea of bon'a fide purchase, but did not also invoke estoppel of the bank to assert or deny agency of J. C. Liddell,- Jr., or “his.right to sell.” There was no contention there that the two pleas were not separate and distinct pleas. 2 C. J. § 68. p. 460.

It is believed that the case of Cardwell v. Shifflet (Tex. Com. App.) 294 S. W. 519, may not be regarded, as claimed by appel-lees, as ruling the situation here shown. There is distinguishment between the present case and the case of Cardwell v. Shifflet, supra. The Cardwell Case was not in the same situation as the .present one as respects the factual element of the delivery of the deed by the intrusted custodian of the deed,. There the notary public, whom the grantors made the custodian of the deed, never delivered over the deed to the grantor’s daughter, although he had it registered, and, so far as the reported case shows, never surrendered possession of it to any one in violation of his trust. The “registration” of the deed was an act in excess of authority and “never authorized,” and the authorized act of holding and not delivering over the deed to the grantee was not violated. In this situation the holding of the court was, in substance, that the principle of equity would not sustain nor warrant the claim of a bona fide purchaser. Evidently so because the original legal owner was himself wholly innocent of any act producing injurious effect to the subsequent sub-vendee, done either by himself or for which responsibility of a principal for the acts of his agent would legally rest. Therefore the case rested, in determining which of the two holders of title was the least at fault, entirely upon the single point of whether actual possession would sufficiently impart notice of the rights of the original holder against the unauthorized act of registration. The original holder continued in actual possession of the land. In that respect the court distinguished the ease from that of Eylar v. Eylar, 60 Tex. 315, in the statement reading, “In that case a deed of conveyance valid upon its face was actually executed and delivered by the party in possession.” The ruling in that case is consistent and not conflicting with the case, as relied on by appellants, of Tyler Building & Loan Association v. Beard & Scales, 106 Tex. 554, 171 S. W. 1122, 1200. In that case the general principle laid down was plainly that, where a deed is placed in the hands of an agent of the grantor, as the deputy clerk here must be held to be, to be delivered only on the performance by the grantee of some condition and- a delivery has been made to the grantee without authority .or by procurement, the purchaser from the grantee in good faith and for value and without notice will be protected upon the familiar doctrine that, as between two parties, both of whom have been wronged, the one least at fault will be protected. The protection there given to the bona fide purchaser simply means that from the relations subsisting between the two parties, especially that which is involved in the innocent position of the purchaser, the original legal owner cannot be aided in what he is seeking to obtain, because it would be inequitable to do so. The rule so stated in that case means, and as so indicated in Boswell v. Pannell, 107 Tex. 433, 180 S. W. 593, that subvendees are protected in their holding of title or interest by estoppel and only by estoppel of the grantee to deny the validity of the conveyance. Link v. Page, 72 Tex. 592, 10 S. W. 699; Steffian v. Milmo Nat. Bank, 69 Tex. 513, 6 S. W. 823; Hussey v. Moser, 70 Tex. 42, 7 S. W. 606; Spotts v. Whitaker (Tex. Civ. App.) 157 S. W. 422. It is a principle well established that, where one of two persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it. 21 C. J. § 176, p. 1170. Therefore it may not be said as a matter of law that the actual occupancy by Mr. and Mrs. Smith of the surface estate of the land sufficiently imparted notice, and thereby prevented the claim of bona fide purchase of their rights against the unauthorized delivery of the mineral deed. There was a misdelivery of the mineral deed by the deputy clerk, the intrusted custodian of the same. Both Mr. and Mrs. Smith knew and assented to the delivery in the first instance of the mineral deed to the deputy clerk for the special purpose of delivering it to the Everett Bank, and his holding of the deed was in trust for her as well as for her husband. Guaranty Bond State Bank of Mt. Pleasant v. Kelley (Tex. Com. App.) 13 S. W.(2d) 69. The case of Eylar v, Eylar, 60 Tex. 315, would in this respect be applicable. And it is believed the factual element of misdeliv-ery of the mineral deed by the deputy clerk, the intrusted custodian of the same, would go to make especially applicable the rule applied in the case of Tyler Building & Loan Association v. Beard & Scales, in the event the sub-vendees had no actual notice or knowledge of or about the transaction. The subvendees testified that they knew nothing about the misde-livery of the deed or about any agreement between the Smiths and R. H. Busby before or at the time of their purchase. They were shown the deed by Mr. Busby, and each paid him the agreed purchase price, relying on the face of the deed and Mr. Busby’s possession of it. They were not in the vicinity of the land or in a position to know of the transaction. The subvendees lived, one in Archer county and the other at Mineral Wells. The Statement of Mr. Busby, quoted above, respecting his purpose in going to the oil field, would not of itself and alone show a joint enterprise or partnership of the parties. There appearing no circumstances even tending to impair or reflect upon the evidence of the subvendees, it is therefore concluded that under the law and the evidence a judgment in their favor was warranted under their plea of bona fide purchase. This ruling, though, does not dispose of the appeal in view of the further conclusion that the mineral deed was void for insufficiency of description of the land. And this ruling should not be regarded as prejudicing the case upon another trial, should the evidence then offered present a different situation.

The appellants urge as errors the conclusion of the court that the mineral deed was void for insufficiency of description of the land and in sustaining the objection and ruling out as evidence the lease to H. P. Worley and the deed from the Republic Insurance Company to W. P. Smith offered in aid of the description and to identify the land. The mineral deed conveys “an undivided one-fourth interest in and to all the oil, gas and other minerals in and under and that may be produced from the following described land situated in Upshur County, Texas.” The deed then gives the description of the land as “100 acres out of Blocks 8 and 9 of the sub-division of Jose Maria Pineda Survey, which was patented to Adolphur Stern, Pat. 608, Yol. 2, three miles North of Gladewater, Texas.” Following the above description of the land appears, namely, “And said above described lands being now under an oil and gas lease originally executed in favor of W. M. Worley and now being held by W. M. Worley. It is agreed that this sale is made subject to said lease, but covers and includes one-fourth of all the royalty and gas rental and royalty due and to be paid under the terms of said lease, in so far as it covers the above described property.” The appellants offered in evidence, as stated in the bill of exception, “an oil and gas lease executed by W. P. Smith and wife to H. P. Worley, dated and registered prior to the mineral deed to R. H. Busby, and recorded in Vol. 9, page 555 of the Oil and Gas Lease Records of Upshur County, Texas, and which lease described the 100 acres owned by W. P. Smith by referring to the deed from Republic Insurance Company to W. P. Smith of date December 24, 1930, and recorded in Vol. 75, page 223, of the Deed Records of Gregg County, Texas.” As further stated in the bill of exception, “said defendants in connection with the said lease also offered in evidence the certified copy of the deed from the Republic Insurance Company to W. P. Smith dated December 24, 1930, and recorded in Vol. 75, page 223, of the Deed Records of Gregg County, Texas, which said deed correctly described the 100 acres belonging to W. F. Smith.” The appellees objected to the introduction of these instruments “because the lease so offered was to H. P. Worley and not to W. M. Worley as stated in the mineral deed to R. H. Busby from W. P. Smith and wife, dated February 11, 1931.” It is believed the court correctly excluded the oil lease to H. P. Worley. The oil lease was, as stated in the bill of exception, “executed by W. P. Smith and wife to H. P. Worley.” The evidence does not identify such oil lease as the document the deed referred to. The document of reference in the deed was to a lease “executed in favor of W. M. Worley.” No such document was shown to have existed. The extent of the oral evidence was as testified by W. P. Smith: “Pri- or to this time (the date of the present deed) I had leased the land to a man named Worley —I don’t mean Worley, either — I leased to a man named Jordan, and he turned it over (leased) to Worley. I sold the lease to a fellow named Jordan. I don’t recollect the date of it now.”

The deed was in the circumstances inadmissible in evidence. Stier v. Latreyte (Tex. Civ. App.) 50 S. W. 589. The description data of the deed cannot be varied or contradicted by parol evidence. 14 Tex. Jur. §§ 204, 251, pp. 992 and 1045. As respects the deed from the Republic Insurance Company, however, quite a different and distinct point is involved. It does not appear that the deed was offered in evidence upon the ground only that it was a document called for or referred to in the mineral deed or the lease to H. P. Worley or W. M. Worley. The objection made to it at the time was met by the explanation that W. F. Smith “also testified that he owned no other land in the county (besides the 100 acres) except an interest in his father’s estate.” The jmrpose of offering the deed was evidently, not to contradict the mineral deed, but the more clearly to locate and identify the land conveyed by the mineral deed. It was shown that the deed offered in evidence was the deed from the insurance company to W. F. Smith conveying to him in the first instance the 100 acres of land, and that it “correctly described the 100 acres belonging to W. F. Smith.” W. F. Smith testified that he lived “on the 100 acres of land” intended to be conveyed to R. H. Busby, and that it “was described as out of Blocks 8 and 9 of the Sub-division of the Jose Maria Pineda Survey,” and that he owned “no other Ianc( in the County’” and “had no other land in the Pineda Survey.” That extrinsic evidence may be introduced in order to identify the land by the description given in the deed is not open to-,question in this state, where the description in the deed is not inherently uncertain. Smith v. Crosby, 88 Tex. 15,23 S. W. 10,40 Am. St. Rep. 818; Giddings v. Day, 84 Tex. 605, 608, 19 S. W. 682; 14 Tex. Jur. §§ 220, 250, p. 1011; 3 Jones on Evidence, § 450. It thus appeared by all the extrinsic evidence offered that the land intended to be conveyed could in fact be reasonably ascertained and identified from the whole description in the mineral deed.

The mineral deed from W. F. Smith and wife was not inherently uncertain. It stated ' the definite facts in relation to the land, of the number of acres, the county of location, the survey, the block in the subdivision of the survey, and the name of the original patentee. The deed therefore was not utterly devoid of any matter of identity whatever, and devoid of any reference from which the specific 100 acres intended to be conveyed can be identified and more clearly located. A deed is sufficient, so far as certainty of description is concerned, if it states the county, the number of acres, and the survey. Miner v. Paris Exch. Bank, 53 Tex. 559; Arnall v. Newcomb, 29 Tex. Civ. App. 521, 69 S. W. 92; Perry v. Stevens, 44 Tex. Civ. App. 108, 97 S. W. 1075. The deed, it is concluded, was sufficiently certain. Gresham v. Chambers, 80 Tex. 544, 16 S. W. 326; Smith v. Westall, 76 Tex. 509, 13 S. W. 540; Linnartz v. McCulloch (Tex. Civ. App.) 27 S. W. 279.

The point is therefore sustained, and the judgment is accordingly reversed and the cause remanded for another trial.

On Rehearing.

It is believed, upon a reconsideration of the evidence, that, as before held, the mineral deed from W. F. Smith and Wife was not utterly void for lack of any matter of description of the land intended to be conveyed. It is thought, though, the ruling should not be adhered to that there was not in the record sufficient extrinsic evidence to aid in the description and identification of the land referred to in the mineral déed. Besides oral evidence, there was the written affidavit of W. F. Smith which in effect was an admission of the correct description of the land intended to be conveyed by the mineral deed.

The judgment of this court is therefore changed, and the judgment of the trial court is affirmed as respects R. H. Busby, but is reversed and here now rendered in favor of F. L. Sorrelle and R. F. Fails, denying cancellation of the mineral deeds made to them by R. H. Busby; the appellant R. H. Busby to pay one-half the costs of the appeal and of the trial court, and the appellee W. H. Smith to pay one-half of all costs of the appeal and of the trial court

The motions for rehearing of appellants and appellees are overruled except as herein stated.


author: LANE, J.

text:
    FUNKHOUSER et ux. v. CHEMICAL BANK & TRUST CO.
    No. 9747.
    Court of Civil Appeals of Texas. Galveston.
    July 15, 1932.
    Rehearing Denied Sept. 29, 1932.

      Henderson & Copeland, of Houston, for appellants.
    Hunt & Hunt, of Houston, for appellee.
   LANE, J.

The following is a fairly accurate statement of the transactions leading up to the filing of this suit:

On November 6,1919, Greater Houston Improvement Company, by its deed of that date, conveyed to Robert Funkhouser the south 25 by 125 feet of Lot 18 and the adjoining north 25 by 125 feet of Lot 19, block 16, Montrose addition, known as 3619 Audubon place. In consideration for such conveyance, Funkhouser executed and delivered to said company certain notes which were secured by vendor’s lien and also by a deed of trust executed by Funkhouser. Such indebtedness and liens on the unsatisfied or unpaid part thereof were renewed and kept alive and in force. It passed by transfer and indorsement to United States Mortgage & Trust Company, which was later merged with Chemical Bank & Trust Company, under the latter’s name.

In the proceedings to renew and keep in force the above-mentioned indebtedness, and prior to the merger mentioned, Robert Funk-houser and wife, on the 30th day of April, 1928, executed and delivered to United States Mortgage & Trust Company their, promissory note, reading as follows:

“Real Estate Mortgage Note.
“In installments as hereinafter provided for value received we promise to pay to the order of United States Mortgage and Trust Company at Houston Land and Trust Company, Houston, Texas, the principal sum of Six Thousand ($6,000.00) Dollars in Gold Coin of the United States of America of the present standard of weight and fineness with current rate of exchange on New York City, and with interest on said principal sum from April 30th, 1928, to maturity at the rate of 6½ per cent, per annum, payable semiannually as it accrues, on the first days of May and November in each year, according to the tenor and effect of Ten interest coupon notes, bearing even date herewith and number from 1 to 10, both inclusive.
“This note is payable in 10 installments as follows: Nine (9) thereof for the sum of One Hundred Fifty ($150.00) Dollars, the first payable on the first day of November, 1928, and one every six months thereafter until nine thereof have been paid, and one thereof for the sum of Form Thousand Six Hundred Fifty Dollars payable on the first day of May, 1933.
“This note and any installments of principal due hereon and said interest coupon notes shall bear interest after maturity at the rate of ten per cent, per annum.
“It is understood and agreed that in case any installment of said principal sum, or any of said interest coupon notes are not paid when due, or in case of- failure to comply with any of the agreements or conditions of the Deed of Trust given to secure this note, then at the. election of the legal holder hereof, at any time thereafter made, the unpaid balance of the principal sum expressed in this note, with all accrued interest, may by said holder be declared immediately due, without notice, and may be collected forthwith by sale under said Deed of Trust or otherwise as such holder may elect. In event this note is placed in the hands of an attorney for collection, or if it is collected through the Bankruptcy or Probate Court or by other legal proceedings, we agree to pay ten per cent, additional on the principal and interest then due, as attorneys fees.
“The makers hereof have the privilege of paying ten per cent, on account of principal on any interest day, by giving sixty days written notice.”

At the time said note was executed and contemporaneously therewith, Eunkhouser- and wife executed and delivered to the United States Mortgage & Trust Company a deed of trust to secure payment of the indebtedness evidenced by the above mentioned note, wherein it is, in effect, recited that such instrument is executed for the purpose of renewing, merging, and extending into the above-described notes the balance due upon the indebtedness shown in a certain deed of trust, the record of which is recited for certainty.

In pursuance of the agreements and contract evidenced by the $6,000 note and deed of trust mentioned, Robert Eunkhouser and wife executed and delivered to United States Mortgage & Trust Company their ten notes as stated in said $6,000 note, that is, nine for the sum of $150 each, and one for $4,650, and also ten notes called “interest coupon notes,” each for the sum of $195, such coupon notes evidencing the interest to become due on the several dates borne by such interest coupon notes.

In each of such interest coupon notes it is recited as follows: “This coupon is subject to pro rata reduction in amount on account of any payment which may be made on principal note, in accordance with the provisions of said note or any extension thereof, or the mortgage or deed securing the same.”

After execution, all notes were placed under one cover and fastened together.

The coupon note referred to as No. 1, as originally executed, was in part in words and figures as follows:

“$195.00 12981 No. One.
“On the first day of November, 1928, we promise to pay to the order of the United States Mortgage and Trust Company One hundred Ninety Eive and No/100 Dollars.”

All other notes referred to as coupon notes were in the same words, except as to dates of payment.

When note No. 1 became due, Miss Irene Woodell, bookkeeper for United States Mortgage & Trust Company, made some mark over the figures $195.00, and a little to the right thereof she wrote with pen and ink the figures $193.92.

' As note No. 2 became due, the figures $195.-00 were marked out, and a little to the right thereof she wrote the figures $190.51; such changes being made to show the exact amount due on each of said notes at the time they were being presented for payment. Such changes were made upon the interpretation placed upon that part of the coupon notes reading as follows: “This coupon is subject to pro rata reduction in amount on account of any payments which may be made on said principal note, in accordance with the provision of said note or any extension thereof, or the mortgage or deed securing same.”

Notes Nos. 1 and 2, after being changed as stated, were paid without protest. When note No. 3 became due, a change was made on its face in practically the same manner as were notes Nos. 1 and 2. No change of any kind was made on any of the remaining notes.

It is provided by the deed of trust given to secure the payment of the indebtedness mentioned, as well as in the principal note, that upon a failure of the makers of the notes to pay the notes as they become due, to pay all taxes and public assessments levied or assessed against the property described, etc., at the option of the holder of said notes shall mature the entire indebtedness.

Default was made in the payment of coupon note No. 3 when it became due, and the taxes assessed against the property remained unpaid, and the Chemical Bank & Trust Company, hereinafter referred to as the Chemical Company, the holder of said indebtedness, declared the whole of the same due, and instituted this suit against Robert Eunkhouser and wife, the makers of the notes, to recover upon the notes interest, taxes and attorney’s fees, and for a foreclosure of its lien given to secure payment of said notes.

Defendants answered, praying that the suit of the plaintiff be abated because of the non-joinder of United States Mortgage & Trust Company, alleging that it appeared from plaintiff’s petition that United States Mortgage & Trust Company is the payee named in the notes sued upon, and it does not show or allege any right, title, or interest in plaintiff to such notes or deed of trust given to secure payment of them; that defendants are informed and believe that the Chemical Company has no right, title, or interest in or to the notes and deed of trust; that, if plaintiff had ever acquired any such right, title, or interest, it subsequently sold and assigned the same to the Mortgage-Bond Company of New York, whose agent in Houston is J. C. Leonard, and therefore said Mortgage-Bond Company is a proper and necessary par-, ty plaintiff.

Pleading further, defendants deny generally, and specially alleged that the Chemical Company is not the owner or holder of the notes sued on, nor the. liens given to secure said notes.

They admit the execution and delivery of the notes sued on and the deed of trust mentioned, but they allege that, since such execution and delivery, there has been a material alteration in the notes? they then describe the alterations made on coupon notes Nos. 1, 2, and 3, which we have described in our preliminary statement. They allege that such alterations were not authorized by them nor made under any provision in the contract, principal note, or interest coupon notes; that there has been a material alteration in the entire series of the interest coupon notes without the knowledge and consent of defendants and without notice to them that such alterations were made until this suit was filed; that the making of such alterations in the coupon notes vitiates the principal note and all interest coupon notes, in their entirety, and renders the principal note and all interest coupon notes, and the deed of trust securing same, null and void.

They allege that the principal note refers to the interest coupon notes and makes them a part thereof; “that such interest coupon notes represent the semi-annual installments of interest due and to become due on the principal note; that said interest coupon notes were executed at the same time and contemporaneously with the execution of the principal note and deed of trust, which deed of trust was given- to secure the payment thereof; that the interest coupon notes constitute a part and parcel of one single contract and transaction'; that the interest coupon notes were materially altered within the contemplation, purview and meaning of sections 124 and 125 of article 5939, Revised Civil Statutes of 1925; that such material alteration changed the terms and provisions of the entire contract between defendants and the United States Mortgage & Trust Company, and has rendered the entire contract, including the principal note, interest coupon notes, and deed of trust ab initio void and unenforceable.”

They allege that they had at no time ratified or confirmed the alterations made on the coupon notes or the principal note. They •pray for the cancellation of all the notes sued on and the deed of trust securing payment of the notes.

-By supplemental petition plaintiff alleged that the changes made in the interest coupon notes Nos. 1, 2, and 3 were made in accordance with the terms of the principal -note, the interest, coupon notes and deed of trust executed by' defendant, now held by plaintiff, and upon which its cause of action is based; that the alterations complained of by defendants are-not material alterations, but are in the nature- of memoranda for the convenience of the maker and the holder of the notes which in no manner affects the rights of any of the parties interested; that such changes were made in good faith with no intent to defraud the maker of the coupon notes. Plaintiff alleged that, if it be held that the alterations are material alterations, it says that such alterations have been ratified by the makers of the interest coupon note No. 3, by reason of the fact that the makers with full knowledge of the facts have made payment of interest coupon notes Nos. 1 and 2, after such notes had been changed, without protest; and that, when coupon note No. 3 was presented for payment, the defendants and each of them, with full knowledge of the facts and the sum due thereon, made repeated promises to pay same, and by their actions they have ratified the alterations made on the interest coupon notes.

Plaintiff also denied generally the allegations of the defendants.

Before judgment was rendered, the Mortgage-Bond Company of New York filed a disclaimer of any ownership or interest of any kind in the indebtedness sued on.

The court overruled defendants’ plea in abatement based upon tbeir plea of non-joinder of other parties by plaintiff. Whereupon a jury was chosen and sworn to try the cause, but, after all evidence had been closed, the court instructed the jury to return a verdict for the plaintiff against defendants for the sum of $6,834.02, principal and interest due upon notes, for $456.33 taxes paid by plaintiff, and $683.40 attorney’s fees, a total of $7,973.75, and for foreclosure of the lien prayed for by the plaintiff.

Such verdict was returned, and judgment was accordingly rendered. Prom such judgment defendants have appealed.

Appellants under their fourth and sixth propositions complain of the action of the court in overruling their plea in abatement, challenging the ownership of plaintiff to the indebtedness sued on, and in refusing to submit to the jury the issue as to whether or not plaintiff had the right, title, and possession of the notes sued on at the time the suit was instituted.

Wé overrule the complaint. The undisputed evidence shows that plaintiff was in possession of the notes asserting ownership thereof; that it placed the same in the hands of W. B. Hunt, its attorney, with instructions to institute suit on the same in its name; that, in accordance with such instruction, said attorney instituted this suit. The Mortgage-Bond Company of New York, alleged by defendants to be the equitable owners -of the indebtedness sued on, filed in this suit a disclaimer disclaiming any interest in the indebtedness.

No matters of defense as to the Mortgage Bond Company of New York or Mortgage Bond & Title Corporation were pleaded in appellants’ plea in abatement, nor was any matter of defense set forth under appellants’ other pleadings which would have defeated appellee’s cause of action against the equitable owner of the notes and not against the legal owner thereof.

The Negotiable Instrument Act provides as follows: “The holder of a negotiable instrument may sue thereon in his own name and payment to him in due course discharges the instrument.” Article 5935, R. C. S. 1925, § 51.

The appellee, plaintiff below, offered in evidence the instruments sued upon properly indorsed and being made payable to the ap-pellee under the indorsement of the original payee. No question was raised as to the genuineness of the indorsement, and the instruments themselves were produced in court.

The case of Neyland v. Lanier (Tex. Civ. App.) 273 S. W. 1022, 1023, was a case in which suit was instituted by J. L. Neyland, the payee of a promissory note in the sum of $700, against W. E. Elynn and G. T. Lanier et al., as makers of the note. The defendants, among other things, contended that, at the time the $700 note was executed and the money loaned, $300 of the $700 belonged to J. H. Neyland and $400 of the note belonged to Neyland’s son, Dewitt. From a judgment in favor of the defendant, Neyland appealed, and the Court of Civil Appeals, in passing upon the contention that Neyland could not recover on the $700 note because he did not own the same, used the following language:

“The fact, that appellant did not own the entire equitable interest in the note, did not prevent his maintaining a suit thereon as the legal owner and holder thereof. Section 51 of the Uniform Negotiable Instruments Act provides specifically that the holder of a note may maintain suit in his own name. It has been the holding of our Supreme Court from its earliest decisions that the person, who appears to be the legal holder of a promissory note, may maintain an action upon it in his own name, although the actual ownership is in another. Thompson v. Cartwright, 1 Tex. 87, 46 Am. Dec. 95; * * * Allison v. Phoenix Ins. Co., 87 Tex. 593, 30 S. W. 547.”

In Nickels v. Gilmore (Tex. Civ. App.) 293 S. W. 884, 885, the maker of the note sued on contended that plaintiff was not the true owner of the note, but that the Republic National Bank of Dallas was the equitable owner thereof, and the court, in deciding the issue, said:

“As the notes were payable to Gilmore, he was entitled to recover, in the absence of any defense shown to exist between plaintiff in error and an equitable owner. In this situation, it was immaterial that others own ed equitable interests in the notes or debt, as the judgment rendered on the notes will be a complete bar to another suit by any such equitable owner.
“This doctrine was very clearly announced by our Supreme Court in the early case of-Thompson v. Cartwright, 1 Tex. 87, 46 Am. Dec. 95, uniformly adhered to since. The court said:
“ ‘The true and real owner of the note sued on, in the case under consideration, could not have been a material inquiry. The note itself showed the right of the plaintiff to sue at law; and the inquiry whether there was an equitable owner, aside from or behind the legal ownership, was not essential to the rights of the defendant, unless there was matter of defense growing up between him and such equitable owner. The judgment against him would be a complete bar to another action, on the same note. The inquiry, who was the real owner, could only have been a matter of idle curiosity.’ McMillan v. Croft, 2 Tex. 397; Fowler v. Willis, 4 Tex. 48; Zachary v. Gregory, 32 Tex. 452; Brown v. Chenoworth, 51 Tex. 469, 476, 477; Allison, etc., v. Phoenix Ins. Co., 87 Tex. 593, 596, 30 S. W. 547.”

In Houston Finance Corporation v. Stewart (Tex. Civ. App.) 7 S.W.(2d) 644, 646, it is said: “It has long been well settled that one who has the legal title to a note may sue in his own name, though the equitable title be in another, unless the defendant have a defense against one which he could not urge against the other.”

By appellants’ first and second -propositions, they insist that the alterations shown to have -been made in interest coupon notes 1, 2, and 3 were material alterations and rendered the principal note and all interest coupon notes void and unenforceable; therefore the court erred in instructing a verdict for the plaintiff and in not instructing a verdict for defendants.

We overrule appellants’ contention. If it ¡be conceded that the coupon notes were negotiable instruments and are governed by our Negotiable Act, which concession is not made, we would nevertheless hold that under the facts of this case none of the notes were rendered void and unenforceable -by reason of such alterations.

It was provided in the principal $6,000 note that, upon the performance of certain conditions, the makers might pay 10 per cent, of the principal of the note at any interest paying period. The first installment on the note was to become due six months after the date of the note, and a like installment' was to become due each six months thereafter until the tenth installment, at which time the entire balance due upon the note was to be paid; the instrument further providing that the note and any installment of principal due thereon should bear interest after maturity at the rate of 10 per cent, per annum. The note bore interest at the rate of 6½ per cent., payable semiannually at dates coincident with the dates upon which the installments of principal became due.

The interest upon the principal note was evidenced by ten interest coupon notes, each providing for the payment of $195, using the .following language: “Being the interest on principal note for $6,000.00 of even date herewith. * * * This coupon is subject to pro rata reduction in amount on account of any payments which may be made on said principal note, in accordance with the provisions of said note or any extension thereof, or the mortgage or deed securing the same.”

It seems apparent that the reason for making the alterations in .the interest coupon notes Nos. 1, 2, and 3 was based upon the following facts:

The first installment of the ‘principal due on November 1,1928, was paid, but the second installment due May 1, 1929, was unpaid. Under the terms of the principal note, this installment, being past due, bore interest at the rate of 10 per cent, per annum. The balance due then upon the note amounted to $5,850; $5,700 of which bore interest at the rate of 6½ per cent, per annum from May 1, 1929, to November 1, 1929, amounting to the sum of $185.25, the balance, amounting to $150, being a past-due installment of principal, bore interest at the rate of 10 per cent, per annum, amounting to $7.50, the total being $192.75.

Granting, however, for the sake of argument, that the coupon notes are negotiable instruments as contemplated by our Negotiable Instrument Law, and that the changes made in coupon notes 1, 2, and 3 amounted to material alterations, still none of the notes would thereby be rendered void and unenforceable by reason of the provisions of section 124 of article 5939, Revised Civil Statutes of 1925, invoked by appellants, which is as follows: “Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized or assented to the alteration, and subsequent indorsers.”

This statute is expressive of the common law, and it will be noted that the alteration to be material must be made without the assent of all parties liable thereon. This rule is well stated in Texas Jurisprudence, volume 2, p. 700, par. 8.

As already stated, coupon notes Nos. 1 and 2 as altered were presented to and paid by appellants without protest. It thus indisputably appears that appellants had assented to the alterations made in coupon notes Nos. 1 and 2, and that, having full notice and knowledge that such alterations were 'being made on the interest coupon notes, it was within the contemplation of the parties that such alteration would be made on interest coupon note No. 3, and that appellants assented to such alteration being made.

It is apparent from a consideration of the authorities cited and the facts shown that, though the alteration made in note No. 3 was material, such note will not be avoided by reason of such alteration.

We hold, however, that the interest coupon notes were not negotiable instruments, and are not governed by any of the provisions of'the Negotiable Act (Rev. St. 1925, art. 5932 et seq.), but, if they were, since coupon notes Nos. 1 and 2 were paid, the validity of note No. 3 alone was affected by the alterations made, even though such alteration be material.

For the reasons pointed out, we overrule all of appellants’ assignments and order that the judgment of the trial court be affirmed.

Affirmed.


author: PLEASANTS, C. J.

text:
    BRAGG et al. v. HUGHES.
    No. 9744.
    Court of Civil Appeals of Texas. Galveston.
    July 20, 1932.
    Rehearing Denied Sept. 29, 1932.

      J. S. Braeewell, of Houston, for appellants.
    King, Wood & Morrow and H. E. Cox, all of Houston, for appellee.
   PLEASANTS, C. J.

This is a suit brought by appellant, Lela Bragg, the surviving wife, and other plaintiffs, appellants herein, the children and the mother of Allen Bragg, deceased, against ap-pellee to recover damages for the death of Allen Bragg which is alleged to have been caused by the negligence of the agents and employees of the defendant in the operation of a truck on a public highway near the city of Houston.

The appellee answered by general demurrer and numerous special exceptions to plaintiffs’ petition, by general denial of its allegations, and by plea of contributory negligence on the part of the driver of the automobile in which the deceased was riding at the time of the collision by which his death was caused.

The trial in the court below resulted in a verdict and judgment in favor of defendant.

The evidence shows that appellee, who owns and operates trucks on the public highways leading out of Houston, had sent several of his employees with one of his trucks to Wortham, Tex., to bring back to Houston another truck belonging to appellee which had been burned and disabled at or near Worth-am. As these employees were returning to Houston pulling the disabled truck, the front wheels of which were raised up and fastened upon the rear end of the truck which was being driven by appellee’s employees, they discovered a Ford car which had run into the ditch on the side of the highway. When they arrived at the car in the ditch, appel-lee’s employees stopped their truck on the side of the highway and proceeded to assist the driver of the Ford car in getting it out of the ditch. To do this they detached the disabled truck from the truck they were driving and left it standing on the side of the highway. They then, with the assistance of the owner of the Ford car, fastened it to the truck they were driving and pulled it out of the ditch. After they had gotten the car out of the ditch and were engaged in unfastening the chain which attached it to the truck, an automobile in which the deceased and another were riding ran into the rear of the disabled truck, which had been left standing on the right side of the highway, with such force as to cause an explosion and fire in which the occupants of the automobile were burned to death. At the time of this collision, the disabled truck only occupied about two feet of the concrete portion of the highway with its left rear wheel. There was no light on the truck at the time of collision, but the evidence shows that it was not dark at that time.

In answer to special Issues submitted by the trial court, the jury found that the driver of the automobile in which deceased was riding at the time of the collision negligently failed to keep a proper lookout for objects on or near the highway, and that such negligence was a proximate cause of the collision, and that the automobile was being op-, erated at a negligent rate of speed, and that was a proximate cause of the collision.

They also found in response to a special issue that the automobile in which Bragg was riding was not being driven in a negligent manner just prior to the time of the collision.

■ Appellants’ first proposition complains of the judgment on the ground that these findings of the jury are so conflicting as to destroy the verdict and require its setting aside. The proposition is not without force, but we think the point has been properly ruled against appellants’ contention. In the case of Thrush v. Lingo Co. (Tex. Civ. App.) 262 S. W. 551, 554 (writ of error refused), the jury found that the plaintiff was negligent in not driving to the center of the street before making a turn to the left, and that her failure to go to center of the street before turning to the left proximately caused the collision, and also found that on the occasion in question the- plaintiff exercised ordinary care for her own safety. In discussing and deciding the question as to whether the verdict in that case was so conflicting as to require its setting aside, the court says:

“As the jury found that the specific acts complained of by appellee constituted negligence per se, and, further, that such acts were the direct and proximate cause of the injuries sustained -by her, it was not error for the court to ignore the general finding of the jury that appellant on the occasion in question exercised ordinary care for her own safety, as this was but the expression of an opinion of the jury that, although appellant had violated said state statute, and that such acts proximately caused the injury sustained by her, she otherwise exercised ordinary care for her own safety and protection. Brewster v. City of Forney (Tex. Com. App.) 223 S. W. 175; Ball v. Youngblood (Tex. Civ. App.) 252 S. W. 872; Zucht v. Brooks et al. (Tex. Civ. App.) 216 S. W, 684.
“We are therefore of the opinion that the trial court did not err in rendering judgment .for appellee upon said findings, and that said judgment should be in all respects affirmed ; and it is so ordered.”

Other cases in which the point has been ruled against appellant are St. Louis Southwestern Ry. Co. v. Miller & White (Tex. Civ. App.) 176 S. W. 830, 833; Peeler v. Smith (Tex. Civ. App.) 18 S.W. (2d) 938; Dallas National Bank v. Peaslee-Gaulbert Co. (Tex. Civ. App.) 35 S.W.(2d) 221.

We think the'principle that a specific finding should control-a general finding is properly applicable in reconciling seeming conflicts in a jury’s verdict. It is the duty of the courts- to construe verdicts as-not irreconcilably conflicting when there is any reasonable explanation of seeming conflicts. We should always assume the honesty and at least ordinary intelligence of a jury, and that they never intend that their specific findings of facts should be destroyed by a general finding in seeming conflict therewith. Graham v. Hines (Tex. Civ. App.) 240 S. W. 1015, 1019.

Appellants next assail the verdict and judgment on the ground that the trial court erred in permitting the attorney for the defendant to repeatedly ask witnesses for plaintiffs improper questions in regard to the wrongdoings and indictments against the witnesses or members of their family.

For the sake of the argument, it may be conceded that the attorney did ask improper questions of the character indicated in appellants’ brief, after the court had repeatedly sustained objections to the questions, and the attorney in so pressing the questions upon the witnesses exceeded the rules of propriety.

We think appellee’s counter proposition to this complaint of appellants, which we here copy as a part of this opinion, is a sufficient answer thereto, is sound in law, and the facts therein stated are supported by the record:

“It appearing from the record in this case that Allen Bragg was not a witness in the suit; that Garrett Bragg and Lee Bragg, witnesses for -plaintiff, testified only to matters with reference to the earning capacity of the deceased Allen Bragg, one of them, in addition, describing certain -trucks, but neither of them testifying as to the manner in which the accident occurred which caused the death of Allen Bragg; and it further appearing that the jury in answer to the issues submitted them by the court found in favor of the appellants on most of the issues of primary negligence and contributory negligence submitted, and in answer to the issue on damages found a substantial sum, and one which would have adequately compensated the appellants had judgment been entered on the verdict; and it further appearing from the record that the only finding of the jury which deprived the appellants of a judgment was that the driver of the automobile in which the deceased was riding was not keeping a lookout at the time of the accident and was proceeding at ah unreasonable speed, the act of the attorney for appellee upon -the trial in asking the witness, Garrett Bragg, if Allen Bragg had ever been indicted, and in asking him if Lee Bragg had ever had any trouble with the law; and in asking the witness, Lee Bragg, if he, Lee Bragg, had not been convicted for cattle theft, and in offering in evidence a certified copy of an indictment against Allen Bragg, if error, is shown to have been harmless and not of such a prejudicial nature as to require the reversal of the ease, where the trial court sustained the ’ appellants’ objection to such testimony and excluded the same from the jury, with admonitory instructions.” Texas Employers’ Insurance Association v. Brock (Tex. Com. App.) 36 S.W.(2d) 704; Kuehn v. Bmehn (Tex. Civ. App.) 259 S. W. 290; Pyeatt v. Anderson (Tex. Com. App.) 269 S. W. 429; Garrison v. Blanton, 48 Tex. 299; Missouri, K. & T. Ry. Co. v. Smith (Tex. Civ. App.) 101 S. W. 453; Munn Co. v. Westfall (Tex. Civ. App.) 197 S. W. 328; Emberlin v. Wichita Falls, R. & Ft. W. R. Co. (Tex. Com. App.) 284 S. W. 539.

Appellants’ third proposition complains of the ruling of the court in admitting testimony upon the issue of whether, the driver of the automobile was intoxicated at the time of the collision, of isolated acts of drinking whisky at a time too remote to bear any reasonable relation to the time under inquiry.

We think this complaint presents no material error, if any, since the record shows that the issue of intoxication of the driver of the automobile in which the deceased was riding at the time o'f the collision was answered by the Jury in favor of appellants. Foster v. Burgin (Tex. Civ. App.) 244 S. W. 244; Donaldson v. Meyer (Tex. Com. App.) 261 S. W. 369.

There is no merit in appellants’ complaint of material, error in the admission of testimony of fast driving by the driver of the automobile on occasions prior to the one in controversy. The undisputed evidence of four witnesses who testified in this case shows that at the time of the collision in which the deceased was killed the automobile in which he was riding was being driven at an excessive rate of speed.

In this state of the. record, the admission of the evidence complained of must be held harmless. Jefferson County Traction Co. v. Giles (Tex. Civ. App.) 206 S. W. 224; Burnett v. Anderson (Tex. Civ. App.) 207 S. W. 540.

If, however, we could agree with appellants on any or all of the questions above discussed, we nevertheless would affirm the judgment, because, in our opinion, upon the facts which we have before stated which are shown by the uncontradicted evidence’, appel-lee cannot be held liable for the damage caused by the negligence of appellee’s employees while they were engaged in rescuing the Ford car from the ditch alongside the highway. In engaging in this undertaking, laudable and commendable as it must be held, they were not acting in furtherance of the interest of their employer in the business in which they were employed to serve.

In Texas Jurisprudence, vol. 5, p. 775, the general rule in cases of this kind is thus stated: “Where agency is relied on as the basis of liability, the plaintiff must establish, not only that the vehicle was being driven by defendant’s agent or employee, but also that the latter was using it in the defendant’s business or service, or for his benefit or as it is expressed ‘in the course of’ or ‘within the scope of’ the driver’s employment.” !

■ In,39 Corpus Juris, 1925, it is further said: “If the servant steps aside from the master’s business for some purpose wholly disconnected with his employment, the relation of master and servant is temporarily suspended, and this is so no matter how short the time, and the master is not liable for his acts during such time.”

And further on page 1926: “The fact that in perpetrating the injury complained of the servant, while acting for some purpose of his own used facilities supplied by.the master, ’ and that the injury could not have been inflicted without such facilities, imposes no liability upon the master.”

Blashfield on Automobiles, vol. 2, p. 1384, § 18, states the rule, in cases of this kind, as follows: “The general rule is that the voluntary act of a servant in going to the assistance of or rescue of another in distress on the highway is not within the scope of his employment. Within this rule the act of a servant in stopping on the highway and attempting to help a disabled car out of the ditch is not within the scope of the employment, and the master is not liable for injuries from the collision of a third person with the servant’s .car, which he negligently left projecting beyond the center of road while on his rescue mission.”

While this exact question has not been decided by the courts of this state, and there is some conflict in the decisions of the other states as to the extent of the deviation of the servant from the performance of the duties of the master necessary as a matter of law to relieve the master from liability for the negligence of the servant, we think the facts in this case show such a deviation or turning away by the servant from the master’s business as should, as a matter of law, prevent any recovery by appellants against the appellee.

The judgment must be affirmed, and it has been so ordered.

Affirmed.