text:
    LUBY v. HOFFMAN et al.
    No. 8872.
    Court of Civil Appeals of Texas. San Antonio.
    Oct. 12, 1932.
    Rehearing Denied Nov. 16, 1932.
    B. D. Tarlton, H. G. Hart, and B. S. Odem, all of Corpus Ohristi, for appellant.
    Lewis H. Jones, of Corpus Christi, and Lloyd & Lloyd, of Alice, for appellees.
   SMITH, J.

Appellant, Luby, purchased from appellees Fallin an undivided one-half interest in a tract of land in Duval county; the stipulated consideration being substantially as follows:

“The sum of $20,000.00 to us in hand paid, and secured to be paid by James P. Luby, of Duval County, Texas, in the following manner, to-wit:

“$1,359,66 in cash, the receipt of which is hereby acknowledged and confessed, and the sum of $18,640.00, by the assumption on the part of the said James P. Luby, of the full payment of a certain promissory vendor’s lien in the amount of $18,640.00 executed by the grantors herein on December 22, 1927, and payable to the order of N. A. Hoffman, on December 22, 1930,' bearing eight percent interest per annum payable annually. * * * ”

Upon Luby’s default in the payment of the note thus assumed by him, Hoffman, the holder of that note, brought suit thereon against Luby and the Fallins. Pending that suit, Hoffman procured the sale of the land by a trustee under a deed of trust given to secure said note, and bought the land in at such sale. Luby and Fallin acquiesced in this disposition of the land and agreed to Hoffman’s title, without further recourse by the latter upon them for deficiencies. Hoffman was thus dropped out of the case, with title to the land, leaving Luby and Fallin to settle differences asserted by them in cross-complaints against each other.

In his complaint against Luby, Fallin, as stated in his brief, “asked for personal judgment against appellant for their damages by reason of his breach of the contract of .assumption and the failure to pay the note as it became due, and as a measure of their damages they asked for the value of their undivided one-half interest in and to the ⅜ * * land as of January 6, 1931, the date of the Trustee’s sale.”

In his answer to Fallins’ pleadings, Luby set up the following: “Further answering herein, if further answer be necessary, this defendant would respectfully show to the Court that while it is true, as alleged in said answer of the defendants Fallin, that he purchased an undivided one-half interest in the property described, and assumed the payment of the said note described in plaintiff’s petition, that the consideration for the assumption of said indebtedness has failed in this, that at the time of the acceptance of said deed that the real consideration for the assumption of said indebtedness and the acceptance of said deed, was the agreement and promise on the part of the said Adelaide Hoffman Fallin, joined by her husband, R. E. Fallin, to secure for the benefit of the defendant James P. Luby, the execution on the part of the plaintiff, N. A. Hoffman, of a release clause which would enable the defendant Luby to undertake a sale of said property, and the further agreement and promise on the part of the said Fallins to cause said land to be surveyed and divided, and the further agreement and promise on the part of the said Fallins to pay the said Luby the sum of $1,695.00 on or before December 22, 1929, which sum of money was due and owing by the said Fallins and is still due and owing by the said Fallins to the said Luby, and that at the time said conveyance was made and said deed accepted by the said Luby, these agreements were a part of the real con-, sideration moving to the said Luby for the assumption of said indebtedness described, and that had said money due by the defendants Fallin to Luby been paid as agreed, the interest on said indebtedness of $18,640.00 would have been paid and said' indebtedness extended; that by reason of the defendants Adelaide Hoffman Fallin and R. E. Fallin failing to keep and perform the considerations agreed upon, that there has been a failure of consideration for the assumption of said indebtedness and that the said Luby is relieved of any liability, primary or seeond-ary, by reason of said failure of consideration, to the defendants Adelaide Hoffman Fallin or R. E. Fallin.”

Luby further sought recovery against Fal-lin upon the latter’s note to 'him for $1,695, which, was secured by deed of trust upon the premises in question.

In a trial before the court without á jury, Fallin recovered damages against Luby as prayed for, against which judgment Luby was allowed to set off the amount of said $1,-•695 note. Luby has appealed.

The trial judge first admitted, but later in the trial excluded from consideration, all the evidence offered by appellant under his allegations of failure of consideration. Appellant’s complaint of this action of the •court brings into consideration the controlling questions in the appeal.

We have carefully studied and analyzed this evidence, and have unhesitatingly reached the firm conclusion that, if all of it be considered and given its full effect in favor of appellant, it. wholly fails to show any binding agreement between the parties for any of the purposes urged by appellant. It shows conclusively, rather, that the minds of the parties did not meet at any turn in the negotiations between them, and that the deed in controversy encompassed every element of agreement actually reached between the parties.

This conclusion settles the appeal, all of appellant’s propositions will be overruled, and the judgment affirmed.


source: Caselaw Access Project

author: O’QUINN, J.

license: Public Domain

text:
    FIRE ASS’N OF PHILADELPHIA v. CRAWFORD.
    No. 2269.
    Court of Civil Appeals of Texas. Beaumont.
    Oct. 27, 1932.
    Mantooth & Denman, of Lufkin, and Thompson, Knight, Baker & Harris, of Dallas, for appellant.
    Fairchild & Redditt, of Lufkin, for appel-lee.
   O’QUINN, J.

Crawford sued the insurance association in the district court of Angelina county, Tex., to recover the sum of $2,500 on a fire insurance policy issued to him by appellee covering a house situated on the south side of Wettermark street in the city of Nacog-doches, Tex. This appeal is from a judgment in favor of Crawford for $2,250.

Appellant’s first two assignments urge that the judgment was error because appellee did not plead and prove that he owned the building described in the policy, at the date of the policy, and the date of the fire.

The assignments are overruled. When the allegations in the petition are given all reasonable intendments to which they are entitled, we think the petition sufficient. Furthermore, appellant’s answer on the merits consisted of a general demurrer and a general denial. The judgment recites that appellant waived all of its pleadings except its general denial, and further recites that counsel for the parties agreed that the only issue involved in the case was the amount of damages recoverable for the loss. This was an acknowledgment on the part of appellant that all other matters relating to appellee’s right to recover sufficiently appeared. Accordingly, the court submitted only one issue to the jury, which required them to find the amount of the loss or damage suffered to the building involved by reason of the fire, which they answered to be $2,250. There was no exception to the charge, nor is there any complaint here pointing to the recitals in the judgment above stated.

Appellant challenges the judgment for interest on the amount of the judgment, $2,-250, from September 1, 1931, until paid, as error and excessive, because allowed “from an erroneous date.” We do not think this assignment can be considered. It points out no specific error. It merely says that interest was allowed from an “erroneous date,” not in any wise suggesting the date from which interest should have been allowed. But, if considered, we do not believe any error is shown. The policy provided: “ * * * The sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate and satisfactory proof of loss have been received by this company in accordance with the terms of this policy. * * * ”

The fire occurred June 18, 1931. Notice was given ancl claim made and filed with the company in ten days. That, under the terms of the policy just above quoted, made the loss payable about August 28, 1931. Appellant made no effort to show proof of loss was made at any other time. If the insurance was due to be paid sixty days after notice of loss, proof of loss, and claim for loss were made, then appellee was entitled to interest from the expiration of said sixty days, which would have been about August 28, 1931. The judgment allows interest from September 1, 1931. Excessiveness in interest is not shown. Delaware Underwriters & Westchester Fire Ins. Co. v. Brock, 109 Tex. 425, 211 S. W. 779; Fire Ass’n v. Strayhorn (Tex. Com. App.) 211 S. W. 447; Great American Ins. Co. v. D. W. Ray & Son (Tex. Com. App.) 15 S.W.(2d) 223.

No error appearing, the judgment should be affirmed, and it is so ordered.

Affirmed.


author: LANE, J.

text:
    ROSS et al. v. ISAACS.
    No. 9767.
    Court of Civil Appeals of Texas. Galveston.
    July 22, 1932.
    Rehearing Granted in part Sept. 29, 1932.
    John B. Warren, of Houston, for appellants.
    T. H. Stone and Blanchard & Woodul, all of Houston, for appellee.
   LANE, J.

On the 15th day of August, 1930, E. C. Isaacs was indebted to John Ross in the sum. of $8,000 evidenced by eight promissory notes, each for the sum of $1,000, executed and delivered by Isaacs to Ross, bearing interest at the rate of 6 per cent, per annum, payable annually on the 1st days of July, 1931, and each year thereafter until all notes were paid; said notes being payable, the first on the 1st day of July, 1931, and one on July 1st of each year thereafter until all were paid. It was also provided in the notes for 10 per cent, on principal and interest as attorney’s fees if such notes were not paid when due and were placed in the hands of an attorney for collection. Such notes were secured by a vendor’s lien on certain property and also by a deed of trust executed contemporaneously with the execution of the notes, wherein John B. Warren was named as trustee. It was provided ■by the terms of such deed of trust that Isaacs would insure and keep insured certain buildings upon the property covered by the liens mentioned, loss, if any, to be paid to Ross as his interest might appear.

It was also provided by such deed of trust that, until all of the notes were paid, Isaacs was to pay all taxes and assessments due on the above-mentioned property, and that in the event Isaacs failed to pay such taxes when •due and keep such property insured, Ross might pay such unpaid taxes, and that such should he considered as part of the expense of collection, but that such payment, if made by Ross, should in no wise be considered or constitute a waiver of the right of the holder of the notes to declare same, and all other indebtedness thereunder, to be due and payable.

Isaacs failed to keep the property insured as provided in the deed of trust, all taxes and assessments against the property involved were paid for all years up to the year 1929. The taxes due on the property for the year 1929 were not paid when due and the same were unpaid on the 1st day of July, 1930. Ross, having information that the taxes for 1929 had not been paid, had a conversation with Isaacs wherein he told Isaacs that he •might have until September 1, 1930, to pay such taxes unless suit was instituted for the •collection of same, but that, if such suit was brought, the taxes should at once be paid. Isaacs paid the 1929 taxes on the 16th day of August, 1930.

All interest due on the notes was paid up to July 1, 1930, and none of the notes were due until July 1, 1931.

On the 15th day of August, 1930, John Ross brought this suit against Ed. C. Isaacs to recover on the eight notes described in our preliminary statement, and for a foreclosure of the vendor’s lien retained to secure payment of same, and for a foreclosure of his deed of trust lien described in his petition, for 10 per ■cent, attorney’s fees as provided for in the notes and deed of trust, and for $111.02 which he alleges he had paid for taxes.

Plaintiff! alleged that by the terms of the deed of trust defendant covenanted and agreed with plaintiff! that he would insure and .keep insured the improvements on the land conveyed and cause the loss, if any, to be payable to the trustee named in the deed of trust for the benefit of plaintiff, which covenant and agreement he had wholly failed to perform.

Plaintiff also alleged as authority for declaring all notes due and payable that, by the terms of the deed of trust, the defendant had covenanted and agreed with plaintiff that until all notes were paid he would pay all taxes .and assessments on the premises conveyed, and that, if he failed to keep such premises insured, or to pay the taxes when due, plaintiff might pay same, and that such payment should be considered as a part of the expenses •of collection and be paid out of the proceeds ■of the sale of the property together with 10 per cent, interest per annum thereon from the tixhe of payment; that the exercise of such right should, however, in nowise be considered a waiver of the right of the holder of the notes to declare same, and all other indebtedness thereunder, to be due and payable.

He further alleged that on the 12th day of August, 1930, the taxes due on the premises conveyed for the year 1929 were past due and unpaid, and that on said date he paid such taxes, as he was being threatened with suit therefor. That as he was, at the time he paid such delinquent taxes, the owner and holder of the eight notes, he declared all of them due and payable, and for the purpose of collection placed them in the hands of his attorney.

Defendant answered, pleading a waiver of the clause in the deed of trust authorizing plaintiff to accelerate the maturity of the notes, if any such clause existed, by reason of the failure of defendant to keep the premises insured and the taxes paid.

Defendant also pleaded that plaintiff was estopped to declare the notes sued on due and payable, because of the failure of defendant to keep the premises insured and taxes paid; that Ross, by his actions and conduct, had led appellee to believe that he would not insist upon a compliance with the provisions of the deed of trust with reference to keeping the improvements insured and promptly paying taxes, and, therefore, appellant was es-topped to declare the notes due and payable; that there was no past due principal or interest due on the notes at the time Ross instituted his suit.; that no formal demand was made by Ross for the payment of said notes prior to the filing of this suit; that no presentment for payment of the notes sued on was made by Ross upon appellee for the payment of the notes sued on at his place of business or elsewhere before suit was filed; that the first notice that appellee had that Ross had attempted to accelerate the maturity of the notes sued on herein on account of failure to insure improvements and promptly pay taxes was by letter which was received after the suit had been filed; that appellee alleged that the suit was filed for the sole purpose on the part of Ross to injure and harass appellee and to collect the 16-per cent, attorney’s fees provided for in said note, and that the action on the part of Ross in filing said suit was both inequitable and unconscionable.

The plaintiff, by supplemental petition, demurred generally to the facts pleaded by defendant upon the grounds that they were insufficient in law to constitute a defense, and further that they were insufficient to constitute a waiver of plaintiff’s contract right to declare due the notes sued on for nonpayment of taxes when due, and, further, insufficient to constitute a waiver of plaintiff’s right to declare the notes due for failure to keep the premises insured.

Plaintiff specially pleaded the notes were payable “on or before” and that defendant had the privilege of paying the same at any time, and, if any such agreements as alleged were made, which was denied, that same were without consideration and wholly void and unenforceable in law.

Such demurrers and pleas were overruled hy the court.

There was a trial before a jury and at the close of plaintiff’s evidence in chief, the court, on motion of defendant therefor, instructed a verdict for defendant upon defendant depositing in the registry of the court the sum of $131.65 to be paid to plaintiff.

Judgment was rendered for plaintiff for the $131.65 but he was denied all other relief. Plaintiff filed a motion for a new trial. Between the filing of the motion for a new trial and the time it was acted upon, the plaintiff died testate. Henry Ross was appointed temporary administrator, with authority to prosecute this suit. Afterwards the will was discovered and duly probated and the motion for a new trial being overruled, the temporary administrator and the independent executrix, Viola Ross Taylor, and husband, Faulkner Taylor, perfected this appeal.

For reversal of the judgment appellant makes the following proposition: “By the terms of the deed of trust the plaintiff had the right to accelerate the maturity of the notes and proceed to collect the same on the failure of the defendant to pay the taxes on the property conveyed as they came due, or on the failure of the defendant to keep the improvements on the property insured, both of which events having happened, the plaintiff had the right to maintain this suit against the defendant, and it was not necessary that plaintiff allege or prove that he-had notified the defendant that he had exercised his right to declare the notes due, or to make demand for the payment thereof before the filing of this suit.”

We overrule appellant’s contention. We have read and re-read the deed of trust in question and we find that there is no term or provision therein authorizing the holder of the notes sued on to accelerate the maturity of same, or any other indebtedness payable by appellee, Isaacs, upon his failure to keep the property conveyed and covered by the deed of trust insured, or upon his failure to pay the taxes assessed against such property when due, as asserted by appellant’s proposition. Nor is there to be found in the statement of facts any covenant or agreement between the parties that the holder of the notes might at his option accelerate the maturity of such notes, or any other indebtedness owing by ap-pellee.

Since, then, as shown by the allegations of the plaintiff’s petition and the undisputed evidence, none of the notes nor the interest thereon was due, the suit on the notes was immaturely brought, and for this reason alone, if for no other, the court’s peremptory instruction for the defendant should be sustained.

However, there is another good and sufficient reason for sustaining the ruling of the trial court; that is, upon the equitable es-toppel pleaded by appellee.

Appellee alleged, and the undisputed evidence shows, that on or about the 1st day of July, 1930, at a time when the taxes assessed against the property for the year 1929 were past due and unpaid, John Ross told appellee that he might have until the 1st of September, 1930, to pay such taxes, unless suit was instituted to collect same before that date; that no suit was brought to make such collection; that appellee relied upon such agreement, but he did pay such taxes on the 16th day of August, 1930; that, relying upon such agreement, appellee relaxed his effort to procure the money and pay such taxes until August 16, 1930, which otherwise he could and would have procured in' time to have avoided the exercise of the option by the plaintiff to declare the notes due by reason of appellee’s not having sooner paid such taxes, even should it be conceded that plaintiff Ross had any such option, which concession is not made, but expressly denied. Corbett v. Sweeney (Tex. Civ. App.) 151 S. W. 858; Union Mutual Ins. Co. v. Mowry, 96 U. S. 544, 24 L. Ed. 674; Dickerson v. Colgrove, 100 U. S. 578, 25 L. Ed 618 Edwards v. Dickson, 66 Tex. 613, 2 S. W. 718; Longbotham v. Ley (Tex. Civ. App.) 47 S.W. (2d) 1109.

A consideration to create the equitable-estoppel pleaded and shown was not necessary. Dickerson v. Colgrove, 100 U. S. 578, 25 L. Ed. 618.

The rule as announced by the authorities-cited does not rest on the assumption that the-promisor has obtained any personal gain or-ad vantage, but on the fact that he has induced others to act in such a manner that they will be seriously prejudiced if he is allowed to fail in carrying out what he has encouraged such others to expect.

For the reasons pointed out the judgment is-affirmed.

Affirmed.

On Motion for Rehearing.

As shown by our original opinion, we affirmed the judgment of the trial court upon two theories, to wit: First, holding that there-was no provision in the notes or deed of trust which authorizes the holder of the notes sued on to accelerate the maturity thereof upon the failure of Isaacs, the maker, to keep the property conveyed and covered by the deed of' trust insured, or to pay the taxes assessed against such property when due, nor was it shown that there was any covenant or agreement between the parties that the holder of' the notes might, at his option and without notice to Isaacs, the payor, accelerate the maturity of the notes; second, holding that the-undisputed evidence shows that on or about the 1st day of July, 1930, the taxes assessed against the property covered by the deed of' trust for the year 1929 were past due and unpaid, John Ross, the holder of the notes, agreed with Isaacs that he might have until the 1st of September, 1930, to pay such taxes,. and that Isaacs, relying upon such agreement, did not pay such taxes until the 16th day of August, 1930; that, relying upon such agreement, Isaacs did not pay such taxes sooner, as he could have done had such agreement not been had, and, therefore, Ross was estopped to exercise his option to accelerate the maturity of the notes by reason of Isaacs’ failure to promptly pay said taxes, if it be admitted that he ever had such option.

Appellant has filed his motion for rehearing and attacks our holding last mentioned as not •being supported by the record, insisting that the evidence on the issue was conflicting.

After more careful inspection of the statement of facts, we find that we were in ■error in holding that the undisputed evidence on the issue as to whether John Ross, the holder of the notes, had agreed with Isaacs, the maker, that he would be permitted to pay ■the taxes involved at any time before September 1,1930. We now find that the question as to whether such agreement was made, is, as a fact, a disputed issue, and, as the judgment was upon an instructed verdict for the defendant Isaacs, it cannot be sustained upon conflicting evidence as to an alleged agreement as to the payment of taxes. We, however, adhere to our conclusion that there is no provision in the deed of trust, nor in the notes sued on, authorizing either the holder of the notes or the trustee named therein to declare the notes due by reason of default being made in the payment of taxes, or to keep the property insured.

By the terms of the deed of trust Isaacs contracted and agreed with John Ross to insure and keep insured the improvements on the land covered by such deed of trust and cause the loss, if any, to be paid to the trustee, John B. Warren, for the benefit of John Ross; that by such deed of trust Isaacs also agreed to pay all taxes assessed against said property as it accrued, until all the notes mentioned in such deed of trust were paid. By the terms of the deed of trust it is provided that, if default should be made in the payment of the notes secured, or any of them, or any installment of interest thereon when due, or in case of the breach of any of the agreements or covenants therein mentioned, the trustee is authorized, when requested to do so by the holder of the notes, or any of them, after such default, to sell the property for ■cash and to apply the proceeds of such salé, first, to the payment of all necessary costs incident to the execution of the trust, including a commission of 2 per cent, on the amount of such proceeds as the compensation of the ■trustee; second, to the payment of notes then unpaid, principal, interest, and the attorney’s fees provided in the notes, as shall have then accrued, and all taxes assessed, and all taxes .assessed against the property, the insurance premiums or other advances made by John Ross, as provided in the deed of trust, with interest thereon. It is then recited as follows: “It being understood and agreed that when default shall be made in the payment of said notes, or any of them, or any part thereof, when due, or of any installment of interest thereon, said notes shall become at once due and payable at the option of the holders thereof.”

Such deed of trust contains the following recital by Isaacs: “If I shall fail to pay said insurance premium, or said taxes and assessments when due, the Trustee or the holder of said notes may pay the same, and such payment shall be considered as part of the expenses of the execution of this trust and paid as such out of the proceeds of the sale of said premises hereby conveyed, together with interest thereon at 10 per cent per annum from the time of payment by such trustee or holder; provided, however, that the exercise of the right of advancement herein provided for shall in no wise be considered or constitute a waiver of the right of the holder of said notes to declare same, and all other indebtedness hereunder, to be at once due and payable.”

No one can reasonably contend that there is anything in either the notes sued on or the deed, of trust which expressly or otherwise authorized the trustee; to bring suit on the notes because of the failure of Isaacs to pay the taxes on the property covered by the deed of trust or to keep such property insured. By such deed of trust the trustee was authorized only upon the failure of Isaacs to pay such taxes and keep up such insurance, and then only at the request of the holder of the notes, to sell the property covered by the deed of trust. Neither by the notes nor the deed of trust is the holder of the notes authorized to accelerate the maturity of the notes by reason of the failure to pay taxes or keep up insurance by Isaacs. The only power conferred upon the trustee by the provisions of the deed of trust is to sell the property, under the terms of the deed of trust, and to apply the proceeds of such sale to the payment of the items mentioned, including 2 per cent, on the amount of such proceeds as his compensation. No authority by the terms of the deed of trust was conferred upon either the trustee or the holder of the notes to accelerate the maturity of the notes by reason of the failure of Isaacs to pay taxes and to insure the property.

The authority for the acceleration of the maturity of the notes, as set out in the deed of trust, is as follows: “It being understood and agreed that when default shall be made in the payment of said notes, or any of them, or any part thereof, when due, or of any installment of interest thereon, said notes shall become at once due and payable at the op<tion of the holders thereof.”

It is shown by the undisputed evidence that at the time this suit was filed no default had been made in the payment of any of the notes, or of any part thereof, or of any installment of interest thereon.

Upon these undisputed facts shown by the record, it is clear from the authorities that appellant cannot maintain this suit for the recovery of his entire loan. Even if the notes had contained a provision for acceleration 'of the payment of all upon the failure to pay accrued interest, and there had been ■default in the payment of any interest due thereon, the holder of the notes, which contain no waiver of presentment, could not declare all of them due without formal demand for payment of the interest, and notice of the exercise of his option to accelerate the payment of all of the notes. Article 5937, § 82, Revised Statutes 1925; Beckham v. Scott (Tex. Civ. App.) 142 S. W. 80; Griffin v. Reilly (Tex. Civ. App.) 275 S. W. 242; Parker v. Mazur (Tex. Civ. App.) 13 S.W.(2d) 174.

It is also clear to us that, if the deed of trust had authorized the appellant at his option to accelerate the payment of all of the notes upon default of the appellee in payment of taxes or obtaining insurance upon the property, he could not exercise such option without demand and notice to appellee. Such options of acceleration are not self-executing. The exercise of such power is harsh in any case, and, upon the facts of this case, every principle of equity would forbid the exercise of such power without notice, if the option for acceleration was contained in the contract sued upon.

The motion for rehearing is refused.

Refused.


author: PLEASANTS, C. J.

text:
    WALLING v. CHRISTIE & HOBBY, Inc., et al.
    No. 9759.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 20, 1932.
    Bryan, Cosby, Suhr & Bering, of Houston, for appellant.
    King, Wood & Morrow and II. E. Cox, all of Houston, for appellees Security Union Ins. Co. and Wright Morrow.
   PLEASANTS, C. J.

This is a suit by appellant against the ap-pellees Christie & Hobby, Inc., Security Union Insurance Company, and Wright Morrow, receiver of said company, to recover upon a lease contract executed by appellant and Christie & Hobby, Inc., on January 3,1927, by which he leased to the named corporation for a term of ninety-nine years business property in the city of Houston, described in the petition.

The petition alleges: That by the terms of the lease contract Christie & Hobby, Inc., obligated and bound itself to pay to plaintiff “during the first five years of the term of said lease, a net fixed rental of $200.00 per month, and for the remaining ninety-four years of the term of said lease a net fixed rental of $250.00 per month, said rental being payable to the plaintiff on the third day of each calendar month. ⅜ * ⅜ That said lease provides further that all past due rents shall bear interest from the time it becomes due until paid at the rate of eight per cent per annum, and that if default be made in the payment of any rents, or any other money which under the terms of said lease contract said Christie & Hobby, Inc., is obligated to pay to the plaintiff, and it should become necessary for plaintiff to employ an attorney to collect the same, the defendant obligated and bound itself to pay to the plaintiff reasonable attorney’s fees. That the defendant, Christie & Hobby, Inc., further obligated and bound itself, directly and impliedly, to erect and construct, or cause to be erected or constructed upon the premises hereinabove described, improvements costing not less than $10,000.00.

“That said lease obligated the defendant, Christie & Hobby, Inc., to furnish to the plaintiff a surety bond for not less than $10,-000.00 written by a bonding or surety company duly licensed to do business in the State ■of Texas, or in lieu of such bond, it obligated and bound itself to place with the plaintiff ■collateral security. Such bond or collateral security was to be at all times satisfactory to the plaintiff. That the defendant, Christie & Hobby, Inc., pursuant to said lease contract, did furnish and deliver to the plaintiff its said surety bond for the sum of $10,000.00 guaranteeing the payment of the rents and the construction of said improvements on said land, such bond to 'be in effect only until the said improvements are constructed. In said bond the defendant Security Union Insurance ■Company, joined with said defendant Christie Hobby, Inc., and acknowledged that it and Christie & Hobby, Inc., were to be jointly and Severally bound for the carrying out of said undertaking and agreement as contained in the lease contract hereinabove set forth.

“That at the time said contract was executed and said bond was furnished to the plaintiff, the Security Union Insurance Company was duly licensed to do business in the State -of Texas. Since then, the license of said Security Union Insurance Company has been revoked by the State of Texas, and the defendant, Wright Morrow, has been appointed Receiver of said Security Union Insurance Company.”

It is then alleged that Christie & Hobby, Inc., failed to pay the monthly rental which became due on July 3, 1930, and each of said monthly rentals which accrued and became due upon each succeeding month thereafter lip to the time of the filing of this suit, and has also failed and refused to pay the state, county, and city taxes for the year 1930, and has failed to construct the improvements upon the property as provided in its lease contract ; that more than a reasonable time for the construction of these improvements has elapsed, and Christie & Hobby, Inc., notwithstanding its obligation to construct said improvements within a reasonable time, has failed so to do, and failed to furnish any satisfactory bond or other security for such obligation on its part, as provided in its lease contract, since the bankruptcy of the maker of the original bond furnished by it under its contract of lease.

The petition further alleges: “Plaintiff avers that by reason of the breach by the defendants of the various and sundry provisions, conditions and covenants in said lease contract, and particularly by reason of the breach of the conditions and covenants in said lease contract as hereinabove expressly alleged, this plaintiff has heretofore elected and does now elect to declare said lease contract cancelled and to repossess the leased premises, and in this connection the plaintiff has heretofore served on the defendants, and each of them, written notice to so cancel said lease. * * * One of said written notices was given to the defendants on or about December 30, 1930, and another of said notices was given to the defendants on or about April 16, 1931.”

It is further alleged, in substance, that the reasonable market value of the unexpired term of the lease, approximately 95 years, is $100 per month, and that plaintiff is entitled .to recover the past due rentals up to the date of the cancellation of the lease, the taxes paid by him for the year 1930, with 8 per cent, interest thereon, and the difference between the present market value of the unexpired term of the lease and the present value of the rentals agreed to be paid therefor 'by the lessee, together with reasonable attorney’s fees, alleged to be $5,000. The prayer of the petition is for judgment against the defendants for each and all of these items of damages, for costs, and general and special relief both legal and equitable.

The defendant Christie & Hobby, Inc., answered by general demurrer and general denial, and by special plea of failure of consideration of the contract for the erection of improvements upon the leased premises.

The defendants iSecurity Union Insurance Company, and its receiver, Wright Morrow, answered by general demurrer, general denial, and specially pleaded that the plaintiff having, as alleged in his petition, elected to cancel and rescind the contract of lease upon which he now sued, and in fact canceled and rescinded the contract and repossessed himself of the leased premises, have thereby waived any and all claims for damages accruing after the date of such cancellation.

The ease was tried in the court without a jury and judgment was rendered in favor of plaintiff for the sum of $1,373, the amount of rents due under the contract at the time of its rescission and the repossession of the premises by plaintiff, and the further sum of $313.50 unpaid taxes, with interest upon each of these amounts at the rate of 8 per cent, per annum.

At the request of appellant the trial court filed conclusions which contain the following findings:

“That on the 30th day of December, 1930, and the 16th day of April, 1930, R. B. Walling served notice upon Christie & Hobby, Inc., that he had elected to rescind and cancel the lease contract and to repossess the leased premises; that on the 29th day of January, 1931, the said R. B. Walling did cancel and rescind the lease contract; that on the 29th day of January, 1931, the said R. B. Walling did repossess the said leased premises and has been in possession thereof ever since said date; that prior to and at the time of the rescission of the lease contract and repossession of the leased premises by R. B. Walling, he gave notice to Christie & Hobby, Inc., to quit and surrender the leased premises to him, and such leased premises' were so surrendered to him by Christie & Hobby, Inc., in accordance with his notice and demand; that the rents which had accrued under the lease contract and which were past due and unpaid at the time of the repossession of the leased premises by R. B. Walling amounted to $1,-373.00; that the taxes for 1930, which were past due and unpaid by the said Christie & ■Hobby, Inc., amounted to the sum of $318.50 at the time of the repossession of the premises by R. B. Walling.”

Appellant makes no complaint of these fact findings.

In this state of the record it is deemed unnecessary to discuss the several assignments and propositions presented in appellant's brief, since upon the pleadings and the undisputed facts no judgment against the appellees for any greater amount than that awarded the plaintiff by the trial court could have been properly rendered.

The rule of law and logic which we deem conclusive of this appeal is thus stated in 10 Texas Jurisprudence, p. 386: “Though the obligations of the contract are mutual and dependent, the failure of one party to perform does not put an end to the contract so as to make it void, but merely gives the other party the right to rescind or to waive the default and continue the contract in force. When the right to rescind for a breach exists, the innocent party is put to an election at the time of the breach as between rescission and affirmance. He must either rescind the contract as a whole or treat it as binding and sue for damages; he cannot do both, nor, as a rule, can he affirm the contract in part; and he is bound by his election when once made.”

This rule is also stated in similar 'language in 35 'Corpus Juris, p. 1077, and in 16 Ruling Case Law, p. 1137, and has been uniformly followed, so far as we have been able to ascertain, by all of our Appellate and Supreme Courts, both state and federal. This general rule, however, is not applicable in a case in which the lease expressly stipulates that reentry by the lessor will not affect the obligations of the lessee for the unexpired term of the lease, and appellant contends that the lease contract in this case expressly so provides. The provision of the contract relied on to support this contention is as follows: “It is mutually covenanted and agreed that the various rights, powers, options, elections,, appointments and remedies of the lessor contained in this lease shall be construed as cumulative and no one of them as exclusive of the other, or exclusive of any rights or rents allowed by law.”

We do not think this provision of the lease can be construed as expressly giving appellant the right to cancel the lease, repossess-the premises, and still hold the lease valid and binding upon appellees for all of its unexpired term and future obligations. We agree with appellees that the reasonable construction of this provision of the lease, applicable to the question here involved, which gives appellant, in event of default by the lessee, the right to rescind and cancel the contract and repossess the premises, is not exclusive of the other rights given him by the lease contract until such right of cancellation is exercised. The lessor, in event of default in ther payment of rents due him or of the payment of taxes by the lessee, could either rescind and cancel the lease contract and sue for recovery of the amounts due him at the time of the cancellation, or could treat the lease as a continuing obligation and sue for rents due- and for such future amounts as might accrue-thereunder against the leésee; but, in the absence of a clearly expressed agreement to that effect, he cannot take from the appellee all the possible benefits of a continuing lease and demand of him a fulfillment of all its future-obligations.

To give this lease the construction contended for -by appellant is to construe it most strongly in favor of the lessor, when the settled rule of construction is just the reverse. 16 R. C. L. 699; Miller Bros. Grocery Co. v. O’Leary (C. C. A.) 219 E. 851, L. R. A. 1916B,. 1099, page 1101, Ann. Cas. 1916A, 946; St. Louis Billposting Co. v. Stanton, 172 Mo. App. 40, 154 S. W. 821; Producers’ Packing Co. v. Fischer, 221 Mo. App. 639, 283 S. W. 747.

While the question may not be wholly free from doubt, we cannot bring ourselves to believe that the trial court erred in not giving-the lease contract the harsh construction placed upon it -by appellant, which, without any clearly expressed language evidencing-such intention of the parties, would give the appellant the right to a remedy inconsistent, with the one elected to be pursued by him.

For the reasons stated we think the judgment should be affirmed, and it is so ordered..

Affirmed.


author: LAWHON, J.

text:
    HARDIN v. GRANT.
    No. 2254.
    Court of Civil Appeals of Texas. Beaumont.
    Nov. 2, 1932.
    Rehearing Denied Nov. 9, 1932.
    Fairchild & Redditt, of I/ufkin, for appellant.
    Denman & DeLoney, of Nacogdoches, for appellee.
   LAWHON, J.

John W. Grant, appellee, lived in Nacog-doches, Nacogdoches county, Tex., in November, 1930, and was engaged in buying and selling ice. 1-Ie owned a truck, and would buy his ice from the Pure Milk & Ice Cbmí pany of Nacogdoches, and, as he said, “peddle it, over the country.” He had been engaged in tMs business exclusively about two years. J. M. Scroggins also lived in Nacogdoches at tMs time, and was arranging to move with his family to the town of Dibo-11 or near there. He consulted other truck owners about moving his household goods, but the best price he could get was $20. He saw appellee, John W. Grant, about getting him to move his goods, and Grant agreed to transport them in Ms truck from Nacogdoches and deliver them to Scroggins at the house near Diboll where he was moving to for the sum of $5. It was estimated that $5 would about cover his actual expenses in the way of gas, oil, etc. The evidence seems to show that this sum of money would pay something more than the actual expenses. Appellee started with the loaded truck from Nacogdoches on the morning of November 10, 1930, and near the town of Burke a truck with a trailer, belonging to appellant, J. T. Hardin, loaded with cotton, attempted to pass appellee, when the trailer struck appellee’s truck, knocking it over, damaging the goods belonging to Scrog-gins, and also injuring Grant’s truck, and Grant also received personal injuries. Suit was brought by the appellee against the appellant, and the case was tried in the district court of Angelina county. Appellee recovered judgment in the sum of $213.35. This amount is made up of three items, $40 for personal injuries appellee received, $73.35 for injury to his truck, and $100 for damages to the furniture. The defendant, Hardin, duly perfected Ms appeal, and it is now before this court for review.

Appellant’s only objection to the judgment is the allowance of $100 as damages to the household goods. Appellant’s contention is that, as the undisputed evidence showed that they belonged to J. M. Scroggins, and he not being a party to the sMt, there was a non-joinder of a necessary party, and that this required a dismissal of this part of the suit, or a continuance of the case until Scroggins could be made a party. Appellee contends that Grant was a common carrier, and, as such, was insurer of appellee’s goods, and could therefore recover the damages said goods sustained.

We do not think there is any issue of nonjoinder of necessary parties. If appel-lee was not authorized to bring suit for the recovery of damages to the household goods, the court should have rendered judgment against him for that item'. If the owner of the goods had originally joined appellee, Grant, in the suit or had later been made a party plaintiff, there would have been a mis-joinder of parties and causes of action because appellee, Grant, would, have been seeking to recover for his own personal injuries and damages to his truck and Scroggins would have been seeking to recover damages to his household goods. These causes of action could not have been properly joined.

We do not think the evidence shows that appellee, Hardin, was a common, carrier of goods. The undisputed evidence is that his business for two years had been buying and selling ice, using his truck exclusively in this .business. The-testimony sho ws that this was the first goods for other people he had trans-porfed. Pie therefore was, on this occasion, acting as a private carrier.

We, however, are of the opinion that appellee had a right to bring suit and recover for the damages to the goods of Scroggins. At the time of the accident he was acting as bailee of these goods. We find the following definition of “bailment” in Bouv. Law Diet. (Rawle’s Third Revision) vol. 1, p. 313: “A delivery of something of a personal nature by one party to another, to be held according to the purpose or object of the delivery, and to be returned or delivered over when that purpose is accomplished.”

In 6 Corpus Juris, p. 1084, the following definition is given: “A bailment may be defined as a delivery of personalty for some particular purpose or on mere deposit on a contract, express or implied, that after the purpose has been fulfilled it shall be redelivered to the person who delivered it or otherwise dealt with according to his directions or kept until he reclaims it as the case may be.”

Appellee, Grant, had exclusive control over the goods he was transporting, and it was his duty to deliver them to the owner at the point of destination. Some issue is raised as to whether he was performing the service gratuitously or whether his service was for hire. Appellee was undoubtedly carrying these goods for hire. The adequacy of the price Would be! immaterial. The distinction, however, between a gratuitous bailment and one for hire would- be immaterial so far as this case is concerned. Such questions become important only in so- far as the liability and duty of the bailee is concerned. We find the rule announced in 10 Corpus Ju-ris, p. 38, as follows: “A private carrier with ■or without reward is merely a bailee and his liability is determined by the rules governing the responsibilities of bailees. His liability is limited to such losses or injuries as result from his negligence or that of his servants; although bound to exercise ordinary care, he is not an insurer of the safety of the goods intrusted to him for transportation.”

The rule that a bailee has a right to recover damages to the bailed property is announced in 5 Tex. Jur. § 22, pp. 1032, 1033, in the following language: “A bailee has a right of action against a third person for injuries inflicted by him upon the bailed property and may recover the entire damages. The right to recover the whole value or. damage rests upon the hypothesis that he is the agent of the bailor, charged with the execution of a trust, and that he will hold the amount of damages collected beyond his own interest for the general owner.”

In Waggoner v. Snody, 98 Tex. 512, 85 S. W. 1134, Judge Brown announced the rule that a bailee was entitled to recover against third persons damages done to the bailed property. See, also, Masterson v. International & G. N. R. Co. (Tex. Civ. App.) 55 S. W. 577. No complaint is made as to the part of the judgment wherein appellee recovered for damages his truck sustained and for injuries to his person.

The judgment of the trial court is therefore affirmed.


author: LOONEY, J. JONES, O. J.

text:
    TEXAS PIPE LINE CO. v. BURTON DRILLING CO.
    No. 11371.
    Court of Civil Appeals of Texas. Dallas.
    Sept. 24, 1932.
    Motion for Rehearing Dismissed Oct. 29, 1932.

      H. S. Garrett, of Port Worth, and Wm. K. Hall, of Houston, for appellant.
    Hamilton & Hamilton, of Dallas, for ap-pellee.
   LOONEY, J.

At the suit of Burton Drilling Company, the court below issued, ex parte and without notice, an interlocutory mandatory injunction commanding the Texas Pipe Line Company, a common carrier engaged in transporting crude oil, to desist from refusing to accept and transport certain petroleum oil belonging to appellee, and to accept and transport same in due course of business, until further ordered by the court.

Without moving to dissolve or to suspend operation of the writ, the pipe line company appealed direct from the order; hence the allegations of appellee’s petition, for the purposes of this appeal, will be accepted as the undisputed facts. Royal Brewing Co. v. Missouri, K. & T. Ry. Co. (D. C.) 217 F. 146; Athens Tel. Co. v. City of Athens (Tex. Civ. App.) 163 S. W. 371.

The case briefly stated is this: Between July 2 and 28, 1932, appellee owned and held ready for transportation 65,000 barrels of oil, and tendered same to appellant for such purpose, which appellant refused until and unless appellee complied with Special Order No. 120 promulgated July 28, 1932, by the railroad commission of Texas, requiring pipe lines, before transporting oil, to secure from the person, persons, firm, or corporation tendering same for transportation, an affidavit giving the names and addresses of the owner or the person or company making the tender, also the name of the consignee and for whose account consigned, stating who produced the oil, naming the lease where produced iby its survey, and the county where located, the number of wells on ‘the lease from which the oil was produced, the date or dates when produced, the amount produced daily from said lease, and whether or not the oil so tendered was legally produced according to the provisions of the statute and orders and rules of the railroad commission. Appellee alleged its inability to comply with the requirements of the order of the commission, because at the time the oil was acquired by it, neither the statute nor any order of the commission required such preliminary proofs; therefore, in order to meet the demands of appellant, appellee went before the railroad commission and the Attorney General’s department of the state with an application for an order to permit its said oil to be run and transported by appellant without complying with Special Order No. 120; that on August 25, 1932, the commission, after reciting the fact that said oil had been produced and purchased toy appellee prior to the taking effect of Order No. 120, entered an order as follows: “It is ordered by the Railroad Commission of Texas that Special Order No. 120 be, and it is hereby waived insofar as the transportation of the 65,000 barrels of oil by Burton Drilling Company, as hereinabove set forth, is concerned and such carrier or carriers to which said oil may be tendered are herewith and hereby authorized to accept, transport and deliver such oil without the compliance with the terms and stipulations of said Special Order No. 120.” The allegation is made that after the commission made the order just mentioned, appellee again tendered the oil to appellant for transportation to the consignees to whom the oil had been contracted, but that appellant persistently, arbitrarily, and maliciously refused to receive and transport the oil or any part thereof, stating to appellee in a telegram dated August 27, 1932, that: “This waiver (the order of the Railroad Commission) does not release us of the necessity of securing affidavits from American Liberty Oil Company (the party from whom appellee purchased the oil) as to legal production of said oil source- of same, etc. Therefore we cannot accept ten-¡ler unless all these matters have been worked out to our complete satisfaction.” Ap-pellee alleged further that appellant’s refusal to transport the oil is a mere pretense, in furtherance of a conspiracy entered into between it and -certain larger oil companies engaged in purchasing oil, to damage and destroy appellee’s business, as well as to destroy competition and the business of other small producers of oil; that in furtherance of said conspiracy, appellant intends to, and will in the future, refuse to take and transport other oils when tendered by appellee for such purpose; that by the refusal of appellant to transport said oil appellee will suffer irreparable damage, in that it has no storage for the oil; that the same is not suitably stored for ■preservation, is subject to the elements, liable to be destroyed, will evaporate, waste, and depreciate in gasolene content; that appel-lee is under contract to deliver same fresh and -of a certain gravity test; that there exists no other practical or convenient means of transporting the oil to market; that ap-pellee purchased the oil in good faith from the American Liberty Oil Company, .believing the same had -been lawfully produced, still so believes, does not know, nor has it at any time had any knowledge, of any illegality in its production or in its acquisition by the American Liberty Oil Company; and having acquired the oil July 2, 1932, prior to the promulgation of Commission Order No. 120, was not able to compel sellers from whom the oil was acquired to make the proof required by said order, hence was unable to meet the demand of appellant until Order No. 120 was waived in its application to the 65,-000 barrels in question. Appellee also seeks recovery of damages, actual and exemplary, prayed the issuance of a temporary injunction commanding appellant to receive and transport, in due course of business, all oil that may be tendered to it by appellant, and on final hearing that said injunction be made permanent, that it have judgment for its damages, penalties, and costs of suit, etc.

The court made the interlocutory order from which this appeal is prosecuted, commanding appellant “to desist and refrain from refusing to accept into your pipe lines for transportation the plaintiff’s petroleum oil, consisting of - 65,000 barrels, about 8,000 of which is in the storage known as the Burton Storage on the Della Lou Crim Earm in Rusk County, Texas, and the balance in tanks Nos. 1, 2 and 3 of the Tyler Pipe Line Company at Tyler and Overton, Texas, until the further order of this court, and you are hereby mandatorily commanded to take, accept and transport in due course of business as a common carrier, the plaintiff’s said oil until the further order of this court.” The above is a sufficient statement of the case for present purposes.

Counsel for appellant say: “We can draw no distinction between the judgment of a court of law commanding, by writ of mandamus, the performance of an affirmative act, and the decree of a court of equity commanding by mandatory injunction, the performance of substantially, the same act,” and based upon this proposition, they argue that this is, in effect, a mandamus proceeding and that the writ is void, under authority of Cleveland v. Ward, 116 Tex. page 1, 285 S. W. 1063, because the same was iis-sued ex parte and without notice. If it be true that this is simply the common-law action of mandamus, the writ, issued without notice, would be'void because in contravention of article 2328, R. S. 1925, and further because violative of the due process of law provision of the Constitution; but is this, properly'speaking, a mandamus proceeding? We think not.

It is quite true that mandamus is a proper and doubtless the usual remedy to compel a corporation to perform its legal duty to the public, yet mandamus is by no means an exclusive remedy, nor can it be correctly said that it is an adequate remedy in instances such as we are now considering, where, in order to restore and maintain the status quo, action and not rest is required, as rest in such instances is the element that inflicts the irreparable injury of which complaint is made. 32 C. J. pp. 24, 25, § (7)c. It is held even in jurisdictions maintaining separate law and equity courts that, for a legal remedy to be considered adequate, it must be “as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity” and “that where mandamus would not he sufficiently prompt, equity could proceed by injunction.” The case under consideration is a fair illustration of a situation where promptness of relief is all-important, and where the necessary incidental delay to an action at law renders mandamus inadequate and futile to furnish the necessary relief. See Bourke v. Olcott Water Co., 84 Vt. 121, 78 A. 715, 716, 88 L. R. A. (N. S.) 1015, where, discussing this question, the Supreme Court of Vermont said: “Cases may easily be supposed in which promptness of relief would be all-important, and the delay incident to an application for mandamus would Tender that remedy utterly inadequate and useless. Take the case of a railroad company wrongfully refusing to furnish cars to one engaged in the business of shipping Christmas trees. Take the case of an irrigation company wrongfully refusing to supply a customer with water at a time when the whole crop was endangered. Take the case of an aqueduct company, bound by its charter to supply a municipality With water for fire pro-tectioai, wrongfully cutting off the supply during an extremely dry time. Can it be said in such oases that mandamus affords a remedy as efficient to the prompt administration of justice, as that by mandatory injunction? .Take this very case. The orators had no other source of water supply. Winter was shutting down upon them. The preliminary injunction was dated November 29th, and the earliest possible relief by mandamus could not be afforded before the following January term of this court. In the meantime the orators and their families were to remain without water. Mandamus afforded no adequate remedy. Equity alone was adequate to their necessities.” We cannot assent to the proposition urged by appellant that this proceeding is to be assimilated to and disposed of under rules of law applicable alone to a mandamus proceeding, and appellant having the statutory right to move for dissolution of the writ, and for its suspension pending appeal, and waiving these privileges it cannot, in our opinion, be said that the issuance of the writ ex parte, and without notice, deprived appellant of due process of law in violation of the Constitution (article 1, § 19; Const. U. S. Amend. 14).

Insisting that as ' the proper function of a temporary writ, either mandatory or prohibitive, is to restore or preserve the status quo, appellant contends that the trial court erred in issuing the writ in question because its effect is to award in advance to appellee all relief it could obtain on final trial.

We have heretofore seen that the status quo in actions of this nature “is a condition not of rest but of action, and the condition of rest is what will inflict the irreparable injury.complained of, in which circumstances courts of equity may issue mandatory writs before the case is heard on its merits.” This doctrine has been proclaimed and applied in this as well as in other jurisdictions; in instances where it is made to appear that the complainant was entitled to a final mandatory injunction, a temporary writ similar in its scope and effect issued, although the temporary writ granted all the relief that could be obtained upon a final decree, and thus practically disposed of the whole case. See Jeff Chaison, etc., Co. v. McFaddin, 56 Tex. Civ. App. 611, 121 S. W. 716; M., K. & T. Ry. Co. v. Seeger (Teix. Civ. App.) 175 S. W. 718; Obets & Harris v. Speed (Tex. Civ. App.) 211 S. W. 316, 318; Oil Lease, etc., v. Beeler (Tex. Civ. App.) 217 S. W. 1054; City of Dallas v. McElroy (Tex. Civ. App.) 254 S. W. 599, 601; Bourke v. Olcott, 84 Vt. 121, 78 A. 715, 33 L. R. A. (N. S.) 1015; L. & N. R. R. Co. v. F. W. Cook Brewing Co., 223 U. S. 81, 32 S. Ct. 189, 56 L. Ed. 355; 32 C. J. page 25, § 7; 14 R. C. L. page 318, § 17. Excerpts in point quoted from a few of these authorities fully sustain the doctrine above announced. In Obets & Harris v. Speed, supra, page 318, of 211 S. W., the Court of Civil Appeals used this language: “Appellee contends that this is not a proper case for a temporary injunction, because to grant the same would be all the relief that could be obtained upon a final decree, and would practically dispose of the whole case. The principle invoked has no application to the present case. Under the authorities cited above the appellants were entitled to the injunction sought.” In Oil Lease, etc., v. Beeler, supra, page 1058, of 217 S. W., the court said that: “It is contended that the decree of the court is too comprehensive, in that it in effect grants all the relief sought by the pleading, and all that could have been granted by the court on final hearing. The fact that the court granted all the relief sought is not, in our opinion, any ground for revising the decree; if the evidence and the rules of equity authorized it.” In 32 C. J. pp. 25 and 26, § 7, the doctrine is stated that: “While it is generally true that the office of a preliminary injunction is to preserve the status quo until upon final hearing the court may grant full relief, and that this can be accomplished by an injunction prohibitory in form, it sometimes happens that the status quo is a condition not of rest but of action and the condition of rest is what will inflict the irreparable injury complained of, in which circumstances courts of equity may issue mandatory writs before the case is heard on its merits. Mandatory injunctions should rarely be granted except on final hearing and only where -a plain and imperative case for active interference is shown, and then only to execute the judgment or decree of the court. To authorize the issuance of a mandatory injunction in- such case, the invasion of the right must be material and substantial; the right of complainant must he clear and unmistakable on the law and the facts; and there must exist an urgent and paramount necessity for the issuing of a writ in order to prevent extreme or other serious damage which would ensue from withholding it. If the issuance on preliminary application of an injunction mandatory in nature will hare the effect of granting to the complainant all the relief that he could obtain upon a final hearing, the application should be refused except in very rare cases, and then only where complainant’s right to the reljef is clear and certain.” The same doctrine is announced in 14 R. O. L. p. 318, § 16 as follows: “Where the complainant makes a case for a final mandatory injunction there seems to be no reason why a temporary injunction, similar in effect, may not issue, if the state of things brought about by the defendant’s alleged wrongful acts, will produce injury to the plaintiff. The case, however, should be a ‘very strong and urgent one to induce the court to issue such a writ. A prospective injury must be clearly apparent for which •the plaintiff will have no adequate remedy at law.” Mandatory writs may issue at the suit of shippers against carriers, forbidding them to refuse to receive and transport, in due course of business, a commodity which,-under the law, it is their duty to transport. 10 C. J. p. 69, § 60F; Crescent Liquor Co. v. Platt (C. C.) 148 P. 894, 903; Royal Brewing Co. v. M. K. & T. Ry. Co. (D. C.) 217 P. 146. A preliminary mandatory writ “will be granted when a serious probable right is threatened and a probable danger is shown” (Boynton v. Milmo (Tex. Civ. App.) 218 S. W. 510, 512), “in an extreme case when the right is clearly established and the invasion of the right results in serious injury,” otherwise stated in the same case that the complainant must show “a strong and mischievous case of pressing necessity” (Cartwright v. Warren (Tex. Civ. App.) 177 S. W. 197, 199), “and when the issuance of such injunction would have the effect of granting all the relief that could be obtained by a final decree it should not be granted, except in cases of extreme hardship” (I. & G. N. Ry. Co. v. Anderson County (Tex. Civ. App.) 150 S. W. 239, 252); that such a writ should always be granted “with great caution and only when the necessity is great” (Joyce on Inj. S 97-al.

Do the facts of the instant case bring it within this well-established doctrine? We think so. The only reasonable excuse that could have been offered by appellant for its refusal to receive and transport the oil tendered by appellee was that the preliminary proof required by Commission Order No. 120 was not furnished when the oil was tendered ; however, -as this impediment was entirely removed by the subsequent order of the commission, there remained no reasonable excuse justifying appellant’s further refusal. Appellant had no private interest involved, except to safeguard itself against prosecution and penalization for a supposed violation of the statute and orders of the railroad commission in transporting the oil, but after the commission waived the application of Order No. 120, specifically authorizing pipe line carriers to transport this particular oil, appellant was without excuse for its refusal, for under the circumstances it would be unreasonable to assume that a prosecution for transporting the oil would ensue, or that a conviction could be sustained. See State v. Sugarland Railway Co. (Tex. Civ. App.) 163 S. W. 1047.

One of the questions that confronted the trial court was the balancing of equities between the parties. The rule is stated in 13 Standard Enc. of Pro. pp. 128, 130, that: “When the questions to be ultimately decided are serious and doubtful, the legal discretion of the judge should be influenced largely by the balance of equities between the parties. The court should ascertain which of them will suffer the greater detriment or inconvenience by its action. In fact, • the balance of convenience or hardship is ordinarily a factor of controlling importance in cases of substantial doubt existing at the time of the granting or refusing of the preliminary injunction. * * * ”

In the case of Jeff Chaison, etc., Co. v. McFaddin, 56 Tex. Civ. App. 611, 121 S. W. 716, 721, the Court of Civil Appeals, having occasion to discuss this principle, used the following language in point: “The damages to appellants from the granting of the temporary injunction, if wrongfully granted, are trivial and easily estimated and compensated. We quote from Joyce on Injunctions (volume 1, § 25): ‘Where the rights of the parties are at all doubtful, the court applied to for an injunction should look at the balance of convenience, and act upon the consideration of the comparative inconvenience which may arise from granting or withholding the injunction. In this connection it is said in a recent case [Harriman v. Northern Securities Co. (C. C.) 132 P. 464, 475]: “In a doubtful case, where the granting of the injunction would, on the assumption that the defendant ultimately will prevail, cause greater detriment to him than would, on the contrary assumption, be suffered by the complainant, through its refusal, the injunction usually should be denied. But where, in a doubtful case, the denial of the injunction would, on the assumption that the complainant ultimately will prevail, result in greater detriment to him than would, on the contrary assumption, be sustained by the defendant through its allowance, the injunction usually should be granted. The balance of convenience or hardship ordinarily is a factor of controlling importance in cases of substantial doubt existing at the time of granting or refusing the preliminary injunction. Such a doubt may relate either to the facts or to the law of the case, or to both.” ’ And it has been held in this connection that damage to others, not parties to the suit, may be considered in a doubtful case.”

Applying this doctrine to the facts of the instant ease, it is not difficult to realize that if appellee is not to receive the protection afforded by the mandatory writ, it will suffer irreparable injury, for which no adequate relief can be found ; on the other hand, the granting of the writ does not place appellant in jeopardy of prosecution or of oou-viction, does not visit upon it any loss whatever ; on the contrary, by obedience to its mandate appellant will reap a distinct benefit in the collection of charges for transporting the oil.

We are of opinion that the trial court did not err in granting the writ, hence its judgment is in all things affirmed. Mr. Chief Justice JONES dissents.

Affirmed.

JONES, O. J.

(dissenting).

Unable to agree to the conclusion of the majority of this court, that the trial court was warranted in decreeing to appellee full, complete, and final relief, as to the subject-matter of this appeal, on an ex parte hearing of which appellant had neither notice nor knowledge, I herewith enter my dissent and the reasons therefor.

It is not questioned that conditions may arise in which there may be presented to the trial court such an immediate and pressing necessity for relief, that would warrant the giving of full relief to the complaining party by means of a temporary injunction, either prohibitive or mandatory, even where the relief granted may be in fact all the relief that could he decreed on a trial of the case upon its merits. The authorities cited and commented upon in the majority opinion sustain such view. This court, speaking through the late Associate Justice Talbot, in the case of Oartwright v. Warren, 177 S. W. 197, 199, stated the general rule in this respect as follows : “An application for a preliminary mandatory injunction is required to show a clear right and a case of necessity or- extreme hardship, and the court will seldom grant a mandatory injunction pendente lite unless the plaintiff’s right is so clear that the denial of the right must be either captious or unconscionable.” 32 G. J. p. 25 lays down the rule in reference to preliminary mandatory injunctions in this language: “The invasion of the right must be material and substantial; the right of complainant must be clear and unmistakable on the law and the facts; and there must exist an urgent and paramount necessity fo'r the issuing of the writ in order to prevent extreme or other serious damage which would ensue from withholding it. If the issuance on preliminary application of an injunction mandatory in nature will have the effect of granting to the complainant all the relief that he could obtain upon a final hearing, the application should be refused except in very rare cases, and then only where complainant’s right to the relief is clear and certain.”

Do the facts alleged in appellee’s petition bring appellee within the rule above announced ? These facts show that appellee had purchased 65,000 barrels of crude petroleum oil, had stored it in tanks from which shipment could be made over appellant’s pipe line to the destination named by appellee; that shipment of this oil was tendered to' appellant on August 11, 1932, and declined for t.he reason that appellee had not complied with Railroad Commission Order No. 120, designed to show that the oil’ had been legally produced and legally acquired by appellee; that ap-pellee claimed it was impossible for it to comply with said Order No. 120, for it had purchased the oil prior to the passage of such order by the railroad commission, and could not now compel the owner of the oil to furnish the required information; that it later secured a waiver' of such order by the railroad commission as to the 65,000 barrels of oil, and again on August 26th tendered the oil to appellant for shipment; that shipment was again refused by appellant, in effect, on the ground that the waiver of such order by the railroad commission did not permit appellant to ship the oil, unless proof similar to that required by Order No. 120, as to the production and salé of this oil, was tendered to the pipe line company. Appellee refused to accede to this request and refused to make any proof as to the legal production of the oil, other than its statement that it bought the oil in good faith and honestly believed it to have been legally produced. Appellee also alleged, and it must be considered as a fact in this case, that its oil was subject to deterioration and to loss by evaporation in the storage tanks, that it had contracted to sell 25,000 barrels of the oil for August delivery, and would suffer damage by reason thereof, if an immediate shipment of the oil was not had.

The above facts constitute all the showing made by appellee as to its having a clear right to have the oil received and shipped in. its pipe line by appellant, and also as to the extreme hardship it would suffer in the three or four days’ time necessary to notify appellant, to appear and answer the application. This writer does not believe that the petition discloses any such condition as, under the rule of law above announced, or the rule of law stated by any decision, cited and relied upon in the majority opinion, warranted the drastic relief granted by the trial court.

The production, purchase, and transportation of petroleum oil is controlled by statute in this state, and the duty rests upon every producer of oil, on every purchaser of oil, and on the owner of every pipe line which transports oil, to comply with the law in this respect. The majority opinion apparently proceeds upon the theory that Railroad Commission Order No. 120 was the only impediment to the immediate shipment of the oil, and when' this impediment was removed on August 25, 1932, by the waiver order of the railroad commission, no reason existed for a refusal to accept the 65,000 barrels for shipment. Such opinion overlooks the act of the First Called Session of the 42d Legislature, enacted to conserve the natural resources of this state, to prevent waste, and to authorize the proration of oil producing wells in the various oil fields of this state. One section of this act is chapter 26, page 46, of the General Laws of the First Called Session of the 42d Legislature, which became effective August 12, 1931 '(Vernon’s Ann. Civ. St. art. 6049c, § 14), prior to the production of this oil.

A section of this chapter provides: “The purchase, transportation or handling of crude petroleum oil or natural gas produced from any property in excess of the amount allowed by any statute or any rule, regulation or order of the [Railroad] Commission is hereby prohibited, and the Commission shall have power to enjoin any violation of this section.” (section 14)

Chapter 28, p. 58, of the same Session of the 42d Legislature (Vernon’s Ann. Civ. St. art. 6049a, § 1 et seq.), is also a part of the law, and section 8c of such chapter (Vernon’s Ann. Civ. St. art. 6049a, § 8c) reads as follows : “No person, association of persons or corporation, whether a common carrier or otherwise, shall be permitted to transport crude oil or petroleum in this State, unless such crude oil or petroleum has been produced * * ⅜ or purchased in accordance with the laws of the State of Texas * ⅜ ⅞ or any order, rule or regulation of the Railroad Commission made in pursuance thereof.”

“Sec. 9. The Railroad Commission of Texas shall have authority to make rules and regulations for the enforcement of the provisions of this Act” (Vernon’s Ann. Civ. St. art. 6049a, § 9).

Section 11 of such chapter provides heavy penalties for the violation of any provision of this act. Section 11a provides penalties by way of forfeiture of charter of any domestic corporation violating such law.

In so far as this legislative enactment ap-' plies to appellant, it is prohibited from transporting any crude petroleum oil unless such oil was produced within the legally allowable production under the proration regulation of this state. In so far as such enactment applies to appellee, it is prohibited from purchasing crude petroleum oil unless the oil was likewise legally produced. Railroad Commission Order No. 120 added nothing to, nor took anything from, the effectiveness of this enactment. Such order manifestly was entered in obedience to section 9, above quoted, giving to the commission authority to make rules and regulations for the enforcement of the provisions of such enactment. Such order only prescribed the manner in which proof could be made that the petroleum oil was produced in accordance with the laws of this state, or a rule or regulation of the railroad commission in pursuance of such laws. The binding effect of this enactment on purchasers or shippers of crude petroleum oil is not conditioned on the railroad commission’s having first promulgated rules or regulations for its enforcement. When the commission waived Order No. 120, it merely waived the manner of proof, such order required, to establish the fact that the oil had been legally produced or legally purchased.

When appellee accepted delivery of the 65,-000 barrels of oil on its contract of purchase, it did so charged with the knowledge that the duty rested on it to require the seller to show that the oil had been legally produced. When appellee tendered the oil to appellant for transportation, it did so with the knowledge that such oil could not be accepted for transportation unless it made a proper showing that the oil had been legally produced and legally purchased. When, on August 26, 1932, appellant declined to accept the oil for shipment without evidence that same had been legally produced and legally purchased, it was doing no more than it was required to do under the provisions of this solemn legal enactment. If appellee is unable to make satisfactory proof as to the legality of the production of the oil tendered for shipment, it is solely to blame, for it was under the legal duty to require its seller to furnish such proof at the time it accepted the oil on its contract of purchase; and that notwithstanding Railroad Commission Order No. 120 had not been promulgated when the delivery of the oil was accepted.

This is not a case in which a court is authorized to balance the equities of the interested parties; for, until appellee complies with the law, by showing that the oil was legally produced and legally purchased, it can make no complaint that it is suffering damages by reason of the delay in shipment.

It necessarily follows, from what has been said, that, in the opinion of the writer, when the allegations in appellee’s petition for a mandatory injunction are read in the light of the above-quoted statutes, there is no case made which would permit a court of equity to grant the relief awarded in this case, and that the trial court erred in entering the judgment


author: PLY, C. J.

text:
    PEDIGO WEBER SHOE CO. v. HACHAR.
    No. 8898.
    Court of Civil Appeals of Texas. San Antonio.
    Oct. 26, 1932.
    H. G. Dickinson, of Laredo, for plaintiff in error.
    Edward A. Mullally, of Laredo, for defendant in error.
   PLY, C. J.

This case originated in a court of a justice of the peace, where plaintiff in error, hereinafter designated as plaintiff, sued defendant in error, herein called defendant, on an account for $142.20. Plaintiff failed to recover in the justice’s court, and the cause was appealed to the district court, where it was tried by jury and a verdict was instructed for defendant.

On May 4, 1928, defendant ordered from plaintiff thirty pairs of shoes, and on May 11, one week later, sought to countermand the order through a telegram. Plaintiff refused to recognize the countermand of the order and afterwards shipped the shoes to defendant, who refused to accept them. No complaint was made as to material, quality, or quantity of the shoes. The only reason given for the cancellation of the order was that the market was overstocked with such shoes which were being sold at a less price than defendant could sell the shoes ordered from plaintiff. It was stipulated in the order for the shoes that no countermand could be made after the order had been approved and the material cut for manufacturing the shoes. They were promptly shipped to defendant. He refused to accept them from the express company. There is no testimony showing that plaintiff reclaimed the shoes and regained possession of them after they had been refused by defendant.

The court fo.und in his instructions to the jury, that “it appears from the pleading and the undisputed evidence that they (the shoes) were to be manufactured to fill the order, and that on the 11th day of May the defendant, by telegram, countermanded the order and at the time of the receipt thereof the material for the shoes had been cut but the manufacture had not been completed.” The judgment of the trial judge seems to be based on the assumption that plaintiff took possession of the shoes after their rejection by defendant" and is holding the shoes and suing for their value. The testimony does not bear out the assumption. The testimony left the shoes in the possession of the carrier in Laredo, and if plaintiff rescued possession of the shoes defendant should have proved that fact. He did not prove it. Upon what the court assumed that plaintiff had the property and desired also to recover the full value of it is not disclosed by the record. No such defense was pleaded by defendant. The burden of proof to show the facts assumed by the trial court existed rested on defendant.

According to the pleadings and evidence there were but two issues: Did defendant make the order; and, if so, did he cancel it before plaintiff had executed the order in whole or in part?

The judgment is reversed, and the cause remanded.


author: GRAVES, J.

text:
    LLOYD v. CHRISTIAN.
    No. 9769.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 28, 1932.

      L. A. Kottwitz and A. B. Wilson, both of Houston, for appellant.
   GRAVES, J.

In this cause appellant, D. C. Lloyd, challenges a judgment of the court below against himself and his mother, Mrs. N. E. Lloyd, in favor of the appellee for the cancellation of a deed from the mother to the son for four 40-acre tracts of land in Harris county, dated November 26, 1929, upon a finding that the conveyance had been made with a view and intent to hinder, delay, and defraud the grantor’s creditors — a money recovery in the sum of $2,420.45 against Mrs. Lloyd alone upon her unsecured individual note to the appellee having been also awarded, and an attachment writ against the land having been sued out pending the trial.

Trial was before the court without a jury; findings of fact and law were filed, in which it was recited that the conveyance of the land, aggregating 160 acres, had been made for the stated consideration of $20,010, of which $10 was to be in cash, the remaining $20,000 being evidenced by a promissory note from the son to his mother, due two years after date; that the conveyance was a violation of the statute, R. S. article 3996, for the reason already stated, Mrs. Lloyd being insolvent at the time, having no other property in the state sufficient to pay her debts, owing the appellee the debt sued upon, as well as other parties at the time, which facts the appellant then knew; that no part of the $20,000 note had ever been paid, nor any ability upon the maker’s part to pay it within the two years being shown, and, further, that both in 1919 and 1929 Mrs. Lloyd had signed and acknowledged, in connection with loans upon the same property from the Federal Land Bank and the Farm Loan Association in Pasadena, Tex., statements to the effect that the land so conveyed to her son did not on those dates constitute her homestead, the latter of these declarations having been made only a few days before the institution of this suit.

To these summarized findings there were added conclusions of law, finding Mrs. LLoyd to be indebted to the appellee in the amount of the money recovery stated, together with these two concluding paragraphs:

“The court further finds as a Conclusion of Law that the conveyance of Mrs. N. E. Lloyd to D. C. Lloyd was fraudulent and made with the view and intent to hinder, delay and defraud her creditors and among others this Plaintiff and for said reason should be cancelled, set aside, declared void and held for naught.
“The court further finds as a Conclusion of Law that at the date of the institution of this suit, tracts No. 96, 97, 98 and 99, as set forth in the Findings of Fact herein, did not constitute the homestead of Mrs. N. E. Lloyd.”

On the appeal the judgment so rendered, as well as the findings of both fact and law upon which it had been grounded, are attacked on the ground that they were without evidence to support them, in that the undisputed testimony shows that the property thereby conveyed at the date of the deed constituted the homestead of Mrs. Lloyd and her family, by reason of which she had the right to so convey it, and that the transaction in the circumstances could not be deemed fraudulent in law.

After a careful examination of the record, we conclude this position must be sustained.

The four tracts of land were not in a town or city, being located nearby but not in the small village of Alief in Harris county, were contiguous, were alleged to constitute the homestead, within the meaning of R. S. articles 3832, 3833, of Mrs. Lloyd and her family, which at the date of the conveyance in question consisted of herself (she being a widow) and one minor child, and the undisputed proof conclusively showed that they had all been used, occupied, cultivated, and enjoyed as such homestead continuously for 20 years or more prior to and at the time of her deed, with the exception of about one year along about 1919 or 1920, when Mrs. Lloyd temporarily sojourned in the city of Houston for the purpose of having her children attend school there; indeed, the evidence is so conclusive and overwhelming to this effect that it is not deemed essential that it be even summarized here, neighbors, old friends, and other witnesses, who had direct and personal knowledge of such facts, appearing and fully testifying to them.

It seems the finding of fact to the contrary, there being no other support of it, was grounded upon the previously-mentioned recitation in the deeds of trust from Mrs. Lloyd to tie Federal Land Bank and tie Farm Loan Association in Pasadena to tie effect tiat tiis land iad not constituted her iomestead in tie years 1919 and 1929; aside from tie fact tiat tie agent of tiese institutions who negotiated and. acted for tiem in tiese transactions with Mrs. Uoyd undis-putedly testified on tiis trial tiat sie at tie time neitier read tie instruments nor was told tiat suci statements were in tiem, iaving merely taken iis word' for wiat tiey were wien sie executed tiem, suci declarations siould neitier iave been considered by tie court at all, nor given any force in determining wietier or not 'tie property constituted tie family iomestead, in tie face of its actual use at tiat very time and long prior tiereto for suci purpose, since, by tie long-settled rule of law in tiis state, tiey could not ciange tie iomestead ciaracter tiereby fastened upon it. Medlenka v. Downing, 59 Tex. 32-39; Jacobs, Bernheim & Co. v. Hawkins, 63 Tex. 1, 2; Ruhl v. Kauffman & Runge, 65 Tex. 723-734; Radford & Wood v. Lyon, 65 Tex. 471-475; Equitable Mortgage Co. v. Norton, 71 Tex. 683-689, 10 S. W. 301; Texas Land & Loan Co. v. Blalock, 76 Tex. 85-89, 13 S. W. 12; Bayless v. Guthrie (Tex. Com. App.) 235 S. W. 843-846; Wooten v. Jones (Tex. Civ. App.) 286 S. W. 680-687.

Wiat migit be tie effect of tiose recitations in a direct action on tie contracts containing tiem between Mrs. Lloyd and tiose federal organizations is, of course, not iere involved.

As between these litigants, under the uncontroverted and conclusive proof tiat sie was then not only tie head of a family within tie purview of both our fundamental and statutory law, but also in actual occupancy and use of tie property as the iomestead thereof, its exemption to tiem was complete, hence the appellee, as a mere unsecured creditor, could acquire no right against it, and its voluntary sale could in no sense constitute a fraud upon ier. Cox v. Shropshire, 25 Tex. 113; Conner v. Hawkins, 66 Tex. 639, 2 S. W. 520; Hargadene v. Whitfield, 71 Tex. 482, 9 S. W. 475; Zapp v. Strohmeyer, 75 Tex; 638, 13 S. W. 9; Speer & Goodnight v. Sykes, 102 Tex. 451, 119 S. W. 86, 132 Am. St. Rep. 896; Uvalde Paving Co. v. Kennedy (Tex. Civ. App.) 22 S.W.(2d) 1091.

Neitier, in tie light of other evidence, do tie deed itself, which also conveyed six unincumbered lots of the aggregate value of $150, in addition to tie 160-acre homestead, and tie $20,000 negotiable promissory note given as the consideration thereof intrinsically constitute any evidence of fraud, nor of an intent to perpetrate it; tie appel-lee and Mrs. Lloyd’s daughter, to tie latter of whom she owed some $7,500 were ier only unsecured creditors; a group of secured creditors, including tie federal loan concerns referred to, tie First National Bank of Houston, and others, held liens against tie iome-stead tracts amounting to only about $365 less than tie full value of all tie land conveyed, and this total incumbrance was to be deducted from tie amount of tie note.

It was, in tiese circumstances, under the equally well-settled rule with us, tie absolute right of tie mother to convey all of ier property (inclusive of tie homestead and tie lots) to tie son, accept iis negotiable promissory note in payment therefor, and to assign and deliver it to ier daughter in cancellation of ier indebtedness to tie latter, even if that did constitute a preference of tie daughter over tie appellee, there being further no evidence of any probative force either that tie mother as suci grantor intended in so making tie conveyance to hinder, delay, or defraud ier creditors, or that tie son in accepting it, knew of such an intent, or siould have known of it as he was then circumstanced, iad he made a reasonable investigation. Lewy v. Fischl, 65 Tex. 311; Ellis v. Valentine, 65 Tex. 532; Tillman v. Heller, 78 Tex. 597, 14 S. W. 700, 11 L. R. A. 628, 22 Am. St. Rep. 77; LePage v. Slade, 79 Tex. 473, 15 S. W. 496; Cross v. McKinley, 81 Tex. 332, 16 S. W. 1023; Sanger Bros. v. Colbert, 84 Tex. 668, 19 S. W. 863; Adams v. Williams, 112 Tex. 469, 248 S. W. 673; Wiliams et al. v. Laird (Tex. Civ. App.) 32 S. W.(2d) 502; Ford v. Honse (Tex. Civ. App.) 225 S. W. 860.

Further discussion is deemed unnecessary, since tiese conclusions determine tie merits of the appeal; tiey require tiat tie judgment be reversed, and the cause here rendered in appellant’s favor. It will be so ordered.

Reversed and rendered.


text:
    UNIVERSAL AUTOMOBILE INS. CO. v. HALLINAN.
    No. 8870.
    Court of Civil Appeals of Texas. San Antonio.
    Oct. 12, 1932.
    Rehearing Denied Nov. 16, 1932.

      Eskridge & Groce, of San Antonio, for plaintiff in error.
    Hull & Oliver, of San Antonio, for defendant in error.
   PLY, C. J.

This cause was instituted by defendant in error to recover insurance on a Cadillac sedan in the sum of $1,000. Plaintiff in error admitted the contract of insurance but alleged that the policy was obtained by fraud and misrepresentation, and pleaded á tender of all premiums paid by the insured. The cause was tried by the court, without a 'jury, and judgment was rendered in favor of defendant in error for the sum of $1,000.

The court found the following facts which are adopted by this court:

“Plaintiff, N. T. Hallinan, on the 24th day of April, A. D. 1930, was approached by an agent of the defendant for the purpose of selling the said N. T. Hallinan a fire and theft, etc., policy of insurance on his automobile. The said agent at said time solicited said insurance from the said N. T. Hallinan, and at that time the said agent was informed that a former theft insurance policy issued to plaintiff had been canceled on the said automobile, he being informed by the said N. T. Hallinan at said time. The said agent at that time inspected and looked over the said automobile which was there at the place where the solicitation was made. After inspecting and looking over said automobile the said agent sold plaintiff, N. T. Hallinan, the fire and theft insurance policy sued upon herein. At the time the policy of-insurance was sold, the said N. T. Hallinan made no representations to said agent of the Universal Automobile Insurance Company.
“In a day or two after the above transaction, an agent of the defendant, insurance company, delivered said insurance policy to plaintiff and received, payment therefor, and at that time the said automobile was standing in front of the house and an agent again saw same, and was requested by plaintiff, Halli-nan, to again inspect or look over same.
“Hallinan paid the following for the Cadillac automobile: $500 cash, and one Nash sedan, 192S model, on the 15th day of February, A. D. 1930.
“Said Cadillac automobile which was insured was manufactured during late 1927 and 1928, a 314, 1928 model. After said Hallinan purchased said Cadillac automobile he put new tires on same and did considerable repairs. The actual cash value of the Cadillac automobile in question at the time it was stolen, and it was stolen, as alleged and never returned, was $1,200.
“The agent of the insurance company relied upon his own investigation at the time he sold plaintiff, Hallinan, the fire and theft policy as to the value of the said automobile, and at said time the said agent knew and was informed of the former insurance having been canceled.”

The policy was obtained through the suggestion and aid of O. B. Krezdorn, who was not a regular agent of the insurance company, but who acted for it in this instance and was paid the accustomed percentage paid to agents. Krezdorn was not a broker and did not deal with the insured as a broker, but as the agent of the insurance company and the transaction for the purchase of the policy was consummated through him. H.e completed all the negotiations and was paid for his services by the insurance company. His agency was fully ratified and his services accepted and paid for. There was no evidence of fraud on the part of the agent or any collusion with insured. The knowledge of Krezdorn was the knowledge of the insurance company. Under the facts of this case not only did Krezdorn examine the car, but the actual agent of the insurance company, W. S. Grothaus, when he delivered the policy and collected the premiums, saw the car and had an opportunity to examine it.

Grothaus testified: “A friend of mine —Mr. O. B. Krezdorn — phoned me and said that Mr. Hallinan, who had met him at a garage some place, and he wanted some fire and theft insurance, or some kind of insurance on an automobile, which he doesn’t write, and suggested that I get in touch with Mr. Hallinan. I got his address on Wyoming Street, 827 I think. So I got in touch with Mr. Hallinan on Wednesday, I think it was, April 24th, — that is the date the policy was written, — I went out to his house and talked to Mr. Hallinan and got the information necessary to write the policy, and came back to the office and wrote it or had it written rather by the policy clerk, and, as I remember, took it' out the next day and he gave me his check for it and I left the policy with him.”

This testimony shows that the regular agent of the company negotiated for and accepted pay for the insurance and delivered the policy. Krezdorn could he eliminated from the transaction, as he practically was, by Grothaus, and the insurance company is fully bound. The insured made no written representations as to the car and none was required of him.

The car was stolen and the amount of the insurance was not paid. The insured swore that the Cadillac car was not issued according to the year but according to a series, and that a car made in 1927 was in the same series as 1928, and the car would be spoken of as the issuance of either of those years. The insured denied making representations to Grothaus. Representations were referred to in the policy, the falsity of which would invalidate it, but it is not stated that any representations were made either orally or in writing. Grothaus was satisfied with what was told him by Krezdorn, and although he had a chance to examine the car and ascertain all the facts about it he did not do so. No representations were made to Grothaus by the insured, and if he had any representations they came from Krezdorn, upon whom he relied. He acted for and was paid by the insurance company.

The case of Automobile Ins. Co. v. Buie, 252 S. W. 295, 297, decided by this court was correct under the facts of that case, which are clearly distinguishable from the facts in this case. In the case cited the facts showed that the broker, who obtained the insurance for Buie was his agent and did not act for the company. Krezdorn was not the agent of the insured, and merely carried information to the company. Grothaus acted for the company with a knowledge of the facts. Krezdorn was an agent under article 5056, Rev. St. Under the terms of that statute the knowledge of Krezdorn was the knowledge of this company.

The judgment is affirmed.