117 S.W. 476 | Tex. App. | 1909
During her lifetime Mrs. E. S. Sloan, appellant's testator, executed and delivered her promissory note in writing, payable to the order of H. C. Cates, for $593.46, due eight months after date, with interest and attorney's fees. Before maturity the note was, for a valuable consideration, transferred by Cates to the appellee bank. Cates was, at the time of taking the note, the agent of the Mutual Life Insurance Company of New York, and the note was given as part of a premium to be paid in consideration of the issuance of a certain policy of insurance by the insurance company upon the life of Mrs. Sloan. Mrs. Sloan was at the time a woman of advanced age, and the policy for which her application had been taken provided for annuities to be paid to each of her three children during their lives. The remainder of the premium of which this note was a part had been paid by Mrs. Sloan to Cates in cash, and amounted to something over $1,800. The policy was never delivered to Mrs. Sloan because of the rejection of her application by the insurance company. When the note was presented payment was refused, and upon such refusal suit was instituted by the appellee against both Mrs. Sloan and the insurance company. The latter was made a party upon the allegation that it had entered into a contract with Mrs. Sloan by which it agreed to indemnify her against any liability by reason of the execution of the note, or any judgment that might be rendered against her in any suit thereon. Before a final judgment was reached Mrs. Sloan died, and T. P. Young, the executor of her will, was made a party defendant. Thereafter upon a trial before a jury a verdict and judgment for the full amount of the note, together with interest and ten percent attorney's fees were rendered against appellant Young, a verdict in favor of the insurance company having been directed by the court. From that judgment the executor prosecutes this appeal.
One of the defenses urged in this suit was that the note was without consideration, and that the bank, through its officials, had notice of that defect. Inasmuch as this question involves an issue of fact which may again arise in another trial, and in view of the fact that the judgment must be reversed upon other grounds, we do not pass upon the assignment raising that question, preferring to rest our decision of the case upon other errors presented.
Special objection is urged by the appellant to so much of the judgment as warrants a recovery for ten percent attorneys fees in favor of the appellee. It is contended that neither the pleadings nor the evidence justified such a recovery, and that the court committed error in instructing the jury that in the event they found for the plaintiff on the note to also find for ten percent attorney's fees. That portion of the note providing for attorney's fees, or collection fees as there stated, is as follows: "In the event default is made in the payment of this note at maturity, and it is placed in the hands of an attorney for collection, or suit is brought on the same, then __________ agree that an additional amount of ten percent on the principal and interest of this note shall be added to the same as collection fees." The allegations *208
of the petition pertinent to this part of the note are as follows: "The full amount of said note of $593.46, with six percent interest from November 3, 1906, together with ten percent attorney's fees on the amount so obtained, is now due and is unpaid. Plaintiffs have been compelled to place said note in the hands of F. H. Prendergast, an attorney, for collection, and he has been compelled to bring suit to collect the same. Therefore the said ten percent as collection fees has accrued and is now due. Wherefore plaintiffs bring this suit and pray for judgment for $593.46, with six percent, from November 3, 1906, and ten percent on the whole amount as collection fees, against the defendant Elizabeth S. Sloan." The record does not disclose any evidence tending to show that the appellee had paid or had contracted to pay any sum as fees or expenses for collecting the note, or any fee for the employment of an attorney to prosecute this suit. The court charged the jury: "If you find for the plaintiff the amount of your verdict will be the principal and interest of said note to date and ten percent attorney's fees on same." The principles of law applicable to the issues here presented were fully discussed by this court in the case of Elmore v. Rugely,
In Simmons v. Terrell,
Morrill v. Hoyt,
Kendall v. Page,
Brown v. Perrill,
Johnson v. Blanks,
Stansell v. Cleveland,
In none of these cases do we find the direct question involved which is here under consideration, unless it may have been in the case last mentioned. It is the general practice of appellate courts to confine their attention, not only to the particular errors assigned, but to the reasons urged in the accompanying propositions and argument, and if these are considered untenable, and no fundamental error is apparent, the assignment will be overruled. In view of that practice the mere failure of the court to discover and point out other objections to the ruling brought under consideration should not be construed as approving it in all other respects. The real value of former adjudications as precedents is usually confined to the issue directly involved in the enunciation of the legal principles by which it is determined. If the doctrine that stipulations usually inserted in commercial obligations and other contracts are to be construed as liquidated damages inuring to the benefit of the holder upon the happening of the contingency mentioned finds any support in the cases heretofore decided by the Supreme Court of this State, it must rest upon an inference drawn from the failure to hold otherwise. That court, so far as we have been able to ascertain, has never expressly so held. It is only its failure to hold to the contrary which can furnish any foundation for the contention that it recognizes the doctrine in this State. But, as we shall see later, there are some significant expressions which indicate an opposite view. However valuable may be precedents in the determination of issues, conclusions are always more satisfactory when they can be based upon principle as well. The classification of the usual stipulations to pay attorney's fees as contracts of indemnity is, we think, decisive of the question here involved. This construction is not only supported by a sound legal principle, but is in accord with a large number of authorities. Laning v. Iron City Nat'l Bank,
In the case first above cited the Supreme Court, in replying to the question, "Did the trial court err in directing the jury to allow the plaintiff ten percent additional on the principal and interest due on the note as attorney's fees?" used this language: "Attorney's fees, whether expressed as such or as costs of collection, are regarded as costs of the suit, and agreements to pay them are sustained by the courts upon that ground. The legitimate purpose of such a promise is to indemnify the payee or holder of the note for expenses which he may incur by default of the maker which would not be allowed to him by law. Under the terms of the note in this case the maker agreed to pay attorney's fees in case it should be placed in the hands of an attorney for collection. Under that agreement he would become liable to pay such costs if his default in making payment, or some other act of his, made it necessary for the holder to place it in the hands of an attorney for collection." In this case the court also referred to the case of Stansill v. Cleveland, supra, in which it said the plaintiff was entitled to recover attorney's fees under circumstances somewhat similar to the case then pending, and said: "We doubt the correctness of the decision in that case, unless it be put upon the ground that the pleadings of the defendants amounted to a confession of their indebtedness not only for the principal and interest of the debt sued for, but for the attorney fees also."
In Maddox v. Craig,
However, we should not feel inclined to reverse and remand this case for this error alone, inasmuch as it might be cured by the appellee's filing a remittitur of the attorney's fees should it feel inclined to do so. But there is another error which we think equally serious, and which will require that the case be remanded. The appellee was permitted, over the objection of the appellant, to show by the witness Cary Abney that there was an agreement between Mrs. Sloan and the insurance company by which she was to be protected, and the company was to pay any judgment that might be rendered against her in this suit; that the agreement was made with an agent of the company at the time he had paid her $1,838 in cash for money that she had formerly paid to Cates in connection with her application for insurance and in addition to the note here sued on; and that the company was to defend the suit for her, as it did not think the bank was an innocent purchaser. The pleading relied upon to support the relevancy of this testimony was that portion of the appellee's petition alleging such an agreement. Such pleading was the allegation of immaterial facts, and could form no basis for the admission of testimony wholly irrelevant to any issue in the case. The allegations did not show that the insurance company was a proper or a necessary party to this suit. Holloway v. Blumm,
In the case last cited the court said: "Indeed, the existence of the right of the defendant in all cases to implead other parties who might become liable to him as the result of a judgment against him regardless of other considerations had been expressly negatived." That was a suit in which an effort was made to bring in the indemnitors of the defendant in the suit and make them parties to the proceedings. This right to make them such parties was denied.
While the demurrers interposed in this case by the insurance company to the pleadings of the plaintiff should have been sustained, the error arising from the failure to do so was, as to the insurance company, rendered harmless by the instructed verdict in its favor; but the erroneous retention of irrelevant matter in the petition could not justify the admission of the irrelevant testimony to support it. This testimony, we think, was calculated to, and probably did, operate prejudicially to the appellant. It in effect informed the jury that there was behind the defendant in the suit a large foreign corporation whose agent had perpetrated the fraud which brought about the litigation, and that the corporation would protect Mrs. Sloan's estate against whatever judgment might be rendered against her in this suit. That the jury was influenced by that consideration is rendered exceedingly probable by the question which they asked the court after their retirement and before reaching a verdict. That question was: "If we find a verdict in favor of the plaintiff, does that prevent the Sloan estate from proceeding against the insurance company?" In reply to this the court instructed the jury, "that the matters for adjustment, if any, between Mrs. Sloan's estate and the insurance company, are not before you, but your verdict will be made under the evidence and the *214 law as set forth in the charge heretofore given you." It is true that this instruction on the part of the court in one sense informed the jury that this issue was not involved in the considerations which should engage their attention, but they were left to surmise why they could not rest their verdict upon an issue to support which the court had admitted the testimony of Abney, and which testimony could have no other relevancy. They had a right to assume, even after the last instruction of the court, that they could consider testimony which the court had admitted in determining the only issue it would tend to prove, that the defendant in the suit was indemnified by the insurance company against any verdict which they might find against him. If their verdict was based in whole or in part upon such consideration, then it was improperly influenced.
The judgment is reversed and the cause remanded.
Reversed and remanded.