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or about December 2, 1914; and that Smith Smith did not learn of the falsity of any of and appellee were induced to surrender said the representations; that plaintiff, during policies by reason of false and fraudulent her husband's lifetime, did not learn of the representations of the appellant's agents. falsity of any of said representations; that The appellant admitted the issuance of the Smith was financially able to have paid the policies, but pleaded that the same were sur-second annual premium within the time stiprendered to it by appellee and her husband, ulated in the policies, and would have done for a valuable consideration, on or about so had he not entered into the contract for December 2, 1914, and canceled long prior to the surrender of the policies. the death of Smith. Appellant denied any fraud on its part in procuring the release and surrender of the policies, and in addition alleged that Smith had procured the issuance of said policies by willful, false, and fraudulent representations made in his application for the issuance thereof; also that the policies had lapsed by reason of failure to pay premiums.

In answer to the fourth special issue the jury found that A. L. Davis and C. B. Welliver, or one of them, on or about December 2, 1914, as an inducement to obtain the consent of Smith to surrender to defendant for cancellation the two policies of insurance, represented to Smith that in any suit brought by defendant for the cancellation of said policies the defendant could and would prove by Mrs. J. L. Long the alleged facts set out in the signed statement of said Mrs. Long, dated November 25, 1914. In answer to the fifth issue the jury found that such representation was false. In answer to issue No. 51⁄2 they found that such representation was material, and in answer to section (a) of issue No. 6 that Smith relied on the truth of such representations, and in answer to section (b) of such issue that Smith was induced thereby to surrender said policies.

Two sets of similar issues were also submitted; one relating to the statement of Dr. Baird, and the other to that of Dr. Small. The jury found that Davis and Welliver represented to Smith that defendant could and would prove by said persons the alleged facts set out in written statements signed by them respectively, and that such representation in each instance was true, and was material, and that the representation with reference to Dr. Small was relied on by Smith and he was induced thereby to surrender the policies. The questions whether Smith relied on the representation relating to Dr. Baird, and whether he was induced thereby to agree to surrender and cancel the policies, were not answered.

The jury also found that Smith was not acting as the agent of defendant in obtaining the policies from plaintiff at the time Smith, Davis, and Welliver were in El Paso; that plaintiff did not receive any of the money paid Smith by defendant as a consideration for the cancellation of the policies; that plaintiff, at the time she made the indorsement signed by her on said policies and forwarded same to her husband, intended thereby to surrender to defendant her interest and claim as beneficiary under said policies; that

Special issues Nos. 1, 2, 4, and 5, requested by defendant after the refusal of its peremptory instruction, were submitted, and by its answers thereto the jury said that Smith did not have, and had never had, consumption at the time he made application for the policies; that he had changed his place of residence on account of his health, or had been advised by a physician so to do, prior to November 24, 1913; that such representation was not material to the risk; that defendant would have filed suit for the cancellation of the policies before the expiration of the year from date of issuance thereof, if the policies had not been delivered to defendant, and by reason thereof did not file said suit. Judgment was entered for appellee for $12,925, being the amount of the policies, interest, penalty, and attorney's fees.

Smith made application for the insurance on November 24, 1913. In answer to the question in the application whether he had ever had any of certain named diseases, including consumption, or "any other serious disease," the only disease mentioned by him was "pneumonia in 1893." In answer to the question whether any physicians or surgeons had been employed or consulted for himself during the past two years, he said "No." He also gave a negative answer to the question whether he had ever changed residence or tried "a change of climate" on account of his health, or been advised to do so by a physician. He had consulted at least four physicians in San Antonio during the time mentioned in his application. He had a well-developed case of tuberculosis at the time he made the application, and had been informed of such condition. There is no escape from the conclusion that he deliberately concealed from the insurance company information which, if it had been furnished, would have resulted in the rejection of his application. He was a soliciting agent for a life insurance company in 1903, when he married, and continued in that business for many years, being finally appointed agency director and placed in charge of 27 states and Cuba. His career in the insurance business shows that he was fully conversant with the importance of the questions to which he returned false answers, and there is no escape from the proposition that he willfully and deliberately perpetrated such a fraud on appellant as would have entitled it to cancel the policies in a suit brought for that purpose.

The policies provide that they shall be incontestable after the first policy year except

policies, and stated that if he had listened to doctors at San Antonio and not gone to Galveston he would have been better off. Smith took the copies of the statements home with him, but took no steps with reference to such statements, and died on or about April 14, 1915.

Plaintiff alleged that Smith knew the statements were false, but relied on the al

The

resented to him that the persons whose statements were produced would testify to the facts stated therein, and that he believed such representations and was induced thereby to agree to a cancellation of the policies. Plaintiff made no issue with reference to the statement given by J. Frank Smith. testimony was undisputed that the statements of Dr. Small and Dr. Baird coincided with their testimony. In other words, they testified that the statements signed by them were true and correct, and the jury so found. Mrs. Long, in a half-hearted way, attempted

for nonpayment of premiums. During Octo- | written statements were shown Smith he deber or November, 1914, Mr. Davis, appellant's nied that they were true, but, according to general agent for Texas, received information Welliver's testimony, after the agreement leading him to believe that Smith's answers had been consummated admitted that he had were false. Upon his advice an investigation tuberculosis at the time he applied for the was made. The company received additional information indicating that the report received by Davis was true. Thereupon Mr. Welliver, its general attorney, came to Dallas and suggested that an interview be arranged with Smith to see whether he would agree to cancel the policies, or whether a suit for cancellation would be necessary. Smith had moved to New Mexico. Davis arranged a meeting with Smith at El Paso. At this meet-legation that Welliver and Davis falsely reping Welliver told Smith it was his intention to file suit to cancel the policies before the expiration of the first policy year, unless they were surrendered by cancellation. He told Smith they intended to repudiate the policies on several grounds: First, that he had tuberculosis at the time he took out the policies and knew it; second, he had consulted doctors within two years prior to taking out the policies, and, of course, knew that, too; third, he had changed his residence upon the advice of a physician; and, fourth, he had been associated with his wife, and that she had tuberculosis. The fourth ground was withdrawn after Smith exhibited a photograph of his wife. Welliver said: "I have enough here to show that you consulted doctors, and had tuberculosis and knew it." They told him they had evidence that he had She said she did not think this statement tuberculosis and that he had been treated by was true. Her testimony is so uncertain a Dallas physician. Welliver also testified that it ought not to be accepted as sufficient that he told Smith they had not had much to show that she did not make to the person time to look up evidence because the time who wrote her statement the sentence above was short, but had enough information to quoted. But she testified that as a matter justify it (presumably suit for rescission), of fact such knowledge as she had was deand that he had deceived them as to consult-rived from Mrs. Smith, and that Mrs. Smith ing doctors and having tuberculosis; also that they absolutely repudiated the policies and would file suit for rescission, and Welliver would come to San Antonio and Galveston and see if he could find any further evidence to support the evidence he already had. He showed Smith four written statements signed by persons living at Dallas.

Davis testified:

"I told him that we had evidence that he had tuberculosis at that time, and also that we had evidence that he had been treated by reputable physicians in Dallas for tuberculosis some two years prior to making application for insurance to our company, and also that Dr. T. W. Vardell and Dr. Whitfield Harrell had told me that he (Smith) had tuberculosis, and had been treated for this dread disease while he was living in Dallas, which I think was in the years of 1911 and 1912."

to repudiate one sentence contained in her statement. That sentence reads:

"While Mr. and Mrs. Smith lived at 3813 Ross avenue, Dr. Baird examined Mr. Smith and advised him to go to San Antonio, claiming Mr. Smith had tuberculosis."

told her:

"That Dr. Baird told her (Mrs. Smith) that on account of a slight rectal operation on Mr. led to lung trouble, he (the doctor) advised that Smith, which sometimes, though very seldom, Mr. Smith go to San Antonio until he gained a certain weight and she intimated that that was one of their reasons for moving."

In answer to another question, she again said that Mrs. Smith told her that one reason for moving to San Antonio was that Dr. Baird had recommended it.

No witness testified that Davis or Welliver, or either of them, told Smith that the persons who signed the statements would testify to the truth of the facts contained in such statements. They told Smith the grounds on which they would base the suit for cancellation. They put him in possesAfter Smith had considered the matter for sion of the information they had received, a day or two an agreement was reached and and furnished him copies of the four statereduced to writing whereby he surrendered ments mentioned in the petition. They rethe policies for cancellation in consideration ferred to their information as "the evidence of $500. He telephoned his wife and had they had," but that was a representation as her to indorse on the policies a release as to what persons had told them, and not a beneficiary and send same to him, whereupon representation concerning what the persons

a representation that Welliver and Davis, to surrender the policies. The statement of told Smith the persons mentioned would re- Dr. Baird, of which a copy was furnished spectively testify on a trial to the facts set him at the same time, read as follows: out in the statements signed by them, a meaning must be given the language of which it is not fairly susceptible. Fraud is not to be lightly inferred or established by surmise or conjecture. There is no evidence that any false representations were made by Davis or Welliver.

If there had been any testimony to the effect that Welliver and Davis represented to Smith that Mrs. Long, Dr. Baird, and Dr. Small would testify in the suit for cancellation to the facts set out in their signed statements, under the facts of this case, such representation would have been a mere expression of opinion. There is not a particle of testimony tending to show that Welliver or Davis led Smith to believe they had ever interviewed either of said persons. The signatures were witnessed by other persons, and furnished no inference that the statements had been obtained in person by Welliver or Davis. He had just as good an opportunity to determine what the persons would probably testify to as Welliver and Davis had. He was furnished copies of the statements on which they based their opinion; no artifice or fraud was practiced to prevent him from making such investigation as he deemed proper and forming his own judgment. Under such circumstances, the statement of what certain persons would do in the future furnishes no basis for a claim of fraud.

The particular portion of Mrs. Long's statement repudiated by her is that wherein she said in effect that Dr. Baird claimed Smith had tuberculosis. Smith knew that Mrs. Long was not present at any interview between himself and Dr. Baird, and that she spoke from hearsay in stating that Dr. Baird claimed Mr. Smith had tuberculosis and advised him to go to San Antonio. She could not testify to such facts of her own knowledge and Smith knew it, and knew he could prove by Dr. Baird, his wife, and himself that what she said was hearsay. The instrument contained no statement from which he could infer that she claimed to have personal knowledge of the facts stated with reference to such matter, and it contained other statements which he knew to be hearsay. So it is apparent that, after we assume that Smith was told Mrs. Long would testify to all the facts contained in the instrument signed by her, he assumed that Davis and Welliver meant she would testify that either Baird, Mrs. Smith, or Smith had told her these mat ters, and that he was misled into so believing she would so testify and induced thereby 203 S.W.-26

"This is to certify that about three and a half years ago I examined Mr. R. A. Smith of Dallas, and thought it best for him to change his place of residence and so advised. He had a cough, slight fever, and a slight hemorrhage from his lung at the time of my visit."

He knew that if Dr. Baird testified in accordance with such statement the testimony would not be hearsay, and, if believed, would show that he had answered falsely a question contained in his application with reference to change of residence. On this important point at least Mrs. Long's hearsay testimony was in accord with her signed statement. Smith also knew that Dr. Baird's statement that he had a cough, slight fever, and a slight hemorrhage from his lung, if testified to, would tend strongly to support the contention that he had tuberculosis. He knew that his answers would not bear investigation, and knew that if a suit was brought the investigation would be made in San Antonio, and what could and probably would be discovered. He knew that if the suit was brought he would lose it, if the truth was developed. He took his time about making an agreement, and secured $500 when he was only entitled to the premiums paid. It is inconceivable that. Smith would not have done just what he did, had the statement of Mrs. Long never been referred to or shown him. Judging from the ordinary experience of mankind, in the absence of any representation as to what she would testify (assuming there was such a representation), he would in all reasonable probability have made the agreement. Conscious of his fraud and of the fact that sufficient had been discovered to cause an investigation sure to lead to his defeat in the courts, he elected to save the costs and embarrassment of litigation, and take $500 instead of what he was entitled to, namely, $221.46. No sane man, as conversant with the insurance business as Smith was, would have done otherwise. The evidence does not support a finding that the representation as to what Mrs. Long would testify to, assuming there was such a representation, induced Smith to make the agreement.

We deem it unnecessary to discuss and dispose of the many assignments of error urged in the brief. The peremptory instruction in favor of defendant should have been given, and judgment entered for defendant. The testimony with regard to the allegations made has been fully developed.

The judgment is reversed, and judgment rendered in favor of defendant.

JEFF BLAND LUMBER & BUILDING CO. v. RAILROAD COMMISSION OF TEXAS. (No. 5883.)

(Court of Civil Appeals of Texas. Austin. Oct. 31, 1917. Rehearing Denied April 17, 1918.)

1. RAILROADS

TRACK.

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A railroad company, after having located, established, and operated its line, cannot abandon or change the location of its tracks without legislative authorization, and Vernon's Sayles' Ann. Civ. St. 1914, art. 6504, authorizes a relocation for shortening the line, or reducing the grade, only, notwithstanding the expression or for any other lawful purpose," which was a part of the original condemnation act, but not of the amendments. 2. RAILROADS 57-ABANDONMENT OF TRACKS-USE OF OTHER TRACKS-ORDER OF COMMISSION.

The railroad commission is not authorized under Vernon's Sayles' Ann. Civ. St. 1914, § 6504, providing for relocation of tracks to shorten lines and lessen grades, to make an order granting a railroad company the right to enter a city over the tracks of another railway and abandon its own.

3. RAILROADS 9(1) ABANDONMENT OF TRACKS PROCEEDING BEFORE RAILROAD COMMISSION-PARTIES ENTITLED TO INTER

VENE.

A lumber company located upon the main line of a railroad company's track at some distance from other railroads is an interested party entitled to be heard in a proceeding before the Railroad Commission by the railroad company for permission to abandon such tracks and enter the city over the tracks of another road, under Vernon's Sayles' Ann. Civ. St. 1914, art. 6677f, providing that dissatisfied persons or corporations may become parties to the proceedings.

Appeal from District Court, Travis County; George Calhoun, Judge.

Suit by the Jeff Bland Lumber & Building Company, a private corporation, against the Railroad Commission of Texas. From the sustaining of a demurrer to the petition, plaintiff appeals. Reversed and remanded. John C. Williams, of Houston, for appellant. B. F. Looney, Atty. Gen., and Luther Nickels, Asst. Atty. Gen., for appellee.

Statement of the Case.

RICE, J. This suit was brought by appellant, a private corporation, against the Railroad Commission of Texas, to set aside and cancel an order made by it granting the San Antonio & Aransas Pass Railway Company the right to change its line of railway as originally constructed through the city of Houston, so as to enter and pass partly through said city over the tracks of the Houston & Texas Central Railroad Company and the Galveston, Harrisburg & San Antonio Railway Company, and to perpetually enjoin the Railroad Commission from granting to such company permission to abandon its main line track described in such order.

Omitting formal parts, appellant's petition is as follows, to wit:

"I. That plaintiff under its articles of incorporation is a retail and wholesale dealer, having its principal place of business located within the city limits of the city of Houston, Harris county, Tex., upon the main line of the San Antonio & Aransas Pass Railroad Company, within said city, where the plaintiff does a general wholesale and retail lumber business. That the San Antonio & Aransas Pass Railroad Company is a corporation duly and legally incorporated under and by virtue of the laws of the state of Texas, and as such owns and operates a line of railroad extending through the city of Houston, Harris county, Tex., to the city of San Antonio, Bexar county, Tex., over which it at all times transports freight and passengers for hire, and is a common carrier.

"II. That the plaintiff herein is now, and at all times mentioned herein was, the owner of block No. 2, in Blodgett addition to the city of Houston, Harris county, Tex., and has located thereon its lumber yard, from which point it has heretofore received and shipped lumber, and from which point it desires to receive and ship lumber in the transaction of its business over the main line of the San Antonio & Aransas Pass Railroad Company. That for more than 30 years the San Antonio & Aransas Pass Railroad Company has owned and operated its main line track, which is more than 25 miles in length, through the city of Houston and to the city of San Antonio, as aforesaid, and its right of way of its main line railway adjoins the lands upon which this plaintiff's said lumber yard is now situated, and from said main line. track said railway company for many years has furnished switching connections for this plaintiff over this plaintiff's private industrial switch track and certain unloading tracks and team tracks connected with said railroad company's main line at the station of Blodgett, which unloading tracks and team tracks are adjacent to this plaintiff's said lumber yard, and were heretofore constructed and operated in connection with said railway company's main line track.

"III. That the San Antonio & Aransas Pass Railway Company is now attempting to illegalits main line track running through the city of ly tear up, remove, and abandon that portion of Houston between what is known as Bellaire Junction to a point east of Main street boulevard in said city, a distance of about 8 miles, Junction by way of the Houston & Texas Cenand to enter the city of Houston from Bellaire tral Railroad Company's lines to what is known as the H. & T. C. Junction, from which point it will use the Galveston, Harrisburg & San Antonio Railway Company's lines through what is known as Stella Junction to a point on its own main line east of Main street in said city of Houston. As aforesaid, that portion of its main line track which it seeks to tear up, remove, and abandon is within the city limits of the city of Houston, which is an incorporated will be forced to abandon the station of Blodgtown, and in order for said company to do so it ett, which is located about 2,042 feet west of Main street boulevard in the city of Houston. That the portion of its track which it seeks to abandon is its main line track, and has been heretofore located and operated for more than That if said railroad company is permitted to 30 years as a portion of its main line track. abandon and remove that portion of its main line track, then it will have no track or right of way for a distance of more than 8 miles, extending from a point known as Bellaire Junction and that point on its main line track east of Main Street boulevard in the city of Houston, where the Galveston, Harrisburg & San Antonio Railway Company's right of way now

Tex.) JEFF BLAND LUMBER & BUILDING CO. v. RAILROAD COMMISSION

intersects the main line of the San Antonio & Aransas Pass Railroad Company.

"IV. That if said San Antonio & Aransas Pass Railroad Company be permitted to remove its track and abandon its main line between the point known as Bellaire Junction and the intersection of the Galveston, Harrisburg & San Antonio Railway Company's main line track with the right of way of the San Antonio & Aransas Pass Railway Company east of Main Street boulevard, such rerouting of its trains, or relocation, will not shorten its line, but in truth and in fact will lengthen its line by many miles, and such change will not reduce its grades, or any of them, but will in fact increase the grade slightly.

"V. That on the 26th day of August, A. D. 1916, the San Antonio & Aransas Pass Railroad Company filed its petition with theRailroad Commission of Texas, alleging in substance that that portion of its main line track within the city of Houston between Bellaire Junction and its intersection with the main line track of the Galveston, Harrisburg & San Antonio Railway Company, crossed Main Street boulevard, the principal thoroughfare of the city of Houston, near Blodgett, and that it also crossed Montrose boulevard, one of the principal thoroughfares in the south end of the city of Houston. That the city authorities of said city have decided that the operation of said tracks and trains over and across said Main boulevard at grade involves grave danger to the public using said thoroughfare, and that the city would at once require said company to separate the grades at the crossing of said boulevard, and that by the reason of the increased travel a separation of the grades of said track at the crossing of Montrose boulevard will be required by the public interest, and that the separation of the grades at the intersection of Main street would cost said company about $250,000, and such separation at Montrose boulevard would cost said company about $100,000, exclusive of damages to the owners of abutting property, and that the interest of the public requires and will be best served by a relocation of said company's lines within the limits of the city of Houston so as to avoid the crossing of said two highways; and praying for an order of the Railroad Commission of Texas granting its permission to abandon its main line track between Bellaire Junction to the west and the intersection of its track with the main line of the Galveston, Harrisburg & San Antonio Railway Company track east of Main street, as hereinabove described, being a distance of about 8 miles, which said petition was filed by the Railroad Commission and numbered 1798 on its dockets; and on the 28th day of August, 1916, said matter was set for hearing on the 12th day of September, 1916, and notice thereof was duly given to said railroad company and to this plaintiff, and to all other interested parties.

"VI. That this plaintiff was, and now is, a party at interest in this, that, as aforesaid, this plaintiff has heretofore at great cost and expense established its lumber business on block No. 2 of the Blodgett addition to the city of Houston, adjoining that portion of the main line track which said railroad company intends to abandon, which was done by this plaintiff relying upon the permanency of the location of said railroad company's main line track at said point, and if said railroad company is permitted to abandon and remove that portion of its main line track, then this plaintiff's business will be destroyed by reason of the fact that this plaintiff will have no railroad connection, and no railroad located closer than two miles of its place of business over which it can receive and ship its lumber, and that it is wholly impracticable to operate its lumber yard without railroad connections with its industrial track, or

403

within such proximity to its place of business as to enable it to receive and ship lumber over the same. That if said railroad company be permitted to abandon that portion of its main line track mentioned and described hereinabove and in said company's petition to the Railroad Commission of Texas, then this plaintiff's business will be rendered unprofitable by reason of the fact that it will have no railroad near enough to its said place of business to enable it to continue in business, and this plaintiff will be irreparably damaged by the destruction of its business as aforesaid.

"VII. That this plaintiff, within due time after said hearing before the Railroad Commission was set, filed with said Railroad Commission in said cause its protest and opposition to the petition of said railroad company, and became and was a party to said hearing. That on the 11th day of September, 1916, said hearing was continued and postponed by the Railroad Commission of Texas until Tuesday, October 10, 1916, and again on October 12, 1916, said hearing was postponed and reset for hearing before the Railroad Commission at Houston, Tex., on Thursday, October 19, 1916, and again on October 18th, before said hearing was had, the same was postponed to be heard at Houston before the Railroad Commission of Texas on October 24th, and due notice thereof was issued to this plaintiff, to the San Antonio & Arkansas Pass Railroad Company, and to all other interested parties. That on the 24th day of October, 1916, at Houston, Tex., at a public hearing on said application of said railroad company, the commission heard this plaintiff and all other parties desiring to be heard with respect to said application, and heard all evidence offered, together with such arguments as were made thereon, and took the same under consideration, and on October 31, 1916, the Railroad Commission of Texas entered an order upon said matter, in substance as follows, to wit: 'And having fully considered said application, protest, evidence, and argument thereon, on this 31st day of October, 1916, find: That the public interests require the relocation and change of the tracks of said company within said city proposed as directed in said application and the map attached thereto to which reference is here made. It is therefore ordered, considered, adjudged, and decreed by the Railroad Commission of Texas that the San Antonio & Aransas Pass Railroad Company be, and it is hereby, granted permission to relocate and change its line leading into the city of Houston so that it may remove its track between Bellaire Junction and Blodgett east of Main boulevard, as shown on plat filed herewith, and relocate its line under trackage rights to be acquired from the Houston & Tex&s Central Railway Company and the Galveston, Harrisburg & San Antonio Railway Company, so that its main line as relocated into said city of Houston will extend from Bellaire Junction under said trackage rights over the Houston & Texas Central Railway to East H. & T. C. Junction and from East H. & T. C. Junction over the line of the Galveston, Harrisburg & San Antonio Railway Company, through Stella Junction to a connection with petitioner's present main line east of Main boulevard at Blodgett, as is more fully shown by the plat filed with said application to which reference is here made,' which order was signed Allison Mayfield, Chairman, C. H. Hurdleston, Commissioner,' and was attested 'E. R. McLean, Secretary Railroad Commission of Texas.'

"VIII. That this plaintiff is dissatisfied with the decision and order adopted and found by the Railroad Commission of Texas in said matter in the following particulars, to wit: First. Because the Railroad Commission of Texas was without jurisdiction to hear and determine

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