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the statements of witnesses and investigat- statements of witnesses, and make report ing the facts surrounding said accident, the thereon to said attorneys to enable them to sum of $53.85.

defend said suits; that Henley, after comPlaintiff further avers that after it had pleting and reporting his investigation, sent incurred said liabilities, defendant, Western plaintiff a bill for $53.85. None of the witnessIndemnity Company, on or about September es who testified on the trial knew whether 2, 1916, agreed to assume liability in said plaintiff had paid said bill, but plaintiff's cases and after that date to undertake the Houston manager testified that, if same had defense or settlement of such cases.

not been, it would be paid by plaintiff. There Plaintiff further avers that defendant, was no testimony showing whether the exthough often requested, has failed and re- penses detailed in Henley's bill had actually fused to pay to plaintiff the obligations in- been incurred, or the money spent therefor, curred by it in the defense of said suits, as or that such expenditures, if any, were reait was bound to do, and it therefore prays sonable and proper, except Mr. Wayman's unthat upon final hearing hereof it have judg- contradicted statement that he met Henley in ment in the sum of $500, with interest there- Houston while working on the cases, and on, costs of suit, and general relief.

knew that Henley was in Houston for at The Indemnity Company filed its general least two days to investigate the collision. demurrer to the allegations of appellee's peti- He stated: That Henley had a room with tion, and avers that the same alleges no bath at the best hotel in Houston when he cause of action against said company, and met him there. That the principal or home for further answer it says:

office of Walker-Smith Company, plaintiff, is “For further answer, if required, defendant de- at Brownwood, Brown county, Tex., where E. nies all and singular the allegations in plaintiff's B. Henley resides. That competent investigasaid petition contained, and says that the same are not true in whole or in part, and, demand- tors, resident in Houston, could have been ing strict proof of every material allegation in employed there for at least $10 or $15 a day, said petition contained, puts itself upon the if an effort had been made to employ them, country.'

and thus hotel bills and railroad and Pullman The record shows no disposition of ap- fares could have been eliminated. This, howpellant's demurrer, nor is there any refer- ever, was not done, and Henley was engaged ence thereto in appellant's brief. We shall in good faith to do the work. That McDonald therefore assume that it was abandoned, and & Wayman prepared and filed answers in the make no further mention of the same in this suits above mentioned; made some investiopinion.

gation into the facts through Mr. Wayman, The cause was tried before the court with who went to Houston for that purpose; inout a jury, and judgment was rendered for vestigated questions of law involved or likely appellee, Walker-Smith Company, against the to arise in the cases; took the oral deposition Indemnity Company for $318.35. From this of the plaintiff in one of said suits at an acjudgment the Indemnity Company has ap- tual and reasonable expense of $14.40, which pealed.

was paid by plaintiff herein; conferred with The trial court filed its findings of fact, and counsel representing plaintiffs in said suits therein finds that the policy of insurance was relative to settlement, and generally conissued and was in force and effect on the 2d ducted the defense of said suits up to Sepday of July, 1916, which was the time of the tember 2, 1916, when defendant herein agreed collision that caused the injury to Schroeder to defend said suits, both of which it shortly and Henry, as alleged by appellee; that there thereafter settled for $300. That the undisafter both of said injured parties sued appel- puted evidence shows that a reasonable fee lee in the district court of Harris county as al- for the services rendered by McDonald & leged by appellee; that when citations in said Wayman in the preparation and conduct of suits were served on plaintiff herein, it trans- the defense of said cases up to September 2, mitted same to defendant Indemnity Compa- 1916, no definite fee having been fixed beny, and requested it to defend said suits, as tween them and plaintiff, is the sum of $125 plaintiff claimed it was obliged to do under in each of said cases, or a total of $250. said policy; that defendant refused to de- Plaintiff, while obligated to pay said sum of fend said suits, claiming that the policy did said attorneys, has not yet done so. not cover the existing situation, as the truck By the first assignment it is insisted that was not being used for delivery purposes at the trial court erred in rendering judgment the time of the collision; that it thereupon against appellant for any part of the attorbecame necessary for plaintiff to provide for ney's fee promised by appellee to McDonald & its own defense in said suits filed by Schroe- Wayman, because: First, the contract under der and Henry, and to that end it employed which the suit was brought being one for inMcDonald & Wayman, a firm of attorneys at demnity against loss only, no recovery therelaw residing in Galveston, Tex., to take under can be had until a loss is actually suscharge of and conduct such defense. It also tained, and that as the undisputed evidence sent one E. B. Henley from Brownwood, shows that appellee had not actually paid Brown county, Tex., to Houston, Harris coun- such attorney's fees, or any part thereof, at

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time of the trial of this cause, it was error, which resulted from injuries caused by reafor the court to render judgment against ap-son of the ownership and use of said autopellant for any part of such fees; second, mobile truck, but was a suit only to recover “if the contract sued on be not one of indem- from appellant the amount of attorney's fees nity, then the plaintiff's cause of action must which it had necessarily incurred, because be for breach of a contract to defend, and appellant had breached its contract, and for for such breach the plaintiff can recover only which appellee was liable, appellee was clearsuch loss as it actually sustained by reason ly entitled to recover, and it was not necof such breach, and, not having paid the at-essary that the fees sued for should be actorneys' fees, it has not sustained the dam-tually paid to enable it to recover; but whers age complained of, and hence the court erred it established that it was obligated to pay in allowing recovery for such fees."

said fees, and that the same was reasonable, The contention of appellant in support of the liability of appellant to repay the exits assignment is based upon the no-action | penses necessarily incurred by appellee, beclause of the policy, which is as follows: cause of the breach of the contract by ap

"No action shall lie against the company to re- pellant had arisen, and appellee's cause of cover under any of the agreements herein con- action had accrued. Lowe v. Fidelity & Castained, unless brought by the assured personally ualty Co., 170 N. C. 445, 87 S. E. 250; South to recover money actually expended by him in Knoxville Brick Co. v. Surety Co., 126 Tenn. satisfaction of claim or liability by due process of law, resulting from injuries actually caused 402, 150 S. W. 92, Ann. Cas. 1913E, 107; Royby reason of the ownership, maintenance and use al Indemnity Co. v. Schwartz, 172 S. W. 581. of said automobiles.

The so-called no-action clause of the polIt ignores section 2 of the policy herein- icy relied upon by appellant as a defense to before set out, by which said Indemnity Com-appellee's cause of action has no application pany directly and unqualifiedly contracted to the issues involved in this cause. The and agreed “to defend in the name, and on contention of appellant reduced to its' final behalf of the assured any suits, even if analysis is that it was the intention of the groundless, brought against the assured to contracting parties, at the time of making recover damages on account of such happen- the contract, to contract that in the event ings as are provided for by the terms of the appellant should breach its obligation to depreceding paragraph," the preceding para- fend the suits, such as those filed by Schroegraph being section 1 by which the Indemni- der and Henry, and in the event appellee was ty Company agreed to indemnify appellee compelled to employ attorneys to make such against loss by reason of liability on account defense, it should compel the attorneys so of bodily injuries, including death resulting employed to sue it, to recover judgment for therefrom, accidentally suffered, or alleged to their fees in a court of last resort, and that have been suffered, while such policy was in after said judgment had become final and apforce by any person by reason of the owner-pellee had paid said judgment, and only then, ship and use of appellee's automobile truck. and not until then, would appellant be liable That the suits of Schroeder and Henry for attorney's fees incurred by appellee by against Walker-Smith Company were such reason of appellant's refusal and failure to suits as appellant, by its contract or policy, defend said suits. In other words, appellee had agreed to defend. That it refused to must prosecute, or cause to be prosecuted, a defend said suits after being notified or re suit against itself to final judgment in a quested to do so by appellee, and that by court of last resort, and then pay such judgreason of such refusal it became necessary ment before it could sue appellant for damfor appellee for its own protection to employ ages it had suffered by reason of appellant's attorneys to file answers in said suits and breach of its agreement to defend against make such investigations and preparation as the suits of Schroeder and Henry. Such was necessary and proper for the trial, is contention is wholly untenable, and cannot unquestioned. It is also unquestioned that be sustained. In the case of South Knoxappellee did employ McDonald & Wayman ville Brick Co. v. Surety Co., above cited, to defend said suits and that it did obligate where practically the same issues as involvitself to pay said attorneys a reasonable fee ed in the present case were being discussed, for these services.

the Supreme Court of Tennessee said: [1] As already shown, appellant had, by “Assured could not have supposed that the the second clause of the contract or policy, company would breach its contract, in the outunqualifiedly obligated and bound itself to set, and occasion loss by refusing to assume redefend the suits brought by Schroeder and sponsibility for a suit based upon a claim cov

ered by the policy. The company could not have Henry against appellee, and that appellant intended, as a consequence of its own default, to had failed and refused to defend said suits, make this default the occasion for the imposias it had obligated itself to do. This being tion of a new condition upon assured. The par

ties were not contracting with reference to an true, it was incumbent upon appellee, Walk-initial breach by either, and this condition evier-Smith Company, to incur the attorney's dently refers to losses under suits defended, as fees for which it sued and recovered in this provided in the policy, by the company, and not Since appellee's suit against appel- to losses under suits for which the company re

pudiated its liability. This is the construction lant was not one to recover money actually placed upon an identical condition in a similar expended by it in satisfaction of a claim | policy by the Supreme Court of the United

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States, and its reasoning is so apt and conclu-, and Pullman fares could have been eliminated. sive we adopt it here as a satisfactory disposi- This, however was not done, and Henley was tion of the contention here made."

engaged in good faith to do the work." In a similar case, Royal Indemnity Co. v. From these findings we conclude that there Schwartz, 172 S. W. 581, the court said : was evidence sufficient to show that Henley,

"The company having refused to defend, as it after being employed to make such investigahad obligated itself to do, it was incumbent up- tion, did so and was engaged in doing so for on Schwartz to conduct his own defense. Since the question of Schwartz's liability for the death at least two days, and that a reasonable of the child is not now in question, because he charge for such service was $30, even had is not suing for the amount paid as damages, but he not incurred the railroad fare of $17.50, only for attorney's fees for which he is liable, he the Pullman fare of $5, and the additional is clearly entitled to recover, and it was not necessary that the fee be paid to enable him to expense of $1.35, which the court finds was recover, but when he establishd that he was obli- not shown by the evidence to have been necgated to pay, and that the fee is reasonable, the essarily and reasonably incurred in making liability contemplated by the policy had arisen, said investigation. and his cause of action accrued.'

Having reached this conclusion, we further The first assignment is overruled.

conclude that, as the judgment rendered [2] By the second assignment appellant in- against appellant included the sum of $23.35, sists that the trial court erred in rendering which was not shown to have been necessarijudgment against appellant for the expensely and reasonably incurred in making said account of E. B. Henley of $53.35 for making investigation, we reform said judgment of an investigation of the facts relative to the $318.25 rendered by the court in favor of alleged injuries of Schroeder and Henry, for appellee against appellant by deducting therethe reason that there was no proof that the from said sum of $23.35, leaving a balance sums shown on said bill, or any of them, were of $294.90 and as thus reformed, said judgexpended by Henley, or that the same, if ment is affirmed. expended, were reasonable and proper charg

Reformed and affirmed. es, or that Walker-Smith Company had paid or intended to pay said bill. No statement of facts accompanies the record. We must therefore look to the fact findings of the PYE V. ROBINSON. (No. 7461.) court to enable us to pass on the complaints (Court of Civil Appeals of Texas. Galveston. presented by the assignments. The trial

March 3, 1918.) court found the following facts: That Walk

JUDGMENT Om 143(9) SETTING ASIDE DEer-Smith Company sent one E. B. Henley

FAULT_GROUNDS FOR. from Brownwood, Brown county, Tex., to Where a defendant had filed an answer on Houston, Tex., to investigate the accident a former trial, and his codefendant promised to which resulted in the injuries of Schroeder in question, but failed to do so, and default

have his attorney represent him on the trial and Henry; to take statements of witness- was entered, and there was only one issue which es and make report thereon to its attorneys, the jury decided in favor of such codefendant, McDonald & Wayman, to enable them to pre- the court erred in not setting aside a default

judgment. sent its defense to the suits of the alleged injured parties; that, after completing and

Appeal from District Court, Ft. Bend reporting his investigation, Henley sent County; Samuel J. Styles, Judge. Walker-Smith Company an itemized bill for

Action by T. B. Robinson against A. Pye $53.85, as follows:

and others. Judgment for plaintiff as against Railroad fare Brownwood to Houston

the named defendant, and he appeals. Reand return

$17.50 versed and rendered. Sleeper

5.00 Transfer

1.00

Sam, Bradley & Fogle, of Houston, for Hotel

15.00 appellant. D. R. Peareson, of Richmond, for Auto hire, stenographers, and other ex

appellee. penses looking up witnesses and depositions

16.35

PLEASANTS, C. J. This appeal is from

$53.85 a judgment of the district court of Ft. Bend The court further found that Walker-Smith favor of appellee upon two mules owned by

county establishing and foreclosing a lien in Company obligated and bound itself to pay appellant. The suit was brought by appellee said bill. The court further found that the against A. Arsenaux, J. S. Bowser, and apuncontradicted evidence showed that Henley pellant to recover upon a note for $1,200 exwas in Houston for at least two days to ecuted in favor of appellee by said Arsenaux make said investigation, and that while there and alleged to have been secured by a morthe had a room, with bath, at the best hotel

gage upon twelve mules described in the petiin Houston, The court further found as tion. J. S. Bowser was made a party defendfollows:

ant upon allegations charging that he had "Competent investigators, resident in Hous- taken and sold three of said mules and conton, could have been employed there for at least $10 or $15 a day, if an effort had been made to verted the proceeds to his own use, and judgemploy them, and thus hotel bills and railroad ment was sought against him for the sum of $675, the alleged value of the three mules. ties defendant, establishing and foreclosing The petition further alleged that appellant a mortgage lien on all of the mules described was in possession of two of the twelve mules in “said mortgage. By order granted May covered by the mortgage, and judgment was 6, 1916, plaintiff's motion for a new trial was asked against him foreclosing the alleged granted and said judgment set aside. mortgage lien upon the two mules.

On October 17, 1916, plaintiff filed his secAppellant filed his original answer on ond amended original petition and second March 28, 1916. In addition to a general supplemental petition, and on same day dedemurrer and general denial this answer fendant A. Arsenaux filed his original answer, avers in substance:

whereby he alleged that he did in fact ex"That said purported mortgage on its face ecute said mortgage, but that the real conprovides that said Robinson promised and sideration therefor was the extension of said agreed to extend and have extended the time of payment of said note described in said mort- note to be obtained within a period of 60 gage, and contained the addition that unless days, and to be extended for a period of 12 such extension be procured, and granted, and months; that such extension was to be obthe time of payment of said note, which was tained within 60 days from the date of the then in the hands of another party as collateral, execution of the mortgage; that at the end extended, said mortgage shall become and be null and void and without effect, and that such of 60 days plaintiff had wholly failed and reextension must be procured within 60 days from fused to execute said extension, and notified the date of said mortgage; that such extension said defendant Arsenaux that he would not was not so procured within such time, nor at any other time, and because of such failure to extend the payment of said note; and that so procure such extension, and failure of con- because of such failure to extend the time of sideration of such mortgage, the said mortgage payment of said note within such time said is null and void, and that plaintiff has no lien mortgage was null and void, and was not a of any kind or character upon any of the prop- lien upon the property therein described. erty therein described."

On October 17, 1916, by order duly entered, And by cross-action against plaintiff, T. B. Robinson, defendant A. Pye alleged that on granted and entered against defendant A.

an interlocutory judgment by default was the 19th day of February, 1916, he was the

Pye. owner of and in possession of two mules, and tried, and submitted to the jury on special

On October 18, 1916, said cause was that plaintiff wrongfully took both of said issues. Question No. 1 was: mules from the possession of defendant, and deprived defendant of the use thereof, A. Arsenaux to T. B. Robinson, and sought to

"Were the terms of the mortgage executed by to his damage in the sum of $150; that de- be in this case foreclosed, complied with by Robfendant was the owner of both of said mules, inson in this: Did Robinson within 60 days and that plaintiff, T. B. Robinson, has no after the execution of the mortgage extend right, title, or interest in them, or either of and procure an extension of the time of payment

of the debt from the time of the execution of them, and wrongfully asserted an interest in the mortgage until October 15, 1915?” said mules, or claim thereof, and prayed for judgment for his said damage and for title To which question the jury answered: and possession of said two mules.

"No." The defendant J. S. Bowser filed answer On October 30, 1916, defendant A. Pye filed April 22, 1916, in which he pleaded general a motion to vacate interlocutory judgment demurrer and general denial to plaintiff's by default theretofore entered against him petition, and denied that he had ever convert- in said cause, and on November 3, 1916, he ed to his use any of the mules described in filed his first amended motion to vacate said plaintiff's petition, and also pleaded that the default judgment. By order entered Novemconsideration for such mortgage was to have ber 8, 1916, the motion of defendant A. Pye been the extension of time of payment of to have said interlocutory judgment vacated said note, and that said Robinson had failed was refused, and on the same day judgment to procure such extension, and because of was rendered and entered in favor of plainsuch failure that said mortgage became null tiff Robinson, against defendant Arsenaux and void, and was not a lien upon any of the on said note for the sum of $1,653.43, and property therein described.

on said verdict of the jury that plaintiff take Defendant A. Arsenaux, of Yazoo countý, nothing against defendant J. S. Bowser and Miss., failed to file answer to said cause, and he go hence without day and against A. Pye, plaintiff demanded and obtained judgment by making final interlocutory judgment, and default against said defendant.

establishing and foreclosing the mortgage The cause was tried on the 2d day of May, lien on the two mules purchased by Pye from 1916. Charge No. 1 requested by defendant Arsenaux and taken from the possession of A. Pye was refused, and judgment was ren- Pye by plaintiff. dered on special issues that were submitted The record shows that appellant was' not to the jury on May 2, 1916, in favor of plain-represented by an attorney upon the trial tiff, T. B. Robinson, against defendant A. when the interlocutory judgment by default Arsenaux in the sum of $1,585.09, with inter-was rendered against him, and his answer est, in favor of T. B. Robinson, plaintiff, was not then called to the attention of the against defendant J. S. Bowser for the sum court. On the former trial he was repreof $150, and in favor of plaintiff, Robinson, sented by an attorney, his answer was duly against defendant A. Pye and all other par- presented, and his attorney requested special

203 S.W.-7

charges be given the jury. Appellant's at-, procured and granted in the time of payment of torney was not present on the second trial said note, which is now in the hands of another because the defendant Arsenaux had inform- not be effective, and if said extension is not ed him that he would have his (Arsenaux's) procured and granted by the said Robinson and attorney represent appellant. Neither ap- by the party who has the right to collect said pellant nor his attorney knew that appel- note then, this mortgage shall become and be

invalid and without effect, and said extension lant was not represented on the second trial must be procured within 60 days from this until a few days before the motion to set date." aside the judgment by default was filed. The record does not disclose why Arsenaux sion was not secured as required by the mort

The jury having found that the extenfailed to keep his agreement to have appel

In lant represented on the trial. The motion to gage, it became of no force or effect.

these circumstances it would manifestly be set aside the interlocutory judgment by de- unjust to permit appellee to take appellant's fault was filed and presented before any final mules by subjecting them to a mortgage judgment was rendered in the case. This

which by its very terms upon the fact findmotion did not ask that defendant be given ings of the jury has become void and unena hearing on his cross-action for damages, forceable. It cannot be said that appellant and that portion of defendant's answer was

was without any excuse for his failure to abandoned. We think upon the showing made by appel- the trial at which the default judgment was

have his answer presented by the court on lant the trial court should have set aside the

rendered. As before stated, we think under interlocutory judgment by default. While

all the circumstances of this case the mothe answer of appellant was not called to tion to set aside should have been granted, the attention of the court on the second trial

and appellant, having abandoned his counbefore the judgment by default was rendered, it had been filed and presented upon the dered in his favor on the finding of the jury.

terclaim judgment should have been renformer trial, and was on file when the de-It follows from these conclusions that the fault judgment was rendered. It may be as- judgment of the trial court should be resumed, though the court does not so state, versed and judgment here rendered that apthat the fact that the answer had been presented on the former trial was not in the pellee take nothing by his suit against ap

pellant; and it has been so ordered. mind of the court when the judgment by de

Reversed and rendered. fault was rendered, and if the failure of appellant to have his answer presented could have had any possible effect upon the jury in reaching their conclusion upon the fact SAM v. LUDTKE. (No. 7574.) issue submitted upon the answers of the de

Galveston.

(Court of Civil Appeals of Texas. fendants Bowser and Arsenaux, which was

April 25, 1918.) the identical issue presented by appellant's answer, or the granting of the motion had re- 1. LIMITATION OF ACTIONS O 66(12) ACquired another trial of the issue between

CRUAL OF RIGHT-DEMAND. appellee and appellant, the court could have individual for safe-keeping with the understand

Where one deposits a sum of money with an properly refused to set aside the default ing that it is to be returned at any time, and judgment. But we are of opinion that the that the individual is to pay interest, no demand motion to set aside the default judgment is necessary to start the running of the stat

ute of limitations. having been filed before the final judgment 2. LIMITATION OF ACTIONS Cw102(2)—TRUST was rendered, and the only fact issue in

RELATION-EVIDENCE. the case having been presented to the jury A deposit of money with an individual for and decided in appellant's favor, he was en-safe-keeping, with the understanding that he is titled to the benefit of the finding of the to pay interest and return deposit on demand,

does not create such trust relation as will prejury, notwithstanding his answer was not vent the running of the statute of limitations. read or called to the attention of the court. 3. LIMITATION OF ACTIONS Om66(9)-ACCRUIt was on file, had been presented to the AL OF RIGHT-BANK DEPOSITS. court on a former trial, made the same de

The rule that limitation runs against a defense, and raised the identical issue of fact mand obligation from its date does not apply

to bank deposits. presented by the answer of the defendants Bowser and Arsenaux. The mortgage which Appeal from Harris County Court; W. E. appellee sought to foreclose contains the fol- Monteith, Judge. lowing recitals:

Action for debt by Peter Ludtke against “Know all men by these presents: That I, Mrs. Idah Sam, executrix of the estate of A. Arsenaux, a resident citizen of Ft. Bend Joe M. Sam, deceased. Judgment or plaincounty, Tex., in consideration of the sum of tiff, and defendant appeals. Reversed and $1 and other consideration to me in hand paid

rendered. by Em. R. Robinson and the promise and agreement on the part of said Robinson to extend

Sam, Bradley & Fogle, of Houston, for and have extended the time of payment of the note hereinafter described to October 15, 1915,

appellant. Atkinson, Graham & Atkinson, with the condition that unless such extension is of Houston, for appellee.

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