American Home Life Ins. Co. v. Compere

CONNER, C. J. On the 22d day of April, 1909, appellee executed the following instrument in writing: “The American Home Life Insurance Company. “Subscription for Capital Stock. “No. 2501. 50 Shares. “Whereas, Stuart, Walker & Company, of Fort Worth, Texas, are promoting the organization of a life insurance company, to be incorporated in pursuance of the laws of the state of Texas, under the name of the American Home Life Insurance Company, with an authorized capital of at least $500,-000.00 and a paid up capital of at least $500,000.00 and a net surplus of at least $500,000.00 paid up and free from promotion and organization expenses, all in accordance with printed prospectus issued by them and delivered to me. “And whereas by their acceptance of this subscription said Stuart, Walker & Company, agree to endeavor with all reasonable diligence to accomplish on or before December 31st, 1909, the organization of said corporation with capital stock and surplus fully paid as aforesaid, they defraying all expenses of promotion and incorporation: “Now, therefore, I do hereby subscribe for fifty shares, of the par value of $10.00 each, of the capital stock of said the American Home Life Insurance Company, and I do hereby agree with said company and with the said Stuart, Walker & Company to pay therefor the sum of $1,500.00 as follows: The sum of-$1,250.00 I agree to pay to said the American Home Life Insurance Company, at any time after May 1, 1909, immediately upon notice from said Stuart, Walker & Company that said company had been duly incorporated and that its capital stock had been subscribed in good faith in amounts and at the price netting the company at least $500,000.00 of capital and at least $500,000.00 surplus in the aggregate when paid. The remaining sum of $250.00 I agree to pay, concurrent with this subscription to the said Stuart, Walker & Company in consideration of their agreement herein-before recited and in lieu of any further or other contribution to the expenses of promoting and incorporating said company. “Witness my hand this the 22d day of April, 1909. “M. H. Compere, Name of Subscriber. “Abilene, Texas, P. O. Address.” “Subject to loan of $2,500.00 made on collateral acceptable to the finance committee at the rate of six per cent per annum for from 1 to 5 years as may be desired by applicant.” At the time of the execution of this stock subscription contract, appellee paid the $250 advance payment therein provided for and received from Stuart, Walker & Co. the following receipt: “Number 246. Amount Paid, $250.00. Total Subscription, $1,500.00. “Abilene, Texas, Apr. 22, 1909. “Received of M. H. Compere of Abilene, Texas, the sum of two hundred and fifty & no-100 dollars as part payment for 50 shares of stock in the American Home Life Insurance Company of Fort Worth, Texas, as set forth in his subscription application No. [80] 2501, bearing even date herewith. Should ■said subscription be not approved and accepted, the amount as per this receipt will be returned. “Stuart, Walter & Company, “By G. T. Brothers, Secy. “Not valid unless countersigned by W. T. Coleman, Salesman.” Thereafter, on April 21, 1910, appellee instituted this suit against Stuart, Walker & Co., the American Home Bife Insurance Company, and others not necessary to name inasmuch as they were later dismissed from the suit, alleging that Stuart, Walker & Co. had induced the execution of the stock subscription contract and had executed the receipt quoted as promoters of the insurance company to be thereafter organized, promising that if plaintiff would so subscribe for stock that the insurance company, when organized, would loan to the plaintirc the sum •of $2,500 at the rate of 6 per cent, interest per annum for a period of from one to five years as might be desired by the plaintiff. It was further alleged that the American Home Bife Insurance Company thereafter became duly organized, offered to-issue stock in said company to the plaintiff and others whose stock subscriptions had been solicited and obtained by Stuart, Walker & Co.', and in other ways did “fully ratify, indorse, and approve of all the acts of the said agent in the premises,” and thereafter “agreed to make said loan and to carry out the agreement made by said parties with plaintiff,” but that, after repeated applications made in accordance with the terms of the agreement made between him and the said Stuart, Walker & Co., the said insurance company “upon some excuse and pretext and another and from time to time put off and for an unreasonable length of time refused to make such loan, and demanded of plaintiff that he pay the other amount of $1,250 aforesaid upon the stock, and finally failed and refused to make such loan to plaintiff and failed and refused to pay back to plaintiff the said sum of money so advanced.” The prayer was for the recovery of the advance payment of $250, with interest thereon, etc., as well also as for certain damages, to which the court sustained an exception, and which hence we need not notice. Upon the conclusion of the evidence the court gave a peremptory instruction in favor of the American Home Bife Insurance Company but submitted the case to the jury as between the plaintiff and appellant R. T. Stuart and C. W. Walker, composing the firm ■of Stuart, Walker & Co. on the issue embodied in the following charge: “You are further instructed that if you believe from the evidence that the defendant American Home Bife Insurance Company did not, in good faith, approve and accept the subscription of stock in question, and did not in good faith intend to make the loan under the terms mentioned in said contract, you will find for the plaintiff against the defendants Stuart, Walker & Co. for $250, with 6 per cent, interest from November 3, 1909; but if you believe from the evidence that the American Home Bife Insurance Company did approve and accept the subscription for the stock signed by plaintiff in good faith, intending to make the loan under the terms above mentioned, provided plaintiff furnish security satisfactory to the American Home Bife Insurance Company, then you will find for the defendants.” The verdict and judgment was in appellee’s favor as against Stuart, Walker & Co. and also in favor of the American Home Bife Insurance Company against the plaintiff’s cause of action and as against a cross-plea presented by Stuart, Walker & Co., which in view of the.disposition we have made of the case we do not think it necessary to further notice. Appellants have assigned error to the court’s charge on the ground that it submitted an issue not made by either the pleadings or evidence, and we think the assignment must be sustained. If, as presented in the charge quoted, the subscription contract was not accepted in good faith by the American Home Bife Insurance Company, the plaintiff was entitled to recover as he did under the very terms of appellants’ receipt for the money received; a good faith acceptance being necessarily implied, in appellants’ undertaking. But no such issue is presented in plaintiff’s pleadings. [1] The plaintiiff’s petition is susceptible to no other construction than that he alleges that the insurance company, after its organization and as contemplated in his subscription contract, accepted the contract, and one or more of its officers so testified. If so, the American Home Bife Insurance Company adopted the act of its promoters as its own and took the contract with its burdens as well as its benefits; among the burdens being the obligation to make the loan specified in the subscription contract. W. M. W. & Ry. Co. v. Granger, 86 Tex. 350, 24 S. W. 795, 40 Am. St. Rep. 837. The failure, therefore, to make the loan under the circumstances alleged constituted but a breach of the contract on the part of the insurance company. Such breach, if any, would entitle the plaintiff, as against the insurance company, to damages or to a rescission of the subscription contract with a recovery of the money advanced thereon. Because the case was tried and submitted upon a theory not presented in the pleadings, the judgment is reversed, and the cause remanded for a new trial.