Goddard v. East Texas Fire Insurance Company. hollowware, tin, tinware and tinner's materials, and $200 on their tools and machines, all while contained in the one story frame shingle roof building and shed adjoining on the east, occupied by assured and situated at No. 200, on Moore avenue, corner of Adelaide street, block No. 77, Terrill, Texas. Three-fourths loss and iron safe clause. It is agreed and understood to be a condition of this insurance that in case of any loss or damage under this policy this company shall be liable only for three-fourths of said loss, not exceeding the sum herein insured, the other one-fourth to be borne by the assured; and in event of other insurance hereon, this company to be. liable only for its proportion of three-fourths of such loss or damage. "It is understood and agreed that the assured shall keep a set of books showing a record of his or their business, including all purchases and sales, both for cash and on credit, as well as a copy of his or their last inventory, warranted to be kept in an iron safe at night, against all such immediate or proximate loss or damage by the assured as may occur by fire to the property above specified, but not exceeding the interest of the assured in the property and except as hereinafter provided," etc., setting forth the time the policy is to last, how the damage is to be estimated, the date at which the loss is to be paid, etc. The policy then concludes by reciting the terms, conditions and warranties upon which it is given. It will be seen that the clause in question is inserted in the midst of a sentence with which it has no proper connection; a sentence which purports to contain the promises made on the part of the insurance company and not those entered into by Goddard & Corley. It is therefore not only out of place, but taken in connection with its context, is devoid of meaning. Not only so, but the policy expressly names the conditions and terms upon which it is executed, and the warranties which the assured is obligated to make good and perform, yet no warranty or condition of the kind stated in the clause in question is found among them. Now there are some other principles of insurance law applicable. to the state of case made by the policy as we have recited it. The first of these is: "Words purporting to be a condition upon which the policy was issued must be set forth in such a place, and in such manner in the policy, as leaves no doubt they were so intended, and words inserted promiscuously therein, having no connection with other conditions of the policy, although the word 'condition' Goddard v. East Texas Fire Insurance Company. is used, will not be treated as a condition of the policy." Wood Fire Ins., §§ 59, 60. See also May. Ins. 170. This principle is well illustrated by the case of Kingsley v. New England Mutual Fire Ins. Co., 8 Cush. 393. There the words "on condition that the applicant take all risks from cotton waste,” inserted between the statement of the sum insured on the property and the description of its location, were held not to constitute a condition or warranty. The present case is much stronger than the one cited. There the words were written on the face of the policy; here they are printed on a slip and attached to it. There, though wrongly located, they do not interfere materially with the sense of the sentence in which they are embodied; here they do. There the word "condition " is expressly used in connection with the clause; here it is not. Moreover, whilst it is used in the preceding sentence fixing the liability of the company at three-fourths the value of the property destroyed, it is omitted in the iron safc clause altogether. This must have been done through design, and the design must have been to prevent the latter clause from being construed as a condition. However this may be, the policy is brought fully within the principle of law just announced, and the clause under decision must be held not to be a warranty. There is still another rule of law applicable to this policy, which is that when an instrument of this character is inconsistent or ambiguous in its provisions, it must be construed most favorably for the assured. Wood Fire Ins., § 59, and notes; Hoffman v. Etna Ins. Co., 32 N. Y. 405; Etna Ins. Co. v. Jackson, 16 B. Monr. 242; May Ins. 183, 184. The inconsistencies and ambiguities of this policy have already been made apparent. In the first part it recites certain undertakings assumed by the assured; and then in the latter part, which is held to be the most binding portion of such a contract, it sets forth specifically what are the terms of the policy which are to be considered conditions and warranties. To take the most favorable view for the appellee, the policy leaves it doubtful whether the promises exacted of the assured in the first part of the instrument are to be superadded as warranties to those enumerated in the last part, or whether the latter are to be considered the only warranties, leaving the former to be treated as representations. In such case, as we have seen, the doubt must be resolved in favor of the assured. The makers of the policy could have made their meaning clear by including the iron safe clause in Buzard v. Bank of Greenville. the body of the policy at its proper place; but they have chosen to place it where its meaning and construction is obscured, and they must abide the consequences. We are of opinion that the court below should have held the clause in question to have been no more than a representation, and as it was not pleaded as such by the appellee, and the proof did not show any fraud committed by the appellant, or injury suffered by the company by reason of its not having been literally fulfilled, judgment should have been rendered for the appellant for the full amount claimed by him, the court having found that three-fourths of the value of the property lost was at least equal to the amount for which it was insured. For the error of the court below in the matter stated, its judgment will be reversed, and this court, proceeding to render such judgment as should have been rendered below, orders and adjudges that the appellant recover of the appellee the sum of $1,200, with interest thereon from November 30, 1885, and all costs of this and of the lower court. Reversed and remanded. BUZARD V. BANK OF GREENVILLE. (67 Tex. 83.) Partnership—part profits as compensation for services. Where one furnishes money to be used in a certain business by the receiver for the former's benefit, the receiver to have part of the net profits as compensation for his services, this does not constitute them partners.* A CTION on a note. The opinion states the facts. The plaintiff had judgment below. B. S. Johnson and Perkins, Gilbert & Perkins, for appellant. Mathews & Neyland, for appellee. GAINES, A. J. The cause of action in the court below was a promissory note executed by one J. R. Pennington to appellee. Appellee originally sued Pennington alone, but by amendment made appellant a party defendant, alleging that the latter and Pen * See Clifton v. Howard (89 Mo. 192), 58 Am. Rep. 97, and note, p. 99. Buzard v. Bank of Greenville. nington were partners in the cattle business, and that the note was given for a partnership debt of that firm. The leading question in the case is whether a partnership existed between appellant and Pennington or not. The main facts in relation to this matter appear in the third, fourth, fifth, sixth and seventh findings of the court below, which are as follows: "Third. Shortly before the 2d day of June, 1883, the defendant Pennington made sale of nearly all the cattle he had so purchased, and put in the V brand for the sum of $18,000, which sale he reported to defendant Buzard, and in compliance with the request of the latter, Pennington met Buzard at Denison, on or about the 25th day of June, 1883, and they there had a full and complete settlement of said business up to that date, showing that Pennington had in his hands $16,500 of Buzard's money, for which he was accountable. Pennington had a portion of this in money with him, and a portion in drafts and deposit receipts, made out in the name of J. R. Pennington, which he then and there exhibited to defendant Buzard. Defendant Buzard then told Pennington that he had concluded to discontinue the business, as it was not profitable, but after some conversation it was then agreed between them that defendant Buzard was to advance to Pennington the $16,500 which Pennington then had of his money, and that with the money thus advanced Pennington was to purchase cattle in Hunt and adjoining counties, and keep and take care of them, and sell them the next spring, unless a favorable opportunity for selling them should occur earlier. That the expenses of buying, keeping and selling such cattle should be paid out of the money so advanced, and that on final sale of cattle, defendant Buzard should receive back from the proceeds of sale the sum of $16,500, advanced by him, if such proceeds amounted to that much, and that the net profits of the business, if any there was, should be divided equally between defendants Buzard and Pennington. If the proceeds of such cattle should not amount to the said sum of $16,500, after deducting the amount paid for them, and expenses of keeping, etc., then defendant Buzard was to receive all such proceeds, and defendant Pennington was to receive nothing. It was further understood between them that said Pennington was to receive one-half of the net profits, as aforesaid, for his services in managing said business, in lieu of the salary he received under the prior contract. Said Pennington was not to share any possible losses further than, if there were no net Buzard v. Bank of Greenville. profits, he was to lose the value of his services and labor. The cattle to be purchased under this agreement, were to be by Pennington put in the V brand, and he was to use his discretion in buying and selling and managing said business, except that defendant Buzard gave him general instructions not to pay over certain specified prices for certain classes of cattle, and not to sell same for less than certain specified prices. This agreement was verbal, and was acted upon by both parties. There was no agreement 'or instructions in whose name the business should be carried on. Defendant Buzard had the greatest confidence in the capacity and integrity of defendant Pennington. Defendant Buzard in entering into said agreement did not intend to, nor did he think he was entering into a partnership with said Pennington. "Fourth. The defendant Buzard claimed the V brand. He was in Hunt county in May, 1883, but did not ascertain that said brand was recorded as Pennington's, nor did he make any inves' igations into the matter. He did not know in whose name the cattle business was carried on, but was aware that the money arising from the sales was deposited by Pennington in the latter's own name. "Fifth. The note sued on was executed by J. R. Pennington in renewal of another note, which other note was executed for moneys advanced by plaintiff to him at various times for the purpose, as professed by Pennington, of carrying on said cattle business, which he was managing for himself and defendant Buzard, and the greater portion of the money so advanced was expended in the purchase of cattle which he put in the V brand. One thousand dollars of said money was advanced to Pennington to be used in the purchase of the Waldron pasture, which he said he was buying for himself and Buzard for the benefit of said cattle business, and was used in the purchase of said pasture. “Sixth. Plaintiff, in making advances, did not rely on the responsibility of Pennington as it was aware he had little means of his own, but made them relying upon the fact that the defendant B. F. Buzard was interested in said business and knew the latter to be abundantly solvent, and made the said advances upon the representation of Pennington that the money was to be used in said business and believing it was to be so used.. "Seventh. The defendant J. R. Pennington frequently declared, after said money had been advanced to him, that he and defendant VOL. LX-2 |