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(273 S.W.) reason why the bank cannot have as fair and It should be observed that Judge Williams just a trial in answer to the plea of the defend- held that the joinder in the Fossati Case ants as if it had been an independent proceeding would prejudice the rights of the parties. by these sureties against it. It will greatly where that is true, under the Skipwith Case facilitate the administration of justice to sus. and all others, no joinder would be authortain such proceedings and save much of the ized. Judge Brown clearly shows that in his time of the courts in the investigation of questions of this character, and we believe that I opinion, upon the broad principles underlying our sys

A multiplicity of suits should always be tem of procedure, the action of the district avoided where possible. Since we do not becourt in overruling the exceptions of the bank lieve any prejudice could have resulted from was proper and that the Court of Civil Ap- the joinder in the case at bar, and since there peals erred in reversing the judgment of the was a community of interests between the district court upon that ground."

various parties, and since the suit was deWe fail to see how the rights of the surety the same man, we think the Court of Civil

pendent upon the very same transactions by company in the case at bar could have been prejudiced by the joinder of all parties at in- Appeals properly overruled the plea in abateterest. In fact, it seems to us that, because ment or demurrer, and held there was no

misjoinder. of Witt's connection with all the parties to the action, it was better to have every issue ion, the Court of Civil Appeals gives its views

On pages 7, 8, and 9 of its original opinbetween them all settled in one suit. In that

as to why the rule in the Fossati Case does way they would confront each other, and

not apply here. We concur in those views. promptly pursue any questions which might arise.

The application contains other assignments. In the Fossati Case Judge Williams merely But, we think, they are without merit. Most

of them raise fact questions. The lower held one thing as follows:

courts are in accord on the facts sustaining “In order to enforce in this case the right con- the final judgment of the Court of Civil Aptended for by appellees it would be necessary to reals. Against that judgment, neither the hold, without qualification, that in all cases light company nor bank make any protest. where a judgment against a defendant might we are not prepared to say that there is no give rise to a cause of action in his favor evidence sustaining those fact findings by against another he is entitled, as a matter of

the lower courts.
right, to bring that other into the case. This
court has never so held.”

Therefore we recommend that the judgment of the Court of Civil Appeals be af

firmed. In that case he stated that

"The existence and enforcement of a cause CURETON, C. J. The judgment recomof action by the state against appellees might mended in the report of the Commission of or might not give to the latter a cause of ac- Appeals is adopted, and will be entered as tion against appellant, and this is the only con- | the judgment of the Supreme Court. nection between the case of the state against appellees and theirs against appellant."

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That one connection, in the absence of “other considerations," did not authorize the join-GILLEY V. MISSOURI STATE LIFE INS. der, as a matter of right. This is clearly the

Co. (No. 656-4163.) ruling in the Fossati Case. That ruling does

(Commission of Appeals of Texas, Section A. not conflict with the facts or holding in the

June 27, 1925.)
Skipwith Case. In fact, Judge Williams ap-
proves the liberal policy applied in that case.

1. Insurance ww367(1)-Paid-up and extended But he states that recovery by the state

insurance provisions held inapplicable to pol. would not necessarily warrant a recovery by

icy having no reserve value. the sureties against the Fidelity & Guaranty

Where life insurance policy, after deductCompany. The proof required for each re- ing from excess premiums 21, per cent. of

amount of policy, had no reserve value at date covery might be entirely different.

of default, and in reality had no reserve value Judge Williams goes on to say that his during its entire period, held, that Rev. St. art. holding in the Fossati Case, already quoted 4741, subds. 6, 7, and 9, relating to extended by us, would not apply, if other considera or paid-up insurance where policy has a retions were present. We think other circum- serve value, was inapplicable. stances were clearly present in the case at 2. Insurance C367(1)-Where policy had no bar, and, as already stated, a recovery by

value at time of default, provision relating the light company against the bank neces

to purchase of other insurance held inapplicasarily authorized a recovery by the latter bie, against the surety company.

In that way, Where policy in question at time of default surely, the case is entirely different from the had no value, beneficiary was not entitled to reFossati Case.

cover under Rev. St. art. 4741, subd. 9, pro

For other cases see game topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

viding that, in event of default, value of policy | livered in this state unless it contains (as shall be applied to purchase of other insurance. set out under section 7): 3. Insurance Om665(8)

Correspondence be. "A provision which, in event of default in tween insurer and insured held not to show premium payments, after premiums shall have waiver of forfeiture, or acknowledgment of been paid for three full years, shall secure to liability.

the owner of the policy a stipulated form of Correspondence between insurer and in- insurance, the net value of which shall be at sured, relating to reinstatement of policy, which least equal to the reserve at the date of default had lapsed for nonpayment of premiums, held on the policy, and on any dividend additions not to show a waiver of forfeiture or acknowl- thereto, specifying the mortality table and rate edgment of liability on part of insurer.

of interest adopted for computing such re

serves, less a sum not more than two and oneCertified Questions from Court of Civil Ap half per cent of the amount insured by the peals of Second Supreme Judicial District.

policy and of any existing dividend additions

thereto, and less any existing indebtedness Action by Maud H. Gilley against the Mis to the company on the policy. Such provision souri State Life Insurance Company. Judg- shall stipulate that the policy may be surrenment for defendant, and plaintiff appeals. dered to the company at its home office within Questions certified from Court of Civil Ap one month from date of default for a specified peals. Questions answered.

cash value at least equal to the sum which

would otherwise be available for the purchase E. M. Overshiner, of Abilene, and Sayles of insurance, as aforesaid, and may stipulate & Sayles, of Eastland, for appellant.

that the company may defer payment for not Wagstaff, Harwell & Wagstaff, of Abilene, more than six months after the application for appellee.

therefor is made. This provision shall not be

required in term insurances." GERMAN, P. J. This case is before the court on certificate from the Court of Civil the Hartford Life Insurance Company was

At the time of the issuance of this policy, Appeals at Fort Worth. On May 11, 1912, the Hartford Life Insur- using the American Experience Table of Mor

tality and the 312 per cent. interest method, ance Company issued to George W. Gilley a life insurance policy in the sum of $5,000; of May, 1921, had a reserve value of $86.45,

and on this basis the policy on the 11th day said policy being what is termed a 20-year subject to such deductions as were allowable pay policy, and the annual premium being

under the law. $65.80. At the date of issuance, Gilley was

Assuming that there were

no deductions which could be made from this 35 years of age. By indorsement and in the face of the policy it was denominated as a

reserve value, it would have purchased on “twenty-year term, nonparticipating” policy: the assured, and this amount applied as pre

May 11, 1921, $38.74 paid-up insurance on Gilley paid the annual premiums on this poli. mium on the policy would have extended it cy up to and including the premium due May 1 year and 241 days from May 11, 1921. 11, 1920, but did not pay the premium due May 11, 1921, and died September 24, 1921, that the policy shall also include a table

It is provided, by section 8 of article 4741, without the policy being reinstated. This policy did not contain the provisions required showing the loan values and the options by sections 6, 7, 8, and 9 of article 4741 of available under the policy in case of default the Revised Statutes of 1911. It contained in payment of premiums. Section 9 requires: an express forfeiture clause as follows: "If “A provision that if, in event of default in any premium is not paid when due the com- premium payments, the value of the policy shall pany's liability hereunder shall cease.” The be applied to the purchase of other insurances; policy was assumed by the Missouri State and if such insurance shall be in force and the Life Insurance Company, and its liability is to the company and cancelled, the policy may

original policy shall not have been surrendered exactly the same as the liability of the Hart- be reinstated within three years from such deford Life Insurance Company would have fault, upon evidence of insurability satisfactory been if there had been no assumption. to the company and payments of arrears of

This suit was brought by Mrs. Maud H. premiums with interest." Gilley, who was named as beneficiary in the policy, to recover the sum of $5,000, with in It is the contention of Mrs. Gilley, who terest. Her contention is that this was such will be referred to as plaintiff, that, by vira policy as under the law should contain the tue of the requirements of section 7 of the provisions required by sections 6, 7, 8, and 9, law, the insurance company having failed of article 4741, and that by operation of to incorporate in the policy a table showing law these provisions were read into the pol- the options available to the insured, or to icy, and liability of the company would be designate by the contract what particular the same as if they were actually a part of benefit should accrue to the insured, in the the contract.

event of default, the beneficiary was entitled By article 4741 it is provided that no pol- to elect the option most beneficial, and thereicy of life insurance shall be issued or de- for she chose to claim an extension of the

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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(273 S.W.) policy; and, the insured having died before { per cent. of the amount of the policy, there the expiration of the period the policy was is a balance left, then the policy in reality extended by reason of the reserve, she was has no reserve value. entitled to recover the full amount of the in In this case all of the actuaries agree that surance. She also contended that section in arriving at the sum of $86.45, which they 9, quoted above, requires that the reserve designate as reserve, they made no allowance shall be applied to the purchase of extended for the deduction of 242 per cent. of the insurance.

amount of the policy, and that, if this 212 There was a further contention that the per cent. be deducted, as the law contemcompany had waived its right to claim a for- plates, and as it must have actually been feiture, basing this claim upon certain acts done by the company, the policy in fact had which will be hereafter noticed.

no reserve value at all. And it is further Section 6 of the article referred to has shown that, under the rates designated by reference to the loan value of the policy, and, the policy, at no time in the 20-year period as no contention is made that the loan priv. would it have had an actual reserve, taking ilege has anything to do with the right of into consideration the deduction allowable plaintiff to recover, that section need not under the law. We understand that it is the be further considered.

universal rule among insurance companies (1) The first question by the Court of Civ- in cases of term policies (that is, policies for il Appeals is intended to ascertain whether a designated term of years), where the rate or not section 7 of the article of the statute is as it was in this instance, to regard such has application to a policy such as was is- policies as in reality having no reserve. We sued in this case, which (without deductions are also advised that it has been the unibeing considered) had a reserve at the date form practice of the department of insurance of default, and which provided for insur- in such cases, and with reference to such ance during a fixed term of years at a des- policies not to require the provisions of secignated rate.

tions 6, 7, and 8 to be inserted in the poliThe defendant company asserts that, as cies. While such policies may not be techthe law itself provided that as to section 7 nically "term insurances,” yet they are re"this provision shall not be required in term garded as in that class, because the law recinsurances,” it had no application to the ognizes that they have in reality no reserve policy issued to Gilley, which was, in con- value, such as is necessary to secure to the templation of the law, and as understood by insured paid-up or extended insurance. Of all actuaries, "term insurance." Whether or course there is nothing to prevent the parties not insurance for a fixed term of years at contracting for the usual options in a policy a fixed rate is technically "term insurance," for a term of years, and, when this is done, it is needless for us to say, as it is apparent, the policy would be expected to contain the from a careful reading of section 7, that it necessary provisions as indicated in the law. has no application to the policy in question, We answer the first question by saying and it is clear that it was intended that such that sections 6, 7, and 9 had no application a policy would fall in the class of "term into the policy of insurance involved in this surances."

suit. The provision of the law which requires [2] Plaintiff insists that the clause in secthat the policy shall secure to the owner a tion 9, which reads that, "in event of destipulate form of insurance, whether paid-up fault in premium payments, the value of the or extended insurance, designates that such policy shall be applied to the purchase of insurance shall be of a net value equal to other insurance,” should be treated as an inthe reserve at the date of default, less a dependent provision of the law and as if it sum not more than 215 per cent. of the stood alone. A casual reading of the entire amount insured by the policy. The law clear- section reveals that this contention is unly recognizes the rule adopted by insurance founded. We have copied this section as it companies, in arriving at the value of the appears in the original act, being chapter reserve of policies, to first deduct from the 108 of the General Laws of 1909, and it will excess in current premiums 2 per cent. of be observed that this is merely a subjunctive the amount of the policy, in the nature of clause, preceded by an "if” and comma, and à carrying charge; and, if there be an also followed by a comma. It shows one of amount left, it represents the real reserve, the conditions which must obtain before the which may be used for the purpose of ob- policy may be reinstated. The thought is taining a loan, paid-up insurance, or extend- exactly the same as if the language read as ed insurance, as the insured may elect. In follows: The policy may be reinstated withother words, regardless of the nature of the in three years after default, if the value of insurance, unless the rates are such, and the the policy has been applied to the purchase policy has run a sufficient length of time, of other insurance, and if such insurance be that, at the date of default, the accumulated in force and the policy has not been surrenexcess in premiums is sufficient that, after dered. As this policy had no value to be deducting therefrom an amount equal to 24 applied to the purchase of other insurance,

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and no controversy exists as to reinstatement, we answer the second question by saying HOFFMAN et al. v. MAGNOLIA PETROLEthat the beneficiary was not entitled to re

UM CO. et al. (No. 523—4202.) cover under section 9 of article 4741.

(Commission of Appeals of Texas, Section B. [3] On June 21, 1921, the insurance com

June 27, 1925.) pany wrote George W. Gilley a letter, calling 1. Mines and minerals ew55(2)—Deed convey, attention to the fact that his policy of in

ing mineral rights, if ambiguous, construed surance had lapsed because he had not paid against grantor. the premium. He was requested by the com A deed conveying interest in mineral rights, pany to take up the matter of reinstatement. if its intention is ambiguous, it is to be conBlank application was inclosed, with request strued against grantor rather than grantee. that it be filled out and returned with remit- 2. Mines and minerals eww 55(2)—Specific and tance to cover the unpaid premium with in restricted intent of deed conveying mineral terest. On July 6, 1921, the company wrote rights controlling. Gilley another letter, stating that the policy If what deed of mineral rights purports had lapsed because of failure to pay the to convey is distinctly pointed out, such specific

and restricted intent will control, though conpremium due May 11, 1921, and again requested that the application blank be filled trary could be construed as within other lan

guage, when considered separately. out and sent in with remittance, and agreeing that, if necessary, the company would 3. Mines and minerals Om55(2)—Deed convey. wait on him for a part of the amount due.

ing mineral rights construed as whole so as

to declare evident intention of parties. Gilley replied to this letter, saying, among

A deed conveying mineral rights must, if other things, that he regretted that he had

possible, be considered and made consistent as a let his policy lapse. He also stated that if whole, and so as to declare evident intention of he could get the amount of insurance cut parties. down to $2,500 or $3,000 he might consider 4. Mines and minerals 79(1)-Deed held to the matter of reinstatement; but he also

convey one-half interest in royalties of entire stated that he preferred insurance in some leased premises. home company.

On July 26, 1921, the com Under deed conveying to plaintiff undivided pany replied to this letter, stating that it one-half interest in all minerals, etc., in 90 would be satisfactory to reduce the insur- acres described by metes and bounds, subject ance to $3,000. The letter also contained this to lease which covered 320 acres, and also

one-half of all royalties "due to be paid under statement:

the terms of said lease,held, that plaintiff is

entitled to one-half interest in royalties or rent"It would simply be necessary that you com als of entire 320 acres. plete the inclosed release and request form and return it to us along with the policy itself and 5. Mines and minerals Ow79 (7) -Cross-action a remittance of $11.90. This cost would rep

held to show accrual of royalties from parresent the annual premium of $39.48 on the new ticular acreage in which pleader interested. policy of $3,000, due May 11, 1921, after allow Cross-action, alleging conveyance of oneing you a credit for the cancellation of $2,000 fourth of minerals in 90 acres of land, subject of your present policy. Premiums under the to lease, which covered 320 acres, and onenew policy would be paid to May 11, 1922. fourth of all bonuses, rentals, and royalties, and However, before we could consider this change, that there had been produced from "said land" it would be necessary that the present policy oil and gas of specified value, held to show, as be reinstated."

against general demurrer, that royalties had accrued by reason of production on the 90 acres,

especially in view of admissions in answers. Nothing further was done about reinstate

6. Pleading w403(1)-Admission of answer ment, and Gilley died September 24, 1921.

aid, as against general demurrer, averments We are unable to see anything in this corre

of cross-action. spondence which would amount to a waiver Admissions contained in answer of defendof forfeiture, or an acknowledgment of lia- ants, on file when general demurrer of such debility, and, as there was no reinstatement, fendants was considered aias, as against such we answer the third question by saying that demurrer, averment of another defendant's under all the facts plaintiff was not entitled cross-action, if there are any omission of alle

gations in such cross-action. to recover any sum,

Error to Court of Civil Appeals of the CURETON, C. J. The opinion of the Com- Fourth Supreme Judicial District. mission of Appeals answering certified ques

Suit by Peter L. Hoffman and others tions is adopted, and ordered certified to against the Magnolia Petroleum Company the Court of Civil Appeals.

and others, in which defendant F. A. Weiser

interposed a cross-action, From a judgment PIERSON, J., not sitting.

of the Court of Civil Appeals (260 S. W. 950) For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

error.

*

(273 S.W.) affirming Judgment sustaining general demur The instrument continued: rer to petition and cross-action, plaintiffs

"Said above-described lands being now under bring error. Reversed and remanded.

an oil and gas lease originally executed in favor Dedmon & Potter and Clay Cooke, all of of R. O. Harvey and now held by - It is Fort Worth, for plaintiffs in error.

understood and agreed that this sale is made Ernest May, of Fort Worth, A. S. Hard- subject to said lease but covers and includes wicke and O. F. Wencker, both of Dallas, one-half of all the oil royalty and gas rental Goree, Odell & Allen, of Fort Worth, and C. said lease. It is agreed and understood that

or royalty due to be paid under the terms of C. Hampton, of De Leon, for defendants in one-half of the money rental which may be paid

to extend the term within which a well may be

begun under the terms of said lease is to be STAYTON, J. Peter L. Hoffman, as plain- paid to the said Peter L. Hoffman and in the tiff, brought this suit for the recovery of the event that the said above-described lease for

any reason becomes cancelled or forfeited then proceeds of royalties that accrued under an oil lease on a half section of land, basing his ther rentals on said land for gas and mineral

and in that event the lease interest and all furright of action upon a deed from lessors to privilege shall be owned jointly by Jas. N. Duke himself. The district court sustained general and wife, and Hoffman, each owning onedemurrers to his petition, and the parties half interest in all oil, gas and other minerals who demurred aver as the basis of the deci- in and upon said land, together with one-half in

To have and sion, and as correct law, the point that the terest in all future rents. deed only conveyed the royalty earned by to hold the above-described property, together wells drilled upon a tract of 90 acres out of with all and singular the rights and appurte

nances thereto in anywise belonging unto the the larger leased tract, whereas the petition said Peter L. Hoffman heirs and assigns, fordid not allege that any wells had been brought ever." in upon this particular 90 acres. The Court of Civil Appeals was of the same opinion, 260

The plaintiff contends that the conveyance S. W. 950. The defendants give assurance to him of “one-half of all of the oil royalty that this was and is the only question in the *

due to be paid under the terms of case; and for that reason, without a critical said lease" is not confined to wells upon the examination of the petition in other respects, smaller tract. The defendants reply that, the disposition of the cause will be governed since the smaller tract is the subject-matter accordingly. The specific inquiry is whether of the deed, the quoted language should be the deed gave plaintiff a right to participate construed as having reference to it alone, and in any royalties under the lease, unless pro- that any other interpretation would be unduction were had from a well upon the 90 reasonable.

Before deciding the question, the court As is shown by the allegations of the peti- would call to mind that, if the deed is capation, the lease was in ordinary form to one ble of the meaning contended for by plaintiff, R. O. Harvey as lessee; covered and con- there would be nothing unreasonable in holdveyed the oil and gas under 320 acres out of ing under the circumstances alleged that, for a section of land in Comanche county; pro- so substantial a cash consideration, the lesvided for a one-eighth royalty on oil, money sors, having previously conveyed to lessee all royalty on gas, and rentals of $330 every six of the oil, gas, and minerals under the whole months, as consideration for deferring the half section, and retained the surface for commencement of a well, up to five years; their own consistent uses, consented to part, made the rights under it perpetual during not only with their possibility of a reverter production; and negatived all obligation in the oil, etc., of the 90 acres, but also with upon lessee to drill upon any particular part a full one-half of their right to royalties unof the premises.

der the lease as an entirety, especially in view The deed to plaintiff is averred to have of the fact that the reverter was uncertain passed from lessors, Duke and wife, before and the control over the placing of wells imthe completion of any well on the half sec- possible. They may not have done that; but tion, in consideration of $10,000 paid by him. I it would not have been wrong or inane upon It was delivered nine months after the date its face if they had. Gypsy Oil Co. v. Schonof the lease, and granted :

wald (Okl. Sup.) 231 P. 864. And then again "The following, to wit: One-half (14) inter- it could have been reasonable from their est in and to all of the oil, gas and other min- standpoint, and not unreasonable from that erals in and under and that may be produced of grantee, if they had restricted their asfrom the following described lands situated in signment of royalties to those from wells on Comanche county, Texas, to wit: A certain the 90. 90 acres” (giving metes and bounds and de

There are a number of rules of construcscribing the tract as out of the section already tion that will be noticed. mentioned) “together with the rights of ingress and egress at all times for the purpose of min

[1-3] This deed, if its intention be ambiging, drilling and exploring said lands for oil, uous, is to be construed against grantors gas, and other minerals and removing the same rather than against grantee; and yet, if therefrom."

what it purports to convey is distinctly

acres.

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