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(273 S.W.)

It should be observed that Judge Williams held that the joinder in the Fossati Case would prejudice the rights of the parties. Where that is true, under the Skipwith Case

reason why the bank cannot have as fair and just a trial in answer to the plea of the defendants as if it had been an independent proceeding by these sureties against it. It will greatly facilitate the administration of justice to sustain such proceedings and save much of the and all others, no joinder would be authortime of the courts in the investigation of ques-ized. Judge Brown clearly shows that in his tions of this character, and we believe that opinion. upon the broad principles underlying our system of procedure, the action of the district court in overruling the exceptions of the bank was proper and that the Court of Civil Appeals erred in reversing the judgment of the district court upon that ground."

We fail to see how the rights of the surety company in the case at bar could have been prejudiced by the joinder of all parties at interest. In fact, it seems to us that, because of Witt's connection with all the parties to the action, it was better to have every issue between them all settled in one suit. In that

way they would confront each other, and

promptly pursue any questions which might arise.

A multiplicity of suits should always be avoided where possible. Since we do not believe any prejudice could have resulted from the joinder in the case at bar, and since there was a community of interests between the various parties, and since the suit was dethe same man, we think the Court of Civil pendent upon the very same transactions by Appeals properly overruled the plea in abatement or demurrer, and held there was no misjoinder.

ion, the Court of Civil Appeals gives its views On pages 7, 8, and 9 of its original opinas to why the rule in the Fossati Case does

not apply here. We concur in those views.

The application contains other assignments. But, we think, they are without merit. Most The lower

In the Fossati Case Judge Williams merely of them raise fact questions. held one thing as follows:

"In order to enforce in this case the right contended for by appellees it would be necessary to hold. without qualification, that in all cases where a judgment against a defendant might give rise to a cause of action in his favor against another he is entitled, as a matter of right, to bring that other into the case. court has never so held."

This

In that case he stated that"The existence and enforcement of a cause of action by the state against appellees might or might not give to the latter a cause of action against appellant, and this is the only connection between the case of the state against appellees and theirs against appellant."

courts are in accord on the facts sustaining the final judgment of the Court of Civil Appeals. Against that judgment, neither the light company nor bank make any protest. We are not prepared to say that there is no evidence sustaining those fact findings by

the lower courts.

Therefore we recommend that the judgment of the Court of Civil Appeals be affirmed.

CURETON, C. J. The judgment recommended in the report of the Commission of Appeals is adopted, and will be entered as the judgment of the Supreme Court.

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 Skipwith Case. In fact, Judge Williams approves the liberal policy applied in that case. But he states that recovery by the state would not necessarily warrant a recovery by the sureties against the Fidelity & Guaranty Company. The proof required for each recovery might be entirely different.

Judge Williams goes on to say that his holding in the Fossati Case, already quoted by us, would not apply, if other considerations were present. We think other circumstances were clearly present in the case at bar, and, as already stated, a recovery by the light company against the bank necessarily authorized a recovery by the latter against the surety company. In that way, surely, the case is entirely different from the Fossati Case.

June 27, 1925.)

1. Insurance 367(1)—Paid-up and extended insurance provisions held inapplicable to policy having no reserve value.

Where life insurance policy, after deducting from excess premiums 22 per cent. of amount of policy, had no reserve value at date of default, and in reality had no reserve value during its entire period, held, that Rev. St. art. 4741, subds. 6, 7, and 9, relating to extended or paid-up insurance where policy has a reserve value, was inapplicable.

2. Insurance 367(1)-Where policy had no value at time of default, provision relating to purchase of other insurance held inapplicabie.

Where policy in question at time of default had no value, beneficiary was not entitled to recover under Rev. St. art. 4741, subd. 9, pro

For other cases see same 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 665 (8) Correspondence between insurer and insured held not to show waiver of forfeiture, or acknowledgment of liability.

Correspondence between insurer and insured, relating to reinstatement of policy, which had lapsed for nonpayment of premiums, held not to show a waiver of forfeiture or acknowledgment of liability on part of insurer.

Certified Questions from Court of Civil Appeals of Second Supreme Judicial District.

Action by Maud H. Gilley against the Missouri State Life Insurance Company. Judgment for defendant, and plaintiff appeals. Questions certified from Court of Civil Appeals. Questions answered.

"A provision which, in event of default in premium payments, after premiums shall have been paid for three full years, shall secure to the owner of the policy a stipulated form of insurance, the net value of which shall be at least equal to the reserve at the date of default on the policy, and on any dividend additions thereto, specifying the mortality table and rate of interest adopted for computing such reserves, less a sum not more than two and one

half per cent. of the amount insured by the policy and of any existing dividend additions thereto, and less any existing indebtedness to the company on the policy. Such provision shall stipulate that the policy may be surrendered to the company at its home office within one month from date of default for a specified 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.

Wagstaff, Harwell & Wagstaff, of Abilene, for appellee.

GERMAN, P. J. This case is before the court on certificate from the Court of Civil Appeals at Fort Worth.

On May 11, 1912, the Hartford Life Insurance Company issued to George W. Gilley a life insurance policy in the sum of $5,000; said policy being what is termed a 20-year pay policy, and the annual premium being $65.80. At the date of issuance, Gilley was 35 years of age. By indorsement and in the face of the policy it was denominated as a "twenty-year term, nonparticipating" policy. Gilley paid the annual premiums on this policy up to and including the premium due May 11, 1920, but did not pay the premium due May 11, 1921, and died September 24, 1921, without the policy being reinstated. This policy did not contain the provisions required by sections 6. 7, 8, and 9 of article 4741 of the Revised Statutes of 1911. It contained an express forfeiture clause as follows: "If any premium is not paid when due the company's liability hereunder shall cease." The policy was assumed by the Missouri State Life Insurance Company, and its liability is exactly the same as the liability of the Hartford Life Insurance Company would have been if there had been no assumption.

This suit was brought by Mrs. Maud H. Gilley, who was named as beneficiary in the policy, to recover the sum of $5,000, with interest. Her contention is that this was such a policy as under the law should contain the provisions required by sections 6, 7, 8, and 9, of article 4741, and that by operation of law these provisions were read into the policy, and liability of the company would be the same as if they were actually a part of the contract.

By article 4741 it is provided that no policy of life insurance shall be issued or de

that the company may defer payment for not more than six months after the application therefor is made. This provision shall not be required in term insurances."

At the time of the issuance of this policy, the Hartford Life Insurance Company was using the American Experience Table of Mortality and the 32 per cent. interest method, and on this basis the policy on the 11th day of May, 1921, had a reserve value of $86.45, under the law. Assuming that there were subject to such deductions as were allowable

no deductions which could be made from this reserve value, it would have purchased on May 11, 1921, $38.74 paid-up insurance on mium on the policy would have extended it the assured, and this amount applied as pre1 year and 241 days from May 11, 1921. that the policy shall also include a table showing the loan values and the options available under the policy in case of default in payment of premiums. Section 9 requires:

It is provided, by section 8 of article 4741,

"A provision that if, in event of default in premium payments, the value of the policy shall be applied to the purchase of other insurances; and if such insurance shall be in force and the to the company and cancelled, the policy may original policy shall not have been surrendered be reinstated within three years from such default, upon evidence of insurability satisfactory to the company and payments of arrears of premiums with interest."

It is the contention of Mrs. Gilley, who will be referred to as plaintiff, that, by virtue of the requirements of section 7 of the law, the insurance company having failed to incorporate in the policy a table showing the options available to the insured, or to designate by the contract what particular benefit should accrue to the insured, in the event of default, the beneficiary was entitled to elect the option most beneficial, and therefor she chose to claim an extension of the

(273 S.W.)

policy; and, the insured having died before the expiration of the period the policy was extended by reason of the reserve, she was entitled to recover the full amount of the insurance. She also contended that section 9, quoted above, requires that the reserve shall be applied to the purchase of extended insurance.

There was a further contention that the company had waived its right to claim a forfeiture, basing this claim upon certain acts which will be hereafter noticed.

Section 6 of the article referred to has reference to the loan value of the policy, and, as no contention is made that the loan privilege has anything to do with the right of plaintiff to recover, that section need not be further considered.

[1] The first question by the Court of Civil Appeals is intended to ascertain whether or not section 7 of the article of the statute has application to a policy such as was issued in this case, which (without deductions being considered) had a reserve at the date of default, and which provided for insurance during a fixed term of years at a designated rate.

The defendant company asserts that, as the law itself provided that as to section 7 "this provision shall not be required in term insurances," it had no application to the policy issued to Gilley, which was, in contemplation of the law, and as understood by all actuaries, "term insurance." Whether or not insurance for a fixed term of years at a fixed rate is technically "term insurance," it is needless for us to say, as it is apparent, from a careful reading of section 7, that it has no application to the policy in question, and it is clear that it was intended that such a policy would fall in the class of "term insurances."

per cent. of the amount of the policy, there is a balance left, then the policy in reality has no reserve value.

In this case all of the actuaries agree that in arriving at the sum of $86.45, which they designate as reserve, they made no allowance for the deduction of 22 per cent. of the amount of the policy, and that, if this 21⁄2 per cent. be deducted, as the law contemplates, and as it must have actually been done by the company, the policy in fact had no reserve value at all. And it is further shown that, under the rates designated by the policy, at no time in the 20-year period would it have had an actual reserve, taking into consideration the deduction allowable under the law. We understand that it is the universal rule among insurance companies in cases of term policies (that is, policies for a designated term of years), where the rate is as it was in this instance, to regard such policies as in reality having no reserve. We are also advised that it has been the uniform practice of the department of insurance in such cases, and with reference to such policies not to require the provisions of sections 6, 7, and 8 to be inserted in the policies. While such policies may not be technically "term insurances," yet they are regarded as in that class, because the law recognizes that they have in reality no reserve value, such as is necessary to secure to the insured paid-up or extended insurance. Of course there is nothing to prevent the parties contracting for the usual options in a policy for a term of years, and, when this is done, the policy would be expected to contain the necessary provisions as indicated in the law. We answer the first question by saying that sections 6, 7, and 9 had no application to the policy of insurance involved in this 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 insurance shall be of a net value equal to the reserve at the date of default, less a sum not more than 2% per cent. of the amount insured by the policy. The law clearly recognizes the rule adopted by insurance companies, in arriving at the value of the reserve of policies, to first deduct from the excess in current premiums 2% per cent. of the amount of the policy, in the nature of a carrying charge; and, if there be an amount left, it represents the real reserve, which may be used for the purpose of obtaining a loan, paid-up insurance, or extended insurance, as the insured may elect. In other words, regardless of the nature of the insurance, unless the ratès are such, and the policy has run a sufficient length of time, that, at the date of default, the accumulated excess in premiums is sufficient that, after deducting therefrom an amount equal to 2%

policy shall be applied to the purchase of other insurance," should be treated as an independent provision of the law and as if it stood alone. A casual reading of the entire section reveals that this contention is unfounded. We have copied this section as it appears in the original act, being chapter 108 of the General Laws of 1909, and it will be observed that this is merely a subjunctive clause, preceded by an "if" and comma, and also followed by a comma. It shows one of the conditions which must obtain before the policy may be reinstated. The thought is exactly the same as if the language read as follows: The policy may be reinstated within three years after default, if the value of the policy has been applied to the purchase of other insurance, and if such insurance be in force and the policy has not been surrendered. As this policy had no value to be applied to the purchase of other insurance,

and no controversy exists as to reinstatement, we answer the second question by saying that the beneficiary was not entitled to recover under section 9 of article 4741.

HOFFMAN et al. v. MAGNOLIA PETROLE-
UM CO. et al. (No. 523-4202.)

(Commission of Appeals of Texas, Section B.
June 27, 1925.)

Mines and minerals 55(2)-Deed conveying mineral rights, if ambiguous, construed against grantor.

A deed conveying interest in mineral rights, if its intention is ambiguous, it is to be construed against grantor rather than grantee. 2. Mines and minerals 55(2)-Specific and restricted intent of deed conveying mineral rights controlling.

If what deed of mineral rights purports to convey is distinctly pointed out, such specific and restricted intent will control, though contrary could be construed as within other language, when considered separately.

[3] On June 21, 1921, the insurance company wrote George W. Gilley a letter, calling. attention to the fact that his policy of insurance had lapsed because he had not paid the premium. He was requested by the company to take up the matter of reinstatement. Blank application was inclosed, with request that it be filled out and returned with remittance to cover the unpaid premium with interest. On July 6, 1921, the company wrote Gilley another letter, stating that the policy had lapsed because of failure to pay the premium due May 11, 1921, and again requested that the application blank be filled out and sent in with remittance, and agreeing that, if necessary, the company would wait on him for a part of the amount due. Gilley replied to this letter, saying, among other things, that he regretted that he had let his policy lapse. He also stated that if he could get the amount of insurance cut down to $2,500 or $3,000 he might consider the matter of reinstatement; but he also stated that he preferred insurance in some home company. On July 26, 1921, the company replied to this letter, stating that it would be satisfactory to reduce the insurance to $3,000. The letter also contained this statement:

"It would simply be necessary that you complete the inclosed release and request form and return it to us along with the policy itself and a remittance of $11.90. This cost would represent the annual premium of $39.48 on the new policy of $3,000, due May 11, 1921, after allowing you a credit for the cancellation of $2,000 of your present policy. Premiums under the new policy would be paid to May 11, 1922. However, before we could consider this change, it would be necessary that the present policy be reinstated."

Nothing further was done about reinstatement, and Gilley died September 24, 1921. We are unable to see anything in this correspondence which would amount to a waiver of forfeiture, or an acknowledgment of liability, and, as there was no reinstatement, we answer the third question by saying that under all the facts plaintiff was not entitled to recover any sum.

CURETON, C. J. The opinion of the Commission of Appeals answering certified questions is adopted, and ordered certified to the Court of Civil Appeals.

PIERSON, J., not sitting.

3. Mines and minerals 55 (2)-Deed conveying mineral rights construed as whole so as to declare evident intention of parties.

A deed conveying mineral rights must, if possible, be considered and made consistent as a whole, and so as to declare evident intention of parties.

4. Mines and minerals

79(1)—Deed held to

convey one-half interest in royalties of entire leased premises.

Under deed conveying to plaintiff undivided one-half interest in all minerals, etc., in 90 acres described by metes and bounds, subject to lease which covered 320 acres, and also one-half of all royalties "due to be paid under the terms of said lease," held, that plaintiff is entitled to one-half interest in royalties or rentals of entire 320 acres.

5. Mines and minerals 79 (7)-Cross-action held to show accrual of royalties from particular acreage in which pleader interested.

Cross-action, alleging conveyance of onefourth of minerals in 90 acres of land, subject to lease, which covered 320 acres, and onefourth of all bonuses, rentals, and royalties, and that there had been produced from "said land" oil and gas of specified value, held to show, as against general demurrer, that royalties had accrued by reason of production on the 90 acres, especially in view of admissions in answers. 6. Pleading 403(1)—Admission of answer aid, as against general demurrer, averments of cross-action.

Admissions contained in answer of defendants, on file when general demurrer of such defendants was considered aias, as against such demurrer, averment of another defendant's cross-action, if there are any omission of allegations in such cross-action.

Error to Court of Civil Appeals of the Fourth Supreme Judicial District.

Suit by Peter L. Hoffman and others against the Magnolia Petroleum Company and others, in which defendant F. A. Weiser interposed a cross-action, From a judgment of the Court of Civil Appeals (260 S. W. 950)

(273 S.W.)

affirming judgment sustaining general demur-
rer to petition and cross-action, plaintiffs
bring error. Reversed and remanded.
Dedmon & Potter and Clay Cooke, all of
Fort Worth, for plaintiffs in error.
Ernest May, of Fort Worth, A. S. Hard-
wicke and O. F. Wencker, both of Dallas,
Goree, Odell & Allen, of Fort Worth, and C.
C. Hampton, of De Leon, for defendants in

error.

STAYTON, J. Peter L. Hoffman, as plaintiff, brought this suit for the recovery of the proceeds of royalties that accrued under an oil lease on a half section of land, basing his right of action upon a deed from lessors to himself. The district court sustained general demurrers to his petition, and the parties who demurred aver as the basis of the decisien, and as correct law, the point that the deed only conveyed the royalty earned by wells drilled upon a tract of 90 acres out of the larger leased tract, whereas the petition did not allege that any wells had been brought in upon this particular 90 acres. The Court of Civil Appeals was of the same opinion, 260 S. W. 950. The defendants give assurance that this was and is the only question in the case; and for that reason, without a critical examination of the petition in other respects, the disposition of the cause will be governed accordingly. The specific inquiry is whether the deed gave plaintiff a right to participate in any royalties under the lease, unless production were had from a well upon the 90

acres.

As is shown by the allegations of the petition, the lease was in ordinary form to one R. O. Harvey as lessee; covered and conveyed the oil and gas under 320 acres out of a section of land in Comanche county; provided for a one-eighth royalty on oil, money royalty on gas, and rentals of $330 every six months, as consideration for deferring the commencement of a well, up to five years; made the rights under it perpetual during production; and negatived all obligation upon lessee to drill upon any particular part of the premises.

The deed to plaintiff is averred to have passed from lessors, Duke and wife, before the completion of any well on the half section, in consideration of $10,000 paid by him. It was delivered nine months after the date of the lease, and granted:

"The following, to wit: One-half (%) interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described lands situated in Comanche county, Texas, to wit: A certain 90 acres" (giving metes and bounds and describing the tract as out of the section already mentioned) "together with the rights of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil, gas, and other minerals and removing the same therefrom."

The instrument continued:

"Said above-described lands being now under an oil and gas lease originally executed in favor of R. O. Harvey and now held by -. It is understood and agreed that this sale is made subject to said lease but covers and includes one-half of all the oil royalty and gas rental or royalty due to be paid under the terms of said lease. It is agreed and understood that 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 paid to the said Peter L. Hoffman and in the event that the said above-described lease for any reason becomes cancelled or forfeited then and in that event the lease interest and all further rentals on said land for gas and mineral privilege shall be owned jointly by Jas. N. Duke and wife, and Hoffman, each owning onehalf interest in all oil, gas and other minerals in and upon said land, together with one-half in* To have and terest in all future rents. to hold the above-described property, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Peter L. Hoffman heirs and assigns, forever."

*

The plaintiff contends that the conveyance to him of "one-half of all of the oil royalty due to be paid under the terms of said lease" is not confined to wells upon the smaller tract. The defendants reply that, since the smaller tract is the subject-matter of the deed, the quoted language should be construed as having reference to it alone, and that any other interpretation would be unreasonable.

Before deciding the question, the court would call to mind that, if the deed is capable of the meaning contended for by plaintiff, there would be nothing unreasonable in holding under the circumstances alleged that, for so substantial a cash consideration, the lessors, having previously conveyed to lessee all of the oil, gas, and minerals under the whole half section, and retained the surface for their own consistent uses, consented to part, not only with their possibility of a reverter in the oil, etc., of the 90 acres, but also with a full one-half of their right to royalties under the lease as an entirety, especially in view of the fact that the reverter was uncertain and the control over the placing of wells impossible. They may not have done that; but it would not have been wrong or inane upon its face if they had. Gypsy Oil Co. v. Schonwald (Okl. Sup.) 231 P. 864. And then again it could have been reasonable from their standpoint, and not unreasonable from that of grantee, if they had restricted their assignment of royalties to those from wells on the 90.

There are a number of rules of construction that will be noticed.

[1-3] This deed, if its intention be ambiguous, is to be construed against grantors rather than against grantee; and yet, if what it purports to convey is distinctly

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