are to be delivered thereunder; and after delivery by said party of the first part of said cattle, and acceptance by said parties of the second part, all liability of said party of the first part under this contract shall cease. And, in part performance of their obligation to pay said sum per head for said cattle, said parties of the second part have paid the sum of five thousand ($5,000) dollars, receipt of which said party of the first part acknowledges; and, in the event said parties of the second part shall receive and pay for such cattle as stated, then said sum paid is to be credited upon the gross purchase price for the cattle delivered under this contract. But, in the event said parties of the second part shall fail to perform their contract with reference to said cattle, then said sum of five thousand ($5,000) dollars so paid in cash shall be retained by said party of the first part as his agreed and liquidated damages arising from such breach now stipulated in amount, and said party of the first part shall not be compelled to refund any part of the same, nor be permitted to recover any other or further damages from such breach: provided, however, if said parties of the second part shall in any manner have received said cattle, or any part thereof, without payment therefor as before stated, nothing herein shall prevent the recovery by said party of the first part of the purchase price of the same." The sum of $5,000 was not paid in cash to appellee as the contract recites, but on the 10th day of March R. W. Rogers drew his draft in favor of appellee on appellants therefor, which, together with the contract, with above letter of M. Halff & Bro. attached thereto, was at once sent by appellee to his agent in San Antonio, the Alamo National Bank, and was duly presented, with the accompanying papers, to the appellants for payment, whereupon they refused to pay it, and repudiated the contract, upon the ground they had not authorized its execution by Rogers. D. M. O'Connor, one of the parties to whom the letter of March 7, 1893, was addressed, is appellee's brother. He never did reside in Victoria, but resided in Refugio county. The appellee was then, and had been for many years, a resident of the city and county of Victoria, and, when the contract was executed, had in his pasture in McMullen county, known as the "Campbell Ranch," 3,000 head of cattle, which were contemplated by the contract, and could have been delivered in compliance with its terms. The understanding between M. Halff & Bro. and Rogers was that the former were to furnish the money to purchase the cattle, that the latter should buy and sell them, and that they were to divide the profits. In making the contract with appellee, Rogers thought that he was fully authorized, according to his understanding with M. Halff, of M. Halff & Bro., to make the contract with O'Connor and draw the draft. O'Connor had no notice of any limitation of Rogers' authority, and thought he was authorized by M. Halff &

Bro. to make the contract, and, in making it, acted in good faith.

Conclusions of Law.

Under the first, second, third, fourth, sixth, seventh, ninth, and eleventh assignments of error are asserted the following propositions: First. The letter of March 7, 1893, did not authorize Rogers to execute so much of the contract, for the breach of which this suit is brought, as stipulates and fixes $5,000 as the amount of damages recoverable for a breach thereof. Second. The provision in the contract with reference to O'Connor's retaining the $5,000 recited to have been paid as liquidated damages in the event M. Halff & Bro. should fail to carry out the contract is a provision for paying a penalty, which Rogers had no authority to bind his principals to pay. Third. A stipulation in a contract whereby one of the parties thereto agrees to pay the other a fixed sum, as damages occasioned by a breach thereof, will be treated by the court as a penalty, and the full amount thereof not being recoverable unless the one claiming the sum alleges and proves that the amount so fixed bears some proportion to the amount of damages actually sustained by the person suing. After interposing propositions in contravention of these, the appellee urges as an independent counter proposition the following: "The petition charged M. Halff & Bro. and Rogers with liability upon the con tract sued upon, as partners; and, as such partnership was established by the entire and uncontradicted testimony in the case, the court correctly charged the jury to find for plaintiff, as no other verdict and judgment could have been rendered in this case." We will consider these propositions in the order presented:

1. Did the letter written by M. Halff & Bro. authorize the execution of a contract for the purchase of cattle, with a stipulation for liquidated damages in the event of a breach by appellants of such contract? It is argued by appellants that, as their letter constituted Rogers their special agent, the power thereby conferred upon such special agent must have been strictly pursued, else they, as principals, cannot be bound by his contract, and that, when a special agency is created by an instrument in writing, such writing will be strictly construed, and will be held to include those powers only which are expressly given by the terms of the instrument, and those which are necessary, essential, and proper to carry out those expressly given. It is eementary that a principal is not bound by acts of a special agent who exceeds his authority, unless the principal has held him out as possessing a more enlarged authority. If therefrom (the acts of the principal respecting his agent) no authority can be inferred, the power of the agent to act for his principal must be found in the writing conferring it; and no powers not expressed, except such as are necessary and proper to carry out that

expressly given, can be ingrafted on the instrument. But "when an express authority is conferred by an informal instrument, such as a letter of advice or instruction, it is construed with more liberality than a formal and deliberate instrument. This rule has its foundation in the convenience and necessities of a commercial community, and would seem indispensable to general confidence and security in the operation of trade and commerce." Merriman v. Fulton, 29 Tex. 105; Story, Ag. §§ 82, 83, 75. "An agent may always bind his principal when acting within the scope of his authority, and the extent of is authority is to be measured by the nature of the business, the subject-matter of the contract, the varying circumstances of the transactions involved, and it includes, unless expressly excluded, all the usual modes and means of accomplishing the objects of the agency." Miller v. McDannell, Posey, 1 Unrep. Cas. 258; Story, Ag. § 85. "Every delegation of authority carries with it, as an incident, power to do those things which are reasonable to be done in order to effectuate the purpose for which it was created." Collins v. Cooper, 65 Tex. 460. "It is the duty of the principal, if he desires an authority to be executed in a particular manner, to make his terms so clear that they cannot be misconstrued. If the authority be reasonably susceptible of two different meanings, and the agent, in good faith and without negligence, adopts one of them, the principal cannot be heard to assert, either as against the agent or against third persons who have, in good faith and without negligence, relied upon the same construction, that he intended the authority to be executed in accordance with the other interpretation." Mechem, Ag. § 315. The foregoing principles are quoted in appellee's brief, from which we have copied in the order they are therein arranged. In the light of them, appellee's counsel make the following argument (which we adopt), to show that, under a reasonable construction of the letter, Rogers was authorized, in the contract of purchase, to make a provision for liquidated damages in the event of its breach: "This letter says, Rogers comes to see you to purchase your cattle,' etc.; also any purchase he may make of you for joint account for us and himself we have authorized him to do so,' etc. Suppose we consider these words alone, for certainly there is nothing in the other part of the letter to limit their import. Then Rogers is authorized to make any purchase.' One of the definitions Webster gives of the verb 'to purchase,' used in this letter, is 'to bargain for,' and of the noun 'purchase,' also used by Halff & Bro., is 'bargain'; and. in the sense as here used, clearly this meaning is intended. Then Halff & Bro. say by this letter, 'Rogers comes to bargain for your cattle,' and any bargain he may make, he is authorized to make.' This bargain, then, which Rogers is authorized to make, comprehends the power to agree to the various terms of v.37s. w. no.5-16

the purchase, the number of cattle to be bought, and when and where to be delivered, the price to be paid for said cattle, how much to be paid in cash, and when balance to be paid, and all the details or terms of such pargain. Is it not absurd to contend that in this case Rogers, with unqualified power to buy, at whatever price he pleases, whatever number of cattle he chooses, has not power, for the protection of both Halff & Bro. and himself, as well as of O'Connor, to stipulate with the latter for liquidated damages in the event of a breach? Rogers is authorized to make 'any purchase.' His authority is in no wise limited. This contract is a purchase, and hence within his authority; and one of its terms, demanded by O'Connor or Rogers (the evidence does not disclose which), is such provision for liquidated damages, apparently inserted for the protection of both parties. We insist that this stipulation for liquidated damages is a mere term of the purchase which was authorized. Suppose O'Connor had refused to sell his cattle unless he was paid for them in cash when the contract was executed; can it be denied but that Rogers had the power to acquiesce in such demand? Certainly not. Then suppose O'Connor said he would not sell his cattle unless Rogers agreed to provide for liquidated damages in the contract; is it not equally a term of a purchase which Rogers had the right to assent to, as a something 'reasonable to be done to effectuate the purposes of the agency,' and certainly authorized when his principals did not provide that he should not agree to such demand? In other words, when Halff & Bro. authorized Rogers to make any purchase,' they meant what the letter said,-that any bargain for cattle which Rogers might think to the interests of Halff & Bro. and himself, he was authorized to make; and this being a purchase, even though it contained such liquidated damages provision, still Rogers thought it to be to the interests of himself and Halff & Bro. to make such purchase, and accordingly he was empowered by said letter to execute the contract evidencing such bargain. We think we can go further, and say not only was Rogers authorized to make such stipulation in said contract, but also that this letter, fairly construed, directed Rogers to make this very contract, with such liquidated damages provision; for the letter, after declaring Rogers' authority to purchase and execute a contract thereof, then declares that 'we [M. Halff & Bro.] have agreed to make any reasonable advance on delivery of contract at any bank in San Antonio,' thus evidencing willingness to pay on presentation of said contract. Let us consider, to accomplish what purposes could they have made payment on presentation of said contract at any bank in San Antonio. This could only be-First, as a simple part payment on the cattle; and, second, as a sum to be received by O'Connor to insure him in the performance of said contract. Now, if O'Connor re

ceived money on account of said purchase price simply, it would not insure the performance of said contract, as, in the event his actual damages from a breach should have been less, he could be compelled to refund the excess by him received. He could only be insured or guarantied in its performance by a liquidated damages provision, and payment of the sum agreed upon. These are the only two purposes we can conceive of which the payment on presentation of said contract could serve. Then when Halff & Bro. say in said clause of this letter that they will make any reasonable advance on delivery of said contract,' had they said no more, it might well be argued that it expressed a willingness to pay on account of the purchase price; and still, in the absence of an express direction that it should not be otherwise paid, we think Rogers would have been authorized to contract for liquidated damages. But when the letter further declares such sum to be paid as an advance on contract, and as to fulfillment of same,' what else can it mean, except that this sum is to be paid both on account and to insure fulfillment? When Halff & Bro. wrote, 'as an advance on contract,' they had fully covered the first idea of part payment. When they added, and as to the fulfillment of same,' they showed an intention that the payment should serve another purpose also, and equally covered the idea that this sum so paid should be the liquidated damages to O'Connor from a breach of said contract; that is, as a sum paid to insure the fulfillment thereof." We think this argument demonstrates conclusively that appellants' first proposition cannot be maintained, and that a fair and reasonable construction of the letter authorizes Rogers, in the contract of sale, to stipulate for liquidated damages in the event of its breach by his principals.

2. Having determined that Rogers was authorized by Halff & Bro. to make a contract for stipulated damages in the event of its breach, we are brought to the consideration of appellants' second proposition, which is that the provision authorizing O'Connor to retain $5,000 in the event appellants should fail to carry out, the contract is a provision for the payment of a penalty, for which Rogers was not authorized to bind his principals. The provision is unambiguous. It is a stipulation, plainly and clearly expressed, for liquidated damages in the event of a breach of the contract. Indeed, it is so clear that no other reasonable construction can be placed upon it. The subject-matter of the contract was such that the parties had the right to agree upon and stipulate the damages in the event of a breach of the contract. Scott, 70 Tex. 442, 7 S. W. 777; Yetter v. Hudson, 57 Tex. 604; Wright v. Dobie, 3 Civ. App. 194, 22 S. W. 66. In fact, it is not seriously contended by appellants that the stipulation is for a penalty; but they urge that it should be treated as such, for the reasons

Eakin v.

stated in their third proposition, which we will now consider.

3. It is said by Chief Justice Gaines in Collier v. Betterton (Tex. Sup.) 29 S. W. 468: "It would seem that, if the express intention of the parties to a contract should govern in every case, when they say that a certain sum shall be paid as liquidated damages in case of its breach it should be construed as fixing the amount of a recovery; and yet, * notwithstanding such provision, in certain cases the damages may be limited to a just compensation for the loss which has been suffered. Therefore the principle would seem to be that, although a sum may be named as liquidated damages, the courts will not so treat it, unless it bear such proportion to the actual damages that it may reasonably be presumed to have been arrived at upon a fair estimation of the parties of the compensation to be paid for the prospective loss. If the supposed stipulation greatly exceed the actual loss, if there be no approximation between them, and this be made to appear by the evidence,-then, it seems to us, and then only, should the actual damages be the measure of the recovery." It is not denied in this case that the contract was broken by appellants. It being broken, damages will be presumed to flow from its breach. These damages must be either actual or liquidate 1. The contract expressly provides for the latter. No approximation is made to appear by the evidence between the actual and the stipulated damages. This not appearing, the actual damages, under the rule quoted, cannot be the measure of recovery; hence the basis of recovery must be the damages stipulated in the contract. Therefore appellants' third proposition is inapplicable.

4. We think that appellee's counter proposition is fully sustained by the record, and that, as a partner of Halff & Bro. in the purchase of the cattle, Rogers could and did, by his contract, stipulate for liquidated damages, for which appellants are liable. There is, in our opinion, no error assigned that requires a reversal of the judgment, and it is affirmed.

1. A grantor, after having conveyed a right of way over his land to a railway company, conveyed to it a strip of land described as "beginning at the north line of the A. survey, and thence south to stake No. 2,900 as put down by said railway company, the same to extend 150 feet in width west of the right of way of said railway as the same has already been granted." The right of way did not cross the north line of A. survey, as it was supposed to do by the parties,

1 Rehearing denied.

but entered the survey on the northeast line, and a line directly north from stake No. 2,900 would not touch the north line of the survey. Held, that the grant conveyed a strip 150 feet wide directly west of the right of way, though, due to the slope of the A. survey, it was only 97 feet wide at the north end.

2. The act of a grantor after the execution of the deed cannot change the effect of the deed as against the grantee.

Appeal from district court, Hill county; J. M. Hall, Judge.

Suit by the Waco Building & Loan Association against the Missouri, Kansas & Texas Railway Company of Texas and others. From a judgment for plaintiff, defendant Missouri, Kansas & Texas Railway Company appeals. Reversed.

Stanley, Spoonts & Thompson, for appellant. Clark & Bolinger, for appellees.

FLY, J. This suit was instituted by the Waco Building & Loan Association against the St. Louis & Southwestern Railway Company of Texas, the Missouri, Kansas & Texas Railway Company of Texas, and J. A. Chumley, to recover a parcel of land known as a part of block No. 7 of the Harris addition to the town of Hillsboro. A jury was waived, and, the case being heard by the court, judgment was rendered in favor of the Waco Building Association for the land in controversy. It was agreed by said association that Chumley be permitted to remove his improvements from the land, and the agreement was embodied in the judgment. The Missouri, Kansas & Texas Railway Company alone appealed.

The case is one of boundary, the contention being as to the boundary line between a parcel of land sold by W. G. Harris to F. P. ¡loard, and by Hoard sold to the Waco Building Association, and a parcel of land sold by W. G. Harris to the Missouri, Kansas & Texas Railway Company. In June, 18 2, W. G. Harris sold to F. P. Hoard the following described land: "Block No. seven (7) of the Harris addition to the town of Hillsboro, in Hill county, Texas, said block fronting on the north on the north line of the J. L. Austin survey, east on the M. P. R. R. reservation, south on a 30-foot alley in said addition, and west on a 50-foot street, as shown by plat of said addition." It was agreed that the reservation referred to as "M. P. R. R. Reservation" was the property of ap pellant. On the 3d day of February, 1881, Harris and wife conveyed to the Missouri, Kansas & Texas Railway Company the right of way over 95 acres off the J. L. Austin survey of 320 acres of land adjoining the town of Hillsboro, "the same to extend fifty feet in width on each side of the center of the track of said railway." Afterwards, on May 10, 1 81, Harris and wife conveyed to the same railway company land described as follows: "Beginning at the north line of the J. L. Austin survey, and thence south to stake No. 2,900, as put down by said railway company, the same to extend one hundred and fifty feet in width on west of the right of way of said rail

The

way as the same has already been granted.” The Harris addition was platted after the sale by Harris to the appellant. The evidence shows that appellant's railroad track does not cross the north line of the J. L. Austin survey, but enters the tract on its northeast line. description of the land in the deed of Harris to appellant does not fix the point of beginning on the north line of the Austin survey, and it is necessary to take stake No. 2,900 as the fixed point from which to determine the first call in the deed. A line run directly north from stake 2,900 would not touch the north line of the Austin survey, but the language of the call does not necessarily call for a due north course. The language of the deed indicates an intention to convey a parcel of land on the Austin survey lying directly west of the railroad right of way, 150 feet in width and in length extending from the north line of the Austin survey to stake No. 2,900. The force of the language is not weakened by proof of the fact that the shape of the land would preclude the land from being more than 97 feet wide at the north end. The language of the deed from Harris to appellant indicates that the parties to it labored under the impression that the track of the railroad crossed the north line of the Austin survey, while in truth it did not do so, but crossed a continuation of said north line, which was the north line of the Caruthers survey at a point about 130 feet from the northeast corner of the Austin survey. This mistake had no effect, however, in invalidating the deed.

The acts of Harris after he had executed the deed to appellant could not vary or change the effect of the deed. There was no testimony that tended to show that appellant acquiesced in or consented to what Harris did. We are of the opinion that the judgment is erroneous, and it is reversed, and judgment here rendered that the Waco Building Association take nothing by its suit, and that it pay all costs of this and the lower court.

GALVESTON, H & S. A. RY. CO. v. JOHNSON.1 (Court of Civil Appeals of Texas. 1896.)

CONNECTING CARRIERS

June 17,

LIABILITY FOR DAMAGES TO FREIGHT.

1. Where the contract of shipment over connecting lines limits the liability of defendant, the receiving carrier, to damages occurring on its lines, and there is evidence that the damages occurred beyond defendant's line, it is incumbent on the shipper to show that defendant was jointly interested in the business, or participated in the operation of the line on which the damages occurred.

2. The association of connecting carriers, under an agreement that each shall bear the expenses of the operation of its own line, and that the gross receipts for the continuous transportation of freight, for which one rate is given, shall be divided pro rata, does not render them

1 Rehearing denied.

partners, and jointly liable for damages to goods on any line, where the contract of shipment limits each carrier's liability to damages occurring on its own line.

Appeal from district court, Medina county; Eugene Archer, Judge.

Action by H. L. Johnson against the Galveston, Harrisburg & San Antonio Railway Company and another, as to which the action was dismissed. There was a judgment for plaintiff, and defendant the Galveston, Harrisburg & San Antonio Railway Company appeals. Reversed.

Upson, Bergstrom & Newton, for appellant. B. B. Rose and Ed de Montel, for appellee.

NEILL, J. This suit was brought by the appellee against the appellant and the Southern Pacific Company for $2,000, damages to horses, mules, and cattle shipped over appellant's road. It is alleged in the petition that appellant and the Southern Pacific Company are, and were in November, 1891, jointly engaged in operating the line of railway owned by the Galveston, Harrisburg & San Antonio Railway Company, extending through Medina county; that they were on the date named common carriers jointly of live stock, from San Antonio, Tex., to the city of New Orleans, La., at which time appellee delivered to them, in San Antonio, 26 head of horses, 28 head of mules, and 60 head of cattle, which they received as common carriers, and, for a recompense, undertook and agreed safely and securely to carry the horses and mules to the city of New Orleans, and the cattle to Algiers, La., a station on their line, between San Antonio and New Orleans, and at such stations, respectively, to deliver the stock safely to appellee; that they negligently failed to safely and securely transport the animals in accordance with their duty as common carriers; and that through such negligence, when delivered at said points, they were damaged in the sum sued for. The appellant filed a sworn answer, in which it averred that, at the time mentioned in the petition, it owned and operated a line of railway extending, in the state of Texas, from El Paso to the city of Houston, which was solely operated by itself, and that appellant was in no wise in partnership or jointly operating the line of railway known as the Galveston, Harrisburg & San Antonio Railway Company with the Southern Pacific Company. It then pleaded specially: That the stock were received and shipped over its road under a written contract, which provided (1) that no action against appellant for the recovery of any claim by virtue of the contract should be sustainable in ang court of law or equity unless such action was commenced within 40 days next after the damages should have accrued, etc.; and (2) that it should not be liable for anything occurring to said stock after leaving the lines of the Galveston, Harrisburg & San Antonio Railway Company, except to protect the through rate of freight. That the suit had not beeu com

menced within 40 days after the alleged accrual of the damages; and that it appears from the contracts that the stock were to be consigned to a point beyond the Galveston, Harrisburg & San Antonio Railway Company's lines. That it operated no line east of Houston. That the stock were not injured on its line, and, if injured or damaged at all, such injury or damage was done beyond its line. An exception was sustained to that part of the answer which sought to limit, by reason of the contract, appellee's right to sue to within 40 days after the accrual of his cause of action. The appellee dismissed as to the Southern Pacific Company, and the trial resulted in a verdict and judgment against the appellant for $1,300, from which it has appealed. The contracts of shipment were introduced in evidence, and were as pleaded.

The assignment of error which complains of the court's sustaining the exception of appellee to appellant's answer, above referred to, was settled against the appellant on a prior appeal, as was the question as to the sufficiency of appellee's petition. Railway Co. v. Johnson (Tex. Civ. App.) 29 S. W. 428.

As there was evidence going to show that the damage occurred beyond appellant's line, and as the contract expressly limited its liability to its own line, it was incumbent upon appellee to show that appellant was jointly interested in the business or participated in une operation of the line on which the damages were shown to have occurred. Carriers over different routes, who associate themselves under a contract for a division of profits in certain proportions, or of the receipts after deducting expenses, are jointly liable as partners to third persons; but no joint liability exists when the agreement is that each shall bear the expenses of his own route, and that the gross receipts shall be divided in proportion to the distance or otherwise. Pearce v. Railroad Co.. 21 How. 441; Champion v. Bostwick, 18 Wend. 175; Cobb v. Abbot, 14 Pick. 289; Hart v. Railroad Co., 8 N. Y. 37; Quinby v. Vanderbilt, 17 N. Y. 306. Nor is a partnership or joint liability between carriers created by the single fact that one rate is given for the carriage of a continuous route. Burroughs v. Railroad Co., 100 Mass. 26; Aigen v. Railroad Co., 132 Mass. 423; Railroad Co. v. Trippe, 42 Ark. 465; Snider v. Express Co., 63 Mo. 383. And, although the carrier receiving the goods has an arrangement with the next carrier for rates on through fare to be divided pro rata, it will not be liable under a through contract beyond its own line where the stipulation in the bill of lading given is that goods are to be transported to the terminus of its road, and thereafter transferred to agents of connecting roads, and the company alone in whose care the goods are damaged shall be answerable. Railroad Co. v. Pontious, 19 Ohio St. 221. And in this state it is held that a railroad company entering into a contract with connecting lines for carrying cattle, the con