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way, with the additional privilege of turning the right over to any other person at its pleasure. We are celar that the capital to be invested and the corporation created are to be held responsible for the misuse of the franchise, no matter by whom it is done. The corporation cannot thus escape the obligations implied in its acceptance of the charter. The charter is a contract between the company and the public, and as it is the right of the company to demand that the courts shall protect it against the infringement of its rights by the public, so it is the duty of the courts to protect the public against the misuse of its franchise by the company."

Quotations from other authorities would be cumulative merely. We find the following cases to be instructive and to support the foregoing views: O'Bannion's Estate v. So. R. Co. (Ky.) 110 S. W. 329; Jefferson v. C. & N. W. R. Co., 117 Wis. 549, 94 N. W. 289; I. C. R. Co. v. Kanouse, 39 Ill. 272, 89 Am. Dec. 307; T., P. & W. R. Co. v. Rumbold, 40 Ill. 143; G., C. & S. F. v. Bryant et al., 30 Tex. Civ. App. 4, 66 S. W. 804; Penn. Co. & Penn. R. Co. v. Greso, 79 Ill. App. 128; Smith, Adm'r, v. C. & E. I. R. Co. et al., 163 Ill. App. 476; C., St. L. & N. O. R. Co. v. Rowell, 151 Ky. 313, 151 S. W. 950; C. & W. I. R. Co. v. Newell, 212 Ill. 332, 72 N. E. 416; M., K. & T. R. Co. v. Owens (Tex Civ. App.) 75 S. W. 579; Moylan v. C. R. & I. R. Co., 172 Ill. App. 645; Railway Co. v. Barron, 5 Wall. 90, 18 L. Ed. 591; St. Louis & S. W. R. Co. of Texas v. McGrath (Tex. Civ. App.) 160 S. W. 444.

Under the authorities and as a matter of elementary justice, license to use the track of a railway company may be established by continuous acquiescence on the part of the company, especially when the company, as in the case at bar, had open and notorious notice of the acts of the licensee and adopted no measures to prevent the public from being misled. We hold in such a case that the railway company owes passengers of the licensee the degree of care and protection due to passengers on the trains of the company; that such passengers are not mere licensees; that in such a case the company is liable for negligence of the licensee to the same extent as if there existed express permission or contract to so use the company's track; that a railway company, having obtained valuable franchises from the public, enters into an implied contract with the public that its franchises shall be used by itself, and that it will answer to the public for any abuse of such franchises by third persons consented to or acquiesced in by the railway company.

Whenever a railway company, by long-continued silence and acquiescence, leads the public to believe and to act upon the belief that any person or corporation assuming to exercise its franchises or any portion there of, with knowledge on the part of the officers and agents of the company, has the consent of such railway company so to do, it may be compelled to respond in damages to third persons, acting upon such belief, in whose favor a cause of action may arise for injury, brought about at the particular time of the injury either by the immediate negligence of the company or by the negligent acts of those in whom the apparent authority existed to exercise the franchise or franchises. Such silence and acquiescence of the company goes to the question of negligence as well as to that of agency.

In this case we do not believe that the railway company can stand by and receive the benefits of having the motor car in question transport passengers and carry freight back and forth to the advantage of the company, and then, in case of negligent injury to a passenger on such motor car, while on the tracks of the company, charge the negligence of the operator of the motor car to the passenger injured. Neither can the company maintain that the mere driving of a spike in the switch by its section, foreman, unaccompanied by notice to the owner of the motor car or to the public of a revoking of the license to use the track in question, and which at most prevented the use of the track for only a few days, would operate to revoke such license, especially in so far as the protection of the public is con cerned.

The trial court did not materially err in any of the instructions given to the jury. We have examined all of the instructions, and especially those to which objection has been made by the defendant. We have considered carefully all the special instructions requested as urged in defendant's brief. The objection of defendant to instructions given by the court to the jury, and the special instructions offered by the defendants, are based largely upon the theory that the issues in this case were between the defendant and the plaintiff as either a trespasser or bare licensee. We have held that such theory is not the law. The instructions given by the court fairly charge the law of the case in all of its phases. The court did not err in refusing to give any of the special instructions requested. The record is singularly free from error; the case seems to have been fairly tried. There is no evidence of contributory negligence on the part of the

plaintiff; the verdict of the Jury does not appear to be the result of passion or prejudice; the amount awarded is not without proportion to the damages reasonably flowing from the injuries received. Whether or not the immediate cause of the damages was the negligence of the employes of the defendant, or negligence in the operation of the motor car, does not matter. The negli gence of the one was negligence of the other.

We wish to say that we have read with interest all of the authorities presented by both the plaintiff and defendant, and desire to thank counsel for the exhaustive analysis of the legal questions involved.

The judgment of the lower court should be affirmed.

By the Court: It is so ordered.

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Lydick & Eggerman, for plaintiff in error. Mark Goode, for defendants in error.

Opinion by DAVIS, C. This was an action in replevin brought by the plaintiff, the Se curity State Bank, a corporation, against Dick Reynolds et al., defendants, in the superior court of Pottawatomie county, Okla., in which judgment was rendered in favor of the defendants upon the trial. Counsel of record for the defendants in error has filed in this cause the following confession of error: "Come now the defendants in error, by their attorney, Mark Goode, and confess the errors alleged in this cause, and pray the court to reverse and remand the said cause, to the end that the defendant in error may obtain a speedy trial of the issues in said cause, and to the further end that justice may be done in the premises." On this confession of error on the part of the defendants iz, error, duly filed herein, said cause is reversed and remanded, with directions to the

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A fact or question which was actually and directly in issue in a former suit, and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein, so far as concerns the parties to that action, and persons in privity with them, and cannot be again litigated in any future action between such parties or privies, in the same court, or in any other court of concurrent jurisdic tion, upon the same or a different cause of action.

2. Bills and Notes-Defenses-Failure of Consideration.

A partial failure of consideration is a proper defense pro tanto to a suit on a promissory note, except as against an innocent holder in due course of a note which is negotiable.

3. Mortgages-Consideration-Partial Fail

ure.

Where an insurance company makes a loan of money, taking a note therefor and a mortgage to secure the same, and retains a part of the loan as payment of a premium on an insurance policy issued by the mortgagee as collateral security for the loan, and it is afterwards judicially determined that such insurance policy and the agreement to pay such premium are contrary to public policy and absolutely void, and such retained money is not paid to or received by the maker of such note and mortgage, but is kept and enjoyed exclusively by the mortgagee, the maker of the note and mortgage receiving no benefit therefrom, such facts constitute a par tial failure of the consideration of the note and mortgage to the extent of such retained moneys.

(Syllabus by Johnson, C.)

Error from Superior Court, Tulsa County; M. A. Breckenridge, Judge.

Action by the Deming Investment Company against W. I. Shannon and others. Judgment for defendants, and plaintiff brings error. Affirmed.

Charles B. Mitchell and H. A. Kroeger, for plaintiff in error.

W. V. Thraves and King & King, for de fendants in error.

Opinion by JOHNSON, C. Through the Deming Investment Company, as agent of the Fidelity Mutual Life Insurance Company, the First Baptist Church of Tulsa, Okla., ob tained a loan of $8,000 from the said Fidelity Mutual Life Insurance Company; and on May 28, 1908, the church executed its note to the insurance company, with the other defendants in error as sureties thereon, for $8,000, payable June 1, 1913, with interest at 6 per cent. per annum from June 1, 1908, till maturity, and 10 per cent. thereafter, together with a mortgage upon the church property to secure the payment of the note.

The mortgage above mentioned contained the following clause, to wit:

"And said first party [the church] further agrees to apply for and take out an eight thousand dollar ten-year endowment policy in the Fidelity Mutual Life Insurance Com pany of Philadelphia, Pennsylvania, on the life of Thomas J. Slaughter, pastor of the First Baptist Church of Tulsa, and to pay the premium fees, and such other sums as are provided to be paid, according to the contract set out in said policy, and to cause said life insurance policy to be assigned to said second party as additional security for the payment of the indebtedness primarily secured by this mortgage, and that the installments of premiums provided by the terms of said policy to be paid shall be and are a further charge and lien upon the lands described in this mortgage; and if the first party shall fail to pay any of the installments of said premium when the same become due by the terms of seid policy, or shall fail to comply with, the agreements made in applying for and taking out said. policy, in any respect, then the whole sum of money herein secured may, at the option of the holder of the note hereby secured, and at its, his, or her option only, and without notice, be declared due and payable at once, and this mortgage may thereupon be immediately foreclosed for the whole of said money, interest, premiums, and costs. as provided in the seventh paragraph to this mortgage."

Pursuant to this clause in the mortgage, the insurance policy was taken out upon the life of Thomas J. Slaughter, pastor of the. church, with the church named therein as beneficiary, and was assigned by the church to the mortgagee, who was the insurer in the policy and recipient of premiums therein provided, the annual premiums being $846.40. payable on May 26th of each year.

The note, mortgage, and insurance policy having been executed, the insurance com

pany, who was also lender, payee, and mortgagee as above stated, delivered to the church the amount of the loan, $8,000, less the premium for the first year on the policy, being $846.40, which was retained and applied to the payment of such premium, and was never received by the church.

The church declined and failed to pay the premiums on the insurance policy for the second and succeeding years, on account of which the insurance company elected to de clare the note due and the mortgage in default, and filed suit in the Circuit Court of the United States for the Eastern District of Oklahoma to recover on the note and to foreclose the mortgage. In the suit in the federal court upon October 10, 1910, a general demurrer to the petition of the insurance company was sustained. The opinion of that court, in sustaining the demurrer. held that the church had no insurable interest in the life of its pastor, Thomas J. Slaughter. the person insured in the policy hereinbefore mentioned; that, for this reason, the insurance policy was a wager contract, against public policy, and void; that, for the same reasons, the clause in the mortgage, which provided for the policy and the payment of the premiums, having for its object the issuance of such a void policy, the payment of premiums thereon, and the op tion in the insurance company to declare the mortgage indebtedness due for nonpayment of the premiums, was void; and that, by reason of these conditions, the mortgage indebtedness was not due, and had been improperly declared by the mortgagee to be due, and no cause of action existed for the foreclosure of the mortgage on account of such nonpay ment of premiums and the attempted exercise of the option to declare a default, on account thereof. There was no appeal from the judgment of the federal court, and it became final.

Thereafter the insurance company assigned the note and mortgage to the plaintiff in error, the Deming Investment Company. who was the agent of the insurance company in the negotiation of the execution of the instruments as aforesaid. As it became due the church paid the indebtedness represented and secured by the said note and mortgage. with the exception of an amount equivalent to the amount of the said first premium on said insurance policy, which had been re tained by the insurance company in the first place out of the principal of the loan and which had not been received by the church. being the sum of $846.40, and interest thereon.

The church and its sureties contended: (1) That the insurance policy and the agree ment to pay the premiums on it constituted a wager contract, and were contrary to public policy and void, the church having no insurable interest in the life of the insured; (2) that this invalidity, having been once judicially determined by a court of competent jurisdiction, in a suit between the same parties or their privies, is the subject-matter of res adjudicata; (3) that, such agreements being violative of public policy and void, the amount equivalent to such premium, to wit, the sum of $846.40, was wrongfully retained out of the original loan by the insurance company, who was the mortgagee, and that this resulted in a partial failure of the consideration of the note and mortgage to the extent of the amount sued for in this action, all moneys actually received by defendants on the loan having been repaid, with interest.

There are various other issues raised by both sides, and numerous assignments of error; but these contentions of defendants in error, if correct, are decisive of the rights of the parties.

Plaintiff in error advances able argument in favor of the validity of the insurance features of the contract; but, in our opinion, this matter has been settled by the judgment of the United States Circuit Court. In the light of the relations of the pastor of the modern Christian Church to the financial interests of his charge, the writer is not prepared to agree with the holding of the federal court as to the insurable interest of the church in the life of its pastor; but the question of the existence of such insurable interest in this case is dictum, if the decision by the federal court is binding, and consequently we do not decide the point.

The suit in the federal court was brought by the Fidelity Mutual Life Insurance Company, the payee in the note and the mortgagee in this same mortgage, and the assignor thereof to the plaintiff in this action against the defendants in this action. That action was for recovery on the note here involved and for foreclosure of this identical mortgage. The only distinction between the former action and this one is that the other ac tion was brought for the recovery of a larger balance then unpaid, which included the alleged balance here sued for, and was brought before express maturity of the note, upon the option of mortgagee to declare the entire indebtedness due upon failure to pay the premiums on the insurance policy as collateral security, purported to have been created by the agreement requiring the pro

curement and payment of premiums on the insurance policy. The effect of the holding and judgment of the United States Circuit Court was that, the insurance policy and the clause in the mortgage requiring the procurement and payment of premiums thereon being void, the option to declare the note due for failure to pay the premiums did not exist; that the note therefore was not due, and the action did not lie. The pivotal or fundamental fact litigated and adjudicated by the federal court in arriving at its judgment in the hearing on the demurrer was the validity of the insurance policy and agreement to procure and pay premiums on it, as being or not being a wager contract and against public policy. It so happens that this is the pivotal and fundamental fact litigated in this action; for, if the policy and agreement to pay premiums on it are against public policy and void, as held by the federal court, the first premium of $846.40 was wrongfully retained by the insurance company, who was also the mortgagee, and there was a partial failure of consideration of the note and mortgage to that extent.

The rule as to the binding effect of an adjudication of a pivotal question of fact and its bearing upon a subsequent presentation of that fact in another action, as distinguished from the effect of a former adjudication of the entire cause of action involved in the subsequent proceeding, is illustrated by Cyc., in comment on actions on installments or successive causes, as follows, to wit:

"Where a series of actions are brought for installments due under a contract, or successive actions, on a continuing or recurring cause, an adjudication in the first action on the fundamental state of fact on which they all rest will be conclusive in the rest, precluding inquiry into such ultimate facts or grounds of recovery." (Emphasis ours.) 23 Cyc. 1295, and note 79.

The effect of an adjudication of a fact, as distinguished from the effect of an adjudication of an entire cause of action, was stated by this court in the case of McDuffie v. Geiser Mfg. Co. et al., 41 Okla. 488, 138 Pac. 1029, as follows:

"A fact or question which was actually and directly in issue in a former suit, and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein, so far as concerns the parties to that action, and persons in privity with them and cannot be again litigated in any future action between such parties or privies. in the same court, or in any other court of concurrent jurisdiction, upon the same or a different cause of action."

This identical language was also used by this court in the case of Woodworth v. Town of Hennessey, 32 Okla. 267, 122 Pac. 224.

In McCurry v. Sledge, 48 Okla. 27, 149 Pac 1124, this court held that an adjudication by a referee in bankruptcy that a tract of land was the homestead of the bankrupt was conclusive as to the question of the homestead character of the land, as against a claimant in: bankruptcy, who subsequently sued the bankrupt for foreclosure of a mortgage upon the same land.

In De Watteville v. Sims, 44 Okla. 708, 146 Pac. 224, this court held that an adjudication by a referee in bankruptcy disallowing a claim in bankruptcy as void because of usury was conclusive proof of such invalidity in a subsequent suit by the claimant against the bankrupt to foreclose a mortgage given to secure the debt.

Following the rule of this court in the above cases, we must hold that the determination by the United States Circuit Court in the former action of the invalidity of the insurance policy and contract to pay premiums thereon is conclusive upon this court in the present action. This being true, it becomes necessary to ascertain the effect of such invalidity upon this cause.

The present suit involved a balance on the note; and defendant, after pleading a general denial and payment, alleged that they had not received that part of the consideration of the note and mortgage represented by the money retained by the insurance company (mortgagee) in payment of the first premium on the policy, and that the money received as the consideration of such note and mortgage had been fully repaid, with the contractual interest. In effect, this was a plea of partial failure of consideration to the extent of the balance sued for.

A partial failure of consideration is a proper defense pro tanto to a suit on a promissory note, except as against an innocent holder in due course of a note which is negotiable. Section 4078, Revised Laws of 1910; Hagan v. Bigler, 5 Okla. 575, 49 Pac. 1011. Also see Capps v. Vasey Bros., 23 Okla. 554, 101 Pac. 1043.

Plaintiff acted as the agent of the mortgagee in the procurement of the note and mortgage, took the assignment thereof after the rendition of the judgment of the federal court hereinabove mentioned, and it is admitted in the reply brief that plaintiff is not an innocent holder.

It being res adjudicata that the insurance policy, and the agreement to pay premiums thereon were contrary to public policy and absolutely void, it follows that the defendants received no benefit from that part of the consideration retained by the insurance company, who was the lender, mortgagee, and insurer, but that such benefit was retained and enjoyed exclusively by the mortgagee. The consideration of the note and mortgage. therefore, failed to the extent of such amount so retained, being the amount here involved. with interest. The evidence established with. out contradiction that all of the money received by the defendants as consideration of the note and mortgage had been repaid, with interest.

The judgment of the lower court should therefore be affirmed.

By the Court: It is so ordered.

SUMMERS et al. v. HOUSTON.

No. 7761-Opinion Filed Nov. 14, 1916.
Rehearing Denied Jan. 23, 1917.
(162 Pac. 474.)

Appeal and Error-Review-Verdict.

The instructions in this case examined and approved, and the issues involved having been submitted to the jury, and there being evidence to support the verdict of the jury, the same will not be disturbed upon appeal.

(Syllabus by Hooker, C.)

Error from District Court, Bryan County; Jesse M. Hatchett, Judge.

Action by J. R. Houston against Dave Summers and others. There was a judgment for plaintiff, and defendants bring error. Affirmed.

Hatchett & Ferguson and Parker & Simons, for plaintiffs in error.

W. E. Utterback and V. B. Hayes, for defendant in error.

Opinion by HOOKER, C. This suit was instituted by J. R. Houston against Summers and Alderson to recover damages alleged to have been sustained by him by reason of the defendants having sold to him hogs alleged to have been infected with cholera at the time of sale, and it is claimed these hogs communicated the disease to other hogs owned by the plaintiff and as a result of this disease a large number of hogs of

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