On Motion for Rehearing.
The appellee insists that we erred in holding that the action of the trial judge in excluding certain testimony of Julian Montgomery constituted reversible error.
Montgomery testified by deposition that he was a civil engineer, and that his firm had been employed by the city of Spearman to prepare plans and specifications for certain paving to be done, and to superintend the work. He had testified that prior to the time of receiving bids he had discussed with the city officials the question as to whether the city would furnish, free of charge, to the successful bidder caliche from certain beds of that material owned by the city. He stated that he had discussed it with Sampson, city manager, and Cooke, the mayor, on March 9, 1931, in the city hall in Spearman, and that he had informed all bidders previous to the filing of their bids that the city would make no charge for the use of its caliche. Then he was asked to state the substance of the conversation he had with the officer or officers of the city previous to the opening of the bids respecting the use of the caliche, and to state what was said by each party present.
The objection made to this is that it was immaterial and irrelevant and serves no purpose whatsoever in the lawsuit, that it varied the express terms of the contract entered into between the construction company and the city, and there were no pleadings to support the admissibility of any such answer. -
The question and answer were excluded.
The answer is as follows : “On the afternoon of March 9, 1931, in the City Flail at Spearman, Texas, Mr. Sampson, City Manager, discussed with me the matter of allowing the contractors to use caliche from the City’s beds free of charge. I do not remember Mr. Sampson’s words exactly, but he stated in substance the following: *1056That the City desired to obtain the pavement as cheaply as possible to the property owners, and for me to notify the contractors that the City would be willing for them to obtain caliche from the City’s beds free of charge. My recollection is that Mr. Sampson and Mr. Cooke were both present at this conversation. I do not recollect that Mr. Cooke had anything to add to Mr. Sampson’s statement.”
By question 7, Montgomery was asked if there was any discussion in the city offices, or where the bids were opened, among the officers, Cooke, mayor, Commissioners Foote and McLain, and the city manager and secretary, respecting the use of the caliche and the conditions under which it might be used by the successful bidder, and to state fully what such discussion was and who participated therein. The same objection was urged and the court sustained the objections to all this testimony.
The objection that the testimony was immaterial and irrelevant and serves no purpose whatsoever in the lawsuit is, in effect, no objection which the court could consider.
The objection that it varied the express terms of the contract entered into between the parties should not have been sustained for several reasons. In the first place, the suit was not based upon the contract nor upon a breach thereof. The contract had been executed by both parties, the work had been performed by the construction company, and it had been paid in full for its services. This action was brought to recover the value of the caliche which it is alleged the construction company had wrongfully appropriated to its own use without the knowledge and consent of the city.
The pleading was sufficient, in the absence of exceptions, to admit the testimony. The company alleged: “This defendant says that if such provision is not in the written agreement subsequently executed by the plaintiff and the defendant that the same was omitted therefrom by mutual mistake, but with such provision in mind and with the intention to waive the payment, and that for a valuable consideration, with the knowledge of the plaintiff, the defendant agreed to do such work, being permitted to use the caliche from said pit at a less and lower price than it otherwise would have done, and to permit the plaintiff to recover herein would be unjust and inequitable and amount to a fraud on this defendant.”
No demurrer or exception was urged to any part of the pleadings, and we think it is sufficient, under such circumstances, when considered with other allegations, to show that the plaintiff knew that the defendant was using the caliche, that it was taken with its consent, and that it had been induced to enter into the contract at the price named for doing the work upon the representations that no charge would be made for whatever caliche might be used. When considered with the allegations in plaintiff’s petition to the effect that the material was taken without the city’s consent,, the pleading was sufficient to admit testimony showing that the provision was left out of the contract by mutual mistake, even though the action had been based upon the contract. The petition and answer, considered together, contain sufficient allegations to admit testimony on the part of the defendant for the purpose o,f showing that it was induced, by the representations previously made, to reduce its bid.
Matters of inducement, if fraudulent, do not come within the parol evidence rule, and the facts pleaded are sufficient to show an equitable estoppel.
The record shows that the city had introduced testimony to the effect-that none of its officers had authorized the appellant to use the caliche free of charge. This was offered in support of the city’s allegation that the material had been wrongfully taken.
It is a fundamental rule that either party is entitled to introduce testimony to rebut evidence- introduced by his adversary. Markham v. Carothers, 47 Tex. 21; Ferguson Seed Farms v. McMillan (Tex.Com.App.) 18 S.W.(2d) 595, 63 A.L.R. 1009; Oakes v. Prather (Tex.Civ.App.) 81 S.W. 557; Rodriguez v. Lee, 26 Tex. 32.
It is also held that evidence as to prior transactions and conversations between parties is admissible where it tends to illustrate the transaction in question, or where the question of intent or knowledge is material. Wade v. Love, 69 Tex. 522, 7 S.W. 225; National Life & Accident Ins. Co. v. Sanchez (Tex.Civ.App.) 281 S.W. 891; Chilson v. Oheim (Tex.Civ.App.) 171 S.W. 1074.
Moreover, the word “caliche” does not appear in the contract or in the notice *1057to bidders. The stipulation is that the contractor agreed, at its own cost and expense, to furnish all labor, materials, tools, etc. We are not informed as to what other materials were necessary in constructing the pavement.
The motion for rehearing is overruled.