author: CHADICK, Chief Justice.

text:
    ARKANSAS OAK FLOORING COMPANY, Appellant, v. F. G. MIXON, Appellee.
    No. 7481.
    Court of Civil Appeals of Texas. Texarkana.
    July 2, 1963.
    Rehearing Denied July 30, 1963.

      Norman, Rounsaville & Hassell, Rusk, Law Offices of Tom Bankhead, Carthage, for appellant.
    Long, Strong, Jackson & Strong, Carthage, for appellee.
   CHADICK, Chief Justice.

This is a suit for damages accruing from a breach of contract. The trial court instructed a verdict and the judgment entered was unsatisfactory in part to both parties and both appealed. The judgment is affirmed.

Arkansas Oak Flooring Company, as plaintiff, sued F. G. Mixon, as defendant, in a district court of Panola County. The plaintiff’s trial pleading stated a cause of action upon three separate contracts, one written and the other two oral, alleging the defendant failed to pay the purchase price for timber located upon the tracts of land mentioned in each agreement. A copy of the written agreement of the parties is attached to plaintiff’s pleadings.

Defendant, F. G. Mixon, in his trial pleading lodged special exceptions to plaintiff’s petition, and among several defenses plead that on or about July 18, 1958, he entered into a written contract with the plaintiff to purchase and cut timber on the Robert Scott tract referred to in plaintiff’s petition and the copy of the contract attached ; that prior to the date that plaintiff filed suit, he, the defendant, delivered to plaintiff his check for $497.18, the balance allegedly due plaintiff under the contract, and tendered payment of that amount. In further answer he specifically denied that he agreed with the plaintiffs to pay the ' amounts allegedly due and owing for timber on two separate tracts known as the International Paper Company and Swift tracts as plead by the plaintiff, and entered a general denial.

At the trial all testimony offered by the plaintiff company, except the written agreement of the parties referred to in the plaintiff’s pleading and herein called the “Mine-óla”, (Texas) agreement to distinguish it from the oral agreements claimed to have been made at “Pine Bluff”, (Arkansas), was ■ objected to as being in violation of the parol evidence rule. The trial court sustained this objection and at the close of the testimony instructed a verdict against defendant Mixon and in favor of the plaintiff company for $497.18, the balance defendant Mixon had tendered into the court, and against the plaintiff company on its claims otherwise, and entered a judgment to correspond with costs assessed against defendant Mixon. Both parties objected to the judgment and gave notice of appeal.

Arkansas Oak Flooring Company as appellant, has briefed one point of error and one counter-point, the point of error follows :

“The trial court erred in instructing the jury to return a verdict for the defendant, except for the amount tendered into court, as there is sufficient evidence in the record to have supported a jury verdict for plaintiff for the full amount sought, and such evidence does not violate the parol evidence rule.”

F. G. Mixon as appellee, has briefed one point of error and a counter-point, his point of error follows:

“The trial court erred in assessing costs of litigation against the prevailing party F. G. Mixon without stating on the record why such costs should be adjudged against the prevailing party and the record is void of any showing as to why such costs should be so adjudged.”

The parties single out and recognize the principal question presented by Arkansas Oak Flooring Company as that of merger or not (integration) of the negotiations and alleged contractual agreements at Pine Bluff into the written instrument executed at Mineóla. Their briefs treat it as a problem of admissibility of evidence, although it is to be seen that the appellant company’s point of error seems to present the more complicated issue of the power of the presiding judge to make a determination of certain ultimate issues of fact of the intent of the parties preliminary to ruling upon the admissibility of evidence extrinsic to a written contract.

Judges and legal scholars of the highest rank have had occasion to remark on the seemingly indefinite and uncertain application of the rule of merger by the courts. The Supreme Court of This State in Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, discusses the parol evidence rule, its nature and application to the facts of the case before it. In doing so the court gave approval to rules and procedures that should be observed in the present case. The following is extracted for that purpose, to-wit:

“The parol evidence rule is not a rule of evidence at all, but a rule of substantive law. McCormick and Ray, Texas Law of Evidence, 2d., § 1601; 20 Atn.Jur., Evidence, § 1100; 32 C.J. S. Evidence § 851.
“When parties have concluded a valid integrated agreement with respect to a particular subject matter, the rule precludes the enforcement of inconsistent prior or contemporaneous agreements. 17 Tex.Jur., Evidence §§ 352, 353; McCormick and Ray, supra, § 1601.
“On the other hand, the rule does not preclude enforcement of prior or contemporaneous agreements which are collateral to an integrated agreement and which are not inconsistent with and do not vary or contradict the express or implied terms or obligations thereof. McCormick and Ray, supra, § 1631; 17 Tex.Jur., Evidence, § 370; Williston on Contracts, Rev.Ed., Vol. 3, § 642; Wigmore on Evidence, 3rd Ed., Vol. IX, § 2430, Page on Contracts, 2d Ed., Vol. 4, § 2191; Corbin on Contracts, Vol. 3, § 594.
“The rule with respect to proof and enforcement of collateral agreements is thus stated in the Restatement of the Law of Contracts, Vol. 1, § 240:
“ '(1) An oral agreement is not superseded or invalidated by a subsequent or contemporaneous integration, nor a written agreement by a subsequent integration relating to the same subject-matter, if the agreement is not inconsistent with the in- . tegrated contract, and
“ ‘ (a) is made for separate consideration, or
“ ‘ (b) is such an agreement as might naturally be made as a separate agreement by parties situated as' were the parties to the written con- . tract.’ ”

In Professor Charles T. McCormick’s “Handbook of the Law of Evidence” (McCormick on Evidence), p. 441, Sec. 216, following a review of the many opinions expressed by courts and text writers upon the subject is this suggestion: “Let the trial judge, after hearing the testimony as to the alleged oral agreement, including the evidence of substantiating circumstances, compare it with the terms of the writing, and if he considers that it is one which parties situated as these were would ‘naturally and normally’ have recited in the writing itself, had they made it and intended it to stand, then he will reject the evidence thus tentatively heard. On the other hand, if (in the terms of the Restatement) he concludes that the alleged oral pact is ‘such an agreement as might normally be made as a separate agreement by parties situated as were the parties to the written contract,’ then he will allow the evidence to go to the jury.” This approach required the trial judge in this case to hear the evidence of the alleged oral agreements made in Pine Bluff and pertinent surrounding circumstances and compare the oral agreements with the terms of the writing executed at Mineóla and decide from the evidence whether or not the parties would naturally and normally have recited the Pine Bluff agreements in the writing if they had intended the Pine Bluff agreements to be obligatory. And second, to decide whether or not the alleged Pine Bluff oral agreements might have normally been made as a separate agreement by the parties situated as they were. The trial judge heard the testimony and his ruling implies that he decided the issues of fact adversely to the appellant company. The ruling must stand unless the contrary is established as a matter of law.

The excerpt from the Restatement of the Law of Contracts, Vol. 1, Sec. 240 approved by the Supreme Court in Hubacek v. Ennis State Bank supra, heretofore quoted, is a procedural device for determining the intention of the parties when an oral agreement is followed by a contractual writing and can now be used as a guide in reviewing the court’s ruling.

The actual consummation of an oral contract at Pine Bluff is disputed but the subsequent written agreement at Mine-óla is affirmed by both parties. No essential inconsistency between the oral agreements and the written agreement is perceived. The next step, or question is, were the considerations for the oral contracts separate from the consideration for written contract? The president of the appellant company testified that the timber on the Scott, International Paper Company, and Swift tracts was sold separately in each instance to Mr. Mixon for a stated amount per tract. His testimony is clear that purchase and sale of the timber on these three tracts was the object of the Pine Bluff negotiation and the agreements he ciaimed the parties consummated. The appellant company’s other witness, a field supervisor, testified to facts contradictory of the president’s testimony in some important respects. This witness testified concerning the Pine Bluff agreement, saying the purchase and sale of timber on four tracts, that is, Scott, International Paper Company, Swift and Scoggins, was the object of negotiation and sale. He says that no representation was made to Mixon regarding the board feet of lumber on any of the four tracts, that the four tracts were offered to Mixon for the aggregate of the separate prices quoted him on the three tracts named by the company president. In this connection he said defendant Mixon wanted to know how much money it would take to buy the four tracts of timber. This conflict in the evidence was subject to being reconciled by the trial judge. On construing it he was authorized to conclude that if an agreement was made at Pine Bluff, it was a sale in bulk of the four tracts for a single consideration constituting a single contract and not independent and separate sales of three or four different tracts constituting three or four separate sales agreements.

Continuing with the Restatement’s final step or question, is there evidence that the oral sale of International Paper tract and the Swift tract are such agreements as might naturally be made by the parties, situated as they were, as agreements separate from the written contract? The president of the company testified that because of previous relations with Mixon and the practice of his company in not always committing agreements of this nature to writing, he would not have required the written instrument executed by the parties at Mineóla, had he been handling the details of the transaction. Referring to the policy of his company in committing contracts of this nature to writing he used the expressions “we do normally” and “we don’t require it in every instance”. He explained that written agreements similar to the Mineóla contract were used to insure that the company got the lumber produced from the timber sold. He admitted that the Mineóla contract was an obligation of his company, but offered no explanation for permitting its execution and the subsequent operations in accordance with it.

The field supervisor testified that the parties did not sign any papers in Pine Bluff at the end of negotiations there because it was getting late in the afternoon and Mr. Mixon wanted to get back to Texas. In addition, he said that the employee acting for the company in the execution of the Mineoia contract received his instructions from the president or himself, and admitted that he probably directed him in regard to the execution of the Mineóla agreement. His explanation for describing the Scott tract alone in the Mineóla contract was that the Scott tract was in a different county from the others and the company did not describe timber in more than one county in a single instrument.

Construction of these witnesses testimony and its implications would allow the trial judge to conclude that the oral Pine Bluff agreements were not such as might naturally have been made as agreements separate and apart from the Mineóla contract by these parties under the circumstances shown. The trial judge did not abuse his discretion in rejecting evidence of the Pine Bluff agreements. Nor is error shown in the refusal of the trial judge to submit the issues of fact discussed for jury determination.

The court’s ruling rendered immaterial any question of whether or not the parties made an agreement at Pine Bluff. The Constitution guarantees a jury trial in causes cognizable at common law and statutes in effect at the time of the adoption of the Constitution in 1879. Hickman v. Smith, Tex.Civ.App., 238 S.W.2d 838. The parol evidence rule and the judge’s function in administering it antedates the Constitution. Even though the parol evidence rule is a rule of substantive law, the traditional prerogative of the judge continues under present practice and he may determine issues of fact, such as have been discussed, preliminary to ruling upon the admissibility of evidence in administering the rule. See McCormick’s Handbook of the Law of Evidence, Sec. 210-216.

Mr. Mixon in his capacity as an appellant and in support of his point of error previously stated, proceeds on the theory that he prevailed in the trial court. Appraisal of the pleadings and the evidence does not sustain this position. As previously noted, he was sued for several sums of money, including a balance that he admitted owing under the terms of the Mineóla contract. Although his pleadings tendered this balance, he also plead a general denial. In his testimony he admitted that the check to pay the balance mailed to the plaintiff company prior to suit bore the notation “timber account in full”; and that it was returned by the company and he mailed it to them a second time, but they neither cashed nor returned it prior to the time he took the witness stand. Then, while on the stand, he tendered to the court the amount of the check on condition that the court require the return of the unpaid check. The record shows that on acceptance of this condition he handed the clerk a check on the Carthage First National Bank, and the other check in the hands of counsel for the company was offered in evidence as an exhibit. Thereafter the court instructed a verdict for Mixon except for the amount of $497.-18, and decreed that the Arkansas Oak Flooring Company have and recover such amount from the defendant Mixon, together with costs, etc. No unconditional offer to pay was made at any time. The record simply shows that the plaintiff recovered a small part of its original demand from the defendant, together with costs. There is no error shown in the assessment of costs. Rule 131, Rules of Civil Procedure. The judgment of the trial court is affirmed.

      . Tucker v. Boyd, 156 Tex. 262, 293 S.W.2d 841; 70 American Law Report, 752-771; 2 Texas Law of Evidence (McCormick and Bay) 482, Sec. 1631; “McCormick on Evidence”, 434 quotes Professor James Bradley Thayer, author of “Preliminary Treatise on Evidence at the Common Law” as saying “Pew things are darker than this, or fuller of subtle difficulties.”

      . This is repeated in 2 Texas Law of Evidence (McCormick & Ray, p. 450, Sec. 1603.


source: Caselaw Access Project

author: TIREY, Justice.

license: Public Domain

text:
    Ervin W. BLUM, Appellant, v. J. A. ELKINS, Sr., et al., Appellees.
    No. 4096.
    Court of Civil Appeals of Texas. Waco.
    June 13, 1963.

      John H. Jenkins, Houston, for appellant.
    Vinson, Elkins, Weems & Searls, Fulbright, Crooker, Freeman, Bates & Jawor-ski, Houston, for appellee.
   TIREY, Justice.

This is an appeal from a summary judgment in favor of defendants. Plaintiff Blum brought this action against J. A. El-kins, Sr., First City National Bank of Houston, Carnavon Corporation and J. F. Elrod, to recover exemplary damages in the amount of $1,000,000.00, as a result of an alleged fraudulent sale of certain property in Harris County, Texas, on November 7, 1953, and he also sought to cancel and set aside all conveyances made to and by appel-lees, and he sued for an additional sum of $96,000.00 as a reasonable rental value of the property. Plaintiff alleged that the fraudulent sale occurred on November 7, 1953, but he did not file his suit until nine years later on April 4, 1962. Blum alleged that he entered into a contract with defendant Elrod on May 5, 1953, authorizing him to act as trustee to sell his home at 200 Carnavon Drive in Houston and to make payments on certain debts out of the proceeds of the sale. He also alleged that the appellees conspired to defraud him by having Elrod sell the house to the Carnavon Corporation for a consideration of $37,000.-00 when the property had a reasonable market value of $130,000.00. He further alleged that attorney Percy Foreman had lived in his home at 200 Carna-von Drive for several years, and that he never authorized or agreed that Foreman should reside in this home, and he alleged that Elrod was supposed to pay Foreman the sum of $25,000.00 out of the proceeds received from the sale of thp home. Blum’s oral deposition was taken and is a part of the record in this cause.

It is without dispute that until May 1953 this property was owned by Blum subj ect to a first lien indebtedness of $69,224.34 to the City National Bank, and a second lien indebtedness to Percy Foreman of $25,000.-00 plus interest on both of these obligations, the obligations being delinquent in May 1953, and Blum was unable to pay them except through a sale of the property. Blum testified in part that he was “put to the necessity, in order to pay those debts, of letting this piece of property be sold.” In order to accomplish that purpose Blum conveyed the property to Elrod with in* structions to sell the property and pay the foregoing obligations and,, if anything remained, the balance to him. That was evidenced by the written agreement of May 5, 1953. The record shows that Elrod sold the property on November 7, 1953 to Carnavon Corporation, and the deed recites a consideration of $10.00 cash, and the assumption of Blum’s indebtedness to the City National Bank of $32,000.00. This deed was recorded on December 9th, 1953, and shows revenue stamps in the amount of $40.70 attached to the deed, and as recorded shows a consideration of $37,000.00. Carnavon took the property subject to Foreman’s second lien which has not been released. In Blum’s deposition, which was taken shortly after the filing of this suit in April 1962, he testified to the effect that in 1954 he knew Foreman was living in the house, and although he alleged in his petition that he never authorized or agreed that Foreman could reside in his home, yet he knew Foreman was living in the house and he never once asked Foreman why he was in possession. Blum testified specifically:

“Q. Now, when you did talk to Mr. Foreman, as you say, in the Cork Club, * * * in 1956 or 1957 * * * did you specifically ask him what he was doing living in it?
“A. I answered that three times, I didn’t.
“Q. Alright sir, I wanted to make sure that you hadn’t. So that until this time you haven’t asked Mr. Foreman what he was doing living in that house?
“A. No, sir.”

Blum further testified to the effect that every three or four months from 1953 to late 1958, he asked for but was refused an accounting and finally concluded in 1958, before he went to the penitentiary, that he was going to have to file suit. He testified specifically:

“Q. But it was a matter of a few weeks before you went to the penitentiary that you knew you were going to have to file suit to get an accounting?
“A. Yes, sir.”

Following the taking of Blum’s deposition, plaintiff took the deposition of Mr. Elkins and Mr. Elrod. These depositions conclusively negatived the existence of any fraud. Elrod testified to the effect that his appraisal of September 16, 1949, so heavily relied upon by appellant, was a reproduction cost appraisal and not a market value appraisal; that the house included several features which were very expensive and would therefore increase a reproduction cost appraisal, but which were not much in demand and would therefore decrease the market value.

After the foregoing depositions were filed the appellees filed an amended answer raising defenses of both the two and four year statutes of limitation, and moved for a summary judgment on the ground that no genuine issue of fact was presented, and that they were entitled to a judgment as a matter of law. With respect to appellees’ claim of limitations, appellant answered only that a fact issue exists on “the date of which plaintiff could reasonably have discovered the consideration for such sale.”

Blum assails the judgment on what he designates as six points. They are to the effect that the Court erred in sustaining the motion for summary judgment in favor of each of the defendants. Plaintiff, in his brief, says: “Since in effect appellant really has only oné complaint, that the trial court erred in holding that as a matter of law the statutes of limitation barred his action, all points of error will be briefed together.” The appellees present three counter-points, and they are to the effect: (1) That appellant’s alleged causes of action, for damages and for cancellation of certain conveyances are barred respectively by the two-year and four-year statutes of limitations, because appellant is charged with notice as a matter of law more than eight years prior to the filing of the suit that Elrod had executed and delivered a conveyance to the property in question; (2) That the existence of any relation of trust and confidence between Blum and Elrod does not change the rule that there must be diligence in discovering fraud and that there is a duty to investigate where a party has knowledge of facts sufficient to excite inquiry; (3) That the Court properly granted the appellees’ motion for a summary judgment, because appellant failed to allege any facts in his petition establishing that he could not have discovered the sale of the property by the exercise of reasonable diligence. We sustain each of the foregoing counter-points for reasons which we shall hereinafter briefly state.

It is well settled in Texas that when a plaintiff brings suit by reason of alleged fraudulent conduct he must elect between suing for damages or for cancellation and recision of a contract or conveyance. In this suit appellant has sued for both damages and cancellation. His alleged cause of action for damages is, of course, governed by the two-year statute of limitation, namely, Article 5526, Tex.Rev.Civ. Stats. (1925). In this connection appellant testified in his oral deposition to the effect that he knew four weeks before he went to the penitentiary on December 13, 1958, that he would have to file suit to get an accounting. Since he did not file suit until 1962 it follows that any claim he had for damages would be barred by the two-year statute of limitation aforesaid. Moreover, the fact that the appellant was in the penitentiary during 1959, 1960 and 1961, did not toll the running of the statute. See Article 5535, Tex.Rev.Civ.Stats. (1925). Once the statute has commenced to run, it is not tolled by imprisonment See Article 5544, Tex. Rev.Civ.Stats.

Appellant’s claim for cancellation of the deed is barred by the four-year statute of limitation, namely, Article 5529, Tex. Rev.Civ.Stats. It is true that in Texas fraud will prevent the running of a statute until such time as the fraud is discovered, or might have been discovered by the exercise of reasonable diligence. Perhaps one of the clearest statements of the Rule in Texas is found in Sherman v. Sipper, 137 Tex. 85, 152 S.W.2d 319, 137 A.L.R. 263, wherein the Supreme Court said:

“The rule has long prevailed in this State that fraud will prevent the running of a statute of limitation only until such time as the fraud is discovered, or by the exercise of reasonable diligence it might have been discovered.”

Appellant’s cause of action is grounded on the premise that the fraudulent act was in bringing about a sale of the property by Elrod to Carnavon Corporation at a price less than its fair market value. When did appellant have knowledge of sufficient facts from which it could be determined by the exercise of reasonable diligence that a sale had been made ? The answer is: When it is determined that appellant is charged with notice of the sale, it follows that his cause of action accrued at that time because he then knew that he was entitled to an accounting. He could have ascertained the market value of the property at that time, and he knew the amount of the indebtedness to the bank and to Foreman. Accordingly, lie could have determined whether any balance should have been paid him under the contract which he executed on May 5, 1953, wherein he authorized Elrod to sell the property. Needless to say Blum is and was charged with notice of the deed to the corporation, because it was filed for record on December 9, 1953. Moreover, he had knowledge that Foreman was in possession of the house and that was sufficient to place him upon inquiry. The contract that Blum executed to Elrod on May 5, 1953 authorized Elrod to convey this property at any time, from time to time, for such consideration and under such conditions as (he) “you may desire.” This contract also provided that all sums received by Elrod from any sale should be disbursed by him as follows: first, to the City National Bank in payment of all notes; next, to Foreman to discharge the sum of $25,000.00 owing by Blum to Foreman for representing him as attorney, and for costs,, expenses and advancements ; and last to payment of taxes and charges owing against the property. It is without dispute that the notes to Foreman had been executed to him by reason of his employment to represent Blum in connection with six federal indictments and seventeen state indictments which had been returned against Blum in 1952, charging him with falsifying records as Executive Director of the Housing Authority in Houston. The fee also covered representation by Foreman in connection with a subsequent indictment and trial in a hit-and-run driving case. Foreman was handling these matters continuously for Blum from 1952 to 1962. Moreover, when appellant executed the agreement with Elrod on May 5, 1953, which placed title to the property in Elrod by executing and delivering a deed to him on the same date, Blum obviously expected that Elrod would sell the property, and he knew that he should anticipate a sale of the property, and Blum had the duty of determining from time to time whether a sale had been consummated. In fact, it is without dispute that appellant was trying to sell the property, and at the same time had it listed with a real estate agent. Therefore, when Elrod executed the deed on November 7, 1953 to Carnavon Corporation, which was filed for record on December 9, 1953, Elrod was carrying out the expressed intention of Blum in the agreement of May 5, 1953. We think Blum was charged with constructive knowledge of this sale from the date of the recording of the deed, because he had executed the agreement providing for the sale. Since he could have determined the fair market value on the date of the sale his cause of action accrued at that time. In appellant’s brief we find this admission :

“Undoubtedly the deed from Elrod to the Carnavon Corporation was filed for record on December 9,1953, but this deed was at most notice that the property had been sold.”

But, appellant contends that the recording of the deed did not place him on notice of the full sale price of the property. We think this contention is immaterial, and is not controlling, because Blum had notice that there had been a sale of property, and he could have obtained an accounting from the parties with respect to the proceeds of the sale, or he could have filed suit for an accounting. Moreover, appellant stated in his petition that he did not agree or consent to Foreman taking possession of and living in the house, but in his deposition he admits that he received actual notice that Foreman was in possession, and he testified that he read in one of the Houston papers in 1954 that Foreman had married and had moved into the house. Moreover, prior to this date, Blum had sold some rugs, carpeting and stove in the house to Foreman, and the carpeting was cut to fit specially the rooms of this house and placed on the floor. He further testified to the effect that in 1956 or 1957 he went to the house to meet Foreman’s brother who was going to Austin with him in connection with one of the cases which Foreman was handling for him, and that he saw and talked with Foreman at the house. During the years of 1955 and 1956 he had several telephone conversations with Foreman who was at the house; that Foreman tried two cases for him during this period of time and, he, Blum, was with him on various occasions. Moreover, Blum wrote Foreman six or eight letters while he was in the penitentiary, and he received three letters from Foreman. Blum further testified that he never asked Foreman why he was in possession, and did not write him about the house.

We think this record and the testimony of Blum conclusively shows that more than four years before Blum went to the penitentiary in December of 1958, and approximately eight years before filing this suit, he had actual notice that Foreman was living in the house. During this period of time Blum did not pay any taxes or insurance premiums with respect to the property, or exercise any other acts of ownership, and Blum lived in Houston continuously until he went to the penitentiary in December 1958. We think that Blum’s actual knowledge of Foreman’s possession was notice to him of the rights of Carnavon Corporation under the deed from Elrod,, which deed had been filed for record in December 1953. See Houston Oil Co. of Texas v. Choate, 232 S.W. 285, (Tex.Com.App.). See also Wise v. Anderson, 359 S.W.2d 876, (Tex.Sup.). We think appellant, in his brief, overlooks the fact that he had the duty to investigate the terms of the sale upon learning that the property had been sold. He could have determined these facts from the parties to the transaction, and if they did not make full disclosure to him, he could have brought suit for an accounting and, since he did not make any investigation to determine the terms of the sale, he must be charged with notice of all the facts that could have been determined from a diligent inquiry or suit. It is well settled in Texas that where there is a trust relationship the four-year statute of limitations is applicable from the time that a party is charged to use diligence in making an investigation. See Courseview, Inc., v. Phillips Pet, Co., Tex.Civ.App., 298 S.W.2d 890. Same case 158 Tex. 397, 312 S.W.2d 197.

Finally, it is our view that Blum, by his own admissions in his deposition, established that he was charged with notice of the sale of the property more than four years prior to the bringing of this suit and, because of this fact, we think the trial court properly granted appellees’ motion for a summary judgment, because appellant did not allege any facts that would bar the running of the statutes of limitation. See 28 Tex.Jur., p. 294. Luling Oil & Gas Co., v. Humble Oil & Refining Company, 144 Tex. 475, 191 S.W.2d 716; McCord v. Bass, 223 S.W. 192, (Tex.Com.App.) ; Cohen v. Shwarts, Tex.Civ.App., 32 S.W. 820, (n. w. h.). We are of the further view that this record affirmatively shows by appellant’s own admissions in his oral deposition that he knew or should have known of the alleged fraud by 1953 or 1954 at the latest, and by reason thereof, the trial court properly granted appellee’s motion for summary judgment, and for the reasons stated we think this judgment should be affirmed.

Accordingly, the judgment is affirmed.


author: WILLIAMS, Justice.

text:
    Claude F. FULTON, Appellant, v. Harold ABRAMSON, Trustee, Appellee.
    No. 16191.
    Court of Civil Appeals of Texas. Dallas.
    June 21, 1963.

      Ivan Irwin and Fowler Roberts, Dallas, for appellant.
    Palmer & Palmer, Philip I. Palmer, Jr., Dallas, for appellee.
   WILLIAMS, Justice.

Harold Abramson, Trustee in Bankruptcy of Fulton & Fulton Associates, Inc., brought this action against Claude F. Fulton, Jane Ezell, Lester Reaves, Raymond Chadwick and William H. Pardee for unpaid stock subscriptions. Following trial before the court, without a jury, judgment was rendered in favor of plaintiff against defendant Claude F. Fulton for the sum of $10,000. Judgment was rendered in favor of all the other defendants.

Claude F. Fulton appeals, seeking reversal of the trial court’s judgment in three points of error, as follows: (1) the court erred in holding that the proper value to be assigned to the no-par stock here involved was one dollar per share; (2) the court erred in holding that the alleged stock subscription is enforceable and at the same time holding that the agreement to pay therefor was in non existent property; and (3) the court erred in holding that no property was transferred to the corporation in payment for the stock involved since the evidence was wholly insufficient to sustain such holding. We overrule these points and affirm the judgment of the trial court.

A brief statement of the essential portions of the pleadings and evidence is required for a proper understanding of the issues here presented. Appellee alleged the incorporation of Fulton & Fulton Associates, Inc. as a Texas Corporation with an authorized capitalization of 100,000 shares of stock of no-par value. He alleged that the corporation accepted a proposal of appellant Claude F. Fulton and wife Mary Beth Fulton to transfer all of their interest in a partnership known as Fulton & Fulton to the corporation in consideration of its issuance of 10,000 shares of stock to each of them and the assumption by the corporation of all the partnership liabilities. He then alleged that such stock was duly transferred by the corporation, by unanimous vote of all the directors, but that in truth and in fact there was no partnership known as Fulton & Fulton, and that no assets were transferred in payment of the 20,000 shares of stock issued to appellant and his wife. It is alleged that the purported transfer was a fraudulent device to “conceal the truth from prospective creditors so as to induce the extension of credit” to the corporation. Appellee sought to have the court fix a value of one dollar per share on the stock. He brought the action not only in his capacity as transferee of the causes of action of said bankrupt corporation, but also in his legal capacity as representative, agent and trustee for the creditors of the bankrupt.

As to the evidence introduced it was shown that Fulton & Fulton Associates, Inc. was incorporated on June 27, 1960, with an authorized issue of one hundred shares of no-par value stock; that Claude F. Fulton attended the first meeting of share holders and was elected a director of the corporation; that he attended the first meeting of the Board of Directors, and was elected president, treasurer and chairman, of the Board. At the first meeting of the Board of Directors a resolution was passed authorizing the issuance of 10,-000 shares of no-par value stock to Claude F. Fulton for his interest in Fulton & Fulton, a partnership, the minutes of this meeting being signed and approved by Claude F. Fulton, as president. 10,000 shares of stock were issued to Claude F. Fulton, but said shares of stock were never transferred on the • corporate books. The certificates of said stock were signed by Claude F. Fulton as President of the Corporation. Evidence revealed that Claude F. Fulton incurred debts and executed a contract on behalf of the corporation. There was further evidence that there was in reality no partnership known as Fulton & Fulton, and that Claude F. Fulton was not a member of any such partnership. The evidence further revealed that no money, property or services were transferred to the corporation by or for the 10,000 shares of stock issued to Claude F. Fulton. Concerning the value of the stock the evidence revealed that of the initial issuance of 26,000 shares, 1,000 were sold at a price of one dollar per share to Jane Ezell and that on August 8, 1960 the Board of Directors ordered the issuance of the 26,000 shares of capital stock, and set the price of one dollar per share on all further sales. Appellant testified at the first meeting of creditors that the value and price of the stock was one dollar per share. Appellant, as president of the corporation, issued stock certificates at one dollar per share. The testimony revealed that Harold Abramson is the trustee in bankruptcy of Fulton & Fulton Associates, Inc., bankrupt. His capacity, as such trustee in bankruptcy was not denied by appellant.

At the outset, appellee objects to our consideration of appellant’s argument contained in his brief to the effect that the trustee in bankruptcy has no standing to bring this suit. We sustain this objection. Appellant assigned no points of error in his brief as a basis for such argument or contention and therefore the same has been waived. Rule 418, Texas Rules of Civil Procedure; Wagley v. Fambrough, 163 S.W.2d 1072, Tex.Civ.App., aff. 140 Tex. 577, 169 S.W.2d 478; Root v. Texas Bitulithic Co., Tex.Civ.App., 316 S.W.2d 293, wr. ref. Even so, there is no question but that under Texas law receivers, and assignees for the benefit of creditors and trustees in bankruptcy are proper parties to bring such an action for creditors. Showalter v. Laredo Imp. Co., 83 Tex. 162, 18 S.W. 491; Jamison Cold Storage Door Co. v. Brown, Tex.Civ.App., 218 S.W.2d 883; Herf & Frerichs Chemical Co. v. Brewster, 54 Tex.Civ.App. 217, 117 S.W. 880; Stevens v. Davenport, Tex.Civ.App., 19 S.W.2d 445; Witt v. Nelson, Tex.Civ.App., 169 S.W. 381. A receiver of an insolvent corporation has been repeatedly held to have authority to pursue unpaid stock subscriptions for the benefit of the creditors. Harris v. Ferguson, 137 Tex. 592, 156 S.W.2d 135; Thompson v. First State Bank of Amarillo, 109 Tex. 419, 211 S.W. 977; McCarty v. Langdeau, Tex.Civ.App., 337 S.W.2d 407.

Appellant’s first point, contending that the trial court erred in holding that the proper value to be assigned to the stock was one dollar per share, is not followed by authorities or argument, as required by rules. Such point may therefore be said to have been waived. Young v. Texas & Pac. Ry. Co., Tex.Civ.App., 347 S.W.2d 345. However, as reflected by the foregoing summarization of the testimony, there was ample evidence introduced to support the trial court’s finding of value of the stock in question. Appellant, by his acts and conduct as an officer of the corporation is shown to have acquiesced in the establishment of such value.

Appellant’s principal assault upon the trial court’s judgment is found in his second point wherein he argues that if, as the court found, no partnership existed, and there was no transfer of property in payment of the shares of stock, and no payment was made in consideration for the issuance of the stock to appellant, then, under the express provision of the Constitution of Texas, Art. 12, § 6, Vernon’s Ann.St. and Art. 2.15, subd. B of the Texas Business Corporation Act, V.A.T.S., the issuance of the stock was void and neither the appellant nor the corporation, or the trustee in bankruptcy could legally enforce liability thereon.

Art. 12, § 6 of the Texas Constitution provides that no corporation shall issue stock or bonds except for money paid, labor done, or property actually received, and all fictitious increase of stock or indebtedness sh'all be void.

Appellant’s ultra vires plea is not available in an action of this kind. This suit is one for the benefit of creditors of an insolvent corporation in which the unpaid stock subscriptions are regarded in law as a trust fund or creditors. The rights of other parties being involved, the breaching defendant, who acted as shareholder, is said to be estopped to assert such matters as fraud in inducement by the corporation, lack of a valid subscription contract, an agreement not to require payment, and similar defenses. The situation is classically illustrated by the opinion of the Supreme Court in Thompson v. First State Bank of Amarillo, 109 Tex. 419, 211 S.W. 977, where the court speaking through Chief Justice Phillips, said:

“Upon what principle is Thompson here entitled to be exempted from his obligation to pay for his stock? His counsel asserts that he is absolved from it because he, with the bank, violated the Constitution in the transaction wherein by means of the note, he agreed to perform it. The proposition is, that though his obligation is unperformed, his violation of the Constitution gives him immunity from its performance. The Constitution, in our opinion, can not be so used to defeat the honest claims of creditors. It makes a travesty of the Constitution to permit it in such a case to be turned into a shield for the protection of the delinquent stockholder.”

Accord: Mitchell v. Porter, 223 S.W. 197, Tex.Com.App.; Langdeau v. Dick, Tex.Civ.App., 356 S.W.2d 945; Forman v. Irby, 115 S.W.2d 1229, Tex.Civ.App., wr. ref.; Davis v. Burns, 173 S.W. 476, Tex.Civ.App., wr. ref.; 14 Tex.Jur.2d (Corporations) 242-243; 18 C.J.S. Corporations § 245, pp. 689-690.

It is well settled that unpaid stock subscriptions are a trust fund for the benefit of creditors which the corporation cannot impair nor may it be defeated by fraud in the inducement. Bartelt v. Lehmann, 207 S.W.2d 131, Tex.Civ.App., wr. ref.; Forman v. Irby, 115 S.W.2d 1229, Tex.Civ.App., wr. ref.; Stevens v. Davenport, Tex. Civ.App., 19 S.W.2d 445; Thomason v. Miller, Tex.Civ.App., 4 S.W.2d 668; Mitchell v. Bowles, Tex.Civ.App., 248 S.W. 459; Mitchell v. Hancock, Tex.Civ.App., 196 S.W. 694; McWhirter v. First State Bank of Amarillo, 182 S.W. 682, Tex.Civ.App., wr. ref.; Davis v. Burns, 173 S.W. 476, Tex.Civ.App., wr. ref.; Mason v. First National Bank of Paint Rock, Tex.Civ.App., 156 S.W. 366; 14 Tex.Jur.2d (Corporations) 252; 18 C.J.S. Corporations § 245, p. 692.

Appellant’s second point is overruled.

Appellant’s third point, complaining of the insufficiency of the evidence to sustain the finding of the trial court that no property was transferred to the corporation in payment for the stock involved is likewise without merit and overruled. Appellee introduced evidence of lack of payment of any kind as well as the falsity of the purported transfer of partnership assets. Appellant offered no testimony, confining his case to cross-examination of ap-pellee’s witnesses. Appellant himself, in answer to request for admissions of fact, denied that there was a partnership known as Fulton & Fulton, or Fulton & Fulton Associates. There was ample testimony to establish the absence of the alleged partnership as well as the complete absence of the payment of any kind for the stock certificates issued to appellant.

The judgment of the trial court is affirmed.


author: DIXON, Chief Justice.

text:
    James VOURAS, Appellant, v. 3525 TURTLE CREEK, INC., Appellee.
    No. 16176.
    Court of Civil Appeals of Texas. Dallas.
    June 14, 1963.
    Rehearing Denied July 19, 1963.

      James L. Mitchell, Dallas, for appellant.
    Stark & Davey, Gainesville, for appellee.
   DIXON, Chief Justice.

This is an appeal from a judgment for $1,500 in favor of appellee 3525 Turtle Creek, Inc. against James Vouras, appellant.

Appellee alleges that Vouras agreed to pay one-half of the cost of remodeling certain leased premises. The evidence shows that the actual costs amounted to $11,559.60. However a jury found that the reasonable and necessary costs amounted to only $3,-000.

Appellant Vouras contends that no judgment should have been rendered against him. Appellee, 3525 Turtle Creek, Inc. in a cross-assignment of error contends that it should have had judgment for $5,779.80.

For a proper understanding of the controversy we believe it well at the outset to identify the parties.

3525 Turtle Creek, Inc. was a corporation which formerly owned a large luxury apartment building known as 3525 Turtle Creek Boulevard, located in the City of Dallas, Texas.

James Vouras and wife Betty Vouras and Raymond J. LaCombe, as lessees, and 3525 Turtle Creek, Inc. as lessor, in 1957 entered into a written lease agreement covering part of the first floor of the apartment building.

Turtle Room, Inc. was a corporation formed by James Vouras, Betty Vouras and Raymond LaCombe, who assigned their lease contract to the corporation. The assignment was made with the consent of the original lessor, 3525 Turtle Creek, Inc. subject to certain terms and conditions set out in the original written agreement. The new corporation used part of its leased premises in the operation of a restaurant known as the Turtle Room.

Club 3525, Inc. was a non-profit corporation without capital stock. It was organized for the purpose of operating a private club. A portion of the premises originally leased by James Vouras, Betty Vouras and Raymond LaCombe to Turtle Room, Inc. was rented on a month to month basis to Club 3525, Inc. by Turtle Room, Inc.

The only entrance and exit into and out of the private club was by way of the hallway leading through the main lobby of the apartment building. Shortly after the club began operation the owner of the apartment, 3525 Turtle Creek, Inc., began receiving complaints from its tenants about the patrons of the club using the lobby. It was charged that persons in a drunken condition congregated in the lobby often causing noisy disturbances lasting through most of the night.

It was decided that the only solution to the problem was to provide a new entrance-way into the club from the outside of the building so that the lobby need not be used by the club’s patrons. 3525 Turtle Creek, Inc. claims Vouras agreed to pay one-half of the cost of this change. Vouras denies that he made any such agreement.

Following the refusal of Vouras to pay his alleged portion of the costs suit was instituted by 3525 Turtle Creek, Inc. against James Vouras, Betty Vouras, Club 3525, Inc. and Turtle Room, Inc. Recovery was sought against James Vouras and Betty Vouras; and in the alternative against Club 3525, Inc. and Turtle Room, Inc. if it should be found that James Vouras and Betty Vouras were acting as agents of the two corporations.

Judgment was rendered against James Vouras and in favor of the other defendants.

In his first and second points on appeal Vouras attacks the right of 3525 Turtle Creek, Inc. to sue as plaintiffs, and says that necessary parties were not before the court, tie points out that some time after the remodeling was finished 3525 Turtle Creek, Inc. sold all or nearly all of its assets, including its claim against Vouras, to a corporation known as Traco Dallas, Inc. Then 3525 Turtle Creek, Inc. was voluntarily dissolved as a corporation. Following this dissolution Traco Dallas, Inc. assigned the claim against Vouras back to 3525 Turtle Creek, Inc. It is the position of Vouras that since 3525 Turtle Creek, Inc. had been dissolved and had disposed of its claim against Vouras, it could not take the claim back, then sue as plaintiff.

We are unable to agree with appellant. Old Art. 1388 V.A.C.S. expressly provides that the officers and directors of a dissolved corporation in the settlement of its affairs may maintain judicial proceedings in the name of the corporation. Art. 7.12 of the Business Corporation Act, V.A.T.S., which supersedes Old Art. 1388, makes similar provisions if suit is instituted within three years after dissolution. In the case now before us the original assignment of the Vouras claim by 3525 Turtle Creek, Inc. to Traco Dallas, Inc. provided that the claim would be reassigned to 3525 Turtle Creek, Inc. if Traco Dallas, Inc. failed to collect the claim within 90 days. The assignment and reassignment were obviously a part of the transactions carried on in settling the affairs of the dissolved corporation. Appellant’s first and second points are overruled.

The substance of appellant’s third point is that the verdict of the jury was in hopeless and irreconcilable conflict as to a material fact and will not support a judgment against Vouras. The basis for this point is to be found in the answers of the jury to Special Issues Nos. 2 and 4. We quote the two issues and the jury’s answers:

“SPECIAL ISSUE NO. 2.
“Do you find from a preponderance of the evidence that James Vouras, at the time and on the occasion in question, was an agent of Club 3525, Inc. ?
“In connection with this issue, you are instructed that by the term ‘agent’ is meant one who undertakes to transact some business or to manage some affair for another by the authority and on account of the latter, and to render an account of it. Answer YES or NO.
“Answer: NO.
“SPECIAL ISSUE NO. 4.
“Do you find from a preponderance of the evidence that the Defendant, James Vouras, in entering into the agreement in question, if any you have found, acted without authority from Club 3525, Inc? Answer YES or NO.
“Answer: NO.”

Appellant says that under the jury’s answer to Special Issue No. 2 Vouras was not acting as an agent of Club 3S2S, Inc., but under the jury’s answer to Special Issue No. 4 he was an agent of Club 3525, Inc.

Though the jury’s answers to the two issues may at first glance seem to be in conflict we are convinced after a careful study of the whole record that they are not. In arriving at this conclusion we have been guided by certain well established principles. The entire charge and all of the verdict must be considered. Little Rock Furniture Mfg. Co. v. Dunn, 148 Tex. 197, 222 S.W.2d 985 (modified in another particular in Bradford v. Arhelger, 161 Tex. 427, 340 S.W.2d 772). Specific findings will control general findings. Ft. Worth & Denver Ry. Co. v. Britton, Tex. Civ.App., 310 S.W.2d 654; Benson v. Missouri K. & T. R. Co., Tex.Civ.App., 200 S.W.2d 233; Leonard v. Young, Tex.Civ.App., 186 S.W.2d 81; Sproles v. Rosen, 126 Tex. 51, 84 S.W.2d 1001. Conflicts which may be apparent rather than real may be disregarded. Texas Employers Ins. Ass’n v. McDowell, Tex.Civ.App., 278 S.W.2d 444; Amis Propane, Inc. v. Graves, Tex. Civ.App., 305 S.W.2d 300; Gregory v. City of Garland, Tex.Civ.App., 333 S.W.2d 869; Poynor v. Groves, Tex.Civ.App., 88 S.W.2d 657. It is the duty of the court to reconcile apparent conflicts in any findings if reasonably possible. Indemnity Ins. Co. of North America v. Craik, 162 Tex. 260, 346 S.W.2d 830; see also 41-B Tex.Jur. 794, 812.

In the instant case the jury specifically found that (1) Vouras agreed to pay one-half of the costs of the remodeling; (2) at the time he was not an agent of Club 3525, Inc.; and (3) at the time of making the agreement Vouras was not acting in the course of his employment with Club 3525, Inc. Against these specific findings is the strange, general, vague and negative finding (4) Vouras in entering into the agreement did not act without authority from Club 3525, Inc.

It may be that Vouras did have authority-from the Club to remodel its entrance at his own expense, or partly at his expense.. After all the remodeling itself could not. be done without the authority of the Club,, even if Vouras was willing to pay half of' the expense and the Club was not expected, to bear any of the expense. Viewed in. that light the answers to Issues Nos. 2 and' 4 are not really in conflict. Appellant’s, third point is overruled.

In his fourth point appellant asserts that it was error to render judgment against him because the suit was predicated on an oral’ promise to pay the debt of another contrary to Sec. 2, of Art. 3995, Vernon’s Ann. Civ.St. In support of this view Vouras seeks to show that the debt, if there was-one, was the debt of Club 3525, Inc., not. a primary debt of his.

We do not agree with appellant.. The jury found that (1) Vouras agreed.', to pay one-half of the remodeling costs,, and (2) at the time he was not an agent: of Club 3525, Inc. There was ample evidence to support these findings.

There is testimony that Vouras was-shown the plans for the remodeling and* thereafter he said “Well, we will go 50-50”' and “We will go half and half.” In the light of other statements and surrounding-circumstances the jury was justified in interpreting the above statement as a direct-promise of payment by Vouras.

Numerous letters were sent to Vouras demanding payment. He did not at that time deny the debt or deny receiving the letters.. He testified that he didn’t read the letters.. There is testimony that on one occasion-, when he was asked to pay he said, “Oh,. don’t worry, I will give you your money;, don’t worry; you know me.”

The original lease contract on which) Vouras is named as one of the lessees contains provisions for assignment, with lessor’s consent, of the lease to corporate as-signee. But the -Tease also provides that,, in the event sucll an assignment is made- * * * the parties Lessee herein shall ■ agree to continue to remain jointly and severally liable for performance of compliance with all of Lessees’ obligations, agreements and liabilities hereunder * * * ■ and shall continue in active charge and management of said restaurant and Lessees’ private club and all operations thereunder.” (emphasis ours)

These and other facts and circumstances ■negative appellant’s contention that the debt in question was not a primary debt of 'Vouras himself. Appellant’s fourth point •is overruled.

In his fifth, sixth, seventh and tenth ■points appellant says that the evidence is insufficient to support (5) the jury’s answer "to Special Issue No. 1 (in which it was ■found that Vouras agreed to pay one-half the cost of the remodeling), (6) a finding •of the consideration for the agreement, and (10) the judgment entered. The seventh -point is to the effect that there was no evidence to support a finding of consideration.

In connection with the fifth and sixth •points appellant contends that the court : should have granted his motion for instructed verdict and for judgment. This •is equivalent to saying that there was no evidence to support a judgment for .appellee. See Article in 38 Tex.Law Rev. ■ 361 entitled “ ‘No Evidence’ and ‘Insufficient Evidence’ ” by Chief Justice Robert W. Cal-vert.

None of the four points should 'be sustained. We considered certain aspects of the evidence in connection with • our discussion of appellant’s second point. ’There was sufficient evidence to show a ■consideration for the agreement by Vouras. 'Under the original lease agreement the lessees, of whom Vouras was one, were required to own at least 50% of stock in any corporate assignee. This applied to both Turtle Room, Inc., the restaurant, and •Club 3525, Inc., the private club. Vouras was vitally interested in both these corporations and the profits they might earn. '«He stood to lose a great deal if his lease were cancelled because of breach of covenants or law violations. This is shown by his concern when faced with the necessity of removing the cause for the complaints made by the building owner and its tenants. There is testimony by an officer of 3525 Turtle Creek, Inc. as follows:

“Q Now, then between Christmas of 1958 and the time that this remodeling took place, I will ask you, did Mr. Vouras himself make any remarks to you about what he was going to do?
“A Yes, sir.
“Q What did he tell you he was going to do?
“A During our several discussions he said * * * ‘Well, I am going to cure this; I will knock a hole through the back of that and make our own entrance, and it won’t bother you’.”

We further quote from the record testimony :

“Q Now, did you ever call upon Mr. Vouras to correct that situation?
“A Yes, several occasions, sir.
“Q What would he do when you asked him to correct it?
“A Well, he normally would say, ‘I can’t run a club and run other folks’ business; I will do the best I can’.”

Appellant’s fifth, sixth, seventh and tenth points are overruled.

In his eighth point appellant claims that the judgment has no support in the pleadings. Appellee pled that James Vouras and Betty Vouras individually entered into the- oral contract and that they individually agreed to pay appellee one-half the costs of the remodeling. The eighth point is overruled.

In his ninth point appellant argues that the jury verdict will not support the judgment because it was not established that (1) Vouras intended to be personally bound; (2) appellee relied on the personal credit of Vouras; and (3) there was a consideration for the agreement. These contentions are covered by our discussions of other points presented by appellant. The ninth point is overruled.

In its cross-assignment of error ap-pellee urges us to reverse the judgment in its favor for $1,500 and to render judgment in its favor for $5,779.80. Appellee’s position is that Vouras agreed to pay one-half of the actual costs, not merely one-half of the necessary and reasonable costs.

We must overrule appellee’s cross-assignment. There is evidence that James Vouras and Betty Vouras chose very expensive materials because they “wanted the best.” But appellee itself undertook to show by the testimony of its architect that the material and labor that went into the remodeling were necessary and reasonable. There is also evidence that some of the costs were charged as general maintenance expenses, not as remodeling expenses.

The judgment of the trial court is affirmed.


text:
    T. C. COVINGTON, Appellant, v. The CITY OF DENISON, Appellee.
    No. 16223.
    Court of Civil Appeals of Texas. Dallas.
    June 28, 1963.

      Slagle & Kennedy, Sherman, for appellant.
    Hal Rawlins, City Atty., and Charles H. Gullett, Denison, for appellee.
   WILLIAMS, Justice.

Summary judgment proceeding Rule 166— A, Texas Rules of Civil Procedure. Appellant, T. C. Covington, a property owner in the City of Denison, made application to the City for permission to have his property placed in a district which would permit him to sell alcoholic beverages. The application being denied appellant brought this suit alleging that such action by the City was an abuse of its discretion and that such denial was arbitrary, capricious and unreasonable. His suit was in the nature of a mandamus action wherein he requested the District Court to direct the City to grant his application to place his property in a district where liquor might be legally sold. Appellant also contended that Sections 7 and 8 of the Liquor Ordinance of the City of Denison were invalid.

The City filed its motion for summary judgment, duly verified, and attached thereto certified copies of the applicable ordinances relating to the sale of intoxicating beverages within the City of Denison, and also minutes of the proceedings before the City Council which culminated in the refusal of appellant’s application. Appellant made no answer to the motion nor did he file countervailing affidavits or other extrinsic evidence in opposition thereto. The trial court sustained appellee’s motion for summary judgment, denying appellant any relief. Appellant assails the judgment of the trial court in two points of error, namely, (1) that “the court erred in granting ap-pellee’s motion for summary judgment”, and (2) “that Sections 7 and 8 of the Ordinance in question are invalid as they are unreasonable, discriminatory and oppressive”. We find no merit in either of appellant’s points and affirm the judgment.

Appellant’s first point contending that “the trial court erred in granting ap-pellee’s motion for summary judgment” is too general and does not meet the requirements of Rule 418, T.R.C.P. relating to briefing. White v. Great American Reserve Ins. Co., Tex.Civ.App., 342 S.W.2d 793; Little v. Employees Security Life Ins. Co., Tex.Civ.App., 343 S.W.2d 517. However, as we said in Wyche v. Noah, Tex.Civ.App., 288 S.W.2d 866, while the point may be too general this court will discuss the grounds as we understand them upon which appellant apparently relies to support his appeal, as disclosed in the statements and arguments accompanying his points on appeal.

Inasmuch as appellee’s motion for summary judgment is aimed directly at the sufficiency of appellant’s petition, it being contended that said petition, as a matter of law, fails to present an issue of fact to be decided by a court or a jury, it is important to carefully analyze what appellant has alleged in this pleading. After reciting that he is the owner of certain described property in the City of Denison, he then says that he filed his application with the City for “the districting” of his property for the sale of alcoholic beverages and that, after hearing, the City denied his request. He then says that the City of Denison is a “wet” area by virtue of an election held in 1960 and that thereafter the City enacted an Ordinance regulating the sale of intoxicating beverages. He alleges that Sections 7 and 8 of said Ordinance are “void” because (a) Section 7 wholly fails to define or set forth “those districts where such sale is permitted by Ordinances of the City of Denison”; and (b) said Ordinance wholly fails in Section 8 (1) to locate the various districts described therein. He then avers that there was an amendment to the Ordinance, and by such amendment reference was made to “an official map” which indicated the various “districts” inside the City but he contends that the Ordinance is still invalid and void for the reason that said map indicates that the only “districts” where alcoholic beverages are permitted to be sold within its boundaries are those establishments then in existence at the time of the passing of said Ordinance. He says that the legal effect of Sections 7 and 8 of the Ordinance is to place in the hands of the governing body of the City the legislative power to prevent any other property in the City from securing a “district”.

Pleading in the alternative, appellant then alleges that if the Ordinance complained of is found to be valid and enforceable he then asks the court to issue a writ of mandamus ordering the City Council of the City of Denison to grant him his application because the “Council arbitrarily, unreasonably, and without any justification denied the application.”

Appellant in his brief, concedes that the minutes of the hearings before the City Council are properly reported and that the Ordinances attached to the City’s motion are the ones of which complaint is made. Appellant also stipulates : “For the purpose of this appeal, we will also concede that the facts, so far as they were presented to the trial court, are not in dispute.”

We fully recognize the rule which has been announced by this, and other courts, to the effect that a defendant moving for summary judgment assumes the negative burden of showing, as a matter of law, that the plaintiff has no cause of action against him and that all doubts as to the existence of the genuine issue of fact must be resolved against the party moving for a summary judgment. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929; Glasgow v. Floors, Inc. of Texas, Tex.Civ.App., 356 S.W.2d 699 and Seale v. Muse, Tex. Civ.App., 352 S.W.2d 534. Even so, having, carefully considered appellant’s pleading, and appellee’s motion for summary judgment, with supporting extrinsic evidence, we are of the opinion that appellant’s-pleading does not present an issue of fact, as a matter of law. Again it must be pointed out that in this case appellant failed to amend his pleadings, failed to controvert the motion for summary judgment, and failed to file an affidavit or extrinsic evidence which might present a fact issue. Gulf, C. & S. F. Ry. Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492, 500; McDonald Texas Civil Practice, Vol. 4, Cumulative Supplement, pages 31-44, § 17.26.0 to § 17.26.3. Appellant admits that the facts as presented to the trial court are not in dispute. We do not believe that appellant’s petition meets the requirements of the law to constitute proper allegations of fact which would legally present issues to a court or jury.

This case presents classic illustration of the rule, sometimes known as “Piercing the Pleading”. Justice Young of this Court in Sparkman v. McWhirter, 263 S.W.2d 832, 838, succinctly stated: “Object of the Rule (Rule 166-A) is to permit movant to pierce formal allegations of fact in pleadings and grant relief by way of summary judgment when it appears from uncontroverted facts set forth in affidavits, depositions, or admissions on file that, as a matter of law, there are no substantive issues of fact presented for trial.” See also Sessions v. W. A. Sheaffer Pen Co., Tex.Civ.App., 344 S.W.2d 180. Again, in the case of Baxter v. Beaupre, Tex.Civ.App., 295 S.W.2d 718, the court said: “It is to be noted that in order to defeat the entry of the summary judgment because there exists a genuine issue on the fact to be determined, such fact must be material. A motion for summary judgment is, therefore, analogous to a general demurrer. Where a motion for sum' mary judgment relies upon the pleadings alone it partakes of the office of a general demurrer, but in addition its office is to pierce the pleadings and ascertain whether there are material issues of fact supporting plaintiff’s allegations or defendant’s defense. Statham v. City of Tyler, Tex.Civ.App., 257 S.W.2d 742; Meyer v. Wichita County Water Improvement Dist. [Nos. 1 and 2] Tex.Civ.App., 265 S.W.2d 660. (Emphasis •ours).

When we analyze appellant’s petition in the light of these rules it is quite evident that there are no allegations of material facts contained therein. On the contrary, •appellant alleges numerous conclusions relating to alleged illegality of the Ordinances in question as well as the alleged arbitrary and capricious action on the part of the City in denying the application. Such are nothing more than conclusions wholly unsupported by allegations of fact.

Appellant’s complaint that the two provisions of the Ordinance in question •were invalid because they did not define ^certain areas of “districts” and that such ■Ordinances were discriminatory as to existing businesses, has been adjudicated contrary to appellant’s contention in several ■cases. In the case of Eckert v. Jacobs, Tex.Civ.App., 142 S.W.2d 374 the identical questions were presented to the Austin Court of Civil Appeals and that Court up-Leld almost identical Ordinances against a ■similar attack. Other courts have held similar Ordinances to be valid, as a matter -of law, against identical attacks. Louder v. Texas Liquor Control Board, Tex.Civ. App., 214 S.W.2d 336; Pitre v. Baker, Tex. Civ.App., 111 S.W.2d 359; Tritico v. Texas Liquor Control Board, 133 Tex. 388, 128 S.W.2d 379; LeGois v. State, 80 Tex.Cr.R. 356, 190 S.W. 724.

The mere allegation by appellant to the effect that the City of Denison acted arbitrarily and capriciously in refusing his permit, without alleging supporting facts and without presenting affidavits or other extrinsic evidence in support of such conclusions, is wholly insufficient to create an issue of fact. One who attacks an ordinance must do more than merely allege conclusions of law. He must aver the facts that make it illegal. He must specifically plead objections to the validity of an ordinance and not merely charge it as being unconstitutional or void. McQuillan on Municipal Corporations, § 20.21; § 21.17; and § 21.50.

The City of Denison is a home rule city invested with authority under its police power, to regulate the sale of liquor within its limits. The question of whether the Ordinance in question is void as being arbitrary and unreasonable is one of law and not a matter for a jury’s determination. City of Dallas v. Rosenthal, Tex.Civ.App., 239 S.W.2d 636; City of University Park v. Hoblitzelle, Tex.Civ.App., 150 S.W.2d 169; City of Dallas v. Lively, Tex.Civ. App., 161 S.W.2d 895; City of Waxahachie v. Watkins, 154 Tex. 206, 275 S.W.2d 477 and Ray v. City of Dallas, Tex.Civ.App., 343 S.W.2d 930. The evidence presented to the City Council of the City of Denison in this case as revealed by the minutes attached to the motion for summary judgment, reveals issues presented to the City Council within its legislative power and its finding based thereon will not be disturbed by this Court under the authorities just cited.

The judgment of the trial court is affirmed.

      . Moreover, we entertain grave doubts that appellant’s application to the City Council is legally sufficient to comply with the express terms of the Ordinance in question and this would constitute an additional valid ground for the City’s refusal. For example, the application (1) fails to describe the exact nature of the business; (2) fails to have attached thereto a plot; (3) fails to describe the signs to be erected and house used; (4) fails to attach floor plans of the building; (5) fails to attach statements and fingerprints of persons interested in the business and (6) fails to attach verified statement as to distances from church, school or hospitals, etc.


author: FANNING, Justice.

text:
    Paulean Elizabeth DeLIPSEY, Appellant, v. Harry Clay DeLIPSEY, Appellee.
    No. 7513.
    Court of Civil Appeals of Texas. Texarkana.
    July 16, 1963.
    Horace G. Goodrich, Dallas, for appellant.
    James Ross, Longview, for appellee.
   FANNING, Justice.

Plaintiff-appellant sued defendant-appel-lee for divorce, custody of their two minor children and on other matters. Appellee filed a cross-action for divorce and sought custody of the two minor children. A jury answered all special issues submitted in favor of appellee and against appellant. The trial court rendered judgment granting appellee a divorce and custody of the two minor children, and granted certain stated visitation rights to appellant, and also adjudicated the property rights of the parties and other stated matters. Appellant’s motion for new trial was overruled and she has appealed.

Although appellant on appeal refers to certain numbered pages in an alleged statement of facts a careful check of the records of this court reveals that no statement of facts has been filed in this court in this cause. Also neither a statement of facts on motion for new trial nor any bills of exception have been filed in this court in this cause.

Appellant’s 2nd, 3rd and 6th points relate to alleged perjury, alleged jury misconduct and the alleged error of the trial court in refusing to grant plaintiff-appellant’s motion for judgment n. o. v. Appel-lee challenges appellant’s 2nd, 3rd and 6th points on the ground that since there is no statement of facts filed in this cause there is no way to determine whether reversible error, if any, was or was not committed in the respects complained of by such points. Ap-pellee’s objections to appellant’s 2nd, 3rd and 6th points are well taken. Lane v. Fair Stores, Inc., 150 Tex. 566, 243 S.W.2d 683. Appellant’s 2nd, 3rd and 6th points are overruled.

We also hold, after examining plaintiff-appellant’s original petition, defendant-appellee’s cross-action and defendant-appellee’s first supplemental petition, that the names and ages of the minor children were sufficiently averred and that Art. 4639a, Vernon’s Ann.Civ.St., was sufficiently complied with and that the trial court had jurisdiction to render the judgment it rendered. In this connection see the following authorities: Miller v. Miller, Tex.Civ.App., 131 S.W.2d 245; Clare v. Clare, Tex.Civ.App., 138 S.W.2d 220; Aucutt v. Aucutt, 122 Tex. 518, 62 S.W.2d 77, 89 A.L.R. 1198. Appellant’s first point is overruled.

We also hold that under this record there is no showing made that the trial court committed error in proceeding to trial without the attendance of a court reporter, as there is no showing made that plaintiff-appellant ever demanded or requested a court reporter, nor made a request for postponement or a continuance of the trial based upon the absence of a court reporter, nor ever excepted to going to trial without the presence of a court reporter. By having failed to make a request for a court reporter, by proceeding to trial without a reporter, and by failing to obtain a statement of facts independent of a court reporter’s notes in the manner provided by the rules of civil procedure, appellant has waived any alleged error on the part of the court in failing to provide, without request or objection, a court reporter. Appellant has not shown diligence and has not been wrongfully deprived of a statement of facts under this record. Appellant s 4th point is overruled.

Appellant by her Sth point contends to the effect that the trial court erred in failing to order an investigation by the juvenile department of Gregg County, Texas, concerning the surroundings and circumstances of the minor children in question, prior to trial of the cause. The record in this cause fails to show any request on the part of appellant or her counsel to the court for such an investigation and also fails to show any objection to going to trial prior to such an investigation. Also under Sec. 20 of Art. 2338-13, V.A.C.S., it was discretionary with the trial court as to whether such an investigation would be required. Neither error nor abuse of discretion on the part of the trial court in the respect complained of is shown and appellant’s 5th point is overruled.

The judgment of the trial court is affirmed.