author: DUNAGAN, Chief Justice.

text:
    Mildred Scripture COLE et vir, Appellants, v. W. H. WADSWORTH et al., Appellees.
    No. 28.
    Court of Civil Appeals of Texas. Tyler.
    Feb. 20, 1964.
    Rehearing Denied March 12,1964.

      Leon A. Smith, E. D. Hurt and Esir Tobolowsky, Dallas, for appellants.
    Wm. Andress, Jr., L. E. Elliott, Brun-didge, Fountain, Elliott & Churchill, Dallas, for appellees.
   DUNAGAN, Chief Justice.

This is an action brought by Mildred Scripture Cole, joined by her husband, L. R. Cole, as plaintiffs, against W. H. Wads-worth and National Surety Corporation, as defendants, to recover for the depletion of the assets of the estate of Robert C. Scripture, deceased, in the County Court of Dallas County, Texas, in probate No. 16,619, for the misfeasance and malfeasance of the administrator in the administration of the estate. Defendant, W. H. Wads-worth, was the administrator of the said estate and defendant, National Surety Corporation, was the surety on his bond. The plaintiff, Mildred Scripture Cole, was the sole residuary legatee of the estate. Defendant, W. H. Wadsworth, filed a motion for summary judgment based on res ju-dicata to which an answer was filed by plaintiffs. The motion was sustained by the presiding judge of the 68th Judicial District Court of Dallas County, Texas. An appeal was perfected by the plaintiffs; from the judgment.

The plaintiffs bring forward two points; of error upon which they base their appeal. The first point the plaintiffs complain that the court erred in sustaining defendants’' motion for summary judgment based on res. judicata. The complaint raised by the second point is the court erred in sustaining defendants’ motion for summary judgment based on res judicata as the defendant, National Surety Corporation, was not a party to the suit cited by defendant as the basis, of his motion for res judicata.

Appellees contend in their first counterpoint that “since the damages claimed in the instant suit are additional damages allegedly resulting from the identical act of wrongful conveyance to Wernly, and the subsequent collection of rentals from said property made the basis of the cause of action on which judgment was rendered in the first suit, the motion for summary-judgment based on a, plea of res adjudicata was properly sustained.” In the second counterpoint, they say “The secondary liability of National Surety Corporation, as surety, was discharged by the judgment in the previous suit which discharged Wads-worth, as principal, and the court therefore properly ruled that the former judgment was res adjudicata, notwithstanding the surety was made a party to the second suit.”

In Cause No. 58,681-C, in the District Court of Dallas County, appellants sued W. H. Wadsworth as administrator of the estate of Robert C. Scripture, deceased, alleging that on April 12, 1950, Wadsworth wrongfully, fraudulently and fictitiously conveyed to Wernly a part of Lots 9 and 10 of Block 790 of the City of Dallas and subsequently misappropriated the rents and revenues from said property in the alleged amount of $25,000.00 and prayed for judgment for the property, its renfs and revenues. Appellant, Mildred Scripture Cole, alleged that she had conveyed a one-half undivided interest in and to the estate as attorney’s fees. Final judgment was entered in said cause on July 25, 1958, decreeing to each, appellants Mildred Scripture Cole and Charles Ramick, her attorney, title to one-half of said property.

By first amended original petition filed in the instant case, on February 16, 1963, appellants sued Wadsworth as principal, and National Surety Corporation as surety, alleging that on April 12, 1950, Wadsworth wrongfully, fraudulently and fictitiously conveyed to W. R. Wernly part of Lots 9 and 10 of Block 790 of the City of Dallas, and over a period of ten years collected rents and revenues on the property so fictitiously sold; that such acts of Wads-worth made necessary the employment of an attorney to recover said property, which at the time was worth $20,000.00; that the payment to said attorney of one-half of said sum depleted the estate in the amount of $10,000.00; that Wadsworth collected rents on the property for ten years and converted thereof $2,400.00 to his own use and- benefit; and that she had to pay her attorney $2,000.00 for collecting from Wadsworth an additional amount of $4,000.-00 of said rent.

From a reading of the pleadings in Cause Nos. 58,681-C and 7445-G (Cause No. 7445-G is the case now before us on appeal) clearly reveals that the same acts are complained of in both cases, namely, a wrongful conveyance of the same property to Wernly and a misappropriation of said rents and revenues therefrom over a period of years.

This appeal presents a question of whether one may bring several suits for different items of damages arising from the same wrongful act.

We think the principle applicable here is aptly stated in 34 Tex.Jur.2d, page 592, Section 516, as follows:

“A party will not be permitted to split a single and indivisible claim or demand so as to make it a basis for successive suits, and if he attempts to do so, the judgment in the first case decided will bar prosecution of the others, unless the defendant is estopped by his conduct from raising the question of prior adjudication. Thus, a person seeking a recovery of damages for breach of an entire contract or for injuries resulting from a single tort must set forth every item of damages which he seeks to recover; any item not so pleaded will be barred forever. The rule against splitting causes of action also applies to the recovery of property. Thus, for example, when a party suing to recover a particular lot of property, consisting of various items, by reason of some specified transaction or occurrence, sets forth in his petition the particular items thereof, the judgment will usually preclude him from initiating subsequent litigation in respect of other items that could and should have been included within the pleadings in the first suit. And it has been held that judgment awarding the plaintiffs a recovery of a three-quarters undivided interest in a tract of land will bar a subsequent suit by the grantors of the plaintiffs against the same defendant to recover the whole of the land, the pleadings in the two cases being identical except for the difference in the relief asked.”

Texas cases applying the principle of law as above stated are: Eastland County v. Davisson (Tex.Com.App.), 13 S.W.2d 673, holding that damages for all known breaches of the same contract must be brought in one suit; St. Louis S. W. Ry. Co. v. Moss, 9 Tex.Civ.App. 6, 28 S.W. 1038, holding that where two horses are killed by the same act of negligence, filing suit for one horse bars a subsequent suit for damages to the other; Texas & P. R. Co. v. Scoggin & Brown, 42 Tex.Civ.App. 335, 95 S.W. 651, holding that failure to supply freight cars for shipment of cattle at a fixed place and time gives right to but a single cause of action and a suit for damage to a portion of the herd bars a subsequent suit for damages to another portion. This is the general rule.

Appellants have cited a number of authorities in support of their position. From a reading of these authorities it is apparent that appellants have failed to distinguish between independent causes of action and separate items of damages flowing from the same cause of action. When a party claims property consisting of various articles which he attempted to enumerate, in order that all the constituents of his claim be presented for adjudication, the judgment or decree would generally preclude further controversy in relation to matters which should have been properly embraced in the pleadings and judgment in the first litigation. McMurry v. McMurry, 67 Tex. 665, 4 S.W. 357. The court further stated this rule is subject to exceptions. However, we do not believe the case at bar is an exception to the general rule. We are aware that the rule against splitting causes of action has no application to several causes of action that are, in fact, distinct and separate even though they might possibly be joined or consolidated. In this case, appellants had but one cause of action and that arose from the single act of Wadsworth in conveying to Wernly the tract of land known as Lots 9 and 10 of Block 790.

The case of Ames v. Herrington, Tex.Civ.App., 139 S.W.2d 183 (Dism. Judgm. Cor.), is on all fours with the case now before us. It involved a suit by a former ward to collect money alleged to be due her estate by former guardians and their respective sureties.

The ward, through petition in intervention by guardian Kinnaird in a prior suit No. 15,750, litigated claims against her former guardian Frona Rice (mother of ward) concerning her estate. That trial resulted in a judgment.

On appeal, appellants (guardians and their sureties) insisted that the judgment in Cause No. 15,750 was res judicata of the issue presented in the case on appeal. The plea of res judicata was based upon the nature and scope of Cause No. 15,750, and determined by the plea in intervention filed by guardian Kinnaird in behalf of his ward.

Cause No. 15,750, based on the plea in intervention, was essentially one for dev-astavit or waste and wrongful use of the minor’s estate by her guardian, Frona Ames, and her husband J. B. Ames. As to the ward, that suit was predicated upon a breach of duty upon the part of the guardian of her estate.

The guardian therein sought to recover the value of certain property. In the latter suit, the guardian sought to recover rentals and damages. The court said:

“Cause No. 15,750 as affected by the plea in intervention was undoubtedly a suit for devastavit of the minor’s estate and all consideration given the record in the instant case necessarily leads to the conclusion that it covers the grounds extended over by the prior suit. Res ad judicata is the answer to the appellee’s suit against Frona Ames, the principal in said bonds, and it operates to exonerate her sureties from the liability asserted against them. In the absence of liability of the principal there can be no liability of the sureties.”

The court further had this to say:

“There is no question about the effect of this rule of law when applied to a proper state of facts and the facts here invoke the application of the rule.”

The court cited as authority for this statement the case of Nichols v. Dibrell, 61 Tex. 539, the court quoting therefrom said:

“It is well settled that the decision of a court of competent jurisdiction is conclusive not only as to the subject matter determined, but as to every other matter which the parties might have litigated in the case and which they might have had decided. * * * Or, as differently expressed, the plea of res judicata applies not only to points upon which the court was actually required to pronounce judgment, but to every point which properly belonged to the subject litigation, and which the parties, by exercising reasonable diligence, might have brought forward at the time.”

And it was further held in Ames v. Her-rington that under such circumstances:

“ ‘The protection of such a decision, as well as its restrictions, extend not only to the immediate parties to the suit, but also to those who stand in privity with them. Privity, in this connection, means the mutual or successive relationship to the same rights of property; that is to say, all persons are privy to a judgment whose succession to the rights of property therein adjudicated are derived through or under one or the other of the parties to the action, and which accrued subsequent to the commencement of the action. Morrison v. Cloud (Tex.Civ.App.) 13 S.W.2d 735, * *
“This opinion is believed to be m point on the contention here urged by the American Indemnity Company, and especially so, since that company cannot be held liable without primary liability upon the part of the principal.”

Based upon the record before us, we here state that it is our opinion that if any items of loss to the estate of Robert C. Scripture or incident to the administration of said estate were left out of Cause No. 58,681-C or not specifically mentioned therein, such items being incident to such cause of action could and should have been embraced therein, otherwise the proceeding would have amounted to splitting up a legitimate cause of action; and a study of the record does not suggest that such was done.

Discussing the legal effect of splitting a cause of action, it is said in Stark v. Starr, 94 U.S. 477, 485, 24 L.Ed. 276:

“It is undoubtedly a settled principle that a party seeking to enforce a claim, legal or equitable, must present * * all the grounds upon which he expects a judgment in his favor. He is not at liberty to split up his demand and prosecute it by piecemeal, or present only a portion of the grounds upon which special relief is sought, and leave the rest to be presented in a second suit, if the first failed. There would be no end to litigation if such a practice were permissible.” Ames v. Herrington, supra; Connellee, et al. v. Magnolia Petroleum Company, Tex.Civ.App., 54 S.W.2d 577.

The fact that the surety, National Surety Corporation, was not a party to the ■original suit is immaterial, at least not controlling. Its liability is only secondary and does not exist in the absence of the primary liability of the principal. If recovery of the judgment and satisfaction thereof lias been secured as against the principal, ¡the fact that the surety was not a party ■does not prevent the judgment from being .a bar to a subsequent suit upon the same ■subject matter. Ames v. Herrington, supra.

'Other authorities in support of our decision are Green v. American General Insurance Company, Tex.Civ.App., 354 S.W.2d 616; Hoehn v. Texas Employers’ Insurance Association, Tex.Civ.App., 42 S.W.2d 266; and Craig v. Broocks, 60 Tex.Civ.App. 83, 127 S.W. 572, err. den.

As we view Ames v. Herrington, .■supra, and other authorities, applied to the •case at bar, Cause No. 58,681-C was undoubtedly a suit for devastavit or waste .and wrongful use of the estate of Robert C. .Scripture and a study of the record in the ■instant case necessarily leads to the conclusion that it covers the grounds extended ■over by the prior suit. Res judicata is the .answer to the appellants’ suit against W. ,H. Wadsworth, principal in said bond, and ■it operates to exonerate National Surety ■Corporation, his surety, from the liability .asserted against it. In the absence of liability of the principal there can be no liability of the surety.

The identical questions now presented by .appellants were raised in the last above-•cited case and there decided adversely to ap-pellants’ contentions here.

We think the trial court’s judgment correctly disposed of the case and judgment of ithe court below is affirmed.


source: Caselaw Access Project

author: GREEN, Chief Justice.

license: Public Domain

text:
    MIDWEST OIL CORPORATION, Appellant, v. W. C. LUDE et ux., Appellees.
    No. 25.
    Court of Civil Appeals of Texas. Corpus Christi.
    Jan. 23, 1964.
    Rehearing Denied March 10,1964.

      W. Scott Clark, Fort Worth, Murray G. Smyth, Houston, Morrison, Dittmar, Dahl-gren & Kaine, San Antonio, for appellant.
    Linton S. Benge, Goliad, for appellees.
   GREEN, Chief Justice.

On July 14, 1942, appellees Willie C. Lude and wife, Louise Lude, executed two term royalty deeds to Walter W. Carter, each conveying an undivided >4 interest in all of the oil and gas and other mineral royalty in a certain 200 acre tract of land in Goliad County, Texas, owned by the Ludes, for fifteen years “and as long thereafter as oil, gas or other minerals, or either of them, is produced or mined from the lands described herein in paying or commercial quantities. If at the expiration of said IS years from date hereof oil, gas or other minerals, or either of them, is not being produced or mined from said land or any portion thereof in paying or commercial quantities, this contract shall be null and void and the Grantees rights hereunder shall terminate.”

On July 1, 1954, Lude and wife executed to Sunray Oil Corporation an oil and gas lease on said 200 acres, known as the Sun-ray Lease, containing a shut-in gas clause providing that where gas from a well producing gas only was not sold or used, lessee could pay as royalty $1.00 per acre per year, and upon such payment it would be considered that the property was producing. None of the defendant royalty owners signed the lease agreements. However, on November 28, 1960, Midwest Oil Corporation executed a unilateral ratification of the Sunray Lease, and all other nonparticipating royalty owners executed similar ratifications.

During the primary term of the royalty deeds Sunray-Shoreline No. 1 Lude well was drilled on the land covered by the lease, resulting in the production of oil in paying quantities. Production from this well served to extend the term of the royalty deeds beyond the date they would have otherwise expired.

On January 10, 1961, while said No. 1 well was producing, James A. Rehler under a farm-out agreement brought in a gas well on this property, which was shut-in pending negotiation of a gas purchase contract, gas line connection and Federal Power Commission certificates. Said gas well remained shut-in until May 22, 1961, at which time it was placed on production.

Production from the Sunray-Shoreline No. 1 Lude well ceased entirely on March 6, 1961, and no re-working operations were conducted thereon. The rods and tubing were pulled on April 1, 1961, and the well was plugged and abandoned on April 13, 1961.

There was no extraction of oil, gas or other minerals from the Sunray lease from March 6, 1961 to May 22, 1961.

The interests granted by the two royalty deeds from Lude to Carter vested by mesne conveyances as follows:

T. S. Reed — 1/16 of 1/8 R.I.

Foster Petroleum Corp. — 1/16 of 1/8 R.I.

Fred W. Shield — 1/16 of 1/8 R.I.

Ruth McLean Bowman — 4/16 of 1/8 R.I.

Midwest Oil Corp. --- 1/16 of 1/8 R.I.

8/16 of 1/8 R.I.

Appellees W. C. Lude and wife, brought this suit for a declaratory judgment seeking an adjudication that the term royalties had terminated between the time the oil well was depleted on March 6, 1961, and actual production began from the Rehler gas well on May 22, 1961. Although the stipulation is silent as to whether shut-in gas royalty was paid during this interval, no one contested the fact that the lease at all times remained in full effect. All of the royalty claimants under the deeds were named as defendants. Foster Petroleum Corporation and Ruth McLean Bowman filed disclaimers.

The trial before the court was on a written stipulation of facts under Rule 263, T.R. C.P. No issue of fraud or bad faith was raised by either party. The judgment was that the term royalties had terminated on March 6, 1961. Defendants Reed, Shield and Midwest Oil Corporation excepted and gave notice of appeal, but only the Midwest perfected its appeal to this court. We affirm the judgment.

Appellant Midwest Oil Corporation, hereinafter called Midwest, bases its appeal on three points, as follows:

“Points of Error
“First Point.- — -Where a term royalty is extended by production, if that production is interrupted, the criterion is whether the interruption is temporary or permanent.
“Second Point. — In determining whether interruption of production is temporary or permanent, the facts about production should be examined with respect to the entire tract, and not confined to the single well on that tract.
“Third Point. — Where the reversion owners execute, and the term royalty owners ratify, a lease containing a stipulation that payment of shut-in gas royalty shall constitute commercial production from subject land, the term royalty deed is modified.”

Midwest asserts that the above legal precepts were overlooked by the trial court, and said precepts should govern the decision in this cause.

The first two points are briefed together and shall be so considered by us. We find no fault with the general statements contained therein, but differ with appellant as to the manner in which they should be applied to the facts of this case.

It is now well established that the completion of a gas well capable of producing in paying quantities but shut-in due to lack of pipe line facilities or for other reasons is not considered production, or production in paying quantities, under the provisions of a term royalty deed which contains no shut in gas well clause. Archer County v. Webb, 161 Tex. 210, 338 S.W.2d 435; Gulf Oil Corp. v. Reid, 161 Tex. 51, 337 S.W.2d 267; Holchak v. Clark, Tex.Civ.App., 284 S.W.2d 399, writ ref.; Sellers v. Breidenbach, et al., Tex.Civ.App., 300 S.W.2d 178, writ ref.; Holland v. Vela De Pena, Tex.Civ.App., 343 S.W.2d 750, writ ref.; Investors Royalty Co. et al. v. Childrens Hospital Medical Center, et al., Tex.Civ.App., 364 S.W.2d 779, writ ref. n. r. e.; Midwest Oil Company v. Mengers, Tex.Civ.App., 372 S.W.2d 247, writ, ref.; Union Producing Co. v. Scott, 173 F.Supp. 361, aff’d. 5th Cir. 267 F.2d 469. After the Sunray-Shoreline No. 1 Lude well completely depleted on March 6, 1961, there was, therefore, no production of minerals on the 200 acre tract until the Rehler gas well was connected to the pipe line and placed in production on May 22, 1961.

Appellant argues that since there had been actual production which had extended the term royalty beyond its original time, such production in paying quantities was only temporarily interrupted during the period from March 6, 1961, to May 22, 1961, and in support of such contention cites Midwest Oil Corporation v. Winsauer, et al., 159 Tex. 560, 323 S.W.2d 944, and Stuart v. Pundt, Tex.Civ.App., 338 S.W.2d 167, writ ref.

We do not believe that the cases or Midwest Oil Corporation, et al. v. Winsauer, et al., supra, and Stuart v. Pundt, supra, are controlling of the present case. In Midwest Oil Corp. v. Winsauer, production from a gas well had served to extend the rights of the royalty owners. Due to litigation between the lessee in the lease and the fee owners and mechanical breakdowns in the well, production was caused to cease for 174 days, during which interval the litigation was brought to an end, the well was repaired, and production resumed. The Supreme Court stated: “The question we have for decision is whether the cessation of production from such well due to litigation and mechanical breakdowns terminated the term royalty deed,” and held: “Since the facts in the present case clearly show that the cessation of production in paying or commercial quantities was temporary and not permanent, and that the diligence of the operator restored production from the Ross-Singleton No. 1 well within a reasonable time, it follows that the estate granted by the royalty deed is still in full force and effect and has not terminated.”

Stuart v. Pundt, Tex.Civ.App., 338 S.W.2d 167, writ ref., cites with approval Midwest Oil Corp. v. Winsauer, supra, and holds that where production from a gas well ceased due to a mechanical breakdown in the well, and after two months of a fruitless work-over job the well was abandoned because the casing in the well had collapsed and it was impractical to restore same, and a new producing well was promptly drilled to the same sand, the interruption in production was only temporary and the term royalty deed did not terminate.

Both of these cases dealt not only with the matter of temporary interruption of production, but also with continuous and diligent operations during such period to restore production by repairing the damage to the well (in both cases) and by drilling a new well to the same producing sand after such efforts had failed. (Stuart v. Pundt) In neither case was the period of no production found to be temporary by reason of subsequent production from a shut-in gas well.

In the instant case, when the well ceased to produce it was immediately abandoned. The parties stipulated that there were no re-working operations conducted thereon. “Operations” cannot be extended to include a search on the part of lessee for a market, or to secure a purchaser. Gulf Oil Co. v. Reid, 161 Tex. 51, 337 S.W.2d 267. The existence of the shut-in gas well on the lease could not serve to benefit the rights of appellant, and the situation presented a case of no production and no activity on the lease after the No. 1 Lude well was totally abandoned, so long as the gas well remained shut-in.

Three years after handing down the opinion in Stuart v. Pundt, supra, the same court decided Investors Royalty Co. et al. v. Childrens Hospital Medical Center, et al., 364 S.W.2d 779, writ denied n. r. e. The facts are very nearly identical in principle with our situation. The term royalty interests were extended by virtue of production which continued until July, 1958, when the well completely depleted. It was plugged and abandoned in September, 1958. In September, 1957, while this well was producing, a well capable of producing gas in commercial quantities was completed and shut-in for lack of market. In January, 1959, while there was no actual production from the lease, another gas well was completed and shut-in. Shut-in royalty was timely paid and the lease continued in force. In September, 1959, the gas wells were connected to a pipe line and placed on production. From August, 1958, to September, 1959, there was no production from this lease.

In holding that under such facts the term royalty deed had terminated, Judge Pope, speaking for the court, said,

“Plaintiff Hospital contended below and the court held that paragraph (3) of the term royalty deed limited the term for fifteen years, plus such time as there was actual production thereafter. Actual production continued until July of 1958. The production which paragraph (3) requires is actual production. Archer County v. Webb, 161 Tex. 210, 338 S.W.2d 435; Freeman v. Magnolia Petroleum Company, 141 Tex. 274, 171 S.W.2d 339; Garcia v. King, 139 Tex. 578, 164 S.W.2d 509; Holland v. Vela De Pena, Tex.Civ.App., 343 S.W.2d 750; Sellers v. Breidenbach, Tex.Civ.App., 300 S.W.2d 178, 179. When we look to that paragraph, the term royalty deed terminated after fifteen years plus the period of actual production. The shut-in royalty was paid under the terms of the lease, for a period of thirteen months. During that time there was no actual production. As we understand Archer County v. Webb, supra, this was not a mere temporary cessation of actual production.” (Emphasis ours)

In Midwest Oil Corp. v. Winsauer and in Stuart v. Pundt, there were diligent and continuous operations in process to remedy the situation as to the very source of the interrupted production, and for such reasonable time as these activities continued in good faith, the cessation was temporary. In Investors Royalty Co. v. Childrens Hospital, etc., and in the instant case, there were no operations on the lease which would cause the cessation to be temporary.

We find that the trial court did not commit error in his application of the law as stated in appellants first two Points of Error to the facts of this case.

Appellant’s last proposition as set forth in his third Point of Error is that where the reversion fee owners execute and the royalty owners ratify a lease containing a stipulation that payment of shut-in gas royalty shall constitute commercial production from subject land, the term royalty is modified to include such shut-in gas clause. In support thereof, appellant relies on Southland Royalty Co. v. Humble Oil & Refining Co., 151 Tex. 324, 249 S.W.2d 914, and Spradley v. Finley, 157 Tex. 260, 302 S.W.2d 409.

This is the assignment that this same appellant presented in Midwest Oil Corporation, et al. v. Mengers, et al., Tex.Civ.App., 372 S.W.2d 247, writ refused. In that case, the lease was ratified by Midwest and other royalty owners. Appellant in support of his contention relied upon Southland Royalty Co. v. Humble, supra, and Spradley v. Finley, supra. The court, in holding that the shut-in gas clause of the lease was not extended to the term royalty deed by the unilateral ratification of such lease by the: royalty owners, said:

“We think that Archer County v.. Webb, supra, governs the case at bar.. We think the facts of the instant case-identical with the facts of the Archer County case, with the exception that in: the instant case the plaintiffs unilaterally executed a division order which: contained words of ratification of the-oil and gas lease. It is noted that the Mengers Sr., the reversion owners, did; not join in the division order or ratification. In our view, the unilateral act of plaintiffs in ratifying the lease, can in no way take the instant case out of the rule of Archer County v. Webb.. . * * * »

In Union Producing Co. v. Scott, et al., 173 F.Supp. 361, affirmed in 5th Cir., 267 F.2d 469, the same contention was made, that the termination date of the royalty deed was-modified by the ratification by the owners of the term mineral interests of the lease-containing a shut-in gas clause, and South-land Royalty Co. v. Humble, supra, and Spradley v. Finley, supra were cited as. authority. The court held that the ex parte ratifications by the owners of the term mineral interests did not serve to include the shut-in gas clause within the meaning of' the mineral grants, saying “The parties -. could have placed in their royalty deed a shut-in gas well provision, if they had" desired to do so, but we find no such provision in this deed.”

We feel that the contention under its-third point has been decided adversely to ■ appellant in Archer County v. Webb, 161 Tex. 210, 338 S.W.2d 435; W. H. Holland, et al. v. Vela De Pena, et vir, Tex.Civ.App., 343 S.W.2d 750, writ ref.; Investors Royalty Co., et al. v. Childrens’ Hospital Medical Center, et al., 364 S.W.2d 779, writ ref. n. r. e.; Midwest Oil Corporation, et al. v. Mengers, 372 S.W.2d 247, writ refused; and Union Producing Co. v. Scott, et al., 173 F.Supp. 361, aff’d. 5th Cir., 267 F.2d 469. We overrule this point.

The judgment is affirmed.


author: WERLEIN, Justice.

text:
    The CITY OF HOUSTON, Appellant, v. Jim C. WATSON, Jr., a Minor, et al., Appellees.
    No. 14290.
    Court of Civil Appeals of Texas. Houston.
    Feb. 13, 1964.
    Rehearing Denied March 5, 1964.

      R. H. Burks, City Atty., Herbert M. Beazley, Asst. City Atty., and Edgar Pfeil, Sr. Asst. City Atty., Houston, for appellant.
    Criss Cole, Houston, guardian ad litem for Jim C. Watson, Jr.
    Bill Allen and W. James Kronzer, Houston, and Hill, Brown, Kronzer, Abraham, Watkins & Steely, Houston, of counsel, for appellees.
   WERLEIN, Justice.

This suit was brought by Jim C. Watson, Jr., a minor, by and through his duly appointed guardian ad litem, and Jim C. Watson, Sr., father of said minor, to recover damages for severe personal injuries sustained by said minor on April 20, 1959, when the motor scooter he was riding in the 1200 block of Cheshire Street in the City of Houston struck a hole in the street, went out of control, fell to its side and caught fire. Pursuant to the verdict of the jury, which included findings that the occurrence was proximately caused by the City’s failure to make proper inspection of the location in question, judgment was rendered in favor of the minor plaintiff and his father for their respective damages.

Appellant has grouped in its brief its points 1 through 27, inclusive, 32 through 36, inclusive, 40, and 44 through 47, inclu■sive. These points are all interrelated and generally have to do with the error of the court in overruling appellant’s motion for judgment in its favor based upon the jury’s -answer to Special Issue No. 1, that the City was not negligent in failing to repair the Tiole in question prior to April 20, 1959, when the injury occurred. Appellant also ■complains that the court erred in overruling its motion to set aside the answers of the jury to Special Issues Nos. 3 and 4, • and to enter judgment for the defendant •after setting aside the same, because Spe■cial Issue No. 3 is not a controlling or ulti-mate issue and cannot be the basis of a valid judgment against the City, since there is no allegation whatever in appellees’ claim filed with the City alleging that it was at fault for failing to make an inspection of ■the street and the hole that had been repaired, and further because the jury had already, in answer to Special Issue No. 1, found that the City had repaired the hole in question prior to the date of the minor’s injury. Appellant further asserts that the •court erred in refusing to set aside said Special Issues Nos. 3 and 4 because there ■is no evidence to support the same and in■sufficient evidence, and no pleading to raise ■such issues, and also because the court •erred in overruling appellant’s motion for judgment non obstante veredicto. It is ■appellant’s contention that it had no actual •or constructive notice of any condition that would put upon the City the duty to make ■an inspection inquired about in Special Issue No. 3, and that the court erred in refusing to set aside the answer to Special Issue No. 4 because there is no causal connection between the failure to inspect inquired about in Special Issue No. 3 and the occurrence in question.

A brief summary of the evidence is necessary to a consideration of the foregoing points. The evidence shows that about dusk •on the evening of the accident, said minor, then 14 years of age, was riding the motor ■scooter in an easterly direction on Cheshire Street, traveling in a straight line along and over said street, and on the right side thereof, with his headlight burning, and at a speed variously estimated at 15 to 25 miles per hour. The scooter hit a hole in the street which was located near and in front of the premises at 1235 Cheshire Street, variously estimated to be of depth approximately 3 inches to 6 to 8 inches, and width ranging from 3 to 5 feet across the street and from 1 yi to several feet parallel thereto. Upon hitting the hole the scooter got out of control, finally fell on its right side, skidded some distance and burst into flames, with young Watson pinned underneath.

There is evidence that the hole was reported to the City approximately two months before the accident and that about one month before the accident the hole was repaired by the City. It is undisputed that Cheshire Street is paved with concrete and that the City employees in repairing the hole did not fill it with concrete but with a cold asphalt mix. Mr. Sweeton, one of the City employees, testified that he reported to his foreman, Mr. Duncan, that the hole was in a concrete street so that the foreman could notify the permanent paving division of the City and it could come out and repair the hole with concrete. He agreed that, when a temporary repair was made in a concrete street with asphalt mix, as was done, he expected the permanent paving division of the City to follow with the necessary concrete repair.

Mr. Duncan, Superintendent of Street Maintenance, Division No. 5, which included the location in question, testified in substance that he did not see the hole until more than a month following the accident; that the early temporary repair was not done in the manner in which the hole was ultimately to be repaired; that the permanent paving department was expected to follow with the necessary concrete repairs before the hole became in disrepair again; and that a hole in a concrete street repaired with an asphalt mix will not stay repaired as long as one repaired with concrete. With respect to the asphalt mix repair made about a month before the accident, he testified that a lady reported a hole, and that on the same evening three of his men made an emergency repair of the hole that was there, and that he reported the hole to the paving division on the following morning.

The evidence shows that the temporary repair of the hole with cold asphalt mix did not hold up, but that it gradually broke down, washed out and disintegrated, so that by the time of the accident the hole was again in about the same condition it was in at the time the temporary, emergency repair was made. Mr. Duncan, who had the original temporary repair made, testified that he received no notice with respect to the hole after making the temporary repair, but possibly some other person in his division could have received a complaint.

Witness Bommarito, who first reported the hole about a month before the temporary repair was made, testified unequivocally that after the temporary repair broke down, he again reported the hole to the City about a week before the accident. The temporary repairs lasted two weeks at the most, according to this witness, after which the hole became virtually in the same condition it was before. We have not undertaken to summarize all the testimony in the statement of facts which consists of nearly 1000 pages, although we have considered all of the evidence adduced at the trial.

To Special Issue No. 1, the jury found that before April 20, 1959, the City did not fail to repair the hole in such manner as the same would have been repaired by a person of ordinary prudence in the exercise of ordinary care under the same or similar circumstances. There is no evidence of any repair being made before April 20, 1959, the date of the accident, other than the temporary emergency repair hereinabove discussed. It is manifest, therefore, that the jury in answering Special Issue No. 1 found merely that the City was not negligent in making the temporary repair as was done under the circumstances existing at such time. The record is replete with evidence showing that such temporary repair broke down and that at the time of the accident the hole had virtually resumed its-former condition.

Appellees rely upon the jury’s affirmative-findings to Special Issues Nos. 3 and 4,. reading:

SPECIAL ISSUE NO. 3
“Do you find from a preponderance of the evidence that before April 20, 1959 and after undertaking to repair the location in question, the Defendant,. City of Houston, failed to make such inspection of such location as would have been made by a person of ordinary prudence in the exercise of ordinary care under the same or similar circumstances ?”
SPECIAL ISSUE NO. 4
“Do you find from a preponderance of the evidence that such failure, if you have so found, was a proximate cause of the occurrence in question?”

Appellant asserts that there can be no recovery herein because the notice of claim filed with the City Council does not allege as an act of negligence upon which appel-lees relied the failure of the City to make an inspection of the street at the location of the hole in question. Article IX, Sec. 11, of the Charter of the City of Houston, provides for a notice in writing to the City within 90 days of the injury,

“ * * * stating in such written notice when, where and how the injury or destruction occurred, and the apparent extent thereof, the amount of damage sustained, the amount for which claimant will settle, the actual residence of the claimant by street and number at the date the claim is presented, and the actual residence of such claimant for six months immediately preceding the occurrence of such injuries or destruction, and the names and addresses of the witnesses upon whom he relies to establish his claim, * * * ”

The notice given was attached to a letter dated May 14, 1959, addressee by appellees to the City and received by the City on June 3, 1959. In such notice appellees stated that unless they heard otherwise they would assume that their letter and notice met the Charter requirements. The notice given clearly showed when, where and how the injury occurred. It went further and stated that on belief of information then on hand, the cause of the accident was the negligent maintenance and repair of Cheshire Street, more specifically in the 1200 block thereof, as well as the failure of the City through its employees to keep and maintain said Cheshire Street in a reasonably safe condition for the users thereof.

It is our view that such notice substantially complies with the requirements of the City Charter and that it was sufficient. The provisions of the City Charter are not such as to require the injured party to state the acts and omissions of negligence he expects to rely upon in court with the same particularity and meticulosity that may be required in pleadings. 62 A.L.R.2d 340, at 403; City of Houston v. Holden, Tex.Civ.App. 1960, 336 S.W.2d 193, writ ref., n. r. e.; Perry v. City of San Diego, 80 Cal.App.2d 166, 181 P.2d 98. Upon re-examination of our opinion in the case of City of Houston v. Hagman, Tex.Civ.App., 347 S.W.2d 355, writ ref., n. r. e., we have concluded that while the case was correctly decided, the dictum in such case places upon the injured party a greater burden than is required of him by the Charter of the City of Houston. Furthermore, in the instant case the statements in the notice as to the cause of the injury being the negligent maintenance and repair of Cheshire Street in the 1200 block and the failure to keep and maintain the same in a reasonably safe condition for users, are quite broad. The word “maintenance” as used in the notice is in its context broad enough to include reasonable inspection prerequisite to the keeping and maintenance of the street in a usable condition. Moreover, a statement as to whether or not the City had made a reasonable inspection of a particular location would be of no aid in determining when, where and how the injury occurred. There is no inconsistency in the finding by the jury that the City was not negligent in making the only repair that was made, and the finding that the City was negligent in failing to make an inspection before the time of the injury and after the temporary repair had been made.

The instant case is also clearly distinguishable from Gardner v. City of Houston, Tex.Civ.App., 320 S.W.2d 715, cited by appellant. In that case the notice failed to state correctly where the accident occurred, and it was impossible for the City to locate the place of the injury without further information from the claimant. An examination of the other authorities cited by appellant with respect to fatal variances between the facts set out in the notice and those offered in evidence, clearly shows that such cases are factually inapplicable to the instant case. See City of Waco v. Landingham, Tex.Civ.App., 158 S.W.2d 79, writ ref., and Cawthon v. City of Houston, Tex.Com.App., 1921, 231 S.W. 701.

Appellant contends that where the causes of the injury are defects not traceable directly to acts of the City but to the failure to inspect, the City must have had notice of the defects, actual or constructive, and have had a reasonable time and opportunity to remove the same. The City by its employees in charge of making the repairs knew that the repair which had been made was merely a temporary emergency repair and that the asphalt mix placed in the hole would not hold up as concrete would. Moreover, the City was given notice a week before the accident of the hole which had occurred after the temporary repair had been made. The testimony of the City’s Superintendent, Mr. Duncan, hereinabove referred to, clearly indicates that the City had ample time and opportunity to make at least another temporary repair before the accident after being notified of the hole by Mr. Bommarito.

The next question is whether the finding of the City’s negligent failure to make an inspection, as alleged by appellees, is a finding of an ultimate fact under the circumstances of this case and the evidence adduced, which will support the judgment entered by the trial court. The jury found that such failure was a proximate cause of the occurrence in question. The testimony of some four or five witnesses shows that there was a need to repair the hole after the temporary repair disintegrated. The responsible City employees knew that only a temporary emergency asphalt repair had been made and that usually such a repair in a concrete pavement will break down sooner than a concrete repair. They reported the situation to the permanent paving division of the City in expectation that such division would follow up with a concrete repair, which was not done, however, until some time after the accident. The jury might well have concluded that under the facts established the City should have anticipated the likelihood of a breakdown in the cold asphalt mix repair and should have thereafter inspected the location to determine what had happened.

It is our view that under the evidence and facts of this case the City was under a duty to use ordinary care to make a reasonable inspection. Such an inspection would have disclosed the disintegration of the temporary asphalt repair and a dangerous situation which could have been remedied prior to the accident in question. The repair which was made lasted only some two weeks and the hole which followed the breakdown thereof was virtually the same as the hole prior to the time of such repair, and was the only hole of any appreciable size in the block.

The law is well settled that to render the City liable it must have either actual or constructive notice of the defect in the street. The testimony of Mr. Bom-marito shows that the City did have actual notice of the hole responsible for appellee’s injury. It is sufficient, however, if those charged with the supervision and superintendence of a street could, by the exercise of reasonable care and diligence, have known of the defective condition. 40 Tex. Jur.2d, pp. 328-331, §§ 639, 640. This is substantially what the jury found. The City in the instant case was under a duty to repair the hole if it was not a trivial one but was one deep enough to endanger the safety of those using the street.

This Court will deem that the trial court found in support of its judgment that a reasonable inspection by the City would have disclosed a hole deep and dangerous enough to necessitate prompt repair which the City could and would, in the exercise of ordinary care, have made prior to the accident. Hence, the failure to make such reasonable inspection was a proximate cause of the occurrence. Appellant’s objections and exceptions to Special Issues Nos. 3 and 4 did not point out specifically what they now complain of, and are insufficient to prevent presumed findings by this Court. They did not point out that Special Issue No. 3 could not form the basis of any judgment without being coupled with other issues not included in the court’s charge, nor did they point out what elements had been omitted from Special Issue No. 3 or what other issues were necessary to establish appellant’s liability. Texas Employers’ Insurance Ass’n v. Hudgins, Tex.Civ.App., 294 S.W.2d 446, writ ref., n. r. e.; Cree v. Miller, Tex.Civ.App., 255 S.W.2d 565, 572, writ ref., n. r. e.; Dee v. Parish, 1959, 160 Tex. 171, 327 S.W.2d 449; Anderson v. Broome, Tex.Cix.App., 233 S.W.2d 901.

Appellant contends that it was entitled to an instructed verdict and judgment non obstante veredicto because the minor, Jim Watson, and his father were both guilty of contributory negligence as a matter of law. We do not agree. The testimony of the minor plaintiff as well as of the two eye-witnesses to the accident, regarding the manner in which the scooter was being operated, constitutes evidence of probative force that the minor was in the exercise of ordinary care. Appellant’s witness, Police Officer Fisher, testified in effect that he found no evidence of any improper driving. The evidence also shows that the minor had had considerable experience and ability in operating the scooter. There is no merit in appellant’s contention that the trial court should have entered judgment for it as a matter of law on the asserted ground that the father’s entrustment of the scooter to his son was the sole proximate cause of the accident. Appellant’s witness Fisher admitted that a 14 year old boy could become experienced enough to handle a scooter of the type young Watson was operating at the time of the accident.

We find no merit in the contention that the hole was open and obvious and that hence young Watson assumed the risk. Watson explained that he saw the hole only “a fraction of a second” before he hit it because it blended with the pavement. Another witness testified the hole was not readily noticeable until one got right at it. Appellant’s witness Fisher conceded that the hole was not something that would be expected, and would not be apparent until one got fairly close to it.

Appellant complains of the refusal of the trial court to give some 20 requested special issues. In our opinion these requested issues were properly refused by the court. In the case of most of such issues there is no supporting competent evidence. Additionally, a number of such issues are not in substantially correct form. It would unduly prolong this opinion for us to take up each issue and discuss them all seriatim. A number of the issues inquire as to alleged defects in the scooter. The only testimony referred to by appellant is that of William H. Tonn, who testified merely to speculative possibilities. He did not see the scooter until nearly two years after the accident, nor until after it had been exposed to weather conditions and to handling by children who played with it, over a considerable period of time. At no time-did Mr. Tonn testify that the scooter was-defective in the various particulars he mentioned, at the time of or immediately before-the accident of April 20, 1959. Indeed, he-was not in a position to so testify. The-testimony of the Watsons clearly shows that after the secondhand scooter had been' purchased by Mr. Watson, Sr., numerous-repairs were made on it and that it was in¡ good operating condition at the time of the-accident in question.

A number of such issues were not substantially correct. They did not comply with the requirements of Rule 279,. Texas Rules of Civil Procedure. For example, in the series of issues relating to the-condition of the fuel line on the scooter, the-inquiry was made whether the alleged defect “was known to or should have been known”' to the minor plaintiff and his father. The-language “should have been known” is incomplete by virtue of the failure to include-the standard of ordinary care. The issue-was multifarious including both- actual knowledge and erroneous constructive knowledge inquiries. Furthermore, requested issue No. 5 is multifarious and' duplicitous by reason of one issue inquiring-as to negligence without designating whose-negligence was being inquired about, so that the issue might apply to either Mr. Watson- or the minor, or both. Similar incorrectness is found in all of the refused issues-Numbered 8 to 17, inclusive.

The requested issue relative to the alleged “open and obvious” character of the hole includes multiple issues in a single question, and it is legally incorrect ini applying the test or standard of constructive rather than actual knowledge in connection with such theory. Halepeska v. Callihan Interests, Inc., Tex.Sup.1963, 371 S.W.2d 368.

Defendant’s requested Instruction No. 2 is a comment by the court to the effect that Mr. Watson, Sr., did not exercise-ordinary prudence in his affording his son proper medical treatment. It is also incorrect in that it refers to Special Issue No. 20, which inquires as to the reasonable amount for medical and hospital services beyond the date of trial. The law is well settled that parental negligence is not imputable to a minor’s cause of action. Thacker v. J. C. Penney Company, 254 F.2d 672, 5th Cir.1958, and authorities cited.

The next group of points complain of the error of the court in permitting Anthony Bommarito to testify, since he was not listed as a witness in appellee’s claim filed with the City. Mr. Bommarito was not a witness to the accident in question. His testimony was largely confined to the notices given .by him to the City of the hole in the street. We have carefully examined the statement of facts and fail to find any evidence of probative force that appellees knew that Mr. Bommarito was to be a witness in the case at the time their claim was filed with the City. Appellant does not contend that the record conclusively establishes that witness Bommarito was known to be a witness before the claim was filed or within the 90 day notice period. Mr. Bommarito testified that he estimated that he was first contacted by appellees’ attorney about three months after the accident and that it could have been longer. He had never met Mr. and Mrs. Watson and did not know them. The attorney for appellees testified it was at least four months following the accident before he first learned of and contacted Mr. Bommarito. In City of Houston v. Cambeilh, Tex.Civ.App., 333 S.W.2d 192, writ ref., n. r. e., this Court said: “In any event, the trial court will be presumed to have found the Cambeilhs didn’t know of such witnesses because the evidence supports such a conclusion. If they didn’t know of the witnesses, they couldn’t list them.”

Moreover, appellant waived any complaint as to the admissibility of Mr. Bommarito’s testimony for the reason that no objection or motion of any kind was presented until after the witness had testified and was excused. In the notice given to the City, appellees stated the names and addresses of the known eye-witnesses, and expressly put the City on notice that such witnesses as later became known would also be relied upon. Furthermore, appellant is not in a position to complain with respect to the testimony given by Mr. Bommarito as to the notices he gave the City for the reason appellant’s counsel stipulated that so far as the notice was concerned, it would be agreeable if there was any fact question to let the trial judge handle it. When the matter was presented to the court near the end of the testimony, the court stated:

“I thought that was the stipulation made, but whether you made it or not, I will overrule you. * * *
“* * * If it becomes necessary for a finding of fact, I will consider that it was the thing covered by your stipulation.”

Appellant’s Points 50 through 54 and 57 through 62, inclusive, complain of the error of the court in granting appellees’ motion in limine and ordering appellant’s counsel to refrain from reading or referring to certain allegations in its pleadings and from asking questions relative to the same, without first obtaining a ruling of the court outside the presence and hearing of the jury with regard to any theory of admissibility of such matters.

Appellees’ motion in limine was directed mainly to the facts that the minor did not have a proper license to operate the motor scooter and that it had not been inspected pursuant to the alleged requirements of Secs. 140-142 of Art. 6701d, Vernon’s Ann. Revised Civil Statutes of Texas. Neither the pleadings nor evidentiary claims made by appellant are material with respect to the minor’s cause of action since the failure to have a license was not a proximate cause of the accident in question. Langdeau v. Pittman, Tex.Civ.App., 337 S.W.2d 343, 360, writ ref., n. r. e.; Hanson v. Green, Tex.Civ.App., 1960, 339 S.W.2d 381, 383, writ ref. The same rule would apply to inspection certificates, assuming that a certificate is required for a motor scooter.

Appellant complains of the rulings of the court excluding reference to the minor’s adjudication as a juvenile delinquent and to several prior instances of alleged misconduct, since they would relate to his competency to operate the motor scooter, the negligence of the father in entrusting the same to him, the hoy’s credibility, and damages. Such testimony as to the credibility and delinquency of the minor was inadmissible as a matter of law. Article 2338-1, Sec. 13, Vernon’s Annotated Texas Statutes. With respect to damages, such testimony would be without probative force in the absence of evidence that such conduct manifested a physical or mental condition relating to items of damage sought. McCarty v. Gappelberg, Tex.Civ.App., 273 S.W.2d 943, writ ref., n. r. e. With respect to negligent entrustment by the father, it will suffice to say that the minor’s failure to have a license and his prior misconduct would be immaterial as concerns the father’s cause of action in view of his stipulation that any negligence on the minor’s part would be imputed to him, and the well established law that in order to show proximate causation of an accident resulting from negligent entrustment, it is necessary to show negligence on the part of the driver of the vehicle which proximately caused such accident. Mundy v. PirieSlaughter Motor Co., 1948, 146 Tex. 314, 206 S.W.2d 587; Ferris v. Stableford, Tex.Civ.App., 248 S.W.2d 186; Luvual v. Henke & Pillot, Division of Kroger Co., Tex.Civ.App., 1963, 366 S.W.2d 831, writ ref., n. r. e.

It was not reversible error for the court to enter the in limine order after announcement of ready by the parties, since an in limine motion is a proper way of reaching objectionable matters that might get before the jury through the reading of the pleadings or interrogation of witnesses. Texas Employers’ Ins. Ass’n v. Poe, 1953, 152 Tex. 18, 253 S.W.2d 645; Rial v. Curtis, Tex.Civ.App., 274 S.W.2d 117, writ ref., n. r. e. Moreover, the order of the trial court did not prevent appellant from offering such proof but merely required that he first approach the bench and obtain a ruling with respect to its admissibility and relevancy. Any error on the part of the court in entering its order in limine cannot be shown to have been harmful since appellant failed to establish the factual relevancy of any of the objectionable matters during the trial.

The court properly granted a summary judgment against the City on its cross-action for contribution and indemnity against Watson, Sr. since the father under the laws of this State is not liable to his un-emancipated child in the absence of an intentional or wilful wrong. Aboussie v. Aboussie, Tex.Civ.App., 270 S.W.2d 636 (1954), writ ref. The rule is well established that neither contribution nor indemnity can be recovered from a party against whom the injured party has no cause of action. West Texas Utilities Co. v. Renner, Tex.Com.App., 1932, 53 S.W.2d 451; Patterson v. Tomlinson, Tex.Civ.App.1938, 118 S.W.2d 645, writ ref.; American Cooperage Co. v. Clemons, Tex.Civ.App.1963, 364 S.W.2d 705, writ ref., n. r. e.; Robinson v. Ashner, Tex.Civ.App., 357 S.W.2d 611, aff’d Tex., 364 S.W.2d 223 (1963); City of Houston v. Selph, Tex.Civ.App., 356 S.W.2d 850.

The court did not err in allowing a reasonable fee for the services of the guardian ad litem appointed by the court, and taxing same as a part of the court costs. The amount allowed the guardian ad litem lies largely within the discretion of the trial court and will not be set aside unless the evidence shows a clear abuse of discretion. Japhet v. Pullen, Tex.Civ.App., 153 S.W. 1188; 30 Tex.Jur.2d p. 727, § 73. We cannot say the court abused its discretion in view of the services rendered by the guardian ad litem and the amount involved in the case. A municipality is liable for court costs. Garrett v. City of Wichita Falls, Tex.Civ.App., 334 S.W.2d 624. The fee allowed the guardian ad litem was properly chargeable as a part of the court costs. Rule 173, T.R.C.P.

Basing our opinion upon all of the evidence, we have concluded that the findings of the jury are supported by sufficient evidence and that none of such findings is so against the great weight and preponderance of the evidence as to be unjust. In re King’s Estate, 1952, 150 Tex. 662, 244 S.W.2d 660. All of appellant’s points are overruled.

Judgment affirmed.


author: MOORE, Justice.

text:
    W. B. STOWERS, Appellant, v. Robert L. HARPER, Appellee.
    No. 5.
    Court of Civil Appeals of Texas. Tyler.
    Feb. 13, 1964.
    Rehearing Denied March 12, 1964.

      O.O. Touchstone and John B. Webster, Dallas, for appellant.
    James L. Mitchell, Braecklein, Mitchell, Thorpe & Lewis, Dallas, William J. McKie, Corsicana, for appellee.
   MOORE, Justice.

This is a suit by Robert L. Harper, plaintiff, against his former employer, W. B. Stowers, defendant, in which plaintiff seeks to recover additional compensation, which he alleges to be due him for the years 1956 through 1960, under the terms of a written contract of employment. The parties will be referred to as they appeared in the Trial Court. On January 15, 1956, plaintiff and defendant entered into a written contract, by the terms of which plaintiff was to act as a salesman for the defendant who was a manufacturer’s representative. Plaintiff was to furnish his own automobile upon which he was required to carry public liability insurance; either party had a right to terminate the contract on thirty days’ notice. The contract further provided that all prior negotiations were merged therein, and that' any change, correction, amendment or supplemental agreement was to be in writing and signed by both parties before it would be binding.

The disagreement by the parties arose over the manner and method of computing the payments due under paragraphs 3 and 4 of the contract and forms the basis of this suit. Paragraphs 3 and 4 read in part as follows:

“3. * * * and for each and every full calendar year during the continued performance thereof the salesman is, as compensation only and not as a right to share in the profits or losses, entitled to an amount equivalent to twenty-five per cent (25%) of the gross profits, if any, of the business of Stowers, which gross profits have been earned as a result of the conduct of such business being carried on as a manufacturers’ agent during the specific calendar year; such figure of 25% of the gross profits is to be computed and arrived at by deducting from the gross receipts all business expenses of any kind and character, including the hereinafter provided for traveling expenses and drawing account of the Salesman, but not including the personal expenses and traveling expenses of Stowers. From such sum of 25% of the gross profits thus arrived at, there shall be deducted from the sum due the Salesman any withholding taxes due, as well as any advances or expenses which have been advanced to the Salesman or for his benefit for trips to marketing conventions and any other advancements which might have been made for personal expenses of the Salesman disconnected with the business. * * * Such compensation is to be arrived at and computed in accordance with the books and records of Stowers and it is to be final and indisputable on the part of the Salesman when furnished in accordance with the books and records of Stowers. * * *
“4. During the continuance of performance hereunder, the Salesman is entitled to a drawing account of the equivalent of Four Hundred Fifty Dollars ($450.00) per month, such sum thus advanced to be advanced at the regular time each month when Stowers makes such advancement; he is further entitled to an allowance of seven cents (7‡) per mile for the number of miles actually traveled by the Salesman in the performance of his duties under this contract, such allowance to be the only allowance or payment made for the use of the Salesman’s automobile in the solicitation of orders or business. The Salesman is likewise entitled to reimbursement of the actual expenses of all meals and hotel bills which are necessarily expended by him while traveling in the prescribed territory in the performance of his duties under this contract. * * *”

There was no dispute between the parties as to the amount of gross receipts of the business or the amount of the expenses, drawing account, travel expense, hotel bills or meals for each of the years in question.

As far as the testimony is concerned, there was little dispute except in two instances. First, defendant says that when he made the first payment to plaintiff for the year 1956, plaintiff made a complaint about the amount of the payment, and upon being advised to read the contract, plaintiff returned the following day and said “we settled according to the contract”. Secondly, defendant testified that he furnished plaintiff an accounting of the business each year showing the computation of his earnings or, if not furnished him personally, same was placed in his mail box in the office. He further testified that the company books and accounts were available and open to him at all times. Plaintiff denied that he had ever received any such accounting in any of the years of his employment, or that the company books and accounts were ever made available to him.

Plaintiff further testified that he was dissatisfied with the amount of compensation paid him in settlement of the account each year but that he remained silent and did not make any complaint because he wanted to continue to work and “Because you just don’t complain to Mr. Stowers,” and “when you are over the barrel, you keep your mouth shut”.

Approximately seven months after the termination of the contract by mutual consent in May, 1960, plaintiff brought this suit. In his pleading plaintiff alleges that defendant was at all times in possession of the books of account and that he had no way of knowing what he was entitled to until this suit was filed. He sues for an accounting contending that the method of computation used by defendant in determining his compensation under the contract for the year 1956, and all years subsequent, was incorrect and that he was entitled to substantially more than he had been paid.

The defendant entered a general denial and also plead that there had been a modification of the terms of the contract by the parties; that plaintiff had waived the provisions of the contract and was estopped, and in the alternative that the contract was ambiguous and required interpretation.

The case was tried in the court without a jury and judgment was rendered in favor of plaintiff for additional compensation for each of the years 1957 through 1960, totaling the sum of $29,869.41, from which defendant perfected this appeal. The Trial Court made findings of fact and conclusions of law, which can be summarized as follows.

Under findings of fact, the court found that the contract was prepared by defendant’s attorney; that plaintiff was in the employment under the contract from February 1, 1956 to May 20, 1961, at which time the contract was terminated by mutual consent; that he drew $450.00 for each and every month and was reimbursed for travel; that the contract was not in any way changed, corrected, modified, amended or supplemented by the parties during its existence; that defendant never furnished any accounting to plaintiff during this time showing gross profits of the business; that the gross profits, as defined by the employment contract, for each of the years in question were as follows: 1957-$37,295.64; 1958 — $33,081.28; 1959 — $35,835.20; 1960 —$29,785.64.

Under conclusions of law, the court found the contract was not ambiguous; that plaintiff was to receive 25% of gross profits of the business each year, which gross profit was to be computed by deducting from gross receipts of the business all business expense, including the travel expense and drawing account of plaintiff; that the $450.00 drawing account and travel expense, mentioned under paragraph 4 of the contract, should not be charged against or deducted from the gross profit of 25% after same has been computed under paragraph 3; that acceptance by plaintiff of a lesser amount each year than was due under the contract did not amount to a waiver of plaintiff’s right to receive all that was due under the contract; that the evidence failed to establish that plaintiff had full knowledge that additional sums were due him under the contract, or that there was any intent on his part to waive his right to receive additional sums; that the evidence failed to establish waiver; that plaintiff was not estopped to claim the balance due under the contract; that no act or acts of plaintiff in any way misled defendant to his detriment; that the compensation due for 1956 is barred by the statute of limitations; that plaintiff should have judgment for $29,869.41, to all of which defendant excepted. Defendant also filed a request for additional findings of fact and conclusions of law, which were refused by the court.

Defendant testified that he computed the compensation due the plaintiff for the year 1957 in accordance with the following illustration, which was the same method he used in each subsequent year, to-wit:

Gross Commissions $54,522.95
Less Business Expense (only) 6,615.06
GROSS PROFIT $47,907.89
Gross amount due plaintiff in 1957
(25% of the $47,907.89) $11,984.47
Less Drawing Account & Exp. 10,612.23
BALANCE DUE PLAINTIFF FOR 1957 $ 1,372.24

On the other hand, plaintiff contends that for the year 1957 and subsequent years, the following method should have been used, to-wit:

Gross Commissions $54,522.95
Less: Business Expenses $ 6,615.06
Drawing Account & Exp. 10,612,23
$17,227.29 17,227.29
GROSS PROFIT $37,295.64
Amount due plaintiff in 1957
(25% of the $37,295.64) $ 9,323.91

There is a considerable difference in the two methods.

■ As will be shown by the above illustration, the defendant contends that the term “gross profits” has a definite accepted meaning as used in the business world, and that it means it is a sum arrived at by deducting business expenses such as office expense, rent, stationery, telephone, etc., excluding drawing account and travel expenses, from gross receipts. He then contends that plaintiff is entitled to 25% of that figure, less what had been advanced to him by way of drawing account and travel expenses.

Plaintiff, on the other hand, contends that the contract defines "gross profit” and contains a formula for arriving at “gross profit” in that the contract provides that in arriving at the “gross profit” “all business expenses of any kind and character, including the hereinafter provided for travel expenses and drawing account of the salesman” shall be deducted from the gross receipts, which result will be the “gross profit”. (Emphasis supplied). Under plaintiff’s interpretation, he should be entitled to 25% of the “gross profit” thus computed and, under the contract, the only amount which could be deducted was (1) any withholding taxes due; (2) any advances or expenses which had been advanced to him or for his benefit for trips to marketing conventions; or (3) any other advances made to him for personal expenses disconnected with the business.

Under defendant’s points one through six, he contends that as a matter of law conduct of the parties amounts to a modification of the contract; that the plaintiff has waived his right to further compensation, and by his conduct he led defendant to believe he would not claim additional compensation and in reliance thereon he refrained from termination of plaintiff’s employment, and that he should therefore be estopped to claim further compensation. He contends that the judgment for the plaintiff is so overwhelmingly against the weight and preponderance of the evidence that same is clearly wrong and unjust.

We will first consider the question of modification of the contract. A written contract, not required to be in writing, may be modified by a parol agreement, and thereafter the contract becomes a parol agreement in its entirety. Purdin v. Jenkins, Tex.Civ.App., 337 S.W.2d 418; Maddox Motor Co. v. Ford Motor Co., Tex.Com.App., 23 S.W.2d 333. There was no evidence of an express agreement to modify the contract, but defendant contends that by accepting the amount paid him each year without complaint, plaintiff impliedly agreed to a modification, thereby agreeing to accept defendant’s method of arriving at the gross profit of the business. The determination of the existence of a modification of a contract will depend upon the intention of the parties, and therefore becomes a question of fact. San Antonio Machine & Supply Co. v. Allen, Tex.Civ.App., 268 S.W. 532. The burden of proof was on the defendant. He must prove that his proposed modification was made known to the plaintiff and that the plaintiff accepted the terms of his proposed modification. The old contract prevails until terminated by both parties, and in order to prove a new contract so that gross profits would be calculated in a different manner from that provided by the written contract, it was necessary to show that notice thereof was given directly or indirectly, and that plaintiff accepted. Actual notice is required and constructive notice is not sufficient. Plaintiff had a right to rely upon the terms of the written contract and was not bound to exercise diligence to learn of the method used by defendant in computing the amount due him. Pennington v. Thompson Bros. Lumber Co., 122 S.W. 923.

The finding by the Trial Court that there was no modification is supported by the evidence, in that the plaintiff testified that he did not know the method used by defendant in computing his compensation and did not have access to the company books and accounts. Plaintiff cannot be held to have accepted a method different to the terms of a contract of which he had no knowledge. J. R. Gray Co. v. Jacobs, Tex.Civ.App., 362 S.W.2d 167, 172; San Antonio Machine & Supply Co. v. Allen, supra.

What we have heretofore said in regard to modification, would apply to some extent to the defenses of waiver and estop-pel.

“A waiver exists only where one with full knowledge of a material fact does or forbears to do something inconsistent with the existence of the right or of his intention to rely upon that right. Knowledge of the existence of the right on the part of the party claimed to have made the waiver is an essential prerequisite to its relinquishment. No one can be said to have waived that which he does not know, or where he has acted under a misapprehension of the facts.” Bering Mfg. Co. v. W. T. Carter & Bro., Tex.Civ.App., 255 S.W. 243, 252; Ferguson v. Mounts, Tex.Civ.App., 281 S.W. 616; 13 Tex.Jur.2d para. 330.

Intention is a prime factor in determining- the question of waiver. The acts, words or conduct relied upon to establish intention must be such as to manifest an unequivocal intention to no longer assert the right. Waiver by implication will be applied only to prevent fraud or inequitable consequences. Tony v. McClelland, Tex.Civ.App., 283 S.W. 679, 681; Jordan Drilling Co. v. Starr, Tex.Civ.App., 232 S.W.2d 149, 159.

As has already been pointed out, the plaintiff testified that he did not have knowledge of the method used by his employer in computing his share of the profits, nor did he have access to the books so as to audit the figures. The Trial Court chose to believe this testimony, as he had a right to do, and we believe it is sufficient to sustain the Trial Court’s finding that the plaintiff did not waive his right to further compensation.

On the issue of estoppel, defendant contends that since the plaintiff accepted the amount paid him each year without complaint and without demanding an accounting, plaintiff thereby led him to believe that the method he was using in computing his share of the profits was satisfactory and that he, plaintiff, would not insist on additional compensation even though he should be entitled to more under the terms of the contract. He insists that because of this conduct, he was deprived of the opportunity to discharge plaintiff at an earlier date, causing him to suffer detriment and that the plaintiff should now be estopped from claiming additional compensation.

Although defendant did testify that he would have discharged plaintiff in 1956, had he known that the plaintiff was claiming additional compensation, the record shows that the plaintiff performed his service in a satisfactory manner and that there was a substantial profit in the defendant’s business during each of the years he was employed. The Trial Court found that the plaintiff was not estopped to claim the balance due under their agreement, “because the act or acts of plaintiff relied on by defendant to establish estoppel did not mislead the defendant to his detriment nor cause him to waive any right that he had.” In other words, the Trial Court concluded that the defendant was not in fact misled and that the failure on the part of the defendant to pay the plaintiff what he should have been paid did not amount to a detriment to the defendant.

“The rule is fundamental that, unless the representation of the party to be estopped has been acted upon by the other party in a way different from the way he otherwise would have acted, and to his prejudice, no estoppel arises. [Waxahachie Nat.] Bank v. Beilharz, 94 Tex. 493, 62 S.W. 743.” Clem Const. Co. v. Parker, Tex.Civ.App., 272 S.W. 228, 230. Also see Fruth v. Gaston, Tex.Civ.App., 187 S.W.2d 581; Culkin v. Neiman-Marcus Co., Tex.Civ.App., 354 S.W.2d 397; Albert-Ross Ref. & Fixture Co. v. Pastore, 107 Colo. 286, 111 P.2d 231.

In view of the protest by the plaintiff of the amount due and the manner of calculation used by defendant when he received his first year’s compensation at the end of 1956, and in view of defendant’s assurance to him that he had correctly paid him according to the contract, as well as the other evidence on the issue, we believe the finding made by the Trial Court is supported by the evidence.

Under points seven, eight, nine, and ten, defendant takes the position that the contract is ambiguous and that we should adopt the construction placed on the contract by the parties themselves. The question of whether a written contract is ambiguous or not is one of construction and interpretation. Ambiguity may be said to appear when, after the application of pertinent rules of interpretation to the face of the instrument, a genuine uncertainty results as to which one of the two meanings is the proper one. If the plain language is not susceptible to more than one meaning, there is nothing to construe. General American Indemnity Company v. Pepper, 161 Tex. 263, 339 S.W.2d 660; 17A C.J.S. Contracts § 294.

Defendant contends that the language used in paragraph 4 of the contract clearly shows that the $450.00 per month paid to the plaintiff was an advancement made against future profits, while paragraph 3 treats the $450.00 per month as a salary, thus creating an ambiguity. He contends that the terms “advanced” and “advancement” as used in connection with the term “drawing account” in paragraph 4 has a well defined meaning in the business world and should be construed to mean that the employer is thereby furnishing the employee with a means of maintenance while commissions or profits are accruing and are to be deducted from such commissions or profits after they have accrued.

As we view this contract, it has but one meaning. It simply states that the plaintiff is to receive 25% of the profits calculated according to the formula as set forth in paragraph 3. The formula there set out is clear and leaves no room for construction. It clearly provides what the “advancement” of $450.00 per month, as provided for in paragraph 4, is to be charged against. It provides in paragraph 3 that such “advancements” made into the drawing account are to be deducted and charged against the gross receipts of the business. Nowhere do we find that the “advancement” to the drawing account is to be deducted from the plaintiff’s share of the profits. To construe the contract as meaning that the amount “advanced” on drawing account must be deducted from plaintiff’s share of the profits, when the contract provides that they are to be deducted from the gross receipts of the business, would be to revise the agreement while professing to construe it, which we are not at liberty to do. General American Indemnity Company v. Pepper, supra.

Furthermore, paragraph 3 specifically enumerates the items which are to be deducted from plaintiff’s share of the profits. It provides that (1) withholding taxes, (2) advances or expenses which may have been advanced to the salesman or for his benefit for trips to marketing conventions, (3) or any other advancement for personal expenses will be deducted from his share of the profits. The “advancement” referred to here does not, in our opinion, refer to the advancement made to him on his drawing account. It is significant to note that while the term “drawing account” is frequently used in both paragraphs 3 and 4, yet the term was not mentioned in enumerating the items that were to be deducted from plaintiff’s share of the profits. If the parties had intended that the drawing account was one of the items which was to be deducted from the plaintiff’s share of the profits, it would have been simple to so have provided. We fail to find any ambiguity.

As was shown by the evidence, this contract was drawn by the defendant and therefore if there should be any doubt in regard to the construction of same, such doubt must be resolved most strongly against the defendant and in favor of the plaintiff. Stated in another way, even though the contract reasonably admits of two constructions, that one is to be adopted which is least favorable to the party whose language it is. Amory Manuf’g Co. v. Gulf, C. & S. F. Ry. Co., 89 Tex. 419, 37 S.W. 856; Smith v. McMillan, Tex.Civ.App., 352 S.W.2d 871, aff’d in part, Sup., 363 S.W.2d 437.

Having concluded that the contract is not ambiguous, we fail to see any error in the Trial Court’s refusal to admit in evidence a letter written by the defendant to the plaintiff a few days before the execution of the written contract. The letter merely explained the interpretation which the defendant placed upon paragraphs 3 and 4 of the contract, and would in no event be admissible unless there was some ambiguity.

The construction placed upon the contract by the Trial Court was correct.

Defendant’s points attacking the judgment of the court as being against the overwhelming weight and preponderance of the evidence have been considered in accordance with the rule announced in In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, and same are hereby overruled for the want of merit.

The judgment of the Trial Court is affirmed.


text:
    O. H. LANIER, INC., et al., Appellants, v. BEXAR COUNTY NATIONAL BANK OF SAN ANTONIO, Appellee.
    No. 14229.
    Court of’ Civil Appeals of Texas. San Antonio.
    Feb. 19, 1964.
    Robert L. Strickland, San Antonio, for appellants.
    Moursund, Ball & Bergstrom, San Antonio, for appellee.
   MURRAY, Chief Justice.

This suit was instituted by Bexar County National Bank of San Antonio against O. H. Lanier, Inc., and O. H. Lanier, seeking to recover the balance of $16,290.27 alleged to be due upon a certain promissory note in the principal sum of $28,125.00, after crediting the note with the sum of $13,000.-00 alleged to be the amount for which the equipment placed as security had been sold at a trustee’s sale.

The cause was submitted to a jury on four special issues, in reply to which the jury found:

(1)That the sale was made in good faith.
(2) That the reasonable cash market value of the equipment was $28,500.00.
(3) That appellee did not sell the equipment for the best available price, and
(4) That the best available price was $21,375.00.

Based upon this verdict the trial court entered judgment in the Bank’s favor against the defendants in the principal sum of $16,225.00, from which judgment O. H. Lanier, Inc., and O. H. Lanier have prosecuted this appeal.

Appellants present eight points of error reading as follows:

“1. The Trial Court erred in defining or attempting to define, the term ‘good faith’ in connection with Question Number 1 of the Court’s Charge, for the reason that such term is one of common sense and good judgment and has a well established meaning to the ordinary prudent person.
“2. The Trial Court erred in defining, or attempting to define, the term ‘good faith’ in connection with Question Number 1 of the Court’s Charge, for the reason that such term is one of common sense and good judgment and has a well established meaning to the ordinary prudent person; that the Court’s attempt to give a legal definition to a term having a well established meaning to the ordinary prudent person only served to mislead and confuse the Jury.
“3. The Trial Court erred in submitting to the Jury, in connection with Question Number 1 of the Court’s Charge, any definition of the term ‘good faith’.
“4. The Trial Court erred in submitting the following definition in connection with Question Number 1 of the Court’s Charge:
“ ‘By the term “good faith” is meant with sincerity or honesty.’
for the following reasons:
“(1) It places a greater burden of proof upon defendant than required by law in that before the Jury could find that the sale was not made in good faith they would have to find that the Plaintiff bank acted with ‘insincerity’ or ‘dishonesty’ ; that there were no pleadings that the Bank acted with ‘dishonesty’ and therefore said definition also required a Jury finding of a fact not pled by Defendant before it could find that the sale was not a good faith sale.
“(2) It is submitted in the disjunctive.
“(3) It is capable of having two different meanings.
“(4) It is vague, indefinite, ambiguous, multifarious and duplicitous.
“5. The Trial Court erred in failing to submit the following definition of the term ‘good faith’ in connection with question Number 1 of the Court’s Charge, as requested by Appellant:
“ ‘By the term “good faith”, is meant an honest intention to abstain from taking any unconscious advantage of another, even through the forms or technicalities of law, together with an absence of all endeavor or belief of facts which would render the transaction unconscionable.’
“6. The Trial Court erred in submitting to the Jury Questions 3 and 4 as they were wholly unnecessary and surplusage; this for the reason that said Questions No. 3 and 4 could not have been a basis of any judgment to be rendered under any circumstances in this case and that to submit such issues to the Jury only served to mislead and confuse them and that such confusion on the part of the Jury affected their answer to Question Number 1 to these Defendants’ detriment.
“7. The Trial Court erred in rendering judgment for Plaintiff based on the amount the Bank itself bid in the collateral security rather than on the amount the Bank actually sold the equipment for thereafter, as this allowed the Bank a Judgment for a profit on the foreclosure.
“8. The Trial Court erred in failing to render Judgment for Plaintiff based on the Jury finding as to the reasonable market value of the collateral security or at least the Jury finding as to the best available price that could have been obtained on November IS, 1960.” .

Appellants have not filed a statement of facts herein, but rely entirely upon the transcript as their record. In the absence of a statement of facts, we are unable to determine whether appellants were prejudiced by the matters complained of as reversible error.

In the early case of McMullen v. Kelso, 4 Tex. 235, the Court said:

“There being no facts sent up with the record, it will be unnecessary to examine further the above instruction or the one which was asked by the defendant and refused. They stand upon the record as abstract propositions; and whether the giving the one or refusal of the other operated injuriously to the defendant cannot be ascertained from the record, and can form no ground for revision or reversal of the judgment.”

In Williams v. Texas & N. O. Ry. Co., Tex.Civ.App., 100 S.W.2d 1077, the Court said:

As a general rule, assignments of error complaining of the giving or refusing of instructions or of the action of the court in submitting or failing to submit special issues cannot be considered in the absence of a statement of facts. The reason which has been given for the rule is that, in the absence of evidence, the appellate court cannot say that under the facts the action of the court with reference to them was prejudicial, even though it was erroneous.”

It is well settled that this Court cannot determine whether the giving or the refusing of a charge or an issue is reversible error in the absence of a statement of facts.

Before we can reverse a judgment of a trial court we must be of “the opinion that the error complained of amounted to such a denial of the rights of the appellant as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case, or was such as probably prevented the appellant from making a proper presentation of the case to the appellate court; * * Rule 434, Texas Rules Civil Procedure. In the absence of a statement of facts we are unable to determine whether the error complained of by appellants was of such a nature. 3 Tex.Jur.2d, p. 707, § 458.

Furthermore, appellee moved for an instructed verdict which was overruled by the trial court, and again, in the absence of a statement of facts, we are unable to determine whether appellee was entitled to judgment on this motion.

The judgment of the trial court is affirmed.

BARROW, J., not participating.