author: BATEMAN, Justice.

text:
    Gerald NATHAN et al., Appellants, v. William H. HUDSON, Appellee.
    No. 16311.
    Court of Civil Appeals of Texas. Dallas.
    Feb. 21, 1964.
    Rehearing Denied March 20, 1964.

      Kilgore & Kilgore, William C. Garrett and Charles F. Hawkins, Dallas, for appellants.
    Johnson, Bromberg, Leeds & Riggs and Otis B. Gary, Dallas, for appellee.
   BATEMAN, Justice.

The appellants Gerald Nathan et al., beneficiaries under the last will of Max Cohen, sued the appellee William H. Hudson to recover substantial profits realized from the resale of certain corporate stock which he had purchased from Cohen’s estate. Appellants alleged that the executors and trustees under Cohen’s will breached their trust in selling the stock to appellee in that one of them, John A. McGuire, in the same transaction contracted to sell to appellee a large amount of his stock in the same corporation on a more favorable basis than that obtained for the estate. It was also alleged that appellee knew of this breach of trust and participated in it. At the conclusion of a non-jury trial judgment was rendered that appellants taken nothing. We affirm.

By three points of error on'appeal the appellants assert that the court erred in rendering judgment for appellee (1) upon the legal conclusion that appellee was a bona fide purchaser of the stock, (2) upon the legal conclusion that only the exechtors and trustees'under Cohen’s will could be held liable for the breach of trust, although appellee knowingly participated in it • and profited thereby, and (3) because the breach of trust,'appellee’s participation therein and profits therefrom are-all shown by stipula-' tions, written agreements and other undis-' puted facts. These three points 'are- so closely related that they will be considered together, as they were in the briefs of the parties.

Certain facts appear to be undisputed: Max J. Cohen died April 10, 1957 leaving a will in which John A. -McGuire, Joseph P. Donohue and Felix Atwood were named-independent executors and trustees. A principal asset of his estate was a large block of common stock in Three. States Natural Gas Company. John A. McGuire became president of that company in 1951 and served as such until May 13, I960, at which time his salary was $50,000 per year. He also served as a director of the company from 1951 until October 12, 1960. Cohen had been one of the original -promoters of the company and had served it as a vice-president, general counsel and director.

Cohen had signed a promissory note in the principal sum of $1,236,340.45 payable to Byrd-Frost, Inc., the last installment of which, in the sum of $1,156,140.45 with accrued interest, was due on June 30, 1960. 1,136,590 shares of the common stock of Three States Natural Gas Company were pledged to secure the note, and the note provided that the maker would not be liable in any amount in excess of the value of the security thus pledged. Of the shares so pledged, half were Owned by Cohen and half by McGuire. Although the note was signed only by Cohen, McGuire acknowl-. edged, in his testimony that he owed half of the debt.

! There were 6,500,000 shares of Three States common stock outstanding, of which the Cohen estate owned 624,415 shares and McGuire owned (with other members of his family) 683,544 shares. Both the estate and McGuire were in financial difficulty,, principally because of their need to pay or refinance the balance which would soon be due on the note held by Byrd-Frost, Inc. In addition, the Cohen estate owed estate and inheritance taxes in the sum-.of $290,T-871, long past due, and it was doubtful if any further extension of time for paying same could he obtained.

Appellee was also a shareholder in the Three States company, owning approximately 150,0.00 shares, and had served as vice-president from April 24, 1957 until January 16, 1959, at which time he resigned because of -disagreement between him and McGuire on various management problems. Through an intermediary the executors sought to interest appellee in purchasing the'Three States stock owned by the Cohen estate. Discussions on this subject began in' December 1959 and 'continued until March 19, 1960 when a meeting was held, between McGuire, Donohue, appellee and the attorney for Three States. All of those at the meeting were attorneys except ap-pellee. At that time the over-the-counter market price for one hundred share lots of the company’s stock ranged from $2,875 to $3 bid per share. Hudson, the appellee, offered to pay $2.50 -per share for the Cohen stock, but only on condition that McGuire would resign as president. and would give Hudson a voting proxy on McGuire’s 683,-544 shares. McGuire did not desire to do either, but Hudson insisted because other; wise he could not be sure of control pf the company and of implementing his plans for expanding the company’s drilling program aqd increasing the value of its holdings. McGuire demurred because a sale of his stock would result in. a large capital gain tax, in addition to which his poor health caused him to fear that there might also soon he large estate taxes owing on his estate; also because he had a two million dollar investment in the company which he did not desire to risk under Hudson’s program of management, in which he had less than complete confidence; also because the giving of a voting proxy on his stock would probably lower its collateral value for refinancing purposes. Moreover, to comply with Hudson’s demands would require him to give up the $50,000 annual salary he was receiving as president.

After voicing all of these conflicting interests and ideas the parties entered into ■certain written .agreements dated March 23, 1960, correctly summarized in appellants’ brief as follows:

“Stock Purchase Agreement dated March 23,1960, between Max I. Cohen Estate and Hudson:
“Hudson agreed to buy the Cohen Estate’s 624,415 shares of Three States stock at $3.00 per share, one-half payable on May 16, 1960, and the other one-half payable on April 16, 1961, with 6% interest. Following May 16, 1960, Hudson would be entitled to vote on all questions ■all the Cohen shares so purchased including the one-half sold on credit. ■One-half of the shares was to be delivered on May 16, 1960, and the other half retained as security for the remaining payment.
“Option Agreement dated March 23, 1960, between McGuire, personally, and Hudson:
“1. McGuire obtained the option to require Hudson to purchase all or any part of the 683,544 shares of Three States owned by McGuire and his family at $3.00 per share from time to time and at any time during the period continuing to May 16, 1962, except that McGuire could not require Hudson to purchase such stock at a rate faster than one-fourth of the total amount every thirty days.
“2. McGuire obtained the right to have Hudson provide him a loan of over $588,000 at not more than 6% interest, such loan to remain in effect until May 16, 1962, for which McGuire would furnish as security only 539,562 of McGuire and family’s 683,544 Three States shares.
“3. McGuire obtained the right to have Hudson pay interest on the McGuire borrowings of over $588,000 referred to above in an amount proportionate to the number of shares that might be purchased by Hudson under the agreement, either as the result of McGuire’s requiring such purchase at $3.00 per share or as a result of Hudson’s requiring McGuire to sell at $6.00 per share.
“4. McGuire reserved the right to sell all or any part of his and his family’s 683,544 shares of Three States stock upon any terms he desired, to any other party, and upon such sale to take such shares completely out of the agreement. This meant that McGuire could, if he so elected, sell the shares free of any right of Hudson to vote such shares and free of all of the other terms of the agreement. Shares so sold would not thereafter have any of the benefit of the said agreement. To some extent McGuire was to apply some part of the proceeds of sales to relieve his debt.
“5. Hudson received the right, until May 16, 1962, to vote the 683,-544 shares of Three States stock owned by McGuire and his family to the extent that such shares were not thereafter sold by McGuire and his family to other parties, but such voting rights did not include the right to vote upon:
“(I) any merger or consolidation of the company;
“(II) any liquidation of the company;
“(III) any recapitalization of the company; or
“(IV) any proposed sale or all or substantially all of the assets of the company.
“6. Hudson received the right, until May 16, 1962, to require McGuire to sell all or any part of the 683,544 shares of Three States stock owned by McGuire and his family, or such part thereof as McGuire did not sell to others, at $6.00 per share.
“Side Letter Agreement dated March 23, 1960, between McGuire, personally, and the Hudson brothers:
“To further secure John McGuire with respect to the Option Agreement, the Hudson brothers agreed to keep unencumbered assets upon which $2,000,000 could be borrowed available in their personal accounts or trust accounts from May 16, 1960, to May 16, 1962.”

These contracts were consummated on May 13, 1960, on which date McGuire executed his promissory note to the First National Bank in Dallas in the sum of $588,122.23, which was endorsed by appel-lee and his brother. McGuire also pledged as collateral security to this note 539,562 shares of Three States stock. Appellee caused his brother also to pledge certain of his securities valued at $100,000. The proceeds of that note, together with an equal amount of cash from the Cohen estate, were used to retire the Byrd-Frost, Inc. note, and the stock pledged thereunder was released. McGuire and Hudson disagreed as to which of them should pay the quarterly interest on McGuire’s note to the First National Bank in Dallas prior to the time of the exercise of either of the options for the purchase of McGuire’s stock. McGuire threatened to withdraw from his agreement, telling Hudson to go forward with his purchase of the Cohen estate stock but to let him out of his obligations. Fearing that he was bound to purchase the estate’s stock under his contract, and that he would then still lack control of the company if McGuire did not live up to his agreement, Hudson agreed to advance the interest, the ultimate liability for the interest to be determined in accordance with the original option agreement. McGuire resigned as president and Hudson was elected to replace him, McGuire being elected chairman of the board at a salary of $20,000 per year.

In July 1960, because of other commitments and interests, appellee became desirous of selling his stock in the Three States company, and soon thereafter received an offer to purchase his stock provided McGuire would sell his stock on the same basis. McGuire first declined but later, at Hudson’s urging, consented to do so, but on the basis that the sale would be treated as if Hudson were exercising his option to purchase McGuire’s stock in accordance with the option agreement, to which Hudson agreed although it resulted in his being liable for approximately $11,000 of interest on McGuire’s note to the First National Bank. All of Hudson’s stock (including the 624,415 shares he had purchased from the Cohen estate) and all of McGuire’s stock were then sold at $3.50 per share and the option agreement released. Thus appellee Hudson made a profit of fifty cents per share on the 624,415 shares he bought from the estate, or $312,207.50, and appellants, having an 80 percent beneficial interest in the estate, sue for 80 percent of Hudson’s total gain, or $249,766.

Appellants remind us of the well settled principles of law, that equity demands of a fiduciary the highest duty of loyalty and undertakes to enforce such duty by “prohibiting him from using the advantage of his position to gain any benefit for himself at the expense of his cestui que trust and from placing himself in any position where his self-interest will or may conflict with his obligations as trustee.” Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377, 388. Our attention is also directed to this excerpt from the opinion of the Supreme Court in Nabours v. McCord, 100 Tex. 456, 100 S.W. 1152, 1154:

“It does not matter that a greater sum could not have been procured at that time from other parties, for the self-interest of the trustee in the transaction was such a vice as ‘leaveneth the whole lump’ and renders the transaction voidable at the election of the cestui que trust without looking further into the matter than to ascertain that the interest existed.”

Appellants argue that they are entitled to recoup the profits made by appellee because the extension of credit by appellee to McGuire individually, being made simultaneously with the extension of credit by the estate to Hudson on his purchase of the Cohen stock, was tantamount to McGuire’s circuitously obtaining credit from the estate of which he was an executor and trustee. They also argue that the effect of the option agreement between Hudson and McGuire was to guarantee McGuire a minimum of $3 per share, with the possibility that he might obtain as much as $6 per share, while the estate was compelled to sell its stock at only $3 per share, and that this, coupled with Hudson’s agreement to pay the interest on McGuire’s note to the First National Bank under certain conditions, in effect constituted a bribe paid by Hudson to induce McGuire, as executor and trustee, to cause the estate to sell the stock to Hudson at the price agreed upon. Appellants also point out that they were never apprised of the negotiations or agreements, or given any opportunity to object. Because of his own personal interest in the entire transaction, appellants say, McGuire breached the trust imposed upon him by Cohen’s will, citing Murphy-Bolanz Land & Loan Co. v. McKibben (Tex.Com.App.), 236 S.W. 78.

They also argue that, since it clearly appears from the undisputed facts and stipulations that Hudson knew he was dealing with McGuire as an executor of the Cohen estate as well as in his personal capacity, being a party to all of the agreements of March 23, 1960, he must be held to have participated in the breach of trust by McGuire, and is therefore liable to the beneficiaries of the Cohen estate under the authority of Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 514, wherein it is said:

“It is settled as the law of this State that where a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such.”

While we are in complete agreement with the decisions so cited by appellants, we are not persuaded that the law so pronounced is applicable to the facts of this case. In the first place, the burden of proof rested upon appellants to show that Hudson was not an innocent purchaser of the Cohen stock. Old National Life Ins. Co. v. Guest, Tex.Civ.App., 163 S.W.2d 241, err. ref. w. o. m. The trial judge filed findings of fact and conclusions of law, wherein he concluded that appellants had not met this burden and that appellee “did not knowingly participate in any breach of duty toward the estate of Max J. Cohen and is not liable to plaintiffs,” also that appellee was a bona fide purchaser of the Cohen stock, “for value and without notice, actual or constructive, of any breach of duty toward the Estate of Max J. Cohen.” The court specifically found that appellee would not have purchased the Cohen stock unless McGuire had agreed to resign as president of Three States Natural Gas Company and to give appellee the voting proxy on his shares; that McGuire received the option and assistance in refinancing his part of the debt to Byrd-Frost, Inc. from Hudson in exchange for his resignation as president of the company and giving Hudson the voting proxy on McGuire’s shares; that appellee was innocent of any breach of trust and was not negligent in entering into the March 23, 1960 agreements, but acted as an ordinarily prudent businessman would have acted under the same circumstances.

The trial court’s findings of fact and conclusions of law should be construed together and, if possible, to be in harmony with the judgment and to support it; and in determining whether the findings are supported by any evidence of probative value we should give credence only to the evidence favorable to the findings, disregarding all evidence to the contrary. Brown v. Frontier Theatres, Inc. (Tex.Sup.), 369 S.W.2d 299, 301.

Appellants offered no objections or exceptions to any of the findings of fact or conclusions of law. Having the same force and effect as jury findings, they are binding on this court and will not be disturbed if supported by some evidence of probative value; and in determining whether there is evidence to support such findings, we must indulge every legitimate conclusion favorable thereto. A. J. Rife Construction Co. v. Brans, Tex.Civ.App., 298 S.W.2d 254, 257, err. ref. n. r. e.; Banks v. Crawford, Tex.Civ.App., 330 S.W.2d 243, err. ref. n. r. e.; Houston Natural Gas Corp. v. Pearce, Tex.Civ.App, 311 S.W.2d 899, 903, err. ref. n. r. e.; Dixie Distributors v. Lane, Tex.Civ.App, 211 S.W.2d 581, 584, err. ref. n. r. e.

Applying these well settled principles of law to the record before us we find there is ample evidence to support the findings and conclusions of the trial court. Appellants not having requested additional or amended findings and conclusions, as' authorized by Rule 298, Texas Rules of Civil Procedure and since they do not in their points of error or elsewhere in their brief assert any lack of evidence to support the findings and conclusions, such findings and conclusions must be accepted by us. Rule 299, T.R.C.P.; Curry v. E. E. Stone Lumber Co, Tex.Civ.App, 218 S.W.2d 293, err. ref. n. r. e.

It is quite evident from this record that Hudson did not seek out McGuire or either of the other two executors of the Cohen estate and offer him or them any inducement whatever to sell the Cohen stock to him. To the contrary, the estate was in great need of cash to pay at least two large and very pressing obligations. Its time for paying those debts was fast expiring, and its representatives sought out Hudson in the hope that he might be induced to buy the estate stock. Hudson made it clear that he would be interested in doing so only if he could obtain what was called “working control” of the corporation and displace McGuire as president and thus be in position to operate the company according to his own ideas and plans. It is also quite obvious from the record as a whole that McGuire did not feel that he was being bribed to sell the estate stock to Hudson because on one occasion he tried to get out of his part of the agreement and let Hudson buy the Cohen stock at the agreed price, but Hudson, being still unwilling to purchase the Cohen stock unless he could displace McGuire as president and get control of the company, declined to release McGuire.

It is true the court found that McGuire did receive a more valuable agreement as to his shares of stock than did the Cohen estate, although the court also found that this was a sharply disputed issue of fact. The finding that McGuire received the better deal is of course also binding on us, but we do not consider it in any sense controlling in the light of the other findings and conclusions. The two “deals” were quite different and in our opinion it would be next to impossible for anyone to say definitively that one was more valuable than the other. Such a comparison would be fairly futile from another viewpoint; viz., the executors had no authority under the will to grant Hudson a voting proxy on the Cohen stock, as McGuire did with respect to his individual stock. Moreover, assuming that it would have been lawful for the executors to make the same agreement with Hudson with respect to the Cohen stock as McGuire made with respect to his own stock (which we do not find it necessary to decide, but concerning which we think there is great doubt), such an arrangement or agreement would not have solved the problem urgently facing the estate; viz., the need, not only of refinancing the amount due on the' Byrd-Frost note, but also that of raising another $290,000 for federal estate taxes; and if the estate and Hudson had “traded options” as McGuire and Hudson did, and if Hudson had been unable or unwilling to respond to an immediate exercise of the option the estate would not have had sufficient funds with which to pay the estate tax liability and would have been subject to foreclosure of the government’s lien on all of its assets. As it was, the estate received sufficient consideration for its shares to enable it to meet its pressing obligations, and also received what the trial court found to have been “a fair price for the stock and * * * the best price obtainable.” “There must be no speculation upon the part of the trustee in dealing with the trust fund. The law does not give to him the same freedom of choice in making investments which may be and often is exercised by prudent businessmen in the conduct of their own affairs.” Murphy-Bolanz Land & Loan Co. v. McKibben (Tex.Com.App.), 236 S.W. 78, 80.

We are unable to say from the record as a whole that the trial court erred in its conclusion that appellee was an innocent purchaser for value and without notice of any breach of duty on the part of any of the executors of that estate. We find in the record no evidence of mala fides on the part of appellee.

We are not called upon to make any determination as to whether McGuire or either of the other executors of the Cohen estate breached or did not breach his or their trust, and we make no such determination. We do find that the appellants have failed to meet the burden of showing: reversible error in this case, and the judgment is accordingly affirmed.

Affirmed.

      . Eaeli side tendered an expert witness, one expressing the opinion that McGuire received a better deal than the estate, and the other testifying that in his opinion the agreements left the estate in “infinitely the better position.” One of these witnesses said that lie and Ms staff spent approximately thirty days on this evaluation question, and the other that he had spent approximately one hundred hours in arriving at his opinion.


source: Caselaw Access Project

author: CHAPMAN, Justice.

license: Public Domain

text:
    MESA TRUCKING COMPANY et al., Appellants, v. Reba KING et al., Appellees.
    No. 7317.
    Court of Civil Appeals of Texas. Amarillo.
    March 9, 1964.
    Rehearing Denied April 6, 1964.

      Crenshaw, Dupree & Milam, Splawn & Maner, Lubbock, Rountree, Renner & Snell, Lamesa, for appellants.
    New & Townes, Denver City, Evans, Pharr, Trout & Jones, Lubbock, for appel-lees.
   CHAPMAN, Justice.

This opinion is announced in lieu of our opinion of February 3,1964.

This is a common law damage suit growing out of a head-on collision between a Mack Truck-Tractor and trailer weighing 72,000 pounds loaded with grain and a panel truck containing automobile parts weighing eight to nine thousand pounds.

Reba King and her three minor children, surviving wife and children respectively of Ralph Eugene King, deceased driver of the panel truck killed in the collision and Jimmy Webb, owner of Webb Auto Supply, employer of King are appellees. Mesa Trucking Company, lessee of the Mack Truck, Truman O’Neil, d/b/a Lamesa Mack Sales, owner of the Mack Truck and Howard M. Linton, driver thereof are appellants.

The case was tried to a jury, which found Howard Linton guilty of failing to keep a proper lookout; of failing to keep his truck under proper control; of failing to yield at least one-half of the main traveled highway to King; of failing to turn the truck-tractor to the right in time to avoid the collision; and that he drove the truck to his left across the center lane of the highway.

The jury found each of the above acts constituted negligence on the part of Linton and a proximate cause of the collision.

The jury found King failed to keep a proper lookout and that such failure was a proximate cause of the collision. They acquitted him of failure to remain on his side of the highway. They also acquitted him of being under the influence of intoxicating liquors, a contention made by appellants. Upon a motion by appellees to disregard the jury’s findings of failure of King to keep a proper lookout and that such failure was a proximate cause of the collision, the trial court sustained the motion and awarded judgment for appellees. It is from such judgment appeal is perfected to this court.

The first two points assert error of the court in sustaining the motion to disregard issues 22 and 23 concerning King’s failure to keep a proper lookout, which was a proximate cause of the collision, and entering judgment for appellees.

In order to sustain the trial court’s action in setting aside the jury finding of improper lookout and proximate cause based thereon, we must hold there was no probative evidence to support the two issues or the issue on proximate cause. Baumler v. Hazelwood, 162 Tex. 361, 347 S.W.2d 560.

The only living eyewitness to the collision was appellant Linton, the driver of the heavy truck. He testified there was nothing unusual in the manner in which the driver of the panel truck and he were approaching each other until they were within 70 or 75 to one hundred feet of each other and that he was driving between 40 and 45 miles per hour. We find no direct testimony other than that just stated as to the speed of the panel truck. However, the record shows Mr. King usually returned home to Lubbock between 7:30 and 8:30. His wife worked at a hospital at night and he was supposed to be home that evening to keep the children. The testimony shows he left Plains to go to Broncho to call on a new service station operator between 5:30 and 6:00 the afternoon before the collision that night and that the collision about six miles west of Plains occurred between 8:00 and 9:00 that night on his way from Broncho back to his home in Lubbock. The Deputy Sheriff, Olan Heath, testified it was about straightup nine o’clock p. m. when he was notified in Plains of the collision. There being no eyewitnesses to the collision other than the parties, someone had to observe the wreckage after it happened then drive into town and report it. Therefore, we believe it could be inferred from the record that the collision happened sometime between 8:15 and 8:45. Since he was between an hour and two hours late and since Mr. Linton testified there was nothing unusual in the manner of his approach, we believe the trial court could have impliedly found he was driving at least as fast as the big truck. We believe it fair to say that under the circumstances he ordinarily would be driving faster. If they were approaching each other at a speed of between 40 and 45 miles per hour and were between 75 and a hundred feet apart they would be approaching at 117.33 to 132 feet per second. Since Mr. Linton testified they were between 70 or 75 and one hundred feet of each other before anything unusual happened, there would have been less than a second for Mr. King to react and take evasive action in an attempt to escape the collision.

The courts have held in effect that time and distance are important matters to consider in passing on the question of setting aside lookout findings. Jaynes v. Lee, Tex.Civ.App., 306 S.W.2d 182 (N.W.H.) ; Biggers v. Continental Bus System, 157 Tex. 351, 298 S.W.2d 79 (first Supreme Court opinion) ; Continental Bus System v. Biggers, Tex.Civ.App., 322 S.W.2d 1 (N.R.E.). The last cited case was the last opinion of the Court of Civil Appeals in Big-gers.

In the second opinion of the Supreme Court in the Biggers case, 157 Tex. 351, 303 S.W.2d 359, the majority said if it could agree with the premise that the Ford entered the lane of the bus less than two seconds before the collision it might find justification for setting aside the jury’s findings on failure of the bus driver to keep a proper lookout. In the first opinion in that case the majority said: “We think there can be no doubt that if the Ford crossed into the traffic lane in such a short time the bus driver could not put on his brakes, or slow his speed before the bus was on the Ford car, then the failure on the part of the bus driver to keep a proper lookout * * * could not possibly be a proximate cause of the collision.” After the case was sent back to the Court of Civil Appeals that court in its second opinion which was N.R.E.’d by the Supreme Court said: “We adhere to our original holding that there is no evidence to show failure to keep a proper lookout was a proximate cause of the collision,” this despite the fact that the time element in that case considered in the light most favorable to the verdict was more than three seconds from the time the Ford entered the lane of the bus before the collision. Biggers, supra, 303 S.W.2d 359, 366.

The only evidence in this case upon which a failure of the deceased driver to keep a proper lookout which was a proximate cause of the collision could be based is that of appellant Linton. His testimony is completely and irrevocably inconsistent with all the material physical facts. He testified the panel truck came over into his lane of traffic within a distance of between 70 or 75 feet and one hundred feet; that he (Linton) cut hard to the right with his truck-tractor; that his right front wheel was four to six feet off the right side of the pavement at the time of impact; and that he was then going in a northwestern direction on a west bound road and continued about the length of his truck and trailer before he stopped.

The physical facts show beyond question that the large truck-tractor turned over on its right side with its left wheels suspended in the air; that its right wheels on the pavement were about three feet from the center stripe and if righted its left wheels would be over four or five feet across the center stripe and into the south lane of traffic. The panel truck after impact was still over on its proper side of the highway, though crushed by the weight of the large truck. Mr. Linton testified the trucks first met bumper to bumper, that the panel' truck kept on down the side of his truck hitting his driver wheels and then the bed of the trailer. These physical facts are proved without the testimony of the Deputy Sheriff, Olan Heath, who was the investigating officer at the scene a few moments following the collision. His testimony, though strenuously objected to was, we believe, admissible. That question will -be considered fully in another point. He placed the point of impact on the south side of the center stripe with the panel truck going east and the large truck going west. He said the location of the grain on the highway and the debris resulting from the collision showed the large truck continued west about 54 feet and the panel truck east about 20 feet after the impact. The chassis, undercarriage, axle and wheels of the panel truck were all on the south, the deceased’s proper side of the center stripe. Another witness testified the grain escaped from the front gate of the trailer and the testimony shows it was strewn from approximately the position placed by Mr. Heath as the point of impact to where the trailer turned over, the bulk of it naturally being to the right side of the trailer after it turned over on its right side.

It has been held that testimony which is contrary to undisputed physical facts will not raise an issue. Holly v. Bluebonnet Express Company, Tex.Civ.App., 275 S.W.2d 737 (N.R.E.) ; Talley Transfer Co. v. Cones, Tex.Civ.App., 216 S.W.2d 604 (N.R.E.). When appellant Linton was questioned 'on the witness stand about his theory of the collision as it related to the physical facts he 'frankly stated he could not explain his theory with such facts.

In a deceased pedestrian case involving a question of proper lookout our Supreme Court in Boaz v. White’s Auto Stores, 141 Tex. 366, 172 S.W.2d 481, has held:

“The presumption is that the deceased exercised ordinary care for his own safety, and in order for respondents to be entitled to have it ruled that, as a matter of law he failed to do so, the burden rested upon them to overcome that presumption by competent evidence so conclusively that reasonable minds could not differ with respect thereto. The question must be approached from the viewpoint of the deceased. His lips are closed and we do not have the benefit of his version of the occurrence. There is not the slightest suggestion that he was bent on self-destruction, and the strongest of presumptions is that he was not.”

That same presumption against self-destruction appears applicable in this case from the testimony of Mrs. King with respect to their, family life and the close relationship between her husband and son.

Proximate cause is defined in the charge as «* * * ^hat cause, which in a natural and continuous sequence, unbroken by any new. and independent intervening cause, produces an event without which the event would not have occurred, and in order to be the proximate cause of an event, it must be reasonably foreseeable that such event, or some similar event is likely to result from such cause.”

To say in this case that the collision would not have occurred except for the failure of King to keep a proper lookout we would have to disregard the presumption rule announced in Boaz v. White’s Auto Stores, supra, and the only evidence in the record of time and distance because under the rules of the Biggers cases there simply was not sufficient time for King to react and employ evasive action to avoid the collision. (Emphasis added).

After all, the burden was on appellants to prove the deceased failed to keep a proper lookout which was a proximate cause of the collision. In the “Motion By Plaintiffs to Disregard Certain Jury Findings” counsel for appellants states: “I think on the motion, we have got to assume, even though it is contrary to the testimony of the only witness to the accident, we have got to assume that the truck was on its wrong side of the road at the time of the collision. The jury so found.”

We are not passing upon whether the law is or is not correctly stated in all respects in the quote or whether such statements bind appellants. We use it here because the motion for rehearing states we went out of the record when we made the observation in our original opinion. The quote is not included in the Transcript or Statement of Facts but is brought up to us in the record in the same manner as would an argument before a jury. For whatever it is worth it is in the record before us.

Regardless of the contention in appellants’ motion for rehearing to the contrary, we still adhere to our original conclusion that Linton’s testimony as to where the impact occurred on the highway, such as to show deceased’s failure to keep a proper lookout which was a proximate cause of the collision, is completely and irrevocably contrary to all the material physical facts. For that reason and under the authorities above cited on the point, we believe his testimony in that regard does not constitute any probative evidence. At the best it constitutes no more than a scintilla of evidence.

Therefore, in applying the rules announced in the cited cases to the facts in the case at bar, considered in the most favorable light to appellants, we are compelled to hold that the trial court properly set aside the findings against appellees and that there is no probative evidence to show that failure on the part of Mr. King to keep a proper lookout was a proximate cause of the collision, even if it could be said, arguendo only, that the evidence showed a failure on his part to keep a proper lookout.

In their points three and four appellants raise the no evidence point to support the verdict of appellees. Not even considering the other findings against appellants, the issues answered against them with respect to Linton crossing to King’s side of the road are sufficient grounds of negligence and proximate cause to support the judgment against them. The photographs of the physical facts taken before anything about the wreckage was moved and the testimony of the witness Biggs and Lowe constitute sufficient evidence to support the verdict. When the testimony of the investigating officer, Heath, is added it preponderates in favor of the judgment rendered. We believe what we have said in a discussion of the first two points supports this statement, so we shall not lengthen this opinion by further recitation of those facts.

The next point appellants assert is that the trial court erred to the prejudice of appellants in overruling their motion to instruct the jury not to consider for any purpose the testimony of the Deputy Sheriff, Olan Heath, as to the point of impact and the course the vehicles took after impact.

The statement of facts shows the trial court very carefully considered the objections made by appellants before ruling. He made the observation that all parties agreed there was an impact, then stated “ * * * he will be permitted to testify as to the opinion, if he can properly predicate it, and if this man has an opinion as to the impact, I will let it come in for whatever it may he worth.”

The officer then testified he had been a deputy sheriff in Yoakum County for eight years; had been in such work for twenty-five years; that his duties involved the patroling of highways and he had investigated hundreds of accidents thereon. He said in effect, from those years of training in the many accidents he had worked, that by determining the location of the physical evidence as he found it he could determine what happened. From the conditions at the scene, including the grain, debris, the location of the trucks before they were moved, three or four chipped out places about two inches deep on the highway on the south side of the center stripe and all other physical facts, he testified he could tell where the impact occurred; which direction each truck was moving; how far they proceeded; their direction after impact; and which side of the road the vehicles were on when the impact occurred. The court had that testimony before him and the numerous photographs, several of which were greatly enlarged, upon which to base his ruling.

The thoroughness with which the officer made his study, his diligence in marking the highway so he could observe it the next morning in the daylight, and the measurements he made, we believe gave him knowledge beyond that of an average layman and made it probable that his opinion would be of assistance to the trier of the facts.

It has been textually stated in Volume 66 A.L.R.2d 1057 that:

“In a growing number of jurisdictions the courts have held that skilled or expert opinion evidence as to the point of impact or collision is admissible in motor vehicle accident cases upon- the ground that a skilled or expert witness can aid the jury in drawing correct inferences from raw and unsorted facts.”

Also in Volume 2, McCormick and Ray, Texas Law of Evidence, Section 1401, Page 235, it is said:

“The burden of establishing his qualification naturally rests upon the party offering the alleged expert. Whether the person offered possesses the required qualification is a preliminary question to be determined by the trial judge and should not be left to the jury. In the decision of this question our courts have wisely held that the trial judge has a wide discretion not subject to review in the absence of clear abuse.”

That same text in the same volume at page 220, Section 1395, states:

“Furthermore the controlling cases from the Texas Supreme Court do not support any general rule forbidding properly qualified witnesses from giving opinions upon facts which are the ultimate issues in the case. On the contrary it is believed that such opinions are receivable whenever they are likely to be of appreciable aid to the jury in arriving at the correct conclusion.”

In Bolstad v. Egleson, Tex.Civ.App., 326 S.W.2d 506 (N.R.E.) the court held:

“It is for the Trial Court to determine if the proposed witness has had sufficient opportunity for observation and experience in line with the subject under inquiry to entitle him to give his opinion based upon evidence adduced. When the Trial Court, in the exercise of his sound discretion, has determined this matter, the appellate courts will not disturb that decision in the absence of an abuse of that discretion. Montgomery Ward & Co. v. Levy, Tex.Civ.App., 136 S.W.2d 663.”

Therefore, under this record and the authorities cited we do not feel justified in saying the trial court abused his discretion in permitting the testimony of Olan Heath.

The last point urged, is that the trial court committed reversible error in not permitting defendants and cross plaintiffs to exercise six peremptory challenges each. The point is without merit.

Howard Linton, Truman O’Neil and Mesa Trucking Company all take the position that Ralph King caused the accident. There was not a question raised in the case but that Linton was the employee of Mesa Trucking Company. Their defenses were common. If the jury had found any issue supported by probative evidence that King was guilty of negligence which was the proximate cause of the collision, Mesa would have been relieved of liability and Linton would have recovered. There were no fact issues to be determined between them.

In Smith v. El Paso & N. E. Ry. Co., Tex.Civ.App., 67 S.W.2d 362 (error dismissed) the court said:

“The statute (Rev.St.1925, art. 2148), in civil cases, expressly allows six peremptory challenges to ‘each party.’ Party does not mean person. Several defendants having identical interests in the suit constitute but one party. Interests are identical where the' grounds of defense are common to all. ’There is no suggestion of antagonism of interest in the pleading or issues tendered between defendants.”

Other authorities in support of the paragraph just quoted are Alaga v. Stubblefield, Tex.Civ.App., 174 S.W.2d 627 (N.W.H.); Glazier v. Roberts, Tex.Civ.App., 108 S.W.2d 829 (N.W.H.); Witliff v. Spreen, 51 Tex.Civ.App. 544, 112 S.W. 98 (N.W.H.); Baldridge v. Klein, Tex.Civ.App., 56 S.W.2d 897.

Appellant Mesa Trucking Company in support of its claim of error under this point asserts that it wanted to challenge a juror Linton refused to challenge. No injury is shown from this fact because there is no possible way to determine how the juror which would have been selected by a challenge of the other juror would have voted on the issues.

Because of the importance of this case, particularly in the size of the verdict, we have given further careful study following appellants’ vigorous motion for rehearing. We still adhere to our conclusion reached in our first opinion to the effect that the trial court properly disposed of the case.

Accordingly, the judgment of the trial court is affirmed.


author: PHILLIPS, Justice. HUGHES, Justice

text:
    W. H. BULLARD et al., Appellants, v. AUSTIN REAL ESTATE BOARD, INCORPORATED, Appellee.
    No. 11170.

    Court of Civil Appeals of Texas. Austin.
    March 18, 1964.
    Rehearing Denied April 1, 1964.

      Louis H. Owen, III, Austin, Arthur Mitchell, Austin (on appeal only), for appellants.
    Niemann & Babb, Austin, for appellee.
   PHILLIPS, Justice.

This case involves the right of a private association to make rules of conduct involving its membership and its right to expel a member for failure to follow the rules.

Appellants, W. H. Bullard as an individual and the First Austin Investment Company of which Bullard is owner, were both members of the Austin Real Estate Board, Inc. The Company’s licensed salesmen were also associate members . of the Board. Bullard is a licensed Real Estate Broker and was, prior to this controversy, a member of the Board of Directors of the Austin Real Estate Board, Inc.

The Austin Real Estate Board is a voluntary association of licensed real estate brokers and brokerage firms to which membership is by invitation only. Active memberships are limited to individuals or firms owned by indvidual members. In this case First Austin’s membership is dependent on the continued membership of appellant Bul-lard who owns the company.

Among the association’s many services is the Multiple Listing Service which is a program created by and administered by the association for the benefit of its members, but not for nonmembers. While Multiple Listing Service has its own rules and regulations, “It is part and parcel of the Austin Real Estate Board and is subject to the constitution and by-laws of the Board.” (Article I of the Multiple Listing Service Rules.)

Multiple Listing Service is administered by one of the association’s numerous committees under its own printed rules and regulations. When a member obtains an exclusive listing, he has his client fill out and sign the standard printed form which is provided by the Service and required to be used under the rules. (Article VI of the Multiple Listing Service Rules.) The member who submits this contract to the Multiple Listing Service office is called the “listing broker.” When submitted, a copy of this contract is distributed to all members of the association. By this medium each member is given an opportunity for procuring a buyer for the property, in which event he is known as “selling broker.”

The specific Multiple Listing Service regulations which control the Austin Real Estate Board’s Order in question are Articles VIII and V, which are as follows: '

“ARTICLE VIII — SALES
“The selling broker shall hold the earnest money.
“The selling broker shall in every case consult with the listing broker when an offer is made on a given property. Contact with the owner shall come only through the listing broker in the first instance, unless permission is granted by the listing broker to the selling broker to present directly to the owner. The selling broker may represent the buyer in such negotiations, not necessarily introducing the buyer to the listing broker.
“A copy of the sales contract shall be furnished the listing broker; and the committee on request.
“The selling broker shall arrange for the closing, but the listing broker must be notified of the time and place for the closing.
“ARTICLE V — COMMISSION SPLITS
“The minimum commission on all Multiple Listing Service listings shall be 6%. This commission shall be split 1/3 to the listing broker and 2/z to the selling broker, unless the listing broker offers a greater percentage of commission to the selling broker, which he may do. This rule shall apply to Realtor-Owners and Realtor-Builders alike and any rules or regulations now in effect to the contrary are hereby repealed.”

A Dr. Casey owned a 20.03 acre tract of land on which two houses were located. Abutting this land was 160 more acres which he also owned. Dr. Casey had in a prior year purchased the 20 acres for $35,000 through Jacob Bauerle and Associates, a farm and ranch brokerage firm in Austin, Texas. Upon deciding to sell this tract, Casey personally contacted Bauerle who came to Casey’s residence, at which time they entered into an exclusive-agency, multiple-listing-service contract. Bauerle filed this contract with multiple-listing-service which in turn distributed copies of it to Bullard who was a multiple-listing-service member by virtue of his association membership. The sale price set in this contract was $40,000.

In his letter to the association’s president prior to the arbitration hearing, Bullard stated that Dr. Casey had informed Bauerle at the time of the listing agreement that he, Casey, “reserved the right to make a deal directly with W. H. Bullard, or his companies, exclusive of and outside of the multiple listing with Jacob Bauerle.” This allegation which was presented to the arbitration committee was also before the trial court in the form of an affidavit, signed by Dr. Casey. At both arbitration and trial, Bauerle testified to the exact contrary, that Bullard’s name was never at any time mentioned, and that nothing was ever said about any concurrent negotiations between Bullard and Casey for the purchase of the property. Abner Jones, an associate in Bauerle’s firm, who had shown the property on several occasions, also testified at the trial that he had never been told of Casey’s alleged exception for Bullard or his companies.

Bauerle’s first knowledge of the sale of the tract was a letter from Bullard on December 12, 1962, in which Bullard stated that “Mr. and Mrs. Clifford B. Casey have traded to my Bullard Company the 20.03 acres on Circle Drive containing two houses, subject to your right under Multiple Listing Contract dated October 18, 1962.” Abner Jones was also informed by Bullard of the 20 acre sale for which there was a consideration of $37,500. The 160 acre tract was also sold to the Bullard Company for $17,500. Total consideration for both tracts was $55,000.

Believing he was entitled to one-third of 6% commission as listing broker for the 20 acres, Bauerle made such request to all parties involved in a letter dated December 17, 1962. After a month of waiting and receiving no reply, Bauerle called Joe Perrone, who was president of the association at that time, asking for assistance in settling the dispute. Bauerle also wrote a letter to the new president, Willard Connolly, requesting formal arbitration of this dispute. Perrone attempted to effect an amicable agreement between the two rela-tors as was his usual practice when disagreements between fellow members arose. Bullard’s telephone response, as related by Perrone, was as follows:

“No, definitely he would not; that he had no time to take up the thing, and that if Mr. Bauerle had any recourse or wanted any relief, for him to go to the Courthouse, that that is what the Courthouse was for, and as far as he was concerned, he didn’t intend to take up any time to come down and have a bunch of Boy Scouts tell him what to do.”

Both Bullard and the First Austin Company were notified by letter, dated February 25, 1963, of Bauerle’s complaint of nonpayment of commissions and of his request for arbitration thereon. Bullard readily admitted receipt and knowledge of this notification which was in accordance with arbitration procedures under Article XVI of the Austin Real Estate Board’s constitution. Bullard was expressly advised of his. opportunity to be heard, present witnesses, documents or any other evidence in his behalf, and to have the assistance of legal counsel for the hearing if he so desired.

The hearing was set for March 12, 1963. On March 11, Bullard wrote to Connolly, informing the president that the arbitration committee had no jurisdiction over the dispute; that no commission was owed by him to Bauerle; that he did not intend to appear at the arbitration proceedings; and that his legal and ethical rights were not subject to arbitration without his specific consent.

Despite Bullard’s refusal to recognize its jurisdiction over the controversy, the committee held the hearing as scheduled for the purpose of determining the rights of the parties under the multiple listing service regulations.

Article XVI of the Austin Real Estate Board’s constitution prescribes detailed procedural safeguards to assure a fair and impartial hearing for all concerned. Section 2 thereof gives all members a right to arbitration: “If a dispute arises, any party may write to the President stating the facts and request arbitration.” Among the requirements set out in the constitution for arbitration are (1) notice to the parties, (2) time for defense, (3) presentation of evidence, (4) a majority of votes for decision, (5) recordation of the hearing (by tape recorder in this case), (6) a written report to the president, containing a statement of facts found, the decision of the committee, and the reasons therefor.

All this was done.

After full consideration of Bullard’s letter and the documentary and testimonial evidence presented by Bauerle and other witnesses, the committee made written findings of fact and reached the following decision in their report to the Board:

“WHEREFORE, it is the decision of the Arbitration Committee after hearing all matters presented that, under the Rules and Regulations of the Multiple Listing Service, Jacob Bauerle is the listing broker in the sale of the subject property and entitled to a commission as listing broker and that in accordance with the Rules and Regulations of the Multiple Listing Service member W. H. Bullard should pay member Jacob Bauerle an amount equal to one-third (l/j) of a minimum 6% commission on the sale of subject property as a commission to the listing broker in accordance with Article V, Rules and Regulations of the Multiple Listing Service of the Austin Real Estate Board, Inc.”

The committee vote was 11 to 0 with one member absent. Copies of their complete report were sent to both Bauerle and Bullard.

Approximately one month after the arbitration hearings the Board of Directors met, and after fully considering the arbitration committee report, issued an order on April 12, 1963, effectuating the committee’s recommendation. Copies of the order were sent to both Bullard and Bauerle.

Bullard persisted in his position and refused to abide by the Board order. After ten days lapsed without compliance, Bul-lard’s membership was suspended; after sixty days, his name was dropped from the rolls completely. This action was taken pursuant to Article XVI of the constitution:

“Any member failing to abide by an order or decision of the Board of Directors in a matter of arbitration within ten days after official notice of such order or decision shall automatically be suspended from all rights and privileges of the Board, including the right to advertise as a Board member. If such delinquency continues for sixty days from date of official notice of such order or decision, the member shall be automatically expelled from the Board, with any and all rights and interests therein forfeited and terminated immediately.”

From beginning to end, Bullard was fully aware of this provision and the consequence of its violation.

The theory of Bullard’s suit, filed in the district court on June 28, 1963, was to restrain and enjoin the Board from “expelling” him from the Association. However, his membership had automatically terminated three weeks before on June 10 by operation of the above quoted provision of ap-pellee’s constitution and by-laws.

The trial court granted appellants an ex parte temporary restraining order; however, after a full hearing refused to grant them a temporary injunction and found “that the evidence shows that plaintiff Bul-lard was accorded procedural due process by defendant Board in that he was given full opportunity to be heard after ample notice of the Board hearing. * * * There is no evidence in the record that the defendant Board acted arbitrarily, capriciously or unfairly or that it was motivated by any improper consideration in making its decision.” Bullard then perfected his appeal to this Court.

We affirm the judgment of the Trial Court.

Appellants brief their ' points of error one through five together which summarized complain that the Trial Court erred in refusing to enjoin the expulsion of appellants in that the expulsion was a violation of the rules of natural justice in that the Austin Real Estate Board failed to abide by the requirements of their constitution and by-laws in expelling appellants; .that natural justice was violated in that appellants were automatically expelled by their failure to abide by the decision of the Arbitration Committee; that such automatic expulsion amounted to a denial of a fair hearing; that there was no appeal from the decision of the Arbitration Committee ; that the Arbitration Committee did not follow the laws of the State in its distinction between a listing giving an exclusive agency and one giving an exclusive right to sell; that this was evidence of bad faith on the part of the Arbitration Committee ; that the automatic expulsion of appellants amounted to a denial of a fair hearing for the power to expel is judicial in nature and hence requires judicial proceedings.

Appellants state the general rule governing cases of this type, that usually a court will not enjoin expulsion proceedings pending before a professional association or its expulsory tribunal, citing Brown v. Harris County Medical Society, Tex.Civ.App., 194 S.W. 1179, no writ history; Hoey v. San Antonio Real Estate Board, Inc., Tex.Civ.App., 297 S.W.2d 214, no writ history; Brotherhood of Railroad Trainmen v. Price, Tex.Civ.App., 108 S.W.2d 239, among others.

Appellants then cite the rule that one of the bases for judicial intervention in these cases is the fact that the expulsion was in violation of the principles of natural justice, citing Brown v. Harris, supra. That the denial of a fair hearing or trial, lack of notice, an inadequate opportunity to be heard or defend one’s self or expulsion brought about by bad faith or malice are to be considered as to whether principles of natural justice have been followed.

We have no quarrel with these rules; however, we find that appellants have not been denied any of the principles of natural justice.

In Brown v. Harris County Medical Society, cited above, there had been a “midnight trial” of expulsion on the same date the accused doctor received notice of the complaint against him. The court reversed and remanded the case stating that the general rule:

“ * * * the courts never interfere except to ascertain whether or not the proceeding was pursuant to the rules and laws of the society, whether or not it was in good faith, and whether or not there was anything in it in violation of the laws of the land. And that if it is found that the proceeding was had fairly, in good faith and pursuant to the laws of the society, and that there was nothing in it in violation of the law of the land, then the sentence is conclusive like that of a judicial tribunal.”

Or as stated by the Court in Hoey v. San Antonio Real Estate Board, supra:

“ ‘Courts are not disposed to interfere with the internal management of a voluntary association. The right of such an organization to interpret its own organic agreements, its laws and regulations, after they are made and adopted, is not inferior to its right to make and adopt them. And a member, by becoming such, subjects himself, within legal limits, to his organization’s power to administer, as well as to its power to make, its rules. To say that the courts may exercise the power of interpretation and administration reserved to the governing bodies of such organizations would plainly subvert their contractual right to exercise such power of interpretation and administration. * *

In St. Louis Southwestern Ry. Co. v. Thompson, 102 Tex. 89, 113 S.W. 144, the Supreme Court of Texas stated the law to be that whether the members of the order acted fairly and in good faith was a fact question to be decided by a jury. That if the members had acted in good faith in passing on testimony submitted to them as to violations or obligations respecting the constitution or by-laws of the order, then their action would be final and conclusive of the matter.

The Trial Court found that -the Austin Real Estate Board had acted fairly and in good faith and the evidence supports this finding.

Section 2, of Article XVI, of the Austin Real Estate Board’s Constitution gave Bauerle the right to take his grievance directly to the president in writing and to make request for immediate arbitration. Nowhere does the constitution say that arbitration must not be used for Multiple Listing Commission controversies. Arbitration was a right of Bauerle’s to which appellant Bullard agreed when becoming a member and subjecting himself to the association’s constitution. An alternative right was complaint under Article XV of the Multiple Listing Rules entitled “Professional Conduct.” However, the only power of the Professional Conduct Committee in respect to Multiple Listing Service Commission disputes is to receive complaints, investigate complaints, arrange for amicable settlements, and if they cannot, to refer the matter to the Board of Directors for appropriate action. There is no provision in the Multiple Listings Service Rules that entitles anyone to a hearing. The then president of the Board, Joe Perrone did, in fact, seek an amicable settlement of the matter only to be rebuffed by appellant Bullard.

The present president of the Board testified that because arbitration is a more thorough and fairer method, all Multiple Listing Service disputes in the past have been taken to the arbitration committee composed of the Board of Directors. We hold that there is nothing incompatible with the procedures concerning the method of handling disputes arising from the Multiple Listing Service branch of the Board and the arbitration procedures of the parent organization, Austin Real Estate Board.

We hold that the procedures followed by the Board and detailed in this opinion afforded appellants an opportunity for a fair and impartial hearing; that in every respect appellants were afforded procedural due process.

Appellants’ suit asking the court to enjoin the Austin Real Estate Board from expelling them was not the proper action as they had already been expelled some weeks before the suit was brought. The intent of the Board of Directors in issuing the order was not to expel Bullard et al or to deny them any of their rights of membership. Bullard’s loss of membership was brought upon himself by his own defiance of the Board’s ruling.

Appellants seek to ascribe bad faith on the part of the Board and also an erroneous interpretation of the laws of Texas with respect to a listing wherein an exclusive agency was given rather than an exclusive right to sell. That the exclusive agency agreement between Casey, the owner, and Bauerle the agent, does not convey to Bauerle the owner’s right to sell, that the owner is free to sell; and if the owner sells, he does not become obligated to pay a commission to anyone. That Bullard in procuring the sale of the property to his Bullard Company was acting only as principal, that is, as buying officer or agent for the Bullard Company, and that therefore he did not owe a commission to anyone.

The Austin Real Estate Board evidently interpreted the arrangement to be that Bul-lard was both the procuring broker for the sale, that is, “selling broker,” as well as buying agent for the Bullard Company, principal. That Bauerle considered himself as “listing broker” and was entitled to the required commission under this arrangement. In this respect it is interesting to note that Bullard Company purchased the Casey property for $37,500 or $2,500 less than the $40,000 price for which Dr. Casey listed it with Bauerle. The 6% commission on this sale would have been $2,400.

Appellant Bullard cites Baker v. Skipworth, Tex.Civ.App., 244 S.W.2d 299, writ refused, for the distinction between a listing giving the exclusive right to sell and one granting an exclusive agency to sell. In the former the commission is due the listing agent regardless of who sells the property; in the latter, the owner does not surrender his own right to sell the property and in the event he does so, he is under no obligation to pay a commission to the broker.

We have no quarrel with the rule announced in Baker v. Skipworth. The suit in that case was in a court of law between an agent and a seller and the legal effect of the agency created therein was pointed out. In the case at bar the rights of the seller are not involved. Only the rights of members who have submitted to the arbitration authority of the Austin Real Estate Board are involved. As stated by this court in Couey v. Arrow Coach Lines, Tex.Civ. App., 288 S.W.2d 192: “Rules of law applicable to contractual arbitrations are plain and well settled. They require that the arbitration be conducted and determined in accordance with the contract. They forbid an attack on the award made except for fraud, misconduct or such gross mistake as would imply bad faith or a failure to exercise an honest judgment.” While the contract between Bauerle and Dr. Casey is apparently an exclusive agency contract at law and the rules of the Multiple Listing Service refer to exclusive right-to-sell listings only, the form of the contract used by Bauerle and Dr. Casey is the only form used by the Austin Real Estate Board for its farm and ranch listings. This is the same form that has been used for many years. Custom and usage of the Board and its members are involved. The rights that this form created among the board members • was for the board to determine and technical distinctions of law drawn by the courts do not invalidate the arbitration. No “fraud, misconduct or such gross mistake as would imply bad faith or a failure to exercise an honest judgment” has been shown. Panhandle Grain and Elevator Co. v. Dorsey, Tex.Civ.App., 242 S.W. 255, writ dismissed; Robbs v. Woolfolk, Tex.Civ.App., 224 S.W. 232, writ dismissed; Sanders v. Newton, 57 Tex.Civ.App. 319, 124 S.W. 482, writ refused; Needham v. Blythewood, Tex.Civ.App., 61 S.W. 426; Ferguson v. Ferguson, Tex.Civ.App., 93 S.W.2d 513, writ dismissed.

The Arbitration Committee of the Austin Real Estate Board did not convene to determine Mr. Bauerle’s rights to a commission under the laws of the State of Texas, but under the by-laws and constitution of the Board. In arbitrating the dispute between Bullard and Bauerle the Committee was not applying the law of the market place but the standard of conduct and ethics expected by one realtor of another. In a very comprehensive article dealing with the questions of associations in general 76 Harvard Law Review, 1020, we find the following:

“The courts have generally refused, however, to investigate de novo the merits of an association’s determination. Such an inquiry normally would be incompatible with the notion of the judicial deference to group autonomy, and insofar as familiarity with the context in which a case arises contributes to its correct disposition, the association may be assumed to provide a more competent tribunal.”

The members of the Real Estate Board have the right to set their own goals and standards as long as they are not against the public policy of the State. To paraphrase the words of the Court in the Hoey case above, “Bullard, by his assent to the rules of the Real Estate Board, bound himself to abide by all lawful limitations imposed by those rules.”

In addition, we hold that the record discloses that Bullard had sufficient notice of the proceeding against him by both letter and personal notification by telephone, that such notice was ample to alert him to the fact that both his personal membership and that of the Bullard Company was in jeopardy.

We also hold that the suit brought by Bullard was premature in that he had failed to exhaust his administrative remedies before the Board. In fact, he refused to avail himself of them altogether.

Appellants’ points seven and eight, briefed together, complain that the dispute was the subject matter of arbitration within the procedures governing the Multiple Listing 'Service and not the Arbitration Committee of the parent organization; that the act of the parent organization in expelling appellants was ultra vires.

While we feel that these points have been answered above, nevertheless we will point out that under Article XV of the Rules and Regulations of the Multiple Listing Service the only authority of the Committee is to “investigate such complaints and may arrange amicable settlements of same if such appears appropriate; if not then such complaints shall be referred to the Board of Directors for appropriate action.” It takes two parties to arrange an amicable settlement. By his own conduct Bullard foreclosed this avenue. As stated above, Mr. Perrone attempted to bring about an amicable settlement only to be rebuffed. Final action was taken by the Board of Directors .as the rules of the Multiple Listing Service prescribe.

The judgment of the Trial Court is affirmed.

Affirmed.

HUGHES, Justice

(dissenting).

It is my opinion that the only basis upon which the expulsion of appellants can be sustained is their failure to abide by the award of the Arbitration Committee.

The Rules and Regulations of the Austin Multiple Listing Service provide that, “Only exclusive right-to-sell listings shall be processed by the Service. * * * ” It is undisputed that the listing upon which the Arbitration Committee based its award is not of the type specified by the rules. The listing involved should not have been “processed by the service.” It could not, under the facts here, form a legal claim for a commission by Bauerle.

It is my opinion that the award of the Committee is based upon a mistake which is gross and palpable and vitiates its award. See Arbitration and Award, 6 Tex.Jur.2d, Sec. 65, p. 88.

It is my opinion that appellants were entitled to a temporary injunction reinstating them as members of the Austin Real Estate Board, Inc., pending final determination of this controversy.