author: GRISSOM, Chief Justice.

text:
    SPARTAN INDUSTRIES, INC., Appellant, v. The STATE of Texas et al., Appellees.
    No. 3885.
    Court of Civil Appeals of Texas. Eastland.
    May 15, 1964.
    Rehearing Denied Juno 12, 1964.
    Jay S. Fichtner, Dallas, for appellant.
    Henry Wade, Dist. Atty., Ted P. Mc-Masters, City Atty’s office, Dallas, James E. Barlow, Dist. Atty., Crawford B. Reeder, City Atty., San Antonio, for appellees.
   GRISSOM, Chief Justice.

Spartan Industries, Inc., which operates department stores in Dallas, San Antonio, Austin and Fort Worth, sued said cities and certain officials, including the District Attorney and Sheriff of Dallas County, seeking to enjoin them from enforcing Article 286a P.C., one of the statutes sometimes known as the “Sunday Closing Laws”. That statute provides that any person who, on both of the two consecutive days of Saturday and Sunday, sells certain merchandise shall be guilty of a misdemeanor. It makes certain exceptions. It states that its purpose is to promote the health, recreation and welfare of the people of Texas; that operation of any business in violation of its provisions constitutes a public nuisance and that any person may apply to court of competent jurisdiction for an injunction restraining its violation.

Spartan alleged that it proposed to sell on both of the two consecutive days of Saturday and Sunday all of the merchandise which it usually offered for sale, including many articles the sale of which on said two days is specifically and expressly prohibited by Article 286a P.C. It alleged that unless said officials were enjoined, they would enforce said statute, which would cause it irreparable damage, for which it had no adequate remedy at law, and enforcement would constitute an invasion of its vested property rights. Spartan contends that Article 286a P.C. is a criminal statute, but that its tests and requirements are so uncertain as to make it void. The defendants contended that plaintiff had an adequate remedy at law by raising its defenses in any proceeding brought against it under said statute; that Article 286a P.C. gave defendants authority to institute criminal proceedings but did not authorize any actual or potential violator thereof to enjoin its enforcement; that to enjoin defendants from filing complaints or otherwise enforcing said statute, it would be necessary for the civil court in which the suit was filed to construe a penal statute in an equity proceeding and thus usurp jurisdiction of the criminal courts and that said court had no jurisdiction to determine the constitutionality of said statute; that before a civil court in an equitable proceeding may enjoin enforcement of a penal statute two things must exist: (1) the statute must be unconstitutional and (2) its enforcement must result in irreparable injury to vested property rights and that, in the language of the Supreme Court in Crouch v. Craik, 369 S.W.2d 311, 315, “[t]hat situation does not exist in this case.” The defendants’ pleas were sustained and Spartan’s suit was dismissed. It has appealed.

Appellant contends the court erred in dismissing its suit to restrain appellees from enforcing Article 286a P.C. because it alleged that said article was unconstitutional because, among other things, it is a penal statute but there is no mention of penalties in the caption. In Ex parte Wilson, 374 S.W.2d 229, 231, the Court of Criminal Appeals, in an opinion by Judge Woodley, considered and overruled that contention. It held that a liberal construction should be indulged to uphold the act and, since the caption commences with the phrase “An Act to prohibit the sale” on consecutive Saturdays and Sundays, etc., it is sufficient to embrace a provision in the body of the act penalizing persons violating it and that it is not obnoxious to the Texas Constitution.

Appellant further contends that Article 286a P.C. is so indefinite that its tests are subjective, rather than objective, and therefore inoperative. Said article is not indefinite. It expressly and clearly prohibits the sale of certain merchandise under the conditions which appellant says it will sell it.

Appellant says the court erred in dismissing its case because it had alleged under oath that enforcement of said statute threatened irreparable injury to vested property rights, for which damages it had no adequate remedy at law, and, since said statute is unconstitutional, the defendant officials were acting without authority and consent of the State to be sued was unnecessary. We think it is evident appellant had no vested property rights entitling them to an injunction against enforcement of the statute. See Kemp Hotel Operating Co. et al. v. City of Wichita Falls et al., 141 Tex. 90, 170 S.W.2d 217.

The decision of our Supreme Court in Crouch v. Craik, 369 S.W.2d 311, disposes of this appeal. It was there held that a civil court has no jurisdiction to enjoin a district attorney from enforcing- Article 286a P.C. It said that only when a criminal statute is (1) void and (2) vested property rights are being impinged by its enforcement can jurisdiction of a court of equity be invoked to restrain its enforcement. The court said, “[Tjhat situation [did] not exist in this case.” See also Ex parte Sterling, 122 Tex. 108, 53 S.W.2d 294 and Department of Public Safety v. Buck, Tex.Civ.App., 256 S.W.2d 642, 646 (Ref. N. R.E.).

In Ex parte Sundstrom, 25 Tex.App. 133, 8 S.W. 207, the Court of Appeals of Texas, in 1888, held that such laws were constitutional, clearly within the power of the legislature to pass and that such questions had then been too long settled to doubt now, or be called in question, or to need authority to support them. See also Sayeg v. State, 114 Tex.Cr.R. 153, 25 S.W.2d 865 and Clark v. State, 167 Tex.Cr.R. 204, 319 S.W.2d 726, 727.

In People v. Havnor, 149 N.Y. 195, 43 N. E. 541, 31 L.R.A. 689, 52 Am.St.Rep. 707, it was said “that the real object of the statute must appear, upon inspection, to have a reasonable connection with the welfare of the public, the exercise of the police power by the legislature is well established as not in conflict with the constitution. * * * When thus exercised, even if the effect is to interfere to some extent with the use of property or the prosecution of a lawful pursuit, it is not regarded as an appropriation of property or upon encroachment on liberty, because the preservation of order and the promotion of the general welfare, so essential to organized society, of necessity involve some sacrifice of natural rights.”

All of appellant’s contentions have been carefully considered. They are overruled. The judgment is affirmed.


source: Caselaw Access Project

author: DAVIS, Justice.

license: Public Domain

text:
    Ralph COMPTON, Appellant, v. Robbie Cecile JAY, a feme sole, Appellee.
    No. 7556.
    Court of Civil Appeals of Texas. Texarkana.
    June 2, 1964.
    Rehearing Denied June 16, 1964.

      ■ Kenley, Ritter & Boyland, Longview, for appellant.
    Jones, Brian, Jones & Baldwin, Marshall, for appellee.
   DAVIS, Justice.

Plaintiff-appellee, Robbie Cecile Jay, a feme sole, sued appellant-defendant for damages that grew out of a collision between a 1951 model Ford car owned by ap-pellee, and a 1962 model pickup truck owned by appellant, which occurred in Turner-town, Rusk County, Texas, on November 4, 1962. The case was tried before a jury. The jury convicted appellant of several acts of negligence, and found no contributory negligence on the part of appellee. The jury awarded the appellee $5250.00 damages for physical and mental pain and suffering, the loss of earning capacity, past and future, and the loss of earnings; $750.00 for medical and hospital expenses; and, $215.00 for a decrease in the market value of the appellee’s car. Judgment was entered accordingly. A motion for new trial was filed and was overruled by operation of law. Appellant has perfected his appeal and brings forward six points of error.

Appellant briefed only his first point of error. He filed argument on the other points of error, but he did not cite any cases or authority in support thereof. The last five points of error are found to be without any merit, not being briefed, and are overruled.

By his first point, the appellee says the trial court erred in admitting evidence of prior convictions of the appellant for the offence of driving while intoxicated. He cites three cases: Texas & N. O. Ry. Co. v. Parry et al. (Tex.Com.App.) 12 S.W.2d 997; Evans v. Jacobs et al. (Tex.Civ.App.) 228 S.W.2d 545, N.W.H.; and Tripp v. Watson, (Tex.Civ.App.) 235 S.W.2d 677, W.R., N.R.E. In the Tripp v. Watson case, supra, the defendant claimed as a defense that the plaintiff was intoxicated, and sought to enter evidence of the plaintiff’s conviction of driving while intoxicated on an occasion several months prior to the date of the collision. The courr stated that they did not have a case where the driver had confessed to being intoxicated on the occasion in question by having pleaded guilty to the criminal charge. The conviction was not admissible for impeachment purpose on the theory that the offence was one involving moral turpitude. There was no competent evidence showing that the plaintiff was intoxicated on the occasion in question. The judgment of the trial court was affirmed.

The evidence offered in the Jacobs case, supra, was not that the defendant had been convicted of a felony, but that he did not have a Railroad Commission permit, citing the general rule relied upon in Kennedy v. International Great Northern Ry. Co. (Tex.Com.App.), 1 S.W.2d 581. The Jacobs case is distinguishable on the facts in the present case in that it involves neither a felony, nor a misdemeanor involving moral turpitude.

In the Texas & N. O. Ry. Co. v. Parry case, supra, the question involved was one as to whether or not the witness had been involved in thefts. No plea of guilty or judgment of conviction was offered, but merely the accusation that he had been involved with thefts. This case is not similar to the case at bar. There was no evidence of a conviction, nor a plea of guilty of any crime whatsoever.

It seems that the cases relate back to and rely upon the rule as announced in the Kennedy case, supra. In the case of Gulf, C. & S. F. Ry. Co. v. Gibson, (42 Tex.Civ.App. 306) 93 S.W. 469, the evidence offered was a judgment of conviction of a felony. The court held that such evidence in the form of a judgment of conviction took the case out of the general rule excluding such evidence. It reasoned that the basis for excluding such evidence in the past was upon the ground that it would be unfair to the witness to set up charges against him without .notice and a chance to meet such charges; and, also, that it would be confusing to a jury. Due to the fact that a judgment of conviction of a felony was offered, the reason for the ordinary rule did not exist. The evidence was admitted.

Art. 802b, Vernon’s Ann.Tex.P.C. makes a subsequent offence of driving while intoxicated a felony. Upon the trial of this case there was evidence offered to show that the appellant was intoxicated at the time of the collision! The appellant denied the charge, but then admitted that he plead guilty to the subsequent offence of driving while intoxicated — a felony— on January 28, 1963. Then to show that he was in the habit of partaking of alcoholic beverages, he was asked about the two prior convictions of driving while intoxicated — a felony — which occurred on the date of April 28, 1962, and August 25, 1962, less than six months prior to the date of the collision in question. The general rule in this state is that habits of intemperance, or sobriety, are admissible to corroborate or rebut the alleged fact of intoxication on the particular occasion. 2 McCormick & Ray, Texas Law of Evidence 356, Sec.-1512, reads as follows:

“There is considerable conflict among the authorities as to whether a man’s intoxication or lack of it on a particular occasion may be shown by proof of his habits in regard to intoxication or sobriety. It has been argued that while a habit of abstaining from liquor should be received to evidence probable sobriety on a given occasion, habits of intemperance or intoxication should not be admitted for the opposite purpose, the theory being that the latter indicate at most only frequent indulgences as distinguished from a steady practice of intoxication. The rule in this state appears to be that habits of intemperance or sobriety are admissible to corroborate or rebut the alleged fact of intoxication on the particular occasion, but only when that issue has been raised by other evidence and not otherwise(Emphasis added).

The evidence was admissible because appellant had been convicted of a felony offence and touching his credibility as a witness when he denied that he was intoxicated at the time of the collision. Kennedy v. International Great Northern Ry. Co., supra; Crutchfield v. State, 184 Tex.Cr.R. 399, 187 S.W.2d 911; Transport Insurance Company v. Cossaboon (Tex.Civ.App.) 291 S.W.2d 746, W.R., N.R.E.; McCarty v. Gappelberg (Tex.Civ.App.), 273 S.W.2d 943, W.R., N.R.E.; R. T. Herrin Petroleum Transport Co. v. Proctor, 161 Tex. 222, 338 S.W.2d 422; Robinson v. Lovell, 238 S.W.2d 294, (Tex.Civ.App.), W.R., N.R.E.; M. K. Hall Co. v. Caballero (Tex.Civ.App.) 358 S.W.2d 179, W.R., N.R.E.

The point of error is overruled.

The judgment of the trial court is affirmed.


author: ARCHER, Chief Justice.

text:
    Leo IRISH, Appellant, v. Wayne VIRDELL, dba Brady Truck Service, Appellee.
    No. 11210.
    Court of Civil Appeals of Texas. Austin.
    May 27, 1964.
    Rebearing Denied June 17, 1964.

      E. B. Fuller, Arthur Mitchell, Phillip W. Gilbert, Austin, for appellant.
    Holloway & Slagle, Brownwood, for ap-pellee.
   ARCHER, Chief Justice.

This is a negligence case, brought by appellant, Leo Irish, against appellee, Wayne Virdell, doing business as Brady Truck Service, for damages based upon the destruction of appellant’s truck while in appellant’s garage for repairs. The case was tried before the 35th Judicial District Court of McCulloch County, Texas, sitting without a jury, and judgment was entered for the defendant.

The appeal is predicated on three points and are to the effect that the Court erred in granting judgment for the appellee because the prima facie case of negligent fault against appellee was not overcome by any evidence, that the uncontroverted evidence established that appellee’s failure to provide safety equipment to control a fire in his garage was negligence and the proximate cause of appellant’s damages, and finally the Court erred in refusing to allow appellant to introduce into evidence the N.A.D.A. Book as a basis for estimating the value of the 1957 Mack truck just prior to its destruction.

It is admitted that there is no material dispute as to the facts in this case.

The defendant, appellee herein, operated a garage in Brady, with the aid of one employee. The plaintiff, appellant herein, left hi§ truck for some repairs about 3 days before the fire, of unknown origin, destroyed the garage and the truck.

The appellee testified he had turned off the gas stove and pulled both electric switches so no electric current could enter, and locked the building.

Wayland Tyler testified that he had his pickup in the garage for repairs and of the work that had been done. He assisted Mr. Virdell in cleaning up the garage and testified that the light switches were pulled and the garage door was locked, and with Mr. Virdell left the scene.

We believe it to be the established law in Texas that when a bailor proves that the property was delivered to the bailee in good condition, and the bailee fails to return it in similar condition, the burden then devolves upon the bailee to show some explanation of his failure to redeliver ; and that when the bailee proves that the property was destroyed by fire, and especially when the fire is of undetermined origin or cause, the burden then is on the bailor to prove by a preponderance of the evidence that the fire was the proximate result of negligence on the part of the bailee, and there is no presumption of negligence.

In 8 Tex.Jur.2d, page 265, under the subject of Bailment, Section 51, the rule is stated as follows:

“Since negligence in fire, theft, storm or accident cases is never presumed, damage to the property by such means does not raise a presumption of negligence. Thus in cases of fire or theft, the burden of showing negligence is on the bailor once it is shown that the property has been destroyed or lost by such means.”

Exporters’ & Traders’ Compress & Warehouse Co. v. Schulze, 265 S.W. 133 (Com.App., Sec. A), opinion adopted; Beck v. Lasater, Tex.Civ.App., 286 S.W.2d 957, er. ref., n. r. e.

Appellant has cited a number of cases, such as Trammell v. Whitlock, 150 Tex. 500, 242 S.W.2d 157, which we do not believe to be controlling.

In Beck v. Lasater, supra, the Court stated:

“It is appellants’ theory, under the principles of law governing the relationship of bailor and bailee, that having proven the delivery of the twenty-nine bales of cotton to appellee as a bailee, he was liable to them for the value of the cotton upon proof of his failure to redeliver the same as the fact of appellee’s negligence is presumed. ‘ “The presumption on which the bailor may rely is a mere rule for the conduct of the trial. It puts upon the bailee the risk of a directed verdict if he does not meet it, but it does no more; once he has done so, it disappears from the case.’” Trammell v. Whitlock, 150 Tex. 500, 242 S.W.2d 157, 159 [3, 4], The undisputed record reveals the cotton was lost due to fire of undetermined origin and not from any lack of care on the part of the bailee. The courts of Texas have held the presumption of negligence ‘to disappear or not to exist, when there was evidence indicating the article to have been destroyed in a conflagration and there was no evidence other than the bare fact of a fire to suggest negligence on the part of the bailee.’ Trammell v. Whitlock, supra, 242 S.W.2d 157, 160 [5, 6] and 8 C.J.S., Bailments, § 27, p. 272. Since there was no proof of negligence on the part of appellee as bailee of the cotton, appellants are not entitled to recover.”

The evidence only raised an issue of negligence and it is presumed that the Trial Court found all facts so as to support the judgment. No request for and no findings of fact and conclusions of law were filed by the Trial Court and the assumption is that the Trial Court found every disputed fact in such a way as to support the judgment. Construction and General Labor Union Local No. 688 v. Stephenson, 148 Tex. 434, 225 S.W.2d 958.

Since we believe that the Trial Court was justified in entering the judgment in this case, finding that appellant was not guilty of negligence proximately causing the fire, the question of the value of the truck and the admissibility of the N.A.D.A. Book became immaterial.

Mr. Irish carried fire insurance for damage or loss on his truck, and was paid $4500.00, on an actual claim of damage of $4600.00 less $100.00 deductible.

The judgment of the Trial Court is affirmed.

Affirmed.


author: WALTER, Justice.

text:
    CHAMPLIN OIL & REFINING COMPANY et al., Appellants, v. M. B. CHASTAIN et al., Appellees.
    No. 3884.
    Court of Civil Appeals of Texas. Eastland.
    May 29, 1964.
    Rehearing Denied June 19, 1964.
    Cantey, Hanger, Gooch, Cravens & Scarborough, Cecil E. Munn, Ft. Worth, for appellants. „ .
    Jackson, Walker, Winstead, Cantwell & Miller, Conan Cantwell and Jack Pew, Jr., Dallas, for appellees.
   WALTER, Justice.

M. B. Chastain, Vincent A. Hughes, John P. Costello, and Grace C. Woolley, Bennett L. Woolley, Jr., James C. Woolley, Margaret W. Strong, and Grace Woolley Gowan, independent executors of the estate of Bennett L. Woolley, deceased, filed suit against Champlin Oil & Refining Co., a corporation, and others on a gas processing contract. The plaintiffs will be referred to as Chastain and the defendants as Champlin. Chastain owned four producing natural gas wells. Champlin owned and operated a natural gas processing plant in the Carthage field in Panola County, Texas. Natural gas is delivered into the plant from wells owned by Champlin, Humble, Pan American, Chastain and others. Approximately 50% of the gas that goes through the plant is owned by Champ-lin. Approximately 10% is owned by Chas-tain. Champlin extracts propane, motor fuel, fuel oil, kerosene, liquid petroleum gas and other products, hereinafter referred to as plant products, from this gas.

Chastain pleaded that Champlin breached its contract by allocating plant products contrary to the formula described in the contract. Champlin admitted in its answer that it had not used the contract allocation formula. It alleged that through a mutual mistake of fact Section 8 of the contract, the provision containing the allocation formula, was inserted in the contract. Champ-lin pleaded as defenses unjust enrichment, equitable estoppel and mutual mistake of fact. It also pleaded the four year statute of limitation.

A jury found that Chastain, prior to the time he met John McNamara, could have discovered by the use of ordinary care that the allocation method used by Champlin was different from the contract allocation formula; that Chastain by acts, conduct and silence led Champlin reasonably to believe that Chastain approved of the continuation of the allocation method used by Champlin; that Champlin relied upon such acts, conduct or silence; that, but for such acts, conduct or silence of Chastain, Champ-lin would have taken voluntary action or legal proceedings to protect itself against loss resulting from the use of more than one allocation method; that Chastain delayed in asserting a claim against Champlin for a length of time sufficient that Champlin would have good reason to believe that Chastain would not assert any claim because of the difference between the allocation method used in the production and disposition reports sent to Chastain and the allocation formula described in the contract; but that during such period of delay Champlin had not changed its position in a way which would make it unjust for Chastain to assert such a claim, and that Champlin’s plant allocation method has distributed to the Chastain wells the amount of liquids produced by such wells.

The jury also found that Chastain did not know prior to the time he met John McNamara that the allocation method used by Champlin was different from the allocation formula described in the contract; that Champlin had equal knowledge or access to equal knowledge as did Chastain that the plant allocation method used was not the allocation method provided for in the contract; that with such equal knowledge or access to such equal knowledge Champlin failed to exercise ordinary care to protect itself from injury or detriment, and that Champlin failed to use ordinary care in failing to advise Chastain that the method of plant allocation that Champlin was using resulted in Chastain being allocated less plant products than was provided for in the contract.

The court rendered judgment for Chas-tain for $77,167.89, for Hughes $25,722.63, for Costello $25,722.63 and for Woolley $25,722.63.

Champlin has appealed and contends the court erred in refusing to render judgment for defendants upon the jury’s findings on the issues relating to equitable estoppel, and in granting plaintiffs’ motion to disregard the jury’s findings on said issues; in refusing to find that a mutual mistake was conclusively shown by the evidence or, alternatively, in refusing to submit to the jury •defendants’ affirmative defense of mutual mistake; in excluding from consideration by the jury the testimony and exhibits of the witnesses Frank L. Jones, Berry Holmes, Garman Kimmell, and Harlan .Echols; and in granting judgment to plaintiffs for money allegedly due under the written contract prior to four years next preceding the commencement of this suit.

The appellees present a cross point that the court erred in failing to award them attorney’s fees of $25,000.00, because they proved a valid claim for material furnished.

Chastain telephoned Charles B. Johnson, vice-president of Champlin in 1956, and informed him that he had some gas that was available for processing, Chastain told Johnson “This is pretty rich gas, and it will take — ah—you will have to cut your process fee down pretty low to get it.” Johnson told him, “Well, we will take a look at it and see if we can do it.” On September 17, 1956, Champlin mailed Chas-tain a natural gas processing agreement and in its letter of transmittal said: “These contracts are somewhat flexible and may be altered to a specific condition and processing consideration.” Johnson referred to this contract as “a form of contract that we had used before.”

On September 18, 1956, Champlin wrote another letter to Chastain correcting an ■error made in its September 17, 1956 letter and said: “Will you please be advised that the second paragraph of the cited letter should read ‘60% Propane’ instead of ‘65% Propane.’ ”

Champlin wrote Chastain on September 25th, 1956, enclosing the test data which it had accumulated on one of Chastain’s wells and said: “We are in hopes that this data will be of assistance to you in evaluating your gas in this area and that we may continue our discussion of the Processing Agreement as submitted by our letter of September 18, 1956. We want to discuss this Processing Agreement with you and invite your inquiries or questions concerning it.”

On October 9th, 1956, Champlin wrote Chastain and informed him of five changes they had made in the original agreement. One of these changes was with reference to Section 8. Section 8 is the provision in the contract that Champlin contends was inserted by mutual mistake. In said letter Champlin said: “4. Section 8, page 9— 'Determination of the Quantity of Plant Products Derived from Producers Gas and the Volume of Residue Gas to he Delivered Back’.” “This section has been changed to read in barrels per million cubic feet instead of GPM (gallons per thousand cubic feet). This change was made in order to bring our Processing Agreement in line with Accounting Procedures. Also under Section 8, paragraph (a) sub-paragraph 1, a third paragraph has been added which stipulates who shall bear the cost of retests which may be requested by either party.”

The final draft of the contract was prepared by Champlin and signed by all the parties on October 25th, 1956. The allocation formula as set forth in Section 8 of the contract was not followed by Champlin. It followed what it describes as its “improved plant allocation method.” The parties stipulated that: “The difference in the sale value of plant products derived from gas produced from the M. B. Chastain wells as the amounts of such products were determined by said plant allocation method and the sales value of such plant products if the amounts thereof had been determined by the allocation method described in said natural gas processing agreement may be calculated with mathematical certainty. * * * the parties hereto have agreed that the difference in the principal amount of such sales value for each month from June 1, 1957, through July 31, 1961, is as shown in Column 5 on said Stipulation Exhibit A. It is agreed and stipulated that if defendants had accounted to the plaintiffs for each of such months for plant products-derived from gas produced from the M. B. Chastain wells determined by means of the allocation method described in said natural gas processing agreement rather than by means of said plant allocation method, the amount of additional payments which would have been made by the defendants to the plaintiffs is as shown in Column S of said Stipulation Exhibit A. * * *

“It is the purpose and intention of this stipulation to agree upon the principal amounts in dispute for each of the calendar months covered hereby and without waiving the contentions of either party with respect to whether additional amounts of principal or interest are due by the defendants to the plaintiffs for any or all of said calendar months.” Column S of said stipulation A reveals that if the sales value of plant products had been determined by the allocation method described in the contract Chastain would be entitled to an additional $118,076.25.

Humble and Pan American audited Champlin’s books in 1958 and discovered that the method used by Champlin in distributing plant products was different from the allocation provision provided for in the contract. On September 12, 1958, Champlin wrote Chastain the following letter:

“Humble Oil & Refining Company and Pan American Petroleum Corporation have just completed an audit of Champlin’s books covering our Carthage Plant operations for the period from August 1, 1955, through December 31, 1957. Since commencement of processing at the Carthage Plant in 1946, these two companies have audited the operation of this plant for themselves and on behalf of others four separate times starting in the year 1950.
“During this most recent audit (just completed in 1958) a question was raised for the first time as to the language in the processing agreements as compared to the actual procedure used by Champlin for the allocation of plant liquids which procedure was agreed upon and set forth in a letter agreement dated June 8, 1948, between the Panola County Royalty Owners Association and The Chicago Corporation (now Champlin Oil & Refining Co.) and a letter from the Royalty Owners Association to The Chicago Corporation dated June 11, 1952.
“The procedure used in allocating plant liquids since this agreement was made with the Royalty Owners Association is fully reflected in the ‘Gas and Liquid Production and Disposition Report’, complete copies of which you receive monthly. After a review of the matter, Humble agrees with Champlin that this procedure, which has been in actual use since 1948 and as adjusted slightly in 1952, is most equitable and after reviewing the entire matter Pan American expresses no disagreement with the procedure.
“Certainly, a prime requisite for a fair and equitable allocation of liquid products derived from a commingled stream of gas is that the allocation method and procedures for each and every source of gas be identical. We have, therefore, been employing the procedure all this time, and all parties have been fully advised of the allocation through the monthly reports mentioned above.
“We take this opportunity of advising you that it will be our practice to continue to employ the aforementioned procedure as to all producers connected to our plant. If you have any question as to the procedure as heretofore employed, and which we propose to continue, or as to any other matters pertaining to our processing agreement with you, we will be glad to discuss the matter with you. Unless we hear from you to the contrary within thirty (30) days, we will consider that our suggestion for continuing this procedure meets with your approval.”

Chastain testified that the first time he was aware that Champlin was not performing its contract was the latter part of February or the first part of March 1961. This was at a meeting at the Baker Hotel in Dallas, Texas, with Dick Castleberry, and a lawyer by the name of John McNamara. Castleberry informed him on that occasion that Champlin owed him about $200,000.00. Chastain claimed that he had no reason to know that the allocation method actually used by Champlin was different from the method provided for in his contract.

We find no merit in Champlin’s point on estoppel. The record is silent about any statement made by Chastain or any overt act on his part which could have misled Champlin into believing that he was giving up his rights under the contract. Its defense of estoppel is based on Chastain’s negative conduct in remaining silent after he received their letter about the audit made by Humble and Pan American.

“The doctrine of estoppel is for the protection of innocent persons, and only the innocent may invoke it. There is, in the very nature of the doctrine, some element of the maxim that one must come into a court of equity with clean hands. It is essential that the party claiming the benefit of the estoppel should have proceeded in good faith, and with reasonable diligence.” 31 C.J.S. Estoppel § 75, p. 453. “A person may not base a claim of estoppel on conduct, omissions, or representations induced by his own conduct, concealment, or representations, especially when fraudulent.” 31 C.J.S. Estoppel § 75, p. 454. “Mere silence of itself will not raise an estoppel. To make the silence of a party operate as an estoppel the circumstances must have been such as to render it his duty to speak, and there must also have been an opportunity to speak. It is essential that the one claimed to be estopped should have had knowledge of the facts, and that the adverse party should have been ignorant of the truth, and have been misled into doing that which he would not.have done but for such silence.” 31 C.J.S. Estoppel § 87, p. 485.

Champlin’s letter was calculated to deceive and mislead Chastain. For example, the letter states:

“After a review of the matter, Humble agrees with Champlin that this procedure, which has been in actual use since 1948 and as adjusted slightly in 1952, is most equitable and after reviewing the entire matter Pan American expresses no disagreement with the procedure.”

Humble’s audit revealed a breakdown on the distribution of plant products for the month of November, 1957. This was attached to their audit and designated as Schedule 2. This Schedule revealed that for said month Champlin received more than 4,000 barrels, Humble more than 1,000 barrels and Pan American more than 1,000 barrels of plant products, under the allocation method used by Champlin, than they would have received under the contract formula. For said month Chastain received 4,241.78 barrels less than he was entitled to receive under his contract. Humble’s audit and Schedule 2 were in their possession at the time the letter was written. These were not furnished to Chastain. Champlin failed to inform Chastain in their letter that he was receiving less money proceeds from plant products than he was entitled to receive under his contract. There was ample evidence to support the jury’s answers that Champlin failed to use ordinary care in failing to advise Chastain that the method of plant allocation that Champlin was using resulted in Chastain’s being allocated less plant products than was provided for in the natural gas processing agreement; that Champlin had equal knowledge or access to equal knowledge as did Chastain that the plant allocation method' being used was not the allocation method1 provided for in the written contract, and that with such equal knowledge, or access to equal knowledge, Champlin failed to exercise ordinary care to protect themselves, from injury or detriment.

We find no merit in Champlin’s point that the court erred in failing to submit its requested issues on mutual mistake because there was no evidence to support them. Champlin contends that Section 8 was placed in the contract by mutual mistake. Champlin wrote the contract. It changed Section 8 before the final draft of the contract was signed. Now it says that the mutual mistake “consisted of the erroneous belief by both Champlin and Chastain that the written instrument accurately described the allocation method in use in the plant as the parties intended.” Champlin’s vice-president Johnson testified that the contract allocation method is one which is in common use in gas processing plants in the Carthage field, and that the Carthage Corporation and United Gas Pipeline use substantially the same allocation method as is provided for in Section 8. Before he signed the contract, Chastain consulted with an attorney in Shreveport. Hughes examined the contract himself and had it examined by an oil and gas attorney in Dallas. He had it examined by an officer who was in charge of oil loans at a Dallas bank. He also had it examined by a Mr. Finnell of the bank’s engineering department. The record conclusively shows that none of the appellees discussed or agreed to Champlin’s plant allocation method. The only method agreed upon was that stated in Section 8, which was written into the contract by Champlin. Vice-president Johnson testified he had never discussed its plant allocation method with any of the appellees. The Supreme Court in Sun Oil Co. v. Bennett, 125 Tex. 540, 84 S.W.2d page 447 said :

“If one of the parties intended that the lease cover and affect adjoining land owned by the lessor, there was no mutual mistake in the execution of the lease containing language which included such land. In the absence of fraud or inequitable conduct, a written instrument will not be reformed on account of mistake, unless the mistake is mutual; that is, a mistake common to both parties, both laboring under the same misconception in respect to the terms of the instrument.”

A mutual mistake concerning a material fact does constitute a ground for reforming a contract, but the mistake must be mutual and not unilateral. 13 Tex.Jur.2d p. 480.

We are unable to agree with Champlin’s contention that the court committed reversible error in excluding the testimony and exhibits of the witnesses Jones, Holmes, Kimmell and Echols. Rule 434, Tex. Rules of Civil Procedure.

There was severed from this suit Chastain’s claim for money due after August 25, 1961. Chastain’s claim herein is for money due on or before August 25, 1961. His first payment was due on July 25, 1957. This suit was filed November 30, 1961. Champlin pleaded that Chastain’s cause of action which accrued prior to November 30, 1957, was barred by the four year statute of limitation. $20,336.98 of the total amount of the judgment herein represents principal due more than four years preceding the filing of this suit. Champlin paid Chastain $754,035.81 by using its unauthorized plant allocation method. The parties stipulated that if Champlin had used the allocation method provided for in the contract they would be entitled to receive from Champlin $872,112.06. The judgment in favor of Chastain is for the difference between what Champlin owed and what it paid, namely, $118,076.25, plus interest.

Chastain contends the presumption is that a payment will be credited to the oldest item on the account and that Champlin was required to overcome this presumption. Champlin contends that any amount due prior to November 30, 1957, is barred by the four year statute of limitation. Chastain contends that no application of payment was made by either party. For gas furnished in June 1957 payment was due on July 25, 1957. It was' specifically designated as payment for gas furnished in June 1957. This is also true with reference to July, August, September, October and November 1957. Champlin made a specific application of its payment for each month and Chastain received it and so applied it. Champlin’s fourth point on limitations is sustained. The judgment is reformed by deleting therefrom all sums due prior to four years next preceding the commencement of this suit. Fleming Oil Co. v. Anco Gas Corporation, Tex.Civ.App., 217 S.W.2d 29.

Appellees cite, in support of their cross point for attorney’s fees, Texas Gas Corporation v. Hankamer, Tex.Civ.App., 326 S.W.2d 944, (Writ Ref. N.R.E.). The court allowed attorney’s fees in the Hankamer case under the provision of Article 2226, for “materials furnished”, for gas and gas distillate sold to the Texas Gas Corporation. The contract contemplated the sale by Hankamer of gas and distillate and the purchase of such products by Texas Gas. It was contemplated that the title to such property pass and that the relationship of creditor and debtor result therefrom.

Chastain as the producer and Champlin as the processor agreed as follows:

“Processor shall pay to Producer monthly, on or before the 25th day of the month, the sums received by Processor during the preceding calendar month for the quantities of Producer’s portion of plant products derived from Producer’s gas,. if any, theretofore marketed under the provisions of this agreement as agent for and for the account of Producer less the amount of all production, gathering transportation and similar taxes, if any, actually paid by Processor, which are applicable to such quantities.”

Chastain, as principal, was delivering gas to Champlin, as his agent. Under these facts, Chastain was not entitled to recover attorney’s fees under the “material furnished” provision of Article 2226, Vernon’s Ann.Tex.Civ.St.

The judgment is reformed and affirmed.


author: COLEMAN, Justice.

text:
    Mattie Emma BURR, Appellant, v. Ira Allen BURR, Appellee.
    No. 14299.
    Court of Civil Appeals of Texas. Houston.
    May 28, 1964.
    Franklin R. Navarro, Michael T. Brimble, Houston, for appellant.
    Joel W. Cook, Wilson McPhail, Houston, for appellee.
   COLEMAN, Justice.

This is an appeal from the property settlement provisions of a divorce decree. The divorce suit was originally filed by ap-pellee, who, prior to trial, dismissed. The case was tried on appellant’s cross-action. No complaint is made of those portions of the judgment granting the divorce, awarding custody of a child, requiring payments for child support, and establishing visitation rights.

The parties were present in person and by attorney at the trial of the case. A property settlement was dictated into the record in open court. Both parties, as well as their attorneys, stated that they agreed to the settlement as dictated. The trial court announced his judgment and made entries on his docket sheet.

Thereafter, before the judgment was signed and entered, appellant expressed her dissatisfaction with the judgment and secured the services of different attorneys. It appears that the trial court granted an oral motion for new trial, prior to the entry of judgment, which he subsequently withdrew. Only the testimony taken at a formal hearing on a motion for judgment has been presented to this Court as a statement of facts. Judgment was entered reciting an agreed property settlement and further reciting that the property settlement appeared to the court to be “in all things fair and proper,” and that it was approved by the court.

The judgment was signed and entered after the trial court had heard exhaustive testimony concerning the extent and value of the community property presented at the hearing on the motion for judgment.

Appellant’s points that there is no evidence, or alternatively insufficient evidence, to show that the parties entered into a property settlement agreement, might well be overruled by reason of the fact that a complete statement of facts is not before this Court. Boyd v. Robinson, Tex.Civ. App., 304 S.W.2d 430. However, a review of the testimony heard on the motion for judgment demonstrates that the finding of the trial court that such an agreement was properly entered into is well supported by the evidence.

Appellant asserts that her consent to the property settlement agreement was obtained under duress. The trial court heard testimony on this allegation and impliedly found that no duress was existent. There is ample evidence in the record before us to support such a finding.

Appellant finally asserts that if her lawyers consented to the property settlement agreement, they did so without her consent, authority or knowledge. Her statement to this effect was controverted by other testimony. There is also testimony that she agreed to the settlement personally in open court. The trial court recited in his judgment that the parties announced in open court that they had agreed upon a property settlement. While appellant testified that she did not hear the settlement as it was dictated, she does not contend in her brief that she did not know that a property settlement had been agreed upon, nor is there a contention that the settlement as dictated varied from a settlement to which she had previously agreed. She contends that no agreement was made and that she desired a jury trial of property rights. It is without dispute that no such information was conveyed to the trial court prior to the announcement of his decision.

The trial court permitted appellant’s present attorney to make an investigation of the facts and to take depositions and thereafter heard the testimony appellant desired to present concerning the community property. He concluded that the agreement was fair and proper. After reviewing the statement of facts, we have reached the same conclusion.

The judgment of the trial court is affirmed.


author: LANGDON, Justice.

text:
    GLENS FALLS INSURANCE COMPANY, Appellant, v. C. C. PETERS, Appellee.
    No. 16524.
    Court of Civil Appeals of Texas. Fort Worth.
    May 22, 1964.
    Rehearing Denied June 19, 1964.
    Thompson, Coe, Cousins & Irons, and R. E. Cousins, Dallas, for appellant.
    Ernest May, Fort Worth, for appellee.
   LANGDON, Justice.

This is a suit upon a policy of fire insurance on a two-story garage apartment situated in the City of Fort Worth, Texas, which was damaged by fire on August 21, 1962, while the policy was in force. The appellee razed the remnants of the building and sued for the full amount of the policy contending that the provisions of Building Code No. 4155 and the Comprehensive Zoning Ordinance No. 3011 of the City of Fort Worth forbade repairs and thus a total loss was sustained constituting a liquidated demand for $7,500.00 pursuant to Article 6.13, Insurance Code of Texas, 1951, V.A.T.S.

Appellant filed a plea in abatement based upon refusal of appellee to comply with a demand for appraisal of loss as provided by the policy and defended on the merits. Trial was to a jury. By agreement the disposition of the plea in abatement was delayed pending trial. At the conclusion of the evidence the jury in response to the single issue submitted found that a reasonably prudent owner uninsured desiring to rebuild, “would have used the remnant of said structure for restoring said building.” Appellee’s motion for judgment notwithstanding the verdict was granted. The judgment specifically overruled the plea in abatement, awarded the total amount of the policy and contained three findings of fact as follows, (1) “* * * the Court finds that the fire damage to the plaintiff’s building at 1310 Alston Avenue exceeded fifty per cent, of its then physical value;” (2) “that he was ordered by the Housing Official to raze the building, and could have gained no permit for repair;” and (3) “that reconstruction was forbidden by the Zoning Ordinance.”

The appellant contends the court erred in overruling its plea in abatement and motion for judgment; in disregarding the jury’s findings and granting appellee judgment notwithstanding the verdict and in making findings of facts to support it; in finding total loss as a matter of law against clear language of the policy to the contrary; in admission of hearsay testimony over objection and on no evidence to support the Court’s finding that, “reconstruction was forbidden by the Zoning Ordinance.”

We affirm.

The appellant contended by pleading and proof that the building was not a total loss and that its liability was limited to the cost of restoring the building to as good condition as it was before the fire. There was evidence to support the jury’s finding. Thus, the building was not a total loss unless the ordinance and code referred to forbade its repair in which event the appellant sustained a total loss under the valued policy law, Article 6.13, Texas Insurance Code, 1951.

If the property is a total loss under the ordinance and code the appraisal provision is not effective under the terms of Article 6.13, Insurance Code of Texas, 1951 because since said article makes a fire insurance policy a liquidated demand upon a total loss nothing remains for appraisal.

There is no suggestion by pleading or proof that the amount of insurance carried by appellee was induced by fraud or deceit.

The controlling question to be resolved by this court is whether or not the application of the code and ordinance of the City to the facts of this case constituted a total loss as a matter of law.

On August 23, 1962 the fire damaged building was inspected by a Mr. Dunham of the City Building Inspection Division. His report reflected that the owner was contacted by letter and that a card was posted to raze the building.

Mr. J. A. Cooper, Housing Official for the City of Fort Worth, directed a letter to the appellee on the letterhead of the Building Inspection Division of the City on August 27, 1962. The letter based upon the inspection report of Dunham advised the building did not meet the minimum housing standards of Ordinance No. 4381 and requested the building be razed in compliance with the ordinance within 30 days and the premises cleared of all debris or else be cited to appear and show cause why the building should not be declared a nuisance and condemned. A second notice to the same effect was mailed to appellee on October 1, 1962 extending to November 1, 1962 the deadline for compliance with the previous order.

Mr. Cooper testified that Mr. Dunham who made the original inspection did so under his supervision.. That a copy of Dun-ham’s report was sent to the owner and a copy filed in the permanent records of his. department. Mr. Cooper testified without qualification that he would not have recommended a building permit because Dunham,, the inspector, showed “raze” only in checking his report. He further testified that his office did not have authority to either issue or deny permits for building or repair work. That the department responsible for issuance of such permits checked with his office on application for permits: involving buildings damaged by fire and' that a recommendation of his office to raze-rather than repair had never been overruled by the building commissioner.

Mr. A. B. Baker, a witness called by the-appellant, is a contractor in Fort Worth, who for 50 years has done mostly residence work. For the past 18 years he has engaged in the repair and remodeling of homes damaged by fire or otherwise and in making estimates for fire insurance adjusters and others. He prepares bids for the purpose of doing repair work on the basis thereof. Mr. Baker inspected the-building in question and made a repair bid on it. On cross-examination he stated he made no effort to get a permit to repair or build because he “knew it couldn’t be put back,” because the “City won’t allow it.” Thus, Mr. Baker knew from his own. vast experience that although in his opinion the building in question could be repaired the City would not permit it.

Mr. C. A. Cockrell, City Building Inspector, inspected the building in question about August 22, 1962 and testified it sustained around 75% damage. He prepared a report but it was lost or misfiled by the City. A Mr. W. J. Thompson, a man of 20 years’ employment with various lumber yards and experienced in estimates and appraisal, stated the building was 75% damaged. Fred W. Murphree, an architect, testified the building was a 100% loss. He later qualified his statement by saying that possibly 15% of the material might have been salvaged.

The report of Mr. Dunham’s inspection was rather detailed and reflected consider.able damage as did the testimony of Mr. Cockrell whose report of his inspection was “misfiled” by the City. The expert witnesses, Thompson and Murphree, by their testimony corroborated the findings of the two inspectors for the City.

Section 104 of the Building Code Ordinance No. 4155 reads: (a) “Buildings or structures to which additions, alterations or repairs are made shall comply with all requirements for new buildings or structures except as specifically provided in this Section.” (c) “If an existing building is damaged by fire, deterioration or other causes in excess of fifty percent of its then physical value before such damage is repaired, it shall be made to conform to the requirements of this code for new buildings.”

It was upon the basis of this ordinance that Mr. Dunham following his inspection recommended in his report which was filed as a permanent record of the City that the building be razed. It was this report that appellant objected to as being hearsay as to Mr. Cooper because the latter upon the basis of Mr. Dunham’s report wrote the letter of August 27, 1962 to appellee requesting him to raze the building in 30 days. We believe the reports and testimony concerning same were admissible under article 3731a, § 1, Vernon’s Ann.Tex. Civ.St. Cooley v. Texas Department of Public Safety, Tex.Civ.App., 348 S.W.2d 267; Chauvin v. Superior Fire Ins. Co., 283 Pa. 397, 129 A. 326.

No question is raised as to the power of the City to enact its building code nor its power under the general laws to condemn and order removal of the burned apartment. The City Council could delegate administration of the building code and related ordinances to its building commissioner who in turn could delegate to his housing official. We must, therefore, in the absence of proof to the contrary or allegations and proof of fraud presume that Mr. Cooper was acting within his authority and not in excess thereof when he ordered the building razed. 23 Tex.Jur.2d 125, § 82 and authorities cited. On pages 125, 126 of the same text it is stated: “Furthermore, if the act is such as the officer is generally authorized to perform, the existence of facts prerequisite to the taking of the action will also be presumed, provided, of course, that there is no evidence to the contrary.” Thus in the absence of evidence to the contrary it will be presumed that the property in issue was situated in “D” zoning and affected by the ordinance relating thereto.

In a further attack upon the second finding of the court to the effect that appellee was ordered to raze and could have gained no permit for repairs the appellant refers to portions of the letters from the City to appellee reading, “Be sure to obtain a building permit before making any repairs to the dwelling or a wrecking permit before tearing the dwelling down”, and “you were given thirty days in which to have the building razed or repaired,”- — Mr. Cooper testified in effect that the letters were printed forms and by some oversight the reference to “repairs” and “repaired” were not crossed out. It appears rather obvious that where one is ordered to “raze” he does not have the alternative to repair and that under such directions appellee could only obtain a wrecking permit. The appellant’s witness, Baker, was apparently aware of •this when he testified in essence that the City would not allow the building to be put back.

The appellee was under no obligation to appellant to contest the finding of the building commissioner. Larkin v. Glens Falls Ins. Co., 80 Minn. 527, 83 N.W. 409; Lux v. Milwaukee Mechanics’ Ins. Co., 221 Mo.App. 999, 295 S.W. 847; New Orleans Real Estate M. & S. Co. v. Teutonia Ins. Co., 128 La. 45, 54 So. 466. In the Louisiana case it was written: “The action of the city engineer was presumably right. The real parties having an interest to contest it were * * * the defendant companies. The defendants had no right to require plaintiff to pull the chestnuts out of the fire for them; to play buffer between them and the city authorities.”

In Larkin v. Glens Falls Ins. Co., supra, the Minnesota Supreme Court expressed uncertainty whether Glens Falls was barred by the finding of the building inspector, but declared the rule of evidence that should prevail here: “ * * * whether the determination of the inspector * * * is final or not, we need not determine. In any event, the decision * * * should be disturbed only upon very clear grounds. * * * The burden to overturn it was upon the defendant, because the defendant .alone called it in question. * * * the only evidence offered by the defendant * * * was the estimate of the cost of repairing the building, which was made by a builder soon after the fire. Such evidence * * * would be insufficient, standing alone as it does, to overturn the judgment of the inspector.” The case further held that pleading and proof of fraud was necessary to circumvent the ruling of the city building inspector.

The appellant argues that the decision in the case of Scanlan v. Home Ins. Co., Tex.Civ.App., 79 S.W.2d 186, has no application to the facts of this case because the ;policy here involved contains the provision that: “without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, * * * ” which provision was devised by the framers of the policy to avoid the legal effect of the Scanlan decision. In the Scanlan case the phrase was: “ ‘This Company shall not be liable * * * beyond the actual value destroyed by fire, for loss occasioned by ordinance or law regulating construction or repair of buildings * * *.’ ” We believe the decision in the Scanlan case applies with equal force to the policy here involved in holding, “(the stipulation) has reference to cases where the loss of the insured property is partial only and not to cases of total loss to which the valued policy law is applicable. But, conceding that the intent of the stipulations was to so contract against the effect of the laws and ordinances as to render partial a fire loss which otherwise would be total, thus limiting the liability of the insurer, such stipulations are ineffectual for such purpose. Being in contravention of the statute, they are void.” 79 S.W.2d 186, p. 189. The opinion continues, “The business of insurance is of public concern and therefore subject to strict regulation and control by the state. Hence the rights of parties to contract with respect to insurance are limited by the laws of the state which are a part of every such contract. And any stipulation in an insurance policy which contravenes the statute is void. Export Ins. Co. v. Axe (Tex.Com.App.) 58 S.W.(2d) 39, 40; Reliance Ins. Co. Philadelphia v. Nichols (Tex.Civ.App.) 56 S.W.(2d) 479.” In the Axe case, supra, it was held, that recovery for fire loss must be measured by the valued policy law “ ‘which provides that a fire insurance policy, in case of a total loss by fire of property insured, shall be held to be a liquidated demand against the company for the full amount of the policy, and the purpose thereof was to make all such policies, in cases of total loss, valued policies without reference to stipulations contained in them, which would give them a different character but for the statute which becomes a part of every such contract.’ ” Scanlan v. Home Ins. Co., Tex.Civ.App., 79 S.W.2d 186, 189.

Under the facts, of this case the appellee sustained a total loss of his building when he was ordered to raze and in effect was forbade the right to rebuild. Under such circumstances the policy became a liquidated demand for the entire amount thereof under the valued policy law, Art. 6.13, Insurance Code of Texas, 1951. All of the appellant’s points of error are overruled and the judgment of the trial court affirmed.

Affirmed.


text:
    Hyman E. FINGER et al., Appellants, v. The HOME INSURANCE COMPANY OF NEW YORK et al., Appellees.
    No. 14378.
    Court of Civil Appeals of Texas. Houston.
    May 28, 1964.
    Rehearing Denied June 18, 1964.
    Baker, Botts, Shepherd & Coates, Walter E. Workman, Houston, for appellant.
    Bryan & Patton, Chilton Bryan, Julietta Jarvis, Houston, for appellees Home Ins-Co., North British & Mercantile Ins. Co-Ltd., and Fidelity and Guaranty Ins. Underwriters, Inc.

      Fulbright, Crooker, Freeman, Bates & Jaworski, Charles D. Boston, Houston, for appellees Pacific Indemnity Co. and Niagara Fire Ins. Co.
    Oldham and Lorance, Tom Lorance, Houston, for appellee Northwestern Mut. Ins. Co.
   COLEMAN, Justice.

This is an appeal from a summary judgment. The basis of appellees’ motions for summary judgment is that appellants knew before the date of the fire in question that a change in the ownership of the property insured had taken place and that they failed to give notice of such change to appellees. If this allegation is correct, there is no controversy but that appellees are relieved of liability by reason of certain provisions in the insurance policies involved. In their petition appellants alleged that they did in fact notify the defendants, through their agents, that a change in ownership of the property had occurred. Appellees supported their motion for summary judgment with an affidavit denying notice. Both parties rely on deposition testimony.

Appellants owned a promissory note on a tourist court, secured by a deed of trust. The premises were insured in a greater amount than could be secured from one company. The risk was divided among a number of companies. Appellants purchased the greater part of the insurance through the Mulloy Insurance Agency represented by Henry Brand.

The appellees do not occupy identical positions. The Home Insurance Company of New York, The Pacific Indemnity Company, The Niagara Fire Insurance Company, and the North British & Mercantile Insurance Company, Ltd., are represented in Houston, Texas by the local recording .agency of Lopp-Kilpatrick & Styner, and particularly by Parker S. Presley of that ■firm.

■ David W. Barg represented appellants in dealing with all of the insurance companies. He purchased one policy from Northwestern Mutual Insurance Company through their local recording agent, Lun-dy’s Insurance Agency. The other insurance company involved is the Fidelity & Guaranty Insurance Underwriters, Inc., whose agent was Robertson Insurance Agency. Barg testified that he notified only Lundy’s Insurance Agency and Mulloy Insurance Agency of the sale to Hastings B. Meadows prior to the fire. There is no testimony that appellants gave notice to any of the companies other than through Barg. No evidence was presented that notice was given Fidelity & Guaranty Insurance Company. The summary judgment was properly granted insofar as it concerns this company. There was -clearly raised an issue of fact as to whether notice was given to Lundy’s Insurance Agency and the summary judgment in favor of Northwestern Mutual Insurance Company must be reversed.

Appellants contend that the evidence raises an issue of fact as to whether Brand was an agent of the other companies. Barg placed the order for the insurance with Brand, who arranged with Presley for the insurance to be placed in companies represented by him. Barg had no dealings with Presley. The premium was paid to Brand, who forwarded it to Presley deducting one-half of the agent’s commission, which was the usual brokerage fee. The policies were sent to Brand, who delivered them to Barg. It is undisputed that the companies had no contract with Brand and no knowledge that he was involved in the transaction other than that imputed to them by reason of the fact that Presley was their agent. There is no evidence that Barg knew that Brand placed the insurance with companies he did not represent as local recording agent. Brand had no actual authority to represent these companies, and testified to facts showing that he was, in this transaction, merely an independent broker.

There is evidence, however, that after he was notified of the change in ownership, Brand had several conversations with Presley concerning the fact that one of the companies desired to reduce the amount of its coverage, and the necessity of placing a policy with another company. This policy was written in the North British Company effective October 5, 1961. The fire occurred October 12, 1961. After testifying that he did not notify Presley of the change in ownership prior to the fire, Brand stated that Presley probably learned about the change in ownership from him in one of the telephone conversations. Later he testified that he did not tell Presley who the new owner was, or instruct him to change the policy. He also stated that the telephone conversations might have been after the fire. Generally his testimony on this point might be characterized as being vague and unsatisfactory. The equivocal nature of his testimony, perhaps, was caused by being confronted with a memorandum of insurance issued by the North British Company bearing the date of the original policy, which showed Meadows as the insured. The original policy was issued to Lee W. Sharpless. Presley testified unequivocally that he had no knowledge from any source of the change in ownership. His testimony is unimpeached.

The burden rested on appellees to prove conclusively that they had no notice of the change in ownership. Noncompliance with conditions subsequent constitutes a matter of defense. Blue Bonnet Life Ins. Co. v. Reynolds, Tex.Civ.App., 150 S.W.2d 372, error ref.; Continental Ins. Co. of New York v. Nabors, Tex.Civ.App., 6 S.W.2d 151, error ref.

The burden of proving that there is no genuine issue as to any material fact rests upon appellees, and all doubts as to the existence of such an issue must be resolved against them. If the judgment must rest on the testimony of an interested witness and is of such a nature that it cannot be readily contradicted if untrue, an issue relating to the credibility of the witness is presented, and summary judgment is improper. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929; Taylor & Son, Inc. v. Arlington Ind. School Dist., Tex.Sup., 335 S.W.2d 371.

Presley was an interested witness. The testimony of Brand indicates that his memory concerning his conversations with Presley is dim. No one else would he in a position to give testimony concerning the telephone conversations. Presley’s testimony was not readily subject to contradiction. His testimony, therefore, does not conclusively establish the fact, but merely raises an issue of fact for determination by the court or jury. Taylor v. Arlington Ind. School Dist., supra. The trial court erred in granting a summary judgment to this group of appellees.

The judgment of the trial court is affirmed as to Fidelity & Guaranty Insurance Company, and is reversed as to all other parties and remanded for further proceedings.


author: COLLINGS, Justice.

text:
    FIRST STATE BANK OF WICHITA FALLS et al., Appellants, v. OAK CLIFF SAVINGS & LOAN ASSOCIATION et al., Appellees.
    No. 3874.
    Court of Civil Appeals of Texas. Eastland.
    May 22, 1964.
    Rehearing Denied June 12, 1964.

      Malone, Seay & Gwinn, Robert A. Gwinn, Coke & Coke, Jere D. Turner, Dallas, for appellants.
    Bailey & Williams, R. T. Bailey, Brun-didge, Fountain, Elliott & Churchill, L. E. Elliott, Dallas, for appellees.
   COLLINGS, Justice.

Oak Cliff Savings & Loan Association brought suit against the American Bank & Trust Company of Dallas, Texas, to recover funds paid on a forged indorsement. The American Bank & Trust Company, hereafter referred to as American Bank, brought a third party action, jointly and severally, against the First National Bank in Dallas, hereafter called First National and the First State Bank of Wichita Falls, hereafter called Wichita Falls Bank, alleging that the First National and the Wichita Falls Bank had guaranteed the forged indorsement on the check which had been paid by the American Bank. The First National also brought action against the Wichita Falls Bank on the ground that the indorsement on the check had been guaranteed by that bank. The Wichita Falls Bank brought a third party action against the forger of the check and sought judgment for any amount it might be required to pay by reason of the forged in-dorsement, and also brought a third party action against Oak Cliff Savings & Loan Association, hereafter referred to as Oak Cliff Savings, alleging that the loss for which the association sought recovery was caused' or contributed to by various negligent acts and omissions on the part of its officers and employees.

The trial court granted the motion of Oak Cliff Savings for summary judgment against American Bank for the amount of its loss with interest thereon, granted summary judgment in favor of American Bank against the First National and the Wichita Falls Bank for any sum that American Bank might be called upon to pay to Oak Cliff Savings. A similar summary judgment was entered for the First National against the Wichita Falls Bank. The court denied the Wichita Falls Bank any recovery against Oak Cliff Savings on its claim for contribution or indemnity but did grant judgment in favor of the Wichita Falls Bank against the forger of the check and her husband in the same amount as the judgment rendered against it.

Appellant Wichita Falls Bank presents points in which it is contended that the court erred in rendering summary judgment for Oak Cliff Savings against American Bank, in rendering judgment in favor of American Bank over against the First National and the Wichita Falls Bank, and erred in rendering judgment in favor of the First National over against the Wichita Falls Bank because appellant contends there were controverted issues of fact concerning (1) whether Oak Cliff Savings was negligent in not detecting the forgery of the indorsement in question, and (2) whether the person who indorsed the check was an “imposter in law”. Appellant Wichita Falls Bank also contends that the court erred in rendering judgment against it and in favor of Oak Cliff Savings on appellants’ third party action for indemnity or contribution because there were controverted issues of fact as to whether Oak Cliff Savings was negligent in not detecting the alleged forged indorsement in time to have prevented appellant from paying the check to the wrong person.

In 8 Tex.Jur.2d on page 451 it is stated:

“Generally, a bank may not charge against its depositor the payment of any check on the forged indorsement of the payee, or of paper bearing a forged indorsement.”

On page 452 of the same volume the exception to the above stated general rule is set out as follows:

“Consequently, a depositor may compel restitution of funds paid by a bank on a forged indorsement, unless his negligence or default has misled the bank.”

Appellants’ contention is that the instant case comes within the exception to the general rule as above set out. Appellant, First State Bank of Wichita Falls, contends that the record shows or at least raises an issue of fact upon the question of whether Oak Cliff Savings & Loan Association was negligent in not detecting the forgery of the indorsement in question.

It is undisputed that a person by the name of I. T. Grisham opened an account with Oak Cliff Savings in 1956, and that the association pursuant to its established policy required a signature card to be signed by I. T. Grisham and delivered a pass book to Grisham showing the amount of the account. Thereafter, I. T. Grisham died and Oak Cliff Savings, upon learning of his death, changed the name of the account to the “Estate of I. T. Grisham” but did not attempt to reflect such account name change on the savings’ pass book which had been issued to Mr. Grisham, and did not obtain a signature card from any one authorized to make deposits or withdrawals from said account. In about March 1961, Flora Grisham was appointed Independent Executrix of the estate of her husband I. T. Grisham and Oak Cliff Savings was furnished with letters testamentary granted by the Probate Court. Oak Cliff Savings thereupon changed the name of the account to “Flora Grisham, Independent Executrix of the Estate of I. T. Grisham”. However, no change was made on the savings’ pass book which had been issued to I. T. Gris-ham, deceased, and the association did not obtain from Mrs. Flora Grisham an authorized signature card. It is further undisputed that thereafter Flora Grisham, who was the Independent Executrix of her husband’s estate, had occasion to write a letter to Oak Cliff Savings on May 1, 1961, and that said letter remained at all times thereafter with the association showing a true and correct copy of the signature of said Flora Grisham.

Oak Cliff Savings had a checking account with American Bank & Trust Company in Dallas. The amount of the account which the Savings and Loan Association •owed to Flora Grisham, Independent Executrix, at the time material hereto was $5,669.05. At that time a Mrs. Perry T. Grisham, also referred to as Fredda B. Grisham, went to appellant Wichita Falls Bank and represented herself to be “Flora Grisham, Independent Executrix of the Estate of I. T. Grisham.” After some conversation with an employee of appellant Wichita Falls Bank a sight draft was prepared on Oak Cliff Savings with the amount left blank. Mrs. Perry T. Grisham signed the draft “Flora Grisham, Independent Executrix of the Estate of I. T. Grisham”, and the draft was sent direct to First National in Dallas for collection, which in turn presented the draft to appellee Oak Cliff Savings which refused payment thereon. The Savings and Loan Association did, however, after a telephone conversation with an employee of the Wichita Falls Bank •deliver to the First National Bank its •check drawn on the American Bank payable to the order of “Flora Grisham, Independent Executrix of the Estate of I. T. Grisham”, in the sum of $5,669.05, which was the exact amount that Savings & Loan Association then owed to the party whose name appeared as payee on the check. The First National forwarded this check to appellant Wichita Falls Bank and an employee of the latter bank personally delivered the check to Mrs. Perry T. Grisham. Mrs. Perry T. Grisham thereupon indorsed the check as follows: “Flora Grisham, Independent Executrix of the Estate of I. T. Grisham”. After Mrs. Perry T. Grisham had so indorsed the check appellant Wichita Bank indorsed the check by stamp as follows: “Deposited to the Credit of the within named payee First State Bank of Wichita Falls, Texas”. Appellant Wichita Bank then deposited the said sum of $5,-669.05 to the credit of the account of Mr. or Mrs. Perry T. Grisham. After the check had been so indorsed in the presence of an employee of appellant Wichita Bank and had been deposited to the account of “Mr. or Mrs. Perry T. Grisham”, appellant Wichita Falls Bank again indorsed the check as follows: “Pay to the order of any bank, banker or trust company, prior indorsements guaranteed, First State Bank, Wichita Falls, Texas”, and sent the check to First National in Dallas. The First National then indorsed the check guaranteeing prior indorsements and presented it to American Bank for payment. The American Bank & Trust Company paid the $5,669.05, to the First National Bank and charged the sum to the account of Oak Cliff Savings & Loan Association.

Thereafter, Flora Grisham, Independent Executrix of the estate of I. T. Grisham, contacted the Oak Cliff Savings and requested payment of the amount of her account. After being advised of the circumstances as above shown she executed an affidavit to the effect that the indorsement on the check made payable to her was a forgery. Thereupon the Savings & Loan Association paid Flora Grisham, Independent Executrix the amount of its indebtedness to her, advised American Bank that the indorsement on the check was a forgery and requested that bank to credit the association’s account with the sum which had been paid out on the forged indorsement.

Appellant Wichita Falls Bank indicated that it does not dispute the justness of the third party actions over against it as brought by the two Dallas banks, if in fact, Oak Cliff Savings should be entitled to recover from American Bank. Appellant Wichita Bank contends, however, that the Savings & Loan Association was not entitled to recover from American Bank because of negligence on the part of the Savings & Loan Association as alleged in appellants’ pleadings and as shown by fact issues presented in the record. Appellant Wichita Bank contends that the Savings & Loan Association was negligent in not obtaining proper signature cards after the death of I. T. Grisham and after Mrs. Flora Grisham was made Independent Executrix of her husband’s estate; that the Sayings & Loan Association was also negligent in not securing the pass book on such occasions and making corrections thereon showing the true owner of the account. Appellant Wichita Bank particularly contends that in view of the fact that Oak Cliff Savings had in its possession a letter from Mrs. Flora Grisham which bore her signature, that the association could readily have determined that the signature, both on the draft dated May 31, 1961 and the signature on the check dated June 31, 1961, were forged and that “Flora Grisham, Independent Executrix” was not the person who was attempting to withdraw the money from the account with the Savings & Loan Association. Appellant Wichita Bank also urges that it was negligence on the part of the Savings & Loan Association to fail to follow its practice to require a return of the pass book or an affidavit of its loss upon closing out an account. Appellant contends that each and all of the above alleged acts of negligence on the part of the Savings & Loan Association were the cause of or contributed to the loss of the money to the forger.

We overrule the point presented by Wichita Falls Bank contending that there was a controverted issue of fact concerning whether Oak Cliff Savings was negligent in not detecting the forgery of the indorsement in question. Oak Cliff Savings did not honor the draft first presented to it because of its policy in such matters. It had no duty to American Bank, First National or to Wichita Falls Bank to examine the indorse-ments on the draft or on its check. There is no evidence and no contention is made that Oak Cliff Savings did not notify American Bank, upon which the check was written promptly upon discovering the forgery. The controlling rule in such cases is indicated in Liberty State Bank v. Guardian Savings and Loan Association, 127 Tex. 311, 94 S.W.2d 133;

“A bank paid the check of its depositor upon a forged indorsement of the payee. The jury found the depositor negligent in not sooner discovering the forgery. The Court of Civil Appeals held that the depositor owed no duty to examine the indorsement, and could not therefore be charged with negligence for failure to do so. There was no question but that the depositor promptly notified the bank upon learning that the indorsement was forged. In rendering judgment for the depositor, the court merely reannounced and followed a rule of general acceptation, stated in 3 R.C.L. p. 535, § 165, in this language: ‘The duty imposed upon the depositor to examine his pass book and vouchers does not extend to an examination of the signatures of the payees on the returned vouchers, as it is the duty of the bank to determine the genuineness of a payee’s indorsement, and the depositor is not expected to know his signature, and the fact that an agent in the employ of the depositor has forged the payee’s indorsement does not affect the rule’ ”.

The Liberty State Bank case has subsequently been cited by our Supreme Court with approval. See Liberty Mutual Insurance Company v. First National Bank in Dallas, 151 Tex. 12, 245 S.W.2d 237; Republic National Bank of Dallas v. Southern Brokerage Company, Tex.Civ.App., 338 S.W.2d 295. We also hold as a matter of law that the failure of Oak Cliff Savings to follow its usual practice of requiring a return of the pass book or an affidavit of its loss was not such negligence as to constitute a defense for any of the defendant banks.

We also overrule appellants’ contention that the court erred in rendering the summary judgment because there are fact issues in the case concerning whether Fred-da B. Grisham, who indorsed the check in question was an “imposter in law” in that she was the person to whom Oak Cliff Savings actually intended the check to be delivered. The rule in such cases is correctly-stated in appellants’ brief as follows:

“Where a check is delivered to an imposter as payee and the drawer believes that the imposter is the person upon whose endorsement it will be paid, the endorsement by such imposter in the name which he is using to impersonate another is not a forgery.
“See: First National Bank [in Houston] v. Whitaker [136 Tex. 117], 147 SW (2) 1074, (S.Ct); Employer’s Casualty Co. v. National Bank of Commerce [140 Tex. 113], 166 SW (2) 691 (S.Ct.); General American Life Insurance Co. v. National Bank of Commerce of San Antonio, 348 SW (2) 393 (CCA) and authorities cited at p. 395; Schweitzer v. Bank of America [42 Cal.App.2d 536], 109 P. (2) 441 (Cal.) ; Halsey v. Bank of New York & Trust Co., [270 N.Y. 134] 200 N.E. 671; Atlantic National Bank of Jacksonville, Florida v. U. S., 250 F. (2) 114 (CA 5th).”

The undisputed facts show that the only contact with Mrs. Perry T. Grisham was by the Wichita Falls Bank. The check drawn by Oak Cliff Savings was made payable to “Flora Grisham, Independent Executrix of I.T. Grisham”, and Oak Cliff Savings had no contact whatever with Mrs. Perry T. Grisham and did not deliver the check to her. No fact issue is raised which would support a finding that Oak Cliff Savings intended for the check to be delivered to Mrs. Perry T. Grisham or to any person other than Flora Grisham, Independent Executrix of the Estate of I. T. Grisham. On the contrary, the Wichita Falls Bank delivered the check to Mrs. Perry T. Grisham, obviously believing that she was Flora T. Grisham, Independent Executrix, to whom the check was payable. The Wichita Falls Bank secured her forged indorsement on the check and then deposited the money to her credit.

Appellants’ points are overruled and the judgment of the trial court is affirmed.


author: CHADICK, Chief Justice.

text:
    Dorothy Giberson CROOM, Guardian, Appellant, v. Pauline COCHRAN, Appellee.
    No. 7575.
    Court of Civil Appeals of Texas. Texarkana.
    May 19, 1964.
    Rehearing Denied June 16, 1964.

      Jack F. Cook, Jr., Austin, for appellant.
    Barber & Seale, Jasper, for appellee.
   CHADICK, Chief Justice.

This is a Workmen’s Compensation Law suit. The trial court judgment awarded benefits accruing by reason of the death of a workman and adjudicated the contest between rival claimants of the benefits. The judgment of the trial court is affirmed.

The parties in this court are the appellant, Dorothy Giberson Croom, Guardian of the estate of Wilbert Leo Ellis, a surviving child of the deceased workman, Louis Magee Ellis, and the appellee, Mrs. Pauline Cochran, a widow, likewise a surviving child of Louis Magee Ellis. A single question of law is presented by the appeal; issue is joined by the parties upon the question as it is stated in the appellant’s brief, to-wit:

“Was Wilbert Leo Ellis, mentally incompetent and a student at the Travis State School for the mentally retarded, a dependent child of Louis Magee Ellis under the Workmen’s Compensation laws at the time of the latter’s death ? ”

In January, 1961, shortly after his mother’s death, Wilbert Leo Ellis, then twenty-three or four years of age, was placed by his father in the Austin State School for the mentally retarded. Before this he was a constituent of his father’s family and the recipient of his father’s care and support. At the time of his father’s death in October, 1961, this child had “an I. Q. of about 14”, and a “mental age of about four years”. His mental retardation dated from birth, he was born a “mongoloid”, and was “unable to carry on a conversation with anyone outside his family, * * * about all he was able to do was feed and dress himself”. His affliction prevented him from working or earning a livelihood, and he had no property, income or independent means of support.

When the adult child was placed in the school, a State operated institution, the father executed a contract obligating himself to pay the school $45.00 per month for his child’s support, maintenance and treatment When the father’s death occurred October 22, 1961, the agreed monthly payments had not been made by the father, nor had the father or any other member of the Ellis family furnished money, food or clothing for the child or in anywise discharged the obligation of the contract, though it had not been altered or terminated. In the twelve month period preceding death the father earned approximately $4,000.00.

A sister of the retarded child, Mrs. Dorothy Ellis Dunn, applied for and received Social Security payments for the child’s benefit. At trial time the Social Security Administration had allotted a sufficient amount to pay, and Mrs. Dunn had paid the school, $45.00 for each elapsed month subsequent to the death of the father.

The law, Art. 8306, Sec. 8a, Vernon’s Ann.Tex.Civ.St., affords minor children of deceased workmen participation in compensation benefits accruing as the result of the workmen’s death. The same statute provides that children not minors are also entitled to compensation if they are in fact dependent upon the deceased workman. The child, Wilbert Leo Ellis, is not a minor, but was 23 or 24 years of age at the time of his father’s death. In this case, if as a matter of law, this adult child is a dependent in the sense that term is used in Art 8306, Sec. 8a of the Workmen’s Compensation Law, such finding must rest upon the evidence of dependency being so harmonious and consistent that reasonable minds would not differ in reaching that conclusion. See 1 Texas Law of Evidence (McCormick & Ray), p. 8, Sec. 4, where the rule is expressed in these words, “Where the evidence is of such character that there is no room for reasonable and ordinary minds to differ as to the conclusion to be drawn from it the court not only may but has a duty to direct a verdict.”

What are the facts that must he proven to establish an adult child as a dependent? In Texas Employers Ins. Ass’n v. Arnold, 127 Tex. 245, 92 S.W.2d 1019, op. adpt., it is said:

“Much has been written on the question of who is a dependent under Workmen’s Compensation Laws. Exhaustive annotations on the subject may be found in American Law Reports. The first annotation appears in 13 A.L.R. 686, and supplements appear in 30 A.L.R. 1253, 35 A.L.R. 1066, 39 A.L.R. 313, 53 A.L.R. 218, 62 A.L.R. 160, and 86 A.L.R. 865. In determining questions of dependency, courts as a rule merely outline the elements thereof without undertaking to formulate exact definitions, but the idea inheres in the term itself that the relation must be such that one relies for support, in part at least, upon the aid of another. In Rock Island Bridge & Iron Works v. Industrial Commission, 287 Ill. 648, 122 N.E. 830, 831, this definition is given: ‘In law a dependent is one who is sustained by another, or relies for support upon the aid of another; who looks to another for support, and relies on another for reasonable necessaries consistent with the dependent’s position in life.’ ”

The relevant evidence is summarized above. When the evidence is measured by the standard quoted it appears that the question of Wilbert Leo Ellis’s dependency was one of fact, rather than of law, and the trial court action in submitting it for jury determination was proper.

When the father of the adult child placed it in a publicly supported institution and thereafter for the remainder of the father’s life — a period of more than nine months— furnished no support whatever for his child it may reasonably be concluded that the father abandoned support when the school accepted the child. Among the elements of dependency noted in the quotation above is that of being sustained by another. It is uncontroverted that the father did not furnish anything for the sustentation of the child after it was placed in the school. The father’s contractual obligation, voluntarily undertaken, and the liability imposed by Art. 3196a upon the father to pay the expense of the adult child’s maintenance at the school, if able to do so, are evidentiary factors to be weighed along with the other evidence in determining dependency. The evidence is capable of supporting a conclusion other than that the adult child was a dependent of the father at the time of the father’s death.

The judgment of the trial court is affirmed.