author: MOORE, Justice.

text:
    Mrs. Bertie May PIERCE et al., Appellants, v. CITY OF JACKSONVILLE et al., Appellees.
    No. 200.
    Court of Civil Appeals of Texas. Tyler.
    May 12, 1966.
    Rehearing Denied June 9, 1966.

      M. M. Guinn, Rusk, Donald Carroll, Ramey, Brelsford, Flock & Devereux, Tyler, for appellants.
    Wm. Emerson Stone, Jr., Stone & Stone, Jacksonville, for appellees.
   MOORE, Justice.

Appellants, heirs of the estate of W. E. Pierce, brought this suit against the City of Jacksonville, its Mayor, City Commissioners, Tax Assessor-Collector and Board of Equalization, seeking an injunction against the collection of city ad valorem taxes assessed against properties owned by the estate for the years of 1961, 1962 and 1963. The suit was brought after city-wide valuations had been fixed and adjusted by the Board of Equalization for all years in question. As a basis for injunctive relief, appellants alleged that the values placed upon their properties by the Board of Equalization were so grossly in excess of the reasonable cash market value of the properties that such valuations amounted to a legal fraud upon the appellants and were therefore void under the provisions of Article 8, Sec. 20, Vernon’s Ann.Texas Constitution. They further alleged that the formula or method used by the Board of Equalization in arriving at the value of their properties was based upon a fundamentally erroneous plan or scheme of valuation resulting in substantial injury to them and that the assessments, for this additional reason, were void. Appellants tendered into court the amount of taxes due upon their properties in accordance with the values which they had theretofore rendered to the Tax Assessor-Collector, and prayed for a judgment voiding the assessment of taxes by the Board of Equalization and to require the City to accept the sum tendered by them, and for an injunction restraining the City from the collection of taxes based on said assessments.

The City of Jacksonville answered by a general denial and by a cross-action sued appellants for the taxes, which in the meantime had become delinquent, and prayed for a judgment foreclosing the tax lien.

Trial was before a jury at the conclusion of which the trial court submitted to the jury six Special Issues, each of which required the jury to find the fair cash market value of each of the six items of property involved in this controversy, for the years 1961, 1962 and 1963. In all issues, except one, the jury found the fair cash market value to be less than that set by the Board of Equalization for each of the years of 1961, 1962 and 1963.

The trial court denied appellants’ injunc-tive relief, but found some of the assessed values to be so grossly excessive as to require cancellation. On those not found to be grossly excessive, the court entered judgment for the appellee, City of Jacksonville, on its cross-action for the taxes based upon the valuation found by the Board of Equalization. Where the assessed value was found to be grossly excessive, the assessment of the Board of Equalization was can-celled without prejudice to the right of the taxing authority, City of Jacksonville, to either (1) accept taxes from the plaintiffs on the basis of the renditions for the years 1961, 1962 and 1963; or (2) take the matter back before a Board of Equalization for a new assessment in accordance with Article 7346, Vernon’s Ann.Tex.Civ.St. The following table, which was prepared by ap-pellees, identifies the tracts of real property and items of personal property for each of the years in question, the assessed values, the findings of the jury, the court’s action thereon, and the percentages of the jury’s findings as it relates to the assessed value of the Board of Equalization, and will be helpful in understanding the ruling of the trial court.

Tax Year Assessed Value Jury Findings Court’s Action Percentage of Jury to Assessed Value

Tract 1 1961 $18,550 $14,000 Assessment Cancelled 75.47%

1962 16,182 14,000 Assessment Upheld 86.51%

1963 16,182 14,000 Assessment Upheld 86.51%

Tract 2 1961 16,290 8,000 Assessment Cancelled 49.10%

1962 15,004 8,000 Assessment Cancelled 53.31%

1963 12,379 6,875 Assessment Cancelled 55.00%

Tract 3 1961 15,250 13,500 Assessment Upheld 88.52%

1962 15,250 13,500 Assessment Upheld 88.52%

1963 15,250 13,500 Assessment Upheld 88.52%

Tract 4 (Moot because of subsequent sale and payment of taxes).

Item 5 1961 21,726 8,464.40 Assessment Cancelled 38.95%

1962 10,095 8,769.52 Assessment Upheld 86.86%

1963 13,640 9,753.62 Assessment Cancelled 71.50%

Item 6 1961 778 500.00 Assessment Cancelled 64.26%

1962 778 500.00 Assessment Cancelled 64.26%

1963 500 500.00 Assessment Upheld 100%

Appellee, the City of Jacksonville, concedes that the action of the trial court can-celling the assessments as shown by the above table was proper.

The taxpayers perfected this appeal contending, among other things, that the trial court erred in refusing to enjoin the City from the collection of the taxes, penalty and interest, in view of the jury’s verdict showing that values set by the Board of Equalization were in excess of the fair cash market value. Since the assessed value exceeded the fair cash market value, they reason that the assessment of taxes based thereon would be void because of Article 8, Sec. 20, of Vernon’s Ann.Texas Constitution, which provides as follows:

“No property of any kind in this State shall ever be assessed for ad valorem taxes at a greater value than its fair cash market value nor shall any Board of Equalization of any governmental or political subdivision or taxing district within this State fix the value of any property for tax purposes at more than its fair cash market value; * * * ”

Appellants point out in their brief that they do not attack the validity of the assessments on the basis of some alleged inequality as to the taxable values when compared with other properties located within the taxing district, nor do they contend that this is a case wherein the taxpayer is seeking to set aside the taxation of certain properties because of the omission of other properties from taxation, thereby increasing the taxable burden upon their properties. They say that this is a case wherein both the values upon which taxes were levied, and the manner of arriving at those values, are attacked.

Appellants take the position that judgment for taxes based on the Board’s value is erroneous in that it violates the above provision of the Constitution directing that no taxes may be levied based upon a value at more than fair cash market value. They contend the court erred in refusing to enjoin the City from enforcing taxes, penalty and interest rendering judgment for taxes based upon a value in excess of the fair cash market value as found by the jury.

It is now well settled that the assessment of property for tax purposes is a quasi-judicial function of a Board of Equalization and that no attack on valuations fixed by such Board can or will be sustained in the absence of proof of fraud, want of jurisdiction, illegality, or the adoption of an arbitrary and fundamentally erroneous plan or scheme of valuation. State v. Houser, 138 Tex. 28, 156 S.W.2d 968, 970, 971; Druesdow v. Baker (Tex.Com.App.), 229 S.W. 493, 495. Moreover, when their official action is attacked it will be presumed that such Boards discharged their duties as public agencies according to law and acted in good faith. Zachary v. City of Uvalde (Tex.Com.App.), 42 S.W.2d 417; Lubbock Hotel Co. v. Lubbock Independent School Dist. (Tex.Civ.App.), 85 S.W.2d 776, no writ; Hinkson v. Lorenzo Independent School Dist. (Tex.Civ.App.) 109 S.W.2d 1008, writ dism.

While it has been held that a grossly excessive valuation may, in law be sufficient to establish such fraud or illegality as to render a valuation void, Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71, writ denied; City of Sweetwater v. Biard Development Co. (Tex.Civ.App.), 203 S.W. 801, no writ; Simkins v. City of Corsicana (Tex.Civ.App.), 86 S.W.2d 792, no writ; Howth v. French Independent School Dist. (Tex.Civ.App.), 115 S.W.2d 1036; French Independent School District of Jefferson County v. Howth, 134 Tex. 211, 134 S.W.2d 1036, it is held with equal emphasis that mere errors in judgment, or the fact that a trial judge or jury differs with the valuation fixed, will not suffice as a basis for voiding the Board’s action. Simkins v. City of Corsicana, supra; Druesdow v. Baker, supra; State v. Houser, supra; State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569.

As shown in the table above, in each instance where the trial court found the valuation placed on the property by the Board was grossly excessive, the assessments were cancelled. In other instances, although the values as set by the Board were in excess of the fair cash market value, the court determined that the values were not so excessive as to render those values unconstitutional and void, and therefore rendered judgment for the taxes based thereon.

In passing upon the question of the procedure to be followed when the assessed valuation of property is found to be grossly excessive, the Supreme Court of this state in Whelan v. State, 155 Tex. 14, 282 S.W.2d 378, said:

“If the answers of the jury show that the assessed valuation of petitioners’ properties is grossly excessive, * * * the assessments of petitioners’ properties for the years 1950, 1951 and 1952 should be cancelled without prejudice to the right of taxing authorities to accept petitioners’ taxes on the basis of the valuations at which petitioners rendered their properties or to proceed under the provisions of Article 7346, V.A.C.S. * * ”

With respect to the values which were found to be grossly excessive, the trial court cancelled the assessments and followed the procedure suggested by the Supreme Court, hence we find no error in this respect.

Admittedly, that portion of the judgment allowing a recovery for taxes was based upon assessed values which were in excess of the cash market value as found by the jury. However, if the Board’s values cannot be said to be grossly in excess of the jury’s finding, the Board’s findings would not be void. In Whelan v. State, supra, the court said:

“ * * * If an issue on excessive valuation of petitioners’ properties — as distinguished from an unequal valuation thereof — is submitted, cancellation of the assessments should not follow unless the finding shows the assessed valuations to be grossly excessive, Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71, writ denied; State v. Houser, 138 Tex. 28, 156 S.W.2d 968, as distinguished from a mere difference in opinion or error in judgment, State v. Houser, supra; Simkins v. City of Corsicana, Tex.Civ.App., 86 S.W.2d 792, no writ history. * * * ”

In cases such as this, where it is contended that the valuations are excessive, the court hears and considers evidence as to value for the purpose of determining whether the property has been so grossly overvalued as to result in harm or injury to the complainant. Montgomery County v. Humble Oil & Refining Co. (Tex.Civ.App.), 245 S.W.2d 326.

Before the valuation can be said to be grossly excessive,' the assessed value must be so far above the fair cash market value as to shock a correct mind and thereby raise a presumption that the valuation was fraudulent or does not represent a fair and conscientious effort on the part of the Board to arrive at the fair cash market value. Richardson v. Kent (Tex.Civ.App.), 47 S.W.2d 420; Lubbock Hotel Co. v. Lubbock Independent School Dist., supra.

A reasonable discrepancy between the true value of the property and the value at which it is assessed for taxes is permissible to cover a difference in opinion or judgment. Dallas County v. Dallas Nat. Bank, 142 Tex. 439, 179 S.W.2d 288; Darby v. Borger Independent School District (Tex.Civ.App.), 386 S.W.2d 572.

That portion of the judgment allowing a recovery for a portion of the taxes based upon the Board’s assessment rests upon the implied finding that the discrepancies in valuations were reasonable discrepancies and amounted to no more than a mere difference of opinion. These differences in our opinion, are not so great as to create a presumption of fraud on the part of the Board as a matter of law. The values set by the Board of Equalization thus not being void, we find no error in the ruling of the trial court allowing a recovery of taxes based thereon.

The appellants next contend that the court erred in failing to grant their motion for judgment and in granting the City a judgment for taxes based upon a portion of the Board’s assessments because they contend that the uncontradicted and undisputed evidence shows that the Board did not call before it witnesses or receive any evidence as to the market value of appellants’ property and the city was therefore compelled to accept the rendered value as a basis for taxation.

In this connection, the undisputed evidence shows that at all times during the equalization process and at the time of the assessment, the Board was accompanied by the members of the Industrial Appraisal Engineers, who supplied the Board with their information concerning the property, as well as their opinion of the market value thereof. The evidence further' shows that in some instances the Board made adjustments in the appraisals upon complaint by the taxpayers. In 1962, upon complaint of the appellants, the Board made some adjustments in their valuations. By and large, most of the appraisals furnished by the Industrial Appraisal Engineers were adopted by the Board in assessing taxes throughout the City. The testimony of the Board members reveals that most of them were familiar with appellants’ property and that they, to some extent at least, took into consideration their general knowledge of appellants’ property in arriving at the market value.

It is the settled law in this state that a Board of Equalization, being a quasi-judicial and not a judicial body, is not bound by the ordinary rules of evidence, but that it is allowed a broad latitude in determining the value at which property is to be assessed for taxing purposes and that in determining these valuations, it may take into consideration any fact or circumstance which tends to show such value. The members of the Board may consider their own experiences and knowledge of the particular property and of values generally. Exporters & Traders Compress & Warehouse Co. v. City of Marlin (Tex.Civ.App.), 130 S.W.2d 860; Lamar County Electric Cooperative Ass’n v. Red River County (Tex.Civ.App.), 170 S.W.2d 579.

We must presume that the Board discharged their duties according to law and based their judgment either upon their own knowledge or the evidence presented by their appraisers. State v. Whit-tenburg, supra. The evidence presented in this connection is not thought to be sufficient to overcome the presumption.

Appellants insist that the portion of the judgment allowing a recovery for the taxes is void because the assessed value was arrived at by the use of a fundamentally erroneous plan or scheme of evaluation. In this connection appellants assert that the evidence conclusively establishes that the Board adopted the appraisal of the Industrial Engineers in toto without regard to the market value. Based upon this premise, they take the position that the appraisal value furnished by the Industrial Engineers was not based upon market value, but was based upon the market value of the land plus reproduction costs of improvement less depreciation. Thus, they contend that the value of their land, as well as all other land in the City, was arrived at by an arbitrary scheme. They conclude that since the value placed upon their lands was found to be in excess of the market value, they have shown that the scheme caused them substantial injury as a matter of law.

This suit was filed by appellants for in-junctive relief to avoid the payment of taxes long after the valuations of the Board of Equalization were already made. Though the record does not, in our opinion, show an arbitrary and illegal scheme of taxation, even if it did, relief by injunction was subsequent to the time that such alleged arbitrary and illegal scheme was put into effect and after the other taxpayers had presumably paid their taxes for several of the years involved, and under the settled law of this state, appellants assumed the onerous burden of establishing facts showing substantial injury. City of Arlington v. Cannon, 153 Tex. 566, 271 S.W.2d 414; State v. Whittenburg, supra; Darby v. Borger Independent School District, supra.

In State v. Federal Land Bank of Houston, 160 Tex. 282, 329 S.W.2d 847, the Supreme Court of this state held that proof of substantial injury means that the taxpayer must prove that his taxes in dollars and cents are substantially higher by virtue of the alleged arbitrary plan or scheme of taxation.

The mere fact that appellants’ taxes were based upon an assessed value in excess of the market value would not, in our opinion, show substantial injury. In order to show that substantial injury resulted from the arbitrary plan or scheme, appellants would have the burden of making at least a reasonable showing that if all other property in the City had been assessed at market value, appellants’ taxes would have not only been less, but substantially less. In other words, the taxpayer has the burden of showing in dollars and cents that he is not only worse off, but substantially worse off as a result of the plan. City of Orange, Texas v. Levingston Shipbuilding Co., (5th Cir.) 1958, 258 F.2d 240. Appellants did not undertake to make such proof.

The remaining Points of Error have been considered and have been found to be without merit.

Accordingly, the judgment of the trial court denying the injunction and permitting recovery for taxes on those assessments found not to be grossly excessive is affirmed.


source: Caselaw Access Project

author: DIXON, Chief Justice.

license: Public Domain

text:
    The TRAVELERS INSURANCE COMPANY, Appellant, v. Coy L. SIDES, Appellee.
    No. 16717.
    Court of Civil Appeals of Texas. Dallas.
    April 15, 1966.
    Rehearing Denied May 20, 1966.

      Thompson, Knight, Simmons & Bullion, Frank Finn, Jr., and George C. Chapman, Dallas, for appellant.
    Yarborough, Yarborough & Johnson, Donald V. Yarborough, Dallas, for appellee.
   DIXON, Chief Justice.

Appellant The Travelers Insurance Company appealed to a district court from an award of the Industrial Accident Board. Appellee Coy L. Sides filed his Original Answer and Cross-Action in which he alleged compensable injuries resulting in total incapacity.

Following a jury verdict the court rendered judgment for appellee Sides for $35 per week for 401 weeks. The amount was based on an average weekly wage rate of $98.36.

The jury found that appellee had not worked at least 210 days during the year immediately preceding his injury (Special Issue No. 13); that there was not another employee of the same, class as appellee who had worked at least 210 days during said year (Special Issue No. 15) ; and that a fair and just weekly wage for appellee for said year would be $98.36 (Special Issue No. 17).

In its second, third and fourth points and in its eighth point appellant says that there were no proper pleadings to support the submission of Special Issues Nos. 15 and 17. We agree with appellant.

In his cross-action appellee’s pleading in regard to his wage rate was as follows:

“ * * * that at the time of said injuries his average weekly wage was $160.-00; that he is entitled to have his average weekly wages calculated at a figure of $160.00 and 60 per cent is in excess of $35.00 (the maximum amount provided bylaw).” (Italics ours.)

Appellant excepted to the italicized portion of the above pleading. The exception was sustained by the court. Appellee thereafter filed a supplemental answer and a trial amendment, but these additional pleadings contain no allegations pertaining to appel-lee’s average weekly wage rate. In that regard appellee’s only pleading remaining after the court sustained appellant’s exception and the pleading on which he went to trial is his allegation that “at the time of said injuries his average weekly wage was $160.00.” Appellee did not plead any of the three provisions of Article 8309, Section 1, Vernon’s Ann.Civ.Statutes which furnish the basis for computing a claimant’s average weekly wage rate.

Appellant objected to the submission of Special Issues Nos. 15 and 17 on the ground that there were no pleadings to support the submission of the issues; and to the submission of Issue No. 17 on the ground that it was submitted unconditionally without relation to the requirements of the Workmen’s Compensation Law in regard to the duty of appellee to negative Subdivisions 1 and 2 of Article 8309, Section 1. These objections were carried forward into appellant’s amended motion for new trial.

In Griffin v. Superior Ins. Co., 161 Tex. 195, 338 S.W.2d 415, 418, our Supreme Court said, “In order that plaintiff may recover under Subdv. 3, § 1, Art. 8309, it is necessary for the plaintiff to plead and prove facts that will prevent either Subdv. 1 or Subdv. 2 of this Article from applying.” (Emphasis added.) In Globe Indemnity Co. v. McClurg, 38 S.W.2d 125, 127 (Tex.Civ.App., error dism.) it was held that it is the duty of a claimant to plead the facts with reference to Subdivisions 1, 2 and 3 of Section 1, Art. 8309, V.A.C.S.; and his failure to do so makes his pleading subject to exceptions. See also Employers’ Liability Assurance Corp. v. Zobal, 21 S.W.2d 698 (Tex.Civ.App., no writ hist.) ; Federal Surety Co. v. Shigley, Tex.Civ.App., 7 S.W.2d 607; Rule 301, Texas Rules of Civil Procedure. Appellee’s pleadings do not support the submission of Special Issues Nos. 15 and 17.

Appellee argues that even if the issues are not raised by the pleadings but are tried by consent of the parties they are treated as if they had been raised in the pleadings and a failure to amend does not affect the result of the trial. Appellee cites Rule 67, T.R.C.P. and McKenzie v. Carte, Tex.Civ.App., 385 S.W.2d 520.

The situation in the McKenzie case, a nonjury trial, differs in material respects from the situation in this case. The rule applicable here is that stated by our Supreme Court in Harkey v. Texas Employers’ Ins. Ass’n, 146 Tex. 504, 208 S.W.2d 919:

“Certainly issues are not tried merely by the hearing of the testimony thereon; submission to the jury undoubtedly is part of the process. So, although the complaining party does not object to the testimony on the issues but does object to their submission on some tenable ground, he cannot be regarded as impliedly consenting that they be tried when not raised by the pleadings, as contemplated by Rule 67.”

Appellant’s second, third, fourth and eighth points are sustained.

In its seventh and tenth points appellant alleges that the court erred in entering judgment on the jury’s answers to Special Issues Nos. 15 (in regard to Subdivision 2) and 17 (in regard to Subdivision 3) because said answers were against the great weight and preponderance of the evidence. We agree with appellant.

Before appellant was entitled to rely on Subdivision 3 of the statute it was necessary for him to show that neither Subdivision 1 or 2 was applicable. With reference to Subdivision 1 the testimony was as follows:

“Q. In your carpenter work, in the year preceding July 8, 1963, this would be from July 8, 1962 to July 8, 1963, had you done carpenter work similar to this for as much as 210 days ?
“A. I doubt it.”

The above answer is not sufficient to negative Subdivision 1.

Though he had not leaped the hurdle interposed by Subdivision 1 appellee attempted to show that Subdivision 2 was not applicable in his case. The testimony pertaining to Subdivision 2 was as follows:

“Q. Well, why wouldn’t you have worked as much as 210 days in the preceding year ?
“MR. FINN: I am going to object to counsel arguing with his own witness; again leading and suggesting; he doesn’t like an answer, I submit to you, it is improper.
“THE COURT: Sustained. * * *
“MR. YARBOROUGH: Well, Your Honor, I think I can — excuse me, Your Honor, I think that I can show that it is relevant to something else to follow.
“THE COURT: Something else to follow?
“MR. YARBOROUGH: Yes, sir, under the second subdivision of the Compensation Act on wages.
“THE COURT: Somebody else?
“MR. YARBOROUGH: Yes, sir.
“THE COURT: Well, if you want to prove what somebody else did, all right.
“Q. (By Mr. Yarborough) Mr. Sides, what — will you tell the jury what the nature of carpenter work is such as you were doing with relationship — how continuous it is?
“A. Some homes will last approximately three months at a time to build; some remodel jobs may be one or more days.
“Q. Well, in a year’s time, in the year from July 8, 1962, to July 8, 1963, do you know of anyone in Dallas County or this vicinity, doing the same or similar work to that which you were doing, who worked as much as 210 days in that year?
“A. I do not.
“MR. FINN: We object, this question is improper, it is irrelevant and immaterial, it is not the test, Your Honor.
“THE COURT: Overruled.
“MR. FINN: Exception.
“Q. (By Mr. Yarborough) What was your answer to that?
“A. I do not know.
“Q. Will you tell us why you did not work as much as 210 days in the year immediately preceding July 8, 1963, at carpenter work—
“MR. FINN: Excuse me.
“Q. (By Mr. Yarborough) — in Dallas County or this vicinity?
“MR. FINN: Excuse me. I have the same objection, Your Honor, as previously made, it is irrelevant and immaterial, it is related to no issue and no inquiry, and it is leading and suggestive.
“THE COURT: I will let him testify in reference to Number 2. Go ahead.
“Q. (By Mr. Yarborough) Will you answer that, please, sir?
“A. There are several things. One is weather. The next is deliveries of material, and temporary caught-up between jobs.
“Q. Is it — will you tell the jury whether or not this is the prevailing condition for carpenters in this, that do the type of work you do ?
“A. Yes, sir.”

The above quoted evidence was insufficient to support the jury’s answer to Special Issue No. IS. This is especially true since appellee had not negatived Subdivision 1.

In Texas Employers’ Ins. Ass’n v. Ford, 153 Tex. 470, 271 S.W.2d 397, 399 our Supreme Court was confronted with a situation similar in some respects to that with which we are faced here. In the Ford case the testimony in regard to Subdivision 2 was as follows:

“ ‘Q. Do you know any of the employees who were working for Lay Construction at that time? A. Yes sir.
“ ‘Q. Do you know if any of those employees had worked for Lay Construction Co. for a period of a year preceding your accident? A. No sir.
“ ‘Q. Do you know if any employees in the same or similar employment in this neighborhood had been working for a year in that type of employment in which you were engaged ? A. No, sir.’”

The court held that the above evidence “clearly does not eliminate Subsection 2. The case should therefore be retried.” See also Indemnity Ins. Co. of North America v. Redic, 344 S.W.2d 936 (Tex.Civ.App. no writ hist.); Iowa Mutual Ins. Co. v. Redden, 326 S.W.2d 727 (Tex.Civ.App., Writ ref., n. r. e.); Superior Ins. Co. v. Griffin, 323 S.W.2d 607 (Tex.Civ.App.), affirmed Griffin v. Superior Ins. Co., 161 Tex. 195, 338 S.W.2d 415 (S.Ct.); Texas Employers’ Ins. Ass’n v. Hammond, 278 S.W.2d 503 (Tex.Civ.App., no writ hist.); Texas Employers’ Ins. Ass’n v. Roberts, 135 Tex. 123, 139 S.W.2d 80 (S.Ct.).

In his first counter point appellee argues that since appellant voluntarily paid weekly compensation to appellee at the rate of $35 per week for 18¾ weeks, which it has never challenged, the compensation rate was determined as a matter of law; and though issues were submitted to the jury, they were not necessary.

Appellee’s contention is contrary to holdings of our Supreme Court. Southern Underwriters v. Schoolcraft, 138 Tex. 323, 158 S.W.2d 991; Superior Ins. Co. v. Griffin, 323 S.W.2d 607 (Tex.Civ.App.). In the Griffin case Superior Insurance Company had voluntarily paid the claimant $35 per week for 22 weeks. The Court of Civil Appeals held that by making said payments Superior Insurance Company had not admitted the claimant’s compensation and wage rate and had not relieved claimant of his burden to establish his rate under Article 8309. When the case reached the Supreme Court the judgment of the Court of Civil Appeals was affirmed, though Justice Greenhill dissented on the ground that the payments by the insurance company constituted some evidence that the amount paid is a correct one. Griffin v. Superior Ins. Co., 161 Tex. 195, 338 S.W.2d 415. Appellant’s points seven and ten are sustained.

In its fifth, sixth, ninth and seventeenth points appellant asserts that there was no evidence to support the submission or to support the jury’s answers to Special Issues Nos. 15 and 17. We have already held that the evidence was insufficient to support the jury’s answers to said issues. Such holdings require us to reverse and remand the cause for a new trial. Therefore, we shall not pass on appellant’s fifth, sixth, ninth and seventeenth points as to no evidence. For we are convinced that even if we were to say that there is no evidence to support the submission or answers to said issues, we should nevertheless reverse and remand this cause, not reverse and render judgment. Godwin v. Texas Employers’ Ins. Ass’n, 145 Tex. 100, 195 S.W.2d 347 (S.Ct.); Atlantic Ins. Co. v. Boyette, 342 S.W.2d 379 (Tex.Civ.App., writ ref., n. r. e.); Pelham Mfg. Co. v. Ridlehuber, 356 S.W.2d 502 (Tex.Civ.App., writ ref., n. r. e.). Moreover, such disposition of the appeal is in keeping with the prayer of appellant, who asks only that the judgment be reversed and the cause remanded for another trial.

In its eleventh, twelfth, fourteenth and fifteenth points appellant claims error of the court in overruling its motion for judgment non obstante veredicto on the ground either of no pleadings or no evidence to support the jury’s answers to Issues Nos. IS and 17. For reasons stated above we see no need to pass on these points.

In its thirteenth and sixteenth points appellant charges that the court erred in overruling its motion for judgment non obstante veredicto because the submission of Issues Nos. 15 and 17 and the jury’s answers thereto were against the overwhelming weight and preponderance of the evidence. Motions non obstante veredicto are not to be sustained on the above grounds. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (S.Ct.); Calvert, “‘No Evidence’ and ‘Insufficient Evidence’ Points of Error”, 38 Texas L.Rev. 361. See also concurring opinion in Wood v. American Security Life Ins. Co., 304 S.W.2d 559, 565.

In its eighteenth point appellant says that the court erred in overruling its objections and exceptions and in permitting appellee to read to the jury that part of appellee’s answer wherein it was alleged that the maximum compensation claimant could recover was $35 per week for 401 weeks in the amount of $14,035.

So far as we know our Supreme Court has not passed on this question. Several Courts of Civil Appeals have frowned on a similar practice, but have not found it to constitute reversible error. Appellant’s eighteenth point is overruled.

The judgment of the trial court is reversed and the cause remanded for a new trial.

Reversed and remanded.


author: BELL, Chief Justice.

text:
    Christine WEATHERALL, Appellant, v. Tommie Lee WEATHERALL, Appellee.
    No. 14821.
    Court of Civil Appeals of Texas. Houston.
    May 26, 1966.

      Mabel Grey Howell, Houston, for appellant.
    Bert E. Derden, M. G. Nahas, Jr., Houston, for appellee.
   BELL, Chief Justice.

This is an appeal from a judgment granting appellee a divorce, dividing the community property, finding a certain tract of land was the separate property of appellant, and awarding appellee a judgment against appellant for $3,250.00 which allegedly represented appellee’s portion of expenditures made from the .community to improve this separate tract of land. The judgment for divorce is not attacked. Only the part of the judgment that divided the property is attacked.

Appellee filed suit for divorce and alleged the ownership by the community of specified property, including the marital home. It is this home property that is the real source of dispute. Appellant filed an answer consisting of a general denial and cross-action, and her petition merely makes reference to community property. In none of the pleadings was the home property described as appellant’s separate property though admittedly it was. No pleading suggested that community funds had been employed to make improvements on the lot which is admittedly her separate property.

On January 28, 1965, the cause came on for trial and the trial court, as evidenced by its docket entry of that date, rendered the following judgment: “PI in per / by atty — Def by atty PI granted Div— No ch — PI awarded car & Lot — Tools / 3250 Cash — Def. Home, Furn — Car.”

This judgment was rendered at the term of court that began September 1, 1964, and would expire August 31, 1965. Article 2338-11, Vernon’s Ann.Tex.Civ.St.

No written draft of the judgment reflecting the judgment rendered was signed by the trial judge.

On June 2, 1965, after appellant’s original attorneys had been permitted to withdraw as counsel, appellant’s present counsel filed what is denominated “Defendant’s and Cross-Plaintiff’s Motion to Set Aside Docket Entry for Division of Property and Grant a Hearing on Division of Community Property.” The motion is lengthy, but it is material to note that it asserts the effect of the docket entry was to divest appellant of title to her separate real estate, and also the division of the property was inequitable. Too, of real significance is the assertion here that the trial court interpreted his docket entry, as shown by the written draft signed September 15, 1965, as the judgment he actually rendered, and in the written draft of the judgment he found the marital home to be appellant’s separate property but gave appellee recovery of $3,250.00 for his share of the community employed in adding improvements to the separate real estate. At the time of the rendition of judgment, as evidenced by the docket entry, there was no pleading by appellee seeking reimbursement. In fact, no pleading suggested any separate property or the employment of community funds for its improvement.

On September 15, 1965, the appellee filed a reply to appellant’s motion. The effect of the reply was to assert that if the home was appellant’s separate property, various amounts of the community had been employed to make improvements and appellee was entitled to reimbursement for his share of such expenditures and this should constitute a charge against the separate property.

Prior to the filing of this reply and on September 7, 1965, appellee filed a motion to enter judgment on the judgment rendered January 28, 1965. The proposed judgment attached to the motion, which was the judgment signed on September 15, 1965, found the home place to be the separate property of appellant and adjudged title in her. It also gave appellee personal judgment against appellant for $3,250.00 as his part of community funds used in making improvements on the property.

After the first above motion of appellant was filed and on August 20, 1965, the court, as shown by the statement of facts, held a hearing. At such hearing it was agreed that the home place was appellant’s property. We need not notice the testimony, but it suffices to say that it was of a nature dealing with whether in fact there was any community fund that went into the property. This was a proceeding under appellant’s alternate plea that under Rule 270, Texas Rules of Civil Procedure, no judgment having been entered the court could reopen the case.

After brief testimony the court recessed the case until August 26, 1965. The next proceeding, as shown by the statement of facts, is reflected by a hearing on September 15, 1965. The statement of facts of that date reflects that on August 26 the court refused to proceed further with the hearing started August 20 and that on August 26 there was no pleading by appellee of any community expenditures on the home place, his reply to appellant’s motion not having been filed until September 15. The court then stated he was finding the judgment which appellee had moved on September 7 to be entered was the judgment he had entered (rendered) and he was going to enter it. The court thereupon signed the judgment appealed from.

The effect of all of the above is that the court rendered a judgment on January 28, 1965, finding among other things that the home place was the separate property of appellant, dividing certain community property, and giving a personal judgment against appellant in favor of appellee for $3,250.00 as his share of the community used in improving the home. There was no' pleading to support such a recovery. Too, the effect of the court’s action in entering the judgment rendered earlier was to deny appellant’s motion to reopen the case.

We are of the view that the trial court was in error in rendering judgment on January 28, 1965, finding the home place to be separate property of the appellant and giving judgment to appellee for $3,250.00 as his share of the community that was expended on improvements to such separate property. Of course, ap-pellee later agreed the home was appellant’s separate property, but there was no pleading prior to rendition of judgment asserting any right to reimbursement. Too, the measure of recovery where community expenditures have been made on separate property is not the amount expended but the amount that such expenditures have enhanced the value of the property. Burton v. Bell, 380 S.W.2d 561 (S.Ct.); Lindsay v. Clayman, 151 Tex. 593, 254 S.W.2d 777 (S.Ct.); and Allen v. Allen, 101 Tex. 362, 107 S.W. 528. The judgment must conform to the pleadings. Rule 301, T.R. C.P. This error requires reversal.

It is argued by appellee that since there is no statement of facts on the initial trial, it will be presumed there was evidence to support the judgment. We do not think this rule applicable where the court’s judgment adjudicates matters not raised by the pleadings unless the court’s judgment affirmatively reflects trial by consent. This judgment does not so reflect.

Our disposition makes it unnecessary to discuss appellant’s other points.

Reversed and remanded.

COLEMAN, J., not sitting.


author: MASSEY, Chief Justice.

text:
    ALTON R. FAIRCHILD, INC., Appellant, v. M-P COTTON FELT COMPANY, Inc., d/b/a Kay Bedding Company, Appellee.
    No. 16719.
    Court of Civil Appeals of Texas. Fort Worth.
    April 29, 1966.
    Garrett & Garrett, and Rufus Garrett, Jr., Fort Worth, for appellant.
    Ungerman, Hill, Ungerman & Angrist, and Stanford M. Dolginoff, Fort Worth, for appellee.
   OPINION

MASSEY, Chief Justice.

A suit properly brought under provisions of Texas Rules of Civil Procedure, rule 185, “Suit on Sworn Account”, has almost become qualified as one which is sui generis in instances where the defendant in such a suit fails to file a sworn denial within the provisions of said Rule and of T.R.C.P. 93, “Certain Pleas to be Verified”.

In said cases, and as applied to the right of the plaintiff to judgment upon the account when he and the defendant have announced ready for trial (assuming no counter-claim, etc., plead by the defendant and upon which he would have the burden of proof) it has been aptly stated that the defendant’s only weapon “is a short stick— too short”.

Such is the situation presented on the instant appeal. The plaintiff’s case was made out on a suit fully qualified as a suit on sworn account, under the provisions of T.R.C.P. 185, when the case was brought to trial and the defendant was “caught” with an unsworn general denial as its only defensive pleading.

That the plaintiff elected to proceed and seemed to prove that it had in fact sold and delivered goods, wares and merchandise to a third corporation and not to the defendant — -but under arrangements whereby such was to be done upon the credit of the defendant and with the account and charges to be made and carried in the name of the defendant — would not qualify as a variance between pleading and proof fatal to the recovery of a valid judgment upon plaintiff’s cause of action. Appellant, defendant below, contends that there was a fatal variance and that the judgment for the plaintiff should for that reason be reversed, with the cause remanded to the trial court. Among other authorities it cites Cearley v. Cearley, 331 S.W.2d 510, 512 (Dallas Civ.App., 1960, no writ hist.) and the cases therein discussed. Overlooked is the fact that the plaintiff’s suit on sworn account stood proved — as in evidence — when the trial was begun. Therefore the subsequent proof introduced by the plaintiff, though it seemed a variance, would be supplementary and/or additional only — amounting to unnecessary evidence of facts which might or might not have qualified as proof of a different cause of action under other and different pleadings.

The trial court properly rendered judgment for the plaintiff for principal, interest and reasonable attorney’s fees.

Judgment is affirmed.


author: COLEMAN, Justice.

text:
    Meyer JACOBSON, Trustee, Appellant, v. NATIONAL WESTERN LIFE INSURANCE COMPANY et al., Appellees.
    No. 14818.
    Court of Civil Appeals of Texas. Houston.
    May 19, 1966.

      Bailey & Blum, Ben Blum, Houston, for appellant.
    Phipps, Smith & Alexander, J. H. Phipps, Irwin M. Herz, Jr., Galveston, for ap-pellees.
   COLEMAN, Justice.

This is an appeal from a summary judgment for the defendant in a suit filed for the purpose of setting aside the deed executed by a trustee after a sale purportedly authorized by the terms of a deed of trust.

There were no affidavits filed in support of the motion for summary judgment, and no depositions appear in the record. No pleading was filed by appellant in response to the motion for summary judgment other than an amended petition. The judgment recites: “ * * * the Court having considered'the pleadings and admissions on file and finding that they show an absence of genuine issue of any material fact * Apparently the admissions referred to are those contained in the pleadings of the plaintiff, since there is no formal request for admissions in the record or referred to in the briefs. The pleadings are unsworn.

The plaintiff alleged in his petition that he had paid two annual payments on the note secured by the deed of trust on the property in question. Both of the payments were late, but no question about late payment was raised by the owner of the note. When the third installment became due, plaintiff was unable to pay same, but he had contracted to sell the property. Plaintiff alleged that he informed the defendant that the sale was in progress and requested that the defendant forgo the installment then due, and that the defendant agreed to extend the time for payment in order to assist plaintiff in concluding the sale. He alleged that the defendant thereafter without notice to plaintiff caused the property to be posted for foreclosure and a sale of the property to be held. He alleged that the trustee did not post notices of the sale at three public places as required by the deed of trust and the law of Texas and that the purchase price was grossly inadequate. The petition admits the execution of a note and deed of trust securing it, and that the property was purchased by the defendant at the trustee’s sale. There were attached to the defendant’s motion for summary judgment copies of the note and deed of trust. No copy of the trustee’s deed appears in the record. The deed of trust provides: “ *- * * It is expressly agreed that the recitals in the conveyance to the purchaser shall be full evidence of the truth of the matters herein stated, and all prerequisites sic to said sale shall be presumed to have been performed. * * * ”

The deed of trust authorizes a sale by the trustee of the property conveyed in case of a failure to pay the note secured thereby. The note authorizes the holder of the indebtedness to mature, without notice, the entire note on the failure of the debtor to pay an installment when due. It further provides that the “maker * * * of this note waives notice,, demand for payment, presentment for acceleration of maturity, presentment for payment, notice of dishonor, diligence in collection, notice of protest, * *

Appellant has admitted by his pleading the execution of a note and deed of trust, the failure to pay an installment due under the terms of the note, and a sale by the trustee.

That provision in the deed of trust that in case of a sale there should be a presumption that all prerequisites to the sale had been performed is valid. It must be presumed that the note was properly matured and that notice of the sale was properly posted unless such presumption is rebutted. Graham and Locke Investments, Inc. v. Madison, Tex.Civ.App.1956, 295 S.W.2d 234, ref., n. r. e.; Cunningham v. Pashall, Tex.Civ.App.1940, 135 S.W.2d 293, dism., judgment correct.

This presumption was properly considered by the trial court since the deed of trust was attached to the motion as an exhibit. To raise a genuine issue of fact relative to the proper acceleration of payment and posting of notices, it was the burden of appellant to file an affidavit containing statements of fact which would have been admissible in evidence at a trial of the case. The presumption relieved appel-lees of their ordinary burden, in a summary judgment case, of negativing issues of fact arising under the pleadings relating to prerequisites to the sale. This holding is supported by the well established rule that where the proponent of a motion for summary judgment introduces extrinsic evidence demonstrating facts which would justify the granting of an instructed verdict had the case proceeded to trial on the merits, the opponent must show opposing evidentiary data raising an issue as to a material fact in order to defeat the motion. Gulf, C. & S. F. Railway Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492.

The alleged agreement to extend the time of payment of the installment due is not enforceable because made without consideration and for an indefinite time. Crispi v. Emmott, Tex.Civ.App.1960, 337 S.W.2d 314; Mizell Construction Company and Truck Line, Inc. v. Mack Trucks, Inc., Tex.Civ.App.1961, 345 S.W.2d 835.

Appellant plead that by reason of the promise to forbear foreclosure pending the sale of the property, appellee waived his right under the note and deed of trust to accelerate the maturity of the note and hold the trustee’s sale without first notifying him of his intention to do so. He also alleged that had he known that appellee intended to foreclose he would have paid the installment or the entire note.

Proof of these allegations would have established that there was no default and no basis for acceleration of the remaining installments to become due under the note. San Antonio Real Estate Building & Loan Ass’n v. Stewart, 1901, 94 Tex. 441, 61 S.W. 386; Commercial Travelers Casualty Co. v. Johnson, Tex.Civ.App.1949, 217 S.W.2d 160.

While proof of these facts would rebut the presumption that this prerequisite to a valid sale had occurred, in the absence of sworn pleadings, affidavits or depositions, the presumption raised by the agreement contained in the deed of trust must prevail over mere pleading. The purpose of the summary judgment procedure is to pierce pleading in order to ascertain the existence vel non of genuine issues of fact. Statham v. City of Tyler, Tex.Civ.App.1953, 257 S.W.2d 742, ref., n. r. e.

While no point has been made of the fact that the note and deed of trust attached as exhibits to the motion for summary judgment were not certified or identified in a sworn pleading, the trial court properly considered these instruments. Youngstown Sheet and Tube Co. v. Penn, Tex.1963, 363 S.W.2d 230.

Appellant pled that the consideration paid at the trustee’s sale was grossly inadequate. The amount of the consideration is not revealed by the record, and this allegation, though denied, raises an issue of fact. A trustee’s sale will not be set aside because the consideration was inadequate unless there were irregularities connected with the sale which caused or contributed to cause the property to be sold for a grossly inadequate price. Sparkman v. McWhirter, Tex.Civ.App.1953, 263 S.W.2d 832, writ ref.; Stewart v. Stewart, Tex.Civ.App.1962, 357 S.W.2d 492.

Appellant has alleged no irregularities with respect to the manner in which the sale was conducted. His allegation with respect to the posting of notices was negatived by the presumption of regularity agreed to by the parties in the deed of trust. This issue, though raised by the pleadings, is not one concerning a material fact and will not prevent a summary judgment.

The judgment of the trial court is affirmed.


author: McDONALD, Chief Justice.

text:
    Jo Ann SCHMIDT et al., Appellants, v. Agnes SCHMIDT et al., Appellees.
    No. 4470.
    Court of Civil Appeals of Texas. Waco.
    May 12, 1966.
    Rehearing Denied June 2, 1966.

      Andrew Shuval, Hereford, Everett H. O’Dowd, Waco, for appellants.
    Thomas B. Bartlett, Marlin, David B. Kultgen, Waco, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal by plaintiffs from a take-nothing judgment in a suit to declare void 2 deeds executed by Ben Tepe; and an appeal by plaintiffs from a take-nothing judgment in a suit to set aside the will of Ben Tepe. Plaintiffs are some of the children of Ben and Elizabeth Tepe; defendants are grantees in the 2 deeds, and the other children of Ben and Elizabeth Tepe.

On January 15, 1963 Ben Tepe executed a deed to 50 acres (being community property and homestead of Ben and Elizabeth Tepe) to the Veterans’ Land Board, for resale to J. B. Hazelwood for $5063.

On September 11, 1963 Ben Tepe executed a deed to 161 acres (being community property and homestead of Ben and Elizabeth Tepe) to Eugene Radie for $16,000.

Both deeds recited that Ben Tepe was not joined by his wife, Elizabeth, because she was a person of unsound mind.

Thereafter, plaintiffs filed suit to set aside such deeds, alleging: Ben Tepe was of unsound mind at the time of execution; that Ben Tepe was the subject of undue influence at the time of execution; and that such deeds were void because Elizabeth Tepe had never been judicially declared to be of unsound mind.

On March 3, 1964 and while such suit was pending, Ben Tepe died, and his will executed on February 10, 1964 was offered for probate. Such will left his property to care for his wife; and after her death divided the property between his children, but subject to charges for recited advancements to plaintiffs; and confirmed as payments for services rendered, the sums of $1,000 theretofore paid to some of the defendants, (reciting such should not be considered as advancements).

Plaintiffs contested the will alleging Ben Tepe was not of sound mind at the time of execution of the will; and that such will was made as the result of undue influence. The County Court probated the will and defendants appealed to District Court.

The deed case and the will case were consolidated by agreement. Trial was to a jury which found:

1) Ben Tepe had testamentary capacity at the time he signed his will (February 10, 1964).
2) Ben Tepe knew the nature and consequences of his act in executing the deed to Radie (September 11, 1963).
3) Ben Tepe knew the nature and consequences of his act in executing the deed to the Veterans’ Land Board (January 15, 1963).

The trial court entered 2 separate judgments on the verdict: 1) that plaintiffs take nothing in the suit to declare the 2 deeds void; and 2) that plaintiffs take nothing in the suit to set aside the will.

Plaintiffs appeal from both judgments, contending:

1)The 2 deeds are void because Elizabeth Tepe had not been judicially declared to be incompetent at the time of their execution by Ben Tepe.
2) The trial court erred in refusing to submit issues on undue influence in the making of the 2 deeds.
3) There is no evidence, or insufficient evidence, to support the jury’s finding that Ben Tepe had testamentary capacity at the time he executed the will.
4) The trial court erred in not submitting an issue as to whether Ben Tepe knew the contents of his will at the time he executed it.

Plaintiffs’ first contention is that the 2 deeds are void because Elizabeth Tepe had not been judicially declared to be incompetent. Ben Tepe executed the 2 deeds on January 15th and September 11, 1963, reciting in each that he was not joined by his wife Elizabeth because she was a person of unsound mind.

A husband to convey the homestead must be joined by his wife. Art. 1300 Vernon’s Ann.Tex.Civ.St.; Art. 16, Sec. 50 Texas Constitution, Vernon’s Ann.St.

However, where the wife is insane, the husband has the right to convey the homestead without the joinder of the wife. Reynolds Mtg. Co. v. Gambill, 115 Tex. 273, 280 S.W. 531; Higginbotham v. Ft. Worth Nat. Bank, CCA, Er. Ref., 172 S.W.2d 402; 28 Tex.Jur.2d p. 531. In both the Reynolds and Higginbotham cases, supra, the insane wife had never been judicially decreed insane. In the Higgin-botham case the court says:

“It is of no importance that the (insane) wife had not been legally adjudged to be of unsound mind in a proceeding brought for that specific purpose.”

(In the Reynolds case the jury found that the wife was of unsound mind.)

In the case at bar, Mrs. Tepe had not been judicially declared to be incompetent, but plaintiffs admitted in their pleadings (and on argument) that Mrs. Tepe was at the time of the execution of the deeds and for a long time prior thereto, a person of unsound mind.

Plaintiffs assert that Section 157 of the Probate Code, V.A.T.S. requires the wife to be judicially declared to be incompetent before the husband can alone convey the homestead. Such section provides: “Wherever a husband or wife is judicially declared to be incompetent, the other spouse * * * acquires full power to manage, control, and dispose of the entire community estate * *

Section 157 of the Probate Code and Articles 3663 and 3664 which it repealed and replaced, all relate to the administration of community property, and we think are not determinative of the factual situation here involved. In any event, Articles 3663 and 3664 required the insane wife to be judicially declared incompetent, so the rule of the Reynolds and Higginbotham cases, supra, governs.

Plaintiffs’ 2nd contention is that the trial court erred in not submitting issues on undue influence in the execution of the deeds. The burden of proof of undue influence is upon plaintiffs. The test of undue influence is whether there is evidence of control exercised over the mind of Ben Tepe so as to overcome his free agency and free will, and to substitute the will of another so as to cause him to do what he would not otherwise have done but for such control. Curry v. Curry, 153 Tex. 421, 270 S.W.2d 208; Boyer v. Pool, 154 Tex. 586, 280 S.W.2d 564.

There is no evidence that anyone exercised undue influence on Ben Tepe to execute the deeds. The contention is overruled.

Plaintiffs’ third contention is that there is no evidence, or insufficient evidence to support the jury’s finding that Ben Tepe had testamentary capacity at the time he executed the will.

Mr. Tepe was 94 years old, sick and in bed, when he executed his will on . February 10, 1964. The witness Newby, one of the subscribing witnesses to the will, testified that the recitations in the attestation clause of the will took place on February 10, 1964 sometime after 12:00 o’clock; that Mr. Tepe appeared to know what he was doing; that he was conscious enough to know the business he was about, and what he was doing; that he spoke to the witness Newby; that he signed the will; that Mr. Tepe spoke to Mr. Hazelwood (the other witness to the will); that Mr. Tepe was asked if he was ready to sign it; that he was helped up and signed the will. The witness Hazelwood testified the will was signed on February 10, 1964 in the afternoon about 1:00 o’clock (and later testified it could have been as late as 3:00 o’clock); that Mr. Tepe spoke to him and asked him about his daughter; that he thinks Mr. Tepe knew what he signed; that he thinks Mr. Tepe knew the nature and extent of his property, how much land he owned and how much money he had at the time he signed the will; that Mr. Tepe was in bed and sick and old; that Mr. Tepe knew the other people in the room; that Mr. Tepe talked with his son Joe a little bit, and asked for a pencil. Both Newby and Hazelwood had known Mr. Tepe for many years, but had not seen him for a number of months prior to February 10, 1964. The witness Duncan testified that the last time he saw Mr. Tepe in the latter part of January he was mentally alert. All of the evidence showed Mr. Tepe knew the nature and consequences of his acts in January and September, 1963, and there is no complaint at such findings.

The witness Dr. Swepstone testified he was a medical doctor; that he made a house call on Mr. Tepe on February 10, 1964 in the afternoon between 12:00 and 2:30; that Mr. Tepe was sick and unconscious at the time; and not able to recognize his relatives or know the nature and extent of his property; that Mr. Tepe did not have sufficient memory to collect in his mind the necessary elements to make a will or form a reasonable judgment; that Mr. Tepe was in critical condition. Dr. Swepstone further testified that he “could not say definitely, but I do not believe Mr. Tepe could have been perfectly normal an hour or two hours before I saw him, or four hours before I saw him”; and further: “the only time I am testifying about Mr. Tepe’s mental condition is the time I saw him on February 10th, and what his condition was before or after I do not purport to tell the jury.” Dr. Swepstone fixed the date of his call by his office records, and the time of the call by his memory.

While the jury could have found either way from the evidence, the jury had the right to believe Newby and Hazelwood; and the right to disbelieve the doctor, or to believe the doctor mistaken as to the day or the time he testified he saw Mr. Tepe; and the right to believe Mr. Tepe had testamentary capacity when he signed the will, and later that day became in the condition testified to by Dr. Swepstone. In any event, we think the evidence .ample to sustain the jury’s finding, and that such finding is not against the great weight and preponderance of the evidence.

Plaintiffs’ fourth contention is that the trial court erred in not submitting an issue as to whether Mr. Tepe knew the contents and provisions of his will at the time he executed it.

A testator is presumed to know the contents of his will from the fact of execution. Kelly v. Settegast, 68 Tex. 13, 2 S.W. 870; Boyd v. Frost Nat. Bank, 145 Tex. 206, 196 S.W.2d 497, 168 A.L.R. 1326. Plaintiffs rely on the exception to the foregoing rule in Kelly v. Settegast, where the court said: In a case: 1) where a will was written by one who under it would take 1/2 of the estate; 2) the deceased was unable to read and write; 3) the will was unnatural in that it gave the testator’s estate to strangers to the blood; 4) and testator was advanced in age and in poor health; that such facts call for clear proof that the testator knew the contents of the paper offered for probate.

In the case at bar there is no showing who prepared Mr. Tepe’s will (although it is in evidence that it was in keeping with intentions Mr. Tepe expressed to the witness Carter that he was going to make a will and require his children who owed him. debts to account for such debts); and the will was not an unnatural will. The facts are not sufficient to bring the case at bar within the exception to the general rule set out in the Settegast case. See: Leeder v. Leeder, CCA, Er. Ref., 161 S.W.2d 1112. The contention is overruled.

Both judgments appealed from are affirmed.


author: DENTON, Chief Justice.

text:
    Elbert DAUGHERTY, Appellant, v. Ethel E. GOWER, Appellee.
    No. 7621.
    Court of Civil Appeals of Texas. Amarillo.
    May 23, 1966.

      Miller, Sanders & Baker, Amarillo, for appellant.
    S. R. Lenning, Jr., Pampa, for appellee.
   DENTON, Chief Justice.

Summary judgment was rendered for Ethel E. Gower, appellee in her suit against Elbert Daugherty, appellant, on a promissory note. No brief has been filed by ap-pellee.

Appellee alleged the execution by appellant of a note in the amount of $800.00, dated April 17, 1964, payable in six months from date. Appellant, by sworn answer, alleged affirmative defenses of failure of consideration and duress. Thereafter, ap-pellee filed her motion for summary judgment which was supported by her own affidavit and that of her daughter, the former wife of appellant. Both affidavits state the note was executed by appellant as security for money previously loaned to him by appellee and denied any dúress.

Appellant contends his affidavit, attached to his answer to appellee’s motion for summary judgment, creates issues of fact which should have been submitted to a trier of the facts. In his controverting affidavit, appellant asserts appellee did not loan him money at any time; that any money received from appellee was a gift to appellant and his former wife; that the note was executed by him in the office of an attorney of his former wife; that her suit for divorce against him was then pending; that her attorney advised him his wife “would not proceed with her final hearing on the divorce if I did not sign the note”; and that he signed the note only because of this threat.

For a party to be entitled to a summary judgment, the provisions of Rule 166-A, Texas Rules of Civil Procedure must be strictly complied with. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929. The burden of demonstrating the lack of a genuine issue of material fact is upon the movant and all doubts are resolved against him. Gardner v. Martin, 162 Tex. 156, 345 S.W.2d 274. In Re: Price’s Estate (Sup.Ct.), 375 S.W.2d 900.

Failure of consideration is a defense in an action upon a negotiable instrument. Section 28, Article 5933 Vernon’s Ann.Tex.Civ.St. Section 55, Vernon’s Ann.Tex.Civ.St. Art. 5935 renders title to an instrument defective when the instrument is obtained by duress. These are valid defenses to an action upon a promissory note, and if proved, constitute a complete defense to the action. Hunley v. Garber (Tex.Civ.App.), 254 S.W.2d 813. Appellant’s affidavit is sufficient to raise an issue of fact as to the failure of consideration and duress as between the parties. Appellee, having failed to sustain her burden of establishing the absence of a genuine issue of material fact as required by Rule 166-A, it necessarily follows the trial court erred in sustaining her motion for summary judgment. Womack v. Allstate Insurance Company, 156 Tex. 467, 296 S.W.2d 233. Winters v. Langdeau (Sup.Ct.), 360 S.W.2d 515.

The judgment of the trial court is reversed and the cause remanded.


author: FANNING, Justice. DAVIS, Justice.

text:
    B. L. CORLEY et ux., Appellants, v. OLYMPIC PETROLEUM CORPORATION, Appellee.
    No. 7740.
    Court of Civil Appeals of Texas. Texarkana.
    May 17, 1966.
    Rehearing Denied June 7, 1966.
    Neal E. Birmingham, Linden, for appellants.
    Tom Steele, Linden, Trotter, Childs, For-tenbach & McClure, Houston, for appellee.
   FANNING, Justice.

This is a declaratory judgment suit by appellee, Olympic Petroleum Corporation, against appellants, B. L. Corley and wife, Orilla Betts Corley, to declare an oil, gas and mineral lease to be valid and in full force and effect and to quiet the title of ap-pellee to said mineral lease. Appellants in defense contended that the lease had terminated because annual delay rental was not timely paid. Trial was to the court without the aid of a jury, and judgment was entered for appellee. Appellants have appealed.

The lease in question, a standard form of Producer’s 88 commercial lease, with pooling provisions, was executed on August 1, 1960, by appellants as lessors, to Stubblefield, lessee, covering 140 acres of land in Cass ' County, Texas. The lease is for a primary term of 10 years from August 1, 1960, and 'as long thereafter as oil, gas or other min-veral is produced from the land covered Thereby or pooled therewith in accordance with the pooling provisions of said lease. ■The lease was assigned to Olympic on July 29,1963.

The terms of the lease obligate the lessee to commence drilling operations within one year from the date of the lease. There are, however, customary provisions granting the lessee an option to defer drilling operations during each annual period of the lease by the payment or tender of delay rentals to the lessor. The provisions of the lease in this regard are:

“5. If operations for drilling are not commenced on said land or on acreage pooled therewith as above provided on or before one year from this date, the lease shall then terminate as to both parties, unless on or before such anniversary date Lessee shall pay or tender to Lessor or to the credit of Lessor in Morris County National Bank at Naples, Texas, (which bank and its successors are Lessor’s agent and shall continue as the depository for all rentals payable hereunder regardless of changes in ownership of said land or the rentals) the sum of One Hundred Forty and no/100 Dollars ($140.00), herein called rentals), which shall cover the privilege of deferring commencement of drilling operations for a period of twelve (12) months. In like manner and upon like payments or tenders annually, the commencement of drilling operations may be further deferred for successive periods of twelve (12) months each during the primary term. The payment or tender of rentals under this paragraph and of royalty under paragraph 3 of any gas well from which gas is not being sold or used may be made by the check or draft of Lessee mailed or delivered to the parties entitled thereto or to said bank on or before the date of payment * * (Emphasis added)

No well or drilling operations were commenced on the property covered by the lease prior to August 1, 1964, nor thereafter to the date of the trial. It is undisputed that annual delay rentals were timely paid for each of the periods covering August 1, 1961, 1962, and 1963.

On July 25, 1964, appellee, in order to avail itself of the privilege of deferring drilling obligations under the lease for the annual period commencing August 1, 1964, caused to be placed in the U. S. registered mails its good and valid check, duly and properly drawn, for the full amount of the annual delay rentals, plus (.50¾£) to cover bank handling charges, in an envelope properly addressed to the depository bank, together with appropriate directions to said bank to deposit same to the credit of appellants. The envelope containing the check was transmitted in the registered U. S. mails by the U. S. Post Office Department to the Post Office terminal at Texarkana, Texas, where it was received on July 27, 1964, and was on that same date dispatched by the Post Office Department from Texar-kana, Texas, to Naples, Texas, its intended destination. However, the envelope never reached Naples, Texas, although according to the testimony of Post Office official Starr, it should have been received in the regular course of the mails by the Postmaster at Naples not later than 7:00 A.M. on July 27, 1964.

Upon being informed by the Post Office Department of the apparent loss in the mails of the check above referred to, appellee instructed its attorneys to mail another check to the depository bank. Thereupon, on or about August 28, 1964, appellee’s attorneys mailed their check in the same amount, i. e., $140.50, to the depository bank with a letter explaining the loss of appellee’s check in the mails and requesting the bank to accept their check on behalf of appellee in lieu of the lost check, and to deposit same to the account of appellants in accordance with the terms of the lease. This check was a good and valid check, which was received and negotiated by the bank and was later deposited to the account of appellants in depository bank on September 15, 1964.

On or about October 30, 1964, appellants notified appellee’s attorneys by letter of such date that they, appellants, considered the lease terminated and tendered the return of the amount deposited in the depository bank to their credit from the proceeds of appellee’s attorneys’ check of August 28, 1964. Appellee’s attorneys refused to accept such tender thereof by appellants and this suit was thereafter instituted. It is also shown by undisputed evidence in the record that the 1965 delay rental was paid to the depository bank prior to August 1, 1965, and is being held by said bank.

The controversy between the parties is centered around the failure of appellee’s check for delay rentals to be received by the depository bank prior to August 1, 1964, with appellants contending that the lease terminated by reason thereof, and with appellee contending that the lease specifically authorized the mailing of the check to the depository bank, which was properly done, and that the lease had not terminated.

Appellants in their brief rely upon the case of Appling v. Morrison, Tex.Civ.App., 227 S.W. 708, no writ (1921) and eases of like import. However, the lease in the Appling case did not contain any provision providing for or authorizing payment of rentals by mailing and the delay rentals in that case were not deemed to be paid until the remittance was actually received by the depository bank named in the lease. The distinction is recognized and stated by Summers, citing the Appling case, as follows:

“Where there is no provision in the lease * * * providing payment by mailing, and the lease merely provides that payment of rentals may be made to the lessor or to his credit in a named bank, the rent is not paid until the remittance is received by the lessor or by the named bank with proper instructions to credit it to the account of the lessor. In such a situation it has been held that where the lessee mailed a rental check to the depository bank in time to be received by it in the due course of mail on or before the date of payment, but the remittance did not reach the bank until two days after the due date, mailing did not constitute payment and that the lease terminated because of non-payment of rental. 2 Summers, Law of Oil and Gas, Per.Ed. 434, § 344.
«* * *
“On the other hand, an oil and gas lease may expressly provide for the payment of delay rentals by the mailing of a check, draft or other form of remittance to the lessors. In such a situation, the postal service is made the lessor’s agent to deliver the remittance and proper mailing, although it is never delivered, constitutes payment. 2 Summers, Law of Oil and Gas, Perm.Ed. 433, § 344.”

In this connection also see the following authorities: Phillips Petroleum Co. v. Harnly, Tex.Civ.App., 348 S.W.2d 856, wr. ref., n. r. e. (1961); Hitz v. Ohio Fuel Gas Co., 43 Ohio App. 484, 183 N.E. 768 (1932) ; Hamilton v. Baker, 147 Tex. 240, 214 S.W.2d 460 (1948); Nelson Bunker Hunt Trust Estate v. Jarmon, Tex.Civ.App., 345 S.W.2d 579, wr. ref. (1961).

In Phillips Petroleum Co. v. Harnly, supra (348 S.W.2d 856) where there was a similar provision authorizing the mailing of a check for a shut-in rental, and where the lessor’s address appeared in the lease and the lessee used this address in mailing a shut-in rental payment to the lessor, it was held that the “unless” lease was not terminated for non-payment, although the rental was received by the lessor after the due date. The court said:

“The lessee had a right to rely on the address found in the lease in the absence of a notice of a change of such address. It is well settled in this State that the lessee under ‘unless’ leases has a determinable fee, and that if he fails to drill or pay rentals when due his lease is terminated. The application of this rule has been relaxed in some cases. Humble Oil & Refining Co. v. Harrison, 146 Tex. 216, 205 S.W.2d 355; Hamilton v. Baker, 147 Tex. 240, 214 S.W.2d 460; Mitchell v. Simms, Tex.Com.App., 63 S.W.2d 371. We are of the opinion the facts of this ease bring it within this rule laid down in those cases cited above.”

The case of Gillespie v. Bobo, 5 Cir., 271 F. 641 (1921), relied upon by appellants, is clearly distinguishable from the case at bar. It was also distinguished in the Harnly case, supra (348 S.W.2d 856), as follows:

“No case has been cited nor have we found one which presents the exact situation involved here. Gillespie v. Bobo, 5 Cir., 271 F. 641, involved the mailing of delay rentals addressed to the lessor at Box 43, Fort Worth, Texas, rather than Box 43-A, Fort Worth, Texas. The letter A designated a rural route and the city post office boxes were designated by numbers only. The court there held the lease terminated because of lessee’s failure to comply strictly with the terms of the lease. This case is distinguished from the instant case in several respects. In the Gillespie case, the address of the lessor was not inserted in the lease and lessee sought the address from a third party. Lessor’s address was correctly given to lessee, but either by mistake or accident the letter A was omitted from the address when the envelope was being prepared for mailing.”

We hold that the trial court rendered a correct judgment under the record in this cause.

The judgment of the trial court is affirmed.

CHADICK, C. J., concurs.

DAVIS, J., dissents.

DISSENT

DAVIS, Justice.

I dissent. I drew this case and wrote the following opinion, which I now file as my dissent with minor changes.

This is a declaratory judgment suit by ap-pellee, Olympic Petroleum Corporation, against appellants, B. L. Corley and wife, Orilla Betts Corley, to construe and declare an oil, gas and mineral lease to be valid and in full force and effect. The appellants answered and petitioned for a summary judgment, asking the court to declare the oil, gas and mineral lease to have terminated. The case was tried before the court, without a jury, and judgment was entered in favor of appellee. Appellants have perfected their appeal and bring forward five points of error.

History

On August 1, 1960, appellants, as lessors, executed an oil, gas and mineral lease to Charles Stubblefield, lessee, on 140 acres of land situated in three different headright surveys in Cass County, Texas. The lease was assigned to Olympic Petroleum Corporation on July 29, 1963. The lease provides for the payment of $140.00 per year delay rentals, or to begin drilling operations. All delay rentals were paid through August 1, 1963. The lease is an “unless” lease, and merely gives the lessee or the assigns the option to pay the annual delay rentals or begin drilling operations. According to the record, appellee mailed a check by registered letter to the depository, Morris County National Bank of Naples, Texas, on July 25, 1964. The letter and the check was never delivered to the bank by the U. S. mails. There is a mix-up in the testimony that was offered at the trial. A witness for the post office swore that the registered letter that was mailed by appellee was dispatched to the Texarkana Mail Terminal on July 15, 1964. There is no showing that the registered letter arrived at the Mail Terminal in Texarkana on July 27, 1964. The registered number is 816,705. The witness from the post office swore that the control guide had five items listed. The second item was Registered No. 815,705, from Houston, Texas. The witness further swore that the registered letter should have reached the bank in Naples, Texas, by 7:00 o’clock a. m. If the registered letter reached the post office in Texarkana on July 27, 1964, it should have been delivered to the Morris County National Bank at Naples, Texas, that same day. Through some negligence on the part of the mails the letter and check was never delivered. This act was through no fault at all on the part of the lessors. The lease contains the following provisions:

“ * * * The payment or tender of rental under this paragraph * * * may be made by the check or draft of Lessee mailed or delivered to the parties entitled thereto or to said bank on or before the date of payment. * * * ”

Opinion

In construing the provisions of the lease it merely provides that the rentals “may” be made by the check or draft of lessee, “mailed” to the parties entitled thereto, or to said bank on or before the date of payment. This provision is merely permissible, not mandatory. The lease does not “expressly provide” for the payment of delay rentals. Mailing the delay rentals is only permissible. The lessee, in truth and in fact, admitted that the mails was not the agent of the lessors, because on August 28, 1964, the attorneys for the lessee issued another check and delivered it to the depository, Morris County National Bank, which check was finally negotiated by the bank on September 15, 1964, a month and a half too late to pay the delay rentals. Thereafter, the lessors returned this money by check to the appel-lee, with the notation that the lease had terminated under its own terms. It seems to be the law in Texas that where delay rentals are paid late, which are occasioned by delay in the mails, the lease terminates. 42 T.J.2d 480 § 222; Appling v. Morrison (CCA 1921), 227 S.W. 708, N.W.H.; Gillespie v. Bobo, 271 F. 641; Weiss v. Claborn (CCA 1920), 219 S.W. 884, err. ref.; Morriss v. First Nat. Bank of Mission (CCA 1952), 249 S.W.2d 269; Thornton Oil & Gas, 1960 Cumulative Supp. § 259; Thuss, 2d Ed., Texas Oil & Gas 110, § 80; Keeler v. Dunbar (5 Cir.1930) 37 F.2d 868; Schell v. Black (CCA 1959), 321 S.W.2d 373, N.W.H.

The appellee takes the position that, by rule of equity, the lease should be declared to be in full force and effect because the delay rentals were mailed in time to reach the depository bank prior to the expiration date. Since the lease terminated under its own terms, there can be no equitable relief. See the above cases cited. 42 T.J.2d 464 § 216; 42 T.J.2d 590 § 265; 42 T.J.2d 617 § 283.

It is not pointed out in the main opinion in this case that the lessors appointed the U. S. mails as their agent. According to the terms of the lease, the lessee could have mailed the check to the lessors or to the depository; or, they could have delivered it personally. If the majority opinion is correct, then a judgment should be rendered in favor of the lessee for the money back that they paid through their attorneys on August 28, 1964. If the U. S. mail was the agent of the lessors, the lessors were not entitled to the money, because it got lost in the mail.

The lease had terminated. I would sustain the points of error.

I would reverse the judgment of the trial court and render the same.


text:
    ASSOCIATES INVESTMENT COMPANY, Appellant, v. Tom GALLOWAY et al., Appellees.
    No. 7619.
    Court of Civil Appeals of Texas. Amarillo.
    May 23, 1966.
    McGown, Godfrey, Logan & Decker, Fort Worth, John W. McMackin, Fort Worth, of counsel, for appellant.
    Bass & Hobbs, Lubbock, for appellees.
   DENTON, Chief Justice.

This suit, consolidated with two other suits with similar facts, involves the priority of liens on three mobile trailer homes. The trial court, without a jury, entered judgment holding the liens held by Michigan National Bank, appellee, were valid and superior to those held by Associates Investment Company, appellant, and plaintiff below. Associates Investment Company has appealed from that judgment. The purchasers of the trailer homes have not appealed. The cause involves an interpretation and application of the Certificate of Title Act, Article 1436-1, Vernon’s Texas Penal Code.

The material facts are undisputed. The cause involves three transactions, but the transactions were considered identical by the parties and they will be so treated here. Bluebonnet Sales Company was a dealer engaged in the retail sale of mobile trailer homes. Bluebonnet sold the trailer homes involved here to retail purchasers, who at the time of the purchase executed a promissory note and a chattel mortgage in favor of Bluebonnet and executed an application for a certificate of title. The notes and chattel mortgages were assigned by Bluebonnet to Michigan National Bank and in due course the certificates of title were issued showing the purchasers as the owner and Michigan National as the lienholder. The original certificate of title was forwarded to Michigan National, who at all times material here retained possession of the original title showing their lien on its face. Subsequently, each of the three original purchasers became delinquent in their payments, and the trailer homes were repossessed by Bluebonnet and placed on their lot for resale. Michigan National retained the original certificate of title and Bluebonnet later resold the trailer houses. Thereupon, Bluebonnet took new notes and chattel mortgages from a second purchaser, and assigned the notes and mortgages to Associates Investment Company, appellant. Proceeds of the second sales were not forwarded to Michigan National. When the bank learned that Bluebonnet had sold the trailer homes and failed to pay over the proceeds of those sales, its agent, Tom Galloway, took possession of the units and resold them. The cause of action against Galloway was dismissed prior to the trial of these suits. When suit was filed the proceeds of these sales were placed in the registry of the court pending a determination of the priority of liens between Michigan National and Associates.

It is undisputed Bluebonnet repossessed the three units and placed them on their lot for resale with the knowledge of Michigan National. The trial court found in each instance where Michigan National purchased the promissory note and lien on the units, Bluebonnet executed a contract with Michigan National by which it agreed to “at any time upon demand repurchase from Michigan National Bank the trailer covered by the mortgage within referred to for the amount then remaining unpaid;” and concluded that in each repossession Bluebonnet was protecting its own interest under the terms of the repurchase agreement as well as that of the bank. The notes and mortgages executed by the second purchaser were subsequently transferred to Associates Investment Company for a valuable consideration. Neither the second purchaser nor Associates had actual knowledge that Michigan National was holding any lien against the mobile units.

Appellants’ contention is that Michigan National consented to the resale of the mortgaged units by Bluebonnet; and in so consenting, Michigan National thereby waived its lien as against subsequent purchasers and mortgagees. In support of its position, Associates cites the general rule that a mortgagee may waive his mortgage lien and be estopped to enforce it by conduct inconsistent with its existence. Appellant relies primarily on Sechrist-Hall Company v. Harlingen National Bank (Tex.Civ.App.), 368 S.W.2d 155 (Ref. N.R.E.). That case dealt with chattel mortgages on central air conditioning units. The court held the mortgagee bank “consented to the sale of the mortgaged property and that it thereby waived its mortgage lien.” We have no quarrel with that holding but it has no application here. The Certificate of Title Act was passed to prevent fraud in the purchase and sale of motor vehicles and house trailers. The Title Act superceded the chattel mortgage registration statutes in so far as they pertain to motor vehicles and house trailers. Guinn v. Lokey, 151 Tex. 260, 249 S.W.2d 185. Dublin National Bank v. Chastain (Tex.Civ.App.) 167 S.W.2d 795 (Writ Ref.) Section 33 of the Certificate of Title Act provides that “[n]o motor vehicle may be disposed of at a subsequent sale unless the owner designated in the certificate of title shall transfer the certificate of title * * * which form shall include, * * * an affidavit to the effect that the signer is the owner of the motor vehicle, and that there are no liens against such motor vehicle, except such as are shown on the certificate of title and no title to any motor vehicle shall pass or vest until such transfer be so executed.” Section 52 of the Act declares it to be unlawful to buy or sell any title other than a lien without then and there demanding of the proposed seller the registration receipt and certificate of title. Section 53 declares that all sales in violation of the Certificate of Title Act are null and voil and no title shall pass until the provisions of the Act have been complied with. Associates and its assignor failed to comply with these provisions. Before purchasing the notes and mortgages from Bluebonnet, Associates merely made an independent credit check. Michigan National had complied with the Title Act while Associates and its mortgagor and the second purchasers had not. When Associates bought the notes and mortgages it knew or should have known its lien was not recorded as required by the Certificate of Title Act. The original certificate of title, with the lien properly recorded, remained in the possession of Michigan National. Associates is not in a position to raise the defense of waiver or estoppel. It did not comply with Section 42 of the Act which requires the lien to be noted on the new certificate of title by the highway department. Associates knew or should have known Bluebonnet was not in a position to furnish an original certificate of title with its recorded lien. It purchased its lien with the lien of Michigan National outstanding and the latter lien fully met the requirements of the Certificate of Title Act. Erwin v. Southwestern Investment Company, 147 Tex. 260, 215 S.W.2d 330.

The material facts of the instant case are closely analogous to those in Freeberg v. Securities Investment Company of St. Louis (Tex.Civ.App.) 331 S.W.2d 825 (Writ Ref.). In holding a purported sale of a mobile home by the owner’s agent void and refusing to enforce an unrecorded lien, the court held:

“When, therefore, Investment Company bought the note and lien it knew that there was no record of the lien which met the requirements of the Certificate of Title Act. Giles v. Lehman, Tex.Civ.App., 163 S.W.2d 720. The lienholder did not, and could not, furnish the Original Certificate with a record of the lien, and Investment Company knew or should have known it. Therefore, it bought the note without obtaining the evidence of the lien, which at that time was disclosed neither by any certificate of title, nor in the records of the office of the Highway Department.”

The language quoted is applicable to Associates’ position in the instant case.

Appellant also urges the Certificate of Title Act is not applicable or effective to invalidate its lien or to render its lien inferior. The argument is, the general rule that a mortgagee waives his lien by consenting to the sale of the mortgaged property is not discarded because such property is a motor vehicle. The reasoning is that the Act does not prohibit parties from entering into a valid contract to sell without a transfer under the Act. In support of this position, appellant relies primarily upon Elder Chevrolet Company v. Bailey County Motor Company (Tex.Civ.App.) 151 S.W.2d 938 (N.W.H.). After summarizing the transactions involved, the court there said: “It reveals a situation where all parties in conducting the transactions involved entirely ignored the Certificate of Title Act.” This cannot be said of Michigan National in the instant case and the decision in the Elder case has no application here. The Certificate of Title Act clearly applies to the transactions here. Associates is not seeking to enforce a contract to sell, but to enforce its unrecorded lien against a lien that does comply with the Act in all respects. The Elder case recognized a distinction between a sale and a contract to sell and seems to be holding the Certificate of Title Act does not attempt to regulate a contract to sell a motor vehicle. However, as stated, the case is distinguishable on the facts.

The lender of money may protect himself by retaining the title papers in his possession or by causing a lien to be noted upon the title. The priority of liens must rest upon the title documents under terms of the Certificate of Title Act. First State Bank of Corpus Christi v. Austin, (Tex.Civ.App.) 315 S.W.2d 390. (Writ Ref.). A review of the provisions of the Certificate of Title Act together with the authorities cited makes it apparent Michigan National was the holder of a valid first lien against each of the units involved.

The judgment of the trial court is affirmed.


author: RENFRO, Justice.

text:
    AMERICAN BANKERS INSURANCE COMPANY, Appellant, v. Philip FARLEY, Appellee.
    No. 16735.
    Court of Civil Appeals of Texas. Fort Worth.
    May 20, 1966.

      Richey, Sheehy, Teeling & Cureton and Benjamin N. Hamilton, Waco, for appellant.
    Peery, Wilson & Jameson and Norman Whitlow, Wichita Falls, for appellee.
   Opinion

RENFRO, Justice.

Suit was brought by Philip Farley against American Bankers Insurance Company to recover, under a policy issued July 30, 1964, expenses incurred in March, 1965 for treatment of cancer. Defendant denied liability under a provision in the policy which excluded benefits where cancer originated prior to the time the policy had been in force for a continuous period of six months.

The cancer originated in mid-February, 1965.

The defendant contended, however, that the policy lapsed for nonpayment of premiums from January 10, 1965, to January 30, 1965, and was reinstated on January 30, 1965.

Plaintiff’s claim originated more than six months after the effective date of the policy. The defendant contends, however, a new period of six continuous months must ensue following the date of the reinstatement of the policy.

The trial court found that plaintiff paid every renewal premium from June, 1964 through January, 1965 and even up to the date of the trial; therefore the policy never lapsed and the defendant was mistaken in its contention that the policy had lapsed for nonpayment of premiums.

Judgment was rendered for plaintiff.

Defendant attacks the above findings as being without support in the evidence.

The findings are supported by plaintiff’s testimony. He testified without equivocation that he paid each and every monthly payment from the date of the policy up to and including the time of trial. On cross-examination he was uncertain as to some specific dates, but did not retreat from his position that all monthly payments had been made as required by the terms of the policy.

Defendant offered its office record cards showing the premium for December, 1964 was not paid; that plaintiff was notified the policy had lapsed and upon receiving an application for reinstatement and check the policy was reinstated.

Plaintiff testified he signed the reinstatement application because the Company had his premium payments.

It was within the province of the court to judge the credibility of the witnesses and the weight to be given their testimony, and to resolve conflicts and inconsistencies in the testimony of any one witness as well as the testimony of different witnesses. Austin Fire Ins. Co. v. Adams-Childers Co., 246 S.W. 365 (Tex.Com.App., 1923). The court will look to all the testimony of the witness to determine its legal sufficiency to support the findings of judge or jury that are essential to the case of the prevailing party. Travelers Ins. Co. v. Blazier, 228 S.W.2d 217 (Fort Worth Civ.App., 1950, dism.).

The trier of facts may believe only part of the testimony of both plaintiff and defendant and base its conclusions accordingly. 24 Tex.Jur.2d 395, § 725.

A finding will be sustained in the appellate court if there is any substantial legal evidence upon which a trier of the facts might base it. Bussan v. Donald, 244 S.W.2d 271 (Fort Worth Civ.App., 1951, ref., n. r. e.); 24 Tex.Jur.2d 420, § 741. Fact findings may embody inferences deducible from the evidence. Dunagan v. Bushey, 152 Tex. 630, 263 S.W.2d 148 (1953); Adams v. Slattery, 295 S.W.2d 859 (1956); Fitz-Gerald v. Hull, 150 Tex. 39, 156 Tex. 433, 237 S.W.2d 256 (1951).

The findings of the trial court in a nonjury case are to be interpreted in the light of the pleadings and proof in the case, and so as, if possible, to sustain the judgment rendered. Daniels v. Wight, 249 S.W. 454 (Tex.Com.App.1923); Elder, Dempster & Co. v. Weld-Neville Cotton Co., 231 S.W. 102 (Tex.Com.App., 1921).

An appellate court will not disturb the fact findings of the trial court if there is some evidence of probative force to support the same, viewing the evidence in the light most favorable to the successful party and indulging every legitimate conclusion that is favorable to him. Googins v. E. W. Hable & Sons, 237 S.W.2d 705 (Waco Civ.App., 1951, ref., n. r. e.).

Viewed in the light of the foregoing rule, it is our opinion the evidence was sufficient to support the trial court’s findings, and, further, the findings were not against the great preponderance of the evidence.

We affirm on the basis of the trial court’s findings, only two of which we have mentioned, that the policy had never lapsed for nonpayment of premiums.

Even if the policy lapsed and had been reinstated as claimed by defendant, we would affirm on the ground set out in plaintiff’s counterpoint, towit: “The trial court correctly entered judgment for appellee, because, even assuming that the policy did lapse, which it conclusively did not, the policy was reinstated and the appellee was. reinstated under the same identical policy which covered the losses caused by cancer, to the same extent and exactly as if the policy had never lapsed.”

The policy provision to which reference is made provides that upon reinstatement the insurer and the insured “shall have the same rights thereunder as they had under the Policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon (on application for reinstatement) or attached hereto in connection with the reinstatement.” There were no provisions endorsed on the application for reinstatement in the instant case or attached thereto.

In State Mut. Life Ins. Co. v. Rosenberry, 213 S.W. 242 (Tex.Com.App., 1919), it was held: “* * * we think that the better rule and the one that would come nearer doing justice is to regard the contract for reinstatement, not as a new contract of insurance, but as a waiver of the forfeiture, thus restoring the policy and making it as effective as if no forfeiture had occurred, but reserving the right of the company to avoid the effect of the reinstatement by showing, if it can, that the reinstatement was induced by unfair and fraudulent means.” The above rule is cited in 32 Tex.Jur.2d 156, § 80 as the rule in Texas. It is also the majority rule. Tatum v. Guardian Life Ins. Co., 2 Cir., 75 F.2d 476, 98 A.L.R. 341-345. See Business Men’s Assurance Co. of America v. Scott, 17 F.2d 4 (Cir.Ct. of App., 8th Cir., 1927); 275 U.S. 531, 48 S.Ct. 28, 72 L.Ed. 410.

Defendant relies strongly upon the holding by the Supreme Court of Arkansas in Mutual Benefit Health & Accident Ass’n v. Moore, 196 Ark. 667, 119 S.W.2d 499 (1938), for its contention that a lapse of the policy before it had run continuously for six months, and a subsequent reinstatement would not have reinstated the policy as insurance against cancer because there was no such insurance till the expiration of the six months’ period, and since such insurance did not exist in this case at the time of the lapse it could not be reinstated.

We fail to find any reference in the Mutual Benefit Health & Accident Ass’n case to a provision like unto the provisions regarding reinstatement contained in the instant policy.

In any event, we decline to follow the holding in the Arkansas case.

In Texas the purpose of an insurance contract is to furnish an indemnity against loss, so, the contract should be construed in such way as to effectuate that purpose, rather than in a way which will defeat it. Home Ins. Co., New York v. Springer, 131 S.W.2d 412 (Fort Worth Civ.App., 1939, no writ hist.); Texas Lloyds v. Laird, 209 S.W.2d 937 (Galveston Civ.App., 1948, dism.). It is a settled rule of insurance law that the language of a policy which is susceptible of more than one construction will be interpreted strictly against the insurer and liberally in favor of the insured. Providence Washington Ins. Co. v. Proffitt, 150 Tex. 207, 239 S.W.2d 379 (1951).

We affirm the trial court judgment, first, because the policy never lapsed, and, second, even if it did lapse, the reinstatement provision contained in the policy fully protected plaintiff in his loss.

Affirmed.