author: WALTER, Justice.

text:
    RAPID TRANSIT LINES, INC., Appellant, v. TRANSIT ADS, INC., Appellee.
    No. 4001.
    Court of Civil Appeals of Texas. Eastland.
    Feb. 4, 1966.
    Rehearing Denied March 25, 1966.

      Baker, Botts, Shepherd & Coates, Hof-heinz & James, Houston, for appellant.
    Brown, Kronzer, Abraham, Watkins & Steely, Houston, for appellee.
   WALTER, Justice.

Transit Ads, Inc., recovered a judgment against Rapid Transit Lines, Inc., for breach of contract and Rapid Transit has appealed. It asserts that it was never legally bound by Transit Ads’ contract; that it was entitled to a judgment on the basis of the jury findings; that plaintiff’s judgment is based on the doctrine of anticipatory breach and, as a matter of law, it is not applicable and the court erred in rendering judgment for $209,136.10 because that sum includes $134,250.00 attributable to a five year period immediately after April 30, 1965. It being its contention that Transit Ads’ rights in this five year period were dependent upon a condition precedent which did not occur. It also contends the charge contains several errors.

Irwin Winston was president of Transit Ads, Inc. This company was in the transportation advertising business. Transportation Advertising Sales had a contract with Houston Transit Company to handle the advertising on its buses. Transportation Sales assigned its interest in the contract to Transit Ads. Thereafter Houston Transit and Transit Ads entered into a new contract, dated April 14, 1960. This contract provided in part the following:

"THIS AGREEMENT, made this 14th day of April, 1960, between Houston Transit Company of Houston, Texas, hereinafter called the party of the first part and the Transit Ads, Inc. of Houston and the state of Texas, hereinafter called the party of the second part.
WITNESSETH: That the party of the first part for itself, its successors and assigns has let and by these present does let and license, unto the party of the second part, its successors, assigns and legal representatives, sole and exclusive advertising rights and privileges in, upon and about all of the buses now or hereafter owned or controlled by or operated by the party of the first part or upon any of its lines for and during a period commencing on the 1st day of May, 1960, and ending the 30th day of April, 1965. TRANSIT ADS, INC. shall have the option to extend the term of this contract for an additional period of 5 years on condition that the Houston Transit Company franchise with the City of Houston shall be extended to coincide with the above mentioned extension. Transit Ads, Inc. shall notify Houston Transit of its election to exercise said option in writing on or before 12 months prior to the expiration of the original term hereof.
IN consideration of the exclusive advertising privileges granted herein the party of the second part agrees to pay the party of the first part a sum equal to fifty (50%) percent of the gross sales (gross sales shall be construed to mean less only (a) cost of painting to be deducted in the following fashion: curb and traffic side painted spectaculars $10.00 for each position; painted rear displays $5.00 per month, (b) legitimate advertising agency commissions actually paid by Transit Ads, Inc.) collected of the advertising sold by the party of the second part and carried by the party of the first part for any person, firm, corporation, or advertising agency for advertising placings in or about such buses during each month that this contract remains in force. The party of the second part agrees to send the party of the first part a monthly statement of collections made during the previous month together with a check for 50% of these collections.
THIS contract is not assignable or transferable without the consent of both parties.”

Bernard E. Calkins, president of Rapid Transit Lines, testified substantially as follows: Rapid Transit Lines was organized for the purpose of acquiring a franchise from the City of Houston; Houston Transit Company was operating the buses in the City of Houston under a franchise before we took over; Houston Transit stack was acquired for the purpose of acquiring its physical assets that could be used under the new franchise; I made a study and was familiar with the assets and liabilities of Houston Transit; I was aware of the fact that Transit Ads was handling the advertising for Houston Transit and had a contract with it; I had studied the details of such contract before I purchased Houston Transit; I took over Houston Transit on May 25, 1961; Houston Transit has been dissolved; Rapid Transit acquired all of its assets; Rapid Transit Lines commenced operating its buses in Houston on June 1, 1961; I recognized Transit’s contract insofar as Houston Transit was concerned up to May 31; I do not contend that Winston did anything or failed to do something that caused me to terminate the contract; I am saying that the contract was an obligation of Houston Transit Company and it ended when its franchise terminated. I did not learn that Transit Ads had paid $55,000.00 for its contract for some two months after I took over operation of the buses.

Referring to Transit Ads’ April 14, 1960, contract, Mr. Calkins said: “* * * I never said and do not take the stand that I do not assume the obligations under the contract under the Houston Transit Company, and up to the time when the Houston Transit Company operated under the franchise with the City of Houston, but I, as Rapid Transit Lines, have never negotiated a contract with Mr. Winston.”

Mr. Calkins was asked the following question: “During the period then up to June 1st, 1961, the period I am now directing your attention to, did you ever state to Mr. Winston, take the position with him the contract was not binding, not obligating on the Houston Transit Company?” and he gave the following answer, “I think it was pretty well discussed. It was our feeling the contract would not be binding on Rapid Transit, which would be taking over June 1st and that — I did not ever state that it was not binding on Houston Transit Company for whatever obligation may be there.”

The Special Issues that were answered are as follows:

“SPECIAL ISSUE NO. 1
Do you find from a preponderance ef the evidence that on or before June 1, 1961, Bernard E. Calkins expressly communicated to Transit Ads, Inc., an unequivocal repudiation of any liability or obligations on the part of Rapid Transit Lines, Inc., to Transit Ads, Inc., by virtue of the written contract dated April 14, 1960, being Exhibit 5 in evidence herein ?
ANSWER: ‘We do.’”
“The term ‘repudiation’ as used in the foregoing issue means a present, distinct, and absolute denial by a party of any obligation under or by virtue of a contract; and a mere assertion by a party that he will refuse to perform a contract at some future time does not constitute a breach or repudiation of such contract.”
“SPECIAL ISSUE NO. 2
“Do you find from a preponderance of the evidence that Transit Ads, Inc. rendered substantial performance of the written contract, dated April 14, 1960, being Exhibit 5 in evidence herein, after the execution of such contract until June 1, 1961 ?
ANSWER: ‘Wedo.’”
“SPECIAL ISSUE NO. 3
Do you find from a preponderance of the evidence that Carl B. Frazier executed the written contract, dated April 14, 1960, being Exhibit S in evidence herein, within the scope of his actual authority as president of Houston Transit Company ?
ANSWER: ‘We do.’”
•“SPECIAL ISSUE NO. 4
Do you find from a preponderance of the evidence that Carl B: Frazier executed the written contract, dated April 14, 1960, being Exhibit 5 in evidence herein, as the apparent agent of Houston Transit Company?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 5
Do you find from a preponderance of the evidence that following the execution of the written contract, dated April 14, 1960, being Exhibit 5 in evidence herein, Houston Transit Company ratified such written contract ?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 6
Do you find from a preponderance of the evidence that Transit Ads, Inc. materially relied upon the provisions of the written contract, dated April 14, 1960, being Exhibit 5 in evidence herein, for the original term of five years and for an option to extend the term an additional five years, as a material inducement for undertaking the performance of such contract?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 7 .
Do you find from a preponderance of the evidence that Bernard E. Calkins had actual knowledge of such reliance, if any, before Rapid Transit Lines, Inc. was incorporated ?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 8
Do you find from a preponderance of the evidence that before the incorporation of Rapid Transit Lines, Inc., Bernard E„ Calkins, by the exercise of reasonable diligence and prudence, should have known of such reliance, if any?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 9
Do you find from a preponderance of the evidence that such reliance, if any, was "known by Rapid Transit Lines, Inc. before the properties and assets of Houston Transit Company were transferred, conveyed and assigned to Rapid Transit Lines, Inc.?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 10
Do you find from a preponderance of the evidence that Transit Ads, Inc., through its President Irvin Winston after June 1, 1961, caused to be made materially false and fictitious entries in the books of account of Transit Ads, Inc. for the month of May, 1961, for the purpose of concealing the facts concerning true collections ?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 11
Do you find from a preponderance of the evidence that Transit Ads, Inc. through Irvin Winston after June 1, 1961, willfully and intentionally made a materially false report of collections for the purpose of attempting to withhold funds collected during May of 1961 ?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 12
Do you find from a preponderance of the evidence that before June 1, 1961, Transit Ads, Inc. willfully and intentionally made materially false reports of collections for the purpose of attempting to withhold funds from the Houston Transit Company?
ANSWER: ‘We do not.’”
“SPECIAL ISSUE NO. 13
Do you find from a preponderance of the evidence that such act, if any you have found, or such acts, if any you have found, are so inconsistent with the relationship between the parties as to justify the termination of the relationship?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 14
From a preponderance of the evidence, which of such acts, if any you have found, justify the termination of the relationship ?
ANSWER: ‘Acts defined in Special Issues #10 and #11.”
“SPECIAL ISSUE NO. 15
Do you find from a preponderance of the evidence that from June 1, 1961, until September 1, 1961, Rapid Transit Lines, Inc. continued to allow the employees of Transit Ads, Inc. free access to the buses for the purpose of placing their advertisements on such buses?
ANSWER: ‘We do.’”
“SPECIAL ISSUE NO. 16
Do you find from a preponderance of the evidence that the memorandum of agreement dated April 14, 1960 resulted from a plan by A. D. Martin to deprive Houston Transit Company of a valuable corporate asset fraudulently and without payment of funds to the Houston Transit Company ?
ANSWER: ‘We do not.’”
“SPECIAL ISSUE NO. 19
Do you find from a preponderance of the evidence that from June 1, 1961 until September 1, 1961 Irvin Winston as President of Transit Ads, Inc. elected to waive any claim of damages by reason of any prior repudiation, if any, of the written contract of April 14, 1960, exhibit 5 herein ?
ANSWER: ‘We do not.’”
“SPECIAL ISSUE NO. 20
What sum of money, if any, do you find from a preponderance of the evidence to be the present cash value of such net profits, if any, that Transit Ads, Inc. would in reasonable probability have made if it had continued in the use, development and sale of advertising material and space in accordance with the provisions of the written contract, dated April 14, 1960, being Exhibit 5 in evidence herein, taking into account the following elements to the extent, if any, that they are established by a preponderance of the evidence, and none other:
(1) The reasonable present cash value of such net profits, if any, as Transit Ads, Inc. would have made from and after June 1, 1961, until April 30, 1965.
ANSWER: $85,000.00.
(2) The reasonable present cash value of such net profits, if any, as Transit Ads, Inc. would in reasonable probability have made during the five year period immediately following April 30, 1965.
ANSWER: $134,250.00.”

Rapid Transit was a mere continuation of Houston Transit and was a “successor” within the meaning of the April 14, 1960, contract. Article 5.06, Texas Business Corporation Act, V.A.T.S.

Rapid pleaded that it had no legal obligation to honor the Transit Ad contract. Its president testified distinctly and unequivocally that the contract was not binding on his company. The record reveals that Rapid did not recognize and refused to perform under the agreement. The foregoing and other facts and circumstances in evidence established an anticipatory breach of the contract. Pollack v. Pollack (Com.App.), 46 S.W.2d 292; Continental Casualty Company v. Boerger, Tex.Civ.App., 389 S.W.2d 566 (writ dismissed).

Appellant’s position that Transit did not accept such repudiation and treat it and act upon it as such cannot be sustained. It contends that the contract was left open during the disputed period from June 1, 1961, to September 7, 1961, because both parties were performing under the contract. Jt is true that Calkins recognized his obligations under the contract insofar as Houston Transit was concerned.

Appellants contend that this conduct on the part of both parties and the answer to issue number fifteen constitute performance under the contract. The record conclusively shows that such activity on the old buses was not permitted by Calkins as an obligation under the contract insofar as Rapid was concerned, but was permitted as Houston Transit’s obligation. Calkins never did take the position with Winston that the contract was not binding on Houston Transit:

“Q. So that as of the day June 1st, 1961, so far as Rapid Transit Lines were concerned, you considered and told Mr. Winston that he had no binding contract with that company?

A. That is right. And the telegram bears that out.”

Calkins sent Winston a telegram on June 1, 1961, which reads as follows:

“RAPID TRANSIT LINES HAS TAKEN OVER OPERATION OF TRANSIT SERVICE IN HOUSTON EFFECTIVE TODAY, JUNE 1, 1961. AS YET WE HAVE NOT RECEIVED YOUR PROPOSAL FOR ADVERTISING' SPACE AS DISCUSSED PREVIOUSLY.”

Sometime thereafter Winston prepared a contract and submitted it to Calkins. It was not acceptable to him and was refused. During such time the parties considered that the old contract had been repudiated by Rapid and that Transit had accepted such repudiation. Otherwise, Rapid would not have requested a new contract and Transit would not have prepared a new one. In Continental Casualty Company v. Boerger, supra, the court said:

“ ‘No notice need be given by plaintiff that he treats defendant’s repudiation as a breach. Nothing more is necessary than bringing the action, and this should be allowed at any time before the repudiation is withdrawn.’ Henry W. Ballentine, ‘Anticipatory Breach,’ Select Readings on the Law of Contracts, Association of American Law Schools 1931, p. 1085.”

Appellant contends it was justified m terminating the contract because Winston made false entries in his books and made false reports of collections for the purpose of withholding funds. In issues ten and eleven the jury found that Winston, after June 1, 1961, made false entries in its books for the month of May, 1961, and made a false report of collections for that month.

Transit contends that the contract was breached on June 1, 1961. Appellant contends that the breach, if any, occurred in September when it refused Winston access to the new buses. Transit says: “Thus, our position is alternative when we urge that this is truly an actual breach of contract case in which there has been an entire repudiation of obligation at the time for performance, and that also under these circumstances the alleged subsequent improper accounting is totally immaterial.”

Winston testified that after his discussion with Calkins he was faced with the possibility of not being able to continue and he instructed his accounting department to withhold some of the money so that he could recoup some of his losses; that after Calkins had repudiated the contract, he returned to his office in New Orleans in June, 1961, and made some changes in his books; that the Jim Wright collection was not the only one that was changed, “There was a bunch of them that month”; that he has never returned the money but said: “The money is being held in one of our accounts and, as counsel told you, it is available as part payment for any judgment I may receive in this case.”

The record establishes that Rapid was given credit on the judgment for this amount which had been tendered in Transit’s pleadings.

Winston made false entries in his books and made false reports of collections after June 1, 1961. Can Calkins rely upon Winston’s breach to avoid liability? Calkins testified that Winston did not do anything that caused him to take the position that Rapid was not obligated under the agreement. Winston’s conduct in making the false entries in his books was not known to Calkins on or before June 1, 1961, when he communicated to Transit an unequivocal repudiation of any liability under the contract.

The jury found in answer to issue number two that Transit rendered substantial performance of the contract until June 1, 1961; that in answer to issue number one Calkins on or before June 1,1961, communicated his repudiation of the contract. Rapid took over and started its operation on June 1, 1961. On or before such date it had totally breached the contract when the time for performance was at hand. “Again, when one party repudiates his agreement or declines to perform it at the time when performance on his part is due, this is in itself a breach of the contract which discharges the other party and gives him a cause of action without any affirmative action on his part.” 1Q-A Texas Jur.- (Rev.), § 272, page 551.

In Haddaway v. Smith et al., Tex.Civ.App., 277 S.W. 728 (no writ history), the court said:

“If a party to a contract repudiates it or refuses to perform it when the time for performance on his part is due, it amounts to a breach, which operates as a discharge of the other parties. 5 Page on the Law of Contracts, par. 2908. The law of anticipatory breaches is not applicable to appellant’s failure to perform in this case because performance on his part was due January 1st, and he was under contractual obligations to perform on the day named, and, on his repudiation of his contract, a cause of action arose against him without any affirmative action on the part of plaintiffs or the purchasers.”

Appellant contends that the court erred in entering judgment for $209,136.10, because the sum includes $134,136.10 attributable to the five year option period after April 30, 1965. It contends that Transit’s rights to this five year period was dependent upon the Houston Transit Company’s franchise with the City of Houston being extended as provided for in the contract quoted above. We think this contention is without merit. We have been unable to find any authority supporting appellant’s contention.

Appellant’s fourth proposition is that “Rapid Transit Lines, Inc. was never legally bound by Transit Ads’ contract.” The agreement provides that the contract is not assignable without the consent of both parties. We believe that when Transit filed its suit on the contract that would be in legal contemplation an indication that it had consented to the assignment. Houston Transit, in effect, consented to the assignment when its stock was sold by its holding company to Rapid. “Contracts otherwise unassignable because of the personal nature of the subject matter may be assigned if the other party gives his consent, which may be ascertained from circumstances surrounding the parties and the language in the contract itself.” 6 Tex.Jur.2d, § 18, pages 413 and 414.

Appellant’s contention is that the contract in question was not a balance sheet liability and, therefore, it is not legally bound by such contract. We think this contention is without merit because Rapid was a mere continuation of Houston Transit in the bus business. There was, in effect, a consolidation of the two companies. In American Surety Company of New York v. M-B Ise Kream Company, Tex.Civ.App., 38 S.W.2d 118, the court said:

“The purchase of the assets of one corporation by another, as declared by 7 R.C.L. p. 183, are very similar, in the matter of the liability of the purchaser for the debts of the seller, to the liability of an individual who purchases the assets of a debtor, and the purchasing corporation does not, merely by reason of the purchase, become liable for the debts of the selling corporation. In the same paragraph the same authority states a general rule of law that is controlling in the instant case: ‘So it may be stated as a general rule that in order to render the purchasing company personally liable for the debts of the selling corporation, it must appear that (a) there be an agreement to assume such debts; (b) the circumstances surrounding the transaction must warrant a finding that there was a consolidation of the two corporations; or (c) that the purchasing corporation was a mere continuation of the selling corporation ; or (d) that the transaction was fraudulent in fact. * * *

Appellant contends that the court’s charge contains errors of omission and commission. At the outset we are confronted with appel-lee’s contention that the points of error under appellant’s fifth proposition constitute a shotgun attack upon the court’s charge in that its assignments in its motion for a new trial do no more than make general references to other motions and do not clearly identify the ground of error upon which it relies.

Point number twenty is as follows: “The trial court erred in submitting Special Issue No. 1 and basing his judgment upon the jury’s finding to such Special Issue and overruling amended motion for new trial because the Special Issue fails to advise the jury that there can be no anticipatory breach where a party is in good faith actively engaged in the performance of the contract. (Germane to paragraph XXXVII of Amended Motion for New Trial)”

Paragraph XXXVII of appellant’s amended motion for a new trial is as follows: “Defendant prays that the Court grant it a new trial because of the Court’s failure to grant objection 1(e), and in that connection would show the Court that Special Issue No. 1 was improperly submitted, and was prejudicial and reversible error because the issue submitted is excessively vague and indefinite and does not inquire about specific acts or specific statements alleged to constitute a ‘unequivocal repudiation’ and thus the issue is in effect a global issue, too broad and indefinite.”

It will be noted that this assignment refers to objection 1(e) without identifying the instrument where it may be found.

Points numbers twenty-three through thirty-four are said to be germane to paragraph XII(d) of appellant’s motion for new trial. Paragraph XII (We are unable to find a XII (d) in the motion.) of the motion is as follows:

“Defendant moves the Court to grant a new trial because the Court erred in overruling paragraph XI of defendants’ motion for judgment and to disregard certain jury findings.”

There is no statement in the brief that Points numbers thirty-eight, forty-five and forty-six are germane to any assignment of error as required by Rule 418(b), Texas Rules of Civil Procedure.

In Wagner v. Foster, 161 Tex. 333, 341 S.W.2d 887, the Supreme Court, in a Per Curiam opinion, said:

“Rules 320, 321, 322 and 374 govern the form of assignments of error in motions for new trial which become the basis for points of error on appeal. Rule 320 provides that the motion ‘shall specify each ground on which it is founded, and no ground not specified shall be considered.’ Rule 321 requires that the assignments in the motion refer to the action of the court complained of ‘in such way as that the point of objection can be clearly identified and understood by the court.’ Rule 322 directs that ‘Grounds of objections couched in general terms * * * shall not be considered by the court.’ Rule 374 provides that ‘A ground of error not distinctly set forth in the motion for new trial, in cases where a motion for new trial is required shall be considered as waived.’ ”
“Assignments of error in a motion for new trial which do no more than adopt from or refer in general terms to other motions, etc. do not ‘specify’ or ‘distinctly set forth’, or ‘clearly identify’ a ground of error.”

We are of the opinion that the assignments of error in appellant’s motion for a new trial do not distinctly set forth the grounds of error upon which appellant relies in the points considered above. Wagner v. Foster, supra; Tindall v. Tacconelly, Tex.Civ.App., 328 S.W.2d 909, (writ ref. n. r. e.). However, we will consider appellant’s points so that if we are mistaken about such ruling it will not be necessary for the Supreme Court to remand the case to this court for the purpose of passing upon such points.

We have considered all the evidence and find that the jury’s answers to issues numbers 1, 2, 6, 7, 8, and 9 are not against the great weight and preponderance of the evidence. In Re King’s Estate, 150 Tex. 662, 244 S.W.2d 660.

We conclude that the evidence set out above and other facts and circumstances in evidence constitute some evidence of probative force and support the answers to issues numbers 1, 2, 6, 7, 8, and 9.

We have considered all of appellant’s points and find no merit in them. They are overruled.

The judgment is affirmed.


source: Caselaw Access Project

author: HIGHT.GWER, Chief Justice.

license: Public Domain

text:
    FEDERAL INSURANCE COMPANY et al., Appellants, v. George D. FORRISTALL et al., Appellees.
    No. 6667.
    Court of Civil Appeals of Texas. Beaumont.
    March 31, 1966.
    Rehearing Denied April 20, 1966.

      Wells, Duncan & Beard, Keith, Mehaffy & Weber, Beaumont, for appellants.
    Weller, Wheelus & Green, Orgain, Bell & Tucker, Beaumont, for appellees.
   HIGHT.GWER, Chief Justice.

This is a suit for declaratory judgment in which the appellees, George D. Forristall and his son, George Z. Forristall, a minor, sought judgment by the 136th Judicial District Court requiring the appellants, Gulf Insurance Company, Federal Insurance Company, and Zurich Insurance Company to defend a suit which had been filed against them in the district court of Jefferson County, Texas, 60th Judicial District, by C. E. Vallee, Jr. In the damage suit in the 60th Judicial District Court, C. E. Val-lee, Jr. sought to recover damages against George D. Forristall, George Z. Forristall, and W. H. Marlow of $1,630.00 for damages to the Vallee automobile.

The petition filed by C. E. Vallee, Jr. in the damage suit in the 60th District Court of Jefferson County, Texas, contained the following allegations: .

“That on or about April 10, 1960, your plaintiff properly parked his 1960 Pontiac automobile at the Beaumont Country Club in a safe and proper place. The defendant, George Z. Forristall, at such time was driving an automobile owned by the defendant, George D. Forristall, his father, with his father’s consent and permission. While so operating said vehicle the defendant, George Z. For-ristall, parked the same immediately behind your plaintiff’s vehicle. Later the defendants, George Z. Forristall and William H. Marlow, desiring to leave the Country Club premises in the Forristall vehicle, found that they were unable to do so because they were parked between plaintiff’s automobile and another automobile. Said defendants, in order that they might use the Forristall automobile and in order to extricate it from the place where it was parked between plaintiff’s automobile and another, decided that they would enter your plaintiff’s automobile and release the gearshift from parked position and put it in motion, shoving it a sufficient distance to get clearance to enable them to drive said Forristall automobile from such parking place. At the time and on the occasion in question it was then apparent, or in the exercise of ordinary care, should have been apparent to the defendants, George Z. Forristall and William H. Marlow, that plaintiff’s vehicle as well as other vehicles were parked on an incline and that in moving the same it would be necessary to maintain it under control to keep it from rolling down said incline to the adjacent river. Nevertheless, the defendants, George Z. Forristall and William H. Marlow, put your plaintiff’s automobile in motion and shoved it with sufficient force that it rolled down an embankment and crashed into the boathouse and went into the river, as a result of which your plaintiff suffered damages as hereinafter set forth.”

The acts of negligence set out in the Val-lee damage suit against the appellees, George D. Forristall and George Z. Forris-tall, were the following:

(1) Defendant, George Z. Forristall, without the consent of plaintiff, manipulated the gear-shift of the plaintiff’s automobile for the purpose of setting said automobile in motion, in violation of Article 1343 of the Penal Code of Texas;
(2) Defendant, George Z. Forristall, shoved plaintiff’s automobile when it was on an incline;
(3) Defendant, George Z. Forristall, failed to properly control plaintiff’s vehicle ;
(4) Defendant, George D. Forristall, entrusted his automobile to his minor son, a known incompetent driver;
(5) Defendant, George D. Forristall, in violation of Article 6687(b) Section 35, Texas Revised Civil Statutes, permitted his minor son, George Z. Forristall, to drive a motor vehicle when the said minor did not have a valid Texas Driver’s License.

Gulf Insurance Company had issued to George D. Forristall a family automobile policy. Federal Insurance Company had issued a Texas standard comprehensive dwelling policy to George D. Forristall and wife, Dorothy Z. Forristall, of 1250 Oak- crest Circle, Beaumont, Texas. The policy carried a “coverage group C-comprehensive personal liability’ endorsement. Zurich Insurance Company had issued a family automobile policy insuring C. E. Vallee, Jr.

After service of citation on the For-ristalls in the damage suit pending in the 60th Judicial District Court, they tendered defense of the cause to Gulf and Federal Insurance Companies and both refused to defend the case. In addition, the For-ristalls demanded that Zurich Insurance Company defend the case brought by Vallee against the Forristalls. Zurich was the automobile carrier for Vallee, and apparently the contention was that young For-ristall was an “omnibus” insured using the Vallee car with the implied permission of the owner.

This case was tried without a jury and at the conclusion of the case, judgment was entered substantially to the effect that both Federal and Gulf should defend the suit pending in the 60th Judicial District Court brought by Vallee against the Forristalls. Becausé of the difference in the policy limits, Gulf’s liability was prorated ¼ and Federal’s, ¾. In addition thereto, the court made an award of $1,000.00 attorneys’ fees to the Forristalls.

The trial court exonerated the Zurich Company of any liability to the Forristalls in the declaratory judgment and no appeal has been perfected against said company. Since that part of the judgment has become final, we consider only the appeals of Federal and Gulf.

Essentially, the points of error upon which Federal and Gulf predicate their appeal are the same. Each contend (1) that the judgment requiring them to defend the suit in the 60th District Court should be reversed and rendered because neither of their policies provide coverage for the incident in question; (2) the award of attorneys’ fees is excessive. Additionally, Federal urges error of the trial court in holding Federal had waived any defenses under its policy by reason of having made an investigation of the incident.

We first determine the merits of Federal’s contentions.

Federal’s policy provides:

“Division 1 — Comprehensive Personal Liability:
“A. Bodily Injury; Property Damage: This company agrees to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * and as damages because of injury to or destruction of property, including the loss of use thereof.
“C. Defense, Settlement, Supplementary .Payments With respect to such insurance as is afforded by this policy for the liability coverages, this company shall:
“(a) defend any suit against the insured alleging such injury, sickness, disease, or destruction and seeking damages on account thereof, even if such suit is groundless, false, or fraudulent; but the company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient.”

Our attention is called to the well-established general rule that the insurer is required to defend only those cases which come within the “coverage” afforded by the policy under consideration and that the cases go one step further and hold that the insurer is entitled to rely upon the allegations contained in a plaintiff’s petition in determining whether a particular state of facts comes within the coverage of the policy. In the case of Maryland Casualty Co. v. Moritz, 138 S.W.2d 1095 (Tex.Civ.App.1940, wr. ref.) the court stated the following:

“ * * * testing the liability of the insurer to defend, the proof is not material. Liability depends upon the allegations of the plaintiff’s petition.”

Alluding to the allegations of the plaintiff in the Vallee damage suit hereinbefore first set out, it is the contention of Federal that the following exclusions in its policy specifically exclude coverage when examined in the light of the facts alleged by the plaintiff in the Vallee damage suit:

“Special Exclusions Appliable to Coverage Group C
“This coverage does not apply:
“(b) to the ownership, maintenance, operation, use, loading or unloading of (1) land motor vehicles * * * while away from the premises or the ways immediately adjoining * * *.
“(f) Under Division 1, to injury to or destruction of property used by, rented to or in the care, custody or control of the insured, or property as to which the insured for any purpose is exercising physical control * *

Federal argues that it is obvious from the allegations contained in the Vallee damage suit petition that George Z. Forristall was making “use” of the Forristall automobile as well as the Vallee automobile; that it is obvious, also, that George Z. Forristall was exercising “physical control” over the Vallee automobile. And since George Z. Forristall was “using” the Vallee automobile away from the premises (at the Beaumont Country Club and away from 1250 Oakcrest Circle) and exercising “physical control” over said automobile, the Federal policy does not provide coverage and Federal is not obligated, therefore, to defend the Vallee damage suit. They contend that one does not have to be driving an automobile to be “using”, “operating” or exercising “physical control” over the automobile.

Appellees assert against Federal’s contention that young Forristall was not operating or using the Vallee car; that said car was not under his custody or control and that he was not exercising physical control of said car within the meaning of the “Special Exclusions”, Sections “(b)” and “(f)” hereinabove set out.

We do not agree with all of Federal’s contentions. We are aware of the general rule that an insurance policy should be construed favorably to the insured and if the language of a policy admits of more than one construction, that most favorable to the insured must be adopted. McCaleb v. Continental Casualty Co., 132 Tex. 65, 116 S.W.2d 679. We do not believe that in the every-day, commonly accepted meaning of the phrases in Exclusion C(f), supra, the Vallee car was being used by, or in the care, custody or control of young Forristall, or that the pleadings in the Vallee damage suit should be construed as having so alleged. To the contrary, however, we believe that the Vallee pleadings, in such connection, should be construed as alleging only an exclusion of liability under a part of Group C(f), supra, same being “or property as to which the insured for any purpose is exercising physical control.” We make a specific distinction between the phrases of “having custody or control”, “use” and “exercising physical control”, and we are of the opinion that said Section (f) of Group C of Federal’s policy, supra, also clearly makes such distinction. Young Forristall released the “park” or brake on the Vallee car and manually shoved it a sufficient distance to get clearance for the Forristall car. He did not have permission of Vallee to do so but, nevertheless, we have concluded from his actions that he “exercised physical control” within the meaning of the exclusion in Federal’s policy. The distinction above made was on the hypothesis that the Vallee car was a log directly blocking the Forristall car. Had young For-ristall and Marlow proceeded to lift the log out of the path of the Forristall car, they would not have been using same, but would only have been destroying its effectiveness as a barrier. On the other hand, had they lifted said log and attempted to use the same on the Forristall car as a jacklift, assuming such was necessary for any reason, then we would necessarily hold that said log was being used by them.

The Vallee damage suit being against George D. Forristall, as well as his son, the question also arises whether the Federal policy could afford coverage for the father and not the son. In such connection, Federal argues that the accident having occurred away from the Forristalls’ premises that there is only one possibility of the policy affording coverage to George D. For-ristall for an accident growing out of the ownership, maintenance, operation and use of a motor vehicle, and that is if the accident had occurred on the premises or the ways immediately adjoining.

Exclusions applicable to coverage Group C(b) provides specifically that if an accident involving the use of an automobile occurs away from the premises then there is no coverage. Thus, as to young Forristall, Exclusions (b) and (f) apply and exclude coverage. As to the father, Exclusion (b) applies and excludes coverage. Federal’s contentions of no liability to defend are sustained.

Federal’s next contention in reply to ap-pellees’ 3rd counterpoint regards the trial court’s conclusion of law to the effect that Federal had waived its defenses under its policy. In such connection, the record reflects that C. Villiva, an adjuster and agent for Federal, investigated the facts of the claim prior to the time suit was filed by Vallee against the Forristalls and advised:

“Our investigation would indicate that George Forristall, Jr. took the Vallee ear out of gear and was then pushing it, and consequently it is our position that the Vallee car was in charge of and under the physical control of George Forristall, Jr. at the time of this incident, and therefore we would have no coverage in this instance.”

Federal in denying coverage refused to defend either of the Forristalls on the claim against them stating:

“We refer you, in our insured’s policy, to the provision referring to physical control of property and the provision referring to use of automobiles away from the insured’s premises.”

In rebuttal, appellees contend that even though a petition in a damage suit against the insured may have alleged facts that relieved the insurer of its duty to defend, the insurer is under a duty to ascertain facts of cause of action before declining to defend, citing Trinity Universal Ins. Co. v. Bethancourt, Tex.Civ.App., 331 S.W.2d 943; Massachusetts Bonding & Ins. Co. v. Roessler, Tex.Civ.App., 112 S.W.2d 275.

We infer from such rebuttal that appel-lees would hold that by investigating the facts of the case, Federal waived the right to assert the exclusion provisions as defenses. The trial court made such a finding.

The general rule is that waiver or estoppel cannot be invoked so as to bring a loss not within the coverage of a policy within such coverage.

“Thus, a loss not within the coverage of a policy cannot be brought within such coverage by invoking the principle of waiver or estoppel * * Apple-man’s Insurance Law and Practice, Vol. 17, p. 16, § 9404.
“Conditions going to the coverage or scope of a policy as distinguished from those furnishing a ground for forfeiture may not be waived by implication from conduct or action * * Appleman’s Insurance Law and Practice, Vol. 16, p. 605, § 9083.

The Texas decisions parallel the foregoing general rules. In Washington Nat. Ins. Co. v. Craddock, 130 Tex. 251, 109 S.W.2d 165, 113 A.L.R. 854 (Tex.Com.App.1937), Judge Hickman quoted 32 C.J. p. 1317:

“A waiver cannot operate to bring within the terms of the policy a loss which is expressly excepted therefrom or supply a failure of proof that a loss was covered by the policy.”

The exclusions applicable to coverage Group C of the Federal policy go to the scope of coverage of the policy. Obviously the policy was not designed to provide coverage for the subject case, but to the contrary, was designed to specifically exclude coverage. Waiver or estoppel cannot now be invoked to supply coverage where none was intended.

The investigation made by Mr. Villiva is not sufficient to constitute a waiver even assuming that this is a case where the doctrine could be invoked. Even though Mr. Villiva made the investigation without taking a non-waiver agreement at the same time he did not assure Mr. Forristall that there was coverage, and as soon as all the facts were known expressly denied coverage. This rule is stated in Appleman’s Insurance Law and Practice, Vol. 16, p. 60S § 9083 as follows:

“Conduct and declarations of an adjuster must be inconsistent with a denial of the validity of a policy to support a contention of a waiver. The forfeiture of an insurance policy is not waived by the adjuster stating that he would refer the matter to the company, where he at the same time claims that the company is not liable on the policy. Nor would the acts of an adjuster constitute a waiver where he denied liability as soon as he learned of a breach * *

In other words, an investigation cannot constitute a waiver where contemporaneously therewith the adjuster is asserting there is no coverage. Appellees’ counterpoint relating to waiver by Federal is overruled.

We defer determination of Federal’s and Gulf’s points of error relating to their liability for attorneys’ fees and the exces-siveness thereof, and proceed to determine Gulf’s contentions that the trial court erred in holding the Gulf policy provided coverage for the incident in question because the plaintiff’s petition in the “Vallee damage suit” did not contain allegations invoking coverage under said policy. As stated in the early part of this opinion, Gulf had issued a standard form “family automobile policy” to George D. Forristall, which policy was effective at the time of the incident in question. It provides that Gulf will pay on behalf of the insured (which included both appellees) all sums which the insured shall become legally obligated to pay as damages because of:

“B. Injury to or destruction of property, including loss of use thereof, hereinafter called ‘property damage’; arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile and the company shall defend any suit alleging such bodily injury or property damage or seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent.”

The trial court found that on the occasion in question George Z. Forristall, the minor son of George D. Forristall, was “operating” the owned automobile within the terms of the policy of insurance issued by the defendant, Gulf Insurance Company, at the time he was engaged in unparking the owned automobile. It further found that the use being made by George Z. Forristall of the Forristall automobile at the time of the occurrence was in connection with the parking or unparking of said automobile, and therefore involved the use of the automobile.

Again, as regards Gulf’s duty to defend, the only question is whether or not the allegations of the Vallee petition are within the coverage provided by the Gulf policy. Said policy agreed to indemnify Forristall and his son, operating the car with his father’s permission, of and from liability arising out of the ownership, maintenance or use of the owned automobile.

The petition in the Vallee case reflected, as aforesaid, that the Forristall car was parked close behind the Vallee car, and it was alleged that the movement of the Val-lee car was “in order that they might use the Forristall car and in order to extricate it from the place where they were parked, * * *

Vallee did not allege that his car was injured as a result of the use of the For-ristall car. Vallee alleged that young For-ristall manually pushed the Vallee car into the river and that he was negligent in: manipulating the gear shift on the Vallee car; shoving the Vallee car when it was on an incline; failing to control properly the Vallee car. Nowhere did Vallee say in his petition that young Forristall was negligent in the use of the Forristall car. But, Vallee did allege that the boys were pushing his car manually so that they could later use the Forristall automobile.

The only evidence offered against Gulf was in substance: Gulf’s policy, the plaintiff’s petition in the Vallee case, and the demand made upon Gulf and its refusal to defend.

We sustain Gulf’s contentions that the petition in the Vallee damage suit did not allege facts bringing the damage to the Vallee car within the coverage of Gulf’s policy. We rest this holding on the following portion of the decision of Wiebel v. Am. Farmers Mutual Ins. Co., 1 Storey 151, 140 A.2d 712 (Del.1958).

Wiebel was asked by his neighbor, Scherff, to assist him in starting his (Scherff’s) car. Wiebel drove his car into Scherff’s drive-way and pushed the Scherff car toward the highway. However, this was not totally satisfactory so the two men then manually pushed the Scherff car the remainder of the distance to the highway and onto the highway, fully intending thereafter to use the Wiebel car to push the Scherff car at a high rate of speed to start it. When the two manually pushed Scherff’s car into the highway, a bad accident happened involving third persons. The above suit was brought to declare the coverages to both Wiebel and Scherff under each one’s automobile liability policy.

The Delaware Court held:

(1) Wiebel was not using his own automobile for the purpose of invoking his liability coverage. The Court said that although he had used the car and fully intended to use the car later in the operation and although he was pushing the Scherff car manually so that later he could use his automobile to push the other car, that the manual pushing of the Scherff car did not arise out of, nor was it considered a use of the Wiebel car.

If young Forristall had pushed the Vallee car with his own, then obviously, he would have been using his own car. However, when he elected to push the Vallee car manually, he put aside the use of his own car.

Having concluded that Federal and Gulf were under no duty to defend the For-ristalls by reason of, or omissions in, the allegations contained in the petition of the plaintiff, Vallee, in his suit against the ap-pellees herein, it is unnecessary to determine Federal’s and Gulf’s points of error relating to attorneys’ fees and the excessiveness thereof. The declaratory judgment of the 136th District Court in favor of appel-lees against Gulf and Federal is reversed and judgment is here rendered that appel-lees take nothing against said appellants.

Reversed and rendered.

      . Emphasis added throughout.


author: BARROW, Justice. MURRAY, Chief Justice.

text:
    Aurello LEAL, Appellant, v. Carmen LEAL et al., Appellees.
    No. 14475.
    Court of Civil Appeals of Texas. San Antonio.
    March 17, 1966.
    Rehearing Denied April 6, 1966.
    Werner A. Gohmert, Alice, for appellant.
    Burris & Burris, Alice, for appellees.
   BARROW, Justice.

This is an interpleader action brought by appellee American National Insurance Company, against appellee Carmen Leal, and appellant, Aurelio Leal, to determine ownership of the proceeds of a $1,000 life insurance policy issued by interpleader on the life of Ramon Leal, deceased.

A summary judgment was granted on behalf of Carmen Leal determining that she was the owner of the proceeds and on behalf of the Company, determining that it was entitled to recover reasonable attorney’s fees of $150.00, as well as $27.35 court costs and expenses.

The uncontradicted evidence shows that on January 4, 1965, the Company issued its policy of insurance on the life of Ramon Leal and his brother, Aurelio R. Leal, was designated as beneficiary. The policy contained a provision authorizing the assured to change the beneficiary of the policy by written request. On March 23, 1965, Ramon Leal executed a change of beneficiary in favor of his minor daughter, Carmen Leal. On April 19, 1965, which was the date of Ramon’s death, the Company issued a duplicate policy of insurance showing Carmen as the beneficiary.

Appellee, Carmen Leal, based her motion for summary judgment on the written provisions of the policy showing her as beneficiary at the time of Ramon’s death. Appellant filed his affidavit opposing this motion wherein he stated:

“That on the 28th day of December, 1964, Ramon Leal, who is my brother, had been living in my house with me and my family in Corpus Christi, Texas, for over a year, and was a member of my household. On that date, an insurance man came to see me about buying insurance and I bought a policy for myself. I talked to Ramon Leal about some insurance and we agreed that since he was living with me and that if anything would happen to him, I might have to take care of him. We agreed that he would take out a life and accident insurance policy and make me the beneficiary, and that I would pay all the premiums on the policy for him as well as the policy on myself. The insurance salesman took our applications and I paid the deposit on each policy. Thereafter I paid all the premiums on my policy and his policy. When we got our policies, we kept them at my house in Corpus Christi with other papers we had there. Ramon Leal knew I had the policies of insurance at my house. The policies were never lost or destroyed.
“While Ramon Leal was in the hospital just before he died, I visited him and at no time did he ask me about the policy. I talked to the wife of Ramon Leal too, and she never mentioned the insurance policy, nor did she ask about it.” (Emphasis added.)

In our opinion the affidavit of Aurelio Leal raises a fact issue that he paid the premiums on the life insurance policy under an agreement with assured, Ramon Leal, that Aurelio would be the beneficiary under this policy. He pleaded such an agreement in his cross-action seeking the proceeds. Since appellee did not plead failure of consideration this question is not before us. Rule 94, Texas Rules of Civil Procedure.

Under the general rule, which is followed in Texas, where the person designated as beneficiary pays the premiums pursuant to an agreement that he shall remain the beneficiary or receive the proceeds of the policy, such person acquires a vested right in the policy regardless of whether the assured retains the right, under the terms of the policy, to change the beneficiary. 46 C.J.S. Insurance § 1176; Appleman, Insurance Law and Practice, § 922; Smith v. Schoellkopf, Tex.Civ.App., 68 S.W.2d 346, no wr. hist.; Locomotive Engineers’ Mutual Life & Accident Ins. Ass’n. v. Waterhouse, Tex.Civ.App., 257 S.W. 304, wr. ref.; Eatman v. Eatman, Tex.Civ.App., 135 S.W. 165, no wr. hist.

In Smith v. Schoellkopf, supra, the rule was stated: “The authorities support the view that an insured person, who, for a valuable consideration, has so contracted, cannot at will rescind his contract and designate another beneficiary, even though the policy contains stipulations authorizing such change. The collateral agreement between the assured and the person with whom he has contracted is binding upon the assured upon the principle of estoppel.”

In Eatman v. Eatman, supra, the Court expressly recognized this rule, but held it was not applicable since the wife, who was the first beneficiary, had stopped making the premium payments several months before the assured changed beneficiaries, and her failure to comply with the agreement reinstated the assured’s right to substitute another beneficiary.

Here the affidavit of Aurelio states: “We agreed that he (Ramon) would take out a life and accident insurance policy and make me the beneficiary, and that I would pay all the premiums on the policy for him as well as the policy on myself.” It was further stated that the policy remained in Aurelio’s possession and that he paid all premiums prior to the death of his brother. It is true that Aurelio’s affidavit did not state that Ramon agreed to make him an “irrevocable beneficiary” or “not to change the beneficiary”; however, such can be fairly inferred from their agreement.

In Locomotive Engineers’ Mutual Life & Accident Ins. Ass’n. v. Waterhouse, supra, the Court held that an agreement to have a policy of insurance “changed so that it shall be payable to his daughter” was an agreement by implication that such beneficiary should not be changed, although the insured had the right under the by-laws of the association to change the beneficiary.

Appellant also asserts that the trial court erred in granting the Company’s motion for summary judgment in that the question of what is a reasonable attorney’s fee is a fact question. No question is raised as to the necessity of this interpleader action. In support of its motion, the Company filed an affidavit from its attorney detailing the amount of time spent on the case and stating that a reasonable attorney’s fee would be $150.00. This affidavit was not controverted and supports the summary judgment in this amount.

In Himes v. American Home Fence Co., 379 S.W.2d 290 (Tex.1964), the Supreme Court recognized that a summary judgment may be granted for attorney’s fees where the uncontradicted affidavit shows that af-fiant is qualified to express an opinion as to the reasonableness of the fee and sets forth the basis for such an opinion under the circumstances. Here the uncontrovert-ed affidavit by a qualified witness set forth a reasonable fee and the basis for same.

The judgment is affirmed insofar as it discharges the American National Insurance Company with its costs, including reasonable attorney’s fee in the sum of $150.00. This claim is hereby severed and the cause of action between Carmen Leal and Aurelio Leal as to ownership of the proceeds is reversed and remanded for trial. The costs of this appeal are taxed one-half against the appellee, Carmen Leal, and one-half against appellant, Aurelio Leal.

MURRAY, Chief Justice.

I do not concur in the opinion of the majority and here give the reasons for my dissent. The majority seem to base their opinion upon the following statement:

“Under the general rule, which is followed in Texas, where the person designated as beneficiary pays the premiums pursuant to an agreement that he shall remain the beneficiary or receive the proceeds of the policy, such person acquires a vested right in the policy regardless of whether the assured retains the right, under the terms of the policy, to change the beneficiary. 46 C.J.S. Insurance § 1176; Appleman, Insurance Law and Practice, § 922; Smith v. Schoellkopf, Tex.Civ.App., 68 S.W.2d 346, no wr. hist.; Locomotive Engineers’ Mutual Life & Accident Ins. Ass’n. v. Waterhouse, Tex.Civ.App., 257 S.W. 304, wr. ref.; Eatman v. Eatman, Tex.Civ.App., 135 S.W. 165, no wr. hist.
“In Smith v. Schoellkopf, supra, the rule was stated: ‘The authorities support the view that an insured person, who, for a valuable consideration, has so contracted, cannot at will rescind his contract and designate another beneficiary, even though the policy contains stipulations authorizing such change. The collateral agreement between the assured and the person with whom he has contracted is binding upon the assured upon the principle of estoppel.’”

I readily agree to these statements of the law, but the trouble is that the affidavit of Aurelio Leal filed herein shows that he and Ramon Leal consented to- make Aurelio beneficiary if he would pay the premiums and nothing more. Ramon did not agree to make Aurelio his irrevocable beneficiary; Ramon did not agree that at his death Aurelio should have the proceeds of the policy or anything of that kind, but he reserved, in the insurance policy itself, the right to change the beneficiary, which fact Aurelio knew, or should have known, because he was in possession of the policy.

A mere beneficiary under a policy containing a right on the part of the insured to change the beneficiary, has no vested right in the proceeds of the policy prior to the death of the insured. McDonald v. McDonald, 212 Ala. 137, 102 So. 38, 36 A.L.R. 761; Vol. 2, Revised, Appleman, Insurance Law and Practice, § 921, p. 505.

Equities may arise in favor of the beneficiary named in the policy which will deny the insured the right to change the beneficiary, but here it would seem that the equities are the other way. Ramon took out the policy on December 28, 1964, and died with cancer on April 19, 1965, after Aurelio had paid only three or four premiums, none of which were paid after the change of the beneficiary. During the time Aurelio was paying the premiums he was the beneficiary. The change in beneficiary was from insured’s brother to his own daughter.

As to the holding that there was a contract based upon a consideration between the two brothers for the payment of the premiums, it is clear that the majority are in error in so holding. The consideration referred to in this line of decisions relates to a consideration passing from the beneficiary to the insured. There was no consideration passing from Aurelio to Ramon. Ramon got nothing out of this transaction if he did not have the right to change his beneficiary. Aurelio paid Ramon nothing to take out this policy of insurance. Ramon would get nothing while living and nothing at his death. If it be true, as stated by the majority, that Ramon had no interest in the policy, not even the right to change his beneficiary, what difference could it make to him whether the premiums were paid or not. Lovinger v. Garvan, 2 Cir., 270 F. 398; Thomson v. Thomson, 8 Cir., 156 F.2d 581; Vol. 2, Revised, Appleman, Insurance Law and Practice, § 922, p. 514.

A case I regard as being very much in point is Novosel v. Sun Life Assur. Co. of Canada, 49 Wyo. 422, 55 P.2d 302, rehearing denied, 57 P.2d 110.

I respectfully dissent from the opinion of the majority.


author: McDONALD, Chief Justice.

text:
    UNION CARBIDE CORPORATION et al., Appellants, v. Mrs. Alta DUPLANTIS et al., Appellees.
    No. 4446.
    Court of Civil Appeals of Texas. Waco.
    March 17, 1966.

      McLeod, Alexander, Powel & Apffel, V. W. McLeod, Galveston, for appellants.
    Raymond L. McDermott, Houston, Well-born, Britt and Kelly, Charles W. Britt, Alvin, McGregor, Sewell, Junell & Riggs, Wm. E. Junell, Fulbright, Crooker, Freeman, Bates & Jaworski, Gibson Gayle, Jr., Mabel Grey Howell (on appeal only), Houston, for appellees.
   McDONALD, Chief Justice.

This is an appeal from a judgment overruling pleas of privilege in a joint hearing in 2 suits filed in Brazoria County, arising from an automobile accident in Galveston County.

The automobiles of Guidry and Foster collided near Union Carbide’s plant in Galveston County. Foster and Duplantis (a passenger in Foster’s car) were killed. Guidry is a resident of Brazoria County; Foster’s heirs are residents of Brazoria County; Duplantis’ heirs are residents of Brazoria County; Union Carbide is a resident of Galveston County.

Guidry sued Foster’s heirs and Union Carbide in Brazoria'County, alleging Foster negligent in driving his car, and Union Carbide negligent in permitting condensation from its plant to cover the road; and that her damages were proximately caused by Foster’s and Union Carbide’s negligence. Foster’s heirs filed cross action against Guidry and Union Carbide, alleging the collision was caused by negligence of Guidry and Union Carbide.

Duplantis’ heirs filed suit in Brazoria County against Guidry and Union Carbide, alleging the death of Duplantis was caused by the negligence of Guidry and Union Carbide.

Union Carbide filed pleas of privilege in both cases and the cross, action, to be sued in Galveston County, the county of its residence. All plaintiffs and cross plaintiff filed controverting affidavits asserting venue in Brazoria County under Subdivisions 4, 29a and 27 of Article 1995 Vernon’s Ann.Tex.Civ.St.

Union Carbide filed motions to strike the controverting affidavits in the 2 cases and the cross action on the ground that the pleas of privilege and the controverting affidavits had not been acted on at the term of court at which filed, and the court had no jurisdiction to deny the pleas of privilege.

The trial court, on September 1, 1965, by order, consolidated the 2 causes of action; and on the same date, by another order, overruled Union Carbide’s motion to strike plaintiffs’ and cross plaintiff’s controverting affidavits, and overruled Union Carbide’s 3 pleas of privilege.

Union Carbide appeals, contending:

1) The trial court erred in overruling the pleas of privilege in the Guidry case because there is no evidence, or insufficient evidence, to show negligence on the part of Foster.
2) The trial court erred in overruling motions to strike the controverting affidavits in the Guidry case because of the long delay in having the hearing on the pleas of privilege.

Union Carbide presents no points complaining of the action of the trial court in consolidating the causes, or in overruling the plea of privilege in the Duplantis case.

Subdivision 4, Article 1995 provides that if 2 or more defendants reside in different counties, suit may be brought in any county where one of the defendants resides. The venue requirements under Subdivision 4 are to plead a joint cause of action against the resident and non-resident defendants; prove the resident defendant lives in the county of suit; and prove a cause of action against the -resident defendant. Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300.

There is evidence that Foster skidded over 47 feet from his side of the highway onto the center stripe, and that the center stripe was the point of impact. We think the evidence ample to support the implied finding of the trial court that Foster was negligent. There is no contention that the evidence does not support the implied finding that Guidry (resident defendant in the Duplantis case) was negligent, and as noted Union Carbide has made no complaint at the consolidation of the causes.

Union Carbide’s 2nd contention is that the trial court’s long delay in hearing the pleas of privilege precludes its overruling of them. The last controverting affidavit was filed 3 years and 11 months before the hearing. During this time Gui-dry was out of the country for some 7 months; the hearing was postponed by agreement at least once due to illness of counsel, and there are or were some 7 attorneys in the case. There is no showing of harm or damage to Union Carbide. We do not think under the record that plaintiffs and cross plaintiff waived or abandoned their controverting affidavits, or that the trial court is precluded from overruling them.

Union Carbide’s points and contentions are overruled.

Affirmed.


author: WERLEIN, Justice.

text:
    Ora Lee JOHNSON, Appellant, v. The STATE of Texas, Appellee.
    No. 14759.
    Court of Civil Appeals of Texas. Houston.
    March 31, 1966.

      Weldon H. Berry, Dixie & Schulman, Chris Dixie, Robert E. Hall, George C. Dixie, Houston, Jack Greenberg, James Nabrit, III, Charles H. Jones, Jr., New York City, for appellant.
    No attorney for appellee.
   WERLEIN, Justice.

This is an appeal from an order entered October 27, 1965 by the County Court of Walker County sitting as a Juvenile Court, pursuant to Article 2338-1, Vernon’s Annotated Texas Statutes, adjudging appellant, a female 16 years of age, a juvenile delinquent, and committing her to the care, custody and control of the Texas Youth Council. The court apparently made no order that said minor be conveyed forthwith to some place of detention, as provided in Section 13, Article 5143d, V.A.T.S., but it is indicated in appellant’s brief, and not denied by the State, that such minor was committed to a State correctional institution at Crockett, Texas. After this appeal was perfected, this Court ordered appellant and eight other minors who were similarly committed to the Texas Youth Council and conveyed to State correctional institutions, and who have appealed to this Court, released upon recognizance bonds of $100.00 each, and also granted the motion of the attorneys representing all such minors to file a brief common to this appeal and the appeals of the other minors in companion cases.

The convictions of appellant and the other eight minors must be set aside because of reversible error common to all of the appeals. The charges in the petition in the instant case and in the petitions in the companion cases are as follows:

“This child has repeatedly created a disturbance at the Huntsville Public Schools, has been brought into court a number of times, has been found guilty of contempt of court, served three days in jail and paid $100.00 fine; is under suspension from the public school; is on the streets all day, and is under a charge of unlawful assembly now, and has also habitually violated the penal ordinances of Huntsville, Walker County, Texas.”

All of the foregoing allegations, with the exception of the last allegation that the child “has also habitually violated the penal ordinances of Huntsville, Walker County, Texas”, are clearly insufficient legally, even if proven, to subject the child so charged to the jurisdiction of a juvenile court in Texas under the provisions of Sec. 3, Article 2338-1, V.A.T.S. Hence, appellant and the appellants in the companion cases stand convicted on the basis of the broad allegation that they “Habitually violated the penal ordinances of Huntsville, Walken County, Texas.” While it is true that Section 3(d) of the Article 2338-1 defines a “delinquent child” as one who “ * * * habitually violates any penal ordinance of a political subdivision of this State * * * ” we are of the opinion that the petition must allege with particularity the charges against the minor. In the cases at bar it is not alleged which penal ordinance of Huntsville has been habitually violated by appellants. Clearly the court would have no jurisdiction to adjudge the appellants juvenile delinquents under such an indefinite global charge. Section 7 of Article 2338-1 requires that the petition filed in juvenile .cases include allegations of facts which bring the child involved within the provisions of the Juvenile Act. No legally sufficient allegations are made in the present case or in the companion cases upon which the convictions of the minor appellants can be sustained.

In Reeves v. State, 1942, 144 Tex.Cr.R. 270, 162 S.W.2d 705., the court said: “ * * * the charge must particularize the act complained of so that its identity cannot be mistaken.” In Dearing v. State, 1947, 151 Tex.Cr.R. 6, 204 S.W.2d 983, the court stated, on motion for rehearing, citing Ex Parte Boggs, 146 Tex.Cr.R. 86, 171 S.W.2d 879, and Reeves v. State, 144 Tex.Cr.R. 270, 162 S.W.2d 705:

“It is the holding of these last two cases that the State’s pleading in a juvenile case should set forth the acts complained of that are relied upon to constitute the delinquency, and it follows that acts not so set forth cannot be relied upon to establish such delinquency.”

See also Robinson v. State, Tex.Civ.App., 204 S.W.2d 981; Cantu v. State, Tex.Civ.App.1948, 207 S.W.2d 901; Dendy v. Wilson, 1944, 142 Tex. 460, 179 S.W.2d 269, 151 A.L.R. 1217.

In the instant case, in addition to the foregoing ground for reversal, common to all nine appeals, it should be noted that the typed information on the printed form petition is ambiguously spaced so that it is not clear whether the recitation is that appellant’s parents are her “ * * * legal guardian * * * ” or “ * * * the person or persons having [her] custody and control. * * * ” Also in this case the notice begins: “In The Matter of Alma Jean Johnson, a Delinquent Child,” whereas the petition in such case is styled, “In The Matter of Ora Lee Johnson, a Delinquent Child.” The notice also states that “Floyd Farris, a competent and credible person, heretofore, on the 26th day of October, 1965, filed a petition in this Court alleging that Alma Jean Johnson is a delinquent child, a female * * *, being 16 years of age according to the best knowledge and belief of the petitioner.” We find nothing in the transcript indicating that there was any such person as Alma Jean Johnson, other than the foregoing recitations, and yet upon such notice the court decreed that “Ora Lee Johnson be committed to the care, custody and control of the Texas Youth Council * *

There are other irregularities in the proceeding and points of error asserted by appellant which we need not discuss in view of our holding.

It is ordered that appellant and the sureties on her bond be discharged therefrom and that the proceeding against her be dismissed.


author: COLEMAN, Justice.

text:
    Milford HAWKINS, Appellant, v. The STATE of Texas, Appellee.
    No. 14761.
    Court of Civil Appeals of Texas. Houston.
    March 31, 1966.
    Weldon H. Berry, Dixie & Schulman, Chris Dixie, Robert E. Hall, George C. Dixie, Houston, Jack Greenberg, James Nabrit, III, Charles H. Jones, Jr., New York City, for appellant.
    No brief filed for appellee.
   COLEMAN, Justice.

This is a companion case to the case of Johnson v. State of Texas, 401 S.W.2d 298, decided this day. The judgment in this case must be reversed because of the insufficient petition on which it was based for the reasons set out in that opinion.

The petition filed in this cause fails to allege the names and residences of the parents of Milford Hawkins or to state that these facts are unknown. Cecil Hawkins was named as the person having his custody and control. No summons was issued to him. Notice of the hearing was issued to Roberta and Cecil Hawkins in which they are named as the parents of the minor. The officer’s return reflects that the notice was delivered to Cecil Hawkins. The notice stated that the hearing on the petition was set for October 28, 1965. The judgment reflects that the case was heard on October 27, 1965, and was signed on that date.

Section 8, Article 2338-1, Vernon’s Ann. Tex.St., provides:

“After a petition shall have been filed, and after such further investigation as the Judge may direct, unless the parties hereinafter named shall voluntarily appear, the court shall issue a summons reciting briefly the substance of the petition, and requiring the person or persons who have the custody or control of the child to appear personally and bring the child before the court at a time and place stated. If the person so summoned shall be other than the parent or guardian of the child, then the parent or guardian, or both, shall be notified of the pendency of the case and of the time and place appointed, by personal service before the hearing, if they reside within the jurisdiction of the court, except as hereinafter provided. Summons may be issued requiring the appearance of any other person whose presence, in the opinion of the Judge, is necessary.

“If it appears that the child is in such condition or surroundings that his welfare requires that his custody be immediately assumed by the court, the Judge may cause to be endorsed upon the summons an order that the officer serving, the same shall at once take the child into custody.”

Section 9, Article 2338-1, V.A.T.S., provides :

“Service of summons shall be made personally by a probation officer or peace officer by the delivery of attested copies thereof to the parent, guardian, or person having custody of the child who is summoned; provided, that jurisdiction may be obtained by the court if the court is satisfied that said officer has made diligent effort to locate such person or persons and has been unsuccessful in locating said persons. It shall be sufficient to confer jurisdiction if service is effected at least two (2) days before the time fixed in the summons for the return thereof.”

We call attention to the fact that the term “parties hereinafter named”, considered in context with the further provisions of Sec. 8, is quite indefinite. If it were necessary to a decision of this case, it would be difficult to determine whether the voluntary appearance of the “person or persons who have the custody or control of the child” alone would dispense with the necessity of a summons; or whether, in addition, the child or the parent or guardian, must voluntarily appear.

In the absence of the voluntary appearance of the required parties, the section requires the service of a summons on the person or persons having the “custody or control” of the child. In addition, where such person is not the parent or guardian of the child, “then the parent or guardian, or both, shall be notified of the pendency of the case * * * by personal service before the hearing * * *.” This provision for notice is vague and indefinite. Where there is a guardian, is it necessary to give notice to both parents and the guardian, or to one parent and the guardian, or will notice to the guardian alone, or the parents alone, be sufficient? How long before the hearing must notice be given?

Apparently service of the summons at least two days before the time fixed in the summons “for the return thereof” is jurisdictional. Sec. 9, however, provides that “jurisdiction may be obtained by the court” if the court is satisfied that the parent, guardian, or person having custody of the child cannot be located, but- there is no procedure provided for obtaining such jurisdiction. The necessity for securing jurisdiction over the child is pointed up by the provisions relating thereto in Sections 5 and 7, Art. 2338-1, V.A.T.S.

In this case no summons was issued. Notice is not specifically required unless a summons to produce the child is served on one other than the parent or guardian. Notice was delivered to the father, but not to the mother. The hearing was held prior to the date set in the notice. The judgment does not recite jurisdictional facts, i. e., voluntary appearance or service of a summons. The hearing was had the day following the date of the filing of the petition.

In the absence of a summons served on the father, named in the petition as having the custody and control of the child, or on any other person, and in the absence of a recitation of jurisdictional facts in the judgment, particularly in view of the fact that the notice of the hearing delivered to the father recited that the case was to be heard on the day after the day it was heard and judgment was entered, despite the fact that no statement of facts is in this record, we hesitate to presume that the trial court had jurisdiction by reason of the voluntary appearance of the parties.

These matters are noted, although not necessary to a decision in this case, for the reason that remedial legislation appears to be necessary. It is most unfortunate that doubt and uncertainty as to the procedure to be followed in the initiation and processing of juvenile delinquency petitions necessarily remains.

The judgment of the trial court is reversed. Milford Hawkins and the sureties on his recognizance bond are discharged and the proceedings ordered dismissed.


text:
    MOUNTAIN STATES MUTUAL CASUALTY COMPANY, Appellant, v. O. L. HAMILTON, Appellee.
    No. 4025.
    Court of Civil Appeals of Texas. Eastland.
    March 18, 1966.
    Rehearing Denied April 15, 1966.
    Coleman Gay, Austin, Holloway & Slagle, Brownwood, for appellant.
    Tom H. Davis, Austin, George Day, Brownwood, for appellee.
   WALTER, Justice.

O. L. Hamilton recovered a judgment against Mountain States Mutual Casualty-Company for total permanent disability benefits under the workmen’s compensation law.

The company has appealed. It contends the court erred in excluding the testimony of Dr. Terrell that Hamilton’s test for syphilis was positive at the time he was treated after his injury and that in his opinion such disease and conditions which he had at the time of his accident were responsible for his incapacity to work, without regard to any injury he received.

The company filed a general denial. The company did not plead that syphilis was the sole cause of Hamilton’s disability. It contends that syphilis was one of the diseases and conditions that caused disability. The company says: “The material question in this case was the extent and duration of any disability which appellee sustained as a result of his injury. It was stipulated that he had received an injury on the job. Starting with that premise, such injury may have been trivial, it may have been serious. It may have incapacitated him not at all or for a few days; it may have caused permanent disability.”

Dr. Ross testified substantially as follows: I live in Austin and I am an orthopedic surgeon. I saw the plaintiff O. L. Hamilton in my office on August 25, 1964. I conducted a routine orthopedic examination for a spine injury. My diagnosis was acute and chronic lumbar strain and degenerative lumbar disk injury. I advised him to obtain a high yoke corset and I prescribed some pain medicine and instructed him to do some exercises and advised him to be extremely cautious in his activities. In my opinion the injury which Mr. Hamilton received was a producing cause of his condition. In my opinion this is a permanent condition. I doubt that he will get any better.

The insurance company admitted that plaintiff’s employer directed him to report to Dr. Terrell for examination and treatment; that Dr. Terrell examined and treated Hamilton for the insurance company; that appellant has not paid appellee any compensation; that since May 29, 1964, appellant has not furnished appellee with medical or hospital care. The parties stipulated that while Hamilton was an employee of Fulfer on a construction job in Brown County on or about May 9, 1964, he reported to his foreman that a few minutes.prior thereto he had hurt his back while attempting to lift a shaft of a head- pulley; that with his foreman’s permission he was driven by another employee to a doctor in Stephenville; that if Hamilton’s foreman were present he would testify that he did his work all right, was a good worker and had no apparent disability.

The appellee O. L. Hamilton testified substantially as follows: I am fifty-two years of age and am living with my parents at Stephenville. I have a high school education. I have worked for the fire department, been a painter and done some police work. I was a maintenance man on some rock crushing equipment where I sustained a back injury. I was trying to lift a head pulley off of a conveyer belt at the time I was injured. Don Siegel was working with me at the time. When I tried to lift the pulley, something popped in my back and I couldn’t get up. Don helped get me on my feet and laid me down in Pennington’s pickup. They took me to Dr. Terrell at Stephenville. He x-rayed me and put me in traction. After I left the hospital I returned to the hospital every day for about two weeks for heat treatment. I then returned to the hospital for about a week. I then went to Austin and talked to my brother who is Chief of Police at the University and he advised me to see Dr. Ross. I also went to the V. A. Hospital and they made a brace for my back. My back is rather painful and I don’t see any improvement. When I lie down and stretch out the pain eases up some. If I am on my feet too much or set up too much, its very painful. I wear my back brace all the time except at night. I have tried to get along without my brace but it is very painful. I have pain in the lower part of my back and up and down my spine. One of my legs is very numb all the time. I take pills for the pain. I have tried to do some yard work but my back bothers me and I have to quit.

In the course of Dr. Terrell’s voir dire examination he concluded that Hamilton’s incapacity to work was due to syphilis, or positive serology, emphysema, arthritis and bad teeth and not the result of his injury. Dr. Terrell’s testimony was the same before the jury, except he left out syphilis.

We have concluded that the court erred in refusing to admit Dr. Terrell’s testimony that in his opinion Hamilton’s positive serology was one of the conditions which contributed to his disability. This testimony was offered after the doctor had testified that in his opinion Hamilton had no disability resulting from an accident.

By the express terms of Rule 92, Texas Rules of Civil Procedure, a general denial puts in issue all matters pleaded by the adverse party which are not required to be denied under oath. Thus the defensive plea of general denial is sufficient in law to raise issues of fact with respect to every matter essential to plaintiff’s recovery, save only those matters required to be denied under oath, and puts the burden on the plaintiff to prove all such matters.

In W. L. Moody & Co. v. Rowland, 100 Tex. 363, 99 S.W. 1112, the Supreme Court said:

“The defendant may, by a general denial, put the plaintiff upon proof of the facts alleged in the petition, and, under such general denial, the defendant would be entitled to introduce evidence which tended to disprove the facts alleged in the plaintiff’s petition, and to rebut evidence offered by the plaintiff. If a defendant desires to introduce evidence of a fact which does not tend to rebut the facts of the plaintiff’s case, but which show an independent reason why the plaintiff should not recover upon the case stated and proved, then such defendant must plead the facts which will avoid the legal consequence of plaintiff’s case, else the testimony will not be admissible, and a judgment rendered upon such evidence, admitted under a general denial, will not be sustained.”

One of the matters pleaded by Hamilton was that his injury was a producing cause of his total incapacity. The company introduced Dr. Terrell’s testimony for the purpose of disproving and rebutting the evidence which Hamilton had introduced in support of his pleadings. This evidence was admissible under a general denial. One of the objections made by ap-pellee was that “it would not be material on any issue that the jury will have to decide.” In Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681, the court said:

“As a general rule, any evidence is relevant and material if it tends to prove, or disprove, any material fact involved in the issue or the question being tried. This rule also embraces evidence which throws light on the transaction itself. 17 Tex.Jur., p. 338, § 106, and authorities there cited.”

Dr. Terrell’s testimony was relevant and material and admissible under a general denial. We have concluded, however, that such error was harmless. On his voir dire examination Dr. Terrell testified, in effect, that positive serology might contribute to a disabling condition. On cross examination he testified, in effect, that he was unable to find that any of Hamilton’s complaints were referable to positive serology. The doctor was permitted to testify before the jury that in his opinion bad teeth, emphysema and arthritis were the causes of Hamilton’s incapacity and that he had fully recovered from his back injury. Under these conditions, the failure to admit this testimony about syphilis did not amount to such a denial of appellant’s rights as was reasonably calculated to cause and probably did cause rendition of an improper judgment. Rule 434, T.R.C.P.

The evidence outlined and other facts and circumstances in evidence support the answers of the jury that Hamilton’s total incapacity was permanent and that hardship would result unless appellee’s compensation was paid in a lump sum.

We have considered all the evidence and have concluded that the answers to issues five and twelve, that Hamilton’s total incapacity will be permanent and that manifest hardship will result unless appellee’s compensation is paid in a lump sum are not against the preponderance of the evidence. In Re King’s Estate, 150 Tex. 662, 244 S.W.2d 660.

We have considered all of appellant’s points and find no merit in them. They are overruled.

The judgment is affirmed.