author: MOORE, Justice.

text:
    GARLAND GRAIN COMPANY et al., Appellants, v. D-C HOME OWNERS IMPROVEMENT ASSOCIATION et al., Appellees.
    No. 146.
    Court of Civil Appeals of Texas. Tyler.
    June 24, 1965.
    Rehearing Denied Sept. 16, 1965.

      Frank J. Scurlock, Turner, Rodgers, Winn, Scurlock & Terry, Dallas, for appellants.
    James E. Coleman, Jr., and Hal M. Bate-man, Carrington, Johnson & Stephens, Dallas, for appellees.
   MOORE, Justice.

This is a suit for a mandatory injunction to abate a nuisance. The suit was brought by an association of home owners and land owners known as the D-C Home Owners Improvement Association, hereinafter referred to as plaintiffs, against Garland Grain Company, et al., hereinafter referred to as defendants. The alleged nuisance consists of feed lots operated by Garland Grain Company where a large number of cattle is fed and fattened and ultimately sold at various meat packers throughout the state and elsewhere. The feed lots, owned by the defendants, are located on an 86-acre tract of land owned by the defendants in northeast Dallas County, about one-half mile south of the south boundary line of Collin County. The various lots, which are contiguous, cover an area of ten acres. The cattle are transported to the feed lots and placed in small pens where they are intensively fed with highly concentrated cattle feed for a period of approximately 90-120 days and are then transported away for slaughter. The maximum capacity off the pens at any one time is 5,000 cattle. However, the maximum is maintained only during the months of September, October, November, December, January and February. During the remainder of the year, the amount is considerably reduced. On March 16, 1964, the day of the trial, there were only 800 cattle in the pens. As a result of the concentration of the cattle, it is admitted that at times there is as much as thirty tons of manure on the ground in the lots and that collected and stacked on the outside. It is undisputed that defendants were operating the feed lots according to the most modern methods and techniques and the evidence further shows that the feed lots were periodically inspected by the Health Department of Dallas County which approved the operation. Plaintiffs admit that the defendants were not negligent in any respect in the operation of the business. The plaintiffs allege that the feed lots constitute a nuisance because of the obnoxious odor, noise, flies and birds emanating from the lots which are such as to substantially interfere with the comfort and enjoyment of their property and homes. They further allege that as a result of the natural and normal drainage of defendants’ land, the water of Rowlett Creek, which borders on three sides of the defendants’ property, was polluted by foul, germ-carrying bacteria-laden manure, creating a public and private nuisance.

When the suit was originally filed there were seventy-nine plaintiffs. At the time of trial, because of withdrawal, non-suits, etc., there was a total of forty-one plaintiffs, twenty-eight of whom lived within the area and thirteen of whom were non-resident land owners. The total area of land owned by the forty-one plaintiffs embraces an area covering 2900 acres for an average of seventy-eight acres per plaintiff. On the average, their homes are three-quarters of a mile apart, the closest to the pens being one-fourth mile and the farthest being two and three-fourths miles. The area is described by some of the plaintiffs as being “farm and ranch country.” It is located in the center of an area approximately five miles from the cities of Garland, Richardson, Plano and Wylie, but is not within or near the city limits of either city. There are no churches, schools or other public places within the immediate vicinity. Almost without exception the plaintiffs, their tenants and neighbors own a rather large number of cattle and other livestock and some of the homes have out-door toilets. Defendants established their business at its present location in November, 1960, at a time when the plaintiffs were then living in the area. In addition to the purchase of the land, defendants have invested a substantial sum of money in fences, barns, feed troughs, water wells, deep well, complete underground water system, electric system, feed mill, automotive equipment and a residence.

The trial was to a jury on Special Issues, in which the jury found that:

(1) The odors from defendants’ cattle feeder pens came over and across the plaintiffs’ land;

(la) That such odors would continue to come over and across the plaintiffs’ land in the future;

(lb) That such odors constitute a nuisance ;

(2) That the feeder pens were not a breeding place for flies;

(2a) And would not, therefore, continue in the future;

(2b) And that did not, therefore, constitute a nuisance;

(3) That the feeder pens attracted birds;

(3a) That such will necessarily continue to recur in the future;

(3b) That it was not a nuisance because it attracted birds;

(4) That the feeder pens created noises;

(4a) Which would continue in the future;

(4b) That the noises did not constitute a nuisance;

(5) That the feeder pens cause pollution of the water of Rowlett Creek “as the same flows past defendants’ property;”

(Sa) That such pollution of the water of the creek will continue to recur in the future;

(Sb) That such pollution does not constitute a nuisance.

The trial court rendered judgment for the plaintiffs, permanently and perpetually enjoining the defendants from continuing, maintaining, or failing promptly to abate the operation of the cattle feeding business being conducted by them.

Garland Grain Company, together with the other defendants, appealed from the judgment contending first that the trial court was in error in requiring them to discontinue their business because the undisputed evidence shows that such is a lawful, useful and necessary business contributing to the welfare and prosperity of the community and not constituting a hazard to health and therefore plaintiffs should be required to seek any relief which they have by way of a suit for damages, and secondly that under the circumstances, the trial court abused his discretion in balancing the equities in favor of the plaintiffs and holding that odor alone is a nuisance per se requiring abatement as a matter of law.

The judgment does not indicate whether the injunction was granted because of the pollution of the creek or the cause of the creation of an obnoxious odor, or both. It merely granted plaintiffs’ motion for a judgment on the verdict. Therefore, we must assume that the judgment is based upon both such findings.

If the judgment is based upon pollution of Rowlett Creek, we find ourselves in disagreement with the ruling of the trial court.

There seems to be no question that the water of Rowlett Creek was to some extent polluted. The question propounded to the jury inquired whether defendants caused the pollution, to which they answered affirmatively, and the question now presented is whether or not there is any evidence to support their finding on the question of causation. Dr. Sol Haberman and Dr. George Race, who were witnesses called by the plaintiff, testified that they each took samples of water from the creek at a point both above and below the defendants’ feed lots and found that neither the upstream water nor the downstream water would be safe for human consumption or swimming. The upstream samples were taken on April 11th and 17th, 1962, at a bridge which crosses the creek about 150 yards above the cattle pens. Dr. Haberman examined both specimens and found one to contain 45,300 organisms per cc of water and the other to contain 25,000 organisms per cc of water. One of the downstream samples was taken by Dr. Race on April 11th and was taken at a point where Brand Road crosses the creek approximately one mile below the defendants’ feeder pens. On April 17th Dr. Haberman also took a downstream sample on the property of Dr. Evans which lies between the bridge and defendants’ property. At the point where he took his downstream sample, Dr. Evans pastures ninety head of cattle which have free access to the creek. Dr. Haberman testified that the downstream sample taken at the bridge by Dr. Race contained 91,000 organisms per cc of water and that the one which he took on the property of Dr. Evans contained 122,600 organisms per cc of water. He testified that the water at either of the points below the pens would not be safe for human consumption or swimming. On the question of whether or not the pollution could cause any disease to cattle, Dr. Race testified: “I think it is debatable as to risks. * * * I mean, there are so many factors, I don’t believe I could answer that.”

The evidence shows that the defendants’ feed pens are located in the extreme northeast corner of their 86-acre tract of land. Rowlett Creek, as it flows down from the north, comes within approximately 175 yards of the feed pens, and then turns west and flows approximately one-fourth of a mile, then turning south for another one-fourth of a mile and then east approximately one-half mile and this surrounds the entire tract except on the east side thereof. Defendants have erected a six-foot levee west of the pens which extends across the entire tract running from north to south, thus preventing drainage toward the creek on the west. The natural drainage of the defendants’ land is to the south. This area is a meadow containing approximately fifty acres covered with grass and gradually sloping toward the creek. The distance across the meadow from the pens to the creek is approximately one-fourth of a mile.

Although the jury found that the feeder pens caused pollution of the creek, in our search of the voluminous record, we have been unable to find any direct evidence showing that the defendants either negligently or intentionally deposited any of the fecal matter from the cattle into the stream or that they ever, at any time, allowed any of the cattle to leave the pens or go near Rowlett Creek. No attempt was made to trace any of the fecal matter from the pens to the stream. While we might speculate that as a result of a heavy rain, manure and other fecal matter would naturally drain off the defendants’ property and in the direction of the creek, there is no showing that the samples taken by Dr. Race or Dr. Haberman were taken immediately after a rain or overflow and there is no showing that the matter drained directly into the creek. Thus, we are left to speculate as to whether or not at the time the samples were taken any of the fecal matter from defendants’ pens actually polluted the creek or whether the pollution was caused exclusively by the cattle of the adjoining land owners whose cattle used the creek. Since it is undisputed that the stream was polluted above defendants’ pens and it is undisputed that at least ninety head of cattle have access to the stream immediately below where the water was likewise polluted, plaintiffs would have the burden of showing that the defendants also were depositing or causing to be deposited harmful material into the water and thus contributing to the further pollution of the stream. We have been unable to find any evidence showing that any matter from defendants’ pens ever reached the creek nor have we been able to find any evidence showing that if it did that the substance from the defendants’ pens was the cause of the type of pollution which was found to be present. As in all other suits, the plaintiff in an injunction suit has the burden of proving not only the wrongful conduct, but also that the injury complained of was proximately caused by such wrongful conduct. Nash & Windfohr v. Edens, 109 S.W.2d 496 (Tex.Civ.App.); Killam v. Moerbe, 131 S.W.2d 143 (Tex.Civ.App.).

Assuming, however, that we be mistaken in this conclusion and that there is some evidence showing that defendants caused the pollution, we are of the opinion, nevertheless, that plaintiffs are not entitled to an injunction solely on the ground that the pollution of the creek is a public nuisance as they contend. The state is not a party to this suit. Even though the pollution of a public stream is made unlawful by the provisions of Article 7621d, Vernon’s Ann.Tex.Civ.St., the duty of prohibiting pollution of public waters is vested exclusively in the state. Though a nuisance may be public, it furnishes an individual no right of action, unless he has in seme way been actually injured or will suffer such an injury by its maintenance. No one can constitute himself a guardian of the public and maintain an action for public nuisance which does not sensibly injure him or his property, although he be a member of the community where such nuisance exists. The rights of the general public are not involved unless the state — the custodian of those rights — is made a party to the suit. Absent such view of the statute, the public policy of our state on such vital matters could be thwarted, without the state having had an opportunity to have its side of the controversy presented in a court of justice. Boyd v. Schreiner, 116 S.W. 100 (Tex.Civ.App.); City of Weslaco v. Turner, 237 S.W.2d 635 (Tex.Civ.App.); 31 T.J.S., par. 130, page 247.

Nevertheless, we recognize that the plaintiffs have a right to abate a common law nuisance insofar as it affects them. City of Weslaco v. Turner, supra.

As we view the question of pollution, plaintiffs’ suit is merely an action to abate a private nuisance calling for a determination the right of riparian owners.

The basic principles of the common law doctrine of riparian rights have been retained in this state. That is, every riparian owner is entitled to make reasonable use of the water as it flows by his land, subject to similar rights of other riparian owners. Whether the legal right of one riparian has been invaded by another by the impairment of the quality of the water is a question of fact depending upon whether such use is reasonable. Boyd v. Schreiner, supra; 60 T.J.S., par. 65, p. 384.

It is laid down in general terms that every owner has the right to enjoy the stream of water which flows through his land in its natural state, without diminution to its flow, quantity or purity. It is also held with like generality of statement that any defilement or corruption of the water which prevents its use for any of its reasonable or proper purposes is an infringement of the right of riparian owners which will entitle them to a remedy suited to the nature of the case.

“But all abstract rules are subject to considerable modification when they are applied to the exigencies of human life. The right to the use of a stream of water in its natural purity cannot override other co-equal and co-existing rights; it must certainly yield to those of a more absolute and unqualified character. The tillage of the soil and the tending of flocks and herds were the earliest occupations of the human race. The husbandman soweth his seed and gathereth the harvest to furnish us with food; and the flocks and herds bring forth their increase for our use. It would be most unnatural and unwise to put any unnecessary restrictions on those pursuits which furnish the world with the means of subsistence. We must confess that the right of a man to cultivate his own fields, and to pasture his cattle on his own land, is of an original and primary character, and that it would be oppressive to interfere with the free exercise of it, except under a necessity caused by grave public considerations. The washings from cultivated fields might, and probably would, carry soil and manure into streams of water, and make them muddy and impure. And so the habits of cattle according to their natural instincts would lead them to stand in the water and befoul the stream. But, nevertheless, the owners of the land must not lose the beneficial use of it. The inconveniences which arise from the pollution of the water by these causes must be borne by those who suffer from them. The ordinary requirements of domestic life diminish the purity of the atmosphere; but as long as these causes are within the limits of reason and necessity the law recognizes no ground of complaint against them. The reasonable and proper exercise of acknowledged right by one man may, and often does, work annoyance and loss to another; but rights cannot be forfeited for this reason.” Helfrich v. Catonsville Water Co., 74 Md. 269, 22 A. 72, 13 L.R.A. 117; 93 C.J.S. Waters § 49, page 694.

Even though the jury found that defendants caused pollution, they further found such pollution did not constitute a nuisance. In order to determine the meaning of the jury’s finding of no nuisance, we must turn to the definition of the term as defined by the court. When we come applying the jury’s findings to the definition of “nuisance,” it is obvious that the jury meant to say that defendants did not bring about or create a condition in the use of its property such that it necessarily caused inconvenience, injury or harm to plaintiffs in the use and enjoyment of their property, substantially, materially and unreasonably interfering with the plaintiffs’ comfort and proper use and enjoyment of their property, taking into consideration the nature and use of the property of both parties and the nature of the location in which they were situated.

Thus, even though the jury found that plaintiffs caused a pollution of the creek, they further found that under the circumstances, their contribution to the already polluted water was not an unreasonable use of the water as a riparian owner, and therefore plaintiffs were not damaged or injured thereby.

Plaintiffs insist, however, that regardless of whether they are entitled to an injunction because of pollution the judgment of the trial court should, nevertheless, be affirmed because the evidence supports the finding that the disagreeable odor constituted a nuisance and further supports the finding that the equities are balanced in favor of the plaintiffs and that the issuance of a permanent injunction was, therefore, proper. Defendants contend that since no question of health is involved, but only odor, the trial court abused his discretion in balancing the equities in favor of the plaintiffs and decreeing that their useful, necessary and lawful business be destroyed merely because it created a disagreeable odor.

In Storey v. Central Hide & Rendering Co., 148 Tex. 509, 226 S.W.2d 615, affirming the Court of Civil Appeals in 223 S.W.2d 81, the Supreme Court held that the abatement of a lawful place of business was a harsh remedy. The court further held that there should be a balancing of the equities in order to determine if an injunction should be granted. City of San Antonio v. Camp Warnecke, 267 S.W.2d 468 (Tex.Civ.App.).

The balancing of equities is one to be determined by the chancellor in accordance with established equitable rules and principles, and will be disturbed only on a showing of abuse of discretion. Hill v. Villarreal, 383 S.W.2d 463 (Tex.Civ.App.); Texas Lime Company v. Hindman, 300 S.W.2d 112 (Tex.Civ.App.), aff. 157 Tex. 592, 305 S.W.2d 947.

The issue presented involves the conflicting rights of the parties in the respective uses of their properties. The question is whether the nuisance should be abated or whether the plaintiff relegated to suits for damages.

The evidence shows that the defendants originally purchased the land and commenced to operate in November, 1960, and have made a total investment of $166,000.00 and would, no doubt, suffer a substantial financial loss if forced to move or discontinue the business. During the first three years of operation, 22,361 head of cattle was brought into the lots, most of which were from the eastern part of Texas, having a value of $1,833,602.00 and having a value of $3,130,540.00 at the time they were taken out; feed stuff purchased amounted to $859,421.48 of which the sum of $72,310.00 was purchased within a radius of twenty miles. Plaintiffs continuously employ five to six men, as well as part-time employment of veterinarians and other independent contractors. It is conceded that defendants operate the business by the most modern and up-to-date methods, including the use of modern chemicals to prevent odors, and that there is no negligence. Most of the cattle are sent to various packing houses in the northeast section of the state where they are processed and the meat and other byproducts are sold and distributed within the area. It is undisputed that there is no place in Dallas, Tarrant, Collin, Rockwall, Ellis and Kaufman counties where such feed lots could be located where they would not be subject to the same objection by people residing in similar areas.

It is undisputed that most of the plaintiffs own livestock, maintain barns and outhouses and that cattle manure may be found on the ground throughout the area. It was shown that the operation of the feeder pens performs a service for the welfare of the general public and that it is the only operation of this sort in this section of the state and that the business is particularly adaptable to this section of the state because of the available supply of cattle and feed supplies, as well as a ready market for the sale of fresh meat.

“ ‘According to the doctrine of “comparative injury” or “balancing of equities” the court will consider the injury which may result to the defendant and the public by granting the injunction as well as the injury to be sustained by the complainant if the writ be denied. If the court finds that the injury to the complainant is slight in comparison to the injury caused the defendant and the public by enjoining the nuisance, relief will ordinarily be refused. It has been pointed out that the cases in which a nuisance is permitted to exist under this doctrine are based on the stern rule of necessity rather than on the right of the author of the nuisance to work a hurt, or injury to his neighbor. The necessity of others may compel the injured party to seek relief by way of an action at law for damages rather than by a suit in equity to abate the nuisance.
“ ‘Some one must suffer these inconveniences rather than that the public interest should suffer. * * * These conflicting interests call for a solution of the question by the application of the broad principles of right and justice, leaving the individual to his remedy by compensation and maintaining the public interests intact; this works hardships on the individual, but they are incident to civilization with its physical developments, demanding more and more the means of rapid transportation of persons and property.’
“On the other hand, an injunction may issue where the injury to the opposing party and the public is slight or disproportionate to the injury suffered by the complainant.
“Some decisions ignore the balance of injury doctrine as above stated. They seemingly authorize the grant of an injunction as a matter of right where the facts present a clear case of nuisance. But these cases do not represent the weight of authority.” Storey v. Central Hide & Rendering Co., supra; Fargason v. Economy Furniture, Inc., 356 S.W.2d 212 (Tex.Civ.App.); Georg v. Animal Defense League, 231 S.W.2d 807 (Tex.Civ.App.).

What was said in Galveston, H. & S. A. Ry. Co. v. De Groff, 102 Tex. 433, 118 S.W. 134, 21 L.R.A.,N.S., 749, would seem to be especially applicable here.

“ * * * Some one must suffer these inconveniences rather than that the public interest should suffer. If the defendant were compelled to remove to another part of the city, the same nuisance to other people would be caused by the same necessary operation of the machinery, and the citizens at that point could with greater propriety than plaintiffs seek another injunction. These conflicting interests call for a solution of the question by the application of the broad principles of right and justice, leaving the individual to his remedy by compensation and maintaining the public interests intact. This works hardships upon the individual, but they are incident to civilization with its physical developments, demanding more and more the means of rapid transportation of persons and property. The plaintiffs should be left to their action for damages. The injunction should not have been granted.”

In view of the fact that the question of health is not involved and that defendants’ business is located in a rural area where many of the plaintiffs’ cattle, to some extent at least, causes obnoxious odor and in view of the fact that there is no other place in this area of the state where such lawful business could be maintained without visiting the same burden on other people and in view of the fact that the cessation of defendants’ business would result in harm to the public as well as defendants, we have concluded that the trial court was in error in finding that the equities were balanced in favor of the plaintiffs. The odor is not shown to be constant, but varies with the direction of the wind. The circumstances in our opinion do not present a situation where defendants’ use of their own property is so unreasonable as to deprive the plaintiffs of the use and enjoyment of their property to such a substantial and material degree as to warrant the granting of a permanent injunction. The fact that the area may at some future date be urbanized or that it is now included in the “Garland Urban Growth Plan” or is included in the plan known as the “Greater Dallas Metropolitan Community” is speculative and too remote for consideration at the present time. Boyd v. Schreiner, supra.

If plaintiffs’ legal remedy is as complete and efficient as the equitable one then they must pursue their legal remedy. Humble Oil & Refining Co. v. Luckel, 154 S.W.2d 155 (Tex.Civ.App.), writ refused. It is apparent from this record that any damages suffered by appellees, either personal or to their property, is easily ascertainable. Quoting again from Galveston, H. & S. A. Ry. Co. v. De Groff, supra:

“ * * * It is a well-established principle which is recognized in the petition that the plaintiffs were not entitled to an injunction in this case if they had an adequate remedy at law; that is, if they could recover by a suit at law for the amount of the depreciation of the real estate and compensation for the decrease in the business of hotel keeping. It does not require authority nor argument to show that the decrease in the value of the real estate could easily be ascertained and could be compensated for in money. * * * ”

It is also stated in King v. Columbian Carbon Co., 5 Cir., 152 F.2d 636, 641:

“ * * * The property of an individual may not be damaged for public use without just compensation, and assuredly it may not be damaged for private use without such compensation. As a concession to industrial progress and social utility the law will not abate a useful and lawful enterprise even though it be a nuisance, but further than that the law does not recede. It still requires payment for unwarranted, unreasonable, and substantial damage done to the property of another which is caused by the construction and operation, however skillful, of an industrial plant in a locality undevoted and unadapted thereto.”

We have reached the conclusion that the plaintiffs are not entitled under the facts and circumstances of this case to a permanent injunction prohibiting the operation of defendants’ feed lots for the reason that they have an adequate legal remedy for damages.

The judgment of the trial court is reversed and the permanent injunction is dissolved and judgment is hereby rendered for the defendants.

Reversed and rendered.


source: Caselaw Access Project

author: CLAYTON, Justice.

license: Public Domain

text:
    The STATE NATIONAL BANK OF EL PASO, Texas, Appellant, v. MARGARET’S, a corporation, Appellee.
    No. 5722.
    Court of Civil Appeals of Texas. El Paso.
    July 7, 1965.
    Rehearing Denied Sept. 15, 1965.
    Kemp, Smith, Brown, Goggin & White, Raymond H. Marshall, El Paso, for appellant.
    . Doyle H. Gaither, El Paso, for appellee.
   CLAYTON, Justice.

This is an appeal from a judgment of the trial court, sitting without a jury, awarding plaintiff (appellee) judgment against appellant in the amount of $2,839.80. Ap-pellee had received two checks in payment for merchandise from Dell City Gin Co., by Mrs. Gerene Carson, drawn on the gin company’s account with the State National Bank of El Paso, Texas. The first check was in the amount of $2,839.80 dated January 9, 1960 and the second was in the amount of $1,272.65 dated, erroneously, January 11, 1959 instead of January 11, 1960. Both checks were ultimately returned by the drawee bank, appellant here, to ap-pellee with a sticker attached to each indicating that each was drawn against “insufficient funds”. The first check had been deposited by appellee in its account with a Lubbock, Texas bank and by that bank forwarded to appellant through the Federal Reserve system. It was received by appellant on January 13, 1960. At that time the maker, Dell City Gin Co., had a balance of $1,802.12 in the appellant bank, but appellant paid the check, creating thereby an overdraft in drawer’s account of $1,037.68 as of January 15, 1960. On January 18th, after the check was paid, Mr. E. C. Carson of the Dell City Gin Co. went into appellant bank and requested it to return the check “for collection” in an attempt to get Carson’s money back on the check. On that day appellant placed the “insufficient funds” sticker on the check and returned it through channels via the Federal Reserve system. Appellant’s letter of transmittal of January 18th described the check and gave as the reason for returning the check as “insufficient funds”. No notice was sent to the Lubbock bank by appellant that the check had been paid and was being returned for refund. However, the Federal Reserve Bank, in its form letter transmitting the item to the Lubbock bank described it as “Item being returned on un-current basis for refund because of lateness in return” (not in accordance with banking regulations for refusal of current items under the provisions of Art. 342-704, Vernon’s Tex.Rev.Civ.St.). The transmittal letter requests: “Obtain refund and advise us of credit” and refers to “our wire 1-19-60”. This wire was not introduced in evidence and its contents are not clear. The check was charged back to appellee’s account in Lubbock and credited to the Dell City Gin Co.’s account in appellant bank, thus bringing that account back up to the original balance of $1,802.12. However, in the meantime, and while this account was over-drawn, the second Dell City Gin Co.’s check in the amount of $1,272.65 was presented through channels to appellant bank on January 15th and was by it returned to the Lubbock bank as an unpaid item because of insufficient funds. The gin company’s account was closed February 11, 1960.

In alternative pleadings, appellee alleged in its suit against appellant:

“XI.
“Plaintiff would further show, strictly in the alternative, that the Defendant THE STATE NATIONAL BANK OF EL PASO accepted said check in the sum of $2,839.80 and paid the same on January 13, 1960, thereby creating an overdraft in the account of the said DELL CITY GIN COMPANY. That thereafter, on January 18, 1960, said Defendant, at the request of Defendant E. C. CARSON, returned said check to American State Bank of Lubbock, Texas, as agent of Plaintiff, and represented that said check was being returned for ‘Insufficient Funds’ when in truth and in fact said check was being returned for the sole purpose of eliminating said overdraft, which fact was withheld from Plaintiff. That had THE STATE NATIONAL BANK OF EL PASO, TEXAS advised Plaintiff or its agents of the real reason for the return of said check it would not have been accepted; and that because of said misrepresentation Plaintiff has been damaged in the amount of said $2,839.80.”

E. C. Carson, individually and doing business as Dell City Gin Co., was made a defendant in the suit and answered therein and agreed to a trial without the intervention of a jury, but thereafter made default and the matter was tried to the court without a jury. The court granted judgment to appellee against appellant in the amount of the first check, $2,839.80, and against E. C. Carson, d/b/a Dell City Gin Company in the amount of the second check, and judgment for appellant against Carson and the gin company in the amount of the first check. Carson and the gin company did not appeal. The trial court made findings of fact and conclusions of law, in which, among other matters, it found that the Federal Reserve Bank, on instructions of the appellant, processed and returned the first check to the Lubbock bank for collection as an unpaid item for the reason of “insufficient funds”; that this check was not returned by appellant because of “insufficient funds” and the appellant knew that the check was being returned for reasons other than “insufficient funds”; that appellee would not have authorized reimbursement to appellant of the proceeds of the check had the fact been know that such check had been paid, but relied upon appellant’s representation that the check was being returned as unpaid for the reason of “insufficient funds”; and that the withholding from appellee of the fact that appellant had paid the check was a material misrepresentation of fact. Certain additional findings were made at the request of appellant.

There appears to be no controversy in the briefs over appellant’s Points of Error Nos. 1 and 2, and since they in no way alter the conclusion arrived at in this opinion, a discussion of these points is omitted. Points 3 and 4 complain of the trial court’s error in finding that the manner in which appellant returned the first check amounted to a material misrepresentation of fact relied upon by appellee, such complaint being predicated on “no evidence”, “against the overwhelming weight and preponderance of the evidence” and being “manifestly unjust to appellant”

In Nathan v. Hudson, 376 S.W.2d 856, 862 (Tex.Civ.App., 1964; ref., n. r. e.), citing Brown v. Frontier Theatres, Inc., 369 S.W.2d 299, 301 (Tex.Sup.), it is stated: “The trial court’s findings of fact and conclusions of law should be construed together and, if possible, be in harmony with the judgment and to support it; and in determining whether the findings are supported by any evidence of probative value we should give credence only to the evidence favorable to the findings, disregarding all evidence to the contrary.” We are further guided by the rules enunciated in the case of In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951), that in a “no evidence” point, we search for any evidence of probative value to support the finding, while in a point raising the fact issue of whether the finding is “against the great weight and preponderance of the evidence so as to be manifestly unjust”, we consider all of the evidence, regardless of whether the record contains some “evidence of probative force” in support of the finding. See also State v. Stinson, 387 S.W.2d 448, 453 (Tex.Civ.App., 1965; ref., n. r. e.).

Bearing in mind the foregoing, we must examine the record to determine if the findings are supported by any evidence, or sufficient evidence, of probative value. The testimony of one T. C. Arnold, Cashier of the Federal Reserve Bank of El Paso, Texas, who was familiar with the foregoing transactions, reveals that, with regard to the first check, after it was presented to appellant bank on January 13th, it was returned by the latter to Federal Reserve Bank on January 18th, unpaid, making it an uncurrent item under existing delayed posting regulations. Arnold testifies: “This check was returned to us unpaid on January 18th * * * we telegraphed our head office in Dallas over our private wire system * * * this check reached Dallas on January 19, 1960 * * * Dallas sent it to American State Bank at Lubbock, Texas, on this form, stating that it was returned for the reason insufficient funds. Also stating that item(s) being returned on uncurrent basis for refund because of lateness in return, and request the American State Bank of Lubbock to obtain refund and advise. * * * The next thing we heard on the item we received a credit advise from the Federal Reserve Bank at Dallas, telling us that return item, unpaid check sent for refund by us on January 18th was being credited to our account for 28-39-80, representing the Dell City Gin Company check on the State National Bank. * * *” (Emphasis supplied.)

Mr. Dudley E. Wallen, Cashier of the appellant bank, testified as follows:

“Q Then, what happened on January 18th, with reference to Mr. E. C. Carson; didn’t he come into the bank on that day?
A Yes, he came into the bank on the 18th day of January, after this check was paid on his account.
Q And what did Mr. Carson request of the State National?
A He wanted us to return it for collection for him.
Q He wanted you to get his money back, didn’t he?
A Yes sir. He wanted us to attempt to get his money back.
Q And on January 18th, the State National Bank put the sticker on that check ‘insufficient funds’, and sent it back?
A We did.
Q And yet it had already been paid?
A That’s right.
Q Well, now, can you explain to me how there could be insufficient funds on a check that had already been paid?
A Well, for the simple reason that we created an overdraft by having paid this.
Q And that was voluntary on the part of the State National?
A That’s right.
Q But at no time did the State National notify anybody that this check was being returned for anything other than insufficient funds, did it?
A No, we did not. That is the reason it was returned.
Q And you did not notify anybody that that check had been paid, and was being returned for collection?
A What do you mean by notifying anybody ?
Q The American State Bank?
A No, we did not. They were notified through channels that this check was being returned, yes.
Q For insufficient funds?
A For insufficient funds.
Q But never were they notified that the check had actually been paid?
A No, we did not so notify them.”

This testimony is in contradiction to the following quotation from appellant’s answer:

“Further answering, and in the alternative, Defendant says that immediately after payment of the check in the amount of $2,839.80, this Defendant made it known to Plaintiff’s agent, The American State Bank of Lubbock, Texas, that said check should not have been paid, and that the money should be refunded. * * * ”

This answer also states: “After returning the money to this Defendant, Plaintiff stood by for some two years and allowed this Defendant to completely exhaust the account of DELL CITY GIN COMPANY before making any demands for payment.” As before stated, the gin company’s account was closed on February 11, 1960. This answer also admits that appellant bank, in sending the first check back “for collection”, was “acting upon the instructions of Defendant, E. C. Carson.”

Mr. J. T. Talkington, Secretary and Treasurer of the corporation that was doing business as Margaret’s, the appellee, testified on cross-examination:

“Q I am getting around to the question, Mr. Talkington, why then did you wait some one year, three hundred and sixty-four days, to press your claim against the State National Bank?
A For the simple reason that it was just a short time before that that I learned that there might be some other basis for this check having been returned.
Q May I go a little further with that; what difference would it make to you, as far as the way the check was returned, as to whether or not you went after the bank at that point or waited some two years later to go after the bank?
A Simply this, that if the check had actually been insufficient, or had been returned in the normal course of the business I felt that we had no recourse. But when I learned that it was not returned in the normal course of business, and that there was sufficient funds in the bank which could have taken care of at least one of the checks, then I felt that we had an action against the State National.”

and on re-direct:

“Q Just briefly, Mr. Talkington, did you ever know that the first check, the twenty eight hundred dollar check, had actually been paid by the State National Bank?
A Excuse me, did I ever know it?
Q Or, let me rephrase that, do you know at this time ?
A Yes sir.
Q When did you learn that that check had been actually paid ?
A Shortly before this — now, I can’t give you the exact date, but shortly before this suit was filed.
Q So that from the time that the checks were returned to you as insufficient, until shortly before filing this suit, some two years later, you had no knowledge that the check had actually — that one check had actually been paid?
A No, sir.”

In its reply brief, appellant again asserts that, regarding the manner in which the first check was returned, there was no evidence to support the trial court’s findings of material misrepresentation, and that such finding was against the overwhelming weight and preponderance of the evidence. It cites Panhandle & Santa Fe Ry. Co. v. O’Neal, 119 S.W.2d 1077, 1079 (Tex.Civ.App., 1938, err. ref.) as authority for the statement that to support a cause of action for fraud based upon false representations, the appellee must have shown that (1) the representation was false at the time it was made, (2) that the representation was as to a material fact, (3) that it was made with the intent to induce appellee to do or refrain from doing some act, (4) that it was relied upon by appellees, and(5) that damage or injury resulted; and that each of these elements must be established with a reasonable degree of certainty, and the absence of any one of them will prevent a recovery. The O’Neal case is cited in Klindworth v. O’Connor, 240 S.W.2d 470, 477 (Tex.Civ.App., 1951; ref., n. r. e.), which further states:

“ * * * It has been said that ‘ * * fraud is so multiform as to admit of no rules or definitions, and hence equity leaves the way open to punish frauds and redress wrongs perpetrated by means of them in whatever form they may appear.’ Varner v. Carson, 59 Tex. 303, quoting Bigelow on Frauds, Judge Simpkins, Contracts of Sale, defines fraud: ‘Fraud is an act or concealment involving a breach of legal duty, trust, or confidence justly reposed, and from which injury results to another, or by reason of which an undue and unconscientious advantage is taken of another.’ ”

Whether we rely upon definitions or basic principles of equity, we are met with the determination that the trial court did not err in its findings and conclusions, which we deem to be amply supported by the record as a whole. We accordingly overrule appellant’s Points of Error 3 and 4. Appellee had a cross-point, predicated upon a reversal by this court of the trial court’s judgment. Having treated all points, and finding no error, the judgment is affirmed and appellee’s cross-point is immaterial.

Affirmed.


author: FRASER, Chief Justice.

text:
    Buck WILSON, Appellant, v. Henry WILLBANKS, Appellee.
    No. 5724.
    Court of Civil Appeals of Texas. El Paso.
    June 30, 1965.
    Rehearing Denied Sept. 15, 1965.
    Walker F. Means, Barstow, for appellant.
    Johnson & Dionne, Ft. Stockton, for ap-pellee.
   FRASER, Chief Justice.

This is an appeal from the 112th Judicial District Court of Pecos County, Texas. The nature of the case as stated by the appellant is correct, by the admission of appellee, and is as follows: Appellee, Henry Willbanks, sued Buck Wilson, appellant, for cancellation of an agricultural lease alleged to be embodied in a written instrument dated April 24, 1963, and for possession of certain real estate and personal property. Appellant, Buck Wilson, by way of cross-action, asserted that a partnership existed between appellant and appellee for the farming, purchase and development of the lands in question and for the purchase of the personal property and equipment; that the appellee held an undivided one-half interest in said lands, personal property and equipment in trust for the benefit of appellant, and that appellant was entitled to the possession thereof. The district court sustained that part of the appellee’s Motion for Instructed Verdict, declaring the lease canceled and terminated, and upon a verdict on special issues upon appellant’s cross-action rendered judgment for appellee and against appellant.

The appellant brings up some eleven points of error, his first point claiming error on the part of the trial court in submitting to the jury special issues in the case solely as to defendant’s cross-action, and not upon the main case as pleaded by plaintiff : (a) the error of the court in sustaining in part plaintiff’s Motion for Instructed Verdict; (b) the error of the court in refusing to submit to the jury special issues presenting defendant’s alternatively pleaded defenses and theories, presented as defenses to the main cause of action by plaintiff-appellee.

Plaintiff went to trial on his Second Amended Original Petition. In addition, he filed a supplemental petition which sets forth exceptions to various parts of defendant’s pleadings and denies defendant’s allegation that the lease contract entered into between the parties was entered into as a device and simulated lease for the purpose of showing an apparent or ostensible interest in said lands, personal property and equipment to be in defendant, so that defendant would be better able to obtain financing for farm or farm development purposes. Plaintiff also filed his trial amendment in which he brought to the court’s attention two affidavits by appellant, one to the effect that a Mr. L. B. Looney transferred to appellant his interest in a certain lease on part of the property executed by E. L. Traylor and Candelario Carrasco; also, that he (the appellant) did not hold any interest or title in the lands because the said lease became void by its own terms; and he, the appellant, understands “that the record title in and to said premises is now vested in Henry Will-banks.” The other affidavit executed by appellant covers the other tract of land in controversy, where the original lease was executed by one James Lee Stephens, then assigned to L. B. Looney, and by him assigned to appellant. According to the record, these leases carried with them the option on the part of the lessee to buy the land, and that is apparently what appellee in this case did. These affidavits were executed several months before the suit was filed. As we proceed in the consideration of this case, it must be remembered that, according to the record, appellant had leases on the personal and real property herein involved, which he transferred to appellee, after which the parties entered into the five-year lease here in controversy.

Plaintiff’s Second Amended Petition, as set forth in the transcript, contains the following statements and allegations: That appellee, Henry Willbanks, is the owner of the soil and surface of the land involved in this controversy; that plaintiff (appel-lee) as lessor entered into a written contract with the defendant (appellant) as lessee wherein he leased appellant the land described in said petition, and certain wells, equipment and personal property, for a five-year period beginning January 1, 1963; that defendant, as lessee, agreed in such contract to deliver to the lessor, as rent for the premises, one-fourth of all cotton raised on said premises and one-third of all feed raised and/or grazed on said premises during the term of the lease, and in case lessee retains such feed he is allowed to pay lessor the value of same; that defendant has not paid plaintiff any crop rental for the year 1963, has not grown any crops at all on the land, has not kept the improvements in a good state of repair, and has not farmed such land in a good and farmerlike manner as provided in the lease, and has completely failed to perform his obligation under such contract or lease; that it was provided that lessee’s obligation under the lease should stand as a lien on any property that he might have on the premises; that any time during the term of the lease lessor may declare the lease at an end and thus terminate the lease if lessee shall, after ten days’ notice, be in breach or default of the terms of the lease; that plaintiff gave defendant written notice that he had declared the lease at an end, and did so by filing this suit on February 21, 1964; and sets forth that the petition filed on that day contained the statement that the plaintiff had declared the lease at an end “and Plaintiff has, and does hereby now cancel such lease and demands the possession thereof from the defendant”; that plaintiff-lessor owns all of the irrigation wells and their equipment on the land, and other large amounts of personal property described in exhibits attached to the petition, and asks for an injunction and restraining order to protect such property. In his prayer, plaintiff asks that the temporary injunction heretofore issued, restraining defendant from removing from the premises any of plaintiff’s personal property and the property described in the exhibits attached to the petition be continued in force until final judgment is entered in this cause; also, that plaintiff have judgment decreeing that the lease between plaintiff and defendant on plaintiff’s land and personal property be canceled and terminated, and plaintiff be given possession of the real and personal property, free and clear of any claims of defendant, and for costs and other relief.

Plaintiff filed a motion at the close of the evidence for an instructed verdict asking the court to hold that the lease be adjudged terminated February 21, 1964 and, inter alia, that defendant be precluded from having issues submitted alternatively to the effect that if he was not a half-owner as a partner, then, as lessee, he was in lawful and rightful possession of the premises and property herein concerned.

The court granted the first part of the motion, but declined to instruct a verdict that defendant take nothing by his cross-action wherein he asserts that he is entitled to and is the owner of one-half of the property involved. The court’s order states as follows: “That portion of Plaintiff’s said motion praying for judgment declaring the written lease dated April 24, 1963, from Plaintiff, Henry Willbanks, as Lessor, to Defendant, Buck Wilson, as Lessee, to be canceled and terminated as of February 21, 1964, and praying * * *” (emphasis ours) (then setting out other requests or prayers by the plaintiff), “ * * * is hereby granted * * * ”. It is therefore obvious that this order, granted after all the evidence was in, although containing other matters, is, as it recites, an instructed verdict to the effect that the lease between the parties was terminated" and canceled February 21, 1964. As we have pointed out above, plaintiff alleges that this notice of cancellation was accomplished by the filing of his petition on that date. Such petition, as set forth above, alleges and states that lessee-appellant failed to pay rental, and to operate the premises, in a farmerlike manner, etc., and therefore ap-pellee-lessor was declaring the lease terminated and canceled as of February 21, 1964.

Because of these matters, as set forth above, we have examined the entire Statement of Facts, consisting of 431 pages, as well as the rest of the record, and it is immediately obvious that there is testimony both for and against the allegations in plaintiff’s petition relative to the matters dealt with in the instructed verdict cancelling and terminating the lease. There were several witnesses, including the appellant, who testified that the premises were cultivated or farmed in a farmerlike and proper manner. Witnesses for lessor-appellee testified to the contrary. Because of the allegations in plaintiff’s petition (which he says is the notice of termination) and the testimony, there were, in our opinion, controverted material fact questions before the court and jury. We do not believe, therefore, that the trial judge was correct in instructing a verdict to the effect that the lease was terminated on February 21, 1964, and we believe and hold that these particular matters, as the controversy stood before the court, should have been submitted as fact issues to the jury, and should not have been decided and resolved by the judge. There are many authorities passing on the elements necessary to justify an instructed verdict, and in the case of Neigut v. McFadden, 257 S.W.2d 864 (Tex.Civ.App., n. r. e.), the court points out that there is an anology between the evidence justifying an instructed verdict and that which justifies a summary judgment. The opinion in that case cites the case of Air Conditioning v. Harrison-Wilson-Pearson, 151 Tex. 635, 253 S.W.2d 422, wherein our Supreme Court states:

“The courts of this State have repeatedly held that it is error to instruct a verdict when the evidence raises any material issue. In passing upon the question of the authority of the trial court to instruct a verdict, as was done in this case, the evidence must be considered most favorably in behalf of the party against whom the verdict is instructed. A peremptory instruction is warranted only when the evidence is such that no other verdict should be rendered. If there is any conflicting evidence in the record of a probative nature, a determination of the issue is for the jury. White v. White, 141 Tex. 328, 172 S.W.2d 295; Stevens v. Karr, 119 Tex. 479, 33 S.W.2d 725.”

The plaintiff always has the burden of alleging and proving grounds sufficient to entitle him to judgment or recovery. That burden was on the plaintiff here, and by the terms of his own petition he was obligated to prove that appellant had breached the terms of the lease. These matters or facts according to the record here became material fact questions and, in our opinion, should have been submitted to the jury. We believe that it was indispensable to plaintiffs lawsuit as pleaded that he allege and prove that appellant had breached the terms of the lease, in order to authorize the cancellation and termination thereof.

We do not pass on the adequacy or legality of appellant’s proffered issues, as we do not believe the plaintiff here sufficiently discharged the burden of alleging and proving facts necessary to entitle him to the instructed verdict he received. By this, we mean there was no proper disposition of indispensable fact questions.

The only issue answered by the jury related to appellant’s plea and cross-action, to the effect that he and appellee were actually partners, and this question was answered adversely to appellant. Because of the adverse answer to this question — to-wit, no partnership existed- — and because the court had instructed a verdict to the effect, that the lease was canceled, the judgment was entirely in favor of plaintiff.

We sustain appellant’s first point of error.

Appellant also presents a point of error stating that the court erred in denying his motion for continuance. While we do not pass on this matter at this time, as we believe the case is disposed of as stated above we should like to observe that the record in this case consists of a Statement of Facts of 431 pages, a fairly voluminous transcript, and a voluminous set of exhibits including many documents, canceled checks, notes and photographs. Plaintiff’s Second Amended Petition shows it to have been filed in the afternoon of March 5, 1964, approximately thirteen days before trial. The Statement of Facts shows that the jury was selected and the trial of this case began on March 18, 1964 which is, of course, less than a month from the date that plaintiff initiated this lawsuit. It seems to us, because of the multiplicity of issues involved in this controversy and the size of the record, that the defendant (represented here by one attorney, not a firm) would be hard-put to adequately prepare and defend himself.

Because, as we have stated above, it was the burden and obligation of the plaintiff to plead and prove the lease and the breach thereof, and because the question of the alleged breach or breaches of said lease became, as evidenced by the record, contested, controversial and essential matters of fact, we believe that error was committed in granting an instructed verdict. Regardless of what defendant pleaded or did not plead, plaintiff still had the burden, in the absence of defendant’s admission of liability, of pleading and proving his lawsuit. Here, we think there were fact matters involved, and the court wrongfully excluded same from consideration by the jury.

Appellant’s first point having been sustained, we do not pass on appellant’s remaining points, as we think our holding on the first point is decisive of the appeal.

The judgment of the trial court is accordingly reversed and the case remanded.


author: DAVIS, Justice.

text:
    DEVELOPMENT INVESTMENT CORPORATION, Appellant, v. DIVERSA, INC., Appellee.
    No. 7655.
    Court of Civil Appeals of Texas. Texarkana.
    Aug. 24, 1965.
    Rehearing Denied Sept. 14, 1965.
    David M. Kendall, Jr., Woodruff, Hill, Bader & Kendall, Dallas, for appellant.

      Marvin S. Sloman, Paul Carrington, Car-rington, Johnson & Stephens, Dallas, for appellee.
   DAVIS, Justice.

A summary judgment case. Plaintiff-appellant, Development Investment .Corporation, hereinafter referred to as plaintiff, or DIC, sued defendant-appellee Diversa, Inc., hereinafter referred to as defendant, or Diversa, for the value of services rendered by plaintiff to defendant pursuant to an oral contract; or, for compensation, or a so-called “Finders Fee” allegedly due plaintiff in connection with the purchase by defendant of the stocks in three insurance companies from the Blakley-Braniff Foundation.

According to the pleadings, during the latter part of the year of 1961, Blakley-Braniff Foundation, hereinafter referred to as the Foundation, the owner of all the capital stocks of Girard Life Insurance Company, Girardian Insurance Company, and Guardian Underwriters Insurance Company, and their assets, advised Edwin T. Slaughter, Superintendent of DIC, that it was interested in disposing of the stocks. Slaughter secured from the Foundation and from the three insurance companies information concerning the stocks and assets of said insurance companies, their financial status, and other similar facts which would be of interest to a prospective purchaser. Slaughter then contacted Ernest D. Wright, Vice President of Diversa, along with many other prospective purchasers, advising them of the availability of the stocks for sale. Gerald C. Mann was Chairman of the Board and President of Diversa until November, 1962, and then was Chairman of the Board and Chief Executive Officer. The information acquired by plaintiff was submitted to defendant. This included an appraisal of the real estate which valued the assets at approximately $60,000,000.00. They were trying to sell the three insurance companies’ stocks and assets to defendant for about 25 million dollars to 27 million dollars. Defendant, through Wright, advised the plaintiff on or about March 15, 1962, that they were not interested in the purchase.

A group of the plaintiffs immediately formed a new corporation known as Consolidated Exchange Corporation. Immediately after March 15, 1962, plaintiffs commenced to try to borrow $4,500,000.00 from defendant. Later, on April 29, 1962, they wrote a letter to Wright in which they sought a $6,500,000.00 loan. The loan was refused.

In March of 1963, Senator William A. Blakley contacted Gerald C. Mann for the purpose of selling him the stocks in the three insurance companies. Blakley made Mann an offer in which Mann, personally, was interested. Mann secured certain help to make an investigation of the overall condition of the three insurance companies. The information secured in 1963, and the price offered were so interesting that Gerald C. Mann, personally, signed a “Stock Purchase Agreement” on April 10, 1963, and put up a forfeit of $100,000.00. The Stock Purchase Agreement further provided that if the contract was not closed within 120 days that Gerald C. Mann would put up another $150,000.00, which he did. Although Gerald C. Mann signed the Stock Purchase Agreement, the Diversa, Inc. later made the purchase in July of 1963.

Plaintiff became a dormant corporation in November or December of 1962. Plaintiff filed this suit in the name of the corporation and took the deposition of Edward T. Slaughter. He testified that he was the President during the years 1961 and 1962, and submitted the stocks and assets for sale to defendant on a “look-see” basis; that defendant was not interested in the purchase, and returned all the information to plaintiff on or about March 15, 1962; that he, Edward T. Slaughter, did not have any interest in any remuneration from the deal, and did not feel like plaintiff did either. Edward T. Slaughter was the man that did most of the contacts with the defendant.

Defendant filed a second motion for summary judgment in which it alleged, in part, as follows:

“1. Neither defendant nor anyone acting for defendant entered into any agreement, contract, or understanding, such as is alleged in plaintiff’s petition or otherwise, whereby there was imposed on defendant any duty owed to plaintiff which has been breached by defendant.
“2. (a) No officer, agent or employee of defendant had, or exercised, or displayed, any actual or apparent authority to make any contract, agreement or understanding of any character whatsoever with plaintiff on behalf of defendant. Neither defendant nor any officer, agent or employee of defendant did anything which would induce plaintiff or any representative of plaintiff to believe that any such officer, agent or employee possessed such authority or appeared to possess such authority.
“(b) Moreover, plaintiff’s representatives dealt with a vice-president of defendant, and such representatives of plaintiff actually knew that defendant’s vice-president had no authority to commit defendant to or assume or undertake for defendant, any obligation to plaintiff of any character whatsoever.
“3. A representative of plaintiff first presented the stock_of the three insurance companies referred to in plaintiff’s petitions, to a vice-president of defendant, stating and representing to him that defendant could examine into the companies and their assets without obligation, and upon the express representation, condition and understanding that if (and only if) defendant were preliminarily interested in pursuing further the possibility of acquisition of the stock_of the three insurance companies would plaintiff expect defendant to negotiate with plaintiff as to compensation to be paid plaintiff in connection with any acquisition of the stocks by defendant should defendant thereafter undertake to negotiate for the purchase of the stock_
“Such a condition and express understanding was ever fulfilled. Defendant neither had nor ever developed any interest in the deal presented for the stocks and so advised plaintiff, ending whatever the duty or responsibility there then was to plaintiff, if any.
“4. Plaintiff itself thereafter completely abandoned any proposal whereby it hoped to induce or interest defendant in considering a purchase of the insurance companies’ stocks, on any terms. Plaintiff did make one other approach to defendant, trying to get defendant to lend plaintiff or a corporation formed by plaintiff several million dollars so plaintiff or such corporation could buy the insurance companies’ stocks. Defendant had no interest in lending any sum of money to plaintiff, and refused such proposition. Defendant does not owe plaintiff anything for listening to plaintiff’s representatives try to induce defendant to lend a large sum of money to plaintiff or for plaintiff’s benefit.
“5. Months after all the foregoing, and having long abandoned any and all contact with defendant or defendant’s representatives with regard to the insurance companies’ stocks, plaintiff abandoned any interest in the stocks of the three insurance companies. Plaintiff became an inactive and dormant corporation, and long before defendant ever began to have any interest in acquiring the stock_of the three insurance companies plaintiff had gone out of business, and its officers, directors and shareholders had taken up other and outside endeavors and were no longer attempting to interest defendant, or any of the others they had meanwhile tried to interest, in the stocks of the three insurance companies.
“6. Later, the chief executive officer of defendant did become interested in making an investigation into the stocks of the three insurance companies, and the assets and properties of such companies, with a possibility in mind of acquiring such stocks; and finally he made a personal commitment for the acquisition of the stocks, intending same for the benefit of defendant should it finally appear that defendant in the judgment of its board of directors desired to acquire them. Ultimately defendant did so elect and did acquire the stocks.
“The interest of the chief executive officer of defendant in making an investigation and in securing the right (later exercised by and for the benefit of defendant) to acquire the insurance companies’ stocks, arose wholly through the efforts of an individual who was in no way connected with plaintiff. The discussions with such individual, the investigation of the stocks and the insurance companies and their assets, and the contracting for the right to acquire the stocks, and their acquisition were wholly unconnected with plaintiff in any way.
“7. Moreover, the acquisition of the stocks by defendant was entirely a different deal from anything ever suggested or presented by plaintiff. Furthermore, major differences in the deal resulted from transactions which took place after plaintiff had ceased to do business and its personnel had dispersed, and were transactions which plaintiff did not and could not have had anything to do with.
“8. At all times material to this action neither plaintiff nor any of its officers was.a licensed securities dealer under the Texas Securities Act then in effect, Art. 581 of the Revised Civil Statutes of Texas (Senate Bill 294, chapter 269, Acts of the 55th Leg.) and under the specific provisions of section 34 of said Act plaintiff is not entitled to bring or maintain this action.”

The trial court granted the second motion for summary judgment. Plaintiff perfected its appeal. It brings forward 9 points of error. The defendants challenged the appeal and bring forward 5 counterpoints of error.

By its points 7, 8 and 9, plaintiff says that it is not required to have a Securities Dealer’s License as required by Art. 581-34, Vernon’s R.C.S., (Texas Securities Act), because defendant was actually engaged in buying and selling securities and the Securities Act is not designed to protect purchasers situated as was defendant. It relies on Art. 581-5(H), R.C.S.

Defendant, by its counter-point 5, takes the position that the trial court correctly rendered final summary judgment on the' ground that plaintiff is not entitled to bring or maintain this suit because at no time did it have a Securities Dealer’s License under the Texas Securities Act, Art. 581-34, R.C.S., and no exemption from the provision of the Act is available to the plaintiff, and there was no showing of any genuine issue of material fact on this question.

We do not construe the statute to mean that the plaintiff is exempt under the transaction involved. Art. 581-5 (H), R.C.S., “Exempt Transactions”, reads as follows:

“Except as hereinafter in this Act specifically provided, the provisions of this Act shall not apply to the sale of any security when made in any of the following transactions and under any of the following conditions, and the company or person engaged therein shall not be deemed a dealer within the meaning of this Act; that is to say, the provisions of this Act shall not apply to any sale, offer for sale, solicitation, subscription, dealing in or delivery of any security under any of the following transactions or conditions:
“ if If if
“H. The sale of any security to any bank, trust company, building and loan association, insurance company, surety or guaranty company, savings institution, investment company as defined in the Investment Company Act of 1940, small business investment company as defined in the Small Business Investment Act of 1958, as amended, or to any registered dealer actually engaged in buying and selling securities; or the issue or sale of any investment contract in connection with an employees’ stock bonus, annuity, pension, profit-sharing or similar employee benefit plan provided the securities purchased under the plan either would be exempt if sold by a registered dealer under Section 6 hereof or shall be qualified under Section 7 hereof or purchased in a transaction exempt under Section 5 hereof.”

There is no pleading or proof that the defendant was engaged in buying and selling securities as the main course of their business. Lawyers Lloyds of Texas v. Webb (Tex.Civ.App.) 150 S.W.2d 181, reversed on other grounds 137 Tex. 107, 152 S.W.2d 1096; Head v. New York Life Ins. Co. (Tenth Cir.Ct. of App.) 43 F.2d 517; York v. Dotson (Tex.Civ.App.) 271 S.W.2d 347, E.R., N.R.E.

Plaintiff relies on the above quoted statute, as well as the following cases in which the character of the defendant as a “purchaser” was involved: Fowler v. Hultz, 138 Tex. 636, 161 S.W.2d 478; Lewis v. Davis, 145 Tex. 468, 199 S.W.2d 146; Hull v. Fitz-Gerald (Tex.Civ.App.) 232 S.W.2d 93, affirmed with dissenting opinion, Fitz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256; and, Dunnam v. Dillingham (Tex.Civ.App.) 345 S.W.2d 314, N.W.H. These suits are by oil and gas landmen seeking to recover against lessees and having purchased leases when hired to do so by the lessees themselves. The Supreme Court approval of the Civil Appeals’ decision in Shriver v. Stoddard (Tex.Civ.App.) 188 S.W.2d 892, er. ref., and in Manering v. North Texas Producers Association (Tex.Civ.App.) 370 S.W.2d 939, E.R., N.R.E., indicate that the oil and gas landmen’s cases are so limited. At the time the Foundation told the plaintiff that it was interested in selling the stock and assets in the three insurance companies, the Foundation told the plaintiffs that they would not pay any fee or commission in the event they found a purchaser. The plaintiff was the agent, in fact, of the Foundation. It was alleged and shown by the pleading and the depositions on file (there are 10 depositions containing about one thousand pages and numerous exhibits on file), that in the event the defendant was interested in purchasing the stocks and assets they would get together and make a reasonable agreement as to a commission, or a position for the plaintiffs; this meant that if the defendants were interested in purchasing the stocks and assets that the defendant would agree on a cash commission; or, for the plaintiffs to receive some stocks. The only thing that is shown by the pleading and the depositions is that this discussion was had with Wright, a Vice President of Diversa, who had no authority to bind the defendants. There being no agreement to purchase the stocks there was no agreement to pay a commission, or for a position.

The plaintiffs are bound by Art. 581-34, R.C.S., “Actions for Commission; Allegations and Proof of Compliance”, which reads as follows:

“No person or company shall bring or maintain any action in the courts of this state for collection of a commission or compensation for services rendered in the sale or purchase of securities, as that term is herein defined, without alleging and proving that such person or company was duly licensed under the provisions hereof and the securities so sold were duly registered under the provisions hereof at the time the alleged cause of action arose; provided, however, that this section or provision of this Act shall not apply to the exempt transactions set forth in Section 5 of this Act nor to the sale and purchase of exempt securities listed in Section 6 of this Act, when sold by a registered dealer.”

It will be noted that the defendant alleged in its second motion for summary judgment that “At all times material to this action neither plaintiff nor any of its officers was a licensed security dealer under the Texas Security Act * * * It was upheld in Manering v. North Texas Producers Association, supra, “ * * * that the plaintiff must allege and prove his license when seeking a recovery of compensation based upon a transaction which contemplates the sale and transfer of real estate or securities. * * * ” Such is the holding in Shriver v. Stoddard, supra, and Sibley v. Coffield (Tex.Civ.App.) 193 S.W.2d 239, E.R., N.R.E. Plaintiff’s points 7, 8, and 9 are overruled and defendant’s counter-point 5 is sustained.

Plaintiff contends by its points 1 through 6 inclusive, that there were material issues of fact as to the agreement to pay a commission, or create a position, between plaintiff and defendant; that defendant had breached the agreement; that defendant profited from the agreement; that plaintiff was entitled to compensation from defendant for the use of the information and services provided to it by plaintiff; that Wright, Vice President of defendant, had authority to agree with plaintiff to pay plaintiff a reasonable fee; and, that Wright had apparent authority from defendant to agree with plaintiff to pay plaintiff a reasonable fee if defendant made use of the information and services provided to it by plaintiff.

Plaintiff was seeking to recover a commission, or a so-called “finder’s fee”, from the defendant for the purchase of the stocks of three insurance companies, based upon an alleged agreement between the plaintiff and an officer of the defendant who did not have any authority at all to make any such alleged agreement. In view of the pleadings, the second motion for summary judgment which was accompanied by two affidavits, and the ten depositions on file, it does not seem that any such agreement was made in the past, or the issue could be raised in the future. Whether there could be a material issue of fact raised or not, the plaintiffs could not recover because of the fact that they are not licensed under the Securities Act. Gerald C. Mann testified positively and without any contradiction in the record, that he did not make any use of the information or advice furnished to him, personally, or to the defendant, from plaintiff, or Slaughter, in connection with his decision at the time he decided to sign the purchase agreement contract on April 10, 1963, more than a year after they had refused the previous purchase. Gerald C. Mann further testified that he acquired the stocks and assets in the three insurance companies for a total consideration of about Thirteen Million Nine Hundred Sixty Thousand ($13,960,-000.00) Dollars, which was almost 50% lesk than the sale price as offered to defendant by the plaintiff. There does not exist any material issue fact. Air Conditioning Inc. v. Harrison-Wilson-Pearson, 151 Tex. 635, 253 S.W.2d 422; Watson v. Upfield (Tex.Civ.App.) 335 S.W.2d 777, N.W.H.; Rule 166-A, Vernon’s Ann.Tex.Rules of Civil Procedure, and authorities cited there. Plaintiff’s points 1 through 6 are overruled.

The judgment of the trial court is affirmed.

FANNING, J., concurs.

CHADICK, Chief Justice (disqualified).

My disqualification to participate in this case was made known to the parties shortly after the case was transferred to this court. I took no part in its determination.


text:
    Casey I. WITHERS, Appellant, v. H. E. SPROUL, Appellee.
    No. 5723.
    Court of Civil Appeals of Texas. El Paso.
    July 21, 1965.
    Rehearing Denied Sept. 15, 1965.
    Groom, Barnes & Adams, Houston, for appellant.
    Scott, Hulse, Marshall & Feuille, Schuyler B. Marshall, El Paso, Norman C. Davis, Marfa, for appellee.
   CLAYTON, Justice.

This is a will contest. The testator, Robert C. Withers, died on or about June 15, 1961. One H. E. Sproul, no relative but a friend of the testator, filed for probate in the County Court of Jeff Davis County a will of the deceased dated August 14,1959, in which Sproul was named Independent Executor, which will was contested by Casey I. Withers, a son of the deceased and his sole heir at law, alleging mental incapacity of the deceased and undue influence exerted upon the deceased by Sproul. This will was admitted to probate, and an appeal taken by contestant to the district court of said county. In a trial before a jury, the parties stipulated that there was no issue raised by the evidence as to the proper execution of the will or the testamentary capacity of Robert C. Withers at the time the will was executed. In answer to special issues, the jury answered “We do not” to Special Issue No. One, inquiring whether the jury found that the decedent had revoked the will of August 14, 1959 by the execution of another will with the intention of revoking the August 14, 1959 will; and answered “We do not” to Special Issue No. Two, inquiring whether the jury found that the August 14, 1959 will was procured by undue influence on the part of the proponent Sproul. To a judgment on this verdict, admitting the will of August 14, 1959 to probate and appointing proponent Sproul as Independent Executor, contestant Withers appeals.

Appellant presents five points of error: No. 1, that the finding and answer of the jury to Special Issue No. 1 is contrary to the great weight and preponderance of the evidence and the manifest weight of the testimony; No. 2, that therefore the trial court erred in admitting to probate the will of August 14, 1959; No. 3, that in admitting said will to probate the trial court erred as a matter of law since the evidence introduced by contestant raised a sharp issue as to the revocation of said will and the proponent failed to obtain an affirmative finding by the jury as required hy law that the will had not been revoked; No. 4, that the admission of the will to probate was error as a matter of law since the requirements of part (3) of subdivision (b), section 88 of the Texas Probate Code had not been given compliance because the proponent of the will had not met his burden of proof by a preponderance of the evidence and failed to obtain a jury finding thereon that said will had not been revoked; and No. 5, that the jury’s response, to Special Issue No. 2 is contrary to the great weight and preponderance of the evidence and the manifest weight of the testimony. Appel-lee raises the objection to appellant’s Points 3 and 4 that they were not assigned as error in appellant’s Amended Motion for New Trial and they therefore cannot be considered on appeal. We do not pass on the merits of this objection for the reason that we consider the objected-to points are properly disposed of in our discussion of Points 1 and 2, dealing with the matter of revocation.

§ 88, Texas Probate Code, subsection (b), part (3) provides: “(b) Additional Proof for Probate of Will. To obtain probate of a will, the applicant must also prove to the satisfaction of the court: * * * (3) That such will was not revoked by the testator.” The Texas Supreme Court discusses this statutory provision in the 1964 case of Ashley v. Usher, 384 S.W.2d 696, in the following language: “Thus, the burden of establishing that a will has not been revoked is placed by this statute on the proponent of the will sought to he probated.” (Citing numerous cases). “The rule enumerated in the above cases is that where' testator’s will produced in court comes from the custody of those to whom it has been delivered by the testator, or is found among testator’s papers in a place he usually keeps his valuable papers, and there is no suspicion cast upon the genuineness of the will, there exists a presumption that the will has not been revoked. Under such circumstances, a proponent has satisfied the statutory requirement to prove no revocation.” See also Covington v. McDonald, 307 S.W.2d 335 (Tex.Civ.App., 1957; n. w. h.). The above is precisely the situation presented here. When the August 14, 1959 will was drawn, an original and two signed copies were executed. The original was kept by the testator, one signed copy went to the attorney who drew it up, and a second signed copy went to Sproul, the main beneficiary and proponent here. One of these signed copies was filed for probate and later replaced by the original will, which was found by the proponent in a box on the bed or a desk in decedent’s bedroom. This original will was introduced in evidence and was in an unmarked and unmutilated condition. One of the attesting witnesses testified by deposition that the will was executed under all the necessary formalities to make it a valid will (and this was stipulated by the parties to this cause), and had not been revoked in so far as the witnesses knew. This was held to be sufficient to satisfy the burden of proving that the will had not been revoked, in the Covington v. McDonald case cited above. That case also quoted section 63, Texas Probate Code, as to the manner in which wills in writing may be revoked:

“ ‘No will in writing, and no clause thereof or devise therein, shall be revoked, except by a subsequent will, codicil, or declaration in writing, executed with like formalities, or by the testator destroying or canceling the same, or causing it to he done in his presence. Acts 1955, 54th Leg., p. 88, ch. 55.’”

and cites Baptist Foundation of Texas v. Buchanan, 291 S.W.2d 464, 472 (Tex.Civ.App., 1956; ref., n. r. e.) as authority for the statement that:

“ ‘The burden is upon the party who asserts revocation “to show by a preponderance of the testimony the execution, attended by due formality and legal requirements, of a subsequent instrument, which either expressly or impliedly revoked the former will.” 44 Texjur., Wills, Sec. 101, p. 645.’ ”

No will, codicil or declaration in writing subsequent to the August 14, 1959 will was produced in the instant case, but it is of interest to note that a previous will, dated April 29, 1946, was canceled by the decedent writing across the face of the instrument, and signing, the following declaration: “I have this the 17. day of Sept., 1958, cancelled this, the above Will, and am making another Will for all Purposes. (Signed) Robert C. Withers.”

In the interest of brevity we will not attempt to recount the evidence relied upon by appellant-contestant in support of his points of error relative to revocation of the will which was admitted to probate. As we read the record this evidence amounted to little more than conjecture or speculation, while the jury’s answer of “We do not”, in response to Special Issue No. One inquiring whether the jury found that the August 14, 1959 will was revoked by the decedent by the execution of another will with the intention of revoking the August 14th will, is amply supported by the evidence. The contention is advanced by contestant that such answer by the jury did not amount to an affirmative finding for the proponent that the will had not been revoked. It is stated by proponent that this issue, in the form in which submitted, was requested by contestant, but in any event no objection was made by contestant to the issue as submitted, and we feel that as a matter of law, under the Texas Probate Code and the authorities above referred to, no adequate revocation has been shown here. We accordingly overrule Points of Error Nos. 1, 2, 3 and 4.

This brings us to Point of Error No. 5 which charges that the jury’s answer to Special Issue No. 2 was contrary to the great weight and preponderance of the evidence. This issue inquired whether the jury found that the will of August 14, 1959 was procured by undue influence on the part of the proponent, Sproul, to which the jury answered: “We do not.” The focal point of the controversy is the second provision of said will, reading as follows:

“SECOND. On March 28, 1946 I deposited the sum of $14,000.00 at the University State Bank of Houston, Texas to the joint account of Casey I and Robert C. Withers. Thereafter the said Casey I Withers withdrew the sum of $8,000.00 from said account.
(a) I hereby give and bequeath to my son, Casey I Withers and his wife Lessie, $1,000.00 of the said $8,000.00 above referred to.
(b) I hereby give and bequeath to my grandson, Norman C. Withers and his wife Martha, $1,000.00 of the said $8,000.00 above referred to.
(c) I give and bequeath unto my great grandson, Blake Withers the sum of $1,000.00 of the said $8,000.00 above referred to.
(d) The foregoing bequests of $1,000.-00 each are payable out of and from the said $8,000.00, and shall not be paid from any other property constituting my estate.”

With the exception of three other bequests of $200.00 each to nephews, the rest of the estate, of some considerable proportions, was left to the proponent Sproul, who was also named Independent Executor. It is charged by contestant that the dispositive provisions of the will are unnatural in that they effectively disinherit the decedent’s son, Casey I. Withers, contestant here, and his wife, as well as Norman C. Withers, a grandson, and Blake Withers, a greatgrand-son, of whom the decedent was very fond, while giving the great bulk of the estate to Sproul, to whom decedent was not related. It is pertinent to note here that the will of April 29, 1946, which was canceled or revoked by decedent’s own writing on September 17, 1958 (as referred to earlier in this opinion) had left all decedent’s property to his son Casey and said will was canceled because decedent was “making another Will for all Purposes”, which he did by the will of August 14, 1959. Another point of interest relates to the circumstances surrounding the deposit of the $14,000.00 in the Houston bank on March 28, 1946, alluded to in the second provision of the August 14th will.' There appears to be some conflict as to whether or not Casey I. Withers had repaid the $8,000.00 said to have been withdrawn from this account. But in any event, at the same time that the $14,-000.00 deposit was made in the Houston bank, decedent conveyed to Casey I. Withers a tract of land in Jasper County, Texas and three tracts of land in Jeff Davis County, Texas. These conveyances were accompanied by two substantially identical letters written by decedent to his son, Casey, one relative to the Jasper County and the other relating to the Jeff Davis property. One of these letters reads as follows:

“March 29, 1946
“Mr. C. I. Withers Beaumont, Texas
Dear Son:
By deed dated March 29, 1946, I conveyed to you 3 tracts of property situated in Jeff Davis County, Texas, fully described in said deed. In deeding this property to you, it is agreed that should I desire, during my lifetime, to have you sell any of said three tracts, or all of said three tracts, you will do so at my request and give me the proceeds of said sale of said properties, or any part thereof.
Upon my death, any of said property remaining in your name will become your absolute property.
Very truly yours,
/s/ Robert C. Withers
APPROVED:
/s/ C. I. Withers”

Subsequently, in 1957, the decedent demanded return of the Jasper County property from Casey but the latter refused to comply, resulting in a lawsuit filed against Casey by his father in Jasper County in the fall of 1958. This suit was settled in the latter part of 1959, but the decedent then demanded return of the Jeff Davis property. This resulted in much correspondence and threats of another lawsuit before the matter was finally settled. During these controversies, Lessie Withers, wife of Casey I. Withers, wrote the decedent a letter dated July 1, 1959, about six weeks before the execution of the August 14, 1959 will, and from which letter the following excerpts are taken:

“I hope that you and every one that is connected with that suit in Jasper County are satisfied * * * Years ago different one’s of your family tried to tell me the kind of person that you were, and that you did not care for no one but your self; but I just would not believe it. You will never know what a hard time I had of convincening Casey that he was wrong by not forgiving and forgetting the past so Norman could grow up knowing you as a real GrandFather * * * Now here when we could have all been so happy together you let some one talk you into loosing your family, the thing that means more to me than all the money and land that you have or every will have * * * I don’t know what your friends or relatives have told you or are trying to get you to do but I do know one thing, as for me I have washed my hands of the whole thing * * * Now this is the Thanks that Casey & I both get from you. Back again to what I was told years ago, self and selfishness is your motto. I hope when this is over and you realize that what you get out of it could never take the place of a family and loved ones, that you can still be happy and enjoy spending the money that you get.”

We believe that it can fairly be stated that the controversies which the decedent had with his son, the contestant here, the expressed attitude of his son’s wife toward decedent, and from the record as a whole, that the affection which decedent no doubt held for his family was adversely affected. On the other hand there is testimony in the record that decedent was strong-willed and headstrong, not easily influenced by others and, in sum, not the type of person who would be readily susceptible to undue influence. The Texas Supreme Court, in Boyer v. Pool, 154 Tex. 586, 280 SW.2d 564, 565 has stated:

“ * * * The test of undue influence is whether such control was exercised over the mind of the testator as to overcome his free agency and free will and to substitute the will of another so as to cause the testator to do what he would not otherwise have done but for such control. Scott v. Townsend, 106 Tex. 322, 166 S.W. 1138; Curry v. Curry [153 Tex. 421], 270 S.W.2d 208.”

The will of August 14, 1959, admitted to probate, was discussed by decedent with his attorney, perhaps, as claimed by contestant, in the presence of the proponent Sproul; the will later was dictated by the attorney to his secretary who typed it; a copy of the proposed will was sent to the decedent by covering letter dated August 12, 1959, typed by the attorney’s secretary, in which the attorney asked to be informed of any changes or corrections desired; and on August 14, 1959 the will was signed in the attorney’s office by the decedent in the presence of the two subscribing witnesses, the attorney and his secretary, who acted as notary public. No changes were made in the will and no one else was present when it was executed in its original form and two copies. The original went to decedent, a copy to the attorney and another copy to Sproul.

We find nothing in the testimony of any of these witnesses to the execution of the will, nor indeed in the entire and extensive record, which included the testimony of decedent’s doctor and pastor, which would have led us to a conclusion that undue influence, such as defined in Boyer v. Pool, supra, had deprived the decedent of a free and voluntary exercise of his own discretion and desire in the framing of this will. Nor do we find the will to be so unnatural as to cast upon it grave doubts as to its legitimate and voluntary character, except perhaps, the sole fact that the principal beneficiary named therein is a friend of some long standing rather than one or more of decedent’s direct of kin. We believe that the circumstances, such as we have related from the evidence, satisfactorily account for the disposition made, and the jury apparently so found. We are impelled, therefore, to reject the contention of “undue influence” and to overrule the last point of error, No. 5.

The judgment of the trial court is accordingly affirmed.