author: GREEN, Chief Justice.

text:
    Curtis B. DYER, Appellant, v. CALDCLEUGH & POWERS et al., Appellees.
    No. 75.
    Court of Civil Appeals of Texas. Corpus Christi.
    May 20, 1965.
    Opinion After Filing of Remittitur June 2, 1965.
    Rehearing Denied June 29, 1965.

      Milton Walton, of Bloch & Walton, Corpus Christi, for appellant.
    William H. Keys, of Keys, Russell, Watson & Seaman, Corpus Christi, for appel-lees.
   GREEN, Chief Justice.

Curtis B. Dyer, appellant, was plaintiff in a suit on a promissory note and defendant in a suit for damages based on alleged fraud and breach of contract arising out of the same transaction. Appellees R. E. Cald-cleugh, Jr., Jack Powers and Maxine Gallagher, individually and as members of a partnership of Caldcleugh & Powers, and appellee William H. Cousins were defendants in the suit on the note, and, except for Cousins, were plaintiffs in the suit for damages. The two cases were consolidated and tried by the court without a jury. The trial court found in favor of Dyer on the note against Caldcleugh, Jr., Powers and Gallagher, and against Dyer as to defendant Cousins. The trial court found against Dyer on the suit for damages in an amount in excess of the sum found to be due him on the note, and entered judgment against him for the difference. Dyer has appealed from all of such judgment except as awards him recovery on the promissory note.

At the request of appellant the trial court filed findings of fact and conclusions of law. It is the principal contention of appellant, as shown by his 65 points of error, that there was no evidence and insufficient evidence to support the court’s findings of fraud and breach of contract by appellant, and his conclusions of resulting damages to appellees, and that such findings and conclusions were against the preponderance of the evidence, and that double recovery of damages was awarded.

On September 23, 1960, by written contract executed by Curtis B. Dyer as Seller and Jack Powers and Maxine Gallagher as Buyer, to become effective October 1, 1960, Seller sold and conveyed to Buyer the business known as Curtis Dyer, d/b/a Dyer Insurance Agency, a casualty and fire insurance agency, located in Corpus Christi, Texas, for a consideration of $17,000.00, of which $5,000.00 was paid in cash, and $12,-000.00 was evidenced by a note in that sum, signed by Powers, Gallagher and W. H. Cousins, dated October 1, 1960, and payable $500.00 per month. The first six payments of said note were duly paid as they accrued but no payment has been made since April, 1961.

As found by the trial court, on February 1, 1961, four months after the sale of the agency, the insurance business of Jack Powers and Maxine Gallagher was merged into a partnership styled Caldcleugh & Powers, consisting of Powers, Gallagher and Robert E. Caldcleugh, Jr., who had purchased into the firm. The trial court concluded that such partnership succeeded to the rights of the original buyers in the purchase agreement above referred to, and that Caldcleugh assumed liability, along with his partners, on the promissory note given as part payment. Neither party to this appeal has raised any point or objection to such finding and such conclusion of the court.

Appellees Caldcleugh, Powers and Gallagher, in the suit as consolidated, elected to stand on the contract and to sue for damages resulting to them through alleged fraud of appellant, and for additional damages accruing as the result of alleged breach of the contract by Dyer. That they were entitled to do so is well settled. The injured party in a contract based on fraud may, if he chooses, retain the benefits of the contract, confirm its validity, and still recover damages for the fraud by which he was induced to make it; or he may recoup any damages which he has sustained if the opposite party sues him for money due on the contract. Tips v. Barneburg, Tex.Civ.App., 11 S.W.2d 187, writ ref.; Andrews v. Powell, Tex.Civ.App., 242 S.W.2d 656, writ ref., n. r. e.; Carruth v. Allen, Tex.Civ.App., 368 S.W.2d 672, n. w. h.

FRAUD

In his Conclusion of Law No. 4, based on the Findings of Fact, the trial court stated:

“Plaintiffs have been damaged in the sum of $5000.00 by reason of the fraudulent misrepresentations by Defendant and by reason of Defendant’s intentional failure to disclose material facts. Plaintiffs are entitled to recover said amount from Defendant.”

In all of the negotiations and discussions leading to the making of the sales contract, Dyer acted for himself, and Buyer was represented by W. H. Cousins, an insurance man of considerable experience in the sale and purchase of insurance agencies, who was recognized by appellees and the trial court as an expert on the subject. Buyer personally took no part in these discussions or negotiations and relied entirely on Cousins’ advice and recommendations. Such negotiations took place in September, 1960. Cousins was appellees’ principal witness concerning such negotiations.

The fraudulent misrepresentations found by the court to have been made by Dyer to Cousins in the negotiations leading to the making of the purchase contract, all of which were found to be material and made with intent to induce appellees to enter into the contract, and relied upon by Cousins and appellees to their detriment, are as follows:

(1) That the yearly commissions arising from his insurance business were from $20,-000.00 to $22,000.00 a year.

(2) That his company had a great deal of good will and good customer relations, though he knew that his business was declining because the policies were not renewing.

(3) That his relations were good with Holiday Inn, his largest single customer, with knowledge on Dyer’s part that when the business was written for Holiday Inn it could have been at better rates, and that Holiday Inn was dissatisfied with the account, which fact was not disclosed to Cousins nor to appellees.

(4) That Dyer falsely represented to Cousins that only 5% of his premium business was handled on notes of clients through banks, with recourse against the business for payment of such premium notes.

The trial court further found as a basis for recovery of damages for fraud perpetrated on appellees by Dyer in the negotiations leading to the contract, intentional failure to disclose material facts as follows:

(1)Failure by Dyer to disclose that he had in his employ two solicitors, the court finding that “this information is material in determining the amount a purchaser would pay for an agency, since the greater the solicitations by the solicitors, the more effect it would" have on the value of the agency.”

(2) That Exhibit No. 1, relied on by Cousins in advising the purchase of the agency and in signing the note, purported to be a statement of total volume and total income for three years to September 1,1960, but that Dyer, in preparing same, had not included the volume and income for 1960, during which time the volume and income were rapidly declining.

(3) That Dyer failed and refused to tell Cousins that the earning of the insurance agency in 1959 had declined from 1958, and that the earnings in the first 9 months of 1960 were far below those of 1958 or 1959. That such information was material, because it would indicate that the agency was having trouble, or that Dyer had quit working, or that something was wrong with customer relations and good will. That Cousins would not have signed the note or recommended the purchase had these facts been disclosed.

Dyer filed objections and exceptions to the findings and conclusions of the trial court, and in due time the court filed additional findings that Dyer had earned commissions, in 1957, $29,664.00; in 1958, $32,-276.86; and in 1959, $20,039.00.

Appellant’s first 32 points of error are directed at the above original findings and conclusion of the trial court, and are to the effect that there was no evidence as well as insufficient evidence to support them, and that the findings of the trial court are contrary to the undisputed evidence and are clearly wrong. In addition, as to the fraud findings based on failure to disclose material facts, appellant contends that in the transactions leading to the making of the contract, Dyer and buyer’s representative, Cousins, were acting at arm’s-length, and that Dyer was not required to disclose such matters to Cousins, who could have learned them by use of reasonable diligence. Appellant further contends that the court’s conclusion of law does not apply the proper measure of damages.

We agree with appellant that the award of damages based on the findings of fraud was improper, for reasons stated below:

At the beginning of these negotiations, Cousins asked Dyer to furnish him with a written statement of the three-year annual volume of business and three-year annual commission income of the agency. It was Cousins’ reasoned opinion that a fair, reasonable purchase price for a going casualty insurance agency was a sum equal to approximately one or one and a quarter year’s commission receipts. As a result of such request, Dyer gave Cousins an instrument introduced in evidence as Plaintiffs’ Exhibit No. 1, being as follows:

Although the trial court found that Exhibit No. 1 purported to be a statement of total volume and total income for the three years up to September 1, 1960, so as to include the period from January 1, 1960, to August 31, 1960, Cousins did not so construe the instrument, and the evidence does not support such finding. Cousins testified, both on direct and on cross-examination, that he considered the three-year volume of premium income and commission income shown in the lower right-hand corner of the instrument as being for the years 1957, 1958 and 1959, and that he had not asked for a statement of business for 1960. In this respect, we copy a portion of Cousins’ testimony on direct examination as follows (page 219, Vol. II — S/F) :

“Q. All right, what did that Exhibit 1 indicate to you, Mr. Cousins ?
A. Well, as it is set up here he shows me in the lower right-hand corner that the three-year annual volume amounts to $429,152.56; the three-year commission amounts to $81,930.24; total premiums, for a year I assume, amount to $123,354.28.
Q. All right, was this Exhibit 1 drawn up at your request?
A. Yes.
Q. Did you ever get anything from Mr. Dyer other than Plaintiff’s Exhibit 1 ?
A. No.
Q. Did you ever make a detailed or any investigation of his accounts receivable book, his general ledger book or his personal record book?
A. No.
Q. Did you ever thumb through them?
A. Not at this time. That was many months prior.
Q. What were the ones he showed you?
A. Yes, he made a flat statement they were available to look at, and I gave them a glancing examination.”

(Page 221, Vol. II — S/F)

“Q. That Plaintiff’s Exhibit 1, which you have heard was made at your request and given to you by Mr. Dyer, purportedly covers the business for what period?
A. A possible three-year period.
Q. That is to what date?
A. It is a little more than that because it shows actual daily inventory as of September 21, 1960. I would assume that it was the three-year period prior to the year 1960.
Q. Did you so consider it at the time ?
A. Yes.”

(Page 493, Vol. Ill — S/F) On cross-examination :—

“Q. I believe your testimony has been you didn’t ask for anything Mr. Dyer didn’t give you in the way of records or information?
A. That’s right.”
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(Page 493 and 494, Vol. Ill — S/F)

“Q. Plaintiff’s Exhibit 1, you are familiar with it?
A. Yes, sir.
Q. That is what he prepared for you?
A. Yes, sir.
Q. What did you ask him?
A. I asked him for three years previous, three years premiums and commission income.
Q. All right, you didn’t ask for a breakdown as to it in policies?
A. No.
Q. Fire and—
A. I asked for a three-year average premium and commission income, and he took it upon himself to break a little further down than was necessary. I was primarily interested in the past three year average premium volume and what the commission income was.
Q. So the information that you were relying on, such information is that contained where, down here in the corner where it says, ‘All lines,’ average three-year volume, is that what you were—
A. That was primarily what I was interested in, yes, sir.
Q. And this other was voluntary?
A. Well, it was good information, yes, sir, but my main interest was in what he had done the previous three years in annual volume specifically, as well as annual commission.”

(Page 504, Vol. Ill — S/F, lines 7 through 17)

“Q. Now, these figures that you say show and indicate that the business was a buy at $17,000.00 is the volume of three years, volume shows three-year average commission of $81,930.24?
A. Yes, sir.
Q. I believe we have ascertained before the trial that that figure of $429,152.56 actually reflects a three-year volume for ’57, ’58 and ’59, but leaves out ’60, haven’t you ascertained that?
A. I think that that is correct, yes, that is the assumption that I went on.”

As stated above, the trial court, in response to objections filed to his original findings of fact by Dyer, filed additional findings, wherein he specifically found that the amount of commissions earned by Dyer in 1957 was $29,664.00; in 1958, $32,-276.86; and in 1959, $20,039.00, or a total for the three years of $81,979.56. These were the same years, according to Cousins’ testimony, included in the three-year statement of commissions earned as stated in Exhibit One, and actually exceeded the amount therein represented by $49.32.

A careful reading of the lengthy statement of facts does not reflect any testimony that Dyer at any time represented to Cousins or to anyone else, that the commissions earned by his agency during the months of 1960 to September 1st were at a rate of $20,000.00 to $22,000.00 per year. It is true that the evidence shows that from 1958 to 1959 the business had fallen off, and that during 1960 to the date of the contract it had decreased even more. However, there is no evidence that Dyer made any false misrepresentations as to the 1960 business. Cousins testified definitely that he did not ask Dyer for the 1960 figures. Considering the trial court’s additional find-ings and in view of Cousins’ evidence on the matter, we feel that there is no basis in the evidence for the finding that Dyer falsely represented the yearly commissions arising from his insurance business to be from $20,000.00 to $22,000.00.

The trial court further based his conclusion that damages should be assessed against Dyer for fraud on his finding of false representation by Dyer to Cousins as to the good will and good customer relations of the agency with its customers, and particularly as to its largest client, Holiday Inn.

As to the Holiday Inn account, the evidence of both Dyer and Cousins shows that in order for Dyer originally to secure this business it was necessary that he purchase $5,000.00 stock in the corporation owning the inn. Before Dyer would sell the agency to appellees, he required that Cousins purchase this stock from him. In the negotiations between Dyer and Cousins, as shown by undisputed evidence, the possibility of this account being lost was taken into consideration to the extent that the prAe Cousins should pay Dyer for such stock was to be reduced by $1,000.00 in the event the business of Holiday Inn with the agency should be cancelled.

Other than much inadmissible hearsay testimony, together with evidence of some cancellation of policies after appellees took over the business, we find the evidence insufficient to justify a finding that Dyer made any statement as a positive fact, rather than as a personal opinion, as to his good will and customer relations. Nor do we find sufficient evidence to support a finding that any opinion or views expressed by him to Cousins were false, and knowingly false, to the extent that fraud was thereby committed.

We recognize the well-established rule of law that an affirmative false statement knowingly made as to a material fact believed and relied on by the other party to the extent of causing him to enter a contract to his detriment may justify recovery of proper damages in fraud, and the fact that the truth could have been discovered by the exercise of reasonable care and diligence would not be a defense. Isenhower v. Bell, Tex.Sup.Ct, 365 S.W.2d 354; Schonrock v. Taylor, Tex.Civ.App., 212 S.W.2d 260, writ ref. We further realize that it is not unusual for a seller to “puff” what he is selling, that general commendations, commonly known as dealers’ talk, exaggerated statements of value, and expressions of opinion about the business, do not amount to actionable misrepresentations where the parties deal at arm’s-length and have equal means of information and are equally well qualified to judge the true facts. 25 Tex.Jur.2d, Fraud and Deceit, Sec. 47, pp. 689, et seq.; same volume, pp. 712, et seq.; Hawkins v. Campbell, Tex.Civ.App., 226 S.W.2d 891, writ ref., n. r. e.; Frankfurt v. Wilson, Tex.Civ.App., 353 S.W.2d 490, n. w. h.; Texas Osage Co-op. Royalty Pool v. Brown, Tex.Civ.App., 118 S.W.2d 944, writ ref.; Moore & Moore Drilling Company v. White, Tex.Civ.App., 345 S.W.2d 550, writ ref., n. r. e.

We feel that any representations Dyer is shown to have made to Cousins concerning the good will and good customer relations of his agency comes under the head of dealers talk, puffing, and expressions of opinion, and not actionable fraud.

We find no testimony in the statement of facts that at any time before the execution of the contract, Dyer made any statement to Cousins that 5%, or any other per cent, of his premium business was handled on notes of clients through banks. Cousins did not testify to this effect, and neither did Dyer or any other witness. As stated above, and as found by the trial court, all of the negotiations leading to the execution of the contract were between Dyer and Cousins, and none were had between Dyer and either Powers or Gallagher. We therefore hold that this finding of fact by the trial court that Dyer made such false and fraudulent statement to Cousins concerning the percentage of premium business handled by bank loans is not based on any evidence, and cannot support any award for damages due to fraud.

The remainder of the fact findings by the trial court on which his conclusion of fraud perpetrated by Dyer is based concern failure by Dyer to disclose certain facts to Cousins, and not actual misrepresentations of material facts. There can be no doubt but that these parties, in their negotiations leading to the sale and purchase of this insurance agency, were under no confidential relations to each other, but were dealing at arm’s length.

“In an arm’s-length transaction the defrauded party must exercise ordinary care for the protection of his own interests and is charged with knowledge of all facts which would have been discovered by a reasonable prudent person similarly situated. And a failure to exercise reasonable diligence is not excused by mere confidence in the honesty and integrity of the other party.” Courseview Incorporated v. Phillips Petroleum Co., Tex.Sup.Ct., 312 S.W.2d 197, quoted with approval in Thigpen v. Locke, Tex.Sup.Ct., 363 S.W.2d 247, p. 251, in which case an instructed verdict against the party claiming fraud was upheld.

Cousins’ own testimony reveals that, although Dyer offered him for study all of his books of account, records and files, he declined the offer, and made no investigation of such records. His testimony shows that he made no inquiry as to who was working for Dyer, or whether Dyer had any solicitors in his employ. It also discloses that he made no request for any information of Dyers’ business or commission receipts in 1960. Dyer was not requested to break down by years the business done by him on the previous years,, so as to show whether or not the business was on the decline. Cousins himself testified that he received every bit of information he asked for. Dyer did not refuse to tell Cousins anything. He was under no legal obligation to volunteer such information. Moore & Moore Drilling Company v. White, Tex.Civ.App., 345 S.W.2d 550, writ ref., n.r.e.; Howard v. County of Nolan, Tex. Civ.App., 319 S.W.2d 947.

We have already shown by Cousins’ testimony heretofore quoted that Exhibit One did not purport to be a statement of total volume and total income to and including September 1, 1960.

The trial court erred in basing any conclusion of fraud committed by Dyer on any findings concerning failure by Dyer to disclose certain material facts.

Since we have held that there is not sufficient evidence in the record to support the court’s findings of fraud, it is not necessary that we discuss the remainder of appellant’s points with reference to the feature of the appeal involving fraud. The court’s award of $5,000.00 damages as a result of findings of fraud is set aside.

Cousins, who was a defendant in the suit on the note in issue, but was not a plaintiff in the damage suit, did set up fraud as a defense. The trial court found that he signed the note, but held that his defense of fraud was good, and found him not liable. In view of our conclusions as above set forth, we hold that the trial court erred in failing to render judgment against Cousins, jointly and severally with the other defendants, on the note.

BREACH OF CONTRACT

Paragraph 4 of the contract in litigation reads as follows:

4.
“The parties hereto agree that Fifteen Thousand Dollars ($15,000.00) of the total purchase price payable hereunder shall be allocated to the agreement of Seller, and he does hereby so agree, to not reestablish, reopen, or in any manner become interested, directly or indirectly, as a local or recording agent in the casualty insurance agency field within the County of Nueces, State of Texas, for a period of five (5) years from- October 1, 1960. For a period of ninety (90) days from October 1, 1960, Seller covenants and agrees to make his services available to Buyer at reasonable times, and from time to time as Buyer deems necessary, for consultation with respect to matters pertaining to the prior operation of Dyer Insurance Agency. Buyer shall have the right, at Buyer’s option, to use and continue to use the firm style of ‘Dyer Insurance Agency’ except that Buyers covenant and agree that, under no circumstances, will it be represented to any insurance company, insured, prospective insured, or any third party whatsoever that Curtis Dyer, Seller herein, had any financial interest in said agency business, and Buyers agree to hold said Curtis B. Dyer harmless and free from liability for any and all obligations and liabilities incurred by said agency subsequent to October 1, 1960, it being intended hereby that the good will attributable to Dyer Insurance Agency shall wholly inure to the Buyer’s benefit and use, for a term of five (5) years, and during such term of five years no benefit of the good will of Dyer Insurance Agency shall inure back to Seller, Curtis B. Dyer. Should Seller deem it necessary to reenter any business trade or occupation involving the casualty insurance business in Nueces County, Texas, within five (5) years from October 1, I960, he may do so provided, however, that prior to such reentry, and as a right to do so, Seller will give written notice of such decision to Buyer and, in addition, will pay to Buyer the sum of Twelve Thousand Dollars ($12,000.00) cash.”

The trial court expressly found that Dyer did re-enter the casualty insurance without giving any written notice to Buyer, and without paying Buyer $12,000.00 or any part thereof, and in his conclusions of law held that by doing so in Nueces County, Texas, within five years from October 1, 1960, Dyer breached the contract, and that by virtue of such breach appellees (except Cousins) had been injured in the sum of $12,000.00 and were entitled to recover said amount from Dyer.

Appellant, by his points of error 33-40 inclusive attacks this award of damages on the grounds that the fact findings on which it is based are not supported by any evidence, are contrary to the undisputed evidence, are clearly wrong, being made on insufficient evidence, that the provision for payment of $12,000.00 is a penalty provision and unenforceable, and that there was no finding that the covenant not to compete was reasonable. By his point No. 41, appellant asserts that the court erred in not sustaining his motion to strike the testimony of appellees* witness Shelton concerning a telephone conversation with a person who identified himself as Dyer, Shelton having depended entirely on the caller’s word for his identification.

From January 1, 1961, through August, 1961, Dyer was agency manager for South Coast Insurance Company in Corpus Christi. Although he testified that he dealt only with life insurance, there is evidence that the salesmen under his direction sold package insurance policies which included casualty coverage. Dyer admitted that by keeping the general ledger book and the company account current book, he was provided with an expiration list of his old agency — a list of the policies and the dates they were expiring, and the trial court expressly found that Dyer used such expira-tions to obtain new business for his life insurance business and to benefit himself, and that he offered expirations belonging to plaintiffs to other casualty agents. Though this was disputed by appellant, we find evidence in the record in support of such finding. Dyer, after the sale, had a part in placing an advertisement in a Corpus Christi newspaper, using his picture, and stating that South Coast Life Insurance Company, of which he had been named agency manager, would handle a new package plan combining general and life insurance. The trial court, on sufficient evidence, expressly found that this included casualty insurance. After surrendering his recording agents license to the State Board of Insurance on insistence of attorney for Buyer in February, 1961, he applied for a renewal thereof in April, 1961, falsely stating that Dyer Insurance Agency was still in existence. Although Dyer testified that he turned over to Buyer over $17,000.00 of commission policy business, the trial court found, on sufficient evidence, that the purchasers received during their first year óf business only $4,441.00 commission income, although according to the testimony and the court’s finding, the new owners should have lost only about 15% of the purchased business. The trial court attributed this largely to appellant’s holding himself out to be in the casualty business, offering to others in the casualty business expiration theretofore belonging to the Dyer Agency but sold to Buyer, and speaking disparagingly of the new firm, thus violating his covenant concerning the transfer of the good will of the agency to Buyer.

We should uphold the trial Court’s findings unless they are manifestly erroneous, and not supported by any evidence of probative force, or are so against the weight and preponderance of the evidence as to be manifestly wrong. Bavousett v. Bradshaw, Tex.Civ.App., 332 S.W.2d 155, writ ref., n.r.e. It is our opinion from a careful reading of the statement of facts that there is evidence to support the finding of the court that Dyer did re-enter the casualty insurance field in Nueces County, Texas, within five years from October 1, 1960, without paying to Buyer the sum of $12,-000.00, and that such finding was not contrary to the weight of the evidence.

In reaching this view, we have not considered the testimony of the witness William J. Shelton concerning the telephone conversation with someone who identified himself as Curtis B. Dyer. Shelton was not able to identify Dyer as the caller, was not familiar with the voice, and only assumed the caller to be Dyer because the caller stated so. Appellant’s motion to strike the testimony should have been sustained. Texas Candy & Nut Co. v. Horton, Tex.Civ.App., 235 S.W.2d 518, writ ref., n.r.e. However, this being a trial before the court without a jury, and there being other evidence to sustain the court’s findings, we do not believe the court’s ruling to be reversible error. Waxier v. Klingemann, Tex.Civ.App., 272 S.W.2d 746, writ ref.

The trial court determined that as a result of this breach by Dyer of the contract, plaintiffs had been injured in the sum of $12,000.00 and were entitled to recover said amount from Dyer. Regardless of whether this be considered a finding of liquidated damages under the contract, or as damages shown to have been actually sustained, we feel that it is fully justified by the evidence, and should be sustained. Rucker v. Campbell, 35 Tex.Civ.App. 178, 79 S.W. 627, writ ref.; Orenbaum Bros. v. Sowell Bros., Tex.Civ.App., 153 S.W. 905, writ ref.; Miller v. Chicago Portrait Co., Tex.Civ.App., 195 S.W. 619, writ ref.

In addition to the above, the court expressly found that Dyer breached (1) the provision of the contract wherein it was represented that the good will attributable to Dyer Insurance Agency should wholly inure to the Buyers’ benefit, and failed to convey and assign same to plaintiff, and (2) the provision requiring him to make his services available to buyers at reasonable times, and from time to time, as Buyers deemed necessary, for consultation with reference to matters pertaining to the prior operation of the agency, and (3) the third paragraph of the contract by failing to deliver to Buyer the records, books and manuals of his business, together with such other written memoranda as may be pertinent to the agency and its business. The court concluded that the plaintiffs in the suit for damages had been damaged by the above breaches in the sum of $10,000.00 and allowed recovery against Dyer in that additional amount. The portion of the third paragraph of the contract referred to reads:

“On October 1, 1960, Seller agrees to deliver to Buyer the records, books, manuals of his business, together with such other written memoranda as may be pertinent to the agency and its business, and including stationery and printed matter bearing the style of ‘Dyer Insurance Agency’ ; but excluded shall be all office equipment, furniture, and furnishings of ‘Dyer Insurance Agency’.”

Appellant’s points nos. 42-55 inclusive are directed at such findings and conclusion, and at the award of $10,000.00 damages, on the grounds of no evidence, insufficient evidence, contrary to the undisputed evidence, and that the award allows double recovery.

The provisions of the contract found to have been breached in (1) and (2) above are contained in the same paragraph 4 as in the agreement not to enter into a competitive business in Nueces County for five years and in our opinion all are a part of the same specific covenant.

“It is thoroughly established by all the authorities that a person may purchase the business of another, for the purpose of removing competition, with an agreement on the part of the seller, not to carry on a similar business in a given territory for a limited period of time. Covenants of this nature are designed to enable the buyer to obtain the full value of the good will which he has paid for as a part of the consideration of his purchase. * * *
“The purpose of such covenant was to render effective the good will which appellant, under the contract, was buying and paying for. When such a covenant has heen made, any conduct on the part of the seller of the good will, reasonably calculated to impair its advantages, clearly constitutes a breach of the promise that the seller will not disturb the purchaser in the full enjoyment of his purchase.” Foxworth-Galbraith Lumber Co. v. Turner, 121 Tex. 177, 46 S.W.2d 663, p. 664.

We seriously doubt that the evidence is sufficient to sustain finding (2) above. But regardless of that, we feel that any additional award of damages for breaching the provision of the contract concerning good will of the agency, and the provision as to being of assistance to the Buyer for 90 days, would to some extent, not determinable by us, duplicate the award upheld by us for re-entering -the casualty insurance business, and thus would allow a double recovery. In fact, the trial court’s finding of fact, on the basis of which in part he made this award of $10,000.00 damages, reads:

“Because Defendant (for his own benefit) held himself out to be in the casualty insurance business, offered to others in the casualty insurance business expiration theretofore belonging to Dyer Insurance Agency and which should have become the property of Plaintiff under the aforementioned agreement, and has stated that Plaintiff would not be successful in the general insurance business, Defendant has not fulfilled his covenant that the good will of Dyer Insurance Agency should enure wholly to Plaintiff’s benefit and has failed to assign and convey the good will of the agency to Plaintiff.”

These are some of the same actions of Dyer that the trial court and we have used to justify the $12,000.00 award of damages above.

The finding that Dyer breached the portion of the third paragraph of the contract quoted above, and the inclusion of such breach in the award of $10,000.00 damages, is not warranted by the evidence. The testimony of appellee Powers was that he went to Dyer’s office on October 1, 1960, to get the books and record and manuals mentioned in the contract, and got some records from Dyer. Some of the records, manuals, etc., were not pointe'd out by Dyer, and Powers did not get them. He never went back for any more, and according to his testimony, never asked for any records he did not get.

But even -if the finding that Dyer breached this portion of the contract were based on sufficient evidence, it is not possible to determine what portion of the court’s award was made for such breach.

We hold that this award made by the Court of $10,000.00 damages was improper for the reasons stated.

Paragraph 3 of the court’s conclusions of law, which follows the paragraphs determining damages as already discussed herein, reads:-

“By reason of the breaches (heretofore set forth) on the part of Defendant of the purchase agreement of September 23, 1960, I find that Plaintiffs have suffered lost profits in the amount of $5,000.00, which they are entitled to recover from Defendant.”

Dyer’s breaches of the contract “heretofore set forth” were (1) by re-entering the casualty insurance business in Nueces County within five years from October 1, 1960; (2) by failure to comply with the requirement of the contract concerning the good will of the insurance agency; (3) breach of the contract provision copied above concerning making his services available to Buyer; and (4) breach of the provision copied above with reference to delivery of certain records, books and manuals.

As to (1) above, we have upheld the trial court’s award of $12,000.00 damages for such breach. The court, in assessing this amount, did not exclude the item of lost profits, but expressly stated that “by reason of said breach on the part of Defendant, Plaintiff has been injured in the sum of $12,000.00, and is entitled to recover said stun from Defendant.”

We have held that breaches (2) and (3) were actually a part of breach (1), and that damages awarded separately from the damages awarded for breach (1) constituted double recovery. Lost profits are often included within the term damages as illustrated by the frequent use of one word for the other in Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340. Recovery having already been had for damages which did not exclude lost profits for such breaches, should not be again repeated under the name of lost profits for the same breaches.

Furthermore, the evidence relied upon by the trial court and appellees with reference to lost profits was too uncertain and speculative, and the profits which might have been made from this practically new business of Buyer were not shown by any proof to that degree of certainty which the law requires. Southwest Battery Corporation v. Owen, 131 Tex. 423, 115 S.W.2d 1097; Wade v. Southwestern Bell Telephone Company, Tex.Civ.App., 352 S.W.2d 460, n. w. h.

As to breach (4), to conserve time we repeat what was stated above about the court’s finding on this matter.

The trial court having found damages in favor of appellees Caldcleugh, Powers and Gallagher against Dyer, in the total sum of $32,000.00, being $5,000.00 fraud and the separate sums of $12,000.00, $10,000.00 and $5,000.00, for breach of contract, and that Caldcleugh, Powers and Gallagher owed Dyer $9,000.00 principal, plus interest and attorney fees on the note, or a total of $11,713.51, it deducted this latter sum from the total damages, and rendered judgment for the above mentioned appellees against Dyer for $20,286.49. A take-nothing judgment was entered as to appellee Cousins on the note.

Although appellees Caldcleugh, Powers and Gallagher have filed no cross-appeal from the judgment against them on the promissory note, if the judgment is to be reversed and remanded as to all other features of the case, we feel that the cause of justice requires that we reverse and remand the entire cause.

We have found this judgment to be excessive in the sum of $20,000.00. Appellees’ counsel during oral argument suggested that in the event we did hold the recovery granted to be excessive, we grant him an opportunity to accept a remittitur, as provided in Rule 440, Texas Rules of Civil Procedure. In the event appellees file a re-mittitur of such excess within ten days of the announcement of this opinion with their statement that they accept and assume the liability of Cousins on the note so that the amount of the judgment on the note may be deducted from the award of $12,000.00 to plaintiff-appellees, this Court will reform and affirm the judgment in accordance therewith. Otherwise, the judgment is reversed, and the cause remanded in its entirety.

OPINION AFTER FILING OF REMITTITUR

Plaintiff-appellees R. E. Caldcleugh, Jr., Jack Powers and Maxine Gallagher, through their attorneys of record, have filed a remittitur to the extent and in the amount of $20,000.00, and have accepted and assumed the liability of appellee Cousins upon the note in litigation, all as authorized in our original opinion. In view thereof, and of the rulings as heretofore announced by this Court, the amount of the judgment granted by the trial court in favor of said plaintiff-appellees against appellant Dyer is reduced by the sum of $20,000.00, so that said judgment shall provide for recovery by said plaintiff-appellees against appellant-defendant Dyer in the sum of $286.49, with interest at the rate of 6 per cent per annum from the date said decree was entered in the trial court. The costs as assessed in the judgment to and including the trial shall remain as charged in the decree. All costs of appeal shall be assessed against the parties equally, one-half to appellant, and one-half to appellees.

As so reformed, the judgment is affirmed.

Motion for rehearing may be filed by either party within fifteen days after the date this order is announced.


source: Caselaw Access Project

author: PARKER, Justice.

license: Public Domain

text:
    MORAN UTILITIES COMPANY, Appellant, v. J. W. CHILDS, Appellee.
    No. 6774.
    Court of Civil Appeals of Texas. Beaumont.
    June 10, 1965.
    Rehearing Denied June 30, 1965.
    Darden, Fowler, Creighton, Conroe, for appellant.
    J. Robert Liles, George W. Morris, Con-roe, Will Gray, Houston, for appellee.
   PARKER, Justice.

The opinion and judgment rendered in this eause on the 20th of May, 1965, are withdrawn and this opinion will be substituted for the original. Judgment is rendered as hereinafter set forth.

This is a malicious prosecution case tried before a jury. Appellee J. W. Childs recovered judgment against Moran Utilities Company for $5500.00 upon allegations that the appellant had maliciously prosecuted him for the offense of stealing natural gas. Hereinafter J. W. Childs will be called appellee and Moran Utilities Company will be called appellant.

At the time the complaint was filed with the Justice of the Peace, George Zincke was acting in the scope of his employment by appellant. Appellee was found not guilty when tried in the Justice Court. In answer to special issues the jury found from a preponderance of the evidence that George Zincke as agent of the appellant acted without probable cause and with malice in filing the complaint in question. Appellant’s first eight points of error attack the findings of the jury that Moran Utilities Company acted without probable cause in the filing of the complaint in question and acted with malice in filing the complaint in question. The “no evidence” points pertinent thereto will be considered.

The burden of proof was upon appellee to show by a preponderance of the evidence that there was no probable cause on the part of appellant Moran Utilities Company to believe that appellee was guilty of stealing gas. The undisputed evidence bearing on probable cause is as follows: Moran Utilities Company is engaged in the business of furnishing natural gas to consumers in Conroe and Montgomery County. For several years it had unauthorized connections to its gas lines with its gas being used without payment. This created a potential hazard to the safety of people as well as to property. George Zincke was the manager of Moran Utilities Company. Jimmy Stewart was an employee of the utility company. On the afternoon of November 23,1962, Stewart and a deputy sheriff, Bailey, were searching for another man they were informed was employed at appellee’s garage. Mr. Childs owned and operated this garage. It was a small, brick newly constructed building located on Highway 105. It is undisputed that prior to that day Stewart had never known Childs. Prior to that day Mr. Zincke did not know Childs. Stewart’s duties required him to make inspections of unauthorized use of gas. Since this garage was a new establishment, Stewart went around to the back to see whether or not this place of business had a gas meter and a gas connection. Meanwhile, the deputy sheriff sought information about the other man. In going to the rear of the building, Stewart saw a 1/2 inch pipe going out of the side of the building and into the ground. He did not see a gas meter. He went around to the inside of the garage to see what the pipe was connected to. There he found the pipe coming out of the wall connected to a rubber hose connected to a pipe fitting with a stop cock ending up inside a stove made out of a metal barrel. The stop cock was outside this stove where it could be turned off and on without reaching inside the barrel. He recognized this as a homemade heater. He turned the stop cock to the “on” position and heard the sound of hissing gas pouring out of the line. Stewart was familiar with the smell of the odorizer his company used with natural gas. Also, he was familiar with the smell of butane. From the distinguishing odor of the escaping gas he concluded it was natural gas with the odorizer used by appellant. Then Stewart went to his car, got a sharpshooter shovel and returned to the rear of the building where the pipe came out of the wall. From such place he partially traced the line, to determine its origin of gas supply, by sticking the sharpshooter at intervals and deep enough to make contact with the metal of a buried line. He located a riser at the Moran line. He saw a slight depression of the ground he considered to be a ditch which had been recently dug and filled in leading from such riser to the building containing the heater and along the place where he had partially tapped out a line. Childs walked up to him and in response to a statement made by Stewart that he was using natural gas from Moran’s line without authority, Childs testified that he did not reply. Childs admitted that he did not state to Stewart that he was using butane gas in the stove from a tank owned by him. Childs admitted he did not try to show Stewart he was using butane gas but he, Childs, simply remained silent. The con-nectioh to the Moran line Stewart so found was SO or 60 feet from the rear of the building where the 1/2 inch line came out of the ground and through the side of the building to the heater. Stewart saw no butane tank of any kind around the premises. Stewart then called Mr. George Zincke, the manager of Moran Utilities Company, who came down to the garage, arriving around 2:00 in the afternoon. Upon arriving at the garage, Stewart pointed out to Zincke the homemade stove, the location of the line which he had traced out by tapping, the old service riser at the Moran line, the depression of the ground above mentioned, and the marks of the sharpshooter where he had stuck it into the ground to touch the line. After observing these, Zincke went inside the garage, turned the stop cock on and heard the sound indicating pressure and smelled the gas, which he identified as being natural gas with the odorizer furnished by his company. Zincke then called a service man employed by appellant who came to the scene, dug up the connection to the Moran line, cut it loose and capped it. After the connection had been capped, to make certain that this was the source of the gas coming into the heater inside the garage, Zincke then went hack inside the garage building, tried the gas jet on the stove and in turning it on found that it did not contain gas and that the disconnecting of the line at the riser from Moran’s line cut off the supply of the gas to the heater. Zincke observed that there was no other connection to the stove other than the line coming through the wall.

The question of probable cause does not depend on the guilt or innocence of the appellee but on whether Zincke as the agent of appellant had reasonable grounds from the facts known to him at the time he filed the complaint against appellee to believe and did believe that the accused was guilty of stealing natural gas. Taking the evidence in the most favorable light to support the judgment of the trial court, we find no evidence establishing want of probable cause on the part of appellant in filing the complaint.

Zincke, on the same day, promptly filed a complaint against appellee after making the investigation as above set forth. On that same day after the complaint was filed, appellee made a $12.00 deposit with appellant in applying for a meter and connection for gas at his garage. We conclude that such evidence shows that the facts as they appeared to Mr. Zincke at the time he filed such complaint were such as to constitute reasonable grounds from the facts then known to him to believe, not only as a reasonably prudent person but as a cautious person, that the accused appellee was guilty of stealing gas. There is no probative evidence that appellant acted without probable cause in the filing of the complaint against appellee. Under the undisputed evidence appellant acted with probable cause in so doing. Montgomery Ward & Co. v. Kirkland, 225 S.W.2d 906 (Tex.Civ.App.1949, wr. ref. n. r. e.) and decisions cited therein.

On the question of malice, we find no evidence of actual malice. Agents of appellant involved had never known appellee before this occasion. There is no evidence of a motive for malice. It has been said that malice need not be proven by direct evidence, but like any other fact may be inferred from the circumstances or may be inferred by the jury from want of probable cause. Since there was probable cause on the part of appellant to believe that appellee was guilty of stealing gas, no inference of malice obtains. To infer' malice on the part of appellant when no agent of appellant knew appellee before the day the complaint was filed is entirely without logic. There is no evidence of probative force to support the finding of the jury that appellant acted with malice in filing the complaint against appellee. The fact that appellee was acquitted on the criminal trial does not tend to prove malice or want of probable cause. Bekkeland v. Lyons, 96 Tex. 255, 72 S.W. 56, 64 L.R.A. 474 (S.Ct. 1903, Op. by Gaines, C.J.). The undisputed evidence establishes that appellant acted without malice in filing the criminal complaint against appellee.

Appellant’s points 1, 4, S and 8 germane to want of probable cause and lack of malice are sustained and the judgment of the trial court is accordingly reversed.

It appearing that this case has been fully developed, ineluding evidence bearing upon want of probable cause and malice on the part of appellant in filing the complaint against appellee, this court renders the judgment that should have been rendered in the court below that appellee take nothing as against appellant and pay the costs of this court and the court below. Yarbrough v. Booher, 141 Tex. 420, 174 S.W.2d 47, 49, 150 A.L.R. 1369.

Reversed and rendered.


author: DUNAGAN, Chief Justice.

text:
    Tommie C. WILLIAMS et al., Appellants, v. Rozell WILLIAMS et al., Appellees.
    No. 281.
    Court of Civil Appeals of Texas. Tyler.
    May 20, 1965.

      Charles E. Coleman, Tyler, for appellants.
    William Sheehy, Garrison, Renfrow, Zeleskey, Cornelius & Rogers, Lufkin, for appellees.
   DUNAGAN, Chief Justice.

Tommie C. Williams and Willie C. Williams filed in this court April 19, 1965, a motion seeking an extension of time within which to file transcript and statement of facts in this court.

Appellants’ motion is contested by the appellees, who contend that good cause is not shown for delay by appellants for the filing of the statement of facts and transcript.

Appellants’ motion is sworn to by their attorney and supported only by the affidavit of the Clerk of the District Court from which he seeks to bring this appeal.

The judgment sought to he appealed was rendered and signed by the trial judge on the 4th day of February, 1965. Appellants filed their appeal bond on March 4, 1965. On the 31st day of March, 1965, appellants requested in writing that the Court Reporter and District Clerk, respectively, prepare a statement of facts and transcript of proceedings had in this cause. The only grounds in appellants’ motion for an extension of time within which to file the record in this court were: “That said requests were made immediately after appellants became financially able to pay for such statement of facts and transcript, and at a time when appellants felt that said Court Reporter and District Clerk would have had ample time to prepare same.” The statement of facts was prepared in time to have been filed in this court within the required time. There is on file in this court two affidavits by the Clerk of the trial court. His first affidavit was dated April 19, 1965, in which he says that the appellants “requested on the 31st day of March, 1965, that a transcript of proceedings had in the 7th Judicial District Court of Smith County, Texas, be made and filed in the Court of Civil Appeals for the 12th Supreme Judicial District of Texas, but such transcript could not be completed and filed within the time required by law.” By his second affidavit dated April 29, 1965, by way of explanation why the transcript could not be completed and filed within the time required by law he says that “Due to the short amount of time remaining before the transcript was required to be filed by law, he was unable to prepare this transcript. However, had this transcript been requested at the time the defendants filed their appeal bond on March 4, 1965, or any time earlier, I would have been able to prepare the transcript before April 5, 1965.”

The record has not been tendered to our Clerk for filing.

Rule 386, Texas Rules of Civil Procedure, Vernon’s Ann.St. requires the appellant to “file the transcript and statement of facts with the clerk of the Court of Civil Appeals within sixty days from the rendition of the final judgment or order overruling a motion for new trial * * The rule also provides that by motion filed within 15 days after the expiration of such 60-day period, showing good cause to have existed within such 60-day period, the Court of Civil Appeals may permit the same to be thereafter filed. Such motion was timely filed, and the question now before us is whether there is a showing of good cause for the late filing of the statement of facts and transcript. The 60-day period expired April 5.

The provisions of Rule 386, supra, are mandatory and jurisdictional and therefore must be complied with in order to invoke appellants’ jurisdiction. Ortiz v. Associated Employers Lloyds, 294 S.W.2d 880, (Tex.Civ.App.) 1956, n. w. h.; Hanna v. Home Ins. Co., 260 S.W.2d 891, 896, 1953, writ refused, n. r. e.; Eldridge v. Lake Whitney Enterprises, 231 S.W.2d 466, (Tex.Civ.App.) 1950, n. w. h.; Donnelly v. Donnelly, 241 S.W.2d 754, (Tex.Civ.App.) 1951, n. w. h.; Dellerman v. Trager, 327 S.W.2d 667, (Tex.Civ.App.) 1959, writ dismissed; Maples v. Service Mut. Ins. Co. of Texas, 169 S.W.2d 500, (Tex.Civ.App.) 1943, writ dism.

Rule 354, T.R.C.P. as amended -in 1962, contains a provision requiring the cost bond (appeal bond) or cash in lieu thereof, to cover the cost of the statement of facts and transcript. Since this rule, as now written, covers the cost of statement of facts and transcript, therefore upon the filing of the appeal bond, appellants were entitled to the statement of facts and transcript, regardless of their financial ability to pay for same. Thereafter, all that was necessary was a timely request for the preparation of same to the Court Reporter and Clerk of the trial court.

Rule 355, T.R.C.P. provides a method by which an appellant who is unable to pay the costs of appeal or give security therefor, may prosecute his appeal and obtain his record for appeal.

An appeal may be perfected either by filing appeal bond or by filing affidavit of inability of appellants to pay costs of appeal or give security therefor, but each is exclusive of the other. Brandon v. Tartt, 220 S.W.2d 672, (Tex.Civ.App.) 1949, no writ history; DeMiller v. Yzaguirre, 143 S.W.2d 425, (Tex.Civ.App.) 1940, writ refused; Rule 363, T.R.C.P. Under either method an appellant may prosecute his appeal and obtain his record. In the instant case, it is not shown that appellants at any time filed an affidavit of inability to pay the costs of prosecuting their appeal.

Appellants’ reason for not requesting the statement of facts and transcript earlier is not supported by any character of evidence other than the verified motion of their counsel. It appears to have been sworn to by their counsel on April 19, 1965.

It is clear that appellants permitted 55 days of their 60-day period to elapse before they ordered either the transcript or the statement of facts. There is no “good cause” shown for this delay. Rule 376, T. R.C.P. requires an appellant to promptly file with the Clerk his written direction for transcript. If he fails to do this, he must show “good cause” for his delay before he can secure an enlargement of time for the filing of the transcript in the Court of Civil Appeals. Rule 377, T.R.C.P. requires the same thing with reference to the statement of facts. Where an appellant delays in ordering the transcript and statement of facts without “good cause” for such delay, he cannot secure an enlargement of time for filing the same in the Court of Civil Appeals. Douglas v. Mercer, 124 S.W.2d 401, (Tex.Civ.App.) 1939, no writ history; United States v. Pacific Finance Corp., 270 S.W.2d 459, (Tex.Civ.App.) 1954, no writ history.

The question of “good cause” is an ultimate issue of fact for the determination of the Court of Civil Appeals. Harrison v. Benavides, 327 S.W.2d 610, (Tex.Civ.App.) 1959.

In construing Rule 386, the Supreme Court in the ease of Parks v. Purnell, 135 Tex. 182, 141 S.W.2d 585, held that a Court of Civil Appeals must not act arbitrarily in extending the time for filing the record in Such cases, but is authorized to extend the time only when good cause is shown.

According to the interpretation given to Rule 386, by the Supreme Court, appellant is charged with the duty of making some sort of showing as to why the record was not presented for filing to the Clerk of this court within the sixty days and is charged with the duty of furnishing satisfactory proof to this court that the delay was excusable. Otherwise, an order by this court authorizing the record to be filed would be an arbitrary action by the court. Appellant has not shown good cause in the instant case for extending the time for filing the transcript and statement of facts and our position is supported by the following authorities: Bowman v. Phillips Petroleum Co., 142 S.W.2d 540, (Tex.Civ.App,) no writ history; Hooe v. Texas Fire & Casualty Underwriters, 151 S.W.2d 310, (Tex.Civ.App.) no writ history; Rhodes v. Turner, 164 S.W.2d 743, (Tex.Civ.App.) no writ history; Douglas v. Wheeler, 306 S.W.2d 956, (Tex.Civ.App.) 1957, no writ history; Thomas v. International Harvester Company, 321 S.W.2d 650, (Tex.Civ.App.) 1959, no writ history.

Our Supreme Court has said in construing Rule 386, T.R.C.P.: “Obviously, that restriction left the Court of Civil Appeals with but little discretion in determining whether or not to permit the late filing of a transcript.” Matlock v. Matlock, 151 Tex. 308, 249 S.W.2d 587, 590; Rule 386 is equally applicable to a statement of facts. Couch v. City of Richardson, 313 S.W.2d 949, (Tex.Civ.App.) 1958, writ refused, n. r. e.; Certiorari denied 359 U.S. 990, 79 S.Ct. 1120, 3 L.Ed.2d 979.

No court takes pleasure in denying to a litigant the right to have his case reviewed on appeal. But where, as in this case, a lack of diligence on the part of appellants accounts for the failure to comply with Rule 386, we are given no choice. Matlock v. Matlock, supra; Couch v. City of Richardson, supra.


author: HUGHES, Justice.

text:
    ASSOCIATES DEVELOPMENT CORPORATION et al., Appellants, v. AIR CONTROL PRODUCTS, INC., Appellee.
    No. 11319.
    Court of Civil Appeals of Texas. Austin.
    June 30, 1965.
    Rehearing Denied July 21, 1965.

      Mitchell & Gilbert, Arthur Mitchell, Phillip W. Gilbert, Austin, for appellants.
    T. O. Dillard, Austin, for appellee.
   HUGHES, Justice.

This is a suit on a sworn account in the amount of $1,252.66, for goods and merchandise sold by appellee, Air Control Products, Inc., to Hallmark Builders, Inc. Sued also were Joseph F. Chesley and Associates Development Corporation whose liability for the account in suit was sought to be based on allegations that the two Corporate defendants were the mere alter ego of the defendant Joseph F. Chesley.

Trial was non-jury, the court rendering judgment for appellee for the amount of the account plus $500.00 attorney’s fees against all defendants and the judgment directed that Gracy Title Company pay the judgment from funds held by it as proceeds of a sale of certain real property in Hays County.

Hallmark did not appeal from this judgment; Chesley and Associates did appeal.

The judgment of the trial court is, from the record, patently erroneous in two respects. It is for an excessive amount for the reason that appellee testified that 25% of its account had been paid. The other obvious error is that it directs Gracy Title Company to pay the judgment. Gracy Title Company is not a party to this suit. It is not bound by the judgment herein and the judgment should not run against it even in a directive manner.

We have read the voluminous statement of facts and have examined the many exhibits in the record. We have concluded that this case should be reversed and remanded because the judgment and the implied findings to support it are so against the overwhelming weight and preponderance of the evidence as to be clearly wrong and manifestly unjust.

There are findings of fact and conclusions of law in the record but we have disregarded them for the reasons now to be stated.

Final judgment was rendered in this case on November 24, 1964. There was no motion for a new trial.

Appellants requested findings of fact and conclusions of law December 3, 1964, within the time prescribed by Rule 296, Texas Rules of Civil Procedure.

The requested findings and conclusions not having been filed, appellants on January 15, 1965, called this omission, in writing, to the attention of the trial court. This notice was not timely given. Rule 297, T.R.C.P. This failure deprived appellants of the right to complain that findings and conclusions were not filed. Id. The trial court, however, filed his findings and conclusions on January 21, 1965.

This belated filing left appellants and the trial court insufficient time allowed by Rule 298 for requesting and filing additional or amended findings and conclusions. Under these circumstances, we consider this appeal as if no findings or conclusions had been requested, made or filed.

There is no question but that Hallmark bought the goods and merchandise shown in the account from appellee. Hallmark did not appeal and the judgment against it is not disturbed by our judgment in this case.

Mr. Chesley organized Hallmark and Associates as well as several other corporations, some of which, including Associates, are still functioning. Chesley owned all the stock in Hallmark and about 80% of the stock in Associates and was President of both. Appellee has attempted to show that Chesley and the two named Corporations are in law and in fact only one identity — i. e. Chesley.

First, let it be stated, there is no limit on the number of corporations which one person may own or control. In State v. Swift & Co., 187 S.W.2d 127, 131, Tex.Civ.App., Austin, writ ref., the Court stated, “The same persons may form as many separate corporations to carry on as many separate businesses as they may wish.”

Swift also lays down rules for determining when the corporate structure will be disregarded. There only corporations were involved, but the same rules are applicable as between corporations and individuals. We quote such rules as there given.

“ * * * the general rule is that the separate corporate entity of corporations will be observed by the courts, even though one may dominate or control another, or may treat it as a mere department, instrumentality, agency, etc.; and courts will disregard the separate legal identities of the corporations only when one is used to defeat public convenience, justify wrongs, protect fraud or crime of the other (Citing cases). These cases discuss at length proper methods or standards of handling relations between a parent and a subsidiary corporation so as to prevent their separate corporate identities from being disregarded by the courts. After reviewing particularly the Berkey case, Mr. Justice Douglas, before going on the bench, wrote an article for 39 Yale L.J. 193, in which such methods or standards are summarized as follows:
‘The observance of the following four standards will keep the business units from being treated as assimilated: (1) A separate financial unit should be set up and maintained. That unit should be sufficiently financed so as to carry the normal strains upon it. The risks attendant on the conduct of a business of that type can roughly be averaged and that average met. (2) The day to day business of the two units should be kept separate. Normally each process can be tagged so as to identify it with the activity of one unit or with that of the other. Occasionally such tagging will be difficult in a case where the two businesses are merely units in a line of production. But such separation as the technology of the business permits should be sufficient. And in addition the financial and business records of the two units should be separately kept. (3) The formal barriers between the two management structures should be maintained. The ritual of separate meetings should be religiously observed. The activities of the individuals serving on the two boards can be tagged so that the individuals qua directors of the subsidiary can always be distinguished from the same individuals qua directors of the parent. Such tagging is not pure fiction. It draws the line that keeps the dual capacities separate and distinct. It conforms to the habit of thought which accepts the fact of dual capacity but which demands a separation of conduct so that each act may be clearly categorized. Separate meetings of the boards are sufficient. The same problem arises in connection with the officers. And the same solution suggests itself. A man may not be indiscriminately one officer or another. The observance of the niceties of business efficiency are normally sufficient. Such demands are not exacting. They merely suffice to keep the record of the business affairs of the two units from becoming hopelessly intermingled. (4) The two units should not be represented as being one unit. Those with whom they come in contact should be kept sufficiently informed of their separate identities.’ ”

The undisputed evidence is that appellee never dealt with Mr. Chesley regarding any of the sales made to Hallmark. Appellee transacted business only with Mr. Ennis who managed Hallmark on a commission basis. Appellee’s manager testified he dealt with Hallmark as a corporation. All goods sold by appellee to Hallmark were billed to Hallmark, and the personal liability of Mr. Chesley or the corporate liability of Associates was not suggested by appellee until long after the bills were incurred.

The manner in which Mr. Chesley and Hallmark and Associates conducted their businesses is reflected by the following summary of the testimony of Mr. Chesley which is not contradicted.

The bank accounts of Associates, Hallmark and Chesley were kept separate. None of the personal bills of Chesley was paid by. either corporation. Separate income tax returns were filed for each of the identities, and no corporate losses were deducted by Mr. Chesley from his returns.

Associates held annual meetings of its directors and stockholders. It is not shown that Hallmark did the same, but its minutes show a special meeting of its stockholders (one), and directors on October 21, 1963, to ratify a contract between Hallmark, Associates, Chesley and Cleve Ennis. This contract will be noticed in some detail later.

Associates was incorporated with an authorized capital stock of $10,000:00. Hallmark was incorporated with an authorized capital stock of $1000.00.

Mr. Byron Shupee, a bookeeper by profession, kept the books for both Hallmark and Associates prior to the sale of Hallmark to Ennis by the Contract of October 21, 1963. Thereafter, he kept only the books of Associates. Mr. Shupee produced all of the books of these corporations in his possession, however, some of the books of Hallmark were not available since they were delivered to the office of Hallmark after its sale to Ennis, and their absence is not attributed to Mr. Chesley.

These facts clearly show compliance with the rules prescribed in Swift for determining whether a corporation is a mere sham or dummy for another person or corporation. The only fact which may give rise to doubt is the nominal amount of stock authorized for Hallmark. Using hindsight, the amount of capital was inadequate.

The mode of operations between Hallmark and Associates, during the time Ches-ley controlled both corporations, was for Associates to buy acreage, subdivide it, and then sell to builders, such as Hallmark, who would build houses on the lots and sell them. The anticipated profit of Hallmark was in the construction and sale of the houses. The profit of Associates was in the sale of the subdivider acreage. As shown by this record, the construction of houses by Hallmark was through bank financing. It was not dependent upon corporate capital. When we consider that the capitalization of a corporation is a matter of public record, we cannot attribute great significance to this evidence as to Hallmark’s capital in determining whether it was but a sham or the alter ego of Chesley or Associates. It has weight, but in our opinion, it does not tilt the scales far enough to overcome the lack of evidence in other respects.

Finally, it is contended that the transactions between Chesley, Associates and Hallmark are such as to constitute fraudulent manipulations and, hence, to impose joint liability on all for the debt due appel-lee. This contention stems from a Contract between Chesley, Hallmark and Associates by which Chesley conveyed all of the stock of Hallmark to Qeve Ennis.

Mr. Ennis had been employed by Hallmark and had done most of its subcontracting and building. He was thoroughly familiar with the business of Hallmark. He was an experienced builder. He consulted counsel before entering upon the Contract. There is no evidence that this Contract was not one made at arm’s length. Mr. Ennis could not obtain the financing which he expected and which was necessary in order to carry out the Contract. Upon the failure of Mr. Ennis to perform his obligations under the Contract it became incumbent upon Chesley to step in and salvage the projects underway and on which he was personally liable. These actions by Mr. Chesley did not result in any profit to him. They all resulted in losses.

We will not undertake to discuss all of the provisions of the Contract between the named parties nor all of the involved transactions between them. We will briefly discuss some of the more important aspects of these matters.

In the October 1963 Contract between the four named parties, Chesley reserved the right to remain as Vice President of Hallmark until December 1, 1963, in order to complete and sell four houses under construction in Williamson County by Hallmark which were financed by loans on which Chesley was personally liable. Ches-ley and Ennis were to each receive 2i/£% of “each job.”

Under the Contract Hallmark was to complete and convey to Associates three houses under construction in Hays County by using money arranged to be borrowed on those houses on which loans Chesley was personally liable. Hallmark failed to perform this obligation and Chesley had to step in to protect himself. These houses were completed at a loss to Chesley.

The principal consideration under the Contract moving to Hallmark was the agreement by Associates to convey it approximately SO building lots in Williamson County for $6,000.00 cash and the assumption of certain debts.

Under the Contract, Hallmark also agreed to assume and hold the other parties harmless from certain debts among which was an account due appellee herein.

After the failure of Hallmark and Ennis to perform under the Contract, The Citizens State Bank at Georgetown foreclosed its liens on the houses under construction by Hallmark in Williamson County and bought them, paying in excess of its debts.

Appellee points to the fact that Chesley before making the October 1963 Contract had drawn down most of the interim financing furnished by the Georgetown bank for construction of the four Williamson County houses and that such withdrawals were for the purpose of paying it and other laborers and materialmen on those jobs. These “draws” were based on a percentage of completion of the houses, including a percentage of windows furnished by appel-lee, and were not for the purpose of paying any specific items. The evidence is undisputed that all of such funds so withdrawn were placed to the account of Hallmark and all was used for the purpose of paying Hallmark’s debts.

It is certainly regrettable that appellee has sold its merchandise to a Corporation unable to pay for it. Appellee has no one to blame for this but itself. It was not misled, deceived or defrauded by any one so far as this record shows. It would be more regrettable if persons not legally liable for this account should be required to pay it.

In National Hotel Co. v. Motley, 123 S.W.2d 461, Tex.Civ.App., Eastland, writ dism. c. j., it is stated that, “We do not believe there is any exception to the general rule of the non liability of a stockholder for the debts of a corporation based alone upon the fact of the insolvency of the corporation.”

There is very little evidence in this record other than insolvency of Hallmark to justify imposition of liability for its debts upon Chesley and Associates.

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

Reversed and remanded.

      . See an excellent opinion on this subject in Radio KBUY, Inc. v. Lieurance, 390 S.W.2d 16, Tex.Civ.App., Amarillo, n.w.h.


author: COLEMAN, Justice.

text:
    Sallie Mae TURNER, a Widow, Appellant, v. INDEPENDENT UNION OF COLORED LABORERS OF TEXAS, Appellee.
    No. 14587.
    Court of Civil Appeals of Texas. Houston.
    June 17, 1965.
    Rehearing Denied July 8, 1965.
    Herman W. Mead, Houston, for appellant.
    F. Warren Hicks, Houston, for appellee.
   COLEMAN, Justice.

Appellant brought suit against appellee for death benefits claimed due to her from appellee by reason of the death of her husband, John Turner. The case was submitted to a jury which answered all issues favorably to appellant. The trial court sustained appellee’s motion for judgment notwithstanding the verdict and entered judgment that appellant take nothing.

The judgment of the trial court must •be affirmed. The Independent Union of Colored Laborers of Texas is an organization composed of ten or more local lodges formed for the purpose of giving “material aid to its members in sickness and distress and to further the interest of the negro race in ail fields or lines of endeavor.” The constitution of the organization, which was introduced into evidence by appellant, reflects that it was founded by a group of seventeen men, who made themselves the Supreme Council and promulgated the constitution. This document provides that the Supreme Council shall consist of seventeen members and shall be composed of the organizers and such councilmen as -the Council may elect to membership. Members of the local lodges, therefore, have no voice in selecting the membership of the Supreme Council. The organization does not qualify as a fraternal benefit society in that it does not have a representative form of government as defined by Articles 10.01 and 10.03 of the Insurance Code of Texas, V.A.T.S.

The evidence shows that John Turner was a member of the organization and of Lodge No. 2. Each lodge has its own officers. A member may transfer from one lodge to another only on approval of the lodge to which transfer is desired.

Article X of the Constitution of the Union, entitled “Death benefits”, provides:

“Section 1. No branch of this organization shall pay death benefits to any member who fails to pay the Burial Fund assessments within thirty (30) days after initiation.
“Section 2. No branch shall pay death benefits to any beneficiary when said member fails for (30) days after death of a member to pay such sum that may be required of them by the branch of which they are members.
* * if!
“Section 4. A member paying his or her Burial Fund assessment upon date of initiation will be entitled to Death benefits if death occurs before the expiration of thirty (30) days a sum shall be paid in proportion to the expired days of membership; for example, if death occurs within fifteen (15) days, the payment would be one-half as much as would be payable in thirty (30) days. If death occurs after thirty (30) days, then the Lodge will pay a sum which will be considered a full benefit. Members shall be assessed for death payments in keeping with the above article.
“When notification of the death of a member has been posted upon a bulletin board located at place of regular meetings for thirty (30) days following death of member, this shall be taken as a conclusive evidence of notification. Members out of this city shall be furnished written noice by the Secretary of the branch in which they have membership.”

The only reasonable construction of these provisions is that each local lodge shall pay death benefits, in an amount to be determined by the lodge, to the beneficiary of a member who dies, such member having timely paid all burial fund and death benefit assessments.

The evidence establishes that the death benefit assessment is $1.00. There is no evidence as to how beneficiaries are named or determined. Apparently no certificates are issued. In any event, no certificate naming a beneficia-ry or containing a promise to pay death benefits in any amount or to any particular person was introduced into evidence.

While the constitution gives- the Supreme Council certain powers to discipline members, as well as lodges, that refuse to be governed by the laws, rules and regulations, there is nothing in the constitution giving the Supreme Council control over the funds of the Local Lodge, and there is no evidence of any other laws, rules or regulations.

We think appellant’s cause of action, if any she has, is against Independent Union of Colored Laborers, Lodge No. 2, and not against the organization generally. The constitution provides for payment by the Local Lodge of such benefits as it might establish as death benefits. Neither the Grand Council, the other Lodges, nor the general membership, have contracted expressly, or impliedly by reason of membership in the organization, to pay death benefits to John Turner’s beneficiary. This was the obligation of Lodge No. 2 and its membership.

In appellant’s brief the following statement is found:

“Appellants cause of action was reflected in her petition. It was based upon contention that her husband John Turner was a member in good standing of the Independent Union of Colored Laborers of Texas and she sued such organization, which was the exact name of the grand lodge of the organization.
“Appellee, the grand lodge, known as the Independent Union of Colored Laborers of Texas answered by way of general denial and by further special defense that John Turner was ‘un-financial’ or in other words he was delinquent in his dues.”

We take it by these statements appellant takes the position that she properly sued the general organization, or as she puts it, the grand lodge, and that the grand lodge properly answered her suit. In such case the judgment of the trial court is correct because she failed to prove that the grand lodge had agreed to pay death benefits.

Lodge No. 2 is a distinct legal entity from the parent organization. Appellant sued a legal entity, which answered the suit. There was no misnomer. There was a mistake in identity. The wrong party was sued. Gillette Motor Transport Company et al. v. Whitfield, Tex.Civ.App., 160 S.W.2d 290; Wichita Falls & Southern Ry. Co. v. Foreman, Tex.Civ.App., 109 S.W.2d 549; West v. Johnson, Tex.Civ.App., 129 S.W.2d 811, writ ref.; Krenek v. Epps Super Market No. 2, Inc., Tex.Civ.App., 377 S.W.2d 753.

Judgment affirmed.


author: FANNING, Justice.

text:
    L. W. POWELL et al., Appellants, v. FOREST OIL CORPORATION et al., Appellees.
    No. 7667.
    Court of Civil Appeals of Texas. Texarkana.
    June 22, 1965.
    Rehearing Denied July 13, 1965.

      Fred Erisman, John M. Smith, Roberts & Smith, Longview, Gordon R. Wellborn, Henderson, for appellants.
    Lee Jones, Jr., San Antonio, Chas. F. Potter of Spruiell, Lowry, Potter, Lasater & Guinn, Tyler, for appellees.
   FANNING, Justice.

A venue case. Forest Oil Corporation joined by other co-owners of a “Snider” lease in Wood County, Texas, brought suit against L. W. Powell and a number of other named defendants alleging, among other things, to the effect that a deviated or “slant hole” oil well was drilled and completed in 1954 (by Powell and other defendants) which was surfaced on the “Burgin” lease of Powell and certain named defendants in Wood County, Texas, but which was bottomed under the “Snider” lease of plaintiffs, and that from August 13, 1954, to August 6th, 1962, such well surfaced on the “Burgin” lease but bottomed under plaintiffs’ “Snider” lease, produced oil from plaintiffs’ “Snider” lease, and constituted a conversion of plaintiffs’ oil to plaintiffs’ damages in the sum of $720,994.00.

L. W. Powell and certain other defendants filed pleas of privilege to be sued in the counties of their respective residences. None of the defendants reside in Wood County, Texas, where the suit was filed. Plaintiffs controverted the pleas of privilege. The original controverting pleas were not properly sworn to but the amended controverting plea was properly sworn to. Plaintiffs contended in their amended controverting plea that venue of the suit was maintainable in Wood County, Texas, under subdivisions 9 and 7 of Art. 1995, Vernon’s Ann.Civ.St. Appellants levelled' certain special exceptions to the original and amended controverting pleas, which exceptions were overruled by the trial court. The trial court after hearing the evidence adduced, including certain stipulations, overruled the pleas of privileges of Powell and certain other named defendants, and appellants have appealed.

Plaintiffs-appellees alleged in their amended petition that defendants-appellants were mining partners. This was not denied under oath by any of the appellants. Appellants must be considered as mining partners under the record in this cause. See Rules 93 and 86, Texas Rules of Civil Procedure, and Harrington v. State, Tex.Civ.App., 385 S.W.2d 411 (1964).

The well in question and the “Snider” and “Burgin” leases were all located in Wood County, Texas.

As hereinafter indicated it is our view and holding that there was sufficient pleading and proof to maintain venue of this suit in Wood County, Texas, under the “trespass” portion of Art. 1995, V.A.C.S., by reason of conversion of plaintiffs’ oil by appellants, and for this reason we do not discuss other contentions relied on by appellees to sustain venue in Wood County, Texas.

Section 9 of Art. 1995, V.A.C.S., reads as follows:

“9. Crime or trespass. — A suit based upon a crime, offense or trespass may be brought in the county where such crime, offense, or trespass was committed by the defendant, or by his agent or representative, or in the county where the defendant has his domicile. This subdivision shall not apply to any suit based upon negligence per se, negligence at common law or any form of negligence, active or passive.”

There was ample proof that the well in question was a deviated or “slant hole” oil well which surfaced on appellants’ “Burgin” lease and bottomed under appellees’ “Snider” lease. The Sperry-Sun survey, properly made in 1962, showed that the well was bottomed under plaintiffs’ lease at a point 1400.3 feet south 35 deg. E. 56 min. W. from the surface location. Also when the well was directionally surveyed by the Railroad Commission on August 6, 1962, the measured depth was found to be 5050 feet, which was contrary to the figure of 4874 feet given by L. W. Powell as the depth of said well in the well completion report signed by Powell, as operator. On August 8th, 1962, the pipe line connection to the well was severed. Application to plug the well was made and the well was plugged.

There was ample proof that each of the appellants signed division orders and transfer orders selling the production from the oil well in question to Humble Oil & Refining Company, and that pursuant to the terms of the division orders the oil was delivered at the stock tanks on the “Burgin” lease into the Humble Pipe Line Company, in Wood County, Texas, and the proceeds were paid to the defendants in the respective amounts assigned to their purported interests.

It is generally held that an unlawful conversion is a “trespass” within the meaning of Subd. 9 of the venue statute. Thus, venue of an action for conversion may be laid in the county where the tort was committed, although the defendant has his domicile elsewhere. And in order to sustain venue in such a case, it is not necessary on the hearing of a plea of privilege to prove the fact of conversion with that degree of conclusiveness required in a trial on the merits; only a substantial controversy need be shown. See 14 Tex.Jur.2d, Conversion, Sec. 43, p. 43-45, and the numerous authorities therein cited.

Appellants contend that they did not have any knowledge that the well was a deviated or “slant hole” well. Some of the appellants acquired their interests after the well was completed and' they contend that they could not have had any knowledge of the well being deviated or being a “slant hole” well. All appellants thus contend that because they had no knowledge of the well being deviated that they could not be convertors of plaintiffs’ oil.

To constitute conversion, there must be an intent on the part of the defendant to assert some right in the property. Wrongful intention is not essential, however; nor is it material, except as to the question of damages, that the defendant acted in good faith or under a mistaken belief as to his rights. 14 Tex.Jur.2d, Sec. 3, p. 11.

In Harrington v. Texaco, Inc., 5th Circuit, 339 F.2d 814, a “slant hole” oil well case decided in 1964, it was stated:

“The fact that no effort was made to establish that Harrington had wil-fully deviated the well is not relevant to the joint liability issue since such intent is not required to make out conversion. 14 Tex.Jur.2d Conversion § 3. * * *
“Under Texas law,, these defendants were guilty of conversion of personal property,15 and under the general rule the measure of damages is the value of the converted property, 14 Tex.Jur.2d Conversion §§ 1, 3, 9, 24 — in this case, the value of the oil at the surface.”
(Footnote 15 of said opinion reads as follows: “In Texas, oil and gas is regarded as realty when in place but as personalty when severed. W. B. Johnson Drilling Co. v. Lacy, Tex.Civ.App. no writ history, 1960, 336 S.W.2d 230; 14 Tex.Jur.2d Conversion § 9.”

In Pan American Petroleum Corporation v. Long, 5th Circuit, 340 F.2d 211 (1964), Southwestern Life Insurance Company, a mortgagor of Long, the operator of a deviated or “slant hole” oil well, was held liable for conversion of oil and gas. This was based largely upon the fact that Southwestern, though innocent of any willful or intentional wrongdoing, had signed division orders selling the production from the deviated wells, that the production had been delivered to the purchaser by Long, the operator, and the proceeds paid to Southwestern Life Insurance Company. The division orders (similar to the division orders in this case) provided that title to the oil should pass to the purchaser upon delivery into the pipeline. The Circuit Court in holding Southwestern Life liable for conversion in its opinion stated in. part as follows:

“This case is another chapter in the litigation arising out of the recent slant hole oil episode in the East Texas field, this time involving two parties innocent of any purposeful wrongdoing. The question here is whether the slanted-on oil company may recover from a financial institution- the proceeds of the stolen oil received by it from the purchasing pipelines in payment of loans and production payments made to or purchased from the slant-hole operator. * * * We have concluded that the Trial Court was correct in holding Southwestern Life liable for conversion to the extent of all proceeds received during the two-year period. We therefore affirm.
« * * *
“In this case, ascertainment of the applicable legal rules governing the tort of conversion presents no real difficulty, and the problem is whether under these circumstances, conversion is made out. Although the formula has been variously worded by the Courts of Texas, the fundamentals of conversion have been fairly consistently defined. In its brief SWL states a definition which apparently has garnered wide acceptance. Conversion is ‘ * * * the unlawful and wrongful exercise of dominion, ownership, or control by one person over the property of another, to the exclusion of the same rights by the owner., * * *.’ France v. Gibson, Tex.Civ.App., 1907, 101 S.W. 536.
“From all definitions encountered the rubric seems to be some distinct act of dominion or control over the personal property of another. The convertor may either have actual or constructive possession of the property. Although the act of control or dominion must be positive and affirmative (mere non-feasance will not do), a wrongful or fraudulent intent or purpose is not required, and the presence of good faith in the convertor is relevant only on the issue of damages. Only where the owner is seeking to recover the actual property itself rather than the value thereof, or with more particular reference to the slant hole cases, where the slanted-on owner seeks recovery from the adjoining working interest owner, who in developing and operating the lease has incurred ‘cost of production’ does the presence of good faith mitigate or alter the recovery.”

As heretofore stated, there is ample proof in the record that the oil well in question was deviated and a “slant hole” well, surfaced on appellants’ lease but bottomed under appellees’ lease, that said well produced oil and gas from appellees’ lease, that each of the appellants signed division orders, such oil and gas was delivered into the pipeline of the purchaser under the division orders, and payment therefor was made to appellants. All of the necessary ■ elements of conversion are made out under the record in this case against appellants, irrespective of whether any of them had any knowledge of the deviation of the oil well in question.

The original controverting plea was defectively sworn to, upon knowledge and belief. This was corrected by the amended controverting plea which was properly sworn to with a proper jurat. The amended controverting plea also specifically states:

“Plaintiffs have filed herein their First Amended Original Petition, the allegations of which are incorporated herein as though fully set out. The allegations in said petition are true and correct.”

We have examined the allegations in plaintiff’s first amended original petition and find that they are sufficient to allege a trespass by conversion as against all appellants, occurring in Wood County, Texas, and that such amended petition and such amended controverting plea which adopts said amended petition sufficiently allege a trespass by conversion as against all appellants in Wood County, Texas, under the trespass portion of Subd. 9 of Art. 1995, V.A.C.S. We find no error in the verification or in the amending of the amended controverting plea, and find such plea to be sufficient with respect to alleging a trespass in Wood County, Texas, as against all appellants. In this connection see Leonard v. Maxwell, Tex.Civ.App., 356 S.W.2d 335 and Tex.Sup.Ct., 365 S.W.2d 340.

Finding that venue of this cause is sustained in Wood County, Texas, under the trespass portion of Subd. 9 of Art. 1995, V.A.C.S., the judgment of the trial court is accordingly affirmed.

Affirmed.