author: COLEMAN, Justice.

text:
    COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, Appellant, v. John Q. ADAMS, Appellee.
    No. 14085.
    Court of Civil Appeals of Texas. Houston.
    April 4, 1963.
    Rehearing Denied April 25, 1963.

      Touchstone, Bernays & Johnston, Charles C. Sorrells, Dallas, for appellant.
    Bates & Brock, Warner F. Brock, Houston, for appellee.
   COLEMAN, Justice.

This is an appeal from an order of the trial court overruling a plea of privilege. The principal question involved is the constitutionality of Subd. 27, Article 1995, Revised Civil Statutes of Texas.

Appellant is a foreign corporation with its residence and principal place of business in Dallas County, Texas. The corporation is engaged in doing business in Harris County, .Texas, and has an agent, a representative and an office in that County. Ap-pellee filed suit in Harris County, Texas and, in a controverting affidavit to appellant’s plea of privilege, alleged as exceptions to exclusive venue in the county of one’s residence, Subdivisions S, 23, 27 and 28 of Article 1995, R.C.S.

Appellee failed to introduce evidence to sustain venue in Harris County under Subdivisions 5 and 28. The judgment of the trial court cannot be sustained by reason of the provisions of either of those subdivisions.

Appellant contends that exception 27 of Article 1995, R.C.S., is void and unconstitutional under the 14th Amendment to the United States Constitution as affording a wider venue for actions against foreign corporations than is afforded against domestic corporations under Section 23 of Article 1995, R.C.S. Prior to 1943 the provisions of our statutes relating to venue for foreign corporations were substantially the same as for domestic corporations. Acts 1874, 14th Legislature, G.L., Vol. 8, Ch. 34, p. 32; subd. 21, Art. 1198, Rev.Civ.Statutes of Texas, 1879; Acts of 19th Legislature, 1885, G.L., Vol. 9, p. 699; Fireman’s Fund Insurance Company v. McDaniel, Tex.Civ.App., 327 S.W.2d 358; Grayburg Oil Co. v. Powell, 118 Tex. 354, 15 S.W.2d 542.

In 1943, Subd. 23 of Art. 1995, R.C.S. was amended and now provides:

“Corporations and Associations.— Suits against a private corporation, association, or joint stock company may be brought in the county in which its principal office is situated; or in the county in which the cause of action or part thereof arose; or in the county in which the plaintiff resided at the time the cause of action or part thereof arose, provided such corporation, association or company has an agency or representative in such county; or, if the corporation, association, or joint stock company had no agency or representative in the county in which the plaintiff resided at the time the cause of action or part thereof arose, then suit may be brought in the county nearest that in which plaintiff resided at said time in which the corporation, association or joint stock company then had an agency or representative. Suits against a railroad corporation, or against any assignee, trustee or receiver operating its railway, may also be brought in any county through or into which the railroad of such corporation extends or is operated. Suits against receivers of persons and corporations may also be brought as otherwise provided by law.”
Subdivision 27 reads as follows:
“Foreign corporation. — Foreign corporations, private or public, joint stock companies or associations, not incorporated by the laws of this State, and doing business within this State, may be sued in any county where the cause of action or a part thereof accrued, or in any county where such company may have an agency or representative, or in the county in which the principal office of such company may be situated; or, when the defendant corporation has no agent or representative in this State, then in the county where the plaintiffs or either of them, reside.”

In Fireman’s Fund Insurance Company v. McDaniel, supra, the Court of Civil Appeals at Beaumont in a carefully written opinion reviewing the applicable decisions held:

“We first note some of the inequalities in the administration of the two venue exceptions even where the terms are similar. As was held in Victoria Bank & Trust Co. v. Monteith, 138 Tex. 216, 158 S.W.2d 63, and Rogers v. Fort Worth Poultry & Egg Co., Tex. Civ.App., 185 S.W.2d 165, for a plaintiff to maintain venue against a defendant domestic corporation outside of the county where its principal office is located under Exception 23, he must prove a cause of action by the preponderance of the evidence on the venue hearing. It is not sufficient under that exception to make mere prima facie proof of a cause of action. But under the part of Exception 27 here referred to, he would not need to make any proof whatever of any cause of action at the venue hearing. Southwestern Greyhound Lines v. Day, Tex. Civ.App., 238 S.W.2d 258. A foreign corporation may be sued in any county where it has an agency or representative, without reference to the plaintiff’s county of residence, and without reference to whether the suit is substantial enough that a cause of action could actually be proved upon the venue hearing.
“ * * * The Saunders decision, Power Mfg. Co. v. Saunders, 1927, 274 U.S. 490, 47 S.Ct. 678, 679, 71 L.Ed. 1165, appears to be a culmination of a series of cases since the Greene case [Southern R. Co. v. Greene, 216 U.S. 400, 30 S.Ct. 287, 54 L.Ed. 536] extending the equal protection clause to foreign corporations and we believe it to be decisive of the constitutional question before us.
******
“We accordingly hold Sub. 27 of Art. 1995, Vernon’s Ann.Civil Statutes of Texas, as amended, to be unconstitutional under the 14th Amendment to the United States Constitution as it relates to the venue of suits against foreign corporations of Fireman’s Fund’s status to the extent that it conflicts with the provisions of Sub. 23 of Art. 1995, as amended, by Acts 1943, 48 Leg.”

This decision was cited as controlling by the Court of Civil Appeals at East-land in Maryland Casualty Company v. Frank M. Torrez, 359 S.W.2d 559. An application for a writ of error in this case was dismissed by the Supreme Court of Texas for want of jurisdiction by written opinion, in which the Court pointed out: “We should not be understood as implying that said subdivision 27 is unconstitutional or that the contrary is true.” Torrez v. Maryland Casualty Co., 363 S.W.2d 235 (Tex.Sup.). This Court, therefore, must determine the question of the constitutionality of Subdivision 27 after consideration of all the pertinent authorities.

In 1904 the Supreme Court of the United States decided the case of Cincinnati Street Railway Co. v. Snell, 193 U.S. 30, 24 S.Ct. 319, 48 L.Ed. 604. An Ohio statute provided :

“When a corporation having more than fifty stockholders is a party in an action pending in a county in which the corporation keeps its principal office, or transacts its principal business, if the opposite party make affidavit that he cannot, as he believes, have a fair and impartial trial in that county, and his application is sustained by the several affidavits of five credible persons residing in such county, the court shall change the venue to the adjoining county most convenient for both parties.”

There was no statute giving the corporation the .right to a change of venue. It was contended that this constituted discrimination denying equal protection of the law in violation of the 14th Amendment to the Constitution of the United States. The Court upheld the constitutionality of the act, saying:

“The proposition to which the case reduces itself is therefore this: That although the protection of equal laws equally administered has been enjoyed, nevertheless there has been a denial of the equal protection of the law within the purview of the 14th Amendment, only because the state has allowed one person to seek one forum and has not allowed another person, asserted to be in the same class, to seek the same forum, although as to both persons the law has afforded a forum in which the same and equal laws are applicable and administered. But it is fundamental rights which the 14th Amendment, safeguards, and not the mere forum which a state may see proper to designate for the enforcement and protection of such rights. Given, therefore, a condition where fundamental rights are equally protected and preserved, it is impossible to say that the .rights which are thus protected and preserved have been denied because the state has deemed best to provide for a trial in one forum or another. It is not, under any view, the mere tribunal into which a person is authorized to proceed by a state which determines whether the equal protection of the law has been afforded, but whether in the tribunals which the state has provided equal laws prevail.”

However, in Power Mfg. Co. v. Saunders, 274 U.S. 490, 47 S.Ct. 678, 71 L.Ed. 1165 (1927), the Supreme Court declared unconstitutional a statute of the State of Arkansas allowing a suit for personal injuries against a foreign corporation to be brought in any county of the state, where actions of the same character, if against a domestic corporation, had to be brought in a county where it had a place of business or in which its chief officer resided, and, if against a natural person, in a county where he resided or could be found. The basis for the decision is found in this quotation:

“The clause in the Fourteenth Amendment forbidding a state to deny to any person within its jurisdiction the equal protection of the laws is a pledge of the protection of equal laws (Truax v. Corrigan, 257 U.S. 312, 333, 42 S.Ct. 124, 66 L.Ed. 254, 27 A.L.R. 375; Atchi-son, Topeka & Santa Fe Ry. Co. v. Vosburg, 238 U.S. 56, 59, 35 S.Ct. 675, 59 L.Ed. 1199, L.R.A.1915E, 953), and extends as well to corporate as to natural persons (Smyth v. Ames, 169 U.S. 466, 522, 18 S.Ct. 418, 42 L.Ed. 819; Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, 165 U.S. 150, 154, 17 S.Ct. 255, 41 L.Ed. 666; Santa Clara County v. Southern Pacific R. R. Co., 118 U.S. 394, 396, 6 S.Ct. 1132, 30 L.Ed. 118). It does not prevent a state from adjusting its legislation to differences in situation or forbid classification in that connection but it does require that the classification be not arbitrary, but based on a real and substantial difference, having a reasonable relation to the subject of the particular legislation. Truax v. Corrigan, supra, page 337 (42 S.Ct. 131); Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, supra, 155 (17 S.Ct. 256); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 55 L.Ed. 369, Ann.Cas.l912C, 160; Ft. Smith Light & Power Co. v. Board of Improvement (May 16, 1927) 274 U.S. 387, 47 S.Ct. 595, 71 L.Ed. 1112.
“No doubt there are subjects as to which corporations admissibly may be classified separately from individuals and accorded different treatment, and also subjects as to which foreign corporations may be classified separately from both individuals and domestic corporations and dealt with differently. But there are other subjects as to which such a course is not admissible; the distinguishing principle being that classification must rest on differences pertinent to the subject in respect of which the classification is made.
“Here the separate classification of foreign corporations is in respect of the venue or place of bringing transitory actions. The statutes mean foreign corporations doing business within the state by her permission, and therefore having a fixed place of business therein and a resident agent on whom process may be served. We speak only of them. So far as their situation has any pertinence to the venue of transitory actions, it is not distinguishable from that of domestic corporations and individuals. Certainly there is no substantial difference. The opinion of the state court does not point to any relevant distinc- ' tion, nor have counsel suggested any. Of course the restricted venue as to domestic corporations and individuals is prompted by considerations of convenience and economy; but these considerations have equal application to foreign corporations. So far as the plaintiffs in such actions are affected, it is apparent that there is no more reason for a statewide venue when the action is against a foreign corporation than when it is against a domestic corporation or a natural person. So we conclude that the special classification and discriminatory treatment of foreign corporations are without reasonable basis and essentially arbitrary.” (Emphasis added)

Justices Holmes and Brandéis dissented.

In Bain Peanut Co. of Texas et al. v. Pinson et al., 282 U.S. 499, 51 S.Ct. 228, 75 L.Ed. 482 (1931), opinion by Mr. Justice Holmes, the Court upheld the constitutionality of Subd. 23, Art. 1995, R.C.S. of Texas, in a case where the question was raised as to whether the statute allowing suits against private corporations to be brought in any county in which the cause of action arose was valid under the 14th Amendment to the Constitution of the United States when unincorporated individuals were not subject to such suits outside the county of their residence. The Court, relying on Cincinnati Street Railway v. Snell, supra, said:

“In deciding whether a corporation is denied the equal protection of the laws when its creator establishes a more extensive venue for actions against it than are fixed for private citizens we have to consider not a geometrical equation between a corporation and a man but whether the difference does injustice to the class generally, even though it bear hard in some particular case, which is not alleged or proved here. Louisville & Nashville R. Co. v. Barber Asphalt Paving Co., 197 U.S. 430, 434, 25 S.Ct. 466, 49 L.Ed. 819; Patsone v. Pennsylvania, 232 U.S. 138, 144, 34 S.Ct. 281, 58 L.Ed. 539. This it is for the corporation to make out. The range of the State’s discretion is large. * * * The question seems to be answered by Cincinnati Street Ry. Co. v. Snell, 193 U.S. 30, 36, 37, 24 S.Ct. 319, 48 L.Ed. 604, which lays down that if the protection of fundamental rights by equal laws equally administered is enjoyed, the Constitution does not forbid allowing one person to seek a forum from which another in the same class is excluded. But without asserting a universal proposition it is obvious that there is likely to be such a difference between the business done by a corporation and that done by a private person that the State well may take it into account when it permits a corporation to he formed.”

In Metropolitan Casualty Ins. Co. of New York v. Brownell, 294 U.S. 580, 55 S.Ct. 538, 79 L.Ed. 1070, the Court considered an Indiana statute invalidating provisions in insurance policies issued by foreign insurance companies limiting time for suits thereon to less than three years. There was no similar legislation applicable to domestic insurance companies. The Supreme Court held that the legislation did not infringe the 14th Amendment, saying:

“The equal protection clause does not prohibit legislative classification and the imposition of statutory restraints on one class which are not imposed on another. But this Court has said that not every legislative discrimination between foreign and domestic corporations is permissible merely because they differ, and that with respect to some subjects of legislation the differences between them may afford no reasonable basis for the imposition of a statutory restriction upon foreign corporations, not applied to domestic corporations. The ultimate test of validity is not whether foreign corporations differ from domestic, but whether the differences between them are pertinent to the subject with respect to which the classification is made. Power Mfg. Co. v. Saunders, supra, 274 U.S. 494, 47 S.Ct. 678, 71 L.Ed. 1165. If those differences have any rational relationship to the legislative command, the discrimination is not forbidden. Washington ex rel. Bond & Goodwin & Tucker, Inc., v. Superior Court, 289 U.S. 361, 366, 53 S.Ct. 624, 77 L.Ed. 1256, 89 A.L.R. 653; National Union Fire Insurance Co. v. Wanberg, 260 U.S. 71, 75, 43 S.Ct. 32, 67 L.Ed. 136. See State of Ohio ex rel. Clarke v. Deckebach, 274 U.S. 392, 396, 47 S.Ct. 630, 71 L.Ed. 1115.
⅜ * * * * *
“It is a salutary principle of judicial decision, long emphasized and followed by this Court, that the burden of establishing the unconstitutionality of a statute rests on him who assails it, and that courts may not declare a legislative discrimination invalid unless, viewed in the light of facts made known or generally assumed, it is of such a character as to preclude the assumption that the classification rests upon some rational basis within the knowledge and experience of the legislators. A statutory discrimination will not be set aside as the denial of equal protection of the laws if any state of facts reasonably may be conceived to justify it. Rast v. Van Deman & Lewis Co., 240 U.S. 342, 357, 36 S.Ct. 370, 60 L.Ed. 679, L.R.A.1917A, 421, Ann.Cas. 1917B, 455; State Board of Tax Commissioners v. Jackson, 283 U.S. 527, 537, 51 S.Ct. 540, 75 L.Ed. 1248, 73 A.L.R. 1464.”

Four Justices dissented, citing, among other cases, Power Manufacturing Company v. Saunders, supra, for the proposition that the statute contravened the equal protection clause of the 14th Amendment.

In Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 79 S.Ct. 437, 3 L.Ed.2d 480, the Court refused to strike down legislation of the State of Ohio taxing merchandise belonging to a domestic corporation held in storage warehouses for storage only, where merchandise belonging to non-residents similarly held was exempted from the tax. In discussing whether the discrimination involved in this legislation violated the Equal Protecton Clause of the 14th Amendment, the Court said:

“But there is a point beyond which the State cannot go without violating the Equal Protection Clause. The State must proceed upon a rational basis and may not resort to a classification that is palpably arbitrary. The rule often has been stated to be that the classification ‘must rest upon some ground of difference having a fair and substantial relation to the object of the legislation.’ * * ⅜ ‘If the selection or classification is neither capricious nor arbitrary, and rests upon some reasonable consideration of difference or policy, there is no denial of the equal protection of the law.’ * * That a statute may discriminate in favor of a certain class does not render it arbitrary if the discrimination is founded upon a reasonable distinction, or difference in state policy. * * *
“ * * * Similarly, it has long been settled that a classification, though discriminatory, is not arbitrary nor violative of the Equal Protection Clause . of the Fourteenth Amendment if any state of facts reasonably can be conceived that would sustain it. * * * ”

From these cases it is evident that not all discrimination is prohibited by the Equal Protection Clause of the 14th Amendment, and that a determination of whether a statute which discriminates between classes is unconstitutional requires the consideration of: (1) whether the difference does injustice to the class generally in that the same and equal laws are not applicable and administered in the forum provided; and (2) whether the difference is pertinent to the subject with respect to which the classification is made; and (3) whether the discrimination is founded upon any reasonable distinction or difference in state policy.

That provision of Subd. 27 allowing' venue against a foreign corporation in any county where it has an agency or representative is not comparable to that provision of Subd. 23 permitting the plaintiff to sue a domestic corporation in the county of his residence at the time the cause of action accrued if the corporation maintained an agency or representative there, or, if no agency or representative is found in such county, then in the nearest county where such a representative or agency can be found. This particular exception was no doubt inserted to permit a plaintiff to have the benefit of a trial in or near his home county, and appears to be fair and reasonable since the requirement that the defendant maintain an agency or representative in the county insures that the county of trial is one where the corporation is known and with which the corporation is familiar. The foreign corporation as a plaintiff receives the benefit of the provision and therefore suffers no discrimination.

The difference, which constitutes discrimination, lies in the absence of a provision in Subd. 23 permitting suit against a domestic corporation in certain counties where it maintains an agency or representative, while Subd. 27 allows suit against foreign corporations in all such counties.

There is no contention that the same and equal laws are not applicable and administered in all counties of Texas. Subdivision 27 applies to all foreign corporations. It is a matter of common knowledge that many foreign corporations do business in this state without taking advantage of the laws of this state authorizing them to do business in Texas and subjecting them to regulation. It would be difficult, if not impossible, for a plaintiff to ascertain the principal office of a foreign corporation not authorized to do business in this state. A foreign corporation qualified to do business in this state may designate as its principal office a county remote from the population centers of the state, in which it conducts little or no business since its principal office, in fact, ordinarily will be maintained in the state of incorporation. A domestic corporation would be likely to find such a procedure uneconomical. Competitive factors probably would dictate that its principal office be located where it intends to conduct its business. Thus the foreign corporation is favored over the domestic concern when it is permitted to choose any city as its principal place of business.

There is little doubt that the difficulty of securing service on foreign corporations was a factor inducing the legislature to provide a wide venue for actions against them. The caption of Senate Bill No. 126, enacted into law by the 19th Legislature and approved by the Governor on March 31, 1885, provided:

“An act prescribing and fixing the venue of suits against foreign corporations, joint stock companies or associations, or acting corporations or associations, doing business within this state, and to provide the mode of serving process on such corporations or associations.”

The act consisted of two sections. The first was substantially the same as our present Subdivision 27 and the second provided the method of obtaining service, including service of process on “any local agent within this state.”

The degree of effective control which the state may exercise over domestic corporations as opposed to foreign corporations in general justifies the classification adopted by the state legislature. The state policy in this respect is not so arbitrary as to be unconstitutional. As regards foreign corporations submitting to a certain degree of control by qualifying to do business in the state, the justification is less evident, but nevertheless the state is not able to give its citizens the same' assurance of effective redress for injuries committed by foreign corporations as it can in the case of domestic corporations. The quotation from Justice Holmes’ opinion in the Bain Peanut case, supra, is apt in this connection. In that opinion he also pointed out: “The interpretation of constitutional principles must not be too literal. We must remember that the machinery of government would not work if it were not allowed a little play in its joints.” Bain Peanut Co. of Texas v. Pinson, supra.

It could well be that the legislature had in mind spreading litigation involving foreign corporations among the various courts of the state in order to avoid the possibility of increasing the congested condition of the dockets of the metropolitan courts. Other possibilities could be explored, but, as was pointed out by the Supreme Court of the United States in Metropolitan Casualty Insurance Company of New York v. Brownell, supra, “A statutory discrimination will not be set aside * * * if any state of facts reasonably may be conceived to justify it.” The burden of proving unconstitutionality of this statute rests on appellant more heavily in view of the fact that the act attacked was undoubtedly constitutional when enacted and the question of its legality at this time arises, not by reason of a change in its provisions, but by reason of the enactment of a statute amending Section 23, and not because discriminatory burdens have been placed on foreign corporations, but because the same burden has been removed from domestic corporations.

The highest courts of several states have considered similar statutes and have upheld them as being valid. Lloyd Adams, Inc. v. Liberty Mutual Insurance Co., 190 Ga. 633, 10 S.E.2d 46 (1940); Conner v. Willet, 265 Ala. 319, 91 So.2d 225 (1956); Long v. General Petroleum Co. of California, 11 Cal.App.2d 708, 54 P.2d 1147 (1936) ; Wilson and Company, Inc. v. Hickey, 186 Okl. 324, 97 P.2d 564 (1939).

In Fireman’s Fund Insurance Company v. McDaniel, supra, the Court of Civil Appeals said: “In view of the holding in the Saunders case, however, we believe that to point to the discrimination effected by Sub. 27 of our statute in the circumstances, is to prove it unreasonable and arbitrary as a matter of law.” In spite of our great respect for the ability and learning of that court and of the Eastland Court of Civil Appeals, we are unable to agree. In the Saunders case the statute under consideration placed venue in any county in the state without regard to whether the corporation maintained an agent or representative there. In addition, as construed by the court, the statute applied only to foreign corporations who had a permit to do business in the state. Under such circumstances the actual decision in the Saunders case would not be controlling as to the legality of the Texas law. The holding of the Saunders case has been weakened by the decision of the Bain Peanut case reaffirming the Cincinnati Street Railway case, and by the subsequent decisions of the United States Supreme Court previously cited.

Appellee proved that appellant was a foreign corporation; that it was doing business in Texas; and that it had an agent and representative in Harris County, Texas. These facts appearing, the trial court was correct in sustaining venue in Harris County, Texas. We, therefore, find it unnecessary to determine whether exception 23 applies to foreign corporations or whether the facts proved would sustain venue in Harris County under such Subdivision.

The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: WERLEIN, Justice.

license: Public Domain

text:
    INVESTORS DIVERSIFIED SERVICES, INC., Appellant, v. Arnold H. BRUNER, Appellee.
    No. 14082.
    Court of Civil Appeals of Texas. Houston.
    March 28, 1963.
    Rehearing Denied April 18, 1963.

      Morris Harrell, Marshall Simmons, John A. Gilliam, Thompson Knight, Wright & Simmons, Dallas, for appellant.
    Lyne, Blanchette, Smith & Shelton, Erich F. Klein, Jr.; Ed. M. Brown, Dallas, Ralph Balasco, Houston, for appellee.
   WERLEIN, Justice.

Appellee, Arnold H. Bruner, after obtaining a judgment against one Arvard R. Coe, Jr. et al., in the sum of $41,018.52, brought this garnishment suit on such judgment against Investors Diversified Services, Inc., individually and as manager of Investors Variable Payment Fund, Inc., Investors Stock Fund, Inc., Investors Mutual, Inc., Investors Group Canadian, Ltd., Investors Selective Fund, Inc., and Investors Syndicate Life Insurance Co., Inc., as garnishee. A writ of garnishment was served on H. M. Willis, “Manager” of Investors Diversified Services, Inc., and thereafter a default judgment was taken against appellant. Appellant, contending that it did not answer the writ or participate either by person, agent or attorney in the trial resulting in the entry of such default judgment against it, has sued out this writ of error under Articles 2249, 2249a and 2255, Vernon’s Annotated Texas Statutes, to have said judgment against it vacated.

The question presented for our consideration is whether the trial court had jurisdiction over appellant when entering the default judgment. It is appellant’s contention that the record shows that service of citation and petition were not had upon it in accordance with law. The writ of garnishment was issued March 6, 1962 and executed the same day “by summoning the Investors Diversified Services, Inc., a corporation, by delivering to H. M. Willis in person, Manager of the said Investors Diversified Services, Inc., a true copy of this garnishment.”

Appellant asserts that such service was insufficient and did not require appellant to answer the writ of garnishment which was sent to it at its domicile in Minneapolis, Minnesota by appellant’s divisional sales office in Houston. The record indicates that Diversified Services, Inc. is a Minnesota corporation qualified in Texas, and its registered agent for service is C. T. Corporation, Republic National Bank Building, Dallas 1, Texas. Appellant asserts that since it is a foreign corporation qualified to do business in this State, service would have to be made upon it under the provisions of Article 8.10 of the Texas Business Corporation Act, V.A.T.S., which provides:

“A. The president and all vice presidents of a foreign corporation authorized to transact business in this State and the registered agent so appointed by a foreign corporation shall be agents of such corporation upon whom any process, notice, or demand required or permitted by law to be served upon the corporation may be served.” ⅜
Article 8.10, subd. B. provides in part:
“Whenever a foreign corporation authorized to transact business in this State shall fail to appoint or maintain a registered agent in this State, or whenever any such registered agent cannot with reasonable diligence be found at the registered office, or whenever the certificate of authority of a foreign corporation shall be revoked, then the Secretary of State shall be an agent of such corporation upon whom any such process, notice, or demand may be served. * * * ”

Appellee takes the position that Articles 8.10, subd. A. and 8.10, subd. B. are merely cumulative of Article 2031, Vernon’s Annotated Texas Civil Statutes, which provides :

“In any suit against a foreign corporation, joint stock company or association, or acting corporation or association, pending or hereafter filed in this State, to which any foreign corporation is a party or is to be made a party, process may be served on the President, Vice-President, Secretary, Treasurer, General Manager, or upon any local or travelling agent or trav-elling salesman of such corporation, joint stock company or association, or acting corporation or association in this State.”

Article 2031, which is a general article, has never been expressly repealed. It applies generally to any foreign corporation. Its language does not confine its application to corporations doing business within the State or to corporations authorized to do business within the State. Article 2031a provides in effect that no foreign corporation shall transact business in the State without first having filed in the office of the Secretary of State a designation of an agent for service of process. In the event it fails to designate and keep continually some resident agent for acceptance of service, then service of process may be made upon the Secretary of State. This article applies to a foreign corporation which “shall transact or do any business in this State.” It is not by its terms confined in application to foreign corporations author-ised to do business within the State. Article 8.10, however, expressly confines its application to foreign corporations “authorized to transact business in this State.”

It is our view that Article 8.10 of the Business Corporation Act, which is a specific article, providing for process in the case of foreign corporations “authorized to transact business in this State,” rather than Articles 2031 and 2031a, V.A.T.S., applies in the instant case, since Investors Diversified Services, Inc., is a foreign corporation qualified and authorized to do business within this State. It is further our view that since service of process was not made upon any officer designated in Article 8.10 of the Business Corporation Act, service was not properly made, and appellee was not required to file an answer or make an appearance in the case.

We can conceive of no reason for the legislature enacting Article 8.10 of the Business Corporation Act if service of process on a foreign corporation authorized to do business in this State and with a registered designated agent for service may be served under Article 2031, V.A.T.S. We think the obvious purpose of enacting Article 8.10 was to provide a definite and specific manner of service that would remove doubt and uncertainty as to whether legal service of process was made, and protect foreign corporations authorized to do business in this State having a designated agent for service, from the risk incident to deciding whether the person served came within the provisions of Article 2031. If we are mistaken in this view, we think the service of process in this case was also not proper service under Article 2031 since it was not made on the “General Manager” of said corporation or any other person designated in such article, but upon one shown to be, in the sheriff’s return dated March ■6, 1962, “Manager” of said Investors Diversified Services, Inc., and who in fact was only appellee’s divisional sales manager according to the record. The law is well settled in this State that the record must ■show affirmatively a strict compliance with the mode of service provided, in order to .authorize a default judgment. Texaco, Inc. v. McEwen, Tex.Civ.App., 1962, 356 S.W. 2d 809, ref., n. r. e.; Household Furniture Co. v. Alvarado, Tex.Civ.App.1923, 246 S. W. 1111; United States Fidelity & Guaranty Co. v. Daniel, Tex.Civ.App.1932, 52 S.W.2d 108; Latham Co. v. J. M. Radford Grocery Co., 1909, 54 Tex.Civ.App. 510, 117 S.W. 909; Tompkins Machinery & Implement Co. v. Schmidt, Tex.Civ.App., 4 Willson, Civ.Cas.Ct.App. § 134, 16 S.W. 174.

It is immaterial that appellant had actual knowledge of the existence of the suit and the issuance of the writ of garnishment. It is not bound to take action until it has been duly served. Harrell v. Mexico Cattle Co., 1889, 73 Tex. 612, 11 S.W. 863; Ellis v. Lamb-McAshan Co., Tex.Civ.App., 264 S.W. 241, aff’d Tex.Com.App., 270 S.W. 547; Shaffer v. Schaleben, Tex.Civ.App. 1951, 236 S.W.2d 234, writ ref., n. r. e.

Appellee takes the position, however, that regardless of the validity and sufficiency of the service of process in question, appellant cannot complain of the default judgment rendered against it because it made an appearance in this cause. After appellant learned of this garnishment proceeding, its counsel, James H. Collins, wrote appellee’s attorney, Ralph Balasco, a letter dated March 26, 1962, reading as follows:

“Founded in 1894
INVESTORS
Diversified Services, Inc.
INVESTORS DIVERSIFIED SERVICES, INC.
March 26, 1962
Mr. Ralph Balasco, Attorney Americana Building Houston, Texas
Dear Mr. Balasco:
Our divisional sales office in Houston has sent us what appears to be a writ of garnishment issued to a judgment recovered by Arnold H. Bruner against Arvard R. Coe, Jr. et al. one of the holders of shares of Investors Stock Fund, Inc. a mutual fund investment company for which Investors Diversified Services, Inc. acts as investment manager. This account is in the process of being transferred to Mrs. Bernice C. Coe.
Please be advised that our Houston Office is not a general business office nor are the personnel there, including the Divisional Sales Manager, Mr. H. M. Willis authorized to accept service on behalf of any of the companies which you have shown as direct or indirect garnishees in the writ.
Investors Diversified Services, Inc. is a Minnesota corporation qualified in Texas and its registered agent for service is C T Corporation, Republic National Bank Building, Dallas 1, Texas. Investors Variable Payment Fund, Inc., Investors Stock Fund, Inc., Investors Mutual, Inc., Investors Group Canadian Fund Ltd., Investors Selective Fund, Inc. are mutual investment companies not doing business in Texas but registered under the Texas securities laws.
Investors Syndicate Life Insurance and Annuity Company is qualified in Texas and its agent for service in the state is Texas Insurance Commissioner. Mr. Coe owns no policies of Investors Syndicate Life Insurance and Annuity Company with cash value.
Very truly yours,
James H. Collins Counsel
JHC :gf
CC: Mr. H. M. Willis, Divisional Sales Manager, Houston, Texas — 172
CC: Mr. Arvard R. Coe, Jr., 1004 W. Main, Tomball, Texas
CC: Clerk of Court 582165
CC: C. L. Nungesser.”
On the same day appellant’s counsel wrote the following letter to the District Clerk of Harris County enclosing a copy of the letter sent to Mr. Balasco:
“Founded in 1894
INVESTORS
Diversified Services, Inc.
INVESTORS DIVERSIFIED SERVICES, INC.
Founded in 1894 Investors Building— 8th and Marquette — • Minneapolis 2, Minnesota
March 26,1962
Mr. R. J. Lindley, Clerk
District Court
Paris County
Houston, Texas
Re: Bruner vs. Co_, et al.
Case No. 582165
Dear Sir:
Enclosed please find a communication from this company to the attorney for the plaintiff in the above action. I would appreciate it if you would file this communication in your file for the Cause No. 582165.
Very truly yours,
/s/ James H. Collins James H. Collins JHC :gf Counsel Enel.”

Both these letters were filed by the District Clerk of Harris County at 9:44 a. m. on March 29, 1962. On April 3, 1962, default judgment was entered against appellant in thfe sum of $42,018.52 together with interest thereon from January 15, 1962, and all costs of suit accrued in the main case and also the garnishment proceedings. The judgment recites, among other things: “But the Garnishee, INVESTORS DIVERSIFIED SERVICES, INC., * * * though duly cited and served in the manner and form and for the time prescribed by law, came not but said Garnishee wholly made default, and has altogether failed to make answer to said writ heretofore issued herein.”

Appellee takes the position that appellant made its appearance by having the District Clerk of Harris County file in this cause its letter setting out certain facts with respect to the insufficiency of the service of process upon appellant, advising who was its agent for service, and giving certain information with respect to the companies it managed. Appellant contends that such letter is not an answer and did not constitute an appearance by it. It seems obvious that the trial court entered the default judgment on the theory that appellant had not filed an answer but had wholly made default, after being properly served with process. If we are correct in what is said here-inbefore the service made was not sufficient to require appellant to answer, and hence no default could be taken because of its failure to file an answer.

The letter filed by appellant was either an answer or no answer. We have neither found nor been cited to any case where a letter such as that filed herein has been held to constitute an answer. In order for an act of the defendant to constitute an answer or appearance it must seek a judgment or an adjudication by the court on some question. St. Louis & S. F. R. Co. v. Hale, 109 Tex. 251, 206 S.W. 75; Republic Oil & Gas Co. v. Owen, Tex.Civ. App., 210 S.W. 319, error ref.; Llanez v. Chisos Mining Co., Tex.Civ.App., 285 S.W. 646; 32 Texas Law Review 58, 88 (1953).

As stated at page 43 of 6 C.J.S. Appearances § 13:

" * * * although an act of defendant may have some relation to the cause, it does not constitute a general appearance, if it in no way recognizes that the cause is properly pending or that the court has jurisdiction, and no affirmative action is sought from the court.” (citing Pinkston v. Farmers State Bank of Center, Tex.Civ.App., 201 SW.2d 595)

In Cooper v. Colorado & S. R. Co., Tex. Civ.App.1927, 298 S.W. 612, it was contended by the appellant that the defendant had waived its right to change the venue by its vice president having filed an affidavit to the effect that a certain person was not its agent, the contention being that the defendant thereby entered its appearance in the trial court. The Court of Civil Appeals held that the affidavit could not be construed as an appearance or as the filing of any pleading.

See also Pinkston v. Farmers State Bank of Center, supra, in which the court construed a telegram to the trial judge as referring to the plea of privilege which was received and filed two days after the date of the telegram and held that the telegram was not an appearance on the merits and that it did not operate as a waiver of the plea of privilege.

Since the service was void, there was no appearance day upon which appellant was required to answer in order to prevent the taking of a default judgment. If the letter in question be construed as an answer or appearance, as contended by appel-lee, the garnishment proceeding should have been set for trial as a contested case and notice given as in other cases and as required by Rule 330(b), Texas Rules of Civil Procedure, before taking a default judgment. The default judgment was erroneously taken in violation of such rule, thereby depriving appellant of its day in court. Freeman v. Freeman, 1959, 160 Tex. 148, 327 S.W.2d 428; First Nat. Bank of Fabens v. Pacific Cotton Agency, Tex.Civ. App., 329 S.W.2d 504. The default judgment was also taken erroneously in violation of Rule 5 of the District Court Rules of Harris County, adopted March 20, 1961, as authorized by Rule 245, T.R.C.P., in that no request for setting was made and notice given thereof to adverse counsel as required by such rule, which we judicially notice. McCormick and Ray, Texas Law of Evidence, Second Edition, p. 202, Sec. 184.

Appellee also asserts that such letter was an answer, but a defective answer, and, therefore, no answer at all, thus making it possible for the court to enter a default judgment. It is our view that if the defectiveness of the answer results in it constituting no answer whatever, then it was not proper for the court to enter a default judgment since with no answer at all in the case, and no proper service, appellant was not before the court. In the cases relied upon by appellee the situation was different because the garnishee had been duly served.

We are not unmindful of the holding in Gray v. Armour & Co., 129 Tex. 512, 104 S.W.2d 486, in which the Texas Commission of Appeals, through Judge German, stated that prior decisions must be construed as establishing the rule that if the answer filed does not contain responses to all inquiries required to be answered, then the answer may be regarded as insufficient even in the absence' of exceptions or a controverting affidavit, and judgment by default may be entered against the garnishee. The court also stated, however:

“If a garnishee files answer which complies with article 4086, it seems to us but a fair and just rule to require the plaintiff to call to the attention of the court by proper exceptions or objections the fact of any insufficiency in the answer, thus affording the garnishee an opportunity to supply a complete answer, and also affording the court an opportunity to prevent injustice and to do justice by all parties.”

There is nothing in the record to indicate that if such letter was treated as an answer that its insufficiency was called to the attention of the court by exceptions or objections, and there is certainly nothing to indicate that appellant was ever given an opportunity to furnish a complete answer or the court given an apportunity to prevent injustice and do justice to all parties.

Article 1243 of the Revised Civil Statutes of 189S provides that an appearance for the purpose of quashing service shall operate as an appearance at the next term of the court. In St. Louis & S. F. R. Co. v. Blocker, Tex.Civ.App.1911, 138 S.W. 156, writ ref., the court held: “Whether the question as to the sufficiency of the service by which it is sought to bring the defendant into court be raised by motion or by plea, the legal effect of the appearance is the same.”

The statutes with respect to the filing of a plea or motion to quash service are carried forward in Rule 122, T.R.C.P., which reads as follows:

“If the citation or service thereof is quashed on motion of the defendant, such defendant shall be deemed to have entered his appearance at ten o’clock a. m. on the Monday next after the expiration of twenty (20) days after the day on which the citation or service is quashed, and such defendant shall be deemed to have been duly served so as to require him to appear and answer at that time, and if he fails to do so, judgment by default may be rendered against him.”

The letter in question, if considered a pleading at all, is in effect a plea or a motion to quash the citation served upon it because improper and insufficient. Even though it also sets out additional facts or information, the part thereof attacking the citation should have first been heard in order to determine whether appellant was before the court. The letter was filed on March 29, 1962, and the default judgment was taken on April 3, 1962. If the letter is construed as a plea or motion to quash the citation, the trial court erred in not sustaining such plea. Western Cottage Piano & Organ Co. v. Anderson, 1904, 97 Tex. 432, 79 S.W. 516. If it had done so, appellant would not have been required to file a complete answer until 10 o’clock a. m. on Monday next after the expiration of twenty days following the court’s action. No authority exists for holding that appellant appeared prior to such time. Hence the default judgment was prematurely entered and invalid. Lindsey v. Ferguson, Tex.Civ. App., 80 S.W.2d 407.

Reversed and remanded.


author: LANGDON, Justice.

text:
    Mrs. R. M. COLLIGAN, Appellant, v. Joseph L. SMITH, Appellee.
    No. 16385.
    Court of Civil Appeals of Texas. Port Worth.
    March 22, 1963.
    Rehearing Denied April 19, 1963.

      Bracewell, Reynolds & Patterson, and Harold R. DeMoss, Jr., Houston, for appellant.
    J. Edwin Swift, Jr., and Ernest S. Fell-baum, Houston, for appellee.
   LANGDON, Justice.

This suit was brought by appellant, Mrs. R. M. Colligan, a feme sole, seeking a declaratory judgment declaring void and unenforceable a written agreement which she had entered into with appellee, Joseph L. Smith, involving an option to purchase land owned by her. Appellant sought judgment on the grounds of no consideration or a failure of consideration, that such agreement was too vague and indefinite to be enforceable, and on the grounds that the appellee had failed to comply with the terms and provisions of the agreement itself. The trial court, upon hearing the case without a jury, held that there was valid consideration supporting the agreement, that it was not too vague and indefinite to be enforceable and therefore was valid and binding, and entered judgment for the appellee. Findings and conclusions were filed. We affirm.

The court found in effect that the appellant, the owner in fee simple of the land involved, voluntarily entered into and signed an agreement with the appellee on October 6, 1960, giving him an option to purchase under the terms and conditions therein stated. That no false, misleading or objectionable statements or representations were made by the appellee which induced or contributed to cause appellant to execute the agreement and that she substantially understood its terms and conditions, effect and meaning. That consideration was the mutual promises therein made, and the substantial work, expenditure of money and obligation to pay expenses and attorneys’ fees incurred by the appellee, in the performance of such contract from the time it was signed on October 6, 1960, to the date this suit was filed on February 2, 1961. That until his rights thereunder were questioned, the appellee complied with and fulfilled the obligations imposed on him by the agreement. That upon institution of this suit by appellant the appellee was justified in not continuing further performance. That the fair market value of the land with the restrictions was $75,000.00 and without the restrictions the value was $150,000.00. The court further found that the appellant was induced to obj ect to the agreement and to file this suit by E. J. Stolz who advanced money in payment of the expenses and attorneys’ fees and that the latter’s offer to purchase the property was subject to removal of the restrictions.

Appellant challenges these findings and conclusions, contending that the contract was void and unenforceable for (1) lack or failure of consideration, (2) indefiniteness and that the contract terminated because appellant failed to comply with its terms. Points 4 through 11 are based on no evidence or wholly insufficient evidence to support the court’s findings.

The portion of the option agreement in dispute is contained in paragraph two thereof which reads, “2. The option herewith granted shall run from the period commencing with the date hereof and ending ninety (90) days after the final determination by proper court action to exempt said part of Tract No. Two (2), described above, from the residential-only restrictions existing in Post Oak Gardens Subdivision. It is mutually understood that Purchaser shall have a reasonable length of time from the date hereof to retain legal counsel at his expense to determine if said part of Tract No. Two (2) in Post Oak Gardens Subdivision is exempt from said residential-only restrictions. Owner shall be notified in writing as soon as legal counsel is retained by Purchaser. The entire cost of legal fees and court costs shall be borne solely by Purchaser. This obligation assumed by Purchaser for legal fees and court costs in connection with the aforesaid determination is additional consideration for the option period. Said period commencing with the date hereof and ending ninety (90) days after the final determination by proper court action as hereinabove set out is hereinafter called the ‘option period.’ ”

The record reflects that the appellant was furnished the names of the attc 'neys who would handle the litigation at the time the contract was executed and this was later confirmed by letter dated January 31, 1961. This feature of the contract is not an issue.

The primary question of law for the court to consider under the record before it is whether the option contract is valid and enforceable or void and unenforceable for lack or failure of consideration or for indefiniteness.

In considering the enforceability of such contracts and particularly an option contract as is here involved, it is helpful to read what was aptly said by our Supreme Court in Corsicana Petroleum Co. v. Owens, 110 Tex. 568, 571, 222 S.W. 154, 155, speaking through Chief Justice Phillips: “But the grantors, for an independent consideration, by their contract agreed that the grantee should have that option. The unilateral character of the agreement for the option, is of no consequence. A contract for the grant of an option is necessarily unilateral. An option is granted for the purpose of enabling the grantee to exercise the particular right or not, as he may elect. The value of it consists in that privilege. Owners of property have the unquestioned power to grant such rights with respect to it. They are free to validly make such contracts. When so made, it is the duty of courts to uphold and enforce them. A contract for the grant of an option, limited to a definite time, is therefore valid and enforcible if supported by an independent consideration. * * * In many valid contracts the promise is only on one side. They are unilateral. As to them, the inquiry is not whether they are of that character, but whether they are supported by a consideration.”

The record in this case reflects that the property in question owned by Mrs. R. M. Colligan, the appellant, would be far more valuable with the restrictions removed, perhaps double the value of the property with the restrictions.

Mrs. Colligan testified that in 1955 she instituted a suit in an attempt to remove the restrictions on this same property and participated throughout the trial of the case. Judgment was entered by the trial court on April 3, 1957, by which the property was freed from the restrictions. The Waco Court of Civil Appeals affirmed the trial court on November 21, 1957, and denied the motion for rehearing on December 12, 1957 (Cowling v. Colligan, 307 S.W.2d 841). On April 30, 1958, the Texas Supreme Court reversed the Court of Civil Appeals and the District Court and denied the motion for rehearing on May 28, 1958 (158 Tex. 458, 312 S.W.2d 943).

Thus Mrs. Colligan in her previous unsuccessful effort to remove the restrictions on her property had expended considerable money for attorneys’ fees and court costs and was involved in litigation from early 1955 to May 28, 1958, a period of approximately 3 years or more. The evidence reflects that Mrs. Colligan could not afford another such suit or else was unwilling to risk her money on further litigation. This background will explain Mrs. Colligan’s testimony to the effect that until the appel-lee’s representative contacted her about the option in question she had made up her mind to do nothing further and wait until 1975 when the restrictions ran out so she could then get what the property would be worth.

Following this initial contact the parties had discussions concerning the option agreement for a period of some fourteen days. During this time proposed drafts were left with the appellant who had the time and the privilege of contacting her attorney or other advisor. Several changes were suggested and made and finally an agreement satisfactory to both parties was arrived at and executed by them on October 6, 1960.

Thereafter the record reflects that the appellee in performing under the terms of the agreement, employed attorneys to handle the matter and obligated himself to pay them a minimum fee of $2,500.00. He had paid $350.00 on this fee and further obligated himself to pay the attorneys a bonus of $12,500.00 in event they were successful in removing the restrictions. In addition appellee had spent approximately 100 hours in taking photographs, in investigating changed conditions and activities in the area involved, in contacting various residents thereof and in reviewing the record of the previous restrictions suit filed by the appellant, all toward the end of obtaining sufficient information upon which to base the suit required by the agreement. It was contemplated that the suit would be filed in January, 1961.

Then according to the record the appel-lee was contacted by a Mr. Wright, a representative of the appellant, around the first of January, 1961. He suggested that the appellant was unhappy with the option agreement and questioned its validity. Until this contact the appellee had received no word or inquiry of any kind from the appellant since the signing of the option agreement on October 6, 1960. The instant suit was thereafter filed by the appellant on February 2, 1961, about 118 days after execution of the option agreement.

Let us now examine the contentions of the appellant in the light of this record.

The points based on failure or lack of consideration are not very persuasive as against the evidence that until a representative of the appellee contacted her the appellant had decided to wait some 15 years (until 1975) for the restrictions to run out. The appellee agreed to bear the expense of litigation and perhaps cut 10 to 12 years off of her waiting period if he were successful. She knew from personal experience that such a suit would be expensive and require three years or more of litigation. The record discloses that pursuant to his obligation under the agreement the appellee expended his time and money and would have continued to do so had this suit not been filed. Certainly there was no failure or lack of consideration under such circumstances. The contentions that the appellee had not complied with or fulfilled the obligations imposed on him by the agreement are not valid and find no support in the record.

On the question of whether or not the appellee was justified in not continuing further performance after institution of this suit, it should be kept in mind that Mrs. Colligan, the appellant, would of necessity have to be party plaintiff in any suit filed by the appellee to remove the restrictions. Without her wholehearted cooperation it is obvious that such a suit would be a futile gesture. Surely the appellee could not be expected to expend his time and money in performing under the very same contract which the appellant by this suit seeks to declare invalid. Mildly speaking it is obvious that by filing this suit the appellant placed the appellee in an untenable position to proceed with the suit contemplated by their option agreement.

It is a general rule that an optionor who has given the right to purchase property within a specified time may not commit any act or omit to perform any duty calculated to cause the optionee any delay in exercising the right. 157 A.L.R. 1311.

The failure of an optionee to comply strictly with terms or'conditions of an option will be excused when such failure is brought about by the conduct of the op-tionor. Jones v. Gibbs, 133 Tex. 627, 130 S.W.2d 265, 131 S.W.2d 957.

The appellant contends that the option agreement is lacking in mutuality and is so vague, indefinite and uncertain as to be unenforceable. Presumably she has reference to mutuality of obligation. The contract under consideration here is an option, unilateral in nature, and its validity is not dependent upon mutuality of obligations. See Corbin on Contracts, Vol. 1, §§ 21 and 152; 12 Am.Jur., pp. 509, 513.

In Armstrong Paint & Varnish Works v. Continental Can Co., 301 Ill. 102, 133 N.E. 711, 714, the court held: “* * * where there is any other consideration for the contract, mutuality of obligation is not essential. If mutuality, in a broad sense, were held to be an essential element in every valid contract to the extent that both contracting parties could sue on it, there could be no such thing as a valid unilateral or option contract.” This holding was cited with approval by the Texas Supreme Court in Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340.

In determining whether the option agreement is too vague and indefinite to be enforceable the courts have held that reasonable construction given a contract by the parties themselves before the controversy arose will be given effect by the court. The basis of such holdings is that the parties themselves were in the best position to know what was intended by the language utilized by them. Rio Bravo Oil Co. v. Weed, 121 Tex. 427, 50 S.W.2d 1080, 85 A.L.R. 391; Redding Foods, Inc. v. Berry, Tex.Civ.App., 361 S.W.2d 467, and cases cited therein. It is apparent from the record in this case that the parties to this suit contemplated that following an investigation to determine conditions and changes in the area involved, a suit based upon the information obtained would be filed in the district court and diligently prosecuted to conclusion or final determination. Certainly it was not contemplated by the parties that this could be accomplished during the period October 6, 1960, the date the agreement was signed, and February 2, 1961, the date this suit was filed. It would be inconceivable to expect performance under this agreement and exercise of the option within a period of 118 -days.

In examining the option period which appellant complains of it must be kept in mind that no one could definitely ascertain the time required to litigate the restriction suit through the courts to final determination. There was some evidence to the effect that it might be as long as two years after filing before final judgment could be obtained in the trial court and Mrs. Colligan knew from her previous experience that another 18 months or two years would be required in ■the appellate courts. Thus being unable to fix any time for litigation with any degree •of certainty the parties fixed a definite period of 90 days after the final determination or judgment of the court. Under the facts of this case and considering the objective sought by the parties the option ■period could not have been more definite.

Persons are ordinarily held bound by what they write and sign. This agreement was deliberately entered into after numerous conferences between the parties and became a binding contract from the moment of its acceptance and work was commenced and done under it and money expended. Such action on the part of the appelleee was necessarily contemplated by the terms of the option agreement.

The uncertainty as to time ordinarily becomes immaterial in view of such performance. It has been held that a contract may be so uncertain that it cannot be specifically enforced in equity, but may nevertheless be the basis for a remedy at law in favor of a party who has wholly or partially performed under it.

In Geo. Finberg Co. v. Jamison, Tex.Civ. App., 260 S.W. 884, the court held: “It is to be presumed that parties signing an instrument do so for a definite purpose, and that the performance of the obligation pf the contract is to take place within some reasonable time. In the absence of a stipulation fixing the time of performance, the law fixes a reasonable time, and in ascertaining what is a reasonable time the circumstances of the particular case, including conversation between parties, may be introduced in evidence. (Citations omitted.)

“As to what constitutes reasonable- time for the performance of a contract is a mixed question of law and fact, when no time is fixed for its performance. Potter County v. Boesen (Tex.Civ.App.) 191 S.W. 787.” See also 13 Tex.Jur.2d, pp. 161, 165, §§ 37-39 and cases cited.

In Hall, et al., v. Hall, 158 Tex. 95, 308 S.W.2d 12, 16, the Supreme Court of Texas speaking through Justice Garwood held: “When the parties omit an express stipulation as to time, it is in accord with human experience and accepted standards of law for us to assume that they meant whatever term of days or years might be reasonable in the light of the circumstances before them at the date of the contract.”

In Cheek v. Metzer, 116 Tex. 356, 291 S.W. 860, 863, it was said: “What is a reasonable time * * * must be determined by the circumstances in evidence surrounding the situation of the parties and the subject-matter under which the contract was executed.”

It is not intended by this opinion to recommend the option contract in question as a model. We are certain that its authors are fully aware of many changes which would materially improve it. We are of the opinion, however, that at the time it was drawn up and signed it represented the wishes of the parties involved and sought to obtain the objectives each had in mind as of that time.

Since this suit is in the nature of a declaratory judgment seeking to declare the agreement in question void and unenforceable and we have concluded that the trial court was correct in holding it to be a valid and enforceable contract, we see no necessity in discussing other points based on no evidence or wholly insufficient evidence to support the court’s findings on matters that have no bearing on the validity of the agreement.

Each of the points of error urged by the appellant are overruled and the judgment of the trial court is affirmed.


author: CLAYTON, Justice.

text:
    H. C. ALLISON, Appellant, v. Margarito G. SINGH, Appellee.
    No. 5565.
    Court of Civil Appeals of Texas. El Paso.
    Feb. 20, 1963.
    Rehearing Denied March 13, 1963.

      Russell & Tomlin, J. M. Preston, Pecos, for appellant.
    Means & Leigh, Pecos, for appellee.
   CLAYTON, Justice.

This is a suit brought by Margarito G. Singh, appellee, against H. C. Allison, appellant, for title and possession of certain personal property, the petition containing alternate counts for damages. The property consisted largely of farm machinery, accessories, tools, equipment and supplies, and certain personal effects.

Appellee purchased from appellant a section of farm land in Reeves County in 1958. Upon appellee’s failure to meet certain payments when due, appellant foreclosed on the farm and it was bought in by appellant at a Trustee’s sale held on April 7, 1959. At the time appellee vacated the farm he allegedly left the farm machinery and other items on the premises that were taken over by appellant on April 8, 1959. On or about April 22, 1959 appellee caused to be served on appellant a “Demand for Possession of Personal Property” in which some of the property claimed by appellee was listed. In response to this demand, appellant delivered to appellee’s attorney clothing, personal effects and papers belonging to appellee. Appellant testified that at this time he informed appellee’s attorney “that .whatever • else:.-was down there (on the farm) that he wanted, that if they would send after it, they could have it.” Nothing further transpired between the parties until April 14, 1960 when the appellee caused appellant to be served with another “Demand for Possession of Personal Property” containing a more detailed list of property claimed by appellee. On April 15, 1960 appellant wrote a letter to appellee’s attorneys listing certain items claimed by appellee and stating that the listed items were all of appellee’s personal property that was on the farm premises at the time of the take-over on April 8, 1959. Appellant wrote: “You are further advised that I am ready to make delivery of the above listed property to the Sheriff of this county or his duly authorized representative * * The items of property were received and receipted for on April 18, 1960 by an agent of appellee who went to the farm for that purpose.

Appellee filed suit on May 17, 1960. In the first count of the petition appellee acknowledged receipt of the property delivered to his agent by appellant, but alleged that the latter was wrongfully withholding from appellee the other property claimed. He asked judgment for title and possession of the other property plus damages due to wear, tear and depreciation of this property during the time it was in possession of the appellant, or for the value of such of this property as could not be found.

In the second count of the petition, ap-pellee plead in the alternative that appellant had converted the property that had not been returned, and asked for damages for such conversion.

In the petition’s third count appellee asked for additional damages covering loss of value of the property returned by appellant due to wear, tear and willful and malicious abuse by appellant of this property while in possession of the appellant, and for exemplary damages for such willful and malicious conduct on the part of appellant.

Trial was to a jury. In answer to Special Issues Nos. One and Two the jury found that of a list of unreturned articles set out in Count One of the petition, some were owned by appellant and some by ap-pellee on April 8, 1959, and that the latter’s share had a reasonable market value of $216.00. In answer to Special Issues Nos. Three and Four the jury found that the difference between the reasonable market value of the returned items as of April 8, 1959 and as of April 18, 1960 was $2195.00. Under Special Issues Nos. Five and Six the jury answered that certain other listed items had been left on the farm by appel-lee on April 8, 1959 and that these items had a reasonable market value of $431.00. In Special Issues Nos. Seven and Eight the jury found that the appellant had unlawfully, willfully, wrongfully and maliciously used and damaged some of appellee’s property with the intent and purpose of damaging and injuring appellee, and awarded $600.00 exemplary damages. Judgment was rendered for appellee on the verdict in the amounts set out above, from which judgment appeal is taken.

As to the articles referred to in Special Issues Nos. One and Two, the appellant claimed in his testimony that he owned such articles. The jury found that some of the articles valued at $216.00 were owned by appellee, and it was within the jury’s province to so find. As to these latter articles we feel that a conversion on the part of appellant has been made out. Conversion has been defined as “the unlawful and wrongful exercise of dominion, ownership, or control by one person over the property of another, to the exclusion of the exercise of the same rights by the owner, either permanently or for an indefinite time * * 14 Tex.Jur.2d 5, |fl and cases there cited. The property involved in Special Issues Nos. One and Two was listed in appellee’s “Demand for Possession of Personal Property” which was served on appellant on April 14, 1960. This property was not returned to appellee by appellant, who claimed it as his own and .retained possession of it. The jury found part of it to belong to appellee. As to this part, there was an exercise of “dominion, ownership and control” by appellant over the property, “to the exclusion of the exercise of the same rights” by appellee. It is true, as set out in appellant’s Point of Error No. 1, that there was no jury finding “that possession of said property was demanded by appellee and refused by appellant” but the evidence is undisputed in this respect that it only remained for the jury to determine what part of such property, and the value thereof, belonged to appellee. Appellant’s-first point of error is overruled.

As has been stated, the jury found in answer to Special Issues Nos. Three and Four that the articles returned' to appellee by appellant had decreased in value to the extent of $2195.00 between April 8, 1959 and April 18, 1960, during which time they were in possession of the appellant. We do not understand from ap-pellee’s pleadings that it is claimed that this property was converted by appellant. There is no evidence that appellant exercised “dominion, ownership or control” over this property, and in fact the conclusion can be reached from appellant’s testimony that at the time the first demand for possession was served upon him in April, 1959 he informed appellee’s attorney “that whatever else was down there (on the farm) that he wanted, that if they would send after it, they could have it.” If, therefore, any liability for the decrease in value of the returned items lies upon appellant, it must be so under the allegations in the third count of appellee’s petition that appellant had unlawfully, willfully and maliciously used and abused such returned items of property. As opposed to this conclusion, appellee himself testified to having left many items of this property out in the open on the farm at the time he vacated the premises, and other items under a sort of lean-to shed built on the side of the barn and partially exposed to the elements, and that all of the equipment which he received back would have depreciated even if it remained untouched where he had left it on the farm. He further testified that he did not know of his own knowledge that any of the equipment left on the farm had been actually used by anyone and never saw any of it in actual operation. A former foreman of appellant’s testified to having used two tractors and a few of the other items of equipment that had been left on the farm, acting on instructions from the appellant, but we are unable to find in this record any evidence of willful or malicious abuse of appellee’s property by appellant, or under his direction. Therefore we are unable to find any support in the evidence for liability on the part of the appellant for the depreciated value of the items he returned to appellee, as found by the jury in answer to Special Issues Nos. Three and Four, and certainly no basis for the jury’s finding in Special Issue No. Seven that appellant unlawfully, willfully, wrongfully and maliciously used and damaged any property belonging to appellee with the intent and purpose of damaging and injuring the latter. Even had appellant withheld the items which he in fact returned, the withholding alone would not have sufficed for such a finding.

“The mental factor expressed in the terms used in the petition and the court’s charge, such as malice, willfulness, wantonness, intent to injure, alleged to characterize appellant’s act in withholding said property, must be sustained by some act or acts of appellant, other than the mere fact of withholding or preventing the removal of the property from the building. Such withholding of the property, however, may be considered in connection with any act, fact, or circumstance in determining the issue of malicious intent, or wanton disregard for the rights of appellee, as is deemed equivalent to such intent.” Loftus v. Ray, 46 S.W. 2d 1034 (Civ.App., El Paso, 1932, wr. dism.).

Appellant’s second point of error, complaining of the action of the trial court in rendering judgment in favor of appellee in the amount of $2195.00 based upon the difference in market value of the returned equipment as found by the jury in answer to Special Issues Nos. Three and Four, is sustained for the reasons above set out.

There being no showing of malice or of willful acts done with intent to injure or damage appellee, there can be no basis for the granting of exemplary damages as found by the jury in the amount of $600.00 in answer to Special Issue No. Eight. 17 Tex.Jur.2d 339, ¶277; Lusk v. Onstott, 178 S.W.2d 549 (Civ.App. Amarillo, 1944; no wr. hist.). Special Issues Nos. Seven and Eight might well not have been submitted to the jury. The answers to these issues appear to us to be wrong under all the facts and circumstances of this case, and in our opinion the $600.00 awarded to appellee as exemplary damages should not have been included in the judgment.

Special Issue No. Five inquired of the jury whether any or all of certain listed property was left on the farm by ap-pellee when he vacated the premises on April 8, 1959. The jury answered “Yes” to this issue, and in Special Issue No. Six found the value of the property left by ap-pellee to be $431.00. We fail to find anything in the record tending to show that appellant found or took or disposed of any of this property or converted any of it in the sense of exercising dominion, ownership or control over any part of it that was shown to be the property of the appellee. There was testimony in the record showing opportunity on the part of persons other than the appellant to have removed some of this listed property, but nothing to connect the appellant with any such possible taking. It should be observed also that appellee could have sent a representative in April, 1959 to claim and remove his property, just as he did a year later in April of 1960. In electing not to do so, it is our view that appellee ran the risk of some or all of the property being dissipated, lost or stolen. In the absence of any showing of wrong-doing on the part of appellant, and lacking any evidence of probative force that appellant had converted that portion of the property purportedly left by appellant and not found (whatever the jury may have determined it to be), we conclude that no liability rests upon appellant in this respect. Appellant’s third point of error, which attacks the action of the court in rendering judgment for appellee in the amount of $431.00, is sustained.

Appellant’s sole remaining point of error, No. Four, asserts that the court erred in rendering judgment for appellee in any sum. We overrule this point of error. We have concluded, supra, that some of appel-lee’s property, valued at $216.00, was converted by appellant. To that extent the judgment must be affirmed, but under the facts and circumstances of this case as we have found them to be, the three other items of damages embodied in the judgment, in the amounts of $2195.00, $600.00 and $431.00, respectively, must be disallowed. The judgment of the trial court is modified to eliminate these last three items, and, as so modified, is affirmed.

Judgment for appellee modified, and is affirmed as modified.


author: DENTON, Chief Justice.

text:
    W. W. WEST, Appellant, v. Minnie CARPENTER et vir, Appellees.
    No. 7230.
    Court of Civil Appeals of Texas. Amarillo.
    Feb. 25, 1963.
    Rehearing Denied April 1, 1963.

      Stovall & Stovall, Floydada, for appellant.
    Campbell, Brock, Wright & Waters, Lubbock, Eugene D. Wilson, Dallas, John B. Stapleton, Floydada, for appellees.
   DENTON, Chief Justice.

Appellee, Minnie Carpenter, joined by her husband, H. W. Carpenter, brought this suit against appellant, W. W. West, alleging a breach of an oil and gas lease contract. The oil and gas lease with ap-pellees as lessor and appellant as lessee was executed on December 3, 1956. By this suit appellees sought a cancellation of the lease in addition to damages to their land as a result of salt water going onto the land from the test well being drilled by appellant. Based on a jury verdict, the trial court entered judgment for ap-pellees in the amount of $5,848.68, but denied appellees’ request to cancel the lease. After both parties’ motions for a new trial were overruled, each excepted and appellant duly perfected this appeal. By cross-assignments appellees complained of the trial court failing to cancel the lease.

In response to special issue number one, the jury found the appellant failed to use extraordinary care and precaution in the drilling of the test well. Appellant contends the jury’s finding is against the great weight and preponderance of the evidence. The oil and gas lease contained the following provision:

“Since said land is irrigated farm land, Lessee shall use extra ordinary care and precaution in all operations conducted on said land and shall not cause nor allow to exist any permanent or irreparable damage and shall conduct all operations so as to occupy only such surface area as is reasonably necessary. Lessee shall remove all slush, mud and BS from the land, fill and level all pits, mounds and excavations and otherwise restore the land so that it shall be suitable for the continuation of farming operations.”

Appellees’ cause of action and the special issue referred to above is based on the alleged failure of the appellant to use extra ordinary care in the operation. Whether or not the evidence supports the jury finding is determined by reviewing all the evidence. In Re King’s Estate, 150 Tex. 662, 244 S.W.2d 660. In reviewing the record, we may not substitute our judgment for that of the jury. Their findings must be so contrary to the overwhelming weight and preponderance of the evidence as to be clearly wrong. Continental Bus System, Inc. v. Biggers, (Civ.App.), 322 S.W.2d 1, (Refused, NRE). Durk v. American Automobile Insurance Company, (Civ.App.), 353 S.W.2d 53.

In compliance with the terms of the lease, appellant’s drilling contractor began drilling operations on or about December 20, 1956. Drilling operations were shut down on December 24 and were resumed on the 26th. In taking the drilling pipe out of the hole on December 24, the well began to “kick”, that is, drilling fluid and mud began coming out of the hole under-pressure. When operations were resumed' on December 26, the well blew salt water,, air and mud through the surface and mud' lines under high pressure. This “blowing”' continued until January 1, 1957, at which time the well was shut down by the master valve. It is undisputed there was pressure building up in the well when the drill pipe was removed before shutting down the well on December 24. When operations were resumed on December 26, pressure in the well had apparently increased, and the well1 blew air and salt water from that date until January 1, 1957. Additional pits covering approximately one and one-half acres were constructed to take care of the excess material being blown from the well. There is also evidence to the effect this salt water was blown onto the land beyond the pits. At the time it was discovered that pressure was building up in the well, the question arose in the minds of those in charge as to whether the well should be “shut in.” It was the judgment of the drilling contractor and his superintendent to allow the well to blow. This was done in order to reduce the well pressure. Appellant acquiesced in this decision, but testified on this trial that in his opinion at that time, it was not good drilling practice. Despite the testimony of the appellant and the drilling superintendent that extra ordinary care and precaution were used in the drilling operation, the jury’s finding was to the contrary. The facts and circumstances surrounding the drilling operations were before the jury. Having considered the entire record, we are of the opinion that the jury’s finding complained of is not so contrary or against the overwhelming preponderance of the evidence as to be manifestly wrong or unjust.

Appellant next contends the first special issue was in the nature of a general charge and was a comment on the weight of the evidence. This issue inquired if appellant “failed to use extra ordinary care and precaution” in the drilling of the test well in question. “Extra ordinary care and precaution” was defined as “the use of more care and precaution than ordinary care and precaution, and by ordinary care and precaution is meant that degree of care and precaution which an ordinarily prudent drilling operator would have used under the same or similar circumstances”.

Appellant agreed by the terms of the oil and gas lease to use extra ordinary care and precaution. It is appellant’s contention the issue of whether appellant failed to use extra ordinary care should not be submitted in one issue, but should be separated into several elements, separately submitted. In our opinion, this contention is without merit. The case was tried on the theory of an alleged breach of contract and not one of negligence. The ultimate issue was whether or not appellant had breached the lease contract by failing to use extra ordinary care and precaution. When the special issue is considered along with the accompanying definition, we are of the opinion it is not subject to appellant’s objection. Various acts performed by appellant in the drilling operation would be evidentiary and elements of the ultimate question. The method of submitting special issue number one is in conformity with Rule 279, Texas Rules of Civil Procedure, and the rule thereunder established by the Supreme Court. Grieger v. Vega, 153 Tex. 498, 271 S.W.2d 85. City of Houston v. Lurie, 148 Tex. 391, 224 S.W.2d 871, 14 A.L.R.2d 61. Howell v. Howell, 147 Tex. 14, 210 S.W.2d 978.

Appellant next complains of the trial court’s definition of the term “permanent”. The court gave the following definition: “The term ‘permanent’ as used in the foregoing issue does not mean perpetual or forever, but you are instructed that if you find and believe from the evidence that the productivity of the soil has been impaired or destroyed then, and in such event, the injury would be permanent in nature.” Appellant objected to the above instruction on the ground it fails to convey the idea the damage to land to be permanent must be durable, lasting and never changing; and further the definition “leaves the jury to believe that if productivity of the soil has been impaired to any extent or any degree” then such damage would be permanent. It is well settled that injury to land may be permanent in law without being perpetual. Fort Worth & N. O. R. Co. v. Wallace, 74 Tex. 581, 12 S.W. 227. Lone Star Gas Co. v. Hutton, (Tex.Com.App.), 58 S.W.2d 19, Williams v. Henderson County Levee Improvement Dist. No. 3, (Tex.Com.App.), 36 S.W.2d 204. General Crude Oil Co. v. Aikin, (Civ.App.), 335 S.W.2d 229, (Refused on other grounds), 162 Tex. 104, 344 S.W.2d 668. In Morton Salt v. Lybrand, (Civ.App.), 292 S.W. 264, (Error dismissed), the rule is stated in the following language:

“Our courts have uniformly held, in cases where it is shown that, by overflow, fire, or other agency, the roots or sod of native or other perennial grasses, fruit or other trees, grape or berry vines, or the productivity of the soil are impaired or destroyed, that the injury is permanent in nature, for which the owner is entitled to recover, as damages, the difference in the market value of the land before and after the injury.” ( Emphasis added.)

This language was approved by the Commission of Appeals in Williams v. Henderson County Levee Improvement Dist. No. 3, supra. Under these and other authorities therein cited, we conclude the definition given by the trial court was proper.

By virtue of the jury’s answers to special issues, the trial court entered judgment for appellees in the amount of $5,-848.68, of which sum $4,687.50 was the amount of damages found by the jury, and $1,161.18 was the amount of interest at six per annum from January 1, 1957, to the date of the judgment, January 8, 1962. The sum of $4,687.50 included $750.00 which was found by the jury to be the reasonable cost of removing slush, mud and basic sediment from the land. The judgment assessed interest on $3,937.50, the amount of damages to the land.

Appellant challenges the assessment of interest before judgment on the ground it is a recovery of damages and as such is a jury question. It is well settled that interest is a part of the damages where real property of a determined value is damaged, destroyed or taken on a determined date. Watkins v. Junker, 90 Tex. 584, 40 S.W. 11. Texas Company v. State, 154 Tex. 494, 281 S.W.2d 83. Mayflower Investment Company v. Stephens, (Civ. App.), 345 S.W.2d 786, (Refused, NRE). The record is clear the damages to the land as found by the jury were fixed and determinable in the period from December 26, 1956, to January 1, 1957. Whatever damages inflicted upon the land by appellant’s drilling operations occurred during this specific period. Expert testimony was elicited to prove the actual cash value of the land immediately before and immediately after the damages. Under the facts of this case, we are of the opinion the trial court’s judgment correctly awarded interest from the date of the damages. State v. Hale, 136 Tex. 29, 146 S.W.2d 731. Trinity & S. Ry. Co. v. Schofield, 72 Tex. 496, 10 S.W. 575.

By cross-assignments, appellees complained of the action of the trial court in failing to grant appellees’ motion for pre-emptory instruction; for failing to cancel the oil and gas lease; and in submitting of certain special issues relative to a reformation of the lease.

Appellees’ motion for pre-empto-ry instruction was based on a prior judicial admission made by appellant in a prior suit brought by the drilling contractor against appellant in Lubbock County. In defense of the contractor's petition for payment for the drilling of the test well in question, appellant’s answer contained allegations to the effect the contractor failed to exercise extra ordinary care in the drilling operation. The trial court excluded this pleading and any evidence pertaining thereto. Texas courts recognize the doctrine of judicial estoppel that holds a party is estopped merely by the fact of having alleged or admitted in his pleadings in a former proceeding under oath the contrary to the assertion sought to be made. Long v. Knox, 155 Tex. 581, 291 S.W.2d 292. See also 31 C.J.S. Estoppel § 121, page 390. It will be noted this doctrine is applicable only if the former pleadings are under oath. Appellant’s jurat in the former pleadings above referred to reads: “Before me, the undersigned authority, on this day personally appeared W. W. West, who, being duly sworn, on his oath stated that the statements and the allegations of paragraphs 2 and 4 of the foregoing answer are true in substance and in fact.” Paragraph 2 stated the account sued for “is not just or true in whole or in part”. Paragraph 4 alleged the failure of consideration. Allegations of the failure to use proper care on the part of the drilling contractor were contained in paragraphs other than in paragraphs 2 and 4, and such allegations were specifically excluded by the wording of the jurat. We conclude the pleading as a whole is not sufficient to invoke the doctrine of judicial estoppel, and as such was not admissible. It follows the trial court was correct in excluding this pleading filed in the former case and all evidence pertaining thereto. The trial court correctly overruled appel-lees’ motion for pre-emptory instruction.

By another cross-assignment ap-pellees urge error in the trial court’s failure to cancel the oil and gas lease on the ground appellant failed and refused to tender the delay rentals into court. Appellant admits the delay rentals were timely tendered as they became due, and that appellees refused to accept them on the claim conditions of the lease had been violated, thus having the effect of terminating the lease. Appellant offered in his pleadings to pay all delay rentals due, and prayed that the lease not be terminated. Appellant’s timely tender of the delay rentals, even though refused by appellees, was a sufficient tender to keep the lease alive. Spruill v. Lone Star Gas Company, (Civ.App.), 253 S.W. 599, (Error dismissed.). Burt v. Deorsam, (Civ.App.), 227 S.W. 354, (NWH). By timely tendering the delay rentals and filing pleadings which tender all delay rentals due under the lease, appellant was doing all that he was required to do under the terms of the lease. However, as the lease is valid, the refusal of appellees to accept the delay rentals does not release appellant from the payment of all rentals due at this time. Appellee’s cross-assignment number two is overruled.

Appellees’ last cross-assignment complains of the trial court’s action in submitting special issues relative to the reformation of the oil and gas lease in question. The assignment contains four unrelated grounds as the basis for the alleged error. The cross-assignment is clearly multifarious, and as such, is not sufficient to be considered by this court on appeal.

After carefully reviewing this record, we are of the opinion it reflects no reversible error. The judgment of the trial court is accordingly affirmed.

Affirmed.