author: PER CURIAM. RENFRO, Justice.

text:
    EXCHANGE ESTATES, INC., et al., Appellants, v. Warren DONALDSON, Appellee.
    No. 16801.
    Court of Civil Appeals of Texas. Fort Worth.
    Oct. 7, 1966.
    On the Merits Feb. 17, 1967.
    Rehearing Denied March 17, 1967.

      Goldberg, Alexander & Baker and G. Dennis Sullivan, Dallas, for appellants.
    Garrett & Garrett and Rufus Garrett, Jr., Fort Worth, for appellee.
   ON REHEARING ON MOTION FOR EXTENSION OF TIME TO FILE STATEMENT OF FACTS

PER CURIAM.

The cause is presently pending for submission on the merits of the appeal. The transcript was timely filed. This opinion is upon appellants’ motion for a rehearing following our refusal to grant an extension of time for the filing of a statement of facts.

Our present holding: Where the original motion for extension of time to file statement of facts in the Court of Civil Appeals presented proof purporting to discharge appellants’ burden to establish that the delay was excusable, which motion was contested with evidence that the statement of facts was not requested until two days prior to date it should have been filed,—and said evidence not having been controverted prior to the time the court overruled the motion for extension of time—proof subsequently tendered, which would have raised a fact issue entitling the court to hold that good cause for delay did exist, had it been filed before the motion was overruled, should not be considered in determination of the motion for rehearing.

Consideration of the question of “good cause” for delayed filing of a statement of facts, as part of the record on appeal, is an original proceeding. The issue thereupon determined is made by pleadings and proof before the appellate court at the time it either grants or denies the motion for extension of time, at least as applied to a case where the parties join issue, as adversaries, upon the matter of good cause for delay.

The members of this court are in accord that where such issue is joined—on original submission—by pleadings and proof constituting notice of the attack upon the sufficiency of the proof tendered to establish good cause for the delay, appellants should be thereafter confined to the record existent at time of the order.

See Texas Rules of Civil Procedure 458, “Motion and Second Motion for Rehearing”. See also the reasoning of Chief Justice Gaines relative to right to correct a record so as to cause it to reflect essential jurisdictional facts in connection with what purported to be a defective statement of facts—in Gulf, C. & S. F. Ry. Co. v. Cannon, 88 Tex. 312, 31 S.W. 498 (1895).

Motion for rehearing is overruled.

On the Merits

RENFRO, Justice.

This is a third party action brought by plaintiff Warren Donaldson against defendants Exchange Estates, Inc., S. Mort Zimmerman, Frank C. Anderson, William C. Huls, Philip Leserman III, Albín P. Scott and William M. Sickler. Suit was brought upon an agreement by defendants to jointly and severally indemnify and hold plaintiff harmless against any and all actions, claims and demands whatsoever that might result or arise out of the ownership by plaintiff of certain motor hotel stock sold by plaintiff to the defendants.

Originally suit was brought by Republic National Bank of Dallas against Donaldson and others. The third party action was severed from said suit.

Trial by the court without a jury in the third party action resulted in a judgment for plaintiff against the defendants in the sum of $263,703.18, being the amount, after certain credits, the court found was due under their indemnity agreement. The Bank had previously taken judgment against plaintiff.

Appellants briefed four points of error, namely, the trial court erred (1) in overruling defendants’ plea in abatement; (2) in holding that the mailing of a promissory note constituted payment of the judgment held by the Bank against plaintiff; (3) in finding that prior to judgment in the instant suit plaintiff paid to the Bank the sum of $258,865.78, and had been released from liability because there was no evidence to support the finding; (4) in overruling defendants’ motion for continuance.

Defendants’ motion for extension of time for filing statement of facts was by this Court denied because of failure to show good cause.

The appeal, therefore, is before us without a statement of facts. There are no bills of exception in the record.

The points present matters which, from their very nature, cannot be determined by us without a statement of facts or bills of exception. In addition to findings incorporated in the judgment, the court filed twenty-three separate findings, taking up five full pages in the transcript, and, in addition, six separate conclusions of law.

Some of the findings were: (1-2-3) that each defendant, for a valuable consideration, had executed the indemnity agreement; (8) on August 19, 1965, the Bank obtained judgment against plaintiff and others in the amount of $689,641.00 and a foreclosure of lien against the Admiral Motor Hotel of Texas, Inc.; (9) pursuant to an order of sale the Bank bought the property for $325,000.00; (10) execution was issued against plaintiff; (14) prior to entry of judgment in the instant case plaintiff Donaldson “paid to the Republic National Bank of Dallas the total sum of $258,-865.78 on the judgment (in favor of Bank against plaintiff and others), and has been released from further liability on said judgment”; (18) that all conditions precedent to the obligation of defendants to hold plaintiff harmless and indemnify him against liability on the obligation asserted against plaintiff have been performed or have occurred.

The court concluded that defendants were liable to plaintiff in the amount of $253,-703.18, plus $10,000.00 attorneys’ fees.

The facts found by the court are amply sufficient to support the judgment entered.

It was held by the Supreme Court in Mays v. Pierce, 154 Tex. 487, 281 S.W.2d 79 (1955) : “There being no statement of facts in the record, we must presume there was evidence to support the findings of fact and the court’s judgment.” Cited as authority were: Kirkman v. Snively, 2 Tex. 447 (1847); Orrill v. Talbott, 44 Tex. 192 (1875); Gentry v. Schneider, 77 Tex. 2, 13 S.W. 614 (1890) ; Paden v. Briscoe, 81 Tex. 563, 17 S.W. 42 (1891); Lemp v. Armengol, 86 Tex. 690, 26 S.W. 941 (1894); Parker v. El Paso County Water Improvement Dist. No. 1, 116 Tex. 631, 297 S.W. 737 (1927); Anchor v. Wichita County Water Imp. Dist. No. 2, 129 Tex. 385, 103 S.W.2d 135, 112 A.L.R. 70 (1937); Uvalde Const. Co. v. Joiner, 132 Tex. 593, 126 S.W.2d 22 (1939) ; Hursey v. Thompson & Hursey, 141 Tex. 519, 174 S.W.2d 317 (1943); City of Galveston v. Hill, 151 Tex. 139, 246 S.W.2d 860(1) (1952); 3B Tex.Jur. 377, §§ 913-17. See also Thompson v. Republic Acceptance Corporation, 388 S.W.2d 404 (Tex.Sup., 1965).

In McDonald, Texas Civil Practice, Vol. 4, p. 1302, § 16.10(c), the author states: “Where specific findings of fact and conclusions of law are filed, and no statement of facts is brought forward, the findings of fact are binding on the parties and are accepted as justified by the evidence.”

In addition, unless the record shows to the contrary, every reasonable presumption will be indulged in favor of the findings and judgment of the trial court and no presumptions will be indulged against the validity of the judgment. Collins v. Tucker, 333 S.W.2d 218 (Tex.Civ.App., 1960, no writ hist.); 4 Tex.Jur.2d 329, § 806; Shroff v. Deaton, 220 S.W.2d 489 (Tex.Civ.App., 1949, no writ hist.); Schweizer v. Adcock, 145 Tex. 64, 194 S.W.2d 549 (Tex.Sup., 1946); Commercial Credit Corp. v. Smith, 143 Tex. 612, 187 S.W.2d 363 (Tex.Sup., 1945).

In view of the record before us, we must presume the judgment rendered by the court was proper.

Affirmed.


source: Caselaw Access Project

author: GREEN, Chief Justice.

license: Public Domain

text:
    FEATHERLAX CORPORATION, Appellant, v. Dr. M. H. CHANDLER et al., Appellees.
    No. 243.
    Court of Civil Appeals of Texas. Corpus Christi.
    Nov. 30, 1966.
    Rehearing Denied Feb. 9, 1967.
    Second Motion for Rehearing Denied March 9, 1967.

      Kelley, Looney, McLean, & Littleton, Jackson Littleton, Edinburg, for appellant.
    Sidney P. Chandler, Corpus Christi, for appellees.
   OPINION

GREEN, Chief Justice.

This suit, filed August 7, 1961, was brought by appellant Featherlax Corporation against appellees M. H. Chandler and Sidney P. Chandler to determine and enforce rights claimed under a written contract between appellant’s assignor Harold L. Stern and appellee M. H. Chandler, dated April 11, 1953. Trial before the court and jury was had on plaintiff’s second amended original petition filed May 8, 1965, and defendants’ first amended original answer filed October 10, 1962. From a judgment favorable to defendants, rendered after jury verdict, plaintiff has appealed to this court.

Hr. M. H. Chandler is and has been for many years a dentist, practicing that profession in Weslaco, Texas. Sidney P. Chandler, his brother, is and has been for many years an attorney at law, with his office in Corpus Christi. Harold L. Stern, assignor to Featherlax Corporation of the contract in question, is and has been during all the time here involved head of Stern Dental Laboratory Company, a corporation which constructed on prescription dental prosthesis or replacement teeth and dental appliances. He also was at all such times president of appellant Featherlax Corporation, which was organized in the early part of 1953.

The contract which is the subject matter of this suit, dated April 11, 1953, signed by Dr. M. H. Chandler as Party of the First Part and Harold L. Stern as Party of the Second Part, states:

“THAT WHEREAS, application for letters patent of the United States have been made by Party of the First Part being patent application No. 346817 of a Teeth Protector on the 6th day of April A.D. 1953, and the said Party of the First Part is the sole owner of all rights incident thereto, and,
WHEREAS, the Party of the Second Part is desirous of obtaining all rights in connection with the production, manufacturing and distributing of said Teeth Protectors.
NOW, THEREFORE, the parties have agreed as follows: * * *

Paragraph numbered 1 provides that in consideration of the royalties and agreements by Stern, M. H. Chandler grants unto him, his heirs and assigns, “the sole and exclusive right, privilege and licenses universally to produce, manufacture and distribute Teeth Protectors based upon and containing the articles for which a patent application has been made by the Party of the First Part, together with all improvements and any and all other items pertaining to Dental Protection which has been or may be developed and/or invented by, through or under the patentees to the end of the term for which any letters patent are granted concerning or pertaining to Dental Protectors.”

Paragraph 2 provides that “the Party of. the Second Part shall pay to Party of the First Part, to-wit: Dr. M. H. Chandler, royalties in the amount of twenty-five (25) cents for each item sold in accordance with this agreement by the Party of the Second Part, his heirs, successors or assigns * * * ft

Paragraph 14 states that Stern “shall be at liberty to grant sublicenses hereunder to produce, manufacture and/or sell any items contemplated herein universally. Party of the Second Part and his heirs shall have the right to assign this agreement and Party of the First Part may assign his interest here- * * * ft

Paragraph 15 provides that “It is understood by and between the parties hereto that the Party of the Second Part contemplates transfering his rights in this agreement to a corporation, that upon said transfer and assignment being completed the corporation assignee will be deemed to be the Party of the Second Part of this agreement and all rights, privileges and liabilities of the Party of the Second Part will become the rights, privileges and liabilities of the corporation.”

Paragraph 17 reads: “It is further understood and Party of the Second Part is hereby given an option and right of first refusal to purchase the patent rights of the Party of the First Part, in the event that the Party of the First Part desires to sell the same or any part hereof, and the price of sale, if any, shall be the same to the Party of the Second Part as any bona fide offer made to Party of the First Part by a third party.”

By written instrument dated November 15, 1953, Harold L. Stern granted and assigned to appellant Featherlax Corporation all of the rights acquired by him under the terms of the contract of April 11, 1953, between Dr. M. H. Chandler and Stern. Authority for such assignment was expressly given in paragraph 15.

In so far as the points of error raised on this appeal are concerned, plaintiff’s second amended original petition, which was his trial pleading, was two-fold in nature, seeking (1) a cancellation of the contract of April 11, 1953 upon the basis of fraud in its inducement, and (2) a determination of a breach by defendants of the purchase refusal provision of the contract (paragraph 17) and an enforcement of the resulting rights of the plaintiff. Although the statement of facts contains 1357 pages, and in addition there are approximately 450 written exhibits filed in this court, much, if not most of this evidence does not concern the points we are called upon to decide, and we shall try to restrict ourselves to the testimony we consider material to the issues involved on appeal.

At the start, we are met by a motion filed in this court by appellees on May 5, 1966, within 30 days after the filing of the transcript and statement of facts, to strike all or a portion of the record. In this motion, appellees call attention to the fact that the transcript is filed in two volumes, the first containing instruments filed in connection with the case as finally tried, and the second consisting of instruments concerning only a cross-action of appellees which was dismissed long prior to the trial of this cause. We agree that this second transcript is in no way material to the issues raised on this appeal, and though it is on file in this case, we have not concerned ourselves with it in considering our disposition of the appeal. Appellees’ objections to certain instruments and documents contained in the first volume of the transcript are overruled; we have considered only the instruments and documents which we find to be properly pertinent to the appealed cause.

Appellees complain of the filing in this court of the statement of facts because, so they state, they had no adequate time in which to review and decide whether or not to approve same and the trial judge’s approval was a qualified approval. The facts show that the trial court on March 30, 1966 signed the certificate at the end of the statement of facts evidencing an absolute and unconditional approval thereof. He thereupon delivered same to appellant’s attorney, and sent a letter to the district clerk asking him to make a docket entry that he had approved the statement of facts on March 30, 1966, “with the agreement and understanding that such signature will not lessen the time for approval by counsel for defendant as to such Statement of Facts.” Appellant’s attorney on April 4th delivered the statement of facts to appellees’ lawyer in Corpus Christi with the request that since April 15 was the last day to file same in the Court of Civil Appeals he approve and file same in said court not later than April 14. On April 12, appellees’ counsel returned the entire statement of facts to appellant’s lawyer without approving the same. On that same day it was filed in the appellate court by appellant’s attorney. The record does not disclose any objections made by appellees that the statement of facts does not truly disclose what occurred in the trial court. There is no showing that the trial court’s approval lessened the time for approval by counsel for defendants. The clerk of this court properly accepted such statement of facts for filing, and appel-lees’ motion to strike is overruled. Rule 377, Texas Rules of Civil Procedure.

The evidence discloses that by the close of the year 1952 Dr. M. H. Chandler had conceived or invented a device to be worn in the mouth during contact athletic games (football, for instance) to protect the teeth, which will be designated as a Teeth Protector. Shortly prior to the execution of the contract here involved, he had applied for a patent on such device. In March, 1953 the two Chandlers went to Houston and had conferences with Stern, some of his associates, and his lawyer, Mr. Aaron Hessel, with reference to the execution of a contract such as the one which was subsequently entered into by Stern and Dr. Chandler. In these conferences, as well as in all other transactions between the parties, Sidney Chandler acted as his brother’s lawyer. These discussions ultimately led to the contract between the parties of April 11, 1953. We shall hereafter at times refer to the two Chandlers as M. H. and Sidney.

Both M. H. and Sidney testified in the trial court that prior to the discussions leading to the contract M. H. had orally assigned to Sidney a quarter interest in the invention and the royalties as attorney fees in consideration of Sidney’s services as his lawyer in all legal matters in connection with the Teeth Protector. They further testified that they discussed Sidney’s ownership of said quarter interest with Stern and his attorney prior to the execution of the contract. This was denied by Stern and Hessel, both of whom testified that before and at the time the contract was signed M. H. stated and represented to them that he was the sole owner of all rights in and to the Teeth Protector and the application for the patent, as in the contract he represented himself to be, and that Stern would not have signed if he had known of Sidney’s interest. Stern further testified that the first information he received of the defendants’ claim that Sidney was a co-owner of the Teeth Protector and the patent rights thereto when the contract was signed was in defendant’s original answer filed in this cause on August 25, 1961.

The patent on the Teeth Protector was granted by the U. S. Patent Office in the latter part of 1954.

From the period of the negotiations leading to the contract until the present time Sidney has served actively as his brother’s lawyer in all legal and business matters pertaining to the Teeth Protector, the contract, the patent rights, infringement matters, correspondence with appellant, etc. Stern knew from the beginning that Sidney was attorney for M. H. in all matters connected with the invention and contract, and testified that he knew as early as 1953 that Sidney was receiving from M. H. a portion of the royalties as attorney fees.

FRAUD

Appellants’ first point of error is that the trial court erred in refusing judgment cancelling the contract of April 11, 1953 since the jury verdict established a basic and fundamental fraud by appellees in the inducement of such contract. On the question of fraud, the jury found that (1) at and prior to the execution of the contract of April 11, 1953 M. H. Chandler represented to Harold L. Stern that he was the sole owner of the patent application in question, (2) which representation was false, (4) Stern relied upon such representation, and (5) would not have enecuted the contract had he known that Sidney P. Chandler owned an interest in the patent application. The jury also found, in answer to Special Issue No. 3, that the representation was not made by M. H. Chandler with the knowledge that it was false. However, this finding can be ignored as immaterial since in order to constitute actionable fraud, knowledge by the maker of the false misrepresentation of its falsity is not a necessary element. 25 Tex.Jur.2d, Fraud and Deceit, § 17, p. 632, et seq.; 26 Tex.Jur.2d § 117, p. 86, et seq.; Wilson v. Jones, Tex.Com., 45 S.W.2d 572; Stroud v. Pechacek, Tex.Civ.App., 120 S.W.2d 626; Miller v. Latham, Tex.Civ.App., 276 S.W.2d 858, 866, writ ref., n. r. e.

Even though special issue No. 3 was an immaterial issue, and should not have been submitted by the court issues No. 4 and 5 were submitted conditionally, to be answered only in the event of an affirmative response to No. 3. Since No. 3 was answered “No”, the answers to issues No. 4, that Stern relied upon the false representation made by M. H. Chandler, and No. 5, that Stern would not have executed the April 11, 1953 contract had he known that Sidney Chandler owned an interest, must be disregarded as mere voluntary findings of the jury. Alpine Telephone Corporation v. McCall, 143 Tex. 335, 184 S.W.2d 830; Collins v. Brown, Tex.Civ.App., 279 S.W.2d 627; Herrera v. Zinberg, Tex.Civ.App., 287 S.W.2d 695, writ ref., n. r. e.

However, in determining whether actionable fraud is shown in this cause under the findings of the jury in response to issues 1, 2, 4 and 5, if the answers to 4 and 5 should be considered, it is interesting to note the manner in which the case was brought, and the various pleadings of plaintiff. The original petition, filed August 7, 1961, was in the nature of an in-terpleader, plaintiff alleging that it owed royalty under the contract, but saying that because of conflicting claims of the two defendants, it did not know to whom and in what proportion the money should be paid, and it tendered the royalty money into court with the request that the court determine to whom it belonged. Though this pleading contained a count on breach of contract, it did not mention fraud or cancellation. The trial court entered an order that plaintiff pay royalty money due and to become due into court, and directed that it be paid ¾ to M. H. Chandler and to Sidney P. Chandler. More will be said of this order under appellant’s points 4 and S.

The defendants filed their answer to the original petition on August 25,1961, wherein they stated, in answer to plaintiff’s count on breach of contract, that they had agreed in January, 1953, that the Teeth Protector and all rights thereto would be owned ¾ by M. H. Chandler and J4 by Sidney P. Chandler, and that it had been so owned ever since that time, and that plaintiff knew such fact. However, when plaintiff amended its petition on October 10, 1962, with knowledge of the allegations by both defendants that the sole ownership of the patent rights in the Teeth Protector were not in Dr. Chandler when the contract was originally executed and that Sidney owned ¼ of said rights, plaintiff did not allege fraud, nor did it seek to cancel the contract for original fraud. Plaintiff again alleged that it was ready, able and willing to pay royalties as provided in the contract to the person or persons entitled to receive the same, but that due to a controversy between the defendants, it did not know to whom such royalties should be paid, and again tendered into court all royalties due and unpaid and again asked the court to determine to whom such sums, as well as subsequent royalties, should be paid. It was not until the second amended original petition was filed on May 8, 1965 that plaintiff included a count in its pleading for cancellation due to fraud in the original contract.

In the meantime, plaintiff continued to operate under the contract and to receive its benefits right up to the day of the judgment in this cause. Prior to the filing of this suit, plaintiff had paid the sum of $54,415.25 royalty on the Teeth Protector, at 25⅜ per unit. From the time the suit was filed until August, 1963, plaintiff paid royalty into court in the sum of $89,788.00. On the date of judgment plaintiff had accumulated additional unpaid royalty in the sum of $18,207.50. The best years for the production and sales of the Teeth Protectors were the three years ending February 28, 1963. This increase in business was shown to be due to a rule adopted by the National Association of High School Athletic Associations, and by similar rules adopted by other school organizations, making use of a mouth or teeth protector mandatory for high school football players.

We feel that as to plaintiff’s count on fraud, the situation as shown by the record brings this case under the proposition of law announced in Rosenbaum, et al., v. Texas Bldg. & Mortg. Co., et al., Tex.Com.App., opinion adopted by Supreme Court, 140 Tex. 325, 167 S.W.2d 506, p. 508, as follows:

“The principle of law applicable to the foregoing facts is well established. It is, in effect, that, if a person who is induced by fraud to enter into a contract continues to receive benefits under the contract after he becomes aware of the fraud, or if he otherwise conducts himself in such manner as to recognize the contract as subsisting and binding, he thereby affirms the contract and waives his right of recission. An express ratification is not necessary; any act based upon a recognition of the contract as subsisting or any conduct inconsistent with an intention of avoiding it has the effect of waiving the right of recission. Grabenheimer v. Blum, 63 Tex. 369; J. B. Colt Co. v. Head, Tex.Com.App., 292 S.W. 198; Powell v. Rockow, 127 Tex. 209, 92 S.W.2d 437; Hatch v. National Cash Register Corp., Tex.Civ.App., 105 S.W.2d 1114, 12 C.J.S., Cancellation of Instruments, § 38; 8 Am.Jur., Cancellation of Instruments, Sec. 46.”

See also, Mooers v. Richardson Petroleum Co., 146 Tex. 174, 204 S.W.2d 606; Daniel v. Goesl, 161 Tex. 490, 341 S.W.2d 892; Webb Materials, Inc. v. Lacey, Tex.Civ.App., 364 S.W.2d 473; writ ref., n. r. e.; Lamoyne v. Parks, Tex.Civ.App., 295 S.W.2d 917, writ ref., n. r. e.

We hold that if appellant ever had any right of recission due to fraud, such right was waived under the rule of law announced in Rosenbaum, supra.

We also note that an essential element of actionable fraud sufficient for cancellation of a contract is injury. Where there is a benefit instead of an injury, there is no actionable fraud. 25 Tex.Jur.2d, Fraud and Deceit, § 30, pp. 658, et seq., and cases cited; Ulmer v. John Hancock Mutual Life Insurance Company, et al., Tex.Civ.App., 161 S.W.2d 862, 864, writ ref. w. o. m. Some injury must be shown to constitute cause for recission of a contract for fraud. Russell v. Industrial Transp. Co., 113 Tex. 441, 251 S.W. 1034, 51 A.L.R. 1, on rehearing, 113 Tex. 441, 258 S.W. 462. The question of injury as a result of the alleged fraud or misrepresentation is not to be confused with that of damages due to the alleged breach of contract. The latter issue was submitted to the jury as Special Issue No. 13. The issue of injury to plaintiff as the result of the alleged fraud in connection with the misrepresentation of ownership of the patent rights was not submitted to the jury, nor was its submission requested by plaintiff. In view of the court’s judgment sustaining defendants’ motion for judgment, which raised this question, we are authorized to assume that the issue of no injury as a result of such misrepresentation was determined by the trial court favorable to the decree as rendered. Rule 279 T.R.C.P.; Dee v. Parish, 160 Tex. 171, 327 S.W.2d 449, p. 452.

The trial court did not err in refusing to render judgment for appellant based on its plea of fraud. Its first point of error is overruled.

BREACH OF CONTRACT

Appellant’s second point concerns the alleged error of the court in failing to give effect to the findings of the jury of a breach by defendants of the contract of April 11, 1953, and especially paragraph 17 thereof providing that appellant would have a first refusal in the event of sale of an interest in the patent by M. H. Chandler. Its third point alleges error of the trial court in basing its judgment upon the defense of limitation.

As heretofore stated, there was a sharp issue of fact raised in the evidence as to when Stern and other officials and representatives of Featherlax Corporation first learned that Sidney Chandler was claiming or had acquired an interest in the patent rights to the Teeth Protector. Defendants testified that Stern and his attorney, Aaron Hessel, were told during such negotiations that Dr. Chandler had given Sidney as attorney fees a quarter interest in all rights to the invention, and that such was discussed between them before the contract was executed. This was definitely denied by Stern and Hessel, and by other plaintiff’s witnesses who had anything to do with discussions with defendants. However that may be, by written instrument dated January 25, 1955 signed by M. H. and Sidney P. Chandler, the former granted and assigned to the latter a one-fourth interest in the letters patent granted by the U. S. Patent Office September 24, 1954 (the application had been pending since April 1953), and to the Teeth Protector and all contracts made with reference thereto, in consideration of “legal services rendered and to be hereafter rendered by Sidney P. Chandler, a lawyer, in connection with the issue of Letters Patent, contracts in relation with the manufacture and sale of the patented article, or any improvement or improvements to said article, and legal or business advice, prosecution or defense of any suit or suits on or over said patent or infringement thereof or any legal services rendered in any way pertaining to said patent or patented mouth or teeth protector, and the agreement on the part of said Sidney P. Chandler to hereafter perform for me, my heirs, executors or administrators, during the life of said patent or any improvements thereto * * While both Chandlers testified that this same arrangement had been agreed to orally early in 1953, this was the first- written evidence of such agreement. In the trial court and here, plaintiff-appellant contend that the execution of this instrument constituted a sale by M. H. Chandler to Sidney P. Chandler of said ¡4 interest in the patent rights, and since plaintiff had not been given the right of first refusal to purchase said interest on the same terms there was a breach of the contract and plaintiff was entitled either to exercise its option to purchase the interest under proper determinations, or in the alternative, to recover its damages by reason of such breach.

In answer to special issues on this phase of the case, the jury found (11) that M. H. Chandler sold an undivided interest in the patent to Sidney P. Chandler after April 11, 1953 and prior to August 7, 1961; (12) that M. H. Chandler failed to give plaintiff the right to purchase a one-fourth interest in the patent for the price paid therefor by Sidney P. Chandler; (12a) that plaintiff suffered damage because of such failure; (13) that $23,000.00 was the amount of money that would reasonably compensate plaintiff for such failure inquired of in No. 12; (14) that the patent did have a cash market value as of January 25, 1955; (15) unanswered as to the amount of such value; (16) $13,000.00 would be the reasonable value of attorney fees for necessary legal services performed by Sidney P. Chandler for M. H. Chandler in connection with the teeth protector.

Paragraph 17 of the contract of April 11, 1953, which appellant contends was breached by the written agreement of January 25, 1955 between M. H. Chandler and Sidney P. Chandler, was not an agreement by M. H. Chandler not to sell or transfer any of his rights under the patent application. In fact paragraph 14, as heretofore mentioned, expressly gave him the right to assign his interest therein. Paragraph 17 provides that in the event M. H. Chandler, as Party of the First Part, desired to sell any of his patent rights, Party of the Second Part (plaintiff as successor of such party’s interests) had the option and right of first refusal to purchase such rights as were offered for sale at the same price as any bona fide offer made to M. H. Chandler by the third party. In the agreement between the two Chandlers there was no offer to sell an interest for a price which could be met by plaintiff. The employment of an attorney is a personal matter between client and lawyer. In this instance, the services of the attorney were to continue during the life of the patent, a period of seventeen years according to patent laws. Undoubtedly, plaintiff could not perform the services which Sidney Chandler agreed to perform under the terms of the written agreement between himself and his brother. Dr. Chandler was entitled to employ his own lawyer to represent and protect his rights involving the patent, possible infringement claims (which the evidence showed were being made) contract rights, law suits, and all things in connection with his invention for a period of many years in the future. There was no possible way for plaintiff to meet the price, if it is to be called a price, or consideration that Sidney P. Chandler as lawyer agreed to pay, if that term is appropriate, for the interest, in the patent and Teeth Protector assigned to him. The amount of $13,000.00 found by the jury to be the reasonable value of attorney fees for necessary legal services performed by Sidney P. Chandler would not be the equivalent of the bona fide offer of a third party mentioned in paragraph 17. It appears to us that an essential element of appellant’s theory is that the court through the jury verdict, can fix the value of Sidney P. Chandler’s service as his brother’s lawyer, let appellant pay that sum and dispose of him. For the agreement between M. H. and Sidney to be a breach of the 1953 contract plaintiff would have had to prove and secure jury findings that it could have been able to and would have paid “the price” that Sidney paid. As heretofore stated, plaintiff could not and did not meet this burden. In our judgment the transaction between M. H. and Sidney, as shown by their agreement of January 25, 1955, did not constitute the sale of a part of the patent rights of M. H. as was contemplated by the provisions of paragraph 17, supra, and that plaintiff has not shown itself to be entitled to the relief sought by reason of the alleged breach of contract.

But even if the premise of a breach of the contract by defendants should be accepted (and we do not accept it), any cause of action due to such breach was barred at the time plaintiff filed this suit. Defendants plead the two year and four year statutes of limitation. The jury found, in answer to special issue No. 17, that plaintiff acquired knowledge of the claim of ownership in the patent by Sidney P. Chandler more than four years prior to August 7, 1961, the date the suit was filed. The evidence shows without dispute, and plaintiff concedes this to be a fact, that on June S, 1955, Sidney wrote to plaintiff a letter in which he stated that he owned a one-fourth interest in the patent rights in question, and that M. H. Chandler owned a three-fourth interest thereto. Considerable correspondence between the parties concerning this statement followed, in all of which Sidney, as attorney for M. H. Chandler, acted for his client. The plaintiff sought to secure confirmation in writing from M. H. Chandler of Sidney’s interest, but all correspondence addressed to M. H. Chandler was referred by him to his attorney for answer, and the written agreement between M. H. and Sidney was not furnished plaintiff until in 1961, prior to the filing of this suit.

Appellant contends that the notice from Sidney of his interest in the patent given in the letter of June 5, 1955, as well as in subsequent correspondence between him and plaintiff, did not constitute notice from M. H. Chandler that he had in fact assigned the one-fourth interest in the patent to Sidney, and that although plaintiff made diligent inquiry in seeking to secure confirmation by M. H. of such ownership by Sidney, it was unable to secure such confirmation. In answer to special issues, the jury found (7) that plaintiff made diligent inquiry or inquiries of M. H. Chandler to determine the validity of any claim or claims that Sidney Chandler made concerning his ownership of an interest in the patent; (8) that M. H. Chandler did not deny to plaintiff that Sidney owned an interest in the patent; (9) that plaintiff requested Sidney P. Chandler to furnish it with some written authority, from M. H. Chandler as a basis for his claim to an ownership interest to the patent. Upon the basis of such jury findings, plaintiff contends that its cause of action on breach of contract is not barred (1) because knowledge of Sidney P. Chandler’s assertion of ownership was not equivalent to knowledge of a transfer of an interest from M. H. to Sidney Chandler; (2) the parties were guilty of fraudulent concealment of the facts in failing to furnish, on request, written evidence from M. H. Chandler of the assignment.

Again we state that in all of this correspondence Sidney was acting as the attorney for M. H. and that the officials of plaintiff knew of such relationship. Under the circumstances as shown by the evidence, the statements made to plaintiff in Sidney’s correspondence with plaintiff was sufficient to place them on notice, more than four years prior to the filing of this suit, of an assignment from M. H. Chandler to him of the interest in the patent. In order to prevent limitations from running it was necessary to establish and secure jury findings of fraudulent concealment by defendants of the facts of the alleged breach of contract.

It is well settled that the fraudulent concealment of a cause of action by a defendant, accompanied by the plaintiff’s failure, after exercising diligence to discover the concealment, will avoid the bar of the statute of limitations. 37 Tex.Jur.2d, Limitation of Actions, § 76, pp. 213, et seq., and cases cited. However, the concealment must be fraudulent. No issues of fraudulent concealment were requested or submitted to the jury. The findings mentioned above do not constitute findings of fraudulent concealment.

We are of the opinion that any cause cf action which plaintiff may have asserted based on breach of contract was barred by the four-year statute of limitations when this suit was filed. Appellant’s second and third points are overruled.

Appellant’s fourth and fifth points concern that portion of the judgment adjudging plaintiff and certain of its officials in contempt of court, assessing a fine of $100.00 against appellant, and ordering its president Harold L. Stern confined in jail for three days and until such time as he has purged himself of contempt, and suspending such fine and jail sentence for thirty days after the judgment should become final. Such order was made on motion of defendants for plaintiff’s failure and refusal to obey the court’s order to pay into court for distribution to the defendants of royalties on the Teeth Protector in the sum of $18,207.50, accumulated since plaintiff had ceased making payments under the court’s original order on its petition in interpleader in August, 1963.

The decree of the court gave judgment to the defendants against plaintiff for this $18,207.50. The transcript includes a supersedeas bond duly conditioned as provided by law signed by plaintiff and a corporate surety, and approved by the district clerk. While we feel that for other reasons raised by appellant this contempt order was improperly rendered and should be set aside, the parties agreed in open court that the supersedeas bond of plaintiff and its corporate surety is sufficient to satisfy the requirements of the court order on the contempt matter, and that said order should be nullified.

Accordingly, all of that portion of the judgment of the trial court dealing with any order of contempt is set aside and held for naught. Appellees’ cross point to the effect that the court erred in not allowing legal interest on the amount of each delinquent royalty payment from the date it became due is overruled.

The judgment as so reformed is affirmed. The costs of appeal are assessed two thirds against appellant and one third against appellees.

Reformed and affirmed.

OPINION ON MOTION FOR REHEARING

In view of the holding in Texas Employers’ Insurance Association v. Collins, 156 Tex. 376, 295 S.W.2d 902, we withdraw from our opinion the second paragraph under the title “FRAUD,” in which we stated that Special Issues Nos. 4 and 5 should be disregarded as mere voluntary findings of the jury. This action will have no effect on the affirmance of the judgment.

Appellant’s Motion for Rehearing, and Appellees’ Limited Motion for Rehearing are overruled.


author: McDONALD, Chief Justice.

text:
    C. C. BURNETT, Appellant, v. WORD, INC., et al., Appellees.
    No. 4593.
    Court of Civil Appeals of Texas. Waco.
    Feb. 23, 1967.
    Rehearings Denied March 23, 1967.

      D. B. Kultgen, Waco, for appellant.
    Ñaman, Howell, Smith & Chase, Waco, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal by defendant Burnett from a summary judgment declaring a contract between Burnett and other original stockholders of Word Records, Inc. invalid; and declaring the merger of Word Records, Inc. and Word Distributing Company valid.

Word Records, Inc., Word Records Distributing Company and certain of their stockholders, as plaintiffs, sued defendant Burnett for declaratory judgment that a contract made in December, 1958 between Burnett and other shareholders of Word Records, Inc. and Word Records Distributing Company was void. By intervention, Word, Inc. alleged that Word Records, Inc. and Word Records Distributing Company had merged, and that it was the surviving corporation. It sought declaratory judgment that the 1958 contract was void; and that the merger of Word Records, Inc. and Word Distributing Company was valid. Burnett, by answer and cross-action, asserted the contract was valid, and that the merger of the two corporations was void.

The trial court rendered summary judgment that the 1958 contract was void; and that the merger of the two corporations was valid.

Defendant Burnett appeals, contending the trial court erred in rendering summary judgment that: 1) the merger was valid; and 2) that the 1958 contract was void.

Word Records, Inc. and Word Distributing Company were two small corporations owned principally by the same stockholders and principally by the directors (who were the same in each company). Word Records was organized in 1954 and manufactured religious records. Word Distributing was organized in 1955 and marketed the products of Word Records, Inc. McCracken and associates were the managment team of both companies. Defendant Burnett and Messrs. Burch, Howell, Tabb and Fentress purchased 50% of the stock of both corporations (10% each). Burnett would not have purchased stock except that the above group had 50% and could prevent control by the McCracken group. Burnett, Burch, Howell, Tabb, Fentress and the McCracken group, in 1956, entered into written agreements that if any party to the agreements should desire to sell his stock, he would offer same to the corporation or alternately to the remaining shareholders in the proportion to each’s ownership interest in the corporation. In 1958 Fentress, Burch and Tabb wanted to sell their stock to Mc-Cracken. This could not be done without Burnett’s consent. Burnett did not want to be a minority stockholder in corporations controlled by McCracken, and desired that borrowing be restricted.

McCracken and associates, and Burnett and Howell, (stockholders and directors of both corporations) entered into the December, 1958 agreement, wherein, in consideration of the Fentress-Burch-Tabb stock being permitted to be purchased by the McCracken group, the parties to the contract agreed (in part): that “Each binds himself to vote as stockholders and directors in such a manner as to carry out bona fide the purposes and intent of this contract as herein expressed.”

a) That Burnett and Howell remain as directors of the Corporations for the duration of the contract.
b) That Word Records, Inc. not incur any new financial obligation in excess of $10,000, and Word Distributing not incur any new financial obligation in excess of $40,000, except by unanimous approval of all directors.
c)The contract to remain in effect for 10 years.

In 1966 the McCracken group desired to expand and to borrow $200,000 from Prudential Insurance Company. Burnett, who held 27% of the preferred stock, opposed borrowing the money. Prudential required a merger of the two companies as a prerequisite to making the loan. On May 28, 1966, the shareholders of Word Records, Inc. voted to issue 800 shares of treasury preferred stock to one of its employees, Kurt Kaiser. The effect of the issuance of such 800 shares to Kaiser was to dilute Burnett’s ownership to below 20%. Article 5.03 Texas Business Corporation Act, V.A. T.S. provides a corporate merger must be approved by a vote of 80% of the stock; and Article 4.03 provides for stock class voting where the value of the stock (as here) will be changed by the merger. The issuance of the stock to Kaiser destroyed Burnett’s power to block the merger. Burnett called attention to this at the meeting at which the shareholders voted to issue Kaiser the stock, and made various proposals by which stock could be issued to Kaiser without a dilution of his interest. All were rejected. Kaiser voted for the merger, and only by virtue of his vote, the necessary 80% for merger was carried. Article 2.22, subd. D Business Corporation Act, gives a corporation the right to issue Treasury stock to its officers or employees by a vote of two-thirds of the shareholders.

THE MERGER

Under Articles 5.03 and 4.03, Business Corporation Act, the merger could only be accomplished by a vote of 80% of each class of stock. Burnett had 27% of the preferred stock, was opposed to the merger, and was in position to block same. The shareholders by ⅜⅛ vote issued employee Kaiser 800 shares of treasury preferred stock. This reduced Burnett’s percentage to below 20%. Kaiser voted for the merger, and it carried only because of the vote of his stock. The shareholders issued the stock to Kaiser under Article 2.22D of the Business Corporation Act.

Defendant contends that in construing a statute it must be read in the light of other statutes on the same subject (citing Hunter v. Whiteaker & Washington, CCA, Er. Ref., 230 S.W. 1096); that if the purpose and intent of issuing the stock to Kaiser was to circumvent Articles 5.03 and 4.03, the merger was invalid; and that the record raises a fact question as to the existence of such purpose and intent, precluding summary judgment.

We reject the contention. Article 2.22, subd. D is not ambiguous, and is not qualified. It provides unless the articles of incorporation limit otherwise, treasury stock may be sold to officers or employees by a two-thirds vote of the stockholders. This was done, and we are not authorized to engraft an arbitrary qualification on the Act. The stock was legally issued to Kaiser. The merger carried by an 80% vote as required by Articles 5.03 and 4.03. The merger is valid.

THE CONTRACT

The agreement binds the parties thereto, (McCracken, Norcross, Norfleet, Meyer, Burnett and Howell) “to vote as stockholders and directors in such a manner as to carry out bona fide the purposes and intent of this contract as herein expressed.” The provisions here involved are: 1) that Burnett remain a director, and 2) that the corporation not incur new financial obligation in excess of $50,000, except by unanimous approval of all directors.

The agreement bound the parties in advance, as directors, not to borrow in excess of $50,000 except by unanimous vote of the directors. An agreement by which directors abdicate or bargain away in advance the judgment the law contemplates they shall exercise over the corporation is void. The agreement of the parties to bind themselves as directors is void. Roberts v. San Jacinto Shipbuilders, Tex.Civ.App., (nre) 198 S.W.2d 488; Hamblen v. Horwitz-Texan Theatres, Tex.Civ.App. (nwh) 162 S.W.2d 455; 45 A.L.R.2d p. 811; 17 C.J.S. Contracts § 199, pp. 995, 996.

The agreement also bound the parties as stockholders, to vote to retain Burnett as a director, and “to vote in such a manner as to carry out bona fide the purposes and intent of this contract as herein expressed.” These portions of the agreement are valid. 17 C.J.S. Contracts § 199 p. 996, 2nd column. 45 A.L.R.2d 801, 802 expresses the rule thusly: “ * * * the modern view on the question whether a stockholder’s contract, by which the manner in which he may vote his holdings is controlled, is valid, appears to be that such contracts contain no inherent defect requiring that they be struck down. Under this view, agreements by which a stockholder binds himself to vote in a specified manner with regard to the election of corporate officers and directors have been upheld, as have other agreements, as, for example, agreements binding stockholders to-vote their stock in accordance with the will of a majority of the parties to the agreement.”

Defendant plead that if the merger be declared valid he was entitled that the stock of all parties to the agreement be voted in favor of an amendment to the Corporation’s Charter providing it shall not incur new financial obligations in excess of $50,000, except by unanimous approval of all directors.

We think the contract valid as to the obligations the parties bound themselves to as stockholders. Summary judgment that the contract is void in this respect is erroneous.

The portion of the judgment declaring the merger valid is affirmed; the portion of the judgment declaring the contract void is reversed and remanded.

Costs of appeal assessed one-half each against plaintiffs and defendant.

Affirmed in part.

Reversed and remanded in part.


author: WALTER, Justice.

text:
    TEXAS LIQUOR CONTROL BOARD, Appellant, v. Benigno MEDINA, Appellee.
    No. 4130.
    Court of Civil Appeals of Texas. Eastland.
    Feb. 24, 1967.
    Waggoner Carr, Atty. Gen., Douglas H. Chilton, Austin, for appellant.
    Edward S. Marquez, El Paso, for appel-lee.
   WALTER, Justice.

Benigno Medina appealed to the District Court from an order of the Administrator of the Texas Liquor Control Board can-celling his wine and beer retail permit. The order of the Administrator was reversed and the Board has • appealed. The appellee has not filed a brief.

This is a substantial evidence rule case. In Texas Liquor Control Board v. Coggins, 402 S.W.2d 935, (CCA 1966, Writ Ref. N.R.E.), the Court said:

“In as much as this is a substantial evidence case, we must judge the matter of the Board’s action on the basis of evidence admitted in the judicial proceeding. The burden here is on the holder of the license to prove that the Texas Liquor Control Board acted arbitrarily or capriciously in suspending the license of the package store for 30 days. It has been judicially held that whether the action of the agency is supported by substantial evidence must be determined by the court from a consideration of the entire record in the case, as that record has been made in the trial court. The test is not whether the evidence admitted preponderates against the administrative decision, nor whether there is merely some evidence to support the decision. Rather the test is whether the administrative decision can find reasonable support in substantial evidence, and this is determined by the evidence presented to the judicial tribunal.”

The record conclusively shows that Medina failed to discharge his burden of showing that the order of the Administrator was not reasonably supported by substantial evidence.

The judgment is reversed and rendered for the appellant.


author: COLEMAN, Justice.

text:
    J. H. PAGE et al., Appellants, v. PAN AMERICAN PETROLEUM CORPORATION et al., Appellees.
    No. 14976.
    Court of Civil Appeals of Texas. Houston.
    Feb. 7, 1967.
    Rehearing Denied March 16, 1967.
    Sam Lee, Angleton, Paul Ferguson, Alvin, Thomas G. Sharpe, Jr., Brownsville, for appellants.
    Roy L. Merrill, Corpus Christi, for Mobil Oil Corporation, formerly Socony Mobil Oil Co., Inc.
    Vinson, Elkins, Weems & Searls, William R. Eckhardt, Houston, for University of Chicago, Chicago, Ill., and First Nat. Bank of Chicago, Chicago, Ill.
    Floyd Enlow, Angleton, for B. G. Sweeny, J. H. Scoggins, Jr., Kate Sweeny Stewart, Alice Bennett Zigenbein and husband, Clarence E. Zigenbein, Katherine Bennett Kimball, Lester Sweeny, Frank Sweeny, Emma Sweeny Schendel, Montie Sweeny Eversole, Terry Sweeny and Floyd Enlow.
    Fouts, Moore, Caldwell & Coleman, Joseph W. Moore, Houston, for J. S. Aber-crombie, E. C. Fantham and Mary Lois Williams, Independent Executrix and Sole Devisee of Robert N. Williams, Deceased.
    Leland B. Kee, Angleton, for Cleveland Davis, Pauline Davis, Trustee for Cleveland Davis, Jr., Pauline Davis, Trustee for James Ripley Davis, National Bank of Commerce of Houston (now Texas Nat. Bank of Commerce of Houston), A/C Joseph W. Moore, and National Bank of Commerce of Houston (now Texas Nat. Bank of Commerce of Houston), A/C A. E. Amerman, Jr.
    J. M. Slator, III, Houston, for W. H. Blades.
    Sam G. Croom, Houston, for W. M. Dickey.
    T. E. Kennerly, Houston, for T. E. Kennedy.
    John G. Seaman, Corpus Christi, for Jane V. Modesett and husband, Jack Modesett.
    Williams, Lee & Lee, Jesse J. Lee, Houston, for Mrs. Lula M. Sweeny, Ned Sweeny Holmes, Lucile Bennett Beeth and husband, Donald Beeth, Mrs. Della Sears, Jesse J. Lee, Mrs. Virginia Cameron, Elizabeth F. Storm and husband, Mark K. Storm, Frank Richardson Erskine, Mrs. Billie W. Ken-nerly, widow and Sole Devisee of Irl F. Kennedy, Deceased, Roland B. Voight, Montie Sweeny Eversole, Mrs. Eva Lou Sweeny Kennedy and husband, M. L. Kennedy, W. N. (Nash) Sweeny, Crews Sweeny, Odie Doubek Sweeny, Helen Marie Sweeny Mott (sued as Ellen Louise Sweeny Mott) and husband, L. W. Mott, Mrs. Betty Lee Smith Wood, Mrs. Lucile Smith, Harry L. Richardson, Jr., Trustee, Carol Lynn Richardson, George C. Gaines, Jr., and Joyce Cox.
    Kilgore & Kilgore, James A. Kilgore, Dallas, for P. J. Watrous, Trustee, and Bankers Trust Co. Group of New York.
    Fountain, Cox & Gaines, Joyce Cox, Houston, for Pan American Petroleum Corporation, Continental Oil Co., Jeanetta K. Bennett, Nannie Bennett Outlar and husband, Dr. L. B. Outlar, Fred W. Waech-ter, William E. Harvey and the First City Nat. Bank of Houston, Trustees for Account No. 358.
   COLEMAN, Justice.

This is an appeal from a summary judgment for the defendant entered in a trespass to try title case. The principal question involved is whether a lost deed can be presumed from the evidence presented as a matter of law.

The land involved in this appeal is an undivided one-half interest in approximately eighty three acres out of the westerly corner of the upper one-eighth of the Imla Keep League, Brazoria County, Texas.

The Page heirs were plaintiffs in two previous suits involving the title to portions of the upper one-eighth of the Imla Keep League. In Cause No. 38,868 in the District Court of Brazoria County, Texas, reported on appeal as Page v. Pan American Petroleum et al., 327 S.W.2d 469 (Tex.Civ.App.-Waco, 1959, err. refused n. r. e.), the defendant’s motion for summary judgment was sustained on the basis of affidavits establishing adverse possession. In Cause No. 39,056 in the District Court of Brazoria County, Texas, reported on appeal as Page v. Pan American Petroleum Corporation et al., 381 S.W.2d 949 (Tex.Civ.App.-Corpus Christi, 1964, error refused n. r. e.), the defendant’s motion for summary judgment was sustained on the basis of a presumed grant.

The particular tract of land involved in this suit was the subject of a prior suit out of the District Court of Brazoria County, Texas, reported on appeal as Bernard River Land Development Company v. Sweeny, 216 S.W.2d 597 (Tex.Civ.App.-Galveston, 1948, error refused n. r. e.). The plaintiffs in this suit were not parties to that cause where the record title holders recovered judgment in the face of pleas of presumed grant and limitations.

The entire record in each of these suits was presented to, and considered by, the trial court. The record is voluminous. In 1824 Imla Keep was granted a league of land in Austin’s Colony. Anthony Clark and his sister, Elizabeth Chase, together with her two sons, resided in Austin’s Colony. In 1829 Elizabeth acquired the upper eighth of the Keep League. Both Anthony and Elizabeth died in 1833, and Elizabeth’s two sons, Joseph William Page and Samuel Harrison Page, survived. Joseph William qualified as administrator of his mother’s estate and guardian of the estate of his minor brother, Samuel Harrison Page, in 1833. Appraisers were appointed in 1835 and the appraisal filed listed “One-eighth of a League of land, situate, lying and on Bernard.” Joseph William filed accounts for the years 1834, 1835, 1836 and 1837, but no further proceedings in the estates are recorded.

In 1839 Joseph William Page by an instrument reciting a consideration of One Dollar and “other good causes and considerations” “granted, bargained, sold, and quitclaimed” unto John Sweeny, his heirs and assigns, “all my right, title, interest, and claim in and to that certain piece of land situate and lying in the County of Brazoria on the west side of the River San Barnard, viz. the upper eighth of the upper quarter of League of land granted to Keep by the Mexican Government joining the McCormick League. To have and to hold the same in fee simple forever. He, the said Joseph W. Page relinquishing for himself and his heirs the whole of said land in favor of the said John Sweeny * *

In 1839 Samuel Harrison Page was at least seventeen years of age since he secured a land certificate in his own right in that year. He purchased land in Mata-gorda County in 1842, and another tract in the same county in 1849. He sold his home in Matagorda County in 1856, but this tract was reconveyed to him in 1858 by a deed in which his residence was recited as Cameron County. In August, 1858, this tract was again conveyed by Harrison Page, the acknowledgment being taken in Nueces County. In 1860 a tract of land in Nueces County was conveyed to Eleanor Page, the wife of Samuel H. Page. Joseph W. Page died in Matagorda County in 1854. Samuel H. Page inherited 4320 acres of land from his brother. Matagorda County adjoined Brazoria County. Apparently Samuel H. Page lived near the land in controversy until 1858 and was a large land owner with lands in several counties. He died in Nueces County in 1893.

In 1836 John Sweeny purchased from William J. Russell one-eighth of a League of land known as the lower half of the upper quarter of the League of land granted to Imla Keep by the Mexican Government. The same year he purchased approximately 1666 acres of land out of the Charles Breen League. The Keep and the Breen Leagues were adjoining grants. John Sweeny and his wife had seven sons and two daughters. He owned many slaves and established a great plantation on these lands. In 1853 John Sweeny conveyed to his daughter, Sophia McGrew, one-half of the upper quarter of the Imla Keep League. John Sweeny died in 1855, his wife having predeceased him. In December, 1855, the children of John Sweeny partitioned the lands which they had inherited from their father and mother. By this deed Sophia McGrew’s title to the land previously deeded to her by her father was confirmed, and specific tracts of land were set off to certain others of the children. The plantation tract, described as the home plantation of John Sweeny, consisting of 550 acres out of the Breen League and 545 acres out of the Imla Keep League, was conveyed in trust to John Sweeny, Jr., who was to sell the-land and divide the proceeds. By various conveyances Thomas Sweeny and Sophia McGrew acquired the interests of the other children in the home Plantation. Sophia McGrew lived on the home Plantation. In Bernard River Land Development Company v. Sweeny, supra, the Thomas Sweeny heirs, were adjudged owners 'of the 83 acre tract, at issue as against the claims of the assigns; of Sophia McGrew. There was evidence in that case that this land was thickly wooded open range. Apparently neither the Thomas Sweeny heirs nor the heirs and assigns of Sophia McGrew used this land prior to 1909, but since that time it has been enclosed with other lands for brief periods and used for pasturing cattle by those claiming under the McGrew title. There was no evidence that the heirs of Thomas Sweeny made any use of this tract of land prior to the conclusion of the Bernard River Land Development Company v. Sweeny case in 1948.

There was extensive, notorious, and continuous use made of other portions of the upper eighth of the Keep League from 1839 to the present time. It was included in the John Sweeny Home Plantation; thereafter, most of it was included in the McGrew plantation for forty years; most of it, except this particular 83 acres, has been sold and resold; large areas have been included in residential subdivisions; and most of the area is within the bounds of the Old Ocean Oil Field.

It appears that Samuel Harrison Page lived within a few miles of this land until 1856 or 1857 and within some 200 miles thereof until his death. He was living nearby when John Sweeny gave part of the tract to his daughter, Sophia, in 1853, and he was still there after John Sweeny died and his heirs partitioned the entire upper eighth of the Keep League. He inherited a great acreage of land from his brother and acquired other lands. He was active in buying and selling land. He lived with his brother for some seventeen years after the death of his mother. He was seventeen years of age and already acquiring land in his own right when John Sweeny purchased his brother’s interest in the Imla Keep League. It would be unreasonable to suppose that he was unaware of the lands owned by his mother, which he had inherited from her. It would also be unreasonable to suppose that he did not know of the use being made of these lands by John Sweeny.

John Sweeny and Samuel H. Page were cotenants after Sweeny acquired the interest of Joseph W. Page, since there is no direct proof that Sweeny had acquired any ownership in the property prior to that time. The listing of the Keep League property in the inventory of the Estate of Elizabeth Chase by Joseph Page and the appraisers, together with the fact that John Sweeny purchased Joseph’s interest in the land, are facts which would prevent a presumption of a grant to Sweeny from Elizabeth Chase in a summary judgment proceeding. As a general rule the possession of land by a cotenant will be presumed to be in his right as cotenant and thus not adverse to the claim of ownership by his co-tenant. Condra v. Grogan Mfg. Co., 149 Tex. 380, 233 S.W.2d 565 (1950).

In Magee v. Paul, 110 Tex. 470, 221 S.W. 254 (1920), the Court said:

“ * * * the rule is sound which permits the inference that an apparent owner has parted with his title from evidence, first, of a long-asserted and open claim, adverse to that of the apparent owner; second, of nonclaim by the apparent owner; and third, of acquiescence by the apparent owner in the adverse claim.
“The rule is essential to the ascertainment of the very truth of ancient transactions.”

In Price v. Humble Oil and Refining Co., 152 S.W.2d 804 (Tex.Civ.App.-Dallas, 1941, writ ref., w. m.), the court relied on the case of Simmons v. Hewitt, 87 S.W. 188 (Court of Civil Appeals of Texas 1905, writ ref.), quoting therefrom the following:

“Appellant further contends, however, that the existence of a deed can never be taken as established by circumstantial evidence alone, in the absence of proof of some sort of possession, and that in this case proof of possession of some of the subdivisions included in the asserted deed will not be extended by construction to other distinct subdivisions not included in that possession. We cannot indorse the proposition. While it is true that the courts require an assertion of ownership coupled with some sort of possession, the principle is not analogous to possession under limitation. The idea is that there must be a distinct assertion of ownership under the alleged deed, to show that the party asserting its existence acted under it in a substantial and open way, and one which, if unauthorized, would, in the nature of things, have provoked a protest from the owner. It was therefore enought to show, in addition to the other circumstances, that the defendant took possession of part of the land included in the conveyance, and asserted ownership of the whole in himself.”

In Republic Production Co. v. Lee, 132 Tex. 254, 121 S.W.2d 973 (Tex.Com.App., 1938, opinion adopted), the Court said:

“It has long been settled in Texas that a conveyance by one cotenanl. to a stranger, or by one or more cotenants to another cotenant, purporting to convey the entire common property, when followed by actual adverse possession, amounts to a disseizin of the nonparticipating cotenant; and record of such conveyance, followed by possession, constitutes notice of the repudiation, [citing cases] There is no reason whatever why a series of deeds which taken together purport to convey all of the common estate, followed by adverse possession, should not be given the same effect. Sfi * ⅝!)

It is apparent, therefore, that Samuel Harrison Page had constructive notice of the adverse claim of the Sweeny heirs to his interest in the Keep League as a matter of law. The undisputed evidence of a long asserted and open claim to this entire tract on the part of John Sweeny and his heirs, known to Samuel Harrison Page, together with the absence of evidence of any assertion of ownership in himself, leads inevitably to the conclusion of acquiescence in that claim on the part of Page. The evidence is clearly sufficient to sustain a finding of fact of an unrecorded conveyance from Samuel Harrison Page to either John Sweeny, Thomas Sweeny, or Sophia McGrew. Masterson v. Harris County Houston Ship Channel Navigation District, 15 S.W.2d 1011, 67 A.L.R. 1324 (Tex.Com.App., 1929).

The fact that appellees and those under whom they claim may not have made such use of this particular tract of land as would be necessary to sustain a claim of title by adverse possession under the limitation statutes is not material. In all material respects the facts in this case are identical with those before the Court in Page v. Pan American Petroleum Corporation, 381 S.W.2d 949 (Tex.Civ.App.-Corpus Christi, 1964). We agree with that Court that the record “presents a situation where, in the total absence of any facts to the contrary, reasonable minds could reach no other conclusion but that the long continued and undisturbed possession and claims of title, acquiesced in by plaintiffs’ ancestor from whom they claim for over fifty years and by his descendants for another sixty years, could be explained only by the presumption of an unrecorded conveyance * * * ” Faced with such a record the Court will presume such a conveyance as a matter of law.

The judgment of the Trial Court is affirmed.


author: CLAUDE WILLIAMS, Justice.

text:
    Ralph F. HAMILTON, Appellant, v. George NEWBURY, Appellee.
    No. 16852.
    Court of Civil Appeals of Texas. Dallas.
    Feb. 3, 1967.
    Rehearing Denied March 3, 1967.

      C. Sidney McClain, Dallas, for appellant.
    Edward V. Smith, III, of Golden, Croley, Howell, Johnson & Mizell, Dallas, Eugene A. Lalonde, Sidney, Mont., for appellee.
   CLAUDE WILLIAMS, Justice.

The primary question presented by this appeal is whether a Montana court had jurisdiction to render an in personam judgment against a defaulting defendant, a Texas resident. George Newbury brought suit in the Seventh Judicial District Court of Richland County, Montana on May 22, 1964 against Ralph F. Hamilton in which he sought judgment upon a promissory note executed by Hamilton in the principal sum of $36,160, together with interest and costs. Personal service in said cause was had upon Hamilton, a resident of Texas, in Texas, on June 1, 1964. Defendant did not file an answer or make any appearance in the Montana court and thereafter on July 3, 1964 judgment by default was rendered in favor of plaintiff for the sum of $47,115.05, representing principal and interest on the note sued upon, together with costs.

This action was instituted in the district court of Dallas County, Texas by Newbury against Hamilton based upon the Montana default judgment. Defendant answered and contended, inter alia, that the Montana judgment was void and of no force and effect since the Montana court rendering such judgment had never acquired jurisdiction over him. The case proceeded to trial before the court, without the intervention of a jury, and a judgment was rendered for plaintiff in the sum of $47,115.05, together with interest and costs.

The trial court filed findings of fact summarized as follows: Prior to the execution of the note which was the basis of the Montana action, and at all times thereafter, defendant Hamilton was a nonresident of the State of Montana and at all material times plaintiff Newbury was a resident of Montana. For a period of approximately ten years prior to the execution of the note sued upon, dated May 29, 1954, plaintiff had engaged in numerous business transactions with the defendant within the State of Montana. In some of these plaintiff participated as a principal, advancing money to defendant to cover plaintiff’s participation, and in others plaintiff lent.money to defendant. The Montana action was on a promissory note dated May 29, 1954, executed by defendant Hamilton payable to the order of plaintiff Newbury, in the principal sum of $36,710, bearing interest at 3 per cent per annum, and payable two years after date, and on which a total of $550 had been paid and credited prior to the institution of suit. The note sued upon in the Montana action was silent as to place of payment, but “the parties understood that it was to be repaid at Poplar, Montana, the residence of the plaintiff.” The note of May 29, 1954 was given in renewal of a promissory note dated November 12, 1953, executed by defendant in favor of plaintiff, in the principal amount of $27,710, and further in consideration of an additional loan of $9,000 made to the defendant by the plaintiff in the spring of 1954. The note dated November 12, 1953 was executed in consideration of various loans made to defendant prior to November 12, 1953. The funds for each of the loans evidenced by the note dated November 12, 1953, were withdrawn by plaintiff in person at Poplar, Montana, from his checking account at the Trader’s State Bank in Poplar, Montana, and were sent by wire from said town to defendant outside of Montana. On November 24, 1953 the defendant pled guilty to fraudulent use of the mail and fraud in the sale of securities in the Federal District Court in Billings, Montana, arising out of the sale to Montana investors of oil and gas rights in property located in Petroleum and Teton Counties in the State of Montana. The court deferred the imposition of the sentence conditioned upon the defendant making restitution to the Montana investors in the amount of approximately $30,000 then owing. During the years of 1953 and 1954 the defendant, in Montana, made restitution to the Montana investors in the sum of approximately $61,000. Part of the funds used in making restitution to the Montana investors came from the loans made by plaintiff to the defendant, which loans were evidenced by the note on which suit was brought in the Montana action. That defendant Hamilton was personally served in the Montana action in Dallas, Texas on June 1, 1964. Such service was in compliance with the applicable Montana statutes governing service of process on nonresident defendants and was the only service had on defendant in said cause. On July 3, 1964 plaintiff recovered judgment by default against-Hamilton in the Montana action and that such judgment is a final, valid and subsisting judgment which has not been vacated or set aside in the State of Montana.

In his conclusions of law the trial court found: That the Montana judgment was valid and is entitled to full faith and credit by the courts of Texas under the Constitution and laws of the United States of America and the State of Texas; that the Seventh Judicial District Court of the State of Montana in rendering judgment against Hamilton had jurisdiction over the subject matter of the controversy and of the person of Hamilton. That the applicable statutes of the State of Montana pursuant to which Hamilton was served in Texas on the Montana suit are constitutional and that acquiring jurisdiction over him in the manner provided by said statutes did not deprive Hamilton of due process and equal protection of the law. That defendant Hamilton had such contacts within the State of Montana “in connection with said note” as to constitute a proper basis for the assertion of jurisdiction over the person of defendant based upon personal service outside of the State of Montana and that the maintenance of the suit on said note under the circumstances “does not offend traditional notions of fair play and substantial justice.” That the note sued upon in the Montana action had a substantial connection with the State of Montana.

Appellant assails the trial court’s findings and conclusions, and the judgment rendered thereon, in thirty-five points of error, but concedes that the central question is that of jurisdiction vel non of the Montana court in rendering the judgment sued upon in Texas.

Basic and well established principles of law guide us in our resolution of the question thus presented.

Art. IV, Sec. 1, Constitution of the United States, provides that full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state. The Congress of the United States has prescribed the manner in which such judgments may be proved and the effect thereof in 28 U.S.C.A. § 1738. When a plaintiff sues upon a judgment of a sister state in Texas and introduces his judgment, authenticated as provided by 28 U.S.C.A. § 1738, he thereby establishes a prima facie case and it is not incumbent upon him to show any action by way of enforcement of the foreign judgment. Gard v. Gard, 244 S.W.2d 884, Tex.Civ.App.; Houston v. Dunn, 13 Tex. 476; Ryan v. City Nat’l Bank & Trust Co., Tex.Civ.App., 186 S.W.2d 747.

The burden of attacking the judgment and establishing reasons why it should not be given full faith and credit, such as lack of jurisdiction of the person of the defendant, shift to the defendant. Mendlovitz v. Samuels Shoe Co., Tex.Civ.App., 5 S.W.2d 559; Russell v. Butler, Tex.Civ.App., 47 S.W. 406.

The landmark case on the question of exercise of jurisdiction over a nonresident in an in personam judgment, is Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, decided in 1877, in which the Supreme Court of the United States said:

“Since the adoption of the Fourteenth Amendment to the Federal Constitution, the validity of such [sister state] judgments may be directly questioned, and their enforcement in the State resisted, on the ground that proceedings in a court of justice to determine the personal rights and obligations of parties over whom that court has no jurisdiction do not constitute due process of law.”

The Supreme Court then laid down two cardinal principles: (1) A personal judgment is void if it is rendered by a court which has no jurisdiction over the defendant; and (2) if a court has no jurisdiction over a nonresident defendant, it cannot acquire jurisdiction merely by serving process upon him outside the forum.

This continued to be the law for many years but then, due to changing times and conditions, the courts in a series of decisions, have diluted the Pennoyer doctrine to some extent. In 1945 the Supreme Court of the United States in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057, said:

“Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant’s person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed 565. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”

In 1957 the Supreme Court of the United States continued the erosion of the Pennoyer doctrine in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, saying:

“Since Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, this Court has held that the Due Process Clause of the Fourteenth Amendment places some limit on the power of state courts to enter binding judgments against persons not served with process within their boundaries. But just where this line of limitation falls has been the subject of prolific controversy, particularly with respect to foreign corporations. In a continuing process of evolution this Court has accepted and then abandoned ‘consent’, ‘doing business,’ and ‘presence’ as the standard for measuring the extent of state judicial power over such corporations. * * *
“Looking back over this long history of litigation a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents. In part this is attributable to the fundamental transformation of our national economy over the years. Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.
“Turning to this case we think it apparent that the Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with that State.”

In 1958, speaking through Mr. Chief Justice Warren, the United States Supreme Court in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, slackened the speed of the trend away from the Pen-noyer doctrine when, after discussing in detail the opinion of the court in McGee v. International Life Ins. Co., supra, said:

“But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. See Vanderbilt v. Vanderbilt, 354 U.S. 416, 418, 77 S.Ct. 1360, 1362, 1 L.Ed.2d 1456. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a conseqence of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the ‘minimal contacts’ with that State that are a prerequisite to its exercise of power over him.”

The court went on to find that the facts in that case failed to reveal such minimal contacts as would give jurisdiction to the foreign state over a resident of Florida. The court concluded:

“The cause of action in this case is not one that arises out of an act done or transaction consummated in the forum State. * * * The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefts and protections of its laws. International Shoe Co. v. State of Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 159, 90 L.Ed. 95.” (Emphasis supplied.)

Our Supreme Court, in O’Brien v. Lanpar Co., Sup., 399 S.W.2d 340, applied this rule in a case involving an Illinois judgment against a Texas resident. There the Texas resident had gone to Illinois and employed O’Brien, an attorney, to institute an action in Illinois. O’Brien brought an action in Illinois to collect his attorney’s fees. The Supreme Court held that the action was one which arose out of and was a part of the very contact for which Lan-par’s agent visited Illinois. The court pointed out that the “contact was substantial rather than casual or fortuitous,” and that it was made in the State of Illinois.

Again in Nyman v. Schnitzer, Tex.Civ.App., 405 S.W.2d 120 the court upheld jurisdiction of a New York court which had awarded judgment in favor of a New York resident for dental services performed in New York. The Texas court held that there was a definite contact within the State of New York which would confer jurisdiction on the Texas resident.

The Montana “long-arm” statute which governed the validity of the Montana judgment is Montana Rules of Civil Procedure, Rule 4B(1) which authorizes out of state personal service on a nonresident defendant on “any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts: (a) the transaction of any business within this state”.

In the light of these authorities the question to be resolved is whether the promissory note sued upon in Montana in this case amounted to the “transaction of any business” within Montana. Or, stating it in the language of the United States Supreme Court in Hanson v. Denckla, supra, does this record demonstrate that appellant Hamilton purposefully availed himself of the privilege of conducting activities within Montana by the making and giving of the note sued upon, thus invoking the benefits and protections of the Montana laws. To seek a solution to this question, and especially in the light of appellant’s “no evidence” and “insufficient evidence” points of error directed toward the trial court’s findings of fact supporting the judgment, we have been required to carefully review the entire record in this case. This we have done in the light of the often repeated rule announced by our Supreme Court in In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660, and Brown v. Frontier Theatres, Inc., 369 S.W.2d 299.

A fair summarization of the material evidence revealed by this record is as follows :

Ralph Hamilton testified that the promissory note made the basis of the Montana action was executed by him, as maker, in the Lewis & Clark Hotel at Mandan, North Dakota on May 29, 1954 and that Mr. New-bury, the payee, was present with him when the note was executed and delivered in North Dakota. The note itself, introduced in evidence, is on a printed form and shows to have been in the principal sum of $36,-710, dated May 29, 1954 and payable two years after date to the order of George Newbury with interest at 3 per cent. The note contains the wording, “Payable at -.” Hamilton testified that he had previously received from Newbury the following sums of money: August 1953, $14,500; October 1953, $1,460; November 1953, $2,750; and November 10, 1953, $9,-000, making a total of $27,710. He said that on November 12, 1953 he had given Newbury a receipt for the sum of $27,710. Later, on May 3, 1954, he received an additional $9,000 from Newbury, which sum, when added to $27,710 approximated the sum of $36,710. The receipt dated November 12, 1953 has a notation signed by-George Newbury indicating that the amount of the receipt, $27,710 plus $9,000, or a total of $36,710, was evidenced by “Note of $36,710.00 given May 29th, 1954 cansells (sic) this out. George Newbury”. Hamilton testified that none of the money representing the various amounts referred to above was ever received by him from Newbury in Montana but was received in North Dakota where he was buying oil and gas leases. The receipt and note were both given Newbury in North Dakota. Hamilton related that he had not transacted or conducted any business of any kind in Montana since 1949 or 1950. He said that he and Newbury were close friends and that Newbury and his wife stayed with him and his wife in North and South Dakota a great deal of the time in 1954. He admitted that he had transacted business in Montana with Newbury in years gone by but that none of the money evidenced by the promissory note in question had been received by him prior to August 1953. Hamilton’s testimony in this regard is substantiated by the record of Newbury, in his own handwriting, which indicates the various dates and amounts shown to have been “Wired money to Ralph. Loan”.

Hamilton admitted that he had been indicted in the United States District Court, Billings, Montana Division, in connection with use of government mails to defraud, said indictment shown to have been returned by the grand jury on October 1, 1952. He also admitted that he had received a sentence of five years, November 24, 1953, but that the United States District Judge had probated the sentence upon the condition that he would make restitution to the investors “the sum of $30,000.00 now due, or approximately that amount, within the next year.” He stated that he had made partial restitution in the amount of approximately $15,000 in 1953, paying same by cashier’s checks which he had purchased in July 1953. He was positive that this money had been returned to the investors prior to the time that he had received the money from Mr. Newbury in August 1953. He further testified that he completed making restitution to the investors in the fall of 1954, the total amount of restitution being $61,800, and being money belonging to him entirely. He denied that any part of the money which came from Newbury and evidenced by the promissory note in issue went to pay off any of the restitution provision of the federal judgment against him.

Mrs. Hamilton testified that her husband had purchased cashier’s checks on July 28, 1953 in the sum of $16,800 which were used to make restitution to the various investors involved in the federal court indictment. She testified the next payments were made in October and November of 1954 in the sum of $44,000 and that all of this money came out of the personal funds of her husband. She testified that none of the money used for restitution came out of the money loaned by Newbury to Hamilton and evidenced by the promissory note in question. She testified that she and her husband were in North and South Dakota on all of the dates involved in the loans from Newbury which were eventually brought forward in the promissory note sued upon.

Newbury testified that all of the money he loaned Hamilton came from his bank in Poplar, Montana and that according to his records, which he said were accurately kept, the money was wired to Hamilton. He admitted that he was in North Dakota when the note was signed and also when he gave Hamilton the last $9,000. Mr. Newbury testified that he did not know what Mr. Hamilton used this money for. Over objection of counsel Mr. Newbury was asked and permitted to answer the following question:

“Q. The question, George, is where did you expect to be paid the money which you had lent to Mr. Hamilton ?
“A. It would be in Montana where I lived.”

A careful evaluation of the testimony admitted before the trial court leads to the definite conclusion that appellant Hamilton was successful in proving lack of jurisdiction of the Montana Court to render the judgment against him and therefore same is unworthy of full faith and credit in our courts. We believe that the testimony reveals an absence of that “minimum contact” on appellant Hamilton within the State of Montana which is made essential by the above authorities. Hamilton was not a resident of Montana; he had not transacted any business in Montana since 1950 and none of that had any connection with the promissory note sued upon; the note in question was executed in North Dakota and not payable in Montana; and he was not served with process in the State of Montana. Accordingly, the essential element of “transaction of any business within this state”, as provided by the Montana “long-arm” statute, is lacking.

Appellee, while admitting that there is no direct evidence to support his contention, earnestly argues that the circumstantial evidence supports the trial court’s finding that Hamilton utilized at least a part of the funds borrowed from Newbury to make restitution of the federal court’s judgment. We cannot agree. It is true that as a general rule the uncon-tradicted evidence from an interested witness cannot be considered as doing more than raising an issue of fact. However, this general rule is subject to the exception that when such testimony is clear, direct and positive and there are no circumstances in evidence tending to discredit or impeach such testimony it should be taken to be true, as a matter of law. Great American Reserve Ins. Co. v. San Antonio Plumbing Supply Co., Tex.Sup.Ct, 391 S.W.2d 41; Cochran v. Wool Growers Central Storage Co., 140 Tex. 184, 166 S.W.2d 904. The exception to the rule is especially true where the opposite party has the same means and opportunity of disproving the testimony, if it is not true, and fails to do so. Valley Stockyards Co. v. Kinsel, Tex.Sup.Ct, 369 S.W.2d 19; James T. Taylor and Son, Inc. v. Arlington Independent School District, 160 Tex. 617, 335 S.W.2d 371; McGuire v. City of Dallas, 141 Tex. 170, 170 S.W.2d 722. The testimony of Mr. and Mrs. Hamilton is clear, direct and positive. It is not impeached in any way or manner. In fact, much of his testimony is corroborated by the handwritten records of Newbury himself. The money used for restitution is shown to have been paid in two installments, one prior to the time Newbury loaned Hamilton the first item of money in August 1953 and the other item several months following the execution of the note in question, to-wit, October and November 1954. Newbury made no effort to refute this testimony but, as a matter of fact, testified that he did not have any idea or knowledge what Hamilton had done with the money which he loaned him.

Circumstantial evidence should not be of such a character as to admit only completely speculative conclusions. Williams v. Rearick, Tex.Civ.App., 218 S.W.2d 225. If the probative force of evidence be so weak that it raises only a surmise or suspicion of the existence of the fact sought to be established, that evidence in legal contemplation is no evidence at all and will not support a finding which comprehends the existence of a disputed fact. Joske v. Irvine, 91 Tex. 574, 44 S.W. 1059; Austin v. Neiman, Tex.Com.App., 14 S.W.2d 794. A presumption of fact cannot rest upon a fact presumed, or in other words, one presumption cannot be based upon another presumption nor an inference of fact upon other inferences. Houston Fire & Casualty Ins. Co., v. Biber, Tex.Civ.App., 146 S.W.2d 442.

We believe that the record in this connection reveals nothing more than suspicion, guess or surmise which does not amount to probative evidence sufficient to raise an issue of fact. Accordingly, we hold that there is no legal evidence in this record to support the finding and conclusion on the part of the trial court that Hamilton utilized any part of the funds evidenced by the promissory note in question to make restitution to the Montana investors growing out of the federal court judgment. Should we be mistaken in this connection we hold that the evidence is wholly insufficient to justify such finding and conclusion and sustain appellant’s points in that regard.

Appellee argues that appellant solicited loans from a Montana resident and that this is sufficient to confer jurisdiction. The record does not justify such contention. It is not demonstrated where Hamilton was when he sought the loans in question nor how he did this. The trial court found that the money was wired to Hamilton outside of Montana. The mere fact that the money may have come from a bank in Montana is not sufficient, in itself, to confer jurisdiction on a nonresident in an action of this kind.

Again, appellee relies upon the trial court’s finding that “the parties understood” that the note was to be repaid at Poplar, Montana. There is no evidence to support this finding. The only testimony relating to place of payment of the note was from Newbury. He said that it was “his understanding” that the note would be payable in Montana. There is no evidence that such unilateral understanding was ever communicated to Hamilton or that there is any mutual agreement of payment in Montana. The note itself is silent as to place of payment. “It has been said that where no place of payment is designated in the note, the maker may designate the place; otherwise, it may be paid at the maker’s place of residence, or place of business, unless there is something in the note to indicate the contrary.” 10 C.J.S. Bills And Notes, § 441, p. 964. Under the Texas Negotiable Instruments Act, Art. 5937, Sec. 73, Vernon’s Ann.Civ.St., presentment for payment of a promissory note is to be made at the place of payment, if specified in the instrument. Where no place of payment is specified and no address is given the instrument is to be presented at the usual place of business or residence of the person to make payment. See also 9 Tex.Jur.2d § 179, p. 203. It is our opinion that there is no evidence, or the evidence is wholly insufficient, to support the court’s finding and conclusion with reference to place of payment and appellant’s points with reference thereto are sustained.

Appellee points to the fact that appellee and appellant had a long history of past business dealings within the State of Montana. This, of course, is true but there is no evidence that Hamilton transacted any business with Newbury in Montana later than 1950. The note made the basis of this litigation came into being in North Dakota in 1954 and the funds represented therein came to Hamilton beginning in August 1953.

We sustain all of appellant’s “no evidence” and “insufficient evidence” points which challenge the trial court’s findings and conclusions relating to jurisdiction of the Montana court over appellant. This renders it unnecessary that we consider or pass upon appellant’s points 32, 33, 34, and 35 in which he attacks the constitutionality of the Montana statutes involved.

The judgment of the trial court is reversed and here rendered that appellee take nothing from appellant by his cause of action.

Reversed and rendered.


author: COLLINGS, Justice.

text:
    Frank EDDIE, Appellant, v. Henry C. LADWIG, Appellee.
    No. 4132.
    Court of Civil Appeals of Texas. Eastland.
    Feb. 24, 1967.
    John H. Whitaker, El Paso, for appellant.
    William L. Merkin, El Paso, for appel-lee.
   COLLINGS, Justice.

On an appeal from the Justice Court, Precinct No. 1 of El Paso County, Henry C. Ladwig recovered judgment in the County Court at Law against Frank Eddie, doing business as El Paso Auto Exchange. The judgment in the sum of $46.50 was for storage charges and steam cleaning. Frank Eddie has appealed.

The pleadings indicate that this suit arose out of a series of transactions in which appellant would take automobiles to appel-lee’s place of business to have the engines steam cleaned. It is undisputed that the charge for cleaning an engine was $3.00. Appellant had brought three automobiles to appellee to have the engines steam cleaned and after the cleaning was done only two of the vehicles were picked up by appellant although the cleaning of the third engine was fully completed. The following is the substance of the findings of fact and conclusions of law made and filed by the court:

1. That said automobile was held by Defendant and Cross-Plaintiff LADWIG for one hundred and five (105) days prior to the filing of the suit.
2. That thirty (30) days is a reasonable time for which no storage would be charged by Defendant LADWIG.
3. That storage should be charged for the period beyond thirty (30) days, at the rate of 50⅜ per day, which the Court feels is fair, reasonable, and usual in El Paso County, Texas for like storage services.
4. That Plaintiff EL PASO AUTO EXCHANGE owes $3.00 per Automobile for steam cleaning the motors of Plaintiff’s three automobiles, and that said charge is reasonable, usual and customary in El Paso County, Texas for like services.
5. That no express written contract was entered into by the parties, and that they had no agreement for storage of automobiles prior to the instance in question.
6. That after thirty (30) days an implied contract arose for the reasonable cost of storage.
7. That Defendant LADWIG was not in the storage business.
8. That Plaintiff EL PASO AUTO EXCHANGE had left other vehicles with Defendant LADWIG at his place of business for as long as two weeks without charging for storage.
9. That nothing was mentioned as to storage charges between the parties at any time, except in a letter written by Defendant to Plaintiff, wherein he states normal charges would be made for storage.
10. That Defendant LADWIG was not holding said vehicles in question as security for the debt on the repairs.
11. That defendant LADWIG did refuse to accept $9.00 tendered to him by Plaintiff.
CONCLUSIONS OF LAW
The Court finds that an implied contract arose by Plaintiff EL PASO AUTO EXCHANGE’S action in leaving said automobile on the Defendant LAD-WIG’S premises for more than thirty (30) days, even though no express agreement was entered into between the parties.

As above indicated, the court found that the automobile in question was kept by appellee 105 days prior to the filing of this suit and that after 30 days' an implied contract arose for the reasonable cost of storage thereon. We must presume that these findings had support in the evidence. No statement of facts has been filed and in this state of the record we must presume that evidence fully justifies the findings made and the judgment rendered. Hursey v. Thompson, 141 Tex. 519, 174 S.W.2d 317 (1943); Howell v. First Federal Savings and Loan Association of New Braunfels, 383 S.W.2d 484, (Ct.Civ.App.1964, ref. n.r.e.).

We overrule appellant s points urging that the court erred in finding as a matter of law that no notice of intent to charge storage and no notice that the car was ready for delivery was necessary. The court made no specific finding concerning notice that the car was ready or that appel-lee intended to charge storage. What the court did find was that there was an implied contract for appellant to pay the reasonable cost of storage of the automobile after 30 days. We must presume that the evidence supports such finding. Appellee was entitled to recover upon the implied contract. 61 C.J.S. Motor Vehicles §§ 725, 868; 24A.L.R. 964.

The findings of fact support the judgment. No error is shown.

The j'udgment is affirmed.