author: FRASER, Chief Justice. PRESLAR, Associate Justice.

text:
    Lora Jean THOMAS et al., Appellants, v. TRAVELERS INSURANCE COMPANY, Appellee.
    No. 5917.
    Court of Civil Appeals of Texas. El Paso.
    Dec. 27, 1967.
    Rehearing Denied Jan. 24, 1968.
    Huff St Bowers, and Robert W. Gauss, Lubbock, for appellants.
    Turpin, Smith, Dyer, Hardie St Harman, Max Osborn, Lawrence L. Fuller, Midland, for appellee.
   OPINION

FRASER, Chief Justice.

This is a workman’s compensation case in which a widow brought suit in her own behalf and in behalf of her children for death benefits. The case was tried to a jury and, after the plaintiff rested her case, the court granted defendant’s motion to remove the case from the jury and entered judgment that the plaintiff take nothing.

Plaintiff-appellant, in her two points of error, alleges that the trial court erred in removing the case from the jury and holding as a matter of law that plaintiff-appellant take nothing.

It appears that the deceased and his family were separated and that he was alone in his trailer-house, which was not located on the premises of his employer, when a fire occurred. The widow said she was two blocks away when she saw the fire and none of the children were present, so that there was no testimony as to what deceased was doing or as to how and when the fire started or what its origin was. We believe the trial court was correct in granting the motion for instructed verdict for the following reasons.

Article 8309, section 1, T.R.C.S., dictates that the term “injury” (after defining certain excluded injuries) shall include all other injuries having to do with and originating in the work, business, trade or profession of the employer, received by the employee while engaged in or about the furtherance of the affairs or business of his employer, whether on the employer’s premises or elsewhere. In the case before us, there was no evidence whatever except that the deceased was in his own trailer when it caught fire and he died therein. Appellant maintains that her husband had a telephone in the trailer, a removable two-way radio in the car, that he was on call 24 hours of the day and therefore died within the provisions of the compensation statutes. We do not believe this position can be maintained because there is no evidence, as stated earlier, that the deceased was doing anything but occupying his own trailer. There have been many cases pointing out the necessity that deceased or claimant, at the time of his injury or death, must have been in the scope of his employment and engaged in or about the furtherance of the affairs or business of his employer. In the case of Wallace v. Texas Indemnity Ins. Co., 94 S.W.2d 1201 (Tex.Civ.App., wr. ref.), wherein an individual living in the bunkhouse, and apparently while washing some clothes, was burned to death when the bunkhouse caught on fire, this court stated: “If Wallace, at the time he received the burns which caused his death, was not engaged in the work of his employer, then his widow and daughter could have no cause of action against appellee.” There have been many other cases since, including Liberty Mutual Insurance Co. v. Preston, 399 S. W.2d 367 (Tex.Civ.App., ref., n. r. e.) holding that the claimant must establish that the injury was of a kind and character that had to do with and originated in the employer’s work, business, trade or profession. In Loyd v. Texas Employers Insurance Association, 280 S.W.2d 955 (Tex.Civ.App., wr. ref.) suit was brought to recover for injuries sustained by an embalmer who, under his employment, was subject to call at all times and who, while standing on a ladder at home, sustained an injury when the ladder slipped as he was attempting to go and answer his telephone. In sustaining summary judgment for the defendant, the court said:

“It is a cardinal rule pronounced many times in this state that to sustain a judgment for a claimant the evidence must show that his injury occurred during the course of his employment or is so intimately related to his employment as to be a part of it. In our opinion, the evidence wholly fails to show that on the occasion of appellant’s injury he was doing anything in furtherance of his employer’s business. The evidence positively shows that he was painting his house at the time of the injury and while on vacation. It is true that he was injured while getting down from the ladder to answer the telephone, but there is no evidence in the record that he ever answered it or that any one answered it for him, nor is there any evidence that the call was from his employer. The call could have been from some friend or a member of his family, or even a ‘wrong number.’ ”

We think this case is very similar to the one before us as there is no evidence whatever in our case to sustain the appellant’s position except that the deceased was in his own trailer-house which had a telephone, and he was subject to call 24 hours of the day. There is no evidence that the injury was accidental. There is nothing to connect the fire with the duties and obligations of the deceased. As to his being on call, Mr. Crowell, the safety engineer for the employer, FWA Drilling Company, stated that the company’s tool pushers (of which the deceased was one) were subject to 24-hour call, but when they were not on duty they were free to carry on their own business and could do whatever they wanted to do.

Appellant cites us to Texas Employers Ins. Ass’n v. Monroe, 216 S.W.2d 659 (Tex.Civ.App., n. r. e.) which was a tool pusher case. The court in that case stated that Monroe was a tool pusher who was on continuous duty 24 hours a day and subject to call at all times. The court further pointed out that his duties, which included keeping the well operation in supplies, required him to make frequent trips between Houston and Saratoga. The court pointed out that when he was found dead in the Houston canal, this was on the normal route between Saratoga and Houston and that he had not deviated from the normal route. The court in that case also pointed out that the cases bearing on this problem are not all alike, but the law contemplates that the employee’s duty be continuous. It must be recalled that, in the case before us, the official of the deceased’s employer stated that deceased was on call, but when not on duty was free to carry on his own business and could do whatever he wanted to.

We must and do hold that here the plaintiff-appellant failed to produce any proof or evidence that the deceased met his death in a manner originating in the work, business, trade or profession of the employer which was received while engaged in or about the furtherance of the affairs or business of his employer. All that could be proved, or was proved, was that the deceased was in his own home when it burned; that he was subject to call 24 hours of the day, and that no one knows how the fire started or its origin. This brings up the fact that the proof is lacking that the fire was accidental and the death resulting therefrom accordingly accidental.

For the court to have submitted this case to the jury on the amount of proof presented would have been to invite the jury to indulge in pure speculation without proof. There was no way to raise a fact issue upon which a jury could determine that Mr. Thomas, the deceased, sustained accidental injuries resulting in his death, or that at the time of receiving such injuries he was in the course of his employment, and that the injuries so received were of a kind and character having to do with and originating in the work, business, trade or profession of his employer and that the injuries and/or death occurred while he was engaged in or about the furtherance of the affairs or business of his employer. Appellee points out that when deceased was in his trailer, he was not subjected to any greater risk than any other employee who had worked on that same day and then proceeded home after the completion of his tasks; and appellee also points out with emphasis that the record is totally devoid of any evidence indicating that on the night of the fire Mr. Thomas had performed, or was in the process of performing, any work whatsoever in the furtherance of the affairs or business of FWA Drilling Company.

Therefore, we must hold that plaintiff-appellant was unable to discharge the burden required of claimants under the workmen’s compensation laws and, as a result, presented no jury question and left thé court with no alternative but to grant an instructed verdict.

Appellant’s points, therefore, are overruled and the decision of the trial court is affirmed.

DISSENTING OPINION

PRESLAR, Associate Justice.

I respectfully dissent. I do not disagree with the proposition of law which the majority applies to this case; that is, that an injury, to be compensable, must have been received by the employee while engaged in or about the furtherance of the affairs or business of his employer, for the controlling law is the statute itself. Nor is my dissent based on any failure to give the Texas Workmen’s Compensation law a liberal construction, for cases should be decided on specifics and not generalities. But I am convinced that a jury question is presented by the record in this case and that the court erred in taking the case away from the jury.

In determining whether the court erred in withdrawing this case from the jury and entering judgment for the appellee, this court must look to the testimony most favorable to appellant’s contention and reject all that tends to disprove it. Hamilton v. Liles, 404 S.W.2d 342, Tex.Civ.App., ref., n. r. e.

This is not the ordinary case of one injured outside the regular hours of his employment, away from the employer’s premises, or while going to and from work, or while on call to come to the place of work. This man, in his capacity as a tool pusher, had a work situation peculiar to the drilling of an oil well, which distinguishes it from the decided cases relied on by the majority (excepting the Monroe case, which reached a result contrary to that of the majority).

By the chain of command on a drilling rig, as stringent and rigid as the military, the tool pusher is in charge of the drilling operation of that well around the clock. Under him are three crews, each headed by a driller, and each of which works an eight-hour shift doing the manual labor. The evidence is that such was the case on this well, and that the tool pusher was under the drilling superintendent who was in charge of all rigs. This tool pusher was as much in charge, and on duty, as to one crew as the other, regardless of the hour of the day. The safety engineer for the employer testified that the tool pusher was in charge; he was the boss of that rig, and the drillers and their crews worked under him; that he was in charge 24 hours a day, free to some extent to take off a few hours, but should let the drillers know where he could be reached. As to the statement attributed to this witness by the majority, he was asked:

“Q I gather you mean that a tool pusher should keep in touch with his rig, is that correct ?
A Yes, but at the same time a tool pusher, he is free to carry own his own business * *

This witness also testified that the tool pusher could go to the filling station, Sunday school, dancing, barber shop, movies, stop off for coffee (or a drink if not in the company car), but should let somebody know where he could be reached at all times, and that being “out-of-pocket” too many times would get him in trouble with his employer. As noted by the majority, the employer furnished the tool pusher with a car, and the employer supplied a two-way radio, which was mobile to the extent that it could be used both in the car and in the trailer house where he lived (and died). By means of the two-way radio the deceased could call the drillers and crews at the rig and they could call him. The same was true as to the Midland office of the employer, FWA. The safety engineer, speaking of tool pushers and this two-way radio, testified: “Sometimes they have a separate unit that can be put in the home, they don’t ever take it to have coffee. If they are going to spend the night at home, they have a plug in deal, I don’t know exactly how to explain it, but there is a separate unit that can be put in the house and connected to the automobile and they can receive calls.” The widow and daughters of the deceased employee testified that he had such a unit, which at times he removed from the car and took into the house, and that the employer paid for the telephone in their trailer house except for their personal long-distance calls. They also testified that the two-way radio was a constant companion of the deceased; that “he kept that radio with him at all times”. It was not in his car when the fire occurred and, under the evidence, I think a jury could infer that it was in the trailer house. The widow and daughters also testified that the deceased worked at home for his employer, used the telephone a lot ordering supplies and oil and things for the rig; that he received calls at all times of the day and night and received calls “when something happened at the rig”. A daughter testified that he was “never at home, and when he was they were always calling him”; that he was always calling or being called, drillers or roughnecks or somebody with FWA. Another daughter testified that most of the time he stayed at a trailer house at the rig, and when he came home he was usually called back; that this happened frequently; that there were never long periods without calls to go back to the rig, order some parts or take care of company business. She was asked, “Was there any such thing as any time off when he was actually, even though he was there at the house, that he was off duty?” and she answered, “No, sir.”

On the trial of this cause all matters were stipulated except scope of employment and lump sum payment, and the ap-pellee-defendant’s motion to withdraw the case from the jury was based on insufficient evidence to present a question that the deceased received the injuries which caused his death while in the scope of his employment. I think the evidence, coupled with matters of common knowledge, present such a question. As indicated by the majority, there is no direct evidence that the deceased was at the time of his death, or immediately prior thereto, performing any work in the furtherance of the affairs or business of FWA Drilling Co. It is readily apparent that the deceased was in a different category from the “on call” case of an embalmer, and others similarly situated, who are on call to come to the place of employment, there to perform services for the employer. This man did not have to be any particular place to perform his services; his place of performing was beside the two-way radio and the telephone. His lips are sealed as to what he was doing, but he was beside the telephone and it can be inferred that he was beside the radio. It is a matter of common knowledge that in the drilling of an oil well there is an ever-changing work situation. As the drill bit penetrates the various formations, different tactics, different supplies, in different quantities, are called for. Those doing the manual tasks called on the tool pusher in this case for supplies and instructions to meet this ever-changing situation. The crews were each at the well only eight hours of the twenty-four, but one man — the tool pusher — was employed to keep abreast of all that went on twenty-four hours of the day to coordinate the work, solve the problems and see that machinery, services and supplies were available as needed. The employer made the tool pusher always available, everywhere, whenever his rig was running, and received the benefits twenty-four hours per day. The deceased was at home, but a man does not step out of the scope of his employment when he pauses to take a drink of water or do other things contemplated to be necessary for a human being when he is employed. As said in Southern Surety Co. v. Shook, Tex.Civ.App., 44 S.W.2d 425: “When a man is employed to work at any job, the fact that he is a human, with ordinary human habits and requirements, is necessarily taken into consideration.” (Cited in Associated Indemnity Corp. v. Bush, 5 Cir., 201 F.2d 843, a .case in point here.) Of necessity, one on twenty-four hour duty might retire to his home. That would be expected by the employer and was known to the employer who, in fact, made provision to continue receiving his services during periods of rest by furnishing the portable two-way radio and the telephone.

Viewed in the light which it must be on appeal, the evidence presents a question for jury determination, and I would reverse and remand the case for submission to the jury.


source: Caselaw Access Project

author: NORTHCUTT, Justice.

license: Public Domain

text:
    COMMERCIAL UNION INSURANCE CO. OF NEW YORK, Appellant, v. Karen Sue PRYOR et al., Appellees.
    No. 7759.
    Court of Civil Appeals of Texas. Amarillo.
    Dec. 11, 1967.
    Rehearing Denied Jan. 8, 1968.
    Underwood, Wilson, Sutton, Heare & Berry, Amarillo, Hardie, Grambling, Sims & Galatzan, El Paso, for appellant.
    Gibson, Ochsner, Harlan, Kinney & Morris, Amarillo, Lovell, Lyle & Cobb, Dumas, for appellees.
   NORTHCUTT, Justice.

This present action was brought by Commercial Union Insurance Co. of New York under the Uniform Declaratory Judgment Act, Art. 2524 — 1, Vernon’s Ann.Tex.Civ. St. On April 27, 1965, in a collision between motor vehicles which they were driving, Charles A. Pryor was killed and Billy Pat McGuire was severely injured. Karen Sue Pryor, the wife of Charles A. Pryor, individually and as next friend of James Austin Pryor, a minor, and Curg P. Pryor and Hattie Copeland Pryor, as plaintiffs, brought suit in Cause No. 42009 against Billy Pat McGuire and Leonard C. Traylor. James Austin Pryor was the minor son of Charles A. Pryor, and Curg P. Pryor and Hattie Copeland Pryor were the surviving parents of Charles A. Pryor. The plaintiff alleged certain negligent acts of Billy Pat McGuire causing the death of Charles A. Pryor; then alleged that at all times pertinent thereto and on the occasion in question Billy Pat McGuire was an agent, servant and employee of Leonard C. Traylor, and that the acts of Billy Pat McGuire were in law and in fact the acts of Leonard C. Traylor, employer of Billy Pat McGuire. On July 8, 1965, in Cause No. 1000 in the County Court of Moore County, Texas, in the Estate of Charles A. Pryor, deceased, it was ordered that Karen Sue Pryor be and was thereby authorized as community administrator to control, manage and dispose of the community property as said survivor of Charles A. Pryor, deceased, in accordance with the Texas Probate Code.

The original suit filed by Karen Sue Pryor in Cause No. 42009 against Billy Pat McGuire and Traylor was filed by Lovell & Lyle as attorneys of Mrs. Pryor. The Phoenix of Hartford Insurance Company was the insurer as to damages caused by the defendants, McGuire and Traylor, and was willing to pay in behalf of McGuire and Traylor the sum of $10,000.00. Phoenix of Hartford employed their own attorneys to represent it in Cause No. 42009. Those same attorneys, as attorneys for the McGuires, on December 28, 1965, answered contending the collision in question and any damages resulting therefrom was proximately caused by the negligence of Charles A. Pryor and filed a counterclaim in Cause No. 42009 seeking to recover damages against Karen Sue Pryor as community survivor of the marital partnership and community estate of Karen Sue Pryor and Charles A. Pryor.

On December 28, 1965, a Compromise Settlement Agreement was made and entered into. This agreement was made and entered into by and between Karen Sue Pryor, individually, and as community survivor of the marital partnership and community estate of Karen Sue Pryor and Charles A. Pryor, deceased, and as next friend for James Austin Pryor, a minor, and their attorneys as one party; and Phoenix of Hartford, Billy Pat McGuire and wife, Linda McGuire, and their attorneys, as other parties, since they all took part in the settlement and had it approved by the trial court. In part, that Compromise Settlement Agreement is as follows:

“WHEREAS, bona fide disputes and controversies exist between the parties, both as to liability and the amount thereof, if any, and by reason of such disputes and controversies the plaintiffs desire to compromise and settle all claims and causes of action of any kind whatsoever which they have or might have arising out of said accident; and
WHEREAS, The Phoenix of Hartford Insurance Company is willing to pay, in behalf of the defendants, the sum of TEN THOUSAND AND 00/100 DOLLARS ($10,000.00) in compromise and settlement of such claims, with said sum to be apportioned and divided between the plaintiffs in accordance with the final judgment of the Court in this cause;
NOW, THEREFORE, for the sole consideration of TEN THOUSAND AND 00/100 DOLLARS ($10,000.00) paid to plaintiffs by The Phoenix Insurance Company of Hartford, in behalf of defendants, in accordance with the provisions of said final judgment entered by the Court in this cause, the payment of which is hereby acknowledged, we, KAREN SUE PRYOR, individually, as community survivor of the marital partnership and community estate of KAREN SUE PRYOR and CHARLES A. PRYOR, deceased, and as next friend for and in behalf of JAMES AUSTIN PRYOR, a minor, CURG P. PRYOR AND HATTIE COPELAND PRYOR, have this day released and by these presents do release, acquit and forever discharge BILLY PAT MCGUIRE, LEONARD C. TRAY-LOR, The Phoenix of Hartford Insurance Company, their agents, servants and employees, and all persons, natural or corporate, in privity with them or any of them, from any and all claims of any kind whatsoever, at common law, statutory or otherwise, which we have or might have, known or unknown, now existing or that might arise hereafter, directly or indirectly attributable to the aforesaid accident and death; it being intended to release all claims of any kind which we might have, whether asserted in this suit or not.
For the same consideration we agree to indemnify and save harmless the parties released hereby from any and all claims of any kind whatsoever which may or might be asserted by any other person by reason of the injuries to and death of CHARLES A. PRYOR.
It is expressly agreed and understood that the terms hereof are contractual and not merely recital, that the payment of the aforesaid sum is in compromise and settlement of disputed claims and does not constitute an admission of liability, all liability being expressly denied.
It is further understood that BILLY PAT McGUIRE and wife, LINDA Mc-GUIRE, have asserted counter-claims for damages by reason of the injuries sustained by BILLY PAT McGUIRE in said collision; that said counter-claim has been severed by order of the Court in this cause and shall remain pending as a separate cause on the docket of the Court; that this compromise and settlement and the judgment entered in pursuance hereof shall in no way affect or prejudice such counter-claim or any other cause of action which may be asserted by any person by reason of the injuries sustained by BILLY PAT McGUIRE in said collision, all such claims and causes of action being expressly protected and reserved.
It is further understood and agreed that this compromise settlement agreement, the fact of settlement and the judgment entered in pursuance hereof shall never be used or admissible in evidence against any of the parties released hereby.”

On the same day the Settlement Agreement was entered into and the counterclaim of the McGuires was filed and citation issued and served, the attorneys for the McGuires filed a motion to sever their counterclaim and the same was ordered severed by order of the court, and such order was approved by all attorneys representing all the parties. All of the instruments, including the judgment of the court approving the Settlement Agreement, were executed on December 28, 1965.

On December 28, 1965, in Cause No. 42009, the McGuires had citation for service upon Mrs. Pryor issued and delivered to the sheriff for service at 2:15 P.M. and service was had five minutes later there in the courthouse. Mrs. Pryor thereafter delivered that citation to Commercial Union Insurance Co. of New York as the insurer of Charles A. Pryor and Commercial Union delivered it to its attorneys. Under this record, that was the first time that Commercial Union was in any way connected with this matter. When the citation was delivered to the attorney for Commercial Union, he wrote to Mrs. Pryor as follows:
“The citation which was served upon you in the above suit has reached us for attention, and we propose to file an answer on your behalf. We find it necessary to do so under a reservation of rights, that is to say, we must reserve the right to deny any responsibility at all either to defend you or to pay any judgment which might be rendered against you if ultimately we are driven to the conclusion that our client has no responsibility. Since you were represented by counsel of your own choice in the prosecution of your suit, I am sending them also copies of this letter, so that they likewise may be fully advised of the problem.
In making settlement of your own suit founded on Mr. Pryor’s death, you executed a compromise settlement agreement which included this paragraph:
‘It is further understood and agreed that this compromise settlement agreement, the fact of settlement and the judgment entered in pursuance hereof shall never he used or admissible in evidence against any'of the parties released hereby.’
Our problem is with respect to whether this operates to cut us off from a defense which otherwise we would have against Mr. McGuire. If it does, my judgment would be that it also operates to cut you off from protection under your insurance policy.
The questions with respect to which we must reach some conclusions are:
(a) Whether Mr. McGuire’s suit against you was a compulsory counterclaim to your suit against him;
(b) Whether, except for the above quoted language, the settlement made with you would have operated as a defense to McGuire’s suit against you; and
(c) Whether the instrument you have executed cuts us off from that defense.
These questions we will pursue as quickly as we reasonably can; and, when we have reached a final conclusion, we will report it to you and your attorneys. For the present, we merely reserve the right to withdraw from the case and to deny liability if in truth the effect of what has happened appears to be to cut you off from insurance protection.
Note also, please, that the cross action filed against you claims damages in the amount of $515,000.00. Independent of the possibility suggested above, this damage demand is many times your policy limits and you will, I think, want to avail yourself of the right to be represented by independent counsel of your own choice.
The answer which we propose to file on your behalf will be filed during the present week and, when this is done, we will mail copies thereof to the attorneys who represented you in the prosecution of the suit.”

On April 26, 1966, Commercial Union Insurance Co. of New York, as plaintiff, filed this suit in Cause No. 43204 against Karen Sue Pryor, individually and as qualified community survivor of her deceased husband, Charles A. Pryor, Billy Pat McGuire and wife, Linda McGuire, praying that the plaintiff do have declaratory judgment relief with respect to the questions involved and accordingly sought a determination by the court of the matters there involved and in part pleaded as follows:

“During the lifetime of Charles A. Pryor, deceased husband of the defendant, Karen Sue Pryor, plaintiff had issued a policy of liability insurance which, within the limits there stated, afforded liability coverage to the said Charles A. Pryor. Defendant, Karen Sue Pryor, having been served with citation with respect to the counterclaim and cross action of defendants, Billy Pat McGuire and wife, Linda McGuire, delivered the citation so served upon her to plaintiff, which answered on her behalf through the attorneys whose names are subscribed to this petition. Before filing such answer, however, plaintiff, by its said attorneys, addressed to the defendant, Karen Sue Pryor, a reservation of rights letter in which, pointing out to her the possibility that the effect of the execution by her of the above described release and judgment might be to cut her off from insurance coverage, it reserved the right to withdraw from the case and to deny liability if in truth the effect of what had happened appeared to be to cut her off from insurance protection. Such reservation of rights letter was actually received by the defendant, Karen Sue Pryor, certified mail, return receipt requested, January 18, 1966, and before the filing of an answer on her behalf.

VI

Except as the quoted provisions of the release and judgment may have a contrary effect, the settlement of the suit brought by the defendant, Karen Sue Pryor, against the defendant, Billy Pat McGuire, operates under the law to discharge the defendant, Karen Sue Pryor, from liability to the defendants, Billy Pat McGuire and wife, Linda McGuire, and to preclude the continued prosecution by the defendants, Billy Pat McGuire and Linda McGuire, of what remains in said suit No. 42,009. This is because
(a) whoever paid the settlement figure, defendants, Billy Pat McGuire and Linda McGuire, participated in the settlement in that the settlement was made by the attorneys representing the defendants, Billy Pat McGuire and Linda McGuire, and the action of the attorneys was in law the action of said defendants,
(b) the counterclaim and cross action was a compulsory counterclaim and cross action under the Texas Rules of Civil Procedure, and
(c) it did not lie within the power of the court to sever for separate trial, without prejudice, a compulsory counterclaim.
Pleading on behalf of the defendant, Karen Sue Pryor, in what remains of said suit No. 42,009, plaintiff has urged the settlement as a defense to the McGuire demand. If, though, the quoted provisions of the release and judgment be valid and effective to bar the defendant, Karen Sue Pryor, and through her the plaintiff, from asserting the settlement as a defense to the McGuire demand, then the defendant, Karen Sue Pryor, has under the law and the terms of the policy cut herself off from coverage under plaintiff’s policy and plaintiff has no obligation either to defend the counterclaim or cross action brought against the defendant, Karen Sue Pryor, or to pay any recovery which may be decreed against her and in favor of the defendants, Billy Pat McGuire and Linda McGuire.
VII
The availability to the defendant, Karen Sue Pryor, of the settlement as a defense to the remaining suit against her can be determined in the pending suit No. 42,009, but the effect of the quoted provisions of the release and judgment as discharging plaintiff from responsibility either to defend or to pay cannot be determined in said pending suit, and accordingly plaintiff properly seeks relief under the Uniform Declaratory Judgment Act.

VIII

Accordingly, plaintiff seeks a determination by the court

(a) that, but for the execution of the release and judgment, the settlement of the suit brought on behalf of the defendant, Karen Sue Pryor, would operate as a defense to the demand now asserted against her by the defendants, Billy Pat McGuire and Linda McGuire,
(b) whether such defense still exists, despite the release and judgment, and
(c) that, if the release and judgment operate to deny the defense, it be decreed that plaintiff is thereby discharged of and from all responsibility under its policy either to defend the counterclaim maintained against the defendant, Karen Sue Pryor, or to pay any recovery which might be decreed in favor of the defendants, Billy Pat McGuire and Linda McGuire.”

The same attorneys representing Mrs. Pryor and Mr. and Mrs. McGuire in all these proceedings filed general denial herein. Judgment was entered that plaintiff was denied all relief sought by it. From that judgment, plaintiff perfected this appeal.

In this case at bar, there was an automobile accident in which one man was killed and the other severely injured. In a suit for damages as to the nature here involved, the main and controlling issue to be determined was whose negligence caused the accident. The identical facts and issues that were involved in Cause No. 42009 are the same facts and issues that would have to be determined in the cross action suit. It is stated in Hayes v. Norman, Tex.Civ. App., 383 S.W.2d 477, n. r. e., as follows:

“(2) In order for a severance to be proper there must be more than one cause of action involved in the controversy, the severed cause must be one that would be the proper subject of a lawsuit if independently asserted, and the cause of action severed must not be so interwoven as to involve the same identical facts and issues nor, in certain instances, relate to the same subject matter as the cause from which it is severed. Hall, Severance and Separate Trial in Texas. 36 Texas Law Review 339 (1958), and cases therein cited.”

It is to be noticed in this case that the settlement was made in behalf of Karen Sue Pryor, individually and as community survivor of the marital partnership and community estate of Karen Sue Pryor and Charles A. Pryor, deceased. The counterclaim on cross action was against Karen Sue Pryor in that same capacity. All of these transactions in the settlement and the proceedings in connection therewith were known by the McGuires and their attorneys, and they caused or approved the settlement to be entered and secured a release from the community estate of Karen Sue Pryor and Charles A. Pryor. After Mrs. Pryor originally filed suit No. 42009, individually and as next friend for others and before any other action was had in said suit, she was appointed community administrator. The McGuires filed their cross action in that suit against Karen Sue Pryor, individually and as community survivor of the marital partnership and community estate of Karen Sue Pryor and Charles A. Pryor, deceased, and citation therein was duly issued and served on Mrs. Pryor as community survivor. Consequently, all of the parties involved in the original suit No. 42009 as to the negligence of the party causing the damage were brought into that suit.

In this particular action, the trial court held as a matter of law that the claim of Mr. and Mrs. McGuire for damages resulting from the collision of April 27, 1965, was not a compulsory counterclaim under Rule 97(a) of the Texas Rules of Civil Procedure and was not barred or affected in any manner by the settlement and judgment in Cause No. 42009. Rule 97(a) provides as follows:

“(a) Compulsory Counterclaims. A pleading shall state as a counterclaim any claim within the jurisdiction of the court, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.”

It is stated in Heights Funeral Home v. McClain, Tex.Civ.App., 288 S.W.2d 839, n. r. e., as follows:

“(1, 2) The rule just quoted contemplates situations where the primary parties — the cross-plaintiff and at least one cross-defendant — are already before the court as parties to the action. It does not contemplate a situation where no cross-defendant is a party to the action and one can be brought in only with leave of the court and for such purposes only as the court may permit. The latter situation is governed by Rule 38(a), supra.”

It is also stated in Robertson v. Melton’s Estate, Tex.Civ.App., 306 S.W.2d 811, writ refused, as follows:

“We think Rule 97(a) is inapplicable, since Mrs. Melton and her son sued appellant in their individual capacities and appellant had no cause of action against either of them which he could have asserted by way of counterclaim. The Rule, itself, is as follows:
“ ‘(a) Compulsory Counterclaim. A pleading shall state as a counterclaim any claim within the jurisdiction of the court, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.’ (Emphasis added.)
“Appellant makes no pretense to a cause of action against Mrs. Melton, herself; he sues her only in her representative capacity as community administra-trix. And the record does not disclose that during pendency of her suit against him he could have sued her in her representative capacity, even if he had wished to do so. It is silent as to when she qualified as community administratrix.”

See also Stringer v. Munnell, Tex.Civ. App., 390 S.W.2d 484, writ refused.

After a question of law or an issue of fact has been litigated and adjudicated in a court of competent jurisdiction, the same matter cannot be relitigated in a subsequent suit between the same parties or those in privity with them. Swilley v. McCain, 374 S.W.2d 871 (Sup.Court).

The McGuires had full knowledge, and through their attorneys, approved the settlement whereby the Phoenix Insurance Co. of Hartford, in behalf of the McGuires and Traylor, paid $10,000.00 to the Pryors and caused a release to be issued by Karen Sue Pryor, individually and as community survivor of the community estate of Karen Sue Pryor and Charles A. Pryor. When McGuires requested and secured a severance of the cross action in the original suit, that was a withdrawal of their counterclaim in that suit and they then had no counterclaim filed as they were required to do under Rule 97(a). Beach v. Runnels, Tex.Civ.App., 379 S.W.2d 684, writ refused; Harris v. Jones, Tex.Civ.App., 404 S.W.2d 349, writ refused; Stringer v. Munnell, Tex.Civ.App., 390 S.W.2d 484, writ refused.

We are of the opinion and so hold that since the estate of Charles A. Pryor was brought into this suit No. 42009 and a recovery had therein with the consent of the McGuires, in favor of the plaintiffs in the sum of $10,000.00, and a release by Karen Sue Pryor, individually and as community survivor of the marital partnership and communty estate of Karen Sue Pryor and Charles A. Pryor, and McGuires had that settlement approved by the trial court, that was a settlement as against the Charles A. Pryor estate. The McGuires had no cause of action against Mrs. Pryor only as community survivor of the community estate of Charles A. Pryor. Hayes v. Norman, Tex.Civ.App., 383 S.W.2d 477, n. r. e., Stringer v. Munnell, Tex.Civ.App., 390 S.W.2d 484, writ refused; Robertson v. Melton’s Estate, Tex.Civ.App., 306 S.W.2d 811, writ refused.

We are of the further opinion under this record, and so hold, that the court erred in refusing declaratory judgment in favor of the Commercial Union Insurance Co. of New York and in holding as a matter of law that the claim of Mr. and Mrs. McGuire for damages resulting from the collision of April 27, 1965, was not a compulsory counterclaim under Rule 97(a), Texas Rules of Civil Procedure and was not barred or affected in any manner by the settlement and judgment in Cause No. 42009. We are further of the opinion that when Mrs. Pryor, as survivor of the community estate, made and entered into the above mentioned agreement without the knowledge or consent of Commercial Union she released said company of any claims she might have had under the policy issued to Charles A. Pryor.

Judgment of the trial court is reversed and judgment here rendered that Commercial Union Insurance Co. of New York is hereby discharged of and from all responsibility under its policy to defend the counterclaim against Karen Sue Pryor, and is hereby discharged from paying any recovery which might be decreed in favor of the defendants, Billy Pat McGuire and Linda McGuire. Judgment of the trial court is reversed and rendered.


author: NYE, Justice.

text:
    Ned MADDOX, Appellant, v. Franklin FLATO and Flato Realty Investments, Appellees.
    No. 270.
    Court of Civil Appeals of Texas. Corpus Christi.
    Dec. 28, 1967.
    Rehearing Denied Jan. 25, 1968.

      Roger L. Turner of Yarborough, Yar-borough & Johnson, Dallas, for appellant.
    Richard A. Hall, of Branscomb, Gary, Thomasson & Hall, Corpus Christi, for appellees.
   OPINION

NYE, Justice.

This is a suit to recover a commission brought by Ned Maddox, plaintiff, against defendants Franklin Flato and Flato Realty Investments. Plaintiff alleged that the defendants orally agreed to pay for his services rendered in connection with the purchase by Flato Realty Investments of all of the stock of the Main and Akard Investment Corporation. The defendants filed a motion for summary judgment based upon Art. 581-34, Vernon’s Ann.Tex.Rev. Civ.Stat. of “The Securities Act” which forbid the maintenance of a suit for a commission by any person not a license security dealer, except under certain exempt transactions as set forth in Art. 581-5 and 600a, Sec. 3, Tex.Rev.Civ.Stat.Ann. of “The Securities Act”. Plaintiff filed a motion for partial summary judgment contending that the transaction in question was an exempt one under “The Securities Act” and for which a license is not required as a prerequisite to suit. It was undisputed that the plaintiff was not licensed as either a real estate or a securities dealer or salesman. The trial court sustained defendants’ motion for summary judgment and plaintiff has perfected his appeal to this Court.

Where a motion for summary judgment has been granted we accept as true all evidence of the party opposing the motion which tends to support such party’s contention and give him the benefit of every reasonable inference which properly can be drawn in favor of his position. Great American R. Ins. Co. v. San Antonio Pl. Sup. Co., 391 S.W.2d 41 (Tex.Sup.1965); McDonald Texas Civil Practice, Vol. 4, § 17.26, p. 1395 and authorities cited therein.

The events leading up to the filing of this cause of action began in early 1962 when the Board of Trustees of the Texas Presbyterian Foundation met to consider among other things a proposal to purchase the Main and Akard Investment Corporation, hereinafter called Corporation. Franklin Flato was at that time a member of the Board of Trustees. The Foundation, through its managing director, Mr. Hubert H. Hopper, employed the plaintiff to try to effectuate a purchase of the Corporation’s stock or its assets by the Foundation. After considerable work on behalf of the plaintiff in trying to close the deal between the sellers and purchasers the Foundation decided not to make the purchase. It was understood that had the Foundation purchased the Corporation’s stock or assets, the plaintiff’s fee would have been $50,000.00. Thereafter, defendant Flato evidenced an interest in purchasing the corporation’s stock on behalf of his real estate investment trust. He stated to the managing director Hopper that the services of the plaintiff would be used in the same way that the Foundation had contemplated, in the event that a purchase could be arranged on behalf of the trust.

The plaintiff contacted the owners of the Corporation to determine whether or not the office building (being the principal asset of the Corporation) was still for sale. The president of the Corporation, a Mr. Oxsheer Smith, told the plaintiff that the Kirby Building was not for sale but that he would agree to a sale of the Corporation which owned the building. The sale price was to be about $1,800,000.00. After considerable negotiations a subscription agreement was entered into between Smith and the other stockholders of the Corporation wherein they agreed to convey and did convey to defendant Flato Realty Investments all of the stock of the Corporation in exchange for stock or shares in Fla-to Realty Investments. Shortly thereafter, the Corporation, by and through its new manager, defendant Flato as President, conveyed the building (the principal asset) to Flato Realty Investments. There was other personal property consisting of some cash on hand, deposits, prepaid insurance premiums, taxes, accounts receivable, etc., represented in the exchange of the corporate shares for Flato Investments’ stock. The plaintiff testified by deposition that he had been employed by defendant Flato and Flato Realty Investments to effectuate this transaction. Smith, the Corporation president, testified by deposition that the plaintiff was not working for him but was working for defendant Flato. The summary judgment evidence shows that the plaintiff contributed considerable time and effort in bringing about the sale and purchase. Neither Smith, defendant Flato Realty Investments, nor defendant Franklin Flato paid the plaintiff the commission for the services rendered by him in connection with the sale and purchase of the Corporation’s stock. Whereupon the plaintiff filed this suit for the recovery of his commission.

Plaintiff’s first point is that the trial court erred in sustaining defendants’ motion for summary judgment since there were fact issues raised that plaintiff was employed by defendants to arrange for the purchase of securities for which “The Securities Act” is not applicable. Plaintiff’s argument under this point is that “The Securities Act” only attempts to regulate “sellers and sales” and does not undertake to regulate “purchasers”. Assuming for summary judgment purposes that the plaintiff was in fact employed by the defendants to arrange for and did consummate the sale and purchase of the Corporation’s securities, the plaintiff is met with the provision of Art. 581-34, Tex.Rev.Civ.Stat.Ann. (formerly Art. 600a, § 33b) which provides:

“No person or company shall bring or maintain any action in the courts of this state for collection of a commission or compensation for services rendered in the sale or purchase of securities, as that term (securities) is herein defined, without alleging and proving that such person or company was duly licensed under the provisions hereof and the securities so sold were duly registered under the provisions hereof at the time the alleged cause of action arose; provided, however, * * * this Act shall not apply to exempt transactions set forth in Section 5 of this Act * *

Plaintiff contends that this Act does not undertake to regulate purchasers or to protect sellers against purchasers, arguing that if purchasers were regulated all banks, insurance companies, oil companies and other corporations that buy securities for their own account would be violating the law unless their purchasing employees and agents or servants were licensed security dealers. Citing Brown v. Cole, 155 Tex. 624, 291 S.W.2d 704, 59 A.L.R.2d 1011 (1956); Dunnam v. Dillingham, 345 S.W.2d 314 (Tex.Civ.App.-Austin 1961, n. w. h.); Kadane v. Clark, 135 Tex. 496, 143 S.W.2d 197 (1940); Fowler v. Hults, 138 Tex. 636, 161 S.W.2d 478 (Tex.Com.App., Op. adopted by Supreme Court 1942). These contentions and arguments are without merit. An analysis of the cited cases and others is appropriate.

In the Kadane v. Clark case, supra, in 1940 the Supreme Court denied the plaintiff the recovery of his commission for services rendered in procuring a purchaser for an oil and gas leasehold interest, holding that the plaintiff had acted in violation of the criminal law in doing things that he claimed he did to earn the commission. The Court in construing the statute did hold that the purpose of “The Securities Act” was for the protection of the public. The Court stated that the object of the Act was to regulate the sale of the securities and to protect the public from those engaged in selling worthless securities.

In 1942 the Commission of Appeals in Fowler v. Hults, supra, was again called upon to interpret “The Securities Act” and again stated that the Act generally was to regulate sales and sellers of securities and not purchasers or buyers. The Court went on to say that had the Legislature intended to require buyers of securities to register under the Act, the legislative intent would have been manifested more clearly in the Act than in using words all relating to “selling.” We believe it is important that the Commission in its opinion, which was adopted by the Supreme Court, stated that:

“We express no opinion as to what may be the effect of the amendments made to the Securities Act by the Forty-seventh Legislature. Acts Reg. Sess., 47th Leg., 1941, Ch. 363, p. 593, Vernon’s Ann.Civ. St. art. 600a, §§ 33a, 33b. The transactions out of which this suit arose were completed long before the amendments were enacted.”

One of the amendments the Court was referring to in Fowler, supra, was Section 33b which the Legislature amended in 1941. The Legislature added the words “purchase” and declared in Section 3 of 600a the emergency clause that:

“Sec. 3. The fact that at the present time Chapter 100 of the Acts of the Forty-fourth Legislature, Regular Session, does not give full protection to the purchasers of securities made in violation of any provision of this law, and the further fact that there are thousands of sales of securities every day in the State of Texas create an emergency and imperative public necessity that the Constitutional Rule requiring that bills be read on three several days, be suspended, and the same is hereby suspended, and this Act shall be in force and take effect from and after its passage, and it is so enacted.”

This Art. 600a, § 33b is now Art. 581— 34, Tex.Rev.Civ.Stat.Ann., “The Securities Act.”

In 1945 in the case of Shriver v. Stoddard, 188 S.W.2d 892 (Tex.Civ.App.-Dallas 1945, wr. ref.), a case very similar in many respects to the one before this Court, the Court settled the question here presented. In the Shriver case the plaintiff was attempting to recover a commission on a sale of securities owned by the stockholders of an oil company. He was not licensed under “The Securities Act.” He became aware that the stock of the oil company was for sale and conveyed this information to the defendant and requested a five percent commission from the defendant purchaser on the sale price. The defendant purchased the stock and refused to pay the plaintiff a commission. It was plaintiff’s contention that he was not representing the seller and therefore exempt from “The Securities Act.” Plaintiff there contended he was acting as a go-between in bringing about the sale. The Court, quoting from the Fowler case, supra, stated that prior to 1941 that an unregistered dealer or broker representing a seller of securities could not recover a commission for services rendered. However, the Court pointed out that the amendment to the law as contained in Section 33b now includes any “person or company” representing either the “seller or the purchaser." The Court concluded :

“ * * * We think the position of such a broker (as a middleman, intermediary or go-between bringing the parties together) is in nowise inconsistent with the provisions of the Securities Act, forbidding unlicensed persons or brokers representing sellers or purchasers of securities to institute suit for commission as such brokers. * * * ”

In 1956 in Brown v. Cole (supra) the Supreme Court again reiterated that the Act does not undertake to regulate purchasers or to protect sellers against purchasers. “Only sellers and sales are regulated.” The Supreme Court was not referring to 600a, § 33b (now 581-34) which concerns an action for the recovery of a commission. In Brown the Court was construing among other provisions that portion of “The Securities Act” having to do with civil liabilities and the remedies under Section 600a, § 33a. The Court was concerned with a transaction the like of which is not present in this appeal. There an unlicensed dealer in securities failed to secure a permit for the sale of the security and was therefore liable for the full purchase price of the security plus interest.

In 1961 in Dunnam v. Dillingham, supra, no writ history, the Court of Civil Appeals stated that “The Securities Act” did not operate to regulate buyers of securities. However, the fact situation is not the same as before us. The Court held that the transaction was exempt, i. e. where the plaintiff, an unlicensed securities dealer, sold oil and gas leases to a registered dealer in securities. We can readily see why such transactions would be exempt.

It is a familiar rule of law that the intention of the Legislature is the primary object in the construction of statutory amendments. In arriving at the intent of the Legislature the Court may look not only to the body of the Act and its caption but also to the emergency clause. Here we believe the Legislature has evidenced a clear intent in its emergency clause and by the amendment itself in the section regulating suits by unlicensed persons for the collection of a commission, by bringing in under the Act purchasers as well as sellers where the services rendered involves the purchase or sale of securities as that term is defined in “The Securities Act.” Acts 47th Leg. 1941, supra. Appellant’s first point is overruled.

Plaintiff-appellant’s second, third and fourth points are briefed and argued together because they are closely related. They are in effect that the trial court erred in rendering judgment for defendants and not a partial summary judgment for plaintiff because the transaction in question was exempt under “The Securities Act.” Plaintiff takes the position under the old Art. 600a, Sec. 3(i) which has been amended and is now Art. 581-5 (H) and under old Art. 600a, Section 3(g) which is now Art. 581— 5(G) that an exemption exists as a matter of law or at least a fact issue is raised from the summary judgment evidence as to the applicability of these exemptions.

Plaintiff argues that defendant Fla-to Realty Investments is really a corporation and that since all of the assets of the Main and Akard Investment Corporation were merged and consolidated into the defendants’ business that such transaction was exempt under Art. 600a-3(g). This article reads as follows:

“(g) The transfer or exchange by, or on account of, one corporation to another or to its stockholders of their or its own securities in connection with a proposed consolidation or merger of such corporation, or in connection with the change of par value stock to non-par value stock or vice versa, or the exchange of outstanding shares for a greater or smaller number of shares, provided that in such case such stockholders do not pay or give or promise and are not obligated to pay or give any consideration for the securities so transferred or exchanged other than the securities of said corporation then held by them.”

Plaintiff urges this Court to construe the word “corporation” in its usual and ordinary terms, that is to find that for the purpose of “The Securities Act” Flato Realty Investments is in fact a corporation. Along this line the appellant contends that defendant Flato Realty Investments is a company and “The Securities Act” defines the word “company” as follows:

“(B) The term ‘company’ shall include a corporation, person, joint stock company, partnership, association, company, firm, syndicate trust, incorporated or unincorporated, heretofore or hereafter formed under the laws of this or any other state, country, sovereignty or political subdivision thereof. As used herein, the term ‘trust’ shall be deemed to include a common law trust, but shall not include a trust created or appointed under or by virtue of a last will and testament or by a court of law or equity.”

Although it is true that “company” as hereinabove defined would include a corporation as the same is known under the Texas Business Corporation Act the reverse will not necessarily be true. A corporation as such could not include all of the defined businesses set forth above. Had the Legislature intended the exemption to include all types of companies we believe the same would have been stated as such. There are other reasons by which the defendant Flato Realty Investments would not be considered a corporation. A part of the summary judgment evidence is a copy of the articles of Flato Realty Investments. It is apparent to us that this business was designed and patterned to conform to Art. 6131a “Real Estate Investment Trust” and as such it is not a corporation. Article 581-5 (G) (the old 600a, § 3(g)) says “corporation” and does not use the term real estate investment trust. The very language of the sub-section indicates that the same is confined to that of corporation. The defendants’ business being a real estate investment trust or what is commonly known as a “Massachusetts type trust”, is not a corporation.

The transaction that took place in this case did not contemplate a merger or consolidation between corporations as is required by our law in Art. 5.01 and 5.02 which relates to Texas corporations. The record shows that no vote was taken or required to be taken by the shareholders of the corporation in connection with the sale of their stock to the defendant. No corporate action was required here as would be in the case of a merger or consolidation.

This exemption is further inapplicable for the reason that the corporation stockholders agreed to hold Flato Realty Investments free and harmless from certain losses or payments; that they were to furnish the defendant with an abstract of title to the Kirby Building and that the consideration included an agreement by the shareholders of the corporation to pay some cash to permit issuance of whole shares. All of this would be in contravention of the very Art. 600a, § 3(g) which plaintiff relies upon as an exemption, as this Act prohibits the exemption where the holders pay or promise to pay or are obligated to pay any consideration for the issuance of the securities sold by them, other than the receipt of the securities issued to them.

Plaintiff’s final argument concerns the exemption of a sale of any security to a “trust company” as set forth in Art. 600a, Sec. 3(i). Appellant argues that defendant Flato Realty Investments is a “trust company”. Art. 600a, Sec. 3(i) provides for certain exempt transactions. The exemption would be where:

“(i) The sale (was) to any bank, trust company, loan and brokerage corporation, building and loan association, insurance company, surety or guaranty company, savings institution or to any registered dealer, provided such dealer is actually engaged in buying and selling securities.”

In 1963 this article was amended and is now Art. 581-5(H). Plaintiff argues that the transaction represents a purchase of securities by a “trust company” pursuant to this article and therefore is exempt. An examination of the articles of the business trust of Flato Realty Investments, reflects that it is an unincorporated business association in the form of a common law trust. Business trusts such as this have been consistently held to be in the nature of business partnerships in Texas in the past. In any respect a business trust is not the same as a “trust company” as that organization is used in the statute enumerating certain exempted companies. The Legislature’s intent to exempt banks, buildings and loan associations, insurance companies, surety or guaranty companies, savings institutions and like companies would not include, we think, a real estate business trust. The rule or maxim of noscitur a sociis (it is known from its associates) which is to the effect that where the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it, words employed in a statute are construed in connection with, and their meaning is ascertained by reference to the words and phrases with which they are associated or related. 82 C.J.S. Statutes § 331, pp. 654-655. Under this rule “trust companies” associated with the other companies (such as banks, etc.) would not include a Massachusetts type real estate business trust. Appellant’s points are overruled.

Judgment of the trial court is affirmed.

      . Emphasis supplied.

      . Emphasis supplied.

      . Emphasis supplied.


author: GREEN, Chief Justice.

text:
    Louis W. CHENAULT, Appellant, v. OTIS ENGINEERING CORPORATION, Appellee.
    No. 380.
    Court of Civil Appeals of Texas. Corpus Christi.
    Dec. 28, 1967.
    Rehearing Denied Jan. 25, 1968.

      Harry F. Maddin, of Cullen, .Mallette, Maddin, Edwards & Williams, Victoria, for appellant.
    Henry Nuss, III, and Leslie S. Lockett, of Kleberg, Mobley, Lockett & Weil, Corpus Christi, for appellee.
   OPINION

GREEN, Chief Justice.

This is a suit brought by appellee Otis Engineering Company for temporary and permanent injunctive relief, whereby it sought to have the court enforce a restrictive covenant that appellant Louis W. Chenault would not compete with appellee within a specified area for a specified period of time. Upon preliminary hearing, the court granted a temporary injunction, and after trial before the court and a jury entered judgment after verdict enjoining appellant from conducting business in competition with appellee in the Victoria area, defining the limits of such area all of which were within 100 miles of Victoria, for the duration of the time specified in the written agreement on which the suit was based, towit three years from the date of the execution of the agreement. This appeal is from such judgment.

The evidence shows that appellant had been in the employ of appellee in the latter’s Victoria district approximately fourteen years, during which time he was trained in wire line operation in connection with Otis’ work in oil fields, in sales of appellee’s oil field equipment, and in management. For the last twelve years, appellant had been in charge of Otis’ Victoria operations, holding the position of district manager with direct responsibility for contacting customers and obtaining business for Otis. Appellee had operations throughout the United States and in Canada, and other foreign countries, and it was not unusual that employees would be transferred from one territory of employment to another.

In the Spring of 1966, appellee through its proper officials decided that appellant should be transferred to Corpus Christi, Texas, to be their district manager of that area. When appellee insisted upon such transfer, appellant, rather than move his family from Victoria, applied for a leave of absence. After conferences between appellant Chenault and representatives of Otis, a written agreement prepared by ap-pellee’s general counsel was entered into and executed, which reads as follows:

“LEAVE OF ABSENCE AGREEMENT
THE STATE OF TEXAS \ COUNTY OF NUECES J
Know all men by these presents, that this memorandum of a contract made and entered into this 1st day of July, 1966 by and between LOUIS W. CHENAULT and OTIS ENGINEERING CORPORATION, hereinafter call ‘Otis,’ witnesseth:
Whereas, Louis W. Chenault desires that Otis grant him a one-year leave of absence from active employment; and
Whereas Otis desires to restrict Louis W. Chenault from competing with it in the Victoria area for three years;
Now, therefore, in consideration of the mutual promises herein contained, and for other good and valuable considerations, hereinafter set forth, Louis W. Chenault and Otis have agreed and, by these presents, do agree as follows:
1. As of the date of this contract Otis grants to Louis W. Chenault a leave of absence, not to exceed one year, to be employed as a life insurance salesman in the Victoria, Texas area, by Life Insurance Company of the Southwest.
2. Louis W. Chenault will transfer to Life Insurance Company of the Southwest and will begin participating in the Life Insurance Company of the Southwest benefit program (hospitalization, vacation, holidays, etc.) according to their company policy and his Otis benefits will not be in effect unless and until he should return to work at Otis.
3. Should Louis W. Chenault desire to return to employment at Otis during the period before the leave of absence expires, Otis will reemploy him in some capacity at one of the various company locations, consistent with Louis W. Chenault’s physical condition at the time he should desire to return to work.
4. If Louis W. Chenault returns to Otis’ employment prior to the expiration of the leave of absence, his seniority will be considered continuous and his various benefits will be renewed on the day of reemployment without the customary new employee waiting period, on the basis of his continuous seniority.
5. Louis W. Chenault agrees that for a period of three years from the date of this contract he will not do any work, perform any services or engage in any business in or within a 100-mile radius of Victoria, Texas, which competes in any way or manner with Otis.
WITNESS our hands affixed to duplicate copies, each of which shall have full dignity and force as an original.
/s/ Louis W. Chenault LOUIS W. CHENAULT
OTIS ENGINEERING CORPORATION By: /s/ E. E. Pearson”

Appellant’s last day of active employment by Otis was June 30, 1966. He received no pay after that date. As noted in the above instrument, he became a life insurance salesman in the Victoria area for several months. This did not prove to be a success. In November, 1966, he indicated an interest in returning to active service with appellee, which advised him of several locations at which there were openings, and offered him employment. Attention is called to jury findings 1, 3, and 11, infra. He declined all of these. In November, appellant purchased a wire-line truck and other equipment for the purpose of going into business for himself in the Victoria area in competition with appellee. When a request for a line of credit was made by him to Otis, appellee through its general counsel and vice-president replied by letter dated December 9, declining such credit, pointing out paragraph 5 of the agreement above copied, and stating:

“ * * * Since purchase of Otis equipment for this purpose would be in violation of the provisions of our agreement, we cannot approve your request for a line of credit and, additionally, I want to take this opportunity to confirm in writing my statement during our telephone conversation that if you violate any of the provisions of our agreement of July 1, 1966, Otis will take such action as may be necessary to exercise those rights and remedies available to the company in accord with the provisions of our agreement.”

Nevertheless, appellant obtained the necessary equipment, and admittedly did do business in the Victoria district, all of which was within 100 miles of Victoria, in competition with appellee Otis, and continued to do so until temporarily restrained following a hearing in the trial court in this suit on January 30, 1967. On December 30, 1966, he submitted to Otis a letter of resignation from his leave of absence with Otis, effective January 1, 1967.

In answer to special issues, the jury found as follows:

(1) When Louis Chenault inquired of Otis about jobs he could have, Otis was ready and able to perform the obligation in the leave of absence agreement to reemploy him in some capacity at one of the various company locations consistent with the said Chenault’s physical capacity;
(2) There was legal consideration given by Otis to Chenault for the execution by Chenault of the leave of absence agreement containing the provision that Chenault would not engage in competition with Otis;
(3) Chenault’s inquiries to Otis about resuming performance by him of duties for Otis were made as a good faith effort by him to resume work for Otis;
(4) If Chenault engages in work in the territory included within Otis’ Victoria, Texas, district in competition with Otis, such work will be damaging to Otis;
(5) E. E. Pearson did not represent to Chenault prior to Chenault’s execution of the leave of absence agreement that the provisions in the agreement relating to non-competition were a mere formality and would not be enforced;
(11) Otis Engineering Corporation has not failed to offer Louis Chenault reemployment in a position consistent with his background and experience; and
(12) $4800 has been lost by Chenault in net profit due to Chenault’s inability to perform wireline services in the Victoria area from February 7, 1967, until May 17, 1967.

Appellant bases his appeal on four points of error, as follows:

POINT ONE
The Trial Court erred in entering judgment for Appellee because the contract relied upon is void and contrary to public policy since it constitutes an invalid restraint of trade.
POINT' TWO
The Trial Court erred in entering judgment for Appellee because there was no consideration to support the contract upon which suit was based.
POINT THREE
The Trial Court erred in entering judgment for Appellee because there is no evidence, or alternatively, insufficient evidence that the restrictions sought to be imposed upon Appellant are reasonable and necessary or that Appellee would be damaged.
POINT FOUR
For all the reasons stated in the preceding points, the Trial Court erred in not entering judgment for Appellant dissolving the temporary injunction and awarding Appellant his damages.

The rule is well established in Texas that non-competition clauses in contracts pertaining to employment are not normally considered to be contrary to public policy as constituting an invalid restraint of trade.

“There was a time in our jurisprudence when covenants not to compete were held to be unenforceable because in restraint of trade and contrary to public policy. However, under the customs and usages of modern business practice it is now well established that contracts ancillary to employment involving trades or professions are enforceable, though amounting to limited restraint of trade, where they are reasonably limited as to time and space. Some cases even go so far as to uphold such restrictive covenants, even in the absence of a time limitation, where the agreement is reasonably limited as to area. 13 Tex.Jur.2d Section 189, Pages 398-400, Krueger, Hutchinson & Overton Clinic v. Lewis (Tex.Civ.App.), 266 S.W.2d 885, affirmed 153 Tex. 363, 269 S.W.2d 798; Randolph v. Graham, Tex.Civ.App., 254 S.W. 402 ; 58 A.L.R. 168. * * *” John L. Bramlet & Company v. Hunt, Tex.Civ.App., 371 S.W.2d 787, 788 (Dallas, 1963), writ ref’d. n. r. e.
“The courts of this State have in numerous cases enforced negative restrictive covenants not to compete when ancillary to employment involving trades or professions although such covenants may be in limited restraint of trade, provided they are reasonably limited as to duration and area. Patterson v. Crabb, Tex.Civ. App.1889, 51 S.W. 870, error dism.; John L. Bramlet & Co. v. Hunt (1963), Tex.Civ.App., 371 S.W.2d 787, writ ref., n. r. e.; McAnally v. Person (1933), Tex.Civ. App., 57 S.W.2d 945 writ ref.; Bettinger v. North Fort Worth Ice Co., Tex.Civ.App., 278 S.W. 466; Lewis v. Krueger, Hutchinson & Overton Clinic, 1954, 153 Tex. 363, 269 S.W.2d 798; Traweek v. Shields, Tex.Civ.App.1964, 380 S.W.2d 131; Wilson v. Century Papers, Inc., Tex.Civ.App.1965, 397 S.W. 2d 314; Jennings v. Shepherd Launddries Co., Tex.Civ.App.1925, 276 S.W. 726 error dism.; Randolph v. Graham, Tex.Civ.App., 254 S.W. 402 ; 58 A.L.R. 168. * * * ” Carl Coiffure, Inc. v. Mourlot, Tex.Civ.App., 410 S.W.2d 209, 211 (Houston, 1966) writ ref’d, n. r. e.

Appellant, recognizing the general rule as above stated, argues under its first point of error that the agreement by appellant not to compete, paragraph 5 of the contract, is void and contrary to public policy because (1) the stated purpose is to restrain appellant from competing with appellee, and (2) the provision was not ancillary to an employment contract because it was not executed as a condition of beginning work with Otis, but at the time of termination of employment, and after appellant had left Otis’ employ and had gone to work for the insurance company.

In support of his point, appellant cites 17 C.J.S. Contracts, § 254, p. 1151, as follows :

“In accordance with the rules stated supra § 246 that a restraining covenant to be valid must be incidental to a lawful contract under which the covenantee acquires an interest requiring protection, an independent agreement concluded after termination of employment not to enter into a competitive employment is invalid.”

Eight non-Texas cases are cited in C.J.S. in the footnote to this statement of which appellant relies on four, they being Arthur Murray Dance Studios of Cleveland v. Witter, Ohio Com.Pl., 105 N.E.2d 685, 695; Bond Electric Corporation v. Keller, 113 N.J.Eq. 195, 166 A. 341; Paramount Pad Co. v. Baumrind, 4 N.Y.2d 393, 175 N.Y.S. 2d 809, 151 N.E.2d 609; Rabinowitz v. Tillman, 19 Misc.2d 1094, 192 N.Y.S.2d 535.

Neither the quote from C.J.S. nor any of these cited authorities support appellant’s contentions under the facts of the present case, since the non-competition provision here sought to be enforced was not an independent agreement unconnected with a contract concerning employment concluded after termination of employment. Texas appellate courts have consistently upheld injunctions enforcing non-competition clauses in agreements concerning employment which were entered into after the beginning of employment, the announced requirements being that the agreement be ancillary to employment, be reasonable, and be based on consideration. Ofsowitz v. Askin Stores, Inc., Tex.Civ.App., 306 S.W,2d 923, wr.ref. ; Houston Credit Sales Co. v. English, Tex.Civ.App., 139 S.W.2d 163, n. w. h.; McAnally v. Person, Tex.Civ.App., 57 S.W.2d 945, wr.ref.; Bettinger v. North Fort Worth Ice Co., Tex.Civ.App., 278 S.W. 466, n. w. h.; Credit Bureau Management Company v. Huie, 254 F.Supp. 547 (E.D.Ark.1966); Richardson v. Permacel Tape Corp., 5th Cir., 244 F.2d 80. We quote as follows from the Credit Bureau case, 254 F.Supp. p. 554:

“Judged by Texas law, which in this particular connection does not seem to differ from that of Arkansas, the fact that Huie was continued in the employ of plaintiff was sufficient consideration for his execution of the agreement. [John L.] Bram-lett [Bramlet] & Co. v. Hunt, supra; Mc-Annally [McAnally] v. Person, Tex.Civ. App., 57 S.W.2d 945, wr. ref. * * * ”

The following are some out of state cases holding valid a non-competition restriction in a contract pertaining to employment, but entered into after the employment had ceased; Novelty Bias Binding Co. v. Shevrin, 1961, 342 Mass. 714, 175 N.E.2d 374; World Wide Pharmacal Distributing Co. v. Kolkey, 1955, 5 Ill.App.2d 201, 125 N.E.2d 309; DeLong Corporation v. Lucas, S.D. N.Y.1959, 176 F.Supp. 104; Continental Paper Grading Co. v. Howard T. Fisher & Associates, Inc., 1954, 3 Ill.App.2d 118, 120 N.E.2d 577.

A leave of absence is not a complete separation from employment; it connotes a continuity of the employment status, during which time performance of the duties of his work by the employee and remuneration by employer and other fringe benefits may be suspended. Southwestern Bell Telephone Company v. Thornbrough, 232 Ark. 929, 341 S.W.2d 1, 3—4; Diehl v. Lehigh Valley R. Co., 3rd Cir., 211 F.2d 95, 99; State ex rel. Cutright v. Akron Civil Service Commission, 95 Ohio App. 385, 120 N.E.2d 127,130; Ward v. Keenan, 3 N.J. 298, 70 A.2d 77, 83; Michigan Employment Security Commission v. Vulvan Forging Company, 375 Mich. 374, 134 N.W.2d 749, 752; State ex rel. McGaughey v. Grayston, 349 Mo. 700, 163 S. W.2d 335, 341.

It appears clear to us that appellant did not intend to terminate definitely all claims or rights with reference to employment by appellee when he executed this agreement. Though it was signed after he had begun to work for the insurance company, his original request that he be granted leave of absence was made while he was still on the payroll of appellee. He was under no obligation to enter into this contract with appellee; there was no pressure upon him to agree to the non-competition provision, except his own desire and intention to keep an avenue open to have and resume work if his insurance proposition failed. When he was unable to secure the position he wanted with appellee, as he testified to, he “resigned” from the leave of absence by letter dated December 30, 1966. There would have been no purpose of his resigning except his own recognition that, being on a leave of absence, his employment status had not entirely ceased, and that he had established rights and benefits by reason of the contract. We hold that by virtue of the very terms of the Leave of Absence Agreement, the restraining covenant not to compete, being paragraph 5 thereof, was ancillary to and connected with his employment status with appellee. Appellant’s first point is overruled.

Appellant’s argument on his second point of no consideration is based on his contention that the Leave of Absence Agreement contained (1) no definite job offer; (2) no stipulated salary; (3) no period of time for which employment is assured; (4) no provision for what happens if appellant is not physically qualified to work for Otis; (5) no specification as to the type of work to be done or the location in which the work is to be performed.

We here call attention to the findings of the jury on the issue of consideration, supra. The granting of the leave of absence, connoting a continuity of certain employment rights, would constitute consideration. Appellee agreed that in the event appellant accepted active re-employment under the agreement, his seniority would be considered continuous and his various benefits would be renewed on the day of re-employment without the customary new employee waiting period, on the basis of his continued seniority. Otis’ witnesses testified in detail about the value of these benefits to appellant should he exercise his option under the contract of returning to active employment with appellee. It is true that there was no agreement that his position would be of the same or equal classification with that of district manager and there was nothing definite as to the duration of such employment, or the salary, but appellant voluntarily took his chances on such matters with his eyes open when he requested the leave of absence and signed the agreement.

As the court stated in Ofsowitz v. Askin Stores, supra, 306 S.W.2d 923, 924 in which the Supreme Court refused a writ of error :

“We overrule appellant’s contention that because of the provision of the contract to the effect that his employment as manager was at the will of the corporation which was not bound to employ him for any specific length of time, the restrictive covenant in question which was not to take effect until after his employment was ended, was without consideration and therefore unenforceable. This identical question was decided adversely to appellant’s contention in the case of Krueger, Hutchinson and Overton Clinic v. Lewis, Tex.Civ.App., 266 S.W.2d 885, affirmed 153 Tex. 363, 269 S.W.2d 798. See also McAnally v. Person, Tex.Civ.App., 57 S. W.2d 945 (Writ Ref).”

See also, Carl Coiffure, Inc. v. Mourlot, supra, 410 S.W.2d 209, wr.ref. n. r. e. Appellant’s second point is overruled.

By his third point, appellant says there was no evidence or, alternatively insufficient evidence, that the restriction as to competition was necessary or reasonable, or that appellee would be damaged by a breach thereof. We call attention to the jury’s finding, No. 4, that Otis would be damaged by such breach.

Chenault testified that all of his training in the wire line business had come from Otis; that obtaining business was largely a matter of personalities, and that as manager in the Victoria district for twelve years, he had made it his business to become well acquainted in his social and business life with Otis’ customers, and had worked hard on developing his relationship with them. By virtue of such contacts appellant testified that he would be in a better position to compete with appellee in the Victoria district than elsewhere. The likelihood of continuing damage to appellee was shown by the evidence. Carl Coiffure, Inc. v. Mourlot, supra.

In determining the reasonableness of a restrictive contract provision the courts will ordinarily pass upon the question as a matter of law, and it was not necessary that the issue be submitted to the jury. Lewis v. Krueger, Hutchinson and Overton Clinic, 153 Tex. 363, 269 S.W.2d 798; Weatherford Oil Tool Co. v. Campbell, 161 Tex. 310, 340 S.W.2d 950; Spinks v. Riebold, Tex.Civ.App., 310 S.W.2d 668, wr.ref.; Eubanks v. Puritan Chemical Company, Tex.Civ.App., 353 S.W.2d 90, 92, wr.ref. n. r. e.; Vaughan v. Kizer, Tex.Civ.App., 400 S.W.2d 586, 589, wr.ref. n. r. e.; Caraway v. Flagg, Tex.Civ.App., 277 S.W.2d 803; Barrett v. Curtis, Tex.Civ.App., 407 S.W.2d 359, 361, n. w. h.

The injunction was restricted to the territory included in the Victoria district all of which is less than 100 miles from the City of Victoria, and the duration was fixed at that provided in the contract, i. e., three years from July 1, 1966. One-half of that period has expired.

Appellant’s third point is overruled.

Our rulings have made it unnecessary to discuss further appellant’s contentions under his fourth point, and same is overruled.

Judgment affirmed.


author: SAM D. JOHNSON, Justice.

text:
    Henrietta GREEN, Appellant, v. Fred A. MAXWELL, Appellee.
    No. 43.
    Court of Civil Appeals of Texas. Houston (14th Dist.).
    Jan. 10, 1968.
    Rehearing Denied Jan. 31, 1968.

      J. Leonard Gotsdiner, Ranseler O. Wyatt, Houston, for appellant.
    T. Turner Pope, Kamp, Laswell & Howard, Houston, for appellee.
   SAM D. JOHNSON, Justice.

This suit was brought by the appellant, Henrietta Green, to set aside a deed of trust and the foreclosure of such deed of trust by the appellee, Fred A. Maxwell. The primary contention of the plaintiff, Green, at trial was that the defendant had not properly credited the full amount paid by her upon her account and that the note in question was usurious.

The jury found that the plaintiff had paid to the defendant $2,273.75, that the defendant had credited this amount in a certain manner as between principal, interest and late charges, and that upon the date the foreclosure was consummated, the plaintiff was $1,554.63 in arrears in her payments upon the note in question. The jury findings supported the judgment entered for the defendant, Fred A. Maxwell.

On appeal, the appellant-plaintiff here, enumerates four points of error, which are set forth in their entirety: first, the verdict of the jury and judgment of the court should be set aside because it is contrary to the overwhelming preponderance of the evidence; second, the verdict of the jury and judgment of the court should be set aside because it is contrary to the law; third, the court erred in refusing the special issues requested by the appellant; fourth, the court erred in denying appellant’s motion for judgment non obstante veredicto.

We are of the opinion that numbers one, two and three do not properly set forth points of error that are appropriate for appellate consideration. We are familiar with the rule that if a point is sufficient to direct the court’s attention to the matter complained of, the court will look to the point and the statement and argument thereunder to determine the question of reversible error. Fambrough v. Wagley, 140 Tex. 577, 169 S.W.2d 478, no writ history.

However, Rule 418(b), Texas Rules of Civil Procedure, provides that: “The brief for appellant should contain * * * a statement of the points upon which the appeal is predicated * * * germane to one or more assignments of error when assignments are required.” Appellant’s brief before this court makes no attempt to identify or point out those assignments of error in his motion for new trial to which his points of error are germane.

If appellant’s first three points of error are germane to any assignments of error in the appellant’s motion for new trial, they are, in any event, too general and fail to acquaint the court with the points relied upon as required by the Texas Rules of Civil Procedure, Rules 321, 322 and 374.

Appellant’s second point that, “The verdict of the jury and judgment of the court should be set aside because it is contrary to the law,” is specifically prohibited by Rule 322, T.R.C.P. It provides, “Grounds of objections couched in general terms— as that the court erred in its charge, in sustaining or overruling exceptions to the pleadings, and in excluding or admitting evidence, the verdict of the jury is contrary to law, and the like — shall not be considered by the court.”

Appellant’s first and third points of error, that the judgment “should be set aside because it is contrary to the overwhelming preponderance of the evidence” and “the court erred in refusing the special issues requested by the appellant” are likewise complete generalities. In Bauguss v. Bauguss, 186 S.W.2d 384, ref., w. m., the court considered, among others, similar assignments copied from the motion for new trial that, “the answer of the jury to Special Issue No. 1 is against the weight and preponderance of the evidence” and, “the Court erred in failing and refusing to give their requested Special Issue No. 5 to the jury.” The court there stated, “The assignments of error in question are of the same pattern as the grounds of objection condemned as too general for consideration by Rule 322, and are to be treated as waived under Rule 374.” Bauguss v. Bauguss, supra, 387. See also Roeser v. Coffer, Tex. Civ.App., 98 S.W.2d 275, no writ history; Texas Life Ins. Co. v. Jordan, Tex.Civ.App., 253 S.W.2d 906, ref.; and Baker v. Sturgeon, Tex.Civ.App., 361 S.W.2d 610, no writ history.

While the first Rule provides for a liberal construction to the end that a “just, fair, equitable and impartial adjudication of the rights of litigants under established principles of substantive law” may be obtained, Rules 320, 321, 322 and 374 also have a very real and useful purpose. “There must be a substantial compliance with the provisions of those rules if a litigant is to have his points of error based thereon considered by an appellate court.” Wagner v. Foster, 161 Tex. 333, 341 S.W.2d 887, 890.

The appellant’s fourth point of error complains of the trial court’s denial of the motion for judgment non obstante vere-dicto. Under Rule 324, T.R.C.P., appeal is authorized on the grounds stated in the motion for judgment non obstante veredicto without the necessity of incorporating the grounds in the motion for new trial. As stated in Wagner v. Foster, supra, “A party whose motion for judgment non ob-stante veredicto is denied may forego the filing of a motion for new trial and predicate his points of error on appeal on the matters included in such motion. If he follows that course, he may complain on appeal only of the denial of the motion non obstante veredicto.”

In the case at bar, the plaintiff’s motion for judgment notwithstanding the jury verdict, was presented to the trial court in the same instrument and as an alternative to her motion for a judgment based on the verdict of the jury. Looking to the portion designated as a motion notwithstanding the verdict, it is found that such motion is nothing more than a general allegation that the transaction made the basis of this action was of a usurious nature. This, in essence, was the issue tried in the trial court in which the jury findings favored the defendant. There was no motion filed in the trial court to disregard the findings of the jury. See Missouri Pac. R. Co. v. Ramirez, Tex.Civ.App., 326 S.W.2d 50, ref., n. r. e. In addition, viewing the record as a whole, we find that the verdict is supported by the evidence and the trial court’s judgment is fully supported by evidence of probative force.

Finding no reversible error, the judgment of the trial court is affirmed.