author: SUMMERS, Chief Justice.

text:
    SPANISH VILLAGE, LTD., Appellant, v. AMERICAN MORTGAGE COMPANY, Appellee.
    No. 1209.
    Court of Civil Appeals of Texas, Tyler.
    Aug. 9, 1979.
    Rehearing Denied Sept. 13, 1979.

      Jay M. Goltz, Dallas, for appellant.
    Paul E. Stallings, Scott J. Atlas, Vinson & Elkins, Houston, for appellee.
   SUMMERS, Chief Justice.

This is a suit seeking to recover statutory penalties and interest paid upon a loan transaction alleged to be usurious. Appellant, Spanish Village, Ltd., a limited partnership, brought suit against appellee, American Mortgage Company, a corporation, alleging that a transaction to provide a mortgage loan, insured pursuant to Section 236 of the National Housing Act, 12 U.S.C. section 1715z-l (1970), for the construction and permanent financing of an apartment project in Houston, Texas, was usurious. Appellant sought recovery of double the amount of interest charged and received by appellee, plus interest paid and attorney’s fees. American Mortgage denied that the loan calls for or that Spanish Village was charged or paid interest at a usurious rate. After a trial by the court without a jury, the trial court entered a take nothing judgment in favor of American Mortgage Company. From this adverse judgment Spanish Village has perfected this appeal.

We affirm.

On July 12, 1973, appellant and American Mortgage executed a mortgage note in the principal amount of $1,651,900.00, with interest at the rate of 7 percent per annum. The note expressly provided that appellant would make monthly interest only payments to American Mortgage commencing August 1,1973, and continuing through December 1, 1974, and then monthly principal and interest payments of $10,265.43 beginning on January 1,1975, with a final installment of the principal balance and accrued interest on December 1, 2014. Appellant used the proceeds of the loan evidenced by the note to finance construction of the apartment project. As security for the note, appellant on the same date executed and delivered to American Mortgage a deed of trust covering the property on which the apartment project was being built.

Previously, American Mortgage had obtained a commitment for insurance advances from the Department of Housing and Urban Development (“HUD”) and a Commitment Contract from the Government National Mortgage Association (“GNMA”). Under the Commitment for Insurance, the Federal Housing Commission agreed to insure the note under the provisions of Section 236 of the National Housing Act, supra, and subsidize a portion of appellant’s monthly interest payments, provided the note and apartment project met certain requirements and that the FHA received certain fees.

Under the Commitment Contract GNMA gave American Mortgage a two year option to require the Federal National Mortgage Association (“FNMA”) to purchase the note pursuant to GNMA Program 17, provided the loan documents and the completed apartment project met certain requirements and provided that FNMA received a 1 percent (each percent a point) commitment fee and a ½ point purchase and marketing fee.

On July 12, 1973, the same date that appellant delivered its note to American Mortgage, the two parties executed three other federally required documents. First, the parties executed a Building Loan Agreement, which expressly provided that appellant would complete construction of a project meeting FHA approval by June 12, 1974, and that American Mortgage would loan appellant $1,651,900.00, with disbursements to be made upon application by appellant as construction progressed in amounts 10 percent less than the ongoing cost of labor, materials and equipment. In this agreement appellant also agreed to pay certain fees, including the following: (1) the 1½ point ($24,779.00) FNMA/GNMA fee, consisting of a one-point ($16,519.00) commitment fee which was paid by appellant to American Mortgage on June 8,1973, and from American Mortgage to FNMA on June 11, 1973, to secure the Commitment Contract and a ½ point ($8,260.00, later reduced to $8,038.44) purchasing-marketing fee, which American Mortgage deducted from its last disbursement to appellant on August 29,1974, and FNMA deducted from its payment to American Mortgage on January 29,1975; and (2) a 2 point ($33,038.00) initial service charge which was paid to American Mortgage on July 16,1973, authorized by FHA to cover the cost of closing the transaction. Contemporaneously, appellant agreed to pay American Mortgage an additional financing charge of $16,159.00 contingent on construction costs not exceeding the face amount of the note.

Second, the parties executed an Agreement and Certification, under which appellant agreed to submit to the FHA a cost certification prior to receipt of the final disbursement from American Mortgage.

Third, American Mortgage submitted a Mortgagee’s Certificate and copies of all loan documents to the Commissioner. On the certificate American Mortgage certified that each requirement for obtaining insurance on the loan advances had been met and listed all FHA and GNMA required or approved fees and charges collected and collectible from appellant.

After Construction was completed, appellant’s cost certification and other FHA required procedures were not completed until August 29, 1974, more than two months after the projected completion date. Upon appellant’s request as the project was being built, American Mortgage paid advances of the mortgage loan proceeds to American Title Company which promptly disbursed the funds to appellant in the total amount of $1,608,299.20.

Interest payments by appellant between July 12, 1973, and August 29, 1974, were made in the form of deductions from advances; and between August 29, 1974, and January 29, 1975, were made in the same manner or by direct payments in amounts stipulated by the parties.

Since construction costs totaled less than the face amount of the note, appellant on August 29, 1974, paid American Mortgage the $16,159.00 contingent financing fee permitted by the Mortgagee’s Certificate; and the two parties executed an Allonge and a Modification Agreement on the same date reducing the note principal from $1,651,-900.00 to $1,608,300.00, the amount actually advanced, and reducing the monthly principal and interest payments accordingly from $10,265.43 to $9,994.48. Also on August 29, 1974, American Mortgage chose to exercise its option under its Commitment Contract with GNMA to have FNMA purchase the loan. On January 29, 1975, FNMA honored the commitment to purchase the loan and received an assignment from American Mortgage of the note, the mortgage, the Building and Loan Agreement and all other instruments and documents relating to the loan.

A rider to the note contains the following savings clause provision:

“In the event any item, items, terms or provisions contained in this instrument are in conflict with the laws of the State of Texas, this instrument shall be affected only as to its application to such item, items, terms or provisions, and shall in all other respects remain in full force and effect. It is understood and agreed that in no event and upon no contingency shall the maker of this note, or any part [sic] liable thereon or thereafter, be required to pay interest in excess of the rate allowed by the laws of the State of Texas. The intention of the parties being to conform strictly to the Usury Laws now in force, any of said contracts for interest shall be held to be subject to reduction to the amount allowed under said Usury Laws as now or hereafter construed by the courts having jurisdiction.”

At the time of trial, the parties made the following stipulations:

1.Between July 12, 1973, and August 29, 1974, inclusive, American Mortgage received interest totaling $73,499.45 consisting of:

(a) Interest paid by appellant either through the title company or directly — $57,-047.93; and
(b) Interest paid by FHA — $16,451.52.

2. On January 29, 1975, FNMA paid American Mortgage $1,608,714.39 representing the outstanding principal balance ($1,607,687.27) on the note plus 29 days interest ($9,065.56) minus a ½% FNMA purchase and marketing fee ($8,038.44) as the purchase price for the note.

3. Between August 29, 1974, and January 29, 1975, HUD made additional interest subsidy payments to American Mortgage totaling $30,921.69.

4. Between August 29, 1974, and January 29, 1975, appellant made interest payments on the note totaling $16,395.76.

5. That both the initial service charge of $33,038.00 (which was remitted back to American Mortgage by the title company on July 16, 1973, out of the first disbursement of the loan proceeds) and the contingent financing fee of $16,159.00 (which appellant paid American Mortgage on August 29, 1974) are interest rather than fees for services. American Mortgage made this stipulation without waiving certain defenses.

6. The $8,260.00 FNMA/GNMA fee and the $16,519.00 GNMA commitment fee are not interest.

Appellant filed a statement of facts but requested no findings of fact or conclusions of law and none were filed. Under these circumstances, it is the well settled rule that the appellate court is required to affirm the judgment rendered by the trial court if it can be sustained on any reasonable theory supported by the evidence and authorized by law. Lassiter v. Bliss, 559 S.W.2d 353, 358 (Tex.1977); Bishop v. Bishop, 359 S.W.2d 869, 871 (Tex.1962); 4 McDonald, Texas Civil Practice, Section 16.10, p. 30 (1971 rev.).

Article 16, Section 11 of the Texas Constitution, as amended November 8, 1960, authorized the Legislature to “define interest and fix maximum rates of interest.” Pursuant thereto, the Legislature defined interest as “the compensation allowed by law for the use or forbearance or detention of money . . . and enacted the following relevant statutes, effective October 1, 1967:

“Article 5069-1.04 Limit on rate
“The parties to any written contract may agree to and stipulate for any rate of interest not exceeding ten percent per annum on the amount of the contract; and all other written contracts whatsoever, except those otherwise authorized by law, which may in any way, directly or indirectly, provide for a greater rate of interest shall be subject to the appropriate penalties prescribed in this Subtitle.”

Article 5069-1.06 provides in pertinent part:

“(1) Any person who contracts for, charges or receives interest which is greater than the amount authorized by this Subtitle, shall forfeit to the obligor twice the amount of interest contracted for, charged or received, and reasonable attorney fees fixed by the court provided that there shall be no penalty for a violation which results from an accidental and bona fide error.”

Appellant contends that the loan transaction herein is divisible into two separate parts, to-wit: an interim loan covered by the Building Loan Agreement and a permanent loan transaction covered by the GNMA commitment. Based on this premise, appellant predicates this appeal on the following three points of error: (1) that the interim loan transaction was usurious because the Lender both charged and received interest in excess of the lawful rate for the interim loan transaction, and the Borrower is entitled to receive double the amount of interest charged and attorney’s fees; (2) the disclaimer of usurious intent contained in the note does not affect this transaction which is usurious by its terms; and (3) appellant is entitled to recover interest paid the Lender in a total amount of $122,696.35 in addition to the statutory penalties for usury.

Appellant asserts that the contract documents evidence two loans: an interim 13½ month loan during the construction period from July 12,1973, to August 29, 1974, and a 40⅛ year permanent loan from August 29, 1974, until December 1, 2014; that the amount of interest charged and received by American Mortgage from July 12, 1973, to August 29, 1974 is a total of $122,696.35 (which includes the initial service charge of $33,038.00, the additional service charge of $16,159.00 and $73,499.35 as interest eo no-mine), all of which appellant contends is attributable to the interim period from July 12,1973, to August 29,1974, and is usurious. Appellant, however, concedes in his brief that “if the instant loan was a 41Vb year loan, this transaction was not usurious.”

Appellee American Mortgage responds that the loan documents as a whole reflect the existence of only one 41½ year loan; that the loan was evidenced by a single note, secured by a deed of trust, to build and finance the apartment project; that appellee advanced funds under the loan from July 12, 1973, through August 29, 1974, when appellee exercised its option to sell the loan to FNMA; that when the interest (including the $33,038.00 initial service charge and the $16,159.00 contingent financing fee) is spread over the entire 41½ year term of the loan, much less interest will be paid than the 10 percent permitted by law.

It is the law of this state that the question of usury must be determined by a construction of all the documents constituting the loan transaction, interpreted as a whole and in the light of the attending circumstances. Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046, 1048 (1937); Dorfman v. Smith, 517 S.W.2d 562, 566 (Tex.Civ. App.-Houston [lst.Dist.] 1974, no writ); Greer v. Franklin Life Insurance Co., 109 S.W.2d 305, 310 (Tex.Civ.App.-Dallas 1937, writ dism’d by agr.); Imperial Corporation of America v. Frenchman’s Creek Corp., 453 F.2d 1338, 1344 (5th Cir. 1972). It is also the rule that all parts of a contract must be given effect if it is possible to do so and that men are presumed to have intended to obey the law unless the contrary appears. Nevels v. Harris, supra 129 Tex. 190, 102 S.W.2d at 1049-1050.

In Walker v. Temple Trust Co., 80 S.W.2d 935, 936 (Tex.Com’n App.1935, opinion adopted), it is stated that

“ . . . when the contract by its terms, construed as a whole, is doubtful, or even susceptible of more than one reasonable construction, the court will adopt the construction which comports with legality. It is presumed that in contracting parties intend to observe and obey the law. For this reason the court will not hold a contract to be in violation of the usury laws unless, upon a fair and reasonable interpretation of all its terms, it is manifest that the intention was to exact more interest than allowed by law.”

We have concluded that the contract documents, when construed together, clearly provide for only one 41½ year loan made by American Mortgage Company to appellant to finance the construction of the Spanish Village Apartment project; that this loan was evidenced by a single mortgage note dated July 12, 1973, maturing December 1, 2014, payable to American Mortgage Company or order, in the original principal sum of $1,651,900.00, with interest at seven percent per annum and secured by a single deed of trust. Under the terms of the note, appellant incurred an obligation to make payments first of interest and then of principal and interest for 41½ years. The loan is described in the contract documents as a loan with a maturity date of December 1, 2014. The Allonge and Modification Agreement executed by the parties on August 29, 1974, reduced the note principal and the principal and interest payments to conform with the amount actually advanced by the lender pursuant to the contract documents. This transaction did not create any new loan. Likewise, the transaction whereby American Mortgage on August 29, 1974, elected to exercise its option to sell the note under the GNMA commitment and the completion of the assignment of the loan to FNMA on January 26, 1975, did not create a new loan; it was nothing but the sale of an existing loan with no change in the borrower’s obligations. In short, the whole transaction and the documents involved reflects a single loan maturing on December 1, 2014.

We also hold that the total interest provided for by the note should be spread over the entire 41⅛⅞ year'term of the note under the rule of Nevels v. Harris, supra, as adopted and applied by the Supreme Court in Tanner Development Company v. Ferguson, 561 S.W.2d 777 (Tex.1977), and again recently in First State Bank of Bedford v. Miller, 563 S.W.2d 572 (Tex.1978). Nevels stands for the proposition that the total interest (contracted for and judicially determined) should be spread over the full stated term of the loan and 129 Tex. 190, 102 S.W.2d at page 1049 laid down the following test, since referred to as the Nevels doctrine, to determine usury:

“If the contract for the use and detention of the principal debt is not a sum greater than.such debt would produce at 10 per cent, per annum from the time the borrower had the use of the money until it is repaid, it is not usurious.”

Under this test, the relevant time is not determined by whether any particular lender parts with the risk of loss before the end of the note period by selling the note to another lender; it depends solely on the period that the borrower contracts to have and does have use of the funds.

There is another equally well established rule in Nevels that requires the test for usury to be applied to the net amount of money of which the borrower had use, detention or forbearance. In further clarification of this rule, the court in Tanner, 561 S.W.2d at page 787, stated that “in cash loan transactions from which the lender deducts interest, fees, commissions or other front-end charges, the amount of dollars actually received or retained by the borrower is held to be the ‘true’ principal. In such cases, the amount of the stated principal is reduced accordingly in testing for usury.”

In arriving at the “true” principal in the instant case, we must deduct the initial financing fee of $33,038.00 from the stated amount of the note. When this is done, the total principal and interest which appellant could have been lawfully obligated to pay during the 41 ½ year term of the loan at the maximum legal rate of 10 percent per an-num would be $6,563,609.66. On the other hand, the total principal and interest (including finance charges treated as interest and interest of 7 percent per annum stipulated in the note) to be paid by appellant and HUD between July 12, 1973, and December 1, 2014, under the terms of the note will be the sum of $4,958,192.31. Since the total principal and interest of $6,563,609.66 chargeable at the maximum rate of 10 percent per annum exceeds the total principal and interest of $4,958,192.81, including HUD payments contracted for under the terms of the note at the rate of 7 percent per annum, the loan is clearly not usurious. Furthermore, if the contingent financing fee of $16,159.00 paid by appellant on August 29, 1974, is deducted from the stated amount in arriving at the “true principal,” the loan still would not be usurious. Appellant’s first point of error is accordingly overruled.

Under its second point of error, appellant contends that the disclaimer of usurious intent contained in a rider to the note does not affect this transaction which it asserts is usurious by its terms. We disagree. In the first place, the transaction herein is not usurious by its terms. The Supreme Court in Nevels v. Harris, supra 129 Tex. 190, 102 S.W.2d at 1050, construed the effect of an identical savings clause in that contract, which also was not usurious by its terms, as follows:

“If this last provision [referring to the savings clause] can be given effect, and, as already said, it must be given some effect if it is reasonably possible to do so, it must be held to operate to deny the noteholder the right, in any event, to collect usury. In other words, it denies the noteholder the right to collect more than the principal debt and 10 per cent, interest per annum from the time the borrower had the use of the money until he should repay it. This is plain because this clause of the contract expressly states that it is the intention of the parties to conform strictly to the usury laws now in force, and that ‘any of said contracts for interest shall be held to be subject to reduction to the amount allowed under said usury laws,’ etc. (Emphasis ours.) ... In other words, had the principal been matured at the end of one year by authority of one or more of the default maturity clauses contained in the deed of trust, under the clause under discussion, the noteholder would have been obligated, not only to cancel the unearned interest notes, but to reduce his first $512 interest note and even the $6,400 note to an amount that would render the loan free from usury. This is the plain import of the provision last above quoted . . . .”

The court in Nevels then made it clear that such a disclaimer or savings clause cannot be used to remove the taint of usury from a contract usurious by its terms when it followed up and said:

“Of course we do not mean to hold that a person may exact from a borrower a contract that is usurious under its terms, and then relieve himself of the pains and penalties visited by law upon such an act by merely writing into the contract a disclaimer of any intention to do that which under his contract he has plainly done.” (supra at 1050)

In Imperial Corporation of America v. Frenchman’s Creek Corp., supra at 1341, relied upon by the court in Tanner, the deed of trust contained a similar savings clause. The Fifth Circuit held that the effect of a savings clause is to require “spreading” under the doctrine of the Nevels case; it further stated:

“Our conclusion that the loan lasted until the' due date of the extension note gives effect to the parties’ intention evident in the savings clause when their agreement is open to more than one interpretation on the question of the date the loan was to terminate.” (supra at 1346)

Appellant’s second point of error is overruled.

In view of our disposition of the first two points, we do not find it necessary to address appellant’s third point of error.

The judgment of the trial court is affirmed.

        . Article 5069-1.01(a). This and all other statutory references are to Vernon’s Annotated Texas Civil Statutes unless otherwise noted.


source: Caselaw Access Project

author: McDONALD, Chief Justice.

license: Public Domain

text:
    John W. KRAUS, Jr., Individually and as Next Friend of his Minor Son, John L. Kraus, and Fred Petty and Wife Letty Petty, Appellants, v. The ALAMO NATIONAL BANK OF SAN ANTONIO and Kelly Salvage Company, Inc. V. John W. Kraus, Individually and as Next Friend of his Minor Son John L. Kraus, Appellees.
    No. 5967.
    Court of Civil Appeals of Texas, Waco.
    Aug. 9, 1979.
    Rehearing Denied Sept. 13, 1979.

      Fred A. Semaan, Goodstein & Semaan, Sam C. Bashara, Law Offices of Sam C. Bashara, San Antonio, for appellants.
    Jack Hebdon and Thomas H. Crofts, Jr., Groce, Locke & Hebdon, F. W. Baker, Matthews, Nowlin, Macfarlane & Barrett, R. H. Mercer, House, Mercer & House, San Antonio, for appellees.
   OPINION

McDONALD, Chief Justice.

This is a personal injury and wrongful death action. John W. Kraus, Jr., individually and as next friend of his minor son John L. Kraus, and Fred and Letty Petty, the surviving heirs of Nancy Marie Kraus, sued Alamo National Bank of San Antonio and its Independent Contractor, Kelly Salvage Company, Inc., for actual and exemplary damages for Mrs. Kraus’ death and personal injuries to her son John L. Kraus, resulting from the collapse of a wall of the Old Household Furniture Store building owned by Alamo National Bank and being demolished by Kelly Salvage Company.

Trial was to a jury which found:
1) Defendant Kelly Salvage Company was negligent in its demolition of the Old Household Furniture Store building.
2) Such negligence was a proximate cause of the occurrence in question.
3) Kelly Salvage Company acted with gross negligence in demolishing the Old Household Furniture Store building.
4) Such gross negligence was a proximate cause of the occurrence in question.
5) Jack Kraus should be awarded $500,000; and John L. Kraus $500,-000; against Kelly Salvage Company as exemplary damages for the death of Nancy Marie Kraus.
6) “Do you find from a preponderance of the evidence that the demolition of the Old Household Furniture Store building was inherently dangerous work?
“Inherently Dangerous Work means that the nature of the work itself, or of the instrumentalities which must necessarily be used in doing the work, if unskillfully or carelessly done or used, involves a grave risk of serious bodily harm or death. ANSWER: We do”
7) Alamo National Bank knew, contemplated, had reason to know, or had reason to contemplate that the demolition of the Old Household Furniture Store building was inherently dangerous work when it hired Kelly Salvage Company.
8) Alamo National Bank was negligent in connection with the demolition of the Old Household Furniture Store building.
9) Such negligence was a proximate cause of the occurrence in question.
10) Alamo National Bank acted with gross negligence in connection with the demolition of the Old Household Furniture Store building.
11) Such gross negligence was a proximate cause of the occurrence in question.
12) Jack Kraus should be awarded $500,000; and John L. Kraus $500,-000; against Alamo National Bank as exemplary damages for the death of Nancy Marie Kraus.
13) Jack Kraus should be awarded $20,-000; John L. Kraus $200,000; Fred Petty $5,000; and Letty Petty $5,000. for their loss resulting from the death of Nancy Marie Kraus.
14) John L. Kraus should be awarded $25,000. for pain and suffering, and $1,000. for loss of past physical ability, resulting from the occurrence in question.

The trial court in its judgment found that Kelly Salvage Company was an independent contractor, and that there is no evidence that the demolition of the Old Household Furniture Store building would result in probable injury or death notwithstanding how skillfully or carefully the work may be done; rendered judgment on the verdict against Kelly Salvage Company for: John W. Kraus, Jr., $25,803.46 compensatory damages, and $500,000. punitive damages; John L. Kraus, $226,000. compensatory damages, and $500,000. punitive damages; Fred Petty $5,000; and Letty Petty $5,000.

The trial court decreed plaintiffs take nothing against Alamo National Bank.

Plaintiffs appeal from that portion of the judgment which decreed plaintiffs take nothing against the Bank.

Defendant Kelly Salvage appeals from that portion of the judgment which awards exemplary damages against it.

Defendant Alamo National Bank seeks affirmance of the take-nothing judgment against it; and alternatively asserts cross points seeking a reversal and remand.

The Alamo National Bank owned the Old Household Furniture Store building located across the street from the Bank in downtown San Antonio. The Bank contracted with Kelly Salvage Company to demolish the building. On September 14,1976, some 22 days after the contracted completion date, Kelly was still in process of razing the building, when around 5 PM the west wall of the building collapsed on a car driven by Nancy Marie Kraus, killing her and injuring her minor son John L. Kraus, who was a passenger in the car.

At the time the wall fell in all steel support running to the wall had been removed by Kelly. Further the structure was not demolished a story at a time. Several witnesses testified the building was leaning toward St. Mary’s Street at least four hours before the accident. At approximately 12 noon Benton Davies advised Ms. Keller an assistant vice president of the Bank that the west wall was leaning toward St. Mary’s Street and constituted a dangerous condition.

This information was immediately relayed by Ms. Keller to Bradford Breuer, Vice President of the Bank charged with the responsibility for dealing with the demolition operation. Breuer took no action whatsoever and did nothing about the information.

Plaintiffs’ Appeal Against The Bank

Point 1 asserts the trial court erred in failing to find the demolition of the Old Household Furniture Store building was inherently dangerous as a matter of law.

The question is whether the demolition of a three-story building located in a public area and adjacent to heavily trav-elled streets is inherently dangerous as a matter of law. In such situation the Supreme Court of Ohio in Covington & Cincinnati Bridge Co. v. Steinbrock, 61 Ohio St. 215, 55 N.E. 618, and the Court of Appeals of New York in Hanley v. Central Sav. Bank, 255 A.D. 542, 8 N.Y.S.2d 371 have held such demolition inherently dangerous as a matter of law. The Supreme Court of Washington in Amann v. City of Tacoma, 170 Wash. 296, 16 P.2d 601 holds to the contrary. The precise question has not been passed on in Texas.

We think whether demolition of the building here to be inherently dangerous depends on the facts in the case. Point 1 is overruled.

Point 2 asserts the trial court erred in disregarding Special Issue 6. In special issue 6 the jury found that demolition of the Old Household Furniture Store building was inherently dangerous. The witness Do-kell, a demolition expert, testified that there is inherent danger in any type of demolition; that inherent danger means that danger exists within that which is to be done; that there is a certain risk element that would be greater than many other things; that there is no way anyone can demolish anything and say they’re never going to do anything wrong, or nothing’s going to happen. The witness Villaire, a safety expert, testified that the demolition of a multistory building in an urban area is an inherently dangerous work. The evidence is ample to sustain the finding.

Alamo Bank asserts the trial court correctly disregarded Issue 6 because plaintiffs failed to request a substantially correct definition of “inherently dangerous” thereby waiving that ground of recovery.

The trial court submitted the following definition:

“Inherently Dangerous Work means that the nature of the work itself, or of the instrumentalities which must necessarily be used in doing the work, if unskillfully and carelessly done or used, involves a grave risk of serious bodily harm or death”.

Alamo objected to such definition and proposed the following definition which was refused by the trial court.

“Inherently dangerous work is work which, however skillfully performed, creates a peril, unless guarded against. If the work to be done may be safely done in the exercise of due care, although in the absence of such care injurious consequences to third persons would be likely to result, then such work is not inherently dangerous”.

We think under the record the definition submitted by the trial court substantially correct; and in any event harmless under Rule 434 TRCP; and that the trial court erred in disregarding Issue 6.

In this situation, Alamo is liable for compensatory damages by employing an independent contractor to undertake an inherently dangerous task, and liability flows to Alamo in the same manner as it would in the master-servant situation. Cameron Mill & Elevator Co. v. Anderson, 98 Tex. 156, 81 S.W. 282; Loyd v. Herrington, 143 Tex. 135, 182 S.W.2d 1003; Gragg v. Allen, Tex.Civ. App. (Waco) NWH, 481 S.W.2d 452. Alamo however is not liable for punitive damages assessed against Kelly Salvage. Fisher v. Carrousel Motor Hotel, Inc., Tex., 424 S.W .2d 627; King v. McGuff, 149 Tex. 432, 234 S.W.2d 403. Point 2 is sustained.

Point 3 asserts the trial court erred in not entering judgment for plaintiffs against Alamo National Bank for actual damages, based on the negligence findings.

The west wall of the Old Household Furniture Store building was leaning toward St. Mary’s Street, creating a substantial risk of injury to the public using the thoroughfare, which was adjacent to and adjoined the building. The witness Villaire saw the wall leaning several days before the accident, notified the City of San Antonio, and notified Paul Thompson of the news media. Villaire testified he stated that if something was not done the wall was going to collapse. TV in San Antonio carried the story and Villaire was interviewed about the matter over TV by Thompson. A number of other witnesses observed that the wall was leaning; and one of these, Benton Davies, observed the condition at about 12 noon on the day the wall collapsed at about 5 PM; went into the Bank and told Ms. Keller, an officer of the Bank, that the wall was leaning and constituted a dangerous condition; Ms. Keller immediately relayed the information to the Bank’s Vice President in charge of the demolition project; no action of any sort was taken. The wall fell into the street about 5 hours later killing Mrs. Kraus and injuring her son John L. Kraus.

The jury in Issue 8 found that the Bank was negligent in connection with the demolition of the Old Household Furniture Store building, and in Issue 9 found that such negligence was a proximate cause of the occurrence.

Alamo Bank, as the owner of the Old Household Furniture Store property, was under obligation and duty to exercise ordinary care in the use of its property to avoid injuring others on adjoining property including the public streets adjacent to the building. Atchison v. Texas & P. Ry. Co., 143 Tex. 466, 186 S.W.2d 228; City of Fort Worth v. Lee, 143 Tex. 551, 186 S.W.2d 954; Skelly Oil Co. v. Johnston, Tex.Civ.App. (Amarillo) Er.Ref., 151 S.W.2d 863; Atchison, T. & S.F. Ry. Co. v. Smith, Tex.Civ. App. (Waco) NRE, 563 S.W.2d 660, 669. Such duty is nondelegable and remains constant even if the owner employs an independent contractor as here. Kampmann v. Rothwell, 101 Tex. 535, 109 S.W. 1089; Randle v. Naugle, Tex.Civ.App. (El Paso) NWH 299 S.W. 297.

The Restatement (Second) of Torts, Sec. 414A p. 388 expresses the rule thusly:

“A possessor of land who has employed or permitted an independent contractor to do work on the land, and knows or has reason to know that the activities of the contractor or conditions created by him involve an unreasonable risk of physical harm to those outside of the land, is subject to liability to them for such harm if he fails to exercise reasonable care to protect them against it”.

The trial court should have rendered judgment against Alamo National Bank for plaintiffs actual damages based on Issues 8 and 9. Point 3 is sustained.

Point 4 asserts the trial court erred in failing to render judgment for plaintiffs against Alamo National Bank for exemplary damages.

There is evidence the wall which fell was allowed to stand unsupported, leaning toward St. Mary’s Street for some two weeks. Many persons observed the wall leaning. There was an interview over TV as to the leaning wall and the dangerous condition which it posed. The Bank was located directly across the street from the building which fell. Some five hours before the wall fell the Vice President of the Bank in charge of the demolition project was expressly warned of the leaning wall and the dangerous situation which it presented; yet the Bank did absolutely nothing to protect the safety of the travellers on the street or to block off the street.

The jury found in Issue 10 the Bank acted with gross negligence in connection with the demolition of the building; in Issue 11 that such was a proximate cause of the occurrence; and in Issue 12, that Jack Kraus should be awarded $500,000. and John L. Kraus $500,000. in exemplary damages against the Bank.

Gross negligence is that entire want of care which would raise the reasonable belief that the act or omission complained of was a result of conscious indifference to the rights or welfare of the person or persons to be affected by it. Sheffield Div., Armco Steel Corp. v. Jones, Tex., 376 S.W.2d 825.

We think the jury authorized to find as they did, and Point 4 is sustained.

Kelly Salvage Company’s Appeal

Kelly Salvage Company appeals from the judgment in favor of plaintiffs against it for exemplary damages asserting: 1) There is no evidence Kelly acted with gross negligence; 2) The trial court erred in not disregarding Issues 3 and 4; and 3) The trial court erred in rendering judgment against it for exemplary damages because as a matter of law Kelly acted with some degree of care which precludes any reasonable belief the act or omission complained of was the result of conscious indifference.

There is evidence from which the jury could conclude that Kelly’s owner and chief supervising officer at the demolition site wilfully ignored four major Occupational Safety and Health Administration (OSHA) regulations concerning the demolition of multistory buildings in urban areas; viz. the failure to obtain an engineering survey; the failure to demolish the building one story at a time; the cutting of load support members; and the failure to laterally brace the west wall of the building. There is evidence that the entire demolition procedure from the outset was unsafe; and that it was grossly reckless to remove all supports from a free-standing three-story wall. And the building was located in the busiest part of downtown San Antonio where hundreds of automobiles and pedestrians passed the location each hour.

The wall leaned for some two weeks before it fell; the matter was aired over TV; and numerous people saw the wall leaning.

We think the jury authorized to conclude that a complete lack of care was exercised by Kelly which evidenced a total conscious indifference to the welfare of persons using the street and sidewalk adjacent to the building.

All of Kelly’s points are overruled.

Alamo National Bank’s Cross Points

Alamo National Bank’s cross point 1) asserts: The jury’s award of exemplary damages to John W. Kraus, Jr., is excessive and disproportionate to the actual damages awarded. Kraus was awarded actual damages of $25,803.46 and exemplary damages of $500,000. against the Bank.

While the amount of exemplary damages should be reasonably proportional to the actual damages, no set rule or ratio can be laid down, and such amount must depend upon the facts in the particular case. Such amount depends, among other things, upon the nature of the wrong, the character of the conduct involved, the degree of culpability of the wrongdoer, the situation and sensibilities of the parties concerned, and the extent to which such conduct offends a public sense of justice and propriety.

Cain v. Fontana, Tex.Civ.App. (San Antonio) NRE, 423 S.W.2d 134. And the question of the measure of exemplary damages comes under the general rule that, where the law furnishes no legal measure of damages and they are unliquidated, the amount to be awarded rests largely in the discretion of the jury; and unless the award is so large as to indicate that it is a result of passion, prejudice, or that the evidence has been disregarded, the verdict of the jury is conclusive and will not be set aside as excessive, either by the trial court or on appeal. Tynberg v. Cohen, 76 Tex. 409, 13 S.W. 315; Bond v. Duren, Tex.Civ. App. (Waco) NRE, 520 S.W.2d 460.

Counterpoint 2 asserts the trial court erred in failing to submit a special issue on comparative negligence (as between the Bank and Kelly).

Under the facts of this case this cross point is immaterial.

Cross point 3 asserts the trial court erred in admitting into evidence Occupational Safety and Health Act (OSHA) regulations, because plaintiffs and their decedent were not with within the class of persons protected by the act.

Employees are the exclusive class of persons protected by OSHA regulations.

Nevertheless OSHA regulations are admissible into evidence as being relevant to the standards of conduct which should have been employed by a defendant.

Knight v. Burns, Kirkley & Williams Constr. Co., Inc., Ala., 331 So.2d 651; Dunn v. Brimer, 259 Ark. 855, 537 S.W.2d 164; Disabatino Bros., Inc. v. Baio, Del., 366 A.2d 508; Marshall v. Isthmian Lines, 5th Cir., 334 F.2d 131.

Dunn, supra, quoting Prosser, Torts, p. 202 (4th Ed. 1971) states “where the statute does set up standard precautions, although only for the protection of a different class of persons, or the prevention of a distinct risk, this may be a relevant fact, having proper bearing upon the conduct of a reasonable man under the circumstances, which the jury should be permitted to consider”.

All of Alamo National Bank’s cross points have been considered and are overruled.

The judgment of the trial court is reformed: (1) to set aside the degree plaintiffs take nothing against Alamo National Bank of San Antonio; (2) to decree plaintiffs recover all compensatory damages awarded by the jury, jointly and severally against defendants Kelly Salvage Company, Inc. and Alamo National Bank of San Antonio, with interest thereon at 9% per annum from May 3, 1978; (3) to decree John W. Kraus, Jr. recover $500,000. punitive damages against Alamo National Bank of San Antonio with interest thereon at 9% per annum from May 3, 1978; (4) to decree John W. Kraus, Jr. as next friend of his minor son John L. Kraus recover $500,000. punitive damages against Alamo National Bank of San Antonio, with interest thereon at 9% per annum from May 3, 1978; (5) to decree all costs of court herein are taxed ½ each against defendants Kelly Salvage Company, Inc. and Alamo National Bank of San Antonio. In all other respects the judgment is affirmed.

REFORMED AND AFFIRMED.

      . The same as John W. Kraus, Jr.

      . The jury’s award plus agreed medical and funeral bills of Nancy Marie Kraus.


author: JAMES, Justice. HALL, Justice,

text:
    James KIRKHAM, Appellant, v. Hayel SAFADY et ux., Appellees.
    No. 6067.
    Court of Civil Appeals of Texas, Waco.
    Aug. 9, 1979.
    Rehearing Denied Sept. 13, 1979.
    James R. Thompson, Thompson & Knapp, Copperas Cove, Don Busby, Temple, for appellant;
    W. B. Phillips, Bragg, Barron, Phillips & Adams, Killeen, for appellees.
   OPINION

JAMES, Justice.

This is a malicious prosecution case. Plaintiff-Appellant James Kirkham brought this suit against Defendant-Appellees Hayel Safady and his wife Nadia Safady, alleging in effect that on May 13, 1976, Mrs. Nadia Safady commenced a criminal action against him (Kirkham) by filing a complaint for disorderly conduct against him in the Justice of the Peace Court of Precinct 4 of Bell County, Texas; that Mrs. Safady also told the Justice of the Peace that “someone else was coming in from some other town on a plane to file another complaint” against Plaintiff-Appellant; that a warrant was issued for the arrest of Kirkham, and pursuant thereto he was arrested and held in custody and confinement from about 6 PM on the evening of Saturday May 15, 1976, until the following Monday, May 17, 1976, at 11:30 AM, some 41 hours in all. Kirkham further alleged that about 38 hours of this confinement was in the Kil-leen City Jail; that he was thereby deprived of his constitutional rights; that the complaint was dismissed when Plaintiff-Appellant hired counsel and demanded a speedy trial; that the purported second complaint was never filed; that for the deprivation of his liberty, and for the scorn, humiliation, and ridicule that he was subjected to, he was entitled to $50,000.00 actual damages and in addition thereto, exemplary damages.

Plaintiff-Appellant Kirkham filed his Third Amended Original Petition on April 10,1978. On April 17,1978, the day set for trial, the Defendants filed their Third Amended Original Answer which consisted of ten special exceptions to Plaintiff’s pleadings and a general denial. Hearing was had on these special exceptions, after which the trial court overruled all of same.

Trial was had to a jury which found (or failed to find as the case may be) in answer to the following numbered special issues as follows:

(1) The Defendant Nadia Safady did not have probable cause for instituting the criminal proceedings against Plaintiff Kirk-ham.

(2) Plaintiff Kirkham was innocent or not guilty of the criminal charges lodged against him by Defendant Nadia Safady.

(3) Defendant Nadia Safady made a statement to Judge Turland (the Justice of the Peace) that additional charges would be filed for the purpose of causing Plaintiff Kirkham to be imprisoned.

(4) That such statement made by Nadia Safady (as referred to in special issue No. 3 above) was false.

(5) That Defendant Nadia Safady did not have probable cause for stating to the Justice of the Peace that additional charges would be filed against Plaintiff Kirkham.

(6) Defendant Nadia Safady acted with malice in instituting the criminal charges against Plaintiff Kirkham.

(7) Defendant Nadia Safady acted with malice in making the statement that additional charges would be filed against Plaintiff Kirkham.

(7A) The conduct of the Defendants or either of them was the proximate cause of injury or damage to Plaintiff Kirkham.

(8) $35,000.00 would fairly and reasonably compensate Plaintiff Kirkham for the damages he suffered as a result of the criminal proceedings and statements made against him by Defendant Nadia Safady.

(9) Defendant Hayel Safady acquiesced in or approved the actions of his wife Nadia Safady in this matter.

(10) The jury found that Nadia Safady acted recklessly, or wilfully and maliciously, in causing the detention of Plaintiff Kirk-ham, with the design to oppress and injure Plaintiff. However, the jury failed to find that Defendant Hayel Safady so acted.

(11) The jury failed to find that Plaintiff was entitled to any exemplary damages.

(12) The jury failed to find that Plaintiff Kirkham committed the offense of disorderly conduct in the presence of the Defendant Nadia Safady on the occasion in question.

(13) The jury failed to find that Defendant Nadia Safady had probable cause to believe that Plaintiff Kirkham had committed the offense of disorderly conduct in her presence when she signed the complaint in the office of the Justice of the Peace.

(14) The jury failed to find that Plaintiff Kirkham committed an assault upon Defendant Nadia Safady.

(15) This was a damage issue, submitted conditionally upon a “yes” answer to Special Issue No. 14, which was unanswered by the jury, and no answer thereto was necessary.

(16) The jury failed to find that Plaintiff Kirkham committed an assault upon third-party Plaintiff Camilla Safady, the daughter of Defendant-Appellees.

After verdict, Defendants filed a motion for judgment non obstante veredicto asserting, among other things, that Plaintiff’s pleadings failed to state a cause of action for malicious prosecution.

The trial court granted Defendants’ motion for judgment non obstante veredicto, and thereupon entered judgment that Plaintiff Kirkham take nothing, from which he appeals. Said judgment contains recitations setting out the reasons for entry of the take-nothing judgment as follows: _ there are no pleadings herein to support any cause of action for malicious prosecution in that there is no allegation in any of the pleadings herein that defendant or either of same instituted or caused to be instituted a criminal prosecution against plaintiff without probable cause, there is no pleading that the prosecution instituted by defendant Nadia Safady terminated favorably to plaintiff by reason of the facts, and there is no pleading alleging that plaintiff was innocent of the charges filed against him, and the Court having further found that all issues submitted as to the above stated elements of a cause of action for malicious prosecution were duly objected to by the defendant upon the ground that each of same was not raised by any pleadings herein, and that by reason thereof said issues should be disregarded as not being supported by any pleadings herein _”

Plaintiff-Appellant asserts two points of error complaining of the trial court’s granting of Defendants’ motion for judgment non obstante veredicto, the second point being that said motion was granted on the grounds of faulty pleading on the part of Plaintiff. We sustain this point of error and thereby reverse the cause and remand same in the interest of justice to the trial court for retrial on the merits.

A trial court is authorized to enter judgment non obstante veredicto only if a directed verdict would have been proper. Rule 301, Texas Rules of Civil Procedure; Sanders v. Harder (Tex.1950) 148 Tex. 593, 227 S.W.2d 206, 210; Masco International, Inc. v. Stokley (Eastland Tex.Civ.App.1978) 567 S.W.2d 598, 600, NRE; Eastep v. Jack-in-the-Box, Inc. (Houston 14th Tex.Civ.App. 1977) 546 S.W.2d 116, 117, NRE; Jack Criswell Lincoln Mercury, Inc. v. Tsichlis (Beaumont Tex.Civ.App.1977) 549 S.W.2d 255, 257, no writ. To sustain the action of the trial court in granting the motion for judgment notwithstanding the verdict, it must be determined that there is no evidence upon which the jury could have made the findings relied upon. Douglass v. Panama, Inc. (Tex.1974) 504 S.W.2d 776, 777; Leyva v. Pacheco (Tex.1962) 163 Tex. 638, 358 S.W.2d 547, 550; Burt v. Lochausen (Tex. 1952) 151 Tex. 289, 249 S.W.2d 194, 199.

In the case at bar, the recitations as hereinabove quoted in the judgment non obstante veredicto show that such judgment is based upon insufficient pleadings of Plaintiff. This is not a proper basis for the entry of a judgment N.O.V., according to the above-cited authorities.

Our Supreme Court has held that where there is no irreconcilable conflict in the jury findings, it is the ministerial duty of the trial judge to enter a judgment on the verdict, and the matter involves no judicial or discretionary powers. Traywick v. Goodrich (Tex.1963) 364 S.W.2d 190, 191.

Sustaining of the above-stated point of error asserted by Plaintiff-Appellant requires a reversal of the judgment. Having found error in the judgment, we remand to the trial court for retrial on the merits in the interest of justice under the rule laid down in Morrow v. Shotwell (Tex.1972) 477 S.W.2d 538; Scott v. Liebman (Tex.1966) 404 S.W.2d 288; Kandy, Inc. v. Presslor (Waco Tex.Civ.App.1977) 556 S.W.2d 99, NRE; Sekula v. Chaparral Energy Corp. (Waco Tex.Civ.App.1978) 570 S.W.2d 244, NRE.

REVERSED AND REMANDED.

HALL, Justice,

concurring.

I agree with the majority’s holding that a motion for judgment notwithstanding the verdict may not be properly granted upon defects and omissions of pleadings. However, as asserted by defendants as ground for affirmance of the judgment, a jury finding on an issue not pleaded and not tried by consent may be disregarded as immaterial by the court on its own motion. Camco, Incorporated v. Evans, 377 S.W.2d 703, 707 (Tex.Civ.App.—San Antonio 1964, writ ref’d n. r. e.), and authorities cited therein; Johnson v. Breckenridge-Stephens Title Co., 257 S.W. 223, 228 (Tex.Com.App. 1924, judgment adopted). If any finding essential to plaintiff’s cause of action was properly disregarded by the trial court under that rule, then it is our duty to affirm the judgment because “an appellate court will sustain the judgment of a trial court if it is correct on any theory of law applicable to the case, and that regardless of whether the trial court gives the correct legal reason for the judgment he enters, or whether he gives any reason at all.” Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73, 84 (1939).

The elements of a suit for malicious prosecution based upon the prosecution of a criminal action against plaintiff by defendant are: (1) the commencement of the criminal prosecution against plaintiff, (2) caused by defendant or through his aid or cooperation, (3) which terminated in plaintiff’s favor; (4) that plaintiff was innocent of the charge brought against him; (5) that the criminal charge was filed by defendant without probable cause, and (6) with malice; and (7) that plaintiff was thereby damaged. Flowers v. Central Power & Light Co., 314 S.W.2d 373, (Tex.Civ.App. —Waco 1958, writ ref’d n. r. e.); Williams v. Frank Parra Chevrolet, Inc., 552 S.W.2d 635, 637 (Tex.Civ.App.—Waco 1977, no writ). As shown in the majority opinion, the jury found in plaintiff’s favor on all of those elements.

I shall not detail plaintiff’s pleadings. It is sufficient to say that he expressly alleged every element set forth above except want of probable cause for the filing of the complaint by defendants. However, he did allege that the complaint against him “was dismissed when he hired counsel who demanded a speedy trial.” Defendants filed many exceptions to plaintiff’s pleadings, but they did not except on the ground that plaintiff failed to plead the element of want of probable cause. In the absence of the special exception the petition must be liberally construed in plaintiff’s favor on the question. Scott v. Gardner, 137 Tex. 628, 156 S.W.2d 513, 515 (1941). In the light of that rule, I would hold that plaintiff’s allegation that the complaint was dismissed when he employed legal counsel and demanded a speedy trial may be reasonably construed as alleging that there was not probable cause for the filing of the complaint.

Defendants also alleged in their motion for judgment non obstante veredicto that the jury’s answers to special issues one through ten were not supported by any evidence. If that ground is valid, then the motion was properly granted and the judgment must be sustained under the rule in Gulf Land Co. v. Atlantic Refining Co., supra. However, without setting forth the proof, it is my view that there is evidence to support all of those findings. Defendants do not argue otherwise.

Accordingly, I agree with the majority that the judgment must be reversed.

Defendants have a cross point in which they contend that the evidence is factually insufficient to support the jury’s award of $35,000.00 damages to plaintiff. It is my view that under the whole record the cross point presents a valid complaint. I would sustain it and remand the case for retrial upon that basis. Jackson v. Ewton, (Tex.1967) 411 S.W.2d 715, 717.


author: OSBORN, Justice.

text:
    James H. WHITE, Appellant, v. Reuben LARSON, Individually and d/b/a Interstate Realty Company, Appellee.
    No. 6840.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 15, 1979.

      Edwards, Belk, Hunter & Kerr, Frank H. Hunter, El Paso, for appellant.
    Charles E. Anderson, Milton D. Wyrick, El Paso, for appellee.
   OPINION

OSBORN, Justice.

This case involves the rights of real estate agents to a commission under two different Listing Contracts involving the same property. Suit was filed by Appellant to obtain a declaratory judgment as to his right to a commission under the earlier contract. The Appellee filed a cross-action for damages alleging a wrongful interference with his contract which was in existence when the sale was made. Based upon a jury verdict, judgment was entered for Appellee. We reverse and render.

On November 27, 1973, Johnny Garren signed a listing contract with the James C. White Realty Company authorizing the latter to show and offer for sale approximately twenty-eight acres of land and improvements in Dona Ana County, New Mexico, known as the Lazy “S” Ranch. The listing contract included the usual sales information, described the property and existing liens and contained the following clause:

For and in consideration of $1.00 paid in hand and services rendered and to be performed, the undersigned owner hereby employs the James C. White Realty Company, Realtors, and associates (collectively referred to as ‘Agent’) as sole and exclusive sales agent to sell for said Owner the above described property for the price and terms specified, or for any other price and on any other terms and conditions that shall be accepted by Owner; and if sold during the term of this listing or sold thereafter, in whole or in part, if the Agent is the procuring cause of such sale, Owner agrees to pay to said Agent a commission of 6% of the sale price of said property.

That contract expired on September 30, 1974. A new contract dated November 11, 1974, extended the listing to December 31, 1974, and also had the same clause as to the agent’s commission.

During the period covered by these listing agreements, Mr. Conke Viramontes, an agent with the White Realty Company, showed the property to Jose Diaz on two occasions and on several occasions discussed a possible sale with him. No offer was ever made prior to termination of the second listing which expired at the end of 1974.

Some time in late 1974, George Luther, an agent with Interstate Realty Company, contacted Mr. Garren and got a listing contract and placed sales signs on the property. When he was advised that White Realty Company still had a contract on the property, he destroyed the contract and took down the signs. On January 10,1975, he obtained a new listing contract and again put up signs on the property. This contract called for a $25,000.00 commission and it provided:

For and in consideration of the agreement of the Agent, as hereinafter defined, to exercise diligence to sell the property described on the reverse side hereof, as evidenced by said Agent’s acceptance of this listing, the undersigned Owner hereby employs Interstate Realty Company . Realtor, as the sole and exclusive agent, except only as hereinafter provided, with the exclusive right to sell the property for said Owner until May 10 . 19 75 . at 11:00 P.M., for the price and upon the terms specified or for such other price or upon such other terms or trade, as may be acceptable to the Owner. Owner agrees to sell the property for the said price and upon the terms specified herein.

This contract had a provision for payment of the commission if the agent was the procuring cause of a sale within 120 days after the expiration of the contract.

Both Mr. White and Mr. Viramontes testified that they did not know about the listing contract with Interstate Realty Company. The property was listed with Multiple Listing Service of which the White agency was a member, but Mr. White testified his agency did not use Multiple Listing Service on farm property.

On or about April 3, 1975, Mr. Diaz contacted Mr. Viramontes to see if the property was still for sale and to make an offer. Mr. Viramontes contacted Mr. Garren who told him to call his attorney. Mr. Vira-montes and Mr. Diaz met with the attorney and a sales contract was signed for a price of $310,000.00 and for a commission to the White agency of $17,000.00. On the same date, Mr. Garren contacted Interstate Realty Company and made an agreement that if he, Mr. Garren, sold the property himself the commission to Interstate Realty Company would be 1% of the sales price. The closing statement provided for payment of $17,000.00 to White Realty Company and $3,100.00 to Interstate Realty Company.

On trial of the case, the jury found White or his agent, Viramontes, knew or should have known of the listing contract with Interstate Realty Company; that White or Viramontes interfered with such contract; that such interference was willful and intentional; that Viramontes first showed the property to the ultimate purchaser and was the producing cause of the sale; that the interference was a proximate cause of any money loss to Interstate Realty Company; damages of $9,400.00; that White and Vira-montes acted with malice and that exemplary damages should be assessed in the sum of $25,000.00. The trial Court entered judgment on the verdict, and then ordered a remittitur of $22,000.00 of exemplary damages and such remittitur was filed.

By his First Point of Error, Appellant complains of the error of the trial Court in overruling his motion for instructed verdict. One of the grounds asserted was that the tort of willful interference with a contract requires that the conduct be without legal justification, and that by the listing contract the White agency had the right to sell even after its contract expired if it was the procuring cause of the sale. Thus, it was asserted in the trial Court, and now in the first point of error, that a basic element of the cause of action was not established.

It appears that Mr. Garren gave both White Realty Company and Interstate Realty Company what is generally referred to as an “exclusive agency to sell.” In Baker v. Skipworth, 244 S.W.2d 299 (Tex.Civ.App.—Fort Worth 1951, writ ref’d), the court said:

A clear distinction is drawn between the appointment of a broker as an “exclusive agent to sell” and the granting to him the “exclusive right to sell.” In the former contract, the owner does not surrender his own right to sell the property and in the event he does so, is under no obligation to pay a commission to the broker. In the latter case, the broker is entitled to his commission if owner makes sale during the life of the contract.

But, since the sale was clearly not made by the owner, the issue remains as to the effect of the language in the White listing agreement which provides for a commission if the property is sold after the term of the exclusive listing and the agent is the procuring cause of such sale. We believe the only conclusion that can be reached is that where a contract gives an agent a right to a commission after the “exclusive agency” has expired, the agent still has a right to complete a sale where he is “the procuring cause of such sale.” That clause is written into the contract for a very valid reason. If an agent works for a substantial period of time with a prospective purchaser but is unable to complete a sale before the listing expires, all efforts are lost. But by knowing he has a right to a commission for work done before the listing expires, if a sale is completed after the expiration date, the agent will continue to use his best efforts to complete a sale, thus accomplishing the basic purpose for which the contract was originally made. To hold otherwise would be to void a part of the contract and destroy a valuable right expressly conferred upon the real estate agent. See Kaye v. Coughlin, 443 S.W.2d 612 (Tex.Civ.App.—Eastland 1969, no writ); Limberopoulos v. Tom Fannin and Associates, 17 Ariz.App. 35, 495 P.2d 475 (1972); Brokers’ Fees—Sale After Listing, Annot., 51 A.L.RM 1149 at 1161 et seq. (1973).

Having concluded that White Realty Company had a right to sell the property since it was the “procuring cause of such sale,” we now turn to the issue of what rights, if any, Interstate Realty had by reason of their “exclusive agency” at the time the sale was completed.

The law certainly recognizes a cause of action for interference with contractual rights. See Harper & James, 1 Law of Torts Ch. VI (1956), and Prosser, Torts, Sec. 129 (4th ed. 1971); Contractual Interference—Realty Brokers, Annot., 34 A.L.R.Sd 720 (1970). This Court has recently considered cases where damages were sought for tortious conduct involving contractual rights and obligations. Armendariz v. Mora, 553 S.W.2d 400 (Tex.Civ.App.—El Paso 1977, writ ref’d n. r. e.); Herider Farms-El Paso, Inc. v. Criswell, 519 S.W.2d 473 (Tex.Civ.App.—El Paso 1975, writ ref’d n. r. e.).

One of the earliest Texas cases to consider such a cause of action was Tidal Western Oil Corporation v. Shackelford, 297 S.W. 279 (Tex.Civ.App.—Fort Worth 1927, writ ref’d). Quoting from 15 Ruling Case Law 63, the court stated the law as follows:

“A prima facie case of wrongful interference with a contract is made out if there are alleged: (1) Intentional and willful acts; (2) calculated to cause damage to plaintiffs in their lawful business; (3) done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendant (which constitutes malice); and (4) actual damage and loss resulting.”

The court in its opinion went on to say:

It may be conceded for the purposes of argument that it is not necessary in every case that the party interfering shall have acted with malice, express or implied, but we think it must certainly be held, as indicated in the quotations above from R.C.L., and from the case of Lytle v. G., H. & S. A. Ry. Co., [100 Tex. 292, 99 S.W. 396,] that the acts of interference to be actionable must have been knowingly done without right or justifiable cause.

The court ended up concluding that where a party had a contractual right to do the very thing about which complaint was made, there was a legal right or justification and no cause of action would arise out of such conduct. The court noted that: “The proper exercise of a legal right cannot constitute a legal wrong for which an action will lie.”

In a case involving contractual rights by two different firms to do the printing work of certain magazines, a similar issue was presented. In deciding their respective rights, the court in In re Farrell Publishing Corporation, 165 F.Supp. 40 (U.S.D.C., New York 1958), said:

The law is clear that where a party acts to further its own advantage and has a present existing economic interest to protect such as a prior contract of its own, it is privileged to prevent performance of the contract of another which threatens it. Prosser on Torts, 2nd Ed., p. 737; Carpenter, “Interference with Contract Relations,” 41 Harvard Law Review 728, 746-747; 4 Restatement of Torts, § 773; Knapp v. Penfield, Sup.Ct. Ny.Co. 1932,143 Misc. 132, 256 N.Y.S. 41; Williams v. Adams, 1st Dept. 1937, 250 App.Div. 603, 295 N.Y.S. 86; Messine v. Continental Purchasing Co., 1936, 272 N.Y. 125, 5 N.E.2d 62; Lawless v. Brotherhood of Painters, 1956, 143 Cal.App.2d 474, 300 P.2d 159. See, also, Tidal Western Oil Corp. v. Shackelford, Tex.Civ.App. 1927, 297 S.W. 279, 280, 281; Quinlivan v. Brown Oil Co., 1934, 96 Mont. 147, 29 P.2d 374; Morrison v. Frank, Sup.Ct.N.Y.Co. 1948, 81 N.Y.S.2d 743; Conway v. Skelly Oil Co., 10 Cir., 1931, 54 F.2d 11.

Later on in that same opinion, the court quoted from the decision in Lawless v. Brotherhood of Painters, 143 Cal.App.2d 474, 300 P.2d 159 (1956), where the court noted:

If two parties have separate contracts with a third, each may resort to any legitimate means at his disposal to secure performance of his contract even though the necessary result will be to cause a breach of the other contract.

We conclude that where there existed a right upon the part of the White Realty Company to a commission, if it be the procuring cause of the sale, after the exclusive agency expired, and thus a right to complete a sale under those circumstances, there did exist a legal right and justification to make such sale and there exists no cause of action in favor of Interstate Realty Company. Since the facts as to the contractual rights of White Realty Company and it being the producing cause of the sale were established without dispute and as a matter of law, we conclude the motion for instructed verdict should have been granted. The Appellant’s point of error number one is sustained. It is not necessary that we pass upon the other points of error. The judgment of the trial Court is reversed, and judgment rendered for the Appellant denying all relief sought by the Appellee.


author: WARD, Justice.

text:
    Richard A. KNAPP, Appellant, v. CITY OF EL PASO et al., Appellees.
    No. 6850.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 15, 1979.
    Rehearing Denied Sept. 12, 1979.
    Ainsa, Skipworth & Zavaleta, Robert A. Skipworth, Francis S. Ainsa, Jr., El Paso, for appellant.

      R. Wade Adkins, City Atty., David J. LaBrec, First Asst. City Atty., El Paso, for appellees.
   OPINION

WARD, Justice.

Richard A. Knapp, as a landowner, sought to temporarily enjoin the City of El Paso and its officers from annexing and interfering with the existing use of his land. His application for temporary injunction was denied, and he appeals on the one point that the trial Court abused its discretion in denying the temporary injunction. We affirm.

The City of El Paso on October 17, 1978, by ordinance, annexed 25,523.18 acres of land adjacent to the City limits, including some 3,680 acres belonging to the Appellant, Knapp. The Appellant advances two reasons why the trial Court was in error, one being that the annexation ordinance was void because it was not authorized by law or color of law. The parties are in agreement that, if the annexation ordinance is void, Knapp as a private person and property owner would have suffered some injury peculiar to himself and therefore could maintain this collateral attack on the annexation proceedings. Hoffman v. Elliott, 476 S.W.2d 845 (Tex.1972). Further, the parties are in agreement as to the various steps taken by the City in acquiring the property. The dispute arises because the City, in attempting to comply with the provisions of the Municipal Annexation Act, also had to follow its City Charter provisions requiring additional steps. Section 6, Article 970a, Tex.Rev.Civ.Stat.Ann., the Municipal Annexation Act, provides that before any city may institute annexation proceedings the governing body of the city shall provide an opportunity for all interested persons to be heard at a public hearing to be held not more than twenty nor less than ten days prior to the “institution of such proceedings.” Notice of the hearing shall be published in a newspaper and the notice shall be published “at least once in such newspaper not more than twenty (20) days nor less than ten (10) days prior to the hearing.” The statute further provides that annexation proceedings shall be brought to completion within ninety days of the date on which the governing body institutes annexation proceedings or be void.

The City of El Paso is a home rule city and as such, under Section 2, Article 1175, Tex.Rev.Civ.Stat.Ann., is given power to annex “according to such rules as may be provided by said charter not inconsistent with the procedural rules prescribed by the Municipal Annexation Act.”

Section 3A of El Paso City Charter provides for annexation by City ordinance and requires the following:

[Ujpon the introduction of such ordinance in the Council, it shall be published in the official newspaper of the City of El Paso, one time, and shall be not thereafter be acted upon unless at least thirty (30) days have elapsed after said publication, .

The following steps were followed by the City in connection with the annexation of the Appellant’s land:

1. On July 11,1978, a motion was passed by the City Council authorizing the City Clerk to initiate annexation proceedings.

2. On August 3, 1978, newspaper notice was published advising of a public hearing before the City Council on August 22, 1978, concerning the annexation. This complied with the Annexation Act requiring that notice be published not less than ten nor more than twenty days before the hearing.

3. On August 22, 1978, the public hearing was held by the City Council and motion was passed deferring further action on the matter until September 5, 1978. (The City contends this was done because the Annexation Act requires that public hearing must be held not more than twenty days nor less than ten days prior to “institution” of the annexation proceedings.)

4. On September 5,1978, the annexation ordinance was introduced at a meeting of the City Council, and resolution was then passed noting this fact, and the City Clerk was directed to publish said ordinance and notice as provided in the Charter. (As required by Section 3A of the Charter and pursuant to the resolution, a notice was then published on September 8, advising that the City Council would consider its adoption at a regular meeting on October 10.)

5. The annexation ordinance was passed on first reading on October 10, 1978, and on second reading on October 17, 1978.

The City contends that it not only complied with the Charter provisions, but that the annexation proceedings were completed within ninety days of September 5, 1978, as that was the date when annexation proceedings were instituted since the ordinance was introduced at that City Council meeting. On the other hand, the Appellant attacks the proceedings claiming that the Annexation Act was violated because the public hearing was on August 22 and the ordinance was not passed on first reading until October 10.

The Supreme Court has held that full compliance with the statutory requirements of notice and hearing are necessary to the validity of an annexation ordinance. City of Duncanville v. City of Woodland Hills, 489 S.W.2d 557 (Tex.1972); Fuller Springs v. State ex rel. City of Lufkin, 513 5.W.2d 17 (Tex.1974). In those two eases, the respective ordinances under consideration passed on first reading less than ten days after the public hearing and, as a result, the Court held the ordinance invalid. The Supreme Court held that passage of the annexation ordinance on first reading constituted the “institution” of annexation proceedings within the meaning of Section 6. In those cases, however, passage of the annexation ordinance on first reading was the first official act by the city council after the public hearing, and the Court did not state that passage of an annexation ordinance on first reading is the exclusive method for instituting annexation proceedings. The Court did not state that annexation proceedings could not be instituted pri- or to passage of the ordinance on first reading if an additional procedural step be required because of city charter provisions. Here, on September 5th the annexation ordinance was introduced at a City Council meeting, and at that meeting the resolution was passed directing the City Clerk to make the publication required by the City Charter. We hold that the introduction of the ordinance was sufficient to meet the statutory requirement when the governing body institutes the annexation proceedings. This interpretation is consistent with Section 2, Art. 1175, Tex.Rev.Civ.Stat.Ann., requiring that annexation proceedings shall continue to be conducted in accordance with “such rules as may be provided by said charter not inconsistent with the procedural rules prescribed by the Municipal Annexation Act.” Under Section 3A of the El Paso City Charter, introduction of the annexation ordinance is the City Council’s first official act after the public hearing. This harmonizes both the statute and the City Charter provision and gives them both effect. The Appellant’s first argument is rejected.

The second reason offered by the Appellant that the trial Court was in error is his claim that he had established various legal non-conforming uses of his land prior to the date of the annexation. The Appellant purchased most of the property in March, 1978. It is rough, uninhabited, mountainous land lying in the main on Mount Franklin at an elevation of from 4500 to 7200 ft. altitude. The Appellant had various plans to develop the property, and constructed extensive roads by the time of the annexation by the City. The Appellant stated that he had opened four quarries, had a partial constructed dam for a proposed lake, a barrow pit, a tin mine, and a communications site. He had been informed by the City on July 13,1978, that the City was initiating annexation proceedings and was furnished a copy of the motion dated July 11th. After that, his activities could be characterized in some ways as a race to establish non-conforming uses of his property before the annexation was completed. Knapp testified that he had spent over $200,000.00 on his activities but ceased all operations when he received what he termed a stop work order from the City. This was a letter from the City Engineers dated October 19,1978, informing him that his property had been finally annexed, and that he was to stop all grading, blasting and drilling on the property until he had secured proper permits to operate under the terms of the City’s grading ordinance. After the annexation, the land was automatically zoned residential under the City zoning ordinance.

Without going into further details, we note factual disputes as to the amount of work done before and after July 13. There is doubt as to which of his operations would be shut down permanently by the City, and it was not convincingly shown that the granting of relief by temporary injunction to preserve the status quo was required to prevent Knapp from suffering irreparable injury. As the Supreme Court has on several occasions recently said, the merits of the underlying case are not presented for appellate review in an appeal from an order granting or denying a temporary injunction. Such a review is strictly limited to a determination of whether there has been a clear abuse of discretion by the trial court in determining whether the applicant is entitled to a preservation of the status quo pending trial on the merits.

Here, the trial Court could have concluded that, if the City wrongfully reduced the valuation of the Appellant’s property, it could be required to respond in damages for the inverse condemnation. Further, the trial Court could have concluded that Knapp’s contemplated uses of his property would be permitted under the zoning ordinances and under the City’s grading ordinance. The exercise by the trial Court of its discretion in denying the temporary injunction will not be disturbed. Brooks v. Expo Chemical Company, Inc., 576 S.W.2d 369 (Tex.1979); Davis v. Huey, 571 S.W.2d 859 (Tex.1978).

Appellant’s point is overruled, and the judgment of the trial Court is affirmed.


author: HALL, Justice.

text:
    Delores LANSING, Appellant, v. Leonard Wayne ALLEN, Appellee.
    No. 6015.
    Court of Civil Appeals of Texas, Waco.
    Aug. 16, 1979.
    Rehearing Denied Sept. 13, 1979.

      W. Mac Gann, Lennon C. Wright, Miller, Gann & Perdue, Houston, for appellant.
    Alice Giessel, Howell E. Stone, Talbert, Giessel & Stone, Houston, for appellee.
   HALL, Justice.

A passenger car driven by plaintiff Delores Lansing and a pickup truck driven by defendant Leonard Wayne Allen collided head-on on plaintiff’s side of the roadway. Plaintiff brought this suit for her personal-injury damages. The case was tried to a jury. The jury failed to find that defendant committed any act of negligence submitted against him, which were speed, lookout, brakes, and failure to keep his vehicle completely within his right half of the roadway. The jury failed to find that plaintiff acted negligently on issues of lookout and brakes; but they convicted her of negligently failing to turn her vehicle to avoid the collision, and found that such negligence was a proximate cause of the collision. The jury also set plaintiff’s damages at $750.00 for past physical pain and mental anguish, $500.00 for future physical pain and mental anguish, $945.00 for lost earnings in the past, and $1,500.00 for past medical expenses. Judgment was rendered on the verdict that plaintiff take nothing. She appeals. We affirm the judgment.

Plaintiff contends that the findings exonerating defendant of negligence and the findings against her of negligence and proximate cause on her failure to turn her vehicle are all against the great weight and preponderance of the evidence.

The collision occurred at approximately 5:00 P.M. on Friday, May 23, 1975, in the 2800 block of Almeda-Genoa Road in the City of Houston, Texas. The location of the accident was near the middle of a curve in the road. The curve is long and gradual, and it does not obstruct the driver’s view as it is negotiated. The road is two-laned asphalt-paved and runs east and west. The pavement is about eighteen feet wide, and there is a firm shoulder four feet wide on each side of the pavement. There is an abrupt drop of approximately two inches from the top of the pavement onto the shoulder.

At the time of the collision, plaintiff was 27 years of age. She was driving a 1962 Chevrolet passenger car which was in good mechanical condition, and she was familiar with its operation. Defendant was 34 years of age. He was driving a 1972 Chevrolet pickup truck which was in good mechanical condition and equipped with a new set of tires, and he was familiar with its operation.

Both parties suffered personal injuries in the collision. There were no other witnesses to the accident. Among other injuries, plaintiff sustained a cerebral concussion. She testified she has no memory of the facts surrounding the collision.

Defendant testified that prior to the collision he was traveling in the westbound lane of Almeda-Genoa Road at about forty miles per hour. The weather was clear, and the traffic was light. He had stopped at a service station located on Almeda-Genoa Road about nine miles from the place of the accident and purchased gasoline, a beer, and cigarettes. This was the first time he had traveled this route. He took it on this occasion, after work and on the way to a bakery surplus store, to avoid heavy traffic. He noticed there was a pavement-shoulder offset. After he had entered the curve in the road, which curved to his right, he reached with his right hand for a box of matches resting on the right side of the dash of his truck, intending to light a cigarette. The beer was between his legs. When he reached for the matches his left hand pulled the steering wheel to the right and the two right wheels of his vehicle went onto the shoulder of the road about one foot off the pavement. He did not apply his brakes, but he took his foot off the accelerator pedal to slow down. He did not lose control of the truck. He traveled with his right wheels on the shoulder about 30 or 40 feet, “just long enough to set back straight under the steering wheel,” at which time he had “complete control of the vehicle.” He then cut his wheels slightly to the left to get back onto the pavement. When he did, his wheels hit the offset on the edge of the pavement and it jerked his truck and threw it across the road and into a skid, and he lost control. Once he started skidding he could not stop or change directions. He tried to stop, his brakes locked, and he couldn’t turn the car because the brakes were locked. He skidded out of control at a gradual angle, into plaintiff’s lane, skidding about 50 feet in his lane and about 50 feet in the other lane. He saw plaintiff coming toward him in the eastbound lane just as he entered her lane. She was three or four hundred feet down the road. He saw no other cars on the road. Plaintiff started blowing her horn when she was more than 100 feet away. He was skidding when he first saw her, and he continued skidding up to the time of the impact. Plaintiff’s car did not slow down and did not turn to either side before impact. “It just kept on honking and honking and kept coming, and we had a wreck.” Defendant had skidded almost to a complete stop at the time of impact, and was traveling “maybe five or ten miles per hour at the most.” The collision occurred on defendant’s “extreme left-hand” side of the road on the pavement. After the accident, defendant looked behind plaintiff’s car, but he did not see any skid marks.

The investigating officer testified he found 100 feet of skid marks behind defendant’s truck, from the westbound lane into the eastbound lane directly behind the truck. He also found 100 feet of skid marks directly behind plaintiff’s car. He determined the point of impact to be “two feet out from the edge of the pavement.” Plaintiff’s vehicle was partially off the pavement. He said that defendant told him, “I was on Almeda and I reached for some matches. The truck swerved into the other lane and we hit. I had been drinking one beer.” He did not recall that defendant said anything “about dropping off the asphalt.”

The posted speed limit in the area in question was not developed on the trial. Defendant believed the speed limit was 35 or 40 miles per hour. Plaintiff’s counsel thought it was 55.

It is our view and holding that the jury’s findings are not against the great weight and preponderance of the evidence.

The court charged the jury on sudden emergency, and included in the definition the instruction that the emergency must not be proximately caused by any negligence on the part of the person seeking exoneration under the doctrine. Plaintiff argues the instruction was improperly given in this case because the emergency was caused by defendant’s negligence when he “stretched out across the cab of the truck fumbling for his matches” while attempting to “simultaneously balance his refreshment.” Plaintiff also argues that defendant was guilty of negligence as a matter of law by violating the provisions of Vernon’s Tex.Civ.St. article 6701d, § 52(a), when he crossed into plaintiff’s lane. We overrule those contentions.

The unexcused violation of a statute designed to prevent injury to the class of persons to which the injured party belongs constitutes negligence per se. Moughon v. Wolf, (Tex.1978) 576 S.W.2d 603, 604. In Moughon, our Supreme Court expressly held that an unexplained violation of § 52(a) of article 6701d fits within the rule. However, the court has recognized a number of excusable situations, one being where the driver “is confronted by an emergency not due to his own misconduct.” Impson v. Structural Metals, Inc., (Tex.1972) 487 S.W.2d 694, 696. Under the latter rule, the statutory violation is excused when the motor vehicle goes out of control and enters the wrong lane of traffic, for reasons not caused by the driver. In L. M. B. Corp. v. Gurecky, (Tex.1973) 501 S.W.2d 300, the defendant’s car began to weave by reason of a deflated tire; and when he applied his brakes his car swerved to the wrong side of the highway and struck plaintiff’s car on the shoulder of the road. In Antee v. Sims, 494 S.W.2d 215 (Tex.Civ.App.—Houston [14th] 1975, writ ref’d n. r. e.), the defendant’s brakes suddenly and unexpectedly pulled him to the left into the other lane. In Phoenix Refining Co. v. Powell, 251 S.W.2d 892 (Tex.Civ.App.—San Antonio 1952, writ ref’d n. r. e.), a blow-out occurred to the tire on the left-front wheel of defendant’s truck and caused the truck to be thrown or pulled to the left side of the road.

In our case defendant explained that his truck was suddenly and unexpectedly propelled across the highway when the wheels of the vehicle encountered the offset between the pavement and the shoulder of the road as he attempted to return to the paved portion. The evidence does not establish as a matter of law that he acted negligently in the premises.

The judgment is affirmed.