author: KLINGEMAN, Justice.

text:
    PAGE AIRWAYS, INC., Appellant, v. ASSOCIATED RADIO SERVICE COMPANY, Appellee. ASSOCIATED PAGE INTERIORS, INC., Appellant, v. ASSOCIATED RADIO SERVICE COMPANY, Appellee.
    Nos. 15509, 15528.
    Court of Civil Appeals of Texas, San Antonio.
    Sept. 29, 1976.
    Rehearing Denied Jan. 5, 1977.

      Cox, Smith, Smith, Hale & Guenther, Eugene B. Labay, San Antonio, for Page Airways, Inc.
    Davis, Rigely & Fagan, Inc., Wayne I. Fagan, San Antonio, for Associated Page Interiors, Inc.

      Matthews & Thorp, Dallas, Matthews, Nowlin, Macfarlane & Barrett, San Antonio, for appellee.
   KLINGEMAN, Justice.

This is a consolidated appeal of Cause No. 15528 (Associated Page Interiors, Inc. v. Associated Radio Service Company) and Cause No. 15509 (Page Airways, Inc. v. Associated Radio Service Company). Both relate to proceedings had in Cause No. 74-CI-5899, District Court of Bexar County.

Cause No. 15528 is an appeal by Associated Page Interiors, Inc., hereinafter called “API,” from an adverse judgment entered against it in favor of Associated Radio Service Company, hereinafter called “Radio,” in the amount of $194,129.30 in a suit on a promissory note executed by API, payable to Radio. Trial was to a jury, but at the close of the evidence, the trial court withdrew the case from the jury and entered judgment for Radio.

Cause No. 15509 is an appeal by Page Airways, Inc., hereinafter called “Page,” in which Page complains of the action of the trial court in granting Radio motion to strike the intervention of Page from said suit, and also the final judgment entered in said cause in favor of Radio against API.

In 1968, Radio and Howard, Draker, Wol-tersdorf & Co. (later changed to API), commenced a business venture with Page and Page Gulfstream, Inc., a subsidiary of Page. Page acted as the authorized distributor for Grumman Aerospace, Inc. in the sale of large executive aircrafts. Radio would contract to furnish and install the radio and electronic equipment, and API would provide and install interior furniture and accessories.

During the first year, API experienced financial difficulties. Since API was a part of the business venture, it was decided that it was to the best interest of API, Radio, and Page to provide financial aid to API.

The record reveals that API executed two promissory notes in the amount of $90,-000.00 each, one to Radio, and one to Page, both dated October 2, 1969, both payable on or before November 30, 1969. Both notes provided for interest from date to maturity at the rate of nine per cent per annum, and after maturity at the highest legal rate per annum. Both notes provided on their face that each is subject to a Loan Agreement between API, Radio, and Page dated October 2, 1969.

The Loan Agreement referred to in both notes is executed by API as Borrower and Page and Radio as Lenders. It recites that Borrower desires to borrow from Radio and Page as Lenders the sum of $180,000.00, and that the Lenders are willing to make such loan upon the terms therein set forth. Under such agreement, Page and Radio are to advance the sum of $90,000.00 each to API, and API is to give two notes, as here-inbefore described, in the amount of $90,-000.00 each, one payable to Radio, and one payable to Page.

The agreement also provides:

(a) Initially, said notes shall be due on or before November 30, 1969.

(b) Such notes shall initially bear interest at the rate of nine per cent per annum, and if and when renewed, the interest shall be at the prime rate in Dallas, Texas, plus one-half of one per cent.

(c) Each of such notes shall be renewed November 30,1969 on a repayment schedule consistent with API’s financial condition and its anticipated or projected cash flow.

(d) Any payment made by API upon the obligation of $180,000.00 shall be initially paid sixty per cent to Radio and forty per cent to Page, but upon maturity any payments shall be received and applied equally by Page and Radio.

(e) Past due principal and interest on each note shall bear interest at the highest legal rate.

On November 21,1973, Radio filed suit in the 95th Judicial District Court of Dallas County, Texas against API, Page Gulf-stream, Inc., Page, and Ross C. Chapin, asserting two causes of action: (1) a suit on API’s promissory note to Radio, alleging default thereunder; (2) a suit for conversion against Page Gulfstream, Page, and Chapin for wrongful appropriation and conversion of the property of API.

API subsequently filed a plea of privilege asking that such suit be transferred to Be-xar County, Texas, the place of its residence. Defendants, Page and Page Gulf-stream, Inc., filed a motion to sever, alleging that Radio’s petition set up two causes of action, one a suit on a promissory note against API, and one for conversion against Page and Page Gulfstream, and asks that Radio’s alleged cause of action against Page and Page Gulfstream be severed from the other cause of action in said case.

The Dallas Court thereafter granted API’s plea of privilege to Radio’s cause of action against it on the note and transferred the same to Bexar County, Texas. The Dallas Court also sustained Page’s and Page Gulfstream’s motion to sever the claim for conversion, and this portion of the case was retained by the Dallas Court.

On January 7, 1975, Page filed a petition in intervention in the Bexar County case, seeking a declaratory judgment that Page be paid upon the same basis as Radio and that payments be applied equally to Page and Radio. An amended plea in intervention was thereafter filed, seeking additional affirmative recovery against API on the $90,000.00 promissory note given by API to Page. Page asserted that it had an interest in the matter in controversy and was a necessary and indispensable party because it had a promissory note identical to Radio’s, both of which were subject to the Loan Agreement; that it is also a stockholder and creditor of API; and that any judgment rendered would necessarily involve the construction and interpretation of the notes and Loan Agreement and would adjudicate, determine, prejudice, or be binding on the interests of Page.

On April 9, 1975, five days before the case was to go to trial, Radio filed an unverified motion to strike Page’s intervention, and on April 11, 1975, the trial court granted Radio’s motion to strike and such intervention was struck from said cause and dismissed without prejudice.

The trial to a jury commenced on April 14, 1975, and on April 17, 1975, the court withdrew the case from the jury and judgment was subsequently entered that Radio recover from API the sum of $194,129.30, interest at the rate of ten per cent per annum from and after April 18, 1975, and all costs of this suit.

Page and API assert similar points of error and they will be discussed together herein. For the purpose of this opinion, such points of error will be diseussed under two general categories. (1) Points of error asserting that the trial court erred in granting Radio’s motion to strike Page’s intervention and proceeding to trial without the presence of Page; (2) Points of error pertaining to the merits.

Points of Error Pertaining to Page’s Intervention

Page, by six points of error, asserts that the trial court erred in granting Radio’s motions to strike the intervention of Page because (1) Page is a necessary and indispensable party to the proceedings; (2) Page’s petition in intervention asserts both legal and equitable grounds justifying such intervention; (3) Radio did not establish sufficient cause justifying the court’s action; (4) Radio waived such plea by allowing Page to intervene and conduct discovery proceedings and participate in depositions without objections; (5) and (6) the trial court erred in granting Radio’s motions to strike on account of the pendency of Cause No. 73-8757 — D in the 95th Judicial District Court of Dallas County, Texas, because (a) Radio failed to file a proper verified plea in abatement as required by the Texas Rules of Civil Procedure; (b) Radio failed to plead and prove that such suit involves the same subject matter.

Although not specifically assigned as a point of error, it is clear from Page’s brief that it also contends that the court erred in granting Radio’s motion to strike because such motion to strike was not filed until five days prior to the trial and was granted two days later.

API also asserts these points of error, but also emphasizes that the effect of striking Page’s intervention and proceeding to trial without Page’s presence was to subject API to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of Page’s claimed interest in violation of Rule 39(a)(2)(ii), Tex.R.Civ.P.

By counterpoints, Radio asserts that the trial court did not err in dismissing Page’s petition in intervention because (1) the trial court did not have jurisdiction over the subject matter involved in said intervention because the 95th Judicial District Court of Dallas County, Texas had previously acquired exclusive jurisdiction over same; (2) Page is estopped from asserting it is an indispensable party because of prior inconsistent allegations and statements; (3) the action of the trial court complied with the objectives, intents, and purposes of the Rules of Civil Procedure; (4) Radio did not waive its motion to strike by allowing Page to intervene, conduct discovery, and participate in depositions, without objections; (5) Radio’s motion to strike was filed with leave of the court and was not contrary to any pre-trial order; (6) Radio’s motion to strike did not need to be verified, and Page waived such lack of verification before the trial court ruled on it; (7) Radio did plead and prove that Cause No. 75-8757-D, pending on the 95th Judicial District Court of Dallas County, Texas, involved the same subject matter.

A basic point of dispute is as to the subject matter of the Dallas suit and the San Antonio suit, with Radio contending that the subject matter is the same, the note and the attending Loan Agreement, and Page contending that the Dallas suit against it is only concerned with Page’s alleged conversion of API’s assets. Radio’s original petition, filed in the District Court of Dallas County, Texas, set up two causes of action: (1) a suit against API on its promissory note to Radio; (2) a suit against Page, Page Gulfstream, and Chapin for wrongful appropriation and conversion of the property of API. The only portion of the suit which was transferred to Bexar County, Texas was the suit on the note against API after the filing of a plea of privilege by API. The other portion of such suit (conversion and wrongful appropriation by Page et al. of property of API) was retained by the Dallas Court and is still pending in such Court.

We do not regard the subject matter of the pending suit in Dallas and the suit tried in San Antonio, now before us, as identical and the same.

Radio’s next contention is that Page is estopped from asserting it is an indispensable party because of prior inconsistent pleadings and assertions. Such contention is based upon allegations in Page’s motion to sever, filed in Dallas, which, after setting forth that Radio’s petition alleges two causes of action, one against API on a promissory note, and one against Page for alleged conversion, alleges that the causes of action alleged against Page and Page Gulfstream do not arise out of or are incident to, or have common questions of law and fact with, the main suit for debt against API.

In support of its contention, Radio relies on the line of cases which set down a general rule that a party will not be allowed in a subsequent judicial proceeding to take a position in conflict with a position taken by him in a former judicial proceeding where the latter position is to the prejudice of the adverse party and the parties and the questions are the same. See Smith v. Chipley, 118 Tex. 415, 16 S.W.2d 269 (Tex.Com.App.1929). We do not regard such allegations and statements, when taken in the context with the situation existing in the Dallas Court at that time, as violating such rule. Insofar as the record before us reflects, API’s note to Page was not in default and had not been matured at such time. Under the record, we have concluded that the suit for conversion against Page and the suit for debt against API are different causes of action; they are not based primarily on the same original transaction; and the parties and the questions are not the same.

It is well established in Texas that where two or more instruments executed contemporaneously or at different times pertain to the same transaction, the instruments will be read together even though they do not expressly refer to each other. Board of Ins. Com’rs v. Great Southern Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803 (1951); Pendleton Green Associates v. Anchor Savings Bank, 520 S.W.2d 579 (Tex. Civ.App. — Corpus Christi 1975); Texas State Bank of Austin v. Sharp, 506 S.W.2d 761 (Tex.Civ.App. — Austin 1974, writ ref’d n. r. e.); Mann v. Perry, 486 S.W.2d 853, 859 (Tex.Civ.App. — Houston [14th Dist.] 1972); Asgrow Seed Company v. Gulick, 420 S.W.2d 438 (Tex.Civ.App. — San Antonio 1967, writ ref’d n. r. e.). In the case before us the instruments specifically refer to each other, and it is established that where two or more writings are connected by reference one to another, or simultaneously made with respect to the same subject matter and as a part of the same transaction, they are to be taken and construed together as one contract. Mann v. Perry, supra; Miles v. Briggs, 18 S.W.2d 850 (Tex.Civ. App. — San Antonio 1929, writ dism’d); Sides v. Knox, 203 S.W. 65 (Tex.Civ.App.— Texarkana 1918, writ ref’d).

Rule 39, Tex.R.Civ.P., Joinder of Persons Needed for Just Adjudication, reads as follows:

(a) Persons to be Joined if Feasible. A person who is subject to service of process shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff, [(b), (c), and (d) not here pertinent.]

We have concluded that Page should have been a party to the herein proceedings under the terms and provisions of Rule 39, Tex.R.Civ.P., for the reason that Page claims an interest relating to the subject matter of the action and is so situated that the disposition of the action in his absence may “. . . (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons, already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.”

It is clear from the record before us that the note involved in the herein suit is identical in terms and provisions with another note given by API to Page, both of which notes state on their face that the note is subject to a Loan Agreement between API, Radio, and Page. It is also clear that both notes were given as a part of a business venture involving Page, Radio, and API. The Loan Agreement referred to in the notes is executed by Page, Radio, and API and creates joint rights and obligations among all of the parties, including how such notes are repayable, how they are to be extended or matured, and other rights which must be exercised jointly. The Loan Agreement specifically provides that any payments made by API on such notes are to be paid to Radio and Page in certain proportions, culminating in providing that on and after maturity any payments made by API shall be received and applied equally by Radio and Page.

It is clear that Radio and Page were joint lenders under the terms of the Loan Agreement and were, in effect, joint or copayees. In Hinojosa v. Love, 496 S.W.2d 224 (Tex. Civ.App. — Corpus Christi 1973, no writ), which was decided after the effective date of Rule 39, as amended, the plaintiff brought suit against the maker on a promissory note and obtained a judgment in default but failed to join a copayee. The court of civil appeals held that the copayee was an indispensable party, citing both Section 3.116 of the Uniform Commercial Code and Rule 39, Tex.R.Civ.P., as amended, in support of its action. Irrespective of whether or not Page was an indispensable party, it was certainly a party who should have been joined under the provisions of Rule 39, Tex.R.Civ.P., as amended.

In a recent case, Jennings v. SRP, 521 5.W.2d 326 (Tex.Civ.App. — Corpus Christi 1975, no writ), decided after the effective date of Rule 39, as amended, the Court stated:

Rule 39, Texas Rules of Civil Procedure, requires that persons having a joint interest shall be made parties and be joined as plaintiffs and defendants. The term ‘joint interest’ means joined together in interest, a united interest or an interest shared in common.

We are familiar with the case of Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d 200 (Tex.1974), which contains a rather full discussion of new Rule 39. The Court pointed out that contrary to the emphasis under Rule 39 before it was amended, today’s concern is less that of the jurisdiction of a court to proceed, and is more of a question of whether the court ought to proceed with those who are present. Such opinion cites a U.S. Supreme Court decision under its amended Rule 19, and states that one of the things such Court took under consideration in holding that an absent party was not jurisdictionally indispensable was the fact that the case had actually been tried as to those present, and there was no objection at the trial level concerning the nonjoinder of a party. In our case, the non joined party, Page, asserted that it was a necessary and indispensable party and filed an intervention in which it alleged that it had an interest in the subject matter and that any judgment rendered would necessarily involve the construction and interpretation of the note and the joint Loan Agreement and affect Page’s legal and equitable rights. We do not have the problem here involved of a person who cannot be made a party, as covered by subsection (b) of Rule 39, but a situation where Page was already before the court seeking to be heard. The eases are factually distinguishable.

In Cooper, the Supreme Court pointed out that the title of Rule 39 has been changed from “Necessary Joinder of Parties” to “Joinder of Persons Needed for Just Adjudication.” It is our opinion and we hold that, in the case before us, Page is a party whose joinder is needed for just adjudication.

For the reasons hereinbefore set forth, we have concluded that the trial court erred in granting Radio’s motion to strike the intervention of Page and proceeding to trial without Page’s presence.

Points of Error Concerning Merits

By a number of points of error, API asserts that the trial court erred in withdrawing the case from the jury and entering judgment for Radio because the pleadings and evidence show that genuine issues of fact exist as to whether or not (a) the Radio note was in default; (b) all conditions precedent to recovery on the Radio note had occurred; (c) the Radio note was extended or renewed after November 30, 1969; (d) Radio breached the Loan Agreement dated October 2, 1969 by making a unilateral demand for payment of the Radio note; (e) Radio breached the Loan Agreement by failing to renew or extend the Radio note on a repayment schedule consistent with API’s financial condition and its anticipated or projected cash flow; (f) API owed Radio any attorney’s fees; (g) Radio and API agreed to a rate of interest in excess of nine per cent per annum after maturity; (h) API agreed and stipulated to a rate of interest in excess of nine per cent per an-num.

API also urges that the trial court erred in withdrawing the case from the jury and entering judgment for Radio because the pleadings and evidence show that genuine issues of fact exist as to (a) whether the note was ever renewed; (b) whether the note was ever matured; (c) the defense of waiver of default; (d) the defense of waiver of any claim for a greater rate of interest than nine per cent per annum; (e) the defense of estoppel as to any claim of default; (f) the defense of estoppel as to any claim for a greater rate of interest than nine per cent per annum; (g) whether a confidential or fiduciary relationship existed between the parties. Page also asserts basically these same points of error.

Where the case is withdrawn from the jury and judgment rendered by the trial court, a court of appeals is required to view the evidence in the light most favorable to the losing party and to indulge against the court’s action every inference that might properly be drawn from the evidence. Du-nagan v. Bushey, 152 Tex. 630, 263 S.W.2d 148 (1953); Texas Employers’ Ins. Ass’n v. Boecker, 53 S.W.2d 327 (Tex.Civ.App. — Dallas 1932, writ ref’d).

As hereinbefore noted, the Radio note, the Loan Agreement, and the Page note must be read and construed together. Board of Ins. Com’rs v. Great Southern Life Ins., supra; Texas State Bank of Austin v. Sharp, supra; Mann v. Perry, supra; Asgrow Seed Co. v. Gulick, supra.

In support of its contention that there are disputed issues of fact as to whether the note was ever renewed or matured, API points out that the Loan Agreement provides that the note shall be renewed on November 30,1969 on a repayment schedule consistent with API’s financial condition and its anticipated or projected cash flow.

It is clear from the record that the note was never renewed on the basis set forth in the Loan Agreement, but the evidence is conflicting as to whether it was renewed, and if so, on what basis. There is testimony that the note was never renewed. There is also testimony that on December 2, 1969 the notes were discussed among the parties and it was agreed to renew the notes; there is also testimony that on this date there was an agreement to renew the notes for ninety days so as to give Mr. Brown, Radio’s Comptroller, an opportunity to prepare a current financial report on API so that it could be determined when API might begin to start making payments.

In connection with a question on whether the note was ever matured, the notes provide: “The failure to pay any installment of principal or interest when due or default under the terms of the loan agreement, . or in the opinion of Lenders jointly reached — that the interest of Lenders have been or are about to be materially adversely affected, gives the holder the right to mature same and declare the balance due and payable forthwith.” [Emphasis ours.] It is seen that this acceleration of maturity clause specifically ties in with the Loan Agreement and also provides for joint action of the lenders. Although API contends that the note was never matured, it asserts that, in any event, there is a disputed issue of fact as to whether the note was matured.

Without here passing on the question of whether the note provided for interest of eighteen per cent per annum after maturity, clearly a higher rate of interest than nine per cent was not payable until after maturity. The question of whether it was matured is clearly material. The evidence is conflicting as to whether it was matured, or if so, when it was matured.

The broad concept of estoppel is that one who by his speech or conduct has induced another to act in a particular manner ought not be permitted to adopt an inconsistent position, attitude, or course of conduct and thereby cause loss or injury to the other. Rancher v. Franks, 269 S.W.2d 926 (Tex.Civ.App.—Ft. Worth 1954, no writ); Masterson v. Bouldin, 151 S.W.2d 301 (Tex. Civ.App.—Eastland 1941, writ ref’d); 22 Tex.Jur.2d Estoppel § 1 (1961), p. 660.

Waiver or estoppel ordinarily are questions of fact, and if the evidence is conflicting as to such matters, it should be submitted to the jury. Smith v. Northwest National Bank, 403 S.W.2d 158 (Tex.Civ. App.—Texarkana 1966, writ ref’d n. r. e.); Stauffer v. Frost National Bank of San Antonio, 291 S.W.2d 743 (Tex.Civ.App.— San Antonio 1956, no writ).

Whether or not a confidential relationship exists is a question of fact. MacDonald v. Follett, 142 Tex. 616, 180 S.W.2d 334 (1944).

Appellant’s basic contentions pertaining to these matters of confidential relationship, waiver, or estoppel, are that this is a case where there are interlocking shareholders, directors, and officers; that the parties entering into the original agreement were in a type of joint venture; that it was to their joint interest and benefit to provide financial assistance to API; that the Loan Agreement executed by all the parties, API, Page, and Radio, specifically shows this intent and agreement; and that it is clear under such agreement that the initial short term notes shall be renewed on November 30, 1969 on a repayment schedule consistent with API’s financial condition and its anticipated or projected cash flow.

There is evidence that for a long period of time after November 30, 1969 Radio continued to invoice API for interest at the rate of nine per cent per annum, rather than eighteen per cent, and accrued interest on its books at the rate of nine per cent per annum, and that the Comptroller for Radio, Mr. Brown, who was in charge of such invoicing, also prepared API’s income tax returns and took an interest deduction on API’s returns on an accrual basis at the rate of nine per cent per annum, which continued over a period of years. There is testimony that such Comptroller called the attorney for Radio in 1970 and asked him what interest to post on the note in question, and that such attorney advised him to post interest at the rate of nine per cent per annum. There is testimony that under Internal Revenue Regulations it was too late to amend some of such returns so as to get credit for interest payment at the rate of eighteen per cent per annum, as the judgment provides for.

A confidential relationship exists where one party is in fact accustomed to being guided by the judgment or advice of the other, or is justified in placing confidence in the belief that such party will act in its interest. Thigpen v. Locke, 363 S.W.2d 247 (Tex.1962). In Schiller v. Elick, 150 Tex. 363, 240 S.W.2d 997 (1951), the Court said:

Defendant Elick denies any obligation to or fiduciary relationship with the Schillers. . . . Elick offers considerable proof supporting his contention that this was in fact an arm’s length trade and argues it effectively here. Our problem is not to determine who is telling the truth, but only to determine whether there is any testimony which, if believed, will support the trial court’s judgment. Whether or not a fiduciary relationship exists is a question of fact.

A confidential relationship may arise not only from a technical fiduciary relationship, but also an informal relationship where one person trusts in and relies upon another, whether the relationship is social, domestic, or personal. Fitz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256 (1951).

Moreover, the relationship between joint adventurers, like that existing between partners, is fiduciary in character and imposes upon all the participants the obligation of loyalty to their joint concern and of the utmost faith, fairness, and honesty in their dealings with each other. Fitz-Gerald v. Hull, supra.

The rule of “equitable estoppel” does not rest on the assumption that the promissor has obtained any personal gain or advantage, but on the fact that he has induced others to act in such a manner that they will be seriously prejudiced if he be allowed to fail in carrying out that which he has encouraged them to expect. Longbotham v. Ley, 47 S.W.2d 1109 (Tex.Civ.App. — Galveston 1932, writ ref’d); Dickerson v. Colgrove, 100 U.S. 578, 25 L.Ed. 618. The principle of estoppel by silence arises where a person, who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance upon which he acts to his prejudice. A. R. Clark Investment Company v. Green, 375 S.W.2d 425, 435 (Tex.1964); Burnett v. Atteberry, 105 Tex. 119,145 S.W. 582 (1912); Waggoner v. Dodson, 96 Tex. 415, 73 S.W. 517 (1903).

One of the purposes of estoppel is to prevent one person, by throwing another person off his guard, from obtaining an unfair advantage or from acting inconsistent to the other’s disadvantage. So, where one party by his representations or conduct has induced the other party to a transaction to give him an advantage which it would be against equity and good conscience for him to assert, he will not in a court of justice be permitted to avail himself of that advantage. Sonfield v. Eversole, 416 S.W.2d 458 (Tex.Civ.App. — Texarkana 1967, writ ref’d n. r. e.); 31 C.J.S. Estoppel § 63.

In MacDonald v. Follett, supra, the Supreme Court held that evidence of dealings between parties raised a fact issue as to whether there was such a confidential relationship as to impose fiducial duties and obligations on one to the other, and stated:

Whether or not joint owners of overriding royalty interests sustain relations of trust and confidence toward each other depends upon the facts and surrounding circumstances. They do not sustain that relationship by virtue alone of their being joint owners. Our question then is whether the facts above recited, viewed in the light most favorable to Follett’s contention, raise an issue for the jury on the question of the existence of a relation of trust and confidence.

We have concluded that under the record there were disputed material issues of fact as to (a) whether the note in question was ever matured; (b) the defense of estoppel as to any claim for a greater rate of interest than nine per cent per annum; (c) whether a confidential or fiduciary relationship existed between the parties. Because of such disputed issues of fact, the trial court erred in taking the case from the jury and granting judgment for Radio.

Under the record, the trial court erred in withdrawing the case from the jury and entering judgment for Radio. We have concluded that the judgment complained of in both Cause No. 15528 and 15509 must be reversed.

Page’s plea in intervention is ordered reinstated. The judgment complained of in both Cause No. 15528 and 15509 is reversed and remanded to the trial court for a new trial.

      . In September 1969, API’s stock ownership was basically evenly divided between the three groups — one-third by Page, one-third by the Radio group, and one-third by Mr. Howard (Howard, Draker, Woltersdorf & Co.).

      . Such notes and Loan Agreement were actually executed by Howard, Draker, Woltersdorf & Co., which was later changed to Associated Page Interiors, Inc., and such entity will be referred to in this opinion as API.

      . See Susanoil, Inc. v. Continental Oil Company, 516 S.W.2d 260 (Tex.Civ.App. — San Antonio 1973).

      . This contention is not applicable to API because the statements or allegations complained of were made by Page and not by API.

      . This amendment was effective on January 1, 1971 and was applicable during all relevant times herein.

      . See Petroleum Anchor Equipment, Inc. v. Tyra, 406 S.W.2d 891 (Tex. 1966), which contains a good discussion of the old rule. Tyra holds that there are only two classes of parties that must be parties to a lawsuit, indispensable parties, and insistible parties, and states that indispensable parties are those parties who have a “joint interest” in the subject matter of the suit.

      . The judgment finally entered includes interest at the rate of eighteen per cent per annum.

      . API points out that there was not only a close working relationship between API and Radio, but almost a total interdependence of API on Radio because of common directors, shareholders, and officers, plus the fact that the Comptroller for Radio helped supervise the bookkeeping for API and at times filed API tax returns.

      . API and Page both have points of error asserting that as a matter of law a take-nothing judgment should have been entered against Radio. We have considered these points of error seeking a rendition and they are overruled.


source: Caselaw Access Project

author: BARROW, Chief Justice.

license: Public Domain

text:
    Claribel LOVELACE et al., Appellants, v. BANDERA CEMETERY ASSOCIATION et al., Appellees.
    No. 15661.
    Court of Civil Appeals of Texas, San Antonio.
    Nov. 17, 1976.
    Rehearing Denied Dec. 15, 1976.

      B. Allen Cumbie, Hollon & Marion, Boerne, for appellants.
    Darden & Wehmeyer, Bandera, Bill Price and Al De La Garza, Anthony T. Sortino, San Antonio, for appellees.
   BARROW, Chief Justice.

Appellants, Claribel Lovelace and Chris-tabel B. Schuiteman, have perfected their appeal from a final judgment entered after a nonjury trial which denied appellants’ application for a declaratory judgment that five lots purchased in Indian Waters Subdivision by appellees, the Bandera Cemetery Association, could not be used as a cemetery, and refused to enjoin appellees, the Association, its officers, and members from such planned use of the lots.

Appellants complain of this judgment by twenty points of error. All of these points relate to their basic contention that there is no evidence or, in the alternative, the evidence is factually insufficient to support the judgment. It is therefore urged that it was an abuse of discretion for the trial court to refuse to enjoin the admitted plan of appellees to use the five lots for cemetery purposes contrary to the restrictions of this subdivision and to deny the declaratory judgment upholding the restrictions.

The trial court made numerous findings of fact and conclusions of law in support of this judgment. Appellees concede that several fact findings are without support in the evidence, and it is obvious that many others are evidentiary. We will therefore consider only those findings relevant to our determination of the decisive legal questions.

On January 14, 1946, a plat, together with the Building Restrictions and Subdivision Plan of Indian Waters Subdivision, was recorded in the Deed Records of Bandera County by the owner, Hubert W. Green. This subdivision, consisting of 357.4 acres near the city of Bandera, was designed for the stated purposes “of residence and recreation of the highest quality.” Limited business use was to be permitted within the subdivision for the convenience and service of the individual lot owners. Over 100 of the 305 lots were sold and approximately 49 residences have been constructed in the subdivision, most of which are located in one area of the subdivision. There have been no commercial structures constructed on residential lots.

In 1960 Mrs. Claribel Lovelace purchased all unsold lots in the subdivision from the estate of Mrs. John R. Brinkley, who had acquired the interest of the original owner, Hubert W. Green. Mrs. Lovelace now owns about 200 lots and, with the help of her daughter, Mrs. Christabel B. Schuiteman, is now the developer of Indian Waters. Mrs. Schuiteman, who owns 12 of the lots individually, helps her mother as secretary, bookkeeper, and a salesperson. She is the heir apparent of Mrs. Lovelace and the evidence fairly supports the assumption that both appellants believe that Mrs. Schuite-man will eventually become the owner of the subdivision.

Bandera Cemetery Association owns Lots 15-19, Block 6, which are located near the part of the subdivision that has been developed. Lots 17, 18, and 19 were acquired by it on July 21, 1971, by conveyance from Loraine S. Ford. Lots 15 and 16 were conveyed to the Association by Jimmie Ray Hill on October 1, 1975. Both deeds expressly recite that such conveyance is subject to the restrictions and reservations contained in the recorded dedication and Subdivision Plan of Indian Waters. All but Lot 19 are restricted to residential use. Mrs. Schuiteman owns Lots 20-24 in Block 6, which lots may be used for business purposes. A mobile home is located on Lot 24 and is used as a subdivision sales office and as a temporary residence for the Schuite-mans.

The judgment of the trial court is based primarily on two propositions: 1. Appellants are not entitled to equitable relief because of their material violations of the Subdivision Plan and restrictions. 2. These violations created a material change in the original scheme or plan of the subdivider.

We should recognize at the outset that Mrs. Lovelace is before the court in two capacities. She individually owns a substantial number of lots in the subdivision, and therefore has a personal pecuniary interest. Also, she is now the developer and owner of the subdivision and in that capacity is expressly authorized by the Subdivision Plan to bring an action to prevent the violation of any of the covenants or restrictions of the Plan. The trial court found that Mrs. Schuiteman had fully participated and acquiesced in the acts of her mother, Mrs. Lovelace, and therefore stands in the same shoes inasfar as her right to equitable relief is concerned. This finding and conclusion is fully supported by the testimony of appellants.

The primary complaint which forms the basis of the court’s conclusion that there has been a material change in the original scheme or plan of the subdivider relates to the question of the present existence and authority of the Building Plan Committee as called for in the Subdivision Plan, The Plan provides in part:

The Building Plan Committee during the first seven years after the filing of this subdivision plan and plat shall be Hubert W. Green and Chas. D. Lovelace, or the survivor of them, final decision in any case to be made by Hubert W. Green, or his assigns. After the expiration of said seven years, a new Building Plan Committee may be elected by the then individual owners of lots or tracts within the subdivision. Three members shall constitute said new Committee, all of whom shall be bona fide lot or tract owners, and they shall be elected for such length of time and with such method of succession as may be determined by the lot or tract owners, when the election is held. At such election, a lot or tract owner shall be entitled to one vote for each lot or tract owned by him. Should such new Building Plan Committee not be elected or function effectively and promptly, the original Committee herein named shall continue to act.

Both Mr. Green and Mr. Lovelace are now dead; a new Building Plan Committee has never been elected; and, by her own admission, Mrs. Lovelace has acted as the Committee, either alone or with the advice of her daughter or others selected by herself since she purchased the property in 1960. Most of Mrs. Lovelace’s acts in this capacity have been informal; however, the evidence establishes that she has continually exercised the duties and assumed the authority granted the Committee in the Subdivision Plan.

Primarily, the Committee is granted executive or enforcing authority to determine whether or not a proposed structure complies with the general scheme of development adopted for the subdivision. It is required that all proposed improvements be submitted to the Committee for written approval before construction is begun. Although Mrs. Lovelace seldom granted written approval, all plans for new construction were checked by her and in the two instances where the plans did not conform to the general scheme of the subdivision, she filed suit to stop substandard construction. In all other instances, the homes as constructed fully meet the general scheme or plan of the subdivision.

It is our opinion that Mrs. Lovelace was justified as the owner of the subdivision to function as the Committee until a new committee was elected in accordance with the provisions of the Subdivision Plan. See Johnson v. Linton, 491 S.W.2d 189 (Tex. Civ.App. — Dallas 1973, no writ). Nevertheless, the Committee, as such, would have no authority to create new restrictive covenants or to cancel and nullify existing ones. Johnson v. Dick, 281 S.W.2d 171 (Tex.Civ. App. — San Antonio 1955, no writ). Therefore, the authority of Mrs. Lovelace to designate herself as the Committee, and if so, the extent of her authority, is immaterial to a determination of this suit. More importantly, the existence or non-existence of the Committee would not have any bearing on the validity of the subdivision restrictions.

The trial court found that Mrs. Lovelace had violated the subdivision restrictions in several specific ways. She had on occasion leased part of the area in the subdivision for hunting or for grazing of cattle. This was done on a temporary basis and involved an area of undeveloped property in the southeastern part of the subdivision. It cannot be said that this temporary use of undeveloped property would be so inconsistent with the general plan or scheme of this subdivision as to nullify the restrictions in areas unaffected by such violations. Nor would the presence of an abandoned shack in an undeveloped area of the subdivision, or the location of the mobile home on a commercial lot for use as a temporary sales office and temporary residence of the Schuitemans, constitute such material violations as to support a conclusion that the general scheme or plan of the subdivision had been abandoned. Cf. Hemphill v. Cayce, 197 S.W.2d 137 (Tex.Civ. App. — Fort Worth 1946, no writ).

A more difficult question is presented by the action of Mrs. Lovelace in platting Block 7A, located three lots from those owned by appellees, into a site for a future cemetery to be known as Greenlawn Cemetery. Although Block 7A is now owned by Mrs. Lovelace’s granddaughter, the evidence fairly supports the finding of the trial court that this cemetery was conceived, developed, and controlled by Mrs. Lovelace. In fact, Mrs. Lovelace had some negotiations with appellees over sale of a tract in this area for use as a cemetery. The trial court properly concluded from this action that appellants cannot personally be heard to complain of the development of a cemetery, per se, in the subdivision.

There is one important distinction between Block 7A and four of the five lots owned by the Association insofar as its designation and potential use as a cemetery. All but Lot 19 of the Association’s lots are restricted to residential use, whereas commercial use is permitted on Block 7A. The Subdivision Plan does not permit a cemetery to be developed on the lots restricted to residential use. Neither Mrs. Lovelace, as owner of the subdivision, nor the Building Committee, would have the authority to change the use of these four lots from this restricted use. The evidence is uncontra-dicted that the officers and directors of the Association had actual as well as constructive notice of this restricted use prior to acquiring the lots.

We conclude from this record that while neither Mrs. Lovelace nor Mrs. Schuiteman is entitled to the equitable relief of injunction because of their unclean hands, the trial court erred in denying the application for declaratory judgment. An action for declaratory judgment is an appropriate means for seeking a determination of the validity, applicability, or enforceability of restrictions. McGuire v. Davis, 483 S.W.2d 553 (Tex.Civ.App. — Waco 1972, writ ref’d n. r. e.). There is no evidence to support the trial court’s conclusion that there has been such a material change in the original scheme or plan of Indian Waters Subdivision as to invalidate the Subdivision Plan. This scheme has been fully implemented and the purchasers of lots in the subdivision are entitled to rely on the restrictions and reservations set forth in the recorded plan of the subdivision. Accordingly, Lots 15-18 of Block 6 are restricted to residential use while such other use may be made of Lot 19 as is allowed by said Plan.

The judgment of the trial court is reformed to provide that appellees’ use of Lots 15-18 of Block 6 is restricted to use as residences or for residence purposes. In all other respects, the judgment is affirmed. The costs of this appeal are taxed one-half against the appellants and one-half against appellees.

      . Mrs. Lovelace has also filed an amended plat whereby she seeks to deny future purchasers of subdivision tracts, as distinguished from prior purchasers, from using certain designated recreational areas. The validity of this amended plat is not before us and we do not consider same.

      . The Subdivision Plan provides in part:
      All tracts or lots in Indian Waters shall after purchase from Subdivision owner be used by purchasers, and those claiming under them, for individual and family residence purposes only, except when some other use is expressly allowed as hereinafter provided. ‘Residence’ and ‘residence purposes’ shall include the construction of recreation lodges and country homes and the normal uses applicable thereto.

      .It is an established rule that one who seeks equity must come with clean hands. See Omo-hundro v. Matthews, 161 Tex. 367, 341 S.W.2d 401 (1960).


author: SHANNON, Justice.

text:
    RAILROAD COMMISSION of Texas et al., Appellants, v. MERCHANTS FAST MOTOR LINES, INC., et al., Appellees.
    No. 12454.
    Court of Civil Appeals of Texas, Austin.
    Nov. 17, 1976.
    Rehearing Denied Jan. 26, 1977.

      John L. Hill, Atty. Gen., John D. Hughes, Asst. Atty. Gen., Austin, for Railroad Commission of Texas.
    Austin L. Hatched, Lanham, Hatehell & Sedberry, Austin, and Rogers, Hughes & Herman, Austin, for appellant Morgan Express, Inc.
    Phillip Robinson, Robinson, Felts, Starnes & Nations, Austin, and Jerry Prestridge, Clark, Thomas, Winters & Shapiro, Austin, for appellees.
   SHANNON, Justice.

This opinion concerns an appeal from an order of the Railroad Commission to the district court of Travis County. The main questions are whether the Administrative Procedure and Texas Register Act, Tex.Civ. Stat.Ann. art. 6252-13a (1975) was applicable to the case, and if so, whether the district court erred in not remanding the cause to the agency for further proceedings. The Act took effect on January 1, 1976.

Appellants are the Railroad Commission of Texas and Morgan Express, Inc. Morgan Express, Inc., filed an application seeking authority to amend its common carrier certificate so as to remove certain restrictions and to add other transportation services. Prior to its application Morgan was authorized to transport over regular routes “Goods, Wares and Merchandise, in packages not to exceed fifty (50) pounds each in weight, and Newspapers, Newsreels, Films, and Theater supplies, in packages or bundles not to exceed one hundred (100) pounds each in weight, and the transportation not to exceed three thousand (3000) pounds per single unit.” Morgan’s certificate also contained the restriction that, “The holder of this certificate is authorized to charge a rate for such services, the minimum of which shall not be lower than the lowest maximum rate charged by any other common carrier transporting like commodities over the route, or parts thereof, set out hereinafter . . . ”

By its application Morgan sought authority to eliminate, in general, the restriction limiting the weight of the shipments and the restriction concerning the rates which could be charged by it. After hearing, the Commission entered its order on June 11, 1975, granting part of the requested changes.

Appellees, seven competing motor carriers, filed suit in the district court of Travis County to set aside the Commission’s order. The trial in district court was conducted in 1975, but the judgment setting aside the Commission’s order was not signed until January 12, 1976.

After the court entered judgment and filed conclusions of law, the Railroad Commission filed a motion for remand pursuant to the Administrative Procedure Act so the Commission could correct the deficiencies in its order. The district court overruled the motion for remand upon the basis that the Administrative Procedure Act was not retrospectively applicable to the case.

The remand provisions in the Administrative Procedure Act are found in § 19(e). That section provides in part that the court “. . . may affirm the decision of the agency in whole or in part and shall reverse or remand the case for further proceedings if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) in violation of constitutional or statutory provisions;
(2) in excess of the statutory authority of the agency;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) not reasonably supported by substantial evidence in view of the reliable and probative evidence in the record as a whole; or
(6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.”

In defense of the judgment, appellees say that application of the Administrative Procedure Act to the case would have been retrospective and, therefore, would have been in violation of Tex.Const. Art. I § 16.

Texas Const. Art. I § 16 provides that no retroactive law shall be enacted. That prohibition, however, does not apply to statutes relating to procedure or remedies. Regal Properties v. Donovitz, 479 S.W.2d 748 (Tex.Civ.App.1972, writ ref’d n.r.e.). Section 19(e) of the Administrative Procedure Act is a procedural statute. Such statutes control litigation from the date they become law, and all subsequent proceedings must be under the new law. Phil H. Pierce Company v. Watkins, 114 Tex. 153, 263 S.W. 905 (1924), Boyd v. Dean, 515 S.W.2d 753 (Tex.Civ.App.1974, no writ).

Appellees contend further that exercise of the remand provisions of the Act would “definitely and positively affect the substantive rights of the litigants.” As we understand their position, appellees claim that they had a vested substantive right in the character of review, afforded by the law on June 11, or August 6,1975, the dates of the entry of the Railroad Commission’s order and the order overruling their petition for reconsideration. Appellees then say that the application of the Act by remanding the cause would have impaired that vested right.

We recognize that procedural statutes may, on occasion, impair or destroy substantive rights. However, contrary to their contention, appellees have no vested right in the character of review afforded by the law on the date which the Commission entered its order, Phil H. Pierce Company v. Watkins, supra; nor do appellees have any vested right to appeal errors which existed in the Commission’s order of that date. See Securities and Exchange Commission v. Chenery Corp., 332 U.S. 194, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). It follows, we think, that the Administrative Procedure Act was applicable to the case at bar.

In general, it may be said that if the reviewing court finds error in the agency order, it may remand the case to the agency for further consideration. First Savings and Loan Association of Del Rio, Tex. v. Lewis, 512 S.W.2d 62, 64 (Tex.Civ.App.1974, writ ref’d n.r.e.). In that case, which was decided before the enactment of the Administrative Procedure Act, we wrote that the district court could permit the agency on remand an opportunity to meet objections to its order by correcting irregularities in procedure, or by supplying deficiencies in the record, or by making additional findings where those were necessary, or by supplying findings validly made in the place of those attacked as invalid. Under § 19(e) of the Administrative Procedure Act, the uses of remand are as broad, or more so, than those mentioned in First Savings and Loan Association of Del Rio, Tex. v. Lewis, supra.

Having determined that the district court was authorized to remand the cause to the Railroad Commission under § 19(e) of the Administrative Procedure Act, we now turn to the question of whether the court’s conclusions of law were correct.

The district court filed some eighty-four conclusions of law. The court determined many bases for the invalidity of the Commission’s order. One basis was that the Commission’s order purported to prescribe for Morgan’s account Tariff 31-D on shipments weighing up to one hundred pounds. The court further concluded that the Commission’s order purported to prescribe for Morgan’s account rates on shipments weighing over one hundred pounds to be determined by multiplying the weight of any given shipment by the first-class rate prescribed in Section 4 of Tariff 31-D and dividing the product by 100. The court reasoned that both of such actions should be set aside as unlawful, null and void because, as phrased by appellees, (1) Morgan filed no Form 7(a) rate application concerning such rates; (2) no notice of the proposed action was given to the public or interested persons; and (3) no hearing was held to receive evidence concerning the application of Tariff 31-D for the account of Morgan.

Morgan claims that the Commission’s order did not prescribe a level of rates, but merely prescribed that Morgan should apply the pre-existing Tariff 31 series. That being so, Morgan says, there was no necessity for it to have filed a Form 7(a) application. Rule 13(E), promulgated by the Transportation Division of the Railroad Commission, requires a Form 7(a) application if a carrier seeks the “establishment of, or an amendment to or change in a tariff, rate, fare, charge, classification, provision, rule, regulation or rate practice.”

The terms of Rule 13(E) are broad. By those terms a Form 7(a) application should be made anytime there is an action concerning rates. Although the Commission’s order does not establish a new rate structure, it does affect “rate practice.”

Morgan argues that even if a Form 7(a) application should have been filed, its application for operating authority contains the information required in Form 7(a). We observe that Rule 13(E) of the Rules of Practice and Procedure for the Transportation Division requires that applications concerning rates be alleged with particularity. The purpose of this requirement is to inform the Commission, interested parties, and the public of a rate issue and the applicant’s justifications therefor. Morgan’s incidental inclusion of rate information in its application for operating authority is not sufficient to meet the notice requirements of the agency rules.

We reverse the judgment of the district court and remand the cause to the district court for remand to the Railroad Commission of Texas to give the Commission an opportunity to correct any errors in its order of June 11, 1975, all pursuant to § 19(e) of the Administrative Procedure Act.

Reversed and Remanded with Instructions.


author: PEDEN, Justice.

text:
    CITY OF FRIENDSWOOD, Appellant, v. CLEAR CREEK BASIN AUTHORITY et al., Appellees.
    No. 16722.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Nov. 18, 1976.
    Rehearing Denied Dec. 30, 1976.

      Olson & Olson, William A. Olson, Houston, for appellant.
    O’Rourke & Lawler, Terence L. O’Rourke, Houston, for appellee Clear Creek Basin Authority.
    John L. Hill, Atty. Gen., David M. Kendall, Jr., First Asst. Atty. Gen., Austin, Troy Webb, Asst. Atty. Gen., Donald W. Allee, James R. Jard, Asst. Attys. Gen., Houston, for appellee State of Texas.
   PEDEN, Justice.

The first point of error of the appellant, the City of Friendswood, is that the trial judge erred in temporarily enjoining it from violating provisions of the Texas Water Quality Act because the evidence established that the plaintiff, the Clear Creek Basin Authority, has no right or legal capacity to institute or maintain this suit. The City’s other point is that the trial judge erred in overruling its plea of privilege because the evidence established that any violation or threat of violation of the Texas Water Quality Act by the City occurred in Galveston County, where the City is located.

Clear Creek Basin Authority is a conservation and reclamation district created by Chapter 528, page 1096, Acts of the 59th Legislature, Regular Session, 1965, compiled as Article 8280-311 Vernon’s Texas Civil Statutes, pursuant to Article XVI, Section 59, of the Texas Constitution. Its jurisdiction is restricted to its boundaries, which are entirely within Harris County. The Texas Water Quality Board is a State agency operating under the Texas Water Quality Act, the Texas Water Code, Section 21.-001 et seq. (1972). The City of Friendswood is a municipal corporation and home rule city situated entirely in Galveston County.

The Authority brought this suit to abate a public nuisance, to obtain temporary and permanent injunctions and civil penalties against the City for violations of the Texas Water Quality Act, Texas Water Code, Sections 21.001 et seq., and Waste Control Orders 10175-01 and 10175-02. The City filed a plea of privilege to be sued in its domicile, Galveston County, a plea in abatement, a motion to dismiss, and an answer.

The Clear Creek Basin Authority joined the Texas Water Quality Board as a party plaintiff, and Attorney General John L. Hill filed an intervention for the State of Texas on behalf of the Board. The Board asserted no claims and alleged no violations, but it prayed “for all relief to which it was justly entitled.” The trial judge considered the matters at one hearing. Most of the evidence was uncontroverted. The City collects and treats human wastes from parts of Galveston and Harris Counties at the two sewage treatment plants in question, plants 1 and 2. Both are located in Galveston County. In the entire area pertinent to this appeal, the mid-line of Clear Creek divides Galveston and Harris Counties. Sewer treatment plant number 1 discharges into Clear Creek and sewer treatment plant 2 discharges into Cowarts Creek about 350 yards above where Cowarts Creek flows into Clear Creek. Both plants are overloaded and are, at times, discharging raw, untreated, and improperly treated sewage into Clear Creek. Dye tests show that some of the discharge from plant 1 flows directly into the Harris County side of Clear Creek.

The only issue before us is the statutory capacity of the Clear Creek Basin Authority to bring this cause in Harris County. The trial court presumably found in support of its orders that violations of the City’s waste discharge permits and of the Texas Water Quality Act had occurred and were occurring in Harris County and thus within the statutory jurisdiction of the plaintiff Authority. The trial court’s order stated that the plaintiffs were entitled to a temporary injunction because the

“City of Friendswood, acting by and through its officers, agents, or employees, has caused, suffered, allowed and permitted quantities of ‘waste,’ ‘sewage’ or ‘municipal waste’ as those terms are defined in Section 21.003 of the Texas Water Quality Act to discharge into the waters of Cowarts Creek and Clear Creek in the San Jacinto-Brazos Coastal Basin in violation of Waste Control Orders Nos. 10175-01 and 10175-02 and Section 21.251 of the Texas Water Quality Act and defendant, City of Friendswood, acting by and through its officers, agents, or employees, has discharged municipal waste from two (2) outfalls in violation of special provisions of Waste Control Orders Nos. 10175-01 and 10175-02, posing an immediate threat of irreparable harm to the health of residents of the area and the general public from which the plaintiffs have no adequate remedy at law.”

The order provided that the

“City of Friendswood, its officers, agents and employees be temporarily enjoined from causing, suffering, allowing or permitting discharge of any waste into Co-warts Creek and Clear Creek in the San Jacinto-Brazos Coastal Basin in violation of the Texas Water Quality Act and Waste Control Orders Nos. 10175-01 and 10175-02.”

In a hearing on an application for a temporary injunction, the only question before the court is the right of the applicant to a preservation of the status quo of the subject matter of the suit pending in a final trial of the case on its merits. To warrant the issuance of the writ, the applicant need only show a probable right and a probable injury; he is not required to establish that he will finally prevail in the litigation. Where the pleadings and the evidence present a case of probable right and probable injury, the trial court is clothed with broad discretion in determining whether to issue the writ and its order will be reversed only on a showing of a clear abuse of discretion. Transport Co. of Texas v. Robertson Transports, Inc., 152 Tex. 551, 261 S.W.2d 549 (1953).

The Board is made the principal agency for administering the Act. See Section 21.-253. The probable right of the Clear Creek Basin Authority to enforce the provisions of the Act depends upon Section 21.254. It begins:

“(a) Whenever it appears that a violation or threat of violation of any provision of Section 21.251 of this code or any rule, regulation, permit, or other order of the board has occurred or is occurring within the jurisdiction of a local government, exclusive of its extraterritorial jurisdiction, the local government, in the same manner as the board, may have a suit instituted in a district court through its own attorney for the injunctive relief or civil penalties or both, as authorized in Subsection (a) of Section 21.253 of this code, against the person who committed, or is committing or threatening to commit, the violation. This power may not be exercised by a local government'unless its governing body adopts a resolution authorizing the exercise of the power. In a suit brought by a local government under this section, the board is a necessary and indispensable party. (60th Leg-is., Ch. 313, Sec. 4.03, subsec. (a), as amended.)”

The pertinent provisions of Section 21.251 of the Act, entitled “Unauthorized Discharges Prohibited” are:

“(a) Except as authorized by a rule, regulation, permit, or other order issued by the board, or the executive director when authorized by the board, no person may:
(1) discharge sewage, municipal waste, recreational waste, agricultural waste, or industrial waste into or adjacent to any water in the state;
(2) discharge other waste into or adjacent to any water in the state which in itself, or in conjunction with any other discharge or activity, causes, continues to cause, or will cause pollution of any of the water in the state; or
(3) commit any other act or engage in any other activity, which in itself, or in conjunction with any other discharge or activity, causes, continues to cause, or will cause pollution of any of the water in the state, unless the activity is under the jurisdiction of the Parks and Wildlife Department, the General Land Office, or the Texas Railroad Commission, in which case this Subdivision (3) does not apply. (60th Legis., Ch. 313, Sec. 4.01, subsec. (a), as amended.)
“(b) ....
“(c) No person may cause, suffer, allow, or permit the discharge of any waste or the performance of any activity in violation of this chapter or of any rule, regulation, permit, or other order of the board. (60th Legis., Ch. 313, Sec. 4.01, subsec. (c), as amended.)”

The applicable subdivision of the Venue Statute, Article 1995, V.C.S., is subdivision 30:

“Special Venue—Whenever in any law authorizing or regulating any particular character of action, the venue is expressly prescribed, the suit shall be commenced in the county to which jurisdiction may be so expressly given.”

In Section 21.255 of the Texas Water Act, paragraph (a) states:

“A suit for injunctive relief or recovery of a civil penalty or for both injunctive relief and penalty may be brought either in the county in which the defendant resides or in the county in which the violation or threat of violation occurs.”

Article 1996, V.C.S., provides:

“Where any part of a river, water course, highway, road or street is the boundary line between two counties, the several courts of each of said counties shall have concurrent jurisdiction in all cases over such parts of said river, (or) water course,
. as shall be the boundary of such county in the same manner as if such parts of said river, (or) water course,
. were within the body of such county.”

We hold that as to the City’s sewer treatment plant 1, the evidence supports the trial court’s noticed findings and that Article 1996, when construed with subdivision 30 and Section 21.255 set out above, bestows upon the Authority the capacity to bring this cause in Harris County. We reach a different conclusion with regard to plant 2. Since its discharges of insufficiently treated effluent go into Cowarts Creek some 350 yards above where it empties into Clear Creek, we consider that the violations of Waste Control Order 10175-02 and of Sec. 21.251 of the Water Quality Act were shown to have occurred in Galveston County, not in Harris County.

In interpreting subdivision 9a of the Venue Statute, our Supreme Court examined a provision permitting a suit to be brought in the county where the act or omission of negligence occurred. Herbicides negligently sprayed into the air in one county had drifted into another, causing damage in the second. Held: an act can only occur where it actually takes place. “Occur” does not include the results of the occurrence but only the taking place, happening or coming to pass, hence venue could not be maintained in the county onto which the herbicides drifted. Leonard v. Abbott, Tex., 366 S.W.2d 925 at 927 (1963).

It appears that the trial court granted the injunction at the instance of both the Authority and the Board in that the Order of Temporary Injunction lists both the Authority and the Water Quality Board as plaintiffs and recites that the “plaintiffs” are entitled to temporary injunction. In another place it describes the Board as the intervenor. The order overruling the City’s plea of privilege states that the plea was controverted by both the City and the Board.

As to the trial court’s venue order, that part of the Board’s cause based on discharges into Cowarts Creek in violation of Waste Control Order No. 10175-02 is severed and is reversed and remanded for entry of an order transferring that part of the cause to the District Court of Galveston County. The venue order is in all other respects affirmed. That part of the trial court’s order temporarily enjoining discharges into Cowarts Creek in violation of Waste Control Order No. 10175-02 is also severed and is dissolved. The order of temporary injunction is in all other respects affirmed.


author: EVANS, Justice.

text:
    Clarence McDADE, Administrator of the Estate of A. C. Harris, Deceased, Appellant, v. Willie Mae SAMS, Appellee.
    No. 16716.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Nov. 18, 1976.

      Voorhees & Cooper, Herman D. Voorhees, Robert 0. Cooper, Houston, for appellant.
    Harris & Graul, Howard A. Lang, Jr., Houston, for appellee.
   EVANS, Justice.

This is an appeal from the trial court’s judgment setting aside a default judgment previously rendered against the plaintiff on the defendant’s counterclaim, and awarding the plaintiff title to and possession of a tract of 23 ½ acres of land in Waller County, Texas.

The parties were divorced by decree dated June 16, 1958, which recited that no community property had been accumulated during the marriage. The basic dispute between the parties is whether the land in controversy was owned by the community, having been acquired during the marriage, or whether it constituted the separate estate of the plaintiff. The plaintiff’s contention is that she acquired title, as her separate estate, upon a conveyance from her brother made in exchange for certain city property which she had inherited from her parents.

Subsequent to the entry of the divorce decree, the defendant A. C. Harris executed a conveyance of his interest in the property to an attorney, E. H. Momberger, as trustee. Thereafter the plaintiff brought an action in trespass-to-try title and for removal of cloud, naming Harris and Mom-berger as defendants. A joint answer was filed on behalf of both defendants in which they specially plead that title to the land had been acquired in the plaintiff’s name for the community and had been paid for with community funds. In a separately filed counterclaim the defendants sought partition of their claimed interest in the property. The parties thereafter filed various amended and supplemental pleadings, and an answer was filed by the plaintiff to the defendants’ counterclaim.

The defendant Harris, upon obtaining a reconveyance of Momberger’s interest, filed a second amended answer and counterclaim, against seeking partition of his claimed interest in the property and, in addition, a recovery of damages for the loss of use of the premises. A copy of this pleading and citation were served upon the plaintiff; however, copies were not delivered to her attorney.

On July 9, 1973, after the date specified for answering the second amended counterclaim had passed, the trial court entered a default judgment against the plaintiff, reciting that although duly cited, she had failed to appear and answer the defendant’s counterclaim. The default judgment declared that the property constituted the community property of the parties, that it should be partitioned between them, and appointed a surveyor and commissioners to effectuate that purpose. The default judgment made no award of damages as prayed for in the counterclaim.

The defendant’s counterclaim did no more than assert his claim to an interest in the property which the plaintiff sought to recover in her petition. This could have been accomplished under a statutory plea of not guilty or by a special plea raising the issue. The defendant was not entitled to a decree of partition unless he first succeeded in defeating the plaintiff’s claim of title. Since there had been no disposition made of the plaintiff’s cause of action, the trial court was without authority to enter a default judgment on the defendant’s counterclaim.

“ ‘The law of this state does not authorize a defendant to take a default judgment which adjudicates against the plaintiff the merits of his suit.’ Freeman v. Freeman, 160 Tex. 148, 327 S.W.2d 428, 431 (1959). The only remedy against the defaulting plaintiff insofar as his cause of action is concerned is an order dismissing his suit for want of prosecution, Smock v. Fischel, 146 Tex. 397, 207 S.W.2d 891, 892 (1948); without prejudice, Murphy v. Stigall (Tex.Civ.App., 1962, writ ref.) 352 S.W.2d 918, 919.’ ” Stewart v. Whatley, 479 S.W.2d 84, 85 (Tex.Civ.App. — Waco 1972, no writ).

The default judgment was entered solely upon the basis that the plaintiff had failed to appear on the answer date for the second amended counterclaim. The cause had not been set for trial in accordance with the provisions of Rule 330(b), Texas Rules of Civil Procedure (subsequently repealed effective January 1, 1976, but then in effect) and the trial court was without authority to enter a default judgment under such circumstances.

The entry of the default judgment in the face of. the plaintiff’s petition and without proper trial setting renders the judgment void. Freeman v. Freeman, 160 Tex. 148, 327 S.W.2d 428, 431 (1950); McDonald, Texas Civil Practice, Vol. 4, § 17.18, p. 102. The entry of the default judgment denied the plaintiff her day in court upon the cause of action which she asserted in her petition against the defendant.

“Rule 81, Tex.R.Civ.P., provides in part that when the defendant sets up a counterclaim, the plaintiff may plead thereto. It is settled law that a general denial is not necessary when the counter-claim arises out of the same transactions or occurrences alleged in the petition. In Freeman v. Freeman, 160 Tex. 148, 327 S.W.2d 428 (1959), the Supreme Court said that the cases are legion supporting the proposition that the law of this State does not authorize a defendant to take a default judgment on his cross-action which adjudicates against the plaintiff on the merits of his suit. See also, Pure Milk and Ice Cream Co. v. Tomlinson, 529 S.W.2d 115 (Tex.Civ.App. — Austin 1975, writ dism’d); Prince v. Peurifoy, 396 S.W.2d 913 (Tex.Civ.App. — Dallas 1965, no writ); Kemp v. Westbrook, 358 S.W.2d 889 (Tex.Civ.App. — Dallas 1962, writ ref’d n. r. e.); 2 McDonald, Texas Civil Practice § 8.02(A)(1) (1970).” Benjamin v. Sawyer, 542 S.W.2d 734 (Tex.Civ.App. —San Antonio, 1976, no writ), 1 T.C.R. 898, Oct. 15, 1976.

It should also be noted that the answer filed by the plaintiff to the defendant’s counterclaim constituted an answer to his subsequently filed second amended counterclaim. Moreover, the plaintiff’s petition in itself constituted an answer to the counterclaim. Kemp v. Westbrook, 358 S.W.2d 889, 894 (Tex.Civ.App. — Dallas 1962, writ ref. n. r. e.). There can be no default when an answer is filed. Rule 239, Texas Rules of Civil Procedure; Stanford v. Lincoln Tank Co., 421 S.W.2d 412 (Tex.Civ.App. —Ft. Worth 1967, no writ).

The defendant contends the trial court erred in setting aside the default judgment because the plaintiff failed to allege and prove the absence of fault or negligence on her part in failing to defend against the counterclaim and also because the plaintiff’s bill of review was not verified. These contentions do not have merit since the default judgment was void. Freeman v. Freeman, supra. In this proceeding, the trial court properly set aside the default judgment and proceeded to hear evidence on the merits of the case.

The defendant next contends that the evidence is insufficient to support the trial court’s judgment. There was testimony that the plaintiff and one of her brothers had inherited a city lot from their parents and that she had traded her interest in the property to another brother in exchange for the land in controversy. The trial court was justified in determining from the evidence that the trade involved only the separate property of the plaintiff so that she acquired title to the land in controversy as her separate estate.

“In the absence of agreement to the contrary property purchased with separate funds, or taken in exchange for separate property, becomes the separate property of him whose money purchases or whose property is given in exchange. Dixon v. Sanderson, 72 Tex. 359, 10 S.W. 535 (1888).” Newland v. Newland, 529 S.W.2d 105, 107 (Tex.Civ.App. — Ft. Worth 1975, writ dism’d).

The testimony of the plaintiff and other members of her family indicated a family pattern of land ownership. All of the children had been left property by their parents; the family was poor and no money was exchanged. The evidence is sufficient to rebut a presumption that the property was acquired as part of the community estate and to support the trial court’s finding that the property was the separate estate of the plaintiff.

Since the trial court’s judgment may be upheld upon the determination that the property was the separate estate of the plaintiff, it is not necessary to consider the defendant’s remaining argument that the evidence is insufficient to support the plaintiff’s claim of a limitation title.

The judgment of the trial court is affirmed.