author: ODEN, Justice.

text:
    JACK ADAMS AIRCRAFT SALES, INC., Appellant, v. Charles W. HURLEY, Appellee.
    No. 8552.
    Court of Civil Appeals of Texas, Texarkana.
    July 18, 1978.
    Rehearing Denied Aug. 29, 1978.

      John D. Crawford, Dallas, for appellant.
    Wm. Andress, Jr., Wm. Andress & Assoc., Dallas, for appellee.
   ODEN, Justice.

Appellee, Charles W. Hurley, instituted suit against Jack Adams Aircraft Sales, Inc., appellant, for a commission allegedly owed by reason of Hurley producing a purchaser for appellant’s outstanding common stock and/or assets. Appellant timely filed an answer, but failed to appear for trial at which time judgment was entered against it. A motion for new trial was filed within 10 days of the entry of judgment and overruled. The only question presented for our determination is whether the trial court erred in overruling the motion for new trial.

Hurley contends that the judgment under review is a judgment nihil dieit which carries with it an admission of the cause of action substantially as stated in the petition. A true nihil dicit judgment occurs only where the defendant has entered some plea, usually of a dilatory nature, but has not placed the merits of plaintiff’s case in issue, or where the defendant has placed the merits in issue by answering, but then withdraws the answer. Frymire Engineering Co., Inc. v. Grantham, 524 S.W.2d 680 (Tex.1975). These situations do not here exist inasmuch as Jack Adams Aircraft Sales, Inc. had an answer on file which placed in issue the merits of the alleged cause of action, and Hurley’s claim that appellant had confessed judgment by implication is overruled.

The correct rule to be applied to motions for new trial which seek to set aside default judgments is stated in Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939), as follows:

“A default judgment should be set aside and a new trial ordered in any case in which the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or an accident; provided the motion for a new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work any injury to the plaintiff.”

This rule applies to motions for new trial which seek to set aside a default judgment entered on failure to appear for trial as well as to a judgment entered on failure of the defendant to file an answer. Ivy v. Carrell, 407 S.W.2d 212 (Tex.1966).

The record under review shows that the failure of Jack Adams Aircraft Sales, Inc. to appear for trial was not intentional or the result of conscious indifference, but was due to an accident or mistake. The cause was set for trial on May 6, 1976. Appellant was not notified of the setting. Parties over whom a court has obtained jurisdiction are not entitled to notice of a trial setting in the absence of a rule or statute to the contrary. Plains Growers, Inc. v. Jordan, 519 S.W.2d 633 (Tex.1974). The case was heard in a Dallas County District Court and the Dallas Civil Court Rules require the counsel at whose request the case is set to serve written notice of the setting on the opposing parties and to forthwith furnish a copy of such notice to the District Clerk evidencing compliance. Rule 1.6a, Dallas Civil Court Rules. This rule was not followed. Appellant had a right to rely on the local rule. The failure to appear was not the result of an intentional act of appellant or its conscious indifference but rather appellee’s failure to comply with the Dallas Civil Court Rules, which we hold was due to an accident or mistake of appellee.

The motion for new trial “set up” a meritorious defense in that it contains an allegation that Hurley had been paid all sums due him as a commission for producing a purchaser for appellant’s common stock and/or assets. The allegation, if true, would constitute a defense to the cause of action asserted by Hurley and was supported by affidavits which proved prima facie the meritorious defense. See Ivy v. Carrell, supra, for a discussion of the phrase “set up a meritorious defense.”

Jack Adams Aircraft Sales, Inc. also has the burden of showing that its motion for new trial was filed at a time when the granting thereof would occasion no delay or otherwise work an injury to Hurley. United Beef Producers, Inc. v. Lookingbill, 532 S.W.2d 958 (Tex.1976). Injury may be negated by an offer to pay costs incurred by a plaintiff such as Hurley as a result of the judgment, which appellant did in its motion for new trial. United Beef Producers, Inc. v. Lookingbill, supra. The judgment (interlocutory at the time) under review was rendered on May 12, 1976, but did not become final until March 4, 1977, at which time judgment was entered in favor of a codefendant against Hurley and the cause under review severed. The motion for new trial was filed on May 21, 1976, and overruled on August 5,1976, which was approximately seven months before the interlocutory judgment became final. The granting of the motion for new trial could not have caused any delay to Hurley under the circumstances, and accordingly, it was filed at a time when the granting thereof would occasion no delay to the appellee.

The discretion vested in a trial court with respect to granting a new trial where a defendant fails to appear for trial is not unlimited. Jack Adams Aircraft Sales, Inc. has met the requirements for a new trial as set forth in Craddock v. Sunshine Bus Lines, Inc., supra, and Ivy v. Carrell, supra, and it was an abuse of discretion for the trial court to deny the motion for new trial.

It is not necessary for us to decide whether appellee’s failure to comply with the Dallas Civil Court Rules with respect to giving notice of a setting to opposing parties would in and of itself be grounds for granting a new trial and this opinion should not be construed to imply either that it would or it would not.

The judgment entered by the trial court is reversed and the cause remanded for trial.


source: Caselaw Access Project

license: Public Domain

text:
    Charles W. HURLEY, Appellant, v. LANO INTERNATIONAL, INC., Appellee.
    No. 8552A.
    Court of Civil Appeals of Texas, Texarkana.
    July 18, 1978.
    Rehearing Denied Aug. 29, 1978.
    Wm. Andress, Jr., Dallas, for appellant.
    Troy Phillips, Baker, Glast, Riddle & Tut-tle, Dallas, for appellee.
   ODEN, Justice.

The appeal has been perfected from a summary judgment entered in favor of Lano International, Inc. (Lano) and against Charles W. Hurley (Hurley) in a suit instituted by Hurley as a beneficiary of an indemnity agreement executed by Lano. The primary issue to be resolved is whether Hurley can bring a direct action against Lano.

The following facts are undisputed. Hurley entered into an agreement with Jack Adams Aircraft Sales, Inc. (Jack Adams) under the terms of which Hurley was to attempt to produce a purchaser of the common stock and/or assets of Jack Adams in consideration for a commission of five percent (5%) of the gross amount of the sales price. Lano was the owner of all of the preferred stock issued by Jack Adams. Also, Lano was Jack Adams’ largest common stockholder. On February 26, 1975, Jack Adams redeemed its preferred stock by transferring substantially all of its assets to Lano. As part of the consideration for the transfer, Lano agreed, in writing, to indemnify Jack Adams against “any loss or expense in connection with all accounts payable incurred by (Jack Adams) prior to the execution of this instrument.” Subsequent to the redemption of the preferred stock, but on the same date, all common stock in Jack Adams was transferred to S.T.C. Investments, Inc. for the sum of $15,-000.00 payable $3,000.00 in cash with the balance in the amount of $12,000.00 being evidenced by a deferred purchase money note. Hurley produced S.T.C. Investments, Inc. as a purchaser and was paid $150.00 (5% of the $3,000.00 down payment) as the initial installment on his commission. Hurley-considered the payment grossly inadequate and on October 2, 1975, brought suit against Jack Adams and Lano for $25,-000.00 alleging that to be the sum owed him as a commission. Jack Adams did not seek indemnification from Lano. A judgment was entered against Jack Adams based on its failure to appear for trial and that cause severed from the one under review. This Court has by separate opinion reversed and remanded that cause for a new trial. As stated, Lano was granted a summary judgment.

The summary judgment granted in favor of Lano may be upheld only if the record establishes a right thereto as a matter of law. Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970). Further, there must have been no genuine issue of material fact present. Torres v. Western Casualty and Surety Company, 457 S.W.2d 50 (Tex.1970).

We will assume, without deciding, for purposes of this opinion that the commission earned by Hurley (at least $150.00) was owed prior to Lano executing the indemnity agreement and that such debt was an “accounts payable” as that term is used in the indemnity agreement. Based on those assumptions, Hurley is a beneficiary of the indemnity agreement executed by Lano for the express benefit of Jack Adams. The question is whether he is a creditor beneficiary or an incidental beneficiary. A creditor beneficiary may enforce a contract made for his benefit. Republic National Bank v. National Bankers Life Ins. Co., 427 S.W.2d 76 (Tex.Civ.App.Dallas 1968, writ ref’d n. r. e.). An incidental beneficiary, one who will be benefited only incidentally by the performance of the contract, cannot maintain an action thereon, and an- incidental beneficiary acquires, by virtue of the promise, no right either against the promisor or the promisee. Republic National Bank v. National Bankers Life Ins. Co., supra.

In our opinion, Hurley is an incidental beneficiary of the indemnity agreement and did not have the right to bring a suit directly against the indemnitor, Lano. The indemnity agreement under review is plain and unambiguous. Parties are presumed to contract for themselves and it follows that a contract will not be construed as having been made for the benefit of a third person unless it clearly appears that such was the intention of the contracting parties. Citizens Nat. Bank v. Texas & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003 (1941). The parties to the agreement did not intend for Lano to pay the accounts payable directly but rather that Jack Adams would pay them and, in turn, be reimbursed by Lano. Under these circumstances one such as Hurley is an incidental beneficiary. An excellent demonstration of the rule that in such a case Hurley would fall within the category of an incidental beneficiary is found in the Restatement (Second) of the Law, Contracts, Sec. 133 (1973):

“3. B promises A to pay whatever debts A may incur in a certain undertaking. A incurs in the undertaking debts to C, D and E. If the promise is interpreted as a promise that B will pay C, D and E, they are intended beneficiaries under Subsection (l)(a); if the money is to be paid to A in order that he may be provided with money to pay C, D and E, they are at most incidental beneficiaries.”

The indemnity agreement was entered into on February 26, 1975. The lawsuit in question was filed on October 2, 1975. It is not suggested that either Lano or Jack Adams attempted to conceal the fact that Jack Adams transferred its assets in exchange for the redemption of its preferred stock. Since at the time suit was filed more than six months had expired from the date of the transfer, any claim Hurley might have against Lano based on a violation of Tex.Bus. & Comm.Code Ann. Sec. 6.101, et seq. (1968) (Bulk Transfers), is barred by the six-month period of limitation prescribed for in Tex.Bus. & Comm.Code Ann. Sec. 6.111 (1968).

The judgment of the trial court is affirmed.


author: O’QUINN, Justice.

text:
    FIRST STATE BANK, HEARNE, Texas, et al., Appellants, v. CITIZENS BANK OF BRYAN et al., Appellees.
    No. 12746.
    Court of Civil Appeals of Texas, Austin.
    July 19, 1978.
    Rehearing Denied Aug. 9, 1978.

      T. D. Smith, Edwin Lamm, III, Smith & Lamm, Houston, for appellant First State Bank, Hearne.
    John L. Hill, Atty. Gen., Thomas A. Rutledge, Asst. Atty. Gen., Austin, for appellant State Banking Board of Texas.
    Larry Temple, Austin, for appellees Citizens Bank of Bryan, et al.
   O’QUINN, Justice.

This appeal is from judgment of district court setting aside an order of the State Banking Board, entered October 18, 1976, by which the Board granted First State Bank at Hearne, in Robertson County, permission to change its name to College Station Bank and move its domicile from Hearne to College Station, in Brazos County, a distance of about 22 miles.

Four existing banks, located in Bryan and College Station, protested the application of First State Bank of Hearne before the Banking Board and later instituted their appeal from the Board’s order to district court of Travis County. Protestants who appealed to district court, and are appellees before this Court, are Citizens State Bank of Bryan, First Bank and Trust of Bryan, First National Bank of Bryan, and University National Bank of College Station.

From judgment of the district court, appeal has been perfected by the State Banking Board, and by First State Bank of Hearne, intervenor below.

We will reverse judgment of the trial court and will render judgment that the order of the Board be reinstated and approved as valid.

Pending before this Court is motion of appellees, the four banks of Bryan and College Station, to dismiss this suit as moot, or for remand to the Banking Board with instructions to dismiss the application of First State Bank of Hearne. The ground asserted to support the motion is passage by the Legislature of an amendment of Article 342-314, V.A.T.S., relating to change of domicile of state banks, which now provides that “No state bank may change its domicile to a location outside the county where it is located.” (Acts 1977, 65th Leg., p. 25, ch. 10, sec. 1, eff. March 10, 1977).

Movants rely on authority of Texas Jurisprudence, and certain cases cited in support, which states, “A case or question before an appellate court may become moot by reason of new legislation, or by reason of the expiration or the superseding of existing legislation.” 4 Tex.Jur.2d Appeal and Error— Civil Cases, sec. 630 pp. 547-8 (1974).

The order of the Banking Board granting First State Bank permission to change its name and move its domicile from Robertson County to Brazos County was entered in October of 1976, and protestants’ petition appealing from the order was filed in district court on November 12 of 1976. The amendment of Article 342-314, providing for the first time that no state bank could change its domicile from one county to another, became effective March 10, 1977, about five months after the Banking Board entered its order and while appeal from the order was pending in district court.

Appellees place particular reliance on Clymore Co., Inc. v. Railroad Commission of Texas, 86 S.W.2d 797 (Tex.Civ.App. Austin 1935, no writ), and City of Dallas v. Meserole Bros., 164 S.W.2d 564 (Tex.Civ.App. Dallas 1942, writ ref’d w.o.m.), in urging that this lawsuit is now moot because Article 342-314 now forbids state banks from moving outside the county where located.

In Clymore a temporary injunction granted by the trial court had been predicated upon a statute subsequently superseded, and on appeal this Court held that the questions involved had become moot. This Court observed that the later statute had superseded the prior law and prescribed “definitions, standards, and criteria which in many respects are essentially different from those prescribed or involved in the [earlier statute].” The Court concluded, “We cannot in this proceeding, upon the record made in a hearing involving only [the earlier statute] determine those issues; but are confined to the issues presented by the record as applied to the [earlier law].” 86 S.W.2d 798, col. 1.

Passing on whether the temporary injunction was improvidently granted would have been meaningless, and the case was remanded, although moot, in the manner required in such circumstances by the rule announced in Danciger Oil & Refining Co. v. Railroad Commission, 122 Tex. 243, 56 S.W.2d 1075, 1076 (1933).

In Meserole a landowner, whose property lay outside municipal corporate limits, started construction of commercial buildings prior to effective date of either annexation or temporary zoning, but before completion of the structures annexation and zoning laws limiting land uses to residential purposes were completed. The appellant court held that the landowner “acquired no vested right to complete the two commercial buildings in a residential area merely because the work was begun prior to the enactment of the temporary zoning ordinance ...” (164 S.W.2d 568, col. 1) The court pointed out that the municipality acted in exercise of its police powers, to which “all property is held subject.” The court dismissed the appeal as moot. (164 S.W.2d 567, col. 2)

The holding in Meserole was the principal authority for identical results in a later case similar on the facts, in which no vested rights had been acquired and the city acted under its police powers. Westwood Development Company v. City of Abilene, 273 S.W.2d 652 (Tex.Civ.App. Eastland 1954, writ ref’d n. r. e.).

In the present lawsuit the Banking Board entered its order in October of 1976 approving amendment to the charter held by First State Bank of Hearne and thereby allowed the bank to change its name and move its domicile to a neighboring county. The original charter and the amendments approved by the Board in 1976 constituted a vested property right, and the Board’s order if valid and lawful became effective and enforceable when entered, and at that time was presumed to be valid. Chemical Bank & Trust Company v. Falkner, 369 S.W.2d 427, 433 (Tex.Sup.1963); Brazosport Savings and Loan Association v. American Savings and Loan Association, 161 Tex. 543, 342 S.W.2d 747, 750-2 (1961).

The trial court on November 19, 1976, entered its stay order enjoining the State Banking Commissioner from delivering to First State Bank a new certificate of authority reflecting the new name and the new domicile as approved by the Banking Board in October. The stay order was entered to preserve the status quo pending final judicial determination of the order. Since First State Bank was prevented from changing its name and moving to the new domicile because the Commissioner was enjoined from performing a ministerial act, “involving no exercise of judgment or discretion,” and delay in exercise of the bank’s rights “resulted solely from the processes of law,” the bank was not deprived of its rights. Gordon v. Lake, 163 Tex. 392, 356 S.W.2d 138, 141 (1962).

As a general rule statutes operate prospectively, and may not operate retrospectively if such would result in impairment of vested rights. A statute is retroactive, and retroactive results are prohibited by the Constitution, if the law takes away or impairs vested rights acquired under existing laws. American Surety Co. of New York v. Axtell Co., 120 Tex. 166, 36 S.W.2d 715 (1931); International Security Life Insurance Company v. Maas, 458 S.W.2d 484, 490 (Tex.Civ.App. Houston (1st) 1970, writ ref’d n. r. e.).

Nothing in the Act of 1977 by which the Legislature amended Article 342-314 indicates other than prospective application beginning with the law’s effective date, March 10,1977. We conclude that the statute as amended was not intended to, and did not, divest or impair the vested rights First State Bank acquired in its franchise as amended by the State Banking Board effective October 18, 1976. Motion to dismiss this suit as moot is overruled, and we proceed to consider the appeal on its merits.

The trial court filed findings of fact and conclusions of law, prefaced by the observation that the district court, in appeals from administrative proceedings, is not called upon to make findings of fact, except as to irregularities occurring before the administrative body and not reflected in the record. The trial court made four findings of fact which will be considered later.

The conclusions of law are the principal target of attack by appellants. The first conclusion of law, from which other conclusions logically flow, is the following:

“Article 342-314, V.A.T.S. and the State Banking Board’s Rule No. 055.03.-08.001 require that a state bank seeking to change its domicile prove and the Board find a public necessity exists for the proposed move. To meet this requirement, an applicant must prove and the Board must find that there is a substantial or obvious community need in light of attendant circumstances for the bank to abandon its present location and that there is a substantial or obvious community need in light of attendant circumstances for the applicant bank to relocate at the new site for which it seeks approval.” (Emphasis added)

The obvious impact of this conclusion of law is to require an applicant bank, seeking change of domicile, to prove not only a public necessity that the bank fulfill a need in the proposed new location, but also that the applicant prove no public necessity for the bank to remain in the location in which it already operates. Taken to its logical conclusion, such requirement would also oblige the Banking Board reasonably to support both such ultimate findings by substantial evidence. We must look to the statute and the rule to determine whether dual proof and findings in instances of change of domicile are indispensable to validity of an order.

Under Article 342-314, prior to amendment and since its amendment in 1977, no state bank may change its domicile “. . . without first having received approval for such change from the State Banking Board in the manner provided for the approval of an original application for a charter.” (Emphasis added) Applications for and granting of charters are controlled by Article 342-305. The burden of proof and meeting conditions of the following are upon the applicant:

“(1) A public necessity exists for the proposed bank; (2) The proposed capital structure is adequate; (3) The volume of business in the community where such proposed bank is to be established is such as to indicate profitable operation of the proposed bank; (4) The proposed officers and directors have sufficient banking experience, ability and standing to render success of the proposed bank probable; and (5) The applicants are acting in good faith.” (Art. 342-305(A)(l), (2), (3), (4), and (5).

It is settled that the State Banking Board, in its functioning as an administrative body, may exercise only such authority and impose only such standards as are found in the statutes in clear and unmistakable language, and such authority will not be construed as conferred by implication. Board of Insurance Commissioners v. Guardian Life Ins. Co., 142 Tex. 630, 180 S.W.2d 906, 908 (1944); Key Western Life Insurance Company v. State Board of Insurance, 163 Tex. 11, 350 S.W.2d 839, 848 (1961).

Since the Banking Board, before approving an application for change of domicile, must follow the standards “provided for the approval of an original application for a charter,” the first finding must be that a “public necessity exists for the proposed bank,” under Article 342-305(A)(l). The only proposed bank in an application for change of domicile is the bank the applicant proposes to operate in the new domicile. Coupled with that determination is necessarily that of ascertaining whether the volume of business, in the community where the proposed operation is to be established, is sufficient to indicate a profitable operation, under Article 342-305(A)(3).

The State Banking Board contends, and we agree with the contention, that it is obvious from the plain meaning of these two provisions of the statute that the applicant is required to prove, and the Board to find, only that a public necessity exists in the community in which the bank proposes to make its relocation and that the volume of business in the area of new location is sufficient to indicate a profitable operation. It was error for the trial court to insist upon a dual proof and dual finding to include both the present location and the proposed new location of the bank. We note, however, that the trial court did not find that First State Bank was required to prove, and the Board to find, that the volume of business in the present location was insufficient to indicate a profitable operation.

We find 'nothing in Article 342-305(A)(l) and (3) to indicate that the Legislature intended to grant the Banking Board authority to require greater proof by an applicant bank than to show a public necessity and a probable profitable operation in the proposed new domicile, nor do we find in the statute anything so much as intimating or suggesting that the applicant must show, in addition, that there is no public necessity to remain in the present location, or that the volume of business in the present location is such as to indicate the bank will not have a profitable operation. The language of the statute is clear and unambiguous in expressing the legislative intent that the Banking Board must determine from proof made whether in the new location there is a public necessity and a reasonable probability of success, without regard to conditions in the present location.

If it may be regarded as desirable for the Banking Board to look at both the present and the proposed location, with respect to public necessity and probability of success, the standard for making such inquiry and findings may not be imposed by the Board, nor supplied by the courts, but only the Legislature may prescribe the required standards. Board of Insurance Commissioners v. Guardian Life Insurance Company, supra; Mathews Construction Company v. Jasper Housing Construction Co., 528 S.W.2d 323, 326 (Tex.Civ.App. Beaumont 1975, writ ref’d n. r. e.); Vargas v. Allied Finance Co., 545 S.W.2d 231, 234 (Tex.Civ.App. Tyler 1976, writ ref’d n. r. e.).

The trial court reached conclusions that (1) the finding of the Banking Board that “. . the officers and directors of the bank have sufficient banking experience, ability and standing to render success of the bank probable . . .” and (2) the further finding . . that the proposed capital structure is adequate . . . ” were not reasonably supported by substantial evidence. We agree with the Banking Board’s contention that in each of these conclusions the trial court erred.

As pointed out earlier, applications for change of domicile receive approval by the Banking Board “in the manner provided for the approval of an original application for a charter.” Articles 342-314 and 342-305. The term “in the manner” refers to the procedure or mode of obtaining review and approval of the application to change the bank’s domicile. Logan v. Stephens County, 98 Tex. 283, 83 S.W. 365 (1904), quoting with approval from Brown v. O’Connell, 36 Conn. 432, 4 Am.Rep. 89. See also Ross v. Conco Quarry, Inc., 543 S.W.2d 568, 575 (Mo.Ct.App.1976).

Upon examination of the standards for granting approval of new charters, as set out in Article 342-305, it is apparent that the five standards, when applied to an application for change of domicile, are not applicable to the same extent as required for new banks without a history of operation. For example, under the first standard (existence of public necessity) and the third standard (volume of business indicating profitable operation) the Board may require the same proof in a change of domicile as in grant of a new charter.

Yet under the second standard (adequate capital structure) and the fourth (officers and directors have experience, ability and standing to render success probable) the Board may find new and extensive proof needless in instances of changing a domicile, as compared with proof under a completely new venture by a bank not previously in operation. Fairly comparable considerations are found in original applications for savings and loan associations and for establishment of a branch office by an already established association. See Strain v. Lewis, 461 S.W .2d 498, 501 (Tex.Civ.App. Austin 1971, writ ref’d n. r. e.).

The language of Article 342-305(A)(2) and (4) clearly applies more precisely to standards of proof to be met by applicants for a new charter. Under subsection (2) proof must be that the “proposed capital structure is adequate.” The proposed capital structure in a change of domicile is of course the same under which the bank has been operating prior to making its application to move to a new location. Under subsection (4) the proof called for is a showing that the “proposed officers and directors have sufficient banking experience, ability and standing to render success of the proposed bank probable.” Obviously, in considering an application for change of domicile, the proposed officers and directors are the identical officials already operating a chartered bank, and success of the proposed bank can, in a change of domicile, refer only to the proposed new location for the same bank.

An established bank, seeking to move its location, is already under the supervision of the State Banking Board and the Commissioner, and by reason of official records its capital structure and the competence of its officers and directors are matters at least constructively within the knowledge of the Board. Some of the standards therefore under Article 342-305(A) may already be established when the Board has under consideration an application to change the bank’s place of operation.

The president of First State Bank testified at the hearing, relating his banking connections and something of his experience, and also testified concerning the connections and experience of the chairman of the bank’s board of directors, and that both these officers would continue their connection with First State Bank. A field examination report, officially noticed at the hearing, stated, “Present officers and directorate appear to be satisfactory at their respective positions. No new officers were disclosed.”

In addition, the bank president testified regarding the bank’s capital as of the date of the hearing, and an analysis of the capital was introduced in documentary form. The president testified concerning future capital plans, and the order of the Board was conditioned on infusion of $1,000,000.00 in additional capital. The capital structure of the bank was a subject treated in the field examination report.

Capital of First State Bank at the time of the hearing was $436,000. Present management was required to infuse additional capital, sufficient to bring the bank’s capital to $1,436,000 with which to begin its operations in College Station. The Board conditioned its approval of relocation upon the increase in capital being made prior to removal. Conditional approval is authorized under Article 342-305(D). State Banking Board v. Airline National Bank, 398 S.W.2d 805, 809 (Tex.Civ.App. Austin 1966, writ ref’d n. r. e.).

We conclude that the findings of the Board as to capital structure and as to experience, ability, and standing of the officers and directors are reasonably supported by substantial evidence.

The trial court concluded that the “Board improperly relied upon the Field Examination Report as authority for some of its underlying findings of fact.” The field examination report was prepared by a banking examiner for the State, who was authorized to conduct an examination in connection with the application First State Bank filed to change its name and move from Hearne to College Station. At the time of the hearing in August of 1976 the report was part of the files of the Banking Department, and at the outset of the hearing the hearing officer advised all parties that the Banking Board would consider the matters in its file, “particularly our investigation report” prepared by the banking examiner.

No objection or protest was made, and counsel for protesting parties announced during the hearing that counsel knew the Board would take official notice of its records and had obtained a certified' copy. Subsequently during the hearing counsel for First State Bank quoted from the Field Examination Report with particular reference to the proposed capital increase, to which no objection was made.

Upon the filing of an application the Banking Commissioner “. . . shall proceed to conduct a thorough investigation of the application, the applicants and their personnel . . .” Article 342-305(C). Other independent inquiries are permitted or required under the statute, in connection with an application. It is evident that the Legislature deemed such investigations valuable and essential tools for the State Banking Board. We conclude from the record that the Field Examination Report was available to all parties, although not actually introduced as evidence at the hearing.

Article 6252-13a, V.A.T.S. (Administrative Procedure Act), effective January 1, 1976, requires administrative agencies, intending to consider matters within the agency’s files, to give notice to the parties of this consideration. The Supreme Court has held that the law should be followed but concluded, “If a showing of harm or prejudice is made because of failure . to give such notice, a reversal and remand would be required.” (Emphasis added) Imperial American Resources Fund, Inc. v. Railroad Commission, 557 S.W.2d 280, 288 (Tex.Sup.1977). Even though it be contended that the notice regarding the Field Examination Report was inadequate and opportunity not complete to contest the material noticed by the Banking Board, no harm or prejudice has been shown because of such failure and the error, if error there was, will be treated as harmless and not sufficient grounds for reversal.

We believe, however, that the record reveals that the parties were sufficiently placed on notice that matters contained in the Field Examination Report would be considered by the Banking Board in passing on the application of First State Bank to relocate. No objection was made by the parties opposing the application.

The sixth and last conclusion upon which the trial court based its judgment stemmed from a finding of the court that Robert Stewart, the Banking Commissioner, had not read or reviewed the record of evidence and testimony compiled before the hearing officer prior to casting one of the two votes to approve the application, which brought the court to the conclusion that “. since no proposal for decision was served on the parties, the Board’s action” was in violation of Section 15 of Article 6252-13a, V.A.T.S. (Administrative Procedure Act).

Section 15 provides that;

“If in a contested case a majority of the officials of the agency who are to render the final decision have not heard the case or read the record, the decision, if adverse to a party to the proceeding other than the agency itself, may not be made until a proposal for decision is served on the parties, and an opportunity is afforded to each party adversely affected to file exceptions and present briefs to the officials who are to render the decision.”

Appellees opposing First State Bank’s change of domicile insist that Section 15 is applicable in this case and because a proposal for decision was not served on the parties the order was invalid. Appellees argue, “When a three member agency votes two to one on an application, the two members in the majority are ‘the agency officials who are to render the final decision.’ When one of those two has not heard the case or read the record, the proposal for decision provision of Section 15 of the A.P.A. applies.”

We do not understand the language of the statute to produce such result. We construe the statute to mean that the records must have been read by “a majority of the officials of the agency who are to ren-. der the final decision,” as distinguished from the officials of the agency having only executive or administrative duties, and we construe that phrase in Section 15 to mean a majority of the officials of the agency who are authorized by law to render final decisions in a legislative capacity. In this ease a majority of the officials empowered to make a final decision on the application evidently had read the record. Of the majority of two who had read the record, one official voted to grant the application and the other voted to deny the application. The order granting the change of domicile was the order of the State Banking Board, although one member of the Board dissented and would have denied the application.

From a practical standpoint, if the view of appellees is accepted and controls the interpretation of Section 15, a legal decision and valid order would become impossible on any three-member board or agency, unless the two members having read the record should vote together to grant or to deny, or until a proposal for decision is first served. In the present case, Member Lindsey voted to grant, and Member Stevens voted to deny the application. Commissioner Stewart, the only member who had not read the record, could vote with either Lindsey or Stevens and no valid decision or order would result under appellees’ construction. For appellees contend that “the two members in the majority under Section 15 are the agency officials” who vote together to make the final decision. Under that interpretation, Stewart’s vote with either of the other members would prevent the Banking Board from reaching a valid decision or issuing a valid order.

We find no appellate decisions of this state construing this aspect of Section 15, and the parties have offered none. A Maryland court has construed provisions of an administrative procedure statute in that state comparable to Section 15. The gist of these decisions is that in a contested case “the evidence need not be heard by all those who will render the final decision” and the statute “contemplates that . . . the evidence will not be heard by all those who will render the decision.” Younkin v. Boltz, 241 Md. 339, 216 A.2d 714 (1966); Bethesda Management Services, Inc. v. Department of Lic. & R., 276 Md. 619, 350 A.2d 390 (1976).

We hold that under Section 15 unless a majority of ail the members of the board or agency, having the duty under law to make decisions in contested cases, have read the record, the agency board must comply with the statute and serve the parties with a proposal for decision.

The judgment of the trial court setting aside and holding invalid the order of the State Banking Board is reversed. Judgment is rendered declaring valid and lawful the order of the Banking Board granting the application of First State Bank to change its name and move its domicile to College Station. The cause is remanded to the State Banking Board with instructions to the Banking Commissioner to grant the necessary certificates and approval to carry out the order of the Banking Board. Costs are assessed against appellees.

Reversed and Rendered and Cause Remanded with Instructions.


author: JAMES, Justice.

text:
    R. E. M., Appellant, v. STATE of Texas, Appellee.
    No. 5830.
    Court of Civil Appeals of Texas, Waco.
    July 20, 1978.
    Rehearing Denied Aug. 10, 1978.

      Eugene H. Lieck, Pickett & Lieck, San Antonio, for appellant.
    Bill M. White, Crim. Dist. Atty., Gerald R. Zwernemann, Mike Peden, Alan E. Bat-taglia, Asst. Dist. Attys., San Antonio, for appellee.
   OPINION

JAMES, Justice.

This is an appeal from an order of the Juvenile Court certifying and transferring Appellant as an adult to the District Court. See Section 54.02 of Title 3 of the Texas Family Code. After trial, the Juvenile Court transferred Appellant to the Criminal District Court for criminal proceedings, from which order Appellant appeals on twelve points of error. We overrule all of Appellant’s points of error and affirm the trial court’s judgment.

Appellant was born on April 17,1957, and is alleged to have committed an offense of the grade of felony, to wit, murder, on April 3, 1974, when Appellant was 16 years of age, nine days before his 17th birthday. On April 19, 1974, the State filed an original petition in the Juvenile Court of Bexar County, Texas, alleging delinquent conduct on the part of Appellant and asking that he be adjudged a juvenile delinquent. Thereafter, on May 6,1974, the State filed in said Juvenile Court a motion to certify and transfer Appellant to the Criminal District Court of Bexar County, in order that the latter court proceed against Appellant as an adult.

A hearing on the motion to certify and transfer was originally had on August 12, 1974, which resulted in the trial court’s transferring the cause to the Criminal District Court. That finding was reversed by the Fourth Court of Civil Appeals, and the cause was remanded back to the Juvenile Court. R.E.M. v. State (San Antonio CA 1975) 532 S.W.2d 645, no writ.

A second hearing on the motion to certify and transfer was had on April 1, 1976, which resulted in the Juvenile Court again transferring the cause to the Criminal District Court. This order of the Juvenile Court was also reversed by the Fourth Court of Civil Appeals and for the second time the cause was remanded to the Juvenile Court. R.E.M. v. State (San Antonio CA 1976) 541 S.W.2d 841, NRE.

After the second remand, a third hearing on the motion to certify and transfer cause (same being upon the State’s First Amended Motion) was had on March 31,1977, after which the Juvenile Court once more certified and transferred Appellant as an adult for criminal proceedings, from which action of the Juvenile Court Appellant appeals.

In his first two points of error, Appellant contends the trial court erred in overruling his “Plea to the Jurisdiction No. 1” because Appellant was an adult at the time of the transfer hearing and therefore he was not subject to Juvenile Court proceedings. He asserts that the Juvenile Court had no jurisdiction over him and that subjecting him to the Juvenile Court proceedings constituted a denial of equal protection and due process. We do not agree.

At the third transfer hearing on March 31, 1977, Appellant was 19 years, 11 months, and 14 days old, just 17 days short of his 20th birthday. As stated above, the offense which occasioned the filing of this delinquency suit was alleged to have occurred on April 8, 1974, nine days prior to Appellant’s 17th birthday; the original motion to certify and transfer was filed on May 6, 1974, when Appellant was 17 years of age and therefore subject to the Juvenile Court’s jurisdiction. See Section 51.02(1), Title 3 of Texas Family Code, for definition of “child.”

In the case at bar, there has been no adjudication of juvenile delinquency. We agree with Appellant that since Appellant was over 17 years old at the time of the certification hearing appealed from, that the Juvenile Court at that time had no jurisdiction to try him for juvenile delinquency. Carrillo v. State (Tex.1972) 480 S.W.2d 612, 618; Casanova v. State (Tex.1973) 494 S.W.2d 812, 813.

But in the case before us we are not dealing with an appeal from an adjudication of juvenile delinquency, but are dealing with an appeal from certification and transfer, in which latter instance, as we understand it, our Supreme Court has laid down a different rule, in Hight v. State (Tex.1972) 483 S.W.2d 256, 257. Hight was an appeal from an order of the Juvenile Court waiving jurisdiction and transferring the defendant as an adult, as in the case at bar. Hight became 17 years old while his appeal was in progress. In this connection the Supreme Court said:

“George Hight appealed the waiver order to the Court of Civil Appeals claiming error in the waiver proceeding. That court refused to consider the merits of the case but took notice of the fact that George Hight had reached age seventeen and that the juvenile court had lost jurisdiction. This loss of jurisdiction was said by the court to make the case moot, and following established Texas procedure, set aside all previous orders, (citation). We disagree with this reasoning. The single fact of his reaching age seventeen has nothing to do with whether the case is moot; the loss of jurisdiction in the juvenile court only prevents a remand if the case is reversed.” Also see Kent v. United States (U.S.S.Ct., 1966) 383 U.S. 541, 86 S.Ct. 1045, 16 L.Ed.2nd 84, where the court was confronted with a similar problem. See 86 S.Ct. at page 1059.

In order to be in harmony with Hight, supra, and Kent, supra, we are of the opinion and hold that once the jurisdiction of the juvenile court has been timely invoked (as here) by the filing of a petition for waiver of that court’s jurisdiction and transfer of the alleged offender to the district court for prosecution as an adult, the jurisdiction of the juvenile court continues until there has been a final disposition of the question of waiver of jurisdiction, whatever be the age of such alleged offender at the time of such final disposition. This is the precise holding of the San Antonio Court of Civil Appeals on the first appeal of the instant case. See R.E.M. v. State (CA 1975) 532 S.W.2d 645 at page 652, no writ. Also see In the Matter of J. R. C. (Texarkana CA 1977) 551 S.W.2d 748, NRE. Appellant’s points one and two are overruled.

By Appellant’s third point of error it is asserted the trial court erred in overruling Appellant’s motion to dismiss because Appellant was in detention when the State’s original petition was filed and no hearing was conducted thereon within ten days as required by Section 53.05(b)(1) of the Texas Family Code.

Section 53.05 in its pertinent parts provides:

“(a) After the petition has been filed, the juvenile court shall set a time for the hearing.
“(b) The time set for the hearing shall be not later than 10 days after the day the petition is filed if:
“(1) The child is in detention; _”

The State’s original motion to transfer was filed on May 6, 1974. Theretofore, on April 19, 1974, (the same day the petition for adjudication for juvenile delinquency was filed), the Juvenile Court entered an order for a complete diagnostic study, social evaluation, and full investigation of the Appellant as mandated by statute.

On April 22,1974, Appellant filed a “motion in limine” alleging that the order for diagnostic study constituted a “deprivation of the rights of the child” under the Federal and State Constitutions. Said motion recited that subjecting him to questioning while under arrest is a subterfuge contrary to his rights, and requested the court to set aside such order for diagnostic study.

On May 7, 1974, Appellant’s counsel filed a motion seeking an order requiring that Appellant be questioned only in the presence of his attorney. Said motion recited that counsel had instructed Appellant to “speak to no one.”

Appellant was in detention from April 9, 1974, until July 1, 1974, when he was released.

On June 7,1974, a hearing was had in the judge’s chambers for the purpose of determining whether Appellant would voluntarily comply with the trial court’s order to submit himself to a complete diagnostic study, social evaluation, and full investigation. The transfer hearing complained of, which was the subject matter of the first appeal in this case, was held August 12, 1974.

The Appellant scrupulously followed his attorney’s advice and refused to cooperate not only prior to the first appeal, but also prior to the second appeal. In the events leading up to the trial court’s second transfer order, Appellant refused to answer any questions except his name, age, weight, height, and date of birth, and refused to take psychometric tests. The record is clear that the delays now complained of by Appellant were caused primarily and perhaps solely by Appellant’s refusal to cooperate.

The trial court could not conduct a hearing until it had obtained a complete diagnostic study required by Section 54.-02(d), since the obtaining of such study is mandatory. Moreno v. State (Tyler CA 1974) 510 S.W.2d 116, NRE; R.E.M. v. State (San Antonio CA 1975) 532 S.W,2d 645, 648, no writ. Therefore the delays complained of by Appellant were caused largely or solely by Appellant’s refusal to cooperate. We do not believe that Appellant should be permitted to complain about a delay in which he participated or for which he was responsible. See In the Matter of J.R.C. (Texarkana CA 1977) 551 S.W.2d 748, at page 755, NRE. There is no provision in Section 53.05(b) for a loss of the Juvenile Court’s jurisdiction for failure to set the hearing within the ten-day period, where the child is in detention. Appellant’s third point is overruled.

Moreover, as stated before, this is Appellant’s third appeal, and his third point concerning no hearing within 10 days was not raised or passed upon by the San Antonio Court of Civil Appeals in either the first appeal or the second appeal. We are of the opinion and hold that Appellant should not be permitted to urge such matter on a third appeal, where he has chosen not to raise such point on either of his previous two appeals. See Hillhouse v. Allumbaugh (Eastland CA 1953) 258 S.W.2d 826, NRE; Houston Endowment, Inc. v. City of Houston (Houston 14th CA 1971) 468 S.W.2d 540, NRE; 4 Tex.Jur.2d “Appeal and Error-Civil Cases” pars. 997 to 999 inclusive, pp. 730 et seq., and the cases therein cited.

Appellant’s fourth point complains the trial court erred in overruling Appellant’s motion to dismiss the State’s first amended motion to certify and transfer because the same was filed when Appellant was 19 years old and the Juvenile Court lost jurisdiction over any amended motion. Said State’s amended motion was filed March 4,1977, and hearing was had thereon March 31, 1977, just seventeen days before Appellant’s twentieth birthday.

We have already cited the authorities hereinabove in the discussion under Appellant’s first and second points to the effect that when the jurisdiction of the Juvenile Court is timely invoked (as here) that the Juvenile Court has continuing jurisdiction over Appellant until there has been a final disposition of the question of waiver of jurisdiction. We see no reason why the State should not be permitted to file an amended pleading under the provisions of Rule 63, Texas Rules of Civil Procedure. Appellant’s fourth point is overruled.

By Appellant’s fifth point he asserts the trial court erred in overruling Appellant’s motion to quash and alternative motion to dismiss State’s petition to certify and transfer cause because said State’s motion was not made on personal knowledge or information and belief and was not sworn to. Appellant cites Article I, Section 9 (Searches and Seizures) of the Texas Constitution as requiring such motion to certify and transfer to be sworn to. We do not agree.

Section 53.04 of the Texas Family Code governs the court petition and any answer thereto; subsection (a) thereof provides in its pertinent parts that the petition may be made by the prosecuting attorney who has knowledge of the facts alleged or is informed and believes that they are true; subsection (c) provides that the petition may be on information and belief. There is nothing in Section 53.04 that requires that the petition be sworn to by the prosecuting attorney. Since this is a civil proceeding, it is our opinion that the form of a petition filed pursuant to Section 53.04 is governed by said Section as opposed to the form prescribed for criminal prosecutions. See In Re: V.R.S. (Amarillo CA 1974) 512 S.W.2d 350 at page 355, no writ. Appellant’s fifth point is overruled.

Appellant’s sixth point raises a complaint that was presented to and passed upon adversely to Appellant on the second appeal of this case, as follows: Appellant again contends the trial court erred in overruling his plea in bar and thereby denied him equal protection of the laws in contravention of the Fourteenth Amendment of the Federal Constitution. In this point of error, Appellant says that because the State filed a petition against him for an adjudication of delinquency prior to filing the petition for certification and transfer, the Juvenile Court was deprived of jurisdiction over Appellant by virtue of Article 30(a) of the Texas Penal Code (1973).

This point of error was presented by Appellant, discussed, and decided against Appellant by the San Antonio Court of Civil Appeals in the second appeal of this case, R.E.M. v. State (San Antonio CA 1976) 541 S.W.2d 841 at pages 843 and 844, NRE, and we will not rediscuss these matters here. Suffice it to say that the prior adjudication of this contention by the San Antonio Court of Civil Appeals in said second appeal is now the law of this case, with a writ of error having been refused thereupon by our Supreme Court, “no reversible error.” This being so, this contention contained in Appellant’s sixth point of error has been laid to rest. See Hillhouse v. Allumbaugh, (Eastland CA 1953) 258 S.W.2d 826, NRE; Houston Endowment, Inc. v. City of Houston (Houston 14th CA 1971) 468 S.W.2d 540, NRE; 4 Tex.Jur.2d, “Appeal and Error— Civil Cases,” pars. 997 to 999 inclusive, pp. 730 et seq., and the cases therein cited.

Appellant’s points seven through eleven argue: (7) the trial court erred in finding that Appellant is presently of sufficient sophistication and maturity to be tried as an adult, contending that the proper standard is whether Appellant was of sufficient sophistication and maturity in May 1974, when the State’s original motion to certify was filed; (8) there is no evidence that in May 1974 that Appellant was of sufficient sophistication and maturity to understand the seriousness of his conduct and that he possessed the degree of culpability and responsibility required in law for the commission of a felony; (9) the trial court erred in its finding that there was little, if any, prospect of adequate protection to the public and likelihood of rehabilitation of Appellant by the use of the procedures, service and facilities currently available to the Juvenile Court; because the proper standard is whether the procedures, service and facilities available in May 1974 were adequate for the protection of the public and whether in May 1974.there was a likelihood of reasonable rehabilitation of Appellant; (10) there is no evidence that the procedures, services, and facilities available in May 1974 were not adequate for the protection of the public and the likelihood of reasonable rehabilitation of Appellant; (11) that the trial court’s order of certification and transfer is so against the great weight and preponderance of the evidence as to be manifestly unjust. We overrule all of these contentions as being without merit.

Without detailing the evidence, suffice it to say that the trial court had before him evidence concerning the above matters as they existed in May 1974 as well as in March, 1977, at the time of the last certification order presently appealed from; that the record affirmatively shows that the trial court considered all of such evidence as he is required to do under Section 54.02(f) of the Texas Family Code; that such evidence is amply sufficient to support the trial court’s order, and such order is not against the great weight and preponderance of the evidence under the test laid down by our Supreme Court in In re King’s Estate (Tex.1951) 150 Tex. 662, 244 S.W.2d 660.

Appellant’s twelfth and final point of error asserts the trial court erred in certifying and transferring this cause because there had been a “prior adjudication” on the petition of delinquency by virtue of the fact that Appellant pleaded nolo con-tendere to said petition. The State filed its petition originally on April 19, 1974, alleging the Appellant had engaged in delinquent conduct, and prayed that Appellant be adjudged a delinquent. To this petition the Appellant answered with a plea of nolo contendere. What Appellant is saying is that this amounts to a “prior adjudication” of delinquency. We do not agree.

Section 54.03, Texas Family Code, contains detailed provisions for an adjudication hearing in a juvenile case, and Subsection (a) thereof specifically provides that “a child may be found to have engaged in delinquent conduct..only after an adjudication hearing conducted in accordance with the provisions of this section.” (emphasis supplied). In the case at bar, there is no evidence of any such adjudication hearing ever having been held or any such order entered. Indeed, there is evidence in the record to the effect that no such hearing has ever been conducted. The mere filing of a petition by the State, and answer by Appellant of nolo contendere does not constitute an adjudication of delinquency; rather a holding to such effect would violate the express provisions of Section 54.03(a). Appellant’s twelfth point is overruled.

We have carefully considered all of Appellant’s points and contentions, and hold that no reversible error is shown thereby. We accordingly affirm the trial court’s judgment.

AFFIRMED.


author: HALL, Justice.

text:
    ASCH ADVERTISING, INC., Appellant, v. SONY CORPORATION OF AMERICA, Appellee.
    No. 5826.
    Court of Civil Appeals of Texas, Waco.
    July 20, 1978.

      Arch G. Adams, LeLaurin, Adams, Ei-chelbaum & Sanders, P. C., San Antonio, for appellant.
    Robert D. Akers and Kenneth R. Guest, Whitehurst, Guest & Adair, Dallas, for ap-pellee.
   HALL, Justice.

This is a venue case involving the application of subdivision 4 of article 1995, Vernon’s Tex.Civ.St.

Appellant Asch Advertising, Inc., filed this suit in Bexar County against Post T.V. and Appliance, Inc., and against appellee Sony Corporation Of America, to recover $3,180.00 allegedly due ASCH for outdoor advertising services it performed for POST. ASCH pleaded a cause of action against POST based upon a written contract executed by POST and ASCH. A copy of the contract was attached to ASCH’s petition and was incorporated into it by reference. The contract names POST as “Dealer”; recites that it is “In conjunction with SONY Dealer Co-op Outdoor Advertising Program”; and, under “Monthly Space Cost” the contract provides “25% to be Dealer Obligation” and “75% to be Secured by Dealer from Co-op Funds.” A square box in the upper right corner of the contract contains the words “SONY DEALER COOP” followed underneath with the words “Funds Available,” which, in turn, is followed by the words “Yes_No_” with a check mark in the blank after “Yes.”

The cause of action pleaded by ASCH against SONY reads as follows:

“That in the alternative, in the event the Court finds that no contract was entered into by and between Plaintiff and POST, then and in that event, Plaintiff would show unto the Court that Plaintiff was fraudulently induced to believe that Defendant, POST, had credit with SONY when in truth and in fact, Defendant, POST, had no such credit. That plaintiff relied upon the representations of Defendant, SONY, and performed services for Defendant, POST, relying upon the representations of SONY, but that after substantial time passed, SONY, takes the position that such representations were never made and that, therefore, because plaintiff relied upon the original representations of SONY, Plaintiff is entitled to recover of and from SONY its contractual damages as plead against POST, in the sum of $3,180.00 and punitive damages by reason of such fraud and misrepresentations in the sum of $5,000.00.”

ASCH prayed for recovery of $3,180.00 from POST, and “in the alternative, the sum of $8,180.00 from SONY,” for interest and costs, and for general relief.

SONY filed its plea of privilege to be sued in Dallas County, the county of its residence. ASCH controverted the plea, and invoked the provisions of subdivision 4 of article 1995 for maintaining suit against SONY in Bexar County. After a hearing before the court without a jury, judgment was rendered granting SONY’s plea of privilege and ordering the cause against SONY transferred to Dallas County. ASCH appeals.

Subdivision 4 of the venue statute provides, “If two or more defendants reside in different counties, suit may be brought in any county where one of the defendants resides.” Our parties recognize that to obtain the benefits of that venue exception the plaintiff must (1) plead and prove that one defendant resides in the county of suit; and (2) allege in his petition a joint cause of action against the resident and nonresident defendant, or a cause of action against the resident defendant so intimately connected with the cause of action alleged against the nonresident defendant that the two may be joined to avoid a multiplicity of suits; and (3) prove the cause of action pleaded against the resident defendant. See, Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 ■ S.W.2d 1300 (1936). They also agree, and it is undisputed in the record, that POST is a resident of Bexar County and that ASCH proved a cause of action against POST at the plea of privilege hearing. In question is whether ASCH met requirement number two, above, by pleading a joint cause of action against POST and SONY, or causes of action against each so intimately connected that they may be tried together to avoid a multiplicity of suits. ’

ASCH tacitly concedes that it did not plead a joint cause of action against the defendants, but it argues that it has met the “intimately connected” requirement. Oppositely, SONY emphasizes that ASCH has pleaded distinct alternative causes against it and POST, and argues that it cannot be classed a proper party to ASCH’s suit against POST.

We agree with ASCH. Accordingly, we reverse the judgment.

Under subdivision 4 of the venue statute the “proper party” test is defined in terms of avoiding a multiplicity of suits. Stockyards Nat. Bank v. Maples, supra, at 95 S.W.2d 1302; Von Scheele v. Kugler-Morris Gen. Contractors, Inc., 532 S.W.2d 375, 381 (Tex.Civ.App.—Dallas 1975, writ dism.). So, it is the rule that where the plaintiff’s petition shows that the causes asserted against the resident defendant and the nonresident defendant grew out of the same transaction or a series of closely related events and are so intimately connected that they should be joined to avoid a multiplicity of suits, the nonresident defendant is a proper party to the suit against the resident defendant within the meaning of subdivision 4. James v. Drye, 159 Tex. 321, 320 S.W.2d 319, 323 (1959); H. Molsen & Co., Inc. v. Williamson, 510 S.W.2d 366, 369 (Tex.Civ.App.—Dallas 1974, no writ); State Farm Mutual Automobile Ins. Co. v. White, 461 S.W.2d 476, 479 (Tex.Civ.App.—Tyler 1970, no writ); Jefferson Chemical Co., Inc. v. Forney Engineering Co., 466 S.W.2d 361, 364 (Tex.Civ.App.—Houston [1st Dist.] 1971; writ dism.). Under the later cases (which we believe express the better rule) if the proper party test is met it does not matter that plaintiff’s action against either defendant is pleaded alternatively. Von Scheele v. Kugler-Morris Gen. Contractors, supra, at 532 S.W.2d 379; Angelo v. Chemical Bank & Trust Co., 529 S.W.2d 783, 787 (Tex.Civ.App.-Dallas 1975, writ dism.); Bee County Cooperative Ass’n v. Dominy, 489 S.W.2d 418, 421 (Tex.Civ.App.—Corpus Christi 1972, no writ). And it does not matter that one is a suit on contract and the other is a tort action. Atlas Roofing Company v. Hall, 150 Tex. 611, 245 S.W.2d 477 (1952); Jefferson Chemical Co., Inc. v. Forney Engineering Co., supra, at 466 S.W.2d 364; State Farm Mutual Automobile Ins. Co. v. White, supra, at 461 S.W.2d 479.

In our case the causes of actions pleaded against both defendants stemmed from the performance of advertising services for POST by ASCH. At issue in both actions is which defendant induced ASCH to perform the services and which is liable for payment. The liability of each defendant grows out of the same transaction, and the ultimate issues are so intimately connected that the two causes of action should be tried together to avoid a multiplicity of suits.

SONY argues that because its liability under ASCH’s pleadings is contingent upon the nonliability of POST, venue cannot under any circumstances be maintained against SONY in the county of suit under subdivision 4, reasoning that ASCH’s proof of a cause of action against POST negates liability by SONY, and that without such proof ASCH could not invoke the benefits of the statute. This argument is without merit. In Stockyards Nat. Bank v. Maples, supra, at 95 S.W.2d 1304, our Supreme Court held that the applicability of subdivision 4, if otherwise proper, would not be defeated “if the evidence upon the hearing of the plea of privilege affirmatively disclosed that the plaintiff had no cause of action, either joint or several, against the nonresident defendant.” The Court said that the issue raised by the plea of privilege and the controverting affidavit “is venue, not liability.” See also, Texas State Bank of Alice v. Baker, 275 S.W.2d 168,171 (Tex.Civ.App.—San Antonio 1955, no writ); Von Scheele v. Kugler-Morris Gen. Contractors, supra, at 532 S.W.2d 380.

The judgment of the trial court is reversed. Judgment is here rendered denying SONY’S plea of privilege. The case is remanded for trial.


author: McDONALD, Chief Justice.

text:
    Norma Padon MINCHEN, Appellant, v. Deloris Maurine Minchen FARRELL, Appellee.
    No. 5849.
    Court of Civil Appeals of Texas, Waco.
    July 20, 1978.
    Rehearing Denied Aug. 24, 1978.
    H. J. Bernard, Bernard & Bernard, Houston, for appellant.
    Lloyd M. Lunsford, South Houston, for appellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by Norma Padon Min-chen, proponent of a holographic will written July 26, 1975 by Samuel Minchen, deceased, from judgment denying probate of such will, and refusing to revoke probate of a prior will executed by the deceased.

Norma Padon Minchen filed application for the probate of a holographic will written by her husband Samuel Minchen, deceased, and further filed suit to revoke the probate of a prior will executed by deceased on May 14, 1971 on ground such will was revoked by the July 26, 1975 will.

Appellee is Deloris Minchen Farrell daughter of Samuel Minchen, and Independent Executrix of the May 14, 1971 will executed by deceased.

Trial was to a jury which answered the following Special Issue:

“Do you find from a preponderance of the evidence that Samuel Minchen had testamentary capacity at the time of the purported signing of the purported will on July 26, 1975?
“In connection with the term ‘testamentary capacity’ you are instructed that a person lacks testamentary capacity when he does not have sufficient mental ability to understand the business in which he is engaged, the effect of his act in making the will and the nature and extent of his property; he does not know his next of kin and the natural objects of his bounty and their claims upon him; he does not have .sufficient memory to collect in his mind the elements of the business about to be transacted and to hold them long enough to perceive at least their obvious relation to each other and to be able to form a reasonable judgment as to them.
“Answer: We do not.”

The trial court rendered judgment on the verdict denying probate of the July 26,1975 will, and denying application to set aside probate of the May 14, 1971 will.

Appellant Norma Padon Minchen appeals on one point:

“The trial court erred in holding that the Deceased lacked the necessary testamentary capacity to execute a holographic will.”

The deceased Samuel Minchen, a real estate broker, was married to his first wife 39 years and had 4 children. In February 1970 his wife died. In 1971 he executed a will leaving his estate to his 4 children, appointing his daughter Deloris Farrell as Independent Executrix of such will.

On December 26, 1973 at which time he was 71 he married Mrs. Norma Padon.

On July 26, 1975 he executed a will revoking the earlier will; leaving his 4 children $1.; and all the balance of his property to his second wife. The July 26, 1975 will was in his own handwriting having been copied by him from a will prepared by an attorney from Victoria who had formerly worked with Mrs. Norma Padon Minchen. Such holographic will was witnessed by 2 witnesses and acknowledged before a Notary Public.

The 2 witnesses to the will, the notary who took the acknowledgments, a niece of Mrs. Norma Padon Minchen’s, Mrs. Min-chen, and 2 witnesses who had known the testator for several years, testified the testator was rational, talked coherently and intelligently, and discussed a real estate matter the day the July 26, 1975 will was executed; and was no different mentally in 1975 than he had been in earlier years.

Testator’s son testified he officed with his father in 1973 or 1974; that some 3 years before his death he had to have a lot of help in all areas; that Mrs. Norma Padon Min-chen told him his father was “like a little child.”

Testator’s daughter-in-law testified that he had arteriosclerosis, that he failed to recognize members of his own family, and that on July 26, 1975 he did not have such testamentary capacity to understand the business and effect of making a will; the nature of his property; or the natural objects of his bounty.

Testator’s daughter testified her father’s physical and mental condition deteriorated after 1972; that her father suffered from arteriosclerosis or hardening of the arteries; that he could not remember her children’s names; that he could not remember anything, that in June 1975 he could not talk coherently.

Dr. Rivers, a medical doctor who examined testator on July 24, 1975, two days before execution of the will, testified he was somewhat weak; had difficulty with recent memory; that he suffered from senility, the ravage of age; quoted testator as saying he could not remember anything for 3 years and forgets everything; and quoted Mrs. Minchen who was present at the examination with saying he was unable to remember for more than 30 minutes. The doctor further testified testator suffered from arteriosclerotic disease, enlarged heart and cardiovascular disease, arthritis, weakness, senility and hearing loss; and that at the examination he was pleasant, alert, cooperative and rational.

From the foregoing evidence we think a jury might have found either way on the issue of testamentary capacity. The jury weighed the evidence and passed on the credibility of the witnesses and found that testator did not have testamentary capacity at the time he signed the will on July 26, 1975. We hold that there is ample evidence to support such finding and that same is not against the great weight and preponderance of the evidence. In re Kings Estate, 150 Tex. 662, 244 S.W.2d 660.

Appellant’s point is overruled.

AFFIRMED.


author: RAY, Justice.

text:
    B & M MACHINE COMPANY, Appellant, v. AVIONIC ENTERPRISES, INC., Appellee.
    No. 8528.
    Court of Civil Appeals of Texas, Texarkana.
    July 25, 1978.
    Frank H. Pope, Jr., Yarborough & Pope, Inc., Bedford, for appellant.
    Ed T. Smith, Bonham, for appellee.
   RAY, Justice.

This is a suit on a contract. B & M Machine Company (B & M), appellant (plaintiff), brought suit against Avionic Enterprises, Inc. (Avionic), appellee (defendant), for breach of contract seeking recovery of damages in the sum of $3,300.00. The case was tried without a jury and the trial court entered its judgment that appellant, B & M, recover the sum of $412.50, taxing all costs against appellant. B & M has appealed and submits eleven points of error for our consideration.

The record reflects that prior to January, 1974, Avionic contracted with Kelly Air Logistics Center to build eight stair ladder levers; that Avionic was to provide the raw material to construct the stair ladder levers, machine the levers, anodize the levers, install the bearings, paint and package the levers, and ship the levers to Kelly Air Logistics Center; that Kelly Air Logistics Center was to pay Avionic the sum of $1,640.64 for the total contract price which included the machine operation. In the early part of 1974 Avionic was involved in other work and desired to subcontract the machining portion of the eight levers; that George Waldie, Avionic’s agent, went to B & M Machine Company’s place of business in Tarrant County to subcontract the machining portion of the job; that Waldie had authority to subcontract this part of the work for as much as $60.00 per unit or total authority to subcontract the job for as much as $480.00; while at B & M Machine Company, Waldie talked to Glen Boydstun, president of B & M, about that company’s machining the levers; that following Boydstun’s and Waldie’s conversation, Boydstun notified William Blue, an employee of B & M at that time, and gave Blue the government specifications which had been brought to B & M by Waldie, and Boydstun asked Blue to prepare a bid or offer to be submitted to Waldie; that pursuant to Boydstun’s request, Blue arrived at a bid or offer concerning the machining of the levers; that upon completion of the preparation of the bid concerning the levers, Blue delivered the result to Waldie; the bid was submitted to Waldie and Waldie understood the total bid to be $412.50 for machining all eight levers; that Boydstun understood the $412.50 offer submitted by Blue to be the price charged for each lever machined by B & M for a total contract price of $3,300.00; that Blue did not know whether the $412.50 price he submitted was a per unit price or a total contract price; that on or about January 7, 1974, subsequent to the bid, Avionic sent to B & M its order for machining the eight levers which showed $412.50 to be the total consideration to be paid by Avionic to B & M for machining the levers; that following B & M’s receipt of the order and prior to its completion of machining the levers, there arose a dispute between appellant and appellee as to the contract price that appellee was to pay to appellant for machining the levers. The trial court determined that the parties did not have a meeting of the minds concerning the contract price, and made its findings of fact and conclusions of law and entered judgment accordingly.

The trial court found “There was no meeting of the minds between Avionic Enterprises, Inc. and B & M Machine Company concerning the payment to be paid by Avionic Enterprises, Inc. to B & M Machine Company for the stair ladder levers in question, and therefore, no contract.”

The trial court further found as a fact that “defendant [Avionic Enterprises, Inc.] has admitted that it owed plaintiff [B & M Machine Company] $412.50 and has previously tendered this amount to plaintiff by a check but plaintiff has not cashed same.”

It was also found as a fact that B & M’s lawsuit was for breach of contract and did not seek any relief based on quantum meru-it and that B & M failed to establish by a preponderance of the evidence the value of the eight stair ladder levers.

The trial court concluded that since there was no meeting of the minds between the parties that B & M could not recover against Avionic for breach of contract, but allowed B & M to recover the sum of $412.50 because Avionic admitted that it owed B & M that amount and tendered such sum to B & M.

Appellant not only had the burden of proof in this case, but also had the burden of persuasion. Our review of the record substantiates the trial court’s conclusion that appellant thought the contract price was $412.50 per unit and that appellee thought the contract price was for the total sum of $412.50. The evidence was conflicting as to whether or not the parties had a meeting of the minds. It was incumbent upon the trial court as the trier of fact to determine if the parties had reached a meeting of the minds as to the contract price. The court determined from all the evidence that the parties had failed to reach a meeting of the minds and thus appellant, B & M, was not entitled to any recovery on its suit for breach of contract. • The recovery allowed B & M in the judgment was not for breach of contract, but was that volun-' tarily agreed to be paid by appellee, Avionic.

Under the circumstances of this case, the law is clear that the minds of the parties must meet on every material element in order for there to be a binding contract. 13 Tex.Jur.2d, Contracts, Sec. 14, pp. 127-130; Estate of Eberling v. Fair, 546 S.W.2d 329, 333 (Tex.Civ.App. Dallas 1976, writ ref’d n.r.e.). The court in Eberling, supra, succinctly stated, “Under contract law, a contract whether written or oral, must define its essential terms with sufficient precision to enable the court to determine the obligations of the parties.” In the present case, it was essential that the contracting parties arrive at a contract price upon which they both agreed. The evidence establishes in this case that the parties did not arrive at a mutually agreed price. Since there was no meeting of the minds as to the contract price, there was no contract. The trial court’s finding in this regard is supported by the evidence. Appellant’s points of error 1 through 5 are overruled. Appellant’s points of error 6 and 7 are moot since the judgment dated April 14, 1977, was superseded by the amended judgment entered on April 29, 1977. Appellant’s eighth point of error concerning whether or not the amended judgment superseded the original judgment has already been determined. See B & M Machine Company v. Avionic Enterprises, Inc., Tex.Sup., 566 S.W.2d 901 (1978).

In point of error no. 9 appellant contends that the trial court erred in assessing costs against appellant because such action was contrary to Rule 131, Tex.R. Civ.P. We do not agree. The thrust of appellant’s cause of action was for breach of contract. The suit was not for quantum meruit. Appellant failed to establish one of the essential elements of the contract, that is, that the parties’ minds had met as to the contract price. Thus, appellant did not prevail in the action which it had asserted. Appellant therefore was not entitled to recover anything but for the fact that appel-lee voluntarily agreed to pay appellant the sum of $412.50 which the trial court incorporated into its judgment. The trial court properly assessed costs against appellant. Appellant’s point of error no. 9 is overruled. Harlow v. Swift and Company, 491 S.W.2d 472, 477 (Tex.Civ.App. Eastland 1973, writ ref’d n.r.e.).

Appellant’s remaining points of error have been examined and found to be without merit and are thus overruled.

The judgment of the trial court is affirmed.


author: BRADBURY, Justice.

text:
    Hattie FREEMAN, Appellant, v. Bobby Joe FREEMAN, Appellee.
    No. 5088.
    Court of Civil Appeals of Texas, Eastland.
    July 27, 1978.

      Thomas R. Fox, Garland, for appellant.
    C. R. Dickenson, Abilene, for appellee.
   BRADBURY, Justice.

Hattie Freeman, appellant, her children and the children of a deceased child sued appellee, Bobby Joe Freeman, independent executor of the estate of Oliver T. Freeman, for specific performance of an alleged contract which they argue was embodied in a joint and mutual will. Oliver T. Freeman and Hattie Freeman, husband and wife, on April 4, 1966, executed a joint will and in effect left to the survivor of them a life estate and on the death of the survivor their estates would pass to their children in equal shares. Both Hattie Freeman and Oliver T. Freeman had been previously married to other parties and had children by such previous marriages. May 31, 1967, Oliver T. Freeman, without notice to his wife made a new will leaving his separate estate and his interest in the community property to his children and leaving to his wife a life estate in certain oil payments. The trial court rendered judgment for ap-pellee and we affirm.

Appellant argues that the joint will of April 4, 1966, was mutually made in furtherance of an agreement between the parties and her husband in making a new will without notice to her breached the agreement.

The question we must decide is whether Oliver T. Freeman had the right, without notice to his wife, to revoke the will while he and his wife were both alive.

Appellant cites Morris v. Texas Elks Crippled Children’s Hospital, Inc., 525 S.W.2d 874 (Tex.Civ.App.—El Paso 1975, writ ref. n. r. e.); Nye v. Bradford, 144 Tex. 618, 193 S.W.2d 165 (1946); Harrell v. Hickman, 147 Tex. 396, 215 S.W.2d 876 (1948); Murphy v. Slaton, 273 S.W.2d 588 (Tex.1954); and, Dougherty v. Humphrey, 424 S.W.2d 617 (Tex.1968). These cases in effect hold that a will can be established as contractual from the provisions of the will itself. In the instant case, on oral argument, appellant agreed there was no extraneous evidence that the parties had made an agreement not to change the will but argues that the provisions of the will are sufficient to establish such agreement. She further argues that the trial court found, “There was no competent proof of any alleged contract to refrain from revocation of the joint and mutual will which was executed in 1966”, and insists from that finding that the court in effect found that the will in question was a mutual will.

“A joint will is a single testamentary instrument which contains the wills of two or more persons, is executed jointly by them, and disposes of property owned jointly, in common, or severally by them. A mutual will is one executed pursuant to an agreement between two or more persons to dispose of their property in a particular manner, each in consideration of the other. If the testators name each other as beneficiaries, the wills are reciprocal. Two or more wills may be mutual without being joint. A joint and mutual will must be the will of two or more persons contained in a single testamentary instrument, jointly executed by them pursuant to an agreement to dispose of their respective estates to each other or to third parties.” Vaughan, “The Joint and Mutual Will,” 16 Baylor L.Rev. 167 (1964).

In Weidner v. Crowther, 157 Tex. 240, 301 S.W.2d 621 (1957), the court stated, “At the heart of a mutual will lies a contract of the parties.” In Morris v. Texas Elks Crippled Children’s Hospital, Inc., supra, the court said:

“Nevertheless, the will may, by its terms or in its recitals, conclusively prove that it is based upon or was executed in furtherance of an agreement. This is particularly true where the joint will speaks in all of its paragraphs as the joint act of the testators and where it treats the property of the testators as one, with joint gifts being made to the devisees

If we assume the will is mutual nevertheless, being ambulatory, either party had the right to revoke it.

Appellant in her brief relies principally on those cases that hold in a mutual will context that if one of the makers dies the other party is prohibited from revoking the contractual obligations of the will. In We-idner v. Crowther, supra, the court stated:

“. . .It would be manifestly unjust to permit the surviving party to the contract to disavow it and its obligations, as those obligations are incorporated in their will, after the other party has fully performed by abiding by it until his ability to revise it has been terminated by death.”

The facts in the instant case are different. Appellant on the death of her husband had notice that he had changed his will. No property had passed from her to him and he had not undertaken in his will to dispose of any of her property.

Our Supreme Court in Magids v. American Title Insurance Company, Miami, Florida, 473 S.W.2d 460 (Tex.1971) stated:

“. .To begin with, the prevailing rule is that wills, as distinguished from binding contracts, are revocable. By their very nature, wills dispose of property at the time of death, and not before; until then, they are ambulatory in the sense that they may be changed or revoked as long as the living testators are sui juris; and this has been held to be true even with respect to mutual wills made pursuant to binding contracts for disposition of property in a certain manner. Tips v. Yancey, 431 S.W.2d 763 (Tex.Sup.1968); Murphy v. Slaton, 154 Tex. 35, 273 S.W.2d 588 (1954); Wyche v. Clapp, 43 Tex. 543 (1875); Bailey, Wills, 10 Texas Practice, § 470,197-200. These and other Texas authorities make a clear distinction between the wills themselves and any underlying irrevocable contracts to dispose of property at death. If the same document contains both the will and the contract, ‘it is the contractual portion of the will and not the will itself which is irrevocable.’ Kirk v. Beard, 162 Tex. 144, 345 S.W.2d 267, 272 (1961); The Joint and Mutual Will, XVI Baylor L.R. 167 (1964); Sparks, Contracts to Make Wills (N.Y. Univ.Press, 1956), 5-6, 20-21, 111-123; I Page of Wills (Third Lifetime Edition) 158-160, 228.
. Thus, it is legally possible for a husband and wife, if they so desire, to enter into a contract for disposition to their children of the remainder interest in community property owned by them at the death of the first to die. If they so contract, and the wills made pursuant thereto remain in effect at the death of one of them, the result is to place the survivor’s ½ fee ownership beyond his power to otherwise effectively dispose of the remainder interest by deed or will. Weidner v. Crowther, 157 Tex. 240, 301 S.W.2d 621 (1957); Murphy v. Slaton, supra; Chadwick v. Bristow, 146 Tex. 481, 208 S.W.2d 888 (1948); Nye v. Bradford, 144 Tex. 618, 193 S.W.2d 165 (1946). However, contracts of this nature are reviewed by the courts with caution; they can be established only by full and satisfactory proof; and no presumptions or inferences will be indulged in favor of them. Kirk v. Beard, supra, 162 Tex. 144, 345 S.W.2d at 272, Sparks, Contracts to Make Wills, supra, 24-38 .”

The principle of law involved here is similar to that involved in Meyer v. Texas National Bank of Commerce of Houston, 424 S.W.2d 417 (Tex.1968). Alpha Genevieve Meyer executed her will on January 10, 1944, leaving all of her estate to her husband with no provision for the vesting of the property if he predeceased her in death. Six months later, her husband, Joseph F. Meyer, Jr., made a similar will in favor of his wife. About eighteen years later, Joseph Meyer executed a new will making a different disposition of his estate than was provided in his original will. Shortly thereafter, he died at which time his wife for the first time knew about her husband having made a new will. She did not change her will and soon thereafter died. The representatives of her estate brought suit to enforce an alleged oral agreement between husband and wife to leave each of their estates to the survivor. The court stated that, “None of the property of Alpha Meyer passed under the will of her husband.”, and in discussing Kirk v. Beard, 162 Tex. 144, 345 S.W.2d 267 (1961), the court stated:

“In Kirk v. Beard, property passed from one of the contracting parties to the other, and it was held that it would be a fraud to permit the one who had received , property from the other party to thereafter repudiate the contract. An intervention by equity was hence deemed supportable.”

The Courts in Meyer and Weidner, supra, reasoned that it would be unfair to permit a surviving party to a contract to change the obligations after the deceased party fully performs by abiding with the contract until his death.

There was no agreement within the will itself that would prohibit either party from revoking or changing it. An oral agreement to the effect that neither party would revoke or change his or her will without notice to the other would be in contravention of the Statute of Frauds and unenforceable unless there is part performance of the contract. Meyer v. Texas National Bank of Commerce of Houston, supra. The principle laid down in Kirk v. Beard, supra, is not applicable here because in that case one of the parties had died and the survivor had received benefits under the will of the decedent. There was such part performance as to remove the agreement from the Statute of Frauds. In the instant case, the trial court found that there was no enforceable contract between the parties not to change the contractual provisions of the April 4, 1966 will without notice to the other party. The will itself had no such provisions. There was not part performance that would remove it from the operation of the Statute of Frauds. Meyer v. Texas National Bank of Commerce of Houston, supra. We hold, where there is not an enforceable contract to the contrary, and no fraud, that either party to a mutual will, has a right to execute a new will without notice to the other party when both parties are still alive and the other party is sui juris. That being the situation in this case, we affirm the judgment of the trial court.


author: McKAY, Justice.

text:
    Raymond John SMITH, Appellant, v. Margaret Scott SMITH, Appellee.
    No. 1151.
    Court of Civil Appeals of Texas, Tyler.
    July 27, 1978.
    Rehearing Denied Aug. 31, 1978.

      Charles R. Holcomb, Cox & Holcomb, Rusk, for appellant.
    Alan 0. Johnson, Pye, Dobbs & Cobb, Tyler, for appellee.
   McKAY, Justice.

This is a divorce case with the principal issue on this appeal being whether the trial court abused its discretion in dividing the community property between the parties. Appellee Margaret Scott Smith instituted suit on December 7, 1976 against her husband, appellant Raymond John Smith, seeking a divorce on grounds of insupportability, asking for custody of their three children and a division of the estate of the parties. Appellant answered and filed a cross-action seeking a divorce on grounds of insupportability, asking for custody of the children and a division of the estate of the parties. Trial was before the court without a jury. The trial court entered judgment dissolving the marriage, appointing appellee managing conservator of the daughter, appointing appellant managing conservator of the two sons, and dividing the estate of the parties. Appellant Raymond John Smith, being dissatisfied with the property division, duly perfected this appeal.

We affirm the judgment of the trial court.

The trial court did not file any findings of fact or conclusions of law. On the basis of the evidence adduced at trial, the trial court awarded appellant all personal property in his possession, including a 1976 Pontiac automobile and typewriter, and certain items in appellee’s possession, consisting of hand tools, a set of World Book Encyclopedia, golf clubs, golf cart, two oil paintings, and one-half of the family pictures. Appel-lee was awarded all personal property in her possession (except that awarded to appellant), which included a 1973 Ford station wagon and 1970 Chevrolet automobile. Ap-pellee was also awarded 193.519 acres of land located in Cherokee County. The court decreed that appellant would be responsible for any debts incurred as a result of acquiring the property awarded to him and all debts secured by any property awarded to him. Likewise, the court decreed that appellee would be responsible for any debts incurred as a result of acquiring, and secured by, any property awarded to her.

The parties were married on November 7, 1958. Three children were born to this marriage. At the time of trial the oldest was seventeen; the youngest was twelve. During the marriage appellee had worked as a PBX operator and assistant personnel manager. However at the time of trial she worked at an eating establishment in Rusk, Texas, for forty dollars a week. At the time of trial, appellant worked as a regional manager for an insurance company. While working for that same company, appellant estimated his salary to have been twenty-five thousand dollars in 1974, twenty-three or twenty-four thousand dollars in 1975, and twenty-eight or twenty-nine thousand dollars in 1976.

The evidence adduced at trial reveals that community funds of fifteen thousand dollars had been expended to purchase the tract of land in Cherokee County and that the remaining indebtedness against the land at the time of trial was either sixty-three thousand or sixty-five thousand dollars.

Appellant contends in his sole point of error that the trial court abused its discretion by awarding appellee a disproportionately large portion of the community estate.

Sec. 3.63, Tex.Family Code Ann., requires the court, upon granting a divorce, to order a division of the estate of the parties in a manner that the court deems just and right. In ordering such division, the court may consider a variety of factors including health, capacities and abilities of the parties, disparity in earning powers and business experience, and the nature and potential of the property itself. Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21 (1923); Smoak v. Smoak, 525 S.W .2d 888 (Tex.Civ.App.—Texarkana 1975, writ dism’d); Becknell v. D’Angelo, 506 S.W.2d 688 (Tex.Civ.App.—Fort Worth 1974, writ dism’d). The division need not be equal. Bell v. Bell, 513 S.W.2d 20, 22 (Tex.1974); Roberts v. Roberts, 535 S.W.2d 373 (Tex.Civ.App.—Tyler 1976, no writ). Neither spouse is entitled, as a matter of right, to their interest in the community property. Roye v. Roye, 531 S.W.2d 242, 244 (Tex.Civ.App.—Tyler 1976, no writ); Mahrer v. Mahrer, 510 S.W.2d 402, 404 (Tex.Civ.App.—Dallas 1974, no writ).

Upon appeal, there is a presumption that the trial court correctly exercised its discretion. Roberts v. Roberts, supra; Law v. Law, 517 S.W.2d 379,384 (Tex.Civ.App.— Austin 1974, writ dism’d); Roye v. Roye, supra; Cooper v. Cooper, 513 S.W.2d 229 (Tex.Civ.App.—Houston [1st] 1974, no writ). The role of the Court of Civil Appeals in reviewing property divisions in a divorce action is to determine only if there is an abuse of discretion. McKnight v. McKnight, 543 S.W.2d 863 (Tex.1976); Hooper v. Hooper, 403 S.W.2d 215 (Tex.Civ.App.—Amarillo 1966, writ dism’d w.o.j.); Wilson v. Wilson, 225 S.W.2d 236 (Tex.Civ.App.—Fort Worth 1949, no writ).

As we view the record, the trial court’s division of community property could be based solely upon the difference in earning capacities of the parties as reflected in the statement of facts. In our opinion, appellant has failed to discharge his burden showing that the court’s order dividing the property was manifestly unjust or unfair or that there is a flagrant abuse of discretion to such an extent that the order should be set aside. Bokhoven v. Bokhoven, 559 S.W.2d 142, 145 (Tex.Civ.App.—Tyler 1977, no writ); Williams v. Williams, 537 S.W.2d 107, 111 (Tex.Civ.App.—Tyler 1976, no writ). Appellant’s point of error is overruled.

The judgment of the trial court is affirmed.