text:
    The AETNA CASUALTY AND SURETY COMPANY, Appellant, v. Ben O. SHREVE, Appellee.
    No. 16796.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    April 14, 1977.

      Fulbright & Jaworski, Charles W. Hurd, III, Houston, for appellant.
    Powell, Tucker & Tucker, Paul A. Tucker, Houston, for appellee.
   COLEMAN, Chief Justice.

This is an appeal from the judgment entered in a workmen’s compensation case awarding Ben 0. Shreve compensation for partial permanent incapacity and medical expenses. We affirm.

The Aetna Casualty and Surety Company will be referred to herein as defendant, and Ben 0. Shreve will be referred to as plaintiff. The jury found that plaintiff sustained an accidental injury in the course of his employment and also found that he incurred an occupational disease in the course of his employment. With respect to the occupational disease finding the jury also found that 75% of the incapacity “found in answer to issue No. 2” was contributed by his employment. Special Issue No. 2 inquired as to whether the plaintiff incurred an occupational disease. In answer to Special Issues 3 and 8 the jury found that the accidental injury or occupational disease resulted in partial permanent incapacity beginning on October 11, 1974. The defendant contends that the answers made by the jury to the issue on accidental injury and the issue on occupational disease are in irreconcilable conflict because the findings on occupational disease would require a judgment for a lesser amount then would the findings on accidental injury.

It appears that the trial court rendered judgment for a t^tal of three hundred weeks compensation at $70.00 per week based on the findings to the accidental injury issues. It disregarded as immaterial the findings of occupational disease which would have authorized a judgment for only three-fourths of the amount awarded because the jury found that only three-fourths of the incapacity suffered by the plaintiff was contributed by his employment.

There is no attack on the sufficiency of the evidence to support the answers made by the jury to the injury issue or to the occupational disease issue.

Section 22, Art. 8306, V.A.C.S., provides that where an occupational disease is not the sole cause of incapacity, the number of weeks of compensation shall be reduced to such proportion as the occupational disease bears to all other causative factors. No such reduction is made if the incapacity is a result of an accidental injury.

There was no objection to the definition of the term “occupational disease” which was given to the jury. This definition included the statement:

. .An occupational disease shall also include damage or harm to the physical structure of the body occurring as the result of repetitious physical traumatic activities extending over a period of time and arising in the course of employment; provided, that the date of the cumulative injury shall be the date disability was caused thereby.”

No definition of the term “accidental injury” was included in the court’s charge. A definition of injury was included and reads:

“damage or harm to the physical structure of the body and such disease or infection as naturally result therefrom, or the incitement, acceleration, or aggravation of any disease, infirmity, or condition, previously or subsequently existing, by reason of such damage or harm.”

There is a distinction between an accidental injury and an occupational disease. An industrial accident can always be traced to a definite time, place and cause, whereas an industrial disease is a slow and gradual development, and the time, place and cause thereof are not susceptible of definite ascertainment. Solomon v. Massa chusetts Bonding and Insurance Co., 347 S.W.2d 17 (Tex.Civ.App. — San Antonio 1961, writ ref’d); Hartford Accident and Indemnity Co. v. McFarland, 433 S.W.2d 534 (Tex.Civ.App. — Tyler 1968, writ ref’d n. r. e.). To establish “accidental injury” there must be proof of an undesigned, untoward event traceable to a definite time, place, and cause. Olson v. Hartford Accident and Indemnity Company, 477 S.W.2d 859 (Tex.1972).

There is evidence that on October 11, 1974 while the plaintiff was in the course of his employment he was drenched with a diluted acid solution. The day before this incident he was able to and did work seventeen hours and he had already worked eight hours prior to the incident on October 11. Within a few days after the incident he was unable to walk short distances without getting out of breath. Deep breathing caused him to suffer pain in his lungs. There was medical testimony that he had suffered some inhalation damage to his lungs which resulted in chronic obstructive lung disease.

Apparent conflicts in jury findings should be reconciled if it can reasonably be done in light of the pleadings and the evidence, the manner in which the issues were submitted, and in view of the other findings when considered as a whole. Perkins v. Mitchell, 153 Tex. 368, 268 S.W.2d 907 (1954).

The jury might have determined that during the six months prior to October 11, 1974, the plaintiff suffered damage or harm to his lungs occurring as the result of repetitious physical traumatic activities, and that the accidental injury to his lungs which he received on October 11, aggravated or accelerated the condition resulting in permanent partial disability. The fact that Shreve may have suffered from an occupational disease prior to October 11 does not prevent him from recovering for an accidental injury which aggravated the condition if the pre-existing condition was not disabling prior to the accident. Texas Employers Insurance Association v. Bradford, 381 S.W.2d 234 (Tex.Civ.App. — Beaumont 1964, writ ref’d n. r. e.).

Art. 8306 V.A.C.S. contains this provision: “where the employee sustains concurrent injuries resulting in concurrent incapacities, he shall receive compensation only for the injury which produces the longest period of incapacity; . . .”
Section 20 of Art. 8306, supra, provides: “wherever the terms ‘injury’ or ‘personal injury’ are used in the workman’s compensation laws of this state, such terms shall be construed to mean damage or harm to the physical structure of the body and such diseases or infection as naturally result therefrom. The terms ‘injury’ or ‘personal injury’ shall also be construed to mean and include ‘occupational diseases’, as hereinafter defined.

Where the findings of the jury will support a judgment for the claimant to workmen’s compensation based on general injury and occupational disease he is entitled to receive compensation only for the injury which produces the longest period of incapacity. In this case that is the general injury. McCartney v. Aetna Casualty & Surety Company, 362 S.W.2d 838 (Tex.1962); Texas General Indemnity Company v. Scott, 152 Tex. 1, 253 S.W.2d 651 (1952).

In Special Issue No. 1 the court asked the jury to determine whether or not the plaintiff sustained an “accidental injury”. The charge contained the definition of the term “injury”, but there was no definition of the term “accident” or the term “accidental injury”. The defendant objected to the definition of the term “injury” because “it does not restrict an accidental injury to an event traceable to a definite time, place and cause.” The defendant failed to submit a definition of the term “accidental injury” or an explanatory instruction incorporating the desired language. The failure to define the term is not reversible error. Rule 279, Tex.R.Civ.P.

On the day of the trial, the defendant filed a motion in limine seeking to prevent the plaintiff from reading that portion of the petition which referred to the contract for attorney’s fees. The motion stated:

“Defendant here now admits and agrees that manifest hardship and injustice will result to the plaintiff if the compensation is not paid to plaintiff in a lump sum in the event that the jury should find him disabled, or partially and permanently disabled, and admits and agrees that any compensation awarded plaintiff for total and permanent disability or partial and permanent disability will be paid to him in a lump sum, first allowing the statutory discount for present payment.”

While the plaintiff was reading his petition an objection was made to the reading of “Paragraph XVI” on the ground that it was irrelevant and immaterial. The court overruled the objection. The plaintiff then read that part of his pleading referring to the attorney’s fees. The plaintiff had alleged that manifest hardship would result unless compensation was paid in a lump sum and further had alleged that he was entitled to accelerated payments as provided in section 15a of Art. 8306, supra.

The admission made by the defendant in his pleading would be construed to be effective only if the jury should find the plaintiff either totally or permanently disabled, or partially and permanently disabled. The defendant did not unequivocally agree or concede that the evidence would sustain the award of a lump sum recovery where the disability was not permanent. The parties did not agree on the necessity for accelerated payments. Where the issue of a lump sum award must be submitted to the jury for a decision, the element of attorney’s fees is properly to be considered by it on that issue. Texas Employers Ins. Ass’n v. Hatton, 152 Tex. 199, 255 S.W.2d 848 (1953). The court did not err in permitting the plaintiff to read the pleadings regarding attorney’s fees.

The defendant complains of misconduct on the part of plaintiff’s attorney in mentioning the statutory 4% discount in jury argument. The record reflects that when the objection was made the trial court made a comment, but did. not rule on the objection. The plaintiff’s attorney proceeded with his argument without further discussion of the discount. Since there was no ruling on the objection and no request for an instruction for the jury to disregard the objectionable matter, no reversible error is presented. Maston v. Texas Employers’ Insurance Ass’n, 160 Tex. 439, 331 S.W.2d 907 (1960).

Dr. Behr, a physician who was treating the plaintiff, testified that smoking was harmful and makes a person more susceptible to lung injury. He stated that he told the plaintiff to quit smoking. The plaintiff testified that the doctor said “in the shape your lungs are in, yes, it would be very wise for you to quit smoking.” There is no evidence that the plaintiff was told his recovery would be retarded or imperiled if he continued smoking.

The defendant complains of the trial court’s refusal to submit issues on (1) whether Dr. Behr advised appellee to quit smoking on or about November 13, 1974; (2) whether appellee persisted in smoking; (3) whether such conduct was the sole cause of his incapacity after November 13, 1974; (4) whether such conduct contributed to his incapacity; and (5) what percentage did his conduct contribute to his incapacity since November 13, 1974. Defendant contends that these issues embodied the defensive theories set forth in Art. 8307 § 4, V.A.C.S. reading

“If any employee shall persist in insanitary or injurious practices which tend to either imperil or retard his recovery . the Board may in its discretion order or direct the association to reduce or suspend the compensation of any such injured employee.”

Before an insurer is entitled to the submission of special issues under Art. 8307 § 4, it must allege and prove a request to and a refusal by the claimant to refrain from the practice which it contends to be injurious. Millers Mutual Fire Ins. Co. of Texas v. Gilbert, 462 S.W.2d 112 (Tex.Civ.App.—Beaumont 1970, writ ref’d n. r. e.); Texas Employers’ Insurance Ass’n v. Gallo way, 40 S.W.2d 973 (Tex.Civ.App. — Austin 1931, no writ). In addition the insurer must allege and prove not only that the claimant was advised to refrain from the injurious practices, but also that his recovery would be hampered, imperiled or retarded if he failed to do so. Utica Mutual Insurance Company v. Ritchie, 500 S.W.2d 879 (Tex.Civ.App. — Houston [1st] 1973, no writ); Argonaut Underwriters Insurance Co. v. ByerIy, 329 S.W.2d 937 (Tex.Civ.App. — Beaumont 1959, writ ref’d n. r. e.).

The points of error raised by the defendant in its brief not specifically mentioned have been examined and are considered to have been answered in the discussion of other points. No reversible error is shown.

Affirmed.


source: Caselaw Access Project

author: STEPHENSON, Justice.

license: Public Domain

text:
    Maude M. WUNSCHE, Appellant, v. The EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES et al., Appellees.
    No. 7934.
    Court of Civil Appeals of Texas.
    April 14, 1977.
    Richard G. Rorschach, Houston, for appellant.
    Ronald L. Blackstock, George M. Kuhn, Jr., Houston, for appellees.
   STEPHENSON, Justice.

The Equitable Life Assurance Society of the United States filed this interpleader to have the court determine who was entitled to the proceeds of the insurance policy on the life of William M. Brasher. The claimants in the trial court were the mother, Maude M. Wunsche, and Marie Brasher, the divorced wife of the deceased, who made a claim on behalf of their daughter, Kimberly Brasher, a minor. Trial was before the court, and judgment was rendered for Kimberly Brasher.

The undisputed evidence shows the following: William Brasher and Marie Brasher were married May 21, 1966, and Kimberly Brasher was born May 26, 1969. Marie filed a divorce suit August 21, 1970. During all times material to this cause of action, William was employed by Armco Steel Corporation and participated in its group insurance plan. Such plan included medical, dental, hospitalization, and life insurance on William and his dependents. William had Marie named as his beneficiary when they were married, but named his mother, Maude Wunsche, as his beneficiary August 21, 1970, which was the day Marie filed the divorce suit. Kimberly was named as a dependent when she was born and until William’s death. September 18, 1970, a property settlement, child custody and support agreement was entered into by William Brasher and Marie Brasher. The insurance policy was not listed as an asset because it was term insurance and had no cash value. Paragraph V of that agreement reads as follows:

“Defendant, WILLIAM M. BRASHER, is to provide and maintain the hospital, medical, dental and life insurance presently in existence for the benefit of the minor child, KIMBERLY MARIE BRASHER.”

The divorce was granted December 10, 1970, and the property settlement was approved by the court. Marie was awarded custody of Kimberly, and William was ordered to pay $75.00 per month as child support. These payments were made until William died February 24, 1972. Maude Wunsche was still listed as the beneficiary under the $17,000 life insurance policy made the basis of this suit. This policy was the only one in effect at the time of the agreement, September 18, 1970.

The trial court made findings of fact and conclusions of law. These conclusions were, in effect, as follows:

(1). Kimberly was a third party beneficiary under settlement agreement.

(2). Promissory estoppel estops the change of beneficiaries.

(3). The change of beneficiaries under the circumstances amounted to constructive fraud and created a constructive trust for the beneficiary.

(4). A constructive trust is created for Kimberly in order to prevent unjust enrichment.

The first two points of error, and the primary basis for this appeal, are that there is no evidence to support the trial court’s finding that the insurance here sued upon is the one intended by the parties to be covered by the provision in the settlement agreement to-wit:

“. . . life insurance presently in existence for the benefit of the minor child, KIMBERLY MARIE BRASHER.”

and that such finding is contrary to the great weight and preponderance of the evidence. In passing upon the no-evidence point, we consider only the favorable evidence to such finding, and in passing upon the second point we consider the entire record.

There are no pleadings by any party that the provisions in the settlement agreement in question are ambiguous. Further, there is no suggestion in any of the briefs in this court that such provision is ambiguous, and on oral argument it was so agreed.

It is elementary that if there is no ambiguity, the construction of the written instrument is a question of law for the court. City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968). In that case it is also written:

“It is the general rule of the law of contracts that where an unambiguous writing has been entered into between the parties, the Courts will give effect to the intention of the parties as expressed or as is apparent in the writing. In the usual case, the instrument alone will be deemed to express the intention of the parties for it is objective, not subjective, intent that controls. Woods v. Sims, 154 Tex. 59, 273 S.W.2d 617, 620 (1954). See generally: 3 Williston on Contracts § 610 (1936); Restatement of the Law of Contracts § 230 (1932).”

There is no contention that the insurance policy, together with the designation of beneficiary, is in any way ambiguous. The construction of the provision in the settlement agreement is important to determine whether or not Kimberly was a third party beneficiary under an agreement between her mother and father to provide life insurance on her father’s life for Kimberly’s benefit.

The only life insurance in existence at the time the settlement agreement was executed, which could be for the benefit of the minor child, w?s the group policy sued upon in this case. Even though it is argued that there was a provision in the group policy covering the insured’s dependents, which included Kimberly, there is no substance to such an argument because the insured was the beneficiary in the provision for a small amount of insurance on Kimberly’s life, and there is no way that particular life insurance could be considered for her benefit.

The general rule in determining whether a person is a third party beneficiary, is clearly set forth in Republic Nat. Bank v. National Bankers Life Ins. Co., 427 S.W.2d 76, 79 (Tex.Civ.App. — Dallas 1968, writ ref’d n. r. e.), as follows:

“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 settlement agreement before us is a classic example of a contract made for a third party beneficiary, and it is clearly shown that it was the intention of the parties to provide for Kimberly. The record before us shows the amount of the support was set at $75.00 per month, and this court must take the judicial knowledge of the fact that such amount is unusually low. The further agreement to provide hospital, medical, dental, and life insurance for the child’s benefit makes the amount of child support more reasonable.

We construe the settlement agreement to mean that William Brasher would name Kimberly as his beneficiary in the life insurance policy and that he would not change the beneficiary as long as he was making child support payments. We reach that conclusion even though under the terms of the insurance policy itself, he had the right to change the beneficiary.

The case we have found most nearly like the one before us is Box v. Southern Farm Bureau Life Ins. Co., 526 S.W.2d 787 (Tex. Civ.App. — 1975, writ ref’d n. r. e.). In that case the husband and father (in the same position as William Brasher) entered into a property settlement agreement with his wife in which he agreed to keep certain life insurance policies in effect with their children as the beneficiaries. The divorced husband remarried later and named his new wife as the beneficiary. After his death, the insurance company filed an interpleader, and the surviving wife, who was the named beneficiary, and his children claimed the proceeds. The trial court awarded the funds to the children which action was affirmed by the Court of Civil Appeals. That court held the property settlement agreement gave the children a vested equitable interest in the proceeds of the insurance policy upon their father’s life. That case cites Locomotive Engineers' Mut. Life & Accident Ins. Ass’n v. Waterhouse, 257 S.W. 304 (Tex.Civ.App. — El Paso 1923, writ ref’d), and Leal v. Leal, 401 S.W.2d 293 (Tex.Civ.App. — San Antonio 1966, no writ), in support of its holding. Also, see out of state cases collated in Box, supra at 789. These points of error are overruled.

We have carefully considered the remaining points of error, and finding no merit to them they are overruled.

AFFIRMED.


author: KEITH, Justice.

text:
    Neill B. LONGLEY, Appellant, v. Matthew W. PLUMMER, Sr., Appellee.
    No. 7942.
    Court of Civil Appeals of Texas.
    April 14, 1977.
    Rehearing Denied April 28, 1977.
    Michol O’Connor, Houston, for appellant. Matthew W. Plummer, Houston, for ap-pellee.
   KEITH, Justice.

Appellant’s able counsel, true to the traditions of a loyal advocate, takes us to task in the motion for rehearing. The first challenge to our opinion is expressed in this manner:

“On page three of the Court’s opinion it states ‘The appeal is taken from the third judgment . . . .’ This is not correct. The appeal was from the second judgment . . . .”

Since appellant’s position has now been stated and restated in such manner that it cannot be misconstrued, we withdraw our former opinion filed on March 24,1977, and now enter judgment dismissing the appeal for want of jurisdiction.

Appellee, a lawyer, injured his arm upon a Sunday morning. He met his physician at a hospital where x-rays were taken and his physician advised that there were no broken bones, whereupon appellee left the hospital with his arm in a sling. Appellant, a physician specializing in radiology, is a member of the staff of the hospital and it was shown by our record that under accreditation standards, he was required to read and interpret all x-rays taken in the hospital.

On the Monday following appellee’s appearance at the hospital, appellant “read” the x-ray of appellee’s arm and found no broken bones. Then, as was his custom, he sent appellee a bill for six dollars. Several additional bills were sent to appellee before he instituted suit in the justice of the peace court in the nature of a declaratory judgment proceeding to determine that he did not owe appellant the $6.

Appellant appeared by counsel and filed a cross-action upon a sworn account seeking a recovery of the $6 indebtedness and reasonable attorney’s fees in the amount of $194. When appellee did not deny the justness of the account under oath under Tex.R.Civ.P. 185, the justice of the peace rendered judgment favoring the physician for the amount of his debt and the attorney’s fees sought— precisely $200, the maximum jurisdiction of the court. Tex.Rev.Civ.Stat.Ann. art. 2385 (1971). Appellee duly appealed the judgment to the County Court at Law of Harris County.

Thereupon, appellant filed an amended petition wherein he still sought to recover his debt of $6, but increased his demand for attorney’s fees to $2,000, thereby seeking a total recovery of $2,006. The jury awarded appellant exactly the amounts he sought and on June 25,1976, the trial court entered judgment for that sum against the appellee, [hereinafter “first judgment”]

Thereafter, on July 9, 1976, apparently upon the Court’s own motion, this judgment was “set aside and held for naught” because, as recited in the order: (1) the amended cross-action filed by appellant prayed for an amount in excess of the amount sued for in the justice court and “therefore this Court did not acquire jurisdiction”; and (2) the cause, as filed in the justice court by appellee, was brought under the Declaratory Judgments Act “which applies to Courts of record only.” No disposition was made of the case, [hereinafter second “judgment”]

Still another judgment was entered on August 6, 1976, again apparently upon the Court’s own motion, which made the same recitals as found in the second judgment, but which ordered the first judgment set aside and held for naught and “that Plaintiff’s cause of action and Cross Plaintiff’s Cross Claim as amended are hereby dismissed for lack of jurisdiction.” [hereinafter “third judgment”]

As stated in the motion for rehearing, the appeal is from the second “judgment”, the decretal portion of which reads:

“It is therefore, ORDERED, ADJUDGED and DECREED that the judgment of June 25, 1976 [awarding Dr. Longley $2006 in accordance with the verdict] be set aside and held for naught.”

Under the provisions of Tex.R.Civ.P. 329b, Subdiv. 5, the trial court retained jurisdiction of the cause for thirty days; and, during that time it could set aside its judgment on its own motion or that of either party. Until such judgment became final under the cited rule, the court had plenary power to set aside its judgment. Sawyer v. Donley County Hospital District, 513 S.W.2d 106, 109 (Tex.Civ.App. — Amarillo 1974, no writ), and authorities therein cited. See also, Dubert v. Adkins, 475 S.W.2d 383, 385 (Tex.Civ.App. — Corpus Christi 1971, no writ).

The trial court, exercising this plenary power, vacated its first judgment and declared that it was of no force and effect. Its action in the premises was within its power. However, this second “judgment” from which appellant has attempted to appeal made no disposition of the cause or of the parties.

In Wagner v. Warnasch, 156 Tex. 334, 295 S.W.2d 890, 892 (1956), Chief Justice Hickman, speaking for the court, used these words to define the elusive term:

“To be final a judgment must determine the rights of the parties and dispose of all the issues involved so that no future action by the court will be necessary in order to settle and determine the entire controversy.”

See also, 4 McDonald, Texas Civil Practice, § 17.03.2 — (I), p. 38 (1971 Rev.VoL), and cases therein cited.

Speaking to the subject of finality of judgments, our Supreme Court said in North East Independent School District v. Aldridge, 400 S.W.2d 893, 895 (Tex.1966):

“We have steadfastly adhered through the years to the rule, with certain exceptions not applicable here, that an appeal may be prosecuted only from a final judgment and that to be final a judgment must dispose of all issues and parties in a case.”

The Court was considering a judgment of a court of civil appeals in Merchandise Mart, Inc. v. Marcus, 515 S.W.2d 663, 664 (Tex.1974), when it held:

“Since the judgment does not dispose of all necessary issues, it is an interlocutory judgment and the cause is still pending before the court of civil appeals.”

The Supreme Court in Marcus, supra, cited 33 Tex.Jur.2d, Judgments, Secs. 4, 85 (1962). The applicable language in Section 4 is this:

“Any judgment or decree that leaves for the court some further action in disposing of the parties and their rights is interlocutory, and a judgment or decree may be interlocutory because it only partially or incompletely disposes of the parties or issues, . . . ”

Section 85 of the text cited refers to many cases standing for this statement in the text:

“A final judgment is one that determines the rights of all the parties to the suit, and disposes of all the issues involved on their merits.”

Since the second “judgment” from which appellant insists this appeal is taken did not dispose of the entire cause, it is interlocutory and not appealable. Stalco, Inc. v. Zero Refrigerated Lines, Inc., 390 S.W.2d 476, 477 (Tex.Civ.App. — San Antonio 1965, writ ref’d).

Although no party to this appeal has challenged our jurisdiction, it is our duty to do so sua sponte under the circumstances presented by this record. Able v. Bloomfield, 6 Tex. 263, 264 (1851). In City of Beaumont v. West, 484 S.W.2d 789, 791 (Tex.Civ.App. — Beaumont 1972, writ ref’d n. r. e.), we had occasion to discuss the jurisdictional concept in another context, saying:

“Jurisdiction of a court is conferred only by the constitution and the statutes and a court without jurisdiction cannot render a valid judgment. Nevitt v. Wilson, 116 Tex. 29, 285 S.W. 1079, 1084, 48 A.L.R. 355 (1926); Daniel v. Dallas Independent School District, 351 S.W.2d 356, 359 (Tex.Civ.App., El Paso, 1961, error ref. n. r. e.). If at any time during its progress it becomes apparent that the court has no authority under the law to adjudicate the issues presented, it becomes the duty of the court to dismiss it. Snyder v. Wiley & Porter, 59 Tex. 448, 449 (1883); Galley v. Hedrick, 127 S.W.2d 978, 981 (Tex.Civ.App., Amarillo, 1939, no writ).”

It is clear, therefore, that appellant has not perfected an appeal from a final judgment1 and, it is equally clear that we have no jurisdiction to consider the appeal from the second “judgment”. As was stated in McCauley v. Consolidated Underwriters, 157 Tex. 475, 304 S.W.2d 265, 266 (1957):

“We cannot blindly affirm an erroneous judgment . . . or a decree entered by a trial or. intermediate appellate court which had no jurisdiction of the subject matter, merely because the litigants have not seen fit to assign the error.”

All appellate courts are reluctant to deny a litigant his day in court; but, under the applicable rules and the long line of cases herein discussed, we have no alternative but to dismiss the cause. Since we are without authority to consider the appeal upon the merits, we neither reach nor decide the questions raised in appellant’s original brief or in the motion for rehearing filed in this cause. Our only authority is to dismiss the appeal for want of jurisdiction. Allen v. United Supermarkets, Inc., 467 S.W.2d 616, 621 (Tex.Civ.App. — Amarillo 1971, no writ).

Accordingly, the appeal is dismissed.

      . As will be noted later, this has reference to an order dated July 9, 1976, which set aside an earlier judgment. Although the instrument dated July 9 is not a judgment, we will, in deference to the nomenclature used by appellant, speak of it as the second “judgment”.

      . Dubert v. Adkins, supra, is cited in the law review article by Reavley and Orr, “Trial Court’s Power to Amend Its Judgments”, 25 Baylor L. Rev. 191, 205, fn. 88 (1973), along with several other cases supporting the proposition that during this 30-day period the trial court possesses “plenary power to open, modify, or vacate its judgment to correct any error that may have been made.”


author: SPURLOCK, Justice.

text:
    Macile MILLER, Individually and as executrix of the Estate of O. W. Miller, Appellant, v. FIRST STATE BANK, Bedford, Texas, Appellee.
    No. 17773.
    Court of Civil Appeals of Texas, Fort Worth.
    April 15, 1977.
    Rehearing Denied May 26, 1977.

      Staples & Foster, Ross T. Foster, Hurst, for appellant.
    Hooper, Kerry, Chappell & Broiles, R. David Broiles, Fort Worth, for appellee.
   OPINION

SPURLOCK, Justice.

First State Bank’s motion for rehearing is granted; we withdraw our original opinion and substitute this one in its place.

This is a usury case. O. W. Miller and Macile Miller, a husband and wife, acting through their broker, made a contract with the Bank. The contract provided the Millers sign a note for $70,000.00 due three years from date, with interest at the rate of 10% per annum. Pursuant to the contract, the Bank deposited $70,000.00 in the borrowers’ non-interest bearing joint checking account- but also in accordance with the agreement, the borrowers had the use of only $56,000.00. The other $14,000.00 was frozen, to guarantee payment of interest during the first two years. The borrowers paid $70,000.00 and then brought suit to recover double the usurious interest charged and contracted for and other relief. The Bank filed a counterclaim for $14,-000.00 interest. After a non-jury trial, the court rendered judgment for the Bank. The borrowers have appealed.

Affirmed in part, reversed and rendered in part.

The facts of the case are undisputed. In the latter part of 1971, O. W. and Macile Miller were selling a tract of land they owned in Tarrant County and buying one in Johnson County. Andy Winters, a broker acting as their agent, was arranging the financing for the Millers. The Millers’ property was sold for $228,800.00 to Alan I. Jones, Trustee. As part of the consideration, the purchaser executed a note for $219,800.00 payable to the Millers. Interest for the first two years was paid in advance. Blease Tibbets, president and a member of the board of directors of the First State Bank of Bedford, (the name of the Bank has been changed), the appellee Bank, was made trustee in the deed of trust executed to secure payment of the note.

As part of the transaction the Bank, acting through Tibbets, agreed through their agent, Winters, to lend the Millers $70,-000.00 so they could purchase the tract in Johnson County and pay the balance due on the land being sold. The Bank refused to make the loan unless interest at 10% was paid annually or some similar arrangement was agreed to. In order to meet the Bank’s requirements the $219,800.00 note and lien securing it were assigned to the Bank. In addition, Ryan Mortgage Company, on January 4, 1972, gave the Bank a “take-out” letter, by which Ryan Mortgage agreed to pay the Bank any unpaid balance owed by the Millers on this note, not to exceed $70,-000.00. This commitment was valid for a period of three years from date, but Ryan Mortgage would not be called upon to fund prior to January 5, 1975.

As a further part of the transaction the Millers, acting through their agent, agreed to give the Bank two post-dated checks in the amount of $7,000.00 each, dated January 4,1973, and January 4,1974, respectively-

In accordance with this oral agreement the Millers signed a note for $70,000.00 dated January 6,1972, assigned the $219,800.00 note and lien to the Bank, delivered the take-out letter and the two post-dated checks drawn on their joint account with appellee Bank, dated January 4, 1973, and January 4, 1974, respectively, to the Bank. The deposit of $70,000.00 was made on January 7, 1972, to the Millers’ joint checking account in the Bank. The Johnson County sale was closed on that same date. The Bank then prepared a letter dated January 14,1972, reducing to writing the agreement already entered into which follows:

“January 14, 1972
“First State Bank
P. O. Box 699
Euless, Texas
“Gentlemen:
“I hand you herewith two checks signed by me on my account # 160-202-8. Each check is in the amount of $7,000.00, one is dated January 4, 1973 and one January 4, 1974. These checks represent interest which will be due your bank on the above date on my note with your bank in the amount of $70,000.00 dated January 6,1972.
“This will be your authority to hold amounts sufficient to cover these checks and put a freeze on my account # 160-202-8 to accomplish same.
“Sincerely,
“Otis W. Miller”

The first interest check dated January 4, 1973, was paid out of this “frozen” account. On March 3, 1973, before the next check was payable, O. W. Miller died. Application to probate his will was filed on March 13, 1973. His widow, Macile Miller, qualified as independent executrix of his estate on March 27, 1973. She then brought this suit individually and in her representative capacity against the Bank alleging usury, among other things.

In the interest of brevity, we refer to Mrs. Miller and the estate of O. W. Miller collectively as plaintiffs or counter defendants, except where the two parties’ interests require separate treatment.

On or about February 17,1975, plaintiffs, the Bank, and Ryan Mortgage entered into a written agreement in which Ryan Mortgage honored its “take-out” agreement and lent $70,000.00 to Macile Miller in both capacities, which she was to pay to the Bank. In addition, she agreed to pay $7,000.00 into the registry of the court in this cause of action she had filed against the Bank for usury (the case now before us), all without prejudice to the rights of the parties in this cause of action. She complied with all terms of the agreement. The $7,000.00 remains in the registry of the trial court, and the other $7,000.00 remains in the “frozen” account of the Millers at the Bank.

The Bank comingled the $14,000.00 in the frozen account with its own funds and has loaned all or portions of it to other customers at interest as if it were its own funds.

On appeal, plaintiffs assert the loan transaction was usurious because the contract and agreement between the parties had the effect of giving the Millers the “use of” only $56,000.00 while the Millers were required to pay the Bank $77,000.00 at the end of three years for this privilege.

In the trial court, the Bank, by way of defense, denied that the transaction was usurious because (1) the Millers had the use of the $70,000.00 because the Bank had deposited this amount in the Millers’ account, (2) the checks were post-dated for interest to be paid only on the anniversary date, (3) the account was a “special account,” title to the $14,000.00 remaining in the borrowers, (4) the Millers are es-topped to claim usury because the final plan to freeze the account was proposed by Mr. and Mrs. Miller’s broker and attorneys, and (5) after the freeze agreement was made, the Bank never refused to allow the Millers to withdraw the money. The Bank contends it is not liable for the further reason that even if the loan is usurious, Texas Usury Law provides for a penalty only for the payment of double the interest received and not for double the amount charged or contracted for. The Bank contends it has received only $7,000.00 interest payment.

The Bank filed a counterclaim against the plaintiffs for $14,000.00 interest, alleging the $7,000.00 check dated January 4, 1974, was not cashed because Miller died more than ten days before January 4, 1974, and, therefore, the check is not good under Tex.Bus & Comm. Code Ann. § 4.405 (1968). Plaintiffs answered under oath that they do not owe this sum of $14,000.00 because it represents a charge for interest that is usurious.

It is not necessary for the disposition of this case for this court to construe and reconcile the provisions of Tex.Rev.Civ.Stat. Ann., Banks and Banking, art. 342-705, Adverse Claims to Deposits and art. 342-706 (1973) Joint Deposits; with Tex.Bus. & Comm. Code Ann. § 4.405 (1968) Death . of Customer.

The court, sitting without a jury, rendered judgment that plaintiffs recover nothing; that the Bank recover from them the amount of $14,000.00, together with accrued interest; that the clerk of the district court pay to the Bank $7,000.00; and that the Bank recover the $7,000.00 remaining in the frozen account.

The statutes involved are Tex.Rev.Civ. Stat.Ann. art. 5069 §§ 1.01, 1.02, 1.04, 1.06 and 8.04 (1971), portions of which are quoted below:

1.01. “Definitions
“(a) ‘Interest’ is the compensation allowed by law for the use or forbearance or detention of money .
“(d) ‘Usury’ is interest in excess of the amount allowed by law.”
1.02. “Maximum rates of interest
“Except as otherwise fixed by law, the maximum rate of interest shall be ten percent per annum. A greater rate of interest than ten percent per annum unless otherwise authorized by law shall be deemed usurious. All contracts for usury are contrary to public policy and shall be subject to the appropriate penalties prescribed in Article 1.06 of this Subtitle.” (Emphasis ours.)
1.04. “Limit on rate
“The parties to any written contract may agree to and stipulate for any rate of interest not exceeding ten percent per annum on the amount of the contract; and all other written contracts whatsoever, except those otherwise authorized by law, which may in any way, directly or indirectly, provide for a greater rate of interest shall be subject to the appropriate penalties prescribed in this Subtitle.” (Emphasis ours.)
1.06. “Penalties
“(1) Any person who contracts for, charges or receives interest which is greater than the amount authorized by this Subtitle, shall forfeit to the obligor twice the amount of interest contracted for, charged or received, and reasonable attorney fees fixed by the court provided that there shall be no penalty for a violation which results from an accidental and bona fide error.” (Emphasis ours.)

Article 5069 — 1.01 et seq. was effective October 1, 1967. Article 5069 — 50.03 repealed the earlier provision (Tex.Laws 1963, Ch. 205, § 28 at 569) which allowed a person or his legal representative to recover double the amount of usurious interest received.

The Tex.Const. art. XVI, § 11, in the absence of legislation fixing maximum rates of interest, provides in pertinent part, “All contracts for a greater rate of interest than ten percentum per annum, shall be deemed usurious . .”

The legislature has provided rules to aid the courts in the construction of its statutes, which follow:

Tex.Rev.Civ.Stat.Ann. art. 10 (1969) General Rules.

“The following rules shall govern in the construction of all civil statutory enactments:

“6. In all interpretations, the court shall look diligently for the intention of the Legislature, keeping in view at all times the old law, the evil and the remedy-
“8. The rule of the common law that statutes in derogation thereof shall be strictly construed shall have no application to the Revised Statutes; but the said statutes shall constitute the law of this State respecting the subjects to which they relate; and the provisions thereof shall be liberally construed with a view to effect their objects and to promote justice.”

The usury statute is penal in nature. In addition to the imposition of civil penalties, it provides for criminal penalties. Tex. Rev.Civ.Stat.Ann. art. 5069 — 1.06(2) and 8.02 (1971).

Tex.Penal Code Ann. § 1.05 (1974) — Construction of Code — provides:

“(a) The rule that a penal statute is to be strictly construed does not apply to this code. The provisions of this code shall be construed according to the fair import of their terms, to promote justice and effect the objectives of the code.
“(b) Unless a different construction is required by the context, Sections 2.01, 2.02, 2.04, 2.05, and 3.01 through 3.12 of the Code Construction Act (Article 5429b —2, Vernon’s Texas Civil Statutes) apply to the construction of this code.”

The Bank correctly points out the presumption that the parties intended to observe and obey the usury laws. Hernandez v. United States Finance Company, 441 S.W.2d 859 (Tex.Civ.App. Waco 1969, writ dism’d).

The plaintiffs correctly point out that in determining whether a loan transaction is usurious, the form is disregarded and the substance is investigated. Schmid v. City Nat. Bank of Wichita Falls, 132 Tex. 115, 114 S.W.2d 854 (1938).

The supreme court has held that under Tex.Rev.Civ.Stat.Ann. art. 5069 — 1.-06(1) (1971), the statutory penalty is twice the amount of usurious interest contracted for, charged or received. The usury penalties provided for in the statute are available to the borrower either as an offset in an action on a note or as an affirmative action to recover a penalty. A usurious contract is unenforceable as to the interest contracted for, charged or received. Wall v. East Texas Teachers Credit Union, 533 S.W.2d 918 (Tex.1976).

All of the material testimony was elicited from Blease Tibbets, president and member of the board of directors of appellee Bank. His uncontradicted testimony established that the oral agreement to leave $14,000.00 in the account, which account would then be frozen, was made by Winters, acting as agent for both Mr. and Mrs. Miller, before the account was funded. The Millers had been customers of the Bank for approximately ten years at the time the negotiations occurred. The account was funded on Friday, January 7, 1972. There is no evidence to indicate the Millers knew when the freeze would be placed on the account. It was placed on the account on either January 7, 1972, or January 12, 1972, with no other authority in addition to the oral agreement of January 6,1972. The written authority came later, on January 14, 1972, when Tibbets’ secretary drafted a letter for O. W. Miller’s signature, authorizing the freeze. At that time, there were delivered to the Bank the post-dated checks along with the signed letter. The record is devoid of any evidence of consideration for these latest acts other than the loan itself, and Tibbets himself testified that without that promise, or some other arrangement that would secure payment of interest annually, he would not have agreed to the loan. Tib-bets was not clear as to whether the freeze was placed on the account on January 7, the day the account was funded, or on January 12, the day the freeze first appears in the Bank’s records. In either case, it occurred before January 14, the day it was authorized in writing.

It is clear that formalities of the transaction were not carefully observed, the agreement between the Bank and its longtime customers having already been made. The January 14, 1972, letter simply reduced to writing what had already taken place. The Bank contends that, theoretically, it was possible for the Millers to remove the $14,-000.00 from the account at any time between Friday and the following Wednesday. Such a withdrawal of funds by the Millers would have been a breach of their oral contract with the Bank. It is unlikely that a check of that size would have been paid without its having been “flagged” by some Bank official such as Tibbets, as it was on another check on that same account dated January 7, 1972, payable to a title company in the amount of $49,389.76, in connection with the Johnson County land transaction and which check bears Tibbets’ initial authorizing payment. The understanding of all parties was that the Millers would never control that fund at any time. The possibility the Millers could have avoided their oral contract with the Bank by withdrawing funds from their account between the date of the funding and the date the freeze order appeared on the Bank records, a matter of a few days, does not alter the substance of the transaction.

The Bank urges the $14,000.00 constituted a special account and was, therefore, not the same as interest paid in advance, since title remained in the Millers.

It cites a number of cases for the proposition that when a Bank is directed by a depositor to apply funds in a special way, a special account comes into existence such that title to the funds remains in the depositor, and the Bank’s only function is to apply the funds pursuant to the depositor’s instructions. Its reliance is not well placed. In most of those cases, special accounts are not in issue. In only two cases among those cited had funds been deposited for a special purpose. In one, Martin v. First State Bank, Memphis, 490 S.W.2d 208, 211 (Tex.Civ.App., Amarillo 1973, no writ), the court defined both general and special deposits as follows: “When money or its equivalent is deposited in a bank without any special agreement, the law implies that it is to be mingled with the other funds of the bank, the relation of debtor and creditor is created between the bank and the depositor, and the deposit is recognized as a general deposit. (Citations omitted) ... On the other hand a deposit made for some special application or disposition is a special deposit and when a bank knowingly accepts a deposit for a specific purpose, it cannot thereafter divert it for its own benefit or otherwise act to defeat the purpose for which the deposit was made. (Citations omitted).” The other case has been reversed, the supreme court finding no special deposit. Hill v. Citizens National Bank of Dallas, 495 S.W.2d 615 (Tex.Civ.App., Tyler 1973), rev’d 505 S.W.2d 246 (Tex.1974).

In the instant case, the only liability the Bank could possibly have incurred is to itself, since the “special purpose” was to pay itself. However, the Bank used the funds as if it already owned them. It considered them as part of its general funds and loaned them, at least in part. The difference, once again, is one of form and not of substance.

The principal amount of the loan being $70,000.00, of which the borrowers were required to leave $14,000.00 in the Bank, then reduces the amount actually loaned, and the principal upon which the Bank was authorized to charge interest, to $56,000.00. Schmid v. City Nat. Bank of Wichita Falls, supra.

The Bank next contends that prepayment of interest does not violate the usury statute. It asserts that in Texas the rule is firmly established that interest may be retained in advance at the maximum legal rate for one year. Bothwell v. Farmers’ & Merchants’ State Bank & T. Co., 120 Tex. 1, 30 S.W.2d 289 (1930); Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046 (1937); Finn v. Alexander, 165 S.W.2d 500 (Tex.Civ.App., El Paso 1941, no writ). It then argues that there is no reason to believe that retained interest two years in advance would render this three-year loan usurious.

Our analysis of the opinion in the Both-well case, supra, illustrates the fallacy of the Bank’s contention. In that ease the supreme court stated that “Most text-writers and many judicial opinions have pointed out how devoid of logic is the rule which sanctions the collection in advance of interest at the highest conventional statutory rate, on even short-term loans, under statutes against usury.”

The supreme court then traces the history of the practice of requiring interest to be paid in advance on short-term loans, citing the custom of the law merchant. That court reaches the conclusion that interest paid in advance at the legal maximum rate or less on short-term commercial paper is not usurious. It then defines short-term commercial paper as being notes for a term of one year or less; its holding follows: “In Texas the rule sanctioning the reservation of interest in advance at the highest conventional rate for a year or less is too firmly established to be departed from.”

This court overrules the Bank’s contention. We refuse to extend the time period involved beyond that announced by the supreme court in the Bothwell case, supra. To do otherwise, we would reach an absurd result because the permissible time period could be extended to thirty years or more and the lender could, without violating the usury statute, deduct all the interest that would be paid on a 30-year loan at 10% per annum interest in advance and then loan such prepaid interest to other borrowers under the same arrangement at 10% per annum interest and thus pyramid the interest earned.

The Bank next contends that if the $14,-000.00 interest payment is spread over the life of the loan, then no interest in excess of 10% was contracted for or charged.

Pierre R. Loiseaux, then Baker and Botts Professor of Law, University of Texas School of Law, Austin, Texas, is the author of a very lucid article entitled “Some Usury Problems in Commercial Lending.” 49 Texas L.Rev. 419 (1971). In that article he stated at page 426: “The lenders argued that the courts should look at the entire period of the loan in determining the question of usury. Texas courts refused to do so because the statute says ten percent per annum; if the borrower in any one year pays a rate of interest greater than the legal maximum, the statute is violated.” Citing Commerce Trust Co. v. Best, 124 Tex. 583, 589-90; 80 S.W.2d 942, 946 (1935); Dallas Trust & Sav. Bank v. Brashear, 65 S.W.2d 288, 292 (Tex.Com.App.1933, jdgmt adopted). He further makes the observation at page 429 as follows: “If a lender were to offer to lend one hundred dollars at six percent simple interest on the condition that the borrower deposit fifty dollars with the lender for the period of the loan, it would be apparent to most that the lender really was lending fifty dollars at twelve percent. No case testing this device has been found. Can variations of this scheme be used to increase the lender’s yield?”

It is our opinion that absent a savings clause in a loan agreement requiring what would have otherwise been usurious interest charged in any one year to be spread over the term of the loan, the prepayment of interest in excess of 10% per annum in any one year is a violation of the usury statute. Commerce Trust Co. v. Best, supra.

We are of the opinion that if the prepayment does not result in more than 10% interest per annum contracted for, charged, or received in any one year, or if there is a savings clause in the loan agreement which requires any otherwise usurious interest to be spread, then, of course, usury has not resulted. Imperial Corp. of America v. Frenchman’s Creek Corp., 453 F.2d 1338 (5th Cir. 1972); Nevels v. Harris, supra.

In the instant case the Bank charged and contracted for the prepayment of interest that resulted in a charge of interest in excess of 10% per annum in one year of its term. The loan agreement did not provide for the spreading of the interest over the term of the loan.

The Bank relies heavily on Eubanks v. Simpson, 90 S.W.2d 291 (Tex.Civ.App., Amarillo 1936, writ ref’d) for the proposition that if the interest does not exceed 10% over the life of the loan, it may exceed 10% in any given year. That reliance is misplaced. In Eubanks there was a fee deducted “up front” which had the effect of reducing the principal. The contract, however, provided that the payments be evenly spread over the life of the loan, never exceeding 10% during its life, or in any one year. The Court did not refer, even in dictum, to a transaction in which the interest would be greater than 10% in any one year of its term.

In their brief, plaintiffs argue for recovery of double the interest contracted for or charged, asserting that by their agreement, the principal was reduced, as in the Eu-banks case, to $56,000.00. The total amount of principal and interest due at the end of three years was $77,000.00. At 10% per annum for three years, the maximum allowable interest on $56,000.00 is $16,800.00, which, when added to the principal, is $72,-800.00, or $4,200.00 less than the amount the Bank actually charged. The interest charged was, then, more than the 10% per annum allowed by law.

Plaintiffs next assert the trial court erred in concluding as a matter of law that the Bank did not have the prerequisite intent to charge usury and, therefore, was not liable to the plaintiffs. This point is sustained.

The law is well settled that intent, in usury cases, does not mean intent to charge a usurious rate of interest. Rather, it means intent to make the bargain made. Moore v. Sabine National Bank of Port Arthur, 527 S.W.2d 209 (Tex.Civ.App., Austin 1975, writ ref’d n. r. e.); Townsend v. Adler, 510 S.W.2d 175 (Tex.Civ.App., Houston (14th Dist.) 1974, no writ). Tibbets testified he did not intend to charge usury and that the device agreed upon was not conceived in order to exact more than the legal rate of interest. While those self-serving statements may well be true, they are immaterial. It is also immaterial that the idea for the form of the loan was conceived by the Millers or their agent. The Bank understood and agreed to the terms as written and even prepared the letter of agreement for O. W. Miller’s signature.

Money lenders are presumed to recognize usury when they see it, and are on notice that it is illegal. In Townsend v. Adler, supra, plaintiff brought suit on a promissory note. Borrowers gave plaintiff their note for $4,000.00, due in one year without interest. Borrowers received only $3,000.00. Borrowers pleaded usury as a defense. Judgment was rendered that plaintiff recover nothing. The lender was ignorant of the usury law when he made the loan. He nevertheless forfeited all recovery on the note because the effective annual rate of interest charged was 33V3%, which is more than double the maximum rate allowed by law. In affirming the judgment that court stated: “Although it appears that Townsend was ignorant of the usury laws when he made the loan, it is clear that he intended to make the bargain which he made. While we appreciate the harsh result brought about by our statute, we are not at liberty to disregard its clear mandate.”

The Bank urges the further defense of accidental and bona fide error. In support of its contention, the Bank relies upon O. R. Mitchell Motors, Inc. v. Bell, 528 S.W.2d 856 (Tex.Civ.App., San Antonio 1974, writ ref d n. r. e.), a suit under the Consumer Credit Code. The contention there made is that the appellant had instructed its printer to print its contract in the size type required by law; but by inadvertence the printer used a smaller type, which was an accidental and bona fide error.

The Millers’ loan instruments show on their face that the loan is usurious, as in Townsend supra. In such a case, the Bank has the burden to prove that the terms of the loan resulted from an accidental and bona fide error. Tex.Rev.Civ.Stat.Ann. art. 5069-1.06(1) (1971); Moore v. Sabine National Bank of Port Arthur, supra; Am. Century Mtg. Investors v. Regional Ctr., 529 S.W.2d 578 (Tex.Civ.App., Dallas 1975, writ ref’d n. r. e.).

In the instant case, the Bank has introduced no evidence to show that it did not mean to agree to the terms of the loan as written due to any accidental and bona fide error. The loan is usurious.

As indicted above, plaintiffs brought suit against the Bank for any relief to which they were entitled due to the usurious interest charged both Mr. and Mrs. Miller. The Bank filed a counterclaim against plaintiffs to recover $14,000.00 representing a portion of the interest it had charged the Millers in connection with the $70,000.00 loan. Under oath, plaintiffs pled usury as a defense to the counterclaim for $14,000.00. A usurious contract is unenforceable as to the interest contracted for, charged or received. The statute is available to the borrower as an offset in an action on a note and as a defense. Wall v. East Texas Credit Union, supra; Townsend v. Adler, supra. This had the legal effect, then, of denying the Bank a recovery of the $14,000.00 and there should have been a take-nothing judgment on the Bank’s counterclaim.

The Bank in its counterclaim alleged in part as follows:

“Counterclaim for Interest

“2. Macile Miller paid into the Registry of the Court $7,000.00, representing interest for one year due about January 6, 1975.

“5. Defendant has forgiven and released any claim for interest against Plaintiff, other than $14,000.00 for 1973 and 1974 interest on the $70,000.00 loan.

“6. Defendant prays for judgment in the amount of $14,000.00 against Plaintiff for unpaid interest, and for an order authorizing an offset of the proceeds in the bank and an order paying bank the proceeds in the Court.” (Emphasis ours.)

The Bank, in its counterclaim, admitted that this $14,000.00 was interest it had charged the Millers. It follows then as a matter of law under the undisputed facts, the judgment in favor of the Bank against plaintiffs was erroneous and the Bank’s counterclaim should be denied.

The Bank assigns a counterpoint that Mrs. Miller’s claim in her representative capacity cannot be reviewed because she did not brief the point. The trial court concluded, as a matter of law, that O. W. Miller’s claim for usury terminated upon his death. However, Mrs. Miller assigns a reply counterpoint that her claim, in her individual capacity is not extinguished by reason of the death of her husband, because she also contracted for the loan and was charged usurious interest in her individual capacity as a joint obligor.

The Bank relies on the authority of Ellis v. Brooks, 101 Tex. 591, 102 S.W. 94 (Tex.1907), a case in which a father sued on a liquor dealer’s bond, for the death of his minor son, which death resulted from a sale of liquor by defendant to the minor son. The suit by the father, who died before judgment, was properly abated. The supreme court held that while the father’s action terminated on his death, the boy’s mother, also an aggrieved party, could prosecute an action in her own right. Ellis is directly in point here, where both O. W. and Macile Miller, as joint and several obligors, had an individual right to sue the Bank for usury. His death abated his action, but had no effect on hers in her individual capacity.

In Pinemont Bank v. DuCroz, 528 S.W.2d 877 (Tex.Civ.App., Houston (14th Dist.) 1975, writ ref’d n. r. e.), there were seven signers of a note. Of those, two were corporations, to which the same usury law does not apply. Of the five remaining, only three brought suit. The usurious interest contracted for was $50,733.04. The trial court awarded each of the plaintiffs double the interest contracted for or charged: $101,466.08, or a total award of $304,398.24. The appellate court, in reversing, held the statute allows a penalty of only twice the total interest contracted for in each obligation. It stated, “The maximum forfeiture which could be awarded is twice any interest contracted for that may be usurious.” The case was remanded for a determination of the capacities in which the three plaintiffs signed the note.

The application of Pinemont to the present case lies in the court’s implicit holding that the total amount of usurious interest, doubled, will be awarded to the successful plaintiffs—whether one or several.

Had O. W. Miller survived, he and Macile Miller would jointly have recovered whatever penalty is assessed. Under the statute, anyone who contracts for, charges or receives usurious interest, “. shall forfeit to the obligor twice the amount of interest contracted for, charged or received . . . Tex.Rev.Civ.Stat.Ann. art. 5069-1.06(1) (1971). (Emphasis ours.) Macile Miller was an obligor in her individual capacity; i. e., she contracted to pay, and was liable for, the entire amount of the loan, and therefore falls within the protection of the statute. McDonald v. Cabiness, 100 Tex. 615,102 S.W. 721 (Tex.1907); Hall v. McGregor, 431 S.W.2d 369 (Tex.Civ.App., Houston (1st Dist.) 1968, no writ).

The Bank has cited no authority in point for its contention that Macile Miller’s claim is extinguished, or that one-half of the entire claim is extinguished, by reason of the death of one of the joint and several obli-gors. Macile Miller has caused the principal on the note to be paid, as she was obliged to do, and retains the right in her individual capacity to collect any penalties awarded by reason of usurious interest having been charged her for obtaining the loan.

The Bank urges that even if the loan should be found to be usurious, recovery is limited to twice the amount of interest actually paid, rather than twice the amount contracted for or charged. It cites only one case for that proposition: W. E. Grace Manufacturing Company v. Levin, 506 S.W.2d 580 (Tex.1974). A careful reading of Grace reveals that the time period for repayment was left uncertain. Therefore, it was impossible for the court to compute the amount of interest charged. In order to avoid speculation, it considered only the amount paid, and the time period in which it was paid. In the instant case, the terms were certain.

The statute in this respect is clear. Tex. Rev.Civ.Stat.Ann. art. 5069—1.06(1) (1971) provides: “Any person who contracts for, charges or receives interest which is greater than the amount authorized by this Subtitle, shall forfeit to the obligor twice the amount of interest contracted for, charged or received, and reasonable attorney fees fixed by the court . . . (Emphasis ours.)

The Bank in its motion for rehearing contends that since Mrs. Miller did not sign the freeze letter, i. e., she did not agree to the interest that the Bank actually charged both Mr. and Mrs. Miller, she cannot recover. This contention is overruled.

Since our original opinion the supreme court has again followed the law of the Wall case, supra, in Windhorst v. Adcock Pipe & Supply, 542 S.W.2d 222 (Tex.Civ.App., Waco 1976), rev’d 547 S.W.2d 260, 20 Tex.Sup.Ct.J. 173 (Tex.1977). In that case the customer had not paid any finance charge, but was claiming that the charging alone, since it was excessive interest, constituted usury. The supreme court stated that the court of civil appeals held that “ ‘the “charging” (emphasis theirs) of interest in excess of the amount authorized is not actionable unless charged pursuant to an agreement (emphasis ours) of the parties, or actually collected.’ ” The supreme court, in reversing the court of civil appeals then held “Such a holding is contrary to the plain meaning of Article 5069 — 1.06. By describing the conditions precedent to recovery of penalties in the disjunctive, the Legislature made it clear that only one such condition need to occur to trigger penalties; either a contract for, a charge (emphasis ours) of or (emphasis theirs) receipt of usurious interest.” It is undisputed that the Bank charged both Mr. and Mrs. Miller the interest here described. Under the decision of Windhorst, supra, that charge triggered penalties.

Plaintiffs assert the trial court erred in holding that they were estopped from seeking penalties under the usury statute because their attorneys and agents conceived the loan plan on which the Bank relied. We sustain this point and hold the evidence establishes conclusively to the contrary.

As between the original parties to a transaction, estoppel is not ordinarily applicable in usury cases. Western Guaranty Loan Co. v. Dean, 309 S.W.2d 857, 863 (Tex.Civ.App., Dallas 1957, writ ref’d n. r. e.). Associates Inv. Co. v. Thomas, 210 S.W.2d 413 (Tex.Civ.App., Fort Worth 1948, no writ). However, even if estoppel were applicable to a suit asserting usury, there is no evidence in the record supporting such a finding or conclusion of law.

The general basis of equitable es-toppel is deceptive conduct and there simply was none in this case. In Ellis v. Cleavinger, 298 S.W.2d 193 (Tex.Civ.App., Amarillo 1957, no writ), that court held that equitable estoppel consists of five elements: (1) a false representation or concealment of a material fact, (2) the representation must be made with knowledge of the facts, (3) the person to whom it is made must have been ignorant of the truth concerning the matter, (4) it must have been made with the intention that the innocent party should act upon it, (5) he must have been induced by the false representation to act upon it.

The Bank in its motion for rehearing contends no appeal was perfected on behalf of Macile Miller, as independent executrix of the estate of O. W. Miller. This contention is overruled. The transcript reflects that “MACILE MILLER, individually and as Executrix of the estate of O. W. Miller . ” timely gave notice of appeal “. . . from said Judgment and all portions of it . . . .” The appeal bond was signed by Macile Miller individually and as executrix of the estate of O. W. Miller.

In its motion for rehearing the Bank contends that the findings of the trial court were not properly challenged by plaintiffs. This contention is overruled. Their challenge took the form recommended by Chief Justice Robert W. Calvert, in an article entitled ‘“No Evidence’ and ‘Insufficient Evidence’ Points of Error”, 38 Texas L.Rev. 361, 363. Judge Calvert states that where the evidence establishes conclusively the opposite of the vital fact, it is not a true “no evidence” situation. “It usually arises when a jury finds the nonexistence of a vital fact or gives a negative answer to an issue inquiring as to the existence of a vital fact, whether the fact be vital to a plaintiff’s claim or to an affirmative defense. Points of error in that situation which assert that there is no evidence of probative force to support the jury’s finding really miss the target. For example, what does it benefit a party that there is no evidence to support a jury finding that the opposite party did not commit a negligent act? Before a party is entitled to have a judgment based on the answer reversed and judgment rendered in his favor it must appear that the evidence establishes conclusively that the act was committed. In this situation it would be much better to forget the words ‘no evidence’ and assert in the point of error . that the evidence establishes conclusively, or as a matter of law, that the act was committed.”

In the case before us Mrs. Miller was not permitted to testify because of the effect of Tex.Rev.Civ.Stat.Ann. art. 3716 (1926), (the “Dead Man’s Statute”.) As a result, all material testimony was elicited from Blease Tibbets, president and member of the board of directors of the Bank. His testimony is clear and consists of admission of positive and definite facts. He admitted that Mr. Winters was acting as agent for both Mr. and Mrs. Miller. He admitted all of the facts stated in this opinion. All the facts necessary to find usury and to defeat the Bank’s counterclaim are established conclusively and constitute judicial admissions on the part of the Bank which preclude the trial court from finding any facts contrary. Griffin v. Superior Insurance Company, 161 Tex. 195, 338 S.W.2d 415 (1960).

The errors of the trial court are properly preserved by the plaintiffs by their points of error, statement and argument in which they show that the evidence establishes conclusively or as a matter of law that usurious interest was charged and therefore they are entitled to the relief here granted them by this court.

The Bank had the burden of proving that it was entitled to recover the two $7,000.00 items since it could have maintained such a cause of action in an independent suit. See 52 Tex.Jur.2d, Set Off, Counterclaim, and Cross Actions, Determining nature of plea — § 55, at 259 (1964).

As stated above, the Bank filed a counterclaim against plaintiffs to recover the $7,000.00 frozen in their joint checking account and the $7,000.00 they had deposited in the registry of the court which the Bank admitted is interest. Since it is conclusively established these are items of usurious interest charged, the Bank cannot enforce its contract to recover them. Therefore, as a matter of law the trial court should have rendered a take nothing judgment against the Bank with appropriate orders for the Bank and clerk of the trial court to pay said sums to the counter defendants.

The Bank contends Mrs. Miller is not entitled to recover the two $7,000.00 items because she did not specifically pray for such recovery. We overrule this contention. All parties fully pled the facts and each had a general prayer seeking general relief.

The facts established in the cause were properly pled and are supported by the evidence. The measure of damages, then, is a matter of law, and it becomes the duty of the court to apply the proper measure of damages. 17 Tex.Jur.2d, Damages— Measure of damages, § 197, at 263 (1960).

As an additional reason why plaintiffs should be awarded the $7,000.00 now in the registry of the court, we note it was deposited pursuant to a written agreement by Ryan Mortage Company, the Bank, and Mrs. Miller; which agreement provided that the sum would be deposited without prejudice to any of the parties to this suit. Because of the agreement this sum was never paid to the Bank. Since the Bank has no enforceable right to the money so deposited, it should be returned to the depositors. Wheeler v. Pavlic, 290 S.W.2d 754 (Tex.Civ.App., Beaumont 1956, no writ); Gamer Paper Co. v. Tuscany, 264 S.W. 132 (Tex.Civ.App., San Antonio 1924, writ dism’d).

On motion for rehearing, counsel for the Bank correctly pointed out the logical inconsistency in our earlier opinion, now withdrawn as to the measure of damages. Since plaintiffs have already paid $70,000.00 on a principal of $56,000.00, they have paid $14,000.00 in interest. To effectuate the intent of the usury statute, the interest payment should be returned to Mrs. Miller before she recovers twice the interest charged, so that the net effect is a forfeiture of twice the interest charged. It would violate the unquestioned legislative purpose of the statute to penalize the plaintiff in the amount of any usurious interest paid before suit is filed. Wall v. East Texas Teachers Credit Union, supra. In order to avoid the anomalous result brought to our attention by counsel for the Bank, we hold Mrs. Miller, as plaintiff, should recover the $14,000.00 interest already paid, plus $42,000.00, which is twice the interest charged. This is in addition to the two $7,000.00 items the Bank failed to recover in its counterclaim.

It is the duty of this court to render such judgment as the court below should have rendered. Tex.R.Civ.P. 434.

CONCLUSIONS

(1) The Bank in its capacity as counter plaintiff in its suit against the plaintiffs for $14,000.00 which it claims is interest due, is unenforceable because the charge was usurious. Therefore, the Bank should take nothing by this counterclaim.

(2) The two $7,000.00 amounts should be awarded to plaintiffs.

(3) In the suit in which the estate of O. W. Miller is suing for double the usurious interest charged, there should be a take nothing judgment because his cause of action did not survive his death. This portion of the judgment is affirmed.

(4) Macile Miller in her individual capacity as plaintiff should prevail in her suit for double the usurious interest charged or contracted for in the amount of $42,000.00.

(5) Macile Miller should recover $14,-000.00, which is the difference between the $70,000.00 paid and the $56,000.00 principal received.

(6)Judgment for the sums awarded in paragraphs 4 and 5 above shall bear interest at the statutory rate from January 19, 1976, the date of the trial court’s erroneous judgment, until paid. American Paper Stock Company v. Howard, 528 S.W.2d 576 (Tex.1975).

We accordingly reverse the judgment of the trial court and render judgment in accordance with the above conclusions, which judgment has this day been entered in the minutes of this court.


author: McDONALD, Chief Justice.

text:
    Durwood O. PHILLIPS et al., Appellants, v. C. T. LATHAM et al., Appellees.
    No. 5714.
    Court of Civil Appeals of Texas, Waco.
    April 20, 1977.
    Rehearing Denied May 26, 1977.

      Charles Ben Howell, H. Averil Sweitzer, Dallas, for appellants.
    John A. Pace, Dallas, for appellees.
   OPINION

McDONALD, Chief Justice.

This suit arose out of an allegedly wrongful trustee’s sale of a residence owned and occupied by plaintiffs Latham. They sued C. R. Smith, who held a second lien note secured by deed of trust under which the property was sold, Charles Ben Howell, substitute trustee, and Phillips who bought the property at the sale. Plaintiffs’ petition included a count in trespass to try title and also a count for actual and exemplary damages for “illness and worry” and loss of time from work, caused by an alleged conspiracy of defendants to deprive plaintiffs of their home. After jury trial in the first trial judgment was rendered for plaintiffs against all defendants for title to the property, and against defendants Phillips and Howell for damages.

Phillips and Howell appealed and the Dallas Court of Civil Appeals held that the judgment for title was correct, but that recovery of damages was without support in the evidence. The Dallas Court reversed and rendered the judgment for the damages; and remanded the balance of the cause to the trial court with instructions:

“Defendant Phillips will be permitted to amend his pleadings to allege the amount due him. Plaintiffs will be permitted in reply to plead an offer to pay what they owe. If plaintiffs fail to plead such an offer, the court is instructed to render judgment that plaintiffs take nothing. If plaintiffs do plead such an offer, the court will, without reopening any of the points settled in this opinion, or the facts upon which they are based, render judgment in favor of plaintiffs for title and possession of the property, conditioned upon and subject to payment of the amount of the indebtedness, as determined by the court, or the court will make such other order as will secure payment to Phillips of such amount”.

The Court of Civil Appeals taxed $180. of the transcript costs against the Lathams, dividing the balance of the costs of the first appeal between the parties; and then provided that the trial court on remand would “make proper allocation in its final judgment of the costs in the trial court [on the first trial]”.

The case returned to the trial court, where Phillips amended claiming $691.43 due on the second lien, $48.85 paid in county taxes, $161.42 paid in city taxes, $128.51 paid for insurance pursuant to the deed of trust, interest and attorneys’ fees. The La-thams failed to file a pleading but the trial court permitted them to dictate an oral trial amendment in which they tendered such amounts due the Phillips. Phillips insisted he was entitled to a jury, and a jury fee had been paid, but the trial court refused a jury and proceeded to hear the case. Almost no evidence was received in the case, the trial judge stating “the court just considers this proceeding as a continuation of the original trial. I take judicial notice of everything that is in the record”.

The trial court rendered judgment for plaintiffs Latham on title and possession of the property (as instructed by the Dallas Court of Civil Appeals) then rendered judgment for Phillips for $852.85 ($691.43 due on the second lien, and $161.42 which Phillips paid as taxes to the city). The trial court denied Phillips’ recovery for the $48.85 county taxes, $128.51 insurance, $88.55 interest, and attorneys’ fees; and the trial court adjudged all trial court costs against Phillips and Howell (on both the first and second trials).

Phillips appeals on 11 points, and Howell appeals on 2 points; contending among other matters:

1) The trial court erred in denying Phillips a trial by jury.
2) The trial court erred in holding Phillips not entitled to recover: $48.85 paid for county taxes, $128.51 paid for insurance, certain interest and attorneys’ fees.
3) The trial court erred in assessing all trial court costs in the first trial against Phillips and Howell.

The parties stipulated the record in the first trial could not be considered by this court in determining this appeal.

First, it is our construction of the Dallas Court of Civil Appeals’ opinion and mandate that:

1) The foreclosure was of no effect.
2) The Lathams were entitled to judgment for title and possession of the property, subject to whatever amount of money was due Phillips under his second lien.
3) The case was remanded only for a determination of the amounts Phillips was entitled to, and for entry of judgment for Latham for title subject to such amounts due Phillips.

Second, testimony at the first trial was not admissible and could not be considered in the second trial. Conner v. Tri County Water District, S.Ct., 541 S.W.2d 856.

Third, appellants were entitled to a jury. Denial of a jury is harmless if the facts are undisputed. In this case there are issues of fact which appellants were entitled to have a jury determine.

Finally we think the trial court abused its discretion in assessing more than one half of the trial court costs in the first trial against appellants.

We sustain Phillips’ point the trial court erred in denying him a jury.

The cause is reversed and remanded with instruction to comply with the mandate on the first appeal; to accord appellants a jury; and to make proper allocation of the costs in the first trial.

Costs in the second trial and appeal are adjudged against appellees.

Counsel stated in effect in oral argument and in their briefs that this case (in court since in 1969) has been litigated much too long. We agree, and by way of dicta suggest as an equitable settlement: 1) $1000. be paid Phillips by the Lathams; 2) Equal division of the trial court costs on the first trial between Phillips and the Lathams; 3) Costs of second trial and appeal be paid by the Lathams.

REVERSED & REMANDED.

      . Phillips v. Latham, Tex.Civ.App. (Dallas) NRE, 523 S.W.2d 19.


author: PEDEN, Justice.

text:
    AMERICAN NATIONAL INSURANCE COMPANY, Appellant, v. TRI-CITIES CONSTRUCTION, INC., Appellee.
    No. 16833.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    April 21, 1977.

      Dibrell, Dibrell, Greer & Brown, Ronald M. Gipson, Galveston, for appellant.
    Childs, Fortenbach, Beck & Guyton, James J. Lee, Houston, for appellee.
   PEDEN, Justice.

This appeal stems from the failure of Markland Development, a real estate developer, to consummate a loan commitment agreement with American National Insurance Company, as lender. Tri-Cities Construction, Inc., the assignee of Markland Development, sued appellant, American National, to recover an $11,000 “standby fee” paid by Markland to American National upon confirmation of the loan commitment. Appellant retained the fee as liquidated damages when Markland sold the property to Chrysler Realty before the closing date of the loan, but the trial court awarded the $11,000 to Tri-Cities on jury findings that Markland did not breach the loan agreement and that the fee amounted to a penalty.

On a prior appeal, we reversed and remanded a summary judgment granted in favor of American National. Tex.Civ.App., 523 S.W.2d 426 (1975, no writ).

Markland Development employed a mortgage broker to procure permanent financing for a car dealership to be built by Markland and leased by Chrysler Realty. American National approved the broker’s application for a $550,000 loan at 10% interest for a term of 25 years and delivered its commitment agreement to the broker. After American National had agreed to four written changes, Markland executed the commitment agreement and paid in the $11,000 fee.

In response to Special Issue No. 1, the jury did not find that Markland breached the loan commitment. Appellant’s first two points of error contend that the evidence conclusively showed that Markland did breach it. We sustain these points.

The applicable provisions of the loan commitment were:

“18. At the time this commitment is accepted, the applicant shall make a deposit of $11,000 as a standby fee. In the event all the conditions and requirements of this commitment are not satisfied and the loan is not closed prior to the expiration of this commitment, the standby fee shall be retained as liquidated damages; otherwise, the fee shall be refunded upon closing of this loan. American National agrees to refund the standby fee, in the event the appraisal report required in Condition 8 of this commitment is not satisfactory to us.”
“20. Mortgage to contain the following clause: ‘If the mortgagor (grantor) elects to sell the mortgage premises herein described, noteholder shall have the first right of refusal to purchase said premises upon noteholder’s receipt of any bona fide purchase offer for a period of 30 days after written notice of offer is received by noteholder. This right to purchase shall be automatically waived if noteholder fails to exercise its first right of refusal within aforesaid 30 day period. This first right of refusal shall not apply in the event Chrysler Realty Corporation and/or its subsidiary exercises its right to purchase under a lease agreement with the borrowers.”
“21. Lease to Chrysler Realty Corporation shall permit tenant its successors and assigns to purchase premises no sooner than the eleventh loan year and in the event premises are purchased then purchase price is to be not less than the sum of the then existing mortgage balance, all accrued items and applicable prepayment fee.
“Landlord to assign his interest to any purchase proceeds under the lease to noteholder. In the event Chrysler Realty Corporation exercises its option to purchase under the terms of the lease and assumes the then outstanding mortgage balance, then the landlord shall be entitled to that portion of the purchase proceeds in excess of the then outstanding balance, accrued items, and applicable prepayment fee.”

Appellee asserts that Markland did not breach its commitment because condition 20 of the agreement provided for Chrysler Realty’s option to purchase; however, this provision of the commitment contained only American National’s right to first refusal which was subject to Chrysler Realty’s right to purchase. Neither of these rights was to become effective until the mortgage and lease were consummated. Condition 10 of the commitment agreement required that the improvements be leased to Chrysler.

The loan commitment is an agreement to lend and to borrow money to permanently finance a building. The borrower, Markland, sold the property prior to the consummation of the loan and prevented appellant from lending the money on the stated terms, thus breaching the contract. Since the evidence adduced in this hearing was undisputed, the issue of breach presented a question of law for the court. Gulf States Equipment Co. v. Toombs, 288 S.W.2d 203, 205 (Tex.Civ.App. — 1956, writ ref., n.r.e.). The meaning of an unambiguous agreement is determined by the court as a matter of law from the language used therein. Tower Contracting Co. v. Flores, 157 Tex. 297, 302 S.W.2d 396 (1957). We do not reach the appellant’s third point, a great weight point concerning the first jury finding.

Points of error 4, 5 and 6 complain that the trial court gave improper instructions as to when a penalty occurs. Special Issue No. 2 and the instructions in question were submitted as follows:

“Do you find from a preponderance of the evidence that the $11,000.00 fee paid by Markland Development, Inc. was a penalty?
“You are instructed that a penalty occurs when any one of the following situations exist:
“(1) When the money paid constitutes security for the performance of the contract; or
“(2) When the money paid is disproportionate [excessive or inadequate] to the actual damages sustained; or “(3) When performance of very different degrees of importance and value are promised and one large sum is made payable as damages for any breach whatever; or
“(4) When the amount stipulated is not a reasonable forecast of just compensation for the harm caused by the breach. “Answer ‘We do’ or ‘We do not’.”

The jury answered “We do”.

Appellant preserved these points for appeal by objecting to the court’s charge in accordance with Rule 274 of Texas Rules of Civil Procedure and complains specifically about instructions (1), (2) and (3). We sustain these points. They constitute the main issue in this appeal.

When should a stipulated damage provision of a contract be enforced as liquidated damages, and when should enforcement be denied because it is a penalty provision? The Texas Supreme Court answered that question and stated the Texas rule in Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484 (1952), by citing with approval Section 339 of the Restatement of Contracts:

(1) an agreement, made in advance of breach fixing the damages therefor, is not enforceable as a contract and does not affect the damages recoverable for the breach, unless
(a) the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach, and
(b) the harm that is caused by the breach is one that is incapable or very difficult of accurate estimation.

Since this case is to be remanded, we suggest that under the evidence adduced at the last trial the instruction could have been:

You are instructed that an agreement made in advance of breach and fixing the damages for a breach of contract is considered to be a penalty when:
(a) the amount so fixed is not a reasonable forecast of just compensation for the harm that is caused by the breach, and
(b) the harm that is caused by the breach is not very difficult of accurate estimation.

Instruction (1) given by the trial court appears to have been based on this quotation: “The legal distinction between penalties and liquidated damages is that the former constitute security for the performance of the contract while the latter constitute the measure of recovery in the event of nonperformance.” Roberts v. Dehn, 416 S.W.2d 851, 853 (Tex.Civ.App.1967, no writ), citing, 17 Tex.Jur.2d § 157, p. 223. We do not consider that this use of part of the quotation would help the jury understand what constitutes a penalty as set out in Stewart v. Basey, supra.

The second instruction allowed the jury to compare the actual damage to the stipulated liquidated damages. A finding of actual damage is only material to the reasonableness of the parties’ forecast of possible harm. The mere fact that stipulated damages are in excess of actual damages does not prevent the stipulation from being lawful. Elliott v. Henck, 223 S.W.2d 292 (Tex.Civ.App.1949, writ ref., n.r.e.); Comment, A Functional Approach in Determining the Validity of a Liquidated Damages Clause, 30 Tex.L.Rev. 752, 764 (1952). A jury should not base a finding of penalty solely on this instruction.

The third instruction contained in Special Issue No. 2 allowed the jury to find a penalty if one large sum was payable for any breach when performance of very different degrees of importance was promised. In Stewart v. Basey, supra, the provision for stipulated damages was treated as a penalty “since the contract provided the same reparation for the breach of each and every covenant, and since it would be unreasonable and a violation of the principle of just compensation to enforce it as to some of them”, (emphasis added). If this type of contractual provision exists, it does not make the provision a penalty unless the amount stipulated is also found to be unreasonable as it relates to any one of the possible breaches. 30 Tex.L.Rev., supra, at p. 757. Further, we find no evidence in our case to make this instruction relevant.

Appellant’s seventh point of error complains of the trial court’s refusal to allow the authentication and introduction of defendant’s exhibit no. 2 under the trade publication exception to the hearsay rule. The trial court sustained appellee’s objection to the evidence before appellant established that the evidence was generally recognized as reliable and regularly used in a trade or specialized activity, a necessary prerequisite for its introduction. Lewis v. Southmore Savings Ass’n, 480 S.W.2d 180 (Tex.1972). The appellant made no bill of exceptions to show what answers would have been elicited; so no error is disclosed in the rulings. J. Weingarten v. Brockman, 134 Tex. 451, 135 S.W.2d 698 (1940).

Appellant’s eighth point of error asserts that the jury’s response to Special Issue No. 3 was contrary to the great weight of the evidence. Special Issue No. 3 was submitted as follows:

“Do you find from a preponderance of the evidence that American National Insurance Company suffered damages as a result of the breach, if any you have found?
“Answer: We do not.”
Our disposition of this case makes it unnecessary for us to rule on this point.

Reversed and remanded.


author: COLEMAN, Chief Justice.

text:
    Bennie Clinton ADAIR, Appellant, v. Judy Kaye PATTERSON, Appellee.
    No. 16859.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    April 21, 1977.

      Brice A. Tondre, Houston, Don Stokes, Marshall, of counsel, for appellant.
    Fidler & Boerstler, Herbert W. Boerstler, James W. Cox, Houston, for appellee.
   COLEMAN, Chief Justice.

This is an appeal from an order denying a Plea of Privilege in a suit affecting the parent-child relationship. The judgment will be affirmed.

This suit was filed in the District Court of Harris County, Texas to modify an existing child support order entered by decree of the District Court of Dallas County, Texas in 1970. The petition alleged that Judy Kaye Patterson and Melody Adair, her child, reside in Harris County, Texas. The petition further alleged that Bennie Clinton Adair by decree of the District Court of Dallas County, Texas was ordered to pay child support in the sum of $75.00 per month for the support of Melody Adair. Mrs. Patterson “requested”, because of a substantial and material change of circumstances, that the support for Melody be increased to $500.00 per month.

Mr. Adair filed a Plea of Privilege to be sued in Harrison County, the county of his residence. Mrs. Patterson filed a controverting affidavit alleging that venue was properly established in Harris County by reason of § 11.04 of the Texas Family Code. A copy of the original petition was attached to the controverting affidavit and incorporated for all purposes.

At the hearing on the Plea of Privilege Mrs. Patterson testified that in the divorce granted by the District Court of Dallas County, Texas, she was awarded the care and custody of Melody Denice Adair and that since the divorce was granted there has been no other suit involving Melody Denice Adair. She testified that Melody resides with her in Harris County, Texas.

Prior to the adoption of Title II of the Texas Family Code, effective January 1, 1974, it was settled law that no court other than the court entering a divorce decree and support order had jurisdiction to amend, modify, or change the support order. An order purporting to modify or change a support order entered by a court other than the court entering the original decree was void unless filed in the original suit and legally transferred to the other district court. Ex parte Goldsmith, 155 Tex. 605, 290 S.W.2d 502 (1956).

Section 11.01 of the Texas Family Code, Paragraph (5) reads:

“ ‘Suit affecting parent-child relationship’ means a suit brought under this subtitle in which . . . access to or support of a child ... is sought.”

Section 11.02 of the Code provides that a suit affecting the parent-child relationship may be brought “as provided in this subtitle.”

Section 11.03 provides that a suit affecting the parent-child relationship may be brought by any person with an interest in the child.

Section 11.04 of the Code provides that a suit affecting the parent-child relationship “shall be brought” in the county where the child resides, and that where the parents of. the child do not reside in the same county and neither a managing conservator or a guardian of the person has been appointed, the child resides in the county where the parent having care and control of the child resides. If a managing conservator has been appointed by court order the child resides in the county where the managing conservator resides.

The appellant, Bennie Clinton Adair, contends that in order to establish venue under the Family Code, the plaintiff must allege and prove the elements of a cause of action which would include facts showing a material and substantial change of circumstances since the entry of the original order requiring support.

The statutes cited above require that a suit to change the child’s support order previously entered by a court which was not given continuing jurisdiction by § 11.05 of the Code be filed in the county where the child resides. It is clear that the legislature intended to place venue in suits such as this exclusively in the county of the child’s residence. See § 11.06(a). The special venue provided by § 11.04 of the Texas Family Code is encompassed by subsection 30 of Article 1995, V.A.C.S. Henson v. Brown, 524 S.W.2d 412 (Tex.Civ.App.—Austin 1975, no writ).

When a Plea of Privilege is filed the controverting plea must set out facts to show that the case falls within one of the exceptions to the rule that venue is in the county of the defendant’s residence. The “venue facts” are those stated in the particular exception applicable. Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69 (1945). The applicable venue facts under § 11.04, Texas Family Code are:

1. that the suit is one affecting the parent-child relationship; and
2. that the child resides in the county where the suit has been brought.

Proof of a cause of action is not required under all exceptions to the general venue rule. Under some exceptions, such as subsection 14 of Article 1995 V.A.C.S. which provides that suits for damages to land must be brought in the county where the land is situated, venue is determined by the character of the suit. In such cases the controverting plea need not set out grounds necessary for recovery, but only the ground which confers venue. High v. Karell, 346 S.W.2d 920, 922 (Tex.Civ.App.—Fort Worth 1961, no writ). A court may look to the petition to determine the character of a suit. Gilbert v. Gilbert, 145 Tex. 114, 195 S.W.2d 936 (1946).

The petition in this case establishes the character of this suit as being one to modify the parent-child relationship. The testimony at the trial establishes that the residence of Melody Adair was in Harris County, Texas. The trial court properly denied the Plea of Privilege.

Affirmed.