author: AKIN, Justice.

text:
    Rachel B. FOX, Appellant, v. Robert K. FOX, Appellee.
    No. 18645.
    Court of Civil Appeals of Texas, Dallas.
    June 30, 1975.
    Rehearing Denied Aug. 7, 1975.

      Walter H. Mizell, Thompson, Knight, Simmons & Bullion, Dallas, for appellant.
    Ben L. Krage, Rosenberg, Kasmir & Will-ingham, Dallas, for appellee.
   AKIN, Justice.

This is an action to enforce a New Jersey judgment obtained by plaintiff Rachel B. Fox against the defendant Robert K. Fox for accrued and unpaid alimony ordered in a divorce decree. The district court refused to give full faith and credit to the New Jersey judgment a,nd entered a summary judgment for the defendant. Plaintiff appeals.

Two principal questions are presented by this appeal. First, was the 1971 New Jersey divorce decree void as to the alimony and attorney’s fees awarded because the New Jersey court lacked in personam jurisdiction over the defendant in that proceeding? Secondly, was the September 4, 1973 default judgment for accrued and unpaid alimony, attorney’s fees, and court costs void because of lack of jurisdiction over the person of the defendant by the New Jersey court? We answer both questions in the negative and, therefore, reverse and render the judgment of the trial court.

The facts are undisputed. The parties were married on April 2, 1955, in New Jersey, and lived together in that state until they separated in August 1967. On April 20, 1968, they signed a separation agreement providing that defendant would pay child support in the amount of $40 per week and alimony in the amount of $30 per week. The agreement also provided that defendant was to receive one-half of the net proceeds from the sale of the parties’ home. When this agreement was signed, the parties resided in New Jersey. In January 1969, the defendant moved to Texas and became a resident of this state. Approximately two years after defendant became a Texas resident, plaintiff initiated divorce proceedings in New Jersey. Service was obtained upon the defendant in Texas by having him served with citation from the New Jersey court by an appropriate Texas official. The defendant made no appearance in the New Jersey divorce action. A divorce judgment was rendered April 22, 1971 which incorporated the identical terms of the separation agreement of April. 20, 1968. The defendant failed to pay the alimony and in 1973 plaintiff filed a motion for judgment with the New Jersey chancery court for alleged unpaid alimony in the amount of $4,720 and for an unpaid attorney’s fee award of $750 provided for in the original divorce decree, together with unpaid court costs from the divorce action in the amount of $155.55. In this action service was had upon the defendant by certified mail, return receipt requested. Defendant signed the receipt, but made no appearance, and plaintiff was granted a default judgment for alimony arrearages on September 4, 1973.

On October 24, 1973, plaintiff initiated this action in a Texas district court to enforce the New Jersey judgment for alimony arrearages. Each party filed a motion for summary judgment. The court refused to grant full faith and credit to the New Jersey judgment and rendered summary judgment for defendant.

1. The 1971 New Jersey Divorce Decree

To ascertain whether the New Jersey court in 1971 acquired in personam jurisdiction over the nonresident defendant, Robert Fox, to award the plaintiff alimony and attorney’s fees, it is necessary to determine if (A) New Jersey law authorized the acquisition of such jurisdiction in the manner of service of process employed, and (B) if there existed sufficient minimum contacts between the defendant and the forum state relevant to the cause of action to satisfy traditional notions of fair play and substantial justice. Accord, Mitchim v. Mitchim, 518 S.W.2d 362, 366 (Tex.1975); Mizner v. Mizner, 84 Nev. 268, 439 P.2d 679, 681 (1968); Wright v. Wright, 114 N.J.Super. 439, 276 A.2d 878 (1971).

A. New Jersey Law

It is undisputed that defendant was personally served outside the state of New Jersey. Defendant contends that according to New Jersey law, the summons and complaint must be served within the state in order to give the New Jersey court jurisdiction over the person of a nonresident defendant. We disagree. Certain New Jersey statutes, court rules, and decisions were before the trial court by stipulation, and, consequently are before us as well. Texas Rules of Civil Procedure, rule 184a. N.J.Ct.R. 4:4-4 specifies the methods of service to secure personal jurisdiction over a defendant. Subparagraph (a) of this rule provides that service of a summons and complaint shall be made on an individual by delivering a copy of the summons and complaint in person. The rule does not require that this service must be accomplished within the state of New Jersey or that it cannot be served outside the state, and it, along with subparagraphs (c) and (d), assert jurisdiction of New Jersey courts over nonresident defendants under the long-arm theory. Wright v. Wright, 114 N.J.Super. 439, 276 A.2d 878, 879 (1971). We conclude, therefore, that under these New Jersey rules and decisions, proper service of process was made pursuant to New Jersey law when the defendant was personally served in the original divorce action within the state of Texas.

Defendant argues that the New Jersey court did not acquire in personam jurisdiction in view of the following statement appearing in the 1952 New Jersey superior court decision of Ease v. Ease, 18 N.J.Super. 12, 86 A.2d 587, 589 (1952): “Since an order for the payment of alimony is a personal judgment, process must be served within the State in order to give the court jurisdiction of the person of a non-resident.” This statement in Ease, however, was not necessary to the decision, and it was not followed in the 1971 New Jersey superior court decision of Wright v. Wright, 114 N.J.Super. 439, 276 A.2d 878 (1971), wherein personal jurisdiction in a New Jersey court was obtained in an action for child support and alimony of a nonresident defendant by personal service on him in New York. We accept this later decision as declaring the New Jersey law in 1971, when the present divorce judgment was rendered.

B. Minimum Contacts with New Jersey

Since we conclude that the manner of service employed by plaintiff in the original divorce action satisfies New Jersey court rules, it is now necessary to determine if there existed sufficient minimum contacts between the defendant and New Jersey under the test laid down in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Plaintiff contends that since the defendant has consistently made child support payments to her while she has remained a resident of New Jersey, and because the divorce decree awarding child support and alimony was entered pursuant to the separation agreement consummated by the parties while they were residents of New Jersey, the defendant has had sufficient contacts with New Jersey to satisfy traditional notions of fair play and substantial justice. We agree.

The contacts which the defendant had with New Jersey resemble those which existed in the recent Texas Supreme Court decision of Mitchim v. Mitchim, 518 S.W.2d 362, 366 (Tex.1975). In Mitchim, Arizona was the marital domicile of the parties from 1966 until the husband moved to Texas in 1971. The parties owned a home in Arizona and after moving to Texas the husband continued to make mortgage payments on the home. The suit for divorce was filed less than six months after the husband left Arizona. These contacts were held to fall within the ambit of personal jurisdiction constitutionally allowed. Id. at 367. Here New Jersey was the matrimonial domicile of the parties from 1955 until 1967; the parties executed a separation and property settlement agreement in New Jersey in 1968; and after moving to Texas in 1969, the defendant has sent child support payments to plaintiff in New Jersey. Plaintiff is still domiciled in New Jersey and New Jersey had a strong interest in providing for her support both at the time of the divorce and later. We conclude, therefore, that the New Jersey court in 1971 had in personam jurisdiction over the defendant to properly award alimony and attorney’s fees to the plaintiff. See Egbert v. Egbert, 125 N.J.Super. 171, 309 A.2d 746, 748 (1973); Restatement (Second) of Conflict of Laws § 77, comment c (1971).

2. The 1973 New Jersey Judgment for Accrued and Unpaid Alimony

Plaintiff contends that the district court erred in failing to extend full faith and credit to the 1973 New Jersey judgment because the chancery court in New Jersey has continuing personal jurisdiction over a party to a divorce action, in which personal jurisdiction was originally obtained, to make subsequent orders concerning alimony. We agree.

The New Jersey statute which authorizes continuing jurisdiction of the chancery court provides:

Pending any matrimonial action brought in this state or elsewhere, or after judgment of divorce or maintenance . the court may make such order as to the alimony or maintenance of the wife ... as the circumstances of the parties and the nature of the case shall render fit, reasonable and just . . Orders so made may be revised and altered by the court from time to time as circumstances may require. N.J.S.A. 2A:34-23 (1952).

It is evident from this language that the 1973 New Jersey judgment for alimony ar-rearages is the type of decree contemplated to occur within the continuing jurisdiction of the New Jersey chancery court. This continuing jurisdiction is not limited to orders from the court which simply alter or modify a previously entered alimony decree. It also extends to a judgment of the chancery court for the payment of accrued and unpaid alimony ordered by a preceding divorce decree.

In New Jersey, alimony and child support installments do not become vested property rights when they become due because the court which rendered the alimony and child support decree has the continuing authority to modify its original order retroactively and thus reduce the amount of unpaid arrearages or extinguish the amount entirely. Timmerman v. Timmerman, 23 N.J.Misc. 52, 41 A.2d 24 (Dist.Ct.1945); Kase v. Kase, supra; cf. Sistare v. Sistare, 218 U.S. 1, 30 S.Ct. 682, 686, 54 L.Ed. 905 (1910); Lynde v. Lynde, 181 U.S. 183, 21 S.Ct. 555, 556-57, 45 L.Ed. 810 (1901). The original divorce decree awarding alimony is, therefore, not final and not entitled to be accorded full faith and credit under U.S. Const, art. IV, § 1 until the past due installments are adjudged as a sum certain by the New Jersey court which rendered the original divorce decree as occurred here. Whitehead v. Villapiano, 16 N.J.Super. 415, 84 A.2d 731, 734 (App.Div.1951); Gard v. Gard, 150 Tex. 347, 241 S.W.2d 618 (1951); Criteser v. Gaffey, 222 S.W. 193 (Tex.Comm’n App.1920, holding approved); Brazeal v. Renner, 493 S.W.2d 541 (Tex.Civ.App.—Dallas 1973, no writ); Ogg v. Ogg, 165 S.W. 912 (Tex.Civ.App.—San Antonio 1914, no writ).

In oral argument before this court, defendant asserted that the plaintiff should have initiated the 1973 action for arrearage of alimony in Texas rather than in New Jersey. We cannot agree. Had plaintiff adopted this procedure, then under the above authorities, plaintiff would not have been entitled to relief because no final judgment in New Jersey would exist for enforcement by a Texas court.

Since we have concluded that under New Jersey law, the New Jersey chancery court has continuing power to modify or enforce its alimony orders, we must determine whether it also has continuing jurisdiction over the person of an absent defendant. We conclude that it does have such continuing jurisdiction, and, therefore, it is only necessary for the defendant to receive notice and the opportunity to be heard on the unpaid alimony application. Ease v. Ease, 18 N.J.Super. 12, 86 A.2d 587, 589 (1952). The controlling provisions setting forth the manner of service for written motions filed subsequent to the original complaint are N.J.Ct.R. 1:5-1 and 1:5-2. N.J.Ct.R. l:5-l(a) provides: “In all civil actions . . . pleadings subsequent to the original complaint, written motions . and other papers except a judgment signed by the clerk, shall be served upon all attorneys of record in the action and upon parties thereto appearing pro se . . NJ.CtR. 1:5-2 provides: “Service upon a party of such papers shall be made as provided in rule 4:4-4 or by registered or certified mail, return receipt requested, to his last known address . . [Emphasis added.] It is undisputed here that the defendant received notice of the motion for judgment for alimony arrearage by certified mail, return receipt requested. Such notice conveys the requisite information and affords the defendant a reasonable time for appearance in order to comply with due process. Notice need not be served within the state when the proceeding is a part of an action previously commenced, in which jurisdiction of the person of the defendant has already been acquired. Kase v. Kase, supra.

Defendant argues that the district court correctly granted the defendant a summary judgment because the undisputed evidence shows that the defendant was entitled to an offset in an amount greater than the amount claimed by the plaintiff in New Jersey. This offset consisted of one-half of the net proceeds from the sale of the parties’ home pursuant to the separation agreement of 1968 which was incorporated in the 1971 divorce decree. Defendant’s contention is without merit. N.J.Ct.R. 4:7-1 provides: “A defendant, however, failing to set off a liquidated debt or demand, or a debt or demand capable of being ascertained by calculation, shall thereafter be precluded from bringing any action for such debt or demand which might have been so set off.” The appropriate time and forum for defendant’s assertion of his counterclaim was in 1973 when the plaintiff initiated her action for alimony arrearages. Although the defendant had reasonable notice of this action, he elected not to appear and, is therefore, precluded from asserting this compulsory counterclaim in a Texas court. Accord, Zelek v. Brosseau, 26 N.J. 501, 141 A.2d 17 (1958).

Defendant also contends that the judgment for arrearage is invalid on its face because the judgment for arrearages in the amount of $4,720 constitutes $30 weekly payments for a period of 157V2 weeks rather than 117½ weeks, which is the period of time between the original divorce decree in April 1971 and the judgment for arrearages in July 1973. We cannot agree. It is possible that the New Jersey court considered arrearage due and unpaid under the parties’ 1968 property settlement agreement before entry of the divorce decree. This the New Jersey court had jurisdiction to do.

Moreover, even if the judgment be considered erroneous on its face, it is not void, and, therefore, is entitled to full faith and credit. Chandler v. Peketz, 297 U.S. 609, 56 S.Ct. 602, 604, 80 L.Ed. 881 (1936); Fauntleroy v. Lum, 210 U.S. 230, 28 S.Ct. 641, 643, 52 L.Ed. 1039 (1908).

Furthermore, defendant argues that the New Jersey statute, as it existed in April 1971, providing for alimony to the wife only, violates the equal protection clause to the Fourteenth Amendment of the United States Constitution, in that it discriminates invidiously against male parties to divorce decrees. We conclude that defendant has no standing to raise this contention because he agreed to the alimony payments embodied in the 1971 divorce decree. Moreover, this attack goes to the merits of the decree, and cannot be raised in this collateral proceeding. Massachusetts v. Davis, 140 Tex. 398, 168 S.W.2d 216, 220 (1942); see United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 696, 91 L.Ed. 884 (1947); Howat v. Kansas, 258 U.S. 181, 42 S.Ct. 277, 280-81, 66 L.Ed. 550 (1922); Martin v. Ben Davis Conservancy District, 238 Ind. 502, 153 N.E.2d 125, 128 (1958); Richardson v. Brunner, 356 S.W.2d 252, 253 (Ry.Ct.App.1962); Norlanco, Inc. v. County of Madison, 186 Neb. 100, 181 N.W.2d 119, 123 (1970); Local 333B, United Marine Division of International Longshoremen’s Ass’n v. Commonwealth Virginia Ferry Corp., 193 Va. 773, 71 S.E.2d 159, 165 (Supreme Ct.App.Va.1952); 1 Freeman on Judgments § 363 at 759-60 (1925); see also Milwaukee County v. M. E. White Co., 296 U.S. 268, 56 S.Ct. 229, 233-35, 80 L.Ed. 220 (1935).

Accordingly, we reverse the judgment of the trial court and render judgment for plaintiff in the amount of $5,625.55, with interest from October 24, 1973 at six percent per annum. Tex.R.Civ.P. 434.

Reversed and rendered.

      . See Duffy v. Duffy, 19 N.J.Misc. 332, 19 A.2d 236, 240 (Ch. 1941); Federbush v. Federbush, 5 N.J.Super. 107, 68 A.2d 473, 474 (App.Div.1949). These cases support this proposition but were not before the trial court under Tex.R.Civ.P. 184a.

      . The New Jersey statute was amended effective September 12, 1971 to eliminate “wife” and substitute the word “parties.”


source: Caselaw Access Project

author: WARD, Justice.

license: Public Domain

text:
    TRANSPORT INSURANCE COMPANY, Appellant, v. John ANSLEY, Appellee.
    No. 6442.
    Court of Civil Appeals of Texas, El Paso.
    July 2, 1975.
    Scott, Hulse, Marshall & Feuille, Charles R. Jones, El Paso, for appellant.
    Alexander, Lowe & Pratt, Bill Alexander, Benny J. Lowe, Odessa, for appellee.
   OPINION

WARD, Justice.

This is a workmen’s compensation case which was tried by a jury and with results favorable to the claimant. The carriers points are those of no evidence, insufficient evidence, and against the great weight and preponderance of the evidence, and all regarding the jury findings that good cause existed for the late filing of the claim for compensation. We sustain the no evidence points and reverse and render.

Claimant was employed in El Paso by Merchants Fast Motor Lines. He was injured in his lower back on September 21, 1972, while he was operating a forklift which fell off of a loading dock. The claim for compensation was not filed with the Industrial Accident Board until September 3, 1973, almost a year after the injury. On the night of the accident, the claimant’s supervisor, Tony Sanchez, told him that he would fill out a report of the accident. After the accident, the claimant’s back seemed to get stiff and his legs hurt, and he complained about his back while he was on the job. The claimant thereafter continued to work with Merchants Fast Motor Lines until the weekend of Thanksgiving or the 1st of December, 1972, when, as a result of his complaining, he was told that he would have to have a doctor’s release before he could come back to work. On December 22nd, he saw Dr. Nelson, a specialist in neurological surgery, who, after an examination, recommended that he enter a hospital. On January 8, 1973, he was hospitalized and a myelogram was performed. He was then operated for a herniated disk in his lower back, and was discharged from the hospital on January 20th. He never returned to work for his employer in El Paso. He moved to Odessa where he performed light work, beginning in July, 1973. He was then injured while riding a motorcycle and hospitalized August 8, 1973. He thereafter discussed his injury with a friend who urged him to contact an attorney, and it was at that time that the claim for compensation was filed in this case.

From the night of the accident until August, 1973, he never inquired of anyone of any claim for compensation and failed to make any inquiry concerning the actual filing of a “report.” He explained this by saying it was due to his father’s advice. Soon after the accident, he discussed the matter with his father, who had been in the transportation business, and he advised him not to pursue any claim for compensation. He stated that he elected to follow this advice from the time of this discussion, which occurred on the 3rd of November, 1972, until he went to see his lawyer at the end of August, 1973. At the time the matter was discussed with his parents, he knew of the gravity and severity of his back injury, and he knew in December, 1972, that he was going to have to have a back operation. He last saw his doctor on February 23, 1973, and he was at that time discharged to return to light work. He always knew that he never received any medical payments or other compensation benefits.

In response to four special issues, the jury found that the supervisor, Tony Sanchez, had told the claimant on the night of the accident that he would file a report; that until the actual notice and claim for compensation was filed the claimant believed that the employer had filed the same with the Industrial Accident Board; that such a belief caused the plaintiff to delay filing the compensation claim with the Industrial Accident Board until the same was actually filed; and that such belief was good cause for his delay in filing the claim from the date of the occurrence of the injury until the date the claim for compensation was actually filed.

The established rule for the existence of good cause for not filing a claim for compensation is that of ordinary prudence, that is, whether the claimant prosecuted his claim with that degree of diligence that an ordinarily prudent person would have exercised under the same or similar circumstances. Whether one used the degree of diligence required is ordinarily a question of fact to be determined by the jury or the trier of facts, but it may be determined against the claimant as a matter of law when the evidence, construed most favorably for the claimant, admits of no other reasonable conclusion. Hawkins v. Safety Casualty Co., 146 Tex. 381, 207 S.W.2d 370, 372 (1948). Having examined the evidence in this case with care and having construed it most favorably to the claimant as we are required to do, we conclude as a matter of law that the claimant failed to use the degree of diligence required.

There is nothing in this case that would constitute a misrepresentation made by the company’s supervisor regarding the filing of any claim for compensation. Boone v. Continental Insurance Company, 472 S.W.2d 166 (Tex.Civ.App.—Waco 1971, writ ref’d n. r. e.). If we assume that the statement made by Mr. Sanchez, the supervisor, was to the effect that a claim for compensation would be filed for the claimant, he is still precluded from recovery. A person of ordinary prudence would not remain totally inactive and unconcerned about his rights as long as the plaintiff did in this case in sole reliance upon such a statement as the supervisor made. Allstate Insurance Company v. King, 444 S.W.2d 602 (Tex.1969); Bray v. Texas Employers’ Insurance Association, 483 S.W.2d 907 (Tex.Civ.App.—Houston (1st Dist.) 1972, writ ref’d n. r. e.). Claimant in this case was totally unconcerned, and as he stated he elected not to pursue the claim until long after the expiration of the six-months period. This was a conscious intent not to proceed with the claim.

The factual insufficiency points are not reached. This case is reversed and rendered.


author: GUITTARD, Justice.

text:
    Donald B. YARBROUGH, Appellant, v. JOHN DEERE INDUSTRIAL EQUIPMENT COMPANY, Appellee.
    No. 18646.
    Court of Civil Appeals of Texas, Dallas.
    July 7, 1975.

      Richard J. Reese, Donald B. Yarbrough, Parks & Yarbrough, Houston, for appellant.
    James A. Ellis, Jr., Carrington, Coleman, Sloman, Johnson & Blumenthal, Dallas, for appellee.
   GUITTARD, Justice.

On this venue appeal the question is whether the appellant Donald B. Yarbrough is a “necessary party” within subdivision 29a of Tex.Rev.Civ.Stat.Ann. art. 1995 (Vernon 1964). We hold that he is a necessary party, and, accordingly, we affirm the order overruling his plea of privilege.

The suit was brought in Dallas County by John Deere Industrial Equipment Company against Yarbrough and Huntsville Equipment Company. The petition alleges that by virtue of a security agreement signed by Huntsville, plaintiff had a security interest in a certain machine known as a “laser system,” that Huntsville had defaulted in its payments, that defendant Yarbrough was in possession of the machine, and that Yarbrough had demanded payment of the sum of $2,047.83, not owed by plaintiff. The petition prays for foreclosure of plaintiff’s security interest and for judgment declaring that plaintiff was not indebted to Yarbrough. Yarbrough filed a plea of privilege to be sued in Harris County. Plaintiff responded with a controverting plea alleging under oath the facts stated in the petition and further alleging that the court had venue of the foreclosure action against Huntsville under subdivision 5 of article 1995, since the contract specified payment in Dallas County, and that Yarbrough was a necessary party under subdivision 29a of that statute. By overruling the plea of privilege, the trial court impliedly found that Yarbrough was in possession of the property.

Yarbrough contends that he is" not a necessary party because, he says: (1) the evidence shows conclusively that he was not in possession at the time of the venue hearing; (2) he disclaimed any interest in the property in his testimony at the hearing; and (3) the possession issue is moot by reason of repossession by plaintiff after the hearing. We conclude that none of these grounds require reversal.

1 Possession of Property

The issue of possession is relevant to a determination of whether Yarbrough is a necessary party to the foreclosure action. The general rule is that a defendant is a “necessary party” under subdivision 29a if the complete relief to which the plaintiff is entitled as against another defendant properly suable in the county under a different exception to article 1995 can be obtained only in a suit to which both defendants are parties. Union Bus Lines v. Byrd, 142 Tex. 257, 177 S.W.2d 774, 775 (1944). In a foreclosure action, joinder of a person in possession under a subsequent conveyance or junior lien from the original mortgagor is necessary to complete relief because otherwise the purchaser at the foreclosure sale would have to file another suit against the person in possession before he could obtain possession of the property. Pioneer Building & Loan Ass’n v. Gray, 132 Tex. 509, 125 S.W.2d 284, 287 (1939); and see Shaw v. Allied Finance Co., 161 Tex. 88, 337 S.W.2d 107, 109 (1960).

We find the evidence sufficient to support the trial court’s implied finding that Yarbrough had possession of the property at the time of the venue hearing. His testimony shows that he had formerly held a second lien on the property. He admitted that before the present suit was filed he had recovered in a district court of Harris County a judgment ordering the property delivered to him in satisfaction of his claim. Copies of the judgment and the writ of possession issued under it are in evidence. The evidence further shows that Yarbrough had filed a motion in the Harris County ease to recover damages against the sheriff of Walker County for failure to execute the writ, but had dismissed that motion on entry of an agreed order directing the sheriff to deliver the property to him. Yarbrough testified that the machine had been misplaced in the sheriff’s office and that four or five days before the present venue hearing the sheriff had telephoned him, saying that the equipment had been found and asking him to come and pick it up. Yarb-rough testified further that at the time of the venue hearing the machine was in the physical custody of Dillon Murchison, president of defendant Huntsville Equipment Company. Murchison’s connection with Yarbrough is unclear, but Yarbrough admitted that Murchison was authorized to write letters on the stationery of Yarb-rough’s law firm, and Murchison’s name is listed on the firm’s letterhead, as shown by a letter from Yarbrough to the trial judge, which appears in the transcript. Since Yarbrough was entitled to receive the property from the sheriff and the sheriff offered to deliver it to him, the inference may be drawn that Murchison was acting on Yarbrough ⅛ behalf in receiving the property-

This testimony was sufficient for the judge to conclude that Yarbrough had possession of the property in the sense of actual control, although it may have been physically in Murchison’s custody. A person is in possession of a chattel if he has control of it and intent to exercise such control. Restatement (Second) of Torts § 216 (1965); and see Citizens First National Bank v. Rushing, 433 S.W.2d 741, 745 (Tex.Civ.App.—Tyler 1968, no writ); Burch v. Mounts, 185 S.W. 889, 892 (Tex.Civ.App.—Amarillo 1916, writ ref’d). The possessor need not have immediate physical control if someone else is exercising that control on his behalf. Restatement (Second) of Torts § 216, comment d (1965); National Fire Insurance Co. v. Davis, 179 S.W.2d 316, 318 (Tex.Civ.App.—Eastland 1944, writ ref’d w. o. m.).

Yarbrough attempted in his testimony to explain that Murchison was acting for the joint benefit of all the parties in receiving the property from the sheriff and keeping it pending disposition of the present suit. He alludes to a letter from plaintiff’s counsel proposing such an arrangement, although the letter was not offered in evidence. This testimony can be interpreted as supporting rather than negating plaintiff’s allegations that Yarbrough was a necessary party, since it indicates that he had sufficient control over the property that plaintiff could not have effective foreclosure relief without a judgment binding on him.

Further evidence of Yarbrough’s control over the property is his testimony that he had no objection to plaintiff’s taking immediate possession “if they will just come and get it.” This assurance suggests that Yarb-rough had power to dispose of the property and that unless he is bound as a party to the foreclosure judgment a purchaser at the foreclosure sale would not be able to get possession if Yarbrough should later decide to keep it under his control.

2. Defendant’s Disclaimer

Neither is the necessity of Yarb-rough’s presence in the suit negated by his disclaimer. At the venue hearing he testified that he had no claim to the machine, that he had never asserted any claim to it, that he had executed a release of his second lien before the suit was filed.

This testimony does not establish that Yarbrough was not in possession of the property at the time of the hearing. In view of the evidence that Yarbrough had recovered a judgment for possession and had made a claim against the sheriff for refusal to deliver the property to him the trial judge was justified in regarding with skepticism Yarbrough’s statement that he had never asserted any claim to the property. Although the disclaimer may be a judicial admission that would preclude him from making any defense to the foreclosure action or to any subsequent suit for the property, it did not establish that plaintiff could get complete relief in the foreclosure action without joining him as a defendant.

Moreover, a defendant’s admission that plaintiff is entitled to recover on the merits of one of several causes of action alleged in the petition does not defeat venue unless the defendant proves that the cause of action so admitted was alleged fraudulently for the purpose of conferring venue. Boettcher v. Federal Land Bank, 142 S.W.2d 272, 274 (Tex.Civ.App.—Galveston 1940, writ dism’d). Such an admission may require judgment for plaintiff on the merits of that cause of action, but it does not negate the allegations of venue in the controverting plea.

3. Repossession by Plaintiff

Finally, we consider Yarbrough’s contention that the question of his possession of the property is moot and has no bearing on whether he is a necessary party because after the venue hearing the property was delivered to an agent of plaintiff. The only indication in the record of such repossession by plaintiff is a letter from Yarbrough to the trial judge, to which was attached a copy of a receipt stating that Stephen C. Miller, Jr., whose signature it purports to bear, is an agent of John Deere Industrial Equipment Company and had received the property on January 17, 1975. The record contains no other evidence identifying Miller, and neither does it contain any statement under oath that plaintiff has taken possession of the property.

Since the receipt appears to have been signed after the close of the venue hearing, it can have no bearing on this appeal. It does not make the venue issue moot, since Yarbrough is still asking that the trial court’s order be reversed and that his plea of privilege be sustained with respect to the declaratory judgment action alleged in plaintiffs petition. Plaintiffs repossession of the property, if properly proved, might render the foreclosure action moot with respect to defendant Yarbrough. We need not decide whether in that event Yarbrough would be entitled to renew his plea of privilege with respect to the declaratory judgment action. See Adams v. Johnson, 298 S.W. 265, 266 (Tex.Comm’n App.1927, jdgmt. adopted); Farnham v. First National Bank, 28 S.W.2d 883, 884 (Tex.Civ.App.—El Paso 1930, no writ); Fant v. Kenedy Pasture Co., 29 Tex.Civ. App. 530, 69 S.W. 420, 421 (Tex.Civ.App.—Galveston 1902, no writ); 1 R. McDonald, Texas Civil Practice § 4.06 at 426 (1965); but cf. Thomas v. Ellison, 102 Tex. 354, 116 S.W. 1141, 1143 (1909). On this appeal it is necessary to hold only that the present record contains no pleading or proof establishing that Yarbrough was entitled to renew his privilege after close of the venue, hearing by reason of plaintiffs repossession of the property.

Affirmed.


author: EVANS, Justice.

text:
    EARTHMAN’S, INC., et al., Appellants, v. Dorothy EARTHMAN, Appellee.
    No. 16398.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    July 10, 1975.
    Rehearing Denied Aug. 18, 1975.

      Kronzer, Abraham & Watkins, W. James Kronzer, Miriam M. Burke, Rockne Onstad, Houston, for appellants.
    Butler, Binion, Rice, Cook & Knapp, Tom Alexander, Stephen W. Hanks, Houston, for appellee.
   EVANS, Justice.

This case with all its facets is essentially a suit to recover damages for conversion of corporate stock. After a jury trial, Mrs. Earthman, the plaintiff, recovered judgment on the verdict against her former husband, J. B. Earthman, III, his brother, Robert Earthman, his father J. B. Earth-man, and three Earthman family corporations: Earthman’s, Inc., Mission Life Insurance Company, and Resthaven Memorial Gardens, Inc. She was awarded damages of $325,000.00 for the conversion of her shares of Earthman’s, Inc. stock; $110,-700.00 for her Mission Life Insurance Company stock, and $211,000.00 for her Restha-ven Memorial Gardens, Inc. stock. She was also awarded exemplary damages which, in sum total, were in amounts which equalled the respective awards of actual damages for conversion of her stock.

We are presented with 317 points of error and one cross-point. For the purpose of continuity, we shall group and discuss the points in substantially the same manner as presented in the briefs of the parties.

Mrs. Earthman was divorced from her husband, J. B. Earthman, III, in March 1971. Under the divorce decree, Mrs. Earthman was awarded:

“65% of the total stock owned by the parties, or either of them, with James Bradshaw Earthman, III, ordered to forthwith transfer to Dorothy Monroe Earthman the following shares:

“(1) 1300 shares of Earthman’s, Inc.;
“(2) 10,833 shares of Resthaven Memorial Gardens, Inc.;
“(3) 325 shares of Mission Life Insurance Company.”

The shares so awarded to Mrs. Earthman represented 21% ownership in Earthman’s, Inc., 21% in Resthaven, and 13% in Mission. There seems to be no question but that the three corporations were closely held and were owned and controlled by J. B. Earth-man and his sons, J. B. Earthman, III, Robert Earthman, and Michael Earthman.

Subsequent to the entry of the divorce decree, Mrs. Earthman and her attorneys sought to have the stock which had been awarded to her transferred into her name on the corporate records of the three corporations. As the result of these efforts, the attorney for the Earthman defendants wrote to Mrs. Earthman’s attorney and advised that before any stock could be transferred as requested, the stock certificates with appropriate stock powers executed by J. B. Earthman, III would have to be presented to the respective corporations. In this letter, which is dated July 22, 1971, the Earthmans’ attorney advised that two stock certificates, one representing 1400 shares of Earthman’s, Inc. and the other 250 shares of Mission, were being held by J. B. Earthman as security for a debt owed by his son, J. B. Earthman, III and that those certificates would not be released until the debt had been paid. The Earthmans’ attorney further advised that the remaining stock in Mission and Resthaven would be transferred when certificates were properly presented to the corporations. Finally, in this letter the Earthmans’ attorney stated that the remaining 600 shares of Earth-man’s, Inc. could not be transferred even if appropriate request were made because Earthman’s, Inc. or its stockholders intended to exercise an option to purchase the stock under a provision of the company’s articles of incorporation.

Apparently as an outgrowth of this letter, Mrs. Earthman filed this suit on August 12, 1971. In her original petition, Mrs. Earthman alleged that the three corporations had refused to transfer to her name the stock which had been awarded to her under the decree, as evidenced by the letter of July 22, 1971, and asked that the court declare her rights and order the proper stock certificates delivered to her. In her petition, she asserted that J. B. Earthman, III should be required to deliver to the corporation such certificates as he might have in his possession so that they might be cancelled or, if lost, that he should be required to take appropriate measures to have this declared so that new certificates might be issued; that as to the certificates which were assertedly the subject of a debt owed by J. B. Earthman, III to his father, J. B. Earthman, that the rights of both of the parties be declared in accordance with the provisions of the divorce decree and that the rights of the parties also be determined with respect to the assertion that Earth-man’s, Inc. or its stockholders had an option to purchase Mrs. Earthman’s stock under the articles of incorporation of that corporation. Mrs. Earthman also sought, as a derivative stockholder right, the return of various items of value which she assertéd had been transferred from the corporations, without consideration, to or for the benefit of individual members of the Earthman family.

After this suit was filed, a hearing was held on November 22, 1971, in the Court of Domestic Relations which had entered the divorce decree, on certain motions for contempt filed by Mrs. Earthman against J. B. Earthman, III. Pursuant to the order of the court on such hearing, signed December 15, 1971, the following corporate certificates and assignments were tendered into the registry of the court:

1. Earthman’s, Inc. stock certificate no. 24 for 700 shares executed in blank by J. B. Earthman, III;
2. Assignment executed in blank by J. B. Earthman, III covering Earth-man’s, Inc. stock certificate no. 2 for 600 shares;
3. Mission Life Insurance Company stock certificate for 250 shares executed by J. B. Earthman, III transferring 162 shares to Mrs. Earthman and 88 shares to Michael Earthman;
4. Mission Life Insurance Company stock certificate no. 24 executed by J. B. Earthman, III in blank covering 163 shares.

The order directed that the necessary instruments to secure the issuance of certificates in lieu of lost certificates for Restha-ven Memorial Gardens stock were to be executed so that upon tender of such instruments certificates might be issued to Mrs. Earthman for 9208 shares and another certificate to her attorneys for 1625 shares.

The order recited that Mission and J. B. Earthman had waived any lien that they might have with respect to the Mission stock certificates and that Mission had agreed, subject to compliance with the provisions of any applicable statutes or regulations, to reissue the Mission stock certificates as follows: 88 shares to Michael Earthman, 48.75 shares to Mrs. Earthman’s attorneys, and 276.25 shares to Mrs. Earth-man.

The court’s order further directed that the two certificates representing 1300 shares of Earthman’s, Inc. were to be held in the registry of the court pending its further order and that the remaining 700 shares in the hands of J. B. Earthman, III were to be held subject to the debt to J. B. Earthman. It provided that J. B. Earth-man, III was enjoined from selling, mortgaging, hypothecating or disposing of these shares without using the entire proceeds of such sale to retire such indebtedness. The order recited that the division of the stock certificates of Mission and Resthaven, as set out in the divorce decree, reflected the 15% contingent fee contract of Mrs. Earthman’s attorneys, which had been found reasonable and approved by the court, and ordered that the certificates tendered into the registry of the court be distributed under that contract: 85% to Mrs. Earthman, and 15% to her attorneys.

The order was approved as to form by the attorneys for Mrs. Earthman, J. B. Earth-man, III, Mission Life Insurance .Company and J. B. Earthman, Jr. It does not appear that the latter two parties had been made nominal parties to the proceedings.

On March 13,1972, pursuant to an agreed motion filed with the divorce court on behalf of Mrs. Earthman and J. B. Earthman, III, an order was entered in the divorce court releasing the stock certificates which had been so tendered into the court’s registry. The certificates were then delivered by the court to the attorney for the Earth-man corporations and according to Mrs. Earthman’s testimony, this was done for the purpose of completing transfer of the stock to her in accordance with the court’s decree. Mrs. Earthman testified that in agreeing to the release of such stock, she relied upon the representation of this attorney and of her former husband, J. B. Earth-man, III that the stock would be transferred to her. She further testified that her husband, J. B. Earthman, III subsequently advised her that “they” were not going to transfer the stock to her.

On March 13,1972, the date the stock was released from the court’s registry, Mrs. Earthman’s attorney wrote to the Earth-mans’ attorney, referring to the court’s order of the same date, and enclosing a lost stock affidavit covering one of the Restha-ven stock certificates. In this letter, Mrs. Earthman’s attorney requested delivery of appropriate stock certificates reflecting her ownership of 1300 shares of Earthman’s, Inc., 10,835 shares of Resthaven Memorial Gardens, and 325 shares of Mission. He acknowledged the provision in the order of November 22, 1971, that 700 shares of Earthman’s, Inc. were to be held and retained as security for the debt of J. B. Earthman, III to J. B. Earthman. The letter concluded with a statement to the effect that should the lost stock affidavit be considered insufficient with respect to the Resthaven stock, all other stock should be delivered forthwith and the Resthaven matter should be resolved “as soon as possible”.

By letter dated April 5, 1972 the Earth-mans’ attorney advised Mrs. Earthman’s attorney that Earthman’s, Inc. was exercising an option to purchase the Earthman’s stock under Article V of its articles of incorporation and that it therefore refused her request to transfer such stock to her. He further advised that Mission was willing to transfer the shares of Mission stock to Mrs. Earthman upon evidence of compliance by her with the provisions of the Texas Insurance Code and other applicable statutes but that it appeared “such provisions of law have not yet been satisfied.” He then advised that the affidavit of loss with respect to the Resthaven certificate was satisfactory but that the corporation had also required a $1,000 lost instrument bond which had not yet been furnished. After making these statements the Earthmans’ attorney stated:

“Since Earthman’s, Inc. has elected to exercise its right of purchase as to its stock which J. B. Earthman, III has now attempted to transfer to your client, it would appear that this is an appropriate time for you and your client to consider the sale of all of the stock which you will receive as a result of the divorce.”

On August 28, 1973, Mrs. Earthman filed her second amended petition, in this suit, alleging that by the letter of April 5, 1972 J. B. Earthman, Resthaven, Mission and Earthman’s, Inc. for themselves and also for the benefit of J. B. Earthman, III and Robert Earthman, undertook to purchase the stock awarded to her under the divorce decree and that they had wholly failed to comply with the terms of said purchase and had instead converted the stock to their own use and benefit, for which she was entitled to recover the fair market value. She alleged that the defendants had acted in a conspiracy to defraud her of her shares of stock and sought damages for the conversion as well as exemplary damages. She further alleged that the defendants had embarked upon a malicious and fraudulent course of action deliberately designed to force her to accept the sum of $200,000 for her stock, knowing such amount to be far below its value and that the defendants had conspired to harass and intimidate her to accept such amount for her interest. She also sought alternative relief in line with the allegations of her original petition.

The case was tried in January 1974 over a period of several weeks. The pertinent issues and instructions submitted to the jury and its responses are as follows:

“Conversion is the wrongful exercise of dominion and control over another’s property in denial of or inconsistent with his rights. To constitute a conversion, it is not necessary that there be a manual taking of the property in question. The unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner’s rights, is in law a conversion. A wrongful refusal by a corporation to transfer stock constitutes a conversion. Fraudulent intent or purpose is not required, and the question of good faith of the convertor is relevant only on the issue of exemplary damages.
“The term ‘wrongful’ as used in this instruction means that an act involved the violation or neglect of some legal duty which the person sought to be charged therewith owes to the person claiming injury at the time and place of the claimed injury. However, good faith is not a defense to the conversion action.
“When a corporation issues capital stock it must deliver to each shareholder one or more certificates representing such stock signed by the president or vice president of the corporation, and also signed by the secretary or an assistant secretary of the corporation. Transfers of ownership of shares of stock by shareholders are accomplished by the execution by the shareholder in whose name the certificate representing such shares stands of a written assignment, either upon such certificate or upon an assignment separate from such certificate, which written assignment directs the corporation to transfer shares represented by the certificate to the person or persons named in such assignment, and the delivery by the shareholder making the transfer to the person receiving the transfer of the certificate and the assignment thereof.
“A corporation is liable for wrongs committed by its officers when they are done within the scope, or apparent scope, of the officer’s authority, and bound by declarations or admissions of an officer when made within his authority.
“You are instructed that the terms malice or maliciously mean the ill will, bad or evil motive, or such gross indifference to the rights of others as amounts to willful or wanton acts.
“You are instructed that corporations can only act through their employees or agents and corporations are bound by the actions of their employees or agents when such actions are performed in the course and scope of their employment or agency. The authority to perform such acts may be express or implied as long as the employee or agent is engaged in service of the corporation and in the furtherance of its business, whether on its premises or elsewhere.
“A fact may be established by direct evidence or by circumstantial evidence or both. A fact is established by direct evidence when proven by witnesses who saw the act done or heard the words spoken or by documentary evidence. A fact is established by circumstantial evidence when it may be fairly and reasonably inferred from other facts proven.”
SPECIAL ISSUE NO.l
“Do you find from a preponderance of the evidence that Defendants converted Dorothy Monroe Earthman’s stock in Earthman’s, Inc. on April 5, 1972?
“Answer ‘We do’ or ‘We do not’ for each Defendant listed. Consider this issue separately as to each Defendant listed below.
“Earthman's, Inc. we do
Robert Earthman we do
J. B. Earthman we do
J. B. Earthman, III we do
“If you have answered Special Issue No. 1 ‘We do’ and only in that event, then answer:
SPECIAL ISSUE NO. 2
“What do you find, from a preponderance of the evidence, was the fair market value of Dorothy Monroe Earthman’s stock in Earthman’s, Inc. on April 5, 1972?
“The ‘fair market value’ of corporate stock is the price which a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell, and both having full knowledge of all pertinent facts.
“Answer by stating the amount in dollars and cents.
"ANSWER: $325,000.00_
SPECIAL ISSUE NO. 3
“Do you find from a preponderance of the evidence that the Defendants converted Dorothy Monroe Earthman’s stock in Mission Life Insurance Company on April 5, 1972?
“Answer ‘We do’ or ‘We do not’ for each Defendant listed. Consider this issue separately as to each Defendant listed below.
"Mission Life Insurance Company we do
Robert Earthman we do
J. B. Earthman we do
J. B. Earthman, III we do
“If you have answered Special Issue No. 3 ‘We do’, and only in that event, then answer:
SPECIAL ISSUE NO. 4
“What do you find, from a preponderance of the evidence, was the fair market value of Dorothy Monroe Earthman’s stock in Mission Life Insurance Company on April 5, 1972?
“The ‘fair market value’ of corporate stock is the price which a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell, and both having full knowledge of all pertinent facts.
“Answer by stating the amount in dollars and cents.
"ANSWER: $110,700.00_
SPECIAL ISSUE NO. 5
“Do you find from a preponderance of the evidence that the Defendants converted Dorothy Monroe Earthman’s stock in Resthaven Memorial Gardens, Inc. on April 5, 1972?
“Answer ‘We do’ or ‘We do not’ for each Defendant listed. Consider this issue separately as to each Defendant listed below.
"Resthaven Memorial Gardens, Inc. we do
J. B. Earthman we do
Robert Earthman we do
J. B. Earthman, III we do
“If you have answered Special Issue No. 5 ‘We do’, and only in that event, then answer:
SPECIAL ISSUE NO. 6
“What do you find, from a preponderance of the evidence, was the fair market value of Dorothy Monroe Earthman’s stock in Resthaven Memorial Gardens, Inc. on April 5, 1972?
“The ‘fair market value’ of corporate stock is the price which a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell, and both having full knowledge of all pertinent facts.
“Answer by stating the amount in dollars and cents.
"ANSWER: $211,000.00."

The Earthman defendants first argue that Mrs. Earthman’s claim of conversion is barred by the two year statute of limitations, Article 5526, Vernon’s Tex.Rev.Civ. StatAnn. They point to the allegations in Mrs. Earthman’s original petition, filed more than two years prior to the date of her second amended petition, wherein she alleged a failure and refusal on the part of the defendants to issue stock certificates evidencing her ownership in the three corporations. They assert that these allegations showed an awareness on her part that the corporations were then refusing to hon- or her'rights as a stockholder.

In our opinion the record does not support the contention of the Earthman defendants that Mrs. Earthman had a legal .basis for asserting a conversion of her stock prior to April 5, 1972. As evidenced by the approved order entered in the divorce proceedings, the stock certificates in question were voluntarily placed in the registry of that court. Until such time as the stock certificates, with properly executed stock powers attached, were released from the registry of the court and presented for transfer to the respective corporations, Mrs. Earthman was without legal standing to require the corporations to effectuate the transfer on its books and to reissue to her stock certificates evidencing her ownership. It was not until April 5, 1972, that the corporations through their attorney assumed a legal posture with respect to the requested transfers which if taken in error, might subject the corporations to potential liability for conversion. Until that time there was not such a distinct and unequivocal refusal to effectuate such transfer as would have originated a cause of action for conversion. We hold that the trial court properly determined, as a matter of law, that the action for conversion was not barred by the two year statute of limitations. Kent v. National Supply Co. of Tex., 36 S.W.2d 811 (Tex.Civ.App.—Waco 1931, writ ref’d).

The Earthman defendants next contend that there was no conversion on April 5, 1972 because they had reasonable excuse or probable cause for their actions. They point out the general rule that a corporation is not liable for damages for conversion where it refuses to issue or transfer stock, unless its refusal is without legal justification or excuse.

The legal justification for the refusal to effectuate transfer of the 1300 shares of capital stock of Earthman’s, Inc. was based upon a provision of Article V of the articles of incorporation of that company which provides as follows:

“The shares of stock of the corporation are to be held by each shareholder upon the condition that he will not sell, assign, transfer, pledge or in any way dispose of or encumber any of such shares without first offering (in writing, mailed to the Corporation’s office) the same for sale to the Corporation which shall have the right to purchase all or any portion of such shares within sixty (60) days from the date of the offer. ... If for any reason the Corporation does not purchase any shares of stock which it has the right to purchase under any provision of this Article, the remaining shareholders of the Corporation so electing shall have the right to purchase all or any portion of such shares (prorata, according to their stock ownership, or as they may otherwise agree) within ten (10) days following the end of the time during which the Corporation had the right to purchase such shares under this Article. The price for purchase of shares of stock under any provision of this Article shall be the book value of such shares as at the close of the month preceding the date of the offer . such book value to be determined by the certified public accountants serving the Corporation at such time, in accordance with the accounting practices followed in preparing the most recent annual financial statement to the corporation. Such purchase price shall be paid in cash forthwith after notification of the election to purchase or, at the option of the purchaser, 20% of the purchase price may be so paid in cash and the balance may be paid in no more than four equal annual installments with interest at the rate of 6% per annum.”

In the letter of April 5, 1972 counsel for Earthman’s, Inc. stated that Earthman’s, Inc. construed the delivery of the two certificates representing 1300 shares of the company stock as an attempt by J. B. Earthman, III to transfer stock to Mrs. Earthman in derogation of Article Y, that the company was therefore entitled to purchase such stock at book value and that it exercised its right and option to purchase such stock on terms as stated in the article.

A provision which restricts a stockholder’s right to sell or transfer his stock, particularly one which affords a prior right of purchase to the corporation or to another stockholder, is not looked upon with favor in the law and is strictly construed. Casteel v. Gunning, 402 S.W.2d 529 (Tex.Civ.App.1966, writ ref'd n. r. e.); Gulf States Abrasive Manufacturing, Inc. v. Oertel, 489 S.W.2d 184 (Tex.Civ.App.—Houston [1st], 1972, writ ref'd n. r. e.). It has generally been held that such a restriction is inapplicable to a transfer occurring as a result of an involuntary sale or by operation of law unless by specific provision in the restriction it is made applicable. 18 C.J.S. Corporations § 391 (1989); 2 A.L.R.2d 745, 754, Restrictions on Corporate Stock.

In Messersmith v. Messersmith, 229 La. 495, 86 So.2d 169 (1956), it was contended that certain community owned stock should not be divided in kind, as decreed by the divorce court, and that the husband should be permitted to retain the stock and to pay his wife one-half its book value in accordance with a restrictive clause in the corporate charter requiring a stockholder, who wished to sell his stock, to first offer it to the other stockholders or officers of the corporation. The Louisiana Supreme Court determined that the restrictive provision of the charter could not prevent the recognition of the wife’s share of ownership in the corporation and held that she was entitled to have delivered to her in kind the interest awarded to her under the divorce decree. In so holding that court stated:

. . The restriction in the charter cannot affect the status of the stock purchased during the existence of the community or the rights the wife may assert thereunder. Such a restriction cannot negative the wife’s present interest as a co-owner, and as a co-owner in community she is clearly entitled to be recognized as such and obtain the exclusive management and control of her vested interest, (citing cases).” (86 So.2d p. 173)

We are of the opinion that the restrictive provision in question should hot be construed so as to preclude Mrs. Earthman’s right to have her shares of ownership reflected on the books of the corporation and to have the stock certificates evidencing her ownership issued to her. We hold that the trial court properly determined that this provision did not afford to the corporation the right or option to purchase the shares of Earthman’s, Inc. so awarded to Mrs. Earth-man.

In the letter of April 5,1972 the attorney for the Earthman defendants did not indicate absolute refusal on the part of Mission Life Insurance Company and Resthaven Memorial Gardens, Inc. to transfer to Mrs. Earthman the shares of stock in those corporations awarded to her but merely deferred action on her request pending receipt of further transfer documents. We quote the two pertinent paragraphs from this letter as follows:

“Turning now to the 325 shares of Mission Life Insurance Company stock which James B. Earthman, III was directed to transfer to Dorothy Monroe Earthman by virtue of the above mentioned final decree of divorce, please be advised that Mission Life Insurance Company is ready, willing and able to transfer said shares of stock to Dorothy Monroe Earthman upon evidence of compliance by her with the provisions of the Texas Insurance Code and other statutes applicable to insurance company stock. It would appear that all of such provisions of law have not yet been satisfied, and we are therefore holding in abeyance your request for transfer of the shares pending such compliance.
“This brings us finally to the matter of 10,833 shares of capital stock of Restha-ven Memorial Gardens, Inc., which James B. Earthman, III was directed, in the above mentioned decree of divorce, to transfer to Dorothy Monroe Earthman. The records of Resthaven Memorial Gardens, Inc. reflect that as at this date James B. Earthman, III is the owner of 16,666 shares of its capital stock, represented by certificate No. 114. The affidavits you have submitted are acceptable as satisfactory proof that said certificate No. 114 has been lost; however, you will recall that as counsel to the Corporation we had indicated a requirement for a $1,000.00 lost instrument bond, which bond has not yet been furnished. It would appear to me that J. B. Earthman, III and Dorothy Monroe Earthman should be co-principals on such bond, and I am certain that you will have no difficulty in obtaining it and furnishing it to us, at which time we will effect the reissue of substitute certificates in the respective numbers of shares you have requested.”

As to Mission Life Insurance Company stock the Earthman defendants contend that Article 21.49-1 of the Texas Insurance Code, V.A.T.S., constituted a possible impediment to the transfer of that stock, particularly as to that portion which was to be ultimately transferred to Mrs. Earthman’s attorney under their contingent fee agreement. The Earthmans’ attorney testified he looked at all the corporate records of Mission and found no restrictions on the transfer of the stock and had advised the corporate officers that it should be transferred on proper presentation of the certificates. The stock was in fact transferred on the books of the corporation into Mrs. Earthman’s name three or four days prior to the first day of trial. The trial court refused to permit the jury to hear the contents of the statute or to receive testimony concerning its content. We perceive no provision in Article 21.49-1 of the Texas Insurance Code which would prevent the transfer to Mrs. Earthman of her shares of stock as determined by the divorce decree and this is all that was requested by her attorney in his letter of March 13, 1972. Under the circumstances we believe the trial court properly determined that the statute did not constitute a legal justification for refusal to transfer Mrs. Earthman’s shares in Mission Life Insurance Company to her and we cannot say the court erred in its refusal to permit the jury to know the contents of the statute.

Under the nature of the request made by Mrs. Earthman’s attorney for the transfer of the Resthaven stock, we believe the trial court erred in refusing to determine, as a matter of law, that the response of the Earthman defendants contained in the letter of April 5, 1972 constituted legal justification for its action in requiring a lost instrument bond in addition to the documents previously furnished. The letter of request written by Mrs. Earthman’s attorney dated March 13, 1972 recognized the possibility that the lost stock affidavit might not be sufficient to permit the transfer of such stock and asked only that the matter be resolved as soon as possible. Upon the evidence before us we hold that this request could not be considéred such an unequivocal demand for transfer as would constitute a legal basis for an action for conversion. It, therefore, becomes unnecessary for us to consider the further contention of the Resthaven defendants that the tender and acceptance of the Resthaven stock by Mrs. Earthman’s attorney in December 1972 precluded her recovering other than special or nominal damages.

The Earthman defendants next contend that Mrs. Earthman’s recovery should be limited to her special damages, arguing that there was only a potential conversion of her stock certificates as distinguished from her stock interest. They contend that neither the letter of April 5,1972 nor other conduct on their part deprived Mrs. Earthman of her beneficial stock ownership. In related argument, they contend that the trial court erred in instructing the jury that the question of their good faith was relevant only as to the issue of exemplary damages and in refusing to give appropriate instructions with reference to a transfer agent’s duties.

A refusal of a corporation to transfer record ownership of corporate stock may, under appropriate circumstances, result in liability of the corporation for damages as a conversion of the stock. Prudential Petroleum Corp. v. Rauscher Pierce & Co., 281 S.W.2d 457, 461 (Tex.Civ.App.—Dallas, 1955, writ ref’d n. r. e.); Bower v. Yellow Cab Co., 13 S.W.2d 708 (Tex.Civ.App.—El Paso, 1929, writ ref’d). In Powell v. Forest Oil Corporation, 392 S.W.2d 549 (Tex.Civ.App.—Texarkana, 1965, no writ), the general rule is stated as follows:

“To constitute conversion, there must be an intent on the part of the defendant to assert some right in the property. Wrongful intention is not essential, however; nor is it material, except as to the question of damages, that the defendant acted in good faith or under a mistaken belief as to his rights. 14 Tex.Jur.2d, Sec. 3, p. 11.”

If under the circumstances existing at the time of the letter of April 5, 1972 there was no legal justification for the refusal of the Earthman corporations to immediately effectuate the transfer of Mrs. Earthman’s shares to her, the fact that they may have relied upon advice of counsel or that they innocently believed their actions to be justified, would not constitute a legal defense to an- action for conversion. Kolp v. Prewitt, 9 S.W.2d 490 (Tex.Civ.App.—Fort Worth, 1928, no writ); White-Sellie’s Jewelry Co. v. The Goodyear Tire & Rubber Co., 477 S.W.2d 658, 662 (Tex.Civ.App.—Houston [14th], 1972, no writ).

There are, however, circumstances in this case bearing upon the motives of the Earthman defendants which could properly have been considered by the jury in deciding the issues of liability and damages. The beneficial ownership of Mrs. Earthman in the three corporations was never denied by the Earthman defendants, who at all times conceded her ownership of the stock, subject to the claims and requirements asserted in their attorney’s letter of April 5, 1972. While an absolute refusal to transfer possession of property to one entitled thereto has been held to constitute a conversion, a qualified refusal based upon a reasonable qualification or requirement has been said not to constitute a conversion per se, provided that such refusal is made in good faith. 18 Am.Jur.2d, Conversion, Sec. 44, pp. 184-185.

“Where the refusal is not absolute, but is qualified by certain conditions which are reasonable and justifiable, and which are imposed in good faith, and in recognition of the rights of plaintiff, it will not serve as a sufficient basis for an action for conversion. The conditions, however, must have a legal foundation, or rest on a reasonable doubt as to the validity of plaintiff’s claim, or be based on a reasonable doubt as to defendant’s duty under the circumstances. Where the qualified or conditional refusal is not reasonable or justifiable under the circumstances, and amounts to a denial of plaintiff’s rights in the property, it will be sufficient to sustain an action for conversion, and it is for the jury, under proper instructions from the court, to pass on the existence of the qualification and its reasonableness . ” 89 C.J.S. Trover & Conversion § 59b, pp. 564-565.

In United North & South Development Co. v. Rayner, 124 F.2d 512, 513 (5th Cir.1942, cert. den. 316 U.S. 665, 62 S.Ct. 945, 86 L.Ed. 1741 (1942), a case heavily relied upon by the Earthman defendants, the evidence established that the corporation had refused, on advice of counsel, to transfer certain stock to the plaintiff because of an existing controversy as to its ownership and because of the pendency of guardianship proceedings which might have changed the status of the stockholder to that of a creditor. The question on appeal was whether or not probable cause had existed to justify the refusal of the transfer, the trial court having concluded that one of the claimants to the stock, who owned a major part of the company’s stock, had controlled the actions of the corporate officers in refusing the transfer and that there was no reasonable basis for the company’s refusal. The Fifth Circuit Court of Appeals, in reversing the trial court’s judgment, stated their view that the plaintiff should be relegated to a mandamus, an injunction, a suit for specific performance or other proceeding in which the title to the stock could be determined, and held:

“The officers of the appellant acted upon the advice of reputable counsel, and it cannot be said that they were arbitrary or that the right of plaintiff to have the transfer was free from doubt.”

In the present case Mrs. Earth-man’s original action for declaratory judgment made reference to the letter of the attorney for the Earthman defendants dated July 22, 1971 and asked that the parties’ rights with respect to the matters therein asserted be judicially determined and declared. The issues having been joined as to the legal determination of the parties’ respective rights and duties as to the shares of stock beneficially owned by Mrs. Earth-man, the question of whether the Earthman corporations subsequently acted arbitrarily and without reasonable grounds in refusing' to transfer the stock as requested became a vital inquiry in the case. Had, for example, Earthman’s, Inc. initiated a bill of inter-pleader and placed the Earthman’s, Inc. stock in the registry of the court pending judicial determination of the legal effect of the restrictive provision in the articles of incorporation, it could hardly be said that its subsequent refusal to complete the transfer on its books, pending such determination, would have constituted a conversion authorizing recovery of the full market value of the stock. Smith v. Texas & N. O. R. Co., 101 Tex. 405, 108 S.W. 819, 821 (1908). The action for declaratory relief was brought by Mrs. Earthman for the purpose of having her rights with respect to this stock determined and declared. Whether, after the filing of this action and during its pendency the Earthman defendants acted arbitrarily and without reasonable basis in refusing the requested transfer is a question requiring a factual consideration of the entire relationship between the parties. There was evidence tending to show that after the stock was released from the registry of the court, a meeting was held between J. B. Earthman and his sons, Michael, Robert and J. B. Earthman, III. Mrs. Earthman testified that her former husband, J. B. Earthman, III, told her that it had been decided at such meeting that her stock was worth $200,000.00 and that that was the amount she was to be offered for it. She testified that she was also told she would never be paid a salary or a dividend on her stock and that if she didn’t take the offer, false charges would be trumped up against her. This testimony was relevant and material to the jury’s determination- of whether Earthman’s, Inc. was guilty of conversion in refusing to transfer the stock as requested. Whether or not Earthman’s, Inc., acted in good faith and upon reasonable grounds under the circumstances existing at the time of the letter of April 5,1972, was an appropriate consideration for the jury.

In similar vein the jury was called upon to determine whether Mission Life Insurance Company acted in good faith and upon reasonable grounds in requiring compliance with appropriate statutes and laws as stated in the letter of April 5,1972. This determination required the jury to consider not only the legal relationship of the parties but as well the entire set of circumstances affecting their relationship at the time of the letter of April 5, 1972.

The trial court’s charge erroneously instructed the jury that the question of good faith was relevant only on the issue of exemplary damages and that good faith was not a defense to the conversion action. The trial court also erred in refusing the requested instruction that a corporation might delay transfer for a reasonable period of time in order to ascertain whether the transfer was authorized or whether it would result in some violation of a law, by-law or of its articles of incorporation. A refusal to deliver property on request may be justified in order to secure reasonable time to investigate the rights of the parties and in an appropriate case, no conversion results if such is made in a good faith effort to resolve a doubtful matter. Sandford v. Wilson, 2 Willson, Civ. Cases Ct. of App., §§ 247-250; Roberts v. Yarboro, 41 Tex. 449 (1874). An examination of the record in its entirety, including the argument of counsel, leads us to the conclusion that the court’s charge probably resulted in erroneous and improper deliberations of the jury with respect to the basic issues of whether there had been an unjustifiable detention of Mrs. Earthman’s stock and of the damages, if any, to which she was entitled. We, therefore, must order the judgment reversed and remanded for new trial. McDonald, Texas Civil Practice, Vol. 3, Sec. 12.37.3, pp. 449-450. In so holding we express no opinion as to the points of error attacking the legal and factual sufficiency of the evidence to support the jury’s findings on these issues.

In view of the necessity of another trial, we believe it appropriate to express our views with respect to certain other matters raised upon this appeal.

The Earthman defendants object to the court’s charge on the issues of conversion as being duplicitous and an improper submission as to the vicarious liability of each of the individual defendants. Since we have determined the ease must be reversed and remanded it is unnecessary that we determine whether such complaint has been properly preserved. While we do not necessarily approve the form of the charge as submitted, we point out that where corporate directors and officers actively participate in the conversion of another’s property by instigating, aiding or abetting the corporation, they may be held liable as joint tortfeasors with the corporation. Bower v. Yellow Cab Co., 13 S.W.2d 708, 710 (Tex.Civ.App.—El Paso, 1929, writ ref’d). An officer who actively participates with the corporation in the conversion may be held personally responsible, not solely by reason of his corporate office, but because of his active participation in the tortious act. Lone Star Mining Co. v. Texeramics, Inc., 363 S.W.2d 868 (Tex.Civ.App.—Eastland, 1962, writ ref’d n. r. e.); Permian Petroleum Co. v. Barrow, 484 S.W.2d 631 (Tex.Civ.App.—El Paso, 1971, no writ).

The various matters-which the Earthman defendants charge as errors in the conduct of trial will probably not occur in a second trial. However, we briefly allude to some of these.

We do not regard as error the trial court’s ruling which allowed evidence of communications between Mrs. Earthman and her former husband, J. B. Earthman, III, based on conversations prior to and after their divorce. This testimony insofar as relevant to the existing controversy between them was admissible notwithstanding the marital privilege. McCormick & Ray, Texas Law of Evidence, Sec. 497 (1956); Conley v. St. Jacques, 110 S.W.2d 1238 (Tex.Civ.App.—Amarillo, 1937, writ dismissed).

We are further of the view that evidence of Mrs. Earthman’s remarriage and divorce was properly excluded by the trial court’s ruling. We fail to see the materiality or the relevancy of this testimony even as impeachment testimony to permit the jury to “evaluate her true motivations and testimonial posture.”

A more serious question of admissibility is raised by the admission of certain testimony by which it was intended to prove that the Earthman defendants, acting through Michael Earthman and J. B. Earth-man, III, had employed certain individuals to harass Mrs. Earthman, most notably by arranging her arrest on false felony charges. Through deposition testimony of J. B. Earthman, III and Michael Earthman it was shown that one George Nors worthy had been retained by Earthman’s, Inc. and Resthaven Memorial Gardens, Inc. By the testimony of Michael Earthman it was shown that Nors worthy had worked as an accountant for the Earthman corporations and had on one occasion brought to Michael Earthman evidence tending to implicate Mrs. Earthman in the sale of stolen property. Michael Earthman testified he did not know why Norsworthy had given this information to him, that he did not pay Nor-sworthy for it, and that he simply received the documents and put them in his safe. A witness named Forrest F. Baird then testified that at the request of Norsworthy he had contacted a man named C. E. Easley several times during March 1972. (Michael Earthman had testified that Baird had never represented any of the Earthman defendants but that he had once met Baird at the home of Norsworthy.) Upon this predicate Easley was permitted to give testimony, over the defendants’ objections, with respect to his conversations with Baird and with J. B. Earthman, III. The jury was instructed to consider this testimony only as to J. B. Earthman, III and as impeachment of the prior testimony of Michael Earth-man.

Easley testified that he was a former police officer employed as an investigator for Mrs. Earthman’s attorney and that in March 1972 he had received a telephone call from Baird whom he knew only casually. He said Baird had inquired whether Easley could arrange to have Mrs. Earthman arrested on a charge of driving while intoxicated and whether stolen property or marijuana could be placed in her car without her knowledge. He testified that Baird told him that these things were to be done to pressure Mrs. Earthman into selling her stock and that Norsworthy and Michael Earthman had asked him to do this. He testified that Baird told him that Norswor-thy in turn had told Baird that Norsworthy had been retained by the Earthmans, specifically Michael Earthman and J. B. Earth-man, III. At the suggestion of Mrs. Earth-man’s attorney, Easley had made tape recordings of his conversations with Baird but the tapes were not played before the jury. Easley also testified that after Baird had spoken with him he arranged to meet with J. B. Earthman, III who was aware that Easley had worked for his former wife’s attorney and that Earthman had told him that since his former wife would not sell her stock something had to be done and that before the conversation terminated Earthman, who had become quite drunk, stated, “he would like to have her taken care of, he would like to have her rubbed out or something.” We cannot say that the statements made to Easley by J. B. Earth-man, III, a party defendant, were improperly received in evidence since they were in the nature of admissions by a party opponent. 2 McCormick & Ray, Texas Law of Evidence, Sec. 1121 et seq. (2d ed. 1956). However, the statements purportedly made to Easley by Baird present a more difficult problem. Ordinarily evidence that others have stated to the witness that a certain admission has been made by one of the parties to a suit, is inadmissible, 1 McCormick & Ray, Texas Law of Evidence, Sec. 792 (2d ed. 1956); Ferguson v. Coleman, 208 S.W. 571 (Tex.Civ.App.—Texarkana, 1919, no writ). In our opinion the hearsay testimony of Baird was inadmissible unless it was shown that he was an authorized agent speaking on behalf of one or more of the Earthman defendants. Big Mack Trucking Company, Inc. v. Dickerson, 497 S.W.2d 283 (Tex.1973). There was no evidence of authority having been given to Baird to speak on behalf of any of the Earthman defendants and the circumstantial evidence that Michael Earthman had on one occasion received incriminating documents from Nor-sworthy coupled with Baird’s statement that he had contacted Easley at the request of Norsworthy, does not in our opinion rebut the presumption of lack of such authority. Big Mack Trucking Co., Inc. v. Dickerson, supra; Sec. 287 Restatement of Agency. In view of the nature of this testimony, it is difficult to perceive the extent of its prejudicial effect upon the jury’s verdict. However, we assume the matter will be appropriately dealt with on another trial.

We finally arrive at a consideration of the matter of the exemplary damages. In this connection, we also consider Mrs. Earthman’s cross-point that the trial court erred in disregarding the jury’s findings with respect to her claim of wilful harassment and intimidation. The jury found that the Earthman defendants had harassed and attempted to intimidate Mrs. Earthman with the intent of forcing her to accept less than the fair value of her stock; that such actions were done wilfully and maliciously; that Mrs. Earthman had sustained mental anguish as a result of such actions; that the sum of $150,000.00 would fairly compensate her for such injuries, and that she should also have, as exemplary damages, an equivalent sum.

Contrary to the assertion of the Earthman defendants we are of the view that in an appropriate case and upon proper pleading and proof exemplary damages may properly be awarded in a stock conversion case. The extent to which such punitive damages may be justified depends of course upon the degree of “malice” or wilful wrong in the act of conversion. It is not essential that “malice” be shown where it is established that some special loss or damage has been sustained by reason of some wilful or wanton act based upon improper motive. Lack’s Stores, Inc. v. Waisath, 479 S.W.2d 406 (Tex.Civ.App.—Waco, 1972, no writ). Under such circumstances the jury may properly consider, among other factors, the mental anguish of the party injured as well ás reasonable attorney’s fees, inconvenience and other such items as naturally result from such improper conduct. Lack’s Stores, Inc. v. Waisath, supra; Security State Bank v. Spinnler, 55 S.W.2d 128 (Tex.Civ.App.—Amarillo, 1932, writ dism’d).

While evidence of mental suffering might properly be considered by the jury with respect to the exemplary damage issues, it does not in our opinion constitute a basis for recovery of damages in an independent cause of action for wilful harassment and intimidation. Harned v. E-Z Finance Co., 151 Tex. 641, 254 S.W.2d 81 (1953); Daniels v. Conrad, 331 S.W.2d 411, 417 (Tex.Civ.App.—Dallas, 1960, writ ref’d n. r. e.). Damages for mental suffering have been held recoverable without necessity of showing actual physical injury in a case of wilful invasion of right of privacy since that is “a right distinctive in itself and not incidental to some other recognized right for breach of which an action for damages will lie.” Billings v. Atkinson, 489 S.W.2d 858 (Tex.1973). In our view the trial court properly disregarded the jury’s verdict on the issues based upon the claim for malicious harassment and intimidation. Fisher v. Carrousel Motor Hotel, Inc., 424 S.W.2d 627, 630 (Tex.Sup.1968).

The judgment of the trial court is ordered reversed and remanded for further proceedings consistent with this opinion.


text:
    Maria DELGADILLO et al., Appellants, v. TEX-CON UTILITY CONTRACTORS, INC., Appellee.
    No. 18648.
    Court of Civil Appeals of Texas, Dallas.
    July 10, 1975.
    Rehearing Denied Aug. 7, 1975.

      William A. Barber, Jr., Dallas, for appellants.
    Webber W. Beall, Jr., Touchstone, Bernays & Johnston, Dallas, for appellee.
   AKIN, Justice.

Maria Delgadillo, Juana Macias and Maria Sosa, individually and as next friend for their minor children, sued Tex-Con Utility Contractors, Inc. to recover exemplary damages, as authorized by Tex.Const. art. XVI, § 26 and Tex.Rev.Civ.Stat.Ann. art. 8306, § 5 (Vernon 1967) for the deaths of plaintiffs’ husbands and parents. Plaintiffs had previously received death benefits under the Texas Workmen’s Compensation Act. The deceased employees were killed while working at the bottom of an eighteen-foot manhole in a trench when a large rock collapsed into the excavation. The jury found in answer to special issues that defendant’s failure to perform specific acts did not constitute gross negligence and that each deceased employee voluntarily assumed the risk of working in the manhole without shoring or bracing. The trial court entered a judgment based upon the jury’s verdict and plaintiffs bring this appeal.

We are presented with two principal questions. First, was there any evidence of gross negligence on the part of defendant? Secondly, did the trial court err in excluding from evidence certain photographs depicting the excavation site after the cave-in and during rescue operations? We answer these questions in the negative and, therefore, affirm the judgment of the trial court.

Gross Negligence

Plaintiffs argue that the trial court erred in failing to submit special issues which, if submitted to the jury and answered in the affirmative, would constitute gross negligence. These issues are: (1) Whether or not defendant failed to provide rules and regulations for the safety of the deceased employees; (2) whether or not the defendant failed to warn the deceased employees of the hazards of their employment; (3) whether or not defendant failed to furnish the deceased employees with safe machinery or instrumentalities with which to labor; (4) whether or not plaintiff failed to furnish the deceased employees with a reasonably safe place to work; and (5) whether or not plaintiff left supervision of the subject excavation under the control of an incompetent employee on the occasion in question. Defendant, in its first counterpoint argues, however, that no gross negligence exists as a matter of law. We agree. A complete review of this record compels our conclusion that there was no gross negligence on the part of defendant.

The Texas Supreme Court in Armco Steel Corp. v. Jones, 376 S.W.2d 825, 828 (1964) approved the test for recovery of exemplary damages for gross negligence first enunciated in Missouri Pacific R.R. v. Shuford, 72 Tex. 165, 10 S.W. 408 (1888). That test is as follows:

Gross negligence, to be the ground for exemplary damages, should be that entire want of care which would raise the belief that the act or omission complained of was the result of a conscious indifference to the right or welfare of the person or persons to be affected by it. [Emphasis by Supreme Court.]

The Supreme Court in Armco Steel held that to constitute gross negligence the negligent act must be positive or affirmative rather than merely passive or negative. The court further observed that to warrant exemplary damages for gross negligence there must have been some wilful misconduct or that entire want of care which would raise the presumption of a conscious indifference to consequences. Accord, Loyd Electric Co. v. DeHoyos, 409 S.W.2d 893 (Tex.Civ.App.—San Antonio 1966, writ ref’d); Ballenger v. Mobil Oil Corp., 488 F.2d 707 (5th Cir. 1974); cf. Clements v. Withers, 437 S.W.2d 818 (Tex.1969). In Woolard v. Mobil Pipe Line Co., 479 F.2d 557, 565 (5th Cir. 1973), the Court of Appeals for the Fifth Circuit discusses Texas law in detail and states: “As these cases indicate, the Texas view of gross negligence contemplates something just short of intentional wrongdoing.” Id. at 565.

This record discloses no evidence of any wilfulness, wantonness, malice or conscious indifference to the welfare of any employees. To the contrary, the evidence is undisputed that defendant affirmatively exercised numerous safety precautions for the protection of its employees. - The record reveals that defendants removed the topsoil from the excavation site and constructed the manhole in which the deceased employees were working so that the walls of rock were at the ninety-degree angle of repose as recommended by various excavation safety codes and as practiced by the industry. The defendant provided shoring and bracing materials for use on the job site; it instructed an employee to stand at ground level and watch the men while they were working; it required all employees, including the deceased employees to wear hard hats and it provided an employee to translate safety instructions and other information from English into Spanish for the benefit of the employees. Furthermore, defendant provided an adequate job crew with extra men thereby permitting employees to rest frequently during excavation. Immediately before the collapse, the job superintendent went into the excavation to inspect the walls. This evidence negates any conscious indifference to the safety and welfare of its employees and, therefore, defendant did not commit gross negligence.

Moreover, the burden of proof is upon plaintiffs to prove that defendant knew of the danger and consciously failed or neglected to take precautions. Texas Pacific Coal & Oil Co. v. Robertson, 125 Tex. 4, 79 S.W.2d 830 (1935); Bennett v. Howard, supra. The record reveals that defendant could not reasonably have foreseen that this accident would occur. One witness described the collapse as a “freak accident.” Furthermore, as noted supra, defendant’s superintendent, who had over thirty-one years in the earth-excavation business and who was familiar with this type of rock, descended into the manhole immediately prior to the accident in question. He testified that he did not foresee any kind of a problem that would indicate the rock might fall into the excavation or any other accident that might occur. We hold, therefore, that plaintiffs failed to prove that defendant knew of the danger and failed to take precautions. Since we have concluded that there exists no gross negligence as a matter of law, the trial court was not in error in refusing to submit the additional issues requested by plaintiffs.

Exclusion of Photographs

Plaintiffs contend that the trial court erred in failing to admit into evidence certain photographs depicting the excavation site after the cave-in and during rescue operations. The purpose of plaintiffs’ tender of these pictures into evidence was to show the manhole, the rock that fell in, and the type of rock in which the manhole was being dug. There were, however, numerous photographs admitted into evidence which show the same physical characteristics of the excavation site that the excluded photographs reveal. In limiting the evidence bearing upon facts adequately shown by other proof, the trial court did not abuse its discretion. Stallings v. Hullum, 79 Tex. 421, 423, 15 S.W. 677 (1891); Galveston, H. & S. A. Ry. v. Matula, 79 Tex. 577, 580, 15 S.W. 573 (1891); Railroad Commission v. Shell Oil Co., 369 S.W.2d 363, 373 (Tex.Civ.App.—Austin 1963), aff’d, 380 S.W.2d 556 (Tex.1964); Pozos v. Rivero, 225 S.W.2d 1017, 1018 (Tex.Civ.App.—San Antonio 1949, no writ); 2 C. McCormick & R. Ray, Texas Evidence § 1465 (2d ed. 1956).

Plaintiffs further argue that the trial court erred in refusing to admit into evidence certain deposition testimony of Clarence Maas, the defendant’s foreman, in which he stated that a seam in a rock formation usually causes a cave-in and that the collapse here probably resulted from such a seam. We need not consider this contention because even if exclusion of this testimony was error, it was harmless error. This is true because the excluded hypothetical testimony does not prove gross negligence as plaintiffs failed to offer any evidence that the defendant was aware of such a seam and failed to initiate appropriate safety precautions. In fact, Maas’s testimony supports the defendant’s position that none of its employees had knowledge of any dangerous condition which existed on the excavation site.

We need not pass on the question of alleged jury misconduct in view of our holding that there was no gross neligence.

For the reasons stated, judgment of the trial court is affirmed.

      . The jury found that defendant failed to give the deceased employees written instructions for shoring or bracing the excavation; failed to have screw jacks in the excavation; failed to shore or brace the side of the excavation; failed to obtain an engineering analysis of the substrata’s ability to resist shelving and allowed the deceased employees to work with air hammers in the excavation.