author: AKIN, Justice.

text:
    Jerry A. WHATLEY, Appellant, v. NATIONAL BANK OF COMMERCE, Appellee.
    No. 19196.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 10, 1977.

      Raymond A. Enstam, Dallas, for appellant.
    Mark C. Clements, Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellee.
   AKIN, Justice.

This is an appeal from a summary judgment rendered in favor of counterdefen-dant National Bank of Commerce. The bank originally sued Whatley on a note. On September 27, 1976, Whatley filed a counterclaim alleging several causes of action against the bank. A jury trial on the original action resulted in a judgment in favor of the bank which is not complained of here. Subsequently, the bank filed a motion for summary judgment alleging that the causes of action stated in the counterclaim were barred by the statute of limitations. Neither side presented any summary judgment evidence. We hold that Whatley’s petition does not affirmatively show that the claims for money had and received, usury, failure of consideration, and fraud are barred by the statute of limitations. Accordingly, we reverse the judgment and remand for further proceedings with respect to these actions. However, with respect to Whatley’s actions based on duress, we affirm because he had the burden to show by summary judgment evidence when the duress was removed.

The counterclaim indicates that the bank held notes executed by Whatley prior to the time that the incidents alleged as the basis of the counterclaim occurred. The first incident alleged occurred in May 1968 when Whatley contends the bank coerced him into guaranteeing a $64,000 loan to Sam Thomas. Whatley also alleges that the bank in October 1968, required Whatley to guarantee a $33,000 loan which it was unable to collect from its original maker, Sydney Kanaster. Whatley alleges that he was required to execute this guaranty in order to obtain a $200,000 loan commitment from the bank. The bank subsequently refused, however, to make the $200,000 loan. What-ley also contends that he had no connection with Kanaster or Thomas and that he had no reason to guarantee their notes other than the coercive actions of the bank. In May 1969 Whatley alleges that the bank forced him, by use of threats, to replace the Thomas and Kanaster notes with his personal notes. Whatley also alleges that he borrowed $95,000 from the bank in November 1969 to enable him to purchase thirty-three percent of the outstanding stock of Trans Services, Inc. He contends that the bank required that Whatley cause Trans Services to acquire Govan Express, Inc., which was indebted to the bank, and required that Trans Services pay off $90,000 of Govan’s indebtedness. Finally, Whatley contends that the bank required him to sell his Trans Services stock for $140,000 at a time when the stock was actually worth $540,000. This occurred sometime in 1971.

Since no summary judgment evidence was introduced, the trial court properly rendered summary judgment only if the counterclaim affirmatively alleges facts which negate the existence of a cause of action or disclose an insurmountable barrier to recovery. Texas Department of Corrections v. Herring, 513 S.W.2d 6, 9 (Tex.1974); Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); Douglas v. First State Bank of Athens, 538 S.W.2d 179, 181 (Tex.Civ.App.—Dallas 1976, no writ). The summary judgment procedure is not to be utilized as a substitute for special exceptions; summary judgment is not proper if the petition merely fails to allege a proper cause of action. Herring at 9. Since the only ground alleged in the motion for summary judgment is that the causes of action are barred by the statute of limitations, our sole inquiry is whether the petition affirmatively shows that the causes of action which Whatley has alleged or attempted to allege are barred. Resolving all doubts in favor of Whatley we construe the petition as attempting to set up the following causes of action: (1) Thomas and Kanaster notes: Whatley seeks recovery of the $97,000 paid on the basis that (a) it constitutes money had and received since it was paid pursuant to guaranties executed without consideration; (b) it constitutes payment of usurious interest on previously existing loans from the bank to Whatley; and (c) the guaranties should be rescinded due to fraud, duress, or failure of consideration, and any money paid pursuant to the guaranties should be returned; (2) Trans Services Loan: Whatley seeks recovery of the $90,000 which was required to be applied to the debts of Govan Express on the basis that it constituted usurious interest on the $95,000 loan to Trans Services; and (3) Sale of Trans Services stock: Whatley seeks recovery of the $400,000 which he lost due to the bank’s coercing him to sell his stock at a loss. We do not express an opinion as to whether any of these causes of action were properly pleaded.

Thus, Whatley’s counterclaim includes actions for money had and received, usury, duress, and rescission based on fraud, failure of consideration and duress, and the return of any moneys paid pursuant to the rescinded notes. The question, then, is when the statute of limitations begins to run on each of these causes of action and whether Whatley’s petition affirmatively establishes these dates which would be admissions against Whatley insofar as each pertains to the bank’s summary judgment. Since neither party introduced any summary judgment evidence, the result is dictated by which party had the burden of proof concerning the statute of limitations.

The Burden of Proof

The supreme court has distinguished between situations where the petition affirmatively shows that the limitations period has expired and the nonmovant seeks to avoid limitations in some manner and situations where the petition does not affirmatively show that the statute of limitations has run. Zale Corp. v. Rosenbaum, 520 S.W.2d 889, 891 (Tex.1975) (per curiam); Oram v. General American Oil Co., 513 S.W.2d 533, 534 (Tex.1974) (per curiam). In the former situation, the nonmovant has the burden of producing evidence sufficient to raise a fact question as to the grounds for avoiding limitations; in the latter situation, the movant must establish that the suit is barred by limitations as a matter of law. In cases based upon fraud and duress, the courts have stated that the statute of limitations does not begin to run until the fraud is discovered or the duress removed: The question presented is whether these delays in the running of limitations are in the nature of an estoppel or avoidance of limitations. If so, the nonmovant had the burden of presenting evidence and, having failed to do so, the summary judgment was properly granted.

In Nichols v. Smith, 507 S.W.2d 518 (Tex.1974), the court held that plaintiff’s medical malpractice claim was barred by the two-year statute of limitations since the record showed that the operation was performed in 1966 and the action was not filed until 1970. Plaintiff contended that the defendant fraudulently concealed the injury from her and that she did not discover the injury until 1969. The court concluded that plaintiff’s claim of fraudulent concealment was, in effect, an affirmative defense in the nature of an estoppel to the affirmative defense of limitations. Thus, the burden was on the nonmovant plaintiff to present evidence raising a fact issue on this question in order to avoid the defense of limitations. However, the court reserved the question concerning the result under the discovery rule according to which certain causes of action do not accrue until the plaintiff discovers or should have discovered certain material facts, as contrasted with the fraudulent concealment claim.

In Oram v. General American Oil Co., 513 S.W.2d 533 (Tex.1974) (per curiam), the court of civil appeals affirmed a summary judgment because the plaintiff had become competent to bring the action in 1953, but had not filed the suit in the probate court until 1958, and the four-year statute of limitations had therefore expired. Plaintiff asserted that under Tex.Rev.Civ.Stat.Ann. art. 5539a (Vernon 1958), the statute of limitations ceased running in 1956 when the plaintiff filed the same action in the district court since the district court dismissed it for want of jurisdiction and she had refiled it in the probate court within sixty days. The court of civil appeals held that the nonmov-ant plaintiff had the burden of establishing the applicability of article 5539a and that she had failed to sustain her burden since the copy of the judgment attached to her affidavit did not expressly state that the dismissal was for want of jurisdiction. The supreme court held, however, that the burden was on the movant, stating that the nonmovant has no burden of responding to a motion for summary judgment unless the defendant has affirmatively established its defense. The court stated that the affirmative defense was not established since it was contended that the statute of limitations stopped running in 1956 under article 5539a. The court went on to say, however, that it would be a different matter if the movant had established the limitations defense and the nonmovant had attempted to interpose an estoppel to avoid the defense.

In Zale Corp. v. Rosenbaum, 520 S.W.2d 889 (Tex.1975) (per curiam), the plaintiff sued for negligent construction of a building. The cause of action, which was governed by the two-year statute of limitations, accrued on July 2, 1971, and suit was filed on June 28, 1973. However, plaintiff did not request issuance of citation until August 3, 1973. In response to the motion for summary judgment, plaintiff contended that it had used diligence in attempting to secure citation, thus tolling the statute of limitations, and that Tex.Rev.Civ.Stat.Ann. art. 5537 (Vernon 1958), which provides that the time a defendant is absent from the state shall not be counted as part of the limitations period, suspended the statute of limitations for a sufficient period to make their service timely. The court of civil appeals, in affirming the summary judgment, held that the nonmovant plaintiff had the burden on each of these issues, that lack of diligence was shown as a matter of law, and that the plaintiff had failed to meet its burden of showing that the defendant had been absent from the state a sufficient time to make service timely. The supreme court held, however, that the court of civil appeals had misplaced the burden on both issues, saying that where the plaintiff interposes a suspension statute or pleads diligence in securing citation, the movant’s burden includes negating these contentions. The court went on to say:

Oram recognized a distinction between pleas by the non-movant which challenge the existence of limitations, such as involved here, and those which do not challenge the limitations defense, but are affirmative defenses in the nature of confession and avoidance. In the latter instance, the non-movant does have the burden of raising a fact issue with respect to his affirmative defense.

Id. at 891.

Fraud

The statute of limitations on a cause of action based upon fraud does not begin to run until the fraud is discovered, or until the plaintiff acquires such knowledge as would lead to its discovery if reasonable diligence was exercised. Ruebeck v. Hunt, 142 Tex. 167, 176 S.W.2d 738, 739 (1943); Ryan v. Collins, 496 S.W.2d 205, 211 (Tex.Civ.App.—Tyler 1973, writ ref’d n. r. e.). That is, the statute of limitations for causes of action based upon fraud is governed by the discovery rule. Kelley v. Rinkle, 532 S.W.2d 947, 948 (Tex.1976). In Weaver v. Witt, 552 S.W.2d 565 (Tex.Civ.App.Houston [14th Dist.], (1977), the court held that the nonmovant plaintiff had the burden of establishing that the cause of action was not barred by the statute of limitations under the discovery rule. The court concluded that the discovery rule is a plea in confession and avoidance like fraudulent concealment in Nichols v. Smith, 507 S.W.2d 518 (Tex.1974). However, in Nichols, the supreme court was careful to note that consideration of the discovery rule was excluded from its decision. The implication is that the Nichols court was of the opinion that the result might be different if the discovery rule, rather than fraudulent concealment, had been the issue under consideration. The supreme court has held that where the discovery rule is applicable, the cause of action does not accrue until the facts are actually discovered or should have been discovered through the exercise of reasonable diligence. Kelley v. Rinkle, 532 S.W.2d 947, 948 (Tex.1976); Gaddis v. Smith, 417 S.W.2d 577, 579-81 (Tex.1967). Since the petition does not affirmatively disclose when the fraud was or should have been discovered, we cannot determine when the statute of limitations began to run. Summary judgment on the pleadings on the ground that the action is barred by limitations is improper where the petition does not disclose when the cause of action accrued. Frosh v. Swett, 2 Tex. 485, 487-88 (1847). Therefore, we hold that pleading facts which would make the discovery rule applicable effectively challenges the existence of the limitations as a defense, rather than being a plea in confession and avoidance, under the rule set out in Oram and Rosenbaum. The movant had the burden of establishing that the causes of action based on fraud accrued at such a time that they are now barred by limitations. Accordingly, we expressly disagree with the holding of the court of civil appeals in Weaver.

We also note our previous decision in Douglas v. First State Bank, 538 S.W.2d 179 (Tex.Civ.App.—Dallas 1976, no writ) (per Akin, J.), in which we held that the defendant had established the affirmative defense of limitations because plaintiff’s petition alleged that the fraud had occurred more than five years before suit was filed and that the plaintiff had the burden of coming forth with summary judgment evidence to show that there was a fact question on an issue which would make the limitations bar inapplicable. Insofar as that opinion may be construed as holding that a cause of action based on fraud accrues when the fraud is committed instead of when the fraud is actually discovered, it is overruled.

Duress

In discussing the statute of limitations in cases concerning duress, the courts have referred to the cause of action as not accruing until the duress is removed and have also referred to the continued existence of the duress as a tolling of the statute of limitations. Pierce v. Estate of Haverlah, 428 S.W.2d 422, 426 (Tex.Civ.App.—Tyler 1968, writ ref’d n. r. e.); Cadena v. Cadena, 223 S.W.2d 678, 681 (Tex.Civ.App.—San Antonio 1949, writ ref’d n. r. e.). A careful reading of these cases, however, discloses that the burden of showing the continued existence of duress is on the plaintiff asserting that the cause of action is not barred by the statute of limitations. Thus, we hold that the action accrues when the wrongful act occurs and that duress may be asserted as a tolling of the statute of limitations. Insofar as duress is urged as a tolling of the statute of limitations, it is in the nature of an estoppel or avoidance of the bar, similar to fraudulent concealment in Nichols. Therefore, when the petition discloses that the acts complained of occurred more than four years prior to the filing of the plaintiff’s petition, the actions based on duress are barred by any applicable statute of limitations unless the plaintiff meets its burden of raising a fact question on the continued existence of the duress until a time within the limitations period. Haverlah at 427-28; McNeill v. Lovelace, 529 S.W.2d 633, 637 (Tex.Civ.App.—Fort Worth 1975, no writ). We recognize that the supreme court’s decisions in Oram and Rosenbaum place the burden of negating suspension of the statute of limitations on the movant-defendant, rather than the plaintiff; however, each of these cases relies on Nichols. We are unable to perceive any material distinction between duress and fraudulent concealment as they relate to limitations. Each prevents the limitations from running until some future date — either discovery of the true facts or termination of the duress; neither prevents the cause of action from actually accruing until that future date, such as is true with the discovery rule. Since Haverlah and Cade-na, the two principal cases dealing with duress and limitations, place the burden on the plaintiff, we feel constrained to do likewise under Nichols, although the distinction between fraudulent concealment and duress on the one hand, and diligence in securing citation and suspension on the other, is a fine one. We see no rational justification for permitting some plaintiffs to avoid summary judgment based on limitations merely by pleading suspension of the statute of limitations while requiring other plaintiffs to present summary judgment evidence to avoid the bar of the statute. Likewise, we regard as tenuous and confusing the distinction, implicit in Nichols, between plaintiff’s failure to discover defendant’s actionable fraud (in which ease the cause of action does not accrue until he should have discovered it), and plaintiff’s failure to discover defendant’s fraudulent concealment of facts essential to the cause of action (in which case the cause of action accrues immediately, but defendant is estopped to plead limitations). If the suit is based on actionable fraud, that same fraud will often serve to conceal the existence of material facts, and thus the burden of presenting summary judgment proof is made to turn on niceties of pleading or argument on appeal. A rational rule would provide that the result be the same in both situations.

Causes of Action Based on Money Had and Received, Usury, and Failure of Consideration

The statute of limitations on an action for money had and received runs from the date that payment is made. City of Beaumont v. Moore, 146 Tex. 46, 202 S.W.2d 448, 452 (1947); Knox v. Stephens, 285 S.W.2d 883, 885 (Tex.Civ.App.—San Antonio 1955, writ ref’d n. r. e.). The statute of limitations for rescission based on failure of consideration does not begin to run until the failure of consideration occurs. J. B. Colt Co. v. Knight & Perry, 3 S.W.2d 879, 881 (Tex.Civ.App.—San Antonio 1928), writ dism’d w. o. j., 13 S.W.2d 357 (Tex.Com.App.1929, judgmt. adopted); see Gibson v. Fifer, 21 Tex. 260, 263-64 (1858). Tex.Rev.Civ.Stat.Ann. art. 5069-1.06(3) (Vernon 1971) provides that all actions for usury brought under the penalty provisions of that article “shall be brought . within four years from the date when the usurious charge was received or collected.” Thus, the statute of limitations does not begin to run until the usurious interest is actually paid. Schmid v. City National Bank, 132 Tex. 115, 114 S.W.2d 854, 856-57 (1938); Ware v. Paxton, 266 S.W.2d 218, 226 (Tex.Civ.App.—Eastland 1954, writ ref’d n. r. e.).

As previously noted, the statute of limitations defense must affirmatively appear from Whatley’s petition. The pertinent dates concerning when these causes of action accrued are: (1) when Whatley paid the $97,000 for which he ostensibly became liable on the Thomas and Kanaster notes; (2) when Trans Services paid the $90,000 on Govan Express’s debts; and (3) when the bank refused to honor its commitment to loan Whatley $200,000. The bank contends that the petition affirmatively shows that Whatley paid the $97,000 in May 1969 when he executed a replacement note. However, execution of a subsequent note does not constitute payment of usurious interest. Ware v. Paxton, 266 S.W.2d 218, 226 (Tex.Civ.App.—Eastland, 1954, writ ref’d n. r. e.). Similarly, the action for money had and received requires that the bank actually have received money from Whatley, not merely a promise to pay money. The petition does not state when the $97,000 was actually paid. Neither does the petition state when Trans Services actually paid the $90,000 of Govan’s indebtedness. Likewise, the petition does not affirmatively show when the bank refused to honor its commitment to make the $200,000 loan. Since the crucial facts of when these causes of action accrued are not shown by the petition, we cannot determine when the relevant statute of limitations began to run. Therefore, we cannot sustain the summary judgment as to these actions. Frosh v. Swett, 2 Tex. 485, 487-88 (1847). Accordingly, we reverse and remand for further proceedings on these claims.

The Bank's Failure to Answer Interrogatories

Whatley also asserts that the trial court abused its discretion in rendering summary judgment against him because the bank had not answered interrogatories which Whatley had propounded. However, the record does not show that Whatley requested a continuance or requested the trial court to impose sanctions against the bank for such failure. Additionally, since we are sustaining the summary judgment solely as to the causes of action based on duress and since the information necessary to defeat the limitations bar — when the duress was removed — would be within Whatley’s knowledge and could have been presented by him in an affidavit, the error, if any, was harmless.

Affirmed in part and reversed and remanded in part.

      . The supreme court, in Nichols, cites three authorities in support of its holding that fraudulent concealment is an “estoppel.” Two of these, Owen v. King, 130 Tex. 614, 111 S.W.2d 695, 697 (1938) and 51 Am.Jur.2d Limitation of Actions § 147 (1970), merely hold that fraudulent concealment will postpone the running of the statute of limitations until the fraud is discovered; Owen refers to fraudulent concealment as a tolling and avoidance of the statute of limitations. In Barnard v. Thompson, 138 Tex. 277, 158 S.W.2d 486 (1942), the supreme court reversed the trial court’s dismissal of the action on the basis of defendant’s special exception alleging limitations, holding that the plaintiff’s allegations were sufficient to raise the issue of fraudulent concealment. Thus, it does not appear that the cases cited actually support the court’s conclusion.

      . Tex.Rev.Civ.Stat. art. 5073 (1925), the statute in effect at the time Schmid and Ware were decided, has been superseded by article 5069-1.06. Article 5069-1.06 retains the language which provides that actions shall be brought within a specified period of time “from the date when the usurious charge was received or collected.”


source: Caselaw Access Project

author: J. CURTISS BROWN, Chief Justice.

license: Public Domain

text:
    Martin Lester DERBONNE, Appellant, v. Katie Ann DERBONNE, Appellee.
    No. 1538.
    Court of Civil Appeals of Texas, 14th Dist.
    Aug. 10, 1977.
    Rehearing Denied Aug. 31, 1977.

      Bruce F. Kelly, Carl D. Haggard, Houston, for appellant.
    Ben Hardin, Wommaek & Hardin, Lake Jackson, James W. Bradford, Jr., Angleton,, for appellee.
   J. CURTISS BROWN, Chief Justice.

This is an appeal from a judgment modifying the parent-child relationship in which the court refused to award attorney’s fees.

Martin Lester Derbonne, appellant, brought suit to change custody of his two minor children from Katie Ann Derbonne, appellee, to himself. The two parties were divorced in May 1975, and the court appointed appellee managing conservator and appellant possessory conservator. Appellee filed a cross-action requesting an increase in child support payments. Appellant engaged separate counsel to defend this cross-action and answered denying the necessity for an increase in child support and asked the court to award him costs plus attorney’s fees amounting to $5,000. The jury found in favor of appellant to change custody from appellee to himself and against appel-lee on the increase in child support. They also found that the reasonable value of attorney’s fees for defending the cross-action was $2,000. Subsequently, appellee filed a motion for judgment non obstante veredicto as to the award of attorney’s fees. In its final judgment, the trial court failed to award attorney’s fees.

On appeal, appellant’s attack is limited to the judgment of the trial court in not following the jury’s award of attorney’s fees. He argues that a judgment non obstante veredicto is only proper when there is no evidence to support the jury’s findings, and that in this case, there was ample evidence to support the award. Appellant also alleges that the motion for judgment n. o. v. was insufficient and that he received no notice thereof.

We hold that the action of the trial court in not awarding attorney’s fees was within its discretion. The original action to change custody brought by appellant and the cross-action to increase child support were proceedings falling under Title 2, Subtitle A of the Texas Family Code dealing with suits affecting the parent-child relationship. See Tex.Family Code Ann. § 11.01(5) (1975), and § 14.08 (Supp.1976). Section 11.18(a) in subtitle A, provides in pertinent part:

In any proceeding under this subtitle, the court may award costs as in other civil cases. Reasonable attorney’s fees may be taxed as costs, and may be ordered paid directly to the attorney, who may enforce the order for fees in his own name.

It is clear from the wording of this section, and it has been so held, that the award of attorney’s fees in such proceedings is within the court’s discretion. Labowitz v. Labowitz, 542 S.W.2d 922, 927 (Tex.Civ.App.—Dallas 1976, no writ). After reviewing the record, we can not say that the trial court abused its discretion in failing to award attorney’s fees. Cf. Prewitt v. Prewitt, 459 S.W.2d 720 (Tex.Civ.App.—Tyler 1970, no writ).

Considering appellant’s third point of error, we find that while appellee’s motion for judgment n. o. v. as to the award of attorney’s fees was sufficient to invoke the trial court’s jurisdiction, the record is silent as to whether adequate notice of the motion was given to appellant as required under Tex.R.Civ.P. 301. Without a proper motion and notice, the court is not authorized to disregard a jury finding. Hines v. Parks, 128 Tex. 289, 96 S.W.2d 970, 973 (1936); Houston County v. Leo L. Landauer & Associates, Inc., 424 S.W.2d 458, 465-66 (Tex.Civ.App.—Tyler 1968, writ ref’d n.r.e.). However, the record also does not reflect whether the trial court considered appel-lee’s motion. This is not a case in which the court allowed attorney’s fees, but in an amount different from the award found by a jury. The judgment simply fails to award the $2,000 attorney’s fees which the jury found to be a reasonable amount for the services performed. Therefore, since the awarding of attorney’s fees is within the discretion of the court under section 11.-18(a), we hold that the court acted within its authority in failing to award attorney’s fees.

Affirmed.


author: McDONALD, Chief Justice.

text:
    PUBLIC UTILITY COMMISSION of Texas et al., Appellants, v. CITY OF CORPUS CHRISTI et al., Appellees.
    No. 5768.
    Court of Civil Appeals of Texas, Waco.
    Aug. 11, 1977.
    Rehearing Denied Sept. 15, 1977.

      John L. Hill, Atty. Gen., Joe N. Pratt, Joyce B. Carpenter, Asst. Attys. Gen., Austin, W. N. Woolsey, Dyer, Redford, Burnett, Wray & Woolsey, Corpus Christi, for appellants.
    B. D. St. Clair, McGinnis, Lochridge & Kilgore, Austin, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal by the Public Utility Commission of Texas, and Central Power & Light Company from temporary injunction enjoining PUC from enforcing an Interim Rate Order (and the Interim Order Nunc Pro Tunc), and enjoining CPL from charging rates pursuant to such orders. The effectiveness of the temporary injunction was suspended pending final hearing upon CPL posting bond to refund ratepayers if they finally be entitled to same.

CPL gave appellee cities “Statement of Intent” to increase its electric utility rates, (as well as all cities served by its entire system).

Cities not parties here took final action denying the proposed rate increase and CPL appealed to the PUC. This appeal was consolidated with an original CPL application to PUC to raise rural rates. Appellee cities intervened in the consolidated case which was docketed as Docket 91, and which presented the entire CPL system to the PUC. After hearing the PUC by final order in Docket 91 determined rates CPL could charge all classes of customers (inside and outside incorporated municipalities). No motion for rehearing was filed and no appeal taken from such order by appellee cities.

Meanwhile prior to entry of final order in Docket 91 appellee cities finally acted denying CPL’s intended rates. CPL appealed each to the PUC, which appeals were consolidated with all appeals (filed subsequent to those docketed in Docket 91) as Docket 167.

CPL moved for an order establishing temporary rates pending final order, and the PUC entered Interim Order setting temporary rates (pending final order) for 86 cities including the 14 cities which are ap-pellees here. Such order recites it was based on the evidence taken in Docket 91 (which was introduced and made a part of Docket 167).

Following the entry of such order appel-lees did not “file a motion in opposition to it, or to set aside or modify it,” as provided for by Rule 052.01.00.067 of the Rules of Practice and Procedure of the PUC.

Appellees filed this action in the District Court of Travis County seeking temporary restraining order, temporary injunction, and permanent injunction against the enforcement of the Interim Order (and the Interim Order Nunc Pro Tunc), by either the PUC or CPL.

As noted, the trial court granted temporary injunction against both PUC and CPL. The trial court based its decision on a determination that the PUC does not have authority to establish temporary rates by interim order in cases appealed to the PUC from municipal regulatory agencies.

PUC and CPL appeal on 6 points contending:

1) The trial court erred in holding that Article 1446c VATS does not authorize the establishment of temporary rates by Interim Order by the PUC in the exercise of its appellate jurisdiction.
2) The trial court erred in granting temporary injunction because the trial court lacked jurisdiction.

Article 1446c, the Public Utility Regulatory Act, provides in part:

“Sec. 2. This Act is enacted to protect the public interest inherent in the rates and services of public utilities. * * * The purpose of this Act is to establish a comprehensive regulatory system which is adequate to the task of regulating public utilities as defined by this Act, to assure rates, operations, and services which are just and reasonable to the customers and to the utilities.
* * * * * *
. “Sec. 3(p). ‘Order’ means the whole or a part of the final disposition * * * but including * * * ratesetting.
* * * * * *
“Sec. 16. The commission has the general power to regulate and supervise the business of every public utility within its jurisdiction and to do all things, whether specifically designated in this Act or implied herein, necessary and convenient to the exercise of this power and jurisdiction. The commission shall make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission * *.
“Sec. 17(a). * * * Each municipality shall have exclusive original jurisdiction over all electric * * * services * * * within its city or town limits.
“Sec. 17(d). The commission shall have exclusive appellate jurisdiction to review orders * * * of such municipalities as provided in this Act.
“Sec. 17(e). The commission shall have exclusive original jurisdiction over electric * * * rates * * * not within the incorporated limits of a municipality exercising exclusive original jurisdiction over those rates * * *.
“Sec. 26(a). Any party to a rate proceeding before the governing body of a municipality may appeal the decision * * * to the commission * * *.
“Sec. 26(e). The commission * * * shall hear such appeal de novo and by its final order shall fix such rates as the municipality should have fixed in the ordinance from which the appeal was taken.
“Sec. 37. Subject to the provisions of this Act, the commission * * * is hereby vested with all authority and powers of the State of Texas to insure compliance with the obligations of public utilities in this Act. For this purpose the regulatory authority is empowered to fix and regulate rates of public utilities
“Sec. 38. * * * For ratemaking purposes, the commission * * * may treat two or more municipalities served by a public utility as a single class whenever the commission * * * deems such treatment to be appropriate.
“Sec. 42. * * * The regulatory authority shall determine the just and reasonable rates * * * and shall fix the same by order * * *.
“Sec. 43(d). * * * The Regulatory Authority may in its discretion fix temporary rates for any period of suspension under this section. * * *.
“Sec. 69. Any party to a proceeding before the commission is entitled to judicial review under the substantial evidence rule. The issue of confiscation shall be determined by a preponderance of the evidence.
“Sec. 89. This Act shall be construed liberally to promote the effectiveness and efficiency of regulation by public utilities

The Public Utility Regulatory Act thus gave cities original jurisdiction over rates within their boundaries. Sec. 17(a); gave the PUC original jurisdiction over rates outside the boundaries of an incorporated municipality. Sec. 17(e); and gave the PUC appellate jurisdiction over rate cases of which a city had original jurisdiction. Sec. 17(d).

Section 43(d) of the Act gives the City and the PUC authority to fix temporary rates by interim order in cases over which they have original jurisdiction.

Sections 26(a) and (e) of the Act provide for an appeal from the decision of a city to the PUC, where such appeal will be heard “de novo”.

And the power to try a case de novo vests a court with full'power to determine the issues and rights of all parties involved, and to try the case as if the suit had been filed originally in that court. Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681, 692.

Moreover, the purpose of the Act is to establish a comprehensive regulatory system which is adequate to the task of regulating public utilities, and to assure rates which are just and reasonable to the customers and to the utilities. Sec. 2; and the PUC is given the general power to regulate and supervise every public utility within its jurisdiction and to do all things “whether specifically designated in this Act or implied herein, necessary and convenient to the exercise of this power and jurisdiction”. Sec. 16; and the legislature expressly provided that the Act “shall be construed liberally to promote the effectiveness and efficiency of regulation of public utilities”. Sec. 89.

The power of the PUC to set interim rates is a power necessarily inferred from or incidental to the express power to fix a permanent rate.

We hold the PUC has the implied power to set temporary rates by interim order, in a rate case on appeal from a city having original jurisdiction.

In other states it has been consistently held that a Public Utility Commission which has express power to fix and regulate utility rates, has the implied power to fix an interim rate pending final determination of a permanent rate. State ex rel Laclede Gas Co. v. Public Service Commission of Missouri, Mo.App., 535 S.W.2d 561; Muskogee Gas & Elec. Co. v. State, 81 Okl. 176, 186 P. 730, 732; Chicago Rys. Co. v. City of Chicago, 292 Ill. 190, 126 N.E. 585, 590; Omaha & C. B. St. Ry. Co. v. Nebraska State Railway Comm., 103 Neb. 695, 173 N.W. 690; State ex rel. Puget Sound Navigation Co. v. Department of Transportation of Washington, 33 Wash.2d 448, 206 P.2d 456; Elliott v. Empire Natural Gas Co., 123 Kan. 558, 256 P. 114.

■ Appellees assert the Interim Order invalid because it failed to recite any finding of “imminent peril to the public health, safety, or welfare”, and the Nunc Pro Tunc Order which added this finding a nullity because it purports to correct a judicial error rather than a ministerial error.

Section 16(c), Art. 6252-13a requiring a finding of “imminent peril to the public health, safety, or welfare” is applicable only to a final decision by the PUC, and not to an Interim or Temporary Order. The Interim Order is thus valid without such a recitation and finding, and we express no opinion as to the validity of the Nunc Pro Tunc Order.

Contention 1 is sustained.

The order of the PUC enjoined by the trial court was an Interim Order. Final order was to follow. The rule is that where an administrative remedy is provided by statute, relief must not only be sought initially from the appropriate administrative agency, but such remedy must usually be exhausted before a litigant may resort to the courts.

Since appellees did not exhaust their administrative remedy of proceeding to final order before the PUC, we think the trial court is without jurisdiction to grant the temporary injunction.

City of Corpus Christi v. Stowe, Tex.Civ.App. (San Antonio) N.W.H., 338 S.W.2d 767; Sproles Motor Freight Line v. Smith, Tex.Civ.App. (Austin) Er.Ref., 130 S.W.2d 1087; Texas Air Control Board v. Travis County, Tex.Civ.App., (Austin) N.W.H., 502 S.W.2d 213; City of Sherman v. Railroad Comm. of Texas, Tex.Civ.App. (Austin) N.W.H., 454 S.W.2d 762, 764. See also; Art. 6252-13a, Sec. 19(a) VATS; Lower Colorado River Authority v. Coastal States Gas Producing Co., 20 Texas Supreme Court 298.

Contention 2 is sustained.

Moreover, appellants did not avail of their administrative remedy and comply with Rule 052.01.00.067 of the PUC which required appellants to file motion to set the Interim Order aside.

The judgment is reversed, the temporary injunction vacated, and the cause dismissed for want of jurisdiction.

REVERSED AND RENDERED.


author: ROBERTSON, Justice.

text:
    Robert BIRENBAUM, Appellant, v. BACHE & CO., INCORPORATED, Appellee.
    No. 19247.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 11, 1977.
    Rehearing Denied Sept. 8, 1977.

      Gerald R. Coplin, Passman, Jones, Andrews, Coplin, Holley & Co., Dallas, for appellant.
    Corbet F. Bryant, Jr., Carrington, Coleman, Sloman, Johnson & Blumenthal, Dallas, for appellee.
   ROBERTSON, Justice.

Bache & Co., Incorporated, sued Robert Birenbaum on a debt of $6,400.50, which represented a deficit in a margin commodity trading account. By way of affirmative defense and counterclaim, Birenbaum asserted certain violations of the margin regulations promulgated under the federal securities laws. The trial court granted an interlocutory summary judgment for Bache on the debt and dismissed Birenbaum’s counterclaim for lack of jurisdiction. A final judgment was entered which incorporated the interlocutory summary judgment and the dismissal, and Birenbaum now appeals from the judgment entered against him for the debt. We hold that the federal regulations upon which Birenbaum bases his defense are inapplicable to commodity futures trading and, accordingly, affirm the judgment of the trial court.

In February of 1973 Birenbaum established a margin account with Bache. Pursuant to that account, Birenbaum was extended credit for the purchase of commodities. After trading for several months, there was a deficiency in the account which resulted in its liquidation. The present suit is based upon the deficit owed to Bache after the liquidation. Birenbaum’s alleged affirmative defense is based upon the. assertion that Bache has violated the margin requirements of the federal securities laws, which prohibit credit transactions by brokers that result in an excess of the debit balance in an account over the maximum loan value of the securities on deposit. He asserts that the regulatory violation precludes the broker from recovering any account deficits which result from unauthorized credit extensions.

The basic issue on this appeal is whether Birenbaum’s summary judgment proof regarding his alleged affirmative defense raised fact issues which precluded the summary judgment on the debt. In order to decide this issue, we must first determine whether the exclusive federal jurisdiction over securities violations precludes state court adjudication of affirmative defenses based on regulatory violations. Secondarily, we must decide whether the margin regulations promulgated by the Securities and Exchange Commission apply to commodity futures trading accounts.

Jurisdiction

Our threshold consideration is whether state court jurisdiction over affirmative defenses based on margin violations has been precluded by the exclusive federal jurisdiction granted by the Securities Exchange Act of 1934 § 27, 15 U.S.C. § 78aa (1971). That section provides:

The district courts of the United States, and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have exclusive jurisdiction of violations of this chapter or the rules and regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by this chapter or the rules and regulations thereunder. [Emphasis added.]

While we recognize that this section precludes state court adjudication of direct claims based upon violation of the federal securities regulations, it does not bar affirmative defenses based upon the federal securities laws from being asserted defensively in state courts. Shareholders Management Co. v. Gregory, 449 F.2d 326, 327 (9th Cir. 1971); Aetna State Bank v. Altheimer, 430 F.2d 750, 754 (7th Cir. 1970); II Loss, Securities Regulation 977-980 (2d ed. 1961); cf. Pan American Petroleum Corp. v. Superior Court, 366 U.S. 656, 662, 81 S.Ct. 1303, 6 L.Ed.2d 584 (1961) (exclusive federal jurisdiction granted under Natural Gas Act does not preclude state court adjudication of defenses based thereon); Hampton House Management Corp. v. Saleh, 357 F.Supp. 591, 593 (S.D.N.Y.1973) (exclusive federal jurisdiction conferred by Economic Stabilization Act held not to prohibit state decision of defenses raised under the Act). See also [1975] III Bromberg, Securities Fraud at 244.11.

A similar question has arisen under the federal patent laws.. In Pratt v. Paris Gaslight & Coke Co., 168 U.S. 255, 259, 18 S.Ct. 62, 64, 42 L.Ed. 458, 460 (1897), the United States Supreme Court held that a statute which conferred exclusive federal jurisdiction over patent claims did not deprive the state courts of the power to determine questions arising under the federal statutes; rather, it only precluded state determination of cases arising under those laws. According to the Court:

There is a clear distinction between a case and a question arising under the patent laws. The former arises when the plaintiff in his opening pleading — be it a bill, complaint, or declaration — sets up a right under the patent laws as ground for a recovery. Of such the state courts have no jurisdiction. The latter may appear in the plea or answer or in the testimony. The determination of such question is not beyond the competency of the state tribunals. [Emphasis added.]

See also Pan American Petroleum Corp. v. Superior Court, supra, 366 U.S. at 662, 81 S.Ct. 1303. We find this reasoning persuasive, particularly in light of the fact that, in the present case, plaintiff’s claim was one based upon state law which, in the absence of diversity of citizenship, could not be brought in federal court. As Justice Frankfurter stated in Pan American Petroleum Corp., supra : “ ‘Exclusive jurisdiction’ is given the federal courts, but it is ‘exclusive’ only for suits that may be brought in the federal courts.” [Emphasis added.] The suit in the present case was brought on a debt, a traditional state cause of action. Since the issue of violation only appeared by way of defense, it is merely a question in the case, rather than a claim for relief. In such a case under the above authorities, state courts are not precluded from determining the issue.

The Defense

Birenbaum’s defense is based upon Bache’s alleged violation of Regulation “T,” 12 C.F.R. § 220, promulgated under section 7(c) of the Securities Exchange Act of 1934, 15 U.S.C. § 78g (1971). In 12 C.F.R. § 220.-3(b)(l)(i), the regulation sets forth the following general rule:

A creditor shall not effect for or with any customer in a general account, special bond account subject to § 220.4(i), or special convertible debt security account any transaction which, in combination with the other transactions effected in such account on the same day, creates an excess of the adjusted debit balance of such account over the maximum loan value of the securities in such account, or increases any such excess, unless in connection therewith the creditor obtains, as promptly as possible and in any event before the expiration of 5 full business days following the date of such transaction, the deposit into such account of cash or securities in such amount that the cash deposited plus the loan value of the securities deposited equals or exceeds the excess so created or the increase so caused.

Birenbaum asserts that violation of this regulation is an affirmative defense to an action on the margin deficit after a commodity futures account is liquidated. We disagree. The margin regulations do not apply to transactions which occur in a special commodity account, which is exclusively devoted to trading in commodities futures. Section 220.4 excepts certain “special accounts” from the margin requirements. Among the excepted accounts is the “special commodity account,” defined in section 220.4(e) as an account in which “a creditor may effect and carry for any customer transactions in commodities.” The express exception from regulation places the regulation of commodity trading under the exclusive jurisdiction of the Commodity Futures Trading Commission, created by the Commodity Futures Trading Commission Act of 1974, Pub.L.No.93-463, 88 Stat. 1389 (amending 7 U.S.C. § 1-17 (1964), and recognizes the congressional intent to exclude commodity trading from the margin rules promulgated under the Securities Exchange Act, Weiss, Registration and Regulation of Brokers and Dealers 78-79 (1965).

As amended, 7 U.S.C. § 2 (Supp.1977) provides:

[The Commodity Futures Trading Commission] shall have exclusive jurisdiction with respect to accounts, agreements, . and transactions involving contracts of sale of a commodity for future delivery, traded or executed on a contract market designated pursuant to section 7 of this title or any other board of trade, exchange, or market . . . [Emphasis added.]

Under this statute, the jurisdiction of the Commodities Futures Trading Commission over futures is exclusive, and the Securities and Exchange Commission and state securities agencies are precluded from regulating. commodity futures accounts. State v. Monex International Ltd., 527 S.W.2d 804, 806 (Tex.Civ.App.—Eastland 1975, writ ref’d); [1975] I Bromberg, Securities Fraud at 82.-142; Bromberg, Commodities Law and Securities Law — Overlaps and Pre-emptions, 1 J.Corp.L. 217, 303 (1976). The clear exception of commodity futures accounts from' the S.E.C. margin regulations, coupled with the subsequent delegation of exclusive regulatory jurisdiction to the Commodity Futures Trading Commission, demonstrate that the margin rules of Regulation “T” do not apply to commodity futures accounts. Merrill Lynch, Pierce, Fenner & Smith v. Brooks, 548 F.2d 615, 616-617 (5th Cir. 1977). Indeed, with limited exceptions for margin sales of gold and silver bullion and bulk coins, there are no governmental margin regulations for commodity futures accounts; rather, the commodity margin rules are normally set by the commodity exchanges and brokers. [1975] I Bromberg, Securities Fraud at 82.142; cf. State v. Monex International Ltd., supra (Commodity Futures Trading Commission held to have exclusive jurisdiction to regulate margin sales of gold and silver bullion and bulk coins by virtue of express statutory grant).

Since Birenbaum has failed to show that Bache’s conduct violated any applicable margin regulations, we hold that the summary judgment was properly rendered.

Affirmed.


text:
    Clyde SKEEN, Appellant, v. E. R. SLAVIK et al., Appellees.
    No. 19243.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 15, 1977.
    Rehearing Denied Sépt. 15, 1977.

      G. Leroy Street, Kirk R. Williams, Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellant.
    Gerald R. Coplin, Passman, Jones, Andrews, Coplin, Holley & Co., Dallas, for appellees.
   AKIN, Justice.

E. R. Slavik and D. J. Slavik and Mobile Parks of America Corporation sued Clyde Skeen for payment of notes given by Skeen to plaintiffs, foreclosure on the property held as security for the debt, and attorneys’ fees. Defendant contended at trial, as on this appeal, that the notes sued upon are usurious to such an extent that they are unenforceable under Tex.Rev.Civ.Stat.Ann. art. 5069-1.06(2) (Vernon 1971), as being twice the rates of interest allowed by Tex. Rev.Civ.Stat.Ann. art. 5069-1.02 (Vernon 1971) and art. 1302-2.09 (Vernon Supp. 1976). The trial court ruled in favor of plaintiffs, and defendant appealed. We hold that the trial court erred in rendering judgment for plaintiffs because the series of transactions leading up to the notes and other obligations sued upon by plaintiffs did involve the imposition of usurious interest rates that were more than double the rate authorized by law. Accordingly, we render judgment for defendant and that plaintiffs shall take nothing, as mandated by article 5069-1.06(2).

The first transaction in the series was a guaranty by defendant Skeen of three promissory notes by Crescent General Corporation to plaintiff Mobile Dealers of America. Mobile had previously advanced to Crescent $325,000 and had taken three notes of Crescent, one for $250,000, another for $75,000, both bearing interest at nine percent, and a third note for $100,000, bearing no interest. Each of the three notes was payable in December 1971, except for one payment of $20,000 which was made in June 1971. In August 1971 the three notes were cancelled, and three new notes totaling $425,000 were issued by Crescent to Mobile, although no additional money was advanced by Mobile to Crescent. The new notes included one for $175,000 and another for $170,000, both bearing interest at nine percent, and a third for $80,000 bearing no interest. Since $20,000 had already been paid on the original $425,000 owed by Crescent to Mobile (of which only $305,000 represented funds actually advanced), the August transaction increased Crescent’s ostensible indebtedness to Mobile by $20,000 without any money changing hands. These were the notes guaranteed by Skeen.

In September, Crescent paid off the $175,000 note, leaving an outstanding debt of $250,000 plus some interest. In December 1971 Crescent paid Mobile $50,000, reducing the outstanding balance to $200,000. The two remaining notes were then can-celled, and Crescent executed two new notes to Mobile in the amounts of $120,000 and $100,000, both bearing interest at nine percent, thus increasing the balance by $20,000 without any money changing hands from Mobile to Crescent. Plaintiff E. R. Slavik testified that the two $20,000 increases in indebtedness involved in the August and December renegotiations were fees charged by Mobile to Crescent for the service of extending the loans. Both of these notes were likewise guaranteed by Skeen.

In February of 1972 Skeen and the Sla-viks entered into what they characterized as a “put and call” agreement, whereby the Slaviks paid Skeen $300,000 for stock in Crescent and also in International World Encyclopedia Corporation, subject to the Slaviks’ right to demand repurchase of the stock by Skeen for $360,000. E. R. Slavik testified that this provided him and his brother with a $20,000 to $60,000 “margin” to compensate them for the risks they were taking by entering into this agreement.

In March 1973 the parties entered into a new agreement which plaintiffs contend was a settlement of all existing claims. The agreement expressly provided that Skeen and Crescent release Mobile and the Slaviks from all liability for any causes of action which may have accrued up to that date, including usury claims growing out of the loan transactions and “put and call” agreement outlined above. Under the settlement agreement Skeen paid $50,000 to the Slaviks and $5,000 to the Slaviks’ attorney, and signed two notes, one for $310,000 payable to the Slaviks bearing Seven and a quarter percent interest, and another for $235,950 payable to Mobile bearing interest at six and a quarter percent. No money was paid by the Slaviks or Mobile for these notes. Defendant argues that the $310,000 note was merely a continuation of the $360,000 obligation under the “put and call” agreement minus the $50,000 payment of March 5, 1973, and that the $235,950 note represented a continuation of the $220,000 obligation incurred by Crescent as a result of the negotiations of December 1971 with the addition of accrued interest. Skeen made some payments on these notes, but eventually defaulted, whereupon plaintiffs brought this suit for $204,550 alleged to be owed by Skeen to the Slaviks, plus interest accrued thereon, $173,825 alleged to be owed by Skeen to Mobile, plus interest accrued thereon, foreclosure on the collateral for these notes, and attorneys’ fees.

On appeal, defendant contends that the original loan agreement, the extension fees, and the “put and call” arrangement were all usurious loan transactions and that the settlement and release agreement of March 1973 can have no effect upon the usury because that agreement carried forward the usurious obligations originally contracted for in March 1971 and February 1972. Defendant further contends that because he is not obligated to pay these usurious debts, foreclosure on the collateral based on his default was error, as was the trial court’s award of attorneys’ fees to plaintiffs. Defendant has not claimed any attorneys’ fees, either in the trial court or in this court, nor has he claimed any penalty for the alleged usury other than by way of defense to the notes sued upon.

Plaintiffs contend that the existence of usury is a fact issue which was presumptively found by the trial judge in favor of plaintiffs and that, in the absence of findings of fact or conclusions of law, which were not requested by the defendant, the trial court’s conclusion on the usury issue is a fact finding, binding upon this court on appeal. Plaintiffs further contend that in order successfully to assert the defense of usury, defendant has to satisfy a burden of proof to show that there was a scheme to charge usury in the absence of notes which on their face proved usury. Plaintiffs also assert that they could charge fees for loans apart from interest without violating usury laws and that the settlement and release agreement of March 1973 cleansed the transactions of any usury which may have existed in the earlier agreements, thereby denying defendant his usury defense to the notes issued as part of the settlement and release agreement.

We turn to plaintiffs’ first contention that, in reviewing the trial court’s judgment, we must presume findings in support of the judgment if supported by any evidence. It is true that, in the absence of a jury verdict or any express findings of fact and conclusions of law by the trial court, we must presume all fact findings in favor of the trial court’s judgment; however, where the evidence establishes as a matter of law facts inconsistent with the judgment, the presumption cannot be effective, and we must overturn the trial court’s judgment. Lockhart v. Garner, 156 Tex. 580, 298 S.W.2d 108, 110 (1957).

Additionally, plaintiffs argue that because the March 1973 notes do not call for usurious interest rates upon their faces, defendant must establish that there was a corrupt agreement or scheme to conceal the usury which was contemplated by plaintiffs, citing Moss v. Metropolitan Nat’l Bank, 533 S.W.2d 397 (Tex.Civ.App.—Houston [1st Dist.] 1976, no writ); American Century Mortgage Investors v. Regional Center, Ltd., 529 S.W.2d 578 (Tex.Civ.App.—Dallas 1975, writ ref’d n. r. e.); Wagner v. Austin Savings and Loan Ass’n, 525 S.W.2d 724 (Tex.Civ.App.—Beaumont 1975, no writ). All of these cases are distinguishable on their facts. In the Moss case, the borrowers paid fixed sums to three parties other than the lender in addition to the ten percent interest paid to the lender on the loan. The court refused to find usury in that case because the borrowers stipulated that the payees of the fees were not agents of the lender and there was no showing of a scheme whereby the payments to third parties actually accrued to the lender’s benefit. Moss v. Metropolitan Nat’l Bank, 533 S.W.2d at 399. In the American Century case, a corporation signed a note on behalf of an individual borrower and the note provided for interest in excess of the rate allowed for personal loans but within the rate allowed for corporate loans. This court refused to find usury in that transaction where there was no showing that the lender was aware that the borrower was an individual rather than a corporation when it made the loan. American Century Mortgage Investors v. Regional Center, Ltd., 529 S.W.2d at 583. In the Wagner case, the court held that premiums paid to the lending savings and loan over and above interest on a loan were not usury because these fees were specifically authorized by Tex. Rev.Civ.Stat.Ann. art. 852a § 5.07 (Vernon 1964). Wagner v. Austin Savings and Loan Ass’n, 525 S.W.2d at 728.

The cases cited above are inappo-site because here plaintiffs admitted at trial that they were charging fees solely as compensation for the service of lending money, and the amounts of the fees charged are in excess of the legal interest rates. Since these facts are indisputably established by the record, defendant has satisfied his burden of proof to show an agreement to loan money at usurious rates of interest. Plaintiff E. R. Slavik'himself testified that, in exchange for Crescent’s $425,000 in promissory notes, Mobile loaned Crescent only $325,000 at nine percent interest and that the extra $100,000 obligation was owed to Mobile for use of Mobile’s credit in obtaining the money and for undertaking the risk in lending the money to Crescent. Thus, Slavik’s own description of the transaction establishes that the $100,000 was interest, as it is defined by Tex.Rev.Civ.Stat.Ann. art. 5069-1.01(a) (Vernon 1971), which provides: “ ‘Interest’ is the compensation allowed by law for the use or forbearance or detention of money . . . .” Greever v. Persky, 140 Tex. 64, 165 S.W.2d 709 (1942). Under the terms of the original March 1971 transaction, Crescent was obligated to pay almost forty percent interest within a nine-month period on the $325,000 it had borrowed from Mobile, which is more than twice the eighteen percent annual rate of interest authorized for payment by corporations under Tex.Rev.Civ.Stat.Ann. art. 1302-2.09 (Vernon Supp.1976). Moreover, the two later extensions of the indebtedness resulted in two more charges of $20,000 each against Crescent without any additional money changing hands. These charges, which E. R. Slavik testified were consideration for Mobile extending the loans, likewise, were interest within the statutory definition. Greever v. Persky, supra. The true rate of interest contracted for the $325,000 loan was well in excess of the statutory limit. Accordingly, we hold that, as a matter of law, the notes sued upon are usurious and unenforceable.

Plaintiffs further contend that they can legally exact an additional “and distinctly separate” consideration for lending the money without violating the usury laws, citing Gonzales County Savings and Loan Ass’n v. Freeman, 534 S.W.2d 903, 906 (Tex.1976). Although that case does recognize that certain types of fees may be charged in connection with the creation of options to borrow, apart from the interest charged for the making of the loan, where, as in this case, a charge is admittedly compensation for the use, forbearance, or detention of money, it is, by definition, interest regardless of the label placed upon it or the artfulness with which it is concealed. Indeed, the supreme court in Gonzales Savings held that we must look beyond the superficial appearances of the transactions to their substance in determining the existence or nonexistence of usury.

Plaintiffs also contend that this usury has nothing to do with their lawsuit against Skeen because these loans were made to Crescent, not to Skeen. We cannot agree. In March 1973, when Skeen issued his personal note to Mobile for $235,950, it is apparent from the sums involved that Skeen was assuming the indebtedness of Crescent to Mobile carried through the various transactions from March 1971, outlined above. This indebtedness must, therefore, have necessarily included the usurious interest charges against Crescent. First Nat’l Bank of Montague v. Waybourn, 81 Tex. 57, 16 S.W. 554 (1891); Keltner v. Glenn, 81 S.W.2d 1051 (Tex.Civ.App.—Austin 1935, no writ); Burton v. Stayner, 182 S.W. 394, 395 (Tex.Civ.App.—San Antonio 1916, writ ref’d).

Plaintiffs also argue that this earlier usury should have no bearing on the outcome of this litigation because it all occurred before the release and settlement agreement of March 1973, citing Commerce Trust Co. v. Ramp, 135 Tex. 84, 138 S.W.2d 531 (1940), and Southwestern Investment Co. v. Hockley County Seed & Delinting, Inc., 516 S.W.2d 136 (Tex.1974). However, as those cases hold, the fact that these notes were executed before Skeen personally assumed the obligations and before the alleged release and settlement agreement cannot erase the impact of the usury where it is apparent that the usurious charges were carried forward into Skeen’s obligations to Mobile after the settlement agreement without advancement of any additional funds to Skeen. Southwestern Investment Co. v. Hockley County Seed & Delinting, Inc., 516 S.W.2d 136, 137 (Tex.1974); Commerce Trust Co. v. Ramp, 135 Tex. 84, 138 S.W.2d 531, 534 (1940). We hold, therefore, that Skeen does have standing to assert the defense of usury against Mobile on the $235,950 note, notwithstanding the release and settlement agreement, because an examination of the transactions leading up to the issuance of that note indicates that it carried forward a usurious interest obligation at more than double the rate authorized by law.

We turn now to the $310,000 note issued by Skeen to the Slaviks in March 1973 after the release and settlement agreement. Under the “put and call” agreement, Skeen “sold” blocks of shares in Crescent and International World Encyclopedia to the Slaviks for $300,000. However, the agreement provided that the Slaviks could call upon Skeen at any time to repurchase the stock for $360,000. That agreement was entered into in February 1972. Skeen paid the Slaviks $50,000 and issued a note to the Slaviks for $310,000 at the same time that he signed the release and settlement agreement. Instead of purging the transaction of previous usurious interest, this arrangement added more usurious interest by charging interest on notes which carried forward earlier usurious charges. We construe the “put and call” agreement as a loan to Skeen, since he had an absolute obligation to repay the $300,000 advanced to him for the stock, plus $60,000. Under these circumstances, we must hold that the $60,000 constitutes interest for the use of the $300,000 at twenty percent, more than twice the rate of interest allowed for personal loans under article 5069-1.02 (Vernon 1971). Johns v. Jaeb, 518 S.W.2d 857 (Tex.Civ.App.—Dallas 1974, no writ). After the payment of $50,000, the $310,000 note plainly carries forward the original obligations under the “put and call” arrangement, notwithstanding the release and settlement agreement. As we discussed with respect to the Mobile note, the fact that the new note was issued by Skeen for $310,000 pursuant to the release and settlement agreement does not prevent Skeen from raising the usury defense where it is apparent from the amounts in the transactions involved that this note carries forward the usury of the original agreement. Commerce Trust Co. v. Ramp, 135 Tex. 84, 138 S.W.2d 531, 534 (1940).

In light of our holdings that both of the promissory notes sued upon by plaintiffs are tainted by usurious interest in excess of twice the rate authorized by the law, we must conclude that Skeen has no liability for the remaining principal and interest on either of the notes under article 5069-1.-06(2) (Vernon 1971) and that the judgment of the trial court granting damages, foreclosure on the collateral, and attorneys’ fees, based on such liability, must be reversed. Accordingly, we reverse the judgment of the trial court and render judgment that plaintiffs take nothing.

Reversed and rendered.

      . The following is a summary of the transactions involved in this suit:
      March 4, 1971 — Crescent received $325,000 from Mobile Parks of America Crescent issued three notes:
      $250,000 interest-bearing, secured note
      75,000 interest-bearing, secured note
      100,000 noninterest-bearing, unsecured note
      _ $425,000 Total obligation
      June 30, 1971 — Crescent paid $20,000 installment on $100,000 note.
      August 2, 1971 — Three notes of March 4, 1971 were cancelled. No new money advanced, but additional $20,000 obligation in new notes, infra.
      Crescent issued three new notes — all unsecured and guaranteed by Skeen:
      $175,000
      170,000
      80.000
      $425,000 Total obligation
      September 15, 1971 — Crescent paid $175,000 note
      December 15, 1971 — Remaining two notes of August 2, 1971 were cancelled.
      No new money advanced, but $20,000 extension fee charged. Crescent borrowed $50,-000 from Skeen; applied same to reduce balance under old notes
      Crescent issued two new notes personally guaranteed by Skeen:
      $120,000
      100.000
      $220,000 Total obligation
      February 28, 1972 — Skeen received $300,000 from Slaviks “Put-call” agreement for $360,-000 payback.
      March 5, 1973 — Skeen paid $50,000 to Slaviks under “put-call” agreement
      Skeen paid $5,000 to Passman; releases exchanged; no new money
      Skeen issued two new notes:
      $310,000 To Slaviks per “put-call” agreement
      235,950 To Mobile Parks of America per _ Crescent obligation
      $545,950 Total obligation


author: CORNELIUS, Justice.

text:
    Rufus ALLEN, d/b/a A & B Motors, Appellant, v. Bill PARSONS, Appellee.
    No. 8475.
    Court of Civil Appeals of Texas, Texarkana.
    Aug. 16, 1977.
    Rehearing Denied Sept. 13, 1977.

      Donald B. Friedman, Harkness, Friedman & Kusin, Texarkana, for appellant.
    James B. Cranford, Jr., Smith, Stroud, McClerkin, Conway & Dunn, Texarkana, Ark., for appellee.
   CORNELIUS, Justice.

Appellee brought this action against appellant under the Texas Consumer Protection Act to recover damages arising from a deceptive trade practice and a breach of warranty allegedly committed by appellant in the sale of a used pickup truck. Appellee alleged that appellant made false and misleading statements as to the quality, standard or grade of such vehicle and that he failed to comply with certain warranties concerning the vehicle, thereby entitling ap-pellee to treble damages pursuant to the applicable statutory provisions. Section 17.46(b)(7)(13) and 17.50 of the Consumer Protection Act (Supp.1976-1977) and Sections 2.313, 2.314 and 2.315 of the Texas Business and Commerce Code were specifically cited as authorizing a recovery.

Trial was to the court without the aid of a jury. The evidence revealed that appellant acquired the used pickup truck by trade, and on the same day appellee inquired about purchasing it. Appellant disclaimed any knowledge as to the condition or quality of the truck but agreed to sell it to appellee for $250.00. Appellee stated that he could not use the truck unless it had a valid inspection sticker affixed to it. Appellant then agreed that if appellee would do the necessary work to enable the vehicle to pass inspection, he would place a valid Texas inspection sticker on it. On that basis the sale was made. Appellee paid $100.00 down and agreed to pay the balance at $15.00 per week. Appellee took possession of the truck, had some minor work done on the lights and windshield wipers so that it would pass inspection, and brought it to appellant several times for the inspection sticker, but the sticker was not affixed. Some two weeks passed, and as appellee had not made the agreed weekly payments, appellant repossessed the truck. After repossessing it, appellant affixed an inspection sticker to the truck and resold it to another person. The evidence was conflicting as to why the inspection sticker was not affixed while appellee had possession of the truck. Appellant testified that he told ap-pellee that he would have to bring the truck to his place of business after 5:00 o’clock in the afternoon for the inspection sticker because that was the only time he would have a man at his shop who could affix the sticker, and that appellee did not bring the truck to his shop at the correct time. Ap-pellee’s evidence was to the effect that no mention was made of any time to bring the truck to appellant’s place of business and that appellant simply refused to comply with his agreement. It was further revealed that near appellant’s place of business there was another shop where an inspection sticker could have been conveniently obtained.

The trial court found, inter alia, that appellant agreed to place a valid inspection sticker on the truck; the truck was taken to appellant several times for the sticker; no special condition was agreed upon as to the time or place of inspection; appellant made misrepresentations to appellee relative to the agreement to place an inspection sticker upon the truck; and appellant refused to have the sticker affixed even though adequate facilities were available for him to do so. Based upon those and other findings, the trial court rendered judgment for ap-pellee for the sum of $300.00 (the $100.00 down payment trebled), together with costs and attorney’s fees. Appellant’s principal contention is that there is no evidence in the record to support the trial court’s judgment on the grounds specified.

Section 17.50 of the Consumer Protection Act makes it clear that when an express or implied warranty is made in connection with the sale of goods and the person making such warranty fails to comply therewith, a recovery of treble damages, costs and attorney’s fees is authorized. Section 2.313 of the Texas Business and Commerce Code provides that “Any . . . promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the . promise.”

The questions for determination then, are: (1) Did the agreement of appellant to place a valid inspection sticker on the truck constitute an express warranty under Section 2.313 of the Texas Business and Commerce Code, and (2) if so, was there evidence that appellant breached that warranty?

In its usual context, an agreement to perform certain acts in the future would not constitute a warranty of goods, but a simple contract. In the instant case, however, the truck could not be lawfully driven upon the highways unless and until it had a valid inspection sticker affixed to it. It was undisputed that appellee needed the truck for use on the highways and purchased it for that express purpose. The placing of the sticker on the truck therefore became essential to its usability. It seems to us that the promise to place the sticker on the truck falls in the same category as a promise, made as a part of the sale bargain, to repair a vehicle or to place a part or an accessory on a vehicle. In either case, compliance with the promise is essential to make the vehicle reasonably usable, or to bring it to or maintain it at the standard or grade which the seller represents it will meet. We hold that the agreement to place an inspection sticker on the truck related tó the goods, was a part of the basis of the bargain, and constituted an express warranty under Sec. 2.313.

Concerning a breach of the warranty, the evidence shows that appellant eventually placed a valid inspection sticker on the truck, but the act was done only after appellant had repossessed the truck from appellee and had agreed to sell it to another purchaser. The sticker was not affixed at any time while appellee had the ownership, possession or use of the truck, although the trial court found that appellant had both the opportunity and the obligation to do so during that time. Placing the sticker on the truck after appellee had lost the right and opportunity to use the vehicle certainly did not constitute compliance with appellant’s agreement as found by the trial court. Consequently, the finding that appellant failed and refused to comply with the warranty is supported by evidence.

It is also contended that appellee’s pleadings were insufficient to authorize the court’s judgment. Appellee pleaded generally that appellant made certain “representations and warranties” which were breached, and that he was entitled to treble damages and attorney’s fees under Section 17.50 of the Deceptive Trade Practice Act and Section 2.313 of the Texas Business and Commerce Code. Although the specific warranty relied upon was not pleaded, appellant filed no exception to the pleading as required by Tex.R.Civ.P. 90 and 91 in such cases. The lack of specificity was therefore waived, and under the circumstances the pleadings were sufficient to authorize the judgment. 2 McDonalds, Texas Civil Practice, Sec. 7.17, p. 203, Sec. 2.21, p. 212.

As appellee established the alleged breach of warranty, he was entitled under Section 17.50(a)(2) and (b)(1) to a recovery of treble damages, costs and attorney’s fees. It is undisputed that appellee paid $100.00 on the truck and that no restitution had been made. Judgment for $300.00 was thus authorized. See Crawford Chevrolet Co. v. McLarty, 519 S.W.2d 656 (Tex.Civ.App. Amarillo 1975, no writ). The parties stipulated that the trial court could set reasonable attorney’s fees, if they were lawfully recoverable. No complaint has been made of the amount set by the court.

Appellant’s other points of error have been considered and are overruled. The judgment of the trial court is affirmed.

      . Tex.Bus. & Comm.Code Ann. § 17.41, et seq. (Supp. 1976-1977).

      . § 17.46 . . .
      (b) The term “false, misleading, or deceptive acts or practices” includes, but is not limited to, the following acts:
      (7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
      (13) knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service;
      § 17.50 . . .
      (a) A consumer may maintain an action if he has been adversely affected by any of the following:
      (1) the use or employment by any person of an act or practice declared to be unlawful by Section 17.46 of this subchapter;
      (2) a failure by any person to comply with an express or implied warranty,

      (b) In a suit filed under this section, each consumer who prevails may obtain:
      (1) three times the amount of actual damages plus court costs and attorneys’ fees reasonable . . .
      § 2.313 . . .
      (a) Express warranties by the seller are created as follows:
      (1) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

      § 2.314 . . .
      (a) Unless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.
      (b) Goods to be merchantable must be at least such as
      (3)are fit for the ordinary purposes for which such goods are used;
      § 2.315 . . .
      Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified unde the next section an implied warranty that the goods shall be fit for such purpose.


author: ELLIS, Chief Justice.

text:
    TEXAS EMPLOYERS’ INSURANCE ASSOCIATION, Appellant, v. Doris M. ADAMS, Appellee.
    No. 8778.
    Court of Civil Appeals of Texas, Amarillo.
    Aug. 22, 1977.
    Rehearing Denied Sept. 19, 1977.

      Underwood, Wilson, Sutton, Berry, Stein & Johnson, R. A. Wilson, Amarillo, for appellant.
    Neely & Mason, Thomas A. Neely, Wichita Falls, for appellee.
   ELLIS, Chief Justice.

In this workmen’s compensation case, the trial court rendered judgment based on a jury verdict favorable to Mrs. Doris M. Adams, plaintiff, against Texas Employers’ Insurance Association, the defendant insurance carrier, for death benefits resulting from the fatal personal injuries suffered by her son, Tony Michael Adams, in a vehicular accident on a public highway as he was on his way to work for his employer. In its appeal, the insurance carrier contends that under the circumstances of this case the death of Adams was not compensable under the Workmen’s Compensation Law of Texas. Also, the defendant-carrier complains of the manner in which the controlling issue was submitted and to the admission of certain testimony asserted to be objectionable and prejudicial. We overrule the carrier’s contentions and affirm the judgment of the trial court.

On September 24, 1974, four members of a drilling crew employed by Leonard Hudson Drilling Company, Inc., were riding in an automobile en route from Booker, Texas, to a drilling rig, located about 70 miles away, near Miami, Texas. The driller, Elmer Miller, was the driver of the automobile. The passengers were: David Miller, Elmer Miller’s son, a derrick hand; Tom Casey, the chain hand; and Tony Adams, the fireman. It was raining and the chu-gholes in the road were filled with water. About 14 miles south of Booker the automobile hit the water-filled chugholes in such manner that the driver lost control of the car and hit some trees. Tony Adams and the driller, Elmer Miller, received injuries in the accident from which they died.

This suit originated as an appeal by Mrs. Doris M. Adams, the mother and statutory beneficiary of Tony Adams, deceased, from the action of the Industrial Accident Board in denying her claim for death benefits. In the trial before a jury, the verdict was favorable to Mrs. Adams and the trial court rendered judgment in accordance with the verdict. The insurance carrier has appealed from the judgment on nine points of error.

In its first point of error, the insurer contends that since the fatal injuries suffered by Tony Adams occurred in a one-car vehicular accident on a public highway as he was on his way to work without the showing of any prerequisite under Section lb of Article 8309, Tex.Rev.Civ.Stat.Ann., his death was not compensable and the court erred in overruling the carrier’s motions for instructed verdict and judgment non obstante veredicto. In its second point, the carrier asserts there is no competent evidence to support the jury’s finding that the fatal injury was received in the course of Tony Adams’ employment by Leonard Hudson Drilling Company.

The pertinent provisions of Sections 1 and lb of Article 8309 are:

“Section 1. . ‘(I)njury sustained in the course of employment. . . .’
******
(4) . shall include all other injuries of every kind and character having to do with and originating in the work, business, trade or profession of the employer received by an employee while engaged in or about the furtherance of the affairs or business of his employer whether upon the employer’s premises or elsewhere. . . .”
******
“Section lb. Unless transportation is furnished as a part of the contract of employment or is paid for by the employer, or unless the means of such transportation are under the control of the employer, or unless the employee is directed in his employment to proceed from one place to another place, such transportation shall not be the basis for a claim that an injury occurring during the course of such transportation is sustained in the course of employment. . . .”

Prom a review of the evidence we find that the disputed testimony created a fact issue as to whether Hudson furnished transportation as a part of the contract of employment, or transportation was paid for by the employer. Leonard Hudson agreed that he paid $10.00 “per diem,” but denied it was paid for driving. As set out below, his statement was controverted by the testimony of Tom Casey, Mrs. Miller, the widow of the deceased driller, as well as by Vaughn, his tool pusher, as set out in a portion of Vaughn’s statement attached to the Carrier’s Narrative Summary filed with the Industrial Accident Board.

At the time of the accident Hudson Drilling Company was paying the driller, Elmer Miller, the owner and driver of the automobile, the sum of $10.00 “per diem.” Tom Casey testified that about a month before the accident there was a change by the company in the manner of handling transportation for the crew. Prior to this change, according to Casey, it had been the practice of the crew members to take turns driving their cars to the rig, and if a crew member did not have transportation another crew member could drive in his place and pay for the driving crew member’s gas and oil. Tony Adams did not drive a car in the car pooling arrangement because his car was not in good shape and the driller would drive in his place. The record reflects that the crew was unhappy about the employer’s failure to pay driving time. Dobbs Hudson, the drilling superintendent, discussed this matter of driving time with Casey and others and, according to Casey, he agreed that they (the company) “were going to start it up pretty soon.” The basis for the discontent was the long drive of approximately 70 miles to the rig and .that .it was costing them a “lot of money.” Casey further testified that this was not the first time the subject of driving time had been discussed, and that they had been talking about it for three months, or more.

After the above mentioned discussion with Dobbs Hudson, a letter regarding .the matter in question was sent .out by Leonard Hudson about two weeks before the fatal accident. Leonard Hudson was unable to locate the letter that went out, but he testified that he knew the letter identified the $10.00 as a $10.00 per diem to the driller and to the driller only. Mrs. Miller, the widow of the deceased driller, stated that the letter used the specific language, “driving expenses,” and that the $10.00 per day was paid as driving expenses. Mrs. Miller also stated that it was the driller’s responsibility to pick up the crew members and get the crew to the rig. Leonard Hudson testified that it is part of the driller’s job to see that he has all members of the crew on the job, although he denied that the driller was required to transport them. Mrs. Miller stated further that before September 8, 1974, each of the crew members drove the crew every fourth day, and that during the entire period after September 8, 1974, until the date of the accident, her husband, Elmer Miller, drove his car to the rig. The check stubs introduced in evidence disclosed that the driller had received $160.00 for the 16 days between the time of the alleged change in the policy and the date of the accident. Casey stated that he understood that the $10.00 per day was for driving time and that a member of the crew could get the $10.00 per day. Also, Casey stated that subsequent to the policy change, Hudson put the payment for driving time on the check as “per diem” and, after the change, the driller drove every day. Clois Vaughn, who, according to Leonard. Hudson, was the tool pusher and, in such capacity, was .the supervisor of drilling operations, made the statement that the driller was paid for driving. This statement concerning driving pay was a portion of Vaughn’s statement attached to the Carrier’s Narrative Summary filed before the Industrial Accident Board.

Thus, the record demonstrates that the' testimony of Hudson, Casey, Mrs. Miller and the statement of the tool pusher created a fact issue concerning the vital question of payment for driving time. Reasonable persons could differ as to the truth of the controlling facts. The weight and credibility of the evidence was for determination by the jury.

We have concluded that the evidence supports the finding that, at the time of the accident, Tony Adams was engaged in the furtherance of the affairs or business of his employer. The evidence discloses that the rig operated 24 hours a day, that the crew generally rode together to work at the rig located approximately 70 miles distant, before as well as after September 8, 1974, and that after the change in policy with respect to the payment of $10.00 per diem, the driller picked up the members of the crew and transported them to the rig. Thus, the evidence sufficiently raised the issue for submission to the jury as to whether the deceased was in the scope and course of his employment within the terms of the instruction submitted in accordance with Article 8309(lb) regarding the matter as to whether transportation was furnished as a part of his contract of employment, or paid for by his employer, and- not merely furnished as a gratuitous accommodation to the employee.

In view of the foregoing it is our opinion that the court did not err in overruling the carrier’s motions for instructed verdict and judgment non obstante veredicto. This holding, we believe, is in all essential respects, consistent with the holdings in the recent cases of Texas Employers’ Insurance Association v. Byrd, 548 S.W.2d 460 (Tex.Civ.App.—El Paso 1976, writ pending) and Liberty Mat. Ins. Co. v. Chestnut, 539 S.W.2d 924 (Tex.Civ.App.—El Paso 1976, writ pending) dealing with analogous factual situations. Also, see Texas Employers’ Insurance Association v. Inge, 146 Tex. 347, 208 S.W.2d 867 (1948). Points 1 and 2 are overruled.

In its third point, the carrier asserts that the jury’s finding that the fatal injury was received in the course of Tony Adams’ employment by Leonard Hudson Drilling Company is so against the great weight and preponderance of the evidence as to be clearly wrong. It is argued by the carrier that the controlling factor in Inge, Chestnut and Byrd, relied upon by the plaintiff, is that, under the facts of those cases, it was necessary that the employer furnish transportation in order to secure employees. In any event, in the instant case, after Casey and others discussed their dissatisfaction with Dobbs Hudson, the drilling superintendent, regarding the company’s failure to pay driving time, a change in policy was effected, i. e., the payment of the extra $10.00 per diem to the driller who drove his car, transported the crew to the remote location of the rig, and which per diem the wife of the driller characterized as compensation for driving time. Also, Casey, a crew member, regarded such compensation as payment for driving time. Further, prior to the change in policy, Leonard Hudson testified that one of his tool pushers told him that if he did not pay driving time, he couldn’t get crews. Although Casey testified there were more “hands” than jobs, a change in policy was in fact effected after crew members had expressed dissatisfaction concerning the failure to pay driving time. The change was apparently made for the basic reasons that transportation or mileage was paid in the above cited cases, i. e., remoteness of location of the rig and the importance of the driller having his crew regularly assembled and available for work at the rig.

It is our opinion that under the facts and circumstances the change effectively resulted in the drilling company furnishing transportation as a part of the contract of employment, or the employees’ transportation was paid for by the employer—not as a mere accommodation. In the light of the foregoing, we have concluded that the jury’s finding that the fatal injury was received by Tony Adams during the course of his employment with the drilling company is not so against the great weight and preponderance of the evidence as to be clearly wrong. Point 3 is overruled.

In points 4 and 5, the carrier insists that the court materially erred in including in the instruction to the jury the language “unless the transportation is furnished by the Employer as a part of the contract” and the language “or is paid for by the Employer.” Specifically, the carrier insists that if the court agrees with the carrier’s no evidence contention as to either phase of the above instruction, it is not possible to determine which of the two above quoted factual theories the jury followed in returning its answer, “we do.”

It is our opinion that the foregoing instructions submitted are in statutory form (Art. 8309 lb) and that the matters included in the instruction were adequately raised by the evidence concerning the controlling issue submitted by the court. Since the ultimate issue as raised by the evidence under the pertinent statute was submitted, evi-dentiary fragments were not required to be submitted. Maryland Casualty Company v. Smithson, 341 S.W.2d 951 (Tex.Civ.App.—Dallas 1960, writ ref’d n. r. e.). Also see Janak v. Texas Employers’ Insurance Association, 381 S.W.2d 176 (Tex.1964), v/herein a similar charge was given. Points 4 and 5 are overruled.

In points 6 and 7, the carrier insists that its specific objection should have been sustained and its requested instruction should have been given wherein it sought to have the jury instructed that the per diem payment could constitute payment for transportation only if made for the purpose of providing transportation for the deceased. However, it is our opinion that the objection and requested instructions pertained to only another phase of the issue submitted. An examination of the instructions submitted and a consideration of the evidence discloses that the ultimate issue and instructions were submitted in accordance with the provisions of Section 1 of Article 8309 and that portion of Section lb of Article 8309, as raised by the evidence. See Liberty Mutual Insurance Company v. Hopkins, 422 S.W.2d 203 (Tex.Civ.App.—Beaumont 1967, writ ref’d n. r. e.). Also see, Jecker v. Western Alliance Insurance Company, 369 S.W.2d 776, 777 (Tex.1963) wherein an analogous charge was submitted. Points 6 and 7 are overruled.

In point 8, the carrier insists that its objections to the court’s charge should have been sustained and contends that under the language of the court’s charge, payment as a gratuity, as distinguished from payment pursuant to the contract of employment, would form the basis of an affirmative “we do” answer which defeats the purpose of the statute. We disagree. The court’s charge as submitted properly followed the statutory language, and a fair interpretation of the language is that if the employer “furnished” transportation as a part of the contract, or if transportation is “paid for” it could not be regarded as a gratuitous accommodation. Also, under the evidence in this case, it is our opinion that no gratuitous accommodation was involved, but rather the evidence demonstrated that the method here employed with respect to the transportation arrangement was clearly a way of effecting a policy paying for or furnishing transportation for employees in connection with the furtherance of the employer’s business. See Agricultural Insurance Co. v. Dryden, 398 S.W.2d 745 (Tex.1965). Point 8 is overruled.

In its ninth point, the carrier contends that the trial court materially erred in receiving in evidence over the defendant’s hearsay objection that portion of the Carrier’s Narrative Summary filed before the Industrial Accident Board, wherein the carrier recites from a statement allegedly attached by Clois Vaughn (the employer’s tool pusher) to the effect that the driller was paid for driving. Leonard Hudson testified that he had not paid and does not pay for driving time or driving expenses. The statement by the tool pusher made as a part of the Narrative Summary was properly admitted on the basis that the carrier had taken a position before the Industrial Accident Board inconsistent with its position in the trial of the case, and that such inconsistency constituted an admission against interest and the hearsay objection has no application. See: Charter Oak Fire Insurance Company v. Adams, 488 S.W.2d 548 (Tex.Civ.App.—Dallas 1972, writ ref’d n. r. e.); Transamerica Insurance Company v. Beseda, 443 S.W.2d 915 (Tex.Civ.App.—Corpus Christi 1969, writ ref’d n. r. e.).

The statement signed by the employer’s representative setting out that the employer did pay driving expenses was presented before the Board, while, at trial, Leonard Hudson testified that the employer did not pay driving time or driving expenses. The payment for driving expenses or driving time was the critical question in this death case. It was the statement of the carrier encompassing Vaughn’s statement that was introduced. The separate statement of Vaughn himself was not introduced, but only a portion of that recited in the Carrier’s Summary. See Texas Employers’ Insurance Association v. Weber, 386 S.W.2d 835 (Tex.Civ.App.—Austin 1965, writ ref’d n. r. e.). Moreover, even if the statement encompassed in the Carrier’s Report should be deemed inadmissible, it has not been established that the admission of such statement brought about an improper verdict. The evidence contained in the statement alleged to be inadmissible was only cumulative of the testimony of Tom Casey and Mrs. Miller with respect to the crucial question. Point 9 is overruled.

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