author: McKAY, Justice.

text:
    Annie Lou McPHERSON, Independent Executrix of Estate of A. B. McPherson, Deceased, Appellant, v. The LONGVIEW UNITED PENTECOSTAL CHURCH, INC., Appellee.
    No. 898.
    Court of Civil Appeals of Texas, Tyler.
    July 15, 1976.
    Rehearing Denied Aug. 26, 1976.

      Merritt H. Gibson, Earl Sharp, Sharp, Ward & Ross, Longview, for appellant.
    Rex A. Nichols, Nichols & Parker, Long-view, for appellee.
   McKAY, Justice.

This suit was brought by appellee, The Longview United Pentecostal Church, against the building contractor, A. B. McPherson, now deceased, on a contract for the construction of a church building and parking lot for appellee. Annie Lou McPherson, Independant Executrix of the Estate of A. B. McPherson, was substituted as a party. Appellant answered that appel-lee had abandoned the plans and specifications and made many changes, and that appellee took possession and occupied the building to the exclusion of appellant and in so doing waived any claim that the building was not constructed according to the plans and specifications. Appellant also filed a cross-action seeking $21,809.85 for the extras for changes and additions in materials and equipment requested by appellee, for judgment on a deed of trust note executed by appellee in the sum of $138,000 together with interest and attorney’s fee and for damages for failure to pay for the extras.

Trial was before a jury, and the trial court, after disregarding issue 15, rendered judgment that appellant recover $12,715.86 with interest from February 18, 1972 to May 2, 1975, at 6% per annum, and $2,451.87 for extra work and materials, making total recovery of $15,167.73. The principal amount of the note had been paid during the pendency of the suit on April 19, 1973.

Appellee (church) alleged that in July, 1971, it entered into a contract with McPherson by which he agreed to construct a certain church building and appurtenances thereto in Longview in accordance with plans and specifications prepared by an architect, and that the church agreed to pay McPherson the sum of $138,000.00 upon completion and acceptance of the improvements by the church. The church further alleged (1) that McPherson agreed to obtain and pay for the interim financing; (2) that the church had obtained a commitment for permanent financing; and (3) that as an accommodation to McPherson and in order to aid him to obtain interim financing, the church executed and delivered to McPherson its promissory note payable on or before 180 days, in the amount of $138,000.00 together with a deed of trust on the property on which such church was to be built. The pleadings of the church further alleged that McPherson failed and refused to construct a parking lot as required by the contract until after the church employed an attorney. McPherson finally completed the parking lot in July, 1972, but he failed and refused to pay the cost of materials used therein. The church also plead that McPherson failed and refused to pay the cost of pews which had been installed and for which demand had been made by the supplier of the pews. Allegations were also made that there were various items of poor workmanship by McPherson and that he failed to complete work on the building. It was also alleged there were extra items of work and materials furnished by McPherson which needed adjusting.

Appellee church also alleged that unreasonable demands had been made by McPherson and the First State Bank of Gladewater for payment of the $138,000.00 note as well as interest and attorney’s fee. The church prayed that the date of substantial completion of the contract be determined, that it be relieved of any obligation to pay interest before substantial completion and that it be relieved of any obligation to pay attorney’s fees.

Appellant’s answer and cross-action alleged that the church, in consideration of McPherson’s oral agreement to construct improvements according to plans and specifications, on August 23, 1973, executed and delivered to appellant its promissory note for $138,000.00, payable on or before 180 days from date. Appellant asserted the note was unpaid except for the principal sum of $138,000.00 paid April 19,1973, leaving unpaid principal, interest and attorney’s fees of $31,510.00. Appellant also alleged that the church took possession of the building without the consent of McPherson. Appellant described in some detail the changes and extras in the building which were not a part of the original contract, prayed for recovery of $21,809.85 as the reasonable net value of extras furnished, and asked for $3,000.00 as damages for failure to pay for extras. Appellant also sought the $31,-510.00 allegedly due on the note as of April 19, 1973, and for interest and attorney’s fees after that date. Appellant did not claim any interest on the note from date to maturity.

The trial was before a jury and the verdict was substantially as follows:

1.Several items of materials and labor were found to be extras not contemplated by the contract.

2. Found the reasonable value of the itemized extras.

3. Reasonable value of supervision, overhead and profit for contractor on work done by McPherson in making changes and alterations in the church building was 10%.

4. The date that appellee church accepted the building as complete was February 18, 1972.

5. The jury failed to find that the church took over possession of the building after the contractor told them not to do so.

6. McPherson substantially completed his construction contract with the church in July, 1972.

7. The jury failed to find that McPherson was prevented from completing the contract by February 19, 1972, by the conduct of the church.

8. McPherson had not completed the contract on March 17, 1972.

9. The note bearing date of August 23, 1971, was executed by the church to McPherson to enable him to secure interim financing from the First State Bank of Gladewater.

10. First State Bank of Gladewater, on or about March 17, 1972, was the owner of the note dated August 23, 1971, and the deed of trust lien given to secure payment of such note.

11. The provision in the note dated August 23, 1971, executed by the church payable to McPherson providing for interest from date of execution to maturity at the rate of 7½% per annum was contrary to the terms of the contract whereby McPherson agreed to furnish his own interim financing.

12. On March 17, 1972, the permanent financing the church had arranged for through First Federal Savings and Loan Association could not be secured because the contract of July 22, 1971, had not been completed.

13. The payment of the sum of $138,-000.00 was made as soon as practical after an agreement was entered into that the matter of extras under the contract, interest and attorney’s fees would be determined by the lawsuit.

14. The jury failed to find that appellant is entitled to recover any attorney’s fees.

15. Appellant is entitled to recover reasonable interest of $3,700.00.

Appellant filed a motion to disregard the findings of the jury and the answers to issues 5 through 15. The trial court disregarded issue 15 only and otherwise overruled appellant’s motion and rendered judgment for appellant as above mentioned.

Appellant’s first point maintains that the judgment of the trial court should be reversed because the court denied appellant’s motion for judgment on the promissory note executed by appellee church. We sustain this point. In reaching that conclusion, we must deal with the questions of (1) whether the unsigned instrument dated July 22,1971, constituted a written contract for the construction of the church and parking lot; (2) whether appellee church was an accommodation party; and (3) whether the note of August 23,1971, as a separate writing, may be considered together with the contract of July 22, 1971.

THE UNSIGNED INSTRUMENT OF JULY 22, 1971

Appellant argues that the unsigned instrument of July 22, 1971, was not a contract because there was no delivery and no unconditional acceptance by the church; rather, it was only a proposal. We disagree. McPherson, the builder, testified that he entered into an agreement or contract with the Longview United Pentecostal Church, Inc., to construct a church building here in Longview, Texas. Referring to the unsigned contract, McPherson testified as follows:

“Q. Well Mr. McPherson, do you recall having previously testified under oath that the contract that you had with the Church was based on the proposal that you made to them?
“A. On the original plan, yes sir.
“Q. And the proposal that you drew up as to what you said you would do that has a date on it was the only contract or agreement you had with the Church, wasn’t it?
“A. It was that little contract that— “Q. Yes, sir, that was the contract and agreement that you had with the church, isn’t that true?
“A. Yes, sir, as far as that and the papers we had fixed up for the bank.
“Q. But your proposal that you made to them was the basis of the contract and agreement between you and the Church, wasn’t it?
“A. Well, it was on that little old slip that we made up and that was as I stated, you know, for—
“Q. And that was made up after all negotiations and talk and everything about how we would do it ceased, wasn’t it?
“A. Well, that was when they wanted to — when they started my interim financing.
“Q. Right. Thank you, sir.
“A. And not either one of them, Mr. Nichols, was ever signed or anything, they just wanted a record you know.
“Q. But that was the agreement and contract whether it was signed or wasn’t signed is what you’ve testified a minute ago?
“A. Yes, sir, it was made up for that particular purpose.”

Kershaw, president of the church corporation, testified concerning the unsigned July 22, 1971, contract:

“Q. Reverend Kershaw, was there any other agreement for the construction of the Church other than is identified here in Plaintiff’s Exhibit Number 1 with Mr. A. B. McPherson?
“A. No sir.”

It seems to be undisputed that the unsigned contract of July 22, 1971, was a contract and was the contract agreed upon by McPherson, the builder, and Kershaw, the president of the church, for the construction of the church building. There was mutual agreement; there was a meeting of the minds of the parties implied and evidenced by their conduct and course of dealing which showed their consent to be bound. Haws & Garrett General Contractors, Inc. v. Gorbett Brothers Welding Co., Inc., 480 S.W.2d 607, 609 (Tex.1972). Even though several changes were made in the plans and specifications during the progress of construction, the July 22, 1971, unsigned contract was considered and acknowledged by both parties as the contract for the construction of the church and parking lot.

We are of the opinion that the record reflects that all the facts and circumstances lead to the conclusion that it was the intention of the parties that the July 22, 1971, instrument was the contract of the parties and the conduct of both parties so indicates. “An unsigned agreement all the terms of which are embodied in a writing, unconditionally assented to by both parties, is a written contract.” Simmons and Simmons Construction Co. v. Rea, 155 Tex. 353, 286 S.W.2d 415 (1955). It should also be noted that appellant did not request an issue on whether there was a contract but relied entirely upon the action on the note. We hold there was a written contract.

THE CHURCH AS AN ACCOMMODATION PARTY

Appellee church maintains that the $138,000.00 note was executed for the purpose of aiding and assisting McPherson to obtain the interim financing which he agreed to provide in the contract, thus making the church an accommodation maker. The church obtained a jury finding in issue 9 that the note was executed by the church to McPherson to enable him to secure interim financing from the First State Bank of Gladewater.

Appellee church also claims there was a failure of consideration for the execution of the deed of trust note as against McPherson, and that since McPherson reacquired the note from the bank before the trial he was not a holder in due course and such claim is good as against him. The church further took the position that McPherson had made unreasonable and wrongful demands upon it for interest and attorney’s fees before the construction contract had been substantially completed. There was no sworn plea of failure of consideration.

Appellant argues that the defense of “accommodation maker” is unavailable unless the note was executed without present or anticipated personal profit, gain or advantage, and that pleading “accommodation maker” is tantamount to pleading the note was executed without consideration; and, therefore, must be verified under Rule 93(g), T.R.C.P. Further argument is made by appellant that the trial court should have rendered judgment on the cross-action on the note against appellee because under Section 3.415, Texas Business and Commerce Code (UCC), appellee, as accommodation maker, would have had recourse against appellant as the party accommodated, and with the enforcement of that right of recourse, appellee would have obtained a building free of cost and McPherson would have received nothing.

Section 3.415, Texas Business and Commerce Code (UCC), provides in part:

“(a) An accommodation party is one who signs the instrument in any capacity for the purpose of lending his name to another party to it.
“(b) When the instrument has been taken for value before it is due the accommodation party is liable in the capacity in which he has signed even though the taker knows of the accommodation.
* * * * * *
“(e) An accommodation party is not liable to the party accommodated, and if he pays the instrument has a right of recourse on the instrument against such party.”

The July 22, 1971, contract provided that McPherson was obligated to provide the interim financing at his own cost. The record reveals the church did not know where McPherson would obtain the interim financing. The witness Kershaw testified that the purpose in executing the note and deed of trust was “so Mr. McPherson could finance himself to build the building,” and they were executed solely to accommodate him in order that he could perform under the contract and get his interim financing.

There is no question here of a holder in due course. The bank is not a party to the suit. McPherson assigned the note to the bank as soon as he received it, but at the time of trial the bank had reassigned the note to him. The jury answered in issue 9 that the note was executed by the church to enable McPherson to obtain interim financing from the bank, and in issue 11 the jury found that the provision in the note for interest from date at the rate of 7½ per cent per annum was contrary to the terms of the contract whereby McPherson agreed to furnish his own interim financing. The record reveals that each time McPherson needed an advance on his interim financing, the bank required him to sign his personal note for each draw, and such advance was not credited to the $138,000 note previously assigned by him to the bank.

The quoted provision of the TB&C Code defines an accommodation party as “one who signs the instrument in any capacity for the purpose of lending his name to another party to it.” According to 9 Tex. Jur.2nd, Bills and Notes, Sec. 63, p. 75, “He (accommodation party) is always a surety, which includes a guarantor, and that is his only distinguishing feature. He differs from other sureties only in that his liability is on the instrument and he is a surety for another party to it.” See Note 1, Sec. 3.415, T.B. & C. Code.

In 2 Anderson, Uniform Commercial Code, Sec. 3-415:4, p. 1000 (1971), it is stated, “one who signs an instrument in any capacity for the purpose of lending his name to another party to it is an accommodation party, regardless of whether he received any compensation for so acting or did so gratuitously.”

We are of the opinion that the church was not an accommodation party as defined by the UCC. The church was the maker of the note and McPherson was the payee; the church did not sign as a surety. The execution of the note may have been done as “an accommodation” to McPherson but the facts do not constitute the church an accommodation party. If the church was an accommodation party it would not be liable to the party accommodated, and the fact that an accommodation party did not receive any consideration is immaterial. 2 Anderson, UCC, Sec. 3-415:8, p. 1002.

While the jury found that the church executed the note to enable McPherson to secure interim financing, the church did not become an accommodation party as a matter of law. It did not lend its name to another party to it as a surety. No contention is made that there was a conditional delivery or delivery for a special purpose, nor was there evidence to that effect.

There is a distinction between a pa-rol condition affecting the delivery of a negotiable instrument and one affecting its payment. Delivery of a negotiable instrument upon a condition or for a special purpose only may be shown by parol as between the immediate parties to it. Kuper v. Schmidt, 161 Tex. 189, 338 S.W.2d 948, 952 (1960); Helmke v. Prasifka, 17 S.W.2d 463, 465 (Tex.Civ.App., San Antonio 1929, writ ref’d); Abell v. Waggoner, 391 S.W.2d 91, 93 (Tex.Civ.App., Amarillo 1965, no writ); Cicero Smith Lumber Co v. Gaston, 447 S.W.2d 736, 738 (Tex.Civ.App., Amarillo 1969, writ ref’d n.r.e.); Texas Export Development Corp. v. Schleder, 519 S.W.2d 134, 137 (Tex.Civ.App., Dallas 1974, no writ); Tex.Bus. & Comm.Code, Sec. 3.306.

Section 3.306, T.B. & C. Code, provides:

“Unless he has the rights of a holder in due course any person takes the instrument subject to
⅜ * ⅝: * * ⅝:
“(3) the defenses of want or failure of consideration * * * or delivery for a special purpose * * *”

If delivery is on condition or for a special purpose the note never becomes operational. Helmke v. Prasifka, supra; Schwarz v. Straus-Frank Co., 382 S.W.2d 176 (Tex.Civ.App., San Antonio 1964, writ ref’d n.r.e.).

A parol condition or agreement relating to payment of a delivered note, as we are here concerned with, is not enforceable if it operates to add to, take away or vary the terms of the written agreement. Kuper v. Schmidt, supra; Helmke v. Prasifka, supra; Shepherd v. Erickson, 416 S.W.2d 450, 452 (Tex.Civ.App., Houston [1st Dist.] 1967, writ ref’d n.r.e.); Roseborough v. Phillips, 389 S.W.2d 593, 596 (Tex.Civ.App., Dallas 1965, no writ).

CONSIDERING THE NOTE AND CONTRACT TOGETHER

The contract was dated July 22, 1971, and, though unsigned, we have concluded it was a written contract. The note was dated August 23, 1971, and, even though it pertained to financing the construction which was the subject of the contract, it made no reference to such contract. In rendering judgment the trial court apparently acted upon the premise that if the provisions of the note conflicted with the provisions of the contract then the conflicting provisions of the note must give way to the contract, and the court apparently construed the evidence and verdict as constituting appellee church an accommodation party. We do not agree with that premise.

In considering the question of whether a later contract is deemed to be independent this court said in M. J. Delaney Co. v. Murchison, 393 S.W.2d 705, 709 (Tex.Civ.App. 1965, no writ):

“The question of whether a later contract is to be deemed as an independent one or to become incorporated with or correlated to the old agreement is to be determined by the intention of the parties as expressed in the later agreement. Frierson v. International Agricultural Corp., 24 Tenn.App. 616, 148 S.W.2d 27. (Emphasis added.)
“ ‘In order that separate writings may be considered together their relation or connection with each other must appear on their face; and this requirement is satisfied either by express reference from one writing to the other, or, at least where each writing is signed, by internal evidence of their unity.’ Briden v. Osborne, 184 S.W.2d 860 (Tex.Civ.App.).”

We are not overlooking the general rule in Texas that where two or more instruments, executed contemporaneously or at different times, pertain to the same transaction, the instruments will be read together even though they do not expressly refer to each other. Board of Ins. Com’rs. v. Great Southern Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803 (1951); Texas State Bank of Austin v. Sharp, 506 S.W.2d 761, 763 (Tex.Civ.App., Austin 1974, writ ref’d n.r.e.).

And the rule is also applicable to instruments executed in connection with the same transaction when one of the instruments is a promissory note. Texas State Bank of Austin v. Sharp, supra.

The T.B. & C. Code (U.C.C.), Sec. 3.119(a) provides:

“Other Writings Affecting Instrument “(a) As between the obligor and his immediate obligee or any transferee the terms of an instrument may be modified or affected by any other written agreement executed as a part of the same transaction, except that a holder in due course is not affected by any limitation of his rights arising out of the separate written agreement if he had no notice of the limitation when he took the instrument.”

Comment No. 3 under the above UCC section states, “If there is outright contradiction between the two, as where the note is for $1,000 but the accompanying mortgage recites that it is for $2,000, the note may be held to stand on its own feet and not to be affected by the contradiction.”

And in 2 Anderson, Uniform Commercial Code, Sec, 3-119:3, p. 732, is found this language:

“The fact that contemporaneous agreements are construed together does not mean that in contemplation of law they are reduced to being a single instrument where this would be contrary to the intention of the parties. That is, although contemporaneous, the agreements may have been intended to be separate instruments and to provide for entirely different things. Thus, it has been said that the pledge of real estate to secure a promise to pay is another distinct agreement which ordinarily is not intended to affect in the least a promise to pay in a promissory note but only to give a remedy for failure to carry out that promise. In the absence of incorporation of one instrument by another, their meaning may be such that it may be held that the provisions of one are not to be read into the other * * *” (Emphasis added.)

There being no reference in the note to the contract we hold that they are not to be read together as one contract. Therefore, the last writing between the parties will prevail, and the terms and provisions of the note are enforceable against appellee.

If we are mistaken in our conclusion that the contract and the note are not to be read together as one contract, then, if they be interpreted together, and they are inconsistent, the later one prevails, and the remainder of the first contract, not being inconsistent in substance and purpose with the second, may be enforced. Crown Western Investments, Inc. v. Mercantile National Bank at Dallas, 504 S.W.2d 785, 789 (Tex.Civ.App., Tyler 1974, no writ).

The judgment of the trial court is reversed and the cause is remanded to that court with instructions to render judgment for appellant for interest from maturity and attorney’s fees according to the terms and conditions of the note.

      . “July 22, 1971
      “APOSTOLIC PENTECOSTAL CHURCH
      “LONGVIEW, TEXAS
      “JOHN KERSHAW, PASTOR
      “I, A. B. MCPHERSON, HEREIN AFTER RE-FERED (SIC) TO AS CONTRACTOR DO HEREBY AGREE TO CONSTRUCT YOUR CHURCH BUILDING IN ACCORDANCE WITH PLANS AND SPECIFICATIONS AGREED UPON IN A GOOD WORKMANSHIP MANNER AND TO CONFORM WITH ALL EXISTING BUILDING CODES OF THE CITY OF LONGVIEW, TEXAS.
      “IT IS FURTHER AGREED THAT THE ASPHALT DRIVEWAY AND PARKING AREA AGREED UPON SHALL BE INSTALLED BY THE BUILDING CONTRACTOR AND THAT THE ALLOWANCE FOR THE PURCHASE OF AUDITORIUM FURNITURE SHALL BE FIVE THOUSAND AND THREE HUNDRED DOLLARS, ($5,300.00) ANY AMOUNT OVER AND ABOVE THIS FIGURE SHALL BE THE RESPONSIBILITY OF THE CHURCH.
      “THE BUILDING CONTRACTOR FURTHER AGREES TO FURNISH ALL LABOR, MATERIALS, TOOLS, INSURANCE, TAPS, PERMITS, FEES AND ALL OTHER EXPENSES NECESSARY TO PREFORM (SIC) A COMPLETE TURN-KEY JOB ON THE WORK AGREED UPON.
      “THE BUILDING CONTRACTOR SHALL BE RESPONSIBLE FOR PROVIDING HIS OWN INTERIM FINANCING FROM WHATEVER SOURCE HE DESIRES BUT DOES AGREE NOT TO DRAW MONEY ON THE JOB OVER AND ABOVE THE VALUE OF THE WORK IN PLACE OR MATERIALS STORED ON THE JOB SITE.
      “WORK IS TO PROGRESS AS IS REASONABLY POSSIBLE BUT NO DEFINITE DATE OF COMPLETION IS REQUIRED. WHEN ALL WORK IS COMPLETED AS PER THE AGREEMENT, AND IS ACCEPTABLE BY THE CHURCH THEN THE TOTAL AMOUNT OF THE CONTRACT, ONE HUNDRED THIRTY-EIGHT THOUSAND DOLLARS, ($138,000.00), IS DUE AND PAYABLE.
      “A.B. McPherson, Building Contractor
      “1202 Walnut Street
      “Gladewater, Texas
      “WE DO HEREBY AGREE TO THE ABOVE TERMS OF THIS AGREEMENT.

      . “Longview, Texas August 23, A.D. 1971
      “ONE HUNDRED EIGHTY (180) DAYS after date, I, we, or either of us, the undersigned, promise to pay to A. B. McPHERSON or order, the sum of ONE HUNDRED THIRTY EIGHT THOUSAND AND NO/1ÓO ($138,000.00) — DOLLARS, with interest thereon from date until maturity at the rate of 7½ per centum per annum, the interest payable at maturity as it accrues, both prinicpal and interest payable at Longview, Texas, for value received.
      “This note, to the extent of the amount herein mentioned, represents money this day borrowed by it from the said A. B. McPherson and, to secure the credit thus extended it has this day, by one (1) certain Deed of Trust, conveyed to C. Q. ABERNATHY, Trustee, the following lot or parcel of land:
      (Property description)
      which said land is fully described in said Deed of Trust.
      “All past due principal and interest on this Note shall bear interest from the maturity thereof until paid, at the rate of ten per centum per annum.
      “It is understood and agreed that failure to pay this Note, as above promised, or any installment of interest hereon, when due, shall, at the option of the holder of said Note, mature same and it shall at once become due and payable, and subject to foreclosure proceedings under said Deed of Trust.
      “And it is hereby specially agreed that if this Note is placed in the hands of an attorney for collection, or if collected by suit or through Probate or Bankruptcy proceedings, the undersigned agree to pay ten per cent additional on the principal and interest then owing hereon as attorney’s fees.
      THE LONGVIEW UNITED PENTECOSTAL CHURCH, IN (sic)
      “Due 23rd day of February, 1972
      BY: _JOHN KERSHAW_ President”


source: Caselaw Access Project

author: PEDEN, Justice.

license: Public Domain

text:
    Roy W. BELL, Appellant, v. Libbie D. BELL, Appellee.
    No. 16689.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    July 15, 1976.
    Rehearing Denied Aug. 12, 1976.

      Garrett & Letbetter, Tom R. Letbetter, George Payne and Max Garrett, Houston, for appellant.

      Franklin R. Navarro, Houston, for appel-lee.
   PEDEN, Justice.

This is an appeal from the granting of a divorce to the plaintiff, Mrs. Libbie Bell, on the grounds of insupportability. Dr. Bell had filed a cross-action on the same grounds and had later amended it to allege that Mrs. Bell had committed adultery during the marriage. A motion to strike the allegations of adultery was granted by the trial court and Dr. Bell was ordered not to introduce evidence of it. A court-appointed master in chancery held hearings and reported his findings. The appellant filed exceptions to the master’s report but agreed to have the trial court, sitting without a jury, enter a decree dissolving the marriage and dividing the property of the parties. The court filed findings of fact and conclusions of law.

Dr. Bell contends in his first three points of error that the court erred: (1) in striking his pleading of adultery because he had a right to plead and prove his statutory grounds for divorce, (2) in refusing to consider evidence of adultery because it would be relevant to division of the property, and (3) in awarding an attorney’s fee to Mrs. Bell’s attorney without considering evidence of adultery.

After Dr. Bell first pleaded adultery, the trial court required him to re-plead and allege the specific dates in question. His amended pleading alleged ten specific dates, the first of which was fourteen days after Mrs. Bell had filed this suit. The court made findings of fact that the allegations of adultery reflected that the alleged conduct occurred after the separation and filing of the suit, that there was no claimed relation to the original asserted grounds for divorce and no claim or pleading that the alleged adultery was cumulative of conduct of the parties prior to the separation. The court relied solely on the pleaded grounds for divorce before the separation and stated that in dividing the property of the parties he took into consideration, among other things, the grounds for divorce pleaded by the parties.

Mrs. Bell denied the allegation in question and contends that when both parties are seeking divorce on primary grounds of no fault or cruel treatment it is not error for the trial judge to eliminate allegations of adultery as an added ground and thus to keep out the possibility of sordid testimony, particularly when it concerns conduct which is alleged to have occurred after the parties have separated and both have sued. She cites Baxla v. Baxla, 522 S.W.2d 736 (Tex.Civ.App.1975, no writ) and Cusack v. Cusack, 491 S.W.2d 714 (Tex.Civ.App.1973, writ dism’d). The court in Baxla, discussing no fault provisions in various state statutes, stated:

“It is, however, clear that the statutes have as their goal the abolition of fault as a requirement for granting divorces. It is also manifestly clear from the legislative history of many, if not all, of the statutes, that the purpose and intent of the legislatures of the various states, including Texas, is to abolish the necessity of presenting sordid and ugly details of conduct on the part of either spouse to the marriage in order to obtain a decree of divorce.”
The court in Cusack stated:
“It also occurs to us that § 3.01 of the Code was incorporated therein as a new, independent and additional ground of divorce to render unnecessary the revealing to public gaze of sordid events that have come to mar two otherwise happy lives.”

Section 3.01 of the Family Code provides that a divorce may be decreed without regard to fault, but Section 3.03 states that a divorce may be decreed in favor of one spouse if the other spouse has committed adultery. The ground is not limited to adultery committed before the separation of the parties.

“Adultery,” as used in a divorce proceeding, means the voluntary sexual intercourse of a married person with one not the husband or wife of the offender. Lawler v. Lawler, 15 S.W.2d 684 (Tex.Civ.App.1929, no writ).

Rule 63, Texas Rules of Civil Procedure, permits parties to amend their pleadings as long as such action does not operate as a surprise to the opposite party.

Mrs. Bell further argues that if the trial judge erred in striking the pleading and excluding the evidence in question the error was harmless because there is no reason to believe that if the evidence had been admitted the trial court would have granted a divorce to the appellant on the ground of adultery instead of granting a no-fault divorce to her; further, that the appellant failed to discharge his burden of showing that had it been admitted the court would probably have divided the property in a different manner.

We conclude that the trial court erred in excluding the allegations and evidence of adultery and in failing to consider them in connection with the division of the community property. In dividing the estate of the parties in a manner that the court deems just and right, it considers all the evidence. “Fault in breaking up the marriage and the benefits the innocent spouse would have received from a continuation of the marriage are factors a court may consider in making a division of property, but they are not the only factors which a court may consider.” Hooper v. Hooper, 403 S.W.2d 215 (Tex.Civ.App.1966, writ dism.); Cooper v. Cooper, 513 S.W.2d 229 (Tex.Civ.App.1974, no writ). See also Hedtke v. Hedtke, 112 Tex. 404, 248 S.W.2d 21 (1923). “The attorney’s fee is but a factor to be considered by the court in making an equitable division of the estate, considering the conditions and needs of the parties and all of the surrounding circumstances.” Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002 (1950).

Having shown error, the appellant has the additional burden of showing, under Rule 434, T.R.C.P., that the exclusion of the evidence in question “amounted to such a denial of the rights of the appellant as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case . . .’’In deciding this question we consider the record as a whole. Duncan v. Smith, 393 S.W.2d 798 (Tex.1965).

After examining the entire record, we cannot say the exclusion of the evidence of adultery probably caused the rendition of an improper judgment. Had the husband been permitted to introduce the circumstantial evidence of adultery alleged to have occurred after both parties had filed pleadings based on insupportability, we cannot say the trial court would probably have awarded the husband any benefit in the division of the parties’ estate as compensation to an innocent spouse for the fault of the wife in breaking up the marriage. The court may have divided the community estate unequally, but the husband’s earning power is considerably greater than the wife’s.

Dr. Bell contends in points of error four through ten that the court erred: (4) by abusing its discretion in appointing a master in chancery because this was not an exceptional case, (5) in overruling the motion to disqualify the master because he was guilty of unjudicious conduct and (6) because it was an abuse of discretion to fail to disqualify the master, (7) in awarding the master a fee because he should not have been appointed and (8) because he should have been removed, (9) in awarding the master a fee of $7,500 because the fee was not reasonable or necessary in this case, and (10) in entering judgment on behalf of the master against Dr. Bell for the fee of the master because under Rule 171, Texas Rules of Civil Procedure, the fee is to be taxed as costs.

The court’s findings included: “That because of numerous motions by both parties which caused many ancillary hearings, and because of the several pieces of property involved, including fractional interest ownership thereon, the nature of Respondent’s business and relocation thereof, the numerous claims and counter claims of the parties as to the community and separate nature of the properties, real and personal, including Respondent’s business, the value, worth and extent thereof,—the Court felt it necessary and did appoint Master in Chancery.”

Concerning the motion to remove the master, the court found that “the conduct of the master was not such as to necessitate his removal and that the master conducted the hearings without prejudice to either party.” The appellant offered proof that the wife’s attorney bought the master coffee and dessert while they visited with the wife for about an hour after one of the hearings before the master and on two other days. This may not have been prudent conduct on the part of either the master or the attorney for the wife, but we conclude, after viewing the entire record, that the trial judge did not err in declining to disqualify the master. The trial judge made his own decisions as to division of the estate of the parties based on the record and did not follow the master’s findings or recommendations.

The trial court appointed the master on the appellee’s motion. We agree with the appellant’s complaint that he should .not have been charged with the fee of the master. By timely objections and exceptions he has preserved any error in the charging of the master’s fee.

Rule 171, Texas Rules of Civil Procedure, was drawn in part from Rule 53, Federal Rules of Civil Procedure,

“but with changes so extensive as to make the authority of federal decisions a problem to be determined on a case-by-case basis . . .”
“The appointment is thus an exceptional proceeding, for which there is no occasion when the matters in dispute are not complex. Examples of causes in which appointment has been found appropriate include . . .: divorce suits where the division of community and segregation of separate property is involved; and similar controversies of substantial complexity in which the increased expense of proceedings before a master will result in offsetting benefits to the parties and the state through a reduction in the complexities of trial. References are less frequent in Texas than in jurisdictions where equity cases are tried without a jury, and an erroneous reference will hardly be reversible (though the error may be of importance in taxing costs), since the parties can preserve their rights to a full jury trial by exceptions to unsatisfactory findings.” 3 McDonald, Texas Civil Practice 32, Discovery and Pretrial Procedure, § 10.17.1 (1970).

The first paragraph of Rule 171, T.R.C.P., begins: “The court may, in exceptional cases, for good cause appoint a master in chancery . . .” This paragraph was adopted from Article 2320, Vernon’s Texas Civil Statutes. Paragraph (b) of Federal Rule 53 makes a similar provision:

“Reference. A reference to a master shall be the exception and not the rule. In actions to be tried by a jury, a reference shall be made only when the issues are complicated; in actions to be tried without a jury, save in matters of account and of difficult computation of damages, a reference shall be made only upon a showing that some exceptional condition requires it.”

The United States Supreme Court has said that the words “exception” and “exceptional” as used in the reference rule are not elastic terms with the trial court the sole judge of their elasticity. Litigants are entitled to a trial by the court in every suit, save where exceptional circumstances are shown. Congestion in itself is not such an exceptional circumstance as to warrant a reference to a master, nor the length of time a trial will take. The court further stated, in that antitrust suit, that the complexity of the issues of both fact and law is an impelling reason for trial before a regular, experienced trial judge rather than before a temporary substitute appointed on an ad hoc basis and ordinarily not experienced in judicial work. La Buy v. Howes Leather Co., 352 U.S. 249 at 260, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957).

The trial court is not authorized under Texas Rule 171 to appoint a master in chancery in other than exceptional cases and not then except for good cause. Creg- lar v. Hyde, 280 S.W.2d 783 (Tex.Civ.App.1955, writ ref. n. r. e.).

Attorney General’s Opinion H-609 (1975) was given in response to a letter calling attention to the extreme congestion existing in the domestic relations courts of Dallas County and inquiring whether salaried employees of the county could be made available for appointment as masters. They were to have been employed by the County Clerk to serve as fact-finders for the courts of domestic relations. The Attorney General’s opinion expressed the belief that the Rule 171 requirements of “exceptional case” and “good cause” prevent such a practice and cited these cases as ones considered exceptional by Texas appellate courts: Housing Authority of the City of Dallas v. Hubbell, 325 S.W.2d 880 (Tex.Civ.App.1959, writ ref. n. r. e.) and Strickland Transportation Co. v. Navajo Freight Lines, Inc., 387 S.W.2d 720 (Tex.Civ.App.1964, no writ). The opinion concluded with this statement: “Court congestion does not in itself make every case an exceptional case nor furnish good cause for such an appointment.”

The dockets of the courts of domestic relations in Harris County are heavily crowded, and it is clear that the time of those courts was saved by having a master receive the evidence in this case. We do not agree, however, that this case falls within the category of “exceptional” cases to which reference to a master is restricted by Rule 171. The reference to a master was error but does not require that the entire judgment be reversed, since the appellant could have had a jury trial on all unsatisfactory findings of the master. We hold that it was reversible error to require Dr. Bell to pay $7,500 as a master’s fee to have this case litigated. It is noteworthy that almost all of the opinions given in testimony by the wife’s experts showed less equity in the properties than did the inventory filed by the husband. This fact could not have been ascertained before appointment of a master, but it was known before his fee was fixed at $7,500 and taxed against the husband.

The parties were mature adults. They lived together as husband and wife only about eighteen months and had been married about thirty-four months when the divorce was granted. No children were involved. The wife was not employed during the marriage; the husband is a dentist and moved his practice during the marriage, intending to make it more specialized. As the trial judge noted, the husband’s earning capacity is far greater than the wife’s. After an ancillary hearing the husband was required to pay temporary alimony of $1,000 per month and the payments on the parties’ home and an automobile; she was awarded the use of them. Both parties were temporarily enjoined from certain activities and were required to file complete inventories. A jury fee was paid.

On motion of the appellee, the trial court appointed an attorney as master to receive and report evidence as to the estate of the parties, community and separate. The trial court found that the parties’ community estate consisted of clothing, personal effects and specified items of the following: furniture and furnishings, two automobiles, two club memberships, equity in a toWnhouse, shares of stock in a bank, an interest in a restaurant, interests in each of three tracts of land, and a dental practice (including physical assets, leasehold improvements, and accounts receivable). The husband’s separate estate was found to consist of clothing, persMal effects, arid’ specified items of the following: sports equipment, furniture and furnishings, an old automobile, various insurance policies, a rent house, books, and a few shares of stock. The master did not evaluate the specified items, but the trial judge did. The total of his evaluations was $128,504.55 for the community estate and $28,683.50 for the husband’s separate estate. The trial judge found that community funds were spent in relocating the husband’s dental practice.

The trial judge confirmed in part the master’s findings but modified them, substantially reducing his recommendation as to the awarding of property to the wife.

Roberson v. Roberson, 420 S.W.2d 495 (Tex.Civ.App.1967, writ ref. n. r. e.), was a divorce case. Reference to a master does not appear to have been opposed. The appellate court approved reference to a master, but the opinion shows that its facts were much more complex than those in our case and that it was an exceptional ease.

Dr. Bell contends in points of error eleven through fourteen that the trial court erred in dividing the property of the parties (11) because such division was unjust, wrong and inequitable, (12) because there was no evidence to justify an unequal division of the property between the parties, (13) because there was no evidence to support the court’s findings as to value of the Timbercrest property, the Forest Lake property, the Diary property, the townhouse, the Adams Apple 5% interest and the dental practice, (14) because the court’s findings as to the value of those properties were so against the great weight and preponderance of the evidence as to be unjust and wrong.

Section 3.63 of the Texas Family Code provides:

“In a decree of divorce or annulment the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.”

The trial court is given wide discretion in disposing of the property of the parties, separate or community, and its action in the exercise of such discretion should be reversed on appeal only where an abuse of it is shown in that the disposition made of some property is manifestly unjust and unfair. Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21 (1923); Ex Parte Scott, 133 Tex. 1, 123 S.W.2d 306 (Tex.1939); Hailey v. Hailey, 160 Tex. 372, 331 S.W.2d 299 (Tex.1960). An equal division of the property is not required. In the exercise of its discretion, the court may consider, among other things, the age and physical condition of the parties, their relative need for future support, fault in breaking up the marriage, benefits the innocent spouse would have received from a continuation of the marriage, the size of the estate and the relative abilities of the parties. Hudson v. Hudson, 308 S.W.2d 140 (Tex.Civ.App.1957, no writ); Duncan v. Duncan, 374 S.W.2d 800 (Tex.Civ.App.1964, no writ); Middlesworth v. Middlesworth, 380 S.W.2d 790 (Tex.Civ.App.1964, no writ); Pickitt v. Pickitt, 401 S.W.2d 846 (Tex.Civ.App.1966, no writ).

In our case the trial court stated in its findings of fact:

“In regard to the division of property, . the Court considered all facets of the case, to wit: the grounds of divorce based upon discord and conflict as pled by both parties in their original and amended pleadings, the parties and their particular circumstances, the relatively short period of marriage, the earning capacity of the parties, the community and separate nature of the properties both real and personal. There was considered by the Court the income of Respondent from his dental practice and in particular the relocation thereof and expenditures of community funds and effort incident thereto. There was no dispute of the fact that Respondent’s earning capacity was far greater than that of Petitioner and that he had managed the income and handled the various and sundry investments during the marriage. The Court is mindful of the fact that some of the investments were successful and some were not successful. There was also considered by the Court testimony in regard to Petitioner’s attorney’s fees, the costs and expenditures made by both parties, and the master’s fee.”

The trial court placed these values on the community property he awarded to Mrs. Bell:

2. Furniture 5,089.
3. 1973 Oldsmobile 3,500.

Dr. Bell was also ordered to pay:

5. Attorney's fee of Mrs. Bell 7,500. Total $43,089.

The court placed these values on the community property awarded to Dr. Bell:

Forest Lake 12,666.
Diary property 5,500.
Adams Apple 6,120.
Shot guns 200.
Commercial State Bank Stock 4,400.
Membership, Riverbend Country Club 1/500.
Membership, University Club 350.
1971 Cadillac 1,800.
Dental Practice 41.210.
Total $112,915.

Dr. Bell was ordered to pay:

Attorney's fee for Mrs. Bell 7,500.
Master's fee 7,500.
-35.000. $77,915.

Dr. Bell’s share of the community property is further reduced by outstanding debts and notes payable. The divorce decree did not have the effect of releasing Mrs. Bell’s liability as far as the creditors are concerned. Most of the debts were incurred in connection with Dr. Bell’s dental practice and his investments, and the trial court apparently considered that he should assume the primary responsibility, for paying them since he was awarded the practice and the investments. He does not complain by specific point of error that the trial court erred in requiring him, as between the parties, to pay these debts. The debts are not property or a charge on property. We hold that the trial judge did not abuse his discretion in dividing the parties’ estate unless the evidence was insufficient to support his findings as to the values assigned; we look now to those values.

Dr. Bell contends the court erred in finding these values: (1) Timbercrest, $89,169;. (2) Forest Lake, $12,666; (3) Diary property, $5,500; (4) Adams Apple, $6,120 and (5) the dental practice, $41,210.55. These were the only items of community property whose values were seriously disputed. The values found by the trial judge as to the first three are those Dr. Bell gave in financial statements he filed with various banks. The value of the dental practice was obtained from Jack Rose, an expert witness. The trial judge apparently used only his values for physical assets (except office and dental supplies), leasehold improvements, and accounts receivable, less “liens and pay-ables.” Good will was not included. Mr. Woodyard, a business broker and appraiser, testified that the market value of Dr. Bell’s Adams Apple interest was $23,400. Dr. Bell stated in his inventory dated October 2, 1974, that the value of his interest in the Adams Apple was $15,000. In either his inventory or his financial statements he gave higher evaluations for the other assets in question than the trial judge found. Conversely, the expert witnesses called by the appellee gave lower evaluations. The general rule is that a party does not vouch for the accuracy of opinion evidence and is not bound by what an expert says. West v. Houston Lighting & Power Co., 483 S.W.2d 352 (Tex.Civ.App.1972, no writ) and cases cited. We hold that the evidence supports the evaluations in question.

Dr. Bell’s 15th point of error is that the trial court erred “in failing to consider reimbursement of the separate property estate of respondent for separate property expenditures made by him with regard to the property to be divided between the parties.” He says that prior to the marriage he had the following separate property that was not considered by the court: Union Bank balance of $5,777.50, Memorial Bank balance of $1,474.98, $3,700 cash in a safety deposit box, Pinemont State Bank balance of $119, and accounts receivable from the dental practice of $26,179. Dr. Bell testified he had loans outstanding before the marriage of six or seven thousand dollars, that before his marriage to Libbie Bell he acquired a house on Pinerock, and that he and Libbie Bell lived there for only about six months before he sold it for $55,400. He deposited $35,300 of the proceeds in a new account styled R. W. Bell, Separate Account. He admits that this money was used for expenses or lost in investments. We hold that the appellant has not shown error under this point.

The appellant’s last point of error is that the trial court erred in placing a lien on his property to secure payment of the $20,000 to the appellee because it includes his separate property and thus amounts to the taking of an interest in it, in violation of the Constitution and laws of the State of Texas. We overrule this point. “It has been held that an equitable lien may be imposed on the separate property of the husband to secure the payment of a money judgment as part of the wife’s interest in the total property of the parties.” In Re Marriage of Jackson, 506 S.W.2d 261, 267 (Tex.Civ.App.1974, writ dis.) and cases cited therein.

The judgment of the trial court is in all things affirmed except as to the awarding of a judgment for $7,500 in favor of the master against Dr. Bell. We sever this provision of the judgment. Rule 171 provides that compensation of the master shall be taxed as costs of suit. Under Rule 131 the successful party recovers costs of his adversary, but Rule 141 provides that the court may, for good cause stated in the record, adjudge the costs otherwise. Finding that the trial court abused its discretion in taxing the master’s fee as costs against Dr. Bell, but noting that the appellee invited the error of submitting to a master the division of the parties’ estate, we remand to the trial court the taxing of the master’s fee.

By “motion for rehearing” the appellant requests only a clarification of our holding that he should not have been charged with the fee of the master. Our conclusion was that no part of the master’s fee should have been taxed to or charged against him. The motion for rehearing is overruled.


author: McDONALD, Chief Justice.

text:
    J. T. ARNETT GRAIN COMPANY INC. et al., Appellants, v. HOBBS TRAILERS, a division of Fruehauf Corporation, Appellee.
    No. 5555.
    Court of Civil Appeals of Texas, Waco.
    July 15, 1976.
    Rehearing Denied Aug. 19, 1976.

      Davey, Conrad, Enderby, Fitzgerald & Zimmermann, Ken R. Davey, Dallas, for appellants.
    Mays, Jacobs & Pevehouse, J. C. Jacobs, Corsicana, for appellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by appellants Arnett from judgment NOV, rendered in favor of appellee Hobbs.

Arnett filed suit against Hobbs on January 26,1973 for a) Damages resulting from 4 defective and inadequate Arctic trailer air conditioning units Hobbs had sold Arnett, and b) To enjoin Hobbs from repossessing certain trailers.

On March 13, 1973 the trial court enjoined Hobbs from repossessing 3 trailers leased to Arnett (units 260, 257 and 258), and 9 purchased units.

On September 12, 1974 Arnett filed 1st Amended Petition: 1) seeking damages on account of the 4 defective Arctic trailer air conditioners; and 2) plead Hobbs represented that the 3 leased units would belong to Arnett at the end of the lease period upon payment of $1. each; that such representations were false; made to induce Arnett to enter the agreements; that same were material; relied upon by Arnett; and that Arnett had tendered the $1. payment for each trailer. Arnett prayed for 1) damages for the 4 defective Arctic units; and 2) title and possession of the 3 leased trailers.

On October 9, 1974 Hobbs filed 1st Amended Answer and Cross Action.

Hobbs’ answer plead: 1) The 4 year statute of limitations bars Arnett’s recovery of damages for the 4 defective Arctic air conditioners; 2) The 3 trailers sought by Ar-nett were leased to Arnett, such leases having expired May 31, 1973; 3) The written leases for same constituted the entire agreement, and cannot be varied by parol evidence.

Hobbs’ cross action plead: 1) Arnett owes Hobbs $11,081.28 due on purchase contracts of trailers; 2) Arnett retained the 3 leased units (260, 257, and 258) for 16 months after such leases expired, and owes Hobbs $13,-440. for reasonable rental after such leases expired.

On April 7, 1975 Arnett filed 1st Amended Answer to Hobbs’ cross action reasserting: 1) Entitlement to damages on account of the 4 defective Arctic air conditioning units; and 2) That the 3 lease contracts were induced by fraud.

Trial was to a jury pertinent findings of which are summarized as follows:

1) Hobbs knew the purpose for which the Arctic units were purchased.
2) Arnett relied on the skill and experience of Hobbs in purchasing the Arctic units.
3) Hobbs should have known Arnett would rely on its skill and experience in furnishing refrigeration equipment to do the work for which it was intended.
4) The Arctic units were not suitable to do the work for which Arnett bought them.
5) Arnett suffered damage as a result of the unsuitability of the Arctic units.
6) At the time Arnett leased the trailers from Hobbs, Harper did not tell Ar-nett the leases were actually lease-purchase agreements under which Arnett could pay a residual sum at the end of the lease periods and get title to the trailers.
7) At the time Arnett leased the trailers from Hobbs, Harper told Arnett the leases were actually lease-purchase agreements under which Arnett could pay $1. for each trailer at the end of the lease period and get title to the trailers.
8) At the time such statements were made, Harper had authority from Hobbs to make them.
9) Such representations by Harper were false.
10) Harper did not know the representations he made to Arnett were false.
11) Arnett relied on such false representations in entering the lease contracts.
12) Such representations were material inducements to Arnett to enter the lease contracts.
13), 14) Fixed Arnett’s damages on account of the defective Arctic units; A) $1872.; B) $1782.25; C) $1752.25; D) $1752.25.
15) Under the agreements of the parties Arnett would be entitled to ownership of the trailers for $1. each at the end of the leasing periods.
16) The Arctic units were not selected by Arnett relying on his own knowledge.
17), 18), 19) The reasonable rental value per month of trailer # 257 is $275.; of # 258 is $275.; of # 260 is $325.

Both Arnett and Hobbs moved for judgment.

The trial court rendered judgment:

1) Holding Arnett’s cause of action on the air conditioning units established by Issues 1 thru 5 barred by limitation.
2) Holding Arnett not entitled to recover the 3 leased trailers under Issues 6 thru 11, and 15, because the answers of the jury to such special issues “are in violation of the Parol Evidence Rule.”
3) Decreeing recovery by Hobbs against Arnett for $11,081.28 on accounts due, plus interest at 6% from April 16, 1975;
4) Decreeing recovery by Hobbs against Arnett for $13,440, as reasonable rental value of the 3 leased units after expiration of the leases.

Arnett appeals on 6 points summarized as follows:

1) Points 4 and 5 assert the trial court erred in rendering judgment NOV on Arnett’s cause of action for fraudulent inducement of the lease contracts, because such was supported by pleadings, evidence, and jury findings; and erred in holding the Parol Evidence Rule excluded proof of fraud in the inducement of such lease contracts.
2) Points 1, 2 and 3 assert the trial court erred in granting judgment NOV on a holding Arnett’s cause of action for the air conditioning units was barred by limitation, because the Statute of Limitation is inapplicable.

Succinctly stated the case proceeded to trial under pleadings wherein Hobbs sought judgment against Arnett for $11,081.28 for accounts due; and for $13,440. reasonable rental of trailers # 257, # 258, and # 260, allegedly retained by Arnett after leases on same had expired.

Arnett plead for offset against Hobbs for any amounts he owed, on account of defective air conditioning units which Hobbs sold Arnett; and plead the leases on trailers # 257, # 258 and # 260 were induced by fraud of Hobbs, and were actually lease-purchase agreements under which Arnett would own the trailers at the expiration of the leases upon payment of $1., each which he had tendered.

The evidence was undisputed that Arnett owed Hobbs $11,081.28; the jury fixed Ar-nett’s damages at $7158.75 for the defective air conditioners; found the lease contracts on the 3 leased trailers were induced by fraud; were actually lease-purchase agreements under which Arnett could pay $1. for each trailer at end of the lease period; and get title to the trailers.

As noted the trial court rendered judgment holding: “Arnett’s cause of action on the air conditioning units barred by limitation; 2) the Parol Evidence Rule precluded Arnett from showing the true agreement on the 3 leased trailers; and decreeing Hobbs recover against Arnett: 1) for $11,-081.28 on accounts owed; and 2) $13,340. rental on the 3 leased trailers after expiration of the leases.

Contention 1 asserts the trial court erred in rendering judgment NOV on Arnett’s cause of action for fraudulent inducement of the lease contracts; and in holding the Parol Evidence Rule excluded proof of fraud in the inducement of such contracts.

One who is induced by fraud to enter into a contract has his choice of remedies. He may stand to the bargain and recover damages, or he may rescind; and the parol evidence rule does not stand in the way of proof of such fraud. Dallas Farm Machinery Co. v. Reaves, 158 Tex. 1, 307 S.W.2d 233; Berry v. Abilene Savings Ass’n, Tex.Civ.App. (Eastland) NRE, 513 S.W.2d 872; Central Motor Co. v. Thompson, Tex.Civ.App. (Waco) NWH, 465 S.W.2d 405.

Hobbs’ witnesses Rowle, Meyer, Case, Shumate and Griffin all testified that Hobbs had 2 types of leases:

1) Where the customer pays the full price in the lease, and gets title to the equipment at the conclusion of the lease for $1. and 2) Where the customer pays rental only, and gets title at the conclusion of the lease for a “residual value”.

Arnett and the witness Harper, (employee of Hobbs who dealt with Arnett), both testified that the leases here involved were full payout leases, and that Arnett was told he would get title to the trailers for $1. at the conclusion of the lease period. Arnett tendered $1. on the 3 lease units to Hobbs. There is evidence the lease-purchase arrangements were set up for tax purposes; and that the buyer (lessee) just had to rely on Hobbs’ honesty to convey title at the conclusion of the lease period. There is evidence that the leases here involved were (by the amount of the monthly lease payments) “residual value” leases; and that the “residual value” of the trailers here involved were approximately $1400., $1400., and $1700.

There is evidence that the fair market value of the 3 leased units at expiration of the lease were in excess of $6000. each.

Arnett plead fraud in the inducement; the jury found same; and the evidence is ample to sustain such findings. And parol evidence is admissible to prove such facts.

Contention 1 is sustained.

Contention 2 asserts the trial court erred in granting judgment NOV on a holding Arnett’s cause for damage for the defective air conditioning units was barred by limitation. The damages on account of the defective air conditioners in jury finding 13, were on trailers in no way related to Hobbs’ claim for $11,081.28.

Where the subject matter of a defense interposed by a defendant constitutes an independent cause of action which does not go to the foundation of plaintiff’s demand, it cannot effect a reduction of the amount of the plaintiff’s recovery except by way of set-off, and the statutes of limitation are available to the plaintiff in respect to such defense. Morriss-Buick Co. v. Davis, 127 Tex. 41, 91 S.W.2d 313; So. Pacific Co. v. Porter, 160 Tex. 329, 331 S.W.2d 42.

Since the damages on account of the air conditioning units were not related to Hobbs’ claim for the $11,081.28, the statute of limitations under the record is available to Hobbs.

Contention 2 is overruled.

The judgment of the trial court is reversed and judgment is here rendered awarding:

1) Arnett title and possession to trailer units # 257, # 258, and # 260.
2) Hobbs’ judgment against Arnett for $11,081.28, plus interest at 6% from April 16, 1975.

REVERSED AND RENDERED IN PART; AFFIRMED IN PART.