text:
    Betsy E. COPLIN, Appellant, v. Gerald R. COPLIN, Appellee.
    No. 19859.
    Court of Civil Appeals of Texas, Dallas.
    Jan. 16, 1979.
    Larry S. Parnass, Irving, for appellant.
    Gerald R. Coplin, pro se.
    Before GUITTARD, C. J., STOREY and HUMPHREYS, JJ.
   GUITTARD, Chief Justice.

Appellee moves to dismiss the appeal in this divorce case on the ground that appellant is estopped to appeal by acceptance of benefits under the judgment. He also asserts that appellant should be barred from appealing because she has disobeyed certain provisions of the judgment and has failed to present a complete statement of facts. We hold that none of the grounds alleged establishes lack of jurisdiction of the appeal. Consequently, we overrule the motion to dismiss.

The leading case on the question of estop-pel to appeal is Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002, 1004 (1950). In that case the court announced the rule that a party who has voluntarily accepted the benefits of a judgment is estopped to appeal from it, but recognized an exception to the effect that an appeal may be taken if a reversal cannot possibly affect the appellant’s right to the benefit accepted. The court held that the exception did not apply because the appellant was complaining that the judgment erroneously set aside to the appellee certain real estate as her separate property, but he had accepted offsets for community funds expended on such property. The court pointed out that if on another trial the real estate in question should be found to be community, the appellee would have to restore the amount received by him under the original judgment, which would be less than the remaining community funds. The court also observed that the right of the appellee to a partition of the real estate might be prejudiced. Thus, it appeared in Carle that a reversal and remand on the grounds urged would have affected the appellant’s right to the benefits he had accepted.

Since the Carle rule may cause harsh results, the courts have avoided its application on various grounds. In some cases the economic circumstances of the appellant were such that acceptance of benefits were not considered voluntary. Cole v. Cole, 568 S.W.2d 152 (Tex.Civ.App.—Dallas 1978, no writ); Haggard v. Haggard, 550 S.W.2d 374, 376 (Tex.Civ.App.—Dallas 1977, no writ). Other cases have been held to fall within the exception because the appellant attacked only a part of the judgment, so that a remand on the grounds urged would not affect the appellant’s right to the benefits accepted. Lipshy v. Lipshy, 525 S.W.2d 222, 224 (Tex.Civ.App.—Dallas 1975, writ dism’d); Wallace v. Wallace, 371 S.W.2d 918, 919 (Tex.Civ.App.—San Antonio 1963, writ dism’d).

In the present case, appellant attacks the property division on the ground that the share of community property awarded to her is grossly inadequate. She also complains of provisions of the judgment with respect to custody, support, and attorney’s fees. Appellee’s motion to dismiss alleges that appellant has sold several items of personal property awarded to her by the judgment, has deposited the proceeds in a savings account standing in her name, and has used funds from this account which appellee has reason to believe is “in excess of $1,500.” Since he makes no allegations concerning appellant’s economic circumstances, we cannot determine whether or not her use of the funds was voluntary. Moreover, examination of the judgment indicates that $1,500 is a relatively small item in proportion to the property allotted to her, as well as that allotted to appellee. Consequently, the motion fails to show that a reversal and remand on the grounds asserted would affect appellant’s right to the use of the funds withdrawn from the proceeds of the sale. We conclude that the motion to dismiss is insufficient to establish that appellant is estopped to prosecute this appeal.

Appellee also asserts that appellant is barred from prosecuting the appeal because she has failed to obey the judgment of the trial court with respect to delivery of certain personal property and production of certain records. Appellant denies that she has disobeyed any order of the trial court, and asserts that the trial judge has denied appellee’s motion seeking relief in that court. Resolution of this issue is a matter for the trial court, not for us to decide in determining our jurisdiction of the appeal.

Another ground of appellee’s motion is appellant’s failure to present a complete statement of facts, but this, likewise, is a matter that does not affect our jurisdiction.

Motion overruled.


source: Caselaw Access Project

author: ROBERTSON, Justice.

license: Public Domain

text:
    Nelson PHILLIPS, Jr., et al., Appellants, v. Frank WERTZ and Wife, Dorothea Wertz, Appellees.
    No. 19724.
    Court of Civil Appeals of Texas, Dallas.
    Jan. 23, 1979.
    Rehearing Denied Feb. 21, 1979.

      Bruce Wolitarsky, Ashley & Welch, Dallas, for appellants.
    Wm. Andress, Jr., Dallas, for appellees.
    Before AKIN, ROBERTSON and CARVER, JJ.
   ROBERTSON, Justice.

Appellants appeal from an order directing the district clerk to expunge costs which had been taxed against appellees. These costs were for obtaining certified copies of deeds used in the proceedings by appellants and had been taxed as costs by the district clerk against appellees. We hold that the trial judge correctly expunged these costs because no statutory authority exists authorizing the clerk to charge the items as costs. Accordingly, we affirm.

Appellants contend that these certified copies of deeds should be taxed as costs since they were considered as evidence in the summary judgment hearing and were later admitted into evidence at the trial on the merits. In support of this contention, appellants cite Ela v. Knox, 46 N.H. 16 (1863); Inter City Auto Stage Co. v. Bothell Bus Co., 139 Wash. 674, 247 P. 1040 (1926), and City of New Whatcom v. Bellingham Bay Imp. Co., 16 Wash. 131, 47 P. 236 (1896). The general rule in Texas is that expenses incurred in prosecuting or defending a suit are not recoverable as costs or damages unless recovery for such items is expressly provided for by statute or is recoverable under equitable principles. Hammonds v. Hammonds, 158 Tex. 516, 313 S.W.2d 603, 605 (1958); Brandtjen & Kluge, Inc. v. Manney, 238 S.W.2d 609, 612 (Tex.Civ.App.—Fort Worth 1951, writ ref’d n. r. e.). The cases cited by appellant are from foreign jurisdictions and are not controlling in Texas since our legislature has chosen to set forth by statute the items taxable as costs. Tex.Rev.Civ.Stat.Ann. arts. 3927, 3927b (Vernon Supp. 1978) lists the items that the district clerk shall tax as costs, but certified copies of deeds are not among those enumerated by statute. Consequently, since no question exists with respect to assessing these costs under equitable principles, we hold that the taxing by the clerk of certified copies of deeds as costs was erroneous and that the trial judge properly expunged them. Reaugh v. McCollum Exploration Co., 140 Tex. 322, 167 S.W.2d 727 (1943); Hammonds v. Hammonds, supra.

Affirmed.


author: OSBORN, Justice. PRESLAR, Chief Justice,

text:
    AMOCO PRODUCTION COMPANY, Appellant, v. The FIRST BAPTIST CHURCH OF PYOTE et al., Appellees.
    No. 6748.
    Court of Civil Appeals of Texas, El Paso.
    Feb. 14, 1979.
    Rehearing Denied April 4, 1979.

      Stubbeman, McRae, Sealy, Laughlin & Browder, W. B. Browder, Jr., Richard E. Booth, Midland, for appellant.
    Kerr, Fitz-Gerald & Kerr, Harris E. Kerr, Wm. Monroe Kerr, Midland, for appellees.
   OPINION

OSBORN, Justice.

This case involves the issue of an implied covenant to market natural gas at fair market value under a lease which provides for a royalty based upon the amount realized from the sale of such gas. The trial Court awarded recovery for a sum based upon the price paid by other purchasers of gas from the same well. We affirm that part of the judgment, but reverse and render as to the part which requires that future royalties be based upon the price paid in the future by one specific purchaser of gas from the well in question.

FACTS

The dispute between these parties concerns eighteen leases covering small tracts of land in the Townsite of Pyote, in Section 100, Block F, G & MMB & A Survey, Ward County, Texas. The Appellant owns oil and gas leases covering these tracts, each of which provides that on gas sold at the wells, the royalty shall be Vsth of the amount realized from such sale. There is no dispute in this case concerning the fact that the gas is sold at the well.

The several owners of the oil and gas leasehold estates in tracts of land in Section 100 pooled the same to form the Caprito 100 Unit, containing 640 acres of land. The Appellant’s leases, as pooled, cover 17.14240 percent of the unit. In 1973, the working interest owners drilled a well on this Section, and it was completed as a dual producer from both the Devonian and Ellenberger Formations. The working interest owners have been selling gas to one of four different purchasers, each of whom has its own gas pipeline connected to the well. Under the various gas purchase agreements with the different working interest owners, the total production from the well is sold approximately fifty-three percent to Lone Star Gas Company, twenty percent to Pioneer Natural Gas Company, fourteen percent to Delhi Gas Pipeline Corporation, and thirteen percent to Natural Gas Pipeline Company. All gas production attributable to the various interests of the Appellees has been sold to Pioneer Natural Gas Company and Odessa Natural Gasoline Company, who has acquired its rights under Pioneer.

Natural Gas Pipeline Company transports its gas interstate and the price paid under its contracts are subject to Federal Power Commission regulations, including price regulations. Both Lone Star and Delhi have contracts with their working interest owners which provide for an annual price redetermination provision to reflect current prices of gas each year. The prices they paid from initial production up to the time of trial were as follows:

Lone Star Delhi
Price Per MCF Price Per MCF
.625 Dec. 73 to July 74 .80 Oct. 73 to Oct. 74
1.30 July 74 to July 75 1.30 Oct. 74 to Oct. 75
1.90 July 75 to July 76 1.90 Oct. 75 to Oct. 76
1.95 July 76 thru June 77 1.95 Oct. 76 thru June 77

By reason of production from other wells in neighboring sections, Amoco and Pioneer entered into a gas purchase contract in November, 1969 covering leases then owned by Amoco in nineteen sections of land in Ward County. This twenty-year gas purchase contract provided a price of 17<t per MCF through December 31, 1974, and basically a l<t acceleration every five years of the contract. It also provided for the release of the dedication of acreage not assigned to a producing well as of December 31, 1974. There was no requirement for additional or subsequent dedication to the contract of other leases. In October, 1970, Amoco and Pioneer amended the 1969 gas contract and substituted a new list covering Defendant’s leases in twelve sections of land, including six of the eighteen leases involved in this case. As of June 1, 1975, Amoco entered into a supplemental agreement with Pioneer and Odessa by which Amoco dedicated additional leases to the. 1969 contract, including the other twelve leases involved in this litigation. In return for the dedication of these additional leases, Pioneer and Odessa agreed that the gas from the Capri-to 100 Unit would be increased to 70$ per MCF retroactive to August 1, 1974, and that beginning on August 1, 1975 and each year thereafter, there would be a 1$ per MCF acceleration. Thus, by way of comparison, the Appellees were paid 17$ per MCF for gas produced prior to August, 1974, 70$ per MCF for the next twelve months, 71$ per MCF for the next twelve months, and 72$ per MCF for the remaining months through June, 1977.

FINDINGS AND CONCLUSIONS

The trial Court filed extensive findings of fact and conclusions of law, and determined that Amoco breached no duty with respect to the payment of royalty under the six leases where the gas was dedicated to the Pioneer contract under the 1970 amendment. There is no complaint about that part of the trial Court’s decision. The trial Court further held that Amoco breached its legal duty with respect to the lessors under the twelve leases where gas was dedicated to the Pioneer contract by the 1975 supplement, and further that those parties were entitled to be paid the difference between the amounts which they were paid and the amounts which Lone Star was paying for gas purchased from this well during corresponding periods. In addition, the trial Court ordered that future payments shall be based upon the price paid by Lone Star Gas Company for gas produced from this particular well.

The Appellant presents twenty-three points of error. Basically, the attack is upon four different findings made by the trial Court, and the decision in the case necessarily turns upon those particular findings which are as follows:

“19.
“The market prices of gas produced each month from the Section 100 Well are equal in amount to the prices paid each month by Lone Star Gas Company to the working interest owners in the Section 100 Unit from which Lone Star Gas Company made its purchases, and after June, 1977, the prices to be paid by Lone Star Gas Company to said working interest owners for gas purchased from the well will continue to reflect the then current market value of gas produced from the existing Section 100 Well. * * *
******
“22.
“Defendant, in selling gas with respect to which it owes royalty under and pursuant to the terms of the leases described in subparagraphs (g), (h), (i), (j), (k), (1), (m), (n), (o), (p), (q) and (r) of Paragraph 13 hereof at less than the current fair market value thereof, and in dedicating said leases on June 1, 1975, to its November 18, 1969 Gas Purchase Contract with Pioneer Natural Gas Company as amended and supplemented as hereinabove set forth, breached the legal duties which it at all times pertinent has owed to those Plaintiffs in respect of the leases referred to in subparagraphs (g), (h), (i), (j), (k), (I)-, (m), (n), (o), (p), (q) and (r) of Paragraph 13 hereof.
* * * * * *
“24.
“The language of the Oil and Gas Leases and the language of the Defendant’s Division Orders signed by Plaintiffs, or some of them, do not change or alleviate Defendant’s duties owed by it to its royalty owners in this suit in respect of the marketing of gas at obtainable market prices in which such royalty owners share in the whole benefit obtained by Defendant.
“25.
“The remedy of Plaintiffs claiming under the leases described in subparagraphs (g)> (h), (i), (j), (k), U), (m), (n), (o), (p), (q) and (r) of Paragraph 13 hereof for the period from first production through June, 1977, is to be paid their proportionate part of the difference in price per MCF of gas for each month of production between that paid by Pioneer Natural Gas Company and Odessa Natural Gasoline Company, on the one hand, and Lone Star Gas Company, on the other, less 7.5% thereof, representing production and severance taxes. In respect of production .after June, 1977, Defendant should be ordered to pay Plaintiffs royalty as though the gas had been sold to Lone Star Gas Company under the contracts of Lone Star Gas Company for gas produced from the Section 100 Well.”

MARKETING DUTY

First and foremost is the question of whether Amoco breached any legal duty owed to these Appellees when, some twenty months after the Caprito 100 Well began producing gas, it committed and dedicated such gas to a long-term contract on terms approximately one-half the amount at which gas was then being sold to other purchasers from the same well and with no right for future price redetermination based on market increases, and while doing so obtained for itself extra benefits in respect to other properties in which these Appellees had no interest.

In 1976, this Court in Pritchett v. Forest Oil Corporation, 535 S.W.2d 708 (writ ref’d n.r.e.), based upon the facts set forth in that opinion, concluded that a lessee was not in the position of a trustee with regard to a pooled royalty owner and did not have any fiduciary obligation to such royalty owner. But other cases have clearly recognized a duty, particularly with regard to implied covenants, for a lessee to act fairly and in good faith with regard to the interest of a lessor of a mineral interest.

In McCarter v. Ransom, 473 S.W.2d 235 (Tex.Civ.App.—Corpus Christi 1971, no writ), the Court said:

“The doctrine of implied covenants applies with respect to oil, gas and mineral leases. Implied obligations are as much a part of the lease and are just as binding as though they were expressed. Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684 (1959); Freeport Sulphur Co. v. American Sulphur Royalty Co., 117 Tex. 439, 6 S.W.2d 1039 (1928). Implied covenants, are justified on the ground of necessity and fair dealing. W. T. Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27 (1929).
* * * * * *
“In Expando Production Company v. Marshall, 407 S.W.2d 254 (Tex.Civ.App., Ft. Worth, 1966, wr. ref. n.r.e.), the Court said:
“ ‘There is no doubt but what there is a fiduciary obligation on the part of the lessee to exercise the utmost good faith toward the lessor in exercising the power granted under a pooling provision. * * * ’
“For other authorities holding that the lessee, in creating pooled units under a pooling provision in an oil, gas and mineral lease, is subject to the implied obligation that he act fairly, in good faith and with due regard for the interest of the lessor, see Banks v. Mecom, 410 S.W.2d 300 (Tex.Civ.App., Eastland, 1966, wr. ref. n.r.e.); Tiller v. Fields, 301 S.W.2d 185 (Tex.Civ.App., Texarkana, 1957, n.w. h.).”

In 1977, the Court in Elliott v. Davis, 553 S.W.2d 223 (Tex.Civ.App.—Amarillo, writ ref’d n.r.e.), noted that there is an implied requirement that the lessee exercise good faith in making the determination to pool. That opinion relies upon the standard of good faith described in Kuntz, The Law of Oil and Gas, Vol. 4, Sec. 48.3 at 219 (1972), as follows:

“ * * * Although it has been said that the lessee has a fiduciary obligation in the exercise of the pooling power, it is submitted that the lessee is not a fiduciary and that standards applied to fiduciaries are entirely too strict. This is so because the lessee has not undertaken to manage and develop the property for the sole benefit of the lessor. The lessee has substantial interests that must be taken into account, and he should not be required to subordinate his own interests entirely to the interests of the lessor. Since his interests frequently conflict with those of his lessor, however, he must exercise the power in fairness and in good faith, taking into account the interests of both the lessor and lessee.”

That decision was followed in Amoco Production Company v. Underwood, 558 S.W.2d 509 (Tex.Civ.App.—Eastland 1977, writ ref’d n.r.e.), where the Court affirmed a judgment based upon a jury finding that the designation of the pooled unit “ ‘was not made in good faith.’ ”

Those cases deal only with the pooling rights of the lessee and do not pass upon the marketing obligation of a lessee. Obviously, there is an obligation to market the product once it is discovered. Hemingway, The Law of Oil and Gas, Sec. 8.9(C) (1971). In this case, Amoco met that obligation by entering into a contract to sell the gas produced from the Capri to 100 Unit. But the most basic issue is whether there is a duty or implied covenant to market at any particular price, particularly when the lease provides for a royalty based on the “amount realized from such sale.” We conclude there is an implied covenant to exercise good faith in the marketing of gas, and particularly so where the interests of the lessor and lessee are not identical. Professor Martin, in a recent article entitled “A Modern Look at Implied Covenants to Explore, Develop and Market Under Mineral Leases,” says:

“ * * * there is considerable authority that there is a duty owed by the lessee to obtain the best price possible for the gas, a duty which can arise either under a ‘market value’ or a ‘proceeds’ royalty clause. * * * ”

Twenty-Seventh Annual Institute on Oil and Gas Law and Taxation (1976) 177 at 191.

In his text, Merrill, Covenants Implied in Oil and Gas Leases, 1940, the author on pages 212-214 says:

“ * * * The concept of diligence in marketing should include the duty to realize the highest price obtainable by the exercise of reasonable effort. * * * [Jjustice toward the lessor would seem to require that he should receive the same return as those who had leased to other operators * * *. * * * [H]e is bound to get the best price he can.”

The same pronouncement of this duty appears in Siefkin, “Rights of Lessor and Lessee with Respect to Sale of Gas and as to Gas Royalty Provisions,” Fourth Annual Institute on Oil and Gas Law and Taxation (1953). In that article, the author on page 182 wrote:

“At all events, it is well settled that the lessee is impliedly obligated to ‘market’— to sell or otherwise utilize — the production obtainable from a commercial well. Probably this requires the lessee to secure the highest price reasonably obtainable therefor * *

Some of the historical development of implied covenants is set forth in Summers, The Law of Oil & Gas, Vol. 2, Sec. 416 at 641 (1959). He says:

“The development of standards of diligence for measuring the performance of the oil and gas lessee’s express and implied covenants arising from the policy of development, that is, covenants to test the land, to drill additional wells on discovery, to protect the land from drainage, and to market the product, has been an evolutionary process. These standards, their value for the purposes for which they were created, and their true meaning are perhaps best understood by tracing their origin and development through the decisions of the courts.
“ * * * Justice Van Devanter, in Brewster v. Lanyon Zinc Company said: ‘Whatever in the circumstances, would be reasonably expected of an operator of ordinary prudence, having regard to the interests of both the lessor and his lessee, is what is required.’ * * * ”

The marketing covenant is also discussed in Williams and Meyers, Oil and Gas Law, Vol. 5, Sec. 856.3 (1977). This text states:

“ * * * The greatest possible leeway should be indulged the lessee in his decisions about marketing gas, assuming no conflict of interest between lessor and lessee. Ordinarily, the. interests of the lessor and lessee will coincide; the lessee will have everything to gain and nothing to lose by selling the product. Where the interests of the two diverge and the lessee lacks incentive to market gas, closer supervision of his business judgment will be necessary.”

As noted in footnote 7 on page 410.3 of that text, where the interests of the lessee and lessor do not coincide, the lessee must be held to a stricter standard.

In Le Cuno Oil Company v. Smith, 306 S.W.2d 190 (Tex.Civ.App.—Texarkana 1957, writ ref’d n.r.e.), cert. denied, 356 U.S. 974, 78 S.Ct. 1137, 2 L.Ed.2d 1147, Chief Justice Chaddick considered the issue of marketing in a case where division orders provided for payment to the royalty owners based upon the price “received at the wells.” In deciding this issue, he said:

“ * * * It is in evidence that LeCu-no took delivery of the royalty gas involved at the wellhead, ran it through its processing plant and delivered it to certain interstate gas transmission companies under contracts of sale which appel-lees had no part in making at a price agreed upon between LeCuno and the transmission companies. Such sales to the transmission pipe lines were bona fide arm’s length transactions as between Le-Cuno and the transmission lines so far as this record reveals. Under the contractual relationship described above, LeCuno’s division orders requiring it to account to the appellees for their royalty gas on the basis of ‘the price received at the wells by LeCuno’ would require that LeCuno exercise the highest good faith in any contract it entered disposing of the royalty owners’ gas.”

Although the Court did not address the issue of the duty involved in marketing gas in Livingston Oil Corporation v. Waggoner, 273 S.W. 903 (Tex.Civ.App.—Amarillo 1925, no writ), it did recognize the right of a lessor to receive a royalty on gas sold based upon the reasonable market value rather than the price at which the lessee had contracted to sell the gas. And in Harding v. Cameron, 220 F.Supp. 466 (W.D.Okl.1963), the Court recognized the existence of an implied duty or obligation imposed by law which requires a prudent operator, having due regard for the interest of both the lessor and lessee, “to obtain a market for gas at the best price obtainable.” In Greenshields v. Warren Petroleum Corporation, 248 F.2d 61 (10th Cir.1957), cert. denied, 355 U.S. 907, 78 S.Ct. 334, 2 L.Ed.2d 262, the Court concluded that good faith must be explored by consideration of the circumstances then existing to see if more favorable terms could be obtained for the gas produced.

In Professor Merrill’s volume on implied covenants, the 1964 supplement at page 67 contains an interesting comment with regard to a case which had a gas royalty clause providing for payment based on “net proceeds derived from the sale of gas at the mouth of the well.” The author said:

“In Phillips Petr. Co. v. Johnson, 155 F.2d 185 (5th Cir.1946), the court said of a stipulation for gas royalty measured by net proceeds at the mouth of the well, ‘This lessor did not consent to be left to the uncertainties of “fair values”, or even “market price”, as to the gas, but was willing to take one-eighth of what the lessee sold it for, relying on the lessee’s self-interest to secure a good sale.’ This statement seems incorrect, if it is meant that the lessee was not bound, under such a provision, to exercise reasonable diligence to get the best available price. The same is true of the court’s statement that the lessee is ‘accountable for the actual net proceeds only, whether the residue gas was worth more or less.’ ”

In this case, Amoco by dedicating additional leases, including those of the Appel-lees herein, in June, 1975, obtained an increased price for gas already dedicated under the prior contract from 17$ to 70$ per MCF. This was obviously a substantial benefit for Amoco and its royalty owners under the previously dedicated leases. But it also meant that as to twelve of the leases involved in this case, the royalty owners would receive a payment for gas which was approximately ½ of the amount soon to be paid by Lone Star and Delhi, and with a very limited provision for future acceleration. This was not a substantial benefit to them as compared to other royalty owners whose gas was soon to be purchased by Lone Star and Delhi for $1.30, $1.90 and $1.95 per MCF.

Having concluded that Amoco had an implied covenant or duty to act in good faith when selling the gas of its royalty owners, we overrule Appellant’s points of error asserting it had no such obligation by reason of the lease provision providing for payment of royalty based upon the proceeds realized from the sale of gas.

BREACH OF DUTY

We next turn to the issue of whether the evidence supports the trial Court’s finding of a breach of the legal duty owed by Amoco to its royalty owners. Only one witness, Tom Johnson, testified in this case. The record does contain many exhibits relative to interest ownership, gas sales agreements, and a recapitulation of prices paid by each of the four purchasers of gas since the initial production in 1973. At no time did Mr. Johnson express an opinion as to the fair market value of gas in Ward County, or from a particular field, or even from this particular well. Nevertheless, his testimony and the exhibit with the recapitulation of prices paid for gas purchased show without dispute what was being paid at various times for gas from this particular well by one who purchased under federal regulations, one who purchased under a long-term contract, and those who purchased with annual redetermination clauses.

Market value of gas is to be determined by sales of gas comparable in time, quality and availability of marketing outlets. Texas Oil & Gas Corporation v. Vela, 429 S.W.2d 866 (Tex.1968). This is usually established by opinions from expert witnesses who have evaluated gas sales in a given field and arrived at a price which they consider to represent fair market value at a given time. See Butler v. Exxon Corporation, 559 S.W.2d 410 (Tex.Civ.App.—El Paso 1977, writ ref’d n. r. e.); Exxon Corporation v. Middleton, 571 S.W.2d 349 (Tex.Civ.App.—Houston [14th Dist.] 1978, writ pending); Exxon Corporation v. Jefferson Land Company, 573 S.W.2d 829 (Tex.Civ.App.—Beaumont 1978, writ pending).

But that is not the exclusive manner of establishing market value. Professor Merrill, on page 213 of his book, notes that:

“While the highest price paid by any purchaser in the area is not necessarily the highest obtainable by the exercise of reasonable effort on the part of the particular lessee, it certainly is pertinent evidence.”

We believe that which others pay for the same gas from the same well under an annual price redetermination clause is strong evidence of market value. In the Vela case, the Court noted that the record showed the price paid by other purchasers in comparable sales, and concluded that such evidence supported the finding of the trial Court as to market value. In this case, we have evidence of sales of gas comparable in time, quality and availability of marketing outlets. Those sales prices become almost conclusive, particularly when there is no evidence to the contrary. Hemingway, supra, Sec. 7.4(C) at 319 (1971). We hold the evidence is sufficient to establish the trial Court’s findings as to fair market value of these royalty owners’ gas during the years in dispute. Points of error asserting to the contrary are overruled.

DIVISION ORDERS

Amoco also asserts that it has no liability for amounts in excess of those paid under the terms of its gas contract with Pioneer and Odessa because of division orders signed by the royalty owners. Each of the Appellees in this ease executed a division order which describes the producing unit and contains the following language:

“The following covenants are parts of this instrument and shall be binding on the undersigned, their successors, legal representatives, and assigns:
* * * * * *
“Gas: Settlements for gas shall be based on the net proceeds at the wells, after deducting a fair and reasonable charge for compressing and making it merchantable and for transporting if the gas is sold off the property. Where gas is sold subject to regulation by the Federal Power Commission or other governmental authority, the price applicable to such sale approved by order of such authority shall be used to determine the net proceeds at the wells.”

It can be seen that such orders do not really change the basis for calculating royalty payments from the terms of the lease. The lease refers to “the amount realized from such sale” and the division orders refer to “net proceeds at the wells.” The division order does not purport to relieve the lessee from its duty to exercise good faith in obtaining market value for gas sold.

The actual purpose to be served by a division order is set forth in Brown, The Law of Oil and Gas Leases, (2nd ed. 1973) in Section 316.02 on pages 16-86, as follows:

“ * * * the main purpose of the typical division order is to protect the purchaser of products produced on a lease in a division of the proceeds, paid by him, among those entitled to share in such proceeds, namely, the lessee and the royalty owners. It was never intended to afford a lessee the opportunity to amend the lease, relieve himself of lease obligations, and secure advantages over the lessor which he could not have asserted under the provisions of the lease.”

Professor Merrill treats this issue very realistically when he says:

“ * * * the purposes for which the [division] order is executed and the type of economic duress which prescribes it repel the implication that it is intended to affect the obligations of the operator to the royalty owner. The better reasoned decisions are in accordance with this view, and hence the mere execution of a division order, or the acceptance of payments in accordance therewith from the purchaser, ought not to preclude the royalty owner from asserting a breach of implied obligation against the operator.”

Merrill, supra, 1964 Supp., Sec. 209A.

If, as the Court said in the Le Cuno case, the division orders which provide for payment based on the price received at the wells require the exercise of the highest good faith, the original obligation has not changed and the division orders do not diminish the duty owed to these royalty owners. And in this connection it must be noted that these division orders are with the lessee, Amoco, and not a third party purchaser. Thus we conclude that Le Cuno controls as to the facts in this case. Those points of error asserting to the contrary are overruled.

FUTURE PAYMENTS

As set forth in finding No. 25, Amoco was ordered to pay royalty for gas produced after June, 1977 based upon the price at which Lone Star purchased gas from the well after that date. The judgment ordered future payments based on that standard. We conclude this was error.

First, these royalty payments are made monthly and the market can and does fluctuate at something other than annual periods. In addition, purchases by one individual buyer cannot be conclusive as to market price. Normally, market price is based upon a comparison of several sales of a given commodity at a given time and place. Generally, it is not tied exclusively to one particular sale. We recognize the question is a close one where there are several purchasers of gas from the same well with annual redetermination clauses. Nevertheless, we reverse that part of the judgment as to payments for gas sold after June, 1977, and order that those payments be made based upon market value at the time of sale. Obviously, the purchase price paid by Lone Star may be the best evidence of the market value, but it is not conclusive. We sustain Appellant’s Point of Error No. 13.

The judgment of the trial Court is affirmed, except as to the provision for payments of gas after June, 1977, and that part of the judgment is reversed and rendered so as to provide for such payments based upon market value of the gas sold at the time and place of sale.

PRESLAR, Chief Justice,

dissenting.

I respectfully dissent.

This is an appeal from a judgment for the Plaintiffs to recover alleged deficiencies and royalty payments for gas produced under oil and gas leases providing for payment of a designated portion of the “proceeds” of the sale of gas. The trial Court, sitting without a jury, denied recovery for some Plaintiffs (who do not appeal) and allowed recovery by others, and the Defendant appeals that portion of the judgment. I would reverse and render the portion of the judgment appealed from.

Appellees brought this suit alleging that this is a suit for declaratory judgment under the Texas Declaratory Judgment Act to determine the correct computation of royalties due to be paid by Appellant to Appel-lees pursuant to terms of oil and gas leases held by Appellant and made by Appellees. It was pled, and is undisputed, that the lease provision hére involved is the clause “provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale.” There is no contention but that the gas was sold at the well, and it is also undisputed that the Appellant has fully complied with that clause and has paid each Appellee his share of the proceeds of all gas sold. What, then, is the complaint?

Appellees seek to recover additional money for their gas royalties on the theory that the Appellant has a duty to market the gas at its fair market value and failed to do so; that the fair market value is greater than that for which the Appellant marketed the gas, and that the Appellees are entitled to recover from the Appellant that difference.

On the face of things, Appellees seem to have been wronged for the circumstances under which the gas is produced and sold show that Appellees are being paid far less for their gas than are others. Their leases are pooled (as to which no complaint is made), and the very well from which their gas is produced is owned in varying proportions by different lessees, one of them being Appellees’ lessee, the Defendant/Appellant. These different lessees have contracted to sell their gas at differing prices to four purchasers. Appellees’ lessee has the lowest contract price. Therein lies the rub. Appellees alleged, and the trial Court agreed, that their lessee had an “implied duty” to make a better contract — an implied duty to get the going fair market value. The trial Court made the “going price,” or fair market value to be paid, a monthly determination — a “current” market price. This, despite the fact that the gas was not sold monthly but one time under a long term contract at a fixed price. Appellees do not question Appellant’s right to make such a contract.

By their oil and gas lease to Appellant, Appellees contracted that Appellant was the owner of such gas as it explored for, found and could produce, and that its obligation was to sell the gas and account to Appellees for their share of the sales proceeds. They have accepted and retained those proceeds. Do they now make out a case to excuse or abrogate the express provisions of their contract? They contracted for a share of “the amount realized from such sale.”

It is elementary law that a party who enters into a written contract is bound by its provisions. Pacific Mutual Life Insur ance Company v. Westglen Park, Inc., 160 Tex. 1, 325 S.W.2d 113 (1959). Appellees have no pleading of fraud, duress, mutual mistake, invalidity, or any of the other recognized legal reasons to excuse compliance with the provision of their contract providing they shall be paid the amount realized from sale of the gas. Appellees’ legal reason for abrogating that provision of their contract is that the Appellant breached a duty “to act in good faith.” The trial Court found that Appellant breached that duty “in selling gas with respect to which it owes royalty under and pursuant to the terms of the leases described ... at less than the current fair market value thereof, ...”

We do not need to discuss or determine whether the failure “to act in good faith” is sufficient legal excuse to overcome the express contractual terms because it is evident from the record that there is no proof of any such failure to act in good faith. As is seen, the only “proof” is that Appellant sold its gas for less than others sold theirs. Obviously, this is not enough to sustain the judgment. Otherwise, all who have contracted for less than the top price paid by others are in default under their oil and gas lease regardless of reasons for entering such contract other than price. The contract under which the gas is sold contains many and varied terms that must be agreed upon by the contracting parties, and price is only one of such terms of the total contract. There is no showing here that Appellant at the expense of price entered into such terms as amounted to acting in bad faith or “failure to act in good faith.” To the contrary, the evidence is that Appellant was originally bound to sell its gas for 17$ per MCF but was able to renegotiate the contract and get 80$ per MCF for the mutual benefit of it and Appellees.

The Court, in decreeing that Appellant must pay Appellees on the basis of market value determined on a monthly basis in the past and in the future, has made a new contract for the parties; under the oil and gas lease Appellant had the right to sell the gas on long term contracts; in fact, that is the expected and accepted method of sale in the industry. Exxon Corporation v. Middleton, supra. Courts cannot make a new contract for the parties. Maryland Casualty Co. v. Hudgins, 97 Tex. 124, 76 S.W. 745 (1903).

Even if we assume the rest of the judgment is correct, it is still erroneous as to the finding of “the fair market value" of the gas. The trial Court found as a fact that the price paid by one of the four purchasers was “the” market value. The evidence does not sustain such a conclusion. There were four different prices being paid and no evidence that any particular one of the four was the market price. The one witness who testified readily admitted that he was no expert in that field and did not know what the fair market value was. All purchasers of the gas did so under contracts involving far more than price alone. Many elements go into the makeup of fair market value. Those elements are not in evidence in this case.

There is yet another reason why the judgment cannot stand. The parties executed contracts known as “division orders,” which recite that they are binding obligations and which provided that Appellees would be paid for gas based on the proceeds of sale. Even if we assume the trial Court is correct in allowing recovery by Appellees under the oil and gas leases, these division order contracts still present a bar to the recovery. They are binding contracts. Chicago Corp. v. Wall, 156 Tex. 217, 293 S.W.2d 844 (1956); Shell Oil Company v. State, 442 S.W.2d 457 (Tex.Civ.App.—Houston [14th Dist.] 1969, ref’d n. r. e.); Pan American Petroleum Corp. v. Vines, 459 S.W.2d 911 (Tex.Civ.App.—Tyler 1970, writ ref’d n. r. e.); Le Cuno Oil Company v. Smith, supra; Exxon Corporation v. Middleton, supra. Appellees have no pleadings to overcome these division order contracts and under the record here are bound by them. Le Cuno Oil Company v. Smith is directly in point in this case on two points. First, it upholds the validity of division orders as binding contracts. There, it was the royalty owners who sought to enforce the division orders against the lessee; as in our case, the lessee was both producer and pipe line operator; the Court upheld the judgment of the trial court allowing recovery based upon provisions of the division orders. The Supreme Court of Texas refused error, n. r. e., and the Supreme Court of the United States denied certiorari. Secondly, the Court in Le Cuno had before it a question of reformation of the division orders for which there were no pleadings. The Court, still speaking through Chief Justice Chaddick, said:

“. . . Had LeCuno pleaded and proved that it was induced to enter into the division orders by the fraud of appel-lees or through mutual mistake, it, of course, would be entitled to a reformation setting out the true agreement of the parties. See 36 Tex.Jur., 773, Sec. 31 and p. 779, Sec. 35.”

Le Cuno was cited in Bankers Life Insurance Company of Nebraska v. Scurlock Oil Company, 447 F.2d 997 (5th Cir.1971), the Court saying:

“[1] It is settled law in Texas that a division order constitutes a contract between the interest owners and the pipeline purchaser. Pan American Petroleum Corp. v. Long, 5th Cir. 1964, 340 F.2d 211; LeCuno Oil Co. v. Smith, 306 S.W.2d 190 (Tex.Civ.App.—Texarkana 1957, writ ref’d n. r. e.), cert. denied, 356 U.S. 974, 78 S.Ct. 1137, 2 L.Ed.2d 1147 (1958); Chicago Corp. v. Wall, 156 Tex. 217, 293 S.W.2d 844 (1956).”

Under Rule 93(j), Tex.R.Civ.P., the issue of lack of consideration would require a verified plea, and that was not done in this case; the argument that the division orders are without consideration is not available to Appellees under the record. Also, there is the statutory presumption that written contracts of this nature import consideration. Unthank v. Rippstein, 386 S.W.2d 134 (Tex.1964); Maykus v. Texas Bank & Trust Company of Dallas, 550 S.W.2d 396 (Tex.Civ.App.—Dallas 1977, no writ); Exxon Corporation v. Middleton, supra. There has been nothing offered in the case before us to overcome that presumption. The division orders in this case, in fact, amount to a ratification of what was done by Appellant under the gas leases. The Appellee who testified in this case stated that when he signed the division order he knew that gas under his interest was being sold under contract to the Pioneer Gas Company, and that these,,matters were shown by a sheet attached to the division orders which the Appellees each signed. If, then, there was any failure of duty or failure to act in good faith in marketing the gas to Pioneer, the Appellees have ratified such conduct and are in no position to complain of it.

That part of the judgment of the trial Court allowing Appellees herein to recover should be reversed and judgment here rendered that they take nothing of the Appellant.

      . This same agreement provided that for gas produced from Section 81, the price would be $1.00 per MCF with a 10$ acceleration every five years.

      . Siefkin, supra, n. 17 at 188. “ ‘Market’ value is what the thing can be sold for. ‘Actual’ value is what the owner wishes he could find a sucker willing to pay.”


text:
    Marvin Leo SILCOTT, Appellant, v. Mary Lou Silcott WILSON and Kenneth E. Barnhill, Jr., Appellees.
    No. 19735.
    Court of Civil Appeals of Texas, Dallas.
    Feb. 14, 1979.

      W. R. Sessions, F. T. Gauen, Jr., Sessions & Sessions, Dallas, for appellant.
    M. Troy Murrell, Ray, Anderson, Shields, Trotti & Hemphill, Dallas, for appellees.
    Before AKIN, ROBERTSON and CARVER, JJ.
   ROBERTSON, Justice.

This is an appeal from a summary judgment enforcing foreign judgments. Mary Lou Wilson and attorney Kenneth E. Barn-hill, Jr., appellees, sued Marvin Leo Silcott, appellant, to enforce a series of Colorado judgments pertaining to child support ar-rearages and attorney’s fees, respectively. The trial court granted appellees’ motion and rendered judgment in their favor. Since we hold that these Colorado judgments are final and are entitled to full faith and credit, we affirm.

Marvin and Mary Silcott obtained a Colorado divorce on November 16, 1964. As a part of the decree, appellant was ordered to pay child support and attorney’s fees. Over the next thirteen years, one judgment for arrearages in child support and for attorney’s fees and four other judgments for unpaid child support were rendered by the Colorado court against appellant. These judgments were unsatisfied. Appellees filed this suit in Texas to enforce these Colorado judgments against appellant, who is now a Texas resident.

At the hearing on appellees’ motion for summary judgment, appellees established a prima facie case by proper summary-judgment evidence. Appellant filed his answer to the summary-judgment motion on the day of the hearing. Tex.R.Civ.P. 16&-A(c) states that the adverse party must file his answer at least seven days prior to the day of hearing, unless he obtains leave of the court to file it later. The record fails to reflect whether leave was obtained. Thus, the judge was not compelled to consider appellant’s response. Even if the judge considered it, the response did not contain any proper summary-judgment evidence raising a fact question.

Assuming that the trial court did consider appellant’s answer, three arguments are raised: first, whether the Colorado- judgments are final; second, whether the claim for attorney’s fees has been discharged in bankruptcy; and finally, whether the judgment rendered is supported by the pleadings and the evidence. We find no merit in any of these contentions.

With respect to appellant’s first contention, he argues that since the Colorado judgments are subject to modification, they are not final, and, consequently, are not entitled to full faith and credit. We cannot agree. Judgments decreeing arrear-ages in child support are final judgments and are entitled to the same treatment as any judgment for debt under Colorado law. Jenner v. Jenner, 138 Colo. 149, 330 P.2d 544, 545 (1958). In Jenner, the court stated: “Each installment [of unpaid child support] which matures under a decree which had not been modified becomes a judgment debt.” Although the trial court refused appellee’s motion to take judicial notice of Jenner, the court apparently applied Colorado law according to Jenner. Thus, under U.S.Const. Art. IV, sec. I, we must give this final judgment of a sister state the same effect to which it is entitled in the state where rendered. Sistare v. Sistare, 218 U.S. 1, 30 S.Ct. 682, 54 L.Ed. 905 (1910); Barber v. Barber, 323 U.S. 77, 65 S.Ct. 137, 89 L.Ed. 82 (1944); Harris v. Harris, 403 S.W.2d 445 (Tex.Civ.App.—Houston 1966, writ ref’d n. r. e.). Even if the trial court failed to consider the law of Colorado regarding finality of judgments for arrearages in child support, the result is unchanged. The presumption that the law of Colorado is the same as that of Texas would apply, State v. Thomasson, 154 Tex. 151, 275 S.W.2d 463, 464 (1955), and these Colorado judgments are considered final under Texas law. Red v. Red, 552 S.W.2d 90 (Tex.1977); Tex. Family Code Ann. § 14.08(c)(2) (Vernon Supp.1978—1979).

Appellant next argues that appellee Barnhill’s claim for attorney’s fees is discharged in bankruptcy, by reason of a bankruptcy proceeding in Kansas in 1968. Appellant claims that the record raises a question of whether appellee’s services were rendered in the original divorce action or in a later action. We do not agree. Judgments for support or maintenance of a wife or child are not dischargeable in bankruptcy. 11 U.S.C. § 35(a)(7) (Supp.1978). This section has been construed to include attorney’s fees adjudged in connection with the representation of a wife in a divorce case. Nunnally v. Nunnally, 506 F.2d 1024, 1027 (5th Cir.1975); Allison v. Allison, 150 Colo. 377, 372 P.2d 946 (1962). The record clearly reflects that the award of attorney’s fees to appellee Barnhill was in connection with the divorce case in Colorado. Thus, we overrule this point.

Finally, appellant contends that the judgment rendered by the trial court is not supported by the pleadings and the evidence. He argues that appellees sought judgment in the amount of $48,350.00 and $4,225.04, respectively, but that the court awarded appellees $60,508.45 and $7,100.15, respectively, and thus violated the general rule that a judgment must conform to the pleadings. Tex.R.Civ.P. 301. This contention ignores the fact that appellees’ pleadings included all of the Colorado judgments and that the court properly took judicial notice of the post-judgment interest statute in Colorado. Tex.R.Civ.P. 184a; Schwartz v. Vecchiotti, 529 S.W.2d 603 (Tex.Civ.App.—Houston [1st Dist.] 1975, writ ref’d n. r. e.). Applying the Colorado judgment interest statute, the court by simple arithmetic calculation correctly added interest to the principal amounts pleaded and rendered judgment accordingly. See Casterline v. Burden, 560 S.W.2d 499, 502 (Tex.Civ.App.—Dallas 1977, no writ). Although appellant has challenged the summary-judgment evidence, all of the authenticated Colorado judgments were attached to appellees’ motion for summary judgment. Thus, both the pleading and the evidence were sufficient to support the judgment.

Accordingly, we affirm.

      . These judgments were rendered on the following dates for the following amounts:
      June 20, 1967 — $2,495 for arrearages in child support, $4,225.04 for attorney’s fees;.
      April 27, 1970 — $11,555 for arrearages in child support;
      August 1, 1976 — $28,000 for arrearages in child support;
      August 27, 1977 — $5,400 for arrearages in child support;
      October 3, 1977 — $900 for arrearages in child support.


text:
    Robert YOUNG, Appellant, v. PULASKI BANK & TRUST, Appellee.
    No. 19856.
    Court of Civil Appeals of Texas, Dallas.
    Feb. 20, 1979.
    Rehearing Denied March 28, 1979.
    Thomas K. Boone, Dalton, Moore, Forde, Joiner & Stollenwerck, Dallas, for appellant.
    Craig T. Enoch, Moseley, Jones & Enoch, Dallas, for appellee.
    Before AKIN, ROBERTSON and CARVER, JJ.
   ROBERTSON, Justice.

This is an appeal from the denial of a temporary injunction. Robert Young, appellant, sought a mandatory injunction to dispossess Pulaski Bank & Trust, appellee, from his home. The trial court denied temporary relief on the ground that the right to immediate possession had been determined by a final judgment in the justice court. We hold that the trial court did not abuse its discretion in denying appellant’s application for temporary injunction and accordingly, affirm.

The facts in this case are undisputed. A default judgment was rendered in favor of appellee in a forcible entry and detainer suit against appellant on October 4, 1978, granting appellee possession of appellant’s home. This justice court judgment became final on October 30, 1978, and was not appealed. A writ of restitution was issued on October 31,1978, and appellant’s application for a temporary restraining order to prevent his dispossession was denied on November 1, 1978. Appellant was then dispossessed on the same day. On November 2, 1978, appellant sought a temporary mandatory injunction to remove appellee from the premises.

Appellant contends that the trial court abused its discretion in denying his application for a temporary injunction. He argues that he demonstrated a probable right to recover and a probable injury if the injunction was denied and that he was entitled to a preservation of the status quo pending trial on the merits. Specifically, appellant contends that the trial court abused its discretion in holding that the justice court’s order precluded injunctive relief. We disagree.

Appellate review of an order granting or denying a temporary injunction is strictly limited to a determination of whether there has been a clear abuse of discretion by the trial court in granting or denying the interlocutory order. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.1978); Texas Foundries, Inc. v. International Moulders & Foundry Workers’ Union, 151 Tex. 239, 248 S.W.2d 460 (1952). In Texas Foundries, Inc. the supreme court stated:

The granting or refusing of a temporary injunction is subject to a very different character of appellate review from the granting or refusing of a permanent injunction. The trial court is clothed with broad discretion in determining whether or not to issue a temporary injunction to preserve the rights of the parties pending a final trial of the case, and when that discretion is exercised, its order should not be overturned unless the record discloses a clear abuse of discretion. 248 S.W.2d at 462.

Appellant has the burden to show that the trial court clearly abused its discretion. This he has failed to do. The purpose of a temporary injunction is the preservation of the status quo of the subject matter of the suit pending trial on the merits. Davis v. Huey, supra. “Status quo” refers to the last actual, peaceful, noncontested status of the parties to the controversy which preceded the suit. Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549, 553 (1953). The “status quo” to be maintained is appellee’s possession of the property, which has been accomplished by a valid judgment of a justice court concerning only the right to immediate possession of the premises. See Johnson v. Highland Hills Drive Apartments, 552 S.W.2d 493, 495 (Tex.Civ.App.—Dallas 1977, writ ref’d n. r. e.). This judgment was not appealed and thus, appellant has failed to show an abuse of discretion by the trial court in denying his application for temporary mandatory injunction.

Accordingly, we affirm.


author: HUMPHREYS, Justice.

text:
    Sandra Sue Ford REDFEARN, Appellant, v. Michael Scott FORD, a minor (Norma Ford), Appellee.
    No. 19732.
    Court of Civil Appeals of Texas, Dallas.
    Feb. 22, 1979.
    Rehearing Denied April 4, 1979.

      Hal D. Wallace, Jr., Brown & Brown, Inc., Garland, for appellant.
    Jon Michael Franks, Irving, for appellee.
    Before GUITTARD, C. J., STOREY and HUMPHREYS, JJ.
   HUMPHREYS, Justice.

This appeal is from a probate court’s judgment denying appellant, Sandra Ford Redfearn, recovery from her son of any of the proceeds of two insurance policies on the life of her deceased former husband, Kenneth Ford. The principal question before us is whether Mr. Ford’s actions, without his wife’s knowledge or consent, in changing the beneficiary designation in one policy from his wife to their infant son and designating the son as the sole beneficiary in the second policy constituted constructive fraud on the community property rights of the wife. The trial court held there was no fraud on appellant’s community property rights, and we affirm.

The significant facts are as follows. Appellant Sandra Ford Redfearn and her deceased husband Kenneth Ford were the parents of Michael Ford. Michael Ford, their only child, was six years old when his father died. Appellant and Kenneth Ford experienced marital problems and separated in February of 1977. Appellant left Mr. Ford and took their son, but returned him two weeks later when she began living with another man.- Mr. Ford knew of his wife’s living arrangement, but, nevertheless, urged her to return home. Mr. Ford died intestate on April 24, 1977, and in July 1977 appellant married the man she had been living with. At some undisclosed time prior to his death, Mr. Ford changed the beneficiary designation in one of the two life insurance policies from his wife to his son and designated his son to the exclusion of his wife in a second policy. After Mr. Ford’s death, appellant claimed the proceeds of these policies and appellee, Michael Ford’s paternal grandmother, sued appellant and the insurance companies in her capacity as guardian of Michael Ford’s estate for all the proceeds. Appellant filed a cross-action alleging constructive fraud on the part of her deceased husband.

It is undisputed that the community estate of Mr. and Mrs. Ford consisted of $98,178.23 in life insurance proceeds and miscellaneous personal property of nominal value, and they owed a department store debt of $1,372.58. Appellant was beneficiary on life insurance policies totaling $25,-000, and Michael Ford was beneficiary on policies totaling approximately $73,000. The trial court found that all insurance premiums were paid with community funds and that the insurance proceeds were community property. Appellant was healthy and capable of supporting herself, but had no professional skills or training, and no formal education beyond the tenth grade. The court found that she was adequately provided for, however, by the $25,000 insurance proceeds she received. The trial court further found that at the time of Mr. Ford’s death there were substantial community property debts which had not been paid at the time of trial, and that neither Mr. Ford nor appellant owned separate property of any consequence.

Appellant does not challenge the husband’s authority to designate beneficiaries under the life insurance policies except to the extent that such designations constituted a constructive fraud on the appellant's community property rights. Appellee admits, and we agree, that the burden is upon the disposing spouse or the donee to prove that the gift was not unfair to the spouse and was not a fraud upon the other spouse’s rights. Carnes v. Meador, 533 S.W.2d 365 (Tex.Civ.App.—Dallas 1975, writ ref’d n. r. e.); Murphy v. Metropolitan Life Insurance Co., 498 S.W.2d 278, 282 (Tex.Civ.App.—Houston [14th Dist.] 1973, writ ref’d n. r. e.). We must, therefore, consider whether appellee discharged her burden to prove the fairness of the disposition of appellant’s one-half interest in the insurance proceeds.

The factors affecting the fairness of such a disposition were discussed by this court in Givens v. Girard Life Insurance Co. of America, 480 S.W.2d 421, 426 (Tex.Civ.App.—Dallas 1972, writ ref’d n. r. e.). After reviewing a number of similar cases with factual contexts involving donees and beneficiaries related to the decedent, we observed:

The courts have considered objective factors in determining whether the situation was one in which the decedent might properly have made a gift of community funds, such as the relationship of the parties, whether special circumstances tended to justify the gift, and whether the community funds used for such purpose were reasonably in proportion to the community assets remaining.

Applying these objective factors, we hold that the trial court’s findings, conclusions and the undisputed evidence support its judgment. We are persuaded that Mr. Ford made a reasonable provision for their infant son while relieving his wife of the burden and possible anxiety of meeting her moral and legal obligation to support and educate their son until he reaches his age of majority. She was not actually caring for the child after the separation and her lack of professional skills and formal education were factors affecting her disposition and ability to support and educate the child, and thus provided a reasonable basis for Mr. Ford to use a portion of their community funds for the purchase of insurance to protect the child in the event of his untimely death. If he had deposited the funds instead in a savings account for the benefit of the child, the amount, though not disclosed by this record, would hardly have been great enough to suggest unfairness or fraud. On the other hand, the record shows that she was capable of supporting herself and that he was mindful of her continuing needs in leaving $25,000 insurance for her benefit. Consideration of these factors convince us that the evidence is sufficient to support the trial court’s implied finding that the size of the gift in relation to the total size of the community estate is not inconsistent with fairness and that the father’s gift to his son was neither capricious, excessive, nor arbitrary. Consequently, we hold that appellee successfully carried her burden of proof to show the fairness of the disposition of appellant’s one-half interest in these insurance proceeds.

Affirmed.


author: STOREY, Justice.

text:
    Wayne H. STINSON, Appellant, v. CRAVENS, DARGAN & COMPANY et al., Appellees.
    No. 19733.
    Court of Civil Appeals of Texas, Dallas.
    Feb. 22, 1979.
    Gary B. Hall, Dallas, for appellant.
    Jack H. Walding, Walding & Hoops, David N. Kitner, Strasburger & Price, Dallas, for appellees.
    Before GUITTARD, C. J., STOREY and HUMPHREYS, JJ.
   STOREY, Justice.

Wayne H. Stinson sued Gaylon Young, Rodney D. Young Insurance Agency and Cravens, Dargan & Company for breach of contract and negligence in failing to obtain insurance on his boat which was damaged during a storm. The trial court instructed a verdict against him, in favor of all defendants, and his principal contention on this appeal is that the trial court erred in not allowing him to testify as to the market value of his boat. We affirm the judgment of the trial court.

The evidence shows that appellant purchased the boat for $5,800 on October 23, 1974, and that on November 24,1974 it was damaged during a storm while docked at the Frisco Marina. Appellant alleged that immediately before the damage the boat had a cash market value of $7,451 and immediately thereafter a cash market value of $3,447. Alternatively, he alleged a repair cost of $6,050.

At trial appellant testified that he had personal knowledge of the cash market value of the boat immediately before the loss and was allowed to testify that in his opinion “it was worth around about $7,400.00 or $7,500.00.” Objection was sustained to his opinion testimony regarding value immediately after the loss. On bill of exception appellant testified to a value after loss of $2,000. His testimony continued:

Q. How did you form this opinion?
A. Of what it would cost to repair it and what I gave for the boat.
Q. Are there any other factors that you based your opinion on?
A. No, I guess not.

No attempt was made to qualify appellant in any manner concerning the basis for his opinion or the source of any knowledge concerning the cost of repairs. After this evidence was excluded, appellant rested his case without further offer of proof as to value after loss.

At submission appellant concedes that he was compelled to abandon his alternate “cost of repairs” damage proof for lack of available expert testimony and was obliged to instead proceed with “value before and after” proof. The excluded testimony, however, was based upon the cost of repairs. There is no evidence that the cost of repairs considered by appellant in forming his opinion were reasonable or made necessary by damage incurred to the boat by this specific occurrence. Consequently, the evidence affirmatively shows that his opinion lacked a sufficient factual basis.

Appellant contends that the fact of ownership qualifies him to testify as to his opinion of value after the damages. There is authority for this general proposition. Where the owner affirmatively demonstrates, however, as in the instant case, that his opinion is cast in terms of approximation and estimate unsupported by any relevant facts leading to or supporting such approximation or estimate the opinion testimony is too conjectural. Ada Oil Co. v. Logan, 447 S.W.2d 205 (Tex.Civ.App.—Houston [14th Dist.] 1969, no writ).

Further, it is well established that the qualification of a witness to testify as to value is primarily to be determined by the trial court and in the absence of a clear showing of abuse such determination will not be disturbed on appeal. Cortez v. Mascarro, 412 S.W.2d 342 (Tex.Civ.App.—San Antonio 1967, no writ); Emmco Insurance Co. v. Burrows, 419 S.W.2d 665 (Tex.Civ.App.—Tyler 1967, no writ). We find no clear abuse of discretion in this case.

While the trial court’s granting of defendants’ motions for instructed verdict may be upheld on the above point alone, such motions also urged to the trial court that appellant had established no ground of liability against them or any of them. By supplemental brief appellant complains of error on this point asserting that he has proved a prima facie case in negligence against defendants Gaylon Young and Rodney D. Young Insurance Agency, Inc. He makes no such complaint with respect to defendant Cravens, Dargan & Company and concedes that he has abandoned his appeal as to the latter. Despite our above holding, we will address appellants’ supplemental point.

Appellant contends Gaylon Young was negligent in advising him (1) that there was insurance coverage on the boat when, in fact, there was no coverage, and (2) that Gaylon Young had the power to bind insurance coverage on the boat when, in fact, he possessed no such power.

Following a telephone conversation with Gaylon Young, an application for insurance was forwarded by Young to Cravens, Dar-gan & Company. The application was not accepted and no policy of insurance was issued. Appellant offered no evidence of terms, conditions or coverage previously agreed upon between him and Young; nor was there any evidence offered as to the cause of loss except that the boat was subsequently damaged during a storm, and “it took on water over both the engines and on the cabin.”

An insurance agent agreeing to obtain insurance owes a legal duty to obtain same and, if he cannot, to notify his principal of failure. Burroughs v. Bunch, 210 S.W.2d 211 (Tex.Civ.App.—El Paso 1948, writ ref’d). ■ Assuming that he established the duty, that is, the agreement on the part of Young to procure insurance, there is yet an essential element of proof missing in the instant case. Implicit in all of the cases following the rule announced in Burroughs is the requirement that the loss is one insured against in some policy. Scott v. Conner, 403 S.W.2d 453 (Tex.Civ.App.—Beaumont 1966, no writ); Wallis v. Liberty Mutual Insurance Co., 465 S.W.2d 422 (Tex.Civ.App.—Dallas 1971, writ ref’d n. r. e.). Here, appellant, either not knowing or being unable to prove the cause of loss, did not bring the loss under the coverage of any policy shown by the evidence to be available.

The trial court was, therefore, correct in instructing a verdict upon either or both of the points brought forward.

Affirmed.


author: RALEIGH BROWN, Justice.

text:
    HI FASHION WIGS PROFIT SHARING TRUST and Hi Fashion Wigs Retirement Plan, Appellant, v. HAMILTON INVESTMENT TRUST, Appellee.
    No. 5254.
    Court of Civil Appeals of Texas, Eastland.
    March 1, 1979.
    Lawrence Fischman and J. Kathryn Lin-dauer, Weil, Craig & Fischman, Dallas, for appellant.
    Louis B. Paine, Jr., and C. Andrew Woo-ley, Butler, Binion, Rice, Cook & Knapp, Houston, Wynne & Jaffe, Dallas, for appel-lee.
   RALEIGH BROWN, Justice.

This is a usury suit. Hi Fashion Wigs Profit Sharing Trust, an Oklahoma employee benefit trust, and Hi Fashion Wigs Pension Retirement Plan, another Oklahoma employee benefit trust, seek to recover allegedly usurious interest paid to Hamilton Investment Trust, a Massachusetts real estate investment trust, and to recover the statutory penalties imposed for contracting for, charging and receiving usurious interest on two loan transactions. After the court found Oklahoma law applied to the cause, trial to the court resulted in a “take-nothing” judgment. The Hi Fashion Trusts appeal. We affirm.

Hamilton Trust, a New Jersey lender, agreed to supply construction financing to the Hi Fashion Trusts, two Oklahoma borrowers, for the construction of an office building and an apartment project to be built in Lubbock, Texas. The agreements were negotiated in Oklahoma and New Jersey, and the loans were closed in New Jersey. For the initial period of the loans, a floating interest rate of 5% over the Chase Manhattan Bank prime rate was charged. The agreements were subsequently amended to provide for 12% interest and a percentage of rentals from the properties. Hamilton Trust does not contend that the interest contracted for, charged or paid was at any time less than the maximum permitted under Texas law.

A provision was inserted in each of the significant documents associated with the loans that Oklahoma law was to govern the transactions. The apartment loan promissory note and the office building promissory note provided:

The construction, validity and enforceability of this Note shall be determined under the law of the State of Oklahoma which the Payee and Maker contract and agree shall apply.

The construction loan agreement applicable to the apartment loan provided:

Governing Law. This Agreement is being made, executed and delivered at Elizabeth, New Jersey, but shall be deemed made under, and governed by, the internal law of the State of Oklahoma, in all respects, including matters of construction, performance and enforcement. Lender and Borrower stipulate that the principal office of the Borrower is in the State of Oklahoma and all advances by Lender are to be made either in New Jersey or Oklahoma and that the law of the State of Oklahoma can be and has been contracted to be the controlling law. If for any reason the law of Oklahoma cannot be made to apply, the parties stipulate that the law of New Jersey shall then apply.

The construction loan agreement as to the office building loan contained the following:

Governing Law. This Agreement is being made, executed and delivered at Elizabeth, New Jersey, but shall be deemed made under, and governed by, the internal law of the State of Oklahoma in all respects, including matters of construction, performance and enforcement. Borrower hereby irrevocably consents to the jurisdiction of any court of record of the State of Oklahoma for the purpose of any action or proceeding brought to secure payment of the principal of or interest or other sums due under the Note or Mortgage being simultaneously executed and delivered pursuant thereto, or to secure or enforce the performance of any of the terms, covenants and conditions of this Agreement, the Note, the Mortgage or any other instrument delivered pursuant thereto, and whether by foreclosure or otherwise. Lender and Borrower stipulate that the Premises are in the State of Texas, that the principal office of the Borrower is in the State of Oklahoma and that the law of the State of Oklahoma can be and has been contracted to be the controlling law.

Provisions substantially similar to the one in the promissory notes were included in the deed of trust, assignment of rents, guaranty of completion, and guaranty of payment associated with the office building loan.

When the parties amended the agreements, the total amount for each loan was increased by $100,000. As in the original agreement, however, the parties contracted that Oklahoma law should govern.

Disbursements under the agreement were made in Oklahoma City, Oklahoma. Interest statements were mailed to the Hi Fashion Trust office in Oklahoma City. Principal and accrued interest payments were payable and were paid at Hamilton Trust’s office in Elizabeth, New Jersey.

It was established that Mike Schuminsky and Malcolm Hall, who represented the Hi Fashion Trusts in the negotiation and execution of the loan agreement, were residents of Oklahoma and experienced borrowers. They were trustees of both the Hi Fashion Trusts. Schuminsky possessed a law degree from the University of Oklahoma, and Hall was an attorney in active practice in Oklahoma. Schuminsky was accompanied to the loan closings by his personal attorney.

The promissory notes executed in connection with the loans provided for no personal liability on behalf of the makers. Before filing this suit, the Hi Fashion Trusts sold the projects and thus are not asserting their usury claim as a defense to any suit by Hamilton Trust but rather as an affirmative claim.

The U.S. Supreme Court considering the validity of forum-selection clauses said in M/S Bremen v. Zapata Off-Shore Company, 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972):

Forum selection clauses have historically not been favored by American courts, many courts, federal and state, have declined to enforce such clauses on the ground that they were “contrary to public policy,” or that their effect was to “oust the jurisdiction” of the court. Although this view apparently still has considerable acceptance, other courts are tending to adopt a more hospitable attitude toward forum-selection clauses. This view ... is that such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be “unreasonable” under the circumstances. .

Texas courts have long recognized that parties to a contract, under certain circumstances, may choose the law applicable to the transaction in which they are engaging. Dugan v. Lewis, 79 Tex. 246, 14 S.W. 1024 (1891).

The court in Securities Investment Company of St. Louis v. Finance Acceptance Corporation, 474 S.W.2d 261 (Tex.Civ.App.—Houston (1st Dist.) 1971, writ ref’d n. r. e.) said:

Where the parties to a contract specify in the instrument that it is to be governed by the law of a particular state, that law will apply if it has a reasonable relationship to the contract. Teas v. Kimball, 257 F.2d 817 (5th Cir., 1958); 16 Am.Jur.2d, Conflict of Laws, § 41, pp. 64-65.

The rule of Dugan v. Lewis has been codified in Texas Business and Commerce Code at § 1.105(a) wherein it states:

Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. .

Hi Fashion Trusts challenge the application of the Oklahoma law because the State of Oklahoma does not bear a reasonable relationship to the parties involved and the transaction sued upon. The trusts also argue that the choice of law provision in the documents was a subterfuge to avoid application of Texas law. We disagree.

The trial court found “the agreement . free from any taint of sham, subterfuge, or coercion, and the State of Oklahoma bears a reasonable relationship to the parties and the transactions. Such findings are supportive of the trial court’s conclusion that the laws of Oklahoma should govern the transaction involved in this lawsuit.

The court in Commercial Union Assurance Company v. Foster, 379 S.W.2d 320 (Tex.1964) said:

It is an elemental proposition of law that where there is some evidence of a substantial and probative character to support the trial court’s findings of fact, they are controlling upon this court and will not be disturbed, even though this court might have reached a different conclusion therefrom. See Calvert v. Union Producing Company, 154 Tex. 479, 280 S.W.2d 241 (1955); Woodward v. Ortiz, 150 Tex. 75, 237 S.W.2d 286 (1951).

See also Roylex, Inc. v. Avco Community Developers, Inc., 559 S.W.2d 833 (Tex.Civ.App.—Houston (14th Dist.) 1977, no writ); Bass v. McClung Roofing Co., Inc., 575 S.W.2d 342 (Tex.Civ.App.—Fort Worth 1978, no writ).

As stated by the court in Corporate Personnel Consultants v. Wynn Oil Company, Inc., 543 S.W.2d 746 (Tex.Civ.App.—Texarkana 1976, no writ) considering a challenge to finding of fact by the court:

Unless there is no evidence to support the finding or unless the finding is so contrary to the great weight and preponderance of the evidence as to be clearly wrong this court may not set it aside. See Paul v. Johnson, 314 S.W.2d 338 (Tex.Civ.App.—Houston 1958, writ dism’d); 4 McDonald’s Texas Civil Practice, § 16.05.

We hold there is some evidence of probative force to support the trial court’s findings. Martinez v. Delta Brands, Inc., 515 S.W.2d 263 (Tex.1974).

We have considered the entire record and hold such findings are not against the great weight and preponderance of the evidence. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Hi Fashion Trusts’ points of error are overruled.

We have considered and overrule all points of error. The judgment is affirmed.


author: MASSEY, Chief Justice.

text:
    TEXAS UTILITIES FUEL COMPANY, McMahon-Bullington Drilling Company, a Partnership, and John L. McMahon, Joseph K. McMahon and Ralph E. Bullington, Individually, Appellants, v. Lois Anderson CLAYTON et al., Appellees.
    No. 18147.
    Court of Civil Appeals of Texas, Fort Worth.
    March 1, 1979.
    Rehearing Denied April 12, 1979.

      Worsham, Forsythe & Sampels and Michael R. Johnson, Dallas, for Texas Utilities Fuel Co.
    Jennings, Montgomery, Dies & Turner and Frank L. Jennings, Graham, for McMahon-Bullington.
    Gray, Whitten & Loveless and John L. Sullivan, Denton, for appellees.
   OPINION

MASSEY, Chief Justice.

By our opinion in this venue case we affirm the judgment of the trial court overruling all pleas of privilege.

The primary difficulties have been occasioned by the defendants having incorporated into their respective pleas of privilege the allegation that the facts averred in the plaintiffs’ petition were not made in good faith. Since a cause of action for the recovery of interests in land located in the county of suit was alleged by plaintiffs’ pleadings, their right to have venue retained in the county of the suit — upon proof made only that the land was located in the county — is without dispute. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428, 429 (1954).

However, in view of the pleas that there was a want of good faith in the allegations of plaintiffs’ pleading the case ceased to be one in which venue might be held established merely by the pleadings plus proof upon location of the land. (At least it is not such a case once anything might be introduced into evidence indicative that plaintiffs’ allegations were not made in good faith.) Presumption therefore obtaining that plaintiffs’ allegations were made in good faith disappear and constitute matter to be proved by the plaintiffs once the defendants’ evidence shows the existence of an issue of fact upon plaintiffs’ good faith. Thomas v. Ralph E. Fair, Inc., 556 S.W.2d 603, 607 (Tex.Civ.App.—Corpus Christi 1977, no writ). A case holding likewise, by implication, was Batex Oil Company v. LaBrisa Land and Cattle Co., 352 S.W.2d 769 (Tex.Civ.App.—San Antonio 1961, writ dism’d).

In such a case a court must understand the meaning of the terms “good faith” and “bad faith” in the material context; i. e., in the allegation of those facts in a plaintiffs’ petition essential to confer venue in a suit to recover land. Here this has relation to plaintiffs’ theory upon appropriate remedy, to-wit: the prior actionable fraud in the inducement of plaintiffs to part with title as applied to the land which is sought to be recovered by their suit.

The instant venue case — background

Plaintiffs below were Lois Anderson Clayton and her kindred, all hereinafter termed as the Claytons. Defendants were individual partners to the partnership McMahon-Bullington Drilling Company, and also that partnership, collectively hereinafter termed M-B; plus Texas Utilities Fuel Company, a corporation, hereinafter termed TUFCO.

On July 14, 1962 the Claytons had made over to M-B an oil, gas and mineral lease covering 2,415 acres in two tracts, located principally in Jack County but in part in Palo Pinto County, Texas. The lease was effective that date, for a period of 5 years, with provisions for annual specified “delay rentals” in the event drilling operations were not begun at specified times. In other words, M — B was not bound to drill for oil or gas, but held the 7/sth “working interest” for 5 years. In the event operations were begun and production obtained M-B’s right in the title extended as in normal cases, including the right to assign such “working interest” to others. By what might or might not be an appropriate construction of the contract of lease the Claytons contend that thereby, in the event of gas production, they would be entitled to have the appropriate one-eighth royalty payments measured by the yard-stick of market value at time of the production.

M — B’s acquisition of the lease was pursuant to its desire to “block up” a leased area of 30,000 acres, of which the Claytons’ property was a part, for prosecution of a plan to accomplish drilling operations thereon in the hope of obtaining production. In the acquisition it employed the services of a Mr. Joe Vickers, who was in business as independent contractor. There is no question but that Vickers was agent of M — B for purposes of lease acquisition. As a part of his compensation for services, at least as applied to the land leased from the Clay-tons, Vickers received “interests” in the “working interest” acquired by him as agent for M — B. Joe Vickers induced the Claytons to make the lease. All his conversations leading up to the execution of the Claytons’ lease was with a Mr. Joe Skiles, husband of one of those embraced in the group we term the Claytons.

M — B did not individually seek to develop any of the leased acres which Vickers “blocked up”. Rather did M-B seek to make a deal which would result in exploration for oil and gas by some other party, with provision that if such proved successful they would possess an interest therein. Such a transaction was effected by a contract called “Assignment of Oil and Gas Lease” executed by M-B to TUFCO approximately one year after the Claytons leased to M-B. In connection with that contract the operation privilege became that of TUFCO, at least for a period in excess of that with which we are concerned. Furthermore, in connection with the consideration for that contract between M-B and TUFCO (insofar as it is to be considered inter-se between these two contracting parties), it became the right of the latter to take as its own all the production which might be realized with a price specified. That price, though having reasonable relation to the market price for oil and gas at time the contract was executed, was unalterable until such time as TUFCO should recover its expenses of development. Disregarded by the M-B-TUFCO contract was any right of the Claytons to receive their royalty payments at a market price.

TUFCO began operations, drilling some wells which were productive and some which proved to be “dry holes”. By its contract with M — B, TUFCO was entitled to be reimbursed its expenses in drilling “dry holes”, and also its expenses in drilling productive wells. That entitlement, by the M-B-TUFCO contract, became one of the occasions for complaint by the Claytons.

As a result of the “Arab embargo” of late 1973 there was a substantial increase in the market prices for oil and gas. By the time of the venue hearing (upon Claytons’ petition filed October 31, 1977), the market price for gas was three times greater than the price by which M — B was bound in connection with its contract with TUFCO, at least for periods with which we are concerned.

The Claytons’ attorney was asked during the venue trial to state the alternate counts of the petition for relief, and he did so, to-wit:

“Count No. 1 is a trespass to try title count, in which we sue for the recovery of the land and sue for damages for the invasion of the corpus of the land and removal of natural gas therefrom. In the second count as alternative count we sue for a cancellation of an oil, gas and mineral lease for fraud and fraudulent concealment of material facts, for fraudulent conduct subsequent to the execution of the lease as grounds for cancellation of the lease. We also sue for removal of cloud on title as a part of such count. The third count is also a suit to cancel the lease but alleges as grounds independently of the ground to cancel the lease for fraudulent inducement of the lease, that we are equitably entitled to cancel the lease because of the fraudulent acts of the defendant in the execution of the conspiracy to defraud the plaintiffs by means of a sweetheart gas purchase contract permitting confiscation of the gas and gas products for a small fraction of the true value. And in the fourth count — and this is a suit for a breach of an implied obligation if not an express obligation on the part of the defendants to use good faith in the performance of the obligation of the defendants under the oil, gas and mineral lease if the same should be held not subject to cancellation, which is the primary cause of action, and in that connection we have alleged that by reason of the lack of good faith that we were deprived of the market value of gas of more than three times the price of gas received and we sue for the recovery of damages for that breach of good faith in carry (sic) out the obligations of the defendants under the contract and exemplary damages because of the conspiracy. In the fifth count, also as an alternative count, aside from the question of failure to use good faith, we allege that the defendant and each of them were guilty of gross negligence in the marketing of the gas from the lease and are in the further alternative that they were guilty of ordinary negligence in the marketing of such gas because we allege that had they used no due diligence or any kind of diligence at all and refrain from self-dealing in the sale of that gas, that the price would have been far, far above what was actually received and we allege in the count for gross negligence, in the alternative negligence. We have alleged that we are entitled to damages in the sum of a million dollars. In the sixth count, also as an alternative count, we have asked appointment of a receiver to take charge of the oil, gas and mineral estate in the land and to take possession of and market the gas pending the final disposition of the suit. . . . ”

M — B responded to the Claytons’ suit, insofar as it obtained against them, by filing the usual type of Plea of Privilege, adding the following: “The allegations made by the plaintiffs in regard to their alleged cause of action in trespass to try title and for cancellation of the oil, gas and mineral lease are not made in good faith or for probable cause but merely in a fraudulent effort to maintain venue in Jack County. The true nature of the plaintiffs’ cause of action and their real purpose in filing this suit is for the recovery of additional royalty for gas produced by the defendants . Venue in such an action, as against these defendants, lies in Wichita County, Texas, the county of residence of each of these defendants.” See 1 McDonald, Tex.Civ. Practice, 1965 Rev., p. 603, “Venue”, § 4.51 “Reply to Controverting Affidavit”.

TUFCO responded to the suit, insofar as it obtained against them, by filing the usual type of Plea of Privilege, adding the following: “The allegations made by Plaintiffs relating to trespass to try title and for cancellation of the lease in question have no foundation in fact or in law and were not made in good faith but purely for the purpose of attempting to maintain venue in Jack County, Texas.” TUFCO stated its residence as in Dallas County, Texas.

In their controverting affidavit to the Pleas of Privilege the Claytons relied upon V.A.T.S. Art. 1995, “Venue”, and its subdivision 14, “Lands”, along with subdivision 7, “Fraud and defalcation”; 23, “Corporations”; and 29a, “Two or more defendants” (none of whom are residents in county where suit is brought). We hold exception 23 to be inapplicable; we hold 29a to be applicable only in the event venue as against M-B may be retained in the county of suit under some other exception to the rules applicable to general venue (which we hold proper by exception 14 on “Lands”, though TUFCO is likewise proper to be held by exception 14). We hold, by reason of the failure in the Claytons’ evidence to establish the required elements of actionable fraud that they failed to establish right to retain venue under exception 7 on “Fraud”.

This leaves exception 14, “Lands” and it is thereunder we hold the Claytons did prove a right to retain venue in the county of the suit. Their parol evidence showed land location in Jack County and by the allegations of their petition that the suit was for the recovery of an interest in land located in Jack and Palo Pinto counties; and that the adjudication upon the Jack County land (in the county of suit) controlled, as well, as applied to the Palo Pinto County land. This we held in Leonard v. Carter, 389 S.W.2d 147 (Tex.Civ.App.—Fort Worth 1965, writ dism’d). In that case we were concerned with the question of “main purpose” of a plaintiff’s suit, not the matter of proof made necessary by a defendant’s allegation in a plea of privilege of a “want of good faith”. A question upon “main purpose” exists in the instant case also, presumably ruled upon by the trial court in the retention of venue, presumably by exception 14. We hold no error in the ruling. Of course it is the complete rescission of contract of lease as the ultimate in relief that the Claytons seek. They may eventually show themselves to possess a remedy which is not so drastic. That this might occur could not control nor impair a ruling upon “main purpose”.

Under exception 7, “Fraud, etc.”, the plaintiff was obliged to prove that there was fraud in inducing them to make the lease, i. e., that actionable fraud occurred in the county of venue inducing action which the Claytons would not have undertaken but for reliance thereon. 1 McDonald, Tex. Civ.Practice, 1965 Rev., p. 463, “Venue”, § 4.13, Art. 1995(7), “Fraud; . . . . ” Our holding, already once stated, is that the Claytons failed to make out a prima facie case against TUFCO by evidence to be considered under this exception.

Were the whole contention of right to retain venue in the county of suit dependent upon the proof of such actionable fraud plaintiffs could not be said to have established their right to have venue in the county where they had filed their suit. However, we hold that where the suit is for the recovery of an interest in land due to the very same fraud the plaintiffs do not have the duty to discharge the identical burden by evidence on hearing. Because the suit is for land it is the pleadings, and the good faith in facts pleaded, which is determinative of the Claytons’ right to have venue retained. Application of the rule to the instant case would mean the Claytons were obliged to merely prove that their allegations were not made in bad faith.

“Bad faith”, as a term, is the antithesis of “good faith” under like circumstances and conditions, carrying with it a suggestion of dishonesty. Fenner v. American Surety Co. of New York, 97 S.W.2d 741 (Tex.Civ.App.—Dallas 1936, aff’d at 133 Tex. 37, 125 S.W.2d 258 (1939)). What is written both by the Dallas Court of Civil Appeals and by the Commission of Appeals for the Supreme Court upon the matter of good faith and bad faith, and what those terms mean, are of controlling import as applied to the meaning to be attributed thereto in this venue case. (Of course the consideration in Fenner relative to the burden of proof would not have application to the circumstances of the instant case before us on appeal.) The Commission of Appeals stated, as applied to a purchaser of a negotiable instrument, “Unless the purchaser has actual knowledge of facts and circumstances that would render the paper noncollectible or has knowledge of such facts as that a purchase of the instrument would amount to bad faith, it is immaterial that he has notice of such facts as would put a reasonably prudent person on inquiry, and that such inquiry would lead to discovery. . To serve as evidence to support a finding of bad faith, the unheeded suspicious circumstances must be of a substantial character and so strong that bad faith rather than merely negligence can reasonably be inferred from them.”

The Fenner case returned once again to the appellate courts. Fenner v. American Surety Co. of New York, 156 S.W.2d 279 (Tex.Civ.App.—Waco 1941, writ ref’d w. o. m.). In the second trial the definition of the term “bad faith” had been given in the Court’s Charge as follows: “You are instructed that the term ‘bad faith’, as used in this charge, means that the person taking the instrument must have had knowledge of such substantial facts and circumstances as to create in his mind a suspicion that there was something wrong with the title of the person from whom he takes it, to the instrument itself, or to the money represented by such instrument, combined with an intentional disregard of and refusal on the part of the taker of the instrument to learn the facts from the means of knowledge which he knows are at hand.” The definition was approved by the Waco Court of Civil Appeals. In a discussion the court stated: “To serve as evidence to support a finding of bad faith, the unheeded suspicious circumstances must be of a substantial character and so strong that bad faith rather than merely negligence can reasonably be inferred from them”. (Quoted from West v. First Baptist Church of Taft, 123 Tex. 388, 71 S.W.2d 1090, 1097 (1934).) Further, it was remarked that: “It appears to have been decided by the great weight of authority that wilful ignorance is the equivalent of bad faith; and that bad faith may be shown by a wilful disregard of and refusal to learn the facts when available at hand”; and further, “The rule may perhaps be said to resolve itself into a question of honesty or dishonesty, for guilty knowledge and wilful ignorance alike involve the result of bad faith. They are the same in effect...."

Certainly may the presence or absence of “good faith” become a question of fact. Such was the circumstance in the Fenner case, for the issue there was one for the jury.

In the case before us both M-B and TUF-CO contend that there was no evidence whereby the trial court could have found “good faith" in the allegations of the Clay-tons which conferred venue upon the trial court. If the issue was raised then there was evidence supporting retention of venue and the presumed fact finding by the trial court that the Claytons’ allegations were made in good faith is to be sustained. There is not a contention that the trial court’s finding was contrary to the greater weight of the evidence adduced on trial.

Under the circumstances, already noticed, the Clayton’s right to maintain suit for the recovery of interests in land depends upon their proof of actionable fraud in the inducement to lease the property in 1972. The fact that there was failure to prove actionable fraud on the venue hearing (and as a consequence an inability to demonstrate the right to retain venue in the county of the suit under exception 7 on “Fraud”) does not establish — as a matter of law — that there were fraudulent averments in the Claytons’ petition or any pleading in want of their good faith.

As we view the situation: It could only be where the evidence shows that a plaintiff whose material allegations are under attack, knew them to have been false, when made and/or at time of the venue hearing, that they could be held in bad faith as a matter of law; otherwise, and when that is not shown, there would be merely presented an issue of fact to be determined by the fact finder if the plaintiffs’ evidence shows any good faith. Though a plaintiff’s hopes of making proper proof of the case plead at time of a trial on the merits might be shown to be probably incapable of fulfillment his allegation of such facts in his pleadings should nevertheless be deemed to have been made “hi good faith” so long as he might be held to have any justified reason to hope that at such time the requisite evidence would be available.

In this case, though actionable fraud in the inducement to contract was not proved upon the venue hearing, it may become possible to be proved by the Claytons at time of the trial on the merits. At least the contrary was not shown. Under these circumstances there was no error by the court in rendering a decree which retained venue in the county of suit.

We affirm the judgment.