author: CADENA, Chief Justice.

text:
    JOHNNIE C. IVY PLUMBING COMPANY, Relator, v. The Honorable Alfonso CHAPA, District Judge et al., Respondents.
    No. 16021.
    Court of Civil Appeals of Texas, San Antonio.
    June 14, 1978.
    Rehearing Denied June 12, 1978.
    Daniel R. Rutherford, Fred R. Granberry, San Antonio, for relator.
    Oliver S. Heard, Jr., San Antonio, for respondents.
   CADENA, Chief Justice.

The question in this case is whether a trial judge, in hearing a petition for a bill of review, may enter an interlocutory order which merely sets aside the prior judgment and set the case for trial on the merits at a later date.

Relator contends that a petition for bill of review calls for the entry of but a single judgment either denying the relief sought or setting aside the challenged judgment and entering a new judgment on the merits.

We agree with relator that considerations of public policy and judicial economy support the conclusion that the better practice upon a proceeding in the nature of a bill of review is for the trial court to determine not only the question of whether the challenged judgment should be set aside but also the merits of the controversy between the parties. Crook v. Williams, 526 S.W.2d 547 (Tex.Civ.App.—Tyler 1957, no writ). It is also settled that an order, following a hearing on a petition for bill of review, which merely sets aside the prior judgment is an interlocutory order which cannot be reviewed by appeal. Hubbard v. Tallal, 127 Tex. 242, 92 S.W.2d 1022 (1936).

Whatever may have been the rule prior to the adoption of Rule 174(b), Tex.R. Civ.P. (1977), which confers on the trial court broad discretion to order a separate trial of issues, we believe that Rule 174(b) permits the trial court to enter an order merely setting aside its previous judgment and setting issues relating to the merits of the action for subsequent trial. In Warren v. Walter, 414 S.W.2d 423 (Tex.1967), the Supreme Court said:

However, we are not satisfied that the opinion of the court of civil appeals has correctly declared the law in its statement that ‘Two trials, one to vacate the judgment by default and another on the merits of the original action, are not permitted, but every issue raised on both phases of the ease must be disposed of on one trial * * Cases cited by the court of civil appeals in support of the quoted holding were decided before adoption of the Texas Rules of Civil Procedure, including Rule 174(b) which confers broad discretion on trial courts to order a separate trial ‘of any separate issue.’ (Emphasis by • the Supreme Court.)

Admittedly, the language of the Supreme Court in Warren is not a disapproval of the holding of the intermediate court to the effect that “two trials * * * are not permitted, * * *.” However, we conclude that the provisions of Rule 174(b) permit the trial court to decide, by separate orders, the “separate issues” relating to vacation of the previous judgment and resolution of the original controversy on its merits.

The record in this case discloses that the trial judge, during the hearing which culminated in the order vacating the prior judgment, was directing his attention solely to the question of whether the prior judgment should be set aside, without reference to the merits of the original action. In view of Rule 174(b), we cannot say that in so limiting the scope of the hearing the trial judge abused his discretion.

The application for writ of mandamus is denied.


source: Caselaw Access Project

author: MURRAY, Justice.

license: Public Domain

text:
    Billie Frances VERBAL, Appellant, v. Joseph Floyd VERBAL, Appellee.
    No. 15896.
    Court of Civil Appeals of Texas, San Antonio.
    June 14, 1978.

      Samuel F. Biery, Biery, Biery, Davis & Myers, San Antonio, for appellant.
    Clarence R. McGown, San Antonio, for appellee.
   MURRAY, Justice.

This is an appeal from a judgment entered in a divorce action. Appellee Joseph F. Verbal instituted this suit against appellant Billie Frances Verbal seeking a divorce, a division of the estate of the parties, and for orders concerning custody of their minor child. After a trial before the court, sitting without a jury, judgment was entered dissolving the marriage, granting custody of the child to the appellant and dividing the property and awarding appellant $750 attorney’s fees. Appellant asserts on this appeal that the property division is inequitable and that the trial court failed to award her reasonable attorney’s fees. Appellant and appellee were married on December 30, 1949, and separated on or about July 27, 1977. Appellant and appellee have one minor daughter who was 13 years of age at the time of the trial. Appellee filed this suit for divorce on October 20, 1976, and appellant filed a cross-action for divorce on November 5, 1976. Previous to this case, in August of 1976, appellant filed suit for divorce against appellee which appellant later dismissed.

The property division made by the trial court was as follows: Appellant was awarded a 1974 Torino automobile, present value unknown; two lots and five acres of land located in Arizona, present value unknown; all household furnishings and appliances and other personal property in her possession, present value unknown; $75.00 in her checking account; and 22½ per cent of the total retirement pay of appellee when and if it is received.

Appellee was awarded a 1976 Pinto automobile, present value unknown; $56.00 in his checking account; $37.00 in his Federal Credit Union Account; all household furnishings and appliances and fixtures and other personal property in his possession; and 77½ per cent of his military retirement pay when and if received.

Appellant was ordered to pay $1,150.00 worth of debts which she had incurred since their separation, and appellee was ordered to pay approximately $4,700.00 in community debts. In addition to the community debts, the appellee was ordered to pay $750.00 attorney’s fees to the appellant’s attorney.

Appellant’s principal complaint relates to the court’s division of the military retirement benefits earned during the marriage. The record shows that at the time of the divorce, the appellee had been in the military service for 22 years and planned to stay on military service in the future. Military retirement benefits are community property, whether vested or non vested, where earned during the marriage and are subject to be apportioned on divorce. Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976). Courts are required to give due regard to the rights of the parties and make a division of property in a manner deemed just and right. Tex.Family Code Ann. § 3.63 (1975). In respect to a partition of the community estate of the parties, wide discretion is vested in the trial court. Kirkham v. Kirkham, 335 S.W.2d 393 (Tex.Civ.App.—San Antonio 1960, no writ).

We now examine appellant’s contention that the property division is manifestly unjust and unfair as to amount to an abuse of the court’s discretion. The record before us shows that the appellant plans on remaining in the service for six more years and possibly more. Appellee is presently a First Sergeant in the Army, and upon retirement could have 28 or more years of service. We point out that the judgment in this case has awarded the wife 22½ per cent of the retirement pay when received by appellee which will be a greater proportion than 22V2 per cent of the community interest in the retirement benefits. We believe the case of Miser v. Miser, 475 S.W.2d 597 (Tex.Civ.App.—Dallas 1971, writ dism’d), correctly sets out the formula to be used in determining the community interest in retirement benefits that have not matured at the time of the divorce. In Miser, supra, the parties had been married 170 months at the time of the divorce. The wife was awarded V2 of 170ths over the fraction of the number of months of active service until actual retirement. In Miser, unlike the present case, the actual percentage of the retirement pay that the wife will receive will not be determined until actual retirement. In the present case, the appellant is given 22½ per cent of the retirement earned by appellee during the marriage and 22½ per cent that will be earned in the future. Upon appeal it must be presumed that the trial court exercised its discretion properly and the cause will be reversed only where the division is manifestly unjust. Bell v. Bell, 513 S.W.2d 20 (Tex.1974); Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21 (1923); In Re Marriage of McCurdy, 489 S.W.2d 712 (Tex.Civ.App—Amarillo 1973, writ dism’d).

The decree of this case gives the appellant property which she may take immediate possession of and use. The record fails to disclose the value of this property. The judgment also gives appellant an interest in the retirement benefits that will be earned after the divorce by appellee and therefore, the percentage of the community portion of the retirement is increasing with each additional year that appellee serves on active duty. As we view the record, appellant failed to discharge her burden showing that the court’s order dividing the property was manifestly unjust and unfair or that there is a flagrant abuse of discretion to such an extent that the order should be set aside. Waggener v. Waggener, 460 S.W.2d 251 (Tex.Civ.App.—Dallas 1970, no writ); Williams v. Williams, 537 S.W.2d 107 (Tex.Civ.App.—Tyler 1976, no writ).

Appellant’s complaint regarding the amount of attorney’s fees appellee was ordered to pay is without merit and is accordingly overruled. Merrell v. Merrell, 527 S.W.2d 250 (Tex.Civ.App.—Tyler 1975, writ ref’d n. r. e.).

The judgment of the trial court is affirmed.

      . See Cearley v. Cearley, 544 S.W.2d 661, 664 (Tex.), for meaning of term “matured.”


text:
    NELSON INTERNATIONAL, INC. and Bill Price, Appellants, v. Deryl BOLIN, d/b/a Standard Drilling and Glen Davidson, Appellees.
    No. 16029.
    Court of Civil Appeals of Texas, San Antonio.
    June 14, 1978.
    Charles H. Clark, Tyler, for appellants.
    Mann, Freed, Kazen & Hansen, Laredo, for appellees.
   OPINION

MURRAY, Justice.

This is an appeal from an order of the trial court sustaining the plea of privilege of the appellees, Deryl Bolin and Glen Davidson. Appellants filed this suit against the appellees for damages growing out of an auction of oil field equipment. Appellants relied upon Subds. 7 and 29a of Tex. Rev.Civ.Stat.Ann. art. 1995, to maintain suit in Webb County. Deryl Bolin was the owner of the oil field equipment to be sold and Glen Davidson was a bidder at the sale. The fraud relied upon by appellants was the representations by Glen Davidson that he was bidding on the equipment on his own, that he was not bidding for the owner Bolin, and that he would pay for the equipment that day.

Appellant, Nelson International, and ap-pellee Deryl Bolin entered into a written auction contract whereby Nelson International was to auction the oil field equipment and Deryl Bolin agreed to sell the oil field equipment to the highest bidder with no minimum or reservations, no buy-backs, and no one bidding for the owner. As compensation for Nelson International, it was to receive seven and one-half per cent of the gross sales as commission, along with various miscellaneous expenses. The contract further provides in part:

Should the Owner, for any reason, break or cancel the terms of this contract, Owner agrees to pay Auctioneers a sum equal to the above stated advertising cost and said commissions based on the market value of listed property.

During the bidding on one certain rig, appellee Bolin felt that the rig was going too cheap and had appellee Davidson make a bid of $46,000 which turned out to be the high bid. Before the hammer fell on this bid, the auctioneer asked Davidson if he was bidding on his own, if he was bidding for the owner, and if he intended to pay for the equipment that day. Davidson represented to the auctioneer at that time that he was bidding for himself and would pay for the equipment that day. This lawsuit grew out of the failure of Davidson to pay for the equipment.

The appellees contend that the alleged fraud is merely incidental to the main cause of action asserted by appellants and that the true nature of appellants’ suit as revealed by the examination of the pleadings and the proof offered at the hearing, is one for breach of contract. We agree.

The rule is well established that in order to fall within Subd. 7, the “cause of action” must be one sounding in tort and not one for breach of contract, as to which allegations of fraud were merely incidental. Henson v. Henson, 181 S.W.2d 285 (Tex.Civ.App.—Austin 1944, no writ); Lewis v. Evans, 332 S.W.2d 795 (Tex.Civ.App.—Texarkana 1960, no writ); Kott v. Faircioth, 350 S.W.2d 668 (Tex.Civ.App.—Beaumont 1961, no writ); Sparks v. Chrysler Corporation, Airtemp Division, 353 S.W.2d 477 (Tex.Civ.App.—Beaumont 1961, no writ).

Appellants’ main cause of action is for money earned under the contract and the only fraud alleged or proved was the breach of contract by appellee Bolin, in having appellee, Davidson, bid for him.

The principal right asserted by appellants is based on the contract and the relief sought is for the breach thereof. The false statements made by appellant, Davidson, was only incidental to the right to recover on the contract. Therefore, the trial court properly granted the appellees’ plea of privilege. The judgment of the trial court is affirmed.


author: BRADBURY, Justice.

text:
    BOBBIE BROOKS, INC., Appellant, v. Joseph GOLDSTEIN, Appellee.
    No. 5120.
    Court of Civil Appeals of Texas, Eastland.
    June 15, 1978.
    Rehearing Denied July 13, 1978.

      Toby L. Gerber, Berman, Fichtner & Mitchell, Dallas, for appellant.
    W. Michael Byrd, Jr., Akin, Gump, Hauer & Feld, Dallas, for appellee.
   BRADBURY, Justice.

This is a suit by Joseph Goldstein, plaintiff, against Bobbie Brooks, Inc., defendant, for commissions earned as a salesman and for attorney’s fees. The case was tried to a jury which answered all issues in favor of plaintiff. Judgment was entered for Gold-stein. Defendant appeals and we affirm.

Commencing in 1959, Goldstein was associated with M & D Simon Company as a salesman of men’s sportswear. His commissions were five percent of his sales and he paid his own expenses. Goldstein testified that his five percent commissions were based on 85 percent of “accepted bookings”. He said the remaining 15 percent was to cover returns, discounts, cancellations and the like. In 1969, M & D Simon Company was absorbed by Bobbie Brooks, Inc., becoming one of its divisions and continuing to operate under the name of M & D Simon Company.

The principal disagreement between the parties was the method of calculating the commissions on sales for the fall and holiday seasons of 1974. Goldstein testified that when he first was employed by Simon he was guaranteed a commission based on 85 percent of his sales. The agreement was made by Max Simon, one of the founders of the company. Sidney Simon, about 1964, at a sales meeting at the company’s national headquarters in Cleveland, Ohio, announced that he was the first signer of NAM AC (National Association of Men’s Apparel Clubs) Points of Agreement. The agreement had three basic points, one being the guarantee to salesmen of 85 percent of booked orders. An NAMAC newsletter listing the manufacturing companies who had agreed to the points of agreement was admitted as evidence. Goldstein was a member of the National Association of Men’s Apparel Clubs and was a member at the time the points were agreed to by M & D Simon Company. When M & D Simon was merged with Bobbie Brooks, Goldstein said Sidney Simon called to tell him that nothing had changed and everything would remain the same. Goldstein testified that Simon stayed on with the company, he believed, as Chairman of the Board and told Goldstein that all agreements Goldstein had entered into would be the same and none would be terminated.

Defendant’s witness, Leonard J. Intelisa-no, by deposition, testified he communicated with one of their retired salesmen who confirmed that the company had agreed to such points. In his deposition, he was asked:

“QUESTION: ‘Do you know if at the present time, or at any time in the past, if the salesmen for M & D Simon were members of that club?’
Your answer?
A You want me to read it?
Q Yes, please.
A ANSWER: T know that now because I have read Joe Goldstein’s deposition, and apparently, he was involved in it and a number of other older salesmen.’ ”

Defendant argues that “accepted orders” or “accepted bookings” did not include customer cancellations. The evidence reveals an unusual number of cancellations for the periods material to this suit.

Defendant urges nine points of error. The first point complains of the exclusion of certain testimony offered by the .witness, Leonard Intelisano, regarding his definition of “accepted bookings”. Intelisa-no was present and testified but the offered and unadmitted testimony was offered by his deposition. The deposition was not signed. It was not admissible. Rule 209, T.R.C.P.; Tian v. Warren, 271 S.W.2d 453 (Tex.Civ.App.—San Antonio 1954, writ ref. n. r. e.). The witness had testified at length about the same matter and by the use of exhibits, admitted as evidence, had fully developed defendant’s position as to “accepted bookings” and “accepted orders”. The testimony, not admitted, was cumulative of matters which were otherwise fully developed. There was no error in excluding the deposition. Cottrell v. Texas Employers’ Insurance Association, 293 S.W.2d 219 (Tex.Civ.App.—San Antonio 1956, writ ref. n. r. e.).

In its second and third points, defendant complains that the trial court improperly refused to admit into evidence two of its exhibits. These related to customer cancellations and defendant says the information in the exhibits would constitute proof of defendant’s claim of offset. Defendant argues that these were admissible by the provisions of Article 3737e, V.A.T.S.

The records in question, the witness Intelisano testified, were business records kept in the regular course of business of defendant and these records reflected order cancellations made by customers and those made by the company. As the information of these cancellations came into the company office, a decision had to be made by a company employee as to coding a cancellation as having been made by a customer or by the company. To determine whether the cancellation would be charged to the customer or to the company, someone would have to know about that transaction. This information was received in the company office, orally, by telephone, and written communication. The one receiving this information would make a decision in which column, customer or company, it would be listed. Intelisano testified further the company employee making this decision had to secure the information about the transaction from other parties. In Skillern & Sons, Inc. v. Rosen, 359 S.W.2d 298 (Tex.1962), the court stated:

“Some employee or representative who either made the record or transmitted the information to another to record must have had personal knowledge of the act, event or condition in order for such record to be admissible under the business records exception to the hearsay rule. Sec. 1(b). For example, a doctor’s statement as to whether a patient had or had not lacerations of the face, as to his pulse rate or blood pressure, and as to things that happen within the hospital are within the doctor’s or nurse’s personal knowledge. However, statements as to how an accident happened or where it happened, age, medical history, etc., do not become particularly trustworthy just because it is hospital routine to record them and they should be excluded. The legislature has provided for their exclusion by the requirement of personal knowledge by an employee or representative of the ‘business’ (e. g., hospital). The latter examples are not within the personal knowledge of the hospital personnel. They have no personal knowledge of how or where the patient was injured.”

See Cooper Petroleum Company v. LaGloria Oil and Gas Company, 436 S.W.2d 889 (Tex.1969). In North Texas Lumber Company v. Kaspar, 415 S.W.2d 470 (Tex.Civ.App.—Dallas 1967, writ ref. n.r.e.), the court wrote:

“We hold, as the trial court held, that the excluded portion of the card was inadmissible because there was no proof as to who wrote the information contained in it, nor whether that person had personal knowledge of the information so written .. . ”

It is clear that the employee of defendant who listed cancellations under customer or company headings had no personal knowledge of the transaction to which the information related.

Eubanks v. Winn, 469 S.W.2d 292 (Tex. Civ.App.—Houston (14th Dist.) 1971, writ ref. n.r.e.), on which defendant relies, is not in point. In that case, the one making a judgment notation in the medical records was entering a record of an opinion on which there was no disagreement. Also, it was made by one with personal knowledge.

Defendant was not injured, even if the exhibits were admissible, because essentially the same information was before the jury by testimony of defendant’s witness, Intelisano, and by defendant’s other exhibits. Cottrell v. Texas Employers’ Insurance Association, supra.

Defendant complains of the ruling of the trial court in refusing to admit certain letters, as evidence. Plaintiff’s attorney had written to defendant stating plaintiff’s claim. Defendant replied in two letters setting out his position. The matters referred to in the letters were otherwise before the jury and had been extensively testified to by both plaintiff’s and defendant’s witnesses and exhibits of both parties. The letters would not have added anything concerning the material issues that was not otherwise before the jury. This point is overruled. Rule 434, T.R.C.P.

In his fifth point of error, defendant says the trial court should have submitted an explanatory definition of the term “accepted bookings”.

The NAMAC newsletter listing manufacturers that had endorsed the points of agreement states: “These are the ‘POINTS of AGREEMENT’. 1. Guaranteed commission of 85% on accepted orders booked. 2. Territorial protection for salesmen.” In an “Editor Reports” column, the following is written: “As is known, the ‘points’ state that a salesman should be guaranteed commissions on at least 85 percent of his approved orders. Most of the manufacturers with whom this has been discussed have agreed that they ship 95 percent of their orders — and some ship more. They feel this is a fair basis — and make allowances for exigencies, not including of course acts of God.”

It is evident that the terms “accepted orders booked”, “approved orders”, and “accepted bookings” as used in this factual situation were ambiguous. Both parties tendered extensive testimony as to each party’s interpretation of these terms. Our Supreme Court in Trinity Universal Insurance Company v. Ponsford Brothers, 423 S.W.2d 571 (Tex.1968) wrote: “The jury may, however, resolve an ambiguous intent, and the issue asked about intent as a fact issue.” See Wirtz v. Orr, 533 S.W.2d 468 (Tex.Civ.App.—Eastland 1976, writ ref. n.r. e.). In Martin v. Davis Constructors, Inc., 552 S.W.2d 873 (Tex.Civ.App.—San Antonio 1977, writ ref. n.r.e.), the court held that if the contract is susceptible of more than one meaning and is ambiguous, extrinsic evidence was properly admissible to remove ambiguity of words used in the contract and it was for the jury to resolve the issue as to intent of the parties. If the trial court had defined the term “accepted bookings”, it would have improperly invaded the province of the jury.

Next, we consider if hearsay testimony was admitted over objection, regarding the terms of the agreement, made by Goldstein with M & D Simon Company, defendant’s predecessor-in-interest. Gold-stein testified about his relations with M & D Simon, and his agreement with Sidney Simon. Sidney Simon became Chairman of the Board when M & D Simon was merged with defendant’s company. Defendant’s witness, Intelisano, Vice-President of Finance and Administration for M & D Simon Company, testified he had knowledge of the contract between plaintiff and defendant. He also testified that Sidney Simon was president of M & D Simon Company for a number of years and at time of trial, was chairman of the division. He was asked, “As the president and then the chairman of the M & D Simon Company division, I take it that particularly as president, he numbered among his duties the hiring and firing of personnel. He had some responsibility for that?” He answered, “Yes”. Question: “Was he authorized to deal with salesmen and enter into agreements with them?” Answer: “Yes”. The conversations testified to by Goldstein constituted operative facts and not hearsay. The point is overruled.

Defendant contends that plaintiff is not entitled to attorney’s fees. Defendant says that Article 2226, V.A.T.S., does not authorize recovery of attorney’s fees in that plaintiff had a special contract with defendant. Our Supreme Court in Tenneco Oil Co. v. Padre Drilling Co., 453 S.W.2d 814 (Tex.1970) held that attorney’s fees were authorized if the claim falls within any of the classes of cases enumerated in Article 2226. The court also said, “We are not to be understood as holding that claims for personal services rendered and labor done cannot be founded upon contract. A contract for purely personal services or for labor only will support an award of an attorney’s fee.” See Alpert v. Jarrell Carpentry Company, 510 S.W.2d 136 (Tex.Civ.App.—Dallas 1974, no writ); Brown v. Cox, 459 S.W.2d 471 (Tex.Civ.App.—Houston (14th Dist.) 1970, writ ref. n.r.e.). Since the opinion in the Tenneco case, Article 2226, V.A.T.S., has been amended. The facts in the instant case arose after the amendment, effective in 1971, when the word “personal” was deleted from the phrase “for personal services rendered.” The amendment to Art. 2226, effective in September 1977, has no application here so we look to Art. 2226 as it read in 1974. Plaintiff was a salesman as such and was in direct contact with both customers and company. He employed at his expense and under his supervision other sales-’ men. The word “services” has a broader meaning than “personal services”. The essence of the claim sued upon was for services rendered and is consistent with the provisions of Article 2226, V.A.T.S. Lone Star Gas Company v. Howard Corporation, 556 S.W.2d 372 (Tex.Civ.App.—Texarkana 1977, writ ref. n.r.e.). We hold that plaintiff rendered services to defendant during the time in question for which attorney’s fees were recoverable by the provision of Art. 2226. Defendant says plaintiff did not make presentment of his claim prior to filing suit. This contention is overruled. Plaintiff’s exhibit of October 4, 1974, was sufficient presentment. King Optical v. Auto Data Processing, 542 S.W.2d 213 (Tex.Civ.App. — Waco 1976, writ ref. n.r.e.).

Defendant complains of the award of prejudgment interest on the narrow ground that plaintiff’s principal damage was not determinable and established at a definite time. Both parties cite McDaniel v. Tucker, 520 S.W.2d 543 (Tex.Civ.App.—Corpus Christi 1975, no writ). The court stated:

“The test is whether or not the measure of the recovery or claim, and not necessarily the amount of damages, is fixed by the conditions existing at the time the injury arose or was inflicted. If the measure is determinable at the time of the injury, interest is properly awarded from the time of the injury, and is added by the court to the amount of damages in rendering judgment. Reed v. Fulton, 384 S.W.2d 173 (Tex.Civ.App.— Corpus Christi 1964, writ ref’d n.r.e.); Metal Structures Corporation v. Plains Textiles, Inc., 470 S.W.2d 93 (Tex.Civ. App.—Amarillo 1971, writ ref’d n.r.e.); Beck v. Lawler, 422 S.W.2d 816 (Tex.Civ.App.—Fort Worth 1967, writ ref’d n.r.e.). In the case at bar, the measure of the recovery was determinable at the time the injury occurred, which was on September 10,1971, when the work was completed.”

The formula, the guidelines, by which the jury ultimately determined the amount defendant owed plaintiff, were known and fixed at the time of plaintiff’s termination of employment by defendant. The objective conditions then existed and it was only a matter of the jury applying these to the facts to determine the amount of the indebtedness. Texas Company v. State, 154 Tex. 494, 281 S.W.2d 83 (1955); City of Corpus Christi v. Drought, 380 S.W.2d 645 (Tex.Civ.App.—San Antonio 1964, writ ref. n.r.e.).

In its final point of error, defendant says the trial court erred in not granting a new trial because of jury misconduct as three or four of the jurors used electronic calculators during deliberations. Other jurors by pencil and paper made their calculations and the results were substantially the same. The jury first agreed on the amount of accepted bookings plaintiff had secured then applied 85 percent to the figure and by use of the calculator and manually arrived at the figure to be used in answering Issues 3 and 4. There is nothing to indicate any error in the results. Defendant did not discharge its burden of proving jury misconduct. Rule 327, T.R.C.P.; St. Louis Southwestern Railway Company v. Gregory, 387 S.W.2d 27 (Tex.1965).

All of defendant’s points of error have been considered and are overruled.

Judgment of the trial court is affirmed.


author: KLINGEMAN, Justice.

text:
    Don H. RAYBOURN, Appellant, v. Evander M. LEWIS, Edwin M. Jones Oil Company and 404 Development Company, Appellees.
    No. 15952.
    Court of Civil Appeals of Texas, San Antonio.
    June 20, 1978.
    Rehearing Denied July 12, 1978.
    Earle Cobb, Jr., Cobb, Thurmond, Bain & Clark, San Antonio, for appellant.
    Michael J. Kaine, Morrison, Dittmar, Dahlgren & Kaine, San Antonio, for appel-lee.
   KLINGEMAN, Justice.

This is a suit by Don H. Raybourn, appellant herein, against jSvander M. Lewis, Edwin M. Jones Oil Company, and 404 Development Company, appellees herein, for breach of an oral contract pertaining to the purchase, development and sale of real estate, and, alternatively, in quantum meruit for services rendered. Appellees filed a motion for instructed verdict, asserting: (a) the suit is on an oral contract for a fee for services involving real estate and there is no pleading or proof that appellant has a real estate license; (b) since recovery for compensation for appellant’s services is barred by Article 6573a, Tex.Rev.Civ.Stat. Ann. (1978), The Real Estate License Act, he is precluded from recovery for the same services on a theory of quantum meruit; (c) appellant assigned his interest in such fee, if any, to Property Planning and Development Company, and there is a fatal variance between the pleading and the proof; (d) the oral contract is void because of indefiniteness and uncertainty. The trial court entered an instructed verdict that appellant take nothing.

Appellant asserts five points of error: (1) the trial court erred in granting an instructed verdict because appellant’s evidence was sufficient to establish a prima facie case for recovery; (2) the trial court erred in holding as a matter of law that the contract violated Article 6573a, The Real Estate License Act; (3) the trial court erred in failing to hold that plaintiff was exempt from the provisions of Article 6573a; (4) the trial court erred in holding as a matter of law that appellant’s claim was assigned to and assumed by Property Planning and Development Company prior to the time appellant performed any of the services; (5) the trial court erred in holding as a matter of law that there was no partnership between appellant and appellees.

Appellees, in their motion for instructed verdict, asserted several independent grounds. The judgment does not state upon which ground it was granted.

When a motion for instructed verdict has been granted, the aggrieved party, in order to obtain relief in this court, has the burden of establishing that the preemp-tory instruction cannot be supported on any of the grounds set forth in the instructed verdict. McKelvy v. Barber, 381 S.W.2d 59 (Tex.1964); Goldring v. Goldring, 523 S.W.2d 749 (Tex.Civ.App.—Fort Worth 1975, writ ref’d, n. r. e.); Carrico v. Stop-N-Go Markets of Texas, Inc., 492 S.W.2d 383 (Tex.Civ.App.—San Antonio 1973, no writ).

It is undisputed that Raybourn did not have nor has he ever had a real estate broker’s license and also that he is not a licensed real estate salesman or appraiser.

Although appellees’ motion for instructed verdict sets forth several independent grounds, we deem it unnecessary to discuss all of the grounds on which the instructed verdict might have been granted and will devote this opinion to a discussion of the undisputed fact that Raybourn did not have a real estate broker’s license and the application thereto of the provisions of Article 6573a, The Real Estate License Act.

The pertinent provisions of The Real Estate License Act here involved may be summarized as follows:

Sec. 2.
(2) ‘Real estate broker’ means a person who, for another person and for a fee, commission, or other valuable consideration, or with the intention or in the expectation or on the promise of receiving or collecting a fee, commission, or other valuable consideration from another person:
(A) sells, exchanges, purchases, rents, or leases real estate;
(B) offers to sell, exchange, purchase, rent, or lease real estate;
(C) negotiates or attempts to negotiate the listing, sale, exchange, purchase, rental, or leasing of real estate;
(D) lists or offers or attempts or agrees to list real estate for sale, rental, lease, exchange, or trade;
(E) appraises or offers or attempts or agrees to appraise real estate;
(F) auctions, or offers or attempts or agrees to auction, real estate;
(G) buys or sells or offers to buy or sell, or otherwise deals in options on real estate;
(H) aids, attempts, or offers to aid in locating or obtaining for purchase, rent, or lease any real estate;
(I) procures or assists in the procuring of prospects for the purpose of effecting the sale, exchange, lease, or rental of real estate; or
(J) procures or assists in the procuring of properties for the purpose of effecting the sale, exchange, lease or rental of real estate.
(3) ‘Broker’ also includes a person employed by or on behalf of the owner or owners of lots or other parcels of real estate, at a salary, fee, commission, or any other valuable consideration, to sell the real estate or any part thereof, in lots or parcels or other disposition thereof. It also includes a person who engages in the business of charging an advance fee or contracting for collection of a fee in connection with a contract whereby he undertakes primarily to promote the sale of real estate either through its listing in a publication issued primarily for such purpose, or for referral of information concerning the real estate to brokers, or both.
(4) ‘Real estate salesman’ means a person associated with a Texas licensed real estate broker for the purposes of performing acts or transactions comprehended by the definition of ‘real estate broker’ as defined in this Act.
Sec. 4. A person who, directly or indirectly for another, with the intention or on the promise of receiving any valuable consideration, offers, attempts, or agrees to perform, or performs, a single act defined in Subdivisions 2 and 3, Section 2 of this Act, whether as a part of a transaction, or as an entire transaction, is deemed to be acting as a real estate broker or salesman within the meaning of this Act. The commission of a single such act by a person required to be licensed under this Act and not so licensed shall constitute a violation of this Act.
Sec. 20. (a) A person may not bring or maintain an action for the collection of compensation for the performance in this state of an act set forth in Section 2 of this Act without alleging and proving that the person performing the brokerage services was a duly licensed real estate broker or salesman at the time the alleged services were commenced, or was a duly licensed attorney at law in this state or in any other state.
(b) An action may not be brought in a court in this state for the recovery of a commission for the sale or purchase of real estate unless the promise or agreement on which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged or signed by a person lawfully authoñzed by him to sign it.

Appellant, by one point of error, asserts that the trial court erred in failing to hold that appellant was exempt from the provisions of Article 6573a, The Real Estate License Act. There is no evidence in the record whatsoever to establish any of such exemptions.

Appellant’s pleadings assert that the contract involved provided for a $15,000 annual salary plus ten per cent (10%) of the profits. Raybourn’s own testimony was to the effect that: he is not a licensed appraiser or broker of real estate; that appellees needed a real estate advisor; that after some discussion they entered into an agreement whereby he was to get an annual salary of $15,-000 and ten per cent (10%) of the profits; that he has not been paid ten per cent (10%) of the profits; that the gross profits of all the transactions was $1,691,000, and that he was entitled to $148,600; that after a month of working as an individual, his corporation (Property Planning and Development Company) took over the transactions involved; that Raybourn was the one who caused the purchase of various tracts of real estate; that land was bought on his advice. He testified in some detail as to various real estate transactions that he was involved with; that he was the real estate advisor that said, “That’s good property, put your money in it.”; that he arranged for the purchase of land.

Our courts require a strict compliance with the terms of The Real Estate License' Act if a broker or salesman is to use the courts for recovery of his fees or charges for services. Hall v. Hard, 160 Tex. 565, 335 S.W.2d 584 (1960); Macphee v. Kinder, 523 S.W.2d 509 (Tex.Civ.App.—San Antonio 1975, no writ); Struller v. McGree, 374 S.W.2d 256 (Tex.Civ.App.—San Antonio 1963, writ ref’d, n. r. e.).

We regard the recent Supreme Court decision in Coastal Plains Development Corporation v. Micrea, Inc., 21 Tex.Sup.Ct. 337 (April 26, 1978), as directly in point. This was an action for breach of contract involving the development and sale of lots in a subdivision. Micrea, Inc., the promoter and seller of the lots, brought suit against the landowner. The trial court entered judgment for Micrea, Inc., in the amount of $123,393.94, which was affirmed by the Court of Civil Appeals (553 S.W.2d 816). The Supreme Court reversed the judgment of the court below and rendered judgment for Coastal Plains.

The contract involved was a valid, written contract. Micrea, among other things, contended that the contract created a joint venture. One of the provisions of the contract called for an equal division of profits. The Supreme Court held that even if the equal division of profits was otherwise sufficient, the contract did not have any express agreement for sharing the losses, and the latter was essential to constitute a joint venture. The Court then held that based upon the clearly expressed intent of the parties and the absence of any contrary provision for the sharing of losses, that the parties were not participants in a joint venture.

The Supreme Court further said:

Coastal Plains contends that Micrea cannot prevail in its action because it has not complied with § 19, Article 6573a, the Real Estate License Act. We agree. That section prohibits suits for compensation for certain named services by a person or company not duly licensed as a real estate broker or salesman at the time the services are commenced.
The services referred to in § 19 are set forth in § 4(1) of Article 6573a. They include selling, offering to sell, negotiating the sale of or advertising or holding oneself out as being engaged in the business of selling real estate.
Micrea would distinguish the instant case from one subject to the provisions of the Real Estate License Act on the basis that this is a suit for damages occasioned by a breach of contract, not a suit for compensation. The term ‘compensation’ as used in § 19 is defined in § 4(5) to ‘include any fee, commission, salary, money or valuable consideration, as well as the promise thereof and whether contingent or otherwise.’ This action is one for lost profits which are nothing more or less than anticipated ‘compensation’ for the rendition of the services of a real estate broker or salesman.

Although appellant makes some contention that he was engaged in a “joint venture” or “partnership,” appellant’s own testimony completely refutes this. To constitute a “joint venture,” several essential elements are generally required. These elements are: (a) a community of interest in the venture; (b) an agreement to share profits; (c) an agreement to share losses; and (d) a mutual right of control or management of the enterprise. Coastal Plains Development Corp. v. Micrea, Inc., supra; Brown v. Cole, 155 Tex. 624, 291 S.W.2d 704 (1956); Luling Oil & Gas Co. v. Humble Oil and Refining Co., 144 Tex. 475, 191 S.W.2d 716 (1945); Chandler v. Herndon, 450 S.W.2d 703 (Tex.Civ.App. 1970, writ ref’d, n. r. e.). In the case before us, while there is some evidence of an intent to share profits, there is no evidence whatsoever of sharing of losses. Furthermore, Raybourn testified several times that control was solely in appellees, and appellant in his brief stated that he was acting solely under the control of appellees.

There is no evidence whatsoever establishing a joint venture or a partnership.

Raybourn’s own testimony establishes that his activities include the following listed activities, which are listed under the definition of “real estate broker” in the Real Estate License Act: (a) sells, exchanges, purchaser,, rents or leases real estate; (b) negotiates or attempts to negotiate the leasing, selling, exchanging, purchasing, rental, or leasing of real estate; (e) appraises or offers or attempts or agrees to appraise real estate; (h) aids, attempts, or offers to aid in locating or obtaining for purchase, rent, or lease, any real estate; (j) procures or assists in the procuring of property for the purpose of effecting the sale, exchange, lease, or rental, of real estate.

We agree with appellees’ contention that appellant cannot prevail in this action because he has not complied with the applicable provisions of Article 6573a, The Real Estate License Act.

The trial court correctly granted the motion for instructed verdict. The judgment is affirmed.

MURRAY, J., did not participate in the disposition of this appeal.

      . Exemptions.
      Sec. 3. The provisions of this Act shall not apply to any of the following persons and transactions, and each and all of the following persons and transactions are hereby exempted from the provisions of this Act, to wit:
      (a) an attorney at law licensed in this state or in any other state;
      (b) an attorney in fact under a duly executed power of attorney authorizing the consummation of a real estate transaction;
      (c) a public official in the conduct of his official duties;
      (d) a person acting officially as a receiver, trustee, administrator, executor, or guardian;
      (e) a person acting under a court order or under the authority of a will or a written trust instrument;
      (f) a salesperson employed by an owner in the sale of structures and land on which said structures are situated, provided such structures are erected by the owner in the due course of his business;
      (g) an on-site manager of an apartment complex;
      (h) transactions involving the sale, lease, or transfer of any mineral or mining interest in real property;
      (i) an owner or his employees in renting or leasing his own real estate whether improved or unimproved;
      (j) transactions involving the sale, lease or transfer of cemetery lots.


author: CIRE, Justice.

text:
    Samuel D. SIMS, Appellant, v. Horace B. HILL, Appellee.
    No. 1818.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    June 21, 1978.
    Alvin L. Freeman, Freeman & Rockwell, Houston, for appellant.
    Charles J. Sullivan, Sullivan, Bailey, King & Sabom, Houston, for appellee.
   CIRE, Justice.

Samuel D. Sims appeals from a judgment which awarded him $5,449.00 as his portion of the partnership interest between him and Horace B. Hill, appellee.

Sims filed his original petition in July 1975, alleging that he had entered into a verbal partnership agreement with Hill for the purpose of establishing and operating a certified public accounting practice. His petition detailed the alleged nature, extent, terms, and value of the alleged partnership and the alleged value of his interest therein. He claimed that he was given an initial twenty percent interest in the partnership and the alleged agreement called for an incremental two percent increase per year. Sims alleged that, at the time he withdrew from the partnership in January 1974, he had a twenty-two percent interest in the partnership which had a value of $31,050.88. Sims apparently arrived at this monetary figure by examining the partnership books. He allegedly considered the accounts receivable, cash on hand, fixtures, equipment, and unpaid liabilities.

Hill’s original answer was an unverified general denial. He subsequently filed an amended answer in which he admitted that he had entered into an oral agreement with Sims to form an accounting partnership. However, Hill denied the partnership was based on the terms as alleged by Sims. Hill’s amended answer was also unverified.

The trial court heard the case in August 1977. At the commencement of the trial Sims moved for “judgment on the pleadings” due to the fact that Hill had failed to deny the existence of the partnership as required by Texas Rule of Civil Procedure 93(f). The trial court refused the motion and additionally refused to allow Hill by amendment to properly verify his amended answer. The trial court ruled that Hill’s failure to properly verify his denial constituted an admission that a partnership existed between the parties. However, under that ruling, Sims still had the burden of proving the terms of the partnership. Both parties introduced evidence, and, after the parties had rested, the trial court entered judgment awarding Sims $5,449.00. The court also made findings of fact and conclusions of law. Included in the various findings was the finding that the money awarded to Sims represented his twenty-two percent interest in the partnership and also that Hill’s answers to Sims’ request for admissions constituted pleadings pursuant to Texas Rule of Civil Procedure 169.

Sims appeals, asserting two points of error committed by the trial court. His first point claims that the trial court erred in admitting Hill’s evidence regarding the nature, extent, and value of the partnership and Sims’ interest therein. Sims claims that Hill should have been precluded from adducing any evidence regarding the nature of the partnership because Hill failed to file a verified denial denying the existence of the partnership as required by Rule 93(f).

Rule 93(f) requires that “[a] denial of partnership as alleged in any pleading as to any party to the suit” be verified by affidavit. Hill failed to comply with this rule. We have examined the authorities under Rule 93(f) and conclude that a failure to verify a denial of partnership results in an admission of its existence; it cannot properly be contradicted at trial. See Coulson v. Alvis Auto Rentals, Inc., 352 S.W.2d 849 (Tex.Civ.App.—Fort Worth 1961, writ ref’d n. r. e.); Howell v. Bowden, 368 S.W.2d 842 (Tex.Civ.App.—Dallas 1963, writ ref’d n. r. e.); Hosack v. Cassidy, 543 S.W.2d 202 (Tex.Civ.App.—Corpus Christi 1976, no writ). However, the cases under Rule 93(f) do not blindly accept the nature, extent, terms, and value of the partnership simply from the pleadings; they cite evidence to support the pleadings. See, e. g., Howell, supra.

In the case before us, Hill admitted the partnership. Indeed, he was precluded from denying the existence of the partnership under Rule 93(f). But the trial court did not accept, on its face, the allegations of Sims’ petition regarding the nature, extent, terms, and value of the partnership. It is clear that a controversy existed with regard to its value. Both parties introduced evidence and exhibits and the court arrived at a proper conclusion; it found that Sims had a twenty-two percent interest in the partnership and proceeded to determine the monetary value of that percentage. We think the trial court’s action was proper and we overrule appellant Sims’ first point of error.

Sims’ second point claims that the trial court erred in holding that his request for admissions from Hill and Hill’s answers to those admissions constituted pleadings. We agree, that the trial court erred in its first conclusion of law when it held that admissions under Rule 169 constitute pleadings; they are not pleadings.according to the Texas Rules of Civil Procedure. Petitions and answers constitute pleadings. Tex.R.Civ.P. 45. However, because of our holding regarding Rule 93(f), the error was harmless.

Appellant Sims’ two points of error are hereby overruled. The trial court’s award of $5,449.00 to Sims is affirmed.

Affirmed.


author: J. CURTISS, BROWN, Chief Justice. .

text:
    Lloyd Wayne OLIVER, Appellant, v. Joan Colleen OLIVER, Appellee.
    No. 1819.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    June 21, 1978.
    David C. Cobb, Harry Noe, Ellis McCullough, Houston, for appellant.
    Claude R. Hazel, Houston, for appellee.
   J. CURTISS, BROWN, Chief Justice. .

Joan Colleen Oliver (appellee) obtained a default judgment granting her a divorce from Lloyd Wayne Oliver (appellant) on September 12, 1977. The appellant timely filed his motion and amended motion for new trial, which the trial court granted as to the division of property but otherwise overruled on October 4, 1977. The trial court entered judgment dividing the parties’ property on November 7, 1977, from which final order the appellant brings this appeal.

The appellant has assigned five points of error. He contends, in his first point, that he was unable to obtain a record of the testimony presented in the original divorce proceeding because no court reporter was present during that proceeding. Although this assertion finds no support in the record, it stands unchallenged by the appellee, and we accept it as true. Bond v. Bond, 547 S.W.2d 43 (Tex.Civ.App.—Eastland 1976, writ ref’d n. r. e.); Tex.R.Civ.P. 419. Our supreme court held in Rogers v. Rogers, 561 S.W.2d 172 (Tex.Sup.1978), that an appellant is entitled to a new trial where he is “unable to obtain a Statement of Facts from the official court reporter because that court official did not attend the trial of the case.” Id. at 173.

We realize that Rogers has the practical effect of requiring the presence of court reporters in uncontested divorce proceedings and, thus, may burden the courts hearing such cases. We also appreciate that the application of this rule may prove disruptive, since the same contention may be available on writs of error, althoiigh it apparently will not afford a basis for having judgments set aside by bills of review. Clayton v. Clayton, 547 S.W.2d 719 (Tex. Civ.App.—El Paso 1977, writ dism’d). While we generally favor the policy of having those proceedings reported, whether they be conducted in open court or in chambers, we have previously held that the appellant must comply with the requirements of Tex.R.Civ.P. 377. See Brown v. Brown, 520 S.W.2d 571 (Tex.Civ.App.—Houston [14th Dist.j 1975, no writ). Our inclination in this regard has been preempted, however, by our supreme court’s holding in Rogers. The appellant’s first point of error is therefore sustained. We find it unnecessary to reach his other points, and we express no opinion thereon.

The judgment of the trial court is hereby reversed, and the case is remanded for a new trial.

Reversed and remanded.


author: CLAYTON, Justice. DIES, Chief Justice,

text:
    BIG D BAMBOO, INC., et al., Appellants, v. The STATE of Texas, Appellee.
    No. 8135.
    Court of Civil Appeals of Texas, Beaumont.
    June 22, 1978.

      Randall Buck Wood, Austin, for appellants.
    Gilbert J. Bernal, Jr., Austin, for appel-lee.
   CLAYTON, Justice.

Appellee, the State of Texas, acting by and through its Alcoholic Beverage Commission (hereinafter referred to as TABC), filed suit against Big D Bamboo. Inc., and National Surety Corporation, appellants, for the recovery of $13,132.36 in gross receipts liquor taxes due under Tex. Penal Code Aux. Laws art. 666-20d . Specifically, appellant National Surety Corporation was sued for forfeiture of its bonds made payable to appellee and executed in behalf of appellant Big D Bamboo, Inc., as a per-mittee. Because of appellant’s failure to answer appellee’s suit under Tex. R. Civ. P. 185, as required by Tex. Penal Code Aux. Laws art. 666-12a(5), appellee filed a motion for summary judgment. This motion was granted by the trial court for full recovery of appellee’s claim. Appellants have perfected their appeal from this summary judgment.

In 1975 TABC audited the business of Big D Bamboo, Inc., a holder of a mixed beverage permit from the State, to determine any liability for gross receipts liquor taxes. Appellant requested a hearing, and such hearing was held on August 18, 1975. The hearing, according to the hearing transcript, was conducted, “In re hearing on complaint for cancellation or suspension of mixed beverage permit No. MB 78837 The hearing was recessed so that appellant could file an affidavit with the hearing examiner to explain his pricing and his practice regarding complimentary drinks. During this recess, appellant voluntarily permitted his permit to expire. As a result of this voluntary expiration of appellant’s permit, the examiner refused to reconvene the hearing and did not enter an order in connection with such hearing. An additional audit was then conducted by TABC and demand was made on appellants to pay the deficiency. Upon appellants’ refusal and failure to pay, TABC certified the deficiency to the Office of the Attorney General which filed suit against appellants for the full amount of the taxes owed as certified by TABC. This certification was made on February 23, 1976, despite continued requests by appellants for a hearing on the tax liability. Suit for such taxes was filed February 9, 1977.

In their first point of error appellants contend the trial court erred by “failing to find that the denial by [the State] of [appellants’] rights to a full and complete administrative hearing violated constitutional due process.” In their brief appellants rely upon and cite cases involving revocation of permits or licenses in which the courts have held that notice and hearing must be afforded before revocation. See, e.g., Industrial Accident Board v. O’Dowd, 157 Tex. 432, 303 S.W.2d 763, 767 (1957); Craft v. Texas Department of Public Safety, 306 S.W.2d 739, 741 (Tex.Civ.App.—Amarillo 1957, no writ); Francisco v. Board of Dental Examiners, 149 S.W.2d 619 (Tex.Civ.App.—Austin 1941, writ ref’d). The case before us does not involve the revocation of a permit or license. The sole issue here is the amount of taxes to be collected from appellants.

TABC granted appellant Big D Bamboo, Inc., a hearing during which TABC’s first audit was considered. Under Tex. Penal Code Aux. Laws art. 666-12, the only sanction the TABC could impose upon appellant after a decision favorable to TABC was to cancel or suspend appellant’s permit. Thus, when appellant voluntarily allowed its permit to expire, a final decision by TABC became unnecessary and useless. The question of cancellation or suspension had become moot. See Texas Alcoholic Beverage Commission v. Carlin, 477 S.W.2d 271 (Tex.1972), and Texas Alcoholic Beverage Commission v. Carter, 476 S.W.2d 864 (Tex.Civ.App.—Fort Worth 1971, writ ref’d n.r.e.).

The sole question presented by appellants’ point is whether they were entitled to an administrative hearing by TABC of their tax liability as a prerequisite to the suit filed by appellee.

The TABC is empowered by art. 666-20d(h) to examine the tax account of appellant and pursuant thereto determine the asserted tax liability or delinquency owed by appellants. Upon its certification of such amount owed, appellee filed this suit under the authority of Tex. Tax.-Gen. Ann. art. 1.04 (1969). When.this tax suit was filed in the district court, appellants could have urged and presented any defense thereto as allowed by law. The fact that they were not given a hearing before the TABC prior to the filing of the tax suit did not deprive appellants of any constitutional rights. Appellants were entitled to a full and complete hearing on their tax liability in the district court. The mere certification by TABC of the amount of taxes owed by appellants was not the irrefutable and absolute tax liability. Appellants had the legal right to contest the validity of such amount of taxes for which suit was filed. Following the TABC’s certification of the amount of taxes asserted to be due, appellants had the legal right to pay such tax under protest and bring suit for a refund under Tex. Tax.-Gen. Arm. art. 1.05 (1969), or they could wait and defend a suit filed by the State under Tex. Tax.-Gen. Ann. art. 1.04 (1969), as was done in this case. In either event they still retained all their rights in so far as defenses are concerned, and they were not deprived of any rights by the fact they were not given a hearing before the TABC with reference to the amount of taxes owed by them. In Francisco v. Board of Dental Examiners, supra at 622, quoting 12 Am. Jur. Constitutional Law § 612 (1938), states the applicable rule as follows:

“The rule that a hearing before judgment or order is not necessary to due process is especially applicable to proceedings before commissioners and boards . . There is no violation of due process if provision is made for a trial de novo before a court of the issues passed upon by such a commission, for a judicial review of the order . . . .”

In the case before us, appellants were sued by the State in what would have been equivalent to a trial de novo in district court, and appellants failed to properly answer the suit and the motion for summary judgment. The opportunity for a judicial hearing and determination in district court satisfies the requirements of due process. See Phillips v. Commissioner of Internal Revenue, 283 U.S. 589, 596-601, 51 S.Ct. 608, 75 L.Ed. 1289 (1931). This point is overruled.

In their second point of error, appellants contend that the Administrative Procedure and Texas Register Act, Tex.Rev.Civ.Stat. Ann. art. 6252-13a(Supp. 1978), requires that the TABC afford them a hearing after reasonable notice. There is no dispute that no other statute grants a right to a hearing in this case. The question is whether the Act itself gives appellant the right. to a hearing before the TABC to contest the amount of the gross receipts taxes the commission determines is owed.

Neither party has cited any Texas cases, and our independent research has not discovered any such cases wherein this question has been decided. We do not construe the provisions of the Administrative Procedure and Texas Register Act (hereinafter referred to as the Act) as requiring a hearing before the TABC in the matter of determining the tax delinquency or deficiency of appellants.

Sec. 3 of the Act provides that:
“(1) ‘Agency’ means any state board, commission . . . having statewide jurisdiction . . . that makes rules or determines contested cases.
“(2) ‘Contested case’ means a proceeding in which the legal rights, duties, or privileges of a party are to be determined by an agency after an opportunity for adjudicative hearing.” (Emphasis supplied)

To determine whether appellants are given the right to a hearing on the question of the amount of taxes due and payable as asserted or claimed by TABC, we must determine the applicability of Sec. 3(1) and Sec. 3(2) of the Act. TABC, in accordance with the provisions of art. 666-20d(h), determined, asserted, or claimed a certain amount of tax was due and payable by appellants. This, in our opinion, does not constitute a contested case. For this proceeding, determination or assertion of a tax deficiency, to constitute a “contested case” within the definition of a contested case as given in Sec. 3(2) of the Act, it must be one in which the legal rights, duties, or privileges are to be determined by an agency after an opportunity for adjudicative hearing. The word “adjudicate” is defined in Black’s Law Dictionary 63 (4th rev.ed. 1968) as “[t]o settle in the exercise of judicial authority. To determine finally. Synonymous with adjudge in its strictest sense. United States v. Irwin, 127 U.S. 125, 8 S.Ct. 1033, 32 L.Ed. 99, and Street v. Benner, 20 Fla. 700.” Accordingly, it appears to us that the hearing required by the Act must be one in which the agency conducting such hearing will, by a final and determinative order, decide the legal rights, duties, or privileges of the appellants, and in the absence of an appeal therefrom will be a final and binding decree with respect to any such legal rights, duties, or privileges.

In the case before us the amount of the tax deficiency of liability asserted by TABC was not a final determinative or binding order or decree with reference to such deficiency or liability. Appellants are not required to appeal any such finding of the TABC. After the certification by TABC to the Attorney General, appellants had the right to proceed under the provisions of Tex. Tax.-Gen. Ann. art. 1.05 (1969) or could refuse to take any action until suit was filed against them under Tex. Tax.-Gen. Ann. art. 1.04 (1969).

If appellants had been given a hearing under the provisions of the Act, they could not have appealed an order of the TABC in this case under the appellate procedures provided by the Act. If they had not proceeded under art. 1.04 they would not have invoked the jurisdiction of the district court. See Robinson v. Bullock, 553 S.W.2d 196 (Tex.Civ.App.—Austin 1977, writ ref’d n.r.e.).

If an order on the tax deficiency of appellants had been entered by TABC such an order would not have been a final adjudication of appellants’ legal rights, duties, or privileges. The only final adjudication of the legal rights, in so far as their tax liability is concerned, could be made only by the district court, after its jurisdiction had been invoked either through proceedings brought under Tex. Tax.-Gen. Ann. art. 1.04 or art. 1.05 (1969).

We therefore hold that a hearing to determine the tax deficiency or delinquency of appellants was not required by the provisions of the Administrative Procedure and Texas Register Act, Tex. Rev. Civ. Stat. Ann. art. 6252-13a (Supp. 1978).

In view of the foregoing appellants’ third point is without merit and is overruled.

The trial court properly granted appel-lee’s motion for summary judgment, and the judgment is affirmed.

AFFIRMED.

DIES, Chief Justice,

dissenting.

With respect, I dissent. In my view, the determination of taxes owed is a “contested case” within the definition of Sec. 3(2) of the Act (quoted in the majority opinion).

The Texas Administration Procedure and Texas Register Act [Tex. Rev. Civ. Stat. Ann. art. 6252-13a (Supp. 1978)] was largely based on the Model State Administrative Procedure Act.

The Texas Act differs from the Model Act in several important provisions. Under the Model Act a contested case means, “A proceeding, including but not restricted to rate making [price fixing], and licensing, in which the legal rights, duties, or privileges of a party are required by law to be determined by an agency after an opportunity for hearing.” (Emphasis supplied) See Tex. L. Rev. article cited in footnote 1.

The Texas Act omits the phrase “required by law” before the words “to be determined.” In making this change, the Legislature’s “intent was to expand ‘contested cases’ beyond those situations in which agencies were required by statute to determine legal rights, duties, or privileges, and to include all instances in which agencies in fact determine legal right, duties, or privileges of parties even though no hearing was required by statute.” McCalla, “The Administrative Procedure and Texas Register Act,” 28 Baylor L. Rev. 445, 448 (1976). See also, Tex. L. Rev. article cited, supra, at 287-288.

There is a very good reason for this legislative change, in this writer’s judgment. It will give the aggrieved taxpayer in our case the opportunity to present his position without first incurring the expense that flows inevitably from a court contest.

      . Effective September 1, 1977, the Texas Liquor Control Act was repealed by the Alcoholic Beverage Code.

      . Hamilton and Jewett, “The Administrative Procedure and Texas Register Act: Contested Cases and Judicial Review,” 54 Tex. L. Rev. 285 (1976).


author: McKAY, Justice.

text:
    Bernard DODD, Appellant, v. TEXAS FARM PRODUCTS, Appellee.
    No. 1147.
    Court of Civil Appeals of Texas, Tyler.
    June 22, 1978.

      Larry R. Daves, Tyler, for appellant.
    William D. Perkins, Lufkin, for appellee.
   McKAY, Justice.

Appellant brought suit against appellee for damages for personal injuries which were received by appellant on the premises of appellee. Trial was before a jury, and after a verdict was returned for appellant the trial court granted appellee’s motion for judgment non obstante veredicto, hence this appeal by appellant.

Appellant alleged that he was injured when a retaining wall and bulk potash collapsed on him after he and a fellow workman had loosened the potash in a bin by blasting in order to move it to another bin, and that appellee was negligent in several respects. Appellee, among other allegations, pled that appellant was injured as a result of his own negligence or that of his fellow employee, or both; that conditions existed in the premises where appellant was employed which were open and obvious to appellant, and that appellant voluntarily assumed any risk involved in the work in which he was engaged. The jury found that appellee, its agents or employees, failed to inspect the retaining wall after the blast, that such failure was negligence, and such negligence was a proximate cause of his injuries; appellant was not found to be contributorily negligent. Damages of $86,-000 were found by the jury.

Previously appellant brought suit against Twin City Fire Insurance Company in a worker’s compensation action based on the same incident. The opinion of this court in that case is reported in 535 S.W.2d 416, and that of the Supreme Court is found in 545 S.W.2d 766.

Lone Star Phosphate Company is a corporation which ships phosphate rock from Florida and acidulates it with sulphuric acid which breaks it down into solvable form so as to make it available for plant food. Texas Farm Products Co. is a sister corporation with common officers and stockholders with Lone Star, and its plant is adjacent to that of Lone Star. Texas Farm Products manufactures and distributes feed and health products for animals. At times there was interchange of personnel between the two plants. Phosphate is a salt-type material, and after it is stored it will “set up hard, such that it’s necessary to shake it loose,” and a lowgrade, slow-burning type explosive is used to loosen the material — such explosive made especially for that specific purpose.

Appellant had previously worked for ap-pellee (approximately 15 years) but at the time of his injury (and for approximately 5 years before) he was an employee of Lone Star. At the time of his injury appellant was asked by his foreman, Jerry McShan, to go to Texas Farm to move potash or sulphate. McShan also took other employees of Lone Star to the Texas Farm premises. Appellant and McShan placed the explosives in a hole drilled in the sulphate and lit the fuse. Appellant testified “. . .it blowed out. It blowed down a few buckets,” and that he was then asked to “go in and move what little was blowed down.” He further testified there was a retaining wall 10 or 12 feet above his head “hanging down” and that the blast “blowed a big belly out of it there. . . and I picked it up, several buckets up and I heard it pop, and I told my boss, I said I wasn’t going back in there no more, so he told me, well, just before he told me that, him and Mr. Clarence walked off and talked and he came back and told me, he asked me ‘if I knock it down, will you pick it up.’ I told him yes, if it didn’t kill him, I don’t guess it’ll kill me.”

Appellant described events that followed: “And he went in and took the dipper and run up between the board and bumped the board and knocked it down and I picked it up and got down to the last bucket, I went down on the floor and raised the rear-end of the tractor up, the motor part, and I was going to drop it to make the dipper slide up, and when I did that, the wall fell down on me and the tractor, and I just turned sideways to get off — trying to get off the tractor, and it fell on this side of me, and had this side pinned to the tractor, and I was laying down there. This leg here was sticking down in there and the steering wheel was buried in this leg here, and they had to use a hacksaw to cut it to get me out of there.” Clarence Riddle was McShan’s superintendent, and was superintendent for both Lone Star and Texas Farm, according to appellant’s testimony.

Appellant also testified that McShan “was nice about it. He asked me nice would I do it; he didn’t try to make me or nothing.” In response to his counsel’s question as to whether he had any choice in terms of whether he “could say no, I’m not going to do it, or anything else,” appellant replied, “Well, not offhand. If I did, I figured I’d be fired.” He further said that when he told McShan he was not going back in there, he told him he thought the angle iron was bent, and they stood and looked at it, and he told McShan, “let’s go back to the phosphate plant and leave it alone and that’s when Mr. Riddle came up and they went out and was talking . . .” In answer to the question whether Riddle looked at the retaining wall appellant said, “I believe Mr. Riddle glanced. I don’t believe he just looked and saw just exactly what was going on,” and that no one warned him that the wall was going to fall. Appellant later testified that he did not think that Riddle even glanced at the bin.

McShan testified that he looked at the retaining wall as he was driving a pay-loader in to load up; that there was nothing wrong with the wall; that at one time he thought he saw it move, but he went on and said, “Well, it must not have moved,” and he kept going. MeShan further testified that appellant did not say anything to him about being afraid the retaining wall might fall.

In his first point appellant complains that the trial court erred in rendering judgment for appellee notwithstanding the verdict because there was evidence to support the jury’s answer to issue two that the failure of appellee to inspect the retaining wall after the blast was negligence. In order to sustain the action of the trial court in granting a motion for judgment non obstante veredicto, there must be a determination that there was no evidence having probative force upon which the jury could have made the finding relied upon. Burt v. Lochausen, 151 Tex. 289, 249 S.W.2d 194 (1952); Leyva v. Pacheco, 163 Tex. 638, 358 S.W.2d 547 (1962). In passing upon such a point the evidence must be considered in a light most favorable to the jury finding, considering only the evidence and inferences which support the verdict and rejecting the evidence and inferences which are contrary thereto. Burt v. Lochausen, supra. A judgment n. o. v. can only be upheld on appeal when a directed verdict would have been proper. Rule 301, T.R.C.P.; Grundmeyer v. McFadin, 537 S.W.2d 764, 768 (Tex.Civ.App.—Tyler 1976, writ ref’d n. r. e.).

The jury in issue 4 failed to find that Clarence Riddle had knowledge that the retaining wall was in need of repair immediately before the accident, and in issue 11 the jury did not find that appellant failed to exercise ordinary care for his own safety.

If the owner or occupant of premises invites others to come upon his premises he owes such persons the duty to have such premises in a reasonably safe condition and to give warning of concealed or latent perils. Carlisle v. J. Weingarten, Inc., 137 Tex. 220, 152 S.W.2d 1073, 1074 (1941). If the injured person was a licensee the duty owed him by the owner or occupier of premises is not to injure him by willful, wanton or gross negligence; but if licensor knows of a dangerous condition, and licensee does not, a duty is owed to either warn the licensee or to make the condition safe. State v. Tennison, 509 S.W.2d 560 (Tex.1974); Lower Neches Valley Authority v. Murphy, 536 S.W.2d 561, 562-3 (Tex.1976). Negligence is the breach of a duty; it is the failure to exercise ordinary care, or the doing of something that a person of ordinary prudence would not have done under similar circumstances or the failure to do something that a person of ordinary prudence would have done under the same or similar circumstances. 40 Tex.Jur.2d, Part 2, p. 117.

If the retaining wall was in a dangerous condition appellee owed a duty to repair it to make it safe. This duty arises, however, when appellee learns of the dangerous condition, or in the exercise of reasonable diligence should have known of it. The record before us does not reflect that appellee knew of the dangerous condition of the retaining wall. In our opinion there is no evidence that appellee knew of such dangerous condition or in the exercise of reasonable diligence should have known of it. The dangerous condition was apparently caused by the explosion set off by appellant and MeShan, his foreman. The record reflects that Riddle was the only employee of appellee in the vicinity of the accident, and there is no evidence in the record that Riddle knew of the danger. Riddle did not testify. There is no evidence the work was under his direct control. If appellee, its servants, agents and employees did not know of the dangerous condition, and such dangerous condition had not existed long enough that a reasonably prudent person would have discovered it, then appellee cannot be charged with or be guilty of negligence.

This was an unfortunate accident under unusual circumstances. However, appellant had the burden of producing evidence of probative force upon which the jury could have found that appellee was negligent. This he has been unable to do. In considering only the evidence and inferences which support the verdict of negligence against appellee, and rejecting the evidence and inferences which are contrary thereto, we hold there is no evidence to support the verdict. In our view a directed verdict would have been proper. Appellant’s point of error one is overruled.

In view of our holding on appellant’s first point of error, we do not reach appellant’s second point of error wherein he contends the trial court erred in granting judgment non obstante veredicto because there was evidence to support the jury’s finding in special issue 11 that appellant did not fail to exercise ordinary care to take proper measures for his safety.

Judgment of the trial court is affirmed.

      . “SPECIAL ISSUE NO. 4
      “Do you find from a preponderance of the evidence that Clarence Riddle had knowledge that the retaining wall was in need of repair, if it was, immediately prior to the occurrence in question?
      “Answer: ‘We Do’ or ‘We Do Not’
      “ANSWER': ‘WE DO NOT’ ”

      . “SPECIAL ISSUE NO. 11
      “Do you find from a preponderance of the evidence that Plaintiff failed to exercise ordinary care to take proper measures for his own safety?
      “Answer: ‘We Do’ or ‘We Do Not’
      “ANSWER: ‘WE DO NOT’ ”


text:
    Curtis HARGIS et al., Appellants, v. MARYLAND AMERICAN GENERAL INSURANCE COMPANY, Appellee.
    No. 5159.
    Court of Civil Appeals of Texas, Eastland.
    June 22, 1978.
    Rehearing Denied July 13, 1978.
    Bob Roberts, Byrd, Davis, Eisenberg & Clark, Austin, E. Barham Bratton, Austin, for appellants.

      Royal H. Brin, Jr., Strasburger & Price, Dallas, for appellee.
   BRADBURY, Justice.

This is an appeal from the granting of a summary judgment favoring Maryland American General Insurance Company against Curtis Hargis, Andrew W. Lucas, and Dallas Hermetic Company, Inc. We affirm.

Hargis and Lucas, as employees of Frym-ire Engineering Company, were injured May 22,1968, when an air conditioning unit on which they were working exploded. About one year previous, the motor in the unit had been rewound by Hermetic. Har-gis and Lucas sued Hermetic and other defendants and subsequently settled with all defendants except Hermetic. Judgments were then recovered for Lucas in the sum of $450,000 and for Hargis, $250,000 against Hermetic. They executed identical covenants not to execute against Hermetic, and in these cases, Maryland, insurance carrier for Hermetic, refused to defend. When the judgments became final, suit was filed by Hermetic, Hargis and Lucas against Maryland to recover the amounts of judgments,, interest and attorney’s fees.

In a summary judgment case, the judgment should be granted and if granted, should be affirmed, if the record establishes a right thereto as a matter of law. Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970).

Maryland’s motion for summary judgment contended that as a matter of law it was not obligated to defend Hermetic because the policy exclusions relating to “completed operations hazard” and “products hazard” were applicable.

Such exceptions are as follows:

(1) Completed Operations
“Completed Operations hazard includes bodily injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured. ‘Operations’ include materials, parts or equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:
(1) when all operations to be performed by or on behalf of the named insured under the contract have been completed;
(2) when all operations to be performed by or on behalf of the named insured at the site of the operation have been completed; or
(3) when the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or sub-contractor engaged in performing operations for a principal as part of the same project. Operations which may require further service or maintenance work, or correction, repair, or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed completed.”
(2) Products Hazard
“Products hazard is defined as follows:
Products hazard includes bodily injury and property damage arising out of the named insured’s products or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs away from premises owned by or rented to the named insured and after physical possession of such products has been relinquishment to others.”

In Travelers Insurance Company v. Chicago Bridge & Iron Company, 442 S.W.2d 888 (Tex.Civ.App.—Houston (1st Dist.) 1969, writ ref. n. r. e.), the court stated: “. . . Words used in an insurance

contract are to be given their plain, ordinary, and generally accepted meaning unless consideration of the instrument itself shows them to have been used in a different sense. Western Reserve Life Ins. Co. v. Meadows, 152 Tex. 559, 261 S.W.2d 554 (1953). The rule of liberal construction in favor of the insured applies only when the contract is ambiguous and susceptible of more than one interpretation. Transport Ins. Co. v. Standard Oil Company of Texas, 161 Tex. 93, 337 S.W.2d 284 (1960). The contract must be enforced as made if the language used is plain and unambiguous. Home Ins. Co., New York v. Rose, 152 Tex. 222, 255 S.W.2d 861 (1953).”

Hermetic had rewound the motor for C-B Air Conditioning Company who picked it up and reinstalled it in the air conditioning unit at the Kona Inn Apartments. About a year later, the unit was giving trouble and someone at Kona Inn Apartments called Prymire Engineering Company and in response to the call, Hargis and Lucas were repairing it when it exploded. Hermetic, Hargis and Lucas argue that the exception in the policy relied on by Maryland is not applicable because Hermetic had not performed what it was to have performed; therefore, there was not a completed operation.

COMPLETED OPERATIONS

Plaintiffs cite Fidelity and Casualty Company of New York v. Horton & Horton Custom Works, Inc., 462 S.W.2d 613 (Tex. Civ.App. — Fort Worth 1971, writ ref. n.r.e.) in support of their contention that the operation was not completed because Hermetic had failed to perform a substantial requirement essential to the intended function of the motor. The facts and the policy provisions in that case are distinguishable from those in the case at bar. Their insurance company contended an exclusionary clause applied, which provided:

“ ‘This policy does not apply: * * * under coverages B and D, to injury to or destruction of * * * property in the care, custody or control of the insured (Horton) * * * as to which the insured for any purpose is exercising physical control, * * * or (to) work completed by or for the named insured, out of which the accident arises.’ (Emphasis supplied).”

“Work completed” was not defined in that case, but is defined in the case at bar. The definition of “completed operations” in the instant case and the lack of such definition in Horton is a distinguishing factor.

■ Other eases cited by plaintiffs are Hardware Mutual Casualty Co. v. Schantz, 186 F.2d 868 (5th Cir., 1951) and Daniel v. New Amsterdam Casualty Company, 221 N.C. 75, 18 S.E.2d 819 (1942). The cited cases are distinguishable from the instant case because there was no definition of “completed operations” or the definition given was substantially different from the definition in the instant case.

The position of Maryland is summed up in Green v. Aetna Insurance Company, 397 F.2d 614 (5th Cir.1968) wherein the leading Texas cases are discussed and exclusionary clauses similar to the ones in this case are construed. The court stated:

“We are Erie [Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188] bound to follow Texas law which on the facts here is not difficult to ascertain. We rely principally upon two Texas cases to support our view. They are Pan American Insurance Company v. Cooper Butane Company, 157 Tex. 102, 300 S.W.2d 651 (1957), and Maryland Casualty Company v. Knorpp, 370 S.W.2d 898 (Tex.Civ.App.1963) (writ ref’d n.r.e.). We rely also on our earlier opinion on the first appearance of this case here. (Footnote 1, supra.) See also, Pan American Insurance Company v. White, no writ history, 321 S.W.2d 337 (Tex.Civ.App.1959).
We first outline the analysis of Cooper as it was articulated by Judge Brown in writing for this court in the earlier appearance here of the case sub judice:
1) Liability under the policy ‘is a matter of contract upon which contract principles apply’.
2) ‘Policy provisions excluding liability for damages occurring after an assured’s activity has ceased are perfectly valid.’
3) The plain meaning of language comparable to that of ‘(2) operations’ (of the policy in suit, supra) ‘excludes occurrences taking place after operations have been completed’.
4) ‘Premises — Operations’ hazard does not encompass ‘damages growing out of failures occurring away from premises owned, rented, or controlled by the assured and happening after operations have been completed * * *.’
5) ‘Operations’ need not be tied to a product which is manufactured, sold, handled or distributed in order to make the ‘completed operations’ section of the Products Liability hazard operative.
While it is true that the Texas Supreme Court in Cooper dealt only with questions of whether ‘operations’ had been ‘completed,’ that court recognized, we think clearly, that if the operations had been ‘abandoned,’ the same result would be reached. It stated:
If the insured had wished coverage for liability for damages growing out of accidents occurring after operations had ‘been completed or abandoned at the place of occurrence thereof and away from premises owned, rented or controlled by the insured’ it should have purchased coverage against hazard No. 4, ‘Products’. It did not do so.
Knorpp, supra, adds strength to our views with respect to what Texas courts have held. The court there held ‘Division 4 — Products—Completed Operations’ has to do with liability after relinquishment for use (370 S.W.2d p. 903). We quote further from that opinion:
Additionally, the separate categories being mutually exclusive, coverage is not afforded under ‘Division 1 — Premises — Operations’ if the basis upon which liability is asserted occurred after operations were relinquished for use because such coverage under the policy is afforded under ‘Division 4— Products — Completed Operations,’ a category not purchased. Had the building not been relinquished for use the accident would not have occurred because storage would not have begun in the building, (p. 904) (Emphasis supplied).
* * * * * *
* * * a careful study of the form and design of the policy reveals that it was written to cover, among others, two particular situations. First, that which arises when an accident occurs while the assured is engaged in the actual work of the business for which he has purchased coverage. Having purchased coverage under ‘Division 1— Premises — Operations’ appellees would have had coverage thereunder for an accident up to the point of relinquishment for use. The second situation is when an accident arises after the assured has completed his work and due to some negligent operation on his part damages are suffered by a third party. If the assured had purchased coverage under ‘Division 4 — Products—Completed Operations’ he would have had protection for such a situation, * * *. (p. 904)
* * * * * *
In this case the building had been relinquished by appellees for use, whether rightfully or wrongfully. The Third Party was using it when it collapsed from what Third Party Plaintiff alleged was original negligent erection of the building. Thus, they would have been covered had they purchased coverage under ‘Division 4,’ but since it had been relinquished for use they did not have coverage under ‘Division 1— Premises — Operations’, (p. 904)
It is certain, as we have said, that the drill collar with which Schafer was injured had been ‘relinquished for use’ at the time of the accident.
On the merits of appellant’s case, we are unable to say that Rotary was.covered with respect to the Schafer injury. On the contrary, we are of the firm view that the undisputed facts here show that such coverage was excluded by the language of the policy. Rotary did not elect to buy the type of coverage to which Schafer may now resort.”
The court also stated:
“Additionally, appellant urges that the language of the policy here involved is ambiguous and, thus, that he is entitled to a favorable construction of its ‘ambiguous’ language. The short answer is that we held, on the first appearance of this case here (Footnote 1, supra), that the Supreme Court of Texas in Cooper, supra, had made policies of this type quite clear. The Supreme Court of Texas in Cooper reversed a court of civil appeals opinion which held a similar policy to be ambiguous, and in Knorpp, supra, the court held that the standard form Comprehensive General Liability policy was not ambiguous, even though it was not prepared with a view of ‘relaxing the mind’. The effect of our holding on prior appeal, when we affirmed that part of the declaratory judgment decreeing that Aetna had no duty to defend, was to hold the policy not to be ambiguous. It would now be absurd, in determining the related duty of paying the judgment, to hold it to be ambiguous. It is also significant that on that prior appeal this court expressly and specifically rejected most of the case authorities cited to this point by appellant. See Footnote 13, Green v. Aetna Insurance Company, 349 F.2d 919, 923 (5 Cir. 1965).”

In a case of similar facts to the case at bar, the court in Casey v. Employers National Insurance Co., 538 S.W.2d 181 (Tex.Civ.App.—Dallas 1976, writ ref. n. r. e.) had occasion to interpret a “completed operations hazard” clause and stated:

“In May 1974, Cress Container Corporation began occupation of the area in which the water pipe was located although the entire building project was only 75% complete. They accepted that area in June 1974. In September 1974, the water pipe broke, resulting in plaintiff’s damage. Since the policy specifically excluded ‘Completed Operations Hazards’ and, since the damaged portion of the building had been put to its intended use by the owner, the damage here is not included within the policy coverage. Cf. Pan American Insurance Co. v. Cooper Butane Co., 157 Tex. 102, 300 S.W.2d 651, 652 (1957).
Plaintiff argues, however, that, even though the damage occurred in a completed part of the building, the exclusionary clause was inapplicable because the entire building was not complete. We cannot agree. This construction of the language of the policy is contrary to the explicit definition of ‘Completed Operations Hazards.’ Under the language in this definition, when that portion of the work was complete, and when the lessee occupied and used the plumbing, the liability coverage under the policy ceased. If plaintiff desired this excluded coverage, it could have obtained it by payment of an additional premium. This it chose not to do.”

The explosion of the unit did not occur on the premises of Hermetic. If the unit was in need of correction, repair or replacement because of any defect or deficiency, there was a completed operation as defined by the policy and the injury having occurred after the unit was physically delivered to C-B Air Conditioning Company, the exclusionary clause as to completed operations was applicable in this case. There was no coverage or liability on the part of Maryland.

Since we find that the exclusionary clause relating to the completed operations is applicable, there is no necessity for us to determine if the products hazard exclusion is applicable.

Plaintiffs argue that res judicata and collateral estoppel resulting from the judgments recovered by Hargis and Lucas against Hermetic prevent Maryland from now litigating its policy defenses.

The question of liability and of coverage are separate and distinct. The prior judgments are not binding on Maryland as to coverage. A brief statement that gives the correct rule is in Farm Bureau Mut. Automobile Ins. Co. v. Hammer, 177 F.2d 793 (4th Cir.1949):

“It is, however, obvious that the binding effect of a judgment against the insured does not extend to matters outside the scope of the insurance contract, and that the Insurance Company is neither obligated to defend nor bound by the findings of the court if the claim against the insured is not covered by the policy. To hold otherwise would be to estop the Insurance Company by the acts of parties in a transaction in which it has no concern and over which it has no control, and to deprive it of its day in court to show that the transaction is foreign to the contract of insurance . . . ”

In National Union Fire Insurance Company v. Bourn, 441 S.W.2d 592 (Tex.Civ.App.—Fort Worth 1969, writ ref. n.r.e.), the question that was decided was whether the policy provided coverage for liability of two named insureds in the light of the policy exclusions. In a prior suit where the insurance carrier was not a party, there were findings that two of the parties involved were guilty of assault and battery upon plaintiff. After the entry of that judgment, plaintiff then filed suit against the defendant’s insurance carrier. The policy involved did not provide coverage for personal injury that was intentionally caused by the insured. The court held that the findings in the prior judgment as to negligence were not binding on the insurance carrier in the suit where the matter of coverage was being litigated.

In the judgments that Hargis and Lucas recovered against Hermetic, the court found that the defendant was negligent in failing to complete rewinding the compressor and guilty of general negligence; that plaintiffs had not assumed any risk; were not guilty of contributory negligence; and, defendant had no affirmative defense. The court also found that there was no fraud or collusion in the entry of the judgments or circumstances surrounding same. There were no findings in the judgments that were necessary to the judgments that are binding on Maryland as to coverage. In Berger v. Kirby, 135 S.W. 1122 (Tex.Civ. App.—1911), aff’d, 153 S.W. 1130 (Tex. 1913), the court stated:

“. . .As admitted by counsel for the appellant, the rule is that ‘the estoppel of a judgment extends only to the points directly involved in the action decided, and not to any matter which was only incidentally cognizable, or which came collaterally in question.’ This is true, even though the matter coming collaterally in question may have been judicially passed on. 23 Cyc. p. 1309. At most, the question as to whether or not the appellant was the wife of the said A. Berger was only incidentally cognizable before the county court, and whatever adjudication there may have been in reference thereto was merely collateral and incidental, and not conclusive.”

See: Employers Mutual Casualty Company v. Lee, 352 S.W.2d 155 (Tex.Civ.App.—Houston 1961, no writ); Adcock v. Schweizer, 190 S.W.2d 705 (Tex.Civ.App.— Dallas 1945), rev’d on other grounds, 145 Tex. 64, 194 S.W .2d 549 (1946).

The prior judgments in favor of Hargis and Lucas were not binding on Maryland in litigating coverage in the instant case.

We have considered all of Hargis’ points of error and they are overruled. Judgment of the trial court is affirmed.