author: WALTER, Justice.

text:
    Victoria MILLS, Appellant, v. Homer MILLS, Jr., Appellee.
    No. 4883.
    Court of Civil Appeals of Texas, Eastland.
    March 11, 1976.

      Brenda Solis, Dallas, for appellant.
    G. C. Harris, Morgan & Crouch, Green-ville, for appellee.
   WALTER, Justice.

On November 6, 1974, the court entered an order dissolving the bonds of matrimony between Homer Mills, Jr. and Victoria Mills and dividing their community property. Audry Mills, the mother of Homer Mills, Jr., was appointed Managing Conservator of the couple’s two children. Homer and Victoria Mills were appointed Possessory Conservators. This order contains the following:

“It is further ORDERED that the Texas Department of Public Welfare shall make an investigation as to said children and their welfare and as to the homes, conditions and circumstances of the Petitioner, the Respondent, and the Intervenor, and shall file its report with this Court upon completion of such investigation within thirty days from the date of this judgment, and a copy of such report shall be by the Clerk of this Court shall make available to each of the attorneys for the Petitioner, the Respondent and the Inter-venor. After receiving such report, this Court will review its order concerning the conservatorships and support of said children.”

The Department’s report was not filed within thirty days as provided for in the order.

On June 2, 1975, the court rendered its final judgment concerning conservatorship. This judgment contains the following:

“The Court further finds that the possession of or access to said minor children by the Respondent, VICTORIA MILLS, is not in the best interest of said children, and that such possession of and access to them would endanger the physical or emotional welfare of said children.
It is, therefore, ORDERED, ADJUDGED and DECREED by the Court that the Respondent, VICTORIA MILLS, be and she is hereby denied possession of or access to said minor children, JACQUELINE ANN MILLS and SAREN SUE MILLS.”

The final judgment appointed Audry Mills Managing Conservator of the children and appointed Homer Mills, Jr. Possessory Conservator.

Victoria Mills (now Victoria Riskey) has appealed. She contends the court lost jurisdiction thirty days after its November 6, 1974, order under Rule 329b(5), T.R.C.P., which is as follows:

“Judgments shall become final after the expiration of thirty (30) days after the date of rendition of judgment or order overruling an original or amended motion for new trial. After the expiration of thirty (30) days from the date the judgment is rendered or motion for new trial overruled, the judgment cannot be set aside except by bill of review for sufficient cause, filed within the time allowed by law . . . ”

In Lone Star Cement Corporation v. Fair, 467 S.W.2d 402 (Tex.1971), the court said:

“The same rules of interpretation apply in construing the meaning of a court order or judgment as in ascertaining the meaning of other written instruments. Permian Oil Co. v. Smith, 129 Tex. 413, 107 S.W.2d 564 (1937).
The entire contents of the instrument and record should be considered. The judgment is to be read as a whole.”

The interlocutory order rendered on November 6, 1974, leaves for future determination the question concerning the conser-vatorship and support of the children.

The June 2, 1975, judgment is the final and appealable judgment relating to the appointment of the Possessory Conservators. We hold the court had jurisdiction to render such judgment.

Appellant’s point the court erred in rendering the June 2, 1975, judgment because it is in violation of Section 11.15 of the Texas Family Code is without merit. Section 11.15 provides, “The court’s findings shall be based on a preponderance of the evidence under rules generally applicable to civil cases.” The appellant has not discharged her burden of showing the judgment is erroneous because no statement of facts has been filed. Before Article 2324 was amended the court reporter was required to perform his duties as set forth in the statute. Since the effective date of the amendment, “Each Official Court Reporter shall upon request:” perform the duties set forth in the statute. This amendment places a greater burden upon the litigants if they desire a record. In Englander Co. v. Kennedy, 428 S.W.2d 806 (Tex.1968) the court said:

“The burden is upon a party appealing from a trial court judgment to show that the judgment is erroneous in order to obtain a reversal. When the complaint is that the evidence is factually or legally insufficient to support vital findings of fact, or that the evidence conclusively refutes vital findings, this burden cannot be discharged in the absence of a complete or an agreed statement of facts.”

Section 11.14(d) of Texas Family Code provides, “A record shall be made as in civil cases generally unless waived by the parties with the consent of the court.”

We have considered all of appellant’s points and they are overruled.

The judgment is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    W. J. SWACKER, Appellant, v. JET CONSTRUCTION AND REALTY COMPANY, INC., et al., Appellees.
    No. 4877.
    Court of Civil Appeals of Texas, Eastland.
    March 11, 1976.
    Rehearing Denied April 1, 1976.

      Tom Thomas, Kolodey & Thomas, Dallas, for appellant.
    Rick J. W. Graham, Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellees.
   WALTER, Justice.

W. J. Swacker entered into a purchase agreement with Jet Construction and Realty Company to purchase a condominium unit for $60,000.00 and made a deposit of $1,500.00 as part of the purchase price. Jet breached the contract and sold the property to another party for $65,000.00.

Swacker recovered a judgment in a non-jury trial for $1,500.00. Swacker has appealed.

Rule 307, T.R.C.P. provides in non-jury cases where findings of fact and conclusions of law are requested and filed any party claiming that the findings of the court do not support the judgment may have noted in the record an exception to said judgment and take an appeal without a statement of facts.

No statement of facts has been filed. Appellant did not except to the judgment or request additional findings..

In Cowling v. Colligan, 158 Tex. 458, 312 S.W.2d 943 (1958), the court said:

“Rule 307, T.R.C.P. does not provide for the filing of exceptions to findings of fact and conclusions of law. It provides that a party claiming that the findings made do not support the judgment may except to the judgment and thereby preserve his right to so contend on appeal . . . ” “ . . .In the absence of a statement of facts we must presume that the other evidence heard supports the finding or conclusion.”

In Ives v. Watson, 521 S.W.2d 930 (Tex. Civ.App. — Beaumont 1975, writ ref. n.r.e.), the court said:

“ . . . We must presume that the evidence supports not only the express findings made by the district court but also any omitted findings which are necessary to support the judgment. Wisdom v. Smith, 146 Tex. 420, 209 S.W.2d 164, 166 (1948); Allied Building Credits, Inc. v. Grogan Bldrs. Sup. Co., 365 S.W.2d 692, 695 (Tex.Civ.App. — Houston 1963, writ ref’d n.r.e.); Burkhart v. Christian, 315 S.W.2d 668, 671 (Tex.Civ.App. — Waco 1958, writ ref’d n.r.e.).”
“ . . . Having no statement of facts, we are precluded from reviewing the evidence; and, since defendant accepted the findings of fact which contained no findings on the question of usury, we must presume that there was no evidence supporting the claim. Not having attacked the failure to find on the usury question, defendant has waived his right to complain. See and compare Dorbandt v. Jones, 492 S.W.2d 601, 605 (Tex.Civ.App. —Austin 1973, writ ref’d n.r.e.). See also, Arlington Bank & Trust Case, supra [Arlington Bank & Trust v. Nowell Motors Inc., Tex.Civ.App., 511 S.W.2d 415] (511 S.W.2d at 416).”

In Englander Co. v. Kennedy, 428 S.W.2d 806 (Tex.1968), the court said:

“The burden is upon a party appealing from a trial court judgment to show that the judgment is erroneous in order to obtain a reversal. When the complaint is that the evidence is factually or legally insufficient to support vital findings of fact, or that the evidence conclusively refutes vital findings, this burden cannot be discharged in the absence of a complete or an agreed statement of facts.”

Swacker contends he is entitled to additional damages including those for the loss of his bargain. In Petroleum Financial Corporation v. Cockburn, 241 F.2d 312 (Fifth Circuit 1957), the court said:

“ . . . And if, as Benton claims, the law were to read into the telegraphic exchange an obligation to have title on January 3, this would result from rigid application of the rule concerning parol evidence and would not turn Cockburn’s actual lack of an existing title into the wilful, purposeful bad faith conduct required by Texas law to subject the defaulting vendor to damages for the purchaser’s loss of his bargain (i. e., profits he would have made). 43-A Tex.Jur., Vendor and Purchaser § 685; Garcia v. Yzaguirre, Tex.Com.App.1919, 213 S.W. 236; see Nelson v. Jenkins, Tex.Civ.App. 1948, 214 S.W .2d 140, error refused; Roberts & Corley v. McFadden, Weiss & Kyle, 1903, 32 Tex.Civ.App. 47, 74 S.W. 105.”

Without a statement of facts we are unable to determine what issues were tried by express or implied consent. Furthermore, there is nothing in the record to show wilful, purposeful bad faith conduct required to subject Jet to damages for Swacker’s loss of his bargain.

Appellant’s point of error is overruled.

The judgment is affirmed.


author: McCLOUD, Chief Justice.

text:
    Amanda Alice SPILLMAN, Appellant, v. CITY OF DALLAS, Appellee.
    No. 4875.
    Court of Civil Appeals of Texas, Eastland.
    March 11, 1976.
    Rehearing Denied April 1, 1976.

      William Andress, Jr., Dallas, for appellant.
    N. Alex Bickley, City Atty., Dallas, for appellee.
   McCLOUD, Chief Justice.

This is a condemnation case. The parties, Amanda Alice Spillman, condemnee, and City of Dallas, condemnor, stipulated the City had the right to condemn, and Spill-man had the right to open and close. The condemned property consisted of approximately 12.84 acres which was to be used for laying out and enlarging the Greenbelt White Rock Creek Parkway. The property is adjacent to White Rock Creek and subject to flooding. Condemnee attempted to show that 9.4 acres could be “filled,” and such reclaimed land used for commercial purposes. The Spillman tract was zoned “FPR75”. Condemnee’s appraisal witness testified that he was of the opinion the “R75” and the “flood plain designation”, or “FP” could be changed and the property rezoned for commercial purposes. The witness was not permitted to give his opinion of the value of the property taken assuming the 9.4 acre tract was filled. The City objected to such testimony because the witness did not restrict the uses to which the property could be put under the “flood plain prefix” and there was no showing that the flood plain prefix would, or could be removed. The condemnee’s appraiser then testified that, considering the tract with no fill, and appraised only as flood land, the value was 11.1 cents per square foot. The appraiser was not permitted to testify as to the value of certain properties which con-demnee contended were comparable. The City’s Flood Plain Zoning Ordinance was never introduced in evidence.

After condemnee rested, the City filed a motion requesting the court to instruct a verdict, or remove the case from the jury, and enter judgment that condemnee recover of and from the City, the sum of $62,274 as the fair market value of the tract in question. The City’s motion asserted that the $62,274 figure constituted the only evidence presented by condemnee, which was before the jury, as to the value of the land. The motion was granted.

Condemnee has appealed. We affirm.

Condemnee did not file a motion for new trial. All points of error relate to exclusion of evidence or matters other than the granting of the instructed verdict.

Rule 324, Texas Rules of Civil Procedure, provides in part:

“In all eases tried in the county or district court, where parties desire to appeal from a judgment of the trial court, a motion for new trial shall be filed as a prerequisite to appeal; provided that neither a motion for new trial nor an assignment therein shall be a prerequisite to the right to complain on appeal of the action of the court in giving a peremptory instruction, or in withdrawing the case from the jury and rendering judgment, or in rendering or refusing to render judgment non ob-stante veredicto or notwithstanding the finding of the jury on one or more special issues, or in overruling a motion for judgment on the verdict made by the party who becomes appellant; . . .”

Where the court, in a jury case, grants an instructed verdict and an appeal is taken without filing a motion for new trial, the appellant is limited on appeal to a complaint that the court erred in granting the instructed verdict.

In Wagner v. Foster, 161 Tex. 333, 341 S.W.2d 887 (1960), the court said:

“The case was tried to a jury, and the first question to be decided is whether respondents-appellants were required by the Rules of Civil Procedure to file a motion for new trial and to preserve the error complained of . . .”
“While trial court action denying a motion for judgment non obstante veredicto would seem, under the literal wording of Rule 324; to eliminate altogether the necessity for filing a motion for new trial as a prerequisite to appeal, except as to the matters designated in Rule 325, it was not so intended and it has not been and should not be so construed . . . The purpose of the quoted provision of Rule 324 as it relates to a party whose motion non obstante veredicto is denied is to authorize appeal on the grounds stated in the motion without the necessity of incorporating the grounds in a motion for new trial. It was not the purpose of that language to eliminate the necessity for complaining in a motion for new trial of other errors committed on the trial. A party whose motion for judgment non obstante veredicto is denied may forego the filing of a motion for new trial and predicate his points of error on appeal on the matters included in such motion. If he follows that course, he may complain on appeal only of the denial of the motion non obstante veredicto . . (emphasis added)

In Goldring v. Goldring, 523 S.W.2d 749 (Tex.Civ.App.-Fort Worth 1975, writ dism’d.), the court withdrew the case from the jury and rendered judgment as a matter of law. Regarding the necessity of a motion for new trial, the court said:

“Appellants in their 17th, 18th and 20th points of error complain of rulings of the trial court in either admitting or excluding evidence.
We overrule all three of those points of error because none of the rulings therein complained of were assigned as error in a motion for new trial. Complaints of the action of a court in ruling on the admission or exclusion of evidence are waived when not based on a specific assignment of error in a motion for new trial. Prewitt v. Liberty Mutual Insurance Company, supra.”

The court in Jamison v. City of Pearland, 489 S.W.2d 636 (Tex.Civ.App.-Houston (1st Dist.) 1972, writ ref. n. r. e.), said:

“Since appellants did not file a motion for new trial, they can only complain that the court erred in rendering judgment notwithstanding the verdict. The points raised in appellants’ brief which are not related to the action of the court in granting the judgment non obstante ve-redicto cannot be considered. Points one, two, seven, eight and eleven complain of procedural matters and clearly are not related to such action of the court . . ”

See also: White v. Aetna Fire Underwriters Insurance Co., 503 S.W.2d 653 (Tex.Civ. App.-Eastland 1973, no writ); Queen Insurance Company of America v. Creacy, 456 S.W.2d 538 (Tex.Civ.App.-San Antonio 1970, no writ); Mitchell v. Porter, 349 S.W.2d 785 (Tex.Civ.App.-Houston 1961, writ ref. n. r. e.); Miller v. Miller, 274 S.W.2d 762 (Tex.Civ.App.-San Antonio 1954, writ ref’d.); Adcock v. Couser, 442 S.W.2d 490 (Tex.Civ.App.-Waco 1969, no writ).

Condemnee’s points of error were not properly perfected in a motion for new trial. They are overruled. Judgment of the trial court is affirmed.


author: PRESLAR, Chief Justice.

text:
    W. L. FULLER, Appellant, v. T. H. NEEL and Henry B. Allen, Jr., Co-Receivers, Appellees.
    No. 6456.
    Court of Civil Appeals of Texas, El Paso.
    March 17, 1976.
    Rehearing Denied April 14, 1976.

      Turpin, Smith & Dyer, Irby L. Dyer, Midland, for appellant.
    L. Holt Magee, Monahans, Bullock & Scott, Maurice R. Bullock, Russell W. Neis-ig, Midland, for appellees.
   OPINION

PRESLAR, Chief Justice.

This suit was brought to cancel a deed given by the trustee of the owners while the property was in a receivership. The Co-Receivers brought suit against the grantee under the deed. Both parties moved for a summary judgment and the trial Court denied the summary judgment of the owner-Defendant, and granted that of the Receivers and declared the deed void.

Questions on appeal involve the validity of a deed given while the property was in a receivership and estoppel by deed.

In 1946, the heirs of Charles E. Nichols brought suit asking that the numerous tracts of land involved in his estate be placed in receivership on the grounds that the property was incapable of division in kind and that it was in need of management. The property was placed in receivership and one O. P. Jensen was named Receiver. In 1948, the same heirs executed a Trust Deed covering the same properties as in the receivership and named O. P. Jensen as Trustee and T. H. Neel as Successor Trustee. This Trust Deed placed “absolute title” in the Trustee, and the Trustee was expressly empowered to sell the property for such sums and upon such terms as to him may seem best. 0. P. Jensen died in 1957; in 1958, his successor, T. H. Neel, sold one-half of the minerals under certain tracts to W. L. Fuller, executing the deed as “Receiver-Trustee” with detailed recitations as to his authority in both capacities. Neel was, at the time, Trustee under the Trust Deed, but he was not a Receiver— there being none at that time. Neel and another were appointed Co-Receivers in 1969 and in 1972 they brought suit to set aside the deed to Fuller contending that it was void because of the pending receivership.

Appellant urges, and Appellee agrees, that a sale and conveyance of interest in land during the pendency of a suit by a party thereto is not void. Rippetoe v. Dwyer, 65 Tex. 703 (1886); Wortham v. Boyd, 66 Tex. 401, 1 S.W. 109 (1886); Mayes v. Rust, 42 Tex.Civ.App. 423, 94 S.W. 110 (1906, writ ref’d); Rosborough v. Cook, 108 Tex. 364, 194 S.W. 131 (1917); Haltom v. McKinley, 64 S.W.2d 1060 (Tex.Civ.App.— Texarkana 1933). No Texas case has been found contrary to this rule. As to receivership, the American law on this question is summarized as follows:

“The general rule is that the appointment of a receiver does not in itself operate to change any title, right, or interest, or to vest any title or estate in the receiver; on the contrary, the title to the property in receivership continues in the defendant, debtor, insolvent, or other person whose property is in receivership, until he is divested of it by a receiver’s sale, or act of his own. * * * ” 65 Am. Jur.2d, Receivers, Sec. 160 at 984.

The effect of a receivership in Texas is summarized as follows:

“A receivership does not destroy vested rights, or determine any right as between the parties. Since a receivership does not vest the receiver with title to the property in his control, it does not preclude the owner from encumbering the property, or contracting with reference to it, subject to the receivership, in any other way.” 49 Tex.Jur.2d, Receivers, Sec. 11.

In Lauraine v. Masterson, a writ ref’d case, it was held that the owners of property in the hands of a receiver could give a lien on it against any interest the owners had left in the property after payment of all prior claims allowed in the receivership. 193 S.W. 708 (Tex.Civ.App. — Galveston 1917, writ ref’d). In the case of United States & Mexican Trust Co. v. Delaware Western Construction Co., 112 S.W. 447 (Tex.Civ.App.1908), it was held that a railroad, while under a receivership, could further encumber its property subject to the priority of the debts for which it was in receivership. In the case before us, the owners of the land executed their deed to the Trustee, Neel; he, in turn, sold the property to the Appellant, Fuller; both deeds were given during the pendency of the receivership. Appellant, Fuller, has intervened in the receivership proceedings and subjected his interest to the outcome of that case. The trial Court erred in holding the deed to Fuller void.

There is a great body of Texas law that protects property in the custody of the court under receivership from interference by process issuing out of another court or foreclosure of prior liens. An early such case is Ellis v. Vernon Ice, Light & Water Co., 86 Tex. 109, 23 S.W. 858 (1893), and the latest such case by our Supreme Court is First Southern Properties, Inc. v. Vice Valione, Receiver, Tex., 533 S.W .2d 339, 19 Tex.Sup.Ct.J. 154 (1976). These lien foreclosure cases, and cases involving interference by one court in the receivership of another, have no application to the case before us. They involve interference in the receivership — and that from an outside source. Our case is a sale by the property owner during a receivership with the sale not interfering with the receivership, but rather subject to it.

Appellees rely on language from the First Southern Properties case and the lien foreclosure case of King Land and Cattle Corporation v. Fikes, 414 S.W.2d 521 (Tex.Civ. App. — Fort Worth 1967, writ ref’d n. r. e.). The First Southern Properties case, supra, was also a lien foreclosure ease. In that case a receiver was appointed for numerous tracts of land owned by a divorcing couple. One tract was under a deed of trust lien, and when the note became past due, the trustee foreclosed and sold the property. The Trustee’s Deed was held to be void because the property was in custodia legis by reason of the receivership. Unfortunately, the Supreme Court in the First Southern Properties, Inc. case, used broad language, as did the King Land and Cattle Corporation case, saying, “No one has the authority, even under a prior deed of trust or execution, to sell property held in custo-dia legis by a duly appointed receiver, unless the sale is authorized by the court in which the receivership is pending.” The Court then cites Ellis, supra, and a host of other foreclosure cases for the proposition. We do not consider this broad language by the Court in the King Land and Cattle Corporation case, or the Supreme Court, as construing the law to be that all sales by anyone other than the receiver are void. In both cases the statement is dicta, for in each case the Court was passing on the matter of interference by a third party in foreclosing a lien. Also, in the First Southern Properties case, the Supreme Court went on to say later in its opinion, “Furthermore, a receivership destroys no prior vested right, nor does it determine any right as between the parties by reason of an existing contract. Ex Parte Britton, 127 Tex. 85, 92 S.W.2d 224 (1936). The enforcement of a third party’s liens or other rights are merely suspended until their enforcement is approved by the court having custody of the property.” We are convinced that had the Supreme Court intended its broad language to overrule the many cases allowing conveyances pendente lite, it would have said so specifically.

For his second point, Appellant, Fuller, asserts that the trial Court erred in holding the December 5, 1958, deed to him void, because he holds title under the 1948 deed from the Nichols heirs to his grantor, Neel, and the Nichols heirs are estopped to deny the title and rights vested in him by such deed. By the 1948 deed, the Nichols heirs placed full title in the Trustee and authorized him to convey the property; he conveyed the property to Appellant, Fuller, received payment in full, and that payment was later distributed through the receivership. Clearly, the Nichols heirs are now estopped to deny the transfer of the title according to the terms of their deed to their Trustee. The following cases on estoppel by deed are in point: Millican v. McNeil, 102 Tex. 189, 114 S.W. 106 (1908); Cope v. Blount, 99 Tex. 431, 90 S.W. 868 (1906); Williams v. Hardie (Courzine’s Heirs), 85 Tex. 499, 22 S.W. 399 (1893); McDaniel v. Cherry, 353 S.W.2d 280 (Tex.Civ.App.— Texarkana 1962, writ ref’d n. r. e.). Clearly, Fuller had title to the property under his deed from the Trustee, Neel.

In his capacity as Trustee, Neel gave a valid deed and there is no basis for the Court declaring it void and of no force and effect. This was not a trespass to try title suit. Appellees, as Receivers, brought this suit to have only one deed declared void— the deed from the Trustee-Neel, to Fuller. There has been no attack made on the deed from the Nichols heirs to their Trustee. That deed remains valid and outstanding. Fuller holds under it. The Nichols heirs have not repudiated it or the power which they placed in their Trustee. We hold that the 1958 deed from Trustee-Neel to Fuller is valid, but subject to the pending receivership, Cause No. 6048, in which Fuller has intervened.

The judgment of the trial Court is reversed and judgment is here rendered that Appellees take nothing by their suit.

OSBORN, J., not sitting.


author: OSBORN, Justice.

text:
    CRYSTAL CITY, Appellant, v. LO-VACA GATHERING COMPANY, Appellee.
    No. 6525.
    Court of Civil Appeals of Texas, El Paso.
    March 17, 1976.
    Rehearing Denied April 14, 1976.

      Rey Perez, Alberto M. Ramon, Crystal City, for appellant.
    Bracewell & Patterson, Joseph Jaworski, J. Clifford Gunter, III, H. Bruce Golden, William T. Hurn, Richard A. Wells, William J. Mays, Houston, for appellee.
   OPINION

OSBORN, Justice.

This is a Declaratory Judgment case in which the Appellee obtained a summary judgment that its obligation to furnish gas to Appellant under a written contract terminated on April 21, 1975. We affirm.

Lo-Vaca Gathering Company, as the as-signee of a gas contract originally made between Texas Gas Utilities Company and the City of Crystal City, began to furnish gas to the city on July 1, 1972. The contract provided:

“Buyer shall pay to Seller monthly for gas purchased 36$ per one thousand (1,000) cubic feet.
“Nothing in this contract shall preclude the right of Buyer and Seller to make temporary adjustments to the price of gas herein set forth in this Article III to meet a special situation or condition, provided that such temporary injustments shall not be made except by mutual written agreement between Buyer and Seller.”

The agreement was for a period of three months and continuing thereafter until can-celled by 30-day written notice on the part of either party.

In response to an application filed by Lo-Vaca, the Texas Railroad Commission on September 27, 1973, issued an Interlocutory Order and established an interim rate for all customers on the Lo-Vaca gas system at 5$ per Mcf of gas, plus the Seller’s weighted average cost of gas. The Order further provided that customers with contract prices for rates below the interim rate would be entitled to reject the interim rate within ten days from the date of the Commission’s Order, and that any failure to file such rejection with the Commission would be tantamount to an agreement and approval thereof.

Crystal City did not file a rejection of the interim rate, but, in fact, paid for the gas at the higher rate until early 1975. In response to a letter in March advising Lo-Vaca that the City of Crystal City had voted not to pay for gas at the interim rates set by the order of the Railroad Commission, the President of Lo-Vaca, on March 21,1975, wrote to the City of Crystal City advising that if the interim rate set by the Railroad Commission was not paid, the gas contract would expire in thirty days.

In order to obtain a judicial determination of its right to discontinue service, Lo-Vaca filed its petition for a Declaratory Judgment on April 22, 1975. Subsequently, it filed a Motion for Summary Judgment which was supported by an affidavit from a senior vice-president of the company, along with exhibits which included the Gas Sales Contract, and Assignment of Gas Sales Contracts, the Railroad Commission Interlocutory Order dated September 24, 1973, and the letter of March 21, 1975. The Appellant filed an answer alleging that Appellee was obligated to furnish gas at the contract price since there had been no mutual written agreement for a temporary adjustment of the price of gas as required by the contract. It further contended that there was no waiver or estoppel of its right to rely upon the contract between the parties. Attached to the answer was an affidavit of the City Manager which stated that no new gas contract had been made by the parties and that the city had, at all times, paid Lo-Vaca for natural gas at the contract price and that the city was not in arrears.

The trial Court granted the Motion for Summary Judgment and declared the rights, status and obligations of the parties as follows:

(1) That Lo-Vaca’s obligation to continue natural gas service to the city expired on April 21, 1975;

(2) Lo-Vaca is obligated to charge and collect the interim rate for gas set by the Railroad Commission;

(3) Crystal City has refused to pay such rate;

(4) Lo-Vaca is entitled to terminate service to the city unless such payment is made;

(5) The city has thirty days to make current its arrears and agree to pay the interim rate for future deliveries.

On this appeal the basic facts are not in dispute. Appellant recognizes that the contract provides for a right of termination by either party, and acknowledges that it did receive the letter giving the 30-day notice. It admits the Railroad Commission entered the Interlocutory Order for the interim rate and that the city did not reject such rate or make a direct attack upon the Commission’s Order. The city does attack the right of Lo-Vaca to raise its price of gas based upon the Railroad Commission Order without a compliance with the terms of the contract which requires written mutual agreement of the parties. By a single point of error, the city contends that trial Court erred in granting summary judgment because of the existence of material issues of fact.

We believe the trial Court’s judgment can be affirmed on two separate grounds. First, the contract itself provides that the agreement “ * * * shall be for a period of three (3) months, commencing at 7:00 A.M. December 1, 1971, and ending at 7:00 A.M. March 1, 1972, and continuing thereafter until cancelled by 30-day written notice on the part of either party.” This clause is absolute and without any condition other than notice. There is no dispute but that both parties were bound by this clause in the contract and the notice required was given. These facts counsel for Appellant readily concedes. The courts of this state have consistently given effect to provisions which give a right or option to either party to terminate a contract. Maddox Motor Co. v. Ford Motor Co., 23 S.W.2d 333 (Tex.Com. App.1930, opinion approved); Dallas County Water Control and Improvement District No. 7 v. Ingram, 395 S.W.2d 834 (Tex.Civ. App. — Dallas 1965, writ ref’d n. r. e.); Kree Institute of Electrolysis, Inc. v. Fageros, 478 S.W.2d 569 (Tex.Civ.App. — Waco 1972, no writ). Thus, we conclude that the contract having been terminated after the 30-day notice, Appellee was relieved of any further obligations to furnish gas to Appellant and the trial Court properly so held.

In addition, we conclude that Lo-Vaca was subject to regulation by orders of the Railroad Commission, and its contract with Appellant was subject to such orders concerning rates for natural gas sold by Appellee, which Appellant could not ignore with impunity. Lo-Vaca, as a public utility, is subject to the provisions of the Cox Act. See Railroad Commission of Texas v. City of Austin, 524 S.W.2d 262 (Tex.1975). Article 6053, § 1, Tex.Rev.Civ.Stat., specifically provides:

“The Commission after due notice shall fix and establish and enforce the adequate and reasonable price of gas and fair and reasonable rates of charges and regulations for transporting, producing, distributing, buying, selling and delivering gas by such pipe lines in this State: * * *77

Further, Article 6054 provides:

“All orders and agreements of any company or corporation, or any person or persons controlling such pipe lines establishing and prescribing prices, rates, rules and regulations and conditions of service, shall be subject to review, revision and regulation by the Commission on hearing after notice is provided for herein to the person, firm, corporation, partnership or joint stock association owning or controlling or operating the gas pipe line affected.”

There can be no question but that rates of service specified in contracts with public utilities are subject to change by the appropriate regulatory commission where the public interest is affected. Union Dry Goods Company v. Georgia Public Service Corporation, 248 U.S. 372, 39 S.Ct. 117, 63 L.Ed. 309 (1919). The rule was applied in State v. Lone Star Gas Co., 86 S.W.2d 484 (Tex.Civ.App. — Austin 1935, writ ref’d) rev’d on other grounds, 304 U.S. 224, 58 S.Ct. 883, 82 L.Ed. 1304 (1938), involving a gas transmission company where the Railroad Commission under the Cox Act reduced the price of gas provided for in contracts. In approving the Commission’s Order, the Court said:

“The contracts of appellee with the distributing companies for the 40-eent gate rate were made in the light of the Constitution and laws, and of the jurisdiction of the commission to regulate such rates. The order changing such rate is therefore not violative of the freedom of contract, or impairment of obligation clauses of either the State or Federal Constitutions (Const. Tex. art. 1, §§ 16, 19; Const. U.S. art. 1, § 10, cl. 1; Amend. 14).”

The Court recognized the right of the Railroad Commission to change the price of gas in High Plains Natural Gas Company v. Railroad Commission of Texas, 467 S.W.2d 532 (Tex.Civ.App. — Austin 1971, writ ref’d n. r. e.), but held that the evidence did not establish that a failure to do so would adversely affect the public interest.

Having concluded that a “public emergency and imperative public necessity” required an interim rate for gas sold by Lo-Vaca, the Railroad Commission had statutory authority to set such rate. Art. 6053, Tex.Rev.Civ.Stat. The Appellant made no direct attack upon that Order entered in September 1973, and may not now make a collateral attack upon it since the Order is not void on its face. Railroad Commission of Texas v. Royal Petroleum Corporation, 93 S.W.2d 761 (Tex.Civ.App. — Amarillo 1936, writ dism’d).

As a public utility, Lo-Vaca was obligated to comply with the Commission Order, and when the City of Crystal City determined not to pay the rates set by the Commission, Appellee had the right and duty to terminate service. Community Natural Gas Co. v. Moss, 55 S.W.2d 224 (Tex.Civ.App.—Eastland 1932, no writ); City of Winchester v. Kentucky Utilities Co., 182 Ky. 144, 206 S.W. 296 (Ct.App., 1918).

The judgment of the trial Court is affirmed.


author: PHILLIPS, Chief Justice.

text:
    JOHNSON CITY INDEPENDENT SCHOOL DISTRICT et al., Appellants, v. Vernon CRIDER et al., Appellees.
    No. 12,396.
    Court of Civil Appeals of Texas, Austin.
    March 17, 1976.
    Rehearing Denied April 28, 1976.

      J. C. Hinsley, Austin, for appellants.
    Donald S. Thomas, Mary Joe Carroll, Clark, Thomas, Winters & Shapiro, Austin, for appellees.
   PHILLIPS, Chief Justice.

This suit was instituted by appellees, against the Trustees, Board of Equalization, and Tax Assessor-Collector of the Johnson City Independent School District, the appellants here, to enjoin appellants from making any attempt to collect school district taxes. Subsequently, a hearing was held on appellees’ request for a temporary injunction, evidence was presented, and the trial court granted a temporary injunction against the appellants enjoining them from making any attempt to require payment of taxes, but authorizing the school district to send out tax notices and receive amounts voluntarily paid. It is from this judgment that appellants have perfected their appeal to this Court. We reverse the judgment of the trial court and herewith render judgment dissolving the temporary injunction.

Appellants are before us on a number of points of error, their leading contention being that these appellees have made no showing of any substantial injury to them by the method in which the tax plan was being administered or applied. We sustain this point.

In granting the appellees the temporary injunction the trial court found that the plan of taxation which the appellants proposed to put into effect is unconstitutional, arbitrary, capricious and unlawful in the following respects: (1) it disregards the requirement in Article VIII, Section 1 of the Texas Constitution that taxation be “equal and uniform,” (2) it deliberately and illegally omits property and categories of property lawfully subject to taxation and, thus, unlawfully attempts to place the burden of taxation on an arbitrarily limited portion of the residents of the school district, (3) it illegally disregards market values of the properties attempted to be assessed for taxation, (4) it is based upon an assumption, shown to be contrary to fact, that all ranch lands in the district were uniformly utilized in the production of livestock and results in the assessment of personal property solely upon the basis of the number of acres of real property owned, (5) it disregards controlling statutory procedures for the assessment and collection of ad valorem taxes, (6) it was designed in such an arbitrary and capricious manner that it was impossible for the Board of Equalization to function properly, (7) it results in grossly excessive valuations of certain properties within the district.

Although the broad findings made by the court could well support its order if based on sufficient evidence, we can find no evidence in this record to sustain the injunction and insufficient evidence on which to sustain the judgment with respect to the illegality of the taxing plan or the method of its enforcement.

The members of the Board of Equalization were called as witnesses, and, after testifying as to their qualifications, and as to the procedures they employed in performing their duties, the minutes of the Board were identified and introduced into evidence. None of these witnesses were questioned by appellees.

The first witness called by appellees testified as to his experiences with the Board of Equalization but did not testify as to what final valuations for tax purposes were placed upon his properties, nor did he compare such valuations with the values placed upon the property of any other taxpayer. No conclusions could be drawn from his testimony that properties belonging to him had not been assessed on a basis that was equal and uniform with other property owners.

The second witness for appellees testified that she had not rendered her property for taxation. She did not testify as to what value was finally assigned her property or what final value was ever fixed on the value of any other property owner in the school district for tax purposes. Thus it becomes impossible to determine whether there had been any failure to tax her on an equal and uniform basis with other property owners in the district.

The tax assessor-collector was then called as a witness, however, he gave no testimony as to the value at which any property had been assessed for taxation.

Appellees insist that the temporary injunction must be upheld to preserve the status quo and that, under the evidence submitted, appellees have shown probable right and probable injury citing Transport Company of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549 (1953), among others. We have no quarrel with the law announced in these cases, however, where a taxpayer seeks to enjoin the collection of a tax because of some illegal feature of the tax plan or the manner in which the plan is applied, he must show how the alleged illegality damages him. He must not only show precisely how he has been damaged but that the damage to him is substantial. Whether tax cases, such as the case at bar, require a stricter proof of probable harm where injunctive relief is sought or whether a different rule applies may be a matter of conjecture, but the rule itself has been consistently applied by the courts of this State as the cases cited later in this opinion will disclose.

As evidence to uphold the court’s judgment, appellees call our attention to the fact that the appointed tax assessor-collector had no previous experience either with tax authorities or with property values; that he secured tax rolls, but not renditions, from Blanco County; appraised ranch land on the basis of his personal estimate of “production value”; on commercial property on “my opinion”; that he testified that some persons rendered money as personal property but that so few of them did “we didn’t attempt to pick up the money”; and that there was no evidence that mineral interests were taxed. Appellees point to evidence of what they contend, was an inequitable assessment of a certain Buta Industries taxpayer. This taxpayer was not a party to the suit nor has he complained of the assessment made of his properties. Ap-pellees also cite evidence which they contend discloses that cattle in the area were taxed on an arbitrary formula invoked by the assessor-collector with no relationship to the actual market value of the cattle.

Appellees’ contentions are best answered by the court in Lubbock Hotel Co. v. Lubbock Independent School District, 85 S.W.2d 776, 778 (Tex.Civ.App.1935, no writ): “Many of defendants’ propositions assert merely that plaintiff adopted an arbitrary and fundamentally wrong system of fixing the values of real estate. It is not alleged in such propositions, nor attempted to be shown in supporting statements, that the effect or operation of such system resulted in any injury to appellants, nor in any discrimination against them. A mere theory may not be litigated. For aught that appears in and under many of defendants’ propositions, the actual working of the allegedly wrong system may have actually resulted in equality and uniformity of taxation. There must be more than the mere adoption of a fundamentally wrong principle or method of taxation. The courts grant relief upon ‘the adoption of a fundamentally wrong principle or method, the application of which substantially injures the complainant’ (Italics ours.) Rowland v. City of Tyler (Tex.Com.App.) 5 S.W.2d 756, 760.”

The only specific assessment complained of as excessive in the case at bar is in connection with the property of one of the owners of Buta Industries who is not a party to this suit. Even so, there is no showing in what manner this assessment, granting for purposes of argument that it was excessive, injures these appellees. See Duffey v. Union Hill Independent School District, 490 S.W.2d 201 (Tex.Civ.App.1973, writ ref’d n. r. e.); Bynum v. Alto Independent School District of Alto, Cherokee County, 521 S.W.2d 656 (Tex.Civ.App.1975, writ ref’d n. r. e.).

It has been held that exact uniformity and equality of taxation is an unattainable ideal. Briscoe Ranches, Inc. v. Eagle Pass Independent School District, 439 S.W.2d 118 (Tex.Civ.App.1969, writ ref’d n. r. e.). This is, undoubtedly, one of the principal reasons for the requirement that a complaining taxpayer must prove substantial damage to himself in spite of proof of a questionable taxing scheme or its enforcement. Lancaster Independent School District v. Pinson, 510 S.W.2d 380 (Tex.Civ. App.1974, writ ref’d n. r. e.).

We cannot agree with appellees’ contention that the extent to which taxpayers are entitled to relief in a suit to enjoin the payment of taxes is dependent primarily upon whether the attack made upon the levy is direct or collateral, the determinative question being whether or not the plan has been “put into effect.” Appellant insists that the phrase “put into effect” has consistently been construed as meaning the final correction of the tax rolls and the beginning of the collection process, citing Milligan v. Corsicana Independent School District, 381 S.W.2d 97 (Tex.Civ.App.1964, writ ref’d n. r. e.). Appellees then contend that since their attack upon the levy was before it had been put into effect, the attack was direct and that under the facts before us a temporary injunction will lie. We agree with appellees that injunctive relief may lie in certain cases where the tax plan has not yet been put into effect. City of Arlington v. Cannon, 153 Tex. 566, 271 S.W.2d 414 (1954). However, for parties in a situation such as theirs to prevail, the law also requires proof of substantial injury. See Duffey, Bynum and Lancaster, cited above, where injunctive relief sought to prevent the collection of the taxes was denied for a failure to show substantial damage on the part of those taxpayers seeking the injunctions. Also see Seguin Independent School District v. Blumberg, 402 S.W.2d 552 (Tex.Civ.App.1966, writ ref’d n. r. e.); Whelan v. State, 155 Tex. 14, 282 S.W.2d 378 (1955); City of Arlington v. Cannon, supra; Montgomery County v. Humble Oil and Refining Co., 245 S.W.2d 326 (Tex.Civ.App.1951, writ ref’d n. r. e.).

We note that the court also found that the taxing procedure disregards controlling statutory requirements for the assessment and collection of ad valorem taxes, and held further that the rule announced by this Court in Nelson v. Blanco Independent School District, 386 S.W.2d 636 (Tex.Civ.App.1965, no writ), justified the granting of the temporary injunction. Nelson v. Blanco Independent School District involved an illegal tax assessment. From a review of the record before us we find that there is insufficient evidence of any illegality of the assessment, or of any of the other statutory requirements alluded to in the judgment. Consequently, at this stage of the proceeding, we will address ourselves solely to the question of injunctive relief, reverse the judgment of the trial court and dissolve the temporary injunction.

Reversed and Temporary Injunction Dissolved.

      . Appellees are: Vernon Crider, Roy Rosa, Juanita Hobbs, R. B. Felps, Glenn Smith, Clark Withers, and A. W. Moursund.

      . General Telephone Company v. City of Wellington, 156 Tex. 238, 294 S.W.2d 385 (1956); Dallas General Drivers, et al. v. Wamix, Inc., of Dallas, 156 Tex. 408, 295 S.W.2d 873 (1956);
        Janus Films, Inc. v. City of Fort Worth, 163 Tex. 616, 358 S.W.2d 589 (1962); Oil Field Haulers Association v. Railroad Commission, 381 S.W.2d 183 (Tex.1964); and State v. Cook United, Inc., 469 S.W.2d 709 (Tex.1971).


text:
    In re I. Y.
    No. 4889.
    Court of Civil Appeals of Texas, Eastland.
    March 18, 1976.

      Eddie D. Gose, Coleman, for appellant.
    Wallace E. Dingus, County Atty., Coleman, for appellee.
   WALTER, Justice.

Jurisdiction over I. Y. was waived by the juvenile court and jurisdiction was transferred to the 35th District Court of Coleman County for criminal proceedings. I. Y. was charged with a felony, if committed by an adult.

The juvenile court rendered a judgment waiving jurisdiction and transferring the defendant for criminal proceedings. I. Y. has appealed.

Appellant contends the State failed to comply with the requirements of Section 54.02 of the Family Code. This section provides the juvenile court may waive jurisdiction and transfer the child for criminal proceedings if:

“(3) • •
(b) The petition and notice requirements of Sections 53.04, 53.05, 53.06, and 53.07 of this code must be satisfied, and the summons must state that the hearing is for the purpose of considering discretionary transfer to criminal court.”

The summons served upon the appellant stated:

“The purpose of the hearing at the above date and time is to consider waiver of jurisdiction and discretionary transfer.”

The words “to criminal court” were omitted.

In R. K. M. v. State, 520 S.W.2d 878 (Tex.Civ.App. — San Antonio 1975, no writ), the court held the omission of the words “to criminal court” in the summons was error. The court said:

“We see no reason not to adhere to the clear and unambiguous provisions of Section 54.02(b). The statute provides that the summons must state that the hearing is for the purpose of considering discretionary transfer to criminal court. The summons here did not do so. We are not inclined to hold that the word “must” as used in the statute means “perhaps,” “maybe,” “sometime,” or “substantially.” It is an easy matter to tract the language of the statute and to do so would not work a hardship on anyone . . . ”

Also see D. L. C. v. State of Texas, 533 S.W.2d 157 (Tex.Civ.App. — Austin, 1976).

The judgment is reversed and the cause is remanded.


author: MOORE, Justice.

text:
    CRYSTAL CITY INDEPENDENT SCHOOL DISTRICT et al., Appellants, v. B. K. JOHNSON et al., Appellees.
    No. 908.
    Court of Civil Appeals of Texas, Tyler.
    March 18, 1976.

      Rey Perez, Crystal City, for appellants.
    Emerson Banack, Jr., Edward Kliewer, III, Foster, Lewis, Langley, Gardner & Ba-nack, San Antonio, for appellees.
   MOORE, Justice.

This suit was instituted by B. K. Johnson; Sun Oil Company, a Delaware Corporation; and Warren Wagner, et al., for themselves and for all others similarly situated against the Crystal City Independent School District, its tax assessor-collector, school trustees, and the members of the Board of Equalization for the school district. The plaintiffs sought an injunction against the collection of a certain portion of the 1974 ad valorem taxes levied against their property. They alleged that the assessment was illegal and void on the ground the Board of Trustees of the school district allegedly increased the assessment ratio from 50% to 60% thereby increasing the assessed value of their property by 20% after the Board of Equalization had met and set the taxable value and finally adjourned. After a trial before the court, sitting without a jury, the trial court entered judgment permanently enjoining defendants from collecting taxes based on the valuations fixed by the Board of Trustees. The judgment recited that the action of the Board of Trustees in increasing the assessed value from 50% to 60% was illegal and void and ordered the tax-collector to accept payment of taxes on the basis of certain values set forth in the judgment. The school district duly perfected this appeal.

We reform and affirm.

The record is before us by way of a stipulation. The material facts are as follows: (1) Appellees are landowners or oil and gas lessees situated within the school district. (2) The Board of School Trustees appointed a Board of Equalization and all appellees whose taxable valuation was increased for the year 1974 by the assessor-collector were given notice to appear before the Board of Equalization on July 10, 1974. (3) All appellees who received notice that the taxable value of their property was to be increased, met with the Board of Equalization on July 10,1974, and reached agreed valuations. (4) The Board of Equalization, after having finished its hearings, finally adjourned on July 10, 1974. (5) On August 19,1974, the Board of Trustees of the school district met at a special budget meeting. At this meeting the trustees passed a resolution increasing the assessment ratio from 50% to 60% of the market value on all property on the tax rolls, thereby increasing the assessed valuation of all property by 20%. The 20% increase in taxable value affected all taxpayers in the school district. (6) None of the appellees received any notice prior to the August 19, 1974, meeting notifying them that the Board of Trustees would consider increasing the assessment ratio and thereby increasing the assessed value of their property, nor did they receive notice that the school board intended to consider raising their taxes. (7) The notices posted of the August 19, 1974, school board meeting recited only that notice was given that the school board would conduct a budget hearing on that date. (8) Thereafter, the tax assessor-collector mailed out tax statements based on the increased assessment and this was the first notice the taxpayers received notifying them of the action of the Board of Trustees increasing the assessment ratio resulting in an increase of the taxable value of their property. (9) After receiving the notice of the increase, some of the taxpayers notified the tax assessor-collector that such increase was invalid and requested that the Board of Equalization be re-convened and that they be given an opportunity to appear and protest the raise. Their request was refused.

By its first point of error the school district contends that since there is no statute regulating the right of school districts to increase the assessment ratio on property lying within the district, the Board of Trustees was clothed with discretionary power to increase the assessment ratio at any time it saw fit, so long as the increase did not exceed 100% of the cash-market value. Therefore, the district contends that the action of the Board of Trustees in increasing the assessed ratio was a valid legislative function of the Board even though it had the effect of increasing the taxable value by 20% above that fixed by the Board of Equalization. We cannot agree with this proposition.

Our statutes contemplate that all property shall be assessed for taxes “at its true and full value,” but as a matter of fact, this is not always done. Article 7174, Tex.Rev.Civ.Stats.Ann.; Robertson v. Connecticut General Life Ins. Co., 140 S.W.2d 936, 941 (Tex.Civ.App. — Waco 1940, no writ) citing Lively v. Missouri K. & T. Ry. Co. of Texas, 102 Tex. 545, 120 S.W. 852 (1909). Frequently a taxing authority will determine in advance that a certain tax rate when levied on a certain percentage of the total market value of all property in the taxing district will be sufficient to produce enough revenue to meet its budget and as a result the taxing authority will set the assessment ratio. The tax assessor-collector then assesses property on the basis of such ratio and such assessment is valid, if uniformly applied. City of El Paso v. Howze, 248 S.W. 99 (Tex.Civ.App. — El Paso 1923, writ ref’d); Robertson v. Connecticut General Life Ins. Co., supra.

The legislature has provided the means to enforce uniform taxation. Articles 7148 and 7161, Tex.Rev.Civ.Stats.Ann., provide for the rendition of taxation by the taxpayer of the value of merchandise and personal property in his hands sometime after January 1 of each year. Article 7193 provides that the assessor of taxes shall assess the property for the taxpayer, if he fails to render it. Article 7212 provides for a Board of Equalization to supervise and equalize the assessment of taxes, and to fix the final valuation. Article 1060 makes the above statutes applicable to school districts. Thus, the Board of Equalization has been established as the final authority in establishing the taxable valuation of property within an independent school district. City of Waco v. Conlee Seed Co., 449 S.W.2d 29 (Tex.1969).

It is now settled that the assessment of property for tax purposes is a quasi-judicial function of boards of equalization and that no attack on the valuation fixed by such boards can or will be sustained in the absence of proof of fraud, want of jurisdiction, illegality, or the adoption of an arbitrary and fundamentally erroneous plan or scheme of valuation. State v. Houser, 138 Tex. 28, 156 S.W.2d 968, 970-971 (1941); State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569, 572-573 (1954); City of Waco v. Conlee Seed Co., supra.

In the case at bar appellees-taxpayers do not attack the valuations fixed by the Board of Equalization. Rather, they seek to sustain the values fixed by the Board of Equalization and to pay their taxes based on such valuations. The attack here is on the legislative order of the Board of School Trustees made on August 19, 1974, increasing the tax assessment ratio on all property, thereby increasing the assessed value of the property by 20% over and above that previously fixed by the Board of Equalization.

We hold that the order of the Board of Trustees of August 19,1974, upon which the assessor acted in increasing the values is invalid. The valuation fixed by the Board of Equalization was a quasi-judicial act and was not subject to increase except by the Board of Equalization after notice and hearing. The valuation of property is a quasi-judicial function of the Board of Equalization of the School District and such function cannot be usurped by the Board of School Trustees acting in its legislative capacity. City of El Paso v. Howze, supra. Therefore, we perceive no error in the action of the trial court in striking down the order of the School Board attempting to raise the taxable valuation of all property in the District.

By its second point appellants contend that the trial court erred in ordering the District to accept taxes based on certain valuations after having declared the plan or scheme of taxation to be void. The portion of the judgment complained of is as follows:

“It is accordingly ORDERED, ADJUDGED and DECREED that the 1974 plan and scheme of taxation of Defendants is fundamentally illegal and void in that the increase by Defendants of the assessed valuation from fifty to sixty percent was done without notice to Plaintiffs.
“It is further ORDERED that the Tax Assessor-Collector of the Crystal City Independent School District shall accept from the Plaintiffs and other taxpayers the following amounts which when paid shall constitute payment in full by Plaintiffs of their 1974 Crystal City Independent School District taxes:
(1) Those Plaintiffs and other taxpayers who rendered their property in 1974 shall pay taxes based on the assessed valuation contained in their sworn renditions.
(2) Those Plaintiffs and other taxpayers who did not render their property in 1974 shall pay as their taxes an amount equal to the amounts tendered in payment of their 1973 taxes.
(3) Those Plaintiffs and other taxpayers who reached agreed assessed valúa-tions with the Board of Equalization shall pay taxes based on such agreed assessed valuations.”

The School District construes the judgment to mean that the trial court found that the plan or scheme of taxation adopted by the Board of Equalization was illegal and void. Based on this premise the District argues that the trial court erred in ordering the District to accept taxes based on values set by the court. It argues that the court should have permitted the District to again bring the matter before the Board of Equalization for re-assessment in accordance with Article 7345, Tex.Rev.Civ.Stats. Ann. The vice in appellants’ argument is that the major premise is without foundation. Contrary to appellants’ contention the trial court did not set aside or hold that the assessments fixed by the Board of Equalization were void. Viewing the judgment as a whole, it is apparent that the vice which the trial court sought to remedy was the action of the School District in increasing the valuations fixed by the Board of Equalization after all tax values had been approved by the Board of Equalization. It was only this increase in valuation, not made by the Board of Equalization, that was set aside. This case does not involve a situation where the court has set aside the assessed valuations approved by the Board of Equalization and the court orders the assessor-collector to accept taxes based on the taxpayers rendition.

In view of the fact that appellees are not complaining of the action of the Board of Equalization, we are of the opinion the assessed values approved by the Board of Equalization became final and were binding on the taxpayers and the School District alike. Republic Ins. Co. v. Highland Park Ind. Sch. Dist., 129 Tex. 55, 102 S.W.2d 184 (1937). The trial court was therefore correct in granting the injunction restraining the attempted increase in valuation and reassessment by the Board of Trustees, and correctly ordered the District to accept tax payments based on values agreed upon by the taxpayer and the Board of Equalization recited in subparagraph (3) above. We have concluded, however, that subpara-graphs (1) and (2) of the foregoing recitation are erroneous and should be deleted. Since appellees do not complain of the values set by the Board of Equalization, the judgment should have ordered the assessor-collector to accept taxes from all taxpayers, except those mentioned in subparagraph (3), based on valuations set by the Board of Equalization as shown on the tax rolls approved by the Board. Republic Ins. Co. v. Highland Park Ind. Sch. Disk, supra. Accordingly, the judgment is so reformed and as reformed affirmed. Rule 454, Texas Rules of Civil Procedure.

Reformed and affirmed.

      . For a discussion of the proper procedure to be followed where assessed valuations set by the Board of Equalization is held to be void, see Sequin Independent School District v. Blum-berg, 402 S.W.2d 552 (Tex.Civ.App. — San Antonio 1966, writ refd n. r. e.).


author: PEDEN, Justice.

text:
    AERO MAYFLOWER TRANSIT CO., INC., Appellant, v. Donald B. YARBROUGH, aka Don Yarbrough, Appellee.
    No. 16653.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    March 18, 1976.

      Lapin, Totz & Mayer, William A. Petersen, Jr., Houston, for appellant.
    George W. Schalles, III, Houston, for ap-pellee.
   PEDEN, Justice.

The plaintiff, Aero Mayflower, appeals from the trial court’s judgment in a suit for collection of shipping charges. The defendant, Donald B. Yarbrough, filed a counterclaim seeking damages for goods lost in transit when he moved from San Bernardi-no, California to Houston in December, 1970. In the main suit Yarbrough agreed to judgment in favor of Aero Mayflower for $2,004.74. After a non-jury trial on the counterclaim, the trial court entered judgment for Aero Mayflower in the net amount of $438.85, after Aero Mayflower was allowed interest and an attorney’s fee and Yarbrough was allowed $2,766 on his counterclaim.

The trial judge made no findings of fact or conclusions of law. Aero Mayflower’s points of error are that the trial court erred in awarding the appellee damages and judgment on his counterclaim because 1) there is insufficient evidence that appellee filed a written proof of claim with appellant for damages; 2) the finding that Yarb-rough filed a written claim is against the great weight of the evidence; 3) there was insufficient evidence of the quantity of lost articles to support the award; 4) the award is against the great weight of the evidence; and 5) there was insufficient evidence as to the value of any lost articles.

Section 6 of the bill of lading used by the parties reads:

“As a condition precedent to recovery, a claim for any loss or damage, injury or delay, must be filed in writing with carrier within nine (9) months after delivery to consignee as shown on face hereof, Where a claim is not filed . in accordance with the foregoing provisions, carrier shall not be liable and such a claim will not be paid.”

Failure to file a written claim as provided by the provision of the bill of lading within the nine months is an absolute bar to recovery by the shipper. Hossley v. Roadway Express, Inc., 419 S.W.2d 396 (Tex.Civ.App.1967, writ ref. n. r. e.). The goods were delivered in Houston on December 12, 1970, so the written claim should have been filed by September 12, 1971.

The claim in writing must be, at the minimum, a written document, however informal in expression, indicating an intention on the shipper’s part to claim reimbursement from the carrier for a loss asserted to have occurred in the past, and sufficiently identifying the shipment in question, either on the face of the document or by reference to previous correspondence between the parties. In other words, the notice, whatever its form, must be something more than a notice that the goods have been lost or damaged; it must contain a claim for compensation or indicate an intent to claim. The claim must enable the carrier to understand, at least in a general way, the amount or approximate amount of the claim or nature of the loss, in order that it may investigate the complaint or prepare to contest it. 14 Am.Jur.2d 106, Carriers, § 585.

The written notice which is to be considered in a practical way is sufficient if a carrier cannot draw any inference from it other than that a claim for damages was contemplated, even if the writing does not contain a formal demand for damages. Delaware L. & W. R. Co. v. United States, 123 F.Supp. 579 (S.D.N.Y.1954).

Yarbrough says he sent letters to the appellant’s offices in Houston and Indianapolis, Indiana, on January 1, 1971, and February 5, 1971, respectively, stating:

“Further, there will have to be adjustment on such items as are missing prior to payment on this account.”

and

“We have also advised your Houston office that payment will not be forthcoming until such time as appropriate adjustments are made for those items lost or misplaced . . . ”

The second letter gave Aero Mayflower’s order number for the shipment and the amount due on it.

Yarbrough also testified that he visited the office of Wald Transfer Co., Aero Mayflower’s agent in Houston, sometime in January of 1971, and made a list of the missing items. The list was on a form provided by Wald and was prepared by an employee of that company. Yarbrough initialed the form but was not given a copy; he was uncertain whether it was a claim form or a memorandum form.

Mr. Yarbrough testified he sent this unsuccessful request for a claim form on June 9, 1971, to John Rybolt, an attorney representing Aero Mayflower:

“This will confirm our telephone conversation of Thursday, June 3,1971, in which I requested that you confirm to me in writing your instructions for presenting my claim for losses and damages sustained by me as a result of the failure on the part of the Mayflower Company to deliver my goods in accordance with its tariff.
“As I explained to you by telephone, I have received the run-around from your company, and its multiple agencies, and if you in fact have authority to speak for the company, then I have called upon you to provide written instructions as to the procedure to be followed.”

Aero Mayflower contends that Yarb-rough did not give sufficient notice, citing Corbamex, S. A. v. Republic Carloading and Distributing Co., 378 S.W.2d 938 (Tex.Civ. App.1964, ref. n. r. e.). In that case letters from the shipper to the freight forwarding company were held not to comply with the written claim requirements of the bill of lading because they did no more than to inform the forwarder that two cases of material had never been delivered and to ask it to put a tracer on the shipment and inform the shipper of the outcome. Aero Mayflower also contends that the letters do not satisfy the requirement of a written claim because they do not specifically notify it that a claim is being made and because there was no specific claim for any specific item.

There being no findings of fact or conclusions of law, we will presume that the trial court’s implied findings support its judgment.

Considering Yarbrough’s letters of January 1, 1971, and February 5, 1971, the inventory or list of lost items he made in January of 1971, and his letter of June 9, 1971, we hold that there was sufficient evidence that Yarbrough complied with the requirement of filing a written claim.

As to Aero Mayflower’s complaints that there was insufficient evidence of the quantity and value of the lost articles to support the award, the only evidence was the testimony of Yarbrough. He related that his best estimate of the value of two missing filing cabinets was $75 each, that he would put a value of $4 on each of the thirty missing towels, of $2 on each of 1200 pieces of sheet music, and of $8 on each of twelve sheets.

Rule 19 of the tariff provides:

“(c) The carrier’s liability shall not exceed the cost of repairing or replacing the property lost or damaged with materials of like kind and quality not exceeding the actual cash value of the property at the time of the loss, with due allowance for depreciation or deterioration howsoever caused but in no event to exceed the released value as determined under Rule 3 . . .”

As compensation for the actual loss of used goods by a carrier, the owner is entitled to recover their value to him.

“Not any fanciful price that he might for special reasons place upon them, nor, on the other hand, the amount for which he could sell them to others but the actual loss in money he would sustain by being deprived of articles so specially adopted to the use of himself and his family.” I. & G. N. R. Co. v. Nicholson, 61 Tex. 550 (1884).

R. E. A. v. Bennett, 350 S.W.2d 214 (Tex. Civ.App.1961, no writ); Rosenfield v. White, 267 S.W.2d 596 (Tex.Civ.App.1954, writ ref. n. r. e.).

We affirm the judgment of the trial court.


author: ROBINSON, Justice.

text:
    J. P. MINTER, Appellant, v. Merle C. JOPLIN and Joe Joplin, Appellees.
    No. 8653.
    Court of Civil Appeals of Texas, Amarillo.
    March 22, 1976.

      Warren Burnett Associated, Richard J. Clarkson, Odessa, for appellant.
    Crenshaw, Dupree & Milam, Cecil Kuhne and J. Orville Smith, Lubbock, Ray D. Anderson, Brownfield, for appellees.
   ROBINSON, Justice.

Plaintiff, J. P. Minter, sued defendants, Joe Joplin and his son, Merle Craig Joplin, to recover damages for injuries sustained by plaintiff in a collision between plaintiff’s automobile and an automobile driven by the son. The son’s negligence and liability and the absence of contributory negligence of the plaintiff were stipulated. The question of the father’s liability for negligent en-trustment of the automobile to his son was tried to a jury. The trial court rendered judgment on the verdict that plaintiff take nothing as to the defendant father. Plaintiff appeals. Affirmed.

The plaintiff asserts that jury findings that the son was not driving the automobile with the permission of the father, and that the father was not the owner of the automobile at the time of the collision were against the overwhelming weight and preponderance of the evidence.

The evidence shows that at the time of the accident the son was 19 years old and an adult. The certificate of title to the car he was driving was in his father’s name, but both father and son testified that the car belonged to the son. The son, Craig Joplin, bought the car when he was 16 years old. The evidence shows that the full purchase price of the car, $3,600, was paid by Craig Joplin. In order to pay for the car, Craig borrowed $1,600 from Lahey Gin, and the balance of $2,000 was paid out of his personal savings account. In this connection, defendant offered into evidence the check for $1,600 from Lahey Gin to Craig Joplin showing the endorsement by McAdoo Chevrolet, and a copy of the ledger sheet showing deposits and withdrawals from Craig’s savings account. The money in Craig’s savings account and that used to repay the loan was money paid to him by his father for work in helping to harvest the father’s cotton crops over a period of several years. The father testified that he carried the car on his fleet insurance, but that his agent knew the car was the son’s. There is testimony that on the occasion of the accident, the father did not know the son was driving the car, but he felt that his son had a right to leave and take the car with him at any time he chose.

The name on the certificate of title is not conclusive of ownership. Evidence of the name in which an automobile is registered raises only “an administrative presumption” of ownership which is not evidence of ownership, and “which vanishes when positive evidence to the contrary is introduced.” Pioneer Mutual Compensation Company v. Diaz, 142 Tex. 184, 177 S.W.2d 202, 204 (1944); Empire Gas & Fuel Co. v. Muegge, 135 Tex. 520, 143 S.W.2d 763 (1940). See also Strickland Transportation Co. v. Ingram, 403 S.W.2d 192, 194 (Tex.Civ. App.—Texarkana 1966, writ dism’d).

After considering all of the evidence, we find that the jury answers refusing to find that the son was driving the car with permission of the father and refusing to find that the father was the owner of the car are not so against the great weight and preponderance of the evidence as to be manifestly unjust.

Plaintiff asserts that the trial court erred reversibly in excluding evidence of the son’s use of marijuana and in excluding evidence of a pipe, used to smoke marijuana, which was found in the car. There was no evidence that the son had been smoking marijuana on the occasion in question. Plaintiff contended at the trial and contends in his brief that the excluded testimony was relevant on the question of the father’s negligence in any entrustment of the car to his son.

Issues inquiring if the son was a reckless and incompetent driver and if, when the father permitted the son to drive, he knew or, by using ordinary care, would have known that the son was a reckless and incompetent driver were submitted to the jury. They were to be answered, however, only if the jury first found that the son was driving the car with the permission of the father. The jury did not so find. It was not required to answer and did not answer those issues. The evidence concerning marijuana was not relevant to the questions concerning whether the father owned the car or whether he gave the son permission to drive it. Those were the only questions, other than the damage issues, answered by the jury. Thus, the error in excluding such evidence, if there was error, could not have resulted in the rendition of an improper verdict. Rule 434, Texas Rules of Civil Procedure.

In a letter memorandum submitted after oral argument, plaintiff, for the first time contends that evidence of a pending criminal charge against Craig Joplin for possession of narcotic paraphernalia should have been admitted on the question of Craig’s credibility as a witness.

In Compton v. Jay, 389 S.W.2d 639 (Tex. 1965), the Supreme Court approved a rule limiting admissibility in civil cases of evidence of both misdemeanor and felony offenses as follows:

The rule is that where the witness has been legally charged by indictment, complaint, or information and complaint, with an offense involving moral turpitude, and has been legally convicted of such offense in a court of competent jurisdiction, or where the witness has been so legally charged with such offense, and presently admits his guilt, then such matters are admissible in evidence touching his credibility as a witness. (Emphasis by the Supreme Court.)

The Court stated that it was not disposed to relax the accepted rule so as to admit evidence which might have a highly prejudicial effect, although it would have little or no logical bearing on the issue of credibility.

Since possession of narcotic paraphernalia is not an offense involving moral turpitude, evidence of such a charge is not admissible under the Compton v. Jay standard. We would overrule plaintiff’s contention that it should have been admitted except that we find no assignment in plaintiff’s amended motion for new trial complaining of the exclusion by the trial court of evidence of a criminal charge. The question, thus, is not before us on appeal. Rule 324, T.R.C.P.

The judgment of the trial court is affirmed.


author: CORNELIUS, Justice.

text:
    Leo M. DAVIS, Appellant, v. The SMALL BUSINESS INVESTMENT COMPANY OF HOUSTON, Appellee.
    No. 8355.
    Court of Civil Appeals of Texas, Texarkana.
    March 23, 1976.
    Rehearing Denied April 20, 1976.

      Wm. Andress, Jr., Andress, Woodgate & Lodewick, Dallas, for appellant.
    Gerald R. Coplin, Passman, Jones, Andrews, Coplin, Holley & Co., Dallas, for appellee.
   CORNELIUS, Justice.

The Small Business Investment Company of Houston (hereinafter referred to as investment company) sought to recover from Computer Forms, Inc. and Leo Davis the principal and interest due by the terms of two promissory notes. The notes, one for $60,000.00 and one for $9,000.00, had been executed by Computer Forms, and were personally guaranteed by Leo Davis. Davis was President and a substantial stockholder of Computer Forms. Davis and Computer Forms filed a counterclaim for damages on the ground that the investment company had breached an agreement to secure additional financing for Computer Forms. At the close of evidence from all parties, the trial court withdrew the case from the jury and rendered judgment for The Small Business Investment Company against Computer Forms and Davis on the notes, and against Computer Forms and Davis on their counterclaim. Only Davis has appealed.

The evidence viewed most favorably to Davis, showed that Computer Forms was a relatively new business which had never earned a profit, but which Davis felt could be salvaged and put into a profitable position if it could secure $100,000.00 financing within a specified time. Davis approached the investment company for the money, telling them the complete story of Computer Forms’ condition and need for the financing. He stated that he needed the money within thirty days. The investment company could only supply $60,000.00 of the necessary financing but agreed to obtain the remaining $40,000.00 from other sources. Although Davis testified, and certain preliminary documents indicated, that the intent was to furnish the additional $40,000.00 within thirty days, the letter of commitment on which the counterclaim was based stated the $40,000.00 would be made available within two months. The investment company did advance an additional $9,000.00 but failed to furnish the $40,-000.00 as agreed. Nevertheless, Davis obtained the additional $40,000.00 within the sixty day period from West Central Capital Corporation through his own efforts. Certain equipment and machinery had been mortgaged to the investment company to secure the notes. Upon default in payment of the notes, the investment company took possession of the collateral and later sold it for the sum of $16,057.82. Judgment was for The Small Business Investment Company for $99,755.00 principal and interest on its notes, together with attorney’s fees and expenses incurred in preserving and storing the collateral. The expenses amounted to $23,060.41. A credit against expenses was allowed for the $16,-057.82 received from the sale, leaving $7,002.59 net expenses. The investment company was awarded judgment for 60% of those expenses. Since West Central Capital Corporation also had a security interest in the collateral to secure its $40,000.00 loan, it assumed 40% of the expenses with the corresponding right of reimbursement from Davis.

Davis contends he was entitled to recover damages for the investment company’s breach of the agreement to secure the additional financing, and that he produced sufficient evidence supporting his counterclaim to take his case to the jury. He also contends that the trial court erred in allowing the investment company to recover expenses for preserving and storing the collateral, since there was no evidence that the amounts expended therefor were reasonable.

There is a recognized cause of action for breach of an agreement to loan money. Annotation, 86 A.L.R. 1408. If, as he alleged and testified, Davis was a party to the agreement or if it was for his benefit, he could maintain such a cause of action in his own right. But upon the breach of such an agreement, the plaintiff is required to avoid or mitigate his damages by securing the money from other sources if it is available. Western Union Tel. Co. v. Hearne, 7 Tex.Civ.App. 67, 26 S.W. 478 (1894, no writ); Annotation, 36 A.L.R. 1416. Damages will be allowed only to the extent of the excess, if any, in the amount of interest the plaintiff was compelled to pay, unless he can show other damages which were reasonably within the contemplation of the parties at the time the agreement was made. Collins Inv. Co. v. Sallas, 260 S.W. 261 (Tex.Civ.App. Texarkana 1924, writ ref’d); Annotation, 36 A.L.R. 1410 et seq. In this case the written commitment for the loan specified that the additional $40,000.00 was to be furnished within two months. Although obtained from a different source and as a result of Davis’ personal efforts, admittedly the money was received within that time, and there was no pleading or evidence of any loss due to excess interest charges. Therefore, neither Computer Forms nor Davis suffered any loss by reason of the investment company’s failure to furnish the money, unless some special damages within the contemplation of the parties resulted therefrom. Davis attempted to show such damages by proof that he was forced to put $35,000.00 of his own money into the business. But the very fact that he was compelled to put his own money into the venture even though the additional $40,000.00 was obtained within the time specified shows there was no causally related loss in that regard. The undisputed evidence showed that his contribution would have been necessary even if the investment company had complied fully with its agreement. Davis also contended that Computer Forms suffered a loss of profits because of the breach of the loan agreement, and because the breach forced him to spend time away from the management of the business “hustling money”. However, the undisputed evidence revealed that when the agreement for financing was negotiated, Computer Forms was in severe economic difficulty and had never operated at a profit. Davis testified the “. . . current difficulty required a hundred thousand dollars in order to satisfy creditors of that moment, plus additional operating capital that would be needed for it to continue as a going business . . . ”. He also testified that Computer Forms “never turned a profit” and “never got out of the red ink”. There was no evidence tending to show that the company could have ever made a profit. There was no evidence of contracts or sales which could have been anticipated, the cost of doing business, or the estimated profits, if any, which could be expected from any sales which might be made. In short, any award of lost profits here would necessarily be based upon pure speculation. Uncertainty as to the amount of damages is not fatal to recovery, but lack of evidence as to the fact of damage will defeat recovery. Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340 (1955). To recover lost profits in a breach of contract case, the plaintiff must adduce evidence from which the jury can reasonably infer that some profit would have been made, as well as evidence from which the jury can reasonably estimate the amount of the loss. Pace Corporation v. Jackson, supra; Southwest Battery Corporation v. Owen, 131 Tex. 423, 115 S.W.2d 1097 (1938); Universal Commodities v. Weed, 449 S.W.2d 106 (Tex.Civ.App. Dallas 1969, writ ref’d n. r. e.); Barbier v. Barry, 345 S.W.2d 557 (Tex.Civ.App. Dallas 1961, no writ); Walter Box Co. v. Blackburn, 157 S.W. 220 (Tex.Civ.App. Austin 1913, no writ); Mutual Film Corporation v. Pastime Theater, 202 S.W. 972 (Tex.Civ.App. Beaumont 1918, no writ); Fraser v. Echo Mining & Smelting Co., 9 Tex.Civ.App. 210, 28 S.W. 714 (Tex.Civ.App.1894, no writ). Upon the record in this case, Davis was not even entitled to nominal damages. Gulf Coast Investment Corporation v. Rothman, 506 S.W.2d 856 (Tex.1974). See also Wafer v. Edwards, 248 S.W.2d 320 (Tex.Civ.App. Fort Worth 1952, no writ). Moreover, if there had been evidence of lost profits, the loss would bear no causal relation to the breach because the money which the investment company agreed to furnish, and on which Computer Forms relied in its attempt to make a profit, was furnished within the time agreed. The trial court correctly rendered judgment against Davis on his counterclaim.

Davis’ liability on the notes was undisputed. Judgment for the principal and interest due under their terms was therefore proper. Davis contends, however, that the court’s action in awarding the investment company its share of expenses incurred in storing, insuring, and preserving the collateral was error because there was a complete lack of evidence that such expenditures were “reasonable”. The common law rule was that expenses for preserving and protecting the collateral could be recovered when proven to be necessary and reasonable. The rule applied even though the mortgage expressly provided for the recovery of all costs and expenses. Haydon v. Newman, 162 S.W.2d 1041 (Tex.Civ.App. Amarillo 1942, no writ). The Texas Business and Commerce Code now provides in Sec. 9.207(b) that:

“Unless otherwise agreed, .

(1) reasonable expenses (including the cost of any insurance and payment of taxes or other charges) incurred in the custody, preservation, use or operation of the collateral are chargeable to the debt- or and are secured by the collateral; ”

The security agreement in this case provided as follows:

“Reimbursement of expenses — at secured parties option, secured party may . for and in behalf of debtor— pay for the repair, maintenance and preservation of collateral, and all sums so expended, including but not limited to attorney’s fees, court costs, agent fees or commissions or any other costs or expenses shall bear interest from the date of payment at the rate of ten per cent per annum and shall be payable at the place designated in the above described note and shall be secured by this security agreement.”

Thus, the investment company contends that its security agreement “otherwise agreed” for the recovery of expenses, and the requirement of reasonableness does not apply.

Although Sec. 9.207(b) of the Tex.Bus. & Comm.Code Ann. states that “unless otherwise agreed”, reasonable expenses may be recovered, it does not appear that the use of those words was intended to authorize the parties to contract for unreasonable or arbitrary charges. A more reasonable construction is that expenses are chargeable unless the parties agree they shall not be chargeable, but in any event, whether authorized by agreement or in the absence of an agreement, the expenses which are allowed may only be such as are “reasonable”. See Gilmore, Security Interests In Personal Property, Vol. II, Sec. 42.5, pp. 1137, 1138; Sec. 42.6, p. 1139; Sec. 42.7, p. 1153. This construction is also suggested by Sec. 9.504 of the same code, which provides that upon sale of the collateral the proceeds shall first be applied to “the reasonable expenses of retaking, holding, preparing for sale, selling and the like”, and then to the satisfaction of the indebtedness. Moreover, we do not believe the security agreement involved here can be construed to have agreed “otherwise” to Sec. 9.207 with regard to reasonable expenses. It simply agreed that the secured party could be reimbursed for expenses incurred in the repair, maintenance, and preservation of the collateral. In the absence of specific language to the contrary, it must be concluded that the parties contracted with reference to the law as set forth in the Tex. Bus. & Comm.Code Ann., and that the allowable expenses would be limited to those which were reasonable. 13 Tex.Jur.2d, Contracts, Sec. 165, p. 353. Indeed, the pleadings of the investment company alleged it was “compelled to incur reasonable expenses”, and sought recovery of them, and the judgment recited that it was entitled to recover its “reasonable and necessary expenses incurred”.

Although the import of the investment company’s evidence was that the items of expense were necessary, there was no attempt to show that the charges therefor were reasonable. Proof that expenditures were necessary does not furnish evidence that the charges therefor were reasonable. Dallas Railway & Terminal Company v. Gossett, 156 Tex. 252, 294 S.W.2d 377 (1956). In the absence of evidence that the charges were reasonable, the court should not have directed a verdict against Davis for those items of expense. Haydon v. Newman, supra.

The trial court correctly allowed Davis a credit in the amount of the investment company’s share of the proceeds received from the sale of the collateral.

The judgment will be reformed to deny The Small Business Investment Company recovery for expenses, and to award it a recovery of $91,151.14 principal and interest (being the balance of principal and interest due on its notes after credit for sale of collateral, calculating interest on the full principal of the notes from dates of execution to January 15,1975 when the collateral was sold, and interest on the balance after such credit, from January 15, 1975 to April 23, 1975) together with attorney’s fees of $9,115.11, the award of principal and interest to bear interest at 10% from April 23, 1975 until paid, and the award of attorney’s fees to bear interest at 6% from April 23, 1975 until paid. As reformed, the judgment is affirmed.