author: KLINGEMAN, Justice.

text:
    CIBOLO CREEK MUNICIPAL AUTHORITY, Appellant, v. CITY OF UNIVERSAL CITY, Texas, Appellee.
    No. 15947.
    Court of Civil Appeals of Texas, San Antonio.
    June 21, 1978.
    Rehearing Denied July 19, 1978.
    Richard W. Harris, San Antonio, John L. Hill, Atty. Gen. of Texas (amicus curiae), David M. Kendall, Jr., Troy C. Webb, Douglas G. Caroom, Asst. Attys. Gen., Austin, Jose M. Uranga, Asst. Atty. Gen., San Antonio, for appellant.

      Tom Joseph, John W. Davidson, Terry Topham, Sawtelle, Goode, Davidson & Troi-lo, San Antonio, for appellee.
   KLINGEMAN, Justice.

Cibolo Creek Municipal Authority (Cibolo Creek) appeals from a judgment of the district court of Bexar County, (a) granting City of Universal City, Texas’ (Universal City) motion for summary judgment and decreeing that an order passed and adopted by Cibolo Creek on September 9, 1975, imposing connection fees is invalid and unenforceable as being in violation of the contract between Universal City and Cibolo Creek, dated March 21, 1973, and (b) denying Cibolo Creek’s motion for summary judgment.

This action was instituted by Universal City against Cibolo Creek seeking a declaratory judgment as to whether Cibolo Creek has the right to charge connection fees to residents of Universal City for connection to the sewage disposal and treatment plant operated by Cibolo Creek, and to determine the validity of the connection fee order promulgated by Cibolo Creek on September 9, 1975, which establishes and assesses the connection fees. The State of Texas, acting by and through the Attorney General, filed a petition in intervention on behalf of the Texas Water Quality Board, supporting the position of Cibolo Creek. Motions for summary judgment were filed by Universal City and by Cibolo Creek. The district court granted the motion for summary judgment of Universal City and denied the motion for summary judgment of Cibolo Creek.

Cibolo Creek asserts three points of error: (1) the trial court erred in holding that Cibolo Creek cannot enforce its retail connection fee order within the boundaries of the City of Universal City; (2) the trial court erred in granting the motion for summary judgment of Universal City; and (3) the trial court erred in denying the motion for summary judgment of Cibolo Creek.

Cibolo Creek is a conservation and reclamation district created under and pursuant to Article XVI § 59, of the Constitution of the State of Texas. The authority was created by special act of the Legislature. Tex.Laws 1971, ch. 347, at 1312, amended Tex.Laws 1977, ch. 44, at 87. Cibolo Creek is a governmental entity and a political subdivision of the State of Texas.

Universal City is a home rule city, having adopted a home rule charter under the provisions of Tex.Const. art. XI, § 5.

This ease presents two basic questions: (1) Does Cibolo Creek have the statutory authority to pass an order imposing a connection fee upon the users of the regional sewage system, even though such users reside in Universal City? (2) Does the contract between Cibolo Creek and Universal City prohibit Cibolo Creek from collecting a connection fee within the corporate limits of Universal City?

In 1967, the Texas Legislature passed the Water Quality Act. This Act is now codified as Subchapter D, Chapter 21, Texas Water Code. This Act includes a legislative mandate and declaration that it was necessary to the health, safety and welfare of the people of the State to encourage and promote the development and use of area-wide waste collection, treatment and disposal systems. The legislative purpose was to designate a certain geographical region as an area for sewage treatment and to designate one particular entity to serve the needs of such region.

By order issued March 15,1972, the Texas Water Quality Board appointed Cibolo Creek Municipal Authority as the entity to serve the Cibolo Creek watershed. Such order provides in part: that a regional system is necessary and desirable to protect the waters of this portion of Cibolo Creek; that Cibolo Creek Municipal Authority make provision for doing all things required to furnish regional sewage service for this area; that Cibolo Creek Municipal Authority should refrain from entering any contractual obligation which would limit its ability to provide regional service; and that Cibolo Creek Municipal Authority shall design and construct and be the operating agency in such area.

The Texas Water Code, Sec. 21.201(a) states:

(a) The legislature finds and declares that it is necessary to the health, safety, and welfare of the people of this state to implement the state policy to encourage and promote the development and use of regional and area-wide waste collection, treatment, and disposal systems to serve the waste disposal needs of the citizens of the state and to prevent pollution and maintain and enhance the quality of the water in the state.

The Act creating the Cibolo Creek Municipal Authority provides in part as follows:

Sec. 5. The district is hereby vested with, and shall have and exercise, all of the rights, powers, privileges, authority and functions conferred by the general laws of this state applicable to a river authority pursuant to Chapter 25, Title 2, Water Code, and to municipal utility districts, including without limitation those conferred by Chapter 54, Title 4, Water Code, but if any provision of such general laws shall be in conflict or inconsistent with the provisions of this Act, the provisions of this Act shall prevail. All such general laws applicable to municipal utility districts not in conflict or inconsistent with the provisions of this Act are hereby adopted and incorporated by reference with the same effect as if copied in full in this Act. Tex.Laws 1971, ch. 347, at 1320-21.

The initial function of Cibolo Creek Municipal Authority was to take over and operate the existing sewage treatment facilities of the Cities of Universal City and Schertz. The Texas Water Quality Board later enlarged the area so as to include the City of Cibolo and other defined areas, and such order also provided that the Authority (Cibolo Creek) shall also provide domestic and municipal waste collection, treatment, and disposal services to any legal entity requiring such services within the defined area.

Cibolo Creek is the local governmental authority designated as the entity to operate and maintain the regional system and as such is authorized to establish and collect such charges and assessments as may be authorized by the Texas Water Code. Sec. 21.356, Texas Water Code, specifically authorizes water districts and authorities to establish certain charges and assessments for disposal of waste, and specifically authorizes these districts and authorities to establish and assess connection charges by providing in part as follows: “The charges and assessments may include user charges, connection fees, or any other methods of obtaining revenue from the disposal system available to the local government.”

The connection fee authorized by the connection fee order passed and adopted by the Authority is a charge made directly to the residents of Cibolo Creek Municipal Authority and is not a charge imposed upon the City of Universal City. Cibolo Creek Municipal Authority is a governmental entity with defined boundaries, a portion of which overlaps the corporate boundaries of City of Universal City. The Authority can make a valid charge to residents of the Authority without conflicting with the governmental powers of the city. The fact that residents of the Authority may also be residents of the city does not change the nature of the charge and make it a charge imposed upon the city.

The trial court, in the judgment here under attack, decreed that the order passed by Cibolo Creek imposing connection fees is invalid and unenforceable as being in violation of the contract between Universal City and Cibolo Creek. We disagree with the court’s holding for a number of reasons: (1) The contract does not prohibit the Authority from charging a connection fee; (2) The Texas Water Code specifically authorizes regional authorities to charge connection fees, and this right cannot be denied by implication; (3) The order of the Texas Water Quality Board designating Cibolo Creek Municipal Authority as the regional entity, prohibits the Authority from permitting a covenant or restriction to be placed in any of its contracts which would inhibit the Authority from providing service throughout the region; and (4) A political subdivision of the State cannot contract away its governmental powers in the absence of specific statutory authorization.

The contract between Cibolo Creek and Universal City is an intergovernmental-agreement, authorized under the Texas Water Code, whereby Cibolo Creek would take over and operate the sewage plant then owned by Universal City. One of the purposes of such contract was to provide protection for the holders of outstanding bonds of the city, and to insure that such bonds would be paid. Another purpose was to provide adequate funds so that Cibolo Creek, the designated Authority, could operate and maintain the regional sewage system as provided in the Texas Water Code. The contract provides certain types of payments to be made by the City. However, there was no attempt made in the contract to limit the Authority from making charges for connection fees or other rates and charges authorized by statute. The contract does not contemplate that all of the rights and responsibilities of the Authority or the city will be governed by this contract. The contract does not mention connection fees. Such charges are neither authorized nor prohibited by the contract. Ci-bolo Creek has not and cannot contract away its governmental powers to assess connection fees, if such are necessary to provide regional sewage treatment.

The operation and maintenance of a sewage system is a governmental function. Gotcher v. City of Farmersville, 137 Tex. 12, 151 S.W.2d 565 (1941); Fidelity Land & Trust Co. v. City of West University Place, 496 S.W.2d 116 (Tex.Civ.App. — [14th Dist.] Houston 1973, writ ref’d, n. r. e.); Pontarelli Trust v. City of McAllen, 465 S.W.2d 804 (Tex.Civ.App. — Corpus Christi 1971, no writ); Steele v. City of El Paso, 417 S.W.2d 923 (Tex.Civ.App. — El Paso 1967, writ ref’d, n. r. e.).

A municipal entity cannot by contract or otherwise surrender its governmental or legislative functions, nor can it legally enter into any contract which will embarrass or control its legislative powers and duties, or which amounts to an abdication of its governmental function or of its police power. Bowers v. City of Taylor, 16 S.W.2d 520 (Tex.Comm’n App.1929, holding approved); Fidelity Land & Trust Co. v. City of West University Place, supra; City of Farmers Branch v. Hawnco, Inc., 435 S.W.2d 288 (Tex.Civ.App. — Dallas 1968, writ ref’d, n. r. e.).

Cibolo Creek relies heavily on Clear Lake City Water Authority v. Clear Lake Utilities Company, 549 S.W.2d 385 (Tex.1977). The Supreme Court, after discussing the contract between the parties, held that the Authority, being a governmental entity, could not by contract or otherwise bind itself in such a way as to restrict its free exercise of governmental powers, stating:

Authority is a conservation and reclamation district created pursuant to Article 8280-280, Tex.Rev.Civ.Stat.Ann. (Cum.Supp.1965) as authorized by Art. XVI, § 59 of the Texas Constitution. As such, it constitutes a political subdivision of the State and operates as a governmental agency performing governmental functions, [citations omitted]. Among the powers expressly granted Authority under § 7 of Article 8280-280 is the power to ‘purchase and construct or otherwise acquire and accomplish by any and all practical means, waterworks systems [and] sanitary sewer systems and to operate and maintain same, and to sell water or other services, and to fix rates therefor . . . .’ * * Authority could not, by contract or otherwise, bind itself in such a way as to restrict its free exercise of these governmental powers, nor could it abdicate its governmental functions, even for a ‘reasonable time.’

Universal City relies heavily on Lower Colorado River Authority v. City of San Marcos, 523 S.W.2d 641 (Tex.1975). In this case, the City of San Marcos, a home rule city, had granted a franchise to Texas Power and Light Company, a private utility, for furnishing of electricity. The operation of this electrical distribution system was later taken over by Lower Colorado River Authority, a conservation and reclamation district. The city sought a declaratory judgment that it had the power to regulate L.C.R.A. charges for the sale of electricity within the boundary of the city. The Supreme Court agreed with the city’s contention, and after discussing the Act creating the L.C.R.A. held that the grant of authority to L.C.R.A. to fix and determine its own rates for charges of electricity, in no way limited the power of the city to regulate rates of utilities within its boundaries.

The factual situation in the San Marcos case, and in the case before us, is vastly different. The City of San Marcos does not lie within the boundary of the L.C.R.A. Moreover, L.C.R.A. has merely acquired the rights of a private utility company to operate within the city of San Marcos pursuant to a franchise. As such, it was acting in a proprietory function and was fulfilling a right it had acquired — the right to sell power — under a franchise. In so doing, it was not fulfilling a mandate of the Legislature. In the case before us, Cibolo Creek has been designated by the Water Quality Board as the sole permittee to treat sewage within certain designated areas. It is not operating pursuant to a franchise agreement with the City of Universal City. Cibolo Creek is fulfilling a specific governmental obligation placed upon it by the Texas Legislature and the Texas Water Quality Board.

In conclusion, the operation of a sanitary sewage system by a municipal corporation is a governmental function. Cibolo Creek is the entity charged by the Texas Legislature with the burden of operating and maintaining a regional sewage system in certain designated areas including the area of Universal City. The Texas Water Quality Act and the Act creating Cibolo Creek Municipal Authority grants such Authority various governmental rights and creates certain governmental duties. Such rights include the right and power to make charges and assessments to users of the sewage facility, which charges may include user charges, collection fees, or other methods of obtaining revenue. The contract between Universal City and Cibolo Creek does not prohibit the charging and collection of connection fees, and even if it did attempt to so do, such limitation would be void, as a municipal corporation cannot by contract surrender its governmental or legislative functions.

We have concluded that the trial court erred in holding that the order adopted by Cibolo Creek imposing connection fees here involved, is invalid and unenforceable as being in violation of the contract between Cibolo Creek and Universal City.

The judgment of the trial court is reversed and judgment here rendered (a) overruling Universal City’s motion for summary judgment and denying all relief sought by Universal City; and (b) granting Cibolo Creek’s motion for summary judgment and decreeing that the order adopted by Cibolo Creek imposing connection fees is a valid and enforceable order.

      . The judgment severed and redocketed a cause of action for a mandamus filed by Cibolo Creek.

      . Texas Water Quality Board is now known as the Texas Department of Water Resources.


source: Caselaw Access Project

author: DUNAGAN, Chief Justice.

license: Public Domain

text:
    Julius L. BELL et al., Appellants, v. J. R. STROOPE, Appellee.
    No. 1143.
    Court of Civil Appeals of Texas, Tyler.
    June 22, 1978.

      Clyde Elliott, Jr., Elliott & Bass, Canton, for appellants.
    Ian Alexander, Jr., Emory, Harold F. Curtis, Jr., Greenville, for appellee.
   DUNAGAN, Chief Justice.

This suit was commenced in February 1972 by appellee, J. R. Stroope, against Ross Dean Childers, to determine whether a roadway between land owned by Stroope and Childers was a public roadway. In 1974 Childers sold a portion of the land in question to appellants, Julius L. Bell and wife, Joyce Bell, and Esther Pearl Bell. Prior to the sale by Childers to Bell the trial court had issued a temporary injunction against Childers restraining him from locking gates or otherwise interfering with Stroope’s use of the roadway until a final hearing could be had upon the merits. After Childers sold a portion of the property to Bell, Stroope, plaintiff below, substituted parties by dismissing Childers out of the lawsuit and substituting Bell in his place.

The appellants’ first four points of error all deal with the complaint that there was no evidence or insufficient evidence to show an implied dedication of the roadway.

The appellants’ fifth point of error states that the trial court erred in admitting into evidence the temporary injunction previously entered by the trial court because such order was prejudicial, invaded the province of the jury and was a comment upon the weight of the evidence. The appellants contend that this was error because such court order contained findings of fact that the roadway was in fact a public roadway. The appellants also contend that this prejudices the jury, invaded its province and amounted to a comment upon the weight of the evidence. The appellee responds that the court order was offered in response to testimony by the appellants showing the conditions that existed at the time the appellants bought the land in question from Childers. This testimony by the appellants showed that there was a lock on the gate, thereby preventing anybody from traveling over the road. The appellee states that the order of the court was introduced for the limited purpose of rebutting the testimony by the appellants showing what the conditions surrounding the locking of the gate were at that particular time. The appellee contends that the appellants’ testimony concerning the locked gate at the time he purchased the land invited the introduction by the appellee of the temporary injunction order of the trial court prohibiting such action.

Appellee offered into evidence the temporary injunction order “for the limited purpose of establishing the records in Rains County, Texas, as existed on April 24, 1972 . .” The trial court’s findings, in question, contained in the temporary injunction order, being a part of the order, were therefore not excluded. The entire order was admitted into evidence over appellants’ objection that said findings in the temporary injunction order was the very issue to be decided by the jury in the matter then being heard; therefore it was prejudicial, amounted to a comment upon the weight of the evidence and invades the province of the jury.

The appellants complain of the admission into evidence of the temporary injunction order which contained a finding of fact by the trial court that the roadway in question was in fact a public roadway. It is the law of this State that the fact of the rendition of a judgment in a cause is admissible but the facts upon which the judgment was based cannot be properly admitted. Davis v. Zapata Petroleum Corporation, 351 S.W.2d 916, 922 (Tex.Civ.App. — El Paso 1961, writ ref’d n. r. e.). Appellants-defendants timely objected to the admission of the previous order of April 21, 1972, granting a temporary injunction containing the trial court’s finding that the public road, here in question, was “duly dedicated for the use and benefit of the public . . ” and properly preserved the point on appeal.

We think that part of the temporary injunction restraining Royce Dean Childers, immediate predecessor in title to appellants, “from obstructing or blocking roadway during pendency of this” suit, was admissible to show its existence and legal consequences. We do not think the findings of fact by the trial court, included within the temporary injunction order, here complain of, that the roadway in question “is a public road duly dedicated for the use and benefit of the public . . . . ” was admissible. We think it was error to admit this temporary injunction order containing the finding of fact that the roadway was a public roadway. The admission of this judgment was improperly prejudicial and invaded the province of the jury. Davis v. Zapata Petroleum Corporation, supra; Allen v. Great Liberty Life Insurance Co., 522 S.W.2d 247, 250-251 (Tex.Civ.App. — Eastland 1975, writ ref’d n. r. e.); Adams v. State Board of Insurance, 319 S.W.2d 750, 754 (Tex.Civ.App. — Houston 1958, writ ref’d n. r. e.).

The appellants also complain of the admission into evidence of a letter from the appellee’s attorney to the appellants stating the fact findings that the trial court made in the temporary injunction order. The basis of this point of error is the same as the point about the admission into evidence of the temporary injunction order.

A letter from the appellee’s attorney to the appellants was also admitted into evidence. This letter contained statements by the appellee’s attorney that the trial court had entered a temporary injunction ordering that the locks be removed from the gates and that the court had found as a matter of fact that the roadway in question was a public roadway. Appellants permitted the letter to be offered and admitted into evidence without objection. Appellee’s attorney immediately began reading the letter to the jury, at which time the appellants made in substance the same objection they previously made to the offer of the temporary injunction order. The objection was overruled. Appellee contends that appellants, by permitting the letter to be admitted without objection, had waived any objection they might have to the admission of the letter exhibit. It is apparent that the judgment discussed above and the letter from the appellee’s attorney contained somewhat similar information. However, in our opinion the letter in question does not constitute evidence of the same weight as the facts found by the trial court in the temporary injunction previously mentioned. The letter itself contains hearsay statements by the appellee’s attorney and these hearsay statements are not nearly so credible and believable when presented to a jury as the findings of fact by the trial court contained in the temporary injunction order itself. Therefore, the appellants’ failure to properly preserve error regarding the admission of this letter does not render his preservation of error regarding the admission of the temporary injunction a nullity. A statement otherwise objectionable as hearsay does not become competent because it has been reduced to writing or in form of a letter. Allen v. Riedel, 425 S.W.2d 665, 667 (Tex.Civ.App. — Eastland 1968, n. w. h.); Deramus v. Thornton, 160 Tex. 494, 333 S.W.2d 824, 831 (1960); Maryland Casualty Company v. Davis, 181 S.W.2d 107, 109 (Tex.Civ.App. — Galveston 1944, n. w. h.); 24 Tex.Jur.2d Evidence, sec. 562. Such incompetent hearsay evidence cannot form basis of a finding of fact or of judgment of a court, even if admitted without objection. Robinson v. Risinger, 548 S.W.2d 762, 767 (Tex.Civ.App. — Tyler 1977, writ ref’d n. r. e.); M.L.C. Loan Corporation v. P.K. Foods, Inc., 541 S.W.2d 902 (Tex.Civ.App. — Beaumont 1976, n. w. h.); Olivier v. Life & Casualty Insurance Company of Tennessee, 440 S.W.2d 398, 400 (Tex.Civ.App. — Beaumont 1969, writ ref’d n. r. e.); State of Texas v. Wilson, 439 S.W.2d 134, 139 (Tex.Civ.App. — Tyler 1969, n. w. h.); Covault v. Texas Instruments, Inc., 531 S.W.2d 441, 444 (Tex.Civ.App. — Tyler 1975, n. w. h.); Gulf State Pipe Line Company, Inc. v. Orange County Water Control & Improvement District No. 1, 526 S.W.2d 724, 727 (Tex.Civ.App. — Beaumont 1975, writ ref’d n. r. e.); Landry v. State of Texas, 504 S.W.2d 580, 586 (Tex.Civ.App. — Beaumont 1973, writ ref’d n. r. e.); Strickland Transportation Company, Inc. v. Navajo Freight Lines, Inc., 387 S.W.2d 720, 729-30 (Tex.Civ.App. — Dallas 1964, n. w. h.); Texas Co. v. Lee, 138 Tex. 167, 157 S.W.2d 628, 631 (1941); Henry v. Phillips, 105 Tex. 459, 151 S.W. 533, 537-38 (1912). We feel that the admission of that portion of the temporary injunction order containing a finding of fact that the roadway was a public road was calculated to influence the jury in rendering a verdict favorable to appellee and this error has not been made harmless by the admission into evidence of a letter from the appellee’s attorney. Floyd v. Fidelity Union Casualty, 39 S.W.2d 1091 (Tex.Comm.App.1931); Bain Peanut Company of Texas v. Pinson, 294 S.W. 536 (Tex.Comm.App.1927).

The view hereinbefore expressed renders unnecessary a discussion of the other points presented.

Judgment is reversed and cause remanded to the trial court for further proceedings.


author: HUGHES, Justice.

text:
    Angelo STERGIOS et al., Appellants, v. Phyllis BABCOCK, Appellee.
    No. 17996.
    Court of Civil Appeals of Texas, Fort Worth.
    June 22, 1978.
    Rehearing Denied July 20, 1978.
    Diamond J. Pantaze, Dallas, for appellants.
    Stockard & Stockard and Joseph E. Stockard, Denton (no brief filed), Coleman, Whitlock & Baldridge and Royce Coleman, Jr., Denton (no brief filed), for appellee.
   OPINION

HUGHES, Justice.

Angelo Stergios, Basil Stergios, Andrew Kastanos and Thero D. Pantaze, plaintiffs below, have appealed a judgment rendered on their suit for damages against Phyllis Babcock. Appellants’ suit alleged breach of provisions in a vendor’s lien promissory note. Trial was to a jury, which awarded appellants $24,860.80. On its own motion, the trial court rendered judgment for appellants for only $12,738.40 (representing 1976 interest payment and back taxes paid into registry of the court) and allowed ap-pellee, Phyllis Babcock, to retain an interest payment of $12,122.40 (late 1975 interest payment) made by appellants.

Appellee did not file a brief.

We reverse and render in part and affirm in part.

Appellants contracted to buy a 53.49 acre tract of land from appellee and her (since divorced but now deceased) husband. She acquired the note in the divorce settlement. Total consideration for the land was $209,-179.95 broken down as follows: $1,500.00 down, $34,502.74 at closing, vendor’s lien promissory note (secured by deed of trust) $173,177.21. The note provided for six annual, interest only, payments of $12,122.40.

The note had a clause which recited: “In the event of any default hereunder or under the Deed of Trust securing this Note, the Holder of said Note shall not be entitled to a personal judgment against the Maker hereof or his successors or assigns, it being expressly understood that there exists no personal liability hereunder, and that the sole and only remedies of the Holder of said Note in the event of default shall be the property, subject to such Vendor’s and Deed of Trust Lien for satisfaction of this Note.” (Emphasis added.)

The deed of trust and the warranty deed had similar clauses.

Herewith is a chronology of pertinent happenings:

May 15, 1975-Appellants defaulted on interest payment.
May 16, 1975 - Appellee accelerated maturity of note, without notice given before maturity.
June 6, 1975 - Appellee had “Notice of Trustee’s Sale” posted, scheduled for July 1,1975.
After receiving such notice, appellants paid the $12,122.40 interest payment by check.
June 23,1975 - Appellee cashed the check.
July 1, 1975 - Appellee had the property sold at trustee’s sale and bought it herself for $35,000.00.

Our concern in this appeal is whether the trial court erred in disregarding the jury verdict in not awarding the appellants the $12,122.40 representing their late $12,122.40 1975 interest check and interest therefor from July 1,1975 to date of judgment (July 18, 1977).

It is appellants’ contention that appellee had two options when she got the check: Either (1) accept the check and cancel maturity acceleration of note and the trustee’s sale or (2) return the check and proceed with the trustee’s sale.

Parties to a contract may agree upon remedies for breach thereof and that the agreed remedy is exclusive. O’Neal v. Bush & Tillar, 108 Tex. 246, 173 S.W. 869 (1915); Doyle v. Second Master-Bilt Homes, Inc., 453 S.W.2d 226 (Tex.Civ.App. — Fort Worth 1970, writ ref’d n. r. e.). The parties here contracted for an exclusive breach remedy in the note, vendor’s lien and deed of trust here involved. How can one interpret “no personal liability” and “sole and only remedies . . . shall by the property?” Obviously it means the one exclusive remedy of foreclosure on the property and nothing else, not even a late $12,122.40 interest check which happened to come into the holder’s hands. We hold that appellee was bound by her election to foreclose and thereby barred from also retaining the check. We sustain the first point of error.

Trial court having denied appellants’ demands for return of the proceeds of the check also, in effect, denied them interest on the money withheld from them by appellee. We hold that appellants are entitled to such interest from appellee and sustain the second point of error. Compensation for detention of that which is due is an element of damages necessary to complete indemnity of the injured party. Watkins v. Junker, 90 Tex. 584, 40 S.W. 11 (1897); Black Lake Pipe Line Co. v. Union Const. Co., 538 S.W.2d 80 (Tex.1976).

Having sustained all of appellants’ points of error, we reverse the judgment of the trial court as to its having decreed appel-lee’s retention of the $12,122.40 check and render judgment that appellants recover, in addition to that previously adjudged to them, from appellee the sum of $12,122.40, plus interest thereon at 6% per annum from July 1,1975 to July 18,1977 and at the rate of 9% per annum thereafter until paid. Judgment of the trial court is otherwise in all respects affirmed.


author: KEITH, Justice.

text:
    Barnett W. GARRISON, Appellant, v. Candace Mossler GARRISON, Appellee.
    No. 8100.
    Court of Civil Appeals of Texas, Beaumont.
    June 22, 1978.
    Rehearing Denied July 13, 1978.
    Ben H. Sehleider, Jr., Houston, for appellant.
    H. N. Lackshin, C. L. Wallace, Houston, for appellee.
   KEITH, Justice.

This is an appeal from an order which purported to grant a divorce while reserving the determination of the property rights to a later date. Before a decision on the property rights of the parties, the petitioner, Candace Mossier Garrison, died and the trial court overruled the motion of the defendant husband, our appellant, to dismiss or abate the proceedings. Our decision has been foreordained by two decisions of the First Court of Civil Appeals in Houston: Garrison v. Mead, 553 S.W.2d 25 (Tex.Civ. App. — Houston [1st Dist.] 1977, original proceedings), and Garrison v. Texas Commerce Bank, 560 S.W.2d 451 (Tex.Civ.App. —Houston [1st Dist.] 1977, writ ref’d n. r. e.).

We are in full agreement with the statement of the facts, the authorities cited, and the holding in each of the cases, and we adopt this language from Chief Justice Coleman’s able opinion in the second case:

“The death of Mrs. Candace Mossier Garrison prior to the division of the community property of the parties rendered the cause moot and no final judgment of divorce could thereafter be rendered.”

For the reasons set out in the cited case, we hold that the trial court erred in refusing to dismiss or abate the divorce proceedings and further erred in attempting to render a final judgment of divorce after the decedent had died.

We turn now to matters which were not addressed in the earlier opinions but which are presented in this appeal: the appointment of a master in chancery in connection with the partition of the community property and the assessment of the costs incident thereto in the purported decree granting the divorce.

The trial court, upon its own motion and over the objections of the appellant, appointed a master in chancery and directed that he “receive evidence and to report upon the characteristics of the property owned by the parties to the marriage and to recommend an equitable division of the estate of the parties to the Court.” Appellant’s objections were voluminous, explicit, and raised the constitutional question that the reference amounted to a denial of his right to a trial by jury after he had complied with the rules governing such a trial. Nevertheless, the master held extensive hearings, as evidenced by the court’s approval of his claim for 350 hours at the rate of $100 per hour ($35,000), plus $1,782.00 in expenses in addition to court reporter’s fees of $18,099.25. The order approving the aggregate claim of $54,881.25 was taxed against Petitioner, “Candace Mossier, formerly Candace Mossier Garrison, and Respondent, Barnett Wade Garrison,” jointly and severally. We note that this order was entered on June 8, 1977, after the master had reported that Mrs. Garrison had died on October 26, 1976.

Although the parties have asserted in oral argument that the deceased possessed a large separate estate, there is no record showing of the nature, extent, or composition of the separate or community estate of the parties. Notwithstanding a charge of more than fifty thousand dollars, we have no record proof of the nature of the estate.

Under these circumstances, we adopt and follow the rationale of the decision in Bell v. Bell, 540 S.W.2d 432, 437 (Tex.Civ.App. — Houston [1st Dist.] 1976, no writ), wherein Justice Peden discussed Tex. R.Civ.P. 171, and the cases arising under such rule. We adopt this opinion as one correctly enunciating the law applicable to this case, noting that there is no record showing that this is an exceptional case. We hold that litigants are entitled to a trial by jury when demanded (and it was timely and properly demanded in this case) and this right may not be denied by shunting the case to a master. It was suggested on oral argument that to try this case to a jury would impose an intolerable burden of congestion upon an already congested court docket. Assuming the truth of the representation, with a complete absence of proof, we find no merit to the contention. Court congestion does not in itself constitute or make this an exceptional case nor does it authorize the denial of a right to have a jury determine the disputed fact issues.

Under the circumstances shown by this unsatisfactory record, we find that the trial court erred in appointing the master in chancery over the objections of the appellant/husband. Having erred in the original appointment, it follows that we are of the opinion that the trial court erred in assessing any part of the costs thereof against appellant.

The order of the trial court signed on December 3, 1975, and recorded in Volume 1299 at page 281, et seq., of the minutes of said court, purporting to dissolve the bonds of matrimony between Candace Mossier Garrison and the appellant, restoring her former name of Candace Mossier, and retaining “jurisdiction of the property rights of the parties until the entry of a final decree of divorce in this cause,” is reversed, and the cause is dismissed because it is moot. See Garrison v. Texas Commerce Bank, supra, 560 S.W.2d at 457.

The order of the trial court signed on June 8, 1977, and recorded in Volume 1430 at page 683, et seq., is hereby set aside and held for naught. As stated in Parr v. White, 543 S.W.2d 445, 448 (Tex.Civ.App.— Corpus Christi 1976, writ ref’d n. r. e.):

“Upon Jody Martin Parr’s death, the 229th District Court [the divorce tribunal] could no longer promulgate new orders or enforce existing orders concerning the property of Jody Parr. Her property vested immediately in her heirs at law and/or her beneficiaries under her will. Upon the opening of probate, the probate court acquired full and exclusive jurisdiction over Jody Martin Parr’s property.”

Texas Commerce Bank, the appellee in the probate proceeding noted earlier (560 S.W.2d 451), filed a brief as amicus in this cause urging substantially the same arguments which had been denied in Chief Justice Coleman’s opinion. We know, consequently, that the probate court has acquired jurisdiction of the property of Mrs. Garrison, and, presumably, that belonging to the community estate of the parties. Parr v. White, supra. In any event, the trial court did not have jurisdiction to enter the order of June 8, 1977, ordering the payment of the master’s fees and expenses.

The judgment of the trial court is reversed and all orders entered subsequent to the date of Mrs. Garrison’s death (October 26,1976) are set aside and held for naught; the cause is dismissed as moot. All costs of appeal are assessed against the estate of Mrs. Garrison.

      . Appellant cited, inter alia, Tex.Const, art. I, § 15; Tex. Family Code Ann. § 3.61 (Supp. 1978); Ex parte Scott, 133 Tex. 1, 123 S.W.2d 306, 313 (1939); Blancas v. Blancas, 495 S.W.2d 597, 601 (Tex.Civ.App. — Texarkana 1973, no writ).

      . The master’s hearing was still in progress at the time of petitioner’s death and in his final report dated May 10, 1977, it was stated “the Master makes no recommendation to the Court on the property issues involved in the marriage.”

      .Although we have what is denominated a “statement of facts,” an examination reveals that it is a compendium of excerpts apparently taken at random during the proceedings, including excerpts from testimony, colloquies of counsel, bills of exception, etc. We do not find it helpful in disposing of the questions remaining in the case.


author: REYNOLDS, Justice.

text:
    ORDWAY-SAUNDERS COMPANY, Appellant, v. Dawson LITTLE, Appellee.
    No. 8891.
    Court of Civil Appeals of Texas, Amarillo.
    June 26, 1978.
    Rehearing Denied July 24, 1978.

      Gibson, Ochsner, Adkins, Harlan & Han-kins, S. Tom Morris, Amarillo, for appellant.
    Carson Smith & Associates, Amarillo, Miller, Gann & Perdue, Ralph K. Miller and Jim M. Perdue, Houston, for appellee.
   REYNOLDS, Justice.

After Dawson Little withdrew as a partner from Ordway-Saunders Company and accepted payment computed under the partnership agreement for his partnership interest, he brought this action to recover additional sums for his share of partnership assets not included in the computation. Judgment was rendered decreeing his recovery of stipulated sums and the jury-found sum which were not included in the computation. We hold that the partnership agreement precluded the surcharges. Reversed and rendered.

Ordway-Saunders Company is, and for many years has been, a partnership engaged in the general insurance and mortgage banking business in Amarillo. From time to time, the partnership has been composed of different partners.

Dawson Little was employed by the partnership in 1959 as a solicitor. On 1 January 1960, he became a partner with the purchase of two separate interests aggregating a seven and one-half (7.5%) per cent interest in the partnership. By a later purchase and contributions connected with changes in the partnership status and personnel, his partnership interest became fixed at seventeen and nineteen one hundredths (17.19%) per cent.

To record a more complete understanding of the partnership, the partners executed an agreement on 15 May 1965. Among its provisions were expressions that “[t]he books of the partnership shall be kept on the accrual method of accounting,” that “[t]he assets and liabilities of the partnership and the capital accounts of the partners are shown on the books of the partnership and made a part hereof for all purposes,” and that “[f]ull and accurate accounts of all transactions of the partnership shall be kept in proper books of account.” Provided for also were the other active partners’ purchases of the interests of active partners who elected to become consulting partners, who died or who were voted early retirement.

Thereafter, amendments to the basic agreement were made with each change of partnership personnel. On 30 June 1974, there' was executed by the partners the seventh amendment which, together with the 15 May 1965 basic agreement, constitutes the entire partnership agreement giving rise to this litigation. Paragraph 5 of the seventh amendment, which was incorporated after Little asked that there be added another alternative by which the partners could voluntarily withdraw, reads, in part:

5. An active Partner may voluntarily withdraw from the Partnership by giving written notice thereof to the other active Partners. Upon withdrawing, all the withdrawing Partner’s interest in the assets, records, business and all other property of the Partnership shall become the property of the Partnership composed of those persons who are Partners other than the withdrawing Partner, and the withdrawing Partner shall receive therefor either
(a) If the withdrawing Partner has been an active Partner of Ordway-Saun-ders Company for a period of at least three (3) years and enters into an agreement not to compete in the insurance and mortgage loan business with the Ordway-Saunders Company Partnership or any of the members of Ordway-Saunders Company Partnership . . . the withdrawing Partner shall receive for a period of thirty-six (36) months after electing to withdraw fifty percent (50%) of the share of the profits he was receiving immediately prior to his election, and fifty percent (50%) of the salary being drawn by each Partner during the thirty-six (36) month period. These amounts shall be paid by the Partnership to the withdrawing Partner out of the income of the Partnership. In addition, the other active Partners shall pay the withdrawing Partner fifty percent (50%) of his capital account at the time of his election to withdraw and the balance remaining in his capital account at the end of the thirty-six (36) month period,
OR
(b) If the withdrawing Partner does not enter into an agreement not to compete or he has not been a Partner of the Ordway-Saunders Company Partnership for a period of at least three (3) years prior to his election to withdraw, the Partnership shall pay the withdrawing Partner an amount equal to, and the withdrawing Partner shall sell and the remaining active Partners shall purchase for cash for an amount equal to the retiring Partner’s capital account at the time of his election to withdraw. In addition to the above, the Partnership shall pay out of the Partnership income an amount equal to one-third (⅛) of the amount of profits and losses which said Partner drew during the immediately preceding thirty-six (36) month period, and one-third (½) of the Partnership salary which he received during the immediately preceding thirty-six (36) month period. These payments will be made in twelve (12) equal monthly installments with the first installment being payable thirty (30) days after withdrawal and a like installment to be made on the same day of each month thereafter until the twelve (12) monthly payments have been made.

A letter dated 11 February 1975, signed by Little and addressed to the other partners contains this language:

I, an active partner of the Ordway-Saunders Company, a partnership, hereby give you written notice of my withdrawal under Part 5 of Amendment Number Seven to the Ordway-Saunders Company, a Partnership, Agreement dated June 30, 1974.
I have been an active partner for a period in excess of three (3) years but do not wish to enter into an agreement not to compete in the insurance and mortgage loan business with the Ordway-Saunders Company, a partnership, or any of the members of Ordway-Saunders Company. My withdrawal date shall be the 1st day of March, 1975.
I realize that I have assigned all amounts due me upon withdrawal from the partnership to the Amarillo National Bank, Amarillo, Texas, as security for its loan to me. I agree that all checks in payment of the amounts due me shall be payable to J. Dawson Little and Amarillo National Bank, Amarillo, Texas, and delivered to the Amarillo National Bank.

Little was furnished a calculation made from the partnership’s books of the amount of his capital account and the total amount of payment he would be entitled to under paragraph 5(b) of the amended partnership agreement. It was later stipulated, without prejudice to Little’s contention that assets were omitted in computing his capital account, that the figures of $30,758.04, as the amount of Little’s capital account, and $78,061.58, as one-third of Little’s net income and salary for the thirty-six months prior to the date of his withdrawal, were accurately taken from the partnership’s books and calculated in accordance with the formula set forth in paragraph 5(b). After consulting with his attorney and an accountant, Little was paid and he accepted the total sum of $108,819.62 in the scheduled periodic payments.

After receipt of the $108,819.62, Little began this action on 21 May 1976. As material to the appeal, he declared on the partnership agreement, alleging that the amounts due him thereunder were not adequately determined and distributed to him in that (1) the fair market value of some realty owned by the partnership was not utilized, (2) the retained earnings of a corporation wholly owned by the partnership were not credited, and (3) the good will attached to the partnership was disregarded in determining his capital. His action is to surcharge the agreement for his share of these assets.

The partnership defended. For its main defense, the partnership interposed the integrity of the partnership agreement under which, the partnership answered, Little was paid the full contractual consideration for his partnership interest.

Neither party pleaded any fraud, accident or mistake in formulating the agreement or any ambiguity in its terms. No party pleaded that the court should seek an intent not clearly expressed in the partnership agreement. Hence, the pleadings place the parties in these diverse positions: Little contends that, although the figures furnished and the amounts paid to him were correct according to the partnership’s books, his capital account did not reflect, and he was not paid, his full share of the partnership assets pursuant to the partnership agreement; the partnership contends that the partnership agreement states the formula for payment based on book values that contractually are not subject to adjustment for settlement, and' that Little was paid the full amount under the agreement.

During the jury trial it was, and it here is, undisputed that the realty, consisting of lots in the Oakdale Addition of Amarillo, and the stock in the corporation, the O&S Corporation, always were carried on the partnership’s books and included in the partners’ capital accounts at cost. Any net profits of the corporation were distributed to the partnership at the end of each year. No adjustments were made on the books for fluctuations in the market value of either the realty or the corporation stock. It is stipulated that if Little is entitled to an adjustment based on the market value of the realty and on the retained earnings of the corporation at the date of his withdrawal, his interest therein would be $5,037.09 and $4,067.24, respectively.

Further undisputed is that no value for good will ever was entered on the partnership’s books or brought into the partners’ capital accounts. No payment for good will was ever made by incoming or to outgoing partners during the existence of the partnership. During the time Little was an active partner, one of the founding partners elected to become a consulting partner, one partner died, one partner withdrew, and three new partners were admitted, and no payments or adjustments were made for good will.

Although Little acknowledged that he had free access to the books and on a regular basis was furnished a computer printout of a balance sheet and operating statement, he said that he did not know how the books were kept and no accounting ever was made to him. He stated that before he accepted any payments, he questioned the figures, but that he did not know about the omission of the market value, retained earnings and good will until the partnership’s books were audited by his accountant during August through October of 1975. However, the following was elicited on Little’s cross-examination:

Q. You have been paid the amount of your capital account as set forth on this schedule?
A. Right.
Q. And you have been paid your share of the earnings averaged on the three-year basis as set forth on this document?
A. According to those figures, yes.
Q. And you were paid all of those items after you had consulted counsel and after you had consulted your own accountant, were you not?
A. Yes.
******
Q. Now, after you consulted a lawyer and accountant, you knew that the market value of the Oakdale Lots was not included in the accounting that was submitted to you, didn’t you?
A. Yes.
Q. You knew that only the cost of those lots was included?
A. That’s right.
Q. You knew that the retained earnings in O&S Corporation had not been brought into the Ordway-Saunders Company balance sheet, did you not?
A. I assumed that they hadn’t. These figures didn’t .
Q. I’m saying after you had consulted your lawyer and after you had consulted your accountant, you knew that, didn’t you?
A. Yes.
Q. Okay. And you knew that the good will of Ordway-Saunders Company had not been computed as an item or no value had been placed on that for purposes of determining the amount that you were to be paid?
A. That’s right.
Q. You knew that. Now, with knowledge of all those things, you continued to receive the monthly payments as provided for under Paragraph 5-B of Amendment No. 7?
A. Yeah, I was forced to.
Q. You continued to do that and collected them each and every month for 12 months until the entire amount was paid to you?
A. I was forced to, yes.
Q. Well, I’m not asking you that.
A. Well, that’s the answer to it.
MR. MORRIS: I move that be stricken, Your Honor.
THE COURT: Yes.
******
Q. Did you continue" to receive those payments until the full amount was paid?
A. I received them, yes.
Q. And you did that after you had knowledge that these factors you’re complaining about had not been included?
A. Yes.
Q. All right. Your answer is “yes”?
A. Now, restate the question, please.
Q. I say you did that,' you received those payments after you had knowledge that each of these four things you’re complaining about had not been included in the amount of money to be paid to you?
A. Yes, sir.

Little explained that by being forced to receive the payments he thought it was the honorable thing to do so that his bank note would be paid off to keep the guarantors from having to pay it, although it was shown that his guarantors had been released and, in lieu, there was an assignment of Little’s partnership income ,to the bank.

Mike Turner, an Amarillo certified public accountant, made a limited review of the partnership’s records at Little’s request to determine the validity of the procedures used in arriving at the amount of money Little was paid. It was his opinion that the books were not kept as provided in the partnership agreement. The deficiencies he noted were that: the earnings of the corporation had never been reflected in the partnership’s books which, under generally accepted accounting principles, would increase the partners’ capital accounts; and there was an immaterial accounting error in reporting that some of the real estate lots were owned by the corporation rather than by the partnership, which would have made an immaterial difference in the amount of dollars, but should have been included in the partners’ capital accounts. He felt that there existed good will, which had never been carried as an asset of the business, had never been taken into account in computing the capital account of any of the partners, and had not been reflected in Little’s capital account at the time of his withdrawal.

Raymond J. Clay, a professor of accounting at Texas Tech University and a certified public accountant who has examined accounting records to determine the existence of good will in different businesses, gave testimony bearing on the existence and value of good will in the partnership. Asked to define good will, Clay responded that it “concerns an entity’s ability to earn an above average rate of return, above average being more than what other businesses within the same industry would earn.”

Good will, according to Clay, is a “going concern concept,” an asset which, under generally accepted accounting principles, is not recorded in the records at any time prior to the change in ownership or sale of the business entity unless a particular amount of money is attributed to it when a going concern is purchased. It was his opinion that the admission of good will into the records at the time a partner withdraws would be in accordance with generally accepted accounting principles and the partnership agreement provision that the books be kept on an accrual method of accounting. He opined that good will would have to be recorded for a fair and equitable accounting for an equitable settlement to be made for a departing partner; however, he assented to the statement that whether good will should be shown as a capital item depends upon the agreement between the partners.

It was Clay’s opinion that the Ordway-Saunders Company partnership does possess good will. To arrive at his opinion of the value of the good will, he considered the partnership’s average annual income of $867,945.50 for the three years 1972-74 and applied a formula of one and a half times that annual average to arrive at a value of $1,301,918.20. The formula applied was taken from the guidelines published by National Underwriters, Inc., a service bureau, which, in Clay’s words, “indicate that the value of an insurance business is somewhere between one and three times the average annual commissions of that business, the rule of thumb being one and a half times the average annual income or commissions.” Specifically, Clay testified that:

One and a half times that annual average would give us a value of $1,301,918.20 as the valuation of this particular entity.
Now, this is a conservative approach based on the National Underwriters survey. But that would be equivalent to the value of Ordway-Saunders if we were selling it at one and a half times the average annual commissions.
******
Oh, there’s no question that getting into such things as the public patronage, the fact that this particular company enjoys a contract, an exclusive right with a national organization — and I believe it’s the Hartford Company — would give us an indication that perhaps even more than one and a half times may be justifiable in this case.

Admitted over the partnership’s objection of lack of materiality and relevance was a copy of the agreement for the 1971 sale of Ordway-Saunders Company of Dallas, a separate partnership composed of the Ord-way-Saunders Company partners. Listed among the assets sold for which no monetary value was individually assigned was the good will of the partnership.

Its motion for an instructed verdict being denied, the partnership presented among its witnesses Douglas N. Perkins, a certified public accountant who is an associate of the accounting firm responsible for the accounting aspects of the partnership’s business. He confirmed that good will has never been carried on the books and that no adjustment has ever been made in the capital accounts because of good will consideration when there was a change of partners. He testified that the only time good will is treated as an asset under generally accepted accounting principles is when a purchaser and a seller agree to assign a certain value to it.

Perkins explained that the accrual basis of accounting would be an accrual of accounts receivable and an accrual of accounts payable. The generally accepted basis for reporting a physical asset, according to him, is to enter its cost on the books; to write it up to reflect something other than cost — e. g., an appraisal — is not a basis for, and would be contrary to, generally accepted accounting principles.

Overruling the partnership’s motion for an instructed verdict, the trial court, over the partnership’s objections to its charge, submitted special issues to the jury. The jury, finding that the partnership did have a good will value over and above the value of its tangible assets on February 28, 1975, fixed that value at $2,603,836.50. Parenthetically, it is observed that this $2,603,-836.50 value is three times the partnership’s average annual income of $867,945.50 for the three years 1972-74. The jury further found that when Little accepted the total sum of $108,819.62 it was without knowledge that such sum did not include any amount for the market value of the realty, or for the retained earnings in the corporation, or for the good will of the partnership.

The court accepted the verdict and overruled the partnership’s motion to disregard the jury verdict and for judgment non ob-stante veredicto. A $456,703.82 judgment was rendered on the stipulations and the jury’s verdict in favor of Little and against the partnership and the partners jointly and severally.

The partnership has appealed, utilizing eleven points of error. If essential to a decision, we would sustain the points by which the partnership avers that the evidence is factually insufficient to support the jury’s finding of good will value, and that the jury’s findings that Little accepted the sum of $108,819.62 without knowledge of the omissions are against the great weight and preponderance of the evidence.

Valuation of good will is a complex matter of fact. It may be based on expert testimony which, in turn, is usually grounded on various approximation formulas applied to earnings. See, e. g., Taormina v. Culicchia, 355 S.W.2d 569, 574 (Tex.Civ.App. —El Paso 1962, writ ref’d n. r. e.). But the value of good will is not the value of the business itself. Good will is an intangible which is an integral part of the business the same as are the physical assets. Texas & P. Ry. Co. v. Mercer, 127 Tex. 220, 90 S.W.2d 557, 560 (1936). It exists, therefore, as incidental to the business and, as a thing of value to an insurance agency, is an advantage or a benefit beyond the value of the capital stock, funds or property. Rice v. Angell, 73 Tex. 350, 11 S.W. 338, 339, 3 L.R.A. 769 (1889).

Here, Professor Clay, consistent with the just mentioned nature and valuation of good will, has reference good will-to the partnership’s ability to earn an above average rate of return. However, the formula he applied to determine the value of the partnership’s good will is not referenced to above average earnings, but, instead, is referenced to the value and sales price of the entire business itself. The formula the professor applied is one to indicate, in his own words, “the value of an insurance business,” and “the valuation of this particular entity,” which “would be equivalent to the value of Ordway-Saunders if we were selling it.” While the good will of the partnership has value, that value is not, as found by the jury, the formula’s maximum value or sales price of the partnership itself, a finding which the evidence is too weak to support.

The jury found that when Little “received and accepted in payment for his partnership interest the total sum of $108,-819.62,” he had no knowledge “[t]hat such sum did not include any amount for” the market value of the lots, the retained earnings in the corporation or good will. The unequivocal acknowledgment by Little that he received the payments after he knew that none of the amounts in controversy were included, even though he explained why he accepted the payments, evinces that the jury’s findings to the contrary are against the great weight and preponderance of the evidence.

But these points are not essential to a decision because the one reasonable meaning of the partnership agreement precludes the surcharges Little would impose. The parties themselves do not suggest any ambiguity in the agreement; they simply disagree upon the proper construction to be given it. The proper construction is the one which ascertains and gives effect to the true intention of the parties. This requires an examination and consideration of the entire agreement to harmonize and give effect to all of its provisions, Universal C. I. T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154,158 (1951), as manifested by the terms employed in the light of the attending circumstances. Banker v. Breaux, 133 Tex. 183, 128 S.W.2d 23, 24 (1939).

The 15 May 1965 portion of the agreement has provisos that the partnership’s books shall be kept on the accrual method of accounting and reflect a full and accurate account of all transactions; yet the same agreement specifies that the assets and liabilities of the partnership and the capital accounts of the partners are shown on the books and, as shown, are made a part of the agreement for all purposes. Even though the cost, rather than the market value, of the realty and the corporation stock was carried on the books which did not show any value for good will, there is no patent inconsistency, for that method, as the undisputed evidence shows, is consistent with generally accepted accounting principles for a going business and was the unvarying accounting practice of the partnership. That in and of itself is of little import until a settlement is necessitated by a change in the status of an active partner.

In every event in which a partner ceases to be an active partner, the agreement is specific that all of his interest in the partnership — and in Little’s situation, “all the withdrawing Partner's interest in the assets, records, business and all other property of the Partnership” — shall be purchased by the remaining active partners. The amount of payment for that interest is geared to the particular event causing the inactivity, but in every event the payment includes the amount of the partner’s capital account which, by force of the partnership agreement, is the one shown on the partnership’s books.

Little acknowledges that he received the amount shown for his capital account, but he argues that he is not thereby barred from receiving his share .of good will, an asset not recorded on the partnership’s books. He submits that controlling in Texas is the case of Taormina v. Culicchia, 355 S.W.2d 569 (Tex.Civ.App. — El Paso 1962, writ ref’d n. r. e.), which recognizes a recovery for good will upon the dissolution of a partnership even though the partnership agreement did not expressly provide for it. We do not deem that case dispositive of the facts before us. Apparent from the opinion in Taormina, and particularly from its citation of 68 C.J.S. Partnership § 396, p. 910 et seq., relative to the value of good will for purposes of settlement and accounting, is that the partnership agreement, which terminated the partnership by its own terms, had no provision for the distribution of the partnership assets upon termination, and the issue of good will was determined under principles applicable in the absence of a definitive agreement. That, of course, is not the fact situation we review.

Before us is an agreement under which Little sold to the remaining active partners “all” of his “interest in the assets, records, business and all other property of the Partnership” for an amount ■ computable from the figures shown by the partnership’s books (emphasis added). That amount was paid and received. As an admitted asset, good will, as well as any other asset whose exact value was not shown on the books, was included in the sale. And, although not mentioned by name, the good will and other assets would be included in Little’s sale of “all” of his “interest in . all other property of the Partnership.” Thus, for the amount shown as his capital account by the books and his allocated share of profits and salary, which he received and stipulated was correct, Little sold all of his interest in all property of the partnership. Having received the full payment he was to receive under the agreement, Little could not thereafter demand another settlement against the partnership. Davis v. McCarty, 145 S.W.2d 287, 290 (Tex.Civ.App. — San Antonio 1940, writ ref’d).

It seems evident that the adoption of Little’s position would impress on the partnership agreement a requirement for settlement at the appraised value of all assets and liabilities at the time of the withdrawal, a requirement that never was met either before or after the final agreement was committed to writing. That such was not the intent of the parties is aptly illustrated by the absence of procedures for that method of settlement and the presence of alternative and comprehensive settlement provisions which have been followed.

Moreover, there is nothing derogatory to the intent of the parties nor inequitable to them in the entire agreement as we have construed it, and the construction conforms to the interpretation the parties themselves placed on the language they used in the partnership agreement. The parties were competent to contract as to the settlement to be made when a partnership interest was terminated, and the provision Little invoked for his settlement was inserted at his request. It is the same provision that was applied without the imposition of the surcharges Little now seeks for his benefit when an active partner withdrew while Little was a member of the partnership. The provision is reciprocal and', because it applies equally to all partner" the fact that at any given time their interests might be worth more or less than their capital accounts reflect does not give one of them the right to insist on a settlement different from the one that they all agreed upon.

Accordingly, the first two points by which the partnership asserts that Little is not entitled to further payment are sustained. A further discussion of the other points is thereby pretermitted.

The judgment of the trial court is reversed. Judgment is here rendered that Dawson Little take nothing by his action against the Ordway-Saunders Company partnership. Rule 434, Texas Rules of Civil Procedure.

      . One electing to become a consulting partner would would receive for his interest “forty (40%) per cent of such consulting partner’s capital account as of the close of the month preceding such election” in cash, sixty (60%) per cent of both the monthly salary then being paid and the profits attributable to his share immediately before his election for fifty (50) months, and, at the end of the fiftieth month, “the amount remaining in such partner’s capital account” in cash. Any amount unpaid at the consulting partner’s death is to be paid under the same timetable to his estate.
      The interest of a deceased active partner is to be purchased from his estate for “the amount of such partner’s capital account as of the end of the month preceding his death.” In addition, the estate is to continue as a member of the partnership for a period of fifty (50) months at a reduced interest, receiving sixty (60%) per cent of both the monthly salary then being paid and the profits attributable to the deceased partner’s share immediately before his death.
      Partners holding a sixty (60%) per cent interest in the partnership can vote an early retirement for an active partner. For “all of the retired partner’s interest in the partnership assets,” he is to receive, in cash, “an amount equal to the retired partner’s capital account at the time the partners so vote.” Additionally, he is to receive, in twelve (12) equal monthly installments, “an amount equal to one-third (V3) of the amount of the profits and losses which said partner drew the preceding 36-month period.”

      . Little alleged in his live trial pleadings, and secured a jury finding, that he was forced to retire from the partnership; yet, he made no claim for payment, or adjustment, under the forced retirement provision of the basic agreement, which would have been for a lesser amount than prescribed under the invoked paragraph 5(b) of the seventh amendment. No issue regarding this matter has been raised on appeal, and it is not further noticed.


author: DIES, Chief Justice.

text:
    John P. COURVILLE, Appellant, v. Jenell COURVILLE, Appellee.
    No. 8162.
    Court of Civil Appeals of Texas, Beaumont.
    June 29, 1978.

      George Michael Jamail, Beaumont, for appellant.
    Waldman & Smallwood, Beaumont, for appellee.
   DIES, Chief Justice.

John P. Courville appeals from an order increasing his child support payments from $50.00 per week to $400.00 per month. John Courville and Jenell Courville were divorced on December 20, 1967, and Jenell Courville was given custody of their three minor children.

Jenell Courville filed her motion for an increase in child support payments on September 15, 1977, and the cause was tried before the court on January 31,1978. John Courville did not appear at the hearing, and no excuse was given for his absence, though his counsel admitted to receiving notice of the setting.

Jenell Courville was the only witness to testify at the hearing. She stated that two of the three children were still minors, and that the cost of providing them with education, medical care, transportation, and other living expenses had increased to the point that she was unable to meet their needs with the money presently available to her. She also testified in detail concerning her own income and living expenses.

Appellant argues in his brief that he should not be burdened with expenditures for the children other than for necessities, and that an automobile and attendance in a private Catholic school are luxuries. We disagree. A parent’s duty to support is not limited to bare necessities. Cooper v. Cooper, 513 S.W.2d 229 (Tex.Civ.App. —Houston [1st Dist.] 1974, no writ). The court in Cooper stated that:

“The court may consider the standards of living which the parties have maintained in the past as an indication of the standard which they will strive for in the future. The court would be justified in requiring the parents to provide a standard of living for their children commensurate with that which they have and will continue to enjoy for themselves.” 513 S.W.2d 234.

Jenell Courville’s testimony established that two of the three children were working and that the car was necessary so that all the children could get to school and to jobs. She further testified without objection that John Courville had attended private school and that the children had always attended private school. This evidence was sufficient to establish that the minor children’s circumstances had changed, that the children’s expenses were reasonable, and that there was a need for increased child support.

Although she testified at length about the children’s circumstances and her own financial situation, Jenell Courville did not provide any evidence of appellant’s ability to pay increased child support. She stated that John Courville was a pipefitter and that he had remarried and had a child by the later marriage. She did not know what his income was at the time of the divorce, or what it was at the time of this hearing. She could not testify whether his present income was higher than his previous income.

Our courts have held that a father’s duty to pay child support must correspond to his financial ability, taking into consideration all of his obligations, including another wife and other children. Gully v. Gully, 111 Tex. 233, 231 S.W. 97 (1921); Cooper v. Cooper, supra; Lewallen v. Hardin, 563 S.W.2d 356 (Tex.Civ.App. — Dallas 1978, no writ). Even though the trial court made findings of fact that John Courville was able to pay increased child support, we are not bound by these findings since the record before us contains a statement of facts. Swanson v. Swanson, 148 Tex. 600, 228 S.W.2d 156 (1950); Anderson v. Anderson, 503 S.W.2d 124 (Tex.Civ.App. — Corpus Christi 1973, no writ); Ondrusek v. Ondrusek, 561 S.W.2d 236 (Tex.Civ.App. — Tyler 1978, no writ). Our examination of the record convinces us that there is no evidence of John Courville’s financial ability.

The trial court’s order of child support should not be disturbed on appeal unless there is a clear abuse of discretion. Brito v. Brito, 346 S.W.2d 133 (Tex.Civ.App. —El Paso 1961, writ ref’d n. r. e.); Anderson v. Anderson, supra; Ondrusek v. On-drusek, supra. Where there is no competent evidence of one parent’s financial ability, it is an abuse of discretion for the trial court to order an increase in child support. Lewallen v. Hardin, supra.

Since it appears to us that the facts need to be further developed, we reverse and remand this case to the trial court in the interests of justice. United States Fire Insurance Co. v. Carter, 473 S.W.2d 2 (Tex.1971); Lewallen v. Hardin, supra.

REVERSED and REMANDED.


author: McDONALD, Chief Justice.

text:
    Louise Dunaway BARCLAY, Appellant, v. WAXAHACHIE BANK & TRUST CO. et al., Appellees.
    No. 5900.
    Court of Civil Appeals of Texas, Waco.
    June 30, 1978.
    Rehearing Denied Aug. 3, 1978.

      Warwick H. Jenkins, Jenkins & Jenkins, Waxahachie, for appellant.
    Matt Dawson, Waco, Patrick F. McGowan, Rowland Foster, Strasburger & Price, Dallas, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal by defendant Barclay from Summary Judgment fixing liability, and from final judgment of $162,597.74, for plaintiff Waxahachie Bank & Trust on a guaranty on a note.

Plaintiff Bank sued Billy Phil Ganaway Feedlots, Inc., Billy Phil Ganaway and Bill Ganaway on a promissory note for $154,-584.89, and defendant Barclay on a written guaranty of such note.

Defendant Barclay plead want of consideration, failure of consideration, estoppel because of concealment of material facts, and denied liability both as to principal amount and attorneys’ fees. Defendant further counterclaimed against plaintiff and cross acted against Lynn B. Griffith, Attorney for plaintiff, alleging Griffith was an officer in plaintiff Bank and also her attorney; that when she executed the guaranty she did not know the Ganaways owed plaintiff an additional $100,000. note secured by a Deed of Trust on 210 acres; that Griffith knew of this and did not advise her of same; that had she known of same she would not have executed the guaranty on the $154,584. note; that Griffith’s conduct in not advising her was unconscionable action and/or fraud which entitles her to damages and exemplary damages.

Plaintiff and Third-Party Defendant Griffith moved for summary judgment which the trial court granted, and rendered interlocutory summary judgment for plaintiff and Griffith as to liability, reserving for trial on the merits the issues of plaintiff’s damages and attorneys’ fees.

Thereafter, at hearing on the merits the trial court rendered final judgment for plaintiff Bank for $162,597,74 against all defendants (after crediting a $46,652.12 payment made by the Ganaways; but including $17,500. awarded as attorneys’ fees); and further decreed cross-plaintiff Barclay take nothing by her cross actions and counterclaims against cross-defendant Bank and Third-Party defendant Griffith.

The Ganaways have not appealed.

Defendant Barclay appeals on 12 points.

Points 1 through 3 contend the trial court erred in granting summary judgment against defendant because plaintiff failed to establish it was the owner and holder of the note, and because plaintiff did not attach the originals or certified copies of the note and guaranty instrument to its summary judgment affidavit.

Defendant asserts that without the note and guaranty instrument or certified copies thereof, plaintiff has failed to meet its burden of proof as to ownership, possession and status of the note, citing Perkins v. Crittenden, Tex., 462 S.W.2d 565.

Plaintiff’s suit here was against defendant upon her guaranty of the Ganaway’s $154,584. note. On summary judgment as to liability it was plaintiff’s burden to prove:

1) The existence and ownership of the contract.
2) The performance of the terms of the contract by plaintiff.
3) The occurrence of the condition on which liability is based.
4) The failure or refusal to perform the promise by the guarantor, (13 Tex. Jur.2d § 390, p. 666).

The existence and ownership of the guaranty contract was proved by Mrs. Barclay’s answer and counterclaim; and by Mrs. Barclay’s affidavit in response to motion for summary judgment which attached a certified copy of such guaranty. See DeBord v. Muller, Tex., 446 S.W.2d 299.

The record is without dispute that the plaintiff performed its part of the contract by loaning the Ganaways the money to pay off a note owed to the Citizens Bank of Waxahachie.

The occurrence of the condition on which liability is based, the failure of the Gana-ways to pay the note, is proved by the depositions of Billy Phil Ganaway and Mrs. Barclay.

Mrs. Barclay admitted by her pleadings and deposition that she had not performed the promise made by the guaranty.

Points 1 through 3 are overruled.

Points 4 through 8 contend the trial court erred in granting summary judgment against defendant: because defendant raised defense to the guaranty by her counterclaim and cross action and supported same by proof; by holding as a matter of law defendant was not an accommodation maker; by holding as a matter of law the guaranty was supported by consideration; and by holding as a matter of law the consideration had not failed.

Mrs. Barclay was a long time friend of the Ganaways. Bill Ganaway had been her father’s, hers, and her husband’s farm manager, and for many years shared an office with her. In the early 1960’s Billy Phil Ganaway, son of Bill Ganaway, went into the cattle feed lot business and from the beginning borrowed and/or owed considerable sums of money. In 1968 he owed the Citizens National Bank in Waxahachie large sums of money, and they were financing his purchase of feed for the feed lot operation. On August 21, 1968 Mrs. Barclay executed a guaranty agreement to the Citizens Bank guaranteeing funds advanced to Billy Phil Ganaway up to $150,000. (plus interest). The letter of guaranty recites it shall be a continuing and irrevocable letter of guaranty; apply to advancements thereafter made to Ganaway; and continue until written notice of revocation be delivered to the Bank.

In early January 1974 Billy Phil Ganaway borrowed $100,000. from Waxahachie Bank & Trust to pay off miscellaneous debts and secured such note with a Deed of Trust on 210 acres of land.

At this time Ganaway owed the Citizens Bank a total of $154,584. (and of which Mrs. Barclay was guarantor). Ganaway decided to move the loan to the Waxahachie Bank & Trust and asked Mrs. Barclay if she minded. She said she did not. On February 1, 1974 the Ganaways signed a note to the Waxahachie Bank & Trust for $154,-584.69 to be paid in 1 year; and contemporaneously Mrs. Barclay executed a letter of guaranty to the Bank: “I Louise Dunaway Barclay, for and in consideration of your extending credit to Billy Phil Ganaway and/or Billy Phil Ganaway Feedlot, Inc., in a sum not to exceed $160,000.00, do hereby guarantee the payment of said note, plus interest due you, in the case and event of default on said note and the failure of said Billy Phil Ganaway and/or Billy Phil Gana-way Feedlot, Inc. to pay same as same becomes due.

“This guaranty shall be applicable on any and all renewals of said note as you may see proper to grant, and this guaranty shall not expire because of any renewal and extension made by you on said obligation.

“This guaranty shall be binding upon me, my legal representatives and estate.

Louise Dunaway Barclay”

Funds were disbursed on February 2, 1974 and the Citizens Bank was paid off. Thus, the transaction involved merely a transfer of an obligation from one bank to another, and the above guarantee was made in renewal of one Mrs. Barclay had already executed and which she was not attempting to avoid.

Mrs. Barclay asserts that attorney Lynn Griffith had been her lawyer; he was an officer in plaintiff Bank; that in the meetings at which the $154,584. loan by plaintiff Bank were discussed he did not tell her that Ganaway owed the Waxahachie Bank & Trust $100,000. secured by lien on his 210 acres, and that had she known of this she would not have executed the guaranty.

In January 1975, Ganaway could not pay either the $100,000. note or the $154,584. note or the interest on either to Waxaha-chie Bank & Trust. Discussions ensued between the Bank, Ganaway and Mrs. Barclay, and a meeting was held in Mrs. Barclay’s office on January 10, 1975, at which time Mrs. Barclay learned about the $100,-000. note Ganaway owed the Waxahachie Bank & Trust. At the meeting Mrs. Barclay acquiesced in and actively promoted the working out of a deal under which on January 25,1975 Ganaway deeded Waxaha-chie Bank & Trust 17 acres for interest on the $100,000. and $154,584. note to January 25,1975; Ganaway made a $154,584. note to Mrs. Barclay secured by a second lien on the 210 acres of land; Waxahachie Bank & Trust renewed both the $100,000. note, and the $154,584. note secured by Mrs. Barclay’s guaranty, with Ganaway.

In January 1976 Ganaway could not pay the $100,000. note to Waxahachie Bank & Trust. Waxahachie Bank & Trust foreclosed under its Deed of Trust and Mrs. Barclay bought the 210 acres for $105,000. The 210 acres is worth $1300. to $1500. per acre.

Plaintiff Bank loaned Ganaway $154,584. and received a note from the Gan-aways therefor. Mrs. Barclay executed the letter of guaranty. It is not necessary that consideration for the guaranty pass to the guarantor, for it is sufficient consideration if the primary debtor receives some benefit. And an extension of time for the payment of a debt is a sufficient consideration for a contract. Hargis v. Radio Corp. of America Electronic Components, 539 S.W.2d 230 (Tex.Civ.App., Austin) NWH, Bonner Oil Co. v. Gaines, 108 Tex. 232, 191 S.W. 552.

When Mrs. Barclay participated in the January 10, 1975 meeting, learned that Ganaway owed plaintiff Bank the $100,000. note, received Ganaway’s note for $154,584 and second lien on the 210 acres to secure same she lost any defense she may have had by reason of fraud or failure of consideration, by waiver and ratification of the transaction at the time the note sued on was ratified, and is now estopped to urge such defenses. Gaylord Container Division v. H. Rouw Co., Tex., 392 S.W.2d 118; Hunter v. Lanius, S.Ct., 82 Tex. 677, 18 S.W. 201.

As to defendant’s contention attorney Lynn B. Griffith was “her attorney” the record is without dispute (including defendant’s own deposition) that he received no retainer whatsoever; that he had represented her on a few occasions in the past; but had competed each task; received his fee; and was in no way “her attorney” at or during the times here involved.

The foregoing is likewise applicable to defendant’s counterclaim and cross action.

Points 4 through 8 and 10 are overruled.

Point 9 contends the trial court erred in holding that the guaranty supported the award of attorneys’ fees.

The guaranty provided: “do hereby guarantee the payment of said note, plus interest due you”. The note provided “And in the event of default in the payment of this note at maturity Borrower shall also pay * * attorneys’fees * *

The guaranty was an unconditional guarantee of the parent note which included the obligation to pay attorneys’ fees upon default. By so guaranteeing performance of such obligation the guarantor became liable therefor. Dean v. Allied Oil Co., Tex.Civ.App. (Waco) Er.Dism’d, 261 S.W.2d 900; Young v. Zimmerman & Sons, Inc., Tex.Civ.App. (Waco) Er.Dism’d, 434 S.W.2d 926; Gubitosi v. Schoellkopf Products, Inc., Tex.Civ.App. (Tyler) NWH, 545 S.W.2d 528; Blume v. National Homes Corp., Tex., 441 S.W.2d 176, cited by defendant points up that neither the agreement guaranteed, nor the guaranty contains an agreement for the payment of attorneys’fees, and that in such situation attorneys’ fees are not recoverable against the guarantor. Blume is thus adverse to defendant’s contention and supports the present holding.

Contention 9 is overruled.

Points 11 and 12 assert the trial court erred in granting summary judgment defendant take nothing by her counterclaim and cross action by holding as a matter of law such counterclaim and cross action was barred by the two-year statute of limitations.

Defendant’s counterclaim and cross action are grounded upon attorney Griffith’s alleged failure to advise her of Ganaway’s prior $100,000. note and debt to plaintiff Bank, which defendant plead amounted to “a false representation of a past or existing material fact made for the purpose of inducing her to execute” the guaranty. Defendant learned of this no later than January 10,1975 and filed her counterclaim and cross action more than 2 years thereafter.

The two-year statute of limitations (Article 5526 VATS) is applicable to a suit for damages arising from a written contract induced by fraud. Gaddis v. Smith, Tex., 417 S.W.2d 577; Wise v. Anderson, 163 Tex. 608, 359 S.W.2d 876; Quinn v. Press, 135 Tex. 60, 140 S.W.2d 438.

Points 11 and 12 are overruled.

Affirmed.