text:
    Lura M. SPARKS, Appellant, v. AETNA LIFE AND CASUALTY COMPANY et al., Appellees.
    No. 19154.
    Court of Civil Appeals of Texas, Dallas.
    June 16, 1977.

      Tom O’Connell, Plano, for appellant.
    Richard E. Harrison, Nall, Kyle, Harrison & Nall, Sherman, for appellees.
   ON MOTION FOR REHEARING OUR FORMER OPINION IS WITHDRAWN AND THE FOLLOWING OPINION SUBSTITUTED

AKIN, Justice.

This is an appeal from a summary judgment granted Aetna Life and Casualty Company and from a judgment rendered on stipulated facts pursuant to Tex.R.Civ.P. 263 in favor of Southern County Mutual Insurance Company. Plaintiff Sparks sued the insurance companies on a judgment which she had previously obtained against Rodney Pinset, who was an omnibus insured under a policy issued by Southern County. When this suit was instituted, Aetna alone was named as a defendant; however, plaintiff then amended her petition, deleting all reference to Aetna and naming Southern County as the sole defendant. Since the summary judgment in favor of Aetna was rendered after plaintiff had amended her petition dropping. Aetna as a defendant, we hold that the trial court was without jurisdiction to render summary judgment for Aetna. Accordingly, we vacate the summary judgment and dismiss as to Aetna. With respect to the judgment rendered for Southern County, we hold that waiver by the insurer as to one insured does not waive its policy defenses to another insured. Accordingly, we affirm the judgment rendered in favor of Southern County.

I. The Summary Judgment for Aetna

Plaintiff filed her original petition on September 24, 1974, and filed her first amended original petition on May 8, 1976. The amended petition was substantially identical to the original petition except that it named Southern County as defendant in place of Aetna. Aetna’s motion for summary judgment was heard on April 4, 1975, and granted on July 7. Thus, the trial court did not rule on Aetna’s motion until after plaintiff filed her amended petition which deleted Aetna as a defendant. The amended petition had the effect of dismissing Aetna from the cause, without prejudice, and the trial court was, therefore, without jurisdiction to pass on the merits of the controversy between Sparks and Aetna. Tex.R.Civ.P. 65; Valdez v. Gill, 537 S.W.2d 477, 480 (Tex.Civ.App. San Antonio 1976, writ ref’d n. r. e.). Accordingly, we vacate the summary judgment rendered in favor of Aetna and dismiss Aetna as a party to this litigation.

II. The Judgment for Southern County

This suit is predicated on an automobile accident which occurred on January 31, 1973, and involving cars driven by plaintiff and Pinset. Pinset was driving a car owned by John Brown with Brown’s permission. The car was covered by a liability policy issued to Brown by Southern County, which covered any person operating the insured automobile with the owner’s permission. Pinset was, therefore, an omnibus insured under the policy. Sparks sued Brown and Pinset on March 22, 1974. A default judgment for $10,000 was taken against Pinset, and Sparks dismissed the action against Brown. Sparks is now seeking to recover against Southern County on the basis of the judgment rendered against the omnibus insured.

Southern County asserts that it is not liable to Sparks because Pinset did not comply with a condition precedent to the company’s liability which required Pin-set to furnish the insurer with written notice of any accident as soon as practicable. Since Sparks cannot assert any greater rights against Southern County than could Pinset, the insurer may now assert any defense which it has against its insured. Klein v. Century Lloyds, 154 Tex. 160, 275 S.W.2d 95, 96 (1955).

Appellant Sparks argues that because Brown, the named insured, gave oral notice to Southern County and because Southern County investigated the accident, this notice inured to the benefit of the omnibus insured, Pinset, and that since sufficient notice was given, Southern County had a duty to defend Pinset. Since Southern County failed to do so, Sparks contends that the insurer is now liable on the judgment. In support of her contention, Sparks cites Employers Casualty Co. v. Glens Falls Ins. Co., 484 S.W.2d 570, 576 (Tex.1972), which held that timely written notice by the named insured satisfied the purpose of the insurance contract’s written notice clause and that additional notice was not required from the omnibus insured. Here, however, the named insured did not give timely written notice; the only notice given by Brown was oral. This court previously held that oral notice, even though it provides the insurer with all the information which would be contained in written notice, does not satisfy a contractual provision requiring written notice. Aetna Ins. Co. v. Durbin, 417 S.W.2d 485, 487 (Tex.Civ.App. Dallas 1967, no writ).

Since Brown’s oral notice is not effective as proper notice under the contract, the question presented is whether the insurer’s waiver of proper notice as to Brown also waives its policy defense as to Pinset. Although the insurer’s acceptance of late written notice by the named insured waives the defect as to the named insured, it has been held that this waiver does not benefit the omnibus insured. Travelers Ins. Co. v. Chicago Bridge & Iron Co., 442 S.W.2d 888, 903 (Tex.Civ.App. Houston [1st Dist.] 1969, writ ref’d n. r. e.); see American Fidelity & Casualty Co. v. Traders & General Ins. Co., 160 Tex. 554, 334 S.W.2d 772, 776 (1959). We conclude that this appeal is controlled by the doctrine of Chicago Bridge. Glens Falls and Chicago Bridge involve two different concepts: waiver and the effect to be given a contractual provision. The supreme court’s holding in Glens Falls concerned a situation where the insurer had received the written notice to which it was entitled under the contract; the only question was whether it was entitled to a superfluous notice from the omnibus insured. The question presented in Chicago Bridge was quite different; it concerned a situation where no insured had provided proper notice and the insurer was, therefore, not obligated to provide a defense to either insured. Similarly, Southern County was under no duty to defend either insured since it did not receive written notice from either of them. The fact that the insurer, after investigating the case, decided to waive its policy defense as to the named insured is not relevant to its assertion of the same defense against the omnibus insured. The insurer may have concluded that the claim against the named insured was not meritorious and that it was willing to absorb the expense of defending against that claim. It could have also concluded that a substantial recovery against the omnibus insured was likely and that it was unwilling to expose itself needlessly to such liability. An insurer is entitled to make such a decision. Waiver of notice of the named insured does not deprive the omnibus insured of any rights to which he was otherwise entitled; it merely expands the benefits available to the named insured. It does not indicate an intention to waive any defense available against an omnibus insured, and neither is it inconsistent with assertion of the defense as against the omnibus insured. Consequently, our holding is in accord with decisions defining the concept of waiver as an intentional relinquishment of known rights or conduct, in light of full knowledge of relevant facts, which is inconsistent with the assertion of those rights. United States Fidelity & Guaranty Co. v. Bimco Iron & Metal Corp., 464 S.W.2d 353, 357 (Tex.1971); Massachusetts Bonding & Ins. Co. v. Orkin Exterminating Co., 416 S.W.2d 396, 401 (Tex.1967). We conclude, therefore, that Southern County is not liable on the judgment rendered against Pinset because Pinset did not comply with the policy terms.

The judgment of the trial court is reversed and rendered with respect to Aetna and affirmed as to Southern County.


source: Caselaw Access Project

author: GUITTARD, Chief Justice.

license: Public Domain

text:
    James D. ROBINSON, Appellant, v. The RELIABLE LIFE INSURANCE COMPANY, Appellee.
    No. 19245.
    Court of Civil Appeals of Texas, Dallas.
    June 23, 1977.
    Rehearing Denied Aug. 11, 1977.

      Roger Turner, Dallas, for appellant.
    William A. Forteith, Elliott, Churchill, Hansen & Dyess, Dallas, for appellee.
   GUITTARD, Chief Justice.

The question on this appeal is whether an insurer, in order to avoid liability on a policy of life insurance on the ground of false representations in the application for insurance, must establish both that the representation was material to the risk and that the condition concerning which the representation was made contributed to the death of the insured. We hold that under Texas Insurance Code Annotated article 21.16 (Vernon 1963), a finding that the misrepresentation was material to the risk is ground for avoiding the policy without proof that the condition misrepresented contributed to the event which caused the loss.

This suit was filed by the beneficiary for the amount payable on the death of the insured, his fourteen-year-old stepson. The insurer denied liability and counterclaimed for cancellation of the policy on the ground of false representations in the application. After trial without a jury, the trial court denied liability and filed findings of fact to the effect that the application contained negative answers to questions inquiring whether the insured had been treated by a doctor within the past five years, whether the insured had any injury, illness or operation in the past five years, and whether the insured had ever been confined to a hospital or sanitorium. The court found that each of these statements was false, that each was material to the risk assumed by the insurer, that each was relied on by the insurer in issuing the policy, that the policy would not have been issued but for such statements, and that the insurer did not discover the true facts until shortly after the death of the insured. There is no evidence in the record concerning the cause of death, and the court made no finding on that question.

On this appeal the beneficiary contends that the court erred in finding that the alleged misrepresentations were material to the risk because there was no evidence as to the cause of death. The question turns on the construction of a statute, originally enacted in 1903, and now appearing as Texas Insurance Code Annotated article 21.16, as follows:

Any provision in any contract or policy of insurance issued or contracted for in this State which provides that the answers or statements made in the application for such contract or in the contract of insurance, if untrue or false, shall render the contract or policy void or voidable, shall be of no effect, and shall not constitute any defense to any suit brought upon such contract, unless it be shown upon the trial thereof that the matter or thing misrepresented was material to the risk or actually contributed to the contingency or event on which said policy became due and payable, and whether it was material and so contributed in any case shall be a question of fact to be determined by the court or jury trying such case. [Emphasis added.]

The beneficiary contends that the word “or” above emphasized should be read as “and,” so that the condition misrepresented in the application cannot be considered as grounds for avoidance of the policy unless such condition was actually a cause of the loss insured against. This intent, he argues, is shown by the further provision that “whether it was material and so contributed in any case shall be a question of fact.”

The statute has not been expressly so construed in any of the cases cited by the beneficiary, although several seem to adopt this construction by implication. Thus, a number of opinions appear to be based on the view that a representation is not “material to the risk” unless the condition concealed by the misrepresentation was the cause of the loss. Southern Life & Health Ins. Co. v. Grafton, 414 S.W.2d 214, 218 (Tex.Civ.App.—Tyler 1967, writ ref’d n.r. e.); Trinity Reserve Life Ins. Co. v. Hicks, 297 S.W.2d 345 (Tex.Civ.App.—Dallas 1956, no writ); National Life & Acc. Ins. Co. v. Dickinson, 115 S.W.2d 1180, 1183 (Tex.Civ.App.—El Paso 1938, writ dism’d); First Texas Prudential Ins. Co. v. Pipes, 56 S.W.2d 203, 204 (Tex.Civ.App.—El Paso 1933, writ dism’d).

We do not consider that these decisions are sound insofar as they seem to hold that a condition existing at the time of the issuance of the policy is not material to the risk unless it actually contributes to the loss. The concept of a condition material to the risk assumed by the insurer is quite distinct from the cause of the loss, as the bettor reasoned cases in Texas and elsewhere have recognized. Thus, there is a well-defined line of eases supporting the insurer’s contention that under article 21.16 the materiality of the risk must be viewed as of the time of the issuance of the policy, rather than at the time the loss occurred, and that the principal inquiry in determining materiality is whether the insurer would have accepted the risk if the true facts had been disclosed.

The only expression by the supreme court on the point is Fidelity Union Fire Insurance Company v. Pruitt, 23 S.W.2d 681, 683-84 (Tex.Comm’n App.1930, holding approved), which involved breach of a stipulation of continued occupancy in a fire insurance policy. The commission of appeals, in remanding for a new trial, observed that if the statute in question (now article 21.16) should be applicable, and if at the time the policy was issued a disclosure that the building would remain vacant would have influenced the company in taking the risk, the stipulation that it was insured “while occupied by the owner” was material to the risk.

Other Texas cases supporting the view that materiality of the risk must be viewed at the time of the application for insurance are Jackson v. National Life and Accident Insurance Co., 161 S.W.2d 536, 537-38 (Tex.Civ.App.—Dallas 1942, writ ref’d w.o.m.) (representation that insured had not been injured and had not consulted a physician was material to the risk, since insurer’s knowledge of these facts would influence it in making the contract, and the immediate cause of the death was not regarded as material); Aetna Life Insurance Co. v. Shipley, 134 S.W.2d 342, 347 (Tex.Civ.App.-Fort Worth 1939, writ dism’d) (charge erroneously defined “good health” as absence of disease that affects general healthfulness “or which materially contributes to the death of a person” was erroneous since a disease could be said to materially increase the risk and the facts concerning such disease were withheld by the insurer); Indiana and Ohio Live Stock Ins. Co. v. Smith, 157 S.W. 755, 756 (Tex.Civ.App.—Austin 1913, writ ref’d) (misrepresentation concerning amount paid for insured horse was “material to the risk” since facts showed representation induced insurer to write the policy); United Benevolent Ass’n v. Baker, 141 S.W. 541, 544 (Tex.Civ.App.—Texarkana 1911, writ dism’d) (misrepresentation concerning syphilis was “material to the risk,” though insured died of a different disease).

The United States Court of Appeals for the Fifth Circuit has adopted the same view in cases involving article 21.16. Bettes v. Stonewall Ins. Co., 480 F.2d 92, 95 (5th Cir.1973); Fireman’s Fund Ins. Co. v. Wilburn Boat Co., 300 F.2d 631, 643-44 (5th Cir.1962), cert. den. 370 U.S. 925, 82 S.Ct. 1562, 8 L.Ed.2d 505. These cases directly address the question now raised by appellee and expressly hold that the “or” in the statute is disjunctive rather than conjunctive. In Wilburn Boat, the court points out that the contrary construction would leave the requirement of materiality without meaning because any fact contributing to the loss would necessarily be material to the risk. It would not be true, however, that a factor material to the risk would also necessarily contribute to the loss.

The beneficiary argues that the requirement of materiality has an independent meaning applicable to cases where the insurer seeks to cancel the policy before the loss on the ground of false representations in the application. This argument, in our view, is untenable because it would mean that the “or” would be construed as either disjunctive or conjunctive, depending on whether a loss had occurred at the time of the trial. Thus false representations, which would be sufficient grounds for cancellation of the policy before the loss, would not be sufficient after the loss, even though the insurer did not discover their falsity until after the loss. We find no basis for this interpretation in the language of the statute. Moreover, the cases cited by the beneficiary do not actually hold that the two requirements are conjunctive, but rather seem to confuse the two requirements by assuming, without full consideration, that a representation is not material to the risk if it does not contribute to the loss. The better view, in our opinion, is that adopted by the federal courts and also the Texas courts in the cases cited by the insurer, which hold that materiality is viewed as of the time of the issuance of the policy, as that issue is viewed generally in the law of fraud, and if the representation concerned a matter which was material to the risk at that time, and did actually induce the insurer to issue the policy, as the trial court here found, it is ground for avoidance of the policy without proof that the condition misrepresented actually caused the loss.

The beneficiary also contends that the alleged false representations in the application provide no ground for cancellation of the policy in view of the court’s finding that the signature of the insured on the application was a forgery. This contention is untenable because the evidence showed that the beneficiary rather than his fourteen-year-old stepson dealt with the agent of the insurer, paid the premiums, accepted delivery of the policy, and after the policy was delivered to him, he read the application and knew what it contained. Under these circumstances the beneficiary must be held to have ratified any false statements in the application. Odom v. Ins. Co. of State of Pennsylvania, 455 S.W.2d 195, 199 (Tex.1970).

In a supplemental brief appellant raises two additional points attacking for lack of pleadings and evidence the court’s finding that the beneficiary was guilty of fraudulent representations. Although appellee pleaded fraud on the part of the insured rather than the beneficiary, the evidence showed that the beneficiary rather than the insured dealt with the insurer’s agent and that the policy was delivered to him. There was also evidence that the beneficiary inspected the policy and knew that the questions in the application concerning the previous illness, treatment, and hospitalization of the insured had been answered “no.” Although the beneficiary denied that he knew about any such illness treatment, or hospitalization, he testified positively that if any such illness, treatment, or hospitalization had occurred, he would have known about it. All of this evidence was admitted without any objection for lack of pleading. Consequently, we hold that this defect in pleading was waived and that the issue of false representations by the beneficiary was tried by implied consent. Texas Rules of Civil Procedure 90; Bednarz v. State, 142 Tex. 138, 176 S.W.2d 562, 562-563 (1943); Ames v. Putz, 495 S.W.2d 581, 582 (Tex.Civ.App.—Eastland 1973, writ ref’d).

With respect to the sufficiency of the evidence to support the court’s findings that the representations by the beneficiary were fraudulent, the court apparently took the view that since there was direct evidence from the deposition of the treating physician of the insured’s illness, treatment, and hospitalization, and since the beneficiary testified that he would have known about it if it had occurred, the beneficiary did know notwithstanding his testimony that he did not. We hold that this evidence is sufficient to support the court’s finding in this respect.

Affirmed.


text:
    Joe M. AYCOCK, Appellant, v. VANTAGE MANAGEMENT COMPANY, Appellee.
    No. 19234.
    Court of Civil Appeals of Texas, Dallas.
    June 24, 1977.
    Rehearing Denied Aug. 11, 1977.
    Richard F. McMullen, McMullen & Porter, Dallas, for appellant.

      Robert Harms Bliss, Dallas, for appellee.
   GUITTARD, Chief Justice.

This action was brought by a lessor of real estate against his lessee for a judicial declaration that the renewal option in the lease is unenforceable because it fails to specify the amount of the rental for the renewal term. The trial court rendered summary judgment so declaring, and the lessee appeals on the ground that the lease contains a sufficiently definite standard by which the rental may be determined. We agree that the option is not void for uncertainty. Accordingly, we reverse and remand for further proceedings.

The lease was apparently prepared by the lessor, since the lessor’s name appears in the printed form. The primary term is forty months, and the lease provides that if at the end of the primary term the lessee is not in default, he is granted an option to renew for an additional term of thirty-six months. The provision for the rental for the renewal term is as follows:

(b) The rental for the renewed term shall be based on then prevailing rental rates for properties of equivalent quality, size, utility and location, with the length of the Lease term and credit standing of the Lessee to be taken in account. If Lessee desires to renew this Lease, Lessee will notify the Lessor its intention to renew no later than six months prior to the expiration date of the Lease; Lessor shall, within the next fifteen (15) days, notify Lessee in writing of the proposed renewal rate and the Lessee shall, within the next fifteen (15) days following receipt of the proposed rate, notify the Lessor in writing its acceptance or rejection of the proposed rental rate.

In support of the judgment declaring the option void, the lessor contends that it is only a “contract to enter into a contract,” citing for this general principle Stekoll Petroleum Co. v. Hamilton, 152 Tex. 182, 255 S.W.2d 187 (1953), and Radford v. McNeny, 129 Tex. 568, 104 S.W.2d 472 (1937), and citing also with respect to lease-renewal options, Schlusselberg v. Rubin, 465 S.W.2d 226 (Tex.Civ.App.—El Paso 1971, writ ref’d n.r.e.).

Even if the present lease should be interpreted as providing an option to renew at a rental to be agreed on at the time of renewal, the unenforceability of such an option cannot be regarded as settled under the Texas decisions. In Pickrell v. Buckler, 293 S.W. 667, 669 (Tex.Civ.App.—El Paso 1927, writ ref’d n.r.e., 116 Tex. 567, 296 S.W. 1062), the El Paso Court of Civil Appeals refused to enforce such an option, but the supreme court, in refusing writ of error on other grounds, expressly stated: “We are not inclined to the view that the covenant to renew in the original lease was void for uncertainty.” Pickrell v. Butler, 116 Tex. 567, 296 S.W. 1062 (1927). In Schlusselberg v. Rubin, 465 S.W.2d 226, 228 (Tex.Civ.App.—El Paso 1971, writ ref’d n.r.e.), the El Paso court again held another such option to be unenforceable, and the supreme court again refused a writ with the notation “no reversible error,” but this time gave no further indication of its views. In some other jurisdictions, renewal options are enforced even though the amount of the rent is left for further agreement. Hall v. Weatherford, 32 Ariz. 370, 259 P. 282, 56 A.L.R. 903 (1927); Playmate Club, Inc. v. Country Clubs, Inc., 62 Tenn.App. 383, 462 S.W.2d 890, 58 A.L.R.3d 494 (1970).

Lessee argues, however, that we need not go all the way with these cases because this lease provides a standard to be applied in determining the rental, namely, that it shall be “based on then prevailing rental rates for properties of equivalent quality, size, utility and location, with the length of the Lease term and credit standing of the Lessee to be taken in account.” We agree that the quoted provision is sufficiently definite to be enforceable. Although we have found no Texas decisions on the point, in other jurisdictions renewal options are frequently enforced if the lease prescribes a standard of reasonableness, or the equivalent, in determining the rental. For instance, it has been held that an option to renew a lease at a rate to be determined at the time of the renewal, “said rate to be a reasonable rental under the then existing conditions,” is valid and enforceable. Edwards v. Tobin, 132 Or. 38, 284 P. 562, 68 A.L.R. 152 (1930). Likewise, an option to renew “at a rental to be agreed upon by both parties, such agreement must be based upon the prevailing fair rentals for similar property at that time,” has been held valid. George Y. Worthington & Son Management Corp. v. Levy, 204 A.2d 334 (D.C.App.1964). Other cases applying the same principle include: Pittsburgh Allied Fabricators, Inc. v. Haber, 440 Pa. 545, 271 A.2d 217, 219 (1970); Moolenaar v. Co-Build Cos., 354 F.Supp. 980, 982-85 (D.C.V.I.1973); Bechmann v. Taylor, 80 Colo. 68, 249 P. 262, 263 (1926); Greene v. Leeper, 193 Tenn. 153, 245 S.W.2d 181, 181-82 (1951).

The lessor argues that the present provision is less definite than a provision for a “reasonable” rental because it provides that the credit standing of the lessee may also be taken into account. The lessor’s motion for summary judgment does not show that the credit standing of the present lessee is weak, and the lessor makes no contention that such credit standing is a material factor that would affect the amount of a reasonable rental in the present case. In the absence of such evidence, we cannot assume that the lessee’s poor credit standing would be a material factor.

We conclude that a contract is sufficiently definite for enforcement, although the performance of one of the parties is to be measured by a standard of reasonableness, if the contract expressly so provides, and that this principle applies to the matter of monetary compensation when the parties have agreed to be bound by that standard. 1 A. Corbin, Contracts, § 97 (1963). Professor Corbin points out that all contracts have some degree of indefiniteness and uncertainty, but that people should be held to the promises they make and that if gaps are filled in accordance with what the parties have said, the result is more just to both than would be a refusal of enforcement. 1 Corbin, supra, § 95 at 396, 400, § 97 at 426. This principle has been applied to a contract for sale of corporate stock in Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex.1966). It has been adopted with respect to sales of goods in the Uniform Commercial Code, which provides that the parties may be bound by a contract which fails to specify the price if they so intend, and if they later fail to agree on the price, it is a reasonable price at the time of delivery. Tex.Bus. & Comm.Code Ann. § 2.305(a) (Vernon 1968). Although this section is not by the terms of the Code applicable to a lease of real estate, we regard the principle as sound and see no reason why it should not apply here. Pollard v. Saxe & Yolles Development Co., 12 Cal.3d 374, 115 Cal.Rptr. 648, 525 P.2d 88, 92 (1974); and see Rogowicz v. Taylor and Gray, Inc., 498 S.W.2d 352, 355 (Tex.Civ.App.—Tyler 1973, writ ref’d n.r.e.).

In the present lease, the parties have gone further than simply to provide for a reasonable rental. They have enumerated the factors to be considered so that determination of the rental should not be arbitrary or capricious. Moreover, a procedure for determining the amount is prescribed as follows:

If Lessee desires to renew this Lease, Lessee will notify the Lessor its intention to renew no later than six months prior to the expiration date of the Lease; Lessor shall, within the next fifteen (15) days, notify Lessee in writing of the proposed renewal rate and the Lessee shall, within the next fifteen (15) days following receipt of the proposed rate, notify the Lessor in writing its acceptance or rejection of the proposed rental rate.

The lessor argues that this provision leaves him at liberty to frustrate the procedure specified in the lease by proposing an unreasonably high renewal rate. We cannot agree. Since the lessor is obligated to propose a rate consistent with the factors enumerated, it must make that determination in good faith, and if it fails to act in good faith or fails to propose any rate at all, as it did in the present case, it may be deemed to have waived its right to propose the rate and thus to leave the matter for the court’s determination. The section of the Uniform Commercial Code above mentioned provides that a price to be fixed by one of the parties means a price for him to fix in good faith. Tex.Bus. & Comm.Code Ann. § 2.305(b) and (c) (Vernon 1968).

The same principle has been applied to a sale of land in Young v. Warren, 444 S.W.2d 777 (Tex.Civ.App.—Beaumont 1969, writ ref’d n.r.e.). There the parties were cotenants in a tract of land, and the plaintiff wrote a letter to the defendant enclosing a deed and saying, “[J]ust send me a check for whatever amount you think is a fair price for my half interest.” The defendant accepted the deed and filed it for record, and later he offered to pay the plaintiff $3,000 for the half interest. The plaintiff did not believe this to be a fair price and sued for the reasonable cash value. The jury found that defendant did not believe $3,000 to be a fair price and that the reasonable cash value was $5,169. In affirming a judgment for the larger amount, the court held that the contract was not unenforceable merely because no specified amount of money was mentioned in the offer. The court concluded that since the defendant accepted the offer by recording the deed, he became bound to pay an amount which the defendant thought was fair, but that the defendant’s own testimony showed that he did not believe $3,000 to be a fair price. The court went on to say:

The defendant, by failing to offer a fair price, arrived at in good faith (i. e. fair market value), is in no position to complain that the plaintiff has been compensated for the breach by an allowance of the fair cash market value of the property. The defendant cannot escape the payment of a fair price by simply declining to offer his own subjective evaluation of the property which he now owns. Plaintiff could not prove what the “fair price” might have been to the defendant for such was locked securely and irretrievably in defendant’s own mind.

We have no difficulty in applying this principle to the present case. By the terms of the lease which the lessor itself evidently prepared, the lessor expressly promised to make a proposal for a rental for the renewal term, and by enumerating the factors to be considered in proposing such a rental, it impliedly obligated itself to make its proposal in good faith. This promise was presumably part of the original inducement to the lessee to accept the lease. Consequently, the lessor cannot now escape its obligation by asserting that its proposal might not be made in good faith. Since the lease evidences unequivocally the intention of the lessor, as well as the lessee, to be bound by a provision that did not specify the exact rental, we see no reason to hold that it is not bound by that provision. The nature of the lessee’s remedy in the event the lessor fails to make a proposal in good faith is a matter not now before us. It is sufficient for the present to hold that the renewal option is sufficiently definite to be enforceable under the circumstances of this case. Accordingly, the judgment of the trial court is reversed, and the cause is remanded with instructions to proceed in accordance with this opinion.

Reversed and remanded with instructions.

      . Edwards v. Tobin was distinguished by the Oregon court in its later decision in Slayter v. Pasley, 199 Or. 616, 264 P.2d 444, 446-47 (1953), refusing to enforce a renewal option which contemplated a further agreement between the parties. The court said that in Edwards and other cases like it, the contract fixed a standard of reasonableness enabling the court to enforce the original contract according to its terms without making a contract that the parties had failed to make.


text:
    Ex parte James F. SAUSER. Original Proceeding Writ of Habeas Corpus.
    No. 19316.
    Court of Civil Appeals of Texas, Dallas.
    June 24, 1977.
    R. Hugh Hodges, Dallas, for appellant.
   GUITTARD, Chief Justice.

Relator, James F. Sauser, has applied for a writ of habeas corpus under Texas Revised Civil Statutes Annotated article 1824a (Vernon Supp.1976), directed to the Sheriff of Dallas County, who had arrested him and confined him to jail. The papers filed in this court show that the sheriff acted under an order of one of the district courts of Travis County in a proceeding to enforce a previous order for child support. On filing the application we ordered the relator to be released on bail pending a hearing in this court. We now hold that the latest order of the district court is void because it ordered relator’s immediate arrest without notice or hearing. Consequently, the writ of habeas corpus is granted, and relator is ordered discharged from custody.

The original order of the district court holding relator in contempt is dated May 25, 1976, and was signed June 18, 1976. That order recites that relator is guilty of contempt for failing to make child support payments in the amount of $2,890. His punishment is assessed at a $500 fine and six months’ confinement in jail. The order provides, however, that the issuance of the commitment is suspended so long as relator should continue to make certain periodic payments “through the Registry of the Court, the Domestic Relations Office.” The order further provides:

It is FURTHER ORDERED in case of any default, the Domestic Relations Office, the Registry of this Court, may certify in writing such default of this Court, and without further notice or hearing, this Court will order the issuance of a capias pro fine for the arrest of James F. Sauser to be brought before the Court instanter, to show cause why the sentence now suspended should not be executed in full, and for such other proceedings as are proper.

Subsequently, on April 8,1977, a “Motion to Revoke Suspension” was filed by an investigator for the Domestic Relations Division of the Juvenile Court of Travis County, alleging under oath that according to the records in the domestic relations office, relator had failed to pay $882 of the total amount of $2,772 due under the court’s previous order. A certified record of payments is attached to this motion. The court then signed another order, dated April 15, 1977, reciting that the court had examined the evidence (evidently without any notice to relator) and had found that relator was “now failing to comply with the order of this Court when he could and should have done otherwise.” This order further provides:

It is THEREFORE ORDERED, ADJUDGED and DECREED that the suspension of the execution of the order entered herein on the 25th day of May 1976, be and the same is hereby set aside, and that the judgment of the Court entered in this cause on said date is now ordered executed; and the Clerk of this Court is hereby directed to issue a Capias pro Fine for the immediate arrest and for the said JAMES F. SAUSER to be held in custody of the Sheriff of Travis County, Texas and to be brought before the Court instanter to show cause why the sentence previously suspended should not be executed in full, and for such other proceedings as are proper.

Pursuant to this order, the clerk of the district court issued a writ addressed to the sheriff or constable of any county in the state, as follows:

You are THEREFORE COMMANDED to take into custody the body of said respondent, James F. Sauser, if he be found in your county, and to deliver the said respondent into the custody of the Sheriff of Travis County, Texas, to be held in custody by said Sheriff and to be brought before the Court instanter to show cause why the sentence previously suspended should not be executed in full, and return of this Capias you will make according to law.

The return on this writ shows that on May 17, 1977, the Sheriff of Dallas County arrested relator and placed him in the Dallas County jail. There he remained until May 20, when he was granted bail by one of the justices of this court.

Although the contempt order in question appears to be punitive rather than coercive, we have jurisdiction to grant a writ of habeas corpus under article 1824a since relator’s liberty is restrained on account of violation of an order in a child support case. See Ex parte Morris, 162 Tex. 530, 349 S.W.2d 99, 101 (1961); Ex parte Jones, 160 Tex. 321, 331 S.W.2d 202, 205 (1960).

Relator contends that his confinement violates due process because he was not afforded notice and hearing before his confinement in jail. We agree. Presumably, proper notice and hearing were provided before the order of May 25,1976, finding him in contempt and fixing his punishment. That punishment, however, was not then imposed. It was “suspended” so long as relator made certain payments. Our question is whether on default in any such payment, the court had authority to examine the evidence of the alleged default without notice or hearing and order relator’s immediate arrest. We have been unable to discover any authority for this procedure. It is well settled, of course, that imprisonment for contempt without notice and hearing is a denial of due process. Ex parte Herring, 438 S.W.2d 801, 803 (Tex.1969); Ex parte Davis, 161 Tex. 561, 344 S.W.2d 153, 156 (1961). Moreover, even when a person has been found in contempt for violation of the court’s order, but his punishment is suspended on condition of compliance, the court must afford him a subsequent hearing to determine breach of the condition and must issue an unconditional order of commitment. Ex parte Hart, 520 S.W.2d 952, 953 (Tex.Civ.App.—Dallas 1975, no writ). Consequently, we hold that the district court was not authorized to order relator’s immediate arrest and confinement without notice and hearing.

We recognize that in this case the order of May 1976 did not, as did the order in Hart, order relator’s immediate confinement on filing of an affidavit showing noncompliance with the order. Here the court entered another order in April 1977 reciting the noncompliance, and, although it seems to order the earlier sentence of contempt to be carried out immediately, it directs the sheriff to bring relator before the court instanter to show cause why the punishment should not be imposed as originally ordered. Even so, we hold that this procedure does not provide due process. No proper notice of the subsequent hearing was given. We need not determine whether the full ten-days’ notice specified in Texas Rules of Civil Procedure 308a was required. The supreme court has said that the holding of a contempt hearing within less than ten days from the date on which a show-cause order is served is a procedural irregularity which does not affect the court’s jurisdiction and may or may not constitute denial of due process, depending on the circumstances. Ex parte Davis, 161 Tex. 561, 344 S.W.2d 153, 155, 157 (1961). More recently, in Ex parte Hoover, 520 S.W.2d 483, 485 (Tex.Civ.App.—El Paso 1975, no writ), the El Paso Court of Civil Appeals has held that due process requires the full ten-days’ notice.

In the present case if relator had any notice at all, it was only by the “capias pro fine,” under which he was arrested and confined in jail. Instead of having the ten days specified in rule 308a to prepare for the hearing, he was kept in custody, and if this court had not granted bail, he would have had little opportunity to make his defense to the charge that he had again violated the court’s order. If any notice at all was required, this procedure did not provide it. Ex parte Cardwell, 416 S.W.2d 382, 384 (Tex.1967). Consequently, we hold that the requirement of due process was not met by the provision in the order of April 1977 that he should be immediately arrested and brought before the court to show cause why his sentence should not be served.

The use of an attachment of the person in this situation has been questioned by the supreme court. Ex parte Cardwell, 416 S.W.2d 382, 384 (Tex.1967) note 2. That court has recognized that if the person charged does not appear as commanded by the notice, he may be brought in by such a writ. Ex parte Davis, 161 Tex. 561, 344 S.W.2d 153, 156 (1961). Nothing in the present record indicates that a show-cause notice was served and disregarded. Rather, the present application for writ of habeas corpus states that relator was arrested without any previous notice, and the original order of May 1976 apparently contemplates that on default of any of the conditions specified, a “capias pro fine” would be issued without further notice. We recognize that at the time of that order the requirement of due process had presumably been met and the court might properly have ordered relator to jail immediately to begin serving his sentence. Since it did not do so, but conditioned his punishment on further acts of default, we hold that due process required another notice and hearing before he could be deprived of his liberty.

Moreover, even if the order for relator’s arrest could be considered valid, relator’s confinement in the Dallas County jail was improper because such confinement was not authorized by the writ under which the sheriff acted in taking relator into custody. The writ commanded the sheriff to deliver the relator to the Sheriff of Travis County, who was ordered to take him “instanter” before the district court. The return shows that the Sheriff of Dallas County did not obey the writ in this respect, but rather confined relator to the Dallas County jail, where he might remain to this day if this court had not granted bail.

Relator discharged.


author: COLEMAN, Chief Justice.

text:
    The CITY OF HOUSTON, Appellant, v. John B. CHURCH, Appellee.
    No. 16876.
    Court of Civil Appeals of Texas, First District.
    June 30, 1977.
    Rehearing Denied Aug. 4, 1977.

      Otis H. King, City Atty., Dale M. Ting-leaf, Asst. City Atty., Houston, for appellant.
    Hofheinz & Harpold, Gary L. Crofford, Houston, for appellee.
   COLEMAN, Chief Justice.

This is an appeal from a judgment entered on a jury verdict awarding plaintiff damages for injuries to his warehouse and its contents suffered as a result of flooding from a broken waterline operated by the City of Houston. The judgment will be reformed and affirmed.

In 1961 S. E. Realty, a corporation, owned real property on which an addition to a warehouse was being constructed. A waterline was uncovered which ran under the planned addition. The owner of the property did not know that the line was in use and ascertained that it was not within a city easement. An employee of the owner broke the line with a sledge hammer and discovered that it was a water main. The city was notified and it repaired the break. Thereafter the building was constructed over the waterline.

In 1972 the waterline broke from unknown causes beneath the building and damage resulted to the building and its contents. On that date the land and the premises were owned by John B. Church, the plaintiff.

After exhausting his administrative remedies, Mr. Church filed suit against the city alleging that his damage was caused by the negligence of the city or, in the alternative, that his damage resulted from the trespass on the part of the city. The city denied negligence and alleged as a defense to the trespass count that it had acquired an easement by prescription. The city asserts that the trial court erred in submitting in connection with a general issue on negligence an instruction on res ipsa loquitur. The point must be sustained.

The doctrine of res ipsa loquitur is applicable when two factors are present: (1) the character of the accident is such that it would not ordinarily occur in the absence of negligence; and (2) the instrumentality causing the injury is shown to have been under the management and control of the defendant. Mobil Chemical Company v. Bell, 517 S.W.2d 245 (Tex.1974). Where the evidence shows that an accident may have happened as a result of two or more causes, and it is not more reasonably probable that it was due to the negligence of the defendant than to any other cause, the rule of res ipsa loquitur does not apply. LeBlanc, Inc. v. Gulf Bitulithic Company, 412 S.W.2d 86 (Tex.Civ.App.—Tyler 1967, writ ref d n.r.e.).

The evidence establishes that this accident is not of such character as would not happen in the absence of negligence. There is testimony that underground waterline breaks are caused either by electrolysis or ground shifts, which are acts of nature and are unpredictable. There is testimony that leaks resulting from these causes frequently occur in the City of Houston. The fact that the water main began leaking under the plaintiff’s building is not that character of an accident that would support a reasonable inference that the city was negligent in causing or permitting it to occur. Barragan v. Munoz, 525 S.W.2d 559 (Tex.Civ.App.—El Paso 1975, no writ).

The jury found that the operation of the water pipeline by the City of Houston was a direct continuous trespass of John B. Church’s property rights and that the trespass was a proximate cause of his damages. The city requested a judgment notwithstanding the verdict on the ground that the judgment based upon trespass may not stand because there was no evidence that the city was a trespasser. The city asserts that the evidence proves as a matter of law that at the time of the occurrence in question the city had acquired a prescriptive right to maintain its waterline beneath the plaintiff’s property. The city stipulated that it had acquired no prescriptive rights prior to the year 1961.

There is no evidence to establish the circumstances surrounding the original act of the city in laying the pipeline across the property in question. Testimony was admitted without objection that the city probably deviated from the street line at that place in order to avoid problems it would encounter at a point where the road goes under the railroad line. There is speculation that the line probably was constructed at a time when the land was owned by the railroad company. There is no probative evidence to establish the time when the line was constructed. The city’s claim to a prescriptive easement is based on facts showing that the line was discovered in 1961 by the owner of the property and that the city continued to use the line for a period of ten years thereafter.

An officer of the corporation owning the property at that time testified that he instructed the architect employed by the corporation to handle the construction of the building so as not to permit the building to be constructed over a live waterline. He testified that he agreed to grant the city an easement in which to lay a waterline alongside the building and that he saw a city crew working in that area. There is evidence that city employees knew that the building was being constructed over the waterline. There is no evidence that the city made a protest concerning this use of the property. The corporate officer testified to facts showing that he was under the impression that the line had been killed.

The case of Rosborough v. Cook, 108 Tex. 364, 194 S.W. 131 (1917) contains the statement:

“The law of limitation of actions for land is founded upon notice. The title by limitation ripens, primarily, only because, in such manner and for such period of time as the different statutes require, notice is given of the hostile claim.

The elements essential to establish title by adverse possession under the ten year statutes of limitations, Tex.Rev.Civ.Stat. Ann. art. 5510 (1925), are prescribed by that article and defined in arts. 5514 and 5515, supra. Among other things the entry on the land must be under a “claim of right.” This term has been defined by the Supreme Court of Texas as follows:

“The ‘claim of right’ to which the statute refers simply means that the entry of the limitation claimant must be with the intent to claim the land as his own, to hold it for himself; and such must continue to be the nature of his possession.”

The court further held that the intention of the possessor to claim the land as his own or to hold it for himself must be manifested by an open or visible act or declaration showing such a purpose. Orsborn v. Deep Rock Oil Corp., 153 Tex. 281, 267 S.W.2d 781 (1954).

The hostile and adverse character of the user necessary to establishment of an easement by prescription is the same as that which is necessary to establish title by adverse possession. Use by express or implied permission or license, no matter how long continued, cannot ripen into an easement by prescription, since user as of right, as distinguished from permissive user, is lacking. O’Connor v. Gragg, 161 Tex. 273, 339 S.W.2d 878 (1960).

Notice of a hostile claim is given by actual possession that is of such a character as to indicate unmistakably an assertion of a claim of exclusive ownership in the occupant. The law’s requisites are not satisfied if the occupancy is shared with the record owner. Rick v. Grubbs, 147 Tex. 267, 214 S.W.2d 925 (1948).

Evidence of actions by the adverse claimant which imply recognition of the record owner’s right to possession will raise a fact issue as to the hostile character of the claimant’s possession. Thompson v. Moor, 14 S.W.2d 803 (Tex.Com.App., Sec. A, 1929).

In a case where the county tax assessor sought to establish title to land by adverse possession the Supreme Court of Texas held that the necessary hostile claim was defeated by evidence that the record owner paid taxes on the land each year; that the tax assessor had constructive knowledge of this fact and failed to notify the owner that he was claiming the land. Dunlop v. Poole, 142 Tex. 124, 176 S.W.2d 310 (1943). The court said: “. . . When Dunlop paid his taxes on this land, equity, good conscience, and public policy called on T. H. Poole to inform Dunlop that he, Poole, was claiming the land and rendering the same for taxation. Certainly T. H. Poole should not have remained silent under such circumstances; nor, by reason of such silence, can he take advantage of same and claim a limitation title to Dunlop’s land. . . . ”

In Wright v. Vernon Compress Company, 156 Tex. 474, 296 S.W.2d 517 (1956), the Supreme Court said: “. . . The evidence shows only mere occupancy of the land by Charley Shahay. There is no evidence showing that the claim of Shahay was adverse. There is evidence that he lived on the land, but none that he claimed the land as his own. . . . Mere occupancy of land without any intention to appropriate it will not support the statute of limitation. ...”

Entry and possession without a claim of right is nothing more than a trespass. Unless the true owner has actual knowledge of the hostile claim, the possession must be so open, visible, and notorious as to raise the presumption of notice that the rights of the true owner are invaded intentionally and with the purpose of asserting a claim of title adverse to his, so potent that the owner could not be deceived, in order to mature a title by adverse possession. Houston Oil Company of Texas v. Stepney, 187 S.W. 1078 (Tex.Civ.App.—Beaumont 1916, writ ref.); Winchester v. Porretto, 432 S.W.2d 170 (Tex.Civ.App.—Houston [1st Dist.] 1968, writ ref. n.r.e.).

Whether possession has been adverse depends on the intention of the limitation claimant in entering upon and using the premises. This is true even when there has been action by the claimant of a prima facie hostile import. The question is essentially one of fact and a court is rarely justified in holding that such an adverse intention is established as a matter of law. Harrell v. Crabtree, 271 S.W.2d 130 (Tex.Civ.App.—Eastland 1954, writ ref. n.r.e.).

There were no signs or markers on the surface of the land to indicate the existence of the pipeline in question. There is no evidence that the city began the use of the pipeline under a claim of right. The owner discovered the line and intentionally broke it. After the city was notified and stopped the flowing water, the owner continued the construction of a building over the line. These were acts asserting ownership. There is no evidence that the city notified the owner that it claimed an easement or a right to use the land for a water main. The evidence is not conclusive that the “use” was open, notorious, hostile, and adverse for a period of more than ten years. A failure to prove any one of the essential elements is fatal. Maricle v. Hines, 247 S.W.2d 611 (Tex.Civ.App.—Fort Worth 1952, no writ).

The city has failed to request issues on title by adverse possession or to prove as a matter of law that it has acquired an easement by prescription. The trial court could properly have entered a judgment based on the jury’s findings on the issues concerning trespass.

Since a judgment could properly have been entered on the issues relating to trespass, the error of the trial court in instructing the jury on res ipsa loquitur is harmless.

The city asserts that there is no evidence which at law will support the jury’s findings of $1,668.00 in answer to special issue number 9, the damage issue. This contention is based on the fact that the testimony concerning the value of cardboard cartons which were damaged by the flooding of the warehouse did not establish “market value”. The plaintiff testified that property was valued at $209.00 and said “this was the total cost of the boxes that was damaged by the water.” He further testified that when the owner of the property moved it out of the warehouse, he simply deducted the value of the damaged property from that what was owed for storage and handling. He stated that “simply took their word for the value of the product that was stored there and lost.”

The proper measure of damages for destroyed property is its market value. Shaw Tank Cleaning Co. v. Texas Pipeline Co., 442 S.W.2d 851 (Tex.Civ.App.—Amarillo 1969, writ ref’d n.r.e.). The testimony quoted above does not establish the market value of the paper cartons.

In our original opinion it was stated that the judgment would be reversed and the cause remanded unless John B. Church filed a remittitur in the sum of $209.53, in which event the cause would be affirmed. The remittitur has been filed. The judgment is reformed to award John B. Church the sum of $1,458.47 as damages and as reformed is affirmed.


author: McDONALD, Chief Justice.

text:
    Mr. and Mrs. J. E. CHILTON, Appellant, v. PIONEER NATIONAL TITLE INSURANCE COMPANY, Appellee.
    No. 5722.
    Court of Civil Appeals of Texas, Waco.
    June 30, 1977.
    Rehearing Denied Aug. 18, 1977.

      Kelly D. McGehee, Kelly D. McGehee, Inc., Dallas, for appellant.
    Tedford E. Kimbell, Allen, Knuths, Bracken & Short, Dallas, for appellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by plaintiffs Chilton from that portion of a judgment, rendered on directed verdict, that plaintiffs take nothing in their suit for return of earnest money, against defendant Pioneer Title Company.

Plaintiffs Chilton sued defendants Bentwood Corporation and Pioneer Title for a return of plaintiffs’ earnest money deposit and damages, alleging (among other matters) that plaintiffs contracted in writing on May 21,1974 to buy a house from Bentwood for $125,000.; that they delivered two $5,000. checks (payable to Bentwood at Bentwood’s request) to Bentwood as earnest money to be deposited in escrow with Pioneer; that Bentwood cashed plaintiffs’ checks and about June 6,1974 delivered two $5,000. checks on Bentwood to Pioneer; that closing was contracted for August 1, 1974; that plaintiffs in early July became concerned (the building was not on schedule and Bentwood had not arranged a loan); and inquired of Pioneer about the matter; that Ms. Doak, Senior Escrow Officer, advised plaintiffs that Pioneer had received the money and had opened an escrow account in the name of Bentwood and plaintiffs; that on July 8, plaintiffs (still concerned) retained an attorney who contacted Pioneer and demanded return of plaintiffs’ escrow account by letter; that on July 30 plaintiffs’ attorney went to Pioneer’s office and was advised Pioneer had never cashed Bentwood’s checks for the $10,000.; that Pioneer thereafter negotiated such checks which were returned NSF.

Plaintiff alleged Pioneer agreed to serve as an escrow agent pursuant to the contract and/or there was an express or implied contract between Pioneer and plaintiffs whereby Pioneer agreed to serve as stakeholder for the parties; that the residence was not completed on August 1, 1974; that Pioneer breached the escrow and stakeholder’s contract when it failed to return plaintiffs’ earnest money.

Plaintiffs further alleged Pioneer breached its fiduciary responsibility to plaintiffs, and was negligent: 1) In agreeing to hold and not cash Bentwood’s checks for the earnest money without consent of both parties; 2) In failing to cash such earnest money checks regardless of Bentwood’s instructions; 3) In failing to notify plaintiffs of Bentwood’s instruction not to cash the earnest money checks; 4) In failing to notify plaintiffs Pioneer had only unnegotiated checks instead of actual money in the escrow account.

Plaintiffs (among other matters) prayed for judgment for return of its earnest money against both Bentwood and Pioneer.

Trial was to a jury. At close of the evidence the trial court rendered directed verdict for plaintiffs for $10,000. against Bentwood; and rendered directed verdict plaintiffs take nothing as to Pioneer. Judgment was rendered accordingly.

Plaintiffs appeal on 9 points asserting among other matters the trial court erred in sustaining Pioneer’s motion for directed verdict in that there was a fact issue for submission to the jury: 1) as to breach of an escrow contract by Pioneer; 2) as to breach of an expressed or implied stakeholder’s contract by Pioneer; 3) as to breach of an express or implied trust by Pioneer; 4) as to negligence by Pioneer.

In determining the correctness of a directed verdict we must consider only evidence favorable to plaintiffs, together with all reasonable inferences therefrom. Triangle Motors of Dallas v. Richmond, 152 Tex. 354, 258 S.W.2d 60; Anderson v. Moore, Tex., 448 S.W.2d 105; Joseph v. Jet Air Freight Corp., Tex.Civ.App. (Waco) NRE, 479 S.W.2d 325.

Pioneer asserts that there was no escrow stakeholder contract or trust between it and plaintiffs as Pioneer never received any money from plaintiffs; that it received Bentwood’s checks for the $10,000.; that the contract called for $12,500. earnest money; that it received Bentwood’s checks conditionally i. e. that they not be cashed.

Pioneer asserts that it owed no duty to plaintiffs, therefore it is not liable for any negligence.

There is in evidence the contract signed by plaintiffs and Bentwood. It is denominated a “Contract of Sale and Receipt of Earnest Money”, was on a form supplied by Pioneer and provides Bentwood will sell plaintiffs a described house in Dallas. “The purchase price is $125,000. payable as follows: $12,500. in cash to be deposited by purchaser in escrow with Pioneer National Title Insurance Company as partial payment and as earnest money, which deposit is to be made contemporaneously with the execution of this agreement and the balance of said purchase price, to wit: A. $12,500. is to be paid in cash [at closing] B. $100,000. loan to be applied for at expense of Purchaser * * *.

“Closing of this transaction shall take place * * at office of Pioneer National Title Insurance Company at Dallas on or before 1st of August, 1974.”

Plaintiffs’ two checks for $5,000. each payable to Bentwood Corporation are in evidence.

Bentwood’s two checks for $5,000. each payable to Pioneer National Title Company are in evidence, and both state on the front “Escrow on purchase of 6212 Emeraldwood Place by Chilton from Bentwood”.

There is in evidence an “Escrow Settlement Sheet” prepared by Pioneer which reflects “Seller/Purchaser, Bentwood/Chil-ton, date 7/30,” * * “Received of Bentwood * * $10,000”. * * “Disbursements J,- Ei Chilton void 7/31/74 $10,000”.

Ms. Doak, Pioneer’s Senior Escrow Officer testified she received the contract and the two $5,000. checks from Bentwood (marked escrow payment) on about June 6, 1974, but didn’t cash them because Bentwood told her not to. She further testified she did not have instructions from both parties not to cash the checks, nor did the contract call for not cashing the checks, and that both checks were marked “escrow payment”.

Mr. Chilton testified he called Ms. Doak in early July and she told him she had the contract and the money. She testified she told him she had the contract and the two checks, but did not tell him the two checks had never been cashed.

It was only -'on July 30 that plaintiffs’ attorney learned Pioneer had not cashed the two checks.

It is in evidence that the normal practice of Pioneer and other title companies who serve as escrow agents is to cash escrow checks immediately, and that they could only be not cashed on instructions of both parties to the seller/buyer contract.

Under the authorities cited we think there was evidence from which a jury could find that Pioneer was in escrow or stakeholder relationship with plaintiffs and Bentwood, and that Pioneer had breached such escrow and/or stakeholder contract as well as breached an express or implied trust.

We further think the evidence raises fact questions as to negligence by Pioneer in not cashing Bentwood’s checks and in not advising plaintiffs that such checks were not cashed; and that Pioneer did owe a duty to plaintiffs. Pioneer accepted physical custody of the contract naming it as escrow agent; it received the checks; it prepared the escrow settlement sheet; it stated it held the contract and the money; was advising with both parties; and in short it undertook to act in an escrow relationship with the parties including plaintiffs. When it undertook to act it owed a duty to plaintiffs. Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 204 S.W.2d 508; Coleman v. Hudson Gas and Oil Corp., Tex., 455 S.W.2d 701; Lone Star Gas Co. v. Roach, Tex.Civ.App. (Waco) 552 S.W.2d 193.

The directed verdict was improper. Plaintiffs’ contentions supra are sustained.

REVERSED & REMANDED.


author: AKIN, Justice.

text:
    Stewart James MEW et al., Appellants, v. J & C GALLERIES, INC., Appellee.
    No. 19194.
    Court of Civil Appeals of Texas, Dallas.
    June 30, 1977.

      James E. Ross, Charles W. Kelly, Ross, Griggs & Harrison, Houston, for appellants.
    William M. Jones, Dallas, for appellee.
   AKIN, Justice.

This is a suit on an insurance policy to recover for losses suffered by plaintiff, J & C Galleries, in a burglary. The risk was insured by certain underwriters at Lloyds of London. After trial to the court, judgment was rendered in favor of plaintiff, and the underwriters appeal. We hold that there was evidence to support the trial court’s judgment and, accordingly, affirm.

J & C Galleries is a corporation formed by Roy Jenkins and Larry Cress for the purpose of dealing in jewelry, antiques, and objects of art. The parties intended to conduct auctions at various locations around the country; there was no business office as such. Jenkins and Cress made purchases at various locations around the country and, upon returning to Dallas, would record their purchases in a book kept for this purpose. They also recorded the wholesale value assigned to items contributed to the corporation by Jenkins and Cress. Their accountant, Michael Hurst, suggested that a computerized inventory would be preferable considering the large number of items in inventory and the nature of the business. Thus, the accountant arranged with an independent computer company to transfer these records from the book to a computer. Hurst reviewed the initial printout and made corrections to insure that it accurately reflected the entries in the record book. Subsequent acquisitions were recorded on the computer. After an auction, the goods sold were recorded and a computer printout of the then current inventory was obtained. After the robbery, Cress took an inventory of the remaining items and a list of the missing items was then entered in the computer. These missing items which had not been sold or traded are the basis of this claim. The question on this appeal is whether there is any competent evidence to support the trial court’s judgment in favor of J & C Galleries.

In support of its claim, plaintiff introduced several computer records. Exhibit 6 is a post-robbery computer printout which lists each item and indicates whether it was still on hand or had been sold or stolen. Exhibit 5 is a simplified version of exhibit 6 limited to those items stolen. Exhibit 7 is, according to Hurst, a hand-written recapitulation of exhibit 6 in somewhat simpler form. When plaintiff’s counsel tendered exhibits 2 through 7, defendants’ counsel requested an opportunity to examine Hurst on voir dire, which was granted. After voir dire was completed, the court permitted a short recess to allow counsel for defendants an opportunity to review these exhibits. Following the recess, defendants’ counsel stated that he had no objection to exhibits 2 through 7. However, defendants now assert that exhibits 5, 6, and 7, which constitute the only evidence of the value of the stolen property are hearsay and cannot be considered in support of the trial court’s judgment. For this proposition, they cite the rule that hearsay, even when admitted without objection, cannot support a judgment unless it falls within an exception. Knapik v. Edison Bros., Inc., 313 S.W.2d 335, 337 (Tex.Civ.App.—Waco, 1958, writ ref’d); Ray v. Shafer, 519 S.W.2d 525, 526 (Tex.Civ.App.—Fort Worth 1975, no writ). The contention that the computer printouts are hearsay is based on asserted failure of plaintiff to show that the printouts satisfied the prerequisites of Tex.Rev.Civ.Stat.Ann. art. 3737e (Vernon Supp.1976), the business records exception to the hearsay rule.

We conclude that defendants have waived any complaint based on lack of the predicate required by article 3737e. To allow defendants’ counsel to state specifically that he has no objection to the admission of these exhibits and then later complain of plaintiff’s failure to lay a proper predicate would permit a party to benefit from error for which his counsel is, in part, responsible due to his affirmative acts. Cf. Cherry v. State, 546 S.W.2d 922, 923 (Tex.Civ.App.—Dallas 1977, writ ref’d) (a party cannot complain of responsive answers to a question which he propounds). Counsel’s statement that he had no objection to the admission of the exhibits is, in effect, an agreement that the proper predicate can be laid and that further proof of the predicate need not be presented. Loper v. Andrews, 395 S.W.2d 873, 875 (Tex.Civ.App.—Waco 1965), aff’d on other grounds, 404 S.W.2d 300 (Tex.1966); Missouri Pacific Railroad v. Watson, 346 S.W.2d 640, 641 (Tex.Civ.App.—San Antonio 1961, writ ref’d n. r. e.) (per Pope, J.); see Buchanan v. American Nat’l Ins. Co., 446 S.W.2d 384, 387 (Tex.Civ.App.—El Paso 1969, writ ref’d n. r. e.). The rationale of this rule is that after lodging such an objection, withdrawal of the objection after reviewing the exhibits is tantamount to a stipulation that they comply with article 3737e and thus are admissible. To hold otherwise would lull the proponent of the exhibits into believing that no further predicate was necessary even though he could lay predicate in compliance with this statute. Under these circumstances, we hold that the defendants cannot now complain that these exhibits are hearsay.

The underwriters next contend that there is no evidence which shows the “actual cash value” of the stolen goods, which is the standard prescribed by the insurance policy. They argue that “actual cash value” is equivalent to market value and that this requires evidence of the price at which the insured could sell the property at the time and place it was stolen. Since the purchases occurred at various times and places other than Dallas, the underwriters conclude that the purchase prices are not evidence of the proper measure of damagés. We cannot agree. The supreme court has taken a less restrictive view than that urged by defendants. In Crisp v. Security Nat’l Ins. Co., 369 S.W.2d 326, 329 (Tex.1963), the court said:

The courts have not abandoned the consideration of either market or reproduction or replacement values in arriving at actual value to the insured, but evidence of those values may be used as a guide in making that determination rather than a shackle which compels strict adherence thereto. The trier of facts may consider original cost and cost of replacement, the opinions upon value given by qualified witnesses, the gainful uses to which the property has been put as well as any other facts reasonably tending to shed light upon the subject.

Thus, the supreme court regards market value as only one factor to be considered in arriving at actual cash value, rather than construing the two terms as equivalent. The purchase price of an item is generally determined at a point in time before the loss and often in a different location. Clearly, authority to consider purchase price in determining actual cash value would be virtually meaningless if restricted to purchases occurring at the time and in the place where the loss occurred.

The underwriters attempt to distinguish the holding in Crisp on the basis that it permits consideration of the purchase price as evidence of cash value only in cases concerning loss of “chattels possessed for the comfort and well-being of their owner” as opposed to “marketable chattels possessed for purposes of sale.” Id., 369 S.W.2d at 329. We cannot, however, agree with this reading of Crisp. The supreme court stated the rule that any evidence reasonably tending to show actual cash value, including the purchase price, could be considered; the court then went on to say that since there is no market value for certain property, such as household goods and clothing, their actual cash value would have to be determined without reference to market value. Id. As we read Crisp, the various factors set out above, including but not limited to market value, may be considered in ascertaining the actual cash value of any lost property, with the exception that where there is no recognized market value, market value should be excluded and the determination based on the remaining factors. We conclude, therefore, that the evidence of the purchase price was properly considered by the trial court.

Neither do we consider controlling Hanover Fire Ins. Co. v. Bock Jewelry Co., 435 S.W.2d 909, 919 (Tex.Civ.App.—Dallas 1968, writ ref’d n. r. e.), cited by the underwriters. That case held that evidence of the cost of stolen property and an opinion as to their actual cash value, which opinion did not purport to be restricted to actual cash value as of the date of theft and in the city where the theft occurred, would not support a summary judgment against the insurance company. The Bock court’s statement that actual cash value should be shown as of the time and place of loss is predicated upon its statement that actual cash value is the market value of the insured property; however, the supreme court’s holding in Crisp that market value is but a factor to be used in arriving at actual cash value establishes that these terms do not always have the same meaning. The evidence presented concerning the purchase price need not be restricted to the value as of the time and place of loss, as is true in determining market value. Indeed, the Bock court goes on to note that the evidence presented, if it could be considered, did no more than raise a fact question with respect to actual cash value. Similarly, we hold that the evidence before us was sufficient to raise a fact question, which the trial court resolved in favor of J & C Galleries.

The underwriters also challenge, in addition to J & C’s purchases, some of the inventory which was contributed by Jenkins and Cress, apparently in return for stock in the corporation. With respect to this contributed inventory, Jenkins and Cress agreed on a wholesale value for each item, which value was recorded in the record book. Although the details of this arrangement were not developed at trial, there is some evidence that the contribution of these items was essentially a sale to the corporation. Since nothing in the record indicates that they were not bona fide transactions or that the values assigned to each item were not set in good faith before the loss in question, we conclude that the assigned value is some evidence of the value of these particular stolen items. Pinet v. New Hampshire Fire Ins. Co., 100 N.H. 346, 126 A.2d 262, 266 (1956), cited with approval, Crisp v. Security Nat’l Ins. Co., 369 S.W.2d 326, 329 (Tex.1963).

The underwriters next argue that the probative value of the wholesale prices paid was destroyed by the testimony regarding the auction held in Dallas. They reason that since J & C Galleries anticipated a sale of $20,000 to $25,000, but only sold between $5,000 to $7,000, the wholesale prices paid by J & C Galleries were grossly inflated and not indicative of their market values in Dallas. They conclude that the property was sold at prices below that projected. We do not, however, regard this evidence as negating the probative value of the wholesale prices paid because the testimony indicates that it was the volume which disappointed plaintiffs expectations concerning the sale, not the prices paid for the goods actually sold. Indeed, the testimony reflects that a profit was realized on those items actually sold. Additionally, the failure of the sale is merely evidence which the trial court was entitled to take into consideration in its decision; it does not destroy the probative force of other evidence. As noted supra, the market value in Dallas as of the date of loss is not the sole criterion that may be considered. Since the underwriters have raised only a “no evidence” point, we must consider the evidence in the light most favorable to the finding and disregard contrary evidence. Douglass v. Panama, Inc., 504 S.W.2d 776, 777 (Tex.1974). Applying this standard, we hold that there was evidence to support the trial court’s finding.

The underwriters also assert that some of the items for which recovery is sought are clearly not covered by the policy, which covers only jewelry and antiques, but not necessarily objects of art. In this regard they contend that the description of certain items clearly shows that they are not jewelry and that since there is no evidence that they are antiques, these items are not covered by the policy. The challenged items include watches, bolos, belts, belt buckles, and dolls. At trial, Jenkins admitted that the dolls were not jewelry or antiques; however, the value of the disputed dolls is but $6.75. The only other disputed item which was mentioned at trial were the buckles, which Jenkins contends are Indian jewelry. Since there is evidence that the buckles were Indian jewelry, we conclude that the trial court resolved this fact question in favor of the insured. We modify, however, the trial court’s judgment by reducing it to the extent of the value of the dolls ($6.75) and, as so modified, affirm the judgment.

ROBERTSON, J., not participating.

      . We note that the supreme court has held that “actual cash value” is a limitation on the insurer’s liability, not a contractual measure of damages. The proper measure of damages is the actual loss sustained by the insured. Crisp v. Security Nat’l Ins. Co., 369 S.W.2d 326, 328 (Tex.1963). However, since no complaint is made on this point, we will treat the two terms as equivalent for the purposes of this opinion.


author: STEPHEN F. PRESLAR, Chief Justice.

text:
    Rene Tomas RAMIREZ, Appellant, v. Lydia Albesa RAMIREZ, Appellee.
    No. 6626.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 17, 1977.
    Rehearing Denied Sept. 21, 1977.
    Canales & Barrera, Charles L. Barrera, Alice, for appellant.
    James S. Bates, Edinburg, for appellee.
   OPINION

STEPHEN F. PRESLAR, Chief Justice.

This appeal involves the validity of a default judgment rendered prior to the appearance day of the Defendant. The judgment appealed from overruled the Defendant/Appellant’s Bill of Review. We reverse the judgment of the trial Court.

Suit for divorce was filed on October 9, 1975, and Appellant was served with citation on December 2, 1975. On December 12th, the Court heard the matter and granted judgment of divorce for the Appellee. Rule 101, Tex.R.Civ.P., provides that citation shall command the Defendant to appear by filing a written answer to the Plaintiff’s petition on or before 10:00 o’clock A.M. of the Monday next after the expiration of 20 days after the date of service thereof. Appellant’s appearance date, then, did not mature until December 22, 1975. Rule 239, Tex.R.Civ.P., determines when judgment by default may be had. By that rule, judgment by default can be had at any time after a defendant is required to answer if he has not previously filed an answer. It provides further that the citation with the officer’s return shall have been on file with the Clerk for the length of time required by Rule 107, Tex.R. Civ.P. The citation in this case had not been on file the required 10 days, under Rule 107, Tex.R.Civ.P.

It is held that a judgment entered before expiration of the minimum time for an answer to be filed is void. In Surety-Insurance Company of California v. State, 514 S.W.2d 454 (1974), the Texas Court of Criminal Appeals, in a bond forfeiture case which is tried under the Rules of Civil Procedure, held:

“The default judgment before us for review was entered on October 15th, fourteen days after service of citation. Answers, both denominated original answers, were filed on October 23rd and October 29th. A judgment entered before the expiration of the minimum time required by the Rules for an answer to be filed is void. Lamesa Rural High School District v. Speck et al., 253 S.W.2d 315 (Tex.Civ.App.1952, writ ref. n. r. e.); Andrus v. Andrus, 168 S.W.2d 891 (Tex.Civ.App.1943, no writ); cf. Wilson et al. v. Wilson et al., 378 S.W.2d 156 (Tex.Civ.App.1964, no writ).”

The default judgment of December 12, 1975, was void and the District Court erred in not granting Appellant’s Bill of Review. The judgment denying the Bill of Review is reversed and the cause is remanded to the trial Court.


author: McCLOUD, Chief Justice.

text:
    Linda Lee REED, Appellant, v. Robert WORMLEY et ux., Appellees.
    No. 5028.
    Court of Civil Appeals of Texas, Eastland.
    July 14, 1977.
    Rehearing Denied Aug. 11, 1977.

      John F. Campbell, Campbell & Davidson, Austin, for appellant.
    W. Chapman Byrd, Harriet S. Owen, Austin, for appellees.
   McCLOUD, Chief Justice.

Robert and Gertrude Wormley, who will sometimes be referred to as the Wormleys, sued Linda Reed and their son, Rodney, seeking termination of the parent-child relationship between Linda and Rodney, and their daughter. Linda Reed, the mother of the child, and Rodney Wormley, the father, were never married. Rodney filed a statement of paternity as authorized by Sections 13.01 and 13.02 of the Texas Family Code. The court rendered judgment, based on jury findings, terminating the parental rights of Linda and Rodney, and appointing Robert and Gertrude Wormley permanent managing conservators of the child. Only the mother, Linda Reed, has appealed. We affirm.

The jury found that Linda knowingly placed or knowingly allowed the child to remain in conditions or surroundings which endangered the physical or emotional well-being of the child; Linda failed to support the child in accordance with her ability dur- ■ ing a period of one year before January 22, 1976; it would be in the best interest of the child to terminate the parent-child relationship between Linda and the child; and, Robert and Gertrude Wormley should be appointed managing conservators of the child.

Robert and Gertrude Wormley filed their original petition on May 28, 1975. At that time, the child was approximately eight months old. On January 22, 1976, the father, Rodney Wormley, filed an answer to his parents’ petition and also a cross claim against Linda, alleging she failed to support the child in accordance with her ability during a period of one year ending within six months of the date he filed his cross claim. Robert and Gertrude Wormley at no time alleged failure to support as a reason for termination. They contend, however, the issue was tried by implied consent. Linda does not refute that contention and no issue has been raised regarding pleadings. Section 15.02 of the Texas Family Code provides in part:

“A petition requesting termination of the parent-child relationship with respect to a parent who is not the petitioner may be granted if the court finds that:
(1) the parent has:
(D) knowingly placed or knowingly allowed the child to remain in conditions or surroundings which endanger the physical or emotional well-being of the child; or
(E) engaged in conduct or knowingly placed the child with persons who engaged in conduct which endangers the physical or emotional well-being of the child; or
(F) failed to support the child in accordance with his ability during a period of one year ending within six months of the date of the filing of the petition; or
(K) . . . and in addition, the court further finds that
(2) termination is in the best interest of the child.”

The child was born on September 15, 1974. At that time, Linda was eighteen and Rodney twenty-one. They started dating in 1971 while attending high school. Rodney moved to Temple, Texas, where he attended college. Linda followed and they were living together in Temple when she became pregnant. Rodney married Gail Knox August 14, 1975. He and Gail testified, however, that he and Linda continued their affair until shortly before trial. Their relationship was frequently tumultuous with much arguing and fighting.

The mother first contends there is no evidence she failed to support the child in accordance with her ability during a period of one year before January 22, 1976. She argues the Wormleys have failed to meet the test announced in Wiley v. Spratlan, 543 S.W.2d 349 (Tex.1976). We disagree. In considering a no evidence point, we must review the evidence in its most favorable light, considering only the evidence and inferences which support the jury finding, and reject the evidence and inferences contrary to the finding. Martinez v. Delta Brands, Inc., 515 S.W.2d 263 (Tex.1974).

From October 1974, to April 1975, Linda received $86 per month from the State Welfare Department as Aid to Families with Dependent Children. During the twelve month period under consideration, Linda worked for four different employers. She worked about a month to a month and a half for each employer and received approximately $2.10 per hour. She also received some money from her grandfather and Rodney.

On June 11, 1975, the trial court entered a temporary order appointing the Travis County Child Welfare Unit temporary managing conservator of the child. An agreement was reached by the parties whereby the child was placed in possession of the Wormleys during the week and the mother had possession of the child on weekends. The mother was never ordered by the court to pay the Wormleys any money for support of the child during this time. There is also evidence that Linda offered, on one occasion after the case was filed, to give Gertrude Wormley some money for the child, and the offer was refused.

A highly controverted issue in this case is whether the mother or Gertrude Wormley had actual physical possession of the child following her birth. There is much evidence that the mother essentially left the child with Gertrude Wormley who cared for her except for short periods when the child was with the mother. Linda contends that Gertrude Wormley kept the child at times during the day while Linda worked or looked for a job, and the baby occasionally spent the night at the Wormleys. Gertrude Wormley testified that Linda did not provide food and clothing for the child. She stated that the mother had only “bought one or two items.” Robert Wormley testified that since the birth of the child, he knew of nothing that Linda had done financially for the child in the way of clothing, food, or medicine. This is some evidence to support the jury finding.

The mother also argues she was “excused” from providing support for the child after June 11, 1975, since the court did not order her to make any child support payments, and furthermore, she offered support which was refused. The evidence shows the child was properly cared for while in the Wormleys’ possession and there is no evidence they sought or wanted any financial help from Linda. We think Linda Reed’s duty to support her child after June 11, 1975, was excused, but the fact that the failure to support is excused is only “one of the factors to be considered in asserting the best interest of the child.” Holley v. Adams, 544 S.W.2d 367 (Tex.1976).

The mother also asserts the finding that she failed to support her child in accordance with her ability for a period of one year prior to January 22, 1976, is factually insufficient. When passing on a factually insufficient evidence point, we must, and do, consider all the evidence. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Linda testified that she spent the “AFDC” money on clothes and food for the child. The father, Rodney, testified that she spent the “welfare check” on clothes and food for the child and an occasional item for herself. He said she offered him some of the money, but he told her the money was supposed to be used for the child. Rodney testified he gave Linda some money and she bought a few things for the child, but she later told him she gave half of the money to a “young man” she was seeing at the time. Linda’s mother, Geraldine Grant, testified that most of the welfare money was spent for the baby. She stated she told Linda she should not spend so much on clothes since the baby was so tiny. Renee Williams, daughter of the Wormleys, testified that she provided most of the clothes the child had when she was very young. She said they were her daughter’s things. The testimony concerning who had actual physical possession of the child is directly controverted. The mother contends that Gertrude Wormley looked after the child during the day, but the child was usually with her at night. There is much testimony to the effect that from the child’s birth until the time of trial, the child was usually with the Wormleys, both day and night, except for occasional times when the mother would keep the child. In view of such highly controverted testimony, we cannot say the finding that the mother failed to support the child in accordance with her ability is factually insufficient.

Linda Reed also asserts there is no evidence, or alternatively, factually insufficient evidence, to support the finding she knowingly placed or knowingly allowed the child to remain in surroundings which endangered the physical or emotional well-being of the child. Rodney testified that Linda left the child alone in a parked car for about forty minutes late one night. He said the window was “cracked” so the child could get some fresh air and he thought this was improper because somebody could have easily unlocked the door and taken the child. Gertrude Wormley testified that on one occasion she went over to Linda’s apartment to pick the child up and she saw Linda going upstairs and the baby was in the apartment by herself. Rodney testified that on one occasion he went by Linda’s apartment at about 1:30 or 2:00 a. m. and discovered she was not there. After waiting for twenty or thirty minutes, she returned. They entered the apartment and the baby was in the apartment alone in the baby crib. Linda denied that she had ever left the child alone in a car or in her apartment. There is some evidence to support the jury’s finding and after considering all the evidence we cannot say the finding is factually insufficient. In re King’s Estate, supra.

Linda Reed next argues the trial court erred in overruling her motion for directed verdict because there is no evidence that it would be in the best interest of the child to terminate the parent-child relationship between the mother and the child. We overrule this point. The complaint being urged was not included in Linda Reed’s motion for directed verdict. Rule 268, T.R.C.P.

Linda further argues the finding that it would be in the best interest of the child to terminate the parent-child relationship is factually insufficient. We disagree. We have previously held that the mother was “excused” from providing financial support while the child was in the possession of the Wormleys under the direction of the Austin Child Welfare Unit. But as observed in Holley v. Adams, 544 S.W.2d 367 (Tex.1976), this is only one of the factors to be considered.

There is evidence that Linda Reed asked Gertrude Wormley and Renee Williams if either would like to keep the baby the first night she was brought from the hospital. They both told her they thought the baby should be with her mother. Several persons testified that within a few days after the child was brought from the hospital, Gertrude Wormley started taking care of her, both during the day and at night. The witnesses said the child spent the day with Gertrude at her beauty shop, and at night, she stayed at the Wormleys’ home. Linda, her mother, and other witnesses, contradict this evidence. Linda testified that Gertrude Wormley was more or less acting as a babysitter. There is evidence that on the occasions when Linda did keep the child, the child when returned to the Wormleys usually suffered severe diaper rash and had sores in her mouth and ears. Geraldine Grant said the diaper rash was not significant. Terri Wormley testified that within a few days after the child was brought from the hospital, Linda asked Gertrude Worm-ley to keep the child one night, which she did, and they did not see or hear from Linda again for about a week. Paulette Sauls said that while Gertrude Wormley was keeping the child at her beauty shop during the day, the mother would only come by about once a week or once every two weeks to see the child. On these occasions she stated that Linda did not pay much attention to the child. Dwight Cowan testified that Linda told him that he and his wife could have the child. There is considerable testimony that when the mother picked the child up on weekends, the child started crying. There is other testimony that the child was glad to see the mother. Gertrude Wormley testified that a few days prior to filing the petition for termination, Linda had picked the child up at the Wormleys and said she was never going to bring her back. She said Linda’s reason for picking the child up was because Rodney was seeing Gail. A few days later Linda brought the child to the Wormleys because she was very sick. The child was taken to the doctor. Gertrude Wormley testified that several days passed and Linda did not even bother to call and see how the baby was. At this point, the Wormleys decided to file the termination suit. Linda refutes this testimony.

Gertrude Wormley testified that Linda shows no motherly instincts. Ada Anderson, sister of Gertrude Wormley, testified that she was keeping Renee’s children and Linda brought the child in the house, put her down, and left without asking if Ada would keep the baby. On that occasion, Ada Anderson stated the child’s “whole little bottom was just raw. It was almost like a beef steak. There was powder caked on it and it was just a very cruel sort of thing.” Mrs. Anderson, who has a Masters Degree in Educational Psychology from the University of Texas, stated she observed Linda several times with the child and she shows “absolutely no emotional reaction” to the child. There is none of the normal “cuddling, smiling or talking.” She said the child has an “apparent fear” of Linda and pulls away from her. Annie Robertson testified she saw no “negative reaction or repulsion” between Linda and the child. Pamela Conlan, an employee of the Travis County Child Welfare Unit, observed the child and mother on one occasion and she thought the child was glad to see her mother. She also testified she observed a warm and affectionate relationship between the child and Gertrude Wormley. Other parties testified they observed a warm and loving relationship between Linda and the child.

Robert Wormley has been a licensed real estate broker for about twenty-three years. He and his wife’s combined annual income is approximately $30,000 per year. He stated they plan to establish an educational trust for the child and see that she has a wholesome environment in which to live. The Wormley home is clean and attractive. The child’s room is colorful and orderly.

There is evidence Linda has threatened suicide on several occasions. Also, she has threatened at various times to kill Rodney, Robert and Gertrude Wormley. Gertrude testified that Linda last threatened to kill her during a recess while the termination trial was in progress. Linda testified she never intended to commit suicide and she only made the threats because the Worm-leys would not let her have her child.

Linda’s work history is very spasmodic. She has trouble getting and retaining employment. At the time of trial, May 1976, she had worked about one week at the Chess King, and this was the only job she had had in 1976, except just “doing things” for her grandfather. She has completed the tenth grade, but stated she was planning to take a GED test. Her future plans were indefinite. On deposition taken a few days before trial, she stated she planned to go to California, either Los Angeles or Oakland. She said an aunt in Los Angeles would keep the child. Her mother had recently moved from Austin to Oakland. At trial, she stated she would probably remain in Austin for sometime before going to California.

There is evidence that when Linda had possession of the child she did not properly care for her physical needs. There is evidence that her main concern was her relationship with Rodney, rather than her relationship with the child. Her explanation for leaving the infant unattended in an apartment and automobile is that it did not occur. The jury could either accept or reject her explanation. There is substantial evidence in the record to support the Wormleys’ contention that they have essentially taken care of the child since her birth. The evidence is uncontradicted that a warm and loving relationship exists between the child and the Wormleys. There is no assertion that the child has not been properly cared for while in the Wormleys’ possession. Their home appears to be stable. The Wormleys are active in church and community affairs. They have shown great love and compassion for their granddaughter. The record indicates they possess the maturity, intelligence, character, and concern for the child, which is essential for her healthy emotional and physical development.

This trial lasted four days. The jury had ample opportunity to weigh and consider the testimony of the many witnesses. Much of the testimony was contradictory. We hold that the evidence is not factually insufficient to support the jury’s finding that it would be in the best interest of the child to terminate the parental rights of the mother, Linda Reed, and appoint the child’s grandparents, Robert and Gertrude Worm-ley, managing conservators.

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