text:
    HORNBLOWER & WEEKS-HEMPHILL, NOYES, INC., Appellants, v. Virgil CRANE, II, Appellee.
    No. 1377.
    Court of Civil Appeals of Texas, Corpus Christi.
    June 13, 1979.
    Rehearing Denied June 28, 1979.

      Scott T. Cook, Larry G. Hyden, Harris, Cook, Browning & Barker, Corpus Christi, for appellants.
    C. Edwin Prichard, Jr., Prichard, Peeler, Cartwright & Hall, Corpus Christi, for ap-pellee.
   OPINION

NYE, Chief Justice.

This is a suit brought by a nation-wide stock brokerage firm, Hornblower & Weeks-Hemphill, Noyes, Inc. (Hornblower), to recover moneys allegedly due from one of its customers, appellee, Virgil Crane, II (Crane). Crane answered, pleading limitations among other things, and filed a counterclaim for recovery of $6,285.46, the sum Hornblower had withdrawn from Crane’s stock account as an “offset.” After a jury trial, the trial court denied Hornblower’s motion to disregard answers to certain special issues and to enter judgment for Hornblower, but instead granted Crane’s motion to disregard one special issue and entered judgment on the verdict for Crane. Hornblower appeals. Crane presents a single cross-point attacking the trial court’s take nothing judgment on his counterclaim.

The material facts in this case are uncon-troverted. The legal effect of these material facts, however, as well as the nature of the case, are in dispute. Hornblower deals in the sale and purchase of stocks and other securities. The record indicates that Crane executed the usual “Customer’s Agreement” on October 17, 1973, when he started doing business with Hornblower through a broker by the name of Sutton.

The controversy involved in this suit arose from transactions involving two corporations bearing similar names. They are The International Mining Company, Inc., a Nevada corporation, and International Mining Corporation, a Delaware corporation. In August of 1974, Crane discovered a stock certificate among his deceased father’s papers which showed 2500 shares of The International Mining Company, Inc., to be standing in Crane’s name. Crane telephoned Sutton to inform him of the discovery and to determine the value of the stock, if any. Crane read to Sutton the name of the company as it appeared on the stock certificate (The International Mining Company, Inc.). After their telephone conversation, Sutton checked various lists of stocks and indices of stocks and determined there was only one stock with the name “International Mining” that was being traded; it was “International Mining Corporation.” Mr. Sutton then telephoned Crane to relate that “International Mining” stock was listed on the New York Stock Exchange and was trading at approximately $16.00 per share.

On August 15, 1974, Crane instructed Sutton to sell 1000 shares of The International Mining Company, Inc. A confirmation slip was sent to Crane showing the sale of 1000 shares of “Interntl Mining Corp.” On August 20, 1974, Sutton called Crane to report that the price of the stock was falling rapidly and suggested that Crane sell the remaining 1500 shares. Crane took his advice and instructed Sutton to sell the remaining shares. Thereafter, Crane received a confirmation slip similar to the first one. Four days after the second sale, Crane delivered the original stock certificate to Hornblower’s Corpus Christi office. The certificate was received by the cashier, whose job it was to verify that the certificate received was of the same stock as that shown on the confirmation slips. The cashier typed out a “receive unit” which showed that Hornblower had received from Crane 2500 shares of The International Mining Company, Inc. Shortly thereafter, Hornblower deducted its commissions and charges from the proceeds of the sales and credited the balance of $34,126.80 to Crane’s account.

It was not until over two years later, in September of 1976, that Hornblower discovered that Crane had delivered 2500 shares of The International Mining Company, Inc. to its office and not 2500 shares of International Mining Corporation. During the interim period, unknown to Crane, the stock certificate which Crane had delivered to Hornblower’s Corpus Christi office was received by its New York office on August 26, 1974. The New York office sent the stock certificate to the “transfer agent” for International Mining Corporation on August 28, 1974. The certificate was returned to the transfer department of Hornblower’s New York office on September 9,1974, with the notation “no agent — not listed in book.” On September 10, 1974, the certificate was given to Hornblower’s reorganization department as a non-transferrable stock. On February 6, 1975, the reorganization department sent the certificate out for transfer again. Thereafter, on February 11, 1975, the certificate was returned with the notation “no agent at present, charter revoked March 4, 1946.” The certificate was again returned to the reorganization department as a non-transferrable stock on February 13, 1975. All during this two year period of time, Hornblower did not discover that it had sold the wrong stock.

From the time the money from the proceeds of the sale of the stock had been credited to Crane’s account (August 26, 1974) until mid-September of 1976, Crane actively traded in other stocks. His account at Hornblower was debited and credited as these transactions occurred. In September of 1976, Hornblower contacted Crane to report to him that it had discovered that it had not, in fact, sold the 2500 shares of The International Mining Company, Inc., but, had instead sold 2500 shares of International Mining Corporation; that the stock of International Mining Company, Inc. was essentially worthless. Hornblower, then on its own initiative, entered the market to correct its error by purchasing 2500 shares of International Mining Corporation stock for a sum of $33,890.50. When Crane refused to pay Hornblower the cost of the replacement stock ($33,890.50), Hornblower withdrew the balance in Crane’s stock account ($6,285.46) as an “offset” against the $33,890.50 which it had just paid to purchase the International Mining Corporation stock. It then filed suit for the difference of $27,605.04 against Crane.

Hornblower contends in essence: 1) that pursuant to the “Customer’s Agreement” between the parties, Crane appointed Hornblower to act as his “agent and broker” in the purchase and sale of securities and that all transactions under the agreement would be handled in accordance with and subject to all of the existing applicable laws, rules and regulations, customs and usages of the exchange or market and its clearinghouse; 2) that Crane agreed in the “Customer’s Agreement” that he would at all times, upon demand, immediately make payment of the entire amount of any obligation due Hornblower and expressly authorized Hornblower, as his agent, to buy in any securities of which Crane’s account was short for the purpose of meeting the obligations of the various exchanges on which security transactions were handled; 3) that Hornblower received originally from Crane an order to sell 2500 shares of International Mining and that Hornblower had, in fact, sold on behalf of Crane, International Mining Corporation stock; 4) that Crane had delivered to Hornblower 2500 shares of The International Mining Company, Inc., and Hornblower did not discover the mistake until September of 1976; 5) that after such discovery, Hornblower in accordance with its obligations and the rules of the exchange, purchased 2500 shares of International Mining Corporation and then requested Crane, (pursuant to the terms of the customer’s agreement), to return $33,890.50, the amount Hornblower had to pay to purchase the same number of shares in the open market; and 6) that upon Crane’s refusal, Hornblower did offset $6,285.46 from Crane’s account that had been maintained with Hornblower. In accordance with these allegations, Hornblower prayed for judgment against Crane in the amount of $33,890.50 plus prejudgment interest, less the sum of $6,285.46.

Crane specifically pled the defense of limitations (Tex.Rev.Civ.Stat.Ann. art. 5526 (1961)); laches, estoppel and failure of Hornblower to mitigate its damages. At the same time Crane filed a counterclaim seeking to recover the sum of $6,285.46 which Hornblower had seized from Crane’s account.

In response to special issues, the jury found that: 1) Crane’s receipt of confirmation slips from Hornblower did not constitute notice to Crane that Hornblower had not sold the same stock Crane owned in the International Mining Company, Inc.; 2) Crane, had he had such notice, in exercise of reasonable care and diligence, would have told Hornblower he did not own the stock that was sold; 3) Hornblower, in executing the sale orders by selling 2500 shares of International Mining Corporation for Crane’s account, acted in good faith; 4) Crane did not authorize Hornblower to sell International Mining Corporation stock for him; 5) the delivery of the stock certificate of International Mining Company, Inc., by Crane on August 21, 1974, constituted notice to Hornblower that Hornblower had not sold the stock which was delivered to them; 6) having such notice, in the exercise of reasonable care and diligence, Hornblower would have, at that time, purchased 2500 shares of International Mining Corporation and debited Crane’s account.

Hornblower filed its motion to disregard the answers to special issues numbers one, two, four, five and six and to enter judgment for Hornblower, or in the alternative, to enter judgment on the verdict in favor of Hornblower. Crane filed a motion to disregard the jury’s answer to special issue number three and for judgment on the verdict. The trial court denied Hornblower’s motion and granted Crane’s motion. The court then disregarded the answer to special issue number three as being immaterial in determining the rights of the parties and entered judgment that Hornblower take nothing. The trial court also entered judgment that Crane take nothing on its counterclaim against Hornblower for recovery of the $6,285.46.

Hornblower presents three points of error which are grouped together for argument purposes. Hornblower’s basic appellate premise is that the jury’s answers to special issues numbers one, two, four, five and six are all immaterial and cannot form the basis of a judgment because the undisputed evidence shows that it is entitled to judgment as a matter of law on the contract. Hornblower first contends that the trial court, in order to render the judgment that it did, must have found that Hornblower’s cause of action against Crane was barred by the two year statute of limitations. Hornblower argues that this is error because its cause of action against Crane is governed by the four year statute of limitations.

Tex.Rev.Civ.Stat.Ann. art. 5527 (1961) provides, in relevant part, as follows:

“There shall be commenced and prosecuted within four years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description:
1. Actions for debt where the indebtedness is evidenced by or founded upon any contract in writing.”

Hornblower contends that Crane’s indebtedness or liability falls within the purview of this statute. Crane, on the other hand, contends that Article 5527 does not govern Hornblower’s cause of action because Crane’s liability is outside of the written customer’s agreement because Hornblower acted without Crane’s authority when it sold the wrong stock not authorized by Crane.

The portion of the contract upon which Hornblower relies provides in relevant parts as follows:

“In consideration of your acting as brokers for the undersigned in the purchase and/or sale of securities, commodities, and/or other property (hereinafter collectively referred to as securities), the undersigned [Crane] hereby consents and agrees:
* * * * * *
4. The undersigned [Crane] will at all times maintain with you [Hornblower] securities (acceptable to you) of such value and/or monies, over and above the amount of the aggregate indebtedness of the undersigned to you as you may require and upon demand will immediately make payment of the entire amount (or such part as you may demand) of the obligations of the undersigned to you. Should the undersigned fail to make any payment to you when due or to keep the margin in any account of the undersigned with you up to your current requirements you may from time to time sell any or all such securities or buy in any securities of which any such account may' be short. Any such sale or purchase may be made at your discretion on the exchange or market where such business is then transacted or at public auction or private sale without prior notice to the undersigned or advertisement or tender or demand of any kind upon the undersigned, and any such notice, advertisement, tender or demand being hereby expressly waived by the undersigned and the undersigned shall remain liable for any deficiency.

Hornblower argues that the above quoted portion of the Customer’s Agreement obligated Crane to repay Hornblower within the meaning of Article 5527 upon two distinct grounds: 1) The customer’s agreement creates a broker/principal relationship; and 2) Paragraph 4 of the Customer’s Agreement provides that Hornblower can buy any securities, without prior notice or demand upon Crane, and that Crane is liable for any deficiency in his account.

In determining whether or not the obligation sought to be enforced is a “contract in writing” within the meaning of the limitation statute, the Texas Supreme Court, in International Printing Pressmen and Assistants’ Union of North America v. Smith, 145 Tex. 399, 198 S.W.2d 729, 736 (Tex.Sup.1946), stated:

“It has been held in this State that ‘in order for an action to be one for an indebtedness evidenced by or founded upon a contract in writing, as referred to in the above quoted statute * * * the written instrument relied upon must itself contain a contract to do the things for the nonperformance of which the action is brought.’ (Citing authority). However, it is not indispensable that the written instrument relied upon contain an express promise to do the things for the nonperformance of which the action has brought. It is sufficient if the obligation or liability grows out of a written instrument, not remotely but immediately, or if the written instrument acknowledges a state of facts from which, by fair implication, the obligation or liability arises. And while parol evidence is not admissible to establish the promise, it is admissible to show performance on the part of the plaintiff and a breach on the part of the defendant.”

Crane’s promises, as evidenced by the contract in question, were expressly made in consideration of Hornblower acting on behalf of Crane as his broker. Hornblower admits that the parties intended for Hornblower to act as an agent for Crane in buying and selling securities pursuant to Crane’s express directions. We are of the opinion that the “Customer’s Agreement,” upon which Hornblower relies, creates an express obligation on the part of a customer only where Hornblower is acting within the express (or implied) authority from its customer. The contract does not contain á provision authorizing Hornblower to act on behalf of Crane to correct its acts which are completed in contravention of Crane’s authority or created through its own mistake, nor can we imply such a provision from the express terms of the contract. Where Hornblower acts without authority from its customer or acts on its own, and no principles of agency law, such as ratification, otherwise bind the customer, the terms of the subject “Customer’s Agreement” do not create an express or implied obligation on the part of the customer nor an express or implied right on the part of Hornblower to invoke the provisions of paragraph 4 of the contract.

In situations as the one before us, where Hornblower sold the wrong stock by mistake and thereafter credited the proceeds of the sale to Crane’s account, equitable principles, such as the recovery of money paid under mistake, unjust enrichment, etc., provide Hornblower with a cause of action to recover the money mistakenly paid to Crane’s account. See e. g., 44 Tex. Jur.2d, Payment, § 77, Mistake of Fact (1963). In such a situation, however, the two year statute of limitation prescribes a period for actions on a debt where the indebtedness is not evidenced by a contract in writing. See Hull v. Freedman, 383 S.W.2d 236, 238-239 (Tex.Civ.App.—Fort Worth 1964, writ ref’d n. r. e.). See also Coastal States Gas Producing Co. v. Hamilton, 553 S.W.2d 659 (Tex.Civ.App.—El Paso 1977, no writ); Charles v. Charles, 478 S.W.2d 133 (Tex.Civ.App.—Dallas 1972, writ ref’d n. r. e.).

In this case, the undisputed evidence and the jury’s answer to special issue number four established that Crane did not breach the Customer’s Agreement in question. The undisputed evidence and the jury’s answer to special issue number four above establish that Hornblower failed to follow the directions of Crane and that it sold the wrong stock through its own mistake. This mistake was discoverable by Hornblower, by the exercise of reasonable diligence, many times prior to its actual discovery in September of 1976. The jury found that Crane’s delivery of the stock certificate of The International Mining Company, Inc. on August 21, 1974, prior to the time when any money had been credited to Crane’s account by Hornblower, constituted notice to Hornblower that it had not sold the same stock which Crane delivered to Hornblower’s employee and agent. Hornblower’s cause of action to recover the sums mistakenly paid to Crane accrued at the time Hornblower credited the proceeds of the sales to Crane’s account. It was not until December 20, 1976, that Hornblower filed its first original petition which alleged a breach of the customer’s agreement by Crane as a basis for its recovery. More than two years had expired from the time Hornblower’s cause of action accrued until suit was filed. Crane, in defense of Hornblower’s suit, affirmatively pled the statute of limitations. The trial court correctly held that Hornblower should take nothing against Crane.

Hornblower vigorously contends here that the trial court erred because Crane ratified Hornblower’s unauthorized sale as a matter of law. Hornblower argues that the fact that Crane did not authorize Hornblower to sell 2500 shares of International Mining Corporation stock is immaterial and of no consequence when the following “un-controverted facts” are considered: “(1) Hornblower sold the 2,500 shares for the benefit of and on behalf of Crane; (2) Crane received the benefit of that sale conducted on his behalf by his broker or agent, Hornblower; and (3) upon being told that the wrong stock had been sold and upon being requested to pay the value of the stock sold, Crane refused to do so and, instead, elected to retain the benefits he had derived from the sale by his agent, Hornblower.” Hornblower also contends that the confirmation slips Crane received from Hornblower, (each of which confirmed the sale of International Mining Corporation stock) as well as Crane’s letter dated October 11, 1974, (which acknowledged the sale of the stock) are conclusive evidence that Crane ratified Hornblower’s errors.

Hornblower’s “uncontroverted” fact number one above actually is Hornblower’s own conclusion. The jury’s finding that Hornblower acted without Crane’s authorization is supported by ample evidence. Therefore, Hornblower only purported to act on behalf of Crane when it sold the stock. The primary problem with Hornblower’s argument is, however, that there are no undisputed facts or jury findings to support its claim that Crane ratified, as a matter of law, the unauthorized acts of Hornblower prior to the time the two year statute of limitations had run.

We recognize the general rule, cited by Hornblower, that a principal who, with knowledge of the material facts, retains benefits of a contract made in his behalf by an unauthorized agent cannot repudiate that part of the contract which is unsatisfactory to him. Having knowledge of the facts and retaining the benefits, he is considered as having ratified the contract in its entirety, and is so bound. See Condor Petroleum Co. v. Greene, 164 S.W.2d 713, 721—22 (Tex.Civ.App.—Eastland 1942, writ ref’d w. o. m.), and authorities cited therein. Hornblower’s own definition of ratification is his downfall. A party must have knowledge of all of the material facts in order to ratify. The virtually undisputed evidence in this case (as well as the jury findings) is to the effect that Crane did not have knowledge that Hornblower sold the wrong stock until September of 1976 when Hornblower informed Crane of the mistake. Hornblower’s only requested issue in this regard was special issue number one in which the jury found against Hornblower. The jury found that Crane’s receipt of confirmation slips from Hornblower that Hornblower had sold 2500 shares of International Mining Corporation for his account did not constitute notice Hornblower had not sold the same stock he owned in The International Mining Company, Inc.

Crane’s refusal to reimburse Hornblower for the expense it incurred in purchasing 2500 shares of International Mining Corporation stock to replace those mistakenly sold does not constitute such ratification that would defeat the statute of limitations which had already run on Hornblower’s cause of action. Crane’s refusal is consistent with his decision to assert the statute of limitations defense and not to ratify the unauthorized transaction or in some way to acknowledge the existence of a debt otherwise barred by limitations. Hornblower presents no argument or authority to support a theory which would take this case outside the operation of Crane’s limitation defense. We, therefore, conclude that the trial court properly entered a take nothing judgment as to Hornblower’s cause of action on the basis that the two year statute of limitations had run prior to the time Hornblower filed its original petition. This disposition of the case renders it unnecessary to consider Hornblower’s contention that it is entitled to prejudgment interest, or interest as damages as a matter of law. Hornblower’s points of error one through three are overruled.

Crane’s cross-point of error is that the trial court erred in refusing to recognize Crane’s counterclaim against Hornblower. In August of 1974, Hornblower credited Crane’s stock account with $34,126.80 from the proceeds of the erroneous sale of International Mining Corporation stock. During the next two years, Crane completed various transactions in which he withdrew and deposited money into the account. In September of 1976, when Hornblower discovered its error, Crane had, at that time, a credit balance of $6,285.46 in this stock account. Upon discovery of its error, Hornblower demanded that Crane either produce 2500 shares of International Mining Corporation stock or deposit the sum of money which would be required to purchase such shares of stock on the open market. Crane refused. Hornblower then re-entered the market, purchased 2500 shares of International Mining Corporation stock for $33,-890.50, took possession of the money remaining in Crane’s account ($6,285.46) and applied it as an offset against the newly acquired stock.

At the time Hornblower appropriated the balance remaining in Crane’s stock account as an offset, the two year statute of limitations had run on Hornblower’s cause of action against Crane. In essence, Hornblower’s pleadings requested the trial court to validate its action in appropriating, as a set-off, the balance remaining in Crane’s stock account even though such appropriation occurred after limitations barred the claim Hornblower sought to offset. In support of its right to claim such an set-off, Hornblower relied upon paragraph 4 of the Customer’s Agreement.

It is generally stated that a set-off is proper only where the demands are mutual, between the same parties and in the same capacity or right. Masterson v. Goodlett, 46 Tex. 402, 407 (1877); Greathouse v. Greathouse, 60 Tex. 597, 598 (1884); Brook Mays Organ Co., Inc. v. Sundock, 551 S.W.2d 160, 166 (Tex.Civ.App.—Waco 1977, writ ref’d n. r. e.); Thompson v. Prince, 126 S.W.2d 574, 576 (Tex.Civ.App.—Waco 1939, writ ref’d). In this case there are no separate, yet mutual, demands. The only true controversy is whether or not Hornblower is entitled to recover the money it expended to procure stock to replace the stock sold in contravention of Crane’s instructions. While Crane may be morally obligated to Hornblower, Hornblower’s remedy to enforce such obligation is barred by limitations. Although limitation statutes do not affect the substantive rights of the parties, they do bar the remedy when enforcement of such rights is sought. City of Dallas v. Etheridge, 253 S.W.2d 640 (Tex.Sup.1953); Sam Bassett Lumber Co. v. City of Houston, 198 S.W.2d 879 (Tex.Sup.1947). We are of the opinion that Hornblower cannot rely on the provisions of paragraph 4 to validate its action of appropriating the remaining balance in Crane’s stock account when the very obligations Hornblower sought to offset were barred by the statute of limitations. The trial court did err in refusing to allow Crane’s counterclaim.

Hornblower contends, however, that if Hornblower’s valid cause of action was barred by limitations, its cause of action was good as against Crane’s counterclaim pursuant to Tex.Rev.Civ.Stat.Ann. art. 5539c (Supp.1979), which provides as follows:

“In the event a pleading asserting a cause of action is filed under circumstances where at the date when answer thereto is required by law a counterclaim or cross claim would otherwise be barred by the applicable statute of limitation, then the party so answering may, within 30 days following such answer date file a counterclaim or cross claim in such cause and the period of limitation is hereby extended for such period of time provided that the counterclaim or cross claim arises out of the same transaction or occurrence that is the subject matter of the opposing party’s claim.”

Hornblower acknowledges that its cause of action was brought as the original action in this case. Hornblower insists, however, that Article 5539c should not preclude its retention of the “set off,” because Article 5539c extends the period of limitations for Hornblower’s offset. Hornblower argues that had Crane brought his counterclaim, as an original action, then Hornblower’s action, (which would have been brought as a counterclaim), would have been protected by Article 5539c. Similar contentions have been considered and rejected by our Supreme Court. See Hobbs Trailers v. J. T. Arnett Grain Co., Inc., 560 S.W.2d 85 (Tex.Sup.1978). Crane’s cross-point is sustained.

The trial court’s take nothing judgment as to Crane against Hornblower is reversed and judgment is here rendered that Crane recover $6,285.46 with interest thereon from the date of September 28, 1976, at the rate of 6% to the date of the trial court’s judgment and 9% thereafter. The remainder of the trial court’s judgment is affirmed.

AFFIRMED IN PART and REVERSED AND RENDERED IN PART.


source: Caselaw Access Project

author: BISSETT, Justice.

license: Public Domain

text:
    Roberto FRANCO, Individually, and as Next Friend of Lonnie M. Franco, et al., Appellants, v. BURTEX CONSTRUCTORS, INCORPORATED, et al., Appellees.
    No. 1426.
    Court of Civil Appeals of Texas, Corpus Christi.
    June 13, 1979.
    Rehearing Denied June 27, 1979.

      F. I. Gandy, Jr., Corpus Christi, for appellants.
    William A. Abernethy, Meredith, Donnell & Edmonds, Corpus Christi, for appellees.
   OPINION

BISSETT, Justice.

In this rear end collision ease involving an appeal from a take nothing judgment in favor of Burtex Constructors, Inc., and Manuel Z. Arambula, defendants, the only issue is whether the trial court committed reversible error in refusing to submit some of plaintiff’s requested issues to the jury. Finding no reversible error, we affirm.

The present controversy grew out of a fatal rear end collision between a dump truck owned by defendant Burtex, which was being driven by defendant Arambula at the time of the accident, and a passenger car being driven by plaintiff Franco. Both vehicles were proceeding north on Interstate Highway 37 (I.H. 37), a four lane controlled access highway, between Corpus Christi, Texas, and Calallen, Texas, on the night of January 14, 1976, when plaintiff’s car rear-ended defendant’s truck. The truck had just entered the outside right lane of the highway from a stationary position it had held while being repaired after a breakdown occurring earlier the same day. A short time after re-entering the extreme right lane, the truck was hit from behind by plaintiff’s car. Plaintiff’s wife and his brother-in-law were killed in the collision.

Plaintiff’s theory of liability centered around allegations of negligence and negligence per se on the part of defendants in executing an unsafe entry upon the highway and creating a distraction which caused the plaintiff, momentarily, to take his eyes from the road. The defendants answered with a general denial, allegations of contributory negligence and the defense of excuse to any alleged statutory violations.

The details of the accident were as follows: Arambula had been proceeding north on I.H. 37 earlier the day of the collision when the dump truck he was driving broke down. He parked the truck about four feet off the right hand shoulder of I.H. 37. The truck, after being parked, was facing north. Arambula then went for help. Later, he and two fellow employees returned to the scene in two separate pickup trucks. They began repairs on the dump truck. It was after dark when the mechanics completed the repairs. At this time, their two pickup trucks were parked in the area between the disabled dump truck and a service road to the east of I.H. 37. Plaintiff testified that at least one of the pickup trucks was parked with its headlights on and facing south. This was disputed by one of the mechanics, who said that both pickup trucks, while parked, were facing north.

According, to plaintiff, he was proceeding north in the outside right-hand lane of I.H. 37 when he became distracted by the headlights of a southward-facing pickup truck. Taking his eyes from the road, he proceeded past the pickup truck until his wife screamed, when he rear-ended defendant’s dump truck. The collision occurred only seconds after Arambula had entered the roadway from his parked position.

The trial judge, insofar as this appeal is concerned, submitted the following special issues:

“SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence that Manuel Arambula moved into the righthand lane of the highway when a person using ordinary care would not have done so?
Answer: ‘We do’ or ‘We do not’
Answer: We do not”
% * * * ⅜ *
“SPECIAL ISSUE NO. 8
Do you find that one of the Burtex Construction employees was showing lights off to the side of the highway? Answer: ‘We do’ or ‘We do not’
Answer: We do
SPECIAL ISSUE NO. 9
Do you find that such act inquired about in Issue No. 8 was negligence? Answer: ‘We do’ or ‘We do not’
Answer: We do not

Plaintiff requested several issues which the court refused to submit. For purposes of this appeal, plaintiff’s requested issues can be grouped into four separate clusters. Each cluster inquired whether plaintiff committed a particular act which was a proximate cause of the accident. Only the first cluster inquired whether the alleged act was negligence. All negligence and proximate causation issues were conditioned upon an affirmative answer to the “act” issue of each cluster. Requested Special Issues 1, 7, 9 and 11 were the “act” issues.

The submission of special issues in Texas is controlled by Rule 279, T.R.C.P., which provides in relevant part:

“When the court submits a case upon special issues, he shall submit the controlling issues made by the written pleadings and the evidence.”
* * * * ⅜: *
“Where the court has fairly submitted the controlling issues raised by such pleading and the evidence, the case shall not be reversed because of the failure to submit other and various phases or different shades of the same issue.”

Thus, the crux of this appeal is whether the trial court, by its refusal to submit plaintiff’s requested special issues, failed to submit fairly and substantially the questions raised by the pleadings and evidence. The answer to this question presented depends upon whether the requested special issues were but mere phases and shades of the submitted issues. Braugh v. Phillips, 557 S.W.2d 155 (Tex.Civ.App.—Corpus Christi 1977, writ ref’d n. r. e.). We hold that they were.

Plaintiff’s requested Special Issue No. 1 reads:

“Do you find from a preponderance of the evidence that Manuel Z. Arambula failed to yield the right-of-way to the vehicle driven by Roberto Franco at the time and place in question?”
In connection with the foregoing Issue, right-of-way is defined as the right to the immediate use of the roadway. A vehicle driving on the expressway has the right of way over a vehicle entering the expressway at any place other than a designated entrance.
Answer: ‘We do’ or ‘We do not’
Answer: _”

Right-of-way has been defined as yielding in such time as a person of ordinary care and prudence would have yielded under the same or similar circumstances. Dallas Transit Co. v. Tolbert, 337 S.W.2d 617 (Tex.Civ.App.—San Antonio 1960, writ ref’d n. r. e.). Submitted issue No. 1 asked whether Arambula moved into the right hand lane of the highway when a person using ordinary care would not have done so. Hence, plaintiff’s requested right-of-way issue was but a shade of submitted issue No. 1.

Requested Special Issue No. 7 asked:
“Do you find that the Defendant’s driver started his vehicle and entered the roadway when such movement could not be made with safety?
You are instructed that Article 6701(d) [6701d] of the Revised Civil Statutes, Section 67, provides, ‘No person shall start a vehicle which is stopped, standing or parked unless and until such movement can be made with safety.’ Section 68 of the same article states that, ‘No person shall otherwise turn a vehicle from a direct course or move right or left on a roadway unless and until such movement can be made with safety.’ By such statutes, the legislature established a standard of care applicable to the whole public, including the Defendant driver, and his failure to comply with such statutes was negligence.
Answer: ‘We do’ or ‘We do not’
Answer: _”

Requested special issue No. 7 was also a mere shade of submitted issue No. 1. Such requested issue incorporated Tex.Rev. Civ.Stat.Ann. art. 6701d, §§ 67, 68(a) therein by virtue of the accompanying instruction. Section 68(a), however, prescribes only that the driver must exercise ordinary care. Impson v. Structural Metals, Inc., 487 S.W.2d 694 (Tex.Sup.1972); Garcia v. Caletka, 486 S.W.2d 880 (Tex.Civ.App.—Corpus Christi 1972, writ ref’d n. r. e.). By the same token, section 67 of the statute also merely prescribes ordinary care on the part of the driving public. It follows that requested issue No. 7 asked nothing more than what was asked by submitted issue No. 1.

Requested Special Issue No. 9 reads:
“Do you find from the preponderance of the evidence that the Defendant’s driver entered Interstate 37 at a place other than a designated entrance to said roadway?
Answer: ‘We do’ or ‘We do not’
Answer: _”
“You are instructed that in answering the foregoing issue that in Article 6701(d) [6701d], Section 63, provides, ‘No person shall drive a vehicle on, to or from any limited access or controlled access highway except at such entrances and exits as were established by public authority.’ By such statute, the legislature established a standard of care applicable to the whole public, including the Defendant’s driver, and his failure to comply with such statute was negligence.”

Plaintiff did not request a negligence finding in conjunction with the submission of the above issue. In any negligence per se case, plaintiff has the burden of establishing an unexcused violation of a statute. Southern Pacific Co. v. Castro, 493 S.W.2d 491 (Tex.Sup.1973). If, during the course of trial, any evidence of excuse arises, plaintiff must seek and obtain a finding that the statutory violation was negligent as measured by common law standards. Id. In the case at bar, some evidence of excuse was produced at trial because defendant’s dump truck was forced to re-enter the highway at the point it did because of an earlier breakdown. Hence, requested issue No. 9 and its accompanying proximate cause issue (No. 10), if answered affirmatively, would not have supported a judgment for plaintiff, and the trial court’s refusal to submit these issues did not constitute reversible error.

Furthermore, plaintiff’s theory that it would have been unlawful for Arambula to re-enter the highway from anywhere except a designated entrance is totally without merit.

Requested Special Issue No. 11 inquired:
“Do you find that the Defendant’s employees caused the pickup to be parked on the North side of Interstate Highway 37 with its lights facing East toward the oncoming traffic?
You are instructed that Article 6701(d), 6701(d) [6701d], Section 96 provides, ‘Except when otherwise provided by local ordinance every vehicle stopped or parked on a one-way roadway shall be stopped or parked parallel to the curb or edge of the roadway, in the direction of the authorized traffic movement.’ By such statute the legislature established a standard of care applicable to the whole public, including the Defendant’s employees and their failure to comply with such statutes was negligence.
Answer: ‘We do’ or ‘We do not’
Answer: _”

The issue concerning a distraction, if any, caused by the headlights on one of the Burtex pickup trucks was covered substantially by the submission of submitted issues No. 8 and 9. The jury, in its answer to issue No. 8 found that one of the Burtex employees at the time in question “was showing lights off to the side of the highway,” but failed to find that such act was negligence (No. 9). Furthermore, Tex.Rev. Civ.Stat.Ann. article 6701d, § 96 (which does not expressly mention headlights) applies only to vehicles parked on “roadways.” The term “roadway” is defined by Tex.Rev. Civ.Stat.Ann. article 6701d, § 13(c) in such a way as to exclude shoulders or berms. There was no showing that either of defendant’s pickup trucks was parked on a “roadway” as defined by section 13(c).

The trial court fairly submitted the controlling issues raised by the pleadings and the evidence.

We have carefully considered all points of error which have been brought forward. They are overruled.

AFFIRMED.


text:
    Joel RAMON et al., Appellants, v. Arturo CHAVIRA et al., Appellees.
    No. 1455.
    Court of Civil Appeals of Texas, Corpus Christi.
    July 26, 1979.
    Ronald B. Layer, Rankin & Kern, Inc., McAllen, for appellants.
    Walter G. Weaver, Donna, for appellees.
   OPINION

BISSETT, Justice.

Appellants have filed a motion to reverse the judgment of the trial court and remand the case due to their inability to obtain a complete statement of facts. A partial statement of facts has been filed. Appellants state, however, that testimony and court rulings adduced at a hearing on their amended motion for new trial are essential to their appeal, a portion of which concerns alleged jury misconduct. The former official court reporter was present and reported the hearing.

We first observe that the record was due to be filed in this Court on December 11, 1978. After three extensions of time were granted, the partial statement of facts was prepared by March 16 and subsequently filed on March 29, 1979. Further time was requested and granted for supplementation of the statement of facts in order that two exhibits and the transcription of the motion for new trial hearing could be obtained from the court reporter. The exhibits were timely located and filed, but the court reporter reportedly lost his notes of this particular hearing. No back-up system (such as a tape recording) was employed, thus making the full transcription of the hearing entirely dependent upon the court reporter and his notes. The difficulties for litigants and the court system caused by the lack of an alternative means to preserve trial testimony have previously been discussed by this Court. See Southwestern Bell Telephone Co. v. Thomas, 535 S.W.2d 686, 693-94 (Tex.Civ.App.—1976), rev’d in part on other grounds, 554 S.W.2d 672 (Tex.Sup.1977).

Because only a small portion of the statement of facts was missing we instructed the attorneys to prepare a narrative statement in conformance with Rule 377, T.R.C.P. In addition, we instructed the court reporter to make every effort to locate the lost notes. The reporter was ordered to search thoroughly for his notes of the hearing and to report on his progress within ten days. Although 55 days have elapsed since this order was issued, the court reporter has failed and refused to reply. The duties of official court reporters specified in Tex.Rev.Civ. Stat.Ann. art. 2324 (Supp.1978-79) and in Rule 376b, T.R.C.P., include retaining their notes for three full years. Their duties require that they prepare transcripts of evidence of trial and other proceedings. Not only has the reporter failed to retain the notes so that a full transcription can be prepared, but has also failed to cooperate with the attorneys or to respond to the order of this Court. This conduct is completely irresponsible. This same court reporter, Hector Sanchez, has failed to complete the records (even after lengthy extensions of time), in other cases appealed to this Court, culminating in two prior contempt citations.

The attorneys in this case were instructed to agree upon a narrative statement or, if agreement was not possible, to appear before the trial judge pursuant to Rule 377(d), T.R.C.P., for resolution of any disputes. Appellants’ attorney reported that, despite conferences with appellees’ attorney and a hearing with the trial judge, all efforts to prepare a narrative statement have failed.

The law entitles the appellants in an appealed case to a complete statement of facts. Where due diligence has been exercised, an appellant who, through no fault of his own, is unable to obtain a proper record of the evidence, is entitled to a new trial where his right to have the case reviewed on appeal cannot be preserved in any other way. Smith v. Smith, 544 S.W.2d 121 (Tex.Sup.1976); Robinson v. Robinson, 487 S.W.2d 713 (Tex.Sup.1972); Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312 (Tex.Civ.App.—Dallas 1975, writ ref’d); Blue Cross-Blue Shield of Texas v. Davidson, 574 S.W.2d 215 (Tex.Civ.App.—Corpus Christi 1978, no writ); Garcia v. Kelly, 565 S.W.2d 112 (Tex.Civ.App.—Corpus Christi 1978, no writ); Waller v. O’Rear, 472 S.W.2d 789 (Tex.Civ.App.—Waco 1971, writ ref’d n. r. e.).

We find that the appellants here have shown due diligence in their attempts to obtain the question and answer statement of facts from the former official court reporter and have to our satisfaction made a reasonable effort to prepare a narrative statement of facts. Through no fault of their own, they are unable to obtain the needed portion of the statement of facts which they contend is essential to their primary point on appeal. We therefore grant appellants’ motion to reverse. The judgment of the trial court is reversed and the cause is remanded for a new trial.

REVERSED AND REMANDED.


author: O’QUINN, Justice.

text:
    Millard K. NEPTUNE, Appellant, v. Honorable Mike RENFRO, Travis County Judge, et al., Appellees.
    No. 12929.
    Court of Civil Appeals of Texas, Austin.
    Aug. 1, 1979.
    James H. Keahey, Austin, for appellant.
    James L. McMurtry, Travis County Atty., John D. Ewald, Asst. County Atty., Austin, for appellees.
   O’QUINN, Justice.

Millard K. Neptune, as a resident and taxpayer of Travis County, brought this lawsuit against the county judge and members of the Commissioners Court, the county treasurer, and the county auditor, seeking a permanent injunction to prevent the officials from putting into effect salary raises for the judge and the commissioners, as well as eighteen other elective county officials, approved by the Commissioners Court on July 31, 1978.

After hearing in district court without aid of a jury, the trial court entered judgment that Plaintiff Neptune take nothing by this lawsuit. The trial court filed findings of fact and conclusions of law. Neptune has appealed and brings three points of error. We will overrule the points of error and affirm judgment of the trial court.

Decision on appeal turns on construction and application of Article 3912k, Y.A.T.S. (Acts 1971, 62nd Leg., p. 2019, ch. 622), which became effective January 1, 1972.

By this Act the Legislature created a county salary grievance committee, of which body an “elected county or precinct officer who is aggrieved by the setting of his salary, expenses, or other allowance by the commissioners court may request a hearing before the committee.” (Emphasis added). Art. 3912k section 2(d). If the grievance committee, after a hearing, recommends a change in salary, expenses, or other allowances by vote of six members of the voting membership of nine, the Commissioners Court “shall consider the recommendation at its next meeting.” If the recommendation is “signed by all nine members and delivered to the commissioners court,” the recommendation becomes effective without action by the Commissioners Court.

Appellant contends that the trial court erred (1) in construing Article 3912k as not requiring ten days’ published notice of the pay raises attacked, (2) in construing the statute to allow members of the commissioners court, after budgeting their salaries at a fixed amount, to be aggrieved by their own action, and (3) in holding valid the order of the Commissioners Court instituting the pay raises attacked.

It is undisputed that the grievance committee of Travis County met on July 25, 1978, and voted salary increases for all elected officers who had submitted a request, with each elected official receiving at least six votes to grant the increase requested. The recommendations of the grievance committee resulting from the meeting of July 25 were delivered to the Commissioners Court as required under Article 3912k, section 2(d). Thereafter on July 31, at its first regular meeting next following receipt of the committee’s recommendations, the Commissioners Court voted unanimously in open meeting to accept the recommendations of the grievance committee and to amend the county budget to conform to the recommendations.

Appellant contends that the Commissioners Court was without authority to adopt the recommended increases in salaries “. . . except at regular meeting . and after 10 days’ notice published in a paper of general circulation in the county of the intended salaries, expenses, and allowances to be raised and the amount of the proposed raises,” as prescribed by section 6 of Article 3912k. The parties are in agreement that such notice by publication was not given, and that the Commissioners Court acted at its next regular meeting but within less than ten days after receiving recommendations of the grievance committee.

Appellees contend that the Commissioners Court was required by provisions of section 2(d) of Article 3912k, after receiving the written recommendations of the grievance committee, to “. . . consider the recommendation at its next meeting.” The position of appellees is that the statute required the Commissioners Court to “consider and act on the recommended salary increases at its next meeting.” (Emphasis added).

The statute does not require action at the next meeting, but only that the recommendations be considered. The English verb “consider” stems directly from the Latin verb considerare, meaning “to look at closely, attentively, carefully, to inspect . to consider maturely, to reflect, contemplate, meditate.” Latin Dictionary, Oxford University Press, 1975. Webster tracks the Latin to define “consider” as: “To fix the mind on; hence, to think on with care; to ponder; to study; to meditate on; also, to bear in mind ... To give thought to with a view to accepting or adopting.” Webster’s New International Dictionary, 2nd ed., unabridged.

It is inescapable that the phrase “consider the recommendation at its next meeting” does not, standing alone, include acting on, adopting, or concurring in the recommendations at the next meeting; and adoption is not required then, unless at the same meeting the Commissioners Court voluntarily decides to take final action. In the present case the Travis County Commissioners Court did take such final action, on July 31, 1978.

The trial court concluded that “It was impossible for the Commissioners Court to comply with the requirement of Sec. 6, art. 3912k . . . that 10 days’ published notice be given of the intended salary increases, and the requirements of Sec. 2(d) that the Commissioners Court consider and act on the recommended salary increases at its next meeting after receiving the recommendations of the Salary Grievance Committee.” (Emphasis added).

We agree that it was impossible to give 10 days’ published notice between July 25, when the recommendations were adopted by the grievance committee, and the next regular meeting of the Commissioners Court on July 31. We do not agree that the statute required the Commissioners Court to consider and act at the next meeting. We are of the view that the statute requires only that a Commissioners Court take up and consider the recommendations at its earliest meeting, at which meeting the Commissioners Court may properly determine a future date for final action, allowing time for the published 10 days’ notice to be given in compliance with section 6 of Article 3912k. It is proper and advisable that all Commissioners Courts follow the procedure thus described.

The Commissioners Court approved the 1978 budget for Travis County late in January of 1978, in which reserve funds were provided for salary increases for elected officials, and early in June, after further study of comparative salaries in other Texas counties, the Commissioners Court passed an order to utilize the reserve fund for increase of salaries for elected officials. On advice of the county attorney, the Commissioners Court rescinded that order on June 12, 1978, and initiated the process provided under Article 3912k for requested increases to be filed with the county salary grievance committee.

By June 16 the requests involved in this case had been filed with the salary grievance committee, and, as earlier observed, the grievance committee adopted its recommendations on July 25, 1978.

The trial court found that appellant, as plaintiff below, “. . . did not change his position in any respect because of the delay in submission of the salary requests to the Salary Grievance Committee, or because of delay in action by the Committee or the Commissioners Court, nor was he injured by such delay.” Appellant’s complaint thus becomes in the main an objection to failure by the Commissioners Court to give additional notice 10 days in advance of approving finally recommendations of the grievance committee. There is no evidence that any taxpayer who wished to discuss the budget was not given an opportunity to be heard, nor that any taxpayer requested that action on the budget be further delayed.

Article 3912k obviously was intended by the Legislature to provide a specific method by which salaries of elected county and precinct officials may be adjusted, when circumstances justify adjustment, and that such changes would become amendment of the county budget. One of the purposes of the county budget statutes was effectively to “. . . discourage and prevent deficit spending by counties . . . ” Guerra v. McClellan, 250 S.W.2d 241, 245 (Tex.Civ.App. San Antonio 1952), approved 258 S.W.2d 72, 75 (Tex.Sup.1953). In this lawsuit no evidence was offered that the salary increases finally approved by the Commissioners Court would constitute deficit spending, and in fact the contrary was evident from the reserve established by the Commissioners Court when the annual budget was adopted in January, 1978. How much the budget is to be increased ultimately is within the discretion of the Commissioners Court, provided the increase does not cause the budget to exceed expected revenues. Gravis v. County of Duval, 337 S.W.2d 306, 309 (Tex.Civ.App. San Antonio 1960, no writ). No contention is made, and no evidence was offered to show, that the salary increases would raise the budget above expected revenues.

The record discloses that the Commissioners Court, in considering and acting on the recommendations of the grievance committee at its first meeting after the recommendations were delivered, pursued its course in the mistaken belief that section 2(d) of Article 3912k required final action, not merely “to study” the recommendations “with a view to . accepting or adopting” the recommendations later following 10 days’ notice required by section 6 of Article 3912k. The record contains no suggestion that members of the Commissioners Court acted other than openly, fairly, and in good faith by taking final action at the meeting on July 31, 1978. We conclude that the trial court correctly affirmed the Commissioners Court in its action taken July 31.

Appellant complains further that members of the Commissioners Court, having budgeted their salaries at a fixed amount in January, were disqualified “to be aggrieved by their own action” in June for consideration by the grievance committee in July. The statute makes no distinction between members of a Commissioners Court and any other elected county or precinct officer. Section 2(d) of Article 3912k simply provides that, “Any elected county or precinct officer who is aggrieved by the setting of his salary ... by the Commissioners Court may request a hearing before the [county grievance] committee.”

The trial court concluded that “The legislative history of article 3912k ... reflects that the Legislature did not intend that the provisions of Section 6 should apply to and qualify the provisions of Section 2(d).” There is reasonable support for such conclusion, as shown by the legislative journals reviewed at the trial, although we believe the two sections may be construed so as not to be in conflict. Under the facts of this case, we conclude that final action of the Commissioners Court on July 31, without the notice specified by Section 6, was not a nullity in the absence of some showing that such action was arbitrarily taken over timely objection, or was harmful to appellant or other taxpayers, or would have resulted in a budget exceeding expected revenues.

The judgment of the trial court is affirmed.


author: SHANNON, Justice.

text:
    Jerry D. ANGERMAN et al., Appellants, v. Robert E. STEWART et al., Appellees.
    No. 12964.
    Court of Civil Appeals of Texas, Austin.
    Aug. 1, 1979.

      John B. Selman, Mark J. Silverstone, Sneed, Vine, Wilkerson, Selman & Perry, Austin, for appellants.
    Mark White, Atty. Gen., Thomas A. Rutledge, Asst. Atty. Gen., Austin, for State Banking Board of Texas.
    , Earl L. Yeakel, III, Adrian M. Overstreet, Jr., Kammerman, Yeakel & Overstreet, Austin, for Bank of Austin.
   SHANNON, Justice.

Appellants Jerry D. Angerman and others filed an application with the State Banking Board for a charter to operate a bank, to be known as the Sam Houston Bank, in Austin, Travis County, Texas. The Board after hearing entered an order denying the application.

Appellants filed suit in the district court of Travis County to set aside the Board’s order. The district court entered judgment affirming the Board’s order. We will affirm that judgment.

Appellants’ first point of error is that the judgment approving the administrative order is erroneous in that the Board entered its order more than ninety days after May 18, 1977, the date the hearing was closed.

The Administrative Procedure and Texas Register Act, Tex.Rev.Civ.Stat.Ann. Art. 6252-13a, § 16(d) (Supp.1978), provides:

“(d) The final decision or order must be rendered within 60 days after the date the hearing is finally closed. In a contested pase heard by other than a majority of the officials of an agency, the agency may prescribe a longer period of time within which the final order or decision of the agency shall be issued. The extension, if so prescribed, shall be announced at the conclusion of the hearing.”

At the close of the hearing, the hearing officer announced that the time for rendition of the order was extended from sixty to ninety days. The Board’s order, however, was signed one hundred and four days after the close of the hearing.

Appellants argue that compliance with § 16(d) is mandatory and that the Board’s order is void because it was signed fourteen days beyond the time limit announced by the examiner. Appellants’ argument is contrary to the holding of the Waco Court of Civil Appeals in Lampasas Federal Savings and Loan Association v. Lewis, 558 S.W.2d 913 (Tex.Civ.App.1977, no writ). The Court held in Lampasas that § 16(d) is directory. See also Lewis v. Jacksonville Bldg. & Loan Ass’n, 540 S.W.2d 307 (Tex.1976). Contrary to appellants’ claim, Houston Mobilfone, Inc. v. P. U. C., 565 S.W.2d 323 (Tex.Civ.App.1978, no writ), is not controlling. Section 16(d) was not involved in Mobilfone.

Appellants’ second point is that the district court erred in affirming the Board’s ' order because the First Deputy Treasurer voted in place of the Treasurer although the Treasurer was present when the vote was taken.

Jesse James, then Treasurer, was present at the meeting of the Board during the taking of the vote on appellants’ charter application. James did not vote on appellants’ application and instead, Morris Steven, First Deputy Treasurer, voted in place of James. No explanation for the substitution appears in the record. The vote was unanimous to deny the application.

The duties of the State Banking Board are found in the Texas Banking Code Ann. Art. 342-101 et seq. (1973). Article 342-115, subd. 3(b) and (d) provide in part as follows:

“(b) . . . The decision of the Board shall be evidenced in the minutes by the vote of each Board member in respect to each of the five statutory requisites for issuance of a bank charter, and no member shall abstain from voting unless he shall be disqualified for some ethical or personal reason, which ground of disqualification shall be stated in the record.”
“(d) When either the State Treasurer or Commissioner is unable to personally attend an official meeting of the Board, the respective first deputy of such member may appear and vote in his stead, provided that the Board rules shall prescribe the deputy by name and title who is so authorized, and provided further, that two such deputies may not both sit as substitute members of the Board at the same meeting.”

Because the Treasurer was in attendance at the official meeting of the Board, the Board did not act in compliance with Art. 342-115, subd. 3(d) in permitting the First Deputy Treasurer to vote on appellants’ application in place of the Treasurer.

Texas Banking Code Ann. Art. 342-305A and D provide in part:

“A. Applications for a State bank charter shall be granted only upon good and sufficient proof that all of the following conditions presently exist:
(1) A public necessity exists for the proposed bank;
(2) The proposed capital structure is adequate;
(3) The volume of business in the community where such proposed bank is to be established is such as to indicate profitable operation of the proposed bank;
(4) The proposed officers and directors have sufficient banking experience, ability and standing to render success of the proposed bank probable; and
(5) The applicants are acting in good faith.
The burden to establish said conditions shall be upon the applicants.”
“D. Upon filing of the application, the Commissioner shall promptly set the time and place for public hearing of the application for charter, giving the applicants and such other banks in the same trade area reasonable notice thereof. After full and public hearing the Board shall vote and determine whether the necessary conditions set out in Section A above have been established. Should the Board, or a majority of the Board, determine all of the said conditions affirmatively, then the application shall be approved; if not, then the application shall be denied. If approved, and when the Commissioner receives satisfactory evidence that the capital has been paid in full in cash, the Commissioner shall deliver to the incorpo-rators a certified copy of the Articles of Association, and the bank shall come into corporate existence. Provided however, that the State Banking Board may make its approval of any application conditional, and in such event shall set out such condition in the resolution granting the charter, and the Commissioner shall not deliver the certified copy of the Articles of Association until such condition has been met, after which the Commissioner shall in writing inform the State Banking Board as to compliance with such condition and delivery of the Articles of Association.”

Appellants’ argument that the First Deputy Treasurer’s vote, under the circumstances, invalidates the order is without merit. The rule is set out in 73 C.J.S. Public Administrative Bodies and Procedure § 21 (1951):

“Although there is authority to the contrary, as a general rule, in the absence of a statute providing otherwise, where official authority is conferred on an administrative body composed of three or more members, such authority may be exercised by less than all the members, provided all had notice or an opportunity to be present, as discussed supra § 20. The number requisite to effective action may be, and frequently is, fixed by statute, and action by a majority of the members of the body or of a quorum is necessary and sufficient. Unless so provided by statute, the authority may not be exercised by a single member of such body, or less than a majority. The legal effect of action taken by the requisite number of members, although less than all, is the same as though all had supported the action taken, and the mere fact that they permit an unauthorized person to act with them will not invalidate the action taken.”

By the enactment of Art. 342-115, subd. 3(b) and (d) the legislature probably intended to discourage abstention and to authorize substitute members to vote in order to avoid stalemates where the vote might otherwise result in a one-to-one tie.

In the case on appeal, although the First Deputy Treasurer improperly voted in place of the Treasurer, the purpose of the act was not thwarted. The vote was unanimous and no matter how the First Deputy Treasurer voted, or how the Treasurer would have voted, the majority vote would have been to deny the application.

Accordingly, the noncomplianee with Art. 342-115, subd. 3(d), though error, was harmless in that it did not result in the entry of an order different from one that would have been entered if Art. 342-115, subd. 3(d) had been complied with. Point of error two is overruled.

Appellants’ fourth point is that the judgment affirming the Board’s order was erroneous in that the Board’s findings (1) that a public necessity does not exist for the proposed bank and (2) that the volume of business in the community to be served is not such as to indicate a profitable operation, are not supported by substantial evidence.

The Board’s refusal of appellants’ application was grounded upon its negative findings relating to Texas Banking Code Ann. Art. 342-305, subdivision A(l) and (3), above set out. The district court concluded that the negative findings of the Board were supported by substantial evidence.

An appeal from an order of the Board is, of course, governed by the substantial evidence rule. Chemical Bank & Trust Company v. Falkner, 369 S.W.2d 427 (Tex.1963). A statement of the law relating to judicial review of agency orders is found in a recent opinion of this Court, Mutual Building and Loan Association v. Lewis, 572 S.W.2d 771 (Tex.Civ.App.1978, no writ), and need not be repeated in this opinion.

The proposed bank was to be located in the Bruce Towers Building located just east of Interstate 35 on the access road in south Austin. The Board characterized access to that building bluntly, but fairly, as “mediocre.” A bank’s accessibility is a factor in considering whether its operation will be profitable. State Bank Bd. v. Proposed Cent. Pk. Bank of Dallas, 522 S.W.2d 717 (Tex.Civ.App.1975, writ ref’d n. r. e.).

The record reflects undisputed economic growth in Travis County and in Austin in recent years. There was not evidence, however, showing what areas in the county and city were experiencing most of the growth. With respect to growth in population, the evidence was that there had been very little increase within the past few years in the number of persons residing in the immediate area of the location of the proposed bank. East of the site of the proposed bank there are many apartments that house mostly students. Deposit potential from most students is very limited. To the east and southeast there are large tracts of undeveloped land.

In response to the growth in the county as a whole, as many as ten new banks have been established in the county since 1968, an increase of one hundred percent. Within a two and a half mile radius of the site of the proposed bank there are eight banks and several savings and loan institutions. New banks have been chartered in Travis County more rapidly than the population and economic growth have increased.

One factor in determining whether there is a public need for a bank and whether the proposed bank will operate profitably is the level of demand deposits of individuals, partnerships, and corporations. There was evidence that from 1970 to 1976 such demand deposits consistently decreased as a percentage of total deposits in the banks in Travis County.

Some doubt was cast upon the economic conditions in the county by evidence that showed an increased unemployment rate between 1974 and 1977. In addition, the average weekly wage in the county in 1976 was less than the state-wide average weekly wage. Although per capita income increased in Travis County, the county has fallen behind the per capita income for the rest of the state in recent years.

In the case at bar the Board refused to find affirmatively with respect to subsections (1) and (3), but instead found there was no public necessity for the proposed bank and that the volume of business in the community was not such as to indicate a profitable operation of the proposed bank. We hold that the findings complained of were supported by substantial evidence, and further hold that the evidence does not so conclusively require affirmative findings that the refusal to make them was arbitrary or capricious. Gerst v. Cain, 388 S.W.2d 168 (Tex.1965).

Point of error three is that the judgment affirming the Board’s order was erroneous because (1) the order is based on evidence not introduced at the hearing or officially noticed and (2) the Board’s findings of fact are not accompanied with a concise and explicit statement of the underlying facts supporting those findings. The point is without merit and is overruled.

The judgment is affirmed.

      . The Treasurer attended the meeting at which the applicants’ motion for rehearing was considered, and he cast his vote to overrule the motion.


text:
    Frederick John ROBINSON, Appellant, v. TEXAS DEPARTMENT OF PUBLIC SAFETY, Appellee.
    No. 12992.
    Court of Civil Appeals of Texas, Austin.
    Aug. 1, 1979.
    James S. Damron, Fowler, Fowler & Damron, Austin, for appellant.
    James L. McMurtry, Travis County Atty., Ben C. Florey, Jr., Asst. County Atty., Austin, for appellee.
   O’QUINN, Justice.

Frederick John Robinson appeals from judgment of county court at law in Travis County suspending for six months appellant’s license to operate a motor vehicle.

The events culminating in this appeal began with proceedings, instituted in 1976 by the Department of Public Safety, in the course of which a justice of the peace determined that Robinson was “an habitual violator of the traffic law” (Article 6687b, sec. 22(b)(4), V.A.T.S.). The justice court probated suspension of Robinson’s license on condition that “Licensee is not to be convicted of any moving traffic law violation received during his probationary period, or proven [sic ] responsible for a motor vehicle accident.”

Subsequently, during the period of probation, Robinson was served with a traffic citation for speeding in Austin, for which violation he was convicted and fined at trial held after expiration of the probation period. Thereafter, upon receiving official report of the conviction, made pursuant to section 22(a), the Department of Public Safety initiated action to revoke Robinson’s license on the ground that Robinson violated a condition of his probation, under authority of Article 6687b, sec. 22(f).

The proceeding was tried before the county court at law without aid of a jury. The trial court found that Robinson violated a condition of his probation and ordered his license suspended for six months. Robinson filed supersedeas bond and perfected appeal to this Court for review.

Appellant brings five points of error which appellant compresses in the statement that “ . . . Robinson defends by asserting that the trial court was without jurisdiction to entertain the Department’s action, that he did not in fact violate the terms of his probation order by its clear language, and that the Department is in fact prosecuting this action not for any protection of the public safety but in order to inflict additional punishment on him for the commission of traffic offenses which he has already paid fines for in violation of constitutional prohibitions against double jeopardy.”

We will overrule all points of error and affirm judgment of the trial court.

Article 6687b, section 22(f), under which the Department of Public Safety initiated this proceeding provides that “The issue at the hearing shall be whether a term or condition of the probation has been violated.” If the finding of the officer or judge presiding at the hearing “ . . .is that a term or condition of the probation is violated, the department shall revoke or suspend the license as determined in the original hearing.”

Robinson argues that although the “moving traffic violation” occurred during the probation period, a condition or term of the probation was not violated because Robinson was not tried and convicted of the traffic offense until after the end of the period of probation. It is undisputed that Robinson was served with a traffic citation for speeding within the period of his probation and that upon trial subsequently Robinson was found guilty and assessed a fine.

After report of Robinson’s conviction reached the Department, the director proceeded as authorized under Article 6687b, see. 22(f), with proceedings to suspend the license. We conclude that the pertinent jurisdictional fact occurred when Robinson was served with the traffic citation upon which he was subsequently convicted and fined, and that the fact trial took place after expiration of the period of probation is not controlling. Ex parte Fennell, 162 Tex.Crim.App. 286, 284 S.W.2d 727 (1955).

Proceedings under section 22 of Article 6687b for cancellation, suspension, and revocation of licenses to operate motor vehicles on the public highways are essentially civil in nature and have the obvious design to protect the public from any person, although holding a license duly issued by the Department, who is found for good reason to constitute a menace or danger to public safety. Section 22(b) enumerates the several grounds for revocation or suspension of a license. Among the grounds is that of being “an habitual violator of the traffic law.” Sec. 22(b)(4).

That term is defined to “ . . . mean any person with four (4) or more convictions arising out of different transactions in a consecutive period of twelve (12) months, or seven (7) or more convictions arising out of different transactions within a period of twenty-four (24) months, such convictions being for moving violations of the traffic laws of this state or its political subdivisions.”

The trial court, on filing findings of fact and conclusions of law, found that Robinson, during the period from June of 1975 to May of 1977, had been charged on six moving traffic violations, for which he was convicted and paid fines. The offenses occurred in the five counties of Ellis, Harris, Travis, Williamson, and Kinney.

We have carefully examined the points of error brought by Robinson and considered arguments made in support of the points. We conclude that the trial court had jurisdiction to entertain the proceeding to suspend Robinson’s license by reason of violating his probation following conviction as “an habitual violator of the traffic law.” The trial court properly concluded that Robinson violated his probation, based on a showing that the offense of speeding had occurred during the period of probation and Robinson was served with citation at the time.

There is no showing that the Department prosecuted this action to inflict additional punishment on Robinson. It is evident that the Department acted on directives found in Article 6687b, section 22(f), upon the belief that a term or condition of the probation had been violated. A license is not suspended to visit additional punishment on an offender, “but in order to protect the public against incompetent and careless drivers.” Texas Department of Public Safety v. Richardson, 384 S.W.2d 128, 132 (Tex.Sup.1964).

We affirm the judgment of the trial court.


text:
    Carolyn Farmer DOLMAN, Appellant, v. Mrs. Louise P. DOLMAN, Appellee.
    No. 12993.
    Court of Civil Appeals of Texas, Austin.
    Aug. 1, 1979.
    Rehearing Denied Aug. 22, 1979.

      Mary P. Beaman, Florence, Bill Buckner, Georgetown, for appellant.
    Edgar A. Nooning, III, Georgetown, for appellee.
   SHANNON, Justice.

This appeal involves questions concerning grandparents’ rights to access pursuant to Tex.Family Code Ann. § 14.03(d) (Supp. 1978).

On June 16, 1967, the district court of Travis County entered a judgment granting appellant Carolyn F. Dolman a divorce from Denver Floyd Dolman. The judgment awarded custody of Lise Nicole Dolman, an infant daughter, to Carolyn with reasonable visitation privileges awarded to Denver.

On May 23, 1978, appellee Louise P. Dol-man, the paternal grandmother of Lise, appearing pro se, filed a “motion to modify” the divorce judgment of June 16, 1967. By her motion appellee sought to be named “Possessor Conservator” and in addition, sought visitation rights pursuant to § 14.-03(d). Appellee acquiesced in the transfer of the cause to the district court of Williamson County. By a subsequent filing, which we construe to be an amended motion, ap-pellee abandoned her plea to be named “Possessor Conservator” and sought only “right of access” to the child.

Trial was to a jury. The court’s charge contained two special issues. The jury answered: (1) that it was in the best interest of the child to grant the grandmother access rights to the child, and (2) that one day each calendar month for eight consecutive hours was reasonable access. “Access rights” were defined in the charge to mean “rights of visitation with the child.” The parties made no complaint of the charge.

Appellant attacks the judgment by a number of points of error. She complains by her first point that the district court erred in entering judgment for appellee because Tex.Family Code Ann. § 14.03 does not provide a grandparent an independent cause of action for reasonable access rights to a child in the custody of a fit custodial parent.

Generally, the obligation of the custodial parent to permit visitation by a grandparent is a moral obligation, not a legal one. Deweese v. Crawford, 520 S.W.2d 522 (Tex.Civ.App.1975, writ ref’d n. r. e.). It is held generally that the courts will not enforce a right of visitation by a grandparent nor intervene in the relationship between the grandchild and the custodial parent. Deweese v. Crawford, supra; Gault, Statutory Grandchild Visitation, 5 St. Mary’s L.J. 474 (1973).

Texas Family Code Ann. § 14.03 (Supp. 1978), as amended, effective August 29, 1977, provides:

“(a) If a managing conservator is appointed, the court may appoint one or more possessory conservators and set the time and conditions for possession of or access to the child by the possessory conservators and others.
“(b) On the appointment of a possesso-ry conservator, the court shall prescribe the rights, privileges, duties, and powers of the possessory conservator.
“(c) The court may not deny possession of or access to a child to either or both parents unless it finds that parental possession or access is not in the best interest of the child and that parental possession or access would endanger the physical or emotional welfare of the child.
“(d) If the court finds that it is in the best interests of the child as provided in Section 14.07 of this code, the court may grant reasonable access rights to either the maternal or paternal grandparents of the child; and to either the natural maternal or paternal grandparents of a child whose parent-child relationship has been terminated or who has been adopted before or after the effective date of this code. Such relief shall not be granted unless one of the child’s legal parents at the time the relief is requested is the child’s natural parent. The court may issue any necessary orders to enforce said decree.”

The Tyler Court of Civil Appeals construed the statute in Goolsbee v. Heft, 549 S.W.2d 34 (Tex.Civ.App. 1977, no writ). In Goolsbee the maternal grandparents sought access to the child of their deceased daughter. The district court granted right of access to the grandparents. The child’s father, on appeal, contended that a parent, absent pleading and proof of unfitness, has an absolute right of custody and control, and that the district court could not award access to grandparents over the objection of the sole surviving parent. The Tyler court rejected the father’s argument, quoting § 14.03(d) and holding: “This statute clearly gives the grandparents the right to judicially seek visitation rights to the child, and the court has the authority to order such visitation rights in favor of the grandparents. Such power is not subject to the will of the parent; otherwise, the statute would be without force.”

The Dallas Court of Civil Appeals in Barrientos v. Garza, 559 S.W.2d 399 (Tex.Civ.App. 1977, no writ), declined to follow the rule in Goolsbee. Candleria Garza, the maternal grandmother, sought right of access to the children of her deceased daughter. The children were residing with their father and stepmother. The district court entered an order awarding the grandmother “access to and visitation with the children.” The Court of Civil Appeals reversed the judgment and rendered judgment denying the grandmother all relief.

In Barrientos the father contended, as does appellant in the case at bar, that § 14.03 does not provide a grandparent an independent cause of action for access rights to a child in the custody of a fit custodial parent. The court held that the condition expressed in subdivision (a) of § 14.03, “If a managing conservator is appointed,” applies to the subsequent subdivisions. Stated another way, § 14.03(a) limits the application of § 14.03(d) to those cases where the court appoints a managing conservator. If the court has not appointed a managing conservator, then the statute does not empower the court to award access to the grandparents.

In this appeal we need not choose between the rule in Goolsbee and that in Barrientos. Under the rule in either case appellee is entitled to maintain her suit for access. Appellant’s possession of Lise is pursuant to a court order. Although the divorce judgment, being prior to the enactment of the Texas Family Code, did not name appellant as managing conservator, her appointment by the judgment as custodian of Lise has the same effect. Point of error one is overruled.

We also overrule appellant’s constitutional attack on the grandparents’ access provision of the Family Code. “The state has sufficient interest in the family relationship to permit legislation in this area.” Deweese v. Crawford, supra.

Point of error four is that the district court erred in rendering judgment for ap-pellee because the finding by the jury that access by appellee was in the best interest of the child was against the great weight and preponderance of the evidence. Appellant does not attack the judgment by a “no evidence” point of error.

In reviewing factual sufficiency points of error, the court considers all of the evidence to determine whether the findings are so against the great weight and preponderance of the evidence as to be manifestly unjust. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Appellee established that she was Lise’s paternal grandmother. Lise was about eleven years and nine months old at trial time. Before trial, appellee had not seen Lise since the child was about nineteen months old. According to appellee, she had never learned to pronounce the child’s name correctly. She had not written Lise since the child had learned to read. During the intervening years, appellee had tried to see the child several times, but appellant had prevented the visits. In May of 1977, ap-pellee attempted to visit Lise during school hours. She asked a school custodian the whereabouts of Lise Dolman. The custodian directed appellee to a fourth grade class where a child, Lisa Bruce, attended. Lisa Bruce was called from the classroom to see her “grandmother.” Lisa protested that appellee was not her grandmother and that she was not at all familiar with places or transactions appellee recounted. Nevertheless, appellee insisted that indeed she was the child’s grandmother and persisted in having the child pose for pictures with her. The pictures were taken and appellee introduced them as exhibits in the trial of this case. Appellant called the teacher, Elizabeth Ramsel, to prove that the pictures depicted Lisa Bruce, not Lise Dolman. Appellant herself also testified that the child in the pictures was not her daughter. Even after this testimony, appellee did not appear entirely persuaded of her mistake.

As neither party called Lise as a witness, there is no evidence reflecting her desires with respect to visitation.

Appellee testified that she loved the child. Appellee testified further that the child, by knowing her, would have “added security and another steadfast pillar to lean on as she faces life.” Appellee felt that Lise, by knowing her paternal grandmother, would be given variety and additional love and affection. Appellee testified that she had a nice home in San Antonio.

Denver Dolman, appellee’s son and Lise’s father, testified that if he were still married to appellant he would not consent to his mother visiting Lise. He recounted his very unhappy childhood with appellee. He chose to live with someone else as a child because life with his mother was “intolerable.” He described his mother as a “very strong woman, a very powerful personality,” capable of overwhelming a child. His life with his mother was “miserable,” being loved by his mother one moment and despised by her the next for reasons that he has never understood.

In his capacity as “possessory conservator” of Lise, Dolman testified that he would not voluntarily consent to his mother’s visitation. He claimed that Lise would be harmed and hurt “psychologically” by that visitation. Appellee, in Denver’s opinion, would give Lise a “terrible self-image.” Dolman believed that his mother was a “very sick woman and should not be allowed to have possession by law of any small child.”

Appellant, naturally, testified in effect that appellee’s visitation with the child would not be in the best interests of the child. Appellant viewed appellee as an aggressive person who by her energy and lavish responses made appellant feel as if she were “being pushed into a corner.” Although not very well articulated, appellant’s testimony was that appellee would, if given the opportunity, take over the rearing of the child. Appellant decided early in the child’s life to resist appellee by cutting off all communication with her. She returned birthday and Christmas gifts that appellee sent Lise in 1969.

From our review of the record, we are convinced that the jury’s answer is based upon little more than the well accepted notion that it is meet and right for a grandparent to know his grandchild. Appellee did not demonstrate by a preponderance of the evidence that the welfare or special needs of Lise would be served by appellee’s visitation. Indeed, there is considerable support in the record that visitation would not be in the best interests of Lise. There was evidence that allowance of visitation by appellee could be disruptive and emotionally detrimental to the child. In addition, the record raises doubt concerning appellee’s fitness to be placed in a position of authority over a child even for short periods of time. In sum, this Court, after considering all of the evidence, is of the opinion that the jury’s answer to special issue one is so contrary to the great weight and preponderance of the evidence as to be manifestly unjust.

The judgment is reversed and the cause is remanded to the district court for new trial.

      . Appellant does not complain of appellee’s failure to plead and prove that the circumstances of the child or person affected by the order have materially and substantially changed since the entry of the order sought to be modified. Tex.Family Code Ann. § 14.08(c) (Supp. 1978). Any possible error caused by such failure was waived.