author: PEDEN, Justice.

text:
    V. W. FROST et al., Appellants, v. SUN OIL COMPANY (DELAWARE), Appellee.
    No. 16950.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Dec. 1, 1977.
    Rehearing Denied Dec. 29, 1977.

      Vinson & Elkins, Raybourne Thompson, Sr., Houston, Taylor & Norwood, E. R. Nor-wood, Liberty, John A. Sieger, D. Bruce Pope, Houston, for appellants.
    McGinnis, Lochridge & Kilgore, Robert C. McGinnis, George D. Byfield, David L. Orr, Austin, for appellee.
   PEDEN, Justice.

Sun Oil Company sued Texaco and Vernon W. Frost and other intervenors (Frosts) for a declaration of rights under the parties’ water pressure maintenance agreements. Sun also sought to enjoin Texaco from ceasing to inject water into the Fig Ridge (Seabreeze) Oil Field in accordance with the parties’ earlier agreements. The trial court decided that two of the parties’ agreements were ambiguous and submitted two issues to a jury, which found that 1) upon termination of their 1974 agreement the parties mutually intended to revert to the rates of water injection that existed just before execution of that agreement, and 2) the parties to the 1968 letter agreement mutually intended that it set rates of water injection at the capacity of the injection wells to take water, with a restriction that only 25% of such water be injected into Well No. 2. The trial court ordered Texaco, as new operator of the parties’ pressure maintenance program, to inject water at the pre-1974 rates, ordered Texaco and the Frosts to reimburse Sun for their respective shares of its expenses for the program’s operation prior to judgment, and ordered that no party modify the program without prior approval of the Texas Railroad Commission.

In their appeal from this judgment, Texaco and the Frosts assert that the agreements were not ambiguous and that ambiguity was not raised by the pleadings. No evidence points and insufficient evidence points are directed to each of the issues submitted. Texaco complains that the court included an erroneous definition of “intent" in the charge and that injunctive relief was improperly allowed. Texaco and Frost both complain about the grant of money damages for Sun’s continued operation and assert that the Texas Railroad Commission is without jurisdiction to require continued injection.

Sun Oil Co., Texaco and the Frosts established a joint water pressure maintenance program in 1954 to supplement the natural water drive into the Fig Ridge Field by injecting water into the subsurface. They hoped to maintain enough pressure to force the oil up and produce all the recoverable oil. An operating committee, composed of one member for each party to the agreement, was given authority to determine injection rates and locations. It could exercise its power only by the vote of two or more parties who own at least 75% of the total number of producing wells; this provision gave each of the three major participants an absolute veto power. Paragraph 25 of the 1954 agreement stated: “This agreement shall continue in full force and be effective so long as oil is being produced from said Seabreeze Sand, unless sooner terminated by a vote of the parties owing at least 75% interest in said facilities at time of such termination.” Sun was appointed the operator.

Three water injection wells were drilled between 1954 and 1964; all were located on the western perimeter of the field. Sun’s leases are on both the eastern and western sides of the field, the Texaco leases are in the north central portion, and the Frosts own the south central part. The field is on an anticline with the down dip to the west and center and the up dip to the east, so Sun had wells on both the bottom and the top of the anticline.

In 1967 Texaco became dissatisfied with the injection rates, especially as to Well No. 2, since the water being pumped into the down dip (western side) forced the oil from the Texaco and Frost leases up to Sun’s wells on the eastern side. In resolution of the dispute, the parties adopted the “May 22, 1968 letter agreement,” which allowed the drilling of a fourth salt water injection well and provided that well number 2 be restricted to injecting 25% of the total field injection volume.

In 1974 another controversy arose with respect to the water injection rates. As a result of negotiations conducted at meetings of the operating committee in March and April of that year, the parties entered into the May 1,1974 agreement. It provided that the injection rate would be reduced for a terminable period by limiting it to the quantity of water produced plus the quantity of water required to maintain bonus allowables.

Sun’s position is that the termination of the 1974 agreement resulted in a reversion to the pre-1974 rates of injection while the appellants say the termination meant that there were no longer any agreed rates of injection and that all injection should cease until adoption of a new agreement. The provisions as to termination contained in the 1974 agreement were found in its last three paragraphs:

“This agreement shall remain in force and effect until terminated by the parties hereto; provided that on fifteen (15) days advance written notice to the other parties, any party hereto may terminate this agreement at any time on or after December 1, 1974. After such termination, the parties hereto shall no longer be bound by the terms hereto.
“It is understood that this procedure, as set forth in this agreement, is strictly a trial period in order that the parties may observe the results of injection at the aforesaid rates.
“It is understood that this agreement is in compromise and settlement of a dispute between the parties and that after its expiration date none of the parties hereto shall be bound by any matter contained herein.”

While this agreement was in effect, the parties were again trying to work out a unitization agreement, but when those efforts failed, Texaco gave notice of its termination of the 1974 agreement by a letter dated October 10, 1975. Thus the parties allowed the program to be operated under the 1974 agreement for nearly eighteen months, although any of them could have terminated it after seven months. Sun was ordered removed as operator and replaced by Texaco, effective November 1, 1975. Sun filed suit on October 28 for declaratory relief and for an injunction to prohibit Texaco from stopping injection. Texaco filed a counterclaim for a temporary injunction, as did the Frosts, to prevent Sun from operating the program. On July 12, 1976, the Railroad Commission denied Texaco’s plea to have injection reduced and ordered injection continued for a 6-month period at a volume necessary to replace the production of oil, water, and gas. Texaco and the Frosts did not pursue their applications for a temporary injunction, and Sun continued to operate to the date of trial, although appellants ceased making payments of proportionate shares to Sun by March, 1976.

The trial which followed resulted in favorable jury findings for Sun on these issues:

SPECIAL ISSUE NO. ONE
Do you find from a preponderance of the evidence that the parties to the May 1, 1974 agreement (being Plaintiff’s Exhibit No. 35) mutually intended that, upon the termination of said agreement, the operator of the Pressure Maintenance Program would revert or go back to the rates of water injection into the Fig Ridge (Seabreeze) Field that existed just prior to the execution of the May 1, 1974 agreement?
ANSWER: We do find that the parties so intended.
SPECIAL ISSUE NO. TWO
Do you find from a preponderance of the evidence that the parties to the March 22, 1968 Letter Agreement mutually intended that such letter set rates of water injection into the Fig Ridge (Sea-breeze) Field at the capacity of those wells to take salt water, with the only restriction being that only twenty-five percent (25%) of such water be injected into Well No. Two?
ANSWER: We find it was their intention.

Several of appellants’ points attack as error the submission of the first special issue and the evidentiary support for the first jury finding, alleging that no party pleaded ambiguity, that there was no ambiguity in the 1974 agreement, no evidence to warrant submission of a jury issue as to the parties’ intentions, and no agreed rates of injection to be resumed upon termination.

“A contract is ambiguous only when the application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning. . In other words, if after applying established rules of interpretation to the contract it remains reasonably susceptible to more than one meaning it is ambiguous, but if only one reasonable meaning clearly emerges it is not ambiguous.” Universal C. I. T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 157 (1951).

The statements of Texas law which follow are from City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515 (Tex. 1968). The writing in question was found unambiguous. If there is no ambiguity, the construction of a written instrument is a question of law for the court, and the courts give effect to the intention of the parties as expressed or as is apparent in the writing. It is the objective, not subjective, intent that controls. The parties to an instrument usually intend every clause to have some effect and to evidence their agreement. “Where a question relating to the construction of a contract is presented, as here, we are to take the wording of the instrument, consider the same in the light of the surrounding circumstances, and apply the pertinent rules of construction thereto and thus settle the meaning of the contract.”

In our case the quoted paragraphs of the 1974 agreement provide a specific means to terminate its modification of the 1954 agreement; they say that after termination the parties shall not be bound by the terms of the 1974 agreement. Further, that the procedure provided therein “is strictly a trial period in order that the parties may observe the results of injection at the aforesaid rates”.

We believe that the 1974 agreement was ambiguous because it was reasonably susceptible to these interpretations:

1. Sun’s view is that when the parties trial period had expired they would resume water injection at the last prior rate.
2. The position of Texaco and the Frosts is that on termination of the 1974 agreement there were no agreed rates of water injection.

Parol evidence is admissible to remove the ambiguity, and it has been held that the practical construction placed upon a contract by the parties themselves constitutes the highest evidence of their intention. Trinity Universal Insurance Co. v. Ponsford Bros., 423 S.W.2d 571 (Tex.1968).

As to the circumstances surrounding execution of the May 1, 1974 agreement, we look to the conclusions which the jury was entitled to reach from the evidence, first reviewing Texaco’s position. On May 1, 1974 Texaco and the Frosts were in the process of replacing Sun with Texaco as operator of a changed water injection program. Sun didn’t then say that whoever succeeded it would have to maintain the pressure; it proposed a lower rate of injection. That formula would have permanently reduced the rate. Sun thought the reduced rates would damage everyone and would cause the others to accept Sun’s views. The words “trial period” are of no help when you consider that although Sun was being fired as operator and was faced with a change in the injection program, it did not say that the injection program couldn’t be changed. Sun wasn’t then saying that the 1968 contract required injection at capacity. In May of 1974 the parties didn’t understand that they were tied into a program of capacity injection. The turmoil in 1974 was caused by the others’ finding out that Sun was injecting so much water.

Texaco argues that Sun puts too much emphasis on the words “trial period”. Sun wanted to defer being fired as operator and bringing on Texaco’s injection plan, so it found a temporary alternative. But an agreement signed in this context was not intended to resurrect the problem a few months later. Interpreting “trial period” as requiring a post-trial restoration of the 1968 rates would vary the terms of the 1974 agreement in that “1) it would establish agreement on a post-termination matter in contradiction of the parties' agreement that ‘after such termination the parties hereto shall no longer be bound by the terms hereto’; and 2) it would require re-opening of a dispute which, the parties agreed, was settled.”

The position of the Frosts is next reviewed. In 1954 the field had been producing oil for 13 years, and Sun had enjoyed no natural advantage, but a great migration of oil occurred as a result of the water injection program. Maintenance of pressure to increase ultimate recovery was only one purpose of the 1954 agreement. The other was to protect correlative rights; i. e., to insure to each party an equal right to recover his fair share of the oil and gas beneath his property. Rates of injection affect these rights. Between 1968 and 1974 there were no operator’s committee meetings concerning rates of injection. Sun used the 1968 letter as its permission to inject at capacity. The Frosts didn’t have a staff of engineers but relied on the operator’s reports. In 1974 Texaco’s engineers found that Sun’s injection rates were causing oil and gas to migrate to the up dip Sun leases. After a heated discussion, Sun proposed that the injection rate be reduced. A motion to remove Sun as operator was tabled so the parties could try to work out their differences. The program is a good one, and the Frosts want it continued, but they want to be treated fairly. After some trading, the parties reached the May 1, 1974 agreement. It was the only time the parties ever agreed on the rate of injection. The Frosts insisted on the provision that the 1974 agreement could be terminated after seven months instead of Sun’s proposed one year, because they didn’t intend to agree that termination would restore the prior rate of water injection. Pressure maintenance benefits Sun most; higher rates of injection, other things being equal, bring higher migration of oil from the Frost lands and the Texaco leases to the Sun leases. Sun originally had only about 41% or 42% of the oil in place, but will recover about 60% of the 13,000,000 barrels of increased recovery due to pressure maintenance. Further, Sun will have paid for only 39% of the program.

. The Frosts argue that when they signed the 1974 agreement they did not intend to go’back to the injection rate problems that had plagued them before. They, like Texaco, had only two choices: produce the water that was being flowed in on them or just go home and let Sun get the oil the others had given up on.

We next look to Sun’s position. The water injection wells were carefully located by the parties. It was inevitable that the wells at the highest point on the reservoir would be the last to continue producing oil. The other parties knew that pressure is increased at the point where water is injected, causing the oil above to move, so they put the wells on the western side. Sun wanted the field to be unitized, but the Frosts wouldn’t agree, so they had to work out some other system. They discussed, in 1954, the injection of water so each of them could recover more oil, and in April, 1954 they got the Railroad Commission to adopt Field Rule 19. It provides:

Rule 19: Water may be injected in the Seabreeze Sand for the purposes of maintaining, or regulating pressure, or otherwise increasing the recovery of hydrocarbons or protecting correlative rights, when authorized by the Commission after notice and hearing; provided however, that in the course of conducting injection operations the weighted average reservoir pressure is not increased above 3000 psig. At such hearing, the operator proposing injection operations shall submit for approval his injection plan, showing the location of input wells, the range of amounts of water to be injected, and the proposed date for commencing such operations. After an injection plan has been approved by the Railroad Commission, changes or modifications thereof shall be submitted to the Commission for approval after notice and hearing.

In July, 1954, the parties entered into a written water injection agreement, then drilled their first injection well in a Sun lease on the west side. Sun’s wells on the west were the first to stop producing oil, so Sun got both the disadvantage and the advantage of the program. The 1954 contract recites that the water drive in the field is inadequate to support reasonable rates of production, so the program was initiated to supplement the natural water drive to arrest and equalize the declining pressure and increase recovery of oil. Further, that a joint program is the most efficient as it results in the greatest benefit to the reservoir as a whole. Enlargement of the water injection system required the consent of parties owning at least 95% of the injection system. The contract states that the program will protect the correlative rights of all parties owning mineral interests in the lands in question; Sun says this means that when the water pressure moved the oil up, each party would get more of it than it would otherwise obtain. The parties operated under this agreement for twenty years, then came to a disagreement. They decided to try a decreased rate of injection in 1974, but when it was over, Texaco and the Frosts took the position that the 1974 agreement means that upon its termination the previous program is halted with or without consent of the Railroad Commission. In 1974 the others proposed to severely reduce water injection, but an affirmative vote of parties owning 75% of producing wells was necessary to accomplish a reduction or a termination. That would permanently damage the reservoir, so Sun did not agree, but what the others really wanted by then was unitization. Sun offered to try slightly reduced injection for a year to see whether reservoir pressure would decline as it predicted. An engineer employed by the Frosts was asked whether the Frosts received a substantial benefit from adopting the 1974 agreement in that they got reduced injection for seven months, an opportunity to try to unitize and to learn the effect of reduced injection. He replied that he thought Sun was injecting too much water but admitted that the 1974 agreement benefited the Frosts even if its intended effect was to have the injection rate revert to the prior rate upon termination of the agreement.

Sun argues that under that agreement, no matter who terminated the trial period, the parties would then go back to the prior program. It says that the parties had been operating under the water pressure agreement for twenty years but some of the parties were no longer satisfied with it, so they wanted to try something else while exploring the possibility of agreeing on a unitization plan. That the 1974 agreement clearly says that when it is terminated the parties are no longer bound by it (the 1974 agreement), so they are then left back under the 1954 agreement with an operator who has responsibility to maintain pressure and inject enough water to replace voidage, gas, and efflux. They were not left with an agreement that would permit the others to turn off the water and force Sun to accept their terms. Sun says the others don’t want the injection system terminated, they just want it conducted under their terms, and under their interpretation any party, even those owning only 2% of the producing wells, could have entirely terminated the injection program if the parties could not agree upon a new rate.

We hold that the trial court did not err in submitting Special Issue No. 1 and that the evidence supports the jury’s affirmative answer to that issue. The appellants assert that no party pleaded ambiguity, but Sun attached to its petition and incorporated by reference copies of the 1954, 1968 and 1974 agreements, and set forth the parties differing constructions of the 1974 agreement, relating its own interpretation in paragraph 7 of its petition:

“Plaintiff continued on such temporary rate of injection until November 1, 1975, but on that date had the right to cease it and revert to the pre-existing agreed program because Texaco on October 16,1975, gave notice that it was terminating the temporary agreement.”

Sun asserts that it has pleaded ambiguity in this paragraph of its petition:

“14. The plaintiff should be upheld in its contentions based upon the proper construction by this Court of the 1954 Contract. To resolve any ambiguities, such construction should be made only after hearing all of the surrounding facts and circumstances, including the facts showing the construction of the contract by the parties and the facts as to the agreed pressure maintenance program.”

Although these allegations would have been clearer had they referred to the 1974 agreement, we hold that such pleadings along with the attached contracts gave the appellants fair notice that evidence would be offered to clarify an ambiguity. The 1974 agreement began: “This memorandum will evidence the agreement of all the parties owning an interest under the subject agreement dated July 31, 1954, which following agreement shall prevail notwithstanding the terms of such agreement. . . .” (emphasis added) Considering the 1974 agreement as a modification and integration of the 1954 one, it is reasonable to regard the interpretation problem as one involving the 1954 contract.

Further, no particular type of pleading is required by the Declaratory Judgments Act, and the pleadings of Sun should be liberally construed to support the judgment since there were no special exceptions. See Anderson v. McRae, 495 S.W.2d 351 (Tex.Civ.App.1973, no writ). The purpose of a suit for declaratory judgment is to obtain clarification of one’s rights.

We next consider Texaco’s points of error concerning the second special issue. That issue inquired into the parties intent in executing the 1968 agreement, and only Texaco attacks it. Texaco’s points of error are that Issue No. 2 should not have been submitted because 2) the agreement was not ambiguous and 4) no party pleaded ambiguity. Texaco asserts in its points of error 6) and 8) that as a matter of law the 1968 agreement does not encompass any agreed rates of injection, and 10) there is no evidence the parties mutually intended that the 1968 agreement set rates of water injection. Texaco says its motion for judgment n. o. v. should have been granted because 11) the evidence establishes as a matter of law that the 1968 agreement was mutually intended by the parties not to encompass any agreed rates of injection, and 12) because there is insufficient evidence that the parties mutually intended that injection be at capacity.

The 1968 letter agreement was written by Sun to the other parties, and they agreed to its terms. Its first five paragraphs are important to our consideration of these points. They provide:

“Sun Oil Company proposes the enlargement of the present injection system by the drilling of one additional salt water injection well (No. 4) and if necessary in Operator’s opinion, an additional salt water supply well at the following location:
Said Injection Well No. 4 to be drilled to a total depth of 8,900 feet at a surface location of 1,000 feet South of the North line and 2,000 feet west of the East line of the O. H. Acorn property, H. T. & B. RR. Co. Section 115, Abst. 147, Chambers County, Texas.
The purpose of this additional injection well is to provide an increase in water injection capacity for the Fig Ridge Pressure Maintenance Program, such program having been designed to supplement the inadequate natural water drive existing in the Fig Ridge (Seabreeze) Field, Chambers County, Texas.
If it is decided by the requisite percentage of the parties having an interest in the Fig Ridge Pressure Maintenance Program that said well will be drilled, sun Oil Company will attempt to acquire the required property rights for all facilities for the joint account.
Sun also proposes the following operational conditions as part of our proposal to drill said additional injection well:
1. After sufficient approval is obtained from all parties to drill injection well No. 4 and if necessary as aforesaid an additional salt water supply well, and to install related facilities, and the required property rights are obtained, water injection into injection Well No. 2 will be reduced immediately to 24 percent of the total field injected volume. At the end of each month, a cumulative injection status will be calculated for Injection Well No. 2 so that adjustments in injection can be made in the succeeding month or months so as to maintain the aforesaid cumulative injection volume.
2. After Injection Well No. 4 is drilled and is receiving water, injection into Injection Well No. 2 will be set at a maximum of 25 percent of the total field injection volume. At the end of each month, a cumulative injection status will be calculated for Injection Well No. 2 so that adjustments in injection can be made in the succeeding month or months so as to maintain the aforesaid cumulative injection volume.
As provided in Paragraph 20 of the “Construction and Operating Agreement” any enlargement of the pressure maintenance system requires agreement by parties owning at least 95 percent of the system at the time of the proposed enlargement.”

Briefly stated, Sun asserts that the second paragraph of the 1968 agreement shows that the additional well was drilled to allow injection of water at capacity while decreasing the amount to be injected in Well No. 2. Texaco says the injection rate was to remain unchanged but that injection through Well No. 2 would be decreased.

We will review Texaco’s position concerning the circumstances surrounding execution of the 1968 agreement. Texaco strongly complained in 1967 and 1968 that water from Well No. 2, located near its lease, was pushing oil away and demanded relief. Various proposals were suggested, including drilling of a new well and the setting of an injection rate in terms of “capacity,” the setting of a rate at different exact amounts such as 20,000 barrels of water per day, or the drilling of Well No. 4 and injection of equal volume into each of the four injection wells. None of these proposals was adopted; the only mention of “capacity” was:

“The purpose of this additional injection well is to provide an increase in water injection capacity for the Fig Ridge Pressure Maintenance Program, such program having been designed to supplement the inadequate natural water drive existing in the Fig Ridge (Seabreeze) Field, Chambers County, Texas.”

O. L. Sanders, who signed the 1968 agreement for Sun, testified about it as follows:

“Q. In fact, it doesn’t provide for any of the things, any of the several injection rate formulas that were under discussion between September and March, does it?
“A. It provides for the injection by the operators of that water he can inject with the wells provided by the partners, by the other operators, to permit him to pursue the injection of salt water, to maintain the pressure, and try to arrest the decline in the Fig Ridge Field. And that is what he got out of it.
“Q. The question, sir, is what is put into it?
“A. And that is what was put in it.
“Q. And in fact none of the language which we have been discussing was put into it?
“A. I think it was put into it, implied.
“Q. What? The 20,000?
“A. Not the exact number. We could not agree on that. Those were not agreeable, apparently, to anyone.”

The 1968 agreement was put into effect without discussion of rate of injection, and it worsened Texaco’s problems by greatly increasing the injection rate. Sun’s records show that its assertion that additional injection was needed in 1968 to stop pressure decline was not true, Texaco says.

Texaco argues that when the second paragraph of the 1968 agreement stated it was “to provide an increase in water injection capacity,” it referred only to system capacity, not to rates of injection. Well No. 2 was to be reduced below its capacity, so additional capacity was required elsewhere to take up the slack. Texaco further asserts that there is no evidence that an increase in capacity was pursuant to the 1968 agreement, and the evidence shows that the parties other than Sun did not consider that agreement to agree on injection rates. Texaco and the Frosts did not consider Sun’s over-injection to breach the 1968 agreement because they did not think it was referable to the agreement.

We next look to Sun’s position as to some of the circumstances surrounding the signing of the 1968 agreement:

1. The injection program was created in 1954 to arrest declining reservoir pressure, and the three injection wells in being allowed pressure to decline.

2. In 1966 Sun proposed addition of two injection wells, but Texaco would not agree unless injection by Well No. 2 was decreased.

3. The parties did not agree on a solution until Texaco suggested drilling one more well because “increasing the injection rate in the southern portion of the field . is badly needed” even though this would “not provide any effective relief for the excessively high injection rate into Well number 2 . . . ”

4. After Well No. 2 was drilled, all but Well No. 2 were injected at capacity for five years without complaint from anyone.

Sun argues its position: Texaco is mistaken in saying that Well No. 4 was drilled only to redistribute injection away from Well No. 2. The proof shows that injection for Well 2, one-third of the pre-1968 injection rate, was 5,567 barrels, but one fourth of the rate after completion of Well 4 was 6,599 barrels per day. This was understood by Texaco, because its February 5, 1968 letter states that “while this proposal does not provide any effective relief from the excessively high injection rate into Well No. 2,” Texaco would agree to it in order to increase the rate of injection into the southern part of the field. Sun points out that the testimony of O. L. Sanders immediately following that quoted above was:

Q. Insofar as your language is concerned and the fact that it didn’t include those words, it is true, is it not, that everybody approved the proposal that you submitted to them and you got back a vote in favor of drilling the fourth well under the terms you set forth?
A. Yes, sir.

We agree that the 1968 agreement was ambiguous since it was susceptible to these two meanings:

1. Sun says the 1968 agreement was intended to authorize water injection at the capacities of all the injection wells except No. 2, and it was authorized at 25%.
2. Texaco says the 1968 agreement did not authorize injection of Wells 1, 3, and 4 at capacity.
The Frosts have not raised any points of error on this question.

Neither party has complained by point of error about the admission of any specific evidence to remove the ambiguity of the words used in the agreement.

We hold that the evidence supports the jury’s second finding.

We overrule Texaco’s fourth point of error. Texaco did not timely object to the submission of Special Issue No. 2 on the ground of no pleading of ambiguity. The objection was waived. Rule 274, Texas Rules of Civil Procedure.

We consider Texaco’s twelfth point of error to raise only the question of no evidence. A trial judge may not grant a judgment notwithstanding the verdict on the basis of factual insufficiency. This point complains of the failure of the trial court to grant such motion and is not applicable to the granting of a new trial after entry of judgment. McDonald v. New York Central Mutual Fire Insurance Co., 380 S.W.2d 545, 548 (Tex.1964).

Texaco’s final point of error concerning the court’s charge is that the instruction on “intent” was incorrect. Texaco also seems to be attacking the wording of the special issues as failing to point out the specific contractual language alleged to be ambiguous, but Texaco waived that matter by not objecting to the wording of the issues. Rule 279, Texas Rules of Civil Procedure. O’Connor v. Gragg, 161 Tex. 273, 339 S.W.2d 878, 885 (1960).

The instruction in the charge was:

“The word ‘INTENT’ as that term is used in this Charge means the purpose formed in the parties’ mind as gathered from their actions.
You are further instructed that in determining the intent of the parties, you may take into consideration, in addition to the language used in the agreement, the facts and circumstances surrounding the making of the agreement.
You may further take into consideration any acts done by the parties in the performance of the agreement and any mutual interpreting actions of the parties in connection therewith.”

This instruction is very similar to the instruction in Trinity Universal Insurance Co. v. Ponsford Brothers, 423 S.W.2d 571, 574 (Tex.1968). In that case it was held: “The court instructed the jury that they could take into consideration the facts and circumstances surrounding the making of the agreements set out in those documents as well as any acts done mutually by the parties in the performance of the agreements.”

In our case the trial court added that intent means the purpose formed in the parties’ mind as gathered from their actions, an instruction used in Leopard v. Stanolind Oil & Gas Co., 220 S.W.2d 259 (Tex.Civ.App.1949, writ ref. n. r. e.). There was also added to the definition these words: “in addition to the language of the agreement.” The trial judge gave a proper instruction.

Texaco and the Frosts assert that the trial court’s judgment requiring approval from the Railroad Commission prior to any modification of the program is erroneous. The judgment ordered that Railroad Commission approval be obtained for any change in the rate of injection or any alteration, modification, change, enlargement, reduction or termination of the pressure maintenance program notwithstanding the provisions of the 1954 agreement. Sun’s position is that Field Rule 19 requires such approval.

Rule 19: Water may be injected in the Seabreeze Sand for the purposes of maintaining, or regulating pressure, or otherwise increasing the recovery of hydrocarbons or protecting correlative rights, when authorized by the Commission after notice and hearing; provided however, that in the course of conducting injection operations the weighted average reservoir pressure is not increased above 3000 psig. At such hearing, the operator proposing injection operations shall submit for approval his injection plan, showing the location of input wells, the range of amounts of water to be injected, and the proposed date for commencing such operations. After an injection plan has been approved by the Railroad Commission, changes or modifications thereof shall be submitted to the Commission for approval after notice and hearing. [Emphasis added.]

Sun sought a declaration of the parties rights under Rule 19 in this suit. Construction of this Rule is merely a question of law so the agency need not apply its expertise for this problem. Referral to the Railroad Commission was not necessary. Sun’s suit for declaratory judgment did not challenge validity of the Rule.

Field Rule 19 requires the Commission’s approval for changes or modifications of the program. The Frosts argue that the court’s judgment and Rule 19 attempt to confer on the Commission jurisdiction which has been expressly denied by Paragraph (g) of Article 6014, Texas Revised Civil Statutes. It provides:

“The production, storage or transportation of crude petroleum oil or of natural gas in such manner, in such amount, or under such conditions as to constitute waste is hereby declared to be unlawful and is prohibited. The term ‘waste’ among other things shall specifically include:
******
(g) Waste or loss incident to, or resulting from, the unnecessary, inefficient, excessive or improper use of the reservoir energy, including the gas energy or water drive, in any well or pool; however, it is not the intent of this Act to require repressuring of an oil pool or that the separately owned properties in any pool be unitized under one management, control or ownership.”

Under this statute mandatory repressuring or unitization may not be required, but its provisions do not expressly deny the Commission’s right to prevent the parties from discontinuing a program once it has been operational. The Railroad Commission is not confined solely to the prevention of waste but may promulgate field rules applicable to common reservoirs for the protection of correlative rights. Phillips Petroleum Co. v. American Trading and Production Corp., 361 S.W.2d 942, 945 (Tex.Civ.App.1962, writ ref., n. r. e.). Field Rule 19, saying that changes or modifications shall be submitted for approval, is in keeping with the Commission’s power to protect correlative rights, and the trial court’s order is merely enforcing the Rule.

The Frosts also contend that the judgment confers contract jurisdiction on the Commission. The case at bar is not strictly a contract action but also involves the interpretation of the field rules which were attached as exhibit A to Sun’s second amended original petition. Sun asked for injunc-tive relief requiring appellants to gain the Commission’s approval prior to a cessation of the injection. We overrule the Frosts’ sixth and seventh points of error and Texaco’s points fourteen and fifteen.

Texaco’s thirteenth point of error contends that the trial court was without power to enforce Railroad Commission field rules. Our Supreme Court addressed the issue of primary jurisdiction of administrative agencies in Gregg v. Delhi-Taylor Oil Corp., 162 Tex. 26, 344 S.W.2d 411 (1961) and held that “[wjhere the issue is one inherently judicial in nature . . ., the courts are not ousted from jurisdiction unless the Legislature, by a valid statute, has explicitly granted exclusive jurisdiction to the administrative body.”

The Frosts and Texaco allege error in the court’s granting Sun recovery of their unpaid percentage of the cost of operating the program pending judgment. The Frosts assert in their eighth point of error that they were not obligated to reimburse Sun under a theory of express contract since Sun had been dismissed as the operator and argue against Sun's recovery under an implied contract theory. Texaco contends that Sun’s agency to incur expenses had been revoked.

Sun replies that its recovery is based on the express contract. Paragraph 10 of the 1954 agreement provides:

“Monthly costs of operating such system shall be borne by each of the parties hereto in the proportion that the number of wells owned by such party bear to the total number of wells within the injection area, completed in the Seabreeze Sand, having had an allowable assigned to such well or wells during the previous month by the Railroad Commission of Texas.”

Texaco refers to paragraph 12 of the 1954 agreement which delineates the accounting procedure:

“Operator shall pay and discharge all costs and expenses incurred in connection with the construction, maintenance, operation and abandonment of the system and shall charge and bill the other parties hereto in the proportion of their share thereof, on the basis as herein set forth, upon the cost and expense basis as provided for in the Accounting Procedure attached hereto and made a part hereof. Operator shall maintain accurate books and records of all expenses, costs and liabilities incurred in constructing and operating said system.”

Paragraph 10 imposes a duty to pay but does not predicate that duty on the status as operator of the party who is to be reimbursed. Since the trial court found that obligations under the 1954 agreement had not been terminated the continued obligation to inject water into the field carried with it the continued obligation to pay for the water injection. Had the court found that the termination of the 1974 agreement suspended the injection program, the contract on operating expenses would no longer be enforceable against the appellants.

Texaco’s points of error 17 through 19 assert error in the trial court’s granting of injunctive relief. It first says that specific performance is not available because the contract is ambiguous and that Sun does not come to court with clean hands. At the time the court enjoined Texaco to continue the injection, the contractual duties under the 1968 agreement were no longer ambiguous but had been determined with certainty by the jury. The fact that Sun had maintained the operation after its dismissal as operator on November 1, 1975 was not adjudicated to be wrongful but was upheld by the judgment.

Texaco also alleges that the decree of injunction is too vague and indefinite to require compliance. The amount ordered injected is “the capacity of the four salt water injection wells then in use by the Plaintiff as operator and still in use to take salt water (the average being 26,400 barrels per day), with the only restriction being that only 25% of such water be injected into salt water injection well number two.” This order seems to be entirely feasible since this is the manner in which the injection was determined prior to 1974. See City of Wichita Falls v. Whitney, 11 S.W.2d 404 (Tex.Civ.App.1928, writ dism’d). An injunction should be as specific as the nature of the case allows. San Antonio Bar Assoc. v. Guardian Abstract & Title Co., 156 Tex. 7, 291 S.W.2d 697 (1956).

The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: CLAYTON, Justice.

license: Public Domain

text:
    F. E. WILLIAMS et ux., Appellants, v. ROYAL AMERICAN CHINCHILLA, INC., et al., Appellees.
    No. 7977.
    Court of Civil Appeals of Texas, Beaumont.
    Dec. 1, 1977.
    Rehearing Denied Dec. 27, 1977.
    Charles Turner, Houston, for appellant.
    Appellees not represented by counsel on appeal.
   CLAYTON, Justice.

Appellants (plaintiffs below) entered into a “chinchilla raising project” with appellee, Royal American Chinchilla, Inc., whereby appellants purchased five chinchillas for $3,900 and the acceptance of a “consignment herd” at the same price to be paid for in animals produced by both herds. As they began to raise the chinchillas, appellants contend they discovered numerous representations made by appellees were not true; primarily the “reproduction rate” and the “pedigree” as represented by appellees were not true. Suit was filed for damages. The case was tried before the court, and judgment was entered for appellee from which this appeal was perfected.

Appellants complain that the trial court erred in “failing to prepare and file findings of fact and conclusions of law.”

This case proceeded to trial on August 23, 1976. On October 20, 1976, the trial judge addressed a letter to counsel advising them “that the court has this date ruled that plaintiff shall take nothing. Please prepare the judgment accordingly.” On November 22, 1976, appellants filed their request for findings of fact and conclusions of law. On January 19, 1977, the trial court signed and entered the judgment from which this appeal is perfected. On February 18, 1977, appellants filed the “second” request for findings of fact and conclusions of law. Appellants filed their appeal bond on the same day, February 18, 1977. The trial court did not file its findings of fact and conclusions of law.

Tex.R.Civ.P. 296 requires that a request for- findings of fact and conclusions of law shall-be filed within ten days from rendition of final judgment or order overruling a motion for new trial. The request for findings of fact filed by appellants was made approximately two months prior to the signing and entry of the final judgment.

The first request for findings was filed at a time when the trial court had not signed or entered a written judgment. He had merely indicated that he would enter a judgment against plaintiffs. A period of three months elapsed from the date of his letter indicating his ruling until the date the court actually signed and caused to be entered his written judgment. During this three months’ period, the trial court could have have granted a new trial or otherwise changed his judgment at any time. Louwien v. Dowell, 534 S.W.2d 421 (Tex.Civ.App.-Dallas 1976, no writ). We hold that a request for findings of fact and conclusions of law filed two months prior to signing and entry of judgment is prematurely filed and is not in compliance with Rule 296, and must be considered as a nullity. The “second” request must be considered as the only request filed, and, since it was filed thirty days after the signing and entry of the judgment, such request was not timely filed in compliance with Rule 296.

The second point urged by appellants is that “such judgment is so against the weight and preponderance of the evidence as to be manifestly unjust and clearly wrong.”

This being a nonjury case and no findings of fact or conclusions of law were filed or timely requested, the trial court’s judgment “must be viewed as impliedly finding all necessary facts in support of its judgment.” Buchanan v. Byrd, 519 S.W.2d 841, 842 (Tex.1975).

Every issue raised by the evidence must be resolved in favor of the trial court’s judgment. Coker v. Harris, 281 S.W.2d 100 (Tex.Civ.App.—Dallas 1955, writ ref’d n.r. e.); Oxford Development Co. v. Eppes, 422 S.W.2d 583 (Tex.Civ.App.-Corpus Christi 1967, no writ).

Appellants based their cause of action primarily upon many misrepresentations and “false, misleading or deceptive acts or practices.” We have carefully reviewed the evidence presented during the trial, and we find testimony of witnesses which, if believed by the trial court, could have supported a judgment in favor of appellants; and we find evidence presented which, if believed by the trial court, could have supported a judgment favorable to appellees.

In a case tried without a jury, the court sits as a trier of facts as well as of the law. He is the judge of the credibility of the witnesses .and the weight to be given their testimony. The court may draw any reasonable inferences from the evidence, and any doubts as to the facts will be resolved in favor of the judgment. Arlington Acceptance Corporation v. Taylor, 426 S.W.2d 567 (Tex.Civ.App.—Fort Worth 1968, no writ); Paddock Engineering Co. of Texas v. Rife, 310 S.W.2d 594 (Tex.Civ.App.—Fort Worth 1958, writ ref’d n.r.e.). We have carefully reviewed the entire record, and, in our opinion, the judgment is not so against the weight and preponderance of the evidence as to be manifestly unjust and clearly wrong. This point is overruled.

The judgment of the trial court is affirmed.

AFFIRMED.


author: SPURLOCK, Justice.

text:
    H. A. LATHAM, Administrator of the Estate of Nonnie Lula Allison, Deceased, Appellant, v. O. M. ALLISON, Jr., Executor of the Estate of O. M. Allison, Sr., Deceased, Appellee.
    No. 17910.
    Court of Civil Appeals of Texas, Fort Worth.
    Dec. 8, 1977.
    Rehearing Denied Jan. 12, 1978.

      Stark, Barnhart & Moore and Richard S. Stark, Gainesville, for appellant.
    Jack Connell, Bowie, for appellee.
   OPINION

SPURLOCK, Justice.

This appeal arises out of a suit for an accounting and partition of property between two estates. Finding that the certificates of deposit and bank balances in dispute were the community property of O. M. Allison, Sr., and Nonnie Lula Allison, the trial court ordered that H. A. Latham as administrator of the estate of Nonnie Lula Allison recover from O. M. Allison, Jr., as executor of the estate of O. M. Allison, Sr., the sum of $28,470.59 plus interest at the judgment rate until paid. The personal representative of each estate has perfected an appeal to this court.

We reverse and render judgment for appellant, H. A. Latham, administrator of the estate of Nonnie Lula Allison, for $35,378.62 plus interest at 9% per annum from December 6, 1976, until paid.

O. M. Allison, Sr., and Nonnie Lula Allison were married on April 12, 1953. There were no children born of this marriage. O. M. Allison, Sr. died in March 1970; Nonnie Lula Allison died in October, 1970.

This suit was filed by H. A. Latham, administrator of the estate of Nonnie Lula Allison (appellant), against O. M. Allison, Jr. as executor of the estate of O. M. Allison, Sr. (appellee) and against O. M. Allison, Jr., in his individual capacity and several others who are not involved in this appeal. One of the purposes of the suit was to claim a certain portion of the assets held by the estate of O. M. Allison, Sr. as being the separate property of Nonnie Lula Allison.

O. M. Allison, Jr., as executor of the estate of O. M. Allison, Sr., has perfected an appeal in his representative capacity only, not in his individual capacity. His sole complaint on appeal is that two certificates of deposit upon the death of Allison, Sr. became the property of O. M. Allison, Jr., by virtue of a joint tenancy, rather than community property, which was divided by the trial court in its judgment as one-half belonging to the estate of O. M. Allison, Sr. and one-half belonging to the estate of Nonnie Lula Allison.

An appeal bond was filed by 0. M. Allison, Jr. in his representative capacity as executor of the estate of 0. M. Allison, Sr. The estate’s sole contention on appeal does not concern the estate, but only Allison, Jr. in his individual capacity. Since Allison, Jr. was a party to the suit below, he could have perfected an appeal in his individual capacity, but he did not do so. It cannot be said that he is taking this appeal on behalf of the estate, because if he were to prevail on his “point of error”, the assets of the estate he represents would be diminished, while his own net worth would be increased.

Opposing counsel has moved to dismiss the appeal of Allison, Jr. in his representative capacity, since his only complaint involves a matter that should have been appealed in his individual capacity. We overrule this motion; however, we cannot rule on the “point of error” advanced by 0. M. Allison, Jr., since he has not perfected an appeal in his individual capacity. Neither can we consider the assigned “point of error” as a crosspoint, since it in no way concerns the estate of 0. M. Allison, Sr.

We are also confronted with a motion to dismiss the appeal of H. A. Latham as administrator of the estate of Nonnie Lula Allison, because of failure to file an appeal bond. Movant, 0. M. Allison, Jr., as executor of the estate of 0. M. Allison, Sr., contends that H. A. Latham has a personal interest in the outcome of the litigation, since he is one of the heirs of Nonnie Lula Allison, so that the filing of an appeal bond by him is jurisdictional.

Tex.Prob.Code Ann. § 29 (1956) provides:

“When an appeal is taken by an executor, administrator, or guardian, no bond shall be required, unless such appeal personally concerns him, in which case he must give the bond.” •

Tex.Rev.Civ.Stat.Ann. art. 2276 (1971) provides, in pertinent part:

“Executors, administrators and guardians appointed by the courts of this State shall not be required to give bond on any appeal or writ of error taken by them in their fiduciary capacity.”

The question we are confronted with is: “Does the fact that H. A. Latham is one of the heirs of the decedent mean that the appeal personally concerns him so as to require the filing of an appeal bond, even though he is appealing in his representative capacity on behalf of the estate?”

The case of Roberts v. Roberts, 405 S.W.2d 211 (Tex.Civ.App.—Waco 1966, writ ref’d n.r.e.), has been cited to us by movant for the proposition that a personal representative of an estate must file an appeal bond, if he is also one of the heirs. We do not agree with this interpretation of the Roberts case.

Roberts involved a situation where Estelle Miller was appointed the administra-trix of her mother’s estate. She was one of the beneficiaries of a July, 1962 will. After her appointment, the probate court ordered that a November, 1962 will (which could not be produced) be admitted to probate. Under the November will, Estelle Miller was still a beneficiary, but she would receive a lesser share of her mother’s estate. Upon her appeal from the admission of the November will to probate, the Waco court of civil appeals ruled that the attempted appeal personally concerned Estelle Miller so as to require that she file an appeal bond in order to perfect an appeal. Thus, it can be seen that she had a personal interest in having a particular will admitted to probate, since she would receive a larger share of her mother’s estate under the earlier will. That situation is quite different from the case at bar, where H. A. Latham is acting within the scope of his responsibilities in an attempt to establish the estate’s claims to certain property.

We hold that the mere fact that H. A. Latham is one of the heirs does not mean that the appeal “personally concerns him” within the meaning of the Tex.Prob.Code Ann. § 29 (1956). H. A. Latham is appealing in his representative capacity on behalf of the estate of Nonnie Lula Allison. In such a situation, Tex.Prob.Code Ann. § 29 (1956) and Tex.Rev.Civ.Stat.Ann. art. 2276 (1971) provide that he does not have to give a bond in order to appeal on behalf of the estate. We overrule movant’s motion to dismiss the appeal of H. A. Latham as administrator of the estate of Nonnie Lula Allison.

H. A. Latham, the administrator of the estate of Nonnie Lula Allison (hereafter known as “appellant”), has presented sixteen points of error. By his first three points of error, appellant basically contends that the trial court erred in failing to adjudicate all disputed funds to be the separate funds of the estate of Nonnie Lula Allison.

Prior to her marriage, Nonnie Lula Allison owned as her separate property 144 shares of common stock of the Franklin Life Insurance Company. In varying amounts, this stock was sold during the period of 1959 to 1966. During their marriage, Mr. and Mrs. Allison, Sr. maintained a joint checking account at the First National Bank of Nocona, Texas. Appellant contends that the proceeds of the sale of this stock were deposited into this joint bank account. Further, he contends that the proceeds were then invested in savings certificates at several savings and loan associations, but were later deposited in other certificates at other financial institutions. As he is aware, appellant is confronted with a tracing problem.

In Tarver v. Tarver, 394 S.W.2d 780 (Tex.1965), our supreme court reaffirmed the basic presumption that all property possessed by a husband and wife upon dissolution of their marriage is community property. Tex.Family Code Ann. § 5.02 (1975) perpetuates this same rule. Tarver provides that to discharge the burden imposed by the statute, a spouse (or one claiming through a spouse) must trace and clearly identify the property claimed as separate property; however, when the evidence shows that separate and community property have been so commingled so as to defy segregation and identification, the burden is not discharged and the statutory presumption prevails.

At the outset, we note that the burden of tracing is a difficult, but not impossible burden to sustain. Like other legal doctrines, it has evolved in Texas ease law. To understand this development of the tracing concept in the Texas case law, see Rose v. Houston, 11 Tex. 324 (1854); Hardee v. Vincent, 136 Tex. 99, 147 S.W.2d 1072 (1941); Lindemood v. Evans, 166 S.W.2d 774 (Tex.Civ.App.—San Antonio 1942, writ ref’d); Waheed v. Waheed, 423 S.W.2d 159 (Tex.Civ.App.—Eastland 1967, no writ); West v. Austin National Bank, 427 S.W.2d 906 (Tex.Civ.App.—San Antonio 1968, writ ref’d n.r.e.); In Re Marriage of Greer, 483 S.W.2d 490 (Tex.Civ.App.—Amarillo 1972, no writ); Tarver, supra.

We are aware of the supreme court’s opinion in McKinley v. McKinley, 496 S.W.2d 540 (Tex.1973). While it is the most liberal tracing case that we have seen, it still requires that the property be clearly traced and identified as separate property. In that case, Mr. Royal McKinley had $9500 on deposit in a First Federal Savings & Loan savings account. Because of accrued interest, the account balance had grown to $10,453.81. On January 2, 1968, $10,400 was withdrawn from the savings account and on that same day, it was used to purchase a $10,400 savings certificate in the same financial institution. Thereafter, the certificate remained untouched until Mr. McKinley’s death. Accordingly, our supreme court ruled that $9500 could be traced into the $10,400 certificate as constituting the separate property of Mr. McKinley. There was no doubt in that case that the $9500 separate property was actually deposited into the $10,400 certificate, since it was only a transfer on the books of the same financial institution.

We will compare the facts of the case at bar to the McKinley case to determine whether appellant has sustained his burden of tracing to overcome the statutory community property presumption.

As illustrative of appellant’s tracing of separate property, we shall examine his attempt to trace $5500. The following statements, in summary form, are taken from appellant’s brief:

(1) 72 shares are sold with transfer date of August 25,1959. Proceeds of this sale were $6027.50.
(2) Of the above proceeds, $5500 was deposited in Oak Cliff Savings & Loan Association on August 24, 1959. The above $5500 remained on deposit there until December 30, 1969 (along with $9500 additional funds) when the whole of the account in the sum of $15,000 was withdrawn.
(3) On the above $15,000, the sum of $14,-000 was deposited in a First National Bank of Nocona certificate of deposit where it remained through March 23, 1970, the date of death of O. M. Allison, Sr.
Conclusion: $5500 of the $21,000 certificate of deposit drawn upon First National Bank of Nocona is a portion of the proceeds from the original sale of 72 shares of stock.

Unfortunately, only a few of these statements are supported by the evidence. For example, when the stock was sold for $6027.50, there is no evidence to indicate that the proceeds of that sale constituted the source of the $5500 that went into the Oak Cliff Savings & Loan Association. At best, such a contention is only conjecture. At the time of closing the Oak Cliff account, $15,000 was withdrawn, but again, there is no evidence that this withdrawal was the source of the $14,000 that was deposited into the First National Bank of Nocona.

When tracing separate property, it is not enough to show that separate funds could have been the source of a subsequent deposit of funds. Such conjecture does not constitute sufficient evidence to sustain appellant’s burden of tracing to overcome the community property presumption of the Tex.Family Code Ann. § 5.02 (1975).

We have reviewed the other situations whereby appellant has attempted to trace separate property; however, there is a total absence of evidence to show that the various accounts were actually funded with the proceeds from the sale of the separate stock. Since appellant has not sustained his burden of tracing, the statutory community property presumption prevails. Appellant’s first three points of error are overruled.

By his fourth, seventh, tenth and thirteenth points of error, appellant contends that the trial court erred in its judgment which deducted the following amounts from the funds adjudged to belong to the estate of Nonnie Lula Allison, because there are no pleadings seeking the allowance of such setoffs: (1) one-half of $1063.22 for income taxes paid by the estate of O. M. Allison, Sr., (2) one-half of $5000 “paid on old debts”, (3) one-half of $1752.83 paid on Nonnie Lula Allison’s expenses, and (4) one-half of $6000 for attorney’s fees.

In his pleadings, appellee did not raise the question of any setoffs it might have been due. This should have been done by the filing of a counterclaim. A counterclaim has been defined as:

“ ‘[A] claim, which, if established will defeat or qualify a judgment to which the plaintiff is otherwise entitled. It embraces both setoff and recoupment, and also comprehends reconvention as well as all adversary actions by the defendant in a case.’ . . . The fundamental philosophy of all setoffs is that they are offered by a defendant in opposition to some money demand asserted by a plaintiff. . . .” E. E. Farrow Co. v. United States Nat. Bank of Omaha, 358 S.W.2d 934, 935 (Tex.Civ.App.—Waco 1962, writ ref’d n.r.e.).

The purpose of trying a counterclaim at the time of trying the main suit is to permit all claims of parties arising out of the same transaction or occurrence to be disposed of in one suit and thereby avoid a multiplicity of suits. Carter v. Walton, 469 S.W.2d 462, 467 (Tex.Civ.App.—Corpus Christi 1971, no writ).

Tex.R.Civ.P. 97(a) (1977), concerning compulsory counterclaims, provides:

“A pleading shall state as a counterclaim any claim within the jurisdiction of the court, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction; . . .

We hold that any claims that the estate of O. M. Allison, Sr. had against the estate of Nonnie Lula Allison constituted compulsory counterclaims. Having failed to file any counterclaim, appellee had waived any rights to have the disputed set-offs awarded by the trial court. We sustain appellant’s fourth, seventh, tenth and thirteenth points of error. We hold that it was error for the trial court to allow the disputed setoffs in this case, since such claimed setoffs should have been raised by way of a counterclaim. Since we have held that the setoffs were not raised by the pleadings, we conclude that it is unnecessary to discuss appellant’s “no evidence” and “insufficient evidence” points on the issue of the propriety of the disputed setoffs.

At the time of the trial, there was on deposit a total of $72,078.24, which represents the community property of the parties and accrued interest. One-half of this amount, or $36,039.12, belonged to the estate of Nonnie Lula Allison, less one-half of $1321.01 (which is $660.50) previously paid to Nonnie as a widow’s allowance, of which appellant makes no complaint on appeal. The judgment that the trial court should have rendered for the estate of Nonnie Lula Allison is for $35,378.62.

We reverse the judgment of the trial court and render the judgment that the trial court should have rendered, which is for $35,378.62 to be paid to the estate of Nonnie Lula Allison, plus interest at the rate of 9% per annum from December 6, 1976, until paid.

Costs of this appeal are taxed against appellee.


author: AKIN, Justice.

text:
    FURNITURE DYNAMICS, INC., Appellant, v. ESTATE of Daniel Kevin HURLEY, Deceased, Appellee.
    No. 19335.
    Court of Civil Appeals of Texas, Dallas.
    Dec. 9, 1977.

      Raymond E. North, Dallas, for appellant.
    Thomas H. Cantrill, Jenkens & Gilchrist, Dallas, for appellee.
   AKIN, Justice.

Plaintiff, Furniture Dynamics, Inc., is appealing from an order disallowing its claim filed in the Estate of Daniel Hurley. The probate court disapproved the claim on the grounds that it was barred by res judicata and by limitations. We hold that appellant’s claim was not barred and, accordingly, we reverse the order and remand for further proceedings, not inconsistent with this opinion.

Appellant had filed an earlier claim with the Estate of Daniel Hurley on March 29, 1976. On April 14,1976, the administratrix allowed this claim, but the probate court on December 7, 1976, disapproved it on the ground that the form of the affidavit to the claim did not comply with the requirements of the Texas Probate Code in that although the vice president of Furniture Dynamics, Inc., Jack Christiansen, had signed the claim in his corporate capacity, the jurat used was a form for an individual rather than a vice president of a corporation. No appeal was taken from that order. Subsequently, on January 26, 1977, after apparently hiring an attorney, appellant filed another claim on the same debt, this time with the appropriate corporate jurat attached. The administratrix again allowed the claim, but the probate court disapproved the claim on the grounds that it was barred by res judicata and limitations, and on the ground that the previous order of December 7, 1976, was final.

Appellant argues that res judicata is not applicable here because there was no decision on the merits in the December 7, 1976, order which disallowed the claim for a defect in form. We agree. It is well settled that in order for a judgment to be res judicata it must be rendered on the merits of the controversy. Curtis Publishing Co. v. Mitchell, 92 S.W.2d 488 (Tex.Civ.App.-Dallas 1936, no writ); Swenson v. Swenson, 420 S.W.2d 638 (Tex.Civ.App.-Houston [14th Dist.] 1967, writ dism’d). Here, the order entered by the probate court affirmatively shows that there was no adjudication on the merits. The relevant portion of the order recites:

. . [I]t appearing to the court that the form of said claim does not comply with the requirements of the Texas Probate Code, said claim is hereby disapproved. [Emphasis added]

Likewise, where an order or judgment is a ruling on a technical or procedural aspect of the case, it is not res judicata. Swenson v. Swenson, supra. Thus, appellant’s claim, disapproved on the basis of improper form, was a procedural ruling rather than an adjudication on the merits. Consequently, the December 7 order cannot be res judicata of the claim as a matter of law.

Neither is the claim barred by limitations. The general statute of limitations set forth in Tex.Bus. & Comm.Code Ann. § 2.725 (Vernon 1968) pertaining to accounts is four years. Wilson v. Browning Arms Co., 501 S.W.2d 705, 706 (Tex.Civ. App.-Houston [14th Dist.] 1973, writ ref’d). The record shows that the basis of the claim is invoices dated in February and March of 1974. This claim was filed in January of 1977, clearly within the four year statute. Consequently, § 298(c) of the Texas Probate Code (Vernon 1956), which directs the probate court to disapprove claims barred by a general statute of limitations, is inapplicable.

Finally, appellee argues that the order of the probate court should be affirmed because the order of December 7, 1976, became final thirty days thereafter. Appellee reasons that since § 312(d) of the Texas Probate Code states that any court action on a claim has the same force and effect of a final judgment, and' since Tex.R.Civ.P. 329b(5) provides that a judgment becomes final within thirty days after rendition, if no motion for new trial is filed, the December 7, 1976, order was final. We cannot agree because even though the disapproval may have been final in the sense that it would have been subject to appeal, it was not an adjudication of the claim on the merits and, therefore, did not bar another claim on the same account.

Because § 312(c) of the code provides that even if a claim is properly authenticated and allowed by the personal representative, if the court is not satisfied that the claim is just, it may hear evidence to determine this question, we reverse and remand, rather than render, so that the court may satisfy itself with respect to the claim’s justness.

We confess that we are at a loss to understand why the trial court, after allowance of the earlier claim by the administra-trix, held it from April 21 to December 7, and then disapproved it for an obvious error in form without allowing the claimant an opportunity to amend and correct. Since the only defect was in the jurat, and the administratrix had allowed it, the court would have been justified in approving it without correction. See Jones v. Gibbs, 133 Tex. 627,130 S.W.2d 265, 270 (1939); Trammell v. Blackburn, 116 Tex. 388, 292 S.W. 169 (1927); Lockhart v. White, 18 Tex. 102, 109 (1856). This extraordinary action of the probate court may have delayed the closing of the estate. Certainly, it has resulted in unwarranted expense to both the estate and claimant, as well as unnecessary diversion of judicial time, both in the trial court and on this appeal.

Reversed and remanded.


author: GUITTARD, Chief Justice.

text:
    CITY OF CARROLLTON et al., Appellants, v. Rodney KEELING, Appellee.
    No. 19400.
    Court of Civil Appeals of Texas, Dallas.
    Dec. 12, 1977.
    Rehearing Denied Jan. 12, 1978.

      H. Louis Nichols, Saner, Jack, Sallinger & Nichols, Dallas, for appellants.
    Edward B. Cloutman, III, Mullinax, Wells, Mauzy & Baab, Inc., Dallas, for ap-pellee.
   GUITTARD, Chief Justice.

This suit was brought by a member of the fire department of the City of Carrollton under § 18 of article 1269m, Texas Revised Civil Statutes Annotated (Vernon 1963), to set aside a decision of the Civil Service Commission demoting him from the rank of lieutenant to that of private. The trial court set aside the order and restored plaintiff to his former rank. We reverse on the ground that there was substantial evidence before the court to sustain the decision of the commission.

The authority of the commission to demote a fireman or other officer is found in § 19 of article 1269m, which provides that whenever the head of the fire department desires to demote an officer, he may make a recommendation in writing to the Civil Service Commission, giving the reasons, and if the commission feels that there is probable cause for demotion, it shall give the right to a public hearing, and shall not demote the officer without such a hearing.

The statute does not state explicitly the ground on which an officer may be demoted, but evidently the legislative intent is that the commission should first determine whether the chief’s recommendation states “probable cause” for the recommended demotion, and if the commission determines that “probable cause” is stated, then it must hear the evidence and by implication may demote the officer if it decides that the evidence supports the chief’s statement of probable cause.

The officer’s right to review to the commission’s decision is provided by § 18 of article 1269m. This section provides that the case shall be “tried de novo.” The standard of review, however, is whether the commission’s order is “reasonably supported by substantial evidence,” and the burden is on the officer to satisfy the court that the order is not reasonably supported by substantial evidence. Board of Firemen’s Relief and Retirement Fund Trustees v. Marks, 150 Tex. 433, 242 S.W.2d 181, 183 (1951). The question of whether the decision should be set aside is determined by evidence before the court. Hynes v. City of Houston, 263 S.W.2d 839, 841 (Tex.Civ.App.-Galveston, 1954, writ ref’d n.r.e.). The existence of substantial evidence to support the commission’s order must be determined from the entire record as made in the trial court. Allen v. Herrera, 257 S.W.2d 753, 755 (Tex.Civ.App.-San Antonio, 1953, no writ). Nevertheless, the question is regarded as one of law, and any conflict in the evidence must be resolved in favor of the commission’s decision.

By these standards we must hold that there is substantial evidence in the record before us to support the commission’s decision. Plaintiff Rodney Keeling had been a lieutenant in the fire department for more than three years. He was on duty at night, when a telephone call came from a citizen about an animal in the wall of her house. Next day the caller complained of Keeling’s failure to respond to her call. After investigation, Fire Chief F. J. Douglas made a written recommendation to the Civil Service Commission that Keeling be demoted to the rank of private, citing violation of certain rules of the Civil Service Commission governing the fire department. The charge on which the recommendation was based was stated as follows:

“[0]ne of our fireman, an officer, Lieutenant Rodney Keeling, lightly disregarded a distress call of one of our citizens. The request for aid was rudely dismissed, and no action was taken by the Carrollton Fire Department. Indeed, the caller was implicitly ridiculed for even having the idea that the fire department should be dispatched to her residence.”

We have examined the statement of facts to determine whether this charge is supported by the evidence presented to the trial court. The complainant, Patsy Howard, testified that she called the fire department about eleven o’clock at night, saying that there was no emergency, but that there was an animal flopping around in her wall and she thought it was a bird. She testified that the person who answered the call, later identified as Keeling, told her that the old fire department might have answered calls like getting cats out of trees, but that the new Carrollton Fire Department did not, and he added that he did not know where anybody got the idea to call the fire department about such things. She considered his response rude and sarcastic. She told him that she had called at the suggestion of her brother, a member of the Addison Fire Department, and Keeling’s response was that the Addison firemen were “just trying to harass.” Because of this conduct she was in tears when she hung up the telephone and “felt like an idiot.” She called her brother, who contacted a friend who was an animal control officer for the neighboring city of Addison. He came out and removed the animal.

Keeling’s testimony does not materially dispute Miss Howard’s account of this conversation. He was second in command on the occasion in question and was sleeping by the telephone. He testified that he told Miss Howard that if the animal was a bird, it would probably find its way out, and that although the old fire department used to make animal calls, they had since stopped doing it. He said he told her that the only thing that she might be able to do is to call animal control, but that he did not know whether she could get anyone at that time of night. He admitted that he told her that the Addison firemen were trying to harass him, and he might have said that he did not understand why people thought the fire department made such calls.

Keeling’s explanation of his response is that he was attempting to follow what he believed to be the operating procedures of the fire department. He testified that some time before this incident, Chief Douglas had talked to him and his captain and had told him that since the city had an animal control officer, the fire department would no longer respond to animal calls.

Miss Howard’s brother, Randall Howard, a member of the Addison Fire Department, testified that he received a telephone call from his sister on the night in question about something in her wall and he told her to call the Carrollton Fire Department. She later called him back and was quite upset because she said they were rude and she could not get them to come out and help her. He then called a friend, who was the animal control warden of Addison, who went over and took care of the problem. Next morning Howard called Chief Douglas and inquired why someone was not sent to investigate his sister’s call. He testified that Douglas told him that they no longer made such calls because they had an animal control warden, but they had failed to take into consideration that some of these calls might come in at night, although he felt someone should have gone. Howard testified that Douglas said he believed that there was a breakdown of communication between him and his men and that he was sorry that it had happened.

Jerry Cotton, a paramedic employed by the Carrollton Fire Department, and president of the firemen’s association, corroborated Randall Howard’s account of his conversation with Chief Douglas. He testified that he was present when the chief received the telephone call and heard him say that the department’s policy had been changed in relation to an animal control officer, that apparently there was a breakdown in communications, and that the men did not understand the hours when a control officer was on duty and when they might have to make some calls.

Chief Douglas testified that there had been no change in the policy of the fire department to respond to animal distress calls, but there was a change in operations in that instead of climbing the trees and getting the cats out, they would call the animal control man and let him do it. Douglas insisted, however, that he never said that the department should not respond. He further testified that there was no written operating procedure pertaining to animal distress calls. He said that they never know what a call is, that it may turn out to be an animal or it may be a fire. In this case, the caller had a problem and it was the department’s duty to respond. The rules of the department, he said, required an investigation under such circumstances.

Chief Douglas further testified that in his opinion anyone who received such a call should have dispatched an engine to investigate because the lady was in trouble and was nat definitely sure what her trouble was. It could have been a house afire or could have been an attic burning and shingles falling down. Although Miss Howard thought it was a bird and it turned out to be a rat, it could have been a fire. Douglas further stated that Keeling’s action was in direct violation of the fire department’s rules and could lead to insubordination, since he had written instructions to dispatch an engine to any call for assistance. Although no such rules are in evidence, we must presume in support of the commission’s order that their provisions were as Chief Douglas stated. The chief had recommended to the Civil Service Commission that Keeling should be demoted from his position of authority because he had fáiled to exercise his authority properly, and it was his conclusion, based on his investigation, that reduction to the grade of fireman was appropriate for the actions of Lieutenant Keeling on the night in question.

After the chief received the call from Randall Howard, he notified Keeling of the complaint. According to Keeling’s testimony, he then telephoned Miss Howard and apologized for any misunderstanding, saying that he was acting on what he had been told. Miss Howard's testimony confirms this call and the apology, and she said that as far as she was concerned the matter was over. She also testified that she had a telephone call from Chief Douglas, who told her that there was a misunderstanding because there was an animal control warden and they had not thought about these calls coming up at night. She did not ask Chief Douglas to pursue any further remedies against Keeling, and she thought that the main thing was that other people might be talked to in that way or be made to feel as she had felt.

The civil service rules specified in Chief Douglas’s recommendation were not offered in evidence at the trial, but since the burden of proof was on the officer, we must presume that these rules provided for demotion as a disciplinary measure for the two charges specified in the recommendation, namely, Keeling’s failure to take appropriate action in response to Miss Howard’s call and his discourtesy in responding to her call. In this connection we note that § 5 of article 1269m authorizes the Civil Service Commission to prescribe rules for removal or suspension of firemen and includes among the grounds that may be specified in such rules “neglect of duty; discourtesy by said employee to the public . while said employee is in line of duty” and “violation of any of the rules and regulations of the Fire Department . or of special orders, as applicable.”

With respect to Keeling’s failure to take action, there is a dispute in the evidence concerning his excuse that he was following the department’s policy as he understood it. His testimony is to some extent corroborated by the chief’s statement to Randall Howard the next day indicating that there may have been some misunderstanding among the men as to what action should be taken in response to animal distress calls when the animal control officer was not available to respond. Yet the chief testified that there was a positive written rule requiring all distress calls to be investigated and this rule required that an investigation be made in this case, since the cause of the problem was not definitely determined and it could have been a fire. This testimony tends to support the commission’s findings that Keeling did not make a proper response to the call. Further support for the commission’s decision is provided by the testimony of Keeling and Miss Howard concerning their telephone conversation. Even if Keeling had understood that the fire department’s policy was not to respond to animal distress calls, a reasonable inference may be drawn that he was guilty of discourtesy. Since he admitted that the department had formerly made such calls, he had no reason to tell her that he did not understand why she thought she should call the fire department, or that her call was a matter of harassment instigated by the Addison firemen. This testimony, together with Miss Howard’s statement that Keeling was rude and sarcastic and made her “feel like an idiot,” supports the conclusion that his discourtesy was sufficiently serious to justify disciplinary action. Keeling’s apology by telephone the next day is not necessarily to be taken as an admission of discourteous conduct, but neither does it necessarily negate the propriety of disciplinary action. Thus, we hold that plaintiff has failed to meet his burden of showing that the commission’s finding of grounds for discipline was not reasonably supported by substantial evidence.

Plaintiff argues that he has discharged his burden because he has shown that the penalty imposed, a demotion of two ranks, was so severe as to justify the trial court’s conclusion that the commission’s decision was arbitrary and unreasonable. The disciplinary action does seem harsh to us, as it evidently did to the trial court. Nevertheless, we cannot say that it was arbitrary or unreasonable. A fire department, like a police department, must act promptly and efficiently to protect citizens and their property in situations of great danger, and, consequently, is organized along military lines. An officer of the rank of lieutenant is in a position of responsibility, since he is expected to make decisions on which the lives and safety of firemen and other citizens may depend. Consequently, the confidence of the chief and other members of the department in the supervisory efficiency and judgment of an officer may be a more important consideration than in other types of public employment. Cf. Bolieu v. Firemen’s and Policemen’s Civil Service Comm’n, 330 S.W.2d 234, 236, 237, Tex.Civ.App. (discipline required of firemen beyond that of ordinary callings). In case of a breach of discipline or other infraction of rules on the part of an officer, the head of the department has the initial responsibility to make a recommendation for disciplinary action, and the Civil Service Commission has the function of holding a hearing and determining whether the action recommended is appropriate. The propriety of a particular disciplinary measure to maintain discipline and good order and the suitability of the officer under investigation to continue to exercise supervisory functions are important matters of internal administration with which courts should not interfere in the absence of a clear showing of abuse of authority. When we view the present record in this context, we are unable to say that plaintiff has shown as a matter of law that the Commission’s decision was arbitrary and capricious.

For the reasons stated, the judgment of the trial court is reversed and judgment is here rendered denying plaintiff’s petition to set aside the decision of the Civil Service Commission.